HEALTHCARE NEWS FLASH December 31, 2013
Table of Contents Sales & Marketing ................................................................................................................. 3 Finance ................................................................................................................................. 8 Technology .......................................................................................................................... 13 Strategy .............................................................................................................................. 20
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Sales & Marketing Study: Consumers don't choose cost-effective exchange plans December 28, 2013 | Fierce Health Payer http://www.fiercehealthpayer.com/story/study-consumers-dont-choose-cost-effective-exchangeplans/2013-12-28 When shopping for plans on health insurance exchanges, consumers make several mistakes, often choosing coverage that isn't cost-effective. In fact, more than 80 percent of consumers may unknowingly choose a higher cost plan than they need, according to a new study out of Columbia University. The study authors conducted experiments where consumers chose insurance policies using websites modeled on current exchanges. "Our results suggest there is significant room for improvement," the authors said, explaining consumers place too high a priority on out-of-pocket costs and deductibles. What's more, consumers don't realize their inability to pick cost-efficient plans, which could weaken the demands on insurers to price their plans competitively. "Consumers' failure to identify the most appropriate plan has considerable consequences on both their pocketbooks as well as the cost of the overall system," Eric Johnson, co-author of the study and co-director of Columbia Business School's Center for Decision Sciences, said in a statement. "If consumers can't identify the most cost-efficient plan for their needs, the exchanges will fail to produce competitive pressures on healthcare providers and bring down costs across the board, one of the main advantages of relying upon choice and markets." To help address consumers' inability to choose the most appropriate plan, Johnson and his coauthors suggest exchanges implement certain design tools, including just-in-time education like tutorials and pop-ups that explain basic insurance terms, smart tools that automatically defaults to the most cost-effective plan, and cost calculators. "Designers of the exchanges should take heart and know that they can significantly improve consumer performance by implementing some easy, straightforward tools," Johnson said.
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Mobile apps support customer, payer wellness December 20, 2013 | Fierce Health Payer http://www.fiercehealthpayer.com/story/apps-support-customer-payer-wellness/2013-12-20 Digital health trackers and fitness apps are becoming a key part of wellness programming, as health insurers use previously-unavailable data from them to promote healthy lifestyle customer habits. Enabled by the mobile devices people carry, insurers are moving past gym membership subsidies to create meaningful, customer-specific wellness incentives. These may include premium reductions of up to 30 percent, reported The Huffington Post. For the first time, customers motivated to exercise have a specific monetary trigger to pursue and an incentive that builds with each step they take, the Huffington Post noted. For example, a customer using a jogging app can record the number of miles she runs, and her insurer can offer per-mile premium discounts based on jogging difficulty, frequency and the number of miles covered. "In just two years the number of sensors and monitors that surround the average consumer during every minute of every day has skyrocketed," according to The Globe and Mail. Fitness monitors have become cheap and user-friendly, as previously unconnected devices like scales and refrigerators link with them to bring a wealth of actionable data to insurers. Moreover, as diet, exercise and wellness apps have become wildly popular with customers and insurers alike, the use of mobile apps that promote healthy behaviors is growing into a "global phenomenon," according to The Globe. Embracing this phenomenon, United Healthcare has developed award-winning mobile offerings to engage members in their health, the insurer announced yesterday. For example, United's Health4Me mobile app was recognized for addressing critical care issues, as well as its NOT ME diabetes prevention program that helps customers at risk for developing type 2 diabetes lose weight and exercise. "These personalized resources from UnitedHealthcare make it easier to navigate and better understand the health care system, enabling people to play a greater role in their health and wellbeing," Jeff Alter, CEO of UnitedHealthcare Employer & Individual, said in the announcement. Some insurers also are looking to mobile enablement as a vehicle for corporate financial wellness, with Aetna, for instance, expecting mobile apps to generate $1.5 billion in revenues next year.
