Yehuda A. Sugarman

Based on a partnership with Urology Times, articles from the American Association of Clinical Urologists (AACU) provide updates on legislative processes and issues affecting urologists. We welcome your comments and suggestions. Contact the AACU government affairs office at 847-517-1050 or info@aacuweb.org for more information.

In recent years, Congress has reached new lows in its inability to work together and pass necessary legislation, even when strong majorities of Americans agree on an issue. Looming deadlines with potentially harmful consequences of inaction, however, sometimes have a way of motivating the parties to put aside their differences and act decisively.

That is exactly what happened in March, when both the US House and Senate enacted measures to extend the Medicare sequester moratorium just days before it was set to expire. The 2% across-the-board cuts in Medicare payments were originally postponed by Congress, as part of the CARES Act, to help soften the impact of the COVID-19 pandemic on providers. The moratorium was then extended several times, most recently under the stimulus package enacted in late December.

, would postpone sequester cuts until the end of 2021 and delay an additional (projected) 4% Medicare cut in 2022, or possibly sooner, that would be automatically triggered—due to mandatory Pay-As-You-Go (“PAYGO”) rules—to offset the budgetary effects of the $1.9 trillion COVID-19 relief bill.

On March 25, just 6 days after the House enacted H.R. 1868, the Senate passed, by a 90-2 vote, an amended version of the bill that would extend the sequester pause through the end of the public health emergency. To pay for the 9-month extension, the Senate moved the sequester end date to 2031 and made some technical corrections, such as applying certain payment limits to rural practices that enrolled in Medicare during the pandemic.

Unlike the House bill, the Senate did not include language waiving the PAYGO rules. Thus, assuming the House adopts the Senate version of the bill, as is expected, organized medicine will need to continue the fight against even larger sequester cuts that could kick in at the same time as the 2% cuts that appear to be on the verge of being postponed.

Physician practices still under pressure in 2021

By pausing reductions in Medicare payments at this fragile time for health care professionals, Congress will be providing them with the buffer they need to stabilize their practices and recover from the revenue losses incurred during the public health crisis.

A survey conducted by the American Medical Group Association last year found that more than 90% of medical groups and integrated health care systems reported revenue reductions of at least 25% due to the pandemic.1 Many facilities reported revenue losses above 50%.

Financial assistance programs targeted at providers in 2020, such as the CARES Act Provider Relief Fund, the Small Business Administration’s Paycheck Protection Program, and the Centers for Medicare & Medicaid Services’ (CMS) Accelerated and Advance Payment Program helped many physician practices stay afloat, but providers are still facing considerable financial and operational challenges due to the pandemic.

An American Medical Association report from last summer analyzed Medicare physician claims data and found that spending had dropped 12% below expected pre-pandemic levels by July 2020, resulting in a cumulative estimated reduction of $9.4 billion, or 19%, in Medicare claims.2 Meanwhile, the American Hospital Association projected health care industry at large could lose up to $323 billion by the end of 2020 due to COVID-19.3

The financial viability of independent practices continues to be threatened in 2021 as patient volume and revenue remain a cause of concern. A Kaufman Hall report noted that even as COVID-19 cases have subsided in the early part of 2021, “volumes, margins, and outpatient revenues of hospitals” remained down from pre-pandemic levels.4

Part of the risk to providers lies in the reliance on telehealth services that soared during the pandemic when Medicare and HIPAA rules were relaxed. Both public and private insurers moved quickly to reimburse telehealth visits at the same rate as in-person care. Without knowing whether those rules and reimbursement rates will remain in place, providers are forced to operate under a cloud of financial uncertainty.

On top of that, physicians must continue to abide by pandemic protocols that create financial stress, such as higher expenses for personal protective equipment (PPE) and supplies, and spacing outpatient visits to ensure there is enough time for sanitizing between appointments. Absorbing Medicare cuts on top of these financial pressures and uncertainties would be overwhelming to most physician practices.

Having passed the Senate, H.R. 1868 now heads back to the House where lawmakers must now pass the amended legislation, which they are expected to do shortly after their return from recess on April 13.

As the 2% cuts were slated to go into effect on March 31, CMS announced that they instructed Medicare Administrative Contractors (MACs) to temporarily withhold payments for claims for services provided on or after April 1. This will minimize the number of claims the MACs must reprocess assuming Congress enacts the legislation sometime in April.

