HIDA’s HealthReform Update

Edition: September 2012 - Vol 20 Number 09
Article#: 4057
Author: Linda Rouse O’Neill, VP, Government Affairs, HIDA

The following update by the Health Industry Distributors Association (HIDA) is designed to keep healthcare distributors and other key stakeholders current on the latest government-affairs related topics.

Last month, I walked you through health reform deadlines that are keeping many providers up at night. This month, I want to decipher a few health reform acronyms you’ll hear a lot about in the coming months.


Simply stated, an ACO (accountable care organization) is a group of providers that work together to improve quality and reduce how much it costs to care for patients. They may be paid differently by Medicare, Medicaid and private insurers. The concept is a key piece of the health reform law and has spurred an ACO explosion.

ACO participants vary, and not all ACOs are the same. Types vary from doc-led physician group practice ACOs to hospital-dominant pioneer ACOs to private sector, insurer-operated ACOs that predate health reform.

They matter because they’re growing by leaps and bounds. Since December 2011, CMS has announced 169 Medicare ACOs, which are already serving 2.1 million beneficiaries, and that doesn’t take into account private sector ACOs or newer Medicaid ACOs being contemplated by several states.


Electronic health records (EHR) are broader than electronic medical records (EMR), encompassing not only a digitized version of clinical notes, but also elements of patient safety and quality improvement. If HHS had its way, the agency would eliminate the more narrowly defined EMR from the nation’s vocabulary.

EHRs enable coordinated care via HIPAA-approved information sharing between providers and are at the heart of current health information technology debates. Studies have demonstrated significantly better patient care with EHR, particularly for patients with chronic conditions since it provides primary care teams with a complete snapshot of the patient. EHRs also allow closer tracking of medication and devices to the patients on whom they are used.


A large integrated delivery network (IDN) may include dozens of hospitals, affiliated physician groups, home health, other types of providers, and occasionally an insurer (think Kaiser Permanente). Not every ACO includes an IDN, although some IDNs are participating in various ACO programs.


Unique device identification (UDI) is a national standard that ensures the medical devices can be definitively identified throughout the supply chain. UDI proponents believe it will reduce medical errors and facilitate more accurate reporting of adverse events – both key patient safety goals of health reform. The FDA released a proposed UDI rule detailing a phased-in approach beginning with high-risk medical devices such as pacemakers, heart valves and artificial hips. A final rule is expected spring 2013.


Value-based purchasing (VBP) associates hospital quality performance with Medicare payment, penalizing and rewarding hospitals accordingly. It’s the government’s way to be a proactive purchaser of healthcare and ensure consistent, high-quality care is provided. Most quality measures used by VBP are efforts hospitals have publicly reported for years including surgical site infections and ventilator associated pneumonia, but measures tied to 30-day readmissions as well as patient experience ratings has providers worried. Hospitals are subject to VBP starting Oct. 1, 2012.