HFMA NEWS

Recognizing the difficulties low-income people face in getting dental care, many communities are attempting to provide more dental services to vulnerable residents, according to a study released July 24 by the Center for Studying Health System Change (HSC).

Lack of dental care is the key contributor to oral health problems, with low-income people and some racial and ethnic minorities receiving fewer dental services than higher-income people and whites, according to the Agency for Healthcare Research and Quality. Poor oral health may contribute to other health problems, including heart and lung disease, stroke, and premature births.

Along with state efforts to increase dentists' participation in Medicaid and the State Children's Health Insurance Program (SCHIP), hospitals, community health centers, health departments, dental schools, and others are working to expand dental services, according to the HSC study. The study’s findings are detailed in a new HSC issue brief, Community Efforts to Expand Dental Services for Low-Income People. The study is based on HSC’s 2007 site visits to 12 nationally representative metropolitan communities; HSC has been tracking change in these markets since 1996. Read the issue brief.

Women who receive a diagnosis of diabetes before they become pregnant are three to four times more likely to have a child with one or even multiple birth defects than a mother who is not diabetic, according to a study by the Centers for Disease Control and Prevention (CDC), released in the online issue of the American Journal of Obstetrics and Gynecology.

The article from the National Birth Defects Prevention Study (NBDPS), “Diabetes Mellitus and Birth Defects,” shows that pregnant women with pregestational diabetes mellitus (prepregnancy diagnosis of diabetes, such as type 1 or type 2 diabetes) are more likely than a mother with no diabetes or a mother with gestational diabetes mellitus (pregnancy-induced diabetes) to have a child with various types of individual or multiple birth defects. This includes heart defects, defects of the brain and spine, oral clefts, defects of the kidneys and gastrointestinal tract, and limb deficiencies.

The associations of gestational diabetes with various birth defects were noted primarily among women who had prepregnancy obesity, which is a known risk factor for both diabetes and birth defects. In the United States, the prevalence of gestational diabetes has been increasing in recent years and currently affects about 7 percent of all pregnancies, resulting in more than 200,000 cases annually. Read the study report.

Public spending for health care goes disproportionately to seniors and those in poor health, but it is less concentrated among low-income Americans than is sometimes thought. In a study published July 29 on the Health Affairs web site, government analysts provide the first study since the 1970s that comprehensively analyzes the distribution of healthcare outlays and healthcare tax subsidies provided by federal, state, and local governments. By breaking down public spending on health by age, race, sex, health status, coverage status, and income, the work fills important knowledge gaps as the United States begins a fundamental debate over the role of the public sector in the healthcare system.

Using the most recent data available in sufficient detail, Healthcare Research and Quality (AHRQ) researchers report that public outlays and tax expenditures constituted 56.1 percent of all healthcare spending in 2002. Overall, public spending on the civilian, noninstitutionalized population averaged $2,612 per person. Of that amount, $1,867 per person came from outlays through Medicare, Medicaid, and other programs, while $745 per person came from health-related tax subsidies, predominantly the exclusion of the value of employer-sponsored health insurance from federal and state taxes.

Some groups benefited from public-sector health spending more than others. Public spending in 2002 disproportionately flowed to those age 65 and over. Medical expenses tend to increase with age, so it is perhaps not surprising that the average senior received $6,921 in public spending, more than five times as much as the average child ($1,225). Read the abstract.

The monthly rate of complaints from Medicare beneficiaries about the prescription drug benefit decreased by 74 percent during the 18-month period that ended on Oct. 31, 2007, according to a report recently released by the Government Accountability Office (GAO). For the report, GAO examined almost 630,000 complaints filed with the Centers for Medicare and Medicaid Services (CMS) during the review period. The monthly rate of complaints decreased from a peak of 2.86 complaints per 1,000 Medicare beneficiaries in May 2006 to 0.73 in October 2007, and the time needed to resolve complaints decreased from 33 days to nine days, the report found.

However, the report found that CMS did not resolve many of the most important complaints--those that involve Medicare beneficiaries who might exhaust their supplies of necessary medications--in an adequate amount of time. According to the report, CMS should resolve complaints that involve Medicare beneficiaries who have less than a two-day supply of necessary medications within two calendar days, but the agency on average took 12 days to resolve such complaints. Read the report.

On July 24, the House approved a resolution (H. Res. 1368) putting off any action this year on the so-called Medicare “trigger.” That section of the act contained the trigger provision that said Congress would have to reduce Medicare spending if the trustees, in two consecutive years, should predict that more than 45 percent of the program’s funding will come from the general fund. The second prediction came last year. Congress would have been required to act on the president’s savings proposals or alternatives by the end of July 2008.

