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Holiday Wishes from the President

With the holiday season in full-swing and another year nearly over, there is no better time to reflect upon the accomplishments and challenges that continue to motivate, inspire, and unite us. This year has been one to be proud of and I thank you, our members and supporters for your critical role in the ongoing success of this organization. We do have challenges ahead but your commitment to promoting, educating, and advocating for improved healthcare through physician ownership and governance assures me that 2014 will be an even better year.

Next month our Board of Directors will meet for our annual planning session. At this meeting we will develop a strategic plan that will define our short and long-term goals and shape the organization’s path for years to come. We need your help! At the end of this week you will receive an email inviting you to participate in our annual membership survey. I hope that you will take 15 minutes before January 10 to provide thoughtful feedback to help us to continue to serve you.

I wish you all a safe, happy, and healthy holiday season, a merry Christmas, and a happy New Year.

Best Regards,
Paul Kerens
PHA President
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Capitol Hill
Save the Date: Washington DC Fly-in February 25-26, 2014

PHA News
PHA's 14th Annual Conference and Exhibits: Speaker Applications are Now Being Accepted
Start Participating in PHA Benchmarking in 2014: Collection 23 Starts February 5

Physician-Owned Hospital News
"CMS Extends Deadline for Hospital Ownership Reporting"
"Leveling the Fluctuations of Surgery Costs"
"MGMA Urges 'End-to-End' ICD-10 Testing"
"Fraud-Wary Feds to Regulate EHR Copy-and-Paste Function"
"Rehospitalization Rates Fell in First Year of Medicare Penalties"
"New Affordable Care US Health Plans Will Exclude Top Hospitals"
"Hospitals Look to Limit Transfusions"
"Specialists Notch Victory in New CMS Rule on Quality Reporting"
"Rural Hospitals Rule on Leapfrog List"
"Dec. 31: EHR Incentive Program Reporting Deadline"
"Medicaid Growth Could Aggravate Doctor Shortage"
"As Hospital Prices Soar, a Single Stitch Tops $500"

Capitol Hill

Save the Date: Washington DC Fly-in February 25-26, 2014

PHA will host a Washington, DC Fly-In on February 25-26, 2014. Congress recently passed a three-month extension of SGR that will run out on March 31, 2014, laying the foundation for the chances of a long term SGR fix early next year. The long term fix will be a germane vehicle for H.R. 2027, physician-hospital relief language. This is a significant opportunity for our membership to engage with elected officials leading up to the deadline of the SGR patch. It is extremely important for the PHA members to attend the Fly-In and push for this legislation. Additionally, longtime opponent of physician-owned hospitals, Senator Max Baucus has been slated by President Obama to become the next U.S. Ambassador to China, clearing the way for Senator Ron Wyden to become the next Chairman of the Senate Finance Committee before the end of the legislative session. Senator Wyden is expected to preside over the Committee while Congress considers a permanent fix to SGR. This is by far the best chance that we have had to get relief for physician-owned hospitals.

Additional information will be available in early January. Please save the date, plan to attend, and invite and encourage your colleagues to do the same.
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PHA News

PHA's 14th Annual Conference and Exhibits: Speaker Applications are Now Being Accepted

Gain professional visibility in 2014 by presenting at PHA's 14th Annual Conference & Exhibits, September 24-26, at the Arizona Grand Resort in Phoenix. We are seeking dynamic speakers to share their knowledge, experience, and expertise with an educated audience of physicians, administrators, nurses, clinical staff, and corporate supporters who are involved in our industry. The call for speakers is open now and submissions are due by February 14.

Conference highlights include a series of valuable educational sessions, the latest in best practice research, and the opportunity to network with fellow physician-owned hospital professionals. The 2014 conference has much to offer:

·Discover innovative ways of providing patient care with a focus on quality management and improvement.
·Gain a greater understanding of industry-specific regulations and compliance.
·Learn how the current political environment impacts hospital development and expansion.
·Hear more about the importance of participating in industry advocacy efforts.
·Meet with others in the field through a range of networking opportunities.
·Evaluate the latest products, trends, and technology that can save you time and money.
Registration opens in Spring 2014. For up-to-date information, visit PHA on the web or call (202) 367-1113.

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Start Participating in PHA Benchmarking in 2014: Collection 23 Starts February 5

The Physician Hospitals of America (PHA) benchmarking is a quarterly census tailored to facilities like yours. Active member participation in this survey is vital because it allows us to leverage composite data to demonstrate the high-quality of patient care being provided by physician-owned hospitals. Additionally, you can benefit from detailed individual reports on how your facility stacks up against the national average.

