Groups Weigh in on NCQA's Proposed ACO Standards

The Patient Protection and Affordable Care Act requires the creation of accountable care organizations (ACOs), which are defined as "an integrated group of providers that will be held accountable for the overall cost and quality of care for a defined set of patients. Under the law, ACOs that participate in the Medicare program would continue to be reimbursed under the fee-for-service system, but they would be eligible to share in any savings below benchmark cost levels, as long as they also meet quality performance standards."

NCQA released draft standards for ACOs. Various organizations such as the Federation of American Hospitals, American Medical Group Association, and the Campaign for Better Care commented on the standards, stating that until the government establishes rules for ACOs, any draft standards are prematurely developed. The groups also urged NCQA to draft standards that are focused on quality outcomes, rather than on how an ACO should be structured.

NCQA's draft standards can be found here:
http://www.ncqa.org/tabid/1266/Default.aspx

AMGA's comments can be found here:
http://www.amga.org/Advocacy/Resources/ncqaCommentLetter.pdf

FAH's comments can be found here:
http://www.fah.org/fahCMS/Documents/On%20The%20Record/Public%20Comments/2010/NCQA_Letter_re_2011_Criteria_for_ACOs_-_final.pdf



Source: BNA

CMS Final Rule Cuts Physician Payments 24.9% in 2011

The Centers for Medicare and Medicaid Services (CMS) has released a final rule that will cut Medicare payments to physicians by 24.9 percent in 2011. CMS states that the reason for the cut is to provide a permanent fix for the sustainable growth rate and Medicare payment formula.

The rule also attempts to curb physician self-referral for services that may be obtained elsewhere in the area and implements rules on the expansion of preventative services, which went into effect as part of the Affordable Care Act.

The physician pay cut is effective January 1, 2011.


Source: Healthcare Finance News
http://www.healthcarefinancenews.com/news/cms-final-rule-cut-2011-medicare-pay-physicians

Employers Can Retroactively Amend FSA Reimbursement Policies for OTC Medicines

Under the Patient Protection and Affordable Care Act, all prescriptions submitted for reimbursement through a health flexible spending account (FSA) will now have to be prescribed by a physician, even if the treatment is available over-the-counter.

Employers have until June 30, 2011 to amend their plans to reflect this change. However, the IRS says that employers will be allowed to apply this change retroactively back to January 1, 2011. That means that even if the policy is not in place by January 1, 2011, employers may still deny reimbursements for over-the-counter purchases made after that date. Purchases made before January 1 may still be eligible for reimbursement.

As the provisions of health reform kick in, this serves as a reminder to all MSPs to keep up with the latest news from your employer on how your medical benefits may change.


Source: BNA

State Insurance Commissioners Vote to Approve More Stringent Rules

The National Association of Insurance Commissioners voted unanimously to endorse standards requiring that "80 percent of premium revenue be spent on medical care and 'activities that improve health care quality' for patients." This requirement was set in place by health reform legislation.

The standards set limits on what revenue spending is defined as improvements to health care quality, and what is considered to be compensation or administrative spending. The goal of the standards is to make insurance companies function more as providers of healthcare and less as for-profit companies.

Secretary of Health and Human Services Kathleen Sebelius is expected to take the recommended standards and propose them as a new regulation for insurance companies. Opponents of the recommendations argue that they will negatively disrupt the insurance industry by forcing companies out of business and reducing consumer choice.


Source: The New York Times
http://www.nytimes.com/2010/10/22/health/policy/22insure.html?_r=4&emc=tnt&tntemail0=y

Six Major Health Reform Provisions Effective Today

Today, six of the major provisions of the Affordable Care Act go into effect. They are:

• Extended coverage for young adults under their parents' plan
• Plans must offer free preventative care services
• Insurance companies are prohibited from rescinding coverage if a person becomes sick
• The ability for Americans to select between two appeal processes when challenging an insurance decision
• Elimination of lifetime caps on coverage
• Regulation of insurers' ability to set dollar limits on coverage

To read more details about these provisions, click here:
http://www.healthcare.gov/news/factsheets/overview.html

Curious about when the other provisions of the Affordable Care Act will go into effect? Click here to see a full timeline of changes that will occur:
http://www.emblemhealthreform.com/pub/ersm/tl/2010/?o=0

Sources: healthreform.gov, EmblemHealth

Patient Protection and Affordable Care Act - How It Will be Funded

The big question on many people’s minds is where will the money come from to fund the deficit reduction and the Patient Protection and Affordable Care Act (PPACA). The Congressional Budget Office (CBO) estimates that the PPACA will cost $940 billion over the next 10 years. Even with the high cost of the PPACA, the CBO approximates that there will be a $143 billion reduction in the federal deficit over the next 10 years (2010-2019) and a $1.2 trillion reduction in the federal deficit in the 10 years following (2020-2029).

