2011_NTSGNA_BH by xiaopangnv

VIEWS: 34 PAGES: 71

									North Texas Society of
Gastroenterology Nurses and
Associates


The Public Policy
Impact on Health Care:
The Future of
Consolidation &
Quality Initiatives
November 5, 2011

Bobby Hillert
Congress Avenue Bridge Strategies
www.cabstrategies.com
512.542.9253 | Bobby@cabstrategies.com
                                                                                                                                                                                                                                                                                                  0.0%
                                                                                                                                                                                                                                                                                                                  2.0%
                                                                                                                                                                                                                                                                                                                                4.0%
                                                                                                                                                                                                                                                                                                                                             6.0%
                                                                                                                                                                                                                                                                                                                                                       8.0%
                                                                                                                                                                                                                                                                                                                                                                   10.0%
                                                                                                                                                                                                                                                                                                                                                                               12.0%
                                                                                                                                                                                                                                                                                                                                                                                           14.0%




                                                                                              3x
                                                                                                         6x
                                                                                                                                       9x
                                                                                                                                                                    12x
                                                                                                                                                                                   15x
                                                                                                                                                                                             18x
                                                                                                                                                                                                               21x
                                                                                                                                                                                                                          24x
                                                                  Ratio
                                                   Price/Earnings Jan-95




                                                                                                                                                                                                                                                                                          2004
                                                                                                                                                                                                                                                                                                                                                       7.2%
Oc




            0.0x
                             0.5x
                                                     1.0x
                                                                                      1.5x
                                                                                                           2.0x
                                                                                                                                                                    2.5x
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  g-
      96




                                                                                                                                                                                                                                                                                          2005
                                                                                                                                                                                                                                                                                                                                                       7.3%
Ju                                                                                   Jan-97
  n-
      97
Ap




                                                                                                                                            Historical Avg: 11.4x
   r-9                                                                               Jan-98
Fe 8
  b-
      9




                                                                                                                                                                                                                                                                                          2006
                                                                                                                                                                                                                                                                                                                                                            7.8%




                             Mean:
                                                                                     Jan-99




                   Median:
De 9
   c-9
        9
Oc
    t-0                                                                              Jan-00




                   1.22x
                             1.25x
Au 0
                                                                                                                                                                                                                                                                                          2007
                                                                                                                                                                                                                                                                                                                                                                              10.9%




  g-
      01
Ju                                                                                   Jan-01
  n-
      02




                             Low:
                   High:
Ap
                                                                                     Jan-02




                                                                                                                                                                                                                              5x
                                                                                                                                                                                                                                                                     10x
                                                                                                                                                                                                                                                                                       15x
                                                                                                                                                                                                                                                                                                                          20x
                                                                                                                                                                                                                                                                                                                                                      25x




   r-0
                                                                                                                                                                                                                     Jan-89
                                                                                                                                                                                                                                                                                          2008
                                                                                                                                                                                                                                                                                                                                                                              11.0%




Fe 3
  b-
      0                                                                              Jan-03                                                                                                                          Jan-90




                   2.29x
                             0.68x
De 4
   c-0                                                                                                                                                                                                               Jan-91
        4
Oc                                                                                   Jan-04                                                                                                                          Jan-92
                                                                                                                                                                                                                                                                                          2009
                                                                                                                                                                                                                                                                                                                                                                                       12.4%




    t-0
                                                                                                                                                                                                                     Jan-93
Au 5
                                                                                                                                                                                                                     Jan-94
  g-




                                              5x
                                                                              10x
                                                                                                   15x
                                                                                                                                       20x
                                                                                                                                                                               25x
      06                                                                             Jan-05




                     Current
                                     Jan-89




                     (Feb-11)
                                                                                                                                                                                                                     Jan-95
Ju
                                                                                                                                                                                                                                           Historical Avg: 13.2x




  n-
      07
                                                                                                                                                                                                                     Jan-96
                                     Jan-90                                          Jan-06
                                                                                                                                                                                                                                                                                          2010
                                                                                                                                                                                                                                                                                                                                                                       9.9%




Ap
   r-0                                                                                                                                                                                                               Jan-97




                                                                                                          5-Yr Avg: 9.8x
Fe 8                                 Jan-91




                             0.82x
  b-                                                                                 Jan-07                                                                                                                          Jan-98
      0
De 9                                 Jan-92                                                                                                                                                                          Jan-99




                                                                                                               Historical Avg: 13.2x
   c-0
        9                                                                            Jan-08                                                                                                                          Jan-00
Oc                                   Jan-93
    t-1                                                                                                                                                                                                              Jan-01
        0
                                     Jan-94
                                                                                     Jan-09                                                                                                                          Jan-02

                                     Jan-95                                                                                                                                                                          Jan-03

                                                                                     Jan-10                                                                                                                          Jan-04
                                     Jan-96
                                                                                                                                                                                                                     Jan-05
                                                                                                                                                                                                                                                   5-Yr Avg: 11.0x




                                     Jan-97                                          Jan-11                                                                                                                          Jan-06

                                                                                                                                                                                                                     Jan-07
                                                                                                                                                                      11.7x