Department of Health and Human Services Secretary Mike Leavitt in a statement on July 24 took issue with the action of the House leadership, saying in a press release, “The Congressional Budget Office may have determined that budget gimmicks contained in Medicare legislation passed last week meet the technical requirements of the trigger law. But parliamentary sleight-of-hand will do nothing to resolve the enormous financial challenges presented by Medicare in the near future.”

Potentially preventable medical errors that occur during or after surgery may cost employers nearly $1.5 billion a year, according to new estimates by the Department of Health and Human Services’ Agency for Healthcare Research and Quality (AHRQ).

In “Impact of Medical Errors on 90-Day Costs and Outcomes: An Examination of Surgical Patients,” a study report published in the July 25 online issue of the journal Health Services Research, AHRQ researchers found that insurers paid an additional $28,218 (52 percent more) and an additional $19,480 (48 percent more) for surgery patients who experienced acute respiratory failure or postoperative infections, respectively, compared with patients who did not experience either error.

The study also found that one of every 10 patients who died within 90 days of surgery did so because of a preventable error and that one-third of the deaths occurred after the initial hospital discharge. The study was based on a nationwide sample of more than 161,000 patients age 18 to 64 in employer-based health plans who underwent surgery between 2001 and 2002. The authors used AHRQ’s patient safety indicators to identify medical errors.

The researchers conclude that studies that focus only on medical errors incurred during the initial hospital stay may underestimate the financial impact of patient safety events by up to 30 percent. Read the abstract.

Using confidential information on drug prices to compare the costs of drugs purchased under the Medicare Part D program with the costs of drugs purchased under traditional Medicaid, the House Committee on Oversight and Government Reform found that Medicare Part D pays on average 30 percent more for drugs than does Medicaid, resulting in a windfall worth more than $3.7 billion for drug manufacturers in the first two years of the Medicare Part D program. The report, Medicare Part D: Drug Pricing and Manufacturer Windfalls, was released July 24.

The report examined drug benefit spending for about 6 million dual eligibles. In 2006, the first year of the drug benefit, Medicare paid $1.7 billion more for the 100 most commonly used drugs by dual eligibles than Medicaid would have paid. In 2007, Medicare paid about $2 billion more than Medicaid would have paid. Medicaid, on average, gets discounts of about 30 percent on drugs for beneficiaries. Medicare receives a discount of about 8 percent on average through its drug benefit. Read the report.

The Health Resources and Services Administration (HRSA) announced July 23 that it had received many substantive comments on its proposed rule changing how it designates medically underserved populations and health professional shortage areas. Based on a preliminary review of the comments, HRSA said it will need to make a number of changes in the proposed rule, and will issue a new proposed rule for further review and public comment prior to issuing a final rule.

On Feb. 29, 2008, HHS first published its proposed rule on this matter. The initial notice provided a 60-day comment period, but due to the level of interest in the proposed rule, two 30-day extensions of the comment period were published in the Federal Register, one in April and the second in June. Read the announcement.

The U.S. Department of Energy (DOE) has announced the launch of an initiative to increase the use of energy-efficient technologies in U.S. hospitals. The DOE notes these facilities are among the nation’s most energy-intensive commercial buildings, with energy costs mounting to more than $5 billion in the past year, and with energy intensity and carbon dioxide emissions 2.5 times those of commercial office buildings.

The EnergySmart Hospitals initiative, which is part of the DOE’s Building Technologies Program, has the goals of improving efficiency by 20 percent in existing facilities and by 30 percent over current standards in new construction, and to not only save millions in energy costs, but also reduce carbon dioxide emissions. Among the tools and resources that the initiative will provide are advanced energy design guides for small and large hospitals, technology assessments, and an interactive web site.

The decline in state finances over the past year has been worse than expected, according to a new report released July 23.

The National Conference of State Legislatures' State Budget Update: June 2008 is based on information collected from legislative fiscal directors in June and early July, and covers the revenue and expenditure situation for all 50 states and Puerto Rico. More states reported gaps for FY09 than for FY08, with the cumulative total more than tripling from about $13 billion to more than $40 billion. Also, states have taken the lead in healthcare reform, with many expanding eligibility for the State Children's Health Insurance Program, and are finding that health care is costing considerably more than they expected.

Fiscal deterioration is not across the board, however; states that have significant portions of their tax bases tied to natural resources seem to have escaped major budget problems, and several of these states report tax collections are much higher than expected. Also, the leisure and hospitality sector is robust in 11 states. Read the press release.

Beginning in 2009, and during the next four years, Medicare will provide incentive payments to eligible professionals who are successful electronic prescribers. Eligible professionals will receive a 2 percent incentive payment in 2009 and 2010, a 1 percent incentive payment in 2011 and 2012, and a one-half percent incentive payment in 2013.

