WEEKLY E-BULLETIN


Hospital FY13 Update Is 2.8 Percent: CMS

Payment rates to general acute care hospitals will increase by 2.8 percent in FY 2013, according to a CMS announcement last week. That amounts to $2 billion more in payments. The 2.8 percent is a net update after the market basket update, improvements in productivity, a statutory adjustment factor, and adjustments for hospital documentation and coding changes. Click here for an excellent summary from Strategic Health Care’s policy team.

CMS Releases Final Value-Based Purchasing Rules

CMS also released a final rule updating the Hospital Value. Based Purchasing (VBP) Program, for which HHS will begin making value, based incentive payments to hospitals on October 1, 2012. The rule finalizes new and removed measures, updated performance benchmarks, and future VBP Program specifications. Also included in the rule is the establishment of the Hospital Readmissions Reduction Program. Click here for the SHC summary.

CMS Releases Final Inpatient Quality Reporting Rules

CMS also released final rules for the hospital Inpatient Quality Reporting (IQR) Program that allows hospitals to receive the full update to their Medicare payments for successfully reporting certain quality measures while penalizing those hospitals that fail to submit their quality data. CMS estimates in the final rule that approximately 95 hospitals may not receive the full annual percentage increase in any fiscal year, but is unable to determine the exact number of hospitals that will not meet the requirements to receive the full annual percentage increase for FY 2015. Click here for an SHC summary.

LTCHs Reduced; Several Major Policy Changes Made

For long term care hospitals, CMS is imposing a 1.3 percent payment reduction (first year of a three-year phase-in) for a permanent prospective budget neutrality adjustment, starting after December 28. The statutory moratorium on new LTCHs and LTCH satellite facilities as well as an increase in beds in existing LTCHs and LTCH satellite facilities will expire on December 29, 2012.  The five-year statutory delay in the application of the “IPPS comparable” per diem payment option under the short stay outlier policy will also expire for discharges occurring on or after December 29, 2012.  Click here for a summary.

CMS: Inpatient Psych Payments to Increase $36 Million

Inpatient psych facilities will receive $36 million in payment updates in FY13, according to an announcement last week from CMS.  They will also have nine additional months – until July 2013 – to prepare to collect data for the new quality reporting program under the IPF prospective payment system. The update reflects a 2.7% market-basket update minus a 0.1 percentage point reduction and 0.7 percentage point reduction required under current law; along with a 1.1 percentage point decrease due to an update to the outlier threshold amount, which decreases outlier payments from about 3.1% in rate year 2012 to 2.0% in FY 2013.  Click here for a copy of the 122 pages of rules.

Skilled Nursing to Get $670 Million More Next Year

$670 million — that’s how much skilled nursing facilities will receive in FY13 for their Medicare prospective payment system update, CMS said last week.  The increase reflects a 2.5% market basket update minus a 0.7% productivity adjustment. The federal rate also incorporates adjustments to account for facility case mix. Under the RUG-IV case-mix classification system, urban facilities will receive a 1.9% update and rural facilities will receive a 1.5% update. The 2013 payment update includes no policy changes.  Click here for the 105 pages of rules.

Nursing Homes to Take $65 Billion Hit in Next Decade: New Study

A new 50 state data analysis projects the U.S. nursing home sector and its patients face a staggering $65 billion cumulative reduction in Medicare funding over the next ten years as a result of several different federal budgetary actions and regulatory changes made by Congress and CMS since 2009.  Click here to see the state-by-state impact from Avalere consulting.

Feds Moving to Set Up Exchanges in Reluctant States

It appears the Obama Administration is preparing to set up health insurance exchanges in states that don’t want to set up their own, according to a weekend report from the New York Times. With Republicans in many states resisting the creation of exchanges or deterred by the complexity of the task, federal officials are preparing to do the job, with or without assistance from state officials. Click here for the story.

5 Systems Awarded Millions for APRN Programs

Five health care systems were selected last week by CMS for a graduate nurse education demonstration program. CMS will provide reimbursement for the reasonable cost of providing clinical training to APRN students in the demonstration. Participating hospitals must partner with accredited schools of nursing and non-hospital community-based care settings. The demonstration is expected to run for four years. The selected hospitals:  Hospital of the University of Pennsylvania; Duke University Hospital (NC); Scottsdale Healthcare Medical Center (AZ); Rush University Medical Center (IL) and Memorial Hermann-Texas Medical Center Hospital (TX). Click here for additional details.

Grants Given to Help Vets Become PAs

HHS last week announced $2.3 million in grants to train primary care physician assistants and help veterans transition from the military to civilian PA careers when they return home. Twelve institutions in ten states will receive the funds. Click here to see the list.

8 Prevention Services Coming Free for Millions of Women

Starting August 1, 47 million women were eligible to access eight new prevention-related health care services without paying more out of their own pocket, according to HHS last week.  The new rules in the health care law require coverage of these services take effect at the next renewal date – on or after Aug. 1, 2012—for most health insurance plans. The new prevention-related services are: well-woman visits; gestational diabetes screening; domestic and interpersonal violence screening and counseling; FDA-approved contraceptive methods, and contraceptive education and counseling; breastfeeding support, supplies, and counseling; HPV DNA testing, for women 30 or older; sexually transmitted infections counseling for sexually-active women and HIV screening and counseling for sexually-active women. Click here for more information about all the newly required services.

