Capping a week of intense negotiations on Capitol Hill, the House of Representatives tonight voted to pass a reconciliation bill along with the Patient Protection and Affordable Care Act (H.R. 3590), the bill that passed the Senate on Dec. 24, 2009. This clears the way for a Senate vote on the reconciliation bill, a prerequisite for sending the reform package to President Obama for signature. The Senate vote could come later this week.

"The House vote is a message to healthcare finance leaders that significant reform is a reality," said Richard L. Clarke, DHA, FHFMA, President and CEO of HFMA. "The pending passage of healthcare reform should add urgency to the efforts of healthcare professionals to reduce cost while improving quality. HFMA stands ready to help our members lead change through the continuous quality improvement, clinical and administrative process improvement, and care redesign that will be necessary to transform health care in the years to come."

The nonpartisan Congressional Budget Office on Thursday had released projections showing that the reform package would cost about $940 billion and reduce the federal deficit by $138 billion over the first 10 years. It would extend coverage to 32 million Americans.

The American Medical Association (AMA) has voiced its qualified support for the current healthcare reform bill. J. James Rohack, M.D., AMA president, said the bill is imperfect, but it is the next step toward real health system reform. He said the bill will help patients and their physicians by extending health coverage to the uninsured, improving competition and choice, promoting prevention and wellness, reducing administrative burdens, and promoting clinical comparative effectiveness research.
 
“While the final product is certainly not what we would have devised, we strongly support the parts of this bill that are desperately needed by millions of Americans who are struggling to get or keep health insurance coverage,” Rohack said in a statement.  

A single physician generates an average of $1.54 million a year in net revenue for his or her affiliated hospital, up slightly from an average of $1.5 million in 2007, according to a nationwide survey of hospital CFOs by physician search firm Merritt Hawkins. Neurosurgeons headed the list of hospital revenue drivers. A single, full-time neurosurgeon generates an average of $2.8 million a year for the hospital. Other high revenue-generating specialists include invasive cardiologists ($2.2 million a year), orthopedic surgeons ($2.1 million a year), general surgeons ($2.1 million a year), and hematologists/oncologists ($1.5 million a year).

Primary care physicians also generate substantial revenue for hospitals, the survey found. A general internist generates $1.7 million a year on average, a family physician $1.6 million a year, and a pediatrician $856,154 a year, according to the survey.

Survey findings are based on data submitted by 114 facilities.  

Consumers’ ability to afford health insurance and employers’ ability to offer it have been affected by the two recessions of the past decade, according to a new report from the Robert Wood Johnson Foundation. The economic downturn has hit America’s middle class the hardest.

Released in conjunction with the RWJF-sponsored Cover the Uninsured Week, the report shows that the number of middle-income earners who obtained health insurance from their employers dropped by 3 million people from 2000 to 2008. Just 66 percent of people in families earning roughly $45,000 to $85,000 in 2008 have employer-sponsored coverage, a decline of 7 percent since 2000.

Only about half of the decline in employer-sponsored coverage held by middle-income Americans from 2000 to 2008 was offset by government insurance programs. For people who earned less money, declines in employer-sponsored coverage were even steeper, but those numbers were mostly offset by increases in coverage through government insurance programs such as Medicaid.

The Illinois Supreme Court has upheld the denial of property tax exemption for Provena Covenant Medical Center in Urbana, Ill. The supreme court agreed with the state appellate court that the record was inadequate to demonstrate that Provena was a charitable institution. The ruling could have implications for not-for-profit hospitals throughout the nation.

Affiliated with the Roman Catholic Church, Provena Covenant Medical Center is exempt from federal income tax and Illinois sales and use taxes and is regulated in Illinois as a charity. The medical center is one of six hospitals owned by Provena Hospitals, a not-for-profit corporation in Mokena, Ill. The litigation concerns Provena Hospitals’ property taxes for the year 2002. At issue are 43 parcels of real estate in Champaign County. The Illinois Department of Revenue ruled that Provena was not eligible for a charitable tax exemption for 2002. After this ruling, Provena filed a complaint for administrative review in the circuit court of Sangamon County. That court approved the exemption, but the appellate court reversed it and upheld the Department of Revenue’s ruling. Provena then appealed to the Illinois Supreme Court. The supreme court also upheld the Department of Revenue’s denial of a religious exemption.

