27 New ACOs Announced; Details Provided

CMS last week announced the selection of the first 27 accountable care organizations to participate in the Medicare Shared Saving Program (MSSP) beginning this month. The selected organizations have agreed to be responsible for improving care for nearly 375,000 beneficiaries in eighteen states through better coordination among providers. Two of the ACOs applied for a version of the program that allows them to earn a higher share of any savings, in return for which they have agreed to be held accountable for a share of any losses if the costs of care for the beneficiaries assigned to them increase. Five will participate in the Advance Payment ACO Model. Under this model, each participating ACO will receive advance payments to help cover the costs of establishing the infrastructure needed to coordinate care for the beneficiaries they serve. Click here for the description (location, limited details) of each new ACO.

The final rules offered ACOs the option for the first year of the program of starting on either April 1 or July 1, 2012. CMS will announce the date for submission of applications to participate in the Shared Savings Program beginning in 2013 later this year. There are 32 Pioneer ACOs already underway.

So, who wants to be part of an ACO? According to a recent survey of several hundred health care provider leaders across the country, about 40 percent are planning such a move – including those who want to become an MSSP with CMS. Click here to review the survey.

And what do physicians think about all this? According to another survey, not very much. These physicians surveyed are markedly pessimistic regarding the future of the U.S. healthcare system, with the “new healthcare legislation” ranking as a strong #1 reason for the pessimism. Financial-related considerations play a key role in the choice of practice/ arrangement. And among the 27% who changed (or considered changing) their practice/arrangement in the past year, the leading reason given related to “financial issues.” The vast majority express satisfaction with their current practice / arrangement (with 35% saying they are “highly satisfied,” and another 45% saying they are “somewhat satisfied”); and most expect to stay with the current practice/ arrangement for 8 years or more. Many (39%) aspire to some form of ownership position in the future (as either sole owner or partner). Click here for the 25-page Physician’s Foundation report.

HHS Recommends Revamp of Medicare Wage Index Formula

HHS last week gave Congress its recommendations on how to change the very complicated Medicare wage index in a manner that would drastically reduce the number of exceptions that need to be made under the current formula. There aren’t many new ideas in the proposal. If the plan were implemented in a budget neutral fashion, it would dramatically change payment rates to hospitals and other providers across the country. A 2-page Strategic Health Care summary can be reviewed by clicking here.

Settlement with CMS Brings $700 Million to 500 Hospitals

Speaking of complicated payment formulas, CMS agreed to a settlement with about 500 hospitals across the country regarding the Medicare rural floor budget neutrality adjustment. CMS will pay $700 million to these hospitals. Click here for the attorney’s news release. Click here for the story in the LA Times (200 of the hospitals are in California.)

For-Profit Hospitals Hit Hard If Reform Law Dumped: Moody’s

Among the many things that could happen if the Supreme Court throws out the Affordable Care Act in June: the financial condition of for-profit hospitals would suffer, according to a report from Moody’s Investor Service. Click here for their report.

Report Details State Efforts to Limit Patient Drug Costs

Providers and pharma companies across the country are fighting with insurers over efforts to limit the out-of-pocket costs for very expensive drugs that treat cancer, multiple sclerosis and other life-threatening diseases. New York was the first state to pass such legislation. Vermont and Maine also have now passed more limited bills. A very good story late last week on the issue from the New York Times. Click here.

VA Regs Would Drop Co-Pay From In-Home Video Telehealth

The Veterans Administration is taking final action on regulations that would exempt in-home video telehealth care from having any required copayment. Unless the VA received relevant negative comments during the comment period that ended April 5, the VA will “remove a barrier that may have previously discouraged veterans from choosing to use in-home video telehealth as a viable medical care option. In turn, VA hopes to make the home a preferred place of care, whenever medically appropriate and possible.” This final rule is effective May 7, 2012, without further notice. Click here to read the rule.

ICD-10 Delayed One Year

HHS last week issued a proposed rule that would delay, from October 1, 2013 to October 1, 2014, the compliance date for ICD-10. Click here for all the details.

