Hospital Health Center Patients More Likely to Get Specialty Care: Report

May 28, 2010 by  
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Hospital-affiliated community health centers are more likely to get appointments for specialty procedures such as diagnostic tests and follow-up visits for their patients, according to a Commonwealth Fund report. Based on a survey of 795 executive or clinical directors at U.S. federally qualified health centers, the report says many community health centers provide high-quality, well-coordinated care, but the Patient Protection and Affordable Care Act could increase demand for their services. The reform law provides $11 billion in funding for community health centers over the next five years—twice the current funding.

Community health centers serve 16 million patients who are mostly low income, uninsured, or insured through Medicare or Medicaid.

The report suggests the following areas for improvement:

  • Payment incentives to encourage high-quality care
  • Policies and incentives that encourage centers to take steps to function as patient-centered medical homes
  • Infrastructure support, such as health IT, to allow the centers to better meet patients’ needs

IT Cost Benchmarking Survey Participation Sought

May 28, 2010 by  
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Scottsdale Institute, an association for health system executives, is conducting its 2010 IT cost benchmarking data survey. Developed with input from Spectrum Health, the IT benchmarking program collects IT cost data from healthcare organizations, develops comparative databases, and offers participating organizations opportunities to collaborate so they can compare their practices and share insights.

Nonmember organizations may participate in the survey. There is no charge to nonmembers for data entry, validation, and the resulting database. Visit the Scottsdale Institute website for more information on participating.

Reform Will Increase Employers’ Healthcare Costs: Survey

May 28, 2010 by  
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Although reducing healthcare costs is a goal for most employers, few expect healthcare reform to contain costs, according to a survey on healthcare reform by Towers Watson, a professional services company. The survey of 650 mid- to senior-level benefit professionals found that 88 percent of respondents plan to pass increased health benefit costs on to employees and 74 percent plan to reduce health benefits and programs. Yet 82 percent of employers remain committed to providing workforce health improvement and wellness initiatives.

Eighty-eight percent of respondents plan to continue to provide health benefit coverage in 2014, when employers must offer minimal essential coverage to FTEs or pay a penalty. Eighty-five percent of respondents believe that fewer large employers will offer retiree medical benefits under reform, and 43 percent of respondents that currently offer retiree medical coverage plan to reduce to eliminate it.

The excise tax cap on high-cost benefit plans is a primary cost driver that could affect 60 percent of employers when it takes effect in 2018, according to Towers Watson. Yet only 46 percent of respondents believe they will be subject to the excise tax.

The $5 Billion Allocated for High-Risk Pools Falls Far Short of Need

May 27, 2010 by  
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While 5.6 million to 7 million Americans may qualify for health coverage through the new temporary national high-risk pool program, the $5 billion allocated until 2014 will cover only a small fraction of those in need, potentially as few as 200,000 people a year, according to a new policy analysis from the National Institute for Health Care Reform (NIHCR).

The analysis—Health Coverage for the High-Risk Uninsured: Policy Options for Design of the Temporary High-Risk Pool—identifies key policy considerations in designing the temporary high-risk pool program created by the 2010 Patient Protection and Affordable Care Act to provide subsidized health coverage to uninsured people with preexisting medical conditions. The law includes insurance market reforms and income-based subsidies to make coverage more accessible and affordable, but most of these measures do not take effect until January 2014. To bridge the gap, the law provides for an interim national high-risk pool, modeled on those already operating in 35 states, scheduled to start July 1.

“While the law’s goal is to bridge the gap for people who can’t get affordable private insurance because of preexisting medical conditions until the full reforms occur in 2014, the limited funding means the administration will have to make hard choices to stretch the dollars as far a possible,” said Paul B. Ginsburg, Ph.D., NICHR director of research and president of the Center for Studying Health System Change.

Most Firms Plan to Apply for Early Retiree Insurance Program: Survey

May 27, 2010 by  
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Most companies that offer early retiree medical benefits plan to apply for the Early Retiree Reinsurance Program (ERRP) to offset some of the claims costs for retirees aged 55 to 64 and their families, according to a survey by Hewitt Associates. Hewitt surveyed 245 companies that offer medical benefits to more than 1.3 million retirees. About three-quarters of the employers plan to pursue reimbursement under the ERRP, a newly enacted health reform law that takes effect June 1, 2010, and ends Jan. 1, 2014, or when the $5 billion set aside for the program is exhausted.

Hewitt estimates that the average federal reimbursement will represent $2,000 to $3,000 per pre-65 retiree per year, or approximately 25 to 35 percent of total healthcare costs. Although the law requires employers to use the ERRP reimbursements to reduce the cost of the plan, approximately two-thirds of survey respondents that intend to apply for the reimbursement are undecided on how they will use the proceeds. Sixteen percent plan to use the reimbursement to reduce premiums for both employer and retirees, and five percent said they are considering reducing the retiree share of premiums only.

