Healthcare Shoppers Led by Insurers’ Hands

Centers for Medicare and Medicaid Services (CMS) officials say the hospital transparency rule released by the agency on November 15, 2019 is all about “putting the patient first.”  This is the same goal held by hospitals.  However, there is little in this directive that will clarify price information and a lot that will further confuse patients.  Arming patients with price information about procedures and services charged at various hospitals is a lofty ideal, but the reality is this rule will not achieve that. Patients remain essentially powerless to effectively shop and compare prices because they are beholden, for the most part, to accessing care from their insurers’ in-network providers.  At any hospital, customers of each healthcare insurer pay different rates, including members of different plans from the same insurer.  If there is a bargain on appendectomies at hospital A, but your insurance plan does not include that hospital in its network then your price comparison shopping doesn’t mean much to you.

CMS’ asserts that this rule will foster higher-value healthcare by promoting competition and choice because it requires hospitals to make public privately negotiated payer-specific price information for all items and services in multiple formats.  In our market driven economy, this approach is riddled with legal implications and goes well beyond the level of regulation necessary to promote the stated government interest of “putting the patient first.”  Disclosure of prices negotiated with individual health plans would unduly burden hospitals’ ability to enter into competitive contracts, resulting in less choice and even higher prices for consumers.

Is Healthcare Shoppable?

Specifically, hospitals must post a list of five types of standard charges – now defined by CMS as gross charges, payer-specific negotiated rates, the de-identified minimum and maximum negotiated rates, and discounted cash price – for all items and services in a machine-readable format on their websites.  Hospitals must also post the negotiated rates, minimum and maximum negotiated rates, and discounted cash prices for 300 “shoppable” services in a consumer-friendly, searchable way.  CMS will select 70 of these services and 230 will be chosen by the hospital.

In September 2019, the Suburban Hospital Alliance supported the comments that our state and national hospital associations forwarded to CMS when the rule was in its proposed state.  We argued that the rule was more extensive than needed to advance CMS’ interest of putting consumers first.  CMS’ own research indicates that consumers are more interested in their out-of-pocket costs and not the prices agreed upon between payer and provider.  Hospital leaders hold fast to the fact that the best way for consumers to get information about real-time out-of-pocket costs, charges and in-network status is from their health plans.  Any other mechanism will introduce widespread confusion.

Legal Concerns

Further, such disclosure infringes upon intellectual property rights recognized by Congress and individual states. This rule also stymies competition and restrains efforts to widely adopt and implement value-based care contracts.  The disclosure of hospitals’ private insurance contract rates upends the market-based process, wherein hospitals secure competitive and reasonable rates for services.  Making this private contract information public will compromise market dynamics.  It also raises serious anti-trust concerns.  The Federal Trade Commission holds that price transparency be limited to “predicted out-of-pocket expenses, co-pays and quality and performance comparisons of plans and providers.”  This is the price information patients truly seek.

The rule goes into effect January 1, 2021.  Hospitals that do not comply will be fined $300 per day, or $109,500 per year, says CMS.  The hospital field has vowed to file a legal challenge to this rule on the grounds that it exceeds the Administration’s authority.

Hospitals want consumers to have all the information they need to make informed healthcare decisions.  That begins with timely, accurate insurer estimates of patients’ out-of-pocket costs, including estimates from the insurer that account for complexities that may arise during the course of treatment and/or procedure.

New Insurer Rules

CMS also issued a proposed rule on November 15th that would impose new requirements on private insurers in the individual and group markets to publicly disclose negotiated rates and real-time, personalized access to cost-sharing information.   Comments on this proposed rule are due January 15, 2020.

Learn more about healthcare policy, legislation and regulation at:

All Cost of Care Is Not Equal

The hospital field and the Centers for Medicare and Medicaid Services (CMS) do not see eye-to-eye when it comes to fair reimbursement for basic clinic visits, known in medical terminology as evaluation and management services, when these specific services are provided by a hospital-owned outpatient department located off the hospital’s main campus.  These off-campus clinics are key sources of primary care and other physician services throughout Long Island and the Hudson Valley, as well as the state and the nation.  What makes them unique is that patients served by these clinics are generally of lower income and present with more medically-complex conditions, leading to a higher cost of care than would be experienced by a private physician practice in a local community.

Yet, CMS instituted in a 2018 rule that payment to all outpatient hospital clinics should be reduced by 60 percent to match the rate paid to private physician practices.  This ignores the disparity in cost of care in favor of what is familiarly known as “site neutral” payment.  It also ignores the more stringent regulations and oversight hospitals face as opposed to physician offices, and likewise, the costs associated with compliance.

The issue stems back to 2015 when Congress included specific language in the Bipartisan Budget Act of 2015 to exempt from the “site neutral” cut those hospital-owned clinics that were in operation before November 2, 2015.  The 2018 rule essentially ignores Congress’ intent of the statute, and it is on these grounds that the hospital industry takes issue.  In December of 2018, the American Hospital Association filed suit against CMS stating that the rule is executive overreach and contradicts Congress’ original intent.  The suit also challenged Medicare’s own budget neutrality law that requires any reductions in reimbursement to be offset by reinvestment elsewhere in the program.

