Boston Medical Center Issues Public Comment on Centers for Medicare & Medicaid Services Proposed Rule

WASHINGTON, Oct. 14 -- Kate Walsh, president and CEO of the Boston Medical Center, Massachusetts, has issued a public comment on the Centers for Medicare and Medicaid Services proposed rule entitled "Medicare Program: Changes to Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs; Addition of New Categories for Hospital Outpatient Department Prior Authorization Process; etc". The comment was written on Oct. 5, 2020, and posted on Oct. 7, 2020:

* * *

Thank you for the opportunity to submit comments on the Calendar Year (CY) 2021 Medicare Hospital Outpatient Prospective Payment System (OPPS) proposed rule, file code CMS-1736-P.

I am writing on behalf of Boston Medical Center (BMC), a private, not-for-profit, academic medical center located in Boston, Massachusetts. As the largest safety-net provider and busiest trauma and emergency services center in New England, BMC's mission is to provide exceptional care, without exception to all patients. Our patient population has the highest public payer mix of any acute care hospital in Massachusetts at 77% - with over half of our patients receiving care funded through MassHealth (the state's combined program for Medicaid and the Children's Health Insurance Program) or free care (i.e. uninsured). Of our Medicare patients, who make up roughly a quarter of our patients, the majority are dually eligible for Medicaid.

As the primary teaching affiliate of the Boston University School of Medicine, BMC providers are leaders in their respective fields, bringing the most advanced technologies and techniques to bear for their patients across our more than 70 medical specialties and subspecialties. To accomplish all of this, BMC relies on an incredibly skilled and diverse workforce spread across a multitude of clinical and professional capacities. In FY19, BMC employed nearly 6,000 full-time equivalents (FTEs), including 755 physicians, 711 residents and fellows, and 1,849 nurses - making BMC one of the largest employers in the region.

BMC is a leader in accountable care for publicly insured patients. Through our health plan, BMC HealthNet Plan, BMC is managing the largest Medicaid Accountable Care Organization (ACO) population in the state, with 1 in 5 MassHealth ACO members enrolled in our ACOs. BMC is now at risk for the majority of our patients and well positioned to succeed in the ACO, which began March 2018, because of our long history of addressing the social determinants of health impacting our patients.

Maintaining a robust continuum of care, including primary care provider sites and community health centers (CHCs), has long been a core focus of our health system. BMC is a founder of Boston HealthNet, an integrated healthcare delivery system with fourteen CHCs spread throughout the Boston area. Five of these CHCs are included on our hospital's license: Codman Square Health Center, DotHouse Health, East Boston Neighborhood Health Center, South Boston Community Health Center, and Greater Roslindale Medical and Dental Center - all of which are Federally Qualified Health Centers (FQHCs), except for Greater Roslindale. BMC outpatient clinics see over 1.5 million patient visits per year.

At Boston Medical Center we appreciate and support the work of the Centers for Medicare and Medicaid Services (CMS) in ensuring the delivery of high quality health care across the country, especially in light of the current COVID-19 public health emergency. The impact of the COVID19 pandemic cannot be overstated as the disease continues to wreak havoc on our health care system and our nation, and has required unprecedented action from of all facets of society to meet the moment - a moment that appears will likely stretch well into 2021. To that end, I think more can and should be done to support hospitals during this trying time. In particular, I recommend that CMS suspend proposals that potentially negatively impact the ability for hospitals to financially weather the pandemic, in this case three distinct cuts - to payments for drugs purchased through the 340B Program, to grandfathered off-campus clinics ("siteneutral payment"), and to high-wage index hospitals - which on their own and taken together place a disproportionate financial burden on safety-net providers. In addition, CMS should go even further with its updates to the Overall Hospital Quality Star Rating in order to fully account for the socioeconomic differences of hospitals' patient populations.

I urge you to consider these recommendations, described in detail below, in finalizing the CY 2021 OPPS proposed rule.

1. CMS should support safety-net providers and preserve the 340B Drug Pricing Program

In previous years' rulemaking, beginning with CY 2018, CMS finalized policies that paid hospitals for drugs purchased under the 340B Drug Pricing Program ("340B Program") and furnished to patients in the outpatient setting at average sales price (ASP) minus 22.5 percent, as opposed to the statutory rate of ASP plus 6 percent, a net reduction of 28.5 percent. For CY 2021, CMS has proposed to reduce reimbursement even further to ASP minus 28.7 percent, a net reduction of 34.7 percent. Alternatively, CMS is considering to continue reimbursement at the rate of ASP minus 22.5 percent. CMS claims it is justified in using the proposed lower reimbursement rate based on data it received via its Hospital Survey for Specified Covered Outpatient Drugs Average Acquisition Cost administered April 24 to May 15, 2020.