                                     Jan-98
                                                                                                                                                                                                                                Price/Earnings Ratio
                                                                                                                                                                                                                     Jan-08
                                     Jan-99
                                                                                                                                                                                                                     Jan-09
                                                                                                                                                                      Ma
                                                                                                                                                                                                                                                                                                                 0%
                                                                                                                                                                                                                                                                                                                          10%
                                                                                                                                                                                                                                                                                                                                       20%
                                                                                                                                                                                                                                                                                                                                                30%
                                                                                                                                                                                                                                                                                                                                                         40%
                                                                                                                                                                                                                                                                                                                                                                    50%
                                                                                                                                                                                                                                                                                                                                                                               60%
                                                                                                                                                                                                                                                                                                                                                                                         70%
                                                                                                                                                                                                                                                                                                                                                                                                   80%




                                                                                                                                                                        r-9
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                                                                                                                                                                                                                                   20.0x
                                                                                                                                                                                                                                                                      30.0x
                                                                                                                                                                                                                                                                                      40.0x
                                                                                                                                                                                                                                                                                                                  50.0x




                                     Jan-00
                                                                                                                                                                              0                                      Jan-10

                                                                                                                                                                                                                     Jan-11
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                                     Jan-01                                                                                                                            v-9
                                                                                                                                                                                                                                                                              12.6x




                                                                                                                                                                              1
                                                                                                                                                                                                                                                                                                                                             23%




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                                                                                                                                                                                                                                                                                                      BMY




                                                                                                                                                                            l-9
                                                                                                                                                                               3
                                                                                                                                                                                                                                                                                                                                                                           53%




                                     Jan-03
                                                                                                                                                                                                      Mean:




                                                                                                                                                                      Ma
                                                                                                                                                                                            Median:




                                     Jan-04                                                                                                                             r-9
                                                                                                                                                                              5
                                                            5-Yr Avg: 10.5x




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                                                                                                                                                                       v-9
                                                                                                                                                                                            20.2 x
                                                                                                                                                                                                      22.0 x




                                                                                                                                                                              6
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                                     Jan-06
                                                                                                                                                                                                                                                                                                      LLY




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                                     Jan-07                                                                                                                                 l-9
                                                                                                                                                                                                                                                                                                                                                                           52%




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                                                                                                                                                                                                      Low:
                                                                                                                                                                                            High:




                                     Jan-08                                                                                                                           Ma
                                                                                                                                                                        r-0
                                                                                                                                                                              0
                                     Jan-09
                                                                                                                                                                                                      9.2 x




                                                                                                                                                                     No
                                                                                                                                                                                            49.1 x
                                                                                                                                                                                                                                                                                       2010A




                                     Jan-10
                                                                                                                                                                       v-0
                                                                                                                                                                                                                                                                                                                                                      32%




                                                                                                                                                                              1
                                                                                                                                                                                                                                                                                                      MRK




                                     Jan-11
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                                                                                                                                                                                                                                                                                                                                                        35%




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                                                                                                                                                                                              (Feb-11)




                                                                                                                                                                      Ma
                                                                                                                                                                        r-0
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                                                                                                                                                                                                                                                                                                                                                                           52%




                                                                                                                                                                       v-0
                                                                                                                                                                                                      11.5 x




                                                                                                                                                                              6
                                                                                                                                                                                                                                                                                                      PFE
                                                                                                                                                                                                                                                                                                                                                                                           67%




                                                                                                                                                                          Ju
                                                                                                                                                                            l-0
                                                                                                                                                                               8
                                                                                                                                                                                                                                                                                                                                                      33%




                                                                                                                                                                                                                                                                                                   average
                                                                                                                                                                                                                                                                                                                                                                           52%




                                                                                                                                                                                                                                                                                               US Major Pharma
                 Overview
I. REVIEW: Hospital, surgery center, and
   freestanding ER industries.

I. CONSOLIDATION & QUALITY INIATIVIVES: A
   review and analysis of policy and industry
   trends

I. TEXAS HEALTH CARE MARKET: a look at other
   health care policy trends in Texas

I. OUTLOOK: What to look for in the next few
   years
• Texas ASC
  Society
• Founded in 2003


   • TX Physician
     Hospitals
     Advocacy Center
   • Founded in 2009

• Texas
  Independent ER
  Association
• Founded in 2001
Texas POHs:
90 facilities; the largest in the nation




Texas Leads in Economic
Impact of Doctor-Owned                “Texas physician hospitals
                                      also will pay close to $86
        Hospitals                     million in property, payroll
          January 14, 2009
        Dallas Morning News             and income taxes this
         By Jason Roberson                       year…”




“Physician-owned hospitals in
  Texas will infuse $2.3 billion
 into the state’s economy this
              year…”
                                 Overview:
  The Texas Physician Hospital Industry

What We’re Watching
      • Impact of grandfathered status and no new expansion
      • Industry consolidation
      • Commercial insurance market
      • Health insurance exchanges (2014)
      • New ways to incorporate physician governance
      • HAI reporting in Texas
      • Hospital re-admissions (federal level)
      • Medicaid restructuring – Texas
      • Provider taxes on facilities – Texas (potential)


Industry Initiatives


      • H.R. 1159 Doc Hastings – Washington State
      • H.R. 1186 Sam Johnson – Texas
Physician-Owned   2   7
Hospitals