A federal judge agreed with the hospital industry’s argument and in mid-September ruled that CMS overreached its authority to implement site neutral cuts for basic clinic visits to all hospital-owned outpatient departments.  The U.S. District judge further tasked CMS to develop remedies and required all parties to the lawsuit to submit a joint status report by October 1, 2019. CMS asked a federal judge to reconsider the September 17, 2019 decision, but that was rejected by a federal judge on October 21, 2019. The judge also denied CMS’ request for a stay to consider whether to appeal the order. CMS is likely to appeal the court’s most recent decision.

Lost in all of this legal wrangling is the patient – more specifically, the patient of lower economic means who suffers from a variety of medical conditions and benefits from the comprehensive services a hospital-based outpatient clinic offers.  Hospitals are there to service these patients regardless of their ability to pay.

Fortunately, an overwhelming number of House and Senate members oppose these site neutral cuts because they realize that such steep reimbursement reductions affect hospitals’ overall financial viability.  In that respect, all patients, all constituents in a community are adversely affected.



Battling Opioid Addiction and Mental Health Issues

Favorable Court Rulings, Regulatory Reforms, New Legislation Offer Hope for Patients and Providers

The $572 million that an Oklahoma judge ordered Johnson and Johnson to pay to the state of Oklahoma for the company’s role in the opioid crisis is the first court ruling among hundreds more to be handed down by state and local courts throughout the country.  Such sizable awards earmarked for prevention and treatment will help health providers and public health officials arrest this soaring epidemic.  And while state and county officials battle the issue out in court, including New York’s own attorney general, regulators and lawmakers grapple with the complex web of rules and regulations that govern the provision of substance use and mental health treatment.  With the majority of substance abusers also suffering from a mental health disorder, it’s critically important these two behavioral health issues are addressed in tandem.

In our state, the Office of Alcoholism and Substance Abuse Services (OASAS)  oversees addiction and chemical dependency treatment, and the Office of Mental Health (OMH) oversees treatment related to emotional and psychiatric disorders.  The two offices have historically operated in silos making it difficult for providers, especially hospitals, to care for patients with a dual diagnosis.  That has led to frustrated patients, family members, and even treatment providers.

The Suburban Hospital Alliance of New York State places behavioral health reform, including regulatory changes, enhanced reimbursement, and workforce needs, at the top of its advocacy agenda each year.  Successful treatment for a substance abuse and/or mental health issue is heavily dependent upon the right services being offered in the right setting at the right time.  This requires coordination among various health and social services providers, insurers, and regulatory agencies.

Rules and Regs

Different programs require different levels and types of certifications from the respective oversight agencies and insurers often impose even more rules and regulations upon patients and providers.  However, there has been some relief in the area of insurance denials.  Providers across the state voiced concerns about the rising number of claims denials for behavioral health services.  The state reviewed claims for a handful of services from December 2017 – May 2018 and found high rates of inappropriate denials among the services.  Psychiatric emergency room visits were one of the services with the highest rate of denials. The state is now holding managed care organizations – insurers – accountable for inappropriately denied claims and requiring the organizations to reach a payment agreement with providers.

Prior authorization for certain types of treatment is another roadblock in the management of behavioral health.   Medication Assisted Treatment (MAT)  is an evidence-based and proven approach to treating opioid addiction.  It combines counseling and behavioral therapies with approved medications.  Yet, until this most recent New York State legislative session, commercial insurers and Medicaid managed care plans could require prior authorization for coverage of these highly successful medications.  We are hopeful the governor will sign the legislation.

Buprenorphine is one of the more successful MATs.  It treats opioid addiction by reducing cravings and blocking painful withdrawal symptoms.  Yet, federal prescribing restrictions on the drug limit who can prescribe and how much they can prescribe.   This is often seen as a barrier to care.  Physicians must complete 8 hours of training and complete a waiver in order to prescribe buprenorphine and can only treat up to 100 patients a year.  Another waiver is needed to exceed this cap.  However, the Support Act (2018) extends the privilege of prescribing buprenorphine in office-based settings to clinical nurse specialists, certified registered nurse anesthetists, and certified nurse midwives until October 1, 2023.  The behavioral health field continues to experience workforce shortages, especially among psychiatrists, and legislation like this will increase access to MAT.  But longer term solutions are needed.  The Opioid Workforce Act of 2019 is one.  It would incentivize the training of physicians who specialize in treating substance abuse disorders and pain management by supporting additional residency slots.

Tragic Toll

According to the Centers for Disease Control and Prevention, on average, 130 Americans die every day from opioid overdose.  New York State’s 2018 Opioid Annual Report shows that, among New York State residents, the number of overdose deaths involving any opioid increased from 1,074 in 2010 to 3,009 in 2016. The age-adjusted rate of deaths involving all opioids in New York State approximately tripled between 2010 and 2016, from 5.4 to 15.1 deaths per 100,000 population.  The state’s quarterly reports on the opioid crisis provide county-level data.  The most recent report was published April 2019.

