The Centers for Medicare & Medicaid Services have issued a proposed rule for home health that contains the first refinements to the Medicare home health prospective payment system since 2000 and also contains the annual update to the Medicare home health PPS payment rates of 2.9%. CMS estimates that the refinements and updates in the proposed rule will generate an additional $140 million in payments to home health agencies in CY 2008.
The proposed rule includes a provision to continue to adjust payment for reporting of quality data. If a home health agency does not submit quality data, the 2.9% update would be reduced by 2%, leaving that agency with a 0.9% update. The rule also has a reduction to the 60-day episode payment rate of 2.75 percent per year for three years beginning in CY 2008 to account for what CMS considers to be case-mix increase due to changes in coding practices and documentation (rather than treatment of more resource-intensive patients).
Read the CMS fact sheet comparing the 2008 proposed changes with the current system. Download the proposed rule (311 pages).
The Tennessee Hospital Association has launched a web site called Tennessee Hospitals Inform that provides hospital-specific price and quality information. Users select common services and can generate a report that shows a specific hospital’s volume (total cases and average length of stay) and average commercial payer charges. The data reflect discharges between October 1, 2003, and September 30, 2004. Medicare and Medicaid charges are not available, and users are directed to the CMS Hospital Compare web site for quality information.
“This is only the first step, but Tennesseans can rest assured their hospitals are leading the effort to create common terms, definitions and explanations of complex pricing information,” writes Tennessee Hospital Association CEO Craig A. Becker in the Tennessean.
CMS issued guidance yesterday clarifying the responsibility of hospitals to provide emergency services if they participate in Medicare. The guidance makes it clear that nearly all hospitals--including specialty hospitals and others without emergency departments--must be able to evaluate persons with emergencies, provide initial treatment, and refer or transfer these individuals when appropriate. The guidance does not apply to critical access hospitals, which are subject to separate regulation.
Key requirements include the capability to appraise the emergency situation, provision of initial treatment, and referral when appropriate. The letter clarifies that the Medicare conditions of participation do not permit a hospital to rely on “911 services” as a substitute for the hospital’s own ability to provide these services. (Download the guidance.)
According to a new statistical brief from the Agency for Healthcare Research and Quality, almost half of visits for office-based physician care in 2004 were to physicians in general practice, family practice, internal medicine, or pediatrics--but less than one-third of aggregate expenditures were for visits to these types of physicians. Private insurance paid for nearly half (48.3%) and Medicare paid for just over one-fifth (21.%) of all expenditures for these visits. Out-of-pocket payments by individuals and families was the third largest source of payment category, comprising 14.1% of total expenditures for office-based physician care.
Among the specialty types examined, average expenses per visit were lowest for primary care providers, pediatricians, and psychiatrists, and were highest (at least twice as large) for ophthalmologists, orthopedists, and cardiologists.
Yesterday, Sen. Edward M. Kennedy, chairman of the Senate Health, Education, Pensions and Labor Committee, and Rep. John Dingell, chairman of the House Committee on Energy and Commerce, introduced legislation to extend Medicare to all Americans, reduce costs, and improve quality of care, including more effective use of health IT.
The goal of Medicare for All is to address many of U.S. healthcare’s greatest challenges by providing universal coverage within five years through a three-stage phase-in, benefits equivalent to those available to senators and representatives, choice of enrollment in Medicare or private plans through a plan similar to the one available to federal employees, financing through a payroll tax that will reduce average employer healthcare expenses, and incentives to improve quality and bring IT to medical care.
“We applaud Senators Kennedy and Dingell for focusing attention on providing universal coverage. This issue has been on the back burner of Congress for much too long,” said Richard L. Clarke, DHA, FHFMA, president and CEO of HFMA. “The idea of ‘Medicare for All,’ however, seems to be a ‘one size fits all’ approach to this problem. The issues of providing coverage for the uninsured and underinsured are very complex, and one size may not fit all. We need an approach that keeps the best parts of our pluralistic system of delivery and payment while dealing with the real problems of access for the uninsured and cost.”
To coincide with the fourth anniversary of the enforcement of the Health Insurance Portability and Accountability Act privacy rule, the Department of Health and Human Services announced on April 20 the launch of an enhanced web site that will make it easier for consumers, healthcare providers, and others to get information about how the department enforces health information privacy rights and standards.
The new information describes HHS activities in enforcing the privacy rule, the results of those enforcement activities, extensive guidance for entities who must comply with the rule, and statistics showing which types of complaints are received most frequently and the types of entities most often required to take corrective action as a result of consumer complaints. Other information on the web site covers consumers’ rights to access their health information and control how their personal health information is used and disclosed, as well as guidance on how to submit complaints about possible violations of the law.
