Healthcare Financial News

The quality of care for Americans enrolled in health plans that report on HEDIS quality measures improved in most areas of care in 2005, according to a new report by the National Committee for Quality Assurance. This is the seventh consecutive year of such gains. The findings showed that 77.7% of children enrolled in private health plans received all recommended immunizations, up from 72.5% in 2004; 70.3% of children in Medicaid managed care plans were immunized in accordance with clinical guidelines, up from 63.1% in 2004; and 75.5 percent of Meidcare beneficiaries who were smokers received advice to quit, a gain of nearly 11% over 2004.

The report, titled The State of Health Care Quality 2006, states that only 33% of Americans are enrolled in the type of plans that typically collect and report quality data. The report also found that significant differences persist between the performance of the healthcare system as a whole and the top accountable health plans. NCQA estimates that if the entire healthcare system performed at the level of the top plans, between 37,600 and 81,000 lives would be saved each year as well as between $2.6 billion and $3.6 billion in unnecessary hospitalization expenses.

The Office of Inspector General of the Department of Health and Human Services has entered into a corporate integrity agreement with Tenet Healthcare Corporation. The agreement is part of Tenet’s resolution of its civil and administrative liability for a wide range of investigated conduct, including diagnosis-related group upcoding, improper outlier payments, kickbacks to physicians, and other fraudulent activities. In June, Tenet also agreed to pay more than $900 million to the United States in exchange for a release of its liability.

The five-year agreement requires that Tenet implement a comprehensive compliance program; provide a variety of general and specialized compliance training to its employees, contractors, physicians, and those who serve on Tenet hospital governing boards; establish an employee hotline and reporting mechanism; and repay overpayments. The agreement also requires that Tenet maintain its existing quality initiatives and companywide compliance program; formalize in writing its policies and procedures in the areas of billing, , reimbursement, and compliance; provide a variety of general and specialized compliance training to its employees, contractors, and physicians it employs or who serve on a Tenet hospital governing board; and engage independent outside entities to provide reviews of compliance and effectiveness in five areas, including Medicare outlier payments, DRG claims, unallowable costs, physician financial arrangements, and clinical quality systems.

“We believe the requirements of this corporate integrity agreement are consistent with standards we already live by and principles we strongly believe in,” said Trevor Fetter, Tenet’s president and CEO, in a statement. “Because of the many changes and enhancements we have made at Tenet in the past three years, we already have in place many of the procedures and systems called for by this corporate integrity agreement.”

Learn more about compliance and the revenue cycle at HFMA's Fall Revenue Cycle Strategies Conference in Las Vegas.

Although healthcare costs for U.S. employers are projected to increase by 6%--two-thirds higher than the Consumer Price Index--in 2007, there remains wide variation in per-employee costs among similarly sized companies, according to the Towers Perrin 2007 Health Care Cost Survey. The finding indicates that some companies are succeeding at effectively controlling ongoing cost increases through a variety of benefit management initiatives. The per-employee cost variation between similar companies is about $3,000, which, in a company with 10,000 employees, may add $30 million a year or more to healthcare costs.

Contrary to popular belief, low-cost companies (those with the lowest premium level per employee) are not simply shifting costs to contain costs. In fact, the survey data show that employees at low-cost companies tend to pay less than employees at high-cost companies--approximately $1,728 per year on average versus the $1,884 that employees at high-cost companies will pay in 2007. Low-cost companies are also more willing to take action to reduce costs. For example, 63% of the low-cost companies either have implemented a consumer-driven health plan or will implement one in 2007 versus 38% of the high-cost companies. Low-cost companies offer a variety of health management programs (83% versus 58%) and disease management (84% versus 61%). And low-cost companies are also twice as likely to use extensive healthcare utilization metrics as their high-cost counterparts.

The survey also shows that individuals making minimum wage and retirees younger than 65 are the hardest hit by cost increases, and that employers are becoming increasingly concerned about growing numbers of active employees who are opting out of coverage entirely. Read the news release.

Although Americans have developed a better understanding of medical errors over the past two years, they haven’t made gains in using quality data to make decisions about their care. According to a new survey by the Kaiser Family Foundation and the U.S. Agency for Healthcare Research and Quality, 55% of Americans said they understand what the term “medical error” means, up from 43% in 2004 and 31% in 2002. Also, 43% said they believe preventable medical errors occur somewhat or very often.

However, 36% of those polled said they’ve seen information that compares the quality of care from health plans, physicians, and hospitals, but only 20% say they’ve used it to make healthcare decisions. These numbers are unchanged from the previous survey, conducted in 2004. The newest poll, a telephone survey of 1,216 adults conducted in early August, showed that Americans take some measures to reduce errors and improve coordination of care. For example, 70% said they check medication they get from a pharmacist against their physician’s prescription, 54% said they bring a list of their medications to a physician appointment, and 45% bring a friend or relative to help ask questions during a physician appointment.

Attend HFMA's Nov. 2 audio webcast, "Safety Data in Action: Mitigating Risk, Improving Quality, and Getting Paid for It."

HHS has announced a partnership with Georgia, Massachusetts, Michigan, Nebraska, South Dakota, and Texas to promote long-term care planning among state residents. The goal of the “Own Your Future” campaign is to get people to plan for potential future medical needs so they can remain at home and use their own resources instead of relying on public programs. Governors of the six participating states will send letters to all households with residents between the ages of 45 and 65--approximately 5.8 million households--promoting awareness of aging needs and encouraging them to order a free kit with information about Medicare and Medicaid benefit packages, outlines ways to plan ahead and legal issues to consider, and provides guidance on how to access private financing options.

“We are supporting better options for financing long-term care, meaningful incentives that make planning attractive, and increased awareness about what public programs pay and what Americans should plan to pay themselves,” said CMS Administrator Mark McClellan. CMS will also contribute $3 million to fund the National Clearinghouse for Long-Term Care Information, which supports awareness campaign activities in additional states and the development of a web site to provide consumers with long-term care information.

Members of the Healthcare Administrative Simplification Coalition are encouraging Department of Health and Human Services Secretary Michael Leavitt to adopt the Universal Credentialing Datasource® to streamline health plan credentialing application requirements. UCD allows physicians and other health professionals to post to a secure, national database any credentialing and demographic information that health plans, hospitals, and other healthcare organizations require.

In a letter to Leavitt, HASC members, including HFMA, pointed out that since its 2002 launch, UCD has saved nearly $50 million in administrative costs and eliminated more than 1.25 million legacy paper applications. The letter suggested that UCD could be a valuable tool for online provider enrollment and updates with the Centers for Medicare and Medicaid Services, for Medicare revalidation, and for disseminating national provider identifier information from Medicare and Medicaid providers to payers. UCD was developed by the Council for Affordable Quality Healthcare.

Increases in health insurance premiums are at their lowest rate in seven years, according to the eighth annual Henry J. Kaiser Family Foundation/Health Research and Educational Trust survey of employer-sponsored health plans. Premiums increased by 7.7% from spring 2005 to spring 2006, less than the 2005 increase of 9.2% and the recent peak of 13.9% in 2003. However, this year’s premium increase was more than double the overall 3.8% increase in wages and the 3.5% increase in the Consumer Price Index, according to the report, which was published as a Health Affairs web exclusive.

On average, employees contribute $627 a year for single coverage and $2,973 for family coverage. These contribution amounts represent 16% of the total premium for single coverage and 27% of the premium for family coverage. Despite attention from the media and health policy community, few employers offer high-deductible health plans with savings options. The survey reported that 7% of employers offered these plans in 2006. More widespread use of high-deductible plans could extend the downward trend in premiums, but the survey authors said it remains to be seen whether they will attract large numbers of employers and employees. Read the report.

Read the latest report from the PATIENT FRIENDLY BILLING® project: Consumerism in Health Care.

Read "Don't Celebrate Yet" on HFMA Views for responses to the Kaiser Foundation report.

