Medicare Payments to Providers Are Carved, Sliced and Chopped by Sequestration

by Phil C. Solomon on March 24, 2013

in Medicare - Medicaid

2% Sequestration Cuts Take a Big Bite Out Of Medicare Reimbursements

 

MedicareCARVED – Sequestration is defined as taking legal possession of assets until a debt has been paid off (Merriam Webster). The federal government is automatically cutting the federal budget by slicing Medicare reimbursements by 2%.

On January 1st of this year, sequestration was supposed to go into effect. However, the U.S. Congress passed P.L. 112-240 “American Tax Relief Act of 2013″ (aka fiscal cliff) delaying the start of sequestration until March 1st.

How will sequestration affect healthcare?

  • Physicians who see Medicare patients will see an automatic 2% reduction in their reimbursement beginning April 1st
  • Claims for DME (durable medical equipment), including claims under DME Competitive Bidding program will be reduced by 2%
  • Medicare’s payment to beneficiaries for unassigned claims are subject to the 2% reduction
  • All services and programs within Medicare (all provider services, hospitals, Medicare Advantage plans, graduate medical education) will see a 2% reduction
  • EMR “meaningful use” incentive payments to be cut by 2%

Medicare

SLICED - Below you will find several examples of how sequestration will slice State Health Departments budgets:

California   – $2,621,000 cut from public health programs
Texas   –  $2,402,000 cut from public health programs
Georgia  –  $925,000 cut from public health programs
Florida  –  $1,796,000 cut from public health programs
New York  –  $1,070,000 cut from public health programs

A total of $28,455,000 will be cut from public state health programs. 

MedicareCHOPPED - Sequestration will have a huge impact on healthcare chopping up reimbursements. Now more than ever before, providers must look for every dollar of reimbursement they can find. In most cases, the low-hanging fruit has already been picked. Today, forward thinking healthcare executives must move quickly to make the decisions which will positively affect reimbursements. Investments in brand new technologies and reinvented processes, which offer an ROI of less than 12 months will be the most attractive moves executives can make. There are several “Blue Diamond” technologies entering the marketplace every day. These new avenues for reimbursement recovery are available to help offset the reimbursements that has been carved up, sliced off and hacked to pieces by sequestration.



Source: http://www.whitehouse.gov/issues/sequester/


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The Double Edge Sword for Cost Report Reopening

					
by Phil C. Solomon on March 18, 2013

					
in Medicare - Medicaid

				

				


Cost Report Preparation Maximizes Reimbursement when Technology is Leveraged


Providers should seek specialty firms with deep domain experience to processing their cost reports to ensure they have maximized their reporting reimbursement.


 


Cost ReportUsing manual methods to reopen or to place the initial submission of a cost report could leave providers with fewer reimbursement dollars than allowed. Advanced technology solutions help guard against the “Double Edge Sword” aspect of reopening a cost report. If a provider is relying on the intellectual capacity of a group of professionals to perform work in a manual mode, there is a significant chance that human error will occur.


When using the right technology, cost reports can be submitted with confidence, knowing that every base was covered during the preparation and initial submission. Unlike fully automated technology platforms, typical manual processes cannot quickly and accurately analyze all sources of data in a single database. The right technology eliminates missed revenue collection opportunities. Technology platforms add value when the entire Common Working File resides in one database, allowing for multiple regressions to be done simultaneously. This strategy identifies the greatest level of reimbursement. Similar to cost reporting are the challenges of identifying maximum revenue opportunities for DSH reporting. The right technology also pinpoints the greatest number of DSH days for reporting purposes.


Data mining platforms, which turns data into intelligence are only as good as the algorithms it uses for its analysis. Therefore, it is important for any cost reporting technology solution to be regression tested through a detailed diagnostic process.


There are many opportunities for identifying additional reimbursement when using the right tool. As reimbursement dollars are being squeezed in today’s healthcare environment, providers need to look for every possible revenue nugget they can find.


