HealthCare Reform - 10 Things You Should Know

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Ten Things You should know about HeathCare Reform

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HealthCare Reform - 10 Things You Should Know

  1. 1. EFFECTIVE DESIGN. CRITICAL INSIGHTS. ACTIONABLE RESULTS.HEALTHCAREMARKET RESEARCH SPECIALISTSTEN THINGS YOU SHOULD KNOW ABOUTTHE PATIENT PROTECTION AND AFFORDABLE CARE ACT THE DOMINION GROUP
  2. 2. 1What is the Patient Protection and Affordable Care Act and when was it enacted? THE DOMINION GROUP 2
  3. 3. WHAT IS IT?• The Patient Protection and Affordable Care Act (PPACA) is a federal statute that was signed in to law by President Barack Obama on March 23, 2010.• The legislation is a product of the health care reform agenda of the 111th Congress and the Obama administration.• Key aspects of the legislation include the following: – Reform of the private health insurance industry – Reform of public health insurance programs – Improve coverage for those with pre-existing conditions – Expand access to coverage for over 30 million Americans – Reduce the long-term costs of the United States health care system.• The legislation passed both houses of congress by narrow margins across deeply divided party lines in March of 2010. THE DOMINION GROUP 3
  4. 4. 2What are some of the key provisions? THE DOMINION GROUP 4
  5. 5. KEY PROVISIONS• Constitutionality of the legislation has received numerous legal challenges with a review of the law slated for the Supreme Court in late 2011 or early 2012.• Public opinion, as the law was drafted and since passed, was and remains divided.• The Act is often referred to by the nickname “Obamacare”, largely by opponents.• The law includes numerous health-related provisions to take effect over a four-year period beginning in 2010. Some of the primary provisions to the legislation are: – Guaranteed issue and community rating will be implemented nationally so that insurers must offer the same premium to all applicants of the same age, sex, and geographical location regardless of pre-existing conditions. – Medicaid eligibility is expanded to include all individuals and families with incomes up to 133% of the poverty level. – Health Insurance Exchanges (HIEs) will commence operation in each state, offering a marketplace where individuals and small businesses can compare policies and premiums, and buy insurance (with a government subsidy if eligible). – Firms employing 50 or more people but not offering health insurance will pay a "shared responsibility payment" if the government has had to subsidize an employees health care. THE DOMINION GROUP 5
  6. 6. KEY PROVISIONS– A shared responsibility requirement, requires individuals not covered by Medicaid, Medicare, or other government programs to maintain insurance or pay a penalty.– Medicare prescription drug payments are to be increased.– Changes are enacted which allow a restructuring of Medicare reimbursement from "fee-for- service" to "bundled payments".– Establishment of a national voluntary insurance program for purchasing community living assistance services and support.– Low income persons and families above the Medicaid level and up to 400% of the poverty level will receive subsidies on a sliding scale if they choose to purchase insurance via an exchange.– Very small businesses will be able to get subsidies if they purchase insurance through an exchange.– Additional support is provided for medical research and the National Institutes of Health.– Enrollment into CHIP and Medicaid is simplified with improvements to both programs.– The law will introduce minimum standards for health insurance policies and remove all annual and lifetime coverage caps.– The law mandates that some health care insurance benefits will be essential coverage for which there will be no co-pays.– Policies issued before the law came into effect are grandfathered in and are mostly not affected by the new rules. THE DOMINION GROUP 6
  7. 7. 3What are some of the challenges and what progress has been made? THE DOMINION GROUP 7
  8. 8. KEY CHALLENGES• The healthcare industry as a whole has lagged behind Information technology and needed infrastructure to support the kind of collaborative models enacted by healthcare legislation.• Even today, some of the collaborative models (RHIOs, EIHs, etc.) that were initiated more than 5 years ago continue to face challenges with regard to their overall sustainability.• Legislation is enacted but little guidance is offered on how these shared-service models should be governed, led, organized or measured.• The industry has made progress in the deployment of EHRs considered the “building blocks” for increased collaboration among providers but significant challenges still exist with optimizing their overall benefit.• Massive investment is required to standardize and accomplish the informational requirements that are needed to achieve the fundamentals of the law. THE DOMINION GROUP 8
  9. 9. 4What’s the timeline for some of the key aspects of the legislation? THE DOMINION GROUP 9