                           1
                  6   10
Physician-Owned Hospital Overview:
  Dallas-Fort Worth POHs
                                                   Overview:
           A Sample of ASCs in Each State
           221
                                                                                                               17
                            14                17                                                                              0 - VT
      76
                                                         49                                                          21 - NH
                 56                                                                                       87           56 - MA
                                          16                       58
                                                                          80
                             18
                                                                                                                      44 - CT      7 - RI
668
            50                                            25                                        221
                                              44                                                                    25 - DE
                                                                   120          193
                       43                                                125                                        201 - NJ
                                  101                                                     11
                                                                                                                    4 - DC
                                                              97                                    48
                                                   63                          35                                   357 - MD
                                                                                                    69
                 150         28                                           148
                                                    51        63
                                                                                               62
                                                                          36        253
                                                                    64
                                                              72



                                                                                           358
                                        406
Ambulatory Surgery        9    23
Centers
                          35   44   3


                                             < 5 ASCs

                                             5 – 10 ASCs

                                             > 10 ASCs




                                        12

                      4
                                            72
                 23                     8
                                                     4
                                                 5
            34
                    A Snapshot:
     The Texas ASC Industry

2009 Texas ASC Industry Economic Impact Study




    Texas ASCs had an estimated statewide economic impact of
✔   nearly $1.7 billion in 2009.


✔   An estimated 7,380 Texans are employed by Texas ASCs.

    Texas ASCs paid an estimated $424 million in taxes in 2009.
✔
                       Breakdown:
An Analysis of the Texas ASCs
Specialty        ASCs with this   Percentage with Sole Specialty
                 specialty        this specialty
Ophthalmology    163              43%              42
Gastro           93               24%              63
Plastics         158              41%              15
Pain Mgmt        66               17%              13
Foot             162              42%              0
Oral             59               15%              0
OB-GYN           122              32%              2
Urological       24               6%               1
Otolaryngology   82               21%              1
Orthopaedic      72               19%              1
Thoracic         11               3%               0
Neurological     26               7%               0
Overview:
Texas ASC Industry

Industry Trends & Challenges


• Managed care (in-network & out-of-network).
• Medicare rates.
• Limited window to prepare for quality reporting.
• State reporting mandates – revenue code data collection.
• ACOs.
• $20 billion: the amount added to the Medicare system if ASCs were
eliminated.


Industry Initiatives

• Texas ASC Society industry studies.
• Industry grassroots and PR efforts.
• Usual & customary definition.
• Data Reporting – Texas ASC Society’s benchmarking.
• State and federal advocacy.
Overview:
Commercial Insurance Challenges




Dr. David Shapiro Says Lagging
Reimbursements Could Make ASC Business
"Impossible”
- January 28, 2011 Becker’s ASC Review Headline




                                                  Insurers' out-of-network pay changes
                                                  likely mean they will pay less for care
                                                  - February 14, 2011 American Medical News
Washington, DC:
Medicare & Congress

2012 Medicare Payment Rule – January 1, 2012
• Quality reporting
• Small payment increase
• No new surgeries/procedures


2011-2012 Congress
• ASC Quality and Access Act
• Super Committee – debt ceiling
Medicare Payment Policy:
Our Biggest Hurdle
                         ASC       HOPD
Update              2.3%       2.8%
Productivity        1.4%       1.2%
Other adjustment    --         0.1
Effective Update    0.9        1.5
Conversion Factor   $42.329    $69.420
                ASCs & Medicare:
    The Future Payment Methodology

                  Foundation:
                 2003 Medicare
                Modernization Act



     Outlier:           Outlier:        Outlier:
     Quality           Inflation      Productivity
    Reporting           Update        Adjustment

                                    The Future?
The Future?
                  The Future?         Acquired
  Value-
                      Cost           Conditions
  Based
                   Reporting          Policy for
Purchasing
                                        ASCs
H.R. 2108/S. 1173:
Medicare & Congress

• ASC Quality and Access Act (H.R. 2108/S. 1173)
   – Previous bills tied ASC pay to X% of HOPD
   – New bill dictates update factor
• Require CMS to implement quality reporting
• Authorize value-based purchasing, dictate method
  for bonus pool, criteria for distribution
• Adds ASC representative to APC panel
• Turns back current CfC prohibiting same-day surgery
                                   Overview:
     The Texas Independent ER Industry

Industry Trends & Challenges


      • Growth
      • Washington State Restrictions




Austin Legislative Priorities



      • SB 1206 – Industry Bill
      • “Telling Our Story” to the Health Care Industry
Freestanding ERs
    2012 Medicare Payment Rule:
    January 1, 2012

•   Quality Reporting – begins January 1, 2012
•   Penalties – CY 2014
•   No New Procedures
•   CPI-U vs. HOPD
•   Productivity Adjustment
    Quality Initiatives:
    Washington & Austin

•   HCAHPS – Inpatient & Outpatient Coming
•   CGCAHPS
•   SCIP Data
•   Value-Based Purchasing (VBP)
•   Hospital Readmission Penalties
•   HAI Reporting (Texas)
•   Medicaid Quality Initiatives (Texas)
           Satisfaction, Quality, & Readmission Reporting
                  From Voluntary to Mandatory

                                       HCAHPS:
       HCAHPS:                                                       HCAHPS:
                               Linked to payment; first
      Voluntary                                               First public reporting             HCAHPS:
                              public report (2006-2007
    implementation                                              for hospitals that          Continued reporting
                                     discharges)
                                                                 joined in 2007.



