Expect states and the federal government to begin taking a harder look at healthcare premium rate increases as part of the Accountable Care Act.
The Department of Health and Human Services issued a proposed rule in December, which defines what the agency considers to be "unreasonable" premium increases. If approved, the rule will set in motion the annual process that states and the federal government will follow in their review of premium increase proposals for the individual and small group markets.
Now a Health Affairs policy brief takes a look at how the proposed rule is expected to work.
For now 10%, which is higher than premium cost trends have tracked in recent years, is the "unreasonable" threshold for all rate increases filed or in effect as of July 1, 2011. HHS estimates that more than 50% of the rate filings in the individual market and 20%-40% of filings in the small group market will be deemed unreasonable and subject to review by state and federal officials.
Forty-three states and the District of Columbia permit state regulatory authorities to review health insurance rates. In some states regulators can reject rate increases while in others regulators can only review the proposed increases. Missouri, Montana, and Wyoming have no requirements for rate filing information. Arizona, Alabama, Georgia and Mississippi collect the rates for information purposes only.
HHS announced in February that it would make available nearly $200 million in grants to help states combat "unreasonable premium increases."
The proposed HHS rule sets these parameters:
Defines "unreasonable"as an excessive increase (above the 10% threshold), an unjustified increase (unsupported by data or documentation) or a discriminatory increase (premium increases are different for individuals with the same risk characteristics such as age and geographic location).
Permits HHS to conduct the rate review if the state doesn't have the resources or lacks the authority to conduct an effective review.
Requires insurers to submit a preliminary justification for the rate increase request, including any support data.
Denies HHS the authority to reject unreasonable rate increases although some states will have that authority.
Allows insurers to withdraw, reduce or continue with the unreasonable rate increase depending on state laws and regulations.
Requires an insurer to disclose on its company website any rate increases identified as unreasonable and to provide HHS with a final justification for proceeding with the unreasonable rate increase.
Allows review information to be posted on the HHS website.
Health plan leaders polled for HealthLeaders Media's Industry Survey 2011, cited "government laws and mandates" as a top driver of healthcare costs, second only to overutilization of services.
HHS is expected to respond to public comments and release a final rule later this year. The Health Affairs brief is available here.
Better communication between intensive care physicians and organ procurement coordinators could increase the availability of lungs and kidneys for transplant, research by the University of Pittsburgh Medical Center and the university's medical school shows.
More than twice as many lungs and nearly 50 percent more kidneys could be recovered for transplantation if ICU physicians and organ procurement coordinators worked together to monitor and manage the bodies of brain dead donors.
"Our analysis shows that an intensivist at the donor's bedside who aids and advises the organ procurement (OP) coordinator can result in a greater likelihood of recovering organs that are deemed acceptable for transplant, said lead author Kai Singbartl, M.D. Singbartl is assistant professor of critical care medicine at the University of Pittsburgh School of Medicine and a UPMC intensivist.
In 2008, UPMC Presbyterian implemented an intensivist-led organ donor support team to work with the OP coordinator at the bedside of brain dead donors. Standard protocols to maintain tissues and organs for transplant are supported by physician interventions, including adjustments to optimize oxygenation, and to balance blood pressure and flow, fluids, and other bodily functions to sustain as many organs as possible for transplant.
Data from adult brain dead donors between July 1, 2008 and June 30, 2009 was compared to data from July 1, 2007 to June 30, 2008, before the organ donor support team approach was used. In the earlier time period, 31% of potentially available organs were transplanted. Using the support team, transplants increased to 44% of available organs.
Data showed that the organ donor support team produced a 200% increase in transplanted lungs and almost a 50% increase in transplanted kidneys. Heart and liver transplantation rates did not register a significant change.
Researchers credit the conversion of medically unsuitable donors into actual donors, better resuscitation of unstable donors, optimization of organ function, and improved communication between the organ procurement staff, ICU team and transplant surgeons as contributing to the increased transplantation rates.
Dr. Singbartl cautioned that "the number of donors in our study is not large enough to determine whether a particular medical intervention played a key role, but it's very clear from our experience that this team approach did make a difference."
