Federal inspectors are calling for tighter oversight of waste, fraud, and abuse in Medicare Advantage after a first-ever system-wide audit of the program found wide disparities in vigilance and reporting among the privately run plans.
"Our findings indicate that Medicare Advantage organizations lack a common understanding of key fraud and abuse program terms and raise questions about whether all Medicare Advantage organizations are implementing their programs to detect and address potential fraud and abuse effectively," the report said.
The audit from the Department of Health and Human Services Office of Inspector General reviewed 2009 data from 170 of the 188 Medicare Advantage organizations that represented 4,547 plans nationwide and accounted for 94% of the 10.9 million Medicare Advantage beneficiaries in 2009.
The audit did not name the Medicare Advantage organizations.
Three Medicare Advantage organizations identified 95% of the 1.4 million incidents related to their Part C health benefits and Part D drug benefits that year, while 19% of the organizations reported no potential fraud and abuse. Overall, Medicare Advantage plans sent only 2,656 referrals of potential fraud and abuse for further investigation.
"Differences in the way organizations defined and detected potential fraud and abuse may account for some of the variability in the number of incidents they identified," the audit stated. "While CMS requires MA organizations to initiate inquiries and corrective actions where appropriate, not all MA organizations took such steps in response to incidents they identified."
Auditors recommended that the Centers for Medicare and Medicaid Services take action to ensure that Medicare Advantage organizations effectively monitor fraud and abuse.
Those steps would include:
Determining why some plans reported especially high or low cases of suspected fraud and abuse;
Developing guidelines for plans to define potential Part C and Part D fraud and abuse;
Requiring plans to give CMS aggregate data related to Part C and Part D antifraud, waste and abuse activities;
Requiring Medicare Advantage plans to refer potential fraud and abuse to CMS or other investigators.
In a written response to the audit, CMS Acting Administrator Marilyn Tavenner agreed with most of the findings and noted that CMS has already begun enhanced auditing of Medicare Advantage organizations to detect fraud and abuse. Tavenner said, however, that CMS does not have the statutory authority to require mandatory self-reporting of fraud and abuse by Medicare Advantage organizations.
Medicare Advantage covers about 24% of Medicare beneficiaries and accounted for $115 billion of the total $504 billion in Medicare benefits in 2010, OIG said.
In an era of constrained budgets, however, the program and its mounting costs have come under more scrutiny from the federal government. The Medicare Payment Advisory Commission estimated that CMS spends about 10% more on beneficiaries Medicare Advantage plans than it does for beneficiaries in traditional fee-for-service Medicare.
HHS in its 2010 financial report identified a composite payment error rate of 14.1% for Medicare Advantage programs.
While 33 of the 170 organizations audited detected no fraud or abuse, another 24 organizations identified only Part C fraud incidences and 11 organizations identified only Part D incidents. These 68 organizations covered a total of 571,623 beneficiaries.
For the 137 Medicare Advantage organizations that reported fraud and abuse, the volume varied widely. Fourteen organizations each identified more than 1,000 incidents while 41 organizations identified fewer than 10 incidents, the audit said.
One organization accounted for 78% of the total 1.4 million incidents of potential Part C and Part D fraud and abuse. Excluding the 95% of all reported incidents that were linked to three Medicare Advantage organizations, 134 organizations identified a total of 73,499 potential fraud and abuse incidents in 2009. Of those, 83% were linked to Part C. Those 134 organizations covered 9.9 million beneficiaries in 2009.
Size apparently was not a factor in organizations' ability to monitor waste and fraud. "For example, an organization with more than 250,000 enrollees identified 37 potential Part C fraud and abuse incidents and 8 potential Part D incidents. Another organization, which had fewer than 5,000 enrollees, identified 7,787 potential Part C fraud and abuse incidents and 154 potential Part D incidents," OIG said.
The 134 Medicare Advantage organizations reported 32 different types of Part C incidents in 2009. The most common related Part C was improper coding of services. The organizations identified 25 different types of potential fraud and abuse related to Part D, and inappropriate prescription dispensing was the most common.
Alcohol abuse is a "significant problem" for surgeons in the United States, with more than 15% of respondents in a nationwide survey signaling that they may have dependency issues, the American College of Surgeons reports.
The survey in the February issue of Archives of Surgery found that the rate of alcohol use disorders among the 7,197 responding surgeons is slightly higher than that of the general U.S. population.
For surgeons reporting dependency issues, the survey found there was a "strong association" with problems in personal and professional relationships that included burnout, depression, and medical errors. In fact, the study found that nearly 78% of surgeons reporting a medical error in the previous three months also had issues with alcohol abuse or dependence.
