Less than 2 percent of nonfederal general acute care hospitals had a comprehensive electronic health record (EHR), according to a new report funded by the Robert Wood Johnson Foundation, Health Information Technology in the United States: On the Cusp of Change, 2009. An additional 7.6 percent had a basic EHR. Teaching hospitals, those with more than 500 beds, and hospitals that were members of a system or located in an urban area more commonly reported having EHRs.

The individual functionalities most commonly reported as fully implemented across all hospital units were electronic viewing of laboratory (77 percent) and radiology (78 percent) reports, and radiology images (78 percent). Approximately one in five hospitals reported fully implemented computerized order entry and clinical decision support.

This report is the third in a series of reports about health IT (HIT) adoption in the United States. This edition highlights the needed integration steps between performance measurement initiatives and HIT. Other topics covered include: adoption of electronic health records in U.S. hospitals, and specifically among hospitals that care for the poor; state roles in the advancement of HIT; and recent federal initiatives related to HIT.

Collaboration and technology are the keys to improving healthcare results for all parties involved, according to Blue Cross and Blue Shield Association Senior Vice President and CFO Robert J. Kolodgy. In a keynote speech today at HFMA's Revenue Cycle Strategies Conference in Chicago, Kolodgy outlined areas where providers and payers could collaborate to support innovation and improve patient results. Those areas included care delivery, medical home pilots, electronic health records, e-prescribing and information sharing. Kolodgy pointed to the Alabama Hospital Quality Initiative and the Minnesota Health Information Exchange as examples of collaboration with positive results. He also voiced support for comparative effectiveness via an Independent Research Institute.

Revenue cycle excellence can be achieved by all hospitals and health systems, regardless of an organization’s financial means or patient mix, according to the Healthcare Financial Management Association’s latest PATIENT FRIENDLY BILLING® Project report, Strategies for a High-Performance Revenue Cycle. The 37-page report was released today at HFMA’s Revenue Cycle Strategies Conference in Chicago.

Based on visits to high-performing sites across the nation and interviews with executives and revenue cycle staff, the report identifies three traits shared by high performers: an organizational culture that elevates the importance of the revenue cycle, mastery of areas that are important to organizational circumstances, and the ability to accelerate improvements.

Strategies for a High-Performance Revenue Cycle features detailed research findings, guidance for senior executives and revenue cycle leadership, and numerous case studies demonstrating practical applications of high-performance strategies.

“We know that hospital leaders are committed to the principles of Patient Friendly Billing, but they need to know which revenue cycle practices matter the most,” said HFMA President and CEO Richard L. Clarke, DHA, FHFMA. “This report highlights the practices frequently found at high-performing revenue cycle hospitals—and how they differ from the rest of the industry.”

Oaklawn Hospital, Marshall, Mich., is among the 14 hospitals that shared their expertise with Patient Friendly Billing report leaders through onsite visits and extensive interviews. “Over five years ago, Oaklawn began integrating its adaptation of HFMA’s Patient Friendly Billing Initiative best practices into our organizational goals. Over those years, it has played a significant role in improving our organizational performance and enhancing our patient satisfaction. We recently were recognized with HFMA’s High Performance in Revenue Cycle Award, in part, due to this foresight,” said Rob Covert, President & CEO, Oaklawn Hospital.

Joseph Fifer, Vice President, Hospital Finance at Spectrum Health added “Determining the value proposition for patients and the organization is a critical factor in every decision we make. Hospitals highlighted in this report, that deploy the practices from previous Patient Friendly Billing reports, satisfy this standard by demonstrating tangible and better results.”

More information about the project, including a 16-page executive summary of the report, is available at the Patient Friendly Billing web site, www.patientfriendlybilling.org.

U.S. Department of Health and Human Services Secretary Kathleen Sebelius today called on states and communities to join with HHS to redouble efforts to find and enroll the 5 million children who are currently eligible for Medicaid or the Children’s Health Insurance Program (CHIP), but are not yet covered. The Secretary issued this call to action as she opened the National Children’s Health Insurance Summit in Chicago, kicking off the nation’s largest campaign to find and enroll uninsured children in over a decade.

For more information about free or low-cost children’s health insurance, parents and caregivers may visit www.insurekidsnow.gov  or call 1-877-KIDS-NOW (1-877-543-7669). National Children’s Health Insurance Summit presentations are available online.

