With slim majorities in Congress, Democrats could use budget reconciliation to pass another coronavirus stimulus measure and other priorities without Republican votes.
Reconciliation can be used to enact legislation using expedited procedures in the Senate, but it must be budgetary in nature under what’s known as the Byrd Rule. That can limit the types of policies that are included because they generally have to affect mandatory spending or revenue and can’t increase the deficit outside the covered budget period.
The Biden administration is discussing its $1.9 trillion stimulus plan with lawmakers but some are pushing back against the price tag, especially after December’s $900 billion package. Without bipartisan support, Democrats may have to drop some provisions to get a package through using reconciliation. That could include proposals to increase the minimum wage, though House Budget Chairman John Yarmuth (D-Ky.) said they may still try to include it.
Democrats could also use reconciliation to pass other items on their agenda, such as health care, tax, climate, or infrastructure legislation.
The procedure has been used more than 20 times since the 1980s to pass major legislation, including a welfare overhaul , tax cuts, and the 2010 Affordable Care Act. Most recently, Republicans used it to pass a sweeping overhaul of the tax code in 2017 under President Donald Trump.
The attached presentation covers reconciliation procedures, how Democrats could use the process, and previous laws enacted through reconciliation — and some attempts that fell short.
The COVID-19 public health emergency is expected to continue through the end of 2021, Acting HHS Secretary Norris Cochran wrote in a Jan. 22 letter to governors, signaling the temporary 6.2% bump in federal Medicaid matching funds and a slew of other Medicare and Medicaid emergency waivers put in place during the pandemic will not end soon. HHS will give states 60 days’ notice before the public health emergency ends so they can plan for the end of the higher Medicaid match rates, Cochran said.
A year-long extension of the PHE would leave in place emergency use authorizations for diagnostics, treatments, and vaccines and potentially could lead to new HHS policies to help states respond to the COVID-19 emergency.
“To assure you of our commitment to the ongoing response, we have determined that the PHE will likely remain in place for the entirety of 2021, and when a decision is made to terminate the declaration or let it expire, HHS will provide states with 60 days’ notice prior to termination,” Cochran’s letter says.
Cochran says the 60-days’ notice of the PHE’s end will help provide stability for states, as they can plan for the end of the 6.2% bump in federal Medicaid funding. That funding increase stops at the end of the quarter when the public health emergency ends.
“With the extension and additional advance notice, we seek to provide you with increased budgetary stability and predictability during this challenging time,” Cochran tells governors.
Congress required states to keep Medicaid beneficiaries continuously enrolled throughout the COVID-19 public health emergency as a condition of receiving more federal Medicaid money. Experts predict up to 30% of Medicaid beneficiaries could lose insurance once the COVID-19 public health emergency ends, unless the Biden administration steps in.
Cochran notes that the extended public health emergency means waivers for Medicare, Medicaid and CHIP will remain in place, along with other waivers. This includes 1135 waivers and PREP Act waivers, both of which have been used to ease telemedicine during the pandemic, particularly in Medicare.
A recent Commonwealth Fund analysis from Jennifer Podulka, senior consultant for Health Management Associates, says that for Medicare alone, more than 200 legislative and regulatory changes have been put in place since the start of 2020. Most Medicare providers have been affected, Podulka says, though hospitals and post-acute care providers have seen the most changes.
“The Biden administration has inherited this slate of temporary COVID-related Medicare regulatory changes and will have to decide whether and how to extend these policies given the state of the pandemic and its impact on health care providers. As the new administration addresses the ongoing pandemic with the new phase of vaccinations underway, it is likely that regulatory and subregulatory changes will continue to be introduced and modified to reflect the administration’s COVID and Medicare policies,” Podulka says.
Cochran’s letter says HHS’ goal is to make sure enough health care services and items are available during the emergency to meet the needs of those on Medicare, Medicaid and CHIP and their providers.
Lobbyists and stakeholders are urging the incoming Biden administration to tackle health care changes through an administrative lens, coming as the courts face pressure to watch how the new administration acts on key policies before moving on cases involving regulations like the public charge rule. Health care advocates also enter 2021 with ambitious legislative agendas, the outcome of which could hinge on Georgia’s special Senate elections. Yet, the immediate health care focus in 2021 will be on COVID-19.
In addition to crafting its own national COVID-19 response strategy, the new administration will need to decide how to address a slew of coronavirus regulatory waivers put in place by the Trump administration.
The outgoing Trump administration also spent its last few months instituting new demonstration projects, regulations and advisory opinions that the incoming administration — and Biden’s HHS secretary pick Xavier Becerra — will have to factor into their plans.
Senate Finance ranking Democrat Ron Wyden (OR) and committee member Tom Carper (D-DE) are pressing Finance Chair Charles Grassley (R-IA) to quickly begin the confirmation process for Becerra the Treasury nominee so they are in a position to tackle the pandemic and the economy on day one of the new administration.
