April 1, 2010
This installment of Hall Render's Health Law Broadcast series on health care reform is designed to provide you with the insight, analysis and practical suggestions with respect to the various reform initiatives that will affect your organization.
HEALTH REFORM: WHAT SHOULD HOSPITALS BEGIN CONSIDERING?
Although many of the implementation dates within the recently enacted Patient Protection and Affordable Care Act and related amendments ("PPACA") may seem to be in the distant future, there are many reform provisions that hospitals, whether large or small, urban or rural, should begin to address. Despite the fact that many of the changes that will occur from health reform are as yet unknown, implementing strategic plans and operational changes may require significant lead time before results are seen and bottom lines are improved. Now is the time for hospitals to consider many of the obvious aspects of health reform.
Is clinical integration the answer?
It is well published that clinical integration is to result in a host of benefits, but the concept of clinical integration is yet to be well understood by most hospitals and health systems. Achieving virtually all of the objectives of health care reform will require a level of clinical integration beyond what is common with hospitals today. And to achieve the level of clinical integration necessary to best position hospitals to not only weather health reform but to prosper, hospitals will need to implement innovative and practical approaches to clinical integration, all of which will consume valuable resources. These approaches must target significant improvements in quality and care coordination, patient satisfaction, organizational efficiency, and cost control. Among many considerations, these approaches will require increased investment in IT and greater alignment of hospital and physician interests whether through employment, co-management or well-designed compensation methodologies.
Is your hospital eligible to participate in a demonstration project or pilot program?
There are more than 30 demonstration projects and pilot programs announced as part of PPACA. These include demonstration projects or expansions to current projects for gain-sharing, pay-for-performance, payment bundling and hospice care. Many of these projects and programs could assist your hospital in developing innovative responses to future Medicare and Medicaid payment formulas.
Could you become an Accountable Care Organization?
Consider whether organizing as an Accountable Care Organization (ACO) is a viable option. Hospitals that organize with primary care physicians and specialty physicians as an ACO may be eligible to participate in a shared-savings program that will allow them to share in the cost-savings achieved through meeting certain quality benchmarks and by assuming joint responsibility for the overall care of their Medicare beneficiaries. Kind of reminds you of the PHO days, doesn't it?
Is now the time for affiliation or merger?
Independence to what end? Conventional wisdom suggests that hospital affiliations and mergers can increase market share and leverage with payers. But will expected reductions in reimbursement overall and other uncertainties create the need to seek further gains in operating efficiencies, quality outcomes, and better cost savings by way of affiliation or merger? And can your obvious affiliation partners help you achieve these goals?
Can you assist patients with coverage?
Will it benefit your hospital to prepare your existing eligibility screening program for screening and enrollment assistance to individuals who may be eligible for participation in the federal temporary high-risk pools that are required to be established by June 23, 2010? These high-risk pools are intended to serve as a stopgap measure until state exchanges are established in 2014. PPACA contains $5 billion in implementation and subsidy funding designed to make coverage available to individuals who have been uninsured for at least six months and who have a pre-existing condition.
Should you affiliate more with Primary Care Providers?
Because primary care physicians (family medicine, general internal medicine, and pediatric medicine) will receive increased Medicare and Medicaid payments, will your hospital further benefit from integrating primary care physicians through employment or other means? Hospitals must consider a number of access points for primary care services, from employer-based clinics to community care centers. And, from where will all of these primary care doctors come? The role of physician extenders must be considered much more seriously in any hospital's primary care strategy.
Is your hospital's Quality Assurance/Performance Improvement Program as effective as it can be?
Much of PPACA is intended to address improvements in quality and efficiency in health care delivery. These objectives are primarily sought by aligning payments with quality and efficiency through a series of demonstration projects, enhancement and expansions to existing value-based purchasing programs, quality reporting, and quality-related payment adjustments. Given Medicare and Medicaid's clear shift to becoming a quality or value-based purchaser, the time is now that hospitals place the necessary emphasis on positioning themselves to take advantage of revised payment structures. This is consistent with the old axiom of "what gets measured gets improved."
Is your hospital's Compliance Program ready?
A large portion of the nearly $1 trillion price tag for implementing PPACA is designed to come from federal and state successes in fighting fraud, waste, and abuse of governmental health care programs. That's a lot of fraud to rout out. To arm federal and state authorities, PPACA contains a number of program integrity enhancements and increased fraud and abuse funding. These range from mandatory compliance programs to data sharing among federal agencies to expanded civil monetary penalties. One thing is for certain, the U.S. Department of Justice, HHS Office of Inspector General, and state Medicaid Fraud Control Units will be stepping up their activities with increased enforcement.
Can you forecast future impact?
Consider using resources available from the American Hospital Association to begin estimating the financial impact on health reform to your hospital. While not precise, these resources can assist hospitals in strategic planning by outlining the impact associated with anticipated changes to market basket updates, disproportionate share payments, and increased coverage scenarios.
Should you have any questions regarding these issues, please contact:
