HHS Announces Two New Health IT Workforce Grants

December 29, 2009 by  
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The Office of the National Coordinator for Health Information Technology (ONC) in the Department of Health and Human Services (HHS) have announced the availability of two additional grant programs to support the training and development of the skilled workforce required to support broad adoption and use of health information technology (health IT).

Authorized by the American Recovery and Reinvestment Act (ARRA), the new grant programs will award $32 million to establish university-based certificate and advanced degree health IT training programs and $6 million to develop a health IT competency examination program. These awards, together with the previously announced $80 million in workforce program grants, recognize the critical importance of developing a well-trained health IT workforce to support the adoption and meaningful use of health IT.

“To realize the widespread adoption of EHRs and achieve the vision of a transformed health system that health IT can facilitate, the workforce needs to be expanded and properly trained to facilitate rapid uptake of health IT by healthcare providers,” said the National Coordinator for Health Information Technology, Dr. David Blumenthal. “The workforce development program is expected to generate highly skilled professionals in key roles to meet 85 percent of the estimated need for expansion of the health IT workforce, who will in turn support healthcare providers and hospitals implement and maintain electronic health records and use them to strengthen the delivery of care.”

Information about the HITECH grants available through the workforce development program is available at http://HealthIT.HHS.gov and www.grants.gov .

Regulations Issued on ‘Meaningful Use’ and EHR Incentive Program Standards

December 29, 2009 by  
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The Centers for Medicare & Medicaid Services (CMS) and the Office of the National Coordinator for Health Information Technology (ONC) have issued two regulations that list the “meaningful use” criteria healthcare providers must meet to quality for federal funding of their information technology projects under the American Recovery and Reinvestment Act of 2009.

A proposed rule issued by CMS outlines proposed provisions governing the EHR incentive programs, including defining the central concept of “meaningful use” of EHR technology. An interim final regulation (IFR) issued by ONC sets initial standards, implementation specifications, and certification criteria for EHR technology. Both regulations are open to public comment.

The IFR issued by ONC describes the standards that must be met by certified EHR technology to exchange healthcare information among providers and between providers and patients. This initial set of standards begins to define a common language to ensure accurate and secure health information exchange across different EHR systems. The IFR describes standard formats for clinical summaries and prescriptions; standard terms to describe clinical problems, procedures, laboratory tests, medications and allergies; and standards for the secure transportation of this information using the Internet.

The IFR calls for the industry to standardize the way in which EHR information is exchanged between organizations, and sets forth criteria required for an EHR technology to be certified. These standards will support meaningful use and data exchange among providers who must use certified EHR technology to qualify for the Medicare and Medicaid incentives.

Under the statute, HHS is required to adopt an initial set of standards for EHR technology by Dec. 31, 2009. The IFR will go into effect 30 days after publication, with an opportunity for public comment and refinement over the next 60 days. A final rule will be issued in 2010.

The Recovery Act established programs to provide incentive payments to eligible professionals and eligible hospitals participating in Medicare and Medicaid that adopt and make “meaningful use” of certified EHR technology. Incentive payments may begin as soon as October 2010 to eligible hospitals. Incentive payments to other eligible providers may begin in January 2011.

The proposed rule would define the term “meaningful EHR user” as an eligible professional or eligible hospital that, during the specified reporting period, demonstrates meaningful use of certified EHR technology in a form and manner consistent with certain objectives and measures presented in the regulation. These objectives and measures would include use of certified EHR technology in a manner that improves quality, safety, and efficiency of healthcare delivery, reduces healthcare disparities, engages patients and families, improves care coordination, improves population and public health, and ensures adequate privacy and security protections for personal health information.

The proposed rule would define meaningful use for the Medicare EHR incentive programs. It proposes one definition that would apply to eligible professionals participating in the Medicare fee-for-service and the Medicare Advantage EHR incentive programs as well as a proposed definition that would apply to eligible hospitals and critical access hospitals. These definitions also would serve as the minimum standard for eligible professionals and eligible hospitals participating in the Medicaid EHR incentive program. The rule proposes that states could request CMS approval to implement additional meaningful use measures, as appropriate, but could not request approval of fewer or less rigorous meaningful use measures than required by the rule.

This rule proposes a phased approach to implement the proposed requirements for demonstrating meaningful use. This approach would initially establish reasonable criteria for meaningful use based on currently available technological capabilities and providers’ practice experience. CMS will establish stricter and more extensive criteria for demonstrating meaningful use over time, as anticipated developments in technology and providers’ capabilities occur.

