Welcome to the August issue of the Indidge Advantage newsletter.
We are firmly entrenched in the last vestiges of summer. I hope you have had your fill of juicy watermelon and sweet cantaloupe. This summer shall be remembered by the vigorous rangeling in congress regarding the future of our healthcare system. Who will be the Winners and Losers? Read our first article.
The Indidge Advantage is produced by Indidge Systems, a healthcare software solutions company specializing in Compliance and Risk Management solutions.
By Cheryl Clark
Though it looks like the Senate won't vote on health reform legislation before the August recess, a glance into a crystal ball reveals some clues as to what sectors of the industry will see the greatest impact, both positive and negative.
Blair Childs, senior vice president for Premier, Inc., which works with 2,200 hospitals and 58,000 other healthcare sites to improve quality and affordability of healthcare, offered his insights for this list. In the center of the reform conversation, Premier maintains the nation's most comprehensive repository of clinical, financial, and outcomes information and operates a helthcare purchasing network.
The envelope please... Here is a list of those health industry sectors likely to emerge as winners or losers when reform is finally set in stone.
Almost Certainly Winners
- Primary care physicians. The final health reform package may include subsidies and reimbursement formula changes that will be a positive change for internists and family practitioners.
- Health information technology. Money to subsidize electronic medical records for physicians and hospitals may be a part of the final reform package. Computerized medical records may avoid duplication and simplify evaluation of patients.
- Comparative effectiveness. Companies that develop and execute value-based purchasing algorithms may get a chance to expand and flourish in the decade ahead. Measurement of best practices is certain to emerge as a growth industry.
Possible Winners
- Nurses. Nurse practitioners and other in allied health professionals may be given more opportunities to expand scope of practice, especially in rural settings and other underserved areas.
- Rural healthcare. The Obama Administration has made it clear that improving access to healthcare in rural areas, and helping rural providers improve their services, is a top priority in this administration. He nominated Kathleen Sebelius as secretary of Health and Human Services and Regina Benjamin, MD, as surgeon general, both with a high focus on rural health. Many lawmakers on the Senate side are from rural areas too.
- Pharma. Pharmaceutical companies that switch to generic drug manufacturing have a chance to be a winner. One effort to cut costs will be to promote the wider prescribing of generic drugs when evidence shows they are just as effective as drugs much more expensive.
- Medical education. There may be more money targeted for scholarships and loan forgiveness to augment the thinning workforce. The National Health Service Corps may also get a boost.
No Change or Too Tough To Call
- Medical attorneys. The Obama Administration has declined to put a cap on medical malpractice awards.
- Testing laboratories. While redundant testing and tests that reveal clinically irrelevant information may decline, labs may get a boost with an increase in genetic testing especially when it may be predictive of a patient's sensitivity to a certain drug. Pathologists also seek greater involvement in clinical decision-making to guide physicians in appropriateness of tests.
- General acute care hospitals. While there may be fewer patients admitted for certain procedures that are not deemed effective, and thus not worthy of payment, with a public option, more patients will get appropriate acute care. Ideally, if health reform works, fewer people will have their illnesses go undiagnosed. Elimination or reduction of disproportionate share money that now goes to hospitals could hurt.
- Academic medicine. Hospitals that now serve as both medical teaching and research facilities as well as provide an important safety net for their communities may see both good and bad from health reform. Funding for research may increase, but payment for certain expensive technologies not necessarily more effective than other methods may suffer.
Possible Losers
- Health plans. The creation of a public option may create enormous competition for health plans, which may be forced to greatly lower their costs to continue to appeal to employers and individuals. Price competition will be intense. Even if there isn't a public plan, there will be more regulation and transparency in the health insurance market.
- Specialty physicians. While more people will have insurance coverage and will receive specialty care they previously could not afford, fees for specialists may get cut and difference given to primary care.
- Pharma. Pharmaceutical companies heavily vested in high-priced medications will see competition and price cuts. The U.S. also may authorize importation of prescription drugs to further reduce costs.
Almost Certainly Losers
- Imaging. The implementation of new formula that in effect reduces payment for certain kinds of imaging is almost certain to take effect. There may also be an elimination of a loophole that now allows physicians to self-refer patients to imaging services in which they have an ownership stake.
- Biologics. Congress is working to allow the Food and Drug Administration to approve generic copies of expensive biologics, such as Avastin, Genentech's cancer drug, which costs $50,000 per year. This would be certain to drive down costs.
- Physician-owned specialty hospitals. Proposals in both the House and Senate would outlaw any physician-owned hospital that is not yet operating and would restrict expansion of those existing facilities. Lawmakers have concerns that physician self-referral may be causing overutilization.
- Durable medical equipment. Medicare payments for common home medical equipment devices have been cut by 9.5%. More cuts are expected.
- Home health agencies and providers of home healthcare. These sectors may take a financial hit.
- Skilled nursing homes. Nursing homes may take a financial hit. If a hospital is not reimbursed for care to a patient who has to be readmitted within 30 days, hospitals may keep patients longer. Also reimbursement to nursing facilities may be cut.
