MHA's Executive Briefing

AHA comments on national coverage analysis for surgical errors

The American Hospital Association on Aug. 29 urged the Centers for Medicare & Medicaid Services to consider several questions as it deliberates a national coverage determination concerning when to withhold payment for certain serious surgical errors. In a letter commenting on CMS’ national coverage analyses of errors involving the wrong surgery or surgery on the wrong patient or body part, AHA said the analysis should consider how the events are defined, how accountability will be assigned, and what costs or services should not be covered.

“We urge CMS to reflect on these questions and thoroughly consider the complexities and subtleties that may arise over the issue of serious, adverse events,” AHA said. Because of the many nuances surrounding the issue, the association recommended that CMS include an appeals process for hospitals to petition any decisions that they believe were made inappropriately.

AHA recently adopted a set of principles articulating when hospitals would not expect payment from patients or their insurers or employers for care related to preventable serious, adverse events.

[ via AHA News Now ]

CMS: Providers satisfied with Medicare contractors

Health care providers remain generally satisfied with the contractors that process and pay Medicare fee-for-service claims, the Centers for Medicare & Medicaid Services reported on Aug. 27. The contractors received an average score of 4.5 out of 6 on the latest annual Medicare Contractor Provider Satisfaction Survey, required by the Medicare Modernization Act of 2003. That’s about the same average score as last year.

The 2008 contractors, which include two Medicare administrative contractors, received the highest scores for claims processing and the lowest for their appeals function. The survey queried about 35,000 randomly selected Medicare providers.

Survey questions focused on seven business functions: provider outreach and education, provider inquiries, claims processing, appeals, provider enrollment, medical review, and provider audit and reimbursement. Contractors received an overall composite score as well as a score on each business function.

[ via AHA News Now ]

AHA objects to proposed billing change for mobile diagnostic services

The American Hospital Association on Aug. 28 urged the Centers for Medicare & Medicaid Services to clarify that its proposal to require mobile diagnostic testing entities to bill directly for services would not apply when such services are provided to hospital patients through a leasing arrangement. If extended to these services, the proposed requirement would “disrupt these long-standing arrangements and, more importantly, conflict with the prohibition against unbundling of hospital services,” AHA said in a comment letter. AHA also recommended that mobile diagnostic testing facilities that provide services to hospitals be excluded from the proposed performance standards for independent diagnostic testing facilities.

“We recognize and support CMS’ initiatives to improve the quality of all health care services, including diagnostic testing services, in the hospital setting,” AHA said. “However, there are numerous existing requirements to ensure that mobile diagnostic testing services are integrated sufficiently within the hospital and subject to hospital oversight and other Medicare requirements.”

[ via AHA News Now ]

AHA urges certain changes to proposed outpatient rule

The American Hospital Association on Aug. 28 expressed “serious concerns” with aspects of the calendar year 2009 outpatient prospective payment system proposed rule. In a comment letter, AHA urged the Centers for Medicare & Medicaid Services to reconsider several aspects of its outpatient PPS quality reporting program, noting that the four measures of medical imaging efficiency CMS proposes to add have neither been endorsed by the National Quality Forum nor adopted by the Hospital Quality Alliance.

“We strongly believe that measures added to the outpatient reporting program must first go through the rigorous, consensus-based assessment processes of both the NQF and HQA,” AHA said. The letter also opposes CMS’ proposal to create two cost centers for drugs, and recommends that separately covered outpatient drugs receive the same payment rate as physician offices.

The association also recommends that CMS use only hospital-based partial hospitalization program data to determine the payment rates for PHP services, which provide outpatient treatment for patients with mental health conditions.

[ via AHA News Now ]

IPPS rule finalizes certain physician self-referral provisions

The Centers for Medicare & Medicaid Services finalized several provisions related to physician self-referral in its fiscal year 2009 inpatient prospective payment system final rule. Under the final rule released July 31, only physicians with an ownership or investment interest in a physician organization are deemed to “stand in the shoes” of that organization for purposes of analyzing a financial arrangement under the self-referral law. However, the provisions do not apply to physicians without the ability or right to receive financial benefits – such as distribution of profits, dividends, sale proceeds or similar returns on investment – and arrangements meeting the requirements of the academic medical centers exception.

