Spotlight On ARRA

How many of you long for the “innocent days” of youth?

As an IT Director in the early 90’s, I was convinced that ICD- 10 would be a quick and painless implementation. I went straight to my primary software vendor and asked what their plan was.  Well, they didn’t have one— and they weren’t concerned. I, of course, was concerned and dutifully recorded that in a request. 

The ambition was short lived; ICD 10 was not implemented…. 

As for the vendor? Well, their newest release this summer is fully ICD-10 compliant. Most of their customers will have to have specific ICD-10 updates retrofitted to their current version in order to be compliant by the deadline.
 
The naïve part of me thinks that if the vendor had acted on my request back then, they would have been ahead of the game. The realist in me knows that if they had acted back then, they would have wasted a lot of time programming something that no one would have used for years.

Let’s just surmise— for a moment — that my company did bite the ICD-10 bullet back in the early 90’s. This would be one major initiative that we wouldn’t have to accomplish now. Consider the impact for implementing electronic health records, once with ICD-9, and again for ICD-10. While it’s true that some were already using an electronic solution, the majority would have had a much easier time integrating ICD-10 then vs. now. 

In addition to a more simplified implementation, think about possible financial incentives:  there were none available for ICD-10 then like there are for ARRA now. If there were, there may have been stronger support for ICD-10, and it would have been implemented back then. Internal and external resources may not have been stretched to the limit in competing ICD-10 and ARRA projects like they are now.

So, what does all this show us? We weren’t committed to ICD- 10 in the 90’s. What were the barriers?  Some of the barriers still exist: 

• Not everyone is covered by the mandate, and some of those who are will not be ready by the deadline. This results in provider organizations supporting both ICD- 10 and ICD- 9, as well as multiple transaction sets.  Adding costs to an organization with no incentive of decreased future costs and/or reimbursement for the expense was a barrier in the 90’s and still is today.
• Transparency is another barrier. Providers will submit ICD-10 transactions and, known or unknown to them, some payers will cross map it to ICD-9.  While this reduces the implementation impact on payers, it doesn’t meet with the expectations of the providers. 

As we eagerly look ahead to ICD-11 in 2015 with the promise that it’s enhanced for EHR’s… well, that just seems to say that major EHR rework is in our future.

By the way, I have not yet gone to my primary software vendor to check on their ICD-11 readiness.

Diane Walizer
Practice Director, Beacon Partners

The views and opinions expressed in this blog are mine personally and are not necessarily representative of Beacon Partners, its management, employees or its subsidiaries.

ICD-10 Déjà Vu

Guest blog by M. Christine Kalish MBA, CMPE

Yesterday the American Medical Association (AMA) passed a resolution at their 2011 Interim Meeting, mandating the group to "vigorously work to stop the implementation of ICD-10 and to reduce its unnecessary and significant burdens on the practice of medicine.” The resolution that the AMA will "do everything possible to let the physicians of America know that the AMA is fighting to repeal the onerous ICD-10 requirements on their behalf" continues.

Strong language, AMA, but the ICD-10 train has already left the station. And we have seen this sort of talk before —there is a sense of déjà vu here.

Remember the successful efforts of the AMA and other organizations to delay the original ICD- 10 implementation date of October 2011? That’s the day CMS originally targeted for mandatory ICD-10 adoption for physicians, hospitals and payers. The AMA’s point of contention about the October 2011 date was that physicians were not given sufficient time to upgrade all systems and then provide training and education. They also cited the cost would be significant and the expense of the implementation should be spread out over a longer timeline. So the Bush administration allowed a delay until October 1, 2013. Two additional years.

After the announcement of the initial delay, a seemingly satisfied AMA led the way in providing resources for physician practices to transition to ICD-10 within the agreed upon timeline.

So why the change of heart now?

Organizations have already invested significant resources in ICD-10 adoption. No one is arguing that the implementation is challenging and costly, especially on the heels of Meaningful Use and other healthcare reform measures. But the AMA seems to have forgotten that they helped architect and then eventually approved the October 2013 delay.

Also, the AMA or, more importantly, the physicians within the association, needs to realize that the benefits of ICD-10 far outweigh the costs of implementation.

ICD-9 is outdated and no longer effective. The numbering system cannot support the addition of the new codes. With time, attempts to find codes are increasingly difficult since some are being placed wherever there is a free space in the sequencing.

The rest of the world uses ICD-10. In fact, the rest of the world is getting ready to move to ICD-11. The US needs to not only catch up, we need to realize that sharing and comparing data with other countries yields better quality of care with increased clinical efficiency and improved outcomes.

