ACA - Trouble in Paradise

ACA - reality sets in

A letter from union leaders to Sen. Reid and Rep. Pelosi (July 2013)

Dear Leader Reid and Leader Pelosi:

When you and the President sought our support for the Affordable Care Act (ACA), you pledged that if we liked the health plans we have now, we could keep them. Sadly, that promise is under threat. Right now, unless you and the Obama Administration enact an equitable fix, the ACA will shatter not only our hard-earned health benefits, but destroy the foundation of the 40 hour work week that is the backbone of the American middle class.

Like millions of other Americans, our members are front-line workers in the American economy. We have been strong supporters of the notion that all Americans should have access to quality, affordable health care. We have also been strong supporters of you. In campaign after campaign we have put boots on the ground, gone door-to-door to get out the vote, run phone banks and raised money to secure this vision.

Now this vision has come back to haunt us.

Since the ACA was enacted, we have been bringing our deep concerns to the Administration, seeking reasonable regulatory interpretations to the statute that would help prevent the destruction of non-profit health plans. As you both know first-hand, our persuasive arguments have been disregarded and met with a stone wall by the White House and the pertinent agencies. This is especially stinging because other stakeholders have repeatedly received successful interpretations for their respective grievances. Most disconcerting of course is last week’s huge accommodation for the employer community—extending the statutorily mandated “December 31, 2013” deadline for the employer mandate and penalties.

Time is running out: Congress wrote this law; we voted for you. We have a problem; you need to fix it. The unintended consequences of the ACA are severe. Perverse incentives are already creating nightmare scenarios:

First, the law creates an incentive for employers to keep employees’ work hours below 30 hours a week. Numerous employers have begun to cut workers’ hours to avoid this obligation, and many of them are doing so openly. The impact is two-fold: fewer hours means less pay while also losing our current health benefits.

Second, millions of Americans are covered by non-profit health insurance plans like the ones in which most of our members participate. These non-profit plans are governed jointly by unions and companies under the Taft-Hartley Act. Our health plans have been built over decades by working men and women. Under the ACA as interpreted by the Administration, our employees will treated differently and not be eligible for subsidies afforded other citizens. As such, many employees will be relegated to second-class status and shut out of the help the law offers to for-profit insurance plans.

And finally, even though non-profit plans like ours won’t receive the same subsidies as for-profit plans, they’ll be taxed to pay for those subsidies. Taken together, these restrictions will make non-profit plans like ours unsustainable, and will undermine the health-care market of viable alternatives to the big health insurance companies.

On behalf of the millions of working men and women we represent and the families they support, we can no longer stand silent in the face of elements of the Affordable Care Act that will destroy the very health and wellbeing of our members along with millions of other hardworking Americans.

We believe that there are common-sense corrections that can be made within the existing statute that will allow our members to continue to keep their current health plans and benefits just as you and the President pledged. Unless changes are made, however, that promise is hollow.

We continue to stand behind real health care reform, but the law as it stands will hurt millions of Americans including the members of our respective unions.

We are looking to you to make sure these changes are made.

James P. Hoffa
General President
International Brotherhood of Teamsters

Joseph Hansen
International President
UFCW

D. Taylor
President
UNITE-HERE

Early Retirement?

There is some buzz about the possibility or probability of physicians retiring early due to unhappiness with PPACA (Obamacare). Bitching and whining is hardly new for physicians, and there are plenty of people wanting to put a bad spin on Obamacare.

So I have worked my way through a part of my national network; and have a decidedly non-scientific survey about the buzz.

Some possible trends:

The electronic medical records installation and networking is a major nightmare, with many older physicians resenting the cost and hating the input devices.

Many physicians believe their only financial sanctuary is a closer integration or even employment by a hospital or integrated network, and many are bitter about a forced marriage with possibly a dysfunction partner (physician relations with hospitals have always been tense at best).

The rate of change or at least the ubiquitous talk about change (ACOs, bundling, extensive quality metrics) gets tiresome; death by meetings and memos.

The Medicare push to prevent hospital re-admissions has interfered with clinical judgment and put elderly patients at risk; ditto for earlier discharges. Nursing home and hospice work is a tiresome pain in the butt.

The stock market is coming back, and with it physician 401(k) balances.

The physical health of older physicians is not optimal, 30 -  40 years of stress and sleep deprivation take a toll (consistent with my observations over the decades).

So, smoke or real fire? Time will tell

Making Odds

Making Odds

At the pace quickens I am setting odds on the potential success of various Obama initiatives.

