On August 26th, the Center for Medicare Advocacy filed a nationwide class action lawsuit against the Secretary of Health and Human Services. The complaint alleges that, as implemented, the Medicare administrative review process is in violation of Medicare statutory obligations and the Fifth Amendment’s Due Process Clause.
Yesterday was a significant day for Apple and its legions of loyal fans, but was it also the “beginning of a health revolution” as Apple alludes to? On September 9th, Apple announced its new iteration of the iPhone, the iPhone 6 running a new iOS 8 operating system, and also debuted its first wearable technology, the Apple Watch. The long awaited launch of these new devices also showcased software that Apple debuted earlier this year, Apple’s Health app and HealthKit platform which are integrated into the new operating system.
The New York Times in an August 27, 2014 article noted big changes to estimated Medicare spending in the latest Congressional Budget Office (CBO) report published last week. The estimated Medicare budget for 2019 in this year’s report has declined by approximately $95 billion from the 2019 Medicare estimate published by the CBO four years ago in 2010. As the newspaper analysis notes, that’s six straight years of downward Medicare budget estimate forecasts by the CBO.
As reported in the New York Times, Walmart has taken the plunge into the retail primary care healthcare delivery market. Walmart has opened six primary care locations in South Carolina and Texas and plans to open another six by year end. These primary care clinics are intended to offer a broader range of services than the approximately one hundred acute care clinics leased by hospital operators at Walmart locations across the country. Walmart’s strategy is to include and focus on chronic disease management, especially in areas where doctors are scarce such as rural areas.
The Centers for Medicare and Medicaid Services (CMS) has approved Pennsylvania’s demonstration proposal to expand Medicaid to adults with incomes through 133 percent of the federal poverty line. The state is the 28th (including D.C.) to pursue Medicaid expansion, and one of a growing number of states to do so under an alternative model developed in collaboration with the federal government.
The Blue Cross Blue Shield Association released an interesting survey over the summer (July 2014) that provides further evidence of the change that is now happening in the American healthcare delivery system. BCBSA reported that approximately twenty percent (20%) of reimbursement from its Blue Cross Blue Shield plans were being paid in connection with a value-based arrangement. These arrangements included rewarding providers for improving quality of care and/or lowering healthcare costs. That would mean that $1 of every $5 spent in healthcare reimbursements are performance-related.
For the second straight year in a row, nonprofit hospital expenses have increased more than revenue, according to a study of 383 hospital systems by Moody’s Investors Service released on August 27, 2014. In an article published the same day by the New York Times, nonprofit hospital financial performance for 2013 was characterized as the worst since the Great Recession, with hospital revenue growth slowing to a nominal low in 2013 of 3.9 percent, rather than the more typical growth in prior years of at least seven percent per year.
Another withdrawal from the Medicare Pioneer Accountable Care Organization (ACO) program has occurred. Sharp Healthcare ACO, an affiliate of the Sharp integrated delivery system in San Diego, California, notified the Center for Medicare & Medicaid Innovation (CMMI) at the Centers for Medicare & Medicaid Services of its withdrawal from the Pioneer ACO program in June, but the first published media story regarding the withdrawal occurred last week. Sharp is the tenth Medicare Pioneer ACO to leave the program, joining the ranks of other withdrawing healthcare entities such as University of Michigan, Seton Health Alliance in Texas, DaVita HealthCare Partners and Prime Care. The Pioneer ACO program started initially with 32 participants, so approximately one-third have now exited the program. Some of the withdrawing entities have converted to Medicare Shared Savings Programs (MSSP), while others have entirely left the ACO programs.
The Health and Human Services (HHS) Office of Inspector General (OIG) provides health care providers an opportunity to disclose potential violations of certain Federal civil and criminal laws in relation to HHS contracts or subcontracts, pursuant to which OIG offers a means for facilitated resolution. A new publication issued by OIG offers guidance on completing the self-disclosure form, and has been posted alongside an FAQ on the protocol.
As the Affordable Care Act continues to mature, we are seeing new efforts by the Obama administration to incentivize care coordination across a spectrum of services provided to Medicare Fee-for-Service (FFS) patients. A New York Times article posted on August 16, 2014 reports that starting in January of 2015 Medicare will begin making monthly payments to physicians who manage care for patients with two or more chronic conditions like heart disease, diabetes and depression. The Times reports that approximately two-thirds of Medicare patients suffer from two or more chronic conditions. The program aims to incentivize physicians to improve medical outcomes, reduce hospital visits and readmissions and engage in preventative care. Physicians will assess patients’ medical, psychological and social needs; monitor adherence to medication prescriptions and care provided by other doctors; and make arrangements to ensure a smooth transition when patients move from a hospital to post-acute care facilities or home-care.