Beginning in 2012, eligible professionals who are not successful electronic prescribers will receive a reduction in payment. Eligible professionals may be exempted from the reduction in payment, on a case-by-case basis, if it is determined that compliance with the requirement for being a successful prescriber would result in significant hardship.

Medicare is expected to save up to $156 million over the five-year course of the program in avoided adverse drug events. It’s been estimated that Medicare beneficiaries experience as many as 530,000 adverse drug events every year, contributed to in part by negative interactions with other drugs, or a prescriber’s lack of information about a patient’s medication history. Read the press release.

HHS Secretary Michael Leavitt on July 21 announced awards of more than $49 million in grants to 30 states that provide health insurance to residents who cannot get conventional health coverage because of their health status.

The states will use the grants to offset losses that they incurred operating high-risk pools, which are typically state-created not-for-profit associations that offer health coverage to individuals with serious medical conditions. Grant funds also provide support for disease management for chronic conditions and premium subsidies for individuals with lower incomes. Enrollment in these pools is growing, with more than 200,000 individuals enrolled in state pools.

Funds were allocated based on the number of uninsured individuals in each state and the numbers of individuals enrolled in each pool. This year’s grants are in addition to approximately $286 million that states have received since 2003 to support this program. Read the press release.

As the number of working-age adults who have major chronic conditions grew between 1997 and 2006, those without health coverage in this group experienced substantial erosion in access to health care, according to a new study by Kaiser Family Foundation researchers published on July 22 as a Health Affairs Web Exclusive.

The number of working-age adults who reported having at least one of seven major chronic conditions grew 25 percent since 1997, to a total of nearly 58 million by 2006. Besides overall growth in the adult population, the increase over the period reflects rising rates of chronic disease prevalence among nonelderly adults.

Although large differences in access to care between uninsured and insured adults with chronic conditions existed in 1997, the insurance divide grew even wider by 2006. In general, the proportions of Medicaid enrollees and privately insured people having problems getting care were similar, and both proportions were much lower than the proportion of the uninsured who experienced problems getting care, after adjusting for social and health differences among the different groups.

Adequate financing for long-term care, improving the quality of long-term care services, and developing an adequate, skilled workforce are some of the urgent challenges facing long-term care in the future, say four of five respondents to the latest Commonwealth Fund/Modern Healthcare Health Care Opinion Leaders Survey. Nearly four of five (79 percent) respondents favor or strongly favor adding a long-term care benefit to Medicare, financed by a premium, to pay for care.

More than two-thirds (69 percent) of respondents to the survey believe it is very important (41 percent) or important (28 percent) that the health reform plans of the presidential candidates address the quality and financing of long-term care. Opinion leaders surveyed include experts from four broad healthcare sectors: academia and research organizations; healthcare delivery; business, insurance, and other health industry; and government and advocacy groups. Elected officials and media representatives were excluded.

A majority of healthcare opinion leaders say that long-term care costs should be shared by individuals and the government (55 percent), while 26 percent say costs should be shared by individuals, employers, and the government. Read the data brief.

Almost two-thirds of global health leaders surveyed by the Health Research Institute of PricewaterhouseCoopers thought the performance of their country’s health system was good or very good. However, less than 40 percent gave the payment system a grade of good or better. Those findings are among many others outlined in the new report You Get What You Pay For: A Global Look at Balancing Demand, Quality, and Efficiency in Healthcare Payment Reform.

To better understand how to structure payment incentives and to learn what other countries are doing, the Health Research Institute of PricewaterhouseCoopers conducted more than 30 in-depth interviews with leaders representing hospitals, government organizations, and the business community in more than 10 countries and conducted a global survey of more than 200 healthcare executives from 20 countries. The report provides a global perspective on the problems nations face and the solutions that are being implemented in response.

Without immediate action to develop an integrated, comprehensive, national health workforce policy, the United States is at risk of losing its status as the global healthcare leader, states a new report released by the Association of Academic Health Centers (AAHC). The report was funded in part by the Josiah Macy, Jr. Foundation.

Out of Order, Out of Time: The State of the Nation’s Health Workforce warns that the nation is running out of time to ensure an adequate health workforce to meet the needs of our aging population, such as the increased demand for health services and other critical socioeconomic challenges for health care.

Key recommendations in the report include developing an integrated, comprehensive national health workforce policy and establishing a national planning body to create a national workforce agenda and promote a national health workforce policy that ensures the nation’s health and economic well-being. Diverse federal and state agencies, along with multiple public and private stakeholders, should participate, said the report.

