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Nearly Half of Hospitals Nicked for Readmissions

Medicare’s Hospital Readmissions Reduction program will penalize 2499 hospitals for excessive readmissions in the coming year.

That represents 47 percent of all hospitals covered by the program.

The average penalty for the nearly 2500 hospitals will be a 0.64 percent reduction of their Medicare payments. Thirty-nine hospitals will suffer the maximum penalty: a three percent cut of their Medicare payments.

Learn more about the effect the Hospital Readmissions Reduction Program has had on hospitals – and on patients admitted to the hospital with specific medical conditions – in the Kaiser Health News story “Medicare Punishes 2,499 Hospitals for High Readmissions.”

Medicare Beneficiaries Happier With Their Health Insurance Than Privately Insured

People who are enrolled in Medicare are happier with their health insurance than those with private health insurance, according to a recent JAMA report.

Researchers found that the privately insured had a more difficult time finding doctors, were less likely to have a personal physician, had to deal with higher medical costs, were more likely to have medical debt, were more likely not to fill prescriptions because of their cost, and were less satisfied with their care than people insured by Medicare.

The findings were true whether people purchased their own health insurance or had employer-sponsored insurance.

Learn more about how the privately insured, Medicare beneficiaries, and Medicaid beneficiaries view their health insurance and health care experiences in the Healthcare Dive article “Privately insured face worse access, higher costs than those in public plans: JAMA report.”

NASH Submits Comments on Proposed Medicare Outpatient Regulation

NASH has submitted formal comments to the Centers for Medicare & Medicaid Services in response to that agency’s proposed 2021 Medicare outpatient prospective payment system rule.

That rule describes how CMS proposes paying hospitals for Medicare-covered fee-for-service outpatient care in 2021.

Writing on behalf of private safety-net hospitals, NASH addressed the following aspects of the proposed rule:

  • Proposed rate increase.   NASH endorsed CMS’s proposal to raise Medicare fee-for-service rates for outpatient care.
  • The 340B program.  NASH expressed strong opposition to CMS’s proposal to reduce  reimbursement for prescription drugs to 340B-eligible hospitals.
  • Phase-out of the inpatient-only services list.  NASH asked CMS not to phase out the inpatient-only services list.
  • Changes in the level of supervision for selected outpatient therapeutic services.  NASH conveyed its support for proposed reductions in such supervision.
  • The physician-owned hospital exception.  NASH opposed CMS’s proposal to ease the current limit on the expansion of high-Medicaid physician-owned hospitals.

Learn more about NASH’s reasoning behind each of these positions in its letter to CMS on the proposed 2021 Medicare outpatient prospective payment system regulation.

NASH Calls for More COVID-19 Legislation

On Tuesday the National Alliance of Safety-Net Hospitals wrote to Senate leaders and asked them to advance legislation with five major COVID-19-related policy initiatives that private safety-net hospitals seek:

  1. An additional $100 billion for hospitals.
  2. A 14-point increase in the federal medical assistance percentage (FMAP).
  3. A 2.5 percent increase in states’ Medicaid disproportionate share (Medicaid DSH) allotments and another delay in implementation of Affordable Care Act-mandated cuts in those allotments.
  4. Reduced interest rates and a longer payback period for Medicare payments advanced to hospitals through the CARES Act’s Accelerated and Advance Payment Program.
  5. Prevention of implementation of the Medicare fiscal accountability regulation (MFAR).

Learn more from NASH’s letter to Senate majority leader Mitch McConnell and Senate minority leader Chuck Schumer.

Hospital Groups Critical of CMS 340B Proposal

The federal government should not survey providers to determine their costs for drugs covered by the section 340B prescription drug discount program, hospitals and hospital groups have told the Centers for Medicare & Medicaid Services.

