OIG’s Proposed Safe Harbor Regulations Should Promote Integrated Care

The American Hospital Association (AHA) has submitted comments on the Proposed rule issued by HHS’ Office of  Inspector General (OIG) regarding (1) transportation services provided by hospitals; (2) the encouragement of follow-through on the implementation of discharge plans; and (3) the definition of prohibited inducements by physicians to reduce or limit services. The AHA believes that these changes need to be made to help hospitals fulfill the three goals of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) and other initiatives to (1) provide a continuum of care; (2) improve access to care; and (3) improve the affordability of care.


Social Security Act Section 1128A(b) prohibits hospitals and critical access hospitals (CAHs) from knowingly paying physicians in order to induce them to reduce or limit Medicare or Medicaid services to people under the physician’s care. The OIG can institute civil money penalties (CMPs) when this gainsharing provision is violated. In the Proposed rule, the OIG recognized that gainsharing can be beneficial in some circumstances and sought comments on the definition of service limitation (see OIG proposes revisions to anti-kickback safe harbor provisions, October 3, 2014.)

The AHA commented that it is renewing its proposal that the gainsharing prohibition should be interpreted to mean to reduce or limit medically necessary services. “A decision by a hospital and physician to follow protocols that are based on objective quality metrics for certain procedures should not be treated as reducing or limiting services under the statute,” commented the AHA.

The AHA stated that there should be protection from participating in shared saving programs such as accountable care organizations (ACOs) and other value-based purchasing programs established by the ACA. These programs make it necessary for “hospital leaders and physicians to work together to efficiently bring patients the right care, at the right time, in the right setting,” said the AHA.

Discharge Planning

The AHA commented that access to care should be interpreted more broadly than only access to medically necessary services or items. The AHA feels the need to expand this interpretation especially since hospitals are now going to receive a financial penalty for patients that are readmitted to their hospital as required by Section 3025 of the ACA. The AHA notes that hospitals now have a vested interest in making sure that patients follow their discharge plan so that the patient is not readmitted to the hospital, and the hospital is penalized for care they did not or could not provide. The AHA commented that promoting care should include encouraging, supporting or helping patients access care. The AHA argued that hospitals should not have to be concerned about facing penalties for providing scales, blood pressure monitors, and contacts by clinicians by either phone or other electronic devices to ensure that patients are following and implementing their discharge plan.

Transportation Services

The AHA thinks that limiting transportation services to “established patients” with a distance of not greater than 25 miles is too limited. The first problem the AHA noted is that CAHs and sole community hospitals would not be included, as by definition they are required to by 35 miles or more nearest like facility. Secondly, the AHA says it would be difficult to screen-out “established patients” from first time patients as they are boarding a shuttle or other transportation services. This limitation may “unreasonably prevent a hospital from assisting a beneficiary in keeping a critical first appointment,” said the AHA.

In addition the AHA said the Proposed rule is unclear as to whether transportation services to a provider other than the hospital are included. The AHA feels that providing transportation to other providers is necessary in some cases to ensure that patients are following their discharge plan and are receiving sufficient care to avoid rehospitalization.

The AHA is in agreement with the OIG for taking this step to alter its Anti-Kickback and Civil Money Penalty regulations so that they are more in conformance with changes in how care is delivered. AHA Executive Vice President Rick Pollack said, “Congress recognized this and made modest changes four years ago in the Affordable Care Act, which are, in part, the subject of the OIG’s regulatory proposal.”  The AHA stated that many of its comments were provided in response to the OIG’s request for comments on specific topics and looks forward to working with the OIG to develop specific proposed language on these topics that would also be subject to a comment period.

DSH Cuts and Uncompensated Care Costs Impacting Hospital Reimbursement

Medicare payments to hospitals that serve a disproportionate share of poor people will continue to decrease in fiscal year (FY) 2015.  In FY 2015 CMS calculates that the total amount available for the Medicare disproportionate share hospital (DSH)  payment will decrease  by $1.225 billion compared to the amount available in FY 2014.  This decrease should come as no surprise to anyone as the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) required these reductions.  The thinking was that  DHS payment should decrease because as more and more individuals obtain health insurance coverage or are enrolled in an expanded Medicaid, there will be fewer and fewer people who will not be able to pay or have their hospital bills paid for them.  And this has been found to be just the case as the Office of the Assistant Secretary for Planning and Evaluation reported that uncompensated care was reduced by $5.7 billion in 2014.   The great majority of this reduction though came in states that had expanded Medicaid eligibility, putting hospitals in states that did not expand Medicaid eligibility in a particularly difficult spot; they will be receiving less in DSH payments, but the amount of uncompensated care is not decreasing.

