WEEKLY E-BULLETIN


Leapfrog Releases Latest Hospital Safety Scores

New data released last week from The Leapfrog Group provides updated patient safety ratings for more than 2,500 general hospitals. The Fall 2014 update, which assigns A, B, C, D and F grades to hospitals based on their ability to prevent errors, injuries and infections, shows that while hospitals have made significant improvements when it comes to implementing processes of care and safe practices, performance on outcomes lags behind. Of the 2,520 hospitals issued a Hospital Safety Score, 790 earned an “A,” 688 earned a “B,” 868 earned a “C,” 148 earned a “D” and 26 earned an “F.” Click here to see how your hospital scored.

CMS Finalizes Major Changes to Regs Governing Payments to Various Providers

  • Outpatient Prospective Payment System: Overall outpatient Medicare payments are estimated to increase by 2.3 percent for Calendar Year 2015. The increase is based on the projected hospital market basket increase of 2.9 percent minus both a 0.5 percentage point adjustment for multi-factor productivity and a 0.2 percentage point adjustment required by law and includes other payment changes, such as increased estimated total outlier payments.
  • Comprehensive Ambulatory Payment Classifications: C-APCs is where payment for the comprehensive service (primary service and all related items and services) was packaged into a single payment. This is like an inpatient DRGs for outpatient services and it is a major change. CMS delayed implementation of this policy to CY 2015 to provide the agency and hospitals with more time to evaluate and comment further on the policy. 25 APCs were created.
  • Ambulatory Surgery Centers: For CY 2015, the CPI-U update is projected to be 1.9 percent. The multi-factor productivity adjustment is projected to be 0.5 percent, resulting in an MFP-adjusted CPI-U update factor of 1.4 percent for CY 2015.
  • Click here for an expanded summary from CMS.
  • CMS is also making a number of changes to the quality reporting requirements for HOPDs and ASC. Click here for a CMS summary.

Medicare Home Health Agencies:

  • CMS projects that Medicare payments to home health agencies in CY 2015 will be reduced by 0.30 percent, or $60 million. CMS is also finalizing three changes to the face-to-face encounter requirements for episodes beginning on or after January 1, 2015. These changes were designed to reduce administrative burdens and provide home health agencies with additional flexibility in developing individual agency procedures for obtaining documentation supporting patient eligibility for Medicare home health care. Click here for a CMS summary.

Major Changes Made to Physician Fee Schedule:

  • CMS is increasing payments for 3D mammography over 2D mammography using add-on codes.
  • Chronic Care Management payments for non face-to-face care are set.
  • CMS is adding the following services that can be furnished under the telehealth benefit: annual wellness visits, psychoanalysis, psychotherapy, and prolonged evaluation and management services.
  • Numerous changes to the Physician Payment Sunshine Act were also created.
  • Click here for a complete summary.

More changes made to CMS’ Value-Based Payment Program:

  • The final CMS rule includes policies for implementing the Value-Based Payment Modifier that would adjust payments to physicians, physician groups, and other eligible professionals based on the quality and cost of care they furnish to beneficiaries enrolled in the traditional Medicare Fee-for-Service program. The performance on quality and cost measures can translate into payment incentives for providers who provide high quality, efficient care, while providers who underperform may be subject to a downward adjustment. Click here for a detailed summary.
  • CMS modified rules governing end stage renal disease, DME, prosthetics, orthotics and supplies. Click here for a summary.
  • CMS also made changes to the Physician Quality Reporting System, hardship exemptions for EHR adoption, and other quality reporting requirements — such as those for ACOs. Click here for that summary.

CMS Updates RAC Settlement Deal for Hospitals

CMS has issued an update on its “68 percent” settlement process with providers regarding disputed short-term hospital claims. Short-stay hospital claims have been a sore spot for disputes, with some RACs denying them because they claim the care should have been rendered in the significantly less expensive outpatient setting. CMS now states that providers may request a “potential list” of claims that may be eligible under the settlement before deciding to move forward, according to an extensive “frequently asked questions” section posted on the CMS website. Click here for the CMS document – changes are noted in red.

Survey: Half of Hospitals to Take RAC Deal

According to a survey released last week, just more than half of hospitals are planning to accept the CMS RAC appeals settlement offer. Click here for the report. The Medicare Hearings and Appeals Office also said it is making progress in reducing the claims backlog. The assertions were made during last week’s appellant forum. Click here.

Changes to ACO Regs Likely Next Year

New regulations creating incentives for Medicare ACOs are not likely to be released by CMS until next year, according to various reports. However, CMS was hinting that they are considering allowing ACOs to offer certain incentives to keep patients in network and prospectively assigning patients. New ACO research was published in the NEJM pertaining to performance. Click here for an excellent summary.

IRS Rules Help ACOs

The IRS last week released Notice 2014-67, which establishes more favorable safe harbors for types of service contracts and other arrangements using property financed with tax-exempt bonds. Participation by hospitals or other health care organizations in Accountable Care Organizations under the Medicare Shared Savings Program will not result in private business use of tax-exempt bond proceeds, according to the interim guidance. The guidance also expands the safe harbor for five-year general management contracts to allow compensation other than compensation based on net profits or revenues, and specifically authorizes the use of quality performance standards in accordance with MSSP. Click here for the rules.

SEC, FBI Investigate Insider Trading at CMS

The Securities and Exchange Commission is pursuing the three overlapping insider-trading investigations involving CMS, according to a report in The Wall Street Journal. One of the cases involves the FBI. Together they represent one of the broadest investigations into leaks of government information to Wall Street. Investigators are looking at whether two policy-research firms and a former CMS official in the business of providing information to investors were the middlemen between the government and investors, according to the people with knowledge of the probes. Click here for the report.

