Physicians and attorneys—uncommon allies—support a Georgia law that creates a barrier between doctors and "ancillary" payer guidelines in the Patient Protection and Affordable Care Act which could potentially be used as evidence in medical malpractice lawsuits.
News that the Medical Association of Georgia and trial lawyers are united in their support of a new law that provides limited malpractice protections to physicians left some observers at the Capitol contemplating biblical prophecy.
"When their lobbyist and I testified together in support of this bill, one House member suggested that the committee should adjourn so that all of the members could get home before the locusts arrived," says William T. Clark, director of Political Affairs with the Georgia Trial Lawyers Association.
"He was joking, I think."
The "Provider Shield" bill (HB499) was signed into law on Monday by Georgia Gov. Nathan Deal. MAG and backers say it creates a barrier between Georgia doctors and "ancillary" payer guidelines in the Patient Protection and Affordable Care Act which potentially could be used as evidence in medical malpractice lawsuits.
MAG President W. Scott Bohlke, MD, said the new law will protect "physicians in the state from some unreasonable and unnecessary standards and legal liabilities."
"These guidelines, including factors like healthcare quality measures and payment adjustments and value-based payment modifiers, don't have any direct ties to the medical profession in Georgia," Bohlke said in prepared remarks. "These are simply cost management tools for the federal government and other third-party payers."
The shield law is being touted as the first in the nation and is based on model legislation crafted by the American Medical Association's Advocacy Resource Center.
AMA board member Patrice A. Harris, MD, said the law "makes it clear that federal standards or guidelines designed to enhance access to high-quality healthcare cannot be used to invent new legal actions against physicians."
"The decisive action of Georgia lawmakers holds the line against medical liability abuse and helps avert more civil actions against physicians, which increase medical liability insurance premiums and reduce access to health care for Georgia's patients," Harris said in prepared remarks.
Under the shield, evidence related to government and private payer guidelines won't be admissible in court, can't be used as the standard of care, and can't be used as a presumption of negligence in any malpractice lawsuit.
Clark says trial lawyers were "glad to partner" with physicians in support the bill because the protections it extends against malpractice suits are limited and should not affect patient safety.
"While we work steadfastly to shield patients from negligent medical care, especially given that 98,000 Americans die annually from preventable medical malpractice, we did not mind helping the physicians enact a bill that will prevent someone from suing a doctor for the doctor's failure to comply with a payment guideline, something that has nothing to do with the real question of whether the doctor failed to comply with the medical standard of care," Clark wrote in an email exchange with HealthLeaders Media.
Bohlke says the law will "ensure that Georgians have access to the highly trained physicians they need by creating a sustainable and more favorable practice environment."
Clark notes that it is "not a safe harbor for physicians who have failed to meet the appropriate standard of care when practicing medicine in Georgia."
"HB499 will not prevent a patient from suing to hold a doctor accountable if he or she fails to follow guidelines relating to the quality of care they are to provide or guidelines relating to best medical practices with which they are supposed to comply," he says.
"The only thing HB499 will do is to prevent a patient from suing a doctor because the doctor did not follow a federal payment guideline. No one in our Association is aware of there EVER being a medical malpractice case based on a doctor's failure to meet a payment guideline. So, restricting the ability to do that through this bill will not create any problems for any patient prosecuting a case of medical malpractice in Georgia."
To win the trial lawyers' support, Clark says Georgia lawmakers made the bill "go both ways so that it does not just shield doctors from having a patient assert that the doctor's failure to comply with a payment guideline was evidence of malpractice. The bill also shields a patient from having a doctor assert that his or her compliance with such a payment guideline is evidence that the doctor provided appropriate care to the patient."
"We took the position that what's good for the goose must also be good for the gander," Clark says. "And fortunately, the General Assembly agreed with us."
The shield law is not the only example of Peach State doctors and trial lawyers working together this year for the common good of Georgians. Clark notes their united effort to defeat SB141, which would have replaced medical malpractice jury trials with administrative hearings.
"It is an unworkable and unconstitutional alternative to jury trials that has failed miserably in some European countries where it has been tried," Clark says.
"And, it is based on a fallacious premise that says doctors spend 25% of their time performing unnecessary medical tests and medical procedures, something that is impossible in this day and time when managed care runs medicine and prevents doctors often from being able to perform even absolutely medically necessary tests and procedures, much less from being able to do unnecessary tests and procedures."
"Moreover, if you buy their premise, then you have to accept that that means doctors are committing insurance fraud, Medicaid fraud and Medicare fraud for billing for all those unnecessary tests and procedures. You and I both know that they are not doing that. And, that was a point we were able to agree on with our friends at the medical association. And, we agreed that the proposal was not going to bring down costs of malpractice insurance or costs of healthcare."
