Hospitals to Receive Paltry Payment Increase from Medicare in FY14

Late Friday, CMS issued its hospital inpatient prospective payment system (PPS) and long term care hospital PPS proposed rule for FY14. The proposed rule would increase inpatient PPS rates by 0.8% in FY14. Specifically, the proposed rule includes an initial market basket update of 2.5% for those hospitals that submit data on quality measures; hospitals not submitting data would receive a 0.5% update. The rule makes a productivity cut of 0.4% and an additional market basket cut of 0.3% as mandated by the Affordable Care Act. The rule also includes the ACA mandated Medicare Disproportionate Share Hospital reductions, which would reduce overall Medicare DSH spending by $1 billion in FY 2014.

For LTCHs, CMS proposes to increase payments by 1.1% in FY14. The rule also would allow the 25% rule threshold to go into effect in FY14. CMS will accept comments through June 25.

The rule also clarifies that a hospital inpatient admission spanning two midnights, more than one Medicare utilization day, would be paid for under Part A. Hospitals have asked for more clarity on the definition of “inpatient”. It also helps patients who end up with longer stays as an outpatient or under observation if the hospital is uncertain about admission criteria.

A more detailed list of changes from CMS can be viewed by clicking here. Click here for the actual proposed rule, 1,124 pages.


CMS Lays Out New Hospital-Acquired Condition Reduction Program and More Quality Changes

The FY14 hospital payment proposed rule also establishes a framework for implementation of the new Hospital-Acquired Conditions Reduction Program, which would begin in 2015. It would also update the measures and financial incentives in the Hospital Value-Based Purchasing and Readmissions Reduction programs. In addition, it would also revise measures for the Hospital Inpatient Quality Reporting program, Inpatient Psychiatric Facility Quality Reporting and LTCH Quality Reporting programs, and PPS-Exempt Cancer Hospital Quality Reporting Program. Click here for the details from CMS.


ACOs Can Expect More Rules From CMS; Pioneers Don’t Get the Help They Wanted

CMS won’t agree to Pioneer ACOs’ requests for a delay in the Pioneer demonstration’s pay-for-performance phase, according to a letter to the ACOs from CMS. CMS has agreed to speed up integration of real time data into the quality metrics on which performance is based and soon will update those metrics in a rule making that will extend to all ACOs. Click here to read the letter from CMS.


Medicaid Expansion Won’t Expand As Hoped: Report

According to the latest analysis, 20 states are expanding Medicaid, 15 are not and the rest are undecided. With most state legislative sessions nearing an end, most state will likely vote against Medicaid expansion, at least starting in 2014.  Click here for a state-by-state update.


Some State Insurance “Monopolies” May Hamper Exchanges

The lack of health insurance competition in nearly a dozen states could present problems when the insurance exchanges that are part of the Affordable Care Act launch in October, according to a report out last week. The exchanges are supposed to give Americans who do not get health insurance from their employers the opportunity to choose from an array of private insurance plans. The idea is to generate competition between insurers that will lead to lower premiums. But what happens when there are so few insurers in a state? Click here for the list of least competitive states from the Pew Charitable Trust report.


IRS IG Outlines Their Issues with ObamaCare

The Inspector General for the IRS has found that although the agency is making progress at implementing key sections of the ACA, it should figure out how to better use the health insurance information that employers must now provide. The IRS is generally doing a good job of implementing ACA reporting requirements, the IG said in a report released last week. For a pretty good summary of the all the issues the IRS must face in the ACA, click here for the IG’s report.


Moody’s Raises Issues with Medium to Small Hospitals

During the first quarter of 2013 Moody’s Investors Service downgraded six ratings in the not-for-profit healthcare sector and upgraded three ratings, according to a new Moody’s report. Five of the six downgraded ratings were on smaller hospitals with less than $500 million in revenues. Click here for more from Moody’s.


Medicare Advantage, Sequestration Challenge United Health

One of the nation’s largest insurers, UnitedHealth Group, told investors that it expects to participate in a limited number of health exchanges in 2014, from 10 to 25, and that the most difficult development was the impact of budget sequestration and Medicare Advantage shortfalls in general. Click here for a very interesting nine page report from United’s CEO.


