Contracting News & Notes

Recent headlines and trends to keep an eye on

Piedmont Atlanta Hospital opened tower four months early for coronavirus

Piedmont Atlanta Hospital’s Marcus Tower is opening four months early, on April 13, to help treat the surge of coronavirus patients expected this month. The early opening will add three ICU and acute nursing units to Atlanta’s capacity. It will add 132 beds, with 64 designated as critically needed ICU beds. The 16-story tower was set to open on Aug. 1 but accelerated its work schedule and deliveries of equipment to make it possible to open early.

Hospitals receive $30B in CARES Act by direct deposit

CMS has announced the release of $30 billion of the $100 billion earmarked for hospitals in the CARES Act. The money is separate from the $34 billion in advance payment loans to providers announced last week. CMS later increased the amount in the Accelerated and Advance Payment Program (AAPP) to $51 billion. The CARES Act funds began being distributed via direct deposit on April 10. All facilities and providers that received Medicare fee-for-service reimbursements in 2019 are eligible for the distribution.

HHS awards close to $165M to rural hospitals, telehealth centers

HHS, through the Health Resources and Services Administration, is awarding rural hospitals the telehealth resource centers nearly $165 million to combat COVID-19. Funds will go to 1,779 small rural hospitals and 14 HRSA-funded telehealth resource centers. The funds target smaller, rural hospitals and is separate from the CARES Act. Approximately $30 billion in the CARES Act was recently distributed to hospitals nationwide.

AHA says hospitals stand to lose $200B by end of June

The American Hospital Association (AHA) has released a report stating that America’s hospitals and health systems stand to lose $202.6 billion by the end of June, during the four-month period of the coronavirus outbreak in the U.S. The report attempts to quantify the effects of the outbreak over the short-term, including:

  • The effect of COVID-19 hospitalizations on hospital costs
  • The effect of cancelled and forgone services, caused by COVID-19, on hospital revenue
  • The additional costs associated with purchasing needed PPE
  • The costs of the additional support some hospitals are providing to their workers.

Groups representing America’s hospitals, health systems seek liability protection

Multiple organizations representing America’s hospitals and health systems wrote Congress this week asking for facilities and providers responding in good faith to be shielded from unwarranted liability during the pandemic. Not every state has acted on executive orders or enacted legislation to support their healthcare facilities and professionals, so these organizations are asking for a federal legislative approach to ensure a consistent level of protection is available for every facility and provider. The organizations representing these hospitals and health systems include:

  • America’s Essential Hospitals
  • American Hospital Association
  • Association of American Medical Colleges
  • Catholic Health Association of the United States
  • Children’s Hospital Association
  • Federation of American Hospitals
  • National Association for Behavioral Healthcare
  • Premier Healthcare Alliance
  • Vizient, Inc.

Premier, America’s Physician Groups recommend APMs for CMS

Premier Inc. (Charlotte, NC) and America’s Physician Groups have recommended ways CMS can provide alternative payment models (APMs) for financial stability during the COVID-19 pandemic and also preserve the future of the models. The groups urged CMS Administrator Seema Verma to:

  • Allow organizations in APMs to move to no downside financial risk with modified upside risk, recognizing that losing the opportunity to achieve full shared savings would only compound the financial hardships they are experiencing due to COVID-19
  • Implement extreme and uncontrollable circumstances models across all CMS Innovation Center models, allowing model participants to maintain their current status
  • Provide an opportunity for entities to enter the Medicare Shared Savings Program and Direct Contracting for a Jan. 1, 2021, start date
  • Accelerate pending payments to healthcare providers
  • Clarify quality mitigation approaches and expand these to other models
  • Allow all ACOs 90 days to determine if they want to drop out of the program without penalty

Coronavirus diagnoses dropped by half for Boston Hospital staff after mask requirement

After Brigham and Women’s Hospital (Boston, MA) began requiring that nearly everyone in the hospital wear masks, new coronavirus infections diagnosed in its staffers dropped by half or more. The hospital mandated masks for all healthcare staffers on March 25 and extended the requirement to patients on April 6.

FAIR Health: Impact of COVID-19 on hospitals, health systems

FAIR Health, a national, independent nonprofit organization, has shared findings on COVID-19 in its health brief, Illuminating the Impact of COVID-19 on Hospitals and Health Systems: A Comparative Study of Revenue and Utilization. Findings include:

  • In general, there was an association between larger hospital size and greater impact from COVID-19. Nationally, in large facilities (over 250 beds), average per-facility revenues based on estimated in-network amounts declined from $4.5 million in the first quarter of 2019 to $4.2 million in the first quarter of 2020. The gap was less pronounced in mid-size facilities (101 to 250 beds) and not evident in small facilities (100 beds or fewer).
  • March was the month when COVID-19 had its greatest impact in the first quarter of 2020. Nationally, in that month, in mid-size facilities, the decrease in average per-facility revenues based on estimates in-network amounts in 2020 from 2019 was 4%; in large facilities, 5%.
  • Facilities in the Northeast experienced a greater impact from COVID-19 than those in the nation as a whole. For example, in the Northeast, the decline in average per-facility revenues based on estimated in-network amounts in March 2020 from March 2019 was 5% for mid-size facilities, 9% for large ones.

CMS offers some financial shelter to Medicare ACOs

After nearly three-fifths of Medicare ACOs indicated they would drop out without more help pertaining to COVID-19, CMS offered some financial shelter. An interim rule on April 30 requirements during the public health emergency for participants in the Medicare Shared Savings Program (MSSP), in which 517 organizations treat more than 11 million beneficiaries. These changes may affect the 160 ACOs
that have agreements ending Dec. 31. They include:

  • Removing spending associated with COVID-19 patients from ACO performance calculations
  • Allowing ACOs with agreements that expire Dec. 31, 2020, to extend their agreement period by one year
  • Giving ACOs in the MSSP’s BASIC track the option to maintain their current level of participation for 2021
  • Adjusting program calculations to mitigate the impact of COVID-19 on ACOs
  • Expanding the definition of primary care services – used to determine beneficiary assignment – to include telehealth codes

An April survey by the National Association of ACOs (NAACOS) found 56% were at least somewhat likely to leave the program if CMS did not take additional steps to in