So, cooperation can occur between these two hostile camps. But before we break out the tie-dye shirts and sway together to Kumbaya, remember that trial lawyers and physicians will continue to eye one another with suspicion in state houses across the nation.
"We have worked together on another bill or two but it's rare because they spend way too much of their political capital trying to insulate physicians from accountability," Clark says. "So, there are instances where we work together. But, again, remember the locusts."
The federal government's inpatient admissions guidelines and growing claims denials are heaping pressure on hospitals to treat Medicare patients in the ED rather than admit them. Meantime, the severity of illness is rising, says the American Hospital Association.
Hospital emergency departments are treating growing numbers of sicker Medicare patients who require more complex and expensive treatment regiments, the American Hospital Association reports [PDF].
"The drivers [are] both the aging demographic, but also just that people are getting sicker. Chronic diseases are skyrocketing," says Caroline Steinberg, AHA's vice president of trends analysis.
"A lot of it has to do with lifestyle factors like obesity. We did look to see if the aging of the Medicare population was driving this and we didn't find a big change in terms of age. We did find that people are simply getting sicker. That is what a lot of the researchers say, that most of the chronic disease burden is related to lifestyle factors, exercise, weight, that sort of thing."
The AHA says data shows that between 2006 and 2010, the severity of illness of Medicare patients in the emergency department increased, as did the rate of use, a trend that policymakers fear is leading to higher spending with inadequate reimbursements.
Steinberg says hospitals want the federal government to acknowledge what the data clearly shows.
"We would just like recognition by [the Centers for Medicare & Medicaid Services] that patients are in fact getting sicker and that it is not related to changes in the coding claims, but that we really are seeing patients getting sicker," she says. "We have run into this problem in the inpatient setting as well, where CMS doesn't want to pay for rising acuity levels."
The federal government's more stringent inpatient admissions guidelines and growing claims denials are also putting more pressure on hospitals to treat Medicare patients in the ED rather than admit them.
"We are seeing an increase by audits by the [recovery audit contractors] and other Medicare auditors that are denying admission for short stays so there is huge pressure on hospitals not to admit patients unless they are very sure that those cases can be fully justified through medical necessity," Steinberg says.
"Nobody is questioning whether the care provided was medically necessary. They are just questioning whether or not it was provided in the right setting."
CMS in March said it would change its policy of flatly denying any reimbursements to hospitals that provide medically necessary care determined by auditors to have been delivered inappropriately in an inpatient setting. While that will allow hospitals to re-bill Medicare for hundreds of millions of dollars in uncompensated care, Steinberg says re-billings can only date back one calendar year.
"Unfortunately most of the RAC denials are occurring beyond a one-year timeframe. You can do it, but it is not going to help because that's when all the denials are happening," she says.
The AHA report is limited to Medicare claims data, but Steinberg says the advent of expanded health insurance coverage in 2014 under the Affordable Care Act means that EDs will probably see an uptick in usage from other demographics "as more patients become insured and there is still limited access to primary care in many areas particularly in poor neighborhoods."
"We haven't looked at what is going on in terms of other populations, but we would imagine that everybody is getting sicker because it's not like it all happens the day you enter the Medicare program. The obesity and the sedentary lifestyle and the high-stress environment—all those things are risk factors long before you enter Medicare, and a lot of that is exacerbated in the Medicaid population," Steinberg says.
The AHA report, based on an analysis of Medicare claims data conducted by The Moran Company, also found that use of the emergency department by Medicare/Medicaid "dual-eligible" patients is rising, and; EDs are serving more Medicare patients with behavioral health diagnoses.
Medical schools will boost enrollment 30% by 2017 to ease the nation's physician shortage, but that won't do much good if the federal government won't provide funding to expand residency slots, a new survey of the nation's medical school deans finds.
"Our medical schools have fulfilled their commitment toward taking the first step in addressing the physician shortage," says Christiane Mitchell, director of federal affairs for the Association of American Medical Schools. "Now we have to ask Congress to help us take the second step to make sure all of those new medical school graduates have a residency training position."
The 9th annual Medical School Enrollment Survey from the AAMC's Center for Workforce Studies found that first-year medical school enrollment is projected to reach 21,434 in 2017-18—a 30% increase above first-year enrollment in 2002-03, the baseline year used to calculate the enrollment increases that the AAMC called for in 2006.
In the survey, however, 40% of the medical school deans expressed "major concern" about enrollment growth outpacing growth in the number of available residency training positions. The 2013 annual match of medical school graduates with residency slots was only the second time there were more unmatched U.S. seniors than unfilled positions; the first time was 2010.
The insufficient number of residency slots means that some unlucky medical school seniors will graduate deeply mired in student loan debts but with nowhere to go. " You cannot practice medicine in the U.S. unless you complete a US residency training program," Mitchell says. "In fact, this year already we started to see a few students not match to residency position because there simply weren't enough."
