Medicare s Inpatient Final Rule for Claire Kapilow, Director, Regulatory Affairs

Transcription

1 Medicare s Inpatient Final Rule for 2013 Claire Kapilow, Director, Regulatory Affairs

2 Publisher Notice Although we have tried to include accurate and comprehensive information in this presentation, please remember it is not intended as legal or other professional advice. 2

3 Today s Topics Overview and recent history Standardized amounts Coding update ICD-9, DRG, MCE, new technology changes ICD-10 Medicare status Changes in DRG weights Expiring programs (unless Congress acts) New or expanding programs Hospital acquired conditions Readmissions reduction Quality reporting Value based purchasing Financial impact What to expect NOTE: Unless otherwise noted, all data cited in this presentation are from Medicare s 2013 Inpatient Final Rule, previous Final Rules, or studies that are cited in the Final Rule - Payment/AcuteInpatientPPS/FY-2013-IPPS-Final-Rule-Home-Page.html 3

4 Base operating amount: Total $$ = (base operating + base capital + hospital adjustments) * DRG weight 4

5 Standard Operating Rates For FY 2013, operating payments increase by almost 2.8%, adding more than $2 billion to hospital Medicare revenue Increase is based on: Market basket increase of 2.6 % Less 0.7 % productivity adjustment (from Reform legislation) Less 0.1 % sustainability adjustment (from Reform legislation) Less 1.9 % adjustment for documentation and coding changes Plus 2.9 % to back out a one-time documentation and coding adjustment from last year Total documentation and coding adjustments since 2008: -3.9% prospective/permanent, and -5.8% one-time recoupment 5

6 Thought We Would Never See Source: FY 2013 IPPS Proposed Rule: 6

7 ICD-9-CM Code Changes Diagnoses: no new codes no codes deleted no code descriptions revised Procedures: 1 code added: injection or infusion of glucarpidase no codes deleted no code descriptions revised Moving towards ICD-10: FY 2009: 427 new codes FY 2010: 327 FY 2011: 151 FY 2012: 187 FY 2013: 1 new code FY 2014: no ICD-9 changes ever again???? 7

8 DRG Changes Respiratory System Influenza with pneumonia Principal diagnosis influenza with pneumonia Secondary diagnosis pneumonia due to Klebsiella pneumoniae pneumonia due to Pseudomonas pneumonia due to Staphylococcus, unspecified methicillin susceptible pneumonia due to Staphylococcus aureus methicillin resistant pneumonia due to Staphylococcus aureus other Staphylococcus pneumonia pneumonia due to anaerobes pneumonia due to Escherichia coli [E. coli] pneumonia due to other gram-negative bacteria pneumonia due to Legionnaires' disease pneumonia due to other specified bacteria Move From DRGs Simple Pneumonia and Pleurisy ( ) To DRGs Respiratory Infections and Inflammations ( ) 8

9 DRG Changes Circulatory System Patients with abdominal aortic aneurysms Surgical repair: too risky Endovascular repair using endograft: poor seal may cause leaks Medical management: high risk for related morbidity and mortality Fenestrated (with holes) grafts: endovascular implantation of branching or fenestrated graft in aorta FDA approval April 2012 Standard grafts: DRGs Other Vascular Procedures ( ) Fenestrated: moved to DRGs 237, 238 Major Cardiovascular Procedures ( ) 9

10 DRG Changes Complications and Comorbidities Malnutrition: malnutrition of moderate degree: becomes CC malnutrition of mild degree: becomes CC unspecified protein-calorie malnutrition: already a CC Chronic occlusion of artery: chronic total occlusion of artery of the extremities: becomes CC Acute kidney failure with lesions: acute kidney failure with other specified pathological lesion in kidney: Moved from major CC to CC 10

11 Medicare Code Edits New Edit continuous invasive mechanical ventilation for 96 hours or more Requires at least four days Impact on DRG assignment In the most recent MedPar data: Alternate codes available: continuous invasive mechanical ventilation for less than 96 hours continuous invasive mechanical ventilation of unspecified duration Claims with and LOS less than 4 days will be returned to the provider for correction or validation 11

