/ en Sat, 26 Apr 2025 02:27:17 -0500 Thu, 23 May 24 10:01:43 -0500 /news/blog/2024-05-23-rand-50-health-policy-equivalent-groundhog-day <p>The RAND Corporation recently released the <a href="https://www.rand.org/pubs/research_reports/RRA1144-2.html" target="_blank">fifth iteration</a> of its biannual hospital price report. The AHA has <a href="/news/blog/2022-05-26-blog-rand-40-still-riddled-methodology-flaws-and-incomplete-data" target="_blank">previously highlighted</a> significant flaws with older versions of this report, and this latest iteration not only recycles but doubles down on those serious shortcomings — the health policy equivalent of <em>Groundhog Day.</em></p><p>To start, RAND’s insistence on using Medicare as a benchmark for commercial prices continues to distort and generate artificial eye-popping numbers that grab headlines and generate clicks but don’t tell an accurate story. By using Medicare as a benchmark, RAND continues to promote an inaccurate and inflated impression of what hospitals are getting paid to provide care. <strong>The truth is that in 2022, </strong><a href="/system/files/media/file/2024/01/medicare-significantly-underpays-hospitals-for-cost-of-patient-care-infographic.pdf" target="_blank"><strong>Medicare paid hospitals just 82 cents for every dollar of care received</strong></a><strong>, resulting in nearly $100 billion in underpayments to hospitals.</strong> From 2021 to 2023, general economic inflation went up more than twice as much as Medicare rate increases. More to the point, Medicare pricing isn’t designed to be applied to the privately insured — something the authors themselves admit “may not be appropriate.”</p><p>It’s not just the use of Medicare as a benchmark that is misleading. The notion that the study sample is anything close to representative at the national or state — let alone hospital — level would be laughable if the subject were not so serious. In fact, <strong>RAND’s dataset represents less than 2% of the nation’s spending on hospitals between 2020 and 2022.</strong> It produced price estimates for individual hospitals with as few as 11 inpatient or outpatient claims represented in their analysis. The inpatient prices in RAND’s analysis for the entire state of Hawaii, for example, is based on just 73 inpatient stays over a three-year period. To put this into broader context, in more than 40% of the hospitals included in RAND’s analysis, the total inpatient and outpatient payments that were included represented <em>less than 1%</em> of those hospitals’ total net patient revenues. When you then consider the fact that RAND reveals nothing about which employers chose to participate in the analysis — we have no line of sight into how more or less representative these employers are of the broader population.</p><p>Also, notably absent from RAND’s analysis is discussion of the unique nature of the timeframe focused on in this version — 2020 to 2022. This two-year period includes: a massive drop-off in volume due to many people who chose to delay or avoid health care during the pandemic; multiple waves of COVID-19, which led to large fluctuations of sick patients being treated in hospitals; persistent increases in patient acuity and <a href="/system/files/media/file/2022/12/Issue-Brief-Patients-and-Providers-Faced-with-Increasing-Delays-in-Timely-Discharges.pdf" target="_blank">delays in transfers to post-acute care settings</a>; <a href="/costsofcaring" target="_blank">skyrocketing expenses</a> due to inflation and workforce pressures; and massive profits for commercial insurance companies. None of these historic and influential trends warranted even a mention by RAND.</p><p>Another convenient omission from RAND’s analysis is any discussion of the role commercial insurers and third-party administrators play in driving up costs for employers — such as the issues highlighted by the recent <a href="https://www.nytimes.com/2024/04/07/us/health-insurance-medical-bills-takeaways.html" target="_blank">allegations against Multiplan</a>. Whether through convoluted fees passed on to unaware employers, and delays or outright denials of payment to providers for caring for patients, these entities play a significant role in driving up health care costs. Perhaps unsurprisingly, the origin of this report comes from RAND’s continued collaboration with the Employers’ Forum of Indiana, which, despite the folksy name, <a href="https://employersforumindiana.org/about/participants/" target="_blank">boasts membership</a> from a litany of the wealthiest commercial insurers and drug companies in the world.</p><p>Despite these and other flaws, RAND and its collaborators promote this tool as a legitimate mechanism to lower the costs of hospital care. Employers and policymakers should be aware that this tool can’t be relied upon to tell you much more beyond the fact that Medicare prices don’t cover the costs of providing care and are far too low. Giving it credit for anything more risks doing very real harm to hospitals and the patients and communities that rely on them each day. It also does nothing to address the real challenge of rising costs of health care in this country.</p> Thu, 23 May 2024 10:01:43 -0500 COVID-19: Coverage and Reimbursement /guidesreports/2024-05-01-2023-costs-caring <div class="container"><div class="row"><div class="col-md-8"><h2>The Financial Stability of America’s Hospitals and Health Systems Is at Risk as the Costs of Caring Continue to Rise</h2><h3>April 2023</h3></div><div class="col-md-4"><div><a class="btn btn-wide btn-primary" href="/system/files/media/file/2023/04/Cost-of-Caring-2023-The-Financial-Stability-of-Americas-Hospitals-and-Health-Systems-Is-at-Risk.pdf" target="_blank" title="Click here to download the Massive Growth in Expenses and Rising Inflation Fuel Continued Financial Challenges for America’s Hospitals and Health Systems report PDF.">Download the Report PDF</a></div><div class="external-link spacer"><a class="btn btn-wide btn-primary" href="/system/files/media/file/2023/04/Cost-of-Caring-2023-The-Financial-Stability-of-Americas-Hospitals-and-Health-Systems-Is-at-Risk-One-Pager.pdf" target="_blank" title="Click here to download the Massive Growth in Expenses and Rising Inflation Fuel Continued Financial Challenges for America’s Hospitals and Health Systems one-page overview PDF.">Download One-Page Overview PDF</a></div></div></div><div class="row"><div class="col-md-8"><p>After three years of unprecedented challenges and caring for millions of patients, including over 6 million COVID-19 patients, America’s hospitals and health systems are facing a new existential challenge — sustained and significant increases in the costs required to care for patients and communities putting their financial stability at risk.</p><p><strong>A confluence of several factors from historic inflation driving up the cost of medical supplies and equipment, to critical workforce shortages forcing hospitals to rely heavily on more expensive contract labor, led to 2022 being the most financially challenging year for hospitals since the pandemic began. Moreover, sustained demand for hospital care with patients coming to the hospital sicker and staying longer has exacerbated these challenges.</strong></p><p id="figure1"><img src="/sites/default/files/inline-images/Figure-1-Cumulative-Hospital-Expense-Growth-Is-More-Than-Double.png" data-entity-uuid="9a61fc19-9117-48c7-836b-f68e4825502a" data-entity-type="file" alt="Figure 1. Cumulative Hospital Expense Growth Is More Than Double the Cumulative Increases in Medicare IPPS Reimbursement, 2019–2022. Hospital Expense Growth: 17.5%. Medicare IPPS Reimbursement: 7.5%. Source: FY 2020–2022 IPPS Final Rule." width="50%" height="50%" class="align-right">These challenges have been particularly financially devastating for hospitals and health systems because they come on top of two years of battling the COVID-19 pandemic. Hospitals and health systems have been on the front lines delivering care to patients, acting as de facto public health agencies, and incurring significant increases in costs from a range of inputs, including labor, drugs, supplies and administrative activities associated with burdensome billing and insurance tasks. In addition, as many individuals deferred care during the pandemic, hospitals saw a dramatic rise in patient acuity. At the same time, workforce shortages across the health care continuum have left hospitals unable to discharge patients to other care settings (e.g., skilled nursing facilities) creating patient bottlenecks with hospital beds occupied without any reimbursement.</p><p>These unfortunate realities have resulted in a 17.5% increase in overall hospital expenses between 2019 and 2022, according to data from Syntellis Performance Solutions, a health care data and consulting firm. Further exacerbating the situation is the fact that the staggering expense increases have been met with woefully inadequate increases in government reimbursement. Specifically, hospital expense increases between 2019 and 2022 are more than double the increases in Medicare reimbursement for inpatient care during that same time (See <a href="#figure1">Figure 1</a>). Because of this, margins have remained consistently negative, according to Kaufman Hall’s Operating Margin Index throughout 2022 (See <a href="#figure2">Figure 2</a>). In fact, over half of hospitals ended 2022 operating at a financial loss — an unsustainable situation for any organization in any sector, let alone hospitals. So far, that trend has continued into 2023 with negative median operating margins in January and February. According to a recent analysis, the first quarter of 2023 saw the highest number of bond defaults among hospitals in over a decade.<a href="#fn1"><sup>1</sup></a> This also is one of the primary reasons that some hospitals, especially rural hospitals, have been forced to close their doors. Between 2010 and 2022, 143 rural hospitals closed — 19 of which occurred in 2020 alone.<a href="#fn2"><sup>2</sup></a><sup>,</sup><a href="#fn3"><sup>3</sup></a> Finally, despite these cost increases, hospital prices have grown modestly. In fact, in 2022, growth in general inflation (8%) was more than double the growth in hospital prices (2.9%).</p><p>This report will examine the magnitude of cost increases over the last year, and the impact these increases have had on the financial stability of the hospital field.</p><p id="figure2"><img src="/sites/default/files/inline-images/Figure-2-Kaufman-Hall-Operating-Index-YTD-by-Month.png" data-entity-uuid="55165081-b4eb-4e04-8a1c-50d909ff2763" data-entity-type="file" alt="Figure 2. Kaufman Hall Operating Index YTD by Month. January 2022: -3.4%. February 2022: -3.6%. March 2022: -2.1%. April 2022: -2.4%. May 2022: -1.9%. June 2022: -0.7%. July 2022: -1.1%. August 2022: -0.6%. September 2022: -0.4%. October 2022: -0.6%. November 2022: -0.6%. December 2022: -0.6%. January 2023: -0.8%. February 2023: -1.1%." width="1288" height="592"></p><h2>Labor Expenses</h2><div class="row"><div class="col-md-5"><p>Beginning in early 2022, the hospital field's existing workforce shortages were exacerbated with increased patient demand for hospital care due to a combination of sustained COVID-19 surges, a new virulent disease affecting primarily pediatric patients called respiratory syncytial virus (RSV), and deferred care from the early days of the pandemic. To quickly meet this demand, hospitals were increasingly forced to turn to health care staffing agencies to fill necessary gaps, especially for bedside nursing and other critical allied health professionals such as respiratory and imaging technicians.</p></div><div class="col-md-7"><blockquote><h4>Labor has been really the primary driver of our increased expenses. We've seen a 17% increase in our nursing costs, for instance, during COVID, mainly because of many nurses leaving the field and the workforce. <em>— President and CEO of a health system in the Northeast</em></h4></blockquote></div></div><p>A recent <a href="https://www.syntellis.com/sites/default/files/2023-03/AHA Q2_Feb 2023.pdf" target="_blank" title="Syntellis Hospital Vitals: Financial and Operational Trends — Workforce Pressures Take Their Toll in 2022">report by Syntellis Performance Solutions</a> found that full-time equivalents (FTEs) for hospital contract employees jumped 138.5%. This reliance on temporary contract labor came at a significant expense to hospitals, as health care staffing agencies took advantage of the situation and increased their rates to record high levels. The same report found that the rate hospitals were charged for contract employees increased 56.8% in 2022 compared to pre-pandemic levels. It is for this reason that hospitals’ contract labor expenses increased a staggering 257.9% in 2022 relative to 2019 levels (See <a href="#figure3">Figure 3</a>).</p><p advantage contract figure firms hospital id="figure3><img alt=" labor of shortages take workforce> </p><p>The explosive growth in contract labor expenses in large part fueled the 20.8% increase in overall hospital labor expenses during the same time period. Even after accounting for the fact that patient acuity (as measured by the case mix index) has increased during this period, labor expenses per patient increased 24.7%. <strong>These increases are particularly challenging, because labor on average accounts for about half of a hospital's budget.</strong></p><h2>Non-Labor Expenses</h2><p>The historic rise in inflation has been particularly challenging for hospitals and health systems as it has sparked a significant increase in non-labor expenses. As prices for essential goods such as food and clothing have seen significant price growth, so too have the prices for essential goods for hospitals such as drugs and medical supplies.<a href="#fn4"><sup>4</sup></a> A report by Kaufman Hall estimated that non-labor expenses alone would result in a one-year expense increase of $49 billion for hospitals and health systems.<a href="#fn5"><sup>5</sup></a><sup>,</sup><a href="#fn6"><sup>6</sup></a> In fact, since 2019, non-labor expenses have increased 16.6% on a per patient basis. Below, we focus on three areas of non-labor expenses that have seen tremendous cost growth:</p><ol type="I"><li><a href="#drugexpenses">Drug Expenses</a></li><li><a href="#medicalsupplies">Medical Supplies and Equipment Expenses</a></li><li><a href="#othernonlaborexpenses">Other Non-Labor Expenses such as Purchased Services Expenses</a></li></ol><h3 id="drugexpenses">I. Drug Expenses</h3><p>As hospitals and health systems faced an increasingly challenging environment due to pandemic surges as well as workforce shortages, drug companies took the opportunity to significantly raise the prices of existing drugs as well as introduce new drugs at record prices.<a href="#fn7"><sup>7</sup></a> High drug prices affect both patients directly and hospitals, especially when purchasing provider-administered drugs. In fact, for the first time in history, the median price of a new drug exceeded $200,000 — a staggering figure that implies a double-digit year-over-year price growth (See <a href="#figure4">Figure 4</a>).<a href="#fn8"><sup>8</sup></a><sup>,</sup><a href="#fn9"><sup>9</sup></a> To further contextualize these launch prices, the median new drug launch price is more than quadruple the average price of a new car and more than triple the median annual household salary ($70,784) in the United States, illustrating how unaffordable these drugs are for both providers and their patients.<a href="#fn10"><sup>10</sup></a></p><p id="figure4"><img src="/sites/default/files/inline-images/Figure-4-Launch-Prices-of-Novel-Drugs-Approved-by-FDA-Since-July-2022.png" data-entity-uuid="f7940fa1-700f-4c22-b888-d69553c830fd" data-entity-type="file" alt="Figure 4. Launch Prices of Novel Drugs Approved by FDA Since July 2022. Hemgenix: $3,500,000. Skysone: $3,000,000. Zynteglo: $2,800,000. Xenpozyme: $780,000. Rezlidhia: $386,400. Tecvayli: $375,00. Krazati: $237,000. Lylgobi: $210,006. Tzield: $193,900. Lunsumlo: $180,000. Relyvrio: $158,000. Elahere: $130,500. Sotyktu: $75,000. Briumvi: $59,000. Sunlenca: $42,250. Imjudo: $39,000. Rolvedon: $27,000. $222,003: Median price of new drug. $70,784: Median household income. $45,094: Average cost of new car. Source: Reuters survey of companies that received FDA approval for new drugs in the second half of 2022. Each bottle represents $100,000 in cost. Median household income from Census Bureau for 2021. Average price of new care from Kelley Blue Book new-vehicle average transaction price in September 2022." width="1292" height="792"></p><p>In addition, a report by the Assistant Secretary for Planning & Evaluation (ASPE) at the Department of Health and Human Services (HHS) found that drug companies increased drug prices for 1,216 drugs — many used to treat chronic conditions like cancer and rheumatoid arthritis — by more than the rate of inflation, which was 8.5% between 2021 and 2022. In fact, the average price increase for these drugs was 31.6%, with some drugs experiencing price increases as much as 500%.<a href="#fn11"><sup>11</sup></a> Moreover, recent drug shortages, specifically for certain drugs used to treat cancer, have also fueled further expense growth. It is estimated that drug shortages alone cost hospitals nearly $360 million a year.<a href="#fn12"><sup>12</sup></a></p><div class="row"><div class="col-md-4"><p>Therefore, it is no surprise, that as hospitals face the reality of operating on negative margins, drug companies are enjoying record revenues and profits. For example, some drug companies are experiencing over 200% revenue growth.<a href="#fn13"><sup>13</sup></a></p></div><div class="col-md-8"><blockquote><h4>"In the last year, we've seen double digit increases in pharmaceuticals and medical supplies. Our utility costs are up and certainly our labor costs are up." <em>— CEO of a health system in the South</em></h4></blockquote></div></div><p>For these reasons, high drug prices have been a primary driver of skyrocketing drug costs for hospitals. According to data from Syntellis Performance Solutions, hospital drug expenses per patient have increased 19.7% between 2019 and 2022. Even after accounting for the fact that patients were on average sicker (as measured by the case mix index) in 2022 than in 2019, drug expenses per patient were up over 18%. This suggests that the growth in hospital drug expenses is not primarily due to sicker patients requiring more drugs, rather it is a result of drug companies’ deliberate decisions to increase the prices of their products.</p><h3 id="medicalsupplies">II. Medical Supplies and Equipment</h3><div class="row"><div class="col-md-6"><p>While the demand for patient care has risen, so has the need for medical supplies necessary to deliver patient care and personal protective equipment (PPE) necessary to ensure the safety of both hospital staff and patients. Hospitals rely on a global supply chain for access to these supplies and equipment, and entities across the supply chain have experienced inflationary cost increases. Ongoing supply chain disruptions have led to higher manufacturing costs, packaging costs, and shipping costs, which translate into higher prices for hospitals.<a href="#fn14"><sup>14</sup></a> In fact, the National Academies recently released a report highlighting the ongoing challenges that supply chain disruptions place on providers needing to access medical supplies.<a href="#fn15"><sup>15</sup></a></p></div><div class="col-md-6"><blockquote><h4>"But in other industries like we see in our area, manufacturing, retail, hospitality, you can decide not to fill that order. You can decide to shut your restaurant down for a day. We can't do that in health care." <em>— President and CEO of a health system in the Midwest</em></h4></blockquote></div></div><p>As a direct result, hospital supply expenses per patient increased 18.5% between 2019 and 2022, outpacing increases in inflation by nearly 30%. Particularly alarming is the growth in supply costs needed for care in the emergency department — often the first level of care provided in the hospital. Hospital expenses for emergency services supplies experienced a nearly 33% increase between 2019 and 2022. These include equipment such as ventilators, respirators and other sophisticated equipment that are critical to keeping patients alive in the emergency department. As patient acuity has increased dramatically during this period, the need for these equipment to care for more complex patients also has increased.<a href="#fn16"><sup>16</sup></a> More specifically, as patients stay in the hospital longer requiring more intensive care, the amount of supplies and the type of supplies required to care for those patients become more expensive.<a href="#fn17"><sup>17</sup></a></p><h3 id="othernonlaborexpenses">III. Other Non-Labor Expenses</h3><p id="figure5"><img src="/sites/default/files/inline-images/Figure-5-Percent-Change-in-Selected-Expenses-Per-Patient-between-2019-and-2022.png" data-entity-uuid="7e28c68b-ee01-4134-b00f-d6ff74896077" data-entity-type="file" alt="Figure 5. % Change in Selected Expenses Per Patient between 2019 and 2022. Laboratory Services: 27.1%. Emergency Services: 31.9%." width="50%" height="50%" class="align-right">In addition to hospitals’ costs for drugs and medical supplies and equipment, costs for other areas that help support patient care such as purchased service expenses also have risen precipitously. This, in part, has driven clinical costs higher, making clinical services such as emergency and lab services more expensive to administer.