The Centers for Medicare & Medicaid Services announced on Friday that it has accepted the corrective action plan submitted by Methodist Dallas Medical Center to address “immediate jeopardy” deficiencies
identified during an August review of the facility.
The 515-bed medical center is part of the five-hospital Methodist Health System. Methodist Dallas could lose as much as $208 million in federal funding if the problems aren’t resolved.
Problems with infection control and emergency room care were the most serious deficiencies identified in the 128-page review. The initial review and the CAP were released by CMS via e-mail on Friday.
Among the deficiencies identified:
Lack of ER screening by a qualified medical professional
Failure to dispose of soiled gloves and wash hands after treating patients
Failure to maintain adequate medical records for every patient
Failure to administer the correct medications
Officials at Methodist Dallas addressed each deficiency separately and identified the steps that will be or have already been taken to correct the problems, including:
Revising staff rules to require medical screening to be performed by a qualified medical professional
Enforcing infection control procedures to reduce contamination
Implementing daily audits of medical records to ensure compliance with documentation of verbal and telephone orders
Enforcing requirements that directions for administering medications be made in writing
A follow-up review is expected to verify removal of the immediate jeopardy conditions at Methodist Dallas. Bob Moos, spokesperson for the Dallas office of CMS, said in an email to HealthLeaders Media that if the immediate jeopardy conditions continue, the hospital’s termination from the Medicare program will be effective September 23. However, “if the hospital removes the immediate jeopardy conditions, a full Medicare survey of all of the conditions of participation will be scheduled within 60 days. If any condition-level deficiencies remain following that survey, the hospital will again be asked to submit a corrective action plan, and the surveyors will return for one final revisit,” Moos wrote.
In a statement posted on its website, Methodist Dallas officials said medical center personnel “immediately began addressing the findings shared by the surveyor even before the completion of the survey, including policy and procedure updates relating to the emergency department. Most of the proposed changes were corrected either during the survey or have been implemented based on verbal feedback received from the surveyor.”
Parkland Memorial Hospital has agreed to bring in an outside consultant to “craft a plan of improvement” for the Dallas hospital. The move is among the requirements of the systems improvement agreement that hospital officials will sign by September 15 with the Centers for Medicare & Medicaid Services.
The agreement is the latest effort by Parkland to protect its participation in Medicare and Medicaid. The $417 million funding from both programs represents about 35% of Parkland’s total annual budget. The programs have been at risk since a July review by federal and state officials uncovered immediate jeopardy deficiencies in the hospital’s infection control and emergency department care. The safety net hospital submitted a corrective action plan to address the issues and a follow-up review was conducted late in August.
That review identified continuing deficiencies in emergency care that were deemed to still be at the immediate jeopardy level. However, problems in infection control were downgraded from “serious” to “significant.”
Based on the follow-up review findings, the Dallas office of CMS sent Parkland CEO Ron Anderson a letter on September 9th stating that Parkland “no longer meets the requirements for participation in the Medicare program” and that its Medicare agreement will be terminated on September 30th.
However, late Friday afternoon, CMS released an e-mail statement that acknowledged the “devastating impact the termination of Parkland Hospital would have on the citizens of Dallas County and the Medicare/Medicaid patients it serves.” To ensure that Parkland “promptly and substantively remedies the ongoing quality concerns identified by the recent onsite surveys, CMS has provided Parkland with an opportunity to enter into a systems improvement agreement,” the e-mail said.
According to the CMS e-mail, a systems improvement agreement is a time-limited agreement between CMS and a hospital. The agreement requires the hospital to bring in external, third-party, CMS-approved quality improvement consultants to:
Perform a comprehensive hospital-wide analysis of current operations and compare the findings to industry standards to ensure compliance with the conditions of participation for Medicare and Medicaid, as well as the Emergency Medical Treatment and Labor Act(EMTALA) requirements related to the timely provision of care and services
Recommend hospital-wide changes and improvements to ensure compliance with all the conditions of participation and EMTALA
Assist in implementing and evaluating changes and improvement
Implement an effective and ongoing hospital-wide quality assessment and performance improvement program to ensure continued compliance
In a statement released on its website, Parkland Memorial confirmed that it would sign the agreement, which “provides Parkland the opportunity to continue to operate fully and to address the problems identified in the recent CMS survey.” The statement added that “Parkland remains fully accredited and is accepting Medicare and Medicaid. The agreement will abate the notice of termination of Parkland’s participation in the Medicare and Medicaid programs that Parkland received today.”
