HFMA NEWS

In 2005, uninsured emergency department visits were the least likely cases to be admitted to the hospital, with only 7.4 percent of uninsured visits resulting in a hospital stay, according to a new Agency for Healthcare Research and Quality statistical brief. The researchers examined 2005 data from the Healthcare Cost and Utilization Project (HCUP) on ED visits for adults age 18 years and older in 23 states that had submitted HCUP data.

Among the study’s other findings, rates of ED visits were inversely related to wealth: The rate of ED visits in the poorest communities was nearly twice that in the wealthiest communities (481.4 visits per 1,000 people in the poorest communities compared with 260.7 visits per 1,000 in the wealthiest communities).

“The scarcity of primary care practitioners in cities and rural areas may contribute to an increasing reliance on EDs,” wrote the researchers. “Understanding the conditions for which individuals are visiting EDs may provide much needed insight into the accessibility of preventive and ambulatory care.” Read the statistical brief.

Cleveland Clinic announced last week that it is collaborating with the Google search engine company to pilot features and services of a new health offering. Google Health, not yet publicly available, will assist providers to create a new kind of healthcare experience that puts patients in charge of their own health information.

Cleveland Clinic already has an electronic personal health record (PHR) system called eCleveland Clinic MyChart®. The pilot, an invitation-only opportunity offered to a group of Cleveland Clinic PHR users, plans to enroll between 1,500 and 10,000 patients. It will test secure exchange of patient medical record data such as prescriptions, conditions, and allergies between their Cleveland Clinic PHR to a secure Google profile in a live clinical delivery setting. The ultimate goal of the model is to give patients the ability to interact with multiple physicians, healthcare service providers, and pharmacies. Read the press release.

Cover the Uninsured, a project of the Robert Wood Johnson Foundation (RWJF), is a national effort to bring attention to the issue of Americans living without health insurance. RWJF and 18 national organizations and foundations cosponsor the initiative, which began in 2003. Successes of last year’s initiative included more than 3,300 events and activities in all 50 states, including enrollment events, health fairs, campus events, community forums, and news conferences. Learn more.

The Centers for Medicare and Medicaid Services (CMS) on Feb. 22 issued the advance notice of changes in methods that will be used to calculate Medicare Advantage (MA) capitation rates for payments to MA organizations for 2009. The notice also announces the policies for payments to organizations offering the Medicare prescription drug benefit. The notice includes the preliminary growth trend that affects payment rates for Medicare Advantage plans, along with other technical updates on the calculations affecting payments to Medicare Advantage health plans and Part D prescription drug plan sponsors.

Technical adjustments announced in the notice include a preliminary estimate of a 4.8 percent increase in the national per capita MA growth percentage. Also, the final capitation rates for each county will be announced in a rate announcement scheduled for publication on April 7, 2008. The county capitation rates define the upper limit for payments to MA health plans. Read the advance notice.

When required for Medicare claim submission, all 837P and CMS-1500 claims must have a National Provider Identifier (NPI) or NPI/legacy pair in the required primary provider fields, effective March 1, 2008. Failure to include an NPI will cause the claim to reject.

Providers that have been submitting claims with both an NPI and a Medicare legacy number should test their ability to get paid using only the NPI by submitting one or two claims with just the NPI (no Medicare legacy number). If the Medicare NPI crosswalk cannot match a provider’s NPI to the provider’s Medicare legacy number, the claim with an NPI-only will reject. Providers whose claims are processed and are paid should continue to increase the volume of claims sent with only their NPI. If the claims reject, those providers should go into their National Plan and Provider Enumeration System (NPPES) record and validate that the information they are sending on the claim is the same information in NPPES. If it is different, the updates should be made in NPPES and resent in a small batch of claims three to four days later. If claims are still rejecting, those providers may need to update their Medicare enrollment information; those providers should call their Medicare carrier, fiscal intermediary, A/B Medicare administrative contractor enrollment staff, or the National Supplier Clearinghouse for advice as soon as possible, with a copy of their NPPES record available. Learn more.

Delivery of high-quality health care is driving investments in clinical technology, including electronic medical records (EMR) and technology that reduces medical errors, such as computerized practitioner order entry (CPOE), suggest results of the 19th annual Healthcare Information and Management Systems Society (HIMSS) leadership survey. Medicare cutbacks and managed care fee reductions are creating uncertainty about the ability to fund such investments, the survey also reveals. Complete results of the survey were presented Feb. 25 at the 2008 Annual HIMSS conference.

According to the 300 healthcare IT professionals who participated in the survey, investments in EMR technology will be the top IT priority at their organization in the next two years. With one in four healthcare IT professionals acknowledging their organization suffered a security breach last year, identity management and security technologies were two of the top three technologies respondents said they planned to implement for the first time in the next two years. The top three technology areas identified were identity management (45 percent), radio frequency identification technology (43 percent), and security technologies (42 percent). These investments are on top of already strong use of security technologies such as firewalls (in place at 98 percent of respondent’s facilities), user access controls (83 percent), and audit logs of each access to patient health records (81 percent). Access the report.

