Mary Ellen Schneider

Physicians and hospitals now have the chance to test out bundled payments on a range of conditions under a new Medicare initiative.

Officials at the Centers for Medicare and Medicaid Services have invited physicians, hospitals, and other health care providers to participate in the Bundled Payments for Care Improvement initiative. The program, which was mandated under the Affordable Care Act, offers a variety of options for bundling payments for a hospital stay, for post-discharge services, or for both the hospital stay and the post-discharge care.

The move toward bundled payments is a major shift in how the government pays for medical care. Instead of paying hospitals, physicians, and other providers separately, this initiative would combine the payment over an episode of care for a specific condition. The aim of the program is to incentivize clinicians to work together and provide better continuity of care, resulting in better quality and lower costs.

"Today, Medicare pays for care the wrong way," Health and Human Services Secretary Kathleen Sebelius said during a teleconference to announce the bundling program. "Payments are based on the quantity of care, the amount of services delivered, not the quality of that care. And that leaves us too often with a system that actually can punish the providers that are most successful at getting and keeping their patients healthy."

The new bundling program offers four ways that health care providers can receive a bundled payment, three of which provide payment retrospectively, and one that offers a prospective payment. For example, under some of the retrospective payment models, CMS and the providers would agree on a target payment amount for the episode of care and providers would be paid under the original Medicare fee-for-service system, but at a negotiated discount of 2% to 3% or greater. At the end of the care episode, the total payment would be compared with the target price and providers would be able to share in the savings, according to CMS.

The prospective payment model would work differently. Under that option, CMS would make a single bundled payment to the hospital to cover all services provided during the inpatient stay by the hospital, physicians, and other providers. That payment would offer at least a 3% discount to Medicare. Under this option, physicians and other providers would submit "no pay" claims to Medicare and the hospital would pay them out of the single bundled payment.

In addition to the options of prospective or retrospective payment, providers could choose how long the episode of care will be and what conditions they want to bundle payment for, and what services would be included in the payment. CMS officials said they wanted to make the program flexible so that a range of hospitals, physicians, and other providers could participate.

Organizations interested in applying must submit a letter of intent by Sept. 22 for Model 1 and by Nov. 4 for Models 2, 3, and 4. More information on the program and how to apply is seen at www.innovations.cms.gov/areas-of-focus/patient-care-models/bundled-payments-for-care-improvement.html.

Dr. Richard Gilfillan, the acting director of the CMS Innovation Center, which is overseeing the bundling initiative, said he expects that hundreds of organizations will apply. CMS will consider a number of factors in choosing participants for the program including the best proposals for care improvement, the number of patients involved, and the conditions addressed, and the price discounts offered, he said.

The program is a unique opportunity for hospitals to redesign their systems to promote better care coordination, Dr. Gilfillan said, and have that effort supported through Medicare payments.

The idea is to eliminate the traditional barriers between physicians and other providers – both inpatient and outpatient – all of whom may be involved in the care of a single condition, said Dr. Nancy Nielson, senior advisor to the CMS Innovation Center and past president of the American Medical Association. "I do believe that both physicians and hospitals will find this [to be] an opportunity that’s flexible enough to give them the opportunity to begin to learn how to get paid for care differently," she said.

Dr. Cecil B. Wilson, AMA immediate past president, said the organization will urge federal officials to encourage applications for physician-led bundling projects.

"For this to be successful, and for physicians to participate actively, then they need to be a part of that process rather than just some larger corporation or larger hospital system or health plan that’s organizing these," he said. "We think those are important as well, but we also think it’s important that physicians be a part of that leadership."

While there are physicians working in large group practices that have had some experience with bundled payments, most doctors aren’t prepared for these types of payment changes, Dr. Wilson said. So the AMA is also recommending that CMS provide technical assistance and data to interested physicians.

Health care consultant Robert Minkin urged physicians to apply for the bundling program. "The implications of bundled payments and other clinical integration models are that we come to a common, best-evidence practice approach to care that manages on a fixed budget," said Mr. Minkin, of the Camden Group. "Physicians who can survive in an environment like that will thrive. For those who have difficulty in those situations, it’s going to be very tough."

Physicians and hospitals now have the chance to test out bundled payments on a range of conditions under a new Medicare initiative.

Officials at the Centers for Medicare and Medicaid Services have invited physicians, hospitals, and other health care providers to participate in the Bundled Payments for Care Improvement initiative. The program, which was mandated under the Affordable Care Act, offers a variety of options for bundling payments for a hospital stay, for post-discharge services, or for both the hospital stay and the post-discharge care.

The move toward bundled payments is a major shift in how the government pays for medical care. Instead of paying hospitals, physicians, and other providers separately, this initiative would combine the payment over an episode of care for a specific condition. The aim of the program is to incentivize clinicians to work together and provide better continuity of care, resulting in better quality and lower costs.

"Today, Medicare pays for care the wrong way," Health and Human Services Secretary Kathleen Sebelius said during a teleconference to announce the bundling program. "Payments are based on the quantity of care, the amount of services delivered, not the quality of that care. And that leaves us too often with a system that actually can punish the providers that are most successful at getting and keeping their patients healthy."

The new bundling program offers four ways that health care providers can receive a bundled payment, three of which provide payment retrospectively, and one that offers a prospective payment. For example, under some of the retrospective payment models, CMS and the providers would agree on a target payment amount for the episode of care and providers would be paid under the original Medicare fee-for-service system, but at a negotiated discount of 2% to 3% or greater. At the end of the care episode, the total payment would be compared with the target price and providers would be able to share in the savings, according to CMS.

The prospective payment model would work differently. Under that option, CMS would make a single bundled payment to the hospital to cover all services provided during the inpatient stay by the hospital, physicians, and other providers. That payment would offer at least a 3% discount to Medicare. Under this option, physicians and other providers would submit "no pay" claims to Medicare and the hospital would pay them out of the single bundled payment.

In addition to the options of prospective or retrospective payment, providers could choose how long the episode of care will be and what conditions they want to bundle payment for, and what services would be included in the payment. CMS officials said they wanted to make the program flexible so that a range of hospitals, physicians, and other providers could participate.

Organizations interested in applying must submit a letter of intent by Sept. 22 for Model 1 and by Nov. 4 for Models 2, 3, and 4. More information on the program and how to apply is seen at www.innovations.cms.gov/areas-of-focus/patient-care-models/bundled-payments-for-care-improvement.html.

Dr. Richard Gilfillan, the acting director of the CMS Innovation Center, which is overseeing the bundling initiative, said he expects that hundreds of organizations will apply. CMS will consider a number of factors in choosing participants for the program including the best proposals for care improvement, the number of patients involved, and the conditions addressed, and the price discounts offered, he said.

The program is a unique opportunity for hospitals to redesign their systems to promote better care coordination, Dr. Gilfillan said, and have that effort supported through Medicare payments.

The idea is to eliminate the traditional barriers between physicians and other providers – both inpatient and outpatient – all of whom may be involved in the care of a single condition, said Dr. Nancy Nielson, senior advisor to the CMS Innovation Center and past president of the American Medical Association. "I do believe that both physicians and hospitals will find this [to be] an opportunity that’s flexible enough to give them the opportunity to begin to learn how to get paid for care differently," she said.

Dr. Cecil B. Wilson, AMA immediate past president, said the organization will urge federal officials to encourage applications for physician-led bundling projects.

"For this to be successful, and for physicians to participate actively, then they need to be a part of that process rather than just some larger corporation or larger hospital system or health plan that’s organizing these," he said. "We think those are important as well, but we also think it’s important that physicians be a part of that leadership."

While there are physicians working in large group practices that have had some experience with bundled payments, most doctors aren’t prepared for these types of payment changes, Dr. Wilson said. So the AMA is also recommending that CMS provide technical assistance and data to interested physicians.

Health care consultant Robert Minkin urged physicians to apply for the bundling program. "The implications of bundled payments and other clinical integration models are that we come to a common, best-evidence practice approach to care that manages on a fixed budget," said Mr. Minkin, of the Camden Group. "Physicians who can survive in an environment like that will thrive. For those who have difficulty in those situations, it’s going to be very tough."

Physicians and hospitals now have the chance to test out bundled payments on a range of conditions under a new Medicare initiative.

Officials at the Centers for Medicare and Medicaid Services have invited physicians, hospitals, and other health care providers to participate in the Bundled Payments for Care Improvement initiative. The program, which was mandated under the Affordable Care Act, offers a variety of options for bundling payments for a hospital stay, for post-discharge services, or for both the hospital stay and the post-discharge care.

The move toward bundled payments is a major shift in how the government pays for medical care. Instead of paying hospitals, physicians, and other providers separately, this initiative would combine the payment over an episode of care for a specific condition. The aim of the program is to incentivize clinicians to work together and provide better continuity of care, resulting in better quality and lower costs.

"Today, Medicare pays for care the wrong way," Health and Human Services Secretary Kathleen Sebelius said during a teleconference to announce the bundling program. "Payments are based on the quantity of care, the amount of services delivered, not the quality of that care. And that leaves us too often with a system that actually can punish the providers that are most successful at getting and keeping their patients healthy."

The new bundling program offers four ways that health care providers can receive a bundled payment, three of which provide payment retrospectively, and one that offers a prospective payment. For example, under some of the retrospective payment models, CMS and the providers would agree on a target payment amount for the episode of care and providers would be paid under the original Medicare fee-for-service system, but at a negotiated discount of 2% to 3% or greater. At the end of the care episode, the total payment would be compared with the target price and providers would be able to share in the savings, according to CMS.

The prospective payment model would work differently. Under that option, CMS would make a single bundled payment to the hospital to cover all services provided during the inpatient stay by the hospital, physicians, and other providers. That payment would offer at least a 3% discount to Medicare. Under this option, physicians and other providers would submit "no pay" claims to Medicare and the hospital would pay them out of the single bundled payment.

In addition to the options of prospective or retrospective payment, providers could choose how long the episode of care will be and what conditions they want to bundle payment for, and what services would be included in the payment. CMS officials said they wanted to make the program flexible so that a range of hospitals, physicians, and other providers could participate.

Organizations interested in applying must submit a letter of intent by Sept. 22 for Model 1 and by Nov. 4 for Models 2, 3, and 4. More information on the program and how to apply is seen at www.innovations.cms.gov/areas-of-focus/patient-care-models/bundled-payments-for-care-improvement.html.

Dr. Richard Gilfillan, the acting director of the CMS Innovation Center, which is overseeing the bundling initiative, said he expects that hundreds of organizations will apply. CMS will consider a number of factors in choosing participants for the program including the best proposals for care improvement, the number of patients involved, and the conditions addressed, and the price discounts offered, he said.

The program is a unique opportunity for hospitals to redesign their systems to promote better care coordination, Dr. Gilfillan said, and have that effort supported through Medicare payments.

The idea is to eliminate the traditional barriers between physicians and other providers – both inpatient and outpatient – all of whom may be involved in the care of a single condition, said Dr. Nancy Nielson, senior advisor to the CMS Innovation Center and past president of the American Medical Association. "I do believe that both physicians and hospitals will find this [to be] an opportunity that’s flexible enough to give them the opportunity to begin to learn how to get paid for care differently," she said.

Dr. Cecil B. Wilson, AMA immediate past president, said the organization will urge federal officials to encourage applications for physician-led bundling projects.

"For this to be successful, and for physicians to participate actively, then they need to be a part of that process rather than just some larger corporation or larger hospital system or health plan that’s organizing these," he said. "We think those are important as well, but we also think it’s important that physicians be a part of that leadership."

While there are physicians working in large group practices that have had some experience with bundled payments, most doctors aren’t prepared for these types of payment changes, Dr. Wilson said. So the AMA is also recommending that CMS provide technical assistance and data to interested physicians.

Health care consultant Robert Minkin urged physicians to apply for the bundling program. "The implications of bundled payments and other clinical integration models are that we come to a common, best-evidence practice approach to care that manages on a fixed budget," said Mr. Minkin, of the Camden Group. "Physicians who can survive in an environment like that will thrive. For those who have difficulty in those situations, it’s going to be very tough."

Hospital employment of physicians continues to rise rapidly around the country, but the trend could drive up costs at least in the short term, according to a report from the Center for Studying Health System Change.

Physicians employed by hospitals are often paid based on their productivity, which offers an incentive to increase the volume of services. And in some cases, physicians are under pressure from their hospitals to order more expensive tests, according to the report.

The researchers from the Center for Studying Health System Change based their analysis on interviews with nearly 550 physicians, hospital executives, health plan officials, and others, in 12 nationally representative metropolitan communities: Boston; Cleveland; Greenville, S.C.; Indianapolis; Lansing, Mich.; Little Rock, Ark.; Miami; northern New Jersey, Orange County, Calif.; Phoenix; Seattle; and Syracuse, N.Y.