DSH Payments

DSH payments began in the 1980s as a way to provide more money to hospitals that serve a poorer population of people who cannot afford to pay or have some other entity like insurance or a public health program pay for their hospital bills. Section 3133 of the ACA dramatically changed how DSH payments would be calculated.  All hospitals would receive 25 percent of what they would have received under the pre-ACA system.  The remaining amount would come from a pool of money the amount of which is calculated based on the change in the percentage of uninsured from the current year to the year just prior to the year the ACA was signed.  As the number of uninsured decreased so would the amount available to hospitals in their DSH payments. For FY 2014 CMS calculated that the percentage of uninsured declined from 18 percent during the year prior to the ACA’s adoption to 16 percent.  For FY 2015 CMS has calculated that the percentage of uninsured is 13.75 percent of the population.

Available Amount

These two reductions have resulted in a corresponding reductions in the amount available for uncompensated care payments, or the portion of the DSH payment not equaling 25 percent of what the DSH payment would have been if the changes in the ACA were no adopted.  For FY 2015 the amount of money for uncompensated care payments is $7.6 billion which is down from $9.033 billion in FY 2014.  CMS estimated in the Final rule updating the hospital inpatient prospective payment system (IPPS) for FY 2015 that hospitals would see approximately a 1.3 percent reduction in the amount of their DSH payments from FY 2014.

The percentage is less than one would expect because during this time period the amount available for the original 25 percent has increased from year to year somewhat offsetting the decrease in uncompensated care payments. This increase is primarily due to the increase in the number of Medicaid recipient due to the expansion of Medicaid, but it also is attributable to just an overall increase in the payment amount over time.  In FY 2014 $3.193 billion was avialable to pay the pre-ACA amount and in the FY 2015 this amount was increased to $3.345 billion. The number of Medicaid patients a hospital treats is used to determine the amount of the hospital pre-ACA DSH payment.

Uncompensated Care

An increase in the amount of Medicaid patients has resulted in a significant decrease in the cost of uncompensated care by hospitals.  HHS is reporting that FY 2014 hospitals incurred $5.7 billion less in uncompensated care costs due to an increase in the number of patients that are now covered by an expanded Medicaid.

This decrease in uncompensated care costs did not occur in states that did not expand Medicaid eligibility. Hospitals in those states find themselves in a difficult situation as they are receiving less DSH payments, but are not seeing an increase in revenue from patients with Medicaid or private insurance coverage.  Many of these hospitals rely heavily on DSH payments and decreases in the amount  of money they receive could have dire consequences for these institutions and the people they serve

Collection of Social and Behavioral Patient Measures Recommended

The inclusion of 12 measures on the social and behavioral aspects of a patient’s life has been recommended by the Institutes of Medicine (IOM) for inclusion in the Stage 3 meaningful use regulations to be implemented in 2017. The inclusion of these measures in the patient electronic health record (EHR) will allow clinicians to recommend that patients use social and behavioral treatments, such as counseling, smoking cessation programs, or participation in social service programs that will improve the overall health of the patient. The report, Capturing Social and Behavioral Domains and Measures in Electronic Health Records: Phase 2, was prepared at the request of several private organizations and government agencies.


The IOM recommends that measures of a patient’s: (1) educational attainment; (2) financial resource strain; (3) stress; (4) depression; (5) physical activity; (6) social isolation; (7) neighborhood median household income; (8) intimate partner violence for women of reproductive age; (9) race and ethnicity; (10) tobacco use; (11) alcohol use; and (12) residential address be included by the Office of the National coordinator of Health and CMS in the Stage 3 meaningful use regulations. The IOM stated that measures of these social and behavioral aspects of a patient already exist and are already being collected by a number of clinicians.

The IOM noted that a majority of this data is self-reported and currently collected by clinicians and as such the inclusion of these measures in the EHR should not add any additional time to a clinician’s encounter with a patient. In addition not all of this data needs to be collected at each patient visit. Some of it does not change over time and it should be sufficient that it is simply contained in the patient’s EHR. Data that describes other measures which change from time-to-time would need to be updated in the patient’s EHR.

Use of Data

The IOM panel noted a concern with the ability to use the data to improve patient outcomes. One issue is that these measures are collected using a variety of different tools and questions. The IOM noted that the adoption of single standardized collection tool would go a long way in making this data more useable to improve health outcomes. The IOM recommended that vendor’s software should be appraised and harmonized to collect this data in a standard manner.

