Healthcare Financial News

Just over half (52 percent) of hospitals responding to the Leapfrog Hospital Quality and Safety Survey, a national hospital quality rating tool, indicate they have adopted the Leapfrog Never Events policy, a list of actions they pledge to take whenever a “never event”--a rare medical error that should never happen to a patient--occurs.

This year, 1,285 hospitals reported for the first time on their adherence to the Leapfrog Never Events policy, by which hospitals pledge to apologize to the patient and/or family affected by the never event and waive all costs directly related to the event, among other actions.

Leapfrog follows the National Quality Forum’s (NQF) definition of never events. The NQF’s list of 28 “serious reportable events” includes errors such as surgery performed on the wrong body part or on the wrong patient, leaving a foreign object inside a patient after surgery, and discharging an infant to the wrong person. Read the press release.

Thailand’s Positive Partnership program, one of that nation’s many innovative public health efforts, provides business loans to HIV-positive Thais who find an HIV-negative business partner, Mechai Viravaidya tells Glenn Melnick in an interview published Sept. 25 on the Health Affairs web site.

“The person who is not infected has the responsibility of changing attitudes and behavior in their community toward people living with HIV and AIDS,” says Viravaidya, a former Thai senator and government minister who for over three decades has been a leader in campaigns against excessive population growth, HIV/AIDS, and other public health threats.

In his discussion with Melnick, Viravaidya emphasizes the importance of complementing public health efforts with poverty reduction strategies through initiatives like the Positive Partnership program. Organizations that provide health care in the developing world “are all trying to solve health problems that are the consequence of poverty, but they don’t address the root cause of poverty. Hence, they will never be sustainable,” says Viravaidya. Only the business sector can provide the business skills and credit sources that the poor need to move up the socioeconomic ladder, he said. Read the abstract.

The quality of care for more than 80 million Americans enrolled in 767 accountable health plans improved in 2006, but the gains were smaller than they have been in past years, according to a new report by the National Committee for Quality Assurance (NCQA).

The State of Health Care Quality 2007 report marks the eleventh consecutive year of health plan measurement and reporting on healthcare quality. Commercial health plans posted improvements in 30 of 44 quality of care measures, including important gains in childhood immunizations and colorectal cancer screening. Medicaid plans also reported improvements in 34 of 43 measures.

However, the performance of health plans participating in Medicare lagged behind for a second consecutive year, improving in only seven of 21 measures of care. It is important to note that, in 2006, 44 new Medicare managed care plans reported on quality for the first time, bringing the total to 211 publicly reporting plans this year. These results highlight the need for policymakers and plan leaders to refocus their quality improvement efforts by expanding the number and type of plans that are required to report on quality. Download the report.

Despite relatively strong credit conditions in the national healthcare sector, not-for-profit hospitals and health systems at the lower end of the rating spectrum face multiple credit risks that are likely to only intensify over the next few years, according to a report released Sept. 26 by Standard & Poor’s Ratings Services.

The report, U.S. Not-for-Profit Health Care 2007 Speculative-Grade Medians, shows that the reasons that lower-rated credits are struggling often include weak demographics, small size, limited business position, and abundant competition. These factors have left speculative-grade organizations less able to take advantage of favorable revenue and volume trends that are common among investment-grade organizations, leaving them vulnerable in the next industry downturn.

As many high-investment-grade organizations continue to perform well, build reserves, and invest heavily in capital improvements, a gap is growing between the industry’s “haves” and “have-nots,” making it even harder for lower-rated organizations to regain secure competitive and financial footing.

For more information, call (212) 438-9823.

U.S. companies enjoyed a nine-year low in healthcare cost rate increases this year, but employers and employees should not expect to see that trend continue in 2008, according to Hewitt Associates, a global human resources services company. In 2007, average healthcare rate increases were 5.3 percent, down from 7.9 percent in 2006. However, Hewitt is projecting an 8.7 percent average increase for employers in 2008.

According to Hewitt, the average health cost per person for major companies will increase from $7,982 in 2007 to $8,676 in 2008. The amount employees are being asked to contribute in 2008 will be $1,859, representing approximately 21 percent of the overall healthcare premium and up from $1,690 in 2007. Average employee out-of-pocket costs, such as copayments, coinsurance, and deductibles, are also expected to increase from $1,576 in 2007 to $1,738 in 2008. Overall, employees’ total healthcare costs--including employee contribution and out-of-pocket costs--are projected to be $3,597 in 2008, up 10.1 percent from $3,266 in 2007.

