HFMA NEWS

As healthcare quality and patient safety concerns increase, the latest Commonwealth Fund Health Care Opinion Leaders survey finds leaders united behind several key reform measures: more than half (56 percent) support the creation of a new public-private entity to coordinate quality efforts and form a national quality agenda; 95 percent believe that fundamental payment reform is needed; and three-fourths (73 percent) say that greater organization and integration of provider care is necessary for improved quality and efficiency.

The survey report, Health Care Opinion Leaders’ Views on the Quality and Safety of Health Care in the United States, also found consensus for specific strategies: 90 percent of respondents said use of health IT should be mandated for Medicare providers within 5 or 10 years, 51 percent support financial incentives for physicians and hospitals to provide high-quality care, and 59 percent of respondents support public reporting of providers’ performance on quality measures. Only 7 percent felt that the current Patient Safety and Quality Improvement Act was sufficient to guarantee patient safety, and three-fourths felt information about a physicians’ or hospitals’ patient safety record should not be confidential. Also, 73 percent support Medicare reform that would pay medical homes for care coordination. Read the data brief.

To obtain a more complete depiction of the proportionality of physician investment in specialty hospitals, the Department of Health and Human Services (HHS) has created a voluntary Deficit Reduction Act survey instrument that was sent to both specialty and competitor hospitals. In its Final Report to the Congress and Strategic and Implementing Plan released in August 2006, HHS stated that it would require all hospitals to provide information to the Centers for Medicare and Medicaid Services (CMS) on a periodic basis concerning their investment and compensation relationships with physicians.

HHS/CMS will initially select 500 hospitals that will be required to report this financial information. In September 2007, CMS will send those hospitals the mandatory Disclosure of Financial Relationships Report; hospital respondents then will have 45 days to submit a completed hard copy of the report to CMS. Read the announcement.

As Massachusetts’ landmark effort to reach nearly universal health coverage continues, affordability of coverage remains a key concern for individuals and small employers, according to a study released July 26 by the Center for Studying Health System Change (HSC).

The study’s findings are detailed in a new HSC issue brief, Massachusetts Health Reform: Employers, Lower-Wage Workers and Universal Coverage. The study was based on interviews with about 25 market observers in January 2007, including representatives of employer groups, state agencies, health plans, providers, advocates, and other healthcare leaders knowledgeable about the reform.

All employers--except firms with fewer than 11 workers--face new requirements under the 2006 law, including paying a $295 annual fee if they do not make a “fair and reasonable” contribution to the cost of workers’ coverage. Although most market observers agreed that the primary goal of the reform is to improve access to health insurance, they contended that its ultimate success depends on affordability--in the short term as well as the long term. If affordable coverage is not available, it is unlikely that small employers on the cusp of offering insurance to their workers will be motivated to do so, according to the study. Instead, employers are more likely to pay the $295 annual fee rather than incur the greater costs of offering insurance.

The July 2007 revision of Government Auditing Standards has been issued. Commonly referred to as the “Yellow Book,” the standards, which were first published in 1972, cover federal entities and those organizations receiving federal funds.

The July 2007 revision of Government Auditing Standards supersedes the 2003 revision, represents the completed 2007 revision of Government Auditing Standards, and is the version that should be used by government auditors until further updates and revisions are made.

The July 2007 revision should be used in conjunction with the Government Auditing Standards: Answers to Independence Questions (GAO-02-870G, July 2002) and Government Auditing Standards: Guidance on GAGAS Requirements for Continuing Professional Education (GAO-05-568G, April 2005).

If Medicaid and the State Children’s Health Insurance Program (SCHIP) simply retained all children who are enrolled and have no alternative coverage in a given year, the number of uninsured children in the United States would fall by one-third, according to research published July 26 on the Health Affairs web site.

The new study, by Benjamin Sommers of Brigham and Women’s Hospital in Boston, finds that one-third of all children who were uninsured in 2006 had lost Medicaid or SCHIP coverage in the previous year. Also, the percentage of uninsured children who had lost public coverage in the previous year rose from 20 percent in 2001 to 33 percent in 2006, and the percentage of uninsured children eligible for these programs who had lost coverage in the previous year rose from 27 percent in 2001 to 42 percent in 2006.

“Unfortunately, the trend of increasing dropout is likely to accelerate because of the new 2006 federal requirement of increased citizenship documentation for Medicaid renewal,” which already appears to be causing decreases in public coverage, says Sommers. He calls for simplifying the Medicaid and SCHIP renewal processes as much as possible, and perhaps integrating Medicaid and SCHIP in states that currently run them as two separate programs. Read the abstract.

Several health reform bills before Congress could lead to significant improvements in healthcare quality and efficiency, but they fall short of an overarching, coordinated plan that would create a better overall healthcare system for the country, according to an analysis released July 26 by the Commonwealth Fund. “Taken as a whole, they leave important gaps that will prevent this country from providing accessible, high-quality, efficient care to all,” said Karen Davis, president of The Commonwealth Fund, and lead author of the study.

