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8/11/2019 Healthcare Reform Webinar
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December 7, 2010
Martha BeardManaging DirectorJ.P. Morgan Treasury ServicesHealthcare Industry Segment Executive
H E A L T H C A R E R E F O R M I M P A C T S
Ecosystem of Change for Providers
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Legislative landscape
Market feedback, trends and challenges
Assess and prepare
Overview
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The Ecosystem of Change for Healthcare Providers
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Legislative Landscape
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Legislative Landscape
Administrative Reform: PPACA & HITECH*
Expansion of HIPAA: Section 1104 of PPACA modifies the 1996 HIPAA law to include
previously unaddressed administrative transactions
Creation of HITECH: Specifies responsibilities for Financial Institutions handling PHI
Detailed requirements for security and breach notifications of health information
HIPAA security rule for physical and technical safeguards to apply to BusinessAssociates (e.g., Receivables, Payables, Image Deposits)
Formalizes contractual requirements for Business Associate arrangements
Security
RelatedRequirements
Heightened security requirements for Business Associate groups
Increases the regulatory oversight of Health and Human Services (HHS)
More diligence required on breach reporting. Must provide HHS with an annual
report required on certain health-related breaches
New
Regulatory
Oversight
HHS must be notified of any breach of over 500 records and will publish thisinformation on its web site.
State Attorney Generals have new enforcement powers on behalf of individuals inthe instance of a privacy breach. Financial penalties cover costs of covering abreach and attorney fees.
New Risk
Management
Requirements
*PPACA: Patient Protection and Affordable Care Act
HITECH: Health Information Technology for Economic and Clinical Health
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Legislative Landscape
Administrative Simplification Timeline*
Healthcare EFTs added to HIPAA
Transaction Set
Operating rules for eligibility verification and
claim status transactions
Unique Health Plan Identifier requirement
Operating rules for EFTs and HC payment
and remittance advice transactions
Operating rules for claims, enrollment anddisenrollment in plans, plan premium
payments, and referral certification and
authorization
HIPAA 5010 Compliance
Medicare payments must be electronic
Standard for EFT
Standard and operating rules for claims
attachments
2010 2011 2012 2013 2014 2015 2016
March
January
October
January
January
January
January
January
July
July
July
January
January
January
* The Patient Protection and Affordable Care Act (P.L.111-148)
Title 1, Section 1104; Center for Medicare and Medicaid Services
Plan certification: Eligibility for health plan,
claim status, EFT, HC payment and
remittance advice
Plan certification: claims, enrollment and
disenrollment in plans, plan premium
payments, and referral certification and
authorization
AprilDecember
December
Adoption Date
Effecti ve Date
Key Penalty
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Potential Congressional outcomes3:
Defunding the new health law
Repealing portions of the law
State leaders may consider:
Implementing insurance exchanges
Reforming Medicaid
Forming state measures and/or filing
lawsuits relating to parts of the health law
Republicans gained (net):
House majority (242 Republicans, 191 Democrats,and 2 seats not yet projected)1
6 Senate seats (47 Republicans and 53 Democrats)1
6 Governors seats (29 Republicans, 20 Democrats,
and 1 Independent) 2
11 State Legislatu res (25 Republican, 16 Democratic,
7 Divided, and 2 Nonpartisan/Undecided) 2
Legislative Landscape
Potential Impact of 2010 Mid-Term Elections
= High
Propensity Indicator:1 CNN.com
2 National Conference of StateLegislatures www.ncsl.org
3 HIMSS Webinar November 5, 2010
4As determined by J.P. MorganHealthcare using: 2010 mid-term
election results of state leadership,key state measures and/or lawsuits
filed opposing healthcare reform, and
action(s) taken towards implementinginsurance exchanges and/or
healthcare reform
5 Sources: StateVote 2010, National
Conference of State Legislatures,National Health Law Program
Propensity to Implement Healthcare Reform4,5
= Medium
= Medium Low
= Low
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Market Feedback, Trends
and Challenges
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Market Feedback, Trends and Challenges
Topics Discussed with Financial Managers
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Interpretation of the billand policy environment
Assessment of operationaland financial readiness
Resources andneeded expertise
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Market Feedback, Trends and Challenges
Key Challenges Centered Around Four Areas
Business
Model
Revenue
Mix
Operational
Requirements
Capital
Expenditures
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Market Feedback, Trends and Challenges
Key Challenges
Capital for investments required as a result of reform, with
uncertain ROI
Meaningful use of EHR and ability to report on quality measures
Penalties by 2015 if meaningful use has not been reached
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OperationalRequirements
BusinessModel
RevenueMix
Capital
Expenditures
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Revenue
Mix
Operational
RequirementsBusiness
Model
CapitalExpenditures
Quality of care standards
Uncertainty on establishment of accountable care
organizations (ACOs)
- Impact on reimbursement
-Ability to compete in the market effectively
- Draw for new patients
