CMS Proposes Hospital Payment Rule for 2014

The Centers for Medicare and Medicaid Services (CMS) posted a rule on Friday raising the hospital payment amounts for Medicare patients. According to the rule, which is set to be published in the Federal Register on May 10^th, hospitals could get a net rate increase of 0.8 percent next fiscal year; beginning on October 1, 2013.

The determining factor for who receives the increase will be participation in the quality reporting program developed by CMS. According to an article in CQ, hospitals that fail to successfully participate in the program will not only lose out on the 0.8 percent increase, but could also be penalized equal to a two percent reduction in the proposed payment increase.

The quality reporting provisions are a step in the new patient safety program, a provision of the Affordable Care Act that will be launched in fiscal year 2015.

The 0.8 percent increase was calculated by a formula, starting with a 2.5 percent increase in the costs of goods and services in hospitals. That number was then adjusted for various reasons including required reductions by law, and recovering previous overpayments to hospitals totaling $11 million.

Overall, the percentage of increase on reimbursements for both operating and capital payments is expected to cost an additional $27 million. That additional money will come from a pool of $1.1 billion dollars that was created around the new Value Based Purchasing Plan. Under the plan, Medicare inpatient hospital payments were cut to all facilities by 1.25 percent. Hospitals and facilities can earn back this money, along with up to the 0.8 percent more, by performing well according to the standards.

These standards include two sets of measurements, one consisting of how well hospitals perform according to six patient safety measures, and the other consisting of patient infection rates.

The proposal can also penalize hospitals for high readmission rates. NAHAM previously reported on this at penalties of up to one percent for 2013. The penalty will be raised up to two percent in fiscal year 2014. 

CMS Administrator Nomination Stalled

The nomination of Marilyn Tavenner to be Administrator of the Centers for Medicare and Medicaid Services was stalled on the Senate floor Wednesday after Senator Tom Harkin (D-IA) placed a hold on it. Senators are allowed to use this parliamentary procedure to prevent a motion from reaching the floor.

Senator Harkin’s office referred to testimony by Health and Human Services (HHS) Secretary Kathleen Sebelius as the reason for the hold. Sebelius testified before the Senate Appropriations Labor-HHS-Education Subcommittee that funds for the prevention section of the Affordable Care Act are being used to promote the insurance marketplaces. Harkin responded at the hearing by stating ““Robbing prevention when we know these efforts can improve people’s health and lower health care costs goes against the very mission of health care reform.”

Tavenner has been Acting Administrator as CMS since late 2011, previously serving as a nurse, hospital executive, and Virginia secretary of health and human services. According to CQ, CMS has not had a senate confirmed administrator in seven years. 

It’s Never Too Soon for Advance Care Planning

Mere days after National Healthcare Decision Day, CQ published an op-ed on the topic of advanced planning from Don Schumacher, president and CEO of the National Hospice and Palliative Care Organization. Advance care planning has more and more been the topic of conversation in recent years, brought to light by both the aging baby boomer generation, and by news coverage of families fighting for control over end of life decisions.

In his op-ed, Schumacher points out that “year after year, we take the time to arrange family vacations, save for retirement and even plan what next year’s garden will look like. Why, then, wouldn’t we allot similar time to discussing and deciding what we want in our last months of life?”

According to some recent estimates cited in the op-ed, nearly 20 percent of those in hospice care are under the age of 65. The stark reality highlights that individuals cannot wait to plan until they are ready, because that time may not come until it is too late.

Right now, there are bills in the House and the Senate that would increase the palliative care faculty and training at educational institutions across the country. There is also a bill, the Personalize Your Care Act of 2013, which would provide many citizens with healthcare coverage for advanced planning.

The conversations don’t have to be hard, says Schumacher. There are resources available to help facilitate the conversations in whatever context they occur, from legal to spiritual. Advanced planning also alleviates the burden among family who may argue about the best course of treatment if no preferences are expressed.

See NAHAM News’ original coverage of National Healthcare Decision Day here. 

FDA Releases new Patient Network Website

The Food and Drug Administration (FDA) released a new website on Wednesday designed to further the agency’s efforts to “engage patients on policies and decisions that they may be affected by.” The launch of the FDA Patient Network website was announced via a press release that begin with a statement from FDA Commissioner Margaret Hamburg.

Commissioner Hamburg announced both the launch of the website, and the website slogan; “Get Informed. Get Involved. Help FDA Help Patients Have a Bigger Voice.” The slogan is designed to mimic the website, according to the Commissioner, touting the enhanced ability that patients now have to communicate with the FDA. The website will provide interactive ways for patients, patient advocates, and consumers to track medications from inception to sale. The website will also offer live chats with agency officials where users can ask questions about medications and share concerns about ongoing drug development or FDA regulations.

