HFMA NEWS

The Centers for Medicare and Medicaid Services (CMS) did a better job of getting the final hospice conditions of participation rule out than it expected, releasing the rule just after publishing an extension earlier this week. The final rule revises the existing conditions of participation that hospices must meet to participate in the Medicare and Medicaid programs. It focuses on the care delivered to patients and their families by hospices and the outcome of that care, and allows hospices flexibility in meeting quality standards.

The rule has been delivered to the Federal Register and will be published June 5. Download the rule.

The United States could reduce total healthcare spending and improve the quality of patient care if the plan proposed May 29 by America’s Health Insurance Plans (AHIP) was implemented, say analysts at PricewaterhouseCoopers. They reviewed AHIP’s proposals and estimates and concluded that if these proposals are fully implemented, the nation’s total healthcare expenditures could be $145 billion lower than currently projected by the year 2015.

The AHIP proposal would cover every American through a public-private, federal-state approach. In December 2007, AHIP’s board released a proposal to guarantee access to healthcare coverage in the individual market and announced support for third-party review of rescission decisions and their commitment to limiting pre-existing condition exclusions.

“The nation faces complex healthcare challenges and only an integrated strategy that addresses costs, quality, and access will bend the cost curve and allow the country to ensure that all Americans have access to affordable health care,” said Karen Ignagni, president and CEO of AHIP. Download the proposal.

In 2005, about 60 percent of the adult U.S. civilian noninstitutionalized population age 18 and over had at least one chronic condition, according to a new study published by the Agency for Healthcare Research and Quality. The proportion of adults with at least one chronic condition increased dramatically with age, ranging from 36.4 percent of young adults age 18-34 to 91.5 percent of the elderly age 65 and over. The proportion of persons with two or more chronic conditions also rose dramatically with age, ranging from only 14.4 percent among individuals age 18-34 to 76.6 percent of the elderly age 65 and over. Read the statistical brief.

States vary widely in the quality of health care children receive, as well as children’s access to care, family insurance premiums, equity, and the potential to lead long, healthy, productive lives, according to a new scorecard issued by The Commonwealth Fund. The scorecard assesses how the health system is performing for children across these five dimensions on a state-by-state basis.

The report, U.S. Variations in Child Health System Performance: A State Scorecard, ranked states on 13 indicators for children grouped in categories that include access, quality, costs, equity, and healthy outcomes. Although no single state performed at the top across all categories, some states far surpassed others. While the rate of uninsured children varies widely across states, from 5 percent in Michigan to 20 percent in Texas, the scorecard found that states with the highest rankings on access to care--meaning that they have nearly all of their children insured--were almost uniformly among the best scorers on quality of care and equity measures. However, there was room for improvement in even the highest-ranked states, which fell short of established standards on some indicators. Read the overview.

In an article published in the May/June Health Affairs, economist Paul B. Ginsburg, PhD, of the Center for Studying Health System Change (HSC), discusses the advantages and shortcomings of employer-based health coverage, how individual health insurance could be a viable alternative to employer-based coverage, and why care should be taken not to undermine employers’ role in providing coverage.

In his article “Employment-Based Health Benefits Under Universal Coverage,” Ginsburg notes that a slow decline in the proportion of Americans with employer-based health coverage has fueled concerns about the future role of employers in providing coverage. At the same time, “most recognize that today’s individual market is not an attractive alternative to employer-sponsored coverage,” Ginsburg writes.

Regional insurance exchanges--marketplaces managed by government or a private entity operating under government-established rules where individuals choose coverage offered by competing carriers--potentially could create pooling mechanisms similar to those available to people with employer coverage, according to the article. However, although insurance exchanges have promise, Ginsburg writes that they are “an attractive concept developed by thought leaders. Many design issues will have to be thrashed out in the policy process, and many operational problems are likely to be encountered and will need to be worked through. It would be better to do this learning with the tens of millions of people without access to employer-based coverage than with the entire privately insured population.” Read the press release.

In a white paper released May 22 by the Food and Drug Administration (FDA), the agency describes plans for the Sentinel Initiative, which will include the development of a new electronic system that will enable FDA to query a broad array of information to identify possible post-market adverse events. The white paper, titled The Sentinel Initiative: A National Strategy for Monitoring Medical Product Safety, describes the proposed system and calls for a public-private collaboration to develop and implement it. The system will capitalize on existing large electronic claims and medical records data sources maintained by private and government entities that agree to participate in the nationwide effort.

The system would enable FDA to analyze significantly more information than it can currently by tapping into vast databases of health information to detect early signs of emerging safety problems. Creating an active surveillance system such as the Sentinel Initiative was one of the recommendations made by the Institute of Medicine in a 2006 report on ways to improve the safe use of drugs. Read the white paper.

