Healthcare ReformWinds of Change for ASC‟s Texas Ambulatory Surgery Center Society 2010 Annual Meeting Richard Bays MBA, RN, CPHQ, CLNC
A New Day for Health Care in America• On September 23, 2010 new reforms under the Affordable Care Act begin to bring to an end some of the worst abuses of the insurance industry. These reforms will give Americans new rights and benefits, including helping more children get health coverage, ending lifetime and most annual limits on care, and giving patients access to recommended preventive services without cost-sharing.• These reforms will apply to all new health plans, and to many existing health plans as they are renewed. Many other new benefits of the law have already taken effect, including rebate checks for seniors in the Medicare donut hole and tax credits for small businesses. And more rights, protections and benefits for Americans are on the way now through 2014.
The Affordable Care Act: Immediate Benefits for TexasSmall business tax credits.• 293,000 small businesses in Texas could be helped by a new small business tax credit that makes it easier for businesses to provide coverage to their workers and makes premiums more affordable.1 Small businesses pay, on average, 18 percent more than large businesses for the same coverage, and health insurance premiums have gone up three times faster than wages in the past 10 years. This tax credit is just the first step towards bringing those costs down and making coverage affordable for small businesses.
The Affordable Care Act: Immediate Benefits for TexasClosing the Medicare Part D donut hole.• Last year, roughly 237,000 Medicare beneficiaries in Texas hit the donut hole, or gap in Medicare Part D drug coverage, and received no extra help to defray the cost of their prescription drugs.2 Medicare beneficiaries in Texas who hit the gap this year will automatically be mailed a one-time $250 rebate check. These checks will begin to be mailed to beneficiaries in mid-June and will be mailed monthly throughout the year as new beneficiaries hit the donut hole. The new law continues to provide additional discounts for seniors on Medicare in the years ahead and completely closes the donut hole by 2020.Support for health coverage for early retirees.• An estimated 207,000 people from Texas retired before they were eligible for Medicare and have health coverage through their former employers. Unfortunately, the number of firms that provide health coverage to their retirees has decreased over time.3 Beginning June 1, 2010, a $5 billion temporary early retiree reinsurance program will help stabilize early retiree coverage and help ensure that firms continue to provide health coverage to their early retirees. Companies, unions, and state and local governments are eligible for these benefits.
The Affordable Care Act: Immediate Benefits for Texas• New consumer protections in the insurance market beginning on or after September 23, 2010. – Insurance companies will no longer be able to place lifetime limits on the coverage they provide, ensuring that the 11.8 million Texas residents with private insurance coverage never have to worry about their coverage running out and facing catastrophic out-of-pocket costs. – Insurance companies will be banned from dropping people from coverage when they get sick, protecting the 1.1 million individuals who purchase insurance in the individual market from dishonest insurance practices. – Insurance companies will not be able to exclude children from coverage because of a pre-existing condition, giving parents across Texas peace of mind.
The Affordable Care Act: Immediate Benefits for Texas• New consumer protections in the insurance market beginning on or after September 23, 2010. – Insurance plans‟ use of annual limits will be tightly regulated to ensure access to needed care. This will protect the 10.6 million residents of Texas with health insurance from their employer, along with anyone who signs up with a new insurance plan in Texas. – Health insurers offering new plans will have to develop an appeals process to make it easy for enrollees to dispute the denial of a medical claim. – Patients‟ choice of doctors will be protected by allowing plan members in new plans to pick any participating primary care provider, prohibiting insurers from requiring prior authorization before a woman sees an ob-gyn, and ensuring access to emergency care.
The Affordable Care Act: Immediate Benefits for TexasExtending coverage to young adults.• Beginning on or after September 23, 2010, plans and issuers that offer coverage to children on their parents‟ policy must allow children to remain on their parents‟ policy until they turn 26, unless the adult child has another offer of job-based coverage in some cases. This provision will bring relief to roughly 161,000 individuals in Texas who could now have quality affordable coverage through their parents.4 Some employers and the vast majority of insurers have agreed to cover adult children immediately.Affordable insurance for uninsured with pre-existing conditions.• $493 million federal dollars are available to Texas starting July 1 to provide coverage for uninsured residents with pre-existing medical conditions through a new transitional high-risk pool program, funded entirely by the Federal government. The program is a bridge to 2014 when Americans will have access to affordable coverage options in the new health insurance exchanges and insurance companies will be prohibited from denying coverage to Americans with pre-existing conditions. If states choose not to run the program, the Federal government will administer the program for those residents.
The Affordable Care Act: Immediate Benefits for TexasStrengthening community health centers.• Beginning October 1, 2010, increased funding for Community Health Centers will help nearly double the number of patients seen by the centers over the next five years. The funding could not only help the 318 Community Health Centers in Texas but also support the construction of new centers.More doctors where people need them.• Beginning October 1, 2010, the Act will provide funding for the National Health Service Corps ($1.5 billion over five years) for scholarships and loan repayments for doctors, nurses and other health care providers who work in areas with a shortage of health professionals. This will help the 12% of Texas‟s population who live in an underserved area.New Medicaid options for states.• For the first time, Texas has the option of Federal Medicaid funding for coverage for all low-income populations, irrespective of age, disability, or family status.