CMS provides a 60-day comment period on the proposed rule. The CMS proposed rule and fact sheets, may be viewed at http://www.cms.hhs.gov/Recovery/11_HealthIT.asp

ONC’s interim final rule may be viewed at http://healthit.hhs.gov/standardsandcertification. In early 2010 ONC intends to issue a notice of proposed rulemaking related to the certification of health information technology.

Read the HHS press release.

Senate Approves Landmark Healthcare Reform Bill

December 23, 2009 by  
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In its first Christmas Eve session since 1963, the Senate voted 60 to 39 to pass its healthcare reform bill. This action represents the culmination of months of intensive debate and negotiations, resulting in a bill that President Obama has said “offers security to those who have health insurance and affordable options to those who do not.”

The legislation seeks to extend insurance coverage to 94 percent of Americans, including 31 million who are currently uninsured.

An analysis by the nonpartisan Congressional Budget Office (CBO) found that the $871 billion cost of the Senate-approved bill would be more than offset by new revenues and cuts in spending, so that it would reduce future federal budget deficits by $132 billion between 2010 and 2019.

HFMA has prepared a summary of the substantial differences that exist between the Senate and House-approved healthcare reform bills. The two bills must now be reconciled through a conference committee process and merged into a final bill, which will be scored by the CBO. The bill will then go to the President’s desk for signature.

In a message to HFMA members upon the bill’s passage, HFMA President and CEO Richard L. Clarke, DHA, FHFMA, said, “Healthcare providers would be well advised not to “hunker down” and wait for legislation to be enacted….The start of a new year is the perfect time to infuse our organizations with a sense of optimism about the possibilities engendered by the imminence of reform legislation. Let’s resolve to make the most of the opportunities reform may bring, and redouble our efforts to overcome the longstanding challenges our industry faces.” Dr. Clarke also will address the impact of reform on hospitals in a presentation at HFMA’s upcoming Virtual Conference.

CMS Instructs Contractors to Hold Certain Claims

December 22, 2009 by  
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The Centers for Medicare & Medicaid Services (CMS) has instructed its contractors to hold claims containing services paid under the Medicare Physician Fee Schedule (MPFS) for the first 10 business days of January (Jan. 1 through Jan. 15) for 2010 dates of service. CMS says this should have minimum impact on provider cash flow because, under current law, clean electronic claims are not paid any sooner than 14 calendar days (29 days for paper claims) after the date of receipt. Meanwhile, all claims for services delivered on or before Dec. 31, 2009, will be processed and paid under normal procedures.

After 10 business days, contractors will begin releasing held claims into processing under the fee schedule which implements current law. This, of course, could result in claims being processed with the negative 21.2 percent update. If a new law is enacted which changes the negative update effective Jan. 1, CMS will correctly process claims under the new law and, if necessary, CMS is prepared to automatically reprocess most of those claims which have already been processed at the lower rate.

Under the Medicare statute, Medicare payments to physicians and other affected providers are based on the lesser of the actual charge or the MPFS amount. Providers who submit charges that are greater than the negative 2010 MPFS will automatically have their claims reprocessed.

Physicians who submit charges that are equal to or less than the 2010 MPFS amount will need to request an adjustment. Submitted charges on claims cannot be altered without a request from the physician/provider.

To the extent possible, providers may hold claims in-house until it becomes clearer as to whether new legislation will be enacted or until cash flow becomes problematic. This will reduce the need for providers to reconcile two payments (i.e., the initial claim and the reprocessed claim), and it will simplify provider billings of beneficiary coinsurance and payment calculations for secondary payers.

CMS has extended the 2010 Annual Participation Enrollment Program end date from Jan. 31, 2010, to March 17, 2010. Therefore, the enrollment period now runs from Nov. 13, 2009, through March 17, 2010. The effective date for any Participation status change during the extension, however, remains Jan. 1, 2010, and will be in force for the entire year. Contractors will accept and process any Participation elections or withdrawals, made during the extended enrollment period that are received or postmarked on or before March 17, 2010.

Senate on Track for Reform Vote on Christmas Eve

December 20, 2009 by  
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Shortly after 1 a.m. Monday, the Senate voted 60 to 40 along party lines to cut off a Republican filibuster on a package of changes to the pending healthcare reform legislation by Senate majority leader Harry Reid of Nevada. This key vote was one in a series of procedural hurdles that will likely be cleared in time for the long-awaited Senate vote on the reform bill to take place on Christmas Eve.

After the Senate bill passes, it must be reconciled with the bill adopted by the House last month. Substantial differences between the two include the presence of a public option in the House bill that has been dropped from the Senate bill.

