Hospitals Paying Significantly Less to RACs

Payment recoupments as a result of the work of recovery audit contractors (RACs) dropped dramatically last year, likely the result of pushback from the hospital sector, according to the Wall Street Journal. And they’re about to drop even more. RACs recouped $2.4 billion last year, down more than a third from the $3.7 billion recovered in 2013. Moreover, the number of Medicare claims RACs can review will shrink dramatically in January to 0.5 percent of all claims paid during a 45-day period, compared to the current 2 percent. That’s according to a recent technical direction letter from CMS. Click here for the story.


Congress Aggressively Pursues Failed Co-Ops

The GOP blamed Democrats and Democrats pointed fingers at the Republicans as two different congressional hearings began their dive into the failed health care Co-Ops. Witnesses tried to explain what has happened. CMS’s COO, Dr. Mandy Cohen, pointed to the uncertainty of customer mix and lack of brand name as reasons for the failures – 12 of 23 Co-Ops won’t be providing insurance next year. Subcommittee chairman, Rep. Kevin Brady R-TX), lamented that taxpayer dollars should not have been at risk in a program destined to fail. Democrats pointed to the Republicans as the cause of the co-op problems for lack of funding. Click here for the NY Times report.

  • In the Energy and Commerce Subcommittee hearing, multiple Co-Op operators pointed to unexpectedly high claim filings, lack of federal funding, and inability to access capital as the major causes of failures. Click here for that story.

S&P Says CMS Risk Corridor Program payments Likely To Stay Small

U.S. health insurers, which recently learned that the federal government’s risk corridor program would only pay out a small fraction of what it owed them, aren’t likely to see the situation improve anytime soon, according to a new report from Standard & Poor’s. The government announced in early October that its 2014 payments to insurers would only total $362 million, though they were owed $2.87 billion. The ACA’s “three Rs”–risk corridors, risk adjustment and reinsurance–are meant to stabilize premiums by lessening the risk of operating in the individual markets, though some have characterized them as bailouts to insurers. Click here for the S&P report that includes data on the top 20 insurers.


Humana Market Withdrawals May Impact 100,000

Humana announced Friday the “discontinuance of certain products as well as market exits for 2016, with approximately 100,000 current members expected to be impacted,” though it notes most of these members will have other Humana plans to choose from. Humana says the move is driven mainly by the high benefit ratios associated with individual plans, which stems from product designs that attracted a higher-utilizing member base than it predicted when it priced its 2015 plans. Click here for the Humana announcement, which is embedded in its earnings report.


Physicians Slam Meaningful Use Regulations in Public Comments

A coalition of 111 medical societies led by the American Medical Association last week sent letters to Senate and House leaders voicing strong concerns with the Obama administration’s decision to “move ahead with implementation of Stage 3 of the Meaningful Use program despite the widespread failure of Stage 2.” Stage 3 requirements are “inconsistent with the goal of promoting better coordinated and high quality patient care,” the letters argue, and Stage 2 has “largely been a failure, with only 12 percent of physicians successfully participating and little improvement in data exchange across care settings.” Click here for more.


Smaller Hospitals May See More Negative ICD-10 Impact

The press has published many positive overviews about the ICD-10 transitions of the country’s largest and/or most advanced hospital systems since the October 1 go-live. However, for many smaller community hospitals and health systems, which were not as well prepared, the story may be a little different. Though it is too early to measure revenue cycle impacts, the challenges that some hospitals are having may equate to financial disruption by the end of the year. Click here for the story.


CMS Targets States, Pharma for Hep C Drug Restrictions

CMS last week told states that it suspects they are unreasonably restricting coverage of hepatitis C drugs and separately asked the manufacturers of those drugs how to make their products more affordable. In fact, CMS declared that state Medicaid programs may be violating federal law by denying patients expensive hepatitis C medications. To read the CMS letter to states, click here. To read the letters CMS sent to the manufacturers, click here. The Wall Street Journal has more on the issue here.


Chicago Health System, Blue Cross Team Up To Expand Market Share

The largest health system in Chicago is teaming up with the area’s largest insurer in a deal, though not unique in the nation, may be another sign of changes to come. Advocate and Blue Cross are now working together to insure that Obamacare enrolls choose them over their competitors. It also may mean that the other providers will have to move faster to merge with others to grow their market share. Click here for the story.