Barriers to sharing patient clinical data electronically among rival hospitals, physicians, and health plans remain high as concerns about loss of competitive advantage and data misuse hamper participation in local health information exchanges, according to results of a study released Feb. 25 by the Center for Studying Health System Change (HSC) and the National Institute for Health Care Management (NIHCM) Foundation. The study’s findings are detailed in a new HSC-NIHCM research brief, Creating Sustainable Local Health Information Exchanges: Can Barriers to Stakeholder Participation Be Overcome?

The study examined stakeholder perspectives--hospitals, physicians, health plans, employers, and others--on participation in four health information exchanges (HIEs), which support the electronic sharing of clinical data among independent hospitals, physicians, and other healthcare stakeholders in a community. By offering physicians more timely and complete medical records at the point of care, HIEs have the potential to improve healthcare quality and efficiency, and to aggregate clinical data across patients for uses such as quality improvement and pay-for-performance activities, public health, and clinical research.

However, the complexities of implementing an HIE in the four communities studied suggest that achieving the broad vision of health information exchange will take a long time to achieve, the study concludes. Read the research brief.

By 2017, U.S. healthcare spending is expected to nearly double from 2007’s projected level, reaching $4.3 trillion and consuming 19.5 percent of the nation’s gross domestic product (GDP), report Centers for Medicare and Medicaid Services (CMS) analysts in today’s web exclusive edition of Health Affairs. The 10-year estimates follow last month’s report from the government that health spending in 2006 surpassed $2.1 trillion for the first time, accounting for 16.0 percent of GDP.

Healthcare spending is expected to hit $2.2 trillion in 2007, growing on average 6.7 percent through 2017 and outpacing economic growth by about 1.9 percentage points each year. Steady health spending growth coupled with what analysts project to be somewhat lower economic growth of about 4.7 percent annually is expected to result in a gradual increase in health spending as a share of GDP.

Although the outlook for national health spending growth calls for continued stability for the next 10 years, the authors note that they expect the leading edge of the baby-boom generation to begin to affect the Medicare program. By 2017, Medicare spending is expected to account for $884 billion, or just over one-fifth of all national health spending. Medicaid spending also is expected to continue to rise at a faster rate than overall health spending during the coming decade. Medicaid expenditures are projected to grow 8.9 percent in 2007 to $338.2 billion. Read the abstract.

Faced with double-digit annual increases in the use of advanced imaging services, such as computed tomography (CT) and positron emission tomography (PET) scans, health plans are stepping up efforts to slow the proliferation of advanced imaging services, according to a study released Feb. 25 by the Center for Studying Health System Change (HSC). The study’s findings are detailed in a new HSC issue brief, Health Plans Target Advanced Imaging Services: Cost, Quality and Safety Concerns Prompt Renewed Oversight.

Along with escalating cost pressures resulting from the rapid growth in imaging utilization, there also are growing concerns about patient safety and quality of care related to rapid increases in magnetic resonance imaging (MRI), CT and PET scans, and nuclear cardiology imaging. For example, according to a 2007 McKinsey and Co. analysis, the number of CT scans performed in the United States grew 13 percent annually between 2000 and 2005, rising from 12 CT scans per 100 people in 2000 to 22 scans per 100 in 2005.

Repeated imaging may result from poor-quality images generated by substandard equipment or from inaccurate interpretation of results by inadequately trained physicians. Regardless, repeated use of CT scans, for example, can expose patients to excessive amounts of radiation, because these scans generally emit significantly larger amounts of radiation than traditional X-rays. Read the issue brief.

Two new proposed rules that would give states greater flexibility in designing their own Medicaid programs, including adjusting their benefit package to more closely align with beneficiary needs and requiring increased cost sharing by enrollees, were announced Feb. 21 by the Centers for Medicare and Medicaid Services (CMS).

Under the proposed rules, states would have the opportunity to offer beneficiaries health care that has the same value as plans that are being offered to other populations in the state, through alternative benefit packages called “benchmark plans.” Benchmark plans are similar to the flexibility provided to states under the State Children’s Health Insurance Program. These options provide states with the opportunity to target benefits to meet the specific needs of individuals. States would also be able to create new benefit packages tailored to different populations.

CMS also released proposed regulations on Deficit Reduction Act provisions that allow states to change current premiums and cost-sharing structures. The proposed rules were published in the Feb. 22 Federal Register.