The Budget and TexasMake Health Care More Affordable, Accessible, and Secure• The President is committed to ensuring that every American has access to affordable health care.• Key Budget Highlights: – $18.7 billion for Texas to provide health coverage to low-income children and families. – Bolster prevention activities by expanding community health activities, strengthening the public health workforce, and improving detection and monitoring of chronic disease.
The Budget and TexasMake Health Care More Affordable, Accessible, and Secure• Key Budget Highlights: – $2.5 billion nationwide for health centers to provide affordable high- quality primary and preventative care to underserved populations. – New Medicare and Medicaid initiatives to provide higher quality care at lower costs. – $79 million to strengthen regional and local partnerships among rural health care providers, increase the number of health care providers in rural areas, and improve the performance and financial stability of rural hospitals. – $169 million to place doctors, nurse practitioners, and dentists in medically underserved areas to improve access to needed health care services.
Health Care Reform: Legislation Affects Ambulatory Surgery Centers What about my ASC and CMS?
Health Care Reform: Legislation Affects Ambulatory Surgery CentersCurrently…• Under current law, the Centers for Medicare and Medicaid Services (CMS) is required to update Medicare ASC facility fee payments annually for inflation. The agency historically has used the consumer price index for urban areas (CPI-U) for this purpose.Next Year…• Beginning in 2011, the Patient Protection and Affordable Care Act (PPACA) requires CMS to reduce the inflation update by a “productivity adjustment,” which is also defined under the new law as the 10-year rolling average of productivity gains in the general economy. Most significantly, the new law provides that application of the productivity adjustment may result in a negative update, which could reduce payments from one year to the next.
Health Care Reform: Legislation Affects Ambulatory Surgery CentersExample…• In 2010, CMS inflated ASC payments by 1.2 % based on CPI-U for the relevant period. The productivity adjustment for 2010 was 1.3 %. If the PPACA policy had been in effect for 2010, Medicare payments to ASCs would have been reduced by 0.1 %, before other adjustments are applied.New Grading System for 2012??• The acquired conditions policy is one of several new Medicare initiatives intended to reward quality and penalize poor care. Under the acquired conditions policy, Medicare payments are reduced when patients incur a secondary diagnosis that was not present upon admission (e.g., a foreign object was retained after surgery or the patient has a surgical site infection). Medicare‟s acquired conditions policy currently applies only to hospitals but could apply to ASCs, depending on the results of CMS‟s study. This report is due to the U.S. Congress by January 2012.
Post Election Mobilization to Fight Health Law“G.O.P. Plans to Use Purse Strings to Fight Health Law“ – The New York Times November, 2010 – GOP to attack health care law piece by piece Republicans acknowledge that they do not have the votes to repeal President Obamas health care overhaul, but they plan to use spending bills to block some of its provisions.
Post Election Mobilization to Fight Health LawThe House Republican whip, Representative Eric Cantor of Virginia, described the strategy this way: “If all of Obamacare cannot be immediately repealed, then it is my intention to begin repealing it piece by piece, blocking funding for its implementation and blocking the issuance of the regulations necessary to implement it. In short, it is my intention to use every tool at our disposal to achieve full repeal of Obamacare.”• The Senate Republican leader, Mitch McConnell of Kentucky, said he, too, wanted to shut off money for the new law.
Post Election Mobilization to Fight Health Law• Gov. Rick Perry calls for federal health care laws repeal The Dallas Morning News, November 10, 2010• He called for dismantling the national health care law, saying states could come up with better and probably cheaper plans.• "Repeal it in its entirety," he said. "Have them start anew from the premise the states can better handle these questions."• Perry has maintained that regulations prevent the states from innovating. He even suggested on CNN during his book tour that Texas could conceivably opt out of Medicaid and find its own solution.
Discontentment with Health ReformCongressman Kevin Brady‟s Health Plan Chart• In addition to capturing the massive expansion of government and the overwhelming complexity of new regulations and taxes, there is also:• $569 billion in higher taxes;• $529 billion in cuts to Medicare;• Increasing the ranks of Medicaid by 16 million;• 17 major insurance mandates; and• the creation of two new bureaucracies with powers to impose future rationing: the Patient-Centered Outcomes Research Institute and the Independent Payments Advisory Board.
Discontentment with Health ReformThis portrays only about one-third of the complexity of the final bill.
Healthcare Reform for ASC’s What Can My ASC Do While The Health Care Reform Issues Are Worked Through?