Citing the complexity of the final rule and scope of public comments received in response to the proposed rule, the Centers for Medicare and Medicaid (CMS) has extended the timeline for publication of the hospice conditions of participation final rule. The notice appeared in the May 27, 2008, Federal Register.

Originally published May 27, 2005, the proposed rule would have established new conditions of participation for Medicare-participating hospices. The proposed revisions were intended to reflect an interdisciplinary, patient-centered approach to care planning and delivery and allowing hospices flexibility in meeting quality standards. CMS noted that extensive coordination has been needed to ensure that the provisions in the final rule follow guidelines of all administrative agencies that would be affected by the rule. Also, the final rule updates and revises policies, some of which were originally established in 1983; therefore, “the incorporation of these updates has required extensive time, outreach, and collaboration to ensure that the final rule’s provisions are consistent with current best practices in the provision of hospice services,” states the notice. Read the notice.

Despite requests that it consider delaying the enforcement of the May 23, 2008, National Provider Identifier (NPI) deadline, the Centers for Medicare and Medicaid Services (CMS) reminded all Medicare providers and suppliers that as of that date, they are required to use only an NPI to identify healthcare providers in all Health Insurance Portability and Accountability Act (HIPAA) standard transactions used in the Medicare fee-for-service program.

The final rule adopting the NPI as the standard unique health identifier for healthcare providers was published Jan. 23, 2004, and became effective on May 23, 2005. All HIPAA-covered entities had to be in compliance with NPI provisions by May 23, 2007, except for small health plans, which were given an extra year. As of last Friday, all healthcare providers and suppliers who submit claims to Medicare contractors (fiscal intermediaries, carriers, A/B Medicare administrative contractors (MACs), and durable medical equipment MACs) must use their NPIs to identify themselves and any other healthcare providers and suppliers on those claims. If a standard transaction is sent to Medicare with a Medicare legacy identifier in any of the provider fields, the transaction will be rejected. Read the press release.

The billing provider National Provider Identifier (NPI) is missing in 4.9 percent of institutional claims, and the billing provider and pay-to-provider (when present) is missing in almost 10 percent of such claims, according to an analysis conducted recently by Emdeon Business Services. To determine the extent to which providers’ current submissions comply with standards, Emdeon analyzed 1.9 million institutional claims that it received the week of May 12, 2008.

Among other key findings, the analysis revealed that if payers were to strictly require NPI data content for all providers included in claims, these payers could potentially reject almost 34 percent of claims, leading to significant cash flow issues for hospitals. The findings are troubling, given that all Medicare providers and suppliers are required to use only an NPI as of May 23. Read the overview.

More than 30 communities have applied to participate in the U.S. Department of Health and Human Services’ new electronic health record (EHR) demonstration project, which will offer primary care physician practices Medicare incentive payments to use certified EHRs to improve the quality of patient care. HHS Secretary Mike Leavitt remarked that this level of interest in the project “shows the great appetite for programs that offer incentives to physicians who efficiently use EHRs to improve the quality of care they provide to their patients.” HHS anticipates that the five-year project will improve the quality of care for about 3.6 million Americans.

HHS will announce the 12 communities selected for the EHR demonstration in early June. In the fall of 2008, the Centers for Medicare and Medicaid Services (CMS) will beginning working with four of these communities to recruit the project’s participating small- and medium-sized primary care physician practices. CMS will begin recruitment activities with the remaining eight communities in 2009.

Find more information at the CMS and HHS web sites about the EHR demonstration project and about the broader HHS initiative, Connecting to Better Health Care, of which the EHR demonstration project is a part.

Pay-for-performance initiatives that use an efficiency index (EI) to measure physician performance often hinder efforts to reduce overuse of services, a new study suggests. By focusing directly on ways to reduce overuse--without the limitations of EI methodology--physicians could have a more significant impact on improving cost efficiency, according to the study.

The study, “Beyond the Efficiency Index: Finding a Better Way to Reduce Overuse and Increase Efficiency in Physician Care,” was published as a Health Affairs web exclusive (Greene, R.A., et al., May 20, 2008). Researchers for the study suggest an alternative approach to measuring physician performance: determining which interventions are the main drivers of cost for specific conditions, then assessing whether physicians who use these interventions most frequently are obtaining better outcomes or simply generating higher costs. The model was applied to treatment of hypertension as well as fiberoptic laryngoscopy (a procedure that evaluates problems with swallowing). Read the study.

The U.S. Department of Health and Human Services has launched a national print advertising campaign to promote Hospital Compare, its hospital quality reporting web site. The web site provides scores on 26 quality and patient satisfaction measures for almost 4,000 U.S. hospitals. The ads, which appeared May 21 in 58 major daily newspapers, invite readers to “Compare the Quality of Your Local Hospitals.” The ads highlight two quality measures for hospitals in the newspapers’ market: the percentage of patients at each hospital who always received help when they requested it, and the percentage of patients at each hospital who were given antibiotics one hour prior to surgery. The ads also give the state average for the two measures.

