Several electronic fact sheets that address topics are now available, including how to participate in an ACO and improve quality of care and information on the advanced payment model for ACOs. New fact sheets are also available detailing final rule provisions for ACOs under the shared savings program and fact sheets provide information on the methodology for determining shared savings and losses under the program.

Recent professional editorials have talked about creating a “surgical home” or an Accountable Anesthesia Organization as concepts where anesthesiologists would lead a team dedicated to the goals of an ACO. A recent article published in the Journal of the American Medical Association addressed the potential mistakes in implementing ACOs, particularly in failing to recognize interdependencies (http://jama.ama-assn.org/content/306/7/758.full).

It will be interesting to see the CMS response to the final rules for ACOs when they are made available.

The survey of more than 800 administrators and physicians found that 58 percent said they were in the process of forming ACOs or are considering doing so, while 42 percent said their facilities would not be forming ACOs in the foreseeable future.

Of the administrators and physicians moving toward ACOs, 42 percent said physician alignment is the most serious obstacle to their efforts. Forty percent of the physicians and administrators who are not forming ACOs said physician alignment was the reason.

Other obstacles to forming ACOs included lack of capital, the absence of integrated IT systems, and no evidence-based treatment protocol data, according to the survey.

Why can’t the Obama Administration get  this right and fix the underlying reimbursement problems asociated with the SGR? With the large number of uninsured that will now be insured under the new Obamacare plan we will need all healthcare providers, MDs, RNs, PAs, etc. in the sytem and productive to meet the increased demand anticipated. Any reimbursement changes that have the impact that the SGR could, would drive providers out of the sytem in great numbers.  Let’s fix the SGR problem once and for all.

2010

• Adults with pre-existing conditions who have been uninsured for at least six months can enroll in a temporary high risk health insurance pool and receive subsidized premiums–beginning three months after the bill’s passage. (The pools expire when exchanges are implemented in 2014.)
• All health insurance plans are to offer dependent coverage for children through age 26; insurers are prohibited from denying coverage to children because of pre existing health problems.
• Insurance companies can no longer put lifetime dollar limits on coverage and cancel policies–except in cases of fraud.
• Tax credits will be provided to help small businesses with 25 employees or fewer to get and keep coverage for these employees.
• The Medicare “doughnut hole,” in which beneficiaries had to pay full cost of their prescription drugs, begins narrowing by providing a $250 rebate this year to those in the gap, which starts this year after they have spent $2,830. The doughnut hole fully closes by 2020.
• Indoor tanning has a 10% sales tax.

2011

• For Medicare beneficiaries reaching the Medicare doughnut hole, prescription coverage will be available with a 50% discount on brand name drugs.
• A 10% Medicare bonus will be provided to primary care physicians and general surgeons practicing in underserved areas, such as inner cities and rural communities.
• Medicare Advantage plans would begin to have their payments frozen—and then lowered in 2012. The plans would have to spend at least 85 cents out of every dollar on medical costs, while leaving 15 cents for plan operations, including overhead and salaries. Reductions would be phased in over the next three to seven years.
• A voluntary long term care insurance program would be made available to provide a modest cash benefit for assisting disabled individuals to stay in their homes or cover nursing home costs. Benefits would start five years after people begin paying a fee for coverage.
• Funding for community health centers would be increased to provide care for many low income and uninsured people.
• Employers would be required to report the value of healthcare benefits on employees’ W 2 tax statements.
• Pharmaceutical manufacturers will have a $2.3 billion annual fee that will increase over time.

2012

• Nonprofit insurance co ops would be created to compete with commercial insurers. Hospitals, physicians, and payers would be encouraged to band together in “accountable care organizations.”
• Hospitals with high rates of preventable readmissions would face reduced Medicare payments.

2013

• Individuals making $200,000 a year or couples making $250,000 would have a higher Medicare payroll tax of 2.35%—up from the current 1.45%. A new tax of 3.8% on unearned income, such as dividends and interest, is also added.
• Medical expense contributions to tax sheltered flexible spending accounts (FSAs) are limited to $2,500 a year—indexed for inflation. In addition, the thresholds for claiming itemized tax deduction for medical expenses rise from 7.5% to 10% of income. People age 65 or older can still deduct medical expenses above 7.5% of income through 2016.
• Medicare device makers would have a 2.3% sales tax on medical devices; devices such as eyeglasses, contact lenses, and hearing aids would be exempt.

