Becker's Hospital Review

12 Sign up for the COMPLIMENTARY Becker's Hospital Review CEO Report & CFO Report E-Weeklies at www.BeckersHospitalReview.com or call (800) 417-2035 CMS exacted Medicare reimbursement penalties upon 2,225 hospitals in 49 states. The maximum penalty for fiscal year 2014 is a 2 percent reduction in Medicare reimbursement. retail brands such as Walmart, Walgreens and CVS in finding ways to provide affordable, quick and convenient care, and hospitals are increasingly partnering with these retailers to coordinate care. According to Kaiser Health News, the average penalty for fiscal year 2014 is 0.38 percent, down from 0.42 percent from fiscal year 2013. The penalty calculation process was refined for fiscal year 2014, and planned readmissions will no longer be factored into readmissions rates. A June report from Accenture predicted the doubling of retail clinics from 1,400 to 2,800 locations nationwide in the next three years. Walgreens in particular has been a bellwether for the process. This year alone the company expanded its retail clinic brand to cover chronic conditions, made partnerships with Orlando Health and Atlanta-based WellStar, among others, and has rebranded its "Take Care Clinic" to "Healthcare Clinic," making its primary care provision goals even more explicit. Americans don't shy from using retail clinics instead of hospitals or traditional physician offices. A JAMA Pediatrics study found 25 percent of parents use retail clinics over pediatricians for their children. One of the resulting controversies from the readmissions penalty process is the confirmation of a prediction from a January Journal of the American Medical Association study, which said safety-net hospitals would be disproportionately fined once penalties were released. This was indeed the case: 77 percent of safety-net hospitals were fined, and CMS stated it had no plans to adjust penalties for socio-economic status of patient populations, having already factored in the poorer health of low-income patients. This leaves hospitals scrambling to integrate care and identify low-hanging fruit for readmissions reduction and population health management improvements as quickly as possible. For fiscal year 2015, CMS will increase the maximum penalty rate to 3 percent of Medicare reimbursement. CMS is also investigating adding more readmissions conditions, including hip and knee replacements and chronic lung disease. 10. Push to outpatient sites of care, growth of retail clinics Another important 2013 trend: Hospitals are increasingly investing in outpatient sites of care, including urgent care clinics, as they prepare for population health management. Rather than feeling threatened by retail clinics, hospitals have overwhelmingly decided to follow the example of major More Employee Responsibility, More Unpaid Bills? (continued from page 1) "It's a nightmare for us," he says. "We have drug companies, the electric company and the water company, among other vendors, expecting payment for services rendered to the hospital. If we're not collecting for healthcare services we provide, I don't have a money tree out back for us." Although many of those unpaid bills come from people who don't have insurance coverage at all, there are also people who have coverage but still can't pay. The reason: growing high-deductible health plan enrollment, a trend Mr. Hogan says he saw developing about a decade ago, before he joined DeSoto. That growth has sped up significantly in recent years, with employers looking to contain health benefits spending as healthcare costs continue to increase and the Patient Protection and Affordable Care Act enacts new fees and revamps the health insurance landscape. Ideally, the high-deductible, or consumer-directed, plans would lead to consumers making smarter choices, opting to visit their physician instead of going to the emergency room for minor ailments. However, research shows that while shifting more responsibility onto consumers works out well for employers, it can lead to financial troubles for consumers and for hospi- A bonus to this approach: Investing in outpatient care lowers both readmissions and inappropriate emergency department utilization through improved population health and increased public access to primary care. An April report in Scientific American confirmed this linkage in a case study on a CVS-University of California Los Angeles partnership, in which direct integration of the two entities lowered readmission rates at UCLA hospitals. Whether hospitals opt mostly to partner and integrate with retail clinics or to set out on outpatient endeavors of their own remains to be seen. However, it seems clear that outpatient care is a new staple for healthcare systems' success in their quest to provide quality care from the get-go. Whether they achieve it, rather than how they achieve it, seems to be more important in determining hospitals' adaptability to the changing market, especially as the newly insured are set to flood the already-scarce primary care market beginning in January 2014. n tals when patients who don't understand their plans end up facing a bill they can't pay. as those with deductibles of at least $1,000 for single coverage and $2,000 for family coverage. The reason behind the rise: Employers turn to more consumer control to cut costs The number of workers enrolled in high-deductible plans has risen significantly in recent years. In 2013, 20 percent of covered workers were enrolled in high-deductible plans with savings options such as an HRA or HSA, up from 13 percent in 2010. According to the Kaiser Family Foundation 2013 Employer Health Benefits survey, 23 percent of companies offering health benefits offer a high-deductible health plan, with 17 percent providing health savings account-qualified highdeductible plans and 6 percent opting for coverage with a health reimbursement account.. Health savings and health reimbursement accounts are both tax-exempt accounts people can use to pay for current or future qualified healthcare costs, according to Kaiser. An HRA can be paired with a high-deductible plan but isn't required to go along with one. However, in order to open an HSA, a person must have coverage under an HSA-qualified high-deductible plan, meaning the plan meets the premium minimums federal law sets for high-deductible plans. Federal law requires a deductible of at least $1,250 for single coverage and $2,500 for family coverage for HSA-qualified high-deductible plans in 2013, according to Kaiser. There is no legal requirement for a minimum deductible in a plan offered with a HRA. For plans with an HRA, Kaiser has defined high-deductible plans It seems like that number will continue its upward trajectory as the pressure to contain healthcare costs grows, and the Patient Protection and Affordable Care Act continues to alter the healthcare landscape. Starting in 2014, the healthcare reform law might increase benefit costs for employers through a handful of new fees. One is the traditional insurance fee, a three-year fee levied on health plan sponsors to help fund statebased health exchanges. The rate for 2014 is set at $63 per worker. Plan sponsors of group health plans must also pay a seven-year fee to fund the Patient Centered Outcomes Research Institute. The rate for that fee is $1 per worker in 2014. A survey conducted in June by the National Business Group on Health — a nonprofit employer association — found large employers expected their healthcare benefit costs to increase by 7 percent on average in 2014 (Note: The survey was conducted before the Obama administration announced it was delaying the employer mandate until 2015).

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