Although health plans are developing tools to help consumers compare price and quality information across hospitals and physicians, the tools’ pervasiveness and usefulness are limited, according to a study released Aug. 28 by the Center for Studying Health System Change (HSC).
Responding to large employers’ interest in greater healthcare price and quality transparency, health plans generally provide some price information on inpatient and outpatient procedures and services, according to the study. However, the information often lacks specificity about individual providers, and its availability is often limited to enrollees in specific geographic areas. Likewise, few plans provide price information on services in physicians’ offices.
The study’s findings are detailed in a new HSC research brief, A Health Plan Work in Progress: Hospital-Physician Price and Quality Transparency. The study is based on HSC’s 2007 site visits to 12 nationally representative metropolitan communities: Boston; Cleveland; Greenville, S.C.; Indianapolis; Lansing, Mich.; Little Rock Ark.; Miami; northern New Jersey; Orange County, Calif.; Phoenix; Seattle; and Syracuse, N.Y. HSC has been tracking change in these markets since 1996. Read the research brief.
Medicare overpaid for irinotecan, a cancer drug sold by Pfizer under the name Campostar, by $6.5 million in March because of a delay in updating its pricing formula, according to a report released Aug. 26 by the Department of Health and Human Services Office of Inspector General. A generic version of the drug was approved for sale on Feb. 20. However, a two-month delay in integrating the new generic prices into the agency’s payment system resulted in the additional expense. According to the report, Medicare was paying $126 per dose of irinotecan in March despite average generic prices of $41 for the drug. When sales of the branded version were factored in, the drug’s average price in March was $52.
“The underlying pricing issues identified in this report are not limited to irinotecan because of the two-quarter lag in CMS’s standard process for establishing Medicare payment amounts,” says the report. “Absent a change in the standard process, Medicare payment amounts for drugs with new generic versions will continue to be temporarily higher than manufacturer sales prices, sometimes substantially.” Read the report.
Department of Health and Human Services (HHS) Inspector General Daniel Levinson on Aug. 25 released a federal audit that found that Medicare officials underestimated the amount of incorrect payments for durable medical equipment (DME) in 2006 and that the miscalculation was caused by the agency’s failure to have auditors follow CMS’s policy for checking claims. The HHS audit reviewed a sample of 363 Medicare DME claims to determine whether auditing contractor AdvanceMed had found all improper payments. CMS had estimated a payment error rate of 7.5 percent, or about $700 million in improper payments. However, the HHS audit found an “error rate” of nearly 29 percent for the sample of DME claims. The report cited 20 payment errors identified by the Medicare audit and 73 errors the contractor had not identified. However, the HHS Office of Inspector General cautioned against applying these findings to the entire Medicare DME program because the sample was not entirely random.
The report faults Medicare officials for allowing AdvanceMed to conduct the review without fully documenting claims from suppliers. According to the audit, more incorrect payments would have been identified if Medicare had told the contractor to follow the agency’s written policy.
In a cover letter for the report, Levinson wrote that Medicare auditors should check a wider range of records related to claims, including physician records and other medical documents verifying the necessity of equipment. Download the report.
The cost of patient care in U.S. hospitals rose just under 1 percent between 2005 and 2006, much slower than the average 5.3 percent per year between 1997 and 2005, according to the latest News and Numbers study from the Agency for Healthcare Research and Quality (AHRQ). However, over the nine-year period from 1997 to 2006, the overall cost for stays in the hospital nearly doubled from $177 billion to $329 billion.
AHRQ’s new analysis also found that nearly half the increase in overall costs (47 percent) was due to the increased intensity of care in the hospital, such as increased use of procedures, technologies, and other interventions. Also, about one-third of the cost increases were due to inflation and 16 percent resulted from an increase in the number of patients due to population growth.
The findings suggest that rapid growth in the adoption of managed care plans and the shift to outpatient care have slowed the growth in the use of inpatient care. Download the report.
The number of people in the United States without health insurance coverage declined from 47 million (15.8 percent) in 2006 to 45.7 million (15.3 percent) in 2007, according to a report released Aug. 26 by the U.S. Census Bureau. These are among the findings contained in the report Income, Poverty, and Health Insurance Coverage in the United States: 2007. The data were compiled from information collected in the 2008 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC).
As Karen Davis, PhD, president of the Commonwealth Fund, points out in a statement, however, "This decline of 1.3 million uninsured people was exactly equal to the growth in coverage under Medicaid."
The survey data include, among others, the following results related to health coverage:• The number of uninsured children declined from 8.7 million (11.7 percent) in 2006 to 8.1 million (11.0 percent) in 2007.• Between 2006 and 2007, the uninsured rate for the native-born population declined from 13.2 percent in 2006 to 12.7 percent in 2007. Meanwhile, the percentage of the foreign-born population without insurance was statistically unchanged at 33.2 percent in 2007.• At 11.4 percent each, the Northeast and the Midwest had lower uninsured rates in 2007 than the West (16.9 percent) and the South (18.4 percent).
Download the report.
Americans who lack health insurance for any part of 2008 will spend $30 billion out of pocket for health services and receive $56 billion in uncompensated care while uninsured. Government programs pay for about three-quarters, or roughly $43 billion, of the uncompensated care bill, researchers report in a Health Affairs web exclusive published Aug. 25. The researchers define uncompensated care as care received but not paid for fully by the uninsured or by a health insurer.