COVID-19. The federal government will wait until late January, after the new administration takes office, to begin a national campaign to combat skepticism of the COVID-19 vaccine, HHS officials told reporters Tuesday (Dec. 29). Career officials said they would have preferred starting the campaign earlier, but public health officials face high levels of public distrust under the Trump administration.
Recent polls show that roughly half of the population is unsure whether to take a COVID-19 vaccine when it’s available to them. National Institutes of Allergy and Infectious Diseases Director Anthony Fauci recently said as many as 90% of Americans need to get vaccinated for the country to achieve herd immunity.
Meanwhile, FDA wants developers of at-home and over-the-counter COVID-19 tests to ensure their testing platforms are set up to report users’ results to public health officials, but one cybersecurity consultant warns that allowing software to share user information raises the potential for cybersecurity and data integrity issues.
Innovation center and value-based care. The Trump HHS is saddling the incoming administration with a series of new Medicare demos, and stakeholders are watching to see whether the Biden team will embrace them. For example, in early December CMS released the third part of the innovation center’s direct contracting demonstration, known as the Geographic Direct Contracting Model, or Geo, but the full-risk demo, which will require participants to take on risk for beneficiaries in an entire geographic region, isn’t slated to get started until 2022, well into President-elect Joe Biden’s term.
CMS Administrator Seema Verma has said this shouldn’t be a problem, but stakeholders are split on whether the Biden administration should continue it. America’s Physician Groups supports the demo, while the Center for Medicare Advocacy and the National Association of Accountable Care Organizations want the Biden administration to put it on hold.
Meanwhile, the American Society for Radiation Oncology wants to work with HHS on changes to the mandatory radiation oncology demonstration once the Biden administration takes office in January. Congress in its 2020 year-end law delayed the start date of the highly criticized CMS radiation oncology model demonstration until Jan. 1, 2022, six months beyond what CMS proposed in a final rule earlier in December but in line with what stakeholders had requested.
The Health Care Transformation Task Force is urging the Biden administration to publicly support value-based pay and the innovation center overall, after Verma recently said the entire center needs a course correction as few models have seen success.
“At the core of CMS’s current analysis appears to be a flawed approach to VBP model evaluations, and we believe a better way to evaluate models is needed. The HCTTF is actively gathering perspectives on better ways to modernize evaluations of VBP models from experts and will share with CMS any resulting recommendations in early 2021,” the task force says in a Dec. 18 letter to incoming administration.
The group also says CMS’ view “appears to be premised on the conclusion that net savings to the Medicare program is the sole measure of success. We disagree here too.”
The group calls for CMS, in the first 100 days of the new administration, to begin a national dialogue about the innovation center’s operations, models, evaluations and lessons learned. There are circumstances where the net savings for a model might not be positive, but the CMS chief actuary could find that an expanded, permanent model would achieve savings — especially if a national model moved from voluntary to mandatory participation as part of an expansion, the group says.
Medicare administrative changes. Aside from work by the innovation center, the Center for Medicare Advocacy says there are numerous changes that the incoming administration could tackle to improve Medicare. These include long-standing requests by the group for CMS to improve the Medicare appeals system, increase access to durable medical equipment for those dually eligible for Medicare and Medicaid, enforce the Jimmo v. Sebelius court decision and hold more meetings with advocates.
The advocates also want the incoming administration to withdraw the Trump administration’s proposed SUNSET rule that they worry could lead to the expiration of critical Medicare and other regulations. The rule, proposed by HHS the morning after the election, calls for the department to review its rules every 10 years to determine whether they’re still necessary or too burdensome.
The advocates also make the case that the incoming administration can — and should — change how beneficiaries’ time in a hospital under outpatient observation factors into whether Medicare covers a nursing home stay. They also say Medicare can, and again should, make sure it covers medically necessary dental care.
The center also says the Biden administration should rescind the so-called public charge rule, arguing the rule creates “almost insurmountable barriers to entry into the United States for older immigrants.”
The courts. Democratic states and consumer advocates are asking the Supreme Court not to take up a lower court ruling that paused the Trump administration’s controversial public charge policy that denies green cards for immigrants who could benefit from public programs including Medicaid, arguing in briefs filed Dec. 9 that the high court should sidestep the case because the incoming Biden administration is likely to overturn the public charge policy.
In other court news, the U.S. Court of Appeals for the District of Columbia Circuit on Dec. 29 ruled that HHS could move forward with its controversial hospital price transparency rule on Jan. 1, agreeing with a lower court just days before the rule was set to go into effect.