The cost of medical residencies varies greatly depending upon the specialty, but Mitchell says the "back of the envelope" average is about $150,000 per residency slot. AAMC has recommended a 15% increase in the number of residency slots over the next decade, which would cost about $9 billion.
Unfortunately, Mitchell says, there is little support for the funding among federal elected officials.
"It is going to be an enormous challenge," she says. "In fact what we worry about most of all now is that not only are Congress and the White House not very interested in spending more money on graduate medical education, all of their deficit reduction proposals, Republicans and Democrats, Congress and the White House, have all put in cuts in current support. It is contradictory to efforts to make sure that there are enough doctors for Medicare beneficiaries and all of the folks who are getting coverage under healthcare reform. It's not consistent."
A breakdown of the survey found that 62% of the enrollment growth will occur in the 125 medical schools that were accredited as of 2002, 31% will occur in schools accredited since 2002, and 7% will come from schools that are currently applicant or candidate schools with the Liaison Committee on Medical Education. Fifty-five percent of the 4,946 new positions projected by 2017 are expected to come from public medical schools, with the greatest growth occurring in the South, where schools account for a 46% of the increase between 2002 and 2017.
Even with the challenges of funding and little support from Washington, D.C., Mitchell says medical schools are encouraging students to gravitate towards primary care, especially in this new era of payment and care delivery reforms.
"If you look at the payment changes that were made under the Affordable Care Act, even Medicare has realized that they are not paying primary care adequately so they are saying 'we value primary care and we need to put our money where our mouth is,'" Mitchell says.
"The [PPACA] has started that process and there is going to be an ongoing look at how they can insure that primary care physicians are being reimbursed fairly."
"The other thing is that we have this new evolving delivery system that emphasizes accountability. You have an accountable care organization or a patient-centered medical home," she says. "Primary care physicians have the opportunity to be not just leaders in this new model of delivering care but ultimately they are at the center of that delivery system."
"You do see a growing interest among medical students in a primary care career because they view it as a new role and purpose and a new stature associated with these new delivery models and that is improving the attractiveness of the primary care career. But you also have to remember that the new generation of physicians is also looking carefully to ensure their work and personal life are in balance and a primary care career can challenge that balance. It's money and personal perspectives and professional evolution all in play."
As healthcare delivery moves toward value-based reimbursements, medical directors at physician practices are increasingly shouldering duties tied to monitoring quality metrics such as patient safety and satisfaction, a new survey from the Medical Group Management Association shows.
"As we understand the industry is moving towards a value-based reimbursement model we are seeing that permeate and migrate into compensation methodologies as well, for many good reasons, " says Todd B. Evenson, director of data solutions for Englewood, CO-based MGMA.
The survey found that 40% of medical directors report duties that include monitoring quality metrics.
"It is a strong tactic for many organizations to align compensation methodologies with reimbursement methodologies, " Evenson says. " As we look toward the value-based environment, obviously quality and cost are the two biggest components in that equation. We have a snapshot in time with this survey, and my expectation is that it would continue to evolve as the industry moves closer towards more providers getting paid based on value versus a production level. "
The survey includes responses from 1,422 medical directors in 239 medical organizations, including 142 single-specialty practices and 97 multispecialty groups from all across the nation. Among the respondents,
54% worked in physician-owned practices
27% worked in hospital- or integrated delivery system-owned practices
17% were in some other ownership model
Evenson says this shifting dynamic will also require a new relationship between medical directors and practice administrators. " It is probably more important now than ever to have a strong physician administrator team and have a strong understanding of a common goal, " he says.
"In the past if it was production, we focused on patient flow and efficiencies in the practice. But in the new environment it is delivering value and clinical quality. There is going to have to be a movement within the organization to ensure there are harmonized activities and that the practice can deliver the greatest quality possible. "
Compensation and time allotted for medical director duties appears to vary depending upon the ownership of the physician group. Respondents in this survey tended to represent medical directors working in physician-owned practices, where Evenson says " the preponderance of their activities will still be in that clinically based care because they are delivering face-to-face contact with patients. "
"The preponderance of what they are earning is going to be in the space of their traditional compensation model of production. With that being said, on the side of the medical directorship there is a very different modes for how they are being compensated, " he says.
The MGMA survey focuses on medical directors who spend six hour or less on their directorship or administrative roles. " For the primary care folks, for example, about 35% of them are paid at an hourly rate, about 40% are paid at a monthly rate, and 23% are paid at an annual rate in this survey, " Evenson says.
"How they are being reimbursed or compensated is a function of their looking at the clinical aspects of the practice, whether that is patient satisfaction metrics, the quality metrics, " Evenson says.
