Mid-Level Reductions: A Case Study

The PPACA involves many legislative changes that will affect hospital reimbursement. The PPACA requires every citizen in the United States to get health insurance and those that are noncompliant will face tax penalties. The PPACA requires all states to establish an American Health Benefit Exchange by 2014 to assure that health insurance is affordable to individuals and companies with 100 or less employees. The PPACA establishes a pay for performance program, which is a value-based purchasing (VBP) program in which Medicare pays hospitals based on their performance as compared to how they meet quality measures. Beginning in 2013 using the VBP program, hospitals will be paid based on their performance on many quality measures for acute myocardial infarction, pneumonia, heart failure, surgeries and hospital associated infections.

Now a statute, the physician/hospital pay for quality, not quantity, public law number: 114-10 signed April 16, 2015 also referenced as H.R.2 —1st Session of 114th Congress (2015-2016), sometimes called the “Permanent Doc Fix” 04/14/2015 : Passed Senate; 03/26/2015 : Passed House (Medicare Access and CHIP Reauthorization Act of 2015, 2015), which defines the payment and reimbursement reform to doctors treating patients with Medicare. This extensive reform includes the CHIP program insuring children and those families that don’t qualify for Medicare but are unable to afford private insurance and is funded by the federal government and individual states.

Although unfortunate to those receiving Medicare, the reduced payments to health care organizations will help offset the costs of covering more people. This means more out of pocket expenses for those receiving Medicare, but since the government is reducing the amounts paid to health care facilities, it may be likely that these facilities will reduce the costs of providing that care, so out of pocket expenses are not

According to Health Resources and Services Administration If the system for providing primary care in 2020 were to stay fundamentally the same as today, there will be an estimated shortage of 20,400 primary care physicians ("Projecting the Supply and Demand for Primary Care Practitioners Through 2020," n.d.). In addition this projection doesn’t include the decreasing number of people perusing the medical degree and the baby boomers retiring form this filed of science. In the hand we are experiencing a significant increase in NPs and PAs. Considering this projected shortage, which is actually a very frightening situation the increasing number of NPs and PAs, can effectively be integrated; we could reduce the number of physician shortage by over 69 percent in 2020.

Prior to September 2011, Medicaid Managed Care Organizations (MCOs) paid FQHCs a fee-for-service rate and HHSC reimbursed FQHCs the difference between the rate paid by the MCO and the FQHC PPS rate in quarterly wraparound payments. Pursuant to budget riders starting in the 2012-2013 General Appropriations Act, and continuing through the current appropriations bill, HHSC Rider 62 (HB1, 84nd Regular Session, 2015), MCOs were required to pay the full PPS rates to FQHCs up front. The stated intent of Rider 62 was to reduce HHSC administrative costs. The administrative cost was associated with the Texas Medicaid and Healthcare Partnership (TMHP), an HHSC contractor, calculating and disbursing the wrap payment to each FQHC. By moving responsibility for the wrap payment to the MCO, the administrative cost to HHSC was eliminated. Rider 62 did not contemplate a reduction in appropriate FQHC utilization.

This will be a cooperative plan with the primary care offices. Patients with chronic illnesses will be referred to care managers if they don’t already have one assigned.

The reimbursement method used at St. Anthony’s hospital is quite distinct depending on the party doing the payments. Payments are received from Medicare, Medicaid, private insurers and also directly from patients. The party responsible for Medicare payment is the Federal government and it offers payment mainly for the elderly. With the Medicare payment, hospitals receive a flat fee depending on the case. According to Gee (2006), most hospital revenue has declined because of the revised payment set by the Diagnosis-Related Groupings. The fee for most cases varies according to the Diagnosis-Related Group (DRG) it can be classified under. For example, Medicare pays only a fixed amount for an elderly patient suffering from pneumonia regardless

Reimbursement for the advanced practice nurse (APN) is improving but how they fit into reimbursement systems is vey important. One question that arises is if the APN should be paid the same fee for service as a physician or should only a percentage of the payment be received. Most third-party reimburses, which include a few large insurance companies are now reimbursing APNs and more states are getting on board with reimbursements by developing reimbursement models for APNs (Hamric, 2009). For example, Aetna US Healthcare, Anthem Blue Cross and Blue Shield of Kentucky, Medicare and Medicate all credential NPs as primary care providers and pay at 85% of the physician rate. Tricare of Kentucky credentials NPs and pays 100%.

Retrospectively reviewing this legislation, it is unknown as to why nurse practitioners were not granted 100% reimbursement or why the nursing profession accepted this payment scale. Every government policy is implemented within a historical perspective. Fluctuations in the environment and economic constraints have an immense effect on the ability of legislation to pass the many obstacles of government (3). In 1997 the government was undergoing vast budget cuts due to a declining economy. Although the American Nurses Association, state nurse practice organizations and nurse lobbyists originally argued for 97% of the physician reimbursement, however due to the current budget cuts the assumption that a lesser percentage would be more successful

Payment-determination bases are composed of three factors: cost, fee schedule, and price related. In a cost-payment basis the provider’s cost is the main method for payment (Cleverley, 2010). It is essentially a way to formulate fees for medical services. Prior to this practice, medical cost for medical services differ from state to state, which led to a variety of fee schedules. According to Brumley (2015), the varying fee schedules were inefficient for Medicare; therefore, to solve this issue Medicare linked fees to the actual cost of providing specific services. This became a component of the Section O of Title 42 in the code of Federal regulations; which sought to describe the different costs that can be included when it comes to calculating medical fees. The goal was to structure medical fees on a more cost-reasonable basis.

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).

The MPHFP enables certain rural hospitals to be licensed as Critical Access Hospitals (CAHs) that receive cost-based reimbursement from Medicare in return for limiting their services (Rural Assistance Center- CAH Frequently Asked Questions, 2012). Under costbased reimbursement, health care providers receive reimbursement based on actual costs incurred which is a more generous reimbursement method than allowed by the prospective payment system (Gapenski L, 2009). However, only those providers that fall under the following categories are eligible to become CAHs: currently participating Medicare hospitals; hospitals that ceased operation after November 29, 1989; or health clinics or centers (as defined by the State) that previously operated as a hospital before being downsized to a health clinic or center (Department of Health and Human Services, 2013). A Medicare participating hospital that wishes to convert to a CAH, has to meet certain criteria including (Department of Health and Human Services, 2013):        Be located in a state that has established a State rural health plan for the State Flex Program; Be located in a rural area or be treated as rural under a special provision that allows qualified hospital providers in urban areas to be treated as rural for purposes of

Health maintenance organization’s (HMOs) use of the primary care physician (PCP) as the “gatekeeper” initially had MCOs view restrictions as a negative approach to patients’ choices. However, some necessary steps have started to be implemented which reduce unnecessary utilization by enforcing some restrictions.

This paper will discuss the parity and disparity between the payment levels at the Ambulatory Surgery Center (ASC) and Hospital-based surgery center (HOPD). It will examine how payment is structured between a Medicare program and a private practice program. The terms parity and disparity mean the cost of procedures in the ASC and HOPD. The disparity between the two payment structures will be discussed first.

of the physicians can be defined. MGOA can then start to assign cost requirements to each physician