Medicare changes payments for outpatients, home health care

columbiahospitalLate Wednesday, the Centers for Medicare and Medicaid Services released its final hospital outpatient and ambulatory surgical center payment schedule for the 2014 fiscal year. A revised payment approach is designed to help hospitals and ambulatory surgical centers (ASCs) lower costs and strengthen Medicare’s long-term stability. One single code describing all outpatient clinic visits will replace the current five levels. CMS said this will encourage more efficient delivery of outpatient facility services by packaging the payment for multiple supporting items and services into a single payment for a primary service similar to the way Medicare pays for hospital inpatient care.

According to a story in Modern Healthcare, the move was triggered, in part, because too many hospitals practice upcoding – illegally picking billing codes that reimburse at higher rates than actual services provided. In a statement, Rick Pollack, executive vice president of the American Hospital Association said they are “extremely disappointed” with the new rule, which may hurt hospitals’ ability to provide outpatient care. The organization contends that CMS did not use accurate data when forecasting future reimbursements. “CMS has put hospitals in the difficult position of having only 35 days to implement significant changes in Medicare’s policies, procedures and payment formulas,” Pollack said.

On the home health care side, last week, CMS reduced Medicare base payments under the Home Health Prospective Payment System (HH PPS) by 1.05 percent for FY 2014, for a total cut of about $22 billion over the next four years.

“The clear conclusion is that saving money is more important to CMS than serving those who are so sick they cannot leave home without assistance,” said Val J. Halamandaris, president of the National Association for Home Care & Hospice, in a statement. “It is obvious that they turned a deaf ear to our pleas on behalf of aged, infirm, disabled, and dying Americans.” Halamandaris said the group intends to appeal to Congress to overturn the rule.

CMS also is moving closer to changing how it reimburses providers for long-term chronic care management, according to MedPage Today’s David Pittman. By 2015, providers will be paid for chronic care management services – encompassing a plan of care, communication, and medication management –  for patients with two or more ongoing conditions, as part of the agency’s continued effort to reduce costs, decrease hospitalizations, and improve overall quality of care.  Providers meeting CMS criteria will be compensated for managing Medicare recipients.

In a related story, Kaiser Health News’ Jordan Rau reports that Medicare penalized nearly 1,500 hospitals because of poor quality scores. Meanwhile, another 1,200 facilities saw payment bonuses based on high quality metrics.

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