The Centers for Medicare & Medicaid Services (CMS) has announced a proposal to clarify its policies for Medicare coverage of bariatric (weight loss) surgery as a treatment for beneficiaries with type 2 diabetes.CMS proposes to not cover bariatric surgery for patients who do not meet the definition of morbid obesity, but do have type 2 diabetes. While recent medical reports claimed that bariatric surgery may be helpful for these patients, CMS did not find convincing medical evidence that bariatric surgery improved health outcomes for non-morbidly obese individuals. CMS seeks comments from the public about this evidence and its implications for coverage, and about which groups of patients should be covered for this surgery.The proposed decision notes that type 2 diabetes is one of the co-morbidities CMS would consider in determining whether bariatric surgery would be covered for a Medicare beneficiary who is morbidly obese. An individual with a body-mass index of at least 35 is considered morbidly obese. Read the proposed decision memorandum.
The cost of failing to fix our broken health care system is greater than the price tag of comprehensive health reform, according to “The Cost of Doing Nothing: Why the Cost of Failing to Fix Our Health System Is Greater than the Cost of Reform,” a new report and interactive online state guide released by the Health Policy Program at the New America Foundation. The report found that the average cost of a family employer-sponsored health insurance plan will climb to more than $24,000, or over 45 percent of median household income, by 2016. Under this scenario, half of American households would need to spend more than 45 percent of their income in order to secure health insurance for themselves and their families. The report also found that the U.S. economy lost as much at $207 billion in 2007 because of the poor health and shorter lifespan of the uninsured. Read the report.
The U.S. Department of Health & Human Services has issued a final rule for Patient Safety Organizations (PSOs), which becomes effective on Jan. 19, 2009. It provides final requirements and procedures for PSOs, new entities with which clinicians and healthcare providers can work to collect, aggregate, and analyze data within a legally secure environment of privilege and confidentiality protections to identify and reduce patient care risks and hazards.
Under interim guidance issued on Oct. 8, the Agency for Healthcare Research & Quality has already listed 15 PSOs. During the remainder of the interim period, these organizations will maintain their status as PSOs. However, these and other PSOs listed throughout the interim period are expected to comply with the final rule once it takes effect.
The listing of PSOs is authorized by the Patient Safety and Quality Improvement Act of 2005 (Patient Safety Act). The Patient Safety Act is intended to encourage voluntary, provider-driven initiatives to improve the safety of health care through the establishment of legal protections to ensure that providers who report patient safety information do not incur new legal liability; to promote rapid learning about the underlying causes of risks and harms in the delivery of health care; and to share those findings widely, thus speeding the pace of improvement.
Read the final rule.
A new report from The Joint Commission offers guiding principles and actions for the hospital of the future to meet the daunting challenges of older and sicker patients, patient safety and quality of care, economics, and the work force. As these challenges escalate, hospitals can lead the effort to meet these demands.
The report--titled Health Care at the Crossroads: Guiding Principles for the Development of the Hospital of the Future--contends that hospitals must respond in new ways as escalating healthcare costs are hitting record highs and the conditions and care needs of hospitalized patients are growing more complex. The report is the work of an expert panel comprising hospital executives and clinical leaders, as well as experts in technology, healthcare economics, hospital design and patient safety. The roundtable analyzed how socio-economic trends, technology, the physical environment of care, patient-centered care values, and ongoing staffing challenges will affect the hospital of the future.
The report recommends action in five core areas, including economic viability, technology adoption, patient-centered care, staffing, and hospital design.
Read the report.
With our nation's economic troubles, fewer patients are seeking hospital care while at the same time a growing proportion of patients need help paying for care, according to a new report from the American Hospital Association. The report also notes that hospitals, which employ 5 million people nationwide, could be facing uncertain times as their financial health falters and ability to borrow funds for improving facilities and updating technology is squeezed.
Many hospitals are beginning to see the effects of the economic downturn, with more than 30 percent of survey respondents reporting a moderate to significant decline in patients seeking elective procedures and nearly 40 percent of respondents reporting a drop in admissions overall. The majority of hospitals surveyed also noted an increase in the proportion of patients unable to pay for care. Uncompensated care was up 8 percent from July to September versus the same period last year, according to the report. Hospitals have seen the immediate impact of the economic downturn in other ways. According to the report, total margins fell to negative 1.6 percent in the 3rd quarter of 2008 as opposed to positive 6.1 percent during the same period last year. Like many institutions, hospitals rely on investment income as one of the ways to help make ends meet, especially since government payers do not cover the costs of care. However, recent turmoil in the stock market has turned investment gains to losses, further worsening hospitals' financial condition.