"The acceleration in hospital employment of physicians risks raising costs and not improving quality of care unless payment reforms shift provider incentives away from volume toward higher quality and efficiency," said Dr. Ann S. O’Malley of the Center for Studying Health System Change and a coauthor of the study.

The trend toward hospitals’ employing more physicians can also drive up costs because hospitals are able to charge hospital facility fees for office visits and procedures, even when those services are administered in a physician’s office. That means that Medicare – and in some cases private insurers – are paying significantly more for the same services simply because the physician is employed by the hospital.

Hospital employment of physicians does have the potential to improve quality through better integration of care and communication between physicians. The problem, the researchers noted, is that integration and communication can be slow to improve just because physicians get their paychecks from the hospital.

The research was funded by the Robert Wood Johnson Foundation and the National Institute for Health Care Reform.

Hospital employment of physicians continues to rise rapidly around the country, but the trend could drive up costs at least in the short term, according to a report from the Center for Studying Health System Change.

Physicians employed by hospitals are often paid based on their productivity, which offers an incentive to increase the volume of services. And in some cases, physicians are under pressure from their hospitals to order more expensive tests, according to the report.

The researchers from the Center for Studying Health System Change based their analysis on interviews with nearly 550 physicians, hospital executives, health plan officials, and others, in 12 nationally representative metropolitan communities: Boston; Cleveland; Greenville, S.C.; Indianapolis; Lansing, Mich.; Little Rock, Ark.; Miami; northern New Jersey, Orange County, Calif.; Phoenix; Seattle; and Syracuse, N.Y.

"The acceleration in hospital employment of physicians risks raising costs and not improving quality of care unless payment reforms shift provider incentives away from volume toward higher quality and efficiency," said Dr. Ann S. O’Malley of the Center for Studying Health System Change and a coauthor of the study.

The trend toward hospitals’ employing more physicians can also drive up costs because hospitals are able to charge hospital facility fees for office visits and procedures, even when those services are administered in a physician’s office. That means that Medicare – and in some cases private insurers – are paying significantly more for the same services simply because the physician is employed by the hospital.

Hospital employment of physicians does have the potential to improve quality through better integration of care and communication between physicians. The problem, the researchers noted, is that integration and communication can be slow to improve just because physicians get their paychecks from the hospital.

The research was funded by the Robert Wood Johnson Foundation and the National Institute for Health Care Reform.

Hospital employment of physicians continues to rise rapidly around the country, but the trend could drive up costs at least in the short term, according to a report from the Center for Studying Health System Change.

Physicians employed by hospitals are often paid based on their productivity, which offers an incentive to increase the volume of services. And in some cases, physicians are under pressure from their hospitals to order more expensive tests, according to the report.

The researchers from the Center for Studying Health System Change based their analysis on interviews with nearly 550 physicians, hospital executives, health plan officials, and others, in 12 nationally representative metropolitan communities: Boston; Cleveland; Greenville, S.C.; Indianapolis; Lansing, Mich.; Little Rock, Ark.; Miami; northern New Jersey, Orange County, Calif.; Phoenix; Seattle; and Syracuse, N.Y.

"The acceleration in hospital employment of physicians risks raising costs and not improving quality of care unless payment reforms shift provider incentives away from volume toward higher quality and efficiency," said Dr. Ann S. O’Malley of the Center for Studying Health System Change and a coauthor of the study.

The trend toward hospitals’ employing more physicians can also drive up costs because hospitals are able to charge hospital facility fees for office visits and procedures, even when those services are administered in a physician’s office. That means that Medicare – and in some cases private insurers – are paying significantly more for the same services simply because the physician is employed by the hospital.

Hospital employment of physicians does have the potential to improve quality through better integration of care and communication between physicians. The problem, the researchers noted, is that integration and communication can be slow to improve just because physicians get their paychecks from the hospital.

The research was funded by the Robert Wood Johnson Foundation and the National Institute for Health Care Reform.

Legislation to raise the debt ceiling and cut the deficit, signed by the president Aug. 2, leaves physicians in limbo regarding their Medicare payments next year and in the future.

The biggest question is whether the 29.5% cut to Medicare physician fees scheduled for Jan. 1, 2012, will go into effect. This massive payment cut is called for under the Sustainable Growth Rate (SGR) formula used to set Medicare payments to physicians.

Physicians’ groups, led by the American Medical Association, lobbied Congress to include a permanent fix to the SGR in the deficit reduction package. They argued that while fixing the SGR carries a $300 billion price tag, getting the job done now would save the government money down the road. Instead, lawmakers left the SGR out of the package completely.

The new law of the land, the Budget Control Act of 2011, puts into place about $1 trillion in spending cuts over the next decade from the discretionary side of the federal budget. While these immediate cuts do not directly affect physicians, they do impact graduate medical education: Medical students who take out subsidized graduate student loans on or after July 1, 2012, will have to start paying the interest on those loans earlier.

The next round of budget cuts will be determined by the Joint Select Committee on Deficit Reduction, also known as the super committee. The 12-member panel iswill be comprised of legislators from both parties and both houses of Congress.

Sen. Patty Murray (D.-Wash Rep. Dave Camp (R.-Mich.), chairman of the House Ways and Means Committee, Rep. Fred Upton (R.-Mich.), chairman of the House Energy and Commerce Committee, Rep. James E. Clyburn (D.-S.C.), the third-ranking member of the House Democratic leadership, Rep. Xavier Becerra (D.-Calif.), a member of the House Ways and Means Committee, and Rep. Chris Van Hollen (D.-Md.), also a member of the House Ways and Means Committee. The appointments were made by party leaders in the House and Senate.

Party leaders have named the first nine members of the joint committee. Senate Majority Leader Harry Reid (D.-Nev.) appointed«http://democrats.senate.gov/2011/08/09/reid-announces-appointments-to-joint-select-committee-on-deficit-reduction/» Sen. Patty Murray (D.-Wash.)« http://murray.senate.gov/public/», who serves on both the Senate budget and appropriations committees, to co-chair the Joint Select Committee on Deficit Reduction. Her appointment immediately drew criticism from Republicans, who said she is too focused on politics because of her role as chairwoman of the Democratic Senatorial Campaign Committee. Sen. Reid also tapped Sen. Max Baucus (D.-Mont.)« http://baucus.senate.gov/», chairman of the Senate Finance Committee and an architect of the Affordable Care Act, and Sen. John Kerry (D.-Mass.)« http://kerry.senate.gov/», who was the 2004 Democratic presidential nominee, to serve on the joint committee.

Before the joint committee can forward its recommendations to the full Congress, those recommendations must be approved by a majority vote.

"There’s a lot of concern that the committee will be deadlocked," said Edwin Park, vice president for health policy at the Center on Budget and Policy Priorities.

The law requires the joint committee to draft legislation cutting another $1.2 trillion to $1.5 trillion in federal spending over 10 years. The committee has broad authority to consider spending cuts, taxes, and other changes across both discretionary and mandatory government programs. Funding for Affordable Care Act programs is also on the table.

The joint committee must vote on recommendations by Nov. 23, and lawmakers must vote on the joint committee’s bill by Dec. 23.

To keep the legislation from getting bogged down in the Senate, the Budget Control Act requires that the joint committee’s bill be given a fast-track, up-or-down vote requiring a simple majority to pass each chamber.

Should the joint committee’s bill fail, or if the committee deadlocks, the Budget Control Act calls for automatic cuts across the federal government totaling $1.2 trillion over 10 years.

Those cuts would include up to a 2% reduction in Medicare physician payments beginning in 2013. Under a worst-case scenario, physicians could face not only the 29.5% SGR cut in January 2012, but another 2% annual fee cut starting the following year.

The hope for physicians is that the 29.5% cut mandated by the SGR is simply so large that it would be unthinkable for members of Congress to let it go into effect. Many physicians think that Congress will do something to avert the massive SGR cut, even if it’s a temporary fix.

For example, Dr. Jonathan Leffert, chairman of the legislative and regulatory committee for the American Association of Clinical Endocrinologists, said: "Medicare patients not being able to see their physicians is pretty toxic for both Democrats and Republicans."

Legislation to raise the debt ceiling and cut the deficit, signed by the president Aug. 2, leaves physicians in limbo regarding their Medicare payments next year and in the future.

The biggest question is whether the 29.5% cut to Medicare physician fees scheduled for Jan. 1, 2012, will go into effect. This massive payment cut is called for under the Sustainable Growth Rate (SGR) formula used to set Medicare payments to physicians.

Physicians’ groups, led by the American Medical Association, lobbied Congress to include a permanent fix to the SGR in the deficit reduction package. They argued that while fixing the SGR carries a $300 billion price tag, getting the job done now would save the government money down the road. Instead, lawmakers left the SGR out of the package completely.

The new law of the land, the Budget Control Act of 2011, puts into place about $1 trillion in spending cuts over the next decade from the discretionary side of the federal budget. While these immediate cuts do not directly affect physicians, they do impact graduate medical education: Medical students who take out subsidized graduate student loans on or after July 1, 2012, will have to start paying the interest on those loans earlier.

The next round of budget cuts will be determined by the Joint Select Committee on Deficit Reduction, also known as the super committee. The 12-member panel iswill be comprised of legislators from both parties and both houses of Congress.

Sen. Patty Murray (D.-Wash Rep. Dave Camp (R.-Mich.), chairman of the House Ways and Means Committee, Rep. Fred Upton (R.-Mich.), chairman of the House Energy and Commerce Committee, Rep. James E. Clyburn (D.-S.C.), the third-ranking member of the House Democratic leadership, Rep. Xavier Becerra (D.-Calif.), a member of the House Ways and Means Committee, and Rep. Chris Van Hollen (D.-Md.), also a member of the House Ways and Means Committee. The appointments were made by party leaders in the House and Senate.

Party leaders have named the first nine members of the joint committee. Senate Majority Leader Harry Reid (D.-Nev.) appointed«http://democrats.senate.gov/2011/08/09/reid-announces-appointments-to-joint-select-committee-on-deficit-reduction/» Sen. Patty Murray (D.-Wash.)« http://murray.senate.gov/public/», who serves on both the Senate budget and appropriations committees, to co-chair the Joint Select Committee on Deficit Reduction. Her appointment immediately drew criticism from Republicans, who said she is too focused on politics because of her role as chairwoman of the Democratic Senatorial Campaign Committee. Sen. Reid also tapped Sen. Max Baucus (D.-Mont.)« http://baucus.senate.gov/», chairman of the Senate Finance Committee and an architect of the Affordable Care Act, and Sen. John Kerry (D.-Mass.)« http://kerry.senate.gov/», who was the 2004 Democratic presidential nominee, to serve on the joint committee.

Before the joint committee can forward its recommendations to the full Congress, those recommendations must be approved by a majority vote.

"There’s a lot of concern that the committee will be deadlocked," said Edwin Park, vice president for health policy at the Center on Budget and Policy Priorities.

The law requires the joint committee to draft legislation cutting another $1.2 trillion to $1.5 trillion in federal spending over 10 years. The committee has broad authority to consider spending cuts, taxes, and other changes across both discretionary and mandatory government programs. Funding for Affordable Care Act programs is also on the table.

The joint committee must vote on recommendations by Nov. 23, and lawmakers must vote on the joint committee’s bill by Dec. 23.

To keep the legislation from getting bogged down in the Senate, the Budget Control Act requires that the joint committee’s bill be given a fast-track, up-or-down vote requiring a simple majority to pass each chamber.

Should the joint committee’s bill fail, or if the committee deadlocks, the Budget Control Act calls for automatic cuts across the federal government totaling $1.2 trillion over 10 years.

Those cuts would include up to a 2% reduction in Medicare physician payments beginning in 2013. Under a worst-case scenario, physicians could face not only the 29.5% SGR cut in January 2012, but another 2% annual fee cut starting the following year.

The hope for physicians is that the 29.5% cut mandated by the SGR is simply so large that it would be unthinkable for members of Congress to let it go into effect. Many physicians think that Congress will do something to avert the massive SGR cut, even if it’s a temporary fix.

For example, Dr. Jonathan Leffert, chairman of the legislative and regulatory committee for the American Association of Clinical Endocrinologists, said: "Medicare patients not being able to see their physicians is pretty toxic for both Democrats and Republicans."

Legislation to raise the debt ceiling and cut the deficit, signed by the president Aug. 2, leaves physicians in limbo regarding their Medicare payments next year and in the future.

The biggest question is whether the 29.5% cut to Medicare physician fees scheduled for Jan. 1, 2012, will go into effect. This massive payment cut is called for under the Sustainable Growth Rate (SGR) formula used to set Medicare payments to physicians.

Physicians’ groups, led by the American Medical Association, lobbied Congress to include a permanent fix to the SGR in the deficit reduction package. They argued that while fixing the SGR carries a $300 billion price tag, getting the job done now would save the government money down the road. Instead, lawmakers left the SGR out of the package completely.