Learn more about the U.S. Court of Appeals for the D.C. Circuit decision below. ~ PCS


In a decision with potentially far-reaching implications, the U.S. Court of Appeals for the D.C. Circuit ruled last Tuesday that a hospital’s full-time equivalent (FTE) residency cap can be corrected, for purposes of itsapplication in “open” cost reporting periods, even if the cost reporting period in which the cap was established is outside of the three-year reopening window.  Kaiser Foundation Hospitals v. Sebelius, No. 12-0537 (D.C. Cir. March 5 2013) available here.  The court’s decision was based on its finding that under CMS’s regulations, a cost reporting period is only “reopened” if the amount of reimbursement for that period is modified.  See 42 C.F.R. §§ 405.1885(a), 405.1801(a).  The court reasoned that merely correcting predicate facts in that period that may affect payment in subsequent years does not constitute a reopening and is not subject to the three-year limitation on reopenings.


Providers, therefore, now have an opportunity to review prior-year determinations for errors that affect payments in subsequent years.  Examples include errors in calculating base year FTE caps (which was the issue in Kaiser), other “base year” determinations such as base year hospital-specific rates for SCHs and MDHs and TEFRA target amounts for PPS-exempt hospitals, prior-year FTE counts that affect the three-year rolling average, and prior-year intern and resident to bed ratios.


If a provider discovers such an error but the intermediary either cannot reopen the prior determination because the three-year reopening window has expired, or simply refuses to reopen the determination, the provider can nonetheless appeal to have the error corrected for cost reporting periods going forward. This is a two-edged sword, however, since CMS can also claim the authority to review “closed” cost reporting periods to correct errors affecting payment in “open” periods.  In addition, CMS has the authority to make such changes to any open cost reporting period, while providers only have guaranteed appeal rights going forward.  This decision, therefore, may force a reevaluation of the principle of administrative finality that may have been taken for granted until now.


Read the rest of the article on the Association of Corporate Counsel site


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Medicaid Expansion Leaves Physicians in A Lurch

					
by Phil C. Solomon on March 17, 2013

					
in Medicare - Medicaid

				

				




Medicaid – Obamacare Pay Raise of 73% For Doctors Is Delayed


MedicaidIs it any surprise that pay raises for physicians are delayed beyond the timeline set by the Affordable Care Act? How can anyone expect the new legislation to roll out as planned since the reinvention of our healthcare system is so enormous? The physicians that practice in the States who opted to participate in the expanded Medicaid pool were supposed to have reimbursement rises to offset the anticipated increase in Medicaid patient volume.


Many of the sweeping changes have seen some positive outcomes, even those programs such as the re-admission penalties for hospitals have seen positive effects. The latest news is Medicare is reducing some of the hospital’s penalties below the 1% maximum they can assess. That is good news for providers.


This is a complex healthcare world we live and work in. There is an old saying that sums up our healthcare system today, changes we have experienced so far and the anticipated changes in the future, “if you don’t like what you see now, stick around a while, it’s bound to change”! PCS


Read the rest of the article below:


Primary care doctor payments for treating Medicaid patients, set to rise 73 percent on average, have been delayed due to the complexities of implementing the Affordable Care Act. (Photo credit: Wikipedia)


A huge pay raise promised under the Affordable Care Act for primary care doctors who treat the nation’s poor covered by Medicaid health insurance is nearly three months behind schedule and may take another three months before it kicks in, state Medicaid directors say.


Under the health law, a primary care doctor – a family physician, a pediatrician or an internist – who treats a Medicaid patient will see their reimbursement rise to the level of the Medicare health insurance program for the elderly for scores of primary care services. Doctors do have to apply to their state Medicaid programs and meet certain criteria in part proving that they have historically treated certain numbers of Medicaid patients.


Though the pay increase will vary because Medicaid rates differ from state to state, the average pay increase will be about 73 percent given Medicare last year paid on average 66 percent of what Medicare pays for certain primary care services, according to a Henry J. Kaiser Family Foundation study. Doctors in some states could see payment increases of 100 percent or more.

