Posted on 07/14/2017 11:23:54 AM PDT by spintreebob
A 1,500 page Medicare payment rule and next year's physician fee pay rule both dropped last week...on the same day as the Senate revealed revisions to its plan to repeal and replace the Affordable Care Act. And none of it was kind to the healthcare industry.
The payment change that seemed to most ruffle industry feathers was a proposal to halve what Medicare pays when patients receive services at facilities that are owned by hospitals but located off campus.
The Obama administration last year finalized a rule that paid most hospital off-campus facilities the same as hospital-based outpatient departments.
In a move that would save $25 million next year, the Trump administration proposed dropping that rate from 50% to 25%.
"At a time when the nation is moving toward value-based payments, this proposal makes no sense. In essence, it removes all incentives to provide care out in the communities rather than at the hospital, and ultimately will lead to higher overall Medicare spending," said Blair Childs, senior vice president of public affairs for healthcare consultancy Premier.
Hospitals say off campus facilities give patients more entry points to care, especially in underserved areas. But the prior payment model made to those facilities caused hospitals to acquire physician practices at a rapid clip and reap those more generous rewards.
Congress passed what's called the site-neutral policy after a federal report found Medicare was paying 141% more for a echocardiogram in an outpatient setting than for the same service in a doctor's office.
According to the American Hospital Association, in 2014, 17.2 million hospital visits included invasive, therapeutic surgeries. Over half of these visits occurred in a hospital-owned ambulatory surgery (AS) setting.
That's likely why the CMS also now is considering expanding Medicare payment for hip and knee replacement procedures that take place in ambulatory surgical centers, according to another proposal released last week. Previously, only some procedures were covered only in the outpatient setting.
The Ambulatory Surgery Center Association says close to 40 centers around the country are performing outpatient joint replacements, and outpatient surgery companies such as Surgical Care Affiliates are aiming to increase them.
That's threating one of the largest and most profitable service lines at many hospitals.
In 2014, more than 400,000 Medicare beneficiaries received a hip or knee replacement, costing the government more than $7 billion for the hospitalizations alone—over $50,000 per case.
The move to outpatient settings also raises questions about the future of Medicare's mandatory bundled-payment initiative for inpatient procedures in 67 markets around the country, called the Comprehensive Care for Joint Replacement program, which began last April. The CMS rule appears to undermine that initiative.
Another threat to hospitals' finances is yet another change proposed last week to pay hospitals 22.5% less than the average sales price for drugs acquired under the 340B program. The federal program is intended to lower operating costs for hospitals with disproportionate numbers of low-income patients.
The 340B program is controversial because it does not specify or restrict how hospitals can use money generated by the program and critics say that leads to some hospitals taking advantage of the savings.
The current 340B payment for drugs is 6% on top of the average sales price, that's Medicare's longstanding pricing method, despite rising drug costs.
With the proposed changes, if a drug costs $84,000, the CMS would pay just over $65,000, instead of $89,000. Vaccines would continue to be paid at the current rate.
The change, HHS Secretary Tom Price said in a press release, is a significant step toward fulfilling President Donald Trump's promise to address rising drug prices.
"This proposal has the potential to reduce drug costs for seniors, by at least an estimated $180 million per year. If it is adopted, Medicare would pay hospitals for drugs purchased through the 340B discount program at a price more consistent with the actual cost hospitals and other providers pay to acquire those drugs. Seniors would see those savings passed on to them in the form of lower copays," he said.
The proposal is budget neutral and savings would return to the Medicare program.
Hospitals said they would be most negatively affected. Participants in the 340B program provide 60% of uncompensated care, even though they comprise only 36% of the nation's hospitals.
"The data show 340B hospitals provide significantly higher levels of care to low-income patients, including low-income Medicare beneficiaries," Ted Slafsky, CEO of 340B Health, an association of more than 1,300 participating hospitals said in a statement. "With the uninsured rate rising again and so much uncertainty about the health care marketplace, this is no time to cut reimbursement to hospitals that serve patients in need."
Bruce Siegel, CEO of America's Essential Hospitals said the proposal threatens hospitals' ability to maintain critical services to patients and communities.
It was the Medicare Payment Advisory Commission that suggested eligible hospitals should receive ASP minus 22.5% as the average discount. The agency proposed the change earlier this year to combat costs that have grown 543%.
From 2004 to 2013, Medicare spending for Part B drugs at hospitals that participate in 340B grew from $500 million to $3.5 billion. Hospitals in the 340B program accounted for 22% of Medicare spending for Part B drugs at acute care hospitals in 2004. That grew to 48% in 2013, according to MedPac.
In one bright note for providers, the CMS is looking to expand coverage of telemedicine and provided new billing codes for some services including psychotherapy and consultations for chronic care management.
The proposed Medicare payment rule includes measures to help put patients first, Price said in the press release. He added it was "part of a broader effort we are undertaking at HHS."
Comments on both the Medicare payment rule and the proposed physician payment schedule are due by Sept. 11.
And if it were really cheap, be allowed to keep the difference.
How many poor people would find the really cheap place because that extra little bit they could pocket would mean a lot to poor people.
Just wondering how pro-choice would work.
The problems of socialism. They just never end.
they never end, and they just keeping growing
It isn’t just low balling the payment but employing people to insure compliance with all these regulations.
“more than 400,000 Medicare beneficiaries received a hip or knee replacement, costing the government more than $7 billion for the hospitalizations alone—over $50,000 per case.”
$15,000?
Learning math would mean the author was ‘acting white’. He needs to keep his street cred. His next stop? CNN!
“most ruffle industry feathers was a proposal to halve what Medicare pays when patients receive services at facilities that are owned by hospitals but located off campus.”
“The Obama administration last year finalized a rule that paid most hospital off-campus facilities the same as hospital-based outpatient departments.”
We certainly shouldn’t be paying a premium for non-emergency services.
Patients could ask a relative to drive them a few miles or pay for a taxi out of their own pockets rather than the overspending US government paying a lot more.
If the new remote facility is not operating efficiently labor-wise, perhaps it shouldn’t have been opened. As for the supplies, they should cost about the same either on-campus or a few miles away.
A 1,500-page rule?
A 1,500-page rule?
Bfl
"Journalists" may be a bit challenged doing arithmetic.
You DID mean to type "MediCARE", yes?
Should not service medicaid or medicare if not fully reimbursed for the cost of providing service.
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