The new law of the land, the Budget Control Act of 2011, puts into place about $1 trillion in spending cuts over the next decade from the discretionary side of the federal budget. While these immediate cuts do not directly affect physicians, they do impact graduate medical education: Medical students who take out subsidized graduate student loans on or after July 1, 2012, will have to start paying the interest on those loans earlier.

The next round of budget cuts will be determined by the Joint Select Committee on Deficit Reduction, also known as the super committee. The 12-member panel iswill be comprised of legislators from both parties and both houses of Congress.

Sen. Patty Murray (D.-Wash Rep. Dave Camp (R.-Mich.), chairman of the House Ways and Means Committee, Rep. Fred Upton (R.-Mich.), chairman of the House Energy and Commerce Committee, Rep. James E. Clyburn (D.-S.C.), the third-ranking member of the House Democratic leadership, Rep. Xavier Becerra (D.-Calif.), a member of the House Ways and Means Committee, and Rep. Chris Van Hollen (D.-Md.), also a member of the House Ways and Means Committee. The appointments were made by party leaders in the House and Senate.

Party leaders have named the first nine members of the joint committee. Senate Majority Leader Harry Reid (D.-Nev.) appointed«http://democrats.senate.gov/2011/08/09/reid-announces-appointments-to-joint-select-committee-on-deficit-reduction/» Sen. Patty Murray (D.-Wash.)« http://murray.senate.gov/public/», who serves on both the Senate budget and appropriations committees, to co-chair the Joint Select Committee on Deficit Reduction. Her appointment immediately drew criticism from Republicans, who said she is too focused on politics because of her role as chairwoman of the Democratic Senatorial Campaign Committee. Sen. Reid also tapped Sen. Max Baucus (D.-Mont.)« http://baucus.senate.gov/», chairman of the Senate Finance Committee and an architect of the Affordable Care Act, and Sen. John Kerry (D.-Mass.)« http://kerry.senate.gov/», who was the 2004 Democratic presidential nominee, to serve on the joint committee.

Before the joint committee can forward its recommendations to the full Congress, those recommendations must be approved by a majority vote.

"There’s a lot of concern that the committee will be deadlocked," said Edwin Park, vice president for health policy at the Center on Budget and Policy Priorities.

The law requires the joint committee to draft legislation cutting another $1.2 trillion to $1.5 trillion in federal spending over 10 years. The committee has broad authority to consider spending cuts, taxes, and other changes across both discretionary and mandatory government programs. Funding for Affordable Care Act programs is also on the table.

The joint committee must vote on recommendations by Nov. 23, and lawmakers must vote on the joint committee’s bill by Dec. 23.

To keep the legislation from getting bogged down in the Senate, the Budget Control Act requires that the joint committee’s bill be given a fast-track, up-or-down vote requiring a simple majority to pass each chamber.

Should the joint committee’s bill fail, or if the committee deadlocks, the Budget Control Act calls for automatic cuts across the federal government totaling $1.2 trillion over 10 years.

Those cuts would include up to a 2% reduction in Medicare physician payments beginning in 2013. Under a worst-case scenario, physicians could face not only the 29.5% SGR cut in January 2012, but another 2% annual fee cut starting the following year.

The hope for physicians is that the 29.5% cut mandated by the SGR is simply so large that it would be unthinkable for members of Congress to let it go into effect. Many physicians think that Congress will do something to avert the massive SGR cut, even if it’s a temporary fix.

For example, Dr. Jonathan Leffert, chairman of the legislative and regulatory committee for the American Association of Clinical Endocrinologists, said: "Medicare patients not being able to see their physicians is pretty toxic for both Democrats and Republicans."

The American Medical Association and more than 40 medical specialty societies are urging the Medicare Payment Advisory Commission to revise its blueprint for repealing the Sustainable Growth Rate formula.

While the physician community has been lobbying hard for a permanent fix to the SGR, the statutory formula used in setting Medicare physician fees, the coalition of medical societies is not satisfied with how MedPAC proposes to solve the problem. In an Oct. 3 letter to MedPAC Chairman Glenn Hackbarth, the coalition said the commission’s current plan compounds the financial pressures physicians face and potentially threaten access.

Under the MedPAC plan, outlined at a meeting on Sept. 15, the current SGR formula would be repealed, the almost 30% physician payment cut slated for Jan. 1 would be averted, and a 10-year plan would be enacted to establish a predictable series of fee updates for physicians.

In advance of MedPAC’s Oct. 6-7 meeting to finalize the plan, coalition members said that they object to how the commission proposes to achieve this.

Under the MedPAC plan, payments for some primary care services would be frozen for 10 years, with a 17% cut to the remaining services for 3 years, followed by a payment freeze. The coalition said the plan to cut and freeze payments was "risky," since it comes at a time when physicians must choose between making costly technology investments or face financial penalties from Medicare. They added that the 17% cut has the potential to threaten access to care.

Another sticking point is how MedPAC proposes to pay for eliminating the SGR. That $200 billion would be funded through cuts to postacute care, increased beneficiary cost sharing, as well as payment cuts to hospitals, labs, drugs, Medicare Advantage, and durable medical equipment.

Coalition members contend that providers should not have to bear the brunt of these cuts. They suggested that MedPAC instead embrace offsets identified by other groups, such as the Congressional Budget Office, the Simpson-Bowles Commission, and the so-called Senate Gang of Six. Those existing proposals draw on a broader scope of items and therefore limit the impact on providers and beneficiaries, according to the coalition’s letter.

The physician groups also questioned the revenue projections underlying the proposal. In their letter to MedPAC, the physician groups said that MedPAC’s prediction that aggregate Medicare revenues to physicians will increase despite a proposed 17% pay cut simply didn’t make sense.

"Even if expenditures per patient did go up at the projected rate, it cannot be presumed that net incomes and physicians’ ability to cover their cost of practice will increase accordingly," according to the letter. "In fact, with such a large gap between projected practice costs and proposed payment rates, there is every reason to think that physician incomes will shrink, potentially reducing their ability to retain staff and continue to provide high quality care to Medicare beneficiaries."

The American Medical Association and more than 40 medical specialty societies are urging the Medicare Payment Advisory Commission to revise its blueprint for repealing the Sustainable Growth Rate formula.

While the physician community has been lobbying hard for a permanent fix to the SGR, the statutory formula used in setting Medicare physician fees, the coalition of medical societies is not satisfied with how MedPAC proposes to solve the problem. In an Oct. 3 letter to MedPAC Chairman Glenn Hackbarth, the coalition said the commission’s current plan compounds the financial pressures physicians face and potentially threaten access.

Under the MedPAC plan, outlined at a meeting on Sept. 15, the current SGR formula would be repealed, the almost 30% physician payment cut slated for Jan. 1 would be averted, and a 10-year plan would be enacted to establish a predictable series of fee updates for physicians.

In advance of MedPAC’s Oct. 6-7 meeting to finalize the plan, coalition members said that they object to how the commission proposes to achieve this.

Under the MedPAC plan, payments for some primary care services would be frozen for 10 years, with a 17% cut to the remaining services for 3 years, followed by a payment freeze. The coalition said the plan to cut and freeze payments was "risky," since it comes at a time when physicians must choose between making costly technology investments or face financial penalties from Medicare. They added that the 17% cut has the potential to threaten access to care.

Another sticking point is how MedPAC proposes to pay for eliminating the SGR. That $200 billion would be funded through cuts to postacute care, increased beneficiary cost sharing, as well as payment cuts to hospitals, labs, drugs, Medicare Advantage, and durable medical equipment.

Coalition members contend that providers should not have to bear the brunt of these cuts. They suggested that MedPAC instead embrace offsets identified by other groups, such as the Congressional Budget Office, the Simpson-Bowles Commission, and the so-called Senate Gang of Six. Those existing proposals draw on a broader scope of items and therefore limit the impact on providers and beneficiaries, according to the coalition’s letter.

The physician groups also questioned the revenue projections underlying the proposal. In their letter to MedPAC, the physician groups said that MedPAC’s prediction that aggregate Medicare revenues to physicians will increase despite a proposed 17% pay cut simply didn’t make sense.

"Even if expenditures per patient did go up at the projected rate, it cannot be presumed that net incomes and physicians’ ability to cover their cost of practice will increase accordingly," according to the letter. "In fact, with such a large gap between projected practice costs and proposed payment rates, there is every reason to think that physician incomes will shrink, potentially reducing their ability to retain staff and continue to provide high quality care to Medicare beneficiaries."

The American Medical Association and more than 40 medical specialty societies are urging the Medicare Payment Advisory Commission to revise its blueprint for repealing the Sustainable Growth Rate formula.

While the physician community has been lobbying hard for a permanent fix to the SGR, the statutory formula used in setting Medicare physician fees, the coalition of medical societies is not satisfied with how MedPAC proposes to solve the problem. In an Oct. 3 letter to MedPAC Chairman Glenn Hackbarth, the coalition said the commission’s current plan compounds the financial pressures physicians face and potentially threaten access.

Under the MedPAC plan, outlined at a meeting on Sept. 15, the current SGR formula would be repealed, the almost 30% physician payment cut slated for Jan. 1 would be averted, and a 10-year plan would be enacted to establish a predictable series of fee updates for physicians.

In advance of MedPAC’s Oct. 6-7 meeting to finalize the plan, coalition members said that they object to how the commission proposes to achieve this.

Under the MedPAC plan, payments for some primary care services would be frozen for 10 years, with a 17% cut to the remaining services for 3 years, followed by a payment freeze. The coalition said the plan to cut and freeze payments was "risky," since it comes at a time when physicians must choose between making costly technology investments or face financial penalties from Medicare. They added that the 17% cut has the potential to threaten access to care.

Another sticking point is how MedPAC proposes to pay for eliminating the SGR. That $200 billion would be funded through cuts to postacute care, increased beneficiary cost sharing, as well as payment cuts to hospitals, labs, drugs, Medicare Advantage, and durable medical equipment.

Coalition members contend that providers should not have to bear the brunt of these cuts. They suggested that MedPAC instead embrace offsets identified by other groups, such as the Congressional Budget Office, the Simpson-Bowles Commission, and the so-called Senate Gang of Six. Those existing proposals draw on a broader scope of items and therefore limit the impact on providers and beneficiaries, according to the coalition’s letter.

The physician groups also questioned the revenue projections underlying the proposal. In their letter to MedPAC, the physician groups said that MedPAC’s prediction that aggregate Medicare revenues to physicians will increase despite a proposed 17% pay cut simply didn’t make sense.

"Even if expenditures per patient did go up at the projected rate, it cannot be presumed that net incomes and physicians’ ability to cover their cost of practice will increase accordingly," according to the letter. "In fact, with such a large gap between projected practice costs and proposed payment rates, there is every reason to think that physician incomes will shrink, potentially reducing their ability to retain staff and continue to provide high quality care to Medicare beneficiaries."

Blue Shield of California will soon stop covering bevacizumab for the treatment of metastatic breast cancer.

The coverage decision, which goes into effect on Oct. 17, comes a few months after the Food and Drug Administration’s Oncologic Drugs Advisory Committee recommended that the agency withdraw its approval of bevacizumab (Avastin) when used in combination with paclitaxel chemotherapy for first-line HER2-negative metastatic breast cancer, concluding that the treatment was not safe or effective.

The FDA commissioner has not made a final decision about whether to withdraw bevacizumab’s approval for metastatic breast cancer.

Blue Shield of California, which insures about 3.3 million Californians, will consider paying for bevacizumab for the treatment metastatic breast cancer on a "case-by-case basis," the company wrote in its updated coverage policy. They will also continue to cover the drug for women who are already being treated with it. The decision will not affect the insurer’s coverage of other indications of bevacizumab.

Blue Shield of California is not the first health plan to suspend coverage of bevacizumab, but it is the largest. Earlier this year, three regional insurers dropped coverage for bevacizumab for metastatic breast cancer. However, the Centers for Medicare and Medicaid Services continues to offer coverage through Medicare.

Charlotte Arnold, a spokeswoman for bevacizumab’s manufacturer, Genentech, said health plans should continue to cover the drug since it is still FDA approved and recommended for use under guidelines from the National Comprehensive Cancer Network. "We continue to believe that women with this incurable disease should have the ability to choose Avastin as an option if they and their doctor believe it’s the right option for them," she said.

Blue Shield of California will soon stop covering bevacizumab for the treatment of metastatic breast cancer.

The coverage decision, which goes into effect on Oct. 17, comes a few months after the Food and Drug Administration’s Oncologic Drugs Advisory Committee recommended that the agency withdraw its approval of bevacizumab (Avastin) when used in combination with paclitaxel chemotherapy for first-line HER2-negative metastatic breast cancer, concluding that the treatment was not safe or effective.