In the Feb. 22 Federal Register, CMS published a final rule on healthcare-related taxes under Section 1903(w) of the Social Security Act. The final rule revises the threshold from 6 percent of net patient revenue to 5.5 percent; clarifies the standard for determining the existence of a hold harmless arrangement under the positive correlation test, Medicaid payment test, and the guarantee test; codifies changes to permissible class of healthcare items or services related to managed care organizations; and removes obsolete transition period regulatory language. Download the rule.

In the Feb. 22 issue of the Federal Register, CMS published a final rule establishing a process for Medicare contractors to provide eligible participating physicians and beneficiaries with a determination of coverage relating to medical necessity for certain physicians’ services before the services are furnished. The rule is intended to give the physician and beneficiary a chance to know the financial liability for a service before expenses are incurred. The rule also establishes reasonable limits on physicians’ services for which a prior determination of coverage may be requested. The rule is effective March 24, 2008. Download the rule.

Improvements in how Medicare pays kidney dialysis centers could more efficiently deliver services to Medicare beneficiaries with end-stage renal disease (ESRD), according to a report to Congress by CMS. The report describes the steps to be taken by Congress to implement a fully bundled prospective payment system (PPS) for dialysis services.

Currently, Medicare pays for certain dialysis services under a partial bundled rate, referred to as the composite rate. The report discusses establishing a base treatment payment rate for the services related to a dialysis session, including the services in the current composite rate as well as items that are billed separately.

The president’s budget for FY09 contains a legislative proposal to implement a fully bundled ESRD PPS beginning Jan. 1, 2011. Download the report.

CMS has begun distributing its annual Medicare contractor provider satisfaction survey (MCPSS) to a new sample of Medicare providers. The survey is designed to garner quantifiable data on provider satisfaction levels with key services performed by the Medicare fee-for-service contractors who process and pay more than $280 billion in Medicare claims each year. The survey will be used by CMS as an additional measure to evaluate performance of Medicare administrative contractors and support process improvement efforts.

CMS will contact approximately 35,000 randomly selected providers, including physicians and other healthcare practitioners, suppliers, and institutional facilities. Providers selected to participate in the survey will be notified by the end of this month. CMS plans to make the survey results available in July 2008. Learn more.

Department of Health and Human Services Secretary Mike Leavitt on Feb. 20 called on community leaders across the country to apply for a new demonstration project that provides Medicare incentive payments to physicians for the use of certified electronic health records (EHRs) to improve patient care.

Over a five-year period, financial incentives will be provided to as many as 1,200 small- and medium-sized primary care physician practices that use certified EHRs to improve quality as measured by their performance on specific clinical quality measures. In addition to the incentive payments, bonus payments may be awarded based on a standardized survey measuring the number of EHR functionalities a physician group has incorporated into its practice. Total payments under the demonstration for all five years may be up to $58,000 per physician or $290,000 per practice.

The application period is open now through mid May for communities interested in becoming one of the 12 sites. Read the press release.

The number of uninsured people in the United States grew by 3.4 million from 2004 to 2006, even as a resurgent economy raised incomes and lowered poverty rates, Urban Institute researchers report in a Health Affairs web exclusive study published Feb. 20. In fact, on an annual basis, the ranks of the uninsured grew faster in 2005 and 2006 than they did during the four years from 2000 through 2004, when 6 million people became uninsured.

According to the researchers, the dominant factor behind the growing number of uninsured was the decline in employer-sponsored health coverage. From 2000 to 2004, the rate of employer coverage fell dramatically: In 2000, 67.8 percent of the nonelderly were covered by employer-sponsored insurance, but by 2004, only 63.3 percent had such coverage.

Declines in employer-sponsored insurance rates occurred at all income levels but were most pronounced for the low-income, note the researchers. They warn that the erosion of employer-sponsored insurance is likely to continue, particularly for low-income people, as long as the basic factors underlying it, including rising healthcare costs, remain unchanged. Read the abstract.

American consumers want more from their healthcare system than they’re currently getting--greater online connection to healthcare providers and medical records, customized insurance coverage, and wider access to emerging innovations such as retail clinics, according to a new survey released Feb. 20. At the same time, they express anxiety about future healthcare costs--only 7 percent say they’re adequately prepared financially--and increasingly search for alternative medicines and services that can save them money and offer convenience.

The 2008 Survey of Health Care Consumers, a representative poll of more than 3,000 Americans between age 18 and 75, was conducted by the Deloitte Center for Health Solutions.

Among the survey’s key findings: 60 percent want physicians to provide online access to medical records and test results, and online appointment scheduling; one in four say they would pay more for the service. Also, 29 percent support a tax increase to help cover the uninsured; another 34 percent say they would consider a tax hike. Respondents said they wanted health plans to provide help with clinical decisions, not simply administrative services, and many want to customize their insurance with unique coverage and pricing features. Access the report.