More Pioneer ACOs Drop Out

Two more Pioneer ACOs are leaving the program – this time, two in the Boston area, which leave three Pioneers in the same region. The two that dropped are likely to become CMS’ Next Generation ACOs that are expected to be announced any day. 15 Pioneers have left the program, which started with 27. Click here for more from the Boston Globe.


Survey Says Epic Lowest Rated in ED

Epic, one of the top electronic health record vendors, scooped up the unenviable distinction of being the lowest rated major EHR for usability and interoperability within the emergency department setting, according to the latest Black Book poll. With distinctive workflow and information accessibility requirements, emergency department physicians were deeply unsatisfied with being forced to use more genetic EHR functionalities geared towards broader care settings, the survey found. These technology shortfalls are contributing to ED congestion, low consumer satisfaction scores as emergency departments see significant increases in patient visits. Click here for the Black Book report.


California Hospitals Could Save $10 Billion a Year Better Managing Inpatients: Report

California hospitals may be wasting $10 billion a year on excessive patient stays despite the state’s reputation for tightly managed care, according to a new analysis of state data. The report finds that inpatient costs at 275 hospitals statewide could be reduced by 25%, yielding the $10 billion in savings among patients covered by Medicare, Medicaid and private health insurance. The biggest savings would come in the commercial insurance market, where hospital reimbursements are far higher than for government programs. Click here for the LA Times story.


West Virginia Hospital Merger Targeted by FTC; Hospitals Fight Back

Federal antitrust officials last week filed a complaint alleging the deal by Cabell Huntington Hospital to acquire nearby rival St. Mary’s Medical Center would create a “near monopoly” in four West Virginia and Ohio counties for acute-care services and outpatient surgery. The hospitals would have 75% of the market share, the FTC said in a news release. Click here. Cabell Huntington Hospital and St. Mary’s Medical Center’s top administrators said they remain committed to Cabell’s plans to acquire St. Mary’s despite the Federal Trade Commission’s announcement that it will try to block the move. Click here.


Medicare’s Use of Telehealth Is Very Small: New MedPAC Data

As the demand for telehealth services grows, Medicare continues to lag behind the commercial marketplace in providing these services, according to a MedPAC analysis released last week. Total Medicare spending on telehealth last year was $14 million. Only 68,000 beneficiaries received telehealth services – out of tens of millions of Medicare eligible patients. The most common physician service was Evaluation and Management (66% of the total) with psychiatric second at 19 percent. Click here for the MedPAC analysis.


Government Says Hospitals Making Substantial Progress fighting HACs: AHRQ Report

Efforts to fight hospital-acquired conditions are succeeding, with the number of cases falling by 17 percent between 2011 and 2013, according to a study published this week by the Agency for Healthcare Research and Quality. Rates nationally fell from 145 HACs per 1,000 patient discharges to 121, resulting in a cumulative total of 1.3 million fewer HACs in 2011, 2012 and 2013 than would have occurred had HACs stayed at the 2010 level. The report tracked 21 adverse events including patient falls, hospital-acquired infections and complications such as pressure ulcers. This reduction in HACs cut in-hospital deaths by about 50,000 and saved $12 billion in care costs. Click here for the study.


Feds Seeks New Primary Care Physician Payment Formula, Could Include Capitation

Primary care physicians could see a new payment structure from Medicare that includes some capitation and add-on payments if an analysis from MedPAC continues on its current path. MedPAC advises Congress on Medicare payment policy. The Primary Care Incentive Program gives primary care compensation a 10% bonus to eligible primary care providers for every patient visit — but it expires at the end of 2015. Last week, the commission looked at two potential replacements for the PCIP. The first model continues full fee-for-service payments as well as a per-beneficiary payment funded by a reduction in payment for services other than primary care visits. The second model called “partial capitation plus” also includes this add-on payment. But the traditional fee for service payment would also be redistributed and a larger share of the Medicare payments to a primary care provider would be paid on a per-beneficiary basis. Click here to see MedPAC’s very good slide presentation. Click here for the news report.