The additional codes provided by ICD-10 afford another degree of specificity that will reduce claims processing costs by reducing recurrent requests for information during the billing process. Of course, there is the flip side: documentation will continue to be a challenge. For example, a physician may know specific information about a patient but not write it down, even though the additional documentation will help with outcome assessments and quality of care indicators. It’s up to the provider, but wouldn’t they want to show how their care provides exceptional patient outcomes?

Let’s proceed with some caution. Do not let this latest AMA decision stop or even slow the implementation of ICD- 10 within your organization. It seems that a better solution would be for the AMA to get back on the train and determine how to they can improve the transition process rather than try to derail it.

Change is never easy, but let’s not be in the same position another two years down the road and have déjà vu “all over again.”

M. Christine Kalish MBA, CMPE
Executive Consultant, Beacon Partners

The views and opinions expressed in this blog are mine personally and are not necessarily representative of Beacon Partners, its management, employees or its subsidiaries.

Stage 1 – “more, but not most” hospitals ready for Meaningful Use (MU) requirements, according to HIMSS study!

A recent Healthcare Information and Management Systems Society (HIMSS) study showed that more, but not most, hospitals are ready to meet MU for Stage 1 requirements. The study, involving 778 hospitals from February 1 to September 30, 2011, showed that only 10% of the hospitals were able to meet all core and menu set requirements. An additional 31% indicated that they were “most likely” to meet the objectives for Stage 1 of the program.

HIMSS also cited the Center for Medicare and Medicaid Services (CMS) data that 2,215 hospitals have registered, but only 158 hospitals have taken the final step and attested to MU and have been paid under the Medicare program. Another 400 hospitals have been paid under various state-run Medicaid programs. The state-run programs do not require MU attestation in the first year of payment, as they permit Adopt, Implement and Upgrade (AIU). Overall, CMS has reported payments of nearly $800 million as of September 30, 2011, down from their target of $2 billion in the same time period.

So, overall – are you “more” or “most” – or when will you be?

Kevin R. Burchill, Esq., FACHE
Director, Beacon Partners

The views and opinions expressed in this blog are mine personally and are not necessarily representative of Beacon Partners, its management, employees or its subsidiaries.

Higher Re-Admissions Rates Reported in Massachusetts

The Boston Business Journal (BBJ) recently reported that only 12 states in the country have a worse “30-day re-admission rate” than Massachusetts for Medicare patients. The overall 16.4% rate ties Massachusetts with Arkansas in the bottom tier of performers, “despite the high concentration of top academic medical centers here” according to the BBJ.

Hospital re-admissions have received increased levels of scrutiny due to federal and state payment penalties when associated benchmarks are not met. Therefore, a key quality measure is “underperforming” in Massachusetts, and federal payment reforms are set to begin in 2013 if improvements are not made. Additionally, state payment reform began on October 1st; this report is based on 2009 data, and there has been no statistical improvement since this data was initially reported back in 2004.

What are the penalties?  The federal reform is a 1% reduction to Medicare reimbursement in 2013, a 2% reduction by 2014 and a 3% reduction for 2015 excessive re-admissions. The list published by BBJ is a “who’s-who” of top-tier AMCs in Massachusetts and was broken down by medical and surgical re-admissions. This analysis was based on research completed by the Dartmouth Institute for Health Policy and Clinical Practice. The Dartmouth study also notes that “high readmission rates sometimes indicate that patients have nowhere else to go, because other community health care resources are not available, or may not be reimbursed by insurers.”

Payment reform is coming nationally and fast. Electronic Medical Records (EMRs) and evidence-based medicine approaches will help you to better understand your quality reporting now and any improvements that you can make in the clinical practices before financial penalties come into play. Massachusetts is leading the way with state Medicaid penalties beginning in October 2011.

Kevin R. Burchill, Esq., FACHE
Director, Beacon Partners

The views and opinions expressed in this blog are mine personally and are not necessarily representative of Beacon Partners, its management, employees or its subsidiaries.

Medicaid

Accountable Care Organizations – Final Regulations Released (42 CFR Part 425)

The Medicare Shared Savings Program (aka. ACOs) final rules were released on 10/20/2011 with much fanfare.  All 696 pages of them!  And for the sake of completeness, IRS (Notice 2011-20, 7 pages), OIG (42 CFR Chapter IV, 83 pages) and FTC/DOJ (Statement of Antitrust Enforcement Policy Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program, 18 pages) companion regulations/rules came out on the same day.  Since the proposed rules on 3/31/2011, the federal agencies have incorporated many changes based upon the industry outcry. “Prescriptive” was the word often used to describe the approach to this aspect of healthcare reform.