</p><p>Purchased service expenses, which are expenses hospitals incur to create operational efficiencies such as information technology (IT), environmental services and facilities, and food and nutrition services increased 18% between 2019 and 2022. With increased patient demand and inflationary pressures, hospitals have been forced to incur additional purchased service costs as they renew and renegotiate their purchased service contracts. For example, as the cost of food has gone up over the last year, hospitals’ food services costs have grown. Specifically, food and nutrition service expenses per patient grew over 15% between 2019 and 2022.</p><p>Hospitals also have incurred increased costs in particular clinical areas. This is due to a combination of increased patient demand after many patients delayed or avoided care during the pandemic and inflationary cost growth for supplies and equipment needed to provide care. Specifically, compared to 2019 levels, laboratory service expenses per patient were up 27.1% in 2022 and emergency service expenses per patient were up 31.9%.</p><p>With hospitals bearing cost growth in many areas, they have been forced to cut costs elsewhere to stay financially afloat, and in the case of many rural hospitals, simply keep the doors open.</p><h2>Expenses from Burdensome Insurer Policies</h2><p>Notwithstanding labor and non-labor expense increases, commercial health insurer policies like unnecessary prior authorization requirements and improper claim denials continue to add significant burden for hospital staff — diverting staff time from caring for patients and contributing to clinician burnout. These practices add substantial administrative costs to the health care system by slowing down the provision of care, requiring providers to purchase additional IT tools to manage insurer requirements and necessitating the hiring of additional staff solely to manage administrative paperwork.</p><p>Administrative costs constitute as much as 31% of total health care spending — 82% of which can be attributed to billing and insurance.<a href="#fn18"><sup>18</sup></a> In a <a href="/infographics/2022-11-01-survey-commercial-health-insurance-practices-delay-care-increase-costs-infographic">recent survey fielded by the AHA</a>, 84% of hospitals reported the cost of complying with insurer policies is increasing, with 95% reporting increases in time spent seeking prior authorization approval.<a href="#fn19"><sup>19</sup></a> Even though more than half of all prior authorization denials are overturned, commercial health insurers continue to flood hospitals with prior authorization denials to the detriment of both patients and providers. This is especially egregious when prior authorization is required for widely available lifesaving medications with clear clinical indications for use, such as insulin, where the service or treatment protocol are neither new nor have a history of unwarranted variation in utilization. The AHA report also found that 50% of hospitals and health systems have more than $100 million in accounts receivables for claims that are older than six months, which impact hospitals’ cash flow and ability to weather the avalanche of cost increases they have faced. Shockingly, seven in 10 hospitals reported having an outstanding claim from 2016 or older. In addition, 35% of hospitals reported $50 million or more in foregone payments because of denied claims.</p><p id="figure6"><img src="/sites/default/files/inline-images/Figure-6-Reported-Change-in-Insurer-Required-Administrative-Tasks-for-Medical-Services.png" data-entity-uuid="f9d044f0-06a9-496f-ad07-f9354e07cb20" data-entity-type="file" alt="Figure 6. Reported Change in Insurer-Required Adminsitrative Tasks for Medical Services. Increased: 74%. No Change: 13%. Decreased: 2%. Didn't Know: 11%." width="50%" height="50%" class="align-right">A recent survey conducted by Morning Consult on behalf of the AHA found that nearly three-fourths of nurses reported increases in insurer-required administrative tasks for medical services over the last five years. Nearly 9 in 10 nurses reported insurer administrative burden had negatively impacted patient clinical outcomes (See <a href="#figure6">Figure 6</a> on next page).</p><p>Confronted by ever-growing costs, hospitals have been limited in how they can respond to the administrative burden levied by commercial health plans. Over the course of the last several years many hospitals, looking for operational efficiencies to combat rising costs, have been driven to trim down their administrative workforce.<a href="#fn20"><sup>20</sup></a> However, with a narrowing menu of options for hospitals to choose from in responding to insurer administrative expenses, 78% of hospitals report their experience with commercial health insurers is getting worse.</p><h2>Outlook for the Rest of 2023</h2><p>As the public health emergency comes to end on May 11, a number of important waivers and flexibilities also will come to an end immediately, or will sunset at the end of this year.<a href="#fn21"><sup>21</sup></a> The downstream effects of this will be wide-ranging as hospitals will be faced with a set of additional challenges. For example, with the end of the public health emergency, the continuous Medicaid enrollment provision will no longer be in effect starting April 1 meaning that states can begin dis-enrolling current Medicaid beneficiaries from the program that do not meet the state’s Medicaid enrollment criteria. According to the Kaiser Family Foundation, as many as 14 million current Medicaid beneficiaries could lose coverage over the next year.<a href="#fn22"><sup>22</sup></a> Undoubtedly, these coverage losses will drive higher rates of uninsured and underinsured individuals, raising hospitals’ uncompensated care costs and potentially negatively impacting disproportionate share payments as well as 340B program eligibility, both of which allow hospitals to offset some of the expense increases as well as furnish programs and services critical to patients. Further, the ending of regulatory relief through the 20% Medicare inpatient prospective payment system add-on payment for beneficiaries diagnosed with COVID-19 to offset the cost of highly complex care for these patients, will certainly add financial pressure to an already fragile situation for hospitals and health systems.</p><p>The combination of the impacts on hospitals of the ending public health emergency as well as continued expense growth has created an uncertain future for hospitals and health systems. A study by McKinsey on the impact of inflation and other cost pressures for the health care system projected that there would be $98 billion in additional costs between 2022 and 2023 alone, representing an astounding $248 billion increase in costs relative to 2019.<a href="#fn23"><sup>23</sup></a> In fact, their projections suggest that non-labor costs alone could increase by $112 billion by 2027. Therefore, it is no surprise, that credit rating agencies have a negative outlook for the field. For example, Moody’s has projected a negative outlook for the hospital field for 2023 due in large part to inflationary cost pressures and persisting workforce challenges.<a href="#fn24"><sup>24</sup></a></p><h2>Conclusion</h2><p>Hospitals and health systems — and their teams — are committed to providing high-quality care to all patients in every community. This steadfast commitment to caring and advancing health has never been more apparent than during the last three years battling the greatest public health crisis in a century.</p><p>However, the costs of delivering on this commitment to care have grown tremendously. As the data in this report show, 2022 brought an unprecedented set of challenges for hospitals and health systems, which has left the field in a financially unsustainable situation. These challenges are continuing in 2023.</p><p>To address these challenges and ensure hospitals have the ability to continue taking care of the sick and injured, as well as keeping people and communities healthy, congressional support and action are necessary. Among other actions, Congress should:</p><ul><li>enact policies that bolster hospitals and health systems’ efforts to support today’s workforce and ensure a future pipeline of professionals to mitigate longstanding workforce challenges and meet the nation’s increasing demands for care;</li><li>reject efforts to cut any Medicare or Medicaid payments to hospitals and health systems. Medicare and Medicaid significantly underpay the costs of providing care and further cuts could reduce access to care for patients and communities;</li><li>establish a temporary per diem payment to address a backlog in hospital patient discharges due to workforce shortages;</li><li>urge the Centers for Medicare & Medicaid Services to use its “special exceptions and adjustments” authority to make a retrospective adjustment to account for the difference between the market basket update that was implemented for fiscal year (FY) 2022 and what the market basket is currently projected to be for FY 2022; and</li><li>create a special statutory designation and provide additional support for metropolitan anchor hospitals that serve historically marginalized communities.</li></ul><p>As the hospital field maintains its commitment to care in the face of significant challenges, policymakers must step up and help protect the health and well-being of our nation by ensuring America has strong hospitals and health systems.</p><h2>Sources</h2><ol><li id="fn1"><a href="www.beckershospitalreview.com/finance/hospitals-see-most-1st-quarter-defaults-since-2011.html#:~:text=Bonds%20of%20eight%20hospitals%20lapsed,2022%2C%20according%20to%20the%20report." target="_blank">www.beckershospitalreview.com/finance/hospitals-see-most-1st-quarter-defaults-since-2011.html#:~:text=Bonds%20of%20eight%20hospitals%20lapsed,2022%2C%20according%20to%20the%20report.</a></li><li id="fn2"><a href="/2022-09-07-rural-hospital-closures-threaten-access" target="_blank">/2022-09-07-rural-hospital-closures-threaten-access</a></li><li id="fn3"><a href="https://www.shepscenter.unc.edu/programs-projects/rural-health/rural-hospital-closures/" target="_blank">https://www.shepscenter.unc.edu/programs-projects/rural-health/rural-hospital-closures/</a></li><li id="fn4"><a href="https://www.mckinsey.com/industries/healthcare/our-insights/the-gathering-storm-the-transformative-impact-of-inflation-on-the-healthcare-sector" target="_blank">https://www.mckinsey.com/industries/healthcare/our-insights/the-gathering-storm-the-transformative-impact-of-inflation-on-the-healthcare-sector</a></li><li id="fn5"><a href="/guidesreports/2022-09-15-current-state-hospital-finances-fall-2022-update" target="_blank">/guidesreports/2022-09-15-current-state-hospital-finances-fall-2022-update</a></li><li id="fn6"><a href="/system/files/media/file/2022/09/The-Current-State-of-Hospital-Finances-Fall-2022-Update-KaufmanHall.pdf" target="_blank">/system/files/media/file/2022/09/The-Current-State-of-Hospital-Finances-Fall-2022-Update-KaufmanHall.pdf</a></li><li id="fn7"><a href="/fact-sheets/2022-12-05-workforce-shortages-delay-patient-discharges-and-exacerbate-providers-severe-financial-challenges" target="_blank">/fact-sheets/2022-12-05-workforce-shortages-delay-patient-discharges-and-exacerbate-providers-severe-financial-challenges</a></li><li id="fn8"><a href="https://www.reuters.com/business/healthcare-pharmaceuticals/us-new-drug-price-exceeds-200000-median-2022-2023-01-05/#:~:text=The%20median%20annual%20price%20of,2022%2C%20the%20median%20was%20%24222%2C003." target="_blank">https://www.reuters.com/business/healthcare-pharmaceuticals/us-new-drug-price-exceeds-200000-median-2022-2023-01-05/#:~:text=The%20median%20annual%20price%20of,2022%2C%20the%20median%20was%20%24222%2C003.</a></li><li id="fn9"><a href="https://jamanetwork.com/journals/jama/article-abstract/2792986" target="_blank">https://jamanetwork.com/journals/jama/article-abstract/2792986</a></li><li id="fn10"><a href="https://www.census.gov/library/publications/2022/demo/p60-276.html#:~:text=Highlights,and%20Table%20A%2D1)." target="_blank">https://www.census.gov/library/publications/2022/demo/p60-276.html#:~:text=Highlights,and%20Table%20A%2D1).</a></li><li id="fn11"><a href="https://aspe.hhs.gov/index.php/reports/prescription-drug-price-increases" target="_blank">https://aspe.hhs.gov/index.php/reports/prescription-drug-price-increases</a></li><li id="fn12"><a href="https://www.axios.com/2023/03/21/drug-shortages-upend-cancer-treatments" target="_blank">https://www.axios.com/2023/03/21/drug-shortages-upend-cancer-treatments</a></li><li id="fn13"><a href="https://newsroom.vizientinc.com/en-US/releases/new-vizient-survey-finds-drug-shortages-cost-hospitals-just-under-360m-annually-in-labor-expenses" target="_blank">https://newsroom.vizientinc.com/en-US/releases/new-vizient-survey-finds-drug-shortages-cost-hospitals-just-under-360m-annually-in-labor-expenses</a></li><li href="https://www.beckershospitalreview.com/hospital-management-administration/supply-chain-issues-are-here-to-stay-health-leaders-share-predictions-strategies.html" target="_blank"><a href="https://www.beckershospitalreview.com/hospital-management-administration/supply-chain-issues-are-here-to-stay-health-leaders-share-predictions-strategies.html" target="_blank">https://www.beckershospitalreview.com/hospital-management-administration/supply-chain-issues-are-here-to-stay-health-leaders-share-predictions-strategies.html</a></li><li id="fn15"><a href="https://nap.nationalacademies.org/catalog/26420/building-resilience-into-the-nations-medical-product-supply-chains" target="_blank">https://nap.nationalacademies.org/catalog/26420/building-resilience-into-the-nations-medical-product-supply-chains</a></li><li id="fn16"><a href="/system/files/media/file/2022/08/pandemic-driven-deferred-care-has-led-to-increased-patient-acuity-in-americas-hospitals.pdf" target="_blank">/system/files/media/file/2022/08/pandemic-driven-deferred-care-has-led-to-increased-patient-acuity-in-americas-hospitals.pdf</a></li><li id="fn17"><a href="https://www.healthleadersmedia.com/finance/3-questions-kaufman-halls-erik-swanson-healthcare-finance-2023" target="_blank">https://www.healthleadersmedia.com/finance/3-questions-kaufman-halls-erik-swanson-healthcare-finance-2023</a></li><li id="fn18"><a href="https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2022.00241" target="_blank">https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2022.00241</a></li><li id="fn19"><a href="/infographics/2022-11-01-survey-commercial-health-insurance-practices-delay-care-increase-costs-infographic" target="_blank">/infographics/2022-11-01-survey-commercial-health-insurance-practices-delay-care-increase-costs-infographic</a></li><li id="fn20"><a href="https://www.beckershospitalreview.com/strategy/penn-medicine-eliminates-administrative-jobs-in-cost-cutting-move" target="_blank">https://www.beckershospitalreview.com/strategy/penn-medicine-eliminates-administrative-jobs-in-cost-cutting-move</a></li><li id="fn21"><a href="/special-bulletin/2023-02-07-public-health-emergency-end-may-11" target="_blank">/special-bulletin/2023-02-07-public-health-emergency-end-may-11</a></li><li id="fn22"><a href="https://www.kff.org/medicaid/issue-brief/10-things-to-know-about-the-unwinding-of-the-medicaid-continuous-enrollment-provision/" target="_blank">https://www.kff.org/medicaid/issue-brief/10-things-to-know-about-the-unwinding-of-the-medicaid-continuous-enrollment-provision/</a></li><li id="fn23"><a href="https://www.mckinsey.com/industries/healthcare/our-insights/the-gathering-storm-the-transformative-impact-of-inflation-on-the-healthcare-sector" target="_blank">https://www.mckinsey.com/industries/healthcare/our-insights/the-gathering-storm-the-transformative-impact-of-inflation-on-the-healthcare-sector</a></li><li id="fn24"><a href="https://www.moodys.com/research/Moodys-2021-outlook-for-US-not-for-profit-and-public--PBM_1256579" target="_blank">https://www.moodys.com/research/Moodys-2021-outlook-for-US-not-for-profit-and-public--PBM_1256579</a></li></ol></div><div class="col-md-4"><div><a class="btn btn-wide btn-primary" href="/system/files/media/file/2023/04/Cost-of-Caring-Toolkit.docx" target="_blank" title="Click here to download the Cost of Caring Social Media Content Toolkit DOCX.">Download the Social Media Content Toolkit</a></div><div><a class="btn btn-wide btn-primary" href="/press-releases/2023-04-20-new-aha-report-finds-financial-challenges-mount-hospitals-health-systems-putting-access-care-risk" target="_blank" title="Click here to see the New AHA Report Finds Financial Challenges Mount for Hospitals & Health Systems Putting Access to Care at Risk press release.">View the Press Release</a></div><hr><p><a href="/system/files/media/file/2023/04/Cost-of-Caring-2023-The-Financial-Stability-of-Americas-Hospitals-and-Health-Systems-Is-at-Risk.pdf" target="_blank" title="Click here to download The Financial Stability of America’s Hospitals and Health Systems Is at Risk as the Costs of Caring Continue to Rise PDF."><img 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<div class="col-md-8"> <h2>ICD-10-CM and ICD-10-PCS Questions and Answers</h2> <h3>Questions and Answers Provided by the AHA Central Office</h3> <p>The following questions and answers were jointly developed and approved by the ���������� Association’s Central Office on ICD-10-CM/PCS and the American Health Information Management Association.</p> <div class="col-md-12 cc_tabs"> /* reset */ .cc_tabs ul.a-container { margin: 0; padding: 0; list-style: none; } .cc_tabs input[type=checkbox] { display: none; } /* style */ .cc_tabs .a-container { width: 100%; margin: 20px auto; } .cc_tabs .a-container label { display: block; position: relative; cursor: pointer; font-size: 18px; font-weight: bold; padding: 10px 20px; color: #63666a; background-color: #eee; border-bottom: 1px solid #ddd; -webkit-transition: all .2s ease; -moz-transition: all .2s ease; -ms-transition: all .2s ease; -o-transition: all .2s ease; transition: all .2s ease; margin-bottom:15px } .cc_tabs .a-container label:after { 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color: #003087; padding: 10px 16px 10px 20px; width: calc(50% - 30px); border: solid 1px lightgray; outline: none; text-align: center; cursor: pointer; transition: 0.3s; font-size: 20px; float: left; overflow: auto; margin: 0px 15px; -webkit-border-top-left-radius: 15px; -webkit-border-top-right-radius: 15px; -moz-border-radius-topleft: 15px; -moz-border-radius-topright: 15px; border-top-left-radius: 15px; border-top-right-radius: 15px; font-weight: 700; } @media (max-width:452px){ .cc_tabs .tab button{ padding: 10px 5px 10px 5px; width: calc(50% - 4px); font-size: 17px; margin: 0px 2px; } } /* Change background color of buttons on hover */ .cc_tabs .tab button:hover { background-color: #003087; color:#fff } /* Create an active/current "tab button" class */ .cc_tabs .tab button.active { background-color: #003087; color: #ffffff } /* Style the tab content */ .cc_tabs .tab .tabcontent { float: left; padding: 15px 12px; border: 1px solid #ccc; width: 100%; height: auto; } .cc_tabs .tablinks:after { content: '\2610'; color: #777; font-weight: bold; float: right; margin-left: 5px; } .cc_tabs .tablinks.active:after { content: "\2611"; } <div class="tab">ICD-10-CM QuestionsICD-10-PCS Questions</div> <div class="tabcontent" id="ICDCM"> <ul class="a-container"> <li class="a-items"> 1. What is the ICD-10-CM code for COVID-19? (rev. 4/1/2020, 12/11/2020) <div class="a-content"> <p>ICD-10-CM code U07.1, COVID-19, may be used for discharges/date of service on or after April 1, 2020. For more information on this code, click <a href="https://www.cdc.gov/nchs/data/icd/Announcement-New-ICD-code-for-coronavirus-3-18-2020.pdf" target="_blank">here</a>. The code was developed by the World Health Organization (WHO) and is intended to be sequenced first followed by the appropriate codes for associated manifestations when COVID-19 meets the definition of principal or first-listed diagnosis. Specific guidelines for usage are available <a href="https://www.cdc.gov/nchs/data/icd/COVID-19-guidelines-final.pdf" target="_blank">here</a>. For guidance prior to April 1, 2020, please refer to the <a href="https://www.cdc.gov/nchs/data/icd/ICD-10-CM-Official-Coding-Gudance-Interim-Advice-coronavirus-feb-20-2020.pdf" target="_blank">supplement</a> to the ICD-10-CM Official Guidelines for coding encounters related to the COVID-19 coronavirus outbreak.</p> </div> </li> <li class="a-items"> 2. Is the new ICD-10-CM code U07.1, COVID-19 a secondary code? (4/1/2020; revised 12/11/2020) <div class="a-content"> <p>When COVID-19 meets the definition of principal or first-listed diagnosis, code U07.1, COVID-19, should be sequenced first, and followed by the appropriate codes for associated manifestations, except when another guideline requires that certain codes be sequenced first, such as obstetrics, sepsis, or transplant complications. However, if COVID-19 does not meet the definition of principal or first-listed diagnosis (e.g. when it develops after admission), then code U07.1 should be used as a secondary diagnosis.</p> </div> </li> <li class="a-items"> 3. Are there additional new codes to identify other situations specific to COVID-19? For example, codes for exposure to COVID-19, or observation for suspected COVID-19 but where the tests are negative? (3/20/2020; revised 12/11/2020) <div class="a-content"> <p>The Centers for Disease Control and Prevention’s National Center for Health Statistics, the US agency responsible for maintaining ICD-10-CM in the US, is implementing several new ICD-10-CM codes pertaining to COVID-19 on January 1, 2021. See ICD-10-CM FAQ #44 for further details.