"That might even be provider and staff satisfaction as well. They are working with a team of physicians to develop policies and guidelines for delivering the care in their organizations. That is really where we are seeing these folks fitting in in terms of how they are being compensated. "
While the roles appear to be same for medical directors at physician-owned practices and hospital-owned practices, Evenson says the biggest difference is the amount of time dedicated to the directorship duties.
"In a hospital, they would spend more time on the directorship role with an annualized amount of compensation as being one of the leaders in the health system, " he says. " They would be directing that clinical care across a multitude of physicians whereas in a smaller single specialty practice the amount of time that can be spent on that is dramatically reduced. "
Two years after an EF5 tornado flattened Joplin, MO and gutted St. John's Regional Medical Center, the new Mercy Hospital Joplin is being built to stand strong against natural disasters with a host of upgrades. Storm-hardened windows will be the facility's centerpiece.
May 22 marks the second anniversary of the devastating EF5 tornado that flattened Joplin, MO, left 161 people dead and injured more than 1,000 people.
The town of about 50,500 souls plans to honor its dead and commemorate the catastrophe at a public ceremony that will include a moment of silence at 5:41 p.m., marking the minute in 2011 when the twister first touched down on the western edge of the town and began its devastating tear.
While the ceremony will honor what the region lost on that horrible day, Joplin city planners say they will use the event to highlight the progress made in rebuilding and to subtly shift the focus toward the future. Rebuilding and looking to the future are also the focus at the new Mercy Hospital Joplin, which is planning a March 2015 opening for the $450 million, 900,000-square-foot, 260-bed hospital that will replace the storm-gutted St. John's Regional Medical Center.
Despite the quick thinking and valiant efforts of St. John's staff two years ago, five patients and one visitor inside the hospital died from injuries and other storm-related factors when the tornado blew out windows, peeled off the roof, and shut down electrical power, back-up generators, and communications.
Immediately after the storm a team of engineers used the unique circumstances provided by the catastrophe to comb the gutted hospital and identify the weak links.
"We arrived a day after the storm and it took us three or four weeks just to assess the damage, make sure the facility was safe to go into, and document all of the issues that the facility had," says John Farnen, who is overseeing the new hospital construction as Mercy's executive director of strategic projects.
"We lost all the power. No utilities. No emergency generator power. We lost the roof and exposed the outside. It was catastrophic damage. They got maybe a 10-minute warning and it was [in] a matter of seconds that it blew past."
Mercy Hospital Joplin is being built with an eye toward those lessons learned at St. John's and includes $11 million in upgrades to "harden" the new hospital against natural disasters, all of which will add about 2% to the total construction cost.
The centerpiece of the storm hardening will be the windows, most of which were knocked out at St. John's and which sent glass shards and 200 mph winds inside the building, blowing out walls, doors and ceilings. The only windows to survive the 2011 tornado were those with a reinforced laminate in the hospital's behavioral health unit, which limited damage and injury inside that unit.
With that lesson learned, Mercy is working with contractors to invent windows and frames with unprecedented strength. "The new window technology actually doesn't exist. We are doing testing right now to get it to pass and achieve our goals, but most of the hardening is just [applying] the good engineering practices in today's world," Farnen says.
The new hospital will have three types of storm-hardened windows. Lobbies and other public areas that can be evacuated quickly will have windows with a rating for 110 mph winds, stronger than the typical 90 mph rating for commercial buildings. Mercy is adding a film of plastic laminate to prevent the glass from shattering. Patient rooms will have laminated glass designed to withstand winds of 140 mph. For the intensive care unit, technicians in Minnesota are developing windows that will withstand impact from a 15-pound, 2x4 wooden missiles at 100 mph, which replicates debris flying in a 250-mph tornado.
"There is a field-applied safety laminate [that] will stand up a lot better than normal glass," Farnen says. "It will keep the glass from breaking up into shards and flying all over so that if the glass does give, the whole piece will pop out and it doesn't become a weapon or projectiles flying through the air."
When tornado warnings are issued, hospital staff will move patients and visitors into the interior.
"Every floor of this hospital will have a center core area where the ceilings will be reinforced and the interior walls will be reinforced and the end of the core area will have metal storm doors," Farnen says. "Everybody who can be moved will be moved into the center core area. The patients that can't move, that is where we have the 250 mph graded glass and we will defend those in place."
Other notable upgrades include:
Refuges on each floor with reinforced walls and ceilings, where tiles and lights are secured as if in an earthquake zone, with heavy storm barriers that can be closed to secure the safe zones. Rods in the door hardware will penetrate into the cement above to hold against intense gusts. Elevators will reach the basement where widened corridors can safely hold staff and patients.
