Transcript 400658dReformOverview_122809Update

An Overview of Proposed Healthcare
Reforms Affecting Hospitals
Updated December 28, 2009
Dear Member,
This presentation provides a summary of recent payment reform proposals and
highlights the facets that most impact acute care hospitals. In addition to providing
you with an update on current trends within the industry, it offers a guide to HFMA
resources you can use to navigate your organization through the complicated
economic and regulatory environment.
Please feel free to use this presentation to educate your staff and other hospital
stakeholders. If HFMA can be of additional assistance in any way, please do not
hesitate to contact us.
Warmest Regards,
HFMA
Presentation Objectives
 Understand Factors Driving the Need for
Change
 Identify Key Players and Where They Are in
the Reform Process
 Analyze Likely Reforms and Their
Implications for Hospitals
 Provide HFMA Resources for Addressing
These Changes
Ready for Change
Increased Levels of the Uninsured Coupled with Popular Support Make Action on Healthcare
Reform Likely
Percentage Reporting That It Is
“Important” or “Very Important” for the
President to Accomplish1
Percentage of Uninsured Americans:
2007 Compared to Estimated Current2,3
17%
100%
93%
∆ +3.25%
16%
90%
88%
15%
14%
75%
2007
Current
Improve Quality of Ensure Affordable
Care
Care and Insurance
Source:
1) DeNavas-Walt, C.B. Proctor, and J. Smith. Income, Poverty, and Health Insurance Coverage in the United States: 2007. U.S. Census Bureau., August 2008
2) Kaiser Family, Commission on the Uninsured, Rising Unemployment, Medicaid and the Uninsured, Jan 2009, http://www.kff.org/uninsured/upload/7850.pdf
3) Commonwealth Fund Survey of Public Views of the U.S. Health Care System, 2008.
Decrease the
Uninsured
Pushed Out
Growth In Healthcare Insurance Costs Are Now Making Affordability Difficult for
Individuals and Small Businesses
Cumulative Changes in Health Insurance Premiums, Inflation, and Workers’
Earnings, 1999-2008
140%
119%
120%
100%
80%
60%
34%
40%
20%
29%
0%
1999
2000
2001
2002
2003
2004
Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2000-2008.
Bureau of Labor Statistics, Consumer Price Index, U.S. City Average of Annual
Inflation (April to April), 2000-2008; Bureau of Labor Statistics, Seasonally
Adjusted Data from the Current Employment Statistics Survey, 2000-2008 (April to
April).
2005
2006
2007
2008
Health Insurance Premiums
Workers' Earnings
Overall Inflation
Exponential Growth
Already Unsustainable Healthcare Costs…
Barriers to Access
…Have Grown Faster Under a Universal Mandate, Endangering Gains in Insurance
Coverage
Average Per Capita Health Spending 1980 - 19901
$12,000
March 26, 2008
Massachusetts
$10,000
$8,000
U.S.
