The White House and congressional leaders are facing new resistance on Capitol Hill to rapid movement on healthcare legislation amid concerns about the cost, the political price for raising taxes, and an emerging dispute about whether abortions should be covered. In the Senate, a group of centrist Republicans and Democrats issued a plea for delay.
A plan to end a program that would cut government payments to doctors is emerging as the flash point in the debate over whether President Barack Obama's effort to overhaul the health system would increase the federal budget deficit. The proposal was crucial to winning support from the American Medical Association, but it has also made it tougher to argue that the health overhaul would pay for itself, according to the Wall Street Journal.
The Department of Health and Human Services, HIPAA Privacy Rule’s enforcer, is hiring for two "Health Information Privacy Specialist" positions, HHS announced Thursday.
Does this mean stepped-up enforcement, as the new laws in the Health Information for Economic and Clinical Health (HITECH) Act suggest?
Probably not, one expert says.
According to the job description on www.usajobs.gov, the specialists, working out of the Office for Civil Rights (OCR), will be "responsible for reviewing, analyzing, implementing, promoting, or improving proposed or existing programs or policies needed to implement OCR's authority for ensuring compliance with the privacy of health information."
"I'm not sure the addition of these positions will actually strengthen OCR's enforcement activities," says Mary Brandt, MBA, RHIA, CHE, CHPS, president of Bellaire, TX-based Brandt & Associates, LLC. "In reviewing the job duties on the government's Web site, the focus of the new positions appears to be strictly in the policy arena."
OCR enforces the Privacy Rule and the confidentiality provisions of the Patient Safety and Quality Improvement Act through its Division of Health Information Privacy.
"We may see some additional clarifications or resources coming out of OCR when these positions are staffed, but they don't appear to be focused on complaint investigation or enforcement activities," Brandt says. "The job description notes that no travel is required, so these really look like desk jobs focused on policy analysis."
The Office of the National Coordinator for Health Information Technology issued a report May 18 that highlights how it will carry out HIPAA privacy and security regulations in the HITECH Act.
According to HHS, the federal government will spend about $24.3 million on privacy and security efforts, including:
Audits
Reports to Congress
Training for state attorneys general
Carrying out regulatory and enforcement requirements of HITECH
Nearly $10 million will do toward OCR and CMS audits. The former enforces the HIPAA Privacy Rule, the latter the HIPAA Security Rule.
Despite several industry groups' efforts to advocate for a moratorium on physician supervision requirements outlined in the 2009 OPPS final rule, CMS has stated that it will enforce its regulations for the remainder of the calendar year. The agency announced the news in its 2010 OPPS proposed rule released this month.
This means that hospitals must continue to ensure that supervising physicians are in the department in which the services are taking place, regardless of whether the services are on campus or off campus.
However, for 2010, CMS has proposed two sets of requirements for each of these scenarios. For on-campus supervision, the supervising physician or nonphysician practitioner must be in the hospital throughout the duration of the procedure, meaning in areas in the main building(s) of the hospital that are under the ownership, financial, and administrative control of the hospital; are operated as part of the hospital; and for which the hospital bills the services furnished under the hospital's CMS Certification Number.
On-campus supervising physicians or nonphysician practitioners must also be close enough to actually step in and assume providing the care, if necessary. In the 2010 OPPS proposed rule, CMS expressed concern regarding hospitals with large campuses, alluding to the fact that this requirement may be challenging for them to meet.
"This may be of particular concern to teaching hospitals and large medical centers where there are blocks or even miles between buildings," says Kimberly Anderwood Hoy, Esq., CPC, director of Medicare and compliance at HCPro, Inc. in Marblehead, MA.
In addition, the supervising physician or nonphysician practitioner can't be occupied with any other procedure he or she can't leave. This can be particularly problematic for ED physicians or surgeons who may be in the middle of a procedure or surgery that cannot be interrupted, Hoy says.
For an off-campus provider-based department, CMS states the physician or nonphysician practitioner must be in the off-campus department and immediately available to furnish assistance and direction throughout the performance of the procedure.
"What hospital executives need to understand is that quality of care may not require this level of supervision, but it's a technical coverage rule that they just have to follow," Hoy says.
