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July 2, 2015   Download print version

CMS proposes 2016 changes to hospital outpatient and ASC payment policy, two-midnight rule, and quality reporting changes

HHS launches National Ebola Training and Education Center

Most U.S. Hepatitis C infections may be missed

Feds wants Novartis to pay $3.35B for kickback schemes

Doctors, hospitals get $6.5 billion from drug, medical device firms last year

Oncologists worry about rising costs of cancer treatment

Report finds survival rate for cardiac arrest ‘dismal’

Billions have no access to toilets, says World Health Organization report

Healthcare Purchasing News wishes you a Happy and Healthy Independence Day!

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Self Study Series:
July 2015

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CMS proposes 2016 changes to hospital outpatient and ASC payment policy, two-midnight rule, and quality reporting changes

The Centers for Medicare & Medicaid Services (CMS) released the Calendar Year (CY) 2016 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System policy changes, quality provisions, and payment rates proposed rule [CMS-1633-P] on July 1, 2015. 

The CY 2016 OPPS/ASC proposed rule proposes updates to Medicare payment policies and rates for hospital outpatient departments (HOPDs), ASCs, and partial hospitalization services provided by community mental health centers (CMHCs), and refinements to programs that encourage high-quality care in these outpatient settings.  

Approximately 3,800 hospitals and 60 CMHCs are paid under the OPPS, while approximately 5,300 ASCs are paid under the ASC payment system. The OPPS provides payment for most HOPD services, including partial hospitalization services furnished by HOPDs and CMHCs. OPPS payment amounts vary according to the Ambulatory Payment Classification (APC) group to which a service or procedure is assigned.

On July 1, 2015, CMS released proposed updates to the “Two-Midnight” rule regarding when inpatient admissions are appropriate for payment under Medicare Part A. These changes would continue CMS’ long-standing emphasis on the importance of a physician’s medical judgment in meeting the needs of Medicare beneficiaries.  These updates were included in the calendar year (CY) 2016 Hospital Outpatient Prospective Payment System (OPPS) proposed rule.

To provide greater clarity to hospital and physician stakeholders, and address the higher frequency of beneficiaries being treated as hospital outpatients, CMS adopted the Two-Midnight rule for admissions beginning on or after October 1, 2013. This rule established Medicare payment policy regarding the benchmark criteria that should be used when determining whether inpatient admission is reasonable and payable under Medicare Part A.

Following the adoption of the Two-Midnight rule, CMS received significant feedback from the stakeholder community, including concerns that the new policy was impacting physician and hospital practices. In the CY 2016 OPPS proposed rule, CMS is:

·         Proposing to change the standard by which inpatient admissions generally qualify for Part A payment based on feedback from hospitals and physician to reiterate and emphasize the role of physician judgment

·         Announcing a change in the enforcement of the standard so that Quality Improvement Organizations (QIOs) will oversee the majority of patient status audits, with the Recovery Audit program focusing on only those hospitals with consistently high denial rates.

For stays expected to last less than two midnights – CMS proposes the following:

·         For stays for which the physician expects the patient to need less than two midnights of hospital care (and the procedure is not on the inpatient only list or otherwise listed as a national exception), an inpatient admission would be payable under Medicare Part A on a case-by-case basis based on the judgment of the admitting physician.  The documentation in the medical record must support that an inpatient admission is necessary, and is subject to medical review. 

·         CMS is reiterating the expectation that it would be rare and unusual for a beneficiary to require inpatient hospital admission for a minor surgical procedure or other treatment in the hospital that is expected to keep him or her in the hospital for a period of time that is only for a few hours and does not span at least overnight.  CMS will monitor the number of these types of admissions and plans to prioritize these types of cases for medical review. 

There will be no change for stays over the two-midnight benchmark.

See related fact sheet for detailed information.

Visit CMS to view the full detailed fact sheet.

