Takeaways From CMS’ FY 2012 Financial Report

Here a few highlights from Becker’s Hospital Review 10 Major Takeaways From CMS’ FY 2012 Financial Report–Click here to view the article in full.nnOne of the most important organizations within the healthcare sector is CMS, and for obvious reasons. It is one of the largest healthcare payors in the world, and the federal agency dictates many of the rules that will directly and indirectly impact the finances of hospitals and health systems.Takeaways From CMS' FY 2012 Financial ReportnnOn Nov. 15, CMS posted its FY 2012 financial report. CMS CFO Deborah Taylor, a certified public accountant, prepared the 202-page document, which is required by law every year. Here are 10 of the biggest takeaways from the report.nnWhat the nation’s healthcare dollar looked like in 2012. Government health programs consume the largest parts of the U.S. healthcare system, and CMS’ report broke down the different healthcare payors and how much money they represented in FY 2012. Here’s how much each sector represented for every dollar spent on the U.S. healthcare last year:nn•    Private insurance: 31.6 centsn•    Medicare: 21 centsn•    Medicaid: 16.3 centsn•    Other government programs: 13.3 centsn•    Out-of-pocket: 11.1 centsn•    Other private programs: 6.7 centsnnFurthermore, Medicare and Medicaid, including state funding, represented 54 cents of every dollar spent on nursing homes, 49 cents of every dollar received by hospitals and 33 cents of every dollar spent on physician services.nnMedicare Part A Benefit Payments. Inpatient hospital spending accounted for 54 percent of Medicare Hospital Insurance, or Part A, benefit outlays in FY 2012. Managed care represented the next-highest total at 25 percent, while skilled nursing facilities received 12 percent of Part A payments.nnMedicare Part B Benefit Payments. Medicare Part B, or Supplementary Medical Insurance, covers all physician, hospital outpatient, home health, lab test and other services not covered by Part A. Physicians services accounted for the largest slice of Part B at 24 percent. Prescription drugs accounted for 21 percent, while hospital outpatient services represented 11 percent.nnMedicaid Enrollees. Children represented the largest portion of Medicaid beneficiaries in FY 2012 at 50 percent. The remaining enrollees were adults (23 percent), disabled (18 percent) and elderly (9 percent).nnFederal Medicaid costs. State and federal medical assistance payments and administrative costs totaled $452.5 billion last year. CMS’ share of Medicaid outlays totaled $260.1 billion of that total.nnMedicare and Medicaid Recovery Auditors. Medicare RACs recovered $2.3 billion in over–payments in FY 2012, as reported earlier. However, that figure does not include dollar amounts related to claims in the appeals process or claims that had been successfully appealed by providers.nnMedicaid RACs were supposed to go live Jan. 1, 2012, although not all states have finalized their programs. According to the report, “states that have been unable to implement Medicaid RAC programs by Jan. 1, 2012, have been submitting [state plan amendments] to CMS requesting implementation delay exceptions.” CMS released a Medicaid RAC final rule in September 2011, projecting savings of $2.1 billion over the next five years. Roughly $910 million of that total would be returned to states.nnSource: www.beckershospitalreview.com Bob Herman; December 7, 2012.

ACOs Serve Nearly 10 Percent Of Americans

Almost 10 percent of U.S. patients receive their healthcare from an accountable care organization (ACO), and almost half live in areas served by at least one ACO, according to a new study from Oliver Wyman. This means that ACOs, little known in the United States as recently as two years ago, now have a substantial presence and are poised to offer a competitive threat to traditional fee-for-service medicine.nn“There’s a common impression that ACOs play a minuscule role in American healthcare,” says Niyum Gandhi, one of the authors of the study. “But when you go out and actually count what’s on the ground, you realize that they’re already achieving critical mass.”nnThere is no single, universal definition for ACOs. In its census, Oliver Wyman counted not just participants in Medicare’s various ACO programs, but also commercial ACOs and healthcare delivery organizations that apply some other name to themselves but follow the basic elements of the accountable care organization: They are healthcare providers that take responsibility for the full healthcare needs of a defined population, receiving savings payments based on cost savings and quality.nnThe ACA directed Medicare to create ACO programs – today there are 150 Medicare ACOs, and the number is expected to more than double in January, when Medicare announces the next class of participants in its Shared Savings Program. Because it is difficult to operate a single organization under a fee-for-service and an ACO model at the same time, most participants in Medicare ACO programs eventually shift their non-Medicare patients to ACO models as well.nnA total of 25 to 31 million U.S. patients currently receive their care through ACOs. They include:n