"Our goal is not to scare the public. That is the last thing we want to do. But we also want to say that people are paying a really high price," says Krista L. Kaups, MD, a coauthor of the survey, Prevalence of Alcohol Use Disorders Among American Surgeons.
The study recommends that healthcare organizations and professional associations, including the American College of Surgeons, develop early warning and intervention programs that identify problem drinkers and provide treatment and therapy options. "These findings should also decrease the shame and stigma associated with alcohol abuse or dependence and encourage surgeons to pursue treatment and rehabilitation to promote patient safety and personal well-being," the study said.
"We want people to be aware of this because we want to be able to honestly look at ourselves and say here is the issue we need to support people," said Kaups, chair of the American College of Surgeons Governors Committee on Physician Competency and Health.
Kaups says substance abuse problems may be particularly insidious and difficult for surgeons to admit. "There is the idea that ‘I can take care of crazies and disasters, so I am in control. The alcohol is just to take the edge off because I deal with enough things,'" she says. "We also know that in general, the characteristics we value in our professional lives, things like perfectionism, commitment to patients, those things put people at risk of burnout as well."
Alcohol disorders target female surgeons particularly hard. The survey found that 25.6% of female surgeons indicated that they have alcohol use issues, compared with 13.9% of their male colleagues. By contrast, in the general population, 9.4% meet the criteria for alcohol and substance abuse, including 10.5% of men and 5.1% of women.
"Part of it is that female surgeons on the whole are less likely to be married or in a supportive relationship," Kaups says. "It is changing as we look at the younger surgeons. But the lack of personal and social support is a really key thing when you are dealing with difficult and challenging issues."
The anonymous online survey is the latest in a series of studies the American College of Surgeons has undertaken recently to assess members' stress, burnout, and other job pressures. Kaups says failure to address these problems could have significant repercussions for patient safety and access.
"We have people who are not functioning at their best in terms of taking care of patients optimally," she says. "We find people who are struggling with these issues are less likely to stay in practice. We have a workforce shortage already so we have to figure out how to allow people to function at their best and continue in practice."
The survey was sent to 25,073 surgeons, and the 7,197 surgeons who responded represent a sampling of less than 29%. A critique of the study that also appears in the February issue of Archives echoes the survey authors' concerns that the low response rate could skew the findings.
Edward Livingston, MD, a professor of surgery at the University of Texas Southwestern Medical Center in Dallas, wrote that the response rate was about half the 60% minimum required by some medical journals. Thus, he wrote that it is impossible to say if the problem is being over-reported or underreported.
"Surgeons who abuse alcohol are at risk for livelihood-threatening sanctions should this behavior be exposed. Despite reassurances of confidentiality, questionnaire responses may still be considered risky by surgeons with much to lose," Livingstone wrote.
Livingstone said that several types of bias and error may be at play in any survey, but the most obvious one is nonresponse. "Nonresponse bias is particularly salient when the topic is considered sensitive," he wrote.
Kaups concedes that the accuracy of the survey could be questioned because of the low response rate, but she's standing by the findings.
"This is a huge group of people who we studied. What we don't know and what we can theorize about is a possible sampling bias," she says. "Did we get people who respond who are having issues and feel like they can express themselves, or are these people who feel pretty good about themselves? We don't know but we think it is a reasonable survey. It was anonymous online. People are honest about what they say."
The Obama Administration this week announced a new "memorandum of understanding" between federal bureaucracies that they claim will help rural healthcare providers build their healthcare information technology workforce, which is expected to grow by 20% by 2016.
In a vaguely worded press release, the White House said "the Department of Health and Human Services and the Department of Labor signed a memorandum of understanding to connect community colleges and technical colleges that support rural communities with the materials and resources they need to support the training of Health Information Technology professionals that work in rural hospitals and clinics."
HRSA Administrator Mary Wakefield, RN, said in the media release that: "This memorandum of understanding with our colleagues at the Department of Labor will build on existing collaborations to help ease the challenges of geographic isolation and staff shortages faced by rural communities and help move us toward our mutual goal of Health IT workforce development."
Federal Health Resources and Services Administration officials did not return calls by deadline Wednesday so details remain sketchy.
Randy Smith, president of the Rural Community College Alliance, says he's not really clear on the specifics of the MOU, and only learned of it when HealthLeaders Media called. Still, he's happy the federal government is acknowledging the challenges that rural healthcare providers and educators face.
"Community colleges don't get a lot of attention and [if] you take it another notch further, rural schools get even less attention," Smith says. "We aren't in a media market. We aren't in a population center. The first step in making our case is letting the general public know what we are doing. So we are pleased that the administration is shining a spotlight on community colleges and rural community colleges in particular because we haven't had that before."
