Five Trends in Health Care for Election Year 2012
December 28, 2011
By: Sarah E. Swank
This article originally appeared in the December 28, 2011 issue of Bloomberg’s Health Law Report.
Health care reform is a critical issue facing our nation, and a hot topic for the 2012 elections. Tough economic times leave many Americans unemployed and without health care insurance. At the same time, Congress struggles to balance a hotly contested budget. Compounding the issue are the over 9,000 baby boomers turning 65 each day1 and ultimately becoming eligible for the already overburdened Medicare program. This article explores five trends that will survive the election, regardless of whether a Republican or Democrat lands in the White House.
Trend 1: Quality
High quality care for patients is an admirable goal, but it is not a new goal for most providers. What is new is the impact of quality scores on provider reimbursement and increased public transparency. Several programs now link incentives or penalties to reimbursement. The Patient Protection and Affordable Care Act (ACA) established a program for the evaluation and public reporting of provider and supplier performance implemented by the Centers for Medicare & Medicaid Services (CMS).2 Quality measurement is complex but here to stay, as evidenced by the U.S. Department of Health and Human Services (HHS) Quality Measure Inventory, which lists searchable measures across HHS divisions by topic, domain, and care setting.3
More Bang for Your Health Care Buck: Pay-for-Performance
The health care industry has batted around the term “pay-for-performance” for some time now in various forms. Under a pay-for-performance model, providers that meet quality measures are rewarded with greater reimbursement. An example of such a program is the Accountable Care Organization (ACO) shared savings program. The ACO final rule, published in the federal register on November 2, 2011, provides that ACOs will receive a portion of the savings shared, only if they meet prescribed quality measures.
Under the Hospital Inpatient Value-Based Purchasing (Hospital VBP) program and the VBP final rule published on May 6, 2011, CMS will redistribute an estimated $850 million in hospital diagnostic-related group (DRG) payments to reward acute care hospitals based on their overall performance on designated quality measures in fiscal year (FY) 2013, the Hospital VBP program’s first year. For FY 2013, CMS will fund the Hospital VBP payment incentive pool by reducing participating hospitals’ base operating DRG payments for each discharge by one percent. CMS plans to increase this reduction to a two percent reduction by FY 2017. Other providers will likely see other value based purchasing programs.
One Stop Shopping for Quality
Public and transparent reporting has hit the internet on such sites as Hospital Compare.4 Similar to buying a television or comparing hotels online, consumers may select multiple hospitals by location to compare quality measures. Public reporting will expand beyond hospitals to Physician Compare,5 Nursing Home Compare,6 Home Health Compare,7 and Dialysis Compare,8 similar sites to Hospital Compare. At this point, Physician Compare includes only a physician directory of participating physicians linked by national provider identifier (NPIs) numbers to initiatives such as the Physician Quality Reporting System (formerly known as Physician Quality Reporting Initiative) and those who successfully participated in the Electronic Prescribing (eRx) program. CMS plans to make physician performance publically available the end of 2012.9 Nursing Home Compare already reports quality data, but CMS is currently in the process of changing to quality measures, which go into effect in April 2012. Public reporting for other providers might be around the corner. Ultimately, these websites might turn into one stop shopping for health care consumers.
Who Is Policing Public Reporting?
As part of ACA, Congress established the concept of qualified entities to oversee public reporting of quality and claims data. Under the Availability of Medicare Data for Performance Measurement proposed rule, out June 8, 2011, qualified entities process Medicare claims data to create public reports such as Hospital Compare. Qualified entities may also submit new quality measures, report formats, and reporting methods to ensure quality innovation. CMS proposed standards for the correction and appeals processes for providers and suppliers that believe a qualified entity mistakenly calculated their quality measures. At the same time, CMS sought to balance providers’ and suppliers’ need to receive fast, accurate, and useable public reports with the need to protect the privacy and security of beneficiary information, including patient names. The final rule is likely to be out any moment providing the framework for the quality reporting for 2012 and future years.
