Research examines whether financial penalties are a useful policy enforcement mechanism to get hospitals to comply with price transparency regulations.
The answer to the question of what it will take to get more hospitals compliant with the price transparency rule is as simple as increased financial penalties, according to a study published in JAMA Network Open.
Researchers from Georgetown University and Harvard University looked at the responses of 4,377 acute care hospitals operating in 2021 and 2022 to changes in financial penalties by CMS for hospital price transparency regulations.
Financial penalties for noncompliance increased from $300 per day for all hospitals in 2021 to $10 per bed per day, with a minimum of $300 per day for hospitals with no more than 30 beds and a maximum of $5,500 for hospitals with 550 or more beds in 2022.
For the study, hospitals were deemed compliant if they posted a machine-readable file with private, payer-specific negotiated prices at the service-code level.
The analysis uncovered that between 2021 and 2022, compliance rates for the 4,377 hospitals increased by 17.3%, from 70.4% to 87.7%, respectively. Noncompliance rates decreased by more than half, from 29.6% to 12.3%.
According to the researchers, the findings suggest that increasing penalties by another $1.4 million per hospital would increase compliance rates above 95%.
To date, CMS has only hit four hospitalswith fines for not adhering to the rule:
Northside Hospital Atlanta in Georgia, fined $883,180
Northside Hospital Cherokee in Georgia, fined $214,320
Frisbie Memorial Hospital in New Hampshire, fined $102,660
Kell West Regional Hospital in Texas, fined $117,260
In a recent Health Affairsarticle by CMS leaders, the agency said it "plans to take aggressive additional steps to identify and prioritize action against hospitals that have failed entirely to post files."
The article also highlighted that hospital compliance had significantly improved since the agency's first assessment. Between January and February 2021, 66% of hospitals met consumer-friendly display criteria, 30% posted a machine-readable file, and 27% did both. Between September and November 2022, 82% of hospitals posted a consumer-friendly display, 82% posted a machine-readable file, and 70% did both.
For hospitals to be in full compliance, they must have both a machine-readable file with all items and services, as well as a display of shoppable services in a consumer-friendly format.
The Georgetown and Harvard researchers didn't account for the consumer shoppable service tool in their study, which likely led to higher estimations of compliance. However, hospitals have incentive to "quasi-comply" by posting prices that can be difficult to locate, the study noted.
"Quasi-compliance allows hospitals to minimize the costs of disclosing sensitive information while reducing their regulatory risk," the researchers wrote. "Characterizing this quasi-compliance phenomenon is an important direction for future work."
Ultimately, CMS can do its part to boost compliance by enforcing the rule and not letting hospitals skirt regulations.
"Overall, the results of this cohort study suggest that financial penalties may be a valuable tool for ensuring compliance with CMS policy when fines are sufficiently large, noncompliance is readily observable and well defined, and enforcement is credible," the researchers concluded.
Analysis by the American Hospital Association (AHA) reveals hospitals are not near the top of the list of groups acquiring physicians.
Physician acquisition is largely driven by private equity, physician groups, and payers, according to a report published by AHA.
The analysis of Levin Associates data finds that hospitals and health systems are not among the top three groups acquiring physicians since 2019.
Private equity makes up the majority of physician acquisition at 65%, followed by physician groups at 14%, insurers at 11%, and hospitals and health systems at 4%.
Additionally, the data shows that in deals where payers acquire physician practices, the average number of acquired physicians per deal was more than 10 times higher for insurers than for any other acquiring group. To this point, the report highlights acquisitions by CVS Health of Oak Street Health and Signify Health in deals that were valued at nearly $20 billion.
A separate report conducted by Morning Consult on behalf of AHA looked at the factors driving physician practice acquisition. Of the physicians polled, 94% said they believe it has "become more financially and administratively difficult to operate a practice."
Further, 81% said that commercial insurer policies and practices have "interfered with their ability to practice medicine" and 84% reported they have had job interference from commercial payers.
"As physician polling data has shown, most physicians are choosing to become employed rather than operate their own practice due to increased costs and burden from policies like commercial insurer prior authorizations," AHA wrote.
