MAHAP/MPAA /HFMA
Mount Pleasant, Michigan
Sept. 19, 2014
Vickie R. Kunz
Senior Director, Health Finance
Michigan Health & Hospital Association
1
Who is the MHA?
• Advocacy organization representing all hospitals in
Michigan.
• Activities include:
– State advocacy and policy on Medicaid funding and
policy issues
– Federal advocacy and policy on Medicare and
Medicaid issues
– MHA Keystone Center – Quality Improvement and
Patient Safety Initiatives
– BCBSM Contract Administration Process
• Unique to Michigan
2
Payer Issues
• The role of the MHA is to assist in resolving
systematic payer issues.
• Individual hospital contracts determine terms and
conditions and take precedence.
• Communicate issues to Marilyn Litka-Klein
(mklein@mha.org) or Vickie Kunz
(vkunz@mha.org) at the MHA.
3
Examples of MHA Involvement in Other Issues
• Other activities identified by/for the MHA membership
– Maximize federal funding in state Quality Assurance
Assessment Program (QAAP)
– Medicaid implementation of Critical Access Hospital
takeback that included “reject” vs “no-pay”, impact on
Medicare reimbursement
– Michigan Managed Care Rebid process
– Medicaid implementation of MI Health Link (formerly
dual eligible project)
– HFMA/MPAA/ACMA, etc. outreach
– BCBSM DRG validation audits
4
CMS RAC Appeals Settlement Proposal
• Administrative Law Judge (ALJ) appeals back log –
CMS proposes 68% of funds due if hospital
withdraws all pending appeals.
• Hospitals must submit request for settlement by
Oct. 31, 2014.
– CMS to provide payment 60 days after CMS acceptance
• No timeframe for CMS to accept
– PPS hospitals and CAHs are eligible- Rehab and Psych
Hospitals are not eligible.
• See Sept. 15 MHA Monday Report Article which
includes a link to CMS’ Sept. 9 presentation.
5
CMS ALJ Settlement Proposal – cont.
• These claims would not be counted for Medicare GME and
other cost report reimbursement purposes.
• Many hospitals that have appealed to the ALJ have had
positive outcomes, therefore diminishing the value of this
proposal.
• Due to the significant backlog at the ALJ, it may be years
before a hospital receives a positive decision and its payment
under the current appeals process.
• Hospitals are encouraged to carefully evaluate
whether to request settlement.
6
IPPS 2015 Final Rule
7
IPPS 2015 Final Rule Summary
System Component
Change
Update Factor
1.1% net rate increase (net of all rate adjustments) after budget neutrality
Wage Index
Redefined CBSAs based on 2010 census – besides direct wage index implications,
may impact other programs or special designations. Impacts 5 Michigan counties
VBP
1.5% rate reduction with chance to earn back amount withheld or more
Readmissions
Keep pace with national average or subject to up to 3% reduction for FY 2015
Hospital Acquired
Conditions
Hospitals in top quartile (the worst performing) will be penalized 1%
IME/GME
Changes in new hospital established programs and how rural hospitals are paid for
new programs.
DSH
25% of traditional formula calculation; remaining 75% pooled for all DSH hospitals,
reduced by uninsured reduction factor and then redistributed to hospitals as
uncompensated care (UCC) pool based on low income patient days . – No major
changes from FY 2014 final rule but UCC pool $1.4 billion less than in FY 2014.
Low-Volume Adjustment
Loosened criteria through March 31, 2015
MDH (Medicare Dependent
Hospital)
Extended through March 31, 2015
LTCH
1.1% rate increase
8
2 Midnight Rule & Short-Stay Payment Policy
• No changes adopted for two-midnight policy finalized in
FY 2014 IPPS rule.
• CMS will continue seeking input on short stay payment
methodology.
– No consensus in comments received
9
Reporting of Hospital Charges
• ACA provision requires hospitals to make public a list of
standard charges for items/services, including a list of
charges for services by MS-DRGs.
• No deadline for compliance but sets expectation that
hospitals should update the information at least
annually, or more often as appropriate.
• CMS states that hospitals should either make public a list
of their standard charges or their policies for allowing the
public to view a list of charges in response to an inquiry.
– Can use charge master
10
General Quality-Based Program
Themes
• Increased financial exposure each year (max exposure shown below)
HAC = Hospital Acquired Condition (HAC) Reduction Program; RRP = Readmission Reduction Program; VBP = Value
Based Purchasing Program
11
Medicaid
12
FY 2015 Budget
• New $11 million OB Stabilization Pool – GF/Federal $
• Maintained GME Funding
– Restored $4.3 million
• Continued Rural Access Pool - $35.6 million – GF/Federal $
• New tax-funded $85 Million DSH Pool
– $70 Million to be distributed to Large/Urban Hospitals
– $15 Million to be distributed to Small/Rural Hospitals
• More aligned with hospital provider tax paid to support these payments.
