MHA Today | June 2, 2017

June 2, 2017

MHA Today: News for Healthcare Leaders

twitter linkedin MHA Today is provided as a service to members of the Missouri Hospital Association. Additional information is available online at MHAnet.


Herb Kuhn, MHA President & CEO

In the era before GPS, trips were informed by large printed and folded representations of cities, states and nations — maps. Unfortunately, and unlike modern GPS, they were only as accurate as the date stamp — there was no way to understand whether the route was open or under construction, or whether amenities existed at the stop.

Maps are now ubiquitous. We’ve mapped the human genome, a cancer gene network and the universal tree of life. More generally, theories in science and the humanities can be fruitfully understood as maps of nature and of society. This is data mapping. And, just as traditional maps help us understand a route, mapped data allows users to view information at a variety of scales, and can help policymakers identify economic, demographic and geographic differences that can inform investments and help refine policy.

As the Centers for Medicare & Medicaid Services prepares to refine the system for Medicare disproportionate share hospital payments in the new inpatient PPS proposed rule, they’ve sought comments on a new, more accurate mapping system. As part of the Accountable Care Act, Congress sought to split DSH payments, with 25 percent remaining as traditionally paid and 75 percent distributed in a manner that focuses on uncompensated care. CMS continues to use Medicaid days and supplemental security income percentages to determine DSH eligibility and per claim payment adjustments. This method will remain for the 25 percent share. CMS uses Medicaid days and SSI patients to distribute the other 75 percent known as uncompensated care payments. CMS now has an alternative distribution method by using Worksheet S-10 — a cost report tool — which allows CMS to collect uncompensated care data from across the nation. CMS has proposed, over a three-year period, distributing the uncompensated care pool based on the data collected from the S-10. This change — as with any change — will be a challenge. However, CMS movement at this time makes sense for several reasons. As many have observed, Medicaid days are a poor proxy for uncompensated care. The new method will align payments more accurately with hospitals that are providing the most uncompensated care. map of uninsured

This is important, since a recent study showed that for every uncompensated care patient a hospital takes, they will be paid less — not more — under the current way of making payments. It’s counterintuitive; you’d expect that an uncompensated care pool would pay more. However, the current methodology actually takes money away from those who are providing care to the uninsured. Mapping helps establish a target — and it’s obvious the system is off target.

Second, this new mapping helps both urban and rural hospitals. For all hospitals, but especially rural hospitals, much of their uncompensated care is driven by what they see coming through their emergency departments. The current methodology — with its focus on inpatient Medicaid days — misses entirely the care that is provided through the ED. Maybe this is why in its proposed rule, CMS projects a 31 percent increase in rural hospitals’ uncompensated care payments in 2018.

Third, the S-10 is new and could be subject to errors. But what part of the Medicare program is error free? Approximations and relative weights permeate the system. Depending on a myriad of factors, high-device-cost DRGs can be more profitable, while in other areas medical DRGs work better financially. Current cost reports are constantly being audited and adjusted. The outlier payment system is prone to forecast errors and the risk-adjustment methodology only accounts for a fraction of the issues presented by the patient. Since DSH is a forward-looking program, it’s unlikely that any system will provide a perfect estimate every time. However, CMS’ effort to identify the most accurate mapping system from the known location to the destination is to be applauded. Further, the Medicare Payment Advisory Commission has conducted similar research to show reasonable accuracy with the S-10 data. The Worksheet S-10 is a more accurate and detailed map than historical alternatives. In effect, perfect should never impede improvement.

Finally, the timing for the transition works on two fronts. First, it begins with the year 2014 — the same year as Medicaid expansion. The policy change offers the best opportunity to transition to uncompensated care. This also helps remove the long-held belief that utilization by low-income patients with insurance serves as a reliable proxy for the cost of patients with no insurance. Getting this part of the map accurate is essential. Second, CMS has added $1 billion to the overall pool. This will effectively work like a stop-loss program, easing the challenges of the transition.

Like a vehicle’s GPS, the S-10 system may not be perfect. But the old systems are like a traditional map — only as good as the date stamp and more than likely not to fold back into the expected shape.

A better system can get closer to the target. And, that’s good for hospitals and the patients’ hospitals serve.

Let me know what you’re thinking.

P.S. — MHA is participating in the American Hospital Association’s Hospitals Against Violence or “#HAVHope Campaign.” June 9 is the campaign’s national day of awareness. Throughout the week, look for stories on social media about what hospitals can do to help reduce violence in the communities they serve. I encourage you to participate.

Herb Kuhn, MHA President & CEO

Herb B. Kuhn
MHA President and CEO

In This Issue
Congressional Committee Chairs Question 340B Program
MO HealthNet Changes Claim Submission Cutoff Date
CMS Releases Hospital-Specific Reports For MSPB Measure Preview Period
TJC Updates Performance Measure Report

state and federal health policy developments

Congressional Committee Chairs Question 340B Program

Staff Contact: Daniel Landon

Chairmen of the U.S. House of Representatives’ Energy and Commerce Committee and two of its subcommittees have written a letter to the federal Health Resources and Services Administration expressing concern “about the 340B program’s rapid growth without additional and proportional oversight.” The 340B program provides price discounts on pharmaceuticals. The chairmen note that HRSA audits “commonly find that covered entities bill for duplicate discounts on the same drug, and divert 340B drugs to ineligible patients.” The letter asks HRSA to submit all 340B audits for fiscal years 2015 and 2016 to the House Energy and Commerce Committee by Thursday, June 15. 

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MO HealthNet Changes Claim Submission Cutoff Date

Staff Contact: Kim Duggan

MO HealthNet has changed the cutoff to submit claims for the June 16 payroll to Tuesday, June 6. The original cutoff date was today. Any claims entered after the June 6 cutoff will be processed on the July 6 payroll.

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Quality and Population Health

CMS Releases Hospital-Specific Reports For MSPB Measure Preview Period

Staff Contact: Sherry Buschjost

The Centers for Medicare & Medicaid Services has released hospital-specific reports for the claims-based Medicare spending per beneficiary measure. The HSRs pertain to the fiscal year 2018 Hospital Value-Based Purchasing Program review and correction period, and Hospital Inpatient Quality Reporting Program preview period, which ends Monday, June 26. Hospitals can view their HSRs on the QualityNet Secure Portal. Details are available. 

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TJC Updates Performance Measure Report

Staff Contact: Sherry Buschjost

The Joint Commission has announced that an updated performance measure report is available for TJC accredited hospitals. The accountability composite rate page was removed from the report as a result of the retirement of a significant number of accountability chart-based measures that were used in the calculation of the composite rate. TJC made other minor modifications to text in the report, such as changing “measure set” to “measure topic” and removing the column labeled “accountability measures” in the summary of active measure pages.

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Did You Miss An Issue Of MHA Today?

June 1, 2017
DHSS Director Issues Statement On Abortion Complications Reporting
MHA Distributes Analysis For Updates To 2018 Medicare SNF PPS
MLN Connects Provider eNews Available

May 31, 2017
MHA Urges Governor To Approve Medical Liability Legislation
Report Reviews Details Of AHCA Legislation
Mallinckrodt Responds To McCaskill Drug Pricing Query
FFY 2018 Proposed Medicare IRF PPS Available
KHN Announces New Zika Threat
Rural Funding Opportunities From USDA

May 30, 2017
CMS Announces Date To Replace SSN Identifier With New Medicare Beneficiary Identifier
DHSS Provides Emergency Preparedness Resources

Consider This ...

More than 7,000 children visit the emergency department every year for problems related to medication reactions and errors in giving medication.