$6,000
$4,000
$2,000
$0
1980
1985
1990
1995
2000
2005
2009
Coverage Mandate
Effective July 1, 2007
Source:
• Massachusetts Faces Costs of Big Health Care Plan; Sack, Kevin; The New York Times; March 16, 2009
• Healthcare Cost Increases Dominate Mass. Budget Debate; Dembner, Alice; The Boston Globe; March 26, 2008
“Healthcare Cost Increases
Mass. Budget – Controlling
Them Said Key to Keeping
Universal Coverage2”
A Road Map to Reform
Most of President Obama’s Ambitious Healthcare Goals Depend on Bending the
Cost Curve
Causal Relationship Between the President’s Healthcare Goals
Catalyst
Reduce Cost
Growth
Invest in
Prevention and
Wellness
Improve Safety
and Patient
Care
Source:
1) http://www.whitehouse.gov/issues/health_care/
Primary
Outcome
Assure
Affordable
Coverage
Secondary
Outcome
Tertiary
Outcome
Maintain
Coverage
During Job
Transitions
Protect Families
from Medical
Bankruptcy
End Barriers for
Preexisting
Conditions
Guarantee
Choice of Docs
and Health
Plans
Where the Dollars Are
Despite a Dramatic Decrease Over the Last 27 Years, Hospital Services Still Account
for the Bulk of Health Expenditures
National Health Expenditure Comparison:
1980 to 2007
$233.4B
$1,966.2B
Other (3), 9.4%
Other (3), 13.7%
Nursing Home Care, 7.9%
Other Medical Durables and Non-durables, 5.8%
Prescription Drugs, 5.2%
Home Health Care, 1.0%
Other Professional(4), 7.3%
Nursing Home Care, 6.3%
Other Medical Durables and Non-durables, 3.0%
Prescription Drugs, 10.8%
Home Health Care, 2.8%
Other Professional(4), 7.5%
Physician Services, 20.2%
Physician Services, 22.8%
Hospital Care, 43.3%
Hospital Care, 33.2%
1980
2007
Source: Centers for Medicare & Medicaid Services, Office of the Actuary. Data released January , 2009
(1)
Excludes medical research and medical facilities construction.
(2)
CMS completed a benchmark revision in 2006, introducing changes in methods, definitions and source data that are applied to the entire time
series (back to 1960). For more information on this revision, see http://www.cms.hhs.gov/NationalHealthExpendData/downloads/benchmark.pdf.
(3)
“Other” includes net cost of insurance and administration, government public health activities, and other personal health care.
(4)
“Other professional” includes dental and other non-physician professional services.
Conscious Decision or Waste?
The U.S. Healthcare System Overspends Compared to Other Developed Countries
in Almost Every Major Category
2006 U.S. Healthcare Spending Compared with Average for Other Developed Countries
Average Spending
2,053
850
1,410
436
Above Average Spending
$ Billions
458
252
40
98
145
91
643
178
24
144
Investment in
Health
Durables
Long-Term and
Home Care
Administrative
Costs
Drugs and
Nondurables
Inpatient Care
Outpatient Care*
Total Healthcare
Spending
50
* Outpatient care includes physician and dentist offices, same-day visits to hospitals (including ED, ASC and imaging services), and other same day facilities
Source: Accounting for the Cost of U.S. Health Care: A New Look at Why Americans Spend More; McKinsey & Company; December 2008
A Cast of Thousands
There Are a Number of Important Players Involved in Healthcare Reform
• The White House:
• President Obama, Chief of Staff Rahm Emanuel, OMB Director Peter Orszag, and
Director of Health Reform Nancy Ann DeParle
• U.S. House of Representatives (The “Tri-Committee”)
• Ways and Means
• Energy and Commerce
• Education and Labor
• The U.S. Senate
• Health, Education, Labor and Pensions (HELP
Committee)
91
• Finance (SFC)
• The Congressional Budget Office
• Industry Trade Groups
President Obama Weighs In
"Now Is When We Must Bring the Best Ideas of Both Parties Together, and Show the American
People That Can Do What We Were Sent Here to Do.”
