Contracting News July 2011

AMA inaugurates Carmel as president, reports health insurers’ claims processing error rate at 20%
The American Medical Association (Chicago, IL) inaugurated Peter W. Carmel, MD, a pediatric neurosurgeon practicing in Newark, New Jersey, as its 166th president. He has served on the AMA board of trustees since 2002. He served on the Council on Long Range Planning and Development and chaired this advisory committee from 2006 to 2007. Carmel served as president of the AMA Foundation and is on the foundation board. The American Medical Association’s (Chicago, IL) fourth annual National Health Insurer Report Card found that the overall rate of inaccurate claims payments increased since 2010 among leading commercial health insurers. Commercial health insurers have an average claims-processing error rate of 19.3 percent, an increase of two percent over 2010. The increase in overall inaccuracy represents an extra 3.6 million in erroneous claims payments compared to last year, and added an estimated $1.5 billion in unnecessary administrative costs to the health system. The AMA estimates that eliminating health insurer claim payment errors would save $17 billion

Geisinger, Bloomsburg health systems consider merger
Geisinger Health System (Danville, PA) and Bloomsburg Health System (Bloomsburg, PA) signed a non-binding letter of intent to explore a potential merger of the two health systems. Bloomsburg Hospital (Bloomsburg, PA) has been looking to partner with a larger healthcare system as it faces increasing financial pressures. No timetable has been set to complete a merger. Geisinger is also working toward a potential merger with Shamokin Area Community Hospital (Coal Township, PA). The two organizations are currently moving through the regulatory approval process.

MedAssets launches new Bundled Payment Solution
MedAssets (Alpharetta, GA) introduced its new Bundled Payment Solution, a reimbursement system specifically designed to manage and transact episode of care payments. The web-based technology intakes the user’s current fee-for-service claims data and groups it into a bundle based on standard quality benchmarks. It also has the ability to calculate compensation based on care a patient should receive per episode and transacts those episodic equivalent payments. Users can also track data at the patient, physician and/or facility level to support more informed contracting and budgeting based upon calculated opportunity for shared savings or potential penalties. MedAssets Bundled Payment Solution runs concurrent to existing reimbursement systems and avoids disruption to current operations.

Three New York hospitals form new health system
Arnot Ogden Medical Center (Elmira, NY), Saint Joseph’s Hospital (Elmira, NY), and Ira Davenport Memorial (Bath, NY) received approval from the New York State Department of Health (Albany, NY) to consolidate. The new 809-bed regional healthcare system, to be called Arnot Health (Elmira, NY), will create approximately 2,900 new jobs and total combined revenues of more than $380 million. Saint Joseph’s dialysis unit and sleep center have already merged with similar departments on the Arnot Ogden campus, and Arnot’s gastroenterology department is preparing to move to the Saint Joseph’s campus, though no moving date has been set.

Cleveland Clinic names new president for Medina Hospital
Cleveland Clinic (Cleveland, OH) promoted Thomas L. Tulisiak, MD to the position of president of Medina Hospital (Medina, OH), effective September 1, 2011. He will replace Rob Stall, who was promoted to chief of operations for Cleveland Clinic’s Regional Hospitals. Tulisiak currently serves as medical director of Cleveland Clinic’s Brunswick Family Health Center and has been VP of medical operations at Medina Hospital.

CMS names Patrick Conway as CMO
CMS (Baltimore, MD) named Dr. Patrick Conway MD, MSc, SFHM as CMO. Conway is a pediatric hospitalist and director of hospital medicine at Children’s Hospital Medical Center (Cincinnati, OH). His key responsibilities at CMS will be administering federal healthcare quality initiatives and setting the government’s quality agenda in an era of massive changes resulting from the Patient Protection and Accountable Care Act of 2010 (ACA). Conway previously served as CMO of the policy division of the Office of Secretary of the U.S. Department of Health and Human Services (Washington, DC) and was a 2007-2008 White House fellow assigned to the Agency for Healthcare Research and Quality (AHRQ) (Rockville, MD).

High Value Healthcare Collaborative adds eight IDN members
Beaumont Hospitals (Royal Oak, MI), Baylor Health Care System (Dallas, TX), MaineHealth (Portland, ME), Scott & White Health Care (Temple, TX), Sutter Health (Sacramento, CA), UCLA Health System (Los Angeles, CA), University of Iowa Health Care (Iowa City, IA), and Virginia Mason Health System (Seattle, WA) were selected to join the High Value Healthcare Collaborative, a national IDN collaborative formed in December 2010. The Collaborative members, which also include Mayo Clinic Health System (Rochester, MN), Denver Health (Denver, CO), Geisinger Health System (Danville, PA), Intermountain Healthcare (Salt Lake City, UT), New England Alliance for Health (formerly Dartmouth Hitchcock Alliance) (Lebanon, NH), Cleveland Clinic (Cleveland, OH) and The Dartmouth Institute for Health Policy and Clinical Practice (Lebanon, NH), commit to sharing care pathways, and cost and outcomes data with their partners and the public as they adopt best practices and new standards of measurement. The current focus of interests is on nine conditions that have been shown nationally to have wide variation in rates, costs and outcomes: Total knee replacement; diabetes; asthma; hip surgery; heart failure; perinatal care; depression; spine surgery; and weight loss surgery. Additional high variation, high cost conditions that affect diverse populations will be added over time.

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