Although covering the uninsured will undoubtedly cost the federal government more, some of the costs could be offset by redirecting the nearly $43 billion that governments currently spend to subsidize the uninsured’s uncompensated care, say researchers. This spending includes roughly $18 billion in special payments to hospitals by Medicare and Medicaid; $15 billion in tax appropriations and indigent care programs by state and local governments; and almost $10 billion in spending by the Veterans Health Administration, the Indian Health Service, community health centers, and similar direct care programs. However, the authors note that redistributing these dollars is unlikely unless universal coverage is achieved.
If all those who will be uninsured for all or part of 2008 were to gain health coverage, their access to medical care would improve considerably, and they would seek and receive more care, according to the researchers. The researchers estimated that the uninsured would increase their medical spending, putting them nearly on par with the privately insured. Total medical spending for the uninsured would increase by $122.6 billion--an amount equal to about 5 percent of current national health spending. Read the abstract.
For the seventh consecutive year, HFMA President and CEO Richard L. Clarke, DHA, FHFMA, has been named to Modern Healthcare magazine’s list of the 100 most powerful people in health care. He is one of only 17 who made the list since its inception in 2002.
Nominees for the list were chosen from thousands of reader nominations, which were then pared to 300. Readers then voted for 10 candidates from the list of 300. Read the article.
The Government Accountability Office (GAO) has found that the five Part D sponsors reviewed by GAO have not completely implemented all of the compliance plan elements and selected recommended measures for Medicare Part D fraud and abuse programs required by the Centers for Medicare and Medicaid Services (CMS).
In a review of the extent to which certain Part D sponsors have implemented programs to control fraud, waste, and abuse, and the extent of CMS’s oversight of those programs, GAO learned that all Part D sponsors had completely implemented the requirements and selected recommendations for three of the seven required compliance plan elements--written policies, procedures, and standards of conduct; effective lines of communication; and enforcement of standards through disciplinary guidelines. However, the sponsors varied in their implementation of the remaining required elements--compliance officer and compliance committee, effective training and education, internal monitoring and auditing, and prompt responses to detected offenses.
Also, GAO found that, to date, CMS’s activities have been limited to the review and approval of sponsors’ fraud and abuse program plans submitted as part of the initial Part D applications, but has not conducted oversight to assess Part D sponsors’ implementation of fraud and abuse programs. Download the report.
Across eight classes of drugs examined--used to treat a variety of relatively common chronic conditions--15 percent of Medicare Part D enrollees who reached the “doughnut hole” in 2007 stopped their drug therapy for that condition, 5 percent switched to another medication in the class, and 1 percent reduced the number of drugs they were taking in the class. Those were among the findings reported in a new Kaiser Family Foundation study of Part D prescription drug utilization, The Medicare Part D Coverage Gap: Costs and Consequences in 2007.
The study finds that 26 percent of Part D enrollees who filled any prescriptions in 2007 reached the coverage gap. Beneficiaries taking drugs for serious chronic conditions had a substantially higher risk of a gap in coverage under their Medicare drug plan. For example, 64 percent of enrollees taking medications for Alzheimer’s disease reached the coverage gap in 2007, as did 51 percent of those taking oral antidiabetic medications and 45 percent of patients on antidepressants. (These percentages are among Part D plan enrollees who did not receive low-income subsidies.)
Beneficiaries who reached the coverage gap faced substantial increases in out-of-pocket spending. For example, among Part D enrollees who reached the coverage gap, but did not receive catastrophic coverage, average monthly out-of-pocket costs nearly doubled from $104 prior to the coverage gap, to $196 in the “doughnut hole.” The vast majority (84 percent) of the Part D enrollees who reached the coverage gap did not have sufficient additional drug spending during the year to receive catastrophic coverage, at which point their Part D plan would pay 95 percent of drug costs. Download the report.
A comprehensive new Kaiser Family Foundation survey of the experiences of New Orleans residents--the second since Hurricane Katrina--reveals a still-struggling population that gives very mixed reviews in key areas of the recovery efforts. In two critical areas, housing (72 percent) and crime (71 percent), the majority of city residents see little or no progress. In other key areas--medical facilities, public schools, jobs, and rebuilding neighborhoods--reviews are more mixed, but with majorities seeing little or no progress. Only in one area, levee repair, does a majority (60 percent) see progress.
In health-related issues, the survey finds a substantial deterioration in residents’ self-reported mental health status. Currently, 15 percent of residents say they have been diagnosed with a serious mental illness such as depression, up from 5 percent in 2006. And 65 percent report either having some sort of chronic condition or disability or being in “fair” or “poor” health, up from 45 percent in 2006.
However, more residents report having health insurance coverage (with 18 percent saying they are uninsured, down from 26 percent in 2006), and fewer say that they do not have a usual source of health care or primarily depend on a hospital emergency department (25 percent, down from 34 percent). At the same time, the affordability of care appears to be a bigger issue. Overall, 25 percent say they had a problem paying for medical bills in the past six months, up dramatically from 9 percent in 2006. Access the report.
The Centers for Medicare and Medicaid Services (CMS) on Aug. 20 announced additions to the Hospital Compare consumer web site, including a mortality measure for pneumonia and, for the first time on Hospital Compare, publicly reported measures for hospital care of children. Previously, Hospital Compare had provided only quality information based on hospitalizations of adult patients. The measure on pneumonia 30-day mortality joins existing 30-day mortality measures for heart failure and heart attack, which CMS began reporting last summer.
The addition of patient experience data and Medicare payment and volume information in March 2008 caused the number of page views to jump from an average of 600,000 per month to more than 2.5 million per month. Page views for this year to date have totaled more than 20 million. Read the press release.
In 2007, 56 percent of American adults--more than 122 million people--sought information about a personal health concern from a source other than their physician, up from 38 percent, or 72 million people, in 2001, according to a national study released Aug. 21 by the Center for Studying Health System Change (HSC).
