Weekly Spotlight

Private Equity: Healthcare’s Past, Present, and Future?

More and more physicians report they are abandoning ownership of their own private practices for employment arrangements. But what does that really mean?

Conventional wisdom would have us believe that physicians’ practices are being bought up by hospitals and integrated health systems. Exponential growth in Medicare Advantage has marked vertical integration with payers as the newest frontier and the biggest opportunity for economic growth. But many only began to understand the impact of private equity on these arrangements during the last few years as Congress worked to eliminate surprise medical billing. In the years since, labor issues, inflation, and perhaps a bit of a surprise billing political hangover put a damper on growth. According to Pitchbook data released this week, private equity deal-making in healthcare services declined an estimated 16.2% year-over-year in 2023.

So where is private equity headed next? According to that same report, the savvy policy wonk will continue to keep an eye on investments in med spa, cardiology, and clinical trial sites. This wonk would still urge caution, however as provider arrangements are still subject to considerable scrutiny. Last year, the FTC sued private equity firm Welsh, Carson, Anderson & Stowe and U.S. Anesthesia Partners, alleging the two parties conspired to create monopolies for anesthesia services. Both Welsh Carson and USAP have tried to get the case thrown out, but the The Federal Trade Commission recently asked the judge to ignore their complaints, calling arguments “unavailing.”

A withering insult from the big, bad FTC… but we all know private equity isn’t going away As Simba says in Disney’s The Lion King, “Danger? HA! I laugh in the face of danger!”

Although major insurance companies like UnitedHealthcare and Humana have edged out private equity firms from investing in Medicare Advantage in the past, they can’t be expected to be held at bay forever. Look no further than these two new reports:

• Private Equity Stakeholder Project: How Private Equity Gets Its Cut From Medicare Advantage
• American Investment Council: A Partner to Health Care- How Private Equity Complements and Strengthens the Health Care Industry

It’s almost as though the answer was in front of us all along.

Other Regulatory News

Centers for Medicare and Medicaid Services (CMS)

Judge tosses PhRMA lawsuit over Medicare power to negotiate drug prices

A federal district judge on Monday granted the Biden administration’s request to dismiss a lawsuit challenging Medicare’s new drug price negotiation program from the drug industry lobbying organization PhRMA. The Judge did not rule on the merits of the case. Rather, the suit was dismissed after one of the plaintiffs, the only party to the lawsuit that resides in the court’s jurisdiction, was removed from the case because it did not have subject matter jurisdiction.

#Drug

Generics Industry to Congress:Fight Price Deflation

In a new report from the Association for Accessible Medicine and the Biosimilars Council titled, “Hatch-Waxman Turns 40. Is it over the Hil? (Or is the Hill Over Hatch-Waxman),” manufacturers of generics and biosimilars are pressing Congress to support policies they say would both benefit them and avert future shortages, like acting on pharmacy benefit manager (PBM) reform and repealing a Medicaid penalty for price increases

#Drug

Hospital claims it was ‘drastically’ overcharged by pharma in a federal drug discount program

Adventist Health System claims pharmaceutical companies overcharged overcharged the federal government and numerous hospitals by hundreds of millions of dollars. The allegations hinge on 340B drug pricing calculations by a handful of big drugmakers — AbbVie, AstraZeneca, Novartis, and Sanofi, and some subsidiaries.

#Drug, #Hospital

New Report Shows Dire Outlook for Rural Hospitals

Chartis released new research indicating that 50% of the nation’s rural hospitals are operating at a loss and 418 are vulnerable to closure.

#Hospital, #Patient, #Provider

CMS Publishes Second Draft Guidance on IRA Prescription Drug “Cap and Smoothing” Plan

CMS is seeking comments from the public on today’s draft part two guidance. Comments are due by March 16, 2024. See also: Fact Sheet / Implementation Timeline

#Patient, #Drug

Medicare Program; Strengthening Oversight of Accrediting Organizations (AOs) and Preventing AO Conflict of Interest, and Related Provisions

This proposed rule would set forth a number of provisions to strengthen the oversight of accrediting organizations (AOs) by addressing conflicts of interest, establishing consistent standards, processes and definitions, and updating the validation and performance standards systems.

