The Daily Briefing

News for Health Care Executives

How CMS’s prepayment review will impact demand for CV services

December 20, 2011

Brian Maher, Cardiovascular Roundtable

The success of Medicare Recovery Audit Contractors (RACs) in reducing improper payments for unwarranted services is spurring the advancement of new strategies to further curb potential fraud, abuse, and payment errors among Medicare providers.  While RACs have recouped an estimated $800 million in over-payments in FY 2011, more aggressive goals of recovering $2 billion in improper payments and reducing spending for overall payment errors (including fraud and abuse) by $50 billion are set for 2012.

As reported in the Dec. 6 Daily BriefingCMS announced the Recovery Audit Prepayment Review demonstration project to help achieve these goals. Scheduled to begin Jan. 1, 2012, RACs will be allowed to conduct prepayment reviews for submitted claims to determine medical necessity, and subsequently, eligibility for reimbursement.  The Recovery Audit Prepayment Review demonstration will span 11 states: seven with populations of providers more prone to fraud and error (FL, CA, MI, TX, NY, LA, IL), and four with high volumes of short-stay inpatient cases (PA, OH, NC, and MO).
The new demonstration project represents an adjunctive process from current RAC activity, which reviews medical necessity and payment accuracy retrospectively, following payment for the furnished service.  As such, the demonstration will serve to expedite medical necessity reviews by RACs while also reducing the administrative burden associated with current “pay and chase” practice among the RACs.

All eyes on Florida (for now)
While the exact mechanisms for how CMS’s program will be rolled out have not yet been defined, a related (though separate and distinct) initiative spearheaded by the Florida Medicare Administrative Contractor (MAC) may portend a substantial burden ahead for cardiovascular programs if followed by CMS.  Given the shortcomings of existing payment integrity and error rate improvement efforts, First Coast Services Options is initiating prepayment reviews for 15 high-volume inpatient MS-DRGs, with the goal of reviewing 100% of selected DRGs for appropriateness before paying the claims.  Of the 15 MS-DRGs, 11 are related to cardiovascular services.

The following table details 2010 Medicare national payment rates and estimated contribution profits for the 11 cardiovascular-related MS-DRGs subject to prepayment review by the Florida MAC:

The financial profile of these services will be of great interest to cardiovascular programs (both within and outside of Florida).  Overall, these 11 services represent approximately 24 percent of all volume, 28 percent of total revenue, and 28 percent of total contribution profit for cardiac services, based upon analysis of 2010 national Medicare inpatient claims.

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Which hospitals have the highest readmissions risk?

Analysis: Low-income patient populations linked to higher rehospitalizations

December 20, 2011

Is your hospital's patient population increasing your readmissions risk? Kaiser Health News/Washington Post this week found that hospitals with the most low-income patients are nearly three times as likely to report high congestive heart failure (CHF) readmission rates as other hospitals.

Analysis: How high-risk patients affect readmissions

For the analysis, studied 30-day CHF readmission rates at 3,119 U.S. hospitals from July 2007 to June 2010 using CMS's Hospital Compare website. The site notes whether a hospital's CHF readmission rates are above average, average, or below average, compared with the national rate.

KHN/Post compared those ratings to each hospital's CMS Disproportionate Share Hospital index, which is based on the proportion of admitted patients who qualify for Medicaid or for Medicare's Supplemental Security Income benefit. 

According to the findings, 11.7% of the hospitals that treated the greatest share of low-income patients were ranked by Medicare as having worse rehospitalization rates than the national average. In comparison, only 4.3% of remaining hospitals reported higher-than-average rates. Overall, the "Most Poor Patients" hospitals were 2.7 times as likely to have high readmission rates as hospitals with a smaller proportion of low-income patients.

Experts concerned about impact of new payment models

Health experts say many of the hospitals that treat low-income patients already operate on tight margins, noting that upcoming penalties for readmissions may further impede their ability to provide quality care.

Under the federal health reform law, CMS in October will begin penalizing hospitals with high readmission rates for myocardial infarction, CHF, and pneumonia patients. By 2014, up to 3% of Medicare reimbursement will depend on readmission rates.