Becerra, meanwhile, has been a vocal opponent of the Trump administration’s efforts to dismantle the Affordable Care Act. He led the Democratic states fighting the lawsuit, California v. Texas. The Supreme Court is expected to announce the fate of the ACA early in Biden’s term, and the lawsuit could take center stage the first year of Biden’s presidency.
Becerra has also waged lawsuits against Republicans on multiple other health care policies — from abortion rights to the Trump administration’s public charge rule to drug company kickbacks.
340B. Becerra could also step into lawsuits — and an ongoing controversy — around 340B discounts at contract pharmacies, and he has said that HHS should make sure those discounts are available.
Following three lawsuits that ask the courts to force the Health Resources and Services Administration to stop Eli Lilly, Novartis, Astra Zeneca, Sanofi, United Therapeutics and Novo Nordisk from limiting 340B drug discounts through various contract pharmacies and claims sharing policies, the HHS Office of General Counsel said Dec. 30 that drug manufacturers are required to provide 340B discounts to providers in the program via contract pharmacies.
An advisory opinion from the counsel’s office says the method by which 340B providers dispense drugs doesn’t affect the drug makers’ obligation to provide discounts. However, HHS also notes the advisory opinion is not a final agency action and doesn’t have the force of law — though it says the opinion lays out the general counsel’s interpretation of the statute and thus manufacturers’ obligations.
“We are enormously pleased that the Department of Health & Human Services has issued this opinion. The important work of repairing the damage done to these hospitals must begin as quickly as possible. We stand ready to work with the department to identify overcharges and facilitate refunds,” said 340B Health President and CEO Maureen Testoni in a statement.
Surprise Billing. The surprise billing battle may be over in the halls of Congress, but provider groups, hospitals and insurers are just beginning their battle at HHS, as the agency gears up to begin its rulemaking process now that the president has signed the year-end legislative package.
The No Surprises Act, which is tucked into Congress’ 2020 year-end spending law, says that by July 2021 the HHS secretary, along with the secretaries of Labor and Treasury, need to establish details surrounding the arbitration and payments process. The surprise billing ban is set to go into place Jan. 1, 2022.
The National Coalition on Healthcare, is urging the Biden administration to immediately work to lower health care costs by quickly implementing the surprise billing legislation, as well as extending financial assistance to struggling providers and working with Congress to incentivize states to expand Medicaid.
The leader of the U.S. Senate, Republican Mitch McConnell, has warned that a forthcoming wave of litigation over Covid-19 will amount to a “second pandemic.” That’s the basis for a continuing effort in Congress to shield companies from lawsuits filed by workers and consumers who get sick. Though a liability shield ended up being dropped from the economic stimulus measure passed in the final days of 2020, the issue is not going away, and some states have moved to provide their own versions of legal immunity for businesses.
A total of 1,348 lawsuits related to Covid-19 claims had been filed in the U.S. as of Jan. 5, according to Fisher Phillips LLC, a law firm tracking the litigation. Relatively few have been filed by workers who blame their employers after contracting the virus, according to several lawyers who have been following the field. Melissa Camire at Fisher Phillips, said that the most common kinds are cases filed by workers who said they needed, but were denied, time off because they contracted Covid-19 or had to take care of a sick person. The next most common categories were suits in which employment discrimination claims were tied to the pandemic, including claims by parents saying they were fired for taking care of their children, and whistle-blower cases.
Most Covid exposure suits have been against companies whose workplaces are densely staffed, such as meatpackers and food processors, according to John Beisner, a partner at Skadden Arps Slate Meagher & Flom LLP in Washington, D.C. Janie Schulman, an attorney at Morrison & Foerster in Los Angeles, said smaller companies and those in the healthcare industry are common targets. The Fisher Phillips data support her conclusion: Companies with fewer than 50 employees are defendants in 461 Covid-related lawsuits, or more than one-third of the total. Suits have also been filed against companies over conditions in warehouses and product distribution centers, including one against Amazon.com Inc.
Juno Turner, litigation director at Towards Justice, a Denver-based workers’ rights organization who filed the suit against Amazon in Brooklyn, said that many of them have been brought by low-wage, frontline or essential workers, who are disproportionately people of color. Some, like the Amazon suit, are seeking court orders requiring safe conditions. Others seek damages for employers’ egregious conduct on behalf of workers who’ve fallen ill or died, she said.
The vast majority of workers arguing they contracted Covid due to unsafe workplaces are required to pursue their claims through worker compensation programs, an administrative process that generally makes it impossible to sue employers directly over workplace injuries. Labor lawyers argue the programs don’t have the teeth required to change practices at dangerous workplaces.