“We are deeply disappointed” in the decision, said Jon “Cody” Sokolski, chair of the board of Provena Covenant Medical Center. “In 2008, we provided more than $38 million in free care and other community benefits. Our goal is to carry on in our charitable works, despite the fact that this ruling restricts our ability to do so.”

The Illinois Hospital Association (IHA) also expressed disappointment in the decision. “Imposing new tax burdens on a hospital could force it to reduce services and increase healthcare costs, jeopardizing access to quality hospital services as well as the hospital’s financial viability,” said Maryjane A. Wurth, IHA president.

The Congressional Budget Office (CBO) has released projections showing that the current healthcare legislative reform package would cost about $940 billion and reduce the federal deficit by $138 billion over the first 10 years. About two-thirds of the bill’s cost will be paid for through reducing healthcare costs.

The full text of the proposed legislation, which reflects a compromise between the House and the Senate, was released today. That sets the stage for a House vote that could come as early as Sunday. The current legislative package reduces deficit projections by $20 billion more than the bill passed by the Senate on December 24, according to CBO estimates.

In a memo sent to Congressional health committee staff on March 15, the Centers for Medicare & Medicaid Services (CMS) said it will instruct all of its Medicare contractors not to evaluate or enforce the supervision requirements for therapeutic services provided to outpatients in critical access hospitals. This change will remain in effect through Dec. 31, 2010.

The final 2010 hospital outpatient prospective payment system rule had specified that a “direct supervision” standard is required for therapeutic services furnished in hospital outpatient departments. In its memo, CMS noted that the rule has generated concern among some rural providers who had previously interpreted the CMS policy to require only “general supervision” and who believe the requirement may be difficult to meet.

The CMS memo stated that the agency “plans to revisit” this issue during the annual rulemaking cycle for CY11.

Acute hospital costs per person in Massachusetts were 55.4 percent above the U.S. average in FY07, according to research from the Boston University School of Public Health. The state’s hospital cost per person reached $3,015 in FY07, compared with the U.S. average cost of $1,941 per person. However, the state’s 2006 healthcare reform law is a “negligible factor” in this “cost excess,” according to the report. The study attributes the state’s high hospital costs to many hospital, physician, payment, political, and other forces, including its heavy reliance on costly teaching hospitals and a high physician-to-population ratio.

Cost containment may require “some dramatic changes to inspire, reassure, and motivate some parties to embrace new aims, roles, and methods,” according to the report. To reduce costs, the report says hospitals and physicians need to commit to eliminating unnecessary services and “needlessly costly ones.”

U.S. Department of Health and Human Services Secretary Kathleen Sebelius has announced awards to help states facilitate health information exchange and advance health IT. Funded by the American Recovery and Reinvestment Act of 2009, the awards are part of the $2 billion effort to achieve widespread meaningful use of health IT and provide use of an electronic health record by every citizen by the year 2014. Every state and eligible territory has now been awarded funds under this program.

The awards provide approximately $162 million to 16 states and qualified state-designated entities to facilitate nonproprietary health information exchange that adheres to national standards. 

On February 12, 2010, HHS awarded $385 million to 40 states and SDEs. The awards announced on March 15 complete the awarding of cooperative agreements funded by this program.

Although recent discussions regarding the future of the healthcare industry often have a doom-and-gloom feel, from a ratings perspective, the industry is beginning to show signs of improvement, according to a director for Standard & Poor’s.

“Right now, we’re seeing that the healthcare sector has really stabilized in some ways, especially if you look at where we were a year ago,” says Martin Arrick, managing director, corporate and government ratings, not-for-profit healthcare group, Standard & Poor’s.

