January 6, 2023

The Weekly Gist: The Smart Speaker of the House Edition

by Chas Roades and Lisa Bielamowicz MD

Like other Beltway denizens, we’ve been transfixed by the drama playing out on the floor of the House of Representatives this week. It’s our version of “The Bachelor”, airing on C-SPAN—ooh, look! Gosar is talking to Ocasio-Cortez! Hoyer is playing Fruit Ninja on his iPhone! No one will talk to Santos! But enough is enough, and we’ve got the perfect candidate to assume power, should the stalemate continue. She’s super responsive to her constituents, can easily illuminate the darkness, excels at forecasting, and even knows how to play any song you ask her to. Yep, we nominate Alexa—the smart speaker of our houses—to be Speaker of the House. Heck, Jeff Bezos already owns the Washington Post…just think of the synergies! Alexa: how does a bill become a law?


What happened in healthcare this week—and what we think about it.

  1. 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.

  1. 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. 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.

Pluswhat we’ve been reading.

  1. 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.


A key insight or teaching point from our work with clients, illustrated in infographic form.

How the Omnibus spending package impacts healthcare

While healthcare wasn’t a top priority for lawmakers hammering out the Omnibus bill aimed at keeping the government open through next September, the graphic below outlines the bill’s three greatest areas of impact for providers. The package reduces the planned 4.5 percent 2023 physician fee schedule cut to two percent, while also extending value-based care bonuses in alternative payment models (albeit at 3.5 percent, instead of five percent). It also delays the $38B Medicare spending cut required by the PAYGO sequester, pushing that cut out two years. On the telehealth front, the bill extends Medicare’s pandemic-era virtual care flexibilities through 2024, including the “hospital at home” waiver. It also sets April 1, 2023 as the start date of a one-year window for states to reassess Medicaid enrollment, decoupling the start of eligibility redeterminations from the end of the federal COVID public health emergency. Medicaid enrollment grew by 25 percent over the course of the pandemic, but around two-thirds of new enrollees may lose eligibility after redeterminations. Overall, the legislation is a mixed bag for providers. The uninsured population is expected to grow, at least in the short term. Physician groups had hopes for a complete reprieve from Medicare pay cuts, and the fact that they didn’t get it may signal growing Congressional hesitancy to intervene with the Medicare physician fee schedule in the future. But the telehealth extensions may encourage other wider adoption of reimbursement by private insurers, bolstering providers’ long-term virtual care investments.


A recommendation from our weekly diet of music, movies, TV, and other good stuff.

I Hate Suzie Too (HBOMax)—An even darker and more frantically funny sequel to 2020’s I Hate Suzie, following the has-been, mid-level celebrity Suzie Pickles as her personal life and professional career circle the drain. A brilliant British send-up of 21st century fame, complete with a Christmas-themed reality TV dance competition. Fun!


What we learned this week from our work in the real world.

Why are fewer hospital admissions coming from the emergency department?

At a recent health system retreat, the CFO shared data describing a trend we’ve observed at a number of systems: for the past few months, emergency department (ED) volumes have been up, but the percentage of patients admitted through the ED is precipitously down. The CFO walked to through a run of data to diagnose possible causes of this “uncoupling” of ED visits and inpatient admissions. Overall, the severity of patients coming to the ED was higher compared to 2019, so it didn’t appear that the ED was being flooded with low-level cases that didn’t merit admission. Apart from the recent spike in respiratory illness brought on by the “tripledemic” of flu, COVID and RSV, there wasn’t a noteworthy change in case mix, or the types of patients and conditions being evaluated in the emergency room. (Fewer COVID patients were admitted compared to 2021, but that wasn’t enough to account for the decline.) The physicians staffing the ED hadn’t changed, so a shift in practice patterns was also unlikely.

A physician leader attending the retreat spoke up from the audience: “I can diagnose this for you. I work in the ED, and the problem is we can’t move them. Patients are sitting in the ED, in hallways, in observation, sometimes for days, because we can’t get a bed on the floor. The whole time we are treating them, and many of them get better, and we’re able to discharge them before a bed frees up.” With nursing shortages and other staffing challenges, many hospitals have been unable to run at full capacity even if the demand for beds is there. So total admissions may be down, even if the hospital feels like it’s bursting at the seams. The current staffing crisis not only presents a business challenge, but also adversely impacts patient experience, and makes it more difficult to deliver the highest quality care. A good reminder of the complexity of hospital operations, where strain in one part of the system will quickly impact the performance of other parts of the care delivery continuum.


All the headlines in healthcare policy, business, and more, in ten minutes or less every weekday morning.

In 2022, a number of health systems became victims of ransomware attacks that disrupted operations and exposed patient data. Coming up on Monday’s show, J. Carlisle Larsen speaks with Steve Cagle, CEO of healthcare cyber risk management company Clearwater, about the state of cybersecurity and how health systems can better protect themselves.

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That’s all for this week! We’re so glad to be back for 2023, and so grateful for your continued readership. You’ll want to stay tuned for next week’s edition—we’ve got some exciting news to share! In the meantime, don’t forget to let your friends and colleagues know about the Weekly Gist, and encourage them to subscribe, and to listen to our daily podcast. It’s going to be a fun year!

As always, please let us know if we can be of assistance in your work. You’re making healthcare better—we want to help!

Best regards,

Chas Roades
Co-Founder and CEO

Lisa Bielamowicz, MD
Co-Founder and President