Hospitals To Get Slight Medicare Payment Increase, Numerous Reporting Changes

CMS issued its hospital inpatient prospective payment system final rule for FY 2016, which will increase rates by 0.9% after accounting for inflation and other adjustments required by law. Among other changes:

  • The rule includes Medicare Disproportionate Share Hospital reductions, which will reduce overall Medicare DSH payments by $1.2 billion in FY 2016.
  • CMS will require hospitals to submit certain clinical quality measures electronically in CY2016 for payment in the FY 2018 Inpatient Quality Reporting program. However, the agency will require the submission of four electronic clinical quality measures rather than the 16 it had proposed.
  • CMS also will expand the patient population of the pneumonia readmission measure used in the Hospital Readmissions Reduction Program beginning in FY 2017 but will exclude certain patients from the expanded population.
  • CMS did not extend the partial enforcement delay of the two-midnight policy that expires on September 30, despite proposing changes to the policy in the outpatient PPS rule that would not take effect before Jan. 1, 2016.

Click here for the full CMS summary. Click here for the complete 2,149 page rule.


Final LTCH Rules Implement New Dual-Rate Payment Changes

Regarding long-term acute care hospitals (LTCHs), CMS issued final rules for FY 2016 that implements the new dual-rate payment structure for LTCHs that will be phased in through a two-year transition that begins October. 1. In general, the two-tiered system will pay traditional LTCH PPS rates for higher acuity patients and lower, “site-neutral” rates similar to inpatient PPS rates for less medically complex cases. For FY 2016, LTCH PPS rates would increase by 1.7% overall. Click here for the CMS summary.


CMS Implements Two-Tiered Payment System for Hospice

CMS’ final rule for Medicare hospice providers gives a net payment update of 1.1%, or $160 million, in FY 2016. . In addition, CMS implements a new two-tiered system for per diem rates for “routine hospice care,” the most common among the four levels of care, intended to more accurately align hospice payments with intensity of services. Specifically, CMS creates a higher rate of $187.54 for the first 60 days of care and a lower rate of $145.14 for days 61 and later. Click here for the CMS summary. Click here for the final 221-page rule.


IRFs Receive 1.8% Medicare Update

CMS’ final rule updating Medicare fee-for-service payments for inpatient rehabilitation facilities for FY 2016 provides an overall 1.8% update ($135 million). To meet the IRF Quality Reporting Program changes mandated in the Improving Medicare Post-Acute Care Transformation Act of 2014, CMS re-adopts one pressure ulcer measure, and adds six new measures assessing functional status and falls with injury. CMS also will begin publicly reporting certain IRF QRP data in the fall of 2016. Click here for the CMS summary. Click here for the 365-page rule.


Psych Payments Increase 1.5%; New Market Basket Formula Created

CMS’ Inpatient Psychiatric payment rule will increase payment rates by 1.5% in FY 2016. Beginning in 2016, CMS will replace the Rehabilitation, Psychiatric and Long-Term Care market basket with a new, IPF-specific market basket based on data from both freestanding and hospital-based IPFs. In addition, CMS will change the IPF quality measure set by adding five new measures and removing three. Click here for the CMS summary. Click here for the 257-page rule.


SNFs See 1.2% Medicare Increase, New Quality Measures

CMS is increasing aggregate payments in FY 2016 to SNFs by $430 million, or 1.2 percent, from payments in FY 2015. Beginning with FY 2018, SNFs that do not satisfactorily report required quality data to CMS will have their market basket percentage updates reduced by two percentage points. For FY 2018, CMS is finalizing the adoption of three measures addressing three quality domains identified in the IMPACT Act: (1) skin integrity and changes in skin integrity; (2) incidence of major falls; and (3) functional status, cognitive function, and changes in function and cognitive function. Click here for the CMS summary. Click here for the 308-page rule.


Three New House Bills Would Modify In/OutPatient System, Reform DSH, IME

The Ways and Means Committee last week released three hospital payment reform bills based on comments it received on its Hospital Improvements in Payment package that was released last year. The Committee is expected to take comments on these new bills from any interested party and then finalize a comprehensive hospital payment reform proposal in the fall.