The Citizens’ Health Care Working Group, created by Congress to assess the public’s views on the U.S. healthcare system, has presented recommendations to Congress and President Bush that call for a core set of health benefits and services based on best practices to be developed and made available to all Americans by 2012.

The bipartisan group presented its recommendations after 18 months of public meetings across the country in which thousands of Americans offered opinions on how to improve the nation’s health care. Many who participated said they particularly were concerned with what seemed to be arbitrary exclusion of services or benefits from their health coverage. The working group recommended that a public/private entity be established to identify core benefits that are evidence-based and reflect advances in medical research and practice. Additional recommendations suggested the expansion of community health networks that would ensure more Americans have a “medical home” and stepped up efforts to improve quality and efficiency of care.

Median compensation for primary care doctors increased by 3.89% in 2005 compared with an increase of 3.13% in 2004, according to the Medical Group Management Association’s 2006 Physician Compensation and Production Survey. Specialists’ compensation was up 6.61%, although urologists experienced flat compensation and pulmonary medicine physicians and neurologists reported modest compensation increases of 1.58% and 2.42%, respectively.

The report also indicates that physicians have increased their patient volumes to realize compensation increases that barely keep up with inflation. Primary care physicians reported a 6.76% increase in production (gross charges) in 2005, with pediatricians increasing their production by nearly 11% Specialists reported similar production increases--6.54% overall--with anesthesiologists and emergency medicine physicians reporting increases in production of 18.78% and 17.46% respectively. Read the press release.

When patients get admitted to hospitals under stolen identities, they create intertwined medical records that can lead to potentially fatal medical errors, unpaid hospital bills, and denied insurance coverage for the individuals whose identities are stolen. The Los Angeles Times relates the stories of several victims of medical ID theft, which has affected 200,000 individuals, according to a federal report in 2003, and is growing as a result of the rising cost of medical care. Because of Healthcare Insurance Portability and Accountability Act privacy rules, hospitals have been reluctant to release medical records to victims of ID theft, making it impossible for the victims to purge imposters’ medical information--such as blood type, diagnoses, and surgeries--from their own records. And as electronic health records become more prevalent, not only will erroneous medical information propagate more easily through multiple providers’ systems, but also identity theft may increase as more people have access to the records. Although victims of credit card fraud are protected from financial loss, there are no protections for patients who incur medical bills for treatment they did not receive.

Leslie Norwalk has been chosen to serve as the Acting Administrator of the Centers for Medicare and Medicaid Services. She will assume the acting administrator role effective Oct. 15, 2006, after Mark McClellan steps down from his post as administrator. McClellan resigned on Sept. 5.

For the past five years, Norwalk has served on the senior leadership team at CMS, currently serving as deputy administrator and having served as chief operating officer and acting director of the Centers for Beneficiary Choices. Prior to serving the Bush administration, she practiced law in the Washington, D.C., office of Epstein Becker & Green. She also served in the first Bush administration in the White House Office of Presidential Personnel.

The Financial Accounting Standards Board has released Statement 157, Fair Value Measurements, which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. Statement 157 does not require any new fair value measurements, but the application of this statement will change current practice for some entities, according to FASB.

The additional disclosures should provide better information about the extent to which fair value is used to measure recognized assets and liabilities, the inputs used to develop the measurements, and the effect of certain measurements on earnings (or changes in net assets) for the period, notes FASB. The statement is effective for financial statements issued for fiscal years beginning after Nov. 15, 2007, and interim periods within those fiscal years, but earlier application is encouraged.

Attend HFMA's Healthcare Accounting and Financial Reporting Conference in Atlanta Oct. 8-10.

The Department of Health and Human Services Office of Inspector General has released its work plan for FY07. Published at the beginning of each fiscal year, the work plan reflects what the OIG believes best identifies the vulnerabilities of HHS programs and activities, and promotes improvement in their efficiency and effectiveness.

Among the many issues to be tackled during FY07 are hospital capital payments, oversight of specialty hospitals, and payment for new technology.

The Agency for Healthcare Research and Quality has released a statistical brief documenting the medical conditions that accounted for the largest share of the nation’s $790 billion hospitalization costs in 2004. Five medical conditions accounted for 20% of the national hospital bill: coronary atherosclerosis, pregnancy and delivery, care of newborn infants, acute myocardial infarction, and congestive heart failure. Sixty percent of the cost of nearly 39 million hospitalizations in 2004 was for the care of Medicaid and Medicare patients.

Hospital stays for coronary atherosclerosis had the highest charges at $44 billion, while pregnancy and delivery were the second most expensive, at $41 billion. Pneumonia and osteoarthritis were among the top five expensive conditions for Medicare. Pregnancy and delivery and care of newborns constituted the most expensive hospital stays for Medicaid, but pneumonia and mental disorders also ranked in the top five expensive conditions. For private insurers, the most expensive care was for pregnancy and delivery, care of newborns, atherosclerosis, acute myocardial infarction, and back problems. Intracranial injury and stroke were among the most expensive conditions billed to uninsured patients.

The odds that Congress will pass a pending bill on healthcare IT or vote to block scheduled Medicare cuts on physician reimbursement before it recesses at the end of the week appear slim. In the few days Congress will remain in session, Republican legislators will be focusing on such high-profile issues as immigration, military spending, and homeland security, reports The Washington Post. After the elections, some pending legislation may be finished during a six-week lame-duck session in November. But observers say that Democrats are likely to stall Republican measures if the GOP keeps control of Congress. And if the Democrats win a majority in either house, they are expected to delay legislation until next year when they assume control. Although the American Medical Association has intensely lobbied Congress to roll back physician pay cuts--a strategy that has worked each year since 2003--its chances of success this year are “considerably less,” admits Cecil B. Wilson, chairman of the AMA. “The frustration is that Congress knows what the problem is,” Wilson told the Post.

In a New York Times op-ed piece, David Brailer, MD, PhD, former national coordinator for health IT, urges Congress to pass the Senate version of the pending health IT bill, which requires that the electronic health records that hospitals and others donate to physicians be portable. Advocates of the House’s version of the bill argue that a portability requirement will deter EHR adoption and that standards would be premature at this point. But such opposition to portability, maintains Brailer, fosters “proprietary health information,” which restricts good care rather than improves it. “As the era of digital medicine begins, we have one chance to get it right, and that means making portable health information our priority,” Brailer writes. Read the op-ed piece.

Donna Shalala, former Secretary of the Department of Health and Human Services during the Clinton administration, criticizes Congress and the White House for providing too little financial assistance too late to victims of Hurricane Katrina, thereby causing irreversible medical problems and economic difficulties for the region. In a commentary in the Sept. 20 issue of JAMA, Shalala, along with Jeanne Lambrew of George Washington University School of Public Health, write that the $2 billion in federal help fell far short of providing health care for the 3 million hurricane victims who needed it, and further aid may not be able to quickly reduce the higher suicide and death rates that have occurred in Katrina’s aftermath. The delay in the assistance may also have stalled the economic recovery of the gulf states. President Bush could have facilitated access to care by accelerating efforts to keep doctors in the area, and HHS could have redirected Medicaid hospital payments to other facilities, according to Shalala and Lambrew. They call for a “permanent, emergency Medicaid authority” to fund care for all individuals during a crisis. But the only true solution to the policy problems demonstrated during Hurricane Katrina, they write, “is to reform the health system, making it accessible, affordable, and quality-oriented for all.”

Access HFMA's CFO's Checklist for Disaster Recovery.

As Hispanics becoming increasingly widely dispersed throughout the United States, they are experiencing greater challenges in accessing health care, according to a report released by the Kaiser Family Foundation’s Commission on Medicaid and the Uninsured. The report found that Hispanics who have migrated from large cities to smaller urban and rural areas--“new growth communities”--have uninsured rates that are nearly identical (31%) to those of Hispanics living in large urban areas (30%). But Hispanics in new growth communities had much less proximity to safety-net providers than those in urban areas. Only 43% of Hispanics in new growth communities live within five miles of a community health center compared with 71% of the Hispanic population in urban centers. And only half live within 10 miles of a safety-net hospital compared with 82% in cities. Physicians in new growth communities also experienced more language difficulties taking care of Hispanic patients, who tended to use the emergency department more often for care. In comparison, whites experienced improvements in access to care in new growth communities. The report advised that communities with growing numbers of Hispanics will have to develop strategies for removing cultural, language, and access barriers to treating these patients.