The Patient Network website will also feature a “get involved” page which offers several interactive functions including e-newsletter signup, live chats, a calendar of public meetings, webinars on medical product regulation, a clinical trial search, and information on how to apply to the FDA Patient Representative Program.

You can visit the website here.

States Face Medicaid Decisions

States are beginning to grapple with questions coming out the last year’s Affordable Care Ace (ACA) Supreme Court decision on. While the Court upheld the majority of the law, it struck down the mandatory expansion of the Medicaid program. As a result, each individual stare must now contemplate to costs and rewards associated with expanding their state program with help from the federal government. The ACA set new standards for enrollment eligibility, opening the program to many who did not previously qualify. New enrollees that came in under this expansion, however, face different standards from those currently enrolled, essentially creating two broad groups. This is according to a CQ article.

Under the expansion, states can charge newly eligible beneficiaries more than the minimal amounts allowed in the traditional program —“up to 20 percent of the cost of services for people with incomes above the federal poverty level, which is $11,490 for an individual in 2013.” States and the federal government then pay for the remaining service costs. Even though Medicaid is a state by state program, CQ reports that the federal government, via the Centers for Medicare and Medicaid Services (CMS), reimburses states for 57 percent of the Medicaid treatment costs on average.

To the states, expansion means that the program will be open to more members because of new enrollment criteria, bringing the state on the hook for more costs. On the other side, however, expansion also means a lot of funding from the federal government. The ACA provides full finding for all new enrollees during the first three years of the expanded program in any state, and only phases back up to 10 percent after that, ending up at 90 percent of funding by 2020.

States also have to weigh the costs of creating new plans, as they cannot just have new enrollees chose from existing Medicaid plans if these plans do not include 10 essential benefit categories that are require to be eligible for funding under the ACA. The decision is a balancing act between the costs of new enrollees and plans verses the amount of federal dollars that are associated with expansion. For the time being, CQ reports that most states are waiting for CMS to issue more final guidance rules before making a decision. CMS currently has a draft guidance rule published for comments.

Hospitals Question Medicare Rules on Readmissions

As NAHAM News reported in November, part of the Affordable Care Act (ACA) curbs hospital reimbursement rates based on readmission statistics (Curbing Medicare Spending begins with Hospital Readmission).  A few months after implementation, a growing number of hospitals and interest groups are beginning to question the fairness of the policy.

Under the policy, hospitals face penalties for readmitting patients they have already treated, based on the idea that many readmissions result from poor follow-up care. The theory is that lowering readmissions makes for cheaper and better care in the long run, and helps patients stay healthy as opposed to being readmitted for another Medicare funded hospital stay. To comply, hospitals have implemented new procedures both in and out of the facility. Some call patients within 48 hours of discharge to check up on them, others schedule a follow up appointment before the patient is discharged, still others have redoubled their efforts to ensure that patients understand their medication schedule.

The Medicare program reports that nearly two-thirds of hospitals receiving traditional Medicare payments are expected to pay readmission penalties this year, totaling about $300 million. Last month, however, Medicare reported that readmissions had dropped to 17.8 percent by the end of last year, down from 19 percent in 2011.

Critics argue that these penalties unfairly target hospitals with the sickest or poorest patients, and that mortality rates are not properly taken into account. As one doctor put it in a New York Times article, “dead patients cannot be readmitted”, but alive and sick patients can. Critics say that readmissions are tied to social or economic factors; poor patients may not be able to afford medication, have a bed to recover in, or a car to get to follow up appointments.

Despite the criticisms, the changes by hospitals and the decrease in readmission rates is exactly what the policy intended. There will likely be hiccups along the way, but Medicare is hoping to save money and improve care in the long term.

National Healthcare Decision Day

Today, April 16, 2013, is National Healthcare Decision Day (NHDD); a collaborative initiative started in 2008 to raise awareness and highlight the importance of advanced care planning. The program encourages patients to document their advanced care wishes and put in place a framework for care that can be used if they are no longer able to voice their personal decisions.

Included in the events for today are various rallies and panels around to country, designed to educate and mobilize state and local organizations, healthcare providers, and other key stakeholders. The NHDD initiative is focused on making sure that all adults with decision making capacities have the information and opportunities needed to communicate and document their healthcare decisions.

The initiative hosts a website, www.nationalhealthcaredecisionday.org or www.nhdd.org, with information and resources that individuals can use to help ensure that any future care is within their wishes. According to that website, 90% of Americans have heard of a living will, 71% of Americans have thought about their end of life preferences, but only 29% of Americans currently have a living will.

