WEEKLY E-BULLETIN


Limited RAC Reviews Getting Underway Again

CMS is initiating contract modifications to current Recovery Auditor Contracts (RACs) to allow auditors to restart some reviews, due to the continued delay in awarding new RACs, CMS announced last week. Most reviews will happen automatically, but a few will be complex reviews of topics chosen by CMS. CMS plans to award the new round of RAC contracts this year. Click here for the CMS announcement. Click here for further analysis. The RAC Association in Washington applauded the CMS announcement. Click here for that.

Docs Demand Changes to Sunshine Act

About 110 medical societies wrote to CMS last week suggesting numerous changes related to the database of industry payments to doctors that’s set to go live in September. While groups like the American Medical Association have backed the aims of the transparency law, the letter to CMS raises physicians’ complaints that continuing education payments will be included; it asks for a six-month delay in making the database public because doctors had less time to register and review the information than CMS had said they would. Click here for a copy of the letter.

Hospitals Benefiting from Newly Insured

A rush of newly insured patients using health services has boosted hospital operators’ fortunes but has racked up costs that insurers didn’t anticipate, corporate filings, and interviews with executives show. People are getting more back surgeries, seeking maternity care, and showing up at emergency rooms more frequently, executives say, boosting income for hospital operators. Click here for the WSJ report.

Small Employers Dumping Health Plans Faster Than Expected

Small employers are dumping their health plans faster than expected, according to one of the nation’s largest insurers. Wellpoint’s CFO told investors that enrollment in the Obamacare exchanges has more than offset the losses to the insurer. Click here for the report.

Large Insurers Expecting Greater Competition in 2015

Some of the largest health insurance companies expect a drive in competition among consumers in 2015, reports Forbes. Last week, Bloomfield, Connecticut-based Cigna, which already operates in five states, announced that come next enrollment period, it will sell plans in Maryland, Missouri, and Georgia. Hartford, Connecticut-based Aetna will also expand in Georgia, on top of the 16 states and the District of Columbia where the insurer sells plans. Minneapolis-based UnitedHealth Group also plans to expand to nearly a dozen state exchanges. Click here for the report.

Obscure Drug Costing Medicare Hundreds of Millions

An obscure injectable medication made from pigs’ pituitary glands has surged up the list of drugs that cost Medicare the most money, taking a growing bite out of the program’s resources, according to a NY Times report last week. Medicare’s tab for the medication, H.P. Acthar Gel, jumped twentyfold from 2008 to 2012, reaching $141.5 million. The bill for 2013 is likely to be even higher, exceeding $220 million. Click here.

Some States See Sharp Reductions in Uninsured

Arkansas and Kentucky lead all other states in the sharpest reductions in their uninsured rate among adult residents since the healthcare law’s requirement to have insurance took effect at the beginning of the year, according to a new analysis from Gallup. Delaware, Washington, and Colorado round out the top five. All 10 states that report the largest declines in uninsured rates expanded Medicaid and established a state-based marketplace exchange or state-federal partnership. Click here to see a list of all states.

Some States See Big Increase in Medicaid Enrollment

Oregon, Nevada, and Vermont have led the nation in Medicaid enrollment, in states that expanded Medicaid, according to a report released last week by CMS. States reported more than 66 million individuals enrolled in Medicaid and CHIP in June — about 7.2 million more than before the start of Obamacare open enrollment last fall. And since enrollment in both programs is year-round, more individuals are being added to the rolls every day. The CMS report says Medicaid enrollment has grown by 18.5 percent in expansion states. That compares to about 4 percent growth in the 24 states that decided not to expand Medicaid. Click here for the report that has a state-by-state summary.

Medicaid Non-Expansion States Giving Up Hundreds of Billions

The 24 states that have not expanded Medicaid will give up on more than $423 billion in federal funding between 2013 and 2022, according to a new Urban Institute report released last week. New patients would bring local hospitals $167.8 billion in reimbursement payments during that period. The study estimates that for every $1 a state would spend on expansion, it would receive $13.41 in federal funding. Click here for the study, which includes a state-by-state impact summary.

Medicaid Pay Increase for Docs Expires in December

A pay bump for doctors is slated to quietly phase out in four months — but not if Democratic legislators can help it. Obamacare gave primary care doctors a pay bump for seeing Medicaid enrollees, using federal dollars to pay them the same rate they get for seeing Medicare patients. That began in 2013 and is scheduled to end in December 2014 — unless a handful of Democratic legislators get their way. Click here for the story.

Safety-Net Hospitals Hurt Most by VBP and Readmissions Programs

Medicare’s Value-Based Purchasing and Hospital Readmissions Reduction programs are more likely to penalize safety-net hospitals than any other hospital under the prospective payment system, according to a study published in Health Affairs last week. Safety-net hospitals in states that declined to expand their Medicaid programs will face even more financial woes because they can’t use the extra funds from Medicaid expansion to offset planned cuts to the disproportionate share hospital program. Click here to see the abstract. (Subscription required for full article.) America’s Essential Hospitals is out with a new report on the vital role safety-net hospitals are playing today. Click here.