Consumers who actively researched health concerns widely reported positive impacts--more than half said the information changed their overall approach to maintaining their health, and four in five said that the information helped them to better understand how to treat an illness or condition, according to findings from HSC’s 2007 Health Tracking Household Survey. The study’s findings are detailed in a new HSC tracking report, Striking Jump in Consumers Seeking Health Care Information.
Across all categories of age, education, income, race/ethnicity, and health status, consumers increased their information seeking significantly, but education level remained the key factor in explaining how likely people are to seek health information. In 2007, for example, 72 percent of people with a graduate education sought health information, compared with 42 percent of those without a high school diploma. Access the report.
Expense growth rate exceeded the revenue growth rate again in FY07 as it did in FY06 for its not-for-profit hospitals and health systems, according to a recently released report by Moody’s Investors Service, Not-for-Profit Hospital Medians for Fiscal Year 2007. According to the report, median operating performance and liquidity remain good relative to historical levels, but operations and the rate of liquidity growth are slowing. Slower revenue growth for hospitals is attributed to a continued shift in surgical volumes from inpatient to outpatient settings, increased charity care, and push-back from commercial insurers on higher rate increases. Moody’s says that due to a weak economy and government initiatives such as recovery audit contractor audits, hospitals will continue to see revenue growth restrained in FY08 and FY09.
The report notes a continued increase in capital spending in FY07, attributed to good cash flow generation in recent years, lower cost of capital, the need to remain competitive by renovating aging facilities, and increased IT needs to improve clinical quality and operational efficiency. The medians report is based on analysis of audited financial statements for 410 free-standing hospitals and single-state healthcare systems and 16 multistate healthcare systems, representing 94 percent of Moody’s publicly rated portfolio that is eligible to be included in the medians.
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The proportion of working-age Americans who have medical bill problems or who are paying off medical debt climbed from 34 percent to 41 percent between 2005 and 2007, bringing the total to 72 million, according to a new Commonwealth Fund report, Losing Ground: How the Loss of Adequate Health Insurance Is Burdening Working Families. In addition, 7 million adults age 65 and over also had problems paying medical bills, for a total of 79 million adults with medical bill problems or medical debt.
Those with medical bills and medical debt are increasingly facing serious financial problems and sometimes facing trade-offs among immediate life necessities. Thirty-nine percent of those with bill problems or debt say they have used up all of their savings to pay their healthcare bills; 29 percent are unable to pay for basic necessities like food, heat, or rent; and 30 percent took on credit card debt. Twenty-four percent of adults under age 65 with medical debt owe $4,000 or more and 12 percent owe $8,000 or more in unpaid medical expenses. Access the report.
If we are to unlock the potential of IT to help transform the U.S. health system, we need to expand beyond narrowly focused standard-setting, according to a new article published Aug. 19 on the Health Affairs web site.
Proponents of health IT need to resist “magical thinking,” such as the notion that technology on its own can transform our broken system without alignment of policy objectives and financial incentives at the same time. IT is critical to improving healthcare quality and cost-effectiveness, but a sole focus on technical standards overlooks the “serious structural barriers to the use of IT that have nothing to do with technology,” write researchers Carol Diamond, managing director of the Health Program at the Markle Foundation, and Clay Shirky, an adjunct professor at New York University.
The authors propose an alternative approach to using health IT to help transform the U.S. health system, one that “would mean working simultaneously on removing other obstacles while concentrating on those standards necessary for sharing the information, however formatted in the short term, to flow between willing and authorized participants. Finally, it would require clear policy statements that will guide the design of technology,” they write. Read the abstract.
The IRS yesterday released the long-awaited revised instructions that tax-exempt organizations will need to fill out the redesigned Form 990, which must be filed starting with tax year 2008 (filed in 2009). The revised instructions feature several new tools that make it easier to answer questions line-by-line and that facilitate uniform reporting. Input from the tax-exempt community, including HFMA, played a major role in how the new instructions were designed.
The IRS expects to release instructions to the 2008 Form 990-EZ, Short Form Return of Organization Exempt from Income Tax, in the next few weeks.
As part of the phase-in of the redesigned Form 990 over a three-year transition period, many organizations not eligible to file the Form 990-EZ for 2007 will be eligible to file Form 990-EZ or Form 990 for 2008. Access the revised instructions.
The new Kaiser Health Tracking Poll: Election 2008 finds that one in four Americans continues to struggle with paying for health care. Health care ranks as a “serious problem” above paying for food (18 percent), problems with debt (16 percent), and paying the rent or mortgage (15 percent), but below paying for gas (37 percent) or getting a good-paying job or raise in pay (26 percent). Among the 24 percent who find paying for health care or health insurance a serious problem, those in the poorest health and those with the most need disproportionately report difficulties, with 50 percent of the uninsured reporting that paying for health care is a serious problem.
The August poll, the ninth in a new series designed and analyzed by the foundation’s public opinion research team, also examines public perception of the major presidential candidates’ positions on health care and reform. When voters were asked which candidate “would be more likely to make healthcare reform a top priority,” roughly three times as many voters mention presumptive Democratic nominee Sen. Barack Obama (58 percent) as they do presumptive Republican nominee Sen. John McCain (20 percent). A majority (56 percent) of independent voters and even three in 10 (29 percent) Republicans say they think Obama would be more likely to make health reform a top priority.
Health care is holding its position among the top voting issues according to the tracking poll, but is not a dominant voting issue. The economy (49 percent) is far and away the top voting issue, with Iraq (25 percent), gas prices (18 percent), and health care (16 percent) rounding out the top four. Access the key findings.
