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The Politics of Health Care

Business as Usual: What the Supreme Court Ruling Means for Healthcare M&A
August 27, 2012 11:09 AM by Adrianne OBrien

Editor's note: This blog was written by Molly K. O'Neill, Brian R. Browder and Donald B. Stuart.

With the dust settling on the Supreme Court's Affordable Care Act ruling, the question of whether the decision will lead to increased M&A activity in the hospital and healthcare industry can now be answered with a definitive yes, no and we'll see.


The Supreme Court's ruling left the 2010 healthcare reform legislation largely in place, nullifying only the provisions that would have penalized states choosing not to expand Medicaid eligibility. A legislative repeal of the Affordable Care Act (ACA) would likely require a Republican sweep in the November elections, and despite campaign rhetoric to the contrary, this seems to be highly unlikely (especially to obtain a 60-seat filibuster-proof supermajority in the Senate). It would appear that the ACA, which represented a significant overhaul of the country's health care system and structure, will be with us for at least the near future.

With some measure of certainty now in place, there has been a noticeable increase in interest in deal-making activity in the hospital sector. Hospital systems that adopted a wait-and-see attitude have started to explore acquisitions, partnerships and alliances, and there is no shortage of potential partners who are willing to listen to fresh overtures. Increasingly, these organizations, primarily nonprofit hospitals, recognize that even two- and three-hospital systems will be hard pressed to stand on their own in light of the Medicare reimbursement cuts contained in the ACA and new payment models on the horizon.

For hospitals in states that opt-out of the Medicaid expansion, the need to align with larger systems will be even greater. Several governors have already announced their states would opt out, and hospitals in these states that are already facing a steep uphill climb could have no alternative but to consolidate if there is no increase in the number of insured residents.

Drivers for consolidation in the healthcare industry can be either financial requirements or strategic opportunities. Alignment with larger health systems provides operational savings through group purchasing, back office expenses and other efficiencies and economies of scale. On the acquisition side, distressed hospitals and systems are not the only candidates looking for potential partners. It can also be expected that high-performing, credit-worthy hospitals and health systems will draw significant interest. Investor-owned healthcare providers will be motivated to enhance their cash flow and buoy their stock prices by acquiring these prime facilities and systems. Large tax-exempt health systems, on the other hand, are in a good position to absorb an underperforming asset and improve its margins. This turnaround approach provides return on investment while simultaneously establishing scale.

Increased transactional volume is also likely in vertical markets as hospitals and payors acquire or align with home health agencies, skilled nursing facilities and other providers to position themselves for new delivery and payment models - such as accountable care organizations (ACOs) and bundled payments.

Also likely is increased consolidation among post-acute care providers seeking to gain critical mass. For example, Genesis HealthCare LLC, which operates long-term care, senior living and rehabilitation facilities, recently announced that it had agreed to acquire skilled nursing provider Sun Healthcare Group Inc. With more than 420 facilities nationwide, the combined organization would have the "scale necessary to remain competitive in the post-acute sector," according to a statement released by the two companies following the announcement.

While the Genesis HealthCare-Sun Healthcare transaction involves providers with similar service lines, there have also been announcements of acquisitions and joint ventures involving somewhat strange bedfellows. DaVita, Inc., a Fortune 500 provider of dialysis services, announced plans for a merger with HealthCare Partners, the country's largest operator of medical groups and physician networks. Inova Health System and Aetna announced their strategic partnership to establish a jointly owned health plan to serve the Northern Virginia market.

In addition, with the anticipated increase in the number of Medicaid enrollees, private Medicaid managed care companies and similar players are being sought after, as recently seen in WellPoint's announcement of the proposed acquisition of Amerigroup Corp. It is likely that there will be more announcements involving organizations aligning their interests with partners from different segments of the healthcare industry.


For the reasons outlined above, an increase in healthcare M&A activity seems probable in the wake of the Supreme Court decision. It must be noted, however, that healthcare M&A has been on the rise for the past few years for precisely the same reasons. Many health systems have been gearing up to operate under the ACA's full provisions since the date of its enactment in 2010. Most healthcare providers believed declining Medicare reimbursement rates and the development of new payment and delivery models were here to stay no matter how the Supreme Court ruled. This perspective is underscored by the fact that hospitals and health systems have been actively pursuing the acquisition of physician practices and other healthcare providers in the markets in which they operate since the ACA's enactment.

The reshaping of the healthcare  marketplace through innovative partnerships also predates the Supreme Court ruling. Duke LifePoint Healthcare, a joint venture between Duke University Health System and LifePoint Hospitals, and Ascension Health Care Network, a joint venture between Ascension Health Alliance and Oak Hill Capital Partners, were each established in early 2011 to assemble networks of hospitals and healthcare providers. Both joint ventures have been actively seeking and acquiring and partnering with hospitals since their formation despite any perceived uncertainties associated with the Supreme Court ruling.

We'll See . . .

The simple truth is that acquiring a hospital or a health system takes time. If an organization waited until the Supreme Court ruled on the ACA to begin making plans for an acquisition, merger or joint venture, it could very well be the second half of 2013 before the transaction is finalized. In addition, any consolidation within the healthcare industry could be further complicated and delayed by the increasing level of scrutiny the Federal Trade Commission is directing toward healthcare transactions with respect to antitrust issues and state attorneys general challenges to hospital transactions. Between now and then, a number of other factors could come into play that could also impact individual transactions and industry trends, including election results, economic conditions and other market developments.

