Volume 22

#1 Far Reaching Consequences Of The Medical Abortion Decision

A Texas federal judge appointed by former President Donald Trump has halted the Food and Drug Administration’s 2000 sanction of mifepristone (Mifeprex), the primary drug used for medical abortions, in some states. Judge Matthew Kacsmaryk from the U.S. District Court for the Northern District of Texas also postponed the implementation of his decision for 7 days (until April 14), a move that gives the federal government an opportunity to contest the verdict. The same week, however, Judge Thomas Rice from the U.S. District Court for the Eastern District of Washington delivered a conflicting decision, ruling medical abortions must remain available.

So What’s the Big Deal? The most obvious concern about Judge Kacmaryk’s ruling is that a drug that has been on the market for more than two decades will now be unavailable in some states. There is a secondary business concern, however: can other drugs be challenged in federal court by competitors on weak safety grounds? If so, profits will suffer – and courts could become the final arbiters of drug safety even though judges likely have very little scientific knowledge about the medications being challenged.

#2 Physician Staffing Firms Face Their Own Back-Office Staffing Woes

A study by consulting company CWH Advisors that is based on 40 healthcare executive interviews has found 63% of providers faced a lack of staff on their revenue cycle management (RCM) teams. These providers are trying to recruit RCM professionals to enhance the patient experience. Why? Because, according to an April 6 press release from Synchrony, only 42% of providers are content with their patient payment solutions.

So What’s the Big Deal? Reimbursement delays. Many physician staffing firms are beginning to feel the squeeze with declines in reimbursement payments and arbitration delays associated with the No Surprises Act. This trend further aggravates an already challenging issue. Staffing firms facing shortages need to identify outsourced opportunities to process patient bills and collections, which means there is an opportunity for technology and business growth for RCM firms.

#3 Prior Authorizations Create Care Delays

A recent survey by the American Medical Association says 94% of doctors experience care delays related to prior authorization. This finding highlights the need for change and oversight in this area, and the federal government is trying to facilitate that movement. In December 2022, the Centers for Medicare and Medicaid Services (CMS) proposed a regulation aimed at accelerating the approval process for prior authorizations. Stakeholders had until March 13 to offer input to CMS on how to achieve this goal. CMS is now reviewing that advice.

So What’s The Big Deal? The burden of prior authorizations continues to result in higher levels of burnout, patient care delays, and administrative headaches and costs for physicians. With nearly two full days each week associated with prior authorizations, streamlining the process could have a significant impact. There also is growing evidence prior authorizations simply do not work to curtail unnecessary treatments.

#4 ChatGPT/AI coming To Epic

One of the biggest electronic health record platforms, Epic, announced its plan to implement Microsoft's generative AI-powered technology, GPT-4, into its electronic health records (EHRs). Epic Senior Vice President of Research and Development Seth Hain said GPT-4 is "revolutionary" for the healthcare sector.

So What’s the Big Deal? While physicians will not be replaced by AI, the technology can improve efficiencies and reduce the operational need to have the same number of providers to care for the same slate of patients. That outcome will help address the projected physician shortage. While AI and ambient voice recognition technology has been used for the last 4 years, the addition of ChatGPT to the EHR leverages predictive technology that will guide physicians in medical decision-making and reduce their need for documentation. Many believe the technology could be “transformative”.

#5 Rural Hospitals May Get Another Lifeline

The hospital industry praised a bipartisan group of senators for reintroducing a bill last week that would adjust and extend specific Medicare reimbursements for rural hospitals. The Rural Hospital Support Act was initially introduced in the last Congress, but never advanced beyond the committee stage.

So What’s the Big Deal? Rural hospitals are suffering financially due to reimbursement declines, rising supply costs, and higher labor costs due to staffing shortages. If approved by Congress and signed into law, the funding in the Rural Hospital Support Act would fortify the healthcare safety net in vulnerable communities. However, with the Medicaid redetermination alterations that went into effect April 1, 2023, certain hospitals may face intensifying headwinds due to escalating uninsured rates. As hospital closure risks loom for nearly one third of rural hospitals, experts caution that without timely intervention, the closure rate could accelerate. Addressing reimbursement declines and staffing issues is imperative to safeguarding the future of rural healthcare.

#6 Murky Future Ahead For Digital Health

Earlier this year, digital health funding seemed to be recovering, but the downfall of Silicon Valley Bank (SVB) in March and the subsequent failure of other banks has halted that trend. According to a Rock Health report, digital health startups are now clinging to liquid assets and making the most of their current resources, with 2023 funding expected to fall below the levels not seen since before the pandemic.