The primary focus of the second review was to determine whether the problems in infection control and emergency room care had been corrected.
Parkland still faces another follow-up survey to assess the status of other less serious deficiencies, including:
In July the Department of Health and Human Services announced proposed rules to regulate the creation of consumer-operated and -oriented plans, or CO-OPs. With the October 17th application deadline fast approaching it seems like good time to take another look at CO-OPs to assess their likelihood of success.
CO-OPs are designed to be non-profit, member-governed health plans that create another consumer option for cost-effective healthcare insurance.
When the program was first announced, Courtney White, a principal and consulting actuary in the Atlanta office of Milliman Inc., explained in an interview with HealthLeaders Media that "CO-OPs will look like a regular insurance company. They'll take risk, make reimbursements and process claims."
He identified accountable care organizations, integrated delivery systems and chambers of commerce as likely candidates to form CO-OPs.
HHS will kick-start the CO-OPs process with $3.8 billion in loans, or about $100,000 per applicant to help fund feasibility studies and business plans.
Analyst Bradford Gray, Ph.D., wonders if that will be enough to guarantee the success of this latest option to individual and small business healthcare coverage. Gray, a senior fellow at the Washington, D.C.-based Urban Institute, a nonpartisan policy research organization, explained that "CO-OPs may become important insurance options in some markets, but it is difficult to foresee their having a transformative effect that was expected of the public option."
1.Building the provider network and administrative structures. Attracting members and sustaining growth will depend on having a network of providers who deliver quality care at a cost that allows the CO-OP to price itself competitively and not lose money. Contracting with providers is a difficult and time-consuming process that requires a sophisticated infrastructure to deal with administrative matters such as marketing and network management as well as utilization and cost management. At first many CO-OPs will probably need to rent a provider network and obtain administrative services from an existing third-party administrator. That can be expensive.
2.Building enrollment. This is important for economies of scale and negotiations with providers, but no one knows who will really be interested in CO-OPs. At least 25,000 enrollees and a minimum market share of 5% will be needed to achieve financial and operational stability. CO-OPs that already have access to potential enrollee populations will have an advantage. Gray suggests that the best way to quickly build membership will be to gain access to groups that already exist, such as labor unions, employer associations or a self-insured medical organization. Remember, CO-OPs will face competition from health insurance exchanges so being ready to accept enrollment during the October 2013 open enrollment period before HIX open for business a few months later will be critical.
3.Overcoming the prohibition on marketing. The Affordable Care Act prohibits CO-OPs from using loan funds for marketing, which could make it more difficult at startup to reach potential enrollees. Marketing is a significant expense for health plans and will be particularly important for new plans.
How the legislation's restriction on using loan funds for marketing is implemented in practice will be important.
4.The danger of adverse selection. The mix of enrollees will be important. Established competitors will probably be more skilled at attracting the healthiest patients. CO-OPs will need to set premiums low enough to attract enrollees but high enough to cover costs.Setting premium prices for people who have been uninsured will be difficult because so many of the new enrollees will have a backlog of unmet medical needs.
5.Making member governance work. Plans will need board expertise in finance, strategic planning, product development, contracting, actuarial functions and medical management. The proposed HHS rules require that CO-OP boards be elected by members and that CO-OP members account for a majority of the board. Boards can include experts who are not plan members as long as the nonmember experts account for only a minority of the board. Given that limitation, the challenge will be to make sure the membership of a CO-OP includes as many experts as possible so needs in finance, strategic planning ,etc. can be met.
Despite these challenges, Milliman's White says CO-OPs "will still have a great story to tell: 'We're member-run and we put our profits back into the business to lower member premiums, and to improve member benefits and care.'"
In the past 12 months three health insurers, HealthSpring, WellPoint, and Humana, have each acquired a Medicare Advantage HMO. Expect to see even more growth as businesses begin to shift their 65 year-old and older retirees off of employee -sponsored plans and onto Medicare Advantage plans.
