late-breaking news from your medical association volume XX / no. 6 SUMMER 2013
local Judge Tosses El Camino Pay Cap A Santa Clara County Superior Court Judge has thrown out a voter-approved initiative to cap the pay of executives at El Camino Hospital. Measure M was passed by the voters last November and would have capped the pay of executives at twice the $175,000 annual salary of Governor Jerry Brown. The measure would have affected the compensation of a half-dozen executives at the 399-bed hospital, including CEO Tomi Ryba, who earned close to $700,000 a year. The Superior Court judge ruled that the measure was unconstitutional on two fronts: It did not enact a new state law that could be enforced, and it did not apply to healthcare districts. The SEIU was the primary backer of the measure. It admitted that the effort was a bargaining chip intended to exert leverage in negotiations with El Camino management. The union reached an agreement for its 1,200 employees at the hospital shortly before the measure was voted upon. SEIU has no intention of challenging the judge’s ruling.
Kaiser Redwood City Nears Completion The Kaiser Permanente rebuild of its Redwood City facility is about 75 percent complete, and has a completion date of December 17, 2014. The rebuild will cost approximately $250 million for the 149-bed, seven-story facility. The tower’s exterior is already largely complete—the next year will be taken up finishing the inside and training and transitioning staff to move into the new structure before year-end 2014.
state Anthem Blue Cross Pilot Reduces Surgery Costs by 19 Percent A reference pricing strategy, in which an employer agrees to pay a certain amount for a procedure and anything above that amount is the employee’s responsibility, cut the price of hip and knee replacement surgeries by 19 percent in a one-year trial with Anthem and CalPERS employees. In an Anthem study conducted in 2009, California hospital charges for total knee replacement and total hip replacement surgeries ranged from $15,000 to $110,000 without evidence of differene in outcome or quality. The pilot employed what is known as a reference pricing strategy, which is described as a “reverse deductible.” A typical health insurance plan member pays several thousand dollars in deductibles or copayments and the insurer picks up the rest of the cost. In reference pricing, employers agree to pay a certain amount for a procedure and anything above that amount is the employee’s responsibility. For the two-year pilot, CalPERS set a $30,000 limit on what it would allow Anthem to pay for the procedures. The insurer identified 46 hospitals across the state as value-based purchasing design facilities. Hospitals had to be part of the Anthem network, perform enough of the procedures to demonstrate skill, and charge less than $30,000 for the inpatient costs associated with each surgery. One surprise was that some higher-priced hospitals (not pilot participating hospitals) actually reduced their prices in anticipation of consumer choice. Reference pricing may turn out to be a potentially powerful method of “putting the patient’s skin in the game.”
national MyFitnessPal App MyFitnessPal App just received $18 million in new funding from Kleiner Perkins and Accel Partners, who are betting that Americans are ready to take more control over monitoring their health. MyFitness claims 40 million users and is profitable, somewhere around $100-120 million. This is at the same time that Weight Watchers struggles to keep its membership rolls from shrinking.
Physician Payments Sunshine Act Effective August 1st Manufacturers of drugs, medical devices and biologics that participate in federal health care programs must begin tracking and reporting certain payments and items of value, including consulting fees, travel reimbursements, research grants, and other gifts, given to physicians and teaching hospitals. The new law also requires manufacturers and group purchasing organizations (GPOs) to report certain ownership interests held by physicians and their close family members. The reports will be submitted to CMS on an annual basis (the first submission is due March 2014) and will be made available to the public on searchable websites beginning September 2014. Physicians, will, however, have the right to review their reports and to challenge any information that is false, inaccurate, or misleading. Physicians will be provided, at a minimum, 45 days to review the transparency reports and make corrections before they are made public. The Sunshine Act, an Aff ordable Care Act provision, covers all physicians who have an active state license even if they do not participate in federal health care programs. The act excludes students and residents. Physicians are encouraged to register for the CMS Open payments listserv to receive periodic email updates about the program. To register, visit http://go.cms.gov/openpayments.
