11.13.2017

340B, Addiction Treatment, Senate Bill, and more...

Hospitals Could Get Walloped by 340B Drug Reimbursement Cut

When CMS issued the final outpatient prospective payment system rule last week it etched into regulation what had only been proposed: significant Medicare reimbursement cuts to hospitals for pharmaceuticals. In response, national hospital groups are considering legal challenges against CMS over the cut.

The so-called 340B drug pricing program requires drug manufacturers to provide drugs to eligible healthcare organizations at reduced prices. Only non-profit hospitals that care for a high percentage of public payer patients are eligible for the program. The new outpatient rule means CMS will reimburse hospitals for drugs purchased through the 340B program at the average sales price minus 22.5%, as opposed to the previous standard of average sales price plus 6%. Although CMS will implement the cuts in a budget-neutral manner by increasing payments (and beneficiary out-of-pocket costs) for non-drug items and services, the cuts to the 340B program threaten access to prescription drugs for low-income patients. While the intent behind the cut was to address the high cost of pharmaceutical drug prices, CMS stated that the new payment will reduce Medicare reimbursement to hospitals that serve larger percentages of public patients by $1.6 billion a year.

The American Hospital Association, America's Essential Hospitals, and the Association of American Medical Colleges announced their intention to explore litigating the payment cuts and urged CMS to focus instead on what they said is the real problem – out-of-control cost increases for drugs.

Hospitals Could Get Walloped by 340B Drug Reimbursement Cut

When CMS issued the final outpatient prospective payment system rule last week it etched into regulation what had only been proposed: significant Medicare reimbursement cuts to hospitals for pharmaceuticals. In response, national hospital groups are considering legal challenges against CMS over the cut.

The so-called 340B drug pricing program requires drug manufacturers to provide drugs to eligible healthcare organizations at reduced prices. Only non-profit hospitals that care for a high percentage of public payer patients are eligible for the program. The new outpatient rule means CMS will reimburse hospitals for drugs purchased through the 340B program at the average sales price minus 22.5%, as opposed to the previous standard of average sales price plus 6%. Although CMS will implement the cuts in a budget-neutral manner by increasing payments (and beneficiary out-of-pocket costs) for non-drug items and services, the cuts to the 340B program threaten access to prescription drugs for low-income patients. While the intent behind the cut was to address the high cost of pharmaceutical drug prices, CMS stated that the new payment will reduce Medicare reimbursement to hospitals that serve larger percentages of public patients by $1.6 billion a year.

The American Hospital Association, America's Essential Hospitals, and the Association of American Medical Colleges announced their intention to explore litigating the payment cuts and urged CMS to focus instead on what they said is the real problem – out-of-control cost increases for drugs.

State Senate’s New Reform Bill Raises Cautions

The healthcare “cost-containment and reform” bill that the Massachusetts Senate passed at midnight last Thursday offer some positive steps forward –such as expanded patient access to telemedicine services – but is also fraught with new layers of regulation over existing regulation, penalties, and problematic new benchmarks that were all passed at a time when uncertainty from Washington has placed continuing federal support for the state’s reform efforts in question.

The bill sets a benchmark for commercial hospital spending far below the existing statewide total healthcare spending benchmark of 3.1%. Separating out hospital spending at a time when hospitals have been driven to coordinate intertwined healthcare entities encompassing all part of the healthcare system appears to run counter to the state’s own “global payment” or “accountable care” models based on total medical expense.

Among other provisions, the Senate’s bill includes an aggressive and punitive readmission standard that runs counter to the experience of national readmission-reduction efforts that are beginning to recognize that the causes of readmissions run far beyond a hospital’s control.

The final Senate bill did make some important fixes to initial Senate language relating to the prohibition of facility fees. By adopting a re-draft of an MHA-endorsed amendment, the Senate recognized the potential effect its language posed to important community services and preserved the ability of existing facilities to receive such fees. 
 
“The broad intent of the Senate bill – reducing costs and improving quality – is a goal that hospitals and the wider healthcare community  share and we applaud the Senate for its effort,” said MHA President & CEO Steve Walsh. “We look forward to continuing the discussion to make sure that access for patients doesn’t become inhibited by the unintended consequences of well-meaning proposals.”

State Senate’s New Reform Bill Raises Cautions

The healthcare “cost-containment and reform” bill that the Massachusetts Senate passed at midnight last Thursday offer some positive steps forward –such as expanded patient access to telemedicine services – but is also fraught with new layers of regulation over existing regulation, penalties, and problematic new benchmarks that were all passed at a time when uncertainty from Washington has placed continuing federal support for the state’s reform efforts in question.

The bill sets a benchmark for commercial hospital spending far below the existing statewide total healthcare spending benchmark of 3.1%. Separating out hospital spending at a time when hospitals have been driven to coordinate intertwined healthcare entities encompassing all part of the healthcare system appears to run counter to the state’s own “global payment” or “accountable care” models based on total medical expense.