Growth in the baby boomer population is among the factors driving interest in Medicare Advantage companies. In past 12 months three health insurers, HealthSpring, WellPoint, and Humana, have each acquired a Medicare Advantage HMO.
Since 2005, the number of beneficiaries enrolled in Medicare Advantage managed care plans has more than doubled from 5.3 million to 11.1 million in 2010, according to the Kaiser Family Foundation.
Expect to see even more growth as businesses begin to shift their 65 year-old and older retirees off of employee -sponsored plans and onto Medicare Advantage plans.
"People who are turning 65 years old now have experience with managed care and they are comfortable with it," said Sarah James, an analyst who focuses on health insurance companies for Los Angeles-based Wedbush Securities.
And competition is heating up as well-financed players such as Aetna, Humana, WellPoint and UnitedHealth look to increase their share of the market. James expects to see more acquisitions of smaller Medicare Advantage companies as healthcare reform kicks in and economies of scale become even more important. "The Medicare Advantage market is very fragmented and it's getting more difficult to be a small player."
James explains that certain Affordable Care Act provisions such as the medical loss ratio requirement will be difficult for smaller companies to achieve. Beginning this year the ACA requires health plans to spend 80% to 85% of premium revenue on reimbursements for clinical services and activities that improve health care quality.
Also, the coding changes that will be implemented for hospital reimbursements beginning in 2013 will require costly investments in IT that will be challenging for smaller firms to afford. Almost half (46%) of healthcare leaders surveyed by HealthLeaders Media anticipate revenue loss as a result of implementing the ICD-10 coding directive.
Here's a look at three recent Medicare Advantage acquisitions and what they mean for the healthcare market:
Humana and Arcadian Management Services
Humana announced on August 25 that it will acquire Arcadian Management Services, an Oakland, Calif.-based Medicare Advantage HMO with members in 15 states. James explained that the acquisition will help Humana expand its geographic footprint in states like Arkansas where it has only a small Medicare Advantage presence and strengthen Humana's position in Texas, which has a large Medicare market.
A Bernstein Research report on the acquisition revealed that Humana was one of 10 health plans and private equity firms, including UnitedHealthcare, HealthSpring and Universal American Corp., that made a bid for Arcadia and its 64,000 Medicare Advantage members. Humana already has 1.6 million individual Medicare Advantage members.
No financial details were disclosed, but Bernstein values the deal at $150 million. The transaction is subject to federal and state regulatory approvals and is expected to close late in 2011.
WellPoint and CareMore Health Group
The giant WellPoint gained about 54,000 Medicare Advantage members as well as access to healthcare clinics that cater to that population when it completed on August 22nd its acquisition of CareMore Health Group.
The Cerritos, Calif.-based Medicare Advantage plan has members in Arizona, California and Nevada where it also operates 26 clinics staffed with physicians and other healthcare professionals. Most of CareMore's members have chronic conditions that require the care of several specialists.
The insurer, which has about 550,000 Medicare Advantage members, had been looking for a way to jumpstart its participation in the market. During a February conference call with investors, CEO Angela Braly acknowledged the insurer's struggles and said the company would probably make an acquisition to grow that market segment. "We haven't captured the market share that we could there."
WellPoint estimates that every year until 2030, about one million baby boomers will become eligible for Medicare in the 14 states where it offers insurance plans.
While CareMore adds some members, James said the acquisition of the healthcare clinics that will have the most impact. The addition of CareMore provides WellPoint with a model for delivering care coordination and intensive treatment of chronic conditions. WellPoint plans to expand the clinic model to additional CareMore and WellPoint markets.
Financial terms of the deal were not disclosed. However, the New York Times cited analysts who put the purchase price at around $800 million.
HealthSpring and Bravo Health
Nashville-based HealthSpring completed in November 2011 its acquisition of Baltimore-based Bravo Health for $545 million. James said the acquisition provides HealthSpring with the scale and geographic diversification important in the Medicare Advantage market. Diversification helps minimize vulnerabilities in specific markets.
