2. Illness severity not reflected
Katz points out that safety net hospitals may unintentionally downgrade the severity level of their patients, which may make it look like they treat healthier patients than they do. That's because publicly funded hospitals don't often pay attention to diagnostic coding.
"Here in Los Angeles, we don't do a good job at coding, and that influences the severity adjustment."
Why not just educate the staff to do a better job, he was asked. "Safety net hospitals don't have the money to hire professional coders, he replies.
"Private non-profit hospitals have coders constantly going through the records putting little arrows with suggestions for the doctors, who themselves are going to get paid more by doing this. In my system, we don't prioritize coding. It's not that we're sloppy. It's just that we have a finite budget." Given extra resources, safety net hospitals hire more doctors.
3. Poorer patient experience scores
A Harvard study this week in the Archives of Internal Medicine documents one aspect of this problem for the first time. It shows that 769 safety net hospitals scored an average of 5.6% lower on HCAHPS than their non-safety net counterparts.
Under authority from the PPACA, lower HCAHPS scores can put these struggling hospitals smack dab in the center the payment reduction bullseye starting Oct. 1.
Under the value based purchasing algorithm, hospitals that don't do as well as their competitors—and patient experience surveys make up 30% of the score—will receive as much as 1% less in their Medicare reimbursement.
Study author Ashish Jha, MD, postulated several reasons for the lower scores, such as fewer nurses per 1,000 patient days, more Medicaid patients whose care receives lower rates of reimbursement than Medicare or commercially insured patients.