The Boston Medical Center Health System pharmacy operations encompass our inpatient pharmacy, two outpatient pharmacies, one retail store, our integrated specialty operations, a mail order facility, and health plan. BMC has participated in the 340B Program since its inception in 1992. In 2019, we filled over one million prescriptions - over 70% of which were filled through the 340B program. The 340B Program serves as a vital lifeline for our health system and patients as it enables us "to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services," in line with the program's stated purpose, by both increasing access to medications and enhancing our pharmacy program, as well as offsetting the revenue deficits we experience because of our high proportion of Medicaid and uninsured patients./1

In under-reimbursing 340B hospitals, CMS potentially puts the entire 340B program and it benefits for patients at risk. Additionally, the payment cut to 340B hospitals is currently the subject of litigation led by the American Hospital Association, who have argued that CMS does not have the authority to make or continue the proposed cuts./2

CMS should not finalize the continuation of 340B cuts as a part of the CY 2021 OPPS rule, and should instead restore the statutory rate of ASP plus 6 percent for drugs acquired under the 340B Program. We strongly urge CMS to work to implement drug pricing reforms that address the high prices set by drug manufacturers, rather than reduce the scope of the 340B Program that allows BMC and other safety-net hospitals to provide needed services to disadvantaged communities.

2. Site-neutral payments undervalue the scope of services hospitals provide to patients

Through the CY 2021 OPPS proposed rule, CMS aims to continue paying for outpatient office visits - Healthcare Common Procedure Coding System (HCPCS) code G0463 - at excepted, off-campus provider-based departments (PBDs) at 40% of the OPPS payment rate in order to align payments with the Physician Fee Schedule (PFS) rate, i.e. make payment "site-neutral" or independent of the site of care. In doing so, CMS is attempting to extend outpatient payment cuts to grandfathered facilities contrary to Section 603 of the Bipartisan Budget Act (BBA) of 2015, which explicitly restricts site neutral cuts to new (non-excepted) off-campus PBDs.

Patients who receive care at BMC's off-campus PBDs benefit from the affiliation with a major hospital and academic medical center, as we provide standby emergency department capacity, access to the most advanced, specialized treatment and technology available, and coordinated care through our integrated health system. Site-neutral cuts do not adequately account for the broad scope of services we provide. Unintentionally, they may also have a disproportionate impact on care for low-income seniors, especially those dually eligible for Medicaid who are much more expensive to treat than the average patient given their high medical and social complexities. In addition to being bad policy, the site-neutral payment cut is currently the subject of litigation led by the American Hospital Association, who argue that CMS does not have the statutory authority per Section 603 of the BBA to make or continue the proposed cuts to provider reimbursement at excepted, off-campus PBDs./3

For the above reasons, CMS should not finalize the continuation of site-neutral cuts as a part of the CY 2021 OPPS rule, and should instead restore the original, higher payment rates for off-campus PBDs.

3. CMS should not under-reimburse high-wage hospitals to boost low-wage hospitals

In order to align with corresponding rulemaking for the Inpatient Prospective Payment System (IPPS), CMS is proposing for a second consecutive year to artificially inflate the Medicare OPPS wage index - which adjusts payment to hospitals to account for the local cost of labor relative to the national average - for hospitals in the lowest quartile of hospitals (i.e. "low-wage hospitals"). The proposal again assigns the cost of increasing the wage index for low-wage hospitals to be borne by all hospitals via an adjustment to the standardized amounts. CMS limited wage index reductions to a maximum of 5% in the first year (CY 2020), and proposes to retain the 5% cap for CY 2021, while in succeeding years there would be no such cap on wage index reductions. This redistribution of Medicare funds from high-wage, mostly urban hospitals to low-wage, mostly rural hospitals is counter to the purpose of a wage index and creates an unjustified cut to hospitals in high-wage areas.

With a CY 2019 wage index value of 1.3545, Boston Medical Center ranked among the top quartile of wage index values (Note: at the time the 75th percentile wage index value was 1.0351). Under the CY 2020 OPPS final rule, our CY 2020 wage index value fell to 1.2868, which equated to the maximum allotted decrease of 5% in year one. Based on the proposal for CY 2021, we anticipate that our wage index value would fall further still to 1.2730. With the vast majority of our staff unionized, we have very little control over our labor costs and cannot absorb significant cuts to services without impacting patient care.