Another key trend in quality is the focus on the patient care experience as seen through the patient’s eyes. CMS seeks to transform this experience through surveys asking patients to rate their providers. Measures include timely appointments, access to specialists, or likelihood that the patient will recommend the provider to others. Providers seeking incentive payments under Hospital VBP, ACO, and similar programs should focus resources toward patient satisfaction efforts such as making the care experience one that patients feel like they are seen quickly and would recommend the provider to others. The trend is for hospitals and other health care providers to establish innovative new patient care experience initiatives such as patient follow-up calls, appointment reminders, and new nurse navigator and home care positions that transcend the acute care setting. To a certain extent, a bad experience at the gift shop or parking garage may influence overall patient satisfaction scores. Perhaps the health care industry will need to move toward hotel-level customer service programs, such as warm blanket services, parking management, and meal choice programs as patients begin to shop for quality.
“Topped Out” Measures: When the Competition is Too Close to Call
CMS acknowledged in this year’s Hospital VBP final rule that quality indicators “topped out,” meaning that there is no statistical difference between the 75th percentile and 90th percentile of the specific quality measure. In Hospital VBP final rule, CMS evaluated the new quality indicators for their ability to produce true statistical differentials among hospitals. Once CMS eliminates a quality measure from the Hospital VBP program or other quality programs, providers may turn their attention to quality improvement activities that provide the greatest financial return. These eliminated quality measure may receive fewer resources again becoming a quality concern. CMS proposes, in part, rely on qualified entities and the rule making process to ensure effective measurement of current, new and eliminated topped out quality measures. Ongoing evaluation also would allow CMS to incentivize cutting-edge care and quality improvement consistent with the evolving nature of evidence-based medicine.
Trend 2: Cost Containment
A goal for 2012 is lowering the cost of the health care services provided to Medicare beneficiaries, while raising quality of those services. Elimination of waste is a key component to cost containment, along with the elimination of fraud and improper billing. Waste can come in many forms, but waste is not always easily defined. For example, a physician may seek additional diagnostic testing to rule out potential health conditions partially motivated by concerns for possible malpractice claims. On the other hand, waste seems more clear-cut when it relates to an overpayment by a federal agency based on improper provider billing practices.
RACs Becomes Proactive
In January 2012, CMS will launch a new demonstration projects targeting improper payments. This will include the expansion of Medicare Recovery Auditors (RACs) billing audits for Medicare and newly launched RAC Medicaid to find overpayments under these federal funded programs. Under the Recovery Audit Prepayment Review demonstration, RAC will review claims before they are paid to ensure that the provider complied with Medicare payment rules.
Hospital Acquired Conditions
Another cost containment effort is reducing spending on conditions caused by the provider who is caring for the patient. CMS no longer provides additional reimbursement for the higher costs of care associated with “hospital acquired conditions, ”Which are specified conditions that were not present upon a patient’s admission to the hospital, but obtained while in the hospital. CMS has placed specific emphasis on whether the health care industry finds there are evidenced-based guidelines for prevention of additional conditions selected under this program. CMS will likely continue to expand this program for hospitals and already authorized states to identify other provider-preventable conditions and health care acquired conditions under Medicaid by final rule effective July 1, 2011.
As required under the ACA, the FY 2012 Inpatient Prospective Payment System (IPPS) final rule creates a Hospital Readmissions Reduction Program. CMS defined “readmission” as the admission of an individual to the same or another applicable hospital within a thirty-day period following discharge from an applicable hospital. This period starts once a patient is discharged from a hospital. A “readmission” would occur if, for example, a patient is discharged to another level of care such as a home health, skilled nursing, or rehabilitation hospital and is readmitted within this specific period. During the first program year, CMS adjusts payments for “applicable hospitals” based on the occurrence of readmissions associated with three “applicable conditions” with the intent to expand conditions for each FY. If hospitals believe that expanding responsibility for readmission beyond the four walls of the hospital are unfair, it appears other providers may be held accountable as well. For example, the nursing home quality value based purchasing demonstration includes readmission requirements for participating nursing homes.10
Trend 3: Care Coordination
After a trip to the emergency room, patients can be surprised to receive separate bills for the ambulance company, the radiologists, emergency room physician, and the hospital. One potential solution under the ACO program is to track care coordination as part of the quality measurements. Is the answer to have providers across care settings by tying them through the payment system? The CMS Innovation Center is testing this theory through the Advance Payment and Bundled Payment initiatives.11 Large health systems that maintain or develop integrated systems with diverse types of providers seem well positioned to meet the care coordination challenge in 2012.
Affiliate or Consolidate?