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Public health plan costs rise, burden private sector December 20, 2013 | Fierce Health Payer http://www.fiercehealthpayer.com/story/public-health-plan-costs-rise-burden-privatesector/2013-12-20 Private sector employees are paying more for their own healthcare expenses plus extra taxes to cover more than 24 percent of healthcare costs for their public sector counterparts, according to United Benefit Advisors' 2013 Health Plan Survey of more than 11,000 employers. The study found public employer healthcare costs rose 22 percent this year, while private sector costs rose 15.8 percent. The private sector has controlled annual total healthcare costs better than public employers, largely by using consumer-driven health plans. In fact, enrollment in consumerdriven health plans rose from 16 percent in 2012 to 18 percent this year, according to a November survey of more than 2,800 employers with at least 10 employees. But most public health plans continue to feature the generous benefits of yesteryear, putting local and state governments at risk for incurring "Cadillac tax" penalties in 2018 on plans costing more than $10,200 for individuals and $27,500 for families. Those benefits combined with rising medical costs drive up premiums, as efforts in 11 states try to bend the healthcare cost curve. "Unfortunately, these penalties are passed on to taxpayers facing their own healthcare cost increases," United Benefit Advisors (UBA) CEO Thom Mangan said Wednesday in a statement. The UBA study found private sector employees with dependents faced annual premium increases of 1.5 percent since last year, while public workers saw their annual dependent contributions dip by 3.05 percent. And cost sharing is higher in the private sector, the study noted. For example, the average private sector worker faces an in-network maximum that's $1,459 higher for a single adult and $2,226 higher for dependents. To make matters worse on the private side, healthcare cost inequities coincide with wage disparities. "Despite the deficits they were running, various reports have shown that public sector pay has outpaced private in recent years, even during the recession. Recent public pay freezes have slowed salary growth. However, public employers have made up for income loss ... by paying even more for both employee and dependent healthcare coverage in comparison with the private sector," Manga said.
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Health Insurers Extend Deadline for First PPACA Premium Payments December 19, 2013 | Becker's Hospital Review http://www.beckershospitalreview.com/payer-issues/health-insurers-extend-deadline-for-firstppaca-premium-payments.html Health insurers selling policies through the Patient Protection and Affordable Care Act marketplaces have decided to give consumers 10 extra days to pay their first premiums for plan coverage starting Jan. 1, according to America's Health Insurance Plans. Originally, people enrolled in health plans set to take effect Jan. 1 were required to pay their first premiums by next Monday. Last week, federal officials pushed back the deadline to Dec. 31. Now, AHIP has announced health insurers have voluntarily extended that deadline even further to Jan. 10. Those who pay their premiums by that date will have coverage retroactive to Jan. 1, according to a news release. "Our community is taking an important step to give consumers greater peace of mind about their healthcare coverage," AHIP President and CEO Karen Ignagni said in the release. The Obama administration has announced a series of delays and last-minute policy changes to the PPACA implementation timeline. Last week, the administration also announced it will extend the Pre-Existing Conditions Insurance Plan by one month to give people with pre-existing conditions more time to purchase health plans through the exchanges. Other recent changes include delaying the 2015 enrollment period, 2014 enrollment deadline extensions and allowing insurers to extend non-PPACA-compliant health plans. These administrative alterations will probably have a negative effect on health insurers, increasing uncertainty and therefore risk surrounding the PPACA's implementation, according to a report from Moody's Investor's Service.
Aspirus, Northstar Health System to Affiliate December 19, 2013 | Becker's Hospital Review http://www.beckershospitalreview.com/hospital-transactions-and-valuation/aspirus-northstarhealth-system-to-affiliate.html Aspirus, based in Wausau, Wis., has signed an affiliation deal with Northstar Health System in Iron River, Mich. Pending the signing of a definitive agreement and other approvals, hospital leaders expect the transaction will close by the end of this January. Financial details were not disclosed. Aspirus leaders said all Northstar employees will retain their positions, pay levels and benefits.
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Aspirus comprises six hospitals. In addition to being Aspirus' seventh hospital, Northstar, a 25-bed critical access hospital, would become the system's fourth in Michigan. The other three are in Wisconsin. Northstar CEO Connie Koutouzos did not give specific reasons as to why the hospital chose to seek an affiliation partner, but she said the deal "will secure our future in providing quality healthcare to our community as well as allow us to expand and improve services."
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Finance Profit at IASIS Healthcare Plummets 86% in 2013 December 19, 2013 | Becker's Hospital Review http://www.beckershospitalreview.com/racs-/-icd-9-/-icd-10/profit-at-iasis-healthcareplummets-86-in-2013.html Franklin, Tenn.-based IASIS Healthcare posted a $3.6 million loss in the fourth quarter of its 2013 fiscal year, and net profit for the entire year totaled only $3.3 million — an 86 percent drop from FY 2012. IASIS' down year has been felt throughout the for-profit hospital industry. Operators have consistently cited reimbursement cuts, soft inpatient volumes and rising uncompensated care as factors behind the lower profit and operating results. Despite the dismal fourth quarter and fiscal year, Carl Whitmer, president and CEO of IASIS, said he remained optimistic about his company's future earnings. "As we look forward, we believe the work we have undertaken over the past several years to truly integrate our proven population health management experience with our demonstrated operations efficiency has positioned IASIS Healthcare for long-term success in the new era of value-based healthcare delivery," Mr. Whitmer said. For the quarter ended Sept. 30, IASIS recorded net revenue of $584.7 million, up slightly from $582.5 million recorded in the same three-month period last year. On the year, IASIS' net revenue ticked up 2.1 percent to almost $2.38 billion. In FY 2013, admissions at IASIS hospitals dropped 1 percent, but adjusted admissions increased 2.9 percent. Outpatient services grew to 43.2 percent of IASIS' gross patient revenue. IASIS owns and operates 16 acute-care hospitals. The smaller portfolio resulted from the company's sale of its Florida market. In October, IASIS completed the sale of its three Florida hospitals to competitor Hospital Corporation of America, based in Nashville, Tenn. IASIS plans to use the proceeds of that sale, as well as its sale-leaseback transaction with Birmingham, Ala.-based Medical Properties Trust, to pursue various strategic initiatives and grow its footprint in existing markets. Those two transactions netted $427 million. Most IASIS hospitals are in Arizona, Texas and Utah.
