Nationally, uninsured adults are nearly four times more likely not to see a doctor when they need to compared with people who have health coverage (41% of uninsured adults versus 9% of insured adults), according to The Coverage Gap: A State-by-State Report on Access to Care released by the Robert Wood Johnson Foundation. The uninsured not only miss needed medical care due to cost, but they are also far more likely to miss health screenings to detect cancer in its earliest, most treatable stages. For example, only 23% of uninsured women age 40 to 64 had a mammogram within the past two years compared with 51% of insured women. Consequently, 23% of uninsured adults report being in “poor” or “fair” health in contrast to 12% of adults who have insurance. And despite popular opinion that the uninsured are overwhelmingly young and healthy, the analysis shows that 15% of Americans age 50 to 64 are uninsured.
Although disparities in access between the insured and the uninsured exist in every state, the highest percentage of uninsured people who reported lack of care due to inability to pay lived in West Virginia (57%), Oregon (56%), Kentucky (54%), Washington (48%), and Maryland (47%). States with the best access to care for uninsured adults are North Dakota, Montana, Wisconsin, Nebraska, and Massachusetts.
The report was released to kick off Cover the Uninsured Week (May 1-7), a campaign chaired by former presidents Ford and Carter to urge U.S. leaders to make health coverage their top priority. Click here to download the report.
With the Medicare Modernization Act’s protections accorded to rural providers set to expire this year or next, the National Rural Health Association endorsed legislation that would extend them through 2011. The Rural Health Provider Payment Extension Act (H.R. 5118) would sustain the following: outpatient prospective payment system hold-harmless treatment for sole community hospitals and small rural hospitals; Medicare incentive payment program for physicians practicing in physician-scarcity areas; Medicare 2% bonus payment for ambulance trips; Medicare work geographic adjustment 1.0 floor for rural physician payments; reasonable cost payment for rural hospital clinical lab tests (performed as part of outpatient services); and 5% add-on payment for home health services provided in rural areas.
“There is so much more that needs to be done to improve access to health care in rural America,” said Alan Morgan, NRHA’s CEO. “But first we must make sure we do not lose ground, and that is why it is so important to extend the assistance provided in the MMA.”
Lack of health insurance is increasingly becoming a problem for Americans with moderate annual incomes of $20,000 to $40,000, according to the Commonwealth Fund’s Biennial Health Insurance survey of 4,350 adults. Although 53% of adults with incomes of less than $20,000 are uninsured, 41% of Americans who earn up to $40,000 are uninsured, up from 28% of uninsured moderate-income earners in 2001. The survey also found that 67% of adults who were uninsured last year were working or had a family member who was employed. Paying medical bills was a significant problem for more than half of all respondents. Fifty-one percent of uninsured adults said they had medical debt, and 49% had depleted their savings to pay medical bills. Among the uninsured with incomes above $40,000, 59% said they had medical debt.
According to the survey report, Gaps in Health Insurance: An All-American Problem, the uninsured respondents with chronic conditions also reported hospitalizations and emergency department use at a rate of two times higher than that of insured people with chronic health problems, and 59% had lower compliance with medication regimens because of inability to afford prescription drugs. The medical care that the uninsured did receive was lacking in preventive care--only 18% of uninsured adults over 50 received a colon cancer screen in the past five years and only 48% of women received a mammogram in the past two years--and was inefficient, with 19% reporting that they were given duplicate medical tests. Read the executive summary.
Catholic Healthcare Partners and Trinity Health, two of the largest Catholic health systems, announced plans to dedicate resources to an advocacy campaign to promote the passage of federal legislation to help provide healthcare coverage to uninsured Americans. The Communities Building Access Act is modeled after two successful programs that provide coverage for more than 8,800 enrollees--Access Health of Muskegon, Mich., and the CareNet program of Toledo/Lucas County, Ohio. The legislation would provide federal grants from the Department of Health and Human Services to local communities across the nation to establish locally administered programs that pay a portion of the community’s share of a premium--with the remainder split between employers and employees--for health insurance. The grants would also be used to recruit specialists to donate care, electronic health records, and administration of specialty care community clinics. A central repository to collect and disseminate data would also be maintained.
CHP and Trinity said their advocacy efforts would involve their approximately 80,000 employees in 10 states and that they would also be reaching out to other healthcare providers, companies, and community organizations nationwide.
As Louisiana’s private hospitals continue to treat the uninsured after Hurricane Katrina decimated New Orleans’ two hospitals for the indigent, reformers are calling for the state to permanently direct Medicaid funds to private providers so that all hospitals--not just the 10 state-run charity care hospitals--will be reimbursed for treating the poor, reports USA Today. Meanwhile, Ochsner Medical Center, East Jefferson General Hospital, and West Jefferson Medical Center face huge losses as the poor continue to seek care at available hospitals. The not-for-profit Ochsner reported a $70 million operating loss, with 85% of the losses occurring after the hurricane. Although the federal government has allocated $383 million in emergency funds for private hospitals that cared for hurricane victims plus another $500 million in special Medicaid funds, the private hospitals say it is not nearly enough to offset their costs and that it is not intended to cover the uncompensated care they are currently providing. “The charity care and bad debt issues will (continue to) plague and be a huge squeeze and drain on the market until the state or federal government decides to step in with something more significant than $383 million,” Gary Fuqua, director of public finance at Fitch Ratings’ Health Care Group, told USA Today. Those who favor dismantling the state’s charity care hospital system argue that private hospitals will be more efficient at delivering care to the poor.
Thirty-nine state attorneys general voiced their opposition to a bill in the U.S. Senate that would allow small businesses to purchase less expensive health insurance for their employees through trade associations, reports an AP/Washington Post story. Small employers would purchase the insurance through associations that would offer plans exempt from individual states’ insurance requirements, such as mandated coverage for specific health problems or preventative care. The attorneys general argue that the state requirements are vital safeguards. “Allowing health insurers to abandon mandated benefits ... will result in an increasingly ill population and higher healthcare costs as the healthcare system treats a growing number of consumers in crisis,” the attorneys general wrote to senators.
