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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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Patient Credit Scores Get Grace Period Following Healthcare Services.

For many, an unexpected healthcare crisis can quickly lead to a financial crisis.  Surveys show that slightly more than half of all debt showing up on American’s credit reports are related to expenses from the medical industry.  Sadly, this can quickly lead to a less-than-satisfactory credit report.  However, changes in credit agency evaluation and reporting of medical debt are currently in process and are designed to reduce the pain from financial consequences associated with the rise of a healthcare issue.

The three major credit reporting agencies, Equifax, TransUnion, and Experian, will begin setting a 180-waiting period on medical debt before including it on a patient’s credit report starting on September 15th.  The rationale behind this is to give a 6-month period of time to patients to give them the opportunity to resolve and delay in payment from insurers as well as resolving any disputes that might arise between patient and insurer.

Additionally, the three credit bureaus are set to begin removing medical debt from the credit reports of patients as soon as the debt has finally been resolved by a medical insurer; although some models do not currently penalize the consumer for medical debt.

The need for change was spurred on by states working to bring aid to consumers.  The first was a settlement in 2015 that was negotiated by the Attorney General of New York, Eric Schneiderman.  Schneiderman and the three credit reporting agencies came to an agreement and the changes agreed upon will be enacted nationwide.  Currently, most hospitals, ASC’s, and medical providers choose to hire collection vendors to handle accounts once they have become 30-60 days past due.  

A 2014 report from the Consumer Financial Protection Bureau (CFPB) showed that forty-three million Americans had medical debt in collections that was adversely affecting their credit reports.  A noteworthy finding was that the average amount of medical debt in collections was a mere $579.00 as opposed to the typical $1000.00 dinging the credit reports of those with non-medical debt.  Even more noteworthy is the fact that for 15 million of those with blemishes to their credit, medical debt was the only issue for them.

In the era of high deductible health plans (HDHP) which carry an extremely high financial responsibility for the policyholder; it might not be too difficult to understand how this situation has occurred.  It’s clear that many who would previously have had good credit are now faced with a large self-pay portion for health services which can be daunting.

While credit reports are designed to demonstrate the likelihood of a consumer paying debt that he or she has accrued; some credit scoring companies such as VantageScore & FICO have adjusted their models to account for medical debt because they do not believe it is an accurate predictor of whether or not a consumer is a good credit risk.  In fact, FICO has stated that consumers with medical accounts are typically less inclined to default on their accounts than those with non-medical accounts.

Both FICO and VantageScore are now updating their models to differentiate between debt that is medical and that which is non-medical.  Those who have medical debt in collections will now receive a smaller penalty than those with non-medical collections; a change that can make a big difference in the lives of American consumers.  So far, however, the one caveat is that many lenders and banks have not yet adapted to this new credit-scoring methodology.  Because of this, even though medical debt should not be impacting consumer credit as much; for many nothing has changed yet.

 

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Consumers Expect Higher Costs Under American Health Care Act

Since the U.S. House of Representatives approved the American Health Care Act (AHCA) on May 4 and the U.S. Senate, at press time, continued to review the plan, consumers overall say they have an “unfavorable” view of the legislation and are pessimistic about its impact on their healthcare costs and quality of care, according to the Henry J. Kaiser Family Foundation Health Tracking Poll.  Fifty-five percent of respondents to the poll said they have an unfavorable view of the AHCA and 31 percent said they have a favorable view of the plan to repeal and replace the Affordable Care Act, according to a news release from the Kaiser Family Foundation.

“There is also a considerable enthusiasm gap with a larger share saying that they have a ‘very unfavorable’ view (40 percent) than saying they have a ‘very favorable’ view (12 percent),” it states.  Consumers are more pessimistic about the healthcare plan now compared to in December, after the elections, but before the proposal in the 115th Congress was introduced.  Forty-five percent of respondents to the poll in May said the AHCA would result in higher healthcare costs compared to 28 percent who provided that response in December.