The report, An Analysis of Leading Congressional Health Care Bills, 2005–2007: Part II, Quality and Efficiency, is the second installment in a two-part series assessing major healthcare proposals before Congress. The analysis indicates that bills seeking to change Medicare’s payment structure hold the most promise for healthcare savings and quality improvement.

Among the recommendations by Davis and colleagues are a coordinated policy strategy with national goals to guide improvement efforts, fundamental payment reform that moves away from the current fee-for-service model, and reorienting the healthcare system to encourage prevention, early primary care, and chronic disease management, including patient designation of a patient-centered primary care home. Read the executive summary.

Massachusetts continues to experience physician shortages in primary care, psychiatry, and six other specialties that are adversely affecting patient access to care, according to the latest physician workforce study released July 24 by the Massachusetts Medical Society.

The society’s 2007 Physician Workforce Study found physician shortages in primary care (family practice and internal medicine), psychiatry, and vascular surgery for the second consecutive year. The study also found that the most critical scarcity facing community hospitals is primary care physicians: 54 percent of community hospitals report shortages in internal medicine, and 43 percent report shortages in family practice.

 “Massachusetts may be leading the nation in healthcare reform,” said B. Dale Magee, MD, president of the society, “but we’re falling behind in a critical aspect of patient care, and that’s the supply of physicians. . . . Adequate physician supply is essential to the success of healthcare reform, and our latest analysis raises a host of concerns.” Read the executive summary.

With health care emerging as the top domestic issue in the 2008 presidential election, the Kaiser Family Foundation in mid-July launched a new web site that will provide analysis of health policy issues, regular public opinion surveys, and campaign news and video coverage. Analysis of health policy issues, summaries of health reform proposals, and interviews with candidates and other key players in the health reform debate are among the material to be featured on the web site, which is free and contains no advertising.

Since March, Kaiser’s tracking poll on health and the 2008 election has found that health care is a top domestic issue that the public wants presidential candidates to address, trailing only Iraq on the public’s overall priority list. Meanwhile, 41 percent of adults are personally worried about health care or insurance costs, topping concerns about paying their rent or mortgage, being a victim of a terrorist attack or a violent crime, losing their job, or losing money in the stock market.

“For the first time since the early 1990s, there is a buzz in the air about the potential for a major debate about the future direction of our healthcare system,” said Kaiser president and CEO Drew E. Altman, “and how the issue plays in this presidential election will frame that debate.”

A large majority of American voters (91 percent) strongly supports extending State Children’s Health Insurance Program (SCHIP) coverage to more uninsured children, according to a nationwide poll released July 23 by Georgetown University’s Center for Children and Families. Voter support for SCHIP crosses party lines, according to the poll results.

The bipartisan survey showed that nearly two-thirds of the 1,002 voters surveyed favor continuing to allow states to decide the income levels of the children who can be covered by SCHIP, including majorities of Republicans (61 percent), Independents (64 percent), and Democrats (68 percent). Also, 84 percent of respondents favor allowing low-income, uninsured working parents of children in SCHIP to be covered by the program when they do not have coverage through their jobs, including 75 percent of Republicans, 87 percent of Independents, and 88 percent of Democrats. Read the report.

Ninety-four percent of active workers employed by public employers are currently on track to be eligible for retiree health benefits after they retire and become eligible for Medicare, compared with 58 percent at midsize private firms, according to the Commonwealth Fund’s newly released Survey of Retiree Health Benefits, 2005: A Chartbook.

Among other survey findings:
• The percentage of U.S. firms offering retiree health benefits has remained constant between 2000 and 2006. Offer rates for large firms (200+ workers) are far higher than those for small firms (3-199 workers), at 35 percent versus 9 percent.
• Monthly premiums for Medicare-age retirees averaged $318 for midsize private firms and $320 for public employers. These premiums increased 9 percent for midsize private firms from 2004 to 2005, and 5 percent for public employers.
• Medicare-age retirees from midsize private firms contributed an average of $76 monthly toward premiums, compared with $116 for retirees from public employers.

Expanding the State Children’s Health Insurance Program (SCHIP) as well as reducing payments to the Medicare Advantage program and reversing a scheduled 10 percent cut to payments to physicians in 2008 are among the elements included in a draft bill to be unveiled by House Democrats this week. According to The New York Times, Democrats hope to push the bill through Congress next week.

An earlier bipartisan agreement in the Senate to expand SCHIP calls for an additional $35 billion for the program; however, the House bill would demand $50 billion. Both bills call for funding to come partially from an increase in the federal tobacco tax.

The nation’s governors also weighed in on the topic on Sunday at their annual meeting in Traverse City, Mich. In a letter to Senate and Congressional leaders, the National Governors Association called for reauthorization of SCHIP, stating that “urgent action is needed” to ensure the continued success of the program. “For many reasons,” states the letter, “defaulting to a series of temporary extensions of the program would be untenable for states and the millions of children who rely upon the program.”

