2011 November

Archive for November 2011

Indiana on Healthcare Reform: Take the Lead, or Wait for Feds?

October 12, 2011

INDIANAPOLIS – Indiana is yet to decide if it will develop a health-insurance “exchange” as part of requirements outlined by the Affordable Care Act, or allow the federal government to handle the implementation.

A recent Indiana Health Exchange Symposium, sponsored by AARP, brought folks from all sides together to consider options. So far, says Seema Verma, health-care reform lead for the state of Indiana, there are more questions than answers from the feds.

“They’ve really put out almost no information about what a federal exchange would look like, so there’s nothing for us to compare to at this point.”

Indiana has not committed to creating its own exchange, Verma says, but is involved in planning and research if it’s decided that is the best option. Indiana is one of the 28 states challenging the federal health-care law. The U.S. Supreme Court is expected to rule on challenges to the law by mid-2012.

Benjamin Domenech, managing editor of Health Care News and a research fellow at The Heartland Institute, is urging the state to wait.

“There’s so many things that have to come out from Washington in terms of regulations, in terms of controls, in terms of requirements put on the state. I think that it’s important for Indiana to essentially see that play out before they just go ahead with everything.”

Rep. Charlie Brown, D-Gary, favors the health-care reform law and wants to see it implemented so that more Hoosiers have coverage – but he’s concerned about meeting the required deadlines…

“It’s going to be very, very difficult to get there by 2013 – maybe impossible.”

As a legislator, Brown says he’d like to be involved in the process of developing an exchange – but he says so far that hasn’t happened.

Leigh DeNoon, Public News Service – IN

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Health insurance premiums climb faster in 2011

September 27, 2011

By Alina Selyukh

Tue Sep 27, 2011 1:20pm EDT

The cost of health insurance continues to climb for companies and workers, with annual family premiums this year growing at a pace triple that of 2010 and outpacing wage increases, according to a survey.

As the United States continues to grapple with a stubbornly weak economy, family premiums in employer-sponsored health plans jumped 9 percent this year and single premiums rose 8 percent, compared with 2010′s 3 percent and 5 percent, the Kaiser Family Foundation’s annual study, published Tuesday, found.

“We’re probably on a more modest side … but even with a 5 percent increase in a premium (that our workers saw) this year, they didn’t get a 5 percent raise,” said Jeff Franck, a compensation and benefits manager at Altru Health System, which employs about 3,700 people in North Dakota and Minnesota and participated in the survey.

Health insurance, unlike other industrialized countries, is largely provided by employers. Although the latest Census found more Americans losing company-sponsored insurance, almost 170 million Americans were on employer-based plans in 2010.

Kaiser and the Health Research Educational Trust surveyed 2,088 randomly selected public and private employers large and small earlier this year.

The survey found that, on average, employees are contributing 28 percent, or about $4,129, a year toward employer-sponsored family plans. That is 131 percent more than a decade ago.

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The Oracle Within MedPAC

Read how MedPAC can influence SGR policy in the hfm column “The Oracle within MedPAC” by HFMA Technical Director Chad Mulvany.

The Oracle Within MedPAC

Eye on Washington

Chad Mulvany

When the Medicare Payment Advisory Commission (MedPAC) recommends, Congress eventually listens.

MedPAC is the nonpartisan government research service that provides Congress with policy suggestions to ensure Medicare funds are well spent and the program’s beneficiaries have adequate access to care. Although Congress does not always immediately accept or implement MedPAC’s recommendations, the commission’s annual reports offer healthcare providers a look at future changes in payment policy that are bound to be on the table at some point.

This year’s reports—released in March and June—are no different. They include a number of proposals that could affect payment for inpatient, outpatient, and physician services, and the June report contemplates changes to the Medicare benefit structure. Providers should understand how these proposals will affect them and develop strategies to mitigate their impact.