  • The first bill creates a “crosswalk” code for merging hospital inpatient and outpatient coding and payment systems. Originally designed to eliminate the 2-Midnight rule, this bill also creates a “site neutral” process that could pay hospitals the same rate for essentially the same service regardless of its inpatient or outpatient status. Click here for the Committee’s summary, section-by-section and bill language.
  • The second bill changes IME payments to a lump sum instead of a percentage system. Click here for the Committee’s summary, section-by-section and bill language.
  • The third bill helps hospitals in non-Medicaid expansion states receiving less DSH funds and moves DSH reimbursement to a lump sum model instead of a per discharge add-on payment. Click here for the Committee’s summary, section-by-section and bill language.


New Law Requires Patient Notification of Outpatient Observation Status; Starts Next Year

The U.S. Senate last week passed legislation that would require hospitals to provide Medicare beneficiaries with written notification and a related oral explanation at discharge or within 36 hours, whichever is sooner, if they receive more than 24 hours of outpatient observation services. The Notice of Observation Treatment and Implication for Care Eligibility Act (H.R. 876) was unanimously approved by the House in March. The legislation now goes to the president for his signature and would take effect one year after enactment. Click here for a summary. Click here for the bill language.


PAs, NPs Seeing Significant Medicare Payment Growth

Nonphysician practitioners (NPP) such as physician assistants (PA) and nurse practitioners (NP) are helping expand healthcare access and optimize physician efficiency. And according to Medicare billing records, NPPs have certainly stepped up to the plate. In particular, 15 percent more NPs and 11 percent more PAs received Medicare payments in 2013 than 2012 for all types of care, USA Today reported. Meanwhile, 5 percent fewer physicians received payments from the program. Overall, Medicare payments in 2013 totaled $1.5 billion for roughly 65,000 NPs and $1 billion for close to 50,000 PAs, representing payment increases of 16 percent and 12 percent, respectively, while physicians saw total payments drop 7.6 percent. Click here for the USA Today report.

  • The American Academy of Family Physicians is calling upon major insurers to revisit how they reimburse for primary care physicians consulting with hospitalists caring for their patients. Click here for details.


Major Post-Acute Care Value-Based Purchasing Bill Introduced

Senior Ways and Means Committee members last week introduced bipartisan legislation that would establish a value-based purchasing program across four setting in Medicare – home health, skilled nursing, inpatient rehab and long-term-care hospitals. To address the geographic variation in post-acute services, the PAC VBP bill focuses performance around one quality metric—the Medicare Spending per Beneficiary measure. The PAC VBP bill establishes a shared incentive pool for the four provider types. All four post-acute settings will compete with each other to earn bonus payments. Click here for a one-page description. Click here for a section-by-section.


Consumer Reports Releases Ratings for Hospital Infections

Consumer Reports’ hospital ratings is out with an updated report that, for the first time, include information on MRSA and C. diff infections, based on data hospitals submit to the CDC. According to their report, three out of 10 hospitals got one of our two lowest scores for keeping C. diff in check; four out of 10 got low marks for avoiding MRSA. Only 6 percent of hospitals scored well against both infections. Click here for the report. Reviewing actual hospital ratings requires a subscription.

  • US News released its 2015-2016 Best Hospitals rankings two weeks ago. Massachusetts General topped the list, edging out the Mayo Clinic. Click here for the 2015-2016 rankings. Click here for the regional rankings.
  • Out of more than 2,200 eligible U.S. hospitals, only 338 made it to this year’s Most Wired list, demonstrating some of the most advanced health IT use and adoption in the nation. Check out the full list of winners here.


Cerner Wins Multi-Billion Dollar Defense Department EHR Contract

The Department of Defense announced last week that Cerner had been awarded a coveted $4.3 billion, 10-year contract to overhaul the Pentagon’s electronic health records for millions of active military members and retirees. Over its potential 18-year life, the contract could be worth just less than $9 billion, officials estimate. Many had predicted that the bid anchored by Epic Systems, considered a titan in the medical-records field, would land the contract. Click here for the story.


HHS OIG: Co-Ops in Trouble

The latest HHS inspector general’s report on health insurance co-ops, which raises questions about the financial viability of the Obamacare start-ups, spotlights half a dozen plans as particularly troubled. The report doesn’t identify the specific plans that are in trouble. The OIG report does compare projected profits — or losses — to the co-ops’ final bottom line for 2014. Just two of the 23 plans beat their projections for their first year of operations: Maine Community Health Options had profits of $5.9 million, surpassing the $1.5 million in losses it had expected. And South Carolina’s Consumers’ Choice Health Plan lost $3.8 million, less than half as much as anticipated. Click here for the report.