Using the preliminary FY06 Medicare Provider Analysis and Review (MedPAR) file that was used in promulgating the inpatient prospective payment system (IPPS) proposed regulations for FY08, an analysis by American Hospital Directory showed that total outlier payments will be declining each year--even though statutory provisions call for 5 percent to 6 percent of total payments to be paid for outliers. According to the analysis, the outlier percentage was 4.6 percent in FY06, and is predicted to fall to 3.1 percent for FY08.

Although this projection does not account for inflation in charges and changes in cost-to-charge ratios, it nevertheless indicates that proposed regulations may significantly underpay hospitals for treating unusually costly cases. Each 1 percent of underpayment represents a national shortfall of more than $1 billion.

American Hospital Directory performed its analysis using FY06 Medicare inpatient claims with IPPS payment computed for FY06-08 according to respective regulations. More than 3,000 short-term acute care hospitals were included in the analysis, representing nearly $110 billion in IPPS payments per year. Read the announcement.

The Internal Revenue Service released an interim report July 19 summarizing responses from almost 500 tax-exempt hospitals to a May 2006 questionnaire about how they provide and report benefits to the community. The IRS is still in the process of analyzing the reported data.

According to the report, nearly all hospitals reported that they provided various types of community benefit that were the subject of the questionnaire. Although 97 percent of responding hospitals said they have a written uncompensated care policy, no uniform definition of what constitutes “uncompensated care” emerged from the responses. There also appear to be significant differences in the way other components of community benefit are reported.

The IRS’s hospital project team recommended developing a separate Form 990 schedule for hospitals as a way to address the lack of uniformity in definitions and reporting. A new Schedule H, Hospitals, is part of the recently released discussion draft of that form. Read the announcement.

The findings published in a new Congressional Budget Office background paper, The Impact of Medicare’s Payment Rates on the Volume of Services Provided by Skilled Nursing Facilities, imply that an increase in payment rates will lead to a somewhat larger percentage increase in Medicare’s spending on skilled nursing facilities.

The report details how the volume of Medicare-covered skilled nursing facility (SNF) services adjusts in response to changes in Medicare’s SNF payment rates. The payment rate equals the payment received by a medical provider in exchange for providing a single unit of medical service; that rate comprises payments both from Medicare and from the patient. Although Medicare’s payment rates for SNFs have been changed repeatedly over the past decade, beneficiaries’ coinsurance for SNF care and other factors that affect the demand for that care have remained relatively stable. The volume response measured in this paper, therefore, reflects mainly a supply-driven phenomenon.

On June 29, the Governmental Accounting Standards Board (GASB) announced that it has proposed new standards for how state and local governments should report their involvement in derivative instruments. The proposal is contained in an exposure draft, Accounting and Financial Reporting for Derivative Instruments. The proposal would require that the fair value of all derivatives be reported as assets or liabilities in financial statements.

GASB is also looking for governmental entities that would be willing to participate in field testing of this proposed derivatives standard. Among GASB healthcare organizations, those that follow the “par. 7 option” under GASB 20 currently account for derivatives under Financial Accounting Standards Board (FASB) statement 133 like private sector entities, while those that follow the “par. 6” option do not report derivatives on their balance sheet at all. GASB is interested in evaluating the impact on entities that would be required to convert from FASB statement 133 to the new GASB standard (i.e., the par. 7 entities) as well as those who would be putting derivatives on their balance sheets for the first time (i.e., the par. 6 entities). There may be some practical benefits to participating in the field test, as the final standard is scheduled for issuance in the second quarter of 2008. Download the exposure draft.

Christopher Cox, the Securities and Exchange Commission (SEC) chairman, on Wednesday called for Congress to set new disclosure rules for municipal borrowers to improve the information investors receive. Currently, governments, schools, and hospitals do not have to file registration statements with the SEC for bond offerings as public corporations must do. Possible implications are that healthcare organizations with municipal bonds could eventually come under some direct SEC regulations. Cox also said that lawmakers should increase the standard-setting authority of the Governmental Accounting Standards Board by making its rules mandatory and giving it an independent source of money. Read Cox’s speech.

Department of Health and Human Services (HHS) Secretary Mike Leavitt announced July 17 that the department has provided another $896.7 million to the states, territories, and four metropolitan areas to improve and sustain their ability to respond to public health emergencies. The funding is in addition to the $430 million made available late last month.

The Centers for Disease Control and Prevention (CDC) is coordinating the funding to be used for preparedness and response to all-hazards public health emergencies including terrorism, pandemic influenza, and other naturally occurring public health emergencies.

The funding includes $5.4 million for states bordering Mexico and Canada (including the Great Lakes states) for the development and implementation of a program to provide effective detection, investigation, and reporting of urgent infectious disease cases in the three nations’ shared border regions.