Officials from Anthem Blue Cross and Blue Shield of California on July 17 agreed to pay $13 million in fines and offer new health plans to more than 2,200 California residents who had their coverage rescinded after becoming ill and incurring large medical bills, the Los Angeles Times reports. Under the agreement, Anthem will pay a $10 million fine to the state Department of Managed Health Care (DMHC) and will offer new policies to the 1,770 former members who have had their coverage canceled since 2004, while Blue Shield will pay a $3 million fine to DMHC and will offer new policies to the 450 former members who have had their coverage canceled since 2004.

In addition, the insurers agreed to establish a process for former policyholders to be compensated for medical costs they paid out of pocket after they were dropped from their plan, as well as other damages, such as loss of home or business resulting from bad credit due to unpaid medical debts. Neither insurer admitted any wrongdoing under the agreement.

In related news, House Oversight and Government Reform Committee Chair Henry Waxman (D-Calif.) at a hearing on health insurance policy rescissions that same day said that the committee will launch a broad investigation into practices used by private health insurers in the individual market.

A new national scorecard from The Commonwealth Fund Commission on a High Performance Health System finds that the U.S. healthcare system has failed to improve overall and that scores on access have declined significantly since the first national scorecard in 2006. Despite spending more on health care than any other industrialized nation, the United States overall continues to fall far short on key indicators of health outcomes and quality, with particularly low scores on efficiency.

In the report, Why Not The Best? Results From The National Scorecard on U.S. Health System Performance, 2008, the United States scored an average of 65 out of a possible 100 across 37 key indicators of health outcomes, quality, access, efficiency, and equity--slightly below the overall score in the 2006 scorecard. Even more troubling, the health system is on the wrong track when it comes to access and affordability. The number of uninsured and underinsured continues to rise. As of 2007, 42 percent of all working age adults were either uninsured or underinsured--up from 35 percent in the four years since 2003.

However, there is also evidence that focusing on specific areas through national initiatives can yield substantial improvement. For example, hospital standardized mortality ratios, a key indicator of patient safety, improved by 19 percent over five years, following broad public and private efforts to assess and improve hospital safety. Download the report.

Two new surveys by National Public Radio (NPR), the Kaiser Family Foundation, and the Harvard School of Public Health examine the pocketbook problems facing people in two presidential swing states, Ohio and Florida, including their struggles with gas prices, getting and keeping a well-paying job, and affording health care.

The surveys, Health Care and the Economy in Two Swing States: A Look at Ohio and Florida, also take an in-depth look at the impact of medical bills on family finances and health care and provide insights into the way healthcare costs affect people’s daily life decisions. The telephone surveys, conducted between May 21 and June 4, involved statewide representative samples of 1,358 adults in Florida and 1,201 adults in Ohio. Access the summary and chartpack.

As a result of the July 15 enactment of the Medicare Improvements for Patients and Providers Act of 2008, the mid-year 2008 Medicare physician fee schedule (MPFS) rate reduction of -10.6 percent is retroactively replaced with the fee schedule rates in effect from January through June 2008, which reflected a 0.5 percent update from 2007 rates.

It may take up to 10 business days to implement the new law’s changes. The Centers for Medicare and Medicaid Services (CMS) will post the new physician fee schedule as soon as possible and will continue its rolling 10-day hold and release of claims. Thus some claims may still be paid at the lower rates that were in effect between July 1 and July 15. Contractors will automatically reprocess any claims paid at the lower rates. Read the fact sheet.

CMS on July 16 announced payment of more than $36 million in bonus payments to many of the more than 56,700 health professionals who satisfactorily reported quality information to Medicare under the 2007 Physician Quality Reporting Initiative (PQRI).

Physicians, physician group practices, and other PQRI eligible professionals should receive their payments by August 2008. The average incentive amount for individual professionals is more than $600; average incentive payment for a physician group practice is more than $4,700, with the largest payment to a physician group practice totaling more than $205,700. Read the press release.

Yesterday, as expected, President Bush vetoed the Medicare bill containing the physician payment cut restoration--and both the House and Senate overrode the veto within hours of his action. The House vote was 383 to 41; in the Senate it was 70 to 26. In his veto message, Bush said he objected to the bill because it would get its funding from a reduction in federal payments to Medicare Advantage.

As a result of the bill's passage, the mid-year 2008 Medicare Physician Fee Schedule (MPFS) rate of -10.6 percent has been replaced with a 0.5 percent update, retroactive to July 1, 2008. Physicians, nonphysician practitioners, and other providers of services paid under the MPFS should begin to receive payment at the 0.5 percent update rates in approximately 10 business days or less. Medicare contractors are currently working to update their payment system with the new rates.