                                                                                                 2011 -
             2006 - 2007
                                             2008                    2009 - 2010                 Future




                                 Started out as         20% of Medicare patients
  MedPAC Analysis of                                                                   DRG reduction will pay for
                                 voluntary, now           re-admitted within 30
Readmission Rates - 2007                                                                the incentive payment.
                                   mandatory                      days.


             Quality Reporting (no P4P):                                First VBP:
                                                                                                           VBP:
Reporting Hospital Quality Data Annual Payment Update    Congress did not act on CMS’s VBP report;
                                                                                                       Passed in ACA
 (RHQDAPU); 2003 MMA & 2005 Deficit Reduction Act.                         2007.
                                                                                         http://www.health
                                         Quality:
Pay for Reporting vs. Pay for Performance

Medicare Quality Reporting                     Value-Based Purchasing
(2012)                                         (VBP)

- 2006 legislative gave CMS the authority to   -PPACA calls for a VBP report for ASCs and
require ASC quality reporting and penalize     hospitals. No authority to implement VBP.
for not reporting.                             -Report due by January 2011 for ASCs.
- Expected in 2012.                            -Industry Comments:
- 2011 Medicare rule asked for comments.            -Should be incremental, beginning with
- CMS asked for comments on the following           voluntary.
objectives:                                         -Quality indicators should include
     -Patient falls                                 efficiency, outcomes, patient
     -Patient burns                                 experience.
     -Hospital transfer                        -CMS October 2010 forum asked for:
     -Wrong site                                    -The development of measures of
     -Prophylactic IV antibiotic                    quality and efficiency.
     -Surgical-site infection                       -The reporting, collection, and validity of
     -Medication administration variance            quality data.
     -Medication reconciliation                     -The structure of VBP payment
     -VTE measures                                  adjustments.
                                                    -Methods for public disclosure.
VBP for Inpatient Hospitals:
What You Could Gain…Or Lose


Everyone Will Lose:   What You Could Gain in FY 2013:
1% in FY 2013         As high as: 1.8%
1.25% in FY 2014      As low as: 0.2%
1.5% in FY 2015
1.75% in FY 2016
2% in FY 2017
Medicare Hospitals:
Value-Based Purchasing Overview                                                          http://www.beckershospitalrevi
                                                                                         news/what-value-based-purcha
                                                                                         providers.html
 July 1, 2009 – March 31, 2010
 Baseline Calculation Period                                October 1, 2012:
                                                            1st Inpatient VBP Payments




                          July 1, 2011 – March 31, 2012
                          Comparison Period


                                                          Highlights:
                                                          •VBP is scored on both achievement and
                                                          progress.
                                                          •Incentive payments funded by 1% DRG
                                                          decrease in FY 2013
                                                          • One bad score can cost a lot of money.
                                                          * Having one bad SCIP score can be a a
                                                          huge problem and cost a lot of $.
70% of VBP:
Clinical Process of Care
 % of heart attack      % of heart attack       % of heart failure     % of pneumonia
 patients given         patients given PCI      patients given         patients whose
 fibrinolytic           within 90 minutes       discharge              initial ED blood
 medication within      of arrival.             instructions.          culture was
 30 minutes of                                                         performed prior to
 arrival.                                                              administration of
                                                                       1st hospital dose of
                                                                       antibiotics.
 Initial antibiotic     Prophylactic            Prophylactic           Prophylactic
 selection for CAP in   antibiotic received     antibiotic selection   antibiotics
 immunocompetent        within one hour         for surgical           discontinued
 patient.               prior to surgical       patients.              within 24 hours
                        incision.                                      after surgery end.
                                                                                            Under the p
                                                                                            can earn 0
 Cardiac surgery        Surgery patients        Surgery patients       Surgery patients     the baselin
 patients with          on a beta blocker       with                   who received      For the FY
 controlled 6AM         prior to arrival that   recommended            appropriate
                                                                                           * Sevent
 postoperative          received a beta         venous                 venous              *
 serum glucose.         blocker during the      thromboembolism        thromboembolism         o Th
                                                                                               o Fo
                        perioperative           prophylaxis            prophylaxis within * Eight m
                        period.                 ordered.               24 hours prior to * A syste
30% of VBP: Patient Experience of Care




Source: CMS HCAHPS; patients who had overnight stays from July 2009 – June 2010; updated April 11, 2011.
CMS’s SCIP Data:
DFW Physician-Owned Hospitals

                                                        16 DFW POHs
                                                       had an adequate
                                                           sample:

                                                         • 14 > average
                                                           • 5 = 100%

          Newest Measure:
          Patients whose urinary
         catheters were removed
         on the 1st or 2nd day after
                  surgery

            National Avg – 90%
             Texas Avg – 89%


   Source: CMS Surgical Care Improvement Project Process of Care Measures; 7/1/2009 – 6/30/2010.
Hospital Preparation & VBP:
Industry Studies

VHA, Inc.’s 2010 Study:

• National Median Score = 53.
• Estimated that scores need to be above 70 for
the top decile.
• Patient satisfaction scores (HCAHPS) dragged
down these scores.
• Hospitals face an average VBP revenue risk of
$888,812 in 2012 and $6.67 million over five
years.
              ASC & Hospital Medicare Quality Initiatives
                         Value-Based Purchasing