Hospital Compare enables consumers to comparison shop for a hospital. “These ads--and Hospital Compare--are intended to give consumers more information about making choices about their health care,” said HHS Secretary Mike Leavitt. “This brings us closer to meeting the goal of using new technologies to make the quality of healthcare services all across the nation more transparent to the public.” For more information, read CMS’s press release announcing its ad campaign, or go to the Hospital Compare web site.

The Centers for Medicare & Medicaid Services (CMS) has released the names of the 325 supplier participants in a competitive bidding program that aims to provide certain durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) to Medicare beneficiaries at substantially lower-than-current prices. The first round of the program goes into effect on July 1, 2008, in 10 communities across the United States. CMS notes that as a result of bids submitted by these suppliers, DMEPOS prices could be 26 percent lower, on average, than the prices Medicare currently pays for the same items. 

To participate in the program, suppliers had to meet quality and financial standards that ensure they are “viable companies able to meet the needs of Medicare beneficiaries and the terms of their contracts with Medicare.” A list of participating suppliers in the 10 initial areas of the program is available at the Medicare web site (under “Search Tools” select “Find Suppliers of Medical Equipment in Your Area”) or by calling 1-800-MEDICARE. 

CMS also announced that it has extended the accreditation deadline for the second round of the competitive bidding program, which encompasses 70 metropolitan statistical areas (MSAs) across the United States. To participate in this round, suppliers now must be accredited or have applied for accreditation by July 21, 2008, (formerly May 14, 2008). The final accreditation deadline for the second round of competitive bidding is now January 14, 2009. 

Go to the CMS web site for additional information on the DMEPOS competitive bidding program.

On May 19, the Centers for Medicare and Medicaid Services (CMS) issued an interim final rule with comment (IFC) modifying the “25 percent threshold policy” for certain long-term care hospitals (LTCHs) and LTCH satellites and establishing moratoria on new LTCHs and LTCH satellites, and bed increases in existing LTCHs and LTCH satellites. The IFC addresses payment policies under the LTCH prospective payment system mandated by the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA).

Under the 25 percent threshold policy, before rate year 2008, if an LTCH hospital-within-a-hospital (HwH) admitted more than 25 percent of its patients from its collocated host hospital, CMS generally applied an adjustment to payment for those discharges in excess of the 25 percent of admissions from the host hospital. CMS did not apply the adjustment, however, to “grandfathered” HwHs or LTCH satellites.  On May 1, 2007, in the rate year 2008 final rule CMS extended the 25 percent threshold payment adjustment to include the grandfathered HwHs and LTCH satellite facilities, and also extended the payment adjustment to patients from hospitals with which the LTCH or satellite facility was not co-located. In the May 19, 2008, IFC, CMS has delayed the extension of the 25 percent threshold payment adjustment to “grandfathered” LTCH HwHs and to freestanding LTCHs for three years and has increased the patient percentage thresholds from 25 percent to 50 percent for certain LTCH HwH and satellite discharges admitted from a colocated hospital, and from 50 percent to 75 percent for certain LTCH HwH and satellite discharges admitted from a co-located rural, MSA-dominant, or urban single hospital.  These provisions are effective for cost reporting periods beginning on or after December 29, 2007, and before December 29, 2010.

CMS will accept comments on the IFC--which is to be published in the May 22, 2008, Federal Register--until July 21, 2008.

To find out more about the IFC, and for detail about the on LTCHs, LTCH satellites, and bed increases in existing LTCHs and LTCH satellites, go to CMS’s fact sheet on the rule or the rule posted on the CMS web site.

CMS is soliciting applications from healthcare providers in Texas, Oklahoma, Colorado, and New Mexico for the Acute Care Episode (ACE) demonstration, a new demonstration intended to test the use of a global payment for an episode of care as an alternative approach to payment for service delivery. According to CMS, “Bundled payment for such episodes should foster coordination of care between hospitals and physicians as well as produce savings to the Medicare program.” The focus of the demonstration will be on cardiac and orthopedic inpatient surgical services.

CMS will clarify issues and answer questions regarding the ACE demonstration in an informational teleconference for potential applicants and other interested parties, scheduled for June 4 from 3 to 4:30 pm EST. The call-in number is (888) 982-4492 (with the passcode “Acute Care”). More information about the demonstration is available at the ACE demonstration web page. 

Average total medical spending for a “typical family of four” reached$15,609 in 2008, an increase of $1,109 over the preceding year, according to the fourth annual Milliman Medical Index (MMI), released May 14 by the actuarial firm.

