Hospitals merge with other hospitals.
Insurance companies are acquiring hospitals.
Hospitals are buying, or creating, their own insurance companies.
Insurance companies are acquiring other insurance companies.
Twenty-five years ago you could still find small community hospitals with local businessmen and prominent physicians sitting on their Boards of Directors. Larger metropolitan cities could have up to fourteen or more hospitals. Those “good old days” of local or neighborhood control of the healthcare delivery system are sweet memories to some and “good riddance” to others. Mergers and acquisitions have altered the healthcare delivery system through the growth of multi-institutional not-for-profit hospitals and the significant expansion of investor owned for-profit organizations. Consolidation within the healthcare delivery system is viewed as a quick way to achieve efficiencies and reduce the cost of care. In the bygone period before the cost of healthcare became every politician’s go to stump speech, health insurance and healthcare delivery were separate businesses that often found themselves as adversaries in negotiations over prices.
Last week National Security Agency (NSA) contractor Edward Snowden was back in the news when the White House officially responded to a petition requesting the Obama administration pardon Mr. Snowden for revealing widespread government surveillance on millions of Americans. Instead of constructively addressing these issues, “Mr. Snowden's dangerous decision to steal and disclose classified information had severe consequences for the security of our country and the people who work day in and day out to protect it,” the White House response reads.1 The official response recommends that rather than disclose sensitive information to the press, Mr. Snowden should have taken the issue up with the proper U.S. government channels: “Challenge it, speak out, and engage in a constructive act of protest.”In the same week, the Office of the Inspector General of the Intelligence Community (IC IG) sent a congressional notification to intelligence oversight committees updating them of the IC IG support to the State Department recently released memo that former Secretary of State Hillary Clinton sent emails with classified information in them through her private email account without marking them as classified. The inspector general found that a sample of Clinton's emails contains information that was classified "when they were generated," which therefore "should never have been transmitted via an unclassified personal system." The IC IG found four emails containing classified IC-derived information in a limited sample of 40 emails of the 30,000 emails provided by former Secretary Clinton.2
Hospitals and physician groups are carefully watching the growing popularity of high-deductible health plans (HDHP) which result in patients taking on more of a financial responsibility for their healthcare. HDHPs and health savings accounts (HSA) are meant to incentivize consumers to manage the costs of their healthcare. For 2015, the Internal Revenue Service’s definition of high-deductible is $1,300 for an individual and $2,600 for a family. Maximum out-of-pocket expenditures are $6,450 and $12,900 for individuals and families, respectively. Many, but not all, HDHPs include preventive care such as annual physicals or immunizations, as a no-cost benefit.
A few weeks ago, the healthcare industry, along with most Americans, was waiting for breaking news from the Supreme Court regarding the Affordable Care Act (ACA) and several other pending decisions. Since then, the Centers for Medicare and Medicaid Services (CMS) has been rolling out press releases faster than ever. Some of the breaking news like the recent compromise with the American Medical Association (AMA) on ICD-10 is final (or as final as CMS has ever been regarding anything dealing with ICD-10), whereas other announcements concern proposed rule changes. CMS rolled out several significant test balloons in the 800-page Proposed 2016 Medicare Physician Payment and Fee Schedule Rule. These include:
The 2-midnight rule was effective October 1, 2013 and from the start it was contentious. The Centers for Medicare and Medicaid Services (CMS) has over the past few years attempted to explain, clarify and respond to the ongoing assault from the American Hospital Association (AHA) to eliminate the policy. A week before it was adopted, Rich Umbdenstock, President and CEO, AHA called the regulation fundamentally flawed.1 In the ensuing months, the AHA filed a lawsuit. The CMS offered various settlements and postponement of enforcing the rule.
Before Medicare was law, many uninsured seniors lived under the fear of bankruptcy if they became ill and needed expensive medical service. When the Medicare bill was being debated, the usual conservative pundits argued that Medicare would ruin our “wonderful medical service.” A future President and strong conservative, Ronald Reagan lent his voice to an 11-minute record album called “Ronald Reagan Speaks out against Socialized Medicine.” It delivered a strong warning against the dangers of government involvement in health care. “One of the traditional methods of imposing statism or socialism on a people has been by way of medicine,” Reagan says. “It’s very easy to disguise a medical program as a humanitarian project.” He calls on those listening to his record to contact their Congressman and oppose the legislation. 1 Some swore that Medicare would be the end of good patient care. Today, the nation’s seniors, most politicians and even providers praise Medicare coverage. Seniors hope for expanded services to cover other medical and dental needs. They are aware of the low administrative costs and excellent care that they receive under Medicare.
To enroll in Medicare, providers and suppliers must use the Provider Enrollment, Chain and Ownership System (PECOS). According to CMS, as of December 31, 2014, there were about 1.8 million healthcare providers and suppliers enrolled in PECOS and, in fiscal year 2014, Medicare paid $554 billion for healthcare and related services.1 Moreover, CMS estimates that roughly 10 percent of the monies paid were paid improperly. Because of such high expenditures and potential for improper payments, the government is continuously looking closely at the program to minimize opportunities for fraud, waste and abuse. As such, it should come as no surprise that the Government Accountability Office’s (GAO) recent June 2015 report: Additional Actions Needed to Improve Eligibility Verification of Providers and Suppliers (http://www.gao.gov/products/GAO-15-448) (Report), has identified some areas of vulnerability in the CMS enrollment processes that could be contributing to the 10 percent of improper payments.