Electronic medical records (networked) are a major success in 2014.        0%

Electronic medical records (networked) are a modest success by 2014.   30%

Electronic medical records (networked) are a major league fail.                70%

Health care exchanges work effectively after a brief shake down.              0%

Health care exchanges have a troubled first year but then gain ground.      40%

Health care exchanges work but are very troubled.                                   40%

Health care exchanges are a complete dud.                                                20%

I hope I am wrong.

Complexity Blogging

More Complexity Grumbling

I have made the point many times that if anything stops Obamacare it will be the inability to implement an extremely complicated program. Call it “Tom's Theory of Complexity.”

The feds have now published (link below) the draft application for financial assistance in health care exchanges and low income plans. Oh boy.

With attachments this could easily run 30 + pages, and of course someone is going to have to process this (there will be an online version). Having helped people with paperwork for nearly 40 years I can guarantee this will be intimidating and confusing to many people.

Complication is the enemy of implementation. Count on it.

http://cms.gov/Regulations-and-Guidance/Legislation/PaperworkReductionActof1995/PRA-Listing-Items/CMS-10440.html

PS: HR Block has already positioned itself as a likely fee-for-service form fill-in service. Somebody is going to profit here.

Could Obamacare Collapse?

How Obamacare Could Fail

One of my non-scientific methods of gauging the current state of the health care system is by the requests I receive for writing and editing.

For example, I have recently received four requests to write about failed electronic medical records systems (no surprise there).  Others include the progress of accountable care organizations (ACOs), the future economics of physician groups, compensation models for physicians, hospital/physician relations and new regulatory issues for nursing homes.

So all of this gets me thinking; what could happen to create a catastrophic failure of Obamacare?  My thoughts….

Accountable Care Organizations:  ACOs could fail to work as hoped by the feds, this could collapse the foundations of Obamacare

Failed integration efforts: hospitals and systems are integrating multiple services, creating much larger and much more complex organizations, not  all of them will work

Exchanges:  the shopping experience becomes a confusing mess (high probability IMHO)

Payment Innovations:  innovations such as fee bundling fail to be feasible

Employer meltdown:  employers engage in wholesale dumping to the exchanges (not impossible in such a weak economy)

So, what are the odds of catastrophic failure?  50% - 50% in my opinion.

Tom

Essential Benefits

The final regulations were published on "essential benefits." No major surprises.

The best "plain English" summary we can find is at:

http://www.healthinsurance.org/blog/2013/02/22/hhs-gets-specific-on-acas-essential-benefits/

PPACA Update

The slow march toward full implementation continues.

Exchanges –  As of today 17 states will create their own exchange, seven states will partner with the government, and 26 states have defaulted to the federal program (if anyone asked we would suggest defaulting in order to let the feds do the early heavy lifting).

Perhaps the most important questions now are:

Will any of the exchanges be ready on time?

Will the products be affordable?

How will employers respond?

Employer Response – there is a great deal of discussion but very few decisions have been announced (although some are likely in place but not announced).

Will a generally weak economy and slack labor market play into the decisions? Time will tell.

A strategy of self-insuring may gain favor, and we will do a separate post on that topic.

Providers – the word heard most often is “chaos.”  Providers are trying to prepare for a system as yet poorly defined. Some trends are emerging (integration, the early ACOs) but it is too early to tell how anything will work.

Issues in primary care and rural health care are likely to be especially acute.

Consultants and health care focused lawyers are raking it in – so somebody wins.

EMR - Salvation or Policy Failure?

Health Care Thoughts:  Electronic Medical Record Meltdown

In the past I have predicted the EMR focus of the Obama administration might not work as well as intended. Sadly, and many billions of dollars later, I may be correct.

(The New York Times has run many pieces on this, the latest on the hard copy business page on 1/11/2013.)

And next year we make the ICD-10 conversation, sort of throwing gasoline on a raging fire.

There are a multitude of problems:

Too many vendor systems, making EMR to EHR linkages difficult

Crazy long and complex federal regulations

The input devices irritate physicians and disrupt the flow of the office practice

Medicare thinks EMRs are inflating billings, due to text cloning and auto-coding

The hospital and nursing home systems are often distractions to nursing

Going totally paperless is largely a myth so far

HIPAA security issues abound

So where will EMRs work? Based on recent observations perhaps in very large integrated systems where every provider is on the same system, although some of the front line personnel are singing the same sad songs as others.

E-prescribing may be one area with some success.

 

PPACA Penalty/Tax

The Congressional Budget Office predicts in 2016 up to 6 million largely middle income workers will pay the PPACA "tax" or "penalty" or whatever we decide to call it, averaging about $1200. This is about 50% higher than previous estimates of impacted taxpayers.

A weak economy plays into the increased estimate.