                                                                                          INPATIENT:
            INPATIENT:                                     INPATIENT:                                 Acco
                                                                                        Penalties begin
          Baseline period                              Performance period
                                                                                            FY 2013 bene

         2005
                                      2011                       2012                 2012 - 2013


                2009
                                             2010                     2011
                                                                                       2012 - 2014          CM
                                                                                                            im
                                                                                                            be
                       ASCs:                                     ASCs:                    ASCs:
                                                                                                            CM
Affordable Care Act directs a study on VBP for ASCs;   2011 HHS ASC VBP report   VBP’s future for ASCs is   th
  CMS does not have authority to implement this.             to Congress.                unclear.
                                                                                                            in
                                                                                                            pe
                                                                                                            re
                                                                                                            wi
        Medicare Hospitals:
        Readmissions
 MS has been collecting quality and patient experience information from acute care
 ospitals on a voluntary basis since2004, the initial year of the Hospital Inpatient
                                                                  http://www.cms.gov/apps/media/
Quality Reporting (IQR) Program. The IQR program was authorized by section
 01(b) of the Medicare Prescription Drug, Improvement, and Modernization Act of
                                                                  press/release.asp?Counter=389
 003, and amended by Section 5001(b) of the Deficit Reduction Act of 2005. In
ecent years, a vast majority of hospitals chose to participate in the program in order
                                                                  3&intNumPerPage=10&checkD
o be eligible for the full annual percentage increase each year, as a result of
egislation requiring Medicare to reduce the annual percentage increase for hospitals
                                                                  ate=&checkKey=&srchType=1&
hat did not participate in the reporting program. More than 95 percent of eligible
 ospitals have participated successfully in this Hospital Inpatient Quality Reporting
                                                                  numDays=3500&srchOpt=0&src
 rogram, formerly called Reporting Hospital Quality Data for Annual Payment Update
RHQDAPU), receiving their full annual percentage increase each year since the
 rogram went into effect.
                                                                  hData=&keywordType=All&chk
                                                                  NewsType=1%2C+2%2C+3%2
                                                                  C+4%2C+5&intPage=&showAll
                                                                  =&pYear=&year=&desc=&cboOr
                                                                  der=date
                                                               http://www.pressganey.com/new
                                                               sLanding/10-04-
                                                               20/A_Timeline_of_Health_Syste
                                                               m_Change.aspx
     Medicare Physicians:
     Quality & Satisfaction Ratings
                                        January 2012:                                        2015:
        2010:
                          CMS to announced VBP measures; reports                CMS to adopt VBP by this date;
Affordable Care Act &
                            to physicians regarding comparisons.               VBP for some; pay for reporting for
 VBP for physicians
                                                                                      all (EHR, not ACA).




                          2011:                                       2013:
               Physician Compare launched                    2015 VBP payments will be                     2017:
                                                                based on 2013 data             All physicians will participate
                                                                                                          in VBP.




         http://www.pressganey.com/researchresources/governmentInitiatives/CGCAHPS.aspx
                                           Timeline:
            ASC Industry Quality Reporting

   2003            2004        2007             2009                       2011 - 2012

                                                                                   Quality
                                                                                 Reporting,
                            MedPAC                  Updated
                                                                                Value-Based
                          Recommends                Medicare
                                                                               Purchasing, &
          MMA             Cost & Quality            Condition
                                                                                  Acquired
                          Reporting for               s for
                                                                               Conditions (for
                               ASCs                 Coverage
                                                                                   ASCs?)


New Payment Rules for     MedPAC’s Intense                                  Quality Reporting Expected
                                             Infection Control Standards
   Medicare ASCs           Focus on ASCs                                             for 2012
                          CMS rejects cost
New Era for ASCs/More                            Strong Emphasis on
                          reporting; House                                    Latter Two from PPACA
      Scrutiny                                Infection Control by CMS
                              accepts
                                                                              State HAI Reporting –
                                                                                 October 1, 2011
                                                                                Medicare Quality
                                                                              Reporting – January 1,
                                                                                      2012
                        MEASURES                     DATA       REPORTING     HOW    PAYMENT
                                                  COLLECTION      PERIOD    REPORTED   YEAR

            (1) Burns (2) Falls (3) Wrong site,
                                                  January 1,
   QDC      side, etc. (4) Hospital transfer (5)
                                                    2012 –                   Medicare
 (Quality   Prophylactic IV antibiotic timing                    CY 2012                  CY 2014
                                                 December 31,               claims data
Data Codes)   (6) Hair removal (7) Selection
                                                     2012
                  prophylactic antibiotic

 National
                                                   January 1,                  Self
Healthcare
               (1) Surgical site infection rate   2013 – June    CY 2013     reported     CY 2014
  Safety
                                                    30, 2013                CDC NHSN
 Network
                                                   January 1,
              (1) Safe surgical checklist use (2)              July 1, 2013    Self
                                                     2012 –
                 ASC facility volume data on                   – August 15, reported      CY 2015
                                                  December 31,
              selected ASC surgical procedures                     2013     QualityNet
 Structural                                           2012
 Measures
                 (1) Influenza vaccination         October 1,                  Self
                coverage among healthcare         2013 – March Not specified reported     CY 2016
                          personnel                 31, 2014                 CDC NHSN
       VBP & Quality Reporting:
  What’s the Difference??



