| THIS WEEK IN HEALTHCARE
What happened in healthcare this week—and what we think about it.
- Biden signs omnibus bill into law, reducing physician pay cuts. Late last week, President Biden signed a $1.7T spending package to fund the federal government through next September. While around half the funds are dedicated to defense, some important healthcare items made it into the bill, including a reduction in planned Medicare physician pay cuts and a two-year postponement of the $38B Medicare spending cut required by the PAYGO sequester. The law also decoupled several measures from the end of the federal COVID public health emergency (PHE), setting April 1st as the start date for states to begin Medicaid eligibility redeterminations, and extending Medicare’s telehealth flexibilities and the Acute Hospital Care at Home waiver program through the end of 2024. For more details on these changes, see our graphic below.
The Gist: Medical groups were hoping for more of a reprieve from the Medicare physician fee schedule cuts, but Congress proved unwilling to address concerns over rising practice costs. We’re relieved that Medicare’s new telehealth and hospital at home policies will continue beyond the PHE, given the early interest we’ve seen from the provider community in embracing these new, more consumer-friendly care models. Once the new Congress finally gets underway, we’re expecting this to be an uneventful two years for federal healthcare legislation, with the emphasis of health policy likely to shift toward states, federal agency rulemaking, and judicial activity.
- FDA approves abortion pills at retail pharmacies. Under new guidance released by the Food and Drug Administration (FDA) on Tuesday, retail pharmacies can now dispense mifepristone, the first in a two-drug sequence for medication abortions. This move follows a December 2021 change that allows mail-order pharmacies to ship prescribed mifepristone, which previously could only be dispensed in-person by approved clinics. The medication will still require a prescription, and will remain highly restricted, or even illegal, in states that have implemented strict abortion bans. Pharmacies opting to dispense the drug will face requirements that go beyond other medications, such as keeping the identity of the prescribing provider anonymous. Retail pharmacy chains CVS and Walgreens each announced plans to become certified to dispense mifepristone in locations where it is legal.
The Gist: Abortion pills, currently used in used in more than half of pregnancy terminations, are becoming more sought-after in the wake of last year’s Supreme Court ruling overturning the federal right to abortion. This FDA action is the latest move by the Biden administration to expand access to abortion—though its impact will be felt unevenly across states, even with the Department of Justice stating the Postal Service can legally deliver the medications anywhere in the US.
- 1.5 variant becomes dominant COVID strain in US. Surging from less than 5 percent of cases in the first week of December, XBB.1.5 now makes up over 40 percent of all COVID infections in the US. The new variant appears to demonstrate a high level of immune evasion, and is around 40 percent more contagious than the next most virulent strain, though illnesses caused by XBB.1.5 do not seem to be more severe. Weekly rates for new COVID-related hospital admissions are now higher than at any point since February 2022, despite case counts remaining lower than the peak of the summer wave in July 2022 (although it is likely that the vast majority of cases are now identified through home testing, and not reported, making the data unreliable).
The Gist: While the new variant seems to be less likely to create a COVID spike of the magnitude we experienced last winter, hospitalizations rising faster than case counts bears watching. That’s especially true given the current staffing situation in most hospitals, which makes each COVID admission and each caregiver call-out for illness a cause for concern. Only 15 percent of eligible Americans have received the most recent bivalent booster, leaving the population more vulnerable to this and future variants. Plus, additional funding to support the fight against COVID does not seem to be forthcoming from the new Congress. Beset with surges of COVID, flu, and RSV admissions, hospitals must hope that the end of the holiday season brings some relief.
Plus—what we’ve been reading.
- Tracking the rise of high-intensity billing in emergency care. The December issue of Health Affairs included an intriguing study that sought to explain the recent trend toward more high-intensity billing in emergency departments (EDs). Using ED visit data for “treat-and-release” visits (i.e. ED patients who were not admitted to the hospital), the study found that visits deemed high-intensity, as defined by certain high-complexity or critical care billing codes, rose from around 5 percent of visits in 2006 to 19 percent in 2019. The authors conclude that while about half of this increase can be explained by changes in patient case mix and available care services that were visible in claims data, the other half is due to the adoption of sophisticated revenue cycle management programs, and industry-wide changes to billing practices that include upcoding.
The Gist: At first blush, an increase in high-intensity ED billing may not be a bad thing, if it means that greater numbers of people with low-acuity needs are going to urgent care centers, and avoiding EDs for needs that can be managed elsewhere. But the study finds that treat-and-release rates are going up for high-intensity patients. Though the authors list many potential reasons for this—including the changed role of the ED as a diagnostic referral center used by primary care physicians for quick workups of complex patients, the growing number of multimorbid seniors, and value-based care’s pressure to reduce hospital admission rates in favor of more resource-intensive ED visits—we have a strong suspicion that good old-fashioned upcoding also plays a role, especially as the percentage of emergency medicine practices managed by private equity companies increased from four percent to over eleven percent across the same time period as the study.
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