The good news is that CMS proposes to expand the types of providers who can render supervision, making it potentially easier for hospitals to meet requirements.
CMS proposes to allow physician assistants, nurse practitioners, clinical nurse specialists, certified nurse midwives, and clinical psychologists to provide supervision of hospital outpatient therapeutic services when their licenses allow them to do so. Under current policy, only physicians and certain designated providers may provide the direct supervision of these services.
One caveat is that this expansion doesn't take effect until 2010.
What does this mean for hospitals that did not heed CMS' clarification regarding nonphysician practitioners in the 2009 OPPS final rule? Increased liability for potential RAC audits, Hoy says. "It's potentially a low hanging fruit. [RACs] don't have to look at the individual medical records for visits. All they have to know is that there's no physician staffed for a particular time period, and all services during that time are non-covered and can be denied," she adds.
Of note is that the permanent RACs can look back over a three-year period—and well before CMS issued formal clarification on this issue. Many hospitals may have mistakenly assumed that nonphysician practitioners could provide supervision for these services because the practice would generally be appropriate under state licensure laws, Hoy says. However, after CMS clarified this in the 2009 OPPS final rule, it is clear that nonphysician practitioners were not allowed to supervise.
"Hospitals may need to consider whether they need to consult legal advice about whether they have any repayment obligations," she says.
However, the proposed changes may offer hospitals some flexibility in terms of staffing. For example, if a hospital previously staffed a wound care clinic with a physician who performed supervision, the hospital now has several other options to consider.
"Now, they could have a clinical nurse specialist there who can specialize in wound care and who might actually be rendering services there," Hoy says, adding that the nurse would also be less of an expense to the clinic.
CMS will accept comments on the proposed rule until August 31, and the agency will respond to comments in a final rule to be issued by November 1. The proposed rule is available in the Federal Register.
After four months of negotiations, South Dakota-based Sanford Health and North Dakota-based MeritCare Health System have signed a letter of intent to merge as equals and create one of the nation's largest integrated healthcare systems.
Sanford and MeritCare officials say the unified system would strengthen healthcare in the five-state region that the two separate systems now cover by expanding services, education, research, and access to care. Both organizations hope to reach a final agreement and resolve regulatory issues by fall.
"As two proven leaders in integrated healthcare, our new system would make us think beyond our historic perspectives in caring for the thousands who come to us daily," says Kelby Krabbenhoft, Sanford president/CEO, who would become CEO of the new system if the merger is finalized.
"Becoming a larger system is simply building on the depth and range of two already large organizations. That reality is more humbling than it is anything else," Krabbenhoft says. "Together, we would grow and improve the delivery of medicine; deliver on the promise of results in research; and deliver on the promise of medical and health education."
MeritCare President/CEO Roger Gilbertson, MD, will retire at the merger's completion.
"Together, Sanford and MeritCare would bring the full potential of two integrated care systems to the benefit of patients, communities, employees, and physicians," Gilbertson says. "We would add value for patients, be proactive in healthcare reform, attract talent including doctors, nurses, health professional, and others that would significantly advance the service sophistication of our organizations and promote economic development in our communities."
Key principles in the proposed merger provide that:
The goal of both MeritCare and Sanford is to improve healthcare delivery in the Fargo and Sioux Falls service areas
All governing boards would have representatives from across the region
Physicians would have a strong voice in the new health system
There will be a commitment to maintain corporate offices in Sioux Falls and Fargo
The letter of intent agreement came after a study by Deloitte Consulting, LLP, that determined an affiliation would:
Create growth opportunities that would facilitate the development of regional centers of excellence and facilitate the development of health services not currently offered by either organization.
Provide a stronger financial position to pursue strategic initiatives through economies of scale and enhanced access to capital.
Enhance research opportunities, the ability to collaborate on medical education initiatives, such as training centers, fellowships, and residencies, as well as improve recruitment of physicians and other clinical personnel.
Accelerate expansion of health plan products into a broader market area, which would help mitigate the out-migration of patients to other markets.