“In addition, a third now expect their ability to get and keep health insurance and the quality of their healthcare to get worse under the pending bill, compared to about one in five that said so in December,” according to the news release.  The poll also shows that 55 percent of respondents want the U.S. Senate to make significant changes to the version of the AHCA passed in the House or not pass the legislation. The Henry J. Kaiser Family Foundation has been following the public opinion on the Affordable Care Act since 2010. The May poll shows consumers continue to have more favorable views of the Affordable Care Act than unfavorable, 49 percent and 42 percent, respectively.  Additional findings in the poll include:

-Thirty-one percent of consumers have favorable views of the AHCA.

-Republicans have more favorable views of the AHCA (67 percent) than of the Affordable Care Act (12 percent.) Among Democrats and independents, 48 percent have more favorable views of the Affordable Care Act than of the AHCA (30 percent.)

-However, a majority of consumers in the poll (74 percent) say it is “likely” that the president and Congress will move forward with repealing and replacing the Affordable Care Act.

See a graph based on data from the poll in Data Watch. 

More information: http://ow.ly/MMQH30cg9qk

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Out-of-Pocket Costs Catching up with Medicare Beneficiaries

Medicare beneficiaries are facing higher out-of-pocket costs that amount to a “substantial” share of their income, according to an issue brief from The Commonwealth Fund, “Medicare Beneficiaries’ High Out-of -Pocket Costs: Cost Burdens by Income and Health Status.”  There are 56 million people, or 17 percent of the U.S. population, who rely on Medicare, according to the report. By 2024, one-fifth of the population will have Medicare coverage. The benefits exclude dental, vision, hearing and long-term services coverage, and there is no limit on out-of-pocket costs for the covered services, it states.

As more consumers become eligible for Medicare, The Commonwealth Fund reports they will find the need to supplement their coverage, “since the program has relatively high cost-sharing and no limit on patient liability for covered benefits.”  Research on beneficiaries’ financial burdens for the brief is based on the 2012 Medicare Current Beneficiary Survey, with 11,299 responses and population and spending data projected to 2016.  The respondents shared their experiences with access to care, medical services and spending activity, including costs for services not covered by Medicare.

Overall, the survey shows beneficiaries spent an average of $3,024 in out-of-pocket costs each year, according to the report. Findings also include that 15 million Medicare beneficiaries spent 20 percent or more of their income on healthcare premiums plus medical care, including cost-sharing and services that are not covered, it states.  Medicare beneficiaries also face costs from a separate private plan for prescription drugs.

“If they want to buy private Medigap supplemental coverage for cost-sharing, they incur significant additional premiums,” according to the report.  “Even after they pay for supplemental drug and Medigap plans, beneficiaries face the cost of dental, hearing, vision, and long-term services—all excluded from Medicare. For beneficiaries with multiple illnesses or serious functional limitations, out-of-pocket costs can easily add up to thousands of dollars per year.”  Findings on costs for Medicare beneficiaries also include:

-Hospitalization costs for beneficiaries are $1,300 and they pay 20 percent of bills for physician care.

-They also pay a $1,600 annual premium for Medicare Part B medical services.

-Annual Medigap, the supplemental coverage for Medicare cost sharing, premiums are $2,000 per beneficiary, but can be significantly higher in some states. “Medigap has notably high overhead costs: administrative costs and profits absorb 20 percent of premiums on average.”

-Private Medicare Advantage plans are available for beneficiaries interested in opting out of traditional Medicare plans. While those plans have lower cost-sharing in general, it has increased significantly in recent years.

Overall, the report shows that 5.4 million beneficiaries with only Medicare and no supplemental coverage are subject to higher healthcare costs.  “These beneficiaries spent an estimated $5,374 on out-of-pocket costs in 2016 compared to $2,587 for beneficiaries who received supplemental coverage from Medicaid. With incomes too high to qualify for Medicaid but too low to afford supplemental coverage, 32 percent of Medicare-only beneficiaries spent 10 percent or more of their income on health care,” according to the report.

Financial burdens and unmet needs from Medicare leave beneficiaries at risk.  As Medicare enters its sixth decade and the Baby Boom population becomes eligible, the costs of the program will increase, likely placing it on the policy agenda,” the report concludes.  “Financial burdens and access gaps highlight the need to approach reform with caution.  Already-high burdens suggest restructuring cost-sharing to ensure affordability and to provide relief for low-income beneficiaries,” the report concludes.