Hewitt’s healthcare cost data are derived from the Hewitt Health Value Initiative, a cost and performance analysis database of more than 1,800 health plans throughout the United States, including 400 major employers and more than 18 million health plan participants. Read the press release.

A survey of more than 6,000 American congregations reveals that churches spend a significant amount of time, energy, and money in the ministries of health care.

The Congregational Health Ministry Survey, conducted by the National Council of Churches USA with support from the Robert Wood Johnson Foundation, shows that a majority of churches are ministering to their communities by providing healthcare ministries, such as health education and direct healthcare services. Also, many are advocating on behalf of public policy issues related to health care.

According to the survey report, about 70 percent of responding churches provide direct health services, with 65 percent offering health education programs within their community. The survey defines “direct services” as provision of medical care to individuals by trained healthcare professionals.

Among the survey findings:
* Reporting congregations each have an average of 13.07 health-related activities. The sample of 6,037 responding congregations reported a staggering total of 78,907 health ministry programs.
* Of the responding congregations, 51 percent offer direct financial support to individuals who need help paying their medical bills.
* Public policy advocacy was provided by 35 percent of the reporting congregations.
* Most reporting congregations provide healthcare ministries to members and nonmembers alike.

A bipartisan coalition of Senate and House leaders on Sept. 21 announced a bicameral agreement to reauthorize the Children’s Health Insurance Program (CHIP) for an additional five years. The $35 billion agreement struck by House and Senate negotiators will bring health coverage to approximately 10 million children in need--preserving coverage for all 6.6 million children currently covered by CHIP, and reaching millions more low-income, uninsured American children in the next five years. Read the press release.

UPDATE: With a vote of 67-29, the Senate on Sept. 27 approved H.R. 976 to reauthorize CHIP for an additional five years. However, President Bush threatens to veto the measure; although the Senate passed the bill with a veto-proof majority, the House was 19 votes short of a veto-proof passage, according to the Washington Post.

The Centers for Medicare and Medicaid Services (CMS) announced Sept. 24 that, after being found compliant with Medicare requirements through a comprehensive marketing review, seven health plan sponsors may resume marketing their private fee-for-service (PFFS) plans. The approvals allow the sponsors, as well as all other Medicare Advantage organizations, to market to newly eligible Medicare beneficiaries through Oct. 1, 2007. The plans may also market to those beneficiaries with special enrollment periods.

The United Health Group, Blue Cross Blue Shield of Tennessee, Humana Inc., Sterling Life Insurance Co., Coventry Health Care Inc., Universal American Financial Corp., and WellCare Health Plans Inc. are the seven sponsors that voluntarily suspended marketing PFFS plans earlier this year. The suspensions of the plan sponsors’ PFFS market activities were lifted after CMS verified that each organization had the systems and management controls in place to meet all the conditions specified by CMS. When marketing begins for the 2008 benefit year on Oct. 1, 2007, all PFFS plans will be subject to the same standards.

Any plan that is found to be in violation of CMS requirements can be subject to a full range of available penalties, which can include suspension of marketing and/or enrollment, suspension of payment for new enrollees, civil monetary penalties, and termination from the Medicare program. Read the press release.

Approximately 89.6 million Americans--more than one out of three people (34.7 percent) under 65 years of age--were uninsured at some point in time during 2006-07, according to a report released Sept. 20 by the health consumer organization Families USA.

The report, based mainly on Census Bureau data, showed that most of these uninsured individuals lacked coverage for lengthy periods of time: 63.9 percent were uninsured for six months or more; and 50.2 percent were uninsured for nine months or more. Also, 79.3% of the uninsured were in working families.

The number of states where more than one-third of nonelderly people went without health insurance for all or part of a two-year period more than doubled, rising from nine states in 1999-2000 to 20 states plus the District of Columbia in 2006-07.

“These trends document the consequences of inaction,” said Ron Pollack, executive director of Families USA. “The number of uninsured has reached crisis proportions that must be addressed by the President and Congress to ensure that health coverage is available and affordable for all.” Read the report.

