The health care industry is increasingly facing payment pressures, especially from the shift to value-based medicine - high-quality care that is also cost effective.
DOTmed News recently had the opportunity to interview Jill Rathbun on this subject. She is a Managing Partner at Galileo Consulting Group, in Arlington, VA.
DOTmed News: The Medicare program recently released the data on individual hospital value-based payment and hospital-acquired condition scores, so why are so many hospitals facing decreased Medicare reimbursements in FY 2015?
JR: There are policies in the FY 2015 Final Medicare Inpatient Prospective Payment System Rule where there are penalties against a hospital's FY 2015 increase based on their performance. When these penalties are combined, together, it leads to larger reductions in overall Medicare payments to hospital for inpatient services than in previous years. First, the Affordable Care Act mandates a reduction of .2 percent to the market basket update for acute inpatient hospitals in FY 2015.
To adjust for coding intensity/documentation, the Centers for Medicare and Medicare Services (CMS) is taking a .8 percent reduction as part of the continuing process to recover $11 billion by 2017 to satisfy the requirements under the American Taxpayer Relief Act of 2012.
There is also the Hospital Readmissions Reduction Program where the maximum reduction is increasing 3 percent. Hospitals are going to receive those cuts if they have large numbers of readmissions for patients with heart attack, heart failure, pneumonia, chronic obstructive pulmonary disease, and hip/knee arthroplasty. The Centers for Medicare and Medicaid Services is also proposing to add another new readmission measure beginning in FY 2017: readmissions for coronary artery bypass graft (CABG) surgical procedures.
Then there's the Hospital-Acquired Condition (HAC) Reduction program, a financial incentive program for hospitals to improve patient safety by applying a one percent payment reduction to the Medicare allowables of hospitals that rank in the lowest performing quartile relative to a national average of HACs acquired during an applicable hospital stay. HACs are conditions that patients did not have upon admission to a hospital, but that developed during the hospital stay. HACs that the hospitals are being measured on include: Pressure Ulcers; Iatrogenic Pneumothorax; Central Venous Catheter-related bloodstream infections; Postoperative Hip fracture; Postoperative Pulmonary Embolism or Deep Venous Thrombosis; Postoperative Sepsis; Postoperative Wound Dehiscence; Accidental Puncture or Laceration; Central Line-Associated Blood Stream Infection (CLABSI); and Catheter-Associated Urinary Tract Infection (CAUTI).