Medicare severity-adjusted DRG (MS-DRG) documentation and coding adjustment. MedPAC believes that recent growth in the national average case mix index is not related to an increase in the severity of the illness burden of patients seeking care, but to hospitals responding to the economic incentives embedded in the MS-DRG system to improve documentation and coding. FFY12 is the last year that the Centers for Medicare & Medicaid Services (CMS) is legally compelled to recoup alleged overpayments related to services provided in FFY08 and FFY09. However, MedPAC firmly states that CMS should recoup additional overpayments related to 2010 and 2011, which would currently require an additional estimated 2.4 percent adjustment to future market-basket updates. This change would translate into an approximately $2.4 billion additional reduction in Medicare payments for these two years alone. The odds of Congress taking action on this proposal are high, given the need for savings to reduce the deficit and offset the budgetary impact of fixing the sustainable growth rate (SGR).

Services provided by physicians acquired by hospitals. Given the recent rise in hospital acquisition of physician practices and freestanding ambulatory service centers (ASCs), the March report also expresses concern about the payment disparity for similar services provided in different outpatient delivery sites. MedPAC believes that much of this activity is due, in part, to providers’ interest in taking advantage of the higher relative payment rates available through the outpatient prospective payment system (OPPS). It’s no secret that once a practice gains provider-based status, it receives significantly better payment than it would under the freestanding physician fee schedule and the ASC payment system. The report doesn’t advocate a specific policy solution, but MedPAC clearly sees an opportunity for significant potential savings in this area. We’ll likely see formal recommendations on this topic within the next 24 months. If the savings is significant enough, congressional action will likely follow shortly thereafter.

The SGR. The challenge in replacing the SGR is in finding the money and political will to do so. The American Medical Association and other groups have been calling for Congress to include a fix as part of any debt-ceiling deal, but at the time of publication of this column, it was unlikely that Congress would do so by the August deadline. First, to simply freeze physician payments at their current levels would require at least $300 billion, which Congress clearly doesn’t have. Second, there isn’t a practical solution available that all stakeholders would readily embrace.

The June MedPAC report presents a range of policy ideas the commission is considering for reforming the SGR. These include:

Overriding the current fee cuts and “establishing a few years of modest updates” to provide security and stability to providers
Improving accuracy of time-and-intensity estimates that form the basis of physician reimbursement
Shifting resources from procedural to cognitive services to encourage better evaluation, management, and coordination of care, particularly for those who have chronic conditions
Making future updates contingent on the CMS secretary identifying and reducing prices for the most overpriced (and overused) services, possibly using a budget-neutral approach to support primary care payments
Changing the payment incentives in the delivery system to reward population health management and care coordination

The last of these ideas is a longer-term goal that looks to use payment models such as bundling, medical homes, and accountable care organizations that minimize the incentive for providers to increase service volume.

Although funding for an SGR fix isn’t readily available, something will have to be done within the next three years. The growing uncertainty related to physician payment cuts has not yet impeded access, but MedPAC believes that it could do so. It is highly unlikely that all of the savings necessary to reform the SGR can be found within the Medicare program. Nonetheless, the report identifies opportunities to glean some of the savings from home healthcare providers, skilled nursing facilities, and inpatient rehabilitation facilities. Even though hospitals are not specifically mentioned, it’s likely that they’ll contribute to the SGR fix as well.

Ancillary services. The June report has a number of recommendations affecting ancillary services. Overall, it encourages the CMS secretary to expand efforts to package more discrete services into a larger bundle for payment. Regarding diagnostic imaging, in particular, MedPAC recommends that Congress apply multiple procedural discounting to the professional component for imaging services provided by the same practitioner and reduce the physician work component of imaging and other diagnostic tests ordered and performed by the same practitioner.

The recommendation with the greatest potential impact on hospitals encourages Congress to establish a prior authorization program for practitioners who order “substantially more” advanced imaging services than do their peers. Research has shown that physicians in the top decile of imaging ordering account for 50 percent of all studies ordered. Most of these physicians are self-referring, so the impact of this change on imaging volume at hospital-owned facilities would be only marginal. Nonetheless, the change would have a downstream impact on surgical services. Research has shown a positive correlation between availability of high-end diagnostic imaging and various elective surgeries. For example, a study published in Health Affairs in 2009 disclosed that the number of lower-back surgeries in a given area rises with the increasing number of magnetic resonance image devices (Baras, J., and Baker, L., “Magnetic Resonance Imaging and Low Back Pain Care for Medicare Patients,” Health Affairs, November/December 2009).