While the Supreme Court's ruling upholding the ACA may trigger a further rise in healthcare transactional volume, a great deal of activity was already under way. Will these trends continue? We'll see what happens.

Molly K. O'Neill is senior vice president and chief business development officer with Ascension Health Care Network in St. Louis, MO. Brian R. Browder is a partner with Waller in Nashville, TN where he chairs the law firm's healthcare department. Donald B. Stuart is a partner with Waller in Nashville, TN where he advises healthcare providers on tax law and other business issues.

HIE Options: The Battle Between Public and Private Continues
August 15, 2012 2:11 PM by Rebecca Hepp

As Meaningful Use criteria push towards required interoperability and changing reimbursement methods necessitate more coordinated care, HIEs are looking more and more appealing to hHealthcare providers. The HIE market practically exploded last year, growing more than 40%, according to a Chilmark Research report.

"As federal incentives drive the adoption of electronic health record (EHR) technology in the U.S., we will quickly move into the post-EHR era where the value of patient data is not what is locked in an EHR data silo, but the cumulative patient data that resides in the community HIE network," said John Moore, founder and managing partner of Chilmark Research.

And those looking to tie their systems together have plenty of options, too, when it comes to the type of HIE. The State Health Information Exchange Cooperative Agreement Program distributed $548 million to states, territories, and state-designated entity HIE startups in 2010, starting the slow creation of public HIEs. But many provider organizations, unwilling to wait for public HIEs to launch, have developed private HIEs — focusing on exchanging data among their own facilities and select outside partners.

While the KLAS report HIE Perception 2011: Public or Private? found that providers were split between selecting a public and private HIE, the tides have turned in favor of private exchanges, according to the Chilmark Research report. Organizations worried about data control or funding sustainability, or looking for a faster implementation time, are opting to create their own, private HIEs rather than wait to join larger, public HIEs. As federal funds dwindle, and state HIEs struggle to implement sustainable business models and develop fee structures through their state legislatures, private HIEs are becoming a more enticing option.

But with private HIE benefits come limitations. The KLAS report listed increased integration and interfacing needs as a possible deterrent, and a recent Journal of the American Medical Informatics Association article took a much closer look at the private vs. public HIE debate. According to the article, private HIEs, which only serve pockets of providers, may be draining resources necessary for public HIEs — which, by mandate, must provide broader services to entire communities and states — to succeed. Public HIEs are designed to connect providers on a grand scale, developing both intra- and inter-state exchanges; if private HIEs corner the market on profitable services, public HIEs have little chance of survival when providing lower ROI services such as connecting rural providers or developing the necessary standards and policies.

But don’t despair, because there may be a way to have it both ways, according to the article. Kentucky, as well as several other states, is working to create a public HIE that operates as an umbrella organization, linking all of the state’s HIEs, including private ones. During a National eHealth Collaborative roundtable, Claudia Williams, director of the State Health Information Exchange Program, recommended that states leverage the burgeoning private HIE development through an umbrella model similar to Kentucky’s, and focus on providing necessary services not met by the private sector.

This approach offers the best of both worlds: private HIEs can link specific provider networks, while the overarching public HIE brings competitors together by connecting all HIEs, as well as private practices not already part of a private HIE. The public HIE would also offer required exchange capabilities with state immunization registries, patient locator services, and new birth and cancer registries.

“In my mind that is a pretty good model. It makes sense to me that some public entity brings all of those [private] entities together, where there really isn’t a motivation otherwise,” said Steven Roth, vice president and CIO of Pinnacle Health System in Harrisburg, Pa, which developed its private HIE in 2009 after failed attempts to create an operable public HIE in 2007.

While public HIEs struggle to get up and running, private HIEs are popping up all over the country to address the immediate information exchange needs of technologically progressive providers. Although private HIEs have taken the lead, HIEs of both kinds are still in flux, and both have much to offer when it comes to sharing information.

Pharma: To Tweet, Or Not to Tweet?
August 14, 2012 11:42 AM by Adrianne OBrien
Editor's note: This blog was written by Chelsea Foster, a copywriter at DKI.

Twitter has openly embraced the unimportant. It is the foundation upon which it was built in the first place. We all have that innate desire to inform the online eyes and ears of our friends, families, and perfect strangers, about the most painstakingly trivial personal information.

But Twitter's not all bad (or boring). It also gives us the ability to plug ourselves into the world. Tweet by tweet, we can receive real-time information about anything, from the most absurd to the most important: from what we had for breakfast to what medicine has or hasn't worked for our health condition, everything is on the table online.

Brave New World

The pharmaceuticals industry has a rightful place in this new world. There is a wealth of drug and patient education just waiting to emerge from the industry, but with a skittish FDA leaving blurry if not non-existent lines about what pharmaceutical companies can and cannot do, there is great hesitation to do much of anything at all.

Online, patients are delivering tiny bursts of information about their lives for all to see, including their symptoms, how good their doctors are, what drugs they're taking and offering emotional support. These conversations arise and disappear quickly. And like any social media outlet, the information people are swapping isn't always correct, and can even be misleading, which can be damaging, considering about 60% of Americans turn to the Internet first when they're seeking health information.