As Medicare’s Part D prescription drug program enters its fourth year, beneficiary satisfaction rates remain high, program costs remain lower than originally expected, and Medicare prescription drug plan bids reflect nationwide drug price trends, the Centers for Medicare and Medicaid Services (CMS) announced Aug. 14.
Based on the bids submitted by Part D plans, CMS estimates that the average monthly premium that beneficiaries will pay for standard Part D coverage in 2009 will be $28. This is about 37 percent lower than originally projected when the benefit was established in 2003.
The estimated average monthly premium for 2009 of roughly $28 for basic coverage is far below the original estimate for 2009 of $44.12, which was made at the time the Medicare Prescription Drug, Improvement, and Modernization Act (MMA) was enacted in 2003. The average expected premium for basic coverage in 2009 is about $3 higher than the actual average for 2008. The $3 premium increase is due to general trends in drug costs, the phase-out of a CMS demonstration project, and higher plan estimates for catastrophic coverage based on prior experience. Read the press release.
A report released Aug. 14 on children’s health shows that having health insurance makes an enormous difference in whether kids receive the care they need, especially if they are chronically ill. The study, released by the Robert Wood Johnson Foundation (RWJF) and conducted by researchers at the University of Minnesota, shows that uninsured children are three times more likely not to visit a physician’s office in the course of a year than are insured children. Insured kids are also far more likely to have had a regular check-up.
Among the findings, kids with insurance are more likely to receive routine care. Thirty-one percent of all uninsured kids in America did not visit a physician’s office last year, compared with just nine percent of children with insurance. Three out of four insured kids (77 percent) received a “well child” check-up in the past year, compared with less than half of those without insurance (45 percent).
A Needed Lifeline: Chronically Ill Children and Public Health Insurance Coverage was released by RWJF to kick off its annual Cover the Uninsured Back-to-School Campaign, a nationwide effort to enroll eligible children in public health coverage programs during the back-to-school season. Download the report.
The Department of Health and Human Services (HHS) on Aug. 15 announced a long-awaited proposed regulation that would replace the ICD-9-CM code sets now used to report healthcare diagnoses and procedures with greatly expanded ICD-10 code sets, effective Oct. 1, 2011. In a separate proposed regulation, HHS has proposed adopting the updated X12 standard, version 5010, and the National Council for Prescription Drug Programs standard, version D.0, for electronic transactions, such as healthcare claims. Version 5010 is essential to use of the ICD-10 codes.
Developed almost 30 years ago, ICD-9 is now widely viewed as outdated because of its limited ability to accommodate new procedures and diagnoses. ICD-9 contains only 17,000 codes and is expected to start running out of available codes next year. By contrast, the ICD-10 code sets contain more than 155,000 codes and accommodate a host of new diagnoses and procedures. The additional codes will help to enable the implementation of electronic health records because they will provide more detail in the electronic transactions. This granularity will also help to improve efficiencies by helping to identify specific health conditions such as methicillin-resistant Staphylococcus aureus and other conditions.
Under the updated transaction standards proposed rule, compliance with version 5010 (health care transactions) and Version D.0 (pharmacy claims) would be required by April 1, 2010. In that rule, a standard for the Medicaid pharmacy subrogation transaction is also proposed. Comments on both proposed rules are due by Oct. 21, 2008. Read the press release.
The Health Resources and Services Administration (HRSA) on Aug. 8 announced more than $22 million in new health center grants to help people in need--many with no health insurance--obtain access to the comprehensive primary and preventive healthcare services that health centers provide.
The New Access Point grants will establish 42 new health center sites in 23 states, providing an estimated 160,000 Americans with health center services. The grants were awarded to healthcare organizations in areas where more primary medical care is needed. Health centers funded by HRSA represent more than 7,000 service delivery sites, including community health centers, migrant health centers, health care for the homeless, and public housing primary care centers. Read the press release.
The Centers for Medicare and Medicaid Services (CMS) announced Aug. 14 that all physician groups participating in the physician group practice (PGP) demonstration improved the quality of care delivered to patients with congestive heart failure, coronary artery disease, and diabetes during the second performance year of the demonstration. As a result, the 10 groups earned $16.7 million in incentive payments under the demonstration.
All 10 of the participating physician groups achieved benchmark or target performance on at least 25 out of 27 quality markers for patients with diabetes, coronary artery disease, and congestive heart failure. And five of the physician groups achieved benchmark quality performance on all 27 quality measures.
The groups also improved the quality of care delivered to Medicare beneficiaries on the chronic conditions measured. Physician groups increased their quality scores an average of 9 percentage points across the diabetes measures, 11 percentage points across the heart failure measures, and 5 percentage points across the coronary artery disease measures. Read the press release.
More than one in four Hispanic adults in the United States lack a usual healthcare provider, and a similar proportion report obtaining no healthcare information from medical professionals in the past year, according to a report released Aug. 13 by the Pew Hispanic Center and the Robert Wood Johnson Foundation (RWJF). At the same time, the report finds that more than eight in 10 receive health information from alternative sources, such as television and radio. This includes most of those who get no information from physicians or other medical professionals.
The report, based on a nationally representative bilingual survey of 4,013 Hispanic adults, examines Hispanics’ perception of healthcare access and information issues, and also examines Hispanics’ knowledge of diabetes--a serious chronic disease that is more prevalent among Hispanics than non-Hispanic whites. Unlike previous research, this survey examines how different subgroups within the U.S. Hispanic population access health services and information.
Among the survey’s key findings, a significant share of Hispanics with no usual place to go for medical care are high school graduates (50 percent), were born in the United States (30 percent), and have health insurance (45 percent). Access the report.