The legislation seeks to extend insurance coverage to more than 30 million people who are currently uninsured. The bill would impose penalties on most Americans who do not purchase insurance, and it would provide federal subsidies to help moderate-income Americans buy private coverage.

About half of those who would gain coverage would do so through a broad expansion of Medicaid and growth in the Children’s Health Insurance Program.

To pay for the new coverage, the bill would impose an array of fees and taxes, including an increase in the payroll tax for individuals earning more than $200,000 and couples earning more than $250,000 and an excise tax on high-cost insurance polices. The bill also calls for major reductions in government spending by slowing the growth of Medicare.

The nonpartisan Congressional Budget Office said that the $871 billion cost of the bill would be more than offset by new revenues and cuts in spending, so that it would reduce future federal budget deficits by $132 billion between 2010 and 2019.

Senate to Vote on Bill to Delay Physician Pay Cuts, Extend COBRA Subsidy

December 17, 2009 by  
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The Senate voted early Friday morning to force final action on a defense appropriations bill that Republicans had threatened to block in an attempt to stall action on the healthcare overhaul, The New York Times reported on Friday.

The House of Representatives passed the military spending bill on Dec. 16, voting 395-34 to approve the package that would also delay for two months the 21.2 percent Medicare physician payment cut scheduled to take effect on Jan. 1. The bill also includes a six-month extension of a federal COBRA subsidy that lowers insurance premiums by 65 percent for some unemployed U.S. workers. Under this measure, the subsidy would be extended from nine to 15 months and eligibility would be expanded to include those who lose their jobs through Feb. 28, 2010. The nine-month subsidy began expiring last month for some employees.

Now that the Senate has voted to close off debate on the legislation, a final vote is expected early Saturday.

Cost Reduction Is Top Health Industry Issue for 2010: Report

December 16, 2009 by  
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Healthcare cost control is at the head of the list as the overarching theme for the year ahead, according to a report issued today by PricewaterhouseCoopers’ Health Research Institute.

“Healthcare typically lags trends in the business cycle by a year or more. While flat may be the new growth for other sectors of the U.S. economy, the recession could hit healthcare in 2010,” said David Chin, M.D., partner and leader of PricewaterhouseCoopers’ Health Research Institute in a press release.

“The primary emphasis for all healthcare organizations in the year ahead will be on reducing costs and creating greater value in the health system, a focus that will have a domino effect from one sector to another and redefine roles, responsibilities, and relationships.”

The report lists the following as the top 10 issues in the healthcare industry in 2010:

1. Intense effort to reduce healthcare costs
2. Aftermath of healthcare reform
3. Government accelerates change through rewards and penalties
4. Focus on fraud and mistakes
5. Technology and telecommunications sectors become leading players in health care
6. Big pharma joins the healthcare delivery team
7. Physician groups to rejoin health systems
8. Alternative care delivery models to emerge
9. H1N1 elevates emphasis on readiness for public health outbreak
10. Community health becomes new social responsibility

Surgical Quality Difficult for Health Plans to Assess: Study

December 16, 2009 by  
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Health plans face significant challenges in reliably assessing the quality of individual surgeons’ patient outcomes, and need better ways to measure physician quality when selecting the best surgeons for their members, according to a study published in the December American Journal of Managed Care.

The study examined the results of more than 220,000 coronary artery bypass graft (CABG) procedures performed in 75 Florida hospitals between 1998 and 2006.

Marco Huesch, a physician and assistant professor of strategy at Duke University’s Fuqua School of Business, conducted the analysis. “While it might be natural to assume that health plans select surgeons based on the quality of their patient outcomes, as it turns out, it’s generally almost impossible for an individual company to do so,” Huesch said in a statement.

Huesch’s analysis of rates of in-hospital mortality did find differences in outcomes between surgeons. However, it also confirmed that the law of small numbers, a situation where there are too few items in a sample to draw reliable conclusions, would prevent insurers from accurately assessing the quality of the Florida surgeons’ care.

“While we found differences in mortality rates across physicians, no single insurance provider had enough patients undergoing surgeries by the same physicians in order to generate statistically significant data against which it could judge outcomes,” Huesch said. He said the current effort to reform U.S. health care is likely to exacerbate the situation. “As we create new insurance entities to cover previously uninsured Americans, we’ll simply have even more data being collected by separate companies, none of which is being combined in a way that it can be usefully evaluated.”

Potentially Preventable Hospitalizations for Older Adults Have Declined: AHRQ

December 15, 2009 by  
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Between 2003 and 2007, rates of potentially preventable hospitalizations declined faster among older adults (age 65 and over) than among younger adults, according to a new report from the Agency for Healthcare Research and Quality (AHRQ). Rates of hospital stays among older adults decreased for angina (without procedure), congestive heart failure, and diabetes, among other conditions. In contrast, the rate of diabetes-related stays among younger adults increased during the study period.

