What might happen during the lame-duck session of Congress in December, and what might happen in the new Congress that opens in January? The prospect of divided government is causing healthcare policy leaders to strategize carefully around which policy priorities they want to promote, knowing that the chances of certain types of legislation might be difficult to enact. That said, leaders at the Charlotte-based Premier Inc. see opportunities as well as challenges.
But in the immediate future, Premier’s advocacy leaders are moving ahead decisively to ask members of Congress to help hospitals, physician groups, and health systems to weather the current financial storms they’re facing.
Premier’s leaders sent Sens. Chuck Schumer and Mitch McConnell and Reps. Nancy Pelosi and Kevin McCarthy, as the four senior party leaders in the Senate and House of Representatives, a letter dated Nov. 21, calling on Congress to protect patient access to care by addressing the intense financial pressures facing providers and several pending end-of-year payment cuts that threaten providers’ ability to remain operational across the country,” according to a press release posted to the alliance’s website. As the press release noted, “Underscoring the need to provide a minimum of two years of relief from these cuts, Premier called on Congress to:
• Waive the statutory PAYGO cut;
• Extend the Medicare Dependent Hospital (MDH) program and Low Volume Hospital (LVH) adjustment;
• Prevent the 3 percent reduction to Physician Fee Schedule reimbursement; and
• Extend the 5 percent Medicare bonus for participation in Advanced Alternative Payment Models.
In addition, Premier urged Congress to address other critical bipartisan and bicameral policies that would close gaps in healthcare access and improve the delivery of care.”
Most significantly, the full letter to the congressional leaders urged them to act to help support patient care organizations nationwide, as they struggle with pandemic-induced cost and labor challenges, writing that, “As Congress enters the post-election work period, Premier urges lawmakers to take action to protect Americans’ access to high-quality and cost-effective care. Most urgently, Premier calls on Congress to protect patient access to care by addressing the intense financial pressures facing providers and several pending end-of-year payment cuts that threaten providers’ ability to remain operational across the country. Providers, both acute and non-acute, continue to experience significant fiscal challenges stemming from a combination of increased labor costs, record inflation and lagging reimbursement rates that do not account for these unprecedented financial challenges. For example, a Premier analysis based on actual wage data found that hospitals’ labor rates increased 16.6 percent on a per-paid-hour basis since Q4 2020 and do not show signs of slowing. In the first two quarters of 2022 alone, labor rates increased by 10 percent. However, 2023 payment rates from the Centers for Medicare & Medicaid Services (CMS) fall woefully short of accounting for these rising costs. Financial pressures due to labor constraints are only expected to be further exacerbated as shortages across the clinical and non-clinical healthcare workforce worsen over the next decade.”
And, the letter went on, “Furthermore, Premier calls on Congress to provide a minimum of two years of relief for providers. For the past several years, including prior to the COVID-19 pandemic, providers have been caught in a cycle of continual crisis having to defend themselves against payment cuts at least annually, and oftentimes even more frequently. This constant battle has impacted the ability of providers to focus on longer-term strategic planning and care transformation as they fight to keep their doors open. As providers prepare to successfully transition to a post-pandemic environment and unwind from the waivers and flexibilities provided during the pandemic, a sufficient runway of relief is vital as they embrace the new normal. The financial pressures facing our healthcare providers are real. Our healthcare providers deserve adequate payment that reflects both the current environment and their heroic actions throughout the course of the pandemic – Premier urges Congress to make our nation’s providers whole. Specifically, Premier urges Congress to take immediate action during the lame duck session to reverse four pending payment cuts that threaten the viability of providers.”
The full text of the letter can be found here.
This week, Soumi Saha, PharmD, Premier’s director of advocacy, spoke with Healthcare Innovation Editor-in-Chief Mark Hagland, regarding prospects in the new Congress, and Premier’s legislative and regulatory goals in the near future. Below are excerpts from that interview.
As we know, the Republicans will have a slender majority in the House of Representatives, while Democrats will hold onto a slender majority in the Senate, in the new Congress. What’s your sense of what could be accomplished in the next year in Congress?
We were gearing up for a divided Congress; what we were not anticipating was these razor-thin margins on both sides. So that’s unique and different. In some ways, we’re excited about it; historically, Premier has noted that more gets done in a divided Congress; the razor-thin margins make it even more interesting, because neither party is going to have strong force on its side. However, with such tight majorities, it’s hard to move. Frankly, a 51/49 Senate is much better than a 50/50 Senate. And it will be interesting in the House.
Do you and your colleagues have any concern about chaos being the rule over the next two years, and nothing getting done?
I think the goal is to look beyond chaos and envision what could happen; and there are opportunities to move forward in a bicameral, bipartisan manner. We’re going to focus on value-based care, telehealth expansion, behavioral health policy, access to data, and streamlining healthcare through technology, and pandemic preparedness and supply chain resiliency.
What will happen with the Public Health Emergency?