The PPACA and deficit reduction will be funded through new taxes, fees, and penalties on individuals, businesses, and the health care industry. This alert will touch upon the biggest changes individuals, businesses, and the health care industry will experience in the next few years.

Individual tax payers will contribute to the PPACA funding through an additional Medicare tax imposed on wages and investment income, penalties for failure to maintain health care coverage, a higher threshold for itemized medical expense deductions, a tax on indoor tanning, and an additional tax on distributions from health and medical savings accounts.

The health care industry will be a large source of the PPACA’s funding through fees on health insurance providers and pharmaceutical manufacturers and importers, excise taxes on medical devices and high cost employer sponsored health coverage, and a limitation on remuneration paid by health insurance providers.

Beginning this year, the deduction for employee remuneration paid by health insurance providers will be limited. The amount health insurance providers will be able deduct in applicable employee remuneration will decrease from $1 million to $500,000. The limit will apply to all officers, employees, directors, and other workers or services providers performing services for or on behalf of a health insurance provider.

Non-health care industry businesses will also face changes and penalties as part of the PPACA funding. Effective in 2010, the PPACA eliminated the cellulosic biofuel producer credit. Paper companies will now be barred from claiming $1.01 per gallon cellulosic biofuel producer credit for black liquor, a by-product of paper making. This change is estimated to raise $23.6 billion over the next ten years.

Hoffman, Larkin, Bruce Douglas and Kelly Burke. "Patient Protection and Affordable Care Act - How It Will be Funded." Lexology. 13 July 2010. Web. 27 July 2010.

Health System Reform: Small Businesses Will Pay Fines Rather Than Buy Health Insurance

From BNA's Health Care Daily:

Small business owners speaking at a Chamber of Commerce forum July 26 said they will pay fines imposed under the new health reform law rather than purchase health care coverage for their employees.

In addition, Chamber of Commerce Senior Vice President Randel Johnson said that the business organization is looking at legal options for challenging the Patient Protection and Affordable Care Act (PPACA, Pub. L. No. 111-148).

“We're going to have to live with it for awhile, and we're going to have to deal with it,” Johnson said. He and small business owners spoke at a forum in Washington, Behind the Curtain: the Health Care Law's Impact on Small Business, sponsored by the chamber, the National Federation of Independent Business, and the American Action Network. The Chamber of Commerce strongly opposed the new law.

“We'll absolutely be paying the penalty,” said Scott Womack, president of Womack Restaurants in Terra Haute, Ind. “There's no way we can buy the health insurance,” Womack said. Under PPACA employers with at least 50 employees must offer coverage to workers beginning in 2014 or pay penalties, which are not tax-deductible, of $2,000 per employee.

The cost of paying the penalty will total about $2,800 per employee because it is not tax-deductible, Womack said. But average profits per employee for the restaurant industry are only about $2,600, he said. “We've got a big problem in our industry,” he said. Raising prices is difficult in the current economy, he said.

Womack estimates it would cost his company about $8,000 per employee to cover the 360 full-time employees who would have to be covered under PPACA. Womack expects to reduce his payroll by 15 percent to 20 percent in response to the new law.

Sen. Mike Johanns (R-Neb.) was critical of the health care bill, which he said will increase taxes by $4.5 billion and will hit small businesses particularly hard. He called for passage of legislation he and other Republicans have introduced that would repeal a provision in PPACA requiring businesses, beginning in 2012, to file 1099 tax forms for all services totaling more than $600 per year from each vendor. The requirement will be overly burdensome for businesses, especially small businesses, he said.

“This mandate has absolutely nothing to do with improving the health care of any individual in this country and it should not be a part of this law or any other law,” Johanns said. “This administration bridles at the notion that they're anti-business. But I have to tell you, I haven't been around a more anti-business adminstration in my entire career,” Johanns said.

The "big picture" impact of Health Care Reform should be noted as it will inherently affect all medical personnel, including MSPs.