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UMass Memorial Health Care to Sell Wing Memorial Hospital to Baystate December 19, 2013 | Becker's Hospital Review http://www.beckershospitalreview.com/hospital-transactions-and-valuation/umass-memorialhealth-care-to-sell-wing-memorial-hospital-to-baystate.html Baystate Health in Springfield, Mass., has signed a letter of intent to acquire Palmer, Mass.-based Wing Memorial Hospital and Medical Centers, an affiliate of UMass Memorial Health Care in Worcester, Mass. Terms of the transaction were not disclosed. Before UMass Memorial transfers ownership of Wing Memorial to Baystate, both systems will conduct due diligence. The deal would also require regulatory approval. Baystate and UMass Memorial officials said the transfer of ownership would better align with the goals of healthcare reform. "One of the main objectives of national healthcare reform is improving coordination of care and focusing as much on keeping patients well as treating them when they're sick," said Mark Keroack, MD, COO of Baystate who will become CEO in July 2014. "Better alignment with local public health efforts; closer coordination with surrounding health information exchanges; stronger relationships between primary care providers, specialists and post-acute providers — all benefit patients and providers alike." The deal builds on an agreement UMass Memorial and Baystate made in September. They signed a letter of intent to explore possible opportunities for collaboration, most of which focused on "improving quality, access and affordability of care." In November, Wing Memorial eliminated 16 positions and cut hours for 38 other employees, as lower inpatient volumes negatively affected the 74-bed hospital's fiscal projections for this year.
Survey: Hospital CEOs Expect 12% Reduction to Operating Expenses by 2020 December 19, 2013 | Becker's Hospital Review http://www.beckershospitalreview.com/leadership-management/survey-hospital-ceos-expect12-reduction-to-operating-expenses-by-2020.html A new survey from Health Affairs shows most hospital and health system leaders are pronouncedly optimistic about the future of America's healthcare system and quality and cost savings in their organizations.
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Seventy-four C-suite executives from large hospitals and health systems took part in the survey, including 46 CEOs, 17 presidents, four CFOs, three COOs and four other individuals with leadership titles. On average, their institutions employed 8,520 people and had annual revenues of $1.5 billion. Here are some of the survey's key findings: •
65 percent said that, by 2020, they believe the healthcare system as a whole will be somewhat or significantly better than it is today.
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93 percent said the quality of care provided within their health system would somewhat or significantly improve by that time.
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91 percent forecasted somewhat or significant improvements on metrics of cost within their health system by 2020, and 85 percent expect their organization to reduce its per patient operating cost by that time.
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Overall, the average operating cost reduction executives expect is 11.7 percent in a range from 0 to 30 percent.
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When asked to name the three most likely ways their organizations could reduce operating costs, 54 percent said reducing the number of hospitalizations, 49 percent said reducing the number of hospital readmissions and 39 percent said reducing the number of emergency room visits.
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In response to the same question above, 12 percent of executives said reducing support staff, 5 percent said reducing the organization's physician staff and 1 percent said reducing nurse staff.
Healthcare analytics market poised to skyrocket December 18, 2013 | Fierce Health IT http://www.fiercehealthit.com/story/healthcare-analytics-market-growth-skyrocket/2013-12-18 Federal mandates, technological advances, increased healthcare IT adoption and venture capital investments are among several drivers of the global healthcare analytics market, which is projected to be worth more than $21 billion by 2020 according to a new report from MarketsandMarkets. Currently, the market is valued to be worth an estimated $4.4 billion, but according to the report, will grow at a compound annual growth rate of more than 25 percent over the next six years. That growth will primarily be driven by predictive and prescriptive analytics in both the U.S. and Asia, the report's authors say. End users that will most heavily influence the market's growth include healthcare providers, health information exchanges and accountable care organizations, according to the report. In the U.S.-which "dominates" the market--federal mandates such as the Meaningful Use program and ICD-10 will be critical to such growth.
