Mnet Health News delivers the latest news and information articles for the world of healthcare.

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Healthcare Mergers & Acquisitions Strong in First Half of 2017

Revenue cycle management and healthcare IT mergers and acquisitions exceeded $14.7 billion in the first half of this year across 66 deals, according to the latest M&A Update from ACA International member company Greenberg Advisors, LLC.  “Transactions were completed in every corner of the market, large and small, and among technology and service companies alike. 

The activity mirrored the blistering pace set in the first half of 2016,” according to the report.  The latest data show that a majority of transactions in revenue cycle management and healthcare IT were under $25 million in enterprise value, but 30 percent of all transactions did exceed $50 million. This is a notable increase from the second half of 2016, when 18 percent of all transactions exceeded $50 million, according to the report.

Twenty-eight companies have made multiple acquisitions in revenue cycle management and healthcare IT since the beginning of 2016, it states.  “It is good to see the level of deal activity and interest in [accounts receivable management] rising again, creating more opportunities for owners and investors,” Brian Greenberg, CEO of Greenberg Advisors LLC, said in a news release. 

“A wide variety of buyers—from inside and outside of the ARM industry, from Europe and elsewhere—tell us that they are interested in making strategic acquisitions.” The findings for the first half of 2017 also show that 48 percent of sellers in accounts receivables management include firms focused on healthcare receivables or financial institutions.  Greenberg will be part of a panel of speakers at ACA International’s 2017 Fall Forum & Expo Nov. 1-3 at the Loews Chicago Hotel.

In “Dissecting the Deal,” scheduled for Nov. 3, Greenberg will join Harry Strausser III, Corporate Vanguard at Eastern Revenue Inc.; Michael Lamm, president/CEO of Corporate Advisory Solutions LLC; Michael Ginsberg, president/CEO of Kauklin Ginsberg Company; and Thomas Edens, president of Marion Financial Corp., will discuss how companies approach potential M&A transactions for buyers and sellers.

More information: http://bit.ly/2wHvKy4 and https://www.acainternational.org/events/fallforum2017

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Uninsured Rate on the Rise for Some Consumer Demographics

The uninsured rate for certain groups of consumers divided by their age, income and access to Medicaid, is on the rise, according to The Commonwealth Fund’s fifth annual survey tracking the Affordable Care Act.  There was a significant increase in the uninsured rate for consumers ages 35 to 49; adults earning more than 400 percent of the federal poverty level ($47,520 for one person and $97,200 for a family of four); and those residing in states that have not expanded Medicaid, according to a news release on the survey.

The Commonwealth Fund’s survey included a nationally representative sample of 4,813 adults ages 19 to 64 living in the U.S.  The uninsured rate for respondents ages 35 to 49 increased from 11 percent in 2016 to 15 percent in 2017, according to the survey.  The uninsured rate for adults with incomes at or above 400 percent of the federal poverty level increased from 2 percent in 2016 to 5 percent in 2017.  Consumers in this income group are responsible for the full insurance premium and are subject to annual premium increases, according to the survey.

Lastly, the uninsured rate for consumers living in states that did not expand Medicaid increased from 16 percent in 2016 to 19 percent in 2017.  However, “despite the uptick in uninsured rates for some groups, the overall rate remained statistically unchanged from 2016 at 14 percent, representing an estimated 27 million working-age adults nationwide,” The Commonwealth Fund reports.  “In the years since the Affordable Care Act was passed, more than 20 million Americans have gained health insurance,” said Sara Collins, vice president for Health Care Coverage and Access at The Commonwealth Fund and the report’s lead author, in the news release.

Expanding Medicaid in all states, making premium subsidies accessible to more consumers, and assisting them with finding coverage on the Affordable Care Act marketplaces could remediate limits on access to coverage for the uninsured, according to the survey.  Other findings in the survey include:

Subsidies help consumers with low incomes afford premiums. While about 64 percent of consumers with incomes below 250 percent of the federal poverty level reported their premiums “were very or somewhat easy to afford,” only 34 percent of consumers with incomes above those levels provided the same response.

