Healthcare

Are you wondering about the status of your Medicare Disproportionate Share Hospital (DSH) payments in light of the recent Allina DSH court ruling? You’re not alone.  An April 2014 ruling from a U.S. Court of Appeals for the District of Columbia Circuit upheld a previous ruling that a Health and Human Services (HHS) rule change in 2004 (codified in 2007) was procedurally defective. The lawsuit had to do with a rule change the HHS made to determine DSH payments in 2007. The hospitals claimed there was not proper notification. Although the court ruled favorably for the hospitals, what happens next is still unknown. 

The appeals court included instructions in the ruling that gave the HHS room to reach the same policy decision through administrative adjudication. The bad news for providers is that adjudicatory findings can be applied retroactively. The Centers for Medicare and Medicaid Services (CMS) has not yet issued a definitive guideline on how to retrofit the reimbursement fractions for the years in question. 

Earlier this month, the Journal of Accountancy published a detailed article about the shared-responsibility provisions of Section 4980H of the Affordable Care Act. The 3200-word article, titled "The Sec. 4980H assessable payment for large employers," demonstrates how time-consuming and complex traversing the provision can be, and time is running out for employers to determine if they are "applicable large employers" and, more importantly, put the necessary payroll systems in place to comply with the provision.

Team-Based Care – Part III

For health care organizations to successfully implement any type of team-based approach to patient care there are some things to consider. The culture will have to change to encourage adoption of this new approach and patients, just as physicians, will need to change.

In a field where every position already feels they are working as hard as they can, being passionate about new responsibilities can be difficult.

The consequences of a shift in the Fee-for-Service (FFS) revenue model to outcomes-based compensation is creating a tsunami of change for hospitals. Let’s look at how this shift is affecting the valuation of hospitals in a buy or sell situation. 

In an FFS revenue model, valuations were based on how much revenue generated was attributed to volume. That is all changing with the Affordable Care Act (ACA). Today, hospitals face a variety of issues that impact day-to-day operations and the bottom-line:

• Declining inpatient volumes
• Lower reimbursement rates  per patient from Medicaid and Medicare with private payors starting to follow the trend
• The advent of high deductible plans in private pay
• Changing diagnosis codes
• Enhanced regulatory vigilance 

These factors contribute to a financial model where  operating expenses are outpacing revenue.

Here is a round-up of health care stories that are catching our interest this week.

Is the Health Care Workforce Prepared for an Increase in Alzheimer Patients?

The April issue of Health Affairs is devoted to the latest research and thinking about Alzheimer’s disease. Alzheimer’s cases already overwhelm health care facilities and families. The challenge is expected to worsen with an increase from 5 million cases in 2013 to 13.8 million cases in 2050. Here is detailed look at how to increase and train a work force that is prepared for the challenge. 

As hospitals continue to ramp up efforts to acquire and contract with physician practices, they must do so in a way that reflects not only good market strategy, but also protects future financial stability and regulatory compliance. Hospitals that are in an aggressive acquisition mode often point to the looming changes in reimbursement models that shift payments from fee-for-service to an outcomes-based model focused on episodes of care. Many hospitals feel that in order to stay competitive in this changing market , they need to align with physician practices, and do it expeditiously before competitors beat them to the punch. But at what cost?

Cutting administrative costs has traditionally been the first strategy hospitals use to make up a budget deficit. But in today’s health care environment, it will take more than reducing personnel and operational expenses to make up the shortfall that is on its way, if not already here. There are a variety of reasons why cutting administrative spending won’t balance the budget – but in a nutshell, it’s not enough and it does not drive better patient care. 

Many hospitals already lose money on Medicare and Medicaid and those reimbursement amounts continue to drop. It is also anticipated that private payers will reduce their rates in proportion to the federally funded programs.  Medicare Fee-for-Service (FFS) reimbursement models are on their way out. Physicians and health care systems will be forced to adapt to changing models in order to stay in business. 

Health care in 2014 is in a state of flux. The Affordable Care Act (ACA) Health Insurance Exchange Marketplace opened in October 2013 with a rough start that has still not gained traction. Meanwhile, Medicare and Medicaid are squeezing reimbursement. And there is a growing population paired with a shrinking supply of doctors. These are only a few of the challenges facing health care professionals this year. 

So what are administrators doing to meet these challenges and transform their institutions to meet the new health care realities? For one thing, forward-thinking leaders are not sitting on the fence. They are accepting the reality of lower reimbursements - taking a hard look at old thinking and throwing it out if it doesn't make sense anymore. Here are four habits of highly effective health care leaders: 

“Status quo is not a strategy”

Welcome to our conversation about changing the culture of health care organizations. Each week we will dive deep into the challenges facing health care providers and the big ideas that are solving them. We’ll also monitor trending news to bring you stories that are important to improving the health of medical providers.