Value-based benefit design. The June MedPAC report reviews three options the commission is exploring to implement value-based benefit design.

The first option involves creating an integrated deductible structure that is capped to reduce beneficiaries’ exposure to catastrophic illness. However, the plan requires an increase in outpatient copayments to reduce the use of low-value, supply-sensitive services, thereby offsetting the lost revenue from the creation of a cap and generating savings for the program.

As a second option, MedPAC proposes prohibiting first-dollar Medigap coverage. According to MedPAC’s June report, it is estimated that making beneficiaries responsible for the first $550 of cost sharing and limiting Medigap coverage to 50 percent of the next $4,950 of Medicare cost sharing would lower federal spending by more than $5 billion annually.

The third option involves encouraging beneficiaries to use high-value, low-cost providers and/or reduce usage of high-cost, low-value services. This shift in usage could be achieved by providing financial incentives in the form of lower out-of-pocket payments for choosing more efficient healthcare providers or higher cost sharing for services that are deemed to have marginal value.

The first two options are already central to a number of deficit reduction plans currently under consideration. These approaches not only have the potential to reduce volume for elective procedures and services, but also would require hospitals to collect more payment from beneficiaries.

The third option is at least several years from being implemented. However, it has the most significant ramifications for providers, because Medicare fee-for-service beneficiaries would, for the first time, be actively steered to low-cost, high-quality facilities. It’s likely that when CMS identifies “high-value” providers, the agency will look not only at the individual costs for a hospital, but also at the program’s total spend on patients who have been attributed to the hospital using a metric similar to the efficiency metric proposed in the FFY12 inpatient PPS rule.

The net effect of all three options will push Medicare beneficiaries to behave more like traditional consumers, as they eventually are provided with a powerful economic incentive to get better value for their money.

Actions for Providers

Despite the inevitable vigorous lobbying by the various organizations that represent healthcare interests in Washington against these provisions, these recommendations are likely to be accepted in some form due to the need to generate savings from Medicare to reduce the federal deficit, replace the physician SGR, and increase payment for primary care. Providers should begin preparing now by taking several steps.

First, providers should prepare for reimbursement cuts and increased consumerism by looking for opportunities to reduce cost and improve efficiency by reengineering the way care is delivered. Second, hospitals and health systems should reevaluate their physician integration plans. In the short term, they should carefully consider the impact of more stringent provider-based rules. A hospital contemplating the acquisition of freestanding physician practices and other provider types needs to ensure that these entities firmly fit into the organization’s strategies for improving the value of the care it delivers. If the long-term economic justification for acquiring a practice is to obtain the payment benefits of converting a freestanding clinic into a provider-based hospital outpatient department, this strategy should be closely reevaluated to see if the acquisition still makes strategic sense in light of potential changes that could eliminate these benefits.

Longer term, as changes to the SGR reduce revenue for proceduralists and cause them to seek hospital employment, hospitals will need a well-formed view of which physician groups in the community are key to improving value. With such a perspective, they can then identify which physician groups are essential to executing the organization’s mission, and thus should be acquired, and which are not a good fit.

Finally, organizations will need to improve their self-pay revenue cycle operations, particularly around point-of-service collections. As the Medicare benefit design is changed to increase cost sharing at lower dollar levels and first-dollar Medigap coverage is removed, hospitals will be forced to collect more from Medicare beneficiaries. It is essential that hospitals be able to do so efficiently and with sensitivity to patients’ needs, feelings, and expectations.

Chad Mulvany is a technical director in HFMA’s Washington, D.C., office, and a member of HFMA’s Virginia Chapter.

Publication Date: Monday, August 01, 2011

http://www.hfma.org/Templates/InteriorMaster.aspx?id=28172

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MedPAC Votes to Recommend SGR Repeal

The Medicare Payment Advisory Commission (MedPAC) will recommend to Congress later this month a plan to repeal the sustainable growth rate (SGR) formula that establishes physician pay under Medicare and replace it with one that keeps rates steady for primary care physicians over the next decade and cuts payments to specialists.