In launching the web site, Winston Wilkinson, director of the HHS Office for Civil Rights, noted, “HHS has obtained significant change in the privacy practices of covered entities through its enforcement program. Corrective actions obtained by HHS from these entities have resulted in change that is systemic and affects all the individuals they serve.”
Senate and House leaders have agreed to a one-year moratorium on the Centers for Medicare and Medicaid Services’ proposed rule that would cut $4 billion from Medicaid. The moratorium is to be included in the supplemental spending bill headed for Congress this week. Several healthcare organizations, including the American Hospital Association, sent a letter to congressional leaders urging them to retain language in the bill that would implement a moratorium on the Medicaid proposed rule and protect graduate medical education payments under Medicaid.
“We firmly believe that the proposed rule would undermine the already fragile viability of the nation’s healthcare safety net and reduce or eliminate access to healthcare services for millions of low-income individuals and to the community at large,” says the letter. “Section 2705 would preserve Congress’ authority over major policy changes to the Medicaid program, to be considered in a deliberate and appropriate manner.”
A new Commonwealth Fund Health Care Opinion Leaders survey of leaders in health policy and health care finds that a majority believes the State Children’s Health Insurance Program has been successful in increasing access to health care for low-income children (71%) and in reducing the rate of uninsured, low-income children (65%).
Across the board, the survey respondents believe that coverage should be expanded. In fact, 91% of respondents think SCHIP should be made available to legal immigrant children whose families meet income requirements. Eighty-two percent favor allowing families with higher incomes to buy into SCHIP, and 80% believe that states should be allowed to extend coverage to parents of children covered by SCHIP in states where there is no comprehensive coverage for the uninsured.
Respondents also support provisions that would help provide high-quality health care for all children. Four out of five (81%) were in favor of establishing federal performance standards and outcome measures for all children in SCHIP, and 69% favored measuring and reporting on the frequency and quality of developmental screening.
The Medicare Trustees Report issued April 23 shows that although Medicare’s financial outlook remains troubling, the program’s outlook has improved slightly compared with last year’s estimate. The report notes that Medicare expenditures were $408 billion in 2006, or 3.1 percent of gross domestic product, and are projected to increase to over 11 percent of GDP in 75 years.
The report estimates that Medicare’s Hospital Insurance Trust Fund will be exhausted in 2019, one year later than estimated in last year’s report. This change results from slightly higher projected income and slightly lower projected expenditures than shown in last year’s report.
Nevertheless, costs in all three components of Medicare are expected to increase rapidly. Part B benefit payments have increased by an average of 10.7 percent annually, and Part A payments by an average of 6.0 percent annually, over the past five years. As a result, program costs financed by general revenues rather than by “dedicated revenues” are projected to exceed 45 percent in 2013, causing the trustees to issue a determination of “excess general revenue Medicare funding.”
This determination has now been made in two consecutive years, triggering a “Medicare funding warning,” which requires President Bush to propose legislation to respond to the issue within 15 days following the release of the FY09 budget (to be released in early February 2008). The law requires Congress to consider the president’s proposals on an expedited basis. The Medicare funding warning indicates that the level of federal general revenues required to finance Medicare is an important concern, but it does not signify that program benefits cannot be paid. Download the report.
A new issue brief from Mathematica Policy Research, Inc., describes the role that electronic, easily portable personal health records can play in reducing health disparities. The brief also looks at barriers to PHR adoption for underserved individuals and the implications of widespread use of PHRs.
PHRs differ from provider-maintained clinical electronic health records in that the patient owns the PHR and controls access to it; both providers and patients can enter information into a PHR.
Mathematica’s brief notes that most Americans are unaware of the PHR concept; furthermore, low-income elderly individuals from racial and ethnic minority groups are even less likely than other groups to have heard of a PHR. The study suggests that three primary barriers have limited the diffusion of this technological advance to underserved population groups: the digital divide, low health literacy, and cultural differences.
“Designers and organizations sponsoring the development of PHRs may have to invest in a variety of outreach efforts to overcome consumer mistrust before PHRs are widely accepted,” said Lorenzo Moreno, a senior researcher at Mathematica and the study director.
A recent survey of health insurance plans and providers shows that use of automated systems to verify patient insurance eligibility and benefits information could significantly reduce administrative costs for both.
The survey was conducted by the Council for Affordable Quality Healthcare, a not-for-profit healthcare alliance, as part of its Committee on Operating Rules for Information Exchange (CORE) initiative. CAQH launched CORE to develop operating rules that build on existing standards, such as the Health Insurance Portability and Accountability Act, to make electronic healthcare administration transactions more efficient, predictable, and consistent, regardless of the technology.