The Centers for Medicare and Medicaid Services (CMS) has issued a final rule requiring all long-term care facilities to be equipped with sprinkler systems by Aug. 13, 2013, in order to participate in the Medicare and Medicaid programs. The rule also stipulated maintenance requirements once the sprinkler systems are installed. The federal regulations will not preempt more stringent state and local requirements.
The final rule acknowledges the substantial capital investment needed for this purchase and installation and defers to Congress and states to provide financial assistance. The five-year phase-in period is intended to mitigate this financial impact. Download the final rule.
The Office of Inspector General of the Department of Health and Human Services found that 15 percent of home health agencies (HHAs) repeated the same deficiency citation on three consecutive surveys, according to a new report. The most frequently repeated deficiency citation is related to patient plans of care. On the three most recent surveys, these HHAs received, on average, twice as many deficiency citations per survey compared with HHAs that did not repeat citations. Most of the HHAs identified with deficiencies are located in six states and tend to be concentrated in highly populated areas. The report also identified opportunities to improve oversight of HHAs by CMS.
The report recommended that CMS use existing survey data to identify patterns of deficiency citations and at-risk HHAs and that CMS require surveyors to review all available survey data prior to each upcoming survey. The report also recommended that CMS implement intermediate sanctions (currently, termination from the Medicare program is the only sanction for poorly performing HHAs). Download the report.
Responding to concerns about access to care and the poor financial health of many New Jersey hospitals, Governor Jon S. Corzine has signed a package of four bills designed to limit hospital charges to the uninsured and enhance financial oversight of the state's hospitals.
One bill requires hospitals to charge no more than 15 percent above the Medicare rate; uninsured families qualify for this rate if their income is less than 500 percent of the federal poverty level. Two other bills are designed to improve financial oversight and management of hospitals. One of these bills implements an early warning system to monitor/audit hospital finances, identify distressed hospitals early, and institute a system of progressive monitoring, in response to “epidemic of hospital closures in recent years.” The other bill requires that all general hospital trustees complete comprehensive training to ensure effective financial oversight and to hold hospital management accountable. As a result, New Jersey is now the first State to require hospital trustee training for all board members. The final bill in the package attempts to improve community-hospital communication by requiring each hospital to annually conduct a public meeting for the community it serves.
The New Jersey Hospital Association calls the bills a step toward healthcare reform, but Association President and CEO Betsy Ryan points out, “The larger challenges that plague our healthcare system still await action, such as inadequate payments to hospitals and physicians, the rash of hospital closures and continued concerns over access to care.”
Read statements from the New Jersey Office of the Governor and the New Jersey Hospital Association.
Minnesota Governor Tim Pawlenty has proposed giving all Minnesotans access to a secure and portable online personal health portfolio by 2011, starting with one for each of the state’s approximately 50,000 employees in 2009.
The online portfolios are designed to help control costs, increase quality, and enhance safety by allowing consumers to access and coordinate their health information and make appropriate parts of that information available to those who need it. Health information such as prescription history, immunizations, lab results, and other medical records from providers and health plans are stored in a system and accessed by consumers once they create their personal portfolio.
The personal health portfolio is one of several initiatives the governor recently announced to empower healthcare consumers. In addition, Minnesota’s private health plans have agreed to provide pricing and quality data on a single website; the state will provide up to $250 in a health reimbursement account for all state employees who elect to receive their care from high-quality, low-cost providers; and the Minnesota Department of Health will gather input from Minnesotans on the healthcare system and how they can be more engaged in healthcare decision-making.
Read the statement from the Minnesota Office of the Governor.
Health savings accounts (HSAs) represent an important option for consumers seeking more control over their healthcare spending, but statutory contribution limits make it unlikely that these accounts will play more than a minor part in savings for healthcare costs in retirement, according to a new study by the Employee Benefit Research Institute (EBRI).
“The maximum savings that can be accumulated in an HSA will be far from sufficient to fully cover the savings needed in retirement for insurance premiums and out-of-pocket expenses,” concludes the study, published in the August issue of EBRI Notes.
The study notes a number of limitations of HSAs:
The Centers for Medicare & Medicaid Services (CMS) has announced a pilot program to test options for Medicare beneficiaries to maintain their health records electronically. Under this pilot, a beneficiary may choose one of selected commercial personal health record (PHR) tools, and Medicare will transfer up to two years of the individual’s claims data into the individual’s PHR. The program is open to beneficiaries covered by original Medicare; it will be conducted in Arizona and Utah and is scheduled to begin in January 2009.
Beneficiaries can add other personal health information to the PHR if they choose. Depending on the specific product, they may be able to authorize links to other personal electronic information such as pharmacy data. PHRs can offer links to tools that help consumers manage their health such as wellness programs for tracking diet and exercise, medical devices, health education information, and applications to detect potential medication interactions. Beneficiaries can elect to allow family members to have access to their PHR. They can also provide access to the PHR to their healthcare providers.
“This pilot is designed to evaluate how well PHRs meet the needs of our beneficiaries and whether PHRs can improve health outcomes and lower costs.” said CMS Acting Administrator Kerry Weems. Get more information.
The Centers for Medicare and Medicaid Services (CMS) released its final regulations for the inpatient prospective payment system final rule for FY09 on July 31. The final rules provide long-awaited clarification and guidance for hospital on-call requirements under the Emergency Medical Treatment and Active Labor Act as it relates to community call plans.