</p> </div> </li> <li class="a-items"> 4. We have been told that the World Health Organization (WHO) has approved an emergency ICD-10 code of “U07.2 COVID-19, virus not identified.” Is code U07.2 to be implemented in the US too? (3/26/2020) <div class="a-content"> <p>The HIPAA code set standard for diagnosis coding in the US is ICD-10-CM, not ICD-10. As shown in the April 1, 2020 <a href="https://www.cdc.gov/nchs/data/icd/ICD-10-CM-April-1-2020-addenda.pdf" target="_blank">Addenda</a> on the CDC website, the only new code being implemented in the US for COVID-19 is U07.1.</p> </div> </li> <li class="a-items"> 5. How should we code cases related to COVID-19 prior to April 1, 2020, the effective date of ICD-10-CM code U07.1, COVID-19? (4/1/2020) <div class="a-content"> <p>Please refer to the <a href="https://www.cdc.gov/nchs/data/icd/ICD-10-CM-Official-Coding-Gudance-Interim-Advice-coronavirus-feb-20-2020.pdf" target="_blank">supplement</a> to the ICD-10-CM Official Guidelines for coding encounters related to the COVID-19 coronavirus outbreak. After April 1, 2020, refer to the Official Guidelines for Coding and Reporting found <a href="https://www.cdc.gov/nchs/data/icd/COVID-19-guidelines-final.pdf" target="_blank">here</a>.</p> </div> </li> <li class="a-items"> 6. Is the ICD-10-CM code U07.1, COVID-19 retroactive to cases diagnosed before the April 1, 2020 date? (3/20/2020) <div class="a-content"> <p>No, the code is not retroactive. Please refer to the <a href="https://www.cdc.gov/nchs/data/icd/ICD-10-CM-Official-Coding-Gudance-Interim-Advice-coronavirus-feb-20-2020.pdf" target="_blank">supplement</a> to the ICD-10-CM Official Guidelines for coding encounters related to the COVID-19 coronavirus outbreak for guidance for coding of discharges/services provided before April 1, 2020.</p> </div> </li> <li class="a-items"> 7. Is code B97.29, Other coronavirus as the cause of diseases classified elsewhere, limited to the COVID-19 virus? (3/20/2020) <div class="a-content"> <p>No, code B97.29 is not exclusive to the SARS-CoV-2/2019-nCoV virus responsible for the COVID-19 pandemic. The code does not distinguish the more than 30 varieties of coronaviruses, some of which are responsible for the common cold. <strong>Due to the heightened need to uniquely identify COVID-19 until the unique ICD-10-CM code is effective April 1, providers are urged to consider developing facility-specific coding guidelines that limit the assignment of code B97.29 to confirmed COVID-19 cases and preclude the assignment of codes for any other coronaviruses.</strong></p> </div> </li> <li class="a-items"> 8. What is the difference between ICD-10-CM codes B34.2 vs. B97.29? (3/20/2020) <div class="a-content"> <p>Diagnosis code B34.2, Coronavirus infection, unspecified, would in generally not be appropriate for the COVID-19, because the cases have universally been respiratory in nature, so the site of infection would not be “unspecified.” Code B97.29, Other coronavirus as the cause of diseases classified elsewhere, has been designated as interim code to report confirmed cases of COVID-19. Please refer to the <a href="https://www.cdc.gov/nchs/data/icd/ICD-10-CM-Official-Coding-Gudance-Interim-Advice-coronavirus-feb-20-2020.pdf" target="_blank">supplement</a> to the ICD-10-CM Official Guidelines for coding encounters related to the COVID-19 coronavirus outbreak for additional information. <strong>Because code B97.29 is not exclusive to the SARS-CoV-2/2019-nCoV virus responsible for the COVID-19 pandemic, we are urging providers to consider developing facility-specific coding guidelines that limit the assignment of code B97.29 to confirmed COVID-19 cases and preclude the assignment of codes for any other coronaviruses.</strong></p> </div> </li> <li class="a-items"> 9. Does the supplement to the ICD-10-CM Official Guidelines for coding encounters related to the COVID-19 coronavirus outbreak apply to all patient encounter types, i.e., inpatient and outpatient, specifically in relation to the coding of “suspected”, “possible” or “probable” COVID-19? (3/20/2020) <div class="a-content"> <p>Yes, the supplement applies to all patient types. As stated in the <a href="https://www.cdc.gov/nchs/data/icd/ICD-10-CM-Official-Coding-Gudance-Interim-Advice-coronavirus-feb-20-2020.pdf" target="_blank">supplement</a> guidelines, “If the provider documents “suspected”, “possible” or “probable” COVID-19, do not assign code B97.29. Assign a code(s) explaining the reason for encounter (such as fever, or Z20.828, Contact with and (suspected) exposure to other viral and communicable diseases.”</p> </div> </li> <li class="a-items"> 10. The supplement to the ICD-10-CM Official Guidelines for coding encounters related to the COVID-19 coronavirus outbreak refers to coding confirmed cases in a couple of instances, but it does not specify what “confirmation” means similar to language in guidelines found for reporting of HIV, Zika and H1N1. Can you clarify whether the record needs to have a copy of the lab results or what lab tests are approved for confirmation? (3/20/2020) <div class="a-content"> <p>The intent of the guideline is to code only confirmed cases of COVID-19. It is not required that a copy of the confirmatory test be available in the record or documentation of the test result. The provider’s diagnostic statement that the patient has the condition would suffice.</p> </div> </li> <li class="a-items"> 11. Should presumptive positive COVID-19 test results be coded as confirmed? (3/24/2020) <div class="a-content"> <p>Yes, Presumptive positive COVID-19 test results should be coded as confirmed. A presumptive positive test result means an individual has tested positive for the virus at a local or state level, but it has not yet been confirmed by the Centers for Disease Control and Prevention (CDC). CDC confirmation of local and state tests for the COVID-19 virus is no longer required.</p> </div> </li> <li class="a-items"> 12. How should we handle cases related to COVID-19 when the test results aren’t back yet? The supplementary guidance and FAQs are confusing since some times COVID-19 is not “ruled out” during the encounter, since the test results aren’t back yet. (3/24/2020) <div class="a-content"> <p>Due to the heightened need to capture accurate data on positive COVID-19 cases, we recommend that providers consider developing facility-specific coding guidelines to hold back coding of inpatient admissions and outpatient encounters until the test results for COVID-19 testing are available. This advice is limited to cases related to COVID-19.</p> </div> </li> <li class="a-items"> 13. Based on the recently released guidelines for COVID-19 infections, does a provider need to explicitly link the results of the COVID-19 test to the respiratory condition as the cause of the respiratory illness to code it as a confirmed diagnosis of COVID-19? Patients are being seeing in our emergency department and if results are not available at the time of discharge, we are reluctant to query the physicians to go back and document the linkage when the results come back several days later. (4/1/2020) <div class="a-content"> <p>No, the provider does not need to explicitly link the test result to the respiratory condition, the positive test results can be coded as confirmed COVID-19 cases as long as the test result itself is part of the medical record. As stated in the coding <a href="https://www.cdc.gov/nchs/data/icd/COVID-19-guidelines-final.pdf" target="_blank">guidelines</a> for COVID-19 infections that went into effect on April 1, code U07.1 may be assigned based on results of a positive test as well as when COVID-19 is documented by the provider. Please note that this advice is limited to cases related to COVID-19 and not the coding of other laboratory tests. <strong>Due to the heightened need to uniquely identify COVID-19 patients, we recommend that providers consider developing facility-specific coding guidelines to hold back coding of inpatient admissions and outpatient encounters until the test results for COVID-19 testing are available.</strong></p> </div> </li> <li class="a-items"> 14. We are unsure about how to interpret the newly released COVID-19 guidelines in relation to the uncertain diagnosis guideline which refers to diagnoses “documented at the time of discharge” stated as possible, probable, etc. Can we code these cases as confirmed COVID-19 if the test results don’t come back until a few days later and the patient has already been discharged? (4/1/2020) <div class="a-content"> <p>Yes, if a test is performed during the visit or hospitalization, but results come back after discharge positive for COVID-19, then it should be coded as confirmed COVID-19.</p> </div> </li> <li class="a-items"> 15. Since the new guidelines for COVID regarding sepsis just say to refer to the sepsis guideline, is that then saying that sepsis would be sequenced first and then U07.1 for a patient presenting with sepsis due to COVID-19? (4/1/2020; revised 12/11/2020) <div class="a-content"> <p>Whether or not sepsis or U07.1 is assigned as the principal diagnosis depends on the circumstances of admission and whether sepsis meets the definition of principal diagnosis. For example, if a patient is admitted with pneumonia due to COVID-19 which then progresses to viral sepsis (not present on admission), the principal diagnosis is U07.1, COVID-19, followed by the codes for the viral sepsis and viral pneumonia. On the other hand, if a patient is admitted with sepsis due to COVID-19 pneumonia and the sepsis meets the definition of principal diagnosis, then the code for viral sepsis (A41.89) should be assigned as principal diagnosis followed by codes U07.1 and the appropriate viral pneumonia code (J12.89, Other viral pneumonia, for discharges/encounters prior to January 1, 2021, or code J12.82, Pneumonia due to coronavirus disease 2019, for discharges/encounters after January 1, 2021) as secondary diagnoses.</p> </div> </li> <li class="a-items"> 16. (Question #16 was deleted on August 5, 2020. See Questions #38 and #39 for updated advice regarding the coding for encounters for testing for COVID-19 and COVID-19 has not been confirmed.) <div class="a-content"> <p> </p> </div> </li> <li class="a-items"> 17. Please provide guidance on correct coding when the provider has documented COVID-19 as a definitive diagnosis before the test results are available, and the test results come back negative. (4/16/2020) <div class="a-content"> <p>Coding professionals should query the provider if the provider documented COVID-19 before the test results were back and the test results come back negative. Providers should be given the opportunity to reconsider the diagnosis based on the new information.</p> </div> </li> <li class="a-items"> 18. provide guidance on correct coding when the provider has confirmed the documented COVID-19 after the test results come back negative. How should this be coded? (4/16/2020) <div class="a-content"> <p>If the provider still documents and confirms COVID-19 even though the test results are negative, or if the provider documented disagreement with the test results, assign code U07.1, COVID-19. As stated in the Official Guidelines for Coding and Reporting for COVID-19, “Code only a confirmed diagnosis of the 2019 novel coronavirus disease (COVID-19) as documented by the provider . . . the provider’s documentation that the individual has COVID-19 is sufficient.”</p> </div> </li> <li class="a-items"> 19. When a patient who previously had COVID-19 is seen for a follow-up exam and the COVID-19 test is negative, what is best code(s) to capture this scenario? (4/16/2020; revised 12/11/2020) <div class="a-content"> <p>Assign codes Z09, Encounter for follow-up examination after completed treatment for conditions other than malignant neoplasm, and the appropriate personal history code (code Z86.19, Personal history of other infectious and parasitic diseases, for encounters prior to January 1, 2021, or code Z86.16, Personal history of COVID-19, for encounters after January 1, 2021).</p> </div> </li> <li class="a-items"> 20. How should an encounter for COVID-19 antibody testing be coded? (4/28/2020) <div class="a-content"> <p>For an encounter for antibody testing that is not being performed to confirm a current COVID-19 infection, nor is being performed as a follow-up test after resolution of COVID-19, assign Z01.84, Encounter for antibody response examination.</p> </div> </li> <li class="a-items"> 21. If a patient has both aspiration pneumonia and pneumonia due to COVID-19, may code J12.89, Other viral pneumonia, be assigned with code J69.0, Pneumonitis due to inhalation of food and vomit? There is an Excludes1 note at category J12, Viral pneumonia, not elsewhere classified, that excludes pneumonia not otherwise specified (J69.0). (4/28/2020; revised 12/11/2020) <div class="a-content"> <p>Yes, both codes may be assigned, as aspiration pneumonia and pneumonia due to COVID-19 are two separate unrelated conditions with different underlying causes. This scenario meets the exception to the Excludes1 guideline as a circumstance when the two conditions are unrelated to each other.</p> <p>Note that effective January 1, 2021, there is a new code, J12.82, for pneumonia due to coronavirus disease 2019.</p> </div> </li> <li class="a-items"> 22. For a patient who has HIV/AIDS and is diagnosed with COVID-19, the guidelines don’t assume a relationship between COVID-19 and HIV, so does the provider need to link the two conditions for coding? (4/28/2020) <div class="a-content"> <p>Any immunocompromised patient (which would include HIV patients) is at higher risk for becoming infected with COVID-19, but HIV does not cause COVID-19. Code both conditions separately, with sequencing depending on the circumstances of admission – just like a patient suffering from diabetes or any other chronic condition that puts them at higher risk for the COVID-19 infection.</p> </div> </li> <li class="a-items"> 23. Is there a timeframe for considering the COVID-19 as history of, or current? For example, if a patient is documented as having had COVID-19 four weeks ago and during the current encounter the patient is documented to no longer have COVID-19, do we use the personal history code? (4/28/2020; revised 12/11/2020) <div class="a-content"> <p>There is no specific timeframe for when a personal history code is assigned. If the provider documents that the patient no longer has COVID-19, assign the appropriate personal history code (code Z86.19, Personal history of other infectious and parasitic diseases, for discharges/encounters prior to January 1, 2021, or code Z86.16, Personal history of COVID-19, for discharges/encounters after January 1, 2021).</p> </div> </li> <li class="a-items"> 24. When a patient is diagnosed with COVID-19, we understand that signs and symptoms are not manifestations and would not be separately coded. We also understand that Guideline I.C.18.b. states that “signs or symptoms that are associated routinely with a disease process should not be assigned as additional codes, unless otherwise instructed by the classification.” When a patient diagnosed with COVID-19 presents with both respiratory signs/symptoms (e.g. shortness of breath, cough) and non-respiratory signs/symptoms (e.g. gastrointestinal problems, dermatologic or venous sufficiency issues), may the non-respiratory signs/symptoms/conditions be coded separately since they are not routinely associated with COVID-19? (4/28/2020; revised 8/25/2021) <div class="a-content"> <p>People infected with COVID-19 may vary from being asymptomatic to having a range of symptoms and severity. Therefore, for coding purposes, signs and symptoms associated with COVID-19 may be coded separately, unless the signs or symptoms are routinely associated with a manifestation. For example, cough would not be coded separately if the patient has pneumonia due to COVID-19, as cough is a symptom of pneumonia. The additional coding of signs or symptoms not explained by the manifestations would provide additional information on the severity of the disease. <s>Because COVID-19 is primarily a respiratory condition, any other signs/symptoms would be coded separately unless another definitive diagnosis has been established for the other signs or symptoms. This is supported by Guideline IC.18.b, “Codes for signs and symptoms may be reported in addition to a related definitive diagnosis when the sign or symptom is not routinely associated with that diagnosis.”</s></p> </div> </li> <li class="a-items"> 25. How should we code neonates/newborns that test positive for COVID-19? (5/26/2020) <div class="a-content"> <p>When coding the birth episode in a newborn record, the appropriate code from category Z38, Liveborn infants according to place of birth and type of delivery, should be assigned as the principal diagnosis. For a newborn that tests positive for COVID-19, assign code U07.1, COVID-19, and the appropriate codes for associated manifestation(s) in neonates/newborns in the absence of documentation indicating a specific type of transmission. For a newborn that tests positive for COVID-19 and the provider documents the condition was contracted in utero or during the birth process, assign codes P35.8, Other congenital viral diseases, and U07.1, COVID-19.</p> </div> </li> <li class="a-items"> 26. What is the correct sequencing for a patient who is status post lung transplant admitted for management of respiratory manifestations of COVID-19? (6/4/2020) <div class="a-content"> <p>Assign code T86.812, Lung transplant infection, as the principal or first-listed diagnosis, followed by code U07.1, COVID-19. This sequencing is supported by the Tabular List note at code T86.812 to “use additional code to specify infection.” The ICD-10-CM Official Guidelines for Coding and Reporting, Section I.C.19.g.3.a. state that “a transplant complication code is only assigned if the complication affects the function of the transplanted organ.” The COVID-19 infection has affected the function of the transplanted lung.</p> </div> </li> <li class="a-items"> 27. A patient was treated for pneumonia and pneumothorax due to COVID-19 and discharged from the hospital. Later the same day, the patient presented to the emergency department with pneumothorax and was readmitted due to increasing shortness of breath and for pneumothorax evacuation. Chest tube was inserted, the patient improved and was discharged. How should the readmission be coded? (7/22/2020) <div class="a-content"> <p>Assign code U07.1, COVID-19, as the principal diagnosis, and code J93.83, Other pneumothorax, as a secondary diagnosis. Since the pneumothorax due to COVID-19 present on the first admission has not resolved, this appears to be ongoing treatment for a COVID-19 manifestation.</p> <p>If the documentation is not clear regarding whether the physician considers a condition to be an acute manifestation of a current COVID-19 infection vs. a residual effect from a previous COVID-19 infection, query the provider. As stated in the Official Guidelines for Coding and Reporting, the provider’s documentation that the individual has COVID-19 is sufficient for coding purposes.</p> </div> </li> <li class="a-items"> 28. A patient was hospitalized a few weeks ago for pneumonia due to COVID-19. The patient now presents to the emergency department with shortness of breath and is admitted. The discharge diagnosis for this admission is “pneumothorax due to a previous history of COVID-19.” How should this admission be coded? (7/22/2020; revised 8/25/2021) <div class="a-content"> <p>Assign code J93.83, Other pneumothorax, as the principal diagnosis, followed by code B94.8, Sequelae of other specified infectious and parasitic diseases, for discharges/encounters prior to October 1, 2021, or code U09.9, Post COVID-19 condition, unspecified, for discharges/encounters on or after October 1, 2021. In this case, the patient no longer has COVID-19 and the pneumothorax is a residual effect (sequelae). A personal history code is not appropriate because as stated in guideline I.C.21.c.4), “Personal history codes explain a patient’s past medical condition that no longer exists and is not receiving any treatment, but that has the potential for recurrence, and therefore may require continued monitoring.” The patient is clearly receiving treatment for the residual effect of COVID-19.</p> </div> </li> <li class="a-items"> 29. A patient was diagnosed with COVID-19 infection a week ago and is admitted after developing acute onset shortness of breath associated with upper back pain as well as dizziness without syncope. The patient continued to experience symptoms of COVID-19 infection. Patient was discharged with the diagnosis of pulmonary embolism (PE) and COVID-19. What are the appropriate codes? (7/22/2020) <div class="a-content"> <p>Assign code U07.1, COVID-19, as the principal diagnosis, followed by code I26.99, Other pulmonary embolism without acute cor pulmonale, for a patient diagnosed with pulmonary embolism and COVID-19. The pulmonary embolism is a manifestation of the COVID-19 infection. Per the instructional note under code U07.1, COVID-19 should be sequenced as the principal diagnosis and additional codes should be assigned for the manifestations.</p> </div> </li> <li class="a-items"> 30. A patient is readmitted due to shortness of breath following a previous admission for COVID-19 and associated respiratory failure. The patient no longer has COVID-19. The final diagnosis is “pulmonary embolism due to previous COVID-19.” What are the appropriate codes? (7/22/2020; revised 8/25/2021) <div class="a-content"> <p>Assign code I26.99, Other pulmonary embolism without acute cor pulmonale, as the principal diagnosis, followed by code B94.8, Sequelae of other specified infectious and parasitic diseases, for discharges/encounters prior to October 1, 2021, or code U09.9, Post COVID-19 condition, unspecified, for discharges/encounters on or after October 1, 2021, as a secondary diagnosis.