With the acquisition HealthSpring, which had operated primarily in the South, gained an immediate and sizeable Medicare Advantage presence in the Mid-Atlantic region. The privately held Bravo has about 100,000 Medicare Advantage members in the Mid-Atlantic region and Texas. HealthSpring now has 340,000 Medicare Advantage members in 11 states and the District of Columbia.
Like WellPoint's acquisition of CareMore, the Bravo deal includes a number of care centers that provide treatment options outside of the emergency room or hospital.
In a recent conference call with analysts Herb Fritch, CEO of Health Spring, said to his company will look for additional acquisitions in the Medicare Advantage arena to continue to increase its scale and capabilities.
Parkland Memorial Hospital has no heir apparent to succeed Ron Anderson, M.D., who learned late Tuesday that he will no longer serve as the hospital’s president and CEO when his contract expires on Dec. 31. The announcement was made following an executive session of the hospital’s board of managers
The move to replace Anderson as CEO is unrelated to deficiencies discovered by the Centers for Medicaid & Medicare in July, said Lauren McDonald, M.D., chair of Parkland’s board of managers, in a telephone interview with HealthLeaders Media Wednesday. The hospital was cited for multiple “immediate jeopardy” deficiencies in August. It has submitted a corrective action plan and is undergoing a second review.
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Anderson is expected to assume a new role, which has yet to be identified, after his contract expires in December. “The board started this process before CMS came into the building. We’ve been discussing for several months what he (Anderson) can do to continue to help us,” she said.
John Haupert, the current COO and the second-ranking administrator at Parkland, is leaving to become the president and CEO of Grady Health System in Atlanta in October, and therefore not a candidate for the top slot at Parkland, McDonald explained.
The seven-member board met in executive session Tuesday evening to discuss a three-item agenda:
CEO goals and evaluation
Personnel matters involving executive leadership, including potential consulting services
Contracts and personnel matters involving Ron Anderson, MD, including evaluations and options
In accordance with Texas law, no votes were taken during the executive session, which was closed to the public and the press.
McDonald said that the search for Anderson’s successor would take a back seat to creating a new position for Anderson that will keep him working at the hospital beyond Dec. 31. The board plans to hire an organizational expert to help define Anderson’s new role.
His new position will be designed to capitalize on Anderson’s strengths, including his knowledge of public health, healthcare reform and disparity of care issues, McDonald said. The board hopes to finalize an agreement with Anderson before his current contract expires.
McDonald is a nephrologist whose professional relationship with Dr. Anderson dates back to her days as an intern.
She explained that at first the board thought that nothing out of the ordinary was discovered during the first visit by CMS surveyors. McDonald explained that CMS traditionally conducts an exit interview with staff after a survey and that staff members present, including Anderson, described the process as routine.
Several days later a letter from CMS informed Anderson and the board of the extensive deficiencies, including the immediate jeopardy issues.
Still, the board didn’t request and Anderson didn’t offer his resignation following the CMS disclosures.
A second CMS survey was in its third day on Wednesday and McDonald said she did not when it would be completed.
Once Anderson’s future is resolved, the board expects to formally begin the search for a new CEO and president for the safety net hospital. Although a search firm may be hired to find the new leader, McDonald said it’s possible that the board of managers will identify a candidate.
The board has not determined what it will be looking for in its next leader; according to McDonald even the president/CEO title may be up for discussion.
When asked if she thought Parkland had a problem at the top McDonald replied simply “it’s important to have leadership that’s adaptable and able to change.”
Anderson, whose annual compensation package is $885,368, declined to comment on his future with Parkland Memorial. He has been CEO and president of Parkland for almost 30 years.
I am beginning to think that the only people who are truly excited about the eventual release of the final rules and regulation for accountable care organizations are those of us who toil away in the Fourth Estate.
Think about it. When was the last time you heard a hospital, physician or health plan executive say they are waiting for the rules and regs so they can get on with the triple aim focus: better health for populations, better care for individuals, and lower costs for all?
I remember back in April when Don Berwick, MD, the CMS administrator, introduced the 400+-pages of proposed rules for ACOs. The complex system was roundly booed. Brand names such as the Mayo Clinic and Cleveland Clinic quickly announced that they had no intention in taking part in ACOs. Hospitals and health systems raised concerns about the anti-monopoly provisions, potential problems with data sharing, risk, and the lack of patient accountability. It really seemed like the ACO concept was DOA.