Promising Alternative

In Suffolk County on Long Island and in Dutchess County in the Hudson Valley, an innovative treatment model in the form of a triage-type, free-standing facility is showing promise for those suffering from any range of behavioral health issues. Suffolk County’s  Diagnostic and Stabilization Hub (DASH) and Dutchess County’s Stabilization Center are open 24/7 and both offer mobile crisis intervention.  They are an alternative to the hospital emergency room, which is often not the best place of care for someone suffering from a mental illness and/or substance use disorder.  Preliminary data show a dip in behavioral-based emergency room visits since the facilities opened.   The new models of care are embraced by area hospitals because they are so highly specialized and focused on mental health care, and they are easing the strain on overcrowded emergency rooms.  In fact, the MidHudson Regional Hospital of Westchester Medical Center is one of the Dutchess County center’s partners.

Cost to Society

The emotional toll of behavioral health issues on patients, families, and society is incalculable.   However, the financial impact in terms of lost productivity, healthcare costs, and missed opportunity is measurable.  The Fiscal Policy Institute recently released a report that specifically looked at the economic impact of the opioid crisis on Long Island, one of the regions hardest hit by the epidemic.  It found that the opioid crisis caused Long Island $8.2 billion in economic damage in 2017 – 4.5 percent of Long Island’s gross domestic product.  Such a report underscores the fact that mental illness and addiction touches everyone, and we are all responsible in some way for solving this public health crisis.

That is the crux of the 2,000 plus lawsuits advanced by states and local counties who believe drug manufacturers, retailers, and distributors have put profits over people and ignited the opioid epidemic.  While Johnson and Johnson said it will appeal the Oklahoma court ruling and any payout could take years, Purdue Pharma, owned by the Sackler family, was denied the family’s request to dismiss New York State’s lawsuit against the pharmaceutical giant.  The ruling was issued by a state judge at Supreme Court in Suffolk County, Long Island.  Meanwhile Purdue Pharma is in talks with the United States Department of Justice to reach a settlement regarding civil and criminal accusations against the company’s role in the opioid epidemic. The deal is complicated by Purdue Pharma’s many local lawsuits with states and counties.

Treatment of mental illness and substance use disorders is difficult enough without the interference of many of the barriers outlined in this blog.  We are, however, making progress.  Hospitals are pushing on all fronts to ensure that those affected by any behavioral health issue get the right care in the right place and at the right time, despite the complexities of our healthcare and legal systems.







Laws Keeping Pedestrians Safe from Injury/Death Mostly Unknown

$3,000 video scholarship contest and outreach campaign aims to teach everyone the rules of the road

Hospitals focus a good deal of their efforts on prevention with the idea that catching disease before it worsens and taking steps to avoid injury is better for the patient’s quality of life and  long term health.  It’s a practical approach to good medical care that wisely uses healthcare resources, thereby driving efficiencies in overall healthcare spending.  This is no more apparent than in the hundreds of pedestrian injuries due to motor vehicle crashes that occur each year in New York State.  And regrettably, many of those injuries result in unnecessary deaths.

According to an Institute for Traffic Safety Management Fact Sheet, 252 pedestrians were killed in 2017 in motor vehicle crashes in New York State and another 15,581 were injured. As a pedestrian, you are most likely to get hit while crossing the street. In fact, more than half (62%) of urban crashes involving pedestrians occurred during crossing, according to the New York State Pedestrian Safety Traffic Plan prepared by the New York State Departments of Transportation and Health and the Governor’s Traffic Safety Committee.

Suburbia’s Poor Driving Habits

Some suburban communities have a particularly poor driving record and are among the worst in the state.  According to an Institute for Traffic Safety report, a total of 2,521 pedestrians were killed or injured in the two counties on Long Island (Nassau and Suffolk) and four Hudson Valley region counties (Westchester, Rockland, Orange, and Dutchess) in 2016.   When New York State communities were ranked by the number of pedestrian crashes that occurred between 2009 and 2013, the community of Hempstead on Long Island had the highest number of crashes of all communities in upstate New York and Long Island.

Research confirms that drivers are at fault for 60 percent of pedestrian-related crashes. Our state has dozens of laws in place to protect pedestrians and motorists.  However, these are mostly unknown by the average citizen.  Do you know these rules of the road?

  • Pedestrians have the right of way in all crosswalks and at intersections with marked or unmarked crosswalks.
  • Motorists have the right of way at all locations other than intersections and marked crosswalks.
  • If you choose not to use a crosswalk, you relinquish your right of way and must yield to vehicles.
  • Jaywalking, or crossing an intersection diagonally is also considered illegal and could land you with a ticket and hefty fine.
  • Trying to hail a cab or find your Uber? As a pedestrian, the law prohibits you from standing in the road for almost any reason including trying to catch a ride or guarding a parking spot.

Additional information can be found on New York State’s pedestrian safety website.

