IN THIS WEEK’S ISSUE:
- House-Senate Split Over Medicaid
- Ways & Means Health Subcommittee Looks at PFP
- CMS Announces New EMTALA Advisory Group
- CMS Rescinds Transmittal on Medically Unbelievable Edits
- MedPAC: Critical Access Status Increases Medicare Payment for Outpatient Services
- CMS Announces Proposed Changes in the Medicare Advantage Rate, Risk Adjustment Methodologies
- Quick Links
- New in the HFMA Resource Center
1. HOUSE-SENATE SPLIT OVER MEDICAID
On March 17, the Senate passed its budget resolution for FY06, refusing to embrace the House and Administration’s plans to find budget savings in Medicaid. The Senate’s concurrent resolution, S.Con.Res.18, directed that its members involved in reconciling House-Senate differences should not accept spending reductions that would undermine the role of the Medicaid program.
2. WAYS & MEANS HEALTH SUBCOMMITTEE LOOKS AT PFP
On March 15, Rep. Nancy Johnson (R-Conn.), chairperson of the House Ways & Means Committee’s Health Subcommittee, convened a panel to determine CMS’s quality measurement of physician care, with feedback provided on how payment for performance (PFP) might improve Medicare. Chairman Johnson stated, “MedPAC has recommended that Congress vary payment to physicians based on quality. It is time to examine the quality and efficiency of care delivered to our seniors under Medicare, and to begin to develop a system to reward providers differentially based on that quality.”
Kenneth Kaiser, MD, CEO of the National Quality Forum, said PFP is needed to help address the $580 billion annual cost of poor care. Jeffery Rich, MD, chair of the Society for Thoracic Surgeons’ Task Force on Pay for Performance (one physicians’ organization that has developed a PFP approach), advised that greater progress might be made if the OIG and Department of Justice (DOJ) would modify their positions. A CMS demonstration project provided for global payments to hospitals and redistribution to physicians based on performance, but the OIG and DOJ saw Stark violations in that system.
3. CMS ANNOUNCES NEW EMTALA ADVISORY GROUP
CMS appointed a new technical advisory group (TAG) to investigate Emergency Medical Treatment and Active Labor Act (EMTALA) complaints and review regulations regarding hospital and physician responsibility to individuals who come to the hospitals seeking medical treatment. Additionally, the 19-member panel will help CMS develop rules to protect individual rights while relieving undue burden on healthcare providers.
The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) mandates that the TAG include a CMS administrator, HHS inspector general, four representatives of hospitals of which one must be a public hospital, two patient representatives, two CMS regional office staff with experience with EMTALA investigations, one state survey agency representative, one quality improvement organization representative, and seven practicing physicians drawn from different fields. Some of the specialties represented will include emergency medicine, cardiology, orthopedic surgery, neurosurgery, pediatrics, ob-gyn, and psychiatry.
The group will meet at least twice a year. The first meeting is scheduled for March 30 and 31, according to CMS.
4. CMS RESCINDS TRANSMITTAL ON MEDICALLY UNBELIEVABLE EDITS
CMS recalled the February 18, 2005, transmittal on medically unbelievable edits (MUEs). Transmittal 105 instructed fiscal intermediary shared systems and fiscal intermediary contractors to apply the edits to automatically deny claims and adjustments that exceed the criteria contained in the MUE table. CMS said it is temporarily rescinding the transmittal to make adjustments and will publish the new version at a later date.
5. MEDPAC: CRITICAL ACCESS STATUS INCREASES MEDICARE PAYMENT FOR OUTPATIENT SERVICES
Critical access hospitals (CAHs) benefited by expanding better-paying services and reducing less profitable ones, according to a preliminary Medicare Payment Advisory Commission (MedPAC) report. Prior to conversion, many hospitals were facing low volume, high costs, and low margins. However, following conversion to critical access status, Medicare payments and profits margins increased substantially. Overall profit margin of hospitals that switched to critical access status increased to 2.2 percent from negative 1.2 percent between 1998 and 2003. Additionally, eligible hospitals that did not make the switch dropped to an overall margin of negative 0.2 percent from a profit of 2.2 percent in 2003, according to the report.
The commission will also include the following recommendations in the June report to Congress: requiring CAHs to be 15 miles from other hospitals; setting post-acute care rates for CAHs to mirror skilled nursing facility rates; paying CAHs a return on equity rather than a return on cost; and changing to a fixed subsidy reimbursement rather than cost-based reimbursement.
6. CMS ANNOUNCES PROPOSED CHANGES IN THE MEDICARE ADVANTAGE RATE, RISK ADJUSTMENT METHODOLOGIES
CMS recently announced that the Medicare Advantage (MA) capitation rates would be released on April 4, 2005, in accordance with the new timetable established in the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA). Included with proposed changes to the MA, CMS alerted the healthcare community of the proposed payment methodologies for the direct, low-income, and reinsurance subsidies, in addition to the risk sharing methodology for Part D.
There are three attachments to the notice that will be of interest to providers. Attachment I indicates the preliminary estimates of the national per capita MA growth percentage for the minimum percentage increase applied to the MA capitation rates. Attachment II includes the changes in the payment methodology for 2006 for MA organizations. Attachment III provides an overview of payment for MA specific prescription drug plans and Part D plans.
7. QUICK LINKS
PATIENT SAFETY EXECUTIVE LEADERSHIP PROGRAM. The National Patient Safety Foundation and the Healthcare Leadership Alliance, a consortium that includes HFMA, ACHE, ACPE, AONE, HIMSS, and MGMA, are co-sponsoring an Executive Leadership Day on Patient Safety on May 4 in Orlando, Fla. The event precedes the annual NPSF Congress.
OIG POSTS UPDATED EXCLUSIONS AND REINSTATEMENTS. On March 9, the OIG posted to its web site the full updated List of Excluded Individuals/Entities (LEIE) database file reflecting all OIG exclusion and reinstatement actions taken up to and including those taken in February 2005. Individuals and entities that have been reinstated to the federal health care programs are not included in this file.
OIG RELEASES REPORT ON RISK MANAGEMENT. The OIG recently released a final report regarding the need for community health centers to conduct risk management activities aimed at preventing “harm to patients and reducing medical malpractice claims”.
8. NEW IN THE HFMA RESOURCE CENTER--RURAL HOSPITALS
HFMA'S INTERNET GUIDE AND RESOURCES FOR RURAL HOSPITALS. Use this handy guide to find links to useful federal rules, laws, agencies, related organizations, and hfm articles.
HFMA ROUNDTABLE: HOW WILL AMERICA REPLACE ITS RURAL HOSPITALS? Read insights from a banker and three executives from rural hospitals that are replacing aging facilities or have undertaken other construction projects.
Copyright 2005 Healthcare Financial Management Association, all rights reserved. HFMA Express News ISSN: 1540-0689. Volume XII, Number 11.
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