"It would have the ability to increase the level and efficiency of healthcare delivery for a very broad population in large contiguous service areas and expand research activities and education programs for further health improvements," says Bruce Morgan, a principal at Deloitte Consulting, LLP.
MeritCare is North Dakota's largest health system and the state's largest private employer, with about 50 regional clinics in North Dakota and Northwest Minnesota.
Sanford Health includes Sanford USD Medical Center and a network of community hospitals and clinics in South Dakota, Southwest Minnesota, Northwest Iowa, and Northeast Nebraska.
As part of Premier, Inc.'s series from their blogging team of retired hospital CEOs and their views on healthcare reform, Kester Freeman, retired CEO of Palmetto Health in South Carolina, talks about high healthcare costs and the fact that those costs are making the United States less competitive with other countries.
No physician would develop a treatment plan for a patient without first spending time to accurately diagnose the patient's condition. Misdiagnosis can result in debilitating outcomes for patients, while wasting valuable time and money. In its diagnosis of what ails the U.S. healthcare system, the Obama administration is at great risk of making a costly mistake by proposing cuts in a program that successfully addresses a core problem—the lack of coordinated care.
No one can dispute the facts about our failing healthcare system. We rank behind 27 other countries with respect to life expectancy. We have higher rates of infant mortality, age-adjusted mortality from cancer and cardiovascular disease, and deaths from controllable causes. We are 20th among 21 comparable countries in child well-being, and are last in healthcare system performance measures of access, safety, efficiency, and equity when compared with our global counterparts, including Australia, Canada, Germany, New Zealand, and the United Kingdom.
Despite these facts, our healthcare system costs $2.2 trillion per year—$650 billion more than it should cost based on our GDP and the close correlation between a country's GDP and its healthcare spending. Most of this overage occurs in settings where we more commonly have inappropriate provider incentives.
The physicians in our country are the engines of our healthcare system, but currently we are failing to create the right incentives for them to provide high-quality, cost-effective care. For inpatient care, most hospital providers are paid by episodes of care or diagnosis-related groups. By receiving a set fee for caring for a specific type of patient, hospitals and some affiliated providers bear some risk and are therefore encouraged to provide care cost-effectively.
As may be expected from these appropriately aligned incentives with providers, the U.S. does not overspend for inpatient care versus comparable countries. In contrast, outpatient care in the U.S. is predominantly a fee-for-service model, a system that rewards inefficiency with more pay for a higher number of visits, tests, prescriptions, and hospital admissions and even for complications, regardless of improvement in patient outcomes.
Given the wealth of incentives for providers to do more and the lack of incentives to create efficient systems of care, it is not surprising that we spend more than $400 billion for outpatient services—too much of it without demonstrable benefits.
An alternative to this inefficiency exists inside our own Medicare system. Of our 45 million Medicare beneficiaries, 10 million have enrolled in and are cared for as part of the Medicare Advantage program. Unlike the fee-for-service system that cares for the remaining 35 million beneficiaries, the MA program pays a set fee for the care of each beneficiary, caps what the government pays, and thus rewards efficiency.
Most importantly, the MA program has helped to provide an impetus for the formation of integrated healthcare delivery systems in many areas of our country. Because providers bear some risk related to poor patient outcomes, these integrated systems often invest in technology, measure and report quality, foster collaboration between medical specialties, and focus on prevention and disease management in order to limit costly outcomes, such as unnecessary patient hospitalizations.
Cost savings are not the only advantages of integrated care. Integrated systems permit physicians to compare themselves to other practitioners on managing patients with chronic conditions, such as diabetes or on the appropriate administration of screening tests. Physicians tend to be both data-driven and competitive, and these systems can produce quality improvements almost effortlessly.
Patients also report very high satisfaction ratings, are more likely to have a regular physician, are less likely to delay care due to cost, and are less apt to have difficulty accessing care than their fee-for-service counterparts.
The MA program also provides more benefits to beneficiaries overall—an average of $90 per member per month on average—in the form of reduced copays and deductibles compared with the fee-for-service system, and provides care to a higher proportion of vulnerable beneficiaries, including minorities and those of lower socioeconomic status.
