The Agency for Healthcare Research and Quality plans to survey 300 clinicians to identify and understand the barriers that Medicaid providers encounter in deploying and becoming meaningful users of electronic health records. Once the data is collected, AHRQ will develop technical assistance and support for putting EHR systems into operation in provider practices or upgrading existing systems. The project will run over two years, according to an announcement in the June 3 Federal Register. Furthermore, the information from the focus groups will also inform the development of stage 2 and 3 of meaningful use criteria. The agency will also separate up to 89 of the clinicians into 13 focus groups based on whether they have adopted an EHR and those who have not and one group of private practice dentists. AHRQ will also consider factors in their decision to adopt EHRs or not.
In the last two years, Heart Check America has made free heart scan sales pitches to tens of thousands of Americans in five states, bringing in about $30 million in sales revenue, according to its manager, David Haddad. But recently, the company has come under fire from patients, regulators and medical experts. In scores of consumer complaints, Heart Check America clients have accused the company of using pressure sales tactics inappropriate for a healthcare company. Doctors have lashed into the company for marketing scans to those who most likely do not need them – people under 40 who don't smoke, aren't overweight, and have no family history or symptoms of heart disease. Even for patients at risk of heart disease, some experts say, there is no medical evidence that the benefits of the tests outweigh potential dangers. Scans can result in false positives, leading to unnecessary treatments that are invasive and risky, said Gilbert Welch, MD, a Dartmouth Medical School professor who studies the problems created by attempts at early disease detection.
One of the less tragic but still serious losses in the Joplin tornado were the medical records scattered across neighboring towns and counties. The tornado's path included St. John's Regional Medical Center, where five patients and one visitor died. The heavily damaged hospital will be closed indefinitely. The circumstances of the deaths in the hospital are still being investigated. Meanwhile, medical records and X-rays have been found as far as Springfield, 75 miles away. The information wasn't lost, because the hospital had joined its parent company Mercy's electronic medical record system just three weeks earlier to back up the paper records. Those servers were not damaged by the tornado. Still, identifying information found on the paper records could include Social Security numbers, addresses, dates of birth and phone numbers.
The cost, physician practice size, and lack of technical resources still present barriers for small healthcare providers in adopting electronic health records and participating in the meaningful use incentive program. Solo practitioners and small practices find it difficult to locate a lender willing to offer them an unsecured loan, said Sasha Kramer, MD, a solo practitioner dermatologist in Olympia, WA. Others who try to finance their electronic health record system with the vendor have no leverage in negotiating terms because of their limited market share. Kramer was among public and private health IT experts and physicians who spoke at a June 2 hearing of the House Small Business Committee's health care and technology subcommittee.
This past year has resulted in some new trends related to ambulatory surgery center (ASC) development. These have included reimbursement changes, proposed healthcare reform legislation particularly in the form of accountable care organizations (ACOs), and an increase in hospital acquisition of ASCs. There is speculation that there will be consolidation of ASCs given these recent trends. Undoubtedly, competition will increase and there will be continued pressure to enhance patient satisfaction as well as ensuring that the needs of physicians performing surgical cases in ASCs are being met by the owners of those organizations.
What physicians want
What accounts for physician satisfaction in an ASC? The answer to this question, which is multi-factorial, should not be rhetorical in nature. Factors of importance to physicians include, but are not limited to, equity opportunities, tangible participation in the governance of the facility, evidence of expertise in scheduling, efficiency related to throughput, adequate staffing, appropriate mix of cases that can safely and profitably be performed in an ASC, opportunities to participate in the selection of surgical equipment, and a reasonable complement of surgeons who are experienced and capable of functioning effectively in this venue.
Considering a joint venture
Because of anticipated 2012 MedPAC reimbursement recommendations, it appears that ASC payments will remain relatively flat in the near future. The challenge, however, for ASCs will be their ability to deal with value-based purchasing initiatives while maintaining current reimbursement levels as a result of being required to demonstrate the quality of services they provide.
With hospitals and physicians struggling with declining reimbursements, both entities need to consider the value of establishing joint venture ASCs. The likelihood is that both physicians and hospitals can also benefit from having as a joint venture partner a professional ASC development and management company that has an established track record and infrastructure. Although hospitals and ASCs have historically competed for facility fees, as reimbursement continues to decline, there will be incentive for these parties to integrate.