The Centers for Medicare and Medicaid Services (CMS) will host a special open-door forum on July 26 on plans for implementing data collection for the post-acute care payment reform demonstration (PAC-PRD). The demonstration will collect data in acute care hospitals and four types of PAC providers: long term care hospitals (LTCHs), inpatient rehabilitation facilities (IRFs), skilled nursing facilities (SNFs), and home health agencies (HHAs).

The resulting data will be analyzed to predict cost and resource use based on patient assessment information to develop PAC payment reform options. The results of the demonstration may influence how Medicare pays for care across PAC settings and how patient assessments occur at hospital discharge and through subsequent PAC settings.

The forum will focus on issues of how data will be collected and how facilities may become involved in this project. To participate by phone, dial 800-837-1935 by 2:00 p.m. EDT on July 26 and reference conference ID 9438143. The forum will be held 2:30-4:30 p.m. EDT.

An audio recording of this forum will be posted to the special open-door forum web site and will be accessible for downloading beginning July 31, 2007. Read the announcement.

On Aug. 2, 2007, CMS will hold a roundtable and Q&A session on common billing errors and the National Provider Identifier for fee-for-service Medicare providers. The session will be held from 2:00 to 3:30 p.m. EDT. It is recommended that those who wish to attend review a recent MLN Matters article on this topic prior to participating in this call.

To receive the call-in information, you must register by 2:00 p.m. EDT on Aug. 1 for the call. (If you are planning to sit in with a group, only one person needs to register to receive the call-in information.) This registration is solely to reserve a phone line, not to allow participation.

A replay option will be available shortly following the end of the call, from 5:30 p.m. EDT Aug. 2 until 11:59 p.m. EDT Aug. 7, 2007. The call-in number for the replay is (800) 642-1687 and the passcode is 7025327.

Catholic Healthcare West, California’s largest not-for-profit hospital provider, announced in late June that it has launched a series of advertisements advocating healthcare reform in California and urging lawmakers to pass healthcare legislation this year.

“We view access to health care as a fundamental human right,” said Lloyd Dean, president and CEO of the San Francisco-based hospital system. “At the state level, we are beginning to see real momentum toward an improvement, and we want to do our part to help make universal access a reality for Californians.”

CHW will run a series of print advertisements through mid-September in select national and California publications. The full-page ads will appear in The Wall Street Journal, the New York Times, the Sacramento Bee, and the San Francisco Chronicle. Additionally, the ads will run in Newsweek, Time, and US News & World Report magazines. View the first advertisement.

Few financial executives know who will fill their shoes one day, but most have no plans for leaving, a new survey shows. The majority (83 percent) of CFOs polled said they have not identified a successor for their positions. Seventy-four percent of respondents cited having no plans to leave their present companies in the near future as the primary reason.

The survey, developed by Robert Half Management Resources, was conducted by an independent research firm and includes responses from 1,400 CFOs at U.S. companies with 20 or more employees.

“Executives should plan for all contingencies, even if they have every intention of staying in their current role,” said Paul McDonald, executive director of Robert Half Management Resources. He noted that it is never too early to identify and prepare promising candidates for leadership positions. “Advance planning ensures a smoother transition when passing on the management reins.” Read the press release.

The Centers for Medicare and Medicaid Services (CMS) issued a final rule yesterday revising the payment system for services furnished to people with Medicare in ambulatory surgical centers (ASCs). The system was revised to better align payments for similar services furnished in a hospital outpatient department (HOPD) or a physician’s office. CMS also issued a proposed rule that would update Medicare payment for services in HOPDs under the outpatient prospective payment system (OPPS) and would set new payment rates for ASCs under the revised system effective for services in CY08.

The ASC final rule expands beneficiary access to surgical procedures in ASCs and implements steps to make ASC payments more accurate. CMS expects to make payments of almost $3 billion in CY08 to the approximately 4,600 ASCs that participate in Medicare.

The final rule also adds about 790 procedures for ASC payment beginning in CY08. The proposed OPPS/ASC rule would add several additional procedures, which would result in approximately 3,300 covered surgical procedures under the revised ASC payment system.

The proposed rule includes a 3.3 percent inflation update in Medicare payment rates for services paid under the OPPS for CY08. CMS projects that hospitals would receive $34.9 billion in CY08 for outpatient services furnished to Medicare beneficiaries under the proposed rule.

Comments on the proposed rule will be accepted until Sept. 14.

At least 150 million people worldwide suffer financial catastrophe each year and 100 million are pushed under the poverty level simply because they need to pay for health services, according to new World Health Organization (WHO) research published July 16 in the July-August issue of Health Affairs, a thematic volume on global health that focuses particularly on financing questions.

The WHO study encompasses 89 countries covering 89 percent of the world’s population, making possible the first global estimates of the extent of catastrophic spending and associated impoverishment. Countries that fund their healthcare systems using some form of prepayment, such as taxes or insurance, were less likely than countries that fund their healthcare systems through out-of-pocket payments to have a population that suffered financial catastrophe, WHO researchers found. When prepayment accounts for more than 80 percent of all health payments, the incidence of financial catastrophe is less than 1 percent. Read the abstract.