1. Editors of Healthcare Informatics. Even after reopening, healthcare delivery organizations still hurting financially. July 22, 2020. Accessed March 31, 2021

2. COVID-19 financial impact on physician practices. American Medical Association. Accessed March 31, 2021

3. LaPointe J. AHA projects $323B in COVID-19 hospital financial losses in 2020. RevCycle Intelligence. July 1, 2020. Accessed March 31, 2021

4. Commins J. Pandemic continues to strain hospital volumes, margins, revenues in 2021. Healthleaders. February 22, 2021. Accessed March 31, 2021

Articles

“Looming deadlines with potentially harmful consequences of inaction… sometimes have a way of motivating the parties to put aside their differences and act decisively,” writes Yehuda A. Sugarman of the AACU.

Congress poised to extend moratorium on Medicare sequester cuts

Based on a partnership with Urology Times, articles from the American Association of Clinical Urologists (AACU) provide updates on legislative processes and issues affecting urologists. We welcome your comments and suggestions. Contact the AACU government affairs office at 847-517-1050 or info@aacuweb.org

The coronavirus disease 2019 (COVID-19) has changed all aspects of our daily lives. Even as vaccines are rolled out and a possible light has emerged at the end of the tunnel, the impacts on our health care system will linger for months, perhaps years.

Providers have been forced to adapt to changes brought about by federal mandates, state directives and guidance, and economic realities. Some of the shifts in the delivery of medicine were already underway before the pandemic, such as the move to value-based care and increased demand for telehealth services, but those shifts have been accelerated by the public health emergency (PHE).

Fear of exposure to COVID-19 and widespread loss of health insurance coverage due to job losses, among other reasons, has resulted in sharp declines in patient visits and elective procedures. It will likely take years and/or a significant federal policy change to bring the millions of workers who lost their employer-sponsored coverage back into the commercial insurance system.

This article will address the 3 health care trends that seem most likely to continue in 2021 or until the millions of jobs with health benefits return and the threat of contracting COVID-19 has subsided.

Continued demand and access to telehealth

Perhaps the most substantive change to the delivery of health care during the COVID-19 pandemic has been the broad expansion of telehealth services. Greater flexibility in telehealth policies provided by federal, state, and commercial payers has provided a mechanism for medical care to be delivered safely and conveniently.

By and large, physicians and patients alike have embraced the changes, leading policymakers at all levels to push for at least a partial continuation of the policies that have allowed telehealth to gain popularity during the pandemic. By the end of 2020, about half of all U.S. states had passed legislation extending telehealth waivers beyond COVID-19.

 from November, a strong majority of patients (67%) said they would be at least somewhat likely to continue utilizing telehealth once a COVID-19 vaccine became available. The report also showed that 71% of patients felt the quality of care they received via telehealth was the same as or better than in-person medical care.

Health care providers appear to be equally interested in continuing to offer telehealth services. A Mayo Clinic/MITRE 

 of providers conducted last summer found that nearly 70% were motivated to expand their usage of telehealth because of their experiences with it during the pandemic.

As more people are vaccinated and the pandemic slows, the utilization of telemedicine will continue to decline as it has already from its peak during the first few months of the PHE. But utilization will almost certainly remain higher than it was pre-pandemic, particularly for patients who have difficulty traveling to physician offices due to distance or disability.

Urology patients, many of whom fall into a high-risk category for COVID-19 due to their age or chronic medical conditions, could be more inclined to wait longer before returning in-person to their physicians’ offices. Indeed, a 

 out of Germany last year found that nearly 85% of urology patients preferred a telehealth visit over a face-to-face consultation.

Ultimately, the ability of providers to continue offering telemedicine to their patients will depend, in large part, on the continuation of 

 regulations, as well as commercial payer policies, that have authorized fair reimbursement for telehealth services provided during the PHE.

The sudden and steep decline in elective procedures last year caused a major financial hit to providers, especially those dependent upon the traditional fee-for-service reimbursement model. Practices that participated in shared-risk financial models, however, had much more success remaining solvent during COVID-19 lockdowns as revenue remained more consistent.

The pandemic has helped shift the notion that joining value-based payment arrangements requires taking on significant downside risk. With patient visits still considerably lower than pre-COVID levels, some providers who participate in fee-for-service models that reward physicians based on patient volume are rethinking the concept of risk.

Additionally, government entities, strained by the economic toll of the pandemic, are exerting more pressure to reduce health care spending, which can be achieved by a move toward value-based care (VBC) contracts. Last year, the Centers for Medicare & Medicaid Services (CMS) announced its intent to accelerate mandatory bundled payment models and is aiming to transition 100% of Medicare providers into 2-sided risk arrangements by 2025.