The MMI tracks the changes in average yearly healthcare costs when a family of four is covered by an employer-sponsored preferred provider organization. The new Milliman study determined that the average annual medical cost for a family of four increased by 7.6 percent from 2007 to 2008. This was lower than the 8.4 average annual rate of increase for the period 2003-07, but the burden of overall expense is steadily shifting to employees. Download the report.

State nursing home inspectors miss or minimize deficiencies--such as malnutrition, severe bedsores, overuse of medications, and abuse--that pose a serious, immediate threat to patients, according to a report released May 15 by the Government Accountability Office (GAO).

State inspectors visit most nursing homes once annually under contract with the federal government. Federal officials in some cases accompany state inspectors or make subsequent visits to the facilities to check the results of the inspections. According to the report, from 2002 to 2007, federal officials found that state inspectors had missed at least one serious deficiency at nursing homes in 15 percent of the inspections they checked. In nine states, federal officials found that state inspectors had missed at least one serious deficiency in 25 percent of the inspections they checked, said the report. Download the report.

The Bush administration improperly issued a policy directive last year that restricts states’ abilities to expand their SCHIP programs, the Government Accountability Office (GAO) and the Congressional Research Service (CRS) said May 15 during a House Energy and Commerce Health Subcommittee hearing. The Aug. 17, 2007, policy directive requires states to enroll 95 percent of children in families with incomes up to 200 percent of the federal poverty level (FPL) before expanding coverage to children in families with incomes greater than 250 percent of the FPL. During the hearing, Morton Rosenberg, a legal specialist for CRS, and Dayna Shah, managing associate general counsel for GAO, said the directive amounted to a regulation and should have been vetted in Congress using the same process as other administrative rules.

States have argued that meeting the enrollment requirement is impossible, and several states have filed lawsuits against the federal government to block the directive. The Bush administration says the directive is aimed at preventing families from dropping private health coverage to enroll in SCHIP. Read the GAO report.

The Centers for Medicare and Medicaid Services (CMS) on May 16 announced a new demonstration for hospitals to test the use of a bundled payment for both hospital and physician services for a select set of episodes of care. The goal of the acute care episode (ACE) demonstration is to use a global payment to better align the incentives for both types of providers to improve quality and efficiency. The demonstration will also test the effect that transparent price and quality information has on beneficiary choice and provider referrals for select inpatient care.

The select sets of procedures included in the bundled payment demonstration are 28 cardiac and nine orthopedic inpatient surgical services. These elective procedures were selected because profit margins and volume have historically been high; there is sufficient marketplace competition to ensure interested demonstration applicants, the services are easy to specify, and quality metrics are available for them.

The ACE demonstration is open to applicants from Colorado, New Mexico, Oklahoma, and Texas. Access the CMS information page.

Coordinating the discharge of hospital patients before 12:00 noon can significantly improve the flow of patients in emergency departments (EDs) by making more inpatient beds available to emergency patients, according to a report released by the American College of Emergency Physicians. The report recommends other high-impact, low-cost solutions to address the problem of holding or “boarding” patients who have been admitted to the hospital in the ED, a primary cause of overcrowding.

The report, Emergency Department Crowding: High-Impact Solutions, includes other recommendations, including moving admitted patients out of the ED to inpatient areas. With each unit taking a small number of patients, the burden of boarding is more evenly spread throughout the hospital. Also, coordinating the scheduling of elective patients and surgical cases is another approach; studies demonstrate that the uneven influx of elective patients (heaviest early in the week) is a prime contributor to exceeding capacity, said the researchers. Download the report.

Research published in the June 2008 issue of the Joint Commission Journal on Quality and Patient Safety shows significant variation in the quality of care provided by health systems across the country. In the findings, not-for-profit health systems had, on average, quality scores 7 percent higher than for-profit health systems, and more centralized health systems had 5 percent higher overall quality scores than decentralized health systems.

Researchers with the Network for Regional Healthcare Improvement analyzed data from more than 70 health systems, representing more than 1,500 hospitals in the United States. Variation on quality scores in 19 publicly reported quality measures for health systems was substantial, ranging from 70 percent to 94 percent overall. Additionally, for-profit health systems and systems that are more decentralized were appreciably lower in quality scores for pneumonia, heart failure, heart attack, and surgical care. Read the abstract. Access the list of rankings.

Health savings accounts (HSAs) are a short-sighted remedy that fails to address the real obstacles to health care for Americans, especially lower-income women, said Judy Waxman, JD, vice president for health and reproductive rights at the National Women’s Law Center (NWLC). She testified May 14 at the House Ways and Means Subcommittee on Health hearing on HSAs.

