By Patrick Donges
http://stream.publicbroadcasting.net/production/mp3/wamc/local-wamc-971594.mp3
Pittsfield, MA – The new "efficiency measures," part of Medicare's "hospital value-based purchasing" program approved under the 2010 Patient Protection and Affordable Care Act are proposed to go into effect at the beginning of fiscal year 2014.
The measure would add "Medicare spending per beneficiary," to a list of other metrics already approved for use in Medicare's "Inpatient Quality Reporting" program to determine what percentage of a hospital's Medicare claims will be reimbursed by the government. Hospitals would be given a score based on those combined metrics that would determine how much more, or less, they would receive.
The cost of care would be calculated starting with the three days prior to a beneficiaries hospital stay, and continue to be a factor for the 90 days following a discharge.
Chip Kahn, president of the American Federation of Hospitals, says that while he does not disagree with the overall value-based purchasing program, the tracking of costs past the hospitalization period is a concern.
"There's actually no academic research that shows that using per-beneficiary costs over a 90 day period is necessarily reflective of efficiency. They're just assumptions being made."
"We can control the care, and we should be accountable for the care in the hospital, but we can't necessarily control the costs after a hospitalization. Having our payment affected by what happens regarding overall costs for a patient over 90 days was not the right way to go on this particular measure."
According to the U.S. Department of Health and Human Services, Hospital payments account for the largest share of Medicare spending, and Medicare is the largest single payer for hospital services.
In 2009, more than 7 million Medicare beneficiaries experienced more than 12.4 million inpatient hospitalizations, and one in three Medicare beneficiaries who leave the hospital end up making a return visit within a month.
The incentive based payments would be funded by a reduction in individual reimbursements already received by the hospitals by 1 percent starting in 2013 with continued reductions of one-quarter of a percent before being capped in 2017 at a continuing rate of 2 percent per year.
Bryan Ayers, CEO of Community Health Programs, which provides outpatient care to low-income residents of Berkshire County, said local hospitals already to a good job of continuing care.
"I think this will be an administrative burden for them. They already have great outcomes, so I don't think they have anything to fear with that. The challenge will be; how to they manage the reduced reimbursements?"
Ayers said hospitals have already seen cuts to reimbursements for Medicare and Medicaid participants without the added measure.
In a statement sent via email, Congressman John Olver, who represents Berkshire County, said he is, "monitoring the proposed change carefully."
Mike Wallner, Director of Managed Care at Saratoga Hospital in Saratoga Springs, NY, said they often already to not recuperate the cost of care for current Medicare patients.
"In most cases we find it really hard to cover our costs with the current Medicare reimbursements. They're very high cost patients; they require many more resources, whether it be supplies or hands on care or pharmaceuticals, and now we're being asked to add another level of cost."
Wallner said current reimbursement rates typically provide a pre-set amount per beneficiary regardless of how long they spend at the hospital. He shared the concern raised by Kahn that the hospital has little control over the type and costs of care provided after hospitalization.
"We find that our patients discharge from here and then they don't receive the care that they were intended to have. A patient's compliance with their medication is a big one. Many times they leave here with a plan that they need to be on a certain medication and that's primarily going to be necessary to prevent them from having a reoccurrence."
"If we're not coordinating that, we might now suffer penalty for that because they're back in the hospital three weeks later. Holding the hospital accountable for that is going to require us to add a lot of resources that would probably far outweigh any increases in reimbursements that we might be entitled to."
Wallner said Saratoga is constantly working on its own internal cost efficiency measures, and they have recently started hiring primary care physicians.
That trend will likely continue on the other side of care with these new measures, with hospitals contracting or buying continuing care facilities and nursing homes.
Kahn said that a continuation of accountability coupled with a continuation of care will likely become an issue for debate as the health reform process continues.
"If there are tighter relationships between hospitals and those kinds of nursing homes and home health agencies providing services after hospitalization, and there's more common responsibility, some of my objections to this 90 days may evaporate."