Some cases are being filed as “public nuisance” suits in an attempt to avoid the normal channels for such complaints. The case against Amazon accused the company of contributing to the spread of Covid-19 by telling plant workers to emphasize speed over distancing, hand-washing and sanitizing work spaces. A federal judge in Brooklyn dismissed the case in November, saying workers should bring their concerns to the federal Occupational Safety and Health Administration instead. Two of the legal non-profits that brought the Amazon lawsuit, Towards Justice and Public Justice, are separately suing OSHA in a federal court in Pennsylvania, saying the agency has arbitrarily and capriciously failed to address “imminent dangers” to workers at a meatpacking plant in the state.
While Congress has remained gridlocked on any federal measure, at least 10 states have created their own legal shields for businesses and individuals, says Fisher Phillips lawyer Chantell C. Foley. They include Georgia, North Carolina, Utah and Wyoming. Georgia’s law shifts the burden of proof so that instead of a company first being required to show how it complied with state and federal health guidelines, plaintiffs must prove it didn’t. Workers must show their employer “willfully and wantonly failed to follow the guidelines,” Foley says. “That’s a pretty high burden.” California in December put in place a new rule requiring employers to implement coronavirus safety measures and setting standards for virus testing, notifying workers of infections, and paid medical leave.
As outlined by Senate Republicans in a proposed stimulus measure that failed to win Democratic support, lawsuits couldn’t be brought under common law or medical malpractice statutes, only through a specially designed federal cause of action. Defendants could be found liable only if they didn’t make reasonable efforts to comply with relevant public health guidelines and were either grossly negligent or engaged in willful misconduct. Thresholds for acceptable evidence would be stricter. Compensatory damages would be limited to the plaintiff’s economic losses; punitive damages, awarded only if the defendant’s willful misconduct caused the injury, could not exceed compensatory damages. An employer couldn’t be held liable if it relied on, and generally followed, relevant health and safety standards. The shield would apply to virus exposure on or after Dec. 1, 2019, and until at least Oct. 1, 2024.
Several Democrats, including House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer, say that the liability shields would place workers in dangerous conditions without giving them legal recourse to recover damages or demand change. They also object to the length of the proposed shield. Labor groups and workers’ rights organizations say the main effect of a shield would be to encourage employers to not take the required safety precautions. Turner said Republicans were “using an exaggerated concern about purportedly frivolous litigation to justify blanket immunity for corporations that break the rules.”
No. A bipartisan group of senators has vowed to continue working in 2021 on a deal that would pair a liability shield with financial aid to state and local governments, a Democratic priority. That group had been working on a measure that would establish a nationwide gross negligence standard for COVID-19 exposure, medical malpractice and workplace testing claims. Its protections would apply to claims arising from injuries that occurred from December 2019 through the later of one year after enactment or the end of the coronavirus public health emergency.
The leader of the U.S. Senate, Republican Mitch McConnell, has warned that a forthcoming wave of litigation over Covid-19 will amount to a “second pandemic.”
This WSC Brief gives an overview of the flurry of activity surrounding telehealth during the closing months of 2020.
The budget reconciliation process is a powerful tool that allows lawmakers to advance spending and tax policies through the Senate with a simple majority.
Used in the past to advance major tax cuts and enact portions of the Affordable Care Act, Democrats may use reconciliation in 2021 to achieve their policy priorities and deliver President-elect Joe Biden legislative wins if they pull out victories in both Senate runoff elections in Georgia.
Still, there are key limitations that prevent it from being used on any type of legislation — and leaders would have to obtain sufficient support within their own ranks, including a narrow House majority and a 50-50 Senate where Vice President-elect Kamala Harris would break a tie.
The term “reconciliation bill” describes legislation that would change spending and/or tax laws to meet the targets set by a congressional budget resolution. There can be more than one bill depending on the instructions in the budget resolution.
Only a simple majority is required for passage in the Senate. If everyone shows up, that means 51 votes. Debate limits (see below) mean the measures can’t be filibustered, and proponents don’t need the 60-vote supermajority that applies to most legislation under the chamber’s cloture rules.
Reconciliation has been used to pass some sweeping measures, including:
Budget resolutions can include instructions to committees to report reconciliation legislation, often with a deadline, to meet spending and revenue targets.
The resolutions are internal blueprints that guide congressional deliberations of tax and spending policies and aren’t sent to the president. But both chambers must adopt the same budget resolution to set up the process.
The reconciliation instructions also can require reporting of debt-ceiling legislation, which can come in handy because the measure can also be passed with a simple majority.
If more than one committee receives instructions, then the individual committees first send their recommendations to the House and Senate Budget committees, which consolidate the proposals. If a single committee receives instructions (for example, just the House Ways and Means Committee on a revenue measure), its recommendation can be sent directly for a floor vote.
In 2017, with Republican control of both chambers and Donald Trump newly in the White House, there were two rounds of reconciliation.