12 Medicare Code Edits Discontinued Edit NCD for Bariatric Surgery for Morbid Obesity 2009 Prohibits open or laparoscopic sleeve gastrectomy for morbid obesity New type of surgery: vertical (sleeve) gastrectomy New code laparoscopic vertical (sleeve) gastrectomy Coverage denied for obesity by CMS for FY2012 Added to MCE as noncovered Coverage decision issued June 27, 2012: covered when BMI >= 35 kg/m 2 At least one comorbidity related to obesity Previous medical treatments have been unsuccessful with principal diagnosis morbid obesity: removed from the MCE for FY

13 New Technology for FY 2013 Auto Laser Interstitial Thermal Therapy: continued MRI-guided laser tipped catheter to destroy brain tumors Principal diagnosis of malignant neoplasm of brain Procedure code laser interstitial thermotherapy of lesion of brain Maximum additional payment $5,300 Glucarpidase (Voraxaze ): approved For patients with toxic methotrexate concentration due to renal impairment Rapidly decreases levels of methotrexate (98% within 15 minutes) FDA approval January 2012 New technology payment for FY 2013: injection or infusion of glucarpidase (only new code for FY2013) Maximum additional payment $45,000 13

14 New Technology for FY2013 Fidaxomicin (DIFICID ): approved New treatment for diarrhea associated with Clostridium difficile Decrease hospitalizations, reduce recurrence, improve quality of life FDA approval May 2011 New technology payment FY2013 Diagnosis code intestinal infection due to Clostridium difficile NDC code (billing guidance to follow) Maximum additional payment $868 Fenestrated AAA endovascular graft (Zenith F. Graft): approved DRG reassignment and new technology payment Procedure endovascular implantation of branching/fenestrated grafts in aorta Maximum addition payment $8,

15 Medicare ICD-10 Progress Inpatient Acute Care MS DRGs draft published, updated Medicare code edits draft published, updated POA coding rules draft published, updated Hospital acquired conditions draft published, updated Clotting factor DX requirements in process New technology coding in process Medicare billing instructions published ( No ICD-9 codes, even for paper claims No mixed claims Cutover instructions provided across all care settings Special rules for 3-day window, critical access, anesthesia, others Claims that don t conform will be RTP, not denied 15

16 DRG Weights Top Percentage Increases 16

17 DRG Weights Most Common DRGs 17

18 Expiring Programs Low Volume Previous: 25% more money for hospitals with Up to 200 total discharges No other hospitals within 25 miles Reform: up to 25% more money for hospitals with Up to 1600 Medicare discharges, Part A or Part C No other hospitals within 15 road miles Payment adjustment for each claim sliding scale, based on # discharges 1000 Medicare discharges: 10.71% increase 200 Medicare discharges: 25% increase Temporary benefit expires effective 10/1/12 revert to previous rules 520 hospitals received increases during FY 2012 Very few qualify for FY 2013, unless Congress acts 18

19 Expiring Programs Productivity Bonus Reform: extra money for lowest Medicare spending per beneficiary Hospitals in most efficient counties get: FY2011: $150 million FY2012: $250 million 405 hospitals received bonus payments under this benefit Program expires 2013, although SPB measure lives on States with largest total benefit: 19

20 Expiring Programs Medicare Dependent Hospitals Small rural hospitals, with 60% Medicare discharges Not classified as a sole community hospital Paid based on eligible costs (75% of difference) Since 1997, set to expire 10/1/12, unless Congress acts States with most MDH: 20