The idea behind the pay increase, which is funded by federal dollars for two years, is to get more doctors to accept Medicaid patients and prevent other physicians from dropping out of a government program that hasn’t been well funded. Amid a primary care doctor shortage, eligible patients will need all of the doctors they can get given the health law expands Medicaid coverage to millions more Americans effective Jan. 1, 2014 for participating states.


Because Medicaid is funded via a match of funds from states and the federal government, cash-strapped states that have cut from their programs in also lost federal dollars, allowing payment rates to fall far behind.


“The purpose of the increase in Medicaid physician fees for primary care is to encourage greater Medicaid participation among physicians as the program expands in 2014 and demand for care increases,” the Kaiser report said. “If the enhanced payment rates succeed in increasing physician participation and beneficiary access as intended, interest in extending the higher Medicaid rates beyond 2014 is likely to be high.”


But the Obama administration says the checks will eventually reach doctors and payments will be retroactive to Jan. 1 of this year so physicians who are approved to participate in their states will get what they are due.


“The Medicaid enhanced payments for primary care physician fee was made possible by the Affordable Care Act and is in full effect for calendar years 2013 and 2014,” a spokesman for the Centers for Medicare & Medicaid Services says. “States are moving quickly to implement the higher payment and a number of states have already submitted State Plan Amendments (SPAs) which will permit federal funding to flow to states for the increases. In addition to submitting the required SPAs, states are also in the process of reprogramming their claims processing systems to pay at the appropriate, higher rates. CMS has made it very clear that states must make enhanced payments to eligible providers retroactive to January 1, 2013.”


Read the rest of the article on Forbes






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Healthcare Pendulum, Has It Swung Too Far?

					
by Phil C. Solomon on February 14, 2013

					
in Revenue Cycle Management

				

				


Does your healthcare system have a balanced approach to cost containment versus revenue capture?


Healthcare systemIf the pendulum swings too much in either direction, the viability of the healthcare organization is at stake. We are just now dipping our toes in the water as we begin to experience the changes that healthcare reform has brought to us. In 2013, hospital executives and CFOs must be more vigilant than ever in their efforts to reduce hospital costs and capture every dollar of reimbursement possible.


Becker’s Hospital Review highlighted an article sharing the insights from a very successful CFO at the Boston Academic Medical Center. Chibueze Okey Agba, who as CFO has been instrumental in improving the financial outlook of the Medical Center by orchestrating an impressive financial turnaround.


While flat volume growth spanned across the city, net income at the Medical Center increased by 46 percent, or $25.3 million. The organization achieved a reasonable margin by focusing on cost containment, Agba explains.


Agba highlights two ways to reduce hospital costs and improve a hospital’s financial foundation.


Focus on what you can measure: To reduce hospital costs and improve revenue, CFOs need to focus on areas they can measure and affect. Leaders must be able to measure to know that they’ve succeeded. For Agba, he focused on working with clinical leaders to provide care at the most efficient cost.


Improve cash flow: The medical center Agba works at achieved 85 days cash on hand in 2012. It’s a sign that the hospital is receiving money faster and paying money slower, but still on time. That’s what increases your days with cash on hand.


Cost cutting and expense reduction are key buzz words when hospital CFO’s talk about building a solid financial foundation for their organization. That said, in order to operate in today’s era of healthcare reform, hospital executives and CFOs must also consider the revenue generation side of the business. CFO’s need to look toward new technologies that focus on identifying missed revenue capture dollars.


Stretching the envelope and leveraging every untapped source to increase revenue collection hasn’t been a healthcare finance and revenue cycle executives first priority. Now, with our current economic environment, identifying every possible missed collection opportunity is critical. Often, reducing costs is as easy figuring out which numbers on the P&L to eliminate. Identifying hidden revenue sources is not as clear cut.


Agba’s perspective on healthcare’s future – the most challenging time is yet to come.”I believe 2013 is just the beginning of an even more challenging period for healthcare. The impact of the Affordable Care Act and the fiscal cliff-related measures Congress enacted will be significant to AMCs”. Today’s hospital CFOs are going to have to continue to focus on measurable efficiency in order to meet those the financial challenges in the coming years.