Indiana now requires its hospitals to report medical errors to the public in an effort to improve patient safety. The rule adopted by Indiana’s state department of health finalizes the hospital reporting requirement that began in January, reports The Indianapolis Star. Once a hospital or surgery center admits fault for one of 27 mistakes, it must disclose the error to the public within 15 days. The list of errors that must be reported includes surgery on the wrong body part, incorrect medication doses, contaminated drugs or devices, and sexual assault on patients. Hospital error reports will be excluded from evidence in any litigation arising from such incidents, however. Since January, Indiana hospitals have reported fewer than 100 errors.

Because Medicare’s current fee-for-service payment system apparently does little to promote improvements in the quality of health care, the Department of Health and Human Services should gradually replace it with a new pay-for-performance system for reimbursing participating healthcare providers, says a new report from the Institute of Medicine. The report, Rewarding Provider Performance: Aligning Incentives in Medicare, is the third in a series of studies requested by Congress and sponsored by the Centers for Medicare and Medicaid Services on accelerating the pace of quality improvement. The report recommends that, for an initial period of three to five years, Congress should reduce base Medicare payments across the board and use the money to fund rewards for strong performance. At the same time, efforts should be made to evaluate other ways to fund bonus payments that could be used longer term. Healthcare providers and organizations that already have the capacity to begin participating in the pay-for-performance system should be required to do so as soon as it is launched. But participation by small physician practices should be voluntary for the first three years, at which time the HHS secretary should decide whether to implement broader mandatory participation.

The committee deferred to Congress to determine how much to decrease Medicare base payments to create a pool of funds for bonus payments, but it suggested that Congress may have to appropriate new funds to ensure that the rewards pool is sufficient. Using savings generated by improved efficiency and cost-reducing reforms has great potential to sustain the rewards pool, said the committee, and it urged CMS to test ways to make this funding source work. To increase the likelihood of participation by healthcare providers, the program should reward those who improve their performance significantly as well as those who meet or exceed designated thresholds of excellence.

Physician and state medical societies are urging Sen. Michael Enzi, R-Wyo., chairman of the Committee on Health, Education, Labor and Pensions, to refrain from setting a date prior to 2012 for the implementation of the ICD-10 coding system in the conference report on healthcare IT. The physicians emphasize that making the transition from ICD-9 to ICD-10 would unnecessarily burden physician offices with an additional cost of upgrading or replacing practice management systems and training billing and coding staff at the same time they are grappling with the costs and challenges of implementing new clinical IT systems. In addition, the physicians point out, private payers and the federal government will also be required to upgrade their own processing and data management systems to accommodate the transition.

Robert Kolodner, MD, has been named as the Interim National Coordinator for Health Information Technology at the Department of Health and Human Services. Kolodner previously served as chief health informatics officer at the Veterans Health Administration of the Department of Veterans Affairs, where he was involved with the oversight and development of My HealtheVet and VistA, the VA’s electronic health records system.

The United States ranks 15th out of 19 countries on a measure of preventable deaths before age 75, and lack of access to care due to cost is four times more prevalent in this country than in the United Kingdom. In an article in Health Affairs, researchers describe the scores earned by the nation’s healthcare system on a new national scorecard developed by The Commonwealth Fund. The scorecard, “which was designed to assess and monitor all key dimensions of performance in relationship to benchmarks and over time, provides a unique whole-system view,” the authors explain.

The United States’ total average score across all categories was 66 out of a possible 100, and “on multiple indicators, the United States would need to improve its performance by 50% or more” to reach the levels attained by top performers. A score of 100 on a given indicator represents not perfection but rather benchmarks set by top-performing countries or the top 10% of U.S. states, hospitals, health plans, or other providers. Read the article.

For the 12 months ending in August 2006, the hospital Producer Price Index was up 4.9% while the physician PPI rose 0.6%. The PPI of the Bureau of Labor Statistics is a family of indexes that measure the average change over time in the prices received by domestic producers of goods and services. PPIs measure price change from the perspective of the seller. This contrasts with other measures, such as the Consumer Price Index, which measures price change from the purchaser’s perspective. Sellers’ and purchasers’ prices can differ due to government subsidies, sales and excise taxes, and distribution costs. More than 8,000 PPIs for individual products and groups of products are released each month. Read the news release.

For the first time, the Centers for Disease Control and Prevention has published a report of state-level data on the number of people with disabilities and the wide range of health differences that exist between people with disabilities and those without. Disability prevalence ranges substantially among the states--from a low of 11.4% (Hawaii) to a high of 25.8% (West Virginia). People with disabilities make up about 20% of the U.S. adult, noninstitutionalized population.

More than a third--37.3%--of people with disabilities reported fair or poor health compared with 8.2% of people without disabilities. Also, people with disabilities are more likely to smoke, to be obese, and to not be physically active, which are health conditions and behaviors that can be improved, according to the report. People with disabilities report the highest prevalence of smoking in Kentucky, Tennessee, and Louisiana, and the highest prevalence of obesity among the disabled is reported in Mississippi, Indiana, and North Carolina. Having state-level data on the disabled is an important first step in finding opportunities to implement health promotion activities, says the CDC. Read the press release.

The National Labor Relations Board has thrown out the results of a June election at Flagstaff (Ariz.) Medical Center in which the nurses voted 242-211 against joining the National Nurses Organizing Committee/California Nurses Association. The NLRB said the election was marred by the medical center’s widespread interference with the nurses’ democratic right to vote.

In a 32-page report, an NLRB hearing officer said medical center officials “threatened employees with the loss of annual merit increases and thereby engaged in objectionable conduct.” Such threats, the hearing officer added, “would interfere with employee free choice in the election.” Currently, no major hospitals in Arizona are unionized. Read the press release.

As the first year of a controversial $1 billion federal program to pay hospitals and other providers for illegal immigrants’ uncompensated emergency care comes to a close, only 15% of the money has been given out. “We are really not certain why providers are not claiming the money,” Herb Kuhn, head of the federal Center for Medicare Management, which administers the program, told the Chicago Tribune.

Hospital officials, public health experts, and immigrant advocacy groups have offered several reasons. One is onerous paperwork that cancels out financial benefits from the program. Another is government calculations that may drastically reduce hospital bills. Some providers also say a moral issue is involved. Because the program requires them to document whether patients are eligible for federal funds, providers and immigrant advocacy groups say they are skeptical of promises that patient information will not be turned over to immigration officials.

Sens. Chuck Grassley, R-Iowa, and Max Baucus, D-Mont., have introduced legislation to improve the study of medical treatments, including the effectiveness and safety of drugs, by giving researchers at certain federal agencies and university-based and other research organizations highly controlled access to data on hospital, physician, and prescription drug benefits that are provided to Medicare beneficiaries.

The Medicare Data Access and Research Act would allow researchers to link data on hospital and physician services to prescription drug data to study drug safety and patterns of healthcare use among older adults and low-income, disabled, and vulnerable populations. The bill includes several provisions to ensure “that the strongest safeguards are in place to protect beneficiaries’ and providers’ privacy and confidentiality,” said Grassley. “This initiative is about improving the quality of health care by careful study of what is happening in the real world. Researchers could help us better understand why services that we know can help people maintain good health are not being used and to develop policies to promote their use, for example,” Grassley said.

A survey of 550 nurses by technology provider CDW Healthcare found that 55% of respondents said more professional training and/or professional development would have the greatest impact on improving how they use IT in their job. Healthcare organizations, however, do not appear to invest heavily in IT training for their nurses, according to the survey. Nearly 30% of nurses received no IT training in the past year, and 56% received between one and eight hours. Respondents who received no or little IT training were more likely to indicate they do not have time to use IT than respondents who received more extensive training. Respondents from organizations not involving nurses in the IT selection or implementation process are also more than twice as likely to say that IT diminishes or does not improve the quality of care than nurses with facilities that do involve them. The survey also found that 64% of respondents feel that IT is an important consideration when deciding where to work, and 26% said they would not consider working in a healthcare organization without it. Read the news release.