Medicare Advantage specifically has been identified as the most burdensome payer program when it comes to obtaining prior authorization.
A survey by the Medical Group Management Association revealed that 77% of physicians said they have hired or redistributed staff to work on prior authorizations due to an increase in requests, while 60% said there are at least three different employees involved in completing a single prior authorization request.
The group are urging CMS to enhance its proposed rule and build on the regulations for the administrative process.
CMS has released its proposed rule to streamline prior authorization in government-sponsored health insurance programs, but a contingent of lawmakers want the agency to go further.
A bipartisan group of 233 representatives and 61 senators penned a letter asking CMS to both expand the proposed rules and promptly finalize the changes to improve the administrative process in Medicare Advantage (MA), Medicaid, and Affordable Care Act exchange plans.
Specifically, the lawmakers are urging CMS to:
Establish real-time electronic prior authorization decisions for routine services.
Require plans to respond to prior authorization requests within 24 hours for urgent care.
Require detailed transparency metrics.
Combined with the Improving Seniors' Timely Access to Care Act, the prior authorization regulations would put in place electronic prior authorization processes for MA plans, accelerate prior authorization time frames, reduce administrative burden on providers and health plans, increase transparency around prior authorization requirements, and expand beneficiary protections.
"We urge CMS to promptly finalize and implement these changes to increase transparency and improve the prior authorization process for patients, providers, and health plans," the lawmakersstated. "We are pleased that these proposed rules align with the bipartisan, bicameral Improving Seniors' Timely Access to Care Act, which proposes a balanced approach to prior authorization in the [Medicare Advantage] program that would remove barriers to patients' timely access to care and allow providers to spend more time treating patients and less time on paperwork."
Prior authorization has particularly been a problem in MA. Despite longstanding concerns over the administrative process in the private program, a recent survey by the Medical Group Management Association found that little progress has been made. Of the medical groups surveyed, 84% said prior authorization requirements in MA increased in the past 12 months, with less than 1% reporting requirements had decreased.
With MA continuing to experience consistent growth, it's imperative that its expanding membership have access to necessary when they need it.
New research compares prices for eight shoppable services between physician-owned hospitals (POHs) and their competitors.
Median commercial negotiated prices and cash prices are lower for general acute-care POHs than for non-physician-owned facilities in the same market, according to a study published in JAMA Network Open.
Researchers examined 156 POHs and 1,116 non-POHs located in 78 hospital referral regions to better understand the differences in commercial negotiated prices and cash prices between hospitals for most common procedures.
The analysis focused on eight CMS-designated shoppable services: spinal injection, physical therapy–therapeutic exercise, MRI scan of lower spinal canal, CT scan of abdomen and pelvis, comprehensive metabolic panel, blood test-clotting time, and emergency department visit levels 3 and 4.
Using pricing information (as of January 2023) available through the hospital price transparency rule, the researchers expected to find that POHs would have higher prices than their competitors.
Instead, the study uncovered that for the same procedure in the same region, median commercial negotiated prices and cash prices among POHs were 33.7% and 32.7% lower than those of non-POHs, respectively.
Additionally, POH status was associated with 17.5% and 46.7% lower negotiated prices and cash prices, respectively.
MRI and physical therapy services had the biggest differences in commercial negotiated prices between facilities, costing 33% and 30% less at POHs, while CT and MRI services had the widest gap in cash prices at 36% and 35% lower at POHs.
Researchers posited that POHs might be able to accept lower commercial prices because they serve fewer Medicaid patients and provide less charity care. In the study, POHs served fewer Medicaid patients than non-PHOs at 3% vs 7.1%, respectively, and provided less charity care at 1.3% vs 3.2%, respectively.
Under the Affordable Care Act, POHs are prohibited from expanding or establishing new facilities, but there have been efforts to reverse the ban.
The American Hospital Association (AHA) recently pushed back on those efforts by releasing a study showing POHs treat less medically complex patients and have margins over 15 times higher than other facilities.