So far this year, “upgrades are running ahead of downgrades,” Arrick said Saturday afternoon during HFMA’s Executive Conference, and the number of positive outlook changes is outpacing negative outlook changes year-to-date. Ratings statistics for stand-alone hospitals are currently stronger than those for healthcare systems, he says. Non-operating revenues are showing signs of improvement—in FY09, the median non-operating revenue margin was 0.2 percent—as are operating margins (the median operating margin in FY09 was 2.2 percent).

Standard & Poor’s began to see improvement in the healthcare sector in mid-2009 and particularly in the fourth quarter of last year, Arrick says.

“In general, we’re seeing the healthcare sector bounce back from pressures (of the recession) compared with performance a year ago,” he says.

In 2010, Arrick says, Standard & Poor’s anticipates hospitals will continue to show signs of recovery from the recession. Patient volumes are expected to increase, and access to capital will improve, he says. But hospitals will still face a number of incremental pressures. The following pressures are expected to affect healthcare organizations in 2011 and beyond:

• Continued growth in bad debt & charity care
• Medicaid funding pressures
• Broad state budget pressures (and, what happens when stimulus “sunsets”)
• Employer-based insurance trends
• Broad economic issues
• Utilization trends
• Commercial plans that have their own rate pressures
• Increased physician competition
• Changing access to and more expensive capital

In terms of the mix of upgrades and downgrades that Standard & Poor’s will issue this year, “I think we’re probably going to be at 50-50 this year,” Arrick says. “To me, that’s stabilization and, to some degree, improvement.” However, negative outlooks are expected to exceed positive outlooks this year, he says.

Today’s hospitals face increasing pressure to improve clinical quality and comply with government mandates while working toward reducing treatment costs. During a Saturday morning session at HFMA’s Executive Conference, representatives for three low-cost, high-value organizations shared their strategies for achieving cost savings.

Standardization of care and processes. Although some clinicians will balk at standardizing care processes, “At the end of the day, we’re not standardizing care. We’re bringing our care to standards,” says Melinda S. Hancock, FHFMA, vice president of strategic finance, Bon Secours Richmond Health System, Richmond, Va.

Eliminate waste and rework. When waste is eliminated from a process, quality of care is enhanced and cost is decreased, says John Wiest, CPA, chief financial and institutional services officer, Lee Memorial Health System, Cape Coral, Fla. “Walk around your organization. Are the activities your employees are doing adding value and adding to an optimal patient experience?” he says. “Ask yourself, ‘What in this process is wasteful?’”

Establish productivity as a measure of accountability for leadership. At Lee Memorial, the organization developed a way of reviewing historical productivity by department, developed a four-step process for improving productivity, and created a productivity committee that reviewed measures for improving productivity throughout the organization. Productivity measures are also part of the performance reviews of each of the organization’s leaders, and productivity targets are shared with all employees for transparency.

Engage staff in productivity improvement.  Doing so will increase the value of employees to the organization as well as their satisfaction.  “I want people to have a say in their jobs,” Wiest says. “I want to know what it is that keeps them from doing their jobs to the best of their ability. I want them to be satisfied with their jobs.”

Educate employees about the importance of a process or initiative in improving quality of care and/or reducing cost. “Believe it or not, clinicians want to do the right thing, but they don’t always know what the right thing is,” says Lisa Saubermann, associate director, clinical pharmacy services, University of Rochester Medical Center, Rochester, N.Y.

Establish targeted pharmacotherapy rounds. Choose a specific drug, review its use, and talk with physicians regarding why it was prescribed. This creates opportunities for education of physicians and clinicians—and has the potential to reduce cost. “At our organization, targeted pharmacotherapy rounds have had a huge impact on reducing antimicrobacterial costs,” Saubermann says. “Ask the physicians and clinicians to justify why a patient is on a specific drug. Then, show them data that demonstrate results (of using a different protocol), such as reduced length of stay.”