Better to “See and Be Seen”

New York State’s “See and Be Seen” public education campaign is an effort to teach citizens about the rules of the road.  The New York Coalition for Transportation Safety in conjunction with other traffic safety advocate organizations and the Long Island Health Collaborative is aggressively promoting traffic safety laws.  Through its Walk Safe Long Island campaign, these groups are in local schools, libraries, senior centers, and all sorts of community gathering places teaching walkers, bikers, and drivers how to be safe on the roads.

$3,000 Video Scholarship Contest

Children, teens, and young adults are especially vulnerable. Pedestrians between the ages of 10 and 29 are most likely to be involved in a pedestrian-related crash.  That’s why Walk Safe Long Island is holding a video scholarship contest for high school juniors and seniors and college freshmen and sophomores.  The rules are simple.  Create a short video that illustrates one or more of the Vehicle and Traffic Laws for Pedestrian Enforcement.  The intent of the competition is to encourage more widespread understanding about various pedestrian/traffic safety laws.  For more information about the contest rules, pedestrian and vehicle laws, and how to submit a video go to The deadline is August 31, 2019.

It’s not enough to simply follow the rules of the road. Pedestrians must pay attention to their environment to fully ensure their safety. The ITSMR data referenced above indicates that 31 percent of crashes that result in a pedestrian injury or fatality occur when a pedestrian is crossing with the traffic signal. That’s why it’s important to “see and be seen”. Be sure to pay attention while walking and especially while crossing the street. This means avoid texting and crossing at all costs since pedestrian errors or confusion is responsible for almost 31% of crashes involving injury or death. Make eye contact with drivers at the intersection so that you can ensure they see you and look before crossing even if you have the right of way.

Remember, stay safe by learning the rules of the road and “See and Be Seen!”


Wrestling Chronic Disease

One man’s story of success and improved health

CDC banner

The cost of chronic disease to the U.S. healthcare system is staggering.  The Centers for Disease Control and Prevention (CDC) reports that 90 percent of the nation’s $3.3 trillion in annual healthcare expenditures are for people with chronic and mental health conditions.  And the fact is that most chronic conditions are preventable.  Numerous medical-based scientific studies conclude that proper nutrition and physical activity, even simple modifications in these behaviors, can prevent the onset of chronic disease and/or mitigate symptoms and complications of those who suffer from chronic disease.

The Long Island Health Collaborative (LIHC), a voluntary coalition of Long Island’s hospitals, academic institutions, community-based organizations, health plans, libraries, municipalities, and businesses working to reduce the incidence of chronic disease, recently met a young man with a loving family and a lot to live for, and we decided to tell his story as proof that lifestyle changes do work.

Chris Garner was overweight and taking a fistful of prescription medications every day. He had both high blood pressure and pre-diabetes, but he decided to become proactive about his health. He enrolled in a chronic disease self-management program through his local health department. There he learned how to incorporate and sustain lifestyle changes – how healthier eating and exercise could change his life in both the long and short term.

The Stats about Chronic Diseases from the CDC

Across America, six in ten adults live with at least one chronic disease.   A chronic disease is a condition that lasts one year or more, and requires ongoing medical attention, or limits activities of daily living. Or both.

The leading causes of death and disability in the United States, chronic diseases are conditions like cancer, heart disease, asthma, stroke and diabetes. Four in ten adults live with multiple chronic conditions.

Most chronic diseases are caused by a short list of risk behaviors, including lack of physical activity and poor nutrition. But by making healthy choices, you can reduce your likelihood of getting a chronic disease and improve your quality of life.

What changed for Chris?

Chris Garner was one of those Americans with multiple chronic diseases. When he decided to make a change, he chose changes he could stick with. With the help of the chronic disease management program, he learned how to read food labels, began cooking more and eating out less, and he started going for daily walks. With these simple changes, Chris lost weight and started to feel better. Most importantly, he reduced his reliance on medication. Today, he feels better and his health has dramatically improved.

Get help with your first small change

The truth is that most chronic diseases can be prevented through simple lifestyle changes like the ones Chris made. The Long Island Health Collaborative’s Live Better campaign wants to help you do just that – Live Better.  On Long Island, there are a number of resources to help you and your family make those healthy choices.  The LIHC lists these resources on its site and even provides searchable databases to help you find a chronic disease self-management program that will work for you.

Self-management programs are offered by many hospitals, health departments, and community-based organizations. These programs are taught by healthcare professionals, and they focus on building and maintaining healthy habits. Habits like quitting smoking, eating a healthy diet, getting more exercise, and receiving recommended health screenings, are all easy ways to improve your health.

By learning the skills to hard-wire these healthy habits, participants often see a reduction in their symptoms and enjoy improved health.

Choose to Live Better.


High Drug Prices Stoke Congress’ Ire

Stack of bills and reform measures under consideration

Democrats and Republicans in Congress have found common ground when it comes to the issue of exorbitant prescription drug prices.  Both agree some measure of market-based reform is needed to alleviate the burden on individual patients and on hospitals from rising drug prices, shortages of critical medications, and the pharmaceutical industry’s anti-competitive practices.