Cost was the primary reason consumers did not enroll in a plan.  Seventy-four percent of uninsured adults who shopped the marketplaces and didn’t enroll in a plan or obtain other coverage reported they could not find a plan they could afford.  However, 66 percent of consumers who reported they didn’t enroll in a plan because they couldn’t afford it had incomes that meet the qualifications for premium subsidies or Medicaid.

In 2017, 57 percent of consumers enrolled in plans through the marketplaces are estimated to have coverage with cost-sharing reductions that lower their deductible, copayments and coinsurance.

More information:  http://bit.ly/2wKef0d

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New Report Shows Growth in Healthcare Prices Near All-Time Low

In the past year, from September of 2016 to September of 2017, healthcare prices have risen a scant 1.1%, which is the slowest rate of growth in the past two years according to a new report from Altarum.  That rate of growth is just barely higher than the all-time low of .9% which happened in 2015.  Since that point in time, that number has fluctuated between 1.2% and 2.3%.

The report points out that such a small increase in healthcare prices was likely due to a drop in prescription drug prices recently.  Growth in prescription drug prices has dropped to 1.4% in September from 2.7% in August.  

The report also found that total healthcare spending was 4.3% higher in September in comparison with the same month the previous year.  The expected growth of the healthcare industry for 2017 is forecast at 4.5%.  This rise in healthcare spending is viewed as modest in an industry known for heavy spending.

At the beginning of the century, in the early 2000’s, growth in healthcare spending was normally about 10%; however, the numbers have been declining significantly in recent years.  One reason for such a dip is likely the move from inpatient care previously to an outpatient setting according to analyzation from the creators of the Altarum report.

Publishers of the report point out that the trend in healthcare is moving away from inpatient healthcare and toward the outpatient care model.  Even employment numbers are demonstrating the same trend.  Hospitals have recently slowed their hiring this year in comparison with recent years.  On average, hospitals are likely to add about 5,000 new jobs per month in 2017.  This is about half the hires in the previous two years based on data from the report.

One report analyst pointed out that the slowdown of hiring at hospitals could simply be a return to previous healthcare industry patterns after several years of strong hiring gains resulting from the implementation of the Affordable Care Act (ACA).  Another analyst pointed out that a slowdown in hiring is most likely the best way to control healthcare spending because that is typically where most of the money is spent; payroll for employees.

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News & Notes

Survey: Physicians Call for Reduction in Medicare ‘Regulatory Complexity’

Physician practices face too many regulatory burdens, according to the Medical Group Management Association Regulatory Burden Survey.  Nearly half of respondents said they spend more than $40,000 per FTE physician, per year, to maintain compliance with federal regulations.  http://bit.ly/2vVB6Ji

 

Mandatory Bundled Payment Models on the Chopping Block

The U.S. Department of Health and Human Services has proposed to end mandatory bundled payment programs, which pay multiple providers with a single amount payment for a complete “episode of care,” Fierce Healthcare reports.  Supporters say the bundled payments are a step toward value-based delivery models while critics say mandating their use goes too far.  http://bit.ly/2wX68Bo

 

Healthcare Providers Slow to Embrace Consumerism

Consumer demands are evolving; however, healthcare providers are not keeping up with their expectations, according to results from the Kaufman Hall’s Healthcare Consumerism Index. In fact, “fewer than one in 10 organizations are treating consumer expectations as a high priority by consistently applying and building consumer-centric capabilities,” a report on the results, “2017 State of Consumerism in Healthcare: Slow Progress in Fast Times,” states. http://bit.ly/2iB5CTO

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Apple & Amazon Quietly Begin Move into Healthcare Sector

Until recently, Amazon’s new lab at its headquarters in Seattle was a secret.  It was set up to identify business prospects within the field of healthcare; prospects such as telemedicine and EHR’s.  But Amazon is not the only company seeking to make moves into healthcare.  Rumors that Apple is in talks with healthcare organizations and hospitals to unify health records onto their iPhone have recently been confirmed.