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Factors that could hinder growth, according to the report, include data security issues, cultural barriers to IT adoption and a lack of skilled workers in the analytics field. Some healthcare organizations, such as Kaiser Permanente, currently are taking advantage of data analytics tools to improve patient outcomes. For instance, Kaiser Chief Medical Information Officer John Mattison, speaking at a conference earlier this month, said that Kaiser's Southern California hospitals achieved mortality rates 26 percent lower than at other hospitals in the system thanks to the use of data analytics tools. Intermountain Healthcare in Salt Lake City, meanwhile, is using data analytics to track the cost of every procedure, piece of equipment and supply its 22 hospitals and 185 clinics use; the idea is to have data available so physicians and patients can discuss costs and outcomes prior to making treatment decisions. Edward Marx, CIO at Texas Health Resources, recently talked to FierceHealthIT about how he uses data analytics to solidify the budgetary processes of the IT department. Marx referred to the concept as "evidence-based budgeting," and said it takes "emotion" out of what should be primarily a dollars-and-cents equation. A report published in October by Framingham, Mass.-based IDC Health Insights concluded that health payers are putting more stock into the effectiveness of big data and analytics tools at the moment than providers.
Lake Shore Health Care Center's Operator Officially Files for Bankruptcy December 17, 2013 | Becker's Hospital Review http://www.beckershospitalreview.com/racs-/-icd-9-/-icd-10/lake-shore-health-care-center-soperator-officially-files-for-bankruptcy.html TLC Health Network, the operator of Lake Shore Health Care Center in Irving, N.Y., has filed for Chapter 11 bankruptcy. Lake Erie Regional Health System of New York, the parent of TLC and Lake Shore based in Dunkirk, N.Y., made the announcement late yesterday. Officials said TLC and Lake Shore, a 220-bed hospital, lost $16.7 million from operations from 2008 through 2012. Including the first 10 months of this year, TLC and Lake Shore have lost $25.8 million. The massive deficits have also come despite the fact Brooks Memorial Hospital, the flagship of LERHSNY in Dunkirk, loaned $3.7 million to TLC and Lake Shore this year. The system board voted in late October to approve filing for bankruptcy, and the papers were officially filed yesterday.
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"Our board has done so much already, and let's be clear: Without Brooks and LERSHNY, Lake Shore would have closed months ago," Christopher Lanski, LERSHNY's board chair, said in a news release. "Now the well is dry. We cannot and will not endanger Brooks' status any further with more money for TLC/Lake Shore. It is in everyone's best interests to find a buyer, reorganize under Chapter 11 or close." In October, Lake Shore announced it would close at the end of January 2014. The closure could come as soon as Jan. 14 if the hospital does not receive supplemental funding. The bankruptcy filing and intent to close does not mean Lake Shore will definitively shutter its doors, although a potential solution is increasingly unlikely. As Lake Shore reorganizes debt to creditors, the hospital will continue its hunt for prospective buyers. Anthony Borrello, a local businessman, placed a bid to buy the hospital soon after it announced its plans to close, but LERHSNY said they have yet to receive a "firm bid that met the minimum requirements for the sale." Requirements include a fair purchase price, and perhaps more importantly, any buyer will have to provide interim financing until ownership is successfully transferred. LERHSNY is also in hot water financially. Officials released figures showing the system has lost more than $10.5 million from operations in the first 10 months of 2013 on almost $65.8 million of revenue. The system expected revenue would be around $73.4 million.
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Technology Big growth forecast for health IT market December 30, 2013 | Healthcare IT News http://www.healthcareitnews.com/news/big-growth-forecast-health-it-market The North American healthcare information technology market is forecast to grow at a compound annual growth rate of 7.4 percent to reach $31.3 billion by 2017 from $21.9 billion in 2012, according to Research and Markets’ North American Healthcare IT Market Report 2013-2017. The growth is driven by increasing demand for clinical information technology, and administrative solutions and services. “Healthcare information technology has emerged as a promising development to transform the paper-based healthcare system into a digitized one,” report authors write in a news release. “HCIT also gives clinicians real-time access to patient data, and provides them with support to make the best possible decisions. It streamlines processes and reduces administrative overhead. The impact of IT on healthcare in the past decade has been modest, despite the huge potential.” The report segments the market on the basis of applications, delivery modes, and components. Based on application, the North American healthcare information technology is segmented into provider (clinical information technology and non-clinical information technology) and payer, while the market by delivery mode is further categorized as on-premises, Web-based, and cloud-based. The healthcare information technology by component is made up of hardware, software and services. Major factors driving the growth of the healthcare information technology market are the rise in pressure to cut healthcare costs, growing demand to integrate healthcare systems, high rate of return on investment, financial support from the U.S. government, government initiatives, the rise in aging population, growing demand for CPOE adoption in order to reduce medication errors and the rise in incidences of chronic disorders, according to the report. However, the report notes, major constraints to the growth of the healthcare IT system include the high cost of healthcare IT solutions, high maintenance and service costs, interoperability issues, shortage of healthcare IT professionals, poor standard healthcare protocols such as Health Insurance Portability and Accountability Act and unprecedented growing incidences of data breaches of patient information.
