From USA Today

One large health system with hospitals in Virginia and Ohio this year cut off in-network access to consumers enrolled in some Anthem Blue Cross Blue Shield Medicare and Medicaid health insurance plans.

Two doctors groups with Scripps Health in San Diego are terminating contracts with private Medicare plans over concerns about payments and routine denials.

For years, hospitals, doctors and health insurance companies have squared off over how much to pay for medical services. Insurers negotiate contracts with hospitals and doctors so their customers can get lower, in-network rates at those facilities. These negotiations, usually hammered out behind the scenes, are becoming increasingly tense and public as hospitals seek adequate payments and health insurance companies attempt to check spiraling medical bills.

Experts say these disputes could be an early warning sign of more contract terminations ahead as hospitals and large doctor groups seek lucrative payments to offset inflation, healthcare workers’ double-digit raises and escalating prices for medical supplies.

But for patients caught in the middle of these disputes, the results can be devastating. Some need to switch doctors or insurance plans or potentially pay higher, out-of-network rates at a time when half of Americans are struggling to afford the rising cost of medical care.

Scripps Health ended the 2024 Medicare Advantage plan contracts with two medical units, called Scripps Clinic and Scripps Coastal. The decision will affect about 32,000 patients who will either need to switch Medicare plans or find new doctors.

“We’re unfortunately on the vanguard of what I think is going to be a very ugly few years between hospitals and commercial insurance companies,” said Chris Van Gorder, President and CEO, Scripps Health.

Hospitals target private Medicare plans

Many contract terminations involve hospitals rejecting terms for private Medicare insurance plans, known as Medicare Advantage plans. While traditional, government-run Medicare allows enrollees to choose from a wide variety of doctors and hospitals, private Medicare plans restrict access through networks and impose some cost-sharing requirements such as copayments or deductibles.

Hospitals that are rejecting private Medicare plans say they don’t reimburse at the same levels as traditional Medicare, delay or deny care through prior authorizations or impose other limitations.

Van Gorder said Scripps’ Medicare Advantage exit was a “very difficult decision” but one he had to make due to more than $75 million in annual losses. He tried to negotiate more lucrative reimbursement rates, but those talks fizzled.

While private Medicare plans are funded by government-run Medicare, they’re also profitable because insurers keep a portion of those payments before paying for care, he said.

Van Gorder described private Medicare offerings as “delay, deny or don’t pay” plans. “They’re in the business of making money,” he said.

Hospitals cut off insurers that ‘don’t reimburse us adequately’

Doctors groups and hospitals are more willing to air frustrations over private Medicare plans after think tanks and government watchdog agencies have issued critical reports about these insurers’ profits and practices, said David Lipschutz, associate director and senior policy attorney for the Center for Medicare Advocacy.

In 2022, a government watchdog report said private Medicare plans routinely rejected claims that should have been paid and denied services found to be medically necessary. These private plans rejected nearly one in five claims allowed under Medicare coverage rules and denied 13% of authorizations for medical services that government-run Medicare would have allowed, the U.S. Department of Health and Human Services inspector general investigators found.

Doctors and hospitals “are more willing to publicly express their frustration,” Lipschutz said, because these private Medicare plans get what “many people would characterize as overpayments.”

More than a half dozen other hospital systems from Bend, Oregon to Nashville, Tennessee have announced private Medicare contract terminations or lapses.

St. Charles Health System in Bend said it will end Medicare contracts next year with Humana, HealthNet and WellCare.

Mark Hallett, St. Charles’ chief clinical officer, said sticking with those private Medicare plans would “result in restrictions to patient care, longer hospital stays and administrative burdens” for doctors.

As of mid-April, Vanderbilt’s hospitals, clinics and doctors exited the networks of Humana’s HMO Medicare plan and Kentucky Medicaid plan. The hospital advised patients to either shop for a new insurance plan or contact Humana to find an in-network provider.

A Vanderbilt spokesman declined to answer questions about the lapsed contract, referring USA TODAY to the health provider’s website on the dispute. On the website, Vanderbilt cited the need for “fair partnerships” to cover higher costs for workers, supplies, equipment and medications.

“We can’t continue to partner with insurance plans that don’t reimburse us adequately,” Vanderbilt said.