A new American Cancer Society study of 12 types of cancer among more than 3.5 million cancer patients between 1998 and 2004 finds uninsured patients were significantly more likely to present with advanced-stage cancer compared with patients with private insurance. The study, which appears in the March issue of The Lancet Oncology, finds that the strongest association between insurance status and advanced cancer was for cancers that can be detected early by screening or evaluation of symptoms.

Compared with patients with private insurance, uninsured as well as Medicaid patients had significantly increased likelihoods of being diagnosed with cancer at more advanced stages compared with patients with private insurance for many cancer sites. The greatest increase in risk of more advanced-stage diagnosis among both uninsured and Medicaid-insured occurred for cancer sites that are part of routine screening (e.g., breast, colorectal) or sites with symptoms present at early stages (melanoma, urinary bladder).

The study also found that African-American patients were significantly more likely to be diagnosed at a more advanced stage for many cancers, indicating that beyond the effects of health insurance, other barriers likely exist for those patients related to early diagnosis and prompt medical care. Read the report summary.

Most states have made substantial progress in defining their privacy and security approaches for electronic health information exchange, according to a report released by the Office of the National Coordinator for Health Information Technology and the Agency for Healthcare Research and Quality.

The impact analysis report provides an assessment of the progress made by states since the inception of the project by comparing the current landscape for privacy and security with the baseline as reported by the state teams in early 2006. The report discusses the impact of work among and between participants in five key areas: legislation, executive orders, leadership and governance, stakeholder education and knowledge, and development of health information exchange networks. The analysis also describes the collaborative work between states in seven key areas and provides a state-by-state discussion of recent progress.

Progress made during the past two years includes the fact that 11 states have reported legislative activities aimed at updating and aligning privacy and security statutes to prepare for electronic health information exchange, with four states having already passed some legislation. Access the report.

Large differences across the country in spending for the care of similar patients could indicate a healthcare system that is not as efficient as it could be, particularly if that higher spending does not produce commensurately better care or improved health outcomes, concluded a newly released paper by the Congressional Budget Office.

Geographic Variation in Health Care Spending examines the amount of and trends in geographic variation in the nation’s healthcare spending, as well as the root causes of that variation. It also examines the relationship between spending and quality of care, and discusses what those findings imply about how health care is produced in the United States and how it could be made more efficient. The paper focuses primarily on spending in the Medicare program because there are more data available about the cost of providing health care to Medicare beneficiaries than there are for other populations.

Among other findings, the paper says that some of the variation in medical practice probably is attributable to regional differences in the supply of medical resources (specialist physicians or healthcare facilities, for example) and the propensity to take advantage of the financial incentives provided by Medicare or other payers in developing and using those resources. Download the report.

Massachusetts hospitals could prevent 55,000 dangerous medication errors every year and save $170 million annually if they implement computerized physician order entry, according to a study unveiled Feb. 14 by the Massachusetts Technology Collaborative and the New England Healthcare Institute.

The study was based on a review of 4,200 medical charts at six community hospitals in the state. According to the study report, Saving Lives, Saving Money: The Imperative for Computerized Physician Order Entry in Massachusetts Hospitals, it found that, on average, one in every 10 patients admitted to those hospitals suffered a preventable medication injury such as a severe allergic reaction or dangerous interaction among medications.

These errors could be substantially avoided by implementing computerized physician order entry (CPOE) systems, according to the report. The systems could cut the preventable error rate by 70 percent and save each community hospital $2.7 million annually by reducing error rates, shortening lengths of hospital stay, and curtailing unnecessary drug tests and laboratory use. Download the report.

On Feb. 15, the Bush administration sent Congress a legislative package in response to the Medicare funding warning triggered by the fact that more than 45 percent of total Medicare spending has been derived from general revenues for two consecutive years.

According to a letter sent to House Speaker Nancy Pelosi, Department of Health and Human Services secretary Michael Leavitt said the Medicare program is “on an unsustainable path” driven by projected growth in its per capita costs, and increases in the beneficiary population as a result of population aging. “Excess cost growth will not be brought under control until there is comprehensive reform changing Medicare’s underlying structure,” wrote Leavitt. “The … problem is an unsustainable design in which government controls too many aspects of health care.”

The legislative package takes a three-step approach to strengthening Medicare through value-based purchasing, medical liability reform, and higher Medicare prescription drug premiums for some seniors. Specific elements in the legislation include improved health IT, transparency of pricing and quality information, and incentives for providers to deliver high-quality, low-cost health care. Read the text of the bill.

A new research report developed by faculty in the University of Iowa College of Public Health suggests that not-for-profit community health systems should strive to improve performance in establishing, monitoring, and reporting on programs designed to benefit the communities they serve.

In a survey of CEOs of 201 not-for-profit community health systems, the researchers examined three aspects of healthcare governance--board structure and composition, board practices and processes, and board culture--and compared the information with widely recognized good governance benchmarks.