Get the quick wins. “Don’t try to focus on being perfect. Strive for that overtime, but get the quick wins first,” he says. Sharing news of quick wins with employees will energize their efforts to enhance quality and reduce waste—and result in benefits for patients as well as the health of the organization, he says.

Most hospitals do a poor job of measuring quality in their organizations—and finance professionals have the potential to help their organizations develop a better measurement process, one physician administrator told participants of HFMA’s Executive Conference Saturday morning in Orlando.

John Byrnes, MD, senior vice president, system quality, for Spectrum Health in Grand Rapids, Mich., says the quality measures most hospitals rely on measure quality for a very small percentage of their patient populations—just 17 to 18 percent, he says. As payment mechanisms evolve around never events and readmissions, Byrnes advised the hospital finance professionals attending the conference to “get your quality reporting to be as robust and as detailed as your finance reporting."

“This is where you come in,” he told finance professionals at HFMA’s Executive Conference.

At Spectrum Health, the hospital’s quality and safety reporting system is based on the hospital’s chargemaster. “That’s what makes (our detailed quality reporting) possible,” says Joseph J. Fifer, FHFMA, CPA, vice president hospital group for Spectrum Health. The hospital’s quality and safety reporting system has the capability to analyze quality measurement data for an unlimited number of medical and surgical conditions. Currently, Spectrum Health’s system measures quality of care for 70 percent of the organization’s patient volume, Byrnes says. The organization also makes its quality data transparent by sharing the data on its web site.

“While your organization may not be ready to jump into bundled payment, (looking for opportunities to improve quality of care and reduce cost) are things your organization can be doing today,” Fifer says.

Effectively bringing finance and clinicians together to manage clinical and financial risk in a changing payment environment requires a commitment to being good partners for the sake of patients and the long-term health of their organizations. “If you have a mutual respect for each other’s discipline, you’ll be able to solve these issues together,” Fifer says. When finance professionals show clinicians how to use quality data in their work, clinicians will use the data to drive improvements in quality of care—which will better prepare the organization for bundled payment and refusal by payers to cover hospital-acquired conditions and never events, he says.

Other lessons shared by speakers regarding ways to drive quality improvement and better manage financial risk in healthcare organizations include:

• Tie improvements in quality with managers’ performance reviews and incentive bonuses. Jim Schnuck, senior vice president, financial operations, for Ardent Health Services, says his organization bases 50 percent of managers’ incentives on quality of care targets.
• Focused critical event analysis should take place at two levels: a central level (“Is there a hospitalwide problem?”) and a decentralized level (“Where did the problem(s) occur? Who was involved? What could have been done differently?”), says Tobie L. Bresloff, MD, chief quality officer for Hillcrest Medical Center.
• Screen all admissions for conditions that would be considered HACs (urinary tract infections, skin breakdown, fractures, etc.).
  Make risk management aware of process breakdowns as soon as possible—and involve the department in planning changes.

In comments submitted today to the Centers for Medicare & Medicaid Services (CMS) on the interim final definition of meaningful use, HFMA expressed concern that the proposed definition will make it impossible for most providers to qualify for financial incentives and avoid substantial penalties. Although HFMA supports CMS’s efforts in encouraging providers to adopt electronic health records, CMS’ proposed definition will actually serve as a barrier to achieving the agency’s intended outcome in some instances, HFMA said in its written comments.

Specific concerns detailed in HFMA’s comments include the timing and scope of the phases, the reporting burden, the broad definition of hospital-based physicians, the identification of hospitals for incentive payments, and the Medicaid incentive payment requirements.

The proposed rule was published in the Federal Register on January 13, 2010. Comments are due to CMS by Monday, March 15.

During HFMA’s Executive Conference in Orlando Friday afternoon, David Cutler, PhD, economist and healthcare adviser to President Obama, and Maureen Bisognano, executive vice president and chief operating officer for the Institute of Healthcare Improvement, asked attendees: What are the key drivers of cost and revenue in healthcare systems? And, is there an ideal management system to optimize the linkages between cost and quality?