America’s Health Insurance Plans (AHIP) has proposed guaranteed coverage for people with pre-existing medical conditions in conjunction with an enforceable individual coverage mandate.
Under the new proposal, health plans participating in the individual health insurance market would be required to offer coverage to all applicants as part of a universal participation plan in which all individuals were required to maintain health insurance. The AHIP statement also said that premium support for moderate-income individuals and broad spreading of risk was necessary to promote affordability and maintain premium stability in the individual health insurance market.
To ensure that all Americans can access coverage, health plans also reiterated their long-standing support for making eligible for Medicaid every uninsured American living in poverty and strengthening the Children’s Health Insurance Program.
Read the release.
The transition team for President-elect Barack Obama has indicated that former Sen. Tom Daschle (D - S. D.) has accepted an invitation to serve as Secretary of the U.S. Department of Health & Human Services in the new administration if, as expected, he is confirmed by the Senate.
In an exclusive interview with hfm magazine, Sen. Daschle said, “There’s something wrong when a business like General Motors spends more on health care than they do on steel.” He thinks it is time to stop requiring that businesses manage health care, believing instead “that it is the responsibility of the country to help those who don’t have the means to pay for [health care] for themselves or their families.” “Leadership also means going on the offensive,” Sen. Daschle has told HFMA members, in a sign of what may be coming in the new administration. “Acting swiftly and in the early--and strongest--days of the next presidency will be the best way to not get caught in the stasis of the status quo.”
Sen. Daschle spent 26 years in Congress from 1978 to 2005, including eight years in the U.S. House of Representatives (1978-1986) and 18 years in the U.S. Senate (1986-2005). He served as Minority Leader of the Senate from 1994 to 2001 and from 2003 to 2005, and Majority Leader from 2001 to 2003. Since leaving the Senate, he has served as an advisor to the law firm of Alston & Bird in Washington, D.C., where he provides strategic advice on public policy issues such as health care, energy, financial services, trade, agriculture, tax policy, and telecommunications. Earlier this year, Sen. Daschle authored Critical: What We Can Do About the Health-Care Crisis (Thomas Dunne, 2008), which lays out his proposal for major reform of the U.S. healthcare system.
In a statement prepared for the U.S. Senate’s Committee on Finance, the Government Accountability Office (GAO) reports that the state and local government sector faces growing fiscal challenges, driven largely by rapidly rising healthcare costs.
The GAO’s fiscal model for state and local governments suggests that the sector is currently in an operating deficit, with simulations showing a continually widening “fiscal gap” between receipts and expenditures in coming years. The GAO calculates that closing the fiscal gap would require action today equal to a 7.6 percent reduction in state and local government current expenditures.
Looking specifically at healthcare costs, the report estimates that expenditures for Medicaid by state governments will rise quickly, as will health insurance costs for state and local government employees and retirees. The GAO assumes that the excess cost factor for health insurance costs alone--the growth in these costs per capita above GDP per capita--will average 2.0 percentage points annually through 2035. The projected rise in these health-related costs is the root of the long-term fiscal difficulties that the GAO’s simulations suggest will occur.
A survey by The Physicians’ Foundation depicts widespread frustration and concern among primary care physicians nationwide, which could lead to a dramatic decrease in practicing doctors in the near future. The survey examined the causes behind the doctors’ dissatisfaction, the state of their practices, and the future of care. The resulting findings show the possibility of significantly decreased access for Americans in the years ahead, as many doctors are forced to reduce the number of patients they see or quit the practice of medicine outright.
An overwhelming majority--78 percent--of physicians believe that there is an existing shortage of primary care doctors in the United States today. Additionally, nearly half of them--49 percent, or more than 150,000 practicing doctors--say that over the next three years they plan to reduce the number of patients they see or stop practicing entirely.
The reported reasons for the widespread frustration among physicians include increased time dealing with non-clinical paperwork, difficulty receiving reimbursement, and burdensome government regulations. Physicians say these issues keep them from the most satisfying aspect of their job: patient relationships.