Advanced directives are also an area of focus in NAHAM’s recently released CMS Toolkit, available to members here. Along with issues like charity care and patient abuse, advanced directives are a topic that the Centers for Medicare and Medicaid Services (CMS) has published guidelines on.

For information on today’s events, you can visit the NHDD Facebook page here. 

President Obama’s Budget Proposes Cuts to Medicare

Yesterday, President Obama sent the first budget of his second term to Congress. While some Republican members have called the proposal “dead on arrival” due to proposed increases in revenue, others were intrigued by the cuts to entitlement programs that were in budget.

Specifically related to the healthcare industry, the budget decreased Medicare spending by almost $400 billion over 10 years, but also increased the overall budget for the Department of Health and Human Services (HHS) for the next fiscal year, largely for implementation of the Affordable Care Act.

MedPageToday reports that the Medicare spending decrease is due to program savings, achieved primarily in two ways. First, HHS would increase the Medicare premiums paid by wealthy seniors. Secondly, the agency would negotiate “lower prices for prescription drugs bought by dual eligibles, or Medicare beneficiaries who are also eligible for Medicaid.” This negotiation may force some Medicare beneficiaries to swap out name brand prescription medications for generic alternatives, but the bulk of the hit would be to drug companies and other healthcare providers.

President Obama’s budget proposal seemed to strike a middle ground between plans already released by the Republican controlled House and the Democrat controlled Senate. The Medicare spending in the President’s budget, for example, was $4 billion less than the Senate plan and $15 billion more than the House plan. More comparisons can be found in this Washington Post article.

Some other highlights of the budget proposal include $31.1 billion for the National Institutes of Health to fund, among other things, HIV/AIDS research and the newly announced BRAIN Initiative, and $11.3 billion for the CDC and the Agency for Toxic Substances and Disease Registry.

The budget released yesterday is just a proposal, and will likely change through negotiations in order for it to be passed by both the House and the Senate. Any budget passed now will go into effect for Fiscal Year 2014, beginning on October 1^st of this year. 

NAHAM Releases New CMS Toolkit

As a follow up to the well-received Joint Commission Toolkit, NAHAM unveiled a new toolkit this week to help hospitals prepare for visits from the Centers for Medicare and Medicaid Services (CMS). The CMS Toolkit was put together by the Policy Development and Government Relations Committee, and is based both on CMS audit policy, and on real world experiences from those committee members that have been through CMS audits in the past.

The toolkit, available to NAHAM members, is broken down into five sections, beginning with CMS Survey Toolkit elements. This section includes a preparedness checklist, question sets, case studies, and scenarios (still to come). The second section gives an overview of the CMS survey and links to the conditions of participation and standards, and the state operations manual.

Section three offers members resources on nine areas of focus including patient’s rights, patient abuse, physical environment, infection control, medical necessity, Medicare secondary pater education, advance directives, charity care, and the emergency medical treatment and labor act (EMTALA).

Sections four and direct members to different online resources both through the CMS, and through other organizations.

The toolkit is the latest in a wide variety of resources that NAHAM offers members. The toolkit is available on the website, and can be found here. 

The Joint Commission Warns of Alarm Fatigue

Medical alarms are meant to alert caregivers and healthcare providers to patient problems so that they can be solved. This isn’t always the case, however, according to an alert issued on Monday by the Joint Commission.  This “alarm fatigue,” as it is being called, poses a serious health risk to patients and the Joint Commission is urging hospital personnel to take a look at the issue.

The constant beeping of multiple devices, on multiple patients, at the same time, could lead to staff desensitization to the alarms, turning them into just background noise. If a staff member does acknowledge the alarms, may disable the beeping for the future, or miss some warnings that are difficult to hear when there are other alarms going off. According to the Food and Drug Administration (FDA) database, there have been over 560 patient alarm-related deaths over the past four years. The Joint Commission database includes 80 fatalities and 13 serious injuries related to alarms over a similar time period.

To help with this issue, the Joint Commission, along with the Association for the Advancement of Medical Instrumentation (AAMI) and the ECRI Institute, recommend that organizations:

·         Ensure that there is a process for safe alarm management and response in areas identified by the organization as high risk.

·         Prepare an inventory of alarm-equipped medical devices used in high-risk areas and for high-risk clinical conditions, and identify the default alarm settings and the limits appropriate for each care area.

·         Establish guidelines for alarm settings on alarm-equipped medical devices used in high-risk areas and for high-risk clinical conditions; include identification of situations when alarm signals are not clinically necessary.

·         Establish guidelines for tailoring alarm settings and limits for individual patients. The guidelines should address situations when limits can be modified to minimize alarm signals and the extent to which alarms can be modified to minimize alarm signals.

