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.