Benefits to physicians and hospitals
Why would physicians be attracted to an ASC? Clearly, there are financial benefits that can be attributed to ownership. In addition, the lack of emergency cases performed in this setting improves the surgeons’ quality of life by enabling them to perform their work in a timely manner, thereby opening up time to address other clinical or personal needs. Further, an efficient ASC environment provides a fast turnaround time between cases that is difficult to match in a hospital setting. Convenience increases for both physicians and patients in an ASC. Patients also tend to appreciate the non-institutional ambience of an ASC.
Conversely, hospitals increasingly will become attracted to ASCs particularly when they find that their operating rooms are at, or near capacity. Adding capacity through taking an ownership position in an ASC is generally a more expedient, economical, and pragmatic approach than simply trying to expand the current capacity in the hospital setting. Such a strategy may also augment the institution’s ACO plan if it is contemplating proactive measures.
The ASC will offer a viable profit center and a cost effective venue for ambulatory cases. In addition, progressive hospitals will seize the opportunity to attract new surgeons and retain high-value physicians who may be inclined to leave due to multiple factors, e.g., lack of equity opportunity, inability to procure adequate block time or simply available time on the OR schedule, inefficiencies ranging from scheduling to turnaround time and concerns over available and experienced nursing, anesthesia, and ancillary personnel. The hospital can also use the ASC as a strategy to increase market share and expand its service area. Those hospitals that may own an ASC, even if it is one that is faltering, will often find that changing the structure and bringing in other partners, both physicians and a competent ASC development and management company, will not only serve to achieve a successful turnaround, but will validate the strategy.
Concessions and objectives
In any successful joint venture ASC, both the hospital and physicians need to be amenable to considering some sacrifices before embarking on this endeavor. For example, hospitals have to be realistic in relinquishing some control over clinical and operational issues. Both parties should recognize that the objectives should be to deliver superior surgical outcomes, achieve optimal patient and physician satisfaction, maximize all efficiency and scheduling practices while establishing and enforcing proven benchmarks, and overall secure a healthy return-on-investment for all of the joint venture partners.
Particularly in those geographic markets where the hospital has the ability to command higher reimbursement rates from the payers compared to what the physicians or ASC may be able to procure on their own, physicians may need to relinquish majority interest in the ASC in order to access hospital contracts. The value of having an experienced and trusted ASC development and management company as one of the partners is that it can serve as an impartial intermediary in aligning the long-term interests of all parties. This group can also neutralize and or mediate through internal politics that can be disruptive and in some cases threaten the viability of the project.
By operating as a separate business with its own mission, governance structure, and financial and accounting systems, neither the hospital nor the physicians will have to enter into what have traditionally been contentious negotiations with either side. When decisions, for example, have to be made relative to investment in new medical technology/equipment or other possible capital needs, the owners of the ASC consisting of all three parties will base their decisions on the results of the cost-benefit analyses that prove best for the venture rather than for the direct benefit of only one of the partners.
Keys to success
A key factor contributing to an ASC’s financial success is based on its ability to effectively manage labor costs. If the ASC is managed strictly by the hospital, the current hospital staffing structure would likely be applied to the ASC. Because ASCs are reimbursed significantly less than hospital outpatient departments, they are not afforded the luxury of over-staffing or down-time between cases. Management by an outside entity can alleviate this problem. In addition, separate human relations policies apart from the hospital will avoid confusion within the labor force.
It is also advisable that the ASC not be bound by any contractual obligations it may have through the provision of services such as anesthesia. It is conceivable that the all of the parties may agree to have the anesthesia provider of the hospital be selected to work in the ASC, but if this decision is made, it should be based on independent and thoughtful due diligence, on behalf of all partners, rather than a contractual obligation.
A joint venture ASC will incentivize all of the parties to openly evaluate the merits of introducing certain specialties and procedures and most importantly expand the level and mix of physician participation as well as the referral base. The expectation is that the parties should use the opportunity to also aggressively recruit physicians who may not currently be affiliated with the hospital. This component will significantly contribute to the growth of market share. An ASC development and management company will likely have greater success to attract “non-admitting” surgeons who otherwise may be more reluctant to respond simply to overtures by the hospital or physician group.