The FDA commissioner has not made a final decision about whether to withdraw bevacizumab’s approval for metastatic breast cancer.

Blue Shield of California, which insures about 3.3 million Californians, will consider paying for bevacizumab for the treatment metastatic breast cancer on a "case-by-case basis," the company wrote in its updated coverage policy. They will also continue to cover the drug for women who are already being treated with it. The decision will not affect the insurer’s coverage of other indications of bevacizumab.

Blue Shield of California is not the first health plan to suspend coverage of bevacizumab, but it is the largest. Earlier this year, three regional insurers dropped coverage for bevacizumab for metastatic breast cancer. However, the Centers for Medicare and Medicaid Services continues to offer coverage through Medicare.

Charlotte Arnold, a spokeswoman for bevacizumab’s manufacturer, Genentech, said health plans should continue to cover the drug since it is still FDA approved and recommended for use under guidelines from the National Comprehensive Cancer Network. "We continue to believe that women with this incurable disease should have the ability to choose Avastin as an option if they and their doctor believe it’s the right option for them," she said.

Blue Shield of California will soon stop covering bevacizumab for the treatment of metastatic breast cancer.

The coverage decision, which goes into effect on Oct. 17, comes a few months after the Food and Drug Administration’s Oncologic Drugs Advisory Committee recommended that the agency withdraw its approval of bevacizumab (Avastin) when used in combination with paclitaxel chemotherapy for first-line HER2-negative metastatic breast cancer, concluding that the treatment was not safe or effective.

The FDA commissioner has not made a final decision about whether to withdraw bevacizumab’s approval for metastatic breast cancer.

Blue Shield of California, which insures about 3.3 million Californians, will consider paying for bevacizumab for the treatment metastatic breast cancer on a "case-by-case basis," the company wrote in its updated coverage policy. They will also continue to cover the drug for women who are already being treated with it. The decision will not affect the insurer’s coverage of other indications of bevacizumab.

Blue Shield of California is not the first health plan to suspend coverage of bevacizumab, but it is the largest. Earlier this year, three regional insurers dropped coverage for bevacizumab for metastatic breast cancer. However, the Centers for Medicare and Medicaid Services continues to offer coverage through Medicare.

Charlotte Arnold, a spokeswoman for bevacizumab’s manufacturer, Genentech, said health plans should continue to cover the drug since it is still FDA approved and recommended for use under guidelines from the National Comprehensive Cancer Network. "We continue to believe that women with this incurable disease should have the ability to choose Avastin as an option if they and their doctor believe it’s the right option for them," she said.

Fifteen years ago, the concept of the hospitalist was a revolution in medicine. Now a slew of subspecialties are getting into the mix, with neurologists, obstetricians, orthopedists, and even dermatologists calling themselves hospitalists.

Some of the factors fueling the rise of these new programs are the same ones that caused so many internists to become hospitalists in the 1990s. Across specialties, physicians are so busy with their outpatient practices that they don’t have the time or inclination to see patients in the hospital.

Courtesy Dr. S. Andrew Josephson

But traditional medicine hospitalists can’t fill all those needs, said Dr. S. Andrew Josephson, director of the neurohospitalist program at the University of California, San Francisco. In neurology, for example, medicine hospitalists have increasingly been asked to take on more of the neurology cases that come in through the ED, but they lack the training to feel comfortable managing the broad spectrum of neurological disorders in the hospital, he said.

The creation of neurohospitalist programs has been a way to take the pressure off of both outpatient neurologists as well as medicine hospitalists, Dr. Josephson said. And so far, very few physicians seem to mind handing off the work. "There’s not a lot of turf battles here," he said.

Hospitals benefit too, he said, because having a neurohospitalist available 24-7 to cover the ED makes it easier for hospitals to be experts in neurologic care and be certified as Primary Stroke Centers.

Similar trends can be seen in orthopedics, where hospitals are also having a tough time getting orthopedists to take call. Dr. Kurt Ehlert, an orthopedic hospitalist and the national director of orthopedic services for the physician staffing firm Delphi Healthcare Partners, said that they have largely been able to defuse turf concerns among community-based orthopedists by firmly establishing that the hospitalist group will not take elective cases. The orthopedic hospitalists mainly handle fracture care and when an elective case comes their way, they get the patient started on therapy and refer them to a physician in the community.

"The center of gravity for physician practice in almost every specialty is moving away from the hospital," said Dr. John R. Nelson, a traditional medicine hospitalist in Bellevue, Wash., and a cofounder and past president of the Society of Hospital Medicine.

More and more physicians are realizing that by focusing on the outpatient setting they can generate more income, are less likely to be sued, and don’t have to work nights and weekends, Dr. Nelson said. Because of this, they are limiting their hospital work as much as possible. "We need to fill the hole," he said. "We’re filling the hole with hospitalists in some cases."

In specialties like obstetrics and gynecology, the hospitalist trend is catching on fast, said Dr. Rob Olson, an obstetric hospitalist in Bellingham, Wash., who was recently elected to be the first president of the Society of Ob/Gyn Hospitalists. The exact number of ob.gyns. practicing as hospitalists is unknown, Dr. Olson said, but he estimates that there are currently 142 programs in hospitals around the country. The growth in obstetrics and gynecology hospitalist programs has been explosive, growing from about 15 programs only 5 years ago, according to Dr. Olson.

While there are a variety of models for how to run an ob.gyn. hospitalist program, the major driver for all of them seems to be the enormous malpractice exposure in obstetrics. The idea behind having an obstetric hospitalist program is that there is always a qualified physician in the hospital to handle obstetric emergencies and deliveries. Theoretically, that reduces bad outcomes and therefore brings down malpractice litigation and settlement costs.

There is already some evidence to support that idea. In one study, researchers analyzed perinatal malpractice claims and found that most of the money paid out in obstetric malpractice cases is the result of "substandard care." The researchers concluded that more than half of hospital litigation costs could be avoided with a few changes, including 24-hour in-house obstetric coverage (Obstet. Gynecol. 2008;112:1279-83).

But even with studies supporting the premise of the ob.gyn. hospitalist movement, there is still a great need for more data on cost, quality, and patient satisfaction with these programs, Dr. Olson said.

Unanswered questions abound in other specialties too. Dr. Nelson said he’s optimistic that hospitalists from across specialties will embrace the quality improvement example set in medicine and pediatrics, but the idea that setting up hospitalist programs in a variety of other specialties will definitely lead to better care for patients is still unproven. And it could take another 5-10 years before that evidence is available, leaving hospitals to make a business decision before all the evidence is in, he said.

A recent study looking at how hospitalists impact the cost of the care in the hospital drives home that point. The study, demonstrated that when hospitalists managed inpatients, the average length of stay was shorter and hospital costs were less. But in the month after discharge, Medicare costs and readmissions were higher (Ann. Intern. Med. 2011;155:152-9).

"The main lesson for the other specialties adopting the hospitalist model is, ‘don’t be in such a hurry to pat yourself on the back,’ " Dr. Nelson said. "Wait for some proof."

But while Dr. Nelson said the study is important and should not be dismissed, he also noted that even with the extra costs associated with care by a hospitalist, there isn’t another model out there for solving the problem of finding doctors to care for patients in the hospital.

Aside from costs and quality, it remains to be seen exactly how the addition of hospitalists from other specialties will impact the relationship between physicians in and out of the hospital, how it will affect career longevity in these specialties, and if it could change how hospitals credential physicians, Dr. Nelson said.

Many of these questions will be addressed in November when the Society of Hospital Medicine convenes a one-day meeting in Las Vegas to look at the trends in the specialization of the hospital medicine field. The meeting, which is being organized by Dr. Nelson, will include presentations on the lessons learned in the first 15 years of hospital medicine and the return on investment from these programs.

Fifteen years ago, the concept of the hospitalist was a revolution in medicine. Now a slew of subspecialties are getting into the mix, with neurologists, obstetricians, orthopedists, and even dermatologists calling themselves hospitalists.

Some of the factors fueling the rise of these new programs are the same ones that caused so many internists to become hospitalists in the 1990s. Across specialties, physicians are so busy with their outpatient practices that they don’t have the time or inclination to see patients in the hospital.

Courtesy Dr. S. Andrew Josephson

But traditional medicine hospitalists can’t fill all those needs, said Dr. S. Andrew Josephson, director of the neurohospitalist program at the University of California, San Francisco. In neurology, for example, medicine hospitalists have increasingly been asked to take on more of the neurology cases that come in through the ED, but they lack the training to feel comfortable managing the broad spectrum of neurological disorders in the hospital, he said.

The creation of neurohospitalist programs has been a way to take the pressure off of both outpatient neurologists as well as medicine hospitalists, Dr. Josephson said. And so far, very few physicians seem to mind handing off the work. "There’s not a lot of turf battles here," he said.

Hospitals benefit too, he said, because having a neurohospitalist available 24-7 to cover the ED makes it easier for hospitals to be experts in neurologic care and be certified as Primary Stroke Centers.

Similar trends can be seen in orthopedics, where hospitals are also having a tough time getting orthopedists to take call. Dr. Kurt Ehlert, an orthopedic hospitalist and the national director of orthopedic services for the physician staffing firm Delphi Healthcare Partners, said that they have largely been able to defuse turf concerns among community-based orthopedists by firmly establishing that the hospitalist group will not take elective cases. The orthopedic hospitalists mainly handle fracture care and when an elective case comes their way, they get the patient started on therapy and refer them to a physician in the community.

"The center of gravity for physician practice in almost every specialty is moving away from the hospital," said Dr. John R. Nelson, a traditional medicine hospitalist in Bellevue, Wash., and a cofounder and past president of the Society of Hospital Medicine.

More and more physicians are realizing that by focusing on the outpatient setting they can generate more income, are less likely to be sued, and don’t have to work nights and weekends, Dr. Nelson said. Because of this, they are limiting their hospital work as much as possible. "We need to fill the hole," he said. "We’re filling the hole with hospitalists in some cases."

In specialties like obstetrics and gynecology, the hospitalist trend is catching on fast, said Dr. Rob Olson, an obstetric hospitalist in Bellingham, Wash., who was recently elected to be the first president of the Society of Ob/Gyn Hospitalists. The exact number of ob.gyns. practicing as hospitalists is unknown, Dr. Olson said, but he estimates that there are currently 142 programs in hospitals around the country. The growth in obstetrics and gynecology hospitalist programs has been explosive, growing from about 15 programs only 5 years ago, according to Dr. Olson.

While there are a variety of models for how to run an ob.gyn. hospitalist program, the major driver for all of them seems to be the enormous malpractice exposure in obstetrics. The idea behind having an obstetric hospitalist program is that there is always a qualified physician in the hospital to handle obstetric emergencies and deliveries. Theoretically, that reduces bad outcomes and therefore brings down malpractice litigation and settlement costs.

There is already some evidence to support that idea. In one study, researchers analyzed perinatal malpractice claims and found that most of the money paid out in obstetric malpractice cases is the result of "substandard care." The researchers concluded that more than half of hospital litigation costs could be avoided with a few changes, including 24-hour in-house obstetric coverage (Obstet. Gynecol. 2008;112:1279-83).

But even with studies supporting the premise of the ob.gyn. hospitalist movement, there is still a great need for more data on cost, quality, and patient satisfaction with these programs, Dr. Olson said.

Unanswered questions abound in other specialties too. Dr. Nelson said he’s optimistic that hospitalists from across specialties will embrace the quality improvement example set in medicine and pediatrics, but the idea that setting up hospitalist programs in a variety of other specialties will definitely lead to better care for patients is still unproven. And it could take another 5-10 years before that evidence is available, leaving hospitals to make a business decision before all the evidence is in, he said.

A recent study looking at how hospitalists impact the cost of the care in the hospital drives home that point. The study, demonstrated that when hospitalists managed inpatients, the average length of stay was shorter and hospital costs were less. But in the month after discharge, Medicare costs and readmissions were higher (Ann. Intern. Med. 2011;155:152-9).

"The main lesson for the other specialties adopting the hospitalist model is, ‘don’t be in such a hurry to pat yourself on the back,’ " Dr. Nelson said. "Wait for some proof."

But while Dr. Nelson said the study is important and should not be dismissed, he also noted that even with the extra costs associated with care by a hospitalist, there isn’t another model out there for solving the problem of finding doctors to care for patients in the hospital.

Aside from costs and quality, it remains to be seen exactly how the addition of hospitalists from other specialties will impact the relationship between physicians in and out of the hospital, how it will affect career longevity in these specialties, and if it could change how hospitals credential physicians, Dr. Nelson said.

Many of these questions will be addressed in November when the Society of Hospital Medicine convenes a one-day meeting in Las Vegas to look at the trends in the specialization of the hospital medicine field. The meeting, which is being organized by Dr. Nelson, will include presentations on the lessons learned in the first 15 years of hospital medicine and the return on investment from these programs.