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Canada is expected to register the highest CAGR of 7.7 percent respectively in the overall North America healthcare information technology market, followed by the U.S. at 7.2 percent. However, the U.S. accounted for the highest share -- 72.6 percent -- of the North America healthcare IT market and is expected to reach $22.6 billion by 2017 as compared with $15.9 billion in 2012. The factors likely to propel the Canadian market are its public funded health structure, prominent role played by Canada Health Infoway, growing pressure to cut healthcare costs, and the rise in incidences of chronic diseases.
Medicare, Medicaid error estimates grew in 2013 December 27, 2013 | Healthcare Payer News http://www.healthcarepayernews.com/content/medicare-medicaid-error-estimates-grew-2013 After several years on the decline, improper payment rates for Medicare and Medicaid increased in 2013, according to the government's estimates. How much of that represents fraud, though, still remains a mystery. In the 2013 fiscal year, ending in September, Medicare fee-for-service improper payments increased by 18 percent to total some $36 billion, the Department of Health and Human Services disclosed in its annual financial report. Between fiscal years 2009 and 2012, Medicare fee-for-service error rates consistently improved, falling from 10.8 percent to 8.5 percent — but then rising to 10.1 percent last year, an increase of more than $6 billion. HHS finance officials wrote that “efforts are currently in progress to investigate and resolve the drivers causing this increase,” although they have one main hypothesis. With the error rate representing a broad mix of outright fraud, overbilling schemes, improper “upcoding” and administrative mistakes, HHS attributes a large part of the increase to administrative errors stemming from new policies, such as prior documentation for physician home health services and prior authorization pilot programs for mobility devices. There is “a change management aspect to implementing new policies,” HHS officials wrote. “Since it takes time for providers and suppliers to fully implement new policies, especially those with new documentation requirements, it is not unusual to see increases in error rates following the implementation”. The error rate calculation model used for Medicare FFS took a sample of 54,000 claims, measuring those paid that should have been denied and those paid in the wrong amount, including underpayments. For most programs, HHS calculates a gross error rate, the official estimate, and the net error rate, the overall monetary loss (arrived at by subtracting the underpayments from the overpayments and dividing by the total dollar value of the sample).
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In 2013, that monetary loss in Medicare FFS is estimated at $33.2 billion (a rate of 9.3 percent), in addition to almost $7 billion in Medicare Advantage, $1.4 billion in the Part D drug program and $13.5 billion in Medicaid, totalling some $50 billion. For Medicare Advantage and Part D , “the root cause of all” improper payments were “administrative and documentation errors,” HHS officials wrote, although some of those Medicare sponsors have run afoul of compliance in the past. Stemming from audits starting in 2007, Part C plans paid back more than $8 million in fiscal years 2012 and 2013. HHS is also planning to hire contractor for a Medicare Advantage audit program in 2014. Though Medicare and Medicaid have long been on the Government Accountability Office’s high risk list, the federal government has never estimated the amount of fraud in the programs. In the last decade, however, the feds have waged a counter-offensive against both fraud and the more ambiguous, complex problem of overbilling, with fraud control units and strike forces, fierce false claims litigation and recovery audit contractors hired specifically to recoup Medicare overpayments. “Over the past several years, Medicare FFS RACs have recovered billions of taxpayer dollars by finding improper payments that have already been paid,” HHS officials wrote. For fiscal year 2013, Medicare contractors identified $40 million in FFS overpayments and recovered $33 million so far, according to the report. In addition to scaling up the use of those contractors, HHS argues that new policies will limit help hospital overbilling in Medicare in the coming fiscal years, citing the “two midnight” rule for determining appropriate Medicare inpatient and observation status hospital admissions and new process to bill inpatient Part B claims when Part A claims are denied as “not reasonable and necessary” (a problem consuming lots of provider time and resources in appeals to Administrative Law judges). In Medicaid, as the program expands eligibility in half of the states, the national improper payment rate declined to 5.8 percent ($14.4 billion) in 2013, after recent years with high error rates that drew concern from lawmakers and watchdogs. Medicaid’s fiscal year 2011’s error rate of 8.1 percent ($21 billion) was the “second-highest estimated improper payments of any federal program,” the GAO concluded in a report recommending more proactive program monitoring at both the federal and state level. HHS calculates the Medicaid error rate using a model of 17 states’ data on fee-for-service, managed care and enrollment. Overall, HHS officials wrote, the largest cause of the improper payments was verification errors, representing 46 percent of the $14.4 billion, followed by administrative errors mostly related to documentation and “authentication medical necessity” errors mostly related to diagnosis coding errors. The 2013 Medicaid payment error rate was estimated at 3.6 percent, the eligibility error rate at 3.3 percent and the managed care error rate at 0.3 percent.