Earlier this year, Bon Secours’ contract dispute with Anthem Blue Cross Blue Shield put tens of thousands of Medicare beneficiaries in Virginia and Medicaid recipients in Ohio out of network. In a lawsuit filed in August, Bon Secours alleged Anthem owed the health provider $93 million in unpaid claims. Last month, Bon Secours dropped the lawsuit as the two sides settled the payment dispute and reinstated in-network access for enrollees.

Despite these recent contract disputes, industry officials representing private Medicare plans say they remain wildly popular with seniors.

More than half of eligible Americans choose private Medicare plans over traditional Medicare because they deliver “better services, better access to care and better value,” said David Allen, a spokesman for America’s Health Insurance Plans, an industry group representing private health insurers.

Allen added private Medicare plans must maintain adequate networks of doctors and hospitals and notify customers when there are significant changes to these networks.

“Medicare Advantage includes robust protections for the people it serves,” Allen said.

Patients caught in the middle

As health providers such as Scripps Health sever ties with some insurers, consumers are confronted with difficult decisions on how and where to get medical care. Some face the prospect of seeking out-of-network care that might cost more.

Seniors in the San Diego area who will be cut off from the two Scripps Health doctors networks are scrambling to assess their options, said Craig Gussin, an insurance broker in Carlsbad.

“People are really upset with Scripps,” Gussin said.

Seniors on Medicare have the option to choose a new plan during Medicare’s annual open enrollment, which runs from mid-October through Dec. 7. Seniors can choose traditional government-run Medicare or switch to a private Medicare Advantage plan.

But some scenarios may catch enrollees off guard.

Traditional Medicare charges 20% coinsurance for medical care with no maximum limit. People on Medicare can purchase a supplemental insurance plan, called MediGap, which largely covers those extra medical bills. However, people can only enroll in MediGap at certain times such as when they turn 65 and initially sign up for Medicare coverage.

If people try to switch from a private Medicare plan to traditional Medicare, they may not be able to purchase this supplemental insurance. MediGap insurers can deny coverage for existing health conditions such as diabetes or heart disease or charge consumers more. Only states such as New York and Connecticut that have “guaranteed issue” laws that allow seniors to sign up for MediGap year-round.

“That trips so many people up,” Lipschutz said.

Gussin has been working long days answering calls from Scripps Health patients who want to know what their options might be. Some are willing to keep their existing private Medicare plan and change primary-care doctors. Others want to switch Medicare insurers.

Private Medicare plans must maintain an adequate network of providers. So if a hospital drops from an insurance plan’s network, that can raise questions about whether the insurance plan has enough in-network providers for enrollees, Lipschutz said.

If more hospitals and doctors drop private Medicare plans, ‘that further begs the question whether in fact that network is adequate,” Lipschutz said.

Medicare allows private insurers to set own rates

While the Centers for Medicare & Medicaid Services oversees private Medicare plans, the federal agency does not become involved in contract disputes.

The federal agency is prohibited from interfering in contract disputes or dictating reimbursement rates that private Medicare plans negotiate with health systems.

CMS evaluates whether contract disputes that terminate in-network coverage “have the potential to affect a large number of the (Medicare Advantage) enrollees,” a CMS spokesperson said.

If these contract terminations “result in significant network changes,” the federal agency can order a special enrollment period to allow beneficiaries to switch plans, the spokesperson said.

The agency said it did not have a number on how many such contract terminations or special enrollment periods are ordered each year.

Some private consultants who advise hospitals and health systems on how to get higher reimbursement from private insurers advise them to terminate contracts as part of a negotiating tactic, even if consumers face higher bills and collection threats.

Brad Gingerich is a vice president at Ensemble Health Partners, which describes itself as a tech-driven revenue cycle management company.

Gingerich said terminating a contract is “your last option” when negotiating with private insurers. Hospitals are adopting harder negotiating tactics with private Medicare plans because that’s where insurers are “making their money and refusing to really work in good faith” with hospitals and doctors.

“We don’t really put ourselves out as the bully on the block,” GIngerich said. “Sometimes you have to take more aggressive ways as a means to that end.

Bristol Myers Squibb has extended 340B contract pharmacy restrictions to all grantees, which affects health centers. They will recognize up to three contract pharmacies (one for Non-IMids, a second for IMiDs, and a third for Camzyos) for each covered entity. Furthermore, Merck, Teva, and Astellas have lifted 340B drug restrictions for all covered entities in Arkansas and Louisiana. Please note that these restrictions still apply to covered entities in other states. NACHC will continue to update their manufacturer restrictions chart as needed.