Commercial payers are moving in the same direction. In September, CareFirst, the mid-Atlantic’s largest not-for-profit health care insurance company, and MedStar Health, the region’s largest not-for-profit health care provider, 

 that the organizations are partnering to offer value-based health care “to improve affordability, accessibility, quality, and the patient experience for the communities they collectively serve”. Other health systems are 

With the new administration committed to closing racial and ethnic disparities and gaps in health care coverage, there are likely to be incentives over the next 4 years for providers to adopt alternative payment models that are more successful at closing those gaps and more closely tying health care costs to outcomes as opposed to volume.

Continued attrition of commercial plan payers

 published this past October found that 7.7 million US workers had lost their jobs because of the COVID-19 pandemic. Despite steps taken by policymakers to shore up employer-sponsored health insurance, an estimated 15 million Americans (including workers’ dependents) lost their coverage—one of the greatest losses of health coverage ever recorded.

The result has been a steady migration to government-run programs, like Medicaid, CHIP, and the ACA insurance exchanges, which reimburse providers at much lower rates. The rise in Medicaid patients and self-pay patients will continue to pose a financial strain on providers who rely upon margins from commercial insurance to offset costs from government-funded programs and uncompensated care.

 from the American Medical Association, for an average physician practice with approximately 43% of revenue coming from commercially insured patients and 17% coming from Medicaid patients, each 1% shift of commercial enrollment to Medicaid, exchange, and uninsured coverage will result in an estimated .26% loss in aggregate revenue.

 indicates that the rates Medicaid Managed Care Organizations pay for the top 10 urology codes average about 58% of what commercial payers reimburse for the same services. Medicare Advantage plans reimburse on average at 66% the rate paid by commercial payers for those urology codes (based on 2019 Medicare FFS spending).

A strong economic recovery in the latter half of 2021 could lead to more churn in the insurance markets as people are rehired and regain their employer-sponsored coverage. But so far, employers have shown reluctance to hire back at full capacity, particularly full-time employees with health benefits. Additionally, some of the jobs that come back, even at full-time, will no longer offer health insurance.

One additional factor that may impact the distribution of enrollees in commercial vs government-run plans is if, and to what extent, Congress provides aid to state and local governments whose revenues have been decimated by the pandemic. If the economic turmoil lags on and the federal government does not step in to stabilize state budgets, states may be forced to reduce their number of Medicaid and exchange enrollees.

The AACU will be tracking these trends throughout 2021 and communicate developments via 

"Perhaps the most substantive change to the delivery of health care during the COVID-19 pandemic has been the broad expansion of telehealth services," writes Yehuda A. Sugarman of the AACU.

Three health care trends for urologists to follow in 2021

With the exception of a few uncalled House races and 2 Senate runoff races scheduled for January 5 in Georgia, the outcomes of the 2020 election are largely now determined: A new Democratic president, a slightly narrower majority for Democrats in the House of Representatives, and pending the outcome of the Georgia runoffs, a likely Republican-controlled Senate.

Such a scenario would mean the continuation of divided government in Washington for at least the next 2 years, likely halting, or at least scaling back, an ambitious health policy agenda envisioned by Democrats under a Biden administration. Creating a public option government health plan is probably off the table, as is lowering the eligibility age for Medicare to 60, which could expand the population of beneficiaries by more than 20 million Americans.

With a GOP-controlled Senate and Democrat-controlled House, the most plausible path for President-elect Biden to advance his health care agenda will be via administrative action, such as executive orders and regulatory rulemaking. For example, he is likely to roll back Medicaid work requirements sought by the Trump administration and bolster the Affordable Care Act in several areas. Some of these actions, however, are required to undergo the full regulation-writing process and comment period, which can take many months, occasionally years.

There are also some limited areas, including surprise medical billing, prescription drug pricing, and a shift to value-based care, where policymakers may be willing to work together to advance policies broadly supported by the electorate. Whether their popularity with voters will be enough to break the partisan gridlock on Capitol Hill, however, remains to be seen.

Lawmakers have gotten close to reaching a deal on surprise billing a couple of times over the last 12 months, but ultimately failed to agree on how exactly to protect patients from bills incurred when they receive care from a doctor or hospital not in their insurer’s network. More than 2 dozen states have enacted protections to address surprise medical billing, but Congress has not passed such a measure. At issue is how to resolve payment disputes that arise between providers and insurers.