The hospital value-based purchasing
program goes further than the IQR program
by offering incentives to hospitals not just for
reporting data, but also based on positive
quality performance as demonstrated by the
data. According to Berwick, “Value-based
purchasing repositions Medicare from an
observer of nationwide hospital quality to a
formidable force in shaping quality going
forward.”

- January 2011 White House Statement
Changing the Face of Medicaid:
New Policy Initiatives
SB 7: Quality Provisions
SB 7, which was one of the Senate’s major initiatives, will create require HHSC to develop
quality-based outcome and process measures to implement quality-based payment
systems. These could include:

•Medicaid HMO premiums based on outcomes.
•Health homes.
•Pay-for-performance for nursing homes.
•The creation of the Medicaid and CHIP Quality-Based Payment Advisory Committee.
•A quality-based reimbursement system for Medicaid.


Non-emergent care use of emergency departments
An incentive program to keep Medicaid patients out of hospitals will be studied. HB 2245
by Representative Zerwas and Senator Nelson. It would create physician incentive
programs to reduce hospital emergency room use for non-emergent conditions by
Medicaid patients

HB 1983 would direct HHSC to implement evidence-based, tested quality and cost-
savings measures to reduce the incidence of C-sections. It also directs HHSC to study
the impact on infant health, the frequency of infant admissions to neonatal intensive care
units, and readmission rates.
Consolidation:
Specific Trends in Texas

       Hospital Systems                                   Medicaid

 • Acquiring facilities and building networks.   • Increased participation and manag
 • Rural hospital employment.
 • 501a model.
 • Facility joint ventures.
 • Hospital mergers.

   Commercial Insurance                                   Medicare
 • Out-of-network attacks.
 • Tying in-network rates to                     • SGR.
 Medicare.                                       • Ancillary reimbursements
 • Hospitals creating their own                  (imaging).
 plans.
 •
                                                                 NEED # OF
                                                                 EMPLOYED
                                                                   DOCS
                           Medical Practices:
             Physician Ownership Trends


              80%
                                Physician-Owned

              60%

              40%

              20%
                            Hospital/Corporate Owned
              0
                          ’02       ’04       ’06      ‘08


Changing Practice
Medical Practice Ownership Rates in the U.S.
Source: MGMA Physician Compensation and Production
Survey Report
WSJ May 14, 2010
Consolidation:
Is Quality Impacted?

Difficult to measure.
2011 Texas Legislature
Medicaid Cuts:
An Overview

 Hospitals (other than   ~ 8% cuts        Numerous other policy
 children’s and rural)                    changes and indirect
                                          cuts (next slide)


 Rural and Children’s    No cuts          “
 Hospitals
 Dialysis                ~ 4 to 5% cuts   Could have been worse


 Physicians              No cuts          Could be impacted by
                                          costs shifted to 2013


 Nursing Homes           No cuts
 ASCs                    5% cuts
Medicaid Cuts:
Tip of the Iceberg
Hospitals & Facilities:
New Laws/Regulations

Medicaid Cuts          ~ 8%, SDA, etc.              See previous slide
Medicaid Quality       SB 7 could have a major      It will be a lengthy rule
overhaul               impact on Medicaid in        process.
                       hospitals; see next slide.
Health Care            SB 8 was part of the         It will be a lengthy rule
Collaboratives/ACOs    special session; see next    process.
                       slide.
Trauma                 TX Emergency & Trauma        A result of the Special
                       Care Partnership Program     Session


Hospital Liens         Hospitals will be required   SB 328
                       to notify patients of a
                       possible lien.
Physician Employment   Rural Counties               See next slide.
HAI Reporting          Regulatory                   October 1, 2011
Hospitals & Facilities:
Initiatives that Failed

Provider Assurance Fee      Briefly discussed.           Will make an appearance
                                                         in the interim.
Out-of-Network              Did not leave the House;     HB 705
Discounting Penalties       see next slide.


Advance Directives          HB 3250 would have           Did not pass.
                            changed the state’s
                            current rules.
Reporting of Infection      HB 1657 would have           Did not make it out of the
Deaths                      required facilities to       House.
                            report if an infection led
                            to a death.
Additional patient safety   HB 2515.                     Did not make it out of the
reports.                                                 House.
Physicians & Other Issues:
Initiatives that Passed

Physician Employment       Rural hospitals; see next
                           slide.
Medicaid Cuts Avoided
PA/Physician Partnership   HB 2098 would allow the     Signed into law.
                           two to form partnerships.
Texas Medical Board        Major battle; see next
Reform                     slide.
Physicians & Other Issues:
Initiatives that Failed

Physician Employment   Rural hospitals; see next
                       slide.
Imaging Restrictions   HB 1809 and several         The bill and amendments
                       amendments would have       failed; next slide.
                       added registration and
                       accreditation measures.
Texas Medical Board &
Liability Reform


                        FAILED
                        SB 190


   vs


                                 FAILED
                                 HB 1013
                                 SB 906
    Imaging Issues




            HB 1809 – Similar bill failed in 2009

            • Create an accreditation and registration system.
            • Create a study comparing the rates of physician-owned imaging
            compared to rates of those without ownership.
            • Require physicians to disclose physician ownership to patients.

