medicare reimbursement

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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Almost half of TX doctors opting out of Medicare

Anne Zieger — Wed, 09 Jul 2008 10:53:01 -0400

In Texas, it appears that officials' worst fears about Medicare acceptance are coming to pass. According to a recent survey by the Texas Medical Association, only 58 percent of doctors in the state now accept new Medicare patients, down from approximately 90 percent before 1990. Worse, given policymakers' desire to offer patients medical homes, only 38 percent of primary care physicians are Medicare-friendly. The physicians are struggling with a 20 percent cut in inflation-adjusted dollars that has hit Medicare over the last seven years. Some Texas doctors are so frustrated with Medicare reimbursement rates that they're calling it "the new Medicaid," particularly given the looming 10.6 percent cut that will go into effect if Congress doesn't avert it.

If the planned Medicare cut does take place, Texas physicians would lose $860 million treating Medicare patients, or $18,000 per doctor, over the next 18 months, the medical association projects. At that point, the flight from Medicare is likely to accelerate dramatically, observers say.

To learn more about this situation:
- read this Houston Chronicle piece

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GAO: Providers owe $2B in taxes, still get Medicare dollars

Anne Zieger — Fri, 20 Jun 2008 12:51:13 -0400

Healthcare providers owe the government more than $2 billion in back taxes, but those that owe are still allowed to collect Medicare payments, according to research by the Government Accountability Office. The GAO, which has looked at provider back taxes for years, told Congress that in 2006, more than 27,000 nursing homes, hospitals, physicians other providers owed back taxes while collecting Medicare reimbursement. That's about 6 percent of all Medicare providers. The bulk of the unpaid taxes are payroll taxes ($896 million), followed by individual income taxes ($581 million) and other taxes ($540 million).

Right now, the IRS uses an automated system to hold back a percentage of payments to any contractors who haven't paid taxes, but Medicare has no such system in place. However, CMS acting administrator Kerry Weems vowed that Medicare payments will be part of the IRS's program by October. If so, CMS has the potential to collect a huge volume of the uncollected $2 billion. After all, Medicare paid out $402 billion in benefits in 2006 alone.

To learn more about the GAO report:
- read this Washington Post piece

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CMS plans new ranking system for nursing homes

Anne Zieger — Thu, 19 Jun 2008 11:25:07 -0400

CMS has plans to introduce a new ranking system for nursing homes on its consumer website. Its new Nursing Home Compare site will introduce a five-star ranking system in December designed to make quality information easy to absorb for nonprofessionals. Through July, the agency will accept comments on the system from the public, consumer groups and nursing homes.

Meanwhile, CMS also is establishing a new requirement that all nursing homes must have full sprinkler systems in place, not just new facilities. The country's 16,000 nursing homes will need to have these systems in place by 2013 if they want to receive Medicare reimbursement. Until now, older facilities have been exempt from this requirement. Right now, about 15 percent of homes have partial sprinkler systems in place, and about 8.8 percent have no sprinklers or their status is not known. The agency expects it to cost about $850 million over the next five years to phase in full sprinklers for those that don't have them.

Another issue that could come up in the future is the arbitration clauses that are often part of admissions agreements at nursing homes. Critics say such agreements, which require that disputes be settled by arbitration rather than in court, are weighted heavily in favor of nursing home operators and do little to deter bad behavior.

To learn more about CMS's nursing home plans:
- read this Modern Healthcare piece (reg. req.)

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AHA says CMS hospital quality measures aren't ready

Wed, 11 Jun 2008 06:59:57 -0400

As things stand, hospitals soon will have to report on 72 quality measures (up from 30) if they want to receive full Medicare reimbursement. However, most of the new quality measures proposed by CMS for its fiscal 2009 budget aren't ready to be reported on yet, according to the American Hospital Association.

Of the 43 new measures CMS has proposed, only 10 have been adopted by the Hospital Quality Alliance, and what's more, many have not been endorsed by the National Quality Forum, wrote the AHA in a letter to the agency. AHA doesn't believe that the 33 measures not yet adopted by the Hospital Quality Alliance are ready for reporting. What's more, adding that many more measures may actually confuse hospitals as to what their priorities should be, according to AHA Executive Vice President Rick Pollack.

