Are You Ready for CMS’s multi-faceted Reimbursement Reduction Movement? (Part 1)

Healthcare Finance News posted this back in May. I love the first line of this article:

“Take heed, hospital administrators – Uncle Sam is watching.”

Oh how true. Most everyone involved in healthcare knows that “Uncle Sam is watching.”

And we also know that good ole CMS is getting pickier and pickier about what they are going to pay for these days.

“While no healthcare sector is being spared from the reimbursement knife, the Value-Based Purchasing initiative is aimed squarely at hospitals.” {Value-based purchasing (VBP), which links payment more directly to the quality of care provided, is a strategy that can help to transform the current payment system by rewarding providers for delivering high quality, efficient clinical care. Click here for more details.} “It is part of a larger reimbursement reduction movement that also includes the Recovery Audit Contractor (RAC) program, Medicare-Severity DRGs (MS-DRGs) and pay-for-performance (P4P).”

“The intent is to use the combination of transparency and fiscal reward to drive clinical quality, patient-centric services and operational efficiency.”

“This program, which I call the ‘Hospital Acquired Payment Adjustment Provision,’ is an overall movement to control costs at the Medicare and Medicaid levels,” said Walt Zywiak, principal researcher for CSC. “CMS has decided it will not make payments for hospital-acquired conditions. Overall, how it works is that if a hospital submits a Medicare claim for any of 10 CMS-identified conditions that were not present upon the patient’s admission, payments for those claims will be reduced.”

The 10 categories of conditions that CMS selected for the Hospital Acquired Conditions (HAC) payment provision are:

1. Foreign Object Retained After Surgery
2. Air Embolism
3. Blood Incompatibility
4. Stage III and IV Pressure Ulcers
5. Falls and Trauma
   • Fractures
   • Dislocations
   • Intracranial Injuries
   • Crushing Injuries
   • Burns
   • Electric Shock
6. Manifestations of Poor Glycemic Control
   • Diabetic Ketoacidosis
   • Nonketotic Hyperosmolar Coma
   • Hypoglycemic Coma
   • Secondary Diabetes with Ketoacidosis
   • Secondary Diabetes with Hyperosmolarity
7. Catheter-Associated Urinary Tract Infection          (UTI)
8. Vascular Catheter-Associated Infection
9. Surgical Site Infection Following:
   • Coronary Artery Bypass Graft (CABG) – Mediastinitis
   • Bariatric Surgery
     • Laparoscopic Gastric Bypass
     • Gastroenterostomy
     • Laparoscopic Gastric Restrictive Surgery
   • Orthopedic Procedures
     • Spine
     • Neck
     • Shoulder
     • Elbow
10. Deep Vein Thrombosis (DVT)/Pulmonary Embolism (PE)

• Total Knee Replacement
• Hip Replacement

Source: http://www.cms.hhs.gov/HospitalAcqCond/06_Hospital-Acquired_Conditions.asp

So, we see that CMS is putting hospitals to the test when it comes to transparency in documentation and quality of care. As an administrator, how do you ensure that your physicians are accurately documenting care administered to patients, according to the rules of CMS? Are you relying on them to include this in their dictated reports? If so, how do you remind them {uh, change their behavior} to include documentation of POA conditions? Post-it notes? Posters on the wall? Notes in the Physician Lounge? {All of which make little-to-no impression on the physician.}

OR, have you invested in a compliance-driven documentation program, like ComplyMD, that will help your physicians deliver robust documentation to your facility? Chances are, you have not. Chances are, your EMR will not do this either.

Better documentation is becoming increasingly important. Remember, Uncle Sam is in fact watching. You better get equipped to handle all of his demands.

Does IT promote Efficiency in Healthcare Facilities?

{The right technology, in the right facility, with the right people….}

This is part one of a two part series from Modern Healthcare Magazine’s May 26 article “Providers Turn to IT for Efficiency, but is it Working?” .  Though they start off discussing IT in laboratories, I believe we can take their words and apply it to any area/department of a healthcare facility.

“Indeed, technology plays a role in productivity across the board, and the healthcare industry is no exception. From faster laboratory results to real-time electronic information in emergency departments to online ‘dashboards’ that monitor performance metrics – providers have begun to embrace automated processes to improve their operations.”

Automated processes, along with point-of-care electronic systems can greatly increase operational efficiency. The keys to success (in my opinion) are: (1) a great implementation, which leads to great adoption and (2) an already well-run facility that’s ready for such an IT implementation.

Despite the boost in efficiency that IT can bring to a facility, there are usually some major hurdles to overcome.

“Still, there are significant challenges to adopting various technologies. Critics of electronic health records have said that the technology can be confusing and hard to implement, and it winds up disrupting work and limiting productivity.”

That is a very valid point. Technology can be confusing and often disrupting. And yes, if it’s not implemented right, it could perhaps limit productivity. That’s why you must have the right technology, implemented at the right facility, with the right people who are ready for such a change. Technology implementations will always bring about change. Naturally, we as humans are often resistant to change, especially when we what we’re doing now “works”. But bottom lines aren’t maximally impacted by what “works”. Patient care isn’t improved by simply what “works.” If you want to be competitive in this day and age, you better get ahead of the curve. Your facility better be ready for change, constant change.

Operating Efficiently

This short article brings to light the lack of lack of intra-operative IT system implementations in the U.S., along with the hope for “an uptick in adoption of health information technology under the twin prods of a falter economy and IT funding courtesy of the economic stimulus package.” With intra-operative being the least penetrated of the four areas of the OR market, it could potentially hold the greatest amount of opportunity. And with the stimulus package funding, the area with the most opportunity could be the greatest beneficiary of the funding. Here’s a little proof on how much the OR impacts a hospital’s bottom line: “The reality is the OR is the cash-flow engine of the hospital” says Kermit Randa, senior vice president of sales and marketing for Surgical Information Systems. “A hospital generates on average 65% of their margins from the operating room. According to the Joint Commission, 55% of the infections happen in the OR and well over one-third of the supply costs happen in the OR. You show me a poorly performing OR and I’ll show you a poorly performing hospital.”

Do You Equip Your Physicians with the Proper Tools?

“Hospitals across the country lose multiple millions of dollars every year due to mismanagement of the billing process. No matter the size of the organization, billing inconsistencies affect all healthcare facilities to some degree—even those that are on top of the problem. On average, providers lose 5 percent of gross revenues, and that can translate into millions of dollars for a single organization.”

“Improving Cash Flow with Better Charge Capture & Denial Management” MedAssets & HFMA. October 2005

As we all know, profit margins are tightly squeezed in the healthcare industry. The billing process has a huge impact on those profit margins. What do facilities bill for? Patient encounters. How do they know what to bill for? Through physician documentation. How will these patient encounters be properly documented? There… you’re stumped. It’s not through dictation after the fact, and it’s not on their 3×5 index card they carry around in their pockets.