Although proponents of HSAs state that they encourage saving for future healthcare expenses and allow consumers more control over healthcare choices, the NWLC maintains that HSAs are the wrong solution for uninsured women and families. Key reasons include the fact that high-deductible health plans require greater out-of-pocket spending, which will have the most impact on women. And because women are disproportionately represented among America’s low-income population, they are also less likely to benefit from any possible tax breaks or savings through HSAs, said Waxman. Read her testimony.

A coalition of chief executives from several healthcare companies and organizations has announced an industrywide healthcare reform proposal intended to improve accessibility and quality of care. The health proposal, titled Closing the Gap: A Proposal to Develop Affordable, Quality Health Care to All Americans, was unveiled May 13 at a Chicago press briefing by the Healthcare Leadership Council.

The proposal calls for a number of approaches, including:
• Fully funding public coverage programs, while allowing dollars from the Medicaid and State Children’s Health Insurance Program to be used to fund subsidies to help workers unable to afford their share of employer-provided health coverage
• Eliminating tax-treatment disparities felt by people who purchase individual health insurance
• Restructuring healthcare payment systems to encourage and reward positive outcomes
• Speeding up the movement toward a nationwide health information network

Health industry leaders have scheduled meetings to discuss the proposal with leaders of key U.S. Senate and House committees, and plan to present it to the Democratic and Republican presidential campaigns. Read the proposal.

In an article in the May-June 2008 issue of Health Affairs and an accompanying issue brief, Commonwealth Fund researchers lay out a plan that would insure 44 million of the estimated 48 million uninsured Americans in 2008. The proposed approach could save $1.6 trillion over 10 years if it is coupled with efforts to reform how the United States pays for health care, invest in better information systems, and adopt initiatives to improve public health.

The “building blocks” plan would preserve employer-sponsored health insurance, Medicaid, and the State Children’s Health Insurance Program, and build on the existing success of the Medicare program by offering a Medicare-like option along with a choice of private health plans through a national health insurance “connector.” The insurance connector would be open to small businesses, the self-employed, and everyone without large employer insurance or Medicare. The premiums for the new Medicare option, called Medicare Extra, would be an estimated $259 per month for individuals and $702 a month for families, 30 percent less than the average premiums currently charged to employers. The plan to expand health insurance coverage would cause minimal disruption for people satisfied with their current coverage, and any decisions to switch to the new coverage would be voluntary.

“This approach builds on group insurance coverage and the national reach of Medicare and at the same time addresses the high administrative and premium costs for individuals and small groups,” said Commonwealth Fund president and article co-author Karen Davis. “It also demonstrates that it is possible to buy more for our healthcare dollars, cover all Americans with high-quality insurance, and institute real reforms to stem rising healthcare costs, saving $1.6 trillion over 10 years.” Read the abstract.

Despite the prominent role that healthcare reform is playing in the 2008 presidential election, leading Republican and Democratic pollsters agree that deep partisan divides among voters--combined with a worsening economy--may permit only incremental, rather than sweeping, changes to the healthcare system. The perspectives of political pollsters William McInturff and Celinda Lake are featured in a far-reaching thematic issue on health reform in the May/June 2008 issue of Health Affairs.

Republican pollster McInturff and colleague Lori Weigel analyze data from multiple national public opinion surveys to show how lingering perceptual barriers that doomed previous major reform efforts may do the same this round. And Democratic pollsters Celinda Lake, Robert Crittenden, and David Mermin present key opportunities and drawbacks for healthcare reform. Although the 2008 election could “set the stage for the most significant reform of the U.S. healthcare system since Medicare,” Lake and colleagues warn that the political system is slow to act and that a well-funded opposition will work hard to prevent major change.

Indiana’s Family and Social Services Administration (FSSA) announced May 9 that the federal government has approved the state’s request to expand the State Children’s Health Insurance Program (SCHIP). Families who earn up to 250 percent of the Federal Poverty Level (FPL)--approximately $53,000 for a family of four--are now eligible. The approval means that approximately 10,000 more children will receive coverage.

The program will start year-round eligibility for children, regardless of changes to a family’s income, and will include telemedicine as a benefit.

Last August, CMS had issued a controversial directive that appeared to preclude states’ ability to extend coverage beyond 200 percent of the FPL. Read the press release.

Kicking off during National Hospital Week May 11-17, the Nebraska Hospital Association (NHA) will launch a new web site, Care Compare, to allow users to access charge information for several types of inpatient hospitalizations at any Nebraska hospital. Consumers can select a hospital by county or city, then select the reason for hospitalization and can compare charges by severity level with those of other hospitals in the region; to other hospitals with similar patient volume; and to other hospitals across the state as a whole. In addition to charges, the number of discharges, average length of stay, and the average age of patients are displayed.

The web site also offers links to several preferred sites that measure hospitals on quality of care, including the Centers for Medicare and Medicaid Services’ Hospital Compare and The Joint Commission.

