The change is a necessary step in improving access to care in rural and underserved areas of the state, Mr. Beshear said in a statement. “In cases like this, where the federal requirement is an obstacle to some of the best options for delivery of high-quality health care, we’re pleased to take this step to opt out,” he said.
The Kentucky Society of Anesthesiologists is opposing the opt-out. “An opt-out would have dangerous ramifications to the patients of Kentucky and jeopardize Kentucky’s ability to deliver quality medical care,” a KSA press release said.

ACO formation is both capital and time intensive. By way of limited example only, there’s the legal and financial work in planning the structure, creation of the necessary entities, building the management and compensation structures, and developing relationships with physicians and convincing them, cajoling them, or even outright pressuring them to join.

 Given these high transaction costs – and once again, setting aside (at least for a few nanoseconds) the thoughts of shifting power and control — hospitals that create ACO structures will be predisposed to use them other than simply for purposes of chasing Medicare dollars: They will pursue private payer dollars as well.

 Physicians who become providers in an ACO believing that what is intended is simply another way of collecting and allocating Medicare dollars will soon find that a huge proportion of their entire book of business is now ACO business. If that is indeed the case, then it will functionally be as if you have one very large, or perhaps one sole, payor: the hospital. When that happens, will you still be running an independent practice?

Of course, this has significant economic implications for your financial future. It also has significant political implications vis-à-vis the medical staff: If all physicians are dependent upon the hospital for their livelihood, how independent can the medical staff ever be?

And, remember, that the reason – or excuse – that the model’s proponents use for the creation of an ACO is a drive to quality care. But if physician practice becomes more and more subject to the economic control of the hospital, what will happen to physicians’ satisfaction with medical practice and, therefore, with the quality of care that they give, even assuming every physician has patient care at the forefront of his or her thoughts?

The rule also includes a proposal to implement a national health plan identifier, required under the Patient Protection and Affordable Care Act of 2010 (ACA). This is a great step to help standize the health plans so that they can be uniquily identified, just like providers have been for years now.

In November, the court agreed to hear the lawsuit brought forth by 26 states, the National Federation of Independent Business (NFIB) and two individuals. The main issue at hand and the subject of the lawsuit is the claim that Congress exceeded its constitutional power by instituting the “individual mandate,” sometimes called the “minimum coverage provision,” which requires that most Americans buy health insurance starting in 2014 or face a fiscal penalty.

According to the report, which summarizes actions taken by 10 states to establish health insurance exchanges, officials in New Hampshire, Wyoming, Alaska and Wyoming are likely to pursue insurance exchanges in 2012.

HHS has awarded $729.5 million in planning grants, establishment grants, and innovator grants, according to the report. The agency said it is continuing efforts to develop a federal exchange for states that do not choose to create their own exchanges and will issue guidance in the coming months.

1. Medicare payments remain in flux -  Congress  left Washington late last year after only passing a two month fix for the flawed sustainable growth rate (SGR) formula, despite the fact that they had a full year to address the 2012 cuts. Congress’s inability to avert the 27.4 percent cut for a full year exacerbates uncertainty for physician  payment in 2012.
2. Version 5010 transition - Jan. 1 was the compliance deadline to use Version 5010 standards for electronic claims and other HIPAA transactions. MGMA research indicated that some practice trading partners, including practice management system vendors and health plans, were not able to meet the deadline.
3. E-prescribing  penalties begin in 2012 - A 1% penalty will be levied in 2012 for physicians who are eligible for the Medicare e-prescribing program and did not successfully e-prescribe in 2011 or have a hardship exemption request approved by the Centers for Medicare & Medicaid Services (CMS). E-prescribing penalties increase to 1.5 % in 2013 and to 2.0% in 2014.
4. Countdown to ICD-10 - The healthcare industry has been focused on transitioning to HIPAA Version 5010 electronic transaction standards, but 5010 is only a stepping stone to implement ICD-10, the new diagnosis code set. The industry must transition from ICD-9 to ICD-10 by Oct. 1, 2013. This new code set is vastly more complex.
5. 2012 elections - Campaigns are underway for the 2012 elections, which could change the political landscape for the next four years and have a significant impact on health policy, including repeal or further implementation of healthcare reform.
6. Continued emphasis on compliance - Both  Congress and CMS continue to focus on curbing fraud, waste and abuse in public health programs, such as Medicare and Medicaid. Medicare recovers more than $7 for every $1 spent on fraud investigations, according to government data. Group practices should be prepared for new compliance initiatives.
7. The Supreme Court hearing on ACA - Justices will hear challenges to the constitutionality of the 2010 healthcare reform bill, the Patient Protection and Affordable Care Act (ACA).
8. CMS explores alternative payment models - The Center for Medicare & Medicaid Innovation (CMMI) and CMS continue to explore payment models that move away from the current fee-for-service reimbursement method.
9. Focus on site of service payment differentials - The Medicare Payment Advisory Commission and Congress are taking a closer look at payment differences for identical services across delivery settings, including the difference between payments made to hospitals and physician practices.       
10. EHR meaningful use incentives continue - The  second year of the Medicare EHR incentive program is important because  2012 is the last year that physicians can start participating and earn the maximum amount of $44,000 over five years per eligible professional.

Under HIPAA, all physicians and other healthcare providers that submit claims electronically are required to transition to the Version 5010 transactions by Jan. 1, 2012. Practices that wish to continue having payments sent to a PO box or lock box must report this address in the “pay-to” address field.

Practice administrators should ensure that their practice management system vendor, billing service or clearinghouse has made this change. Practices must update their address information before Jan. 1 to prevent claims rejections and interruptions in cash flow.  Commercial payer are implementing the 5010 standards as well, so be ready to trouble shot the commercial payers claims denials or prepare for a significant cash flow impact.

Visit mgma.com/5010 or the CMS Web site for more information on the change to Version 5010.