A study of high-deductible health plans reveals mixed results in terms of how these plans help cut health spending while maintaining quality care. Although HDHPs can significantly reduce health spending, they may also prompt patients to cut back on preventive health care, according to a RAND Corp. report.
The findings are important because HDHPs are expected to be a key offering in the insurance exchanges being set up in many states to help the uninsured find health coverage.
From 2004-2005, researchers studied more than 800,000 families insured through 53 large employers. About half of the employers offered an HDHP. The families were tracked over the first year of enrollment. Different patterns could emerge in subsequent years.
According to the study, high deductible plans resulted in an average 14 percent decline in health spending compared to lower deductible plans. The savings, however, decreased when employer contributions accounted for more than half of an individual's deductible. So, it appears the insured looked for ways to save money when it was their own, but that was not as much of a concern when they were less vested financially.
The amount of the deductible also made a difference. The study findings note that costs drop as long as the deductible is at least $1,000 per person.
The reduction in the use of preventive care was a disconcerting discovery. Childhood vaccination rates fell among enrollees in HDHPs as did the rates of mammography, cervical cancer, and colorectal cancer screening. This is a particularly troubling finding because HDHPs in the study waived the deductible for preventive care.
Researchers suggest that this may just be a communication problem that could be resolved by insurers providing more information about the waiver of health plan deductibles for preventive treatments.
Among the report findings:
Health costs increased for enrollees in both high-deductible and traditional plans but grew more slowly in the high-deductible group.
HDHP enrollees spent less on both inpatient and outpatient medical services, as well as prescription drugs. Spending for emergency care did not differ from traditional plans.
Individual deductibles must be rather high ?more than $1,000 per person? to achieve meaningful cost savings.
A few years ago I moved from my long-time home to a new city. As anyone who has ever relocated knows, settling in is a process that extends well beyond the arrival of the family furniture. There are schools to consider, restaurants to find, churches to join and friends to make.
To find our dentist, doctors and vet we did just like we did at our former home—we asked our friends and neighbors.
I will admit that not once did I consider looking at any of the physician ratings so proliferate on the Internet. Because I write about healthcare I knew that insurers were busy developing and introducing their own grading systems to guide members to “high quality” and “cost-efficient” physicians but I did not check on those either.
I know what I am looking for in a physician. Top on the list: Listens to me. There probably is not an effective quantitative method to measure that. And that is the root of the problem many physicians have with profiling or rating systems. From New York to California physicians have countered that the quality assessments are faulty and are really just a way for insurers to favor lower cost physicians over more expensive ones.
Payers have been dipping their toes into the profiling pond for several years now. The first efforts were more or less PR disasters for the health plans with the programs in Tennessee and Texas put on hold while state medical associations and Payers worked out the details.
But with all of the recent finger pointing regarding the high cost of healthcare, payers have persisted and developed some sophisticated models to assess their high volume physicians in terms of quality patient care.
What has emerged is a familiar list of best practices that, if followed, can often lead to improved patient outcomes in terms of breast and cervical cancer screenings, diabetes and cardiovascular care, and the monitoring of patients on persistent medications. The programs are mostly focused on a few specialties, including allergy, cardiology, endocrinology, family medicine, pediatrics, orthopedics and infectious disease.
Aetna, UnitedHealth, CIGNA and Anthem each have profiling programs underway. BlueShield of California will launch its program later this year. A few days ago, the insurer prevailed in a class action suit filed by the California Medical Association to contest the implementation of the Blue Ribbon Recognition Program. The complaints raised in the suit were common to physicians across the country: the scoring system is flawed, there is no review of medical charts, and no evaluation of patient outcomes.
It definitely is not a perfect system. A 2010 RAND Corp. study based on insurance claims detailed how unreliable measures of physician performance can lead to flawed assessments of the cost effectiveness of treatment by one physician versus another. That study, which was published in the New England Journal of Medicine, concluded that profiling was a strategy to reduce costs but that more accurate tools needed to be developed to create reliable profiles.
Because I am not a high volume user of physician services, I probably am not in the target market for profiling information. But if I were, I could see why my insurer might want to direct me to a particular physician and seal the deal with a financial incentive. At UnitedHealth for instance, members who use physicians in the insurer’s premium designation program pay a $30 copay for an office visit rather than $50.
