In its annual rulemaking proposal aiming to shift hospitals toward a value-based model, Medicare recommends several changes, including one that the American Hospital Association says could undermine efforts to reduce readmissions.
When the Centers for Medicare & Medicaid Services released its proposed rule for the hospital inpatient prospective payment system (IPPS) last week, the American Hospital Association joined a chorus of industry leaders praising the agency's decision to drop the two-midnight rule payment cuts hospitals have endured since 2013.
"This change, in combination with the changes to the outpatient final rule, really is a win for hospitals and Medicare beneficiaries," she says. When determining a patient's status, "hospitals should rely on physician judgment, not a time benchmark."
The AHA challenged the two-midnight rule in federal court along with four state hospital associations (the Greater New York Hospital Association, the Hospital Association of New York State, the New Jersey Hospital Association and the Hospital and Health System Association of Pennsylvania) and four hospital systems (Banner Health, Einstein Healthcare Network, Wake Forest University Baptist Medical Center, and Mount Sinai Hospital).
Bathija says the court still has to determine if CMS met the burden of justifying the 0.2% cuts in the first place. The AHA says CMS has not.
More Payment Adjustments
Another key payment change that Bathija says will impact hospital reimbursement is CMS's plan to increase the amount it has been collecting for coding and documentation overpayments.
Since 2014, CMS has taken 0.8% from hospitals to recoup $11 billion in overages that began in 2008. Fiscal year 2017 is the last year the agency has to finish recovering the overpayments, but CMS says it's short by $5.08 billion. To make up for the shortfall, the agency wants to take 1.5% from hospitals, nearly double the amount it took in previous years.
"We urge CMS to reduce the amount of this cut," Bathija says. "This cut is much larger than we think Congress anticipated."
The AHA also says some of the CMS quality measures meant to improve patient outcomes and quality are unfairly punishing some hospitals. The penalties hospitals incur for excessive readmissions have pressured hospital leaders to develop new protocols, but some factors are out of a hospital's control, according to Akin Demehin, AHA senior associate director.
Related: Readmissions Penalties Still Don't Account for Patient Demographics
"There is a growing body of literature that shows a link between socioeconomic conditions and readmission," Demehin says. "We think a socioeconomic adjustment would level the playing field and make it fairer."
The AHA had hoped that CMS would recommend adjusting readmission penalties for hospitals that serve a large number of disadvantaged patients. A report in January by the National Academy of Medicine report heightened awareness of the issue. The report identified five social risk factors that can impact outcome and quality measures, including hospital readmissions.
Related: 1 in 4 Readmissions Avoidable, Researchers Say
"Penalty or not, hospitals are focused on readmissions," says Akin. "A lot of the work we've seen across the country relates to transitions in care and making sure discharge instructions are clear. You're seeing hospitals do that across the board, but even those doing an exceptional job are still finding themselves getting penalties."
No Consideration for Socioeconomics
CMS's proposal did not include the socioeconomic adjustments the AHA was hoping to see. Their absence combined with a new recommendation for calculating disproportionate share payments could mean substantial changes for some hospitals. CMS expects to distribute $400 million less in uncompensated care payments next year.
Part of the reason for the decrease stems from fewer uninsured patients. The DSH payment calculation changed to accommodate the increase in insured patients, but the AHA says the reformulation CMS proposes for 2018 "may not be ready for prime time."
According to Bathija, the main point of contention is what's called the S-10 worksheet. It's what CMS wants to use to help calculate DSH payments instead of its current method of counting Medicare, Medicaid, and Supplemental Security Income inpatient days. The AHA concedes that data from the S-10 worksheet could be a more accurate accounting method if some changes were made to it. The problem, says Bathija, is that CMS has not indicated that it changed anything.
"We're analyzing the impact," she says. "We're likely to support it, but we still believe changes are needed."
Quality Reporting Changes
Another proposal that CMS wants to see changed beginning in 2018 affects the hospital-acquired conditions program. There is currently a 1% penalty imposed on the worst performers in a quartile. Demehin says scoring the data that way is misguided because no matter how well a hospital performs, there still has to be a bottom 1%.
The issue over data collection can seem granular, but the way CMS collects, analyzes and publishes data is a big concern for hospitals. The AHA supports the promise of data from CMS, but is critical of the agency's proposal to fast-track collecting of some clinical quality measures for the Hospital Inpatient Quality Reporting program.
Later this year, hospitals will begin submitting four IPPS clinical quality measures to CMS. Hospitals have a choice of which four measures they will submit in either the third or fourth quarter, and they have had two years to prepare.
In the IPPS 2017 proposal, CMS is bumping up the number of measures to 15. "Reporting on that many so soon is premature," says Demehin. "Hospitals haven't even started the reporting for this year."
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Jacqueline Fellows is a contributing writer at HealthLeaders Media.