Practice Management

Medicare too Costly?

In April, the Centers for Medicare and Medicaid (CMS) published its proposed Inpatient Prospective Payment System (IPPS) rule for fiscal year 2009. The rule contains many important components, including additional categories of hospital-acquired conditions (HACs) that no longer will earn higher Medicare payment.

The good news is that under the proposed rule, Medicare payments to hospitals would increase by nearly $4 billion. However, the requirements to earn that are causing concern among some individuals and organizations, including SHM.

This year, CMS announced it would begin withholding additional payments for eight specific HACs, including some “never events”—a practice that won’t take effect until October (May 2008, p. 25). Now, the agency proposes to add nine more. Why double these restrictions so soon?

There are unintended consequences, like testing everyone who comes in the door for certain conditions, and even treating a condition that doesn’t need to be treated.

—Gregory Maynard, MD, MSc, division chief of hospital medicine, University of California, San Diego

“I think it’s a combination of things,” says Gregory Maynard, MD, MSc, division chief of hospital medicine at the University of California, San Diego Medical Center. “Medicare is trying hard to find things that will improve quality and reduce costs, and there are many ways you can do both.”

CMS will pay the lesser Medicare Severity DRG (MS-DRG) amount if the complication was acquired at the hospital and the patient has no other complications or comorbidities.

“It’s not that Medicare won’t pay for the hospital stay—they won’t pay for that condition as a co-morbidity,” explains Dr. Maynard.

  • The new HACs include:
  • Surgical site infections following certain elective surgeries;
  • Legionnaires’ disease;
  • Glycemic control for diabetes;
  • Iatrogenic pneumothorax;
  • Delirium;
  • Ventilator-associated pneumonia;
  • Deep-vein thrombosis/pulmonary embolism (DVT/PE);
  • Staphylococcus aureus septicemia; and
  • Clostridium difficile-associated disease.

Policy Points

CMS Revises PQRI Rules to Boost Participation

To make it easier for physicians to participate in the Physician Quality Reporting Initiative (PQRI), CMS has revised the program with alternative reporting periods and alternative criteria for satisfactorily reporting groups of measures.

For 2008, there are four measures groups: diabetes mellitus, end-stage renal disease, chronic kidney disease, and preventive care. Each of these contains at least four PQRI measures. Eligible physicians electing to report a group of measures must report all measures in the group that are applicable to the patient. The reporting period is from July 1 through Dec. 31. For a measure group, physicians can either report the measures for 15 consecutive patients or 80% of applicable cases. CMS has pointed out that it is not too late to start reporting; there are 60 patient-specific measures that need only be reported once per patient per reporting period.

For details on the latest changes to PQRI, visit www.cms.hhs.gov.

MedPAC Weighs in on Bundled Payments

The Medicare Payment Advisory Commission (MedPAC) has voted on three draft recommendations regarding bundled payments. One recommendation is that Congress require the Department of Health and Human Services (HHS) “to confidentially report readmission rates and resource use around hospitalization episodes for select conditions to hospitals and physicians. Beginning in the third year, providers’ relative resource use should be publicly disclosed.”

Commissioners also recommended providers be encouraged to collaborate and better coordinate care, by having HHS reduce payments to hospitals with relatively high admission rates for select conditions and also allow “shared accountability” (aka gainsharing) between physicians and hospitals.

Finally, the commission agreed to recommend that Congress should require the Department of Health and Human Services secretary to create a voluntary pilot program to test the feasibility of actual bundled payment across hospitalization episodes for select conditions.—JJ

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