Healthcare Financial News

Across the country, states estimate Medicaid enrollment grew by an average of 5.4 percent in state fiscal 2009, the highest rate in six years, according to a survey released today by the Kaiser Family Foundation’s Commission on Medicaid and the Uninsured.

This surpasses the projected 3.6 percent increase at the start of the year. Similarly, total Medicaid spending growth averaged 7.9 percent in FY09, the highest rate in five years, well above the 5.8 percent projected growth. For FY10, states estimate Medicaid enrollment will grow by 6.6 percent over FY09 levels.

Increases in the number of people on Medicaid and state spending on the program are attributed to the recession, which strains state budgets and pressures officials to curb costs despite increased financial help from the federal government. The annual 50-state survey of state Medicaid officials finds that these trends are expected to continue well into the 2010 fiscal year.

Because many states have already used Medicaid as a vehicle to expand health coverage, Medicaid officials expressed general support for an expanded role for the program in health reform. Even in these tight fiscal times more than half of the states in FY09 and FY10 are moving forward with efforts to improve eligibility standards or the streamline application processes in a bid to cover more people. Among the states implementing the broadest reforms and eligibility expansions are Colorado, Maryland, New York, Oklahoma, and Wisconsin.

However, state Medicaid officials did register concerns about health reform, too, reflecting current state budget situations. Three-quarters of states expressed concern that Medicaid eligibility expansions, mandated minimum provider rates, and new administrative costs–depending on how they were financed–could add to state fiscal woes.

If federal reform efforts are not enacted, the costs would be substantial, according to a new report commissioned by the Robert Wood Johnson Foundation. In every state, the number of uninsured will increase, employer-sponsored insurance coverage will continue to erode, spending on public programs will balloon, and out-of-pocket healthcare costs for individuals and families could increase by more than 35 percent over the next decade, the authors say. While all income levels would be affected, middle-class working families would be hardest hit.

Researchers from the Urban Institute used a simulation model to estimate how coverage and cost trends would change between now and 2019 if the health system is not reformed. The analysis examines best, intermediate, and worst-case scenarios. In the worst-case scenario:

• In 29 states, the number of people without insurance would increase by more than 30 percent.
• Businesses would see their premiums continue to increase—more than doubling in 27 states.
• Every state would see a smaller share of its population getting health care through their job.
• Every state would see their Medicaid/Children's Health Insurance Program spending rise by more than 75 percent.
• The amount of uncompensated care in the health system would more than double in 45 states.

The American Medical Association (AMA) has expedited the publication of a new code specific to vaccine administration and revised existing code 90663 to include the H1N1 vaccine.

The new Current Procedural Terminology (CPT) code issued by the AMA will streamline the reporting and reimbursement procedure for physicians and healthcare providers who are expected to administer nearly 200 million doses of the H1N1 vaccine in the United States. The codes will also help to efficiently report and track immunization and counseling services related to the H1N1 vaccine throughout the healthcare system.

In consultation with the U.S. Department of Health and Human Services, the AMA CPT Editorial Panel created code 90470 to report H1N1 immunization administration and counseling. Code 90663 was revised to refer specifically to the H1N1 vaccine product. Both, revised code 90663 and Category I CPT Code 90470 are effective immediately.

For quick reference, the two codes are below:

90470-H1N1 immunization administration (intramuscular, intranasal), including counseling when performed
90663-Influenza virus vaccine, pandemic formulation, H1N1

U.S. Department of Health and Human Services (HHS) Secretary Kathleen Sebelius today announced awards totaling $27.8 million to health center-controlled networks and large multi-site health centers to implement electronic health records (EHR) and other health information technology (HIT) innovations. The funds are part of the $2 billion allotted to HHS’ Health Resources and Services Administration (HRSA) under the American Recovery and Reinvestment Act of 2009 (ARRA) to expand healthcare services to low-income and uninsured individuals through its health center program..

Eighteen grants totaling more than $22.6 million will support EHR implementation. Grants totaling more than $2.6 million will help four grantees implement a variety of HIT innovations, including the creation of health information exchanges among different providers and the incorporation of HIT at dental delivery sites. Another five grants totaling more than $2.5 million will help health centers devise plans to use existing EHRs to improve patient health outcomes.

