Tag Archives: Kaiser Medicare News

Medicare Pays Bonuses To 231 Hospitals With Lower Quality Because Of Cheaper Costs

The federal government paid bonuses to 231 hospitals with subpar quality because their patients tend to be less expensive for Medicare, new research shows.

The bonuses are small, generally a fraction of a percent of their Medicare payments. Nonetheless, rewarding hospitals of mediocre quality was hardly the stated goal when the Affordable Care Act created financial incentives to encourage better medical care from hospitals, doctors and other health care providers.

A study published Monday in the journal Health Affairs looked at the more than $1 billion in payments made last year in the Hospital Value-Based Purchasing program, which raises or lowers Medicare payments to hospitals based on the government’s assessment of their quality. Medicare primarily uses death and infection rates and patient surveys to judge hospitals, but it also evaluates how much each hospitals’ patients cost, both in treatment and recovery.

The 231 hospitals the study identified had below average scores on quality measures but were awarded the bonuses because caring for their patients during their stays and in the 30 days following their discharge cost Medicare less than what it cost at half of hospitals evaluated in the program.

The Centers for Medicare Medicaid Services, or CMS, began measuring cost in October 2014 to encourage hospitals to provide care in the most efficient way possible. In the period examined in the study — the federal fiscal year that ended in September 2015 — spending counted for 20 percent of a hospital’s score in determining whether a hospital would get a bonus, penalty or regular payment.

Under this formula, hospitals with Medicare spending below the median hospital were able to qualify for bonuses even though their quality measures were below the median, the study found. Patients at those 231 hospitals cost Medicare on average nearly $16,000, about $2,300 less than the average spending for the patients at other hospitals that received bonuses, according to the study’s lead author, Anup Das, a medical and health policy student at the University of Michigan.

money lean hospitalThe average bonus for those lower quality hospitals was an 0.18 percent increase in Medicare payments for each patient stay during that fiscal year. Most of the 1,700 hospitals that received a bonus that year had higher than average quality ratings, and their patients in some cases were more costly to Medicare.

“High-quality low-spending hospitals received the greatest financial benefit from the program,” the study said. “In this respect, CMS achieved its goal with the new spending measure. However, some low-quality hospitals received bonuses because of their low spending.”

In a statement, CMS said it would consider revising the program for future years so that hospitals scoring below the national median for quality would not receive a bonus. The statement also noted that this year, three-fourths of hospitals’ scores were based on quality measures. “We believe that there needs to be a balanced consideration between quality and cost, which is reflected in our scoring methodology,” the statement said.

The study found the lower-quality hospitals that received bonuses in the last fiscal year had higher death rates for heart attacks, heart failure and pneumonia than half of the nation’s other hospitals evaluated in the program. These hospitals were also less likely to follow recommended procedures for care, like choosing the right antibiotic for patients or performing an angioplasty on a heart attack patient within 90 minutes of their arrival at the hospital.

The 231 lower-quality hospitals with bonuses also received less enthusiastic ratings from patients about how well doctors and nurses communicated, responded to issues and managed pain, the study found. The study did not name the 231 hospitals.

“It’s a small decrease in quality, but the differences are significant,” Das said in an interview.

Other new federal quality payment programs created by the health law, such as accountable care organizations, deny bonuses to doctors or hospitals with substandard quality of care, no matter how efficiently they operate. The study suggested the government add a similar limitation to the Value-Based Purchasing program.

The study did not look at the current federal fiscal year, which runs through this September. This year, Medicare gave bonuses to 1,705 hospitals, averaging 0.51 percent, and reduced payments to 1,375 hospitals by an average of 0.34 percent, according to a Kaiser Health News analysis. Along with spending, Medicare’s other criteria are: death and infection rates; how faithfully a hospital followed basic clinical guidelines; and how patients rated their experiences in surveys.

Spending counts for a fourth of each hospitals’ scores, more than last year, and is scheduled to continue to do so for the next two years. The study’s lead author, Das, said in the interview that a preliminary analysis found some lower-quality hospitals again received bonuses.