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HHS also noted that the improper payment rate for those 17 states, measured three years in a row, has fallen since fiscal year 2010, when it was at 9 percent. “The eligibility component reported the greatest improvement,� dropping from 7.6 percent to 3.3 percent, the report said. HHS finance officials tweaked the methodology for the Medicaid’s most recent estimate, replacing a three-year weighted average with a one-year rolling rate and recalculating the FFS error rates for seven states. Without the new changes, the fiscal year 2013 national Medicaid error rate would have been 6.1 percent or $15.0 billion instead of the 5.8 percent.
Healthcare Data Breaches To Surge In 2014 December 26, 2013 | Information Week http://www.informationweek.com/healthcare/policy-and-regulation/healthcare-data-breachesto-surge-in-2014/d/d-id/1113259 Healthcare will be a hotbed of consumer data breaches in 2014, according to an Experian report, "2014 Data Breach Industry Forecast." "The healthcare industry, by far, will be the most susceptible to publicly disclosed and widely scrutinized data breaches in 2014," according to the report (registration required), which addressed healthcare risks as one of six major trends. "The sheer size of the industry makes it vulnerable when you consider that as Americans, we will spend more than $9,210 per capita on healthcare in 2013. Add to that the Healthcare Insurance Exchanges (HIEs), which are slated to add seven million people into the healthcare system, and it becomes clear that the industry, from local physicians to large hospital networks, provide an expanded attack surface for breaches." The "attack surface" of a system refers to the parts that pose the greatest opportunity for attack or error. Best known as a credit bureau and consumer data tracking service, Experian also has a business helping companies recover from personal data breaches. The company has had its own data security problems this year. Michael Bruemmer, vice president of its breach resolution service, Data Breach Resolution, and author of the report, said healthcare accounted for about 46% of the breaches his division serviced in 2013 -- and he expects that to rise significantly in 2014. [Peer-to-peer patient data? Read Patient Data On Filesharing Service Provokes Legal Trouble.] Bruemmer said he is basing this prediction at least partly on reports of security risks posted by the HealthCare.gov website and the health insurance exchanges established by various states. The web infrastructure to support health insurance reform was "put together too quickly and haphazardly." The most glaring problem for these sites has been their inability to keep up with consumer demand. The organizational infrastructure behind the implementation of Obamacare is also complex, meaning that many parties have access to the personal data and could misuse or mishandle it. "So we have volume issues, security issues, multiple data handling points -- all generally not good things for protecting protected health information and personal identity information."
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Another factor: In 2014, the industry will feel the full force of tightened rules that that went into effect in September for protecting health information and disclosing breaches. Part of the problem is that many participants in the healthcare industry, such as individual doctor's offices, don't think of themselves as being in the data management business, so they are inadequately prepared to protect data against the threats that exist today, according to Bruemmer. In most cases, data breaches have less to do with advanced hacking techniques than with lost laptops, failing to shred paper records, and other employee errors. Though the threat from malicious insiders is significant, a bigger threat is "people doing dumb things." In the IT realm, there are stories of people installing anti-malware software but forgetting to turn it on. "And then there's my favorite: where the people in the network operations center actually left the door unlocked, and another employee came in, sat at a console, and played around with the system to see what he could get." Overall, Experian's remediation group worked on more than 2,200 breaches in 2013, versus 1,700 in 2012. In three of the top 10 breaches, the error was traced to a system administrator's sloppy password practices, such as neglecting to change a default password or carelessly sharing the password. Whether stolen or accidentally disclosed, healthcare data is valuable, and that makes it a target. On the black market, personal records suitable for use in identity theft are worth $10-$12 each at the low end or maybe $25-$28 for a particularly attractive identity, he said. When enriched with health data, the value of an identity data set jumps to about $50 per record, because then it can be used for medical and insurance fraud. "The threat is out there, and the threat is going to get bigger," Bruemmer said. "The point is to ensure that you're prepared and have a plan in place."
