The American Hospital Association wants CMS to adjust measures in pay-for-performance programs to reflect factors such as race and income, even though doing so "would be a complex undertaking" for everyone involved.
Rick Pollack
AHA Executive Vice President
Two hospital associations are providing a ringing endorsement of a National Quality Forum draft report that recommends risk adjusting quality measures for hospitals' patient mixes to reflect socioeconomic factors such as insurance coverage, race, and income.
The American Hospital Association on Monday sent a letter to NQF and the Centers for Medicare & Medicaid Services urging them to act quickly on the report's recommendations.
"A large body of evidence demonstrates that sociodemographic factors such as income and insurance status affect many patient outcomes, including readmissions and costs," AHA Executive Vice President Rick Pollack writes in the letter.
"Sociodemographic adjustment allows for all providers to be fairly and accurately assessed on the quality of care they provide and their contribution to patient outcomes while mitigating negative unintended consequences of measurement. Identifying appropriate sociodemographic adjustments also may help to highlight the impact of those factors on patient outcomes, allowing them to be addressed."
AHA wants CMS to use the NQF guidelines to adjust measures in quality reporting and pay-for-performance programs on markers such as readmissions, even as Pollack concedes that adopting the recommendations "would be a complex undertaking" for everyone involved.
'Really Important Things to Consider'
"The negative unintended consequences of failing to adjust measures for sociodemographic factors are substantial," Pollack said in the letter, which was sent at the close of the 30-day comment period. "Moreover, we urge NQF to place a high priority on working with CMS to rapidly address its measures."
"Lastly," the letter says, "we concur with the panel's recommendation that NQF expand its role by developing more detailed implementation guidance for measures, and clarifying for what uses a measure is endorsed."
Nancy Foster, AHA's vice president of quality and safety policy, says clinical factors are already baked into hospital outcome measures to reflect hospitals that serve sicker or older populations. The NQF recommendations take the process one step further.
"This is a report that says beyond the clinical factors there are really important things to consider when you are looking at outcomes, particularly outcomes that you are measuring, and a considerable amount of times measuring post hospitalization," Foster says.
"Things like a patient's ability to follow the instructions that were given to him or her upon discharge, whether they can get to a rehab facility or they can get to physical therapy or they can get out and exercise in a safe environment or they can find appropriate food in their local grocery store. All of those things play into whether or not a patient actually recovers as quickly and as well as we'd all want, and certainly the patient would want," she says.
AHA and other hospital groups have been calling for a socio-demographic metric for years and Foster says the federal government may now be responding to research.
"Enough questions and enough research has been published that Health and Human Services thought it was important for NQF to look at this question and determine whether there was something really there," Foster says. "We have reason to believe that the sociodemographic factors are significant and outside the control of providers, and perhaps should be adjusted for."
"There have been any number of stories," says Foster, "usually published about readmission measures, and because they have significant penalties attached to them and because the data are out there now one can actually do the analyses."
Safety Net Hospitals Also Supportive
Beth Feldpush, senior vice president for policy and advocacy at America's Essential Hospitals, said the safety net hospital lobby "strongly supports the NQF panel's recommendations."
"We think that there is a large body of emerging evidence showing the sociodemographic factors can influence health outcomes," Feldpush says. "That includes these factors in risk-adjustment models where there is evidence to do so will really improve the science of performance measurements."
Practically speaking, Feldpush says bringing sociodemographic data such as income, race, and access to insurance will create "a more accurate picture of performance, which means that some institutions that are doing very well now may not do as well, and some institutions that are not doing as well now may do better. We think the overall effect is that it will improve accuracy and really shed light on the true performance for various hospitals."
Currently none of that is taken into account now. "For individual patients for example with readmissions measures, their medical history is taken into account and I guess some very common socio-economic demographics such as age and gender are used," Feldpush says. "But you don't get any sense as to the individual's income level or education level or anything related to the community in which they live."
Feldpush says she can't predict how safety net hospitals or any entire class of providers will be affected if CMS takes up the NQF recommendations. "We think it will really improve the clarity of the picture and you're certainly going to see a difference in performance across the field," she says.
Data Collection 'Will Take a Little Time'
"But we believe that because of the patients that we serve, having this information in the risk adjustment models will be very helpful to our providers because they do tend to serve a disproportionate number of low-income individual. But there is no way you could say at this point that all safety net hospitals do better or all or some other type of hospitals will do worse."
"It's not easy to collect the data on these sociodemographic factors and that is one reason that some have argued that you shouldn't do this—that it is too challenging," Feldpush says.
"We would push back and say that just because something is hard work doesn't mean we should back away from it. But it will take a little time to make sure we are collecting the socio-demographic information in an accurate way. Although I would also say that providers and hospitals are engaged in collecting race and ethnicity and language preference data now, and this recommendation—particularly if it was going to be put into use for quality measures—would certainly put momentum behind those efforts already underway to collect the data."
Multispecialty medical practices with non-physician providers typically perform better financially than those without physician assistants and nurse practitioners, an MGMA report finds.
Susan L. Turney, MD, President and Chief Executive Officer, MGMA-ACMPE
The use of physician assistants, nurse practitioners and other "non-physician providers" continues to accelerate with the advent of value-based, coordinated care delivery, a Medical Group Management Association analysis shows.
The report examined growth in the use of non-physician providers at multispecialty practices and found that the number of full-time-equivalent NPPs per FTE physician has increased by 11% since 2008. Correspondingly, the analysis determined that medical practices with NPPs typically perform better financially, perhaps because the NPPs boost patient capacity and improve access to providers.
"While it's encouraging to see that practices who invest in employing non-physician providers benefit financially from such arrangements, medical groups are driven by the desire to serve patients and improve their satisfaction with their experience," MGMA President/CEO Susan L. Turney, MD, said in remarks accompanying the report.
"Being successful in a value-based environment will require practices to innovate and staff their organizations thoughtfully to ensure patients have access to their providers and are satisfied with their experience," she continued.
The MGMA analysis is consistent with the rise in demand for NPs and PAs seen at healthcare recruiters Merritt Hawkins & Associates. Travis Singleton, senior vice president at the Irving, TX-based firm, says search requests for these non-physician providers "grew by 300% year-over-year from 2012 to 2013, which is insane."