In the current 116th Congress, a total of 134 bills related to prescription drugs have been introduced.  Three have passed the House and moved to the Senate.  Only one bill, Medicaid Services Investment and Accountability Act of 2019, has made it to the president’s desk.  The legislation, which deals with a very narrow subset of prescription drug reform – misclassification of drugs with respect to Medicaid rebate agreements for covered outpatient drugs – was signed into law.

A Reuters 2016 analysis of drug prices found that four of the nation’s top 10 drugs increased more than 100 percent since 2011.  And the prices just keep going up.

A good example is the cost of insulin.  It has roughly doubled in price between 2012 and 2016 but has rarely changed its composition since it was discovered in Canada in 1922.  But in the 1970s, recombinant DNA technology enabled mass production.  Such tweaks lead to the extension of patents and market control, which leads to anti-competitive practices.

Hospitals purchase pharmaceuticals en masse and are equally affected by anti-competitive practices, the pharmaceutical industry’s lack of transparency, and the forces of patient supply and demand. Not to mention that hospitals are also employers – the largest in most communities – and also pay for employee health benefits.  Employer health insurance costs are affected by rising prescription drug prices, resulting in higher premiums, co-pays, and out-of-pockets costs for employees.

According to a 2019 hospital industry study, average total drug spending per hospital admission increased 18.5 percent between 2015 and 2017.  The study also reported that sharp rises in drug costs force hospitals to make tough decisions about resource allocations, such as investment in new technologies, building upgrades and modernization, and even employee compensation.

Earlier this year, the Senate Finance Committee held a series of bi-partisan hearings on drug prices in America.  Representatives from health plans and executives from some of the nation’s most prominent pharmacy benefit manager (PBM) companies testified.  PBMs and their role in the drug supply chain drew lots of scrutiny from the senators.  PBMs are the middle men of sorts who negotiate with drug manufacturers and health insurers to get drugs listed on a health plan’s formulary and to establish the drug’s price.  Manufacturers offer PBMs a discount, or rebate, off the list price in order to get listed on a plan’s formulary.  However, the price savings that the PBMs achieve are not always shared with the end consumer, because PBMs keep part or all of the rebate.  This is one of the non-transparent practices that Congress seeks to clarify.  There are essentially no regulations preventing manufacturers from setting or raising prices, and there are no regulations that prevent PBMs from keeping all or part of the rebate.

The dozens of bills circulating in the halls of Congress seek the same goal – to lower the cost of prescription drugs for Americans.  A March 2019 Kaiser Poll found that nearly one in four Americans taking prescription drugs say it is difficult to afford their medications.  Respondents favor a variety of measures to rein in high drug prices, including more government regulation, such as allowing Medicare to negotiate directly with pharmaceutical manufacturers.  The Medicare Modernization Act of 2003  prohibits this direct negotiation.

Other proposed legislation looks at legalizing the importation of drugs from Canada, reforming regulations that currently enable manufacturers to game the system and delay entrance of generic drugs into the market, and a requirement that drug manufacturers disclose information related to planned price increases.

Next month, a Trump administration policy requiring drug manufacturers to list prices in television commercials takes effect.  The rule applies to drugs that are covered by Medicare and Medicaid.  However, three of the nation’s major pharmaceutical manufacturers filed suit to block the rule.  Drug makers caution that the advertised price would give viewers the false impression that they have to pay the full list price.  This brings us back to the lack of transparency issue.

It is fair to conclude that Congress will take some action this year to lower prescription drug costs for consumers and to reform anti-competitive and non-transparent practices that pervade the U.S. pharmaceutical industry.  We will have to wait and see just how far legislators are willing to push the industry.



Long Island Health Collaborative Faces Funding Loss

As a regional Population Health Improvement Program (PHIP) this collaborative is saving the region millions in healthcare costs, streamlining efficiencies, and improving health outcomes

The governor’s proposed 2019 – 2020 state budget calls for elimination of the statewide Population Health Improvement Program (PHIP). With this action, the state may be missing an opportunity to further its investment to improve the health of the state’s 19.85 million residents and, more regionally, the 2.8 million residents of Long Island.  The PHIP for Long Island is the Long Island Health Collaborative, and it is overseen by the Nassau-Suffolk Hospital Council (NSHC).  The Hospital Council is one of the regional hospital associations that comprise the Suburban Hospital Alliance of New York State.

In just four years, the statewide regional PHIP contractors helped reduce healthcare costs, improved access for vulnerable populations, eliminated disparities, and helped the state move into the top 10 rankings of healthiest states in the nation.  Those achievements are the crux of population health – an approach to healthcare that combines clinical and social determinants of health to manage populations who present with similar health concerns, such as uncontrolled diabetes or even a cohort of seniors from a specific geographic region.  Such a group often presents with complex health conditions.  The social determinants of health are factors outside of clinical control – employment, housing, and transportation – that affect a person’s ability to get and stay well.

