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Understanding Risk Adjustment and the Hierarchical Condition Categories Methodology

June 30, 2016


Risk Adjustment (RA) and Hierarchical Condition Category (HCC) coding is a payment model mandated by the Balanced Budget Act of 1997 (BBA) and implemented by the Centers for Medicare and Medicaid Services (CMS).  The RA program allows CMS to pay plans for the risk of the beneficiaries they enroll, instead of an average amount for Medicare beneficiaries.  By risk adjusting plan payments, CMS is able to make appropriate and accurate payments for enrollees with differences in expected costs.  RA is used to make payments based on the health status and demographic characteristics of an enrollee.  Risk scores measure individual beneficiaries’ relative risk and they are used to adjust payments for each beneficiary’s expected expenditures.  By risk adjusting plan bids, CMS is able to use standardized bids as base payments to plans.


DOJ and NC Attorney General File Antitrust Suit Challenging Anti-Steering Restrictions

June 22, 2016


Healthcare costs in the United States (U.S.) are rising faster than the rate of inflation.  Since 2009, healthcare inflation has outpaced the Consumer Price Index by as much as 3.5 percent in a single year.1  The cost of providing care is skyrocketing.  Providers and payers need to look for ways to reduce costs so our healthcare system can continue to provide quality care.


OIG Views Favorably Arrangements Aimed at Assisting Patients with Financial Obligations

June 15, 2016


The Office of the Inspector General (OIG) has issued a pair of Advisory Opinions that could impact non-profit organizations that want to help patients pay for treatment.  In the Opinions, 15-16 and 15-17, the OIG views favorably non-profit organizations seeking to financially assist patients with their out-of-pocket expenses associated with the prescription drugs required to treat certain diseases.  At a time when all healthcare arrangements are heavily scrutinized by government regulators, the positions the OIG takes in these Advisory Opinions are consistent with previous positions taken by the OIG on such arrangements, though nonetheless welcomed positions allowing organizations to provide patients with the financial assistance they need.


Boomer Healthcare 101

June 8, 2016


By 2030, one in five Americans will be a senior citizen, nearly double the 12 percent in 2000, according to The State of Aging and Health in America, a 2013 special report from the U.S. Centers for Disease Control and Prevention (CDC).  By 2029, when the last round of boomers reaches retirement age, the number of Americans 65 or older will climb to more than 71 million, up from about 41 million in 2011, a 73 percent increase, according to Census Bureau estimates.  Not only are there more seniors, they’re also living longer.  In the past century, life expectancy has increased by nearly 30 years.


Patients’ Ability to Shop for Services Has a Modest Effect on Healthcare Spending

June 1, 2016


If patients know the prices that various providers of healthcare services will charge, they will shop for the best value and in the process drive prices down.  That assumption underlies the numerous governmental and health system efforts to deliver price transparency seen over the last few years.  Is the assumption valid?


Buy Versus Build or Both?

May 25, 2016

Lately, technology security has taken center stage as health organizations face increased challenges of maintaining the security of patient health information.  While securing data is of concern, determining the most applicable and cost-efficient technology is the most important priority.


Addressing Hospital Readmissions with Diverse Patient Populations

The Centers for Medicare and Medicaid Services (CMS) recently released guidance to assist hospitals in decreasing the number of avoidable readmissions among racially and ethnically diverse Medicare beneficiaries.


HIPAA Audit Program—Phase 2

May 11, 2016


The Health Information Technology for Economic and Clinical Health Act (HITECH) requires the HHS Office for Civil Rights (OCR) to conduct periodic audits of covered entity and business associate compliance with the HIPAA Privacy, Security and Breach Notification Rules. In 2011 and 2012, OCR implemented a pilot audit program (Phase 1) to assess the controls and processes implemented by 115 covered entities to comply with HIPAA’s requirements.


MACRA and the Medicare Payment Reform Juggernaut

April 27, 2016

More Changes Coming to Healthcare Delivery


Healthcare Price Variation is Alive and Well

May 4, 2016


It is no secret that the cost of healthcare services varies greatly between geographic regions.  A major new study from the Health Care Cost Institute (HCCI),  National Chartbook of Health Care Prices, examined price variation for 242 common medical services across 41 states and the District of Columbia and found a two- to threefold difference.  The graph below, from the accompanying article by David Newman et al. (Prices for Common Medical Services Vary Substantially among the Commercially Insured) in the April 2016 issue of Health Affairs, shows the variation among average prices in the 41 states and D.C. when each is compared to a national index figure of 1.00:


CMS Proposes Eliminating Payment Reduction Under Two-Midnight Rule

April 20, 2016


After much pushback from industry stakeholders and from the judicial system, the Centers for Medicare and Medicaid Services (CMS) propose to eliminate the notorious payment reduction under the Two-Midnight Rule in its FY 2017 Medicare Inpatient Prospective Payment System (IPPS) Proposed Rule (Proposed Rule).  Though not slated to be finalized until the latter part of 2016, hospitals can be optimistic that the penalty under the Two-Midnight Rule may soon be a memory.