MedPAC, which voted on the plan this week, estimated the cost at $200 billion, and suggested several methods to pay for the SGR repeal: $75 billion in savings from the drug industry, $46 billion from post-acute care services, $33 billion from beneficiaries, and $24 billion from hospitals, MedPage reports. The rest of the savings would come from laboratories, the Medicare Advantage program, and durable medical equipment costs.

If Congress does not act on the MedPAC plan or come up with an alternative before Jan. 1, a 30 percent across-the-board cut in Medicare payments mandated by the SGR will go into effect, reports MedPage.

Several physician associations, including the American College of Physicians and the American Medical Association, criticized the MedPAC proposal.

“We cannot support this plan in its present form because it retains many of the SGR’s flaws, undermines physicians’ ability to participate in payment and delivery reforms and calls for payment rates that the Commission itself has previously said could reduce Medicare beneficiaries’ access to medical care,” the groups said in a letter to MedPAC.

Posted on 10/14/2011 8:54:10 AM

http://www.hfma.org/templates/blogpost.aspx?id=29304

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Fed Dollars for NY Hospitals Occasionally Go to Wrong Hospitals: Study

Sunday, September 25, 2011 – 12:00 AM

By Fred Mogul

New York’s hospitals gets hundreds of millions of dollars from the federal government to pay for health care for the uninsured and under-insured — but a new study that suggests much of that money doesn’t go to the right hospitals, with the most non-paying customers.

The $395 million in so-called “Charity Care” New York gets from Washington, D.C., helps off-set deep financial losses hospitals suffer when they provide medical services for which they otherwise wouldn’t get paid.

But professor Alan Sager, from Boston University’s School of Public Health, said a complicated state formula directs a large share of that money to hospitals that don’t provide all that much free service to the uninsured.

“If one hospital provides four times as much charity care as another hospital, it may need more than four times as much money, because if a hospital provides just a little charity care, it may not need to hire additional nurses and doctors and other care-givers,” said Sager, who did the study for the Commission for the Public’s Health Service, or CPHS, a watchdog group.

He said a more just and effective way to distribute money from the Hospital Charity Care Pool would be to make the formula more closely follow individual patients.

The Greater New York Hospital Association, or GNYHA, said the current formula works better than what Sager proposes because it offers a greater allowance for under-insured patients — people who have insurance, but also have high out-of-pocket expenses they can’t pay – in addition to the uninsured.

“In light of the growing high-deductible plans and consumer-directed plans that tend to shift the cost of care to the consumers, many individuals cannot afford to pay their co-pays and deductibles,” said Elisabeth Wynn, a GNYHA official. “So, we think from a policy perspective that the [Charity Care] Pool recognizes that — especially for low-income individuals.”

But Judy Wessler, from CPHS, said that approach doesn’t take into account the changing reality in Washington: the Affordable Care Act focuses on the uninsured, not the under-insured.

If New York doesn’t alter its current formula, she said, it could risk losing a crucial stream of money for struggling hospitals.

http://www.wnyc.org/blogs/wnyc-news-blog/2011/sep/25/watchdog-federal-dollars-sometimes-go-wrong-hospitals/

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Arizona Court of Appeals to Consider Appeal of Reductions in State Medicaid Program

Written by Bob Herman | September 15, 2011

The Arizona Court of Appeals will consider the appeal of a judge’s ruling that the state can legally shrink the enrollment in the Arizona Health Care Cost Containment System, the state’s Medicaid program, to balance its budget, according to an Associated Press/Washington Post report.

Arizona recently placed new enrollment caps for people, such as childless adults, enrolling in the AHCCCS for the first time or for people re-enrolling in the program.

According to the report, public interest law firms said the limits violated state constitutional protections for voter-approved laws. In 2000, a ballot measure that increased eligibility for the Medicaid program was passed.

However, last month a trial judge said the state does not have an “enforceable duty” to fund the ballot measure that passed.

http://www.beckershospitalreview.com/racs-/-icd-9-/-icd-10/arizona-court-of-appeals-to-consider-appeal-of-reductions-in-state-medicaid-program.html

Be sure to check the related follow-on articles:

Federal Appeals Court Strikes Down Arizona Medicaid Co-Payments Judge Rules Arizona Can Move Forward With Medicaid Cuts Arizona Healthcare Providers Propose Self-Imposed Fees in Place of State’s Plan for Medicaid Cuts

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How crucial will medical billers role be after healthcare reforms?

