WEEKLY E-BULLETIN


Medicare Appeals Backlog Skyrocketing; Agency Blames RAC Audits

Chief Administrative Law Judge Nancy Griswold told lawmakers last week that while the Office of Medicare Hearings and Appeals is planning to add seven new Administrative Law Judge teams and has planned numerous initiatives, the agency won’t be able to close the gap between the number of appeals coming in and what OMHA is able to handle. Lawmakers said it would take hundreds of additional judges to close the gap within a year. Griswold said RAC audits are part of the problem. The OMHA had 800,000 appeals pending on July 1. Click here to read her testimony.

Senate Report Makes Medicare Audit Recommendations

A Senate committee last week released a special report on Medicare audits with a focus on hospitals. The report notes that even with a plethora of audit programs by Medicare Administrative Contractors (MACs), Zone Program Integrity Contractors (ZPICs), Recovery Auditors (RACs), and the new MSP audits, CMS’s improper payment rate is the highest it has been in five years. Click here for the 43-page report. Click here for the summary.

Urgent Care Business Booming

Private equity investment firms are investing billions of dollars in urgent care and related businesses, according to a NY Times report out last week. Since 2008, these investors have sunk $2.3 billion into urgent care clinics. Commercial insurance companies, regional health systems and local hospitals are also looking to buy urgent care practices or form business relationships with them. The business model is simple: Treat many patients as quickly as possible. Urgent care is a low-margin, high-volume proposition. Click here.

$100 Million in Grants Announced for New Health Centers

HHS announced last week the availability of $100 million from the Affordable Care Act to support an estimated 150 new health center sites across the country in 2015. 550 health centers funded by the ACA have opened in the last three years. Click here for details about how to apply, including details on an HHS conference call later this week.

$83.4 Million Made Available for Primary Care Residencies

HHS announced last week $83.4 million in Affordable Care Act funding to support primary care residency programs in 60 Teaching Health Centers across the nation. The funding will help train more than 550 residents during the 2014-2015 academic year, increasing the number of residents trained in the previous academic year by more than 200 and helping to increase access to health care in communities across the country. Click here for the list of where the money is going.

CMS Innovation Center Announces $360 Million for Prospective Awardees

HHS last week announced new prospective awardees to test innovative care models, bringing the total amount of funding to as much as $360 million for 39 recipients spanning 27 states and the District of Columbia. The Health Care Innovation Awards range from an expected $2 million to $23.8 million over a three year period. These awards are made possible by the Affordable Care Act and round out the anticipated recipients for round two of the Health Care Innovation Awards program. Click here for the list of awardees, including project details.

Top Ten Costliest Health Care Cities Listed

Do you live in one of the ten most expensive cities in America for health care? Forbes released its analysis last week, based on four common procedures. Click here to see the report.

UnitedHealth Project Drops Cost of Cancer Care Substantially

The costs of cancer care fell 34 percent in a study in which UnitedHealth Group Inc. paid doctors a lump sum to treat each patient, rather than for each drug or service they provided, according to a study released last week. The study was designed to test the theory that paying doctors a percentage of the cost of medicines they prescribe encourages them to use more expensive treatments, rather than the best or most cost-effective ones. Five medical groups using the per-patient payments spent $64.8 million over the three-year study, compared with what the researchers estimated would have been $98.1 million under the per-treatment payments. Click here for the news report. Click here for the study.

BCBS Value-Based Programs Cuts Cost of Care

The Blue Cross Blue Shield Association’s plans are spending more than $65 million a year in value-based payment programs that have a high return on investment. In 2012 alone, the plans saved $500 million, according to a report released last week. Blue Cross plans administer more than 350 value-based programs ranging from accountable care organizations and patient-centered medical homes to pay-for-performance and episode-based payments in 49 states. Click here for their report.

New Licensed Health Profession Draws Protests, Praise

Missouri’s governor last week signed new health profession legislation into law that is drawing sharp protest and strong support from across the country. The law creates a new health occupation, Assistant Physician, not to be confused with Physician Assistant. Of more than 17 thousand medical school graduates in the United States this year, about 600 didn’t match for a residency. The new law allows these graduates to work in medically underserved areas in Missouri as primary care doctors. Click here for details.

Medicaid Enrollment Jumps Nationwide

About 6.7 million more people have enrolled in Medicaid or CHIP from October through May, CMS reported last week. May alone saw 920,000 people added to the rolls in the 48 states and District of Columbia that reported data.

Since last fall, states that expanded Medicaid have seen enrollment climb by an average of 17 percent, while states that did not have seen a 3 percent increase. In 38 states that reported more specific data, more than half of those who are enrolled in Medicaid and CHIP are children. Click here for CMS’ May report, which includes detailed state-by-state data.

Numbers of Uninsured Dropping

The Affordable Care Act has reduced the number of uninsured adults by 8 million to 11 million in its first year, according to three new studies released last week, and the vast majority report satisfaction with their new health plans. The studies — done separately by the Commonwealth Fund (click here), the Urban Institute (click here) and the Gallup Organization (click here) — use different methods to estimate the effect that the Affordable Care Act has had. Each comes to a similar conclusion: Nationwide, roughly 1 in 4 people who were uninsured last fall now have received coverage, representing a significant first step toward Obamacare’s goal of near-universal coverage. Click here for another state-by-state look at the reduction in the number of uninsured.