The Health Resources and Services Administration of the Department of Health and Human Services is requesting comments on the future direction and strategy regarding investments in health IT for section 330 grantees and other HRSA safety net providers through its Office of Health Information Technology. The long-term vision of HRSA and OHIT is to transform systems of care for safety net populations through the effective use of health IT by restructuring the health center-controlled network grant program to focus solely on projects that promote health IT adoption. These health IT-focused projects could be funded in two phases--planning and implementation, and innovation and sustainability--and would help advance President Bush’s goals related to health IT and the adoption of electronic health records.

The majority of Medicare healthcare providers are satisfied with the customer service, claims processing, and educational activities provided by the Medicare fee-for-service contractors, according to a new survey conducted by the Centers for Medicare and Medicaid Services. The first Medicare Contractor Provider Satisfaction Survey found that 85% of respondents rated their contractors between 4 and 6 on a 6-point scale. MCPSS will be administered on an annual basis to measure satisfaction with key services performed by the 42 FFS contractors that process and pay more than $280 billion in Medicare claims each year.

Among those who interact with fiscal intermediary contractors, the most satisfied providers are rural health centers and skilled nursing facilities, both with scores of 4.73, followed by end-stage renal disease treatment facilities with 4.59, and hospitals with 4.57. For those interacting with carrier contractors, the most satisfied providers are ambulance (4.66) and physicians (4.61), followed by labs (4.50) and licensed practitioners (4.40). For all contractor types, key predictors for satisfaction were the handling of provider questions and claims processing. Read the news release.

In a recent survey of medical practices representing 34,000 physicians, 39% of group practice administrators said they may be forced to limit the number of Medicare patients they see to remain financially solvent if a proposed 5.1% cut to physician reimbursement proposed in the 2007 Medicare physician fee schedule moves forward. Nineteen percent of respondents to the Medical Group Management Association’s survey said they would be forced to stop accepting new Medicare patients.

In addition, 67% said they would modify or eliminate health benefit coverage for their own employees and 39% said they would lay off clinical staff in 2007 as a result of the proposed cuts. “Congress needs to replace the flawed SGR formula immediately and provide increases that accurately reflect a practice’s cost of providing care,” said William Jessee, president and CEO of MGMA. According to 2006 MGMA cost survey data, the cost of operating a group practice increased 7% in 2005. Read the news release.

A majority of adults--89%--who sought coverage in the individual insurance market during the past three years ended up never buying a plan, according to a new report from The Commonwealth Fund. Fifty-eight percent found it very difficult or impossible to find affordable coverage. One-fifth of those who sought to buy coverage were turned down, were charged a higher price because of a pre-existing condition, or had a health problem excluded from coverage.

The report also highlights the increasing cost burdens families are facing due to the decline in the quality of coverage and more cost-shifting to employees. Nearly half (44%) of those with deductibles over $1,000 experienced problems with access to care (didn’t fill a prescription; didn’t see a specialist when needed; skipped a recommended test, treatment, or follow-up; or had a medical problem and didn’t go to a doctor or clinic) compared with 25% of those with deductibles under $500. In addition, 41% of those with deductibles over $1,000 had medical bill problems compared with about 23% of those with deductibles under $500.

The Department of Health and Human Services’ Office of Inspector General has issued a report that hospitals are not following a mandatory reporting requirement to inform CMS of patient deaths that occur as a result of using restraints or seclusion to manage behavior. Of the 104 such deaths that occurred between August 1999 and December 2004, 44 were not directly reported to CMS. And fewer than one-third of the deaths that were reported were timely. But many hospitals may not be aware of the requirement, because only 52% of state survey agencies had communicated the mandate to hospitals. The OIG report also found that state survey agencies and CMS’s regional offices failed to act quickly when notified of patient deaths.

The OIG recommends that CMS seek legislation to establish civil monetary penalties for hospitals that fail to meet the requirement in a timely way, that hospitals be required to also report deaths due to use of restraints for acute medical and surgical care to simplify the reporting requirement, that regional CMS offices and state survey agencies follow required timelines, and that hospitals be provided with information on the requirement. CMS concurred with the OIG’s recommendations.

More than 20 leading healthcare organizations have taken a major step toward easing the burden that physicians and other providers face in verifying patient insurance information. The groups, including Aetna, Humana, and WellPoint, have agreed to exchange eligibility and benefits information electronically according to rules developed through the Council for Affordable Quality Healthcare, a not-for-profit alliance of leading health plans. The operating rules, developed by the CAQH Committee on Operating Rules for Information Exchange (CORE), build on existing standards, such as those in the Health Insurance Portability and Accountability Act, to make electronic transactions more efficient, predictable, and consistent, regardless of the technology. Insurance verification also is critical for effective upfront collections and price transparency.

Bob Greczyn, CAQH board chair and CEO and president of Blue Cross and Blue Shield of North Carolina, called the commitment to follow the CORE rules “the first wave of an industry campaign to reduce an unnecessary administrative burden related to verifying patient insurance coverage.” Nearly 70 million Americans are covered by the health plans that have committed to use the CORE Phase I rules by March 2007. HFMA is among 19 organizations that have endorsed the CORE Phase I rules.

The CORE operating rules will help providers determine whether a health plan covers the patient, the level of patient benefit coverage, and the patient’s copay amount, co-insurance level, and base deductible levels. The rules also establish policies governing the exchange of data. The CORE initiative will create operating rules to address additional eligibility components and business transactions in Phase II (2006-07) and later phases (2007and beyond). Read the news release.

Hospitals throughout New York now are required to provide skilled translators for patients to avoid the chance that friends or family who translate will garble or intentionally withhold information. Even though no state or federal standards for a “skilled” translator exist, the Associated Press reports that most hospitals will probably rely on volunteers, bilingual staff, and telephone translation agencies to meet the new requirements. The regulations will be enforced through the state’s regular onsite visits and investigations of patient complaints to a state hotline.

Previously, the broad wording of requirements for hospitals to provide interpreters for patients allowed children and relatives to serve as translators. Patients can still choose to have a friend or relative translate, but only after refusing the hospital’s translator. The new regulations require hospitals to appoint language coordinators and note on medical records the patient’s primary language. Children under age 16 cannot serve as an interpreter, except in emergencies.

The medication error rate for patients older than age 65 is nearly seven times greater than for those younger than 65, according to an analysis by prescription benefit manager Medco Health Solutions, Inc. The analysis included Medco’s 2004 drug insurance claims from 2.4 million adults, according to the Associated Press. Errors were recorded when patients received a prescription for an incorrect dosage or one that could interact adversely with current medications or worsen another medical condition.

Not only were seniors most at risk of receiving a drug prescribed in error, but also the error rate increased according to the number of medications prescribed and the number of physicians providing care. Seniors who saw two physicians received an annual average of 27 prescriptions and were at risk of 10 errors a year. For those seeing five physicians, the average number of prescriptions increased to 42 a year and errors to 16 a year. Glen Stettin, Medco senior vice president, said there is “clearly a communication breakdown between prescribers.”

Despite the potential for sizable bonuses, some physicians say it may cost too much to participate in Aetna’s new pay-for-performance program in the Washington, D.C., area. According to the Washington Business Journal, the program would pay physicians $80 for each diabetic patient and $160 for each heart patient treated according to national performance standards.

But physicians say they probably wouldn’t be able to meet the standards without installing electronic health records systems that cost anywhere between $10,000 and $100,000. “Who’s going to pay for all this when I’m having trouble paying salaries?” asked Laura Tosi, MD, a board member of the Medical Society of D.C. “No one disagrees with these measures. It’s how are you going to document it?”