The first, conducted under a fiscal 2017 budget resolution adopted early in the session, set up action on a bill to make changes to the Affordable Care Act. While the House passed a measure, the Senate didn’t, and the effort stalled.
The second round, under the fiscal 2018 budget resolution, set the stage for the tax package enacted at the end of 2017.
In the Senate, debate is limited to 20 hours, eliminating the possibility of a filibuster.
Not counted against that maximum: the minutes or hours spent offering and voting on amendments and motions. That typically results in a “vote-a-rama” with members on the floor holding back-to-back votes for hours.
The House typically adopts a rule limiting floor debate and specifying which amendments are made in order.
Under the Senate’s Byrd Rule, named after the late Sen. Robert Byrd (D-W.Va.), provisions in reconciliation bills are supposed to be budgetary in nature—affecting revenue or spending. The Senate parliamentarian provides advice on whether provisions comply.
If a provision doesn’t produce a change in outlays or revenue, it’s subject to a point of order. It takes 60 votes to waive the point of order and keep the language in the measure. The rule can lead to the trimming of things such as the details of provisions in the bills, reporting requirements, and even official short titles — as in 2017 when the “Tax Cuts and Jobs Act” was deleted from the GOP tax plan.
The rule applies to provisions in conference reports on budget reconciliation bills, which reflect compromises reached by House and Senate negotiators. If the House has adopted the conference report before the Senate deletes language as a result of the Byrd rule, then representatives have to vote again on the revised text.
The Byrd Rule also prevents reconciliation from being used to make changes to Social Security.
Reconciliation was last used in 2017, also the last year both chambers adopted a traditional budget resolution. Adoption of resolutions has become much less frequent over the years, especially when there’s a divided Congress.
Budget enforcement has instead largely been through legislation that also adjusted spending caps under the Budget Control Act. For example, the two-year budget deal enacted in 2019 (Public Law 116-37) included budget enforcement provisions for fiscal 2020 and 2021.
The spending caps only ran through fiscal 2021, so there could be renewed interest in using budget resolutions to set top-line spending measures and for reconciliation purposes.
Hospitals started the year with new requirements to post information they had long sought to obscure: the actual prices negotiated with insurers and the discounts they offer their cash-paying customers.
The change is part of a larger push by the Trump administration to use transparency to curtail prices and create better-informed consumers. Yet there is disagreement on whether it will do so.
As of Jan. 1, facilities must publicly post on their websites prices for every service, drug and supply they provide. Next year, under a separate rule, health insurers must take similar steps. A related effort to force drugmakers to list their prices in advertisements was struck down by the courts.
With the new hospital rule, consumers should be able to see the tremendous variation in prices for the exact same care among hospitals and get an estimate of what they will be charged for care — before they seek it.
The new data requirements go well beyond the previous rule of requiring hospitals to post their “chargemasters,” hospital-generated list prices that bear little relation to what it costs a hospital to provide care and that few consumers or insurers actually pay.
Instead, under the new rule, “these are the real prices in health care,” said Cynthia Fisher, founder and chairman of Patient Rights Advocate, a group that promotes price transparency.
Each hospital must post publicly online, in a machine-readable format easy to process by computers, several prices for every item and service they provide: gross charges; the actual, and most likely far lower, prices they’ve negotiated with insurers, including de-identified minimum and maximum negotiated charges; and the cash price they offer patients who are uninsured or not using their insurance.
In addition, each hospital must make available, in a “consumer-friendly format,” the specific costs for 300 common and “shoppable” services, such as delivering a baby, getting a joint replacement or having a hernia repair.
The data for those 300 services must total all costs involved — including hardware, operating room time, drugs given and fees of hospital-employed physicians — so patients won’t face the nearly impossible job of figuring it out themselves.
Hospitals can mostly select which services fall into this category, although the federal government has dictated 70 that must be listed, including certain surgeries, diagnostic tests, imaging scans, new patient visits and psychotherapy sessions.
No. At best, these are ballpark figures.
Other factors influence consumers’ costs, like the type of insurance plan a patient has, the size and remaining amount of their annual deductible and the complexity of the medical problem.
An estimate on a surgery, for example, might prove inexact. Complications could arise, adding to the cost.
“You’ll get the average price, but you are not average,” said Gerard Anderson, a professor of health policy and management at Johns Hopkins Bloomberg School of Public Health.
Tools to help consumers determine in advance the amount of deductible they’ll owe are already available from many insurers. Experts say the information becoming available this month will prompt entrepreneurs to create apps or services to help consumers analyze prices. For now, though, the hospital requirements are a worthy start, say experts.
“It’s very good news for consumers,” said George Nation, a Lehigh University professor of law and business. “Individuals will be able to get price information, although how much they are going to use it will remain to be seen.”
Zack Cooper, a Yale University associate professor of public health and economics, doubts that the data alone will make much of a difference for most consumers.
