State systems to track availability of psychiatric hospital beds vary

Recognizing the critical need for inpatient hospital and residential mental health and substance use disorder treatment settings, the HHS Office of the Assistant Secretary for Planning and Evaluation (ASPE) has released a report that examines how states make information on open beds available to consumers, the impact of effect that inpatient bed tracking has on patient access, and the challenges that remain with inpatient bed tracking systems. The researchers concluded that among the 17 states that track availability of psychiatric hospital beds, only five states allow for public access. In some states, systems to track the availability of psychiatric hospital beds have been challenged by the reluctance of hospitals to update information on open beds frequently enough to be useful given rapid patient turnover (ASPE Report, August 2019).

Need for inpatient bed tracking

ASPE conducted a study to examine how states make information on open beds available to consumers, the impact of effect that inpatient bed tracking had on patient access, and the challenges that remain with inpatient bed tracking systems. Inpatient hospital and residential mental health and substance use disorder (SUD) treatment settings are a critical component of behavioral health services care. Patients may require an inpatient hospital stay when they experience a psychiatric or SUD emergency, pose a threat to themselves or others, and need 24-hour medical monitoring and treatment. In the absence of a bed registry, emergency room staff, patients, or other providers must call multiple hospitals or residential settings to determine if there is a slot available that would be appropriate given the patient’s needs. This results in long waits in emergency departments.

Systems to track openings

The researchers conducted an environmental scan by identifying states that have systems to track openings in behavioral health treatment settings, such as hospital psychiatric beds and residential treatment beds. The study found among the 17 states that tracked this information, only five states allowed public access. The other 12 states kept the information about bed availability behind a firewall and only available to providers. The researchers found significant variation among states in how the registries were operating, the types of behavioral health providers they included, and perceptions of their usefulness. In some states, systems to track the availability of psychiatric hospital beds have been challenged by the reluctance of hospitals to update information on open beds frequently enough to be useful given rapid patient turnover.

Emergency department staff noted that the system does not negate the need for them to call hospitals to confirm that there is still an open bed that is appropriate for the patient’s needs and that relationships among hospitals and emergency departments and other crisis system staff may be more efficient than using the bed registries. However, some states reported that the registries were very helpful in locating open beds as well as in documenting the need for additional psychiatric beds.

Registries that post available openings in SUD residential, detoxification, and other non-hospital-based systems are less common than hospital bed registries. Connecticut has a publicly-facing registry that indicates openings in SUD treatment settings. Interviewees reported that patients with SUDs and providers like the system and find it useful. However, more effort is needed to make patients and family members aware of the system.

Future research

There have been no formal evaluations of the effect of bed registries on access to care. The report concluded that future research could help improve understanding of the characteristics and processes that make the bed registries most useful. Some avenues to explore include: (1) how financial, regulatory, contractual, and policy levers can be used to encourage participation in bed registry systems; (2) how many consumers are using the public registries and how to increase their usage; (3) whether technology can substitute for human data entry to track available treatment beds; and (4) whether registries reduce the time and effort required to locate an appropriate inpatient or residential bed.

Annual report to HHS for improving Medicare, Medicaid, and related services

HHS should undertake steps to (1) guard against fraud, waste, and abuse, (2) help beneficiaries and providers, and (3) implement better payment policies, according to the Office of Inspector General’s (OIG) annual report on the top unimplemented recommendations from the previous year. While the report ranged far and wide in its recommendations, including a suggestion to the FDA to improve food safety inspections, the bulk of the report was dedicated to addressing fraud, waste, and abuse in Medicare and Medicaid (OIG Report, July 22, 2019).

Background

Each year, the OIG creates a report that focuses on what it contends are the top recommendations for improvement in HHS programs that were not implemented over the past year. This report offers suggestions to both HHS and the FDA on where they should direct their reform efforts for maximum benefit.

The OIG made the following recommendation pertaining to fraud, waste, and abuse.

Inpatient rehab facilities 

In 2013, Medicare paid $5.7 billion to inpatient rehabilitation facilities (IRF) for care to beneficiaries that was not reasonable and necessary. The errors, the OIG said, were due in part to the fact that the payments to the IRFs were not properly aligned with the costs. The current system gives the IRFs a financial incentive to admit patients inappropriately. CMS is apparently evaluating the payment system, which includes a recently issued final year 2019 IRF prospective payment system final rule to update policies and payment rates for fiscal year 2019.

