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Teaching Hospital Update - January 21-25, 2013


Email Alert

January 25, 2013

By Sarah Kitchell*

Studies: Reducing Hospital Readmissions a Challenging Task

The Wall Street Journal (1/22) reported that several studies published in the latest issue of the Journal of the American Medical Association (JAMA) illustrate that "poor coordination among different providers . . . is largely to blame for many readmissions." One study from Yale University showed that nearly 20% of the four million patients studied returned to the hospital within 30 days, with 40% of the return visits being to the emergency department. Reducing readmissions is a high priority for hospitals, the article stated, because of penalties imposed by Medicare on hospitals with "higher-than-predicted rates of readmissions" for certain conditions that could reduce hospitals' reimbursements by millions. (Note: registration is required to access this article.)

State Legislatures Seek to Limit Hospital Executive Compensation

FierceHealthcare (1/22) reported on two bills being considered by legislatures in California and Massachusetts. According to the article, the California bill, which proposes to stop local healthcare districts from "paying out retirement plan benefits to the chief exec while he or she is still employed," is in reaction to the payout of "one of the largest public pensions in California's history" to a former chief executive of a healthcare system. The article reported that the Massachusetts bill seeks to cap executive compensation at nonprofit hospitals at $500,000 unless the hospital can show that its "execs deserve higher payment."

Insurers Incentivize Physicians to Reduce Elective Preterm Deliveries

The Washington Post (1/21) reported that government and private insurers are looking to reduce the necessity of high-cost stays for newborns in the neonatal intensive care unit by discouraging and/or penalizing physicians for inducing labor or performing elective Cesarean sections on mothers less than 39 weeks pregnant. The article cited studies showing that "an estimated 10-15 percent of US babies are delivered early without medical cause." According to the article, Medicaid and private insurers in states such as South Carolina and Texas have "stopped reimbursing providers for performing early deliveries without medical cause." Additionally, the article noted that Medicare plans to "require hospitals to report rates of elective deliveries before 39 weeks," with the possibility of penalties starting in 2015 if rates at those hospitals remain elevated.

New Norovirus Strain Appears in United States, CDC Reports

The Boston Globe (1/24) reported that the Centers for Disease Control and Prevention (CDC) released a report on Thursday (1/24) indicating that a new strain of norovirus is accounting for 60% of such outbreaks in the United States. The article noted that "[i]t may not be unusually dangerous" but that it is highly contagious and has already caused widespread illness in Japan, western Europe, and Australia. The article indicated that "[e]very two or three years, a new strain evolves" and that, according to the CDC, noroviruses "cause an estimated 21 million illnesses and 800 deaths" each year.

Prior Authorization Costs to Physicians Quantified in New Study (1/21) reported on a study from the Journal of the American Board of Family Medicine that calculated the cost of insurer-mandated preauthorizations at an average of approximately $2,160 to $3,460 per year per physician. Study authors said this finding "is most likely an undercount" and that the study did not capture "preauthorizations for referrals to specialists or revenue lost by not being able to carry out other money-generating activities." The article cited an earlier study published in Health Affairs estimating that physicians spent nearly $83,000 per year communicating with insurance companies on matters including, but not limited to, preauthorizations. The article noted that the American Medical Association encourages switching from the "largely manual" process to an automated process.

*We would like to thank Sarah Kitchell, Esquire (McDermott Will & Emery LLP, Boston, MA), for providing this week's update.

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