Here’s a bit of good news for Medicare, the popular government program that’s turning 50 this week. Older Americans on Medicare are spending less time in the hospital; they’re living longer; and the cost of a typical hospital stay has actually come down over the past 15 years, according to a study in the Journal of the American Medical Association.
Doctors, hospitals and government administrators have put a lot of effort into making Medicare more efficient in the past 15 years. Dr. Harlan Krumholz and colleagues at Yale University took on a study to see whether that effort has paid off.
“The results were rather remarkable,” says Krumholz, a cardiologist and leading health care researcher. “We found jaw-dropping improvements in almost every area that we looked at.”
The researchers looked at the experience of 60 million older Americans covered by traditional Medicare between 1999 and 2013. They found that mortality rates dropped steadily during that time, and people were much less likely to end up in the hospital.
“If the rates had stayed the same in 2013 as they had been in 1999, we would have seen almost 3.5 million more hospitalizations in 2013,” Krumholz says.
“People who were being hospitalized were having much better outcomes after the hospitalization,” he says. “They had a much better chance of survival.”
And the average cost of a hospital stay dropped too, he says, from $3,290 to $2,801 in inflation-adjusted dollars over the 15-year period for patients in the traditional Medicare program. (Researchers couldn’t quantify the experience in Medicare Advantage, the managed-care alternative to Medicare).
Krumholz attributes the improvement to a wide variety of measures designed to boost patients’ health, from prevention programs to advances in medical care. He says some of the savings also came about because medical care shifted from hospitals to less expensive outpatient clinics.
“They’re pointing out a very good thing in the medical system,” says economist Craig Garthwaite at the Kellogg School of Management at Northwestern University. He says the recession, which helped slow rising health care costs overall, apparently played a minor role in this story of Medicare.
Costs really are being contained, Garthwaite says. One other reason that’s happening is that the federal government is reimbursing hospitals and doctors less for treating Medicare patients.
“That’s an easy way to get control of medical spending in Medicare,” Garthwaite says, but “it’s just not something we can do in the private market, and we have to worry about how sustainable it is for the Medicare program overall.”
With the post-World War II baby boom now reaching retirement age, more and more people are turning 65 and becoming eligible for Medicare. That growth continues to drive up the overall cost of the program, even as that average cost per illness or hospitalization comes down. And as older Americans live longer lives, they use Medicare for more years than previous generations did.
Medicare is still running a bit of a deficit, but the situation is improving. The program’s trustees say its trust fund will be solvent through 2030. Some adjustments would be needed to keep the program in good financial health beyond that date.
Garthwaite says other recent trends could make matters worse, with one especially worrisome example being sharply rising drug prices.
“Some of these [new cancer] products are providing only a few months of life for several hundred thousand dollars,” he says. And the system doesn’t do a good job of making difficult judgments in situations like that.
Joseph Antos, an economist in health policy at the American Enterprise Institute, agrees that the good news from the Yale study doesn’t assure a rosy future. He’s concerned about the financial health of Medicare if, for example, an effective drug for Alzheimer’s disease is developed.
“I would argue that if anybody came up with an effective treatment for Alzheimer’s today, that treatment would be hailed as a major breakthrough and we wouldn’t be looking at the cost,” Antos says.
And that would almost certainly break the pattern that’s been documented over the past 15 years, where improving health has actually helped drive down the cost of medical care.
Medicare reimbursement information systems recently began comparing two distinct codes on home health agency claims before the claims are paid.
The rule change comes after an extended period of upgrading information systems and testing with the industry. The IT systems are comparing the Health Insurance Prospective Payment System code (HIPPS) on a claim to the HIPPS coded generated by a corresponding Outcomes and Assessment Information Set, known as OASIS.
According to the Centers for Medicare and Medicaid Services, “OASIS is a group of data elements that represent core terms of a comprehensive assessment for an adult home care patient and form the basis for measuring patient outcomes for purposes of outcome-based quality improvement.” The goal of developing OASIS was to measure patient outcomes and support outcome monitoring, clinical assessment, care planning and internal agency activities.
“If the HIPPS code from the OASIS assessment differs, Medicare will use the OASIS-calculated code for payment,” according to available guidance. “At this time, if no corresponding OASIS assessment is found, the claim will process normally.”
