The Autumn Institute A Dual Chapter Event OHA Update Charles Cataline Vice President, Health Economics and Policy Ohio Hospital Association

The Autumn Institute

A Dual Chapter Event

OHA UpdateCharles Cataline

Vice President, Health Economics and PolicyOhio Hospital Association

[email protected]

September 25, 2014

mailto:[email protected]

Agenda • Federal o Medicare FFY 2015 IPPS Final Rule o Medicare CY 2015 OPPS Calls for More Bundling and Packagingo Medicare RAC Contract Re-bid Gets Weirder; Where is Medicaid? o OHA Working with ODM on Medicare DSH Data

• State o Update on Medicaid/Ohio Exchange Enrollment Targetso Medicaid APR-DRG Transition: Year II Yields Unexpected Results;

What’s Left?o BWC 2015 Hospital Payment Targets

• Other Finance / PFS o 2011 Medicaid DSH Audit is Done, 2012 Kicks in o Medicaid Episodic Payment Plan Moving Forwardo SAFE Program Audits Possible Next Yearo Hospital Price & Quality Transparency Still an Issue

Sept. 25, 2014HFMA Central & NW Ohio Chapters

2

Medicare 2015 IPPS• Market Basket Inflationary Update = 2.9%

– Market Basket Adjustment (ACA) = (0.2%)– Productivity Adjustment (ACA) = (0.5%)– Documentation and Coding Effect (ATRA) = (0.8%)– MS-DRG Budget Neutrality Adjustment = (0.3%) Total (With no Other Program-Based Adjustments) = 1.1%

• VBP, Readmissions & HAC Reductions also Applied• 2% Sequestration Still in Effect• Larger Than Expected Medicare DSH Cuts• Increase in Outlier Threshold (From $21,748 to $24,758)• Penalty for Providers That Aren’t EHR “Meaningful Users”

Overall (CMS) = Program Expenditures Reduced $756 M• Wage Index Revisions Due to Revised Census Tracts• Short-stay Payment Policy on Hold (for now!)

3HFMA Central & NW Ohio Chapters

Sept. 25, 2014


Sept. 25, 2014

Medicare 2015 OPPS (Proposed)No Major Changes•Proposed MB Rate increase of 2.1 percent•Expanded Packaging/Composite APCs

– 28 Comprehensive APCs for Device-Dependent APCs– Conditional Packaging of all Ancillaries With Geometric

Mean Cost of $100 or Less – Prosthetic Supplies Deemed to be Part of APC

•Physician Certification Only for Long Inpatient Stays– Does not Eliminate Need for Proper Physician Order

•Services Furnished in Off-campus Provider-Based Departments Must be Identified on Line-Item Basis


Sept. 25, 2014

Medicare RAC• RAC Contract Rebid Still on Hold

• New Regions Drawn to Re-Weigh Claims Volume• Existing Region B Subdivided – at the Very Least Some States in

Region B Must Switch Contractors• CMS “Paused” Medicare RAC Activity Until New

Contracts are in Place• Feb. 21 – Last Day a RAC can Issue Post-Payment ADR• Feb. 28 – Last Day a MAC can Issue ADR for RAC Pre-Pay Review • June 1 – Last Day a RAC Can Send Denied Claims to MAC for Recovery

• BUT… CMS Has Now Reopened Existing Contracts to a Limited (?) Number of (Mostly) Automated Reviews. • No Short-stay Reviews • No Details and/or Effective Dates Out as Yet - Stay Tuned!!

Medicare RAC Maps – Old Vs. New

Other Medicare RAC Process “Improvements”In the Interim, CMS Continues to “Refine” RAC Program

• Medicare RAC Program Administrative Improvements• Expanded Services Eligible for Inpatient “Part B” Re-Bills• New Offer to Buy Out Outstanding Claims Under Appeal

• @ 68% of “net paid amount”• Not all Providers or Claims Eligible are Eligible• Formal Agreement and MAC Review of Claims Required

• Two-Midnight Rule• Proposals for IPPS “Short-Stay” Claims Payment

What’s in it For CMS?• Fewer Appeals at ALJ• Settle Lawsuits, or at Least Lessen Possibility of Congressional

Action

But is it Enough?


Sept. 25, 2014

CMS: Five Medicare RAC Program Improvements


Sept. 25, 2014

What’s Up With The Medicaid RAC?!• ODM/CGI Contract Ended in July• ODM Assumed Responsibility for Outstanding

Reviews, Recoveries and Appeals– ODM Will Internally Correct Claims Recovered in

Error– ODM will Complete any Reviews of ADRs/Medical

Records Sent to CGI Before Contract Ended– ODM Will Manage Any Requested Appeal CGI did not

Complete• Interest on New Recoveries Will Only Accrue to Original

Overpayment Notification or Appeal Request

– No Date Released for any of the Above!