HRSA received $2 billion through the Recovery Act to expand healthcare services to low-income and uninsured individuals through its health center program. To date, more than $1.3 billion of these funds have been awarded to community-based organizations across the country. HRSA-supported health centers treated 17 million patients in 2008, 40 percent of whom have no health insurance.

Read the HHS press release.

The Centers for Disease Control and Prevention (CDC) has awarded $4.37 million in grants to enhance healthcare information management and to improve the detection of and response to emerging public health threats. The grants will fund four new Centers of Excellence in Public Health Informatics, at Harvard Pilgrim Health Care, Indiana University, the University of Pittsburgh, and the University of Utah.

The overall purpose of the initiative is to discover strategies and tools that increase the ability of health departments, physicians, and other healthcare providers to promote health and prevent diseases, injuries, or disabilities. Each center of excellence will conduct two new projects that support national priorities in informatics, and support real-time biosurveillance for potential health threats through immediate access to data from hospitals and healthcare systems in major metropolitan areas.

Five previously funded centers have become national leaders in public health informatics, generating more than 85 peer reviewed publications, 153 presentations at national meetings, and more than 100 posters and abstracts. They also have contributed to strategic national activities such as the Informatics Grid and the Electronic Medical Record Initiative.

HFMA has updated an online Resource Library presentation that provides a brief overview of reform proposals and offers providers resources to help prepare for these changes. An Overview of Proposed Healthcare Reforms Impacting Hospitals includes talking points that focus on to implications of current reform proposals for hospitals.

The Kaiser Family Foundation’s Commission on Medicaid and the Uninsured has updated its online database of Medicaid benefits to include data from October 2008, the most recent available.

The comprehensive database houses information on Medicaid acute and long-term care benefits in the 50 states, the District of Columbia and the U.S. territories. It includes data about 46 services, including whether the benefit is covered, the populations that are eligible to receive various benefits, and the limitations, copays, and payment rules that apply to the benefits for each state or jurisdiction. The database is searchable by Medicaid benefit as well as by state.

Several frequently occurring infections were among the most rapidly increasing reasons for hospitalizations between 1997 and 2007, reports the Agency for Healthcare Quality and Research (AHRQ). Stays for skin and subcutaneous tissue infections rose 90 percent for men and 75 percent for women. Septicemia, a life-threatening infection, increased by 63 percent—up 77 percent among men and 53 percent among women. Septicemia-related stays tripled in costs from $4.1 billion in 1997 to $12.3 billion in 2007.

Overall, inflation-adjusted aggregate costs for hospital stays rose from $222.4 billion in 1997 to $343.9 billion in 2007—an increase of 55 percent. The most important driver of cost increases was greater intensity of services provided during the hospital stay. Costs per discharge increased by 3.1 percent annually.

AHRQ’s HCUP Facts and Figures: Statistics on Hospital-based Care in the United States, 2007 presents information derived from the 2007 Healthcare Cost and Utilization Project (HCUP) Nationwide Inpatient Sample. This report includes information from the 2007 database containing discharge records for all patients treated in a sample of approximately 1,000 hospitals. Discharges are weighted to represent all inpatient stays in community hospitals across the nation.

Excess rates of several preventable diseases among African Americans and Latinos will cost the healthcare system $23.9 billion in 2009, according to a study published by the Urban Institute. The excess cost of conditions including diabetes, hypertension, and stroke among these populations is estimated at $15.6 billion for Medicare and $5.1 billion for private insurers. Over the next decade, the total cost is approximately $337 billion. Left unchecked, these annual costs will more than double by 2050 as the representation of Latinos and African Americans among the elderly increases, the authors conclude.

State officials are concerned about “the longer term sustainability of their Medicaid programs” after federal stimulus funding expires in January 2011, according to a new study conducted by the Government Accountability Office (GAO) and reported by The Wall Street Journal. States told GAO that they are using the stimulus funding to cover their increased Medicaid caseload and to maintain current benefits and eligibility levels. Some states have used the money to finance general state budget needs. About $90 billion of the $787 billion stimulus is allocated for additional funding of state Medicaid programs.