The proposed rule can be downloaded from the Federal Register

On July 8, 2015 the rule will be available online at



HHS launches National Ebola Training and Education Center

To ensure that U.S. healthcare providers and facilities are prepared to safely identify, isolate, transport, and treat patients with Ebola and other emerging threats, the U.S. Department of Health and Human Services today launched a National Ebola Training and Education Center.

A collaborative effort among HHS’ Office of the Assistant Secretary for Preparedness and Response (ASPR), the Centers for Disease Control and Prevention (CDC) and three academic institutions, the program supports further training of healthcare providers and facilities on strategies to manage Ebola and other emerging infectious diseases.

Through the effort, ASPR and CDC will provide $12 million over the next five years to Emory University in Atlanta, GA; University of Nebraska Medical Center/Nebraska Medicine in Omaha, NE; and Bellevue Hospital Center in New York City, NY, which together will co-lead the National Ebola Training and Education Center.

Emory University and Nebraska Medical Center have been working with CDC since December to train more than 460 health care workers from 87 healthcare systems, including 37 designated Ebola treatment centers, on all aspects of infection control and patient care for individuals with Ebola. Emory University and Nebraska Medical Center are offering additional training opportunities this summer for up to 400 staff from Ebola assessment hospitals.

The new National Ebola Training and Education Center will expand on the success of this initial work and offer state health departments and healthcare facilities additional access to the clinical expertise and training capabilities offered by these institutions.

HHS recently announced nine regional Ebola treatment centers that are part of a national network of 55 Ebola treatment centers, but will have enhanced capabilities to treat a patient with confirmed Ebola or other highly virulent disease. Ebola treatment centers are staffed, equipped and have been assessed to have current capabilities, training and resources to provide the complex treatment necessary to care for a person with Ebola while minimizing risk to healthcare workers. Visit HHS for the report.



Most U.S. Hepatitis C infections may be missed

New cases of hepatitis C are drastically underreported to federal officials, researchers contend in a new study. And they suggested that may be hampering public health efforts to cope with the chronic infection that can lead to cirrhosis or liver cancer.

The new study found that only one out of 183 Massachusetts residents diagnosed between 2001 and 2011 with acute hepatitis C infection was reported to the U.S. Centers for Disease Control and Prevention. The rest went unreported, either because their test results didn't come back quickly enough or because the results didn't meet the strict CDC definition for hepatitis C infection, said senior study author Dr. Arthur Kim, director of the Viral Hepatitis Clinic at Massachusetts General Hospital in Boston.

Reported new cases of hepatitis C have more than tripled in recent years, rising from 694 cases in 2005 to 2,138 cases in 2013, according to the best CDC estimates. However, the CDC believes the actual number of new hepatitis C cases is about 14 times the number of reported cases in any given year, due to the reporting troubles. Based on that assumption, the CDC estimates that the "real" number of new hepatitis C infections in 2013 was anywhere between 23,500 and 101,400, rather than the reported number of 2,138.

If left untreated, chronic hepatitis C infection can cause long-term liver damage and might result in liver cancer. Drug cocktails can treat chronic hepatitis C, but the course of treatment can run as high as $93,000, a recent analysis found.

Unless a better way of identifying hepatitis C is discovered, public health officials will find themselves ill-prepared to deal with a silent but growing epidemic, Kim said.

The findings were published June 29 in the Annals of Internal Medicine. (HealthDay) Visit NIH for the study.



Feds wants Novartis to pay $3.35B for kickback schemes

The U.S. Department of Justice says that Novartis should pay up to $3.35 billion in damages and civil fines for using kickbacks to boost sales of two drugs that caused federal health care programs to overpay for medicines, according to documents filed in federal court in New York.

The feds argue that Novartis violated the False Claims Act by using different plans, including rebates, to induce specialty pharmacies to boost prescriptions for two drugs: the Myfortic treatment for kidney transplants and Exjade, a medicine used for reducing excess iron in patients who undergo blood transfusions.