</p> </div> </li> <li class="a-items"> 31. A nursing home patient was hospitalized for COVID-19 and pneumonia. He has completed treatment, but he cannot go back to the nursing home until he tests negative for COVID-19, so he is admitted to the skilled nursing facility (SNF) unit at the hospital until he tests negative and can return to the nursing home where he resides. What code should be assigned for the hospital SNF unit stay? (7/22/2020) <div class="a-content"> <p>Assign code U07.1, COVID-19, as the patient still has COVID-19. Do not assign a code for the pneumonia as the condition has resolved.</p> </div> </li> <li class="a-items"> 32. A patient was diagnosed with "Guillian-Barre Syndrome which is likely a parainfectious complication of recent COVID-19 infection." The patient no longer has COVID-19. How should this be coded? (7/22/2020; revised 8/25/2021) <div class="a-content"> <p>Assign code G61.0, Guillain-Barre syndrome, as the principal diagnosis, followed by code B94.8, Sequelae of other specified infectious and parasitic diseases, for discharges/encounters prior to October 1, 2021, or code U09.9, Post COVID-19 condition, unspecified, for discharges/encounters on or after October 1, 2021.</p> </div> </li> <li class="a-items"> 33. A patient was transferred from a short term acute care hospital to a long term acute care hospital (LTCH) for continued treatment of acute hypoxic respiratory failure due to COVID-19. What are the appropriate codes for the LTCH admission? (7/22/2020) <div class="a-content"> <p>Assign code U07.1, COVID-19, as the principal diagnosis, and code J96.01 Acute respiratory failure with hypoxia, as a secondary diagnosis. Per the instructional note under code U07.1, COVID-19 should be sequenced as the principal diagnosis and additional codes should be assigned for the manifestations.</p> </div> </li> <li class="a-items"> 34. A patient was transferred from an acute care hospital to a rehab facility due to sequelae of a COVID-19 infection, including critical illness myopathy and peroneal palsy in the right lower extremity. The patient no longer has COVID-19. What codes should be assigned? (7/22/2020; revised 8/25/21) <div class="a-content"> <p>Assign codes G72.81, Critical illness myopathy, and G57.31, Lesion of lateral popliteal nerve, right lower limb. Assign code B94.8, Sequelae of other specified infectious and parasitic diseases, for discharges/encounters prior to October 1, 2021, or code U09.9, Post COVID-19 condition, unspecified, for discharges/encounters on or after October 1, 2021, as a secondary diagnosis for the sequelae of a COVID-19 infection.</p> </div> </li> <li class="a-items"> 35. A patient was transferred from an acute care hospital to a rehab facility for deconditioning for generalized debility due to prolonged hospitalization for COVID-19 which has now resolved. What codes should be assigned? (7/22/2020; revised 12/11/2020; revised 8/25/2021) <div class="a-content"> <p>Assign codes for the specific symptoms (such as generalized weakness, debility, etc.). Assign the appropriate personal history code (code Z86.19, Personal history of other infectious and parasitic diseases, for discharges/encounters prior to January 1, 2021, or code Z86.16, Personal history of COVID-19, for discharges/encounters after January 1, 2021) as a secondary diagnosis.</p> <p>Do not assign code B94.8, Sequelae of other specified infectious and parasitic diseases, for discharges/encounters prior to October 1, 2021, or code U09.9, Post COVID-19 condition, unspecified, for discharges/encounters on or after October 1, 2021, as the debility is due to the prolonged hospitalization rather than being a sequela of the COVID-19 infection.</p> </div> </li> <li class="a-items"> 36. What is the ICD-10-CM diagnosis code(s) for a child admitted due to documented multisystem inflammatory syndrome in children (MIS-C) due to COVID-19? (7/23/2020; revised 12/11/2020) <div class="a-content"> <p>Assign code U07.1, COVID-19, as the principal diagnosis, and code M35.8, Other specified systemic involvement of connective tissue, for discharges prior to January 1, 2021, or code M35.81, Multisystem inflammatory syndrome, for discharges after January 1, 2021, as a secondary diagnosis, for MIS-C due to COVID-19. The MIS-C is a manifestation of the COVID-19 infection. Per the instructional note under code U07.1, COVID-19 should be sequenced as the principal diagnosis and additional codes should be assigned for the manifestations.</p> <p>If the documentation is not clear regarding whether the physician considers a condition to be an acute manifestation of a current COVID-19 infection vs. a residual effect from a previous COVID-19 infection, query the provider. As stated in the <em>ICD-10-CM Official Guidelines for Coding and Reporting,</em> the provider’s documentation that the individual has COVID-19 is sufficient for coding purposes.</p> </div> </li> <li class="a-items"> 37. A child diagnosed with COVID-19 several weeks ago is now admitted with multisystem inflammatory syndrome in children (MIS-C) due to COVID-19. The patient no longer has COVID-19. How should this be coded? (7/23/2020; revised 12/11/2020, revised 8/25/2021) <div class="a-content"> <p>Assign code M35.8, Other specified systemic involvement of connective tissue, for discharges prior to January 1, 2021, or code M35.81, Multisystem inflammatory syndrome, for discharges after January 1, 2021, as the principal diagnosis, for the MIS-C, and code B94.8, Sequelae of other specified infectious and parasitic diseases, for discharges/encounters prior to October 1, 2021, or code U09.9, Post COVID-19 condition, unspecified, for discharges/encounters on or after October 1, 2021, as a secondary diagnosis for the sequelae of a COVID-19 infection.</p> <p>If the documentation is not clear regarding whether the physician considers a condition to be an acute manifestation of a current COVID-19 infection vs. a residual effect from a previous COVID-19 infection, query the provider. As stated in the <em>ICD-10-CM Official Guidelines for Coding and Reporting,</em> the provider’s documentation that the individual has COVID-19 is sufficient for coding purposes.</p> </div> </li> <li class="a-items"> 38. How should an encounter for screening for COVID-19 be coded, such as a patient being tested for COVID-19 as part of preoperative testing? Should code Z11.59, Encounter for screening for other viral diseases, or, for encounters after January 1, 2020, new code Z11.52, Encounter for screening for COVID-19, be assigned? (8/5/2020; revised 12/11/2020) <div class="a-content"> <p>During the COVID-19 pandemic, a screening code is generally not appropriate. For encounters for COVID-19 testing, including preoperative testing, code as exposure to COVID-19 (code Z20.828 for encounters prior to January 1, 2021, or code Z20.822, Contact with and (suspected) exposure to COVID-19, for encounters after January 1, 2021). The <em>ICD-10-CM Official Guidelines for Coding and Reporting</em> state that codes in category Z20, Contact with and (suspected) exposure to communicable diseases, are for patients who are suspected to have been exposed to a disease by close personal contact with an infected individual or are in an area where a disease is epidemic.</p> <p>For an encounter for COVID-19 testing being performed as part of preoperative testing, assign code Z01.812, Encounter for preprocedural laboratory examination, as the first-listed diagnosis and assign code Z20.828 or Z20.822 (depending on the encounter date) as an additional diagnosis.</p> <p>Coding guidance will be updated as new information concerning any changes in the pandemic status becomes available.</p> <p>Note: This advice is consistent with the updated <em>ICD-10-CM Official Guidelines for Coding and Reporting</em> that become effective October 1, 2020. During these unprecedented times, AHA and AHIMA concluded it was necessary to clarify the appropriate codes for COVID-19 testing in advance of the effective date for the revised official coding guidelines.</p> </div> </li> <li class="a-items"> 39. What ICD-10-CM code should be assigned for an encounter for COVID-19 testing? (8/5/2020; revised 12/11/2020) <div class="a-content"> <p>For asymptomatic individuals with actual or suspected exposure to COVID-19, assign code Z20.828, Contact with and (suspected) exposure to other viral communicable diseases, for encounters prior to January 1, 2021, and code Z20.822, Contact with and (suspected) exposure to COVID-19, for encounters after January 1, 2021.</p> <p>For symptomatic individuals with actual or suspected exposure to COVID-19 and the infection has been ruled out, or test results are inconclusive or unknown, assign code Z20.828, Contact with and (suspected) exposure to other viral communicable diseases or code Z20.822, Contact with an (suspected) exposure to COVID-19, depending on the encounter date.</p> <p>If COVID-19 is confirmed, assign code U07.1 instead of code Z20.828 or Z20.822.</p> <p>Note: This advice is consistent with the updated <em>ICD-10-CM Official Guidelines for Coding and Reporting</em> that become effective October 1, 2020. During these unprecedented times, AHA and AHIMA concluded it was necessary to clarify the appropriate codes for COVID-19 testing in advance of the effective date for the revised official coding guidelines.</p> </div> </li> <li class="a-items"> 40. What are the appropriate ICD-10-CM code(s) for thrombo-inflammation of COVID-19 associated coagulopathy? (12/11/2020) <div class="a-content"> <p>Assign codes U07.1, COVID-19, and D68.8, Other specified coagulation defects.</p> <p>If disseminated intravascular coagulation (DIC) is documented, assign code D65, Disseminated intravascular coagulation [defibrination syndrome], instead of code D68.8. Not all COVID-19 associated coagulopathy professes to DIC.</p> </div> </li> <li class="a-items"> 41. What are the appropriate ICD-10-CM code(s) for skin failure due to underlying coagulopathy and microvascular changes due to COVID-19? (12/11/2020) <div class="a-content"> <p>Assign codes U07.1, COVID-19, and D68.8, Other specified coagulation defects, and L99, Other disorders of skin and subcutaneous tissue in diseases classified elsewhere.</p> </div> </li> <li class="a-items"> 42. What are the appropriate ICD-10-CM code(s) for "COVID-19 viral shedding?" (12/11/2020) <div class="a-content"> <p>Viral shedding can mean either that the patient has an active (current) COVID-19 infection or a personal history of COVID-19. Therefore, the code assignment depends on the provider documentation.</p> <p>For documentation of viral shedding in a patient with an active COVID-19 infection, assign code U07.1, COVID-19.</p> <p>For documentation of viral shedding in a patient with a personal history of a COVID-19 infection rather than an active infection, assign code Z86.19, Personal history of other infectious and parasitic diseases, for discharges/encounters prior to January 1, 2021, or code Z86.16, Personal history of COVID-19, for discharges/encounters after January 1, 2021.</p> <p>If the documentation is not clear as to whether the patient has an active COVID-19 infection or a personal history, query the provider.</p> </div> </li> <li class="a-items"> 43. The patient presents to the facility with symptoms such as generalized weakness and lack of appetite, and the provide documents a diagnosis of "post COVID-19 syndrome." How should this be coded? (12/11/2020; revised 8/25/2021) <div class="a-content"> <p>[Effective 10/1/21:]</p> <p>For discharges/encounters on or after October 1, 2021, assign codes R53.1, Weakness, R63.0, Anorexia, and U09.9, Post COVID-19 condition, unspecified, for a diagnosis of post COVID-19 syndrome with generalized weakness and lack of appetite. This is supported by the instructional note at code U09.9 to “code first the specific condition related to COVID-19 if known.”</p> <p>[Prior to 10/1/21:]</p> <p>For discharges/encounters prior to October 1, 2021, unless the provider specifically documents that the symptoms are the results of COVID-19, assign code(s) for the specific symptom(s) and a code for personal history of COVID-19. "Post COVID-19 syndrome" indicates temporality, but not that the current symptom(s) or clinical condition(s) are a residual effect (sequelae) of COVID-19. As stated in the <em>ICD-10-CM Official Guidelines for Coding and Reporting,</em> in the absence of Alphabetic Index guidance for coding syndromes, assign codes for the documented manifestations of the syndrome.</p> <p>The appropriate personal history code is Z86.19, Personal history of other infectious and parasitic diseases, for discharges/encounters prior to January 1, 2021, or code Z86.16, Personal history of COVID-19, for discharges/encounters after January 1, 2021.</p> <p>If the provider documents that the symptoms are the result (residual effect) of COVID-19, assign code(s) for the specific symptom(s) and code B94.8, Sequelae of other specified infectious and parasitic diseases. According to the <em>ICD-10-CM Official Guidelines for Coding and Reporting,</em> a sequela is the residual effect (condition produced) after the acute phase of an illness or injury has terminated.</p> </div> </li> <li class="a-items"> 44. Are new ICD-10-CM codes pertaining to COVID-19 going into effect in January 2021? (12/11/2020) <div class="a-content"> <p>In response to the national emergency that was declared concerning the COVID-19 outbreak, the Centers for Disease Control and Prevention's (CDC) National Center for Health Statistics (NCHS) is implementing new ICD-10-CM diagnosis codes, effective January 1, 2021.</p> <p>The new ICD-10-CM codes being implemented on January 1, 2021, are:</p> <p>J12.82 Pneumonia due to coronavirus disease 2019</p> <p>M35.81 Multisystem inflammatory syndrome</p> <p>Z11.52 Encounter for screening for COVID-19</p> <p>Z20.822 Contact with and (suspected) exposure to COVID-19</p> <p>Z86.16 Personal history of COVID-19</p> <p>The January 2021 ICD-10-CM Addenda and updated <em>ICD-10-CM Official Guidelines for Coding and Reporting</em> are available at: <a href="https://www.cdc.gov/nchs/icd/icd10cm.htm" target="_blank">https://www.cdc.gov/nchs/icd/icd10cm.htm</a>.</p> </div> </li> <li class="a-items"> 45. A patient presents to the emergency department with complaints of throat tingling and chest tightness following administration of the COVID-19 vaccine. The provider documented allergic reaction to COVID-19 vaccine. The current ICD-10-CM indexing for allergy to vaccine points to a code for serum reaction. How should this case be coded? (3/1/2021) <div class="a-content"> <p>Assign codes T78.49XA, Other allergy, initial encounter; R07.89, Other chest pain; and R09.89, Other specified symptoms and signs involving the circulatory and respiratory systems. The currently approved COVID-19 vaccines in the United States are not serum based, and therefore code T80.62XA-, Other serum reaction due to vaccination, initial encounter is not appropriate.</p> </div> </li> <li class="a-items"> 46. A patient presents to the emergency department with complaint of malaise following administration of the COVID-19 vaccine. The provider documented adverse effect of COVID-19 vaccine. How should this case be coded? (3/1/2021) <div class="a-content"> <p>Assign codes R53.81, Other malaise; and T50.B95A, Adverse effect of other viral vaccines, initial encounter.</p> </div> </li> <li class="a-items"> 47. A patient presents to the emergency department via ambulance after complaining of hives and swelling, severe breathing problems, and swelling in the throat, following administration of the COVID-19 vaccine. The provider documented anaphylactic reaction to COVID-19 vaccine. The current ICD-10-CM indexing for anaphylactic reaction to immunization points to a code for serum reaction. However, since the COVID-19 vaccine is not serum based, may we use code T80.52? (3/1/2021) <div class="a-content"> <p>Assign code T80.52XA, Anaphylactic reaction due to vaccination, initial encounter, for documented anaphylactic reaction to the COVID-19 vaccine. Although subcategory T80.5, identifies anaphylactic reaction to serum, it is the closest available code to capture this condition.</p> </div> </li> <li class="a-items"> 48. Should normal or expected side effects of the COVID-19 vaccination be coded for patients seeking medical care or for patients in nursing homes, hospitals, etc., when the side effects meet reporting requirements? (3/1/2021) <div class="a-content"> <p>Yes, it would be appropriate to report a code(s) for side effects when the patient requires additional treatment or medical care such as monitoring or treatment for the side effects. Assign the code for the nature of the effect (e.g. fever) followed by code T50.B95A, Adverse effect of other viral vaccines, initial encounter.</p> </div> </li> <li class="a-items"> 49. A patient was COVID-19 positive at a short term acute care hospital where he was being cared for COVID-19 related respiratory problems and completed treatment with Remdesivir and Dexamethasone. After more than a 2 month stay, the patient is now transferred to a long-term care hospital (LTCH) with acute respiratory failure for tracheostomy weaning. At the time of transfer, the patient had been weaned from ventilator to tracheostomy collar at 28%. Diagnosis on admission was history of COVID-19, acute respiratory failure, and tracheostomy dependence. When queried regarding the patient’s COVID-19 status on admission to the LTCH, the provider indicated that the patient was no longer infectious and is being admitted only to treat the residual respiratory failure requiring oxygenation via tracheostomy. May we assign code J96.90 as a principal diagnosis, followed by code Z86.16, Personal history of COVID-19, since the patient no longer has a COVID-19 infection? (3/1/2021; revised 8/25/2021) <div class="a-content"> <p>Query the provider whether “residual respiratory failure” refers to acute on chronic, or chronic respiratory failure. Assign the appropriate respiratory failure code based on the response, followed by code B94.8, Sequelae of other specified infectious and parasitic diseases, for discharges/encounters prior to October 1, 2021, or code U09.9, Post COVID-19 condition, unspecified, for discharges/encounters on or after October 1, 2021, as a secondary diagnosis, for the sequelae of COVID-19 infection, since the patient has been documented as no longer infectious for COVID-19.</p> <p>Although the provider referred to "history of COVID-19," a personal history code is inappropriate in this case. As defined in the ICD-10-CM Official Guidelines for Coding and Reporting, Section IB. "A sequela is the residual effect (condition produced) after the acute phase of an illness or injury has terminated." In addition, Section I. C.21,c,( 4) states "Personal history codes explain a patient's past medical condition that no longer exists and is not receiving any treatment, but that has the potential for recurrence, and therefore may require continued monitoring."</p> </div> </li> <li class="a-items"> 50. Patient has a long history of multiple transfers between short term acute care hospitals (STACH) and long-term care hospitals (LTCH) for nearly 8 months. Patient is status post prolonged hospitalizations for respiratory failure and critical illness secondary to COVID-19 pneumonia. He never fully recovered from a respiratory standpoint. He is now admitted into the LTCH with COVID-19 listed as past history for continued treatment of respiratory failure with prolonged mechanical ventilation for further continuation of vent weaning and rehab services. COVID-19 treatment was completed 8 months ago at the STACH. Provider documentation states chronic respiratory failure secondary to COVID-19 related ARDS, and status post tracheostomy. Patient is currently on prolonged mechanical ventilation most likely from diaphragm weakness and tenacious secretions complicated by pulmonary hypertension with some degree of prominent lung dysfunction. Would the correct coding and sequencing for the above scenario be J96.10, Chronic respiratory failure, followed by Z86.16, for history of COVID, or B94.8 for sequela of COVID? (3/1/2021; revised 8/25/2021) <div class="a-content"> <p>Assign code J96.10, Chronic respiratory failure, unspecified whether with hypoxia or hypercapnia, as the principal diagnosis since the ARDS has resolved. In addition, assign code B94.8, Sequelae of other specified infectious and parasitic diseases, for discharges/encounters prior to October 1, 2021, or code U09.9, Post COVID-19 condition, unspecified, for discharges/encounters on or after October 1, 2021. as a secondary diagnosis, since the patient no longer has an active COVID-19 infection.</p> </div> </li> <li class="a-items"> 51. Three weeks ago, the patient was admitted for COVID-19 related respiratory problems, with a positive COVID-19 test result at that time. She was treated with Remdesivir and Dexamethasone and was discharged with a five-day prednisone pulse. Since being discharged, the patient had not been feeling well, and was readmitted with worsening cough, pleuritic chest pain and dizziness. Subsequent COVID-19 tests were negative; however, the provider's discharge diagnosis listed, "Pneumonia due to COVID-19 virus." Our infectious disease expert believes that the pneumonia should be coded as a sequela rather than as an acute manifestation of COVID-19 infection. Would pneumonia be considered an acute manifestation of COVID-19, a late effect/sequela of COVID-19, or is the COVID-19 coded as a personal history since the most recent COVID test is negative? What is the principal diagnosis, COVID-19 infection or pneumonia? (3/1/2021) <div class="a-content"> <p>Assign code U07.1. COVID-19, as the principal diagnosis. Code J12.82, Pneumonia due to coronavirus disease 2019, would be assigned as an additional diagnosis. The Instructional Note under code U07.1 directs to use an additional code to identify pneumonia or other manifestations. Therefore, when a patient presents with an acute manifestation of COVID-19, such as pneumonia, code U07.1 is sequenced, as the principal or first diagnosis, regardless of whether the patient's most recent COVID-19 test is positive or negative. The Official Guidelines for Coding and Reporting for sequela state, "A sequela is the residual effect (condition produced) after the acute phase of an illness or injury has terminated."