Among other provisions, the Senate’s bill includes an aggressive and punitive readmission standard that runs counter to the experience of national readmission-reduction efforts that are beginning to recognize that the causes of readmissions run far beyond a hospital’s control.

The final Senate bill did make some important fixes to initial Senate language relating to the prohibition of facility fees. By adopting a re-draft of an MHA-endorsed amendment, the Senate recognized the potential effect its language posed to important community services and preserved the ability of existing facilities to receive such fees. 
 
“The broad intent of the Senate bill – reducing costs and improving quality – is a goal that hospitals and the wider healthcare community  share and we applaud the Senate for its effort,” said MHA President & CEO Steve Walsh. “We look forward to continuing the discussion to make sure that access for patients doesn’t become inhibited by the unintended consequences of well-meaning proposals.”

QUALITY CORNER: BMC Links Patients to Outpatient Addiction Treatment Services

Caregivers at Boston Medical Center (BMC) have released a study outlining how the hospital’s Addiction Consult Service (ACS) may be making a significant dent in the problem of inpatients with substance use disorder (SUD) relapsing into addiction – and being readmitted – shortly after discharge.

Numerous studies have shown that many inpatients (15% by one Massachusetts study) have an active SUD, and that they’re likely to be readmitted within 30 days of discharge. But treating a patient for substance use disorder in addition to whatever other forms of treatment the hospital is providing often does not occur.

“Barriers to inpatient initiation of medications for [opioid use disorder] include the limited availability of outpatient providers and programs, lack of insurance coverage, and federal privacy regulations that make coordinating and integrating medical and addiction care difficult,” BMC researchers wrote in the Journal of Substance Use Treatment. 
To address the problem, BMC created its Addiction Consult Service in July 2015. The physician-RN ACS team meets with the patient, provides brief bedside counseling, initiates addiction-treatment medications, and formulates discharge planning.

“Discharge work for the ACS included collaborating with the primary hospital medical team, social work, and hospital case management, as well as coordination with and linkage to post-discharge addiction providers,” according to the study. “The ACS regularly collaborated with social work within the hospital and held weekly joint rounds with the Psychiatry Consult and Liaison service.”

Two BMC outpatient clinics and three local methadone clinics were the main post-discharge linkages.
BMC reports that over the first 26 weeks, the ASC received 367 referrals resulting in 337 consults. (Some patients left against medical advice, refused to be seen, etc.)

“Like heart disease can cause a heart attack or a stroke, addiction causes many acute injuries requiring immediate attention, but we can’t simply treat that issue without delving deeper to address the root cause,” said Alex Walley, MD, MSc, a general internist at BMC’s Grayken Center for Addiction who also oversees the addiction medicine fellowship. “Our goal is to engage willing patients in treatment and work with them on a plan that will keep them healthy and safe now and in the future.”

MHA’s V.P. of Clinical Affairs Pat Noga, RN, FAAN, who is involved in the association’s work on opioids, said BMC’s ACS work is well-known within the caregiving community and provides a template for work by other hospitals or state efforts going forward.

Click on the link to read the full study: Addiction consultation services – Linking hospitalized patients to outpatient addiction treatment.

And click here to read about the efforts of MHA's Substance Use Disorder Prevention and Treatment Task Force that has developed guidelines for hospital to use in addressing the opioid crisis.

QUALITY CORNER: BMC Links Patients to Outpatient Addiction Treatment Services

Caregivers at Boston Medical Center (BMC) have released a study outlining how the hospital’s Addiction Consult Service (ACS) may be making a significant dent in the problem of inpatients with substance use disorder (SUD) relapsing into addiction – and being readmitted – shortly after discharge.

Numerous studies have shown that many inpatients (15% by one Massachusetts study) have an active SUD, and that they’re likely to be readmitted within 30 days of discharge. But treating a patient for substance use disorder in addition to whatever other forms of treatment the hospital is providing often does not occur.

“Barriers to inpatient initiation of medications for [opioid use disorder] include the limited availability of outpatient providers and programs, lack of insurance coverage, and federal privacy regulations that make coordinating and integrating medical and addiction care difficult,” BMC researchers wrote in the Journal of Substance Use Treatment. 
To address the problem, BMC created its Addiction Consult Service in July 2015. The physician-RN ACS team meets with the patient, provides brief bedside counseling, initiates addiction-treatment medications, and formulates discharge planning.

“Discharge work for the ACS included collaborating with the primary hospital medical team, social work, and hospital case management, as well as coordination with and linkage to post-discharge addiction providers,” according to the study. “The ACS regularly collaborated with social work within the hospital and held weekly joint rounds with the Psychiatry Consult and Liaison service.”