Fifteen years ago, the concept of the hospitalist was a revolution in medicine. Now a slew of subspecialties are getting into the mix, with neurologists, obstetricians, orthopedists, and even dermatologists calling themselves hospitalists.

Some of the factors fueling the rise of these new programs are the same ones that caused so many internists to become hospitalists in the 1990s. Across specialties, physicians are so busy with their outpatient practices that they don’t have the time or inclination to see patients in the hospital.

Courtesy Dr. S. Andrew Josephson

But traditional medicine hospitalists can’t fill all those needs, said Dr. S. Andrew Josephson, director of the neurohospitalist program at the University of California, San Francisco. In neurology, for example, medicine hospitalists have increasingly been asked to take on more of the neurology cases that come in through the ED, but they lack the training to feel comfortable managing the broad spectrum of neurological disorders in the hospital, he said.

The creation of neurohospitalist programs has been a way to take the pressure off of both outpatient neurologists as well as medicine hospitalists, Dr. Josephson said. And so far, very few physicians seem to mind handing off the work. "There’s not a lot of turf battles here," he said.

Hospitals benefit too, he said, because having a neurohospitalist available 24-7 to cover the ED makes it easier for hospitals to be experts in neurologic care and be certified as Primary Stroke Centers.

Similar trends can be seen in orthopedics, where hospitals are also having a tough time getting orthopedists to take call. Dr. Kurt Ehlert, an orthopedic hospitalist and the national director of orthopedic services for the physician staffing firm Delphi Healthcare Partners, said that they have largely been able to defuse turf concerns among community-based orthopedists by firmly establishing that the hospitalist group will not take elective cases. The orthopedic hospitalists mainly handle fracture care and when an elective case comes their way, they get the patient started on therapy and refer them to a physician in the community.

"The center of gravity for physician practice in almost every specialty is moving away from the hospital," said Dr. John R. Nelson, a traditional medicine hospitalist in Bellevue, Wash., and a cofounder and past president of the Society of Hospital Medicine.

More and more physicians are realizing that by focusing on the outpatient setting they can generate more income, are less likely to be sued, and don’t have to work nights and weekends, Dr. Nelson said. Because of this, they are limiting their hospital work as much as possible. "We need to fill the hole," he said. "We’re filling the hole with hospitalists in some cases."

In specialties like obstetrics and gynecology, the hospitalist trend is catching on fast, said Dr. Rob Olson, an obstetric hospitalist in Bellingham, Wash., who was recently elected to be the first president of the Society of Ob/Gyn Hospitalists. The exact number of ob.gyns. practicing as hospitalists is unknown, Dr. Olson said, but he estimates that there are currently 142 programs in hospitals around the country. The growth in obstetrics and gynecology hospitalist programs has been explosive, growing from about 15 programs only 5 years ago, according to Dr. Olson.

While there are a variety of models for how to run an ob.gyn. hospitalist program, the major driver for all of them seems to be the enormous malpractice exposure in obstetrics. The idea behind having an obstetric hospitalist program is that there is always a qualified physician in the hospital to handle obstetric emergencies and deliveries. Theoretically, that reduces bad outcomes and therefore brings down malpractice litigation and settlement costs.

There is already some evidence to support that idea. In one study, researchers analyzed perinatal malpractice claims and found that most of the money paid out in obstetric malpractice cases is the result of "substandard care." The researchers concluded that more than half of hospital litigation costs could be avoided with a few changes, including 24-hour in-house obstetric coverage (Obstet. Gynecol. 2008;112:1279-83).

But even with studies supporting the premise of the ob.gyn. hospitalist movement, there is still a great need for more data on cost, quality, and patient satisfaction with these programs, Dr. Olson said.

Unanswered questions abound in other specialties too. Dr. Nelson said he’s optimistic that hospitalists from across specialties will embrace the quality improvement example set in medicine and pediatrics, but the idea that setting up hospitalist programs in a variety of other specialties will definitely lead to better care for patients is still unproven. And it could take another 5-10 years before that evidence is available, leaving hospitals to make a business decision before all the evidence is in, he said.

A recent study looking at how hospitalists impact the cost of the care in the hospital drives home that point. The study, demonstrated that when hospitalists managed inpatients, the average length of stay was shorter and hospital costs were less. But in the month after discharge, Medicare costs and readmissions were higher (Ann. Intern. Med. 2011;155:152-9).

"The main lesson for the other specialties adopting the hospitalist model is, ‘don’t be in such a hurry to pat yourself on the back,’ " Dr. Nelson said. "Wait for some proof."

But while Dr. Nelson said the study is important and should not be dismissed, he also noted that even with the extra costs associated with care by a hospitalist, there isn’t another model out there for solving the problem of finding doctors to care for patients in the hospital.

Aside from costs and quality, it remains to be seen exactly how the addition of hospitalists from other specialties will impact the relationship between physicians in and out of the hospital, how it will affect career longevity in these specialties, and if it could change how hospitals credential physicians, Dr. Nelson said.

Many of these questions will be addressed in November when the Society of Hospital Medicine convenes a one-day meeting in Las Vegas to look at the trends in the specialization of the hospital medicine field. The meeting, which is being organized by Dr. Nelson, will include presentations on the lessons learned in the first 15 years of hospital medicine and the return on investment from these programs.

Dr. Jeffrey L. Greenwald has spent the last several years testing strategies to improve the way that hospitalists handle the discharge process. A hospitalist at Massachusetts General Hospital in Boston, Dr. Greenwald first looked at this issue as a coinvestigator for Project RED (Re-Engineered Discharge) while at Boston University Medical Center. Today, he continues that work as a coinvestigator for Project BOOST (Better Outcomes for Older Adults Through Safe Transitions), a quality improvement project from the Society of Hospital Medicine, which is also aimed at improving the discharge process and reducing readmissions.

In an interview, Dr. Greenwald explained the paradigm shift that is going on in the way hospitalists plan for discharge.

HN: Is the Affordable Care Act likely to push hospitalists to think more about how to reduce readmissions?

Dr. Greenwald: It will push hospital administrators to place pressure on hospitalist programs to think about how care transitions occur, specifically discharges and handoffs. But it will also begin to put more emphasis on the relationship between hospitalists and after-care providers. My hope is that long before hospitalists feel their hospital administrators bearing down on them, they will have grabbed this issue by the horns and decided to take it on themselves.

HN: Is Project BOOST the right tool to help hospitalists tackle preventable readmissions?

Dr. Greenwald: I think it is one of the right tools, and it is evidence based. There are many tools. The data on Project BOOST are just beginning to roll in. Our data on readmissions are not as robust as those from the Care Transitions Program and Project RED, which were randomized controlled trials. We are different in that we are a quality improvement project, and that has made uniform data collection across sites more challenging. But we have a number of sites that have now demonstrated moderate to significant decreases in readmission rates using elements of Project BOOST.

HN: What else can an individual hospitalist do to lower readmissions at his or her institution?

Dr. Greenwald: We want to move away from the idea of what the individual does, and move toward what the individual can contribute to the team and to the system. We’ve built the medical model for decades on the hard work and good intentions of the individual, and realistically that’s gotten us about as far as we can go in terms of readmission rates and other adverse events after discharge. I think that we need to move toward thinking about how the hospitalist plays a role in the care continuum in a number of areas: facilitating communication to after-care providers; ensuring appropriate, adequate, and timely follow-up; making sure that care standards are at their highest; and providing some accessibility to a provider who can help patients during the postdischarge period.

HN: Before there was Project BOOST, you were part of Project RED. What lessons did you learn from that experience?

Dr. Greenwald: First, we learned that it is critical that the roles and responsibilities around the discharge process and the care transition be very clearly delineated. It shouldn’t be based on "what Jeff Greenwald does." It has to be based on the hospitalist’s role in this process, so that if I take a vacation, the system doesn’t fall apart. Second, the discharge process really needs to begin at admission. It must engage not only the care team in the hospital, but also the patient and the appropriate family members or other caregivers. Third, no matter how well you oil your system in the hospital, some events are unpredictable. There’s no substitute for connecting with the patient to make sure they get through those first 3 days after discharge.

Dr. Jeffrey L. Greenwald has spent the last several years testing strategies to improve the way that hospitalists handle the discharge process. A hospitalist at Massachusetts General Hospital in Boston, Dr. Greenwald first looked at this issue as a coinvestigator for Project RED (Re-Engineered Discharge) while at Boston University Medical Center. Today, he continues that work as a coinvestigator for Project BOOST (Better Outcomes for Older Adults Through Safe Transitions), a quality improvement project from the Society of Hospital Medicine, which is also aimed at improving the discharge process and reducing readmissions.

In an interview, Dr. Greenwald explained the paradigm shift that is going on in the way hospitalists plan for discharge.

HN: Is the Affordable Care Act likely to push hospitalists to think more about how to reduce readmissions?

Dr. Greenwald: It will push hospital administrators to place pressure on hospitalist programs to think about how care transitions occur, specifically discharges and handoffs. But it will also begin to put more emphasis on the relationship between hospitalists and after-care providers. My hope is that long before hospitalists feel their hospital administrators bearing down on them, they will have grabbed this issue by the horns and decided to take it on themselves.

HN: Is Project BOOST the right tool to help hospitalists tackle preventable readmissions?

Dr. Greenwald: I think it is one of the right tools, and it is evidence based. There are many tools. The data on Project BOOST are just beginning to roll in. Our data on readmissions are not as robust as those from the Care Transitions Program and Project RED, which were randomized controlled trials. We are different in that we are a quality improvement project, and that has made uniform data collection across sites more challenging. But we have a number of sites that have now demonstrated moderate to significant decreases in readmission rates using elements of Project BOOST.

HN: What else can an individual hospitalist do to lower readmissions at his or her institution?

Dr. Greenwald: We want to move away from the idea of what the individual does, and move toward what the individual can contribute to the team and to the system. We’ve built the medical model for decades on the hard work and good intentions of the individual, and realistically that’s gotten us about as far as we can go in terms of readmission rates and other adverse events after discharge. I think that we need to move toward thinking about how the hospitalist plays a role in the care continuum in a number of areas: facilitating communication to after-care providers; ensuring appropriate, adequate, and timely follow-up; making sure that care standards are at their highest; and providing some accessibility to a provider who can help patients during the postdischarge period.

HN: Before there was Project BOOST, you were part of Project RED. What lessons did you learn from that experience?

Dr. Greenwald: First, we learned that it is critical that the roles and responsibilities around the discharge process and the care transition be very clearly delineated. It shouldn’t be based on "what Jeff Greenwald does." It has to be based on the hospitalist’s role in this process, so that if I take a vacation, the system doesn’t fall apart. Second, the discharge process really needs to begin at admission. It must engage not only the care team in the hospital, but also the patient and the appropriate family members or other caregivers. Third, no matter how well you oil your system in the hospital, some events are unpredictable. There’s no substitute for connecting with the patient to make sure they get through those first 3 days after discharge.

Dr. Jeffrey L. Greenwald has spent the last several years testing strategies to improve the way that hospitalists handle the discharge process. A hospitalist at Massachusetts General Hospital in Boston, Dr. Greenwald first looked at this issue as a coinvestigator for Project RED (Re-Engineered Discharge) while at Boston University Medical Center. Today, he continues that work as a coinvestigator for Project BOOST (Better Outcomes for Older Adults Through Safe Transitions), a quality improvement project from the Society of Hospital Medicine, which is also aimed at improving the discharge process and reducing readmissions.

In an interview, Dr. Greenwald explained the paradigm shift that is going on in the way hospitalists plan for discharge.

HN: Is the Affordable Care Act likely to push hospitalists to think more about how to reduce readmissions?

Dr. Greenwald: It will push hospital administrators to place pressure on hospitalist programs to think about how care transitions occur, specifically discharges and handoffs. But it will also begin to put more emphasis on the relationship between hospitalists and after-care providers. My hope is that long before hospitalists feel their hospital administrators bearing down on them, they will have grabbed this issue by the horns and decided to take it on themselves.

HN: Is Project BOOST the right tool to help hospitalists tackle preventable readmissions?

Dr. Greenwald: I think it is one of the right tools, and it is evidence based. There are many tools. The data on Project BOOST are just beginning to roll in. Our data on readmissions are not as robust as those from the Care Transitions Program and Project RED, which were randomized controlled trials. We are different in that we are a quality improvement project, and that has made uniform data collection across sites more challenging. But we have a number of sites that have now demonstrated moderate to significant decreases in readmission rates using elements of Project BOOST.

HN: What else can an individual hospitalist do to lower readmissions at his or her institution?

