The Centers for Medicare & Medicaid Services (CMS) is launching an initiative to explore how states set the rates they pay managed care organizations to serve Medicaid patients.

The initiative consists of two parts:  first, CMS is examining the adequacy of the process states employ to set their rates – a process that affects the adequacy of the rates themselves; and second, it is drafting updated Medicaid managed care regulations.

Learn more about this new undertaking in this Kaiser Health News report.…

In the wake of Affordable Care Act policies that enhance access to health insurance, hospitals around the country are beginning to take a second look at their charity care policies.

Some are charging co-pays to uninsured patients; others are moving the line at which they provide free or subsidized care.

Such practices are not occurring in great numbers and do not yet constitute a trend, but they do reflect a growing concern among hospitals that some of their uninsured patients have options they are choosing not to exercise.

The New York Times has taken a look at a few hospitals that have reconsidered their long-time charity care policies.  Read its report here.…

The Pennsylvania Health Care Cost Containment Council (PHC4) has issued its annual report on the financial performance of the state’s acute-care hospitals.

Among the highlights:

• The state-wide average operating margin of hospitals fell from 5.73 percent in FY 2012 to 4.69 percent in FY 2013.
• Uncompensated care rose 5.41 percent, to more than $1 billion, and up from an average of 2.72 percent of hospital net patient revenue in FY 2012 to 2.81 percent in FY 2013.
• 35 percent of hospitals reported negative operating margins.
• 22 percent reported negative operating margins over the latest three-year period.

Find the complete PHC4 report here.…

Hospitals could soon face larger penalties from the federal government for selected infractions.

Under a new proposed regulation from U.S. Department of Health and Human Services’ Office of the Inspector General (OIG), the agency may soon impose larger fines for

…failure to grant OIG timely access to records; ordering or prescribing while excluded from a government program; making false statements, omissions, or misrepresentations in an enrollment application; failure to report and return an overpayment; and making or using a false record or fraudulent claim.

The OIG’s authority to do so comes from a number of sources, including the Affordable Care Act.

Interested parties have 60 days to comment on the proposed regulation.

Learn more about the OIG proposal in this Fierce Healthcare story and find the proposed regulation itself here, in the Federal Register.…

While most hospitals have recovered from the worst of the recession, safety-net hospitals that were already weak before the recession now find a growing financial gap between themselves and other hospitals.

So reports the new study “Hospital Financial Performance in the Recent Recession and Implications for Institutions That Remain Financially Weak,” which was published in the May edition of Health Affairs.

According to a news release about the study,

About 28 percent of the safety-net hospitals were financially weak in 2006.  While their financial performance dipped in 2008, these institutions rebounded by 2011.  However, the financial gap between the safety-net hospitals and the non-safety-net hospitals continues to widen in terms of their total profit.

The release also notes the implications of this financial struggle:

On the one hand, financially weak and safety-net hospitals continue to keep their doors open.  On the other hand, these institutions remain in precarious financial positions that could compromise their ability to invest in innovations or quality improvement activities that may provide value for patients.

Learn more about the study in this news release or find the study itself here, on the web site of the publication Health Affairs.…