The Problem With Value-Based Purchasing0

This article first appeared in AHLA Weekly on October 31, 2014.

1379617_thumbnailFrom its inception on October 1, 2012,[1] the Hospital Value-Based Purchasing (VBP) Program shifted Medicare’s paradigm to emphasize performance over costs in determining hospital reimbursement.[2] Reducing the overall Medicare reimbursement to hospitals by an estimated $1.4 billion for Fiscal Year (FY) 2015,[3] the VBP Program was quick to secure the attention of the nation’s health care providers. Technically “budget neutral,”[4] the VBP Program will return this same $1.4 billion to hospitals the following year in the form of performance incentives.[5] According to the federal government: The program’s “benefits will be seen in improved patient outcomes, safety, and in the patient’s experience of care. However, [the federal government] cannot estimate these benefits in actual dollar and patient terms.”[6]

As the federal government waits to assess the accuracy of its prediction, the FY 2015 reduction of 1.50% will finally level off at two percent (2%) in 2017.[7] An additional two years, however, are unnecessary to evaluate the VBP Program under fundamental accounting principles when using a general overview into the ways in which successful and profitable companies operate. Viewed from this perspective, the VBP Program is fundamentally flawed, and data from 2015, 2016, or 2017 will not present opportunities for correction. This article suggests that while smaller hospitals may bear the greatest collateral damage from the VBP Program, larger systems may suffer as well. The number of hospitals forced into financial distress or insolvency by the Hospital VBP Program remains to be seen, although consideration should be given to the number of hospitals lost to their communities it would take to undermine the projected benefits relating to outcomes, safety, and the overall patient experience. … Read more →

Administrative, Clinical, Health Care Law, Health Care Reform, Historical, Hospitals, News, Regulatory

Just As Fragile As A Patient0

This article was first published on October 30, 2014 in the Los Angeles Daily Journal.

iStock_000036113648Large“Where there is a why, there is a how.” — Friedrich Nietzsche

The American hospital has evolved greatly over the past 100 years, from the almshouse once visited mainly by the desolate and poor as a last resort to that enigmatic, cutting edge institution which today forms the foundation of modern American health care. Advances in technology and medical science have transformed what were once terminal illnesses into minor health inconveniences, with the real battles against serious health threats typically occurring inside the four walls of a patient’s local hospital. The modern hospital has become such a beacon of hope that in 1986 Congress passed laws granting nearly everyone an unrestricted entitlement to emergency medical treatment at most acute care facilities.

… Read more →

Administrative, Clinical, Community, Health Care Law, Hospital Bill, Hospitals

Safeguarding the Pharmaceutical Distribution System0

This October 23, 2014, e-Bulletin is from the Health Law Committee of the Business Law Section of the California State Bar.

statebarlogoIn November 2013, Congress passed and President Obama signed into law the Drug Quality and Security Act (the “2013 Act,” Public Law 113-54), which intended to create uniform, national licensing standards for wholesale distributors and third-party logistics providers for the purpose of safeguarding the pharmaceutical distribution system.  In passing this new law, Congress recognized the need for clarity in distinguishing between manufacturers, wholesalers and distributors. To this end, the 2013 Act established uniform, national licensing standards that specifically preempted existing state licensing requirements for participation in the supply chain of pharmaceutical products. … Read more →

Administrative, Clinical, E-Bulletins, Health Care Law, Hospitals, News, Regulatory, Technology

Affordable Care Act and Health Plans Offered by Religious Employers0

Update from The State Bar Business Law Section’s HEALTH LAW COMMITTEE – The Affordable Care Act and Health Plans Offered by Religious Employers

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Since first announced in August 2011, the inclusion of contraceptive care as a mandatory component in the employer promotion of preventative services sparked a First Amendment inferno that many thought threatened the Affordable Care Act as well as a number of additional federal and state laws.  As a result, the Federal Government partially recanted this requirement by delaying its implementation for certain entities by an additional year. Regulations promulgated in 2012 kept contraceptive care in the gamut of preventative services, but created a temporary enforcement safe harbor for objecting employers. In 2013, the Federal Government issued proposed rules in an attempt to end the contraception controversy and its challenge to the Affordable Care Act’s commitment to preventative services. Some 200,000 comments later, the preventative services coverage rules in 2013 lowered the burden so employers can sidestep certain separations between church and state.  … Read more →

E-Bulletins, Health Care Law, Health Care Reform, Healthcare Reform, News, Non Clinical, Regulatory