Collection 22 has just concluded. Collection 23, which will run from February 5 to March 5, 2014, will collect quality data from the second quarter and financial data from the fourth quarter of 2013.

Any PHA member facility can participate in this important effort at no cost beginning with the next collection. Visit the benchmarking archives to learn if your facility has participated and email us at to sign up. Past participants will automatically be enrolled.
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Physician-Owned Hospital News

CMS Extends Deadline for Hospital Ownership Reporting
Modern Healthcare (12/10/13) Robeznieks, Andis

The CMS has extended the deadline for filing financial interest reports to March 1, 2014. The reports, required by Section 6001 of the Patient Protection and Affordable Care Act, were originally due Dec. 1. In addition to tightly limiting the growth of existing physician-owned hospitals that participate in Medicare, the Affordable Care Act calls for them to file reports identifying physician owners and investors and listing the "nature and extent” of hospital ownership and investment interests. "CMS wants to have the names of all the individual physicians and their ownership percentage,” said Dr. R. Blake Curd, president-elect of Physician Hospitals of America. "We think the delay is a good start, but we think this requirement should be dissolved altogether.” Curd, a part owner of the Sioux Falls (S.D.) Specialty Clinic, where he practices orthopedic surgery, said the requirement involves filling out a multipage form, but all the pertinent information appears to be on the first page and there has been confusion as to what exactly the CMS wants hospitals to disclose and fill out. "CMS hasn't given terrific clarity on this issue,” Curd said, adding that physician-owned hospitals have been disclosing similar information for years already. "We're proud of the hospitals we own.”
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Leveling the Fluctuations of Surgery Costs (12/05/13) Hambrick, Phil

Bringing wildly fluctuating surgical costs typical of the modern healthcare industry under control requires alternative options, and EmployerDirect Provider Relations Director Phil Hambrick says his company can help big, self-insured employers enhance the quality of their workers' planned medical procedures. Hambrick cites EmployerDirect's recently launched SurgeryPlus, a supplemental healthcare benefit that steers planned procedures to high-quality providers in a small network. He says all surgeons in the network must be board-certified, with a stress on facilities and surgeons with the best results. "By developing a narrow network for planned medical procedures, EmployerDirect offers a direct patient referral source unlike what any other payer model can achieve," Hambrick emphasizes. "Volume is directed to a limited number of providers and services are paid within 7-10 business days." Hambrick also points out that case rates for each instance of care are established and all costs are worked out and disclosed prior to surgery, making the process transparent and letting employees know ahead of time the cost of each procedure. Pre-negotiated costs include the surgeon, assistant surgeon, fees for anesthesia, facility costs, and inpatient diagnostics, therapy, and pharmacy. All covered procedures are elective, with each procedure managed by a care coordinator who helps choose a SurgeryPlus provider, schedules consultations/surgeries, helps in transferring medical records, manages travel logistics, and supervises member satisfaction surveys.
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MGMA Urges 'End-to-End' ICD-10 Testing
HealthLeaders Media (12/10/13) Commins, John

The Medical Group Management Association (MGMA) sent a letter to Health and Human Services Secretary Kathleen Sebelius on Dec. 9 warning that the planned transition to ICD-10 in October 2014 could be prone to major problems unless comprehensive tests are performed on the diagnostic coding system. MGMA President Susan L. Turney, MD, said in the letter that HHS' planned front-end testing of the system will be insufficient, adding that the department should instead perform complete end-to-end testing with any physician's practice that is willing to participate. Such testing should involve returning remittance advice to practices to allow them to see how ICD-10 will affect their reimbursement rates, Turney said. She added that HHS should perform end-to-end testing with a sufficient number of physicians' practices from a variety of different specialities if it is unable to perform testing with all willing providers. Turney said comprehensive end-to-end testing offers a number of benefits, including helping software developers ensure that applications are correctly configured for physicians' practices. She added that failing to perform such testing increases the likelihood that there will be serious disruptions to practices' cash flow. But one healthcare industry consultant dismissed MGMA's concerns as being exaggerated, and said Turney's letter was written out of opposition to ICD-10.
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Fraud-Wary Feds to Regulate EHR Copy-and-Paste Function
Medscape (12/10/13) Lowes, Robert