"The growth of physician-owned hospitals was restricted by Congress for good reasons and those remain valid today as this analysis shows," AHA president and CEO Rick Pollack said in a statement. "Physician-owned hospitals undermine our nation’s health care safety-net and jeopardize access to care by cherry-picking the most profitable cases and avoiding patients with complex conditions and lower-reimbursing coverage."
Analysis by Kaiser Family Foundation (KFF) examines consumer experiences with health insurance.
Though the majority of insured adults give their health insurance positive ratings, more than half experience problems when using their insurance, according to a KFF survey.
To better understand how people feel about their health coverage and how it works for them, the KFF Survey of Consumer Experiences with Health Insurance interviewed 3,605 insured adults with Medicare, Medicaid, or a health plan through the Affordable Care Act marketplace.
The data revealed that 81% of respondents give their insurance an overall rating of "excellent" or "good," with ratings varying based on health status.
Despite the positive ratings, 58% of adults said they have experienced a problem using their insurance in the past year, with issues including denied claims, provider network problems, and prior authorization snags.
Among those that reported issues with their insurance, nearly half said their biggest problem was either not resolved (19%) or resolved in a way they were unsatisfied with (28%). Furthermore, 17% said they were unable to receive recommended care as a direct result of their problems, while 15% reported they experienced a decline in their health and 28% said they paid more than they expected for care because of their problems.
The survey also asked the respondents how well they understand aspects of their insurance and found that 51% find at least one aspect of how their insurance works at least somewhat difficult to understand. Meanwhile, more than a third of adults (36%) said it is at least somewhat difficult for them to understand what their insurance will and will not cover.
Making health plans more understandable and easier to navigate can go a long way for payers in improving member satisfaction. According to the recent J.D. Power study, commercial health plans are struggling to meet patients' engagement needs as member satisfaction continues to decline.
"Having coverage is valuable to people, and so not surprisingly, most who have it rate it favorably overall," KFF wrote. "But we don't buy health insurance in case we stay healthy, so monitoring how coverage works for people who are sick is particularly important in gauging how well our health insurance system works when people need it the most."
Analysis by Kaufman Hall advises hospital and health system leaders on responding to present and future economic pressures.
The federal government and its current budget construct are the biggest challenges to healthcare organizations' financial sustainability, according to Kaufman Hall.
Eric Jordahl, the managing director of the financial and performance consulting company, offered his insight on how hospitals and health systems must adapt to the government dictating the financial environment as the leading payer.
Though an agreement to suspend the $31.4 trillion debt ceiling until January 2025 was reached earlier this month, the federal budget construct is unsustainable in the long term and Congress' eventual attempts to restructure spending will impact healthcare organizations, Jordahl writes.
The analysis highlights that the Congressional Budget Office (CBO) earlier estimated federal spending to reach $9.8 trillion (25% of forecasted GDP) by 2033 and debt held by the public to exceed $45 billion (118% of forecasted GDP) over the same period. CBO's estimates indicate that the 2023 debt ceiling agreement should generate around $1.3 trillion in savings over a decade, which Jordahl states isn't consequential due to expected expenditures.
"All this confirms that the greatest threat to healthcare's financial and credit foundation remains the federal government's role as lead payer," Jordahl writes. "Other important pressure points include state fiscal health and the specter of recession (which may work differently if continued hiring translates into a 'full-employment recession'). But the big resource engine is the federal government, and its current budget construct isn't sustainable."
Jordahl mentions that Congress can attempt one or a combination of: restructuring programs to reduce cost, raise taxes, or tolerate escalating debt. Regardless, " any solution is likely to mean constrained resources for healthcare."
To prepare, hospitals and health systems should improve cash flow to improve both internal capital and the ability to access external capital, Jordahl advises.
Focusing only on improving operational performance won't be enough—organizations should also aim to manage their balance sheet.
As hospitals and health systems continue to combat challenges stemming from the COVID-19 pandemic, they also need to plan for the realities of the federal budget, an issue that "is likely to define healthcare’s experience for the foreseeable future."
The report by Human Rights Watch questioned nonprofit hospitals' role in the country's healthcare system.
