July 2011 Clinical Laboratory News: Regulatory Profiles

HHS Announces Proposed Changes to HIPAA Privacy Rule

Under a rule proposed by the U.S. Department of Health and Human Services Office for Civil Rights, individuals would be given the right to get a report on who has electronically accessed their protected health information. The proposed rule is a change to the Privacy Rule under the Health Insurance Portability and Accountability Act (HIPAA).

With this change, people could obtain this information by requesting an electronic access report that would document the particular persons who electronically accessed and viewed their protected health information. Although covered entities, including physicians, hospitals, labs, health plans, and other healthcare organizations, are currently required by the HIPAA Security Rule to track access to electronic protected health information, they are not required to share this information. The proposed rule also requires an accounting of more detailed information for certain disclosures that are most likely to affect a person’s rights or interests.

To effect the change, all healthcare organizations will be required to update their privacy notices under HIPAA to educate patients about requesting access reports. The new rule will take effect January 1, 2013, if adopted.

Comments on the proposed rule will be accepted through August 1, 2011. To read the proposed rule or submit a comment, go online.

Reform to Net $120 Billion in Savings for Medicare

An analysis issued by the Centers for Medicare and Medicaid Services (CMS) outlines $120 billion in 5-year projected savings resulting from improvements to the Medicare program, including implementation of many provisions in the Affordable Care Act. The report summed up projected savings from several sources, including new tools to combat fraud, waste, and abuse in the Medicare system, as well as delivery system reforms, such as those that deter hospital readmissions.

The report looked at five general areas of projected savings: reforming provider payments to reward quality of care, $55 billion; lowering hospital readmission and hospital-acquired infections, $10 billion; fraud and abuse prevention, $1.8 billion; improvements in durable medical equipment purchasing, $2.9 billion; reducing payments to insurance companies, $50 billion.

The full report is available from the CMS website

HHS Begins Broad Regulatory Review

The U.S. Department of Health and Human Services (HHS) released its preliminary plan for retrospective review of existing rules based on a comprehensive inventory of each of its agencies’ existing regulations. The plan highlights regulations already being modified or streamlined and identifies additional candidates for further review.

Earlier this year, President Obama outlined his plan for ongoing review of regulations in the federal government with the intention of culling rules that are out-of-date, unnecessary, excessively burdensome, or in conflict with other rules.

The HHS plan outlined several areas for improvement, including conflicting requirements between Medicaid and Medicare; reviewing the criteria used to define health professional shortages and medically underserved areas; and using more cost-effective technologies like electronic signatures and document storage.

The full regulatory review plan for the agency is available online.

Report: Most Uninsured Can’t Pay Bills

A new report released by the U.S. Department of Health and Human Services (HHS) shows that few families without health insurance have the financial assets to pay potential hospital bills. On average, uninsured families can only afford to pay in full for approximately 12% of hospital stays they may experience, and even higher-income uninsured families are unable to pay for most potential hospitalizations, the report found.

Hospital stays for which the uninsured cannot pay in full account for 95% of the total amount hospitals bill the uninsured. The idea that people without heath insurance can get care with little or no problem is an enduring myth, said HHS Secretary Kathleen Sebelius.

According to the new report, approximately 50 million Americans are uninsured. Most uninsured people have virtually no savings, and the median per-family financial assets for uninsured families are just $20. Even among higher-income families, assets are low: half of families with income at 400% of the Federal Poverty Level, or $89,400 a year for a family of four in 2011, have financial assets below $4,100.

The report is available from the HHS website.

Battle Over Payment Advisory Board Continues

The Affordable Care Act established a 15-member Independent Payment Advisory Board (IPAB) charged with making cuts to Medicare in years that spending exceeds a target growth rate. Under the Act, IPAB recommendations will automatically become law unless blocked by both Congress and the President. The Congressional Budget Office (CBO) recently estimated that repealing IPAB would inevitably mean stronger spending growth, adding up to $2.4 billion between 2018 and 2021.

The CBO report is bad news for House Republicans who have targeted IPAB in their effort to defund or repeal healthcare reform provisions. This year Representative Phil Roe (R-Tenn.) introduced legislation, H.R.452, the “Medicare Decisions Accountability Act,” to abolish IPAB. The projected costs of doing away with IPAB means that the bill would also need to offset these costs somewhere else in the budget.

Beginning April 2013, the Affordable Care Act requires the chief actuary of the Centers for Medicare and Medicaid Services to project whether Medicare per capita spending exceeds the average Consumer Price Index, based on a 5-year period. If so, beginning January 15, 2014, IPAB must submit recommendations to cut Medicare spending. The board must also submit recommendations every other year to slow the growth in national private health expenditures while preserving quality of care. The threshold target will then change beginning in 2018, when it becomes Medicare per capita spending that exceeds gross domestic product per capita plus 1%. The law specifically prohibits IPAB from submitting proposals that would ration care, increase revenues, or change benefits, eligibility, or Medicare beneficiary cost sharing.

More information is available from the CBO website.

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