The total number of hospital discharges grew by 14 percent between 1997 and 2007 with growth varying by expected primary payer, according to a report recently released by the Agency for Healthcare Quality and Research (AHRQ). HCUP Facts and Figures: Statistics on Hospital-Based Care in the United States, 2007 presents data from the Nationwide Inpatient Sample database on hospital care in 2007, as well as trends in care from 1997 to 2007. 

Highlights from the report include:

• The average length of stay declined from 4.8 to 4.6 days from 1997 to 2007, likely attributable to the decline in the average length of stay for hospitalizations billed to Medicare (from 6.3 to 5.6 days).
• Medicare and Medicaid were the expected primary payers for more than half of all inpatient hospital discharges and about 60 percent of aggregate hospital costs in 2007. Medicare stays had the highest average cost ($10,800) and Medicaid the lowest ($6,600). While the share of Medicare stays remained relatively stable between 1997 and 2007, discharges billed to Medicaid increased from 16 to 19 percent. Hospitalizations billed to Medicare and Medicaid accounted for more than three-quarters of the increase in discharges from 1997 to 2007.
• The share of discharges billed to private insurance fell from 39 to 35 percent between 1997 and 2007, reflecting the decline in the population with private insurance coverage.
• The uninsured accounted for 6 percent of all hospital stays in 2007, about the same as in 1997. These stays accounted for 22 percent of discharges against medical advice in 2007.
  

HCUP Facts and Figures features an overview of numerous hospital-related topics, including general characteristics of U.S. hospitals and the patients being treated; the most common diagnoses, conditions, and procedures associated with inpatient stays; the costs and charges associated with hospitalizations; and a section that details trends in hospital care by expected payer, including Medicare, Medicaid, private insurance, and the uninsured.

The Kaiser Family Foundation has created an interactive calculator that helps illustrate premium payments and subsidies under the health reform plans being considered by key Congressional committees.

The calculator approximates premiums and subsidies for those who purchase coverage on their own through an exchange or gateway. It estimates what individuals and families at different income levels might have to pay for health insurance premiums, what share they would pay directly, and how much financial assistance the federal government would provide toward the premium cost under the alternative plans in the House and Senate. The calculator also illustrates how premiums might vary by age, income, and family size.

The Federal Trade Commission (FTC) and the U.S. Department of Justice (DOJ) have announced that they are considering updating the Horizontal Merger Guidelines used by both agencies to evaluate the potential competitive effects of mergers and acquisitions.

The two agencies plan to solicit public comment and hold joint public workshops in December and January to determine whether the Horizontal Merger Guidelines accurately reflect the current practice of merger review and to take into account legal and economic developments that have occurred since the last significant Guidelines revision in 1992.

The Horizontal Merger Guidelines outline the merger enforcement policy of the FTC and DOJ. The Guidelines describe the analytical framework and specific standards normally used by the agencies in analyzing mergers. They are intended to reduce the uncertainty associated with enforcement of the antitrust laws in the merger area.

The FTC has posted a set of questions to provide a framework for public comments.

Read the FTC press release.

The Medicare recovery audit contractor for Region A, Diversified Collection Services, has initiated automatic audits of selected Medicare claims for durable medical equipment. The Region A states are Connecticut, Delaware, District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and Vermont. For more information about RAC audits, visit the RAC section of HFMA’s online Resource Center.

The Institute for Healthcare Improvement (IHI) is offering a new resource to help hospitals improve quality while reducing costs. IHI’s Improvement Map is a free, web-based tool that provides best practice knowledge on 70 quality improvement processes, 40 of which can help hospitals manage costs.

According to the IHI, more than 100 hospitals participated in testing the prototype of the Improvement Map and are currently using it as a guide in their quality improvement efforts.

The IHI is hosting a free series of web conferences designed to introduce users to the IHI Improvement Map navigation tool on Thursday, September 24.