Report: ACOs expected to double by end of 2014 December 19, 2013 | Fierce Healthcare http://www.fiercehealthcare.com/story/report-acos-expected-double-end-2014/2013-12-19 There's an estimated 500 accountable care organizations across the nation, and with a push for higher quality, cost-effective care, the number is expected to double by the end of 2014, according to a new report. ACO participation has almost quadrupled since 2012 and three out of four responding hospitals say they have plans for an ACO model in 2014, according to Premier Inc.'s "Accountable Care Organization and Population Health Management Trends" report, which surveyed hospitals about their ACO plans once in 2012 and then again in 2013. More than 75 percent of the executives from 101 hospitals across the country surveyed in the fall 2013 said they either implemented or planned to establish an ACO after 2015.
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Non-rural hospitals and those with integrated delivery networks were more likely to participate in ACOs, with larger hospitals moving more quickly toward ACOs than smaller hospitals, the report said. Rural and standalone hospitals were least likely to participate. Despite the expected growth, progression toward ACOs has been slower than anticipated. More than half of executives surveyed in spring 2012 predicted their hospitals would integrate an ACO by the end of 2013, but just one in four of those actually met that goal, the report states. Hospitals interested in establishing an ACO face two big challenges: determining the pace of adoption and forming the payer partnerships necessary to maintain financial stability, according to the report. However, the report also found that hospitals are investing in infrastructure to better manage population health, including advanced health IT, lifestyle and wellness coaching, virtual care and patient-centered medical homes. Hospitals are also considerating other options, such as collaboration and alignment with larger systems, local external providers, local health departments, and public and private players in order to build a solid foundation for an ACO and population health improvement in the future, the report states. ACO momentum faced a setback this summer, when the Centers for Medicare & Medicaid Services confirmed nine hospitals dropped out of the experimental Pioneer program, stating seven did not produce savings and intend to apply to the alternative ACO model, the Medicare Shared Savings Program (MSSP), while two left the program completely, FierceHealthcare previously reported.
HHS: HealthCare.gov Error Rate for Transmitting Enrollee Data Less Than 1% December 16, 2013 | Becker's Hospital Review http://www.beckershospitalreview.com/news-analysis/hhs-healthcare-gov-error-rate-fortransmitting-enrollee-data-less-than-1.html The error rate for HealthCare.gov transmitting consumer information to insurers has fallen to less than 1 percent since the beginning of this month, according to a blog post written by CMS Director of Communications Julie Bataille. Between Oct. 1 and Dec. 5, the number of consumers for whom 834s — the documents used to transmit people's choice of insurance coverage and personal information — were not produced was fewer than 15,000, Ms. Bataille wrote. The number for whom 834 forms weren't produced as a percentage of total federal exchange site enrollees fell from 15.02 percent from Oct. 13 to Oct. 26 to 0.38 percent from Nov. 24 to Dec. 5.
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Last week, HHS Secretary Kathleen Sebelius told the House Energy and Commerce Committee her agency is manually remedying errors the site made in sending enrollee information to insurers. Her testimony followed a report earlier this month from The Washington Post stating approximately one-third of the people who have enrolled in health plans through the federal exchange site since Oct. 1 have been affected by errors such as failure to notify insurers about new customers, duplicate enrollments or cancelation notices for the same individual, mistakes concerning federal subsidies and incorrect information about family members. White House Press Secretary Jay Carney responded by saying that figure doesn't reflect current circumstances, and federal officials have made "huge improvements" to the 834 forms. However, later that week, CMS acknowledged the issues and said it is working with insurance industry members to resolve them. CMS continues to work with health insurers to verify 834 information, and every issuer's health plan in the federal marketplace has CMS files for individuals who enrolled or tried to enroll through early December, according to Ms. Bataille. Since its launch last month, the federal exchange website has experienced numerous technical issues. However, federal have made "substantial progress" in repairing HealthCare.gov, which can now support 50,000 users at a time, according to an HHS progress report.
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Strategy University Hospitals Finalizes Parma, Elyria Deals December 27, 2013 | Becker's Hospital Review http://www.beckershospitalreview.com/hospital-transactions-and-valuation/university-hospitalsfinalizes-parma-elyria-deals.html State and federal government regulators have given final approval to two hospital transactions initiated by Cleveland-based University Hospitals from earlier this year. In July, UH and 332-bed Parma (Ohio) Community General Hospital signed a letter of intent to merge. In June, UH and EMH Healthcare based in Elyria, Ohio, also agreed to combine their organizations. Effective Jan. 1, the organizations will change their names to University Hospitals Parma Medical Center and University Hospitals Elyria Medical Center, according to a news release. Financial details of the transactions were not disclosed, although UH officials said the system would make unspecified investments in facility upgrades, equipment, services and technologies at UH Parma and UH Elyria. Thomas Zenty III, CEO of UH, said the government approval and due diligence phases affirmed "our shared conviction that our patients, and all of northeast Ohio, will be better served through this unification," according to the release. UH Parma has 2,000 employees while UH Elyria, which is comprised of a main hospital and two other campuses, employs 2,100 people. The UH system now has 10 acute-care hospitals, 20 outpatient health centers and 18,000 employees.