Some of the key drivers of cost and revenue cited by participants include:

• Process failure
• Lack of training
• Variation (and a lack of standardization) in the use of physician preference items
• Variation in the ways a single procedure is performed
• Daily “fires” that take precedence over goals that have been set
• Focusing on short-term wins and not long-term wins

What does it take to achieve lasting change in an organization—change that results in enhanced quality of care while reducing costs and waste? It starts with passionate leadership, Cutler says. “Every organization that has gone through a large transformation has a very strong leader or leadership team,” he says.

• Lessons participants shared on ways to achieve lasting change include the following:
• Engaging senior leaders in the care and service offered by their organizations through frontline round throughout the system
• Getting serious about the need for change—and requiring everyone in the organization to get on board
• Focusing on the quality of the entire patient experience in addition to the quality of care provided
• Moving from a “defend and deny” survey response to embracing surveyors
• Aligning incentives by using a balanced scorecard that include measures for quality, patient satisfaction, and finance
• Setting a strategic direction along the pillars of service, cost, quality, and growth
• Establishing financial consequences relating to whether long-term goals are met

View the Executive Conference agenda.

Medical care is ineffectively provided, and this both lowers quality and drives up cost, says David Cutler, PhD, one of the nation’s most influential health economists and a key presidential adviser for health care.

During HFMA’s Executive Conference Friday morning in Orlando, Cutler discussed the need to enhance value in health care and ways that improved value could be achieved.

Today, the majority of patients are not satisfied with the service aspects of their medical care due to long wait times, an inability to effectively interact with their care providers, and more. “In health care, no one has stepped up to organize the patient care experience. Patients are essentially their own primary care physicians—they decide when they will get care,” says Cutler, Otto Eckstein Professor of Applied Economics at Harvard University.

Meanwhile, the organizations that should be connecting care are not doing so, he says. Cutler predicts that ultimately, someone will step into the role of providing care coordination—and that “whoever handles care coordination will be controlling the care experience, both in terms of care and service,” he says.

“Over the next decade, I would be very surprised if we did not see more of that type of organization going on,” both to reduce costs and improve the quality of care, he says. “Active management of (the care) people need, and the best way to deliver that care, is critical to improving value in care,” he added.

During his presentation, titled “The Value Proposition in Health Care,” Cutler provided five ideas regarding who might step into the role of healthcare coordination:

• Primary care providers (medical homes)
• Phamaceutical companies
• Insurers
• Companies such as Google or Microsoft
• iPhone developers

He asked healthcare finance professionals who attended the conference who they might add to this list of potential healthcare coordinators. “Walmart,” some attendees suggested.

Cutler also discussed several key changes that could result in taking a healthcare system that is haphazard in quality and too costly and focusing it on the core mission of value enhancement:

• Improving the flow of information in health care
• Aligning compensation systems so they reward better care, not just more care
• Stressing organizational structures that lead to improved performance

Changes in the current economic environment are creating a “burning platform” for healthcare reform—and healthcare finance professionals should be lead participants in efforts to improve care while reducing waste, two healthcare leaders told participants at HFMA’s Executive Conference in Orlando Friday morning.

“As healthcare finance professionals, we bring a lot of skills to the table to be able to advance discussions of ways to enhance quality of care while reducing costs,” HFMA Chair Catherine Jacobson, FHFMA, CPA, told attendees of HFMA’s Executive Conference.

During Friday’s opening session, “Reducing Waste and Enhancing Quality: A Case Study Approach,” Jacobson and Maureen Bisognano, executive vice president and COO, Institute for Healthcare Improvement, shared ways healthcare finance professionals could participate in systematically identifying and eliminating inefficiencies while maintaining or improving quality of care.

Early involvement by healthcare finance professionals on clinical improvement initiatives is crucial, Jacobson says. “Healthcare finance professionals are uniquely positioned to be able to encourage other key stakeholders to embrace change,” she says. Finance should  look for ways to communicate quality and performance data effectively and to balance the need for urgent change with a well thought-out strategy—a challenge for healthcare organizations.