Physicians are going to have to get accustomed to ratings and profiles---just like health plans have done. In the California case the system has the support of almost all the movers and shakers in healthcare---with the exception of the California Medical Association, which resigned from the project and instead filed an unsuccessful lawsuit.
As the national debate over healthcare costs goes on and on I hope the players will spend less time in court and more time working toward some real solutions.
Few healthcare providers would consider going into a critical negotiation process without a plan of action – in the form of extensive patient indexes, historical reimbursement rates and methods and competitive insights – yet numerous hospitals across the country are doing just that when it comes to negotiations with payers. In fact, many hospitals do not have a consistent or effective methodology for managing and negotiating complex contracts with managed care organizations. As a result, providers often enter into negotiations blind – not knowing the projected financial impact of their future contracts.
When providers are armed with the right information and resources, they can turn the negotiations process around to capture all revenue rightly owed to them by payer organizations. Below are five important steps to maximize revenue capture and maintain profitability by product lines when negotiating contracts.
1. Embrace Modeling Technology – Effective contract management systems should include modeling and analysis technology. Modeling helps contract negotiators consider “What if …?” scenarios before entering the negotiations process while allowing providers to create their own game plan – before they receive the first proposal from a payor. When modeling capabilities are in place negotiators can view current net revenue per day against cost information and quickly determine current utilization and profitability of services from a given payor. Negotiators can also compare the current contract inventories (not merely the payor under negotiation) against the proposal to understand the overall financial impact for their book of business, leveling the playing field with payers. It is important to always use scrubbed claims data in models as this provides an “apples to apples” comparison to the Healthcare Effectiveness Data and Information Set (HEDIS).
Many contracts are complicated by specific “second dollar” stop losses, exclusions and high-dollar case rates. The modeling process brings transparency to contract terms and rates being proposed by payers and influences better decision making based on facts. Some facilities have contract modeling databases in their contract management solutions that automate the manual processing, improve accuracy and afford users to better align contract forecast to annual budgets. Requesting decision support information joined to current CDM for manual calculations is no longer needed as this functionality should exist within existing tools.
2. Invest in Training Employees – Information gleaned from contract modeling software is only as good as the claims that are available within the system. This is why employees are a hospital’s greatest asset when it comes to contract negotiations. It is employees who must select the proper set of claims and corresponding data and then interpret that data – a process that can be difficult for contract auditors who haven’t been specifically trained. Providers should empower employees to ask the “why” questions: why are we losing money in service lines; why are we not getting reimbursed correctly; and why are payers denying claims? Then, give them the tools and the authority to collect underpayments and fight for net revenue the organization is contractually owed. It’s crucial to educate and train employees on a hospital’s contract management solution to demonstrate effective utilization of the system. Organizations can also create individual policies and procedures to enable a repeatable process for recovering all they are owed and promoting better financial forecasting.
3. Examine Your Source – If you have problems with a certain payor, it’s likely that you have that same problem with other payers on similar service types, and it’s important to acknowledge that the problem might be on your end. Improper billing, coding, and charging patterns and incorrectly loaded contract terms are often the culprits. Services that are often affected include cardiac care, high cost drugs and implants. It’s crucial to look for the root causes of your issues, and you should be prepared to implement true cultural changes to resolve the challenges.
Hospitals should train contract auditors to think outside the box and incent them to get to the root of issues to truly maximize returns. Tools like an “account work list” give hospitals the ability to analyze payment trends and evaluate opportunities to improve contract terms. Combined with contract modeling tools and capabilities, hospitals can model the impact of changes and make informed decisions when negotiating new payor agreements.
4. Have Plans A, B and C – As with every successful project, hospitals must have a plan for contract negotiations. It’s important to address crucial issues, such as how to handle the “what if” scenarios, how to formulate and compare large volume payers to one another, and how to make enterprise-wide cultural changes, not just departmental changes, around the negotiation process. Hospitals should start with a key goal in mind – net revenue growth. They should identify specific volume and growth expectations, always using the prior year as the basis. To ensure the total net revenue goal is met, providers must revisit prior payor behavior for trends in areas such as underpayments, overpayments, denials and patient liability shifts. This step also helps forecast how much administrative time will be spent on a particular negotiation and identify prospective views of what might roll to allowances for doubtful accounts or bad debt.