“It’s not likely that my neighbor — or me, for that matter — will go on and look at prices and, therefore, dramatically change decisions about where to get care,” he said.
Some cost information is already made available by insurers, particularly out-of-pocket costs for elective services, “but most people don’t consult it,” he added.
That could be because many consumers carry types of insurance in which they pay flat-dollar copayments for such things as doctor visits, drugs or hospital stays that have no correlation to the underlying charges.
Still, the information may be of great interest to the uninsured and the increasing number of Americans with high-deductible plans, in which they are responsible for hundreds or even thousands of dollars in costs annually.
For them, the negotiated rate and cash discount information may prove useful, said Nation.
“If I have a $10,000 deductible plan and it’s December and I’m not close to meeting that, I may go to a hospital and try to get the cash price,” Nation said.
Employers may have a keen interest in the new data, said James Gelfand, senior vice president at the ERISA Industry Committee, which lobbies on behalf of large employers. They’ll want to know how much they pay each hospital compared with others and how well their insurers stack up in negotiating rates, he said.
For some employers, he said, it could be eye-opening to learn how hospitals cross-subsidize by charging exorbitant amounts for some things and minimal amounts for others.
“The rule puts that all into the light,” Gelfand said. “When an employer sees these ridiculous prices, for the first time they will have the ability to say no.” That could mean rejecting specific prices or the hospital entirely, cutting it out of the employer plan’s insurance network. But, typically, employers won’t limit workers’ choices by outright cutting a hospital from a network.
More likely, they may create financial incentives to use the lowest-cost facilities, said Anderson.
“If I’m an employer, I’ll look at three hospitals in my area and say, ‘I’ll pay the price for the lowest one. If you want to go to one of the other two, you can pay the difference,’” Anderson said.
Revealing actual negotiated prices may push more-expensive hospitals in an area to reduce prices in future bargaining talks with insurers or employers, potentially lowering health spending.
It could also go the other way, with lower-cost hospitals demanding a raise, driving up spending.
Bottom line: Price transparency can help, but the market power of the players might matter more.
In some places, where there may be one dominant hospital, even employers “who know they are getting ripped off” may not feel they can cut out a big, brand-name facility from their networks, said Anderson.
The hospital industry went to court, arguing that the rule unfairly forces hospitals to disclose trade secrets and violates their First Amendment rights. That information, the industry said, can be used against them in negotiations with insurers and employers.
The U.S. District Court for the District of Columbia disagreed with the hospitals and upheld the rule, prompting an appeal by the industry. On Dec. 29, the U.S. Court of Appeals for the District of Columbia affirmed that lower court decision and did not block the rule.
In a written statement, the American Hospital Association cited “disappointment” with the ruling.
The AHA plans to talk with the Biden administration “to try to persuade them there are some elements to this rule and the insurer rule that are tricky,” said Tom Nickels, an AHA executive vice president. “We want to be of help to consumers, but is it really in people’s best interest to provide privately negotiated rates?”
Fisher thinks so: “Hospitals are fighting this because they want to keep their negotiated deals with insurers secret,” she said. “What these rules do is give the American consumer the power of being informed.”
The change is part of a Trump administration push to curtail costs and create better-informed consumers through transparency.
Protecting Americans from surprise medical bills without inflating insurance costs will be a pivotal first-year challenge for the Biden administration, industry observers say.
The federal government will next year create a sweeping system to halt instances where insured individuals get unexpectedly expensive medical bills and to settle pricing disputes between doctors and insurers through arbitration. President Donald Trump signed the surprise billing legislation into law as part of the omnibus spending and virus aid package (H.R. 133).
Biden’s health and labor agencies face difficult decisions that will determine how effective that system will be and whether health-care providers or insurance companies can tip the scales in their favor. Groups that have spent years lobbying Congress on surprise billing say they’re keeping a close eye on these choices to gauge whether more legislation is needed.
“This new law hinges on what happens in regulation,” Mark Miller, executive vice president of health care for Arnold Ventures, a philanthropy that funds research and advocacy for center-left organizations, said.
President-elect Joe Biden has already promised big changes for the health insurance industry in 2021: he’s vowed to increase Obamacare’s insurance subsidies and roll back many of the changes Trump made to Obamacare’s individual insurance marketplaces.
These issues are likely to come up in the confirmation hearings for Biden’s choice to lead the Health and Human Services Department, Xavier Becerra, two congressional aides for senators who serve on the confirming committees said.
There are several areas of the law where regulators will have to make key decisions that could shift billions of dollars each year toward doctors or insurers.
Under the new arbitration system, providers and insurers would submit an offer to an independent entity that chooses the final payment amount based on median in-network rates, among other factors. It couldn’t consider Medicare rates, which typically pay less than private insurance, or a provider’s billed charges, which tend to be higher.