Report Projects State-by-State Growth in Medicaid Enrollees, Decreases in Uninsured

May 26, 2010 by  
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The expansion of Medicaid under the new health reform law will significantly increase the number of people covered by the program and markedly reduce the uninsured in states across the country, with the federal government picking up the overwhelming majority of the cost, according to a state-by-state analysis released today by the Kaiser Family Foundation’s Commission on Medicaid and the Uninsured.

States with large uninsured populations today are expected to see the biggest increases in the numbers of people who obtain health coverage through Medicaid. California and Texas, for example, two states with considerable numbers of uninsured residents, are each projected to see 1.4 million fewer uninsured adults in 2019 due to the Medicaid expansion, with the federal government covering 95 percent of the cost in Texas and 94 percent in California.

Medical Costs Rise 7.8 Percent in 2010 for Family of Four: Milliman

May 26, 2010 by  
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The medical costs paid by and on behalf of a typical U.S. family of four reached $18,074 in 2010, up 7.8 percent over the 2009 amount of $16,771, according to the 2010 Milliman Medical Index. For the third consecutive year, the annual rate of increase has been less than 8 percent, but the dollar increase is the highest in the past 10 years. Inpatient and outpatient facility services combined represent 48 percent of the total annual medical costs, up from 47 percent last year, according to the index. Physician services represent 33 percent, prescription drugs represent 15 percent, and miscellaneous services represent 4 percent.

Over the past five years, pharmacy care and facility costs, especially outpatient facility costs, increased at a higher average annual rate than physician services, the report states. The largest dollar increase in 2010 was for inpatient facility care, which rose by $498 annually. The increase includes change in both utilization and average unit cost. Average unit cost reflects the negotiated charge for each service and the service mix, according to Milliman.

Most of the hospital and physician cost increases noted in the 2010 index have been driven by average unit cost, not utilization, which frames the future cost-control effort, according to the report. Hospital and physician services contributed $820 and $301, respectively, to the increase in total annual medical costs between 2009 and 2010, while pharmacy services contributed $151.

As in 2009, medical costs in three cities (Miami, New York, and Chicago) continue to surpass the national average by at least 10 percent. Costs in all three cities now exceed $20,000 for a typical family of four, with Miami at $22,089. Phoenix and Seattle continue to have costs much lower than the national average.

HHS Seeks to Dismiss Virginia’s Challenge of the PPACA

May 26, 2010 by  
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The U.S. Department of Health and Human Services (HHS) filed a motion to dismiss Virginia’s lawsuit challenging the Patient Protection and Affordable Care Act (PPACA). The motion was filed in the United States District Court for the Eastern District of Virginia on May 24.

Virginia is among several states that have filed lawsuits challenging the federal healthcare reform law. On May 14, Virginia announced the establishment of the Health Care Reform Initiative to prepare Virginia for implementation of federal health reform by planning for the expansion of Medicaid.

Bundled Payment Could Reduce Spending, Spur Quality Improvement

May 26, 2010 by  
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A new American Hospital Association (AHA) report provides evidence on the impact of bundled payment, citing findings from eight selected demonstration projects.

  • Bundled payment could potentially reduce spending on an episode of care: For example, during the five-year Heart Bypass Center Demonstration, Medicare reduced expected spending on coronary artery bypass graft (CABG) surgery by roughly 10 percent at seven participating hospitals.
  • Providers’ readiness to participate in bundled payment programs varies: Of the 734 hospitals that expressed interest in Medicare’s Heart Bypass Center Demonstration, 209 submitted preapplications.
  • Bundled payment can spur quality improvement: Geisinger Health System’s ProvenCare reduced average length of stay for CABG by 0.5 days and 30-day readmission rates by 44 percent over 18 months.

The AHA report, Bundled Payment, also identifies eight key questions that need to be addressed about bundled payment, including “What capabilities are needed for an organization to administer bundled payment?”

AMA-Led Lawsuit Argues Against Extending Red Flags Rule to Physicians

May 24, 2010 by  
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On June 1, physicians will be expected to comply with the federal red flags rule related to consumer identify theft. In the meantime, the American Medical Association (AMA), American Osteopathic Association (AOA), and the Medical Society of the District of Columbia (MSDC) have filed a lawsuit seeking to prevent the Federal Trade Commission (FTC) from extending these regulations to physicians.

The AMA, AOA, and MSDC strongly disagree with the FTC’s view that all physicians who do not require payment at the time of providing medical services to patients are required to comply with the red flags rule beginning June 1. “The extensive bureaucratic burden of complying with the red flags rule outweighs any benefit to the public,” said AMA president-elect Cecil B. Wilson, MD.

While litigation proceeds, physicians can turn to online resources from the AMA to help them comply with the red flags rule.

Standard & Poor’s: The Reform Law Will Not Lower Healthcare Costs

May 24, 2010 by  
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Federal, state, and local governments will be paying 52 percent of medical bills by 2015—up from 48 percent today, according to a recent report from Standards & Poor’s Financial Services. The federal government will assume the lion’s share of the cost hike, with its portion of the bill rising from 34 to 38 percent by 2015. State and local governments will continue to pay 14 percent of the bill over the next five years.