Here are some highlights of the changes from proposed to final rule:

1. Remove two-sided risk from Track 1. Two tracks would still be offered for ACOs at different levels of readiness, with one providing higher sharing rates for ACOs willing to also share in losses. (Risk Sharing)
2. A preliminary prospective-assignment method with beneficiaries identified quarterly; final reconciliation after each performance year based on patients served by the ACO. (Patient Assignment)
3. 33 measures in four domains. (Note: Claims-based measures not finalized to be used for ACO-monitoring purposes). Longer phase-in measures over course of agreement: first year, pay for reporting; second year and third year, pay for reporting and performance. (Quality Reviews)
4. Share on first dollar for all ACOs in both models once minimum savings rate has been achieved. (Shared Savings)
5. Program established by January 1, 2012; first round of applications are due in early 2012. First ACO agreements start 4/1/2012 and 7/1/2012. ACOs will have agreements with a first performance “year” of 18 or 21 months.  ACOs starting 4/1/2012 and 7/1/2012 have option for an interim payment if they report CY 2012 quality measures. ACO must report quality measures for CY 2013 to qualify for first-performance year shared savings. (Start Date)

ACOs, the shift from volume to value, are no longer “mythical creatures”.

Kevin R. Burchill, Esq., FACHE
Director, Beacon Partners

The views and opinions expressed in this blog are mine personally and are not necessarily representative of Beacon Partners, its management, employees or its subsidiaries.

ACOs and their potential impact on world-recognized specialty services

In a recent opinion piece in the Boston Business Journal titled, “Healthcare Cannot be One Size Fits All”, Josh Archambault and Dan Winslow discuss the impact of “Obamacare” and Governor Patrick’s Phase II healthcare reform on Boston Children’s Hospital. Citing Children’s as the top pediatric hospital according to the recently published US News and World Report, the article questioned payment reform’s impact on the “world-class medical facility”.

Archambault is the Director of Health Care Policy at The Pioneer Institute. Winslow represents the 9th Norfolk District in Massachusetts’ House of Representatives.

Citing facts, such as 90% of Children’s business is pediatrics and Children’s is the third largest provider of patients on public insurance in Massachusetts, as well as public insurance rates being only 60% of reimbursement levels for managed care plans, Archambault and Winslow caution policy makers when it comes to forcing providers into ACOs or other bundled payment models. Describing ACOs as buying “a car from the dealership”, rather than “different parts yourself”, the authors postulate whether ACOs “designed for the grandparents” will also become “good for their grandkids”. They argue that healthcare reform should “promote innovation and coordination” and not just be based on “force”.

Still, the federal rules have yet to be finalized, the federal challenges have yet to be heard by the Supreme Court, and the states continue to march ahead – including Gov. Patrick in the Commonwealth of Massachusetts.

Kevin R. Burchill, Esq., FACHE
Director, Beacon Partners

The views and opinions expressed in this blog are mine personally and are not necessarily representative of Beacon Partners, its management, employees or its subsidiaries.

“To wait or not to wait...”: Stage 1 decisions still up in the air!

As the Federal Fiscal Year (FFY) approaches, several important Stage 1 and Stage 2 decision points remain unresolved. In a recent ModernHealthcare.com posting on their Healthcare Business News, Joe Conn posed the caption above as a question for providers – to wait or not to wait?

FFY11 is all but done, and FFY12 opens October 1st. Hospitals that began counting their 90 days before July 3rd can attest now, or up to 60 days after the close of FFY11. Eligible professionals (EPs) have until October 3rd to begin their 90-day count before filing by Calendar Year (CY) end, with up to a 60-day period to file thereafter. So, this will mark the end of Stage 1, right?

Well, not so fast. The Stage 2 timing is still up in the air with the HIT Policy Committee’s suggestion to “delay” Stage 2 for up to one year. Their reasoning is to allow providers, hospitals and vendors to better plan and implement the Stage 2 recommendations — not expected to be finalized until summer 2012.  While the ONC Chair has said things like, “We agree with the logic” [to delay], the final decision rests with CMS.  In a recent webinar, CMS was said to be “very vocal” that the timetable will remain unchanged.

With that, hospitals and providers have been paid hundreds of millions of dollars under both Medicare and Medicaid, and despite the fact that many auditors have yet to decide how to recognize the revenue and/or apply cost accounting for the IT specific depreciation line item, hospitals and providers continue to advance patient safety and quality care reporting under this Meaningful Use legislation.

Kevin R. Burchill, Esq., FACHE
Director, Beacon Partners

The views and opinions expressed in this blog are mine personally and are not necessarily representative of Beacon Partners, its management, employees or its subsidiaries.

“Medical Makeover”

A recent story in the Boston Business Journal discussed hospitals turning to outpatient services to offset cuts to inpatient care. Sound familiar at your organization?