Many home health agencies create software to integrate necessary data entry and grouping functions in their information systems to support the new policy. Agencies without such software or unhappy with a current product can get free grouping software from Medicare.
Kidney-care providers could see their Medicare payments reduced by up to 2% in the next few years if they do not score high enough on quality measures.
The CMS on Friday proposed updates to policies and payments for end-stage renal disease, which would affect payments to more than 6,000 U.S. kidney dialysis facilities.
In recent years, the agency has focused on efforts to drive high-quality care, such as disease prevention, chronic disease management, improving outcomes and promoting efficiency.
The ESRD proposal released last week is part of that broader push. It would change how dialysis facilities are reimbursed by linking a portion of their payments directly to quality scores. It would also eventually add new metrics to the ESRD Quality Improvement Program.
There are currently 11 measures to evaluate end-stage renal disease care through the quality program. They include eight clinical measures, such as: how many patients receive the best vein access method (arteriovenous fistula) versus the least recommended (catheter), how well toxins are being filtered from the blood during dialysis; infection rates; and how well hypercalcemia is controlled. They also include three reporting measures, including patient experience, anemia and bone mineral metabolism management.
The CMS assigns a score for each measure, and those scores are later combined to create a “total performance score”—which ranges from zero to 10- for each facility. Centers that do not meet the minimum score established by a benchmark determination would be financially penalized up to 2% of its Medicare reimbursement.
It is estimated that the treatment of end-stage renal disease costs Medicare $34 billion in 2011, about 6% of all Medicare spending. Hemodialysis for end-stage renal disease costs the program about $88,000 annually per patient.
The CMS plans to add quality-of-life measures, such as pain and depression management and readmission rates in 2018. By 2019, two new measures will be adopted: one looking at seasonal flu vaccination, and ultrafiltration rates, a process for removing excess water and sodium from the body of kidney-failure patients.
Although studies have suggested that higher ultrafiltration rates in hemodialysis patients are associated with a greater risk of all-cause and cardiovascular deaths, nephrologist Dr. Alan Kliger, chief quality officer for Yale New Haven Health System, cautions against the premature use of the ultrafiltration metric.
Higher amounts of life-threatening fluids accumulate between treatments for patients who eat or drink more than recommended, and they would need ultrafiltration. “That doesn’t necessarily mean that higher filtration causes more deaths,” Kliger said. “They may be dying not because we are ultrafiltering them more but because they have physiologies that make them more dangerous patients.”
That particular measure has not been endorsed by the National Quality Forum, a nonprofit that reviews and endorses quality improvement metrics. In a draft report issued in June, the NQF’s Renal Standing Committee declined to recommend the metric the CMS plans to adopt and instead recommended a different one for ultrafiltration.
Dr. Frank Maddux, chief medical officer of Fresenius Medical Care, one of the two largest U.S. dialysis providers, expressed similar concerns about CMS’ use of measures that are either not endorsed or are being considered for removal by NQF.
He also raised questions about measures for standardized transfusion and hospitalizations, which he said appear to rely on baseline performance data submitted in 2013 for the 2018 payment year.
“It strikes me that those measures are not very mature,” he said. That’s a major concern since a 2% reduction is a “substantial issue all providers take seriously.”
However, even imperfect measures can work if they are valid, reliable and feasible in the evolution of the systems to capture data, Maddux said. “They become points of concentration for the organizations that are providing care.”
But, he added, “If that concentration is not aligned with the state of the science, then we aren’t spending our time on those things that are most important.”
Federal officials have spent years locked in a secret legal battle with UnitedHealth Group, the nation’s biggest Medicare Advantage insurer, after a government audit detected widespread overbilling at one of the company’s health plans, newly released records show.
The audit found that Medicare paid too much for nearly half of a sample of patients enrolled at PacifiCare of Washington state, a subsidiary of UnitedHealth Group. The audit was part of a cache of heavily redacted documents released to the Center for Public Integrity through a court order in a Freedom of Information Act lawsuit.