HFMA announces it has become a national supporter of Cover the Uninsured Week 2006, coming up May 1-7. The initiative, a Robert Wood Johnson Foundation project, is a nonpartisan, nationwide effort to urge U.S. leaders to make health coverage for Americans their top priority. “The large number of uninsured Americans is a national disgrace and destabilizes the system,” said Richard L. Clarke, FHFMA, DHA, president and CEO of HFMA. “Healthcare providers are working hard to help the 46 million people who have no health insurance, but national leadership and support is needed. I encourage HFMA members to visit the Cover the Uninsured Week web site to learn how they can support this effort, too.” The initiative encourages citizens to contact their elected representatives and urge them to make healthcare coverage for all Americans their top priority. Also, volunteers will work at hundreds of events nationwide to help uninsured people enroll in existing public coverage programs for which they are eligible, and distribute information about local resources. In 2005, more than 2,200 events were held during Cover the Uninsured Week, supported by nearly 200 national organizations and more than 2,500 local organizations located in all 50 states and the District of Columbia.
In a letter to CMS head Mark McClellan, the chairman of MedPAC emphasized the importance of implementing all four of MedPAC’s recommended changes to the inpatient prospective payment system in 2007, rather than waiting until FY08 to adjust IPPS payments for severity, as CMS intends to do. Glenn Hackbarth’s letter said “implementing all four of our policy recommendations in a budget-neutral manner would entail a small (1 to 2 percent) change in payments for most categories of hospitals. The one exception would be physician-owned specialty hospitals”—which would see significant decreases in inpatient payments. Delaying the severity adjustment “would leave some payment distortions in place, thereby continuing to favor some kinds of patients over others.” The four changes MedPAC recommended to the PPS were cost-based weights, hospital-specific relative values, improved severity adjustment, and DRG-specific outlier financing.
As a result of a lawsuit, Bellevue Hosp. Ctr v. Leavitt, the Court of Appeals for the Second Circuit has ordered CMS to apply the occupational mix adjustment to 100% of the wage index effective for FY07. In a memorandum to Medicare fiscal intermediaries, the Center for Medicare Management stated the court’s orders to CMS to “immediately collect data that are sufficiently robust to permit full application of the occupational mix adjustment.” The court also requires that all “data collection and measurement and any other preparations necessary for full application should be complete by Sept. 30, 2006, at which time we instruct the agency to immediately apply the adjustment in full.”
CMS said it will collect new occupational mix data from hospitals and determine the occupational mix adjustment by Sept. 30, 2006, and it instructed fiscal intermediaries to “quickly notify hospitals to submit occupational mix data for the first three months of the six-month time frame previously announced for the 2006 survey.” CMS will also “modify the FY07 inpatient prospective payment system proposed rule and propose that the occupational mix adjustment be applied to 100%, rather than 10%, of the FY07 wage index.”
Hospitals will have until June 1, 2006, to submit to FIs the occupational mix data and to complete supporting documentation for the period Jan. 1, 2006, through March 31, 2006. After CMS publishes the interim survey data around June 29, 2006, hospitals will have until July 13, 2006, to submit requests to their FIs for corrections to their interim occupational mix data. Hospitals will have until Aug. 31, 2006, to submit to their FIs the occupational mix data and to complete supporting documentation for the period April 1, 2006, through June 30, 2006.
The proposed rule to revise the Medicare hospital inpatient prospective payment system was published Tuesday in the Federal Register.
Researchers at the University of Pennsylvania found that nearly 45% of African-Americans reported low trust in healthcare providers compared with almost 34% of whites, according to the results of a survey of 954 people published in the April issue of the Archives of Internal Medicine. Among African-Americans, those who had fewer quality interactions with healthcare providers were about three times more likely to report low trust compared with those with more quality interactions. Also, African-Americans who obtained medical care at facilities other than a physician's office were most likely to report low trust. Among whites, respondents without health insurance and those with fewer annual healthcare visits were most likely to report low trust in healthcare providers. "Part of the challenge before us is to determine whether these lower levels of trust are associated with other indicators of differential provider ability, including cultural competence," author Oscar Gandy said.
With Pennsylvania facing an RN shortage of 16,100 by 2010 and an LPN shortage of 4,100 in four years, Gov. Edward Rendell said the state will invest $41 million to help remedy the nursing shortfall. Rendell proposes to provide incentives for hospitals to lend qualified faculty to nursing programs that can expand their class size this academic year. The plan also provides for the expansion of clinical education opportunities necessary for nursing education and provides planning grants to expanding nursing programs. “We’re not short of Pennsylvanians who want to become nurses, but we are short the capacity needed to train them,” Rendell said.
By increasing the number of RNs without changing the number of hours of nursing care per day, hospitals could prevent 5,000 patient deaths per year, reduce number of hospital days by 1.5 million, and decrease complication rates, according to a study sponsored by the Commonwealth Fund and published in Health Affairs. The strategy would require hospitals to replace 37,000 LPNs with RNs at a cost of $811 million, but would result in savings of $242 million in the short term and $1.8 billion in the long term from shorter hospital stays, fewer deaths, and fewer complications. Adding nursing hours--whether using the existing mix of LPNs and RNs or increasing the number of RNs--would also result in improved quality, but the savings would not offset the increased staffing costs. “From a hospital’s perspective, increasing nurse staffing is costly,” write the authors. “Nevertheless, greater use of RNs in preference to LPNs appears to pay for itself.” Click here for more information.
HHS Inspector General Daniel Levinson yesterday announced an initiative to encourage self-disclosure as a means to work with the OIG to resolve possible liability for physician self-referral and anti-kickback violations. The initiative is designed to raise awareness of self-disclosure and better explain how it is used to resolve violations. “A provider's self-disclosure of conduct continues to be an important factor in determining whether a CCA is appropriate,” wrote Levinson in an open letter to healthcare providers. A CCA, or certification of compliance agreement, is a less-extensive version of a corporate integrity agreement.
As the federal government urges Medicare beneficiaries to sign up for Medicare Part D by the May 15 deadline, new problems are plaguing the drug benefit program, reports The New York Times. Telephone waiting times of up to 30 minutes are frustrating beneficiaries who are trying to enroll in Humana’s drug plan, despite federal standards that require most calls to be answered in 30 seconds. Insurers who violate the standards risk not having their contracts renewed next year, or they may be fined. Seniors are also receiving notices that several months of premium payments have been deducted from their Social Security checks, while others can’t get monthly premiums deducted from their Social Security payments at all. Asked to compare drug plans on a Medicare website before they enroll, beneficiaries are finding some insurers haven’t listed the drugs the government requires them to offer, and some insurers are also not disclosing limits they’ve placed on dosages, in violation of Medicare’s requirements.