The American Hospital Association (AHA) and Catholic Health Association (CHA) released a joint statement firing back at a Human Rights Watch report on nonprofit hospitals' contribution to healthcare's medical debt problem.
The report, titled "In Sheep's Clothing: United States' Poorly Regulated Nonprofit Hospitals Undermine Health Care Access," puts nonprofit hospitals and the community benefits they provide under the microscope.
Human Rights Watch cited Kaiser Family Foundation's survey in 2022 that 41% of Americans had some sort of medical debt, as well as Urban Institute's survey in March that about 73% of adults with past-due debt reported owing at least some of that debt to hospitals.
"The US heavily relies on these privately operated nonprofit hospitals' charity care to increase access to health care for patients who cannot pay for hospital services, such as emergency treatment, diagnostic work, and inpatient surgeries," the report stated. "But given the high prevalence of hospital-related medical debt in the US, this system is clearly not working."
AHA took exception with the report's takedown of nonprofit hospitals as well as its "understanding of the community benefits tax-exempt hospitals provide or the IRS regulations they are subject to."
"America's hospitals and health systems, regardless of size, location, or type, are committed to treating all patients with respect and dignity while providing high quality, accessible care, regardless of ability to pay or health insurance status," AHA president and CEO Rick Pollack and CHA president and CEO Sr. Mary Haddad said in a statement.
"The report released today from Human Rights Watch — based in part on research funded by an organization with a track record for bias — conspicuously focuses on tax-exempt hospitals, largely in the absence of other sectors of health care, such as commercial insurers, drug, or device companies that contribute to hospital expenses as well as consumer debt. It all but ignores that the root cause of medical debt is inadequate commercial health care coverage."
New analysis highlights the need for reform in the private program as it continues to grow in enrollment.
Overpayments to Medicare Advantage (MA) plans could exceed $75 billion this year, nearly tripling estimates by the Medicare Payment Advisory Commission (MedPAC), according to research by the USC Schaeffer Center for Health Policy & Economics.
The overpayments are due to favorable selection of MA plans, with MA rates paid to plans based on spending by fee-for-service beneficiaries. Researchers found that millions of beneficiaries in traditional Medicare who have switched to MA have lower spending than those with similar health risks who stayed.
MedPAC estimated that MA plans would be overpaid by $27 billion in 2023, mostly due to coding intensity of enrollee health conditions combined with bonus payments related to quality. That estimation did not factor in favorable selection of MA plans.
USC Schaeffer Center researchers pointed to 46.9% (11.3 million) of MA enrollees switching from traditional Medicare from 2006-2019, with 29.5% (7.1 million) switching to MA from 2015-2019 alone. The private program's growth necessitates more reform, the researchers stated.
"The skewed distribution of expenditures and the consistent trend of beneficiaries with below-average spending choosing Medicare Advantage plans have significant financial implications and are adding to the fiscal strain on the Medicare system," Steven Lieberman, a nonresident senior fellow at the USC Schaeffer Center, said in a press release.
"Reform options must strive to improve the relationship between FFS expenditures and Medicare Advantage payments. Another option is to delink Medicare Advantage payments from FFS as the current rate-setting system grows increasingly unreliable and problematic."
To improve rate setting, researchers suggest two reforms. The first is to alter the current payment approach linking plan rates to average spending by traditional Medicare beneficiaries, which could include new data reporting requirements for MA plans and measures to cut down on aggressive coding.
The second reform suggested is to institute competitive bidding MA plans, which would allow market forces to determine what MA plans are paid, capturing efficiency gains for taxpayers.
Researchers conclude that without reform, MA plans will continue to be the beneficiary of overpayments, threatening the Medicare program in the long term.
"Regardless of which approach is chosen, policymakers should proceed with a solution to shore up the fiscal solvency of the Medicare Trust Fund and the impact on overall federal budget deficits," said Paul Ginsburg, senior fellow at the USC Schaeffer Center and professor of the practice at the USC Price School of Public Policy.
A new report shows hospital operating margins have stabilized even as expenses show no signs of slowing down.
Hospitals managed to stay afloat in April in the face of ongoing expense increases and a rise in total bad debt and charity care, a report by Syntellis Performance Solutions revealed.