‘Least costly alternative’ Part B drugs

If the least costly alternative requirement had not been rescinded for Part B drugs, Medicare would have saved $33.3 million in one year ($264.6 to $231.3 million). Once the requirement was removed, utilization patterns shifted dramatically in favor of costlier products.

Part D drug oversight

Medicare Part D spending on compounded topical drugs soared from $13.2 million in 2010 to $232.5 million in 2016. Questionable billing practices seem to be concentrated in a few metropolitan areas. OIG has identified prescribers with troubling order patterns. States are hamstrung in their ability to prevent drug overpayments. State agencies need to know the 340B ceiling prices and which Medicaid claims are associated with 340B drugs to ensure that the claims are paid correctly.

Managed care organization improvements

OIG believes that a significant amount of underreporting of fraud and abuse is occurring in Medicaid involving managed care organizations. For example, even where a managed care organization discovers fraud or abuse, OIG says that it will handle the situation by itself (terminating the contract) rather than report it to CMS. CMS must do more to ensure that the organizations identify and refer fraud and abuse to the state.

Help beneficiaries and providers

In addition, the OIG recommended that CMS analyze the impact of counting time as an outpatient toward the 3-night requirement for skilled nursing facility services (SNF). Beneficiaries with similar post-hospital care needs have different access to SNF services depending upon whether they were outpatients or inpatients because of the requirement that the beneficiary spend at least three nights as an inpatient to obtain post-hospital SNF Medicare coverage. Furthermore, CMS paid an estimated $84.2 million in improper payments between 2013 and 2015 because SNFs incorrectly determined whether the 3-night requirement was met. CMS should consider changes to make the system fairer, which could include counting time as an outpatient.

FDA

The OIG had a single recommendation for the FDA, noting that deficiencies exist in the FDA’s electronic recall data system. The FDA relies too much on voluntary corrections by facilities. Just over half the facilities that were inspected and should have received warning letters actually received warning letters. The FDA also frequently fails to conduct timely follow-up inspections to ensure compliance. The OIG suggested that the FDA act to address these shortcomings.

Court imposes 10-month deadline for pre-market tobacco applications

A federal district court in Maryland has set a deadline of 10 months for tobacco product manufacturers to submit pre-market applications and a one year deadline for FDA approval. The court previously concluded that the FDA violated the Administrative Procedure Act (APA) when it released guidance in 2017 extending the compliance deadline for the “Deeming Rule” which brought new tobacco products under the purview of the Family Smoking Prevention and Tobacco Control Act. Rather than remanding the issue to the FDA to determine a timeline for compliance or accepting the plaintiffs’ request of a four-month deadline for applications, the court accepted the FDA’s recommendation of a 10-month deadline. The court found that it has the authority to impose such a deadline under the extraordinary circumstances of the case, in which prompt action is necessary to combat the public health crisis caused by the rise in youth e-cigarette use (American Academy of Pediatrics v. FDA, July 12, 2019, Grimm, P.).

FDA tobacco rule compliance extensions

On May 10, 2016, the FDA issued the “Deeming Rule,” bringing approximately 25,000 new tobacco products, including various cigars, e-cigarettes, pipe tobacco products, and hookah within the purview of the Family Smoking Prevention and Tobacco Control Act. The Deeming Rule went into effect 90 days after its publication (see FDA clears the air, ‘deems’ e-cigarettes, hookah tobacco, cigars worthy of regulation, Health Law Daily, May 10, 2016). In May 2017, the FDA extended the compliance deadline by three months. In August 2017, the FDA extended the timelines to submit tobacco product review applications for deemed tobacco products that were on the market as of August 2016. In May 2019, the district court ruled that the FDA’s August 2017 compliance deadline extension violated the Administrative Procedure Act, as it was done without following notice and comment requirements. The court vacated the August 2017 Guidance and asked the parties to brief the court on potential remedies, given that the application deadlines in the Deeming Rule and May 2017 Guidance had passed.