The Centers for Medicare & Medicaid Services has responded to a report from the Department of Health and Human Services' Office of Inspector General indicating that only 25 percent of 864 hospitals surveyed had policies in place to govern the use of EHR copy-and-paste functions. The survey also found that only 44 percent had EHR audit logs that record the method of data entry, whether it is copy-and-paste, voice recognition or keyboarding. Moreover, about 50 percent of hospitals said they did not have the ability to disable, restrict or customize the copy-and-paste function. OIG said the copy-and-paste capability could lead to fraud, especially if no one edits the cloned information to ensure it is up-to-date and accurate. CMS said in its response that it would regulate the controversial copy-and-paste capability of EHR systems in its campaign against billing fraud. CMS will work closely with the Office of the National Coordinator for Health IT on guidelines and "a comprehensive plan to detect and reduce fraud in EHRs."
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Rehospitalization Rates Fell in First Year of Medicare Penalties
Kaiser Health News (12/09/13) Rau, Jordan

Medicare data for the first eight months of 2013 reveals that fewer than 18 percent of patients were readmitted to the hospital within 30 days after discharge—the lowest rate in years. The drop occurred in the first year that Medicare penalized hospitals financially for high readmission rates. Medicare fined 2,213 hospitals, or about 67 percent of the hospitals evaluated by the program, for high readmission rates. Medicare issued penalties against 2,225 hospitals in the second year, with maximum penalties rising from 1 percent of regular Medicare payments to 2 percent; in the third year, penalties will rise to 3 percent. The decline in readmissions translated into 130,000 fewer readmissions nationally. The Centers for Medicare & Medicaid Services said, "We can see that the decline in all-cause readmission rates that began in 2012 is continuing this year on a widespread basis."
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New Affordable Care US Health Plans Will Exclude Top Hospitals
Financial Times (12/08/13) Kirchgaessner, Stephanie

U.S. residents who purchase insurance plans via online exchanges under the Affordable Care Act will have limited access to some of the nation's best hospitals. In an effort by insurers to curb costs, the majority of insurance plans sold on the new health exchanges in New York, Texas, and California, for instance, do not offer access to Memorial Sloan Kettering, MD Anderson Cancer Center, or Cedars-Sinai. Under certain U.S. health insurance plans, consumers can opt to visit medical facilities that are "out of network," but patients would likely face high out-of-pocket costs and require referrals to verify that such care is medically necessary. Decisions about which private health insurance plans cover which doctors are presently made by insurers and providers. The Mayo Clinic's Kathleen Harrington says the long-term concern for the hospital is that focusing on costs will likely hurt "centers of excellence," which tend to attract complex medical cases.
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Hospitals Look to Limit Transfusions
USA Today (12/08/13) Gluck, Frank

Many hospitals and health systems around the U.S. are actively trying to cut back on the number of blood transfusions they perform following revelations that over-use of transfusions can have serious side-effects. Food and Drug Administration studies have showed that transfusions increase the likelihood of lung injury and other studies have suggested that transfusions may also increase the risk of infection. One of the health systems cutting back on its use of blood products is Lee Memorial Health System in Florida, which has reduced blood-product usage by 2,200 units or 11 percent in the last year. Dr. Chuck Krivenko, Lee Memorial's chief patient safety officer, says that the hospital has saved more than $2.5 million over the last year by cutting back on blood products. "Blood is really important," says Krivenko. "It's lifesaving. But it should really be used sparingly." Krivenko says Lee Memorial hopes to further reduce its blood product usage in the coming year through mandatory blood-usage training sessions for medical staff and by using the electronic medical records system to provide staff with prompts about blood conservation. Other measures include reducing the recommended number of units per transfusion from two to one, and recommending a slight reduction in the level of hemoglobin at which an otherwise stable patient will be transfused.
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Specialists Notch Victory in New CMS Rule on Quality Reporting
Modern Healthcare (12/04/13) Robeznieks, Andis

Specialist medical societies are cheering a decision by the Centers for Medicare and Medicaid Services (CMS) to determine the quality measures specialists will report when the Physician Quality Reporting System (PQRS) takes effect on Jan. 1, 2014. Specialist societies had been upset over a common set of quality measures that was developed for PQRS, which they said would put specialists at a disadvantage compared to primary care and family physicians. One problem with the common set of quality measures is that the existing surgical measures lean toward inpatient operations instead of outpatient procedures, said Dr. Arthur Lerner of Technology Education Consulting in Healthcare. As a result, many specialists were willing to pay the penalty for not participating in PQRS--which amounts to 1.5 percent of their 2013 Medicare Part B charges--rather than take part in what they see as a flawed system, Lerner said. But Lerner noted that CMS' recent decision will encourage specialists to participate in PQRS and will give them the chance to take control of the reporting process. But Medical Group Management Association Senior Government Affairs Representative Jennifer Gasperini said the complexity of the new rule may not encourage as many specialists to participate in PQRS as CMS would like.
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Rural Hospitals Rule on Leapfrog List
Healthcare IT News (12/04/13) Monegain, Bernie