The public will have an opportunity to discuss and share their opinions, suggestions, and expertise on the wage index and alternative methods for computing it at a special open door forum (conference call) to be held May 20 at 2:00 EST. Participants will be asked to comment on nine matters related to the wage index, the Medicare Payment Advisory Commission’s recommendations, and CMS’s FY09 IPPS proposed rule. The comment period for the FY09 IPPS proposed rule ends on June 13, 2008.

An audio recording of this forum will be posted to the special open door forum web site and will be accessible for downloading beginning May 28, 2008.

In a letter sent to state health officials on May 7, CMS clarified that states would have the opportunity to suggest other strategies than what were in the agency’s original directive to prevent crowd-out in State Children’s Health Insurance Program (SCHIP) enrollment at high income levels. The letter also reiterates that none of the crowd-out strategies outlined last year need to be applied to children currently enrolled in SCHIP, as some states had believed. Also, states do not need to apply the 12-month waiting period or any cost-sharing requirements to children in families with incomes at less than 250 percent of FPL, and should not apply any crowd-out policies to unborn children eligible for SCHIP. Read the letter.

The Centers for Medicare and Medicaid Services (CMS) on May 7 announced a new project to encourage Medicare beneficiaries to track their healthcare services and better communicate with their providers.

The CMS pilot uses an online personal health record (PHR) to give Medicare beneficiaries the ability to collect and access information about their health or healthcare services, such as medical conditions, hospitalizations, physician visits, and medications. The pilot test will take place in South Carolina, where beneficiaries will be given an opportunity to use a PHR populated by their own Medicare claims data.

The pilot, which began on April 4, 2008, is expected to run for 12 months, and CMS will use information gathered from the pilot to determine future steps with respect to PHRs. Read the press release.

CMS on May 8 proposed enhanced protections for beneficiaries who are enrolled in Medicare Advantage (MA) health plans and Medicare prescription drug plans. CMS’s actions are intended to strengthen marketing standards and extend additional protections to all beneficiaries, including those receiving the low-income subsidy (LIS) and beneficiaries enrolled in special needs plans. It also would introduce several new MA and prescription drug plan requirements.

Among other provisions, the proposed plan marketing standards would prohibit cold-calling and expand the current prohibition on door-to-door solicitation, prohibit sales activities at educational events such as health information fairs, and require MA organizations to use state-licensed agents to market MA and Part D plans.

The rule also would grant CMS greater flexibility in determining penalty amounts against Medicare Advantage or Part D plans that violate Medicare rules in ways that adversely affect beneficiaries.

Comments are due by July 15, 2008. Read the proposed rule.

CMS announced on May 7 that National Heritage Insurance Corporation (NHIC) has been awarded a contract of up to five years for the combined administration of Part A and Part B Medicare claims payment in Alaska, Idaho, Oregon, and Washington. NHIC will take claims payment work now performed by two fiscal intermediaries and one carrier in the four states. The Part A/Part B Medicare Administrative Contractor (A/B MAC) contract has an approximate value of $148 million over five years.

As the A/B MAC contractor, NHIC will immediately begin implementation activities and will assume full responsibility for the claims processing work in its four-state jurisdiction by Dec. 31, 2008. NHIC, headquartered in Hingham, Mass., is the seventh new Part A/Part B MAC to be named by CMS. By 2011, 15 new Part A/Part B Medicare contractors will cover every state and the District of Columbia. Read the press release.

Health insurance coverage and unpaid health care for full-time workers and their family members without employer coverage costs the U.S. public $45 billion a year, according to a report from The Commonwealth Fund released May 2. This includes $33 billion in the cost of public coverage such as Medicaid and the State Children’s Health Insurance Program, and $12 billion in uncompensated care expenses--which are paid by federal, state, and local governments and shifted to other payers--provided to uninsured workers and dependents.

The report, Who Pays for Health Care When Workers Are Uninsured?, by Sherry Glied and Bisundev Mahato at Columbia University, found that 19 million full-time workers and their dependents were uninsured in 2004, compared with 16 million in 1999. Eleven million workers and their dependents were enrolled in public programs in 2004, up from 6 million in 1999, a 70 percent increase over the five-year period.

The cost borne by the public for workers not covered by their own employers is largely a result of fewer workers and worker family members obtaining health insurance coverage through their employers, even among those employed by firms with more than 100 employees, write the researchers. Read the report.

Faced with more patients seeking care for nonemergencies, safety net hospital emergency departments (EDs) are working to redirect patients to outpatient clinics, community health centers, and private physicians, with varied results, according to a study released May 7 by the Center for Studying Health System Change (HSC).

The study’s findings are detailed in a new HSC issue brief, Safety Net Hospital Emergency Departments: Creating Safety Valves for Non-Urgent Care.