The IRS announced July 12 that it began mailing educational letters this month to more than 650,000 small tax-exempt organizations that may be required to submit a new annual notice, Form 990-N, “Electronic Notice (e-Postcard) for Tax-Exempt Organizations Not Required to File Form 990 or 990-EZ.” IRS expects to mail the letters over a period of several months, finishing in December 2007.

With the enactment of the Pension Protection Act of 2006, most small tax-exempt organizations are now required to submit the e-postcard. Previously, tax-exempt organizations with gross receipts of $25,000 or less were not required to submit information returns. Under the new law, any organization that fails to meet its annual reporting requirement for three consecutive years automatically loses its tax-exempt status. Read the press release.

The Medicare Payment Advisory Commission (MedPAC) has released its 2007 Data Book, a compilation of information that MedPAC provides in its publications and that also combines data from other sources, such as the Centers for Medicare and Medicaid Services. The format is condensed into tables and figures with brief discussion. Web site links to MedPAC publications or other web sites are included on a “web links” page at the end of each section.

The book presents data on Medicare spending, percent of beneficiaries using the service, number of providers, volume, length of stay, and margins, if applicable. In addition, it covers the Medicare Advantage program and prescription drug coverage for Medicare beneficiaries, including Part D. It also provides information on Medicare beneficiary demographics, dual-eligible beneficiaries, quality and access in the Medicare program, and Medicare beneficiary and other payer liability.

In order for providers’ updates, changes, and deletions to be reflected in the initial downloadable file of National Plan and Provider Enumeration System (NPPES) data, providers should ensure that those changes are submitted to NPPES no later than July 16, 2007. Updates, changes, and deletions that are submitted after July 16 will be reflected in the appropriate monthly update file, downloadable from the Internet. Updates, changes, and deletions will be reflected in the National Provider Identifier (NPI) registry at the same time they are reflected in NPPES.

For more information, read the “National Plan and Provider Enumeration System (NPPES) Data Elements: Data Dissemination--Information for Providers.”

The Centers for Medicare and Medicaid Services proposed 2008 payment changes for physician services, announced last week, have been published in the Federal Register. As reported in HFMA News, the proposed rule would revise payment rates and policies under the Medicare physician fee schedule and includes an estimated update to the physician fee schedule for 2008 of -9.9 percent. Download the proposed rule.

The use of electronic health records (EHRs) is not necessarily related to the quality of ambulatory care, according to a report published in the July 9 issue of Archives of Internal Medicine.

In a restrospective analysis of approximately 1.8 billion ambulatory visits in the 2003 and 2004 National Ambulatory Medical Care Survey, researchers assessed the association between EHR use and 17 ambulatory quality indicators, including medical management of common diseases, recommended antibiotic prescribing, preventive counseling, screening tests, and avoiding potentially inappropriate medication prescribing in elderly patients. Performance on these indicators was defined as the percentage of applicable visits in which patients received recommended care.

EHRs were used in 18 percent of the visits analyzed. According to the report, for 14 of the 17 quality indicators, there was no significant difference in performance between visits with versus without EHR use. For two of the indicators, visits to medical practices using EHRs had significantly better performance--avoiding benzodiazepine use for patients with depression, and avoiding routine urinalysis during general medical examinations. However, for one indicator (statin prescribing to patients with hypercholesterolemia), visits showed significantly worse quality. Read the abstract.

The Centers for Medicare and Medicaid Services (CMS) announced July 10 its revised clinical trial policy national coverage determination (NCD), which addresses Medicare coverage when beneficiaries participate in clinical research trials. The decision became effective July 9.

In this revised policy, CMS may determine that an item or service is reasonable and necessary only in a clinical trial--an option that CMS has previously defined as Coverage with Evidence Development.

In addition to the final decision on the current reconsideration of the clinical trial policy, CMS is also announcing that it plans to reopen the Clinical Trial Policy NCD and post a new proposed decision memorandum for a 30-day public comment period. The memorandum will build on the extensive public comments already received.

Moody’s Investors Service has announced that, for the second quarter of 2007, downgrades outpaced upgrades by a ratio of 1.3 to 1--relatively consistent with historical trends over the past three years. And through the first half of 2007, downgrades outpace upgrades 1.4 to 1.

According to the service, the main drivers of the downgrades in the second quarter were continued deterioration in operating performance and liquidity. Four of the downgraded providers added a sizeable amount of debt after experiencing poor financial performance as a result of operating in difficult service areas that were either highly competitive or had a high Medicaid population. Also, the majority of the downgraded providers in the second quarter of 2007 were in the mid to high investment grade category.

For more information, contact Moody’s at 212-553-4431.

