Chart of the Week
Congress
Reconciliation. I don’t want to talk about it anymore, like most people who stand watch at the sausage factory. Plus, what I write here is likely to be outdated by the time you read it. Notwithstanding all that griping, a few bullets:
- Sen. Joe Manchin apparently named his top-line number of 1.5T back in July but we have spent the last few months talking about a $3.5T package because most people (and we might be a little guilty too) assumed he would roll. In response to calls that Manchin “tell [leadership] what he wants,” the Senator from West Virginia released a memo signed by both he and Senate Majority Leader Chuck Schumer in late July detailing broad outlines of what would it take to get him on board, including a $1.5T top line and a requirement for means testing some benefits.
- If, in fact, the rest of Sen. Manchin’s party gets close to that number – and those prospects do not look particularly good right now, changes in the scope of benefits for Medicare and permanent expansion of eligibility for ACA premium subsidies for those making over 400% of federal might fall to the side in the face of a means testing requirement. Filling the Medicaid gap, then, moves up my list of probabilities and with it, more money for Home and Community-based Services in state Medicaid programs.
- As the number gets smaller, the pressure for offsets builds. Medicare Advantage plans remain a possible target.
The White House.
Medicare Rule-A-Rama.
None Pending
Other Rules.
Surprise Billing. Like EMTALA, the No Surprises Act is likely to be another well-intended but counter-productive legislation. The administration released the second part of its rule under the law and, much to the delight of insurers, established the Qualified Payment Amount (generally the in-network rate in the relevant geography) as the primary consideration for resolving any payment disputes.
As we suggested would be the case when we last wrote on this – all providers affected by the legislation like pathologists and anesthesiologists – would de facto become in-network, just without the benefit of a contract negotiation. As “surprise billing” is nothing more than the result of a labor dispute, expect insurers, now emboldened, to terminate contracts or let them expire knowing full well there is no a need to worry about in-network and out-of network rates. Given the labor disruption already underway in health care, the “Surprise Billing” rules are bound to make things worse. ((MD -)
Vaccine Mandates. While the policy may be a sound one, vaccine mandates are causing a lot of heartburn for the health care industry. We have heard multiple anecdotes about nurses, particularly those of child-bearing age, that are quitting or being fired for not complying with either federally imposed mandates or provider-specific requirements. The Federation of American Hospitals sent a letter to HHS this week asking that mandates apply across the entire health care industry and have flexibility for providers to come into compliance in an effort to limit the damage.
Other Stuff
Inflation. As we discussed in our call on Wednesday, link here, inflation has a tough time showing itself in health care because most providers have little control over price. Inflation then appears in different forms like reduced throughput and higher acuity cases. Personal Consumption Expenditures released today is true to form. Total expenditures on health care are about at pre-COVID levels but as we know a lot of hospital visits are being delayed due to capacity restrictions.
SPAC and S-1 Corner
IPOs
Candela Medical. “We provide energy-based solutions for primarily elective, cash pay procedures that utilize our leading technologies in laser, pulsed light, radiofrequency and microneedling.” Our Thought Bubble. Aesthetic procedures are a nice way to spend all the money burning holes in American’s pockets.
Ensemble Health Partners. “Ensemble Health Partners is a leading provider of technology-enabled revenue cycle management (“RCM”) solutions for health systems, including hospitals and affiliated physician groups. We purpose-built our end-to-end RCM platform to deliver significant and sustainable financial performance improvement for our clients, enhance the patient experience, and better enable providers to focus on clinical care.” Our Thought Bubble: RCM is still a thing?
SPACs.
The SPAC King Speaks. Chamath Palihapitiya broke his months long silence in an interview with CNBC this week. He called for short selling to be investigated and reiterated his support for CLOV with the usual set of dimensionless numbers. With SPACs underperforming, generally, likely facing more regulation and FINRA inquiring about companies that use social media influencers, the timing was curious, but I guess we will have to see what happens next.
Aside from that a few new SPAC filings.
You can access the updated SPAC spreadsheet here. (Note: due to time constraints earlier filed SPACs have not been updated with recent action. We will resume tracking that next week. Sorry for the inconvenience.)
Have a great weekend.
Emily Evans
Managing Director – Health Policy
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