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Medicare Compliance & Reimbursement

HOSPITALS:

Medicare Payments To Hospitals Cut By $20 Billion

Published on Mon Aug 27, 2007

Inpatient prospective payment systems changes lauded by Leapfrog

Starting Oct. 1, 2007 Medicare and Medicaid patients who acquire a medical condition while checked in at a hospital may not have to foot the bill, and hospitals across America are wondering exactly who will.

The Centers for Medicare & Medicaid Services recently released a number of rule changes affecting Medicare hospital inpatient prospective payment systems. While the American Hospital Association has criticized the alterations, hospital quality care advocates such as the Leapfrog Group hail the move as a protection of patient rights.

"The Leapfrog Group is extremely pleased with the CMS rule regarding nonpayment of certain hospital-acquired conditions starting this October," communications director Kat Song said in a statement. "Although the rule represents a tiny fraction of the total payments made to hospitals, it sends a loud and clear signal to hospitals that they need to maintain the highest standards of quality and safety."

Leapfrog advocates the expansion of non-paid conditions as a measure to protect patients, but AHA executive vice president Rick Pollack suggested that the rule changes may actually hurt patients.

"CMS' own analysis shows that in just one year alone, approximately 31,000 patients would no longer qualify for inpatient rehabilitation without this provision," Pollack argued. "Where does the CMS think these patients will go to get the specialized care they need?"

Congressional leaders also sided with the AHA, attempting to prevent the CMS from finalizing the changes to its payment plan by threatening to withhold funding.

"The overwhelming majority of Congress has sent a strong message rejecting the cut and urging CMS to protect access to care for the people and communities hospitals serve; in fact, 269 representatives and 63 senators signed on to a letter in opposition to this cut," explained AHA president Rich Umbdenstock. "Nearly the entire House--by a vote of 412 to 12--voted to restrict CMS from spending funds on prospective implementation of this payment cut."

Although the final impact of an estimated $20 billion in Medicare cuts can only be guessed at, at least one policy-maker in Washington has proposed that some of the hospitals Umbdenstock represents take advantage of the federal funding and tax breaks already available to them.

"While many non-profit hospitals do good work, too many non-profit hospitals get big tax breaks but provide small benefits to those in need," opined Sen. Chuck Grassley (R-IA).

Grassley actually opposed the CMS rule changes because of his concern that the funding cuts would adversely affect patients, but his discovery that some non-profit hospitals do not adequately serve "our nation's vulnerable population" suggests that the loss of $20 billion in federal revenue is a kind of poetic justice.

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