·         Inspect, check and maintain alarm-equipped medical devices to provide for accurate and appropriate alarm settings, proper operation, and detectability. Base the frequency of these activities on criteria such as manufacturers’ recommendations, risk levels and current experience.

The Joint Commission also recommends staff training, and is considering creating a National Patient Safety Goal to address the issue. The Joint Commission Alert can be found here. 

Mortality Rates Climbing at Critical Access Hospitals

A recent study published in the Journal of the American Medical Association found that mortality rates are on the rise at rural hospitals. According to a Kaiser Health News article, the study found that since 2002, mortality rates at critical access hospitals for Medicare patients with heart attacks, heart failure and pneumonia have increased in relation to other hospitals.

While mortality rates at other hospitals dropped by 0.2 percent a year, reaching 11.4 percent in 2010, mortality rates at critical access hospital rose about 0.1 percent each year, reaching 13.3 percent in 2010. Critical access hospitals also did worse than other small, rural hospitals that were not in the critical access program.

Critical access hospitals refer to hospitals enrolled in the federal government’s critical access program, which was started by Congress in 1997 to keep hospitals from closing in areas where residents would have no other place to go in an emergency. Hospitals enrolled in the program benefit from full reimbursement, plus one percent, for the costs of treating Medicare patients. They are also exempted from certain financial pressures and requirements to report patient outcomes.

Rural health organizations point out that these critical access hospitals often operate under more challenging conditions than others. Critical access hospitals are less likely to have the latest medical technology or specialists, and that their populations are increasingly elderly and sick.

Groups on both sides of the issue seem to agree that no matter the reason, this study may be a sign that the hospitals may need additional help in the future.  

Some Urge HHS to extend EHR Safe Harbor Rule

Lawmakers and certain interest groups are urging the Department of Health and Human Services (HHS) to extend certain “safe harbor” rules allowing hospitals to share electronic health record (EHR) software with referring physicians. Anti-kickback laws normally make it illegal to take actions intended to influence referrals for Medicare patients, according to ModernHealthcare.com, but the Centers for Medicare and Medicaid Services (CMS) established the Stark exception to allow hospitals and medical labs to donate EHR software to physicians who might otherwise not invest the money to switch to electronic records.

With the exception set to expire at the end of the year, the Federation of American Hospitals sent a letter to HHS in February, naming the extension of the EHR exceptions its top priority. The trade group urged regulators to extend the exceptions through 2016, when federal grants to encourage EHR adoption are set to end.

Rep. Jim McDermott (D-Wash.) also sent a letter to HHS last month. In his letter, Rep. McDermott urged the agency to extend exceptions soon “so that providers have the certainty that they need to continue engaging in efforts designed to promote care coordination. The safe harbor created…encourages collaboration among providers, yet also contains rigorous requirements that providers must meet in order to protect the Medicare and Medicaid programs from the few unscrupulous providers who would donate electronic health record software in exchange for referrals.”

The EHR exception, along with another “safe harbor” rule, are currently under review by the Office of Management and Budget (OMB). Experts believe that the exceptions will be extended before their expiration at the end of the year.

CMS Releases Medicare Advantage Rates for 2014

Yesterday was the deadline for the Department of Health and Human Services (HHS) to release the Medicare Advantage Rates for 2014. In past years, the agency used the sustainable growth rate (SGR) formula to determine the increase or cut in reimbursement rates for private insurers participating in the Medicare Advantage plans. For the past 11 years, however, Congress has acted to override the scheduled SGR when it suggested a reduction in physician fees.

In response to the upcoming deadline, 98 member of Congress urged the agency to make funding recommendations based on the assumption that Congress would act to stop any proposed rate cuts.This letter was backed up by a Congressional Research Service (CRS) memo stating that “at this point in time, given 11 years of consistent congressional action to override the physician fee schedule reduction, along with the increasing magnitude of the required SGR reduction, the foreseeability of congressional action makes such an assumption both authorized and reasonable.” The memo also provided CMS with justification if the rate proposals were determined without taking the assumption into account.

If the Centers for Medicare and Medicaid Services (CMS) proceeded under current law, as they have in the past, the SGR proposed rates would cut reimbursements cuts at or above two percent. 

CMS and the Administration responded to the letter and the CRS memo by preemptively assuming Congressional action, and for the first time not issues guidance based on the SGR. According to CQ, CMS decided to grant a 3.3 percent payment increase to insurers in the plan, in sharp contrast to early reports that they would cut rates by 2.2 percent. In addition, CMS lowered the deductible for the Part D prescription drug plan for the first time in history. The projected deductible for 2014 will be $310, a decrease from $325 in 2013.

The decision seemed to satisfy both members of Congress and interested groups who were concerned about rate cuts. Some of those groups saw this as an example to call for an end to the use of the SGR formula.