Independent Prospective Payers System: A Case Study

This is an opportunity for hospitals to work more closely with skilled nursing facilities and other post-acute providers to improve care transitions, and experience fewer readmissions. The ACA impacted hospitals by holding back a one percent reimbursement rate. Hospitals will actually need to perform and deliver high-quality evidenced based care to recover the one percent withheld reimbursement rate while hospitals that exceed the benchmark, will received a higher reimbursement rate over the one percent. The Act is intended to help spur the trend of more integrated care throughout the continuum. The Affordable care act (ACA) of 2010 designed programs for improvements and innovation in the quality of hospital care by instituting the Medicare’s hospital readmission reduction program. Through this program, CMS reduces Medicare payment bt one percent for hospitals for hospitals that demonstrated high rate of avoidable readmissions for patients with a diagnosis of heart failure, heart attack

When focusing on the Centers for Medicare and Medicaid Systems strategies for improvement with unnecessary emergency room visits, a major key area is accessibility to health care at the appropriate health care setting. For many years, there has been the perception that the emergency department is the only place for someone who is uninsured or underinsured can go to receive the needed and appropriate health care, and in some situations that may be the case. (Rhodes et al, 2013, p.394) Due to the decreases in reimbursements for the publicly funded, more and more physicians are opting out to treating these patients, thus leading to an increase in emergency department utilization. According to a study conducted by Rhodes, Bisgaier, Lawson, Soglen, Krug, and Haitsma, this is becoming a greater concern for the

This model reimburses hospitals based on quality of care instead of the volume of patients. The quality of care is assessed by patient questionnaires and if hospitals are unsatisfactory penalties may be imposed (Edwoldt, 2012). The value-based system also affects Medicare and Medicaid. It was reported that Medicare readmissions within 30 days of discharge cost 17 billion dollars annually (Edwoldt, 2012). Due to the high costs of readmissions Medicare and Medicaid have implemented a Hospital Readmission Reduction program. A formula is utilized to evaluate readmission rates within 30 days of discharge for any medical reason related to their original admission such as heart failure and pneumonia. Upon review the hospital is potentially penalized. It is important that nurses strive to provide excellence in care despite their beliefs on the ACA. Nurses have the ability to provide a safe patient environment and reduce the risk of hospital associated infections by following hospital protocols such as hand washing.

This article discusses how Medicare Carriers and Fiscal Intermediaries use coverage determinations to establish medical necessity. When the condition(s) of a patient are expected to not meet medical necessity requirements for a test, procedure, or service, the provider has the obligation under the Beneficiary Notices Initiative to alert the Medicare beneficiary prior to rendering the service. The Medicare beneficiary is notified via the Advance Beneficiary Notice (ABN) (see page 235 in Appendix B).

In 2013 an average of one out of eight Medicare patients are readmitted within a 30-day period which lead to the estimated costs of around $18 billion a year for Medicare patients alone. Hospitals will either be penalized or receive bonuses for their performance with readmissions. This program will encourage hospitals to concentrate on ways to improve coordinating transitions of care while improving the safety and quality of care provided. In order to

On October 1, 2013 CMS has implemented a two midnight rule. If a patient is not in the hospital over two midnights the claim will not be eligible for payment under Medicare Part A (Pahuja, 2014). The physician must document and prove necessity for a two night stay. The American Hospital Association and three hospitals have sued Medicare based on ethical standards of RAC. The claim is that RAC auditors are paid based on the funds recovered from hospital audits. The push to pay auditors a flat fee, eliminating the unsubstantiated over riding of a physician decision in order to increase the amount of dollars

Contrary to this, anecdotal reports stated that other clinicians sometimes spend more times in checking and treating patients with severe illnesses or who are in critical conditions, which made the physicians care for a greater number of patients with lower acuity. Whenever a physician and clinician bill for the same service, it is very difficult to tell if the physician saw a more complex patient. Due to these uncertainties in comparing their services, the Commission is reluctant in altering the payment differential. From that discussion, every provider must be familiar with some fundamentals about Medicare. First and foremost, there is Medicare Part A, which actually covers skilled nursing home, hospital, and home health charges; and then there is Medicare Part B, which then envelops most outpatient services, the care that patients in particular obtain from a doctor’s office (Fishman, 2002).