Increasing patient copayments for expensive specialty medications, including biologic agents that target specific genes and proteins, won’t cut costs to employers and health insurance plans. A new RAND Corporation study published in Health Affairs found that patients continue taking the drugs even when their costs rise because there are no other options.

The study examined pharmacy and medical claims from 55 health plans at 15 large employers submitted during 2003-04, representing more than 1 million patients with cancer, kidney disease, rheumatoid arthritis, or multiple sclerosis. Even though higher copays can reduce prescription drug use by 30% to 50%, the study found that higher copays for specialty drugs cut their use by only 1% to 21%.

The study authors said the best way to hold down costs to employers and health insurance plans for expensive specialty drugs is to make sure the medications are prescribed only to the patients who can truly benefit from them. Read the news release. Read the abstract.

Department of Health and Human Services Secretary Michael Leavitt and Centers for Medicare and Medicaid Services Administrator Mark McClellan have announced a new fall Medicare awareness program to educate beneficiaries about the upcoming open enrollment period for Medicare Part D, which takes place Nov. 15-Dec. 31. The four-month campaign, called “My Health, My Medicare,” gives pharmacies an opportunity to partner with CMS to discuss benefits during annual flu shot events and other beneficiary outreach activities.

To assist beneficiaries in making decisions about Medicare benefits, the campaign is divided into four segments. In September, beneficiaries should compare their health needs with the coverage they have and prepare questions about their coverage. October is when they should evaluate benefits, using the one-page Medicare Checkup as a guide. November is the month to choose a new plan or change plans, if desired. In December, beneficiaries can maximize their benefits, working with their doctor to develop a personalized plan for prevention. CMS is urging beneficiaries who wish to change prescription drug plans to sign up before Dec. 8 to ensure they are able to have their prescriptions filled in early January. Read the overview.

The Congressional Budget Office has released a report on the potential for legislation that would modify the physician payment formula governing Medicare rates. About 38% of the $158 billion Medicare Part B expenditures are payments for services provided by physicians. Those rates are governed by the sustainable growth rate mechanism that, unless changed by legislation, will reduce fees by about 4% or 5% annually for the next several years. The CBO report looks at possible alternatives, such as overriding the formula with a 1% rate increase in 2007 that would raise outlays by $6 billion over the next 10 years, or replacing the formula with an inflation index at a cost of more than $200 billion over the coming decade. Setting appropriate fees for physicians’ services, the CBO says, entails a balancing of two factors: the need to pay providers enough to ensure beneficiaries’ access to care, and the budgetary pressures created by ever-growing healthcare costs and an aging population. Read the report.

CMS has announced that the standard Medicare Part B monthly premium will be $93.50 in 2007, an increase of 5.6%. This percentage increase is the smallest since 2001 and less than half the dollar increase in the premium for 2006. For the first time, however, individuals who earn more than $80,000 and couples whose income exceeds $160,000 will pay a higher Part B premium, ranging from $106 to $162.10 per month, based on their income. The higher premiums will affect approximately 4% of Medicare Part B enrollees and are projected to reduce Medicare costs by an estimated $7.7 billion over the next five years and $20.8 billion over the next 10 years.

Growth in traditional fee-for-service Part B spending per capita accounts for the bulk of the premium increase. In particular, very rapid growth in spending for hospital outpatient services is a major contributor to the premium increase. Although outpatient hospital spending accounts for only about 13% of total Part B spending, it accounts for one-third of the increase in the 2007 premium.

Sen. Charles Grassley, R-Iowa, has called for reforms in not-for-profit hospitals’ reporting of charity care information to the IRS. His comments came after findings from an in-depth survey showed that despite the billions in tax breaks they receive, not-for-profits may provide less care for the poor than for-profit hospitals. The survey, sent in May 2005 to 10 major not-for-profit hospitals, showed that not-for-profits may charge poor, uninsured patients more than insured patients for the same services while providing executives with high compensation and perks such as country club memberships.

In a statement issued on the eve of Senate Finance Committee hearings examining the issue, Grassley, who chairs the committee, noted that not-for-profits aren’t subject to any IRS reporting requirements concerning charity care and community benefit. He said the IRS is creating a supplemental report to Form 990 for not-for-profit hospitals to disclose more information about their charity care and community benefit activities. He suggested that the new report conform to recent guidelines the Catholic Health Association has established on reporting and measuring key parts of community benefit for its member hospitals. “We need to see IRS action on this front,” he said.

As more Americans develop diabetes, osteoporosis, and obesity-related health problems, the number of endocrinologists who specialize in treating them is shrinking. Richard Hellman, MD, president-elect of the American Association of Clinical Endocrinologists, told The Philadelphia Inquirer that the United States currently has 12% fewer endocrinologists than are needed.

Hellman and others said the falling numbers are a result of physician retirement combined with salaries for endocrinologists that are lower than other specialties. “The payment system is perverse and discriminates against taking care of complicated diseases like diabetes,” Hellman said. According to the Medical Group Management Association, the median salary for a noninvasive cardiologist in the Northeast is $307,344; it is $193,345 for orthopedists who do not perform surgery, and $164,503 for endocrinologists. The American Diabetes Association first warned of an impending shortage of endocrinologists in 1999.

According to a new General Accounting Office report, most participants are satisfied with their HSA-eligible plans and would recommend them to healthy consumers--but not to those who use maintenance medication, have a chronic condition, have children, or may not have the funds to meet the high deductible. Premiums for HSA-eligible plans are 35% less than traditional plans for single coverage and 29% less for family coverage, but deductibles are about six times greater than those of traditional plans.

GAO analyzed data regarding HSA-eligible and traditional plans and enrollees from national employer health benefits surveys, three selected employers, and a national broker of health insurance. It also compared IRS data for tax filers reporting HSA contributions with corresponding data for all tax filers under 65 years old, and conducted focus groups with employees of the three employers.

Of three HSA-eligible plans the GAO reviewed, covered health services were about the same as traditional plans: preventive, diagnostic, maternity, surgical, and emergency services. About two-thirds of employers that offer HSAs contribute to their employees’ accounts. In 2004, the average employer HSA contribution was $1,064, the average HSA deduction among tax filers was $2,100, and tax filers withdrew an average of $1,910 from their accounts that year. About 90% of withdrawn funds went toward eligible medical expenses, according to the report.

While reporting programs have raised the profile of hospital quality measurement and improvement, lack of coordination among reporting programs and inadequate resources hinder efforts to improve patient care, according to a study by the Center for Studying Health System Change published in Health Affairs. Rather than participating in a “dizzying array” of quality reporting programs, hospitals should focus more attention on how these programs actually improve patient outcomes, said the report. The study found that 36 of the largest hospitals in 12 nationally represented communities participated in 38 different reporting programs despite little evidence showing whether the programs improve the quality of care or how multiple programs interact.

Quality reporting programs sponsored by the Centers for Medicare and Medicaid Services and the Joint Commission on Accreditation of Healthcare Organizations have improved hospitals’ awareness, attitudes, and resources directed toward quality improvement goals, the authors write. However, the programs are poorly coordinated and consume huge resources largely because of inadequate IT. The authors call for “more deliberate coordination” of programs and development of adaptable information systems.

Beginning Oct. 1, physicians at Stanford University Medical Center will be prohibited from accepting gifts, even pens and mugs, from pharmaceutical sales representatives. The ban is part of a small but growing trend among academic medical centers to limit pharmaceutical industry influence on patient care and physician training.

The new policy prohibits physicians from accepting industry gifts of any size, including meals or drug samples, anywhere on the medical center campus or at off-site clinical facilities where they may practice. They are also prohibited from publishing medical journal articles that have been ghostwritten by industry contractors. The gift ban extends to sales reps from medical device makers and other companies.

“In recent years we have witnessed an erosion of the public trust in the profession of medicine and even in the value of science,” said Philip Pizzo, MD, dean of the school of medicine. “Part of that is related to the market forces that have increasingly converted medicine from a profession to a business, but a significant factor has also been the perception that physicians and scientists may be accepting gifts and gratuities from industry at the very time that the cost of drugs is skyrocketing.” Read the press release.