Enrollment in consumer-directed or high-deductible health plans eligible for a tax-preferred savings account increased to 9.8 million adults this year, with participants more likely to have higher incomes and be in better health than those with traditional health coverage, according to survey results released by the nonpartisan Employee Benefit Research Institute (EBRI).
In addition, the fourth annual survey found that those in consumer-directed and high-deductible plans exhibited more cost-conscious behavior in their healthcare decision making than individuals with traditional health insurance. Results of the EBRI Consumer Engagement in Health Care Survey appear in the November 2008 EBRI Issue Brief.
Consumer-directed plans, which involve high deductibles coupled with tax-favored savings accounts that consumers can use to pay for their care out of pocket, are intended to make consumers more active participants in decisions about their health care, including cost issues. In recent years, employers have turned to consumer-directed plans as a way of managing rising health insurance premiums, writes Paul Fronstin, director of the EBRI health research and education program and author of the Issue Brief.
The Center for Medicare & Medicaid Services (CMS) reports that improper payments for Medicare fee-for-service (FFS) decreased from 3.9 percent in fiscal year (FY) 2007 to 3.6 percent, or $10.4 billion, in FY 2008.
In addition to improved Medicare FFS payments for FY 2008, CMS reports its first Medicare Advantage improper payment rate of 10.6 percent, or $6.8 billion, in payments made in Calendar Year (CY) 2006. Also being reported for the first time are the FY 2007 national composite error rates for Medicaid and for SCHIP. The Medicaid composite error rate is 10.5 percent, or $32.7 billion, of which the federal share is $18.6 billion. For SCHIP, the rate is 14.7 percent, or $1.2 billion, with a federal share of $0.8 billion.
The Medicare, Medicaid, and SCHIP improper payment rates are issued annually as part of the HHS Agency Financial Report. Improper payment rates include those payments that may have been paid incorrectly and do not necessarily reflect fraud. For Medicare FFS, most improper payments are due to claims for services that were medically unnecessary or incorrectly coded. The vast majority of Medicaid and SCHIP errors are due to inadequate documentation. Providers either did not submit information to support their FFS or managed care claims or did not submit additional data when requested, a similar trend seen with Medicare Parts A and B in previous years. Other errors are due to services provided under Medicaid or SCHIP to beneficiaries who were not eligible for either program or who were not eligible for the services received.
Although low fees discourage physicians from treating Medicaid patients, payment delays also play an important role in physician decisions to avoid Medicaid patients, according to a study by the Center for Studying Health System Change (HSC), published as a Web Exclusive in the journal Health Affairs.
Previous research has shown that about half of U.S. physicians accept all new Medicaid patients, compared with more than 70 percent of physicians accepting all new privately insured and Medicare patients. Medicaid fee levels vary considerably across states, and research has consistently shown that Medicaid participation by physicians is higher in states with higher fees than in states with lower fees. Less attention has been paid to the role of administrative burdens--including payment delays--on physicians' decisions to treat Medicaid patients.
The new study in Health Affairs, titled “Do Reimbursement Delays Discourage Medicaid Participation by Physicians?”, examined the effect of variation in average reimbursement times across states on physicians' willingness to accept Medicaid patients, finding that payment delays can offset the effects of higher Medicaid payment rates on physician participation.
Read the article.
The Department of Health and Human Services (HHS) today released the first-ever inventory of quality measures that are used for reporting, payment, or quality improvement by its agencies and operating divisions. The HHS measure inventory, which is available on the National Quality Measures Clearinghouse™, a web site of the Agency for Healthcare Research and Quality (AHRQ), is designed to advance collaboration within the quality measurement community and to synchronize measurement.
The measures currently can be sorted by agency or operating division and can be downloaded in their entirety. In the next several months, the inventory will be enhanced so the measure can be sorted by condition, setting, or measure domain.
"The release of this inventory is an important step in providing healthcare providers, clinicians, patients, policymakers and others with reliable, comprehensive information on the department's efforts to measure and improve health care quality," said AHRQ Director Carolyn Clancy, M.D. "I hope this is the start of a longer term effort for the department to develop further an overarching strategy that can be aligned with public and private efforts to accelerate improvements in quality and value for all Americans."
The nonprofit Network for Regional Healthcare Improvement (NRHI) has issued a report titled “From Volume to Value: Transforming Health Care Payment and Delivery Systems to Improve Quality and Reduce Costs.” The report urges fixes that could save billions of dollars and make expanding health insurance to the uninsured more affordable.