The state’s investment in population health began in 2014 when the governor proposed in his State of the State address establishing regional collaboratives, which reflected the recommendations of the Public Health and Health Planning Council.  The legislature adapted the proposal and included initial funding for the Population Health Improvement Program in that year’s budget.

The Long Island Health Collaborative embodies the state’s call to work collaboratively in solving community health issues. Through the relationships it has developed in just the past three and a half years, the LIHC brings together community-based organizations, academic institutions, health plans, public libraries, local municipalities, media partners, Long Island’s 22 hospitals, and the two county health departments – well over 100 organizations and counting.

This PHIP consistently fills a room with diverse organizations who, through the Long Island Health Collaborative’s guidance, have been able to move the needle on tackling some of the region’s most stubborn health issues. Collectively, these organizations improved adult physical activity levels and the nutritional status of populations – both goals of the state’s Prevention Agenda.

In-depth reports, compiled by the LIHC, look at physical activity and nutritional habits of adult Long Islanders.   In a short time, this region’s PHIP has been able to demonstrate that Long Islanders are a bit more active than their state and national counterparts and consume more by the way of fruits.  Nutrition and physical activity are key lifestyle behaviors that affect chronic diseases.  Chronic disease conditions account for 90 percent of the nation’s $3.3 trillion in annual health care expenditures, as six in 10 adults suffer from at least one chronic condition, according to the Centers for Disease Control and Prevention.

The Long Island Health Collaborative has been able to rally dozens of organizations and health providers to raise awareness among a variety of populations about the positive effects of proper nutrition and exercise.  These collective efforts are saving the region millions in healthcare costs while improving individuals’ quality of life, work productivity, and civic engagement.

Most importantly, the Long Island Health Collaborative is leading the way in collecting and analyzing localized data about individuals’ and communities’ perception of health status, needs, barriers to care, and the social determinants of health. This data helps organizations make decisions about programming, interventions, and community investment.  The Collaborative is the only entity in this region collecting and analyzing this localized primary data.

Our PHIP further advances the region’s health goals by providing the local county health departments and hospitals with vital data for their Community Health Needs Assessments. These assessments are required by the state. This service alone is worth about $1.2 million in total savings to the region – money which becomes available for programming, etc. Finally, the Long Island Health Collaborative is playing an integral role in guiding small community-based organizations regarding the usefulness and need for localized data collection as they enter into value-based payment arrangements with health plans and providers. Our PHIP provides personalized reports, concentrated information, and focused analyses of both primary and secondary data sources.

Funding for our region’s PHIP is in jeopardy.  With the State Senate and Assembly working out details about the 2019 – 2020 state budget, the opportunity to commit to funding the PHIP program is imminent.  The annual cost to operate the PHIP on Long Island is $600,000.  This is a small investment when the savings in regional healthcare costs and efficient regional health planning are factored into the equation.

I thank those State Assembly members listed below who publicly committed to continued funding for the PHIP program.  I urge all members of the state legislature to do the same.  Otherwise, funding for this program will abruptly end on March 31, 2019.

Al Stripe, Anthony D’Urso, Barbara Lifton, Billy Jones, Carrie Woerner, Donna Lupardo, Harry Bronson, Jamie Romeo, John T. McDonald III, Karen McMahon, Kenneth Zebrowski, Jr., Kimberly Jeane-Pierre, Monica Wallace, Nader Sayegh, Pamela Hunter, Pat Burke, Patricia Fahy, Phil Steck, Richard Gottfried, Robin Schimminger, Sean Ryan, William Magnarelli, Andrew Raia, Angelo Morinello, Christopher Tague, Clifford Crouch, Dan Stec, David McDonough, Jacob Ashby, John Salka, and Mark Walczyk.



The Detail behind New York’s Proposed Single-Payer Plan

We need to take a step back and examine the details about the proposed single payer plan, the New York Health Act, which the New York State Assembly has pushed for many years and that has gained renewed interest since the mid-term elections.  The State Senate has never taken up the bill.  With all branches of state government under Democratic control in 2019, proponents of a single-payer health system see opportunity.   However, such an approach is less opportunity and more bureaucracy.

The New York Health Act, which passed the New York State Assembly  repeatedly, assumes unreasonable concessions and cooperation by the federal government, continued and deepening reduction of reimbursement rates to healthcare providers, disentanglement from various state laws and regulations, essentially the elimination of an entire industry – commercial insurers – and sharply increased taxes for both employers and employees.

This is why the Suburban Hospital Alliance has joined forces with the Realities of Single Payer, a coalition led by the New York Health Plan Association.  Members of the coalition, which include businesses, chambers of commerce, physicians, and insurers all oppose the New York Health Act.

The RAND Corporation’s  assessment of the New York Health Act, which was commissioned by the New York State Health Foundation, has been referenced by proponents and opponents frequently since its release in July 2018.   Among the many assumptions that the report advances to assure the single-payer plan’s feasibility is one that assumes growth in provider payment rates would be restrained.  This is troublesome not only for providers, but should worry patients as well.