Oregon legislators say they can fill a $65 million deficit in the Oregon Health Plan, the health program for Oregon’s poor residents, this year but that the system needs to be overhauled, perhaps with a universal health coverage plan like the one recently passed in Massachusetts, reports The Oregonian. Providing medical care for the poor “has reached a crossroads between coverage and costs, forcing difficult choices soon,” said the article. Oregon ranks near the bottom of all states in providing coverage to poor children—39% of Oregon beneficiaries are children compared with 46% for the average U.S. medical aid for the poor. The beneficiaries in Oregon’s plan also tend to be sicker than average, increasing the state’s cost per patient by 166% over the past 13 years compared to 112% for the U.S. Legislators blame Oregon employers for failing to provide health coverage for their workers’ children and contributing to the state’s high number of uninsured.
CMS is making extra money available to states whose State Children’s Health Insurance Program funds are exhausted so that no enrolled child will risk losing services. States have three years in which to spend each year’s SCHIP allotment. At the end of that three-year period, unspent funds are redistributed to states that have exhausted their allotments. This year, however, the amount of surplus funds was only $173 million, far short of the $456 million that was needed to keep every SCHIP program running. Congress granted additional funds to the SCHIP program as part of the new Deficit Reduction Act, and CMS began distributing the special grant funds this past Friday to 12 shortfall states and American territories. The notice of the reallotment of SCHIP funds, together with the special DRA funds, appears in today’s Federal Register. Click here to download the notice.
Consumers can access price and quality data for Louisiana hospitals on a website sponsored by the Louisiana Hospital Association. Louisiana Hospital Inform provides pricing data on the most common Medicare inpatient and outpatient services, and quality data on surgical infections, heart attack, congestive heart failure, and pneumonia. The LHA said the project is a work in progress and will evolve over time to meet the needs of consumers seeking to hold hospitals accountable for the care they provide.
Despite concerns that a Maryland law requiring large companies to buy health insurance for employees would quash Wal-Mart Stores’ plans of expanding in the state, Wal-Mart’s top executive said, "We are not going to go away that easily,” reports the Baltimore Sun. H. Lee Scott, president and CEO of Wal-Mart, said the retailer had purchased the land to build a distribution center in Maryland that will employ 900 people. Scott called the Maryland law that mandates large employers to spend at least 8% of payroll on health insurance for employees “ridiculous” and said, "It's going to be tough to legislate Wal-Mart out of your community." A retail association has challenged Maryland’s law, which goes into effect in January, in court, claiming that it violates ERISA.
Seventy-four percent of Americans believe their access to quality healthcare is threatened because medical liability costs are driving physicians out of practice, according to a poll of 1,001 adults conducted by the Health Coalition on Liability and Access, a group dedicated to urging Congress to pass federal medical liability reform. The survey results also indicate that 64% of respondents believe that medical lawsuit abuse is one of the primary causes of soaring healthcare costs, and 76% favor a law placing reasonable limits on non-economic pain and suffering awards. The first week of May, the Senate will consider comprehensive medical liability reform legislation. The House has passed medical liability legislation 10 times since 1995, yet reform initiatives have repeatedly stalled in the Senate. Download summary survey results here.
David Brailer has resigned as National Coordinator for Health Information Technology, HHS Secretary Michael Leavitt announced yesterday afternoon. Brailer served in the post for almost two years, having been appointed to execute President Bush’s executive order for widespread deployment of health information technology within 10 years. Brailer “made significant progress in advancing the president’s health IT agenda and laying the building blocks for future progress,” said Leavitt. Brailer will serve as vice-chair of the American Health Information Community, the group charged helping facilitate development and adoption of standards-based healthcare IT. He will also be a consultant to HHS on “the president’s healthcare transparency initiative,” said Leavitt. A Financial Times report quoted Brailer as saying he was resigning to spend more time with his family. Until a replacement is named, the Office of the National Coordinator for Health Information Technology will be run by its four directors.
Wisconsin Gov. Jim Doyle has vetoed a bill that would have protected hospitals’ quality information from being subpoenaed by attorneys in medical malpractice suits, reports the Milwaukee Journal Sentinel. The bill was opposed by trial lawyers and Wisconsin’s Attorney General but was sanctioned by 129 legislators. “This bill goes too far in allowing providers to define and shield information and claim immunity in the name of quality improvement,” Doyle said. The Wisconsin Hospital Association, which helped draft the bill, said that hospitals need the freedom to collect and analyze quality information internally to learn how to prevent future adverse effects and to encourage them to participate in initiatives to improve quality. WHA president Steve Brenton vowed that the WHA will redouble its efforts to enact the quality improvement bill to keep “Wisconsin as the recognized leader in healthcare quality.”
A Kaiser Permanente anesthesiologist has adapted pilots’ pre-flight checklists to the operating room, and now all 30 Kaiser medical centers will use the pre-surgery checks to prevent OR errors and improve staff morale, according to the Orange County Register. James DeFontes, MD, Kaiser’s regional coordinating chief of anesthesia, received training on using the aviation model in the OR from the University of Texas, where researchers found that communication problems were the source of errors and near-misses for pilots and surgical teams. Using Kaiser’s Anaheim Medical Center as a test site, DeFontes developed a routine that requires members of the surgical staff to state their names, the instruments they’ll need, and whether they are new to the team. Staff also double-checks the patient’s name, procedure, and part of the body to be operated on. Since 2002, when the program was implemented, the hospital has had no wrong-site surgeries, but it has reported more near-errors, such as wrong instruments, contamination, and incorrect procedures, due to greater staff collaboration and less fear in speaking up about mistakes. The changes have also led to better staff morale, perceived easier workload, and lower nurse turnover.
Starting this year, the Joint Commission on Accreditation of Healthcare Organizations will conduct on-site accreditation surveys and certification reviews on an unannounced basis. This major policy change applies to all of the more than 15,000 healthcare organizations it accredits or certifies. From 2006 through 2008, the unannounced survey will occur in the year in which the organization is due for its next survey. Subsequent unannounced surveys will occur during an interval of 18 to 39 months after the organization’s previous unannounced survey. The timing of subsequent on-site evaluations will be determined by pre-established criteria that relate in substantial measure to continuous JCAHO monitoring of organization performance data and information. For-cause unannounced surveys will continue to be conducted whenever warranted.