Healthcare in the U.S is most expensive than any other developed country. The U.S spends far more on per capita as compared to any other developed. U.S scores low on many outcome measures, inefficiencies and wastes and quality measures as compared to other countries. The Patient Protection and Affordable Care Act is developed to strengthen these failures in the health care system. The U.S healthcare is transforming care from volume based reimbursements to value based payments. The healthcare law works around providing more patient centered care and better preventive care. One of the payment reforms with Obamacare is to penalize the hospitals with high readmission rates for the three conditions – Acute Myocardial Infarction, Heart Failures and Pneumonia.

“The Tax Equity and Fiscal Responsibility Act (TEFRA), signed into law September 3, 1982, mandated the development of a prospective payment methodology for Medicare reimbursement to hospitals.” http://sunlightfoundation.com/blog/2009/09/08/slug/. It changed Medicare reimbursement from a fee for service to prospective payment system. Which is where there`s a reimbursement method where`s there an amount of payment determined in advance of services being performed. The rates are done annually. Reimbursements for inpatient care by a classification scheme called diagnosis-related groups. If the patient might have to stay longer in inpatient care more than average days, the hospital may lose money on that patient.

The aim of the Affordable Care Act (ACA) is to reduce hospital readmission and to increase implementation of transitional care coordination for low health care cost. One benefit of establishing this

The Health Insurance Portability and Accountability Act (HIPAA) allows for the sharing of information for research purposes (Schonfeld et al., 2011). However, Croll (2010) asks,

Enforcing this act in the healthcare facility is necessary for healthcare administrators to be aware of facilities that receive patients, provide care, and cease unnecessary transfers to avoid the lack there of. “This means if a patient arrives at a hospital that accepts Medicare, the hospital isn’t allowed to refuse patient care, and this protection also requires healthcare providers to assess and stabilize all patients regardless of financial status”, (American Health Lawyers Association.

In 1983, the Medicare prospective payment program was implemented which allowed hospitals to be reimbursed a set payment based on the patient’s diagnosis, or Diagnosis Related Groups (DRG), regardless of what treatment was provided or how long the patient was hospitalized (Jacob & Cherry, 2007). To keep the costs below the diagnosis related payment, hospitals had to manage efficiently the treatment provided to a client and reduce the client’s length of stay (Jacob & Cherry, 2007). Case management, or internal case management “within the walls” of the health care facilities was created to streamline costs while maintaining quality care (Jacob & Cherry, 2007).

For Medicare, readmissions are defined as an admission to an acute care hospital within 30 days of discharge from an acute care hospital (Horwitz, L. et al, 2011). Factors affecting unplanned readmissions vary greatly among providers and geographical region, and are opportunities increase quality and coordination of care, thus improving health outcomes. In 2005, the Medicare Payment Advisory Commission (MedPAC) conducted the Medicare Claim Finding analysis; MedPAC surveyed hospital Medicaid claims to analyze their hospital readmission data. This research from MedPAC showed that 75% of Medicare admissions were preventable and 17.6% of Medicare admissions resulted with a readmission within 30 days (MedPAC, 2011). Furthermore, this large percentage of preventable admissions were taking a toll on payers financially. The cost of these 75% preventable readmissions amounted to fifteen billion dollars (MedPAC, 2011). This data raises concern regarding the financial burden of unnecessary admissions as well as quality issues. Due to the high cost and decreased quality of hospital

(Elhauge, 2010). Fragmentation leads to duplication of tests and effort. Often, physicians do not have test results and notes from prior treatments. This results in wasteful duplication of efforts. Fragmentation leads to unplanned hospitalizations. Approximately 20% of discharged Medicare patients are re-hospitalized within thirty days. (Jencks, Williams, Coleman, 2009) It is estimated that only 10% of those readmissions are planned. (Jencks, Williams, Coleman, 2009) Patients can receive better continuation of care if their doctors coordinated better, if there was better discharge planning and incentives for providers to control costs after the patient has been discharged.