MHA's Executive Briefing

Medicare: CMS starts to spell out PPACA impact on hospital pay

The Centers for Medicare and Medicaid Services (CMS) is beginning to put the financial impact of the Patient Protection and Affordable Care Act and its related Reconciliation Act (collectively the PPACA) into quantifiable terms for Medicare-participating hospitals. The agency has issued two documents that implement many (but not all) of the PPACA mandates: (1) a supplemental proposed payment rule for the inpatient prospective payment system (IPPS) and the long-term acute-care (LTAC) PPS for fiscal year (FY) 2011 beginning Oct. 1, 2010; and (2) a notice containing the final wage indices, hospital reclassifications, market basket updates, payment rates and other key data for FY 2010, which are being used to pay hospitals for discharges on or after April 1, 2010, in accordance with the PPACA.

Read more here.

Hospital groups urge Congress to remove 'jobs' bill provision

The American Hospital Association, the Association of American Medical Colleges, Catholic Health Association of the United States, Federation of American Hospitals, and National Association of Public Hospitals and Health Systems on May 27 urged Congress to remove Section 525 from the American Jobs and Closing Tax Loopholes Act (H.R. 4213). The provision would change the so-called Medicare "72 Hour Rule" to prohibit hospitals from retrospectively billing to unbundle payments for therapeutic services performed within 72 hours of a hospital admission if they were unrelated to that admission.

"In their review process, Recovery Audit Contractors informed hospitals that these payments were in fact available to them," and this message was reinforced by the Centers for Medicare & Medicaid Services at its March 4 Hospital Open Door Forum, the groups said in a letter to members of Congress. The Congressional Budget Office estimates that the provision would save more than $4 billion in reduced payments to hospitals.

On top of hospital reductions of $155 billion included in the health reform law and an additional reduction of $3.7 billion being proposed by CMS for FY 2011, the groups said "we believe such additional savings from hospitals are unfair and unwarranted."

Health Care Budgets for Pay Increases Continue Dip in 2010

Pay increase budgets have fallen to 2.5%, down from 3% in 2009. Little change is expected over the next year, as health care organizations predict only a slight uptick in 2011 to 2.7%, according to the new 2010 Compensation Data Healthcare survey. "With a slow economic recovery expected, healthcare organizations continue to make conservative compensation choices," said Amy Kaminski, director of marketing for Compdata Surveys, a compensation and benefits survey data provider.

Read more here.

How to test your decision-making instincts

Executives should trust their gut instincts—but only when four tests are met.

IPPS Proposed Rule for FY 2011

The Centers for Medicare & Medicaid Services (CMS) on May 21 issued a second proposed rule affecting fiscal year (FY) 2011 inpatient and long-term care hospital prospective payment system (PPS) payments. This additional rule addresses provisions included in the Patient Protection and Affordable Care Act (PPACA) that affect FY 2011 payments.

Comments on the proposed rule will be accepted until June 21. A final rule will be released by August 1, and the policies and payment rates will generally take effect October 1.

If you are an MHA member and would like a copy of the AHA Advisory on this rule sent to you, email Shawn Lea at slea@mhanet.org.

Center monograph explains accountability trends for trustees

A new monograph from the Center for Healthcare Governance examines the latest trends in accountability for health care organizations and what they mean for hospital boards of trustees. Authors Sean Murphy, senior vice president and corporate general counsel for Solaris Health System in Edison, NJ, and Anne Mullaney, a partner at the Pittsburgh-based law firm Thorp Reed & Armstrong, review state hospital association education and certification programs, which have grown in number from two to 12 in the past three years. They explain the elements and requirements of certification programs and explore emerging issues such as "pay-for-governance" and New Jersey's education mandate for all hospital trustees.

Click here or e-mail info@americangovernance.com to order any of the Center's monographs. The Center for Healthcare Governance is the American Hospital Association''s resource for governance information, tools and counsel to promote excellence in health care governance.

AHA, others urge Congress to extend expiring Medicare provisions

Fourteen organizations, including the American Hospital Association, on May 20 asked House and Senate leaders to quickly enact legislation to extend nine Medicare policies set to expire this year. "Failure to pass legislation to extend these various Medicare policies will prompt limited access to services for beneficiaries in rural and other under-served areas, payments cuts to health care professionals, as well as the creation of an unsustainable health care environment," the groups wrote.

Specifically, the letter calls for extending the floor on geographic adjustments to the work portion of the physician fee schedule and revisions to the schedule's geographic adjustment for practice expenses; the exceptions process for therapy limits; a provision that allows independent labs to bill Medicare directly for certain clinical laboratory services; bonus payments for ambulance services; certain payment rules for long-term care hospital services and the moratorium on establishing certain hospitals and facilities; the payment add-on for psychiatric services under the physician fee schedule; the outpatient hold harmless provision; reasonable cost reimbursement for certain diagnostic tests provided to hospital patients in some rural areas; and improvements to the hospital wage index.

CMS issues proposed rule, notice implementing PPACA for inpatient, LTCHs

The Centers for Medicare & Medicaid Services on May 21 issued a second proposed rule on fiscal year 2011 inpatient and long-term care hospital prospective payment system payments, which addresses provisions included in the Patient Protection and Affordable Care Act that affect FY 2011 payments. Those provisions include a market basket cut, wage index-related changes, payments to hospitals in "low-cost" counties, protections for frontier states and Medicare extenders. Comments on the proposed rule will be accepted until July 2.

The American Hospital Associaiton is reviewing the rule and will issue a Special Bulletin to members soon with more information. Also, CMS issued a rate notice implementing inpatient and LTCH PPS market basket cuts for FY 2010 mandated in the PPACA. Both market basket updates were cut by 0.25% effective April 1, 2010.

Next Up: Battle Over New Tax Bill

Top Democrats introduced legislation that would raise taxes on investment managers, as well as many professionals and some multinational businesses, to offset the cost of a new grab bag of economic-relief initiatives. But some doctors, lawyers and other professionals who operate through certain small-business corporations would face higher taxes.

Read more from the Wall Street Journal here.

Physicians File Lawsuit on FTC's Red Flags Rule

The American Medical Association (AMA), American Osteopathic Association (AOA) and the Medical Society of the District of Columbia (MSDC) today filed a suit in federal court seeking to prevent the Federal Trade Commission (FTC) from extending identity theft regulations to physicians. Read more here.