</p> </div> </li> <li class="a-items"> 52. How is an encounter/admission for COVID-associated pneumonia coded, when the patient's latest COVID-19 test results are negative? (3/1/2021) <div class="a-content"> <p>Assign code U07.1. COVID-19, as the principal or first-listed diagnosis, because the pneumonia is an acute manifestation of the COVID-19 infection. Assign code J12.82, Pneumonia due to coronavirus disease 2019, as an additional diagnosis. The Instructional Note under code U07.1 directs to use an additional code to identify pneumonia or other manifestations. Therefore, when a patient presents with an acute manifestation of COVID-19, such as pneumonia, code U07.1 should be reported as the principal or first diagnosis, regardless of whether the patient's most recent COVID-19 test is positive or negative.</p> </div> </li> <li class="a-items"> 53. A patient who tested negative for COVID-19 several times as an outpatient now presents to the Emergency Department because of worsening symptoms. The patient was admitted for treatment of possible pneumonia. He was retested for COVID-19, and the results were still negative; however, a COVID-19 antibody test was positive. The provider's final diagnostic statement lists, "Post COVID-19 organizing pneumonia." Would pneumonia be considered an acute manifestation of COVID-19, a late effect/sequela of COVID-19, or is the COVID-19 coded as a personal history since the most recent COVID-19 test is negative? What is the principal diagnosis, COVID-19 or pneumonia? (3/1/2021; revised 8/25/2021) <div class="a-content"> <p>Based on the documentation provided, the patient has an organizing pneumonia due to previous COVID-19 infection. Assign code J84.89, Other specified interstitial pulmonary diseases, followed by code B94.8. Sequelae of other specified infectious and parasitic diseases, for discharges/encounters prior to October 1, 2021, or code U09.9, Post COVID-19 condition, unspecified, for discharges/encounters on or after October 1, 2021, for a diagnosis of post COVID-19 organizing pneumonia.</p> <p>Code J84.89 may be located by the following Index entry:</p> <p><strong>Pneumonia</strong><br> - organizing J84.89</p> </div> </li> <li class="a-items"> 54. The patient is diagnosed with acute COVID-19 viral infection with bilateral pneumonia and adult respiratory distress syndrome (ARDS) resulting in acute hypoxic and hypercapnic respiratory failure. The provider documented that the patient developed acute right-sided hydropneumothorax, likely due to barotrauma due to mechanical ventilation. Since the patient had COVID-19 pneumonia, which can weaken the lungs, would this affect code assignment? How should this case be coded? (3/1/2021; revised 3/24/2021) <div class="a-content"> <p>Assign code U07.1, COVID-19, as the principal or first-listed diagnosis, because the pneumonia is an acute manifestation of the COVID-19 infection. Assign code J12.82, Pneumonia due to coronavirus disease 2019, and code J80, Acute respiratory distress syndrome, as additional diagnoses for the pneumonia and ARDS. In addition, assign codes J95.859, Other complication of respirator [ventilator], J95.811, Postprocedural pneumothorax, and J94.8, Other specified pleural conditions, to capture hydropneumothorax barotrauma due to mechanical ventilation. The presence of COVID-19 does not affect code assignment of hydropneumothorax barotrauma.</p> </div> </li> <li class="a-items"> 55. A patient with a history of COVID-19 infection was admitted for treatment of acute hyperkalemia and acute kidney injury with chronic kidney disease. Follow-up COVID-19 testing was positive. The provider documented, "COVID likely reflective of old noninfectious virus." How is the COVID-19 status captured for this patient? Does the Official Coding and Reporting Guideline I.C.1.g.1.a., “code only confirmed cases” apply when the provider documents the patient as "noninfectious" but has a positive COVID-19 test during the admission? (8/25/2021) <div class="a-content"> <p>Assign code Z86.16, Personal history of COVID-19. While the patient had a positive COVID-19 test, the provider documented that the patient was not actively infectious during this admission. When the provider documents "noninfectious" or "not infectious" COVID-19 status, this indicates that the patient no longer has an active COVID-19 infection, therefore assign code Z86.16 instead of code U07.1, COVID-19.</p> <p>Although guideline I.C.1.g.1.a., states: “Code only a confirmed diagnosis of the 2019 novel coronavirus disease (COVID-19) as documented by the provider or documentation of a positive COVID-19 test result,” in this scenario the provider has clarified the patient no longer has an active COVID-19 infection. Therefore, code U07.1, COVID-19, is not appropriate and the Official Coding Guideline I.C.1.g.1.a., regarding a positive COVID-19 test result would not apply.</p> <p>If the documentation is unclear as to whether the patient has an active COVID-19 infection or a personal history, query the provider for clarification.</p> </div> </li> <li class="a-items"> 56. A patient presented to the hospital with acute respiratory failure and COPD exacerbation. It was noted that the patient tested positive for COVID-19 approximately 80 days prior to this admission. A repeat COVID-19 test was performed and came back positive but the provider documented she did not consider the patient's status to be a COVID-19 "reinfection." The discharge summary states: "history of COVID infection currently still testing positive for COVID." Is it appropriate to assign code Z86.16, Personal history of COVID-19, or code U07.1, COVID-19 since there is a positive test? (8/25/2021) <div class="a-content"> <p>Although the patient is still testing positive for COVID-19, the provider has documented the patient's condition was a previous history of a COVID-19 infection and not a reinfection, therefore it would be appropriate to assign code Z86.16, Personal history of COVID-19.</p> </div> </li> <li class="a-items"> 57. A patient presented for treatment of bulbous pemphigoid bulla with surrounding cellulitis. During the admission, the patient was tested for COVID-19. Although the patient was completely vaccinated, the physician documented the COVID-19 test was positive. The patient was subsequently placed in isolation and instructed to complete 10 days of self-isolation following discharge. How is COVID-19 coded in this scenario? (8/25/2021) <div class="a-content"> <p>Assign code U07.1, COVID-19. The provider’s assessment stated “COVID-19 virus detected,” and it is possible for a COVID-19 infection to occur despite vaccination. This is consistent with <em>Official Guidelines for Coding and Reporting,</em> Section I.C.1.g.1.a., which states: Code only a confirmed diagnosis of the 2019 novel coronavirus disease (COVID-19) as documented by the provider or documentation of a positive COVID-19 test result.</p> </div> </li> <li class="a-items"> 58. A patient was recently discharged from the hospital, admitted to a nursing home, and subsequently tested positive for COVID-19 via a rapid antigen test. The patient was readmitted to the hospital for COVID-19; however was asymptomatic. Repeat testing x2 including confirmatory testing of COVID PCR was negative. The provider consulted with infectious disease and hematology and it was documented the patient had a false positive that did not represent a true COVID-19 infection. How is COVID-19 coded in this scenario? (8/25/2021) <div class="a-content"> <p>Assign code Z20.822, Contact with and (suspected) exposure to COVID-19, as principal diagnosis, for a patient admitted and found to have a false positive COVID-19 test. <em>ICD-10-CM Official Guidelines for Coding and Reporting,</em> Section I.C.1.g.1.e. states: For asymptomatic individuals with actual or suspected exposure to COVID-19, assign code Z20.822, Contact with and (suspected) exposure to COVID-19.</p> <p>Although guideline I.C.1.g.1.a., allows coding of confirmed cases of COVID-19 on the basis of “documentation of a positive COVID-19 test result,” in this scenario the provider clarified the COVID-19 test as being a false positive; therefore code U07.1, COVID-19, is not appropriate and the Official Coding Guideline I.C.1.g.1.a. regarding coding on the basis of a positive COVID-19 test result would not apply to this case.</p> <p>However, it is always appropriate to query the provider for clarification whenever the coding professional finds the medical record documentation to be unclear regarding the patient's COVID-19 status.</p> </div> </li> <li class="a-items"> <s>59. Is it appropriate to report code Z28.3, Underimmunization status, for encounters where the provider documents the patient has not been immunized against COVID-19? (8/27/2021).</s> <div class="a-content"> <p>(Question #59 was deleted on April 13, 2022.)</p> </div> </li> <li class="a-items"> 60. Would it be appropriate to utilize documentation from clinicians (e.g. nurse) other than the patient’s provider to determine a patients underimmunization status to report the new underimmunization for COVID-19 codes starting April 1st? (revised 4/21/22) <div class="a-content"> <p>Yes, underimmunization status codes may be assigned based on nursing or other clinician documentation where information regarding the patient’s vaccination status can be found.</p> <p>Official Coding Guideline I.B.14, Documentation by Clinicians Other than the Patient's Provider, will be updated with the FY 2023 guideline revisions to include all underimmunization status codes as one of the exceptions of acceptable conditions/status' documented by a clinician other than the patient's provider.</p> </div> </li> <li class="a-items"> 61. A patient who had contracted COVID-19 infection during the second trimester of pregnancy delivered a healthy newborn at term. Would code Z20.822, Contact with and (suspected) exposure to COVID-19, be assigned to identify the newborn's exposure to COVID-19? (5/22/22) <div class="a-content"> <p>Do not assign code Z20.822, Contact with and (suspected) exposure to COVID-19, since the provider’s documentation does not indicate the infant was affected (e.g., small for gestational age) by the mother’s COVID-19 infection and the criteria for secondary diagnosis has not been met. The <em>Official Guidelines for Coding and Reporting</em> general perinatal rules (16.a.6.) state, “All clinically significant conditions noted on routine newborn examination should be coded. A condition is clinically significant if it requires: clinical evaluation, or therapeutic treatment, or diagnostic procedures, or extended length of hospital stay, or increased nursing care and/or monitoring, or has implications for future health care needs.”</p> </div> </li> <li class="a-items"> 62. What is the correct coding and sequencing for an immunocompromised patient with sickle cell disease (SCD) who presents in sickle cell crisis (SCC) triggered by a COVID-19 infection? The sickle cell disease is not a manifestation of COVID-19 infection, but the acute sickle cell pain crisis is directly linked to a COVID-19 infection. (5/22/22) <div class="a-content"> <p>Assign the appropriate code from category D57, Sickle-cell disorders, for the sickle cell crisis and code U07.1 for the COVID-19 infection. Sequencing would depend on the circumstances of the admission. While the COVID-19 infection triggered an acute sickle cell crisis, SCD is not a manifestation of COVID-19.</p> </div> </li> <li class="a-items"> 63. A patient with end-stage liver disease is admitted for an orthotopic liver transplant. The donor organ came from a brain dead patient who was also COVID-19 positive. The recipient was contacted regarding the COVID-19 positive status of the donor prior to admission and elected to proceed with the liver transplant procedure.<br> Since the donor was COVID-19 positive, it was decided that anticoagulation was needed due to likely COVID-19 viremia and the patient was started on subcutaneous heparin. The donor organ was successfully transplanted and the patient was started on a daily dose of aspirin for a 3 month duration as well due to the COVID-19 positive organ donation. Is there an ICD-10-CM diagnosis code to capture that the recipient received a donor organ that was positive for COVID-19 at the time of donation? (5/22/22) <div class="a-content"> <p>Assign code Z20.822, Contact with and (suspected) exposure to COVID-19, to identify that the recipient received a donor organ that was positive for COVID-19.</p> </div> </li> <li class="a-items"> 64. What code will be assigned for COVID-19 screening once the federal Public Health Emergency (PHE) for COVID-19 expires? (revised 5/9/23) <div class="a-content"> <p>The federal Public Health Emergency (PHE) for COVID-19 will expire on May 11, 2023. Based on the <em>ICD-10-CM Official Guidelines for Coding and Reporting,</em> continue to assign code Z20.822, Contact with and (suspected) exposure to COVID-19, for COVID-19 screening that is performed after May 11, 2023.>/p></p> <p>Note: This advice is consistent with current coding guidance.</p> <p>Effective October 1, 2023, the <em>ICD-10-CM Official Guidelines for Coding and Reporting</em> on encounters for COVID-19 screening will be revised. For encounters for COVID-19 screening on or after October 1, 2023, assign code Z11.52, Encounter for screening for COVID-19.</p> </div> </li> <li class="a-items"> 65. Once the federal Public Health Emergency (PHE) for COVID-19 expires, what code should be assigned for COVID-19 screening that is performed during preoperative testing? (revised 5/9/23) <div class="a-content"> <p>For an encounter for COVID-19 screening that is performed as part of preoperative testing after May 11, 2023, continue to assign code Z01.812, Encounter for preprocedural laboratory examination, as the first-listed diagnosis and code Z20.822, Contact with and (suspected) exposure to COVID-19, as an additional diagnosis.</p> <p>Note: This advice is consistent with current coding guidance.</p> <p>Effective October 1, 2023, for an encounter for COVID-19 screening that is performed as part of preoperative testing, assign code Z01.812, Encounter for preprocedural laboratory examination, as the first-listed diagnosis and code Z11.52, Encounter for screening for COVID-19, as an additional diagnosis.</p> </div> </li> </ul> </div> <div class="tabcontent" id="ICDPCS"> <ul class="a-container"> <li class="a-items"> 1. Will new ICD-10-PCS procedure codes be created to identify the use of specific drugs and other therapeutic substances for treatment of COVID-19 in the hospital inpatient setting? (7/30/2020) <div class="a-content"> <p>In response to the COVID-19 pandemic, the Centers for Medicare and Medicaid Services (CMS) implemented 12 new ICD-10-PCS procedure codes to describe the introduction or infusion of therapeutics for the treatment of COVID-19, effective with discharges on or after August 1, 2020. The Code Tables, Index and related Addenda files for the 12 new procedure codes are available at: <a href="https://www.cms.gov/Medicare/Coding/ICD10/2020-ICD-10-PCS" target="_blank">https://www.cms.gov/Medicare/Coding/ICD10/2020-ICD-10-PCS</a>.</p> </div> </li> <li class="a-items"> 2. What ICD-10-PCS procedure codes should be assigned to identify the administration of specific drugs, such as remdesivir, to treat COVID-19 in the hospital inpatient setting? (7/30/2020) <div class="a-content"> <p>Effective with discharges on or after August 1, 2020, new ICD-10-PCS codes have been implemented for the administration of three different drugs when used to treat COVID-19:</p> <ul> <li>XW033E5, Introduction of Remdesivir Anti-infective into Peripheral Vein, Percutaneous Approach, New Technology Group 5</li> <li>XW043E5, Introduction of Remdesivir Anti-infective into Central Vein, Percutaneous Approach, New Technology Group 5</li> <li>XW033G5, Introduction of Sarilumab into Peripheral Vein, Percutaneous Approach, New Technology Group 5</li> <li>XW043G5, Introduction of Sarilumab into Central Vein, Percutaneous Approach, New Technology Group 5</li> <li>XW033H5, Introduction of Tocilizumab into Peripheral Vein, Percutaneous Approach, New Technology Group 5</li> <li>XW043H5, Introduction of Tocilizumab into Central Vein, Percutaneous Approach, New Technology Group 5</li> </ul> <p>These codes should only be assigned when these drugs are administered to treat COVID-19.</p> </div> </li> <li class="a-items"> 3. What ICD-10-PCS procedure code should be assigned to identify the use of convalescent plasma to treat COVID-19 in the hospital inpatient setting? (7/30/2020) <div class="a-content"> <p>Effective with discharges on or after August 1, 2020, assign ICD-10-PCS code XW13325, Transfusion of Convalescent Plasma (Nonautologous) into Peripheral Vein, Percutaneous Approach, New Technology Group 5, or code XW14325, Transfusion of Convalescent Plasma (Nonautologous) into Central Vein, Percutaneous Approach, New Technology Group 5.</p> </div> </li> <li class="a-items"> 4. What ICD-10-PCS procedure code should be assigned for a new drug or other therapeutic substance administered in the hospital inpatient setting to treat COVID-19 when there is no unique code for the administration of the specific substance? (7/30/2020; revised 8/5/2020, revised 8/25/2021) <div class="a-content"> <p>Effective with discharges on or after August 1, 2020, the following ICD-10-PCS codes should be used for administration of a new therapeutic substance to treat COVID-19 when the substance is not classified elsewhere in ICD-10-PCS:</p> <ul> <li>XW013F5, Introduction of Other New Technology Therapeutic Substance into Subcutaneous Tissue, Percutaneous Approach, New Technology Group 5</li> <li>XW033F5, Introduction of Other New Technology Therapeutic Substance into Peripheral Vein, Percutaneous Approach, New Technology Group 5</li> <li>XW043F5, Introduction of Other New Technology Therapeutic Substance into Central Vein, Percutaneous Approach, New Technology Group 5</li> <li>XW0DXF5, Introduction of Other New Technology Therapeutic Substance into Mouth and Pharynx, External Approach, New Technology Group 5</li> </ul> <p>These codes should only be assigned for therapeutic substances being used to treat COVID-19. For administration of “other therapeutic substances” that are being used to treat medical conditions other than COVID-19, see ICD-10-PCS table 3E0. For example, code 3E033GC describes “Introduction of Other Therapeutic Substance into Peripheral Vein, Percutaneous Approach.”</p> </div> </li> <li class="a-items"> 5. Do the new ICD-10-PCS procedure codes for COVID-19 treatment that became effective August 1, 2020 impact MS-DRG assignment? (7/30/2020) <div class="a-content"> <p>No, the 12 new ICD-10-PCS codes describing the use of therapeutic substances to treat COVID-19 do not impact MS-DRG assignment. However, hospitals are encouraged to report these codes when applicable, as they will be useful in evaluating the effectiveness of different therapeutic substances used to treat COVID-19 and for tracking patient outcomes.</p> </div> </li> <li class="a-items"> 6. If an ICD-10-PCS code or value already exists for introduction or infusion of a therapeutic substance (e.g., stem cell transfusion), should that code be used when the substance is being administered to treat COVID-19 or one of the new codes for “introduction of other new technology therapeutic substance” that became effective on August 1, 2020? (8/5/2020) <div class="a-content"> <p>When a more specific ICD-10-PCS code exists, such as stem cell transfusion, assign that code rather than one of the less specific new technology codes. The new codes for “introduction of other new technology therapeutic substance” are only intended for new substances that are not classified elsewhere in ICD-10-PCS.</p> </div> </li> <li class="a-items"> 7. If remdesivir, sarilumab, or tocilizumab is administered for treatment of a clinical condition other than COVID-19, should one of the new ICD-10-PCS codes in table XW0 be assigned? (8/5/2020) <div class="a-content"> <p>No, these new codes are only intended for use when these drugs are being administered to treat COVID-19.</p> </div> </li> <li class="a-items"> 8. Should the administration of remdesivir, sarilumab, or tocilizumab be coded each time it is administered during a hospitalization or just coded once? (9/1/2020) <div class="a-content"> <p>Only assign the drug administration code once.</p> </div> </li> <li class="a-items"> 9. What ICD-10-PCS code should be assigned for the administration of Dexamethasone (either orally or intravenously) when it is being used to tread COVID-19? (9/1/2020) <div class="a-content"> <p>If your facility wishes to capture this information, you may assign the appropriate code from table 3E0 for introduction of an anti-inflammatory drug. Do not assign a code from table XW0 for Introduction of Other New Technology Therapeutic Substance.