Singleton says the appeal of non-physician providers is obvious, starting with the fact that compensation for NPs and APs is about one-third that of physicians, "and maybe even a little bit less."
Tallying the Cost Advantages
But that's just for starters. "Where you are starting to see the real cost advantage is in the fully functioning co-management type of world," Singleton says.
"There is this spectrum of duplication where the physician and the nurse practitioners are doing too many of the same things. On the other end of the spectrum you are maybe allowing the nurse practitioner to do too many things and you have a problem with continuity of care. If you find that middle range ratio in your medical group – most people will tell you it's about two NPs to one primary care physician—then the cost efficiencies are incredible."
In a well-coordinated practice, Singleton says, the non-physician providers are seeing "the coughs and sniffles and things an MD probably shouldn't be handling on the front line anyway. So, you are able to see two and three times the production you would see out of one MD and you are getting better care because this allows the NPs to spend more time with the patients who fall under their scope of care while allowing the MD more time with more chronic or complex patient."
One of the biggest, but often overlooked drivers in the use of non-physician providers, Singleton says, is that payers are now recognizing and reimbursing for the services they provide. "That is the difference. It is going to follow the money," he says. "If the third-party payers continue the trend of recognizing more and more expanded duties by NPs and PAs you are going to see people use more of them."
Tight Demand, 'Spotty Supply'
With demand for non-physician providers expected to remain strong, Singleton says the supply will remain tight and "spotty" in different parts of the country and within urban and rural settings. "Unlike the MD population, we are able to affect NPs and PAs much more quickly," he says. "Even though you are only seeing an increase in schools of 2% to 5%, we have seen a really healthy increase over the last decade."
Unfortunately for proponents of primary care, a growing number of non-physician providers are following physicians into more urban areas and into subspecialties because that's where the money is. "It's a much easier quality of life and it pays a lot better," Singleton says. "Where we need them most is in general primary care."
"For NPs specifically, 88% are focusing on primary care. But only 18% of those are in rural areas, and rural areas are where we need them the most."
New players in healthcare are gaining a toehold with frustrated consumers who are "ready to abandon traditional care models for ones that echo experiences in banking, retail and entertainment," research from PwC's Health Research Institute indicates.
Chris Wasden
Managing Director and Global Healthcare Innovation Leader at PwC
Healthcare consumers appear willing to dump the doctor's office for cheaper and more convenient retail and remote alternatives that could amount to tens of billions of dollars in lost revenues for traditional providers if they fail to adapt, according to a report from PwC's Health Research Institute.
Despite controlling nearly 20% of the economy, traditional healthcare is years if not decades behind other industries when it comes to adopting a business model and technologies that assess and meet consumer needs.
With traditional players dragging their feet, consumers are taking the lead with increasing demands for pricing transparency, extended office hours, telemedicine and other and other innovative and consumer-friendly uses of technology that other sectors of the economy have used for years.
New players in healthcare are gaining a toehold with frustrated consumers who are "ready to abandon traditional care models for ones that echo experiences in banking, retail and entertainment," PwC says.
Chris Wasden, a managing director and global healthcare innovation leader at PwC, spoke with HealthLeaders Media about his company's report and what its findings mean for traditional providers. The following is an edited transcript.
HLM: How is the role of the consumer changing the way care is delivered?
CW: Increasingly, consumers are really forcing providers to try new things because providers are not going try new things on their own. [This is] because providers think the old way is just fine and they don't know how to do it a new way and they don't want to figure out how to do it a new way.
So it's the consumers who are saying 'I am going to be an early adopter and try something new.' That is putting pressure on the physicians to try something new. So this is going to be consumer-driven and led, not physician-driven and led.
HLM: How does traditional healthcare stack up to other sectors in the use of technology?
CW: Other industries became digital decades before healthcare became digital. Banking, for example, became digital in the 1970s with digital data sharing around money transfers. You've got the digitization of media and retail that occurred around the turn of the century.
Healthcare didn't become digital until just a couple of years ago. We are four decades behind finance and one to two decades behind most other industries that have been transformed through digital technology. You can't create these new business models that we see in banking and retail as well as media if you don't have digital information.
HLM: Why is traditional healthcare a laggard on technology?
CW: It's been a mom-and-pop industry that has been very local in nature and hasn't ever been scaled on a mass basis where leveraging technology for economies of scale made a difference. When you look at traditional healthcare providers, physicians for example, their view was that adding this digital overlay was unnecessary.
It was an overlay in addition to what they would do on a paper basis. They said, 'Look, if you ask me to put digital information into an electronic health record, I will see fewer patients, it will be more cumbersome, and it provides no value to me or the patients. It just provides value to some other higher healthcare systems of organization and so unless you are willing to pay me to digitize this information, I am not going to do it.'
So, what happened with Obamacare is that they created carrots and sticks to create additional information.
Healthcare providers are also very traditional in the way they provide care. They follow what they learned in medical school and medical schools and haven't even been teaching about digital healthcare until the last couple of years.
You have an entire industry that is trained on analog protocols that have never required digital information so nobody knows how to do it.
Unlike a big industrial company that has policies and procedures that they apply en masse across the entire organization, every doctor has the freedom to practice medicine any way he or she wants to. So there has not been the imposition of 'cookbook medicine' on doctors.
HLM: Customer satisfaction has been a mantra in retail forever. Why is it such a challenge in healthcare?
CW: Whether it's the pharmaceutical companies, device makers, payers, or providers, nobody considers the patient as their customer so they've never tried to come up with solutions that were consumer-friendly or consumer-centric.
The only time that was considered valuable was the physicians' time. So the economics is around how much you pay the physicians and the clinicians and how much of their time is used. Whereas, if you look at other industries, they view consumers' time as valuable.
They are trying to come up with solutions to save the consumers' time. How many new healthcare solutions do you see that say 'we can decrease the time it takes to get an appointment or the amount of time it takes to visit the doctor or the time in the waiting room?'
Nobody cares about that in healthcare, whereas in every other industry they do.