2013 National Health Insurer Report Card Physician practices are encouraged to take a look at the full results of the AMA’s 2013 National Health Insurer Report Card (NHIRC) and see how their health insurers measure up. The NHIRC provides metrics on the timeliness, transparency, and accuracy of claims processing of participating payers in an effort to educate physicians and the public, and to reveal opportunities for improvement. Physician practices can start by going to www.ama-assn.org/go/reportcard to view the report.
Perverse Incentives Perpetuate Use of Disproven Medical Treatments Researchers looked at 146 medical practices based on studies published in the New England Journal of Medicine whose conclusions were reversed by subsequent scientific trials within the next ten years, yet physicians continue to use the procedure or recommended care. The researchers found that flawed research too often prompts doctors and hospitals to rush in technologies or practices that subsequent studies resoundingly refute. Yet, despite solid contradicting evidence, some doctors take years to change their recommended care, and other just don’t. The paper was published in the August issue of Mayo Clinic Proceedings.
Oregon’s Efforts to Get “Frequent Flyers” Out of ERs A 40-year-old with a heart attack at age 35 as well as congestive heart failure and nerve pain in his legs, lives in his car or at the ER . He states that every time his chest hurts, he will call an ambulance or go the hospital ER. In 2011, he visited the ER department at Oregon Health & Science University in Portland 15 times and was admitted to the hospital 11 times. His frequent visits brought him to the attention of Oregon’s new coordinated care organization. As part of the Affordable Care Act, Oregon has been given permission to conduct its own experiments. One way Oregon is trying to reduce Medicaid costs is to encourage people who constantly turn up at the ER to get their health care from regular doctors instead. Health Share of Oregon, one of the CCOs, has helped the above individual and other Medicaid patients, much like a family member might. Health Share helps individuals schedule doctor appointments, helps patients gets dialysis, and makes sure that patients are taking their medication correctly. They even made sure, in the case of the person living in his car, that he had access to a local community center where he could shower. His doctor says that she has seen an amazing change once resources became available to him and housing adult foster care stabilized him. He now wants to be adherent to his medication, and his ER visits dropped from 15 in 2011 to just four in 2012.
Avian Flu, Strain Can Jump From Person to Person A father and his daughter who both died this spring from the H7N9 avian influenza provide the best evidence yet that the novel strain can jump from person to person. After the father took ill in March, his daughter cared for him and also contracted 2
SUMMER 2013
the illness. Both the genetics of the flu strains and the epidemiology of the cases combine to suggest the daughter caught the H7N9 flu from her father. Most of the 134 laboratory-confirmed cases appear to be epidemiologically separate. In most cases, the source of the virus appears to have been domestic fowl intended for food and sold live in so-called web markets. But in this case, only the father stopped and prepared food for the family. A genetic analysis of the flu isolated from the two, who both since died, showed they had the same strain.
medicare “Early Boarding” for Medicare Transition Available California’s Medicare Administrative Contractor (MAC) will transition from Palmetto to Noridian Administrative Services on September 16. “Early boarding” is available for Medicare providers, which allows vendors and clearinghouses to connect to Noridian’s Electronic Data Interchange Support Services (EDISS) gateway system prior to the actual transition date. Submitting electronic claims and getting the connections to Noridian established and tested early will afford time to address any difficulties that may be encountered. Go to Noridian’s website, and look for https://www.noridianmedicare.com/eula.php?t=/je/docs/ noridian_jurisdiction_e_early_boarding_has_begun.html.
Guidance on Where to Focus Your Transaction Testing for ICD-10 The Workgroup for Electronic Data Interchange (WEDI) has issued guidance to help the healthcare industry better understand where to focus transaction testing to ensure that ICD-10 codes are correctly placed and formatted within the transactions. The issue brief, “ICD-10 Impact to HIPAA Transactions,” outlines the transactions affected by ICD-10, as well as the placement of the codes within the transactions. ICD-10 will affect every business process and system in health plans, provider facilities, clearinghouses and vendor offerings, so it is imperative that transactions include the proper diagnosis and procedure information. Go to: http://www.wedi.org/news/press-releases/2013/08/07/wedi-and-asc-x12-provide-key-hipaa-transactionguidance-for-icd-10-codes.