Shawn Farley, spokesman for the American College of Radiology, says that in addition to any financial incentives to perform these exams many physicians who perform inappropriate ultrasound exams may be simply practicing defensive medicine. Or the patient may be putting pressure on the doctor to perform an exam because he or she saw that a famous person received a certain imaging exam.
To be sure the exam is appropriate, the ACR offers all physicians access to the ACR Appropriateness Criteria, which ranks the most appropriate exams for more than 200 clinical indications, to use in determining which patients should have certain imaging tests, Farley says.
The Inspector General's report suggests that "compared to other types of diagnostic imaging machines, which can cost millions of dollars to acquire and install, ultrasound machines are relatively inexpensive. Providers can buy used machines for under $5,000 and roll them into examining rooms on carts."
Farley says the ACR encourages all providers to seek accreditation to make sure that equipment has been surveyed by a medical physicist to help ensure that the machine is functioning properly and is capturing the best images. ACR also encourages patients to seek out ACR-accredited facilities at which to receive imaging care.
AzHHA Insider Issue: July 10, 2009
The Hospital CompareWeb site was updated on July 9 with information on 30-day readmission rates for Medicare patients experiencing heart attack, heart failure or pneumonia. This is the first time this information has been made available publicly. The update also incorporates updated 30-day mortality for heart attack, heart failure and pneumonia patients using new methodology for calculating those rates.
By Lisa Eramo
A hospital's IT project list is most likely an exponential one: Convert to an EHR, transition to HIPAA 5010, coordinate vendor and health plan testing, train staff members on new technology, prove meaningful use, and qualify for incentive payments under the American Recovery and Reinvestment Act. It's enough to make anyone's head spin.
"Institutions are being forced to downsize and limit their scope in today's economy. Never has so much needed to be done with so few resources," says Dan Rode, MBA, CHPS, FHFMA, vice president of policy and government relations for the American Health Information Management Association in Washington, DC.
Deadline is January 2012
The transition to HIPAA 5010 is perhaps the most pressing issue because its compliance deadline is little more than two years away. Providers must be ready to submit claims electronically using the upgraded HIPAA standards by January 1, 2012-nearly one year prior to the October 1, 2013 ICD-10 deadline.
CMS recently held its first national provider education call about HIPAA Version 5010, during which it provided an overview of the updated national code standard for billing software and answered several questions from providers, vendors, and other health information management and health information technology professionals.
The X12 Version 5010 and the National Council for Prescription Drug Programs Version D.0 standards will incorporate more than 500 change requests, resolve ambiguities in situational rules, and provide more consistency across transactions, said Kyle Miller, health insurance specialist in the Office of E-Health Standards Services of CMS, during the call.
New data element requirements
In some cases, version 5010 will also include new data element requirements, said Chris Stahlecker, the director of the Division of Medicare Billing Procedures for CMS, during the call. "Everyone should realize that the software used today to produce the EDI transactions must be modified to exchange the new formats," she added. "In addition, you may discover that your business processes may need to be changed."
Medicare has performed a comparison of the current and new formats that hospitals can use to begin performing a gap analysis and evaluate the impact on routine operations.
Medicare Administrative Contractors must be ready to use 5010 by January 1, 2011, giving providers one full year to coordinate testing efforts, Stahlecker said.
The Medicare fee-for-service implementation of 5010 will include the following:
- Improved claims receipt, control, and balancing procedures
- Increased consistency of claims editing and error handling
- Improved efficiency for returning claims needing correction earlier in the process
- Improved assignment of claim numbers closer to the time of receipt
Increased field size
The Medicare implementation will result in an increased field size for ICD-10 codes from five bytes to seven bytes. It will also add a one-digit version indicator to the ICD code to indicate version nine versus 10. Finally, it increases the number of diagnosis codes allowed on a claim from eight to 12.
Each MAC will be required to undergo a certification process using self-developed criteria no later than November 31, 2010 to accommodate the 2011 compliance deadline.
"Although we have multiple MACs with individual systems, we want each one to perform as if it were a virtual single system," Stahlecker said. "No matter which MAC you are exchanging transactions with, you should experience very similar processing results."
In addition, CMS will post on each MAC Web site a list of vendors who have completed their testing for the 5010 format.
"Contact your system vendors right away," Stahlecker said. Ask specifically about whether your licensing agreement includes regulatory updates, she added. "If it does, you may have a shorter path toward your implementation, but if it does not, you may have a long procurement path to follow."
CMS said providers should also inquire whether any potential upgrades include acknowledgement transactions 277CA and 999 as well as a "readable" error report produced from those transactions.
Join us Wednesday, August 19, 2009 from 11 AM - 12:30 PM PDT for a free educational webinar. Just click on the register button below or if this does not fit your schedule, send Tom Reid an email at tom.reid@indidge.com or call him now at (480) 829-0479 Ext. 138 to schedule a web demo that better fits your schedule.
A new teacher was trying to make use of her psychology courses. She started her class by saying, "Everyone who thinks you're stupid, stand up!"
After a few seconds, Little Johnny stood up.
The teacher said, "Do you think you're stupid, Little Johnny?
"No, ma'am, but I hate to see you standing there all by yourself!"