Reportedly, Apple has been in talks with Crossover Health, a company based in Aliso Viejo, California (also home to Mnet Health).  Crossover is a startup that works with employers who are self-insured to provide them with medical services at clinics that are onsite.  This move has stoked the fires of speculation concerning Apple’s move into the healthcare arena.

While negotiations apparently continued for several months, they did not result in a deal ultimately according to one unnamed source.  Others have mentioned attempts to strike a deal with One Medical, a concierge primary care organization based in San Francisco.  Tim Cook, Apple CEO, has publicly expressed an interest in business opportunities represented within healthcare.  An interview in Fortune magazine in September quoted Mr. Cook as saying “There’s much more in the health area.  There’s a lot of stuff I can’t tell you about that [Apple] is working on…I do think it’s a big area for Apple’s future.”

Apple has hired several healthcare experts and consultants in the last few years.  The giant tech company has also collaborated with researchers from Stanford to improve its digital health software while also make the iPhone the right place to go for patient health information.  Two software tools have recently been released by Apple; the Apple HealthKit and ResearchKit, which were designed to share patient health information with developers and also to recruit patients for clinical studies.

Meanwhile, Amazon is currently developing an EHR platform, telemedicine options, and health apps for devices such as the Amazon Echo.  Amazon is said to call its covert team “1492,” which, of course, is the year that Christopher Columbus first sailed to the Americas.  Another interesting tidbit is that positions for this team can be searched using the keyword “a1.492.”  They are also working on healthcare apps for devices such as the Echo and the Dash Wand.

In other apparently related news, President Trump recently announces that the CEO of Apple, Tim Cook, has promised that his company will build three large new manufacturing plants in the United States.

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News & Notes

Second Quarter Health Spending Growth Estimates Decline

Health spending growth estimates for the start of the second quarter 2017, show 4.5 percent growth year-over-year, compared to 5.2 percent for the first quarter and 5.2 percent for 2016, according to the “Altarum Institute Center for Sustainable Health Spending Health Sector Trend Report” released in July 2017.

http://ow.ly/pL0c30eec1Z

 

Consumers Report Favorable Interactions with Healthcare Providers

Consumers surveyed by the Pew Research Center report positive experiences with their healthcare providers, including 87 percent with a doctor visit in the last year who said their “concerns or descriptions of symptoms were carefully listened to.” Twenty-three percent said they “felt rushed by their healthcare provider.” 

http://ow.ly/u2ud30eeeaY

 

Report: U.S. Healthcare System Remains Behind Other Countries

The Commonwealth Fund’s latest research on the U.S. healthcare system shows while there has been “significant progress,” the U.S. still lags behind other countries. For example, 33 percent of U.S. adults in the survey reported they did not take a prescription medicine, visit a doctor when sick or receive recommended treatment in the last year because of the cost; compared to 7 percent in Germany and the United Kingdom and 8 percent in Sweden and the Netherlands.

http://ow.ly/RaMd30eefpU

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Younger Generations More Likely to Avoid Healthcare Due to Cost

The impacts of possible changes, including repealing and replacing the Affordable Care Act, to healthcare legislation and services in the U.S. remain uncertain; but consumers are consistent in their concern about the cost of care, according to results from Bankrate’s recent Money Pulse survey.  Thirty-one percent of Millennials said they avoid medical care because of the cost, according to the survey of 1,002 adults in the U.S. conducted in May.

Twenty-five percent of Generation X, 23 percent of Baby Boomers and 8 percent of the Silent Generation in the survey said cost caused them to avoid medical care, Bankrate.com reports.  “It’s very concerning that people are forgoing medical attention because of the expense,” said Robin Saks Frankel, credit card analyst at Bankrate.com, in a news release. “Thirteen percent of respondents don’t have any health insurance at all—a risk that could cost them. 

