| Los Angeles | San Francisco | San Diego | Washington D.C. | HEALTHCARE FINANCIAL MANAGEMENT ASSOCIATION 2013 Hospital Medicare Reimbursement Policy Update Presented by: JORDAN B. KEVILLE, ESQ. Hooper, Lundy and Bookman, P.C. 310-551-8103 * [email protected]The statements and opinions contained in this presentation represent only the views of Jordan B. Keville
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| Los Angeles | San Francisco | San Diego | Washington D.C. | HEALTHCARE FINANCIAL MANAGEMENT ASSOCIATION 2013 Hospital Medicare Reimbursement Policy Update.
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| Los Angeles | San Francisco | San Diego | Washington D.C. |
Section 7(b)(1)(A) of Pub. L. 110-90 Makes an adjustment to the average standardized amounts in order to
eliminate the full effect of the documentation and coding changes on future payments.
Does not specify when CMS must apply the prospective adjustment, but merely requires CMS to make an “appropriate” adjustment.
Proposing adjustment of -1.9% for FY 2013. Will be final adjustment of this type and will fully offset original projected 5.4% impact
Section 7(b)(1)(B) of Pub. L. 110-90 Requires CMS to make an adjustment in FYs 2010, 2011, and/or 2012 Determined a total recoupment of -5.8 percentage points FY 2012: CMS applied adjustments of -2.9 percentage points FY 2013: CMS eliminated the proposed 0.8% decrease adjustment for
estimated overpayments in FY 2010, and restored the -2.9% adjustment applied in FY 2012
The total adjustment for FY 2013 is a +1.0% increase (-1.9 plus +2.0); worth about $800 million to the industry
ACA Requirements Applies to discharges on and after 10/1/2012; Funded through base operating DRG reductions, 1.0% in 2013,
1.25 % in 2014, 1.5 % in 2015, 1.75 % in 2016 and 2 % thereafter;
In FY 2011 and 2012 IPPS Rules, CMS adopted eligibility criteria, quality measures, quality performance standards and scoring methodology and other rules necessary to implement VBP in 2013 and 2014;
Incentive measures include ACI, HF, pneumonia, certain surgeries, patient experience of care (i.e., HCAHPS survey), hospital-acquired infections and spending per beneficiary;
Incentives distributed by performance score and vary based on score;
Certain hospitals excluded – cited for immediate jeopardy, or too few measures or cases; and
ACA Provisions Fiscal years commencing on and after 10/1/2012; Conditions subject to measure are high value or high volume as
selected by Secretary; Law compares risk adjusted actual and expected readmissions; Excludes readmissions unrelated to prior discharge or planned
readmissions Adjustment factor is the greater of: (a) 1 minus the ratio of
payments for excess aggregate readmissions for a condition to the aggregate payments for such condition admissions (total, not just excess readmissions); or (b) a floor adjustment of .99 for FY 2013, .98 for 2014, for .97 for FY 2015 and thereafter;
FY 2013 proposed rule puts forth policies and data sources needed to calculate the “readmissions adjustment factor”
Applies to base operating DRG payment amounts CMS estimates the program will result in a 0.3% decrease, or $280
million, in payments No significant changes for VBP between Proposed and Final Rule
Hospital Inpatient Quality Reporting Program – IQR Program
(formerly known as RHQDAPU)
No significant changes for FY 2013 CMS using 2013 rulemaking to refine IQR program for future
years For 2015, CMS will collect quality data on a total of 59 measures 17 process and outcome measures would be eliminated 2 claims-based readmission procedures, 1 claims-based surgical
complication measure, and 1 chart-abstracted perinatal care measure will all be added
Current HCAHPS survey would be expanded For 2016, CMS is proposing to retain all 2015 measures, plus add
1 measure for safe-surgery checklist use Hospitals that participate successfully will receive a maximum
FY 2013 Operating Outlier Threshold CMS initially proposed to increase threshold by
22.5% from FY 2012 to $27,425 in FY 2013Amount of increase tied to CMS “concern” about purported
recent increase in inflation of hospital chargesLarge increase to threshold would have significantly
decreased number of cases eligible for outlier payments On June 8, 2012, proposed threshold reduced to
$26,337 based on recognition of data error in initial calculation
In response to feedback from industry, Final Rule moves forward with outlier threshold of approximately $21,000. Likely saved close to $1 billion for hospitals
Changes Affecting Medicare OPPS Payments to Hospitals in 2012,
cont’d
Drugs And Pharmacy Overhead
CMS is proposing to maintain current payment rate covering acquisition and pharmacy overhead cost of separately-payable drugs without pass-through status at average sales price, plus 6.0%
Update to Part A and Part B Rebilling Demonstration
Relates to whether services are properly billed at inpatient or outpatient level
Demonstration project currently in effect through 2014 and allows hospitals to bill Medicare for Part B services, and to be paid at 90.0% of what otherwise would be allowable; hospitals in demonstration agreed to waive appeal rights
In Proposed Rule, CMS is seeking comments for ways of providing more clarity on proper patient status for Medicare reimbursement purposes
CMS concerned about increase in observation services; providers concerned about having inpatient admissions denied as not medically necessary
Increase transfers to the General Fund from the QAF
“Redirect” $150 million of fee revenue in 2012 – 13 from managed care increases used for private hospital supplemental payments to children’s coverage
Redirect $95 million of fee revenue in 2013 – 14 from managed care increases used for private hospital ($75 million) and designated public hospital ($20 million) supplemental payments to children’s coverage
Eliminate $21.5 million in direct grants to designated public hospitals in 2013 – 14 and use for children’s coverage
Rationale: 81% of fee revenue would still be used to fund increased payments to hospitals
Non-Designated Public Hospital (NDPH) Reimbursement
Changes Effective July 1, 2012 through at least December 31, 2013
NDPHs would be reimbursed for inpatient hospital services based on certified public expenditures (CPEs) like Designated Public Hospitals (DPHs) are currently
Eligible to receive safety net care pool payments for uncompensated care to extent additional federal funding is made available
Eligible to receive delivery system reform incentive pool (DSRIP) payments to extent federal funding is made available
Payments beginning July 1, 2012 shall continue under old reimbursement methodology as interim payments until federal approval is obtained
Beginning January 1, 2014, continue CPE methodology for NDPHs certifying voluntary participation if federal approval is obtained and the Director of DHCS certifies continuation of the methodology would be cost beneficial to the state
Project $75 million General Fund savings in 2012 – 13
Proposal is that the general fund portion of NDPH payments that are discontinued will be offset by Safety Net Care Pool (SNCP) and DSRIP payments
State has asked CMS to roll over unspent Health Care Coverage Initiative (HCCI) payments
State to retain 50% of the federal funding attributable to the rollover, about $109 million
State can use DPH’s excess CPEs to extent necessary to achieve $400 million of General Fund savings anticipated in 2010 waiver from certain DPH programs but not realized