MedPAC pro­poses cuts

Hack­barth says 2011 cuts to ‘force’ ef­fi­ciency

Modern Healthcare - - The Week In Healthcare - Jen­nifer Lubell

The Medi­care Pay­ment Ad­vi­sory Com­mis­sion last week pro­posed cuts to 2011 provider pay­ments with an eye to­ward im­prov­ing qual­ity and ef­fi­ciency and crack­ing down on fraud and abuse.

The ad­vi­sory body is rec­om­mend­ing that Congress fur­ther ad­just Medi­care’s hospi­tal in­pa­tient pay­ments over three years to re­cover over­pay­ments that have re­sulted from re­cent doc­u­men­ta­tion and cod­ing changes. MedPAC Chair­man Glenn Hack­barth said the pro­posed ad­just­ment is nec­es­sary and that it’s time to “force re­lent­less pres­sure” on hos­pi­tals to im­prove their ef­fi­ciency. Congress, in turn, “needs to be pre­pared to re­sist the cries” of providers who claim they’re suf­fer­ing fi­nan­cially un­der Medi­care’s pay­ment rates, he said.

While pleased that MedPAC rec­om­mended a full mar­ket­bas­ket, or inflation, up­date, the Amer­i­can Hospi­tal As­so­ci­a­tion nev­er­the­less is “dis­ap­pointed with the com­mis­sion’s cod­ing-off­set rec­om­men­da­tion, since the CMS al­ready has au­thor­ity to ap­ply an off­set and has sug­gested us­ing a less ag­gres­sive tran­si­tion in its 2010 rule,” Don May, the AHA’s vice pres­i­dent of pol­icy, said in an e-mail.

MedPAC called for the same rec­om­men­da­tion as last year: to in­crease pay­ment rates for in­pa­tient and out­pa­tient hospi­tal ser­vices at the full rate of inflation while im­ple­ment­ing a qual­ity in­cen­tives pro­gram. The pro­jected mar­ket­bas­ket up­date for hos­pi­tals is now 2.5%.

The com­mis­sion also re­peated its rec­om­men­da­tion to re­duce the in­di­rect med­i­cal ed­u­ca­tion ad­just­ment by a per­cent­age point to help fi­nance a qual­ity

in­cen­tives pro­gram for hos­pi­tals.

On top of this pro­posed up­date, how­ever, MedPAC is sug­gest­ing that in­pa­tient base pay­ments be re­duced by 2% an­nu­ally over three years—from 2011 through 2013—to re­coup over­pay­ments made to hos­pi­tals in 2008 and 2009, and to pre­vent any fu­ture over­pay­ments that have re­sulted from im­ple­ment­ing the CMS’ Medi­care sever­ity-ad­justed di­ag­no­sis-re­lated groups, or MSDRG, cod­ing sys­tem in fis­cal 2008.

In mak­ing th­ese small, pre­dictable ad­just­ments to hospi­tal pay­ments, the CMS would be able to achieve bud­get neu­tral­ity, said Ju­lian Pet­tengill, a MedPAC con­sul­tant.

Last year, how­ever, the CMS sug­gested it might con­sider a five-year tran­si­tion to this ad­just­ment. “It would be bet­ter for hos­pi­tals if the agency fol­lowed through on this sug­ges­tion,” said Steven Speil, se­nior vice pres­i­dent of health fi­nance and pol­icy with the Fed­er­a­tion of Amer­i­can Hos­pi­tals.

The com­mis­sion also rec­om­mended new con­di­tions un­der which home health providers and am­bu­la­tory surgery cen­ters get paid in its fi­nal rec­om­men­da­tions to Congress for 2011 pay­ments.

In a se­ries of rec­om­men­da­tions on home health, MedPAC pro­posed that Congress freeze pay­ments for the provider group next year while re­quir­ing HHS to mod­ify home health’s base pay­ments to bet­ter re­flect the cost of pro­vid­ing care. The Na­tional As­so­ci­a­tion for Home Care & Hospice has main­tained that th­ese pay­ment rec­om­men­da­tions would re­sult in a re­duc­tion of their mem­bers’ Medi­care re­im­burse­ment.

Re­spond­ing to con­cerns that the CMS should be more ag­gres­sive in ad­dress­ing fraud and abuse in the home health in­dus­try, MedPAC also sug­gested that the agency re­view home health or­ga­ni­za­tions that show un­usual pat­terns of pay­ment claims.

The com­mis­sion also called for a 1.1% up­date for hospice providers, and a freeze on pay­ments for skilled-nurs­ing fa­cil­i­ties, in­pa­tient re­ha­bil­i­ta­tion fa­cil­i­ties, and long-term, acute­care hos­pi­tals. It also pro­posed that Congress up­date physi­cian pay­ments by 1% in 2011.

Hack­barth: Congress must “re­sist the cries” of providers.

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