Aetna’s Bertolini, Anthem’s Swedish Are Focus of WSJ Article

Did you know that the leaders of the top five health insurance companies used to routinely get together? Well, that group could soon shrink to three as Aetna and Anthem work to merger with the two smaller companies, Humana and Cigna. UnitedHealth Group would remain the largest of the three. The Wall Street Journal has an interesting article that focuses on the two CEOs of the Aetna and Anthem. Click here.


HHS Report: Federal Health Exchanges Positively Impacted Premium Growth

Changes in competition in federal health exchanges affected premium growth in benchmark plans between 2014 and 2015, according to a report released last week by HHS. Premiums for the second-lowest cost silver plan grew an average 2% in the 35 states using the Healthcare.gov platform in both years, HHS said. Click here for the report that provides some state and county specific data.


Mental Health Reform Bill Introduced

Senate health committee Chairman Lamar Alexander (R-TN) and Ranking Member Patty Murray (D-WA) introduced a measure last week to reform mental health care. The Mental Health Awareness and Improvement Act would support improving state and local suicide prevention and intervention programs, as well as child trauma centers. It would also help train teachers and school personnel to recognize and understand mental illness. Click here for a good two-page summary.


US Health Care System Reduces Deaths, Hospitalizations and Costs: Study

The U.S. health care system has scored a medical hat trick, reducing deaths, hospitalizations and costs, a new study shows. Mortality rates among Medicare patients fell 16% from 1999 to 2013. That’s equal to more than 300,000 fewer deaths a year in 2013 than in 1999. Click here for the USA Today story.


CMS Actuary: Historic Slowdown in Health Care Spending Appears to be Over

The historic slowdown in healthcare spending appears to be coming to an end, according to federal data released last week. The amount of money spent on healthcare in the U.S. rose 5.5 percent last year, marking the biggest jump in six years. The data also shows that the growth is likely here to stay, with costs expected to rise each year through 2024. Click here for the news report. Click here for the very good 4-page summary report from CMS’ Office of the Actuary.


PCMH Touted for Savings and Outcomes by Blue Cross Plan

CareFirst Blue Cross Blue Shield is touting big cost savings and improved outcomes after four years of operating its Patient-Centered Medical Home program. Health care costs for more than 1 million members enrolled in the program were $345 million less than projected in 2014 and increased by just 2 percent over the prior year. CareFirst, which does business in Maryland, Washington, D.C. and northern Virginia, has more than 4,300 docs and nurse practitioners participating in the program. Click here for details.

  • Click here for a new detailed RAND study conducted for CMS that says PCMH did not meet its targets and is not likely to generate savings.


Autism Costs Are Skyrocketing: Study

For the first time, health economists have projected the current and future costs of caring for people with autism spectrum disorder in the United States. The prognosis: already astronomical costs will continue to rise unless things change. They estimated that for medical, non-medical, and productivity losses associated with the disorder, autism will cost $268 billion for 2015 and $461 billion for 2025. Click here for more.


CDC Says More Teens Getting Recommended Vaccines

CDC announced last week that more U.S. teenagers were vaccinated against pertussis, meningococcal disease and human papillomavirus-associated cancers in 2014, although HPV vaccination coverage “continues to lag” at both state and national levels. Rates on the three routinely recommended vaccines increased to 87.6 percent with Tdap (for pertussis, also known as whooping cough), from 84.7 percent in 2013, and to 79.3 percent for meningococcal conjugate, from 76.6 percent the previous year, according to data on nearly 21,000 youth ages 13-17. HPV rates also rose — for girls, to 60 percent from 56.7 percent, and for boys, to 41.7 percent from 33.6 percent. Click here for details from CDC.


How a Dentist Could Afford a $50,000 Hunting Expedition

According to official government statistics, the median dentist in the U.S. in 2012 earned $149,310 per year. But that median figure obscures variation around the country and among dentists with different specialties. In some high-priced cities, dentists make a lot of money with non-medical, cosmetic procedures from teeth whitening to botox. And according to the American Dental Association, the average dental specialist earned $283,900 in 2013. Click here for more.