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News of the Day ... In Perspective

12/17/2007

Medicare changing rules for hospital payments

To overcome physicians’ and hospitals’ opposition to Medicare, the program’s congressional architects made certain promises. As explained by Dr. Meredith B. Rosenthal of the Harvard School of Public Health, they “selected payment mechanisms designed to preserve the status quo” (N Engl J Med 2007;357:1573-1575).

As Medicare’s costs become “untenable,” a series of congressional steps have “rendered Medicare’s payment policy far less passive than it once was.” The latest step is “nonpayment for performance.”

CMS will no longer be paying extra for certain complications deemed to be “preventable,” unless documented to be present on admission. Some hospitals are responding by increased surveillance and documentation of admission findings, as of decubitus ulcers. Some are doing universal screening for methicillin-resistant Staphylococcus aureus (MRSA) to avoid having to treat the infection without payment if it is only discovered after symptoms occur.

Doctors may be urged to document more specifically—say “left ventricular systolic dysfunction” rather than simple “congestive heart failure”—to increase the DRG payment by thousands or tens of thousands of dollars.

Enhanced system gaming may be necessary for survival: a CMS report to Congress on Nov 26 proposes to cut Medicare payments to all facilities by a flat 2% to 5%. The money could be redistributed to hospitals as an incentive to meet certain criteria. This so-called value-based pricing, which requires congressional approval to implement, is designed to be cost-neutral to the government. It could save money if Congress decides not to redistribute all the withheld cash (Wall St J 11/27/07).

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