The Centers for Medicare and Medicaid Services (CMS) has issued a change request revising the unique physician identification number (UPIN) registry web site and lookup functionality. Originally scheduled to be discontinued in September 2007, CMS has extended the lookup functionality until May 23, 2008. It has also added information regarding the release of information, including national provider identifiers, via the National Plan and Provider Enumeration System. This extension allows providers to have access to this information during the contingency phase of the NPI implementation.

Provider types affected include physicians, providers, and suppliers submitting claims to Medicare contractors (carriers, durable medical equipment Medicare administrative contractors, fiscal intermediaries, Part A/B Medicare administrative contractors, and/or regional home health intermediaries) for services provided to Medicare beneficiaries. Read the updated information.

Although practice setting and size are the strongest predictors of physicians’ access to clinical IT in their practices, significant variation in IT adoption exists across specialties, according to a national study released Sept. 20 by the Center for Studying Health System Change (HSC). Based on HSC’s nationally representative 2004-05 Community Tracking Study Physician Survey, the study’s findings are detailed in a new HSC data bulletin, Clinical Information Technology Adoption Varies Across Physician Specialties.

The study examined whether physicians had access to IT in their practices for five clinical activities: obtaining information about treatment alternatives or recommended guidelines; accessing patient notes; writing prescriptions; exchanging clinical data and images with other physicians; and exchanging clinical data and images with hospitals.

Across primary care and medical and surgical specialties, significant variation in access to IT exists. For example, surgeons lagged medical specialists in access to IT for four of the five clinical activities, and were less likely to have all five clinical activities associated with an EMR. Differences in IT access among subspecialties were even greater. For example, psychiatrists were substantially less likely than the comparison group of other medical subspecialists to access IT for all activities, except writing prescriptions. In contrast, oncologists were much more likely than the comparison group to have access to IT for guidelines and exchanging data with hospitals and physicians.

Two health policy organizations announced Sept. 18 that they are organizing Health Care 2008: Presidential Candidate Forums--a series of presidential forums that will allow each presidential candidate to discuss in detail his or her vision about health reform and the uninsured with a panel of leading health journalists from “The NewsHour with Jim Lehrer,” ABC News, National Public Radio, and The Wall Street Journal.

The forums are being organized by Families USA and the Federation of American Hospitals, produced by MacNeil-Lehrer Productions and hosted by the Kaiser Family Foundation in its Barbara Jordan Conference Center. The foundation’s health news and information site, kaisernetwork.org, will webcast each forum live and archive them for viewing.

The first forum will take place Sept. 24 at 11:00 a.m. ET and will feature former Sen. John Edwards, D-N.C. The remaining forums will take place through the end of the year. Families USA and the Federation of American Hospitals have extended invitations to participate to all of the presidential candidates from both major parties. Scheduling for the forums is based on the availability of each candidate.

For more information, visit the web site developed by the Kaiser Family Foundation for the forum series.

People who live in the New England and Mideast regions of the United States spend significantly more on health care than those who live elsewhere in the nation, the federal government reported Sept. 18 in the web edition of the journal Health Affairs.

Nine northeastern states (Connecticut, Delaware, Maine, Massachusetts, New York, Pennsylvania, Rhode Island, Vermont, West Virginia) and Alaska spent 20 percent more than the U.S. average on healthcare services in 2004 ($6,345 per capita versus $5,283--a wide disparity partly attributable to the concentration of physicians, the age distribution of a state’s population, residents’ income levels, and the number of people who lack health insurance, say officials from the Centers for Medicare and Medicaid Services (CMS).

Six states (Connecticut, Massachusetts, New York, Pennsylvania, Rhode Island, and Vermont) had among the highest concentrations of physicians to population and among the lowest shares of the uninsured population, the authors say.

In contrast, states in the Southwest and Rocky Mountain regions spent about one-fifth less than the U.S. average. Read the abstract.

In a speech to the Center for Health Transformation on Sept. 18, Minnesota Gov. Tim Pawlenty announced that hospitals in Minnesota will not bill insurance companies and others for any of the 27 types of reported “adverse health events.” The plan, created by the Minnesota Hospital Association and the Minnesota Council of Health Plans, ensures that patients will not have to pay for care made necessary by such events as wrong-site surgeries, serious medication errors, and sponges or other objects left behind in a patient after surgery, to name a few.