One possible solution would require insurers to pay for out-of-network care at a benchmark rate, such as the average Medicare price for the service in a specific geographic area. Providers oppose this proposal as it would drastically lower reimbursement. Instead, they back arbitration under which an independent third party determines the amount insurers must pay out-of-network providers.

There are a lot of factors that favor action on this issue. Voters 

 legislation that would limit patients’ exposure to charges from non-network providers. At a time when millions of people have lost their employer-sponsored insurance due to the pandemic’s financial effects and thousands are admitted to hospitals every day due to COVID-19, there is increased pressure on Congress to address the issue. President-elect Biden has talked about the need to protect patients from hospital bills incurred when the patient doesn’t have control over which provider he or she sees (ie, emergency transport and surgery), but has not addressed the issue of payment disputes.

 health costs over the past decade has been the rising cost of prescription drugs. There is bipartisan support in Congress for measures aimed at lowering drug prices, but so far efforts have stalled amid opposition from the pharmaceutical and insurance industries. There are numerous approaches to addressing the issue and dozens of lawmakers on both sides of the aisle who view it as a top priority.

Notably, Medicare is still barred from negotiating prescription drug prices directly with drug companies even though the drugs account for nearly 20% of Medicare’s overall spending each year. Instead, pharmacy benefit managers are in charge of acquiring drugs for the Part D prescription drug benefit. The President-elect has promised to work with Congress to eliminate the exception so that Medicare can negotiate drug prices directly with pharmaceutical companies the same way private insurers do—a reform that could save Medicare, according to some estimates, 

President-elect Biden supports limiting launch prices for drugs that don’t face competition by establishing an independent review board to assess a drug’s value based on the average price in other countries, also called “external reference pricing.” He also supports limiting drug price increases to inflation, capping out-of-pocket drug costs for Medicare Part D, allowing drug importation from other countries, and eliminating drug companies’ advertising tax breaks, which equaled $6 billion in 2016.

The transition from Medicare fee-for-service to value-based care has received strong bipartisan support. Payment models under which physicians are reimbursed based on the value, rather than the volume, of their services allow providers to deliver better-quality, lower-cost care. Although COVID-19 has slowed the progress that has been made toward implementing alternative reimbursement models, it has also exposed some of the 

Over the coming years, the federal government will need to find methods for cutting costs after spending trillions on the COVID-19 response. The continued adoption of value-based care will help achieve that goal as providers agree to take on more financial risk in order to preserve resources and avoid payment cuts.

Although the President-elect has not commented directly on value-based care, his health plan includes several proposals aimed at closing gaps in health care among racial groups. Alternative payment models could help close racial disparities and gaps in health care by paying providers for taking an active role in addressing disparities that exist between patients based on their race, ethnicity, gender, or sexual orientation. The individuals tapped to fill top posts at HHS and CMS may provide a clue as to how aggressive the incoming administration will be in advancing new payment models.

In the immediate term, the Biden administration will take executive action to roll back some of the more controversial health care regulations implemented under President Trump. Assuming Congress does not come to an agreement during the current lame-duck session, 1 of the first orders of business is likely to be enacting a new COVID-19 relief package, which will include a variety of provisions that impact providers and patients.

There is also strong support in Congress for addressing health care price transparency and further expanding access to telehealth, items President-Elect Biden would certainly support. As for the portions of Biden’s health care agenda that are more controversial, such as increasing ACA premium subsidies for the middle-class and lowering the age for Medicare eligibility, legislative success may hinge on the long-shot possibilities of Democrats winning both Georgia runoff elections or a newfound willingness on the part of Democratic and Republican leadership to find compromise, perhaps by trading increased health care spending for cuts in other areas.

"Although the President-elect has not commented directly on value-based care, his health plan includes several proposals aimed at closing gaps in health care among racial groups," writes Yehuda A. Sugarman of the American Association of Clinical Urologists.

Biden signals focus on common-ground health policies

The US House and Senate are far from reaching consensus on a fourth coronavirus relief package, but the passage of the Health and Economic Recovery Omnibus Emergency Solutions Act (

), or HEROES Act, in the US House of Representatives on May 15, 2020, may provide some clues as to what physicians can expect, or perhaps hope for, in a final package. The $3 trillion supplemental spending package covers many sectors of the economy, including much-needed assistance to state and local governments. Similar to previous relief packages, it also includes considerable investment in the US health care system and coronavirus disease 2019 (COVID-19) response efforts.