HLM: Your survey showed that people ages 35–54 were most receptive to new care delivery models. Why?
CW: Younger people don't go to doctors and aren't ever sick. It's difficult to get them engaged in healthcare service models when they don't use them. In the 35–54 age group you have people who are young parents going to the doctors all the time with ear infections and bumps and bruises.
If you have new care delivery that cuts the time in half, they are interested.
They are also getting into their 50s where they start to have some of their own problems and in many cases they are managing the cases of other people such as their parents. They're very interested in technologies that help them better manage someone else's healthcare more efficiently because they have a full-time job. They're busy. If they can do things over the phone, using apps and other remote services they're all in for that.
Most healthcare providers and systems are not providing these types of options. They will say the reason they don't provide them is because patients don't want them. It's a chicken-and-egg thing. How do you know if a patient doesn't want them if they have never tried them before and they don't know what they are?
HLM: We've been hearing about the transformation of healthcare for years. What is different this time?
CW: The risk is being shifted to the consumer. I am on a high-deductible health plan at work, which means I bear the first $5,600 of risk. So, when my wife called and said 'the doctor says I need an MRI,' I said 'I don't think so. Let's ask the doctor four questions and see what happens.' She asks the doctor:
'Do you know how much the MRI costs?'
He says 'no I don't but I will find out.' It was $2,400 dollars.
'Doctor, if you get the MRI image will you change your care for me?'
He said 'No it's not going to change anything at all.'
'Doctor, do you know I'm on a high-deductible health plan?'
'I had no idea at all.'
'Doctor, do I still need the MRI?'
'No you don't.'
I wouldn't ask those four questions if I didn't have a high-deductible health plan. That is an important change. You change the risk and you start changing the way the risk is managed.
The other thing is that we do now have technologies that we can use for these things. The virtual care where you can take a picture with your smartphone, send it to the doctor, he can look at it and give you an opinion. In a couple of minutes you can resolve a problem that would have with the old model taken a couple of weeks.
And you have people that want to experience things in healthcare like they experience everywhere else. When I buy something from an online retailer they know me and they provide recommendations to me and I never have to input the same information twice.
Whereas in healthcare I have to give you the same information every time I see you. Have you no memory? Have you no records? Consumers are demanding this digital experience that they have everywhere else in their lives. The organizations that can deliver that now are going to be the ones that are going to succeed in a new world.
HLM: What happens to those providers who don't adapt?
CW: Something like half of all doctors are over the age of 50. They're saying 'just give me 10 more years to do it the way I've always done it and then I'm done.' So you have a significant portion of the healthcare industry that is saying 'get me to the finish line so I don't have to learn anything new.' That is a big issue.
These younger docs want to do this stuff, but you have a changing of the guard from the old way with the old docs. And the final issue is money. We continue to pay for the old way. Until we change the flow of money we are not going to change the flow of the practice of medicine.
While the latest delay of ICD-10 has created some confusion, the CEO of AHIMA says providers, payers, and other stakeholders are doing what they can to prepare staff. Those that can afford it will try to teach both ICD-10 and ICD-9.
Health systems, payers and vendors aren't the only sectors in healthcare that are scrambling with the unexpected ICD-10 delay of at least one year imposed by Congress late last month.
Accrediting agencies and community colleges across the nation that were setting the curriculum and teaching the new medical coding set to about 40,000 students in anticipation of the Oct. 1, 2014 implementation have been forced to re-introduce the older ICD-9 code set. Many of those ICD-10 trainees now find their job prospects in limbo for at least a year.
The Commission on Certification for Health Informatics and Information Management announced shortly after the delay was mandated that it would hold off on testing for ICD-10 accreditation until the new coding set is "officially implemented."
"We were in good faith trying to prepare our students for the workforce that we knew was going to come about with ICD-10," says American Health Information Management Association CEO Lynne Thomas Gordon. "So instead of having our workforce ready ahead of time, which I think is better, we are saying 'now once you change it, we will test.'"
Gordon says AHIMA was ready to throw away its ICD-9 training manuals when word came down about the delay. The old manuals will be dusted off and redistributed to community colleges to help train students for the older coding set.
"They were ready for destruction that week, but fortunately we held off," Gordon says. "We are trying not to be prescriptive. We are trying to help. We are going to provide a free webinar on the difference between ICD-9 and ICD-10 to try to help. We are also going to provide a free self-assessment online for our students so that they can see how big the gap is and how much more studying they need to do to pass the credentialing exam."
Trying to Teach Both
"Is it perfect? No. I really feel for our educators who had to work hard just to get ICD-10 onto their curriculum. You should see some of the emails we got. It is so sad. They are saying they had to get it approved; they had to develop it; their educators had to go to training. Then they had to get it through their curriculum committees. They switched over in good faith. What they are saying now is they are going to try to teach both. That is tough because there is not enough time to teach both really well."
Stacey Ocander, president of the National Network of Health Career Programs in Two-year Colleges (NN2), says her organization was not surprised by the delay. "When it comes to any type of regulation coming down, especially when it comes to healthcare, we always anticipate it not happening just because it is such a volatile discipline," she says.
"There are so many stakeholders. There are the patients the families, the community, the politicians, the educators, the students, the payers and the providers and it goes on and on. So as educators we develop a curriculum where we always anticipate carrying over the old standards for at least 12 months and interweaving those in our curriculum with the chance that something will get stalled, just like it did with ICD-10."
"Our mission as community colleges," Ocander says," is to serve our communities. The last thing we want to do is get our students in a situation where they are not prepared to take that board or that registry because that is how our folks become licensed to enter the workforce."
Ocander says there will be some rough patches as students adjust to the new requirements.
"We will do study groups, some online training, tutorials. The nice thing about community colleges is we do react on a dime," she says. "We have been watching this for months. We put out notices to all of our membership, [saying] 'You need to be writing the politicians in your state letting them know this will impact our students. In the meantime, start prepping for anything you need to do you help your students prepare.'"
"That has already come out in online tutorials, the majority of which will be free for students so we are not putting a financial impact on them. These are things they can take from home and access what they need. A lot of those programs were online programs anyway, so it is not a methodology change for students."
