2018 Alabama Health Care Year in Review

Dec 14, 2018 at 11:08 am by steve

I have written this top ten list for years and each time I "try" to write an introduction that is funny or which contains a quote that is uplifting and appropriate for the current year. This time I have nothing. All I can think about is how divisive this country has become with protests and counter-protests, mass shootings and Twitter rants...but then something occurs to me.

Physician practices may compete for patients and hospitals may try to outmaneuver competitors for market share, but at the end of the day it is all about the patients. That is what unites Alabama healthcare providers. I was reminded of this recently when working with a client facing very significant financial and operational issues. It would be easy (and maybe prudent) for the client to stop taking Medicaid patients, cut back on staff and essentially turn people away, but that was not the decision because patient care came first. I am reminded of this when I read about the citizens of Sumter and Chilton Counties who passed a sales tax to keep their rural hospitals open. I am reminded of this through the various efforts of UAB to "partner" with rural and small community hospitals in order to help them recruit physicians and to provide specialty, back-up services. I am reminded of this through the efforts of nursing home providers throughout the state who have banded together to provide expanded and cost-effective healthcare options for Medicaid long-term care recipients. So I guess I don't need to say anything uplifting to describe this past year. The Alabama healthcare providers have already done that for me. Thank you! Now, onto the list.

10. HIPAA / Cybersecurity -- Yes, everyone is tired of hearing about HIPAA, but it remains an important topic with increased enforcement actions in 2018. With essentially all protected health information stored electronically, and medical records having a high value on the black market, the healthcare industry is ripe for cyberattacks. This year, MD Anderson Cancer Center was required to pay $4.3 million in civil penalties for HIPAA violations related to the organization's encryption policies. The violations include three data breaches in 2012 and 2013, which exposed health information of more than 33,500 people. In October, Anthem, Inc. agreed to pay $16 million in penalties after a series of cyberattacks led to the largest U.S. health data breach in history and exposed the health information of almost 79 million people. Ransomware attacks are also on the rise. When electronic protected health information is encrypted as the result of a ransomware attack, a HIPAA breach has occurred. Unless the covered entity or business associate can demonstrate that there is a "...low probability that the PHI has been compromised," a breach report is required.

9. Alabama Data Breach Notification Act -- On March 28, 2018, Alabama adopted a data privacy law, the Alabama Data Breach Notification Act of 2018. The Act applies to any "person, sole proprietorship, partnership, government entity, corporation, nonprofit, trust, estate, cooperative association, or other business entity" that acquires, has possession of, or uses sensitive personally identifying information. The stated objective of the Act is protecting the data of Alabama residents, and it defines a breach as the "unauthorized acquisition of data in electronic form containing sensitive personally identifying information." Sensitive personally identifying information is defined to include an Alabama resident's first name or initial and last name in combination with one or more pieces of information, including as examples, social security numbers, driver's license numbers, banking account numbers, health insurance numbers, email address or physical addresses.

8. UAB Medical West Replacement Hospital -- Officials with UAB announced that Medical West Hospital will relocate from Bessemer to McCalla to serve the residents of west Jefferson County. The replacement hospital will be built on land already purchased by UAB at Exit 1 off of Interstate 459 in McCalla. The City of Hoover was in discussions with UAB to relocate the hospital to Hoover and the Hoover Mayor proposed a $20 million incentive package, but the idea lacked support from the Hoover City Council.

7.Telemedicine -- The proposed 2019 Medicare Physician Fee Schedule published in July 2018 (the final Fee Schedule will be published in November after this article is written) contains several amendments designed to promote telehealth programs through improved reimbursement. Currently, Medicare telehealth reimbursement codes are limited in terms of qualifying providers, site and location. In the Fee Schedule, CMS proposes to cover asynchronous telemedicine (e.g., a recorded video and/or image captured by a patient is later evaluated by a clinician), which is a significant step in the promotion of telemedicine. If adopted, these codes will not require the use of interactive AV technology nor require a patient be located in a rural area or a specific qualifying originating site.