This is why the pharmaceutical industry should be involved in these discussions. It borders on having a responsibility to provide patients or potential patients with factual information about their products. It's also helpful to offer the tools and resources that many marketing campaigns provide, like symptom trackers, support and financial resources, and access to patient ambassadors that speak from their personal, verified experience with specific treatments.

What is Pharma Tweeting?

After reviewing pages upon pages of pharmaceutical twitter channels, several themes consistently arose. If pharmaceutical companies can't talk directly about their drugs, they're dead set on trying their best to improve their image and boost awareness about what's to come. The common tweet topics included:

  • What companies they're collaborating with (often research oriented)
  • The charities and philanthropic endeavors they're donating to or participating in
  • Current data and analysis about clinical trial results
  • Health tips for various conditions
  • Drivers that help flow their followers to their corporate websites
  • Re-tweets of patient testimonials regarding their condition, not their treatment
  • Links to interesting studies or topics in the healthcare field

Much of the information that the various pharma channels shared was interesting and informative. Surprisingly, one of the more powerful, unexpected tools was the ability to re-tweet. This allows companies to share information about conditions and the personal experiences of others without tweeting it themselves, which may be reviewed more leniently by the FDA (there's no way to be sure). If they're not affiliated or responsible for a given tweet, simply sharing it is a great way to link their followers to information they may not feel comfortable tweeting themselves.

Engagement is a Good Thing

An engaged patient is an empowered patient. This goes for caregivers and HCPs as well. Promoting a drug to boost engagement of any kind in the healthcare arena seems to be a beneficial addition to the twitterverse. It promotes the drug, yes, but it also starts a conversation between patients, a patient and their doctor, or concerned and interested parties. This can lead to a more engaged industry and public, overall. Additionally, these followers are willingly following their chosen channels. As long as the information they are provided with by a corporation is correct, it should be fair game.

We need to catalyze the conversation, not shy away from it. More likely than not, this will entail using the knowledge and understanding we currently have about promoting and marketing drugs, and applying it as seamlessly as we can into the social media abyss. Still, more guidance, if not a green light from the FDA, is needed first.

ICD-10: Still in the Works
August 9, 2012 2:10 PM by Rebecca Hepp

If you are worried that your organization is falling behind on ICD-10 preparation, you are not alone. Nearly half of the 2,118 providers who participated in the Workgroup for Electronic Data Interchange (WEDI) February 2012 ICD-10 readiness survey said they did not even know when they would be completing their impact assessment — a key milestone that should have been met in 2011. Only a fifth had already completed their assessment.

Health plans are only marginally more prepared, according to the WEDI survey; over one-third of the 242 respondents have completed their assessments, but a quarter are less than halfway there. Most health plans have not slated external testing until 2013.

WEDI notes that historically, their membership and survey respondents tend to be more aware of industry issues and are correspondingly more advanced in addressing them, giving even more weight to ICD-10 preparedness concerns.

In April, the Department of Health and Human Services (HHS), which includes the Centers for Medicare and Medicaid Services (CMS), proposed to postpone the ICD-10 deadline for one year, from Oct. 1, 2013 to Oct. 1, 2014.

The American Hospital Association (AHA), recognizing that deadline uncertainly is diminishing industry focus on ICD-10 preparation, asked CMS in July to set a firm deadline in order to give providers the time — and motivation — to properly prepare.

“We are in an environment where the demands on providers are really great,” AHA policy director Chantal Worzala told InformationWeek Healthcare. “So there is a natural tendency to prioritize among all the things you have in front of you. We asked CMS to finalize its rule as quickly as possible so we can go back to a state of certainty about the date.” 

The AHA has a right to be concerned, as the WEDI survey found that providers, payers, and even vendors have become distracted by a plethora of issues.  The survey asked all participants to list the top three obstacles to their ICD-10 preparation progress, and nearly three-quarters responded that competing internal priorities were the biggest obstacle. Other distractions listed included other regulatory mandates, significant IT impacts, staffing, budget and both customer and vendor readiness concerns.

Two-fifths of the providers responded that they were worried about vendor preparedness, and with reason. Vendors are certainly as far behind as providers and payers, with nearly half of the 231 surveyed responding that they are less than halfway complete with their product development. For those organizations ahead of the game and looking for the right vendor, their options may be limited, as only about one-fifth indicated their services or software was already available.

 “When CMS puts out a final rule and everybody starts to say ok, ‘this is the date,’ and they get back to the work of preparing, we can take that extra time and use it to ramp up the testing with our trading partners, including the insurers,” Worzala said.  

Of course, not everyone agrees with these somewhat worrying results. The 2012 HIMSS Leadership Survey, published at its February conference, found that, for two-thirds of the respondents, ICD-10 was a top focus for their organization. Nearly 90% thought they would be able to complete their ICD-10 conversion by the earlier, October 2013, deadline. 

Whether your organization’s preparation timeline supports WEDI’s survey results or HIMSS’s, there is no denying that ICD-10 is a major transition all healthcare leaders must focus on, now or in the immediate future.