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  • 2.4 million patients in Medicare ACO programs
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  • 15 million non-Medicare patients in Medicare-oriented ACOs
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  • 8 to 14 million patients in non-Medicare ACOs
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nBecause Medicare’s ACO programs were designed to create a care delivery model that could compete with fee-for-service, the Oliver Wyman study analyzed how many people lived in a locale served by at least one ACO. The astonishing answer: 45 percent of Americans. And there are 19 states in which more than half of the population live in an area served by at least one ACO.nnCritics have argued that few of today’s ACOs live up to the potential of the model, and the Oliver Wyman team are quick to agree. “Many of the organizations we have looked at are really ACOs in name only,” says coauthor Rick Weil. “But this is a case where averages don’t count. Instead, you look at the spread of the new model and the performance of the best-in-class. And best-in-class ACOs are delivering exceptional results. For example, one California ACO had a zero percent premium increase its first year—something many people in healthcare would have said was impossible. As more and more ACOs learn to make the model work, they have the potential to change the whole dynamic of U.S. healthcare for the better.”nnSource: www.thestreet.com; November 29, 2012.

The Future of Meaningful Use and Beyond

At the 98th meeting of the Radiological Society of North America in Chicago on Nov. 26, 2012, Keith J. Dreyer, DO, PhD, vice chairman of radiology at Massachusetts General Hospital in Boston and associate professor of radiology at Harvard Medical School, discussed the future of imaging informatics in the face of meaningful use.nnCMS’ meaningful use program is one of the ways the federal government is focusing on quality, safety and access with healthcare, said Dr. Dreyer. By urging providers to use certified electronic health record technology, the federal government is hoping that safety and quality of healthcare will increase while the cost of healthcare will decrease. According to Dr. Dreyer, physicians and radiologists need incentives to have a patient-centric focus in their healthcare decisions and that is what meaningful use is — an incentive.nnDr. Dreyer pointed out that more than 50 percent of physicians and 80 percent of hospitals have enrolled in the meaningful use program, with payments passing $7 billion, from when meaningful use legislation as part of the HITECH Act was first passed in February 2009 to when the most recent regulations — stage 2 of meaningful use — were released.nn”What does this mean for radiologists? Well, nearly all radiologists are eligible for the program. In 2011, 32 percent of radiologists said they planned to participate, and in 2012, that percentage has doubled,” said Dr. Dreyer. “While meaningful use can be a challenge for radiologists, there are various exclusions and temporary exemptions available. The thing to remember is that the stages of meaningful use are important.”nnThe stage 2 regulations for meaningful use have two specific objectives for imaging:n

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  • Image ordering measure: Physicians have to use certified electronic health record technology to order more than 30 percent of imaging exams.
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  • Image results measure: Physicians have to use CEHRT to receive more than 10 percent of imaging results.
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nDr. Dreyer concluded his presentation by commenting on the futures state of radiology and healthcare in general. “There are four metrics that I see as being important: productivity, profitability, performance and presence. The future of healthcare technology will hinge mostly on performance and presence. [Going forward], quality and relevance can drastically increase,” said Dr. Dreyer. “Productivity may take a hit for a while, and if you hinge your profits to productivity, you may see decreases. However, if profits are tied to quality and performance metrics, there will be better outcomes in the long run.”nnSource: www.beckershospitalreview.com; Kathleen Roney; November 28, 2012.nn 