There are still a lot of questions around when the PHE will end, and how. The current declaration is scheduled to end mid-January; HHS had promised a 60-day notification period; we’ve passed that last week. Now, whether or not it’s extended beyond January 15, Congress would have to act. I do believe we’ll see another 90-day extension through April. One question is whether 60 days is enough to unwind the special flexibilities. We’re hearing most people do not believe 60 days is enough, especially because HC organizations do not have the manpower to undo a lot and to go back to doing things the old way. So we’re asking what an appropriate timeline is; and, should we be focusing more on continuing the PHE but identifying which waivers and flexibilities should be unwound in which order. The Administration could do that. So there’s the gauntlet approach or the stepwise approach with stages.
So the administration could act unilaterally to do it step-wise?
Yes, it could.
What are the chances of that?
Those are conversations to be had. And had we seen a larger “red wave,” the Administration would be under more pressure from Republicans. But now, there’s less pressure and that allows for nimbleness for HHS [the U.S. Department of Health and Human Services] to step-wise end the PHE.
Premier has asked that telehealth flexibilities be extended for two years. Currently, they’re extended for 150 days after the end of the PHE. We got that as part of the Continuing Resolution in September. We really want to see a two-year extension beyond the end of the PHE. We feel that two years is necessary to understand how telehealth might operate in a non-PHE environment, and to see how it might operate in the future.
There had been brewing during the worst months of the pandemic, a dispute among providers over whether payment parity for televisits might actually be creating a drag on the development of ACOs [accountable care organizations], as some ACO leaders contended that payment parity actually disadvantaged their developmental work.
We have the largest ACO collaborative in the country, with over 100 ACOs, and ACOs have for years embraced televisits, to increase reach, improve outcomes. And there’s a lot of data that demonstrates that. There might perhaps be some concerns that the ability of folks to leverage telehealth could have been a differentiator at one point; but I have not heard that. Their ultimate goal is to improve outcomes and lower costs, and they will gladly welcome other providers into that circle; whatever is in the best interest of patient, is what matters.
More broadly, what are your concerns over reimbursement in the next couple of years?
We just sent a letter to the Hill [as referenced in the introductory paragraphs above]. And we’re in unprecedented times, and because of staffing challenges, record inflation, and caseloads not returning to pre-pandemic levels, providers across the country are in financial distress. Labor costs have increased 16 percent YoY since the start of the pandemic, and it will continue. So it’s a perfect storm: we’re coming out of the pandemic, we have an increasing number of people who will need care as the Baby Boomers age, and we have a decreased number of caregivers. The supply/demand equation does not work. So we’re going to have to get creative. But you can’t afford to lose more. You’ve got to make your baseline and grow from their baseline.
Many hospitals are at 0 to 1 percent revenue margins now, so things are quite dire, correct?
Indeed, most are budgeting to lose money, and the headlines are very clear. And it’s only going to get worse as labor costs and inflation continue to rise. We had one hospital executive say, even if someone gave me all my supplies for free, inflation in labor costs would still cause me to lose money. The challenge is that CMS’s payment rates fall woefully short. There’s a major delta of where costs are today versus where they’re being reimbursed. And in our letter to Congress, we say, we’ve got to keep our providers whole. We’re saying, you need to make providers whole for at least two years. And it’s the annual challenge over provider payment cuts. We need to help providers whole so that they can make strategic decisions on the future of healthcare. They can’t do that when they’re in constant battle.
Advocacy-wise, are we more vulnerable than ever to reimbursement cuts?
I actually think that from a hospital perspective, the industry is stronger than it has been; regardless as to whether you’re an acute or non-acute provider, urban, rural, for-profit, not-for-profit, 340B, non-340B, academic or community, you’re having labor challenges, supply chain shortages, and you’re dealing with regulatory burden. Those are universal truths across every provider across the country.
What is your sense of the direction that the key committees might take?
In House Energy and Commerce and Senate Finance, leadership will stay the same; in Senate HELP [Health, Education, Labor and Pensions], Bill Cassidy and Bernie Sanders will take the helm. We’re very excited to work with Senator Cassidy, who has a longstanding history of bipartisanship. We’re excited to see what they can do. On House Ways and Means, a three-way race is taking place among Reps. Adrian Smith, Jason Smith, and Vern Buchanan. Meanwhile, Richard Neal will stay on as Ranking Member on Ways and Means. He’s been excellent. So we do anticipate some bipartisanship coming out of that committee.
Do you anticipate any big policy changes in the Administration beginning in January?
I hope so, because we have to remember that the most powerful person in HC is the Secretary of HHS. And with Congress so divided, it will take them a while to get to bipartisanship, and I hope they can get there. HHS under this Administration has been extremely hesitant to leverage their regulatory authority, I believe because of fear of litigation; they really spent the first two years with one million and one RFIs [requests for information]. My hope is that they move from listening mode to action.
In which areas?
Health equity would be one; there’s been no shortage of RFIs on HE and SDOH. So how they integrate those concepts into CMS payments; and also the next generation of models out of the Innovation Center.
Any additional thoughts?
I’ll always note that Premier is that non-partisan, bipartisan, evidence-driven voice in D.C.; that’s how we’ve been so successful in bipartisan policy development. We knew that the results of the election wouldn’t change us. Slightly different strategies, perhaps, in the future, but we’re going to keep doing what we do best.