21 New or Expanding Programs

22 Medicare Maze 22

23 Hospital-Acquired Conditions 261 sets of MS-DRGs involve some type of CC or MCC split Presence of secondary diagnoses that are CC or MCC increase payment Secondary diagnoses that arise during the stay may be preventable CMS is required to identify specific secondary diagnoses High-cost complication that is potentially preventable Identifiable as arising during the stay based on POA indicator Pricing rules prevent increased payment when HAC is present $24 million in savings FY 2013 modest expansion New codes for central venous catheter infections New categories: surgical site infection after cardiac implantable electronic device procedures iatrogenic pneumothorax with venous catheterization Mandated for Medicaid Moving to other settings 23

24 Hospital-Acquired Conditions FY 2012 Foreign object retained after surgery Air embolism Blood incompatibility Stage III and IV pressure ulcers Falls and trauma Manifestations of poor glycemic control Catheter-associated urinary tract infection (UTI) Vascular catheter-associated infection Surgical site infection following Coronary artery bypass graft (CABG): (Mediastinitis) Bariatric surgery for obesity Certain orthopedic procedures Deep vein thrombosis (DVT)/pulmonary embolism (PE) following certain orthopedic procedures 24

25 Hospital-Acquired Conditions FY 2013 Vascular catheter-associated infection Add: bloodstream infection due to central venous catheter Add: local infection due to central venous catheter Surgical site infection following Add: Cardiac Implantable Electronic Device (CIED) procedures Add new category: Iatrogenic Pneumothorax with Venous Catheterization 25

26 HAC Impact on DRG Assignment 26

27 Estimated Savings from HAC Program 27

28 Hospital Readmissions Reduction One in five seniors are readmitted within 30 days of discharge Study: 80% of readmissions could be avoided Study: 30% of potentially preventable readmissions are from Heart attack Heart failure Pneumonia Chronic obstructive pulmonary disease Coronary artery bypass graft surgery Percutaneous transluminal coronary angioplasty Other vascular procedures PPACA: mandated implementation of readmissions reduction program by 10/1/

29 How It Will Work Pick a historical data period (July 2008 through June 2011) Find all Medicare discharges for target groups: heart attack, heart failure, pneumonia For these discharges, identify preventable historical readmissions within 30 days of discharge Readmitted to any IPPS hospital Regardless of reason for admission Exclude planned readmissions, transfers, deaths, LAMA Develop a measure to compare readmission rates across hospitals in the historical period Assign these readmission rates to every hospital Publish those readmission rates for all to see Use them to reduce payment for all discharges in current period. 29

30 Readmission Reduction Factors In historical period, calculate Total payments for preventable readmissions e.g., $15,000 Total payments for all discharges e.g., $1,000,000 Calculate an adjustment factor = 1 (preventable$ / total$) e.g., 1 (15,000/1,000,000) = = Can t be less than the statutory floor FY 2013: 0.99 FY 2014: 0.98 FY 2015: 0.97 IPPS hospitals only. Puerto Rico excluded. Maryland hospitals excluded, but readmissions to Maryland hospitals count IPPS-Final-Rule-Home-Page-Items/FY2013-Final-Rule-Tables.html 30

31 Readmission Reduction Factors Connecticut 31

32 Hospital Compare 32

33 Impact on Reimbursement Calculate final payment as normal Then calculate payment reduction = (Base Operating DRG Payment Amount) x (1 - Adjustment Factor) Base Operating DRG Payment Amount is the wage-adjusted operating base rate, adjusted for transfers, times DRG weight, plus new technology add-on Subtract this amount from your final payment Does not affect IME, DSH, low-volume payments Sole community hospital adjustments Capital payments Outlier payments Pass-thru payments 33

34 Example 1: Community Hospital Standardized base operating: $5, Wage index: , labor portion: 62% Wage adjusted base operating: $4, DSH factor Total operating base: $5, Total capital base: $ Total base rate: $5, DRG weight: Total payment: $5, * = $11, Readmissions reduction factor: Payment reduction: ( ) * 4, * = $93.69 Final payment: $11, $93.69 = $11,