Categories: Cost and Quality, Medicare, Syndicate

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Math Error At Rural Hospital Could Cost All Mass. Hospitals $160M In Medicare Funding

Senate Republicans Urge Obama To Withdraw Medicare Part B Experiment

One month after the Obama administration unveiled an experiment to revamp the Medicare Part B program, more than a dozen Republican Senators are urging that it be withdrawn. At the same time, House Republicans and Democrats are circulating letters among themselves that express varying degrees of concern with the program. … Under the Part B program, doctors, and hospitals buy a medicine, and the government reimburses the average sales price plus 6 percent. But the experiment, which would run five years starting this fall, would pay physicians the average price, plus another 2.5 percent and a flat fee of $16.80, not including reductions required by sequestration, or automatic spending cuts. (Silverman, 4/29)

231 Hospitals With Subpar Quality Awarded Bonuses From Medicare

Kaiser Health News:
Medicare Pays Bonuses To 231 Hospitals With Lower Quality Because Of Cheaper Costs

The federal government paid bonuses to 231 hospitals with subpar quality because their patients tend to be less expensive for Medicare, new research shows. The bonuses are small, generally a fraction of a percent of their Medicare payments. Nonetheless, rewarding hospitals of mediocre quality was hardly the stated goal when the Affordable Care Act created financial incentives to encourage better medical care from hospitals, doctors and other health care providers. (Rau, 5/2)

Wyden Introduces Bill Aimed At Protecting Seniors From High Drug Costs

The Hill:
Wyden Introduces Bill To Cap Drug Costs Under Medicare

Sen. Ron Wyden (Ore.), the top Democrat on the Senate Finance Committee, on Wednesday introduced a bill aimed at protecting seniors from high drug costs, an issue that has attracted growing scrutiny. Wyden’s measure would cap drug cost-sharing for Medicare enrollees so that seniors would not have to pay out of pocket costs above a roughly $7,500 cap.
In 2013, 2.9 million people in Medicare’s prescription drug program had to pay costs above that cap, Wyden’s office said. (Sullivan, 4/27)

Viewpoints: Finding Profits With Obamacare; Entitlement Reform And The 2016 Election

Trustees Of Nonprofit Health Care Organizations: Whom Do They Serve?

Should trustees, including those serving on boards of nonprofit hospitals, physician organizations, and nonprofit health care organizations, consider every opportunity to transition from fee-for-service reimbursement to population health management and accept financial risk related to possible decreases in the volume of care patients seek at their institutions? For the purposes of this Viewpoint, population health management is a set of activities focused on a defined population that improves quality and outcomes while lowering the total costs of care and is substantially incentivized through contracts that accept financial risk and gain. From 2013 to 2014, health care expenditures increased 5.3%, substantially above the rate of inflation, and equaled 17.5% of all goods and services produced in the United States.1 Fee-for-service reimbursement results in cost increases by encouraging patient use of medical services. The majority of trustees appreciate that the revenue from fee-for-service is essential to keeping their institution financially sustainable. (Michael Jellinek, 4/26)

CMS Unveils Proposed Medicare Rule To Reward Or Penalize Physicians Based On Quality Of Care

The Hill:
Obama Administration Takes Step To Reform Medicare Payments

The rule announced Wednesday gives doctors a choice of two paths, both of which seek to pay them in part based on how well they treat patients. The first path, called the Merit-Based Incentive Payment System (MIPS), would increase or decrease payments up to 4 percent in the first year based on how well doctors meet benchmarks on quality, use of electronic health records, and cost. The second path, known as advanced alternative payment models, would go even further in shifting towards rewarding quality. (Sullivan, 4/27)

Research Roundup: New Medicare Doc Pay; Workplace Violence; Insurers’ Losses

The New England Journal of Medicine:
Workplace Violence Against Health Care Workers In The United States