Although CMS Chief Medical Officer Patrick Conway acknowledges the concerns for safety-net hospitals, he says the agency is committed to enforcing the penalties because they encourage hospitals to coordinate follow-up patient care.

According to KHN/Post, poor post-discharge care is a common culprit for high rehospitalization rates because low-income patients may face language or literacy barriers or cannot afford medications and healthful foods.

Hospitals improve post-discharge care to bring down readmissions

In an effort to reduce readmissions, many hospitals that treat large low-income populations are bolstering post-discharge care programs. "We all know there are so many opportunities for hospitals to do better," says Yale School of Medicine cardiologist Harlan Krumholz, adding, "Just saying, 'It's not our fault' and saying, 'It's the patient's fault' is not the right approach."

For example, social workers at Mount Sinai Hospital in New York now accompany illiterate patients to the grocery store to highlight healthy foods. Meanwhile, a physician at Washington, D.C.-based Howard University Hospital requires high-risk patients to visit his office daily so he can monitor their progress and checks whether drugs are covered by insurance prior to prescribing them (Rau [1], KHN/Post, 12/19; Rau [2], KHN/Post, 12/19).

IBM's Watson to work at California hospital

Physicians at Cedars-Sinai will be first to use supercomputer

December 20, 2011

Physicians at Los Angeles-based Cedars-Sinai Medical Center will use IBM's Watson supercomputer system to help diagnose medical conditions and select treatments, the Los Angeles Times reports.

In September, health insurance company WellPoint announced an agreement to use Watson to create a commercial application aimed at benefiting the insurer's 34.2 million members. The application will combine data from:

  • WellPoint's existing history of medicines and treatments;
  • Watson's expansive library of textbooks and medical journals; and
  • Patients' charts or electronic health records.

The computer system will sift through all the data and answer a question within moments, providing possible diagnoses or treatments ranked in order by the computer's confidence

Cedars-Sinai project
Physicians at the Samuel Oschin Comprehensive Cancer Institute at Cedars-Sinai will be the first medical providers to use the technology, according to IBM. The company said the physicians will recommend fixes to the system. WellPoint is funding the project.

William Audeh, head of the Oschin institute, said, "I don't see Watson taking the place of a doctor, but I do see it acting as a super library for a doctor" (Lopez, Los Angeles Times, 12/17).

How effective are surgical checklists?

Study finds they are effective, but 'far from perfect'

December 20, 2011

Although surgical checklists have been shown to reduce patient mortality rates, a recent study in the Annals of Surgery suggests that they may have a more modest effect than previously reported.

About 100,000 hospitals worldwide have implemented the World Health Organization's surgical safety checklist containing 19 items that surgical teams should check before and after a patient's procedure, such as verifying a patient's identity and ensuring they operate on the right side of the body.

A 2009 study of eight hospitals in different countries found that the facilities' overall surgical patient mortality rate declined from 1.5% to 0.8% in the year after they adopted the checklist. However, recent data from researchers at Netherlands-based University Medical Center Utrecht found a much smaller effect in the 18 months after the hospital adopted the checklist: the surgical patient mortality rate dropped from 3.1% to 2.8%.

"Mortality was strongly associated with checklist compliance, suggesting that large variations in the level of implementation for different groups of patients need to be reduced," the authors wrote. They noted that surgical teams were less likely to complete the checklist for critical patients needing emergency surgery (Reuters, 12/18).

Supreme Court slates health law arguments for late March

Schedule reinforces likely June verdict

December 20, 2011

The U.S. Supreme Court on Monday announced its schedule for oral arguments to determine the constitutionality of the federal health reform law, devoting a record five- and-a-half hours to the case from March 26 to March 28.

On March 26, the high court will hear one hour of arguments on whether courts have the authority under the Anti-Injunction Act to rule on the individual mandate before 2014, when the individual mandate takes effect and most U.S. residents could face penalties for failing to obtain health insurance.

On March 27, the justices will hear arguments on the constitutionality of the individual mandate for two hours. Finally, the justices on March 28 will hear 90 minutes of debate on the issue of severability, or whether striking down the individual mandate means invalidating the entire law. The justices also will hear arguments regarding the legality of the Medicaid expansion under the overhaul.