Insurance Market Reforms:
•Ends discrimination based on preexisting conditions
•Limits premium variance based on age and gender
•Prevents coverage termination during episodes of illness
•Caps out of pocket expenses, ends maximum annual or lifetime benefits
Provides Quality Affordable Choices:
•Creates an insurance exchange for individuals and small businesses
•Provides sliding scale tax credits to help purchase insurance
•Offers small businesses tax credits for providing coverage
•Creates a public option
•Offers national “high risk” pool for those with preexisting
91conditions immediately
Funding Reform:
•Uses savings in the health system and fees on industry components to pay for reform
•Implements delivery system reforms to control cost and improve quality
•Creates an independent commission of medical experts to eliminate fraud and waste
•Orders immediate malpractice reform demonstration projects
•Mandates insurance for businesses and individuals
Source: http://i.cdn.turner.com/cnn/2009/images/09/09/obama.plan.pdf
Comparison of House and Senate Bills
Status
Cost
Increased Coverage
Primary Funding Mechanism
House Bill (HR 3962)
Senate Bill (HR 3590)
Passed
Passed
Net ~ $894 B
~ $871 B
36 million
31 million
- Taxes top end of income distribution
- Penalties levied on individuals and businesses who
don’t comply with mandate
-Taxes on “Cadillac” plans
-Savings from delivery system
- Fees on industry participants
Coverage Expansion
Individual Mandate
Employer Responsibility
Medicaid Expansion
-Penalizes uninsured individuals 2.5% of income up
to cost of coverage
-Exempts employers with payrolls under $500K
-Penalizes employers 8% of payroll91if they don't
contribute 72.5% of the premium for individuals;
60% for families
-Expands to 150% of FPL
-Feds pay 100% of cost through 2014,
then 91% thereafter
-Sliding scale subsidies up to 400% FPL
Subsidies
- The greater of $750 per uninsured adult
by 2016 or 2% of income capped at the
national average “bronze” plan premium
-Required to pay a flat fee of $750 for any
employee receiving eligibility subsidies
-Expands to 133% of FPL
- Sliding scale subsidies up to 400% FPL
Comparison of House and Senate Bills
House Bill (HR 3962)
Senate Bill (HR 3590)
Insurance Market Reform
Underwriting
2:1 premium variance based on age
Covers dependents up to 26
Guaranteed issue
3:1 premium based on age
Guaranteed issue
HHS required to negotiate rates with providers
Providers may opt out
Removed from the bill and replaced with a
scheme similar to the Federal Employee
Benefit Program that will be administered by
the federal Office of Personnel Management
and offered through the exchange
Public Option
Insurance
Cooperatives
Insurance Exchange
Provides start-up funding for states to offer
through exchange
Federal exchange 91
Eligibility by employer size: 2013—25 FTEs;
2014—50 FTEs; 2015 and after—100 FTEs;
Provides start-up funding for co-ops in each
state
Offered through the exchange
State exchanges
Open initially to individuals and small
businesses with up to 100 FTEs; 100 or > at
the discretion of each state in 2017
Payment Cuts
DSH Payment
Reduction
Estimated $20.3B reductions
Estimated $43B in reductions for Medicare
and Medicaid
Market Basket
Updates
Implements productivity reductions
Implements productivity adjustments and
reduces the MBU; estimated savings $103B
Comparison of House and Senate Bills
House Bill (HR 3962)
Senate Bill (HR 3590)
Delivery System Reforms
MedPAC with RateSetting Authority
Includes a MedPAC-like body with rate-setting
authority; excludes hospitals through 2019
Value-Based
Purchasing
Reduces payment to facilities with lower than
average quality, providing bonus payments to
high-quality facilities; budget neutral
Readmissions Policy
Innovative Payment
System Pilots
Imaging Services
Reduces reimbursement for all MS-DRGs
based on higher than average readmission
rates
Reduces reimbursement for all MS-DRGs
based on higher than average readmission
rates
Establishes pilots for bundled payments and
accountable care organizations
Establishes pilots for bundled payments and
accountable care organizations
Increases advanced imaging practice
expense utilization
91
Increases advanced imaging practice
expense utilization
Other Reforms
Malpractice Reform
Provides incentive payments to states with
alternative medical liability laws
Authorizes HHS to award grants to states for
the evaluation of alternatives to the current tort
system.
Comparative
Effectiveness
Creates center for CER within AHRQ to
conduct and disseminate broad research with
public/private funding
Silent on cost effectiveness
Creates a private, nonprofit Patient-Centered
Outcomes Research Institute to set national
research agenda and conduct clinical
effectiveness research
Decreasing the Uninsured
The Senate bill’s insurance reforms…
…would reduce the uninsured by an
estimated 31 million.
