This article first appeared in AHLA Weekly on October 31, 2014.

From its inception on October 1, 2012,[1] the Hospital Value-Based Purchasing (VBP) Program shifted Medicare’s paradigm to emphasize performance over costs in determining hospital reimbursement.[2] Reducing the overall Medicare reimbursement to hospitals by an estimated $1.4 billion for Fiscal Year (FY) 2015,[3] the VBP Program was quick to secure the attention of the nation’s health care providers. Technically “budget neutral,”[4] the VBP Program will return this same $1.4 billion to hospitals the following year in the form of performance incentives.[5] According to the federal government: The program’s “benefits will be seen in improved patient outcomes, safety, and in the patient’s experience of care. However, [the federal government] cannot estimate these benefits in actual dollar and patient terms.”[6]

As the federal government waits to assess the accuracy of its prediction, the FY 2015 reduction of 1.50% will finally level off at two percent (2%) in 2017.[7] An additional two years, however, are unnecessary to evaluate the VBP Program under fundamental accounting principles when using a general overview into the ways in which successful and profitable companies operate. Viewed from this perspective, the VBP Program is fundamentally flawed, and data from 2015, 2016, or 2017 will not present opportunities for correction. This article suggests that while smaller hospitals may bear the greatest collateral damage from the VBP Program, larger systems may suffer as well. The number of hospitals forced into financial distress or insolvency by the Hospital VBP Program remains to be seen, although consideration should be given to the number of hospitals lost to their communities it would take to undermine the projected benefits relating to outcomes, safety, and the overall patient experience. … Read more →

This article was first published at Corporate Compliance Insights on September 5, 2014.

“The darkest places in hell are reserved for those who maintain their neutrality in times of moral crisis.”  — Dante Alighieri

The end of summer brings with it change across the United States.  Children and many young adults prepare themselves for the new school year, professional baseball players set their sights on what has come to be known as the Fall Classic, and foliage undergoes the first stages of fall’s impending metamorphosis. For America’s health care professionals, August has also become synonymous with the release of the final rule from the Centers of Medicare & Medicaid Services (“CMS”), which covers the Medicare Program’s Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals (“IPPS”), and sets the rules of the game for those in the field, at least for another year.

Including such updates to the hospital IPPS for operating and capital-related costs as CMS continues to implement the Affordable Care Act, changes relating to graduate medical education (“GME”) and indirect medical education (“IME”) payments, revisions to the Hospital Value-Based Purchasing (“VBP”) Program, the Hospital Readmissions Reduction Program (“HRRP”), and the Hospital-Acquired Condition (“HAC”) Reduction Program, technical corrections to the provider administrative appeals and judicial review process, expanded use of Medicare Advantage (“MA”) risk adjustment data, not to mention the alignment of reporting and submission timelines for quality measures within the Medicare E.H.R. Incentive Program and IQR Program, this is one millenary regulation not to be missed. For those who may shy away from such Federal Register epics, the following is a brief overview of two critical topics. … Read more →

This article was first published in the Los Angeles Daily Journal on July 9, 2014.

Health care reform is insignificant in comparison to the fundamental purpose of the system it must change. Unlike a terminal illness, which doubles as a harbinger to remind us of the inescapable permanence of death, much of the influence of health care reform over which the nation has debated these past four years will prove to be fleeting at best. Time will shape and reshape the Affordable Care Act (ACA) in ways outside today’s imagination, but the hospital bed, that symbolic and functional centerpiece of American health care, will never be anyone’s destination of choice.

The transformation of Medicare from its humble origins in 1965 into the template for American health care’s payer system was certainly no small feat, although maintaining the Part B premiums at Medicare’s original price tag of $3.00 per month never stood a chance. Whether as a result of Medicare’s effect or in spite of it, advances in medicine since 1965 have played a large part in the program’s evolution, with today’s emphasis on performance in lieu of costs standing as a reflection of an inherent expectation that modern medicine should have the twofold intention to never do harm and excel at all times. Perhaps ACA’s greatest achievement is that it has granted an aura of entitlement to all hospital patients, for now society has not only come to expect quality medical care at any time, it also expects this service free of charge. … Read more →