            SB 401 & HB 1621 – Imaging and pain management centers



                                        2009’s Medicare Bill
2007’s Budget Deficit Act                                                2010’s Reform Law
                                      -Additional cuts to in-office
- First large cuts to in-office                                       - Cuts to in-office MRI, PET,
                                        -In-office credentialing
            imaging                                                                 CT
                                                 (2012)
Physician Employment

 HB 1700 is signed into law by the
 governor and allows rural hospital
                                          Other new laws allow employment at
 physician employment. This
                                          county hospitals in Harris, El
 includes counties with a population
                                          Paso, and Bexar counties. Texas
 of 50,000 or less; sole community
                                          Scottish Rite wins approval, too.
 hospitals; and critical access
 hospitals.




       2009                      2011             2013                    2015

                                        Physician employment should
                                        be a quiet issue in 2013.
 Legislation signed into law allows
 Parkland (Dallas) to employ
 physicians. Rural hospital                               Could all Texas hospitals
 legislation is vetoed by the                             ask for employment in
 governor.                                                2015?
Ambulatory Surgery Centers
             New “Ownership” Models
  SB 848
  The bill would allow a surgeon in an ASC to assume temporary control of the
  license in order to collect the facility fee.

  Traditional                                        License
  Ownership                                          Sharing/Under
  Model                                              Arrangement

Technical            Facility                    Technical              Facility
Fee                  Fee                         Fee                    Fee




Surgeon              Facility                    Surgeon                Facility
                 Usual & Customary
 Texas Association of Health Plans’ policy paper regarding
 recommendations for the 2008-2009 TDI Sunset Review:
 “Additionally, a lack of oversight of ambulatory surgical centers
 (ASCs) combined with the absence of any national standard
 for usual and customary payments to an ASC has been
 exacerbated by physicians who are referring patients to facilities in
 which they have a financial interest.”



“Fair Market” Value                            Tied to
U&C                                            Medicare %

                             HB 2697:
Commercial Insurance:
Narrow Networks
                     Managed Care Issues
Balance Billing            HB 3087 would have created an Did not leave the House.
                           arbitration system for facility-
                           based physicians.
Network Adequacy           Regulatory; next slide.        Final rule published in May
Standards                                                 2011.
TDI Sunset Process         Could have had major           Signed into law.
                           implications; minor in the
                           end.
State Health Insurance     As a result of PPACA; next     Did not leave the
Exchange                   slide.                         Legislature.
Out-of-Network U&C         HB 2697 would have             Did not leave the
                           defined U&C; next slide.       Legislature.
Out-of-Network Penalties   HB 705                         Did not leave the House.
Assignment of Benefits     Industry activity.             Not addressed.
Transparency               Vicki Truitt                   Did not leave the House.

EPO                        HB 1772                        Signed into law.

Silent PPOs                HB 1534 would have regulated
                           these.
                   Accountable Care Organizations:
          The Emperor’s New Clothes?
• Medicare Part C might be the only ACOs in the beginning.

• “They need you a lot more than you need them.”

• You can purchase hospital services – Kaiser Colorado example.

• Independent facilities could sell equity, services, or contract with an ACO.

• What is a primary care physician? Oncologists.

• What happens to orthopedic surgeons?

• “You’ll need 50,000 patients, not 5,000.” Is it worth the costs?

• Huge problem!!! Patients can opt out due to privacy concerns.

• ASCs are well-positioned because they offer efficient and low-cost care. However, ASCs are not
always part of primary care networks.

• Will physician groups be able to serve as the central figure of an ACO?

• The amount an ACO receives is capped.
                      SB 8:
Health Care Collaboratives & ACOs




                               Austin: SB 8 and SB 7


       Introduced on February 16, 2011.

       • Would create the Texas Institute for Health Care Quality a
       Efficiency.

       • Focus on state programs – TRS, ERS, Medicaid, and CH

       • Create infrastructure for “health care collaboratives.”

       • Quality initiatives (mostly for hospitals).
Affordable Care Act:

• ACOs
• State Health Insurance
Exchanges
• Medicaid Expansion
                    Insurance Choices
Forecast of Insurance Coverage
           SOURCE: The Joint Committee on Taxation/Congressional Budget Office

                                                  2016                      2019
                       2014
  2010
Medicaid              Medicaid               Medicaid                 Medicaid
 40M                   42M                    49M                      50M

Employe
   r                  Employe                 Employe                  Employe
 150M                  r 172M                  r 169M                   r 168M


Uninsure                                      Uninsured 18M           Uninsured 18M
 d 50M                Uninsured 23M


Medicar               Medicar                 Medicar                  Medicar
e 47M                 e 52M                   e 55M                    e 60M
 Ind –                 Ind –                   Ind –                    Ind –
 27M                   24M                     23M                      24M
Health Insurance Exchanges

New Avenues for Obtaining
Insurance Subsidies:

1.State Insurance Exchange
2.Subsidies
3.Medicaid
4.Small Employer Credits

                             62
                        State Health Insurance Exchanges
                        Analysis of the Subsidies
                                             Steps to determine eligibility:
•Must have an income between 133 and 400% of FPL.
•Employees who are offered coverage by an employer are not eligible for premium credits unless: a) the employer
plan does not have an actuarial value of at least 60% or b) if the employee share of the premium exceeds 9.5% of
income.
•If you meet the top two requirements, a premium is available on a sliding scale. (The credit is directly to the
insurance company.
•You must purchase a Silver plan in order to be eligible. The premium credit is the lesser of the following amounts:
a) Total monthly premium for qualifying health plan or b) The excess of “adjusted monthly premium” for the
applicable second-lowest-cost Silver plan.