An additional advantage of the joint venture model is that there will be greater certainty that the facility and specifically the number of ORs will be “sized” appropriately, based on the projected volume and types of cases that will be performed. It is not infrequent that some physician groups or even hospitals may overstate projected volume based on optimism or inaccurate information provided to them. The third partner, i.e., the ASC development and management company, can provide the objective analytical validation that will mitigate against false assertions. Failure to rigorously scrutinize the projections will inevitably have profound and dire financial consequences.
Shared objectives
Increasing shareholder value should be the predominate concern of the joint venture. This can be accomplished though implementing different programs and services designed to lower the cost of the provision of care. Success will only be realized when the partners share in the risks and rewards associated with ownership. At different intervals, opportunities may present themselves for the partners to sell a portion or the entire ASC. The benefit of an ASC development and management company partner is that it can work on behalf of the partnership to maximize the value of the venture by expediting the analysis and due diligence that will help determine whether there is any benefit to such overtures.
Given the current and anticipated economic and regulatory environment, progressive hospitals and physician groups will increasingly see the benefit of collaborating through such structures rather than attempting to grapple separately with these challenging market conditions.
Allan Fine is senior vice president and chief strategy and operations officer for The New York Eye and Ear Infirmary in New York City. Brandon Frazier is vice president of development & acquisitions for ?Ambulatory Surgical Centers of America in Hanover, MA.
Provider-preventable conditions (PPC), including health care-acquired conditions (HCAC), are now subject to payment adjustments under the Medicaid program, according to the final rule released by CMS June 1.
The rule, "Medicaid Program; Payment Adjustment for Provider-Preventable Conditions Including Health Care-Acquired Conditions," implements provisions in the Patient Protection and Affordable Care Act requiring HHS to prohibit federal payment to states for specified HCACs, as well as additional conditions determined on a state-by-state basis.
"We found that 29 states do not have existing HCAC-related nonpayment policies," according to the final rule. "Most of the 21 states that currently have HCAC-related nonpayment policies identify at least Medicare's HACs [hospital-acquired conditions] for nonpayment in hospitals.
"However, it is important to note that at least half of the existing policies we reviewed exceeded Medicare's current HAC requirements and policies, either in the conditions identified, the systems used to indicate the conditions, or the settings to which the nonpayment policies applied."
CMS introduces the term PPCs in the rule, which consists of two categories: HCACs and other provider preventable conditions (OPPC). OPPCs would be those additional conditions identified and approved by states that are not found on the list of HCACs, which are included on pages 20 and 21 of the final rule. This also allows states to expand beyond the inpatient hospital setting HCACs.
"We believe, and confirmed through public comment, that incorporating Medicare's HACs in Medicaid's policy is inherently complex because of population differences across programs," according to the rule. "We fully understand that the HACs developed for Medicare's population will not directly apply to various subsets of Medicaid's population. While we have established Medicare as a baseline, we understand that states will, through their payment policies, appropriately address these differences."
As with the Medicare HAC program, there will be no payment reductions for those conditions that existed prior to treatment by the provider, according to the rule.
In addition, payment reductions are limited to only those PPCs that would otherwise result in a payment increase and those that the state can "reasonably isolate for nonpayment the portion of the payment directly related to treatment for the PPC."
In the rule, CMS notes that while the point of the Medicaid PPC payment adjustments is to improve quality of care, it does expect to realize cost savings on a state and federal level.
The federal government expects to save approximately $4–5 million annually between 2012–2015, with states experiencing an additional savings of $3–4 million each fiscal year, leading to a total savings of $35 million through 2015.
"These steps will encourage health professionals and hospitals to reduce preventable infections, and eliminate serious medical errors. As we reduce the frequency of these conditions, we will improve care for patients and bring down costs at the same time," CMS Administrator Donald M. Berwick, MD, said in a June 1 press release.
Due to the fact that the majority of hospitals already have programs in place to reduce the occurrence of Medicare HACs, CMS does not believe the cost of implementing a similar program for Medicaid HCACs will be significant.
The effective date of the rule is July 1, 2011; however, CMS is delaying compliance action until July 1, 2012.
Editor's note: Access the display copy of the final rule here. The proposed rule was published in the Federal Register February 17.