Supreme Court Decision Will Lower Cost of ObamaCare: CBO

The Supreme Court’s decision on the Affordable Care Act (ObamaCare) will have a larger than expected impact on its cost, according to a report from the Congressional Budget Office out last week.  The health care law will cost $84 billion less over 11 years after the Supreme Court ruling made the Medicaid expansion optional, but it will also leave 3 million more people uninsured, according to CBO. The budget office also estimated that repealing the Affordable Care Act would now add $109 billion to the deficit over the 2013-2022 period, about $101 billion less than estimated in 2011.  Click here for a good summary of the CBO report.

Government Report Says Doc Payment Fix Will Cost Less

In another report last week - this from the Administration’s Office of Management and Budget — they now estimate 10-year cost of repealing the Medicare physician payment formula has dropped by $35 billion, from $429 billion down to $395 billion, over 10 years, as a result of lower utilization numbers that also impacted overall Medicare spending projections. The lower numbers for a 10-year “doc fix” may also mean that it would be less expensive to enact a one-year payment fix.   Click here for a copy of the OMB report.  Texas Republican Michael Burgess has introduced legislation to extend the current fix for an additional year as Congress continues to research how it might finance a permanent fix to the Sustainable Growth Rate formula.  Click here for a copy of the 2-page bill.  One thing many experts do agree on: the current physician shortage is likely to get worse.  Click here for the NY Times story.

Children’s Hospitals Have Significant Shortages in Some Pediatric Specialties

Children’s hospitals across the country continue to experience significant shortages in some pediatric physician specialties, according to a report released by the Children’s Hospital Association on Capitol Hill last week.  Causes include limited supply of specialists, rising debt burden, noncompetitive salaries, changing lifestyles and a decline in physicians seeking specialty training. Click here for their 3-page report.


Medicaid ACO Collaborative Launches in Seven States

Medicaid agencies from 7 states have announced they will participate in an initiative to advance Medicaid Accountable Care Organizations in their states – with help from the Center for Healthcare Strategies, the Commonwealth Fund and the Massachusetts Medicaid Policy Institute.  The state are Maine, Massachusetts, Minnesota, New Jersey Oregon, Texas and Vermont.  Click here for details.


Hospices to Get Medicare Payment Increase

Hospices will receive a 0.9% ($140 million) increase in Medicare payments in fiscal year 2013 under the annual update to the hospice wage index and payment changes required under the Affordable Care Act, CMS said last week. The net increase is based on a 2.6% increase in the inpatient hospital market basket, minus a 0.7% productivity adjustment and 0.3% adjustment required by law; a 0.6% decrease as part of the agency’s seven-year phase-out of the wage index’s budget neutrality adjustment factor; and a 0.1% decrease due to the use of updated wage data.  Click here to read the 48-page CMS notice.


IRFs to Receive Medicare Payment Bump

CMS last week issued a notice stating that it will update payment rates to more than 200 freestanding inpatient rehabilitation facilities, and to almost 1,000 IRF units of acute care hospitals, including a small number of IRF units in critical access hospitals that are paid under the IRF Prospective Payment System. The new rates will begin October 1, 2012.  For FY 2013, the market basket estimate is 2.7 percent. The market basket is reduced by a 0.7 percent productivity adjustment and a 0.1 percentage point reduction, both mandated by the Affordable Care Act. An additional 0.2 percentage point increase to payments is due to an update in the outlier threshold amount for FY 2013 to increase estimated outlier payments from 2.8 percent in FY 2012 to 3 percent in FY 2013. The net estimated increase to aggregate payments for FY 2013 is 2.1 percent. CMS estimates the total impact of the FY 2013 payment rate update to be an increase of approximately $140 million.  Click here to read the 64-page notice.


Health IT Incentive Payments Go Mostly to the South: GAO

Large and urban hospitals were much more likely than small and rural hospitals to receive a Medicare incentive payment for meaningful use of electronic health records last year, the first year of the incentive program, according to a report released last week by the GAO. Just 16% (761) of the estimated 4,855 eligible hospitals received incentive payments in 2011, which totaled $1.3 billion, GAO found — and most of them were in the South.  Hospitals paid under the inpatient prospective payment system were more than twice as likely as critical access hospitals to receive an incentive payment.  Click here for a summary of the GAO report and to download a copy of the full report.


Report Details How “Gray Market” Is Boosting Cost of Drugs

A Senate committee is investigating how alternative distributors drive up the cost of prescription drugs in short supply, and last week issued a report on the “gray market.”  According to committee chairman Jay Rockefeller (D-WV) “…By the time the ‘gray market’ has done its work, a cancer drug that originally cost $10 or $12 has become a drug that cost $500 or even $1,000.”  Click here to read the key findings of the investigation and to get a copy of the report.  Click here to read how one hospital – Cincinnati Children’s – is managing its difficult drug shortage problem.