In 2006, Minnesota facilities reported adverse health events occurring 154 times out of more than 8 million patient visits. Minnesota hospitals have utilized this information to share best practices and improve health care quality. For example, the Minnesota Hospital Association launched two campaigns this year to address pressure ulcers and patient falls. Read the press release.

Wisconsin Physicians Service Health Insurance Corporation (WPS) will administer Part A and Part B Medicare claims payments in Iowa, Kansas, Missouri, and Nebraska, according to a CMS press release. Headquartered in Madison, Wis., WPS is the third new Medicare administrative contractor (MAC) selected by CMS as the first point of contact for the processing and payment of fee-for-service claims from hospitals, nursing facilities, physicians, and practitioners in the four states. By 2011, a total of 15 new Medicare contractors will cover every state and the District of Columbia.

WPS will take claims payment work currently performed by four fiscal intermediaries and three carriers. It will immediately begin implementation activities and will assume full responsibility for the claims processing work in its four-state jurisdiction no later than Sept. 9, 2008, CMS said. The MAC contract, which has an approximate value of $225 million over five years, includes a base period and four one-year options.

Oct. 19, 2007, is the deadline by which physicians must file claims to be eligible for a distribution in the more than $131 million Blue Cross Blue Shield (BCBS) settlement announced in April. Physicians, physician groups, and physician organizations who provided covered services to patients enrolled in or covered by a health benefit plan insured or administered by a majority of the BCBS plans in the country from May 22, 1999, through May 31, 2007, may be entitled to part of the proposed settlement.

Calling it a “historic settlement,” counsel representing approximately 900,000 physicians, as well as the medical societies of several states and other medical societies across the country, announced April 27, 2007, that they had settled a national class action lawsuit with the majority of BCBS health plans in the country. A central claim in the case was that BCBS plans were involved in a conspiracy to deny, delay, and/or reduce payments to physicians. The settlement includes about 40 BCBS plans.

Even if a physician did not provide covered services to an enrollee of one of the settling plans, the physician need only to have provided covered services to an enrollee of any other primary licensee of BCBS to be eligible for a distribution under this settlement. Also, a practice or group does not have to have a contract or network arrangement with the settled BCBS plan in order to participate in the settlement.

Physicians should contact their medical group or independent practice association if they think it may be filing on their behalf. Groups may file on behalf of physician employees if authorized by those physicians. Get more information.

Commercial electronic health record (EHR) systems are vulnerable to exploitation given existing industry development and disclosure practices, concluded a study by the board of the eHealth Vulnerability Reporting Program, reported on Sept. 17. The 15-month study, which included a survey of more than 850 provider organizations, evaluated current industry information security practices, assessed levels of risk related to EHR systems, and benchmarked healthcare information security practices against other industries.

Among other findings, the study found that EHR vendors either are not disclosing or are inadequately disclosing system vulnerabilities to customers, preventing organizations from appropriately managing risk or implementing compensating controls. Also, the study could not identify any industry organization that has established guidelines or practices to appropriately mitigate and manage risks associated with e-health systems, or that has the responsibility, charter, or mission to address security vulnerabilities. Download the executive briefing.

The North Carolina Healthcare Information and Communications Alliance, Inc. (NCHICA), a not-for-profit consortium that aims to improve health and care in North Carolina through health IT initiatives, announced on Sept. 13 its collaboration with the Workgroup for Electronic Data Interchange (WEDI) to maintain an electronic timeline that organizes proposed healthcare standards, regulations, and technology solutions announced by federal agencies and national standards organizations.

In March 2005, the NCHICA’s Timeline Task Force initiated the timeline to inform NCHICA members about upcoming deadlines and their potential impact and dependencies on other projects. The result was a critical path schedule with assumptions that enable organizations to supplement and inform their internal implementation plans.

The timeline database will be available for download on both the NCHICA and WEDI web sites in the near future. Both organizations are currently seeking sponsorship and support commitments for the project, which will help determine how often updates can be published.

If approved by the Office of Management and Budget, the Centers for Medicare and Medicaid Services (CMS) will be mandating the reporting of financial relationships with physicians in a Disclosure of Financial Relationships Report (DFRR) for certain hospitals. This latest proposal from CMS builds on the DFRR forms and process published for comment May 18 in the Federal Register.