Despite these facts, the Obama administration has targeted the MA program for reimbursement cuts, citing higher national MA costs than the fee-for-service system. These cuts will come directly out of the pockets of beneficiaries in the form of reduced benefits. These changes will encourage these currently satisfied members to rejoin the uncoordinated Medicare system with its rapidly escalating costs and its misaligned incentives, thus undermining the very incentives that have created coordinated care group practice. In addition, the mechanism proposed for the cuts does not account for the marked regional variation in relative costs between programs. In many counties, the MA system will be getting less than the fee-for-service system, despite increased benefits.
We are in the midst of a healthcare crisis partly due to the lack of appropriate incentives for providers to work together in truly integrated healthcare systems. Healthcare experts around the world tout coordinated care to be the single best way to improve quality. The Obama administration has acknowledged its importance and expressed a desire to implement mechanisms to effect care coordination.
However, there is no better system of care delivery than a fully integrated network of providers with a vested interest in delivering cost-effective, high-quality, and transparent healthcare. If our government takes the time to study the MA program, integrated delivery networks, and the best way to provide coordinated care, they will realize that the MA program is much closer to the cure than the disease for our ailing healthcare system.
Robert Margolis, MD, is the immediate past chairman of the board of the National Committee for Quality Assurance and is the CEO of HealthCare Partners, an integrated healthcare delivery system serving more than 600,000 patients across several states. Craig Frances, MD, served as chief medical resident at the University of California, San Francisco, has built several companies, and serves on the board of HealthCare Partners. They may be reached at RMargolis@healthcarepartners.comandcfrances@summitpartners.com, respectively.
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I came back from a vacation recently to a horde of meetings. Like you probably do, I view them as a necessary evil, but it's a rude way to come back from some much-needed time off.
If you're like me, you pay dearly for that time you took off. In fact, I can especially feel time drifting away during these dreaded meetings as deadlines inevitably approach for one of the many projects on which I'm behind.
As you probably do, I daydream sometimes during these meetings. The other day, during a meeting about our 2010 HealthLeaders Media Industry Survey, I had a brainstorm. More on that in a minute. Meantime, think about this question:
If you could ask your peers anything, what would it be?
I think I'd ask my peers how they're doing with the extra workload that's on them now that many of their colleagues have been laid off. If you haven't noticed, the media business is moribund, at best. I'd also ask them whether they see a long-term future in getting paid for the written word, but I digress.
Currently, I'm paid to put my finger on the issues that concern healthcare CEOs, so I was naturally thinking about that too. As leadership editor, I am tasked with coming up with additions and deletions for the many questions we ask in the CEO portion of the annual survey. Here are a few of the questions our team and I were batting back and forth that will elicit meaningful responses about the myriad of issues that are affecting you and your organization:
What kind of impact has the stimulus had upon your hospital, if any?
What do you expect your organization to gain, or lose, from healthcare reform?
Which physician specialties are most difficult to deal with?
What kinds of outpatient services are you planning to add in the coming year?
Healthcare faces a double whammy. It is both suffering along with other industries in the recession and finding itself in the crosshairs of a massive government effort to reform the system. After covering healthcare for the better part of 10 years, I can make a pretty educated guess about the issues that concern healthcare CEOs. Still, I found myself thinking that it would be nice to have a roomful of CEOs to ask the information they most want to know about how their peers plan to conduct business in the coming year of uncertainty.
Other HealthLeaders Media editors are focusing on finance, quality, and physicians, among other areas of interest. We all are tasked with developing a few questions that are relevant to 2010, and getting rid of some that have become dated over the past year. Then, Eureka! It occurred to me that I have a focus group right here with the readers of this column.
Perhaps you're curious about how you stack up against your peers this year. Perhaps you have a vexing leadership problem that you're interested in asking a broad swath of your peers about how they might handle it. You can e-mail me with any suggestions or just leave a comment in the space below this column.
So, what do you want to know?
Note: You can sign up to receiveHealthLeaders Media Corner Office, a free weekly e-newsletter that reports on key management trends and strategies that affect healthcare CEOs and senior leaders.