  10. 10. TIMELINE FOR SOME OF THE KEY INITIATIVES National Health Affordable Health Information Network Care Act becomes Law to be completed Health and Human Services A Plan for National Strategy to Value Based Purchasing in Medicare Improve the Quality of Healthcare Incentives to Hospitals to improve Care 2010 2011 2013Spring 2010 Winter 2010 Winter 2011 Spring 2011 Winter 2012 Spring 2012 Spring 2014 Long-Term Care MDS 3.0 For Medical Providers For Medical Providers Minimum Data Set from 2.0 to 3.0 EHR Incentive Payments Begin EHR Incentive Payments Scheduled to end in 2016 For Medicaid Providers For Senior Citizens Free Preventive Care and Improved For Employees States can Launch their Programs Creation of Health Insurance Care After Leaving Hospital Exchanges Regional Health Information Organizations 2007 Organizations (ACOs) Accountable Care Effort began in 2008 to Enable the Encourage Integrated Health Systems formation of Health Information Exchanges For a complete timeline of all the healthcare reform provisions refer to: www.healthcare.gov
  11. 11. 5The legislation predicts that new models ofcare (e.g., shared services) will reduce costsand improve the quality of care provided.What’s an example of a model introducedby the legislation? THE DOMINION GROUP 11
  12. 12. ACCOUNTABLE CARE ORGANIZATIONS (ACOs)• Background – Centers for Medicare and Medicaid services (CMS) are driving change for more coordinated care through ACOs. – CMS estimates it will achieve 960 billion dollars in saving through the use of ACOs over the next 3 years. – The laws emerging around the formation of ACOs provide extensive freedom in how they are structured and managed. – A broad range of entities are eligible to form ACOs but the challenge will be creating effective infrastructure to achieve clinical integration among the participants of the ACO. – CMS will begin paying ACOs providing service beginning January 1, 2012. – CMS will measure the performance of ACOs on a wide range of performance measures to determine whether or not they have achieved improvements in quality of care while reducing the overall cost of care they are providing. THE DOMINION GROUP 12
  13. 13. THE ACO MODEL CMS Measured Outcomes Patient/Care Giver ExperienceNational Health Information Network Care Coordination Patient Safety Health Information Exchanges Preventive Health Regional Health Information Organizations At-Risk Population/Frail Elderly Health Network Systems ELECTRONIC HEALTH DIAGNOSTICS TREATMENT INFORMATION (Facilities and Labs) ON-LINE INITIATED (Patient Records) PATIENT ACCESS ACO TREATMENT AND TREATMENT AFFILIATED ON –GOING PHYSICIANS SHARED CLINICAL PATIENT TERMINATEDGovernance (Surgeons, Referring) SERVICES TREATMENT Legal Structure Leadership and Management Assigned Beneficiaries Billing Collections Revenue Management Inventory Quality/Cost Measures Management EXTERNAL PARTNER PRODUCTS TREATMENT FACILITIES (Pharmaceuticals, etc.) (Hospitals, Long-term, etc.) SHARED Quality SHARED ADMINISTRATIVE Measures Legal ADMINISTRATIVE SERVICES SERVICES Registration Credentialing Payers Compliance Scheduling
  14. 14. 6What are the requirements for starting an Accountable Care Organization (ACO)? THE DOMINION GROUP 14
  15. 15. ACO REQUIREMENTS• Requirements to form an ACO – Formal legal structure to receive and distribute shared savings. – Sufficient numbers of primary care professionals for the assigned beneficiaries. – Minimum of 5,000 assigned beneficiaries. – Agree to participate for no less than 3 years. – Document information regarding participating health professionals to support beneficiary assignment. – Leadership and management structure must include clinical and administrative systems. – Defined processes must promote evidence-based medicine; report data for quality and cost measures; coordinate care – Demonstrate model of patient-centeredness Source: Centers for Medicare and Medicaid Services 15 THE DOMINION GROUP
  16. 16. 7 What changes are taking place with Long-term care and what’s the potential impact? THE DOMINION GROUP 16
  17. 17. LONG-TERM CARE• Long-term Care Legislation – Long-term Care industry going from Minimum Data Set (MDS) 2.0 to MDS 3.0. – Most significant impact of the legislation is in the treatment of rehabilitative practices for long-term care patients. – But, the legislation imposes an increasing administrative burden on long-term care providers in that their overall processes must change and they will be required to monitor/measure their treatment practices far more than before. – Associated with the MDS changes are changes in reimbursement categories that have the potential for long-term care treatment facilities to totally reinvent the way they provide care to certain types of patients. – Long-term care providers will be required to develop clinical programs to meet the new CMS objectives in order to get paid for their services. – These changes have the potential to have a significant impact on the industry. Source: Centers for Medicare and Medicaid Services 17 THE DOMINION GROUP
  18. 18. 8Transitioning to digital healthcare information is a key component of the legislation. How will a National Health Information Network be built? THE DOMINION GROUP 18
  19. 19.  National Health Information Network (NHIN) A “network of networks” is built off of the RHIO and HIE model with the goal of making patient information available to health delivery organizations. Health Information Exchanges (HIEs) Offers the potential to transform the healthcare 1 marketplace through increased communication and collaboration. Regional Health Information Orgs (RHIO) 2 Geographically defined networks which develop and manage a set of contractual conventions and terms. 3 Network Health Systems Extend electronic health records to exchange patient health 2 information Electronic Health Records 1 Building blocks that supply data for the RHIOs and HIEs.