13
Hospital Reimbursement Reform Initiative
• 2013 meetings with hospitals, MSA steering committee
finalizing areas to implement
• Representatives include small, medium, and large hospitals
and CAHs
• Several ideas discussed:
· statewide inpatient rate with hospital adjustors,
· APR-DRG for inpatient
· Increase in outpatient payments financed with reduced inpatient
rates
· Medicaid OPPS rates are 53% of Medicare OPPS rates
· DSH methodology changes
· HRA methodology changes
· GME methodology changes
14
Newborn Claim Requirements
•
•
•
•
•
•
Dates of service Oct. 1, 2014 and after
Type of admission/visit
Birth weight
C-section/inductions related to gestational age
Both FFS & HMO claims
Informational edits, but will be required Jan. 1, 2015
15
Healthy Michigan Plan
• Enrollment as of Sept. 15 was 385,000
• Statewide $53 million in HRA payments
• No QAAP tax associated with these payments.
• All counties have achieved enrollment
• Additional appropriation required for FY 2015 as
enrollment has exceeded budget
• Despite 100% federal funding, there may be
some resistance in the legislature to pass the
additional funding bill
16
Continued, Healthy Michigan Plan
• CMS confirmed that HMP inpatient days should be
included for Medicare DSH calculations.
• Hospital registration staff encouraged to use
CHAMPS to determine which patients are HMP
versus regular Medicaid.
• Can use 270/271 batch transactions
• Hospitals required to report both FFS and HMO HMP
data separately on MMF.
17
Michigan Health Link (Dual Eligibles)
• Phased-in implementation of pilot project expected
to begin January 1, 2015.
• Hospitals responsible to negotiate payment
parameters in their contracts.
• Nine plans in Macomb/Wayne, two in 8 SW counties,
one in UP
• No guarantee of Medicare rates for I/P & O/P
• Ambiguity in rate for SNF payments
18
BCBSM DRG Validation
• Consultant found BCBSM erred in removing codes for BMI
and cerebral edema
• Other audit areas for improvement
• Sept. 24 education session, webinar available
• 2014 audits will be reviewed for compliance with consultant
findings
• MHA advocated for retroactive adjustment
– BCBSM has not finalized retroactive policy
19
Nov. 4 Voters Will Decide….
•
•
•
•
•
•
U.S. Senate (1 seat, open)
U.S. House of Representatives (14 seats, 4 open)
Governor
Attorney General
Secretary of State
State Supreme Court (2R incumbents, 1 open
seat)
• State Senate (38 seats, 10 open seats)
• State House of Representatives (110 seats, 41
open seats)
20
Dates to Remember
• Last day to register for general election: Oct. 6
• General election: Nov. 4
21
MHA Resources
•
Monday Report is available FREE to anyone and is distributed via email each
Monday morning.
– Go to website and select “Newsroom”, then Monday Report
•
MHA Monday Report – electronic publication issued weekly
•
Request password if you don’t have one.
– Email Donna Conklin at dconklin@mha.org to obtain MHA member ID
number
•
Advisory Bulletins – Extensive communications available only to MHA
members, as needed. (Require password to obtain from website).
•
Hospital specific mailings as needed for various impact analyses, etc.
•
Periodic member forums
•
See mha.org for other resources.
•
Monthly Financial Survey (MFS) provides free benchmarking of financial and
utilization statistics.
22
???Questions???