Overall, rates of potentially preventable hospitalizations in 2007 for diabetes, chronic respiratory conditions, chronic cardiac conditions, and acute conditions remained consistently higher for adults aged 65 and over than for younger adults. The over-65 group accounted for one-third of all hospitalizations in the United States in 2007.

Hospital Prices Drop 0.5 Percent in November

December 14, 2009 by  
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Overall hospital prices decreased by 0.5 percent in November, and were 2.3 percent higher than a year ago, the Bureau of Labor Statistics (BLS) reported today. Prices for general medical and surgical hospitals declined by 0.5 percent, and were 2.4 percent higher than in November 2008, according to the BLS’ Producer Price Indices. For hospitals, the PPI measures changes in actual or expected reimbursement received for services across all payer types. This includes the negotiated contract rate from the payer plus the patient portion of the bill.

Medicare Fraud Strike Force Expands Operations; 30 Individuals Indicted

December 14, 2009 by  
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Thirty people have been charged in three cities for their alleged roles in schemes to submit more than $61 million in false Medicare claims as part of the continuing operation of the Medicare Fraud Strike Force, Department of Health and Human Services (HHS) Secretary Kathleen Sebelius and Assistant Attorney General Lanny A. Breuer of the Criminal Division announced today. Also today, the Departments of Justice (DOJ) and HHS announced the expansion of Strike Force operations to Brooklyn, Tampa, and Baton Rouge, La., in the fifth, sixth, and seventh phases of a targeted criminal, civil, and administrative effort against individuals and healthcare companies that fraudulently bill the Medicare program.

Five indictments were unsealed today in Miami, Detroit, and Brooklyn, following the arrests of 25 individuals in Miami, four individuals in Detroit, and one in Brooklyn. In addition, Strike Force agents executed four search warrants at businesses and homes in Coconut Creek, Fla.; Miami, and Brooklyn.

The joint DOJ-HHS Medicare Fraud Strike Force is a multi-agency team of federal, state, and local investigators designed to combat Medicare fraud through the use of Medicare data analysis techniques and an increased focus on community policing. Strike Force teams are operating in seven cities: Miami, Los Angeles, Detroit, Houston, Brooklyn, Tampa, and Baton Rouge.
Individuals charged in indictments announced today are accused of various Medicare fraud crimes, including conspiracy to defraud the Medicare program, conspiracy to launder money, money laundering, criminal false claims, making false statements, and receiving kickbacks.

Medicare Actuary: Proposed Reform Legislation Would Increase Costs

December 13, 2009 by  
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A report released late last week by economic analysts at the Centers for Medicare and Medicaid Services’ Office of the Actuary said the nation’s $2.5 trillion annual healthcare tab would actually increase under Democratic healthcare reform proposals currently being considered by the Senate, the Associated Press reports. The CMS report went on to say that the draft legislation’s proposed $493 billion in Medicare cuts over a 10-year period are based on policy changes that “may be unrealistic” and could lead to service cuts.

The analysis from the Office of the Actuary was prefaced by a disclaimer saying it did not represent the official position of the Obama administration. Unlike estimates from the Congressional Budget Office, which have mainly focused on the bill’s impact on the federal deficit, the actuaries looked at total public and private costs over the next 10 years.

Subsequently, The Wall Street Journal reported that Sens. Joe Lieberman (I-Conn.) and Ben Nelson (D-Neb.) raised concerns over the proposal to open Medicare to individuals below the age of 65, a key element of a compromise reached last week among senior Senate Democrats. Without the two senators’ support, passage of the bill would be in doubt, The Wall Street Journal says, as 60 votes would be needed to overcome a procedural hurdle that Republicans are expected to mount against the legislation.

Council of Economic Advisors: Reform Will Reduce Federal Spending by 2019

December 13, 2009 by  
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A report issued today by the president’s Council of Economic Advisors (CEA) sought to strengthen the economic case for reform, arguing that the legislation currently working its way through Congress can deliver on its promise to substantially reduce the growth rate of healthcare costs in both the public and private sectors in the years ahead, provided key cost containment features are preserved in the final bill. Among the report’s specific findings are the following:

  • By 2019, total federal spending on Medicare and Medicaid would be lower than it would have been absent reform, through reductions in waste, fraud, and abuse along with delivery system reforms that reward quality and efficiency.
  • From 2016 to 2019, the annual growth rate of federal spending on Medicare and Medicaid would be at least 0.7 percentage points lower than it otherwise would have been.
  • These reductions would also help lower the growth rate of Medicare recipients’ Part B premiums.

