Medicare

Federal bill would link Medicare hospital pay to quality

Anne Zieger — Fri, 21 Nov 2008 09:14:55 -0500

Now here's a bill that would scare me a bit if I were a hospital administrator--even if it was inevitable (and it is) that such a measure would be written. Sens. Max Baucus (D-MT) and Chuck Grassley (R-IA) have drafted legislation that would link Medicare reimbursement for inpatient hospital care to the quality of that care rather than the number of services provided.

Yes, this is the way things have been going for some time, between the drive to bundle care--as Geisinger has done with some procedures--and quality incentives, but this definitely takes things a step further in the direction of so-called "value-based purchasing." (Value-based purchasing: now there's a concept that's a million times easier to talk about than to actually realize.)

The bill would kick off the new policy in fiscal 2012 and be phased in over four years through FY 2016. Medicare reimbursement levels would be based on quality standards from a list of measures from several groups, including the National Quality Forum.

To learn more about this bill:
- read this Kaiser Daily Health Policy Report article

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AHA survey: Negative profit margins for hospitals

Anne Zieger — Thu, 20 Nov 2008 10:33:36 -0500

With all the news we've been giving you of hospitals around the country struggling, it should be no surprise that the AHA's new survey results on hospital finances are not good. A quick-response survey about the third quarter of this year showed that hospitals are showing a negative profit margin of 1.6 percent; last year's result was a positive margin of 6.1 percent.

So what are hospitals considering to get their profit margin back on the positive side? More than half are at least thinking about staff reductions, and a quarter of them are trying to decide whether they should reduce their services.

Meanwhile, it could get even worse; as the unemployment rate rises, more people are likely to seek uncompensated care at emergency rooms. The AHA has no magic solution for the problem, but it is pleading with lawmakers to not decrease payments for Medicare and Medicaid. That would just be adding insult to injury.

To learn more about the survey:
- read this Modern Healthcare piece

White House's attempt to push Medicare expenses blocked

Dan Bowman — Tue, 04 Nov 2008 10:52:29 -0500

An attempt by the Bush administration to save money on Medicare expenses by paying for only the least expensive treatments for particular conditions was blocked by the Federal District Court. The case at hand involved drugs to treat chronic obstructive pulmonary disease.

Judge Henry Kennedy said that were it to rule in the Bush administration's favor, the Health and Human Services secretary would have too much say in costs for every item covered by Medicare. Currently, Congress sets Medicare payment rates.

"This flies in the face of the detailed statutory provisions," Kennedy said.

Scott T. Williams, vice president of the Men's Health Network, agreed with the decision of the court, saying that if Medicare paid only for the least expensive drugs, lower-income patients might not have the same access to quality care.

For more:
- read this New York Times article

Could drug co-pays rise for Medicare?

Dan Bowman — Tue, 04 Nov 2008 10:23:38 -0500

A recent study by consulting firm Avalere Health LLC found that, for the 10 largest drug companies, premiums are expected to rise an average of 31 percent next year. Some insurers may even increase drug co-payments, according to an article in the Wall Street Journal. For example, for patients under Humana's PDP Enhanced plan, premiums are expected to rise 51 percent to an average of $39.56 per month. Average co-payments on drugs would also rise; expect a 75 percent increase (to around $7) for generic drugs, and a 60 percent increase (to around $40) for brand-name drugs. According to a spokesperson with Humana, the "prices reflect the experience we've seen over the past three years, and our expectations around what will most interest our members and potential members going forward."

For more:
- read this Wall Street Journal article

Medicare PQRI needs serious improvement, AMA says

Anne Zieger — Fri, 31 Oct 2008 11:50:23 -0400

A new AMA survey suggests that the CMS needs to do some serious work on their Physician Quality Reporting Initiative (PQRI) if they want it to be effective.

More than 6 out of 10 physicians who were surveyed found the program to be difficult, and a paltry 22 percent were able to actually download and review their feedback report. Of those that were able to access their report, less than half found it instructive.

Meanwhile, more than half of physicians who asked for help from CMS found its responsiveness to their requests to be "none to low." Worse still, physicians who started reporting in July 2007 didn't receive their reports until 18 months later, which was much too late for them to actually respond to any errors. And the 18 month delay very well may continue, with data submitted in 2008 not likely arrive until sometime in 2010.