A summit of more than 100 leaders from across the country--doctors, hospitals, insurers, academics, foundations, government, regional healthcare collaboratives, and others--generated the recommendations. All endorse a profound transformation in the way hospitals, doctors, and other health care professionals are paid.
According to the report, our healthcare payment system is built to reward the quantity, not the quality, of treatment. This payment system penalizes doctors and hospitals financially for eliminating unnecessary tests and treatments, preventing infections, and keeping people healthy. The report recommends that insurers pay doctors and hospitals a single amount that covers all the services a patient needs instead of separate fees for each service. Moreover, insurers should change the system from paying more to correct errors and preventable complications to rewarding healthcare providers for successfully treating patients.
A new study published in the American Medical Association’s Disaster Medicine and Public Health Preparedness journal finds that consistent, evidence-based performance measurements are needed to accurately evaluate hospitals’ ability to manage patient care during a disaster. The study will be published in the journal’s December issue.
Healthcare institutions have invested considerable resources in emergency management preparedness, but because major disasters are rare, they continue to be challenged in evaluating the strengths and weaknesses of their emergency programs. Evidence-based preparedness policies are needed that model current healthcare quality improvement programs. One way to create such models is to evaluate hospital procedures during times that approach disaster levels. Traditional hospital quality measures, like wait times and missed diagnoses, can be applied, and the results can be compared to peer hospitals to determine strengths and weaknesses.
“It is important that performance standards be established for times of disaster to ensure uniformity across institutions, systems, and regions,” said Dr. Lazar. “Ultimately, we must advance achievable recommendations in performance measurement to guide resource allocation during emergencies. Hospital emergency management strategies are essential to our nation’s preparedness.” Read abstract.
The Centers for Medicare & Medicaid Services today announced the selection of four personal health record (PHR) companies to participate in the new Medicare PHR Choice Pilot in Arizona and Utah. Beginning in early 2009, this pilot program will offer beneficiaries with Original Medicare the opportunity to choose one of the selected PHR companies to maintain their health record information electronically.
The four selected companies are Google Health, HealthTrio, NoMoreClipboard.com, and PassportMD. These choices offer beneficiaries a range of product choices from ones that are free to ones that have “concierge” service as well as a diverse set of connections to healthcare providers, pharmacies, and other sources of health information.
PHRs are tools that can help consumers manage their health and health care services. A PHR, which is controlled by the consumer, is different than an electronic health record, which is owned by and under the control of the physician. Sometimes it only contains data entered by the individual or his or her provider, but it can also include information from a health plan--as is the case in this pilot, where Medicare will provide health information from its claims database. Read the announcement.
PricewaterhouseCoopers LLP (PwC) projects that President-elect Barack Obama's proposed reform of the U.S. health system would cost the federal government $75 billion in 2009 dollars, the equivalent of $2,500 per newly insured person, according to a report released on Wednesday, Nov. 12, by PwC's Health Research Institute. This level of spending would extend health insurance coverage to 95 percent of all Americans, including two-thirds of those currently without insurance. But funding the near-universal healthcare plan, written before the financial crisis, will likely rely heavily on the reallocation of existing dollars within the health system, which will create challenges and opportunities for the health industry.
According to the report, titled Healthcare Policy in an Obama Administration: Delivering on the Promise of Universal Coverage, approximately $25 billion--about one-third of the cost of the Obama proposal--could come from existing funding for the uninsured, much of which now goes to hospitals for uncompensated care.
The report offers a comprehensive look at the implications of President-elect Obama's proposed policies for commercial insurers, hospitals and other providers, pharmaceutical companies, and life sciences firms and employers. Hospitals will benefit from a decrease in uncompensated care, but uncompensated care funds could be reduced to academic medical centers and safety net hospitals. In addition, a shift in the payer mix to more Medicaid and Medicare may lower profit margins. Read the report.
Compared to patients in seven other countries, chronically ill adults in the United States are far more likely to forgo care because of costs; they also experience the highest rates of medical errors, coordination problems, and high out-of-pocket costs, according to a new study from the Commonwealth Fund. Published today as a Web Exclusive in the journal Health Affairs, the eight-country survey finds that U.S. patients are significantly more likely to call for fundamental change in their country's health care system, with a third saying the system needs to be rebuilt completely.