The Healthcare Association of New York State has filed a complaint with Attorney General Eliot Spitzer over an incident in which an Oxford Health Plan enrollee was charged more than usual for using an out-of-network surgeon in an in-network hospital. Oxford, owned by UnitedHealth Group, made the entire hospital bill subject to out-of-network coverage as a result of the patient’s choice of surgeon, according to The New York Times.

The enrollee, who had gastric bypass surgery at Mercy Medical Center in Rockville Centre, N.Y., knew she would pay an extra, out-of-pocket fee for her surgeon. Despite Mercy being in the Oxford network, she also was charged a $1,000 deductible and 30% of all other costs, which totaled more than $4,700. Even though Oxford told the enrollee she had to pay out-of-network charges, the insurer reportedly paid Mercy lower, in-network charges minus the deductible and 30% fee. A spokesperson for Mercy’s parent company said the hospital had verified that the procedure would be covered and expected Oxford to pay the full bill. “Our finance people say they have never encountered this before,” she said.

An Oxford spokeswoman said the arrangement is explained in enrollees’ certificate of coverage. However, the HANYS contends that those terms were not clearly outlined, said the Times.

The first results from the world’s most ambitious healthcare pay-for-performance scheme, the United Kingdom’s Quality and Outcomes Framework for general practitioners, found that performance by the general practitioners was far better than expected--and that the local health authorities had to pay for all that good performance, according to an interview with leading U.K. health services researcher Martin Roland, published online in Health Affairs.

“I think the response has been, to some extent, dismay by health authorities because the amount they’ve needed to pay over the budgeted amount is essentially unplanned for,” says Roland. For the first year of the QOF, GPs scored a mean of 91% compliance with clinical guidelines. That translated into $700 million in additional physician payments, above and beyond the $1.8 billion in new money already budgeted for the QOF. The cost represented a 20% increase in the U.K.’s National Health Service family practice spending and 30% of GPs’ incomes. Even before the pay-for-performance initiative, however, physicians’ quality had begun improving as a result of the government developing clinical guidelines, a national inspection process, and a variety of quality improvement procedures in physicians’ offices. Because the U.K underestimated GPs’ quality levels when it set the QOF baseline, it left itself open to the charge that it was paying physicians for what they were already doing. Not surprisingly, the current iteration of the QOF contains no new money, and the baseline levels against which GPs’ quality is measured have been raised. Read the abstract.

Medicare Part D greatly expands Medicare beneficiaries’ access to cancer therapies, according to a study published in Health Affairs. The analysis of nearly 3,000 Part D plans finds that virtually all of them cover most cancer drugs, including 70% of brand-name drugs. The drugs most frequently found on the formularies also have low copayments. But some cancer drugs require prior authorization from a physician before the pharmacist can fill the prescription, which potentially limits patients’ access to the treatments, according to the study. Less than 5% of the plans had quantity limits regulating the amount of the drug supply a patient can get at one time, and no plans required step therapy, where patients have to fail on one drug before they can be given another. More than 700,000 Medicare beneficiaries are newly diagnosed with some form of cancer every year. Prior to Part D, Medicare did not reimburse for some outpatient therapies, including many oral and self -injectable drugs.

The Securities and Exchange Commission is adopting amendments to the disclosure requirements for executive and director compensation, related-person transactions, director independence, and other corporate governance matters and security ownership of officers and directors. Though directed at publicly owned companies, many such requirements become the standard against which not-for-profit organizations are measured. The amendments will make proxy and information statements, reports, and registration statements easier to understand and will provide investors with a clearer picture of the compensation earned by a company’s highest-paid officers and directors. In addition, the amended requirements will provide better information about key financial relationships among companies and their executive officers, directors, significant shareholders, and their respective immediate family members.

The Centers for Medicare and Medicaid Services has awarded a one-year contract to study methods of improving estimates of the cost of Medicare inpatient hospital discharges used in constructing the diagnosis-related group relative weights. The contract will focus on methods of improving the accuracy of the adjustment of charges to cost to account for charge compression. The study will also examine how charge compression interacts with other potential variables in the construction of the DRG relative weights, such as the number of cost centers included and whether hospital-specific relative values are used.

CMS also awarded a contract to evaluate alternative severity-adjusted DRG classification systems. The study will assess the variation in the level of resource use and the resulting improvement in homogeneity within DRGs; how each system can be modified to capture new technologies and merge them into the basic DRG structure as needed; and the availability of each system’s clinical logic in the public domain. Although the evaluation contract is for one year, CMS expects the contractors’ work to inform deliberations about the FY08 proposed IPPS rule. Read the announcement.

At the Senate Judiciary Committee’s Sept. 6 hearing “Examining Competition in Group Health Care,” Mark Piasio, MD, president of the Pennsylvania Medical Society, testified that many large Pennsylvania health insurers are generating “huge profits” even as the state’s physician payment lags behind other parts of the country and premiums rose by 40% from 2000 to 2004. And the current merger of the two largest Pennsylvania health insurers will increase the statewide market share of commercial health insurers “to levels that would not be permitted under existing Department of Justice and Federal Trade Commission merger guidelines,” Piasio said. Edward Langston, MD, chair-elect of the American Medical Association, warned that “our worst fears are being realized in many markets across the country” and called upon the DOJ to subpoena health plans to determine whether they are engaging in anticompetitive behavior “to the detriment of consumers--our patients.”

But Stephanie Kanwit, special counsel to America’s Health Insurance Plans, argued that vigorous competition in the healthcare industry has spurred the introduction of new consumer products and that health plans are increasing market competition by promoting quality and transparency initiatives. Sen. Patrick Leahy, D-Vt., the Judiciary Committee’s ranking member, reminded the committee to maintain a focus on providing more affordable, high-quality care to consumers rather than giving physicians more market power to combat the insurance industry’s increased market share. “If the insurance industry is consolidating to the point where insurance companies can exercise market power, the government’s role is to address that concentration--not add to the problem by creating market power on the other side, leaving consumers out of the equation,” said Leahy. Read the testimonies.

Providing low-income children with government-sponsored health insurance improves their quality of life as it expands their access to physicians and other health services, according to a RAND Corporation study. Researchers found that children newly enrolled in California’s State Children’s Health Insurance Program reported improvements such as doing better in school, feeling better physically, and getting along better with their peers.

The number of parents who reported that their children went without needed care also dropped sharply during the study. At the point of enrollment, about 16% of parents said their children had forgone needed health care in the previous year, which dropped to about 7% after two years. The number of parents who reported problems getting care for their children also dropped. Children whose parents reported skipping care year after year had scores on their quality-of-life surveys that were similar to those seen among children who had recently begun treatment for cancer, according to the study.

The Catholic Health Association has announced that its revised guidelines released in May for planning, measuring, and documenting community benefits have been formally accepted by 95% of its member health systems and 90% of the member hospitals to date. Sister Carol Keehan, CHA president and CEO, has worked with U.S. Senate Finance Committee Chairman Sen. Charles Grassley, R-Iowa, to improve and standardize how not-for-profit hospitals count and report community benefits. Grassley said he would be “urging other hospitals” to use CHA’s guidelines as a template because “I think this is an honest approach” and provides accurate reporting. CHA worked closely with HFMA and the hospital alliance VHA Inc. to develop the revised guidelines. Sister Keehan will be educating senators about the new guidelines during a Finance Committee hearing on Sept. 13.

According to a study by the National Center for Education Statistics, only 22% of Americans have basic health literacy, or the skills to perform simple and everyday literacy activities, and 14% have below-basic health literacy. Just over half of American adults--53%--have the ability to understand moderately challenging health information and use it to make health decisions. An additional 12% of adults have proficient health literacy, which allows them to comprehend abstract prose and make complex inferences. Individuals who receive health insurance through an employer or privately purchase coverage had higher average health literacy than the uninsured or those receiving Medicare or Medicaid. Twenty-seven percent of Medicare beneficiaries had below-basic health literacy, as did 30% of Medicaid recipients. People with below-basic and basic literacy levels tend to receive information about health issues from radio and television, while those with higher literacy skills use written sources and the Internet as a source for health information.

