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Politics, Gossip and Health Industry Economic Trends

By Staff Reporters [www.HealthcareFinancials.com]

· Reimbursement: Legislation enacted in July 2008 reversed a 10.6% cut – while stating in January 2009 that a 1.1% increase would replace same – that would have gone into effect if lawmakers had not acted.

· Payments: A new project called the Acute Care Episode demonstration will test whether a global payment system will better align the incentives of hospitals and doctors; beginning in January 2009. 

· Finance: Total hospital profit margins fell to negative 1.6% in the 3rd quarter of 2008 versus positive 6.1% during the same period last year.

· Policy: CMS delayed finalizing an exception policy to the Stark Gain Sharing programs in the 2009 Medicare Physician Fee Schedule Final Rule issued on Oct. 30, 2008. Since it received little feedback, it will accept additional comments on exception structures until mid-February 2009.

· Regulations: The 2009 Final Rule on Hospital Outpatient Department [HOPD] and Ambulatory Surgery Center [ASC] payments added 27 surgical procedures and 13 CPT® codes to the new Medicare ASC payment list; and increased reimbursement for other procedures. But, the rule also cut ASC reimbursement to 59% of that paid to hospital outpatient departments.

· Cost Shifting: Milliman reported hospitals lost $30 billion on Medicare and Medicaid, earned $66 billion on commercial insurance, and lost $13 billion on uninsured patients last year.

· Politics: Tom Daschle is out, but his replacement in dual roles as Secretary of Health and Human Services [HHS], and Director of White House Health Policy Office, will likely continue to advocate expanding health information technology as one part of a comprehensive health reform program of the new Obama Administration.  

· Government: HHHS supplied $1.1 billion in grant funding to health departments, hospitals and healthcare organizations to improve response ability to public health emergencies.

· Technology: The Social Security Administration [SSA] is developing a prototype to automatically pull information from electronic health records to deal with the more than 2.5 million disability claims it receives each year.

· Credit: Credit agency Fitch changed its not-for-profit hospital sector view to negative, from previously stable. Moody’s downgraded 18 for-profit hospital bond ratings and upgraded 1. And, Hospital Corporation of America used risky payment-in-kind (PIK) debt swaps to keep bonds afloat. 

· Banking: Despite Citigroup’s bailout, it will remain a major player in the tax-exempt healthcare lending space. And, insurers like WellPoint, UnitedHealth Group and BCBS are launching HSA and health debit card programs, as others enter the banking space to raise scarce cash reserves. 

· Safety: OSHA is releasing a new computerized graphical safety interface, known as eTool, to help hospitals reduce occupational injuries and illnesses.

· Coding: The DHHS extended the deadline for implementing ICD-10CM and ICD10-PCS coding modifications, two years; until October 1, 2013.

· Business: SearchAmerica.com provides dedicated, but controversial, business services to optimize healthcare revenue and AR collection cycles.

· Pharmaceuticals: CMS proposed a ban on referenced based drug pricing for health plans in 2010; open commentary accepted until March, 2009.

Note: Healthcare Financials News and Noteworthy is an occasional feature of the ME-P.

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