Healthcare Reform for ASC’s1) Looking for operational reimbursement margins, case volume/mix Where can you find savings? Supply Chain Processes – Shipping Charges Medical Supplies, Cross Over Instrumentation Pharmaceuticals Operational Costs – Contractual Arrangements Staffing Patterns Cross Train Staff Block Time (Utilizing Resources Relative to Volume) Specialty Mix – Syndication
Healthcare Reform for ASC’s2) Where Am I ? Who‟s Here? Demographics - Focus on target groups Who‟s coming to the doctor ? Local population types Suburban, Sports, Industrial, Cosmetic For what ?
Healthcare Reform for ASC’s3) Let‟s get proactive !! Preventative Treatment / Screening Colonoscopy, Cataract-Eye, Cancers Health Plan Coverage Promote yourself in communityThese procedures are stronglyassociated with age and representessential services to Medicarebeneficiaries.
Healthcare Reform for ASC’s"The doctor say hes comin, but you gotta pay him cash." Joe Walsh/Don Henley „Life in the Fast Lane‟ from the „Hotel California‟ Album December 8, 1976
Healthcare Reform for ASC’s4) Niche Services / Cash Pay What Specialties are Marketable to Your Center?
Healthcare Reform for ASC’sHigh Demand Specialties Bariatric Botox Cosmetic – All Types Eye – Lasik Varicose Veins
Healthcare Reform for ASC’s• Niche Services• Employer drug screenings• On-site diagnostic x-rays• Target - Seasonal Groups – Spring Break• Orlando – Resort Areas
Healthcare Reform for ASC’s• NY Mammograms / Tiered Services• Dual Storefronts• Dual Pricing• Dual Service Levels• Same Diagnostic Area
Why ASC’s Continue to be on the Rise1) Growth in surgeries performed in ASCs parallels the historic shift away from hospital inpatient surgeries toward outpatient settings.2) A number of factors account for the growth in ASCs including population health guidelines for disease screening (e.g., colorectal cancer screening), shift in site of services away from the hospital outpatient setting to ASCs, payer incentives to pay for care in the most cost- effective setting, demographic changes, and consumer and physician preferences.
Why ASC’s Continue to be on the Rise3) Much of the growth in outpatient surgeries was made possible by technological improvements that have allowed for faster patient recovery times. These advances include improved surgical techniques, anesthesia, and pharmaceuticals to better manage post-operative pain.4) Patients prefer ASCs because they offer lower copayments, more convenient locations, shorter waiting times, and easier scheduling for patients.
ASC’s – Solutions for HealthCare Extra! Extra! Fraud & Abuse in Healthcare 9 patients made nearly 2,700 ER visits in Texas !Hospital trips of 5 women, 4 men over 6 years cost taxpayers $3 million.• One of the nine spent more than a third of last year in the ER: 145 days. That same patient totaled 554 ER visits from 2003 through 2008.• Eight of the nine patients have drug abuse problems• Seven were diagnosed with mental health issues• Three were homeless• Five are women whose average age is 40• Four are men whose average age is 50• The average emergency room visit costs $1,000. Hospitals and taxpayers paid the bill through government programs such as Medicaid• A task force is seeking ways to divert non-emergencies away from emergency rooms.
Healthcare Reform for ASC’sSometimes We Change Our Strategies and Methods Adaptation to the Market, Our Clients and the Financial Climate is Necessary
Most Interesting Questions This Year• From the accounting department: – Why are the numbers on this balance sheet red and in (brackets)?• From the front desk clerk: – Someone from the state called looking for some paperwork, I told them we probably don‟t have it. We‟re really bad at keeping track of things around here.• From a MD in front of a JCAHO surveyor: – Why are we everything so different today?
References• 1 http://www.irs.gov/pub/newsroom/count_per_state_for_special_post_card_notice.pdf• 2 Office of the Actuary. Centers for Medicare and Medicaid Services. Number represents only non-LIS seniors.• 3 Kaiser Family Foundation. 2009 Employer Health Benefits Survey.• 4 U.S. Census Bureau, Current Population Survey. Annual Social and Economic Supplements, March 2009; and 45 CFR Parts 144, 146, and 147. http://www.hhs.gov/ociio/regulations/pra_omnibus_final.pdf• Presidents Budget and Your State http://www.whitehouse.gov/omb/budget_factsheet_tx/• Office of the Governor, Rick Perry http://www.governor.state.tx.us/highlight/health_care_texas• An Analysis of Recent Growth of Ambulatory Surgical Centers, KNG Health Consulting, LLC 2009• Newsweek http://www.newsweek.com/2010/11/08/a-q-a-with-texas-gov-rick-perry.html• Congressman Kevin Brady http://www.house.gov/apps/list/press/tx08_brady/pr_100728_hc_chart.html• Aloma Urgent Care http://www.alomaurgentcare.com/Services.htm• Austin ERs got 2,678 visits from 9 people over 6 years http://www.statesman.com/news/content/news/stories/local/04/01/0401er.html
For more information :Richard Bays RN, MBA, CPHQ, CLNCRBaysConsulting@gmail.comPhone (832) 316-2701