More information:  http://ow.ly/iCQY30cc4m8

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Repeal of Obamacare Likely to Grow Number of Self-Pay Patients 

While Congress moves forward in their effort to repeal the Affordable Care Act (ACA), a new report points out that the changes anticipated appear to point to an increase in the number of self-pay patients; meaning less revenue for medical providers historically.  This analysis has been provided by accounting and consulting firm Crowe Horwath.  The report, “Self-Pay Becomes Ground Zero for Hospital Margins: Lower Net Revenue Realization Impact Follows,” used data taken from their revenue cycle analytics platform.  The report made use of the analysis of a sampling of 357 hospitals in states where Medicaid had expanded.

Hospitals in states that had expanded their Medicaid coverage between 2013 and 2016 witnessed their number of patients who were covered by Medicaid increase from 12.3 percent to 18.3 percent during that time.  During that same time, patient self-pay dropped from 7.4 in 2013 to 3.5 in 2016; a drop of 4 percent.  Crowe Horwath is now pointing out that with so much uncertainty in healthcare, that medical providers should prepare for growth in self-pay patients.

Medical provider cash flow is likely to be adversely affected, according to the report, as the average self-pay patient remains in the AR cycle for about 96 days whereas those with Medicaid balances typically only do so for about 64 days.  Not to mention the current trend of insureds moving to high-deductible health plans, an insurance model with a mix of self-pay and insurance coverage, is set to continue growing.  The Crowe Horwath analysis plainly states that the combination of growth in HDHP insurance policies added to a full repeal of the ACA will cause an increase in self-pay patients of 4.2 percent.  The report also points out that this situation will decrease revenue by 2.8 percent.

Crowe Horwath recommends several common-sense practices for providers in dealing with self-pay.  One thing that can be very helpful is to make use of tools that determine a patient’s capabilities for paying.  Another good practice is to create positive interactions pertaining to the financial portion of patient experience.  It is also valuable to train attention on those patients who have the ability to pay for their out-of-pocket expenses.  Providing multiple payment options, affordable payment plans, discounts and even help with Medicaid enrollment forms will all be beneficial.

Lastly, giving patients the advantage of price transparency and the opportunity to shop around and even the ability to negotiate prices will all help providers weather the storm on the horizon that’s been created by the rise of HDHP’s combined with the effects of the likely ACA repeal.

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News & Notes

 

Access to Care, Health, Improve under Medicaid Expansion

A Journal of Health Affairs study of states that expanded Medicaid under the Affordable Care Act shows declining uninsured rates and annual out-of-pocket-costs, Fiercehealthcare reports. For example, in Kentucky, the uninsured rate dropped to 7.4 percent in 2016 and low-income consumers in Kentucky and Arkansas saw a $337 decline in annual costs, according to the article.  http://ow.ly/9q4f30caBqY

Pace of Healthcare Job Growth Continues to Slow

Healthcare job growth has slowed compared to the past two years, according to the monthly report from the Altarum Institute. There were 19,500 new healthcare jobs in April and the average for the first four months of this year is just under 20,000 jobs each month, “a considerable decrease from the 32,000 per month seen in 2015 and 2016,” according to the report.  http://ow.ly/XHpn30ccfDP

The State of Hospital Employee Turnover

A “Leaders for Today” survey on hospital staff hiring and turnover shows a high rate of turnover in the industry. For example, 42.8 percent of respondents said they have worked with their current hospital for fewer than two years and 65.7 percent said it’s been fewer than five years.  http://ow.ly/cYCu30cceX0

 

 

 

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Hospital Merger Activity Continues to Increase

Hospital merger and acquisitions continue to increase, including a notable rise in transactions among large healthcare providers, according to an analysis of industry activity by Kaufman, Hall & Associates LLC.  In the first quarter of 2017, hospital and health system transactions increased 8 percent from 25 to 27 compared to the first quarter of last year, according to a news release from the firm.

“The increase follows another year of continued growth, with transactions climbing from 66 announced deals in 2010 to 102 in 2016. The overall trend illustrates that healthcare organizations across the country continue to seek new efficiencies and capabilities for a transforming industry,” it states. “The first quarter was particularly notable for an uptick in transactions among large organizations, with three announced deals targeting organizations with nearly $1 billion or more in revenues. 2016 saw four such deals announced in 12 months.”  Additional transactions among the larger organizations are expected.  