Dr. Greenwald: We want to move away from the idea of what the individual does, and move toward what the individual can contribute to the team and to the system. We’ve built the medical model for decades on the hard work and good intentions of the individual, and realistically that’s gotten us about as far as we can go in terms of readmission rates and other adverse events after discharge. I think that we need to move toward thinking about how the hospitalist plays a role in the care continuum in a number of areas: facilitating communication to after-care providers; ensuring appropriate, adequate, and timely follow-up; making sure that care standards are at their highest; and providing some accessibility to a provider who can help patients during the postdischarge period.

HN: Before there was Project BOOST, you were part of Project RED. What lessons did you learn from that experience?

Dr. Greenwald: First, we learned that it is critical that the roles and responsibilities around the discharge process and the care transition be very clearly delineated. It shouldn’t be based on "what Jeff Greenwald does." It has to be based on the hospitalist’s role in this process, so that if I take a vacation, the system doesn’t fall apart. Second, the discharge process really needs to begin at admission. It must engage not only the care team in the hospital, but also the patient and the appropriate family members or other caregivers. Third, no matter how well you oil your system in the hospital, some events are unpredictable. There’s no substitute for connecting with the patient to make sure they get through those first 3 days after discharge.

Physicians working in large group practices may have had some experience with bundled payments, but most doctors aren't prepared for these types of payment changes.

Physicians and hospitals now have the chance to test out bundled payments on a range of conditions under a new Medicare initiative.

In August, officials at the Centers for Medicare and Medicaid Services released a request for applications (RFA) inviting physicians, hospitals, and other health care providers to participate in the Bundled Payments for Care Improvement initiative.

The program, which was mandated under the Affordable Care Act, offers a variety of options for bundling payments for a hospital stay, for postdischarge services, or for both the hospital stay and the postdischarge care.

The move toward bundled payments is a major shift in how the government pays for medical care. Instead of paying hospitals, physicians, and other providers separately, this initiative would combine the payment over an episode of care for a specific condition. The aim of the program is to incentivize clinicians to work together and provide better continuity of care, resulting in better quality and lower costs.

“Today, Medicare pays for care the wrong way,” Health and Human Services Secretary Kathleen Sebelius said during a teleconference to announce the bundling program. “Payments are based on the quantity of care, the amount of services delivered, not the quality of that care. And that leaves us too often with a system that actually can punish the providers that are most successful at getting and keeping their patients healthy.”

The new bundling program offers four ways that health care providers can receive a bundled payment, three of which provide payment retrospectively, and one that offers a prospective payment. For example, under some of the retrospective payment models, CMS and the providers would agree on a target payment amount for the episode of care and providers would be paid under the original Medicare fee-for-service system, but at a negotiated discount of 2%–3% or greater. At the end of the care episode, the total payment would be compared with the target price and providers would be able to share in the savings, according to CMS.

The prospective payment model would work differently.

Under that option, CMS would make a single bundled payment to the hospital to cover all services provided during the inpatient stay by the hospital, physicians, and other providers. That payment would offer at least a 3% discount to Medicare. Under this option, physicians and other providers would submit “no pay” claims to Medicare and the hospital would pay them out of the single bundled payment.

In addition to the options of prospective or retrospective payment, providers could choose how long the episode of care will be and what conditions they want to bundle payment for, and what services would be included in the payment. CMS officials said they wanted to make the program flexible so that a range of hospitals, physicians, and other providers could participate.

Although the application period has already closed for those organizations interested in model 1, those that are interested in applying for models 2, 3, and 4 have until Nov. 4 to do so. More information on the program and how to apply is available at www.innovations.cms.gov/areas-of-focus/patient-care-models/bundled-payments-for-care-improvement.html

Dr. Richard Gilfillan, the acting director of the CMS Innovation Center, which is overseeing the bundling initiative, said he expects that hundreds of organizations will apply. CMS will consider a number of factors in choosing participants for the program including the best proposals for care improvement, the number of patients involved, the conditions addressed, and the price discounts offered, he said.

The bundled payment program is a unique opportunity for hospitals to redesign their systems to promote better care coordination, Dr. Gilfillan said, and have that effort supported through Medicare payments.

The idea is to eliminate the traditional barriers between physicians and other providers – both inpatient and outpatient – all of whom may be involved in the care of a single condition, said Dr. Nancy Nielson, senior adviser to the CMS Innovation Center and past president of the American Medical Association.

“I do believe that both physicians and hospitals will find this [to be] an opportunity that's flexible enough to give them the opportunity to begin to learn how to get paid for care differently,” Dr. Nielson said.

The AMA was still reviewing the bundled payment details at press time, but praised CMS for making the program flexible. Dr. Cecil B. Wilson, who is the AMA immediate past president, said the organization will urge federal officials to encourage applications for physician-led bundling projects.

“For this to be successful, and for physicians to participate actively, then they need to be a part of that process rather than just some larger corporation or larger hospital system or health plan that's organizing these,” he said.

“We think those are important as well, but we also think it's important that physicians be a part of that leadership,” he added

While there are physicians working in large group practices that have had some experience with bundled payments, most doctors aren't prepared for these types of payment changes, Dr. Wilson said. So the AMA is also recommending that CMS provide technical assistance and data to interested physicians.

Health care consultant Robert Minkin urged physicians to seriously consider applying for the bundling program. The program is a sentinel event in the move from fee for service to more centralized, coordinated care model, he said.

“The implications of bundled payments and other clinical integration models are that we come to a common, best-evidence practice approach to care that manages on a fixed budget,” said Mr. Minkin, senior vice president at the Camden Group. “Physicians who can survive in an environment like that will thrive. For those physicians who have difficulty in those situations, it's going to be very tough.

The program is an opportunity for hospitals to redesign their systems to promote better care coordination.

Source DR. GILFILLAN

Physicians working in large group practices may have had some experience with bundled payments, but most doctors aren't prepared for these types of payment changes.

Physicians and hospitals now have the chance to test out bundled payments on a range of conditions under a new Medicare initiative.

In August, officials at the Centers for Medicare and Medicaid Services released a request for applications (RFA) inviting physicians, hospitals, and other health care providers to participate in the Bundled Payments for Care Improvement initiative.

The program, which was mandated under the Affordable Care Act, offers a variety of options for bundling payments for a hospital stay, for postdischarge services, or for both the hospital stay and the postdischarge care.

The move toward bundled payments is a major shift in how the government pays for medical care. Instead of paying hospitals, physicians, and other providers separately, this initiative would combine the payment over an episode of care for a specific condition. The aim of the program is to incentivize clinicians to work together and provide better continuity of care, resulting in better quality and lower costs.

“Today, Medicare pays for care the wrong way,” Health and Human Services Secretary Kathleen Sebelius said during a teleconference to announce the bundling program. “Payments are based on the quantity of care, the amount of services delivered, not the quality of that care. And that leaves us too often with a system that actually can punish the providers that are most successful at getting and keeping their patients healthy.”

The new bundling program offers four ways that health care providers can receive a bundled payment, three of which provide payment retrospectively, and one that offers a prospective payment. For example, under some of the retrospective payment models, CMS and the providers would agree on a target payment amount for the episode of care and providers would be paid under the original Medicare fee-for-service system, but at a negotiated discount of 2%–3% or greater. At the end of the care episode, the total payment would be compared with the target price and providers would be able to share in the savings, according to CMS.

The prospective payment model would work differently.

Under that option, CMS would make a single bundled payment to the hospital to cover all services provided during the inpatient stay by the hospital, physicians, and other providers. That payment would offer at least a 3% discount to Medicare. Under this option, physicians and other providers would submit “no pay” claims to Medicare and the hospital would pay them out of the single bundled payment.

In addition to the options of prospective or retrospective payment, providers could choose how long the episode of care will be and what conditions they want to bundle payment for, and what services would be included in the payment. CMS officials said they wanted to make the program flexible so that a range of hospitals, physicians, and other providers could participate.

Although the application period has already closed for those organizations interested in model 1, those that are interested in applying for models 2, 3, and 4 have until Nov. 4 to do so. More information on the program and how to apply is available at www.innovations.cms.gov/areas-of-focus/patient-care-models/bundled-payments-for-care-improvement.html

Dr. Richard Gilfillan, the acting director of the CMS Innovation Center, which is overseeing the bundling initiative, said he expects that hundreds of organizations will apply. CMS will consider a number of factors in choosing participants for the program including the best proposals for care improvement, the number of patients involved, the conditions addressed, and the price discounts offered, he said.

The bundled payment program is a unique opportunity for hospitals to redesign their systems to promote better care coordination, Dr. Gilfillan said, and have that effort supported through Medicare payments.

The idea is to eliminate the traditional barriers between physicians and other providers – both inpatient and outpatient – all of whom may be involved in the care of a single condition, said Dr. Nancy Nielson, senior adviser to the CMS Innovation Center and past president of the American Medical Association.

“I do believe that both physicians and hospitals will find this [to be] an opportunity that's flexible enough to give them the opportunity to begin to learn how to get paid for care differently,” Dr. Nielson said.

The AMA was still reviewing the bundled payment details at press time, but praised CMS for making the program flexible. Dr. Cecil B. Wilson, who is the AMA immediate past president, said the organization will urge federal officials to encourage applications for physician-led bundling projects.

“For this to be successful, and for physicians to participate actively, then they need to be a part of that process rather than just some larger corporation or larger hospital system or health plan that's organizing these,” he said.

“We think those are important as well, but we also think it's important that physicians be a part of that leadership,” he added

While there are physicians working in large group practices that have had some experience with bundled payments, most doctors aren't prepared for these types of payment changes, Dr. Wilson said. So the AMA is also recommending that CMS provide technical assistance and data to interested physicians.

Health care consultant Robert Minkin urged physicians to seriously consider applying for the bundling program. The program is a sentinel event in the move from fee for service to more centralized, coordinated care model, he said.

“The implications of bundled payments and other clinical integration models are that we come to a common, best-evidence practice approach to care that manages on a fixed budget,” said Mr. Minkin, senior vice president at the Camden Group. “Physicians who can survive in an environment like that will thrive. For those physicians who have difficulty in those situations, it's going to be very tough.

The program is an opportunity for hospitals to redesign their systems to promote better care coordination.

Source DR. GILFILLAN

Physicians working in large group practices may have had some experience with bundled payments, but most doctors aren't prepared for these types of payment changes.

Physicians and hospitals now have the chance to test out bundled payments on a range of conditions under a new Medicare initiative.

In August, officials at the Centers for Medicare and Medicaid Services released a request for applications (RFA) inviting physicians, hospitals, and other health care providers to participate in the Bundled Payments for Care Improvement initiative.

The program, which was mandated under the Affordable Care Act, offers a variety of options for bundling payments for a hospital stay, for postdischarge services, or for both the hospital stay and the postdischarge care.

The move toward bundled payments is a major shift in how the government pays for medical care. Instead of paying hospitals, physicians, and other providers separately, this initiative would combine the payment over an episode of care for a specific condition. The aim of the program is to incentivize clinicians to work together and provide better continuity of care, resulting in better quality and lower costs.

“Today, Medicare pays for care the wrong way,” Health and Human Services Secretary Kathleen Sebelius said during a teleconference to announce the bundling program. “Payments are based on the quantity of care, the amount of services delivered, not the quality of that care. And that leaves us too often with a system that actually can punish the providers that are most successful at getting and keeping their patients healthy.”

The new bundling program offers four ways that health care providers can receive a bundled payment, three of which provide payment retrospectively, and one that offers a prospective payment. For example, under some of the retrospective payment models, CMS and the providers would agree on a target payment amount for the episode of care and providers would be paid under the original Medicare fee-for-service system, but at a negotiated discount of 2%–3% or greater. At the end of the care episode, the total payment would be compared with the target price and providers would be able to share in the savings, according to CMS.

The prospective payment model would work differently.

Under that option, CMS would make a single bundled payment to the hospital to cover all services provided during the inpatient stay by the hospital, physicians, and other providers. That payment would offer at least a 3% discount to Medicare. Under this option, physicians and other providers would submit “no pay” claims to Medicare and the hospital would pay them out of the single bundled payment.

In addition to the options of prospective or retrospective payment, providers could choose how long the episode of care will be and what conditions they want to bundle payment for, and what services would be included in the payment. CMS officials said they wanted to make the program flexible so that a range of hospitals, physicians, and other providers could participate.

Although the application period has already closed for those organizations interested in model 1, those that are interested in applying for models 2, 3, and 4 have until Nov. 4 to do so. More information on the program and how to apply is available at www.innovations.cms.gov/areas-of-focus/patient-care-models/bundled-payments-for-care-improvement.html

Dr. Richard Gilfillan, the acting director of the CMS Innovation Center, which is overseeing the bundling initiative, said he expects that hundreds of organizations will apply. CMS will consider a number of factors in choosing participants for the program including the best proposals for care improvement, the number of patients involved, the conditions addressed, and the price discounts offered, he said.