There are nearly 1,200 community colleges across the United States, and Smith says more than 60% of them are "rural serving." Those colleges will play a big part in educating the rural healthcare HIT workforce.
"Two-year colleges are really good at responding to the needs of the communities we serve. We are able to change and adapt our academic programs as needed," Smith says. "I don't know of a rural community college that is not actively participating with their local healthcare providers to make sure their needs are met. Without these rural community colleges, many of these allied healthcare professions and first responders and technical programs would not happen. We just would not have those professionals."
Not surprisingly, Smith says the big issue for rural community colleges is funding. "Finances are always an issue but it is not something that can't be overcome with partnerships. The local healthcare providers are very good at working with community colleges to share some of that cost," he says. "So that is an issue but most of the time if they need specific types of healthcare providers they usually step up to the plate and help their community college with the cost. That is happening now."
Finding students, however, is not an issue. Smith says there are plenty of eager students in rural areas who'd love to work in healthcare HIT. However, resources can't accommodate everyone.
It's fairly similar to the nursing shortage," he says. "The students are there. It's just the fact that we have to have the clinical sites, the on-campus facilities and the faculty to produce those professionals. It's the same way with HIT. We know the students are there. We've seen it. But we have to ramp up and have the facilities and faculty and clinical sites to make that happen."
"The availability of clinical sites for rural areas has always been an issue too because of the distances involved," he says. "Our rural hospitals can only take so many students and give them a good experience. Sometimes our students have to travel a ways to more urban or suburban settings to get their clinical experience and that can be a challenge."
"Faculty recruitment is not the highest thing on the list but there are times when recruiting qualified, experienced healthcare faculty to rural areas can be a challenge," he says.
When asked what the federal government can do to help rural community colleges train HIT professionals, Smith had a ready answer: "Obviously grants and funds are always welcomed."
However, he acknowledged that government budgets are tight and that "we have to learn to make do with what we have and do the best we can and try to partner with business and industry."
If the federal government does release more grant money, Smith says that funding should specifically target rural community colleges.
"They will release a grant for a specific program or specific service, but it is hard for us to compete against the urbans and suburbans because they have professional grant writers," he says. "Our folks wear three or four different hats at our rural schools and we haven't had grants targeted for rural schools."
Smith says an RCCA delegation that will include 25 rural community college presidents will visit Washington, DC next week to meet with federal officials on several fronts. If the federal government works with rural community colleges, Smith says, those colleges are capable of producing an HIT workforce.
"Local community colleges are the catalyst for economic development. They are a clearinghouse for information for rural communities," he says. "If we can get those federal agencies to understand that fact, it is a benefit to everybody, including them."
The average per capita cost of healthcare services covered by Medicare programs and commercial insurance grew by 5.28 % in 2011, nearly double the rate of inflation in the larger economy, Standard & Poor's Healthcare Economic Indices show.
A further breakdown of S&P data shows that healthcare costs covered by commercial insurance plans grew by 7.11% in 2011, while Medicare claim costs rose by 2.51%, despite the government plans' older and sicker population.
Healthcare costs easily outpaced the 3% growth in overall inflation as measured by the Consumer Price Index for 2011, according to Bureau of Labor Statistics data.
Robert Zirkelbach, a spokesman for America's Health Insurance Plans, told HealthLeaders Media that commercial plans must contend with cost-shifting and other market forces that do not affect Medicare. He says the cost growth acceleration also could be link to the recovering economy.
"When the acceleration slowed in the last couple of years, a lot of it had to do with the slowdown in the economy," Zirkelbach said. "People were using fewer healthcare services. That also resulted in changes in the risk pool, where younger and healthier workers chose to forego coverage, or when employers were laying off employees it was often the younger workers that tended to be the first to go. So that resulted in a risk pool that tended to be older and have higher healthcare costs."
J.D. Kleinke, a healthcare economist with the American Enterprise Institute, says higher deductibles, co-pays and premiums have been slowing cost growth by forcing healthcare consumers to be frugal.
"The 10-year trend is that healthcare is normalizing," Kleinke told HealthLeaders Media. "The standard deductible 10 years ago was $200. That was the same deductible as in the 1950s. The deductible for health insurance didn't change during a time when everything else in the economy went up by an order of magnitude. The health insurance industry accommodated a huge amount of waste. People used it more than they needed and physicians were more than happy to deliver more care than needed because it was somebody else's money."