More than half (54 percent) of U.S. chronically ill patients did not get recommended care, fill prescriptions, or see a doctor when sick because of costs, compared to 7 to 36 percent in other countries. About one-third of U.S. patients--a higher rate than in any other country--experienced medical errors or poorly coordinated care, including delays in access to medical records or duplicated tests. Reflecting cost sharing as well as gaps in insurance coverage, 41 percent of U.S. patients spent more than $1,000 in the past year on out-of-pocket medical costs, compared with 4 percent in the U.K. and 8 percent in the Netherlands.
"The study highlights major problems in our broken health care system and the need to make major changes," said Commonwealth Fund Senior Vice President Cathy Schoen, lead author of the article. "Patients are telling us about inefficient, unsafe, and often wasteful care. Moreover, a lack of access as well as poor coordination of care is putting chronically ill patients at even higher health risk."Read the article.
Moody's Investors Service revised its outlook for fundamental credit conditions in the US for-profit hospital sector to negative from stable, citing the potential that a protracted economic downturn could exacerbate challenges already facing the sector, such as a weakening volume trend and an increasing number of patients having trouble paying their medical bills.
"Operators are beginning to see declines in more elective procedures, signaling that individuals may be deferring non-urgent care because of either the loss of insurance or higher deductibles and co-pays," said Moody's VP/Senior Credit Officer Dean Diaz. "On the collections side, a growing contributor to bad debt expense has been the balance due from patients after insurance coverage."
While the outlook is negative, Moody's continues to believe that the U.S. for-profit hospital sector is less directly impacted by the economic environment than other corporate sectors that are tied directly to consumer spending. Rated issuers in the sector also generally have adequate liquidity in the form of cash and available revolving credit.
The Moody's Industry Outlook, titled "U.S. For-Profit Hospital Sector Outlook Revised to Negative from Stable," is available on www.moodys.com (subscription required).
The nation is experiencing the beginning of a physician shortage, with primary care being especially hard hit. As the U.S. population grows and millions of baby boomers age, this shortage promises to get worse, with major repercussions for the health of the nation. The American Medical Association (AMA) has passed a new policy at its semi-annual policymaking meeting aimed at increasing the ranks of primary care physicians.
The AMA’s new policy includes a multi-pronged action plan addressing medical student debt, recruitment and training, and increased payments by insurers for primary care services. One challenge facing medical students considering primary care is their substantial medical school debt. On average, a medical student graduates owing $140,000, which can lead students to consider pursuing a career in higher paying specialties. The AMA will support programs to decrease the debt load of physicians who choose to practice primary care, including scholarships and loan repayment plans.
The AMA will also conduct studies on new models of care, such as the medical home, that may improve the quality of patient care and make the practice of primary care more rewarding for physicians. To spur broader interest in practicing primary care, the AMA will work with other organizations, such as medical schools, to develop new and innovative ways of recruiting and training primary care physicians. This may include offering students more educational experiences in community-based settings, like smaller hospitals or rural health clinics.
Moody's Investors Service has changed the outlook to negative from stable for the U.S. not-for-profit healthcare sector as disruptions in the credit and liquidity markets have worsened and the prospects of a protracted recession have increased. The change was announced in an outlook report that updates a similar report issued in September and expresses the credit agency's expectations for the fundamental credit conditions in the industry over the next 12 to 18 months.
"While most hospitals showed resiliency when initial economic weakening began in late 2007, we have begun to see in recent months greater-than-anticipated erosion in performance and liquidity," said Moody's Senior Vice President Lisa Goldstein, author of the report. "Volumes are softening, particularly in surgical cases, also contributing to financial performance declines. Likewise, the ongoing credit crisis, culminating in limited access to the capital markets in recent weeks, is also a factor. The tax-exempt debt market is a primary source of funding for not-for-profit hospitals."
For most hospitals, Goldstein said, sound management decisions about operating costs and capital investments coupled with skilled oversight and direction from hospital boards will be of special importance over the next year or two.
The report is titled "Not-for-Profit Healthcare Sector: Industry Outlook Revised to Negative from Stable," and is available at www.moodys.com.
A dramatic expansion in the number of magnetic resonance imaging (MRI) and computed tomography (CT) scans since 1995 has led to increased outlays for the federal government and other payers but not necessarily to better health care or reduced mortality, researchers report in a new study published in the November-December 2008 issue of the journal Health Affairs.
