Transcript MEDICARE WAGE INDEX

MHA Update
HFMA
Western Michigan Chapter
January 19, 2012
Vickie R. (Seal) Kunz
Senior Director
Health Finance
1
Pending Auto No-Fault Legislation
• House bill 4936 would impose lifetime
caps on auto injury benefits between
$500,000 and $5 million.
• Mandates government price controls in
form of workers comp fee schedules for
provider payments.
2
Cont., Auto No-Fault
• Sets attendant care and nursing
payment rates.
• Blocks voters from their constitutional
right to seek a referendum to overturn
legislation.
3
Cont., Auto No-Fault
• As a result of aggressive advocacy
efforts, vote delayed on HB 4936 but
expected by Jan. 31.
• SB 649 is awaiting action by Senate
Committee on Insurance.
4
Cont., Auto No-Fault
• If passed, traumatically injured people would
have grossly inadequate coverage for care,
rehabilitation and accommodations.
• Millions of dollars cost-shifted from for-profit
insurance companies onto Medicaid and
taxpayers.
• Auto insurers NOT required to reduce
premiums.
5
Cont., Auto No Fault
• Hospitals asked to re-connect with
lawmakers regarding Auto No Fault and
encourage their opposition to SB 4936.
• MHA talking points available dated
9/30/11.
6
Medicare
•
•
•
•
•
BCA of 2011 - 2% Sequestration Impact
Readmissions Reduction Reports
Physician Rate Cut
MedPAC Recommendations
FY 2013 Wage Index Timeline
7
Debt Reduction - Impasse Impact
• Mandated Medicare FFS 2% across-the-board
sequestration effective 2013 – 2021.
• Michigan annual impact projected at $144M.
• Takes effect Jan. 1, 2013, unless Congress
takes other action.
• Hospital-specific analysis distributed Oct. 26.
8
FY2013 Wage Index Timeline
• FY 2013 AWI using data from cost report FYEs:
– Sept. 2009 – Aug. 2010
• Feb. 8 – Deadline for completion of desk reviews and data
transmission to CMS by FIs/MACs.
• Feb. 13 – Deadline for FIs/MACs to notify state hospital
associations regarding hospitals that fail to respond to issues
raised during desk reviews.
• Feb. 21 – CMS release of revised PUFs
• Will become effective Oct. 1, 2012, for IPPS.
9
508 Reclasses
• Extended Oct 1 to Nov 30, 2011.
• Affected hospitals will be assigned a
special wage index effective for Oct and
Nov.
• IPPS and OPPS claims will be
reprocessed no later than Dec. 31, 2012
in accordance with TPTCCA.
– Temporary Payroll Tax Cut Continuation Act of 2011
10
Physician Fee Schedule
• 27% Medicare physician payment cut
delayed until March 1.
• Rule implements 25% multiple
procedure payment reduction to
professional component of advanced
imaging services.
11
Readmissions Reduction Program
• Effective FY 2013 (Oct. 1, 2012)
• CMS will use discharge data from 3year period, July 1, 2008 – June 30,
2011.
• Will reduce Medicare IPPS FFS
payments for every Medicare FFS
discharge based on 30-day riskadjusted readmission rates for heart
attack, heart failure and pneumonia.
12
Cont., Readmissions Reduction
• Based on data from July 1, 2007 – June 30, 2010,
Michigan IPPS payments would be reduced by $15
million.
• Hospitals with higher than average risk-adjusted
readmission rates will be subject to 1% payment
reduction for all FFS IPPS discharges.
– Payment reduction increasing to 3% in FY 2015
– CMS adding other conditions
• Hospital-specific analysis distributed Dec. 21.
13
Mandatory Medicare Delivery System Reform
FY 2013
Inpatient
Readmissions
• Implemented
October 1, 2012
(FY 2013)
• 1% reduction in
FY 2013,
increasing to 3%
in FY 2015.
• Expected to
reduce Michigan
reimbursement
by $458 million /
10 years.
FY 2015
Inpatient ValueBased
Purchasing
Health CareAcquired
Conditions
EHR Meaningful
Use (ARRA)
• 1% withhold
Implemented
October 1, 2012
(FY 2013),
increasing to 2%
in FY 2017.