Hansard, Sara. "Small Businesses will Pay Fines Rather than Health Insurance." BNA's Health Care Daily Report. 27 July 2010. Web. 27 July 2010.

Study Highlights Shortage of Primary Care Physicians

A George Washington University study shows that medical schools are continuing to produce more graduates going into research and specialty professions and not enough primary care doctors. The study also found that graduates of public medical schools were more likely to promote a "social mission," encouraging graduates to go into primary care, especially in underserved communities. More prestigious schools were

Many analysts believe that the continued shortage of graduates entering the primary care field is due to the low reimbursement rate. After graduating with massive debt, graduates are hesitant to select a field that pays an average of $124,000 a year, the lowest rate among physician specialties.

The new health reform law sets aside $1.5 billion in funding for primary care physicians who work in underserved areas. Some hospitals are also working to attract physicians into primary care, fearing that without first-line care, patients will flood their emergency rooms with minor and preventable conditions. This study and others that have been released, continue to serve as indicators that improvments to the delivery of care are needed to support an increased patient population.


The full George Washington study can be found here:
http://www.annals.org/content/152/12/804.full?aimhp


Source: The Baltimore Sun
http://www.baltimoresun.com/health/bs-hs-primary-care-study-20100615,0,6289224.story

Physician Specialties Generating Hospital Revenue

Modern Physician reports that the 2010 Merrit Hawkins Physician Inpatient/Outpatient Revenue Survey reported that the 17 physician specialties experienced a 3% increase in average annual net revenue generated since 2007. In 2010, the specialties reported an average annual net revenue of $1.54 million for their hospitals.

The article emphasizes that although the specialties may be revenue generating, hospitals must remember that health reform incentives will be based on the availability of access to primary care and preventative services. The survey results, which reported a drop in primary-care revenue, may look completely different in a few years once the health reform provisions are implemented.

To read the full article, click here (free subscription required): http://www.modernhealthcare.com/apps/pbcs.dll/article?AID=/20100510/MODERNPHYSICIAN/305109954/-1


Source: Modernphysician.com

President Obama Signs Health Reform into Law

Yesterday, President Obama signed HR 3590, "The Patient Protection and Affordable Care Act" into law. The Senate-created bill was passed by the House late Sunday night by a vote of 219 to 212. 37 Democrats joined all 178 Republicans in opposing the healthcare overhaul plan.

Although Congress has essentially completed health reform, there is still one more vote that can affect the final package. The Senate will vote on HR 4872, the House's reconciliation bill this week, which proposes amendments to HR 3590 to include some of the provisions that were included in the House's original proposal, but eliminated in the Senate bill that passed in the House on Sunday.

NAMSS has provided a summary of the major provisions included in the final health reform plan. Most of the changes affect changes to the payment system and do not have a direct impact on the daily work of MSPs. However, now that health reform has passed in Congress, there is still much work to be done by the federal agencies in order to put the rules and regulations of health reform into place. The quality-focused and workforce planning initiatives assigned to the Secretary of Health and Human Services could have an impact on the work of MSPs.

To read the summary, click here:
http://www.namss.org/Portals/0/Health%20Reform%20Summary.pdf

IL Supreme Court Overturns Landmark Medical Malpractice Reform

On February 5, the Illinois Supreme Court overturned the state's medical malpractice law, which set limits of $500,000 in non-economic damages against doctors and $1 million against hospitals.

The court ruled that the law was unconstitutional because the determination of damage awards should be left to the courts, not the legislature.

The ruling reflects the current debate in Washington, where medical malpractice caps have been considered as part of the health reform debate.

An article on the court's ruling can be found here:
http://www.nytimes.com/2010/02/05/us/05malpractice.html.

The court's decision can be found here:
http://www.state.il.us/court/Opinions/SupremeCourt/2010/February/105741.pdf.


Sources: New York Times, Illinois Supreme Court

Senate Democrats Propose $848 Billion Health Bill

Senate Majority Leader Harry Reid (D-NV) unveiled a healthcare proposal yesterday that would cover 94 percent of all Americans and cost $848 billion over 10 years. Estimates from the Congressional Budget Office predict that the bill will cut the federal deficit by $127 billion in its first year, and $650 billion over the next decade.

While the bill has wide Democratic support in the Senate, Republicans are hesitant to believe that the bill will be budget-neutral. The plan will be paid for by Medicare cuts and increased taxes, such as a tax on high-premium "Cadillac plans."

