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Pulse Magazine

Pulse Magazine

Health Care Prices Increase at Historically Low Rate

Health care prices in May were 1 percent higher than they were a year ago—the smallest increase in nearly a quarter of a century, according to a recent report. The 12-month moving average of 1.7 percent was also the lowest since September 1998. The data comes from a report issued by the Altarum Institute on July 12, available at

“Although July marks the beginning of the fifth year of the expansion following the Great Recession, weak growth continues to exert downward pressure on overall prices, and dramatically so for health care prices,” the report states. “In this environment, health care prices cannot be expected to rise significantly in the near term.”

Dental care (3.6 percent) and hospitals (1.8 percent) showed the largest growth, while home health care and prescription drugs showed declines of 0.2 percent and 0.1 percent, respectively. “Health care price inflation in May 2013, at 1.0 percent year-over-year, is growing at a historically low rate,” the report states. “While ’all-time low’ may be too strong, given that our data extend back only to January 1990, it’s difficult to imagine a lower rate in the last 70 years.”

Health care costs are expected to continue to grow slowly in 2014, according to a separate report from PricewaterhouseCoopers’ Health Research Institute (HRI), titled “Medical Cost Trend: Behind the Numbers” and available at

“Health care cost increases continue to exceed overall growth in wages, but the gap appears to be shrinking,” said Michael Thompson, principal with PwC’s human resource services practice.

CMS Proposes Help for Consumers Navigating the Health Insurance Marketplace

  • June 7, 2013
  • Published in Billing

The Centers for Medicare & Medicaid Services (CMS) released a proposed rule outlining standards that Navigators in federally-facilitated and state partnership Marketplaces must meet, and clarifying earlier guidance about the Navigator program. Navigators are organizations that will provide unbiased information to consumers about health insurance, the new Health Insurance Marketplace, qualified health plans, and public programs including Medicaid and the Children’s Health Insurance Program.

Millions of Americans will be eligible for new coverage opportunities in 2014. For those who are not familiar with health insurance, have limited English literacy, or are living with disabilities, Navigators will serve an important role in ensuring people understand the health coverage options available to them. Navigators will provide accurate and impartial assistance to consumers shopping for coverage plans in the new Marketplace.

Navigators are a significant component of efforts to enroll Americans in the Marketplace. And CMS will ensure that all consumers who need customer service can receive it from trained professionals. In addition to Navigators, consumers will have access to assistance through services such as a call center, where customer service representatives can provide referrals to the appropriate state or federal agencies, or other forms of assistance programs including in-person assistance personnel, certified application counselors and agents and brokers. Open enrollment in the Marketplace begins Oct. 1, 2013, with coverage to begin Jan. 1, 2014

Patients May be Reluctant to Focus on Costs

One proposed initiative to cut health care spending is to get patients involved in weighing costs of treatment options when making medical decisions. A recent study in Health Affairs assessed patients’ willingness to consider costs when choosing care options.

Following a study of twenty-two focus groups of insured individuals, researchers identified four barriers to patients’ willingness to consider comparable lower cost care options.

• Preference for what patients perceive as the best care, regardless of expense;

• Inexperience with making trade-offs between health and money;

• Lack of interest in costs borne by insurers and society as a whole;

• Noncooperative behavior characteristics of a “commons dilemma,” in which people act in their own self-interest despite recognizing, they are depleting limited resources.

According to the abstract, “Surmounting these barriers will require new research in patient education, comprehensive efforts to shift public attitudes about health care costs, and training to prepare clinicians to discuss costs with their patients.”

Updating Business Associate Agreements to Comply With New HIPAA Regulations

It may be time for health care providers and their vendor partners to review and refresh their business associate agreements (BA) to ensure compliance with the recent HIPAA omnibus rule and HITECH Act. According to the U.S. Department of Health and Human Services (HHS), BA agreements must include provisions that:

• Establish the permitted/required uses and disclosures of protected health information (PHI) by the BA

• Provide that the BA will not use or further disclose the information, other than as permitted or required by the contract or by law

• Require the BA to implement appropriate safeguards to prevent unauthorized use or disclosure of PHI, including implementing requirements of HIPAA’s Security Rule with regard to electronic PHI

• Require the BA to report to the covered entity (CE) any use/ disclosure of information not provided for by its contract, including incidents that constitute breaches of unsecured PHI

• Require the BA to disclose PHI as specified in its contract to satisfy a CE’s obligation with respect to individuals’ requests for copies of their PHI, as well as make available PHI for amendments and accountings

• To the extent the BA is to carry out a CE’s obligation under the Privacy Rule, require the BA to comply with the requirements applicable to the obligation

• Require the BA to make available to HHS its internal practices, books, and records relating to the use and disclosure of PHI received from, or created or received by the BA on behalf of, the CE for purposes of HHS determining the CE’s compliance with HIPAA’s Privacy Rule

• At termination of the contract, if feasible, require the BA to return or destroy all PHI received from, or created or received by the BA on behalf of, the CE

• Require the BA to ensure that any subcontractors it may engage on its behalf that will have access to PHI agree to the same restrictions and conditions that apply to the BA with respect to such information

• Authorize termination of the contract by the CE if the BA violates a material term of the contract

BA agreements must comply with the new rules by Sept. 23, 2013; however, those that were in place as of Jan. 25, 2013 (and are not renewed or amended thereafter) are granted grandfathered status and deemed in compliance until Sept. 23, 2014.

HHS has also released a new sample BA agreement that reflects the changes made by the HITECH Act and omnibus rule, available at

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