Sept. 25, 2014

State Update: Medicaid Expansion• Background

• Started Jan 1. 2014• Electronic and Expedited Application Software available

at “benefits.ohio.gov” • Linked to Federal Data Hub• No CPJFS Visit Required • Utilize MAGI Standards• No Documentation Required

• Presumptive Eligibility Now Statewide• 85/85 Quality Standards yet to be enforced

• OHA “Intake” Tool Kit Available at http://ohiohospitals.org/Policy-Advocacy/Finance-Policy/Medicaid/Medicaid-Enrollment-Toolkit.aspx


11

http://ohiohospitals.org/Policy-Advocacy/Finance-Policy/Medicaid/Medicaid-Enrollment-Toolkit.aspx

http://ohiohospitals.org/Policy-Advocacy/Finance-Policy/Medicaid/Medicaid-Enrollment-Toolkit.aspx

Medicaid Expansion Numbers1,117,407 Applied for Medicaid Through benefits.ohio.gov

• 822,807 (74%) Have Been Resolved• 592,390 Individuals Enrolled in Medicaid• 230,417 Determined to be Ineligible

Expansion Population Totals– 338,707 have enrolled– ODM Estimated 175,000 Would Sign up by June 2014– Actuaries Estimate 563,000 Ohioans are Newly

Eligible, and 366,000 Would Sign up for Coverage by June 2015 (93% of estimate)

• This Includes 26,000 who Received Medicaid Coverage Through Metro Health Waiver


Sept. 25, 2014



Health Insurance Marketplace154,668 Ohioans Have Selected Plans on the Exchange as

of May 30. 85% of Them Received Financial Assistance.


Sept. 25, 2014

Age Ohio Percent

age

National Percent

age

>18 9% 7%

18-25 8% 11%

26-34 15% 17%

35-44 15% 17%

45-54 21% 22%

55-64 31% 25%

>65 0% 0%

Level Ohio Percentage

National Percentage

Bronze 25% 17%

Silver 60% 69%

1. Gold 12% 9%

Platinum 2% 4%

Catastrophic 2% 2%

Medicaid APR-DRG ConversionBackground•Year-Long Process to Determine Relative Weights, Base Rates & Payment Policies •OHA Goal: Fairness and Equity Across Hospitals•ODM Added Approx. $84 M / Year in FFY 2014 Inpatient Payments for In-state Hospitals•Helped Rural Hospitals by Repurposing Funds From Out-of-State Hospitals ($24 M / Year)•Has Three-Year Transition with Risk Corridors For Urban Hospitals to Ensure Stability and Minimize Winners & Losers•Preserves Most Medicaid IPPS Reimbursement Policies and Payment Logic For Now.


16

Medicaid APR-DRG ConversionIPPS Policy Shifts for SFY 2014 and Beyond•CMS Grouper 15 to 3M APR-DRG; New Grouper Starts Each Year with Discharges 10/1 and After •Newly Calibrated Relative Weights•New Base Rates & Three-Year Transition Includes Stop Loss/Stop Gain Applied to Urban Peer Groups•Outliers Policy Changed to Mirror Medicare•Medical Education Payments Held Harmless in SFY 2014

But It’s Not Over ‘till It’s Over•Stop Loss/Gain Threshold in Out Years of Three-Year Transition Causing Lots of Unforeseen Changes in SFY 2015•ODM Proposing Revised SFY 2015 Base Rates for Transition Stop Loss/Gain Hospitals - Effective 10/1/14•Additional Discussion Still to Come About Peer Groupings, Next DRG Re-base & Re-Calibration, Medical Education Payments, HAC, Other?


17

2015 BWC• OHA Recommends BWC Stay With Medicare

IPPS/OPPS Methodology• Adopt Published Rates in Medicare’s FFY 2015 Proposed

Rule; Includes a General Update of 2.1% • Eliminate the 1.008% Adjustment Factor to Offset the

Medicare Coding and Documentation Adjustment• Refine the BWC Payment Adjustment Factors (PAF) to

Include Separate Factors Based on Each Hospital’s Medicare Urban or Rural Classification

• BWC Fee Schedule Analysis Revealed Disparity of Payment-to-Cost Ratio at Major Teaching, Urban, Government & 400-499 Bed Hospital

• Bottom Line: as Medicare Moves so Does BWC (Down!)


Sept. 25, 2014

2015 BWC• BWC Proposing to Refine the Current Payment

Adjustment Factors (PAF) at the Urban and Rural Levels

• OHA Finance Committee to Review and Respond


Sept. 25, 2014

Etc… Etc…• 2015 HCAP Moving Add’l $$ to OBRA Pot• Medicaid Episodic Payment Plan Gaining Speed

• OHA Finance Committee Considering Responses• SAFE Program Audits Possible Next Year• FFY 2011 Medicaid DSH Program (HCAP) Audit

Results are Out. • Not Too Many Surprises (Except for OB Requirement)• FFY 2012 Audit Will Start Later This Month

• Expect Additional Scrutiny on Hospital Price and Quality Transparency• Still Waiting on CMS/HHS Final Rule for


Sept. 25, 2014

State Innovation Models – Episodic Payments


Sept. 25, 2014

Questions / Comments?


22

Documents

The Autumn Institute A Dual Chapter Event OHA Update Charles Cataline Vice President, Health Economics and Policy Ohio Hospital Association