JCAHO will continue to conduct one-day random unannounced surveys of an annual 5% sample of organizations that have not yet undergone full unannounced surveys. Over time, these unannounced surveys will be replaced by random unannounced on-site evaluations of steps that accredited organizations have taken to remediate previous citations. Read the JCAHO announcement.
A Missouri hospital and surgery center have become national news as an example of the competition for patients that is playing out across the country. An Associated Press story reports that the Moberly Regional Medical Center in Moberly, Mo., refused to grant a transfer agreement to the Surgery Center of North Central Missouri, which would allow the surgery center’s physicians to send patients to the hospital in an emergency. Although the surgery center had transfer agreements with two other hospitals 30 to 50 miles away, it wasn’t able to operate for months because it didn’t meet the requirement of having local hospital emergency coverage. After the governor’s office intervened and permitted the surgery center to open its doors, the hospital filed a lawsuit seeking to revoke the surgery center’s license for jeopardizing the health of patients who, in an emergency, must be transferred at least 30 miles. In the meantime, two Missouri legislators have introduced legislation that would eliminate the transfer agreement or broaden it to include distant hospitals, or allow physicians who invest in surgery centers to have staff privileges at local hospitals.
"Hospitals claim that surgery centers are eating into their patient base," Missouri Rep. and physician Robert Schaaf told the AP. "The point is, it's not their patient base. It's every competitors' patient base. It is in the public's best interest to have more competition in health care, not less."
Hospital executives attending an emergency preparedness conference on Tuesday were not encouraging about their institutions’ ability to handle an avian flu pandemic, reports Reuters. In response to HHS Secretary Mike Leavitt’s admonition that hospitals should be stockpiling ventilators instead of spending money on remodeling, a disaster expert from Stanford University Medical Center said the hospital didn’t have the staff to run extra ventilators and that it was already operating at capacity. A Johns Hopkins physician said his hospital and medical school had already spent $10 million preparing for an emergency, but that “This is not a sustainable business plan.” A physician from MD Anderson Cancer Center agreed, saying, “There are none of us who can afford to absorb those kinds of costs.” The reality, the article quoted a Cleveland Clinic physician as saying, is that hospitals will give the sickest patients morphine and allow them to die comfortably in a corner. “If the federal government doesn’t help run this, it really isn’t going to go well,” he said.
Small businesses are trying several strategies to bring down their healthcare costs, reports an article in USA Today. Average healthcare premiums for firms with three to 199 employees rose 10% from 2004 to 2006, compared with 9% for larger companies. One option for small employers is to purchase health insurance through professional employer organizations, which function as a personnel office for a cost of 2% to 7% of annual payroll. The clout that PEOs exercise buying health plans for a large pool of small employers resulted in an average premium increase of only 3% from 2005 to 2006, according to the group’s national association. Health savings accounts have also become popular among small businesses, with 33% of small companies that had not previously offered health insurance now providing an HSA for employees. Keeping employees healthy is yet another tactic small businesses are taking. One employer offered incentives to his 25 workers to lose weight and quit smoking and his expected premium increase of 40% dropped to 15%.
In the largest study of its kind, a new AMA report finds a steep decline in competition in the nation's health insurance markets, fostering concerns about lack of innovation and efficiency in health care. "Most alarmingly, in the combined HMO and PPO markets, 95% of metropolitan areas have few competing health insurers," said AMA board member J. James Rohack. The study, which analyzed 294 metropolitan health insurance markets, also found that in 95% of markets a single insurer had a market share of 30% or greater, and in 56% of the markets a single insurer had a market share of 50% or greater.
Between 1995 and 2005, there were more than 400 mergers involving health insurers and managed care organizations, with no benefit to patients, said Rohack. "When it is difficult for a new insurer to enter a market with few dominant health plans, patients can be charged high prices without the threat of competition to keep insurers in check," said Rohack, who is calling for federal regulators to examine whether patients are being harmed by the health insurance consolidation. Read more about the study.
A spokesperson for America's Health Insurance Plans told HFMA, “There are a number of studies...that outline factors behind rising healthcare costs, and lack of competition among health insurers is not one of those factors." (Read more of the AHIP response.)
Wal-Mart announced that it will offer part-time workers health insurance after one year of employment instead of the current requirement of two years, and children will be covered on the policies—a change that affects 150,000 Wal-Mart employees, reports an Associated Press story. The company says that most employees will probably sign up for a health plan with a $23 per month premium and an additional $15 per month to cover a worker’s children, and with a $1,000 deductible for individuals and $3,000 for families—coverage that is too expensive for many part-time workers, say critics. The plan does, however, exempt three doctor visits a year from the deductible and allows for three prescriptions to be filled with a $20 copay. Under fire to improve health benefits, Wal-Mart will also increase contributions to health savings accounts, offer more generic drugs in its plans’ formularies, and give employees a 10% discount on healthy foods.
Public-employee health benefits have survived major threats so far, but the growing gap between public- and private-sector benefits, coupled with new accounting rules for government agencies, could force public officials to make more far-reaching benefit changes, according to a study by the Center for Studying Health System Change published in Health Affairs.
Public-section unions and political sensitivities have prevented many public employers from shifting higher healthcare costs to workers. Most public employers provide a broad range of plan choices from multiple carriers, and HMOs have retained large public-employee enrollment. Despite the size and geographic concentration of their workforces, most public employers have chosen not to become involved with large purchaser-driven initiatives related to quality or public reporting of provider performance, with the exception of public purchasers in Boston and Seattle. And although public employers have not altered retiree health benefits, the cost of those benefits is likely to be a growing issue as state and local officials grapple with new requirements from the Government Accounting Standards Board to record long-term liability for expected costs of health benefits promised to all current and future retirees.
To assess how well the U.S. health departments are prepared to respond to an influenza pandemic emergency, researchers from Ben-Gurion University of the Negev, Israel, and Johns Hopkins surveyed 308 employees at three Maryland health departments from March to July 2005. The study, published in BMC Public Health, found that only 53.8% of employees were likely to go to their jobs during a flu outbreak, and that only 40% thought their health departments would ask them to report for duty. The greater the importance an individual placed on his or her job during a pandemic, however, the more likely he or she would come to work. The study also found that 66% of respondents believed that their jobs would put them at personal risk during a flu outbreak, and 83% said they wanted additional training to understand their role in an emergency and to learn how to communicate risk. In order for public health departments to be effective during an influenza pandemic, each worker must have a better understanding of the “importance of his or her personal role within these settings, confidence that the agency will provide adequate protective equipment for all its employees, psychological support and timely information, and a belief of being well-trained to cope with emergency responsibilities, including the ability to communicate risk to others,” write the authors. Click here to download the study.