With pressures beyond the walls of the hospital under programs such as the hospital readmission reduction program, hospitals will consider collaborating with other providers who care for Medicare beneficiaries after hospital stays. Those providers may be in the best position to assist hospitals by promoting health education, establishing care plans, and ensuring compliance with discharge instructions to reduce readmissions and Medicare spending per beneficiary. This type of partnership, either in the form of an affiliation or ownership, will be key to meeting the increasingly targeted quality goals and meeting the needs of beneficiaries for coordination of care after leaving the acute care setting. Ownership of other post acute care providers is a means to control quality, promoting consolidation of providers into large hospital systems. The trend towards physician practice acquisitions by hospitals will likely increase as care is moved out of the expensive acute care setting to less expensive settings. Small providers wonder if they can make it in this new world without the resources of much larger health systems.
Freedom of Choice
Freedom of choice will likely continue to be a theme as discussed by CMS in the ACO program and Bundled Payment incentive. Regardless of ownership or affiliation, Medicare beneficiaries will have the freedom to choose their health care providers as described in section 1802 of the Social Security Act. In addition, hospitals will still need to comply with their condition of participation related to discharges when discussing home health and nursing home options with patients when attempting to coordinate their care. When patients pick a provider with poor quality it may have consequences to other providers, such as decreased payments for hospitals under the readmission program.
Trend 4: Health Information Technology
Another driver towards consolidation besides quality and care coordination standards is the cost of implementing electronic health records (EHR). Quality reporting and improvement has become increasingly important and integral to reimbursement under the Medicare program. To continue to meet the demands of the quality programs, providers will likely adopt, maintain, and upgrade their EHR systems and focus significant resources on point of care quality initiatives, security, and data collection. CMS ultimately envisions a uniform set of reporting requirements, but these technical reporting issues are likely to come under upcoming changes to Health Information Technology for Economic and Clinical Health (HITECH) Act, enacted as part of the American Recovery and Reinvestment Act of 2009.
Aligning HIT Incentives
An example of the coordination efforts across EHR programs occurred as part of the eRX program.12 The eRx program offers incentive payments to providers that are “successful electronic prescribers” using “qualified” eRx technology. For providers that are successful electronic prescribers in the 2011 year, the eRx program offers an incentive of one percent of the provider’s estimated Medicare Part B allowed charges for professional services furnished during the year. In 2012, however, the program begins to impose penalties on providers that have failed to successfully electronically prescribe. These penalties will equal approximately 1% of the same Medicare allowed Part B amounts in 2012, 1.5 percent in 2013, and two percent in 2014, when the program is currently set to end.
The Meaningful Use program, in contrast to the eRx program, offers qualifying providers incentive payments beginning in 2011 and continuing through 2015. Unfortunately, many providers discovered that the eRx and EHR programs use similar but not identical standards for “qualified” and “certified” e-prescribing technologies. For example, similar to a qualified eRx system, a certified EHR system must be capable of checking for drug-to-drug interactions or whether a drug is on the formulary. Typically, EHR that is devoted to eprescribing is only one small piece of a larger, wholly integrated “complete” EHR technology. While providers may not receive incentive payments under both programs at the same time, they may be subject to penalties under the eRx program even while they work to meet the overlapping requirements of the EHR program. The eRx final rule revisions allow for providers to apply for a hardship exception for participating in the Meaningful Use program. This change came in response to a report dated February 17, 2011 from the Government Accountability Office stating which stated that the duel incentive programs created inconsistencies in technology development of electronic prescription systems.
CMS acknowledged the potential importance and dangers of social media use by specifically adding social media to the definition of “marketing” in the ACO final rule. CMS commented that a permitted use of social media including appointment reminders on Twitter and Facebook. By adding social media to the definition of marketing in the ACO final rule, CMS ultimately requires CMS approval of those marketing materials and activities.
Among the potential dangers of social media are misleading and discriminatory marketing. With the importance of patient satisfaction as a quality indicator, CMS appears concerned that marketing activities such as the use of social media can improperly influence Medicare beneficiaries. Perhaps CMS will develop social media specific templates for ACOs that will provide us a glimpse in the future regulation of this area. Another potential danger of social media is HIPAA violations linked to health care workers posting patient images and descriptions on social media sites such as Facebook. In light of new challenges in communicating using social media, the American Medical Association (AMA) released this year a policy entitled Professionalism in the Use of Social Media providing guidance to physicians on such issues as reviewing privacy settings, interacting with patients, and maintaining professional boundaries and their reputation.
