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Healthcare Financial News - Monday, November 03, 2008

Healthcare Financial News


Monday, November 03, 2008
CMS Announces Final Rule on Medicare Payment Changes for Hospital Outpatient Departments

The Centers for Medicare & Medicaid Services (CMS) has announced a final rule establishing Medicare payment and policy changes for services in hospital outpatient departments (HOPDs) and ambulatory surgical centers (ASCs) for calendar year 2009.

The final rule includes a 3.6 percent annual inflation update for HOPDs. However, with ambulatory payment classification (APC) weight calibrations, a new wage index, and rural adjustment, the average hospital will see a 3.9 percent increase. CMS is estimating that urban hospitals will see a 4.1 percent rise in their HOPD payments, while small rural hospitals could see as little as a 3.4 percent increase.

Other features of the new final rule include:
• The addition of four new quality measures for imaging efficiency, raising from 7 to 11 the number of quality measures that HOPDs must meet in 2009 to receive the full annual payment inflation update. Medicare law requires that the annual update be reduced by two percentage points for certain hospitals that do not meet quality reporting requirements.
• Changes in how CMS pays for imaging services when two or more imaging procedures from an imaging family are provided in one session.  The final rule creates five imaging composite APCs performed in a single hospital session.
• A continuing decline in the amount beneficiaries will pay for outpatient services based on a formula in the Medicare law that is designed to provide a gradual transition to 20 percent coinsurance for all APCs.

CMS projects that hospitals will receive $30.1 billion in 2009 for outpatient services furnished to Medicare beneficiaries, up from $28.5 billion in projected payments for 2008.  Furthermore, CMS expects to make payments of almost $3.9 billion in 2009 to more than 5,100 ASCs that participate in Medicare, compared with $3.5 billion projected for 2008. Read the fact sheet on the final rule.

posted on 11/3/2008 8:45:22 AM (CST)  Permalink   
Study Shows Healthcare Providers Feeling Impact of Consumer-Directed Health Care

Over the past several years, there has been a significant shift in the payment for healthcare services through higher co-pays and deductibles. This shift is creating challenges for healthcare providers as the financial burden of consumer debt falls to them, according to a research study funded by Fifth Third Bank and summarized in a white paper.

Fifth Third Bank surveyed providers and thought leaders throughout the country to understand the impact they see on cash flow and operations as the use of consumer-directed health care (CDH) rises. The creation of CDH plans such as health savings accounts (HSAs) and high-deductible health plans (HDHPs) has changed how many consumers pay for health care. The past year has seen rapid growth due to economic conditions, increased employer adoption, and improved HSA/HDHP plan designs. A key stakeholder in this new environment is the provider.

While the research indicates the impact of CDH varies geographically, participants agree the CDH momentum is building. All research participants agree they must adapt their people, processes, and technologies or risk a negative cash flow impact. Other issues cited by research participants include price transparency, lack of consumer HDHP understanding, under-trained frontline staff, outdated legacy systems, public relations sensitivity, inadequate payer communication, and limited front-end payment tools.

posted on 11/3/2008 8:42:26 AM (CST)  Permalink