Section 5006 of the Deficit Reduction Act of 2005 required CMS to consider the issue of annual disclosure of information pertaining to physician ownership and investment interest in specialty hospitals. CMS reported to Congress in August 2006 that it would require hospitals to provide information on a periodic basis concerning their ownership and investment interests and compensation arrangements with physicians, and a voluntary survey instrument was sent to both specialty and competitor hospitals. Nonresponders to that survey numbered 290 hospitals. The current plan is for the final DFRR to start with that same 290 and add 210 hospitals for a total survey population of 500.

A package of eight worksheets will be required of each hospital, including the following disclosures: direct ownership in the hospital, indirect ownership in the hospital, payments made to the hospital by direct owners, payments made to the hospital by indirect owners, and various compensation arrangements.

CMS will be reminding the recipients of the DFRR of the legal requirements to respond and that penalties of up to $10,000 for each day beyond the deadline are possible.

The Office of Management and Budget will accept comments on the proposed information collection for 30 days before taking action on the CMS request. Read the proposal.

The Office of Inspector General (OIG) for the Department of Health and Human Services (HHS), in partnership with the American Health Lawyers Association (AHLA), has released a resource guide on quality of care entitled Corporate Responsibility and Health Care Quality: A Resource for Health Care Boards of Directors.

As part of Inspector General Daniel R. Levinson’s quality-of-care initiative, this resource guide is intended to assist directors of healthcare organizations in carrying out their oversight responsibilities in the current challenging healthcare environment. It is the third in a series of documents on corporate responsibility cosponsored by OIG and the AHLA.

The guide is designed to help healthcare organization boards ask appropriate questions related to measurement tools as well as healthcare quality and reporting requirements. OIG and AHLA intend for this guide to support healthcare organization directors’ ongoing efforts to promote effective corporate compliance as it relates to healthcare quality.

HFMA expressed concerns to the IRS with the agency’s draft redesigned Form 990, used by tax-exempt organizations in reporting charity care. In a Sept. 14 letter to the IRS, HFMA asked that the form and instructions be revised to better capture charity care and bad debt, and that its implementation date be moved back, among other concerns, including appropriate reporting of Medicare payment shortfalls. In the letter, the Association praised the IRS for revising the form and adding a schedule “to reflect today’s complex healthcare environment,” adding, “We are delighted to see that the form and schedule clearly reflect the fact that charitable activity extends well beyond the provision of charity care.”

However, the letter encouraged the IRS to ensure that form 990 and schedules allow healthcare providers to capture clearly all the relevant attributes by which they support the community benefit standard. The Association also recommended that the IRS incorporate HFMA Principles and Practices Board Statement 15 guidance into its instructions for measuring and reporting charity care and bad debt. In addition, it recommended that Schedule H Part II be removed, or that the IRS explain how each set of information requested serves to demonstrate a provider’s exempt-organization compliance.

Finally, HFMA urged an extension to the filing deadline for the revised form and new schedules to tax year 2010. Stating that the revisions the IRS makes to the form are likely to be extensive, “combined with the complexity of the information that the IRS seeks to capture, makes an additional review period prudent.” Read the letter.

Hoping to revoke restrictions placed by the Centers for Medicare and Medicaid Services (CMS) on states that provide State Children’s Health Insurance Program (SCHIP) coverage to children in families above 250 percent of the federal poverty level, a bipartisan group of senators introduced the Better Health for America’s Children Act (S. 2049) in the Senate Sept. 12.

The bill’s sponsors--Sens. Edward Kennedy, D-MA; Gordon Smith, R-OR; Jay Rockefeller, D-WV; and Olympia Snowe, R-ME--said the new CMS policy, if allowed to go forward, would have a “devastating impact” on children’s access to affordable healthcare coverage, and that each state should be allowed to cover children at the income level that is most appropriate for their state.

“The administration should be ashamed of its cruel attempt to revoke this needed coverage, and Congress should not allow the new rule to stand,” said Kennedy.

In a Sept. 7 letter to state survey and certification agencies, the Centers for Medicare and Medicaid Services has issued guidance on critical access hospital (CAH) relocation. The revised guidance, effective immediately, explains criteria to be used by Medicare’s regional offices to determine whether a CAH with a necessary provider designation remains essentially the same provider, serving the same service area after relocation, thereby qualifying the CAH to retain its necessary provider designation and Medicare provider agreement.