The bundled payment program is a unique opportunity for hospitals to redesign their systems to promote better care coordination, Dr. Gilfillan said, and have that effort supported through Medicare payments.

The idea is to eliminate the traditional barriers between physicians and other providers – both inpatient and outpatient – all of whom may be involved in the care of a single condition, said Dr. Nancy Nielson, senior adviser to the CMS Innovation Center and past president of the American Medical Association.

“I do believe that both physicians and hospitals will find this [to be] an opportunity that's flexible enough to give them the opportunity to begin to learn how to get paid for care differently,” Dr. Nielson said.

The AMA was still reviewing the bundled payment details at press time, but praised CMS for making the program flexible. Dr. Cecil B. Wilson, who is the AMA immediate past president, said the organization will urge federal officials to encourage applications for physician-led bundling projects.

“For this to be successful, and for physicians to participate actively, then they need to be a part of that process rather than just some larger corporation or larger hospital system or health plan that's organizing these,” he said.

“We think those are important as well, but we also think it's important that physicians be a part of that leadership,” he added

While there are physicians working in large group practices that have had some experience with bundled payments, most doctors aren't prepared for these types of payment changes, Dr. Wilson said. So the AMA is also recommending that CMS provide technical assistance and data to interested physicians.

Health care consultant Robert Minkin urged physicians to seriously consider applying for the bundling program. The program is a sentinel event in the move from fee for service to more centralized, coordinated care model, he said.

“The implications of bundled payments and other clinical integration models are that we come to a common, best-evidence practice approach to care that manages on a fixed budget,” said Mr. Minkin, senior vice president at the Camden Group. “Physicians who can survive in an environment like that will thrive. For those physicians who have difficulty in those situations, it's going to be very tough.

The program is an opportunity for hospitals to redesign their systems to promote better care coordination.

Source DR. GILFILLAN

President Obama's plan to bring down the federal deficit includes about $320 billion in cuts to Medicare, Medicaid, and other federal health programs, and gives more power to the Independent Payment Advisory Board.

In the proposal, which was sent to Congress Sept. 19, the Obama administration calls for a combination of spending cuts and tax changes that it estimates would save about $4 trillion over the next decade. The plan includes about $248 billion in Medicare cuts — but the administration said that 90% of the savings would come by reducing “overpayments” to providers and drug companies. The president's plan would not change the eligibility age for receiving Medicare benefits.

“This plan reduces wasteful subsidies and erroneous payments while changing some incentives that often lead to excessive health care costs,” President Obama said during a speech in the Rose Garden.

But the president's plan was met with immediate opposition from Republicans in Congress. The top Republican in the Senate, Sen. Mitch McConnell (R-Ky.), said the president was “punting” on entitlement reform and that the proposal would not lead to meaningful deficit reduction.

The proposal includes $32 billion in payment cuts to skilled nursing facilities, long-term care hospitals, inpatient rehabilitation facilities, and home health care from 2014 through 2021. The administration expects to save another $4 billion over the next decade by paying skilled nursing facilities and inpatient rehabilitation facilities the same price for postacute care for hip and knee replacement and hip fractures. Currently, payments are higher in inpatient rehabilitation facilities.

The plan would also tie reimbursement for skilled nursing facilities to reductions in hospital readmissions. Under the Affordable Care Act, Medicare will begin penalizing hospitals with high readmission rates. The new deficit reduction proposal would reduce skilled nursing facility payments by up to 3% beginning in 2015 for those facilities with high rates of preventable hospital readmissions. The administration estimates that the policy will save about $2 billion over 10 years.

The proposal also calls for ending add-on payments for hospitals and physicians working in low-population states, starting in 2013. That would save about $2 billion over 10 years, according to the administration's plan. The president is also proposing 10% reductions in Indirect Medical Education add-on payments beginning in 2013, saving about $9 billion over 10 years.

In some good news for physicians, the proposal assumes that Congress will step in to stop pending cuts to Medicare physician payment rates. Without action from Congress, Medicare is scheduled to cut physician payments by nearly 30% in January 2012. However, the proposal also gives greater authority to the Independent Payment Advisory Board (IPAB), a panel that has been widely criticized by the physician community.

The panel was created under the Affordable Care Act, and charged with recommending Medicare cuts to reduce the rate of growth in the program. Under the Affordable Care Act, the IPAB would make recommendations for cuts when the projected Medicare growth rate per capita exceeds the gross domestic product plus 1%. But under the new proposal, that target rate would be lowered to gross domestic product (GDP) plus 0.5%. And the proposal calls for giving the panel new tools, such as the ability to consider “value-based benefit design” and an automatic enforcement mechanism for cuts. The president proposed that same change back in April when unveiling an earlier plan for managing the deficit.

One of the plan's biggest targets for Medicare spending cuts is the drug industry. Under the president's proposal, drug companies would be required to give the Medicare program the same rebates it gives to Medicaid for brand name and generic drugs provided to low-income beneficiaries. The change, which would take effect in 2013, is estimated to save about $135 billion over 10 years.

The president's deficit reduction proposal would also reduce the amount that Medicare pays to providers to cover bad debts.

Currently, Medicare reimburses providers for 70% of nonpayment of deductibles and copayments after they have made reasonable efforts to collect the money. Under the president's proposal, that amount would drop to 25%, which is similar to what private insurers pay. The change would be phased in over 3 years starting in 2013, and it is estimated to save about $20 billion over the next decade.

The president also plans to trim another $5 billion from the Medicare program by cutting waste, fraud, and abuse. For instance, starting in 2014 the proposal would put in place a prior-authorization requirement for the top-priced imaging services, a change that is estimated to save about $900 million over the next decade.

The plan would also make some changes that directly affect what beneficiaries pay for the program. Beginning in 2017, the administration proposes to increase income-related premiums in Medicare Part B and Part D by 15%. About 25% of beneficiaries would be subject to the higher premiums. That would save about $20 billion over 10 years.

Under the Medicaid program, the president's proposal seeks to save about $66 billion over 10 years. The administration estimated that it would save about $26 billion by limiting the ability of states to use provider taxes as a way to boost their federal matching payments. Specifically, the administration proposes lowering the Medicaid provider tax threshold from 6% in 2014 to 3.5% in 2017.

President Obama's plan to bring down the federal deficit includes about $320 billion in cuts to Medicare, Medicaid, and other federal health programs, and gives more power to the Independent Payment Advisory Board.

In the proposal, which was sent to Congress Sept. 19, the Obama administration calls for a combination of spending cuts and tax changes that it estimates would save about $4 trillion over the next decade. The plan includes about $248 billion in Medicare cuts — but the administration said that 90% of the savings would come by reducing “overpayments” to providers and drug companies. The president's plan would not change the eligibility age for receiving Medicare benefits.

“This plan reduces wasteful subsidies and erroneous payments while changing some incentives that often lead to excessive health care costs,” President Obama said during a speech in the Rose Garden.

But the president's plan was met with immediate opposition from Republicans in Congress. The top Republican in the Senate, Sen. Mitch McConnell (R-Ky.), said the president was “punting” on entitlement reform and that the proposal would not lead to meaningful deficit reduction.

The proposal includes $32 billion in payment cuts to skilled nursing facilities, long-term care hospitals, inpatient rehabilitation facilities, and home health care from 2014 through 2021. The administration expects to save another $4 billion over the next decade by paying skilled nursing facilities and inpatient rehabilitation facilities the same price for postacute care for hip and knee replacement and hip fractures. Currently, payments are higher in inpatient rehabilitation facilities.

The plan would also tie reimbursement for skilled nursing facilities to reductions in hospital readmissions. Under the Affordable Care Act, Medicare will begin penalizing hospitals with high readmission rates. The new deficit reduction proposal would reduce skilled nursing facility payments by up to 3% beginning in 2015 for those facilities with high rates of preventable hospital readmissions. The administration estimates that the policy will save about $2 billion over 10 years.

The proposal also calls for ending add-on payments for hospitals and physicians working in low-population states, starting in 2013. That would save about $2 billion over 10 years, according to the administration's plan. The president is also proposing 10% reductions in Indirect Medical Education add-on payments beginning in 2013, saving about $9 billion over 10 years.

In some good news for physicians, the proposal assumes that Congress will step in to stop pending cuts to Medicare physician payment rates. Without action from Congress, Medicare is scheduled to cut physician payments by nearly 30% in January 2012. However, the proposal also gives greater authority to the Independent Payment Advisory Board (IPAB), a panel that has been widely criticized by the physician community.

The panel was created under the Affordable Care Act, and charged with recommending Medicare cuts to reduce the rate of growth in the program. Under the Affordable Care Act, the IPAB would make recommendations for cuts when the projected Medicare growth rate per capita exceeds the gross domestic product plus 1%. But under the new proposal, that target rate would be lowered to gross domestic product (GDP) plus 0.5%. And the proposal calls for giving the panel new tools, such as the ability to consider “value-based benefit design” and an automatic enforcement mechanism for cuts. The president proposed that same change back in April when unveiling an earlier plan for managing the deficit.

One of the plan's biggest targets for Medicare spending cuts is the drug industry. Under the president's proposal, drug companies would be required to give the Medicare program the same rebates it gives to Medicaid for brand name and generic drugs provided to low-income beneficiaries. The change, which would take effect in 2013, is estimated to save about $135 billion over 10 years.

The president's deficit reduction proposal would also reduce the amount that Medicare pays to providers to cover bad debts.

Currently, Medicare reimburses providers for 70% of nonpayment of deductibles and copayments after they have made reasonable efforts to collect the money. Under the president's proposal, that amount would drop to 25%, which is similar to what private insurers pay. The change would be phased in over 3 years starting in 2013, and it is estimated to save about $20 billion over the next decade.

The president also plans to trim another $5 billion from the Medicare program by cutting waste, fraud, and abuse. For instance, starting in 2014 the proposal would put in place a prior-authorization requirement for the top-priced imaging services, a change that is estimated to save about $900 million over the next decade.

The plan would also make some changes that directly affect what beneficiaries pay for the program. Beginning in 2017, the administration proposes to increase income-related premiums in Medicare Part B and Part D by 15%. About 25% of beneficiaries would be subject to the higher premiums. That would save about $20 billion over 10 years.

Under the Medicaid program, the president's proposal seeks to save about $66 billion over 10 years. The administration estimated that it would save about $26 billion by limiting the ability of states to use provider taxes as a way to boost their federal matching payments. Specifically, the administration proposes lowering the Medicaid provider tax threshold from 6% in 2014 to 3.5% in 2017.

President Obama's plan to bring down the federal deficit includes about $320 billion in cuts to Medicare, Medicaid, and other federal health programs, and gives more power to the Independent Payment Advisory Board.

In the proposal, which was sent to Congress Sept. 19, the Obama administration calls for a combination of spending cuts and tax changes that it estimates would save about $4 trillion over the next decade. The plan includes about $248 billion in Medicare cuts — but the administration said that 90% of the savings would come by reducing “overpayments” to providers and drug companies. The president's plan would not change the eligibility age for receiving Medicare benefits.

“This plan reduces wasteful subsidies and erroneous payments while changing some incentives that often lead to excessive health care costs,” President Obama said during a speech in the Rose Garden.

But the president's plan was met with immediate opposition from Republicans in Congress. The top Republican in the Senate, Sen. Mitch McConnell (R-Ky.), said the president was “punting” on entitlement reform and that the proposal would not lead to meaningful deficit reduction.

The proposal includes $32 billion in payment cuts to skilled nursing facilities, long-term care hospitals, inpatient rehabilitation facilities, and home health care from 2014 through 2021. The administration expects to save another $4 billion over the next decade by paying skilled nursing facilities and inpatient rehabilitation facilities the same price for postacute care for hip and knee replacement and hip fractures. Currently, payments are higher in inpatient rehabilitation facilities.

The plan would also tie reimbursement for skilled nursing facilities to reductions in hospital readmissions. Under the Affordable Care Act, Medicare will begin penalizing hospitals with high readmission rates. The new deficit reduction proposal would reduce skilled nursing facility payments by up to 3% beginning in 2015 for those facilities with high rates of preventable hospital readmissions. The administration estimates that the policy will save about $2 billion over 10 years.

The proposal also calls for ending add-on payments for hospitals and physicians working in low-population states, starting in 2013. That would save about $2 billion over 10 years, according to the administration's plan. The president is also proposing 10% reductions in Indirect Medical Education add-on payments beginning in 2013, saving about $9 billion over 10 years.

In some good news for physicians, the proposal assumes that Congress will step in to stop pending cuts to Medicare physician payment rates. Without action from Congress, Medicare is scheduled to cut physician payments by nearly 30% in January 2012. However, the proposal also gives greater authority to the Independent Payment Advisory Board (IPAB), a panel that has been widely criticized by the physician community.