With Massachusetts’ sweeping healthcare reform now law, the country is closely watching whether the infrastructure built to administer the law will succeed in providing health insurance to the 550,000 uninsured residents, reports The Boston Globe. The Commonwealth Health Insurance Connector—also known as “the connector”—is responsible for approving the new low-cost insurance plans and making them available to individuals and small businesses by April 2007. Initially funded with $25 million, the agency will eventually generate operating revenue from surcharges on the insurance policies it sells. Starting in October, the connector will also make subsidized plans available to the poor. Individuals who earn less than $9,800 will pay no premiums or deductibles for healthcare coverage, and those who earn up to $28,000 will be offered plans with no deductibles and premiums based on a sliding scale. What the agency’s 11-member board has yet to work out is one of the most challenging questions of the new legislation: What is a fair price to require individuals earning more $28,000 to pay for mandatory health insurance? Click here to read the Boston Globe story.
Physicians will see a negative 4.6% update and a conversion factor of $36.1542 in 2007, CMS estimated in an April 7, 2006, letter to MedPAC regarding the 2007 physician update and sustainable growth rate. According to CMS, the current estimate of the SGR for CY07 is 0.7%. These estimates are based on the best data available at this time and may be subject to revision. (Click here to download the letter.) The agency attributes the negative update to 8.5% increase in Medicare spending for physicians’ services in 2005. According to CMS, growth and intensity of physician services represented 7.5% of the 8.5% growth in total spending in 2005. Evaluation and Management services accounted for 31% of the 8.5% overall volume increase, while procedures represented 29%.
For more regulatory updates, click here.
The Deficit Reduction Act signed by President Bush in February requires existing and new Medicaid recipients to provide documentation that they are U.S. citizens, starting in July, according to The New York Times. Older blacks, American Indians, and other poor people, however, may not be able to produce birth certificates or passports, say state and hospital officials. “The new requirement will result in fewer people being eligible for Medicaid or enrolling in the program, and that means more uninsured people,” Lynne P. Fagnani, senior vice president of the National Association of Public Hospitals and Health Systems, told The New York Times. “They still need care, but are more likely to wait until their condition becomes more severe and more costly to treat.” Over the next nine years, 35,000 Medicaid beneficiaries are estimated to lose coverage—illegal immigrants as well as U.S. citizens who can’t prove their citizenship. Others say millions of Americans will lose benefits. The Congressional Budget Office says that the new requirement will save $735 million over 10 years.
President Bush is expected this week to approve a 240-page emergency plan detailing how the federal government will respond to an avian flu pandemic, with the potential to kill from 210,000 to 1.9 million Americans, reports The Washington Post. The Department of Veterans Affairs, for example, has created a medical exam that can be conducted in VA hospital parking lots and plans to staff a toll-free hotline with nurses to help individuals decide if they need medical care. The VA has also stockpiled medicines, equipment, food, and water at its 153 hospitals. But many vital decisions—such as how much avian flu vaccine will be required and who should get it—have not yet been made, according to the article. Individual communities also have to create their own avian-flu readiness plan, said HHS Secretary Mike Leavitt in a speech last week. “Any community that fails to prepare—with the expectation that the federal government can come to the rescue—will be tragically wrong,” he said.
The federal government is also “dangerously behind” on building a prototype of a 250-bed mobile field hospital that could be used to treat those injured during a terrorist attack or natural disaster like Hurricane Katrina, according to USA Today. Homeland Security received $20 million in 2005 to build the field hospital, but Congress rescinded the funding this year. Although the agency says it will request more funding from Congress to build the prototype, critics say it should have already set standards for how mobile hospitals should operate. Homeland Security doesn’t get “the notion that during a disaster one of the fundamental needs is taking care of a large number of patients," Jerome Hauer, former head of the federal Office of Public Health Preparedness, told USA Today.
First-year results from the pay-for-performance Hospital Quality Incentive Demonstration, a partnership between Premier Inc. healthcare alliance and CMS, show a 6.6% average improvement across five clinical areas for the 260 participating hospitals--a greater rate of improvement than shown in other national hospital performance initiatives. Most notably, quality improvements in the care of acute myocardial infarction patients saved approximately 235 lives, according to the white paper released by Premier.
The three-year demonstration, launched in July 2003, was designed to determine whether economic incentives paid through Medicare to hospitals are effective at improving the quality of inpatient care. Hospitals that perform in the top 10% for a particular clinical area receive both a financial reward and an extra 2% bonus on Medicare reimbursement for that clinical area. Hospitals performing in the second decile receive a 1% bonus. In the first year of the project, five hospitals performed in the top 20% for all five clinical areas. CMS awarded $8.85 million in Medicare incentives to the top-performing hospitals.
Click here to download the white paper.
With a goal toward improving patient safety and preventing duplicate medical procedures, U.S. Sen. Sam Brownback (R-Kan.) is expected to introduce a bill that will create health record data banks run by private companies that will issue cards to individuals containing all their medical records. Patients would be able to use these portable electronic records anywhere in the country, reports The Wichita Eagle. Brownback says he is also getting support for a healthcare bill that would require online disclosure of the cost of Medicare’s top 30 procedure by state for greater price transparency to consumers.
John DeStefano Jr., New Haven mayor and Democratic candidate for governor of Connecticut, has announced a $343 million plan that would provide incentives for businesses and individuals in the state to purchase health insurance and stay healthy, according to the Journal Inquirer. For companies that devote a minimum of 5% of payroll to purchase health insurance for employees, DeStefano proposes to reduce their corporate tax rate from 7.5% to 3.5%. Individuals and small businesses would be offered affordable insurance through large insurance purchasing pools, according to DeStefano’s plan, and individuals and companies whose employees adhere to prevention guidelines would get a break on insurance premiums. DeStefano says funding for his healthcare reform would come from closing loopholes in the corporate tax system.