In addition to setting aside the 10.6 percent cut in Medicare payments to physicians that took effect on July 1, the bill also:

* Extends the effective date of the exceptions process to the therapy caps to December 31, 2009; outpatient therapy service providers may now resume submitting claims with the KX modifier for therapy services that exceed the cap furnished on or after July 1, 2008.
* Terminates durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) competitive bidding contracts awarded under round 1 of the program and restarts the bidding and contracting process in those areas in 2009. The bidding process for round 2 will begin in 2011. Payment adjustments for DMEPOS in noncompetitive bid areas will not take effect until round 2 is completed.
* Exempts rural areas and metropolitan statistical areas with a population of less than 250,000 from competitive bidding for at least five years.
* Eliminates the Medicare Advantage adjustment for indirect medical education payments.
* Gives pharmacies that are located in, or that provide services to, long-term care facilities no less than 30 days and no more than 90 days to submit their claims for reimbursement to the drug plans.
* Requires Part D drug plans to pay pharmacies within 14 days for properly completed claims that are filed electronically, and within 30 days for claims submitted otherwise.
* Requires the Secretary of Health and Human Services to modernize the dialysis payment system by implementing a fully bundled payment system for end-stage renal disease, effective Jan. 1, 2011.

Access the bill summary.

The nation’s preparedness to respond to a large-scale public health emergency, such as an influenza pandemic, is inadequate, but it could be improved by using the same quality improvement (QI) techniques commonly used in the healthcare delivery sector, researchers report in an article published July 15 on the Health Affairs web site.

Originally developed in manufacturing, QI represents “a systematic approach to understanding and measuring performance, identifying solutions to performance shortfalls, and implementing changes to improve outcomes.” The article describes the successful use of a pilot QI learning collaborative, involving five state and local health departments, designed to improve readiness for an influenza pandemic.

The researchers cite a number of improvements achieved by participating agencies during the nine months the learning collaborative was in existence. For example, the Genesee County Health Department in Michigan increased the percentage of its staff responding to an e-mail alert within 90 minutes from 50 percent to 83 percent. Read the abstract.

In a letter to the Government Accountability Office (GAO) on July 11, House Energy and Commerce Committee Chairman John Dingell (D-Mich.) and Ways and Means Committee Chairman Charles Rangel (D-N.Y.) asked the GAO to undertake a study of the Medicare recovery audit contractor (RAC) demonstration program. Citing the fact that there had been “numerous reports of problems with the implementation of the program” and the “substantial challenges” that arose during the pilot program, the letter requested that GAO review the program before its permanent implementation begins later this summer.

Specifically, the chairmen asked that the GAO examine changes made in response to lessons learned during the pilot program, including CMS oversight of auditing efforts. Read the letter.

Medication histories recorded for trauma patients in a rural population were highly inaccurate and incomplete due to communication problems among hospital personnel and difficulties in obtaining complete medical histories from patients who have trouble speaking or remembering exactly what medications they take. The study was published online in the Annals of Emergency Medicine.

Researchers studied 234 trauma patients in a rural setting, the majority of whom were moderately injured. Medication lists given upon admission to the hospital were inaccurate 85 percent of the time. Ten patients were ordered wrong medications, and one adverse drug event (hypoglycemia) occurred. Some of the reasons that medication lists were incomplete included poorly informed or forgetful patients or accompanying family members, patients taking medications from pharmacies who would not divulge patient information, and patients with multiple physicians outside the hospital who did not know what the others were prescribing.

“Across health care, medicine-related errors are the costliest ‘disease’ in America, principally because we have no good system for recording all of a patient’s medications,” said Miller. Read the press release.

The Centers for Medicare and Medicaid Services (CMS) on July 11 released a new evaluation report showing that $693.6 million in improper Medicare payments was returned to the Medicare trust funds between 2005 and March 2008. The funds returned occurred after taking into account the dollars repaid to healthcare providers, the money overturned on appeal, and the costs of operating the RAC demonstration program.

Of the overpayments, 85 percent were collected from inpatient hospital providers; the other principal collections were 6 percent from inpatient rehabilitation facilities and 4 percent from outpatient hospital providers.

Most of the improper payments that the RACs identified occurred when healthcare providers submitted claims that did not comply with Medicare’s coverage or coding rules. The types of inadvertent errors leading to improper payments found by the RACs include billing for a procedure multiple times (for example, when a healthcare provider charged Medicare for conducting three colonoscopies on the same patient on the same day), incorrectly coded procedures, and submission of duplicate claims resulting in two payments to a provider.

The program began in California, Florida, and New York in 2005 and in July 2007 expanded to Arizona, Massachusetts, and South Carolina. Access the report.

