Health Headlines – March 27, 2023

HHS Announces Major Reforms in Organ Procurement and Transplantation Network Modernization Initiative

On March 22, 2023, the Health Resources and Services Administration (HRSA), an HHS subagency, announced major reforms for the nation’s organ transplant system. Chief among the reforms is to increase competition and accountability for the federal contract to manage the Organ Procurement Transplant Network (OPTN)—which has been held by the same private non-profit organization, United Network for Organ Sharing (UNOS), for thirty-seven years. 

As background, the OPTN was established by the National Organ Transplant Act (NOTA) in 1984 for the purpose of coordinating and operating the nation’s organ procurement, allocation, and transplantation system with the aim to increase access to donor organs for patients with end-stage organ failure. NOTA requires the OPTN to operate a national waiting list of individuals needing transplants to be matched with organs from living and deceased donors. The OPTN is required to have a Board of Directors responsible for tasks including creating organ allocation policies, assisting with donor matching, increasing the organ supply, and adopting quality standards, just to name a few. UNOS was awarded the initial OPTN contract award in 1986 to develop the requirements for the operation of the OPTN, and has served as the OPTN contractor ever since.

The last several years have seen increased scrutiny on the OPTN.  For instance, the OPTN changed its scheme for allocating kidneys in 2018, which was met with legal challenge by hospitals. In 2019, the President issued an Executive Order calling for modernization of the organ recovery and transplant system. In 2022, the Senate Finance Committee released a report critical of OPTN’s performance and held an oversight hearing into UNOS operations. 

HRSA’s Organ Transplantation Network Modernization Initiative calls for actions that, according to the agency, aim to improve accountability and transparency in the OPTN. These actions include:

• Data dashboards detailing individual transplant center and organ procurement organization data on organ retrieval, waitlist outcomes, and transplants, and demographic data on organ donation and transplant;
• Modernization of the OPTN IT system in line with industry-leading standards, improving OPTN governance, and increasing transparency and accountability in the system to better serve the needs of patients and families;
• HRSA’s intent to issue contract solicitations for multiple awards to manage the OPTN in order to foster competition and ensure OPTN Board of Directors’ independence;
• The President’s Fiscal Year 2024 Budget proposal to more than double investment in organ procurement and transplantation with a $36 million increase over Fiscal Year 2023 for a total of $67 million; and,
• A request to Congress included in the Fiscal Year 2024 Budget to update the nearly 40-year-old National Organ Transplant Act to take actions such as:
• Removing the appropriations cap on the OPTN contract(s) to allow HRSA to better allocate resources and,
• Expanding the pool of eligible contract entities to enhance performance and innovation through increased competition.

To kick off its reforms, HRSA launched an initial data set of organ donation and transplantation data that it plans to update regularly. While the new HRSA dashboard is welcome, the data has been available on another dashboard run by the Scientific Registry of Transplant Recipients (SRTR) and even data displayed by UNOS itself. Stakeholder engagement efforts are scheduled to occur in late spring. Finally, HRSA intends to issue contract solicitations for multiple awards to manage and improve the OPTN as part of the “first phase” of the OPTN Modernization Initiative, but has not yet identified a timeline for those solicitations.

HRSA’s announcement is available here. 

Reporter Michael L. LaBattaglia, Washington, D.C., +1 202 626 5579, mlabattaglia@kslaw.com.

Hospice Care Saves Medicare Upwards of $3.5B Annually, According to Report

A joint report published on March 22, 2023 found the total costs of care for Medicare beneficiaries who used hospice was 3.1 percent lower than those who did not, and that earlier enrollment in hospice and longer lengths of stay (LOS) likely reduce overall Medicare spending. The study, conducted by NORC at the University of Chicago, analyzed enrollment and administrative claims data for Medicare patients covered by Medicare Advantage and traditional Medicare. 

Due to increases in Medicare’s hospice benefit enrollment and spending from 2015 to 2019, the Medicare Payment Advisory Commission (MedPAC) recommended that FY 2023 Medicare base payment rates for hospice remain at 2022 levels, and that the hospice aggregate cap should be wage-adjusted and reduced by 20%. The study, which was funded by the National Association for Home Care & Hospice (NAHC) and the National Hospice and Palliative Care Organization (NHPCO), analyzed the value of the Medicare hospice benefit for patients with terminal conditions, their families, and caregivers, as well as its impact on Medicare spending.