Some provisions of the bill include:

• A public health care plan, with an option to the states to opt out of the system if they want to;
• Employers under the House bill (except some small businesses) would be mandated to provide coverage to their employees; under the Senate bill, employers who do not offer coverage will only be fined $750 per employee;
• Individuals (except illegal immigrants) who do not have access to affordable coverage through their employers would be able to purchase it from a multi-state exchange;
• 5 percent excise tax on elective cosmetic surgery; and
• A firewall segregating private insurance funds used to cover abortion from public funds; the HHS Secretary will be given discretion to determine whether or not public funding will be available for abortions.

The Senate is expected to hold a vote this Saturday to introduce the bill for debate.

Question of the Week: Health Reform

The House passed its bill over the weekend, and the Senate is expected to start debate on the issue on November 16.

There are several issues that are expected to cause controversy, including the inclusion of a public-run health plan, and whether those who receive federal subsidies to purchase health coverage should be allowed to select plans that cover selective abortion.

This week's question is, what do you think is the most difficult issue for our lawmakers to tackle as they debate our nation's healthcare system? Vote in the poll on the right of the NAMSS Blog page and let us know your thoughts in the comment field below.

House Passes Health Reform Bill

After a late Saturday session, the House passed H.R. 3962, the Affordable Health Care for America Act.

The bill includes a public-run health plan, which is expected to cause controversy in the Senate.

Below are a few highlights of the bill:

• Estimated cost: $1.05 trillion
• Includes a government-run health plan option that will compete with private insurers in a health care exchange
• Prohibits insurance companies from denying coverage or increasing premiums based on pre-existing conditions
• Provides subsidies to individuals and families receiving income at up to 400% of the poverty level
• Provides tax credits to some small businesses that provide coverage to their employees
• Prohibits lifetime caps on insurance coverage
• Expands Medicaid eligibility
• Prohibits the use of federal funds for abortions, except in the cases of rape, incest, or danger to the mother's life

Senate Finance Committee Passes Health Reform Bill

This afternoon, the Senate Finance Committee voted 14-9 in support of the Committee's health reform overhaul bill.

Sen. Olympia Snowe (R-ME) was the lone Republican to support the bill. She stated that she did not completely support the bill, but felt that urgent action needed to be taken to improve healthcare.

"When history calls, history calls, and I happen to think that the consequences of inaction dictate the urgency of Congress to take every opportunity to demonstrate its capacity to solve the monumental issue of our time," said Snowe in a quote to CQ.

The Senate Finance Committee's bill expands Medicare and creates healthcare insurance marketplaces to provide Americans with greater options for coverage. It does not include the creation of a public plan. The Congressional Budget Office estimates that the plan will cost $829 billion over the next ten years.

The Senate Finance Committee's bill must now be reconciled with the Senate Health, Education, Labor, and Pensions (HELP) Committee's bill before it a proposal is sent to the full Senate for a vote. The Senate Finance bill is considered the more moderate of the two plans.


Source: CQ

Are Hospitals Ready for Expanded Coverage?

The answer is "yes," according to Dr. William Jessee, President and CEO of the Medical Group Management Association (MGMA). In an article in Modern Physician, Dr. Jessee supports the initiative to expand healthcare coverage but wonders whether or not the current payment structure and medical workforce is ready to take on the greater patient load.

Dr. Jessee recognizes that work needs to be done in order to provide high-quality, safe care for what will become an increased patient population. However, he believes that facilities will be able to figure out ways to eliminate administrative waste and increase efficiencies in their own settings.

Dr. Jessee's message is a call to all of us to act now and be a part of healthcare reform. Prepare your facility now by exploring more efficient ways to perform the work that you are currently doing. Determine if your facility has a plan to ensure that it has the workforce to handle greater patient intake.


Source: Modern Physician
(Free subscription required to view article)
http://www.modernhealthcare.com/apps/pbcs.dll/article?Date=20091012&Category=MODERNPHYSICIAN&ArtNo=310129976&SectionCat=&Template=printpicart_mp

Public Plan Cut from Senate Finance Bill; House Vote Expected in November

On Tuesday, the Senate Finance Committee voted to eliminate the public health plan from the health reform bill. Committee Chairman Max Baucus (D-MT) and 4 Democrats joined the Committee's 10 Republicans in striking the plan from the bill.