The creation of this system is expected to be the focus of intense industry lobbying.
“There’s going to be a lot of pressure to do this as quickly as possible and rely on industry guidance,” Kevin Lucia, a research professor at Georgetown University, said.
If the arbiter more often agrees with health-care providers who are seeking higher payments for their services then health-care spending overall will rise, costing insurers and the government more, Lucia said.
Matt Eyles, president and chief executive officer of America’s Health Insurance Plans, the insurance industry’s main lobbying arm, said in a recent statement that his group is “deeply concerned that hardworking American families and businesses will face increased costs and higher premiums as private-equity firms exploit arbitration processes.”
However, the law has guardrails to keep providers from abusing the arbitration system, such as a cooling off period, Loren Adler, associate director of the USC-Brookings Schaeffer Initiative for Health Policy, said.
Starting in 2022, the law bans surprise billing for emergency medical services, for ancillary services such as anesthesia, for other care without a patient’s consent, and for air ambulance services.
The incoming Biden administration will have to spell out what regulators consider consent and how patients will be informed that they’re waiving protections against a surprise bill for planned services, Jack Hoadley, a research professor at Georgetown University who studies insurance law, said.
“I think there is room to try to do that in a way that makes it truly informed consent, but it’s something they’ll have to grapple with,” he said. “You don’t want it to get lost with all the other forms to sign.”
Advocacy organizations say they’ll be watching how the Biden administration implements the surprise billing law.
“From the perspective of Arnold Ventures we’re going to be watching,” Miller said. “If it goes in a bad direction we’re going to keep it in the public eye.”
Hospital executives are planning for how they can sustain telehealth momentum from the COVID-19 pandemic and build the practice into their future care delivery strategies.
Patient visits conducted via video or phone could account for between 10% to 30% of total visits after the COVID-19 pandemic subsides, according to healthcare executives and analysts. But to achieve that, hospitals will need to fine-tune the patient experience, improve training and trouble-shooting resources for clinicians, and figure out payment challenges.
“The technology part of this is sophisticated, but the really hard part is the human factors,” said Dr. Arthur Southam, executive vice president of health plan operations and chief growth officer at Oakland, Calif.-based Kaiser Permanente. “How do you make the telehealth experience—the waiting room, and the start, and the finish—a really good consumer and clinician experience?”
Even before the pandemic, Kaiser had a relatively large telehealth presence, with about 15% of scheduled outpatient visits conducted virtually.
That figure shot up to 80% in the early spring; it has since settled at around 50%. Kaiser obtains much of its revenue from its prepaid membership model, Southam said, which helped weather the pandemic as the organization doesn’t rely on fee-for-service payments and procedure volumes as heavily as other health systems do.
“We’re very bullish on the potential for digital and telehealth services to complement what we do in person-to-person services,” Southam said.
In the future, he expects 40% to 50% of Kaiser’s outpatient visits to be completed via telehealth.
Nationwide, telehealth visits accounted for nearly 20% of physician visits in early December—down from 50% in April, but still significantly higher than the less than 1% adoption seen before the pandemic, according to an analysis the Chartis Group and Kythera Labs published based on claims data from commercial payers and Medicare Advantage health plans.
The 20% figure is also trending up from early fall 2020—when telehealth utilization had seemingly plateaued at around 15% of total visits.
On a weekly basis, MedStar Health in Columbia, Md., has been conducting between 10,000 to 12,000 of its scheduled visits directly to patients at home via telehealth, a stark increase from the fewer than 100 visits delivered that way cumulatively in the first few weeks of 2020, before the onset of COVID-19 in March.
“Where (telehealth utilization) settles out is still an open question,” said Dr. Ethan Booker, medical director of the MedStar Telehealth Innovation Center and MedStar eVisit. “I don’t think it’s going to go back to the pre-pandemic levels … patients have come to expect the convenience and accessibility of it.”
Forty-one percent of U.S. patients indicated they would prefer to use telehealth to meet with at least one of their providers after the pandemic, according to a report from the Healthcare Information and Management Systems Society. Seventy-seven percent said they would be willing to use telehealth.
And roughly one-third of patients who received remote care during the COVID-19 pandemic said they expect to seek care digitally again in the future, according to report from market research firm Forrester.
In the report, Forrester predicted that virtual care will surpass 440 million visits in 2021, down from 2020, which is on track to hit 481 million visits.
“At this point, virtual care is table stakes—it’s no longer a way of offering competitive advantage,” said Arielle Trzcinski, a senior analyst at Forrester who co-authored the report.
Not just a tech projectHealth systems trying to differentiate their telehealth offerings will have to work on improving the patient experience during a telehealth visit, rather than just the basics of setting up a virtual care service, Trzcinski said.