By moving from labor-intensive verification methods such as the web, fax, and phone to automated HIPAA transactions, providers may reduce labor costs associated with verifying insurance coverage as much as 50 percent, according to the study findings. Health plans also could achieve significant labor savings, as the study showed that average labor costs per phone call are $1.38 versus $0.00 for an automated transaction. Read the press release.
Calling it a public health imperative, a group of clinical and healthcare policy experts is recommending the development of a comprehensive national health system devoted to preventing the onset of disease. Their newly published report, Embracing Health: Tools and Systems for Health Promotion and Disease Prevention, was prepared jointly by Johns Hopkins and Healthways as a result of the 6th annual Disease Management Outcomes Summit, a meeting of more than 200 physicians, healthcare thought leaders, policymakers, and subject matter experts. The report challenges the status quo of the existing healthcare system by calling for the alignment of incentives to help prevent the onset of chronic disease.
Citing Centers for Disease Control and Prevention statistics, the report gives examples of the health and financial benefits of prevention, such as $3.42 saved in physician hospital costs for every dollar spent on arthritis self-help programs.
“We’ve known for years that prevention works, and this report lays the groundwork for a national system that delivers on the promise of preventive care,” said Fred Brancati, MD, director of general internal medicine, Johns Hopkins Bloomberg School of Public Health. “This year’s consensus report outlines the beginnings of a delivery model for preventive and wellness services that will improve lives and lower healthcare costs.”
In a new report by The Commonwealth Fund, researchers describe a new payment model designed to address the flaws of traditional payment methods such as capitation. The model is meant to improve healthcare quality, lower administrative burden, enhance transparency, and support a patient-centered, consumer-driven environment.
Developed by the not-for-profit Prometheus Payment, the model is based on the “evidence-informed case rate”--a single, risk-adjusted payment given to providers across healthcare settings to care for a patient diagnosed with a specific condition or for a specific procedure. Payment amounts are based on the resources required to provide care as recommended in the best available clinical guidelines.
To further promote quality care, the Prometheus model calls for a portion of the payment to be withheld and distributed according to various performance measures. Read the overview.
As Cover the Uninsured Week approaches, a new Commonwealth Fund report by researchers at the National Women’s Law Center finds that even women with health insurance coverage are more likely than insured men to go without needed health care because of costs. Also, a higher percentage of women than men struggle with medical bills.
The report, Women and Health Coverage: The Affordability Gap, by Elizabeth M. Patchias and Judith G. Waxman of the National Women’s Law Center, finds that 38% of women are struggling with medical bills compared with 29% of men. Also, the high cost of healthcare services and premiums is forcing many women--even women with health insurance--to go without needed care. In fact, 33% of insured women and 68% of uninsured women don’t get the health care they need because they can’t afford it. In contrast, 23% of insured and 49% of uninsured men are avoiding care because of cost. Further, 16% of women are underinsured, versus only 9% of men.
“These findings show that comprehensive healthcare coverage that doesn’t require high out-of-pocket costs is vital to ensuring that women get the care they need to be healthy,” said Sara Collins, assistant vice president for the Program on the Future of Health Insurance at The Commonwealth Fund. “As policymakers consider healthcare reform initiatives, they should consider plan designs that will result in meaningful, affordable, and equitable access to health care for everyone.”
A report published in the April Archives of Surgery has shown that reductions in resident work hours can have a large financial impact, possibly increasing costs by more than $1 million.
Using a computer model with potential future variables, and based on the staffing patterns of the surgery services at Brigham and Women’s Hospital, the study focused on predicting future staffing needs at teaching hospitals. The researchers found that reducing resident duty hours to 60 hours per week would require the hiring of 10 physician assistants at a cost of $1,134,000 over five years--a cost increased by $441,000 if hospitalists would be hired instead, and by another $394,000 if nurse practitioners would be used. However, a 10% improvement in the efficiency of floor care could reduce those expenses by as much as 21%, said the report.
“To simply replace residents with alternative providers requires large amounts of human and fiscal capital,” wrote the researchers. “The potential for simple efficiencies to mitigate some of this expense suggests that traditional patterns of care in teaching hospitals will have to change in response to educational mandates.” Read the abstract.
A Johns Hopkins study of adult patients admitted to The Johns Hopkins Hospital showed that patients who resided in nursing homes or other kinds of long-term care facilities at any time within the past six months were far more likely than other adult patients to carry or be infected with a drug-resistant superbug.
The study, conducted over a four-month period in 2006, was intended to grasp the extent of one of the lesser known hospital superbugs, multidrug-resistant Acinetobacter. More than 1,600 were screened within 24 hours of admission to any one of five intensive care units where previous infections had been recorded.