“The government has been trying to control Medicare and Medicaid costs, mostly at the expense of the healthcare system and private payers,” says the report, Can the U.S. Economy Afford Health Care Reform? “If the trends of lower reimbursement for government-covered patients continue, the costs for private patients will go up. This could induce even more employers to drop healthcare coverage.”

Citing the current inconsistency between entitlements and taxes, the report concludes that, “There will need to be a major revision of healthcare benefits or a major tax hike to pay the rising bill.”

Some Healthcare Reform Law Changes to Medicare Take Effect in 2010

May 20, 2010 by  
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The Patient Protection and Affordable Care Act, enacted in March 2010, includes significant changes to Medicare. Some of the changes will expand benefits, and others are designed to slow the program’s growth rate. A new issue brief from Health Affairs and the Robert Wood Johnson Foundation discusses some of the changes that will take effect in 2010:

  • Expanded prescription drug coverage
  • Improved subsidies for drug coverage for people with low incomes
  • Expanded coverage of preventive services
  • Primary care improvements
  • Increased premiums for high-income beneficiaries
  • Increased Medicare taxes for high-income households
  • Reductions in payments and other requirements for Medicare Advantage plans
  • Reduction in the growth of payments to Medicare providers
  • Special provisions for rural hospitals
  • Encouragement for innovation in Centers for Medicare & Medicaid Services programs

Additional Rooms Added for ANI: The Healthcare Finance Conference

May 20, 2010 by  
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Demand is strong for proven practices at this year’s ANI, June 20-23 in Las Vegas. Although HFMA’s room block at the Venetian/Palazzo has sold out, rooms have been added at the adjacent Wynn Hotel (866-770-7555) at the special rate of $159/night and the nearby TRUMP International (866-939-8786) for $150/night. Please call and ask for the HFMA rate to secure your reservation. Get more information about ANI.

One-Fifth of U.S. Population Visited an ED in 2007: CDC

May 20, 2010 by  
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One in five people visited the emergency department (ED) in 2007, according to a Centers for Disease Control and Prevention (CDC) report. Adults aged 75 and older, non-Hispanic blacks, the poor, and persons with Medicaid coverage were more likely to visit the ED at least once in a 12-month period than those in other age, race, income, and insurance groups. Of those under age 65, the uninsured were no less likely than the insured to visit the ED at least once.

ED use is associated with insurance status, with Medicaid enrollees being the most likely to visit the ED, according to the report. The uninsured under age 65 were more likely to have had multiple ED visits in 2007 than those with private insurance. Health insurance status was not associated with nonurgent ED visits, and 10 percent of ED visits by persons under age 65 were considered nonurgent. Adults reporting fair or poor health status were most likely to have used the ED. Those with a usual source of medical care were no less likely to have had at least one ED visit than those without a usual source of care, according to the CDC.

Florida Hospitals to Participate in Quality-Improvement Initiative

May 19, 2010 by  
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The Florida Hospital Association and the American College of Surgeons (ACS) and its Florida chapter have launched the Florida Surgical Care Initiative to reduce surgical complications and improve the quality of care in participating hospitals. Florida hospitals will be the first in the nation to participate in this outcomes-based program.

Supported by a grant from Blue Cross and Blue Shield of Florida, the initiative will focus on four key areas: surgical site infections, urinary tract infections, colorectal surgery outcomes, and elderly surgery outcomes.

The initiative was developed on the basis of the ACS National Surgical Quality Improvement Program (NSQIP), which uses risk-adjusted, clinical, 30-day outcomes data to review and assess outcomes and complications related to surgical care. The use of ACS NSQIP has been shown to significantly reduce complications and deaths in participating hospitals and to help hospitals save money by preventing costly complications.

The initiative’s four measures were developed by the ASC in partnership with the Centers for Medicare & Medicaid Services (CMS). The measures are under review by the National Quality Forum, and if endorsed by NQF, could be implemented by CMS as national quality measures.

HFMA Announces 2010 Winners of MAP Award for High Performance in Revenue Cycle

May 18, 2010 by  
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HFMA will present the following 10 hospitals with the MAP Award for High Performance in Revenue Cycle during ANI.

  • Baylor Medical Center at Irving, Irving, Texas
  • CHRISTUS Schumpert Health System, Shreveport, La.
  • Hospital of the University of Pennsylvania, Philadelphia, Pa.
  • Riverside Methodist Hospital, Columbus, Ohio
  • Danbury Hospital, Danbury, Conn.
  • Saint Francis Hospital, Tulsa, Okla.
  • The Valley Hospital, Ridgewood, N.J.
  • Princeton Medical Center, Birmingham, Ala.
  • Geisinger Medical Center, Danville, Pa.
  • Brookwood Medical Center, Birmingham, Ala.