The U.S. Census Bureau has released the latest American Community Survey (ACS) data, providing a statistical portrait of the characteristics of the nation’s population in 2008.

According to the new snapshot, one in four people in Texas (24.1 percent) lacked health insurance in 2008, the highest rate in the nation. At the other end of the spectrum, fewer than one in 20 Massachusetts residents (4.1 percent) lacked coverage.

The uninsured rate for children ranged from 2.1 percent (Massachusetts) to 20.2 percent (Nevada).

Health insurance coverage was one of three new topics added to the ACS for 2008.The ongoing survey of approximately 3 million addresses every year provides a comprehensive picture of the U.S. population. It covers more than 40 topics such as income, educational attainment, housing, and family structure.

Read the press release from the Census Bureau.

Visit American Factfinder, the Census Bureau’s online data tool, to obtain ACS data for the nation, all states and the District of Columbia, all congressional districts, approximately 800 counties, and 500 metropolitan and micropolitan statistical areas, among others.

The average annual total return on investable assets for FY08 for 143 nonprofit healthcare organizations participating in the Commonfund Institute’s 2009 Commonfund Benchmarks Study of Healthcare Organizations was -21.2 percent (net of fees).

This compares with average returns of 8.0 percent for FY07, 10.6 percent for FY06, and 6.3 percent for FY05, and represents by far the lowest return recorded in the seven studies conducted by the Commonfund Institute annually since FY02. The negative FY08 return lowered participating healthcare organizations’ trailing three-year returns to -2.3 percent. Returns were barely positive for the trailing five-year period, at 1.7 percent.

Top decile performers realized an average annual return of -2.2 percent (against an average -21.2 percent return for the study universe) while the top quartile averaged a -8.7 percent return.

For the fourth consecutive year, participating healthcare organizations reported higher debt levels. Overall, debt rose to an average of $681 million in FY08 from $580 million in FY07, $509 million in FY06, and $395 million in FY05. The study also measured debt as a percentage of investable assets. For all participants, debt was an average of 92.1 percent of investable assets in last year’s report. This year, it ballooned to 122.9 percent of investable assets.

The review of the 2008 study and the design for the 2009 report took place in the late winter and spring of 2009. Field interviews with the participating institutions followed in the second and third calendar quarters of 2009.

Creating ways for healthful lifestyle habits to be the natural first choice for Americans is the goal of a $650 million initiative of the U.S. Department of Health and Human Services (HHS). The funds from the American Recovery and Reinvestment Act will be used to increase physical activity, improve nutrition, decrease obesity, and decrease smoking in U.S. communities.

HHS Secretary Kathleen Sebelius announced a funding opportunity for communities and tribes to apply for $373 million in cooperative agreements for the comprehensive public health initiative, Communities Putting Prevention to Work, to be led by the Centers for Disease Control and Prevention.

The initiative seeks to change systems and environments—for example, improving access to healthy foods and opportunities for physical activity—and putting into place policies, such as clean-indoor-air laws, that will promote the health of populations. The funds will be awarded to communities through a competitive selection process.

Communities interested in applying for grants can find more information at www.grants.gov. The application deadline is Dec. 1, 2009.

Read the HHS news release.

Seniors in Medicare Advantage spent fewer days in a hospital, were subject to fewer hospital readmissions, and were less likely to have “potentially avoidable” admissions, for common conditions ranging from uncontrolled diabetes to dehydration, according to a new analysis of publicly available Agency for Healthcare Research and Quality (AHRQ) data released by America’s Health Insurance Plans (AHIP).
 
The study analyzed statewide datasets on hospital admissions in California and Nevada. The unique data in these states allows for direct comparisons of utilization rates among enrollees in Medicare Advantage plans and in fee-for-service (FFS) Medicare. These comparisons were adjusted for health status using the Medicare risk score process for age, sex, and 70 Hierarchical Condition Categories that are used as a basis for Medicare risk adjustment. Key findings from the report include:

• Medicare Advantage beneficiaries in California spent 30 percent fewer days in the hospitals than patients with FFS Medicare, and in Nevada, seniors in Medicare Advantage plans spent 23 percent fewer days in the hospital. 
• Medicare Advantage enrollees were readmitted to the hospital in the same quarter for the same condition 15 percent less often in California and 33 percent less often in Nevada compared to FFS Medicare. 
• In both California and Nevada, seniors in Medicare Advantage were 6 percent less likely than seniors in FFS Medicare to be admitted to the hospital for conditions described by AHRQ as “potentially avoidable,” such as dehydration, urinary tract infection, or uncontrolled diabetes.