Under a true single-payer system, hospitals would lose the ability to negotiate for reimbursement rates with commercial insurers.  Currently, hospitals rely upon these negotiated contracts to offset the much lower rates that Medicare and Medicaid – public payers – reimburse hospitals.   On average, Medicare pays 94 cents for each dollar of care provided and Medicaid pays 74 cents for each dollar of care provided, according to analyses conducted by the Healthcare Association of New York State (HANYS).  This state hospital association calculated these shortfalls from the  publicly available reports that hospitals are required to file with state and federal agencies.

A single-payer system likely would benchmark reimbursement for all services at these inadequate levels and seek to restrain growth over time.  The fallout is obvious – elimination of services, staff reductions, no money to invest in community benefit projects related to social determinants of health, no upgrades to already inadequate physical infrastructure.  Many of New York’s hospital buildings are the oldest in the nation.

Hospitals earned the right to negotiate reimbursement rates with commercial insurers way back in 1997 when New York State de-regulated healthcare reimbursement and touted the benefits of a free market and competition.  That led to a variety of insurance plan products – some more generous than others – depending upon the hospital’s market position and bargaining power and patients’ willingness to pay premiums commensurate with the depth and breadth of coverage.  A public payer environment eliminates flexibility in insurance plan design, which would impact affordability and access to some services for patients.  More appropriately, the goal of the hospital industry is to increase access to healthcare services for all and finally achieve universal healthcare insurance coverage.

As advanced technologies and procedures, expensive pharmaceuticals, the increasing financial burden of chronic diseases, and patient demand drove up overall healthcare costs, including insurance premiums, New York State worked hard during the past decade to expand insurance coverage and healthcare access for New Yorkers of all income levels.   The Children’s Health Insurance Program (CHIP) ensures that just about every child in New York State has good insurance coverage and a more recent program, the Essential Health Plan, ensures that low-income working adults, who are not eligible for Medicaid, can purchase very affordable and comprehensive health insurance.   New York’s uninsured rate has dropped from 10 percent in 2013, when the state’s health insurance marketplace opened, to five percent at the close of the 2017 enrollment period in December.  That is a remarkable 50 percent reduction.  We are getting closer to universal healthcare coverage.  New York State is demonstrating that it is an achievable goal, even in the absence of a single-payer model.

Protecting 340B Drug Discount Program for Benefit of Patients and Hospitals

The American Hospital Association’s (AHA) release of its Good Stewardship Principles concerning the Medicare 340B Drug Discount Program is the latest step in a series of actions designed to protect and strengthen this program.  The 340B Drug Discount Program has been under attack in recent years from legislators, policy makers, and oversight agencies that believe some utilizers of the program are not using the savings from the program as Congress intended – that is to fund other vital services and programs that might otherwise not be available to patients in vulnerable communities.

The 340B Drug Pricing Program requires drug companies that participate in Medicaid to sell outpatient drugs to certain not-for-profit hospitals – mainly safety-net hospitals – health centers, and specialty clinics at discounted rates, which range from 20 to 50 percent.  The program was established in 1992 and providers in New York State use savings from this program to re-invest in a variety of community outreach activities, free and low-cost programs, and most importantly, low or no-cost medications to low-income, vulnerable patients.  It’s important to remember that the 340B Drug Discount Program operates at little cost to the federal government.

Despite its inherent value, the Centers for Medicare and Medicaid Services (CMS) reduced by nearly 30 percent the amount Medicare reimburses for some drugs purchased through the 340B Program.  That cut took effect January 1, 2018.  This will result in more than $100 million in cuts this year to eligible 340B hospitals – cuts that will ultimately hurt New York’s most vulnerable patients.  The Suburban Hospital Alliance of New York State (SHANYS) has voiced its opposition to these cuts and supports current bills (H.R. 4392 and H.R. 6071), which would halt these cuts and institute other reforms to strengthen the program.

On the legal front, the American Hospital Association recently refiled its lawsuit against the U.S. Department of Health and Human Services (HHS) agency challenging CMS’ rule that imposed the 30 percent cut.  The first suit was dismissed on procedural grounds.  A U.S. Court of Appeals agreed with a lower court stating that the plaintiffs had not yet exhausted their administrative remedies challenging CMS’ legal authority to implement the cuts.  The new lawsuit demonstrates that the administrative appeals process has been exhausted.  SHANYS is supporting this suit.

Since the 340B Drug Program involves pharmaceutical companies, the issue of pricing and transparency is tantamount to the program’s intent to enable eligible hospitals to reinvest savings.  Those in the program receive a minimum discount or “ceiling price” reduced by a rebate percentage. An additional discount is allowed, if the price of the drug has increased faster than the rate of inflation.  A final rule, awaiting implementation by the HHS regarding 340B drug ceiling prices and civil monetary penalties for manufacturers, has been delayed five times.  The rule is intended to provide transparency on drug manufacturer price increases and hold these manufacturers accountable.  This rule will have an immediate effect on the affordability of prescription drugs.  The AHA just filed a separate lawsuit pertaining to this delay.