Christus Finalizes Partnership With Health System in Chile December 20, 2013 | Becker's Hospital Review http://www.beckershospitalreview.com/strategic-planning/christus-finalizes-partnership-withhealth-system-in-chile.html Irving, Texas-based Christus Health has finalized its partnership with the Pontifical Catholic University of Chile, through which the two will become equity partners in a newly expanded health network, according to a news release. Christus and PCUC signed a memorandum of understanding in February. Under the agreement, the two will become equity partners in a Santiago, Chile-based health network called Red Salud UC.
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PCUC began searching for a strategic partner two years ago and 12 initial proposals were evaluated. In October 2012, PCUC selected Christus as the sole finalist to pursue negotiations toward a definitive joint venture agreement for the ownership, operation and expansion of the university's health network. Red Salud UC, through the Faculty of Medicine at PCUC, operates a medical school in Chile. It includes care settings throughout the Santiago Metropolitan Region and is comprised of nine medical centers and two clinics.
Arizona Care Network, Aetna Partner for Accountable Care December 20, 2013 | Becker's Hospital Review http://www.beckershospitalreview.com/accountable-care-organizations/arizona-care-networkaetna-partner-for-accountable-care.html Arizona Care Network, a collaboration between San Francisco-based Dignity Health and Phoenixbased Abrazo Health, has formed an accountable care collaboration with Aetna. The two will introduce Arizona Care Network Plus, an Aetna Whole HealthSM product, Jan. 1, 2014. The plans will be available for fully insured and self-insured employers in Maricopa County. The accountable care collaboration includes a new payment model that will reward Arizona Care Network providers when they meet quality, efficiency and patient satisfaction measures. Arizona Care Network is a Medicare Shared Savings Program participant and includes a network of more than 1,500 physicians and nine hospitals in the state.
University Hospitals, UnitedHealthcare to Launch ACO December 19, 2013 | Becker's Hospital Review http://www.beckershospitalreview.com/accountable-care-organizations/university-hospitalsunitedhealthcare-to-launch-aco.html University Hospitals in Cleveland has partnered with UnitedHealthcare for an accountable care organization that will launch Feb. 1, 2014, according to a report by The Plain Dealer. The ACO will cover about 19,000 people with employer-sponsored plans who receive care from UH, according to the report. The system's staff will increase communication, provide monthly updates on patients and keep a patient registry as part of the ACO. No details on the ACO's payment model were reported. UH is already heavily involved in the ACO space: It inked an accountable care deal with Cigna in November and has an employee ACO, a pediatric ACO and a Medicare ACO.
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Illinois Approves OSF HealthCare, Kewanee Hospital Deal December 18, 2013 | Becker's Hospital Review http://www.beckershospitalreview.com/hospital-transactions-and-valuation/illinois-approvesosf-healthcare-kewanee-hospital-deal.html The Illinois Health Facilities and Services Review Board approved Peoria, Ill.-based OSF HealthCare's acquisition of Kewanee (Ill.) Hospital, marking an end to the transaction process. OSF HealthCare and Kewanee Hospital, a 25-bed critical access hospital located about 50 miles north of Peoria, signed a definitive agreement in October after agreeing to an initial letter of intent to affiliate in November 2012. Kewanee Hospital will be the system's ninth hospital. Under the deal, all Kewanee Hospital employees would become OSF HealthCare employees. In addition, since OSF HealthCare is a Catholic-based health system, Kewanee Hospital medical staff members will have to abide by the Ethical and Religious Directives for Catholic Health Care Services. Kewanee Hospital will also change its name to OSF St. Luke Medical Center, effective April 2, 2014. Financial terms of the agreement were not disclosed. "Kewanee Hospital is committed to providing quality healthcare services to our community," Kewanee Hospital CEO Lynn Fulton said in a news release. "Our team is very excited about the affiliation with OSF Healthcare System and what it means for our patients. We believe that together we are better positioned to provide for the needs of our patients far into the future." OSF HealthCare is also in the process of adding Rochelle (Ill.) Community Hospital, another critical access hospital, to its network.
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