Vickie Kunz
Senior Director, Health Finance
Michigan Health & Hospital Association
110 West Michigan Avenue, Suite 1200
Lansing, MI 48933
Phone: (517) 703-8608
Fax: (517) 703-8637
email: vkunz@mha.org
23
DRG Operating Rate – 2015 Final Rule
• Labor and Non-Labor Related Standard Rates
Hospitals with a Wage Index
Greater than 1 (69.6% Labor
Share/30.4% Non-Labor Share)
Hospitals with a Wage Index Equal
to or Less than 1 (62% Labor
Share/38% Non-Labor Share)
Full Update
Labor
Non-Labor
Related
Related
$3,780.13
$1,651.09
$3,367.36
$2,063.86
24
Rate Update with Meaningful Use and
Inpatient Quality Reporting
PASSES
BOTH
MU
AND
IQR
• Incentives ending for many;
penalties starting up
• Connects IQR and MU Programs to
update factor for PPS hospitals
• Creates 4 update scenarios going
forward
• MU exposure increases over 3 years
beginning 2015; IQR holds constant
(MU = 25%; 50%; 75% | IQR = 25%)
• CAHs = cost-based payment
reduced; exposure increases over 3
years beginning 2015 (-0.33%; -0.66%; -1.0%)
FY 2015
Market Basket Rate-of-Increase
Adjustment for Failure to
Submit Quality Data under
Section 1886(b)(3)(B)(viii) of
the Act
Adjustment for Failure to be a
Meaningful EHR User under
Section 1886(b)(3)(B)(ix) of the
Act
MFP Adjustment under Section
1886(b)(3)(B)(xi) of the Act
Statutory Adjustment under
Section 1886(b)(3)(B)(xii) of the
Act
Proposed Applicable
Percentage Increase Applied to
Standardized Amount
FAILS
MU
FAILS
BOTH
MU
AND
IQR
FAILS
IQR
Hospital
Hospital
Hospital
did NOT
Hospital submitted did NOT
submit
submitted quality data submit quality data
quality data and is NOT quality data and is NOT
and is a
a
and is a
a
meaningful meaningful meaningful meaningful
EHR user EHR user EHR user EHR user
2.9
2.9
2.9
2.9
0.0
0.0
−0.725
−0.725
0.0
−0.725
0.0
−0.725
−0.5
−0.5
−0.5
−0.5
−0.2
−0.2
−0.2
−0.2
2.2
1.475
1.475
0.75
25
Cost Outlier Threshold & Capital Rates
• Final FY 2014 threshold:
$21,748
• Final FY 2015 threshold:
$24,758
• Represents a 13.8 percent increase in the cost outlier threshold,
resulting in fewer cases being eligible for outlier payments.
• Threshold is adjusted annually based on CMS’ projections for total
outlier payments so that total outliers payments approximate 5.1
percent of total IPPS payments.
• Final FY 2015 federal capital rate of $434.26, up from the current
$429.31
– 1.15 percent increase
26
Medicare Advantage Plans
• As of July 2014, 30 plans in Michigan, with 564,000 or
approximately 31% of Michigan’s 1.8 million Medicare
beneficiaries enrolled.
− Up to 21 plans in some counties.
• Review MA payment rate for all plans.
• CAH entitled to Medicare cost reimbursement.
• Each MA plan may determine own utilization model and is
not required to maintain electronic transactions.
• Many MA have instituted “RAC-like” utilization programs.
• Matrix of MA plans by county available at MHA website –
updated quarterly, with MHA Monday Report article.
− Aug. 11 MHA Monday Report.
27
ICD-10 Business-to-Business Testing
• Despite implementation delay to Oct. 1, 2015, MDCH testing
efforts continue.
• MHA strongly encourages hospitals to test ICD-10 claims
processing with all payers.
• MDCH offering ICD-10 compliant B2B testing for providers
pursuing CMS Level II compliance.
• Providers should test ICD-10 claims and inquiry transactions
using the CHAMPS B2B system.
– Work with clearinghouses or billing agents
– Submit claims using Michigan’s Single Sign-on (SSO) process
28
Michigan Loses Seniority
• U.S. Senate
– Sen. Carl Levin
(35 yrs)
• U.S. House of Representatives
–
–
–
–
–
Rep. John Dingell
Rep. Dave Camp
Rep. Mike Rogers
Rep. Gary Peters
Rep. Kerry Bentivolio
(59 yrs)
(23 yrs)
(13 yrs)
(5 yrs)
(2 yrs)
Total experience + seniority lost = 137 years
29
General Election 2014 - State Legislature
• Senate – 38 seats
–
–
–
–
10 open seats
First election since 2011 redistricting
29 open seats in 2010
Majority Leader Randy Richardville is term limited
• House of Representatives – 110 seats
– 41 open seats
– 70 lawmakers will have no more than 2 years of
legislative experience
– Speaker of the House Jase Bolger is term limited
30
Election 2014 — Call to Action
• Meet your candidates for state House and Senate, and
candidates for Congress
• Use MHA election tools available on the MHA election web
page
• http://www.mha.org/mha/elections.htm
–
–
–
–
–
Election Materials (table tent, posters, brochure)
Election Snapshot
Candidate Listing
Redistricting Information
Non-partisan sources
31
Objective & Useful Information
www.MIVote.org
• Non-partisan guide to candidates and issues
Secretary of State- michigan.gov/vote
• Elections in Michigan website
www.MichiganTruthSquad.com
• Non-partisan website providing analyses of campaign ads and
literature from candidates for Gov., state Legislature and Congress
www.mha.org (click on election logo)
• MHA election web page containing candidate information and
election information pertinent to hospital community
32