The National Association for the Self-Employed (NASE) released data in June from its national survey measuring the impact of rising healthcare costs on microbusinesses and the self-employed. Among the survey findings, of the more than 46 percent of responding businesses offering health insurance, only 18.6 percent offer coverage for full-time employees--a significant decline from 2005, when 46.2 percent reported covering full-time employees.

The survey of nearly 4,000 microbusinesses, a follow-up to research conducted in 2005, shows that high cost continues to be the most significant barrier to offering health insurance and that small businesses strongly feel they are at a disadvantage compared with their larger counterparts when it comes to access to coverage. Access the report.

Today almost 160 million people in the United States obtain health insurance through an employer in large part because the tax system subsidizes the purchase of employer-sponsored coverage. The current subsidy costs the U.S. Treasury more than $200 billion in lost revenue because premiums for employer-provided health coverage are excluded from income taxes and from payroll taxes.

A new issue brief by Kaiser Family Foundation researchers, Tax Subsidies for Health Insurance, uses examples of workers with different wage earnings to illustrate how the current tax code affects families depending on whether they have health coverage, and whether that coverage is provided through their employer. By excluding the value of employer-sponsored health benefits from taxable income, the current law generally provides a larger subsidy to higher-income families, since higher-income workers pay federal and state income taxes at a higher marginal tax rate than lower-income workers. Read the issue brief.

A report released in June by Families USA spotlights the concerns of mayors nationwide, who say that cities are on the front lines of the nation’s growing healthcare crisis. Skyrocketing healthcare costs for municipal employees and the rising tide of uninsured people provided with safety net services threaten to force cuts in other basic city services, such as police and fire protection, schools, parks, and the repair of city streets and other infrastructure.

The key conclusion of the report, America’s Health Care Crisis: Cities on the Front Lines, is that mayors and city councils must aggressively deal with healthcare challenges on a daily basis, while federal officials delay action on meaningful reform.

Among the survey’s findings, cities are experiencing new demands for health clinics, hospital emergency departments, mental health services, and problems affecting schools. Also, cities are seeking significant increases in eligibility levels for Medicaid and the State Children’s Health Insurance Program. Read the report.

In new opinion research of medical group practice management professionals, members sounded off to the Medical Group Management Association (MGMA) about managing a variety of challenges while safeguarding their practices’ financial solvency.

According to the MGMA research, the major challenges of running a group practice include maintaining physician compensation in an environment of declining reimbursement, dealing with operating costs that are rising more rapidly than revenue, selecting and implementing a new electronic health record system, recruiting physicians, and managing finances with the uncertainty of Medicare reimbursement rates.

Conducted online in March 2008, the survey asked members who manage medical group practices to rate their level of challenge on 34 practice and professional issues and invited them to write comments as well. MGMA received 1,393 responses (a 12 percent response rate) and more than 500 written comments. The research is published in the July 2008 issue of MGMA Connexion magazine. Read the report.

The Office of National Drug Control Policy announced on July 2 that 10 states have activated new substance abuse prevention and treatment health codes for screening and brief intervention (SBI) of Medicaid-eligible patients. Those states will reimburse physicians and affiliated medical professionals who screen their Medicaid-eligible patients for a spectrum of substance use behaviors and disorders.

Iowa, Maryland, Minnesota, Montana, Oklahoma, Oregon, Tennessee, Virginia, and Washington, have activated American Medical Association Common Procedural Terminology codes or Centers for Medicare and Medicaid Services Healthcare Common Procedure Coding System codes for screening and brief intervention; Wisconsin is conducting screening and brief intervention as part of a comprehensive package of health services for pregnant women. Access the SBI web page.

Coverage of 26 health benefits mandated under Massachusetts’ health insurance law account for 12 cents of every $1 paid for health insurance; statewide, the mandates cost about $1.3 billion annually, according to a report released July 7 by the state Division of Health Care Finance and Policy.

The report reviewed studies about the mandates and estimated that most of them were cost-effective. However, the report suggested that regulators consider removing several mandates that are not considered to be the standard of care, such as bone marrow transplants for breast cancer treatment. The report also found that five of the coverage mandates--maternity care, mental health, home health, pediatric preventive care, and infertility services--account for 80 percent of the total cost of mandated benefits. Excluding benefits mandated by federal law, the state’s mandates would cost up to $687 million annually, or roughly 6 cents of every $1 paid for health insurance, according to the report. Download the report.

Like the United States, China is grappling with a serious obesity epidemic, with more than 25 percent of its adults considered overweight or obese and the rate of overweight adults in the country growing remarkably fast, reports a new study in Health Affairs. Movement toward a Western diet and declining physical activity are helping drive up obesity and overweight rates among the Chinese, a pattern that researchers predict will double by 2028 without efforts to address the problem.