There’s an App for That – mHealth
The summer of 2011, the Food and Drug Administration (FDA) issued a press release with draft guidance and asked for comments related to a proposal to regulate mobile medical applications, also known as “apps.” Apps can assist with health and wellness management and facilitate care delivery. For example, physicians may read MRIs from their iPads. Next year, the FDA will likely regulate apps that function as medical devices or medical device software that can be a potential risk to public health.
Telehealth and Telemedicine
The technology is already in place for a physician to make a home visit or see a hospital patient without leaving the physician’s office or home. Further, telehealth may become more commonplace as the physician shortage becomes a reality. On May 2, 2011, CMS released the telemedicine credentialing and privileging final rule clearing the way for credentialing agreements for telemedicine services between hospitals, as well as with non-hospital telemedicine entities. The final telemedicine rule follows on the heels of recent regulations promoting health care reform goals including providing cost effective and timely delivery of healthcare services. Under the final telemedicine rule, CMS expands the definition of telemedicine for credentialing purposes to include patient assessment, diagnosis, treatment, consultation, transfer, data interpretation, and patient education.
The reimbursement and provider licensing issue, however, has not caught up with technology. For reimbursement purposes, CMS defines telehealth, in contrast to telemedicine, as professional consultations, office visits, and office psychiatry services. Providers are only reimbursed for such telehealth consultations in limited circumstances, such as when these services are provided in areas designated as rural health professional shortage areas or by entities participating in the Federal telemedicine demonstration. The lack of reimbursement and policy towards expansion of telemedicine services in this area appears to have motivated the Office of Inspector General (OIG) in OIG Advisory Opinion 11-12 to allow for more lenient fraud and abuse enforcement. In addition, some argue that nationalized telemedicine could be accomplished through a national physician licensing system or compact licensing between states. The insertion of technology between the patient and the physician may require telemedicine health care professionals to develop different standard of care than those who treat their patients face-to-face.
Trend 5: Enforcement
Enforcement comes in many forms for health care providers. Enforcement areas to watch in 2012 include fraud, overpayments, hospital-physician relationships, medical necessity, and HIPAA/ HITECH. The federal agencies are collecting more and more data and they are not afraid to use it for enforcement efforts. Providers should fine tune their compliance programs and audit their billing data, EHRs and financial relationships with physicians to avoid down stream fraud and abuse issues and security violations.
Compliance plans and proactive auditing will become more important in the face of increased federal enforcement efforts and changing regulatory environment. Since the release of the Stark Law voluntary disclosure protocol last year, many providers self disclosed to CMS and are waiting for an answer. It appears that auditing is your best bet to discover and resolve Stark Law concerns. On the other hand, the OIG now maintains the OIG Most Wanted Fugitive list targeting sometimes shockingly fraudulent providers as criminals.13 The ACO final rule gave a sneak preview of the importance of revisiting compliance plans and an organization’s ability to report fraud to the government. Review of the OIG work plan and changes in the law is always a good start in setting compliance goals for the upcoming year.
Privacy and Security of Electronic Information
Providers will need the right systems to fully report data needed for quality and reimbursement, while ensuring the security of individuals’ information they report and use for these health care operations. With more and more data being reported, providers must focus on the accuracy and security of their systems as part of their compliance efforts. Although CMS seemed to back off from the requirements of EHR under the ACO final rule, CMS emphasized the importance of EHR in care coordination. In the comments to the ACO Final Rule, CMS encouraged the adoption and use of EHR, but understood that providers needed greater experience with EHR. Meanwhile, the industry braces itself for a HIPAA/HITECH overhaul, which will likely focus on the ability of providers to audit system access and to provide comfort that patient information is safe and secure.
This is an important time for providers and the communities they serve. Regardless of the party in power after the election, this year will, and must, bring change to the United States health care system.
1 Kathleen Sebelius, Secretary, U.S. Dep’t of Health & Human Services, Speech at Senior Medicare Patrol Conference (August 9, 2011) (transcript available at www.hhs.gov/secretary/about/speeches/sp20110809.html).
2 Pub. L. No. 111-148, § 10332, 124 Stat. 119 (2010), amending § 1874 of the Social Security Act (SSA), 42 U.S.C. 1395kk(e).
12 https://www.cms.gov/ERxIncentive/01_Overview.asp#TopOfPage; authorized by the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA), Pub. L. 110-275, 122 Stat. 2494 (2008).