The proposed reductions in Medicare reimbursement for cardiac, orthopedic, and other devices used in inpatient procedures, announced last Wednesday, were more severe than hospitals and device-makers expected, reports The Boston Globe. If the proposed cutbacks are approved, hospitals’ reimbursement for some stent procedures would be 33% less, and reimbursement for implantable defibrillators would be 24% lower. The newspaper said that hospitals will lobby medical manufacturers to cut their prices to try to offset the reimbursement hit. CMS maintains that higher reimbursement for certain surgical procedures causes hospitals, especially specialty hospitals, to offer high-priced procedures at the expense of less lucrative services.
CMS has issued a notice of proposed rulemaking that would create the first significant revision of the inpatient prospective payment system since it was implemented in 1983. The changes respond to congressional concern that the existing system can create an incentive for hospitals to cherry-pick profitable cases. CMS says that the revision would improve the accuracy of payment rates for inpatient stays by basing the weights assigned to DRGs on hospital costs rather than charges and by adjusting the DRGs for patient severity. The estimated market basket increase of 3.4% in FY07 would increase payments to acute care hospitals by $3.3 billion. More than 1,000 hospitals in rural areas would see an average increase of 6.7%. The reforms would also significantly affect payments to specialty hospitals. Public comment would be key to shaping the final rule, CMS administrator Mark McClellan pledged.
The new cost-based DRG weighting would go into effect October 1, 2006. This change is intended to eliminate biases in the current DRG system arising from the differential markup hospitals assign for ancillary services among the DRGs. A second step, scheduled for FY08, would replace the current 526 DRGs with either the proposed 861 consolidated severity-adjusted DRGs or an alternative severity-adjusted DRG system developed in response to public comments. CMS is also considering ways of improving recognition of severity in the current DRG system by FY07.
In addition, CMS is proposing to increase the outlier threshold for FY07 to $25,530, up from $23,600 in 2006. The proposed FY 2007 threshold is expected to keep aggregate hospital outlier payments within the target of 5.1% of total payments under the inpatient PPS.
"Everyone agrees that the Medicare DRG payments are distorted," said Richard L. Gundling, FHFMA, vice president of product development at HFMA, "which results in Medicare paying much more for some types of patients (notably surgical patients) and too little for others (namely medical patients). All hospital finance managers should analyze the impact based on your own patient mix and then submit comments to CMS on the proposed rule."
The proposed rule will be published in the April 25, 2006 Federal Register. Comments will be accepted until June 12, 2006.
The AARP has opposed a bill introduced by Sen. Michael Enzi (R-Wyo.) and cosponsored by Sens. Ben Nelson (D-Neb.) and Conrad Burns (R-Mont.) that would allow business and trade associations to lower their health insurance costs by banding their members together and offering group health coverage on a national or regional basis. The Health Insurance Marketplace Modernization and Affordability Act, S.1955, according to Sen. Enzi, provides for “a more affordable healthcare package that may not include some of the state’s benefit mandates,” but “would be required to offer a comprehensive alternative package.”
AARP is concerned about the effect on older workers. “In its current form, this legislation would drive health care premiums higher for many employers and employees, put critical benefits—like cancer screening—out of reach for many Americans, and create a disincentive for employers to hire or retain older workers,” said AARP CEO Bill Novelli. “What small businesses need is healthcare insurance with predictable costs that enhance their appeal to a diverse and skilled workforce."
Fifty-five percent of Americans say they want a Massachusetts-style universal healthcare coverage in their states, according to an ABC News/Washington Post random poll of 1,027 adults. For 75% of Americans, healthcare reform ranks fourth in importance after Iraq, terrorism, and the economy as factors that will determine their vote in congressional elections this fall. The Bush administration has not adequately addressed healthcare problems, said 62% of the survey participants, and 61% said they would trust Democrats to do a better job on healthcare reform, compared to only 29% who favor Republicans for the job. The strongest supporters of a universal healthcare plan like Massachusetts’ are those age 40 to 64 and those who live in the Northeast (63%). Click here to view the poll results.
The governor of Massachusetts signed into law yesterday the historic bill requiring health insurance for all of the state’s residents. Although Gov. Mitt Romney vetoed the $295 per-employee tax that the legislation assesses on employers that don’t provide health insurance, Democratic leaders of the House and Senate are expected to override the governor’s change, reports the AP/ABC News.
Read "You Have to Hand It to Massachusetts"--and add your comments.
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Contrary to popular perception, community programs created to improve healthcare access or provide insurance coverage don’t attract chronically ill enrollees who need costly medical services, found a study of three community programs funded by the Robert Wood Johnson Foundation’s Communities in Charge initiative. Enrollees in two of the three community programs examined by the study, published in Health Affairs, were in good to excellent health with no chronic health problems. And at all three sites, the low-income uninsured adults primarily accessed physician services rather than those of a hospital or emergency room. After enrolling, participants received much more prevention services than they had in the past. Having the assurance they could access medical care, rather than dissatisfaction with previous care, was the reason most participants—half of whom were working—enrolled. Six months later, two-thirds of participants were still enrolled. Those who dropped out typically had found a job with health insurance, became eligible for a public program, or failed to fill out the paperwork to stay enrolled. Less than 5% left because they felt they no longer needed health care.
After searching the literature on the effect of healthcare information technology on quality, efficiency, and cost of healthcare, researchers found that most of the studies came from four institutions—Regenstrief Institute, Brigham and Women’s Hospital/Partners HealthCare, the Department of Veterans Affairs, and LDS Hospital/Intermountain Health Care. These four institutions had multifunctional healthcare IT systems that were developed internally by their own research experts and had been expanded over several years, according to the study published in Annals of Internal Medicine. Without question, the benchmark IT systems demonstrated real benefits in increased delivery of care, reduction of medication errors, and decreased rates of utilization for redundant or inappropriate care. But there is scant information available to help institutions make decisions on commercially available healthcare IT systems and to assess ROI. The authors conclude that more studies are needed to evaluate such systems in community settings; more data published on how healthcare IT affects organizations, workflow, and management issues; and uniform standards for the reporting of healthcare IT research.
The two Democratic contenders in New York’s gubernatorial race are squaring off on Medicaid fraud, with candidate Thomas R. Suozzi criticizing his opponent, New York Attorney General Eliot Spitzer, for the amount of Medicaid funds recovered, reports The New York Times. With an average of $35.5 million recovered from Medicaid fraud each year through 2003, the percentage of recovery for New York, which has the largest Medicaid budget in the country, is slightly above the national average. But given the large size of the state’s Medicaid antifraud unit, Spitzer should be recovering many more dollars, says Suozzi, who claims that New York is losing 10% of its Medicaid budget to fraud. Spitzer counters that fraud accounts for only 2% of Medicaid losses--$900 million a year--and points to the $219.1 million the antifraud unit recovered in 2005, the largest recovery in the country. Before Spitzer came into office in 1999, his predecessor recovered an average of $10.6 million each in year in Medicaid fraud.