To learn more about the PQRI problems:
- read this Healthcare Finance News piece

CMS giving doctors 1.1 percent Medicare pay increase

Anne Zieger — Fri, 31 Oct 2008 10:51:53 -0400

The CMS has passed a new rule that will give doctors a 1.1 percent increase to their Medicare pay in 2009. Doctors will see the new pay increase on January 1, 2009. The final rule also includes an incentives program for doctors who use qualified e-prescription systems. Doctors who take advantage of that incentive and the Physician Quality Reporting Initiative may see as much as a 5.1 percent pay increase from Medicare in 2009. Article

CMS gives Joint Commission conditional approval for critical-access hospital accreditation

Anne Zieger — Mon, 27 Oct 2008 11:15:48 -0400

The Joint Commission received approval from the CMS for its critical-access hospital accreditation program, but the approval was only conditional, and the program is on probation.

The CMS found that there were differences between the conditions that the Joint Commission imposes on hospitals and Medicare's conditions of participation. The discrepancies have arisen as Medicare's requirements have changed over the last six years, since the Joint Commission's program was last approved.

The CMS has given the Joint Commission until May 20, 2009, to update its standards to meet those of Medicare and be taken off of probation.

To learn more about the conditional approval:
- read this Modern Healthcare piece (reg. req.)

CMS to review Medicare Advantage sales commissions

Anne Zieger — Mon, 27 Oct 2008 10:50:38 -0400

Troubled by reports that commissions are skyrocketing, CMS officials said last week that they plan to look into the way agents and brokers are compensated by Medicare insurers.

Right now, about 10 million seniors and disabled people are enrolled in Medicare Advantage, under which Medicare-eligible consumers can enroll in private insurance plans. However, critics have begun to raise questions about how brokers and agents actually get patients to enroll--and whether the size of the commissions involved may be prompting them to sell too aggressively and enroll patients in plans that don't suit them.

According to research by one news organization, agents can make $500 to $550 to enroll a beneficiary in some plans, plus $500 per year for each year the patient stays with the plan. Doling out a $2,500 payment for five years is a big increase from previous years, researchers say.

Now, a wide range of industry stakeholders, including Rep. Pete Stark (D-CA), Humana and UnitedHealth Group, are calling on CMS to cap commissions--and CMS says it plans to do so. In the meantime, CMS has recently issued regulations designed to check abusive sales practices for Medicare Advantage plans, which will take place when the plans' marketing season begins November 15.

To find out more about CMS's plans:
- read this Modern Healthcare piece

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FDA's medical approval process faces GAO scrutiny

Anne Zieger — Mon, 27 Oct 2008 10:47:30 -0400

The Government Accountability Office is scheduled to release a report next month on the FDA's medical device review process, but the facts that we have available to us already suggest that things are seriously amiss.

The FDA itself admits that it doesn't feel the need to either establish that medical devices are actually beneficial, or compare them to existing treatments. All it does in most medical device reviews is make sure that each device performs the tasks it says it's supposed to (without checking on whether it has a therapeutic effect) and doesn't offer any obvious dangers to the patient.

Meanwhile, Medicare offers incentives to doctors to use new devices; the intention is to help encourage them to take the time to learn about new devices, but the result is that doctors may sometimes overuse medical device treatments that have not been vetted for their effectiveness. For example, some devices go through trials with as few as 25 patients. While the pharmaceutical approval process may have some flaws, at least it never approves a drug with such a scanty review process.

Knowing all of this, the GAO's report next month on medical device approval is likely to be very interesting reading.

To learn more about this problem:
- read this New York Times piece

Report names top coding hospitals

Anne Zieger — Fri, 17 Oct 2008 12:56:52 -0400

Ingenix has released its annual report on the top coding hospitals, ranking them based on how accurate and complete their coding practices are when billing Medicare. The report shines a spotlight on hospitals that have done the best job transitioning to CMS's latest policies, including new Medicare payment methods and lower payments for hospital-acquired conditions.

The company says that hospitals that ranked highly have adjusted most quickly to new Medicare billing practices, and have learned to avoid the billing patterns that Medicare's Recovery Audit Contractor program is looking for. For example, many hospitals with smart coding strategies are learning to avoid severity-adjusted grouping.

In addition to evaluating coding strategies, Ingenix researchers used 13 metrics drawn from the DRG and ICD-9-CM systems that correlate strongly with accurate coding.

To learn more about the results:
- read this Healthcare Finance News piece