Although several areas of strength were noted, the researchers also found areas where improvements are needed. For instance, only 36 percent of health systems surveyed have formal, board-adopted community benefit plans in place. The report authors recommended that health systems should adopt formal plans that clearly state the systems’ roles and obligations to provide charitable services and other such benefits to their communities. These community benefit plans should involve local needs assessments and reporting and accountability mechanisms to monitor progress. Read the report.

As the U.S. not-for-profit healthcare sector faces a barrage of incremental operational and financial pressures, credit quality is beginning to deteriorate and negatively affect ratings, even as many of the larger systems and well-positioned, stand-alone providers perform very well, according to a report published Feb. 14 by Standard & Poor’s Ratings Services (S&P). Taken together, these two trends herald a return of the credit quality gap that was last prominent in the early part of this decade.

“We expect this trend to continue, with downgrades exceeding upgrades in 2008, and possibly more so in 2009 and beyond as the sector heads into a period of greater uncertainty,” said S&P’s credit analyst Martin Arrick. “Furthermore, we believe that providers’ ability to invest sufficiently in capital, while maintaining at least an adequate financial profile, will be a key differentiator over the next several years that will cause the credit quality gap to continue to widen.”

Overall, S&P’s outlook remains mixed for the sector, according to the report, U.S. Not-for-Profit Health Care Shows Stress as Credit Quality Gap Returns. Contributing factors to the increase in lowered ratings include margin compression, weakening balance sheets, and rising competition from traditional and nontraditional sources. In the second half of 2007, the number of lowered ratings (28) was more than double the number of raised ratings (13). S&P has more than 600 acute care hospitals and health systems in its rated universe.

The report is available to subscribers of RatingsDirect. For more information, call 212-438-9823.

Extensive gaps in price information seriously hamper the effectiveness of state drug price comparison web sites, according to a research brief, State Prescription Drug Price web Sites: How Useful to Consumers? released Feb. 13 by the Center for Studying Health System Change (HSC).

As of late 2007, 10 states had web sites providing prescription drug prices available at retail pharmacies--Connecticut, Florida, Maryland, Michigan, Minnesota, Missouri, New Hampshire, New Jersey, New York, and Vermont. All but one of the states use Medicaid pharmacy claims data, which often contain usual and customary price information. The usual and customary price is not the actual price paid by Medicaid for prescription drugs but generally represents a pharmacy’s retail price to a cash-paying customer, absent any discount. The clear drawback to using Medicaid claims data is that price information will be available only in cases where a pharmacy submitted a Medicaid claim containing a usual and customary price for a particular drug, according to the study. Read the research brief.

A government report released Feb. 5 highlights the need for improved communications between emergency responders and health facilities, a key lawmaker said today. Rep. John D. Dingell (D-Mich.), chairman of the Committee on Energy and Commerce, said the report, issued by the Joint Advisory Committee on Communications Capabilities of Emergency Medical and Public Health Care Facilities, underscores the need for nationwide improvements to the way emergency responders and health facilities communicate with one another.

Among its proposals, the committee’s report calls for the development of a national, interoperable broadband network for emergency communications. “Too often today, EMS responders, doctors, and nurses must practice 21st century medicine with 20th century technology,” says the report. Download the report.

CAQH announced Feb. 11 that the eligibility data content section of its Committee on Operating Rules for Information Exchange (CORE) Phase I rules is a final component of the Healthcare Information Technology Standards Panel’s (HITSP) first set of interoperability standards. These standards were formally recognized by Department of Health and Human Services Secretary Mike Leavitt late last month.

This recognition means that those CORE rules, included in HITSP’s consumer empowerment interoperability specifications, can be incorporated into federal agencies’ healthcare programs. It also marks the start of a process through which the Certification Commission on Health Information Technology (CCHIT) can begin testing for CORE data content compliance in products it certifies.

HITSP, a standards panel of the American National Standards Institute, was established to harmonize the hundreds of individual standards needed to create a nationwide health information network. CAQH launched CORE to create an all-payer solution that gives providers access to insurance information before or at the time of service using the electronic system of their choice for any patient or health plan. Read the press release.

Large hospital-by-hospital variations in the intensity with which hospitals treat their seriously ill patients is found not only for patients covered by fee-for-service (FFS) Medicare, but also for those covered by Medicare health maintenance organizations (HMOs) and for nonelderly patients with private insurance. Moreover, hospitals that frequently hospitalize their FFS Medicare patients are also often the same hospitals that have high levels of resource use for other types of patients as well, according to a study of treatment provided by California hospitals to patients with chronic illnesses in their last two years of life. The study, supported by the California HealthCare Foundation, was published Feb. 12 on the Health Affairs web site.

