CMS Proposes Increased Reimbursement for Hospitals but a Decrease for Physicians in 2025

The Centers for Medicare & Medicaid Services (CMS) released its proposed changes to the fee schedule for 2025 on July 10. Hospital compensation will increase by 2.6% from 2024 for hospital outpatient services and 2.8% for inpatient services (1). In contrast, physician payment will DECREASE 2.8% (2). This continues the trend in CMS reimbursement. Over the past 20 years, physician pay has plummeted by 26% when adjusted for inflation while hospital reimbursement has surged by 70% (3).

The proposal drew quick criticism from the American Medical Association (AMA) and the Medical Group Management Association (MGMA) (3). "With CMS estimating a fifth consecutive year of Medicare payment reductions — this time by 2.8 percent —  it's evident that Congress must solve this problem," AMA President Bruce Scott, MD, said. "In addition to the cut, CMS predicts that the Medicare Economic Index — the measure of practice cost inflation — will increase by 3.6 percent. Facing this widening gap between what Medicare pays physicians and the cost of delivering quality care to patients, physicians are urging Congress to pass a reform package that would permanently strengthen Medicare." MGMA's Senior Vice President of Government Affairs, Anders Gilberg, said the 2.8% reduction to the conversion factor would be alarming in the best circumstances, but to propose doing so at a time when 92% of medical groups report increased operating costs and are otherwise struggling to remain financially viable is critically short-sighted. Gilberg added "Medicare physician reimbursement is on a dire trajectory and these ongoing cuts continue to undermine the ability of medical practices to keep their doors open and function effectively — the need for comprehensive reform is paramount".

Over the time period of decreasing physician reimbursement, there has been a dramatic change in physician employment. Now 77% of physicians are employed, a dramatic increase from 26% only 10 years ago (5). The reason most often cited has been declining reimbursement. Although cost containment is often cited as a reason for the decline in physician payments. It should be apparent that CMS’ “cost containments” have done little to stem the rising costs of healthcare (6).  Some have associated increasing physician employment for decreasing access and quality of care (4,7).

A recent comment from George Parides asserts “what is happening now is what the government, Centers for Medicare and Medicaid Services (CMS) and all hospital systems want to happen. They want full, and I mean FULL control of all physicians …” (8). Nothing has really changed with the proposed changes in fee schedules. The trend of healthcare away from a charitable, not-for-profit 501c to a not-for-profit in name only business focused on revenue and profits continues (7). 

Richard A. Robbins MD

Editor, SWJPCC

References

1. CMS. CY 2025 Medicare Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System Proposed Rule (CMS 1809-P). July 10,2024. Available at: https://www.cms.gov/newsroom/fact-sheets/cy-2025-medicare-hospital-outpatient-prospective-payment-system-and-ambulatory-surgical-center (accessed 7/11/2024).
2. CMS. Calendar Year (CY) 2025 Medicare Physician Fee Schedule Proposed Rule. July 10, 2024. https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2025-medicare-physician-fee-schedule-proposed-rule (accessed 7/11/2024).
3. Cass A. CMS pitches 2.8% physician payment cut for 2025. Medscape. July 10, 2024. Available at: https://www.beckershospitalreview.com/finance/cms-pitches-2-8-physician-payment-cut-for-2025.html?origin=BHRE&utm_source=BHRE&utm_medium=email&utm_content=newsletter&oly_enc_id=6133H6750001J5K (accessed 7/11/24).
4. G Grossi. Dr David Eagle: CMS Reimbursement Cuts Encourage Trend of Independent Physician Exodus. American Journal of Managed Care. Feb 12, 2024. Available at: https://www.ajmc.com/view/dr-david-eagle-cms-reimbursement-cuts-encourage-trend-of-independent-physician-exodus (accessed 7/11/24).
5. Physicians Advocacy Institute. Updated Report: Hospital and Corporate Acquisition of Physician Practices and Physician Employment 2019-2023. April 2024. Available at: https://www.physiciansadvocacyinstitute.org/Portals/0/assets/docs/PAI-Research/PAI-Avalere%20Physician%20Employment%20Trends%20Study%202019-2023%20Final.pdf?ver=uGHF46u1GSeZgYXMKFyYvw%3d%3d (accessed 7/11/24).
6. McGough M, Winger A, Rakshit S, Amin K. How has U.S. spending on healthcare changed over time? Peterson-KFF Health System Tracker. December 15, 2023. Available at: https://www.healthsystemtracker.org/chart-collection/u-s-spending-healthcare-changed-time/#Total%20national%20health%20expenditures,%20US%20$%20Billions,%201970-2022 (accessed 7/11/24).
7. Robbins RA. A Call for Change in Healthcare Governance. Southwest J Pulm Crit Care Sleep. 2024;28(6):91-93. [CrossRef]
8. Parides GC. Only a Snowball’s Chance in Hell: Comment on A Call for Change in Healthcare Governance. Southwest J Pulm Crit Care Sleep. 2024;28(6):94. [CrossRef]