But look what has happened. It seems like almost every day there's another announcement about hospitals, health plans, or physicians creating new delivery systems that hold the promise of care coordination.
"The entire healthcare market is up in the air right now," said William Rupp, M.D. the CEO of Mayo Clinic Jacksonville in Florida. "Everyone is looking at new models of cost-effective care. We're going to see a lot of different delivery models tested and it could be years before we find the models that work."
We're not talking about the government-issue, Medicare-based ACOs touted at every turn by Kathleen Sebelius or Don Berwick. Nope. These new ACOs are centered on commercial health plan membership and they are developing their own rules for meeting quality standards, cutting costs and earning bonus payments or what the Centers for Medicare & Medicaid Services likes to call shared savings.
The commercial ACOs often aren't even called ACOs. They're called alliances, partnerships, affiliations or any number of other names. The Michigan Blues, for instance, calls its program 'organized systems of care.' And these commercial ACOs aren't limited to hospital and physician teams. They are configured to include:
Health plans and physicians (Anthem Blue Cross and Individual Practice Association Medical Group of Santa Clara County in the San Francisco area or CIGNA and Piedmont Physicians Group in Atlanta)
Health plans and hospitals (Aetna and Carillion Clinic in Roanoke or Humana and Norton Healthcare in Louisville)
Physicians and physicians (VISTA Health System and Central Jersey Physician Network in Summit, N.J.)
Hospital systems and hospital systems (Methodist Health System and Texas Health Resources in Dallas)
Minnesota's Mayo Clinic may not be interested in the CMS version of accountable care organizations, but it is making moves to strengthen and extend its hospital-physician integration model. In May it signed an agreement with Altru Health System in Grand Forks, N.D. Altru's hospital and clinics now have access to Mayo Clinic physicians, as well as to Mayo's disease management protocols, clinical trials, and clinical care guidelines.
While Mayo isn't slapping the ACO name on this arrangement, it certainly reflects efforts to improve care coordination across multiple systems and to provide better care to patients. Time will tell if this arrangement is cost-effective as well.
A few months ago I spoke with Steve Mansfield, president and CEO of Methodist Health System in Dallas.
Methodist Health had just announced its intention to partner with Texas Health Resources on an ACO-like system. The two are by-passing the CMS ACO program.
Mansfield said then that he thought ACOs would be a work in progress for years to come as hospitals, physicians and health plans develop the system that works best for them. "I think the ACO concept is a very valid construct that holds the most promise for us to be able to improve the value of healthcare in America of anything I've seen in my career but it's just a concept. We've got to tweak it until we get the methodology right."
I remember thinking then that Don Berwick should be having sleepless nights over the CMS model for ACOs because all of these stakeholders were going out and forming their own models to achieve the triple aim.
Hey wait a minute. The triple is alive and well! The stakeholders are just pursing it on their own terms. All of the talk about ACOs has really focused healthcare right where Berwick has always wanted it to be: patient centered care coordination.
Does it really matter if it's achieved through a Medicare model or a commercial model?
For the second time this month a Dallas hospital faces termination of its Medicare contract 'over deficiencies that potentially endanger patients.
Laura Irvine, the administrator at Methodist Dallas Medical Center, was notified of the 'the "immediate jeopardy" deficiencies in an August 26thletter from the Dallas office of the federal Centers for Medicare & Medicaid Services.
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The 515-bed hospital is part of the five-hospital Methodist Health System. It stands to lose up to $208 million in federal funding.
Earlier this month officials at Parkland Memorial Hospital received a similar letter. The hospital submitted the required corrective action plan which was accepted by state and federal officials. A second review was underway on Tuesday.
On Tuesday night, Parkland's board announced that CEO Ron Anderson, MD, will "transition" to a different position when his contract ends in December.
The Methodist Dallas letter was sent after a review of a survey report written by the Texas Department of State Health Services. The report identified 10 broad areas of deficiencies, including medical screening, emergency services, and medical records. The specific violations will not be made available to the public until Methodist Dallas completes and releases it corrective action plan, which must be delivered to CMS by September 6.
