|THIS WEEK IN HEALTHCARE
What happened in healthcare this week—and what we think about it.
A worrisome bump on the road to nationwide testing
In a week that saw reopening activity pick up across the country, drawing even more attention to the need for sufficient testing to give employers and workers confidence in returning to work, a new study from researchers at New York University (NYU) suggested that a widely-hailed rapid testing machine from Abbott Labs may be unreliable. The Abbott ID NOW COVID-19 test produced false negatives a third of the time using nasopharyngeal swabs, and 48 percent of the time with less-invasive “dry nasal swabs”, according to the study, which has not yet undergone peer review. The five-minute, point-of-care test received emergency use authorization from the Food and Drug Administration (FDA) in late March and has been touted as a “great test” by President Trump, whose White House relies on it to test the President and those around him. On Thursday, the FDA issued a warning about the potential for false negative results using the Abbott test. The company disputes the findings and sent a list of questions to the NYU researchers for clarification. Meanwhile, two White House staffers—an aide to the President and the Vice President’s press secretary—tested positive for coronavirus, causing the White House to mandate masks for all employees starting this week. The uncertainty around test results, and the ensuing concern about safety at the White House, provides a foretaste of the difficult road ahead for thousands of employers nationwide as stay-at-home orders are lifted, and companies consider when and how to reopen workplaces. If the White House is struggling, how will ordinary businesses fare? US coronavirus update: 1.46M cases, 87K+ confirmed deaths, 10.2M total tests conducted.
CMS continues push toward price transparency
The Centers for Medicare and Medicaid Services (CMS) released its 2021 Inpatient Prospective Payment System (IPPS) proposed rule this week. Along with a modest overall rate increase of 1.6 percent for hospitals, and a change to residency funding to better protect residents in the wake of program or hospital closure, the rule builds on CMS’s 2019 price transparency efforts by requiring hospitals to list median, payer-specific, negotiated rates for inpatient services, reported by Medicare Severity-Diagnosis Related Group (MS-DRG) on cost reports. The American Hospital Association (AHA) denounced CMS’ latest transparency push as “unlawful”, building on its ongoing court challenge to the agency’s price transparency rule, and arguing that forcing disclosure of negotiated rates is government overreach, violates the First Amendment, and won’t further CMS’s goal of paying market rates that reflect the cost of delivering care. The new inpatient payment proposal signals the Trump administration’s continued commitment to price transparency, a key area of emphasis across the past three years. With consumers bearing a growing proportion of healthcare costs as the nation heads into a recession, continuing to defend “secret pricing” could be harmful to public perception of hospitals, and dampen the wave of support providers have received in the wake of caring for COVID-19 patients. Comments on the proposed rule are due by July 10th.
Approaching a “land grab” for virtual care
This week brought announcements from health plans and disruptors looking to expand their virtual care platforms, responding to consumers’ rapid embrace of online visits during the coronavirus lockdown. Having previously sold its services through employers, commercial insurers and directly to consumers, Doctor on Demand became the first telemedicine vendor expand into the Medicare Part B program, taking advantage of loosened regulatory restrictions to offer its services to seniors who rely on fee-for-service Medicare coverage. As provider concerns grow about the stability of telemedicine payment for 2021, BlueCross BlueShield of Tennessee became the first major commercial plan to announce that telemedicine coverage changes will be permanent (but included no mention of how future virtual visits will be paid, relative to reimbursement for in-person encounters). And Washington State-based Premera Blue Cross announced the launch of its first “virtual primary care health plan”, partnering with virtual care provider 98point6 to provide on-demand telemedicine visits through the health plan’s app, with no patient copayment. The telemedicine services Premera describes are in line with those offered by many other plans, and are clearly positioned to connect the health plan’s network offering and benefit design with its own virtual care platform to directly appeal to consumers. Providers have expanded telemedicine services dramatically as the pandemic forced cancellation of nearly all non-emergent care. The rest of this year will surely bring a flurry of new offerings from health plans, retailers and other disruptors, setting up a telemedicine “land grab” as companies look to use virtual care as a channel to build deeper relationships with healthcare consumers.