This review focuses on our current knowledge about workplace violence in various health care settings, including the prevalence across professions, potential risk factors, and the use of metal detectors in preventing violence. It also highlights the difficulty researchers have encountered in developing experimental models and the need for further evidence-based research. Health care workplace violence is an underreported, ubiquitous, and persistent problem that has been tolerated and largely ignored. According to the Joint Commission, a major accrediting body for health care organizations, institutions that were once considered to be safe havens are now confronting “steadily increasing rates of crime, including violent crimes such as assault, rape, and homicide.” (Phillips, 4/28)

Opposition Building On Capitol Hill To HHS Plan To Cut Medicare Payments For Some Drugs

New Medicare Penalty Hits Small Groups, Solo Physicians Hardest

Medicare’s new compensation formula will bestow performance bonuses as high as 4% on an estimated 412,000 physicians and other clinicians in 2019 and impose corresponding penalties on another 346,000, mostly in practices of from one to 24 members, according to proposed regulations released yesterday by the Centers for Medicare Medicaid Services (CMS). One physician organization is expressing dismay about a payment system that seems to work against smaller practices. “It’s extremely concerning,” said Anders Gilberg, senior vice president of government affairs for the Medical Group Management Association (MGMA), in an interview with Medscape Medical News. “Any program like this should give physicians the opportunity to succeed regardless of practice size.” (Lowes, 4/28)

FAQ: Medicare Lays Out Plans For Changing Doctors’ Pay

Federal officials have unveiled their roadmap to a revamped Medicare physician payment system designed to reward doctors and other clinicians for the quality of care delivered, rather than the quantity.

The proposed regulation would replace a patchwork of programs that now govern physician payments in Medicare. It would allow doctors to choose from a new menu of measures and activities that officials said would be tailored to the type of care clinicians provide in Medicare’s traditional fee-for-service program.

“By proposing a flexible, rather than a one-size-fits-all program, we are attempting to reflect how doctors and other clinicians deliver care and give them the opportunity to participate in a way that is best for them, their practice and their patients,” said Patrick Conway, acting principal deputy administrator and chief medical officer at the Centers for Medicare Medicaid Services (CMS), the federal agency that is implementing the new physician payment program.

Currently doctors are paid for things like tests, treatments and other procedures, but not necessarily for spending time with patients to learn more about their health or develop a treatment plan. Officials say the new payment program will change that.

With wide bipartisan support, Congress last year voted to scrap the existing Medicare physician payment formula and transition to a new system focused on quality, value and accountability. Here are some questions and answers about the newest phase of this effort.

Q: What is the government offering?

A: The proposed regulation would create two new payment systems. One, called the “merit-based incentive payment system,” or MIPS for short, would evaluate the value and quality of care on four performance categories: cost, quality, how doctors use electronic health record technology in their daily practice and share that information with other providers, and activities that improve care, such as care coordination or how much beneficiaries are engaged in their care. That composite score is used to determine a positive, negative or no adjustment to a provider’s Medicare Part B payment for a medical service.

The second system for doctors sets payments through “advanced alternative payment models” or advanced APMs. Under these models, clinicians accept more risk — and could also make more money — for providing coordinated, high-quality care, according to CMS. Examples include efforts to create a centralized “medical home” in which a team of health professionals provide coordinated care to improve patients’ health, and newer models of accountable care organizations in which doctors, hospitals and other health care providers form networks that work together to help improve the quality and reduce the spending for patient care.

CMS officials expect that most Medicare clinicians will initially participate in the MIPS program but over time will move more toward the alternative payment models.

Q: Who will get paid this way?

doctor medicare payA: Most doctors that treat patients in the traditional Medicare program, as well as other clinicians, such as physicians assistants, nurse practitioners, clinical nurse specialists, and certified registered nurse anesthetists, that also provide care to Medicare beneficiaries, will be paid under either the MIPS or advanced APMs system. Clinicians can be exempted from MIPS if they are new to Medicare, have less than $10,000 in Medicare charges or see 100 or fewer Medicare patients or are “significantly participating” in an advanced APM.

Q: Why is this happening now?