Changing Demographics in our Physician Workforce Supply, Demand and Assessment

April 13, 2016


According to a new report from the American Association of Medical Colleges (AAMC), the U.S. faces a shortage of physicians ranging between 61,700 and 94,700 over the next decade.  This report includes updated supply and demand data and refined medical school graduate data, and fully integrates the effects of the growing ranks of physician assistants.


Ransomware is a Serious Threat to Healthcare Systems

April 6, 2016


A few months ago most of us were blissfully unfamiliar with the word “ransomware.”  Now, after several large healthcare systems have been the victims of attacks, we are seeing and hearing the word everywhere.  Every provider that stores information on computers that can access the Internet should consider how best to protect itself against this type of malware.


Ready or Not Here They Come – The OCR HIPAA Phase Two Audits

March 30, 2016


The U.S. Department of Health & Human Services (HHS) Office for Civil Rights (OCR) announced the beginning of the 2016 Phase Two Health Insurance Portability and Accountability Act (HIPAA) Audit Program.  This program is designed to evaluate the compliance efforts of covered entities and their business associates (BA) with the HIPAA Privacy, Security and Breach Notification Rules (HPSBNR).


OCR Releases Guidance Regarding Patients’ Access to PHI

March 23, 2016


The U.S. Office for Civil Rights (OCR) has been actively releasing new information regarding the Health Insurance Portability and Accountability Act of 1996 (HIPAA) compliance, including releasing a frequently asked question (FAQ) aimed at clarifying the rules for fees charged to patients in need of access to medical records.


Bundled Payments Building Momentum

March 16, 2016


A bundled payment is defined as reimbursement to healthcare providers on the basis of expected costs for clinically-defined episodes of care.  It has been described as a middle ground between fee-for-service reimbursement and capitation.


A Setback for Health Data Transparency

March 9, 2016


Healthcare providers as well as health policy opinion leaders favor data transparency.  If detailed data about the costs and quality of healthcare are publicly available, the theory goes, we will be able to address matters of cost, quality and access through analysis of comprehensive payment information.  We will also have the information needed to foster competition on the merits instead of competition based on anecdotes, marketing and faith.


Improving Patient Satisfaction the Disney Way

March 2, 2016


Do you remember when you first discovered the magic of Disney?  Whether you’re a child or adult, chances are the Disney experience changed the perception of how a consumer should be treated.  Disney follows three philosophical tenants to ensure they consistently deliver the world-class service that consumers have become accustomed to receiving:


CMS Finalizes Rule Regarding Reporting and Returning Overpayments

February 24, 2016


The Affordable Care Act (ACA) established a new Section 1128J(d) as part of the Social Security Act (Act) requiring that a person who has received an overpayment to report and return the overpayment.  Failure to identify and refund overpayments exposes providers and suppliers to False Claims Act liability pursuant to 31 USC 3729.  In the February 16, 2012 Federal Register,1CMS published a proposed rule to implement the section in the Act.  Four years later, CMS finalizes its rule (Final Rule).2  Importantly, the Final Rule, further identifies when an overpayment exists, clarifies when it has been “identified,” explains how long providers and suppliers have to repay identified overpayments and revises how far back providers and suppliers must look-back for repaying overpayments.  Although the Final Rule takes effect March 14, 2016, both federal and state governmental bodies have been enforcing this statutory requirement since its enactment on March 23, 2010.


Telemedicine Trends and Opportunities

February 17, 2016


Telehealth is broadly defined as the use of telecommunications and other information technologies to deliver healthcare, health information or health education at a distance.  While telemedicine is most commonly used to improve access to medical services in rural areas where such services are not consistently available, Peter Rasmussen, MD, Medical Director of Distance Health at the Cleveland Clinic points out that the groundwork is being laid for a full virtual healthcare system meeting the needs of not only rural communities, but also busy patients unable to seek care in person, or unable to do so.  He foresees regular online outpatient visits with a care coordinator or nurse for health maintenance, and visits to a clinic or doctors’ office only for services requiring hands-on care such as eye examinations, throat cultures and comprehensive physical exams.


Patient Payment Liability Just Ain’t What it Used to Be

February 3, 2016


Baseball is America’s past-time and Yogi Berra was one of its most colorful heroes.  Berra was an 18-time All-Star, appeared in 14 World Series as a member of the New York Yankees and won 10 championships.  He was a sportswriter’s favorite because he had countless expressions and phrases that were memorable because most of them didn’t make any sense.  A warmhearted personality, he became famous for delivering brilliantly awkward sayings, such as:  “90 percent of the game of baseball is half mental” and “the future ain’t what is used to be.”


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