Regulations permit such CAHs to relocate, so long as the CAH remains essentially the same provider and continues to provide services to the same rural service area. The guidance notes that the relocation standards and the associated interpretative guidelines apply only to relocation of CAHs with a necessary provider designation; other CAHs seeking to relocate must comply with all criteria for CAH designation at the new location. Read the letter.

A child born in the United States in 2005 can expect to live nearly 78 years (77.9)--a new high--according to a report released Sept. 12 by the Centers for Disease Control and Prevention (CDC). Deaths: Preliminary Data for 2005, from CDC’s National Center for Health Statistics (NCHS), is based on approximately 99 percent of death records reported in all 50 states and the District of Columbia for 2005.

The increase in life expectancy represents a continuation of a long-running trend. Over the past decade, life expectancy has increased from 75.8 years in 1995, and from 69.6 years in 1955. Life expectancy for the white population was 78.3 in 2005, unchanged from the record high of 2004. Life expectancy for the black population increased slightly from 73.1 years in 2004 to 73.2 years in 2005. The age-adjusted U.S. death rate fell to below 800 deaths per 100,000 population in 2005--an all-time low.

Final U.S. mortality data for 2005 will not be available until next year.

Medicare severity diagnosis-related groups (MS-DRGs) will be implemented for discharges occurring on or after Oct. 1, 2007, as was announced in the inpatient prospective payment system (IPPS) final rule. As stated in the rule, MS-DRGs are intended to be a substantial improvement over the current Centers for Medicare and Medicaid Services DRGs in their ability to differentiate cases based on severity of illness and resource consumption. As developed, the MS-DRGs increase the number of DRGs by 207. Access complete information on MS-DRGs from the CMS acute IPPS web site.

In metropolitan areas across the United States, blacks are more likely than whites to live in poor-quality nursing homes, according to results of a new study published in the September/October issue of Health Affairs.

The problem is most acute in the Midwest. Researchers found that 10 of the 20 nursing homes with the greatest disparities in quality of care were located in Indiana, Michigan, Ohio, and Wisconsin. The metropolitan area with the greatest disparity in care is Milwaukee, where blacks are more than twice as likely as whites to live in a nursing home with significant inspection deficiencies, substantial staffing shortages, and financial problems.

According to the research, blacks make up about 15 percent of all U.S. nursing home residents, yet around 60 percent of black residents were concentrated in less than 10 percent of those homes. The 10 percent of U.S. nursing homes in which blacks reside tend to be in the bottom quartile with respect to quality, the study showed.

The study authors recommended several policy changes that could potentially eliminate the disparities highlighted by the study, including improvements to payment structures for nursing homes with a high proportion of Medicaid residents, and closing the gap between the amount paid to nursing homes by Medicaid and private payers.

Expanding coverage to the 47 million Americans who now lack health insurance could greatly improve care for people who already are protected, according to a new study in the September-October issue of the journal Health Affairs. Researchers found that insured adults who live in communities with high uninsurance rates are more likely to face problems with access to care and quality than those who live in communities where more people are covered.

Economists Mark Pauly and José Pagán compared differences in healthcare access, use, and quality between 9,552 insured adults in 10 communities with the highest and 10 with the lowest proportions of uninsured adults. Communities with high rates of uninsurance had an average of about 27 percent of adults without health insurance. Communities with low rates of uninsurance had an average of nearly 7 percent of adults who lacked coverage. Read the abstract.

Premiums for employer-sponsored health insurance rose an average of 6.1 percent in 2007, less than the 7.7 percent increase reported last year but still higher than the increase in workers’ wages (3.7 percent) or the overall inflation rate (2.6 percent), according to the 2007 Employer Health Benefits Survey released Sept. 11 by the Kaiser Family Foundation and Health Research and Educational Trust. The average premium for family coverage in 2007 is $12,106, and workers on average now pay $3,281 out of their paychecks to cover their share of the cost of a family policy.

In spite of the extensive attention paid to consumer-driven health plans, the survey also found that these relatively new types of arrangements have made only a small inroad into the employer market. Such plans cover about 5 percent of all covered workers, which is not statistically different from the 4 percent share recorded in 2006. Overall, an estimated 3.8 million workers are enrolled in consumer-driven plans.

