Analysis of HCA Data Relevant to Aspects of the Affordable Care Act

Transcription

1 Analysis of HCA Data Relevant to Aspects of the Affordable Care Act January 2015

2 Background and Methodology HCA (also known as Hospital Corporation of America), the country s largest non-governmental healthcare provider, has access to a large amount of data relevant to the operation of the Affordable Care Act, including in particular the American Health Benefit Exchanges. After the Supreme Court granted certiorari in King v. Burwell, HCA conducted a rigorous analysis of this data in order to be able to provide helpful information on how the Exchanges and other aspects of the ACA are working. All methodologies and calculations were reviewed and verified by HCA s Internal Audit department. Information included in this document was compiled and reviewed by the following departments: HCA Finance HCA Finance consists of the financial leadership team of HCA including the office of the Executive Vice President & CFO, the Senior Vice President/Treasurer, and the Senior Vice President/Controller. These functions are responsible for enterprise financial reporting, accounting, tax, insurance, financial planning and treasury functions. HCA Reporting, Benchmarking & Analytics Reporting, Benchmarking & Analytics is a department within HCA made up of three primary Sections: Analytics & Pricing Services provides modeling and analytics for all commercial, Exchange and governmental patients for all HCA affiliates. Enterprise Decision Support Services is responsible for maintaining the cost accounting system for all acute care facilities, and is proficient with multiple costing methodologies, Supply Chain Systems and Processes, General Ledger Structures and Charge Masters. Financial & Employee Services supports HCA s operations and Parallon Payroll Services Centers with human resource and payroll data. HCA Corporate Reimbursement - The Reimbursement Department of Government Programs is a department within HCA made up of four primary Sections: Operations (responsible for filing cost reports and Financial Statement accuracy reviews); Support (responsible for areas of standardization, department initiatives, peer reviews, home office functions, and compliance); Appeals, Development, and Education (responsible for acquisitions and divestitures reviews, education, appeals, other special projects); and Financial Services (responsible for Medicare Disproportionate Share reporting process and regulatory monitoring, including financial impacts and various Medicare reporting initiatives). HCA Internal Audit - Internal Audit is a department of HCA that includes four primary Sections: Financial and Controls (responsible for audits of financial statements and related internal controls), Revenue Cycle (responsible for audits of revenue cycle operations and related financial data), Information Systems (responsible for audits of information systems and related controls) and Compliance (responsible for audits of compliance related areas). The Senior Vice President of Internal Audit reports directly to the Chairman of the HCA Audit and Compliance Committee and to HCA s Chief Executive Officer. 1

3 Parallon Business Solutions Parallon Business Solutions, a wholly owned subsidiary of HCA, is one of the healthcare industry s leading providers of customized services in the area of revenue cycle, purchasing, supply chain, technology, workforce management, and consulting. Sarah Cannon Research Institute - Sarah Cannon Research Institute (SCRI), a wholly owned subsidiary of HCA, is a research organization focusing on advancing therapies for patients. It is one of the largest clinical research programs in the US, conducting community-based clinical trials in oncology and cardiology. It does this through affiliations with a network of more than 1,000 physicians in the United States and United Kingdom. HCA Physician Services Group - Reporting & Analytics Department The HCA Physician Services Group (PSG) provides physician related solutions for HCA, with particular emphasis on the management of employed and contracted practices. The Reporting & Analytics Department provides enterprise-wide reporting services related to financial, operational and clinical outcomes for HCA s providers. Specific subject areas include financial performance, provider benchmarking, managed care reporting, Meaningful Use, PQRS/Quality and Care Management. Hospital data were sourced from HCA s Enterprise Data Warehouse (EDW). The tables utilized in the EDW are live tables that are updated nightly from HCA s Patient Accounting System. For purposes of this Report, a snapshot of the data for the period below was taken January 14, This snapshot of the data is not subject to updates. The data used in the calculations presented in this document are based upon claims where inpatient or outpatient services were provided at an HCA facility during the period January 1, 2014 through December 31, In light of the focus in King v. Burwell on the Exchanges run by the federal government, the data analysis was based on those states that participate in the federally-facilitated Exchanges and which have at least one HCA facility. The states included are: Alaska, Florida, Georgia, Indiana, Kansas, Louisiana, Mississippi, Missouri, New Hampshire, Oklahoma, South Carolina, Tennessee, Texas, Utah, and Virginia. More than 88% of HCA s facilities are located in federally-facilitated Exchange states and approximately 89% of HCA s cases occurred in federally-facilitated Exchange states. Patient populations have been further segmented for comparison purposes. Those patients who received services and demonstrated an affiliation with the federally-facilitated Exchanges are referenced as Exchange patients. Those patients who received services but could not demonstrate any type of insurance coverage are referenced as Self Pay patients. The Self Pay populations who applied for and met HCA s criteria for charity care are referenced as Charity patients in this document. When the analysis includes both the Self Pay and Charity populations, they are collectively referenced as Uninsured patients. Those patients who received services and demonstrated an affiliation with a commercial managed care insurer through standard billing verification processes are referenced as Managed Care patients. 2