Estimated Number of Uninsured
Post-Reform
Key Insurance Reforms
•Expansion of Medicaid for All to 133% FPL
•Provision of Sliding Scale Tax Credits Within
the Exchange up to 400% FPL
• Tax Credits for Small Businesses
•Mandates Insurance Coverage for Individuals
•Penalizes Employers Whose Employees
Receive Credits in the Exchange
•Elimination of Exclusionary Insurance
Practices
60
Uninsured Americans (Millions)
•Creation of Insurance Exchanges for the
Individual and Small Group Markets
54
∆ - 57%
40
23
91
20
0
Current
Proposed
Public in Name Only
The Public Option Has Evolved into Something Similar to the Federal Employee Benefit Plans
Key Components of the Multi-State Qualified
Health Plan (MSQHP) Approach
40
•MSQHP plans are administered through the
federal Office of Personnel Management
•At least one MSQHP will be not-for-profit in
each state
•MSQHP will negotiate rates with providers
30
Share Price
•Required to contract with insurers and offer at
least two plans through the Exchanges
Market Reaction to Public Plan Changes
Major Insurance Stocks
20
10
•FEBHP will remain a separate program
Aetna
0
End of:
Q1
Cigna
Q2
UHC
Q3
Q4
Public Co-ops
Public Cooperatives Are Proposed to Bring Additional Competition to the Individual and Small
Group Insurance Markets
Key Components of Co-op Plan
 Authorizes $6 billion in loans and grants to assist with start-up costs and
state solvency requirements
• Loans repaid within five years, grants 15 years
• Priority given to statewide proposals and integrated care models
• Have significant financing from private sources
 Provides funding for at least one co-op per state
• Multiple awards per state will be allowed
Changes in Coverage
Private Insurance Enrollment Will Increase by 17 Million as A Result of Reform
Estimated Change in Insurance Status as a Result of Reform
Americans (Millions)
26
25
15
10
(5)
(5)
(4)
91
(20)
(35)
(31)
Uninsured Non-Group Employer
Market
Sponsored
Source: CBO letter to Harry Reid – 12/19/09
Medicaid
Exchanges
Includes those enrolled
in co-ops and the plans
administered by the
OPM
A Smaller Basket
Changes to the Medicare Market Basket Update Will Reduce Spending by $102.7B over
10 Years by Reducing the Update Factor and Adjusting for Productivity Gains
Reimbursement Impact of Update Factor Reduction*
Example Based on 450-Bed Hospital with $100M in Total Medicare Payments
5
3
1
$ Millions
-1
-3
-5
-7
-9
-11
-13
.25% Reduction
Factor
91
.10% Reduction +
Productivity Adj.
.20% Reduction +
Productivity Adj.
-15
2010
2011
2012
2013
Productivity adjustments
begin in FY 2012
2014
2015
2016
2017
2018
2019
Reduces payments by
~$11M in year 10
*Productivity adjustments are incorporated into this example assuming the average aggregate decrease from 2012 to 2019 is one percentage point.
Reduced Medicare DSH
Medicare DSH Payments Are Drastically Reduced Starting 2015
Anticipated Medicare DSH Reductions Based on Senate Bill
100%
100%
Reduced Medicare DSH
payments save $24.4B over
10 years
80%
60%
40%
25%
20%
0%
Current Payment
Reformed Payment
Providers will also receive an additional payment reflecting uncompensated care costs
Less Medicaid DSH
Medicaid DSH Payments Are Reduced by $18.5 Million over 10 Years
Once the Percentage of Uninsured Is Reduced by 45% Federal DSH Funding Decreases:
State-Specific DSH Funding Is Reduced Based on Funding and Spending Percentage
Post-Reform Federal DSH
Funding Level Compared to 2009
> 99.9% of DSH Allotment Spent
< 99.9% of DSH Allotment Spent
100%
83%
80%
75%
65%
60%
50%
40%
20%
0%
Low DSH States*
Normal DSH States
* Low DSH states are defined as those spending between 0% to 3% of total Medicaid expenditures on DSH payments
Independent Payment Advisory Board
The Senate Bill Establishes a Committee Separate from MedPAC to Contain Cost
Growth
If Medicare Projected Growth
Is Greater than CPI-M
Due Date:
Action:
Jan 15
IPAB Submits Cost Reduction
Proposal to Congress and
MedPAC
Mandated Percentage Point
Reductions in Medicare Growth
Rate
2.00
1.00
0.00
April 1
Aug 15
SFC and House Committees
Report Out Amended Proposal
If Package Is Not Passed, Original
Proposal Goes into Effect
-1.00
-0.5
-1
-1.25
-2.00
2015
2016
2017
-1.5
2018
Caveat: IPAB recommendations will not
apply to hospitals until 2019
Healthcare Delivery System Reform
Both Bills Include Payment Reforms Aimed at Improving the Delivery System
Increase Healthcare “Value”
1.