The best way to bring CFOs, CEOs, and clinicians together in improving quality of care and processes is to give senior leaders the opportunity to view care and processes from the frontlines, Bisognano says.

She provided examples of ways healthcare finance professionals and clinicians have worked together to provide better care at lower cost.

One Pennsylvania hospital invested $35,000 in reducing the rate of blood infections—and saved more than $2 million, she says. Another hospital developed specific processes for reducing hospital-acquired infections in pediatric patients—and statistics showed that the initiative potentially saved the lives of 20 children per year, she says.

Three strategies for improving value in care, according to Bisognano, include:

• Eliminating quality problems that arise because patients’ expectations are not met
• Reducing costs (waste) significantly while maintaining or improving quality
• Expanding patients’ expectations by providing care delivery perceived as unusually high in value

Throughout the presentation, Bisognano discussed mounting evidence that better care can come at lower cost, and provided a compelling business case for improving quality. “I’m hopeful that the need to improve quality and reduce costs in health care is going to bring finance and clinicians together at the same table,” Bisognano says.

HFMA President and CEO Richard L. Clarke, DHA, FHFMA, advised healthcare finance leaders assembled in Orlando last night for HFMA’s Executive Conference to focus on strategic imperatives for success rather than the ups and downs of the reform legislation process.

Clarke began his remarks by outlining the forces that are driving change in today’s healthcare delivery system, including reduced access to health insurance coverage, a universal demand for improved quality, and exponential growth in healthcare expenditures.

In light of these change drivers, Clarke recommended that healthcare stakeholder value propositions address three major focus areas: access, quality, and cost. As cost pressures increase and hospital revenue streams are squeezed, organizations that are customer-centric and nimble will be well positioned for success, Clarke said. He also discussed innovative strategies to manage risk, reduce cost, price bundled services, and enhance quality while lowering cost, as detailed in HFMA’s newly published report, Healthcare Payment Reform: Accelerating Success.

Featured speakers at HFMA’s Executive Conference, “The Healthcare Imperative: Improving Quality While Driving Down Costs,”  include renowned healthcare economist David M. Cutler, PhD, Institute for Healthcare Improvement Executive Vice President and COO Maureen Bisognano, and Martin Arrick, managing director in Corporate and Government Ratings, Standard & Poor’s. The conference continues through Saturday.

A series of major initiatives to further increase transparency and oversight in the healthcare group purchasing industry have been announced by the Healthcare Group Purchasing Industry Initiative (HIGPII), an organization that promotes high ethical standards and practices for healthcare group purchasing organizations (GPOs). Upon completing its 2010 Best Practices Forum in Washington, D.C., HGPII introduced plans to establish an independent process for healthcare suppliers to file business grievances, as well as the convening of an independent ethics advisory panel to provide objective, independent guidance toward continued compliance with the highest ethical standards in the healthcare group purchasing industry.

“Hosting this annual forum to hold a constructive dialogue with a diverse range of industry and ethics experts is essential to adapting HGPII policies to fit the constantly changing dynamics of the healthcare industry, and we are gratified that congressional staff members and others were able to attend and participate in the conference,” said Lee H. Perlman, HGPII chairman.

In the development of its guiding principles, HGPII consulted with members of Congress, Capitol Hill staff, ethicists, outside industry experts, and leaders in the GPO industry.

Curtis Rooney, president of the Health Industry Group Purchasing Association (HIGPA), said in a statement, “Transparency and accountability in the healthcare sector are essential to reducing costs for hospitals, nursing homes, and patients. HGPII’s initiatives are critical to maintaining transparency in the GPO industry, and HIGPA urges other industries to implement their own policies to increase value in the healthcare supply chain and provide patients with the best care.”