Two BMC outpatient clinics and three local methadone clinics were the main post-discharge linkages.
BMC reports that over the first 26 weeks, the ASC received 367 referrals resulting in 337 consults. (Some patients left against medical advice, refused to be seen, etc.)

“Like heart disease can cause a heart attack or a stroke, addiction causes many acute injuries requiring immediate attention, but we can’t simply treat that issue without delving deeper to address the root cause,” said Alex Walley, MD, MSc, a general internist at BMC’s Grayken Center for Addiction who also oversees the addiction medicine fellowship. “Our goal is to engage willing patients in treatment and work with them on a plan that will keep them healthy and safe now and in the future.”

MHA’s V.P. of Clinical Affairs Pat Noga, RN, FAAN, who is involved in the association’s work on opioids, said BMC’s ACS work is well-known within the caregiving community and provides a template for work by other hospitals or state efforts going forward.

Click on the link to read the full study: Addiction consultation services – Linking hospitalized patients to outpatient addiction treatment.

And click here to read about the efforts of MHA's Substance Use Disorder Prevention and Treatment Task Force that has developed guidelines for hospital to use in addressing the opioid crisis.

Hospital Teams Receive Award for Their Caring Response to Trauma

Congratulations to the 2017 HOPE Awards recipients Dr. Ken Sands, Dr. Evan Benjamin, and the teams they led at Beth Israel Deaconess Medical Center and Baystate Health for their work in implementing the Communication and Resolution (CARe) program.  The HOPE Award is presented annually by MITSS, which focuses on patients, family members, and healthcare providers involved in medically induced trauma, and which helps those affected access healing support services. MITSS also conducts programs and trainings to improve how the healthcare system responds to medically induced trauma.

Through CARe programs, provider organizations commit to transparent Communication, sincere Apologies and fair compensation Resolution in cases of avoidable medical harm.  CARe materials are available through the Massachusetts Alliance for Communication and Resolution following Medical Injury (MACRMI); MHA is a founding member of MACRMI.

Hospital Teams Receive Award for Their Caring Response to Trauma

Congratulations to the 2017 HOPE Awards recipients Dr. Ken Sands, Dr. Evan Benjamin, and the teams they led at Beth Israel Deaconess Medical Center and Baystate Health for their work in implementing the Communication and Resolution (CARe) program.  The HOPE Award is presented annually by MITSS, which focuses on patients, family members, and healthcare providers involved in medically induced trauma, and which helps those affected access healing support services. MITSS also conducts programs and trainings to improve how the healthcare system responds to medically induced trauma.

Through CARe programs, provider organizations commit to transparent Communication, sincere Apologies and fair compensation Resolution in cases of avoidable medical harm.  CARe materials are available through the Massachusetts Alliance for Communication and Resolution following Medical Injury (MACRMI); MHA is a founding member of MACRMI.

Congressional Tax Plan Affects Healthcare

Congressional focus on a tax cut package has moved forward quickly following the initial release last week by the House Ways and Means Committee. The committee has spent several days this week deliberating amendments to their proposal and has twice posted revisions to the plan.  The Senate Finance Committee plans to release its own tax cut package.  The House draft plan affects healthcare providers in numerous ways, including:


* Eliminating the ability to deduct qualified medical expenses. Current law allows for the deduction of medical expenses which exceed 10% of gross income for individuals who itemize deductions.

* Repealing the tax exemption for interest on private activity bonds, including qualified 501 (c)(3) hospital bonds.
Taxing tax-exempt entities on the value of providing employees with certain nontaxable fringe benefits, including qualified transportation and parking.  This would be accomplished by including these items as unrelated business income.  A comparable provision would apply to taxable entities; the employer would not be able to deduct the cost of such fringe benefits.

* Imposing a 20% excise tax on compensation in excess of $1 million paid to any of the five highest paid employees of a not-for-profit organization.  This would be effective for taxable years beginning after Dec. 31, 2017, with no transition rule for compensation paid under existing binding contracts. A similar provision already exists in the for-profit sector (denying a deduction for such compensation) and it would be tightened in the proposal.

* Raising the charitable contribution deduction limitation for cash contributions from 50% of adjusted gross income (AGI) to 60% of AGI, but the increase in the individual standard deduction and elimination of other itemized deductions could prevent middle-income taxpayers from having a tax benefit for their charitable donation, possibly affecting both the charitable organization and employee giving campaigns.

* Eliminating the 50% tax credit for rare disease research. The cost of such research should still qualify for the R&D credit (which provides a lower credit).

All of these provisions would be effective in taxable year 2018.