Results showed that patients who had been in nursing homes, either admitted to Hopkins directly from a long-term care facility or transferred from home or another community hospital, were 12 times more likely than other patients to be carriers of the bacterium. Rates were 22 times higher among those patients who were wheelchair- or bed-bound because their legs were paralyzed.
The findings were presented April 16 at the annual meeting of the Society of Health Care Epidemiology. Read the news release.
A study published in Health Affairs online provides the first empirical evidence concerning how often physicians are stretching federal and state laws--and perhaps breaking them--by referring patients to imaging providers with whom they have a financial relationship.
Study author Jean Mitchell, a professor of public policy at Georgetown University, gathered information on all providers who billed a large California insurer in 2004 for three types of diagnostic imaging scans--magnetic resonance imaging, computed tomography, and positron-emission tomography.
Mitchell found that nearly 33 percent of providers who submitted bills for MRI scans, 22 percent of those who submitted bills for CT scans, and 17 percent of those who submitted bills for PET scans were classified as “self-referral.” More than half of those who billed for MRI and for CT did not own the imaging equipment, but were involved in referral arrangements that might violate federal and state laws. Read the abstract.
In a report to Congress released April 17, HHS Secretary Michael Leavitt announced the results of an electronic prescribing pilot project that support the adoption of new electronic prescribing standards. The pilot project demonstrated that three initial standards are already capable of supporting e-prescribing transactions in Medicare Part D--standard transactions that provide physicians with patients’ formulary and benefit information, medication history, and the fill status of their medications. The report also found that, with some adjustments, e-prescribing can work successfully in long-term care settings.
Some of the initial e-prescribing standards tested by the pilot project were found to have potential but still need further development if they are to be adopted as e-prescribing standards. These include standards used to convey structured patient instructions, a terminology to describe clinical drugs, and messages that convey prior authorization information.
“The findings in this report, along with previously adopted foundation standards, demonstrate that HHS is effectively advancing electronic prescribing, which will continue to help Medicare beneficiaries receive higher quality care,” Secretary Leavitt said. Read the news release.
The Centers for Medicare and Medicaid Services has announced a second comment period regarding the process that hospitals should follow in notifying inpatient Medicare beneficiaries of their discharge appeal rights. CMS has proposed several revisions to the process, including language updates and steps for collecting additional information. Comments are due to the Office of Management and Budget by May 6. Read the Federal Register notice.
CMS has announced proposed revisions to its clinical trial policy, under which Medicare pays for certain items and services for beneficiaries involved in clinical trials. Among the proposed changes are renaming the policy as the Clinical Research Policy, requiring studies to publish their results, and paying for investigational clinical services if they are covered by Medicare outside the trial or are required under coverage with evidence development.
The proposal includes a 30-day comment period; CMS will publish the final national coverage determination no later than 60 days after the end of the comment period.
On April 13, CMS issued its proposed rule for the Medicare inpatient prospective payment system for FY08. The rule includes proposals to:
Payment to all hospitals would increase by an average of 3.3 percent for FY08 when all provisions of the rule are taken into account, while payments to specific hospitals may increase more or less than this amount depending on the patients they serve. CMS is proposing to adopt a high-cost outlier threshold of $23,015, down from $24,475 in FY07, and expects that by better recognizing severity of illness in the DRGs, fewer cases would be paid as outliers. However, the lower outlier threshold is to meet the legal requirement to continue paying between 5 percent and 6 percent of payments as outliers. The proposed rule would continue to phase in a change introduced in FY07 that would better align payment with the costs of care by using estimated hospital costs, rather than list charges, to establish relative weights for the DRGs. Under the proposed rule, hospitals would be paid during 2008 based on a blend of one-third list charge-based weights and two-thirds hospital cost-based weights for the DRGs. In 2009, hospitals would be paid 100 percent based on cost-based DRG weights.
Expanding on the work of the previous two years, the proposed rule would create 745 new severity-adjusted DRGs (Medicare Severity DRGs, or MS-DRGs) to replace the current 538 DRGs. Although projected aggregate spending from the reforms will not change, payments would increase for hospitals serving more severely ill patients and decrease for serving patients who are less severely ill. Consistent with public interest expressed regarding last year’s changes, CMS said, it is proposing to revise the current DRGs so that the system will continue to be based on a nonproprietary case mix system, making it available to the public.