A half-buried building to house emergency generators and diesel tanks, and a reinforced 450-foot tunnel that will provide a conduit for water, power, gas, and data communications lines. Hallways and stairwells will have battery-operated backup lights. Life-support systems such as ventilators and neonatal bassinets will have battery backup systems.
Emergency grab bags strategically placed around the hospital and containing critical supplies such as flashlights, batteries, first aid kits, gloves, crowbars and even snow shovels to clear passageways clogged with rain-soaked debris.
A storm-hardened pre-cast concrete exterior with a poured concrete roof that will hold tight in a gale, unlike the metal decking that blew off the old hospital, and a penthouse holding mechanical units that will be protected by heavy walls of water-proof boards.
Storm hardening is taking place at Mercy hospitals in Springfield, and Oklahoma City, and it's planned for other hospitals with the misfortune of being located along Tornado Alley.
Farnen says the storm-hardening will protect patients, visitors, and staff and will also ensure that Mercy Hospital Joplin will be the last light on for emergency services.
"There is an awful lot of stuff we learned and an awful lot of stuff we are doing and it will be interesting to see how well the facility performs when all of these elements come together and hold up together when they're all assembled," he says. "Saving patients lives is priority No. 1, but if we can keep the building intact that's great too."
When it comes to bond ratings, bigger is still better for not-for-profit hospitals.
Five of six not-for-profit hospitals that saw their bond rating downgraded by Moody's Investor Service in the first quarter of 2013 were smaller providers with less than $500 million in revenues, the ratings analysts said in a new report.
Lisa Goldstein, associate managing director at Moody's, concedes that the report is not breaking news.
"We have said for a while that small hospitals, as we look at them through the lens of a rating, are more vulnerable and susceptible to the changes in the industry which heretofore would go at a glacial pace. Now things are picking up," she says.
Fueling that acceleration, Goldstein says, is the looming implementation of key provisions and reimbursement models in the Affordable Care Act that take effect on Jan. 1, 2014.
"It's interesting to us that in the first quarter, five of the six downgrades were of small providers and two of the three upgrades were of more sizeable providers. The numbers are different from the first quarter of 2012 but the message is not new," Goldstein says.
During the first quarter of 2013, Moody's reported that it affirmed 55 ratings, representing 86% of all rating activity and affecting approximately $25.3 billion in debt. Moody's expects more downgrades than upgrades in the second quarter of 2013, as there are already three hospitals under review for downgrade.
Smaller healthcare providers are at a disadvantage when compared with larger hospitals and systems, Goldstein says, because of their limited leverage with payers and vendors, lack of economies of scale, and over-reliance on a few key physicians.
That is not to suggest that larger not-for-profit hospitals and health systems are skating along. Moody's outlook for the entire sector is negative.
"We would say that over the next one to two years things are going to be challenging for everyone, for hospitals of all sizes," Goldstein says. "It is not that we have 'X' outlook for the big systems and 'Y' outlook for the small guys. It's negative for the whole industry. Things will get tougher. Things already got tougher April 1 with sequestration. That wasn't a change in how healthcare is delivered. That was just a top-line 2% cut. With or without sequestration things will be tougher over the next couple of years. We are in a big transformational period right now."
Moody's rates about 470 distinct borrowers, ranging from individual hospitals to health systems with dozens of hospitals. Goldstein estimates that Moody's ratings "touch about 1,200 hospitals."
In the first quarter, Moody's downgraded $988 million in not-for-profit healthcare debt and upgraded $658.1 million, for a ratio of 1.5 to 1. The ratio for downgraded issuers versus upgraded issuers during the quarter was 2 to 1 ratio—the same ratio as in the fourth quarter of 2012, when there were 10 downgrades and five upgrades. The nine rating changes in the first quarter of 2013 were a decline from the 22 rating changes during the first quarter of 2012, when there was an even split between downgrades and upgrades, Moody's announced.
Goldstein predicts the ongoing rush towards mergers and acquisitions and other provider consolidations will accelerate in the coming months and years.
While there was some softness in M&A activityoverall in the first quarter of 2013, according to a report from research firm Irving Levin Associates, Goldstein is seeing an upswing.
"The climate we are in for consolidation is pretty heavy and it seems like once a week there is an announcement about somebody talking about somebody," she says. "We are in the second wave of heavy M&A activity. The first wave was about 12-13 years ago. Now it is back. A lot of this is driven by reimbursement top-line revenue pressures. People say we are going to be better if we are part of a bigger system, or we are big but we need to be bigger for scale. We are in it as we speak, this rapidly accelerating M&A period."
State regulators in Pennsylvania on Monday approved Highmark Inc.'s $1 billion acquisition of West Penn Allegheny Health System, clear ing the way for the creation of what its backers says will be one of the nation's largest integrated healthcare systems.
