Readmissions Reduction Program Results Overstated?

A new study suggests that the encouraging results of Medicare’s hospital readmissions reduction program may not actually be as encouraging as people thought.

According to a new study published in the journal Health Affairs, data on reduced readmissions may be more the result of changes in hospital coding practices than improved quality performance by hospitals.

The report suggests that new industry standards for reporting were implemented at roughly the same time Medicare launched the value-based purchasing program and may account for most or even all of the reported improved performance by hospitals.

Learn more from the Health Affairs study “Decreases In Readmissions Credited To Medicare’s Program To Reduce Hospital Readmissions Have Been Overstated.”

CMS to Create New Office for Regulatory Reform

In 2019 the Centers for Medicare & Medicaid Services intends to create a new office to address regulatory reform.

CMS administrator Seema Verma recently announced her intention to create this office, but other than saying its priority would be to reduce regulatory burden, offered no details.

See a brief notice about the new office here.

HHS Gives States New Options for Medicaid-Covered Behavioral Health Treatment

The U.S. Department of Health and Human Services has informed state Medicaid programs that it is giving them new opportunities to pay for hospitalization to care for recipients with behavioral health problems.

For years Medicaid has greatly limited the ability of state Medicaid programs to pay for inpatient care for many behavioral health problems – a limit commonly known as the IMD (institution of mental disease) exclusion.  Earlier this year the Centers for Medicare & Medicaid Services eased this long-time limit, announcing that it would make it easier for states to secure waivers from it.  CMS has announced in a formal guidance letter to state Medicaid directors that it is extending this policy, according to a CMS news release, which explains that the agency offers

…both existing and new opportunities for states to design innovative delivery systems for adults with serious mental illness (SMI) and children with serious emotional disturbance (SED).  The letter includes a new opportunity for states to receive authority to pay for short-term residential treatment services in an institution for mental disease (IMD) for these patients.  CMS believes these opportunities offer states the flexibility to make significant improvements on access to quality behavioral health care.

Under this new approach, states are invited to develop new delivery systems for serving patients with behavioral problems, and especially substance abuse disorders, that make greater use of inpatient behavioral health services and to receive federal Medicaid matching funds for pay for this care – something that has been greatly limited in the past.  In offering this opportunity, CMS notes that a number of states that have already obtained waivers from the IMD exclusion since its easing of the limit on such waivers earlier this year and are already showing encouraging results in their battle against opioid abuse.

Learn more about this new policy, its intentions, and how it will work in this CMS news release or go here to see the CMS guidance letter to state Medicaid directors.

CMS Proposes New Medicaid Managed Care Regulation

Just two years after a major overhaul of Medicaid managed care regulations, the Centers for Medicare & Medicaid Services is again proposing changes in how the federal government regulates the delivery of managed care services to Medicaid beneficiaries.

Under the newly proposed regulation, states would:

  • be free to implement more changes in their managed care programs without seeking federal permission;
  • have slightly more flexibility in how supplemental payments are made to hospitals through managed care plans and implement some such changes without federal approval;
  • be permitted to redefine what constitutes an adequate provider network for managed care plans; and
  • not be required to publicize beneficiary grievance and appeals processes as prominently as they currently do.

Overall, the proposed regulation appears to help managed care insurers a great deal, states a little, and hospitals barely at all.  It also could have serious implications for private safety-net hospitals, most of which are located in states that employ managed care in their Medicaid programs.

Stakeholders have until January 14 to submit formal comments about the proposal to CMS.

To learn more about the proposed Medicaid managed care regulation, go here to see CMS’s news release presenting the regulation, go here to see a more detailed CMS fact sheet, and go here to see the proposed regulation itself.

House Members Protest Site-Neutral Payment Proposal

138 members of the House of Representatives have written to Centers for Medicare & Medicaid Services administrator Seema Verma to protest CMS’s proposal to extend Medicare outpatient site-neutral payment policies to off-campus, provider-based outpatient departments specifically exempted from such policies by Congress under the Bipartisan Budget Act of 2015.

In questioning CMS’s rationale for the proposed policy, the House members wrote that

It is unclear how CMS has deemed all of the OPD [outpatient department] services at the grandfathered off-campus HOPDs [hospital outpatient departments] as cause of an unnecessary increase in volume of OPD services, and we ask you to provide clarity on this when making these payment changes.

The House members also wrote that

The agency has also proposed cutting payment to 40 percent of the current HOPD rate for grandfathered off-campus HOPDs that begin to furnish a new service from a clinical facility not offered prior to November 1, 2015 which could unfairly penalize grandfathered off-campus HOPDs that expand or diversify the critical services they offer to meet the changing needs of their patients.

In a formal response to the proposed regulation, NAUH expressed much the same sentiment, maintaining that the regulation, if adopted, could detract from the ability of private safety-net hospitals to serve their communities. See that letter here.

Go here to see the House letter.

MedPAC Meets

Last week the Medicare Payment Advisory Commission met in Washington, D.C. to discuss a number of Medicare payment issues.