David Wright, acting deputy regional administrator for CMS, said in an e-mail exchange that CMS is "constrained in what we can release at this point." He did acknowledge that the immediate jeopardy deficiency for Methodist Dallas is related to Emergency Medical Treatment and Labor Act or EMTALA violations.
In a response posted on the Methodist Health System's website, officials at Methodist Dallas Medical Center said "a special task force of Methodist Dallas clinicians and administrators is in the process of a thorough review of all the survey recommendations and will address each one in detail in our CMS response plan. We are committed to correct the findings identified by CMS -- and to do so as quickly and thoroughly as possible."
The statement attributes the deficiencies to "increased volume and space limitations in our emergency department. The ED has outgrown its current space, and we realize there are places that are not as private as we would like." On August 23 the medical center announced a $108 million expansion to its emergency, critical care, and surgery departments.
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According to the statement, MDMC has already addressed the majority of the issues cited in the survey, including policy and procedure updates related to the emergency department.
CMS has advised the medical center that its action plan will be reviewed and that the facility will be subject to a second survey before September 19.
Kingman Regional Medical Center in Arizona says it has no firm plans for the 70-bed Hualapai Mountain Medical Center that it plans to acquire from MedCath Corp.
"The deal was too good to pass up," explained Jamie Taylor, director of development and public relations for KRMC during a telephone interview. MedCath constructed the Arizona hospital just three years ago for $75 million. Pending MedCath shareholder approval the building, equipment, inventory and 18.6 acres of adjacent land will be sold to KRMC for $31 million.
KRMC at one time considered adding 40 beds to its 235-bed facility but Taylor said the $41 million price tag made the construction prohibitive. "Acquiring Hualapai Mountain is a much better deal for us."
The acquisition means Kingman will revert to a one hospital town. The closest hospitals are 60 miles away in Lake Havasu City and Bullhead City.
Because KRMC has no immediate plans for Hualapai Mountain Medical Center, it will not acquire the facility's business license. MedCath has notified employees that it will close Hualapai Mountain by September 30.
Taylor said once the deal is finalized KRMC officials will meet to develop a strategic plan for the former HMMC. The two facilities are located just three miles apart and so there is no need to duplicate services. Initially Hualapai Mountain probably will become an outpatient facility with additional services added as needed.
It is expected to take two to four months to get licensing and health plan contracts in place to reopen the facility.
Hualapai Mountain Medical Center has struggled to find its market in Kingman. Taylor said it operated on a 15 to 20 patient per day census. The local economy has been troubled and access to the facility has been limited because a planned interstate ramp project was cancelled.
The sale continues the dissolution process that Charlotte-based MedCath began in May 2010. In its heyday, MedCath had ownership interests in 13 hospitals in nine states, 27 cardiac diagnostic and therapeutic facilities in 12 states, and a rental fleet of mobile and modular cardiac cath labs.
With the expected sale of Hualapai Mountain Medical Center only three hospitals remain in the MedCath fold: Bakersfield Heart Hospital in California, Harlingen Medical Center in Texas, and Louisiana Medical Center and Heart Hospital in Lacombe.
A spokesperson for the Texas Department of State Health Services confirmed on Friday that the department has accepted its portion of the corrective action plan submitted by Parkland Memorial Hospital in response to numerous state and federal deficiencies identified during a recent review.
The state acceptance clears the way for a second review of the Dallas facility sometime this week to confirm that the CAP steps to correct serious life threatening problems have been taken and are effective. Time is of the essence. If Parkland does not pass the second review, it could lose its Medicare and Medicaid funding as early as this Friday.
State officials will perform the second review on behalf of CMS as well as the state health department.
Reviewers will arrive at Parkland unannounced to perform the second review, a health department spokesperson said.
The state and federal deficiencies overlap in areas such as emergency department care and infection control. State officials are primarily concerned about state licensure rules and regulations related to these deficiencies.
The Dallas office of the Centers for Medicare & Medicaid Services accepted its portion of the CAP last week.
At stake is $417 million in Medicare and Medicaid funds that are part of the safety net hospital's annual budget. CMS notified Parkland Memorial in an August 9th letter that it must correct the "immediate jeopardy deficiencies" in infection control and emergency department care or CMS will terminate its Medicare contract.