  20. 20. 9Electronic health care records (EHRs) areconsidered key to transitioning to digital healthcare information.What’s the plan and incentives for this to happen? THE DOMINION GROUP 20
  21. 21. ELECTRONIC HEALTH RECORDS ”THE BUILDING BLOCKS” 3 Stage 3 Nursing/clinical documentation (e.g. vital signs, flow sheets) is required; Nursing notes, care plan charting, and/or electronic medication administration” Nursing Documenation” 2 record (eMar) system are scored with extra points and are implemented. Stage 2 Major ancillary clinical systems feed data repository (CDR) that provides physician access for retrieving and reviewing results. ” Clinical Data Repository” 1 The CDR contains medical vocabulary and the clinical decision support rules engine (CDS) for rudimentary conflict checking. Stage 1 Major ancillary clinical systems are installed (i.e., pharmacy, laboratory, radiology). Healthcare providers ” Meaningful Use” must meet established “meaningful use criteria” in the deployment of electronic healthcare records in order to receive incentive payments from the Center for Medicare and Medicaid services (CMS).Source: HIMSS analytics Stage 5 Stage 7 Closed loop medication administration The hospital no longer uses paper charts is fully implemented. eMAR and bar to deliver and manage patient care. Stage 4 coding are implemented and Stage 6 Computerized Practitioner Order integreated with CPOE. Full physician documentation/charting Entry (CPOE) for use by any (structured templates) is implemented clinician is added to the nursing for at least one patient service area. and CRD environment .
  22. 22. 10The legislation predicts that it will generate$409.2 in revenues over ten years to offset increases in expenses. Where does the revenue come from? THE DOMINION GROUP 22
  23. 23. WHERE DOES THE REVENUE COME FROM? Broaden Medicare tax base for high- income taxpayers: $210.2 billionAnnual fee on health insurance 1providers: $60 billion 40% excise tax on health coverage in excess of $10,200/$27,500: $32 billionImpose a fee of manufacturers Taxesand importers of branded Impose 2.3% excise tax ondrugs: $27 billion 2 manufacturers and importers 5 Annual Reporting of certain medical devices: $20 billion Fees $409.2 billion Changes over 10 years Require information reporting Raise 7.5% Adjusted Gross on payments to corporations: Income floor on medical $17.1 billion expense to 10%: $15.2 billion Tax Law and Other Revenue All other revenue sources: Coverage $14.9 billion Limit health flexible spending 4 Changes arrangements in cafeteria 3 plans: $13 billion END OF 2014 78 billion will be realized 1 2 3 4 5 Increased Taxes Reporting Changes Other Revenue Tax/Coverage Changes Annual Fees $262.2 billion $17.1 billion $14.9 billion $28.2 billion $87 billion 64% 4% 4% 7% 21%
  24. 24. SUMMARY• The goal of the legislation is to reduce soaring healthcare costs, jumpstart innovation, improve patient information and the overall quality of care.• Substantial investments have been made in electronic health records (EHR) as the foundation for the infrastructure going forward.• Continued investments in healthcare IT and the adoption of standards will be needed to achieve the overall goals of the legislation.• Transition toward a National Healthcare Information Network (target 2014) will require even more collaboration between the Federal and Private sector.• Although progress has been made it remains to be seen whether the estimated costs savings and outcomes are achieved as a result of the law.• Opponents still plan to challenge the legislation in the Supreme Court. THE DOMINION GROUP 24
  25. 25. EXCELLENCE IN MARKET RESEARCH 1800 Alexander Bell Drive, Suite 515 Reston, VA 20191 703-234-2360 Phone 703-234-1281 Fax tdg@thedominiongrp.com THE DOMINION GROUP 25

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