If you are looking to motivate your organization to keep its foot on the gas when it comes to ICD-10 preparation, check out a recent Executive Insight article written by Bob Schwyn, principal, Aspen Advisors. He emphasizes that the potential impact of ICD-10 implementation on your organization's financial performance is substantial, so preparedness is essential. He recommends organizations take advantage of the delay to ensure that their efforts do not negatively impact their financial performance as the deadline looms. 

For more information, see WEDI’s Survey Results, or check out InformationWeek’s coverage:

For more information from HIMSS, browse through their 2012 Leadership Survey

Having Insurance Doesn't Rule Out Social Security Disability Eligibility
July 12, 2012 2:30 PM by Adrianne OBrien
Editor's note: This blog was written by Karen Hercules-Doerr, a healthcare executive and director of Community-Based Representatives at Allsup. Contact: k.hercules-doerr@allsupinc.com. 

It seems reasonable to assume that patients with health insurance are ineligible for Social Security Disability Insurance (SSDI), a program that provides benefits to Americans unable to work because of a disability.

After all, more than 55 percent of Americans aged 26-64 participate in employer-based healthcare coverage, and if they have employer-based insurance, they're able to work, right?

Although working typically disqualifies a patient from SSDI, simply having health insurance does not. Even if patients have health coverage when they are initially treated, that may not be the case in just six months, or later on. When patients have progressive chronic illnesses, they experience increasing difficulty in maintaining work schedules and can lose access to steady income and health insurance. Patients who could be receiving SSDI benefits, but aren't, can become a higher cost patient for the provider.

A 2010 study found that the average SSDI beneficiary visited the doctor seven times per year. That escalated to an average of 22 times per year over the course of three years. As their condition worsens and patients visit healthcare providers more often, they also become increasingly likely to lose employer-based insurance to help pay for care.

Patients with worsening health and rising costs may not be able to pay for their care if they don't file for SSDI in the interim.

However, there is good news for patients: after 24 months on SSDI, patients are eligible for Medicare. The 2-year waiting period underscores the critical importance of identifying at-risk patients and helping them apply for SSDI benefits as early as possible. That's why it's important to look for warning signs with patients who may become SSDI-eligible, so they can begin the process of applying for benefits as soon as they're eligible.

Healthcare professionals find that when their insured patients fully understand the benefits of filing for SSDI with a representative such as Allsup, they are less likely to become uninsured or underinsured later.

It is critically important that hospitals, physician practices and healthcare providers understand that it's never too early to inform their patients that SSDI benefits may be available if they are deemed disabled and cannot work in any capacity for at least 12 months.

Giving patients options regarding their future and offering them help from expert representatives can minimize the tremendous losses they face when they can no longer work because of a disabling condition. This step also can expedite access to benefits that patients have paid into and deserve, and helps minimize providers' exposure to the significant cost demands of treating patients who don't have a steady source of income or insurance.


1. Ensuring Patients with Disabilities Can Maintain Care and Coverage." Allsup, 2012.

The Medicaid "Wrinkle"
July 2, 2012 12:17 PM by Adrianne OBrien
Editor's note: This blog was written by Jill Glomsted, editor of ADVANCE for Occupational Therapy Practitioners.

In the June 28 Supreme Court ruling, seven of the nine Justices agreed that it would be unconstitutional for the federal government to force states to participate in the Affordable Care Act's expansion of the Medicaid program. The expansion had been expected to cover roughly 17 million uninsured Americans, mostly low-income adults. The federal government will foot the full bill for the expansion for the first three years; after that the federal share will slowly decline, but it would still be 90 percent in 2020. 

The Court's decision basically renders the expansion a separate animal from the current Medicaid program. If states don't participate in the expansion, they can keep their existing programs (and existing federal money) without consequence. The question now is, what will the states choose to do?

So far seven states and the District of Columbia are already offering expanded coverage, paying for it with state funds until the federal payments via the ACA kick in in 2014, according to CBS News.

However, 26 were plaintiffs in the case the Court heard; the governors of some of them, including Texas, Mississippi and Wisconsin, have already hinted that they will not implement the expansion, while others have refused to say what they're willing to do. Virginia Governor Bob McDonnell isn't saying, but told Politico.com that the expansion would cost his state $2.2 billion over 10 years, even with the federal funds.

It's unsurprising that few want to commit to a decision, given the political hot potato that the Affordable Care Act has become and the huge financial burdens states are already facing due to Medicaid. But if states opt out of the expansion, what's going to happen to their residents?

If all 26 states who were parties to the suit opt out, that's more than half - roughly 9 million people - of those expected to be covered by the expansion who will still be without insurance. What's more, they will be some of the poorest Americans.

"We will have a really strange doughnut hole in this country," said Kevin Outterson, associate professor of law and associate professor of health law, bioethics and human rights at Boston University, during an Association of Health Care Journalists webcast on the Supreme Court decision today. Individuals making up to the federal poverty level (FPL, currently $15,415 for an individual; $26,344 for a family of three in 2012) will have some level of coverage under existing programs. Those making 133 percent of the FPL or more will be able to participate in the state health insurance exchanges that the ACA established, with subsidies to help them purchase affordable coverage. But the people who fall in between are not eligible to participate in the exchanges - the ACA did not include them because it was assumed they would be covered by the Medicaid expansion.