2014

• New state health insurance exchanges would be created. Income based tax credits will be available for many consumers in the exchanges. The sliding scale credits phase out for households that are four times above the federal poverty level (about $88,000 for a family of four).
• Medicaid would be expanded to cover low income individuals up to 133% of the federal poverty level—about $28,300 for a family of four.
• Insurers would be prohibited from denying coverage to people with pre existing conditions, or charge higher rates to those with poor or chronic health conditions. Premiums (with limitations) can only vary by age, place of residence, family size, and tobacco use.
• Insurers will be required to cover maternity care as they do other medical procedures
• All legal residents would be required to have health insurance—except in cases of financial hardship—or pay a fine to the IRS. The individual penalty starts at $95 each in 2014—rising to $695 in 2016. Family penalties are capped at $2,250; penalties will be indexed for inflation after 2016.
• Employers with more than 50 workers would be penalized if any of their workers get coverage through the exchange and receive a tax credit. The penalty is $2,000 times the total number of workers employed at the company. However, employers get to deduct the first 30 workers.

2018

• A tax would be imposed on employer sponsored health insurance worth more than $10,200 for individual coverage, and $27,500 for a family plan. The tax is 40% of the value of the plan above the thresholds, indexed for inflation.

2020

• Doughnut hole coverage gap in Medicare prescription benefit is phased out. Seniors continue to pay the standard 25% of their drug costs until they reach the threshold for Medicare catastrophic coverage.

Courtsey of Janice Simmons, for HealthLeaders Media, March 23, 2010

• Seniors in Medicare Advantage will face higher premiums and lose valued benefits, while younger people will have to pay significantly more for healthcare because they will be subsidizing older sicker people.
• The legislation will leave 10-20 million uninsured because subsidies to help people buy insurance are modest and penalties for not having insurance are minor. Plus, the legislation doesn’t cover illegals.
• Taxes levied on health insurers will ultimately be passed onto employers and consumers, raising premium rates by over 1% each year and hitting the middle class.
• The middle class will also get hit with the brunt of the cost of Medicaid expansion through higher state income, sales and property taxes.

I’m sure McDonald has his own thoughts on what all this means. To me, it suggests once again that the current reform effort is at best an incremental step on the road to where we need to go: either a single-payer system or a highly regulated public-private insurance market.

In line with this audacious promise, the American Recovery and Reinvestment Act of 2009 (ARRA) expands, enforces, and enhances the privacy and security safeguards required by the Health Insurance Portability and Accountability Act (HIPAA) for certain individually identifiable health information. The tightening of these safeguards is critical to building the network of computerized record-keeping systems that will service the whole nation. Most businesses will be affected by these changes to some degree. Some of the key changes made by the new law include:

1. Business Associates subject to HIPPA
2. Breach notification requirements under HIPPA
3. States attorneys general will enforce HIPPA violations
4. Individual rights are expanded under this rules change

Business Associates Become Directly Subject to HIPAA. Generally, individuals and entities are treated as “business associates” when they provide services to “covered entities” under HIPAA. Prior to ARRA, business associates were not directly subject to the privacy and security regulations under HIPAA, but had obligations with respect to HIPAA through the terms of agreements entered into with covered entities.

Under ARRA, beginning 12 months from February 17, 2009 (“date of enactment”), business associates become directly subject to certain requirements under the HIPAA privacy and security regulations in the same manner as those requirements apply to covered entities. These changes likely will require modifications to existing business-associate agreements.
Additionally, ARRA subjects business associates to the same civil and criminal penalties as covered entities for violations of the privacy and security requirements.

Breach Notification Requirement Added to HIPAA and Beyond. As breaches of personal information continue to affect millions of individuals across the United States, the ARRA adds a breach notification requirement to HIPAA. The new requirement follows the general framework established by states that adopted similar laws over the past few years, with some important distinctions:

• A breach requiring notification does not occur where the unauthorized person who receives a disclosure of protected health information would not reasonably be able to retain the information.
• Unless a delay in notification is permitted for law enforcement purposes, notification may not be provided later than 60 days after discovery of the breach.
• If the breach involves 500 or more individuals, covered entities must notify the Secretary of Health and Human Services immediately.
• Breaches involving 10 or more individuals for whom there is insufficient or out-of-date contact information require conspicuous posting on the covered entity’s website or notice in major print or broadcast media.

The notification requirement applies only to breaches of “unsecured” personal health information, which, subject to future guidance, generally means it is not secured by a technology standard, developed or endorsed by an accredited organization that would render the information unusable, unreadable, or indecipherable. The ARRA directs the Department of Health and Human Services (HHS) to promulgate regulations within 180 days of the date of enactment to carry out this new notification requirement.  The new regulations will apply to breaches discovered on or after the date that is 30 days after final interim regulations are published.
The ARRA also added a similar breach requirement for certain vendors of personal health records.  Vendors include those entities that are not covered entities under HIPAA, but access information in a personal health record or send information to a personal health record. Perhaps with an eye towards a national standard for data breach notification, the breach notification requirement for these vendors will cease to be effective on the effective date of regulations that implement new legislation establishing such a national standard.