Report Shows Where Hospitals Can Cut Costs

The Premier Healthcare Alliance is out with a new analysis showing how hospitals can save big bucks. The following five areas have the biggest opportunity for average annual savings per hospital:

  • Unnecessary labor expense, such as inefficient processes that take too long or require too many employees to complete: $6.18 million per hospital per year, and up to 5.1 percent of a hospital’s total labor budget;
  • Excess readmissions: $3.83 million per hospital per year, and up to 9.6 percent of a hospital’s budget;
  • Inappropriate length of stay: $2.63 million per hospital per year, and up to 5.4 percent of the hospital’s budget;
  • Skill mix dollar variance that occurs when higher paid employees do work that less expensive or less experienced staff could do equally well: $2.38 million per hospital per year, and up to 6.2 percent of a hospital’s total labor budget; and
  • Unnecessary lab testing such as blood, urine or hemoglobin tests: $2.23 million per hospital per year, and up to 1.6 percent of a hospital’s total lab budget. Click here for the complete report.

Hospital Drug Shortages Continue

Hospital drug shortages continue, according the government and published reports. Congress is moving on legislation they hope will relieve some of the problem. More than 210 drugs are either in short supply or unavailable at all. Click here for a very good story on the situation last week from the Washington Post.

Primary Care Initiative Focuses on 7 States

CMS’ Comprehensive Primary Care initiative last week announced plans to focus its efforts on seven states. These markets are multi-payer and may include private health plans, state Medicaid agencies, and employers:

  • Arkansas: Statewide
  • Colorado: Statewide
  • New Jersey: Statewide
  • New York: Capital District-Hudson Valley Region
  • Ohio: Cincinnati-Dayton Region
  • Oklahoma: Greater Tulsa Region
  • Oregon: Statewide

The participating payers in each market will be entering into a Memorandum of Understanding with CMS. Once the participating payers in each market have agreed to the terms and conditions of this MOU, the Innovation Center will then release a solicitation to primary care practices in these geographic areas wishing to participate in providing comprehensive primary care as part of this initiative. Approximately 75 primary care practices in each designated market will be selected to participate. Medicare will work with commercial and State health insurance plans and offer bonus payments to primary care doctors who better coordinate care for their patients. Primary care practices that choose to participate in this initiative will be given resources to better coordinate primary care for their Medicare patients. Click here for more.

CMS Posts Clinical Quality Measures for Stage 2 Meaningful Use

CMS last week posted on its Web site (click here) the complete set of clinical quality measures in the proposed rule for Stage 2 electronic records meaningful use starting in 2014. The content is a road map for proposed Stage 2 CQMs. It includes spreadsheets that map the NDC code of a drug to the brand and generic names, and the route and category of the drug. Also available are step-by-step instructions for complying with the measures. Some measures remain in development and the descriptions may change before the final rule is published. When possible, web links are provided for measures that have corresponding information on the National Quality Forum Web site. Measures without a NQF number have not yet been endorsed. The deadline for public comments on the CQMs and other aspects of the proposed rule is May 7.

Health Care Prices Slowing Down

Health care prices rose just 1.8 percent in February 2012, the lowest rate of inflation since April 1998, according to an Altarum report out last week. (Click here.) Price growth for nearly all health categories moderated, especially hospital care and physician services. With 26,000 new health care jobs created in March, health care employment hit another all-time high of 10.8 percent of total employment.

NIH: Bypass Better than Angioplasty for Older Adults

The NIH has a report out showing that older adults who received bypass surgery to open blocked coronary arteries had better long-term survival rates than those who had angioplasty. The new findings will help doctors and patients decide between these 2 treatments. Click here for the report.

Geriatric EDs Coming

The wave of the future? Hospitals are opening geriatric emergency departments. Click here for the NY Times story.

FDA Fast Tracks New ESRD Devices

Three products for patients with end stage renal disease have been chosen to participate in the FDA’s Innovation Pathway, an evolving system designed to help medical devices reach patients in a safe, timely and collaborative manner. The FDA selected three from 32 product applications ranging from an artificial kidney to devices that assist kidney function that were submitted in response to a January 2012 request from FDA’s device center. The three products are:

  • An implantable Renal Assist Device (iRAD) being developed by the University of California, San Francisco.
  • A Wearable Artificial Kidney (WAK) in development by Blood Purification Technologies Inc. of Beverly Hills, Calif.
  • A Hemoaccess Valve System (HVS) that has been designed by Greenville, S.C.-based CreatiVasc Medical.
  • Click here for more.