According to the CBO, most of the payers will be in the middle class. Does this constitute a middle class tax increase?

In this political season hot rhetoric is flying from both sides. Expect the charges and counter charges to continue.

PPACA and Employers

One of the more suspenseful issues of PPACA (aka  Obamacare) is the question of employer conduct in 2014 and after.

Question is, will employers drop health insurance and punt workers into the state exchange system? Some new perspectives have been added to the debate. (Both assume PPACA will not be repealed or materially altered before 2014, an issue to be settled by the 2012 election.)

The Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT)  have weighed in on the question (https://www.cbo.gov/publication/43082) . (Warning, very long)

This report tries to cover multiple options and scenarios, but I think it comes to a Goldilocks conclusion, not to hot and not too cold, but something in the middle of the range of possibilities.

A McKinsey and Company (MC) study (http://www.mckinseyquarterly.com/How_US_health_care_reform_will_affect_employee_benefits_2813) reaches much different conclusions.

McKinsey sees up to 30% of employers dropping employer–sponsored insurance (ESI), and perhaps more as awareness spreads and 2014 approaches.  MC also suggests exploration of any number of employer options, some good for employees, some not.

My spin? If the labor market remains weak, and underemployment and limited employee options continue, more employers will drop ESI and employees will have little so say or do about it.

There is a lot to digest here. More analysis required.

Physicians "Rationing" Care

Nine physician panels have recommended less testing of patients presenting with various conditions and diseases and less treatment for some diagnosis.

For Details: New York Times

http://www.nytimes.com/2012/04/04/health/doctor-panels-urge-fewer-routine-tests.html?_r=2&ei=5065&partner=MYWAY&pagewanted=print

Much of this is low hanging fruit, such as using less antibiotics for sinusitis.

Other recommendations may be more controversial. In 2009 evidenced based recommendations to do less breast cancer screening were met with a firestorm of criticism. Current recommendations to do less cancer screening may meet a similar fate.

There will be another controversy, whether or not these guidelines would protect a physician using conservative treatment protocols from malpractice suits. In my experience, probably not.

Eventually payment bundling and new payment schemes may accomplish the "rationing" via a different route.

Stay tuned.

Regulatory Train Wreck

In early 2009 (following up work by the Bush administration) DHHS decreed that all providers would convert from ICD-9* coding to ICD-10* coding by October 1, 2013,

Most medical billing requires both an ICD code (disease or condition) and a CPT code (treatments given).

This conversion was to take place at the same time as PPACA (Obamacare), a multitude of quality reporting initiatives, audit programs and a major push for electronic health records. This avalanche was especially difficult for physician practices

Vast resources were expended for technology, planning and process management, extensive training programs were being developed, and then....

DHHS came to its senses and has indefinitely deferred the conversion. Ghastly poor judgment by the technocrats. Poor judgment has costs and consequences.


* International Statistical Classification of Diseases and Related Health Problems, Editions 9 and 10, usually known as ICD-9 and ICD-10. The conversion would have increased the number of reportable codes by about 500%, required reprogramming of an immense number of IT systems, and massive training initiatives.

Irony Alert

The Obama administration has issued administrative regulations requiring health insurance companies to provide "plain English" explanations of health insurance coverages.

The regs, issued by the IRS and the DOL, are 150 pages of barely readable bureaucratic gibberish.

This continues a trend of the administration writing long and complex administrative regulations. Lawyers are celebrating.

Accountable Care Organizations - Second Attempt

Accountable care organizations (ACOs) are the keystone of PPACA (Obamacare) as far as restraining costs and improving quality.

Early this year there was great excitement about ACOs in the provider community, but the publication of the (first phase) Medicare ACO rules threw cold water on the concept.

The rules were at best complicated and convoluted and providers ran for the hills. The administration tried calming the fleeing providers with fast track and modified programs, without much success.

On October 20th the Obama administration published revised Medicare ACO rules. The "simplified" rules run 696 pages! Most of us are still reading and analyzing, but the response seems to be less one of fear and more one of disinterest - but time will tell.

The administration finally got smarter and announced modifications to antitrust policy so Obama's DOJ would not be wrecking the work of Obama's DHHS.

Bad news though, employers and insurers see the possibility of intense ACO activity as anti-competitive.

This is a mess.

IOM Recommendations

The Institute of Medicine (IOM) an influential organization long known for criticizing health care providers and advocating reform, has issued process recommendations for deciding the "essentials" of health insurance plans. An essentials list is required by DHHS by 2014 for all health plans available on the state health exchanges. The essentials should balance quality of care with projected premium costs.

PPACA does specify ten (10) broad areas of coverage, but not a specific plan menu.