Among other study findings, some EDs are helping patients with nonurgent conditions identify other providers and schedule appointments. A Miami ED added a nurse practitioner to determine which patients could be treated in a clinic, and administrative staff to schedule appointments with primary care or dental clinics. Over the course of 18 months, ED staff referred an average of 50 patients a day to clinics--almost double what they initially expected and approximately 15 percent of total ED volume. Read the issue brief.

People in fair or poor health who have health insurance are less likely to drop or lose coverage entirely if they have individual insurance than if they have small-group coverage, according to a new national study report published May 6 on the Health Affairs web site. In particular, the study found that among workers in relatively worse health, those with small-group coverage who became unemployed were substantially more likely to also become uninsured than their counterparts with individual coverage.

Study authors Mark Pauly and Robert Lieberthal of the Wharton School at the University of Pennsylvania say this result stems largely from a unique policy feature generally included in individual health insurance policies: guaranteed renewability at class-average rates. This means that while an insurer may condition the price and availability of newly issued individual insurance policies on health status, an existing policyholder “has an unqualified right to renew at the rate charged to others” in his or her risk class, regardless of any change in his or her health status. “By contrast, insurers may often raise premiums for group coverage, or even withdraw coverage entirely, when the risk composition of the group changes,” write the authors.

“Our findings don’t mean that individual coverage is universally preferable,” said Pauly. “But group coverage has a tear in its safety net: It leaves a person whose health deteriorates more vulnerable to becoming uninsured than does individual coverage.” Read the abstract.

In testimony before the Committee on Oversight and Government Reform, five hospital leaders presented material demonstrating that the proposed cuts to Medicaid would cause the nation’s trauma centers to “go under” if they took effect. The committee held the first of two days of hearings May 5 on the impact of the Medicaid regulations, slated to take effect May 26, on hospital emergency surge capacity.

Despite the warnings that “America’s emergency departments are already operating at or over capacity,” said committee chairman Rep. Henry Waxman (D-Calif.), “the Department [of Health and Human Services] has issued three Medicaid regulations that will reduce federal funds to public and teaching hospitals by tens of billions of dollars over the next five years.”

“This is incomprehensible,” said Waxman. “It appears that Secretary Leavitt signed regulations that will take hundreds of millions of dollars away from hospital emergency rooms without once considering the impact on national preparedness.” Read the testimonies.

CMS on May 2 announced the final regulation establishing RY09 federal payment rates and policies for long-term care hospitals (LTCHs). The nearly 400 LTCHs across the nation are acute care hospitals that treat some of Medicare’s most severely ill or medically complex patients.

The agency issued a final payment rule for RY09 that increases the standard federal rate for LTCHs by 2.7 percent from the 2008 rate established by Congress in the Medicare, Medicaid, and SCHIP Extension Act of 2007. That increase establishes a standard federal rate for RY09 of $39,114.36 and is applicable to discharges during the 15-month period from July 1, 2008, through Sept. 30, 2009. Aggregate LTCH prospective payment system payments for RY09 are estimated at approximately $4.47 billion under the final rule--an increase of approximately $110 million over estimated payments in RY08. Read the press release.

The Centers for Medicare and Medicaid Services (CMS) on May 1 announced its proposal for new, more accurate FY09 payment rates for Medicare skilled nursing facilities (SNFs) that more closely reflect differences in patient care needs.

The agency is proposing to recalibrate the case-mix weights in order to reestablish budget neutrality on a prospective basis. CMS is also proposing to recalibrate the second part of the refinement package that accounted for the use of non-therapy ancillary services. The proposed FY09 recalibration of these adjustments to better reflect the resources used by beneficiaries would result in a reduction in payments to nursing homes of $770 million, or 3.3 percent. However, this decrease would be largely offset by this fiscal year’s proposed update to Medicare payments to SNFs. The update--a proposed market basket increase of 3.1 percent for FY09--would yield $710 million in increased payments to SNFs. Taken together with the proposed recalibration of the case mix index, SNFs could expect to see a slight decrease in payments of $60 million, or 0.3 percent. Public comments on the proposal will be accepted until June 30, 2008. Download the proposed rule.

The Centers for Medicare and Medicaid Services (CMS) on April 28 issued a proposed rule to update and revise the Medicare hospice wage index for FY09.

The agency proposes to phase out an outdated adjustment to the hospice wage index that was put into place over 10 years ago. Elimination of this special adjustment--the budget neutrality adjustment factor (BNAF)--which remains based on 24-year-old wage data, will save Medicare $2.29 billion over five years and would update the hospice wage index to reflect current wages, according to CMS. Although hospice payment rates are projected to increase in 2009, it is estimated that the increase will be approximately 1.1 percent lower for FY09, the first year of the three-year phase-out of the adjustment.