Congressman Greg Pence (R-IN), along with Rep. Brett Guthrie (R-KY), Rep. Vern Buchanan (R-FL), Rep. Michelle Fischbach (R-MN), Rep. Jared Golden (D-ME), and Rep. Chris Pappas (D-NH), led 91 of their colleagues on a bipartisan letter to Department of Health and Human Services (HHS) Secretary Xavier Becerra.

In the letter, the lawmakers expressed their concerns with the Centers for Medicare and Medicaid Services’ (CMS) proposed rule that was issued on September 1, 2023, at the direction of the Biden White House. This rule would establish minimum staffing requirements and standards for nursing homes, which would inevitably result in limited access to care for seniors, mandatory increases in state Medicaid budgets, and most consequentially lead to widespread nursing home closures.

“At a time when nursing homes are already experiencing healthcare worker shortages and financial hardships, CMS and the Biden Administration should not be implementing a regulation that would only exacerbate this issue. If implemented, facilities throughout the country will have no choice but to deny access to our nation’s seniors who need nursing home care, especially in rural communities, like many of the ones I represent in Indiana’s sixth congressional district,” said Congressman Pence. “This one-size-fits-all regulatory requirement will result in many negative consequences, and I strongly urge Secretary Becerra to reconsider this proposal.”

“I am pleased join with Representatives Pence, Fischbach, Golden, and Pappas to express our serious concern about the Centers for Medicare and Medicaid’s (CMS) proposed rule, which would lead to significant reductions in care for long-term care residents, especially in rural communities. We must ensure that we have a strong pipeline of long-term care, but instead of working with Congress to address long-standing health care workforce issues; CMS’ one-size-fits-all unfunded mandate makes it more challenging to find qualified workers further restricting access to these essential health care services. On the contrary, my bipartisan Building America’s Health Care Workforce Act would help bolster America’s nursing home workforce by extending a pathway for temporary nurse aides to become Certified Nursing Assistants. With the workforce shortages already affecting nursing homes across the country, seniors cannot afford yet another top-down mandate from the Biden administration,” said Congressman Guthrie.

“I am again encouraging the administration to reconsider its rule that could force nursing homes in rural Minnesota to close their doors,” said Congresswoman Fischbach. “Further closures of facilities in rural areas would leave seniors with little to no options for care. That is unacceptable. Instead, this letter outlines specific ways CMS can work with stakeholders to improve care and encourage recruitment and retention of qualified staff.”

“I remain committed to supporting access to high quality care for individuals residing in nursing home facilities. However, these proposed requirements could devastate access to long-term care for New Hampshire’s seniors,” said Congressman Pappas. “Instead of burdening nursing homes with new regulations during an ongoing workforce shortage, we should be focused on providing long-term care facilities with the resources and funding to stay open, recruit and retain a strong workforce, and provide residents with the best care possible. Granite Staters, especially those in rural areas, deserve access to long-term care in their communities, and I urge CMS to re-evaluate these regulations to prevent the closure of nursing homes across the country.”

“There are workforce shortages all across rural America and healthcare workers are no exception. I’m committed to working with my colleagues to find ways to prevent otherwise avoidable closures of nursing homes in Maine,” said Congressman Golden.

Background:

In September, CMS issued a proposed rule establishing minimum staffing requirements and standards for nursing homes. Highlighted in the proposed rule is that, according to the Bureau of Labor Statistics, “there are roughly 235,900 fewer health care staff working in nursing homes and other long-term care facilities compared to March of 2020.” Nursing homes around the country would need to hire nearly 13,000 registered nurses and 76,000 nursing assistants. Safety thresholds could increase a modest 1% while costing between $1.5 to $6.8 billion to fully implement. Noncompliance with CMS’ proposed minimum staffing requirements would lead to citations for noncompliance with Medicare Conditions of Participation, potentially resulting in a variety of enforcement actions, including imposition of Civil Monetary Penalties, denial of payments for new admissions, and even termination from the Medicare program.

Many organizations, including the American Health Care Association, National Rural Health Association, National Association of State Veterans Homes, Lutheran Services in America, Council for Health and Human Services Ministries, and LeadingAge, are supportive of this letter.

To read the letter, click here.