The IOM study was a disappointment to some because it did not specify benefits, as this would have been a good discussion starter and would have given DHHS some political cover. The IOM focused on an approach to making the decision, and it is to start with costs and then work into benefits.

IOM also suggested an annual review of the programs beginning in 2016, and some waiver flexibility for states to customize plans.

Not exciting, but very very important.

see: http://www.iom.edu/Reports/2011/Essential-Health-Benefits-Balancing-Coverage-and-Cost.aspx

Bundled Payments Proposal

PPACA (Obamacare) included initiatives to create "bundled payment" plans for Medicare (which would likely encouraged bundled payment for other payers as well).

This week the CMS Innovation Center issued directives encouraging creation of four (4) models of bundling services.

Rather than paying for quantity of services, Medicare wants to pay for quality and outcomes (this can become problematic in elder care).

This could be one PPACA initiative that actually brings some significant results, or the bureaucrats could bungle it. Time will tell. For now providers are on board or even ahead of CMS, racing to get ahead of the changing revenue cycle.

There are significant business complications in making this shift, so we do not expect quick progress or instant success.

ACOs Becoming IPWACOCs?

Accountable Care Organizations (ACOs) are the keystone of the Obamacare efforts to improve quality and control costs.

After considerable initial enthusiasm providers have cooled on the ACO concept, especially as envisioned by the Center for Medicare and Medicaid Innovations. Why? Apparently.....

* ACOs are very difficult to organize and assemble
* ACOs are very difficult to operate and manage
* ACOs are unlikely to provide gain sharing dollars higher than new administrative costs

So is there good news? Yes.

Providers appear to be picking various components of the ACO concept and creating new and innovative models for improving care and containing costs.

It is way too early to declare a trend or to make definitive statements, but it appears providers are creating Innovative Projects With ACO Characteristics, or IPWACOCs.

He4alth Insurance Exchanges

The Obama administration has published draft rules for the formation and operation of Affordable Insurance Exchanges, a key element in the PPACA (Obamacare) plan to increase insurance coverage.

There is a 75 day comment and then more time to digest the comments before final rules are issued. Implementation is due by January 1, 2014.

See the rules here, 244 pages:

http://ofr.gov/OFRUpload/OFRData/2011-17610_PI.PDF

Physician Briefing Paper Number 1

We have published our first Physician Briefing Paper. Click the title line to link to our library.

Obama Administration Mystery Shoppers

If there is anything most health policy wonks and politicians agree on, it is the shortage of primary care physicians, a shortage that may get worse.

So now the Obama administration is setting out to prove what we already know, and likely to create a public relations attack on primary care physicians.

The administration has hired a research firm to employ mystery phone shoppers to call primary care offices with two versions of a script, one a insured patient script and the other a government funded patient script.

The purpose is to measure wait times for new appointments, and to look for discrimination against government-funded patients, particularly Medicaid patients.

The biggest burden will fall on front desk personnel, who are always too busy (I never asked an employee to do what I wouldn't, so I have worked the receptionist chair - gasp).

All this to prove what we already know. ????

ACO Update

Accountable Care Organizations are the heart-and-soul of Obamacare quality and cost control initiatives. All is not healthy.

Ready – Fire – Aim

When the Center for Medicare and Medicare Innovation (CMMI) released the draft regulations for Medicare ACOs on March 31, 2011 the reaction was brutal. CMMI was publicly beaten like a rented mule, even by enthusiastic supporters of the ACO concept.

Criticisms included: 1) the rules are too complex 2) start-up costs will be much higher than CMMI estimates 3) the probably of achieving savings to share is small and 4) the time lines are too short.

The Empire Strikes Back

In May CMMI burst forth with two new models in an attempt to quiet critics (unlikely) and to improve participation.

Advanced Payment ACO

AP-ACOs are designed to share ACO shavings before the savings are created, in effect, an advance for start-up capital. No one has told us yet what happens if the AP-ACO never generates any savings.

Pioneer Model ACOs

CMMI is hoping large physician groups already involved in the Medicare physician group practice demonstration program will start ACOs before the 1/1/2012 start-up date.

CMMI jeopardizes this initiative out of the gate by setting a ridiculous deadline. The deadline has now been extended a slightly less ridiculous deadline of August 19th.

The Pioneer Model is more flexible than the original Medicare SSP-ACO model, and has rules for both regular and “rural” ACOs, but is practically restricted to existing integrated delivery systems capable of moving very, very quickly.

Physicians Move to Integrate

Story in the Washington Post.. (c) Washington Post Co., 2011

http://www.washingtonpost.com/national/health-science/hospitals-courting-primary-care-doctors/2011/05/31/AGYutAcH_story.html?hpid=z1

Pharm Supply Chain Meltdown

The pharmacy supply chain for many critical medications is melting down, with resulting shortages.

