Hospital trade groups are buying 60-second TV spots implying that patients might expect compromised care if a proposed $3.7 billion cut in Medicare reimbursement takes effect starting Oct. 1 for fiscal 2011.
Somber piano notes play in the background of a busy hospital scene as an announcer says: "At this moment, your father is alive. Your son is safe. Your wife is recovering. And your baby is coming home.
"Is this really the moment to cut $4 billion from our hospitals? Cuts that could mean overcrowding, fewer nurses, and longer waits? Call Congress and tell them to stop the cuts."
The emotion-laden spots, and another 30-second version, are running in cities in 10 states from New York to California. They are paid for by the Coalition to Protect America's Health Care, a group comprised of the American Hospital Association, the Association of American Medical Colleges and the Federation of American Hospitals.
The proposed cut is actually 2.9% of what hospitals would receive in Medicare reimbursement in fiscal 2011. But it is intended to correct overpayments the Centers for Medicare and Medicaid Services believes it made to hospitals in 2008 and 2009 under the Inpatient Prospective Payment System (IPPS). The overpayments were the result, CMS says, from inaccurate coding by hospitals to categorize patients with multiple more complex diagnoses under a new policy CMS set forth in 2007.
CMS's proposed rule would retrieve about half of what CMS believes it overpaid. But the coalition believes CMS has made a terrible mistake in its calculations.
The group believes CMS is now punishing hospitals for accurately coding for the patients they see, patients that are increasingly sicker than they were several years ago. Hospitals modified their coding after CMS had changed the IPPS system in 2007 specifically to allow hospitals to more accurately describe a patient's multiple co-morbidities, something they previously were not able to do.
But when the hospitals coded according to the new rules, "The level of payment and level of case mix increased more than CMS expected," said Caroline Steinberg, the AHA's (www.aha.org) vice president for trends analysis. "CMS just wasn't able to anticipate how much of this was expected to occur."
"Patients truly are significantly more severely ill. They are more obese, with more heart disease and have an underlying increase in severity," she said.
The hospitals' petition received support Monday in a letter sent by 240 members of the U.S. House of Representatives to new CMS head Donald Berwick.
"The coding 'offset' assumes that hospital payments have increased solely due to changes in coding, or classification of patients, as opposed to hospitals' treatment of more complex an more severely ill patients," the Congressmen wrote.
"We believe that this assertion fails to take into consideration that hospital patients are indeed sicker. Increasingly, as more patients are successfully cared for in hospital outpatient departments, hospitals are reporting that those who are actually admitted to the inpatient setting are often times more severely ill."
Steinberg says that the cut comes at a terrible time. Not only does it wipe out a 2.4% market basket update for hospitals that submit data on quality measures, but it comes on top of hospitals' agreeing to another $155 billion cuts over the next 10 years to help pay for healthcare for the poor under health reform.
And it will hit all hospitals that take care of Medicare patients except for those classified as critical access, with fewer than 25 beds, by reducing the amount of a hospital's base payment that applies to every Medicare patient.
The letter signed by members of Congress adds "The Medicare Payment Advisory Commission (MEDPAC) analysis has shown that hospitals are being paid substantially les than the cost of delivering care to Medicare patients. These costs include wages and benefits (nearly 70% of hospital costs,) medical supplies, pharmaceuticals, medical devices, food and utilities."
It closes:
"A cut of this size in FY 2011 payments to hospitals could weaken their ability to provide high quality services tot heir patients and communities."