Medicare Testing New Payment Options

Medicare officials are now allowing patients at dozens of hospitals participating in pilot projects to be exempted from the requirement that limits nursing home coverage to seniors admitted to a hospital for at least three days. These new experiments are being conducted to find out whether new payment arrangements with hospitals and other providers that drop the three-day rule can reduce costs or keep them the same while improving care. The experiments are being conducted under a provision of the ACA which also created the Center for Medicare and Medicaid Innovations to develop ways of improving Medicare.

If these experiments are successful, the tests will be expanded, according to Medicare officials. If patients can receive care while spending less time in the hospital, it can free up valuable resources for sicker patients and save money for Medicare because nursing home care and home health care is much cheaper than a hospital stay. Medicare’s three-day hospital admission rule has been a burden to seniors who don’t qualify for nursing home coverage because they were in the hospital under observation care rather than being admitted.

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BPCI Models 2-4 Open Period Information

In February, the Center for Medicare & Medicaid Innovation announced an open period for additional organizations to be considered for participation in Models 2-4 of the Bundled Payments for Care Improvement initiative. Be aware that the window to submit a non-binding letter of intent will close on Friday April 18, 2014.

If you would like more information on bundled payments and value based purchasing, please contact Joanne Erickson at (203) 294-6682 or Robbin Boyatt at (203) 294-6619.

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New Medicare Data Shows Differences in ACOs’ Patient Care

CMS has released the first public numbers from Medicare of how patient care is being affected by specific networks, most of which are Accountable Care Organizations (ACOs). ACOs are the most prominent of Medicare’s experiments to change the way physicians and health care facilities work together and are paid. Medicare is tracking 33 different quality measures to see how well doctors coordinate with each other and whether patients are receiving the appropriate services.

Last Friday, CMS released data on five of these measures for 141 ACOs during 2012. Four of these measures evaluated how well the ACOs helped patients with diabetes, and the fifth measure examined how many patients with arteries packed with plaque received appropriate medicines to relax their blood vessels.

According to expert analysis of the data, the average ACOs reached their Medicare goals for 65 percent to 75 percent of their patients, depending on the measure.  ACOs did not perform as well as the 66 medical groups that are part of another Medicare quality program (click here to see those results).

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CMS Accepting More Proposals for its Bundling Initiative

CMS has reopened the opportunity for proposals in its Bundled Payments for Care Improvement (BPCI) for Models 2, 3, and 4. To date, BPCI is the largest voluntary innovation program offered by CMS. In reopening this opportunity, CMS hopes to increase the number of bundling demonstrations, as well as expand participation in various models. NAHC is encouraging home health agencies to consider developing a proposal for the initiative as there is a serious push in health policy to advance post-acute care bundling as a future model of payment. Home health care is very likely to be the beneficiary of that push because it can provide comparable care in the community at a much less expensive cost than institutional care.

If you have any interest in the Bundled Payments for Care Improvement (BPCI), please contact Robbin Boyatt at (203) 294-6619 or Joanne Erickson at (203) 294-6682.

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Medicare ACOs Slow Spending

CMS has reported that nearly half of the organizations in its largest test of accountable care slowed Medicare spending, but only 29 of the 114 ACOs saved enough to receive bonus payments. In April 2012, CMS launched its shared-savings program, one of two Medicare accountable care initiatives aimed at saving money and improving quality in exchange for the chance to keep some of the savings it produced.

The shared-savings program launched with 27 organizations and added another 87 organizations three months later. During the first 12 months of the effort, Medicare spending was lower than projected among 54 of the ACOs; 29 ACOs reduced Medicare spending enough to keep $126 million.The shared-savings program has expanded to more than 340 ACOs.

The Medicare Pioneer ACO program, the second of the two Medicare accountable care initiatives, had similar results. Nine of the 32 Pioneer ACOs dropped out after the first year; seven switched to the shared-savings program and the remaining 23 organizations saved Medicare $147 million. Nine saved enough to receive a share of the amount.

Experts have called Medicare’s accountable care results promising.

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Healthcare Hot Topics: Industry Insiders Share Their Predictions

  1. Insurance exchanges: Now that Americans have selected their insurance plans, experts say the next step is waiting to see if and how well they work.
  2. Mergers and acquisitions: 2013 saw a trend in consolidation and experts predict that 2014 will be no different.
  3. New payment models: 2014 will see a sustained growth in reimbursement models, including ACOs, bundled payments and shared savings.
  4. Technology: There will be a focus on the electronic patient record; interactive patients records and personalized medicine will come to the forefront.

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Medicare Looks to Cut Spending on Post-Acute Care

Researchers have discovered huge discrepancies in how much Medicare spends on nursing homes, home health services, and other post-acute services around the country.  For example, in Louisiana, Medicare spends $8,800 per patient for home health care as opposed to $3,300 per patient in New Jersey.  Because of discrepancies like these, Medicare is seeking to gain more control over what it spends on services patients receive after leaving the hospital.

Medicare spent $62 billion last year- one out of every six dollars on traditional fee-for-service programs.  Experts agree that this “hodgepodge of payment methods” encourage “unnecessary and disjointed” care which wastes taxpayer money and makes fraud easier.  They also agree that hospitals usually don’t take costs into account when discharging patients.

Medicare is now experimenting with new payment methods such as bundled payments where hospitals and post acute providers work together to treat patients for a fixed sum (rather than getting paid for each service). Also, President Obama has proposed reducing payments for certain conditions to post-acute providers and paying the same rates for similar patients. Experts warn that the transition to a new payment method will not be an easy one.

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