Cite as: Robbins RA. CMS Proposes Increased Reimbursement for Hospitals but a Decrease for Physicians in 2025. Southwest J Pulm Crit Care Sleep. 2024;29(1):8-9. doi: https://doi.org/10.13175/swjpccs033-24 PDF

CMS Decreases Clinic Visit Payments to Hospital-Employed Physicians and Expands Decreases in Drug Payments 340B Cuts

The Centers for Medicare and Medicaid Services (CMS) has reimbursed hospital-employed physicians more than self-employed physicians. However, CMS is moving forward with plans to expand its site-neutral payment policy to clinic visits, a move that could save the agency hundreds of millions of dollars (1).

Clinic visits are the most common service billed to CMS. CMS estimates that it is now paying about $75 to $85 more on average for the same service in hospital outpatient settings compared to physician offices. Beneficiaries are responsible for 20% of that increased cost. The payment change is projected to save Medicare $610 million and patients about $150 million. Higher CMS payments to hospital-employed physicians have also been have associated with higher commercial prices and spending for outpatient care which could save CMS even more money (2).

However, CMS abandoned its 2016 plan to expand a site-neutral rule. That regulation would have paid hospital off-campus facilities less than hospital-based outpatient departments if they started billing Medicare after Nov. 2, 2015. Following pushback from the American Hospital Association and others, the agency said it decided to not finalize that provision.

CMS’ 340B Drug Discount Program requires drug manufacturers to provide outpatient drugs to eligible hospital-based departments at significantly reduced prices. CMS will expand last year's cuts to 340B discounts given to outpatient facilities. Last year, the agency cut 340B drug payments by $1.6 billion, or 22.5% less than the average sales price. CMS is expanding the 340B cut to off-campus provider-based departments to prevent hospitals from moving their drug administration services for 340B-acquired drugs to an off-campus facility to receive a higher payment.

Richard A. Robbins, MD

Editor, SWJPCC

References

1. Dickson V. CMS slashes clinic visit payments, expands 340B cuts. Modern Healthcare. November 2, 2018. Available at: https://www.modernhealthcare.com/article/20181102/NEWS/181109978 (accessed 11/2/18).
2. Neprash HT, Chernew ME, Hicks AL, Gibson T, McWilliams JM. Association of financial integration between physicians and hospitals with commercial health care prices. JAMA Intern Med. 2015 Dec;175(12):1932-9. [CrossRef] [PubMed]

Cite as: Robbins RA. CMS decreases clinic visit payments to hospital-employed physicians and expands decreases in drug payments 340b cuts. Southwest J Pulm Crit Care. 2018;17(5):136. doi: https://doi.org/10.13175/swjpcc115-18 PDF 

CMS’ Star Ratings Miscalculated

Modern Healthcare is reporting that the Centers for Medicare and Medicaid Services (CMS) has miscalculated hospitals star ratings since they were first released in 2016 (1). Officials at Rush University Medical Center in Chicago exclusively disclosed their analysis and correspondence to Modern Healthcare. The investigators found that instead of evenly weighting the eight measures in the safety of care group, the CMS' star ratings formula relied heavily on one measure— The Patient Safety and Adverse Events Composite, known as PSI 90 —for the first four releases of the ratings and then complication rates from hip and knee replacements for the latest release. The single measure accounted for about 98% of a hospital's performance in the safety group, according to Rush's analysis. The safety group can also greatly influence a hospital's overall star rating, the analysis concluded. Rush's findings likely prompted the CMS to announce this week that it would postpone the July release of its star ratings (1).