Approval from the Pennsylvania Insurance Department came laden with conditions, but Highmark President/CEO William Winkenwerder, Jr., MD, said leadership at the newly named Allegheny Health Network was 'comfortable that we will be able to well comply with all the conditions that have been outlined in the commissioner's order.'
'Let me just say that many of these conditions were things that we would have done in any event,' Winkenwerder told reporters at a Monday afternoon teleconference. 'We also believe that certain of the conditions are very positive in that they set forth certain behaviors and characteristics of a more competitive marketplace in healthcare and are really meant to assure that monopoly-like behavior doesn't occur. That is very consistent with our own thoughts.'
The Allegheny Health Network will employ about 1,200 physicians and will include the five hospitals in the West Penn Allegheny system, Saint Vincent Health System in Erie, pending court approval, and Jefferson Regional Medical Center in suburban Pittsburgh, Winkenwerder said.
'In our case, what we have created with this establishment of Allegheny Health Network with Highmark is arguable the second- or third-largest integrated delivery system in the United States. We quickly move up to the top of the list in terms of size and scope,' Winkenwerder said.
'What that creates, that integration, is an opportunity for clinicians and clinical leaders to work hand in glove with those that finance care for the population when planning things so that there is less duplication and there is better placement of services for the entire population that it serves. Right off the bat you have the opportunity to plan things more efficiently and effectively and with less redundancy.'
'At the patient care level when you have these cooperative entities working together, and that is the key, a cooperative relationship and attitude, there is the opportunity to make the patient care experience better and take some of the hassle and redundancy out of what people typically experience today.'
Highmark's provider division leader John Paul, who was named president/CEO of the new network, said the integrated care model is needed because 'obviously the current system hasn't worked very well.'
'The core of the problems we have as a country is the fact that care is so fragmented,' Paul told reporters. 'Care traditionally has been physician- and facility-focused. With modern technology and information technology, our focus is going to be on prevention and wellness as well as bringing people together to the extent that we can in one location to receive all their care, and when they can't receive it in that location to connect those clinicians and a record of their clinical services through an information technology backbone that can be transmitted internationally, not just locally.'
'Coupled with that we are very unique,' Paul says. 'This is the first time in this country where a very large insurer is entering into the provider business to the extent that we are here at Highmark. So our incentive is to be sure we keep care in the most affordable setting, keep care local, [and] make it very convenient for our enrollees. Thus we can keep that membership.'
The deal is the latest twist in the battle for market share in Western Pennsylvania with rival University of Pittsburgh Medical Center. Winkenwerder said Monday Highmark hopes to have a relationship with UPMC going forward, even though their current contract will expire at the end of the 2014.
UPMC appeared less enthusiastic and issued a statement following the commissioner's approval noting that 'Highmark's ownership of a provider network introduces more complicated insurance choices for employers and consumers.'
'We urge Highmark to immediately join with UPMC in preparing its subscribers for the transition that will take place on Dec. 31, 2014, when the UPMC-Highmark contract expires,' UPMC's statement read. 'It is important that consumers understand these changes so they can take the steps needed to continue accessing their preferred doctors and hospitals. We urge Highmark to work with UPMC now as there will be no new UPMC contract or extension when the current one expires in just 19 months.'
Monday's approval by Pennsylvania Insurance Commissioner Michael Consedine caps a process that began with Highmark's initial filing in November 2011 through its nonprofit corporation, UPE. Consedine called the review of the deal the most complex and extensive in his agency's history, with a record that includes more than 64,000 pages of reports and analytical data, more than 10,000 pages of public comments and more than six hours of public testimony.
'This is a landmark transaction,' Consedine said in prepared remarks. 'We were cognizant that our review and the order we issued today may serve as a model for similar transactions across the state and country going forward.'
Healthcare economist Adam Powell, president of Boston-based consultants Payer+Provider Syndicate, said in an email exchange with HealthLeaders Media that western Pennsylvania now has two major integrated healthcare systems with products that bundle healthcare financing and delivery.
'Highmark has some nascent experience in operating an integrated delivery system, as it previously acquired Jefferson Regional Medical Center in March 2013 and announced the creation of a medical mall in Wexford, PA. Highmark's ownership of multiple sites of service will enable it to more effectively control the cost of care that its health plan members receive,' Powell says.
'The formation of integrated delivery systems is rapidly occurring across the United States. In Massachusetts, Tufts Medical Center is in the process of founding the insurer Minuteman Health Initiative, Partners HealthCare acquired Neighborhood Health Plan in 2012, and Boston Medical Center has offered coverage through its BMC HealthNet Plan since 1997. We also saw somewhat similar activity last year in Texas, with the merger of Baylor and Scott & White. I foresee that we will continue to see vertical integration between the financing and delivery of care.'