Unexpected medical bills can lead to a huge financial burden that could take years to pay off should something go wrong.”  “Older millennials (ages 27-36) are most likely to forgo care due to cost … [and] about one in three Americans in that age group say they’ve chosen not to seek needed medical attention because they couldn’t afford it,” according to Bankrate.com.  

When asked how worried they are about access to affordable health insurance in the future, 35 percent of respondents said they are very worried; 21 percent said they are somewhat worried; 17 percent said they are not too worried; and 24 percent said they are not at all worried.  “That’s about the same level of concern we found when we asked the same question in August 2014, nearly a year after the opening of the health insurance exchanges created under former President Barack Obama’s healthcare overhaul,” Bankrate.com reports.

The survey also shows more than half (56 percent) of all respondents are concerned about health insurance coverage. Sixty-four percent of Generation X respondents said they are concerned about coverage; followed by 58 percent of Baby Boomers; and 56 percent of Millennials, according to Bankrate.com.  “That fear of the unknown is understandable, Tevi Troy, CEO of the American Health Policy Institute, told Bankrate.com. 

“But, he says coverage isn’t likely to change much for the estimated 177 million Americans who get health insurance through work. Employers are likely to continue providing affordable healthcare because it helps with recruitment, retention and employee morale—factors unrelated to any changes in government policy.”

More information:  http://ow.ly/9IEh30cOLsd and http://ow.ly/ixnA30dZvFJ

 

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Patients Really Do Want to Discuss Price & Payment Options Prior to Surgery

Recent surveys show that more than ¾ of patients believe that it is either important, or very important to know what their costs are going to be before a procedure or surgery.  More than half of those polled also said they would like to discuss options for financing prior to receiving treatment.  However, a majority of providers are not making these options available to patients according to the results of a patient survey conducted by ORC International and HealthFirst Financial.

This survey showed that only 18 percent of those surveyed said that their provider had spoken to them at any point in time over the previous two-year period of time.  57 percent of respondents said they thought it important, or very important for providers to offer payment programs for patients; offering payment plans without any interest being charged.  Only 8 percent of those surveyed had ever been offered a low or no interest finance option by their provider.

Of the millennials aged 18 to 36 years old, 40 percent said that they would be likely or very likely to switch to a different provider if they were able to offer them low or no interest finance options to resolve their medical bills.  A full 29 percent of respondents to the survey also said that they would move to another provider if the new provider was willing to offer them the option of an affordable payment plan.

No matter what the income level of those responding to the survey; everyone worries about the cost of healthcare.  42 percent are either concerned or very concerned about whether they can pay for the self-pay portion of their medical bills in the next two years.  For respondents making less than $35,000 per year, that same number jumps to 54 percent but falls to 24 percent for those making $100,000 or more per year.  

Patients would like to know what they will have to pay as early on in the process as possible. 77 percent of those surveyed said it was either important, or very important that providers make it clear what the cost of a procedure or surgery would be prior to the date of surgery.  63 percent stated that they found it important or very important that pricing lists are published detailing costs for common procedures.

People now find that they have less room in their budget to take on the self-pay portion of their medical bills.  53 percent of those polled said they were concerned about their ability to pay $1000 in medical bills; while 35 percent worried about paying $500 in medical bills and 16 percent worried about paying $250 or less. 

The reasons the survey was commissioned was to understand how consumers are dealing with medical expenses now and in the future.  The survey makes it clear that when providers don’t educate their patients about options for finance, patients are willing to switch providers altogether or delay necessary care while they search for necessary help.  Neither scenario is good for the financial health and welfare of a provider though; so it’s extremely important for providers to develop a plan to meet the needs of patients even as they continue to evolve.