'Stay the Course'
While the delay of at least one more year has created some confusion, Gordon says she is hearing anecdotally that many providers, payers, and other would-be ICD-10 adopters are "staying the course."
"We are hearing they are going to use this time to continue to work with their physicians on clinical documentation improvements, whether they're using ICD-9 or ICD-10. People are going to continue to do that. They are continuing to work with their vendors to get ready for ICD-10," she says.
"As far as the resources, what I heard at the CCHIIM meeting from our members in the room is that they're saying if we can afford it, we would love to continue to do dual coding. The question is can you continue to afford it? Maybe some of the larger academic medical centers and institutions can and we know that ICD-10 is better because it has more granularity and specificity. As we go to the accountable care models, you are really going to need this specificity to make sure you have healthier communities."
"I would say to providers, 'stay the course and don't take your foot off the pedal. Continue in good faith to get ready. It will come. It's just a shame it's not as soon as we thought.'"
Duke LifePoint has agreed to spend more than half a billion dollars on Conemaugh Health System over the next 10 years. The CEOs at both organizations detail what drove them to this deal and why we can expect to see more like it.
Scott A. Becker
CEO of Conemaugh Health System
If you're trying to explain to someone outside of healthcare why hospitals are consolidating, allow me to direct your attention to Exhibit A: Last month, for-profit Duke LifePoint Healthcare signed an agreement to acquire Conemaugh Health System, a three-hospital not-for-profit system headquartered in Johnstown, PA.
Financial terms were not disclosed for the deal, which is expected to be finalized later this year. However, Duke LifePoint has agreed to spend more than half a billion dollars on Conemaugh over the next 10 years to upgrade inpatient and outpatient services, technology, and facilities.
I spoke with senior leaders at Duke LifePoint and Conemaugh after the deal was announced and I found myself nodding along in agreement as they explained why it all made sense. The rationale they used is why we can expect to see more of these consolidations.
Conemaugh CEO Scott A. Becker described "a great three-way partnership" where everybody wins. "We get the depth and breadth of the clinical strength of the Duke University Health System and we get the partnership and capital and operational skill set from LifePoint," Becker says.
"They are getting a strong player in our marketplace and they will make us stronger. We are coming into their organization as a strong organization and we want to – knock on wood – help them continue to grow strategically to make Duke LifePoint even stronger and more prevalent across the country."
Smaller hospitals that are about to be gobbled up by larger systems often talk about "negotiating from a position of strength." That begs the question: If Conemaugh is so strong, why sell?
"When we say we are dealing from a position of strength, we don't think our financial performance was ever going to be as good as it is right now," Becker says. "Our board has gone through a four-year strategic process where we are north of $1 billion in terms of gross revenues and north of $500 million net. That's not small. We are the third-largest system in Western Pennsylvania."
"The reality is we felt we needed to continue to grow and develop our marketplace with a clinical partner who will help us with evidence-based protocols and prepare for population health, and a financial partner who will bring us the strength to do the investments we need to do now and not in four or five years from now."
A Classic Acquisition
But why a full acquisition? Why not some sort of relationship that allows for more local control?
"From our standpoint, you minimize the overall potential capital commitment," Becker says. "We felt so comfortable and the trust was so strong that our local board feels that they are going to have an opportunity to continue to grow and develop with Duke LifePoint."
William F. Carpenter III, chairman and CEO of Brentwood, TN-based LifePoint Hospitals, calls the Conemaugh deal "indeed a classic acquisition."
"It's very consistent with our national strategy that we began a couple of years ago as we have focused on a hospital like Marquette General, which is a regional tertiary hospital," he says. "Duke can bring its focus on clinical quality and patient safety and advanced clinical programs and development of advanced clinical programs and programs like heart and cancer and neonatology. And LifePoint can add its operational experience and expertise and financial resources to add value in that way."
Duke LifePoint is itself a "flexible affiliation" business model formed in 2011 to take advantage of Duke University Health System Inc.'s clinical expertise and LifePoint Hospitals' management skills and access to capital. Carpenter says Duke LifePoint will continue to "seek opportunities in geographies that we think make sense and there are quite a number of them that we have identified."
"The geography and the service area that Conemaugh has the ability to reach are quite compelling. We do believe that there is the opportunity to expand the ability of Conemaugh to serve the region in a bigger way. It is one of those opportunities that came together and we do think that it presents a very compelling opportunity both for Duke LifePoint and for Conemaugh Health System."
Expanded Economies of Scale
It's clear to see what is driving Conemaugh and Duke LifePoint to push this deal. They have a lot to gain financially and organizationally, including an expanded economy of scale that improves leverage with competitors, vendors and payers.
But what about the patients, and the towns where these Conemaugh hospitals are located? What do they get out of it? Don't they lose a significant say in how healthcare is delivered in their communities when the local board if directors cedes control of the purse strings?
The answer is 'yes, but…"
First of all, Conemaugh will become for-profit, and Becker estimates that local government will collect about $4 million in taxes.
As for the loss of local control, local communities have legitimate concerns whenever an outside entity comes in and buys the hospital, which is often not just the center of care provision, but also the largest economic driver in communities. When boards cede budgetary authority and become mere advisory councils, there is a loss of control. It sounds frightening until we consider the riskier alternative, which in most cases is stay small, stay independent, and slowly drown.
One of the three hospitals in the Conemaugh deal, for example, is Meyersdale Medical Center, a critical-access hospital. The problems these small, isolated but vital providers face are well documented, to the point where it is hard to see how independent critical access hospitals can survive, even with enhanced Medicare reimbursements.
Becker says that under the Duke LifePoint deal there is a 10-year guarantee of clinical services at Meyersdale, provided that the hospital can maintain its critical access status and, thus, its favorable reimbursements.
"For us as long as that reimbursement window stays open, it is a very viable process," he says. "It is not going to be Conemaugh or Duke LifePoint that makes the decisions about the systems in play. It is going to be Washington. If they take the critical access designation away, that has the potential to decimate rural hospitals in this country."
Duke LifePoint has agreed to build a $3 million outpatient center in Meyersdale as part of more than $100 million in capital improvements to Conemaugh over the next two years in a Rust Belt region still groggy from the Great Recession.