In line with earlier research, the researchers observed wide variation between hospitals in the intensity of treatment provided to Medicare FFS beneficiaries. There was a fivefold difference between the average number of days used by patients associated with the highest-use hospital (47) and the average number of days used by patients associated with the lowest-use hospital (9). Sizable variations in treatment intensity also existed among Medicare HMO, private preferred provider organization/FFS, and private HMO patients. In all three insurance groupings, there was at least a twofold difference in total days used by patients associated with the highest- and lowest-use hospitals. Read the abstract.

In the Feb. 12 issue of the Federal Register, the Department of Health and Human Services published a proposed regulation to implement certain aspects of the Patient Safety and Quality Improvement Act of 2005. The proposed regulations establish a framework by which hospitals, physicians, and other healthcare providers may voluntarily report information to patient safety organizations (PSOs), on a privileged and confidential basis, for analysis of patient safety events. The proposed regulations also outline the requirements that entities must meet to become PSOs, and establish the confidentiality protections for the information that is assembled and developed by providers and PSOs. Comments are due by April 14, 2008.

The publication of the proposed rule appears to be in response to a Jan. 17 letter from Sen. Edward Kennedy to the Government Accountability Office, reported here earlier. Kennedy, chairman of the Health, Education, Labor and Pensions Committee, asked that the GAO investigate why regulations implementing the Patient Safety Act, which would establish PSOs, had still not been fully implemented. Download the proposed rule.

If the national Healthy People 2010 objective to increase insurance coverage of evidence-based tobacco-dependence treatments in all 51 Medicaid programs is to be achieved, Medicaid coverage for tobacco-dependence treatments must increase substantially, according to a report published in the Feb. 8 issue of the Morbidity and Mortality Weekly Report. Despite high smoking prevalence (35 percent) among recipients, high economic burden, and the availability of evidence-based and cost-effective treatments, eight state Medicaid programs did not cover any tobacco-dependence treatments, and only one program (Oregon) covered all recommended treatments in 2006, said the report, State Medicaid Coverage for Tobacco-Dependence Treatments: United States, 2006.

Even in states that provide coverage, there were significant restrictions on the use of these treatments. Providing full Medicaid coverage for all recommended tobacco dependence treatments, eliminating barriers to the use of these treatments, promoting treatment use, and educating Medicaid recipients and providers about coverage are critical to reducing tobacco use among this increased-risk population. Community and policy interventions (such as increasing the price of tobacco products, sustained media campaigns encouraging cessation and promoting available treatments, comprehensive smoke-free policies, and state-funded “quit lines”) complement the clinical treatments of tobacco use and increase quit attempts and quitting success. Read the report.

The National Business Group on Health (NBGH) and the Department of Health and Human Services’ Office of Minority Health (OMH) on Feb. 11 announced a new two-year effort to build new business-community coalitions to reduce racial and ethnic health disparities and improve the quality of health care for minority populations. The collaboration is part of the National Partnership for Action, a broader effort by HHS and OMH to bring continued national emphasis on ending health disparities.

"We encourage employers to make sure their health care benefits and health improvement programs meet the needs of a culturally diverse workforce," said Helen Darling, president of NBGH. "Our alliance with OMH supports our commitment to raise awareness about the health and cost repercussions of these disparities and to provide employers with information and practical strategies to assess and reduce racial and ethnic health disparities within their workforce."

Among the collaboration’s plans are to update its analysis of the business case for addressing health disparities, identify best practices for the business community in addressing racial and ethnic disparities among their workforces, and develop a toolkit to assist employers in implementing best practices. Read the press release.

Primary care physicians should exert broader control in managing their patients’ chronic diseases and be compensated accordingly for their enhanced role in overall care coordination, a new study from the Deloitte Center for Health Solutions concludes.

According to the report, The Medical Home: Disruptive Innovation for a New Primary Care Model, expanding the oversight and treatment role of primary care physicians could mean short-term financial pain for hospitals and some health plans, and could aggravate the current manpower shortage without broadening the scope of ancillary providers’ practice. But the study also found that the long-range benefit is clear. Pressure to adopt a medical home approach is driven by two critical factors--the shrinking number of primary care physicians and the growing incidence/prevalence of chronic disease among the U.S. population. Download the report.

The Robert Wood Johnson Foundation (RWJF) and the David and Lucile Packard Foundation (Packard) each announced grant projects on Feb. 6 intended to strengthen state health reforms. Packard’s Finish Line Project and RWJF’s Consumer Voices for Coverage will provide 18 advocacy organizations in 14 states with technical and financial resources. Consumer Voices for Coverage will concentrate broadly on state healthcare reform initiatives; the Finish Line Project will focus on providing coverage for all children.