"It took 20, 30, 40 years to get out of control. Then the reaction in the 1990s was to blame the doctors and the hospitals and beat them up and do this utilization review stuff, and that didn't work. Now for the last 10 years it's been the demand side," Kleinke said.
The S&P indices also show that month-to-month healthcare cost growth accelerated in December, up from +4.85% in November to +5.28% in December. Commercial plan costs increased from +6.63% in November to +7.11% in December, while Medicare costs increased from +2.15% in November to +2.51% in December.
David M. Blitzer, chairman of the Index Committee at S&P Indices, said in the report that costs are trending back toward acceleration after a lull in November.
"Since the end of the summer we have generally seen increasing annual growth rates, particularly with healthcare costs covered by commercial plans," Blitzer said in the report. "Last month's data, which was through November 2011, showed a modest deceleration; however, December's data has returned to the accelerated pace and this time it affected all types of healthcare costs.
The S&P Healthcare Economic Indices estimate the per capita change in revenues accrued each month by hospital and professional services facilities for services provided to patients covered under traditional Medicare and commercial health insurance programs.
The annual growth rates are determined by calculating a percent change of the 12-month moving averages of the monthly index levels versus the same month of the prior year.
Blitzer said healthcare costs began to accelerate in May 2009 and peaked in May 2010, before decelerating through the first half of 2011.
"Since then, growth rates started to once again accelerate, most notably for hospital costs and those covered by commercial insurance plans," Blitzer said. "In fact, our Hospital Commercial Index stands out as the one whose annual growth rate, +7.95%, is back to its May 2010 rate. We appear to be entering 2012 witnessing a renewed acceleration in healthcare costs."
Zirkelbach says health insurers should not bear the blame for rising healthcare costs.
"S&P is focusing on the price issue, not utilization," he says. "You're seeing healthcare cost growth not being has high as it used to be but that was due to decreased utilization, not prices. Prices continue to go up."
"As the trend of hospital consolidation continues we are seeing that it results in higher prices as more and more hospital systems attain dominant positions and are able to dictate terms," he says. "That is having a big impact as well."
Health and Human Services Secretary Kathleen Sebelius said Thursday that the federal government will delay for an unspecified time the implementation date for the ICD-10 diagnostic and procedural coding system.
In a media release Thursday afternoon, Sebelius said federal officials were acting on providers' concerns "about the administrative burdens they face in the years ahead. We are committing to work with the provider community to reexamine the pace at which HHS and the nation implement these important improvements to our health care system."
HHS said it will "announce a new compliance date moving forward."
ICD-10, which has been widely used in many other countries for years, was scheduled to replace ICD-9 in the United States in October 2011. During the 2008 public comment period providers asked for, and got , a delay until Oct. 1, 2013.
For the last several months, the American Medical Association and other provider groups have pressed the Obama Administration and Congress for another delay. Many providers say they would like to see the deadline extended by another two years.
Sue Bowman, director of Coding Policy and Compliance at the American Health Information Management Association, told HealthLeaders Media that the delay "raises concerns."
"The need to replace ICD-9 and go to a better coding system is still out there and hasn't gone away," Bowman says. "Actually, the need for high-quality healthcare data has gotten bigger now with meaningful use and payment reform and value-based purchasing and ACOs and all the other initiatives."
Bowman says delaying implementation of ICD-10 will delay all of the other benefits of better healthcare data. "Until we have a better coding system we can't really have a better healthcare system and achieve the goals of all of these other initiatives because they all pretty much come down to better data," she says.
Bowman says implementing ICD-10 alongside other looming initiatives such as bundled payments, electronic medical records, and accountable care organizations makes sense because "they all relate together."
"To separate them out and say 'this piece doesn't need to be done now' is somewhat shortsighted," she says. "They all link together and are interrelated in a way to promote value for healthcare both to improve the quality and costs. I don't think we are going to see the anticipated benefits of all of the other initiatives unless we move to a better coding system."
Tim Stettheimer, a Birmingham, AL-based Regional CIO for Ascension Health, told HealthLeaders Media that HHS's earlier decision to delay by 90 days the implementation of the 5010 HIPAA transaction standards signaled that federal officials understand the burdens hospitals face.
"The fiscal intermediaries for (Centers for Medicare and Medicaid Services), many of them are not even ready for 5010 and we have seen the impact on hospital cash because of delays and payers being unable to accept those federally mandated transaction standards," he says. "If we would have kept that ICD-10 implementation date in October it would have been considerably worse."
Stettheimer says payers also are having problems with the ICD-10 deadline.