In the rule, CMS also expanded protections for malpractice insurance subsidies provided by hospitals, federally qualified health centers and rural health clinics to physicians who regularly provide obstetrical services in rural areas and areas determined to have a “demonstrated need;” prohibited the use of “per click or per use” payments in certain rental agreements for office space and equipment; and prohibited the use of percentage-based compensation in rental agreements for office space and equipment. The final rule will be published in the Aug. 19 Federal Register and takes effect Oct. 1.

[ via AHA News Now ]

CMS Releases FY 2009 Inpatient PPS Rule

The Centers for Medicare & Medicaid Services (CMS) on July 31 released the inpatient prospective payment system (IPPS) final rule for fiscal year (FY) 2009. The policies and payment rates included in this rule become effective October 1. Some of the rule's key provisions are outlined below.

CMS is still implementing certain provisions of the Medicare Improvements for Patients and Providers Act of 2008, which extended certain wage index reclassifications and affects the rule's budget neutrality adjustments. Therefore, CMS is only able to provide tentative FY 2009 wage index values for hospitals, as well as tentative standardized amounts, relative weights, and thresholds for outliers and new technology add-on payments. CMS indicated it will publish final figures in a subsequent rule, but before October 1, 2008.

Operating Payment Update: Hospitals that submit data on 30 quality measures will receive a 3.6% market-basket increase, while those hospitals not submitting data will receive a 1.6% update.

Quality Measure Reporting: To receive a full payment update in FY 2009, hospitals must report on two measures of surgical site infection prevention and one measure of 30-day mortality rates for pneumonia, in addition to continuing to report on the 27 measures required for FY 2008. The rule adds 13 new measures for reporting and retires one current measure for a total of 42 measures for hospitals to receive a full payment update in FY 2010. While AHA is pleased CMS reduced the number of new measures from 43 in its proposal to 13, we are disappointed that CMS chose only four measures adopted by the Hospital Quality Alliance.

The new measures include:

• Surgery patients on a beta blocker prior to arrival who received a beta blocker during the perioperative period;
• Heart failure 30-day readmission;
• Death among surgical patients with treatable serious complications;
• Iatrogenic pneumothorax;
• Postoperative wound dehiscence;
• Accidental puncture or laceration;
• Abdominal aortic aneurysm mortality rate;
• Hip fracture mortality rate;
• Mortality for selected surgical procedures (composite measure);
• Mortality for selected medical conditions (composite measure);
• Complication/patient safety for selected indicators (composite measure);
• Nursing sensitive measure: Failure to rescue;
• Participation in a systematic database for cardiac surgery.

CMS expects two new readmission measures for heart attack and pneumonia to be endorsed by the National Quality Forum this fall and will adopt them in the final outpatient PPS rule for IPPS implementation.

Reporting for Low-volume Hospitals: Beginning with January 2009 discharges, hospitals that have fewer than five heart attack, heart failure, pneumonia or surgical care patients in a calendar quarter are not required to submit data for those patients. Hospitals that have fewer than five HCAHPS-eligible patients in any month will not be required to submit HCAHPS surveys for that month. All hospitals must submit to CMS their total numbers of eligible patients for each condition and their sample sizes, if they choose to sample their patient populations for quality reporting.

Hospital-acquired Conditions: CMS is adding two hospital-acquired conditions to the previous list of eight conditions finalized in last year's rule for which it will no longer pay a higher diagnosis-related group (DRG) rate beginning in FY 2009 if they are not present on admission. The two new conditions are poor glycemic control associated with certain conditions and deep vein thrombosis/pulmonary embolism after certain orthopedic surgical procedures. In addition, CMS has expanded the surgical site infection condition to include infections occurring after certain orthopedic surgeries and bariatric surgery.

National Coverage Determination: CMS is initiating a national coverage determination process for three serious adverse events:

• Surgery on the wrong patient;
• Wrong surgery on the patient;
• Surgery on the wrong body part.