The changes reflect recommendations from the Medicare Payment Advisory Commission. CMS took its initial steps toward implementing the new system when it created new DRGs for cardiac procedures performed in FY06. An additional set of DRGs reflecting severity of illness was introduced for discharges in FY07. By more accurately recognizing the costs of caring for a patient, the new MS-DRGs will further reduce incentives for hospitals to “cherry pick,” the practice of treating only the healthiest and most profitable patients. They also address concerns that specialty hospitals may selectively provide such profitable services. For example, concerns about inappropriate payments for specialty hospitals involved payments for certain elective cardiac admissions. Last year, we estimated that payment reforms for 2006 and 2007 reduced payments to cardiac specialty hospitals by over 5 percent. The reforms for FY08 are estimated to reduce payments an additional 4 percent.
Comments on the proposed rule will be accepted until June 12, 2007, and a final rule, to be effective for discharges on or after Oct. 1, 2007, will be published later in the summer. Read the press release. Download the rule.
CMS has posted answers to 99 frequently asked questions about its contingency plan guidance for healthcare providers and others implementing a National Provider Identifier. The agency announced on April 2 that it is implementing a contingency plan for covered entities that will not meet the May 23, 2007, deadline for compliance with the NPI regulations; those entities that attempted to become NPI compliant can continue to accept legacy identifiers through May 23, 2008.
The FAQs range from “What should health care providers do with their NPIs while waiting for implementation instructions from their health plans?” (Answer: Protect NPIs from unauthorized use) to “Does this mean that providers have an additional 12 months to obtain and begin using NPIs?” (Answer: No; failure to obtain an NPI may be viewed as a violation of the good faith provisions of the contingency guidance.)
Increased patient cost sharing is likely to miss the mark in safely reducing healthcare spending because many physicians do not routinely consider insured patients’ out-of-pocket costs when recommending expensive medical care, according to a study by researchers at the Center for Studying Health System Change and the University of Chicago Hospitals in the April 9 Archives of Internal Medicine.
Although almost 80 percent of physicians consider patient costs when prescribing a generic over a brand-name drug, far fewer consider patient costs when deciding what diagnostic tests to recommend (40.2%) or deciding whether to hospitalize a patient when outpatient treatment is an option (51.2%), the study found.
“Because physicians consider patient costs less frequently in making decisions about more expensive services, it’s likely that increased patient cost sharing will be limited as an effective cost-control tool,” said Hoangmai H. Pham, MD, the study’s lead author and a senior health researcher at HSC.
SeniorCare, the five-year-old Wisconsin program to help elderly patients pay for prescription drugs, will be allowed to expire when its federal waiver ends on June 30, according to The Washington Post. The state was informed of the decision by Centers for Medicare and Medicaid Services acting administrator Leslie Norwalk.
Gov. Jim Doyle and other advocates of the program let their disappointment be known. “This is a sad day for seniors, for taxpayers, and for the country,” said Doyle in a statement. “The Bush Administration is making a terrible mistake. As a result, Wisconsin seniors will pay more and get less coverage, while drug companies make even larger profits. Our state won’t be allowed to negotiate better prices on behalf of our seniors as we do now.”
Norwalk defended the decision, saying that many of the state’s seniors would be able to get comparable coverage under the Medicare Part D drug program, which had not been implemented in 2002 when SeniorCare was created.
A new report from Mathematica Policy Research, Inc., synthesizes findings from the first two years of the Medicare Coordinated Care Demonstration, noting that patients and physicians were generally very satisfied with the program, but few programs had statistically detectable effects on patients’ behavior or use of Medicare services.
The Medicare demonstration is testing whether case management and disease management programs can lower costs and improve patient outcomes and well-being in the Medicare fee-for-service population. Mathematica’s study is examining whether programs meet their goals of reducing costs and improving patient satisfaction and quality of care.
Major findings include the following:* None of the programs significantly improved adherence to diet, medication, exercise, or self-care regimens.* Quality of care was favorably affected by only two of the 15 programs.* Only one program had statistically significant reductions in hospitalizations, and none reduced costs.* Hiring excellent staff and performing certain key functions well (e.g., improving patient education) appear to be more important than a focus on provider performance, service arrangement, or IT in determining whether a program had promising results for reducing costs or improving quality. Download the report.
The Centers for Medicare and Medicaid Services has announced the national launch of Doctor’s Office Quality Information Technology University, or DOQ-IT U, to support health IT in physicians’ offices.
DOQ-IT U is an interactive, web-based tool designed to provide solo and small-to-medium-sized physician practices with education for successful health IT adoption, including lessons on culture change, vendor selection, and operational redesign, along with clinical processes. The e-learning system is available at no charge, and the first modules are available now.
An e-learning platform is being used to provide physicians with a self-paced curriculum and associated tools. Additional features, such as surveys, utilization tracking, and continuing medical education/continuing education unit offering/issuing capabilities will also be included in the near future.