How crucial will medical billers role be after healthcare reforms?

Article Summary: Proactively realizing the need for preparing to face up to these challenges, many professional medical billing companies have taken up upgrading their system and human capabilities to the probable demands emanating from healthcare reforms.

A string of healthcare reforms announced by the Federal Government over a year or so have changed the landscape of the healthcare industry nationally. The expected extension of insurance coverage for more than 30 million people, removing pre-existing condition clause, and an incentive based healthcare regime are going to influence and alter the equation for all the stakeholders concerned, more so the medical billing management companies/professionals. While the extensive coverage of health insurance should open avenues for more business and revenues, the ensuing stringent billing regimen – the mandatory EMR System Implementation, ICD-10and HIPAA 5010 compliant coding and reporting norms, and highly rigid insurance carriers – is going to test Medical Billers’ ability to adapt to the changing landscape. Never before has the role of medical billers been more debatable than now.

As the healthcare reforms take effect, Medical Billers will be called upon to redefine their role in as far as:

o Ensuring compliant EMR Systems for physicians: As a seamless EMR System is the foundation for apt medical coding, medical billers will be called upon to advice their clients’ on the efficacy of implementing EMR System as part of their effective and efficient medical billing management.

o Upgrading their competence to ICD-10 and HIPAA 5010: As the new coding and reporting regimen takes over shortly, medical billers – to avoid being outdated and obsolete – need to make a successful transition to the ensuing ICD-10 and HIPAA 5010 requirement.

o Helping physicians on public and private insurance composition: With the healthcare reforms deciding to minimize reimbursement on Medicaid and Medicare policies, physicians/hospitals are rethinking on what should be the composition of public and private insurance holders in their patient population. Consequently, medical billers’ role assumes greater significance in recommending a judicious mix of public and private health insurance holders in their clients’ patient population.

o Establishing a mutually respectable relationship with insurance carriers: Forging a cordial relationship can go a long way in ensuring fast, and delay free reimbursement of physcian’s medical bills; medical billers would do well to build a rapport with heterogeneous insurance carriers.

o Educating physicians about internal preparation for medical billing: Apart from ensuring a compliant system of billing, submission, and realization, medical billers will also be called upon to educate physicians about the efficacy of upgrading internal system of data recording and filing for complimenting comprehensive needs of medical billing management.

o Approaching Medical Billing as a wholesome exercise: Above all, medical billers will be asked to view physician’s medical billing from a complete revenue cycle management perspective rather than one-off billing exercises. Such a comprehensive approach improves the probability of positive outcomes immensely.

Proactively realizing the need for preparing to face up to these challenges, many professional medical billing companies have taken up upgrading their system and human capabilities to meet the probable demands emanating from healthcare reforms. Likewise, Medicalbillersandcoders known for its proven medical billing solutions to a majority of physicians, hospitals, clinics, and multispecialty groups across the whole of U.S – has taken up advancing their system and human capability on a massive scale. With their vast hands-on experience on innumerable projects, and updated knowledge of healthcare regulations and IT, our MBC billers and coders bring a plethora of value-added services to enhance your processes and RCM.

For more information you can visit: Long Beach Medical Billing | Ontario Medical Billing

http://www.upublish.info/Article/How-crucial-will-medical-billers-role-be-after-healthcare-reforms-/644266

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Supreme Court Hears Arguments Over Medicaid Beneficiaries, Providers Right to Sue States Over Reimbursement Cuts

Written by Lindsey Dunn | October 03, 2011 The Supreme Court will kick off its 2011-2012 term today by hearing oral arguments in Douglas v. Independent Living Center of Southern California, et al., a case that will determine whether or not Medicaid beneficiaries and providers are able to sue states that make cuts to their Medicaid programs.The case, which consolidates three separate but similar cases, stems from cuts in Medi-Cal payments to providers enacted by the state legislature in 2008 and 2009, according to a California Healthline report. Following the cuts, several providers sued the director of the state’s Department of Health Care Services arguing the cuts violated federal law requiring that state Medicaid reimbursement rates must be at a level that ensures access to Medicaid beneficiaries.In April 2010, a federal appeal court in San Francisco ruled in favor of the providers, deeming states cannot cut payments simply to reduce costs to the state associated with running the program. The state petitioned the Supreme Court, which agreed to rule only the private right of action argument in the case. The high court will determine whether private parties have a right to sue states over Medicaid reimbursement rates through invoking the U.S. Constitution’s “supremacy clause,” which gives federal law supremacy over state law.