Source: Becker’s Hospital Review, January 2013


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Don’t Worry, Be Happy | How A Positive Attitude Improves Performance

					
by Phil C. Solomon on February 7, 2013

					
in Positive Attitude

				

				




Attitude Isn’t The Only Thing, It’s Everything!


 


attitudeHow does this post relate to healthcare finance or revenue cycle management? If you are a hiring authority in a hospital or practice, you might be surprised to know how important having a good attitude really is. A recent study of over 20,000 new hires at Fortune 500 companies, nearly half of them failed within the first 18 months on the job. And 89 percent of those failures stemmed from “attitudinal reasons.”


Hiring the best and brightest people isn’t always the best idea. It will backfire if your candidate has a bad attitude. Attitudes affect every aspect of the work people perform on the job. When seeking to hire someone for your division, team, or group, be warned that people with bad attitudes can fool you during the interview process. Make sure you invest enough time during the hiring process to observe their true personality.


If you have the time, let a candidate sit with your top staff so you/they can observe their true behavior. Have your staff look for traits that may be more negative than positive. Have them report back to you with their observations.


One bad hire will create a ripple effect throughout your organization. For example, if your registration staff person has a bad attitude, and is a glass half empty thinker, what type of interaction do you think they will have with your patients? The result will be poor patient interactions and a loss of patient good will. Poor attitudes lead to apathy. Apathy leads to making mistakes. Mistakes will cost your organization in more ways than just dollars and cents. A negative employee can poison your entire team and the rest of their co-workers.


How often do you think about your own attitude and how it affects every aspect of your life? Regardless of the circumstances, you are in charge of your own attitude. A great example of how one man took control of his own attitude during a very difficult time in his life is Randy Pausch. In his book The Last Lecture, he chronicled how he kept a positive attitude while he was battling pancreatic cancer. He lost the battle with cancer on July 25th, 2008.  His outlook on life is very interesting.


Attitude“I’m a great optimist. but, when trying to make a decision, I often think of the worst case scenario. I call it ‘the eaten by wolves factor.’ If I do something, what’s the most terrible thing that could happen? Would I be eaten by wolves? One thing that makes it possible to be an optimist, is if you have a contingency plan for when all hell breaks loose. There are a lot of things I don’t worry about, because I have a plan in place if they do.” ― Randy Pausch, The Last Lecture


If  you ever doubt that you can survive a crisis, and even flourish while you are going through difficult times, read this book. If you take responsibility for your own positive attitude, you might be surprised how much you can improve your life and have a positive affect on everyone around you.


According to author and sales expert Colleen Francis, patients, vendors, co-workers and supervisors judge you by your attitude. That extends to your entire group, department or team. Francis says, the people around you mirror your own attitude. So how do you improve your attitude? Consider embracing these five steps to help create your own positive attitude:










5 Positive Attitude Changes to Improve Life


1. Take responsibility for your own attitude


Francis advises readers that we all have the opportunity to choose our own attitudes, even when things aren’t going our way. By changing your physical behavior and adopting a more positive outlook, you can help the people surrounding you improve their own attitudes.


2. Set measurable, achievable goals


As a manager, set goals for your staff that are better than their best, but believable. Do the same for yourself.


3. Hire people with positive energy


According to former General Electric CEO Jack Welch, a team member’s attitude in the morning represents the benchmark they should strive to hit throughout the day. If you let a team member stay grumpy before their first coffee break or before lunchtime, you’re sending the message that you expect a “come from behind” win every afternoon. In his book, “Winning,” Welch writes that people with positive energy can start and end each day with enthusiasm.


4. Don’t sacrifice attitude for “smarts”


Author and educator Roger Martin told Harvard Business Review readers that he once hired only “smart” candidates. Martin scouted top scholars from major business schools, determined that he could teach interpersonal skills to hires who seemed awkward or unhappy. After many of those high potential employees failed in their careers, Martin sought candidates he deemed less “brittle.” Those successful workers heeded feedback, sought professional development opportunities, and they improved morale on their teams despite their slightly lower GPAs.