Observers say the schedule further suggests that the court will issue a ruling on the overhaul in June (Liptak, "The Caucus," New York Times, 12/19; Baker, "Healthwatch," The Hill, 12/19; AP/Washington Post, 12/19).

Nurse work environments safer, but stress still top concern

ANA survey: Education key to changing workplace culture

December 20, 2011

A recent American Nurses Association survey found that RN work environments are safer than a decade ago, but nurses' top three concerns remain the same:

  • Stress and overwork;
  • Musculoskeletal injury; and
  • Catching an infection.

According to the group's 2011 Health and Safety Survey—which included 4,614 RNs—more hospitals now provide patient lifting equipment and needles with safety devices, and fewer nurses are physically and verbally abused on-the-job.

However, 80% of respondents said they continue to work despite frequent neck, back, or shoulder pain, and 13% reported three or more on-the-job injuries within a year—up from 7% in 2001. Meanwhile, typical shift lengths have increased, with 56% of respondents reporting that a normal shift lasts 10 or more hours, compared with 48% in 2001. However, 55% of RNs said they worked 40 hours per week or more, down from 64% in 2001.

Although the survey indicates a trend toward healthier work environments, the survey said RNs could benefit from increased education and changes in workplace culture. For example, less than one-third of RNs said they used patient lifting equipment—despite their high availability—suggesting a need for evaluation of device placement, according to the survey. In addition, 62% do not know that under federal law RNs must participate in identifying and selecting safer needle devices.

ANA noted that safe work environments are crucial to maintaining an adequate nursing workforce. About 60% of RNs surveyed said safety concerns and stressful working conditions influence their decision to continue practicing in the nursing field (, 12/15; ANA release, 12/14). 

Nearly one-third of dialysis centers face penalties under VBP

CMS issues first results of program

December 20, 2011

More than 30% of dialysis facilities will receive a reduction in Medicare payments in 2012 under a value-based purchasing (VBP) program for end-stage renal disease (ESRD) patients, Modern Healthcare reports.

Last week, CMS released the first results for the ESRD Quality Incentive Program (QIP), which evaluates dialysis facilities based on a set of quality measures for key areas of dialysis care, such as anemia management and dialysis adequacy. The facilities that do not meet performance standards receive reduced Medicare payments for dialysis services the following year under the ESRD Prospective Payment System.

According to the results, 69.1% of facilities will receive no reduction under the QIP. Among those receiving cuts, 16.6% of 4,939 facilities will receive a 0.5% reduction, 6% will receive a 1% cut, 7.7% will receive a 1.5% cut, and 0.6% will receive a 2% reduction.

Overall, dialysis facilities paid under the program are expected to have a 2.1% increase in Medicare payment rates in 2012, which CMS said totals about $8.3 billion (Barr, Modern Healthcare, 12/15 [subscription required]; CMS results release, 12/15).

After 50 years of ibuprofen, do we rely on it too much?

BBC examines how ibuprofen has changed physician-patient relations

December 20, 2011

As ibuprofen turns 50, BBC News examines its role as one of the three medications that people keep close at hand, noting that the drug in some cases has hindered physician-patient relationships. 

Created in Nottingham, England, in 1961, ibuprofen has "become a bedrock of pain relief and fever treatment all over the world," joined by aspirin and acetaminophen to form a "special trinity" of drugs that patients use for self-medication, BBC News reports.

However, these drugs "leave[s] us as our own doctors," which ultimately could undermine patient care, BBC News notes. According to physician and medical columnist Thomas Stuttaford, ibuprofen can have more side effects—like renal damage—than many people realize. In addition, some patients use ibuprofen as a medical crutch instead of making important lifestyle changes to alleviate pain.

Stuttaford notes that shorter office visits may encourage physicians to prescribe ibuprofen and patients to skip the doctor and go straight to the pharmacy. "Although we have a much bigger armory in dealing with health problems, people no longer have a personal relationship with their [primary care physician]," he says. "They don't know their history, they don't know their mothers and fathers."