Democrats Concerned About ObamaCare Implementation

Democrats in the House and Senate last week expressed concerns about how the Obama administration was carrying out the health care law they adopted three years ago.  Democrats seem to be getting nervous that they could pay a political price if the roll out of the law was messy or if premiums went up significantly. Click here for the NY Times story.  Republican leader Mitch McConnell was piling on last week with an op-ed in Reuters that called on the President to give a detailed explanation of ObamaCare to the American people. Click here.


CMS Regs Would Increase Rewards for Reporting Fraud, Abuse

CMS has proposed a regulation that would raise the reward given to individuals who offer information on entities or people involved in Medicare fraud and abuse. The proposal would increase the reward to 15% of overpayments recovered by the agency in a case, compared with 10% or $1,000, whichever is less, under current rules. In addition, the rule would allow CMS to reject providers’ Medicare enrollment if they are found to be affiliated with a group or person that has unpaid Medicare debt. Click here for more from CMS.


Cancer Docs Urging Pharma to Lower Drug Prices

With the cost of some lifesaving cancer drugs exceeding $100,000 a year, more than 100 influential cancer specialists from around the world have taken the unusual step of banding together in hopes of persuading some leading pharmaceutical companies to bring prices down. Click here for the story in the NY Times. Click here for the specialists’ detailed report in the journal Blood.


Lawmakers Urge CMS to Change Sequester Impact on Cancer Drugs

A bipartisan group of 124 lawmakers has sent a letter to CMS petitioning the agency to change its application of the sequester to preserve access to cancer drugs at community clinics. Medicare pays clinics the average sales prices of the cancer drug plus 6%, the administration fee, but the 2% sequester cut applies to the total price of the drug. That means physicians would lose money by administering some drugs. Some clinics have stopped accepting new Medicare patients. Click here to see the letter.


Justice Department Sues Novartis Over Allegations

The Justice Department is suing Novartis for an alleged kickback scheme to pay doctors for prescribing its drugs. It said it’s the second civil false claims suit against the company. The complaint alleges that Novartis systematically violated the anti-kickback statute from 2001 through 2011 by paying doctors to speak about its products, including “hypertension drugs Lotrel and Valturna and its diabetes drug Starlix, at events that were often little or nothing more than social occasions for the doctors.” The company allegedly spent more than $65 million on 38,000 speaking events for just three drugs. Click here for the Justice Department announcement. Novartis disagrees. Click here for the company’s rebuttal.


PCORI Announces Two Funding Initiatives

The Patient-Centered Outcomes Research Institute (PCORI) last week announced two funding initiatives that will create the National Patient-Centered Clinical Research Network. PCORI will provide $56 million to aid the operations of as many as eight new or existing Clinical Data Research Networks that integrate and leverage their medical and financial information, such as health plan enrollment files, to support outcomes studies. In addition, 18 existing or new Patient-Powered Research Networks will receive a total of $12 million that they can use to improve programs that enable members to share data and participate in research, among other things. Click here for details from PCORI.


84 Million Uninsured: New Report

Nearly half (46%) of adults ages 19 to 64, or an estimated 84 million people, did not have insurance for the full year or were underinsured and unprotected from high out-of-pocket costs, according to a new report from the Commonwealth Fund. Two of five (41%) adults, or 75 million people, reported they had problems paying their medical bills or were paying off medical debt. And more than two of five (43%), or 80 million people, reported cost related problems getting needed health care. Click here for the complete report.


New Study Explains Why Health Spending Has Slowed 

Health care spending increases are growing slower than at any time in the past 50 years.  Why? The recession, health care reform, medical advances, all may be part of the reason, according to a new report from the Kaiser Family Foundation. Click here.


ICD-10 Adoption Lags: Survey

20% of small- and mid-sized hospitals have yet to start any education or training for the shift to ICD-10, which has a deadline of Oct. 1, 2014, according to a new survey out last week. Of 120 hospitals surveyed, 40 percent have yet to start any ICD-10 clinical modification training for coding staff, while 55% make the same claim about ICD-10 procedure coding system training. 31% of respondents said they don’t plan to dual code before the deadline, while 25% said they will start dual coding in January 2014, and 24% will do so in April of that year. Click here for more.