Archive for October, 2015


One State’s Battle With DSH Cuts

Hospitals across the country are concerned about the degree to which the Affordable Care Act is reducing the Medicare disproportionate share hospital (Medicare DSH) payments that help underwrite the cost of the care they provide to uninsured patients.

Those in states that have expanded their Medicaid programs are now receiving payments for at least some of those formerly uninsured patients because those individuals are now enrolled in Medicaid. In states that did not expand their Medicaid programs, however, hospitals face challenges coming from two directions: reduced Medicare DSH payments without the benefit of some of those uninsured patients enrolling in Medicaid.

The state of Louisiana has not expanded its Medicaid program, and now, policy-makers there are faced with the question of how to finance their unexpanded Medicaid program in the face of reduced – and falling – Medicare DSH revenue.

Read more about the challenges that state faces and the role of Medicare DSH cuts in those challenges in this article from the Times-Picayune.…

Maryland Global Budgeting Initiative Shows Promise

A new approach to giving hospitals incentives to keep patients out of their beds is showing promise in Maryland.

With the help of an agreement with the federal Centers for Medicare & Medicaid Services, the state is moving its hospitals away from fee-for-service payments and toward a global budgeting approach in which instead of hospitals being paid for admissions, they receive a set payment for the entire year regardless of what and how much care they provide. Hospitals that spend less than the money they receive to care for a designated population get to keep the difference.

Tested at first in 10 rural hospitals, 18 months later the program was open to every hospital in the state and within another six months, every hospital in Maryland joined the program.

The program, now two years old, is well on its way to achieving its target of saving Medicare $330 million while reducing hospital admissions and improving the health of the state’s residents. During the first year alone the program saved Medicare $100 million and reduced hospital readmissions faster than the national rate.

Learn more about what Maryland is doing and how it is doing it in this report from National Public

Medicare Cuts May be Part of Budget Deal

The agreement between the White House and congressional negotiators on a two-year budget deal and an increase in the federal debt ceiling will be paid for in part with reductions in Medicare payments.

Under the reported agreement, negotiators agreed to increase federal spending $80 billion over two years, and that increase will almost certainly need to be offset by spending cuts. The New York Times has reported that “The Medicare savings would come from cuts in payments to doctors and other health care providers.”

The budget agreement reportedly did not include specific spending cuts beyond extension of the current two percent Medicare sequestration cuts, although the publication The Hill reports that site-neutral Medicare outpatient payments may be part of the agreement; the additional cuts will need to be negotiated within Congress.

To learn more about the budget agreement and its possible implications for health care providers, see this New York Times article and this report from The Hill.…

Patient-Centered Medical Homes Project Produces Mixed Results

A patient-centered medical homes program in Colorado reduced participants’ emergency room visits and hospital admissions.

Yet it did not saving money.

The program, involving 98,000 patients and 15 medical practices, reduced emergency room visits 9.3 percent from a baseline over three years and reduced hospital admissions for patients with more than two illnesses more than 10 percent over the same period of time.

But it also saw a decline in participants’ primary care physician visits and mixed results for a number of quality indicators.

Learn more about the program and the results it produced in this Commonwealth Fund report.…

Are Medicare ACOs Living Up to the Hype?

Not yet.

At least that’s the conclusion to be drawn based on a report recently released by the Centers for Medicare & Medicaid Services (CMS).

According to a CMS fact sheet,

…the 20 ACOs [accountable care organizations]in the Pioneer ACO Model and 333 Medicare Shared Shavings Program ACOs generated more than $411 million in total savings in 2014, which includes all ACOs’ savings and losses. At the same time, 97 ACOs qualified for shared savings payments of more than $422 million by meeting quality standards and their savings threshold. The results also show that ACOs with more experience in the program tend to perform better over time.

Kaiser Health News, however, took the analysis a step further:

In August, Medicare officials released 2014 financial details showing that the so far the ACOs have not saved the government money. The 20 ACOs in the Pioneer program and the 333 in the shared savings program reported total savings of $411 million. But after paying bonuses, the ACOs recorded a net loss of $2.6 million to the Medicare trust fund, a fraction of the half a trillion dollars Medicare spends on the elderly and disabled each year.

Find the CMS fact sheet and a …