Matt Burns, a UnitedHealth spokesman, declined comment on the audit documents. However, during more than three years of confidential — and previously undisclosed — negotiations, the insurer argued that the audit was unfair and the results were flat out wrong.
The PacifiCare audit offers a rare look at government oversight of the popular and fast growing Medicare Advantage industry. These privately run alternatives to the basic fee-for-service Medicare program treat more than 17 million Americans at a cost topping $150 billion a year.
These audits test the accuracy of a billing tool called a risk score, Medicare uses risk scores to pay health plans higher rates for sicker people and lower rates for those with few medical needs. But federal officials concede that some health plans may overstate how sick their patients are, a practice known as “upcoding” that wastes billions of tax dollars every year. The audits are designed to recover those overcharges.
It is clear that officials at the Centers for Medicare & Medicaid Services knew years ago that risk scores rose much faster among Medicare Advantage plan members than for people who remained on traditional Medicare, a worrisome signal of creeping billing abuse. A major 2009 government study that was not made public suggested some plans “gamed” the system by exaggerating how sick patients were, for instance.
So in June 2008, officials picked five health plans, including PacifiCare of Washington, Inc., for pilot audits. Details on the four other audits appear to have been redacted in records released to the Center for Public Integrity. CMS officials said only that the pilot audits “recovered” $3.4 million.
Under the audit rules, two sets of auditors combed over medical records for 201 patients to confirm they had the illnesses the government had paid to treat. If these conditions are not properly documented in the medical charts, Medicare asks for a refund. By contrast, plans can get credit when underpayments are discovered.
Among the PacifiCare audit findings:
- Medicare paid the wrong amount for 128 of the 201 patients, an error rate of nearly two thirds. Payments were too high for 98 of the patients, too low for 30 of them. In total, the plan was overpaid by $381,776 out of $3,795,527 in payments in 2007.
- One in five medical conditions could not be confirmed, and most of these errors triggered higher payments than justified. CMS officials blacked out large chunks of the audit documents released, including the names of the medical conditions.
- Auditors cited a “lack of sufficient documentation of a diagnosis” most often as the cause for either denying or slashing payments. However, in more than a third of the errors, payment was denied because the medical file was missing the required signature of the doctor who treated the patient.
CMS records show that the audit dragged on for years because officials changed some rules in the middle of the game and set up a lengthy and bureaucratic appeals process for health plans to follow.
CMS shared “preliminary” audit findings with the company in December 2010, but took nearly two years more to present a final version.
In a letter on Aug. 21, 2012, CMS officials said UnitedHealth owed the government $381,776. CMS said that it would deduct the money from upcoming payments to the plan, and reminded the company it could appeal.
Scott Theisen, UnitedHealth Group chief financial officer, filed an appeal in a Sept. 20, 2012, letter. He argued that the audit ample was too small and that the insurer didn’t give the company enough time to secure sufficient medical records to justify its billing.
“Thus the amount of the overpayment claimed to be due by CMS cannot be accurate,” Theisen wrote.
On March 14, 2014, a CMS hearing officer remanded the case to the agency for further negotiations.
CMS wouldn’t say what happened next. In a statement, the agency wrote: “CMS takes seriously program integrity and payment accuracy in Medicare Advantage, and is taking steps to protect taxpayers, Medicare beneficiaries and the Medicare program. CMS is exploring how to make RADV hearing officer decisions public in such a way that safeguards the protected health information of Medicare Advantage enrollees.”
Back in 2008, CMS had announced that it would start applying penalties known as “extrapolation,” which have been widely used in other types of Medicare fraud investigations.
This meant that the billing error rate found in the sample of 201 patients would be applied to the PacifiCare of Washington plan. That could have dramatically boosted the extrapolation penalty.
But somewhere between 2008 and 2012, officials changed their mind and let Medicare Advantage plans off the hook.
CMS officials have never explained fully why they decided against extrapolating the audit findings.
But a confidential CMS presentation dated March 30, 2011, perhaps offers a clue. One slide estimates payment errors in Medicare Advantage at $13.5 billion for 2010, and notes that health plans “have an incentive to submit more diagnoses” in order to raise their payments.