The statistical model the CMS uses likely caused the miscalculation. The model, called latent variable modeling, uses scores for seven groups of measures to calculate the star ratings:

1. Mortality
2. Safety of Care
3. Readmission
4. Patient Experience
5. Effectiveness of Care
6. Timeliness of Care
7. Efficient Use of Medical Imaging

The three outcome groups—mortality, safety and readmissions—are each weighted the most at 22% each. Measures within each group are supposed to be evenly weighted to calculate the hospital's performance in that area. Rush's analysis found that the weight given to the PSI-90 measure was much greater than the seven other measures in the safety group. Specifically, PSI-90 was weighted 1,010 times stronger than the catheter-associated urinary tract infections measure, 81 times stronger than the C. difficile infection rates measure, 51 times stronger than the central line-associated bloodstream infection rates measure and 20 times stronger than either the surgical site infection rate measure.

Latent variable modeling changes the weighting and is inappropriate for measuring clinical outcomes, said David Levine, senior vice president of advanced analytics and informatics at Vizient (1). "Given the disproportionate weighting of the safety scores over time, they did not represent a composite measure," said Dr. Omar Lateef, an author of the analysis and Rush's senior vice president and chief medical officer (1). Lateef said he and his colleagues at Rush were alarmed by a rating drop from 5 to 3 stars because they have improved performance on five of the eight safety measures since the December release. " Lateef added that although CMS was initially dismissive of Rush’s concerns that CMS has come around since presented with Rush’s analysis.

CMS announced earlier this week that it was delaying release of the star ratings "to address stakeholders concerns." No date has been set for when the new ratings will be released.

Richard A. Robbins, MD

Editor, SWJPCC

Reference

1. Maria Castellucci M. CMS star rating system has been wrong for two years, health system finds. Modern Healthcare. June 15, 2018. Available at: http://www.modernhealthcare.com/article/20180615/TRANSFORMATION01/180619933?utm_source=modernhealthcare&utm_medium=email&utm_content=20180615-TRANSFORMATION01-180619933&utm_campaign=am (accessed 6/15/18).

Cite as: Robbins RA. CMS' star ratings miscalculated. Southwest J Pulm Crit Care. 2018;16(6):338-9. doi: https://doi.org/10.13175/swjpcc078-18 PDF 

Healthcare Payments Under the Budget Deal: Mostly Good News for Physicians

In the early morning hours last Friday (2/9/18) Congress passed and President Trump signed a massive budget agreement (1). The spending package will cost about $320 billion over 10 years, according to the Congressional Budget Office. Payments for healthcare substantially increase under the deal. Most praised the agreement. "Congress made the right choice this morning for patients and communities by voting to halt damaging cuts to hospitals that care for low-income working families and others who face financial challenges," said Dr. Bruce Siegel, CEO of America's Essential Hospitals, which represents the nation's safety-net facilities. Marc Goldwein of the Center for a Responsible Federal Budget called the healthcare provisions the one "beacon of light" in what otherwise is an exorbitantly costly budget bill. Goldwein praised its mix of structural reforms with "reasonable policy” and liked that the bill pays for the increased healthcare spending.

The bill extends Medicare physician fee cuts that provide about $38 billion in offsets to the increased spending (2). The bill preserves the planned physician fee cuts at 0.5% in 2018 but would reduce the cut to 0.25% in 2019. Not all were pleased by the continuation of the cuts. Calling it "contrary to Congress' intent” ACP President Jack Ende called on Congress to enact permanent relief from the physician fee cuts.

Other major healthcare provisions include (1,2):

• Continued funding for community health centers for two years.
• A two-year delay to the already-in-effect payment cuts to Medicaid disproportionate-share hospitals (DSH) which predominately represent safety net hospitals.
• A two-year delay in the low-volume adjustment program which predominately affects rural hospitals.
• An additional 4-year extension of the Children's Health Insurance Program (CHIP), which had received a 6-year extension in the continuing resolution that was approved in January.
• Forcing pharmaceutical companies to pay 75 percent of the cost of drugs for seniors in Medicare’s coverage gap a year earlier than planned.
• Repeal of the "therapy cap”, a move long pushed by therapy provider groups and the American Association of Retired Persons. This would permanently repeal Medicare's coverage limit on physical therapy, speech-language pathology, and outpatient treatment.
• $6 billion for the opioid epidemic, which will go toward state grants, public prevention programs, and law enforcement.
• Funding for the Maternal, Infant, and Early Childhood Home Visiting Program, which helps at-risk pregnant women and families navigate the social safety net.
• A reduction in Medicare payments to Home health agencies. They're expected to lose $3.5 billion in Medicare payments starting in 2020 due to a change in the way Medicare calculates annual payment updates.
• Funding the Chronic Care Act, which opens up new flexibilities for Medicare Advantage and care for chronically ill Medicare beneficiaries.
• A 2-year delay in implementing The Affordable Care Act's high-cost plan tax, popularly known as the “Cadillac tax”. This was a 40 percent excise tax on employer plans exceeding $10,200 in premiums per year for individuals and $27,500 for families. The tax is now scheduled to take effect in 2020.
• Repeal of Independent Payment Advisory Board (IPAB). Provider groups from the American Medical Association to the American Hospital Association applauded the move, even though Congress has never triggered the panel, which was charged to find and implement Medicare savings.