"That is all in the outpatient arena," Becker says. "We are not going to not pay attention to inpatient capacity but where our growth is going to be is continuing to expand our footprint and grow and make this more accessible and easier to utilize for the patient."
The people of Meyersdale, PA would probably say they would prefer a for-profit, taxpaying, functioning critical access hospital and new outpatient services and access in their town to a shuttered building.
Sudden Hospital Closure Stuns MA Community; More Coming
So, when you look at what's happening at Conemaugh, when you see that they're talking about expanding services, building projects, hiring more people, generating tax revenues, and improving quality, it's easy to see why hospital mergers and acquisitions are becoming the new normal.
Yes, there are legitimate concerns that hospital consolidation will raise the cost of care delivery, and there are concerns about a loss of local control, but consider the alternatives. Those concerns have to be weighed against the likelihood that without affiliations with larger systems many of these hospitals that provide needed services to vulnerable populations would otherwise close, no matter how financially strong they are now.
Arguing over care costs and local controls are moot points when community hospitals close.
Tenet, Community Health Systems, and Mercy Health have individually finalized separate deals to build, operate, and merge healthcare organizations from Pennsylvania to Florida.
Tenet Healthcare Corp. has won the latest round in a twisting eight-year battle to build a hospital in burgeoning Fort Mill, SC.
A South Carolina Administration Law Court overturned an earlier state ruling and awarded a certificate of need to Tenet-owned Piedmont Medical Center, which plans to build a 100-bed, $120 million Fort Mills Medical Center.
"We celebrate today with the community of Fort Mill as they are one step closer to getting the high-quality hospital that they have deserved for years," Bill Masterton, CEO of Piedmont Medical Center, said in prepared remarks. "Fort Mill Medical Center will deliver trusted healthcare services in the heart of town as we extend the quality programs that residents have come to expect from Piedmont Medical Center."
The ruling released last week is the latest wrinkle in a case that dates back to 2006. Piedmont had originally been awarded the CON by the South Carolina Department of Health and Environmental Control. Carolinas HealthCare System successfully appealed the ruling in September, 2011. Piedmont appealed that ruling and the case was heard in April 2013 by Administrative Law Judge S. Phillip Lenski, who overturned the DHEC ruling in his decision last week.
"This court concludes that the establishment of the (Fort Mills Medical Center) will best serve the public needs by reducing the outmigration of York County residents to North Carolina hospitals and, in so doing, will strengthen the existing healthcare system in York County that consists largely of Piedmont Medical Center and independent physicians on the Piedmont medical staff," Lenksi wrote.
"Approval of Piedmont's application will help stem outmigration, while approval of CHS's will escalate it, especially for specialty services. Furthermore, CHS's proposed hospital site presents traffic and safety concerns. For all these reasons, FMMC will better serve public needs than (Carolinas Medical Center – Fort Mills)."
Lenski also wrote that granting the CON to CHS "would have the effect of causing the erosion of quality of care at Piedmont and among specialists practicing there as a result of the diminution in the volume of patients and the degradation of the payer mix of the patients who would continue to be seen at Piedmont.
Consequently, there would be no hospital in York County providing many of the high quality and tertiary services that Piedmont has added. Alternatively, the establishment of FMMC will ensure that high quality services continue to be added and provided within York County."
It is not clear if CHS will appeal the ruling. Calls to the health system's media relations office were not returned.
Once built, Tenet said, FMMC will offer an array of specialized services, including a 24-hour emergency department, comprehensive women's health services, advanced cardiac services, and an intensive care unit.
CHS Finalizes Hospital Deals in FL, PA
Community Health Systems, Inc. says it is finalizing new operations agreements with hospitals in Pennsylvania and Florida.
In Pennsylvania, CHS has completed "the acquisition of substantially all of the assets of Sharon Regional Medical Center. The acquisition includes the 251-bed Sharon Regional Medical Center, outpatient centers and affiliated physician practices. Pennsylvania is CHS's second largest state as measured by number of affiliated hospitals, and in close proximity to ValleyCare Health System of Ohio, an affiliated health system that includes two acute care facilities and a rehabilitation hospital.
CHS has expanded its presence in Florida with the finalization a 40-year prepaid lease on Munroe Regional Medical Center, a 421-bed hospital in Ocala. The deal also creates a clinical affiliation between Munroe Regional and UF Health Shands. CHS affiliates now own or operate 26 hospitals in Florida.
Mercy Health Transfers Hot Springs (AR) to CHI
Mercy Health has transferred ownership of Mercy Hot (AR) Springs hospital and physician clinic to St. Vincent Health System in Little Rock, an affiliate of Catholic Health Initiatives. Mercy Hot Springs will be operated as part of a regional network with SVHS and the new name is St. Vincent Hot Springs.
Financial terms of the transfer were not disclosed.
"Our agreement with CHI provides assurance that Catholic health care has a strong, sustainable future in Hot Springs," Mercy President and CEO Lynn Britton said in prepared remarks. "The affiliation with SVHS provides the opportunity to strengthen health services locally as well as across the entire region, and enables our co-workers and physicians to continue to do what they love – provide exceptional care and service to their community in a faith-based environment."
Mercy Hospital Hot Springs is a 282-bed acute-care hospital with a Level 2 Trauma Center designation, a 90-physician clinic organization and a range of medical services
Medical staff privileges of the physicians at Mercy Hot Springs are not expected to be affected by the transfer. Physicians and staff employed by Mercy Hot Springs as of April 1 will continue their employment with the hospital.
SVHS also intends to retain the core healthcare services and charity care currently provided by Mercy in the Hot Springs community, which will be overseen by a local board of community and physician leaders, the hospital systems said in a joint media release.
Mercy will still have a presence in Hot Springs through its sponsorship of the Cooper Anthony Mercy Child Advocacy Center.
Thomas Fitz was named interim president of St. Vincent Hot Springs. He has previously worked with CHI in Kansas and Morrilton in supporting sponsorship transfers and serving as an interim leader.
The new law delays both the implementation of the ICD-10 code set and the so-called two-midnight rule, which affects hospital reimbursements. The law also includes critical funding extensions for rural hospitals.