Their comments came in response to a regulation CMS proposed in September that would require hospitals to report their acquisition costs for 340B-covered drugs.  CMS proposed such data collection after federal courts ruled against its attempt to reduce 340B reimbursement to hospitals that participate in the program.  Among the court’s objections were CMS’s lack of data about those drug acquisition costs.

Among the reasons hospitals conveyed in expressing their opposition were the cost of reporting the data in question; the design of the survey; the flawed premise underlying the survey; and the proposed rule’s requirement that all hospitals complete the survey and not just those that participate in the 340B program.

Among the groups criticizing the proposed regulation were the Association of American Medical Colleges, which wrote in its comment letter that

Congress did not design the 340B program to pay hospitals at acquisition costs…Congress designed the program so that eligible hospitals could purchase covered drugs at a discounted rate below the Medicare reimbursement rate and use the difference to reach more eligible patients and provide more comprehensive services.

The National Alliance of Safety-Net Hospitals was among the groups commenting on the proposed regulation.  Writing on behalf of private safety-net hospitals, NASH observed in its November 27, 2019 formal comment letter that

The 340B program was created by Congress to enable hospitals (and other providers) that serve low-income communities to maximize their resources when working to serve those communities.  The program helps improve access to high-cost prescription drugs for low-income patients and helps put additional resources into the hands of qualified providers so those providers can do more for their low-income patients:  provide more care that their patients might otherwise not be able to afford, offer more services that might otherwise be unavailable to such patients, and do more outreach into communities consisting primarily of low-income residents.  This was the purpose of the 340B program when Congress created it in 1992 and Congress has done nothing to modify that purpose since that time:  it has not directed that special assistance to qualified providers be reduced; it has not insisted that participating providers document the expenditure of their savings in service to their communities; and it most certainly has not dictated that 340B payments to eligible providers be reduced so that payments to non-340B providers could be increased.  NASH believes that through this proposed data collection CMS is seeking to exert authority it does not have to demand of providers information to which the agency is not entitled.

Learn more about hospital industry opposition to the proposed 340B regulation in the Fierce Healthcare article “Hospitals blast CMS’ proposed 340B survey.”

Can Medicare Feed its Way Out of Some Readmissions?

Feeding some Medicare patients after they are discharged from the hospital could reduce readmissions and save taxpayers millions, a new study has concluded.

According to the new Bipartisan Policy Center report Next Steps in Chronic Care:  Expanding Innovative Medicare Benefits, providing a limited number of free meals to certain Medicare patients could eliminate nearly 10,000 readmissions a year and save more than $57 million.

Participating patients would be those with more than one of a limited number of chronic medical conditions and the meals would be for one week only.  According to the report, more than 575,000 Medicare beneficiaries would be eligible to participate in such a program, with their meals costing $101 million a year, or $176 a person for one week, but the nearly 10,000 Medicare readmissions that would be prevented would reduce Medicare spending more than $158 million a year.

Such a program, if implemented, would be yet another approach to addressing the social determinants of health in many communities.

Such a program would undoubtedly benefit the low-income communities most private safety-net hospitals serve because food insecurity is one of many social determinants of health that challenge the health of the residents of those communities.

Learn more about how such an approach would work and whom it would serve in the Bipartisan Policy Center report Next Steps in Chronic Care:  Expanding Innovative Medicare Benefits.

Government More Effective Than Private Sector at Controlling Health Care Costs

For the past dozen years, Medicare and Medicaid have done a better job of controlling rising health care costs than private insurers.

Since 2016, according to a new report from the Urban Institute, private insurers’ costs per enrolled member have risen an average of 4.4 percent a year.  By contrast, Medicare costs have risen an average of 2.4 percent per enrollee and Medicaid costs have risen just 1.6 percent per enrollee.

The primary driver of Medicare cost increases has been prescription drug spending.  For Medicaid the primary driver has been physician services and administrative costs.  For private insurers, the main reason for increasing costs has been spending for hospital care.

