Transcript MEDICARE WAGE INDEX

MHA Update
HFMA
Western Michigan Chapter
November 17, 2011
Vickie R. Seal
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 see a referendum to overturn
legislation.
3
Cont., Auto No-Fault
• As a result of aggressive advocacy
efforts, vote delayed on HB 4936 until
after Thanksgiving recess.
– Legislative session resumes Nov. 29.
• 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.
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Medicare
•
•
•
•
Federal Deficit Reduction
Physician Fee Schedule Final Rule
Home Health Final Rule
Outpatient Hospital Final Rule
6
Federal Deficit Reduction
• Work began in August by Joint Select Committee
on Federal Deficit Reduction.
• Committee charged with finding $1.2 trillion in
savings over 10 years.
• Michigan represented by U.S. Reps Fred Upton
and Dave Camp.
• Committee must make recommendations by
Nov. 23, with Congress to vote by Dec. 23.
• Absent agreement, mandated Medicare FFS 2%
across-the-board sequestration takes effect Jan.
1, 2013 – 2021.
7
Budget Deficit Options
• Bad debt payment reductions – all settings
• Phase down to 25% or eliminate 100%
• Coding Adjustment Reductions
– 3.0% in FY 2013 & 2014 (IPPS)
• Modification of rural special status programs
– CAH, SCH and MDH programs eliminated
– CAH cost-based payments reduced from 101% to
100% for inpatient, outpatient and swing bed.
• Graduate Medical Education
– Reduce IME reimbursement from 5.5% to 2.2%
– Reduce IME reimbursement by 10%
– Limit GME reimbursement based on 2010 resident
salaries
8
Cont., Budget Deficit Options –
Post-Acute Care MB Update Freeze
• No market basket update for 8 years
beginning in 2014
• IRF - Hospital based and free-standing inpatient
rehab facilities
• SNF – Hospital based skilled nursing
facilities
• LTCH – Free-standing long term acute
care hospitals
FY2013 Wage Index Timeline
• Oct. 4, 2011 – Release of PUF for FY 2013 AWI
• Oct. 19 - MHA Wage Index Workshop (webinar)
– Materials available upon request.
• Dec. 5 – Deadline for data change requests.
• FY 2013 AWI will use data from cost report FYEs:
– Sept. 2009 – Aug. 2010
• Will become effective Oct. 1, 2012, for IPPS.
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OPPS Final Rule
• Conversion factor up from $68.88 to $70.02.
• Net rate change is a 1.7% increase after:
↑ Up 3.0% marketbasket increase
↓ Down 1.0% percentage points – ACA-mandated
productivity reduction.
↓ Down 0.1 percentage point ACA-mandated
reduction.
↓ Down 0.22 percent budget neutrality adjustment
for cancer hospital payment adjustment.
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Cont., OPPS Final Rule
• Use FY 2012 IPPS Wage Index
– Including all reclassifications, adjustments
and applications of rural floor
• Labor share continued at 60% for all
hospitals.
12
Cont., OPPS Final Rule
• CMS adopted its proposal to establish
an independent review body to evaluate
physician supervision requirements.
• Expand APC panel to add 2 CAH reps
and 2 small rural PPS hospital reps.
• Panel’s preliminary decisions posted on
CMS website with 30 day comment
period.
13
Cont., OPPS Final Rule
• CMS will extend non-enforcement of
direct supervision requirement through
2012.
– CAHs
– Small rural with 100 or fewer beds
14
Cont., OPPS Final Rule
• For 2012 payment determinations,
hospitals were required to successfully
report on 15 quality measures.
• For 2013 payment determinations,
hospitals currently reporting on 23
quality measures.
• For 2014, hospitals required to report on
26 quality measures.
– List available on pages 1138-1140 of display copy of Federal
Register.
15
Cont., OPPS Final Rule
• CMS removed 10 procedures from
inpatient only list.
– See pages 814-815 of display copy of
Federal Register.
16
Cont., OPPS Final Rule
• Hold-harmless TOPs paid to rural
hospitals with 100 or fewer beds and
SCHs will expire Dec 31.
• Section 508 reclassifications expired
Sept 30.
17
Cont., Medicare OPPS
• A 6.2% decrease to the cost outlier threshold,
decreasing it from $2,025 to $1,900.
