Anthem has reached a $115 million deal to settle a class-action lawsuit over a 2015 data breach in which hackers stole personal information from 78.8 million employees and current and former members.

The settlement is the largest data-breach settlement ever. As part of the deal, Anthem will offer two years of credit protection to those affected—in addition to the two years of monitoring they already received—and will set aside funding for cybersecurity improvements, including modifying its current cybersecurity systems. It will also set aside $15 million to pay plaintiffs for out-of-pocket costs due to the breach.

The deal comes more than two years after Anthem announced hackers had gained access to its IT system. They stole the names, birthdates, Social Security numbers, addresses, and other information of tens of millions of people.

“As we have seen in cyberattacks against governments and private sector companies including Anthem over the past few years, many cyberthreat actors are increasingly sophisticated and determined adversaries,” the company wrote in a statement. “Anthem is determined to do its part to prevent future attacks.”

The settlement must be approved by a U.S. District Court in California.


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During the first half of this year, digital health startups raised more money than ever, with 188 digital health deals and $3.5 billion invested, according to a new report.

If financing continues at this clip, 2017 will see $2.7 billion more in investments than last year, when there was $4.3 billion invested.

The second quarter of 2017 was a dramatic change from the first, when deals were on par with those of the prior year. But in the last few months, a couple of huge deals brought the funding up to an unprecedented level at the midpoint of the year, when funding in 2016 was around $2.5 billion, according to a report from Rock Health, which tracks healthcare venture funding.

Outcome Health, which delivers health information to practices, raised a record $500 million in its first round of funding, with investors that included Goldman Sachs Investment Partners and CapitalG. Rock Health reported that Peloton Interactive, which makes spin bikes and is not a traditional healthcare organization, had the second-largest round of funding, with a $325 million series E round.

However, this year lags behind 2016 in one major way: There have so far been no digital health IPOs. Rock Health expects that to change soon, with well-funded companies poised to make exits.

Overall, the digital health category with the most funding in the first half of 2017 was consumer health information, with eight deals totaling $757 million. That reflects the push to get consumers involved in their own care, given the shift to value-based models and the resulting demand for innovative, cost-cutting healthcare delivery solutions.

“As provider reimbursement is increasingly based on outcomes, providers are more likely to invest in solutions that promote healthy patient behaviors in and outside the hospital,” said Megan Zweig, Rock Health’s director of research and one of the report’s authors.

Demand for patient-centric solutions has persisted despite the uncertainty caused by the debate over healthcare legislation in Washington. With the prospect of consumers paying more of their own healthcare costs because of high deductible plans or loss of coverage, providers must find ways to make healthcare more affordable, according to Rock Health.

“Regardless of the outcome of the healthcare policy kerfluffle, we look forward to seeing how startups will continue to meet the urgent needs of patients and transform healthcare for the better,” wrote Rock Health’s Halle Tecco and Zweig in a blog post.

Some of those startups, such Healthify—which announced $6.5 million in series A funding today—are addressing patients’ needs by looking to issues not typically included in healthcare. Healthify’s software helps connect patients with community organizations that address social determinants of health, including healthy food and affordable housing. The company will use the funding to broaden its customer base and expand its network of social-service partners.

“Our latest round of funding is another indicator of the leading role digital health companies can play in system transformation,” said Eric Conner, co-founder and chief revenue officer of Healthify. “Good digital health companies take the risk out of the decisionmaking process.”

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Cleveland Clinic names CIO

On July 21st, 2017, posted in: Industry News by

Cleveland Clinic has named Edward Marx as its new chief information officer.

Marx, a former University Hospitals CIO who most recently served as executive vice president at the Advisory Board Co., will start in his new role Sept. 1. He takes over the role vacated by Dr. C. Martin Harris, now the chief business officer and associate vice president of the health enterprise at Dell Medical School at the University of Texas at Austin. Doug Smith had been serving as the clinic’s interim chief information officer.

“Ed has spent his career fostering a culture of innovation and leading teams at the forefront of health care information technology,” Cleveland Clinic President and CEO Dr. Toby Cosgrove said in a news release. “As CIO he will advance the Cleveland Clinic’s ‘Patients First’ culture by providing information-enabled, data-driven technology focused on facilitating world-class patient care.”

While at the Advisory Board Co., Marx provided IT leadership and strategy for NYC Health + Hospitals, the largest public health system in the United States. Before that he served for eight years as chief information officer at Texas Health Resources. Before that, he served for five years at UH’s CIO.

“Successful healthcare IT has to ask, ‘How do we innovate to save lives?’ ” Marx said in the release. “Technology has such potential to save many, many more lives, if we can innovate and impact patient safety and the quality of care we deliver.”

Marx appointment, meanwhile, comes at a time of transition for the clinic’s IT department. Late last year, the clinic and IBM announced they were entering a five-year agreement to expand the clinic’s health information technology capabilities. At the time, the parties said IBM would bring design and security expertise, as well as support for a portion of the clinic’s technology infrastructure and operations.

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It’s been a year since the big lift of converting the entire claim stream for the healthcare industry to the larger and more granular ICD-10 family of diagnostic and procedural codes.

The Oct. 1, 2015, launch went smoothly compared with the warnings of technological meltdown and cash-flow Armageddon that led to three delays totaling four years.