Despite these potential pitfalls, BBC News notes that scientists continue to discover possible new uses for the drug. For example, recent studies have shown that low doses of ibuprofen over time may prevent Alzheimer's disease and Parkinson's disease (Jinkinson, BBC News, 12/14).

HHS names 32 Pioneer ACOs

Program offers financial upside for first movers

December 19, 2011

HHS on Monday announced that 32 health care organizations will participate in the Pioneer ACO program, which is designed to reward early adopters of coordinated care models.

According to an HHS news release, the program—which is administered by the CMS Center for Medicare and Medicaid Innovation—aims to foster collaboration among primary care physicians, hospitals, and other health care professionals to improve care for Medicare patients. The department estimates that it could save $1.1 billion across five years.

Specifically, the initiative will test the effectiveness of innovative payment models and how they help organizations improve care quality, reduce costs, and coordinate services with private payers. The first performance period will begin on Jan. 1, 2012.

The 32 Pioneer ACOs underwent a rigorous evaluation—including a comprehensive review of applications and in-person interviews—and represent 18 states and various types of health care organizations, including physician-led organizations and health systems, and urban and rural organizations.

HHS received more than 80 applicants for the program, and the selected organizations include:

  • Allina Hospitals & Clinics
  • Atrius Health Services
  • Banner Health Network
  • Bellin-Thedacare Healthcare Partners
  • Beth Israel Deaconess Physician Organization
  • Bronx Accountable Healthcare Network
  • Brown & Toland Physicians
  • Dartmouth-Hitchcock ACO
  • Eastern Maine Healthcare System
  • Fairview Health Systems
  • Franciscan Health System
  • Genesys PHO
  • Healthcare Partners Medical Group
  • Healthcare Partners of Nevada
  • Heritage California ACO
  • JSA Medical Group, a division of HealthCare Partners
  • Michigan Pioneer ACO
  • Monarch Healthcare
  • Mount Auburn Cambridge Independent Practice Association
  • North Texas Specialty Physicians
  • OSF Healthcare System
  • Park Nicollet Health Services
  • Partners Healthcare
  • Physician Health Partners
  • Presbyterian Healthcare Services–Central New Mexico Pioneer Accountable Care Organization
  • Primecare Medical Network
  • Renaissance Medical Management Company
  • Seton Health Alliance
  • Sharp Healthcare System
  • Steward Health Care System
  • TriHealth, Inc.
  • University of Michigan

According to HHS Secretary Kathleen Sebelius, "pioneer ACOs are leaders in our work to provide better care and reduce health care costs." She added, "we are excited that so many innovative systems are participating in this exciting initiative—and there are many other ways that health care providers can get involved and help improve care for patients" (HHS release, 12/19; Zigmond, Modern Healthcare, 12/19 [subscription required]).

Sneak peek of '2011 in Review': Big strikes underscore increased union activity

December 20, 2011

  • Which stories shook up health care in 2011? Stay tuned for the Daily Briefing's Year in Review, which will run in full on Thursday, Dec. 22.

Cassandra Blohowiak, Editor

Labor unions grabbed the headlines again in 2011, after nursing unions in multiple states staged historic strikes and others posted big wins at major hospitals.

Since the recession began, hospitals coast-to-coast—like in the District of Columbia, and Minnesota, and Pennsylvania—have been rocked by labor disputes, and 2011 was no different. For example, more than 23,000 nurses in September picketed at 34 Kaiser Permanente and Sutter Health hospitals—the largest nursing strike in U.S. history.

In December, more than 6,000 RNs represented by the New York State Nurses Association said they were preparing to strike at Mount Sinai, Montefiore Medical Center, and St. Luke's Roosevelt Hospital Center in New York City. Roughly 6,000 nurses represented by the California Nurses Association (CNA) also said they planned to strike on Dec. 22 at roughly 10 California hospitals. 

Unions post big election gains
Meanwhile, health care labor unions have been investing to quickly expand. Department of Labor data show that the CNA increased its spending from $15 million in 2000 to $61 million in 2009.

Unions also have been continuing to win hundreds of elections. Altogther, health care unions in 2010 held 264 elections and won 71% of them. That pace slowed in 2011, as health care unions only held 85 elections across the first half of the year, but they also won 75% of them, according to a report from IRI Consultants and the American Hospital Association.