The panel was created under the Affordable Care Act, and charged with recommending Medicare cuts to reduce the rate of growth in the program. Under the Affordable Care Act, the IPAB would make recommendations for cuts when the projected Medicare growth rate per capita exceeds the gross domestic product plus 1%. But under the new proposal, that target rate would be lowered to gross domestic product (GDP) plus 0.5%. And the proposal calls for giving the panel new tools, such as the ability to consider “value-based benefit design” and an automatic enforcement mechanism for cuts. The president proposed that same change back in April when unveiling an earlier plan for managing the deficit.

One of the plan's biggest targets for Medicare spending cuts is the drug industry. Under the president's proposal, drug companies would be required to give the Medicare program the same rebates it gives to Medicaid for brand name and generic drugs provided to low-income beneficiaries. The change, which would take effect in 2013, is estimated to save about $135 billion over 10 years.

The president's deficit reduction proposal would also reduce the amount that Medicare pays to providers to cover bad debts.

Currently, Medicare reimburses providers for 70% of nonpayment of deductibles and copayments after they have made reasonable efforts to collect the money. Under the president's proposal, that amount would drop to 25%, which is similar to what private insurers pay. The change would be phased in over 3 years starting in 2013, and it is estimated to save about $20 billion over the next decade.

The president also plans to trim another $5 billion from the Medicare program by cutting waste, fraud, and abuse. For instance, starting in 2014 the proposal would put in place a prior-authorization requirement for the top-priced imaging services, a change that is estimated to save about $900 million over the next decade.

The plan would also make some changes that directly affect what beneficiaries pay for the program. Beginning in 2017, the administration proposes to increase income-related premiums in Medicare Part B and Part D by 15%. About 25% of beneficiaries would be subject to the higher premiums. That would save about $20 billion over 10 years.

Under the Medicaid program, the president's proposal seeks to save about $66 billion over 10 years. The administration estimated that it would save about $26 billion by limiting the ability of states to use provider taxes as a way to boost their federal matching payments. Specifically, the administration proposes lowering the Medicaid provider tax threshold from 6% in 2014 to 3.5% in 2017.

Big Funding for Home Visits

The federal government has awarded $224 million to states to support visits by nurses and social workers to families with at-risk children. Families that choose to participate in the Maternal, Infant, and Early Childhood Home Visiting Program can receive counseling to improve their parenting skills or to better prepare their children for school, as well as information on child health and development. Research indicates that home visits can improve maternal and child health, reduce the potential for child abuse, and help children reach developmental milestones, according to the Department of Health and Human Services' announcement of the awards. “Home visiting programs play a critical role in the nation's efforts to help children get off to a strong start,” HHS Secretary Kathleen Sebelius said in the statement.

Implant Registry Considered

Advisors to the Food and Drug Administration have begun discussing creation of a national registry of women receiving silicone-gel filled breast implants to monitor the long-term safety of the devices, as several Scandinavian countries do. At the summer meeting of the FDA's General and Plastic Surgery Devices Panel, manufacturers Allergan and Mentor said that postapproval studies of their silicone implants have low follow-up rates. In response, Dr. William Maisel, deputy director and chief scientist at the FDA's Center for Devices and Radiological Health, said that better follow-up is important and that a U.S. breast implant registry needs to be considered.

Visitation Right Gets Boost

The HHS has unveiled new guidance for protecting hospital patients' right to choose their own visitors, including same-sex domestic partners. The rule establishing that right was finalized last November, and the guidance — which applies to all patients at hospitals that take Medicare or Medicaid patients — is intended to help hospitals understand and follow the policy. Hospitals now must explain to all patients their right to choose who may visit them during a hospital stay, as well as their right to withdraw such consent to visitation at any time. The guidance also supports enforcement of the right of patients to designate the person of their choice, including a same-sex partner, to make medical decisions on their behalf should they become incapacitated. “It is unacceptable that, in the past, some same-sex partners were denied the right to visit their loved ones in times of need,” HHS Secretary Kathleen Sebelius said in a statement.

Stem Cell Challenge Goes On

The fate of federal funding for stem cell research continues to be in the hands of the courts. Plaintiffs challenging federal funding of human embryonic stem cell research have appealed the July U.S. District Court dismissal of their case. The plaintiffs say that the stem cell policy issued by the National Institutes of Health in 2009 is illegal because federal funding for research involving the destruction of human embryos is banned by the Dickey-Wicker amendment. But the Obama administration has countered that the policy does not fund destruction of embryos but rather supports the research done on stem cells from embryos. Federal funding for embryonic stem cell research will continue as the court reviews the case.

Lower Managed Care Cost

Seniors enrolling this fall in Medicare Advantage managed care plans for 2012 will probably see lower premiums for the same benefits, officials at the Centers for Medicare and Medicaid Services announced. They predicted an average premium that is 4% less than this year's, with the decline due in part to greater negotiating authority granted to the CMS under the Affordable Care Act. For example, the CMS can now deny what it sees as unreasonable premium and cost-sharing increases, CMS Deputy Administrator Jonathan Blum said. Nevertheless, he and his colleagues predicted 10% more enrollment in the plans over 2011. The estimate conflicts with a Congressional Budget Office projection that enrollment will decline in response to health-reform changes.

Safety System Pilot Online

The FDA announced a pilot of what it hopes eventually will be a major rapid-response electronic safety-surveillance system. Even this “Mini-Sentinel” pilot run is no small effort, according to the agency. It includes 17 data partners and covers 99 million people, 2.4 billion medical encounters, and the dispensing of 2.9 billion prescriptions. The database should allow researchers to get answers to drug-safety questions within weeks, not months. Initial data on the Mini-Sentinel program was presented at the International Conference on Pharmacoepidemiology and Therapeutic Risk Management in mid-August.

Big Funding for Home Visits

The federal government has awarded $224 million to states to support visits by nurses and social workers to families with at-risk children. Families that choose to participate in the Maternal, Infant, and Early Childhood Home Visiting Program can receive counseling to improve their parenting skills or to better prepare their children for school, as well as information on child health and development. Research indicates that home visits can improve maternal and child health, reduce the potential for child abuse, and help children reach developmental milestones, according to the Department of Health and Human Services' announcement of the awards. “Home visiting programs play a critical role in the nation's efforts to help children get off to a strong start,” HHS Secretary Kathleen Sebelius said in the statement.

Implant Registry Considered

Advisors to the Food and Drug Administration have begun discussing creation of a national registry of women receiving silicone-gel filled breast implants to monitor the long-term safety of the devices, as several Scandinavian countries do. At the summer meeting of the FDA's General and Plastic Surgery Devices Panel, manufacturers Allergan and Mentor said that postapproval studies of their silicone implants have low follow-up rates. In response, Dr. William Maisel, deputy director and chief scientist at the FDA's Center for Devices and Radiological Health, said that better follow-up is important and that a U.S. breast implant registry needs to be considered.

Visitation Right Gets Boost

The HHS has unveiled new guidance for protecting hospital patients' right to choose their own visitors, including same-sex domestic partners. The rule establishing that right was finalized last November, and the guidance — which applies to all patients at hospitals that take Medicare or Medicaid patients — is intended to help hospitals understand and follow the policy. Hospitals now must explain to all patients their right to choose who may visit them during a hospital stay, as well as their right to withdraw such consent to visitation at any time. The guidance also supports enforcement of the right of patients to designate the person of their choice, including a same-sex partner, to make medical decisions on their behalf should they become incapacitated. “It is unacceptable that, in the past, some same-sex partners were denied the right to visit their loved ones in times of need,” HHS Secretary Kathleen Sebelius said in a statement.

Stem Cell Challenge Goes On

The fate of federal funding for stem cell research continues to be in the hands of the courts. Plaintiffs challenging federal funding of human embryonic stem cell research have appealed the July U.S. District Court dismissal of their case. The plaintiffs say that the stem cell policy issued by the National Institutes of Health in 2009 is illegal because federal funding for research involving the destruction of human embryos is banned by the Dickey-Wicker amendment. But the Obama administration has countered that the policy does not fund destruction of embryos but rather supports the research done on stem cells from embryos. Federal funding for embryonic stem cell research will continue as the court reviews the case.

Lower Managed Care Cost

Seniors enrolling this fall in Medicare Advantage managed care plans for 2012 will probably see lower premiums for the same benefits, officials at the Centers for Medicare and Medicaid Services announced. They predicted an average premium that is 4% less than this year's, with the decline due in part to greater negotiating authority granted to the CMS under the Affordable Care Act. For example, the CMS can now deny what it sees as unreasonable premium and cost-sharing increases, CMS Deputy Administrator Jonathan Blum said. Nevertheless, he and his colleagues predicted 10% more enrollment in the plans over 2011. The estimate conflicts with a Congressional Budget Office projection that enrollment will decline in response to health-reform changes.

Safety System Pilot Online

The FDA announced a pilot of what it hopes eventually will be a major rapid-response electronic safety-surveillance system. Even this “Mini-Sentinel” pilot run is no small effort, according to the agency. It includes 17 data partners and covers 99 million people, 2.4 billion medical encounters, and the dispensing of 2.9 billion prescriptions. The database should allow researchers to get answers to drug-safety questions within weeks, not months. Initial data on the Mini-Sentinel program was presented at the International Conference on Pharmacoepidemiology and Therapeutic Risk Management in mid-August.

Big Funding for Home Visits

The federal government has awarded $224 million to states to support visits by nurses and social workers to families with at-risk children. Families that choose to participate in the Maternal, Infant, and Early Childhood Home Visiting Program can receive counseling to improve their parenting skills or to better prepare their children for school, as well as information on child health and development. Research indicates that home visits can improve maternal and child health, reduce the potential for child abuse, and help children reach developmental milestones, according to the Department of Health and Human Services' announcement of the awards. “Home visiting programs play a critical role in the nation's efforts to help children get off to a strong start,” HHS Secretary Kathleen Sebelius said in the statement.

Implant Registry Considered

Advisors to the Food and Drug Administration have begun discussing creation of a national registry of women receiving silicone-gel filled breast implants to monitor the long-term safety of the devices, as several Scandinavian countries do. At the summer meeting of the FDA's General and Plastic Surgery Devices Panel, manufacturers Allergan and Mentor said that postapproval studies of their silicone implants have low follow-up rates. In response, Dr. William Maisel, deputy director and chief scientist at the FDA's Center for Devices and Radiological Health, said that better follow-up is important and that a U.S. breast implant registry needs to be considered.

Visitation Right Gets Boost

The HHS has unveiled new guidance for protecting hospital patients' right to choose their own visitors, including same-sex domestic partners. The rule establishing that right was finalized last November, and the guidance — which applies to all patients at hospitals that take Medicare or Medicaid patients — is intended to help hospitals understand and follow the policy. Hospitals now must explain to all patients their right to choose who may visit them during a hospital stay, as well as their right to withdraw such consent to visitation at any time. The guidance also supports enforcement of the right of patients to designate the person of their choice, including a same-sex partner, to make medical decisions on their behalf should they become incapacitated. “It is unacceptable that, in the past, some same-sex partners were denied the right to visit their loved ones in times of need,” HHS Secretary Kathleen Sebelius said in a statement.

Stem Cell Challenge Goes On

The fate of federal funding for stem cell research continues to be in the hands of the courts. Plaintiffs challenging federal funding of human embryonic stem cell research have appealed the July U.S. District Court dismissal of their case. The plaintiffs say that the stem cell policy issued by the National Institutes of Health in 2009 is illegal because federal funding for research involving the destruction of human embryos is banned by the Dickey-Wicker amendment. But the Obama administration has countered that the policy does not fund destruction of embryos but rather supports the research done on stem cells from embryos. Federal funding for embryonic stem cell research will continue as the court reviews the case.

Lower Managed Care Cost

Seniors enrolling this fall in Medicare Advantage managed care plans for 2012 will probably see lower premiums for the same benefits, officials at the Centers for Medicare and Medicaid Services announced. They predicted an average premium that is 4% less than this year's, with the decline due in part to greater negotiating authority granted to the CMS under the Affordable Care Act. For example, the CMS can now deny what it sees as unreasonable premium and cost-sharing increases, CMS Deputy Administrator Jonathan Blum said. Nevertheless, he and his colleagues predicted 10% more enrollment in the plans over 2011. The estimate conflicts with a Congressional Budget Office projection that enrollment will decline in response to health-reform changes.

Safety System Pilot Online

The FDA announced a pilot of what it hopes eventually will be a major rapid-response electronic safety-surveillance system. Even this “Mini-Sentinel” pilot run is no small effort, according to the agency. It includes 17 data partners and covers 99 million people, 2.4 billion medical encounters, and the dispensing of 2.9 billion prescriptions. The database should allow researchers to get answers to drug-safety questions within weeks, not months. Initial data on the Mini-Sentinel program was presented at the International Conference on Pharmacoepidemiology and Therapeutic Risk Management in mid-August.