Medicare Compliance & Reimbursement

Reporting discrepancies could bias wages upward and distort adjustments.

Proposed changes to the occupational mix survey show major idiosyncrasies, according to the Medicare Payment Advisory Commission.

The Centers for Medicare & Medicaid Services recently proposed changes to the occupational mix survey, which it will use to adjust hospital wage index computations. The adjustment reflects geographic differences in wage levels by taking into account variations in worker mixes in various labor markets.

In MedPAC's review, it pointed out a mismatch between the hours and wages hospitals submit on their Medicare cost reports and those they'll report on the occupational mix survey. Current CMS policy allows hospitals to omit non-patient-care contract labor from cost reports, which could bias its average wage upward, especially for hospitals contracting many low-wage service workers. The occupational mix survey doesn't account for this variation; instead, it requires hospitals to include contract labor in its reporting. As a result, the occupational mix may not reflect reported hours and wages accurately, MedPAC says.

MedPAC's recommendation is twofold: 1) Adjust the survey to exclude non-patient-care contract worker hours; and 2) Add a new category for reporting employee hours for frequently contracted labor. MedPAC also suggested adding categories to increase accuracy and reporting detail by reducing the number of workers that fall into the nebulous "other" bucket.

Florida Passes Managed-Medicaid Bill

Florida legislators last week approved a plan Gov. Jeb Bush proposed to offer Medicaid beneficiaries more choices in health care coverage. If other states follow this model--and sources suggest that they're watching closely--private plans could play a more prominent role in delivering coverage to this population.

The plan, which will launch in July 2006 on a pilot basis in Fort Lauderdale and Jacksonville, entails that benes choose from a variety of managed-care plans, which must meet basic coverage mandates. The state will choose plans for those benes who don't choose a plan themselves. Medicaid recipients can opt out of the program altogether and enroll in employer-sponsored health plans instead, using their vouchers to cover expenses.

Opponents of the bill--which both the Senate and House passed handily--worry about the possibility that ailing or disabled members will be subject to higher costs and denial of care. "The Florida waiver represents a very dangerous precedent that is likely to cause significant harm for people who need health care the most," argues Ron Pollack, Executive Director of Families USA. And others question whether the measure will ultimately lower the state's Medicaid costs. "We're concerned that the plan shifts too many risks to seniors without benefiting the state," says Bentley Lipscomb, AARP Florida state director.

But bill advocates contend that such a measure becomes essential in the face of rapidly rising health care costs--Bush cites estimates that the Medicaid system, if unchanged, would occupy almost 60 percent of the state's budget by 2015. Supporters also point to the potential for benes to have greater access to formerly non-Medicaid providers. And the state will be counting on private insurance plans to realize these goals.

Time Is Running Out For Outpatient Therapy Cap Moratorium

As the new year rolls in, outpatient therapy caps are likely to go back into effect--but that's not stopping Congress and other organizations from putting up a good fight.

Sen. Charles Grassley (R-IA), Senate Finance Committee Chairman, issued a letter to Health and Human Services Secretary Michael Leavitt imploring him to extend the moratorium on the caps until Congress passes the budget reconciliation legislation.

The budget bill contains a provision that may protect special needs beneficiaries who might face financial hardship if Congress doesn't continue the moratorium. "I am concerned that if you proceed with implementing the current law and Congress does not conclude passage of the provision prior to the imposition of the caps, a significant number of beneficiaries may be harmed," notes Grassley.

Twenty-five organizations have written to Congress to ask that it extend the moratorium, but so far conferees haven't budged. The caps for 2006 will be $1,740 without a moratorium, but a beneficiary can request an exception. Nevertheless, "an individual with intense rehabilitation needs could easily exceed the cap by the middle of January," warns Grassley.

Senate Seeks Additional Funding To Improve Drug Plan Education And Distribution

Twenty-one senators agree that $1.5 billion isn't enough to get Medicare Part D education and distribution off the ground--but requests for nearly $500 million in additional funding may not be possible.

The Centers for Medicare & Medicaid Services spent ten times as much of its funding on drug plan advertising than it did on State Health Insurance Assistance Programs, according to Senate members in a recent letter to President Bush. "With so many plans to choose from, seniors need personalized, impartial help, as provided by SHIPs, to sort through their options," Senate members note. "But SHIPs around the country are understaffed and overwhelmed due to lack of funding ... as a result, many people seeking SHIP assistance now will be turned away."

Senators request CMS to provide SHIPs $1 per beneficiary--$42 million total--in 2006, compared to the $0.70 CMS has invested in them to date.

Senators are equally concerned that the Social Security Administration could suffer similar funding shortages, citing an increasing call volume and a 150 percent increase in its busy signal rate between October and November. An additional $125 million in funding would allow SSA to employ more workers and increase overtime pay, senators propose. Without this necessary funding, SSA would have to reduce activity funding, cut activities that save more money than they cost and eliminate funds for Part D implementation.

The senators also seek funding to offset $90 million in potential cuts CMS and SSA will undergo through the Labor-HHS appropriations conference report that representatives passed in the House.

Coalition Encourages P4P Provisions For Medicare

Pay-for-performance quality measures may bring Medicare into the 21st Century, and many top agencies are all aboard.

Fourteen reputable agencies, including AARP, National Business Coalition on Health and National Committee for Quality Assurance, encourage Congress in a recent letter to support P4P legislation linking pay to performance on quality measures.

The Institute of Medicine and the Medicare Payment Advisory Commission have endorsed P4P methodology. "We believe such improvements will ultimately reduce wasteful expenditures of health care dollars," the agencies said.

"There is significant variation in the performance of Medicare plans on a series of quality measures," according to NCQA. "A comparison of the top 10 percent of Medicare plans to those in the bottom 10 percent shows disparities of as much as 30 percentage points."