CMS Announces $840 Million Initiative for Improving Quality

Late last week the Centers for Medicare & Medicaid Services (CMS) announced its $840 million investment in a program aimed at supporting the adoption, development and sharing of quality improvement strategies to improve patient health and reduce healthcare costs.

 

The “Transforming Clinical Practice” initiative is a new, innovative model and one of the largest federal investments uniquely designed to support clinician practices through nationwide, collaborative and peer-based learning networks that facilitate practice transformation, according to the CMS fact sheet.

 

CMS noted that so far, only small-scale investments have been made to encourage collaborative peer-based learning. It estimates that only about 16 percent of Medicare and Medicaid providers currently participate in existing programs, models, and initiatives that facilitate practice transformation. “While this is an increase over previous years, there is much more work to be done,” CMS wrote. The Transforming Clinical Practice initiative is expected to support 150,000 clinicians in sharing, adapting and further developing comprehensive quality improvement strategies. (Transforming Clinical Practice: CMS Fact Sheet, October 23, 2014)

 

According to CMS, the initiative aligns with the criteria for innovative models outlined in the Affordable Care Act:

 

  • To promote broad payment and practice reform in primary care and specialty care
  • To support care coordination between providers of services and suppliers
  • To establish community-based health teams to support chronic care management
  • To improve quality and reduce cost through a collaborative of institutions that support practice transformation

 

CMS will award funding for two network systems under this initiative:

 

  • Practice Transformation Networks, peer-based learning networks designed to coach, mentor, and assist clinicians in developing core competencies specific to practice transformation. This approach allows clinician practices to become actively engaged in the transformation and ensures collaboration among a broad community of practices that creates, promotes, and sustains learning and improvement across the health care system.
  • Support and Alignment Networks, to support a system for workforce development using national and regional professional associations and public-private partnerships that are currently working in practice transformation efforts. These will especially support the recruitment of clinician practices serving small, rural and medically underserved communities and play an active role in the alignment of new learning.

 

Those eligible to receive funding may include eligible medical professional associations, specialty societies, and other organizations that are involved in aligning their programs with the aims of the initiative; generating evidence-based guidelines for clinical practice; promoting measurement for improvement; supporting members and practices in efforts to reduce unnecessary testing and procedures; and enhancing safety and patient and family engagement. (“CMS Launches $840 Million Initiative to Support Quality Improvement,” HFMA Weekly News, October 24, 2014)

 

To read the CMS fact sheet, click here.

 

 

 

iProtean subscribers, Physicians and the New Healthcare Business Model is in your library. Featuring Todd Sagin, M.D., J.D. and Larry McEvoy, M.D., this course takes an in-depth look at the physician perspective of the new healthcare business model, and offers suggestions to boards on how to work with physicians to accomplish a successful transition to this model.

 

Our next advanced course, due in your library in early November, features noted governance experts Barry Bader and Pam Knecht.

 

 

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Increase in Value-Based Payments Surprises Some Health Financial Experts

A new national scorecard on payment reform shows commercial health plans have dramatically shifted how they pay physicians and hospitals, with 40 percent of their payments “value-oriented” in 2014, according to the Catalyst for Payment Reform (CPR). This means that two-fifths of commercial health insurance payments were no longer traditional fee-for-service.

 

Some financial experts have voiced their skepticism of this finding, including an executive at the Healthcare Financial Management Association.

 

“Although we do believe that provider organizations are increasingly entering into nontraditional payment arrangements and moving away from fee for service, we are surprised at the large increase in reported results . . . some of the potential explanation for the jump in responses could be due to a different pool of respondents from prior years, higher concentration of larger plans who may be more ready to leverage these types of arrangements, and the voluntary nature of survey participation, such that those that are actively pursuing payment reform likely were more likely to respond to those questions,” the executive said. (“Scorecard: 40 Percent of Payments Value-Oriented,” HFMA Weekly News, October 17, 2014)

 

Some of the key findings in the CPR report include:

 

  • Only 53 percent of the value-oriented payments of reporting insurers included financial risk for providers that fail to improve care or spend within a budget—arrangements were generally upside-only bonus payments.

 

  • One of the most common value-oriented payment arrangements among responding insurers was pay for performance, which offers bonuses to providers that met quality or efficiency goals.

 

  • 15 percent of payments are through arrangements where patients are attributed to a certain provider (e.g., accountable care organizations and medical homes).

 

  • Only 1 percent of payments flow through shared-risk arrangements and 0.1 percent are paid through bundled payments.

 

  • Hospitals are leading payment reform, with 38 percent of their commercial payments flowing through value-oriented payment arrangements.

 

  • Value payments in outpatient care accounted for just 24 percent of primary care physician payments and 10 percent of specialist payments.

 

To read more detailed information from Catalyst for Payment Reform, click here.

 

 

 

iProtean subscribers, Physicians and the New Healthcare Business Model is in your library. Featuring Todd Sagin, M.D., J.D. and Larry McEvoy, M.D., this course takes an in-depth look at the physician perspective of the new healthcare business model, and offers suggestions to boards on how to work with physicians to accomplish a successful transition to this model.

 

Our next advanced course, due in your library in early November, features noted governance experts Barry Bader and Pam Knecht.

 

 

For a complete list of iProtean courses, click here.