5. Know Where You Net Out – In addition to utilization, contract modeling calculates an organization’s net revenue per day per contract as well as averages of other payers, including length of visit by service line type, total patient days, visits by IP/OP and high risk items like observation and multi-service bundling. Net revenue per day serves as a benchmark of how much money a hospital must bring in per patient per day to ensure profitability, and it usually comes up during contract negotiations. Armed with this information, all internal parties involved in the negotiation process can see the causes of any reimbursement or pricing issues and work together to resolve them in advance of negotiation sessions.
Troy Roth is senior vice president of revenue cycle product strategy and solutions support for MedAssets, a financial improvement partner for healthcare providers. Roth can be reached via email at troth@medassets.com.
The admission of making a mistake resulting in damage to patient trust and threat of litigation is a weight on the minds of all physicians.
Failing to address the values of error, near miss, and unsafe condition reporting with residents is detrimental to both the institution and the trainee, says David Mayer, MD, associate dean of curriculum, associate professor of anesthesiology, and coexecutive director of the Institute for Patient Safety Excellence at the University of Illinois at Chicago (UIC).
If residents fail to report errors and unsafe conditions, the institution misses opportunities to improve systems in the hospital that affect quality. They also miss a valuable teaching opportunity for their residents, Mayer says.
Not to mention that medical errors are extremely taxing and stressful for residents, says Sigall K. Bell, MD, assistant professor of medicine in the Division of Infectious Disease at Harvard Medical School in Boston. Bell, who has coauthored academic articles on the topic, says the following issues often make residents apprehensive about disclosing and reporting errors or adverse events:
1. Emotional distress. Residents are often trained under the assumption that physicians do not and cannot make mistakes; the pressure for perfection can be immense. After an error, many residents feel fearful, alone, and guilty. They worry about the harm caused to their patient, their career, and their future.
2. Experience-proficiency balance. Defining medical errors in the context of teaching hospitals is difficult because residents are still learning and need clarification on what to report.
For example, during a conversation about medical errors, Bell says a trainee asked whether taking three tries to find the cervix during a pap smear is considered a medical error. "It's an interesting question," Bell says. "Where do you draw the line on proficiency? You need experience to gain proficiency, but in many cases you need proficiency to get the experience." Trainees struggle with striking a balance between safely gaining experience and proficiency.
3. Microscope of evaluation. Residents know they're being evaluated by their attending physicians, and they may worry that admitting an error will adversely affect their standing, Bell explains.
This inherent and unavoidable conflict also applies when residents witness their supervisors committing an error. They are hesitant to report the incident for fear of retribution.
4. Not-so-hidden curriculum. "The hidden curriculum refers to the notion that residents are shaped in very powerful ways---not just by the formal curricula, but by informal mechanisms," Bell explains, adding that residents learn the unspoken codes of conduct and habits from attending physicians and others. The hidden curriculum can be a commanding force that sometimes trumps traditional teaching methodologies.
"You can design a curriculum on how to disclose medical errors, but if that's not the practice in the clinical environment, then your teaching won't have much influence," Bell says.
Faculty and attending physicians must disclose their errors and encourage residents to do the same in order for trainees to feel comfortable coming forth.
5. Threat of litigation. Residents worry about the legal ramifications that may arise if they admit to making an error, says Mayer. Having a supportive environment that encourages error disclosure assuages these fears. Ask risk management or the legal team to speak with residents about the institution's disclosure policy and what constitutes an error. If trainees see that the legal department advocates for open error reporting, they will be more likely to come forward.
6. Rocking the boat. Medical students and residents may not report a mistake or near miss to a senior resident or attending physician because they do not want to create more stress for the team. "The sentiment is, 'Everyone is already stressed enough, and I don't want to make it worse,'" Bell says.
7. Confusion over where to go for help. Bell and Mayer say trainees in their respective institutions have indicated that they do not know the proper process for reporting an error.
Before an educational intervention, Mayer says less than 1% of the institution's event reports were made by residents. "Now, the number of occurrence reports coming from residents is almost 30% of all reports," he says.
Similarly, Bell conducted a survey of 154 medical students and residents and found that 62% had made a mistake; of those trainees, 26% were not sure how to get help.