The issues on MedPAC’s October agenda were:

  • managing prescription opioid use in Medicare Part D
  • opioids and alternatives in hospital settings: payments, incentives, and Medicare data
  • Medicare payment policies for advanced practice registered nurses and physicians
  • Medicare’s role in the supply of primary care physicians
  • Medicare payments for services provided in inpatient psychiatric facilities
  • episode-based payments and outcome measures under a unified payment system for post-acute care
  • Medicare policy issues related to non-urgent and emergency care

Go here for links to the policy briefs and presentations that supported MedPAC’s discussion of these issues.

MedPAC is an independent congressional agency that advises Congress on issues involving the Medicare program.  While its recommendations are not binding on either Congress or the administration, MedPAC is highly influential in governing circles and its recommendations often find their way into legislation, regulations, and new public policy.

Senators Ask CMS to Back Off Medicare Outpatient Proposal

Nearly half of the members of the Senate have written to CMS asking the agency to withdraw its proposal to make more Medicare outpatient payments on a site-neutral basis.

In the letter, 48 senators note that in the 2015 Bipartisan Budget Act Congress specifically directed that CMS grandfather certain existing hospital-based off-campus outpatient facilities from CMS efforts to make more outpatient payments on a site-neutral basis.  The proposed regulation, however, would affect those very facilities.

NAUH made much the same point in its September letter to CMS expressing its opposition to this aspect of the agency’s proposed 2019 outpatient prospective payment system regulation.

Go here to see the senators’ letter to CMS.

 

Medicare Site-Neutral Outpatient Payment Proposal Would Have Disproportionate Impact

The Centers for Medicare & Medicaid Services’ proposal to make more Medicare outpatient payments on a site-neutral basis would significantly cut Medicare’s overall outpatient spending but most of that cut would be borne by just a few hospitals.

A report prepared for the Integrated Health Care Coalition concluded that

…CMS’ Off-Campus Site-Neutral Proposal in the FY 2019 CMS OPPS [note:  outpatient prospective payment system] NPRM [note:  notice of proposed rulemaking] will disproportionate affect about six percent of 3,333 hospitals that participate in the program.  200 hospitals will shoulder 73 percent of the proposed payment reductions….For the top 200, the average reduction will be 5.5 percent.  For the remaining hospitals, the reduction will be 0.5 percent.

Last month NAUH conveyed its strong opposition to this proposal in a formal comment letter to CMS.

Learn more about the CMS proposal and its potential implications in this story in Becker’s Hospital Review or go here to see the complete analysis.

New Approach to Readmissions Program Takes Effect

Medicare’s hospital readmissions reduction program is moving in a new direction beginning in FY 2019 after Congress directed the Centers of Medicare & Medicaid Services to compare hospitals’ performance on readmissions to similar hospitals instead of to all hospitals.

The policy change, driven by a belief that safety-net hospitals were harmed by the program and excessive penalties because their patients are more challenging to serve, results in all hospitals being divided into peer groups based on the proportion of low-income patients they serve.  The readmissions performance of hospitals is then compared only to other hospitals within each peer group.

As a result of this new approach, readmissions penalties against safety-net hospitals are expected to decline 25 percent in FY 2019 while the average penalty for hospitals serving the fewest low-income patients will rise.

NAUH was one of the leading proponents of this major change in how the readmissions reduction program treats hospitals.

Kaiser Health News has published a detailed story describing the policy change and its implications for hospitals, which face penalties of up to three percent of their Medicare revenue for what is considered “excessive” readmissions of Medicare patients within 30 days of their discharge from the hospital.  Included in the article is a searchable database of every hospital in the country that lists the peer group for each hospital, its FY 2018 and FY 2019 readmissions penalties by percentage of Medicare revenue, and the change in readmissions penalty expected from FY 2018 to FY 2019.  Go here to see the article “Medicare Eases Readmission Penalties Against Safety-Net Hospital.”

New Approach to Readmissions Program to Take Effect October 1

Medicare’s hospital readmissions reduction program will move in a new direction beginning in FY 2019 after Congress directed the Centers of Medicare & Medicaid Services to compare hospitals’ performance on readmissions to similar hospitals instead of to all hospitals.

The policy change, driven by a belief that safety-net hospitals were harmed by the program and excessive penalties because their patients are more challenging to serve, results in all hospitals being divided into peer groups based on the proportion of low-income patients they serve.  The readmissions performance of hospitals is then compared only to other hospitals within each peer group.

As a result of this new approach, readmissions penalties against safety-net hospitals are expected to decline 25 percent in FY 2019 while the average penalty for hospitals serving the fewest low-income patients will rise.

NAUH was among the loudest and most persistent voices calling for reform of the program to better reflect the special challenges private safety-net hospitals face in working to prevent the readmission of their low-income Medicare payments to the hospital.

Kaiser Health News has published a detailed story describing the policy change and its implications for hospitals, which face penalties of up to three percent of their Medicare revenue for what is considered “excessive” readmissions of Medicare patients within 30 days of their discharge from the hospital.  Included in the article is a searchable database of every hospital in the country that lists the peer group for each hospital, its FY 2018 and FY 2019 readmissions penalties by percentage of Medicare revenue, and the change in readmissions penalty expected from FY 2018 to FY 2019.  Go here to see the article “Medicare Eases Readmission Penalties Against Safety-Net Hospital.”