The names of 75 hospitals recognized for their exceptional quality achievements and ongoing commitment to quality improvement were announced today by Nashville, Tenn.-based research firm Data Advantage.

The firm examined hospital performance in the categories of quality, affordability, efficiency, and patient satisfaction. Quality was analyzed using publicly available data from the Centers for Medicare & Medicaid Services (CMS) Core Measures, Agency for Healthcare Research and Quality (AHRQ) Patient Safety Indicators, CMS 30‐day mortality scores, and CMS-reported hospital readmission rates.

Read the press release about the awards.

Most healthcare leaders surveyed in the latest Commonwealth Fund/Modern Healthcare Health Care Opinion Leaders Survey favor sweeping Medicare changes to help control program costs and support broader healthcare reform.

The vast majority of respondents favor expanding the power of the Secretary of Health and Human Services to put Medicare payment pilot programs on a "fast track" (95 percent) and to work with private payers and providers to establish multipayer initiatives (94 percent). Similarly, there was strong support for creation of an independent Medicare advisory council (favored by 75 percent) with broad authority to collaborate in multi-payer initiatives (89 percent), develop, test, and implement payment reforms rapidly and flexibly (88 percent), and alter beneficiary incentives based on effectiveness of services, drugs, and devices (86 percent).

Among other survey findings:

• Sixty-five percent of respondents feel that bundled payments and encouraging beneficiaries to designate a medical home would be effective policies for improving care and reducing costs.
• Nearly three-quarters (74 percent) of leaders believe older adults ages 50 to 64 should be able to buy Medicare coverage.
• A strong majority (69 percent) favor having Medicare offer its own comprehensive benefit package option as an alternative to Medigap or Medicare Advantage coverage.
• Nearly all (91 percent) healthcare opinion leaders support a requirement that Medicare providers participate in developing state, regional, and national all-payer databases to aid in research, policy development, and monitoring and evaluation.

By a clear margin, opinion leaders do not favor strategies that shift costs to beneficiaries or reduce payments across the board. Only 42 percent support offering a high-deductible health plan and 36 percent approve of requiring Medicare beneficiaries to pay a higher share of costs. Capping federal spending was similarly unpopular (26 percent), as was reducing payments to providers (19 percent).

At the request of the National Committee on Vital and Health Statistics, the Workgroup for Electronic Data Interchange (WEDI) has developed two surveys to assess healthcare industry progress toward achieving 5010 and ICD-10 implementation.

WEDI is seeking a single response to each of the two surveys from each participating organization, in order to maintain the integrity of the survey results.

The group has removed any questions that could be used to identify respondents. WEDI assures prospective respondents that no enforcement will result from survey participation.

Responses will be accepted until Nov. 12.

Access the surveys and files that may be downloaded for use as worksheets from the WEDI survey announcement.

The Federal Trade Commission (FTC) is delaying enforcement of the Red Flags rule until June 1, 2010, for financial institutions and creditors subject to enforcement by the FTC. The extension follows previous delays that were set to expire on Nov. 1. The Rule was promulgated under the Fair and Accurate Credit Transactions Act, in which Congress directed the FTC and other agencies to develop regulations requiring “creditors” and “financial institutions” to address the risk of identity theft. The resulting Red Flags rule requires all such entities that have “covered accounts” to develop and implement written identity theft prevention programs to help identify, detect, and respond to patterns, practices, or specific activities – known as “red flags” – that could indicate identity theft.

Read the FTC announcement.

The Centers for Medicare & Medicaid Services (CMS) has issued a final rule on home health payment that includes a 2.0 percent market basket update to Medicare’s CY10 home health prospective payment system rates and a 2.75 percent coding reduction. The CY10 reduction is the third of four reductions authorized in a prior rule. In other provisions of the rule, CMS will cap home health outlier payments at 10 percent per home health agency and target total aggregate outlier payments at 2.5 percent of total payments. The current target for aggregate outlier payments is 5 percent of total expenditures.

The final rule will be published in the Federal Register on Nov. 10, 2009. The effective date is Jan. 1, 2010.

The Centers for Medicare & Medicaid Services (CMS) has published a final rule updating payment policies and rates for hospital outpatient departments (OPPS) and ambulatory surgical centers (ASCs) in CY10.