#All

2024 CMS HEALTH EQUITY AWARD – Call for Nominations

CMS announced the Call for Nominations for the 2024 CMS Health Equity Award. Nominations are due March 13. The award winner will be recognized at the 2024 CMS Health Equity Conference May 29-30.

#All

New / Updated CMS Resources

Recently Updated: Mapping Medicare Disparities Tool Now Includes Medicare Advantage Data and Many New Features

Mapping Medicare Disparities (MMD) Tool

#All

MLN Connects Newsletter Feb 15, 2024

Contents:

• CMS Roundup (Feb 9, 2024)
  • Policy on Texting of Patient Information and Orders for Hospitals and Critical Access Hospitals
  • Proposed Rule to Strengthen Accrediting Organization Oversight and to Prevent Conflict of Interest
• Marriage and Family Therapists & Mental Health Counselors: New Specialty Codes for Medicare
• Medicare Physician Fee Schedule Database: April Update (See the attachment in the instruction to your Medicare Administrative Contractor (PDF) to learn about the April quarterly changes to the Medicare Physician Fee Schedule Database including New codes, Procedure status changes, Code descriptor revisions
• MLN Matters® Articles
  • ICD-10 & Other Coding Revisions to National Coverage Determinations: July 2024 Update
  • Activation of Validation Edits for Providers with Multiple Service Locations — Revised
• Publications
  • Medicare Preventive Services — Revised

#Provider

Food and Drug Administration (FDA)

New / Updated FDA Resources and Educational Opportunities

Advancing the Use of Complex Innovative Designs in Clinical Trials: From Pilot to Practice

On March 5, 2024, FDA is conducting a public workshop to discuss aspects of complex adaptive, Bayesian, and other novel clinical trial designs. This meeting is being conducted to meet the performance goal of convening a public workshop on complex innovative design (CID) included in the seventh authorization of the Prescription Drug User Fee Act (PDUFA VII).

#All

Charging for Investigational Drugs Under an Investigational New Drug Application: Questions and Answers; Guidance for Industry

FDA

The Food and Drug Administration (FDA or Agency) FDA is announcing final guidance for industry entitled “Charging for Investigational Drugs Under an IND: Questions and Answers.” This guidance addresses frequently asked questions related to the implementation of FDA’s regulation on charging for investigational drugs under an investigational new drug application (IND) for the purpose of either clinical trials or expanded access for treatment use.

#Drug

Enhancing Adoption of Innovative Clinical Trial Approaches

FDA

FDA and the Duke-Margolis Center for Health Policy will convene a hybrid public workshop on March 19 and 20, 2024, to discuss efforts to advance innovation of clinical trial design and conduct. CDER’s portfolio of clinical trial innovation activities are wide ranging and span across drug development programs, therapeutic areas, and scientific disciplines.

#All

FDA Announces Draft Guidance on the Use of Data Monitoring Committees in Clinical Trials

FDA published a draft guidance for industry concerning data monitoring in clinical trials titled, “Use of Data Monitoring Committees in Clinical Trials” to provide recommendations to help sponsors of clinical trials determine (1) when a data monitoring committee (DMC) (also known as a data and safety monitoring board (DSMB) or a data and safety monitoring committee (DSMC) or an independent data monitoring committee (IDMC)) would be useful for clinical trial monitoring and (2) what procedures and practices they should consider to guide their operations.

#All

CDER Issues FY23 Drug Safety Priorities Report

The FDA Center for Drug Evaluation and Research published a new report that highlights key safety-related milestones and accomplishments. The report focuses on programs and initiatives at the core of CDER’s drug safety operations, including the FDA Adverse Event Reporting System and Sentinel System.

#Drug

FDA Hopes Renewed Call For Drug Manufacturing Data Will Stem Shortages

FDA drug officials hope their new final guidance asking manufacturers to report the amounts of drugs they manufactured will give more insight into the drug supply chain and help the agency take action to avoid shortages. The guidance implements requirements of the 2020 Coronavirus Aid, Relief, and Economic Security Act (CARES Act) requiring industry report the amount of all drugs “prepared, propagated, compounded, or processed for commercial distribution.”