               FPL (Family of % of Income              Monthly             Actuarial
               4)                                      Premium             Value

               133 – 150%          3 – 4%              $74 - $110          94%
               150 – 200%          4 – 6.3%            $110 - $232         87%
               200 – 250%          6.3 – 8.1%          $232 - $372         73%
               250 – 300%          8.1 – 9.5%          $372 - $524         70%
               300 – 350%          9.5%                $524 - $611         70%
               350 – 400%          9.5%                $611 - $698         70%
                                                                                                             63
                State Health Insurance Exchanges
                   What It Looks Like
                    HIGHLIGHTS
Catastrophic        • All plans must offer basic services.
    Plan
Under age 30
                    • A plan with an actuarial value of 70% means that the insurance plan
                    will pay 70% of typical medical costs while the beneficiary is responsible
Bronze Plan         for 30% of the costs.
60% actuarial
   value            • Catastrophic coverage available for individuals under age 30.

 Silver Plan        • The Office of Personnel Management will contract with private
70% actuarial       insurers to offer at least two national or multi-state plans to be offered
   value            in each state.

                    CONCERNS
 Gold Plan
80% actuarial       • Will there be a limited number of plans in certain states due to state
   value            mandates?

                    • The insurance networks will be very “tight.” Providers will see
Platinum Plan       decreased reimbursements.
90% actuarial
   value            • Will there be open enrollment periods?
                                                                                          64
ACOs:
Leaving Fee-for-Service


                          Progressive Payment
 Current Fee for
                          Models
 Service Model
                          • Care coordination
                          across settings.
                          • Federal lawmakers
                          wanted to make most
                          payments
   • Fragmentation.       coordinated/globalize
                          d; did not believe that
                          providers were ready.
                          • Still FFS models.
ACOs & New Payment Models:
Current Medicare Examples


  Medicare Physician Group Practice Demonstration
  Project (Medicare) It includes 10 physician groups
  (approximately 500 physicians and 22,000 beneficiaries).
  MedPAC cited increased quality. However, it could not
  quantify cost savings at this point in time.

  Gain Sharing for Hospitals and Patients (Medicare) A
  Medicare pilot project completed by five hospitals (San
  Antonio Baptist). (More about this on another slide.)

  Bundled Payments (Medicare) A Medicare pilot project in
  the 1990s focused on heart bypass surgery at seven
  hospitals.
ACOs:
The Emperor’s New Clothes?
• Medicare Part C might be the only ACOs in the beginning.
• “They need you a lot more than you need them.”
• You can purchase hospital services – Kaiser Colorado example.
• Independent facilities could sell equity, services, or contract with an ACO.
• What is a primary care physician? Oncologists.
• What happens to orthopedic surgeons?
• “You’ll need 50,000 patients, not 5,000.” Is it worth the costs?
• Patients can opt out due to privacy concerns.
• ASCs are well-positioned because they offer efficient and low-cost care. However, ASCs are
not always part of primary care networks.
• Will physician groups be able to serve as the central figure of an ACO?
• The amount an ACO receives is capped.
• ACOs will be measured on 65 quality measures.
Affordable Care Act:
Other New Models Coming to Medicare


   Bundled Payments Program - HHS required to develop a
   national, voluntary bundled payment pilot program to provide
   incentives for providers to coordinate care, effective 2013.

   Medical Home – The Independent Medicare Advisory Board
   will test medical home models.

   Center for Medicare & Medicaid Innovation Center – Tests,
   evaluates, and expands different payment structures,
   established in 2011.
Key Events to Watch
      2012                                      2013
• Presidential election                   • Health insurance exchanges must be
• Medicare physician payment cuts?        in place
• ACO/progressive payment models          • Texas Legislature meets
begin                                     • A Texas facility provider tax?
• Medicaid managed care expands           • New Texas quality initiatives?
in Texas
• Greater Medicaid power for county
hospitals in Texas




            2014

     • Health insurance exchanges begin
     • Massive Medicaid expansion
     • Employer insurance mandate
     • Community rating
     • Guaranteed issue
     • Individual mandate
Texas Health Insurance Trends

Direct contracting with employers

Hospital systems offering their own plans

Self-insure: Wal-Mart example (PPACA)

Non-Medicare hospitals

Device management solutions (Access MediQuip)

Physician-owned device companies (PODs)

Tighter insurance networks (“narrow panel”)

FQHCs (ACO benefits)

Insurers and providers (Concentra/Travis County Health)

Qliance (Seattle)
North Texas Society of
Gastroenterology Nurses and
Associates

How Public Policy
Impacts Health Care
Delivery
November 5, 2011

Bobby Hillert
Congress Avenue Bridge Strategies
www.cabstrategies.com
512.542.9253 | Bobby@cabstrategies.com

								
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