The outcome of the case has major implications for providers, many of whom believe that a ruling against private right of action would prohibit them from having any recourse for too-low payment rates.

The White House supports California in the suit, saying private parties don’t have the right to sue of reimbursement rates. However, several prominent democratic leaders, House Minority Leader Nancy Pelsoi (D-Calif.) have filed a brief contending that it is Congress’ intent to have the justice system determine if private actions against Medicaid rates are appropriate, according to a report by The Hill.

http://www.beckershospitalreview.com/racs-/-icd-9-/-icd-10/supreme-court-hears-arguments-over-medicaid-beneficiaries-providers-right-to-sue-states-over-reimbursement-cuts.html

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Illinois Hospitals Owed Millions as State Struggles to Pay Bills

Illinois Hospitals Owed Millions as State Struggles to Pay Bills Written by Bob Herman | October 21, 2011

Several hospitals throughout Illinois are owed millions of dollars in unpaid reimbursements from the state, according to a Peoria Journal Star report.

Illinois owes a total of $5 billion for all debt expenses, healthcare included. Hospitals that have experienced late payments from the state include the following:

• OSF Saint Francis Medical Center in Peoria, Ill., was owed $12.3 million as of Sept. 8, most of which is for inpatient care. CEO Ken Harbaugh estimates the hospital is losing out on closer to $28 million after factoring in Illinois’ recent cut in Medicaid reimbursements, according to the report. • Methodist Medical Center in Peoria, Ill., was owed $2.3 million as of Sept. 8. CFO Robert Quin estimates the total to be closer to $16.5 million now. • Galesburg (Ill.) Cottage Hospital, a subsidiary of Brentwood, Tenn.-based Community Health Systems, was owed $1.1 million as of Sept. 8.

http://www.beckershospitalreview.com/racs-/-icd-9-/-icd-10/illinois-hospitals-owed-millions-as-state-struggles-to-pay-bills.html

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Illinois Gov. Pat Quinn Holds State Decisions on Hospital Tax-Exemptions

This news shows the need for hospitals to quickly and accurately assess charity care and to assist patients in anyway possible to gather or obtain the needed documentation and effectively capture charity care. Please take the time to review R&B Solutions’ software solution, RAMP, to see how we have developed a web-based software that automates the process for the patient.

Illinois Gov. Pat Quinn Holds State Decisions on Hospital Tax-Exemptions

Written by Jaimie Oh | September 23, 2011

Illinois Gov. Pat Quinn has agreed to halt further state investigations into hospitals’ tax-exempt statuses until legislative recommendations are made regarding charity care, according to a Chicago Tribune report.

Earlier this month, the Illinois Department of Revenue announced it would re-examine 15 health systems’ tax-exempt statuses based on how much charity care they provide to the community. The announcement came shortly after the department denied property tax-exempt status to Northwestern Memorial’s Prentice Women’s Hospital in Chicago, Edward Hospital in Naperville and Decatur (Ill.) Memorial Hospital.

The Illinois Hospital Association since wrote a letter to Gov. Quinn asking him to withdraw the tax-exemption denials to the three hospitals and stop any further inquiries into health systems until a legislative compromise was made. Gov. Quinn agreed to stop further action, but the three hospitals will still need to appeal their tax-exemption denials.

The legislative recommendations on charity care will be released March 1.

The state’s crackdown on non-profit hospitals stems from an Illinois Supreme Court ruling last year that deemed Provena Covenant Medical Center in Urbana, Ill., could not quality for tax-exempt status because it did not provide sufficient free or discounted care for the poor, according to the report.

http://www.beckershospitalreview.com/racs-/-icd-9-/-icd-10/illinois-gov-pat-quinn-holds-state-decisions-on-hospital-tax-exemptions.html

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