While supporting low-wage and rural hospitals is a desirable goal, it is counterproductive to CMS's larger goals to force high-wage, mostly urban hospitals to bear the cost. As a safety-net hospital, BMC faces unique challenges in caring for a medically and socially complex patient population, not the least of which is managing to provide high quality care under the fiscal constraints that accompany a high public payer case mix and high levels of uncompensated care. As a result, BMC regularly operates on lower margins relative to the rest of the hospital industry, and in most years is fortunate to break even as a system. The impacts of COVID-19 on BMC, which has treated a disproportionate share of the COVID-19 burden in our region, have made our financial outlook going forward all the more dire.

CMS should be bolstering support for safety-net hospitals at this critical juncture, not taking it away. I encourage CMS to delay implementation of the wage index proposal during the COVID19 public health emergency and seek out alternative ways to increase support for providers, including low-wage hospitals, without harming other providers in the process.

4. Despite improvements, the proposed updated Hospital Star Rating methodology still disadvantages hospitals that treat a disproportionate share of low-income patients

Updates to the Overall Hospital Quality Star Rating ("Hospital Star Rating") included in the CY 2021 OPPS Proposed Rule, while improving upon the current methodology, fall short of creating a fair standard by which to measure and compare the performance of hospitals. In particular, even with the proposed changes in place, the Hospital Star Rating is likely to continue to disadvantage hospitals like BMC who treat a high proportion of low-income patients by not sufficiently adjusting for social risk factors that affect care outcomes, like homelessness, food insecurity, and other structural issues related to poverty. In proposing to stratify the readmissions group scores by each hospital's proportion of patients dually eligible for Medicare and Medicaid, like was done with the Hospital Readmissions Reduction Program (HRRP), CMS only partially addresses this concern. Instead of peer grouping, we recommend risk adjusting based on hospital dual eligibility proportion as a continuous variable in order to more effectively capture the variability among hospitals under this metric, which has a right-skewed, bell-shaped distribution curve (i.e. non-linear) - see Figure 1. According to the FY 2021 IPPS Final Rule, BMC has a dual eligibility proportion of 0.6488, which falls in the 97th percentile of hospitals, but is in the same quintile of hospitals with dual eligibility proportions as low as 0.3074, showing that within group comparisons are not like-to-like - see Figure 2. An area where peer grouping could be useful, however, is in comparing hospitals across all measures by type (e.g. academic, community, specialty, etc.) and size, which would be preferable to the proposed application of peer grouping based on number of measure groups.

I appreciate the opportunity to provide comments on this proposed rule. If you have questions, please contact Melissa Shannon, Vice President for Government Affairs at 617-638-6732 or [email protected].

View figures at: https://www.regulations.gov/contentStreamer?documentId=CMS-2020-0090-0982&attachmentNumber=1&contentType=pdf

Sincerely,

Kate Walsh

President & CEO

Boston Medical Center

* * *

Footnotes:

1/ Health Resources & Services Administration (HRSA) cites language from a House Energy and Commerce Committee report on legislation that eventually became section 340B of the Public Health Service Act (U.S. House of Representatives 1992).

2/ The American Hospital Association et al. v. Azar (United States Court of Appeals for the D.C. Circuit) (Case #195048) (Sept. 14, 2020). Retrieved at: https://www.aha.org/system/files/media/file/2020/09/hospital-groups-petitionforrehearing-340b-payment-reductions-9-14-20.pdf

3/ The American Hospital Association et al. v. Azar (United States Court of Appeals for the D.C. Circuit) (Case #195352) (Aug. 31, 2020). Retrieved at: https://www.aha.org/system/files/media/file/2020/08/hospital-groups-petitionforrehearing-neutral-payment-policy-8-31-20.pdf.

* * *

The proposed rule can be viewed at: https://www.regulations.gov/document?D=CMS-2020-0090-0003

TARGETED NEWS SERVICE (founded 2004) features non-partisan 'edited journalism' news briefs and information for news organizations, public policy groups and individuals; as well as 'gathered' public policy information, including news releases, reports, speeches. For more information contact MYRON STRUCK, editor, [email protected], Springfield, Virginia; 703/304-1897; https://targetednews.com