Chart of the Week
Congress.
Texas Showdown. A couple of weeks ago, CMS revoke the Trump administration’s 10-year extension of Texas’ Medicaid waiver. The extension of the waiver allows Texas to continue the way in which it funds its uncompensated pool funds. (Short description: Texas hospitals make contributions that leverage up federal matching dollars but also enhance their Medicaid reimbursement in a very opaque way.)
The thinking in the Biden administration is that, deprived this funding stream, Texas will pursue Medicaid expansion. Texas for what it is worth, already supports indigent care through hospital districts that assess a property tax levy.
Senator John Cornyn decided to use the revocation as a pretext for putting a hold on Chiquita Brooks-LaSure’s confirmation vote for CMS Administrator so they can discuss.
Unless CMS reconsiders, Texas’ current Medicaid waiver expires Sept. 30, 2022 which may have negative consequences for THC and HCA if they don’t get it worked out.
Drug Prices. The White House has made it clear they do not wish to include a drug price bill in their infrastructure package. House Democrats, still seeing an opportunity, have refiled H.R. 3, their sprawling overhaul of the drug industry, to build support for its inclusion. The major provisions of the bill include price negotiation by Medicare; mandatory rebates when prices increase faster than inflation, revisions to the Medicare Part D benefit design, and funding for opioid addiction interventions.
The area of greatest consensus is a redesign of the Medicare Part D benefit. It is estimated to save the federal treasury about $6B in ten years. Pharma executives appear to be pretty confident they can keep any of the more radical provisions at bay. We tend to agree.
Examining COVID. Two hearings next week should yield some good information worth paying attention to: The Energy and Commerce Subcommittee on Health will hold a hearing on COVID Long-haulers and the Ways and Means Subcommittee on Health will hold a hearing on Charting the Path Forward for Telehealth.
While we can appreciate how annoying Congressional hearings can be they are also a very efficient way to hear from experts on certain topics.
The White House.
JNJ Vaccine “Pause.” The weirdness of the JNJ vaccine pause may be drawing to a close. In normal times, the FDA, once alerted to adverse events would assess the risk and make recommendations on labeling and indication, as appropriate, or market withdrawal, if necessary. Since these are not normal times, the CDC and the FDA recommended a pause in administration of the vaccine while they examined the issues.
This afternoon, the CDC’s Advisory Committee on Immunization Practice met to make a recommendation on resumption of vaccinations. They managed to reject recommendations that would have had them stepping into the shoes of the FDA and instead voted to resume administration and adopt the warning language the FDA has approved. You might find JNJ's presentation useful.
Medicare Rule-A-Rama. There are two pending rules at the White House. The first would set the 2022 payment rates for hospitals and LTCHs. The second would do the same for the physicians’ fee schedule. Still no surprises expected as both were mostly written by the Trump administration.
ACA Exchange Open Enrollment. HHS released their annual report for open enrollment. About 12 million people enrolled, 21% of them new to the marketplaces. These figures are not very different from recent years and demonstrate the ongoing and hard-earned stability of the program. Note, the Biden administration has reopened enrollment until August so more information to come.
Other Stuff.
Earnings Commentary. The earnings commentary from the laboratory industry confirmed a lot of what we have found and presented in a recent deck, The Persistence of Testing. (Unplugged subs, use this link.)
DHR’s comments on popularity of point-of-care testing and the decentralization away from “distant” labs syncs up nicely with what the data is telling us. The share of tests conducted by ACLA member labs (read: DGX and LH) has eroded steadily since last summer. Taking their place for COVID testing, and perhaps beyond, are a lot of new CLIA labs authorized during COVID and now equipped with Cepheid tools plus providers that prefer the POC workflow.
DGX’s presentation did not offer a compelling alternative to the POC story, citing the “gold standard” that PCR test is. Their challenge is to expand their business out of their mainstay clinical setting into other markets for surveillance and return to life while contending with competition from lots of new players.
ANTM’s comments that the “giant backlog [of care] isn’t quite there” was interesting in light of HCA’s report later in the week. The backlog of care is very real, potentially very acute and likely to last years.
SPAC and S-1 Corner.
SPAC-land has gotten deathly quiet but not to be forgotten is the $27B in money floating around looking for a home before they turn into a pumpkin in 12-24 months.
You can access the updated SPAC spreadsheet here.
Recent Events.
UHS – Navigating a Spread Business in an Inflationary Environment. Keith McCullough invited me on his monthly speed dating event to discuss the implication of wage inflation on the weakest member of the hospital company trio, UHS.
Tweet of the Week
Emily Evans
Managing Director – Health Policy
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