CMS has announced that it will provide funding for health insurance counseling in every state to help beneficiaries get the most from Medicare. Each state will receive a share of $30 million in grant funds so state agencies can help people with Medicare at the local level. Under the State Health Insurance Assistance Programs, CMS provides funding to 54 SHIPs, including all 50 states and the District of Columbia, Puerto Rico, Guam, and the Virgin Islands.
SHIPs are part of Medicare’s outreach efforts to educate beneficiaries about health insurance coverage, including Medigap, Medicare Advantage options, Medicare prescription drug coverage, and long-term care financing. SHIP counselors will continue to provide enrollment assistance to Medicare beneficiaries and offer counseling regarding all Medicare benefits.
A study by Harvard Medical School researchers finds that the increasingly popular high-deductible health plans are discriminatory against women, leaving them with far higher out-of-pocket health bills than men. The researchers also found that adults 45-64, those with any chronic condition (such as asthma or high blood pressure), and children taking even one medication were likely to suffer financially in high-deductible plans. The study, to appear in the July 2007 issue of the Journal of General Internal Medicine, analyzed nationwide health spending data from the Medical Expenditure Panel Survey. The researchers calculated the median annual medical costs of men, women, various age groups, and people with a variety of medical conditions.
The Harvard study is the first to show that most women will be financial losers under high-deductible plans. In 2006, the median health costs for women age 18-64 was about $1,000 higher than for men ($1,844 versus $847). The difference was particularly striking among young adults (18-44), with median expenditures for women being nearly threefold higher than for men ($1,266 versus $463). As expected, middle-aged adults had far higher expenses than did the young, making most of them financial losers in high-deductible plans. For those aged 45-64, the median expenditure was $1,849 for men and $2,871 for women.
“High-deductible plans punish women for having breasts and uteruses,” commented Steffie Woolhandler, MD, associate professor of medicine at Harvard and lead author of the study. “Our costs are higher than men’s because we need Pap tests, cervical cancer vaccine, mammograms, and birth control, and because pregnancy is expensive. When employers raise deductibles, they’re giving women a pay cut. And when politicians offer tax breaks for high-deductible plans, they’re discriminating against women.”
The National Governors Association has adopted a new policy to re-emphasize the importance of congressional reauthorization of the State Children’s Health Insurance Program and immediate funding for states facing shortfalls in the program.
In the policy, governors call on Congress to provide adequate, predictable funding and enhanced flexibilities for states that will allow improvements in health care and coverage for children.
“SCHIP has been a great success across the country, and it provides governors with more flexibility in the design of health benefit packages,” said Vermont Gov. Jim Douglas, NGA Health and Human Services Committee vice chair. “We want to continue creating opportunities for states to improve healthcare access for uninsured children. Reauthorization of SCHIP must reflect the needs of states that manage and finance the program.”
The Health Resources and Services Administration has issued a draft policy information notice to clarify the scope of Federal Tort Claims Act coverage for FTCA-deemed health center program grantees during an emergency.
The draft PIN was developed to describe and clarify the circumstances under which FTCA-deemed health center program grantees are covered under the FTCA as they respond to emergencies. The draft PIN describes mechanisms by which a health center may include emergency services within its scope of project depending on whether the proposed activity is located inside or outside the health center’s service area or areas adjacent to that service area (i.e., neighboring counties, parishes, or other political subdivisions). Comments are due by May 31. Read the draft.
Department of Health and Human Services Secretary Mike Leavitt has announced more than $1.1 billion in funding to help states and territories provide care, medications, and services for low-income individuals living with HIV/AIDS.
The grants are awarded under Part B of Title XXVI of the Public Health Service Act, as amended by the newly enacted Ryan White HIV/AIDS Treatment Modernization Act of 2006. “For more than 15 years, Ryan White programs have been the lifeline for thousands of individuals living with HIV/AIDS,” Secretary Leavitt said. “The new legislation will greatly expand our ability to serve them with more effective care and services.”
The awards include Part B base grants, AIDS Drug Assistance Program grants, and Emerging Community grants. Most of the funds ($775 million) will support state ADAP programs, which provide life-saving medications to HIV/AIDS patients.
The reauthorized Ryan White law requires that Part B grantees spend 75 percent of their grant award on core medical services and that ADAPs maintain a core list of antiretroviral drugs in their formularies.
Sen. Chuck Grassley, R-Iowa, ranking member of the Committee on Finance, has asked the Government Accountability Office to study how not-for-profit hospitals meet the requirement to provide community benefits in exchange for tax-exempt status.
Grassley asked the GAO to identify state standards and hospital guidelines for community benefit; hospital policies for defining--and practices for reporting--uncompensated care, charity care, and bad debt; and levels of executive and board compensation and relationships with for-profit business ventures.
