Summer 2012 Recap

By Christian Chai As the fall season fast approaches, it is time to look back upon summer 2012 in health technology. What were the big trends? What were the big announcements? Here is a recap of the season’s most noteworthy stories. CMS Health Care Innovation Awards Announced This summer, the Centers for Medicare & Medicaid Services (CMS) awarded nearly $1 billion in funding through its Health Care Innovation Challenge initiative. These grants, funded under the recently upheld Affordable Care Act, aim to improve quality of healthcare among high risk/high opportunity patient populations while simultaneously lowering the cost of care. Furthermore, the Challenge seeks to promote innovative workforce development and deployment within the healthcare industry. The CMS Innovation Center has $10 billion over 10 years under this initiative. The 26 first-round awardees and 81 second-round awardees were announced on May 8, 2012 and June 25, 2012, respectively. Each of the 107 awardees was required to submit a project proposal that demonstrated an ability to develop and implement effective creative care models within the scope of Medicare, Medicaid and the Children's Health Insurance Program. HHS expects the program to save healthcare $1.9 billion over its three-year duration, a simple annualized ROI of 40.4% per year. As CMS prioritized proposals that could be implemented within 6 months of award, we should expect to see results from this initiative in the near future. For more information, read the article at: Big Data Gets Government Agency, Continues to Play Larger Role in Healthcare As the industry transitions from a fee-for-service payment structure to a valuebased model, big data will have a significant role in raising the standard of care. Big data, or the collection, organization, and analysis of large sets of relevant data, has the ability to revolutionize how we care for patients. By improving data capture and usability, this analytic tool can provide an ever-expanding pool of information—which, naturally, leads to higher quality care. On June 5, 2012, CMS announced a new data and information initiative to be administered by the newly created Office of Information Products and Data Analytics (OIPDA). Several new OIPDA information resources were also concurrently announced, including comprehensive data sets, an online peer-review journal, and a search tool for CMS information. These tools are designed to allow data to be leveraged by all healthcare stakeholders to provide higher quality, lower-cost care, all while maintaining patient privacy rights.

Big data has already gained traction in other sectors, generating over $30 billion in yearly revenues. Look for it to be a significant healthcare trend in the upcoming period. For more information, read the article at: %20Healthcare_Chai.pdf New ACOs Announced, New Models of Care Gain Traction On July 1, 2012, the U.S. Department of Health and Human Services (HHS) designated 88 new ACOs to be added to the Medicare Shared Savings Program. These additions bring the total number of participating organizations to 153. ACO participation, an initiative of the Affordable Care Act, is purely voluntary and allows providers who take responsibility for their quality of care to have a share in the resultant savings. Federal savings through the program could reach up to $940 million over four years. “Better coordinated care is good for patients and it saves money,” according to HHS Secretary Kathleen Sebelius. “We applaud every one of these doctors, hospitals, health centers and others for working together to ensure millions of people with Medicare get better, more patient-centered, coordinated care.” Beginning this year, CMS will be accepting new ACO applications on an annual basis. ACOs of varying size operate throughout the country. The application window closed on September 6 for organizations intending to participate in 2013. For more information, read the article at: Venture Capital Funding for Digital Health Skyrockets in First Half of 2012 According to a July report by financial services firm Burrill & Company, venture capital investment increased 317 percent in the first half of 2012 as compared to the first half of 2011. 46 transactions netted $499 million through June of this year as opposed to $156 million through 19 transactions by June 2011. Rock Health’s midyear digital health funding report tells a similar tale: venture capital firms have invested 73% more capital in digital health companies this year than in the corresponding 2011 period. “The increased funding in the digital health arena reflects a growing awareness of the transformative power these technologies are bringing to healthcare,” according to G. Steven Burrill, CEO of Burrill & Company. “It is also an area that is attracting both traditional technology and life sciences investors, who recognize the ability these technologies have to reduce cost, improve care, and personalize care” (Digital, 2012). Many startups have capitalized on funding opportunities to provide innovative healthcare solutions. For example, Castlight Health, an online healthcare pricing tool, raised over $180 million in funding since its 2008 inception.

Including Castlight Health, iHT2 recently highlighted 7 innovative companies to watch as the digital health trend takes off. For more information, read “7 Innovative Digital Health Companies to Watch” on ICD-10 Delayed One Year CMS has finalized a rule delaying the deadline for ICD-10 compliance by one year. The deadline, originally scheduled for Oct. 1, 2013, will now be pushed back until Oct. 1, 2014, according to an August 24 press release. The ICD-10 delay is part of a CMS final rule to be published in the Sept. 5 Federal Register. This extended time frame was prompted by concerns that many parties would not be able to implement the protocol by the original deadline. Originally proposed in April, this delay was widely expected within the industry. ICD-10 expands the currently adopted code set and will be expected to improve the quality of electronic information available. In addition to the delay, the final rule includes a standard for a national unique health plan identifier (HPID) to be adopted by all health plan organizations. Most applicable health plans and organizations will be required to obtain an HPID no later than Nov. 5, 2014, while small health plans will have until Nov. 7, 2015. HPIDs must be used in transactions beginning Nov. 7, 2016. Resource: New health care standards to save up to $6 billion. (2012, August 24). Retrieved from Counter=4444&intNumPerPage=10&checkDate=&checkKey=&srchType=1&n umDays=3500&srchOpt=0&srchData=&keywordType=All&chkNewsType=1, 2, 3, 4, 5&intPage=&showAll=&pYear=&year=&desc=&cboOrder=date Meaningful Use Stage 2 Final Rules Released On August 23rd, the Department of Health and Human Services released the final rules for Stage 2 of its electronic health records meaningful use incentive program. Cowritten by CMS and the Office of the National Coordinator for Health Information Technology (ONC), the new requirements will be published in the Federal Register on Sept. 4. Beginning in 2014, providers who have met Stage 1 requirements for two or three years must to attest to Stage 2. This is an extension of the original 2013 deadline—no provider will be required to meet stage 2 criteria until 2014, at earliest. The provision features several key changes enabling health IT for continuous quality improvement. Core objectives and CQM reporting were revised from their Stage 1 iterations, with increased emphasis on electronic HIE and patient engagement.

Additionally, ONC made several revisions to its Standards and Certification Criteria for Electronic Health Records. Effective in 2014, providers must adopt certified EHR technology in accordance with the newly released 2014 edition final rule. To date, over 120,000 eligible professionals and more than 3,300 hospitals have qualified for participation—approximately 23,000 more than the government had originally expected. CMS has disbursed over $6.6 billion in provider incentives through the meaningful use program.’ For more information, read “HHS Releases Final Rules for Meaningful Use Stage 2” at

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