For two years in a row, rural hospitals have established a presence on the Leapfrog Group's 2013 Top Hospital list. On the list are 55 urban hospitals, 13 children's hospitals and 22 rural hospitals. To qualify for the lists, hospitals must earn an "A" from Leapfrog's Hospital Safety Score, which ranks hospitals based on expert analysis of infections, injuries, and medical errors. Leapfrog, a healthcare watchdog, announced its list of top hospitals in earl December, highlighting the diversity of hospitals represented nationwide. The Top Hospitals designation recognizes hospitals that deliver the highest possible care by preventing medical errors, reducing mortality for high-risk procedures, like bypass surgery, and reducing readmissions for patients being treated for conditions like pneumonia and heart attack. "The field of hospitals considered for this year’s elite distinction was more competitive than ever, proving that more hospitals across the country are making quality their top priority," says Leah Binder, president and CEO of Leapfrog. "The larger group of rural hospitals represented, including several critical access hospitals, shows us that any hospital in America can achieve the highest standards of quality and safety, and any community, no matter how small, can benefit from top-notch healthcare."
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Dec. 31: EHR Incentive Program Reporting Deadline
EHR Intelligence (12/02/2013) Freeman, Nicole

The Centers for Medicare and Medicaid Services (CMS) has sent out a reminder to eligible professionals (EPs) about reporting deadlines for both the Medicare and Medicaid Electronic Health Records (EHR) Incentive programs. The first is the EHR Incentive Program reporting deadline on Dec. 31. In addition, CMS says that EPs who participate in the Medicare EHR Incentive Program must attest to demonstrating meaningful use of data collected during the reporting period that ends Dec. 31 by the end of the day on Feb. 28, 2014. Deadlines for attestation information in the Medicaid EHR Incentive program, meanwhile, vary by state. EPs who are participating in both the Medicare and Medicaid EHR Incentive programs can choose to demonstrate meaningful use under one or the other. Beginning Jan. 1, 2015 EPs who failed to demonstrate meaningful use will see their payments adjusted based on the results of the current reporting period. 2014 will be the last year in which Medicare EPs can sign up to participate in the EHR Incentive Program and earn incentives, CMS said. In addition, CMS noted that Stage 2 meaningful use will begin Jan. 1, 2014 for EPs who have completed a minimum of two years of Stage 1.
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Medicaid Growth Could Aggravate Doctor Shortage
New York Times (11/29/13) Goodnough, Abby

The number of Americans enrolled in Medicaid is expected to grow substantially over the next year, though it is not clear whether there will be enough doctors to treat these patients. According to the Congressional Budget Office, nine million people will enroll in Medicaid in the next year thanks to the expansion of the program in some states under the Affordable Care Act (ACA). According to the Congressional Budget Office, nine million people will enroll in Medicaid in the next year. The number of Medicaid enrollees is growing even in states that have decided not to expand the program, due to growing awareness about Medicaid following the passage of ACA. But, experts say that there may not be enough doctors to meet this demand given the fact that many doctors--particularly specialists--are not willing to accept new Medicaid patients due to the program's low reimbursement rates. There is anecdotal evidence that even patients who are able to find a doctor willing to see them are having to wait long periods of time to receive care. Some managed care companies are attempting to head off any problems by recruiting doctors and other healthcare providers to treat new Medicaid enrollees. However, some managed care companies say they are having trouble recruiting specialists.
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As Hospital Prices Soar, a Single Stitch Tops $500
New York Times (12/02/13) Rosenthal, Elisabeth; McGinty, Jo Craven

Economists cite U.S. hospital charges as particularly convoluted, being the biggest driver of medical inflation, according to a new report in the Journal of the American Medical Association. They say the main reason such charges are so high is because mergers and consolidation have made hospitals the most powerful players in a healthcare system that has little price regulation in the private market. The International Federation of Health Plans reports that a day spent as an inpatient at an U.S. hospital costs on average more than $4,000, five times the charge in many other developed nations. Whereas in other countries many basic services are included in the price of a day at a hospital, that model does not apply in U.S. hospitals, where the chargemaster usually has more than 10,000 entries and almost all items and services are chargeable. "Chargemaster prices are basically arbitrary, not connected to underlying costs or market prices," notes University of Southern California Professor Glenn Melnick. He also says hospitals "set prices to maximize revenue, and they raise prices as much as they can—all the research supports that." Furthermore, studies have observed no correlation between hospital prices and patient outcomes. Research also shows that today's hospital mergers have a tendency to elevate prices.
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December 19, 2013

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