Why? The potential list so far:

1) ultra-cheap generics are no longer profitable to produce
2) an international supply chain does not work smoothly all the time
3) consolidation in the pharmaceuticals industry
4) hyper-regulation from the FDA since 2006 has disrupted the chain with little gain in safety

The hyper-regulation problem, involving both real safety issues and of course increases in paperwork is likely the biggest problem. The biggest problems seem to be in injectibles, including certain cancer and anesthesia drugs, which are being rationed if they can be found at all. Rationing and substitution seem to be the only short term solutions.

Non-compliant patients - what to do?

Ask physicians and nurses about their biggest clinical problems and non-compliant patients will likely be near the top of the list.

And why should we care? Because non-compliant patients are huge cost drivers.

Ezekiel Emanuel (MD, PhD, NIH) estimates that one-third of U.S. health care costs are driven by diabetes, and we know a lot about controlling diabetes, but it is very dependent on the patient being compliant with diet and medications. We don't do so well on this. Ask a nurse.

Is there something about Americans that make us less compliant than we should be? Is our consumer culture a bad place to promote health? Is there not enough information? Are we stressed into non-compliance?

Whatever the reason, it is very costly for all of us.

Accountable Care "Smackdown" Part III

The feds fight back - Yes We Can!

From modernhealthcare.com today, Berwick interview:

http://www.modernhealthcare.com/article/20110517/NEWS/305179959?AllowView=VW8xUmo5Q21TcWJOb1gzb0tNN3RLZ0h0MWg5SVgra3NZRzROR3l0WWRMZmJVZndHRWxiNUtpQzMyWmV1NW5zWUpibW8=

Accountable Care "Smackdown" Part II

While the feds were developing regulations for Medicare ACOs, both the feds and the American Hospital Association were developing cost numbers for ACO start-ups.

Today the AHA published its preliminary numbers, listing 23 major competencies to form and operate a hospital-based ACO (the AHA has been generally supportive of reform efforts, seeing a grim future).

The AHA costs estimates ranged from 600% and 1400% higher than the DHHS-CMS estimates. Both estimates are preliminary, but that is a huge difference. In my opinion (without deep analysis) the federal estimates have the substance of cotton candy.

On the list of 23 competencies, some were for formation only but most for formation and operations (my own list was 13 major competencies for on-going operations). The ACO is a very complex business model.

If ACOs do not fly, the major objectives of PPACA (Obamacare) will be difficult if not impossible to achieve.

Accountable Care "Smackdown"

The American Medical Group Association represents about 400 very large and sophisticated multi-specialty physicians groups, such as the Cleveland Clinic group and Intermountain (Utah) group.

The Obama administration had counted on these groups to be the first to create Accountable Care Organizations (ACOs), starting with Medicare ACOs in 2012 and then moving to full service ACOs. These groups were more likely to have the resources necessary to start an ACO.

On Wednesday the group announced probably 90% of its members would not participate, because the draft regulations issued March 31st were too prescriptive, too operationally complex, the move to risk sharing is too quick, the gatekeeper and risk management capabilities requirements too much, and the time lines too short. The AMGA consensus is the chance of success is close to zero, so why waste resources.

If the big 400 cannot chew through this and come up with a workable plan, neither will other physician groups. Based on our recent conference attendance many provider organizations are taking the slow down approach.

It appears today only very large very integrated systems owning all of the necessary providers will be in the first wave. This could change for the better, but we doubt it. This could change for the worse though.

Not enough ACOs, no significant cost savings with quality improvement, no deficit improvement, train wreck.

The Wave of the Future? ACOs?

Having recently plowed through about hundreds of pages on Accountable Care Organizations (ACOs) and Integrated Delivery Systems (IDSs), we should know how to define an ACO.

But not exactly.

This is critical because the Obama administration expects to garner huge savings from providers working through ACOs, beginning for Medicare in 2012 (building such systems in less than 9 months is going to be a Herculean task)..

The best formal definition we have seen to date, and it is very general, is the CMS definition for Medicare ACOs, and I quote:

Q: What is an "accountable care organization."

A: An Accountable Care Organization, also called an "ACO" for short, is an organization of health care providers that agrees to be accountable for the quality, cost and overall care of [Medicare] beneficiaries who are enrolled in the traditional fee-for-service program who are assigned to it (ACO).

It is a start, barely. The ACOs are supposed to be in place 1/1/2012. Administrative regulations were issued in November 2010 and the public comment period ended recently.

