J. Alexander McMahon, who led the American Hospital Association through a tumultuous period in which federal payment systems came under attack in the 1970s, died Oct. 30 at his home in North Carolina. He was 87. Hell always be well-known, certainly in the AHA and the hospital world. Hes quite a legend in our field, said AHA President and Chief Executive Officer Richard Umbdenstock, who served as special assistant to McMahon in the late 1970s. He really put AHA on the map. McMahon was the first person to hold the job of president of the AHA, serving in the role from 1972 to 1986, a period in which federal officials wanted to clamp down on spending in the rapidly growing Medicare and Medicaid programs. Umbdenstock said the AHA came into its own as an advocacy group in the 1970s in response to efforts under presidents Richard Nixon and Jimmy Carter to cut costs in the entitlement programs. Though McMahon cut an influential figure at the AHA in Chicago, friends say his heart was always in Durham, N.C., where he graduated and later taught at Duke University. McMahon was a professor and then chairman of the Department of Hospital Administration at Duke University Medical Center, and received the universitys University Medal, in 2002. McMahon was inducted into Modern Healthcares Health Care Hall of Fame in 1995.
Physicians who successfully comply with various incentive programs could receive an overall payment boost of up to 5.1% in 2009, under a final rule issued by the CMS. The rule carries out various provisions included in the Medicare Improvements for Patients and Providers Act of 2008, or MIPPA, which halted a 10.6% pay cut scheduled for July 1, providing doctors with a 0.5% payment bump for the remainder of 2008. A 1.1% increase begins on Jan. 1, 2009. The final rule establishes a new incentive program for eligible providers that adopt and use qualified electronic e-prescribing systems to transmit prescriptions to pharmacies. Physicians who successfully report under the new e-prescribing program and the Physician Quality Reporting Initiative, another incentive program, could see increases of up to 5.1% next year. Despite these boosts, other policy changes enacted by MIPPA, in addition to a four-year transition to a new formula for calculating practice-expense relative-value units, are expected to reduce payment for cardiologists and some other specialists.
The CMS set the annual inflation update for hospital outpatient departments at 3.6% starting Jan. 1, but it will keep ambulatory surgical centers at this years rates. The federal agency also put outpatient departments on notice, saying that it will eventually adjust payments to reflect the quality of care thats delivered in the more than 4,000 hospital outpatient departments across the country. The CMS projects it will pay hospitals some $30.1 billion in 2009 for outpatient services, up from $28.5 billion in projected payments for this year. The agency also expects to make payments of close to $3.9 billion in 2009 to the more than 5,100 ASCs that participate in Medicare, which compares with $3.5 billion projected for this year.
Investors edged back into the market for long-term, tax-exempt healthcare bonds. Providence Health & Services, Seattle, successfully entered the market with $296 million in fixed-rate, long-term bonds and was followed by Trinity Health, Novi, Mich., which saw an opening and issued $492 million last week, said James Bosscher, the Catholic systems vice president of treasury. The Catholic system expects to issue another $800 million in short-term markets in mid-November, he said. John Landers, a managing director for Morgan Stanley, said AA credits have found buyers, but others can expect an additional wait. Some are expected to test the waters. Moodys Investors Service on Oct. 31 issued an A1 rating on $328.3 million in fixed-rate bonds from Christus Health, Irving, Texas, and a Aa3 rating on $180 million in fixed-rate bonds for Advocate Health Care, Oak Brook, Ill.
Lance Poulsen, former president of the defunct National Century Financial Enterprises, was convicted on a dozen counts in a $1.9 billion fraud trial. A federal jury in Columbus, Ohio, deliberated on the charges of conspiracy, fraud and money laundering for four hours before finding Poulsen guilty on all counts. The trial began Oct. 1. Sentencing has not been set for Poulsen, 65, also former chairman and director of the failed Dublin, Ohio-based NCFE. The company, which collapsed in 2002, bought patients unpaid bills from providers and sold bonds or notes to investors to finance the deals. Poulsens attorneys said they will appeal. Five former NCFE executives were found guilty in March and four were sentenced to jail time and ordered to pay back more than $2.4 billion by U.S. District Judge Algenon Marbley in August.
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