On the other hand, even in managed care settings where there are no particular financial incentives to use imaging, it is difficult to discern which images are worth having and which are not. This creates a real quandary for U.S. policymakers hoping to rein in overall health costs. More information will be needed to determine whether the benefits of these technologies are worth the additional costs.
Between 1995 and 2004, the number of CT and MRI units more than doubled. Using Medicare claims data, Stanford University's Laurence Baker and colleagues from Stanford and Harvard University found that the number of MRI procedures per 1,000 Medicare beneficiaries increased from 0.3 in 1985 to 50 in 1995. By 2003, that number reached 173. CT procedures more than doubled from 1995 to 2005, from 235 per 1,000 beneficiaries to 547. Read an abstract of the study.
As universal health care reemerges as a topic on the United States’ national agenda, a new report from the Insure the Uninsured Project compares universal healthcare systems in ten other nations, including Canada, Denmark, France, Germany, Israel, Japan, the Netherlands, Sweden, Switzerland, and the United Kingdom.
The report finds several similarities among the systems studied, including the willingness of other nations to modify their systems in order to achieve universal coverage. It finds a strong sense of solidarity underlying the European systems it studies, with both citizens and government committed to the notion of universal coverage as an entitlement.
The report also looks at challenges faced by nations with universal coverage. Chief among these is the rising cost of health care, caused in part by an aging population, widespread chronic disease, and the increasing cost of pharmaceuticals. In dealing with these rising costs, nations must reconcile competing demands of their healthcare systems. Read the report.
Nonfarm payroll employment fell by 240,000 in October, and the unemployment rate rose from 6.1 to 6.5 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported on Friday, Nov. 7.
October's drop in payroll employment followed declines of 127,000 in August and 284,000 in September, as revised. Employment has fallen by 1.2 million in the first 10 months of 2008; over half of the decrease has occurred in the past 3 months. In October, job losses continued in manufacturing, construction, and several service-providing industries.
Health care employment continued to expand in October, with an increase of 26,000. Over the past 12 months, health care employment has grown by 348,000.
Read the report here.
HFMA vice president Richard Gundling was cited in The New York Times (Abelson, “Hospitals See Drop in Paying Patients,” Nov. 6, 2008) in an article on a downturn in the volume of paying patients at a number of hospitals around the country. According to the article, these hospitals are reporting these declines even as they see a rise in emergency room traffic, charity care cases, and unpaid medical bills. The article also reports that insured patients seem to be deferring treatments such as knee replacements and weight-loss surgery, which are often more profitable for hospitals.
The article notes that patients with private insurance offset the lower fees paid for patients covered by Medicare and Medicaid. Gundling comments on the need for hospitals to balance their mix of patients to survive.
While not all hospitals are seeing declines, the article says that many are taking steps to contain costs in advance of expected slowdowns. Compounding the anxiety is continuing difficulty in the credit markets, which non-profit hospitals rely upon for municipal bond offerings.
President-elect Barack Obama's plan to overhaul the healthcare system, if it comes to pass, would have mixed implications for the healthcare industry, says Moody's Investors Service.
As outlined during the campaign, Mr. Obama's plan would likely benefit healthcare providers due to an increase in customers, but could put downward pressure on the credit profiles of pharmaceutical companies and healthcare insurers, due to cost-cutting measures outlined in the plan, according to the ratings agency.
"If a plan like what President-elect Obama has proposed were to be enacted, more consumers would have access to the healthcare system on an insured basis," says Moody's Costas Chrysostomou, a healthcare analyst with the agency's Corporate Finance Group. "While this is expected to benefit healthcare providers, cost-cutting initiatives proposed to fund the plan pose some challenges for drug companies and insurance providers."
The full Special Comment, titled U.S. Healthcare Industry: Credit Implications of the U.S. Election, is available on www.moodys.com.
Initiatives related to health care were on the ballot in several states for the November 4 elections.
California voters approved the Children’s Hospital Bond Act, which authorizes $980,000,000 in bonds to fund the construction, expansion, renovation, and equipping of children’s hospitals in the state. Children’s health was also on the mind of Montana voters, who approved an initiative enacting the Healthy Montana Kids Plan Act. The Montana act offers health coverage to uninsured children by increasing eligibility for the state’s children's health insurance program and the Montana Medicaid program and by helping families cover their children under employer-sponsored plans.