“We need to get a better handle on how nonprofit hospitals are fulfilling their requirement to serve the community in exchange for the generous tax breaks they receive," Grassley wrote to the GAO. “We need to make sure tax-exempt hospitals are providing health care to those in need in keeping with their requirement to serve the public.”
The California Health Facilities Financing Authority approved an application for more than $900 million in tax-exempt bond financing by Sacramento-based Sutter Health that included requirements for charitable contribution from the not-for-profit health system. The bonds are to fund construction of a number of new and replacement healthcare facilities as well as seismic retrofits. The CHFFA board's approval is contingent on finalization of an agreement under which Sutter Health will provide an additional tangible demonstration of its commitment to pass along to consumers savings from the use of tax-exempt financing. Under terms of the agreement, Sutter Health will invest $4 million over six years in technology grants to rural hospitals for electronic health technology system connectivity, including support of lifesaving electronic intensive care unit monitoring systems. Sutter Health will invest another $4.5 million over six years to help support community clinics in northern California. Read the news release.
The Centers for Medicare and Medicaid Services has released the 2008 Medicare Advantage capitation rates and payment policies and changes in Medicare Part D payment.
For Medicare Advantage plans, the aged and disabled capitation rates will increase about 3.5 percent. A statutorily mandated adjustment to the MA rates results in an MA rate of growth that is less than the estimated Medicare growth trend for 2008 of about 4.3 percent.
Changes in Medicare Part D payment for CY08 include extending the Medicare demonstration to limit annual changes in Part D premiums due to beneficiary choice of low-cost plans and the Medicare demonstration to transition enrollment of low-income subsidy beneficiaries.
Download the 2008 Medicare Advantage capitation rates.
Download the 2008 Medicare Part D changes.
Recently, the Financial Accounting Standards Board released proposed FASB Staff Position No. FAS 154-a, Considering the Effects of Prior-Year Misstatements when Quantifying Misstatements in Current-Year Financial Statements. This proposed FSP describes the consideration of the effects of prior-year uncorrected misstatements when quantifying misstatements in current-year financial statements of privately held entities and not-for-profit organizations. Though the FASB Statement No. 154, Accounting Changes and Error Corrections, provides guidance for reporting the correction of an error in previously issued financial statements, it does not specify the appropriate method to quantify the misstatement as a basis for evaluating materiality.
The proposed FSP also extends the guidance in Securities Exchange Commission Staff Accounting Bulletin No. 108 to all other nongovernmental entities that are not subject to the requirements of SAB 108. If finalized, the FSP would be effective for financial statements issued for fiscal years ending after June 15, 2007. Earlier application also would be permitted. The proposed FSP is available for comment until April 30, 2007.
The Centers for Medicare and Medicaid Services has announced the posting of detailed specifications for the 74 measures included in the 2007 Physician Quality Reporting Initiative. The measures apply to services that eligible professionals provide to Medicare beneficiaries in their offices and other settings.
PQRI establishes a financial incentive for physicians and other health practitioners to participate in a voluntary quality reporting program. Eligible professionals who successfully report data for a designated set of quality measures may earn a bonus payment, subject to a cap, of 1.5 percent of total allowed charges for covered Medicare physician fee schedule services provided during the reporting period of July 1, 2007, to Dec. 31, 2007. CMS anticipates a small number of additional specification changes, which may expand the applicability of the measures to additional eligible professionals. Read the overview.
While physicians who have embraced e-prescribing wouldn’t go back to paper prescriptions, they report major barriers to using advanced e-prescribing features that many advocates believe offer the greatest potential to improve the safety and quality of health care, according to a study by Center for Studying Health System Change researchers published online in Health Affairs. The study was based on discussions conducted between November 2005 and March 2006 with 26 organizations--medical practices, health plans, e-prescribing vendors, and pharmacies.
While physicians were positive about the basic features of e-prescribing, products often lacked advanced features, such as the ability to maintain complete patient medication lists, clinical decision support tools, and access to patient-specific formulary data. If the products had those advanced features, physicians often did not use them because of implementation hurdles or their perceptions that the features did not add value, according to lead author Joy M. Grossman, PhD, a senior health researcher at HSC.
Among the hurdles cited by physicians were challenges to maintaining complete patient medication lists, difficulty obtaining accurate patient-specific formulary information, and limited connectivity with pharmacies and mail-order PBMs.
The Centers for Medicare and Medicaid Services announced on April 2 that it is implementing a contingency plan for covered entities (other than small health plans) that will not meet the May 23, 2007, deadline for compliance with the National Provider Identifier regulations under the Health Insurance Portability and Accountability Act. CMS decided to announce this guidance after it became apparent that many covered entities would not be able to fully comply with the NPI standard by May 23. This guidance protects covered entities from enforcement action if they continue to act in good faith to come into compliance.