To learn more about the AHA's concerns:
- read this Modern Healthcare article (reg. req.)
- read the AHA's comments (.pdf)

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CMS wants to cut skilled-nursing spending

Fri, 02 May 2008 06:59:56 -0400

CMS says it is proposing to cut about $770 million in overall payments to skilled-nursing facilities in fiscal 2009, though it also plans to help the industry with an inflationary update to absorb some of the difference. The change is one of several planned by the agency to address what it sees as industry upcoding.

All told, CMS wants to cut 3.3 percent in overall payments, but the update will amount to about 3.1 percent. The remaining gap is about $60 million net loss between this year and next. Under the new payment rule, CMS would change case-mix weighting to better align its reimbursement structure with the "right" procedures. It may also toss pay-for-performance initiatives and other quality incentives into the mix.

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

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Hospitals win back $666M from Medicare

Thu, 13 Mar 2008 07:59:58 -0400

In a deal that marks one of the largest settlements ever paid by the federal government to healthcare providers, CMS has agreed to pay out $666 million to 667 hospitals that sued for back payments. The dispute dates back to shifts in Medicare reimbursement policies from the 1980s. In 1986, the Reagan administration changed reimbursement rules to exclude some low-income patients from disproportionate-share payment calculations. A number of hospitals sued to have the rule changed, and succeeded in 1997. Following the reversal, one hospital sued for back payments for treatment in the 1990s, and eventually attracted a total of 667 hospitals seeking reimbursement as well--most of which were nonprofits treating largely the poor. The hospitals won in federal court, and the federal government lost its appeal, then got rejected for a hearing by the Supreme Court.

To learn more about the case:
- read this piece from The Wall Street Journal (sub. req.)
- read this Modern Healthcare article (reg. req.)

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Western PA hospitals battle for Medicare hike

Mon, 14 Jan 2008 06:59:56 -0500

A group of 34 western Pennsylvania hospitals is fighting to get a boost in Medicare reimbursement, arguing that the formula the government uses doesn't properly account for their expenses. The hospitals, which retained two accounting firms to examine hospital wage and benefit data, concluded that the current Medicare formula doesn't take into account the cost of funding employee pensions. Once that and other adjustments are made, hospitals should be getting $13 million more per year starting in October of this year, according to the Hospital Council of Western Pennsylvania. The hospital has until June of this year to pursue this appeal, which goes through CMS contractor Highmark Medicare Services; if they lose, they can appeal directly to Medicare.

To find out more about this dispute:
- read this Pittsburgh Business Times piece

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Medicare demands money back as hospice patients live longer

Wed, 28 Nov 2007 06:59:58 -0500

Historically, patients who ended up in a hospice have tended to live less than six months once curative efforts were withdrawn. Medicare reimbursement for hospice services was structured around this assumption. More recently, however, hospices have begun taking in patients, such as those with Alzheimer's disease, who live longer than the cancer patients that once filled most hospices. While there's no time limit on how long these patients can stay in the hospice, there is a limit on how much Medicare will pay a hospice during a single year--and that's turning out to be a big problem. With payments fueled by these longer-stay patients, hospices have begun to exceed those limits. And now, Medicare is now asking some hospices to pay back funds they received.

In demanding refunds from hospices, Medicare is trying to trim expenses in a critical area. Hospice is one of the fastest growing components of Medicare, with its services being used by nearly 40 percent of Medicare beneficiaries and spending tripling from 2000 to 2005. According to some estimates, more than 200 hospices got CMS repayment demands for reimbursements that exceeded yearly limits. The demands totaled between $166 million and $200 million, depending on who you ask. What's missing from this discussion, however, is whether Medicare actually did the math and determined whether a crackdown actually saves money when the lower patient management costs for hospice care are figured in. After all, these patients are going to be in care somewhere, right?

To learn more about this issue:
- read this article from The New York Times

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Federal mental health parity measure faces roadblocks

Wed, 21 Nov 2007 06:59:54 -0500

Federal mental health parity legislation--designed to require health plans to cover mental illnesses on an equal basis with physical illnesses--has made meaningful progress of late. However, it's beginning to look as though differences between the House and Senate versions of the bill could stall negotiations and prevent the bill's passage this year. The House bill includes a broader definition of conditions health plans must cover, and would take effect on January 1, 2008, while the Senate bill is more narrowly drawn and would take effect one year after the bill is signed. Not only that, lawmakers estimate that the House bill could generate $4 billion in costs, something they'll have to cover if it moves forward. The House Ways and Means Committee may allocate this funding to offset cuts in physician Medicare reimbursement instead, observers say.

To find out more about the debate:
- read this Kaiser Daily Health Policy Report item

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