MAP (Measure, Apply, and Perform) is a new initiative that HFMA has launched to raise the level of financial performance of the entire industry by driving revenue cycle excellence. Central to MAP are revenue cycle measures, or key performance indicators, that HFMA and leaders in the field developed to be industry standards.

The MAP award is sponsored by 3M Health Information Systems. Learn more about MAP.

HHS Awards $1 Billion to Construct or Improve Biomedical Research Facilities

May 17, 2010 by  
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The Department of Health and Human Services (HHS) has awarded $1 billion of American Recovery and Reinvestment Act (ARRA) funds for the construction, repair, and renovation of biomedical research laboratories. HHS awarded 146 grants in 44 states, the District of Columbia, and Puerto Rico to upgrade and construct buildings, laboratory spaces, and core facilities. The National Institutes of Health National Center for Research Resources administered the grants, which are expected to help foster scientific advances that may lead to improved human health.

Among the award recipients are Children’s Health Research and Evaluation Facility, Indianapolis, $8.5 million, and the San Francisco Office of AIDS Renovation (SOAR) Project, $9.5 million. The construction grants awarded through ARRA encouraged, and in many cases required, grantees to implement several primary elements of sustainable technologies and design principles.

Disease Management Research Findings Inconsistent: Report

May 17, 2010 by  
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Research evidence of disease management’s impact on cost, quality of care, and health outcomes has been inconclusive, according to a Mathematica Policy Research, Inc., issue brief. Analyses of disease management (DM) programs have found mixed results, according to the report. Some programs reduced hospitalization rates and produced cost savings, while others did not.

The inconsistent effectiveness of the programs is attributed to two reasons:

  • The DM programs focused on different populations and interventions, leading to uneven quality of implementation or replication of program model.
  • Studies used varying methods and measures to estimate program effects.

 Four DM program features appear to improve their effectiveness:

  • Individualized case management
  • In-person contacts
  • Focus on hospital discharges
  • Low out-of-pocket expenses for recommended care

Understanding what does and does not work in private and public plans, for different populations and in different circumstances, is necessary to improving the quality and efficiency of care for chronic disease, according to Mathematica.

HHS, DOJ Announce Antifraud Tools Under Reform Law

May 14, 2010 by  
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The Department of Health and Human Services (HHS) and the Department of Justice (DOJ) have released a report highlighting new tools they will use under the Patient Protection and Affordable Care Act (PPACA) to prevent healthcare fraud, particularly in the Medicare and Medicaid programs.

The government recovered $2.51 billion in Medicare payments in FY09, a 29 percent increase over FY08, according to the annual Health Care Fraud and Abuse Control Program Report. In addition, $441 million in federal Medicaid money was returned to the Treasury in FY09, a 28 percent increase over FY08.

DOJ and HHS officials said the expanded law enforcement efforts will be supported by the newly established Center for Program Integrity at the Centers for Medicare & Medicaid Services, which will use state-of-the-art methods to implement provisions of the PPACA that detect fraud and prevent improper payments.

Christopher Gardner to Keynote 2010 ANI

May 13, 2010 by  
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Christopher Gardner, CEO of the brokerage firm Gardner Rich LLC, has been added to the line-up of keynote speakers for the 2010 ANI: The Healthcare Finance Conference, to be held June 20-23 in Las Vegas. His address, Start Where You Are: The Pursuit of Happyness, is scheduled for Wednesday, June 23, from 8:00 a.m. to 9:30 a.m.

Author of the best-seller The Pursuit of Happyness, Gardner will discuss the keys to overcoming obstacles and breaking cycles. A self-made success story, Gardner overcame numerous challenges in his real-life rags-to-riches journey from homelessness to millionaire. Through his speaking engagements and media projects, he focuses on helping others achieve their full potential.

Gardner founded Gardner Rich in Chicago from his home with just $10,000. The firm specializes in the execution of debt and equity products transactions for some of the nation’s largest institutions, public pension plans, and unions.

To register for ANI, visit the conference website.

DOL Updates Model Notices for COBRA Coverage

May 12, 2010 by  
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The Department of Labor (DOL) has updated model notices that insurance plans and employers can use to notify participants of continuing health insurance coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA). The American Recovery and Reinvestment Act requires health plans to notify participants about the COBRA premium subsidy, which entitles plan participants to a 35 percent reduction of their premium. The DOL has made several variations of the notices available. The COBRA subsidy expires May 31, 2010.

Timely Filing Requirements Amended by Reform Law

May 12, 2010 by  
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Medicare claims with dates of service on or after Jan. 1, 2010, that are received later than one calendar year beyond the date of service will be denied, according to MLN Matters edition no. MM6960. To comply with the requirements of the Patient Protection and Affordable Care Act (PPACA), the Centers for Medicare & Medicaid Services (CMS) is updating edit criteria related to the timely filing limits for submitting claims for Medicare fee-for-service (FFS) reimbursement.