In its filing, the Justice Department is seeking up to $1.52 billion in damages, which represents triple the amount of money that Medicare and Medicaid paid for the drugs as a result of kickbacks between 2004 and 2013. The feds are also seeking up to $1.83 billion in fines – or $5,500 to $11,000 – for each of more than 166,000 allegedly false claims that were submitted for reimbursement to the healthcare programs.

The case stems from a whistleblower lawsuit that was filed in 2011 by David Kester, a former Novartis sales manager. Two years ago, the Justice Department and about a dozen states joined the litigation and a trial date for the lawsuit brought by the feds is set to begin in November.

In a statement, a Novartis spokeswoman writes us that the document filed by the feds is a pre-trial order, which is a standard procedural step in which all parties itself in this litigation.”

The case has been closely watched so far because a key issue is the extent to which a so-called Corporate Integrity Agreement that Novartis signed in 2010 may factor into the submit an overview of their case and a list of the documents and witnesses they plan to utilize at trial. Novartis continues to dispute the allegations and is continuing to defend proceedings. These agreements typically run for five years and require a company to establish an internal compliance program and report violations. Visit the Wall Street Journal for the story.



Doctors, hospitals get $6.5 billion from drug, medical device firms last year

Doctors and teaching hospitals received $6.5 billion last year from drug companies and medical device firms for research, consulting and other reasons, new federal data show. The details published Tuesday by the Obama administration mark the second batch of data on industry ties to medical providers.

As part of the Affordable Care Act, federal health officials released information last year on payments made for five months of 2013. The latest data cover all of 2014.

The details published Tuesday by the Obama administration mark the second batch of data on industry ties to medical providers.

Consumers can look up information on 607,000 U.S. physicians and 1,121 teaching hospitals using the federal government's Open Payments database.

There were 1,444 companies that made payments in 2014. About half of the $6.5 billion in payouts were classified for research purposes. More than $2.5 billion was labeled as general payments, and $703 million represented ownership or investment interests held by medical providers.

Consumer advocates and federal lawmakers have pushed for these disclosures for years out of concern that conflicts of interest in the medical profession are jeopardizing patient care and costing taxpayer-funded health programs.

Health-policy experts have warned that these industry ties, from speaking and consulting fees to luxury trips and meals, can lead to patients getting the wrong drugs or medical procedures. Those decisions can harm patients and drive up the nation's $3-trillion medical tab, experts warn.

The American Medical Assn. cautioned patients against drawing too many conclusions from the information. The physicians' group said the data can be inaccurate and misleading, and that relationships with drug and device firms can foster breakthroughs in treatment. Visit the Los Angeles Times for the story.



Oncologists worry about rising costs of cancer treatment

Prescription drug spending increased sharply last year, and cancer drugs were responsible for a huge chunk of that jump. Out of the nearly $374 billion Americans spent on prescriptions in 2014, $32.6 billion, about 9 percent, was spent on oncology drugs, according to the annual report by IMS Health Informatics. Another $11.1 billion was spent on supportive care treatments, which help with the side effects of strong chemotherapy drugs.

But cancer drugs were not the most widely prescribed by a long shot. Even though oncology medications made the most money of any other drug class on the IMS report's list, not one oncology medication cracks the 20 most widely prescribed. Cancer drugs are just extremely expensive.

The expense of those drugs is not lost on cancer doctors, who say cost is restricting access for too many patients. So, a group of doctors on a mission to increase patient access to cancer therapies has rallied to do something about it. The American Society of Clinical Oncology, which includes 35,000 cancer professionals, has assigned a task force to help patients assess the value of their drug options.

Newly approved cancer drugs cost an average of $10,000 per month, with some therapies topping $30,000 per month, according to ASCO, which discussed the costs of cancer care at a recent meeting. Just a decade ago, the average cost per month of new drugs was about $4,500. Patients typically pay 20 to 30 percent out of pocket for drugs, so an average year's worth of new drugs would cost $24,000 to $36,000 in addition to health insurance premiums.