In Washington state, voters approved the Washington Death with Dignity Act, allowing terminally ill adults with less than six months to live to request and self-administer lethal medication prescribed by a physician. Michigan voters approved the medical use of marijuana.
Still undecided as of Thursday, November 6, was the outcome of a “medical choice” ballot initiative in Arizona, which would prohibit the state legislature from passing a law limiting residents’ choice of private healthcare systems or plans.
The Centers for Medicare & Medicaid Services (CMS) has announced that it is required to impose an automatic stay in the work of the four contractors selected for the Recovery Audit Contractors (RAC) permanent program. This action is the result of protests filed with the General Accountability Office (GAO) by two unsuccessful bidders for the RAC program.
An automatic stay will stop work for all four RAC regional awards until a determination is made by GAO, as required under provisions of the Competition and Contracting Act of 1984 (CICA).
Under the CICA, GAO has 100 days to issue its decision, which means a decision would be due for these protests in early February. The four RAC contracts--and any work under those contracts--are on hold pending the outcomes of the protests. Read more about the RAC permanent program.
The Department of Health & Human Services Office of Inspector General (OIG) has issued two reports examining the Medicare Part D prescription drug program. Under the program, private companies contract with the Centers for Medicare & Medicaid Services (CMS) as plan sponsors to provide Part D drug coverage to Medicare beneficiaries.
Plan sponsors are required to have a comprehensive program to identify fraud and abuse, and the first report looks at the extent to which sponsors have identified potential fraud and abuse. It finds that some plan sponsors did not identify any potential incidents, while some that did identify potential incidents did not initiate inquiries, corrective actions, or referrals to appropriate enforcement agencies. The report recommends that CMS review the plan sponsors to determine why some report high or low volumes of fraud and require sponsors to routinely report the results of their fraud and abuse programs.
The second report examines CMS’s oversight of sponsor compliance plans, which are required by federal regulation. It finds that although CMS had planned to begin routine compliance plan audits in January 2007, it had not completed any routine audits as of August 2008. It also finds that CMS had only information self-reported by plan sponsors to determine whether the sponsors are meeting federal requirements.
Beginning January 1, 2009, under new Joint Commission policy, laboratory accreditation decisions will no longer immediately affect hospital accreditation decisions. This policy establishes comparability in the way that a laboratory with an adverse accreditation decision rendered by The Joint Commission or one of its cooperative partners, the College of American Pathologists (CAP) or COLA, affects the hospital or other organization with which the laboratory is affiliated. Currently, a laboratory’s accreditation has a direct impact on the accreditation status of its affiliated organization.
Under the new policy, the accreditation of laboratories and hospitals accreditation will continue to be linked, due to the critical importance of laboratory services to the delivery of hospital care. An adverse laboratory accreditation decision--whether due to a survey by the Joint Commission, CAP, or COLA--will help prioritize the hospital’s or other organization’s next unannounced survey.
“The new approach meets the needs of Joint Commission customers and reinforces the importance of the laboratory in the delivery of patient care,” says Ann Scott Blouin, Ph.D., R.N., executive vice president, Accreditation and Certification Operations, the Joint Commission.
Leaders in health care and healthcare policy feel strongly that the way we pay for health care in the U.S. must be fundamentally reformed. The latest Commonwealth Fund/Modern Healthcare Health Care Opinion Leaders Survey reports that more than two-thirds (69%) of respondents expressed strong dissatisfaction with the current system, which is generally based on “fee-for-service” payment, saying the current system is not effective in encouraging high quality and efficient care.
The current fee-for-service system reimburses individual services--hospital stays, physician visits, and procedures--rather than paying for the most appropriate care for the patient over the course of an illness or a time period. In doing so, it creates incentives to provide more technical and more expensive services, rather than encouraging more effective, higher-value care. Only one percent of healthcare leaders surveyed said they preferred the current fee-for-service payment system to alternative approaches.
There was strong support for a move away from fee-for-service payment toward bundled approaches, which make a single payment for all services provided to a patient during the course of an episode or time period. When asked about preferred options for payment reform, 53 percent of opinion leaders chose a blend of modified fee-for-service and bundled per-patient payment, while another 23 percent chose bundled per-patient payment alone.
Eight out of 10 Americans fear that the current financial crisis will affect their ability to pay their medical bills, according to the results of a poll of more than 4,000 U.S. adults released today by the Deloitte Center for Health Solutions, a non-partisan research group. The poll also examined consumers’ attitudes about health care, an issue weighing heavily on voters’ minds as they head to the polls this election season.
