Healthcare Reform - R Bays

Healthcare Reform

Winds of Change for ASC‟s

Richard Bays MBA, RN, CPHQ, CLNC

Texas Ambulatory Surgery Center Society

2010 Annual Meeting

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 Texas

Small 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.


Closing 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.


• 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.


• 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.


Extending 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.


Strengthening 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 Texas

Make 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 Texas

Make 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?


Currently…

• 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.


Example…

• 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.

Healthcare Reform for ASC’s

The Future??

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 Obama's 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 law's 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.

http://www.amazon.com/gp/product/images/1609410157/ref=dp_image_0?ie=UTF8&n=283155&s=books

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.


What Can My ASC Do

While The Health Care

Reform Issues Are

Worked Through?


1) 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


2) 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 ?


3) Let‟s get proactive !!

Preventative Treatment / Screening

Colonoscopy, Cataract-Eye, Cancers

Health Plan Coverage

Promote yourself in community

These procedures are strongly

associated with age and represent

essential services to Medicare

beneficiaries.


"The doctor say he's comin', but you

gotta pay him cash." Joe Walsh/Don Henley

„Life in the Fast Lane‟ from the „Hotel California‟ Album

December 8, 1976


4) Niche Services / Cash Pay

What Specialties are Marketable to

Your Center?


High Demand Specialties

Bariatric

Botox

Cosmetic – All Types

Eye – Lasik

Varicose Veins

http://www.healblog.net/image.php?title=Cosmetic Surgery&description=Cosmetic Surgery&url=uploads/2009/12/Cosmetic-Surgery.jpg

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 Rise

1) 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 Rise

3) 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 HealthCareExtra! 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.


Sometimes 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

• President's 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 ER's got 2,678 visits from 9 people over 6 years

http://www.statesman.com/news/content/news/stories/local/04/01/0401er.html

http://www.irs.gov/pub/newsroom/count_per_state_for_special_post_card_notice.pdf

http://www.hhs.gov/ociio/regulations/pra_omnibus_final.pdf

http://www.whitehouse.gov/omb/budget_factsheet_tx/

http://www.governor.state.tx.us/highlight/health_care_texas

http://www.newsweek.com/2010/11/08/a-q-a-with-texas-gov-rick-perry.html















http://www.house.gov/apps/list/press/tx08_brady/pr_100728_hc_chart.html

http://www.alomaurgentcare.com/Services.htm

http://www.statesman.com/news/content/news/stories/local/04/01/0401er.html

For more information :

Richard Bays RN, MBA, CPHQ, CLNC

[email protected]

Phone (832) 316-2701

mailto:[email protected]