However, not all were pleased by the repeal of cost containments. IPAB repeal doesn't cost much in the grand scheme of things, said Mark Goldwein from the Center for a Responsible Federal Budget but “the long-term policy implications are huge, and a big mistake” (2). Kaiser Family Foundation Senior Vice President Larry Levitt chided that the bill demonstrates “…healthcare cost containment generally seems better in theory than in practice” (2).

Richard A. Robbins, MD

Editor, SWJPCC

References

1. Luthi S. Beacon of light: Healthcare additions in budget law pleasantly surprise providers. Modern Healthcare. February 9, 2018. Available at: http://www.modernhealthcare.com/article/20180209/NEWS/180209895 (accessed 2/12/18).
2. Ault A. Trump signs budget deal, cuts Medicare fee in 2019. Medscape. February 9, 2018. Available at: https://www.medscape.com/viewarticle/892491 (accessed 2/12/18).

Cite as: Robbins RA. Healthcare payments under the budget deal: mostly good news for physicians. Southwest J Pulm Crit Care. 2018;16(2):88-9. doi: https://doi.org/10.13175/swjpcc032-18 PDF 

CMS Announces New Payment Model

On Tuesday, 1/9/18, the Centers for Medicare and Medicaid (CMS) announced a new voluntary bundled-payment model that will be considered an advanced alternative payment model under Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) (1). The new model is the first advanced Alternative Payment Model (APM) to be introduced by the Trump administration. The Trump administration has been a vocal advocate of reducing administrative burden for clinicians and has touted voluntary models as a solution (2). The new, voluntary model comes less than two months after the CMS officially decided to eliminate two mandatory bundled-payment models created during the Obama administration.

Under the model, clinician payment will be based on quality measures during a 90-day episode of care. Participants must select at least one of the 32 clinical episodes to apply to the model. The inpatient clinical episodes are listed in Table 1 (3).

Table 1. Clinical inpatient episodes under proposed payment model.

• Acute myocardial infarction
• Back & neck except spinal fusion
• Cardiac arrhythmia
• Cardiac defibrillator
• Cardiac valve
• Cellulitis
• Cervical spinal fusion
• COPD, bronchitis, asthma
• Combined anterior posterior spinal fusion
• Congestive heart failure
• Coronary artery bypass graft
• Double joint replacement of the lower extremity
• Fractures of the femur and hip or pelvis
• Gastrointestinal hemorrhage
• Gastrointestinal obstruction
• Hip & femur procedures except major joint
• Lower extremity/humerus procedure except hip, foot, femur
• Major bowel procedure
• Major joint replacement of the lower extremity
• Major joint replacement of the upper extremity
• Pacemaker
• Percutaneous coronary intervention
• Renal failure
• Sepsis
• Simple pneumonia and respiratory infections
• Spinal fusion (non-cervical)
• Stroke
• Urinary tract infection

Providers will be eligible for bonuses based on their performance. For more information about the model and its requirements, or to download a Request for Applications document (RFA), the application template, and the necessary attachments, please visit: https://innovation.cms.gov/initiatives/bpci-advanced. Applications must be submitted via the Application Portal, which will close on 11:59 pm EST on March 12, 2018. Applications submitted via email will not be accepted.

The CMS Innovation Center will hold a Q&A Open Forum on Tuesday, January 30, 2018 from 12 pm – 1 pm EDT. This event is open to those who are interested in learning more about the model and how to apply. Please register in advance here - https://preaward.adobeconnect.com/e3cdwg6hgx9f/event/registration.html.