Service and care bundling
Patient mix (increasing individual coverage: demographics)
Streamlining systems: judicious vs. opportunistic investments
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Market Feedback, Trends and Challenges
Key Challenges
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BusinessModel
Operational
Requirements
CapitalExpenditures
Revenue
Mix
Shift in sources of revenue and changes in payer mix
Increase in government funded coverage
New coverage through State Insurance Exchanges Changes in coverage by employers
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Market Feedback, Trends and Challenges
Key Challenges
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Reform may have unintended consequences, which when coupled with the currenteconomic environment, can pose financial and operational challenges
Market Feedback, Trends and Challenges
Implications of Administrative Simplification
Reform wil l likely have unintended
consequences
Scarcity of expert resources to lead
projects and effect change
Certainty of capital market valuation
of hospitals
Shift in payer mix and new, untested
revenue streams, exacerbating
dependence on cross-subsidies
Irrespective of reform, operating margins
and the economic downturn have
adversely impacted balance sheets
Uncertainty of Medicaid and Medicarereimbursement funding changes
Continued low interest rate environment
will strain investment income
Adverse implications to debt ratings
Uncertainty and challenging macroeconomics exacerbate a difficult environment
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Assess and Prepare
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Assess and Prepare
Coming Full Circle: From Reform to Action
Impacts &Opportunities of
Reform
Building a Preparedness Plan
GoGreen
EnhanceSecurity
& ReduceFraud
ImproveAudit
Controls
ManageTradingPartners
OptimizePayment
Flows
Administrative Simplification
Political Considerations
Legislative Landscape
Business Model
Operational Requirements
Revenue Mix
Capital Expenditures
Challenges
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Assess and Prepare
Reform is Driving Key Business Themes
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ACTION
While challenging, healthcare reform will impact key administrative processes.
Consider actions that wil l drive business improvements and free capital for investment
Go
Green
EnhanceSecurity
& ReduceFraud
Oversight,
compliance and
contract services
ImproveAudit
Controls
Dynamic and
accessible reporting
and data/funds
management
Improve payment and
data flows among
industry players to
reduce costs and
improve compliance
ManageTradingPartners
OptimizePayment
Flows
Flexible payment
processes, improved
reporting, and
control led expenses
Operating and cos t
efficiencies via payment
and administrative
simplificationVALUE
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How Your Banking Partner Can Help
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Prepare for Reform
Your banking partner can help you succeed in the new post-reform environment and help
streamline administrative processes through innovative treasury solutions.
Serve as Industry Thought Leaders
As the market leading ACH originator, J.P. Morgan is partnering with NACHA, the electronic
payments network, to support the processing of healthcare payments and to actively develop a
next-generation industry solution.
Manage PHI; Adopt HITECH with vigilance
As a registered covered entity, J.P. Morgan will continue to develop optimal security
controls to address industry requirements for managing and processing protected health
information (PHI).
Optimize Treasury Structures
As business models change, your bank can help you consolidate and improve transparency of
funds, reduce costs and free up investment capital.
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Questions?
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This presentation was prepared exclusively for the benefit and internal use of the J.P. Morgan client to whom it is directly addressed and delivered (including such clients subsidiaries,
the Company) in order to assist the Company in evaluating, on a preliminary basis, certain products or services that may be provided by J.P. Morgan. This presentation contains
information which is confidential and proprietary to J.P. Morgan, which may only be used in order to evaluate the products and services described herein and may not be disclosed to
any other person. In preparing this presentation, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from
public sources or which was provided to us by or on behalf of the Company or which was otherwise reviewed by us.
This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by J.P. Morgan.
Neither this presentation nor any of its contents may be used for any other purpose without the prior written consent of J .P. Morgan. J.P. Morgan makes no representations as to the
legal, regulatory, tax or accounting implications of the matters referred to in this presentation.
Notwithstanding anything in this presentation to the contrary, the statements in this presentation are not intended to be legally binding. Any products, services, terms or other matters
described in this presentation (other than in respect of confidentiality) are subject to the terms of separate legally binding documentation and/or are subject to change without notice.
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J.P. Morgan is a marketing name for the treasury services businesses of JPMorgan Chase Bank, N.A. and its subsidiaries worldwide.
J.P. Morgan is licensed under U.S. Pat Nos. 5,910,988 and 6,032,137.
JPMorgan Chase & Co. All rights reserved
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