In addition to the letter, Reps. Pence and Fischbach have introduced H.R. 5796, the Protecting Rural Seniors Access to Care Act, to prevent CMS from implementing this rule until it can prove it will not result in the closure of skilled nursing facilities, will not harm patient access, and will not make workforce shortage issues worse.

The Pennsylvania Broadband Development Authority (PBDA) has drafted its Volume II of the Broadband Equity, Access, and Deployment (BEAD) Proposal, as required through the National Telecommunication and Information Administration’s BEAD Notice of Funding Opportunity and supplemental guidance. Volume II includes critical components of PBDA’s plans for implementing BEAD grant funding, to ensure that all Pennsylvanians have access to high-speed internet. To draft the document, PBDA complied with NTIA requirements and guidance on elements such as the application process, scoring criteria, labor standards, and other requirements, as well as Commonwealth policies.

Volume II will be available for public review and comment for the required 30 days, from October 16, 2023 through November 14, 2023. Upon receipt and consideration of comments and Board approval, PBDA will submit the Volume for consideration to the NTIA prior to the submission deadline of December 27, 2023.

The public is asked to share comments by 11:59PM on November 14, 2023.

Access the website at Broadband Equity, Access, and Deployment (BEAD) – PA Department of Community & Economic Development and scroll to the “SUBMIT FEEDBACK” button to provide input.

Questions on Volume II of the BEAD Initial Proposal can be directed to PABroadbandAuthority@pa.gov

From Healthcare Dive

HRSA is once again requiring hospitals to register outpatient clinics and list them on Medicare cost reports, setting a higher bar for eligibility in the drug discount program.

Dive Brief

• Hospitals are up in arms over new guidance issued by the Health Resources and Services Administration on Thursday that could restrict the eligibility of their outpatient clinics for drug discounts in the 340B program.
• During the thick of the COVID-19 pandemic in 2020, regulators waived longstanding 340B eligibility requirements for participating hospitals’ offsite locations to help streamline hospital operations. Now, HRSA is once again requiring hospitals to register outpatient clinics and list them on Medicare cost reports, according to a Thursday notice in the Federal Register.
• Many hospitals had expected the 2020 waiver to become permanent, so a number have yet to register their offsite clinics. Hospital association America’s Essential Hospitals said the change will “significantly harm essential hospitals” and their ability to care for patients.

Dive Insight

The 340B drug discount program requires pharmaceutical companies to give discounts on outpatient drugs for providers serving low-income communities. The discounts, which can range from 25% to 50% of the cost of the drugs, can be a big financial aid to those providers, which generally operate under very thin margins.

Yet under the new guidance, even if a hospital is eligible for 340B, its care sites may no longer qualify for the drug discount program.

Hospitals with large outpatient networks could pay more for prescription drugs as a result of the change, said Maureen Testoni, CEO of 340B Health, a trade group representing providers in the program, in emailed comments.

Many hospitals relied on HRSA’s prior language to invest in developing new offsite locations that have yet to start using 340B, according to Testoni.

“This change could require those hospitals to forego months of 340B discounts, pending the filing of the Medicare cost report,” Testoni said. “This would have significant financial consequence, potentially millions in 340B savings.”

But the change is just returning to standards that regulators have used to determine 340B eligibility for decades, HRSA said in the notice.

Regulators said hospitals have largely returned to business as usual coming out of the pandemic, and the waiver has made it harder for HRSA to oversee 340B compliance — a hot-button issue for pharmaceutical companies and lawmakers critical of how hospitals use 340B discounts.

In the notice, HRSA said recent audits of hospital-covered entities found more than one-third of hospitals were using 340B drugs in unregistered sites. Though those hospitals said they would register those locations in a future Medicare cost report, they had not done so as of May.

Now, in order to continue buying 340B drugs, hospitals’ outpatient sites need to either comply with registration requirements or notify HRSA that they’ve started the registration process within three months.

Hospitals that don’t comply could face “audit and compliance action,” HRSA said.

The 340B program has existed since the 1990s, but faces recent upheaval on multiple fronts. A number of major drugmakers are feuding with hospitals and the government, refusing to pay 340B discounts and sparking multiple lawsuits.

Drugmakers say the program doesn’t require hospitals to account for their savings or ensure they’re reinvested in patient care, a complaint shared by some legislators.

