6 strategies to offset heavy Medicare reimbursement cuts

Hospitals under the inpatient prospective payment system (IPPS) will witness Medicare reimbursement cuts of $162 billion to $177 billion over the next decade, according to a new MedeAnalytics' white paper.

"Hospitals have had to come to grips with the impacts of health reform and updates to Medicare's Inpatient Prospective Payment System [IPPS], and now they have the debt deal to worry about," said report author Ken Perez, director of MedeAnalytics' healthcare policy team and the company's senior vice president of marketing, in a press release, yesterday. "To date, no one has attempted to quantify the cumulative financial challenge--let alone suggest strategies for successfully managing it."

To offset the reduced Medicare payments, the report offers the following strategies for hospitals:

1. Partner with clinical leadership: The chief financial officer of an institution should begin meeting with clinical leaders, such as the chief medical officer, to reinforce the financial-clinical partnership.

2. Perform detailed margin analysis: What are the contribution margins of particular services? Evaluate the five highest volume service lines and their profitability.

3. Engage with service-line managers and physicians: Create a clinical performance improvement action team, otherwise known as CPIAT, to use data analytics in looking at supply utilization, length of stay, drug costs, readmissions and ancillary testing.

4. Revamp care coordination: Use checklists at discharge to manage patient care, as well as to send discharge summaries to patients' primary care physicians. In addition, look at physician consultations and their impact on costs and length of stay.

5. Ensure efficient operating room utilization: Look at room turnover time, scheduling gaps and any delays to surgeries.

6. Improve emergency room operations: Also look at ER supply and drug utilization, and monitor inappropriate use of the ER.

For more:
- read the press release
- check out the report (reg. req.)

Related Articles:
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IPPS rule: Acute care hospitals to gain higher Medicare payments
Hospitals brace for Medicare targets on high readmission rates
CMS collection plate taking back millions in overpayments
Hospital layoffs to follow Medicaid reimbursement cuts

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