– Will result in more cases qualifying for an outlier
payment.
• A 7% increase in the packaging threshold for
drugs, biologicals and radiopharmaceuticals
from $70 to $75.
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Cont., OPPS Final Rule
• Final Rule to be published in Nov. 30 Federal
Register.
• Effective Jan. 1, 2012.
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FY 2014 VBP Changes
• Year 2 Inpatient Value Based
Purchasing
• Pool funded by 1.25% reduction to IPPS
payments.
• Funds redistributed to hospitals based
on quality performance.
• CAHs, children’s, psych, rehab
hospitals currently excluded from VBP.
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Cont. FY 2014 VBP Changes
• Assess quality performance based on 3
domains:
– 45% clinical process of care (down from
70% for FY 2013)
– 30% patient experience of care
(unchanged from FY 2013)
– 25% patient outcomes (new for FY 2014)
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Home Health Final Rule
• Effective Jan 1, 2012.
• Payments expected to decrease by
approximately 2.4%.
• ↑ 2.4% MB increase
• ↓ 3.79% coding adjustment
• ↓ 1.0 ACA mandated cut
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Cont., Home Health Final Rule
• Rule allows hospital and post-acute care
physicians to satisfy requirement for a faceto-face encounter.
• CMS will apply the ACA-mandated 3% addon to the national standardized 60-day
episode rate, national per-visit amounts,
LUPA add-on amount, and NRS conversion
factor for services provided in rural areas.
– By law, this adjustment continues through 2015.
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Physician Fee Schedule
• Absent changes, Medicare physician
payments will decrease by
approximately 27.4% beginning Jan 1.
• Rule implements 25% multiple
procedure payment reduction to
professional component of advanced
imaging services.
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Cont., Physician Fee Schedule
• Implements 3-day window payment
provisions which will pay physicians at
lower facility rate for services provided
in physicians office owned and operated
by hospital and provided within 3 days
of hospital admission.
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Mandatory Medicare Delivery System Reform
FY 2013
Inpatient
Readmissions
Inpatient ValueBased
Purchasing
• Implemented
• 1% withhold
October 1, 2012
implemented
(FY 2013)
October 1, 2012
• Reduces
(FY 2013),
Medicare
increasing to 2%
reimbursement
in FY 2017.
by $7 billion / 10
years nationwide. • Budget neutral;
redistributive
within PPS
system.
FY 2015
Health CareAcquired
Conditions
EHR Meaningful
Use (ARRA)
• Implemented
October 1, 2015
(FY 2016)
• Reduced
Medicare
inpatient hospital
reimbursement
by $ 1.4 billion /
10 years
nationwide.
• Medicare
payment
penalties
assessed against
eligible hospitals
and physicians
that fail to be
meaningful users
by October 1,
2014 (FY 2015).
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%
Projected Impact - FY 2012 Medicare Rules
IPPS
Final
OPPS
Prop
Rehab
Final
Psych
Final
LTCH
Final
HH
Prop
SNF
Final
Projected
TOTAL
Marketbasket Update
134
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5.4
5
4.2
2.7
193
ACA Productivity Adj
-45
-18
-2
-0.4
-1.6
-1.1
-68
Other ACA Mandated Adj
-4.5
-1.5
-0.2
Coding Adj
-92
Net Rate Update
Cancer Hospital/BN Adj
Updated Wage Index/508
Expiration
-0.2
-5.5
-98
-11
-11
-119
-33
-1.8
-0.9
-1.7
Other
55
16.5
0.7
0.4
0
Statewide
-73
-5
2.1
4.1
0.7
(in millions)
-6
-1.1
-158
72
-5
?
-76
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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
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Michigan MAC Transition
• Transition from fiscal intermediary National
Government Services (NGS) for Part A and
Wisconsin Physician Services (WPS) as Part B
carrier to WPS as Medicare Administrative
Contractor.
• WPS will perform Medicare FFS claims processing,
enrollment, education, provider audits
• Workload will transition over next 6 to 9 months.
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Medicaid Issues
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5010 Testing
• Providers must submit all claims using
the X12 version 5010.
• Providers who do not convert by Jan. 1,
2012, will have their claims rejected.
