Healthcare Financial News

Revenue in medical practices declined in 2008 for the first time in several years, according to the Medical Group Management Association (MGMA). The drop may be tied to smaller patient volumes and increasing bad debt due to patients' financial hardship. Medical practices responded by trimming overhead costs, but not enough to accommodate shrinking revenues.

According to the MGMA Cost Survey: 2009 Reports Based on 2008 Data, multispecialty group practices saw a 1.9 percent decrease in total medical revenue in 2008. MGMA captures data on both multispecialty groups and single-specialty practices, but uses multispecialty data as a proxy for overall trends. Falling revenues may be attributable to a decline in patient volume, indicated by a 9.9 percent drop in the number of procedures and an 11.3 percent slump in the number of patients from 2006 to 2008.
Additionally, bad debt in multispecialty group practices from fee-for-service charges increased 13 percent from 2006 to 2008.

MGMA data indicate that total operating cost increased 54 percent in multispecialty group practices in the past 10 years, while total medical revenue increased 46 percent. In 2008, multispecialty practices reduced their overhead expenses 1.4 percent, largely by cutting support staff costs by 1.5 percent – the first decline in several years. Support staff costs make up 32 percent of medical practice expenses. The total worker count remained constant, indicating that employees may have gone without raises, bonuses, or perhaps that pay cuts were made.

Read the MGMA press release.

New regulations designed to protect individuals’ genetic information were issued today by the U.S. Departments of Health and Human Services (HHS), Labor, and the Treasury.

The interim final rule will help ensure that genetic information is not used adversely in determining healthcare coverage and will encourage more individuals to participate in genetic testing.

The interim final rule with request for comments and the notice of proposed rulemaking implement Title I of the Genetic Information Nondiscrimination Act of 2008 (GINA). Under GINA, and the interim final rule, group health plans and issuers in the group market cannot: increase premiums for the group based on the results of one enrollee’s genetic information; deny enrollment; impose pre-existing condition exclusions; or do other forms of underwriting based on genetic information. In the individual health insurance market, GINA prohibits issuers from using genetic information to deny coverage, raise premiums, or impose pre-existing condition exclusions.

Further, under GINA and the new interim final regulations, group health plans and health insurance issuers in both the group and individual markets cannot request, require or buy genetic information for underwriting purposes or prior to and in connection with enrollment. Finally, plans and issuers are generally prohibited from asking individuals or family members to undergo a genetic test.

Additionally, HHS, through its Office for Civil Rights (OCR), issued a notice of proposed rulemaking with a 60-day comment period, to propose changes to the Health Insurance Portability and Accountability Act (HIPAA) Privacy Rule to prohibit health plans from using or disclosing genetic information for underwriting purposes.

View the regulations.
 

HHS has announced $40 million in grants to 69 grantees in 41 states and the District of Columbia to help them find and enroll children who are uninsured but eligible for either Medicaid or the Children’s Health Insurance Program (CHIP).

The Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA) set aside $100 million for fiscal years 2009-2013 expressly to help find and enroll eligible children. Of the total outreach amount, $80 million will be given to states and other organizations, $10 million to Tribal organizations, and $10 million for a national outreach effort. These awards are for a two year period ending Dec. 31, 2011, which will then be followed by a second round of $40 million in new grants.

As called for in CHIPRA, grants were awarded to applicants whose outreach, enrollment, and retention efforts will target geographic areas with high rates of eligible but uninsured children, particularly those with racial and ethnic minority groups who are uninsured at higher-than-average rates. 

The vast majority of grantees will be using multiple, community-based approaches. One grantee in Missouri, for example, will work with a consortium of 35 churches in low-income, minority communities. Those parishioners will go door-to-door to locate potentially eligible children and then help those families apply for CHIP or Medicaid coverage. A state school system will track children who receive free or reduced cost lunches and, with the families’ permission, share that information with state health programs, which will, in turn, mail applications for CHIP and Medicaid to those families. The state will also provide one-on-one-assistance with those applications.

Read the HHS press release.