Projects in 14 communities designed to expand health insurance coverage and improve care for the uninsured have had disappointing results, according to a study published in Health Affairs. The projects funded by Robert Wood Johnson’s Communities in Charge program during 2000 to 2003 were fraught with too many political, economic, and organizational obstacles to make a dent in solving the healthcare problems of the uninsured, say the authors, who explore why seven of the community initiatives failed.
In Jacksonville, Fla., for example, $2.5 million in public funds were earmarked to provide health insurance for 1,500 working residents. The hospitals agreed to discount their prices, a set of benefits was specified, and information technology was improved to provide efficient care for these residents. But in the end, only 70 people enrolled in the program. In Jackson, Miss, the goal was to shift patients who used the emergency rooms for non-urgent care to less expensive primary-care clinics. Hospital staff agreed to make the referrals, but patients gave incorrect phone numbers and addresses, believing that the volunteer employees were connected with a welfare or bill collection agency. And when patients tried the primary-care clinics, they found a four-week wait for appointments. Consequently, they found it easier to continue using the emergency rooms.
“Notwithstanding a couple of medium-wattage points of light, CIC offers little hope that communities can or will make major breakthroughs in expanding coverage or care for the uninsured,” wrote the study’s authors. Click here to read the study.
Rising healthcare costs are dampening U.S. businesses’ plans to hire new employees and give pay raises during the next six months, according to the biannual PNC Economic Outlook survey. Of those who offer health insurance, 57% said they are likely to reduce their employees' coverage in the future. The financial services company’s survey of 1,041 small- and mid-sized business owners and senior decision-makers across the United States also found that healthcare reform is the number-one issue they would most like to see addressed in the 2006 mid-term elections, followed closely by the nation's reliance on foreign energy sources and tax reform. Sixty-six percent stated that rising healthcare costs are having a moderate to significant "adverse impact" on salary increases and 59% said healthcare costs were having the same effect on hiring full-time employees.
Responding to President Bush’s calls for the healthcare industry to supply consumers with data so they can choose high-quality providers, the Business Roundtable asked HHS for Medicare claims data and was declined, according to a New York Times article. The group of 160 large employees wants the data so they can steer their 25 million employees to physicians who have the lowest complications rates and the best outcomes, reports the Times. But Medicare officials say a privacy law prohibits the disclosure of physician names associated with the data, which is why Medicare cannot publicly profile physicians as it does hospitals. HHS also said that the claims data on physicians are too voluminous to release. The employers, however, counter that the privacy law is no longer applicable because it doesn’t cover professional corporations, which is the structure under which most physicians practice.
The HHS Office of Inspector General released Advisory Opinion 06-02, which addresses a durable medical equipment and orthotics manufacturer and supplier's plan to offer to physician practice groups exclusive items and related services under a choice of two proposed programs. The first would offer physician practices the opportunity to become DME suppliers for items and services furnished to patients who are not beneficiaries of any federal healthcare program. According to the advisory opinion, the proposed arrangement would essentially amount to a "contractual joint venture" for private pay business. The second proposed arrangement would rent continuous passive motion devices to the physician practice on an as-needed basis at daily rental amounts set forth in a fee schedule.
The OIG conclude that the proposed programs could potentially generate prohibited remuneration under the anti-kickback statute and could potentially trigger administrative sanctions, and notes that the statute has been interpreted to cover situations where one purpose of the remuneration was to obtain money for the referral of services or to induce further referrals. So, for example, simply carving out Federal healthcare program business from the first proposed program is not sufficient to differentiate it from the problematic contractual joint ventures identified in the OIG's 2003 special advisory bulletin on joint ventures. (Click here to download the advisory opinion.)
Click here for more regulatory updates from HFMA.
Rising healthcare costs are dampening U.S. businesses’ plans to hire new employees and give pay raises during the next six months, according to the biannual PNC Economic Outlook survey. Of those who offer health insurance, 57% said they are likely to reduce their employees' coverage in the future. The financial services company’s survey of 1,041 small- and mid-sized business owners and senior decision-makers across the United States also found that healthcare reform is the number-one issue they would most like to see addressed in the 2006 mid-term elections, followed closely by the nation's reliance on foreign energy sources and tax reform. Sixty-six percent stated that rising healthcare costs are having a moderate to significant "adverse impact" on salary increases, and 59% said healthcare costs had the same effect on hiring full-time employees.
Although cost remains the top priority in designing corporate employee healthcare plans, 25% of top executives of U.S.-based multinational businesses also give high priority to quality-of-care data, according to a survey by PricewaterhouseCoopers’ Health Research Institute. Thirty-nine percent currently provide healthcare data to employees, and 68% of companies obtain it from health plans. Only a third of the surveyed executives said the data from health plans are“high quality,” however, and they said that the auto industry, colleges and universities, the consumer electronics sector, and hotels and restaurants do a much better job at providing data to help consumers make sound decisions. “Considering the potential life-or-death importance of decisions that could be made from healthcare quality data, this is a front-and-center issue for hospitals,” says Bill Luallen, a health industry provider partner with PricewaterhouseCoopers. “If new cars, colleges, and consumer electronics can provide useful data, the healthcare industry may see an opportunity here and rise to the occasion.” Click here to view the survey findings.
Many Oregon hospitals are passing up federal reimbursement for illegal immigrants who seek emergency care because they are reluctant to ask questions that determine residency status, reports The Oregonian. Although many hospitals have been reluctant to ask patients if they are illegal immigrants, Section 1011 of the Medicare Modernization Act provides questions hospitals can ask to get to the answer in an indirect way. According to the article, however, the seven hospitals in Providence Health System are not asking the indirect questions in order to “respect the dignity of all of our patients,” and over concerns that the questions take too much time in the ER and that the amount of reimbursement isn’t worth the bother, said Priscilla Lewis, regional director for community support services at Providence. But Legacy Health System said its four Oregon hospitals have sidestepped the discrimination and profiling issues by asking every patient their place of birth, even though patients are not required to answer the question.