The monthly Syntellis Performance Trends Healthcare reportuses data drawn from 135,000 physicians from over 10,000 practices and 139 speciality categories, as well as from 500-plus unique departments across more than 1,300 hospitals.
In April, median hospital operating margins remained just above zero at 0.4% for the second consecutive month after 15 months of negative margins.
Meanwhile, it was also the 12th month of year-over-year increases in total expense and total non-labor expense, which increased 2.2% and 3.7%, respectively. Total labor expenses experienced a 1.1% year-over-year rise in April, making it 11 of the past 12 months of year-over-year increases.
"While a steadying of hospital operating margins is a positive sign, our nation's hospitals and health systems remain on dangerously thin ice with extremely narrow operating margins," Steve Wasson, executive vice president and general manager for Data and Intelligence Solutions at Syntellis, said in a press release.
"Healthcare leaders are finding ways to meet evolving patient needs and grow revenues, but relentless expense increases and other economic and industry challenges threaten to plunge them back into the red at any time."
High expenses were driven in part by labor expenses for nurses, which worsened as the industry continues to feel the effects of nursing shortages. Compared to April 2021, the nursing labor expense per patient rose 17.6%.
Additionally, hospitals dealt with bad debt and charity care, which was up 15% year-over-year and 7.6% month-over-month. Those figures may worsen in the coming months as millions are expected to lose Medicaid coverage as states roll back COVID-19 pandemic provisions.
Kaufman Hall's most recent National Hospital Flash Report also highlighted increases in bad debt and charity care in April due to the widespread disenrollment.
Poor customer service and communication scores brought down customer satisfaction in J.D. Power's new study.
Commercial health plans are struggling to meet patients' engagement needs as member satisfaction continues to plummet, a study by J.D. Power shows.
The data analytics, advisory services, and consumer insights company released its 2023 U.S. Commercial Member Health Plan Study, which measures satisfaction among members of 147 health plans in 22 regions throughout the country. Responses for the 17th annual report are from 32,656 commercial health plan members, fielded from January to April 2023.
Member satisfaction is measured by evaluating six factors: billing and payment, cost, coverage and benefits, customer service, information and communication, and provider choice.
The study found that overall satisfaction dropped by 13 points (on a 1,000-point scale) this year, mostly due to a 33-point decrease in satisfaction with customer service. Other areas that suffered notable decline were coverage and benefits (-20), provider choice (-16), and information and communication (-16).
Meanwhile, among patients with a self-reported health status of "poor/fair," 36% said their health plan helped them coordinate care. That figure jumped to 43% among patients with a self-reported status of "very good/excellent."
Additionally, the study revealed that the average Net Promoter Score for new members was 6 (on a scale of -100 to 100), compared to 25 for established plan members, indicating that health plans are falling short on providing information and support on navigating their benefits.
Finally, the report uncovered that digital usage by members for all tools and support remains under 50%. Usage of online health assessments was 18% among the sickest patients, while use of chronic disease management tools was 8%, use of online triage and nursing support was 10%, and remote monitoring was 6%.
Though the study found members' usage of digital tools lacking, another report by Accenture identified ease of navigation, including poor experiences using digital tools, as the top reason why beneficiaries leave their health plans.
A separate study by American Customer Satisfaction Index found that the most important experience benchmarks for health insurance customers were quality of mobile apps and reliability of mobile apps.
Health plans wanting to retain and attract new members, especially in the younger generations, need to prioritize how they engage their patients.
"The transition to value-based care is predicated on the idea that payors and providers can drive better outcomes at a lower cost by improving patient engagement, yet many commercial health plans are having challenges getting the right information and support to patients when and where they need it," Christopher Lis, managing director, global healthcare intelligence at J.D. Power, said in a press release.
"Moreover, in patients with self-reported health status of 'poor and fair,' only 17% were assigned to a case manager. Yet for these patients with oftentimes complex health conditions, seeing multiple providers and taking several prescriptions, care fragmentation leads to poor health outcomes and higher spending in the very population that needs coordinated care the most."