The 340B Drug Program is one of the more complicated healthcare policy and financing issues.  But the bottom line is that the program historically has helped hospitals to invest in their community’s health, including funding for social determinant of health interventions, such as subsidized transportation, mobile primary care units, and expanding mental health and substance use services, to name a few benefits.

In light of increased scrutiny surrounding the 340B Program, the AHA’s 340B Good Stewardship Principles for hospitals remind everyone of this program’s necessity and value beyond drug affordability.  More importantly, the principles provide hospitals with a framework to tell the public about how the savings from this crucial program allow their hospitals to deliver a variety of benefits to patients and communities – programs and services that would not exist otherwise.

Federal Actions Further De-Stabilize Insurance Market and Foretell Premium Hikes

In late spring, insurers filed their proposed rate increases with the New York State Department of Financial Services (DFS).  The average rate increase is 24 percent in the individual market and 7.5 percent in the small group market for 2019.  These are the increases proposed before the latest news from the Centers for Medicare and Medicaid Services (CMS) revealed that the agency has put on hold $10.4 billion in risk adjustment payments for benefit year 2017.  This matters because the loss of these payments, along with the repeal of the individual mandate and the White House’s recent final rule expanding the role of association health plans, further de-stabilizes the insurance marketplace and increases premiums even more next year.

It has to do with covering the very sick and covering the not so sick.  Insurance companies need a “healthy” mix of the two in order to remain solvent and to ensure affordable premiums for all.  It’s simple economics.  Various elements of the Affordable Care Act (ACA) were intended to ensure that risk was shared and broadly distributed.

The Affordable Care Act’s (ACA) Risk Adjustment Program was one such element designed to do just that – to stabilize insurance markets by disincentivising health insurers from seeking out only the healthiest of individuals as customers.  The program guards against “cherry picking,” a tactic that ends up leaving a handful of insurers with the most costly covered members and by default the costliest premiums for all.   The Risk Adjustment Program transfers funds in the individual and small group health insurance markets from health plans with lower-risk members (the healthy) to plans with higher-risk enrollees (the sick, which includes those with pre-existing conditions).  No taxpayer money is involved.

In response to the federal government’s action, Governor Cuomo directed the DFS to implement an affordable health access action plan to expand the state’s Risk Adjustment Program, if necessary.  The idea is to ensure access to affordable health insurance, especially for those who need it the most.

CMS says it took this action due to conflicting court rulings in lawsuits filed by small insurers who claim they are being treated unfairly by the program.  The administration says its hands are tied due to the contradictory decisions stemming from federal courts in New Mexico and Massachusetts regarding the formula CMS uses to calculate the payments.  However, some legal experts say these payments are required by law and should continue.

While such uncertainty is not helpful to insurers, patients and providers bear the brunt of these actions.  Patients, especially those with pre-existing conditions such as diabetes, heart disease, cancer and any other number of chronic illnesses, could be priced out of the insurance market and unable to access care.  And hospitals, institutions that are required under federal law to treat anyone who presents at an emergency room, will receive little to no reimbursement for the care offered to those uninsured patients.

CMS’ final ruling in late June that expands the availability of association health plans also chips away at the stability of the insurance markets, patients’ access to care, and hospitals’ ability to care for the uninsured and underinsured.  The association health plan rule allows unrelated businesses or groups of individuals to form groups to purchase health insurance across state lines, without a requirement to offer products that adhere to the current ACA’s minimum standards of coverage.  In other words, plans could skimp on covered benefits and charge members differently, depending upon health status.  That raises premium costs for employers and employees.  Although New York State has robust consumer and provider protections in place, this new rule, effective September 1, 2018, will challenge the state’s ability to regulate these plans.

The repeal of the penalty for not complying with the individual mandate is almost universally cited by insurers operating in our state as the reason why the average rate increase (24 percent) requested for the individual market is so steep for 2019.   Repeal of the penalty and, in effect, the individual mandate to carry health insurance, was contained in tax reform legislation passed late last year.  The state will review requested rates this summer and has the authority to change the requested amounts.  The approved rates will be announced in the fall.

New York State notes that since the implementation of New York’s own health insurance exhange, the state’s uninsured rate has halved.  That is progress and good news for New Yorkers.  More insured patients is also good news for providers.  However, the elimination of the individual insurance mandate undermines the fundamental balance of interests and economics agreed to in the ACA. The hospital sector agreed to hundreds of billions of dollars in federal Medicare and Medicaid cuts, over the course of 10 years, to help fund the law.  Insurers agreed to underwriting restrictions in exchange for the promise of a diverse pool of new customers.  Consumers and employers would get access to affordable coverage in exchange for the mandates to purchase insurance.  The ranks of the insured would swell.

By chipping away at the individual mandate, risk adjustment programs and coverage requirements, the law is significantly weakened.  Soaring premiums for plans in the exchange are but one consequence of these actions.

The current administration’s actions do nothing to reduce health insurance costs for Americans or enhance access to care.  Instead, these actions move us backwards and hamper hospitals’ ability to provide affordable care to all.