Section 6404 of PPACA amended the timely filing requirements to reduce the maximum time period for submission of all Medicare FFS claims to one calendar year after the date of service. This section also mandates that all claims for services furnished before Jan. 1, 2010, must be filed with the appropriate Medicare claims processing contractor by Dec. 31, 2010.

Hospital-Physician Alignment Needed Under Healthcare Reform: Report

May 12, 2010 by  
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The government’s financial incentives under healthcare reform will motivate hospitals and physicians to become financial and clinical partners, according to a new report from PricewaterhouseCoopers.

Under the new law, hospitals will be penalized for readmissions and hospital-acquired conditions, and payment will be based on value-based purchasing. Beginning in 2015, a 300-bed hospital with poor quality metrics could be penalized by more than $1.3 million per year, the report says. The metrics will be published online, which is the most popular place for consumers to seek health information.

The number of Medicaid recipients will increase by more than 40 percent by 2019, so hospitals need to learn to operate on Medicaid rates. Because those rates traditionally have not covered all costs, hospitals will need to quickly address fixed costs, the report says.

“To look at the implications of health reform only in the context of current business practices is not only futile but misses the point of the reform agenda. If health organizations make no other changes and sectors continue to operate in silos, the direct financial impact of health reform could be devastating and even threaten their survivability,” says Kelly Barnes, U.S. health industries leader, PricewaterhouseCoopers.

Dependent Coverage Interim Final Rules Released

May 12, 2010 by  
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The interim final rule on extending dependent coverage to adult children up to age 26 was released early this week by the U.S. Departments of Health and Human Services, Treasury, and Labor. Insurers will be required to comply with the new provision—mandated under the Affordable Care Act—for policies or plan years beginning on September 23. However, more than 65 insurers have already committed to extending dependent coverage by this summer.

As detailed in the rule, the government estimates that about 2.37 million young adults ages 19 to 25 are in a position to benefit from the dependent coverage extension—which is about 8 percent of the 29.5 million adults in this age group.

HHS has also released a fact sheet about the dependent coverage rules.

CMS 2010 ICD-10 and 5010 National Provider Conference Call Set for June 15

May 10, 2010 by  
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The Centers for Medicare & Medicaid Services (CMS) will host a national provider conference call about “ICD-10 Implementation in a 5010 Environment” from noon to 2:00 p.m. ET on June 15.

ICD-10 topics to be discussed include:

  • ICD-10 implementation for services provided on and after Oct. 1, 2013
  •  Benefits of ICD-10
  •  Differences between ICD-10 and ICD-9-CM codes
  •  Tools for converting codes (general equivalence mappings)
  •  Proposal to freeze ICD-9-CM and ICD-10 code updates, except for new technologies and diseases

Health Insurance Portability and Accountability Act (HIPAA) version 5010 topics to be discussed include:

  • General overview of HIPAA version 5010 and D.0 and who is affected
  •  Compliance dates
  •  Benefits
  •  5010 scope versus ICD-10 scope
  •  What you need to do to prepare
  •  Timelines
  •  Medicare fee-for-service implementation of HIPAA version 5010 and D.0
  •  Impact on paper claim forms

Participants will have an opportunity to ask questions of CMS subject matter experts. CMS will announce registration information soon. Additional information about ICD-10/5010 is available on the CMS website.

Bar-Code Technology Reduces Medication Errors: AHRQ

May 10, 2010 by  
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Using bar-code technology with an electronic medication administration record (eMAR) substantially reduces transcription and medication administration errors and potential drug-related adverse events, according to a new Agency for Healthcare Research and Quality (AHRQ) study. The study was published in the May 6 issue of the New England Journal of Medicine.

Bar-code eMAR technology ensures that the correct medication is administered in the correct dose at the correct time to the correct patient. When nurses use this combination of technologies, medication orders appear electronically in a patient’s chart after pharmacist approval. Alerts are sent to nurses electronically if a patient’s medication is overdue. Before administering medication, nurses are required to scan the bar codes on the patient’s wristband and then on the medication. If the two do not match the approved medication order or it is not time for the patient’s next dose, a warning is issued.

Researchers at Brigham and Women’s Hospital in Boston found that bar-code eMAR technology was associated with reductions in medication errors such as giving medicine at the wrong time and giving a patient the wrong dose. No transcription errors or potential drug-related adverse events related to this type of error occurred during the study. The findings are important because bar-code eMAR technology is being considered as a 2013 criterion for meaningful use of health IT under the American Recovery and Reinvestment Act of 2009.

HCA Inc. Files for $4 Billion IPO

May 7, 2010 by  
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HCA Inc. has announced plans for a proposed initial public offering (IPO) of $4 billion of common stock shares, its first public offering of stock since November 2006. The Nashville-based company anticipates that $2.5 billion of the IPO will consist of newly issued shares sold by HCA. The company filed a registration statement for the IPO today with the U.S. Securities and Exchange Commission.