By pulling information from the Commonwealth’s Division of Health Care Finance and Policy, BBJ was able to quantify the shift away from more costly inpatient services to Net Patient Services Revenue (NPSR) focused on outpatient, or ambulatory care.
 
Not surprisingly, leading the way with the “biggest swing” to outpatient revenue was Partners Healthcare at one of their flagship facilities, Brigham and Women’s Hospital (BWH). BWH’s outpatient revenue climbed 29% to $663.6M in Fiscal Year 2010 (FY2010). At the same time, their inpatient revenue dropped 11% to $877.8M. 

BBJ cites the national healthcare reform effort to cut overall Medicare expenditures between $166 - $177B over the next 10 years as part of the driver for this shift. Along with the potential cuts stemming from the Congressional Joint Committee that was recently convened to redress the “debt crisis”, the move to lower-cost care has been seen in other systems, including safety-net provider like Cambridge Health Alliance and market dominant players like UMass Memorial Medical Center.

To quote Stuart Altman, Professor of Health Policy at Brandeis University, “outpatient is now the name of the game. The bigger institutions have a conscious strategy to expand their networks, and they are also doing more outpatient services in their hospitals.” Altman goes on to caution that shifting more care to outpatient settings may not necessarily achieve real savings for the healthcare system, as many of the players maintain the ability to “command high prices” for their services.

So, how is your outpatient or ambulatory strategy going? Are your physicians aligned with care to your facility, or are they focused on their own ancillary services? Important decisions lie ahead for many organizations as alignment and connectivity considerations will be precursor points before bundled payments.

Kevin R. Burchill, Esq., FACHE
Director, Beacon Partners

The views and opinions expressed in this blog are mine personally and are not necessarily representative of Beacon Partners, its management, employees or its subsidiaries.

Severable – an understanding is vital to federal cases involving “ObamaCare”

West's Encyclopedia of American Law, second edition, defines “severable” as “that which is capable of being separated from other things to which it is joined and maintaining nonetheless a complete and independent existence. The term “severable” is also used in connection with statutes. A severable statute is one that after an invalid portion of it has been stricken remains self-sustaining and capable of separate enforcement without regard to the stricken provisions, according to West.

OK?

So, “individual mandates” were recently ruled unconstitutional by the eleventh Circuit Court of Appeals in Atlanta in a 304-page opinion. This decision involved 26 states that had joined the lawsuit that challenged the expansion of federal power. The ruling allowed the rest of the Patient Protection and Affordable Care Act (PPACA) to stand, however. Thus, the eleventh circuit was able to “sever” the individual mandate provision from the rest of law. The majority wrote, “…[what] Congress cannot do under the Commerce Clause is mandate that individuals enter into contracts with private insurance companies for the purchase of an expensive product from the time they were born until the time they die.”

Or can they?

Back in June, the sixth Circuit Court of Appeals ruled that the law was entirely constitutional.

And the fourth Circuit Court of Appeals in Richmond has not ruled on two different lawsuits challenging the healthcare reform law heard back in May 2011.

A trip to the highest court in the land appears to be in order – but they are on recess until October.

Please stay tuned!

Kevin R. Burchill, Esq., FACHE
Director, Beacon Partners

The views and opinions expressed in this blog are mine personally and are not necessarily representative of Beacon Partners, its management, employees or its subsidiaries.

Modern Healthcare turns 35

The special anniversary issue of Modern Healthcare, dated July 25, 2011 (and sent out as a supplement), is worth a read, or at least a perusal. It contains a section on market profiles, as well as a piece on the future of healthcare.

The market profiles are based on the largest metropolitan statistical areas (MSAs) in the US. They are worth a look. Particularly interesting are the market-by-market discussions of important drivers to reform healthcare and relevant efforts to improve quality of care. Not surprisingly, each market is different.

So why then would we continue down a path of one-size-fits-all healthcare reform and not consider a state-by state solution to local healthcare needs?

NYC, LA, Chicago, DFW, Philly, Houston, DC, Miami, ATL and Boston are the top 10 MSAs in this piece, and each of these articles talks about unique marketplace challenges being addressed locally. While there are similar themes, like access to capital, reimbursement rates, uncompensated care and healthcare worker shortages, each MSA in this article is tackling diverse issues. And the small and rural segment of the healthcare marketplace not featured in this section of the supplement by MH has yet another level of issues to face on behalf of local communities.

Happy anniversary to MH. Keep up your efforts to sharpen the national debate, while maintaining a local focus to healthcare topics.

Kevin R. Burchill, Esq., FACHE
Director, Beacon Partners

The views and opinions expressed in this blog are mine personally and are not necessarily representative of Beacon Partners, its management, employees or its subsidiaries.