The hospital could also face state and federal financial penalties.
The primary focus of the second review will be to determine whether the problems in infection control and emergency room care have been corrected. "Once that's complete, they may also find compliance with other deficiencies," explained David Wright, acting deputy regional administrator for CMS in an e-mail exchange.
"If there is a finding of a new or continuing immediate and serious threat, termination of the hospital's Medicare and Medicaid provider agreement would take place on September 2."
If the immediate and serious threat is removed, but there is still non-compliance with other deficiencies, then the termination date "will be extended 67-days and Parkland will provide another corrective action plan," said Wright. "Surveyors would then go onsite for one final revisit to determine compliance with all of our requirements."
Even if Parkland Memorial is found to be in full compliance, the hospital may still face state and federal fines. The Texas Department of State Health Services has the authority to take enforcement action, including assessing financial penalties, but it is "too soon to know" what steps the state might take.
On the federal side the Office of the Inspector in the U.S. Department of Health and Human Services will determine if any fines will be levied related to violations of the Emergency Medical Treatment and Labor Act. CMS will not forward any survey records to the OIG until all of the current deficiencies are resolved.
In July the OIG assessed Parkland Memorial a $50,000 fine — the maximum allowed — for a 2008 case that involved EMTALA violations for failing to properly treat a patient who died of a heart attack after remaining in the ER without care for more than 15 hours.
Accountable care organizations have been a tough sell in the hospital community. Faced with a myriad of complaints about the complexities of the original program, officials at the Centers for Medicare & Medicaid Services introduced the Pioneer ACO. Touted as a way for organizations experienced in care coordination and risk management to more quickly cash in on shared savings, CMS has aggressively promoted the program to potential participants.
The agency has remained remarkably silent regarding interest in the Pioneer ACO program. But now that the deadline for Pioneer applications has passed, a picture is beginning to emerge.
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Mountain States Health Alliance, a 13-hospital system based in Johnson City, Tenn., has submitted an application to the CMS to participate in the Pioneer accountable care organization program. MSHA is one of the first participants to publically acknowledge interest in the program.
If the application is approved, MSHA plans to team with Integrated Solutions Health Network and CrestPoint Health, a third party administrator, to form AnewCareCollaborative. The regional ACO will provide services in the Johnson City and Kingsport areas of northeast Tennessee as well as the Abington area of southwest Virginia.
MSHA is a majority owner in ISHN, which in turn owns CrestPoint Health.
Rob Slattery, president and CEO of ISHN, said the group began to look at the ACO opportunity about a year ago when MSHA was working on its 10-year strategic plan.
“We knew that what got us here wasn’t going to carry us forward.” Slattery said they began to see the ACO, with its triple aim focus - better health, better care and lower costs - as a sustainable model for the group.
With its 13 hospitals and 2,000 physicians, the Mountain States-Integrated Solutions team seems like a natural fit for the ACO healthcare delivery system, which emphasizes care coordination. MSHA already has in place the IT systems that will allow it to capture data on individual patients and follow them through their hospital treatments and physician office visits. Earlier this year it transitioned its 15,000 employees into CrestPoint Health to manage employee health and wellness in a more coordinated manner.
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Slattery said Mountain States expects to invest $4 million to $11 million into AnewCareCollaborative, which will manage the healthcare of an estimated 15,000 Medicare beneficiaries. About half of that money will go toward meeting licensure requirements for taking risk in Tennessee and Virginia. He explained that in aligning physicians and hospitals there “may be some capitation arrangements that will require us to become a payer.”
The deadline to apply to participate in the Pioneer ACO program was August 19th. Slattery said he does not know who else may have applied for the program. He hopes to receive the necessary CMS approvals by the end of 2011 and begin implementing AnewCareCollaborative sometime in 2012.
CMS remains tight-lipped about industry interest in the Pioneer ACO program. In an e-mail exchange, spokesperson, Ellen B. Griffith, would say only that CMS is "not announcing names or numbers of applicants.” CMS has targeted November for announcing the selections. It hopes to select 30 participants for the program.