"Our healthcare reimbursement environment is different from any other country. It is so convoluted," he says. "It is not tied to the diagnostic codes and if you change the codes you impact the whole reimbursement cycle within healthcare. It's not that the healthcare providers are standing alone and not being ready. It is the payers, all the insurance companies, the fiscal intermediaries that handle the transactions for CMS, all of these organizations, most of them aren't ready and would have a challenge getting ready."
ICD-10 implementation is further complicated, Stettheimer says, because there is no way to ease into it. "It is a little bit like a light switch. You go from ICD-9 to ICD-10 in a day," he says. "Because there is no way to not make it an instantaneous transition, the readiness and preparation and testing becomes that much more complex. We can't put just one hospital or unit up on ICD-10 and see how it goes."
Bowman says the "too-much-on-our-plate" excuse has been used before by providers to justify delays.
"There is never going to be a year when we don't have a lot on our plates," she says. "It is unfortunate that ICD-10 didn't get initiated several years ago ahead of these other things to set the foundation and the groundwork for these other initiatives. Of course the further it is delayed, what is going to come up that year?"
AMA President Peter W. Carmel, MD, issued a statement Thursday thanking Sebelius for her "swift response."
"The timing of the ICD-10 transition could not be worse for physicians as they are spending significant financial and administrative resources implementing electronic health records in their practices and trying to comply with multiple quality and health information technology programs that include penalties for noncompliance," Carmel said. "Burdens on physician practices need to be reduced—not created—as the nation's healthcare system undertakes significant payment and delivery reforms."
Bowman says providers should use their extended deadline to continue preparations for ICD-10. "This is a delay. It is not a stoppage of ICD-10. It's going to get done," she says. "Whatever work you get done will be done, so our message is don't stop the work you are doing."
It's no secret that, in general, rural healthcare providers lag behind their counterparts in urban and non-rural areas when it comes to the implementation of electronic medical records and other healthcare information technology.
The Office of the National Coordinator recently announced that only 9% of critical access hospitals had attested to meaningful use of EHR in 2011, compared with 16% of hospitals in non-rural settings. Frankly, neither statistic is worth bragging about. But the lagging achievement in critical-access hospitals points to some unique challenges that rural healthcare providers face.
Those challenges include a lack of access to capital funding, finding qualified staff and training, finding project partners, and surmounting the byzantine federal bureaucracy.
With that in mind, the Rural Assistance Center and the National Rural Health Resource Center have launched an online HIT toolkit for rural healthcare providers.
"It's freely available. All you have to do is go on line. The kit was designed to help rural providers navigate the federal resources that are available," Kristine Sande, program director at the Rural Assistance Center, told HealthLeaders Media.
"The federal government really is putting out a lot of resources related to HIT, but they are from multiple departments and agencies and bureaus and it can be really confusing to figure out where to go different information," Sande says.
"So, we are just trying to help find the resources, understand which agency does what related to HIT, and provide them with some resources related to things like planning and implementation that can help them get their HIT systems up and running and meet the meaningful use standards."
Sande says the tool kit will allow rural providers to:
Address challenges to find funding
Support community college training programs
Stay current on legislation affecting EHRs
Leverage federal resources for projects
The toolkit can guide rural providers in the planning, setup, implementation and operation of an HIT infrastructure. Providers may also find nearby training programs, funding support and management expertise. Those resources are divided into categories for easy access, Sande says.
Sally Buck, associate director of the National Rural Health Resource Center, says only about 70% of rural healthcare providers are now being served by the regional extension centers that are funded by the Office of the National Coordinator. Some of the remaining 30% of rural providers are fending for themselves. "It is taking longer for critical access hospitals and rural providers," she says.
Sande says the Rural Assistance Center and the federal government want to hear from providers who use the tool kit, which is now considered a pilot project. "We really want feedback to see if this resource is helpful to people and what would be useful to be added to the Web site tool kit to make it even better to meet the needs of rural providers," she says.
While providing a tool kit for rural providers likely will not solve the lagging attestation rates for meaningful use, it is at least an acknowledgement from the federal government that rural providers face unique challenges implementing EHRs. In that respect, this is an important step.
Signals that federal officials might "re-examine the pace" of next year's implementation dates for ICD-10 are bringing mostly favorable reactions from healthcare providers. [Update: delay has been confirmed.]
Marilyn Tavenner, acting administrator for the Centers for Medicare & Medicaid Services, told an American Medical Association conference in Washington, DC on Tuesday that the federal government was sympathetic to physicians' concerns about the Oct. 1, 2013 implementation date for the new standard of diagnostic classification.
"I'm committing today to work with you to reexamine the pace at which we implement ICD-10," Tavenner said as a room full of doctors applauded, according to a post from the Massachusetts Medical Society. "I want to work together to ensure that we implement ICD-10 in a way that (meets its) goals while recognizing your concerns."
