About health insurance/insurers
Healthcare billing fraud: 8 recent cases FYI
Physician Group Practices Accrued Large Bonuses Under Medicare’s Bundled Payment Model, 2018–20 “The Bundled Payments for Care Improvement Advanced Model (BPCI-A), a voluntary Alternative Payment Model for Medicare, incentivizes hospitals and physician group practices to reduce spending for patient care episodes below preset target prices…We found that physician groups earned $421 million in incentive payments during BPCI-A’s first four performance periods (2018–20). Target prices were positively associated with bonuses, with a mean reconciliation payment of $139 per episode in the lowest decile of target prices and $2,775 in the highest decile. In the first year of the COVID-19 pandemic, mean bonuses increased from $815 per episode to $2,736 per episode. These findings suggest that further policy changes, such as improving target price accuracy and refining participation rules, will be important as the Centers for Medicare and Medicaid Services continues to expand BPCI-A and develop other bundled payment models.”
About hospitals and healthcare systems
CommonSpirit posts $365M quarterly loss, -3.9% margin “Chicago-based CommonSpirit reported operating losses of $365 million and $411 million during the three- and nine-month periods ending March 31, 2024, compared to losses of $619 million and $1 billion during the same periods the year prior.”
Cleveland Clinic's operating margin inches up as inflation pressures hold volume gains in check “The nonprofit system reported this week a $50.2 million operating gain (1.3% operating margin) as opposed to the prior year’s $32.3 million (0.9% operating margin). Operating revenues rose 10.2% year over year to nearly $3.9 billion while operating expenses followed close behind with a 9.8% increase.”
Surging Hospital Prices Are Helping Keep Inflation High “Hospital prices specifically jumped 7.7% last month from a year ago, the highest increase in any month since October 2010, the Labor Department said Wednesday.
Among the procedures with hefty recent price increases are angioplasties placing stents in arteries to improve blood flow, which grew $670, or 4.5%, to $15,640 in the first three months of the year from the same period a year ago, according to Turquoise Health.”
Comment: Hospitals are always raising prices; but what they are paid depends on contracts (with private insurers) or regulations (with Medicare and Medicaid). So, while the Consumer Price Index includes what is actually paid (price and payment are identical or close) hospital payments diverge greatly from prices.
Performance Trends Report Market Analysis and Hospital & Patient Volume Benchmarks “Key findings include:
—U.S. hospitals experienced up to a 17.9% shortfall in payment volumes in the first quarter.
—Expansion of the Two-Midnight Rule governing how long patients can be kept in outpatient observation status could affect more than 20% of Medicare Advantage encounters in 2024.
—Median hospital operating margins continue to stabilize, with the metric holding above 4.5% throughout the first quarter as hospitals saw an 11th straight month of gross revenue growth.
—Year-over-year growth in inpatient revenue exceeded outpatient revenue increases for the first time since late 2021.
—The share of knee replacement surgeries performed on an outpatient basis exceeded 80% in Q1 2024, up from about 20% five years ago.”
Comment: The entire report is worth reading.
Calculation of Overall Hospital Quality Star Ratings With and Without Inclusion of the Peer Grouping Step “Question What are the implications of applying a peer grouping step on hospitals’ Overall Star Ratings?
Finding In this cross-sectional study of 3076 hospitals that received a star rating in 2023, presence of the peer grouping step resulted in 585 hospitals (19.0%) being assigned a different star rating than if the peer grouping step was absent, including considerably more hospitals having a higher star rating (517 hospitals) than a lower star rating (68 hospitals).”
About pharma
In Big Pharma's growth rankings, Lilly took top spot from Novo Nordisk in Q1 “The momentum the biopharma industry showed in the fourth quarter of 2023 has continued into this year. With 18 of the industry’s top 25 companies achieving year-over-year revenue gains, the first quarter of 2024 nearly matched the final quarter of last year, when 21 of the industry's top 25 companies posted sales increases.”
About the public’s health
Justice Department formally moves to reclassify marijuana as a less dangerous drug in historic shift “A proposed rule sent to the federal register recognizes the medical uses of cannabis and acknowledges it has less potential for abuse than some of the nation’s most dangerous drugs. The plan approved by Attorney General Merrick Garland would not legalize marijuana outright for recreational use.
The Drug Enforcement Administration will next take public comment on the proposal in a potentially lengthy process.”
About healthcare IT
Scammers send fake MyChart messages “Scammers have been trying to trick patients into giving up personal information by sending fake MyChart messages.
Tacoma, Wash.-based MultiCare Health System is the latest system to warn of the scam.”
About health technology
Going beyond A, B and O: Thermo Fisher unveils DNA test for the rarest blood types “Thermo Fisher Scientific has put forward a DNA-based test it says can offer much more precise identification of blood and its potential compatibility—going much further than the traditional positive and negative blood types of A, B, AB and O.
Currently available for research use only, the company said its genetic approach could help support the development of cost-effective diagnostics for screening blood donations and matching them to the proper patients in need, including those with extremely rare blood types.