Electronic Health Records
Accountable Care
Organizations
Bundled Payments
Reduce Hospital
Acquired Conditions
3. Prerequisite
Reduce Preventable
Readmissions
Tactics
Reduce Costs
Improve Quality
Value-Based
Purchasing
2.
The Goal
EHR Infrastructure
The Stimulus Package Lays the Groundwork for Healthcare System Reform by Providing
Carrots and Sticks for Electronic Health Record Adoption
Small Carrot…
…Big Stick
Percentage of HIT Medicare Share Payments
Received Based on When Eligible
Year 1
Year 2
Year 3
Year 4
Percentage of Market Basket Update
Received by Non-Adopters
100%
100%
75%
75%
75%
50%
50%
50%
25%
0%
0%
1st Eligible in:
25%
25%
2010 2013
2014
2015
2016
2015
2016
2017
Pay for Performance
A Value-Based Purchasing Program Would Reduce MS-DRG Payments Overall, But
Provide “Bonuses” for High-Quality Providers
MS-DRG Payment Reduction Under Senate’s
Value-Based Purchasing Proposal
3%
1%
-1%
-1.00%
-1.25%
-1.50%
-1.75%
-2.00%
-3%
2013
2014
2015
2016
2017
Withholds would continue at 2% of all MS-DRG payments after 2017
Hospital-Acquired Conditions
In 2015 the Senate Bill Reduces Reimbursement for Providers with High Rates of HACs
Reimbursement Impact: High Rate of HACs
450-Bed Hospital with $100M in Total Medicare Payments
100
$ Millions
Reduces payments
by $1M annually
95
74th Percentile
and Below
75th Percentile
and Above
Reductions Will Be Applied to Current Year Payments Based on Prior Year
Performance
Reducing Readmissions
Almost twenty percent of Medicare patients
are readmitted within 30 days…
…resulting in $15B in cost to the program…
2005 Medicare Payments Related to Readmits
Unavoidable
Readmits:
$3B
Average Medicare 30-Day Readmission Rate
Potentially
Avoidable
Readmits:
$12B
…leading the Senate to reduce payments for preventable readmissions beginning in FY 2013.
Maximum Proposed Payment Withhold For All
MS-DRGs Over the Threshold
Key Attributes of Proposed Readmit Policy
•Will begin with three conditions and be expanded
in 2013 at the discretion of the HHS secretary
•Payments reduced on all MS-DRG payments for
facilities with higher than average readmissions
•Targeted hospitals will receive bonus payments to
improve transitional care services
-1%
-1%
-2%
-3%
-3%
-5%
-7%
2013
2014
2015 and After
Care Coordination & Collaboration
The Senate Bill Creates a Program to Test Accountable Care Organizations’ Ability
to Improve Quality and Reduce Cost
What Is an ACO1?
How Would the Incentives Work?
