Becker's Hospital Review

10 Sign up for the COMPLIMENTARY Becker's Hospital Review CEO Report & CFO Report E-Weeklies at www.BeckersHospitalReview.com or call (800) 417-2035 from opposing potential competitors' certificate of need applications for acute-care hospitals in a six-county area. Phoebe Putney will not have to sell Palmyra, as Georgia's certificate of need laws complicate this traditional remedy, which is typically the FTC's preferred method to restore competition. Hospital activity in Idaho also caught the FTC's attention this year. In March 2012, Boise, Idaho-based St. Luke's Health System's acquisition of the 44-physician Saltzer Medical Group in Nampa, Idaho, caught the attention of the FTC, which filed an antitrust suit to block the deal. According to the complaint, the acquisition of Saltzer would leave St. Luke's with a 60 percent market share and enough bargaining leverage with healthcare plans to raise prices in the region. A district court judge allowed the merger to close late last year. The FTC later merged its suit with similar lawsuits filed by St. Luke's Boise-based competitors, Saint Alphonsus Health System and Treasure Valley Hospital, and the trial began in September 2013. At press time, testimony in the case had ended and a verdict was pending. 7. HIPAA omnibus rule becomes effective, organizations on high alert Throughout 2013, hospital and health system IT executives have been reviewing and ensuring compliance under the HIPAA Omnibus rule. Originally released Jan. 17, the rule expands and clarifies existing HIPAA requirements in accordance with the HITECH Act, and represents the most sweeping changes to HIPAA since it was enacted in 1996. Key changes in the omnibus rule include patients' right to an electronic copy of their medical record, new limits on how patient information can be used for marketing purposes, a revised breach notification standard based on risk of compromised information rather than risk of harm, and the option for patients to request procedures be kept confidential from their insurance carriers if they pay out of pocket for them. HIPAA violations have been vigorously enforced — the omnibus rule increases the maximum penalty per violation to $1.5 million, and so far this year Affinity Health, WellPoint, Walgreens and others have paid more than $1 million to settle alleged HIPAA violations. The final rule officially went into effect March 16, but healthcare providers were more concerned with the compliance deadline of Sept. 23, 2013. The HIPAA compliance deadline loomed large as healthcare organizations are also preparing for the ICD-10 transition and meaningful use stage 2, both scheduled for 2014. In light of these conflicting priorities and what many in the industry see as a rushed timeline, the Health Information Management Systems Society, the American Hospital Association, the College of Healthcare Information Management Executives, the Medical Group Management Association and 17 U.S. senators all called for more time for healthcare organizations to attest to meaningful use stage 2. The proposals have all called for a six month to one year extension to allow both vendors and hospitals the time to implement the next stage One case of Legionnaires' disease is one too many. PROTECT YOUR PATIENTS. PARTNER WITH THE LEGIONELLA EXPERTS®. • Legionella and waterborne pathogens testing • Water safety plans • Legionella risk assessments • Outbreak response • Research and education 877-775-7284 | WWW.SPECIALPATHOGENSLAB.COM correctly. HHS has not yet responded to the calls for an extension. 8. Pioneer ACO first-year results draw questions about future of ACOs Medicare's Pioneer Accountable Care Organization program started 2013 with 32 participants, but it closes the year with just 23. In July, CMS revealed how its original 32 Pioneer ACOs performed in 2012, their first performance year. Results were mixed: While all 32 Pioneers improved quality and patient satisfaction scores in 2012, just 13 achieved enough savings to share in them with Medicare. Overall, those 13 ACOs achieved $76 million in shared savings. Shortly after the release of the less-than-encouraging first-year results, nine of the original 32 Pioneers — more than a quarter of participants — dropped out of the program. Seven of the nine ACOs that exited the program opted to join the Medicare Shared Savings Program, an ACO program with no downside risk, and two decided to leave Medicare's ACO programs completely. At the time this went to print, just 23 Pioneer ACOs remained. Several experts agree that, given the ambitious nature of the Pioneer program and the complexity of accountable care, the first-year results were not a surprise, and the Pioneer program, as well as other accountable care initiatives, have merit. Others question the future of the model given the mixed results. Indeed, Pioneer ACOs' results have not curbed ACO formation in the slightest. Commercial ACO formation continued to grow throughout 2013 through payers like Aetna, Cigna, UnitedHealthcare and Blue Cross Blue Shield affiliates. The Medicare Shared Savings Program also added 106 ACOs before the Pioneer results were released, in January 2013. The Pioneer program rolls on, as 2014 is the remaining participants' third, and perhaps final, performance year. Pioneers signed a three-year contract with CMS for the program, but have an option to extend the agreement an additional two years based on performance. 9. Financial impact of readmissions penalties hits hospitals CMS' 2013 fiscal year, which began Oct. 1, 2012 and spanned through the end of September, marked the first year hospitals experienced reduced reimbursements for excessive preventable readmissions. For FY 2013, CMS cut Medicare payments by up to a maximum of 1 percent for 2,213 hospitals with high readmission rates for heart attack, heart failure and pneumonia. During the second round of penalties, which began Oct. 1 of this year for CMS' fiscal year 2014,

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