Richard A. Robbins, MD

Editor, SWJPCC

References

1. Centers for Medicare and Medicaid Services. CMS announces new payment model to improve quality, coordination, and cost-effectiveness for both inpatient and outpatient care. January 9, 2018. Available at: https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2018-Press-releases-items/2018-01-09.html (accessed 1/10/18).
2. Castellucci M. CMS launches new voluntary bundled-payment model. Modern Healthcare. January 9, 2018. http://www.modernhealthcare.com/article/20180109/NEWS/180109905 (accessed 1/10/18).
3. Centers for Medicare and Medicaid Services. BPCI Advanced. January 9, 2018. Available at: https://innovation.cms.gov/initiatives/bpci-advanced (accessed 1/10/18).

Cite as: Robbins RA. CMS announces new payment model. Southwest J Pulm Crit Care. 2018;16(1):29-30. doi: https://doi.org/10.13175/swjpcc006-18 PDF 

Medicare Bundled Payment Initiative Did Not Reduce COPD Readmissions

Implementation of the Medicare bundled payments for care improvement initiative has failed to cut readmission rates following hospitalization for acute exacerbation of chronic obstructive pulmonary disease (COPD), according to a study published in the Annals of the American Thoracic Society (1).

Bhatt and colleagues (1) from the University of Alabama at Birmingham enrolled 78 consecutive Medicare patients in 2014 compared to 109 patients in the historic group from 2012. They found that patients from 2014 were more likely to have compliance with the bundled care payment requirements. However, there was no difference in all-cause readmission rates at 30 days (15.4% vs.17.4%; p=.711), and 90 days (26.9% vs 33.9%; p=.306).

The bundled care requirements include regular follow-up phone calls, pneumococcal and influenza vaccines, home health care, durable medical equipment, pulmonary rehabilitation, and to attend pulmonary clinic which were significantly increased after implementation of the bundled care requirements. However, these COPD interventions were implemented despite having not been shown to decrease COPD readmissions (2). Furthermore, Shah et al. (3) have reported that only 27.6% of COPD hospital readmissions are for COPD making these COPD interventions even less likely to reduce readmissions.

References

1. Bhatt SP, Wells JM, Iyer AS, et al. Results of a Medicare Bundled Payments for Care Improvement Initiative for COPD Readmissions. Ann Am Thorac Soc. 2016 Dec 22 [Epub ahead of print]. [CrossRef] [PubMed]
2. Robbins RA, Wesselius LJ. Reducing readmissions after a COPD exacerbation: a brief review. Southwest J Pulm Crit Care. 2015;11(1):19-24. [CrossRef]
3. Shah T, Churpek MM, Coca Perraillon M, Konetzka RT. Understanding why patients with COPD get readmitted: a large national study to delineate the medicare population for the readmissions penalty expansion. Chest. 2015;147(5):1219-26. [CrossRef] [PubMed]

Cite as: Robbins RA. Medicare bundled payment initiative did not reduce COPD readmissions. Southwest J Pulm Crit Care. 2016;14(1):26. doi: https://doi.org/10.13175/swjpcc104-17 PDF

CMS Releases Data on Drug Spending

Yesterday (11/14/16) the Centers for Medicare and Medicaid Services (CMS) released data on spending for drugs under Medicare and Medicaid (1,2). Medicare paid $137.4 billion on drugs covered by its prescription drug benefit in 2015. About $8.7 billion of that spending occurred on drugs that had "large" price hikes, defined as a more than 25 percent increase between 2014 and 2015. In 2015, Medicaid paid $57.3 billion about $5.1 billion of which was spent on drugs that had large price increases.

The Medicare spending database highlights 11 drugs that doubled in price. The Medicaid database identified 20 drugs that more than doubled in price with 9 of these being old, generic drugs. Medicare drugs were led by Glumetza, a Type 2 diabetes drug which saw its price soar 380 percent and hydroxychloroquine sulfate, a generic malaria drug, which went up 370 percent. Medicaid drugs were led by Ativan, an anti-anxiety medication approved in 1977, which increased by 1,264 percent in price between 2014 and 2015. Daraprim, a decades-old antiparasitic drug that helped spark political attention to the issue of high drug prices after former pharmaceutical executive Martin Shkreli hiked the price, leapt up in average cost by 874 percent.

However, drugs commonly used in respiratory diseases also increased in price. These were led by mitomycin, an anticancer drug sometimes used in lung cancer, an antidepressant also used as a smoking cessation aid (Table 1).