 

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Medicare Outpatients Pay More at Critical Access Hospitals

Medicare outpatients at critical access hospitals (CAHs) pay significantly more than Medicare beneficiaries at acute care hospitals, according to a new report from the Department of Health and Human Services’ Office of the Inspector General (OIG). OIG noted in its report that policy changes are needed to reduce the amounts those rural patients pay.

 

The payment discrepancies occur when Medicare beneficiaries pay coinsurance. Those at CAHs pay coinsurance amounts based on the hospitals’ charges. But acute care hospitals charge coinsurance based on the outpatient prospective payment system (OPPS) rates.

 

“CAH charges are typically higher than the reasonable costs associated with CAH services or the OPPS rates that acute-care hospitals receive,” the authors of the OIG report said. The differences can range from two to six times more for the 10 most common outpatient services than acute care hospitals charged for the same services, according to OIG. (Medicare Beneficiaries Paid Nearly Half of the Costs for Outpatient Services at Critical Access Hospitals, Office of the Inspector General, October 7, 2014)

 

Medicare beneficiaries paid nearly half the estimated $3.2 billion in costs for outpatient services at CAHs in 2012.

 

The OIG recommended that CMS seek legislative authority to modify how coinsurance is calculated for outpatient services received at CAHs. Possible changes included computing coinsurance based on interim payment rates rather than charges, according to the OIG. Meanwhile, CMS neither concurred nor disagreed with the recommendation. (“OIG: Medicare Patients Paying Too Much At Critical Access Hospitals,” HFMA Weekly News, October 10, 2014)

 

Other earlier reports also noted the high coinsurance charges at CAHs. In 2011, the Medicare Payment Advisory Commission reported the discrepancy and proposed modifications to how CAHs calculate coinsurance. In 2009, a consultant group reported that coinsurance jumped when a hospital took on a CAH designation.

 

The report is the latest critical OIG finding of CAHs. Previous OIG findings that many CAH are close to other hospitals led the agency to recommend stripping many of the 1,329 CAH facilities of that designation. (“OIG: Medicare Patients Paying Too Much At Critical Access Hospitals,” HFMA Weekly News, October 10, 2014)

 

The most recent OIG report can be found here.

 

 

iProtean subscribers, Physicians and the New Healthcare Business Model is in your library. Featuring Todd Sagin, M.D., J.D. and Larry McEvoy, M.D., this course takes an in-depth look at the physician perspective of the new healthcare business model, and offers suggestions to boards on how to work with physicians to accomplish a successful transition to this model.

 

Our next advanced course, due in your library in early November, features noted governance experts Barry Bader and Pam Knecht.

 

 

For a complete list of iProtean courses, click here.

 

For more information about iProtean, click here.

 

Medicare Gains $3 Billion from RACs

The Medicare Trust Fund netted over $3 billion from the Recovery Audit Contractor (RAC) Program in 2013, according to a recent report by CMS.

 

RACs found $3.75 billion in improper Medicare fee-for-service payments—$3.65 billion in overpayments and $102.4 in underpayments. Those amounts, plus operating and contingency fees, resulted in the $3 billion figure, significantly more than the $1.9 billion netted in 2012.

 

The RAC program for fee-for-service Medicare began operating September 2010. RACs also have been expanded to Medicare Parts C and D and Medicaid, although those audit programs are not as far along. (“RACs Collect $3.65 Billion in Medicare Overpayments in FY 2013, CMS Reports,” Health Lawyers Weekly, October 3, 2014)

 

Most of the overpayments (more than $3.4 billion) involved inpatient hospital claims and, in particular, the “short-stay” admissions where the contractors decided the services should have been provided in the outpatient setting or lacked medical necessity documentation for the inpatient setting. (“RACs Collect $3.65 Billion in Medicare Overpayments in FY 2013, CMS Reports,” Health Lawyers Weekly, October 3, 2014)

 

Providers initially appealed 30.7 percent of all overpayment determinations in 2013. CMS reported that 18.1 percent were decided in the provider’s favor. However, the American Hospital Association, which publishes quarterly data on RACs, reported in the first quarter of 2014 that hospitals appealed 50 percent of RAC denials and won 66 percent of the time (not including those hospitals that choose to avoid the appeals process altogether).

 

The discrepancy between CMS and AHA data arises from how the appeals are counted, according to experts. The government report noted that appealed claims may be counted several times, based on each level of the appeals process and regardless of what the final decision was. AHA reports only final decisions from Medicare’s appeals courts.  (“RACs recouped $3B for Medicare in 2013,” Modern Healthcare A.M., September 29, 2014)

 

We reported earlier this year that the escalating number of RAC appeals has created backlogs at the Office of Medicare Hearing and Appeals, and that assignment of most new requests for Administrative Law Judge hearings has been suspended for at least two years.

 

CMS offered an “administrative agreement” in late August for acute care or critical access hospitals that would resolve their pending patient status appeals (or waive their right to request an appeal) in exchange for a partial payment of 68 percent of the net payable amount.

 

 

 

iProtean subscribers, Physicians and the New Healthcare Business Model is in your library. Featuring Todd Sagin, M.D., J.D. and Larry McEvoy, M.D., this course takes an in-depth look at the physician perspective of the new healthcare business model, and offers suggestions to boards on how to work with physicians to accomplish a successful transition to this model.

 

Our next advanced course, due in your library at the end of October, features noted governance experts Barry Bader and Pam Knecht.

 

 

For a complete list of iProtean courses, click here.

 

For more information about iProtean, click here.