Medicare Payment and Reimbursement

Transparency, Interoperability, DSH Changes Lead Hospital IPPS Concerns

July 9, 2018 9:43 am

Smaller hospitals may be forced to close if interoperability becomes a condition of participation in the Medicare program, warned one national hospital advocacy group.

July 6—Hospital advocates recently raised a range of concerns about proposed Medicare payment policy changes, including transparency and interoperability requirements and a new way to calculate uncompensated care payments.

Despite broad hospital support for the transparency goals behind provisions in the FY19 Inpatient Prospective Payment System (IPPS) proposed rule, advocacy organizations warned that a proposed policy requiring online publication of charge master rates missed the mark.

The Federation of American Hospitals (FAH) noted that many hospitals already comply with that proposed requirement, either voluntarily or to adhere to state law. But the direction of the transparency proposals from the Centers for Medicare & Medicaid Services (CMS) raised concerns. CMS also sought comment on a requirement that providers inform patients of their out-of-pocket costs for a service before the service is furnished.

“CMS should give careful consideration to the best method and data needed to provide patients with the information required to understand potential cost-sharing obligations,” Charles Kahn III, president and CEO of FAH, wrote in a comment letter. “Requiring hospitals to disclose competitively sensitive information, including average or median contracted rates or discounts, would not enable patients to better understand their potential financial liability for services or to accurately compare their likely cost-sharing exposure between hospitals.”

Public availability of the chargemaster list also would be “cumbersome and confusing” for patients and would require dedicated staff and resources to adequately respond to inevitable patient questions, according to another hospital group.

“Sharing patient-specific information on their own out-of-pocket costs is a more accurate and less burdensome use of hospital resources and will lead to less confusion among patients, especially those with complex needs and low health literacy” or low English proficiency, wrote Bruce Siegel, MD, president and CEO of America’s Essential Hospitals.

HFMA’s Patient Financial Communications Best Practices urge providers to inform uninsured patients that the provider will review insurance eligibility and financial assistance options to help them pay for the care they received. The industry guidelines suggest referral to a financial counselor or offering information on available assistance policies and programs.

In a letter to CMS, HFMA noted that many hospitals and health systems post price information for common procedures online or make such information available by phone.

Surprise Bills

Hospital advocates also warned about initiatives to rein in surprise out-of-network bills from physicians, such as anesthesiologists and radiologists, who provide services at in-network hospitals, and unexpected facility fees and physician fees for emergency department visits.

Primarily, hospital advocates urged a focus on insurers, since the so-called surprise bills are seen as stemming from a lack of accurate information from health plans about in-network providers.

Additionally, FAH recommended that CMS combat surprise bills by adopting the surprise-billing section of the National Association of Insurance Commissioners’ (NAIC) Model Act. Among the NAIC provisions is a requirement to limit out-of-pocket costs for patients who receive emergency treatment from an out-of-network provider at an in-network facility to the costs they would owe for an in-network provider. Other provisions call for payer-provider mediation for out-of-network provider bills that are more than $500 over what the patient’s plan pays.

DSH Impact

Another potentially serious concern revolved around Medicare Disproportionate Share Hospital (DSH) payments, which in FY19 will be in the second year of a three-year transition to a new allocation formula. The transition involves increasing the use of Form S-10, and hospital advocates are widely concerned that the form’s data is frequently inaccurate. Broad adoption of S-10 data could mean steep one-year drops in a hospital’s Medicare DSH pay, they said.

And the amount affected by inaccurate data could be significant. CMS estimated that such uncompensated care payments will total $8.25 billion in FY19, accounting for projections that the number of uninsured will increase.

The Association of American Medical Colleges (AAMC) recommended adding another year to the DSH payment formula transition to allow time to prepare for potential losses from the policy change, impose a stop-loss policy to prevent significant losses from the redistribution of uncompensated care funds, and perform a full audit of S-10 data.

“This would allow hospitals to prepare for potential losses due to policy changes,” Janis Orlowski, MD, chief healthcare officer for AAMC, wrote in comments.

Interoperability Requirement

Hospitals also pushed back on a proposal to require hospitals to facilitate the exchange of electronic patient data as one of their conditions of participation in Medicare.

The Catholic Health Association (CHA) noted hospitals already have a strong financial incentive to participate in healthcare data exchange under the Medicare and Medicaid Promoting Interoperability Program (formerly known as the EHR Incentive Program).

And the proposed policy could create insurmountable financial problems for some facilities.

“Smaller, low-volume facilities that may be lagging in meeting meaningful use requirements may be forced to close if interoperability becomes a condition of participation in the Medicare program,” Michael Rodgers, senior vice president for public policy and advocacy at CHA, wrote in comments. “That outcome would not be in the best interest of Medicare beneficiaries and would not result in greater interoperability.”

Supported Changes

The American Hospital Association (AHA) joined other hospital advocates in supporting a range of paperwork reduction efforts included in the IPPS proposed rule.

For instance, AHA’s letter endorsed eliminating 18 measures from hospital programs and removing another 21 duplicate measures.

“The AHA has long urged the agency to reduce and prioritize the measures used in its quality programs so that they focus on the issues that matter the most to improving care and outcomes,” AHA wrote.

AHA also took the chance to praise CMS’s decision to postpone the July update of overall-quality hospital star ratings to allow more time for analysis of the rating system’s methodology and measures, as well as to hear from stakeholders.

“If CMS is intent on continuing to publish star ratings, or something similar in the future, the AHA urges CMS to use notice-and-comment rulemaking (such as the inpatient or outpatient PPS proposed rules) to adopt significant changes to the measures or methodology in star ratings,” AHA wrote.

Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare


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