Along with an increase in obesity, China is experiencing a large increase in nutrition-related causes of death, including coronary heart disease and cancer. According to the study, since 1985, deaths from diseases linked to poor diets have increased from 48 percent to 61.8 percent in urban areas and from 34.5 percent to almost 46 percent in rural areas. The loss in productivity and increased medical costs represents about 4-8 percent of the gross domestic product. Read the abstract.

AARP, the Robert Wood Johnson Foundation (RWJF) and the U.S. Department of Labor (DOL) on June 26 convened a summit of multistakeholder groups to identify solutions to the nurse faculty shortage that is resulting in nursing schools turning away thousands of qualified nursing candidates each year. The Nursing Education Capacity Summit in Washington, D.C., included 18 state teams that came together to share best practices to expand nursing education and to foster action in four key areas, including increasing faculty capacity and diversity, and education redesign.

A white paper, Blowing Open the Bottleneck: Designing New Approaches to Increase Nurse Education Capacity, was released at the summit. The paper highlights programs that are making progress in addressing both shortage and education capacity problems in nursing. Download the paper.

New data indicate that more than one in four adult Americans without medical insurance have a mental illness or substance use disorder, or both. But many state healthcare initiatives intended to cover the uninsured are neglecting these conditions, according to a report by the National Alliance on Mental Illness and the National Council for Community Behavioral Healthcare.

According to the report, Coverage for All: Inclusion of Mental Illness and Substance Use Disorders in State Healthcare Reform Initiatives, mental illness is the leading cause, and substance use is the second leading cause, of disability among adults. Approximately one-third of these groups, living below the federal poverty line, do not have insurance.

The report reveals that benefits for mental illness and substance use treatment vary greatly across states. Among the report’s findings, few states are including mental illness and substance use disorders in wellness and chronic disease management programs. Also, based on a study of 18 states, approximately 60 percent have equal coverage for mental illnesses in initiatives for the uninsured, but only 28 percent include substance abuse. Download the report.

The Centers for Medicare and Medicaid Services (CMS) on July 3 issued a proposed rule intended to update payment rates for CY09 and improve quality of services provided in hospital outpatient departments and ambulatory surgical centers (ASCs). The rule includes a 3.0 percent annual inflation update to Medicare payment rates for most services that would be paid under the outpatient prospective payment system (OPPS) to more than 4,000 hospitals and community mental health centers in CY09. The proposed changes would affect outpatient services furnished by general acute care hospitals, inpatient rehabilitation facilities, inpatient psychiatric facilities, long-term acute care hospitals, community mental health centers, children’s hospitals, and cancer hospitals. CMS projects that hospitals would receive $28.7 billion in CY09 for outpatient services furnished to Medicare beneficiaries. Furthermore, CMS expects to make payments of almost $3.9 billion in CY09 to the approximately 5,300 ASCs that participate in Medicare.

To receive the full OPPS payment update for services furnished in CY09, hospitals must report data in CY08 on seven quality measures of emergency department and perioperative surgical care. CMS is proposing to add four new measures of imaging efficiency to the seven existing quality measures for purposes of the CY10 update, and is also seeking public comment on 18 additional potential quality measures in areas ranging from screening for fall risk to cancer care.

Comments on the proposed rule will be accepted until Sept. 2, 2008, and a final CY09 OPPS/ASC payment rule will be issued by Nov. 1, 2008. Read the press release.

With the U.S. healthcare system on the threshold of change, healthcare CFOs face daunting challenges, and their insights on the state of the industry are revealed in a new report released June 24 by Ernst & Young LLP: Healthcare Change: Reform or Transformation? A CFO Perspective. The report provides a picture of an industry in financial distress through the eyes of healthcare financial executives.

“As resource pressures mount and regulatory oversight intensifies, CFOs can expect their financial management skills and their policy management expertise to be sharply tested,” said Rick Wallace, managing partner for Ernst & Young’s Health Advisory Services practice. “Leading CFOs now must embrace their role as change agents, analyzing risks and strategies to help guide their companies through a difficult transition, which is nothing short of an industry overhaul.”

The report is based on discussions in two forums with 23 CFOs from U.S. healthcare systems earlier this year. The forum participants concurred on critical issues likely to reshape the industry in years to come, including paying for health care, access to capital, physician relationships, and transparency and community benefit. Download the report.

The Centers for Medicare and Medicaid Services (CMS) announced that it has instructed its contractors to hold claims for physicians, nonphysician practitioners, and other fee-for-service (FFS) providers paid under the Medicare physician fee schedule for the first 10 business days of July. All claims for services delivered on or before June 30 will be processed and paid under normal procedures.