Nearly half of consumers believe that academic medical centers are less expensive than community hospitals for treatment services, according to survey findings published in a new report by the Deloitte Center for Health Solutions. The authors conclude that consumers are unclear about the unique characteristics of academic medical centers that lead to higher costs and wider scope of services.

Entitled Academic Medical Centers: The Tipping Point, the report shares recent research about the environmental pressures facing academic medical centers. It also offers a perspective on the opportunities, strategies, and innovations that some organizations have pursued, as well as strategic questions designed as a checklist for academic medical centers and their stakeholders to consider as they look to transform their organizations and drive sustainability.

The Centers for Medicare & Medicaid Services (CMS) has proposed a new prospective payment system (PPS) for facilities that provide dialysis services to Medicare beneficiaries who have end-stage renal disease (ESRD).

Under the proposed rule, CMS would establish a base bundled payment rate of $198.64 for all services related to an ESRD session, including the services in the current composite rate as well as items, including oral drugs, that are billed separately. The proposed base rate was derived from 2007 claims data for both composite rate and separately billable services and updated to reflect projected 2011 prices. The rate would be adjusted for case mix factors such as the patient’s age, gender, body size, and time on dialysis. An additional case-mix adjustment would apply to pediatric patients.

Other adjustments to the payment rate would be made for comorbidities that have a significant impact on a course of treatment, geographic differences in labor costs, low-volume facilities, and cost outliers.

CMS will accept comments on the proposed rule through November 16, 2009, and will respond to them in a final rule to be issued in 2010. The new payment system would apply to dialysis services furnished to Medicare beneficiaries on or after January 1, 2011.

Senate Finance Committee Chairman Max Baucus has unveiled an $856 billion healthcare reform bill that would expand coverage to 94 percent of the U.S. population through Medicaid expansions and an individual mandate to purchase insurance, with low-income subsidies.

The plan would create state-based insurance exchanges to expand access to affordable insurance products and create new not-for-profit co-ops instead of a public plan option.

View the draft legislation.

Premiums for employer-sponsored health insurance rose to $13,375 annually for family coverage this year—with employees on average paying $3,515 and employers paying $9,860, according to the 2009 Employer Health Benefits Survey released today by the Kaiser Family Foundation and the Health Research & Educational Trust. 

Family premiums rose about 5 percent this year, which is much more than general inflation (which fell 0.7 percent during the same period, mostly due to falling energy prices). Wages went up 3.1 percent during the same period.  Since 1999, premiums have gone up a total of 131 percent, far more rapidly than workers’ wages (up 38 percent since 1999) or inflation (up 28 percent since 1999).  For the past few years, the annual rise in premiums has been more moderate than the double-digit growth experienced earlier this decade.   

The survey found that 60 percent of firms offer health benefits to any of their workers this year.  As in the past, the smaller the firm, the less likely it is to offer health benefits—with fewer than half (46 percent) of the smallest employers (three to nine workers) offering health benefits.  

Among those firms offering benefits, 21 percent report they reduced the scope of health benefits or increased cost sharing due to the economic downturn, and 15 percent report they increased the worker’s share of the premium.

Selected findings from the study were published today in the journal Health Affairs.

In 2007, there were more than 4.7 million hospital stays among adults aged 55 to 64 years totaling $55.9 billion—16 percent of total hospital costs in the United States, according to a report published recently by the Agency for Healthcare Research and Quality. The number of people in this age group is expected to grow by 18 percent between 2010 and 2020—faster than any other age group younger than 65 years old.