How EHR – Enabled Staff Influence a Clinic’s Reputation

Below is an article from EHR Intelligence, outlining how author Robert Green believes EHR – enabled staff members can and do influence the reputations of clinics.nnA conversation I shared with the physicians and manager of a small pediatric clinic several years agonnis still a timely example of how fundamental people and health IT are to determining a clinic’s reputation and conversations about improving it. The physicians had decided years earlier that the value of making a commitment to EHR was important to the consistency not only of the daily patient experience but also between physicians who substitute for one annnother. What they recognized was that the contents of the EHR were as important for the sake of replacing bad handwriting in notes and idiosyncratic approaches to documentation as they were for enabling one physician to step in for another and pick up the conversation with a patient where it left it off.nnBeing able to differentiate one’s own clinic from the next comes from the recognition that onlynnHow EHR – Enabled Staff Influence a Clinic’s Reputationnna coordinated team can deliver a consistent experience, regardless of where this patient experience begins and ends. A clinic can either take the opportunity to define its own reputation through its approach to patient engagement or have its reputanntion determined by its patients, who will talk to each other about what should have happened and why and why.nnAccessibility of electronic health information is already changing the nature of the patient-clinic interaction. We all know of the reputations of the clinics in our neighborhoods that have evolved over time. And these reputations I’m referring to have had little to do with their online or “digital” reputation. The experiences that patients and clinic staff have shared over the years (perhaps even generations) that have established these reputations are those that have occurred between people in the face-to-face interactions in the clinic. However, as the patient experience continues to grow in terms of population health outcomes and the individual’s day-to-day experience, it is an important time for physicians and their staff to recognize how to participate in the culture of care that is defined by the brand that is the physician as well as the clinic as a whole.nnJust as the accessibility of health information continues to expand from the patient’s personal history to general educational material in digital form, so too is the nature of the interaction between patient and clinic expanding. Now we are seeing the convergence of those longstanding reputations built upon one-on-one encounters and digital reputation established by connecting with patients in convenient formats and online.nnThis evolution demands a new level of reception in the clinic, one requiring a sustained and fully engaged dialogue among the entire clinic staff. The conversation about traditional and digital patient experiences is one that represents a great opportunity to accept the gratitude of each patient. Whether it’s an unconditional “thank you” or even one that is qualified with a comment or concern for future encounters, this is the reputation of the clinic as a whole and each individual physician. What’s more, because this patient experience is happening in so many ways well beyond the walls of the exam room, a fully engaged staff members will find themselves contributing to this reputation more every day.nnWhereas in the past the patient experience was defined by the coveted clinic appointment, what happens before and subsequent to that encounter has now become equally important in terms of the reputation of the clinic and physician. The challenge is to keep in mind within conversations about and interactions related to EHR and health IT that this converged clinic reputation is driven by a well-defined patient experience supported by a fully engaged clinic staff.nnSource: www.ehrintelligence.com; Robert Green, November 20, 2012.

HHS/CMS Announcement: PAYMENTS TO PRIMARY CARE PHYSICIANS INCREASE IN 2013

Health and Human Services (HHS) Secretary Kathleen Sebelius today announced the final rule implementing the part of the health care law that delivers higher payments to primary care physicians serving Medicaid beneficiaries.  The new rule raises rates to ensure doctors are paid the same for treating Medicare and Medicaid patients and does not raise costs for states.n

PAYMENTS TO PRIMARY CARE PHYSICIANS INCREASE IN 2013The Centers for Medicare & Medicaid Services (CMS) issued a final rule with comment period on November 1, 2012 for Medicare’s payments for physician fees for 2013.  It includes a new policy to pay a patient’s physician or practitioner to coordinate the patient’s care in the 30 days following a hospital or skilled nursing facility stay.  Recognizing the work of community physicians and practitioners in treating a patient following discharge from a hospital or nursing facility will ensure better continuity of care for these patients and help reduce patient readmissions.   The changes in care coordination payment and other changes in the rule are expected to increase payment to family practitioners by seven percent—and other primary care practitioners between three and five percent—if Congress averts the statutorily required reduction in Medicare’s physician fee schedule.n(Click here to see the full release by CMS.)

n“The health care law will help physicians serve millions of Americans across the country,” Secretary Sebelius said.  “By improving payments for primary care services, we are helping Medicaid patients get the care they need to stay healthy and treat small health problems before they become big ones.”nnThe final rule implements the Affordable Care Act’s requirement that Medicaid pay physicians practicing in family medicine, general internal medicine, pediatric medicine, and related subspecialists at Medicare levels in Calendar Years 2013 and 2014.nnThis payment increase goes into effect in January of 2013.nnIn addition to payment improvements, the health care law includes numerous initiatives designed to bolster primary care and strengthen the primary care workforce, including an expansion of medical residency positions for primary care physicians, new investments in physician assistant and nurse practitioner training, and an unprecedented expansion of the National Health Service Corps, which provides scholarships and loan repayments to primary care providers who practice in underserved areas.nnFor more information about today’s final rule visit:nhttp://www.cms.gov/apps/media/fact_sheets.aspnnTo view a copy of today’s final rule visit:nwww.ofr.gov/inspection.aspxnnSource: www.cms.gov; November 1, 2012.nwww.hhs.gov; November 1, 2012.