Bell and Mayer agree that institutions need to dedicate resources and training sessions for residents that specifically address these issues. The training should include definitions of errors, examples, and hands on education on the hospital's error reporting system.
As lawmakers shaken by the shooting of a colleague return to the healthcare debate, an Associated Press-GfK poll finds raw feelings over President Barack Obama's overhaul have subsided. Ahead of a vote on repeal in the GOP-led House this week, strong opposition to the law stands at 30%, close to the lowest level registered in AP-GfK surveys dating to September 2009. The nation is divided over the law, but the strength and intensity of the opposition appear diminished. The law expands coverage to more than 30 million uninsured, and would require, for the first time, that most people in the United States carry health insurance.
Information technology may be solution to the overuse of imaging technology.
Clinical decision support systems may save money by reducing the number of inappropriate medical imaging procedures, including computed tomography and magnetic resonance imaging, researchers at Virginia Mason Medical Center find.
Targeted use of imaging clinical decision support is associated with large decreases in the number of orders for three common imaging exams, according to findings published this month in the Journal of the American College of Radiology.
The research comes from Virginia Mason Medical Center in Seattle.
The findings are particularly significant as cost-containment efforts increasingly target imaging. Providers are under pressure from payers to limit imaging to evidence-based applications, the authors note. Clinical decision support systems appear to provide a way to do just that. They can provide real-time feedback to providers ordering imaging tests, including information on test appropriateness for specific indications.
The retrospective cohort study looked at evidence-based clinical decision support built into ordering systems for selected high-volume imaging procedures: lumbar MRI, brain MRI, and sinus CT. Brain CT was included as a control.
Results showed the rates of imaging after intervention were 23.4% lower for lumbar MRI (for low-back pain), 23.2% lower for head MRI (for headache), and 26.8% lower for sinus CT (for sinusitis).
The data came a regional health plan's billing data as well as the institutional radiology information system, the authors explained.
Clinical decision support is potentially an ideal method for improving the evidence-based use of imaging; clinical decision support systems have the desired properties of being educational, transparent, efficient, practical, and consistent, according to C. Craig Blackmore, MD, MPH, lead author of the study.
That echoes the paper's conclusion: Implementation of imaging clinical decision support for selected high-utilization imaging procedures "can aid the elimination of unnecessary imaging, increasing both patient safety and quality and decreasing health care costs."
Some questions remain about how the findings may be generalized, however. The research was performed in a multispecialty integrated healthcare network and, the authors acknowledge that the setting "likely had a substantial effect" on the program's success.
"At Virginia Mason, we have an integrated healthcare delivery system that leads the country in both quality and efficiency. Our success is attributable in part to the Lean manufacturing strategy we employ through our Virginia Mason Production System," Blackmore explains. (VMPS is a system-wide program to change the way the facility delivers healthcare based on the basic tenets of the Toyota Production System.) VMPS allows for enterprise-wide quality initiatives, such as imaging computer decision support, he says.
Implementation might be more challenging in a less integrated healthcare model, he acknowledges. But the payoff is worth it, given the alternative. "The usual alternative to computer decision support for controlling inappropriate utilization is a pre-authorization program. Pre-authorization is more costly, more intrusive, and less well accepted than CDS. So, I would recommend CDS as the preferred imaging utilization approach for other provider groups and hospitals."
For iPhone users, there seems to an endless stream of innovative apps and one of the newest allows patients to access personal medical records while they're on-the-go.
Sutter Health in California became the first healthcare system in the state to provide patients access to "MyChart for the iPhone," an app from tech company Epic that allows patients to access their electronic health records using an iPhone, iPad or an iPod touch. MyChart allows users to send a secure message to their doctor, check lab or test results, view or schedule appointments, and receive reminders about scheduling routine checkups and exams.
"The MyChart app literally puts the tools patients need to manage their health right at their fingertips," said Albert Chan, MD, a family medicine physician with Sutter-affiliated Palo Alto Medical Foundation. "And it's really helpful in reminding patients when they're due for preventive care for things like pap smears, mammograms or flu shots."
The tool alerting users that it's time to schedule annual screenings and tests serves a dual purpose. It helps patients maintain a schedule of preventive care while driving more business to providers that may have been overlooked without a reminder.