• Budget neutral;
redistributive
within PPS
system.
• 1% payment
• Medicare
penalty
payment
• Implemented
penalties
October 1, 2015
assessed against
(FY 2016)
eligible hospitals
• Expected to
and physicians
reduce Michigan
that fail to be
inpatient hospital
meaningful users
reimbursement
by October 1,
by $ 47 million/10
2014 (FY 2015).
years.
Other Reports Distributed
• Dec 6
FY 2012 HHA Final Rule
• Dec 8
FY 2012 Medicare MS-DRGs
• Due to data privacy requirements, distributed via
“snail mail” on CD.
15
MedPAC Recommendations
• 1% Market Basket Update rather than Full Update
• Equalize Medicare payment rates for evaluation and
management (E/M) services between hospital
outpatient departments and physician office settings.
– Estimated to reduce payments for E/M clinic visits
by 70+ percent.
– Michigan impact $56 million annually.
16
Medicare Inpatient Margins
INPATIENT
20%
1997
2009
0.4%
5.1%
10%
0%
Medicare Outpatient Margins
OUTPATIENT
0%
-10%
-20%
-8.8%
2009
-14.2%
1997
-12.5%
10%
Medicare Advantage Plans
• As of October 2011, 29 plans in Michigan, with 412,000 or
approximately 24% of Michigan’s 1.7 million Medicare beneficiaries
enrolled.
– Up to 19 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.
– See Nov. 7 Monday Report for latest info
19
Michigan MAC Transition
• Transition from fiscal intermediary National
Government Services (NGS) for Part A and
Wisconsin Physician Services (WPS) as Part B
carrier.
• Sept 30, 2011 – MAC contract awarded to WPS
• Award protest received – GAO decision expected
Feb. 2012.
• MAC will perform Medicare FFS claims processing,
enrollment, education, provider audits.
20
Medicaid Issues
21
FY 2012 Budget
• $14.7 million cut to graduate medical
education (GME) payments.
– 100% of cut will be applied to FFS GME.
• No cuts to provider rates.
• Tax-funded Outpatient Uncompensated Care
DSH pool reduced from $60 million to $50.4
million.
• HRA pool increased from $686 million to $736
million.
22
FY 2013 Budget
• Executive budget recommendations to
be released Feb 9.
• Action to begin in Senate, followed by
House.
23
$29.5 Million Budget Appropriation
• Included in FY 2012 budget appropriation as
“one time funding”.
• Funded by state GF and matching federal $—
no associated provider tax.
• Rural and sole community hospitals (SCHs)
• Payment to individual hospital or system
limited to no more than 5 percent of pool.
24
Cont., $29.5 Million Pool
• MSA opted to distribute these funds as
part of monthly HRA payments.
• $2.9 million paid monthly
– Dec 2011 – Sept 2012
• See MHA e-mail from Jan. 12.
25
Cont., $29.5 Million Pool
• MSA defined rural hospitals as:
• not more than 50 staffed beds
– Occupied beds used as a proxy.
• located outside an MSA or
• in a MSA but within a city, village or
township with population of 12,000 or
less and county population of 165,000
or less.
– Based on 2000 census.
26
Cont., $29.5 Million Rural SCH Pool
• Rural hospitals - FY 2010 unreimbursed
costs for Medicaid outpatient FFS and
HMO services.
• Rural & SCHs – add-on payment for
2009 deliveries if hospital still provided
OB services in 2011.
27
Engler EO Reductions
• $45.9 million reduction to inpatient DRG and
rehab per-diem payments.
– Carry forward from 2002, 2003, & 2005 E/Os
• Historically, MSA recouped via lump sum
reduction to MIP amounts in Aug/Sept.
• MSA proposed policy would eliminate E/O
recovery and achieve savings in budget neutral
manner via increased FFS QAAP tax.
• MSA has not yet finalized policy – impacts MACI
pool.
28
Medicaid Rates
• MSA revised DRG rates effective Jan. 1
to incorporate updated wage and cost
data.
• Move to Grouper 29.0, consistent with
Medicare.
• DRG weights available on MDCH
website.
• Capital rates to be updated April 1.
29
OPPS Payment Factor
• Effective Jan. 1, Medicaid pays 55.3%
of Medicare rates, excluding an area
wage adjustor for OPPS and ASC
services.