CMS has announced a three-year demonstration program to examine whether allowing hospitals to provide financial incentives for physicians to support better care can improve patient outcomes without increasing costs. In the Physician-Hospital Collaboration Demonstration, the hospital will be paid its usual inpatient rate for the patient’s care, but physicians will be paid a portion of the savings resulting from quality improvement and efficiency initiatives taken by the physician. Incentive payments will be allowed only for documented, significant improvements in quality of care and savings in the overall costs of care. The demonstration will track patients for an entire episode of care, which generally extends beyond a hospitalization, to determine the impact of hospital-physician collaborations on preventing short- and long-term complications, duplication of services, coordination of care across settings, and other quality improvements that hold promise for eliminating preventable complications and unnecessary costs. CMS says it will give preference to proposals submitted by healthcare group consortia, comprising healthcare groups and their affiliated hospitals, and will limit the number of hospitals participating to 72.

“The most costly and intensive physician services are provided in hospitals, yet our payment systems do not support steps by hospitals and doctors to work together to improve care,” said CMS Administrator Mark McClellan, MD, PhD. “This demonstration program will support efforts to track and improve the overall episode of patient care, including follow-up and longer-term outcomes.” Read the release.

A telephone survey of 1,031 adults commissioned by the American Medical Association found that 82% of seniors and 93% of baby boomers age 45 to 54 are concerned that their access to health care will be hurt if impending cuts in Medicare physician payment go through beginning Jan. 1. Without congressional action, Medicare will cut physician payments nearly 40% over the next nine years, while practice costs increase at least 20%, according to the AMA. And with less than one month left on the congressional calendar, the AMA is intensifying its lobbying efforts to urge members of Congress to stop the Medicare physician payment cuts and to tie physician payments to increases in practice costs. The AMA is using the survey results to bolster its argument that the cuts will leave patients without physicians willing to care for them. A national survey of physicians conducted earlier this year by the AMA found that 45% said they will decrease or stop taking new Medicare patients if the planned cuts go through. Read the release.

California Gov. Arnold Schwarzenegger said he will veto a bill passed by the California Assembly that would have established the state as a single payer providing universal coverage to all Californians, reports the Los Angeles Times. Schwarzenegger said he could not justify the cost of the program and the taxes on individuals and businesses to fund it, because universal coverage does not solve the healthcare system’s biggest problem--affordability of medical care. According to Health Care for All California, a not-for-profit group, providing universal coverage to all the state’s residents would have cost an extra $17 billion, but the state would have saved $25 billion through a streamlined claims and reimbursement system and by leveraging its purchasing power to negotiate bulk rates for prescription drugs. The bill’s sponsor, Democratic State Sen. Sheila Kuehl, said she would reintroduce the bill next year.

The Centers for Medicare and Medicaid Services has outlined actions intended to enhance oversight and evaluation of the Medicare Quality Improvement Organization program. QIOs are organizations with state-level responsibilities under contract with CMS that are responsible for a range of key tasks in support of the Medicare program. CMS is requiring each contractor to have a more independent advisory board, charged with review of compliance, conflict of interest, ethics, and program integrity. Boards will be required to evaluate the structure of each state-based QIO contractor and its relationship with providers and stakeholders within the state.

Also in response to recommendations and to the administration’s recent transparency initiative, the QIOs are enhancing their efforts to provide better information on quality and costs to consumers and providers. A QIO pilot project, involving consumers, private insurers, employers, and state governments, will expand information available to Medicare beneficiaries on the quality of service provided by Medicare providers.

“The QIO program is a cornerstone in our efforts to improve the quality and efficiency of care delivered to Medicare beneficiaries,” said CMS Administrator Mark McClellan, MD, PhD. “QIOs have had a positive impact on the quality of health care in America, and with enhanced oversight and accountability, and new initiatives to improve transparency and care, they will do more to support better care and lower costs.” Read the overview.

A significant number of resident physicians receiving training in U.S. hospitals report they have not received instruction in key aspects of communicating with patients who do not speak English, despite federal regulations requiring adequate interpreter services for such patients. A study published in the Sept. 6 issue of JAMA found that more than half of 2,000 residents surveyed had not been taught that patients with limited English proficiency have a legal right to professional interpreters. (Guidance issued in 2000 by the Department of Health and Human Services states that denial of adequate interpreter services to patients with limited English proficiency is a form of discrimination.) While 77% of respondents said they sometimes or often used professional interpreters when facing language barriers, 84% admitted to frequently using untrained interpreters, such as patients’ family members and friends. More than 20% admitted to sometimes or often relying on children under age 12 to interpret for family members, a practice cited as particularly risky.

“Lack of appropriate medical interpreters not only makes it harder to make the right diagnostic and treatment choices, it also can make care more costly, since studies have shown that providers tend to order more tests in these instances,” said Joseph Betancourt, MD, PhD, a co-author of the JAMA report. Read the release.

Nearly 84% of 1,278 first-year residents surveyed violated at least one rule governing their work hours set by the Accreditation Council for Graduate Medical Education, according to a study by Harvard Medical School researchers and published in the current issue of JAMA. Approximately 67% of first-year residents report that they worked shifts greater than 30 consecutive hours, 43% worked more than 80 hours per week, and 44% worked for seven days without taking a day off. Among second-year residents, 40% said they exceeded the limits placed on the number of hours they are allowed to work. Those who sanction residents’ long hours say continuity of care will be harmed by having patients cared for by multiple residents working shorter shifts, reports The Boston Globe. But sleep experts say ACGME’s work-hours rule should be even stricter and much better enforced to prevent residents from making errors that hurt patients and themselves.

In resigning as head of the Centers for Medicare and Medicaid Services on Tuesday, Mark McClellan, MD, PhD, sent an e-mail message to his staff, calling his tenure in public service “the privilege and experience of a lifetime.” In his e-mail, McClellan thanked his staff for getting 90% of Medicare beneficiaries drug coverage at a cost 25% less than expected, enhancing prevention and care coordination for Medicare beneficiaries, and providing more people with State Children’s Health Care Insurance Program and Medicaid coverage while slowing Medicaid spending growth during his watch. But after six years serving in the Bush administration, McClellan, 43, says he wants to spend more time with his wife and two young daughters, and, according to news accounts, will likely work for a healthcare think tank after he departs CMS in early October “to continue to work to make our healthcare systems and programs better.” “We are implementing the most important reforms in more than two decades in hospital payments, and important reforms in ambulatory surgery and many other types of care,” wrote McClellan. “We’ve also worked to lay the foundation for a fundamentally better, more sustainable payment system for physicians. We are collaborating to move to paying for what we really want, and what providers want to deliver: better care at a lower overall cost, not just more services.”

The California Department of Health Services has warned four organ-transplant programs that they must correct deficiencies in their survival and procedures rates by Sept. 29 or risk losing Medicaid funding, reports the Los Angeles Times. USC University Hospital in Los Angeles and California Pacific Medical Center in San Francisco were cited for one-year survival rates below Medicaid’s standard of 80%; UC Davis Medical Center in Sacramento had one and one-half times the expected death rate after liver transplant; and Sutter Memorial Hospital in Sacramento performed too few procedures to maintain competency, according to the letters issued by the CDHS. UC Davis, however, argues that it meets volume and survival standards, California Pacific said data on its transplant program were misleading due to a one-year anomaly, and Sutter said it would comply with requests for more information on its transplant program.

For most surgical procedures, surgeons older than 60 have patient outcomes similar to younger colleagues. But a study published in Annals of Surgery found that older surgeons had higher patient mortality rates with pancreatectomy, coronary artery bypass grafting, and carotid endarterectomy, which are more complex and require finer stitching than the other five surgeries studied, reports an AP story. The older surgeons who performed these surgeries also had lower procedure volumes than younger surgeons. Determining at what age hospital administrators should require surgeons to retire is becoming more of an issue as the percentage of working surgeons age 65 and older has increased from 13% in 1975 to 18% in 2004. “Those who continue to practice in high-risk areas should maintain their caseloads, but it may be a good idea when surgeons get into the preretirement mode that they give up the most complicated and high-risk surgeries altogether,” the study’s co-author, John Birkmeyer, MD, told the AP.