NORC compared the utilization of health services and costs of care for the last 12 months of life of more than 500,000 Medicare beneficiaries who died in 2019 and had a hospice stay immediately prior to death to more than 457,000 Medicare decedents who had similar risk profiles but did not have a hospice stay. Differences in chronic health status, end-of-life diagnoses, and demographics between the two populations were addressed with a propensity weight model.

Key findings include:

• In the last year of life, the total costs of care for Medicare beneficiaries who used hospice was 3.1 percent lower than the adjusted spending of beneficiaries who did not use hospice. This reduction in adjusted Medicare spending translates to an estimated $3.5 billion less in Medicare outlays for beneficiaries in their last year of life.
• Examination of Medicare spending in policy-relevant LOS groupings (0-14 days, 15-30, 31- 60, etc.) found that total Medicare spending in the 12 months preceding death is consistently lower for beneficiaries with LOS of 15 days or more, compared to beneficiaries who did not use hospice, regardless of disease group.
• Analyses to find the specific day when Medicare spending for non-hospice users equals spending for hospice users—revealed the “break-even” point at day 10. Starting on day 11 (prior to death), hospice users’ Medicare spending is lower compared to spending for non-hospice users. In other words, earlier enrollment in hospice—and longer LOS—may reduce Medicare spending.
• Hospice stays of six months or more add value to Medicare. For those who spent at least 6 months in hospice in the last year of their lives, spending was 11 percent lower than the adjusted spending of beneficiaries who did not use hospice. When sorted by disease group, spending ranged from being 4 percent lower for neurodegenerative disease to 25 percent lower for chronic kidney disease/end stage renal disease.
• Hospice care benefits patients, family members, and caregivers. From increased satisfaction and quality of life, to improved pain control, to reduced physical and emotional distress, and reduced prolonged grief and other emotional distress, hospice offers multiple benefits to patient, families, and caregivers.

While conducting the study, NORC identified several areas that warrant further exploration, including modeling both the proportion of non-hospice user decedents who might be eligible for hospice as well as which short-stay hospice users might be brought into hospice earlier, investigating how MA enrollment impacts the likelihood that enrollees will enter hospice, and exploring what health care utilization, diagnoses, and changing frailty represent for mortality risk and prediction of hospice use.

The full report is available here.

Reporter, Dennis Mkrtchian, Los Angeles, + 1 213 218 4046, dmkrtchian@kslaw.com.

HHS Closely Watching State Medicaid Agencies’ Income Eligibility Checks

In April 2023, Medicaid state agencies will resume conducting Medicaid income eligibility checks, a process that was paused during the COVID-19 pandemic. Resuming the checks on eligibility could result in many procedural denials of Medicaid eligibility and an increased volume in the caseload of redeterminations. During the American Health Law Association conference in Baltimore, MD last week, Jonathan Blum, the Principal Deputy Administrator and Chief Operating Officer of CMS, stated that CMS will “step in and stop” states that do not comply with agency guidance to prevent coverage loss or are unable to properly handle the redeterminations. Blum also indicated that states that do not adhere to federal reporting or eligibility redetermination standards may be subject to corrective action plans.  

King & Spalding Roundtable: Restructuring Takeover – A Crash Course on Hot Topics in Healthcare Restructurings

Please join an experienced cross-panel of our restructuring and healthcare colleagues on April 5, from 1:30 pm – 2:30 pm ET for a review of hot topics in the healthcare restructuring space. Learn the issues that have been key in recent out of court workouts and chapter 11 bankruptcies, as well as other important legal and regulatory developments, and what these could mean for this coming year, including:

• Influence of the proposed rules by the FTC regarding Non-Compete on Financing and Valuations
• Debt Defaults, Forbearance and Impacts on Providers
• Navigating Licensure and other Change of Control provisions
• Bankruptcy Treatment of Medicare and Medicaid Provider Agreements
• Jurisdiction over Medicare and Medicaid Disputes

Please register here. You do not have to be a client to attend, and there is no charge.  For questions, contact Caroline Wendt at cwendt@kslaw.com.

Speakers:  Rick Zall, Matt Warren, and Lindsey Henrikson