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CMS Proposes Mandatory Bundled Medicare Reimbursements: Financial Risk on Hospitals!

A new CMS proposal could transform durable medical equipment (DME) Medicare reimbursements to hospitals. The proposal, if adopted, would implement a mandatory bundled Medicare reimbursement for hip and knee replacements or lower extremity joint replacements (LEJRs).

CMS has proposed this change to be piloted in 75 metropolitan areas prior to being implemented nationwide.

This mandatory bundled Medicare reimbursement will be unprecedented, as, thus far, CMS has only implemented voluntary bundled reimbursement rates. However, CMS has stated that its goal is to have at least 50% of all Medicare fee-for-service reimbursement to be paid under an alternative payment model by 2018, and, in order to meet this objective, CMS will need to implement more  mandatory alternative payment models.

Another first is that CMS proposes that hospitals bear the brunt of the financial risk. To date, CMS has not targeted a type of health care provider as being a Guinea pig for new ideas, unlike the other proposed and implemented Bundled Payments for Care Improvement (BPCI) initiative where there are many types of providers that can participate and bear risks.

Will this affect NC hospitals?

Yes.

Of the 75 metropolitan areas chosen as “test sites” for the new bundled payment plan, 3 are located in NC.

1. Asheville
2. Charlotte
3. Durham-Chapel Hill

Apparently, CMS believes that Durham and Chapel Hill are one city, but you got to give it to them…by hyphenating Durham and Chapel Hill, CMS gets both Duke and UNC health systems to participate in the mandatory trial. Other large metro areas included in the trial are Los Angeles, New York City, and Miami.

LEJRs are the most frequent surgeries in the Medicare population. The average Medicare expenditures for LEJRs, including surgery, hospitalization, and recovery, can range from $16,500 to $33,000.

The mandatory bundled reimbursement will become effective January 2, 2016; however, the hospitals will not carry the financial risk until January 1, 2017.  So, hospitals, you got a year and a half to figure it out!!

What exactly will this bundled reimbursement rate include?

Answer: Everything from an inpatient admission billed under MS DRG 469 or 470 until 90 days following discharge.

And we are talking about everything.

Thus, you will be reimbursed per “Episode of Care,” which includes:

“All related items and services paid under Medicare Part A and Part B for all Medicare fee-for-service beneficiaries, including physicians’ services, inpatient hospital service, readmissions (subject to limited exceptions), skilled nursing facility services, durable medical equipment, and Part B drugs.”

What should you do if you are a hospital so graciously selected to participate?

1.  Assess your protocol as to discharging patients.  Where do your patients go after being discharged?

2. Determine whether you want to partner with any critical care facilities, skilled nursing agencies, or home health agencies.

3.  Assess your current reimbursement rates and analyze what current delivery patterns must be revamped in order to maintain profitability.

4. Determine future care management and clinical reprogram needs.

5. Analyze ways to provide more efficient delivery components.

6. Communicate with your DME vendors.  Discuss ways to decrease spending and increase efficiency.

7.  Plan all ways in which you will follow the patient after discharge through the 90 day period.

8. Consult your attorney.

If you would like to comment on the proposed rule, you have until September 8, 2015 at 5:00pm.

The NC State Plan, Its Importance, and How Can We Keep Up With All the Changes??

I am constantly amazed at the amount of knowledge that I do not know.  And how quickly the knowledge I have becomes obsolete due to changes.  To quote Lewis Carroll’s “Alice and Wonderland,” “Why, sometimes I’ve believed as many as six impossible things before breakfast.” My other favorite quote series from Lewis Carroll is the following scene:

“But I don’t want to go among mad people,” Alice remarked.
“Oh, you can’t help that,” said the Cat: “we’re all mad here. I’m mad. You’re mad.”
“How do you know I’m mad?” said Alice.
“You must be,” said the Cat, or you wouldn’t have come here.”

So too, must I be mad, I think, at times, for dealing with Medicaid and Medicare law.  The statutes and regulations are vast and ever-changing.  You can easily miss a policy change that was disseminated by an update posted on the web.  But, I am a lawyer…I read a lot.  But providers are held accountable as well for every revision and every update.

Just when you think you understand the State Plan, the Department of Health and Human Service (DHHS) asks the Center for Medicare and Medicaid Services (CMS) for an amendment.

In this blog, I am going to discuss 2 issues.  (1) What is the State Plan and why is it important; and (2) how can providers stay abreast of the ever-changing Medicare/caid world and policies.

(1) Our State Plan

What is our State Plan in Medicaid? Is it law? Guidance? Does NC have to follow the State Plan? Can NC amend the State Plan?

These are all good questions.

The State Plan is a contract between North Carolina and the federal government describing how NC will administer its State Plan, i.e., Medicaid program.  The State Plan describes who can be covered by Medicaid, what services are available, and, basically, assures the federal government that we will abide by certain rules and regulations.  NC must follow the State Plan or risk losing federal funding for Medicaid, which would be BAD.

Quite often, the Department of Health and Human Services (DHHS) will issue a State Plan Amendment (SPA) to the Centers for Medicare and Medicaid Services (CMS).  DHHS has to post all proposed amendments on its website “10 Day Posting for Submission to CMS.”  This internet site should be in your “favorites,” and you should check it regularly.

For example, February 27th, DHHS asked to reduce Medicaid reimbursements methodologies for Chiropractic Services, Podiatry Services and Optometry Services to 97% of the July 1, 2013, rate, effective January 1, 2014 (yes, retroactively).

Just in 2014, there have been approximately 10 SPA requests.  So, these SPAs are relatively common.

So, question #2…how can you keep up?

(2) Keeping abreast of all changes

As much as I would love to throw my computer out the window (I am on the 16th floor) and watch it crash, computers and technology can be very helpful.  And technology makes it easy for everyone, even busy health care providers, to stay current on changes, amendments, and revisions to Medicaid/care policies and law.

Here is the secret: (shhhhhhhhh!!)

Google Alerts.

If you want to keep current on NCTracks, all you have to do is set a Google alert with the search term “NCTracks,” and you will receive daily email alerts on all internet articles on NCTracks.  It is that easy.

So how do you set up a Google Alert?  I have drafted a set by step process, otherwise entitled “Google Alerts for Dummies.”

1. Go to Google.

2. At the top of the page you will see the words: “You,” “Search,” “Images,” “Maps,” “Play,” “Youtube,” “News,” “Gmail,” and “More.”  Click on “More.”

3. When the box drops, at the very bottom, you will see “even more.”  Click on “even more.”

4. Scroll down to specialized search and click on “Alerts.”

5. Type in whatever search term you like, such as “Medicaid,” or “Knicole Emanuel.”

6. Decide how often you want to be alerted and your email address.

You will now be alerted about your topic.  See? Easy!!

Now, because of this blog, you have learned two or more impossible things before lunch.