The tale of one Seattle medical center’s quest to improve care and reduce costs illustrates the obstacles physicians face in practicing more efficiently under a fee-for-service payment system that overpays for some medical services and underpays for others, according to a study by researchers at the Center for Studying Health System Change (HSC) published July 10 as a web exclusive in Health Affairs.

Faced with exclusion of several physician specialties from Aetna’s high-performance network, Virginia Mason officials worked with the insurer and four large Seattle employers--Costco, Starbucks, King County, and Nordstrom--to redesign care delivery for four common conditions: uncomplicated lower back pain, gastroesophageal reflux disease, migraine headaches, and cardiac arrhythmias. Adapting aspects of the Toyota Production System to a healthcare setting, VMMC mapped out how to improve efficiency per episode of care for each of the conditions, according to the article.

“The good news is that Virginia Mason identified ways to streamline and improve care; the bad news is that the medical center’s bottom line may take a significant financial hit as a result,” said Hoangmai H. Pham, MD, an HSC senior health researcher and lead author of the study.

In an accompanying HSC issue brief, Paul Ginsburg, PhD, HSC president, points out that “most efforts to improve efficiency for a specific medical condition usually reduce the number of services per patient that can be billed, posing financial challenges for providers. These challenges are often magnified by the current fee-for-service payment structure, where some services are highly profitable and others are unprofitable.” Read the abstract.

Many U.S. employees don’t understand how their healthcare coverage works and admit that their familiarity with the most basic healthcare vocabulary needs improvement, according to a survey of nearly 2,100 covered workers by Watson Wyatt, a global consulting firm.

According to the survey report, Employee Perspectives on Health Care: Voice of the Consumer, Watson Wyatt found that a top challenge for 43 percent of workers is understanding what their healthcare plan covers. Moreover, less than half are comfortable explaining common health benefit terms, such as co-pay or deductible, to a friend or coworker. And fewer than one in four feels comfortable describing health savings accounts, coinsurance, and terms such as formulary and center of excellence.

“It’s hard for employers to ask employees to take more responsibility for their health care when they are not speaking the same language,” said Kathryn Yates, global director of communication consulting at Watson Wyatt. “Helping employees improve their healthcare literacy and learn the terminology can make or break a company’s healthcare efforts overall.”

In the July 5 Federal Register, the Centers for Medicare and Medicaid (CMS) published a notice inviting rural inpatient hospitals to apply to participate in the Medicare Hospital Gainsharing Demonstration. The program is intended to improve the quality and efficiency of care provided to Medicare beneficiaries and to improve operational and financial hospital performance with the sharing of remuneration between hospitals and physicians in six projects, each project consisting of one hospital.

Because two of the demonstration projects must be rural, and because CMS received a limited response from rural hospitals to the original solicitation in September 2006, it is reissuing the solicitation for proposals from rural hospitals only. Rural hospitals that submitted proposals previously are eligible to reapply. Read the notice.

There are more physicians and nurses today than ever before, but they are not being trained, distributed, or deployed efficiently, according to PricewaterhouseCoopers’ Health Research Institute in an analysis released July 9 of the changing medical workforce and how it will affect the quality and delivery of health care in coming years. According to PwC, a majority of physicians and nurses is nearing retirement just as the American public will need them most, and healthcare organizations are left with a diminishing pipeline of primary care physicians, new competition for nurses, and a generation of young clinicians who have different expectations about work-life balance than their predecessors.

The federal government is projecting a shortage of 1 million nurses and 24,000 physicians in the United States by 2020, but the PwC report What Works: Healing the Healthcare Staffing Shortage asserts that these projections are built around a broken, dysfunctional medical workforce model.

The report calls for major changes in the way physicians and nurses are trained; formation of public-private partnerships to promote and redeploy physician and nursing programs; and new thinking about how, where, and by whom health care will be delivered in the future.

A new method of setting limits on what the federal government will reimburse state Medicaid agencies for prescription drug payments--aimed at reining in inflated drug product payments--was announced July 6 in a final rule put on display at the Federal Register.

The new regulation is expected to save states and the federal government $8.4 billion over the next five years. Even with this change, the Medicaid program is still expected to spend $140 billion for drugs over the same time period (FY07-11).

Earlier efforts to stem growth in Medicaid drug costs were unsuccessful. Prior to the Deficit Reduction Act (DRA), many drug companies reported prices to the commercial pricing compendia that bore little relationship to the drug’s cost. Actual drug costs were considered proprietary information that was kept secret, and CMS was prohibited by law from disclosing average manufacturers price (AMP).

The DRA also requires that for the first time, AMPs be publicly reported on the Internet. States will now be able to use actual AMP information as the basis for setting drug reimbursement. Read the press release.

Editorial response to Michael Moore’s movie "SiCKO," which opened in the United States June 29, acknowledges the health system problems identified but questions the proposed solution.