• Pilot will start in 2012
• Medicare beneficiaries assigned to an
ACO
• Not required to receive care there
• ACO reports quality measures
• Docs share savings generated if quality
and cost guidelines met
Source: The Brookings Institute; Issue Brief: Accountable Care Organizations; March 2009
Global Payments
The Legislation Will Include Expanded Bundled Payment Demonstration Projects
Sample Inpatient Stay
1: Current Payment Methodology:
MS-DRG Pmt
- 3 Days
Admit
Physician Fee
Schedule (PFS)
Discharge
Home Health
PPS Episode
+ 7 days
Readmission:
MS-DRG Pmt
+ 14 days
+ 19 days
30 Day Episode of Care
2: Proposed Bundled Payment System:
MAC
Payment
MS-DRG + PFS+ Avg.
PAC Cost – “Efficiencies”
– Readmissions
Medicare
Provider
Negotiated Pmts
+ 27 days
+ 30 days
Shifting Risk
Payment System Reforms Will Require Providers to Bear Greater Population-Based
Financial Risk
Degree of Population Risk Transferred to Provider by Payment System
Low
Fee for Service
High
Pay for
Coordination
Additional per
Paid for each unit of
capita
payment
service w/o constraint
based on ability to
on spending
manage care
Pay for
Performance
Episodic
Payments
Shared Savings
Payments tied to
objective
measures of
performance
Payment based
on delivery of
services within
a given
timeframe
Shared savings
from better care
coordination
and disease
management
Reform:
-Value-Based
Purchasing/ HAI
-Readmit Policy
Reform:
- Bundled
Payment
Reform:
- ACOs
Capitation
Providers share
savings from
better care
coordination
and disease
management
Tax-Exempt Criteria
Uneven provision of community benefit combined
with anticipated decreases in the uninsured…
IRS 990 Survey :
Allocation of Community Benefit Provided
100%
80%
60%
40%
91%
40%
20%
0%
60%
9%
Total Hospital
Respondents
Total Community
Benefit Provided
Estimated Number of Uninsured Post-Reform
Uninsured Americans
(Millions)
60
∆ - 66%
18
20
0
Current
Additional Requirements for
Tax-Exempt Hospitals
1. Conduct a community health needs survey
and develop a plan to address needs
2. Adopt, implement, and widely publicize a
financial assistance policy
3. Bill patients who qualify for assistance no
more than amount billed to insured patients
4. Use extraordinary collection methods only
after a reasonable first attempt
54
40
…has led the Senate to propose new
requirements for tax-exempt hospitals.
Proposed
Administrative Simplification
Proposed Reforms Will Force Insurance Plans to Comply with Consensus Operating
Standards or Face A Penalty
Transaction Standard Timeline
Transaction
Adoption
Date
Effective
Date
 Eligibility and Claims Status
Including Rules for Machine-Readable Identification
Cards
7/1/11
1/1/13
 Claims Payment and Remittance, Including EFT
By 1/1/14 All Medicare Payments Will Be Made Using
EFT and Electronic Remittances
7/1/12
1/1/14
 Remaining Transactions (Enrollment, Premium Payment,
and Care Authorization)
7/14/14
1/1/16
Malpractice Reform
Full malpractice reform could reduce
healthcare expenditures between 5% to
9%...
…causing the President to explore demonstration
projects proposed by the Bush Administration.