The enforcement process is complaint driven and will allow covered entities to demonstrate good faith efforts and employ contingency plans. If a complaint is filed against a covered entity, CMS will evaluate the entity’s “good faith efforts” to comply with the standards and will not impose penalties on covered entities that have deployed contingencies to ensure that the smooth flow of payment continues. Each covered entity will determine the specifics of its contingency plan. Contingency plans may not extend beyond May 23, 2008, but entities may elect to end their contingency plans sooner. Medicare plans to announce its own contingency plan shortly. Read the guidance.
CMS has announced plans to implement a new competitive bidding program that will replace the current Medicare fee schedule for certain durable medical equipment, prosthetics, orthotics, and supplies in 10 of the country’s largest Metropolitan Statistical Areas (excluding the New York, Los Angeles, and Chicago MSAs). It builds upon the success of competitive bidding demonstration projects in Texas and Florida, which produced significant cost savings. The program will be expanded into 70 additional MSAs in 2009 and into additional areas after 2009.
The program, mandated by Congress in the Medicare Prescription Drug, Improvement, and Modernization Act, will apply initially to 10 categories of medical equipment and supplies. CMS expects to begin the bidding process in late April, to announce winning suppliers in early December, and to have payments under the program go into effect in April 2008.
When fully implemented in 2010, the program is projected to save $1 billion annually.
The Centers for Medicare and Medicaid Services has published its new conditions of participation for transplant centers. The final rule, effective June 28, 2007, announces new requirements to which hospitals must conform when applying for Medicare certification of their renal and extra-renal transplant center programs.
Effective immediately, an extra-renal transplant center that seeks to participate in and receive payment from the Medicare program and has not yet filed an application for Medicare payment approval is required to apply under the criteria included in the final rule. CMS will no longer accept extra-renal transplant center applications under the National Coverage Decisions process (because there may be insufficient time to approve the application prior to the effective date of the final rule). However, it will continue processing applications already in progress. CMS will also continue to accept letter applications from pediatric centers that seek Medicare payment approval based on their association with a Medicare-approved adult transplant center, provided that those applications are received by June 22, 2007. Download the final rule.
Although industry surveys indicate that employers anticipate strong growth in consumer-driven healthcare plans, low selection rates remain a significant stumbling block among employees offered such plans as one option among many, according to a report released by The Conference Board, an international business research organization. According to the report, one reason consumers shy away from such plans is the lack of a coherent message about participating in them.
“If employees find the information they’re offered about CDHC plans too confusing, the programs will fail,” says Jon Gabel, author of the report and senior fellow at the National Opinion Research Center. “Employees are unlikely to switch to plans that they don’t understand.”
To communicate effectively with employees and, employers and health plans should present information in a format that minimizes the amount of analysis required by employees. Repeated face-to-face meetings as well as improved quality of information available to employees also will help increase enrollment in CDHC plans, said the report.
Despite a recent Census Bureau report stating that previous estimates overstated the number of insured Americans in 2005, the uninsured population continues to grow rapidly and is at an unacceptable level, says Commonwealth Fund president Karen Davis. The Commonwealth Fund is a private foundation that aims to promote a high-performing healthcare system that achieves better access to care. The revised Census Bureau figures estimate that 1.8 million fewer people were uninsured in 2005 than previously estimated.
“Few could argue that 44.8 million people living without insurance is an acceptable number,” said Davis in a statement, “particularly in a nation that spends nearly twice as much per capita on health care as any other country. We know that people living without healthcare coverage are less likely to get prompt access to doctors, to receive appropriate preventive care, or to be able to manage chronic conditions. They also face mounting medical debt.”
Davis also points out that in addition to the high number of uninsured, 16 million people are underinsured. Read the Census Bureau report.
Although consumer tolerance for inaccurate physician performance ratings varies widely, more than one-third of Americans believe such ratings should be no more than 5 percent inaccurate, according to a national study released by the Center for Studying Health System Change.
"Consumers differ a huge amount on the level of inaccuracy they are willing to tolerate in physician performance ratings," said Matthew Davis, MD, MAPP, study co-author. "Despite the variation, consumers' willingness to tolerate inaccurate ratings likely is much higher than physicians', possibly because consumers see flawed information as preferable to no information at all, while physicians are justifiably concerned that inaccurate ratings will jeopardize their reputations and livelihoods," Davis said.
Davis believes that the error in current reporting likely is greater than 5 percent and asks whether health plans should publicly report the level of rating inaccuracy in their performance measurement systems.
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