In a recent speech DHHS Sec. Berwick offered these "flag and apple pie" characteristics, still very general:

• the patient and family will be at the center;
• teamwork will now become “paramount;”
• respect resources and reduce waste;
• reinvest where investment counts;
• measure and manage outcomes partially through electronic health records; and
• establish a solid health care workforce foundation

If ACOs are to dominate the health care arena, we should probably know how to define an ACO.

Social Media and Employee Speech

The National Labor Relations Board (NLRB) forced a settlement on American Medical Response of Connecticut Inc. after AMR fired an employee (and Teamsters member) who went home from work and profanely blasted her supervisor as being mentally ill on Facebook. Other employees posted responses supporting the employee.

The law protects the free discussion of working terms and conditions, and concerted activity, even in a crude and lewd manner in a public Internet space.

AMR agreed to loosen its Internet policies and a confidential settlement was reached with the former employee.

Since the employee posted from her home computer the issue of social media use on the job was not addressed, but it is another thorny problem.

In reviewing multiple news reports, various attorneys weighed in on the impacts of this ruling . It is likely we will need more cases to get a better definition of the boundaries, and there is no indication the ruling contradicts various laws protecting patient and customer privacy, intellectual property or prohibiting the dissemination of insider information. No indication how this might mesh with slander and defamation laws.

The NLRB announced the results of its settlement - on its Facebook page - of course.

To Integrate or Not to Integrate

The Obama administrative, and especially the Department of Health and Human Services, is pushing the notion of accountable care organizations (ACOs) and similar innovative integration strategies to improve the cost-benefit ratio of health care services. This is integral to PPACA ("Obamacare.")

ACOs and other integrated provider networks are to provide 1) better coordination of care and 2) lower cost, perhaps through a bundled payment system. The exact form of these organizations is still evolving.

http://en.wikipedia.org/wiki/Accountable_care_organization

The Federal Trade Commission appears to be preparing to hammer physicians and hospitals under the assumption ACOs and the like are anti-competitive. This is consistent with pre-PPACA enforcement policies. Reports and lawyer gossip say there is a tug-of-war between the two agencies, with the Justice Department being more sympathetic to the integration.

To be fair, the FTC is supposed to enforce the laws on the books, perhaps we need some clarification from Congress?

A little clarity would speed the integration and further the intent of PPACA, IMHO.

Structuring Accountable Care Organizations (ACOs)

The success of PPACA (Obamacare) cost control depends heavily on innovative delivery systems such as ACOs.

With the health care industry there is lot of chatter and lots of thinking about how these innovations can be achieved.

One problem though. Over the past couple of decades the federal government (Congress, FTC, Justice) have been concerned about anti-competitive actions. The Stark legislation (I, II, III) and antikickback statutes add to the mix (being a health care transaction lawyer has been and will be very lucrative).

There is much concern about innovating organizations into trouble, and the possible considerable costs if all parties in a transactions have to buy legal assurance each step of the way.

Suggested solutions include "safe harbor" rules (a big help with Stark) or perhaps an omnibus pre-screening mechanism.

Innovation can be very complicated.

Future reading: Modern Healthcare and other health care sources

Health Care House of Horrors

This is almost too difficult to read.

(c) Philadelphia Inquirer

Additional details can be found via Google.


1/11

PPACA Phase-ins

Numerous PPACA changes became effective for insurance plan years starting after 9/23/10 (for most patients this would be a plan year beginning January 1). Many changes are related to insurance coverage, including:

• coverage extends to dependents up to age 26

• certain preventive and immunization services will be covered with no patient cost sharing

• lifetime dollar limits will be removed from benefit plans

• pre-existing condition exclusions and waiting periods are eliminated for patients under 19 (older patients phase in later)

• retroactive cancellation will be only in cases of fraud or failure to pay

Other changes:

• increases in penalties for misusing health savings account funds

• changes in flexible savings accounts (FSAs)

Much of this will increase insurance premiums in the short run, and employers are passing much of the cost down the ladders to employees.

C.L.A.S.S. commentary

The C.L.A.S.S. long-term care financing program in the PPACA has been under the radar, but eventually we will need to look at the phase-in and the potential benefits.


Commentary


1/11

Happy New Year and buckle your seat belt

This may be the most interesting year for health care in a long long time.

And take that!!

The National Labor Relations Board is suing an ambulance company for firing a worker. The company fired the worker after she posted derogatory comments about her supervisor on FACEBOOK (TM), from her home computer.

The company says the employee was fired for multiple reasons.

The NLRB says the company violated the employee's rights, and that further derogatory comments from her and other employees were "concerted activity" protected by federal labor laws.

The new and marvelous age of technology.

