5 regulatory trends hospitals should watch in 2013

Karen Cheung-Larivee

 Karen Cheung-Larivee

There's no rest for the weary, and no one knows that more than the provider. The new year brought with it trepidation about regulatory changes. With full implementation of the 2010 health reform law coming, hospital leaders are looking at their budgets, strategic plans, workforce levels and goals for 2013.

Here are five of the regulatory trends hospitals will have to watch during the planning process this year:

1. Hospital payment cuts
It's not good news: Although physicians got a reprieve from falling off the "fiscal cliff," hospitals will bear the brunt of Medicare payment cuts. Congress came back with a deal passed at the 11th hour. Now signed into law, the American Taxpayer Relief Act includes a series of provisions that will hit hospitals' wallets to the tune of $10.5 billion.

Provider groups, especially the American Hospital Association and the National Association of Public Hospitals and Health Systems, said they are disappointed, claiming that the fiscal cliff deal simply postpones a flawed Medicare payment formula. It's essentially patching up a wound (the payment system) with a quick Band-Aid (the fiscal cliff deal). And that Band-Aid will still have to be ripped off. 

2. More attempts at transparency
Attempts to shine more light on drug companies and medical device makers who give gifts to physicians haven't progressed much, although the Centers for Medicare & Medicaid Services may give it another go this year. CMS missed another deadline to collect spending data under the Physician Payment Sunshine Act, which requires physicians and teaching hospitals to report gifts from drug and medical device manufacturers.

As MedCityNews reported, it's a game of "hurry up and wait." CMS sent the proposal to the Office of Management and Budget in November. OMB has 30 days to review and then CMS would have another 90 days to issue the rule, but expect to hear more news on this sooner--perhaps as early as February.

3. Federal scrutiny of claims
As federal authorities bragged last year, the government collected record-breaking fraud recoveries in 2012. Hospitals and other providers, including hospice and mental health clinics, should be on the lookout for prepayment reviews and heightened scrutiny from the Office of General Inspector and Medicare and Medicaid auditors.

The issue is so contentious that it is goes all the way up to the Supreme Court. In American Hospital Association v. Sebelius, hospitals are suing the U.S. Department of Health & Human Services for allegedly denying outpatient payments worth millions of dollars. Hospitals accuse the government of second-guessing medical decisions and, therefore, unfairly withholding payments. Although there's no vote date set just yet, hospitals wait anxiously for the decision. And there could be a ripple effect for the country's providers.

4. ACO cohorts and incoming data
While CMS will announce 2013 cohorts of accountable care organizations, other hospitals and providers can benefit from incoming data from the first Medicare ACOs from 2012.

As Robert Williams, national medical director at Deloitte Life Sciences-Healthcare Consulting, previously told FierceHealthcare, having that data will allow the existing ACOs to make a course correction, if needed. The outcomes of the ACOs and any earned savings will also validate the ACO shared-risk model as the nation moves away from fee for service.
5. IT prep
ICD-10 won't officially go into effect until Oct. 1, 2014, but all HIPAA-covered hospitals and providers will continue to transition to the new coding system. The change requires that all software be implemented and tested--and also calls for additional staff training.

In addition, hospitals and critical access hospitals must achieve Meaningful Use Stage 2 by 2014. Nevertheless, they must incrementally increase access to electronic health records in the meantime--preparation that requires due diligence, time and money.

2013 should be an exciting, busy year, to say the least. The FierceHealthcare team is looking forward to bringing even more news and best practices in the coming year. - Karen (@FierceHealth)