</p> </div> </li> <li class="a-items"> 10. Are new ICD-10-PCS codes for COVID-19 treatments and vaccines going into effect on January 1, 2021? (12/11/2020) <div class="a-content"> <p>In response to the COVID-19 pandemic, CMS is implementing 21 new ICD-10-PCS procedure codes to describe the introduction or infusion of therapeutics, including monoclonal antibodies, for the treatment of COVID-19, as well as new codes for COVID-19 vaccines, effective January 1, 2021. An announcement listing these codes and information related to the ICD-10 MS-DRGs V38.1 is available at: <a href="https://www.cms.gov/medicare/icd-10/2021-icd-10-pcs" target="_blank">https://www.cms.gov/medicare/icd-10/2021-icd-10-pcs</a></p> <p>For guidance regarding the appropriate ICD-10-PCS procedure code to assign when a new drug or other therapeutic substance is administered in the hospital inpatient setting to treat COVID-19 and there is no unique code for the administration of the specific substance, see ICD-10-PCS FAQ #4.</p> </div> </li> </ul> </div> function openCity(evt, cityName) { var i, tabcontent, tablinks; tabcontent = document.getElementsByClassName("tabcontent"); for (i = 0; i < tabcontent.length; i++) { tabcontent[i].style.display = "none"; } tablinks = document.getElementsByClassName("tablinks"); for (i = 0; i < tablinks.length; i++) { tablinks[i].className = tablinks[i].className.replace(" active", ""); } document.getElementById(cityName).style.display = "block"; evt.currentTarget.className += " active"; } // Get the element with id="defaultOpen" and click on it document.getElementById("defaultOpen").click(); </div> </div> <div class="col-md-4"> <p><span contenteditable="false" tabindex="-1"><a data-widget="image" href="https://www.codingclinicadvisor.com/coding-handbook" target="_blank" title="Clear here to purchase the ICD-10-CM and ICD-10-PCS Coding Handbook 2023."><img alt="ICD-10-CM and ICD-10-PCS Coding Handbook 2024 banner. 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One of the hearings at the House Energy and Commerce Subcommittee on Health is a legislative hearing that will <a href="https://energycommerce.house.gov/posts/chairs-rodgers-guthrie-announce-bipartisan-health-subcommittee-legislative-hearing-on-transparency-and-competition" target="_blank">discuss a number of proposals</a> released yesterday, including ones on site-neutral payments, the 340B Drug Pricing Program, price transparency and physician-owned hospitals, among other issues.</p><p>Additional details about the hearings follow, as well as resources that can assist your advocacy efforts with your lawmakers.</p><h2>Take Action Today</h2><p><strong>If you have a representative on the House subcommittees holding hearings next week, please reach out to them prior to the hearings to ensure they understand the financial challenges facing your hospital or health system, the impact of these challenges on your community, and the dire need for congressional support — not policies that would jeopardize access to patient care, further threaten the financial stability of the field or add burden to an already overwhelmed workforce.</strong></p><p>Even if you do not have a representative on one of the committees meeting next week, it is important that your lawmaker hear from you on these issues. Ongoing education of Congress is a vital step in securing additional support for the field and preventing damaging legislation that may affect hospitals and health systems’ ability to continue to provide services to their communities.</p><h3>Energy and Commerce Subcommittee on Health Legislative Hearing</h3><p>The House Energy and Commerce Subcommittee on Health April 26 at 10 a.m. ET is holding a <a href="https://energycommerce.house.gov/posts/chairs-rodgers-guthrie-announce-bipartisan-health-subcommittee-legislative-hearing-on-transparency-and-competition" target="_blank">legislative hearing</a> on “Lowering Unaffordable Costs: Legislative Solutions to Increase Transparency and Competition in Health Care.” <a href="https://energycommerce.house.gov/committees/subcommittee/health" target="_blank">View the subcommittee members.</a></p><p>The hearing is a follow-up to a hearing the subcommittee held last month on this topic. The April 26 hearing will discuss 16 bills and discussion drafts that were unveiled yesterday as part of the notice for this hearing. The proposals cover topics including site-neutral payment policies, the 340B program, price transparency, Medicaid disproportionate share hospital reductions, physician-owned hospitals, pharmacy benefit managers, among others. AHA is reviewing the proposals.</p><h3>Ways and Means Subcommittee to Discuss Tax-exempt Status</h3><p>The House Committee on Ways and Means Subcommittee on Oversight April 26 is holding a <a href="https://waysandmeans.house.gov/wp-content/uploads/2023/04/ADVISORY_OS-Subcommittee-April-26-2023.pdf" target="_blank">hearing</a> at 2 p.m. ET on tax-exempt hospitals and the community benefit standard. <a href="https://waysandmeans.house.gov/subcommittee/oversight/" target="_blank">View the subcommittee members.</a></p><h3>Education and the Workforce Subcommittee on Lowering Health Care Costs</h3><p>The House Committee on Education and the Workforce Subcommittee on Health, Employment, Labor, Pensions April 26 will host a <a href="https://edworkforce.house.gov/news/documentsingle.aspx?DocumentID=409079" target="_blank">hearing</a> at 10:15 a.m. ET to discuss “Reducing Health Care Costs for working Americans and Their Families.” <a href="https://edworkforce.house.gov/issues/issue/default.aspx?IssueID=43422" target="_blank">View the subcommittee members.</a></p><h3>House Appropriations Subcommittee on Provider Relief Fund and Workforce Shortages</h3><p>The House Committee on Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies April 26 is holding a <a href="https://appropriations.house.gov/legislation/hearings/oversight-hearing-provider-relief-fund-and-healthcare-workforce-shortages" target="_blank">hearing</a> at 10 a.m. ET on “Provider Relief Fund and Healthcare Worker Shortages.” <a href="https://appropriations.house.gov/subcommittees/labor-health-and-human-services-education/labor-subcommittee-members" target="_blank">View the subcommittee members.</a></p><h2>AHA Resources</h2><p>The AHA Advocacy <a href="/advocacy-issues">Action Center</a> has a number of resources that can assist you in your conversations with your representative. It’s important to share examples from your own hospital or health system as those will resonate the most with your lawmaker.</p><h3>AHA Member Resources on Committee Hot Topics</h3><ul><li><a href="/advocacy/advocacy-issues/transparency-and-competition">Transparency and Competition</a></li><li><a href="/advocacy/advocacy-issues/site-neutral-payment-proposals">Site-neutral Payment Proposals</a></li><li><a href="/advocacy/advocacy-issues/340b-drug-pricing-program">340B Drug Pricing Program</a></li><li><a href="/advocacy/advocacy-issues/physician-owned-hospitals">Physician-Owned Hospitals</a></li><li><a href="/issue-landing-page/2023-04-20-tax-exempt-status">Tax-Exempt Organizations</a></li><li><a href="/talking-points/2022-12-05-talking-points-provider-relief-fund">Provider Relief Fund</a></li><li><a href="/costsofcaring">Costs of Caring</a></li></ul><h2>Further Questions</h2><p>If you have further questions, please contact AHA at <a href="tel:1-800-424-4301">800-424-4301</a>.</p></div><div class="col-md-4"><p><a href="/system/files/media/file/2023/04/ACT-NOW-Congress-Is-Considering-Hospital-Cuts-Tell-Them-to-Reject-Proposals-that-Could-Jeopardize-Patients-Access-to-Care.pdf" target="_blank" title="Click here to download the Action Alert: ACT NOW: Congress Is Considering Hospital Cuts; Tell Them to Reject Proposals That Could Jeopardize Patients’ Access to Care"><img src="/sites/default/files/inline-images/Pages-1-ACT-NOW-Congress-Is-Considering-Hospital-Cuts-Tell-Them-to-Reject-Proposals-that-Could-Jeopardize-Patients-Access-to-Care.png" data-entity-uuid="6c10679c-3f71-4f6a-b6a4-1561e2ff09c3" data-entity-type="file" alt="Action Alert: ACT NOW: Congress Is Considering Hospital Cuts; Tell Them to Reject Proposals That Could Jeopardize Patients’ Access to Care page 1." width="695" height="900"></a></p></div></div></div> Thu, 20 Apr 2023 15:09:26 -0500 COVID-19: Coverage and Reimbursement /guidesreports/2023-04-20-2022-costs-caring <div class="container"> <div class="row"> <div class="col-md-8"> <h2>Introduction</h2> <p>For over two years since the outset of the COVID-19 pandemic, America’s hospitals and health systems have been on the front lines caring for patients, comforting families and protecting communities.</p> <p>With over 80 million cases<sup><a href="#fn1">1</a></sup>, nearly 1 million deaths<sup><a href="#fn2">2</a></sup>, and over 4.6 million hospitalizations<sup><a href="#fn3">3</a></sup>, the pandemic has taken a significant toll on hospitals and health systems and placed enormous strain on the nation’s health care workforce. During this unprecedented public health crisis, hospitals and health systems have confronted many challenges, including historic volume and revenue losses, as well as skyrocketing expenses (<a href="#figure1">See Figure #1</a>).</p> <p><img alt="Figure #1: Increase in Hospital Expenses Per Patient from 2019 to 2021. Drug: 36.9%. Labor: 19.1%. Supply: 20.6%. Total: 20.1%. Source: January 2022 Kaufman Hall National Hospital Flash Report." data-entity-type="file" data-entity-uuid="650de08c-92ad-4b43-a4de-5626955ff31a" src="/sites/default/files/inline-images/Figure-1-Increase-in-Hospital-Expenses-Per-Patient-2019-2021.jpg" width="457" height="392" class="align-right"><a id="figure1" name="figure1"></a>Hospitals and health systems have been nimble in responding to surges in COVID-19 cases throughout the pandemic by expanding treatment capacity, hiring staff to meet demand, acquiring and maintaining adequate supplies and personal protective equipment (PPE) to protect patients and staff and ensuring that critical services and programs remain available to the patients and communities they serve. However, these and other factors have led to billions of dollars in losses over the last two years for hospitals, and over 33% of hospitals are operating on negative margins.</p> <p>The most recent surges triggered by the delta and omicron variants have added even more pressure to hospitals. During these surges, hospitals saw the number of COVID-19 infected patients rise while other patient volumes fell, and patient acuity increased. This drove up expenses and added significant financial pressure for hospitals. Moreover, hospitals did not receive any government assistance through the COVID-19 Provider Relief Fund (PRF) to help mitigate rising expenses and lost revenues during the delta and omicron surges. This is despite the fact that more than half of COVID-19 hospitalizations have occurred since July 1, 2021, during these two most recent COVID-19 surges.</p> <p>At the same time, patient acuity has increased, as measured by how long patients need to stay in the hospital. The increase in acuity is a result of the complexity of COVID-19 care, as well as treatment for patients who may have put off care during the pandemic. The average length of a patient stay increased 9.9% by the end of 2021 compared to pre-pandemic levels in 2019.<sup><a href="#fn4">4</a></sup></p> <p>As hospitals treat sicker patients requiring more intensive treatment, they also must ensure that sufficient staffing levels are available to care for these patients, and must acquire the necessary expensive drugs and medical supplies to provide high-quality care. As a result, overall hospital expenses have experienced considerable growth.</p> <p>Data from Kaufman Hall, a consulting firm that tracks hospital financial metrics, shows that by the end of 2021, total hospital expenses were up 11% compared to pre-pandemic levels in 2019. Even after accounting for changes in volume that occurred during the pandemic, hospital expenses per patient increased significantly from pre-pandemic levels across every category. (<a href="#figure1">See Figure #1</a>)</p> <p>The pandemic has strained hospitals’ and health systems’ finances. Many hospitals operate on razorthin margins, so even slight increases in expenses can have dramatic negative effects on operating margins, which can jeopardize their ability to care for patients. These expense increases have been more challenging to withstand in light of rising inflation and growth in input prices. In fact, despite modest growth in revenues compared to pre-pandemic levels, median hospital operating margins were down 3.8% by the end of 2021 compared to pre-pandemic levels, according to Kaufman Hall. Further exacerbating the problem for hospitals are Medicare sequestration cuts and payment increases that are well below increases in costs. For example, an analysis by PINC found that for fiscal year 2022, hospitals received a 2.4% increase in their Medicare inpatient payment rate, while hospital labor rates increased 6.5%.<sup><a href="#fn5">5</a></sup></p> <p>These levels of increased expenses and declines in operating margins are not sustainable. This report highlights key pressures currently facing hospitals and health systems, including:</p> <ol> <li><a href="#iworkforce">Workforce and contract labor expenses</a></li> <li><a href="#iidrug">Drug expenses</a></li> <li><a href="#iiimedical">Medical supply and PPE expenses</a></li> <li><a href="#iimpact">Rising economy-wide inflation</a></li> </ol> <p>Each of these issues separately presents significant challenges to the hospital field. Taken together, they represent conditions that would be potentially catastrophic for most organizations, institutions and industries. However, the fact that the nation’s hospitals and health systems continue to serve on the front lines of the ongoing pandemic is a testament to their resiliency and steadfast commitment to their mission to serve patients and communities around the country.</p> <p>Hospitals and health systems are the cornerstones of their communities. Their patients depend on them for access to care 24 hours a day, seven days a week. Hospitals are often the largest employers in their community, and large purchasers of local services and goods. Additional support is needed to help ensure hospitals have the adequate resources to care for their communities.</p> <h2 id="iworkforce">I. Workforce and Contract Labor Expenses</h2> <p>The hospital workforce is central to the care process and often the largest expense for hospitals. It is no surprise then that even before the pandemic, labor costs — which include costs associated with recruiting and retaining employed staff, benefits and incentives — accounted for more than 50% of hospitals’ total expenses. Therefore, even a slight increase in these costs can have significant impacts on a hospital’s total expenses and operating margins.</p> <p>As the pandemic has persisted for over two years, the toll on the health care workforce has been immense. A recent survey of health care workers found that approximately half of respondents felt “burned out” and nearly a quarter of respondents said they anticipated leaving the health care field.<sup><a href="#fn6">6</a></sup></p> <p>This has been mirrored by a significant and sustained decline in hospital employment, down approximately 100,000 employees from pre-pandemic levels.<sup><a href="#fn7">7</a></sup> At the height of the omicron surge, approximately 1,400 hospitals or 30% of all U.S. hospitals reporting data to the government, indicated that they anticipated a critical staffing shortage within the week.<sup><a href="#fn8">8</a></sup> This high percentage of hospitals reporting a critical staffing shortage stayed relatively consistent throughout the delta and omicron surges.</p> <p><img alt="Figure #2: Number of Unique Job Postings for Travel Nurses. January 2019: 14,328. January 2022: 31,309. AHA Analysis of Emsi Burning Glass Market Analytics, 2022. (Emsi Burning Glass — economicmodeling.com)" data-entity-type="file" data-entity-uuid="219b4bca-0e69-405d-bfc2-1ca7737bfa8a" src="/sites/default/files/inline-images/Figure-2-Number-of-Unique-Job-Postings-for-Travel-Nurses.jpg" width="417" height="431" class="align-right"><a id="figure2" name="figure2"></a>The combination of employee burnout, fewer available staff, increased patient acuity and higher demand for care especially during the delta and omicron surges, has forced hospitals to turn to contract staffing firms to help address staffing shortages.</p> <p>Though hospitals have long worked with contract staffing firms to bridge temporary gaps in staffing, the pandemic-driven-staffing-shortage has created an expanded reliance on contract staff, especially contract or travel registered nurses. Travel nurses are in particularly high demand because they serve a critical role in delivering care for both COVID-19 and non-COVID-19 patients and allow the hospital to meet the demand for care, especially during pandemic surges.</p> <p>According to a survey by AMN Healthcare, one of the nation’s largest health care staffing agencies, 95% of health care facilities reported hiring nurse staff from contract labor firms during the pandemic.<sup><a href="#fn9">9</a></sup> Staffing firms have increased their recruitment of contract or travel nurses, illustrating the significant growth in their demand. According to data from EMSI/Burning Glass, there has been a nearly 120% increase in job postings for contract or travel nurses from pre-pandemic levels in January 2019 to January 2022. (<a href="#figure2">See Figure #2</a>)</p> <p>Similarly, the hours worked by contract or travel nurses as a percentage of total hours worked by nurses in hospitals has grown from 3.9% in January 2019 to 23.4% in January 2022, according to data from Syntellis Performance Solutions. (<a href="#figure3">See Figure #3</a>) In fact, a quarter of hospitals have experienced nearly a third of their total nurse hours accounted for by contract or travel nurses.</p> <p><img alt="Figure #3: Contract RN as a % of Total RN Worked Hours and Paid Dollars. January 2019: Contract RN 4.7% of Total RN Paid Dollars; Contract RN 3.9% of Total RN Worked Hours. January 2022: Contract RN 38.6% of Total RN Paid Dollars; Contract RN 23.4% of Total RN Worked Hours. Analysis conducted by Syntellis Performance Solutions." data-entity-type="file" data-entity-uuid="a7962291-12e2-4466-bc74-74a1e96e4f66" src="/sites/default/files/inline-images/Figure-3-Contract-RN-as-Percentage-of-Total-RN-Worked-Hours-Paid-Dollars.jpg" width="540" height="368" class="align-right"><a id="figure3" name="figure3"></a>As the share of contract travel nurse hours has grown significantly compared to before the pandemic, so too have the costs of employing travel nurses compared to pre-pandemic levels. In 2019, hospitals spent a median of 4.7% of their total nurse labor expenses for contract travel nurses, which skyrocketed to a median of 38.6% in January 2022. (<a href="#figure3">See Figure #3</a>) A quarter of hospitals — those who have had to rely disproportionately on contract travel nurses — saw their costs for contract travel nurses account for over 50% of their total nurse labor expenses. In fact, while contract travel nurses accounted for 23.4% of total nurse hours in January 2022, they accounted for nearly 40% of the labor expenses for nurses. (<a href="#figure3">See Figure #3</a>) This difference has grown considerably compared to pre-pandemic levels in 2019, suggesting that the exorbitant prices charged by staffing companies are a primary driver of higher labor expenses for hospitals.</p> <p>Data from Syntellis Performance Solutions show a 213% increase in hourly rates charged to hospitals by staffing companies for travel nurses in January 2022 compared to pre-pandemic levels in January 2019. This is because staffing agencies have exploited the situation by increasing the hourly rates billed to hospitals for contract travel nurses more than the hourly rates they pay to travel nurses. This is effectively the “margin” retained by the staffing agencies. During pre-pandemic levels in 2019, the average “margin” retained by staffing agencies for travel nurses was about 15%. As of January 2022, the average “margin” has grown to an astounding 62%. (<a href="#figure4">See Figure #4</a>)</p> <p><a href="https://welch.house.gov/sites/welch.house.gov/files/WH%20Nurse%20Staffing.pdf" target="_blank" title="Letter from Rep. Peter Welch and Rep. H. Morgan Griffith to Mr. Jeffrey Zients, COVID-19 Response Team Coordinator."><img alt="Figure #4: Differences in Advertised Pay Rates and Billed Rates for Contract RNs by Staffing Agencies. January 2019: 15%. January 2022: 62%. Advertised travel nurse data taken from Emsi Burning Glass Market Analytics, 2022. (Emsi Burning Glass — economicmodeling.com) Hospital billed rate data taken from analysis conducted by Syntellis Performance Solutions. Note that these sources contain different sample sizes and the graph was produced by the AHA. These numbers are in-line with other reports of staffing agency markups of rates they bill hospitals vs. advertised rates paid to contract nurses." data-entity-type="file" data-entity-uuid="09e82795-b11c-49b8-939c-2889076e8f68" src="/sites/default/files/inline-images/Figure-4-Differences-in-Advertised-Pay-Rates-and-Billed-Rates-Contract-RNs.jpg" width="542" height="417" class="align-right"></a><a id="figure4" name="figure4"></a>These high “margins” have fueled massive growth in the revenues and profits of health care staffing companies. Several staffing firms have reported significant growth in their revenues to as high as $1.1 billion in just the fourth quarter of 2021<sup><a href="#fn10">10</a></sup>, tripling their revenues and net income compared to 2020 levels.