The high cost of pharmaceuticals is well documented and the commonwealth is undertaking numerous efforts to achieve savings. For example, new budget language adopted this year improves the ability for the state to negotiate with pharmaceutical manufacturers on their pricing through the form of supplemental drug rebates in the MassHealth program. For many Massachusetts hospitals, the federal 340B program is the vehicle that provides needed savings for purchasing medication and drug therapies for their patients.
  
But now the Executive Office of Health & Human Services (EOHHS) has released proposed regulations that would give MassHealth the authority to designate and exclude from MassHealth coverage high-cost drugs that are purchased under the 340B program. Drugs that have been referenced as high-cost for purposes of the regulation are gene and cell therapy drugs that can cost more than $1 million per patient. If MassHealth is able to limit 340B coverage for certain drugs at its own discretion, then affected hospitals would have to – under federal guidelines – purchase the drugs at a higher cost.
 
Last week, MHA, after consultation with its members, wrote a letter to EOHHS, stating that any 340B savings that the state may gain by excluding certain expensive drugs “must be considered with great caution in recognition of the serious financial implications on disproportionate share, pediatric, and sole community hospitals, as well as other healthcare providers.” Hospitals heavily rely on 340B financing to support the medications and drug therapies provided to their patients, including those covered by MassHealth. The savings yielded by the 340B program also extend beyond pharmacy and help to support the entire mission of hospitals. Limitations on these savings therefore puts into question the financing that supports care provided to patients, MHA said in its letter. 
 
To better align with the intent of the proposed regulation, MHA advocated for greater clarification in the regulations related to the definition of “high cost” drugs that could be excluded. It also recommended changes to the reimbursement for such drugs and a more robust engagement process between MassHealth and 340B providers. MHA noted that the acquisition cost of complex drugs oftentimes does not factor in the cost of providing them to MassHealth patients. That is, the drugs are so complex in their formulation and application that hospitals incur costs in storing them, transporting them, or assembling teams of caregivers to apply them to patients.
 
MHA’s Senior Director of State Government Finance and Policy Dan McHale testified at a MassHealth hearing last Friday on the pharmacy proposal, stating, “Addressing the high and growing cost of pharmaceuticals is an effort we and our members are committed to collaborating on with MassHealth. The federal 340B program is a critical component to this effort, not only for hospitals but the commonwealth as a whole. MHA believes there is a path to using the proposed state approach in a very limited capacity if it incorporates hospital recommended changes to the proposed regulation and process. Otherwise, we would have significant reservations.”

The Fifth Circuit Court of Appeals ruling last Wednesday that the Affordable Care Act's (ACA’s) individual mandate provision is unconstitutional does not invalidate the Massachusetts individual mandate that has been in effect since passage of the state’s historic Chapter 58 health reform law.
 
The Appeals ruling means that the case goes back to the back to the U.S. District Court in Texas where it originated, and that the judge there – Reed O'Connor – will reconsider what provisions of the ACA should remain intact. O’Connor has opined that the entire ACA should be scrapped.
 
The court’s ruling relates to the federal tax penalty, or lack of one, associated with the ACA’s individual mandate and is, therefore, not applicable to the Massachusetts mandate. However, if the entire ACA law or other elements are invalidated, Massachusetts would take a massive hit. A Blue Cross Blue Shield Foundation brief shows how overturning the ACA would result in 375,000 Massachusetts residents losing coverage, the state losing $2.4 billion in federal funding, and uncompensated care increasing by $400 million.
 
Legal observers are predicting that the case that has been bounced back to Texas will eventually end up in the U.S. Supreme Court.

Hospitals had about a week of rejoicing over a CMS decision to repay hospitals the Medicare funds it withheld relating to certain services provided at grandfathered off-campus hospital provider-based departments. A U.S. District Court judge had ruled in September that the cuts, contained in the 2019 outpatient prospective payment system (OPPS) rule, overrode Congressional intent and had to be refunded. However, the 2020 OPPS rule continues to phase in the same off-campus provider-based department cuts that the court vacated. 
 
The American Hospital Association and others brought suit against CMS, asking the court to reject the 2020 rule cuts for the same reasons it rejected the 2019 cuts. But on December 16, the court ruled that while the 2019 challenge was within its jurisdiction, the 2020 challenge isn’t because hospitals haven’t exhausted their “administrative remedies” with CMS. That is, they haven’t filed 2020 claims and had them rejected by CMS as they had in 2019. 
 
The judge noted, “To be clear, CMS clearly disregarded the substance of the court’s decision” in the 2019 case when setting the 2020 reimbursement rates. And she noted that CMS had complained about the administrative costs associated with reimbursements relating to the 2019 rule, but that the agency “has now intentionally placed itself in a position to suffer those same alleged harms, which calls its argument into serious question and appears to set the agency above the law.”
 