 

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Medical Debt Reporting Requirements Take Effect in September: What You Need to Know

The National Consumer Assistance Plan (NCAP) has brought many changes to data furnishers, and there are more on the way, including in the healthcare collections field.  For a refresher, NCAP is the result of an agreement between the big three consumer reporting agencies (Experian, Equifax and TransUnion) and multiple state attorneys general.  The final result is a set of reforms that are reshaping, in many ways, how data is furnished to CRAs. 

While many of the NCAP reforms have already been implemented, a new round of reforms is set to take effect. Medical debt continues to be a huge market in the credit and collection industry. In 2013, healthcare-related

debt represented nearly 38 percent of debt collected through the third-party collection industry, according to the ACA International white paper, “The Role of Third Party Debt Collection in the U.S. Economy.”

 

Required by Sept. 15, 2017 for Debt Collectors and Debt Buyers

Do not report medical debt collection accounts (as defined by Creditor Classification Code 02) until they are at least 180 days past the date of first delinquency with the original creditor that led to the account being sold or place for collection.

Delete accounts that are being paid by insurance or were paid in full through insurance. This does not include accounts paid in full by the consumer. The date of first delinquency with the original creditor needs to be determined by the provider and furnisher based on the underlying financial agreements and the creditor’s policies for when an account becomes “delinquent.”

Date of delinquency, as defined in the Fair Credit Reporting Act, is “the month and year of the commencement of the delinquency on the account that immediately preceded collection activity, charge to provide or loss, or similar action.”

 

Practical Considerations

Now is the time to tackle these changes in order to make the transition smooth. Begin working with your operations personnel to update your policies and procedures and train your staff. Consult with other agencies that you may be in contact with to see how they are dealing with the new requirements. Educate clients on NCAP and work with them as you move forward. 

Most importantly, carefully review any information provided by the CRAs and contact the CRAs as soon as you have questions. The CRAs are the entities steering the implementation of the NCAP, so they are in the best position to provide clarification to furnishers.  

 

Andrew Pavlik formerly served as ACA International’s senior compliance analyst.

 

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Healthcare Providers Fall Within Grasp of the CFPB

Doctor Works On Laptop

Healthcare providers and their vendors may not fully realize that they must answer to the Consumer Financial Protection Bureau (CFPB).  Providers, specifically, are not yet caught in the crosshairs of the bureau, but those providers that do report delinquent accounts to credit reporting agencies, make use of collection agencies (both first and third party), or collect on patient accounts can fall under the auspices of the CFPB.

Patients have the ability to complain to the CFPB about the way providers, central billing offices, or first and third-party vendors engaging in collection activities on behalf of providers carry out their collection activities.  When a complaint is sent to the CFPB, the group that the complaint was lodged against is required to provide a timely response to the CFPB.  Clearly then, the healthcare industry finds itself within the grasp of the CFPB.

The healthcare community is likely to face such scenarios more frequently due to the rise in self-pay brought on by the uninsured and those with high-deductible health insurance plans.  The changes seen in the healthcare field in recent years have created an atmosphere that encourages healthcare providers to rely on vendors to care for receivables while finding ways to improve the revenue cycle.  As these issues continue to evolve, it will become even more important to understand the risks associated with compliance that arise from time to time.

Clearly things have changed; it used to be that compliance was managed through a vendor contract, making the vendor responsible for any risks that might arise pertaining to compliance.  In those days, it was up to each vendor as to whether they actually followed along with federal and state regulations, which technically kept providers out of the loop.  But this is no longer the case.

In our time, the CFPB conducts examinations that take into consideration the entire chain of custody; which doesn’t allow for the blame to be maneuvered back and forth along the chain of custody.  This climate makes it imperative for providers and vendors to work together in the best interests of everyone involved.

The CFPB now requires that those taking part in the collection of payments from patients will ensure that their vendor partners comply with federal consumer financial law.  Of course, this can be a difficult task to tend to since medical providers are typically focused on providing care for patients.  It is clear, though, that the CFPB that there is a substantial risk when debt stemming from medical expenses is being collected or credit reported.