Hospital, Doc Office Employment Up

4,817,600: That’s how many people are employed by hospitals, according to a Labor Department report last week. That’s an increase of 0.11% in July.  That’s 5,300 more people than in June and 86,400 more than a year ago. 2,427,700 work in physician offices – 2,700 more than in June.  The nation’s overall unemployment rate increased by 0.1 percentage point in July to 8.3%. Click here to see a breakdown of various health care employment numbers.

Massachusetts Makes Major Health System Reforms to Reign In Costs

Massachusetts lawmakers last week approved health care payment and delivery system reforms, including growth benchmarks for annual health care expenditures, which the Governor is expected to sign into law. The bill would not allow spending on health care to grow any faster than the state’s economy through 2017. For five years after that, any rise in health care costs would need to be half a percentage point lower than the increase in the state’s gross domestic product. Click here for a good summary from the New York Times.  And a thoughtful editorial from the NY Times here that provides additional perspective.

Nation’s Top Health Policy Thinkers Publish Their Solutions – One “Left” and One “Right”

Some of the nation’s top health care policy thinkers – from the left and the right – are out with their recipes for improving the US health system.  Irrespective of your political leanings, these proposals are compelling.  Both were published last week in the New England Journal of Medicine.  Click here for the left-leaning solutions (includes former CMS chief Don Berwick, MD, as an author). Click here for the right-leaning solutions (includes former HCFA Administrator Gail Wilensky).

Study: Nurse Burnout, HAIs Connected

If hospitals could reduce their proportion of burned-out nurses to 10% from the 30% that is typical, according to a study out last week focusing on data from Pennsylvania, they would prevent 4,160 cases a year of the two most-common hospital-acquired infections statewide and save $41 million. Click here for the first study linking nursing burnout with hospital-acquired infections.

Number of Adults with Chronic Conditions Increasing: CDC

The proportion of U.S. adults aged 45-64 with two or more chronic conditions increased 35% for whites, 31% for Hispanics and 20% for African Americans between 2000 and 2010, according to a report released last week by the CDC.  An estimated 28% of African Americans aged 45-64 had multiple chronic conditions in 2010, compared with 21% of whites and 19% of Hispanics. For adults aged 65 and over, the prevalence of multiple chronic conditions increased by 32% for Hispanics, 22% for whites and 18% for African Americans over the 10-year period.  Click here for a good summary with charts.

CMS: Recovery Audit Prepayment Demo Coming Soon

CMS plans to launch its Recovery Audit Prepayment Review Demonstration on Aug. 27, according to a notice last week. The three-year demonstration, announced last November, will audit medical records for claims after the claims are submitted but before they are paid. These reviews will focus on seven states with high populations of fraud-and-error-prone providers (FL, CA, MI, TX, NY, LA, IL) and four states with high claims volumes of short inpatient hospital stays (PA, OH, NC, MO) for a total of 11 states, CMS said.  Click here for more (and scroll down to the Recovery Audit section.)

Tobacco (Not Cigarette) Use Up

Sharp increases in total adult consumption of pipe tobacco (used for roll-your-own cigarettes) and cigarette-like cigars since 2008 have offset declines in total cigarette consumption, according to a new report from the CDC.  Although total cigarette consumption continued an 11-year downward trend with a 2.5% decline from 2010 to 2011, dramatic increases in use of non-cigarette smoked tobacco products have slowed the long decline in overall consumption of smoked tobacco products. Click here to see details.

Texas, Mississippi, Oklahoma Have Most West Nile Virus Cases: CDC

So far this year, 42 states have reported West Nile virus infections in people, birds, or mosquitoes. A total of 241 cases of West Nile virus disease, including four deaths, have been reported to CDC. This is the highest number of cases reported through the end of July since 2004. Almost 80% of the cases have been reported from three states, Texas, Mississippi, and Oklahoma. Click here for more.

$27 Million in Federal Grants for Physical and Nutrition Education

The US Department of Education last week announced 56 schools, districts, and community organizations that partner with districts in 25 states will split $27 million in federal grants for physical and nutrition education.  Some of this year’s grantees are the St. Louis school district in Missouri, the Newcastle district in Oklahoma, Maryvale High in Cheektowaga, N.Y., and the Yukon-Koyukuk district in Alaska. Here’s a complete list.

CMS Consolidates Data Offices

A major change in how CMS will manage data through its bureaucracy – this initiative creates the Office of Information Products and Data Analysis (OIPDA), the goal of which is to maximize CMS data for internal and external users. The Office will serve as the single point of accountability and coordination across the agency to ensure consistent implementation of policies related to data release and dissemination. The Office will also develop and continually update the suite of CMS data and information products and serve as the agency point of contact for external data requests. Click here for more information.

Report: Employee Medical Benefits Increasing Around the World

A very interesting report last week from Towers Watson consulting comparing the increase in the cost of providing employee medical benefits around the world – it appears that much of the world is catching up to the United States. Click here for the report.

Americans Support Medicaid Expansion: Poll

Americans are broadly supportive of the health care law’s expansion of Medicaid to cover millions of uninsured people, according to a poll out last week from Kaiser Health News. But they are less enthusiastic about expanding it in their own states after they realize state taxpayers will pick up some of the cost. Click here for the report. Meanwhile, conservative critics of the massive government health insurance program for the poor are readying a new push to dramatically scale it back if Republicans control the White House and Congress next year. Click here for the LA Times story.