The AHA responded to the ruling, saying that hospitals would indeed take the necessary step of first filing 2020 claims before returning to court, adding, “The AHA and other plaintiffs remain confident that the courts will find the 2020 cuts to be illegal, just as they found the 2019 cuts."

The $1.4 trillion spending deal that the House and Senate approved and that the president was expected to sign last Friday delays scheduled cuts to disproportionate share hospitals through May 22, 2020. The Medicaid DSH cuts have been delayed by various mechanisms since 2013. The cuts are tied to a provision in the Affordable Care Act, which reasoned that hospitals would care for fewer uninsured patients as health coverage expanded nationwide. However, the nationwide expansion has been stalled in a number of states, and in states like Massachusetts that did expand Medicaid coverage, hospitals are incurring significant financial losses given the inherent provider underpayment in the program. Delaying the cuts to May of next year is good news for Massachusetts, which stands to lose hundreds of millions of dollars if the cuts go through. MHA has been in regular contact with the Massachusetts congressional delegation in support of a long-term delay and permanent fix.

The Center for Health Information and Analysis (CHIA) last week issued its latest report on all-payer, hospital-wide adult readmissions in Massachusetts, showing that the unplanned readmission rate for Massachusetts acute care hospitals in 2018 was 15.4% – unchanged from the previous year. 
 
CHIA’s analysis found that frequently hospitalized patients (those hospitalized four or more times in the previous 12 months) made up 6% of the overall patient population, but accounted for 52% of all readmissions. The top patient diagnoses for readmissions were heart failure, sepsis, and COPD.
 
In its second Behavioral Health Readmissions report released in October 2019, CHIA found that 45% of adults hospitalized in Massachusetts acute care hospitals had at least one co-morbid behavioral health condition, and the readmission rate for patients with any behavioral health co-morbidity was nearly double the readmission rate for patients without a co-occurring behavioral health condition.
  
In FY2019, MassHealth introduced a new 30-day readmission policy that addresses readmissions deemed to be clinically related to prior admissions and preventable. Thus far, the number of readmissions determined to be preventable has been overwhelming low. Through the first seven months of the policy, only 5% of clinically related readmission cases were determined preventable; that amount represents a small fraction of total MassHealth inpatient discharges. An MHA analysis of the recent CHIA report found that it also includes “swing beds” in calculating readmission rates for some hospitals, unfairly skewing the results against those facilities.
 
Not noted in the report is the fact that Massachusetts hospitals, according to a 2019 report card from the Commonwealth Fund, score the best in the country for hospital 30-day mortality. That is, while readmission rates remain stagnant in the state, the likelihood of people dying in hospitals is lower in the commonwealth than in other states.

Massachusetts Association of Healthcare Quality (MAHQ) has expanded out of state and is now the New England Association of Healthcare Quality (NEAHQ). The quality association has been in existence since 1975 and is open to all healthcare professionals who are interested in improving healthcare quality. As part of its name change and expansion, NEAHQ re-designed and improved its website. 

Roberta Herman, M.D., has been named the new president and CEO of Joslin Diabetes Center, effective January 9, 2020. Herman replaces Peter Amenta, M.D., PhD, who served four years as the facility’s president and CEO. Herman comes to Joslin after nearly four years as Executive Director of the state’s Group Insurance Commission. She completed her residency in Internal Medicine at the Royal Victoria Hospital (Montreal, Canada) and received a Masters equivalent degree in Epidemiology and Biostatistics from McGill University while doing a fellowship year in Community Medicine.
 
Rep. Jennifer Benson (D-Lunenburg), chair of the influential House Committee on Health Care Financing, has announced her resignation to head up the Alliance for Business Leadership.

53rd Annual Mid-Winter Leadership Forum

Friday, February 7, 2020; 8:30 a.m. to 2:45 p.m.
Boston Marriott Newton

This is the winter event, so don’t miss it! We’re continually revising the speaker list and are happy to announce that Massachusetts Health & Human Services Secretary Marylou Sudders has agreed to address the gathering.
  
Another speaker for this well-attended event is Stephen K. Klasko, M.D., president and CEO of Jefferson Health in Philadelphia. He’s a transformative leader and advocate for healthcare and higher education. His 2018 book, Bless This Mess: A Picture Story of Healthcare in America, follows on the heels of his highly successful 2016 book, We Can Fix Healthcare: The Future is Now.
  
Join your colleagues from around the state for MHA’s signature winter event, which will also feature a political roundtable discussion. Learn more and register by visiting here.