Archive for September, 2011

Healthcare Policies Drive Integration

Regardless of whether you are a metropolitan or rural provider, hospital or physician, the Federal Government policy priorities are driving healthcare providers to consolidate and integrate together. Specifically, the government meaningful use financial incentives are designed to motivate providers to adopt electronic health records (”EHR”) which may ultimately establish a national health information exchange between all providers. The government policies are also the foundation of the proposed accountable care organization (“ACO”) model. The ACO model requires providers to integrate into one legal organization to implement best practice protocols, patient centered care and reduce the cost of health services in exchange for a share in savings obtained from the Medicare Program. Likewise, the Centers for Medicare and Medicaid Innovation (“CMI”) developed demonstration programs that change provider’s payment models into one consolidated bundled payment or value …

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Accountable Care Organizations – Is the IRS Impeding Needed Health Reform?

Due to the significant capital required to operate an ACO, the IRS should allow investments in preferred stock by larger organizations to facilitate the participation of physicians as investors.

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Impact of Repealing the Sustainable Growth Rate

As the summer heat subsides and the leaves are starting to brighten, the debate over healthcare reform in Washington only continues to heat up.  Last week, the Medicare Payment Advisory Commission (MedPAC) released a draft proposal that recommended to Congress to repeal the Sustainable Growth Rate (SGR), which had previously proposed to cut physician reimbursement by 30% as of January 1.  The SGR has been at the center of the debate over Medicare reimbursement since 2005 when the first cuts were recommended by MedPAC.

The conflict with the SGR has always been that it does not account for the rising costs of providing care, nor does it have any mechanism for inflationary adjustment.  As such, for the past few years, Medicare has been forced to recommend payment cuts to Congress, which were prevented only by legislative action to prevent the cuts from going into effect.

With the elimination of the SGR and the prevention of the 30% cuts, this means that there will be a …

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Low impact of Pre-existing Condition Insurance Plans

The General Accounting Office released a report in late August detailing enrollment in high risk pools implemented under the Patient Protection and Accountable Care Act (PPACA). The GAO found that as of July just over 20,000 Americans had enrolled in the various Pre-existing Condition Insurance Plans, just over 600 in Georgia. Since the projections of potential coverage for these plans was 10 times greater than actual enrollment there are questions as why is enrollment so low and what are its implications.
Many of the provisions of the Patient Protection and Accountable Care Act are intended to expand private insurance coverage, although the vast majority of them do to take effect until 2014. Some of those provisions prevent insurers from excluding individuals with pre-existing conditions from coverage, guarantee issue to individuals, and regulate risk pooling in an attempt to prevent risk selection. Together these provisions will provide access to health insurance for many …

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The Importance of Capital in Building Atlanta as the Center of Healthcare Technology

Many people in Georgia may not realize this, but we represent the largest cluster of healthcare information technology (HCIT) companies than any other region of the country, measured by revenues and market capitalization.  This includes Silicon Valley, Boston and Nashville, all of which are major geographic hubs for technology and/or healthcare companies.  Over the past ten years or so, Atlanta has become the hub for the HCIT community, a growing sub-sector of the healthcare industry that many consider to be one of the most critical and vital components to America’s future healthcare delivery model, based on where today’s system is currently heading.

Unfortunately, Atlanta’s leading role in what is turning out to be perhaps the most vital piece of the healthcare reform discussion and a major target of billions of stimulus dollars is new information to most within the North Georgia area, as well as outside this region.  What’s more, we are currently in one of the most …

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A Key Question Every Medicare Patient Needs to Ask During a Hospital Visit

A key question every Medicare patient needs to ask when they are visiting a hospital and put in a bed, “Am I being placed in and Observation Status”. If you don’t know the answer to this question, you could be placing yourself at financial risk and not realize it until you receive the hospital bill. If the answer is “Yes”, the patient and family members need to work with the clinical team and hospital administration to understand the potential expenses a Medicare patient could personally incur during and after the hospital stay. Therefore the physicians, nurses and hospital personnel will work as a team to develop the most cost efficient delivery of care.

Typically a nurse or physician will not know the answer to the question if you are an “Observation Status” nor will they understand how their decisions may impact you financially unless someone explains it to them. The person that can answer the question if you are classified as an “Observation Status” …

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EHR; the best tool available

The New England Journal of Medicine released an article on September 1st which shows how the Electronic Health Record (EHR) can help improve the quality of care for Diabetic patients. This is huge!  We know EHR is a good tool to reduce paper, organize  files, give good clinical support, and exchange health information. However, it is yet to be proven definitively that EHR can actually improve quality. However this article will stand out among the mounting evidence that EHR can indeed help improve a patent’s quality of health.

In 2008 it was estimated that the US had a 13% adoption rate of EHR. Recent estimates have increased this rate to 30% . Many changes are occurring in the  world of Health Information Technology:  1) Retail health clinics are entering into agreements  with hospital systems for the purpose of integrating technology to exchange patient health information. 2) Insurance companies are purchasing health information exchanges. 3)Major corporations are …

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Primary Care: The New King of the Schoolyard

It was a different story only five years ago.  For most medical students finishing their residencies and many in the medical profession, primary care as a medical field represented the ugly stepchild of the family and the last to picked in gym class.  The jocks and cheerleaders (e.i., cardiologists and radiologists) were looked up by everyone in the playground and were the kings/queens of the school.  And when compared to specialists, primary care physicians (PCPs) were in fact generally paid less and subject to working longer hours with many days filled with fevers and strep throat.  

However, that is dramatically changing in our post-reform environment.  With headlines like “recruitment demand high for primary care doctors” dotting newspapers and blogsphere, the field of primary care has emerged as the new “it” profession in medicine.  According to a 2010-2011 study by Merritt Hawkins, family practice and general internal medicine physicians were the top two …

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Anti- Injunction and Healthcare Reform

Prior to yesterday, unless you practice Tax Law, you had probably never heard of the Tax Anti- Injunction Act of 1867. I know I had not. Most likely because the Georgia Bar exam no longer covers tax law, thank goodness! If you still have no idea what I am talking about, in all the hoopla of the President’s job speech and new substantial terror threats, you must have missed the news about the Fourth Circuit Court striking down a challenge to the Healthcare Reform Bill’s individual mandate to purchase insurance.

The interesting thing about this round in the judicial ring between States and the Federal Government is that the Court did not even get to the merits of the case. They struck the suit based on the Tax Anti-Injunction Act of 1867. This Act essentially says that before you challenge a tax, you must first pay the tax. The Court’s very interesting reasoning stated that because the individual mandate was a tax and not a penalty, it could not be challenged until it is …

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Hospitals: You’re all Investment Grade anyway….right?? Maturing bonds aren’t an issue….are they?

“I’ll be glad when the markets get back on track….What worries me now though is that they may already be on track; it’s just a different track.”

Refinancing G.O. bonds, replacing VRDO’s, eliminating the risk of your floating rate instruments and bringing stability back to your capital planning could be critical first steps in helping your hospital or system navigate these troubled waters. In fact, through a private placement you may save thousands and immediately improve cash flow. Today more than ever, the more relationships you have in lending will help ensure you have viable options for your continuing success and survival.

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