When CMS sought opinions on the audits in December 2010, the presentation notes, it received more than 500 comments. “These comments express significant resistance to the implementation of the [Risk Adjustment Data Validation] audits and payment recovery based on extrapolated payment error estimates,” the presentation states. “Successful payment recovery based on payment error identified in these RADV audits will depend on CMS’ ability to address the challenges raised.”
One slide said that CMS was “expecting to respond to the comments and finalize the payment error calculation methodology and overall strategy shortly.”
As of last month, more than four years later, that still hasn’t been done.
The secrecy surrounding Medicare Advantage payments has prompted a stern rebuke from Senate Judiciary Committee Chairman Charles Grassley.
“The public’s business ought to be public, with few exceptions. An agency shouldn’t withhold internal deliberations unless there’s a really good reason for it, like a risk to national security. It seems to me that a discussion of a Medicare overpayment problem and what to do about it ought to be public,” the Iowa Republican said in an email.
“What is CMS worried about disclosing and why?” Grassley added.
Last month, Grassley wrote to Attorney General Loretta Lynch and CMS administrator Andrew Slavitt asking how many of the risk score fraud audits had been launched over the past five years and their results.
In a separate letter, Sen. Clare McCaskill, the senior Democrat on the Senate Aging Committee, asked CMS officials what’s being done to curb billing fraud and abuse alleged by Medicare Advantage whistleblowers, calling it “an issue that must be investigated further.”
Congress authorized the use of risk scores starting in 2004. It’s essentially an honor system in which health plan doctors assess every patient’s health risks (and thus the associated payments) based on specific medical conditions they have, such as diabetes. Exactly what’s permissible under the billing rules, however, remains confusing even to many health plan professionals.
“I think there’s really not a very good understanding of how this works,” said Holly Cassano, a medical coding consultant in Florida.
This piece comes from the Center for Public Integrity, a nonpartisan, nonprofit investigative news organization.
Several groups have submitted comments on CMS’ proposed meaningful use modifications for 2015 through 2017, Clinical Innovation & Technology reports (Walsh, Clinical Innovation & Technology, 6/15).
Under the 2009 economic stimulus package, providers who demonstrate meaningful use of certified electronic health records can qualify for Medicaid and Medicare incentive payments.
Details of Proposal
In April, CMS released a proposed rule that would shorten Medicare and Medicaid meaningful use attestation for eligible professionals and hospitals to a 90-day period in 2015.
Overall, the proposed rule would:
- Realign the reporting period starting in 2015 to allow hospitals to participate on the calendar year instead of the current fiscal year period;
- Reduce the number of meaningful use objectives to improve advanced use of EHRs; and
- Remove redundant measures and those that have become widely adopted.
In addition, the proposed rule would change Stage 2 meaningful use requirements related to patient engagement. Specifically, CMS proposed reducing the requirement for patients to use technology to electronically download, view and transmit their medical records from 5% of eligible providers’ patients to just one patient (iHealthbeat, 4/13).
Comments on the proposed modifications were due June 15 (iHealthbeat, 5/28).
American Medical Group Association Comments
The American Medical Group Association in its comments praised CMS for easing the program’s reporting requirements, as well as for proposing a shorter 90-day reporting period.
AMGA CEO Donald Fisher said, “This proposed rule reflects that CMS has been sensitive to the struggles that the health care industry has had with meaningful use by simplifying some of the reporting requirements through 2017.”
The group also urged CMS to help strengthen the health IT infrastructure to support future data sharing requirements (AMGA release, 6/15).
College of Healthcare Information Management Executives Comments
Russell Branzell, president of the College of Healthcare Information Management Executives, in his comments called for a middle ground on patient engagement. He wrote that rather than requiring every specialist to demonstrate that patients can “view, download and transmit” their health information, those data should be aggregated into a single location for patients.
He added, “I definitely want patient data made accessible to patients or those taking care of them. But I don’t want to get every note out of some subspecialty office” (Pittman et al., “Morning Health,” Politico, 6/16).