The $1 billion deal includes the $475 million in the initial purchase, along with the acquisition of $528 million in outstanding bonds, about $100 million less than initial estimates. Highmark officials said they anticipate refinancing the debt in the coming months.
Nearly half of all working-age adults, about 84 million people, went without health insurance at some point in 2012 and another 30 million people had out-of-pocket costs that were so high, they were underinsured, a survey released by The Commonwealth Fund shows.
"This new report reveals some good and unprecedented news; a decline in the number of young adults who are uninsured, most likely due to the [Patient Protection and] Affordable Care Act's requirement that children under age 26 be allowed to join or remain on their parents health plan," The Commonwealth Fund President David Blumenthal, MD, said Thursday at a teleconference with reporters.
"But overall, the survey shows the continuation of the bad news that sparked the moves to reform our dysfunctional healthcare system. To begin with, large numbers of uninsured Americans—millions—are facing problems getting the help they need. They are financially squeezed by the burdens of high deductibles and far too many Americans are hampered by medical debt. These findings point clearly to the need to move forward with implementation of the law," Blumenthal says.
The percentage of people who were uninsured, underinsured, or had gaps in their health coverage grew steadily between 2003 and 2010, with the number of underinsured nearly doubling from 16 million in 2003 to 29 million in 2010. Between 2010 and 2012, however, the numbers of underinsured adults leveled off, growing to 30 million, the survey found.
That is partly because of slower healthcare cost growth and lower overall health spending by strapped consumers. However, provisions in the PPACA that require insurers to cover preventive care at no cost to patients are also making healthcare more affordable for many consumers, the report says.
The telephone survey was conducted in English or Spanish by Princeton Survey Research Associates International from April 26 to Aug. 19, 2012 and included a random, nationally representative weighted sample of 4,432 adults ages 19 and older.
Pollsters projected that 80 million people did not go to the doctor or did not get a prescription filled in 2012 because they couldn't afford it. Medical debt also continues to burden many households, with 41% of working-age adults, an estimated 75 million people, having problems paying their medical bills, up from 58 million in 2005.
Nearly one in five people were contacted by a collections agency for unpaid bills, and 16% had to make lifestyle changes because of medical bills. More than 40% of survey respondents who reported having trouble with medical bills, an estimated 32 million people, had a lower credit rating because of unpaid bills and 6%, an estimated 4 million people, declared bankruptcy because of their bills.
Major provisions of the PPACA do not take effect until 2014, but the survey estimated that 87% of the 55 million people who were uninsured at some point in 2012 would be eligible for some form of subsidized insurance either through the expanded Medicaid rolls or through the health insurance exchanges.
In addition, as much as 85% of the 30 million underinsured adults in 2012 might be eligible for either Medicaid or subsidized health insurance with reduced out-of-pocket costs under the PPACA.
The survey also found that:
Nearly three-of-four working-age adults with incomes of less than $14,856 a year for a person or $30,657 for a family of four — an estimated 40 million people — were uninsured or underinsured;
Nearly 60% of adults with incomes between $14,856 and $27,925 for an individual or between $30,657 and $57,625 for a family of four — or 21 million people — were uninsured or underinsured;
Uninsured adults were less likely to receive recommended preventive care. Only 48% of women who were uninsured during the year received a mammogram compared to 77% of those who were well insured all year.
Forget Powerball. The odds of becoming a millionaire are much better for Medicare fraud whistleblowers.
Health and Human Services Secretary Kathleen Sebelius this week unveiled a proposed rule that would pay rewards of nearly $10 million to Medicare beneficiaries and other whistleblowers whose fraud tips identify and recover funds.
"President Obama has made the elimination of fraud, waste and abuse, particularly in healthcare, a top priority for the administration," Sebelius said Wednesday in prepared remarks. "Today's announcement is a signal to Medicare beneficiaries and caregivers, who are on the frontlines of this fight, that they are critical partners in helping protect taxpayer dollars."
The announcement comes as HHS bolsters other antifraud initiatives this month, including the expansion of the Senior Medicare Patrol, a volunteer-based program that educates Medicare beneficiaries on how to prevent, detect and report Medicare fraud, waste and abuse.
The federal government has recovered more than $14.9 billion in fraud over the past three years, thanks in part to whistleblowers. Under the proposed changes, a person who provides information leading to the recovery of money can collect a reward of 15% of the amount recovered, up from 10% under the current rules. If CMS recovers more than $66 million under the proposed change, the reward is capped at $9.9 million.
The proposed changes are modeled on an IRS program that has returned $2 billion in fraud since 2003, HHS said in a media release.
