WEEKLY E-BULLETIN


Dec. 12, 2011


Hospitals Slammed in House GOP Legislation

Hospitals would be forced to give up about $20 billion in reimbursement under legislation introduced by House Republicans Friday as part of a larger bill to fix the physician Medicare payment problem, provide employee tax relief and extend unemployment benefits.  The bill  would replace a 27.4% cut in physician payment rates set to begin Jan. 1 with a 1% increase in each of the next two years.  The bill is DOA in the Senate where majority Democrats oppose many aspects of the bill, but not necessarily all the Medicare provisions.  It is uncertain whether a compromise will be found this week.

The bill would cut payments for hospital outpatient evaluation and management services by $6.8 billion, reduce Medicare reimbursement for bad debt from 70% to 55% over three years and extend the annual therapy cap to therapy provided in the outpatient hospital setting –reducing Medicare spending to hospitals by more than $2.5 billion over 10 years. Click  here for a one-page summary of the health care provisions from the Ways & Means Committee.

Also NOT included in the GOP bill are several important Medicare extenders of expiring provisions:
Outpatient Hospital Hold Harmless Provisions:  Small rural hospitals (100 beds or fewer) receive Medicare payments so that they are held harmless from the effects of the outpatient prospective payment system.
Section 508 Hospital Payments:  Created in 2003, certain hospitals, commonly referred to as “Section 508 Hospitals” are reimbursed by Medicare at rates that better account for the service they provide.
Extension of physician fee schedule mental health add-on:  Increased payment rate for psychiatric services delivered by physicians, clinical psychologists and clinical social workers by 5 percent.

Rather than Medicare cuts, Senate Majority Leader Harry Reid and Senate Republican Jon Kyl have suggested using the savings from ending the war in Iraq to pay for the physician Medicare fix.  It is unclear whether there is enough support in Congress for this funding source.

Click here for a very good 25-page summary of the entire bill.  Click here for many more summaries of all the provisions in the legislation.


More From Don Berwick

There continues to be a lot of interest in Don Berwick, CMS Administrator until a week ago.  So, we have the clip of his first television interview since leaving the Obama administration. Click here to see the 14 minute interview: http://video.msnbc.msn.com/up-with-chris-hayes/45542468 And an update from the Boston Globe here.  And his 5 Principles of Change from a speech in Boston last week here.


65 Hospitals Get Leapfrog Group’s Top Award

Sixty-five hospitals have earned The Leapfrog Group’s annual Top Hospital? designation, equaling 2010′s record-setting total. The Top Hospital designation recognizes hospitals that deliver the highest quality care by preventing medical errors, reducing mortality for high-risk procedures like heart bypass surgery, and reducing hospital readmissions for patients being treated for conditions like pneumonia and heart attack. Click here to see the list of hospitals.

New Data Shows Physician Distribution Across US

The number and distribution of physicians across the United States is literally all over the map.  The AAMC is out with a new report (click here for the 61-page PDF report) with data on active physicians in each state, including physician-to-population ratios, percent female, age distribution, and type of medical education.  It is an excellent summary of what the nation faces with a significant physician shortage.


New Hospital Wage Index Data Details Reclassifications, Exceptions

More than 37 percent of PPS hospitals have a wage index exception or reclassification in FY12, according to new data from the AHA.  Frontier state hospitals saw their wage index increase an average of 16.6 percent in FY12, more than any other group exception.  Click here for a copy of a very informative slide presentation.

Medical Devices Targeted for Cuts by Hospitals

Hospitals are reducing their costs by targeting expensive medical devices, according to a Reuters report out last week.  Operating margins for large medical device makers  typically range from 25 percent to 28 percent, compared with 7 percent to 10 percent for publicly traded hospital operators, according to Thomson Reuters data. The spread on gross margins is even greater, with device makers in the 70 percent to 80 percent range compared with 35 percent to 55 percent for hospitals, according to analysts. Click here for the complete story.

CMS to Open Its Claims Data Base

Medicare’s claims database is being opened up for public use, allowing employers, insurers and consumer groups to create report cards on physician and hospital performance. Acting CMS administrator Marilyn Tavenner said the move will lead to greater transparency and accountability in health care and will promote quality and lower costs. Click herefor details.

HHS Awards $14 Million to School-Based Health Centers

More than $14 million was awarded last week to 45 school-based health centers across the country allowing the number of children served to increase by nearly 50 percent, according to HHS.  Click here for the list.

Number of RNs Jumps: New Study

The number of young registered nurses in the U.S. increased 62% from 102,000 in 2002 to 165,000 in 2009, the highest growth rate since the 1970s, according to a new study. The numbers are a sign that a predicted shortage of nurses in 2030 may not come to pass or may not be as deep as expected.  Click here to see the story.

New CMS Study Shows Per Capita Health Spending by State

Northeastern states have the highest per capita health spending in the United States, with midwestern states not too far behind, according to a report issued last week by CMS’ Center for Strategic Planning. In 2009, the 10 states where per capita spending was highest ranged from 13 to 36 percent higher than the national average, and the 10 states where per capita spending was lowest ranged from 8 to 26 percent below the national average. Click here to see the very interesting 31-page report.