Capital Payment: CMS is moving forward with its plans to phase out the indirect medical education (IME) adjustment to capital payments by reducing payments by 50% in FY 2009 and then eliminating the IME adjustment in FY 2010. The American Hospital Association, along with 210 representatives and 51 senators, urged CMS not to proceed with these cuts.

Diagnosis-related Groups (DRGs): FY 2009 marks the end of the transition to the new Medicare-Severity DRG system. Beginning October 1, 2008, the Medicare-Severity DRGs and the cost-based relative weights will be fully phased in. As mandated by Congress, the final rule includes a prospective 0.9% cut to the standardized amount to eliminate the effect of coding and classification changes - the so-called "behavioral offset" - that CMS says do not reflect real changes in case mix.

Area Wage Index: CMS finalized its proposed wage index changes, but will be phasing in their implementation. Specifically, CMS will:

• Increase the threshold necessary for both individual and group area wage index reclassifications with a two-year transition.
• Apply the rural floor budget-neutrality adjustment at the state level, rather than to the standardized amount, with a three-year transition.
• Extend the imputed rural floor provision for those states that do not have rural areas for an additional three years through FY 2011.

Cost Report Changes: To address charge compression when setting Medicare-Severity DRG relative weights, CMS is splitting the current cost center for "Medical Supplies Charged to Patients" into one line for "Medical Supplies Charged to Patients" and another line for "Implantable Devices Charged to Patients." However, CMS has revised its proposal of assigning devices to cost centers based on AHA's recommendation to use revenue center codes, which is less burdensome on hospitals.

Outliers: CMS tentatively lowered the outlier fixed-loss threshold from its current level of $22,185 to $20,185 (pending new budget neutrality changes for extension of Sec. 508 area wage index reclassification).

Disclosure Regarding Physician Ownership: A "physician-owned hospital" must disclose to all patients whether it is physician-owned and, if so, the names of its physician owners. This disclosure requirement will extend to hospitals in which a physician's immediate family member holds an ownership or investment interest, even if the physician does not. The hospital must also require all members of its medical staff to agree, as a condition of their continued medical staff membership or admitting privileges, to disclose any ownership or investment interest in the hospital held by the physician or an immediate family member in writing at the time of the referral to all patients they refer to the hospital.

Physician Self-referral Provisions:

• Stand in the Shoes Provisions - CMS finalized only one of its proposed revisions to the physician "stand in the shoes" provisions. Only physicians who have an ownership or investment interest in a physician organization will "stand in the shoes" of that physician organization for purposes of analyzing the financial arrangement under the physician self-referral law. Physicians without the ability or right to receive financial benefits, such as distribution of profits, dividends, sale proceeds or similar returns on investment, are not required to "stand in the shoes" of their physician organizations. CMS also clarified that the physician "stand in the shoes" provisions do not apply to an arrangement that satisfies the exception in the physician self-referral law for Academic Medical Centers. CMS chose not to finalize the "stand in the shoes" provisions related to the designated health services entity side of the financial arrangement (e.g., collapsing a hospital and its medical foundation for purposes of analyzing the financial arrangements under the self-referral law). 
• Disclosure of Financial Relationships Report (DFRR): CMS finalized its proposed collection of information on hospital financial relationships with physicians, to include no more than 500 hospitals. It will be a one-time collection effort and CMS is not adopting a regular reporting or disclosure process at this time. The agency adjusted its estimate of burden upwards for the second time based on public comment, from 33 hours to 100 hours for each hospital. CMS must obtain clearance from the Office of Management and Budget before the DFRR can be sent to hospitals; that process includes a public notice and comment period. CMS indicated that the number of hospitals receiving the DFRR may be reduced depending on public comment during the clearance process.

EMTALA: CMS did not finalize its proposal to require a hospital with specialized capabilities to accept the transfer of certain hospital inpatients under EMTALA. Instead, CMS stated that "if an individual with an unstable emergency medical condition is admitted, the EMTALA obligation has ended for the admitting hospital and even if the individual's emergency medical condition remains unstabilized and the individual requires special services only available at another hospital, the hospital with specialized capabilities does not have an EMTALA obligation to accept an appropriate transfer of that individual."