HCA also announced today first quarter 2010 earnings of $7.5 billion, up from $7.4 billion in the first quarter of 2009. Charity care and uninsured discounts rose to $1.581 billion in first quarter 2010, up from $1.108 billion in first quarter 2009. At the same time, bad debt provision dropped to $564 million for the first quarter 2010, down from $807 million in first quarter 2009.

Same facility admissions rose 0.9 percent for the quarter over the first quarter of 2009. Revenue per equivalent admissions increased 0.6 percent for the first quarter of 2010 over the first quarter of 2009.

HCA also announced plans to pay shareholders $5 per share, or $500 million total, on May 14.

HCA owns and operates 162 hospitals, with a total of 41,000 beds, and 106 freestanding surgery centers in 20 states and in England.

CMS Awards $15 Million in Pay-for-Performance Bonuses to Home Health Agencies

May 6, 2010 by  
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The Centers for Medicare & Medicaid Services (CMS) announced today that 166 home health agencies will receive incentive bonuses totaling $15 million based on their performance during the first year of the Medicare home health pay-for-performance demonstration project.

Now in its second year, the demonstration project was undertaken to determine the impact of financial incentives on improving the quality of care provided to home health patients and reducing Medicare costs. Savings are shared with home health agencies that either maintained high levels of quality or made significant improvements in quality of care. All Medicare-certified home health agencies in seven states representing four U.S. census regions were invited to participate.

Fifty-nine percent of the home health agencies that took part in the demonstration project will receive incentive payments based on their performance and improvement on seven quality measures. The demonstration project itself is still being evaluated, with results expected later in 2010.

Find out more.

Fortune 500 Companies Weighed Costs, Benefits of Dropping Employer Coverage

May 6, 2010 by  
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Publicly available corporate documents from AT&T, Verizon, Caterpillar, and Deere reveal that each of the four major employers analyzed the costs and benefits associated with dropping employee coverage, as reported in a recent Fortune magazine article. The companies weighed the potential financial ramifications of proposed health reform changes—including the Cadillac tax and penalties for not providing coverage—against the costs of providing employees with coverage.

For example, AT&T estimated that it would only have to pay $600 million a year in penalties if it dropped employee coverage—compared to the $2.4 billion that the company spent on employee coverage in 2009. A document prepared for Verizon states that “employers may consider exiting the healthcare market and send employees to the Exchanges.”

18 States Opt Out of Running Federal High-Risk Pools

May 6, 2010 by  
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Eighteen states have announced they will not administer high-risk insurance pools that provide health insurance coverage to people who have pre-existing conditions and those who have been uninsured for six months. The Patient Protection and Affordable Care Act (PPACA) creates the pools as a temporary insurance program for high-risk people until Jan. 1, 2014. Federal funding for the risk pools is capped at $5 billion to pay claims and administrative expenses beyond the premiums collected from the individual enrollees. The individual out-of-pocket limit is $5,950 for 2010.

The Centers for Medicare & Medicaid Services chief actuary, Richard S. Foster, has said the $5 billion could be depleted within two years.

Thirty-five states administer their own high-risk pools, and 29 of those states offer HIPAA-compliant high-risk pools. The states that said they will not administer risk pools are Alabama, Delaware, Florida, Georgia, Hawaii, Idaho, Indiana, Louisiana, Minnesota, Mississippi, Nebraska, Nevada, North Dakota, South Carolina, Tennessee, Texas, Virginia, and Wyoming.

The U.S. Department of Health and Human Services will establish a pool in states that opt out of the federal program. The agency is considering hiring not-for-profit insurance companies to operate the pools.

HHS Forms New Center of Excellence for Research on Disability Services, Care

May 6, 2010 by  
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The U.S. Department of Health and Human Services (HHS) announced today that it has awarded $6 million under the American Recovery and Reinvestment Act of 2009 to Mathematica Policy Research, Inc., for the formation of a Center of Excellence in Research on Disability Services, Care Coordination, and Integration.

“With the establishment of a Center of Excellence in Research on Disability Services, Care Coordination and Integration, we will make necessary data improvements to better understand health and support services for people with disabilities,” HHS Secretary Kathleen Sebelius said in a release. “The data collected will allow the Office on Disability and the Centers for Medicare and Medicaid Services to examine the effectiveness of different services and supports being provided, and in turn, improve care for people with disabilities.”

“This is a unique initiative that creates a broad array of future opportunities in comparative effectiveness research in the field of disability services, including those related to rehabilitation, behavioral and psychosocial interventions,” says Rosaly Correa-de-Araujo, MD, Ph.D., deputy director of the Office on Disability and the technical and scientific lead of the initiative. “We look forward to advancing science and enhancing services and supports that benefit people with disabilities.”

Las Vegas Selected as New Location for ANI: The Healthcare Finance Conference

May 6, 2010 by  
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HFMA will hold the 2010 ANI: The Healthcare Finance Conference in Las Vegas at the Sands Expo Center and the Venetian/Palazzo Resort. The new venue was selected after recent flooding in Nashville left the original facility unable to house the conference.