Taken together, the combination of Medicare and Medicaid-related provisions in the Senate’s Patient Protection and Affordable Care Act are estimated to reduce the annual growth rate of federal spending on both programs by 1.0 percentage point in the upcoming decade and by a greater amount in the following decade, the report says.

In the private sector, CEA estimates that the proposed excise tax on high-cost insurance plans will reduce the growth of annual healthcare costs by 0.5 percentage point per year from 2012 to 2018. Provisions other than the excise tax could generate an additional reduction in the growth rate of private-sector healthcare costs of 0.5 percentage point, for a total slowing of private-sector cost growth of approximately 1.0 percentage point per year.

View the CEA report.

CMS: Providers Must Wait for Medicare Claim Crossover Process to Work

December 9, 2009 by  
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In its MLN Matters newsletter, the Centers for Medicare & Medicaid Services (CMS) reminds all providers, physicians, and suppliers to allow sufficient time for the Medicare crossover process to work—approximately 15 work days after Medicare’s reimbursement is made, before attempting to balance bill their patients’ supplemental insurers. That is, CMS is directing providers not to balance bill until they receive written confirmation from Medicare that a claim will not be crossed over, or a special notification letter explaining why specified claims cannot be crossed over.

Current trending suggests that approximately 99 percent of all claims that Medicare identifies for crossover, actually are crossed over by CMS’ Coordination of Benefits Contractor (COBC), according to CMS. The remaining percentage error out at the COBC due to HIPAA compliance issues or related data errors, resulting in the provider, physician, or supplier’s receipt of a Medicare-generated special notification letter specifying the reason for the claim’s failure to cross over.

Read the article in MLN Matters.

Medicare to Cover HIV Screening Tests

December 9, 2009 by  
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The Centers for Medicare & Medicaid Services (CMS) announced its final decision to cover human immunodeficiency virus (HIV) infection screening for Medicare beneficiaries who are at increased risk for the infection, including women who are pregnant and Medicare beneficiaries of any age who voluntarily request the service. The decision is effective immediately.

Under the recently passed Medicare Improvements for Patients and Providers Act of 2008 (MIPPA), CMS now has the flexibility of adding to Medicare’s list of covered preventive services, if certain requirements are met. Prior to this law, Medicare could only cover additional preventive screening tests when Congress authorized it to do so.

“Today’s decision marks an important milestone in the history of the Medicare program,” said HHS Secretary Kathleen Sebelius. “Beginning with expanding coverage for HIV screening, we can now work proactively as a program to help keep Medicare beneficiaries healthy and take a more active role in evaluating the evidence for preventive services.”

Under MIPPA, CMS can consider whether Medicare should cover preventive services that Congress has not already deemed as covered or noncovered by law. Among other requirements, the new services must have been “strongly recommended” or “recommended” by the U.S. Preventive Services Task Force. For instance, the Task Force graded HIV screening as “strongly recommended” for certain groups.

Read the CMS final decision memorandum.

Industry Reacts to New Proposal to Expand Medicare Eligibility

December 8, 2009 by  
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A proposal floated in the Senate to allow people under 65 to enroll in Medicare is meeting with strong opposition from some industry groups, Kaiser Health News reports. The Federation of American Hospitals, the American Medical Association, and America’s Health Insurance Plans are among the groups that have come out against the proposal, Kaiser says. However, the idea is said to be gaining momentum among Senate Democrats working to reach consensus on a number of issues and pick up the 60 votes needed to pass healthcare reform legislation.

The proposal would extend Medicare eligibility to people in the 55 to 64 age group who are uninsured or unable to afford employer-sponsored health insurance.

According to Kaiser Health News, questions have emerged in the Senate about buy-in premium costs, the availability of premium subsidies to those with low and moderate incomes, and whether the buy-in is envisioned as a stopgap until insurance exchanges that would be created under the reform legislation are fully implemented in 2014.

The Medicare buy-in proposal is one element of a strategy to build support for the draft legislation. Among other things, the negotiators are trying to find a middle ground between lawmakers who favor a government-run public plan option and those who say they won’t vote for a measure that includes such an option.

In an effort to break the impasse, the latest proposal would allow private insurers to offer national policies under the supervision of the federal Office of Personnel Management, the agency that administers a similar program for federal employees and Congress.

Read the Kaiser Health News article.