An official at Kaiser Permanente Bellflower Hospital says it's "too soon" to determine if the suburban Los Angeles hospital will appeal its second six-figure fine in two months for failing to secure the personal electronic medical records of Nadya Suleman and her octuplets from snooping employees.
The California Department of Public Health on Thursday issued an "administrative penalty" of $187,500 after determining that KP Bellflower failed to prevent unauthorized access to the Suleman family's confidential patient medical information. The hospital was also hit with a $250,000 fine on May 15 for similar privacy violations against Suleman, aka Octomom, whose eight children were born at the hospital on Jan. 27.
"This is basically the same as the earlier breach. The difference is the earlier report was for the mother. This was for the babies," says Jim Anderson, KP Bellflower spokesman. "The babies' report was filed later because they were in the hospital longer and as a result the investigation took longer. Since the additional safeguards were put in, there have been no improper looks at the medical records of the children."
The CDPH report says eight KP Bellflower employees were identified in the second breach, including one employee who was identified in the first breach. Anderson says the hospital believes the breaches all occurred in late January "in the first few days after the births."
"The report lists eight people," Anderson says. "Four of them looked only at the babies' records. Of those four, two resigned in lieu of termination, one was terminated, and one received significant discipline. The other four had also looked at the mother's records and had resigned already. All of the improper activity all took place in the first few days after the birth. There is some confusion about the timeframe because the reports came out at a different time."
Anderson says there is no indication that the snooping employees acted out of anything more sinister than simple curiosity. "As the thing became reported worldwide, it appears that people let their curiosity get the better of them," he says. "We have no indication and there is no indication in any media reports that any of these people ever gave that information to a third party."
KP Bellflower reported the breaches to CDPH, which launched the investigation and issued the penalties under a new California law that uses heavy fines and bad publicity to incentivize hospitals to protect patient confidentiality. Anderson says KP Bellflower has already paid the $250,000 fine, but hadn't yet determined if it would appeal the second fine. "It's too soon to say. We have people still looking at it," he says.
Despite the high-profile breaches, Anderson says KP Bellflower "believes extremely strongly in a patient's right to privacy and confidentiality." He says DCPH was made aware of the breaches only because the hospital conducted an internal investigation and notified the state.
"The vast majority of the staff in that hospital did exactly the right thing," Anderson says. "There were more than four dozen people who were involved in the delivery and the immediate moments after the births. They all managed to protect her privacy and the privacy of her children."
Douglas Elmendorf, head of the Congressional Budget Office, provided a bleak assessment in his testimony on Thursday on whether he thought the healthcare cost curve—which has been steadily rising upward—would finally bend downward under newly introduced reform legislation.
His response to Sen. Kent Conrad (D-ND), chairman of the Senate Budget Committee, who asked the question: An unequivocal "no."
"In the legislation that has been reported, we do not see the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount," Elmendorf said. "On the contrary, the legislation significantly expands the federal responsibility for healthcare costs."
In a way, the curve is being raised quickly—influenced by growth in healthcare that is outpacing the economy as a whole and moving forward in "unsustainable rates," Elmendorf said. In 10-20 years, increasing federal healthcare spending—such as through the creation of new subsidies for health insurance—would by itself increase the federal responsibility for healthcare and "raise the amount of activity that is growing at this unsustainable rate."
To offset this situation, substantial reductions in other parts of the "federal commitment to healthcare" would have to be made—either on the tax revenue side or on the spending side with reforms in Medicare and Medicaid, he said.
Modifications that have been looked at so far "do not represent this sort of fundamental change in the order of magnitude that would be necessary to offset the direct increase" of federal healthcare costs under current proposals, he said.
Reiterating what he said in an earlier letter sent to Conrad and Sen. Judd Gregg (R-NH), the ranking minority of the Budget Committee, Elmendorf cited that one way to address costs, which has widespread support among health analysts, includes changing the preferential tax treatment of high-cost health insurance policies.
Currently, subsidies exist for those larger health insurance policies in the American tax code, he said. "And like other subsidies, it encourages more activity [to obtain healthcare], reducing that subsidy would reduce that activity."
On the other hand, changing the way that Medicare pays health providers—by promoting cost effectiveness—would make a difference as well, he said.