Claims flows, measured by claims denial rates, returned to normal after a few months, according to the CMS and confirmed by industry experts.

“This is the Y2K of coding,” said John Cuddeback, chief medical informatics officer of the American Medical Group Association. “I think people did a pretty good job of preparing.”

But this month, physicians face a new ICD-10 challenge. Last year, the CMS granted physicians a one-year grace period, promising not to deny Medicare Part B claims for lack of specificity of ICD-10 coding. Many commercial payers similarly gave physicians “flexibility,” but that grace period ended Oct. 1, 2016.

The same day, the CMS released an annual update to the codes that contained what Sue Bowman at the American Health Information Management Association called “some hiccups in the hospital DRG system,” But, she added, “I think we’re past most of that.”

Experts say it’s too early to tell whether the switch to more stringent coding requirements will snag docs’ claims. “We’re keeping are ears open to see if that has had any impact on claims,” said Robert Tennant, director of health information policy for the Medical Group Management Association, a trade association for managers of physician office-based practices.

But the promise of ICD-10 involved more than a revenue-cycle upgrade. The new codes were touted as essential paving stones on the road to value-based purchasing, leading to improvements in healthcare data analytics, population health management, care quality and lower costs. Those benefits have yet to materialize.

“I don’t expect to see anything along those lines until another year or two,” said Rhonda Buckholtz, a 25-year health IT veteran and vice president of strategic development at American Association of Professional Coders, representing the workers who ensure healthcare claims are affixed with the appropriate ICD-10 code.

USMD Health System, Irving, Texas, has used ICD-9 coded data to identify high-risk patients and is moving now to use predictive analytics powered by both ICD-9 and ICD-10 codes to identify patients on the borderline between wellness and sickness so caregivers can intervene before more expensive ailments develop.

But Dr. Charles Van Duyne, the multispecialty group’s CMIO, said he’s still “cautiously skeptical” that ICD-10 will ever pay off in clinical quality improvement commensurate with the money and effort put into the conversion. “Yes, ICD-10 gives you more granularity, providing you’re doing the coding correctly. But having more information isn’t necessarily better. What you’re really looking for is insight into the data and actionable information out of that data.”

USMD Health System participates in multiple value-based payment models, including three years at full risk under Medicare Advantage.

Such arrangements require significant investments in technology and training, but often the data required is not in ICD-10 diagnosis and procedural codes. For example, blood glucose readings for diabetic patients are far more important over time than the initial diagnosis code for diabetes.

Some experts say that a couple more years of building up databases of medical records coded in ICD-10 will be needed before a fair assessment of the effects of the codes can be made.

“It’s not just going to be ICD-10,” said Mark Morsch, vice president of technology for Optum360, the revenue cycle and services management arm UnitedHealth Group. “It’s going to be a combination of things like computer-assisted coding, and tools to link the coding data to underlying clinical data and process that will provide the return on investment on this. It will be hard to point to ICD-10 as driving the improvement, he said, “but that information is going to be incredibly helpful as you look to leverage analytics and look at populations and decide how chronic disease needs to be managed.”

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The Office of the National Coordinator for Health IT has finalized a rule (PDF) that will give it more oversight over certifying electronic health records and other technologies that store, share and analyze health information for consumers. It also gives it the authority to ask developers to pull from the market products that aren’t compliant.

The ONC first proposed increasing its role in the certification, review, and testing of health IT products in a draft rule released this past March. The agency received 48 comments by its May 2 deadline.

The ONC would now have the power to decertify health IT products that don’t comply with regulations or are found to pose a risk to public health or safety, for example, if they caused medical errors.

If the ONC decertified a product, its developer would be required to notify affected customers and providers who purchased the products. ONC would also issue a cease and desist notice to prevent the future sale or marketing of the product.

In the final rule, the agency backed off a proposal to review cases in which non-conformity could compromise the security or protection of patients’ health information or that could lead to inaccurate or incomplete documentation and result in bad or duplicative care.

“Our decision not to establish regulatory processes for such oversight at this time is based in part on the recognition that other agencies have the ability to investigate and respond to these types of issues and our desire to make the most efficient use of limited federal resources,” the rule said.

Response to the rulemaking was mixed. The American Medical Association supported the ONC’s idea to use corrective actions to resolve patient safety and security issues involving an IT product. However, the trade group was concerned about the suspension or termination of an IT product’s certification.

That action “may have serious repercussions for physicians and patients. Without these tools, physicians and patients may be unable to access necessary information or coordinate care,” the trade group said in a letter commenting on the draft rule.

In response to the comment, the agency emphasized termination is a last resort. It also added a new, intermediate step in the direct review process called “proposed termination.” That will give health IT developers a chance to resolve issues regarding a non-conformity prior to decertification.

The College of Healthcare Information Management Executives, a trade group that represents chief information officers at hospitals, praised the rule for addressing clinicians’ concern about the usability of EHRs. Other members worry some systems fail to calculate quality measurement data correctly, jeopardizing the accuracy of information that is increasingly tied to payment and penalties for providers.

The Electronic Health Record (EHR) Association felt the ONC’s proposed rule inappropriately expands the agency’s legal authority.

The potential costs of this rule for health IT developers, the ONC, and healthcare providers may be as much as $650 million, with an annual cost of $6.5 million.

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