#Patient, #Drug

FDA Misses Congressional Deadline to Update Clinical Trial Diversity Guidance

FDA is several weeks late issuing guidance on how and when drug and device makers must submit diversity action plans for clinical trial research, Stat Regulatory Focus reports. A law passed by Congress in December 2022, requires drug and device makers to submit plans to the FDA outlining how they would enroll a diverse group of trial participants for Phase 3 and other pivotal trials. Those goals must be dis-aggregated by age group, sex, and racial and ethnic demographic characteristics and may include geographic location and socioeconomic status. The law requires FDA to issue or update guidance on the content of the diversity plans within one year.

#Patient, #Drug, #Device

Other News from HHS

Sec. Becerra Promotes a Shift From an Illness-Care System to a Wellness Care System

HHS Sec. Xavier Becerra urged the nation to shift from an “illness-care system” to a “wellness-care system.” He also highlighted the Biden-Harris Administration’s work to increase access to quality, affordable health care, lower health care costs, including the cost of prescription drugs, and protect access to reproductive health care.

#All

Meeting of the National Advisory Council for Healthcare Research and Quality and Call for Nominations

The National Advisory Council for Healthcare Research and Quality (the Council) advises the Secretary of HHS (Secretary) and the Director of the Agency for Healthcare Research and Quality (AHRQ). On Thursday, March 14, 2024, NAC members will meet and receive an update from the AHRQ Director. The agenda will also include updates on the Subcommittee of the National Advisory Council (SNAC) for AHRQ’s Patient Centered Outcomes Research Trust Fund (PCORTF) Investments, the 20th Anniversary of Digital Healthcare, an update on the National Action Alliance to Advance Patient and Workforce Safety, and a discussion on diagnostic safety. The meeting is open to the public.

The Council is also seeking nominations for seven positions on that will come open in November. Seven new members will be appointed to replace seven current members whose terms will expire in November 2024.

#All

Health Resources and Services Administration Takes Historic New Steps to Transform the Organ Transplant System to Better Serve Patients

HRSA is issuing requests for proposals (RFPs) in advance of executing multiple different contract awards. This action will increase competition ensuring patients and their families benefit from best-in-class vendors. HRSA is also taking transformational steps to modernize the critical organ matching technology while increasing transparency and accountability by issuing new data reporting requirements to better address pre-waitlist and organ procurement practices.  This important work on “pre-waitlist” practices will help address inequities in the transplant waitlist process by reducing racial and ethnic variation both in patient referrals and in organ procurement.

#Hospital, #Patient, #Provider, #Payer

FTC, HHS Seek Public Comment on Generic Drug Shortages and Competition Amongst Powerful Middlemen

The Federal Trade Commission and the Department of Health and Human Services seek public comments on whether the practices of two middlemen groups — the group purchasing organizations and drug wholesalers — might contribute to generic drug shortages.

#Patient, #Drug,

Hill Happenings

Senate Democrats push for stronger rules around AI in Medicare Advantage

Stat

Senate Democrats said Medicare should take more urgent and aggressive action to prevent health insurance companies from using artificial intelligence to unlawfully deny medical services. Meanwhile, Congressional AI Caucus Vice Chair Don Beyer (D-Va.) said that bipartisan House leaders have a plan to create an informal AI task force within the month and pass several AI bills in 2024.

CMS recently clarified that Medicare Advantage plans cannot use artificial intelligence and algorithms to deny prior authorization requests, but can use the technology to assist in coverage decisions.

#Payer, #Provider, #Patient

#All

Bucshon Tells AMA to Expect Doc Patch By March

Member of the Republican Doctors Caucus, Congressman Larry Bucshon (R-IN) American Medical Association’s National Advocacy Conference on Tuesday, saying that Congress will likely mitigate pay cuts under the 2024 physician fee schedule by early March, but a long-term doc fix will probably take a few more years,

#Provider

Notable Notes

Heart Valve Disease Awareness Day

Heart Valve Voice is hosting a Heart Valve Disease Awareness Day webinar on Tuesday, February 22nd at 12 pm ET. The webinar aims to address disparities in the treatment of heart valve disease specifically within Black communities. Speakers will also discuss strategies for providers, patients, and advocacy organizations can take to contribute to advancing health equity.

#Device, #Patient, #Hospital, #Provider