Tavenner made no specific promises at the AMA event, but she said CMS may soon issue a statement on the topic in the coming days or weeks.
For months AMA and other physicians' associations have called for a delay of the implementation date, saying that the switch from the old ICD-9 system to the far more granular ICD-10 represents an unfunded mandate that could cost medical practices between $82,000 and $2.7 million to install.
In November, the AMA's house of delegates voted to "vigorously work to stop the implementation" of the "onerous" implementation of ICD-10."
Those financial pressures, AMA said, come as physicians are also coping with:
the switch to mandated electronic medical records;
confusion over the requirements—and legal status—of the Affordable Care Act;
the push for Accountable Care Organizations, patient-centered medical homes, bundled payments, and other new care and compensation models;
the unsettled status of Sustainable Growth Rate funding in the Medicare "doc fix"
AMA President-elect, Jeremy A. Lazarus, MD, said in a statement Tuesday that the nation's largest physicians' organization "welcomes the opportunity to discuss ICD-10 implementation, along with many overlapping regulatory requirements that are burdening physician practices."
"The AMA appreciates that Ms. Tavenner and the administration have heard our concerns and have recognized the significant challenges and burdens ICD-10 implementation will create on the practice of medicine, and that they are committed to reviewing the pace of implementation," Lazarus said.
Pam McNutt, CIO and senior vice president at Methodist Health System in Dallas, TX, told HealthLeaders Media that providers are simply overwhelmed by the federal mandates raining down on their heads.
"All of that is happening in the same timeframe and they are all interwoven. It really seems like it is almost too much, especially when you think about it from the physicians' perspective," McNutt says.
"There are so many physicians who we need to move along the path of getting on to electronic health records. Now we are adding this burden. Plus you hear about budget cuts that are going to affect physicians and hospitals reimbursements. So the timing just doesn't seem right to be piling on all of these initiatives."
McNutt says she believes the ICD-10 implementation should be delayed until 2015 "to give ACOs, bundled payment models, and Meaningful Use Stage 2, a chance to gel. To me that would be ideal."
However, Wendy Whittington, MD, CMO at Dallas-based HIT provider Anthelio Healthcare Solutions called any effort to delay ICD-10 implementation "a bad idea."
"How can organizations be good at strategic planning if the rules keep changing," Whittington says. "A lot of proponents of putting this off are citing the fact that we are all too busy with meaningful use to deal with ICD-10. I see that as exactly the reason why we should take the deadline seriously."
"When you are thoughtful about strategic planning and you do things the right way and not just to collect the incentives you may have already been incorporating where ICD-10 is going to fit into all of this," she says. "Really, what we are doing by changing the rules mid-game is punishing those who have been thoughtfully been thinking through how to do this."
The possibility of a delay also concerns leadership at the American Health Information Management Association. In a statement issued Tuesday, AHIMA's vice president for advocacy and policy, Dan Rode, said, "any delay in the transition preparation for ICD-10 will both increase actual costs and may diminish the value of other Health and Human Services programs, including Meaningful Use.”
For the most part, however, hospital CIOs who spoke with HealthLeaders Media say they support the delay.
Mike Smith, CIO at Lee Memorial Health System, in Fort Meyers, FL says healthcare providers and the federal government should have learned the lesson from the rush to implementation of the 5010 HIPAA transaction standards.
"I think if we just observe with the 5010 implementation that these changes can have long-lived and unintended consequences," Smith says. "The ICD-10 schedule was established before meaningful use was even a thought. We just have a lot of things compressed at one time. For the best interests of patient safety and trying to handle things in an orderly fashion, it would be best for the industry that it be delayed a bit. There are a lot of good things with ICD-10 but still if you try to do too much too fast you are going to have negative unintended consequences."
Randy McCleese, CIO at St. Claire Regional Medical Center in Morehead, KY says his hospital just isn't ready to make the switch. "ICD-10 definitely gives us a more granular approach that we need, but coming from a small rural hospital, we are just now putting the things in place that will allow us to get to that depth of detail," McCleese says. "I'd like to see it delayed two years. That would help tremendously."
Robert Tennant, senior policy advisor with Medical Group Management Association, says the problem isn't the implementation date, but the implementation process.
"It's not a question of pushing it back a year or two. It's the process itself. We have gone through this before with HIPAA 4010, and now 5010. There has to be a better way," he says.
"We have been consistently over the years asking CMS to institute a pilot test to identify correctly what the benefits and the costs will be to the industry, especially to physician practices, to identify an intelligent pathway forward for any change, and to recognize that this might require some financial assistance for physician practices," Tennant said.