Under the final rule, a community plan is defined as two or more hospitals that coordinate on-call coverage within a specific geographic area. Participating hospitals must designate the facility that will offer specific coverage; the other participating hospitals would then transfer patients requiring the designated care to that facility. Hospitals are also required to establish the time period this coordinated on-call coverage is in effect. Under the rule, they will also be required to develop a formal plan that includes a clear delineation of on-call responsibilities for each hospital participating in the plan, a description of the geographic area covered by the plan, and an annual assessment of the plan by the participating hospitals. Download the final rule.
On July 31, CMS sent a letter to state Medicaid directors to provide guidance on payment policies related to conditions on the National Quality Forum’s (NQF) list of serious reportable events (“never events”). Among other things, the letter provides direction as to how states can avoid payment liability as a secondary payer.
Medicare will no longer pay the higher MS-DRGs arising from these selected conditions if they arose in the course of an admission. Theoretically, for dual eligibles, the hospital could then attempt to bill Medicaid as a secondary payer, and the decision to balance bill would vary by state as to whether a coordinated denial by the state Medicaid program and the Medicare program would occur.
Given the large number of dual eligibles, CMS wants to articulate the payment policy for Medicaid as a secondary payer for Medicare nonpayment. The intention is to avoid federal and state fiscal consequences from the provider’s improper patient care. Therefore, states are encouraged to coordinate their Medicaid payment policies with the existing Medicare hospital-acquired condition (HAC) payment policy and prevent this unintended consequence.
States are neither required nor limited to devising never event policies that deal with the Medicare-Medicaid payment interaction created by the Medicare HAC policy. CMS encourages the states to consider the entire Medicaid population (not just dual eligibles) and all of the NQF never events in the creation of individual state policies. The guiding principle should be that payment and performance need to be linked. Read the letter.
Americans are dissatisfied with the U.S. healthcare system and 82 percent think it should be fundamentally changed or completely rebuilt, according to a new survey released Aug. 7 by the Commonwealth Fund. Nine out of 10 of those surveyed said they felt it was important that the two leading presidential candidates propose reform plans that would improve healthcare quality, ensure that all Americans can afford health care and insurance, and decrease the number of uninsured. One in three adults reported that their physicians had ordered a test that had already been done or recommended unnecessary treatment or care in the past two years. Adults across all income groups reported experiencing inefficient care. And, eight in 10 adults across income groups supported efforts to improve the health system’s performance with respect to access, quality, and cost.
The survey report, Public Views on U.S. Health Care System Organization: A Call for New Directions, found that, in addition to respondents’ overall dissatisfaction with the healthcare system, those surveyed also reported problems with access to health care--73 percent had a difficult time getting timely physicians’ appointments, phone advice, or after-hours care without having to go to the emergency department (ED). Although the uninsured were the most likely to report problems getting timely care without going to the ED, 26 percent of adults with health insurance also said it was difficult to get same-day or next-day appointments when they were sick. The survey of more than 1,000 adults was conducted by Harris Interactive in May 2008. Access the report.
Although the uninsured population in the United States is still dominated by native-born Americans, it is increasingly comprising immigrants, who account for about 55 percent of the increase in the U.S. uninsured population over a 12-year period ending in 2006, according to a study released Aug. 5 by the nonpartisan Employee Benefit Research Institute (EBRI).
The study, published in the August 2008 EBRI Notes, reports that in 1994, immigrants accounted for 18.8 percent of the U.S. uninsured population, while by 2006 they accounted for 26.6 percent of the uninsured population. During the same period, native-born Americans dropped as a percentage of the uninsured, from 81.2 percent in 1994 to 73.4 percent in 2006.
The uninsured immigrant population increased from 6.9 million in 1994 to 12.3 million in 2006, an 80 percent increase. By comparison, the uninsured native-born population increased from 29.7 million to 34.1 million, a 15 percent increase over the same period. The study, which uses Census Bureau data, does not differentiate the legal status of the immigrants. Illegal immigrants probably are included but cannot be identified as such, says the study. Read the report.
Patients in the United States made an estimated 1.1 billion visits to physician offices and hospital outpatient and emergency departments (EDs) in 2006--an average of four visits per person per year, according to new healthcare statistics released Aug. 6 by the Centers for Disease Control and Prevention (CDC). The data come from various components of CDC’s National Center for Health Statistics National Health Care Survey and are featured in a series of new national health statistics reports.
Among the findings:* The number of visits to physician offices and hospital outpatient and EDs increased by 26 percent from 1996 to 2006.* In 2006, seven out of 10 visits had at least one medication provided, prescribed, or continued, for a total of 2.6 billion medications overall.* The ED served as the route of admission to hospital inpatient services for roughly 50 percent of nonobstetric hospital patients in 2006, up from 36 percent in 1996.* Patients with Medicaid use the ED more frequently than patients with private insurance--82 per 100 persons for Medicaid versus 21 per 100 for private insurance.
Access the healthcare reports.
Millions of U.S. residents who have chronic conditions are not receiving appropriate care because they are uninsured, according to a study published Aug. 5 in Annals of Internal Medicine.
For the study, researchers analyzed health surveys of adults ages 18 to 64 conducted by the federal government. The researchers found that of the 36 million people who reported having no health insurance in 2004--the latest data examined by the study--about 11 million people had been diagnosed with a chronic condition. However, researchers noted the estimate likely is low because it does not factor in uninsured U.S. residents who have a chronic condition with which they have not yet been diagnosed. The study also found that less than 25 percent of the uninsured with a chronic condition reported seeing a physician within the previous year and that about 7 percent said they would visit the emergency department if they needed care.
The researchers noted that the study raises doubts regarding the common assumption that many uninsured U.S. residents are young and healthy. Read the abstract.