There shouldn’t be any doubt that the healthcare community is now well within the grasp of the CFPB; and the reasons appear to be for the benefit of patients.  Medical debt can prove to be quite daunting for many patients and the insurance industry trend of shifting medical costs back onto patients is seen by many as a crisis.  Compliance with state and federal laws should be a top priority for your vendor partners and they should be working diligently to ensure that the best interests of your practice are always being met.  Are you getting this level of service from your vendors?

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News & Notes

Minnesota Nurses Association Buys Past-Due Debts

In June, the Minnesota Nurses Association purchased the past-due accounts of 1,800 families with medical debt as a way to give back for the support they received during strikes against Allina Health. The debt totaled $2.6 million secured for $28,000 between the MNA and New York-based nonprofit RIP Medical Debt. The credit reporting bureaus received notification that the consumers’ debts were paid.  http://ow.ly/YvcE30cOGRj

CMS Issues Long-Term Data on Health Spending by State

The recession had a “sustained impact” on health spending and insurance coverage, according to a Centers for Medicare and Medicaid Services report on spending. “Every state experienced slower growth in per capita personal healthcare spending from 2010-2013 than experienced during the period 2004-2009,” according to the report.  http://ow.ly/cIHL30cOKxZ

Pace of Healthcare Sector Expansion Slows

The healthcare industry added 24,300 new jobs in May and overall monthly job growth this year is lagging behind 2015 and 2016.  Job growth through the first five months of this year averages less than 22,000 jobs each month, compared to 32,000 monthly in 2015 and 2016, according to the Altarum Center for Sustainable Health Spending. http://ow.ly/HUR930cQhRP

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CMS Proposes Updates to Reduce Burdens Under Quality Payment Program in 2018

The Centers for Medicare and Medicaid Services has proposed changes to the Quality Payment Program instituted by the Medicare Access and CHIP Reauthorization Act of 2015 that aim to simplify the program.  The proposed changes would occur in the second year of the Quality Payment Program and would especially help streamline the requirements for small, independent and rural healthcare practices, “while ensuring fiscal sustainability and high-quality care within Medicare,” CMS reports (http://ow.ly/U9rN30cQpuA.)

Under the program, healthcare providers that bill more than $30,000 to Medicare Part B and care for more than 100 patients a year should start recording their quality data and documenting how they are using technology to support their practice, ACA International’s Collector magazine editor Anne Rosso May previously reported.  

The first performance period of the program is currently underway and during this time providers can pick their pace to report data to Medicare. They can choose to test the Quality Payment Program on a limited basis, participate for only part of the calendar year or participate for the full calendar year. This reduced set of requirements for 2017 gives providers time to fine-tune their basic infrastructure and get familiar with what’s expected of them.

The proposed rule for 2018, “would amend some existing requirements and also contains new policies for doctors and clinicians participating in the Quality Payment Program that would encourage participation in either Advanced Alternative Payment Models or the Meritbased Incentive Payment System,” CMS reports.  CMS has also used feedback from healthcare providers to craft the second year of the program.

“We’ve heard the concerns that too many quality programs, technology requirements, and measures get between the doctor and the patient,” said CMS Administrator Seema Verma in the news release.  “That’s why we’re taking a hard look at reducing burdens. By proposing this rule, we aim to improve Medicare by helping doctors and clinicians concentrate on caring for their patients rather than filling out paperwork.”

Healthcare providers who participate in Medicare serve more than 57 million seniors and the Quality Payment Program is designed to promote greater value within the industry.  If finalized, the proposed rule would further advance the agency’s goals of regulatory relief, program simplification, and state and local flexibility in the creation of innovative approaches to healthcare delivery, CMS reports. 

More information on the Quality Payment Program is available here: qpp.cms.gov and in a fact sheet from CMS: http://ow.ly/CXKn30dRMTH

 

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