Transcript Slide 1

MHA Update
Western Michigan Healthcare Financial
Management Association (HFMA)
Nov. 13, 2013
Vickie Kunz
Senior Director, Health Finance
Michigan Health & Hospital Association
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Who is the MHA?
• Advocacy organization representing all hospitals in
Michigan.
• Activities include:
– State advocacy on proposed legislation, including
Medicaid funding and policy activities
– Federal advocacy and policy on Medicare and
Medicaid issues
– MHA Keystone Center – Quality Improvement
Initiatives
– BCBSM Contract Administration Process
• Unique to Michigan
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Payer Issues
• The role of the MHA is to assist in resolving
systematic payer issues.
• Hospital contracts determine many terms and
conditions and take precedence.
• Communicate issues to Marilyn Litka-Klein or
Vickie Kunz at the MHA.
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FY 2014 Medicare MS-DRG Changes
• See hospital-specific analysis claims distributed to
CEOs/COOs/CFOs/RDs via email Oct. 31.
• CMS maintained the 751 MS-DRGs. No major
changes from FY 2013.
• 85% of MS-DRGs have weight change of +/- 6%.
• Some changes may be significant for your hospital.
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Hospital Inpatient Claims Analysis
•
Table 1A – Average Medicare FFS CMI changes by clinical
product line, 2013 to 2014.
•
Table 1B – Average Medicare Advantage CMI changes by
clinical product line.
•
Table 2- Clinical product service line distribution, with
comparisons to Michigan and US.
•
Table 3 – Severity-level distribution of your hospital’s top 50
core DRGs for both Medicare FFS and MA.
•
Table 4 – Average CMI changes using your hospital’s top 50
Medicare FFS core DRGs.
•
All tables include comparisons to Michigan and US.
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Two Midnight Rule
• Additional guidance released by CMS Nov. 1.
• CMS will not conduct post-payment patient status
reviews for claims with dates of admission between
Oct. 1 and March 31, 2014.
• Coding and medical necessity reviews continue.
• CMS reconfirmed that MACs/RACs should evaluate
the physician’s decision to admit based on info
available at time of admission.
• CMS will work with hospitals and MACs to determine
if there are any additional exceptions.
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Continued, Two Midnight Rule
• CMS will proceed with “Probe and Educate” audits for
IP claims submitted by acute care hospitals, LTCHs,
CAHs, and IPFs for claims for admissions Oct. 1 –
March 31.
• Sample of 10 for most hospitals, 25 for larger
hospitals
• Previous CMS guidance indicated it would not audit
CAHs.
• MHA/AHA seeking CMS clarification.
• See Sept. 30 and Nov. 11 MHA Monday Report.
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Continued, Two Midnight Rule
• Providers identified as having moderate/significant
concerns will be subject to additional probe reviews
on claims for Jan. 1 – March 31, 2014.
• The number of claims reviewed will vary based on
hospital size and concern level.
• MHA/AHA continue to pursue delayed enforcement of
the two-midnight policy until Oct. 1, 2014, and seek
additional clarifications from CMS.
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Inpatient Status – Cont.
• Procedures on “Inpatient Only” list would not be
required to meet two midnight requirement.
• Hospitals can submit questions and/or suggested
exceptions to the two-midnight benchmark to
CMS at [email protected].
• Put “Suggested Exceptions to the 2-Midnight
Benchmark” in the subject line.
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Medicare Payment Challenges
• Absent Congressional action, 2% sequestration across-theboard cut continues through FY 2021.
• 2% reduction to annual rate update if hospital fails to comply
with quality reporting program requirements.
• Readmissions Reduction Program – Hospitals at risk for up to
2% payment penalty, increasing to 3% in FY 2015.
• Value Based Purchasing – 1.25% payment withhold, hospitals
can earn back that amount, earn more or earn less.
• 1.25% withhold increases to 2% for FY 2017 and beyond
• Hospital Acquired Condition (HAC) reduction program – 1%
reduction to 25% of hospitals nationally.
• Begins in FY 2015
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VBP & Readm Reduction Program
• Both began Oct. 1, 2012 (FY 2013), FY 2014 = Year 2.
• VBP Program – Funded by 1.25% contribution from
all IPPS hospitals, increasing to 2% in FY 2017.
• Nationally, VBP program is budget-neutral with
hospitals having an opportunity to earn more than
their contribution.
• Readmissions reduction program penalty increased
from 1% to 2% in FY 2014 and then increasing to 3
% in FY 2015.
• Unlike VBP program, readm reduction program is
not budget neutral.
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Inpatient Quality Reporting Program
• For 2014 payment determinations, hospitals required to
report on a 55 quality measures.
• For FY 2015, hospitals required to report on 59 measures.
• For FY 2016, hospitals required to report on 57 measures in
order to receive the full IPPS marketbasket update.
– Hospitals that fail to comply are subject to a 2.0 percentage
point reduction to the IPPS marketbasket update for the
applicable year.
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HAC Reduction Program Overview
• ACA-mandated – must start in FY 2015
• First program policies outlined in 2014 rule
• 1% reduction in IPPS payments for hospitals with
highest HAC “scores”
− Would penalize 25 percent of hospitals nationally
− Expected to reduce IPPS payments by about $300 million
annually.