For example, nearly 10,000 Service Employees International Union (SEIU) workers at 19 Florida-based HCA hospitals approved "landmark agreements" in early December. The contracts included provisions that remove salary caps and create labor-management committees, which will discuss hospital issues like staffing levels and patient safety.

Will unions keep pace in 2012?
The uptick in activity at the end of 2011 suggests that unions will continue waging public battles with hospitals in the New Year. Another factor that could affect activity: the National Labor Relations Board recently approved a revised rule that could accelerate union elections, which experts say could bolster their efforts to organize new members.

Will your leaders have first-hand knowledge of national policy making?

December 20, 2011

Participants in the Advisory Board Fellowship will visit Capitol Hill to attend expert briefings with policymakers and see how policy impacts the way health care is delivered to individual patients.  Learn how to become or nominate a fellow.


Daily roundup: Dec. 20, 2011

Bite-sized hospital and health industry news

December 20, 2011

  • California: The "doctoring program" at University of California-Davis' medical school is designed to improve physician-patient communication and provide students with guidance to  make good clinical and ethical decisions, Capital Public Radio reports. Professor Michael Wilkes leads the program, which is modeled after a similar program that Wilkes started 20 years ago at the University of California-Los Angeles. Wilkes said the program aims to encourage future physicians to pay closer attention to medical costs, preventive services, and patient-focused care (Bartolone, "KXJZ News," Capital Public Radio, 12/15).
  • Hawaii: Honolulu-based Hawaii Medical Center plans to shut down two of its Oahu hospitals within the next month, Modern Healthcare reports. In June, the medical center filed for bankruptcy. It decided to close the two facilities after failing to reach an acquisition agreement with Ontario, Calif.-based Prime Healthcare Services (Zigmond, Modern Healthcare, 12/18 [subscription required]).
  • Pennsylvania: Fox Chase Cancer Center in Philadelphia has agreed to affiliate with Temple University Health System. The move is designed to expand Fox Chase's outpatient and surgical services at its current facilities and at a Temple affiliate. The deal also creates a 47.5-acre hub for cancer care and research innovation (Barr, Modern Healthcare, 12/18 [subscription required]).
  • Wisconsin: Although southeastern Wisconsin once featured some of the country's most expensive hospitals, a new study from the Greater Milwaukee Business Foundation on Health finds that the area's hospitals raised rates for commercial insurance plans at a slower rate than the rest of the country between 2003 and 2010. At the same time, operating costs at Wisconsin hospitals increased less on average than the national benchmark. A separate study found that average commercial premiums in the region were only 8% higher than in other Midwest cities in 2010, down from 55% higher in 2000. "It shows the hospitals and medical community are definitely working to reduce costs," says Ron Dix, the foundation's executive director (Boulton, Milwaukee Journal Sentinel, 12/14).

Cancer patients wary of virtual consultations

Few breast cancer survivors believe that online or phone consultations with a physician or nurse would alleviate their cancer-related stress, according to a study in the Journal of Clinical Oncology.

For the study, researchers from the Dana-Farber Cancer Institute in Boston asked 218 breast cancer survivors how comfortable they would feel receiving follow-up care by visiting an oncologist, visiting a primary care physician (PCP), visiting a nurse practitioner, or consulting with a physician or nurse over the phone or Internet.

Survey respondents said in-person visits with an oncologist would be the most likely to reduce their worries about cancer and 80% of respondents said they believed such appointments would increase their chances of survival. Meanwhile, more than half of respondents said in-person visits with a PCP or a nurse practitioner would reduce their cancer worries and increase their chances of survival.

However, the study found that only 20% of respondents said virtual consultations over the phone or Internet would improve their chances of survival. Moreover, only 12% of respondents said virtual consultations would reduce their cancer-related stress. Some respondents even said virtual visits would increase their stress and reduce their chances of survival.

According to study co-author Erica Mayer, respondents may have been wary of virtual visits because the survey was brief and did not fully explain what a virtual consultation would entail (Pittman, Reuters, 12/15).