Unbiased Analysis of Today's Healthcare Issues

Will Medicare Reduce Your Hospial’s Reimbursement Rates?

Written By: Jason Shafrin - Dec• 21•12

Do you work at New York-Presbyterian in Manhattan? Massachusetts General Hospital in Boston? Both these hospitals, with large market shares in their cities, will see their Medicare payments reduced through the Hospital Value-Based Purchasing (HVBP) program.
If you work at Cleveland Clinic or Intermountain Medical Center in Utah, on the other hand, Medicare will be increase reimbursement rates through the HVBP program.
Kaiser Health News continues:

Medicare on Thursday disclosed bonuses and penalties for nearly 3,000 hospitals as it ties almost $1 billion in payments to the quality of care provided to patients.

The revised payments, which will begin in January, mark the federal government’s most extensive effort yet to hold hospitals financially accountable for what happens to patients. In what amounts to a nationwide competition, Medicare compared hospitals on how faithfully they followed rudimentary standards of care and how patients rated their experiences.

Note that for most hospitals (two-thirds), however, changes in Medicare reimbursement rates are less than a quarter of a percent.

HVBP is one of several Medicare programs–many mandated through the Affordable Care Act (ACXA)–that makes hospitals and doctors accountable for quality. These programs also adjust reimbursement rates based on quality of care.

Not everyone loves the HVBP system, however.

Results for hospitals within the same system often varied. For instance, in Rochester, Minn., the Mayo Clinic’s Methodist Hospital will be getting a bonus. But Mayo’s flagship St. Mary’s Hospital, also in Rochester, will be losing money. Dr. Michael Rock, an orthopedic surgeon at the Mayo Clinic, said that Medicare’s scoring system tends to favor hospitals with patients like those at Methodist, which primarily does elective surgeries, over hospitals with lots of trauma and emergency cases, which St. Mary’s handles.

Hospitals are already changing care to improve their total performance score (TPS), however, not necessarily in ways one might expect at first. At Auburn Community Hospital in New York, which received the largest penalty, “executives have begun a number of initiatives to lower noise near patient hallways, including putting new wheels on squeaky food carts.”

Caveats

“The bonuses and penalties do not apply to money Medicare pays hospitals for capital expenses, to teach residents or to treat large numbers of low-income patients. Hospitals with too few cases and ones that only offer specific specialties, such as psychiatry, long-term care, rehabilitation and cancer treatment, are exempted. Maryland hospitals are also excluded because the state has a unique reimbursement arrangement with the federal government.”

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