That could include working to reduce the time patients have to spend navigating a patient portal, downloading a separate app, or staring at a blank screen in a virtual waiting room before their visit, as well as consolidating telehealth programs across service lines so patients know what to expect organization-wide.
There’s an “opportunity to reimagine that (patient) experience,” Trzcinski said. “What could this experience look like? What should it look like?”
Patient experience is an area St. Louis-based Ascension is working to streamline, according to Dr. Joe Cacchione, the system’s executive vice president of clinical and network services.
There are a few ways patients can access video visits today, such as through Ascension’s mobile app, but Cacchione said Ascension is working to roll out a program that would send patients a message with a hyperlink before an appointment, which they would press for one-click access to their virtual visit.
“We’ve got to make it simple for the patients,” Cacchione said. “Too many clicks, log-ins, passwords—those things aren’t going to work long-term.”
About 10% to 20% of all patient visits at Ascension are being conducted through telehealth today, depending on the market.
In the six months before March 2020, Ascension had conducted roughly 5,000 to 6,000 telehealth visits in total—a “fraction of a percent” of the system’s overall visits, Cacchione said.
In the short term, Cacchione expects the proportion of visits conducted via telehealth at the system to “settle out” at around 10%. But he envisions that figure could grow over time, particularly for follow-up visits for specialty and primary care, as patients continue to become more familiar with the technology and as “we make it more efficient to have a virtual visit.”
And patients aren’t the only end-users on a telehealth visit. Health system executives need to ensure clinicians have a user-friendly experience during the encounter, too.
Before the pandemic, Renton, Wash.-based Providence had already established a team of coding, engineering and nursing staff to help train and field questions from clinicians interested in adding telehealth services. That internal consulting service became crucial in the wake of COVID-19 as a place for clinicians to reach out with questions about billing, technology and workflow.
Telehealth is “way more complicated than just, ‘Hey, we’ll FaceTime and do a video visit,’ ” said Dr. Todd Czartoski, chief medical technology officer at Providence.
The health system completed 70,000 video visits in 2019, most of which were connecting to people at other healthcare facilities for specialty care. In mid-April of 2020, that jumped to roughly 70,000 video visits per week, many of which involved clinics connecting directly to a patient at their home amid stay-at-home orders.
About 20% of clinic visits at Providence are still being completed through telehealth.
Czartoski said he’s not sure what proportion of visits will remain virtual after the pandemic. “It’s going to depend on regulatory and payment structures,” he said. “If CMS stops allowing home visits with the lifting of the public health emergency, the visit numbers will drop.”
Getting paidHealth systems in fee-for-service payment models are largely reliant on decisions from private and public payers for whether—and how much—they will be reimbursed for care delivered via telehealth.
Medicare, for the most part, doesn’t reimburse for telehealth services that patients receive at home.
While some insurers waived fees and restrictions on telehealth because of COVID-19, they haven’t committed to doing so after the pandemic subsides.
Many health system executives hope that will change. At the same time, they note that the industry’s movement toward value-based care and at-risk contracts could also support telehealth reimbursement.
“We’ll continue to make investments in the infrastructure for being successful delivering telehealth,” such as working to more closely integrate telehealth with the electronic health record system, said MedStar’s Booker. “We fully expect the reimbursement environment will continue to shift.”
Some patients expect telehealth to cost less than in-person care, too. Forty-nine percent of patients said they would expect out-of-pocket expenses for a video visit with their established provider to cost less than an in-person visit, while 37% said they expected it to cost the same, according to the report from HIMSS.
A virtual visit tends to generate between two-thirds to three-quarters of the revenue of the comparative in-person visit, according to Ascension’s Cacchione. It’s not that they get paid less for the same tasks, he explained, but “oftentimes, we’ll do an (electrocardiogram) in the office, we’ll do a blood draw—there will be some other code that’s billed for.”
To account for that, hospitals will have to retool processes to ensure they capture patients following up on-site after a virtual visit, as well as ensure that information is sent back to the ordering physician.
“It’s just going to be part of the normal workflow going forward as we see more and more people virtually,” Cacchione said.
Even if telehealth accounts for less revenue than in-person visits, it’s going to be necessary for most health systems to have virtual care in place and build it into their business model. As more patients expect to see telehealth as an option, they may start seeking out virtual care at other organizations in lieu of in-person care with their current provider and may even choose to leave health systems that don’t regularly offer video visits.
Health system executives working to build out sustainable telehealth programs need to ensure there’s “clear, quantifiable return on investment,” considering money spent alongside money saved, improved patient outcomes and possible new patients drawn in by the virtual care offering, said Tom Kiesau, leader of the digital transformation unit at the Chartis Group.
Providers “see consumers wanting (telehealth),” Kiesau added. “If they don’t provide it, someone else will.”
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