The story is different for Texas hospitals, which stand to receive $46 million in federal grants for the care of illegal workers in FY05, reports the Dallas Business Journal. With 245 Texas hospitals enrolled in the program, providers filed 8,000 claims for care of illegal immigrants during the program’s first submission period, which ended June 30, 2005, compared to 5,000 claims filed by the rest of the states. Still, Texas hospitals will have to monitor “whether the benefits received outweigh the costs incurred to file and track these claims manually,” to determine if continued participation is warranted, said a spokeswoman for JPS Health Network in Fort Worth.
Proposals to lower the cost of health insurance for the self-employed and small businesses will be introduced to the North Carolina legislature next month, reports the Business Journal of the Greater Triad Area. One proposal would allow small businesses to pay lower premiums for health insurance by creating a reinsurance pool to reduce insurance companies’ costs. And if a second proposal passes, the self-employed and people deemed high risk would benefit from a statewide high-risk pool that would cap premiums. But the reinsurance and high-risk pools are expected to reduce the state’s 1.3 million uninsured population by only 100,000 people. Legislators are also expected to discuss giving a tax credit for small businesses with lapsed health insurance so they can continue providing coverage to their employees. Critics, however, claim that the tax credit discriminates against employers who already provide coverage.
A mere 20% of internal medicine residents say they plan to become general interns, compared with 50% in 1993, cautioned a panel at the American College of Physicians’ annual meeting last week. According to a MedPage Today story, the panelists said residents are thwarted from choosing general internal medicine as a career because hospital-based training does not provide enough exposure to ambulatory care. The panel recommended that the third year of internal medicine residency be changed to give residents the chance to explore their chosen career path in depth. Also, the panel said the educational needs of the resident should have priority over hospitals’ labor needs, and that residents should receive training in better ambulatory care settings rather than the typical “poorly functioning resident clinics.” Hardest of all, however, will be to revamp reimbursement to generalists, a necessary step to prevent residents from choosing more lucrative specialty careers.
On May 1-7, the Robert Wood Johnson Foundation and some of the most prominent organizations in the country will hold the fourth Cover the Uninsured Week, a nonpartisan, nationwide effort to urge U.S. leaders to make health coverage for Americans their top priority. Events are planned in all 50 states and the District of Columbia. Representatives from diverse communities will come to Washington, D.C., to discuss ideas being tested in various states and communities to try to cover some of the millions without health insurance coverage.
Dick Davidson, president of the American Hospital Association since 1991, will retire from the post, effective Jan. 1, 2007. Davidson is the second longest-serving president in the association’s 108-year history. The AHA also announced that the association’s Board of Trustees has chosen Richard J. Umbdenstock, a top executive with Providence Health & Services in Seattle, as Davidson’s successor. Umbdenstock will join the AHA as chief operating officer and president-elect in June before assuming the presidency next year. Umbdenstock recently served as the AHA’s Board chairman, a volunteer post from which he has resigned. The Board has asked AHA’s immediate past chair, George Lynn, president and chief executive officer of AtlantiCare in Atlantic City, N.J., to fill the remaining months of Umbdenstock’s term.
While at the AHA, Davidson helped establish the Institute for Diversity in Health Management and spearheaded the Hospital Quality Alliance—a public/private partnership that created publicly available information on hospital quality measurement nationally for the use of both consumers and internal hospital quality improvement. In 2004 and 2006, the association established two centers devoted to improving hospital and health system governance and quality and patient safety.
Before the creation of Providence Health & Services, Umbdenstock served as president and CEO of the Spokane, WA-based Providence Services for more than a decade.
To read the AHA's announcement, click here.
A survey of 2,726 physicians found that 62% do not support the push to publicize performance of healthcare providers and link Medicare payments to quality via pay-for-performance arrangements. The survey, conducted by healthcare market research company HRA Research, also revealed that 41% of the doctors do not believe that the 100-plus standard measures of performance that the AMA will develop as a result of an accord with Congress will result in improved quality of care. And 92% said that they believe specialty medical societies should be given the responsibility to craft these measurement criteria within their areas of expertise. Nearly half the physicians said they’ve witnessed insurance companies, consumer groups, and large employers request information on quality of care. Click here to download the survey findings.
A bill requiring Illinois not-for-profit hospitals to provide charity care equal to at least 8% of their total operating costs or lose their tax exemptions has been postponed in the Illinois legislature until next year, reports Reuters/The Washington Post. The bill was too complex, admitted its sponsor, Illinois Attorney General Lisa Madigan, and Standard & Poor’s Ratings Service said that the bill could damage hospitals’ credit quality. Bond insurers also said they were concerned about insuring Illinois hospital bonds. Madigan’s office said she would negotiate with the Illinois Hospital Association, which has opposed the legislation, before reintroducing the bill next year.
Sens. Frank Lautenberg (D-N.J.) and Robert Menendez (D-N.J.) last week introduced legislation requiring insurance companies to pay claims submitted by hospitals, physicians, and pharmacists within 14 days for claims filed electronically and within 30 days for claims filed manually. The payers included in the legislation are health insurers, Medicaid and Medicare managed care plans, and the new Medicare prescription drug managers. The legislation proposes monetary penalties for violations, rising interest rates on claims that are paid late, and a private right of action to recover unpaid claims and interest. The legislation would not preempt state prompt-pay laws. “A federal prompt-pay law is critical to ensuring that our pharmacies and health care providers maintain adequate cash flows and are able to continue functioning,” Menendez said.
New Jersey Gov. Jon Corzine has proposed a $50-per-day hospital bed tax that would generate $430 million for the state and obtain matching Medicaid funds for hospitals, reports NorthJersey.com. Half of the funds from the bed tax would be used for New Jersey’s general fund. The other half would be matched by federal Medicaid dollars, benefiting hospitals that treat large numbers of indigent patients. But the net effect of the tax would be a loss for half of New Jersey hospitals that have a limited population of Medicaid patients, say critics. “To strip this down to what it is, money is being taken from suburban hospitals and given to inner-city hospitals,” said Douglas Duchak, president and CEO of Englewood Hospital, which stands to lose $6 million from the tax. The tax, however, would net University Hospital in Newark $24 million. The New Jersey Hospital Association, which said it will fight the legislation, claims the tax could shutter some hospitals. Several legislators have also opposed the gove