The IOM recommended that the data being collected from these measures be linked to data contained by public health agencies as a means of improving health outcomes. Data in EHR can be used to identify individuals who have come into contact with environmental pollutants, or data can be used to help people find food who may not have the income or resources to obtain sufficient nutrition. Finally this data could be used by public health agencies to assist individual’s enrollment in alcohol and substance abuse treatment programs. The IOM was aware of privacy issues that may arise from these recommended usages of this data and noted that patients should be informed on how the data was going to be used, including any data sharing with public health and welfare agencies.

Additional Measures

The IOM chose these measures because they have the greatest impact on improving health and they are the easiest to implement at this time. The report cautioned that there are a number of other social and behavioral measures that are close to meeting the requirements that would be easy to implement and the use of which would improve a person’s health. In addition the IOM noted that different measures may be more useful at different times. To facilitate this ongoing development and usefulness of social and behavioral measures the IOM recommended that the HHS secretary should convene a task force to review advancements in the measurement of social and behavioral determinants of health and make recommendations for new standards and data elements to be included in medical records.

HHS Outlines Preparedness for Global Climate Change

HHS has released two reports on how it is preparing to respond to climate change. Climate change has been identified as one of the top public health challenges of our time according to HHS. One report, HHS Climate Adaptation Plan, describes how HHS can provide better health services and preparedness for changing health issues as a result of climate change. The second report; HHS’ 2014 Strategic Sustainability Performance Plan describes what HHS is doing to mitigate the agency’s impact on global climate change.

Health Impacts

“Recent reports from the U.S. Global Change Research Program and Intergovernmental Panel on Climate Change indicate that climate change is already negatively affecting human health in the United States, and that it is likely to have greater harmful effects on human health in the future,” according to a statement from HHS. In its Climate Adaptation Plan, HHS identified increased respiratory stress from poor air quality including diminished lung function, increased risk of asthma and premature deaths as one of the main impacts of climate change on human health. Other impacts include increases in plant based allergens, increased exposure to toxic air pollutants, and increased respiratory and asthma conditions from an increased amount of fungus and molds resulting from extreme rainfall and rising temperatures. Conditions sensitive to extreme heat like cardiovascular disease, heat stroke, and respiratory disease could also increase as a result of global warming stated HHS.

Specific Populations

HHS is also worried about the impact of climate change on specific populations of people like the elderly, children, and those with chronic conditions. “Climate change is anticipated to have its greatest impact on people whose health status is already at risk and who have the fewest resources to address or adapt to climate change,” said HHS. Seniors are more at risk from extreme heat waves and have more underlying diseases that increases their health risks and morbidity. HHS pointed out that lower-income people have higher rates of asthma, diabetes and other chronic disease that maybe exasperated by global climate change.

Emergency Preparedness

Increasing the emergency preparedness of the health care system was a large component of HHS’ Climate Adaptation Plan. The objective of a Proposed rule issued in December of 2013 is to establish consistent emergency preparedness requirements for health care providers participating in Medicare and Medicaid and was proposed with global climate change in mind. The Proposed rule would require emergency plans, policies and procedures, communications plans, and training and testing by providers and suppliers who participate in the Medicare and Medicaid programs (see Proposed rule would create emergency preparedness requirements for Medicare, Medicaid, December 27, 2013). Some of the greatest threats to health as a result of global climate change will come from more frequent and severe weather events like heat waves, drought, wildfires, heavy rainfall and flooding and CMS’ main goal is prepare for these natural disasters, said HHS.

In addition HHS is preparing additional reports to assist local health care planning and delivery agencies respond to national disasters, and increasing awareness and participation of volunteer medical groups like the Medical Reserve Corps which is an organization of 200,000 volunteers organized in almost 1,000 local units. These groups and groups participating in the Health Care Coalitions are committed to strengthening public health; reducing vulnerabilities; improving local preparedness, response and recovery capabilities; and building community resilience.

HHS’ Footprint

HHS’ Strategic Sustainability Report describes the agency’s efforts to reduce its impact on global warming. HHS reports that it has reduced its greenhouse gas emission by 12.3 percent when compared to 2008 by reducing energy use and employee travel. The report acknowledges that HHS is not meeting its target in using sustainable buildings. Only 0.73 percent of new and existing buildings are in compliance with Guiding Principles for Federal Leadership in High-Performance and Sustainable Buildings when it had a target of 15 percent of its leased buildings being in compliance with these guiding principles. The report goes on to describe HHS’ efforts at more efficiently using waters, electricity, renewable energy, and fleet management. HHS reports that in 2013 it awarded $40.9 million in contracts to improve energy savings and other efforts to reduce its impact on global climate change. HHS issued its first strategic sustainability report in 2010.