This year, 10 percent of firms offered a consumer-driven plan to their workers, which is up from (but not statistically different than) the 7 percent of firms reporting this for 2006.

In 2003, the median senior living alone spent 12.5 percent of his or her income on out-of-pocket health care, more than five times the 2.2 percent share spent by the median younger adult living alone, according to a new analysis issued by the Kaiser Family Foundation. The analysis uses data from the Consumer Expenditures Survey from 1998 to 2003 to assess the share of income that seniors and younger adults spent out of pocket for their healthcare needs.

The issue brief, The Burden of Out-of-Pocket Health Spending Among Older Versus Younger Adults, finds that seniors consistently spent a larger share of their income out of pocket on health care than younger people. Given the persistent differences between young and old, the analysis suggests that even with Medicare’s prescription drug benefit, significantly narrowing the wide gap between seniors and younger adults in their out-of-pocket spending burdens is unlikely. Access the issue brief.

Stability was again the defining characteristic of the U.S. not-for-profit senior living sector in 2007. A new report from Standard & Poor’s Ratings Services indicates that credit trends remained relatively favorable for the 87 senior living organizations for which it maintains debt ratings. However, S&P expects that senior living operations may be strained in the long term due to turbulence in the equity markets and softness in real estate.

The report, U.S. Not-for-Profit Senior Living Sector Shows Continued Stability, Though Some Unrest Is on the Horizon, looks at the sector’s ratings momentum, outlook trends, and the financial median ratios that ratings are in part based on.

The report is available to subscribers of RatingsDirect, the real-time web-based source for S&P’s credit ratings, research, and risk analysis. For more information, call 212-438-5054.

Over the past decade, numerous states have launched “insurance reforms” with some significant and unexpectedly negative--albeit unintended--consequences, according to a new report. A number of these initiatives were repealed or significantly changed within a few years of implementation. The study by Milliman, Inc. on behalf of America’s Health Insurance Plans (AHIP) examined eight states that enacted various forms of “guarantee issue” and “community rating” in the 1990s, including Kentucky, Maine, Massachusetts, New Hampshire, New Jersey, New York, Vermont, and Washington.

Overall, the report found that states that implemented guarantee issue and community rating saw a rise in insurance premiums, a reduction of individual insurance enrollment, and an exodus of health insurers from the individual insurance market. In addition, the report found no significant decrease in the uninsured population in states that implemented these initiatives. Download the report.

Physicians and medical staff members who have concerns about the safety and quality of care at their hospital may report those concerns with the understanding that retaliatory disciplinary action is prohibited, according to explicit new rules announced Sept. 5 by the Joint Commission. The accreditation participation requirement previously referred generally to hospital staff, although it has always been intended that physicians and medical staff be included as part of “good faith participation” in the accreditation policy.

The revised requirement, which will become effective Jan. 1, 2008, means that accredited hospitals must educate staff and medical staff that any employee or any physician who has concerns about the safety or quality of care provided in the hospital may report these concerns to the Joint Commission. Hospitals also are expected to inform staff and medical staff that no disciplinary action will be taken if concerns are shared with the commission, and hospitals should demonstrate this commitment by refraining from taking action against employees or physicians who report their concerns to the commission. Read the news release.

President Bush intends to designate Kerry Weems as acting administrator for the Centers for Medicare and Medicaid Services (CMS), as announced Sept. 4. Weems’ appointment is pending confirmation by the Senate. Currently deputy chief of staff to Department of Health and Human Services Secretary Michael Leavitt, Weems has been at CMS for 24 years.

“Kerry Weems is an excellent choice for Acting CMS Administrator,” said Leavitt. “Kerry understands the large fiscal challenges facing Medicare and Medicaid and what it will take to strengthen and sustain those programs for the future.” Read the news release.

However, changes in case mix index are not proportionate to the projected changes in IPPS payment. This discrepancy is affected by several components of payment, but most significantly by payment for outliers. Because Medicare severity diagnosis-related groups (MS-DRGs) introduce more categories for higher levels of severity, some patients that qualified as outliers prior to FY08 are classified into higher-weighted MS-DRGs but are not qualified for outlier payment. The number of outlier cases is projected to decrease 5 percent and total outlier payment is projected to decrease 10 percent from FY07 to FY08 due to regulatory changes.