Hospitalizations for these so called “near-elderly adults” were similar to those for the elderly in terms of length of stay, costs, and percentage of elective stays. The vast majority of stays in this Baby Boomer group were covered by public or private insurance and were less likely than hospital stays among middle-aged adults to be uninsured.

Statistical Brief #79: Hospital Utilization among Near-Elderly Adults, Ages 55 to 64 Years, 2007 presents data from the Healthcare Cost and Utilization Project. Specifically, the report compares near-elderly hospital stays with other adult hospitalizations and examines differences in utilization and patient characteristics by insurance status. Additionally, this report provides information about the types of diagnoses most often associated with near-elderly hospitalizations and specific procedures commonly performed during these stays.

Health reform in Massachusetts has achieved nearly universal coverage—leaving the number of uninsured working-age adults at just 4 percent, well below the 20 percent uninsurance rate nationally for 18- to 64-year-olds. At the same time, Massachusetts’ health reform effort enjoys a 72 percent approval rating statewide, according to a new study by the Urban Institute. The study found that adults with incomes less than 300 percent of the federal poverty threshold saw the largest gains in coverage between 2007 and 2008, with the share of uninsured adults in that category falling from 24 percent to 8 percent.

Employer-sponsored insurance in Massachusetts continued to gain ground in 2008, increasing nearly 5 percentage points over pre-reform levels in 2006, and now provides coverage for more than 70 percent of all nonelderly adults in the state. Rather than undermining private insurance coverage, as some feared, health reform in Massachusetts has led to an expansion of employer-sponsored insurance in the state. These findings were released as a part of a new policy brief, Health Reform in Massachusetts: An Update on Insurance Coverage and Support for Reform as of Fall 2008.

The brief is the latest in a series funded by Blue Cross Blue Shield of Massachusetts Foundation, the Commonwealth Fund, and the Robert Wood Johnson Foundation on implementation of the Massachusetts reforms.

Teaming up with top hospitals and health systems across the country to use new methods to find the causes of and put a stop to breakdowns in patient care, The Joint Commission is launching the Center for Transforming Healthcare.

The Center’s first initiative is tackling hand washing failures, which contribute to health care-associated infections. The next project will target breakdowns in hand-off communications, which involve transfer and acceptance of patient care responsibilities. Future projects will focus on improving other aspects of infection control, mix-ups in patient identification, and medication errors.

Read the press release from The Joint Commission.

The U.S. Census Bureau announced today that the number of people without health insurance coverage rose from 45.7 million in 2007 to 46.3 million in 2008, while the percentage remained unchanged at 15.4 percent. Other findings related to health insurance include the following:

• The number of people with health insurance increased from 253.4 million in 2007 to 255.1 million in 2008.
• Between 2007 and 2008, the number of people covered by private health insurance decreased from 202.0 million to 201.0 million, while the number covered by government health insurance climbed from 83.0 million to 87.4 million. The number covered by employment-based health insurance declined from 177.4 million to 176.3 million.
• The number of uninsured children declined from 8.1 million (11.0 percent) in 2007 to 7.3 million (9.9 percent) in 2008. Both the uninsured rate and number of uninsured children are the lowest since 1987, the first year that comparable health insurance data were collected.
• Although the uninsured rate for children in poverty declined from 17.6 percent in 2007 to 15.7 percent in 2008, children in poverty were more likely to be uninsured than all children.

The Census Bureau also reported that real median household income in the United States fell 3.6 percent between 2007 and 2008, from $52,163 to $50,303. This breaks a string of three years of annual income increases and coincides with the recession that started in December 2007.

The nation’s official poverty rate in 2008 was 13.2 percent, up from 12.5 percent in 2007. There were 39.8 million people in poverty in 2008, up from 37.3 million in 2007.

Payment reductions associated with Medicare’s policy of not paying for six hospital-acquired conditions are negligible (0.001 percent, equivalent to $1.1 million nationwide), according to a study published in Health Affairs.

In 2008, Medicare stopped reimbursing hospitals for treating eight avoidable hospital-acquired conditions. The study authors used 2006 California hospital discharge data to model the financial impact of this policy on six such conditions.