SGR Cuts for Physicians

Unless Congress intervenes, cuts in December and January will lower the average Medicare physician reimbursement by about 30%. Primary care physicians will see a small increase.

Dropping Medicare rates down toward Medicaid rates will do severe damage to some practices. Given the fixed/variable cost structure of physician practices, short term the only practical cuts are in staffing (and that is tough) and physician incomes. Are some physicians gaming the system? Sure.

Conspiracy theorists believe the administration wants to destroy most private practices and drive docs into hospital employment relationships. This could have some benefits, but could also do severe damage to quantity and quality of care, not to mention many hospitals do a lousy job of managing physician practices. This sort of integration can be done fast or right, but not fast and right.

Yes, we need health care reform. Fast and stupid is not the reform we need.

Added to the Document Archive

Records retention grid - and more to be added very soon.

Any requests? If we have a policy, procedure or checklist we will add it - or write it.

healthcarethinktank@gmail.com

Document Archive

Seminar handouts, consulting checklists, white papers and much more will be gradually accumulated in our new Internet publishing site at www.issuu.com.

healthcarethinktank document archive

Compliance: "Leave the gun, take the cannolis" (1)

The changing face of health care fraud is becoming more evident, especially fraud committed by non-providers - such as non-existent durable medical equipment shops.

These groups often combine computer hacking, identity theft and bill-and-run phony front offices.

Now a little bit of a new twist.

Today (October 13th) the federal government arrest 73 people charged with racketeering for creating more than 100 phony clinics in more than a dozen states and billing Medicare and Medicaid something like $163 million. The crooks, allegedly with an Armenian "godfather" in charge, stole the identities of both doctors and patients before blitzing the feds with phony billings from non-existent clinics. The "godfather" is in lockup today.

Meanwhile the feds are auditing legitimate providers with contract auditors and cranking up requirements for compliance work. Maybe the feds should pay more attention to internal controls before paying crooks?

(reported via several major wire services)



(1) from The Godfather (part 1)

The (Premium) Stuff is Hitting the Fan

Many companies are on calendar year contracts for health insurance. New quotes are often delivered in October, decisions to keep or switch policies are made, and an open enrollment period (sign ups for new coverage and changed coverage) takes place in November so paperwork can be in place by January 1.

It is no secret premiums are going up, and some are going to way, way up. This will likely induce recession-battered employers to pass more costs on to employees, effectively a cut in net pay for employees. The memos will be passed through organizations in the next few weeks, and employers will have meetings with grumpy employees.

PPACA (Obamacare) requires more lives covered in the group and more services (especially preventative) covered by the plan. This plus the usual issues of utilization and cost are driving up premiums.

This was all very predictable.

Some day these changes may start to bend the cost curve, but probably not soon enough for President Obama.

Do not stand in front of the fan.

Comparative Effectiveness Research, Gender and Emotion

A key cost bending feature of PPACA (Obamacare) is comparative effectiveness research (see http://www.hhs.gov/recovery/programs/cer/index.html).

This research is designed to apply statistical, economic and clinical analysis to care and treatment to encourage effective care and block ineffective treatments.

It is highly likely, based on current research, the statisticians will recommend less screening and much less treatment for prostate cancer. As one doc said, "almost all old men die with prostate cancer, almost none of them die from prostate cancer." Screening will likely be focused on younger men and more aggressive forms of the cancer.

With men being somewhat nonchalant about such matters, and prostate cancer being something less than a celebrity telethon issue, it is unlikely there will much of a fuss. Money can be saved and the resulting increased mortality will be slight.

At the same time, current recommendations about breast cancer are suggesting a lot less mammography, and there is an uproar.

Breast cancer hits many women, hits many younger women, and the results are horrifying. The blowback from advocacy groups has been and will be fierce.

So can we get past gender and emotion to become more efficient and effective? Whatever sounds good in the abstract, many of us will go with emotion.

Obama Administration Gets "Tough" With Insurers

DHHS Secretary Sebelius has lambasted the private health insurance industry in a letter to the industry's trade association (I'm not a big friend of health insurance companies, FWIW). From the letter:

"There will be zero tolerance for this type of misinformation and unjustified rate increases."

The issue is premium increases and the cause of the premium increases. Most of us are not in love with insurers, but we should stay connected to reality.

PPACA (Obamacare) requires more lives on some policies and more coverage broadly, so no wonder premiums will be going up in the short and near term (some of us predicted this).

There is little likelihood of bending the cost curve for at least five years, as the various and numerous programs in Obamacare phase it and ramp up. And then, who knows.

Understanding that politicians must be nature take care of politics, this seems a little shrill and over the top.