The conference will take place on June 20-23–the same dates as originally planned. Also as planned, the conference will feature insights about reform; 71 best-practice sessions on revenue cycle, cost/quality, integration, and other hot topics; 27.5 CPEs; networking opportunities; and more than 400 exhibitors.

For additional details about the new location, visit this Frequently Asked Questions page.  To register for ANI, visit the conference website

To book hotel accommodation at the Venetian/Palazzo Resort, call (877) 583-6423 and ask for the HFMA/ANI rate ($159 single/double per night). Or you can make your hotel arrangements online. This rate is guaranteed until May 31.

HFMA’s thoughts are with the people of Tennessee who struggle with the hardships that the flooding has caused, especially the healthcare providers whose skill and dedication are so important when a community is in need.

JAMA Study Points to Key Strategy for Reducing Readmissions

May 6, 2010 by  
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An outpatient follow-up visit within seven days of hospital discharge may reduce readmission rates among heart failure patients, according to a study in the May 5 Journal of the American Medical Association.

The researchers discovered a 2.4 percent difference in readmission rates (20.9 percent versus 23.3 percent) among hospitals with the highest rates of outpatient follow up and those with the lowest rates. The median percentage of patients who had early follow up after discharge was 38.3 percent. The study population included 30,136 patients from 225 hospitals.

The American College of Cardiology’s (ACC’s) Hospital to Home initiative identifies early outpatient follow up as one of three core concepts for reducing heart failure readmissions, according to a commentary on the ACC web site: “Discharged patients should have a follow-up visit scheduled within one week of discharge, as well as the means of getting to that appointment.”

Proposed to Slash ASC Reimbursement by 40-50%

May 5, 2010 by  
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TesCalifornia’s Commission on Health and Safety and Workers’ Compensation Advisory Board (CHSWC) Proposes to Slash ASC Reimbursement by 40-50%

As previously reported, late last year, the state Division of Workers’ Compensation (DWC) announced a 12-point plan to eliminate approximately $1.2 billion in “unnecessary” medical costs out of the workers’ compensation system. Part of this plan is to reduce the ASC fee schedule to 120% of the Medicare ASC rate. Currently, ASCs are currently reimbursed at 120% of the Medicare HOPD rate. CASA has objected strongly to this approach and provided written comments blasting the methodology and RAND study from last fall that substantiated this recommendation.

CASA has learned that the DWC will be hosting a public stakeholder meeting to receive input and decide if, when and how best to proceed on this issue. Below is the DWC announcement:

Division of Workers’ Compensation Announces Ambulatory Surgical Center Fee Schedule Stakeholder Meeting

The Division of Workers’ Compensation (DWC) has scheduled a stakeholder meeting to discuss the issues related to drafting regulations regarding ambulatory surgical center (ASC) fees. The meeting will be held:

Date: Thursday, May 27, 2010
Time: 10:00 a.m. to 12:00 p.m.
Place: Elihu M. Harris State Office Building, Room 2
1515 Clay Street, Oakland, California

When the Official Medical Fee Schedule was enacted in 2004, Medicare’s ASC fee schedule was outdated. Therefore, DWC decided to adopt the same fee schedule for ASCs as outpatient hospitals, which is 120% of the Medicare rate for outpatient surgery. In 2008, Medicare updated its rates for ASC services, and DWC is now considering basing its ASC fee schedule on the Medical ASC fee schedule. This proposal is part of DWC’s 12-point plan to monitor and help control medical costs in California’s workers’ compensation system.

The division is interested in hearing comments, suggestions, and options regarding the ASC fee schedule from interested parties at the stakeholder meeting. Please RSVP to Maureen Gray at or (510) 286-0676.

To submit questions or issues for discussion, please e-mail them to Maureen Gray at or fax them to (510) 286-0687.

CASA is currently formulating our official written response that will be presented at the DWC stakeholder meeting on Thursday, May 27, 2010. Our objections will focus on the following:
• Outpatient surgery rates for an ASC and HOPD must remain the same.
• Moving to 120% of the Medicare ASC rate would reduce fees 40-50%.
• Injured workers’ access to outpatient surgery would reach crisis proportions.
• ASC outpatient cases would be moved to HOPD or inpatient at much higher cost.
• Data used by RAND to justify the perceived savings is fundamentally flawed.

CASA members and their Medical Directors are encouraged to attend the DWC stakeholder meeting in Oakland on Thursday, May 27, 2010. If you plan on attending, please RSVP to CASA Executive Director Beth LaBouyer at (530) 790-7990 or by email at

CASA will post our official written comments to this proposal at soon.

Rand Study
CASA comments on Rand Study

HHS Asks States to Review WellPoint Rate Hikes

May 5, 2010 by  
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U.S. Department of Health and Human Services Secretary Kathleen Sebelius is calling on states to re-examine any WellPoint health insurance rate increases in their states after Anthem Blue Cross, a WellPoint affiliate, withdrew its plan to raise premiums in California by as much as 39 percent. In a letter sent last night, Sebelius urged governors and state insurance commissioners to check WellPoint’s assumptions and work with local and state leaders to ensure they have the authority to review and approve insurance rate increases before they take effect.

