Payment Reimbursement and Managed Care

Hospitals, Administration View Single-Payer as Chief Threat

May 6, 2019 4:57 pm

March 4—Hospital advocates joined the Trump administration this week in identifying various single-payer proposals as the primary threat facing the U.S. healthcare system.

Hospital advocates and the administration, which have sharply clashed in recent years over Republican efforts to repeal and replace the Affordable Care Act (ACA), raised similarly dire warnings about Democratic single-payer proposals, including high-profile Medicare-for-all bills.

Seema Verma, administrator of the Centers for Medicare & Medicaid Services (CMS), said the “greatest threat to the American healthcare system” is Medicare-for-all proposals.

“Medicare for all, in reality, is Medicare for none,” Verma said during the Federation of American Hospitals’ (FAH) 2019 Annual Policy Conference & Business Exposition in Washington, D.C.

On Feb. 26, Rep. Pramila Jayapal (D-Wash.) introduced a bill that would transition the U.S. healthcare system within two years to a single-payer Medicare-for-all program funded by taxpayers. The bill drew more than 100 Democratic co-sponsors, an approach that has been endorsed by most Democrats running for their party’s 2020 presidential nomination.

Verma’s warning was joined by Chip Kahn, president and CEO of FAH, who described such Medicare expansions as “an existential issue” for hospitals and the rest of the healthcare system during an address to hospital executives.

Before the 2016 election, Kahn said he didn’t take such proposals very seriously.

“But considering all of the things that have happened since then and the uncertainty of politics in the future, I think it’s very important that you have a counterweight, a counterbalance, to what you hear from the left on this issue,” Kahn said. “And it needs to come not just” from politicians but from the people who know health care.

Kahn urged the assembled hospital executives to help the Partnership for America’s Health Care Future, a coalition of providers, payers, and drugmakers that aims to block single-payer efforts.

“We won’t be able to keep the system going in the way that people expect without our working together to counter this movement,” Kahn said.

Sen. Rick Scott (R-Fla.), a former health system CEO, told the hospital executives that Democrats will continue to push Medicare-for-all proposals because the existing system “isn’t that great.” He urged them to help figure out ways to make the system more affordable for patients and taxpayers.

Congressional Democrats addressing the hospital executives had little to say about Medicare-for-all proposals and instead emphasized the need to bolster the ACA.

“I still think it’s a good idea,” Sen. Tom Carper (D-Del.), said about the ACA. “I don’t think we ever gave that idea a chance to be successful.”

Call to Action

Verma urged hospital executives to take steps to improve affordability, data sharing, and price transparency and to prevent surprise medical bills.

“Some believe that the solution to the cost problem is to empower government to set prices,” Verma said. “But with government-set prices, there is no motivation for providers to compete for patients on price or quality and therefore the system just continues to pay more, without driving better health outcomes.”   

She reiterated her earlier calls for greater price transparency and that hospitals should voluntarily move beyond the latest federal transparency requirements, which mandated posting chargemaster prices (or their equivalent) online in machine-readable formats.

“You can and should go above and beyond the basic requirements,” Verma said. “Many of you already have, and I applaud you for your forward-thinking efforts.”

Verma welcomed a February proposal to congressional leaders from six national hospital advocacy groups that identify eight key components that need to be included in any legislation to address surprise medical bills.

“I ask you, as hospital providers, to set the bar—don’t make us do it,” Verma said. “Be a leader in empowering patients through interoperability and transparency in price and quality information. That way, if we ultimately reflect best practices in law or regulation, they will be the ones you have employed. Don’t be one of the stragglers caught flat-footed when it becomes required.”

Coming Federal Initiatives

Among the range of federal actions coming in health care is an overhaul of Stark Law rules, which will be issued later this year, Verma said.

Changes will include clarifying the regulatory definitions of volume or valuecommercial reasonableness, and fair market value. Federal tweaks aim to address issues such as lack of signature, incorrect dates, and other areas of technical noncompliance. The update also aims to accommodate cybersecurity and electronic health record (EHR) requirements.

“This will represent the most significant changes to the Stark Law since its inception,” Verma said. “It is our hope that these changes will help spur better care coordination and help support our work to remove barriers to innovation while continuing to provide appropriate safeguards for our programs.”

Despite the recent public release of updated star ratings in the controversial hospital quality ratings system, Verma said she will “continue to work with hospitals and the healthcare community to explore ways to improve hospital ratings and the agency’s many other consumer decision-making tools.”

The latest update in the ratings did not address “major concerns about the methodology and usefulness of the star ratings,” said Tom Nickels, executive vice president for the American Hospital Association (AHA).

“That is why the AHA asked CMS to postpone its publication until concerns about the methodology could be remedied,” Nickels said in a written statement.

On value-based payment, Verma said only 14 percent of Medicare providers are in such arrangements and that the healthcare system needs to speed up its transition away from fee-for-service payment.

“CMS has spent the last year developing a new cadre of models and a strategy to increase provider participation,” Verma said.

The coming models either will allow providers to either accept higher levels of risk or will “ease providers into value-based agreements,” she said. They will include various provider types and disease states, including end-stage renal disease, cancer, and other serious illnesses.

Verma cited the recent overhaul of the Medicare Shared Saving Program (MSSP), which cut from six years to as little as two years the length of time providers could participate in the program with no downside financial risk.

“Medicare can no longer afford to support programs with weak incentives that do not deliver value, so in our new Pathways to Success program, we have reduced that period of time down to two years, while simultaneously offering providers more flexibility once they take on risk,” Verma said.


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