Congress Pursues Post-Acute Care Reform

Members of Congress are working to improve the manner in which Medicare pays for post-acute care for seniors.

Pursuing an area that MedPAC, which advises Congress on Medicare payment issues, has cited as in need of improvement and reform, a bipartisan group of senators and representatives solicited input from stakeholders and has now published a “discussion draft” of legislation that focuses on policy changes and standardized assessment data.

Among the post-acute-care providers addressed that could be affected by reform are home health agencies, long-term care hospitals, inpatient rehabilitation facilities, and skilled nursing facilities.

US Capitol DomeMany private safety-net hospitals offer various post-acute-care services.

The draft legislation would require Medicare to collect data so it can compare the quality of care delivered by the different provider types and help inform both discharge planning and Medicare payment policies.  Currently, it has been noted, there are circumstances under which Medicare pays different providers different amounts for the same kinds of care.

Learn more about the bipartisan discussion draft and the thinking behind it in this CQ HealthBeat article presented by the Commonwealth Fund and find the discussion draft itself here.

CMS Finalizes 2015 Qualified Health Plan Criteria

The federal Centers for Medicare & Medicaid Services (CMS) has issued a letter to insurers describing the provider networks insurers will need to be certified as qualified health plans in the federally facilitated marketplace in 2015.

cmsThe final criteria emphasize creating networks that include providers that can help insured members obtain mental health and substance abuse services.  Insurers also will be required to include at least 30 percent of the “essential community providers” located in their area within their provider networks.  Essential community providers include critical access hospitals, federally qualified health centers (FQHCs), children’s hospitals, and others.

Among those essential community providers are disproportionate share hospitals – a vital consideration for NAUH and private safety-net hospitals, all of which are disproportionate share hospitals.

See CMS’s final letter to insurers on qualified health plan criteria here.

NAUH Endorses Medicare Bill

The National Association of Urban Hospitals has endorsed H.R. 4188, the Establishing Beneficiary Equity in the Hospital Readmissions Program Act.

NAUH LogoThe bill, sponsored by Rep. Jim Renacci (R-Ohio) and introduced just last week, would add a risk adjustment component to Medicare’s hospital readmissions reduction program.  NAUH has long advocated such an addition, maintaining that many of the low-income patients private safety-net hospitals serve are fundamentally harder to treat than the typical hospital patient and that safety-net hospitals are unfairly targeted for financial penalties by the program.  Several recent studies support NAUH’s view.

See NAUH’s letter of endorsement for the bill here, on NAUH’s web site.  Find the bill itself here.

Bill Would Modify Medicare Readmissions Program

New legislation introduced in Congress would add a risk adjustment component to Medicare’s hospital readmissions reduction program.

Under H.R. 4188, the Establishing Beneficiary Equity in the Hospital Readmission Program Act, hospitals’ performance in preventing Medicare readmissions would be risk-adjusted for patients who are dually eligible for Medicare and Medicaid; for patients who are considered non-compliant; for patients whose readmission has been classified as based on psychosis or substance abuse; and for patients who have specific medical conditions.

US Capitol DomeHospitals found to have too many Medicare readmissions suffer financial penalties under the program.

The National Association of Urban Hospitals (NAUH) has long maintained that the program is unfair to private safety-net hospitals because it fails to reflect the more medically and socially challenging patients such hospitals serve and has advocated adding a risk adjustment component to the program.

Learn more about the bill from this news release from its sponsor, Rep. James Renacci (R-Ohio), or find the bill itself here.

NAUH Urges Senate to Protect Urban Safety-Net Hospitals

With the Senate Finance Committee looking for ways to pay for a permanent solution to the Medicare sustainable growth rate formula (SGR) challenge, the National Association of Urban Hospitals has asked the committee’s members to reject any proposal to pay for that solution with further cuts in Medicare and Medicaid payments to private safety-net hospitals.

See NAUH’s message to Senate Finance Committee members here.


Increase Use of Value-Based Purchasing, HHS Told

A study performed for the U.S. Department of Health and Human Services calls for greater use of value-based purchasing in federal health care reimbursement policy.