Table 1. Medicare Spending on Respiratory Drugs. (Open table in separate window)

The data on price on small prices rises can be deceiving when calculating total costs. For example, Advair Diskus, a bronchodilator, ranked in the top-five of Medicare expenditures, with $2.3 billion in spending in 2015. However, he utilization of the drug has actually declined a little over the last five years. Meanwhile, the total spending has not gone down, but increased. Fueled by relatively modest price increases, from $3.81 per unit in 2011 to $5.28 in 2015, the spending on the drug increased by more than half a billion dollars over that period.

Of particular concern is a rise in price of some generics, a class of drugs that are intended to decrease drug prices and spending. Drugs that were responsible for large amounts of overall spending tended to see smaller increases that gradually increased the government outlay. In one outlier, the price of the hepatitis C treatment, Harvoni, decreased slightly in 2015, even as it led overall spending.

The prices do not include the impact of rebates, which are prohibited by law from being released (3). Those discounts can be significant, and not knowing what they are means the numbers almost certainly overstate how much the government actually paid for these drugs. CMS disclosed that, on average, rebates for brand name drugs were 17.5 percent for medicines covered by Medicare's "part D" prescription drug benefit in 2014.

Richard A. Robbins, MD

Editor, SWJPCC

References

1. CMS. 2015 Medicare drug spending dashboard. Available at: https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Information-on-Prescription-Drugs/2015Medicare.html (accessed 11/15/16.
2. CMS. 2015 Medicaid drug spending dashboard. Available at: https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Information-on-Prescription-Drugs/2015Medicaid.html (accessed 11/15/16).
3. Johnson CY. Drugs for hepatitis C and diabetes drove Medicare spending in 2015. Washington Post. November 14, 2016. Available at: https://www.washingtonpost.com/news/wonk/wp/2016/11/14/the-drugs-driving-up-medicare-spending/ (accessed 11/15/16).

Cite as: Robbins RA. CMS releases data on drug spending. Southwest J Pulm Crit Care. 2016;13(5):242-3. doi: https://doi.org/10.13175/swjpcc118-16 PDF 

HealthCare.gov Shares Personal Data with Third Parties

According to the Associated Press, the Centers for Medicare and Medicaid's (CMS) website, HealthCare.gov, has been sending consumers’ personal data to private companies that specialize in advertising and analyzing Internet data for performance and marketing (1). What information is being disclosed was not immediately clear, but it could include age, income, ZIP code, and smoking status. It could also include a computer’s Internet address, which can identify a person’s name or address when combined with other information collected by sophisticated online marketing or advertising firms. “We deploy tools on the window shopping application that collect basic information to optimize and assess system performance,” said CMS’s Aaron Albright in a statement. “We believe that the use of these tools are common and represent best practices for a typical e-commerce site.” There is no evidence that personal information has been misused. But connections to dozens of third-party tech firms were documented by technology experts who analyzed HealthCare.gov and then confirmed by AP. A handful of the companies were also collecting highly specific information.

Created under the Affordable Care Act (ACA, Obamacare), HealthCare.gov is the online gateway to government-subsidized private insurance for people who lack coverage on the job. It serves consumers in 37 states, while the remaining states operate their own insurance markets.

Marilyn Tavenner, administrator of CMS, resigned last Friday, effective  February 1. Much maligned for the shaky roll-out of HealthCare.gov, it is unclear if Tavenner's resignation and the revelation of the breech in patient confidentiality are related.

References

1. Associated press. Government health care website quietly sharing personal data. Available at: http://www.cnbc.com/id/102355634 (accessed 1/22/15).
2. Alonso-Zaldivar R. Medicare chief steps down, ran health care rollout. Available at: http://abcnews.go.com/Health/wireStory/medicare-chief-steps-part-health-care-roll-28270777 (accessed 1/22/15).

Reference as: Robbins RA. Healthcare.gov shares personal data with third parties. Southwest J Pulm Crit Care. 2015;10(1):51. doi: http://dx.doi.org/10.13175/swjpcc009-15 PDF

2014's Top Southwest Medical Stories

The end of the year has traditionally been a time to reflect on the top stories of the year. Here's our list of the top local medical stories.

1. VA scandal

Phoenix was the epicenter of the VA scandal but Albuquerque and the Greeley, Colorado clinic also figured prominently in the falsification of patient wait lists. Investigations revealed that at least 70% of the VA hospitals falsified records leading to the resignation of VA secretary, Eric Shinseki, and his under secretary for health, Dr. Robert Petzel. Eventually the director of the Phoenix VA, Sharon Helman, was fired-not for the falsification of medical records but for taking inappropriate gifts. However, most of the directors of the VA hospitals that falsified data remain untouched, still receiving their bonuses. Similarly, the politicians, the inspector general and those in the VA central office whose job was to provide oversight remain unscathed. On the bright side, the scandal did result in a modest influx of monies which hopefully will be spent on patient care rather than administrative bonuses.