4 Numerous individuals contributed to the compilation, review, and validation of this report. These individuals and their positions within HCA or affiliates are: Finance: William B. Rutherford Chief Financial Officer & Executive Vice President Donald W. Stinnett Senior Vice President & Controller Clinical Services Jonathan B. Perlin, MD, PhD, MSHA, FACP, FACMI President of Clinical Services Group and Chief Medical Officer Analytics: Chigger J. Bynum Vice President, Reporting, Benchmarking & Analytics Deborah S. Steed Assistant Vice President, Analytics and Pricing Services Gregory D. Warren Director, Analytics and Pricing Services Internal Audit: Joe N. Steakley - Senior Vice President, Internal Audit Phil G. Billington - Vice President, Internal Audit Brady J. Plummer Assistant Vice President, Internal Audit Ricky L. Cook - Director, Internal Audit Lana S. Roberts - Director, Internal Audit Jason R. Warfield - Manager, Internal Audit Andee R. Woodward - Manager, Internal Audit Physician Services Group Michael S. Cuffe, MD, MBA President & Chief Executive Officer, Physician Services Group Jerry Rooker Chief Financial Officer, Physician Services Group Brad Jennings Assistant Vice President of Reporting & Analytics, Physician Services Group Sarah Cannon Research Institute: Dee Anna Smith Chief Executive Officer, Sarah Cannon Research Institute Howard A. Burris III, MD President, Clinical Operations - Sarah Cannon Research Institute Andy Corts Chief Information Officer, Sarah Cannon Research Institute Jay Lockhart Director of Integration and Data Architecture, Sarah Cannon Research Institute Janie Anderson Manager, Financial Planning and Analytics, Sarah Cannon Research Institute Government Reimbursement: Carl T. Bateman Assistant Vice President, Reimbursement Parallon Business Solutions: Lisa S. Berryhill Vice President of Net Revenue Analytics and Dispute Resolution, Parallon Nathan P. Wise Financial Analyst, Parallon 3

5 Chapter 1: Who are the Patients on the Federally-Facilitated Exchanges? Methodology The data used in the calculations below are based upon claims where inpatient or outpatient services were provided at an HCA facility during the period January 1, 2014 through December 31, The data analysis was based on those states that participate in the federally-facilitated Exchanges and have at least one HCA facility. The states included are: Alaska, Florida, Georgia, Indiana, Kansas, Louisiana, Mississippi, Missouri, New Hampshire, Oklahoma, South Carolina, Tennessee, Texas, Utah, and Virginia. Patient populations have been further segmented for comparison purposes. Those patients who received services and demonstrated an affiliation with the federally-facilitated Exchanges are referenced as Exchange patients. Those patients who received services but could not demonstrate any type of insurance coverage are referenced as Self Pay patients. The Self Pay populations who applied for and met HCA s criteria for charity care are referenced as Charity patients in this document. When the analysis includes both the Self Pay and Charity populations, they are collectively referenced as Uninsured patients. Results Exchange patients who previously received care from HCA prior to January 1, 2014 For the Exchange population meeting the aforementioned criteria, a patient identifier was derived so that unique patients within the population could be identified. Those Exchange patients were then traced through HCA s data from January 1, 2012 through December 31, As a result, Exchange patients who have presented to an HCA facility within the previous two years represent one cohort while those patients who could not be matched to the previous population represent a second cohort. 4

6 Exchange patients who were previously insured vs previously uninsured Of the Exchange cohort that had previously been seen at an HCA facility within the last two years, further longitudinal studies were performed on that population to determine if those patients were previously covered by some form of insurance or met the criteria for Uninsured. Exchange patients by Gender For the Exchange population meeting the aforementioned criteria, a demographic analysis of the gender subset was performed to determine gender distribution within that population. Female Patients: Exchange vs Uninsured For the Exchange and Uninsured populations meeting the aforementioned criteria, the female cohort was segmented from each of their respective populations. A comparison of the percentage of female Exchange patients to total Exchange patients at HCA facilities vs the percentage of female Uninsured patients to total Uninsured patients at HCA facilities was performed. 5

7 Chapter 2: What Do Patients Pay For Care? Methodology The data used in the calculations below are based upon claims where inpatient or outpatient services were provided at an HCA facility during the period January 1, 2014 through December 31, The data analysis was based on those states that participate in the federally-facilitated Exchanges and have at least one HCA facility. The states included are: Alaska, Florida, Georgia, Indiana, Kansas, Louisiana, Mississippi, Missouri, New Hampshire, Oklahoma, South Carolina, Tennessee, Texas, Utah, and Virginia. Patient populations have been further segmented for comparison purposes. Those patients who received services and demonstrated an affiliation with the federally-facilitated Exchanges are referenced as Exchange patients. Those patients who received services but could not demonstrate any type of insurance coverage are referenced as Self Pay patients. The Self Pay populations who applied for and met HCA s criteria for charity care are referenced as Charity patients in this document. When the analysis includes both the Self Pay and Charity populations, they are collectively referenced as Uninsured patients. Results Zero Pay Cases For the Charity and Self Pay population meeting the aforementioned criteria, an analysis of payment history was performed to determine the percentage of those patients who did not make a payment toward their responsibility as it pertains to the total Charity and Uninsured population. 6