State Attorneys General to Enforce HIPAA and Other Enforcement Provisions. Under the ARRA, effective immediately, State Attorneys General may bring a civil action in federal court to enforce the privacy and security regulations under HIPAA. These actions may seek damages on behalf of State residents.  Damages are determined by multiplying the number of violations by $100, subject to a calendar year cap for violations of identical requirements or prohibitions equal to $25,000. If successful, a State Attorney General also could recover attorneys’ fees.

Since the original effective date (April 14, 2003) of the HIPAA privacy regulations, few, if any, “civil penalties” have been assessed against covered entities. The HHS generally has taken a compliant-driven approach to enforcement. However, provisions of the ARRA seek to change this pattern:

• Effective immediately, penalties for violations are increased through a tiered structure. For example, a violation due to “reasonable cause”, but not “willful neglect”, may bring a penalty of as little as $1,000 but not more than $1,500,000. Even where the person did not know (and, by exercising reasonable diligence, would not have known) of a violation, a penalty of as little as $100 but not more than $1,500,000 may result.
• Two years after the date of enactment of ARRA, penalties will be required in cases of willful neglect.
• Where in the course of a preliminary investigation HHS believes a complaint indicates a possible violation due to willful neglect, it must commence a formal investigation.
• Within three years of enactment of ARRA, a method will be in place to share civil penalties with the individuals harmed.

Increase in Individual Rights with Respect to Protected Health Information. The HIPAA privacy and security regulations outline certain rights individuals have with respect to their protected health information. These rights include a right to request access and restrictions on certain disclosures. The ARRA enhances some of these rights.  For example:

• A requirement that covered entities comply with certain requested restrictions, despite the existing rule that generally permitted covered entities to decline to grant restriction requests.
• Increased obligations for covered entities maintaining electronic health records to account for disclosures of protected health information.
• Limitations on the ability to receive remuneration in connection with an exchange of protected health information.
• Increased access to protected health information maintained in electronic format.

* * *

Regulation of the use, disclosure and safeguarding of privacy and security of personal information, particularly personal health information, will continue to grow, whether at the federal or state level. Businesses should evaluate the kinds of information they maintain both for their business and their employees in order to determine the extent to which these laws may apply. Implementation of appropriate policies and procedures, among other steps, such as developing a breach response plan, can go far to reducing potential liability. We will be providing more information about the changes under ARRA in the coming weeks.  Members of our Workplace Privacy Group are available to assist your business to understand your obligations and plan accordingly.

Fast forward 17 years and it’s clear that managed care was not the panacea that everyone hoped it would be. Our nation’s politicians are once again looking for that magic bullet to solve an ever-increasing list of problems with our healthcare system, including a record number of uninsured Americans and spiraling costs. We are being told that this time, healthcare reform will ensure quality healthcare, access and affordability. This latest push for reform didn’t start with President Obama taking office. Throughout the race for the White House, it was one of the hottest and most widely debated of issues. 

There’s no question that Americans want healthcare reform. This fact was supported by a Service Employees International Union (SEIU) commissioned healthcare poll. According to that poll, conducted by Lake Research Partners, both Democrats and Republicans said that healthcare is this county’s top domestic issue and the second most important issue overall. (The war was identified as the number one overall issue.) Of those polled nationally, a vast majority (71 percent of Republican voters and 88 percent of Democratic voters) agreed with the statement, “We need to move beyond piecemeal reform because our healthcare system needs to be fundamentally overhauled.”

While Americans are anxious to see real reforms from our elected leaders, there appears to be no well-defined or comprehensive resolution on the horizon. Instead, what we are hearing about from our representatives in Washington are packages that contain a compilation of compromises and financial guesswork.

Personally, I find it perplexing that Congress is even considering moving forward with legislation that carries such an enormous price tag while this country continues to deal with the worst economic downturn since the depression, a ballooning deficit, a credit crunch, and two ongoing wars. Frankly, in more than 20 years in organized medicine, I have rarely met a member of Congress or a legislative staff member who truly understood the economics of our healthcare system.

Those who do understand the economics of healthcare know that a system that provides every man, woman and child unlimited and unfettered access to medical care is, ultimately, unsustainable. This fact is not being discussed by our federal legislators, however. Instead, they are minimizing all publicity relating to the financial limitations that will be inherent in any universal healthcare proposal. These same politicians know that to mention the idea of healthcare rationing would be a poison pill for any legislation and would create a public uproar. So they choose not to explain how they plan to cut costs and improve quality while insuring an additional 47 million Americans. Cleary, something has to give.