Some say that the “A” students end up working for the “C” students. You don’t have to be the smartest person in the room, you just have to have a positive can do attitude!


5. Share your expectations with your team


Be clear with your expectations and make sure your teammates and subordinates understand that “Stinkin Thinkin (quote by Zig Zigler)” won’t  cut it as far as you are concerned. People around you must drink the “positive cool aid”. If they don’t, show them the door!


If you are not in a leadership position where you can show someone the door if they don’t have a good attitude, stay as far away from them as you possibly can. Don’t listen to the negative thoughts of others.


I leave you with this compelling quote that I believe captures everything you need to know about having a positive attitude: “Keep your thoughts positive because your thoughts become your words. Keep your words positive because your words become your behavior. Keep your behavior positive because your behavior becomes your habits. Keep your habits positive because your habits become your values. Keep your values positive because your values become your destiny.” – Mahatma Gandhi.












The concept for this post was adapted from Hire Positive People to Build a Thriving Business by Joe Taylor Jr. at Small Business Computing and Paul Shread, the editor in chief of the IT Business Edge network as seen in Time Business and Money.






 




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Healthcare Big Data Puts Providers on Cloud 9

					
by Phil C. Solomon on January 31, 2013

					
in Revenue Cycle Management

				

				




Healthcare Big Data Helps Gets to the Root of The Problem


Healthcare Big DataTake a look at this interesting post. Healthcare big data is becoming a popular “buzz” word around the healthcare industry. Creating appropriate analytic evaluations to improve performance and identify root cause issues is of paramount importance, especially for those in healthcare finance and revenue cycle management. Many smaller niche technology firms are breaking the mold and providing valuable data. Look to innovators to help capture as much revenue as you possible can. Be an early adopter of new technology and stay ahead of the curve! ~ Phil C. Solomon.








Increased mobility for clinicians, with an extra helping of security


Providers will have to get serious about security in 2013, especially with strengthened HIPAA rules now in effect and the Office for Civil Rights increasing its focus on audits. Whether providers embrace BYOD or implement an enterprise-based tablet strategy, securing the data at the infrastructure level (not on easily lost endpoint devices) is critical. The trick lies in implementing security solutions that work on both a technical and a human level.


Healthcare Big Data


More providers move to the cloud


The cloud isn’t just a secure place to store data – it’s the ideal platform for managing applications and enabling collaboration. Providers see the advantages of moving to the cloud as they work to extend their existing IT capabilities. Payers and life sciences companies are seeing the benefits too as they streamline processes to more efficiently manage data and drive innovation.


Healthcare Big Data may finally lead to big insights


Healthcare is still far behind other industries in creating integrated, longitudinal, client-focused databases that can serve as the foundation for in-depth analytics. Providers are challenged not only by the quantity of the data, but the need to ensure real-time access and mobility throughout the enterprise and beyond. For visionaries who make the decision to strategically change the way they look at information in 2013, the cost and quality benefits of their data assets will be reaped for years to come.


A few other issues to watch: I think it’s safe to say we’ll see continued debate about Meaningful Use deadlines and whether they are too aggressive given the current lack of interoperability standards. There will likely be more consolidation in the competitive EHR market. And telehealth services will expand to help fill gaps caused by physician shortages or geographic barriers.


Change is constant in healthcare and the Dell Healthcare and Life Sciences team is experiencing a few changes as well. After six years in his current role, Jamie Coffin, Ph.D., will be transitioning to a leadership role outside of Dell. I am delighted to rejoin the team and I wish Jamie well.


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5 Top Ways Providers Are Being Tracked for Patient Satisfaction

					
by Phil C. Solomon on January 27, 2013

					
in Consumerism and transparency

				

				


Patient Satisfaction Finally a Key Driver for Provider Actions. Business Volume and Compensation at Stake


This article by Bob Hayes, featured on the Business Broadway web site gives a rare glimpse into how healthcare transparency is going to affect providers in the future.


patient satisfactionThe U.S. government provides a variety of publicly available databases that include metrics on the performance of US hospitals, including patient experience (PX) database, health outcome database, process of care database and medical spending database. Applying Big Data principles on these disparate data sources, I integrated different metrics from their respective databases to better understand the quality of US hospitals and determine ways they can improve the patient experience and the overall healthcare delivery system. I spent the summer analyzing this data, and wrote many posts about it.