CMS finalized its proposal to allow hospitals to meet their on-call list obligation through participation in a "community-call plan." These plans must be formal among the participating hospitals and include specified elements, and each hospital participating must have written policies and procedures in place to respond to situations in which the on-call physician is unable to respond due to situations beyond his or her control.

The final rule will be published in the August 18 Federal Register; a display copy is available at http://www.cms.hhs.gov/AcuteInpatientPPS/downloads/CMS-1390-F.pdf.

[ via the American Hospital Association ]

CMS issues final rules for IRFs, SNFs and hospice wage index

The Centers for Medicare & Medicaid Services on July 31 issued its fiscal year 2009 final rules for inpatient rehabilitation facilities, skilled nursing facilities and the hospice wage index. The IRF prospective payment system final rule includes three congressionally mandated changes.

Two of these changes pertain to the 75% Rule and were long sought by the field – a new, permanent 60% threshold and the permanent inclusion of selected comorbidities to make additional cases eligible under the Rule. Congress also waived the IRF market basket update for FY 2009, which is reflected in the final rule’s zero update.

In addition, the final rule will implement a budget neutral update of the relative weights for the IRF payment categories. The SNF PPS final rule includes a 3.4% market basket increase for fiscal year 2009, a jump of $780 million over FY 2008 payments.

In addition, CMS will postpone its proposed reduction of $770 million to adjust for higher-than-expected utilization of the nine, higher paid payment categories added to the payment system in 2006. The American Hospital Association had expressed strong concern over CMS’ proposed methodology for this adjustment.

The three rules can be found online and will be published in the Aug. 8 Federal Register. 

[ via AHA News Now ]

CMS issues IPPS final rule

The Centers for Medicare & Medicaid Services on July 31 released its fiscal year 2009 inpatient prospective payment system final rule, which scales back the proposed increase of 43 new quality measures hospitals must report to receive a full market basket update in 2010. Currently, hospitals must report on 30 measures to receive the 3.6% full market basket update in FY 2009.

Hospitals not submitting data would receive a 1.6% update. In the rule, CMS removed one current measure related to pneumonia and added 13 more; however, only four of those have been adopted by the Hospital Quality Alliance (HQA).

American Hospital Association Vice President for Policy Don May said the association was disappointed with CMS’ decision to add nine measures that have not been adopted by the HQA. “This rule fails America’s hospitals and the people they serve. CMS ignored the recommendations of quality experts and squandered a chance to show their commitment to quality by choosing to add new quality measures that have not been adopted by the HQA.”

CMS also finalized two additional health care-acquired conditions for which it will no longer pay a higher DRG rate beginning in FY 2009 if present on admission, and expanded one condition adopted in last year’s rule. The agency also finalized its proposals related to the hospital wage index with transitions.

The rule includes CMS’ proposal to cut capital indirect medical education payments. The final rule will be published in the Aug. 18 Federal Register and takes effect Oct. 1. 

[ via AHA News Now ]

CMS Makes Final Ruling on Medicare Advantage Benefit Changes

The Centers for Medicare & Medicaid Services issued a final rule prohibiting Medicare Advantage companies from making mid-year adjustments to non-prescription drug benefits, premiums and cost-sharing submitted in their approved bids for a given contract year. The rule explains that Medicare Advantage organizations offering certain kinds of plans restricted to employer and union group health plan sponsors, and not open to general enrollment, may continue to offer benefit enhancements through means other than mid-year benefit adjustments. The rule will go into effect on August 27th.

[Via AHA News Now]

House lawmakers approve legislation to postpone ‘45% trigger’

The House recently voted 231-184 to approve a resolution (H. Res. 1368) preventing lawmakers from having to mark-up legislation to decrease Medicare spending.

The 2003 Medicare Modernization Act had a provision under the “45% trigger," which would have allowed any lawmaker to introduce legislation or make amendments to an existing one under pretenses of Medicare reform. Without the resolution, any House member could have called for a vote to discharge from committee a bill to address the Medicare trigger. The Senate was supposed to act on the trigger legislation by June 30, but the majority Democrats chose not to respond due to flexibility in their chamber’s procedures.

[Via AHA News Now]