2. Ebola outbreak

This seems a bit odd for a local news story but the Ebola epidemic in Africa did impact locally. The outbreak was largely ignored by the American public until a patient and several healthcare workers became infected in the US. Politicians and healthcare administrators seized the opportunity to hype the hysteria and insist on training of healthcare workers. One Arizona Thoracic Society meeting was cancelled because a nursing service needed the room to do "Ebola training". As Peter Sagal said on "Wait, Wait, Don't Tell Me" there have been more Americans married to Larry King that infected with Ebola illustrating the hysteria and resultant overreaction. This year's true medical heroes are the thousands of physicians and nurses who worked on the frontlines of the Ebola crisis in Africa at tremendous personal risk and despite chaotic conditions, underequipped facilities, and overwhelmed local health systems. In contrast to the politicians and healthcare administrators, Anthony Fauci has consistently offered reasonable recommendations and insight based on science.

3. Banner Health, University of Arizona Health Network merger

In June, the Banner Health and University of Arizona Health Network (UAHN) began negotiations to merge with Banner absorbing UAHN's $146 million debt. Banner promised to spend at least $500 million toward capital projects in the next five years and pay $300 million to establish an academic endowment. The deal is to be completed about the end of January, 2015. Mergers between the private and public health sectors have been a mixed bag and this one warrants close watching.

4. Meaningful use

Many physicians suspected that the Centers for Medicare and Medicaid Services' (CMS) meaningful use was little more than a scheme to have physicians perform useless clerical tasks. When they were not done, payment would be denied. At the end of 2014 this appears to be true. There remains no data that the meaningful use is "using certified electronic health record (EHR) technology to: Improve quality, safety, efficiency, and reduce health disparities" as intended. About 257,000 physicians will receive a 1% reduction in reimbursement in 2015.

5. Reduction in CMS hospital payments

Despite the lack of data that CMS' value-based healthcare program is doing much to benefit patients and some data that performance of the measures has been associated with adverse outcomes, CMS continues to reduce hospital payments because of hospital-acquired conditions and high readmission rates. We initially reported on this in June, 2013. We are not advocating for hospital-acquired infections or readmissions, but are advocating for measures that improve patient outcomes. Despite a phone call assuring us that CMS would look into it, nothing has seemed to change. Furthermore, much of the data is self-reported by the hospitals. As the VA scandal illustrates, self-reported data is not always reliable especially when money is involved.

6. Congress again fails to pass SGR fix

Congress passed a budget but failed to fix the widely hated sustainable growth rate (SGR) formula for physician reimbursement under Medicare. Also missing was an extension of the current pay bump for primary care. SGR has been present since 1997 and the one of the few things the politicians seem to come together on is not paying physicians, especially primary care physicians, a decent living wage.

Richard A. Robbins, MD

Editor

Southwest Journal of Pulmonary and Critical Care

Reference as: Robbins RA. 2014's top southwest medical stories. Southwest J Pulm Crit Care. 2014;9(6):350-1. doi: http://dx.doi.org/10.13175/swjpcc167-14 PDF

Searchable Database for Physician CMS Payments

Earlier this month the Centers for Medicare and Medicaid Services (CMS), despite the objections of many physicians, released physician payment data for 2012 (1). However, the data on the CMS website is difficult to search and interpret. The New York Times created a searchable database of physician payments from CMS which can be searched by physician name, specialty and/or location (2). The Times points out that payments may cover overhead, such as staff salaries and drug costs. In some cases, when doctors work as salaried employees of group practices, the payments that show up under their names go to their institutions.

Richard A. Robbins, MD

Editor

References

1. CMS. Medicare Provider Utilization and Payment Data: Physician and Other Supplier. Available at: https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Medicare-Provider-Charge-Data/Physician-and-Other-Supplier.html (accessed 4/24/2014).
2. NY Times. How Much Medicare Pays For Your Doctor’s Care. Available at: http://www.nytimes.com/interactive/2014/04/09/health/medicare-doctor-database.html (accessed 4/24/2014). 