"And we have consistently said that we should not move forward with ICD-10 until 5010 was fully in place. The 5010 process has not gone particularly well. They are already in contingency mode and 5010 is a tiny percentage of the challenge that physician practices will face moving to ICD-10."
McNutt and Smith say that finding and training ICD-10 coders may prove to be the biggest hurdle for providers in a compressed timeframe.
"The medical records coder implementations are significant. It's not clear how significant, but you hear numbers like 25%-50% reduction in productivity," Smith says. "That means we are going to have to come up with a lot of coders in the next 18 months, not only training the ones you have on ICD-10 but additional capacity. The longer we wait the better chance we will have for more advanced automated coding assist tools to help with that transition."
Whittington says that the AMA and other groups that want to delay the implementation date are using overheated rhetoric and motivated by "their own selfish interest and not the best interest of moving healthcare in the nation forward as a whole."
"Calling this an 'unfunded mandate' is a harsh statement because the rest of the developed world is already on ICD-10," she says. "We have known about this change for years. ICD-9 was designed in the 1970s. So it's not like this is an 'all of a sudden we have to do this' thing. It's moving to a system that will work better for us."
Not-for-profit hospitals average more than 11% of total expenses on benefits to their communities, according to a study sponsored by the American Hospital Association.
Beginning in 2009, the Internal Revenue Service required not-for-profit hospitals to file a Schedule H form to assess their community benefit. AHA hired Ernst & Young to collect and analyze the data from 571 not-for-profit hospitals.
The report found that free care, financial assistance and spending to fill gaps in Medicare underpayments average 5.7% of total hospital expenses. The report compared hospitals of similar size so that communities can better understand their hospitals’ benefit to their community. Other benefits included community health improvement programs, health research and education, and other subsidized services, the study found.
AHA President/CEO Rich Umbdenstock said in the report that Schedule H helps communities to better understand how they are served by their local hospitals.
"This means that a hospital that reported $100 million in total expenses to the IRS spent an average of more than $11 million on benefits to the community, nearly $6 million of which was directly devoted to patients in financial need," Umbdenstock said. "The AHA believes that communities themselves are in the best position to determine whether the benefits provided by their local hospitals match their needs."
Although AHA supports Schedule H, Umbdenstock said it has "limitations," and cannot substitute for direct community assessment. "The AHA believes that communities themselves are in the best position to determine whether the benefits provided by their local hospitals match their needs and aspirations," he said.
At an accelerating pace, the nation's health insurance companies are embracing the latest trend in care delivery: An ounce of prevention is worth a pound of cure.
Last month, WellPoint Inc. said it would increase payments to physicians who transition to patient-centered medical homes. Some observers believe the announcement by one of the nation's largest commercial health insurers, covering 34 million lives in affiliated plans, represents a seismic shift in the movement toward coordinated care and preventive medicine.
The plan calls for care management fees for primary care physicians, who could see fee increases of about 10% with incentives that could improve payments by as much as 50%.
And in another sign that the landscape is shifting, Horizon Blue Cross Blue Shield of New Jersey this month announced that it would fund a collaborative to train 200 nurses in the Garden State over the next two years as "population care coordinators."
Horizon Healthcare Innovations, a subsidiary of Horizon BCBSNJ, said the "first-of-its-kind initiative" is designed for nurses who work in primary care physicians' offices. The program uses curriculum developed in collaboration with Duke University School of Nursing and Rutgers College of Nursing.
The nurses who graduate from the 12-week program will work with primary care physicians, other care team members, and the patients themselves to coordinate follow-up care and create individualized health plans that empower and engage patients.
"This innovative leadership role for nurses is an example of how we are implementing the recommendations from the landmark report: the Institute of Medicine: 'Future of Nursing: Leading Change, Advancing Health' in New Jersey," Edna Cadmus, project director, and Clinical Professor at Rutgers College of Nursing, said in a media release announcing the project.
"Through this collaborative partnership we are working to shift care delivery from an illness model to one of keeping our citizens healthy, using nurses as the linchpin to analyzing data on high-risk patients and developing coordinated plans of care. These nurses are being given a unique leadership opportunity to contribute to pioneering this new model in the state," Cadmus said.
The first class of 37 population care coordinators began their studies last month. Most of the courses are delivered online and are supplemented by three "face-to-face sessions" on the Duke and Rutgers campuses. The nurses will also take part in a residency program that integrates their coursework and skills to provide a real world experience for their new roles as care coordinators.