The official version.

http://www.hhs.gov/news/press/2010pres/09/20100909a.html

Nursing Shortage

As Labor Day approaches it is a good time to think about health care labor issues, some good news, some bad news.

A phenomena many of us have noticed over the years (hard to exactly quantify though) is that recessions pull nurses back into the labor market. Nurses (about 94% female) often have husband or significant others who lose jobs or hours.

Also, some of the staffing pressure is off at the hospital level because elective procedures are down and that takes pressure off the nursing staffing.

Recessions are not the desired means of correcting the shortage though.

The discussions of shortages go back at 20+ years, and amazingly little progress has been made during that time.

There are some new and expanded programs, but a big problem now is the lack of nursing faculty. Unlike many PhD qualified professors, nursing professors are in big demand for management positions, usually in hospitals and health systems. So we are cannibalizing our own nursing pipeline.

University nursing programs are labor intensive, resource intensive and not nearly as prestigious as producing more MBAs, lawyers and economists.

While universities will get into bidding wars over top flight business, science or law professors, the willingness to play in the nursing salary market seems muted (perhaps if nursing was 94% male???).

The shortage will persist; the average age of RNs is climbing, the boomer nurses are heading for the exit while the boomer patients are becoming seniors, clinical skill requirements are accelerating, tighter reimbursements leave providers with less flexible budgets, and at times up to half of all licensed nurses are not working in direct care nursing - - all which seems to be a perfect storm.

We can send a man to the moon, but we can't figure out how to solve this problem in a country where lots of people need new careers (and yes, lots of people are not suited for nursing). Maybe when we have to shut a lot of hospitals?

HIPAA Horrors

This has been a week for HIPAA horrors.

A reporter dropping some trash at a landfill in Massachusetts stumbled on a huge pile of medical records. It seems a former billing company for pathologists who served four hospitals had dumped the records without bothering to shred them. Now the hospitals and pathologists are on the hook – ouch.

Then a psychiatrist on the west coast left his laptop on the back seat of his car, and to his surprise (?) it was stolen, and the laptop contained demographic and billing information on thousands of patients.

Violating HIPAA at the Speed of Light

Rarely does a week go by without a story of how "social media"** have caused problems for an employer, often because of posting confidential information, photos or just nasty comments about some phase of the business operation or co-workers.

In health facilities the stakes are much higher.

Now is the time to develop policies and educate the staff, BEFORE something bad happens.



** Facebook, MySpace, Twitter, and of course email is also a problem.

IDS - Wave of the Future?

Among those who ponder the technical aspects of health care reform, there is strong sentiment for more use of Integrated Delivery Systems (IDS) in delivering health care.

This is hardly a new concept, being decades old, and it may well be the concept of the future.

The first big IDS wave occurred in the early to mid-90s, as physicians and hospitals tried various medical service organization (MSO) models; essentially the hospital owned the physician practices. Many of these deals were disasters, some worked, some evolved into something that worked.

The idea is that if a central entity (an insurer, a hospital, or a hospital network) owns and coordinates services there will better care coordination and cost savings.

The successful integrations so far have largely focused on family practice, internal medicine and ob-gyn (the OBs assistance with malpractice premiums and 24/7 coverage issues).

An interesting change is surfacing, the acceptance of specialists and surgeons into IDS models. Historically there has been a great deal of friction between these docs and the hospitals.

Why the change? Fear of dire economic consequences of staying in a traditional group practice model. Preliminary numbers from the 6/30/2010 residency class is that for the first time, a majority may opt for IDS employment rather than group practice. There are also reports that young docs are more concerned with life balance issues than previous generations.

So, any problems?

Hospitals are notoriously bad at managing physician practices, physician contracts must be structured carefully, physician productivity sometimes drops off with a steady paycheck, and the process of merging practices and/or converting ownership is a great deal of complex work at no small cost. Also, making this work in rural areas is tough.

Biggest question, will IDS on a large scale really cut costs? Or just reshuffle the deck chairs?

Yes - No - Yes - No - Maybe - Sorta - Someday

Medicare Fee Ordeal - Continued

As of Friday the Senate has passed a six (6) month patch to counter the Sustained Growth Rate formula cuts to physician fees.

The House will consider the patch next week, and is likely to pass the necessary legislation.

CMS contractors will process claims from June 1 forward - someday.

Stay tuned.

FTC Red Flags Delayed Again

The Federal Trade Commission has delayed the "red flag" identity theft rules for (most) health care providers. The rules originated in the Fair and Accurate Credit Transactions (FACT) Act of 2003.

The act defines most medical providers as creditors.

The new effective date is January 1, 2011.

Stay tuned.