Public and safety-net hospitals in states that opt out could also suffer. Currently hospitals that treat a large number of low-income, uninsured or vulnerable patients receive "disproportionate share" funding to help pay for that uncompensated care. Under the ACA, those hospitals are scheduled to lose about half that funding, on the premise that the expansion of coverage through both the individual mandate and the Medicaid expansion would offset what hospitals will lose. If a state chooses not to participate in the Medicaid expansion, its hospitals will still have to provide care to those populations but with much less funding than they have now to do so.

Providers could lose out too, though that is uncertain. The ACA raises rates for primary care providers in Medicaid up to Medicare levels. It's unclear, based on the Supreme Court ruling, whether providers in states who don't participate in the expansion will get that increase in payments.

Another issue is that "there is nothing out there to give states any sense of when they have to make a decision, because no one thought they would have to," said Alan Weil, executive director of the National Academy for State Health Policy, during the webcast. In states that don't decide, Medicaid programs could be caught in a holding pattern.

Martin Salo, executive director of the National Association of Medicaid Directors, told the New York Times in an article on June 29 that his initial sense is that many states will participate in the expansion. Many Republican governors may be waiting until after the November election to decide, hoping that Mitt Romney will win and make good on his promise to dismantle the entire law - Wisconsin Governor Scott Walker said on Thursday that was his position, CNBC reported. However, governors don't necessarily hold all the cards here. Much of Medicaid is regulated by the legislature, and when state legislatures come back into session in January they may take some or all of this decision out of the governors' hands, said Weil. It's also possible that Congress or HHS could act in the way of new legislation or new regulations to encourage states to participate.

By way of analogy, several Republican governors initially said they would not take federal stimulus money from the American Recovery and Reinvestment Act of 2009, said webcast moderator AHCJ President Charles Ornstein. Eventually, they all did. Americans - especially the poorest - will just have to wait and see if they do the same with the Medicaid expansion.


Mission Deployed: ICD-10
June 25, 2012 3:07 PM by Adrianne OBrien

Executive Insight headed west and is blogging live from HFMA's annual ANI conference, held from June 24-27 this year in Las Vegas. One popular session today was ICD-10 Readiness, a provider panel discussion that emphasized lessons learned from facilities already marching along the not-so-well-worn ICD-10 path.

One panelist, Danielle Reno, CHC, CCD, CCS-P, the ICD-10 program director for northern California's Sutter Health, discussed why Sutter initiated its ICD-10 program in early 2011.

  • There will be a huge decrease in productivity when ICD-10 becomes official. Sutter estimated that drop will be 50 percent. "Backfill staff," said Reno. "Bring in coders and train them internally." Otherwise, that 50 percent dip will kill revenues.
  • AHIMA is "pushing doing education now," said Reno. ICD-10 "is a whole new language."
  • A "huge challenge," noted Reno is physician engagement. Facilities in California cannot employ physicians, so it's tough for those facilities to mandate anything. "Everyone thinks ICD-10 has stopped," said Reno, so the time to bring physicians on board is now. One answer to the what's-in-it-for me question: historical data analysis that will be available with ICD-10.

It was obvious from the audience Q&A that many small and mid-sized hospitals have yet to begin transition work to ICD-10. What has your facility done so far?

The Trouble with Metadata and Health Privacy
June 13, 2012 11:27 AM by Rebecca Hepp

Advances in technology over the past decade have raised serious concerns for patient privacy, an issue that sparked an intense panel discussion at the Second International Summit on the Future of Health Privacy, held last week in Washington, DC. Panelists debated current legislation’s ability to properly protect patients in the age of smart phones, tablets and electronic records. For James Pyles, a health law attorney who has worked on privacy measures for HIPAA and the HITECH Act, legislation is lagging far behind technology, leaving patients unprotected from potential electronic violations of privacy.

"We now have electronic disclosures of patient privacy that are entirely different from disclosures of paper records," Pyles said. "You can get a paper record back; you cannot get an electronic record back. You can disclose millions of electronic records simultaneously; you cannot do that with paper records."

"The damage that can be done to someone is perpetual," Pyles added. "And the damages that can be awarded are incalculable."

Joy Pritts, chief privacy officer for the Office of the National Coordinator for Health IT (ONC), agrees with Pyles that technology is advancing much quicker than the law, although she did argue that HIPAA still has its strengths. Under HIPAA, enforcement of federal privacy regulations is in the hands of the states, who are free to extend enforcement beyond the floor set by the federal regulation.

"In some states, there are very strict standards on how [health information] can be shared," Pritts said. "In other states, they didn't see a need to do that because they thought patients were comfortable getting care and sharing that information for certain purposes without having to expressly write it down on a piece of paper."

Adding fuel to the fire, Frank Pasquale, a healthcare regulation and enforcement professor at Seton Hall University, brought up the related debate over metadata and its potential to give patients more control over their personal information. "We've got to create new modes, enable modes of granular control over the data in order to make people feel safe,” Pasquale said. “Otherwise, we're never going to have the type of benefits we can get from big data analysis, from observational research."