There are multiple healthcare reform bills currently under consideration, although H.R. 3200 is the bill that seems to be gaining the most acceptance at this time. This bill has an exorbitant price tag and falls significantly short of the president’s goal of insuring 97 percent of our population. The AARP initially speculated that healthcare reform would cost $600 million. Recent reports estimate a $1.5 trillion price tag over 10 years. According to GOP leader Mitch McConnell, “Every proposal we’ve seen would cost a fortune by any standard.” Even with this excessive expenditure, the Congressional Budget Office estimates that roughly 15 million to 20 million people will remain uninsured at the end of the decade.  Regardless of the cost and the inability to achieve universal coverage, President Obama claims that this investment is critical in order to fix our dysfunctional healthcare system. The president has also said that healthcare reform will not increase the federal deficit. That comment begs the question, “How, then, are we going to pay for it?”

The methods of paying for healthcare reform are still very sketchy, but Congress is considering multiple mechanisms, including: an income tax surcharge for single people and households (Congress will set the thresholds for the tax), certain cuts in Medicare and Medicaid, and financial penalties on individuals and employers who don’t obtain coverage. According to House Speaker Nancy Pelosi, “Many members think that there’s more to be squeezed from hospitals, pharmaceutical companies, and docs.” In other words, Congress plans to reduce the promised levels of reimbursement to these groups after gaining their support.

We should look at the three-year history of the Massachusetts universal healthcare project to gain insight into what we face nationally when it comes to healthcare reform. Massachusetts has unexpectedly incurred a 70 percent increase in costs over three years for insuring the previously uninsured population. It has been determined that once the state provided health insurance to the uninsured, utilization skyrocketed. This increase is being balanced by a reduction in payments to hospitals. In fact, Boston Medical Center has filed a lawsuit against the state because its reimbursement has been reduced to 64 cents on the dollar for low-income patients. The lesson here is that we should anticipate an increase in utilization and a corresponding increase in costs. One must wonder whether our politicians have factored these possible outcomes into their budgets.

As I began to write this article, I had the opportunity to read the results of a July Gallup poll in USA Today. It revealed that the American public is losing trust in the way the president is handling healthcare reform. A majority of those polled (50 percent to 44 percent) stated they disapproved of how the president is handling healthcare reform. Perhaps it’s time for both Democrats and Republicans to educate themselves further and refine their positions before proposing changes that will no doubt have long-term, far-reaching, and possibly irreversible consequences for the American people.

The American Society of Anesthesiologists made the following comments about the leading proposal before Congress, H.R. 3200 (Please see the ASA’s talking points on this bill below).

• It would be unsustainable for the medical specialty of anesthesiology to operate within a public plan option based on Medicare payment rates.
• Payment levels for anesthesia services provided through the new “public health insurance option” must be fixed.

 Contrary to the political spin coming from Washington, every healthcare reform proposal under consideration appears to come up short. Any suggestion that one of these bills will fix the system is simply fiction. In the government’s haste to pass legislation, I fear that our leaders will fall short on the promise of universal coverage, will exceed all estimates on cost, and ultimately will do very little to address quality.

 Whether you agree or disagree with the idea of universal healthcare, everyone should agree that change is coming. Every one of us has a stake in the outcome of this debate, especially those who currently have health insurance. It’s imperative that physicians remain part of the debate. There will never be a better opportunity to help shape the future of the delivery of healthcare in this country. There has never been a more important time to support your political action committee, NYAPAC.

 Stuart A. Hayman, MS serves as executive director of the New York State Society of Anesthesiologists (NYSSA). He has graciously agreed to share his recent article published in Sphere with my blog members.

President Barack Obama has made health care reform a priority. In doing so the House has drafted a bill (e.g. HR3200), that in its present form will decimate the speciality of anesthesia, an unintended consequence. The president intends to insure affordable healthcare and improve access, but by doing so he will cause unintended consequences that will be counter to his objectives.   By using  the Medicare fee schedule as the basis for payment under the proposed  “Public Option” health plan the government has signed the death warrant for the specialty of anesthesia .

Medicare payments for anesthesia services are calculated using a different method and a different ”conversion factor” than that used for other medical specialties. While Medicare pays primary care and other physicians an average of 80% of private sector fees, according to the GAO, Medicare rates for anesthesia providers average only about 33% of what private insurers pay for our services, across the country.  This unequal treatment is already driving many anesthesia providers to seek early retirement and it will ultimately limit patients’ access to anesthesia care as fewer anesthesia providers enter the specialty.  Payment rates in any health plan, including a potential “Public Option”, must be fairly negotiated to encourage all providers to participate.  Anesthesia providers need to educate House members on this unintended consequence so that it can  be removed from the bill or the bill modified to correct the unintended consequence for anesthesia.