Why the Patient Experience (PX) has Become an Important Topic for U.S. Hospitals?


The Centers for Medicare & Medicaid Services (CMS) will be using patient feedback about their care as part of their reimbursement plan for acute care hospitals (see Hospital Value-Based Purchasing (VBP) program). The purpose of the VBP program is to promote better clinical outcomes for patients and improve their experience of care during hospital stays. Not surprisingly, hospitals are focusing on improving the patient experience to ensure they receive the maximum of their incentive payments.


Key Findings from Analyses of Big Data of US Hospitals


Hospitals, like all big businesses, struggle with knowing “if you do this, then you will succeed with this.” While hospital administrators can rely on gut feelings, intuition and anecdotal evidence to guide their decisions on how to improve their hospitals, data-driven decision-making provides better, more reliable, insights about real things hospital administrators can do to improve their hospitals. While interpretation of my analyses of these Big Data are debatable, the data are what they are.


I have highlighted some key findings below (with accompanying blog posts) that provide value for different constituencies: 1) healthcare consumers can find the best hospitals, 2) healthcare providers can focus on areas that improve how they deliver healthcare, and 3) healthcare researchers can uncover deeper insights about factors that impact the patient insights, health outcomes and best practices.


    

  1. Healthcare Consumers Can Use Interactive Maps of US Hospital Ratings to Select the Best Provider. Healthcare consumers can use interactive maps to understand the quality of their hospitals with respect to three metrics: 1) Map of US hospitals on patient satisfaction, 2) Map of US hospitals on health outcomes, and 3) Map of US hospitals on process of care. Take a look at each to know how your hospital performs.
    2. 

  2. Hospitals Can Use Patient Surveys to Improve Patient Loyalty. Hospitals might be focusing on the wrong areas to improve patient loyalty. While researchers found that hospitals’ top 3 priorities to improve the patient experience are focused on 1) reducing noise, 2) improving patient rounding and 3) the improving the discharge process and instructions, analysis of HCAHPS survey results show that hospitals will likely receive greater return on their improvement investment (ROI) if they focus on improving the patient experience along these dimensions: 1) pain management, 2) staff responsiveness and 3) staff explaining meds.
    3. 



Read the rest of the article


patient satisfactionCheck out this follow up article which highlights the Top 10 blog posts focusing on Big Data, Patient Experience and Customer Metrics. 


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4 Best Practices for Collecting Out-of-Pocket Patient Fees

by Phil C. Solomon
January 22, 2013

				


Phil C. Solomon – The author sent me this post and asked if I would post it on my site. After reading it, I felt the author made some really strong points.  The content of this post is aimed at medical practices, however the strategies for collecting patient fees and self pay balances in hospitals [...]

				

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Healthcare Finance and Revenue Cycle Professionals are Superheroes Too!

by Phil C. Solomon
January 18, 2013

				


Healthcare Finance and Revenue Cycle Professionals Don’t Have to Scale Tall Buildings and Fly at Supersonic Speeds to Have an Impact Like a Superhero! Healthcare finance and revenue cycle professionals should feel like superheros. We don’t have to put on a costume and wash windows on tall buildings to have an incredible impact on the people in our communities. I came across this article [...]

				

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Healthcare Leaders Must Batten Down the Hatches in 2013

by Phil C. Solomon
January 18, 2013

				


Healthcare Leaders Must Make Herculean Efforts to Collect Revenue in Today’s Changing Landscape I just finished reading an article written by Karen Minich-Pourshadi, for HealthLeaders Media. It is called “CFO Outlook for 2013 Grim”. I’m curious, do all healthcare financial leaders feel the outlook for 2013 is grim? Ms. Minich-Pourshadi interviewed several hospitals CFO’s to get their [...]

				

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