Although there was little expectation that an election year would yield compromises between parties on major healthcare legislation, “lower profile” health bills stand a chance of passing before Congress adjourns for the election, reports The Hill. One bill that may become law before November is the healthcare IT legislation that passed the House earlier this summer. Legislators must, however, resolve areas of disagreement between the Senate and House versions of the bill, such as providing grants to healthcare providers to purchase new technologies and a requirement that providers use a revised set of computerized billing codes. Another bill that is likely to pass reauthorizes the Ryan White CARE Act, a $2 billion/year program that provides medical assistance to HIV/AIDS patients.

Mark McClellan, MD, PhD, administrator of the Centers for Medicare and Medicaid Services, has resigned his post, the White House announced today. No replacement has been named.

Under McClellan’s leadership, CMS implemented Medicare’s prescription drug program. Before coming to CMS, McClellan served as commissioner of the Food and Drug Administration; previously, he served as a member of the President’s Council of Economic Advisers and as Deputy Assistant Secretary of the Treasury for economic policy. Before coming to the White House, McClellan was associate professor of economics at Stanford University and associate professor of medicine at Stanford Medical School.

Some healthcare organizations are not collecting reliable data information on the race, ethnicity, and primary language of their patients because they believe that directly asking patients about race and ethnicity is illegal. However, a study funded by the Commonwealth Fund focuses on ways to eliminate barriers to race and ethnicity data collection, and suggests elements of a uniform framework for asking the questions. Proposed elements include a rationale for why the patient is being asked to provide this information; a script for staff to use so that questions are asked in a uniform fashion, and a method for allowing patients to self-identify race, ethnicity, and language using their own words rather than a pre-established set of categories. The report also suggests that patients be assured the information will be held confidential, with only a limited number of people having access to the data.

The top executives of state-supported UNC Health Care in Chapel Hill, N.C., pledged during a news conference that they would do a better job communicating to poor patients that no one will be turned away for an inability to pay, reports The News & Observer. Last month, the president of UNC received a petition signed by 1,100 people, including three local legislators and retired and active faculty, charging that the medical center was making it difficult for uninsured patients to access care and financial aid. Now, in addition to signs, telephone messages, and a hotline offering financial assistance, UNC will provide the uninsured with greater access to primary care and faster referrals to specialists. The CEO also vowed that no overdue account from low-income patients will be turned over to the state Attorney General’s office for collection if the patients qualify for financial assistance. “They did us a great favor by bringing these issues to us and to the public,” said UNC-Chapel Hill Chancellor James Moeser about the petitioners. “We want to respond, and we are responding to them.”

The on-call rates that healthcare organizations are paying to specialists vary considerably by specialty, according to an annual survey of physician on-call pay rates and practices by Sullivan, Cotter and Associates, Inc. Neurosurgeons (median daily stipend of $950), orthopedic surgeons (median daily stipend of $900) and trauma surgeons (median daily stipend of $1,100) receive the highest pay rates. However, some highly compensated specialists are receiving relatively low on-call pay, with healthcare organizations linking pay rates to the likelihood of the specialist being called in to work. To encourage physicians to take call, hospitals are offering creative pay schemes, such as a guaranteed level of payment for services provided, subsidy for malpractice when called in, fee-for-service payments for uninsured patients, hourly rates when called in, and payments based on work relative value units. The survey also highlights an emerging distinction between on-call pay for providing trauma coverage only versus general emergency department coverage. Only a few specialties are likely to be compensated for providing trauma coverage only, while the provision of call pay for ED coverage spans a broader range of physician specialties.

Six of the top 10 employers named by AARP this year as the Best Employers for Workers Over 50 are healthcare organizations. The first-ranked employer is Mercy Health System of Janesville, Wis., a system with 63 facilities, including three hospitals. The not-for-profit organization offers numerous flexible work options, including weekend-only work, nursing “float” options (work at different facilities and/or departments), work-at-home opportunities, “seasonal work” programs that allow staffers to go on leave for extended periods while maintaining benefit eligibility, and on-call assignments that involve a limited number of hours per month that can be expanded and/or contracted based on the employee’s availability.

The remaining top 10 finishers are Lee Memorial Health System of Fort Myers, Fla.; Bon Secours Richmond Health System of Richmond, Va.; Leesburg Regional Medical Center and The Villages Regional Hospital in Leesburg, Fla.; Yale-New Haven Hospital in New Haven, Conn.; Volkswagen of America in Auburn Hills, Mich.; Massachusetts Institute of Technology in Cambridge, Mass.; Oakwood Healthcare System, Inc. in Dearborn, Mich.; First Horizon National Corporation in Memphis, Tenn.; and Hoffmann-La Roche Inc. in Nutley, N.J. AARP also announced four winners of its Bernard E. Nash Award for Innovation, chosen among the 50 best employers, for success in at least one of these areas: flexible work options, recruitment, retiree work opportunities, and training and development. Three of the four winners were healthcare organizations: Bon Secours Richmond Health System of Richmond, Va.; Scripps Health of San Diego; and Lee Memorial Health of Fort Myers, Fla.

Hospital costs could have been as much as $1.35 billion lower in 2004 if all pneumonia, heart bypass, heart attack, and hip and knee replacement patients nationally had received 76% to 100% of a set of widely accepted care processes, according to an analysis by the Premier Inc. healthcare alliance. Wider adoption of quality measures could have also prevented nearly 5,700 deaths, 8,100 complications, 10,000 readmissions, and 750,000 days in the hospital.

The report, Exploring the Nexus of Quality and Cost, is based on data from Premier’s Hospital Quality Incentive Demonstration pay-for-performance project with the Centers for Medicare and Medicaid Services. Through that project, Premier collects a set of 33 quality indicators from more than 260 hospitals across the country. The study findings are positive for all patients in the demonstration project except heart failure patients, who had longer hospital stays and more complications, but fewer readmissions. Premier also found that during the study time period, heart failure patients were more likely to have extensive diagnostic procedures and surgical interventions, both of which would increase costs of care and increase risk for the complications studied but may reflect the most appropriate care for the patient.

“Not only is it possible for hospitals to provide high-quality care efficiently, but in fact those institutions that achieve outstanding quality performance appear to benefit from reduced costs and improved outcomes,” said Peter K. Lindenauer, MD, medical director, clinical and quality informatics for Baystate Health in Springfield, Mass. Added U.S. Representative Sue Myrick, “These new findings point the way toward a payment system that rewards hospitals for delivering higher-quality care. A common sense, outcomes-based system will hopefully be a better one for both patients and hospitals.”

Learn more about reporting on quality indicators at HFMA’s upcoming Revenue Cycle Strategies Conference.

Americans have spent an average of $19,900 on medical care for each of the nearly seven years that have been added to our life expectancy from 1960 through 2000, which represents a good ROI, according to a new study published in the New England Journal of Medicine. Researchers from Harvard and the University of Michigan write, “On average, the increases in medical spending since 1960 have provided reasonable value…. The national focus on the rise in medical spending should be balanced by attention to the health benefits of this increased spending.”

A large portion of the increase in life expectancy from 69.9 years in 1960 to 76.87 years in 2000 is attributed to a decrease in cardiovascular disease, but is also due to fewer deaths from trauma and accidents, pneumonia, influenza, and cancer. The study found that “the average cost per year of life gained in 1960-2000 was approximately $31,600 at 15 years of age, $53,700 at 45 years of age, and $84,700 at 65 years of age. At 65 years of age, costs rose more rapidly than did life expectancy: the cost per year of life gained was $121,000 between 1980 and 1990 and $145,000 between 1990 and 2000.” The study’s authors note that “the spending increases in medical care for the elderly since 1980 are associated with a high cost per year of life gained.”