A draft technical report by the National Quality Forum has called into question the fairness of Affordable Care Act Medicare programs that seek to provide financial incentives to hospitals that meet selected quality care standards and penalize those that fail to meet those standards.

According to the report, which was commissioned by the Obama administration, these programs unfairly penalize hospitals that care for especially large numbers of low-income seniors.

The report notes, according to the New York Times, that

Low-income people may be unable to afford needed medications or transportation to doctor’s offices and clinics, the panel said. If they have low levels of formal education or literacy, they may have difficulty understanding or following written instructions for home care and the use of medications. In addition, the clinics and hospitals they use may lack the resources and high tech equipment needed to diagnose and treat illnesses.

Among the programs cited for this problem are Medicare’s value-based purchasing program and its hospital readmissions reduction program.

Read more about the programs’ challenges, as well as the views of those who believe the programs are working as intended and should not be adjusted, in this New York Times article.  Go …

Growth in costs continue to outpace revenue growth for non-profit hospitals, resulting in smaller margins and reduced cash flow, according to Moody’s, the investment rating agency.

Adding to hospitals’ troubles, Moody’s notes, is new, high-deductible health plans that leave growing numbers of patients with unpaid hospital bills.

In addition, hospitals found themselves serving growing proportions of Medicare patients and fewer privately insured patients while their Medicaid patient base remained mostly unchanged; the financial reports on which this analysis is based cover time periods before the Affordable Care Act’s Medicaid expansion took effect.

Learn more about Moody’s most recent findings here, in the company’s announcement of its latest analysis.…

Pennsylvania’s Medicaid enrollment has risen by 18,000 since October 1 even though the state did not expand its eligibility criteria as authorized by the Affordable Care Act.

Instead, the enrollment increase is being attributed to what is commonly called “the woodwork effect:” people who were unaware that they already were eligible for Medicaid, were led to explore their insurance options by all of the attention the Affordable Care Act has received in recent months, and subsequently learned that they were eligible for Medicaid.

For a closer look at the woodwork effect, how it has affected Medicaid enrollment in Pennsylvania and elsewhere, and the enrollment increase’s financial implications for the state, see this Pittsburgh Post-Gazette article.…

The Centers for Medicare & Medicaid Services’ (CMS) Office of the Inspector General (OIG) has recommended that Medicare introduce site-neutral payments for low-risk and no-risk surgical procedures that could be performed in ambulatory surgical centers instead of hospital outpatient facilities.

By lowering Medicare payments for procedures that could be performed in ambulatory surgical centers instead of more costly hospital outpatient departments, Medicare could save $15 billion from 2012 through 2017 while beneficiaries could save another $3 billion in cost-sharing payments, the report concluded.

Medicare rejected the recommendation in part because it did not include clinical criteria for determining which surgical procedures would be subject to such an approach.

Read a summary of the OIG report and find a link to the complete report here, on the OIG’s web site.  The report includes CMS’s response.…

Medicare should perform risk adjustment of payments to hospitals and insurers based on socioeconomic considerations or the overall health of populations rather than on the medical conditions of patients, according to a new study.

Analysts at the Dartmouth Atlas Project compared the current methodology, which adjusts risk, and therefore payments, based on the underlying medical condition of Medicare patients, to several other risk adjustment methodologies and found that socioeconomic considerations – that is, the poverty of the region in which patients live – and the overall health of regional populations is a better approach to payment risk adjustment.

Risk adjustment is used to determine how the federal government pays Medicare Advantage plans and how it penalizes hospitals for what are considered “excessive” Medicare readmissions.

Learn more about the new study in the article “A population health approach to reducing observational intensity bias in health risk adjustment:  cross sectional analysis of insurance claims,” which has been published in the journal BMJ.  Find the article here.…