A: As part of legislation Congress passed last year to overhaul the Medicare physician payment system, CMS had to publish a plan by May 1 that detailed how it would measure physician quality under the new system. Doctors and other interest groups can now comment on the proposal until June 26, and CMS is expected to issue a final rule this fall.

Q: What happens next?

A: Under the law setting up the changes in payment, physicians will receive a fee increase of 0.5 percent per year between 2016 and 2019 as the new system is developed and put into place. In 2017, Medicare will begin measuring performance for doctors and other clinicians for the MIPS program, with payments based on those measures beginning in 2019. Under that system, payments generally won’t increase or drop by more than 4 percent, rising gradually to 9 percent from 2022 and beyond. Doctors can earn additional bonuses for exceptional performance.

Practitioners who pursue APMs would qualify for a 5 percent Medicare Part B incentive payment for the years 2019 through 2024.

Q: Does this mean that Medicare beneficiaries will pay more to see their doctors?

A: The law does not change payments by beneficiaries. Medicare Part B premiums, which cover visits to a physician and other outpatient services, are set by law and adjusted yearly. Once the Part B deductible is met, beneficiaries usually cover 20 percent of the amount Medicare pays, or purchase a supplemental policy that can pick up much of that cost. If Medicare’s Part B costs increase because of the new payment formula, beneficiaries’ premiums and co-payments could potentially rise as well.

Q. How did the doctor payment formula become an issue?

A: The prior physician payment system, which was called the sustainable growth rate or SGR, was created in a 1997 deficit reduction law, a broader legislative effort to control federal spending. For the first few years, Medicare expenditures did not exceed the target in that law and doctors received modest pay increases. But in 2002, doctors were furious when their payments were reduced by 4.8 percent. Every year since, Congress has staved off the scheduled cuts. But each deferral just increased the size of the fix needed the next time. Last year, lawmakers finally agreed to cut a deal for repeal and move on.

Q: What’s been the reaction to the new physician payment proposal?

A: Doctor and physician groups appear to be on board so far and a few lawmakers in both parties also have expressed support. All pledge to continue to monitor the process.

In a statement, the president of the American Medical Association, Dr. Steven J. Stack, said the group’s “initial review suggests that CMS has been listening to physicians’ concerns” in particular by modifying federal rules concerning physicians and electronic health records and reducing burdens on quality reporting. The new system, Stack said, “needs to be relevant to the real-world practice of medicine and establish meaningful links between payments and the quality of patient care, while reducing red tape.”

Robert Berenson, a fellow at the Urban Institute, said a key question for the law is “have they set it up so small practices can actually stay in business and report so they don’t have to throw in the towel and get hired by somebody because the reporting burden is too great?” Berenson, who has been critical of the new Medicare physician payment law, is a member of a technical advisory committee created in the law to evaluate its implementation.

Paul B. Ginsburg, who serves as director of the Center for Health Policy at the Brookings Institution and is also director of public policy at the Schaeffer Center at the University of Southern California, said the proposed rule gives physicians a lot of flexibility in choosing how they are rated under the MIPS program but is more restrictive on what qualifies as an APM.

Payment increases under either system may not be generous enough to keep up with other costs, such as increases in practice expenses. “This is better than a 20 percent cut (under the old system) but in a sense it means that the very severe constraint on physician payment is going to continue for some time,” he said.

Q: Where can I read more about this new plan?

A: CMS has published a web page, a fact sheet and a video to explain the proposal.

This article was updated with additional information about potential costs for beneficiaries.

Categories: Cost and Quality, Medicare, Syndicate

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Viewpoints: Zika Virus Raises Questions About Pandemic Readiness; Cheers And Jeers For Obamacare

USA Today:
We’re Not Ready For Next Zika Virus

In the aftermath of the anthrax attacks of 2001, the Ebola outbreak of 2014 and now Zika, it is no longer a question of if but when the next biosecurity threat will occur. In fact, experts believe a pandemic, not nuclear terrorism or climate change, is most likely to cause 10 million or more deaths in a single event. (Tom Daschle and Ron Klain, 4/26)