Most hospitals will receive an inflation update of 2.1 percent in their payment rates for Medicare outpatient services. Under the Hospital Outpatient Department Quality Data Reporting Program, hospitals that did not participate in the program or did not successfully report the quality measures will receive an update equal to the annual inflation update factor minus 2.0 percentage points for a net update of 0.1 percent.

ASCs will receive a 1.2 percent inflation update.

CMS projects that aggregate Medicare payments to hospitals and community mental health centers in CY10 will be approximately $32.2 billion, while aggregate Medicare payments to ASCs will total $3.4 billion.

The final rule will appear in the Nov. 20 Federal Register. Comments are due by Dec. 29. CMS will respond to comments in the CY11 OPPS/ASC final rule.

The Centers for Medicare & Medicaid Services (CMS) has released the Medicare physician fee schedule final rule for CY10, which will reduce Medicare payment rates for physicians by 21.2 percent in the absence of Congressional action to avert the cut. The U.S. House of Representatives has introduced draft legislation to permanently reform the physician payment formula. A similar measure in the Senate did not pass a vote at the committee level in October.

The CMS final rule will appear in the Nov. 25, 2009 Federal Register. CMS will accept comments on designated provisions of the final rule until Dec. 29, and will respond to comments at a later date. Unless otherwise specified, the new payment rates and policies will apply to services furnished to Medicare beneficiaries on or after Jan. 1, 2010.

The U.S. Department of Health and Human Services (HHS) on Oct. 31 issued an interim final rule that increases penalties for violations of the privacy and security rules promulgated under the Health Insurance Portability and Accountability Act (HIPAA).  The Health Information Technology for Economic and Clinical Health (HITECH) Act, which was enacted as part of the American Recovery and Reinvestment Act of 2009, significantly increase the penalty amounts HHS may impose for violations of the HIPAA rules.

Prior to the HITECH Act, the Secretary could not impose a penalty of more than $100 for each violation or $25,000 for all identical violations of the same provision. A covered healthcare provider, health plan or clearinghouse could also bar the Secretary’s imposition of a civil money penalty by demonstrating that it did not know that it violated the HIPAA rules.  Section 13410(d) of the HITECH Act strengthened the civil money penalty scheme by establishing tiered ranges of increasing minimum penalty amounts.

Under the new rule, the maximum individual penalty for civil violations of HIPAA will increase from $100 to $25,000 and the penalty cap will rise from $25,000 to $1.5 million for total violations of the same provision.  A covered entity can no longer bar the imposition of a civil money penalty for an unknown violation unless it corrects the violation within 30 days of discovery.

The interim final rule with request for comments will become effective on Nov. 30, and HHS will consider all comments received by Dec. 29, 2009.

Read the HHS press release.

A new report from the U.S. Department of Health and Human Services outlines the ways health insurance reform can lower healthcare costs for small businesses. Among the findings presented in Lower Premiums, Stronger Businesses: How Health Insurance Reform Will Bring Down Costs for Small Businesses are the following:

• On average, small businesses pay up to 18 percent more than large firms for the same health insurance policy.
• In a recent national survey, nearly three-quarters of small businesses that did not offer benefits cited high premiums as the reason.
• Thirty-six percent of workers in small firms spent more than 10 percent of their household income on out-of-pocket medical expenses in 2007, compared with 27 percent of workers in larger firms.

According to the report, health insurance reform will bring down costs for small businesses by creating a health insurance exchange, providing a small business tax credit, ending the “hidden tax” on small businesses that provide health insurance, and preventing arbitrary premium hikes.

House speaker Nancy Pelosi (D-Calif.) today unveiled an $894 billion reform bill that would provide insurance to up to 36 million people by expanding Medicaid and offering subsidies to moderate-income Americans to purchase insurance privately or through a new public plan option. 

As proposed, reimbursement rates in the public plan would be negotiated between providers and federal health officials; they would not be based on Medicare rates.

The bill would expand Medicaid eligibility levels to 150 percent of the federal poverty level for all adults, a higher level than in earlier drafts of the legislation.

The bill would impose a new income surtax on individuals earning more than $500,000 and couples earning more than $1 million. In this respect, it differs from the measure under development by Senate majority leader Harry Reid (D-Nev.), which would impose a tax on high-cost insurance policies in lieu of a personal income surtax.