Congressional Tax Plan Affects Healthcare

Congressional focus on a tax cut package has moved forward quickly following the initial release last week by the House Ways and Means Committee. The committee has spent several days this week deliberating amendments to their proposal and has twice posted revisions to the plan.  The Senate Finance Committee plans to release its own tax cut package.  The House draft plan affects healthcare providers in numerous ways, including:


* Eliminating the ability to deduct qualified medical expenses. Current law allows for the deduction of medical expenses which exceed 10% of gross income for individuals who itemize deductions.

* Repealing the tax exemption for interest on private activity bonds, including qualified 501 (c)(3) hospital bonds.
Taxing tax-exempt entities on the value of providing employees with certain nontaxable fringe benefits, including qualified transportation and parking.  This would be accomplished by including these items as unrelated business income.  A comparable provision would apply to taxable entities; the employer would not be able to deduct the cost of such fringe benefits.

* Imposing a 20% excise tax on compensation in excess of $1 million paid to any of the five highest paid employees of a not-for-profit organization.  This would be effective for taxable years beginning after Dec. 31, 2017, with no transition rule for compensation paid under existing binding contracts. A similar provision already exists in the for-profit sector (denying a deduction for such compensation) and it would be tightened in the proposal.

* Raising the charitable contribution deduction limitation for cash contributions from 50% of adjusted gross income (AGI) to 60% of AGI, but the increase in the individual standard deduction and elimination of other itemized deductions could prevent middle-income taxpayers from having a tax benefit for their charitable donation, possibly affecting both the charitable organization and employee giving campaigns.

* Eliminating the 50% tax credit for rare disease research. The cost of such research should still qualify for the R&D credit (which provides a lower credit).

All of these provisions would be effective in taxable year 2018.

Last Chance to Register for Schwartz Dinner

The 22nd Annual Kenneth B. Schwartz Compassionate Healthcare dinner is scheduled for Thursday, Nov. 16, at the Boston Convention and Exhibition Center.  Governor Charlie Baker will be the guest speaker and will present the caregiver of the year award. Tickets are still available by clicking here.

Last Chance to Register for Schwartz Dinner

The 22nd Annual Kenneth B. Schwartz Compassionate Healthcare dinner is scheduled for Thursday, Nov. 16, at the Boston Convention and Exhibition Center.  Governor Charlie Baker will be the guest speaker and will present the caregiver of the year award. Tickets are still available by clicking here.

MHA’s Defossez to Lead SHAPE in ‘18

Congratulations to MHA’s VP of Clinical Integration Steven Defossez, M.D., who last Thursday was named chair of the State Hospital Association Physician Executives (SHAPE) for the 2018 term. SHAPE is made up of hospital and health system association physician executives who work together on common goals. Defossez says his main aims for SHAPE in 2018 are to effectively address the opiate epidemic, physician engagement, and physician burnout.

MHA’s Defossez to Lead SHAPE in ‘18

Congratulations to MHA’s VP of Clinical Integration Steven Defossez, M.D., who last Thursday was named chair of the State Hospital Association Physician Executives (SHAPE) for the 2018 term. SHAPE is made up of hospital and health system association physician executives who work together on common goals. Defossez says his main aims for SHAPE in 2018 are to effectively address the opiate epidemic, physician engagement, and physician burnout.

Transforming Healthcare to Be Inclusive of LGBTQ Patients

Wednesday, January 10, 2018; 9 a.m. – 12 p.m.
MHA Conference Center, Burlington, Mass.

Caring for specific populations – and ensuring that they are receiving equitable, high-quality care – can be daunting in today’s fast-paced environment. Despite the challenges, the effort to eliminate population-based health disparities is critical. This program will help practitioners have a better understanding of the needs of LGBTQ patients. We will review basic principles of practice transformation, LGBTQ-specific health disparities, and steps to take to ensure that all receive access to high-quality, equitable care. Issues affecting both organizational structures, systems, and interpersonal communications will be described, including involvement of both leadership and staff. We’ll look at how to collect data to learn patient needs, and describe examples of how to communicate affirmatively with patients about their care. We hope you’ll join us at this timely program. View speaker list and registration details here.

Transforming Healthcare to Be Inclusive of LGBTQ Patients

Wednesday, January 10, 2018; 9 a.m. – 12 p.m.
MHA Conference Center, Burlington, Mass.

Caring for specific populations – and ensuring that they are receiving equitable, high-quality care – can be daunting in today’s fast-paced environment. Despite the challenges, the effort to eliminate population-based health disparities is critical. This program will help practitioners have a better understanding of the needs of LGBTQ patients. We will review basic principles of practice transformation, LGBTQ-specific health disparities, and steps to take to ensure that all receive access to high-quality, equitable care. Issues affecting both organizational structures, systems, and interpersonal communications will be described, including involvement of both leadership and staff. We’ll look at how to collect data to learn patient needs, and describe examples of how to communicate affirmatively with patients about their care. We hope you’ll join us at this timely program. View speaker list and registration details here.

John LoDico, Editor