Only six percent of Americans surveyed believe their family is completely prepared to handle future healthcare costs. Additionally, seven out of 10 believe the financial crisis will make it harder for those who are uninsured to receive medical treatment.
“Health care is a pocketbook issue for most Americans,” according to Paul Keckley, Ph.D., executive director of the Deloitte Center for Health Solutions. “As they make their final decisions on which candidate to vote for, our research suggests that the financial crisis has only compounded the significance of other issues, such as the affordability of health care. Consumers already struggling to pay their mortgages or put food on the table are now also asking themselves how their vote will affect their ability to afford health care for their families.”
The Centers for Medicare & Medicaid Services (CMS) has announced a new initiative for physicians who adopt and use qualified electronic prescribing systems to transmit prescriptions to pharmacies. Physicians who use e-prescribing may earn an incentive payment of 2 percent of their total Medicare allowed charges during 2009.
The e-prescribing incentive is in addition to a 2 percent incentive payment for 2009 for physicians who successfully report measures under the Physician Quality Reporting Initiative (PQRI), and both incentive payments are in addition to the 1.1 percent fee schedule update required by the Medicare Improvements for Patients and Providers Act of 2008. Thus, a physician who successfully reports under both the e-prescribing and PQRI initiatives could receive up to a 5.1 percent pay boost for 2009.
According to CMS, widespread adoption of electronic prescribing can eliminate medication errors that result from the misreading of handwritten prescriptions. Medicare beneficiaries may also have reduced out-of-pocket costs as e-prescribing facilitates communication between prescribers and pharmacies on lower-cost generic alternatives.
Read the CMS fact sheet.
The Centers for Medicare & Medicaid Services (CMS) has announced a final rule establishing Medicare payment and policy changes for services in hospital outpatient departments (HOPDs) and ambulatory surgical centers (ASCs) for calendar year 2009.
The final rule includes a 3.6 percent annual inflation update for HOPDs. However, with ambulatory payment classification (APC) weight calibrations, a new wage index, and rural adjustment, the average hospital will see a 3.9 percent increase. CMS is estimating that urban hospitals will see a 4.1 percent rise in their HOPD payments, while small rural hospitals could see as little as a 3.4 percent increase.
Other features of the new final rule include:• The addition of four new quality measures for imaging efficiency, raising from 7 to 11 the number of quality measures that HOPDs must meet in 2009 to receive the full annual payment inflation update. Medicare law requires that the annual update be reduced by two percentage points for certain hospitals that do not meet quality reporting requirements. • Changes in how CMS pays for imaging services when two or more imaging procedures from an imaging family are provided in one session. The final rule creates five imaging composite APCs performed in a single hospital session.• A continuing decline in the amount beneficiaries will pay for outpatient services based on a formula in the Medicare law that is designed to provide a gradual transition to 20 percent coinsurance for all APCs.
CMS projects that hospitals will receive $30.1 billion in 2009 for outpatient services furnished to Medicare beneficiaries, up from $28.5 billion in projected payments for 2008. Furthermore, CMS expects to make payments of almost $3.9 billion in 2009 to more than 5,100 ASCs that participate in Medicare, compared with $3.5 billion projected for 2008. Read the fact sheet on the final rule.
Over the past several years, there has been a significant shift in the payment for healthcare services through higher co-pays and deductibles. This shift is creating challenges for healthcare providers as the financial burden of consumer debt falls to them, according to a research study funded by Fifth Third Bank and summarized in a white paper.
Fifth Third Bank surveyed providers and thought leaders throughout the country to understand the impact they see on cash flow and operations as the use of consumer-directed health care (CDH) rises. The creation of CDH plans such as health savings accounts (HSAs) and high-deductible health plans (HDHPs) has changed how many consumers pay for health care. The past year has seen rapid growth due to economic conditions, increased employer adoption, and improved HSA/HDHP plan designs. A key stakeholder in this new environment is the provider.
While the research indicates the impact of CDH varies geographically, participants agree the CDH momentum is building. All research participants agree they must adapt their people, processes, and technologies or risk a negative cash flow impact. Other issues cited by research participants include price transparency, lack of consumer HDHP understanding, under-trained frontline staff, outdated legacy systems, public relations sensitivity, inadequate payer communication, and limited front-end payment tools.
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