$100 billion appropriation for Provider Relief Fund

The provision of the HEROES Act with the most direct impact on health care providers is an appropriation of $100 billion, on top of the $175 billion that has already been appropriated, for the Provider Relief Fund. The fund, initially established under the Coronavirus Aid, Relief, and Economic Security (CARES) Actpassed in April, has provided 2 rounds of payments to hospitals and providers for COVID-19–related expenses and lost revenue.

In addition, the bill provides new guidance clarifying how funds from the program should be allocated to recipients. Following the first distribution of provider relief funds on April 10, there was considerable confusion and criticism surrounding the formula used to determine how much each provider received. Thus, regulators codified a new algorithm into the HEROES Act that will provide the Department of Health & Human Services with a more equitable and efficient system for distributing relief funds to providers.

Under the new guidance, providers would be required to apply for grants, on a quarterly basis, for all expenses and lost revenue relating to COVID-19 via a new program established at the Health Resources and Services Administration. Eligible expenses would be reimbursed at 100% whereas lost revenue would be reimbursed at 60%, with the latter being dependent on the availability of funds. The program does not require providers to pay back the funds they receive, with the caveat that they may not submit bill balances (surprise billing) to their uninsured patients.

The HEROES Act makes key improvements to the Medicare Accelerated and Advance Payment (AAP) Programs, which have provided necessary liquidity for many Medicare providers and suppliers impacted by the pandemic. According to 

 released by the Centers for Medicare & Medicaid Services (CMS) in early May, about $19.6 million in loans were allocated for urologists as part of AAP. (The $100 billion in total AAP loans provided by CMS is separate from and in addition to the $100 billion in grants distributed to providers as part of the CARES Act, which do not need to be repaid.)

If HEROES is enacted, the terms of those loans would be considerably more favorable for the entities receiving payments. The bill would lower the interest rate on loans from above 10% to 1%, extend the repayment period (1 year before claims are offset and 2 years to repay the full outstanding balance), and reduce the per-claim recoupment rate to no more than 25% of Medicare reimbursement claims. It also would ensure that Part B premiums are not adversely impacted by this program.

A less publicized, but important, measure in the act would postpone implementation of the 

Medicaid Fiscal Accountability Regulation

 (MFAR) until after the end of the COVID-19 emergency. The controversial MFAR rule, proposed in November 2019, tightens regulations surrounding state-based Medicaid supplemental payment programs, which could lead to significant Medicaid cuts.

States and provider groups have opposed MFAR, arguing that it undermines existing financing and supplemental payment arrangements, will increase state budget deficits, and jeopardizes access to care for Medicaid patients, particularly in underserved areas. Postponing MFAR would help preserve Medicaid programs and prevent additional regulatory burdens at a time when many physician practices are struggling to meet the needs of their patients and staff.

As physician practices begin to reopen for nonurgent procedures and surgeries, providers will be at an increased risk of contracting the novel coronavirus. HEROES seeks to address this by requiring the Occupational Safety and Health Administration (OSHA) to issue emergency temporary standards for certain at-risk industries, including employees in the health care sector who are at “occupational risk of exposure” to COVID-19. Within 2 years, OSHA would be required to develop a permanent infectious disease standard.

In the interim, the temporary standards would require covered employers to protect workers from exposure to COVID-19 by developing and implementing an infectious disease control plan that is at least as protective as the measures issued by any OSHA state plan to protect workers from novel pathogens. HEROES also contains whistleblower protections for workers who report health and safety hazards, including a lack of personal protective equipment, in the workplace.

Various health care organizations and medical groups including the American Medical Association, the American Hospital Association, the Association of American Medical Colleges, and the American College of Physicians have endorsed the HEROES Act in whole or in part.

Although the Senate is not expected to take up the House-passed act for consideration, they will likely consider some additional form of relief. The provider community should stay engaged in the process and advocate for the inclusion of the measures discussed in this article in whatever legislative package emerges from the Senate.

"The HEROES Act makes key improvements to the Medicare Accelerated and Advance Payment Programs," writes Yehuda A. Sugarman of the AACU.

Yehuda A. Sugarman

Articles

Congress poised to extend moratorium on Medicare sequester cuts

Three health care trends for urologists to follow in 2021

Biden signals focus on common-ground health policies

House-passed HEROES Act promises relief for physicians