Metadata, according to the ONC, is data that provides more detail or information about a piece of data, which has the potential to drastically improve the way health organizations communicate electronically. However, without any accepted standards for metadata tags, the National Committee on Vital and Health Statistics (NCVHS), the statutory public advisory body to the U.S. Department of Health & Human Services, recommended that the ONC refrain from including metadata standards in Stage 2 of the Meaningful Use incentive program.

Referring to the NCVHS’s recommendation, Pritts told the panel last week that metadata is currently on hold for electronic health records, at least until metadata standards are better assessed and understood. With such a powerful tool at hand, precautions must be taken to ensure there are no unintended consequences that could infringe on patient privacy. 


First ACOs Selected
April 26, 2012 12:55 PM by Adrianne OBrien
Editor's note: This blog was written by Michael LaMagna, a partner at Timins & LaMagna, LLP, practicing health care regulatory, elder /disability/veteran's law, trusts and estates, Social Security and general legal practice in New York and Connecticut. Michael was just appointed to the ACO Task Force of the American Health Lawyers Association. E-mail him at Mlamagna@nyandctlaw.com, call him at 914-819-0663 or visit his website at www.nyandctlaw.com for more information.

Very soon many readers will be part of a new healthcare program that will integrate cutting edge technology, coordinate care amongst many different providers and even take an active interest in your well-being. Curious?

CMS has selected 27 large medical groups to be the first participants as Accountable Care Organizations (ACOs). ACOs are new multi-provider organizations that incorporate hospitals, physician groups, laboratories, and even nursing facilities, coordinating care among the various levels through technology and follow-up. This should reduce unnecessary and harmful duplication of services, improve the overall quality of patient care and lower costs to the healthcare system.

ACOs are required to adhere to 33 quality standards, including patient safety, usage of preventive healthcare and coordination of care. In return, the ACOs will share in the savings and receive up to 25 percent of the savings produced.

In addition, ACOs will be required to carefully monitor chronically ill patients, who are known to be the most expensive participants (i.e., diabetics and those with pulmonary and heart ailments). The monitoring of these patients will be particularly challenging,

If the program works, we will all be part of an ACO in the near future.

This article is provided for informational purposes only. Nothing in this article shall be construed as legal advice or should be relied upon as such.

Affordable Care Act "Sunshine" Rule Increases Transparency
December 15, 2011 11:12 AM by Lisa Algeo

The Centers for Medicare & Medicaid Services (CMS) announced yesterday a proposed rule that will increase public awareness of financial relationships between drug and device manufacturers and certain health care providers. This is one of many steps under the Affordable Care Act designed to increase transparency in the health care system, which can lead to better care at lower costs.

"When people are faced with the difficult task of choosing the right doctor, they need all the information they can gather. If your doctor is taking money from manufacturers of prescription drugs, suppliers of wheelchairs or other devices, you deserve to know about it," said Peter Budetti, MD, CMS deputy administrator for Program Integrity. "Disclosure of these relationships will discourage the inappropriate influence on clinical decision-making that sometimes occurs while still allowing legitimate partnerships."

The proposed rule would require manufacturers of drugs, devices, biologicals, and medical supplies covered by Medicare, Medicaid, or the Children's Health Insurance Program to report to CMS payments or other transfers of value they make to physicians and teaching hospitals. The proposed rule would also require manufacturers and group purchasing organizations (GPOs) to disclose to CMS physician ownership or investment interests. 

This increased transparency is intended to help reduce the potential for conflicts of interest that physicians or teaching hospitals might face as a result of their relationships with manufacturers.

Drug and biologic manufacturers, medical device or supply manufacturers, and GPOs would be affected by the new reporting requirements. These organizations, as well as the physicians and teaching hospitals, would be allowed an opportunity to review and correct information prior to its publication. 

The Affordable Care Act provides that violators of the reporting requirements will be subject to civil monetary penalties (CMPs), capped at $150,000 annually for failing to report, and $1,000,000 for knowingly failing to report. 

CMS is proposing that data collection will not begin on Jan. 1, 2012 and that manufacturers and GPOs do not need to begin data collection until final regulations are issued. Depending on the timing of the final rule, CMS is proposing that manufacturers and GPOs will be required to submit a partial year on Mar. 31, 2013. Once the data has been submitted, CMS will aggregate manufacturer submissions at the individual physician and teaching hospital level, provide them with a 45-day period to confidentially review and, if necessary, correct the data, and make the data publicly available by Sep. 30, 2013.

CMS will accept comments on the proposed rule until Feb. 17, 2012, and will respond to them in a final rule to be published in 2012.

Affordable Care Act Will Help Rebuild Aging Clinics
December 8, 2011 2:45 PM by Lisa Algeo

Thanks to the Affordable Care Act, more than $14 million was awarded today to 45 school-based health centers across the country allowing the number of children served to increase by nearly 50 percent, HHS Secretary Kathleen Sebelius has announced.

Clinics receiving the awards, made possible by the health reform law, are already providing much-needed health care services to 112,000 children. Today's infusion of new money will enable them to expand their capacity and modernize their facilities, which will allow them to treat an estimated additional 53,000 children in 29 States.

"Children are the foundation upon which this country will grow," said Secretary Sebelius. "The Affordable Care Act will help ensure our children get the high-quality health care they need and deserve."