Drugs aren't the only expense. Patients must also pay for drugs that mitigate the side effects of chemotherapy, pay provider and facility fees and often lose income when they miss work or lose their jobs.

According to UnitedHealthcare data, drugs themselves account for only 24 percent of direct cancer costs. Hospital and outpatient facilities account for 54 percent of costs, and physician fees account for 22 percent.

The ASCO task force is now taking public comment until Aug. 21 at its Value in Cancer Care page They're soliciting feedback in hopes of improving the framework and launching a tool that patients and doctors would use together to better inform treatment choices. Until that tool is available widely, ASCO encourages patients and oncologists alike to start a discussion about costs of treatment. (US News & World Report) Visit Yahoo for the report.



Report finds survival rate for cardiac arrest ‘dismal’

CBS News reports The Institute of Medicine is calling for a national campaign to fight cardiac arrest, which has a survival rate of just six percent outside a hospital. The statistic only increases slightly to 11 percent survival when the patient is treated by first responders.

The report found that less than three percent of Americans receive CPR training annually. In cardiac arrests that happen outside the hospital defibrillators are used by bystanders only four percent of the time.

“The number one priority is to be giving them chest compressions so that you’re circulating the blood for them,” Dr. Clifton Callaway, vice-chairman of emergency medicine at University of Pittsburgh Medical Center, told CBS News. “There are videos that can teach you in less than two minutes the basic steps that you need to know that could help double a chance of somebody surviving a sudden cardiac arrest.”

Doctors say intervention by bystanders can be rare because people are often afraid of hurting the person. However, bystanders are ultimately the best chance of survival when there are not medics on the scene. Visit CBS for the report.



Billions have no access to toilets, says World Health Organization report

Toilets are taken for granted in the industrialized west but still are a luxury for a third of the world’s people who have no access to them, according to a report by the World Health Organization and Unicef.

Those who make do without toilets continue to pollute water sources and jeopardize public health and safety for millions worldwide, contributing to malnutrition and childhood stunting, impairing 161 million children both physically and mentally every year.

Diarrheal diseases kill 700,000 children every year, most of which could have been prevented with better sanitation.

The joint report released by the UN agencies evaluates progress on global targets set in 2000 for giving everyone access to clean drinking water and sanitation facilities, along with other goals in areas such as poverty, hunger, disease and inequality. With those benchmarks expiring this year, the UN is leading efforts to come up with a new set of “sustainable development goals” that are expected to focus on how $2.5tn in development funds will be spent through 2030.

Past efforts to improve water and sanitation have seen some success, with 2.1 billion people gaining access to better sanitation facilities since 1990, according to the report. But another 2.4 billion people have seen no improvement, including 946 million people still relieving themselves outdoors – the vast majority among the rural poor.

India is by far the worst, with more than 640 million people defecating in the open and not necessarily due to a lack of facilities. Many men who have installed toilets at home still prefer going outdoors as they survey their farmlands or seek a few minutes of quiet.

India still needs to build 100 million toilets to provide everyone access, but experts say the country also needs to invest more in campaigns to change behaviors. Instead the government recently slashed its sanitation budget in half.

The world has done better in giving more people access to clean drinking water, with 2.6 billion people getting improved access since 1990.

Still, 663 million of the world’s poorest – more than the populations of the European Union and Russia combined – have seen no improvement at all. Instead, they are left to scavenge for water around broken pipes and stagnant ponds, may walk miles to the nearest spigot for clean water, or may be financially exploited by “water mafias” charging almost a full day’s wage for single cup of water. Visit the Guardian for the report.



Healthcare Purchasing News wishes you a Happy and Healthy Independence Day!

Bless our nation and our healthcare professionals, families and friends. HPN wishes you all a wonderful and safe Independence Day this 4th of July. Please enjoy safely as you celebrate our wonderful United States of America.

We’re going to the beach to watch fireworks with our families and friends. We will be back on Monday July 6th.