Sutter Health, which is based in Sacramento and operates 24 hospitals and 17 outpatient centers in California, is marketing "MyChart for the iPhone" through a network of online sites including FaceBook, Twitter and its own Web site. For now, only patients who are signed up for Sutter Health's My Health Online service can use the app, since they need to have a pre-existing connection to Sutter's online network. Chan said there are more than 400,000 Sutter Health patients signed on to My Health Online and he expects word-of-mouth from users to spread the word about MyChart through a sort of informal viral campaign.
"We launched on Jan. 3 and we already have users posting messages on FaceBook about how cool the new app is," said Chan. "So we expect people who were already using My Health Online to spread the word about the new iPhone app." Sutter is also promoting My Health Online with YouTube videos that feature patients describing how they use the service. They include a mother talking about how she uses My Health to manage her family's healthcare. The app is free to Sutter Health as part of its online services contract with Epic.
Other healthcare providers using the new iPhone app are taking a similar approach by using social networks and their own Web sites to spread the word. The Dean Clinic in Wisconsin was the first health system to launch MyChart for the iPhone in September 2010. "We see this is as a valuable service to our patients," said Dean Clinic project manager D.J. Curran. "The app gives patients fast, secure and convenient access to the most frequently used features of MyChart."
SSM Medical Groups in Missouri began offering the app to patients in October. Since then, spokeswoman Kristen Johnson said 485 patients have signed up for the service.
Overall, more than a dozen healthcare providers across the U.S. have adopted the MyChart app, including Oregon Health & Services University, Hawaiian Pacific Health, Baylor Clinic in Texas, and The Institute for Family Health in New York.
With a stroke of a pen, President Obama Wednesday signed the so-called 'Doc Fix' bill. The law delays by one year implementation of the sustainable growth rate formula, which sets the rates of Medicare reimbursements to physicians.
Healthcare groups have publicly applauded the postponement, saying that it is vital to ensuring the availability of healthcare coverage for seniors.
Privately, however, many remain frustrated that a permanent solution to the Sustainable Growth Rate formula for Medicare funding, which has called for cuts in Medicare reimbursement over the past decade (including a 25% reduction in Medicare reimbursements that would have taken effect Jan. 1, 2011), remains so elusive.
Among others, President Obama recognizes the need for this issue to be dealt with once and for all. “It's time for a permanent solution that seniors and their doctors can depend on, and I look forward to working with Congress to address this matter once and for all in the coming year,” he said last week after the U. S. House voted overwhelmingly to delay the cuts.
For its part, Congress voted in favor of delaying the nearly $20 billion in reductions to physician pay five times this year alone.
Perhaps the easiest question to answer in regard to the seemingly perpetual delays to Medicare reimbursement cuts is, “how did we get into this mess?”
“It’s the insane rules of the budget game in Washington,” said Bruce Vladeck, former administrator of the Health Care Financing Administration (HCFA). “It often boils down to selective insistence by some members of Congress relative to what is allowed to enter the deficit and what isn’t.”
More often than not, SGR has fallen into the latter category, with lawmakers believing that a true physician compensation solution should have funding before it’s approved.
According to Senate Majority Leader Harry Reid (D-NV), the legislation would be paid for by modifying the policy regarding overpayments of the healthcare affordability tax credit.
But the irony is that the longer Congress avoids a permanent solution, the greater toll the SGR formula extracts on the federal budget. “There is the underlying deficit that is something akin to $300 billion that needs to be dealt with first,” says Anders Gilberg, vice president of public and private economic affairs for the Medical Group Management Association (MGMA). “This is the biggest impediment to long-term reform.”
So can we expect more of the same waffling next year when this most recent temporary fix runs out? Experts say it’s highly likely, though there are avenues that could serve as a permanent solution, including implementing a system that tracks some level of medical inflation to pay physicians for the real cost of delivering care.
But that still leaves the issue of how to pay for the collected Medicare reimbursement deficit racked up over the past decade. Vladeck, now a senior advisor with healthcare consulting firm Nexera, has his thoughts: “I suspect there will be a balanced budget act at which point I would hope [a permanent solution] be addressed since that is probably the best vehicle to pay for a fix.”