This shift in outlier payment contributes to the disproportionate change in IPPS payment for large teaching programs that have the highest levels of severity under MS-DRGs. The shift is an indication that CMS may need to focus further on the equity of payment for the costliest cases. Read the analysis.

Effective Oct. 1, 2007, Medicare will begin to accept a present-on-admission (POA) indicator for every diagnosis on inpatient acute care hospital claims; however, providers must submit the POA on hospital claims beginning with discharges on or after Jan. 1, 2008. Critical access, Maryland waiver, long-term care, cancer, and psychiatric hospitals, as well as inpatient rehabilitation and children’s inpatient facilities, are exempt from this requirement. Find more information on this requirement.

It has come to the attention of the Centers for Medicare and Medicaid Services that a trade publication recently published an incorrect schedule of implementation dates, by contractor, for claim rejections based on the inability to locate a National Provider Identifier (NPI)/legacy identifier pair on the Medicare NPI crosswalk. Providers will be advised by their Medicare contractor as to the particular timeframe for their transition. Any other published schedules are unofficial and may include inaccurate dates. Medicare providers are urged to rely only on information from their Medicare contractors. Access the CMS NPI page.

HHS’ Health Resources and Services Administration (HRSA) has announced $16.7 million in grants to support HIV/AIDS care and services that fall under several Ryan White HIV/AIDS programs: Early Intervention Services ($3,050,032 in grants to six organizations in four states and Puerto Rico); Women, Infants, Children, Youth and Affected Family Members AIDS Healthcare ($6,266,614 in grants to 17 organizations in eight states, the District of Columbia and Puerto Rico ); and two Special Projects of National Significance awards ($3,964,198 and $2,943,379), which will study innovative models for delivering HIV/AIDS care.

A final award, totaling $499,863, will fund peer education training sites and a resource and evaluation center managed at the Boston University Medical Campus. In FY07, $2.1 billion was appropriated to support the Ryan White HIV/AIDS Program. Read the press release.

The Centers for Medicare and Medicaid Services has issued a proposed rule regarding Medicaid reimbursement for school-based administration and transportation that is expected to save taxpayers approximately $635 million in federal funds during the first year and $3.6 billion in federal funds over five years. Improper billing by school districts for administrative costs and transportation services under Medicaid is a longstanding concern of the Department of Health and Human Services (HHS), and both HHS’ Office of Inspector General and the Government Accountability Office have identified these categories of expenses as being susceptible to fraud, waste, and abuse.

The proposed rule would eliminate reimbursement under the Medicaid program for the costs of certain activities if the HHS secretary finds that they do not meet the definition of an optional transportation benefit. Based on these determinations, federal Medicaid payments would no longer be available for administrative activities performed by school employees or contractors, or anyone under the control of a public or private educational institution, or for transportation from home to school and back for school-aged children. The proposed rule will be published in the Federal Register on Sept. 7, 2007. View the proposed rule.

In the Aug. 31 issue of the Federal Register, the Centers for Medicare and Medicaid (CMS) published a final rule setting forth the state requirements to provide information to CMS for purposes of estimating improper payments in Medicaid and the State Children’s Health Insurance Program. The Improper Payments Information Act of 2002 requires heads of federal agencies to estimate and report to Congress annually these estimates of improper payments for the programs they oversee, and submit a report on actions the agency is taking to reduce erroneous payments.

The rule includes state requirements for submitting claims and policies to CMS federal contractors for purposes of conducting fee-for-service and managed care reviews, and for conducting eligibility reviews and estimating case and payment error rates due to errors in eligibility determinations. The regulations are effective as of Oct. 1, 2007. Access the final rule.

Department of Health and Human Services (HHS) Secretary Mike Leavitt announced on Aug. 30 that the department is making available another $75 million to states, territories, and four metropolitan areas to help strengthen their capacity to respond to a pandemic influenza outbreak.

The one-time pandemic influenza response planning grants will supplement the $430 million HHS announced on June 28, 2007, to strengthen the ability of hospitals and other health care facilities to respond to bioterror attacks, infectious diseases, and natural disasters that may cause mass casualties. Read the press release.