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Medicare Proposes Tweaking Two-Midnight Rule in Pay Update
Buried in a proposed rule to increase hospital outpatient payment rates by 2.1 percent was a plan to change the much-maligned two-midnight inpatient admissions rule.
The Centers for Medicare & Medicaid Services (CMS) proposed amending requirements implemented in FY14 for physicians to certify to the medical necessity of inpatient services for all inpatient admissions. Certification would be required only for long stays (defined in the proposed rule as 20 days or longer) or cost-outlier cases. CMS would continue to require a written inpatient order as a condition of Medicare payment.
The proposed changes to admission requirements came as hospitals continue to raise concerns about many elements of the two-midnight rule, which mandates that physicians document that they expect the beneficiary to require a stay of at least two midnights and admit the patient based on that expectation.
Sunshine Changes Included in Physician Payment Rule
Medicare's proposed rule on physician payments included a series of changes to recently launched program reporting public reporting of payments physicians receive from third parties.
The open payments program, which annually reports financial relationships between drug and device manufacturers and physicians and teaching hospitals, would undergo changes that include eliminating the reporting exemption for continuing education, according to a proposed rule issued by the CMS. The program currently exempts from reporting payments to speakers at certain accredited or certifying continuing medical education events.
CMS released a proposed rule with comment period updating payment policies and rates for services furnished to medicare beneficiaries in hospital outpatient departments and establishing payments for services furnished in ASCs beginning CY2015. Read HFMA's fact sheet on the proposed rule.
CMS issued a proposed rule June 26 to allow marketplace insurers to contact enrollees and offer them auto-reenrollment in their current plan. The proposal stemmed from the frequent renewals of those with other types of health insurance, such as the 88 percent of Federal Employee Health Benefits Program enrollees who retain their coverage by auto-enrolling in their current plan. But the CMS rule also “strongly encouraged” enrollees in the marketplaces created by the Affordable Care Act to use the open enrollment period as an opportunity to reevaluate how well their existing coverage fits their health coverage needs for the coming year.
Payment policies for both renal disease and home health care were tweaked in proposed rules issued in July by CMS. The proposed rule updating payment policies and rates under the end-stage renal disease (ESRD) prospective payment system for renal dialysis services would introduce new quality and performance measures to the program on Jan. 1, 2015. The changes would aim to improve the quality of care by outpatient dialysis facilities treating patients with ESRD. Another proposed rule issued the same day would implement changes in 2015 to payments for the Medicare home health program.
The Obama administration plans to continue implementation of a plan enabling hospitals to get discounts on some of the costliest drugs, despite a federal court ruling striking down such discounts. The U.S. Department of Health and Human Services Health Resources and Services Administration (HRSA) will continue to allow some hospitals to purchase “orphan drugs” through the 340B drug discount program for conditions other than the rare ones for which the drugs received their orphan drug designation. An HRSA statement noted that although the U.S. District Court for the District of Columbia vacated HHS rules implementing the broader access to discounted orphan drugs, “The court did not invalidate HRSA’s interpretation of the statute.”
The Obama administration continues to struggle with verifying the coverage for many enrollees in the newly launched health insurance marketplaces, according to published reports. The New York Times reported in June that “hundreds of thousands” of enrollees in the government-run marketplaces created by the Affordable Care Act may be required to repay some or all of the subsidies they have received for that coverage. The vast majority of the 8 million marketplace enrollees were expected to have received subsidies to cover most or all of the cost of their insurance. Subsidies were available for enrollees earning up to 400 percent of the federal poverty level.
ANI 2014: Gawande Highlights Need for Finance Leadership
Data and leadership by healthcare finance experts will have the biggest effects on improving quality and cost control in the U.S. healthcare system, according to a leading healthcare researcher and quality improvement expert.
Atul Gawande, MD, a surgeon at Brigham and Women’s Hospital in Boston and researcher on cost and barriers to quality improvement, told attendees at ANI: The HFMA National Institute in Las Vegas this past June that improving the care of and reducing costs for the most expensive patients show the way to improving the overall system.
“It’s still all about the sickest; what we do and whether our systems can care for the sickest in our society,” Gawande said about the 5 percent of patients who account for 50 percent of healthcare spending. “That’s how we fix health care.”
To improve clinical and financial outcomes for the sickest segments of the population, Gawande said, providers and payers should change how the healthcare system interacts with those patients.
HFMA Chair: Lead the Change
“As finance leaders, we are uniquely qualified and have the skills to lead our industry into the future,” HFMA Chair Kari Cornicelli told ANI attendees. “Everyone in this room is a leader. Just think about the power of what one finance leader can accomplish.”
Cornicelli, vice president and CFO of the Sharp Metropolitan Medical Campus in San Diego and a longtime HFMA volunteer and leader, cited the example of a hospital finance leader who revised her organization’s financial assistance policy after reading news coverage about rising local unemployment. Such changes can benefit the people in the community and avert a spike in bad debt.
“We are often in the best position to see if changes are possible, and how we can collaborate to lead those changes, and yes, even make the sacrifices that are sometimes needed,” said Cornicelli, whose theme as HFMA’s 2014-15 Chair is “Leading the Change.”
Oregon Garners Top Chapter Award
HFMA awarded its highest chapter honor—the Robert M. Shelton Award, which recognizes five years of sustained excellence—to the Oregon Chapter during ANI.
“It’s a reflection of the depth of leadership and the passion our Chapter members carry, in terms of the opportunity we have in our Chapter to make it something that we all value and enjoy and grow from,” said Aaron R. Crane, CFO, Salem Health, Salem, Ore., and 2013-14 president of the Oregon Chapter.
Fifer: Transparency Will Drive Accountability, Value
“When acquisitions and affiliations are designed to improve value for care purchasers, they are likely to be well-received,” HFMA President and CEO Joseph J. Fifer, FHFMA, CPA, told healthcare finance professionals at ANI. On the other hand, “Those who would consolidate to gain market power and force higher payment rates in today’s transparent environment are setting themselves up for failure.”
New HFMA Value Project research unveiled at ANI showed a trend toward acquisitions and affiliations that are driven by strategy and value—not by financial need.
The latest Value Project research also identified a healthcare marketplace trend toward mergers between two financially strong organizations, rather than those in which the party with the weaker balance sheet gets acquired by the party with the stronger one.
Publication Date: Friday, August 01, 2014