Funded by the Packard Foundation, the Finish Line Project is a $15 million, five-year grant-making strategy providing financial and technical support to advocacy organizations in Arkansas, California, Colorado, Iowa, Ohio, Rhode Island, Texas, and Washington. Consumer Voices for Coverage, a $15 million three-year initiative, will strengthen existing advocacy networks in California, Colorado, Illinois, Maine, Maryland, Minnesota, New Jersey, New York, Ohio, Oregon, Pennsylvania, and Washington.

Standard & Poor’s Ratings Services (S&P) announced Feb. 7 that it has begun implementing a broad set of 27 new actions to further strengthen its ratings operations and better serve capital markets around the world.

The actions include enhancements in four areas: governance (to strengthen the integrity of the ratings process), analytics (to ensure transparency regarding assumptions), information (to provide market participants with greater transparency about the ratings process), and education (to help market participants better understand what a credit rating is and is not).

“The ongoing transformation of the financial markets requires us to continue to bring more innovative thinking, greater resources, and improved analytics to the ratings process,” said Deven Sharma, president of S&P. “By further enhancing independence, strengthening the ratings process, and increasing transparency, the actions we are taking will serve the public interest by building greater confidence in credit ratings and supporting the efficient operation of the global credit markets.” Read about the new actions.

Large employers say they are not ready to bail out of their role of acting as the backbone of health insurance coverage in the United States, according to an article published Feb. 7 by the nonpartisan Employee Benefit Research Institute (EBRI). Though very concerned about rising health benefit costs, employers say they continue to support an employment-based system because they believe they will end up paying “one way or the other” and because they believe the most innovation comes out of the private sector, not out of the government sector, the article says.

Nevertheless, the article notes they are watching competitors closely. If one big sponsor takes the first step and decides to drop benefits, others say they would likely follow, reports the article, “The Future of Employment-Based Health Benefits: Have Employers Reached a Tipping Point?” in the February 2008 EBRI Notes, which summarizes discussion at EBRI’s December 2007 policy forum.

Uninsured patients in California are paying net prices for hospital treatment that are as high as and higher than prices paid by Medicare, according to a new study by researchers at RAND and the University of Southern California (USC) published Feb. 5 on the Health Affairs web site. The study comes on the heels of a crucial vote in a state Senate committee against a comprehensive plan to cover uninsured people in the nation’s most populous state.

Using data collected from 2001 through 2005 by the California government, the researchers found that, on average, hospitals in that state collect a higher percentage of their list prices--known as “charges”--from uninsured patients than from those covered by Medicare. Over the 2001-02 period, hospitals collected 18 percent more of their charges from uninsured patients than from Medicare patients; by the 2004-05 period, that difference had risen slightly to 20 percent of charges. The median uninsured patient--the patient midway between the patient who paid the highest percentage of charges and the patient who paid the smallest percentage--paid a portion of hospital charges that was 8 percent higher than Medicare paid in 2001-02 and 1 percent lower than Medicare paid in 2004-05. Read the abstract.

Changing the way consumers pay for prescription drugs so that the system more closely resembles paying for cell phones or computer software could increase drug use without altering patients’ out-of-pocket spending, health plan costs, or drug company profits, according to a RAND Corporation study published in the January-February issue of Health Affairs.

Researchers propose that consumers pay an annual “license” fee that would entitle them to a year’s worth of medicine for each prescription they take on an ongoing basis, with a very small or no copayment for each monthly supply. Such a system could be used to pay for medicines that treat chronic conditions such as high cholesterol, diabetes, or asthma without increasing the cost to consumers and may reduce the periods when patients go without such medicines because of the cost, according to the study report, “Drug Licenses: A New Model for Pharmaceutical Pricing.”

Because there would be no monthly out-of-pocket payments for consumers, researchers suggest that patients would be more likely to take their prescriptions. Analyzing past research about the impact of rising copayments on patient compliance, researchers suggest the average annual use among patients taking statins, for example, would climb from 7.8 months to 9.8 months under the new pricing plan. Read the abstract.

The Centers for Medicare and Medicaid Services (CMS) has released the 9th Statement of Work (SOW) for Medicare’s 53 quality improvement organizations (QIOs). The 9th SOW provides CMS additional tools to better manage the QIOs by linking the work completed by the organizations to measurable outcomes reviewed and measured during the entire length of the three-year contract, which begins Aug. 1, 2008.

As part of the contract requirements, QIOs will center their improvement efforts on protecting beneficiaries, care transitions, patient safety, and prevention. Each program has measurable criteria, close monitoring, and performance improvement plans to gauge each QIOs performance under the contract. In addition, the QIOs will help Medicare promote value-driven health care, support the adoption and use of interoperable health IT, and reduce health disparities in their communities.

CMS evaluated the QIOs in all 53 jurisdictions to determine the quality and effectiveness of how each organization met the 8th SOW contract requirements. Based on that review, the QIOs from eight states--California, Minnesota, Mississippi, North Carolina, Nevada, New York, Oklahoma, and South Carolina--are being required to compete for contract awards under the 9th SOW because these contractors did not meet all the performance criteria outlined in the 8th SOW and did not meet the criteria CMS developed for automatic renewal.