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2% Sequestration Cut
• Absent federal legislation, cuts continue through FY 2021.
• 2% cut was applied to Medicare FFS claims beginning for dates
of service on/after April 1.
− effective 2013 – 2021
− mandated by the Budget Control Act of 2011.
• Michigan annual impact projected at $144M.
− IPPS payments reduced $95 million
− OPPS payments reduced $34 million
• May apply to MA payments depending upon hospital
contractual agreement with MA plans.
• Also applies to other Medicare payments including GME, bad
debts, EHR incentive payments.
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Medicare Advantage Plans
• As of July 2013, 28 plans in Michigan, with 493,000 or
approximately 27% of Michigan’s 1.8 million Medicare
beneficiaries enrolled.
− Up to 20 plans in some counties.
• Review MA payment rate for all plans.
• CAH entitled to Medicare cost reimbursement.
• Each MA plan may determine own utilization model and is
not required to maintain electronic transactions.
• Many MA have instituted “RAC-like” utilization programs.
• Matrix of MA plans by county available at MHA website –
updated quarterly, with MHA Monday Report article.
− Sept. 9 Monday Report.
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MA Plans & Sequestration
• CMS payments to plans were reduced for enrollment
periods beginning on/after April 1, 2013.
• Individual hospital contracts govern whether payments
will be reduced.
• In cases of non-contracted plans, plans have discretion
whether to pass the 2% cut on to hospitals.
• See May 13 MHA Monday Report.
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Wage Index - CBSA Definitions
• CMS did not make any changes to the current
CBSA definitions based on the 2010 census but
indicates that it will do so for FY 2015.
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Wage Index Timeline
Sept. 13 – Release of PUFs for FY 2015 AWI
Oct. 1 – Effective date of FY 2014 AWI
Oct. 9 – MHA Wage Index Workshop (webinar) (Free)
FY 2015 AWI will be based on data from cost report FYEs:
Sept. 2011 – Aug. 2012.
Hospital staff have until Nov. 21 to request any needed
changes to data.
More aggressive deadline than past years
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2014 Deductibles & Coinsurance
• CMS recently announced.
• Part A deductible increasing from $1,184 to $1,216.
• Daily coinsurance:
• $304 for days 61-90.
• $608 for lifetime reserve days
• $152 for days 21-100 of extended care services
in a SNF.
• See Nov. 4 MHA Monday Report.
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Medicaid Issues
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Healthy Michigan Plan
• Expected to cover about 450,000 low-income adults who are currently
uninsured but fail to meet current eligibility requirements.
• Who would qualify?
− Individuals that are at least 19 years old.
− Those that are single, working with annual earnings up to $15,856 or
in a family of four with earnings up to $32,499.
• Based on 138% of 2013 FPL
• Governor Snyder signed bill into law Sept. 16.
• Would take effect 90 days after legislative session ends.
• Session expected to end Dec. 12.
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Cont., Healthy Michigan Plan
• Waiver submitted to CMS Nov. 8.
• MSA expects quick turnaround
• MSA has been in contact with CMS prior to submission
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Healthy Michigan Implementation
• Uncertainty surrounding status of individual applications
that may be submitted before law takes effect in midMarch 2014.
• In the mean time…
– MDCH developing a state-specific Healthy Michigan application
– Expansion population will not be penalized for lacking coverage
for first three months of 2014
• MHA working with coalition partners on ways to
identify/track potential enrollees now
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Medicaid Presumptive Eligibility
• Presumptive eligibility = immediate access to services,
coverage for those services
• ACA expands PE privileges for hospitals
• CMS banned use of outside entities in future PE
determinations
• MHA working with AHA to urge the reversal/modification
of this ban
• MHA working with DCH/DHS on getting state guidance
to hospitals as soon as possible
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Coverage on the Exchange
• Single portal of application for 36 states, including
Michigan: www.Healthcare.gov
• What does coverage look like?
– No denial for pre-existing conditions
– Insurers must cover a minimum set of services called essential
health benefits
– Must organize their plan offerings into five levels of patient costsharing from least to most protective
– No gender- or illness-based rate setting
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Health Insurance Exchange
• Health Insurance Marketplace/Exchange opened Oct. 1
for enrollment – lasts through March 31
• Launch dominated by technical glitches, website failures;
some improvement in recent weeks
– Improved speed
– Site now permits users to see plans/prices without creating an
account
– Additional staffing in call center, Web chat feature
• But… many still encountering problems and have
resorted to paper/phone application
• Site may not be fully functional until end of November
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Michigan’s Exchange
What does Michigan’s exchange look like?
• 13 insurers offering multiple products
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Michigan’s Exchange
• Variety of plans (162), premiums and subsidies
• Coverage begins as soon as January 1, 2014 for those
enrolled by Dec. 15
• Wide range of prices dependent on age, tobacco use,
county, etc.
– Less than $140 to more than $1500 before subsidies
– Michigan average: about $300 before subsidies
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Who can receive a subsidy?