Government Announces New Fraud Initiative and Partners with Insurers

HHS and the Justice Department last week announced the launch of a partnership among the federal government, State officials, several leading private health insurance organizations, and other health care anti-fraud groups to prevent health care fraud. The new partnership is designed to share information and best practices in order to improve detection and prevent payment of fraudulent health care billings. Its goal is to reveal and halt scams that cut across a number of public and private payers. One innovative objective is to share information on specific schemes, utilized billing codes and geographical fraud hotspots so that action can be taken to prevent losses to both government and private health plans before they occur.  Click here for more information, including the list of participating insurers.


Medicare Advantage Bonus Payments Defended

Despite ongoing criticism of the Administration’s plans to pay as much as $8 billion in bonuses to Medicare Advantage health plans that perform well under a 5-star rating program, CMS showed no signs of changing plans last week as a top CMS official testified before a House committee.  According to Medicare chief Jonathan Blum nearly 100 percent of Medicare beneficiaries have access to a MA plan and there are an average 26 MA plans to choose from in each county. Since 2010, MA premiums on average have fallen 16 percent and enrollment has climbed by 17 percent to over 12.8 million beneficiaries in plan year 2012. CMS expects this enrollment growth to continue in 2013. Click here for a copy of his informative testimony.


Dual Eligible Demo Defended by State Medicaid Directors

State Medicaid directors are vigorously defending the proposed dual eligible demonstration project CMS has recently unveiled.  The proposal has been the target of much criticism from Capitol Hill and others who say the demo should be scaled back to a more manageable size.  The top two officials from the State Medicaid Directors Association have a detailed explanation of why the current demo should go forward in last week’s Health Affairs.  Click here for their report, which contains some very good patient-specific examples.


M&A Health Care Activity Increases

The dollar volume of merger and acquisition activity in the health care industry more than doubled in the second quarter of 2012 compared with the previous quarter, despite a decline in the number of transactions announced, according to a new report from Levin Associates released last week.  In fact, with $61.2 billion in announced mergers and acquisitions in the second quarter, it was the most active quarter since the second quarter of 2011 when nearly $75 billion of health care M&A deals were announced. The 251 announced mergers and acquisitions equaled the year-ago number. Click here for more.


Physicians Continue Advising Congress on Needed Reforms

Some physicians urged a key House panel last week to extend electronic health records incentives to rural health clinics and ambulatory surgical centers, telling lawmakers that EHR meaningful use programs should be a crucial part of efforts to replace the existing Medicare payment system with one where doctors are asked to do more and get better results while controlling costs in a post-sustainable growth rate setting.  Other physician groups outlined several additional ways to change the physician financing system.  Click here to read the 10-pages from the American College of Physician Executives.  Here’s the 15-page testimony from the American College of Physicians.  And the 14 pages from the American College of Orthopaedic Surgeons.  Cleveland Clinic CEO Delos Cosgrove, MD, was also in DC last week suggesting that all physicians should be on salary as another way of helping to reign in costs.  Click here for that report.


New CO-OP Announced in Colorado

CMS last week awarded a $69,396,000 loan to Colorado Health Insurance Cooperative, Inc. in Colorado to launch a new private non-profit, consumer-governed health insurance company, called a Consumer Operated and Oriented Plan (CO-OP). CO-OP loans are only made to private, nonprofit entities that demonstrate a high probability of financial viability. Click here for more.  This is the 18th COOP to receive a government-backed loan.


Medicaid Expansion Saves Lives:  New Study

New York, Maine and Arizona experienced a 6.1% reduction in adult mortality after they expanded Medicaid coverage for adults, according to a study published last week by the New England Journal of Medicine. The state expansions increased Medicaid coverage for adults by 2.2 percentage points, reduced the proportion of uninsured adults by 3.2 percentage points, and decreased the proportion of adults delaying care because of costs by 2.9 percentage points, the study found. Click here for the study.


New Report: Safety Net Providers Struggling

In a “State of the Safety Net” report released last week summarizing the work of FQHCs, community clinics and related organizations, there were almost twice as many women as men seen in those settings between the ages of 25-44 (3.4 million versus 1.9 million).  Those aged 50-69 are the fastest growing group as a proportion of the whole, yet children are still the largest overall proportion.  The FQHC population is 35% Hispanic/ Latino while, according to the 2010 U.S. Census, nationally only 16% of the U.S. population is Hispanic/Latino. The report was prepared by Direct Relief and can be seen by clicking here.


States Whacking Medicaid Budgets

To help balance their budgets, 13 states are cutting Medicaid either by lowering fees paid to medical providers, reducing benefits, or tightening eligibility for the health insurance program for the poor and disabled, according to a survey released last week by Kaiser Health News.  Click here for a state-by-state summary.


NEJM:  Advanced CT Use for Chest Pains Has Pros and Cons

If you’re having chest pains, an advanced type of CT scan can quickly rule out a heart attack. New research suggests these heart scans cut time spent in the hospital but didn’t save money, according to a study out last week in the New England Journal of Medicine.  In patients in the emergency department with symptoms suggestive of acute coronary syndromes, incorporating CCTA into a triage strategy improved the efficiency of clinical decision making, as compared with a standard evaluation in the emergency department, but it resulted in an increase in downstream testing and radiation exposure with no decrease in the overall costs of care.  Click here for the study.