Most States Sustain and Expand Coverage for Low-Income Children, Families: Survey

December 7, 2009 by  
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Despite the deep recession, most states have managed to safeguard and, in some cases, expand health coverage for children and parents in their Medicaid and Children’s Health Insurance Programs in 2009, according to new survey results from the Kaiser Family Foundation’s Commission on Medicaid and the Uninsured.

The annual 50-state survey of eligibility rules, enrollment and renewal procedures and cost-sharing practices in Medicaid and CHIP for children and parents found that, overall, most states in 2009 continued to expand and simplify their Medicaid and CHIP programs. However, budget shortfalls did result in cutbacks in some states.

Although the survey reveals significant overall progress nationally in expanding public coverage or making it easier to access, wide variations in coverage persist. Among the survey findings:

* Currently, 47 states cover children in families with an annual income at or higher than 200 percent of the federal poverty level ($36,620 for a family of three), with half (24 states) covering children in families with incomes at or greater than 250 percent of poverty ($45,775 for a family of three).
* Parent eligibility levels continue to lag far behind, and the disparity between children and parents is growing. Currently, the median income eligibility limit for children is 235 percent of the federal poverty level ($43,029 for a family of three) compared to the median for a working parent at 64 percent of the federal poverty level ($11,718 for a family of three).
* Twenty-six states bolstered coverage for low income children, parents, and pregnant women, either by expanding eligibility, simplifying enrollment procedures, or reducing financial barriers. Children were the chief beneficiaries of expansions in 2009, with 19 of those 26 states improving access to coverage for children by increasing eligibility, simplifying procedures, and eliminating premiums.

Berwick: It’s Our Job to Redesign Healthcare, Contain Costs

December 7, 2009 by  
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Donald M. Berwick, MD, president and CEO, Institute for Healthcare Improvement (IHI), gave a nod of approval to healthcare reform legislation being negotiated in Congress. “We ought to pass that law,” he said during his keynote address at the 21st annual IHI Forum in Orlando, Fla, which drew more than 6,500 attendees in person and via satellite.

Yet Berwick acknowledged: “Congress won’t lead us to better health care,” referring to the draft legislation’s focus on expanding insurance coverage rather than healthcare reform. The job of containing costs and improving quality resides with hospitals, physicians, and other healthcare stakeholders, he said. “Healthcare redesign is not Washington’s job,” he said. “It’s our job. It won’t come from what they do, but what we do.”

He celebrated the progress that has already been made, highlighting significant improvements by a dozen or so providers. For instance, Palmetto Hospital has cut mortality rates in half, and Denver Health has saved more than $30 million in three years using Lean production principles.

However, to ensure a viable healthcare system for future generations, stakeholders need to “think out of the building” and work across the continuum to contain overall healthcare costs in their communities—without harming quality. As an example, Berwick pointed to Cedar Rapids, Iowa, where Medicare costs are 27 percent lower than the U.S. average and quality measures are comparable to other high-performing areas. Despite having two competing hospitals—Mercy Medical Center and St. Luke’s Hospital—and a freestanding physician base, Cedar Rapids has developed a cooperative approach to clinical program development. There is only one cardiac surgery program in town, and the two hospitals are close to agreeing to only one cancer center.

Referencing research by Nobel prize-winning economist Elinor Ostrom, Berwick outlined a seven-step process for containing healthcare costs across communities, or what he referred to as “commons”:

• Define your healthcare commons
• Set aims: Reduce total resource consumption by 10 percent over three years
• Develop your institutional structures for local rule-making
• Develop monitors of use for the commons
• Create consequences for rule-breaking
• Identify and address conflicts early
• Offer and expect civility

Challenging IHI attendees to action, Berwick predicted “that real reform will remain zero unless action is taken close to home.”

Two Healthcare Organizations Named as 2009 Baldrige Award Recipients

December 7, 2009 by  
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Two healthcare systems are among the five recipients of the 2009 Malcolm Baldrige National Quality Award: AtlantiCare in Egg Harbor Township, N.J., and Heartland Health in St. Joseph, Mo. The Baldrige award is the nation’s highest Presidential honor for innovation and performance excellence.

AtlantiCare, a not-for-profit health system in southeastern New Jersey, achieved the Centers for Medicare and Medicaid Services (CMS) national top 10 percent performance for patient care measures related to congestive heart failure, acute myocardial infarction, and pneumonia. Additionally, based on CMS data, the organization was ranked seventh out of 4,200 hospitals in 2006 by the Commonwealth Fund for clinical results in care of patients.

The largest healthcare provider in its region, AtlantiCare continues to grow in both system revenues and patient volume. From 2000 to 2008, system revenues grew from $280 million to $651 million, reflecting an 11 percent compound annual growth rate. During this time period, its medical center volume increased from about 34,000 to greater than 56,000 discharges—more than twice the state growth rates.