The Senate’s healthcare reform bill would reduce federal deficits by $118 billion from 2010 to 2019, according to a revised estimate of the bill’s budgetary effects. The Congressional Budget Office (CBO) and the Joint Committee on Taxation estimated the direct spending and revenue effects of the bill, the Patient Protection and Affordable Care Act (H.R. 3590), as it was passed by the Senate on Dec. 24, 2009. The updated estimate differs from their Dec. 19 estimate for an earlier version of the bill in that it encompasses all of the amendments that were adopted by the Senate, reflects a revised assumption about its enactment date, and incorporates some technical revisions. The earlier estimate projected the budgetary impact to be a net reduction in deficits of $132 billion.

Expanding health insurance coverage for 2010-19 is now projected at a gross cost of $875 billion, reflecting subsidies provided through insurance exchanges, increased net outlays for Medicaid and the Children’s Health Insurance Program, and tax credits for small employers. Those costs are partly offset by revenues from an excise tax on high-premium insurance plans and net savings from other coverage-related sources, leaving a net cost of $624 billion for the coverage provisions. Other provisions affecting direct spending save $478 billion, on net—mostly in Medicare—and other provisions affecting revenues reduce the deficit by $264 billion, on net. The CBO has not completed an estimate of all discretionary costs that would be associated with the legislation.

Meanwhile, 41 economists signed and released a letter to President Obama and Congress today declaring that the healthcare reform proposals currently under consideration will control costs and lead to deficit reduction. The letter states that the healthcare reforms passed by the House and the Senate “include serious measures that will slow the growth of healthcare spending.”

Read the CBO director's blog entry about the revised estimate.

President Barack Obama today announced a new effort to crack down on waste, fraud, and abuse in Medicare, Medicaid, and other government programs through the expanded use of payment recapture audits, such as those performed by recovery audit contractors and Medicaid integrity contractors. 

In a press release, the White House projected that use of these audits could yield at least $2 billion over the next three years—double the amount of recovered costs currently projected.

A presidential memorandum signed today directs all federal departments and agencies to expand and intensify their use of payment recapture audits under their current authority. Obama also announced his support for the Improper Payments Elimination and Recovery Act, bipartisan legislation that expands the ability of government agencies to fund the audits with recaptured payments.

The Senate has approved a $138 billion bill to push back Medicare physician payment cuts from April 1 to October 1. The bill holds off a 21.2 percent cut in Medicare payment to physicians resulting from the sustainable growth rate formula. Physician industry groups have long been urging the Senate to implement a permanent payment fix.

The Senate had voted 78-19 on March 2 to delay the Medicare physician payment cut for one month. The House has already passed legislation that would permanently repeal the payment formula.

The Senate bill passed today also extends federal COBRA subsidies for laid-off workers’ health insurance premiums through Dec. 31, 2010, and extends additional federal financial assistance for state Medicaid programs for six months.

The bill now heads back to the House, which had passed an earlier version.

Health and Human Services Secretary Kathleen Sebelius called on major insurance companies to publicly justify their proposed health insurance premium increases. In a letter to the CEOs of UnitedHealth Group Inc., WellPoint Inc., Aetna Inc., Health Care Service Corporation and CIGNA HealthCare Inc., Sebelius reiterated a request she made at a meeting last week with these executives at the White House, when she asked them to post on their web sites justification for any individual or small group rate increase for 2010.

In a statement explaining the letter, Sebelius said, “Last Thursday, I asked CEOs to post online the actuarial justification for premium hikes so consumers can see why their premiums are skyrocketing. Now, it’s time for these insurance company CEOs to do their part to make the system more transparent for the American people. If insurance companies are going to raise rates, the least they can do is tell us why.”

The letter comes shortly after an analysis from Goldman Sachs found that competition in the insurance market is so weak, insurance companies can continue to raise rates even if it means losing customers. The analysis found that “price competition is down” and that “incumbent carriers seem more willing than ever to walk away from existing business.”

The Governmental Accounting Standards Board (GASB) is soliciting public healthcare organizations to participate in a field test it is conducting in conjunction with the expected March issuance of an Exposure Draft in its financial reporting entity project. Information about the field test, including how to volunteer to participate, is available from the GASB.