President Barack Obama late Tuesday night quietly signed a bill rushed through Congress in the last five days. It delays for one year a 24% cut in Medicare reimbursements mandated under the Sustainable Growth Rate funding formula. It also delays for one year the ICD-10 coding set implementation deadline and the so-called two-midnights rule.
There was no signing ceremony and the president offered no comments for or against theProtecting Access to Medicare Act of 2014(H.R.4302).
Instead, the White House press office issued a terse statement noting that the bill delays mandated SGR cuts until April 1, 2015, the 17th such delay in the past 11 years. The White House also acknowledged that the bill's intent is to "extend other health-related provisions set to expire, and to make other changes to current-law health provisions."
Those changes include two other controversial and costly provisions stuck inside the 121-page bill. They delay by one year both the implementation of the ICD-10 medical coding set and the two-midnights rule.
H.R.4302 passed the House last Thursday in just 25 seconds during a hastily convened voice vote. There was no debate and there is no record of how the votes were cast.
The Senate followed suit on Monday night after brief but fierce debate, and easily passed the bill on a bipartisan 64-35 vote.
The new law has broad implications for just about everyone in the healthcare sector, from patients to providers to vendors, and the passage of the bill and its railroading through Congress left stakeholders sharply divided.
Even though the law delays for one year potentially devastating reimbursement cuts for physicians, the legislation was bitterly opposed by the American Medical Association, which had made finding a permanent fix for the SGR its top legislative priority this session.
AMA, CHIME Disappointed
AMA President Ardis Dee Hoven, MD, says Congress "failed to seize a historic opportunity" to find a permanent fix, even as physicians were led to believe up as late as this week that some sort of deal was at hand.
"Up until the final hour, multiple members of Congress spoke publicly about the need for reform, and several bills that used the agreed-upon SGR repeal policy were put forth," Hoven said in a letter to AMA members.
"The problem was that the bipartisan collaboration that had characterized the policy development phase collapsed when it came to paying for the legislation. The various funding sources brought forth were so politically polarizing that some of the proposals never even made it to a vote. We continued to urge Congress to resume bipartisan, bicameral collaboration to reach agreement on an acceptable way to pay for repeal. But this step appears to be one they were unwilling to take, letting their political interests trump good policy choices."
The College of Healthcare Information Management Executives was stunned by the delay in ICD-10, which they said was slipped into the bill to appease specialty physician associations. CHIME is still assessing the affect and cost of the one-year delay and it called on the Centers for Medicare and Medicaid Services to "provide new guidance to the industry on what the delay means for providers, vendors, clearinghouses and other concerned parties."
"The delay leaves numerous unanswered questions from testing, training, and revamping the agency's education resources, such as the CMS eHealth University, designed to help providers understand, implement, and successfully participate in the conversion process," CHIME said in a statement.
"The ICD-10 delay comes at a critical time just as providers are implementing new care models that would benefit from greater coding accuracy and specificity, such as patient-centered medical homes and value-based purchasing."
In sharp contrast, the American Hospital Association cheered after it successfully lobbied to attach the delay of the two-midnight rule and to extend the suspension of recovery audits for another year.
Effect on Rural Hospitals
The new law also includes critical funding extensions for rural hospitals, "including the Medicare Dependent Hospital program and the low-volume adjustment, eliminates cuts in 2016 to the Medicaid Disproportionate Share Hospital program, and delays for an additional six months the ill-advised two-midnight policy, while precluding recovery audit contractors from second guessing decisions made by physicians related to this policy," AHA said in a statement.
"The offsets to pay for this package include a variety of different provisions that impact various sectors of the healthcare field, while the hospital provisions basically represent a continuation of current policies 10 years from now rather than any new cuts."
AHA says it did not get everything it wanted. "We are disappointed that certain provisions for rural hospitals were not included in the legislation, such as relief from both the so-called 96-hour rule for critical access hospitals, and enforcement of the direct supervision requirement for rural hospitals. In addition, relief from cuts to Medicare (disproportionate share) payments were not included, and need to be revisited by the Congress."
The vote marks the 17th time that Congress has provided a short-term fix for the formula that sets Medicare pay rates for physicians. Included in the bill are two controversial provisions to delay implementation of the ICD-10 medical coding set and the so-called two-midnights rule.
On a bipartisan 64-35 vote, the Senate on Monday evening easily passed an 11th-hour bill to delay by one year a 24% cut in Medicare reimbursements for physicians that would have kicked in at midnight if the Sustainable Growth Rate funding scheme had been allowed to expire.
Monday's vote marks the 17th time that Congress has provided a short-term fix for the SGR since it was enacted in 1997. The controversial bill to extend the patch, which was make public only last week, sparked brief but fierce criticism before the Senate vote.
Sen. Tom Coburn, (R-OK), a physician, scolded his colleagues for their support of the Protecting Access to Medicare Act of 2014 (H.R.4302), which he said "totally ignored" the legislative process.
"The bill we have on the floor is one of the reasons why I am leaving Congress at the end of this year, because here's why the American people are disgusted with us. We are going to put off until tomorrow what we should be doing today," Coburn said at the start of a sharp and lengthy critique on the Senate floor.
"Voting for this bill doesn't fix anything except a little heat in the kitchen, and when we come back the next time the heat is going to be hotter, and hotter, and hotter," he said. "This bill is a cowardly response to the real problem that we have. It is time we stopped being cowards."
Senate Majority Leader Harry Reid, (D-NV), said the last-minute stop-gap was needed because "unfortunately the parties could not come together on what a permanent fix would be. We need to restore sanity to the Medicare system."
The bill now heads to President Obama's desk. The White House and the Department of Health and Human Services have not issued any statements about the bill.
Stuck inside the 121-page bill are two other controversial and costly provisions to delay by one year both the implementation of the ICD-10 medical coding set and the so-called two-midnights rule. With little fanfare and no speeches, H.R.4302 passed the House on Thursday in just 25 seconds during a hastily convened voice vote. There was no debate and there is no record of how the votes were cast.