The other healthcare winner, Heartland Health, is a not-for-profit healthcare system serving portions of four Midwestern states.

Heartland Health has achieved 90 percent ratings in overall outpatient satisfaction and in key drivers of outpatient satisfaction between 2006 and 2009. Members have rated the system’s Community Health Plan above the National Committee for Quality Assurance 90th percentile for health care and specialists’ care. In addition, Heartland Health consistently maintains its Moody’s and Fitch Bond ratings of A and A2, respectively. In FY09, the company exceeded the Moody’s and Fitch Bond current bond rating requirements for days cash on hand and achieved performance in both rating agencies’ top 10 percent for total margin and operating margin. Heartland Health is ranked in the top 15 percent of hospitals nationally for patient safety by HealthGrades.

New Report Shows Greater Cost Savings than CBO for Health Reform

December 6, 2009 by  
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A new report co-authored by the Center for American Progress Action Fund and the Commonwealth Fund shows that the cost-containing impacts of the Senate and House reform proposals would be even greater than analyses have shown to date. By taking into account the implications of research not reflected in previous analyses by the Congressional Budget Office (CBO) and the Centers for Medicare and Medicaid Services, the new report by CAPAF Senior Fellow and Harvard Economist David Cutler, Commonwealth Fund President Karen Davis, and Senior Research Associate Kristof Stremikis estimates that the Senate health reform proposal will result in:

• Total savings of $2,500 on healthcare spending for the typical family by 2019;
• Deficit reduction of up to $409 billion over ten years (approximately $280 billion more than CBO estimates); and
• Medicare savings of $576 billion (nearly $200 billion more than CBO estimates).

The report reaches similar conclusions about the House bill.

Read the full report.

View information about HFMA’s March 11-13 Executive Conference, featuring David Cutler, PhD.

NUBC Approves Coding Changes

December 6, 2009 by  
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The National Uniform Billing Committee (NUBC) recently approved a series of changes to the Point of Origin code set (formerly “Source of Admission”). These changes become effective for discharges on or after July 1, 2010. This data element is reported in Form Locator 15 of the UB-04 and in CL102/Loop ID 2300 of the 837 Institutional implementation guide. The details of the changes are found in the NUBC minutes. The changes made primarily affect the following:

Three codes are eliminated and will no longer be valid for use:

* Code 7 – Emergency Room
* Code B – Transfer from Anther Home Health Agency (Replaced with new Condition Code 47)
* Code C – Readmission to Same Home Health Agency

The definitions to Codes 1 and 2 have been modified. Code 2 now includes both clinic and physician office points of origin.

Also effective 7/1/10 is new Condition Code P7 to indicate that the patient was admitted directly from this facility’s Emergency Room/Department; it is for public health reporting only.

Read the NUBC Billing Alert.

New Limits Set on RAC Medical Record Requests

December 3, 2009 by  
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The Centers for Medicare & Medicaid Services (CMS) has modified the additional documentation request limits for the RAC (Recovery Audit Contractor) program in FY10. These limits will be set by each RAC on an annual basis to establish a cap per campus on the maximum number of medical records that may be requested per 45-day period. A campus unit may consist of one or more separate facilities/practices under a single organizational umbrella; each limit will be based on that unit’s prior calendar year Medicare claims volume.

Limits will be based on the servicing provider/supplier’s Tax Identification Number (TIN) and the first three positions of the zip code where they are physically located. Using TINs will reduce the total number of limits that would have been imposed per organization under the previous draft policy, which was based on National Provider Identifiers, while zip codes are factored in to promote equitability for regional or national organizations.

Limits will be set at 1 percent of all claims submitted for the previous calendar year (2008), divided into eight periods (45 days). Although the RACs may go more than 45 days between record requests, in no case shall they make requests more frequently than every 45 days

Read the CMS notice.

New MedPAC Report Documents Regional Variations in Service Use

December 2, 2009 by  
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Medicare utilization varies by up to 30 percent from the highest to the lowest use regions of the country, according to a new report submitted to Congress by the Medicare Payment Advisory Commission (MedPAC).

Regional variation in service use differs from regional variation in Medicare spending, the report points out. Spending varies in part because of the factors Medicare uses to account for differing wages, payment rates, and health status. “We must adjust for those factors to arrive at service use, but the appropriate levels of those payment factors are separate issues that deserve consideration in their own right,” MedPAC points out.

Service use among regions can vary “for more idiosyncratic reasons as well.” The metropolitan statistical area with the greatest service use—Miami-Dade County, Fla.—has twice the level of service use as the region with the lowest service use—non-metropolitan Hawaii, according to the report.