“Hospitals and health system executives are looking for strategic opportunities to ensure the continued growth and success of their organizations amongst disruptive forces, including innovative competitors, declining payments, flat or decreasing inpatient volumes, and increasing price sensitivities among consumers,” said Anu Singh, managing director at Kaufman Hall, in the news release. “As the number of independent hospitals declines, organizations are seeking to build new capabilities and economies of scale through partnerships.”

More information: http://ow.ly/1JmB30cc6DY

 

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National Poll Shows Healthcare Costs Top Financial Concerns

 

While Americans always seem to have something to be concerned about; a new national poll from Gallup shows that Americans are most concerned today with healthcare costs when considering ALL financial concerns for those living in the United States.  The poll further went on to show that a majority of those living in America believe that the Federal government should also make it possible for all Americans to have healthcare coverage.

Two other polls that were recently published also point out that most citizens of the United States are concerned about healthcare coverage for themselves and their families.  In fact, a growing number of poll respondents now appear to be favoring a single-payer healthcare system.

Gallup points out that some of the anxiety around the topic of healthcare could be due to all of the uncertainty regarding the current healthcare policy and the effort to repeal and replace the law.  In 2010, healthcare concerns spiked as the ACA was being signed into law and many Americans made clear that the costs of healthcare were their top concern.

While healthcare costs were the top anxiety for Americans at 19 percent, other financial concerns cited by those who responded to the poll included high debt at 11 percent, college expenses at 10 percent and lack of money at 10 percent.

One bright spot worth noting is that some financial anxieties have lessened in recent years.  While 10% of respondents say low wages are their families biggest financial problem; this percentage is the lowest number seen since before the financial crisis of 2008 began.

 

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CMS Proposes Rule to Update Medicare Admissions Policies

The Centers for Medicare and Medicaid Services (CMS) has issued a proposed rule that would update 2018 Medicare payment and policies when patients are admitted into hospitals.  “The proposed rule aims to relieve regulatory burdens for providers; supports the patient-doctor relationship in health care; and promotes transparency, flexibility, and innovation in the delivery of care,” according to a news release from CMS.

CMS also released a Request for Information (RFI) on ideas for regulatory, policy, practice and procedural changes to guide the discussion on future regulatory decisions for inpatient and long-term hospitals.  CMS is accepting comments on the proposed rule and RFI until June 13, 2017.

“Through this proposed rule we want to reduce burdens for hospitals so they can focus on providing high quality care for patients,” said CMS Administrator Seema Verma in the news release.  “Medicare is better able to support the work of dedicated hospitals and clinicians who provide the care that people need with these more flexible and simplified approaches.”

The news release also states, “CMS is committed to transforming the health care delivery system—and the Medicare program—by putting a strong focus on patient-centered care, so providers can direct their time and resources to patients and improve outcomes.”  CMS is also proposing a one-year moratorium on “the payment policy threshold for patient admissions in long-term care hospitals while CMS continues to evaluate long-term care hospital policies” and a reduction in reporting requirements for hospitals using electronic health records.

More information: http://ow.ly/VbhF30bk4ES

 

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Americans Worry Over Healthcare Uncertainty

Anxious Woman Worries About Healthcare

As the debate continues on Capitol Hill about the future of healthcare in the United States, the issue is also on the minds of many Americans as well.  Whether Obamacare continues to move forward in one form or another or is replaced by something completely different, a majority of Americans are now concerned about their ability to afford health insurance in the future.

A new study from Bankrate.com shows that in the last year, one out of four families have chosen not to make use of medical professionals because they felt they couldn’t afford the expense even though they believed they needed it.  The fact that Americans are choosing not to get medical advice due to the cost is of great concern.  Bankrate.com also pointed out that 13 percent of those responding to their survey didn’t have any healthcare insurance at all; which is quite a risk when considering that medical bills have the capability of leading to large debt that could take many years to pay off.

The Bankrate.com survey showed that a full 56% of Americans say that they are concerned that they might not have the option of affordable healthcare in the years to come.  This anxiety has led some to worry that they might be faced with the painful choice to not care for medical issues of a serious nature due to an inability to pay for their services.  In the meantime, as the healthcare debate continues; American anxiety continues to grow.

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