After 10 business days, contractors will begin releasing claims into processing under the fee schedule which implements current law--which could result in claims being processed with the negative 10.6 percent update. If a new law is enacted which changes the update, retroactive to July 1, CMS said it is prepared to automatically reprocess most of those claims. To the extent possible, providers may hold claims in-house until it becomes clearer as to whether new legislation will be enacted or until cash flow becomes problematic.

As part of its Standards Improvement Initiative launched in 2006, the Joint Commission has revised standards, rationales, and elements of performance for 2009. The standards, to take effect Jan. 1, 2009, have been placed online to give all healthcare organizations time to become familiar with the new language, ordering, and numbering.

No new requirements have been added; however, chapter overviews, standards, introductions, rationales, and elements of performance have been redesigned for ease of use, and requirements have been split or consolidated. Also, standards have been renumbered and reordered to allow electronic sorting as well as the addition of new requirements in the future. A history tracking report is available online to help organizations see what happened to each standard, its new number, and how it changed.

Phase 1 of the initiative has focused on the accreditation programs for hospitals, critical access hospitals, ambulatory care, office-based surgery, and home care organizations; phase 2 for behavioral health care, laboratory, and long-term care accreditation programs began in 2008 and the standards changes will take effect in January 2010. Access the Standards Improvement Initiative web page.

Major U.S. employers using incentives to promote employer-sponsored health and wellness programs rose from 62 percent to 71 percent between 2007 and 2008, according to a report released June 26 by the ERISA Industry Committee, the National Association of Manufacturers, and IncentOne Inc.

The survey of 225 major U.S. companies was conducted to determine employer adoption of incentives for health and disease management programs. Responses revealed a wide range in the value of incentives offered for a host of different programs. For instance, incentives for weight management programs ranged from $5 to $500, and for smoking cessation programs from a low of $5 to a high of $600. The average value of incentives per person per year ranged between $100 and $300, with an overall average of $192 per person per year.

The survey also delved into employer expectation for ROI for health and wellness programs, finding that 83 percent of those who have measured are seeing program returns of better than break-even. Read the report.

A new report released June 30 by the Health Resources and Services Administration (HRSA) describes how HRSA-funded health centers treat more than 16 million people each year. According to the report, Health Centers: America’s Primary Care Safety Net Reflections on Success, 2002-2007, The range of services offered at health centers has increased along with the number of patients served. In 2007, almost 2.8 million patients received dental services, nearly double the 1.4 million dental patients served in 2001. Gains were also striking among patients who received mental health services. In 2007, 613,000 patients came to health centers for mental health care and/or substance abuse services, triple the number who received such care in 2001. Access the report.

The Centers for Medicare and Medicaid Services (CMS) on June 30 proposed new changes to the 2009 Medicare Physician Fee Schedule (MPFS) that would result in a reduction in Medicare payments to physicians and other providers by 5.4 percent. Total Medicare spending under the 2009 fee schedule is projected at $54 billion, down 5 percent from the $57 billion projected for 2008.

CMS is also proposing additional improvements to the Physician Quality Reporting Initiative (PQRI); proposed changes for the 2009 PQRI program include increasing the number of conditions covered by measures groups to nine--adding coronary artery disease, HIV/AIDS, coronary artery bypass surgery, rheumatoid arthritis, care during surgery, and back pain to the original measures groups for diabetes, chronic kidney disease, and preventive care.

Comments are due by Aug. 29, and the final rule will be issued by Nov. 1. The revised policies and payment rates will become effective Jan. 1, 2009. Download the proposed rule.

Despite wide recognition that existing physician and hospital payment methods do not foster high-quality and efficient care for people with chronic conditions, little innovation in provider payment strategies is occurring, according to a new study by the Center for Studying Health System Change (HSC) commissioned by the California HealthCare Foundation.

“Existing payment systems, primarily fee for service, encourage a piecemeal approach to care delivery rather than a coordinated approach appropriate for patients with chronic conditions,” said Paul B. Ginsburg, PhD, president of HSC. “We get what we pay for in health care, and as long as we pay physicians and hospitals in a piecemeal fashion, we’re generally going to get piecemeal care.”

The study’s findings are detailed in a new HSC research brief, Getting What We Pay For: Innovations Lacking in Provider Payment Reform for Chronic Disease Care. Along with describing several pilot programs designed to alter financial incentives for providers caring for chronically ill patients, the study identifies the main barriers to reforming payment for chronic disease care, including fragmented care delivery; lack of payment for nonphysician providers and services supportive of chronic disease care; potential for revenue reductions for some providers; and lack of a viable reform champion. Read the research brief.