Consumer Partnership for eHealth Comments
Meanwhile, a group of 50 advocacy groups organized by the Consumer Partnership for eHealth and the Consumer-Purchase Alliance in its comments expressed disappointment, saying CMS’ proposal to reduce patient engagement requirements would undermine patient engagement efforts (Clinical Innovation & Technology, 6/15). Specifically, CPeH said, “CMS’ proposed amendments constitute a dramatic retreat from essential efforts to make patients and family caregivers true and equal partners in improving health through shared information, understanding and decision making” (“Morning eHealth,” Politico, 6/16).
Debra Ness — president of the National Partnership for Women & Families, which was part of the coalition — said the groups “urge CMS to keep the existing patient engagement thresholds.”
Meanwhile, Bill Kramer, co-chair of the Consumer-Purchase Alliance, noted that maintaining efforts to give patients and caregivers “electronic access to and use of their health information” is key to achieving interoperability in the U.S. health care system (Clinical Innovation & Technology, 6/15).
Healthcare Information and Management Systems Society Comments
The Healthcare Information and Management Systems Society in a letter to CMS supported the agency’s proposal to ease reporting requirements but urged CMS to be cautious moving forward with other proposals, Health Data Management reports.
Among other things, HIMSS recommended that CMS:
- Phase-in the new thresholds for the Patient Electronic Access Objective;
- Reconsider the “unrealistic goal” of the 2016 hospital electronic prescribing requirement; and
- Take into account the timing of the release of the final rule in terms of the “short turnaround in meeting” its requirements (Slabodkin, Health Data Management, 6/16).
Notice: Meaningful Use Hardship Exemption requests are due by July 1, 2015.
Providers who attempt to attest to meaningful use requirements under the Medicare and Medicaid EHR Incentive Programs may find some obstacles standing in the way. Various hardships may come into play to prevent some healthcare providers from receiving incentive payments from the Centers for Medicare & Medicaid Services (CMS). Under the EHR Incentives Programs, providers who do not meet certain meaningful use requirements will obtain a payment penalty from CMS next year.
However, CMS does offer an opportunity for providers to file hardship exemptions and, after reviewing the applications, may decide on exempting some providers from the payment penalties. CMS recently announced that Medicare eligible professionals may be able to avoid the payment penalty starting on January 1, 2016 by filing hardship exemption applications by July 1 at the latest.
Providers can find all the pertinent information about the hardship exemption application on the CMS website under the EHR Incentive Programs section. The instructions for filing the application can be found here.
To access the hardship exemption application for individual eligible professionals, CMS offers this document. If filing a hardship exemption as part of multiple Medicare eligible professionals, a different application is offered.
The website also offers providers some examples that would qualify them to be exempt from the EHR Incentive Programs. There are some specific circumstances that CMS would consider while other issues may not qualify a provider for the exemption.
Providers filing for the exemption need to illustrate a particular circumstance keeping them from attesting to meaningful use requirements that is completely out of their control. Additionally, providers will need to map out exactly how the issue impaired their practice from meeting meaningful use regulations.
Certain categories under the hardship exemption will need additional documentation from eligible healthcare professionals. In order for CMS to consider a hardship exemption from the payment penalty, it is vital to apply by July 1.
A few key healthcare professionals, however, will not need to apply and will be exempt from the program penalties immediately. These eligible professionals include:
1) A newly practicing eligible professional
2) Hospital-based providers, specifically those who perform more than 90 percent of their services in an inpatient setting or emergency department
3) Specific specialists such as anesthesiologists, pathologists, radiologists, and those practicing nuclear medicine
For the providers listed above, CMS will be looking at Medicare data to determine whether an exemption for the payment penalty can be granted automatically. The exemption applications need to be submitted electronically or sent by direct mail no later than 11:59 p.m. ET on July 1, 2015.
To be clear, this exemption will only be valid for the following year. In subsequent years, if providers are still unable to meet meaningful use requirements due to a hardship, additional applications must be filed for the corresponding years.
It is also important to mention that there are certain healthcare providers (Medicaid-only healthcare workers, those with no claims to Medicare, or hospital-based staff) who cannot participate in the Medicare EHR Incentive Program and will not be considered Medicare eligible professionals. These individuals will not be affected by payment adjustments and do not need to apply for any exemptions.
To learn more about how DAS is helping practices alleviate the stress of Meaningful Use reporting, schedule a free consultation with a Region Manager today.
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