So What’s The Big Deal? The collapse of SVB highlighted significant vulnerabilities in the market and slowed the speed of deals. In fact, the collapse nearly triggered a liquidity crisis and certainly put a stop to the funding progress made in January and February. Startups are now faced with the challenge of identifying their next banking partner. Numerous businesses are now leaning toward larger banks following the disintegration of regional lenders, potentially hindering their ability to access swift, short-term funds.

#7 Is Telehealth Coming Back?

Capital may be drying up, but consumers are still hot on telehealth. For the third consecutive month, telehealth appointments rose. Specifically, in January, they made up 5.9% of total medical claim lines, an improvement from December's 5.5%. The use of online consultations increased across all regions, with the most significant growth in the Midwest and West (9.5% each). There also was a 6.7% increase in the South and 3.2% growth in the Northeast. Fair Health, which recently started monitoring audio-only telehealth usage, discovered audio-only utilization experienced a decline nationwide from December to January, however.

So What’s The Big Deal? The telehealth industry experienced a phenomenal surge during the pandemic as hospital closures, reimbursement declines, and staffing shortages compelled healthcare providers to seek alternative solutions for patient care. But as the Public Health Emergency (PHE) draws to a close, regulatory changes and market saturation have led to a decline in telehealth investments. However, recent trends indicate a resurgence in this sector, driven primarily by the expansion of value-based care contracts and services. While the rapid growth witnessed during the pandemic may not happen again, telehealth remains a vital component in addressing patient access, reimbursement declines, and staffing challenges in the evolving healthcare landscape.

#8 Medicare's Stick And Carrot With Medicare Advantage

CMS’ final Medicare Advantage and Medicare Part D regulation for 2024 is intended to enhance the federal monitoring of health insurance providers. It will significantly alter quality metrics, prior approvals, marketing, and health equality standards. And U.S. Department of Health and Human Services Secretary Xavier Becerra said the rule also will clamp down on deceptive marketing tactics employed by health insurance firms that offer Medicare Advantage and Part D prescription drug plans, as well as their affiliated organizations. CMS also made big changes to their regulation of risk-adjustments. Insurance companies receive increased reimbursements from the federal government due to identifying additional health issues. According to Medicare authorities, some insurers manipulate this system by claiming their clients have more severe ailments than they actually do. To address this issue, Medicare is eliminating or merging codes for specific medical conditions, including peripheral artery disease and chest pain, which result in overblown payouts.

So What’s The Big Deal? These policies reflect a classic carrot-and-stick approach:

CMS is taking a more active role in the regulation of Medicare Advantage (The Stick).
The Biden administration also delayed the risk adjustment process over three years versus one year which had significant payment implications. (The Carrot)

The news pleased Wall Street, which is heavily invested in Medicare Advantage programs.

#9 Your Privacy May Not Be Secure At A Hospital

New research shows that in 2021, 99% of American hospitals used web-based tracking systems that shared visitor data with an extensive range of external entities including technology corporations, information dealers, and private investment enterprises. The gathered data comprised visits to webpages focused on particular health issues like depression, breast cancer, and Alzheimer's disease.

So What’s The Big Deal? All U.S. hospitals must safeguard patients' privacy and the specifics of their medical treatment. Still, virtually all hospitals employ advanced data instruments to monitor and disseminate visitors' personal information as soon as they begin browsing a hospital’s websites. The widespread application of these tracking tools could potentially conflict with the privacy anticipations, or even the legal safeguards. that individuals assume while exploring the internet for healthcare and related information.

#10 Does Vertical Integration Increase Costs?

The U.S. healthcare system is experiencing significant transformation. A number of hospitals are merging with doctor practices in a vertical manner. While vertical integration may enhance quality through better care coordination, it could also negatively affect care. There is limited information, for example, about how doctors modify conduct when there are shifts in financial ownership and we do not know much about the motivational frameworks within these integrated establishments.

So What’s The Big Deal?While consolidation enhances the functional effectiveness determined by doctors' productivity, it adversely impacts the quality and total expenditure. There are several possible policy levers lawmakers and regulators could use to alleviate the unfavorable outcomes of vertical integration. For example, policy makers could have greater oversight over anti-competitive behaviors and referral patterns, and use the power of the purse to shift incentives in Medicare reimbursement changes.

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