30
Statewide DRG Rate
• MSA continues to review
recommendations regarding the move
to a statewide DRG rate with
adjustments for teaching, outliers and
wage index.
• Earliest implementation Jan 1, 2013.
31
Federally-Mandated DSH Audits
• Beginning with state FY 2011,hospitals will be subject
to DSH payment recoveries by the state if Medicaid
DSH payments to the hospital were in excess of the
hospital’s DSH using 2011 actual data.
– FY 2011 DSH audits expected to occur in FY 2014
– Includes all DSH payments to hospital (tax-funded, ICA, etc)
• Hospitals encouraged to review their MSA-calculated
DSH-ceiling info annually.
– Send request to Brian Keisling at MSA.
([email protected])
32
Cont., DSH Audits
• Prior year audit reports available on
MSA’s website.
• Timing for FY 2009 audit similar to
FY 2008.
• Kick-off session tentatively to be held in
February, followed by hospital data
request.
• CG Merger: CliftonLarsonAllen LLP
33
Provider Tax Programs
• Through FY 2011, these programs have resulted in a
net benefit to Michigan hospitals of over $3.5 billion.
• Michigan FFS program implemented in FY 2003.
• Michigan HMO program implemented in FY 2007,
effective Jan 1, 2007.
– First state in the US with hospital provider tax
program distributed through HMOs.
• Tax-funded DSH implemented FY 2008.
• FY 2010 psych QAAP received CMS approval.
• In FY 2011, these programs resulted in a net benefit
of $740 million, with FY 2012 benefit expected to be
the same.
34
GME & HRA Transactions
•
•
•
•
•
•
•
•
Jan GME Payments
Jan HRA Payments
Jan HRA Tax Bills Due
Feb GME Payments
Feb HRA Payments
Feb HRA Tax Bills Due
Q2 Psych HRA Payments
Q2 Psych Tax Bills Due
Feb 2
Feb 3
Feb 17
Feb 21
Mar 5
Mar 19
Apr 5
Apr 19
35
Integrated Care – Dual Eligibles
• Michigan is one of 15 states
• Approximately 211,000 individuals, up from 199,000
in 2008.
• $8 billion total
– $4 billion Medicaid
– $4 billion Medicare
• MDCH reiterated its goal to design a model that would
simplify coverage for these beneficiaries.
• MDCH intends to submit a proposal to CMS by
April 1 regarding its plan to improve care for these
individuals.
36
Continued, Integrated Care
• 4 Workgroups:
– Care Coordination & Assessment
– Education, Outreach & Enrollee
Protections
– Performance Measure & Quality
Management
– Service Array & Provider Network
37
Issues
• Medicare rates for Medicare services
• Improved coordination does not equal
added administrative burden
• Contracted entities required to have
electronic claims processing/payments
• Utilization management should be
consistent with Medicare
• Medicare reporting for IME/GME/DSH
38
payment purposes must be required.
BSBSM Annual Updates
• Inpatient rates updated 2.6 percent
effective for fiscal years after Jan. 1,
2012.
• Capital rates increased 1.36 percent.
• Outpatient surgery rates updated 1.95
percent effective July 1, 2011.
39
Days in A/R
• Based on 37 hospitals participating in
MHA Monthly Financial Survey (MFS)
• Nov 2011 versus Nov 2010
•
•
•
•
Medicare – up from 29 to 33 days
Medicaid - down from 47 to 42 days
BCBSM – up slightly from 24 to 25 days
Overall – up from 43 to 45 days
40
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 provides free benchmarking of
financial and utilization statistics.
41
Medicare Reports & Information
•
•
•
•
Proposed Rules (IPPS, OPPS, SNF, IRF, IPF, HHA)
Final Rules (IPPS, OPPS, SNF, IRF, IPF, HHA)
Hospital Acquired Condition (HAC) Reports
Quarterly Value Based Purchasing (VBP)
–
–
–
–
–
Quality Indicators
QI Trends
30-day mortality rates (updated annually by CMS)
30-day readmission rates (updated annually by CMS)
HCAHPS
• Recovery Audit Contractor (RAC) Reports
– 1-day stays
– Transfers to SNF
42
???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]
43