More Uncertainty for Physicians
The Senate vote came with little suspense, the outcome already predicted. Passage of the bill, however, prompted another frustrated rebuke from American Medical Association President Ardis Dee Hoven, MD, who had made a permanent fix to the SGR a top priority in this session.
"This bill perpetuates an environment of uncertainty for physicians, making it harder for them to implement new innovative systems to better coordinate care and improve quality of care for patients," Hoven said in a statement.
"Remarkable progress was made this past year in reaching a bipartisan, bicameral agreement on policy to repeal the SGR, and the AMA encourages Congress to continue its work and resolve outstanding issues. On behalf of Medicare patients and physicians across the country, it is critical that we achieve permanent Medicare physician payment reform. We will continue our efforts to secure a permanent SGR repeal this year."
Just before Monday's vote Senate Republicans rejected a proposal by Finance Committee Chairman Ron Wyden, (D-OR), to create a "permanent fix" for the SGR by paying for the $138 billion hole it would create in the budget with Overseas Contingency Operations funds.
"When the SGR isn't met, Congress says 'That's OK! We will just apply a patch and punt.' Patch it up and let that SGR limp along just as it has year after year after year," Wyden said on the floor. "The cost of the patches now resembles the cost of the full repeal."
The temporary fix has been estimated to cost about $20 billion, although the Congressional Budget Office has yet to score it.
Safety Net Hospitals Respond
The AMA's stance notwithstanding, some other hospitals associations have quietly cheered the bill, which delays implementation of the so-called two-midnights rule, suspends recovery audits until March 31, 2015, and preserves disproportionate share payments for safety-net hospitals.
"We are pleased Congress wisely chose to put off damaging cuts to Medicaid disproportionate share hospital payments another year," Bruce Siegel, MD, president/CEO of America's Essential Hospitals, said in prepared remarks. "This will afford needed time to revisit the cuts in light of Medicaid coverage still short of the full expansion envisioned under the ACA."
"We're also glad to see delayed enforcement of Medicare's two-midnight rule. It's critical we get this policy right so that we don't inadvertently destabilize hospitals that care for the vulnerable."
ICD-10 Stunner
The delay of the ICD-10 implementation until Oct. 1, 2015, which was only made public less than one day before the House vote, stunned stakeholders in the healthcare IT sector.
"This pause in momentum discredits the significant work our industry has spent training staff, conducting testing, and converting systems; not to mention the hold on improving care quality and accuracy, advancing clinical reporting and research, and patient safety outcomes," said Russell P. Branzell, president and CEO of the College of Healthcare Information Management Executives.
"Assuming Presidential signature on the legislation, CMS must now provide new guidance to the industry on what the delay means for providers, vendors, clearinghouses and other concerned parties. The delay leaves numerous unanswered questions from testing, training and revamping the agency's education resources, such as the CMS eHealth University, designed to help providers understand, implement, and successfully participate in the conversion process."
Lynne Thomas Gordon, CEO of the American Health Information Management Association, said the transition to ICD-10 "remains inevitable" and that her organization would "seek immediate clarification on a number of technical issues such as the exact length of the delay."
The original compliance date for ICD-10 was Oct. 1, 2013, but that date was pushed back for a year when provider groups complained that they weren't ready.
A bill that delays Medicare payment cuts to physicians for another year contains two controversial and costly provisions that would delay both the implementation of the ICD-10 medical coding set and the so-called two-midnights rule.
The Senate Monday is expected today to take up a bill that would delay by one year a 24% cut in Medicare reimbursements for physicians mandated that otherwise takes effect on April 1 under the Sustainable Growth Rate funding formula.
The 121-page Protecting Access to Medicare Act of 2014 (H.R.4302) was rushed through the House in 25 seconds Thursday with no debate on an unrecorded voice vote, despite the strong objections of the American Medical Association, the American College of Surgeons, and other leading physicians' associations, which have been calling for a permanent fix.
Senate Majority Leader Harry Reid told The Hill that he would bring the bill to a vote Monday. "The patch that we have is imperfect, but it is something that will take care of things," Reid said. "I am disappointed we didn't get a permanent fix, but we should be very happy about what we have done."
Included in the bill, which was only made public last Wednesday afternoon, are two controversial provisions with great financial ramifications for providers. The compliance date for the ICD-10 medical coding set would be delayed to Oct. 1 2015 and the so-called two-midnights rule would be delayed until March 2015. The ICD-10 deadline has been extended once already.
The White House has not commented on the bill and whether or not President Obama would sign it or veto it. An official at the Centers for Medicare & Medicaid Services said the agency does not comment on pending legislation.
John Showalter, MD, Chief Health Information Officer at the University of Mississippi Medical Center in Jackson, expressed the frustration of many proponents of ICD-10 when he talked about the loss of credibility that would come with pushing back the implementation date until Oct. 1, 2015.
"I saw CMS had a really broad estimate of $1 billion to $6 billion in expense from delaying ICD-10. I think what's going to multiply that is the loss of engagement, so because CMS has been messaging so firmly," Showalter said in an interview Sunday.
"We've finally picked up the physician and coder engagement, so I now have all 17 of my department heads meeting with me monthly on how we're going to execute ICD-10, and if they delay it for a year, next year when I try to get those meetings, I won't get them, because they'll be waiting for Congress to delay again another year. They're going to think there's a pop-off valve. My biggest concern, although a billion dollars is a lot of money, is the provider and [engagement] that's been garnered in the last several weeks that's just going to go away."
If the Senate passes the bill and President Obama signs it into law, Showalter says physicians at the UM Medical Center will know who to blame. "I don't think they're going to blame us, but I think they're going to move into the thought process of once bitten, twice shy," he said.
"Now they're going to have been revved up and prepared for it twice, and they're really going to think it's never going to happen, and then when it does happen, it's going to be a big shock, and we're not going to be prepared for it because we're going to wait for that last-minute reprieve from now until eternity."
The bill, which passed the House Thursday, includes two controversial provisions. The Senate must take up the bill by Monday, the day the SGR deadline expires, to avoid the mandatory and perennially delayed cuts to Medicare payments to physicians.