Socioeconomic Issues Impacting Heart Failure Readmissions

Patients admitted to a hospital for heart failure are significantly more likely to be readmitted within six months of discharge if they reside in a neighborhood with a low socioeconomic status, according to a study in the most recent issue of the journal Circulation. Researchers found patients living in neighborhoods with a low socioeconomic level were approximately 17 percent more likely to return to a hospital within six months of discharge than patients who live in wealthier neighborhoods, after adjustments for a variety of other conditions. Click here for the study.

Some in Congress Want Socioeconomic Changes to Readmissions Program

There are two bills in Congress designed to address the impact of socioeconomic status on CMS’ hospital readmission penalty program. H.R. 4188, sponsored by Rep. Renacci (R-OH) has 101 cosponsors. The Senate bill, S. 2501, similar to the House version, is sponsored by Senator Joe Manchin (D-WV) and has 6 cosponsors. There is a possibility that the House version could pass this year. Click here for more details on the House bill, including the cosponsor list. Click here to see more on the Senate bill.

Bill Requires Hospital Observation Status Notification

Legislation was introduced just before the congressional August recess that would require hospitals to notify patients, verbally and in writing, that they have observation rather than inpatient status. The bill requires notification for Medicare patients who are in a hospital for at least 24 hours. The bill is sponsored by Rep. Lloyd Doggett (D-TX) and is cosponsored by 2 Indiana Republicans Todd Young and Jackie Walorski. Click here for more information on the bill.

CMS Stops Certain HAC Public Disclosures

CMS has ceased public disclosure of data on eight avoidable hospital-acquired conditions such as administering the wrong blood type. The agency continues to report rates for 13 conditions, such as post-surgery sepsis. Click here for the USA Today report.

Final CMS Regs Boost Funding for Hospitals, LTCHs, IRFs, Psych, SNFs

CMS released the final FY15 IPPS regulations last week that take effect October 1. General acute care hospitals will see an overall update of 1.4 percent. The rate update for long term care hospitals will be 0.9 percent. Click here for a very detailed CMS summary. CMS estimates that aggregate payments to Inpatient Rehab Facilities will increase in FY15 by $180 million, or 2.4 percent, relative to payments in FY 2014. Click here for a summary of the regulations. The inpatient psych rules apply to freestanding psychiatric hospitals and psychiatric units of acute care hospitals or critical access hospitals. Under the final rules issued last week, FY15 payments to IPFs are estimated to increase by 2.5. Click here for a summary. CMS estimates that aggregate FY15 payments to SNFs will increase by $750 million, or 2.0 percent. Click here for a summary.

Hospital EHR Adoption Booming; MU Stage 2 Lagging

Hospitals and healthcare systems made significant progress in adopting electronic health records in 2013, according to studies published in Health Affairs, but have a long way to go to meet all the criteria for Meaningful Use Stage 2 and the implementation of health information exchanges. The adoption of EHRs at hospitals had a sharp spike in 2013. 58 percent of hospitals now have at least a basic EHR system, and most are able to meet some of the requirements under MU Stage 2. Click here for the report. Click here for the second study that focuses on HIE adoption among physicians, which remains very low.

Cerner to Buy Siemens Health Services

Cerner Corp. is buying Siemens Health Services, the German company’s health IT unit, for $1.3 billion cash. Together, the two companies have 20,000 associates in more than 30 countries, 18,000 client facilities, and $4.5 billion of annual revenue. Click here for the Forbes story that discusses what this may mean.

Seniors Not Participating In Part D Med Management

While CMS estimates that about a quarter of Medicare beneficiaries are eligible for medication therapy management because of their complex health needs, a new report out last week from Avalere Health found that only about 11 percent of Part D enrollees were part of that program in 2012. Click here for the two-pager.

New Draft Bill Targets Medicare Fraud, Waste, Abuse

The Chairman of the Ways and Means Health Subcommittee, Rep. Kevin Brady (R-TX) has released a discussion draft of a bill aiming to cut fraud, waste, and abuse from Medicare and providers are much of the focus. The draft includes provisions like removing Social Security numbers from Medicare cards and educating providers to help them make the program more efficient. A MedPAC report that said $44 billion of the $574 billion Medicare paid to providers in 2012 was lost to improperly paid claims or fraudulent activity. Click here to review the draft bill, which is 58 pages and contains many changes.

States Readying Exchanges with Court Decisions in Mind

As states ready their health insurance exchanges for a second open enrollment season in November, many have more to worry about than the computer glitches that plagued them last year. Last month’s federal appeals court ruling that said language in the Affordable Care Act allows only state-run exchanges to give consumers tax credits to help pay for policy premiums is spurring several states to solidify their state-based credentials. Click here for the story.

Price Transparency Issues Continue

The lack of transparency in health prices partially explains why there is huge variation in what doctors charge for the exact same service, according to a report out last week. An appendectomy can cost anywhere between $15,000 and $186,000. Doctors don’t usually feel the need to make their prices competitive when shoppers can’t see them. Click here for more.

$106 Million Awarded for Home Visiting Program

HHS announced last week $106.7 million in grant awards to 46 states, D.C., and five jurisdictions as part of the Maternal, Infant, and Early Childhood Home Visiting Program. These funds will allow states to continue and expand voluntary, evidence-based home visiting services to women during pregnancy and to parents with young children up to age five. Click here to see who got the money.

Gluten-Free Regs Now In Effect

Gluten-free must now mean gluten-free, according to FDA regulations that took effect last week. This is really good news for persons with Celiac disease, according to physicians. Click here for the story.