This past April the IRS released for public comment draft instructions to the redesigned Form 990, Return of Organization Exempt from Income Tax, to be filed beginning with 2008 tax years (2009 filing season). The IRS has completed its review of the public comments and made revisions to the draft instructions, and expects to post the revised instructions on its web site in the next few weeks.
The upcoming release of revised Form 990 (2008) instructions will be accompanied by background documents that will explain changes made to the draft instructions, including the following:* A revised definition of key employee for purposes of reporting executive compensation, transactions with interested persons, and other items* A list of foreign countries within each of nine geographic regions to be used for reporting foreign activities on the Form 990, Schedule F, Statement of Activities Outside the United States.* Specific reporting requirements for which the reporting organization may rely on reasonable efforts to obtain information required from interested persons or third parties* A revised standard for determining independence of a voting member of the organization’s governing body* For Schedule H, Hospitals, a revised definition of facility for purposes of completing Part V, Facility Information, for 2008 tax years (2009 filing season)* For Schedule K, Supplemental Information for Tax-Exempt Bonds, the revised instructions will provide relief for refunding bonds issued after 2002 to refund pre-2003 bonds, by exempting such refunding bonds from having to be reported in Part III, Private Business Use
The IRS anticipates the complete revised set of draft instructions will be posted on the its web site by Aug. 15, 2008. Read the news release.
Seven out of 10 low-wage workers say they are having difficulty paying for basic things such as health care and health insurance, and 74 percent say it is harder for them to pay for health care, according to a new national survey by the Kaiser Family Foundation, The Washington Post, and Harvard University, released Aug. 4. The survey assesses financial challenges that low-wage workers face, including difficulties obtaining and paying for health care, and their views about their financial and job situations.
The telephone poll was conducted from June 18 to July 7, 2008, among 1,350 randomly selected low-wage workers nationwide. Low-wage workers were defined as adults ages 18 to 64 working at least 30 hours per week, not self-employed, and earning $27,000 or less in 2007. This income cutoff was chosen because it roughly corresponds to the bottom 40 percent of the wage distribution. Access the report.
Requiring larger preapproval clinical trials could be a cost-effective method of reducing post-approval injuries and deaths caused by new medications, according to a study published today on the Health Affairs web site.
Drug safety has been a much-discussed topic recently, but most of the attention has focused on strengthening postmarketing surveillance of prescription drugs. In their paper, researchers from Duke University point out the potential for strategies at the preapproval stage--before the Food and Drug Administration has cleared the drug--to detect adverse events caused by new medications, known as adverse drug events (ADEs).
The model put forward by the researchers examines how increasing the size of a clinical trial affects the odds of detecting an ADE. In general, the researchers say, the effect of increasing the number of patients in the trial depends on the “background” frequency of the ADE in the general population and the increased odds of encountering the ADE among those taking the drug (the “odds ratio”).
When they plugged in the cost of running a larger clinical trial, they found that increasing the size of a preapproval trial from 2,000 to 4,000 patients per treatment arm, for example, could be a cost-effective method of avoiding the ADEs. The incremental cost was approximately $27,100 per life-year saved. Read the report.
In response to concerns that the Centers for Medicare and Medicaid Service’s (CMS) oversight of suppliers of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) is inadequate to prevent fraud and abuse, the Government Accountability Office (GAO) conducted covert testing of the DMEPOS process. It found that weaknesses in the DMEPOS enrollment and inspection process have allowed sham companies to fraudulently bill Medicare for unnecessary or nonexistent supplies. It also confirmed the CMS estimate that from April 2006 through March 2007, Medicare improperly paid $1 billion for DMEPOS supplies--in part due to fraud by suppliers.
Specifically, in response to concern about vulnerabilities in the enrollment process, GAO used publicly available guidance to attempt to create DMEPOS suppliers, obtain Medicare billing numbers, and complete electronic test billing. GAO also reported on closed cases provided by the HHS Inspector General to illustrate the techniques used by criminals to fraudulently bill Medicare. Read the report highlights.
The Centers for Medicare and Medicaid Services (CMS) on July 31 issued a final rule to improve the accuracy of payment for services furnished to people with Medicare who need the intensive rehabilitation services provided by inpatient rehabilitation facilities (IRFs). These include patients who are recovering from serious illnesses or injuries, such as stroke, spinal cord injuries, severe burns, amputations and a number of other conditions. There are currently more than 1,200 facilities that are paid as IRFs. CMS projects that Medicare payments to IRFs under this final rule will be approximately $5.6 billion in FY09.
“The payment rates and policies adopted in this final rule will make it possible for beneficiaries who are severely impaired by illness or injury, but who are able to participate in an intensive program of rehabilitation, to obtain high quality care in an inpatient setting,” said CMS Acting Administrator Kerry Weems.
Since 2002, Medicare has paid rehabilitation hospitals and rehabilitation units in acute care hospitals for inpatient stays under the IRF prospective payment system (PPS). Under this system, patients are classified into case-mix groups (CMGs) taking into account the patient’s overall physical and cognitive status. Medicare establishes a weight for each CMG based on the average resources required for treating a patient in that CMG. Medicare makes a single payment to the IRF based on a base rate, which is determined by multiplying the weight for the CMG by a standard federal rate which is updated annually for inflation. The base rate is further adjusted to account for specific characteristics and location of the facility. In rare cases, where the costs of treating an individual patient are much higher than average, Medicare will make an additional payment to the facility.
The payment rates set by the IRF PPS for rehabilitation therapy services are higher than would be paid for services in other settings, such as hospital outpatient departments, skilled nursing facilities, or in the home health setting. This is because these patients have more severe and more complex medical conditions that need more intensive and coordinated rehabilitation services.