The single-payer system advocated in the movie “is hardly novel and is certainly worth consideration,” writes Dan Mitchell in The New York Times (“What’s Lacking in ‘SiCKO,’” July 7). “[B]ut in comparing the American system with single-payer plans of other countries, Mr. Moore left out the trade-offs, characterizing those countries as health care paradises.” An editorial in New York’s Newsday concurs, saying, “Had Moore been more honest and evenhanded in contrasting the two systems, his film would have been more convincing. Instead, he preached to the already converted” (“The ‘SiCKO’ Prescription,” July 7).

Although Moore’s movie seems intended to influence the healthcare debate during the presidential campaign, that outcome is unlikely, says Renee Loth in The Boston Globe, because “the Democratic presidential candidates are just offering variations on ways to expand health insurance to cover more Americans,” while Moore’s film points out it is the system of private insurance “that restricts care to maximize profits” that is ruining people’s lives (“Muckraker for the YouTube Age,” July 6).

A more realistic solution may come from a combined public-private approach to healthcare coverage, suggests Sarah Dine in a post about “SiCKO” on the Health Affairs blog (“Reform: Musings on SiCKO, July 4th, and Visions of America,” July 3). Dine states that almost half of Americans already are covered by some form of government-participating health insurance, and she says that Congress’ decision this summer whether to maintain support for the State Children’s Health Insurance Program will suggest whether the government will support “making health insurance available in a uniquely American mix of federal, state, and private sources.”

The exemption for computer-generated faxes from the e-prescribing standards may be eliminated, according to the Centers for Medicare and Medicaid Services (CMS). Included in the June 29 proposed rule that would establish new policies and payment rates for physicians is a provision that would eliminate the exemption. The proposal is part of CMS’s strategy to encourage adoption of e-prescribing.

A final rule effective Jan. 1, 2006, adopted e-prescribing standards for use by physicians and suppliers in connection with prescriptions under Medicare Part D. The rule included a SCRIPT standard for communications between physicians and pharmacies regarding prescription information, and provided that entities that transmit prescriptions via computer-generated faxes were exempt from using the standard. Although CMS expected the SCRIPT standard to be widely adopted over time, that has not happened.

Comments on the proposed rule will be accepted until Aug. 31, 2007. A final rule will be published later in the fall and will be effective for claims on or after Jan. 1, 2008. Read the fact sheet.

Four years after the Health Insurance Portability and Accountability Act (HIPAA) patient privacy rules went into effect, the federal government has found almost no examples of violations “in the context of fundraising efforts,” said the Association for Healthcare Philanthropy (AHP) last week.

The Department of Health and Human Services said in a recent letter to AHP president and CEO William McGinly that since the privacy rule’s April 14, 2003, effective date, a total of 27,070 complaints that allege violations of the HIPAA rule have been received by the agency’s Office for Civil Rights); however, practically none involve fundraising.

“While OCR’s complaint system does not specifically track complaints dealing with philanthropic activities, anecdotal information from OCR’s regional investigative offices suggest that a very small number of complaints involve allegations that protected health information has been misused in the context of fundraising efforts by covered entities,” an HHS official told AHP. Read the press release.

Establishing citizenship for Medicaid eligibility will be easier for states and program applicants under final regulations implementing the new law, issued by the Centers for Medicare and Medicaid Services (CMS) July 2.

The final rule both expands the types of documentation that can be used to establish citizenship and formally exempts certain groups from the requirements. To be published in the July 13 Federal Register, the final rule codifies earlier guidance issued to states that exempts children in foster care as well as individuals enrolled in Medicare and those who receive Supplemental Security Income or Social Security Disability Insurance. The rule also makes final a CMS policy change that will extend Medicaid benefits for up to the first year of life to a newborn child whose mother was receiving Medicaid on the date of his or her birth, regardless of the mother’s immigration status. Announcement of CMS’s policy with respect to newborn “deeming” was first made in March. Download the rule.

Department of Health and Human Services Secretary Mike Leavitt announced a two-year effort designed to further protect Medicare beneficiaries from fraudulent suppliers of durable medical equipment, prosthetics, and orthotics supplies (DMEPOS). The new initiative will have immediate effect in South Florida and Southern California--two regions of the country where there is a high concentration of suppliers--and is focused on preventing deceptive companies from operating in those regions. Based on the results of the project, it could be expanded nationwide.

Miami and Los Angeles have been identified as high-risk areas when it comes to fraudulent billing by DMEPOS suppliers. HHS, working with the Department of Justice, formed a Medicare fraud strike force made up of federal, state, and local investigators to combat fraud through the use of real-time analysis of Medicare billing data. In three months, 56 individuals have been charged in the Southern District of Florida with fraudulently billing Medicare for more than $258 million. Read the fact sheet.

The Centers for Medicare and Medicaid Services (CMS) projects that it will pay approximately $58.9 billion to 900,000 physicians and other healthcare professionals in CY08, under a proposed rule released yesterday that would revise payment rates and policies under the Medicare physician fee schedule. As required by the sustainable growth rate formula specified in the Medicare statute, the estimated update to the physician fee schedule for 2008 is -9.9 percent.