8 Exchange Patients Personal Responsibility For the Exchange population an analysis of payment history was performed to determine the average payment received. The average payment received is based on those patients who had a cost-sharing obligation greater than zero and who have made a payment. 7

9 Chapter 3: How Do Patients Access Care? Methodology The data used in the calculations below are based upon claims where inpatient or outpatient services were provided at an HCA facility during the period January 1, 2014 through December 31, The data analysis was based on those states that participate in the federally-facilitated Exchanges and have at least one HCA facility. The states included are: Alaska, Florida, Georgia, Indiana, Kansas, Louisiana, Mississippi, Missouri, New Hampshire, Oklahoma, South Carolina, Tennessee, Texas, Utah, and Virginia. Patient populations have been further segmented for comparison purposes. Those patients who received services and demonstrated an affiliation with the federally-facilitated Exchanges are referenced as Exchange patients. Those patients who received services but could not demonstrate any type of insurance coverage are referenced as Self Pay patients. The Self Pay populations who applied for and met HCA s criteria for charity care are referenced as Charity patients in this document. When the analysis includes both the Self Pay and Charity populations, they are collectively referenced as Uninsured patients. Those patients who received services and demonstrated an affiliation with a commercial managed care insurer through standard billing verification processes are referenced as Managed Care patients. Emergency cases are identified by the presence of a UB04 Revenue Code on the patient billing record. Non-emergency cases are those that do not contain one of these Revenue Codes on the patient billing record. Results Ratio of Emergency and Non-Emergency to Inpatient For the Exchange, Managed Care and Uninsured populations meeting the aforementioned criteria, a ratio analysis was performed to evaluate the relationship of each cohort as it pertains to those patients who presented at an HCA facility through the Emergency Room versus inpatient admissions and nonemergency outpatient visits versus inpatient admissions. 8

10 Ratio by Gender Female Male For the Exchange, Managed Care and Uninsured populations meeting the aforementioned criteria, the populations were further segmented by gender. A ratio analysis was performed to evaluate the relationship of each cohort as it pertains to those patients who presented at an HCA facility through the Emergency Room and non-emergency outpatient visits versus inpatient admissions. 9

11 Chapter 4: What Types Of Care Are Federally-Facilitated Exchange Patients Accessing? Methodology The data used in the calculations below are based upon billed claims where inpatient or outpatient services were provided at an HCA facility during the period January 1, 2014 through December 31, The data analysis was based on those states that participate in the federally-facilitated Exchanges and which have at least one HCA facility. The states included are: Alaska, Florida, Georgia, Indiana, Kansas, Louisiana, Mississippi, Missouri, New Hampshire, Oklahoma, South Carolina, Tennessee, Texas, Utah, and Virginia. Inpatient refers to accounts where a physician s admission order for inpatient care is present. Outpatient refers to treatment that does not require an inpatient stay in an acute care facility such as emergency room visits, same day surgical procedures, observation visits, and therapeutic and diagnostic testing services. Oncology Care for Exchange Patients by Gender For the Exchange population meeting the aforementioned criteria, the population was analyzed for patients with cancer as defined by a set of ICD9 Oncology diagnosis codes. That subset was further segmented into male and female cohorts as well as Inpatient and Outpatient cohorts. Percent of totals was derived at both patient type and gender levels. 10

12 Ultrasounds: Exchange vs Uninsured The Exchange and Uninsured population was analyzed for patients with an ultrasound as defined by a UB04 Revenue Code 402. That subset was further segmented into ICD9 Diagnosis codes (79389 Abn Finding-Breast NEC and Lump or Mass in Breast) as well as Exchange and Uninsured cohorts. Percent of totals was derived by the ICD9 Diagnosis code and the ratio is based on Exchange to Uninsured. 11

13 Chapter 5: The Impact of the ACA on HCA s Financial Results HCA has calculated that the cumulative cuts to HCA's revenue tied to ACA, from its passage in 2010 through December 31, 2014, with respect to the federally-facilitated exchange states, are approximately $600 million. These reductions have been calculated by the internal reimbursement and finance teams at HCA, and reviewed by HCA's Internal Audit Department. Those internal calculations are not materially different from those which could be derived from HCA's previous public disclosures: the percentage reductions per year in the ACA summarized in the 10-K s filed by HCA for 2013, 2012, 2011 and 2010; HCA's revenue tied to Medicare/Managed Medicare set forth in the same 10-K s; and HCA's 2014 third quarter 10-Q, adjusted to reflect an estimate of the amount of HCA's Medicare/Managed Medicare revenue in states with non-federally facilitated Exchanges. HCA has also calculated incremental ACA revenue to HCA from the federally-facilitated Exchanges in 2014 of approximately $250 million. HCA stated in its third quarter earnings call that it was seeing incremental revenue of about 4% of 2013 Adjusted EBITDA from the conversion of uninsured patients to Exchange patients. That 4% of Adjusted EBITDA was then adjusted to reflect the relatively small amount of HCA's non-federally facilitated Exchange business. 12