The study, performed by the RAND Corporation, recommends developing a national value-based purchasing strategy; developing a more deliberate approach to evaluating the effectiveness of value-based purchasing efforts; and developing performance measures that support value-based purchasing approaches.

Hospital SignSuch an approach could be a major challenge for private safety-net hospitals, according to a Harvard School of Public Health analysis that found that in the first year of Medicare’s value-based purchasing program, hospitals that served the largest numbers of low-income patients suffered the largest financial penalties from that program.

Read more about the RAND study in this Fierce Healthcare story and find the RAND study itself here.  Read another Fierce Healthcare article about the impact of value-based purchasing on safety-net hospitals here.

President Presents Proposed FY 2015 Budget

Yesterday the Obama administration unveiled its proposed FY 2015 federal budget.

NAUH LogoThe spending plan addresses a number of key matters for private safety-net hospitals, including proposed cuts in Medicare bad debt reimbursement, graduate medical education payments, market basket updates for selected providers, and more.

It also proposes increased spending to train more health care providers and to extend enhanced Medicaid primary care payments for another year.

The National Association of Urban Hospitals (NAUH) has prepared a memo summarizing the proposed budget with an emphasis on the issues most important to private safety-net hospitals.  To request a copy of that memo, please hit the “contact us” link here, on the home page of the NAUH web site.


New Approaches to Serving Dual Eligibles Set to Launch

Provisions in the Affordable Care Act that encourage states to take new approaches to serving their dually eligible residents – low-income seniors eligible for both Medicare and Medicaid – will soon translate into new state programs.

Massachusetts has already launched such an initiative, a new California program will begin in May, and 17 additional states are scheduled to begin new efforts later this year and next.

WheelchairNew federal policies encourage state Medicaid programs to work with Medicare in service to their dually eligible population, with the states and Medicare sharing in the savings they produce.  Currently, dually eligible patients constitute 15 percent of the Medicaid population but account for 40 percent of Medicaid’s costs and 20 percent of the Medicare population but 30 percent of Medicare’s costs.

Because they serve communities with greater-than-average proportions of low-income residents, private safety-net hospitals serve especially large numbers of dual eligibles.

How are states tackling this challenge?  Learn more in this Stateline report.

Some Hospitals Stand to Lose Medicaid Expansion, DSH Money

When the Supreme Court made Medicaid expansion optional rather than mandatory for states, its decision affected the delicate balance of one aspect of the Affordable Care Act.

Hospitals that serve large numbers of low-income and uninsured patients receive special supplemental payments from Medicare and Medicaid to help subsidize the care they provide to these patients:  disproportionate share payments, or DSH payments.

And because Medicaid expansion was expected to reduce the number of uninsured patients such hospitals serve, the Affordable Care Act calls for reducing over a period of years both the Medicare DSH and Medicaid DSH payments hospitals receive.

iStock_000005787159XSmallBut in states that choose not to expand their Medicaid programs, hospitals that qualify for Medicare DSH and Medicaid DSH payments will continue to serve similar numbers of low-income and uninsured payments but now face the prospect of doing so with smaller Medicare DSH and Medicaid DSH payments as the Affordable Care Act requirement begins reducing those payments.

This could prove especially troublesome for private safety-net hospitals located in states that do not expand their Medicaid program because such hospitals serve especially large numbers of low-income and uninsured patients.

The Wall Street Journal has taken a look at how this situation will affect hospitals in just one state that is not expanding its Medicaid program.  See its story here.

CMS Seeks to Shape Provider Networks

Insurers offering qualified health plans in the federally facilitated marketplace will soon be required to meet federal standards for the adequacy and breadth of their provider networks.

According to a letter issued by the Centers for Medicare & Medicaid Services (CMS) to insurers, the agency will seek to require qualified health plans to include in their provider networks at least 30 percent of the essential community providers in the region the plan serves and at least one of each type of essential community provider.

cmsEssential community providers include disproportionate share  hospitals, children’s hospitals, sole-community hospitals, rural referral centers, critical access hospitals, federally qualified health centers, and others.

If implemented, such a requirement could benefit many private safety-net hospitals, which are all disproportionate share hospitals.

CMS has published a letter to insurers outlining its plans; find that letter here.  It also is soliciting input on its proposed approach, with interested parties invited to submit comments by February 25.