The BNAF is proposed to be phased out over three years, beginning with a 25 percent reduction in FY09, an additional 50 percent reduction (for a total of 75 percent) in FY10, and a complete elimination in FY11. The reduction in hospice payments would be netted against annual market basket increases. Currently the market basket increase for RY09 is estimated to be 3.0 percent; the actual update, however, will not be available until July.

The proposed rule appeared in the Federal Register May 1. A final rule will be published in August 2008.

Finding Answers: Disparities Research for Change, a national program of the Robert Wood Johnson Foundation (RWJF) housed at the University of Chicago, is awarding more than $2.5 million to 10 organizations that are working to eliminate racial and ethnic healthcare disparities in their communities.

Each of the 10 grant recipients will receive up to $275,000 to evaluate their proposed interventions aimed at reducing disparities in the health outcomes of patients in their communities. Grantees will focus on cardiovascular disease, depression, and diabetes--diseases where evidence of racial and ethnic disparities in care is strong and the recommended standards of care are clear. Read the press release.

One in four people who lack health coverage in the United States are eligible for public insurance programs but are not enrolled due to barriers that make it difficult, says a new report released April 29 by the National Institute for Health Care Management Foundation (NIHCM), a Washington-based think tank. About 12 million people (half of whom are children) are reachable by Medicaid and the State Children’s Health Insurance Program (SCHIP) but fail to enroll because they are not aware these programs exist, do not know how to enroll, or fear being linked with a publicly financed program. It can also be difficult for them to stay enrolled.

The report emphasizes that any solutions will need to expand access to public programs or otherwise subsidize coverage for low-income people to make any real difference.

The 20-page report, Understanding the Uninsured: Tailoring Policy Solutions for Different Subpopulations, segments the uninsured according to their eligibility for public programs, income, and whether they are a child, a parent, or a childless adult. Using 2006 data from the 2007 Current Population Survey, researchers describe a range of policy options to extend coverage to these groups, as well as options for reaching uninsured young adults and older adults who are not yet eligible for Medicare. Read the report.

The Centers for Medicare and Medicaid Services (CMS) has requested clearinghouses that submit claims to fee-for-service Medicare to participate in a one-day National Provider Identifier (NPI) preparation exercise. Specifically, on May 7, 2008, participating clearinghouses should submit Medicare claims with NPI-only in all provider identifier fields for which a provider uses NPI/legacy pairs. In other words, clearinghouses will strip the legacy identifiers when they are submitted as part of an NPI/legacy pair.

Fields already containing NPI-only will be sent to Medicare, as usual, and secondary provider identifier fields containing legacy-only will be sent to Medicare, as usual. This exercise will help Medicare providers evaluate their NPI readiness prior to the May 23, 2008, deadline.

On May 8, participating clearinghouses will revert to sending Medicare NPI/legacy pairs as received from the providers. Access more NPI guidance.

CMS will host an NPI roundtable to address additional questions from the Medicare provider community regarding Medicare’s NPI implementation. The roundtable will be on May 14 from 2:00 to 3:30 p.m. EDT. Providers will be able to submit questions through the online registration system at the time they sign up for the call. Get registration details.

A Government Accountability Office (GAO) brief released on April 30 reports that health savings accounts (HSAs) are used more often as a tax shelter by wealthy individuals rather than as a mechanism to help working families obtain needed health care.

Specifically, the report finds that instead of being used by low- and middle-income Americans most likely to be without health insurance, HSAs are increasingly a popular tax shelter option for wealthy taxpayers.

GAO’s findings are bolstered by HSA advocates’ extreme opposition to legislation passed earlier this month in the House (HR 5719) that would require HSA enrollees to substantiate that HSA withdrawals were used for allowable medical expenses. Data from at least one company indicate that HSA funds appear to have been spent on escort services, at casinos and bowling facilities, and in other non-health related areas. On the other hand, flexible spending accounts, a different tax-preferred health account with fewer tax breaks than HSAs, require substantiation. In addition, the federal government requires far more onerous verification standards to qualify for Medicaid and for the Part D low-income subsidy. Read the brief.

Healthcare costs rank among Americans’ top personal economic problems, and their struggles to deal with those costs have affected both their financial well-being and their family’s health care, a new Kaiser Family Foundation poll finds.

Nearly three in 10 Americans (28 percent) report that they or their families have had a serious problem paying for health care and health insurance as a result of recent changes in the economy, behind paying for gasoline (44 percent) and nearly tied with getting a good-paying job or raise in pay (29 percent). Reports of families facing serious economic problems extend up into middle-income families, with 28 percent of those earning between $30,000 and $75,000 reporting a serious problem paying for health care or health insurance as a result of recent changes in the economy.

Also, 24 percent now report skipping a recommended medical test or treatment in the past year because of the cost, up from 17 percent in 2005. Read the survey brief.