Hospitals urge CMS to exercise caution on global payments

The American Hospital Association said it supports the work a federal agency is making in the realm of global payments, but also urges officials to do so with caution.

Global budgeting is currently active in only one state, Maryland, long an outlier on healthcare finance issues. Nevertheless, the global budgeting experiment in that state has led to savings of more than $100 million during its first year, and patient readmissions were also reduced below the nationwide average as well.

The AHA urged in a letter sent last week to CMS Chief Medical Officer and Deputy Administrator Patrick Conway, M.D., that any proposals take all of a patient's care and financial needs into consideration; integrate behavioral health; integrate care delivery into the community; and put forth initiatives that would improve patient safety.

"Designing a global payment program to address the unique needs of various hospitals and health systems, including rural hospitals, is a challenging undertaking and we urge CMS to proceed in a thoughtful and deliberate manner," AHA Senior Vice President of Public Policy Ashley Thompson wrote in the letter. 

Moreover, the AHA noted that any global payment initiatives be purely voluntary and be applied at the regional level instead of the national level, and that hospital and healthcare system size be taken into account. There should also be specific policies in place intended to address the issues of rural and critical access hospitals.

Such hospitals have been under enormous financial pressure in recent years. A study issued last fall by iVantage Health Analytics concluded that 13 percent of rural hospitals nationwide are at risk of having to close their doors, with some states such as Mississippi having one in three hospitals at risk of closure.

To learn more:
- read the AHA letter (.pdf)