The U.S. Senate is about to take up potentially the most sweeping piece of healthcare legislation since the passage of Obamacare. The Senate is expected to vote Monday on a stop-gap measure that will place year-long delays on three critical, contentious, and costly federal mandates affecting a wide swath of providers and vendors.
The House passed the measure Thursday.
The Protecting Access to Medicare Act of 2014 (H.R.4302) would temporarily delay for the 17th time reimbursement cuts to the Medicare Sustainable Growth Rate funding formula that are scheduled to take effect on April 1.
Stuck inside the 121-page bill, which emerged for public view on Wednesday, are two other controversial and costly provisions to delay by one year both the implementation of the ICD-10 medical coding set and the so-called two-midnights rule. With little fanfare and no speeches, H.R.4302 passed the House on Thursday during a hastily convened voice vote, with no debate and no record of how votes were cast.
The Senate must take up the bill by Monday, March 31, the day the SGR deadline expires, to avoid the mandatory and perennially delayed cuts to physician reimbursements, which have grown over the decade to represent a 24% reduction in Medicare payments to physicians.
It's not clear how the bill will fare in the Senate. Calls Thursday to the media office of Senate Majority Leader Harry Reid, (D-NV), were not returned. House Speaker John Boehner, (R-OH), said at a media availability on Wednesday that Reid had agreed on the bill.
So far, the bill has drawn no public response or veto threats from the White House or comments from the Department of Health and Human Services. Centers for Medicare & Medicaid Services Administrator Marilyn Tavenner has repeatedly and firmly said that the Oct. 1, 2014 start-up date for ICD-10 will be met. CMS officials said Thursday that they do not comment on pending legislation.
The House vote for a temporary fix for the reviled SGR came as no surprise. It became apparent earlier this month that another Band-Aid would be applied to the SGR when House Republicans insisted that plugging the then-estimated $122 billion cost of a permanent fix be paid for by delaying for five years the implementation of the individual mandate under the Patient Protection and Affordable Care Act. Senate Democrats rejected the proposal and everyone braced for another last-minute fix.
The American Medical Association has for months been calling for a delay and even a rescinding of ICD-10 implementation, but even the inclusion of a one-year delay on the mandate until Oct. 1, 2015 did not mollify AMA President Ardis Dee Hoven, MD, who had made a full repeal of the SGR the association's top priority.
"The American Medical Association is extremely disappointed in (Thursday's) House action to give up on SGR repeal," Hoven said in prepared remarks. "There was bipartisan, bicameral support for reform this year, yet too many in Congress lacked the courage and wherewithal to permanently fix Medicare to improve care for patients and provide greater certainty for physician practices. Congressional leadership had to resort to trickery to pass an SGR patch that was opposed by physicians."
ICD-10
Even though the stop-gap fix for SGR was widely expected, the 11th hour inclusion of the delays to the two-midnights rule and ICD-10 stunned even seasoned Congress-watchers.
"They had been working on this total reform package of SGR for over a year with a lot of parties from the physician community and then this blows up at the last minute," saidSharon F. Canner, Senior Director of Public Policy at the College of Healthcare Information Management Executives. "I heard the press accounts about rural hospitals that weren't ready. Well, it's never going to be perfect. Perfect is the enemy of the good. The cost of this is enormous in terms of systems that hospitals have ordered and trained staff."
Canner says the ICD-10 delay was put in the bill as a sop to specialty physicians' groups who were angry because Congress had squandered another opportunity to find a permanent fix for the SGR. "It was something they were unhappy with and so they came to the leadership and asked them to pull this," Canner says.
"The leadership said 'no we can't do this. There is money attached, but is there something else that you want?' and they wanted a delay in ICD-10. Meanwhile, the AMA which has been strongly pushing for a delay on ICD-10 decided that they did not want this SGR patch. They said there has been a lot of good bicameral bipartisan work done to finally get rid of this SGR so that we don't have to come back every year with the same fire drill. AMA is on our side for a little while, but we don't know for how long."
The ICD-10 deadline had already been pushed back one year to 2014, and CMS has estimated that the cost of delaying it another year could range from $1 billion to $6 billion.
Two-Midnights Rule, and RAC
The provision to delay implementation of the two-midnights rule until March 31, 2015 was greeted with cheers at the American Hospital Association, which made no bones about its lobbying efforts on H.R.4302. "The AHA worked to ensure that there would be relief on the two midnight policy and we are pleased it was included in the bill," the association said in response to a query
However, the provision left a government watchdog group howling. The Council for Citizens against Government Waste says CMS had already suspended recovery audit contractor post-payment reviews for the past six months. A year-long extension of the suspension provided in H.R.4302 means that the RAC program would be on hiatus for 18 months, costing taxpayers billions of dollars in undetected overcharges to hospitals and other providers.
"The inclusion of the RAC suspension language is ironic given that the CMS finally released its overdue FY 2012 Annual Recovery Audit Contractor Report to Congress, which documents the RACs' monumental record of success in recovering billions in improper payments," CCGW said in a media release. "Auditors recovered $2.3 billion in erroneous Medicare payments in FY 2012, up from $797.4 million in FY 2011, and the contractors had accuracy scores of between 92% and 97%."
CCGW noted that the RAC program has "clawed back" more than $7 billion in improper payments since 2009. The watchdog group cited a Department of Health and Human Services report last December showing that since CMS began meddling with the RAC program, improper payments in Medicare rose by 12.7%, from $44.3 billion in FY 2012 to $49.9 billion in FY 2013.
'Really Bad Governance'
"This must-pass patch that has to be done once every whenever is another opportunity for bad language to be grafted onto this must-pass bill at the 11th hour, which is exactly what we saw today," says Leslie K. Paige, vice president, policy & communication at CCGW. "It is really bad governance. I can't say it any other way. It doesn't matter if it is Republicans or Democrats. This is dysfunctional government at its worst and we saw it today."
"They ended up doing a voice vote, which is the least accountable way to pass a very significant piece of legislation which had a lot of moving parts and a lot of other provisions included in it which no one fully understands what the implications are and the costs associated with them. But once again a lot of members of Congress crowded around a bill they know they had to pass and they're sticking a lot of stuff into it and then they have the temerity to take a voice vote on it a few days before the deadline arrives. It's insane."