Provisions in the proposed rule include modifying a number of physician self-referral provisions to close loopholes that have made the Medicare program vulnerable to abuse, revising certain physician payment localities according to one of three proposed options, and using the Physician Assistance and Quality Initiative Fund to extend voluntary quality reporting bonus payments into 2008.

Comments will be accepted on the proposed rule until Aug. 31, 2007, and a final rule will be published later in the fall. The final rule will be effective for services on or after Jan. 1, 2008. Read the announcement.

An exodus of men from primary care practice is driving a marked shift in the physician workforce toward such specialties as cardiology and dermatology, reinforcing concerns about a looming shortage of primary care physicians, according to a new national study released June 29 by the Center for Studying Health System Change (HSC).

Two factors have helped mask the severity of the shift from primary care--a growing proportion of female physicians, who disproportionately choose primary care, and continued reliance on international medical graduates, who now account for nearly a quarter of all U.S. primary care physicians, according to the study.

Since 1996-97, a 40% increase in the female primary care physician supply has helped to offset a 16% decline in the male primary care physician supply relative to the U.S. population, the study found. At the same time, primary care physicians’ incomes have lost ground to both inflation and medical and surgical specialists’ incomes. And women in primary care face a 22% income gap relative to men, even after accounting for differing characteristics.

“If real incomes for primary care physicians continue to decline, there is a risk that the migration of male physicians will intensify and that female physicians may begin avoiding primary care--trends that could aggravate a predicted shortage of primary care physicians,” said Paul B. Ginsburg, president of HSC.

The IRS invites tax professionals and representatives of tax-exempt organizations to participate in a phone forum on the draft redesigned Form 990 (Return of Organizations Exempt from Income Tax).The forum will be presented on July 18, 2007, and repeated July 19, 2007. These forums are being offered at no charge and will be reserved on a first-come, first-served basis. Preregistration, via AT&T Teleconference Services, is now open. Learn more and register online.

The Centers for Medicare and Medicaid Services (CMS) has decided to delay until Aug. 1, 2007, the dissemination of National Plan and Provider Enumeration System (NPPES) data that are required to be disclosed under the Freedom of Information Act (FOIA).

CMS had previously stated that these data would be available on June 28, 2007. However, the agency believes that healthcare providers need additional time, beyond what was afforded in the May 30 data dissemination notice, in which to view their FOIA-disclosable NPPES data and make any updates or deletions (where permitted) that they believe are necessary to ensure accuracy.

The FOIA-disclosable data will be made available in an initial file downloadable from the Internet, with monthly update files also downloadable from the Internet, and in a query-only database (the National Provider Identifier registry) whereby users can query by NPI or provider name. Access the information page.

Visits to emergency departments increased to an all-time high of 115 million in 2005--5 million more than in 2004, according to a new report from the Centers for Disease Control and Prevention. The American College of Emergency Physicians (ACEP) said the increase in visits combined with closures of EDs threaten the safety of patients and will further endanger an already fragile system.

According to the report, nearly 42 million visits to EDs were related to injuries. The leading patient complaints, accounting for nearly one-fifth of all visits, were abdominal pain, chest pain, and fever. Only 13.9% of visits were for nonurgent medical reasons--conditions that can still need medical attention soon, such as bladder infections, high fevers, and extremity injuries that could be fractures.

The report said the closure of EDs combined with the overall increase in visits resulted in a 31% increase in visits per ED since 1995. There were 30,388 visits per ED in 2005 compared with 23,119 visits per ED in 1995. Medicaid recipients had the highest rate of emergency visits (88/100 people) of all groups including Medicare enrollees and the uninsured, which indicates severe healthcare access problems by Medicaid patients.

Providing minority patients a medical home in which they have a regular doctor or health professional who oversees and coordinates their care would help eliminate racial and ethnic health disparities and promote more healthcare equity, says a new report from The Commonwealth Fund. The report, based on a 2006 survey of 2,837 adults, shows that linking minority patients with a healthcare setting that offers timely, well-organized care where they can routinely seek physicians and medical advice can help them better manage chronic conditions and obtain critical preventive care services.

According to the report, Closing the Divide: How Medical Homes Promote Equity in Health Care, in 2006 nearly one-half of Hispanics and more than one of four African-Americans were uninsured at some point during the year. In contrast, 21% of whites and 18% of Asian Americans lacked coverage. While health insurance coverage is an important determinant of whether people can obtain essential care, the authors say insurance alone cannot eliminate racial and ethnic disparities in health.

“Insurance coverage helps people gain access to health care, but the next thing you have to ask is, ‘access to what?’” says lead co-author Anne Beal, MD, senior program officer at The Commonwealth Fund. “We found many disparities in care; however, disparities are not immutable. This survey shows if you can provide both insurance and access to a true medical home, racial and ethnic differences in getting needed medical care are often eliminated.”