The proposed rule would also strengthen some provider enrollment provisions including allowing HHS to deny enrollment of providers affiliated with an entity that has unpaid Medicare debt, deny or revoke billing privileges for individuals with felony convictions, and revoke privileges for providers and suppliers who abuse billing privileges, HHS said.
The volunteer-based Senior Medicare Patrol program has since 1997 taught more than 3.5 million beneficiaries how to recognize and fight fraud and abuse. More than 7,000 tips have been called in to the Centers for Medicare & Medicaid Services and the Office of the Inspector General.
To expand the SMP program's capacity, the Administration for Community Living issued new funding that makes each of the current 54 SMP projects eligible for rewards from a pot of up to $7.3 million, HHS said.
Mergers and acquisitions are rampant in healthcare these days as large health systems get larger and use their size and market share to improve efficiencies, coordinate care, reduce costs, and leverage terms with vendors and insurers.
At the other end of the spectrum are critical access hospitals. These tiny, isolated providers by their mission and geography aren't able to tap into the advantages of this bigger-is-better delivery model. So they improvise.
In Montana, rural providers are in the second year of a three-year pilot project that eventually aspires to provide each of the Big Sky State's 48 critical access hospitals with a "better health improvement specialist." Funded by a $10.5 million Center for Medicare & Medicaid Innovation Grant, these specialists will coordinate and improve post-discharge care plans, identify operational inefficiencies, and use data that they collect to proactively target potential health issues to reduce readmissions and emergency department visits.
"We are a support mechanism for these critical access hospitals to identify where failure modes are happening within the healthcare delivery system in their system and their relationships with regional partners," says Denyse Traeder, director of the Frontier Medicine Better Health Partnership, which is coordinating the project.
"Our work with the critical access hospitals identifies where some costs savings can be made and identifies the training and opportunities that critical access hospitals could benefit from to reduce waste, save money, improve care and outcomes and satisfaction."
The project also tries to address the near universal complaint from critical access hospitals that they're left in the dark when patients return to their homes after discharge from larger hospitals.
"That is one of the biggest things that we hear from our partners is we lose track of them," Traeder says. "Half of the time we don't even know if they went in and we don't know when they come back until something critical happens and they are back in the ER. Had we known what had happened to them we could have either helped prevent it or found someone in the community to do some home care."
"Traditionally we've not able to get patients back in their home communities from regional partners not because the regional partners didn't want to but because there wasn't an action plan and they didn't know if the critical access hospital had the capability or if it was an appropriate transfer back," Traeder says.
"We're partnering with regional facilities and opening communications, developing care plans and transfer protocols and those types of documents and procedures that haven't been in place before that will be standardized between critical access hospitals and larger facilities to get those patients back into their home communities because that is where we know they want to be."
The hospitals will use electronic medical records to guide a care team that includes hospital staff, primary care physicians, patients and their families, and health coaches to coordinate daily post-discharge follow up to ensure that treatment regimens such as medication compliance are followed.
If successful, the pilot project hopes to reduce patient costs by 7% to 15% for the three-year period, improve outcomes by 10%, and improve patient satisfaction by 30%. Traeder says many cost drivers have already been identified.
"We are looking at avoidable readmissions. We are looking at ambulatory care sensitive areas, hot spotting them, care coordination and prevention and the number and source of those. Are we duplicating many tests from critical access hospitals to regional facilities and if we are what is the cost," she says.
"Another issue is transportation. We are calling out a fixed wing or a rotary much more often than we need to. Ground transportation would be much more appropriate when one flight is about $15,000. That is going to be a huge cost savings for us. It is going to be tricky because we are going to have to tease out what is appropriate and what is not. But if we can train our staff to appropriately use ground transportation or some of the other interventions we will reduce the costs of those areas. Those are a huge cost that we are identifying."
Another key responsibility of these better health improvement specialists will be to collect data—which has been a particularly nettlesome problem for critical access hospitals.
"It is not for lack of wanting to do it, but there are some real barriers in the way of reporting. It is not apathy but more of a logistical issue," Traeder says. "One of the biggest benefits to the critical access hospitals is that yes we are asking for data which requires some work but we are giving it back to them immediately. It is not collecting data and never seeing it again and not benefitting from it, which is frustrating for people. We are able to gather the data, give it to our analytics partner who runs the numbers and gives it back to them immediately."
"We did a rural operational assessment on 10 critical access hospitals during the last month and they received that data last week. They are able to immediately take that data and start making changes in their system."
While the pilot project focuses on the individual challenges of each critical access hospital, Traeder says the ongoing communication and care coordination is building a sense of community among these tiny and isolated hospitals charged with a vital mission.
"We know there is power in numbers," she says. "One critical access hospital trying to voice a concern over the healthcare system is like an insect screaming in an arena. When we put them together and build this critical access consortium there is power in numbers and that creates a voice for critical access hospitals in Montana."