6. Increased Claims of Sexual Harassment -- It should be no surprise that the healthcare industry is not immune to the #MeToo women's movement. While recent data is limited, according to the news website FiveThirtyEight, during the 2016 fiscal year the federal Equal Employment Opportunity Commission ("EEOC") received more than 27,000 complaints of sex-based discrimination. The industries involved were not recorded in about 60% of the cases, but of the industries recorded, health care topped the list with 14% of complaints. Anecdotally, in 2018 my firm has seen a marked increase in EEOC complaints filed by women across all segments of the healthcare industry.

5. Democrats Take Control of Congress -- With Democrats in control of the House, any further attempts to repeal or replace the Affordable Care Act are over (at least for the next two years). Drug pricing legislation could be a source of bipartisan agreement between Democrats and Republicans, but the pharmaceutical lobby is strong and President Trump's position on the issue is unclear.

4. Rural Hospital Closures -- According to an August 2018 report from the National Rural Health Association, 87 rural hospitals have closed nationwide since 2010. In that same time period, at least five rural hospitals have closed in Alabama. The alarming facts are reflected in a two year old Alabama Hospital Association survey of hospital CEOs. Among the findings, 88 percent of rural hospitals did not receive enough patient care revenue to cover the cost of operations. The problem is multi-faceted, but two concerns dominate. First, Alabama's rural hospitals receive among the lowest Medicaid reimbursement in the country. Second, the Governor has refused to expand Medicaid, which if adopted would provide a significant source of additional revenue for Alabama's failing rural hospitals. (See item 2 below).

3. Alabama Integrated Care Network -- On September 12, 2018, CMS approved Alabama's Integrated Care Network ("ICN") program. The ICN offers additional care options for Medicaid long-term care recipients who live in a nursing facility or receive services in their homes through Medicaid's Elderly and Disabled waiver or the Alabama Community Transition waiver. The ICN contract was awarded to Alabama Select Network, LLC, which will receive a per member per month payment to administer the ICN. Alabama Select will provide enhanced case management, education and outreach services. This is a positive development for the state and is expected to provide significant benefits, both in the provision of healthcare and cost savings, for Alabama's Medicaid population and program.

2. Alabama's Continuing Failure to Expand Medicaid -- In the midterm elections, voters in three red states that overwhelmingly supported Donald Trump approved ballot initiatives to expand Medicaid under the Affordable Care Act. This brings the total to 36 states plus the District of Columbia that have expanded Medicaid coverage. Meanwhile, voters in Kansas, Wisconsin and Maine elected governors who favor Medicaid expansion. Estimates vary, but it is projected that 235,000 to 300,000 people in Alabama would gain access to Medicaid if Alabama were to accept federal funding to expand the program. In 2018, the federal government pays 94 percent of the cost of Medicaid expansion, and that will number drop to 90 percent by 2020. A 2012 UAB study estimated that Medicaid expansion could generate $2.2 to $4.6 billion of new economic activity in the state annually and between $12 and $26 million in new tax revenue each year.

1. Opioid Crisis -- According to the CDC, Alabama has the highest rate of opioid prescribing in the country, with Alabama physicians writing 5.8 million prescriptions for opioids in 2015. (To put this in context, Alabama's total 2018 population is estimated to be 4.89 million people.) In 2016, 741 overdose deaths were reported, representing a rate of 15.3 persons per 100,000. Recently, BlueCross BlueShield of Alabama, the largest insurer in the state, announced it will no longer cover the standard formulation of OxyContin in order to limit prescriptions for the opioid. Several states, including Alabama, have sued drug manufacturers seeking to hold them responsible for overselling painkillers. Recently, Florida sued Walgreens and CVS for failing to take precautions to stop illegal sales. Reports suggest that the fight against opioid abuse may be working, but there is a long way to go.

May all of you have a happy and healthy 2019!

Howard Bogard is a partner and officer with Burr Forman where he specialized in healthcare law.

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