Remedy

The court concluded that the case presented “extraordinary circumstances” that called for more than simply vacating the guidance and remanding the issue to the FDA (as was requested by manufacturers). It imposed a 10-month deadline for submissions and a one-year deadline for approvals, as suggested by the FDA. The plaintiffs had requested a four-month deadline for submissions, but the court rejected that solution because of the record from the FDA demonstrating that a four-month deadline would prevent them from timely approving or denying applications and could clear the market of e-cigarette products, thus creating a risk that adult smokers would switch from e-cigarettes to combustible tobacco products. The FDA also presented evidence that it plans to accelerate the premarket review requirements for the products that are most attractive to youth, such as flavored products.

The court concluded that without a deadline for filing, manufacturers would be unlikely to move forward with applications, because the record showed a purposeful avoidance by the industry of complying with the premarket requirements despite entreaties from the FDA that it can do so, and it establishes a shockingly low rate of filings.

CBO report examines bill designed to lower health care costs

The Congressional Budget Office (CBO) released a cost estimate stemming from S.1895, Lower Health Care Costs Act, which is intended to lower the cost of health care to individuals as well as to the federal government. The CBO and JCT estimate that several of the bill’s provisions would result in a reduction in the cost of health insurance that is subsidized through the federal government, through the Patient Protection and Affordable Care Act (ACA), or from employment-based plans. Overall, the agencies found that if S.1895 is enacted, there would be an increase in direct spending by approximately $18.7 billion in conjunction with an increase in revenues by $26.7 billion over the period spanning from 2019 to 2029, for a net decrease in the deficit of $7.6 billion (CBO Report, July 16, 2019).

The bill is divided into five titles, which the CBO considers individually in its cost estimate. The first title is related to surprise medical bills. Title I contains patient protections against surprise medical billing, such as prohibition against balance billing and by requiring insurers to treat out-of-network care as in-network care for purposes of computing copayments, coinsurance, deductibles and spending toward out-of-pocket limits. Moreover, Title I of the bill “would require insurers to reimburse out-of-network providers at the median in- network rate for a given provider type and geographic area.”

Title I would also affect private insurance premiums in four ways, each explained in the report. According to the CBO and JCT, estimated changes in the cost of these premiums varied according to insurance market and the type of plan. The net effect would be lower insurance premiums and savings to the federal budget. Additionally, in light of the creation of a means by which out-of-network services are reimbursed at median in-network rates, payments to all providers “would converge around those median rates.” This would reduce payments for in-network care. According to the CBO and JCT the most significant effects of Title I stem from these lower payments for in-network care. However, private insurance premiums are also affected by changes in payment rates.

Title II of the bill relates to reduction in the price of prescription drugs. The bill would modify the FDA’s framework for approval of certain drugs and biologics, which would ultimately pave the way for certain generics or biosimilar medications to make an earlier entry into the market. In the report, the CBO and JCT break down their estimates into various sections, citing the impact on direct spending and revenues for each section.

The CBO and JCT explain that in Title III, the bill imposes new rules governing insurers’ contracts with health care providers and pharmacy benefit managers, noting that sections 302, 303 and 306 of the bill specifically affect direct spending or revenues. The report describes the impact of tiered plans and estimates that increased enrollment in those type of plans would reduce spending for certain care, thereby reducing average health insurance premiums for employment-based coverage. The report also details the new requirements on pharmacy benefit managers.

The CBO and JCT also analyzes Title IV of the bill, noting that this section sets out to extend funding for certain federal health care programs, among other things raising the minimum age for the sale of tobacco products. One section of Title V delineates the requirements that health insurers create and maintain “application programming interfaces” the creation and maintenance of which would create new administrative costs. The CBO and JCT estimate the costs would be passed on to enrollees in the form of higher premiums. They estimate that balancing the increase in direct spending with the decrease in revenues, there would be an increase in the deficit for the relevant period.

The report also explains the estimates arising from the various sections of the bill are subject to uncertainty and lays out the nature of that uncertainty relating to different issues. It also explains that the bill imposes intergovernmental and private-sector mandates. CBO estimates that the former would average about $100 million annually and the latter, $15 billion annually. In each instance, the CBO estimates that in each of the first five years the mandates are in effect, those costs would exceed the respective threshold established in Unfunded Mandates Reform Act (UMRA). The CBO and JCT examine each mandate and estimate the impact upon outlays and revenues, as well as whether it applied to public, private or both types of entitles.