Friday update

On January 5, the Department of Health and Human Services issued new electronic standards for fund transfers under the Health Insurance Portability and Accountability Act ("HIPAA").  This interim final rule has a  January 2014 compliance date. The press release explains that

Future administrative simplification rules will address adoption of:

• A standard unique identifier for health plans;
• A standard for claims attachments; and
• Requirements that health plans certify compliance with all HIPAA standards and operating rules.

The press release quotes the HHS Secretary as follows -- “Thanks to the Affordable Care Act, health care professionals will spend less time filling out paperwork and more time focusing on delivering the best care for patients,” said HHS Secretary Kathleen Sebelius. The FEHBlog finds this statement to be quite humorous because HIPAA was enacted in 1996. HIPAA called for electronic funds transaction, health plan identifier, and claims attachment standards. Here we are over 15 years later and we are just getting the EFT standards. This is not a knock on the government. It is a knock on Congress for embedding fast moving technology standards in the law.

Kasier Health News offers an upbeat article on how collaborative efforts among insurers, providers, employers, and patients can save money and improve care. Well I'll be darned.

Perhaps the biggest roadblock is the predominant fee-for-service system, which pays providers to deliver more services, rather than better, more efficient care. Health-care payers, including private insurers and Medicare, have been slow to change their payment models to reward outcomes rather than volume of care. That sometimes puts providers in the position of losing revenue by doing the right thing for patients.

Dr. Donald Storey, who worked on the Seattle collaborative as an Aetna medical director and now is a vice president at Premera Blue Cross, blames insurers' reluctance to change on their having many different contracts with employers and providers. In addition, not everyone wants a more efficient system. "One man’s waste is another man’s income," he says.

Some insurers have embraced collaboration. In Sacramento, Blue Shield of California, Catholic Healthcare West and Hill Physicians Medical Group have worked with CalPERS, the state public employee benefit system, to redesign care after they identified quality problems and high costs for 42,000 plan members.

Key areas were obesity-reduction surgery, hip and knee care, hysterectomies, and preventable emergency department visits and hospital readmissions. For example, Hill Physicians persuaded its OB/GYNs to perform more minimally invasive hysterectomies, which are safer and cheaper than open hysterectomies, when appropriate. Catholic Healthcare West hospital staff worked closely with patients on their medication instructions before discharge, to make readmissions less likely.

Redesigning care through a collaborative is "not easy to do. There's a lot of investment of human resources, and we didn’t know if it would work or not," says John Wray, senior vice president for managed care at Catholic Healthcare West. "But this was something we thought was important to try to learn from."

It worked. Hospital length of stay and readmissions both declined 15 percent in 2010. That helped save more than $20 million, exceeding the $15.5 million target and allowing Blue Shield to keep CalPERS' premiums flat in Sacramento for 2011. The remaining savings were split among the three partners, who would have lost money if the target hadn’t been hit.

In the same vein, the actuarial consulting firm Milliman provides a link to its recent report on bundled payments as an alternative to fee for service coverage.