The MedPAC report also found that areas with high levels of service are not always the areas with high growth rates.

Fitch: Economic Pressure and Event Risk Will Drive U.S. Healthcare’s Negative Outlook in 2010

December 2, 2009 by  
Filed under News

Persistently high unemployment along with consumers’ lessened ability to manage out-of-pocket healthcare costs will continue to hamper prospects for the healthcare industry in 2010, Fitch Ratings reports in a press release. Growing event risk surrounding healthcare reform and that impact on health insurance coverage, reimbursement, and the corresponding change in the competitive landscape all create uncertainty regarding long-term financial results for the sector.

Fitch expects that high unemployment continuing well into 2010 will have an ongoing impact on insurance coverage and ability to manage out-of-pocket expenses, leading consumers to focus on reducing healthcare expenses and delaying nonessential care.
The ultimate impact of reform initiatives is unclear, Fitch goes on to say. If reform legislation achieves its goal of increased insurance coverage, this will be a positive for the industry. However, Fitch believes payment cuts will be imposed to help pay for the insurance coverage expansion, reducing profitability margins.

Key to overall profitability will be whether the coverage expansion offsets margin erosion in a timely manner to maintain profit levels, Fitch says. Finally, the most difficult part of reform to evaluate will be its effect on the competitive environment of the industry, according to Fitch. New restrictions could permanently change prospects for certain areas of the industry and result in changes in business strategies. These strategy changes could lead to increases in merger and acquisition activity in an attempt to improve prospects through broadening product or service portfolios and increasing efficiency with scale. With the potential for increased acquisition and merger activity comes the expectation for increased debt issuance that could lead to higher leverage, at least in the near term.

Read the Fitch Ratings press release.

Rating Upgrades Continue Despite Economic Conditions

December 1, 2009 by  
Filed under News

Despite extremely challenging economic and credit conditions facing not-for-profit hospitals, 20 hospital and health system bond ratings have been upgraded since late 2008, says Moody’s Investors Service in a new report. The report identifies several factors that contributed to the upgrades:

  • Improved financial performance and maintenance or strengthening of balance sheet indicators
  • Demonstration of financial and strategic support to the hospital from a parent or a closely aligned enterprise such as a university or municipality
  • Timely completion of major capital projects that have met or exceeded financial projections
  • Market success demonstrated by growth of existing or new service lines
  • Strong management and governance practices

Moody’s expects additional upgrades through the fourth quarter in addition to continued downgrades. It’s clear that “an actively engaged board and proactive management team that leverages its strengths, successfully identifies growth opportunities and maintains strong expense controls will be better positioned to weather the current credit stresses that are impacting the industry,” the report concludes.

Millions Lose Coverage as Federal COBRA Subsidies Expire: Report

December 1, 2009 by  
Filed under News

Millions of laid-off workers and dependents who received federal subsidies to help pay for health insurance coverage lost those subsidies on Dec. 1 and may join the ranks of the uninsured, according to a report issued yesterday by the consumer health organization Families USA.

The report states that the subsidies—which were started last March by the American Recovery and Reinvestment Act and were made available for nine months—have enabled millions of laid-off workers and dependents to afford COBRA premiums needed to continue insurance coverage from their previous employer. The federal subsidies pay 65 percent of the cost of COBRA premiums. Nationwide, the subsidies for COBRA family coverage average $722 per month.

Without subsidies, the report finds, nationwide COBRA premiums for family coverage will cost laid-off workers, on average, $1,111 per month—83.4 percent of the average ($1,333) monthly unemployment insurance (UI) checks they receive.

For the first recipients, who began receiving subsidies in March, the subsidies expired on Nov. 30. For those who started receiving subsidies after March, the expiration will be nine months after their start-up date.

Ron Pollack, Executive Director of Families USA, noted that pending healthcare reform legislation would provide a permanent source of help to laid off workers. The reform bills pending in Congress would enable laid-off workers and their families to obtain insurance coverage through a newly created exchange, and would provide subsidies to help low-income families pay the premiums.

According to the Families USA report, average monthly family COBRA premiums vary significantly from one state to another, as do average monthly UI checks. In nine states, the average family COBRA premium exceeds the average UI benefit.

Any extension of the COBRA subsidy program will also likely make the subsidies available to newly unemployed individuals. Under the current program, people who lose their jobs after Dec. 31, 2009, will not qualify for the subsidy.

The Congressional Budget Office and Joint Tax Committee estimated that approximately 7 million adults and dependent children would receive the COBRA subsidy in 2009.