According to the Congressional Budget Office, the House bill would reduce future federal deficits by about $30 million over the next 10 years.

The Centers for Medicare & Medicaid Services (CMS) has announced the inpatient hospital deductible and the hospital and extended care services coinsurance amounts for services furnished in CY10 under Medicare Part A, effective Jan. 1, 2010.

The CY10 inpatient hospital deductible will be $1,100. The daily coinsurance amounts for CY10 will be: (a) $275 for the 61st through 90th day of hospitalization in a benefit period; (b) $550 for lifetime reserve days; and (c) $137.50 for the 21st through 100th day of extended care services in a skilled nursing facility in a benefit period.

CMS also announced the standard monthly Part B premium rate of $110.50 for CY10 and the annual deductible amount of $155.00 for CY10. The standard premium rate of $110.50 for next year reflects an increase of $14.10 over the CY09 rate of $96.40.

Read the CMS notices about Medicare Part A and Part B in the Federal Register.

Outbound medical tourism has experienced a slowdown since 2007, driven by the economic recession and consumers putting off elective medical procedures, according to a new Deloitte Center report, Medical Tourism: Update and Implications. An estimated 540,000 Americans traveled abroad for medical care in 2008 (a 20 percent decrease) and a projected 648,000 (a 10 percent decrease) did so in 2009. The economic recovery may help spur a sustainable 35 percent annual growth rate for the medical tourism industry by 2010.

Inbound medical tourism, or foreigners visiting the United States to receive medical care, is expected to grow relatively slowly, with up to 561,000 travelers expected annually by 2017.

Other highlights of the report include the following:

• Eight percent of respondents sought healthcare services outside of their immediate community; more than 40 percent said they would travel outside of their immediate area for care if their physician recommended it or for a 50 percent cost savings; 1 percent reported using an offshore healthcare provider; 9 percent said they’d be likely to do so; and 69 percent said they’d be unlikely to do so.
• Several health insurers have launched medical tourism pilots as part of health benefit plans.
• The Joint Commission International has increased the number of approved foreign medical sites from 76 in 2005 to more than 220 in 2008.
• India’s medical tourism sector is expected to grow 30 percent annually from 2009 to 2015.
• Healthcare reform will likely propel growth in the elective outpatient market, particularly if flex account expenditures are limited to $2,000 or less, and elective cosmetic and dental procedures are not considered “basic benefits.”
  

The U.S. healthcare system wastes between $600 billion and $850 billion annually, according to an analysis published by Thomson Reuters. The report identifies the most significant drivers of wasteful spending based on a review of published research and analyses of proprietary healthcare data.

Unnecessary care represents an estimated 40 percent of healthcare waste, according to the report. This category, which includes unwarranted treatment such as the over-use of antibiotics and the use of diagnostic lab tests to protect against malpractice exposure, accounts for $250 billion to $325 billion in annual healthcare spending.

Other drivers of wasteful spending that are quantified in the report include fraud (19 percent), administrative inefficiency (17 percent), medical errors (12 percent), preventable conditions (6 percent), and lack of care coordination (6 percent).

In what has been portrayed as a turning point in the debate on healthcare reform legislation, Senate Majority Leader Harry Reid (D-Nev.) announced Monday that he will seek to bring a reform bill to the Senate floor that includes a public option. An opt-out clause in the bill would allow states to decide by 2014 not to participate in the government plan, Reid said.

Other public-option approaches under consideration include a "trigger" that would create a government plan if private insurers do not offer policies at affordable prices.

The proposal Reid discussed Monday is a merger of two bills previously approved by Senate committees.

In an effort to proactively address the ongoing pandemic, President Obama on Sunday signed a National Emergency Declaration on H1N1 influenza that allows healthcare systems to quickly implement disaster plans should they become overwhelmed.
 
As experts expected, H1N1 flu is moving rapidly throughout the country and the majority of states now have widespread influenza activity. This declaration gives authority for the Department of Health and Human Services (HHS) to waive certain regulatory requirements for healthcare facilities in response to the ongoing pandemic. Specifically, healthcare facilities will be able to submit waivers to establish alternate care sites, and modified patient triage protocols, patient transfer procedures, and other actions that occur when they fully implement disaster operations plans.

