MHA's Executive Briefing

10 Predictions on the Future of Hospital Executive Compensation

Stories on hospital executive compensation have littered newspaper headlines in 2011 so far. In April, Salinas (Calif.) Valley Memorial Healthcare System came under fire for the $4 million retirement package offered to outgoing president and CEO Sam Downing, while Wayne Smith, president and CEO of Franklin, Tenn.-based Community Health Systems saw his compensation nearly double from 2008-2010.

While executive salaries are expected to increase as the recession ebbs, the raises come alongside an emphasis on transparency and accountability, forcing some hospital compensation boards into the spotlight as they defend their decisions. Jim Nelson of Sullivan, Cotter and Associates, Robin Singleton of DHR International and John Fulcher of Bauer Consulting Group discuss 10 trends expected to shape hospital executive salaries over the next several years.

HHS proposes changes to HIPAA

HHS' Office for Civil Rights has posted proposed changes to rules regarding the disclosure of patients' health information that could give patients more insight into how their information is shared.

The 95-page proposed rule (PDF), to be published in the May 31 issue of the Federal Register, proposes changes to the privacy regulations under the 1996 Health Insurance Portability and Accountability Act.

The Civil Rights Office has enforcement authority for the HIPAA privacy rule and said the proposed rule reflects changes mandated by the Health Information Technology for Economic and Clinical Health Act, or HITECH, which are part of the American Recovery and Reinvestment Act of 2009. However, the Civil Rights Office noted that it also is looking to exercise the "more general authority" granted to it through HHS under HIPAA itself.

Fear of Lawsuits Drives Costs in ED, Says ACEP

A survey of emergency physicians by the American College of Emergency Physicians finds the practice of defensive medicine widespread. More than half say fear of litigation drives many of the tests they order.

Read more here.

CMS announces conference call on Pioneer ACO model

The Centers for Medicare & Medicaid Services will hold a June 7 conference call to review its request for applications for the Pioneer Accountable Care Organization Model. The model, under the Center for Medicare and Medicaid Innovation, will begin later this year and run through 2016.

Intended for organizations that already have experience coordinating care across care settings, the model aims to test a "more rapid transition" from traditional fee-for-service payments to payments for "coordination and outcomes" and to "promote a diversity of successful ACOs," according to CMS. Participants will be held to similar criteria as the Medicare Shared Savings Program.

[ via AHA News Now ]

Ad: ‘Enough is enough’

As lawmakers consider deficit-reduction plans, the American Hospital Association and other national hospital groups on May 25 launched an ad to oppose any further reductions to hospital care. The ad, which will appear over the next three weeks in inside-the-Beltway publications, reminds Congress and others that hospitals are already absorbing $155 billion in payment reductions, and Medicare and Medicaid pay hospitals less than the cost of providing care.

“Enough is enough...Hospitals are already doing more with less. There are other ways to reduce the deficit – don’t hurt patient care,” the ad states. In addition to AHA, sponsors include the Association of American Medical Colleges, Federation of American Hospitals, National Association of Psychiatric Health Systems, National Association of Public Hospitals and Health Systems, and VHA Inc.

Hospital Value Based Purchasing Program: The Final Rule

On April 29, the Centers for Medicare & Medicaid Services (CMS) released a final regulation for the new hospital value-based purchasing (VBP) program. The final rule affects inpatient prospective payment system (PPS) hospitals and was published in the May 6 Federal Register. Major provisions of the rule are described in a Regulatory Advisory published by the American Hospital Association. (If you are an MHA member and would like a copy of the advisory, email Shawn Rossi at srossi@mhanet.org.) 

Download the accompanying VBP calculator to assess the impact on your organization. The calculator is designed so that you can enter your hospital's baseline and performance period scores, as well as case counts and number of HCAHPS surveys, in the relevant worksheets.

The calculator will then estimate your Clinical Process of Care, HCAHPS and Total Performance scores. It also provides a range of scenarios that shows how these scores might affect the portion of your withhold amount that you earn back.

CBO estimates H.R. 5 would reduce deficit by $57 billion over 10 years

Enacting the medical liability reforms included in the HEALTH Act (H.R. 5) would reduce deficits by almost $14 billion through 2016 and $57 billion through 2021, according to new estimates by the Congressional Budget Office. In addition, CBO estimates the American Hospital Association-supported legislation would reduce discretionary spending for the Federal Employees Health Benefits program and departments of Defense and Veterans Affairs by about $2 billion through 2021.

H.R. 5 would establish a three-year statute of limitations for most medical liability claims; cap non-economic and punitive damages; limit defendants’ liability to their share of responsibility for the injury; limit lawyer contingency fees; establish a safe harbor from punitive damages for products that meet applicable Food and Drug Administration safety requirements; and permit evidence of income from sources such as life insurance payouts and health insurance at trial. The estimate was requested by the House Energy and Commerce Committee, which approved the bill on May 11.

Senators Urge White House to Withdraw ACO Proposal

The Centers for Medicare & Medicaid Services should withdraw its proposed rules governing accountable care organizations in part because of expensive start-up costs required, seven Republican lawmakers say in a letter to the Obama Administration. Read more here.

Pioneer ACOs: The Right Direction, But What’s The Goal?

For large entities that already successfully participate in managed care, the recently announced Center for Medicare and Medicaid Innovation (CMMI) “pioneer” ACO initiative may provide a more attractive option than the regular shared savings program.  Although smaller or newly forming entities will be hard-pressed to qualify as pioneer ACOs, they may benefit from the “accelerated development learning program” and, assuming regular ACOs qualify, the possibility of advance payments drawn from anticipated shared savings to help fund start-up costs.

Because pioneer ACOs will have to conform to many regular ACO rules, the overall attractiveness of participating in the shared savings program (whether as a pioneer or regular ACO) remains critically dependent on the nature and extensiveness of changes CMS makes in the final regulation.  Many observers share the view (expressed in my earlier posting) that the requirements specified in the proposed rule will so discourage participation as to threaten the viability of the Medicare Shared Savings program.

The CMMI announcement prompts two broad questions, which I address in this piece.  First, what are the key changes in the CMMI announcement, and what might be their import both for pioneer and regular ACOs?  Second, what are the important end goals for ACOs, and where does the CMMI announcement leave the Medicare Shared Savings Program?

Read more from the Health Affairs blog here.

Medicare Inpatient Psychiatric PPS: The Final Rule for Rate Year 2012

On April 28, the Centers for Medicare & Medicaid Services (CMS) issued its inpatient psychiatric facility (IPF) prospective payment system (PPS) final rule for rate year (RY) 2012. The final rule is available at http://www.gpo.gov/fdsys/pkg/FR-2011-05-06/pdf/2011-10562.pdf and was published in the May 6 Federal Register. Changes will take effect July 1. This final rule affects freestanding IPFs, as well as IPF distinct-part units of acute care and critical access hospitals. A detailed summary, including changes in the rate update period, the market basket, and the intern and resident cap is attached.

The American Hospital Association has provided a regulatory advisory on the final rule to help examine the impact of the payment changes on your Medicare revenue. If you are an MHA member and would like a copy of the advisory, email Shawn Rossi at srossi@mhanet.org.