Revised Billing Rules for Cancelled Surgeries Could Save Millions A new report from the Office of Inspector General (OIG) found that most short-stay hospital inpatient claims for cancelled elective surgeries were not reasonable and necessary and therefore did not meet Medicare requirements for Part A prospective patients. Medicare could save more than $38 million over two years by strengthening billing requirements for cancelled elective surgeries, according to the report. Based on 80 sampled claims representing $345,717 in overpayments, the OIG estimates Medicare made $38.2 million in Part A inpatient hospital payments in 2009 and 2010 for unreasonable and unnecessary shortstay, cancelled elective surgery admissions. In those 80 claims, payments didn’t satisfy federal requirements because either a clinical condition did not exist on admission or a new condition did not develop after admission that required inpatient care. The report also pointed out that inpatient admissions were medically unnecessary when hospitals cancelled surgeries because preoperative exams showed admitted patients were not ready for their surgeries. Additionally, the report said cancellations due to hospitals’ lack of preparedness did not warrant billing inpatient claims.
CMS Seeks Public Comment on Releasing Doctor Pay Data CMS is seeking public comment on how best to make physician-specific Medicare payment data publicly available while also protecting the privacy of patients. Since 1979, public release of payment information had been prohibited by a court injunction resulting from a Florida Medical Association lawsuit, but on March 31 the injunction was vacated by the U.S. District Court in Florida. The court looked at the narrow question of whether the injunction was wrongly or rightly entered or whether a significant change in either factual conditions or in law renders continued enforcement of the injunction. At issue are the privacy rights of physicians regarding payments they receive, what CMS policies should be considered so that the release of the data will further the CMS goals of increasing quality, transparency, and value, and in what form the data should be released. On another front, in June Senators Grassley and Wyden introduced a bipartisan bill that would require disclosure of Medicare payment information on individual physicians and suppliers, to enable the public to compare providers of services. The Medicare DATA (Medicare Data Access for Transparency and Accountability) Act would amend federal public information laws to remove a privacy loophole that has prevented the release of physician-specific Medicare payment data for decades.
SUMMER 2013
3
FIRST CLASS MAIL U.S. POSTAGE PAID SAN MATEO, CALIF PERMIT NO. 668
ADDRESS SERVICE REQUESTED RETURN POSTAGE GUARANTEED 777 MARINERS ISLAND BOULEVARD, SUITE 100 SAN MATEO, CALIFORNIA 94404
malpractice Malpractice Claim Payouts Hit All-Time Low In 2012, the number of malpractice payments on behalf of doctors (9.379) was the lowest on record, falling for the ninth consecutive year. The value of payments made on behalf of doctors ($3.1 billion) was the lowest on record if adjusted for inflation. In unadjusted dollars, payments fell for the ninth straight year and were at their lowest level since 1998. More than four-fifths of medical malpractice awards compensated for death, catastrophic harm or serious permanent injuries. Medical malpractice payments’ share of the nation’s health care bill was the lowest on record, falling to about one-tenth of 1 percent (0.11%) of national health care costs. Medical liability premiums fell to 0.36 of 1 percent of health care costs, the lowest level in the past decade.
miscellaneous Pew Research Questions Public about Attorneys It will come as no surprise , I am sure, that in the Pew study, attorneys are ranked at the bottom of the barrel in terms of groups that people thought contributed a lot to society’s well-being. Only 18 percent of respondents felt that lawyers contributed a lot. This is compared to 78 percent of people thinking the military contributed a lot. Behind the military were teachers (72%), medical doctors (66%), scientists (65), engineers (63), clergy (37%), artists (30%), journalists (28), and business executives (24%). The survey was conducted this spring and had a margin of error of plus or minus 2.1%.
4
SUMMER 2013