A whole new world awaits

In­dus­try braces for big changes if bill be­comes law

Modern Healthcare - - The Week In Healthcare - Matthew DoBias and Jen­nifer Lubell

Hospi­tal in­dus­try leaders in wit­ness­ing the his­toric pas­sage of the Se­nate’s health­care over­haul bill know that the way they do busi­ness in the health­care mar­ket­place may be about to rapidly change.

As the House and Se­nate move to con­fer on the re­spec­tive dif­fer­ences on their health­care re­form pack­ages early this year (See story be­low), providers are gear­ing up for the like­li­hood that the gov­ern­ment plans a ma­jor re­vamp in how it pays and eval­u­ates hos­pi­tals for care un­der fed­eral pro­grams.

Any health re­form bill is bound to gen­er­ate a great deal of reg­u­la­tory ac­tiv­ity. Many changes in pay­ment pol­icy are likely to take place—and will be im­ple­mented quickly, said Don May, vice pres­i­dent for pol­icy with the Amer­i­can Hospi­tal As­so­ci­a­tion. Some of th­ese changes could be dis­cussed, pro­posed and im­ple­mented as soon as 2011, he said.

In looking at the Se­nate bill alone, the $871 bil­lion Pa­tient Pro­tec­tion and Af­ford­able Care Act, ap­proved early on Christ­mas Eve in a his­toric 60-39 vote, would greatly re­struc­ture the roughly $2.5 tril­lion per year health­care sec­tor in just over a decade’s time. Much of this re­struc­tur­ing in­volves pay­ment re­form.

Pres­i­dent Barack Obama and Demo­cratic mem­bers of Congress praised the Se­nate vote. “We are now in­cred­i­bly close to mak­ing health in­sur­ance re­form a re­al­ity in this coun­try,” Obama said af­ter the vote.

The Se­nate leg­is­la­tion, as an ex­am­ple, would cre­ate a pi­lot hospi­tal value-based pur­chas­ing pro­gram in 2013, where a per­cent­age of re­im­burse­ment would be tied to per­for­mance. If suc­cess­ful, it could be ex­panded. In­pa­tient re­ha­bilita- tion fa­cil­i­ties and long-term-care hos­pi­tals will also move to­ward such a sys­tem. The bill is loaded with other pi­lot pro­grams and sys­tem stud­ies. Un­der one, hos­pi­tals in 2013 could vol­un­teer to re­ceive pay­ments for an en­tire episode of care rather than un­der the piece­meal in­pa­tient prospec­tive pay­ment sys­tem, or IPPS. The bun­dled pay­ment sys­tem will also be ex­panded to other provider types as well.

The bill cre­ates a so-called “In­de­pen­dent Pay­ment Ad­vi­sory Board,” which would hold sway over Medi­care pay­ment for­mu­las. The board would make an­nual rec­om­men­da­tions to the pres­i­dent, Congress and pri­vate or­ga­ni­za­tions on ac­tions they can take to im­prove qual­ity and con­strain the rate of cost growth. Its Medi­care rec­om­men­da­tions are non­bind­ing in years where Medi­care growth is be­low the tar­geted growth rate. The board will de­velop its first rec­om­men­da­tions in 2013 for im­ple­men­ta­tion two year later.

Hos­pi­tals also face new penal­ties. In 2012, for in­stance, hos­pi­tals would see their re­im­burse­ment cut for cer­tain types of read­mis­sions.

The bill also aims to boost health in­sur­ance cov­er­age. The Se­nate’s pack­age is ex­pected to ex­tend cov­er­age to 31 mil­lion Amer­i­cans who cur­rently go without it. Much of the cost of ex­tended cov­er­age would come from re­duc­tions in fed­eral dol­lars to the Medi­care and

Gage: Se­nate bill could fall short of cov­er­age ex­pec­ta­tions.

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