Waivers still require that specific requests be submitted to HHS and processed, and some state laws may need to be addressed as well. Requirements that may be waived include those related to Medicare, Medicaid or the Children’s Health Insurance Program (CHIP), the Emergency Medical Treatment and Active Labor Act (EMTALA), and the Health Insurance Portability and Accountability Act (HIPAA).

Philanthropic giving for health care in the United States grew by just 2.9 percent—or about $241 million—to $8.6 billion in 2008, according to a report issued by the Association for Healthcare Philanthropy (AHP). Grateful patients, businesses, foundations, and other donors made $8.588 billion in charitable contributions to healthcare facilities and organizations in 2008, the AHP’s Report on Givingdetermined. 

This 2.9 percent increase was about half the growth rate achieved in 2007, when donations totaled $8.347 billion.

Accounting for much of the slight advance in giving was the fact that most not-for-profit hospitals and healthcare systems closed their books before the last quarter of 2008, when U.S. gross domestic product plunged more than 5 percent. Institutions that closed their books on Dec. 31, 2008, actually saw a 0.2 percent dip in annual giving.

More than eight of every 10 donations came from individuals, whose contributions comprised 60 percent of all philanthropic funds raised by not-for-profit healthcare institutions last year. One in 10 donations were made by businesses, including business-sponsored foundations, representing 17.5 percent of all funds raised, down slightly from 2007. Noncorporate foundations accounted for less than 3 percent of donors but almost 14 percent of revenues.  Other giving sources, including hospital auxiliaries, public agencies, and civic groups, accounted for 8.6 percent of total funds raised in 2008, compared to 7.5 percent in 2007.

The U.S. Department of Health and Human Services (HHS) has awarded $17 million to fund projects to fight healthcare-associated infections, or HAIs.

Of the $17 million, $8 million will fund a national expansion of the Keystone Project, which within 18 months successfully reduced the rate of central-line blood stream infections in more than 100 Michigan intensive care units and saved 1,500 lives and $200 million. Last year, the Agency for Healthcare Research and Quality (AHRQ) funded an expansion of this project to 10 states. With additional funding from AHRQ and a private foundation, the Keystone Project is now operating in all 50 states, Puerto Rico and the District of Columbia. The new funding will expand the effort to more hospitals, extend it to other settings in addition to ICUs, and broaden the focus to address other types of infections.

AHRQ, in collaboration with the Centers for Disease Control and Prevention, also identified several high-priority areas to apply the remaining $9 million toward reducing MRSA and other types of HAIs.

HAIs are one of the most common complications of hospital care. Nearly 2 million patients develop HAIs, which contribute to 99,000 deaths each year and $28 billion to $33 billion in healthcare costs. HAIs are caused by different types of bacteria that infect patients being treated in a hospital or healthcare setting for other conditions. The most common HAI-causing bacteria is methicillin-resistant Staphylococcus aureus, or MRSA. The number of MRSA-associated hospital stays has more than tripled since 2000, reaching 368,600 in 2005, according to AHRQ's Healthcare Cost and Utilization Project.

Read the HHS press release.

The number of rating downgrades declined notably for the first time in the third quarter of 2009 following three consecutive quarters of unprecedented heavy rating downgrade activity, according to an analysis released by Moody’s Investors Service. The ratio of downgrades to upgrades (1.5 to 1) was also more balanced in Q3, a sharp change from the 19 to five (3.8 to 1 margin) and 17 to four (4.3 to 1 margin) ratios in the first and second quarters of 2009, respectively. However, year-to-date activity reported in Moody’s Not-For-Profit Healthcare Quarterly Review: Third Quarter 2009 still shows downgrades far outpacing upgrades with 45 rating downgrades and 15 upgrades (3.0 to 1 margin).

Citing adverse impacts of anticipated cuts in Medicare and Medicaid reimbursement, Moody’s is maintaining its negative outlook on the not-for-profit healthcare industry until federal healthcare reform is finalized, despite the apparent easing of downgrade pressure. Other potential reform-related changes would have “uncertain outcomes for the industry, but there would be winners and losers,” the rating agency said. Moody’s will continue to monitor the progress of these changes, including a tax on more costly health insurance plans, bundled payments, the advent of a public option or not-for-profit health cooperative, and quality/payment links. Moody’s also stated that any effort to significantly reduce the uninsured population would decrease hospital bad debt and charity care, thereby bolstering profits.