• Hospitals and/or their billing agents are
strongly encouraged to conduct
business-to-business testing.
– As of August, few hospitals have
participated in testing.
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Cont., 5010 Testing
• Link to MSA policy:
http://www.michigan.gov/documents/mdch/M
SA_10-54_339330_7.pdf
•
• Link to MSA website dedicated to 5010:
http://www.michigan.gov/mdch/0,1607,7-1322945_42542_42543_42546_42552_42696256754--,00.html
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FY 2012 Budget
• $14.7 million cut to graduate medical
education (GME) payments.
– 100% of cut will be applied to FFS GME.
• GME proposed policy released Oct. 28, with
comments due Nov. 29.
• No cuts to provider rates.
• Tax-funded Outpatient Uncompensated Care
DSH pool reduced from $60 million to $50.4
million.
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• HRA pool increased by $50 million.
$29.5 Million Budget Appropriation
• Included in FY 2012 budget appropriation.
• Rural and sole community hospitals.
• Payment to individual hospital or system
limited to 5 percent of pool ($1,477,000).
• MSA has not finalized allocation
methodology.
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Health Insurance Claims Assessment Act
• FY 2012 budget includes a 1% assessment
on all health insurance claims (excluding
Medicare) effective Jan. 1, 2012.
• Estimated to generate $400 million, which
would be matched with $800 million in federal
funds.
– replaces state revenue from HMO use tax, which
is expected to be disallowed by the CMS.
• Few details available to date.
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Engler EO Reductions
• $45.9 million reduction to inpatient DRG and
rehab per diem payments.
– Carry forward from 2002, 2003, & 2005
Executive Orders
• 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.
– Comments due Nov. 29.
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Medicaid Rate Rebasing
• Implemented July 1, 2011.
• MSA included HMO encounter data for
developing rates and MS-DRG relative
weights and develop statewide rate for critical
access hospitals.
• MSA continued historical reimbursement
policy regarding limited base price, truncated
mean and incentive calculations.
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Cont. Medicaid Rates
• MSA will revise rates effective Jan. 1 to
incorporate updated wage and cost
data.
• Move to Grouper 29.0, consistent with
Medicare.
• Proposed policy released Oct. 28, with
comments due Nov. 29.
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Federally-Mandated DSH Audits
• Beginning with state FY 2011 (audit in
2014),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.
• Hospital DSH payment recoveries of FY 2011 DSH
payments that exceed actual 2011 cost.
• Hospitals encouraged to review their MSA-calculated
DSH-ceiling info.
– Send request to Brian Keisling at MSA.
([email protected])
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DSH Payments
• Hospitals encouraged to review their MSAcalculated DSH-ceiling info. annually.
– Send request to Brian Keisling at MSA.
([email protected])
42
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.
43
Cont., Provider Tax Programs
• Effective July 1, 2011 federal match rate
(FMAP) decreased from previous levels.
• Results in higher tax to support QAAP pools.
• FY 2012 MACI Pool sizes not yet
available.
– Hospitals encouraged to review preliminary
payment amounts and their cost/charge
limits upon receipt of MSA
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correspondence.
Historical Info - QAAPs
• See MHA Advisory Bulletin # 1303 in
Feb. 18, 2011 weekly mailing.
– Provides description of tax base and
revenue distribution for each of the four
QAAPs
• FFS, HMO, DSH, Psych
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GME & HRA Transactions
•
•
•
•
•
•
•
•
Nov GME Payments
Nov HRA Payments
Nov HRA Tax Bills Due
Dec GME Payments
Dec HRA Payments
Dec HRA Tax Bills Due
Q1 Psych HRA Payments
Q1 Psych Tax Bills Due
Nov 21
Dec 6
Dec 20
Dec 27
Jan 12
Jan 26
Oct 5
Oct 19
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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
• 4 workgroup meetings to be held Nov./Dec. 2011.
– First meeting held Nov. 9.
• 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
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individuals.
Continued, Integrated Care
• 4 Workgroups:
– Care Coordination & Assessment
– Education, Outreach & Enrollee
Protections
– Performance Measure & Quality
Management
– Service Array & Provider Network
48
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.
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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 provides free benchmarking of
financial and utilization statistics.
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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
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???Questions???
Vickie Seal, 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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