Chairman Baucus acknowledged that a public option would pressure private insurance companies into offering high-quality, affordable coverage. However, he recognized that a bill with a government plan may not garner enough final votes to pass in the Senate. Instead of a public option, the Senate Finance Committee bill includes the creation of non-profit co-operatives which would compete with private insurers.

The Senate Health, Education, Labor, and Pensions (HELP) Committee's bill still includes the public option. Both Committees' proposals must be reconciled into a single bill before a full Senate vote.

Meanwhile in the House, Majority Leader Steny Hoyer (D-MD) said that he expects a bill to be completed for review in October. However, both he and Speaker Nancy Pelosi (D-CA) have agreed not to rush the bill to the floor for a vote, implying that a full House vote may not take place until November.



Sources: CQ, CongressDaily

Senate Finance Committee Chairman Introduces Health Reform Bill

Senate Finance Committee Chairman Max Baucus (D-MT) has introduced the America's Healthy Future Act of 2009. It is scheduled for a full Committee markup on September 22, where Democrats hope to obtain more Republican support.

The bill offers initiatives that will help all Americans meet the requirement of having health coverage, such as the expansion of Medicaid and the creation of state co-operatives to provide consumers with options outside of private insurers. Employers would not be required to provide coverage to workers; however, employers who have 50 or more workers and do not offer coverage by 2013 will have to reimburse the government for every full-time worker receiving tax benefits through the government's health care exchange system.

The $856 billion to fund coverage will be obtained through initiatives such as reductions in Medicare and Medicaid spending; taxes on insurers offering high-cost, high-premium health plans; and fees on providers such as device manufacturers.

The bill overs various changes to the Medicare and Medicaid systems that are intended to increase efficiency, lower costs, and maintain a level of quality and care.

Health Care Quality Improvements

The bill directs the Secretary of Health and Human Services (HHS) to create a national strategic plan for improving the quality of care. The strategy will focus on goals such as reducing medical errors, maintaining hospital infection-control, addressing preventable hospital admissions, and an overall look at increasing efficiency and quality in the healthcare system.

In order to prioritize these strategies, the Secretary of HHS will seek the input of various stakeholders in the healthcare system including representatives of hospitals, physicians, credentialing and accrediting bodies, allied health professions, health plans, and other industries.


A copy of the Chairman's mark-up can be found here:
http://finance.senate.gov/sitepages/leg/LEG%202009/091609%20Americas_Healthy_Future_Act.pdf.


Source: BNA

Nonprofit Hospital Executive Shares Health Reform Worries

Charles J. Barnett, chief executive of the Seton Family of Hospitals, a nonprofit hospital group in Texas, shared his concerns about challenges hospitals may face after the health care overhaul takes place.

Barnett believes that providing coverage to the uninsured is only the first step to reform; however, he worries about access being compromised if the physician shortage continues and if the new policies create reduced revenue for hospitals.

Barnett isn't the only one worrying. Hospital executives nationwide have been wary of reform proposals offered by the Obama administration and Congress, fearing that unintended effects of the change will actually hinder, rather than help hospitals provide care to their communities.

For the full article, click here:
http://www.washingtonpost.com/wp-dyn/content/article/2009/08/28/AR2009082801876_2.html?hpid=topnews.


Source: The Washington Post

HASC Estimates $500 Billion Savings by Reducing Administrative Costs

In its latest report, the Healthcare Administrative Simplification Coalition (HASC) estimates that the US can save up to $500 billion over ten years by reducing administrative costs by just 10 percent.

The report, titled "Bringing Better Value: Recommendations to Address the Costs and Causes of Administrative Complexity in the Nation's Healthcare System," offers four suggested areas of improvement:

• Implementation of a universal credentialing form for payers, hospitals, and other institutions;
• Using electronic patient data to help speed up determinations on insurance coverage eligibility;
• Standardization of patient ID cards;
• And standardization of the prior authorization process for radiology and pharmacy services.

The report makes many references to cost savings for clerical work; however, MSPs know that the major focus of our work is at a higher level. Clerical work is one of those necessary-but-not-valued responsibilities.

As the experts of the credentialing process, there is a great opportunity for us to share our best practices and be a part of healthcare reform.

To read the full report, click here:

http://www.simplifyhealthcare.org/repository/Documents/HASC-Report-20090717.pdf.

Source: HASC