In February, Sebelius called on Anthem Blue Cross to publicly justify its proposed 39 percent premium increase in California. Auditors subsequently found the increase to be unjustified.

“Working with my colleagues on the state level, we are sending a message to insurers that it is time to for them to put their customers first,” Sebelius said in a statement. “I sent this letter to encourage governors and insurance commissioners to follow California’s example and check the math on rate increases being proposed in their states and to ensure they have the strong regulatory tools they need to fight unreasonable increases.”

Survey: Consumers’ Opinions About the Government’s Role in Healthcare Are Mixed

May 4, 2010 by  
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Only one out of four Americans are confident about their ability to manage future healthcare costs, and their opinions about the government’s role in health care are split, according to a survey by the Deloitte Center for Health Solutions.

The third-annual survey, which polled more than 4,000 consumers via the Internet at the end of 2009 and early 2010, found that despite heightened coverage of the nation’s healthcare system over the past year, less than a quarter of those surveyed (23 percent) said the understand how the U.S. healthcare system works. However, 76 percent of those surveyed gave the system a grade of a “C” or below, and nearly half (48 percent) believed that 50 percent or more of healthcare dollars are wasted, according to survey results.

Nineteen percent of those surveyed indicated that they had decided not to receive care while sick or injured. Of these consumers, 4 out of 10 made the decision based on cost of care, the survey found.

Consumers who were surveyed also had mixed emotions over government’s role in the health care system. Forty-two percent support government-mandated health insurance, compared with 38 percent who say they are against it. However, more consumers (42 percent) would choose an employer-sponsored plan verses the government’s (25 percent), all other factors being equal.

Read the survey results.

Medical Directors’ Compensation Varies by Practice Ownership

May 4, 2010 by  
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A study that analyzed the compensation of medical directors in hospital-owned and nonhospital-owned practices shows that compensation varies significantly according to practice ownership and specialty.

According to the study, conducted by the Medical Group Management Association (MGMA), emergency department medical directors in hospital-owned practices earned an average of $20,000 per year, while their counterparts in nonhospital-owned practices earned an average of $60,000 per year. Other salary comparisons in the study, Medical Directorship and On-Call Compensation Survey: 2010 Report Based on 2009 Data, include the following:

  • Family practitioners (with OB/GYN) in hospital-owned practices earned $23,250 a year, while their counterparts in nonhospital-owned practices earned $8,400 annually
  • Surgical subspecialist directors received $40,000 a year in both hospital and nonhospital-owned practices

The study also found that compensation for medical directors varied widely across specialties. Medical directors who specialize in pathology (anatomic and clinical) received the greatest annualized compensation at $90,000, according to an MGMA press release on the study. Only three other specialties reported median compensation levels greater than $50,000—nephrology, pediatrics (neonatal medicine), and surgery (cardiovascular), according to the release.

The majority of medical practices reported median compensation levels of less than $50,000. Hourly rate compensation was more consistent across specialties and indicated how workloads differed among respondents, the study found.

Missouri Prompt Pay Law Requires Insurers to Pay Claims Within 45 Days

May 4, 2010 by  
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A new Missouri law requires the state’s health insurance companies to speed up claims payments to hospitals, physicians, and other healthcare providers. The new law:

  • Spells out responsibilities for providers filing claims, giving providers and insurers a clear definition of a clean claim
  •  Requires insurers to either pay or deny claims within 45 days of receipt and prohibits suspending claims, which can delay payment indefinitely
  •  Requires insurers that do not pay claims within 45 days to pay providers a daily penalty of 1 percent of the outstanding claim

A 2009 report from the Missouri Department of Insurance showed that 25.6 percent of claims at urban hospitals were more than 90 days past due, while 37 percent of claims at rural hospitals were more than 90 days past due.

CMS Should Monitor Dialysis Care Access and Quality: GAO

May 4, 2010 by  
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The Centers for Medicare & Medicaid Services (CMS) should monitor access to and quality of dialysis care for certain groups of patients as soon as possible after implementation of a new bundled payment system in January 2011, according to a new report from the Government Accountability Office (GAO). Certain demographic groups of patients, including African Americans and Medicare and Medicaid patients, had above-average Medicare expenditures for injectable end-stage renal disease drugs in 2007, according to the GAO report.

CMS has agreed with the GAO’s recommendation. The new bundled payment system is required by the Medicare Improvements for Patients and Providers Act of 2008. The GAO conducted the study at the request of Rep. Pete Stark (D-Calif.), chairman of the House Committee on Ways and Means Subcommittee on Health, and Rep. John Lewis (D-Ga.), chairman of the House Committee on Ways and Means Subcommittee on Oversight.