Learn more about the differences in cost containment in these different sectors and the implications of those differences in the Urban Institute report “Slow Growth in Medicare and Medicaid Spending Per Enrollee Has Implications for Policy Debates.”

MedPAC Mulls Direct Billing for Nurse Practitioners, Physician Assistants

Medicare would permit nurse practitioners and physician assistants to bill directly for their services under a proposal being considered by the Medicare Payment Advisory Commission.

Currently such services are billed as “incident to” physician services, but according to a report in Becker’s Hospital Review,

MedPAC staff told commissioners there are problems with “incident to” billing because it “obscures policymakers’ knowledge of who is providing care for beneficiaries,” “inhibits accurate valuation of fee schedule services,” and “increases Medicare beneficiary spending.”  Staff also said that physician assistants and nurse practitioners increasingly practice outside of primary care.

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.

MedPAC commissioners are expected to vote on the recommendation next month.

Learn more about the billing recommendation in this article in Becker’s Hospital Review.

OIG: Medicare Advantage Plans May be Denying Access to Save Money

The Office of the Inspector General of the U.S. Department of Health and Human Services is concerned that Medicare Advantage plans may be denying their members access to services to save money and increase profits.

According to the OIG, those Medicare Advantage plans overturn 75 percent of their own denials of service upon appeal and independent reviewers are overturning still more denials.  In the OIG’s view, this high rate of service denials raises concerns that Medicare Advantage plans, which today serve more than 20 million seniors, are denying their members access to needed medical services so they can cut costs and make more money.

To address this problem, the OIG recommends that the Centers for Medicare & Medicaid Services increase its oversight of Medicare Advantage contracts, address problem plans it identifies, and do more to inform enrollees when their plans are performing in such a manner.

CMS agreed with these recommendations.

To learn more about how the OIG went about this work, what it found, and what it recommended, go here to see a summary of its report or go here to see the full report Medicare Advantage Appeal Outcomes and Audit Findings Raise Concerns About Service and Payment Denials Report, the complete OIG report.

 

MedPAC Issues 2018 Report to Congress

The non-partisan legislative branch agency that advises Congress and the administration on Medicare payment policies has submitted its mandatory annual report to Congress.

Among the findings included in the report by the Medicare Payment Advisory Commission are:

  • Medicare’s hospital readmissions reduction program has not resulted in increases in emergency room visits or hospital observation stays.
  • Many Medicare accountable care organizations, while maintaining or improving quality, are producing more modest savings than predicted.
  • MedPAC approves of Medicare’s proposals to redesign the case-mix classification system for skilled nursing facilities.
  • MedPAC supports changes Medicare has proposed for patient assessment and therapy requirements for skilled nursing facilities.

MedPAC’s recommendations include:

  • Authorizing outpatient-only hospitals in isolated rural communities to ensure access to emergency care.
  • Reducing payments to off-campus emergency departments in certain urban areas.
  • Rebalancing Medicare’s physician fee schedule to increase payments for ambulatory evaluation and management services while reducing payments for procedures, imaging, and tests.
  • Paying for sequential stays in a unified prospective payment system for post-acute care.
  • Establishing new ways to help patients, families, and hospitals identify higher-quality post-acute care providers for their patients.
  • Establishing new principles for measuring quality that address both population-based measures and quality incentives.
  • Encouraging the development of managed care plans that better meet the needs of the dually eligible (Medicare and Medicaid) population.
  • Eliminating Medicare payment increases for skilled nursing facilities in FY 2019 and FY 2020 because of the healthy financial condition of those facilities.
  • Urging Medicare to use a uniform set of population-based measures for different health care settings and different populations.
  • Moving forward with a unified post-acute-care payment system as quickly as possible.

Learn more about MedPAC’s thinking, research, conclusions, and recommendations by consulting the following materials:   the news release that accompanied MedPAC’s transmission of its report to Congress; a fact sheet that accompanied the report’s release; and the 407-page report itself.