Total Cost of US Health Care
System ~$2 Trillion
Potential Malpractice Reform
Demonstrations
100%
5%
•Early disclosure of mistakes accompanied
by a negotiated settlement
•Panel of medical experts certifies the
merits of a case before it is brought to trial
75%
50%
Full Malpractice
Reform Could Save
Upwards of $100B
95%
•Mediated arbitration in place of lawsuits
25%
0%
Sources:
1)
Kessler, Daniel P. and McClellan, Mark B., “Do Doctors Practice Defensive Medicine?”, National Bureau of Economic Research Working Paper
No. W5466, February 1996
2)
http://www.washingtonpost.com/wp-dyn/content/article/2009/09/10/AR2009091001865.html
3)
http://www.cbsnews.com/blogs/2009/09/14/politics/politicalhotsheet/entry5310795.shtml
SGR Cuts Delayed
A Separate Defense Bill Passed by Both the House and Senate Delays
Implementation of the SGR Reduction by 60 Days
CY 2009 Conversion Factor
Compared to Final CY 2010
$40.00
36.0666
-21.2%
$30.00
28.4205
$20.00
CY 2009
Final CY 2010
Imaging Utilization
Advanced Imaging Equipment Is Used More Than Is Assumed…the Final
Physician Rule Phases in an Increase in Utilization Rate over Four Years
Equipment Utilization Rate for
Advanced Imaging Services
100%
90%
+ 80%
75%
50%
50%
25%
0%
Current
Proposed
Implications for Hospitals
Reform Brings Challenges and Opportunities for Providers
Challenges
•Coverage gains achieved through payers
reimbursing less than cost
•Population health risk shifted to hospitals
•Pay for performance expands
•Quality measures move from process-based
to outcome-based
•Reimbursement shifts from volume to value
•Tax-exempt status challenges
•Increased physician integration required
Opportunities
•Uninsured population decreases
•Greater demand for services
•EHRs facilitate care coordination
•Payment for disease mgmt increases
•Administrative simplification reduces cost
•Prohibitions on gain-sharing will be
relaxed
•Physicians will be more open to
employment/collaboration
Actions for Hospitals
If Enacted, the Proposed Reforms Will Have a Significant Impact on How Hospitals
Operate…
Key Action Steps
• Improve cash collections and revenue cycle operations
• Examine existing processes to identify those that should be re-engineered to
take advantage of EHRs
• Evaluate performance on current quality measures and begin a campaign to
improve them
• Work to understand the causes of “preventable” readmissions and develop an
action plan to eliminate them
• Strive to continuously improve operating efficiency
• Develop a more integrated relationship with physicians
Actions for Hospitals
…and Plan for the Future
Key Action Steps
• Develop the ability to effectively understand, price and manage population
health risk
• Use scenario planning when making capital budgeting decisions
• Convene a high-level work group to discuss how your organization’s business
model will have to change if these proposals become law
HFMA Resources
HFMA’s Most Recent Payment Reform Whitepaper Explores Steps Providers Should Take to Prepare
www.hfma.org/paymentreform
HFMA Resources
Below Is a Sample of Additional HFMA Resources to Help You Prepare for Payment Reform
“Simulation Game Provides Financial Management Training,” hfm, January 2008, p. 82: This article
describes how Adventist Healthcare leverages a scenario game to educate clinical staff about hospital
finances
Give Nurses the Right Tool and Labor Costs Go Down: This article describes improved demand
forecasting techniques that can increase bed occupancy and reduce the need for agency staffing
Healthcare Cost Containment Newsletter – June, 2008: This issue of the newsletter identifies strategies to
reduce supply and labor costs (available only to Healthcare Cost Containment newsletter subscribers)
What’s Next: The Evolution of Hospital-Physician Relationships: This educational report provides a road
map for physician/hospital alignment and discusses implementation challenges
Financial Implications of Moving to a Physician Employment Model: This article discusses the challenges
of physician employment and provides a decision-making framework.
Integrating Strategic and Financial Planning in Turbulent Times: This article helps you develop financial
projects using sensitivity analysis (available only to Strategic Financial Planning newsletter subscribers)
QUESTIONS
For Questions Regarding This Presentation or Other Aspects of
Healthcare Reform, Please Contact:
Chad Mulvany
Technical Manager
HFMA
1133 Connecticut Avenue
11th Floor
Washington, DC 20036
Office: 202.719.8947
Email: [email protected]
Appendix
Less Medicaid DSH
Specific Scenario State Medicaid DSH Reduction Formulas
DSH Allotment as a % of
Total Medicaid Spending
Low*
Normal
% Allotment
Spent
Initial
Reduction*
Incremental Reduction***
< 99.9%
25%
(% reduction in uninsured) * (27.5%)
> 99.9%
17.50%
(% reduction in uninsured) * (20%)
< 99.9%
50%
(% reduction in uninsured) * (55%)
> 99.9%
35%
(% reduction in uninsured) * (40%)