<sup><a href="#fn11">11</a></sup></p> <p>The data indicate that the growth in labor expenses for hospitals and health systems was in large part due to the exorbitant rates charged by contract staffing firms. By the end of 2021, hospital labor expenses per patient were 19.1% higher than pre-pandemic levels, and increased to 57% at the height of the omicron surge in January 2022.<sup><a href="#fn12">12</a></sup> A study looking at hospitals in New Jersey found that the increased labor expenses for contract staff amounted to $670 million in 2021 alone, which was more than triple what their hospitals spent in 2020.<sup><a href="#fn13">13</a></sup> High reliance on contract or travel staff prevents hospitals and health systems from investing those costs into their existing employees, leading to low morale and high turnover, which further exacerbates the challenges hospitals and health systems have been facing.</p> <h2 id="iidrug">II. Drug Expenses</h2> <p><img alt="Figure #5: Hospitals' Drug Expenses as a Share of Non-Labor Expenses. 8.2% in January 2019; 7.9% in December 2019. 9.3% in January 2021; 10.5% in December 2021. 10.6% in January 2022. Source: Syntellis Performance Solutions. " data-entity-type="file" data-entity-uuid="1d698d46-a0c4-4430-ac68-652f4db6a9d1" src="/sites/default/files/inline-images/Figure-5-Hospitals-Drug-Expenses-as-Share-of-Non-Labor-Expenses_1.jpg" width="542" height="374" class="align-right"><a id="figure5" name="figure5"></a>Prescription drug spending in the U.S. has grown significantly since the pandemic. In 2021, drug spending (including spending in both retail and non-retail settings) increased 7.7%<sup><a href="#fn14">14</a></sup>, which was on top of an increase of 4.9%<sup><a href="#fn15">15</a></sup> in 2020. While some of this growth can be attributed to increased utilization as patient acuity increased during the pandemic, a significant driver has been the continued increase in prices of existing drugs as well as the introduction of new products at very high prices. A study by GoodRx found that in January 2022 alone, drug companies increased the price of about 810 brand and generic drugs that they reviewed by an average of 5.1%.<sup><a href="#fn16">16</a></sup> These price increases followed massive price hikes for certain drugs often used in the hospital such as Hydromorphone (107%), Mitomycin (99%), and Vasopressin (97%).<sup><a href="#fn17">17</a></sup> For another example, the drug manufacturer of Humira, one of the most popular brand drugs used to treat rheumatoid arthritis, increased the price of the drug by 21% between 2019 and 2021.<sup><a href="#fn18">18</a></sup> A study by the Kaiser Family Foundation found that in Medicare Part B and D markets, half of all drugs in each market experienced price increases above the rate of inflation between 2019 and 2020 – in fact, a third of these drugs experienced price increases of greater than 7.5%.<sup><a href="#fn19">19</a></sup> At the same time, according to a report by the Institute for Clinical and Economic Review (ICER), eight drugs with unsupported U.S. drug price increases between 2019 and 2020 alone accounted for an additional $1.67 billion in drug spending, further illustrating that drug companies’ decisions to raise the prices of their drugs are simply an unsustainable practice.<sup><a href="#fn20">20</a></sup></p> <p>As hospitals have worked to treat sicker patients during the pandemic, they have been forced to contend with sky-high prices for drugs, many of which are critical and lifesaving for their patients. For example, in 2020, 16 of the top 25 drugs by spending in Medicare Part B (hospital outpatient settings) had price increases greater than inflation — two of the top three drugs, Keytruda and Prolia — experienced price increases of 3.3% and 4.1%, respectively.<sup><a href="#fn29">21</a></sup></p> <p>As a result of these price increases, hospital drug expenses have skyrocketed. By the end of 2021, total drug expenses were 28.2% higher than pre-pandemic levels.<sup><a href="#fn29">22</a></sup> When taken as a share of all non-labor expenses, drug expenses have grown from approximately 8.2% in January 2019, to 9.3% in January 2021, and to 10.6% in January 2022. (<a href="#figure5">See Figure #5</a>) Even when considering changes in volume during the pandemic, drug expenses per patient compared to pre-pandemic levels in 2019 saw significant increases, with a 36.9% increase through 2021.</p> <p>While continued drug price increases by drug companies have been a major driver of the growth in overall hospital drug expenses, there also are other important driving factors to consider:</p> <ul> <li><strong>Drug Treatments for COVID-19 Patients:</strong> <em>Remdesivir,</em> one of the primary drugs used to treat COVID-19 patients in the hospital, has become the top spend drug for most hospitals since the pandemic. This drug alone accounted for over $1 billion in sales in the fourth quarter of 2021.<sup><a href="#fn23">23</a></sup> Priced at an average of $3,120<sup><a href="#fn24">24</a></sup>, <em>Remdesivir’s</em> cost was initially covered by the federal government. However, hospitals must now purchase the drug directly.</li> <li><strong>Limitation of 340B Contract Pharmacies:</strong> The 340B program allows eligible providers, including hospitals that treat many low-income patients or treat certain patient populations like children and cancer patients, to buy certain outpatient drugs at discounted prices and use those savings to provide more comprehensive services to the patients and communities they serve. Since July 2020, several of the largest drug manufacturers have denied 340B pricing to eligible hospitals through pharmacies with whom they contract, despite calls from the Department of Health and Human Services that such actions are illegal. Because of these actions, many 340B hospitals, especially rural hospitals who disproportionately rely on contract pharmacies to ensure access to drugs for their patients, have lost millions in 340B drug savings.<sup><a href="#fn25">25</a></sup> In addition, these manufacturers have required claim-level data submissions as a condition of receiving 340B discounts, which has increased costs to deliver the data as well as staff time and expense to manage that process. The loss of 340B savings coupled with increased burden of providing detailed data to drug companies have contributed to increasing drug expenses.</li> <li><strong>Health Plans’/Pharmacy Benefit Managers’ (PBMs’) “White Bagging” Policies:</strong> Health plans and PBMs have engaged in a tactic that steers hospital patients to third-party specialty pharmacies to acquire medication necessary for clinician-administered treatments, known as “white-bagging.” This practice disallows the hospital from procuring and managing the handling of a drug — typically drugs that are infused or injected requiring a clinician to administer in a hospital or clinic setting — used in patient care. These policies not only create serious patient safety concerns, but create delays and risks in patient care; add to administration, storage and handling costs; and create important liability issues for hospitals.</li> </ul> <p>Taken together, these factors increase both drug expenses and overall hospital expenses.</p> <h2 id="iiimedical">III. Medical Supply and PPE Expenses</h2> <p>The U.S., like most countries in the world, relies on global supply chains for goods and services. This is especially true for medical supplies used at hospitals and other health care settings. Everything from the masks and gloves worn by staff to medical devices used in patient care come from a large network of global suppliers. Prior to the global pandemic, hospitals had established relationships with distributors and other vendors in the global health care supply chain to deliver goods as necessitated by demand. After the pandemic hit, many factories, distributors and other vendors shut down their operations, leaving hospitals, which were on the front lines facing surging demand, to fend for themselves. In fact, supply chain disruptions across industries, including health care, increased by 67% in 2020 alone.<sup><a href="#fn26">26</a></sup></p> <p>As a result, hospitals turned to local suppliers and non-traditional suppliers, often paying significantly higher rates than they did prior to the pandemic. Between fall 2020 and early 2022 costs for energy, resins, cotton and most metals surged in excess of 30%; these all are critical elements in the manufacturing of medical supplies and devices used every day in hospitals.<sup><a href="#fn27">27</a></sup> As COVID-19 cases surged, demand for hospital PPE, such as N95 masks, gloves, eye protection and surgical gowns, increased dramatically causing hospitals to invest in acquiring and maintaining reserves of these supplies. Further, downstream effects from other global events such as the war in Ukraine and the energy crisis in China, as well as domestic issues, such as labor shortages and rising fuel and transportation costs, have all contributed to drive up even higher overall medical supply expenses for hospitals in the U.S.<sup><a href="#fn28">28</a></sup> For instance, according to the Health Industry Distributors Association, transportation times for medical supplies are 440% longer than pre-pandemic times resulting in massive delays.<sup><a href="#fn29">29</a></sup></p> <p><img alt="Figure #6: Increase in Medical Supply Expenses in 2021 Compared to 2019 Baseline. ICU Medical Supplies: 31.5%. ICU Medical Supplies Per Patient: 31.8%. Respiratory Care Medical Supplies Expense: 22.3%. Respiratory Care Medical Supplies Expense Per Patient: 25.9%. Source: Syntellis Performance Solutions." data-entity-type="file" data-entity-uuid="162238e8-8b87-485b-bdef-dd54ff118e5c" src="/sites/default/files/inline-images/Figure-6-Increase-in-Medical-Supply-Expenses-in-2021-2019.jpg" width="525" height="313" class="align-right"><a id="figure6" name="figure6"></a>Compared to 2019 levels, supply expenses for hospitals were up 15.9%<sup><a href="#fn30">30</a></sup> through the end of 2021. When focusing on hospital departments involved most directly in care for COVID-19 patients − primarily hospital intensive care units (ICUs) and respiratory care departments − the increase in expenses is significantly higher. Medical supply expenses in ICUs and respiratory care departments increased 31.5% and 22.3%, respectively. Further, accounting for changes in volume during surge and non-surge periods of the pandemic, medical supply expenses per patient in ICUs and respiratory care departments were 31.8% and 25.9% higher, respectively. (<a href="#figure6">See Figure #6</a>) These numbers help illustrate the magnitude of the impact that increases in supply costs have had on hospital finances during the pandemic.</p> <h2 id="ivimpact">IV. Impact of Rising Inflation</h2> <p>Higher economy-wide costs have serious implications for hospitals and health systems, increasing the pressures of higher labor, supply, and acquisition costs; and potentially lower consumer demand. Inflation is defined as the general increase in prices and the decrease in purchasing power. It is measured by the Consumer Price Index (CPI-U). In April 2021, the Bureau of Labor Statistics (BLS) reported that the CPI-U had the largest 12-month increase since September 2008. The CPI-U hit 40-year highs in February 2022.<sup><a href="#fn31">31</a></sup> Overall, consumer prices rose by a historic 8.5% on an annualized basis in March 2022 alone.<sup><a href="#fn32">32</a></sup></p> <p>As inflation measured by consumer prices is at record highs, below are key considerations on the potential impact of higher general inflation on hospital prices:</p> <ul> <li><strong>Labor Costs and Retention:</strong> Labor costs represent a significant portion of hospital costs (typically more than 50% of hospital expenses are related to labor costs). As the cost-of-living increases, employees generally demand higher wages/total compensation packages to offset those costs. This is especially true in the health care sector, where labor demands are already high, and labor supply is low.</li> <li><strong>Supply Chain Costs:</strong> Medical supplies account for approximately 20% of hospital expenses, on average. As input/raw good costs increase due to general inflation, hospital supplies and medical device costs increase as well. Furthermore, shortages of raw materials, including those used to manufacture drugs, could stress supply chains (i.e., medical supply shortages), which may result in changes in care patterns and add further burden on staff to implement work arounds.</li> <li><strong>Capital Investment Costs:</strong> Capital investments also may be strained, especially as hospitals have already invested heavily in expanding capacity to treat patients during the pandemic (e.g., constructing spaces for testing and isolation of COVID-19 patients). One of the areas that has seen the largest increase in prices/shortages is building materials (e.g., lumber). Additionally, a historically large increase in inflation has resulted in increases in interest rates, which may hamper borrowing options and add to overall costs.</li> <li><strong>Consumer Demand:</strong> Higher inflation also may result in decreases in demand for health care services, specifically if inflation exceeds wage growth. Specifically, higher costs for necessities (food, transportation, etc.) could push down demand for health care services and, in turn, dampen hospital volumes and revenues in the long run.</li> </ul> <p><img alt="Figure #7: Health Insurance premiums have constantly grown faster than hospital prices over the last decade. Source: Health insurance premiums represent premiums for a family of four, from KFF Employer Health Benefits Survey, 2018–2021, and Kaiser/HRET Survey of Employer Health Benefits (2012–2017). Hospital prices: Bureau of Labor Statistics, annual average Producer Price Index data, 2012–2021 for Hospitals (series ID 622)." data-entity-type="file" data-entity-uuid="ae3db075-0746-4d0e-837f-4f13c858a80c" src="/sites/default/files/inline-images/Figure-7-Health-Insurance-Premiums-Have-Constantly-Grown-Faster-Than-Hospital-Prices.jpg" width="555" height="407" class="align-right"><a id="figure7" name="figure7"></a>Health care and hospital prices are not driving recent overall inflation increases. The BLS has cited increases in the indices for gasoline, shelter and food as the largest contributors to the seasonally adjusted all items increase. The CPI-U increased 0.8% in February on a seasonally adjusted basis, whereas the medical care index rose 0.2% in February. The index for prescription drugs rose 0.3%, but the hospital index for hospital services declined 0.1%.<sup><a href="#fn33">33</a></sup></p> <p>This is consistent with pre-pandemic trends. Despite persistent cost pressures, hospital prices have seen consistently modest growth in recent years. According to BLS data, hospital prices have grown an average 2.1% per year over the last decade, about half the average annual increase in health insurance premiums. (<a href="#figure7">See Figure #7</a>) More recently, hospital prices have grown much more slowly than the overall rate of inflation. In the 12 months ending in February 2022, hospital prices increased 2.1%. In fact, even when excluding the artificially low rates paid to hospitals by Medicare and Medicaid, average annual price growth has still been below 3% in recent years.<sup><a href="#fn34">34</a></sup></p> <h2>Conclusion</h2> <p>While we hope that our nation is rounding the corner in the battle against COVID-19, it is clear that the pandemic is not over. During the week of April 11, there have been an average of over 33,000 cases per day<sup><a href="#fn35">35</a></sup> and reports suggest that a new subvariant of the virus (Omicron BA.2) is now the dominant strain in the U.S.<sup><a href="#fn36">36</a></sup> As a result, the challenges hospitals and health systems are currently facing are bound to last much longer.</p> <p>As COVID-19 infections and hospitalizations are decreasing in some parts of the U.S. and increasing in others, hospitals and health systems continue to care for COVID-19 and non-COVID-19 patients. With additional surges potentially on the horizon, the massive growth in expenses is unsustainable. Most of the nation’s hospitals were operating on razor thin margins prior to the pandemic; and now, many of these hospitals are in an even more precarious financial situation. Regardless of potential new surges of COVID-19, hospitals and health systems continue to face workforce retention and recruitment challenges, supply chain disruptions and exorbitant expenses as outlined in this report.</p> <p>Hospitals appreciate the support and resources that Congress has provided throughout the pandemic; however, additional support is needed now to keep hospitals strong so they can continue to provide care to patients and communities.</p> <hr> <h2>Sources</h2> <ol> <li id="fn1"><a href="https://coronavirus.jhu.edu/map.html" target="_blank">https://coronavirus.jhu.edu/map.html</a></li> <li id="fn2"><a href="https://coronavirus.jhu.edu/map.html" target="_blank">https://coronavirus.jhu.edu/map.html</a></li> <li id="fn3"><a href="https://covid.cdc.gov/covid-data-tracker/#new-hospital-admissions" target="_blank">https://covid.cdc.gov/covid-data-tracker/#new-hospital-admissions</a></li> <li id="fn4"><a href="https://www.kaufmanhall.com/insights/research-report/national-hospital-flash-report-january-2022" target="_blank">https://www.kaufmanhall.com/insights/research-report/national-hospital-flash-report-january-2022</a></li> <li id="fn5"><a href="https://premierinc.com/newsroom/blog/pinc-ai-data-cms-data-underestimates-hospital-labor-spending" target="_blank">https://premierinc.com/newsroom/blog/pinc-ai-data-cms-data-underestimates-hospital-labor-spending</a></li> <li id="fn6"><a href="https://www.ipsos.com/en-us/news-polls/usa-today-ipsos-healthcare-workers-covid19-poll-022222" target="_blank">https://www.ipsos.com/en-us/news-polls/usa-today-ipsos-healthcare-workers-covid19-poll-022222</a></li> <li id="fn7"><a href="https://data.bls.gov/timeseries/ces6562200001?amp%253bdata_tool=xgtable&output_view=data&include_ graphs=true" target="_blank">https://data.bls.gov/timeseries/ces6562200001?amp%253bdata_tool=xgtable&output_view=data&include_ graphs=true</a></li> <li id="fn8"><a href="https://healthdata.gov/hospital/covid-19-reported-patient-impact-and-hospital-capa/g62h-syeh" target="_blank">https://healthdata.gov/hospital/covid-19-reported-patient-impact-and-hospital-capa/g62h-syeh</a></li> <li id="fn9"><a href="https://www.amnhealthcare.com/siteassets/amn-insights/surveys/amn-survey-of-temporary-allied-healthcareprofessional-staff-trends-2021.pdf" target="_blank">https://www.amnhealthcare.com/siteassets/amn-insights/surveys/amn-survey-of-temporary-allied-healthcareprofessional-staff-trends-2021.pdf</a></li> <li id="fn10"><a href="https://www.axios.com/amn-healthcare-pandemic-travel-nurses-profit-revenue-ebb5bcfd-4ca9-4263-a091-fb87bbb8d105.html" target="_blank">https://www.axios.com/amn-healthcare-pandemic-travel-nurses-profit-revenue-ebb5bcfd-4ca9-4263-a091-fb87bbb8d105.html</a></li> <li id="fn11"><a href="https://www.healthcaredive.com/news/hospital-lobbies-congress-ftc-travel-nurse-rate-caps-covid/618194/" target="_blank">https://www.healthcaredive.com/news/hospital-lobbies-congress-ftc-travel-nurse-rate-caps-covid/618194/</a></li> <li id="fn12"><a href="https://www.kaufmanhall.com/sites/default/files/2022-02/nationalhospitalflashreport_feb2022.pdf" target="_blank">https://www.kaufmanhall.com/sites/default/files/2022-02/nationalhospitalflashreport_feb2022.pdf</a></li> <li id="fn13"><a href="https://www.njha.com/pressroom/2022-press-releases/feb-25-2022-hospitals-confront-rising-staff-vacancy-ratesand-employment-costs-as-covid-sparks-unprecedented-workforce-challenges/" target="_blank">https://www.njha.com/pressroom/2022-press-releases/feb-25-2022-hospitals-confront-rising-staff-vacancy-ratesand-employment-costs-as-covid-sparks-unprecedented-workforce-challenges/</a></li> <li id="fn14"><a href="https://pubmed.ncbi.nlm.nih.gov/35385103/" target="_blank">https://pubmed.ncbi.nlm.nih.gov/35385103/</a></li> <li id="fn15"><a href="https://pubmed.ncbi.nlm.nih.gov/33880494/" target="_blank">https://pubmed.ncbi.nlm.nih.gov/33880494/</a></li> <li id="fn16"><a href="https://www.goodrx.com/healthcare-access/drug-cost-and-savings/january-drug-price-hikes-2022" target="_blank">https://www.goodrx.com/healthcare-access/drug-cost-and-savings/january-drug-price-hikes-2022</a></li> <li id="fn17"><a href="/system/files/2019-01/aha-drug-pricing-study-report-01152019.pdf" target="_blank">/system/files/2019-01/aha-drug-pricing-study-report-01152019.pdf</a></li> <li id="fn18"><a href="https://www.goodrx.com/healthcare-access/drug-cost-and-savings/january-2021-drug-increases-recap" target="_blank">https://www.goodrx.com/healthcare-access/drug-cost-and-savings/january-2021-drug-increases-recap</a></li> <li id="fn19"><a href="https://www.kff.org/medicare/issue-brief/prices-increased-faster-than-inflation-for-half-of-all-drugs-covered-bymedicare-in-2020/" target="_blank">https://www.kff.org/medicare/issue-brief/prices-increased-faster-than-inflation-for-half-of-all-drugs-covered-bymedicare-in-2020/</a></li> <li id="fn20"><a href="https://www.kff.org/medicare/issue-brief/prices-increased-faster-than-inflation-for-half-of-all-drugs-covered-bymedicare- in-2020/" target="_blank">https://www.kff.org/medicare/issue-brief/prices-increased-faster-than-inflation-for-half-of-all-drugs-covered-bymedicare- in-2020/</a></li> <li id="fn21"><a href="https://icer.org/wp-content/uploads/2021/04/icer_upi_2021_assessment_031522.pdf" target="_blank">https://icer.org/wp-content/uploads/2021/04/icer_upi_2021_assessment_031522.pdf</a></li> <li