CMS Issues Hospital Value-Based Purchasing Rules

 CMS issued a final Hospital Value-Based Purchasing rule late last week that will reward hospitals for providing high quality, safe care for patients.  CMS will distribute an estimated $850 million to hospitals based on their overall performance on a set of quality measures that have been linked to improved clinical processes of care and patient satisfaction. The program will apply to payments for discharges occurring during fiscal year 2013, which begins Oct. 1, 2012. CMS said the final rule will take effect July 1, 2011. Click here for all the details.

SNF Rules Could Cost Facilties $4 billion in 2012

CMS last week issued two options that would have dramatically different impacts on the payments to skilled nursing facilities for fiscal year 2012.  According to the proposed rule, the first option reflects the standard rate update methodology, which would provide an increase of $530 million, or 1.5 percentage points. The increase is derived from applying the 2012 marketbasket index of 2.7 percent reduced by 1.2 percentage points to account for greater efficiencies in the operation of nursing homes. The other option CMS said it is considering adjusts for an unexpected spike in nursing home payments during FY 2011. Under this option, CMS said, the $530 million increase from the required update to the payment rates would be offset by a $4.47 billion reduction from the recalibration of the case-mix adjustment. The agency said the net impact would be a $3.94 billion reduction of FY 2012 payments to Medicare skilled nursing facilities, or 11.3 percent lower than payments for FY 2011.  A copy of the draft regs is attached above.

RACs Collect $313 in Overpayments

 Medicare’s Recovery Audit Contractor (RAC) program has collected $313 million in overpayments through March 2011, according to a CMS report released late last week.  The report examined RAC recoveries from October 2009, when the program was expanded nationally, through March 2011.  Click here to see the report.


IRFs Get 1.5 Percent Update

 CMS last week issued a proposed rule that would update Medicare payment policies and rates for inpatient rehabilitation facilities (IRFs) in FY2012. The rule proposes to increase payment rates under the IRF Prospective Payment System by a projected 1.5 percent —an estimated $120 million nationwide. The projected update reflects a rebased and revised market basket specific to IRFs, inpatient psychiatric facilities, and long-term care hospitals (the RPL market basket) — currently estimated at 2.8 percent for FY 2012 – less a 1.3 percentage point reduction mandated by the Affordable Care Act.  Click here for more details.


Hospices To Receive 2.3 Percent Increase 

 Hospices serving Medicare beneficiaries will see an estimated 2.3 percent increase in their payments for FY2012, according to proposed rule released last week by CMS.  Hospices will also begin reporting on the quality of care received by Medicare patients. Click here for details.


Insurance Agents Take Hit Under MLR:  New Survey

 According to a report released last week, commissions have decreased for 75 percent of health insurance agents and brokers surveyed since a health care reform law provision took effect Jan. 1 limiting what health insurers can spend on administrative expenses.  Click here to see the survey.


New Summaries Available on ACO Issues

 Strategic Health Care is providing five new one-pagers on the Shared Savings Program and Accountable Care Organizations (ACOs) produced by our health policy team. The overview has a basic summary and is a good orientation document. The other four are deeper-dives into how ACO financial targets will be set; the quality measures for ACOs; the organizations that can own and operate ACOs; and how beneficiaries will be assigned to ACOs.  The five new policy summaries below.


Post-Surgery More Problematic at Teaching Hospitals: New Study

According to the May issue of the Annals of Surgery, The University of Pennsylvania School of Medicine has surprised experts with its findings that teaching hospitals have more problems after surgery than non-teaching institutions. The majority of previous research has found just the opposite, according to a report by Reuters. Click here to read the abstract.


New Eye Drug Would Cost Significantly Less

A much cheaper drug has proved just as good as a $2,000 monthly shot at treating a common eye disorder that can lead to blindness, a long-awaited study has found. It also shows that patients can be treated less often, sparing them a lot of pain and expense.  The results are expected to lead many doctors and patients to turn away from the pricier Lucentis and instead use $50 shots of Avastin for an age-related condition called wet macular degeneration.  Click here for further details.

For the latest health care news, please visit our website www.strategichealthcare.net

Paul Lee
Senior Partner
Strategic Health Care
Washington, D.C.