Funds awarded today will help create jobs for Americans across the country. Funds will support job opportunities as more Americans will be needed to meet the clinics' pressing capital needs - including construction, renovation and new equipment. 

School-based health centers enable children with acute or chronic illnesses to attend school, and improve the overall health and wellness of all children through health screenings, health promotion and disease prevention activities.

Typically, a school-based clinic provides a combination of primary care, mental health care, substance abuse counseling, case management, dental health, nutrition education, health education and health promotion activities.

"These grants will enable school-based health centers to establish new sites or upgrade their current facilities, which will increase their ability to provide preventive and primary health care services, and help children improve their health and remain healthy," said HRSA Administrator Mary K. Wakefield, PhD, RN. 

The Affordable Care Act provides $200 million in funding from 2010 - 2013 for the School-Based Health Center Capital Program to address significant and pressing capital needs and to improve delivery and support expansion of services at school-based health centers.

Today's grants are the second in the series of awards that will be made available to school-based health centers under the Affordable Care Act.  The Health Resources and Services Administration (HRSA) oversees the School-Based Health Center Capital Program.

Impact of an Election Year
December 7, 2011 9:40 AM by Lynn

Republican, Democratic and Independent candidates have been busy relaying their promises toward a healthier America, with proposals for better health plans/coverage to how to create jobs. I’ll be honest and admit that I have very mixed reviews. In my opinion, no one candidate has all the answers. What I hope is that the parties put aside their differences for a change and really focus on rebuilding our infrastructure, healthcare system, job market and more so we have stronger investments and a brighter long-term outlook for maintaining a healthy America, both literally and figuratively.

What are your thoughts on the presidential candidates? How will the election year impact your professional and personal life?


Medicare Gives Employers, Consumers Information to Make Better Health Care Choices
December 5, 2011 12:59 PM by Lisa Algeo
Consumers and employers will have the health care information they need to make more informed choices about their care, thanks to the Affordable Care Act, the Centers for Medicare & Medicaid Services (CMS) announced in a final rule today.

The rule gives qualified organizations, like employers and consumer groups, access to data that can help them identify high quality health care providers or create online tools to help consumers make educated health care choices. Information that could identify specific patients, however, will not be publicly released and strong penalties will be in place for any misuse of data.

"This is a giant step forward in making our health care system more transparent and promoting increased competition, accountability, quality and lower costs," said Marilyn Tavenner, Acting CMS Administrator. "This provision of the health care law will ensure consumers have the access they deserve to information that will help them receive the highest quality care at the best value for their dollar."

For years, employers, consumers, and health care quality advocates have expressed frustration about the limited and piecemeal availability of Medicare data that could be used to help evaluate health care provider or supplier performance. Although many health plans have created provider and supplier performance reports, these reports are based solely on the health plans' own claims, and do not reflect information from other health plans, including Medicare.

Providers, too, have expressed frustration at receiving performance reports that are piecemeal and produced without an opportunity for review and correction. This final rule creates a framework for providers to receive a single, actionable performance report covering all or most of their practice.

The final rule makes a number of important changes from the original proposed rule. The final rule makes this data less costly for qualified entities, gives qualified organizations more flexibility in their use of Medicare data to create performance reports for consumers, and extends the time period for health care providers to confidentially review and appeal performance reports before they become public. The rule also includes strict privacy and security requirements to protect patients, health care providers, and suppliers as well as stringent penalties for any misuse of Medicare data.

For more information on the final rule, visit:

The final rule on Availability of Medicare Data for Performance Measurement is on display until Dec. 7, 2011 at the Office of the Federal Register at: http://www.ofr.gov/OFRUpload/OFRData/2011-31232_PI.pdf

We Can’t Wait: Obama Administration Takes New Steps to Encourage HIT Use
November 30, 2011 2:02 PM by Lisa Algeo
Today, U.S. Department of Health and Human Services (HHS) Secretary Kathleen Sebelius released a report showing that doctors' adoption of health information technology (IT) doubled in 2 years.  HHS also announced new actions to speed the use of health IT in doctors' offices and hospitals nationwide, which will improve health care and create jobs nationwide.

While protecting confidential personal information, health IT can improve access to care, help coordinate treatments, measure outcomes and reduce costs.  The new administrative actions announced today, which were made possible by the HITECH Act, will make it easier for doctors and other health care professionals to receive incentive payments for adopting and meaningfully using health IT.

"When doctors and hospitals use health IT, patients get better care and we save money," said Secretary Sebelius.  "We're making great progress, but we can't wait to do more. Too many doctors and hospitals are still using the same record-keeping technology as Hippocrates. Today, we are making it easier for health care providers to use new technology to improve the health care system for all of us and create more jobs."

In addition to improving the health care system, data indicate that the national transition to health IT is creating jobs.  Over 50,000 health IT-related jobs have been created since the enactment of the HITECH Ac. According to the Bureau of Labor Statistics, the number of health IT jobs across the country is expected to increase by 20 percent from 2008 to 2018, much faster than the average for all occupations through 2018.

