Shay Jacobson, RN, MA, NMG, LNCC, CNLCP
The Affordable Care Act was passed in March of 2010 and has brought with it a number of initiatives, pilots and changes in the way care is delivered. Medicare recipients have seen quite a lot of change and must now be mindful of hospital status and eligibility for post-acute care coverage. Service providers continue to adapt, experiment, and seek ways to survive in an environment that may be costing them money while simultaneously keeping their customers away.
Although there are few “big picture” statistics available, the results of all this change are beginning to show up in measurable and interesting ways. Here, then, are some figures that reflect both success and failure, and a marketplace that is far from settled:
- As has been widely reported, hospitals are now subject to penalties when Medicare beneficiaries readmit to the hospital within 30 days of discharge. Use of “observation status” has increased dramatically – when a patient is hospitalized under observation status, they are not viewed as inpatients, thereby precluding the possibility of a readmission penalty and making the hospital stay a Medicare Part B (outpatient) event. Use of Observation Status doubled over the nine-year period between 2001 and 2009, climbing from 1 million beneficiaries in 2001 to 2.1 million in 2009. http://www.aarp.org/content/dam/aarp/research/public_policy_institute/health/2013/rapid-growth-in-medicare-hospital-observation-services-AARP-ppi-health.pdf)
- Despite a surge in the use of Observation Status, hospitals continue to suffer readmission penalties. Notably, however, it is anticipated that penalties will decrease slightly this year. More than 2,200 hospitals paid a penalty of up to one percent of their Medicare base payments during fiscal year 2013 — $280 million in total penalties. The Centers for Medicare and Medicaid Services (CMS) projects that during fiscal year 2014, 2,225 hospitals will incur penalties amounting to $227 million. http://healthaffairs.org/blog/2014/07/24/examining-medicares-hospital-readmissions-reduction-program/
- Hospital readmission rates have declined from 19% between 2007 and 2011 to an average of 18.4% in 2012. http://www.cms.gov/mmrr/Briefs/B2013/mmrr-2013-003-02-b01.html
- Recovery Audit Contractors (commonly known as RACs) audit hospital activity in real time to prevent “improper Medicare payments”, often stemming from Part A admissions when a Part B outpatient stay (observation status) might suffice. Despite this vigilant oversight, improper Medicare payments went UP during the period of RAC auditing, from 8.5% in 2012 to 10.1% in 2013. Some believe this phenomenon is caused by RACs seeking to recover past monies paid by Medicare rather than focusing on current payments. RACs receive commissions based on monies they recover. http://www.modernhealthcare.com/article/20140709/NEWS/307099939
- RAC activity led to a remarkable surge in appeals, creating an unprecedented backlog in administrative courts. Administrative law judges have been receiving 16,000 appeals per week. Between 2010 and 2013, The Office of Medicare Hearings and Appeals experienced a 184% increase in their claims and entitlements workload. The average waiting time for a hearing with an administrative law judge was up to 24 months as of December, 2013. http://www.mcknights.com/congressional-lawmakers-grill-top-alj-on-appeals-backlog-say-too-many-providers-are-being-put-out-of-business/article/360361/
- Medicare Recovery Audit Contractors returned $100.4 million in underpayments to healthcare providers in the third quarter of fiscal year 2014, the Centers for Medicare & Medicaid Services announced in July, 2014. This is the highest amount of returns for a single quarter since the RAC program began five years ago, according to the American Coalition for Healthcare Claims Integrity, an association of auditors. http://www.mcknights.com/racs-returned-a-record-100-million-to-providers-in-the-third-quarter-cms-announces/article/360560/
- Between 2000 and 2012, the overall rate of live discharges from hospice increased from 13.2 to 18.1 percent, and 71 hospices had live discharges on 100 percent of their patients (the average length of stay for these hospices averaged 193 days). Some believe the boom in for-profit hospice businesses has triggered a surge in aggressive recruiting and premature admission to hospice. http://www.nahc.org/NAHCReport/nr140505_1/
The changes triggered by the Affordable Care Act are far from finished. As more data becomes available, we will continue to report on progress posted in various spheres of the health care system, and the many “tweaks” that will likely be developed to correct unforeseen problems and resolve lawsuits.
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