The Horizon project courses will focus on:
Case management of patients with complex health conditions
Engagement and communication strategies with patients
Using databases, including disease registries and Electronic Medical Records
Coordinating care of "frequent flier" patients and discharged from care facilities
Implementing and managing change in healthcare organizations
Operations of a PCMH
Role of care coordinators in improving patient care and patient experience in a PCMH
The announcements from WellPoint and Horizon should be welcomed by anyone who cares about healthcare reform and the move toward the patient-centered medical home. If the commercial plans aren't on board, it's not going to work.
The initiatives also show that payers clearly understand that ongoing political dog fights and the court challenges to "ObamaCare" are just static. The plans know that regardless of who gets elected president, or who controls Congress, or which way the U.S. Supreme Court rules, there is no going back to the old fee-for-service model. It is simply too wasteful, and too unaffordable.
The plans are planting a stake on the future of healthcare and they're betting that primary care physicians and nurses will lead the way.
The more than 600 hospital leaders packed in a hotel ballroom at this week's 25th Annual Rural Health Care Leadership Conference in Phoenix were asked a simple question: How many of you have made contingencies plans for Medicare critical access funding cuts?
Only a few hands were raised.
The man asking the question, James E. Orlikoff, a senior consultant at the Center for Healthcare Governance, told HealthLeaders Media after the presentation that he was not surprised that so many rural hospitals leaders are in denial about a major funding cut that he calls "inevitable" within the next three years.
"That response is very typical. There is a level of denial that says 'we understand there has to be a lot of change but it won't affect us,'" Orlikoff says. "Upton Sinclair has a wonderful quote: 'It is difficult to get a man to understand something when his salary depends upon his not understanding it.' Critical access hospitals are carved out and they have been protected. It's the normal human condition to think that this is normal, this will always last, it can't go away because if it does, it will destroy us."
In times of economic woe, however, Orlikoff says standard operating procedure is often the first casualty. Outsized payments for critical access hospitals provide low-hanging fruit for a cash-strapped healthcare delivery system.
"Anytime you face an economic crunch when you have carve-out artificial protections, they can't last," he says. "Is it evitable? Yes. 'When' and 'how' are the questions. It could happen much more quickly than any of us think depending upon how bad the market gets, how bad the debt issues become. I think things are going to happen much more quickly. I tell my critical access hospitals to strategically plan on three years to be off the cost-plus model."
Orlikoff says the critical access funding cuts will likely come sequentially, rather than hit all at once. "Many critical access hospitals don't fit within the rules, so first they will be the first to lose their protected reimbursements. Then the cuts will migrate to all critical access hospitals, especially as other markets can show the efficiencies that can be taken."
In other words, if one critical access hospital can achieve savings and efficiencies with lower reimbursements, the government will assume that every other critical access hospital can do the same.
"Many of the leaders here are so embedded in that protective philosophy that they don't know what their finances are. They don't know how much inefficiency they have in the system. So when the time comes they are going to be paralyzed," Orlikoff explains. "If they start thinking about it now, maybe they can get ahead of the curve."
So what can critical access hospitals do to prepare? Rather than looking for a magic bullet, Orlikoff recommends a series of baby steps that begin with a simple question: "'If we're taken off the cost plus reimbursement and put on prospective payment system, what would happen to us? What is our percent cushion?'" Orlikoff says. "Assuming that is lost, the second question would be 'would we be able to stay in business?' For the vast majority the answer is 'no.'"
Start with understanding your current financial situation. "Most critical access hospitals have no idea about their economic performance or how dependent they are or whether they'll go out of business if the reimbursement model changes," Orlikoff says. "Or suppose they don't eliminate the reimbursement model but they cut it by 5%. Would you swing from the black to the red?"
"Understanding that leads to 'where do we tighten up? What is the most frequent Medicare diagnosis we treat in this hospital?' Let's look at the variation there," he says. "In that one or two most frequent things we do, if we standardize to the highest quality and the lowest cost how much would that save?'"
"When you see that, you begin to realize that if standardizing is the best practice, we would have spent X dollars less. Then the leadership gets it. And you do it again and do it again," he says.
Finding the savings through improved quality and efficiency, and reduced waste is "liberating," Orlikoff says, because hospital leaders will understand that it is possible to survive—and perhaps even thrive—in an era of reduced reimbursements.
Of course, none of this can happen unless hospital governing boards acknowledge the new economic forces that are driving healthcare reform, and realize that no funding is beyond the reach of budget cuts.
"Boards are buried by curvy information and details and they aren't asking the right questions," Orlikoff says. "As the models change the questions the leaders have to ask have to change. Many of these folks are thinking the right thing but they are sucked back into the morass of old model governance."