WEEKLY E-BULLETIN


Feb. 6, 2012


ACOs:  The End of Health Insurance Companies?

Debate heated up last week about Accountable Care Organizations (ACOs) are the beginning of the end for health insurance companies.  Two former health care advisors to the Obama Administration made the bold prediction in the New York Times (click here.) It was followed up by a story in the Washington Post (click here) that threw warm, not cold, water on the idea.

GAO Targets What Hospitals Pay for Implantable Devices

Congress is now beginning to examine what hospitals pay for implantable medical devices because of a new report out last week from the GAO. In a review of prices, for example, the difference between the lowest and highest price hospitals reported paying for a particular automated implantable cardioverter defibrillator (AICD) model was $6,844. The difference between the highest and lowest price reported for another AICD model was $8,723. The price differences for the remaining two AICD models in our study fell in between $6,844 and $8,723. Click here to read the 37-page GAO report.

Device Industry, FDA Agree to Major Fee Increase

Meanwhile, the medical device industry has agreed to more than double the fees the industry pays the FDA to review new medical devices, according to a deal announced last week by the FDA. The medical-device industry will pay $595 million in user fees over five years under the agreement. The last fee agreement between the industry and the agency in 2007 collected $287 million in fees. Click here for the Washington Post story.

Congressional Effort Underway to Gather Support for Permanent SGR Fix

If you’re looking for a way to support the congressional effort to use the war savings to pay for the physician Medicare payment formula fix, urge your House member to support a letter that started circulating last week. U.S. Reps. Dan Crowley (D-NY) and Dan Benishek (R-MI) are circulating a “Dear Colleague” letter urging other Representatives to push for a permanent payment fix. (Click here to read the letter.) GAO says a permanent fix costs about $317 billion.  Those supporting using war savings say there are enough funds to cover the cost; those opposing the use of the funds say it is just a gimmick. The current payment fix expires February 29.

CMS Hospital Referral Requirement Raising Concerns

A hospital transmittal notice issued by CMS late last year is now causing a stir because it requires hospital privileges to refer a patient for outpatient rehab services. CMS revised the hospital COP in 2010 and issued Transmittal 72 in November 2011 describing in detail how this change should be implemented. The Transmittal tells hospitals that the physicians referring patients for outpatient rehabilitation services must have hospital privileges.  About 20-30 percent of referrals come from community physicians without hospital privileges. The rule affects Medicare AND non-Medicare patients, posing a potential compliance problem for hospitals. CMS is apparently aware of the disconnect between the plain language of the COP and the interpretive guidelines. We understand the agency is considering changes that could rescind or revise the directions. Click here to see Transmittal 72.


Medicare Advantage Premiums Fall; Enrollment Up

Medicare Advantage premiums fell 7 percent on average and enrollment in these managed care plans has gone up about 10 percent over the past year, HHS announced last week. This is the second time in two months that HHS has publicly recognized the decrease in premiums and increase enrollment for these plans. The enrollment numbers confirm projections from last September that enrollment in MA plans would continue to rise and average premiums would continue to fall, HHS officials said in a statement. Click here for the details.  Average monthly premiums have gone from $33.97 in 2011, to $31.54 in 2012, while enrollment has risen from 11.7 million in 2011 to 12.8 million in 2012.


Central Line Infections Now Publicly Reported

Medicare has begun publishing rates of central-line infections at hospitals on its consumer site Hospital Compare. The site allows consumers to compare hospitals to a national benchmark, other local institutions, and a state average. Click here to go to the site. Consumers Union says that public disclosure of medical errors has helped drive down infection rates in several states. Click here to see the Consumers Union angle. More infection results are coming next year, including surgical site infections and urinary tract infections caused by catheters.

Healthcare Acquired Infections Focus of New CDC Report

A new CDC study out last week focused on healthcare acquired infections and ways in which stakeholders could work together to make further progress in reducing them. State health officials and the Keystone Center contributed to the report. Click here for the 37-page report.

Top 10 Checklist Out for Hospital Patients

A new book out last week written by a hospital patient representative offers a top 10 checklist for patients who need a hospital stay. Click here to see the USA Today story.

Multiple Breast Cancer Operations May Not Be Needed: New JAMA Study

A new study out last week says nearly half of women who had lumpectomies for breast cancer had second operations they may not have needed because surgeons have been unable to agree on guidelines for the most common operation for breast cancer. It also suggests that some women who might benefit from further surgery may be missing out. Click here for the NY Times story. Click here for the JAMA study.

Senate Chairman Raises Serious Concerns with Merger

The chairman of the Senate’s anti-trust subcommittee last week raised serious concerns about the pending Express Scripts – MEDCO merger in a letter to the Federal Trade Commission. Kohl’s letter said the merger would “unquestionably create a giant PBM that is substantially larger than any competitor, and will result in the combined entity having a dominant market share in mail order and specialty pharmacies. It will reduce choices for PBM services to health plan sponsors, especially large employers.  And it has the potential to have profound effects on the ability of both community and chain drug stores to compete.” Click here to read more.

Poll: Don’t Cut Nursing Home Funding

The nation’s nursing home industry is pushing against potential congressional action that could reduce their payments with a new poll out last week. 82% of registered voters oppose reducing Medicare funding for seniors’ nursing home care; 90% say funding for U.S. nursing home care should either “remain the same” or “increase”; 69% support the concept of phasing-in a 2011 Medicare regulation that reduced Medicare funding by 11.1% all at one time.  Click here for more information on the poll.

Seniors Saved Billions on Rx:  HHS

Nearly 3.6 million people with Medicare saved $2.1 billion on their prescription drugs in 2011 according to data issued last week by HHS. The average person with Medicare will save nearly $4,200 by 2021 because of the Affordable Care Act, according to HHS. Click here to read the 4-page report.

Stalled CMS Demos Targeting Fraud to Move Forward

On November 15, CMS announced three demonstration projects targeting fraud, waste, and abuse, but suspended those programs’ January 1, 2012 start dates. Late last week, CMS announced that the Prior Authorization of Power Mobility Devices (PMDs) Demonstration and the Recovery Audit Prepayment Review Demonstration are expected to move forward on or after June 1, 2012. CMS significantly revised the Prior Authorization of PMDs demonstration in response to provider and supplier concerns. Click here for the update.

Round 2 DME Program Licensure Deadline Extended

CMS announced last week it is extending the licensure deadline for the Round 2 and national mail-order competitions of the Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program. The original licensure deadline required suppliers to have all required state licenses on file with the National Supplier Clearinghouse and indicated in the Provider Enrollment, Chain, and Ownership System (PECOS) before submitting a bid. Bidding suppliers must now ensure that copies of all applicable state licenses are received by the NSC on or before May 1, 2012. Click here for further details.

EHR Program 1-Year-Old; $2.5 Billion Paid So Far

Last Tuesday was the one-year anniversary of the start of registration for the Medicare and Medicaid Electronic Health Record (EHR) Incentive Programs. Since the start of the program, 43 states have started their Medicaid EHR Incentive Programs; more than 176,000 people have registered for the Medicare and/or Medicaid EHR Incentive Programs; more than $2.5 billion has been paid in incentive payments to eligible professionals and eligible hospitals and critical access hospitals. Click here for updated information about the program.