Providers who routinely verify patient insurance eligibility and benefits through electronic or other means experience higher rates of paid accounts. That is the key finding from a newly released study conducted by CAQH, a nonprofit alliance of health plans and trade associations.

The CORE Phase II Patient Identification Study was conducted by CAQH as part of its Committee on Operating Rules for Information Exchange (CORE) initiative. CAQH launched CORE to develop a set of universal operating rules aimed at simplifying communication and administrative processes between providers and health plans.

The study, which included inpatient facilities and ambulatory physician practices in California and New York, will be used to help create CORE Phase III operating rules aimed at improving patient identification. The goal is to develop rules for more flexible matching criteria, which will enhance automated, real-time processing of eligibility inquiries and responses.

Hospital quality continues to improve while patient mortality rates and hospital costs are declining among participants in a Centers for Medicare and Medicaid Services (CMS) pay-for-performance demonstration project, according to a recent analysis by the Premier healthcare alliance.

According to the analysis, of 1.1 million patient records from participating hospital quality incentive demonstration (HQID) hospitals, if all hospitals nationally were to achieve the three-year cost and mortality improvements found among the HQID project participants for pneumonia, heart bypass, heart failure, heart attack (acute myocardial infarction), and hip and knee replacement patient populations, they could save an estimated 70,000 lives per year and reduce hospital costs by more than $4.5 billion annually. The 1.1 million patient records represented in this analysis encompass 8.5 percent of all patients nationally within the five noted clinical areas over the three-year timeline of this analysis.

On average, the median hospital cost per patient for participants in the CMS, Premier HQID project declined by more than $1,000 across the first three years of the project, whereas the median mortality rate decreased by 1.87 percent. Read the press release.

With some federal and state policy makers considering ways to encourage more people to purchase nongroup, or individual, healthcare coverage, a new analysis by Kaiser Family Foundation researchers examines how often people at different income levels buy such coverage when they do not have access to employer coverage or do not obtain public coverage.

The analysis, How Non-Group Health Coverage Varies with Income, finds that relatively few people at lower incomes purchase nongroup coverage, with one in 20 purchasing it among those with incomes at the federal poverty level ($18,660 for a family of four in 2003 dollars). As income increases, the coverage rate increases, though even at four times the poverty level, only about a quarter of individuals purchased coverage. And among those with incomes at least 10 times the poverty level, only about half purchased coverage in the nongroup market. The analysis does not assess the reasons why people do not purchase nongroup insurance, which could include a perceived lack of affordability or value associated with the coverage, a willingness to remain uninsured for a period of time, or restrictions imposed by insurers based on health status. Download the report.

In its January 2008 industry outlook, Moody’s Investors Service reported that it has a stable credit outlook for the not-for-profit healthcare sector in 2008, though its outlook for 2009 and 2010 is less certain. For 2008, positive factors driving the outlook include an industry focus on operating effectiveness that keeps margins favorable, a continued improvement in balance sheet position, and still favorable Medicare reimbursement rates. The negative factors that Moody’s notes include a slowing patient volume growth, a continued deceleration of commercial rate increases, and higher capital spending that will likely continue, resulting in more debt or greater use of earnings.

Moody’s highlighted the improvement in hospital financial planning as a long-term positive factor. It has found more organizations integrating its strategic, financial, and capital planning into one process. Previously, these analyses were often done independently with little integration. Moody’s finds that many providers adhere to more rigorous capital allocation models, with a business plan and ROI needed to justify the expenditures. However, the hospital industry continues to be challenged by the regulatory, policy, and funding volatility, which necessitates a strong commitment to planning. Moody’s has found more board oversight and engagement in planning activities as well as a greater involvement of physicians and nurses in the planning process.

For more information, call (212) 553-1653.

The IRS has announced that Form 8868, Application for Extension of Time to File an Exempt Organization Return, is being revised in response to new procedures for processing extension requests. In the past, the form allowed filers to designate an alternate mailing address for sending a copy of an approved extension.

All filers requesting an extension of time to file an exempt organization return (other than Form 990-T) receive an additional three months to file and may request an additional three months if needed. (Form 990-T filers generally receive an automatic six-month extension.) Under the new procedures, the IRS now sends Notice CP 211 to notify filers of the action taken on their extension request. This notice is mailed to the address listed on its records.

In addition, as revised, Form 8868 no longer includes space for an alternate mailing address for sending a copy of an approved extension to your representative. If your tax representative wants to receive a copy, you must file Form 2848, Power of Attorney and Declaration of Representative, or Form 8821, Tax Information Authorization. Read the announcement.