Hospital Associations Appeal to Genentech on Cancer Drugs and 340B

Six national hospital associations have sent a letter to Genentech urging the company to reconsider their recent decision to remove three lifesaving cancer drugs –Avastin, Herceptin and Rituxan – from the traditional distribution channel in favor of specialty distributors (effectively removing them from 340B discounts). Click here for the letter. Meantime, the National Association of Medicaid Directors says Congress should examine the feasibility of instituting price controls for expensive hepatitis C medications and other similarly-priced specialty drugs targeting large patient populations. Click here for their letter to Congress.

More Students in Medical School than Ever Before

Applications to medical school rose 3.1 percent in 2014 while enrollment increased 1.4 percent to an all-time high of 20,343, the Association of American Medical Colleges announced last week. Interest was particularly strong in the Hispanic population, where the number of applicants increased 9.7 percent, to 4,386. The number of applications by African American candidates rose by 3.2 percent. Click here for more details.

Epic’s Next Steps Reviewed

Epic is the big winner in the federally subsidized effort to shift American medical care from paper to electronic records, according to many analysts. The federal launch of a $27 billion incentive program in 2009 touched off a scramble to modernize health systems in the name of improved efficiency and better care. Epic cleaned up in that gold rush. Today, one out of two Americans have their medical records on Epic software, and revenues at the fast-growing privately held company hit $1.7 billion in 2013. But what’s next for the company. Click here for the story.

Obamacare Insurers Expecting Big 2015 Customer Growth

U.S. insurers planning to sell 2015 Obamacare health plans expect at least 20 percent growth in customers and in some states anticipate more than doubling sign-ups, according to reports last week. In interviews with Reuters, half a dozen privately held and non-profit health insurers around the country say they are expecting this growth based on interest from potential customers they are hearing about through their call centers, sales forces and brokers. Click here for the story.

Lawmakers Push Bill to Keep Seniors in Medicare Advantage Plans from Losing Doctors

Rep. Rosa DeLauro (D-CT) and Sen. Richard Blumenthal (D-CT) are working to get cosponsors for their legislation designed to protect seniors with Medicare Advantage plans from losing their doctors mid-year due to network narrowing, and plan to push for a vote on the measure during the upcoming lame-duck session. Click here for a summary of their bill.

Study: Narrow Networks Not the Only Way to Get Lower Premiums

A narrow network plan isn’t the only way to get lower premiums yet still have access to highly ranked hospitals, according to a study released last week. The Urban Institute found that the relationship between network size and cost does not always hold. In the six cities examined (Denver, Baltimore, New York, Portland, Providence and Richmond), some broad networks have low premiums and some narrow networks have high premiums. Click here for the study.

Business’ Health Benefits Costs Holding Steady

The cost of health insurance benefits for private industry grew 2.6 percent during the 12-month period ending in September, compared to 2.7 percent the previous year, according to data released Friday by the Bureau of Labor Statistics. In the latest Employment Cost Index, total seasonally adjusted compensation increased at a rate of 0.7 percent for all workers between June and September. Total compensation grew 0.6 percent for the health industry overall and 0.5 percent for hospitals. Click here and here for details.

Massachusetts’ Unique Health Plan Lowers Costs, Improves Quality

A first-of-its kind health plan that rewards doctors for keeping patients healthy, rather than just doing expensive procedures, lowered health care spending and improved the quality of patient care for the fourth straight year, according to a new study. The analysis published in the New England Journal of Medicine shows spending for patients in Blue Cross Blue Shield of Massachusetts’ Alternative Quality Contract grew 10 percent slower than for patients in traditional plans. Click here for details.

Whistleblower Suit Claims MA Fraud

A new whistleblower lawsuit accuses a California health care firm of diagnosing “false and fraudulent” medical conditions that several Medicare Advantage plans allegedly used to overcharge the federal government by $1 billion or more. The suit was filed by Anita Silingo, a former compliance officer for Mobile Medical Examination Services, Inc., or MedXM. The Santa Ana, California-based firm sends medical professionals to the homes of Medicare Advantage members to assess their health. Click here for the report.

CDC Releases Ebola Video, Guidelines

The CDC has released several new Ebola-related resources, including a video overview of the agency’s new recommendations for the use of personal protective equipment with patients with suspected or confirmed Ebola. The 13-minute video features a demonstration of how to put on and safely remove one type of PPE. Click here for the video. Click here for CDC’s written recommendations.

Texas Republicans Want Ebola Readiness Answers from HHS

Texas Republicans are asking federal health officials why billions of dollars spent in recent years on disaster preparedness and other public health measures still left a system that made so many mistakes when the first case of Ebola was encountered in Dallas. Sens. Ted Cruz, John Cornyn and more than two dozen House Republicans made their case in a letter to HHS Secretary Sylvia Burwell. Click here for the letter.

Analysis: Biggest Obamacare Winners Identified State-by-State

The biggest winners from the Affordable Care Act include people between the ages of 18 and 34; blacks; Hispanics; and people who live in rural areas, according to a research report released last week. The areas with the largest increases in the health insurance rate, for example, include rural Arkansas and Nevada; southern Texas; large swaths of New Mexico, Kentucky and West Virginia; and much of inland California and Oregon. Click here for a very good interactive map of the states and analysis.

Recommendations Released on Long Term Care Reform

The increased longevity of the senior population means that millions more people are likely to need long-term care, especially as more seniors age into their 80s and beyond, when the rates of dementia and other cognitive and physical conditions increase. For example, the rate of dementia is less than 1 percent for people under 65 years old, but it rapidly increases to more than 40 percent for those over 85 years old. By 2050, the annual number of new cases of Alzheimer’s is projected to more than double. Click here for new reform recommendations for long term care released last week by the Center for American Progress.