Reference as: Robbins RA. Searchable databse for physician CMS payments. Southwest J Pulm Crit Care. 2014;8(4):238. doi: http://dx.doi.org/10.13175/swjpcc056-14 PDF

Many Southwest Hospitals Will Receive Decreased CMS Reimbursement

More hospitals are receiving penalties than bonuses in the second year of the Centers for Medicare and Medicaid Services' (CMS) quality incentive program, and the average penalty is steeper than last year according to a report from Jordan Rau in Kaiser Health News (1). Southwest hospitals reflect that trend with New Mexico and Arizona exceeding the US average both in percentage of hospitals receiving penalties and the average size of the penalty (Table 1). Colorado approximated the national averages (Table 1).

Table 1. Hospital CMS reimbursement bonus/penalty 2014. (For individual hospitals see Appendixes for Arizona, Colorado, New Mexico, and the Mayo Clinic Minnesota).

Most hospitals are gaining or losing <0.2% but in some instances the penalties are substantial. Gallup Indian Medical Center in New Mexico, a federal government hospital on the border of the Navajo Reservation, will be paid 1.14 percent less for each patient and New Mexico’s average of a -0.31% decline in reimbursement are the largest changes nationally. 

“This program is driving what we want in health care,” said Dr. Patrick Conway, CMS’ chief medical officer. He said most hospitals have improved since the program began a year ago despite more hospitals receiving penalties than bonuses. However, even some hospitals that have gotten better are still losing money because they are not scoring as well as others or have not improved as much.

Most winners from last year stayed winners and losers stayed losers, but there were some switches. For example, Banner Boswell Medical Center in Sun City will receive a 0.36% bonus in place of a -0.58% penalty last year. In contrast, the University of Colorado will receive a -0.35% penalty this year compared to a bonus of 0.29% last year. 

This year 45% of a hospital’s change in CMS reimbursement is based process of care measures. Patient satisfaction accounts for 30%. However, for the first time 25% of the score is based on standardized mortality for myocardial infarction, heart failure and pneumonia. CMS is planning to add new measures next year, including comparisons of charges at different hospitals and rates of medical mishaps and infections from catheters.

The maximum readmission penalties grow to 3% next year and CMS is launching a third incentive program that takes an additional 1 percent of payments away from hospitals with the most patients who suffered injury or infection during their stay. Combined, these measures have the potential to strip away as much as 5.5 percent of CMS payments from the worst performing hospitals starting next October.

As reported in the Southwest Journal of Pulmonary and Critical Care Southwest hospital charges to CMS vary widely for pulmonary and critical care DRGs (2). Also, the complications chosen by CMS do not correlate with outcomes (3). Felton et al. (4) reported higher patient satisfaction was associated with higher admission rates to the hospital, higher overall health care expenditures, and increased mortality and not the expected improvements in outcomes.

Ashish Jha (5) from the Harvard School of Public health examined the latest CMS reimbursement data and reported in his blog that hospitals in the West receiving larger penalties than other areas. Most disturbingly, public hospitals and safety-net hospitals also tended to do worse. As Jha points out these penalties are not large but the change may be relevant for a safety-net hospital operating on a small financial margin.

Richard A. Robbins, MD

References

1. Rau J. Nearly 1,500 hospitals penalized under Medicare program rating quality. Available at: http://www.kaiserhealthnews.org/stories/2013/november/14/value-based-purchasing-medicare.aspx (accessed 11/19/13).
2. Robbins RA. Variation in southwestern hospital charges for pulmonary and critical care DRGs. Southwestern J Pulm Crit Care. 2013;7(1):31-7. [CrossRef]
3. Robbins RA, Gerkin RD. Comparisons between Medicare mortality, morbidity, readmission and complications. Southwest J Pulm Crit Care. 2013;6(6):278-86.
4. Fenton JJ, Jerant AF, Bertakis KD, Franks P. The cost of satisfaction: a national study of patient satisfaction, health care utilization, expenditures, and mortality. Arch Intern Med 2012;172:405-11. [CrossRef][PubMed]
5. Jha AK. An update on value-based purchasing: year 2. Available at: https://blogs.sph.harvard.edu/ashish-jha/ (accessed 11/19/13).

Reference as: Robbins RA. Many southwest hosptials will receive decreased CMS reimbursement. Southwest J Pulm Crit Care. 2013;7(5):305-6. doi: http://dx.doi.org/10.13175/swjpcc164-13 PDF