Hospitals are also not pleased with recent decisions from the Biden administration regarding 340B, with many airing concerns about regulators’ solution to repay 340B hospitals for years of alleged underpayments.

Click here for the 340B program guidance.

From Becker’s

Only 16 hospitals have converted to rural emergency hospitals since the CMS designation was made available Jan. 1, but more may follow suit in the coming quarters as rural hospitals continue to be challenged by staffing shortages and rising costs, which are stifling recovery efforts and leaving some on the brink of bankruptcy or closure.

Since 2005, 100 rural hospitals have completely shut down, with another 95 facilities no longer providing inpatient services, according to data compiled by the University of North Carolina’s Cecil G. Sheps Center for Health Services Research. Thirty-seven of those rural hospital closures have occurred since 2020.

To address concerns that rural and critical access hospital closures are reducing access to care for people in rural areas, CMS established the rural emergency hospital designation, a new Medicare provider type.

The designation aims to curb rural hospital closures by offering them a chance to close infrequently used inpatient beds and focus on outpatient and emergency department services.

In exchange for giving up their expensive inpatient beds and focusing solely on emergency and outpatient care, rural emergency hospitals receive a 5 percent increase in Medicare payments as well as an average facility fee payment of about $3.2 million a year.

While the designation has helped some hospitals survive under a new provider type, others are still weighing the benefits and drawbacks of implementing such a drastic change to their services and business model.

The hospitals that have made the switch are predominantly in the South and in states that have not expanded Medicaid coverage. Here are the 16 facilities that have converted to rural emergency hospitals, beginning with the most recent:

• Harper Community Hospital (Buffalo, Okla.)
• South Central Kansas Medical Center (Arkansas City)
• St. Bernards Five Rivers Medical Center (Pocahontas, Ark.)
• Assumption Community Hospital (Napoleonville, La.)
• Sturgis (Mich.) Hospital
• TriStar Ashland City (Tenn.) Medical Center
• Stillwater Medical-Blackwell (Okla.)
• Blue Ridge (Ga.) Medical Center
• St. Luke’s Health-Memorial San Augustine (Texas)
• Jefferson County Hospital (Fayette, Miss.)
• Stillwater Medical-Perry (Okla.)
• Anson (Texas) General Hospital
• Alliance Healthcare System (Holly Springs, Miss.)
• Falls Community Hospital and Clinic (Marlin, Texas)
• Irwin County Hospital (Ocilla, Ga.)
• Crosbyton (Texas) Clinic Hospital

St. Bernards Healthcare’s Five Rivers transitioned to a rural emergency hospital on Sept. 1, the first hospital in Arkansas to do so.

With inpatient extended care accounting for only about 5 percent of the hospital’s business, the decision was a relatively easy one for the facility, Randy Barymon, the hospital’s administrator, told local news outlet KAIT8.

“Cost of care has certainly gone up, and reimbursement has gone up. It’s actually harder to get reimbursed for the care that we provide here at Five Rivers,” Mr. Barymon told KAIT8. “I think a lot of rural facilities are seeing a trend down inpatient extended-stay care. This was really just a natural progression for us.”

For Anson General Hospital, the decision to convert to a rural emergency hospital came down to survivability.

The Texas hospital reported three consecutive years of financial losses and patient volumes declined to about 1.7 inpatients a week, on average, partially due to factors related to the COVID-19 pandemic.

“Our numbers drastically declined, and we knew that this was our only hope to stay open,” Chief Nursing Officer Anna Doan, BSN, RN, told Becker’s.

The hospital filed its application in early January and, effective March 27, has been operating as a rural emergency hospital. CEO Ted Matthews retired from the hospital more than a decade ago and returned to helm the facility in February.

“We have embraced this new identity,” Mr. Matthews told Becker’s. “What it allowed us to do is continue to provide access to care. We were the only hospital at one time. Jones County had three hospitals, and we are the lone surviving hospital. And if we had to close, there would have been no hospitals in the county.”

Short-term health insurance plans are exempt from key Affordable Care Act protections — consumers with preexisting medical conditions who purchase these plans can be denied coverage and anyone who buys one may lack coverage for key services. The Trump administration loosened regulation of short-term plans, with a stated goal of increasing coverage and reducing the uninsured rate. A new analysis indicates that it did not accomplish this: coverage did not increase and the uninsured rate did not drop.