As part of its ongoing effort to transform Medicare into a prudent purchaser of quality health care services and improve the accuracy of its payment systems, CMS has recalculated the weights assigned to the CMGs using more recent data from rehabilitation hospitals about the types of patients they are treating and the resources required. However, as required by the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA), the final rule sets the inflation update for the standard federal rate at zero percent for FY09.
As required by the MMSEA, the final rule retains the requirement that at least 60 percent of a facility’s patient population have one of 13 qualifying conditions specified in Medicare regulations. At the same time, the final rule implements provisions in the MMSEA that allow facilities to continue to count patients whose principal reason for needing inpatient rehabilitation services is not one of the qualifying conditions, but whose treatment is complicated by the presence of one or more of these conditions as a secondary diagnosis.
“The rule CMS is adopting today will help to ensure that people with Medicare have access to rehabilitation services that are appropriate to their medical conditions, and that will help them reach their maximum level of recovery as quickly as possible,” said Weems.
The final rule will appear in the Aug. 8 Federal Register, and will be effective for discharges in FY09, beginning Oct. 1, 2008. More information is available on the CMS website.
Medicare payment rates to nursing homes will increase by $780 million next year, the Centers for Medicare and Medicaid Services (CMS) announced on July 31.
The boost in payments is the result of a 3.4 percent increase in the annual market basket calculation of the cost of goods and services included in a skilled nursing facility stay. The price of the items in the basket is measured every year and Medicare payments are adjusted accordingly.
A recalibration of the payment categories, intended to correct a previous error, which had been proposed for FY09 has been delayed while CMS continues to evaluate the data. The proposed rule announcing the planned recalibration was published in the Federal Register on May 4, 2008.
Medicare pays skilled nursing facilities on a prospective payment system known as the Skilled Nursing Facility (SNF) Prospective Payment System (PPS). The SNF PPS uses a resource classification known as Resource Utilization Groups (RUGs) to help determine a daily payment rate. The RUGs reflect a patient’s severity of illness and the kind of services that a person requires—something known as “case-mix.” Each RUG group is assigned a case-mix weight showing the relative acuity of each RUG group within the overall system.
In 2006, CMS made refinements to the case mix structure to account more accurately for the resources used in the care of medically complex patients. The refinement expanded the case-mix model to add nine new groups for beneficiaries requiring both therapy and extensive medical services, and included an adjustment to account for non-therapy ancillary services. The payment rates were updated using estimated data that have formed the basis of our payments to SNFs since the beginning of 2006.
The expansion of the RUG model was intended to be budget neutral but actually resulted in increased Medicare expenditures. Once actual utilization data under the expanded RUG model became available, CMS found that patients were being classified into one of the newly-created RUG groups more than 30 percent of the time (as compared to CMS’s earlier projection of 19 percent), thus triggering Medicare payments that are far higher than was originally intended.
In the May proposed rule, CMS proposed to make changes in the RUGs to establish payment rates that more accurately reflect the needs of patients. In this final regulation, however, the agency says it will continue to evaluate the data, and determine what action it will take in the future.
A copy of the final rule is available on the CMS website.
The Centers for Medicare and Medicaid Services (CMS) announced on July 31 its final acute care inpatient prospective payment system (IPPS) rule, which updates Medicare payments to hospitals for FY09 and includes payment provisions to reduce never events that occur in hospitals.
CMS’s action brings to 11 the number of never events for which it will not make additional payments, with the inclusion of the following:* Surgical site infections following certain elective procedures, including certain orthopedic surgeries, and bariatric surgery for obesity* Certain manifestations of poor control of blood sugar levels* Deep vein thrombosis or pulmonary embolism following total knee replacement and hip replacement procedures
In addition to the final rule, CMS sent a letter to state Medicaid directors providing information about how states can adopt the same never events practices. The letter specifically encourages states to adopt the same nonpayment policies outlined in the final rule. Nearly 20 states already have or are considering methods to eliminate payment for some never events.
The final rule will appear in the Aug. 19, 2008, issue of the Federal Register, and will be effective for discharges on or after Oct. 1, 2008. It updates payment policies and rates for more than 3,500 hospitals that receive Medicare payment. Overall, the final rule is estimated to increase Medicare payments to acute care hospitals by nearly $4.75 billion. Read the press release.
Millions of dollars worth of Indian Health Service (IHS) property has been lost or stolen over the past several years, according to a Government Accountability Office (GAO) analysis of FY04-07 IHS property records, a physical inventory at IHS headquarters, and an inventory of IT equipment at seven IHS field locations in 2007 and 2008. GAO also examined IHS policies, conducted interviews with IHS officials, and assessed the security of property. The findings were reported in an issue brief released July 31.
IHS identified more than 5,000 lost or stolen property items, worth about $15.8 million, including all-terrain vehicles and tractors and a computer containing sensitive data such as Social Security numbers. GAO’s physical inventory identified more than 1,100 IT items, worth about $2 million, missing from IHS headquarters, including laptops and digital cameras. GAO also estimates that IHS had about 1,200 missing IT equipment items at seven field office locations worth approximately $2.6 million, representing about 17 percent of all IT equipment at these locations.
However, the dollar value of lost or stolen items and the extent of compromised data are unknown because IHS does not consistently document lost or stolen property, said the report. GAO identified that the loss, theft, and waste can be attributed to IHS’s weak internal control environment, allowing property management problems to continue for more than a decade with little or no improvement or accountability for lost and stolen property and compromise of sensitive personal data. Read the report.
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