In the study, hospital-acquired conditions were present in 0.11 percent of acute inpatient Medicare discharges; only 3 percent of these were affected by the payment policy. This is unlikely to encourage providers to improve quality, write the study authors. They suggest that options to strengthen the incentives include further payment modifications for hospital-acquired conditions or expanding the hospital-acquired condition policy to exclude payment for consequences, additional procedures, and readmissions.

The U.S. Department of Justice (DOJ) announced today that it will not challenge a proposal by Memorial Health Inc., and St. Joseph’s/Candler Health System to enter an exclusive joint purchasing agreement with respect to the purchase of certain medical and surgical supplies. The DOJ said that the proposed joint purchasing agreement may yield volume discounts and reduced transaction costs for the hospitals and ultimately could result in lower costs and increased hospital services for consumers.

Under the proposed agreement, Memorial and St. Joseph’s/Candler would jointly evaluate medical and surgical products, designate suppliers, and negotiate prices and other terms with them.

Memorial and St. Joseph’s/Candler are 501(c)(3) non-profit organizations that own acute tertiary care hospitals in Savannah, Ga., that serve southeast Georgia and the low-country area of South Carolina.

The DOJ determined that the proposal meets the requirements of the antitrust safety zone set forth in Statement 7 of the DOJ’s and Federal Trade Commission’s Statements of Antitrust Enforcement Policy in Health Care. The safety zone requires that the cost of all products purchased through the joint purchasing agreement account for less than 20 percent of the total revenue of all products and services sold by each participant in the agreement. It also requires that products purchased through the joint purchasing agreement from a given supplier account for less than 35 percent of that supplier’s sale of those products in the relevant market.

Under the DOJ’s business review procedure, an organization may submit a proposed action to the Antitrust Division and receive a statement as to whether the Division currently intends to challenge the action under the antitrust laws.

Read the U.S. Department of Justice press release.

COBRA enrollments have doubled since the U.S. government enacted a new subsidy to make health insurance more affordable to workers who have been laid off, according to an analysis published in August by Hewitt Associates.

More than 14 million workers are now eligible for the Consolidated Omnibus Budget Reconciliation Act (COBRA) subsidy under the American Recovery and Reinvestment Act of 2009 (ARRA). Hewitt's analysis examined the COBRA enrollment activity for 200 large U.S. companies representing 8 million employees. From March 2009 to June 2009, monthly COBRA enrollment rates for Americans eligible for the subsidy averaged 38 percent, up from 19 percent for the period of September 2008 through February 2009.

Under the original COBRA legislation, involuntarily terminated workers were required to pay 100 percent of the healthcare premium plus an additional 2 percent to cover administrative costs, which translates to roughly $8,800 a year in COBRA healthcare costs for the average worker. Under ARRA, eligible workers receive a nine-month subsidy that leaves them responsible for paying only 35 percent of the COBRA premium, or about $3,000 a year. The research shows that on average, workers with employer-sponsored health coverage pay 22 percent of the premium cost, or $1,900 a year.

Read the press release from Hewitt Associates.

Read about CMS-sponsored support services for COBRA assistance eligibility denials.

Employment in U.S. hospitals edged downward to a seasonally adjusted 4,720,800 people in August, the U.S. Bureau of Labor Statistics reported. That's 60,100 more than a year ago but 700 fewer than in July. The unadjusted total was 4,736,700. Nationally, the overall unemployment rate in August was 9.7 percent, up from 9.4 percent in July.

Almost 75 percent of physicians were accepting all or most new Medicare patients, the vast majority of physicians contracted with managed care plans, and slightly fewer than six in 10 physicians provided charity care in 2008, according to findings released from the nationally representative Center for Studying Health System Change (HSC) 2008 Health Tracking Physician Survey.

In addition, slightly more than half of physicians (53 percent) reported their practices were accepting all or most new Medicaid patients; 28 percent reported accepting no new Medicaid patients.

The survey also found that 44 percent of physicians reported receiving some form of performance-adjusted salary in 2008. Roughly a quarter indicated payment by fixed salary, and 20 percent received a share of practice revenue.