HHS also announced its intent to make it easier to adopt health IT.  Under the current requirements, eligible doctors and hospitals that begin participating in the Medicare EHR (electronic health record) Incentive Programs this year would have to meet new standards for the program in 2013.  If they did not participate in the program until 2012, they could wait to meet these new standards until 2014 and still be eligible for the same incentive payment. To encourage faster adoption, the Secretary announced that HHS intends to allow doctors and hospitals to adopt health IT this year, without meeting the new standards until 2014. Doctors who act quickly can also qualify for incentive payments in 2011 as well as 2012.

These policy changes are accompanied by greater outreach efforts that will provide more information to doctors and hospitals about best practices and to vendors whose products allow health care providers to meaningfully use EHRs.  For example, in communities across the country HHS will target outreach, education and training to Medicare eligible professionals that have registered in the EHR incentive program but have not yet met the requirements for meaningful use.  Meaningful use is the necessary foundation for all impending payment changes involving patient-centered medical homes, accountable care organizations, bundled payments, and value-based purchasing.

These efforts will complement existing outreach efforts to doctors and hospitals including the Obama Administration's work to create a nationwide network of 62 Regional Extension Centers.  The extension centers are comprised of local nonprofits that provide guidance and resources to help eligible health care providers participate in the Medicare and Medicaid EHR Incentive Programs and meaningfully use health IT.

Also released today, a new Centers for Disease Control and Prevention (CDC) survey found 52 percent of office-based physicians in the U.S. now intend to take advantage of the incentive payments available for doctors and hospitals through the Medicare and Medicaid EHR Incentive Programs.  EHR incentive payments for eligible health care professionals can total as much as $44,000 under the Medicare EHR Incentive Program and $63,750 under the Medicaid EHR Incentive Program.  The CDC data also show the percentage of physicians who have adopted basic electronic health records in their practice has doubled from 17 to 34 percent between 2008 and 2011 (with the percent of primary care doctors using this technology nearly doubling from 20 to 39 percent). 

To meet the demand for workers with health IT experience and training, the Obama Administration has launched four workforce development programs that help train the new health IT workforce.  The training is provided through 82 community colleges and nine universities nationwide.  As of October 2011, community colleges have had 5,717 professionals successfully complete their training in health information technology.  Currently there are 10,065 students enrolled in the training programs across the nation.  As of November 2011, universities have graduated over 500 post-graduate and masters-level health IT professionals, with over 1700 expected to graduate by July 2013.

While improving the health care system, health IT can help keep information private and secure.  Federal laws require key persons and organizations that handle health information to have policies and security safeguards in place to protect health information-whether it is stored on paper or electronically.

States Receive Resources to Implement Affordable Insurance Exchanges
November 29, 2011 12:27 PM by Lisa Algeo

The Department of Health and Human Services (HHS) today awarded nearly $220 million in Affordable Insurance Exchange grants to 13 states to help them create Exchanges, giving these states more flexibility and resources to implement the Affordable Care Act. The health care reform law gives states the freedom to design Affordable Insurance Exchanges - one-stop marketplaces where consumers can choose a private health insurance plan that fits their health needs and have the same kinds of insurance choices as members of Congress.

The Department also released several Frequently Asked Questions providing answers to key questions states need to know as they work to set up these new marketplaces. Critical among these are that states that run Exchanges have more options than originally proposed when it comes to determining eligibility for tax credits and Medicaid.  And states have more time to apply for "Level One" Exchange grants.

Today's awards bring to 29 the number of states that are making significant progress in creating Affordable Insurance Exchanges.  States receiving funding today include: Alabama, Arizona, Delaware, Hawaii, Idaho, Iowa, Maine, Michigan, Nebraska, New Mexico, Rhode Island, Tennessee, and Vermont.

"We are committed to giving states the flexibility to implement the Affordable Care Act in the way that works for them," HHS Secretary Kathleen Sebelius said.  "Exchanges will give consumers more choices and make it easy to compare and shop for insurance plans."

In the new Exchanges, insurers will provide new information such as an easy-to-understand summary of benefits and costs to consumers. The level of detail will sharpen competition between carriers which will drive costs down.

HHS also released today a set of Frequently Asked Questions (FAQs) in anticipation of state legislative sessions beginning in January. Answers will help advance state policy development for Exchanges.  For example, they clarify that Exchange grants can be used to build a state Exchange that is operational after 2014; that state-based Exchanges will not be charged for accessing Federal data needed to run Exchanges in 2014; and that state insurance rules and operations will continue even if the Federal government is facilitating an Exchange in the state.  HHS will also allow greater flexibility in eligibility determinations, allowing, for example, a state-based Exchange to permit the Federal government to determine eligibility for premium tax credits. 

Of the 13 states awarded grants today, 12 are receiving Level One grants, which provide one year of funding to states that have already made progress using their Exchange planning grant.  The 13th state, Rhode Island, is receiving the first Level Two grant, which provides multi-year funding to states further along in the planning process.

Forty-nine states and the District of Columbia have already received planning grants, and 45 states have consulted with consumer advocates and insurance companies.  Thirteen states have passed legislation to create an Exchange. 

States have many opportunities to apply for funding. To accommodate state legislative sessions and to give states more time to apply, HHS also announced a six-month extension for Level One establishment grant applications.  Applications now will be accepted until June 29, 2012 (the original deadline was Dec. 30, 2011).

For the FAQs, visit http://cciio.cms.gov/resources/regulations/index.html#hie.



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