Number of Uninsured Drop Substantially

The number of uninsured Americans continued to decline in the first six months of 2015. It went to 9 percent (or 28.5 million people) – a decrease of 2.5 percentage points from the 2014 uninsured rate of 11.5%. Over seven million fewer persons lacked health insurance coverage in the first 6 months of 2015 when compared with 2014. Among children under age 18 years, the percentage with private coverage increased from 52.6% in 2013 to 56.0% in the first 6 months of 2015, reversing a 14-year trend of declining rates of private coverage. To read the report from the CDC, click here (some state-specific data is available.)


CMS Wants Input on Readmission Measures for Post Acute

CMS is seeking public comment until next Monday, November 16, to help in the development of potentially preventable readmission measures as required by the IMPACT Act, which became law last year. CMS is looking to develop, maintain, re-evaluate, and implement outcome and process quality measures that are reflective of quality care for post acute settings. For more information or to comment, click here and scroll down a couple of pages.


Post Acute Bundles Are Just the First Step: MedPAC

The commission that advises Congress on Medicare payment policies, MedPAC, last week said that a unified post acute payment system should be seen as a first step because it would not completely eliminate perverse incentives for the provision of low-quality, rushed, or unnecessary care. Multiple companion policies might accompany a unified PAC PPS, such as value-based purchasing/bundled care episodes, Medicare spending per-beneficiary (MSPB) resource-use measures similar to the current hospital payment system, and policies on readmissions and transfers. Click here for to see the MedPAC slide presentation.


Senate Committee To Release Chronic Care Bill Soon

America’s rapidly aging population and the projected costs of millions of people struggling with multiple chronic illnesses may spawn bipartisan legislation “sooner rather than later,” staff experts who serve the top Republican and ranking Democrat on the powerful Senate Finance Committee said last week. In a national political environment in which health care and Medicare policies are assumed to divide the two parties, aides to Finance Committee Chairman Orrin Hatch and his Democratic colleague, Sen. Ron Wyden, struck a decidedly collaborative note during a discussion hosted by RealClearHealth. Click here for the report.


Pharma Pushes Back on Pricing Issues; Cost of Generics Skyrocket

Faced with nationwide rebukes and attacks from presidential candidates over drug prices, Big Pharma is confronting a public storm unlike any in years. In response, according to lobbyists, congressional aides, and pharmaceutical executives, the industry is not only aggressively criticizing what it perceives as bad actors but also deliberating internally how to rehabilitate the industry’s image. Click here for the report.

  • The cost of generic drugs is exploding, according to new report. Insurers say they are seeing huge cost increases for some commonly used generic drugs, with prices surging 15, 25, and even 75 times what they were just two years ago. Click here for the story.
  • The Senate is launching a bipartisan investigation on the cost of pharmaceuticals. Click here for the announcement.

CDC Challenges Providers on Blood Clots

The CDC has launched a challenge to healthcare providers to prevent healthcare-associated blood clots. The goal is to find, honor and recognize hospitals, hospital systems and managed care organizations that have implemented innovative and effective prevention strategies or interventions as preventing healthcare-associated venous thromboembolism (HA-VTE) is a national hospital safety priority. Seven of the highest scoring organizations will be recognized as Prevention Champions and will receive a cash award. Click here for the contest details from the CDC.


Study: Paying Patients, Docs To Improve Medication Adherence Doesn’t Work

Paying patients to take their medicines more consistently doesn’t translate into better adherence – and neither does paying their physicians, according to a new study in JAMA. But giving both the patient and the doctor financial incentives to stay on track in monitoring and controlling cholesterol levels does lead to slightly better outcomes. Those results have implications for federal and private sector efforts to pay doctors based on the quality of care they provide and not for the number of patients they treat. Click here for the study.


Study Identifies New Obesity Reduction Strategy

A new study by Harvard researchers determined that imposing a penny-an-ounce tax on sugar-sweetened beverages, eliminating the tax deduction for unhealthy food marketing to kids and enacting nutrition standards for school food would prevent childhood obesity in a cost-efficient way. Looking at seven different obesity policy interventions, including better access to bariatric surgery for adolescents and calorie labeling at restaurants, the researchers found that three policies racked up health care savings exceeding the cost of implementing the policies. Click here for the study.


Medical Tourism Heating Up in Asia

Hospitals and hotels in Asia are partnering up to offer an array of health and wellness services while promoting medical tourism, according to a report in Forbes. In 2014, Thailand had 3.1 million inbound medical travelers and was listed in the top 12 countries for medical tourism, according to the Global Wellness Institute. Click here for the story.