• Individuals with household income between 100 and 400
percent of the FPL ($11,400 and $45,960)
• Between 100 and 133 percent of the FPL: choose the
exchange or a Healthy Michigan Medicaid managed care
plan
• Plans available through Medicaid are likely to be lower
cost; co-pays, deductibles and premiums will apply to
some higher-income Healthy Michigan Medicaid
enrollees
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Estimating Hospital Financial Impact
• Hospital-specific model available for purchase
at $5,000.
• See MHA Advisory Bulletin # 1350, dated
9/16/13 for link to webinar PPT and recording.
• In general, most believe bad debts will
increase as individuals enroll in plans with
higher deductibles/copays.
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Medicaid Payment Reform
• Jan. 1, 2014 target implementation – MSA is considering a
phase-in approach.
• Seven meetings held.
• Representatives include small, medium, and large hospitals
and CAHs
• Several ideas discussed:
· statewide inpatient rate with hospital adjustors,
· Increase in output payments financed with reduced input rates
· Recognition of hospital mission in payment adjustors.
· DSH
· Hospital Rate Adjustment
• No definitive timeframe for MSA decision.
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Medicaid Rate and Weight Update
• MSA released a proposed policy to update hospital DRG rates
and relative weights effective Jan. 1, 2014.
• Final policy expected by Dec. 1.
• Implementation of MS-DRG Grouper 31.0, implemented by
Medicare Oct. 1.
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Integrated Care Project
• Phased-in implementation of pilot project expected
to begin July 1, 2014.
• Hospitals responsible to negotiate payment
parameters in their contracts.
• See Aug. 26 Monday Report for link to CMS
FAQ document.
• Regional implementation
– 4 regions comprised:
– 8 SW counties
Macomb County
– UP
Wayne County
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Integrated Care Project – Cont.
• MSA is selecting plans to serve as ICOs with plans required to
undergo readiness reviews.
• Simultaneously, MSA is working to finalize an MOU with CMS
to specify the conditions of Michigan’s wavier.
• No guarantee of Medicare rates for I/P and O/P services
• Ambiguity in rate for SNF payments
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DSH Audits
• Beginning with audits of FY 2011 DSH
ceilings, hospitals subject to DSH payment
recoveries if audits indicate DSH payments
exceeded their actual DSH ceilings.
• Prior year audit reports available on MSA’s
website.
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DSH Audits – Cont.
• Prelim FY 2010 DSH audit results indicate that 21 hospitals
would have had payment recoveries totaling $54 million.
• FY 2010 DSH Payments received by these hospital include:
• $ 6 million - regular $45 million pool
• $ 1 million - small hospital pool
• $18 M - tax-funded OP Uncompensated Care pool
• $52 million- Indigent Care Agreement
• $13 million - Governmental hospital
• 2010 audit report due to CMS 12/31/13.
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Revised DSH Policy
• MSA will use a multiple-step DSH process:
– Initial DSH calculation
– Interim DSH settlement – 2 years after
payment
– Final DSH audit-related redistribution – 3 years
after payment
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DSH Calculation
• FY 2011 Step 2 - MSA expects to complete by Jan. 31,
2014.
• FY 2011 Step 3 - Audits expected to begin March 2014.
• FY 2012 Step 2 – MSA expects to complete by April 30,
2014.
• FY 2013 Step 1 - completed by MSA late July / early Aug.
2014 – Hospital opportunity to review MSA data and opt
to decline or reduce DSH payments.
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Medicaid Interim Payments
• MSA released a final policy to change from bimonthly to monthly MIP and CIP payments
effective July 1, subject to CMS approval.
• This change will take effect Nov. 11.
• MIP and CIP payments will be made the second
Thursday of each month.
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Primary Care Services
• ACA mandated that Medicaid pay Medicare rates
for certain primary care services provided by
certain qualified providers:
• Family Medicine, General Internal Medicine,
Pediatrics
• MSA began paying for services provided through
Medicaid FFS but was awaiting CMS approval for
its HMO methodology.
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Cont., Primary Care Services
• MSA anticipated that the increased payments
would be distributed to Medicaid HMOs in late
October.
• HMOs are responsible for distributing these
payments to eligible providers as soon as
possible.
• Provider review and appeal procedure will be
implemented.
• See Oct. 28 MHA Monday Report.
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MHA Resources
•
Monday Report is available FREE to anyone and is distributed via email each
Monday morning.
– Go to website and select “Newsroom”, then Monday Report
•
MHA Monday Report – electronic publication issued weekly
•
Request password if you don’t have one.
– Email Donna Conklin at [email protected] to obtain MHA member ID
number
•
Advisory Bulletins – Extensive communications available only to MHA
members, as needed. (Require password to obtain from website).
•
Hospital specific mailings as needed for various impact analyses, etc.
•
Periodic member forums
•
See mha.org for other resources.
•
Monthly Financial Survey (MFS) provides free benchmarking of financial and
utilization statistics.
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???Questions???
Vickie Kunz
Senior Director, Health Finance
Michigan Health & Hospital Association
110 West Michigan Avenue, Suite 1200
Lansing, MI 48933
Phone: (517) 703-8608
Fax: (517) 703-8637
email: [email protected]
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