Wholesale prices for hospitals increased 0.2 percent in September, the Bureau of Labor Statistics reported. The increase in the Producer Price Index (PPI) compares with a price drop of 0.1 percent for the same month in 2008.
For the year ended in September, wholesale hospital prices rose 3 percent, the same as the increase for the prior year. For the 12 months that ended in August, the price increase was 2.6 percent.

Physician wholesale prices increased 0.1 percent in September, matching the price increase in September 2008. The physician PPI was up 2.6 percent for the 12-month period that ended in September, as compared with 0.7 percent for the prior year. It was unchanged from the 12 months ended in August.

The House Judiciary Committee on Wednesday approved a bill removing the federal antitrust exemption for health and medical malpractice insurers. 

The bill, which cleared the committee by a 20-9 vote, calls for ending the exemption to ensure these insurers “cannot engage in price fixing, bid rigging, or market allocations to the detriment of competition and consumers.” The exemption was granted under the 1945 McCarran-Ferguson Act, which defers insurance regulation to the states.

House Speaker Nancy Pelosi (D-Calif.) is planning to include the measure in the healthcare reform package that Democrats hope to bring before the full House in November, according to a report today in the Washington Post. A companion bill has been introduced in the Senate.

One in every four hospital professional liability claims and 24 percent of related costs are associated with hospital-acquired conditions such as infections and injuries, medication errors, objects left in surgery, and pressure ulcers, according to a study conducted by Aon Corporation in conjunction with the American Society for Healthcare Risk Management.

The study also finds that the frequency of claims is on the rise and is expected to continue increasing at 1 percent annually, after a decade of decreases. The rise is attributed to the economic downturn, changes to Centers for Medicare & Medicaid Services payment rules regarding never events, and changes in public sympathy toward healthcare providers.

Other study highlights include the following:

• In 2010, hospital loss costs per occupied bed equivalent, a major part of the total cost of risk, are expected to increase 5 percent annually to $3,170.
• Claim severity, including both indemnity and defense costs, continues to increase at a consistent rate and is projected to increase by 4 percent annually.
• In 2010, hospitals can expect to incur liability costs of $181 per birth in the obstetrics unit and $7.20 per visit in the emergency department.

Read the Aon press release.

The Centers for Medicare & Medicaid Services (CMS) has released four new FAQs regarding Recovery Audit Contractors (RACs) in the past four weeks. Excerpts from these FAQs are reprinted, in part, below.

How long is the RAC discussion period?
The discussion period begins with the time of notification (demand letter for automated reviews and the review results letter for complex reviews) through the time recoupment occurs. The discussion period normally requires written notification to the RAC. The discussion period does not extend the provider's appeal timeframes.

I heard that RAC medical record request limits will be based on my 2007 claims volume, then I heard on 2008. Which is it?
Limits in the remainder of the fiscal year ending September 30, 2009, are based on claim volume in the 2008 calendar year. This differs from our original announcement that limits in the current year would be based on 2007 claim volumes.

Will Code N432 appear on the remittance advice for RAC adjusted claims?
CMS created code N432 to identify RAC adjusted claims, however CMS believes the code is being superseded in some of the systems by code N469 which is the Section 935 Limitation on Recoupment code. We are working to correct this problem in the system. Providers will receive demand letters for all RAC adjusted claims. These letters will allow providers to keep track of RAC adjustments versus all other claims processing adjustments.

If I am a chain provider whose FI is WPS (serving as the national fiscal intermediary) who will my RAC be?
This answer assumes the hospital originally had Mutual of Omaha as the claims processing contractor and the merger of WPS and Mutual of Omaha is how WPS became the provider's claim processing contractor. WPS currently serves as a national fiscal intermediary in CMS. They service providers in the majority of the states. These providers have not yet transitioned to a MAC. WPS will work with all 4 RACs. If WPS is your claim processing contractor (as the national fiscal intermediary and not part of the local jurisdiction) your RAC is based on your physical location. For example, if you are located in Tennessee, but WPS is your claims processing contractor your RAC is in Region C.