id="fn22"><a href="https://www.kaufmanhall.com/insights/research-report/national-hospital-flash-report-january-2022" target="_blank">https://www.kaufmanhall.com/insights/research-report/national-hospital-flash-report-january-2022</a></li> <li id="fn23"><a href="https://www.vizientinc.com/-/media/documents/sitecorepublishingdocuments/public/pmo322_ pharmacymarketoutlook_highlights?sc_camp=a51548e6b3f14b729860854df5b33d2e" target="_blank">https://www.vizientinc.com/-/media/documents/sitecorepublishingdocuments/public/pmo322_ pharmacymarketoutlook_highlights?sc_camp=a51548e6b3f14b729860854df5b33d2e</a></li> <li id="fn24"><a href="https://www.reuters.com/business/healthcare-pharmaceuticals/gilead-covid-drug-takes-top-spot-us-hospitalspending-report-2022-02-01/" target="_blank">https://www.reuters.com/business/healthcare-pharmaceuticals/gilead-covid-drug-takes-top-spot-us-hospitalspending-report-2022-02-01/</a></li> <li id="fn25"><a href="https://www.340bhealth.org/files/contract_pharmacy_survey_findings_january_2022_final.pdf" target="_blank">https://www.340bhealth.org/files/contract_pharmacy_survey_findings_january_2022_final.pdf</a></li> <li id="fn26"><a href="https://premierinc.com/newsroom/blog/report-the-current-state-of-healthcare-supply-chain-disruptions" target="_blank">https://premierinc.com/newsroom/blog/report-the-current-state-of-healthcare-supply-chain-disruptions</a></li> <li id="fn27"><a href="http://www.fccoop.org/?p=10720" target="_blank">http://www.fccoop.org/?p=10720</a></li> <li id="fn28"><a href="https://premierinc.com/newsroom/blog/report-the-current-state-of-healthcare-supply-chain-disruptions" target="_blank">https://premierinc.com/newsroom/blog/report-the-current-state-of-healthcare-supply-chain-disruptions</a></li> <li id="fn29"><a href="https://www.hida.org/distribution/news/press-releases/2022/transportation-delays-persist-healthcare-supplychain.aspx" target="_blank">https://www.hida.org/distribution/news/press-releases/2022/transportation-delays-persist-healthcare-supplychain.aspx</a></li> <li id="fn30"><a href="https://www.kaufmanhall.com/insights/research-report/national-hospital-flash-report-january-2022" target="_blank">https://www.kaufmanhall.com/insights/research-report/national-hospital-flash-report-january-2022</a></li> <li id="fn31"><a href="https://www.bls.gov/news.release/cpi.nr0.htm" target="_blank">https://www.bls.gov/news.release/cpi.nr0.htm</a></li> <li id="fn32"><a href="https://www.wsj.com/articles/us-inflation-consumer-price-index-march-2022-11649725215" target="_blank">https://www.wsj.com/articles/us-inflation-consumer-price-index-march-2022-11649725215</a></li> <li id="fn33"><a href="https://www.bls.gov/news.release/cpi.nr0.htm" target="_blank">https://www.bls.gov/news.release/cpi.nr0.htm</a></li> <li id="fn34">hospital prices: <a href="https://www.bls.gov/ppi/" target="_blank">bureau of labor statistics</a>, annual average ppi industry data for <a href="https://www.bls.gov/iag/tgs/iag622.htm" target="_blank">general medical and surgical hospitals</a> by patient type-private insurance patients, not seasonally adjusted, series id: <a href="https://fred.stlouisfed.org/series/PCU62211A62211A6" target="_blank">pcu62211a62211a</a></li> <li id="fn35"><a href="https://coronavirus.jhu.edu/map.html" target="_blank">https://coronavirus.jhu.edu/map.html</a></li> <li id="fn36"><a href="https://www.nytimes.com/2022/03/29/health/ba2-variant-covid-cases.html" target="_blank">https://www.nytimes.com/2022/03/29/health/ba2-variant-covid-cases.html</a></li> </ol> </div> <div class="col-md-4"> <p><a href="/system/files/media/file/2022/04/2022-Hospital-Expenses-Increase-Report-Final-Final.pdf" target="_blank" title="Click here to download the Massive Growth in Expenses and Rising Inflation Fuel Continued Financial Challenges for America’s Hospitals and Health Systems report PDF."><img alt="Massive Growth in Expenses and Rising Inflation Fuel Continued Financial Challenges for America’s Hospitals and Health Systems page 1." data-entity-type="file" data-entity-uuid="7e202b18-c1ac-41fb-91be-f2d3f709a937" src="/sites/default/files/inline-images/Page-1-2022-Hospital-Expenses-Increase-Report-Final-Final.png" width="1700" height="2200"></a></p> <div class="external-link spacer"><a class="btn btn-wide btn-primary" href="/guidesreports/2021-10-25-2021-cost-caring" target="_blank">View the 2021 Cost of Caring Report</a></div> </div> </div> </div> Thu, 20 Apr 2023 04:00:00 -0500 COVID-19: Coverage and Reimbursement /news/headline/2023-04-04-fema-releases-update-deadlines-covid-19-program-funding <p>Costs incurred after the public health emergency ends May 11 will not be eligible for funding under the COVID-19 Public Assistance Program, the Federal Emergency Management Agency <a href="https://www.fema.gov/sites/default/files/documents/fema_policy-issuance-memo-covid-19-programmatic-deadlines-signed_032023.pdf">announced</a> March 30.  </p> <p>“However, in recognition that costs may be incurred for demobilization, disposition, and disposal activities after the end of the emergency work completion deadline, FEMA is providing a limited 90-day extension (August 9, 2023) to complete demobilization, disposition, and disposal activities,” the guidance adds. </p> Tue, 04 Apr 2023 14:36:35 -0500 COVID-19: Coverage and Reimbursement /news/headline/2023-01-30-cms-releases-more-guidance-states-unwinding-medicaid-continuous-enrollment-requirement <p>The Centers for Medicare & Medicaid Services Friday released <a href="https://www.medicaid.gov/federal-policy-guidance/downloads/sho23002.pdf">additional guidance</a> on changes to the Medicaid continuous enrollment requirement under recently enacted legislation funding the federal government through fiscal year 2023. The Families First Coronavirus Response Act required states claiming a temporary 6.2 percentage point increase in the Federal Medical Assistance Percentage to continue Medicaid coverage for most enrollees through the COVID-19 public health emergency. Under the Consolidated Appropriations Act of 2023, the Medicaid continuous enrollment requirement will end April 1; the temporary FMAP increase will phase down beginning April 1 and end on Dec. 31. The Act also establishes new state reporting requirements and enforcement authorities for the Centers for Medicare & Medicaid Services, as discussed in the guidance.</p> <p>CMS also <a href="https://www.cms.gov/technical-assistance-resources/temp-sep-unwinding-faq.pdf">released guidance</a> on an Exceptional Circumstances Special Enrollment Period for eligible consumers losing continuous Medicaid or CHIP coverage to enroll in Marketplace coverage between March 31, 2023 and July 31, 2024.</p> Mon, 30 Jan 2023 16:06:00 -0600 COVID-19: Coverage and Reimbursement <div class="container"> <div class="row"> <div class="col-md-8"> <p>The Wall Street Journal today published an <a href="https://www.wsj.com/articles/billions-in-covid-aid-went-to-hospitals-that-didnt-need-it-11670164570" target="_blank" title>article</a> examining the federal government’s distribution of COVID-19 emergency funding to hospitals through the Provider Relief Fund (PRF). The article discusses a number of aspects of the PRF distribution, including the initial formula the Department of Health and Human Services used at the beginning of the pandemic to disburse the funds, and how hospitals used the funds.</p> <h2>AHA Take</h2> <p>The AHA believes that the article misses the mark in a number of areas and has sent a letter to the editor of the Wall Street Journal in response. Among other areas, the article:</p> <ul> <li>Fails to adequately acknowledge the urgency to get initial funding to hospitals as they were overrun with COVID-19 patients and many were required to stop providing non-emergent care at the beginning of the pandemic. These resources were a critical lifeline during an uncertain time when virtually all revenues necessary to keep our doors open were shut down by government action.</li> <li>Tries to draw comparisons between the number of COVID-19 deaths in a community and the amount of PRF funds received. Under the law, the number of COVID-19 deaths in a community did not have anything to do with the distribution of funds, and would have been an unworkable metric at the beginning of the pandemic.</li> <li>Fails to highlight how under the law any funds not used for COVID-19 expenses and lost revenue must be returned to the government.</li> </ul> <p>Importantly, the piece does not recognize the financial distress the nation’s hospitals and health systems are facing today after three years of COVID-19 and inflationary pressures on workforce, supplies and equipment required to take care of patients.</p> <h2>What You Can Do</h2> <ul> <li><strong>Please share this Advisory</strong> with your leadership, government relations and communications teams.</li> <li><strong>Review the updated <a href="/system/files/media/file/2022/12/Talking-Points-on-Provider-Relief-Fund.pdf">talking points</a> that can assist you in responding to questions about the PRF.</strong></li> <li><strong>Prepare to tell how your hospital or health system used the COVID-19 PRF money</strong> to prevent, prepare for, and respond to COVID-19, including by setting up alternative care sites, procuring testing, administering vaccines and supporting their workforce. <p> </p> </li> </ul> <h2>Further Questions</h2> <p>If you have further questions, please contact Colin Milligan, AHA senior director of media relations, at <a href="mailtocmilligan@aha.org">cmilligan@aha.org</a> or <a href="1-202-638-5491">202-638-5491</a>.</p> </div> <div class="col-md-4"> <p><a href="/system/files/media/file/2022/12/Member-Advisory-Article-Spotlights-Distribution-of-COVID-19-Provider-Relief-Funds-to-Hospitals.pdf" target="_blank" title="Click here to download the Member Advisory: Article Spotlights Distribution of COVID-19 Provider Relief Funds to Hospitals PDF."><img alt="Member Advisory: Article Spotlights Distribution of COVID-19 Provider Relief Funds to Hospitals page 1." data-entity-type="file" data-entity-uuid="e1d18b1c-662f-4286-b4a2-9d89962450a3" src="/sites/default/files/inline-images/Page-1-Member-Advisory-Article-Spotlights-Distribution-of-COVID-19-Provider-Relief-Funds-to-Hospitals.png" width="695" height="900"></a></p> </div> </div> </div> Mon, 05 Dec 2022 17:11:19 -0600 COVID-19: Coverage and Reimbursement <div class="container"> <div class="row"> <div class="col-md-8"> <p>The Federal Emergency Management Agency (FEMA) recently issued new <a href="https://www.fema.gov/sites/default/files/documents/fema_covid-19-patient-care-revenue-duplication-benefits.pdf" target="_blank">COVID-19 Public Assistance (PA) guidance</a> for health care providers, which describes the methodology it will use to review medical billing costs as part of applications for FEMA reimbursement for certain costs associated with the COVID-19 pandemic. The guidance, which is posted to FEMA’s <a href="https://grantee.fema.gov/" target="_blank">Grants Portal</a> and <a href="https://www.fema.gov/assistance/public/policy-guidance-fact-sheets/disaster-specific-guidance-covid-19-declarations" target="_blank">COVID-19 Guidance page</a>, outlines the process the agency will use to identify and reduce PA funding for any expense for which funding has already been received from another program, insurance or any other source. Federal law and FEMA guidance prohibit FEMA from covering costs that are eligible for coverage by another source, referred to as a prohibition on “duplication of benefits” (DOB). During the COVID-19 pandemic, funding from numerous sources has complicated FEMA’s ability to reimburse expenses while also ensuring that benefits are not duplicated.</p> <h2>AHA Take</h2> <p>In issuing this guidance, FEMA has taken stakeholder input into consideration, including by providing hospitals and health systems with reporting flexibility. The AHA will continue to review the guidance, as well as urge FEMA to expedite the processing and funding of hospital and health system COVID-19 PA applications.</p> <h2>Risk-Based Approach</h2> <p>FEMA has developed a risk-based approach to review PA projects for potential DOB involving patient care revenue. This approach considers factors such as project size, type of expenses claimed and whether expenses are billable to patients. As part of the review, FEMA classifies each PA project as having low or high risk of DOB.</p> <p>FEMA considers projects <em>low risk</em> if they fall below the COVID-19 large-project threshold<sup><a href="#fn1">1</a></sup> <strong>and</strong> (1) the health care provider applicant has not received patient care revenue for expenses claimed in the project <strong>or</strong> (2) the applicant received patient care revenue for expenses claimed in the project and it appropriately reduced its request to FEMA to avoid DOB. For these projects, applicants must certify that they have reduced their project to avoid duplication and provide a brief narrative description of their approach.</p> <p><em>High risk</em> projects are large projects where the health care provider applicant has received patient care revenue for expenses claimed in the project. FEMA reviews these projects to confirm that there is no duplication; confirm the applicant resolved any duplication; or calculate how much the project needs to be reduced to avoid duplicative payment.</p> <p>There are three types of high risk project reviews. The method FEMA utilizes depends on whether the health care provider applicant used their own method for identifying and addressing duplication and the amount claimed for the project.</p> <h3>High-Risk Project Review Approach 1 — Applicant-provided Methodology</h3> <p>FEMA strongly encourages health care provider applicants to provide their own data and description of the methods used to assess duplication; to take reductions where needed; and to demonstrate compliance with applicable law, regulation and policy. In these cases, FEMA will assess the methodology’s reasonableness on a case-by-case basis. The guidance describes what FEMA considers to be characteristics of reasonable methods, as well as those that raise concern.</p> <h3>High-Risk Project Review Approach 2 — Reviews with Public Data</h3> <p>If an applicant does not provide their own method and data for addressing DOB, or if their method is determined to not be reasonable, and the project is less than $25 million, FEMA will use public data sources (e.g. hospital/health care system financial statements and Medicare cost reports) to assess duplication with patient care revenue using FEMA’s DOB method.</p> <p>To complete the analysis, FEMA will:</p> <ol> <li>Identify which claimed costs are likely to generate patient care revenues (“high likelihood”) and which are not (“low likelihood”). Examples of low and high likelihood are listed in the guidance.</li> <li>Exclude costs that have a low likelihood of generating revenue.</li> <li>Calculate ceilings for the applicant for each cost category (including labor, non-personal protective equipment supplies and equipment) for each calendar year using publicly available data. FEMA defines ceilings as the maximum amounts it could pay without causing duplication with patient care revenue.</li> <li>Apply ceilings to any claimed costs in a category with high likelihood of generating revenues.</li> <li>Take reductions if that category’s ceilings are surpassed that year.</li> </ol> <h3>High-Risk Project Review Approach 3 — Reviews with Applicant Data</h3> <p>If a health care provider applicant does not provide its own reasonable method and supporting information for addressing DOB, and the project is greater than $25 million, the provider must submit its operating expense and patient care revenue data, which FEMA will use to assess duplication. FEMA will follow the same steps outlined in approach two, but will use the information provided by the applicant.</p> <h2>Review and Reduction Process</h2> <p>For the purpose of determining any potential DOB, the allowable ceilings for each cost category are compared to the PA project costs by category. If the costs claimed by the applicant are lower than or equal to the allowable ceiling, this indicates no duplication with patient-care revenue and FEMA makes no reduction. If the costs claimed are higher than the allowable ceiling, the project is reduced so as not to exceed the ceiling and to avoid DOB. Finally, if the allowable ceiling is zero or negative in the cost category, then FEMA determines that the expenditures were fully covered by patient-care revenue and the claimed project costs in this category are not eligible for funding.</p> <p>When assessment of the PA project is completed, FEMA will provide an analysis of the project to the applicant. If a reduction is not needed, the project will move forward to obligation or closeout depending on the project’s status when the assessment occurs. If an applicant disagrees with FEMA’s determination, they may appeal the determination at final reconciliation of the project.</p> <h2>Further Questions</h2> <p>FEMA requests that questions or comments on the guidance or the new process be emailed to <a href="https://www.fema.gov/assistance/public/policy-guidance-fact-sheets/disaster-specific-guidance-covid-19-declarations" target="_blank">fema-pa-patientcarerevenue@fema.dhs.gov</a>.</p> <p>For further questions, please contact Roslyne Schulman, AHA’s director of policy, at <a href="mailto:rschulman@aha.org">rschulman@aha.org</a>.</p> <hr> <ol> <li id="fn1">The large project threshold for COVID-19 events is $131,100 for projects obligated prior to Aug. 3, 2022, and $1 million for projects obligated on or after Aug. 3, 2022.</li> </ol> </div> <div class="col-md-4"> <p><a href="/system/files/media/file/2022/10/Special-Bulletin-FEMA-Issues-COVID-19-Patient-Care-Revenue-Duplication-of-Benefits-Guidance.pdf"><img alt="Special Bulletin: FEMA Issues COVID-19 Patient Care Revenue Duplication of Benefits Guidance PDF." data-entity-type="file" data-entity-uuid="d0de3741-6284-4958-9e35-8f2a3cde2965" src="/sites/default/files/inline-images/Page-1-Special-Bulletin-FEMA-Issues-COVID-19-Patient-Care-Revenue-Duplication-of-Benefits-Guidance.png" width="695" height="900"></a></p> </div> </div> </div> Fri, 14 Oct 2022 13:01:23 -0500 COVID-19: Coverage and Reimbursement /amicus-brief/2022-10-03-amicus-brief-aha-others-glenhaven-healthcare-llc-v-jackie-saldana-prep-act <p>NO. 22-192</p> <h2>In the<br /> Supreme Court of the United States</h2> <p>________________</p> <h3>GLENHAVEN HEALTHCARE LLC,<br /> a California corporation, et al.,<br /> <em>Petitioners,</em></h3> <h3>v.</h3> <h3>JACKIE SALDANA, et al.,<br /> <em>Respondents.</em></h3> <p>________________</p> <p>On Petition for Writ of Certiorari to the United States Court of Appeals for the Ninth Circuit</p> <p>________________</p> <h3>BRIEF OF THE CHAMBER OF COMMERCE<br /> OF THE UNITED STATES OF AMERICA,<br /> THE AMERICAN HOSPITAL ASSOCIATION,<br /> THE AMERICAN HEALTH CARE<br /> ASSOCIATION, AND THE AMERICAN TORT<br /> REFORM ASSOCIATION AS <em>AMICI CURIAE</em><br /> IN SUPPORT OF THE PETITION</h3> <p>________________</p> <div class="row"> <div class="col-md-6"> <p>Jennifer B. Dickey<br /> U.S. CHAMBER LITIGATION CENTER<br /> 1615 H Street NW<br /> Washington, DC 20062<br /> <em>Counsel for the Chamber of Commerce of the United States of America</em></p> </div> <div class="col-md-6"> <p>Jeffrey S. Bucholtz<br /> <em>Counsel of Record</em><br /> Alexander Kazam<br /> KING & SPALDING LLP<br /> 1700 Pennsylvania Ave. NW<br /> Washington, DC 20006<br /> (202) 737-0500<br /> jbucholtz@kslaw.com<br /> <em>Counsel for the Chamber of Commerce of the United States of America and ���������� Association</em></p> </div> </div> <p>(Additional counsel listed on inside cover)</p> <p>September 30, 2022</p> <hr /> <h2>TABLE OF CONTENTS</h2> <p><a href="/system/files/media/file/2022/10/Amicus-Brief-Glenhaven-Healthcare-LLC-v-Jackie-Saldana-PREP-Act-Immunity-Case-20220930.pdf#page=4">TABLE OF AUTHORITIES</a></p> <p><a href="/system/files/media/file/2022/10/Amicus-Brief-Glenhaven-Healthcare-LLC-v-Jackie-Saldana-PREP-Act-Immunity-Case-20220930.pdf#page=10">INTEREST OF AMICI CURIAE</a></p> <p><a href="/system/files/media/file/2022/10/Amicus-Brief-Glenhaven-Healthcare-LLC-v-Jackie-Saldana-PREP-Act-Immunity-Case-20220930.pdf#page=12">INTRODUCTION AND SUMMARY OF ARGUMENT</a></p> <p><a href="/system/files/media/file/2022/10/Amicus-Brief-Glenhaven-Healthcare-LLC-v-Jackie-Saldana-PREP-Act-Immunity-Case-20220930.pdf#page=16">ARGUMENT</a></p> <p><a href="/system/files/media/file/2022/10/Amicus-Brief-Glenhaven-Healthcare-LLC-v-Jackie-Saldana-PREP-Act-Immunity-Case-20220930.pdf#page=16">I. The Question Presented Is of Exceptional Importance</a></p> <p><a href="/system/files/media/file/2022/10/Amicus-Brief-Glenhaven-Healthcare-LLC-v-Jackie-Saldana-PREP-Act-Immunity-Case-20220930.pdf#page=16">A. COVID-19 Has Posed Unprecedented Challenges for American Businesses, Especially Healthcare Providers</a></p> <p><a href="/system/files/media/file/2022/10/Amicus-Brief-Glenhaven-Healthcare-LLC-v-Jackie-Saldana-PREP-Act-Immunity-Case-20220930.pdf#page=20">B. The Decision Below Undermines the PREP Act’s Critical Safeguards for Front-Line Responders</a></p> <p><a href="/system/files/media/file/2022/10/Amicus-Brief-Glenhaven-Healthcare-LLC-v-Jackie-Saldana-PREP-Act-Immunity-Case-20220930.pdf#page=26">II. The Decision Below Creates a Circuit Split and Conflicts With This Court’s Precedent</a></p> <p><a href="/system/files/media/file/2022/10/Amicus-Brief-Glenhaven-Healthcare-LLC-v-Jackie-Saldana-PREP-Act-Immunity-Case-20220930.pdf#page=31">CONCLUSION</a></p> Mon, 03 Oct 2022 09:54:01 -0500 COVID-19: Coverage and Reimbursement