Senators Targeting Gilead Hep C Drug Costs

A bipartisan pair of senators is asking the pharmaceutical company that makes a hepatitis C “miracle drug” to justify its $84,000 per treatment price tag. Senate Finance Committee Chairman Ron Wyden and GOP Sen. Chuck Grassley wrote last week to Gilead, “That price appears to be higher than expected given the costs of development and production and the steep discounts offered in other countries.” Insurers and other health care industry interests have been sounding the alarm over the treatment. State and federal lawmakers also are concerned about the drug’s potential impact on Medicare, Medicaid and health care costs for prison inmates. Click here for their letter. BusinessWeek has a report on “who should pay” for these wonder drugs – click here.

Generic Drugs Contributing to Rising Health Costs

Some generic drugs are also contributing to rising health care costs, according to a Wall Street Journal article last week. Click here.

FDA Reviewing Off-Label Restrictions

Prompted in part by recent federal court decisions, the FDA is reviewing its rules on what kind of data drug companies should be allowed to distribute to doctors regarding off-label uses, as well as how they should respond to unsolicited questions from physicians about those uses. Its goal is to issue new guidelines by the end of the year. Click here for the story.

GAO: MLR Compliance Is High

A GAO report out last week found that more than three quarters of insurers met or exceeded the Medical Loss Ratio standards in 2011 and in 2012, and the median MLRs among all insurers were 88 percent. Insurers’ MLRs and their spending on claims and non-claims costs varied across different insurance markets. Specifically, insurers in the large group market had higher median MLRs and spent a higher share of their premiums on enrollees’ claims and less on non-claims costs, compared to insurers in the individual and small group markets. Click here for the report.

CMS Rules Would Allow More Medicare Advantage Recoupments

CMS wants to establish a formal process that allows it to use a payment offset system to handle disputes with Medicare Advantage insurers about potential payment errors. Although the agency loses billions of dollars each year from overpayments that aren’t recovered, CMS doesn’t have a process in place to address the financial losses, the Center for Public Integrity reported. In fact, CPI found that from 2008 to 2013, improper payments to Medicare Advantage plans topped nearly $70 billion. Click here for CPI’s report.

GAO: Health Programs Primary Reason for Improper Payments

Medicare, Medicaid, and Medicare Advantage accounted for $62.2 billion of the estimated $105 billion in improper payments distributed by the government last year, according to prepared testimony submitted by the GAO to Congress last week. Click here to review the detailed testimony.

OIG: Florida, California Have Greatest Lab Questionable Billing

The HHS OIG was out with a report last week on questionable billing for Medicare part B clinical laboratory services. Almost half of the labs that had five or more measures of questionable billing were located in Florida and California — areas that are known to be vulnerable to Medicare fraud. And more than 1,000 labs had unusually high billing. Click here for the OIG report.

Government Expects to Spending Significantly Less on Medicare This Year

The Congressional Budget Office expects the government to spend about $50 billion less on Medicare this year than it projected four years ago, according to a CBO report out last week. Spending is expected to be $1,000 lower per beneficiary this year than projected in 2010, and $2,400 lower in 2019. Click here for this excellent summary with graphs.

Senators Wants Answers on CDC Safety Protocols

A bipartisan group of 20 US Senators is pressing HHS for information on the department’s safety protocols in the wake of a CDC report last week about government laboratories mishandling dangerous biological materials. The senators say that two recent incidents at the CDC campus in Atlanta, involving anthrax and influenza samples, plus the discovery of smallpox vials at NIH, warrants a serious and careful review of HHS’s policies, procedures, and actions. Click here for a copy of their letter.

Stage 2 Meaningful Use Stats Lower than Expected

The federal government last week announced the latest statistics on Meaningful Use adoption showing that 1 percent of eligible providers and 3 percent of eligible hospitals have attested to Stage 2 to date. The 1 percent figure includes eligible providers who installed a 2014-certified EHR by January 1 of this year, completed the reporting period ending April 1, and attested as of July 1. Click here for further details.

Study: EHR Use Results in Major Savings

A sweeping examination of more than 5 million inpatient records at 550 hospitals during 2009 identified savings averaging 9.6% per patient – or $731 – from the 19% of hospitals that used advanced electronic health records when compared with hospitals that did not. Click here for the study.

Docs Cite EHR Adoption as Most Pressing Tech Issue

EHR implementation continues to be the most pressing technology challenge for physician practices, according to a new survey of more than 1,400 physicians and practice administrators. Click here for the survey results. Another research report released last week concludes that health technology safety efforts often are forced to compete with other “priorities” at provider organizations, including business growth and quality of service. Click here for this RAND report.

HIPAA Complaints Skyrocketing

Consumer complaints to the Office of Civil Rights regarding HIPAA violations are skyrocketing, according to a recent report. The number of complaints rose nearly 10 fold between 2013 and 2003. While 2013 was a record year for complaints, 2014 is setting up to easily shatter the previous mark. Complaint volume is up 45.7% year-over-year through the month of May (the most recent month with data available). Click here for a summary.

Study: Hospitals Underuse Minimally Invasive Surgery

Hospitals underuse minimally invasive surgery, even though for most patients, it’s a better option than open surgery, a new study found. Researchers found that some hospitals capable of performing minimally invasive surgery don’t provide it as often as they could, even though it’s associated with fewer surgical site infections, less pain and shorter hospital stays. Click here for the study that was led by a Johns Hopkins physician.

Report: GPOs Saving Billions

Group Purchasing Organizations, which negotiate contracts for hospitals and nursing homes to buy health care supplies, are saving providers tens of billions of dollars every year. A report from the Healthcare Supply Chain Association concludes that GPOs saved the U.S. health care system an estimated $25-$55.2 billion in 2012 and will save $392-$864 billion from 2013 to 2022. Click here for the report.