Funded by the Robert Wood Johnson Foundation, the 2008 Health Tracking Physician Survey covers a wide variety of physician and practice dimensions, from basic physician demographic information, practice organization and career satisfaction to insurance acceptance, compensation arrangements and charity care provision. The 2008 survey includes responses from more than 4,700 physicians who provide at least 20 hours per week of direct patient care, and had a 62 percent response rate. Because of changes in survey administration, results from the 2008 physician survey cannot be compared to findings from earlier HSC Community Tracking Study Physician Surveys.

U.S. Department of Health and Human Services Secretary Kathleen Sebelius has announced $70.9 million in grants to 13 states to support the expansion of healthcare coverage for their uninsured populations.

The grants are funded under the new State Health Access Program, an outgrowth of the agency's State Planning Grant program that operated from 2000 to 2007. This program enabled many states to develop plans that increased health insurance coverage for their uninsured residents.

States that will receive funding include Colorado, Kansas, Maine, Minnesota, Nevada, New York, North Carolina, Oregon, Texas, Virginia, Washington, West Virginia, and Wisconsin.

The grants, to be made over a five-year period, require a 20 percent match unless a state demonstrates a financial hardship. In addition, states must show that they are able to sustain the program after federal funding has expired. The impact and results of state projects will be reported to Congress at the end of the grant period.

Read the HHS press release.

A one-year evaluation at Group Health Cooperative is the first to demonstrate the measurable benefit to both patients and staff when a primary care practice adopts a patient-centered medical home model. This model gives patients more time with doctors, more preventive care, and improved collaboration among caregivers. The American Journal of Managed Care published the results, which include significantly fewer emergency room visits and hospitalizations.

The study compared a random sample of the 9,200 patients at Group Health's medical home to a control group. At one year, patients at the medical home reported:

• 29 percent fewer emergency room visits, 11 percent fewer hospitalizations, and 6 percent fewer in-person visits
• Higher ratings on six scales of patient experience
• A 94 percent increase in e-mail use, 12 percent more phone consultations, and more group visits and self-management support workshops
• That they received better health care, including needed screening tests, management of their chronic illnesses, and monitoring of their medications

In addition, only 10 percent of the medical home doctors, nurses, and staff felt burned out or emotionally exhausted versus 30 percent of controls.

Much national attention is focused on the medical home model as a way to improve health outcomes, control costs, and help solve the primary care shortage. Currently, 25 medical home projects are active in 17 states. Group Health is expanding the medical home model from its Factoria Medical Center in Bellevue to all 26 of its medical centers in Washington state and North Idaho.

Medicare could save an estimated $500 million per year by expanding the multiple procedure payment reduction (MPPR) policy beyond the designated imaging and surgical services, the Government Accountability Office (GAO) concludes in a new report.

Under an MPPR, the full fee is paid for the highest-priced service and a reduced fee is paid for each subsequent service to reflect efficiencies in overlapping portions of the practice expense component—clinical labor, supplies, and equipment. For example, a nurse’s time preparing a patient for a medical procedure or a technician’s time setting up the required equipment is incurred only once.

According to the report, the Centers for Medicare & Medicaid Services plans to study the potential impact of the policy on other nonsurgical services that are commonly furnished together.

Cardiac resynchronization therapy defibrillators reduce hospitalizations among patients with mild heart failure, according to a study published in the New England Journal of Medicine. These implanted devices try to slow heart failure by correcting inefficient heartbeats, in contrast with standard defibrillators, which  deliver a jolt after the heart stops. The resynchronizing defibrillators cost approximately $30,000 each.

After an average of 2.4 years, about 17.2 percent of study patients with a resynchronizing defibrillator had been hospitalized or intensively treated for heart failure, or had died. The corresponding figure for patients with a standard defibrillator was 25.3 percent. About 7 percent of patients in each group died.

The four-year study of 1,820 patients was funded by Boston Scientific.

In an accompanying editorial, University of Pennsylvania cardiologist Mariell Jessup noted that based on study results, 12 patients would need to be treated to prevent one heart-failure event.