35 Example 2: Urban Academic Medical Center Standardized base operating: $5, Wage index: , labor portion: 68.8% Wage adjusted base operating: $6, DSH , IME Total operating base: $8, Total capital base: $ Total base rate: $9, DRG weight: Total payment: $9, * = $47, Pass-through (DGME): 5 days at $200 per day: $1,000 High charges add outlier $20,000 Total payment $68, Readmissions reduction factor: Payment reduction: ( ) * 6, * = $ Final payment: $68, $ = $67,

36 What to Expect $300 million impact this year not budget neutral Future: Historical timeframe will change Statutory floor will decrease to 97% Program will expand to other clinical areas Chronic obstructive pulmonary disease? Coronary artery bypass graft surgery? Percutaneous transluminal coronary angioplasty? Other vascular procedures? What else? Medicaid is also implementing readmissions reduction programs Maryland New York Texas many others 36

37 Inpatient Quality Reporting CMS has identified a series of quality measures that providers must report to receive full reimbursement under IPPS. Measures are: Available through Hospital Compare Potentially usable for other CMS programs (e.g., value-based purchasing) The set of measures is continually reviewed and modified to reflect Change in medical practice Availability of more appropriate measures Program requirements Basic principles that guide measure selection Rely on a mix of standards, process, outcomes, and patient experience of care measures, including care transitions and functional status Align measures across public reporting and payment systems under Medicare and Medicaid Minimize the burden on providers to the extent possible Measures should be nationally endorsed by a multi-stakeholder organization 37

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39 IQR Measures Added in FY 2013 Final Rule Percent of babies electively delivered prematurely Hospital-wide readmission rate Readmission following knee or hip replacement surgery (mean 6%, range 3% to 50%) Post-op complications after knee or hip replacement surgery (joint infections, septicemia, bleeding and hematoma, death) HCAHPS survey items Asked at discharge Staff took patient preferences into account for discharge planning Patient had clear understanding of patient responsibilities Patient understood purpose of all medications Patient mental health Admit through ER 59 active measures, apply for FY 2015 payment determination 39

40 Value Based Purchasing Program Hospital receives penalties or bonus payments today, based on quality measures from a historical performance assessment period Funded by reduction in standardized amount: 1% in FY % in FY % in FY % in FY % in FY 2017 Based on quality measures submitted under the IQR program Begin program in January 2013, retroactive to October

41 VBP Program Measures for FY

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45 Measures to Be Added FY2014 New measures Postoperative Urinary Catheter Removal on Postoperative Day 1 or 2 Mortality within 30 days post discharge AMI Heart failure Pneumonia FY 2015 new measures Two outcome measures AHRQ patient safety Indicators composite measure Central line-associated blood stream infection One efficiency measure Medicare spending per beneficiary 45

46 Hospitals with Greatest Loss (preliminary) 46

47 Hospitals with Greatest Gain (preliminary) 47

48 Example 1: Community Hospital Standardized base operating: $5, Wage index: , labor portion: 62% Wage adjusted base operating: $4, DSH factor Total operating base: $5, Total capital base: $ Total base rate: $ DRG weight: Total payment: $5, * = $11, Value based purchasing factor: Payment reduction: ( ) * 4, * = $93.69 Final payment: $11, $93.69 = $11,

49 Example 1: Add Readmissions Reduction Standardized base operating: $5, Wage index: , labor portion: 62% Wage adjusted base operating: $4, DSH factor Total operating base: $5, Total capital base: $ Total base rate: $5, DRG weight: Total payment: $5, * = $11, Value Based Purchasing factor: , reduction $93.69 Readmissions Reduction factor: , reduction $93.69 Total payment reduction: $ Final payment: $11, $ = $11,

50 Example 2: Community Hospital in 2017 Standardized base operating: $5, Wage index: , labor portion: 62% Wage adjusted base operating: $4, DSH factor Total operating base: $5, Total capital base: $ Total base rate: $5, DRG weight: Total payment: $5, * = $11, Readmissions reduction factor: , reduction $ Value Based Purchasing factor: , reduction $ Total reduction: $ Final payment: $11, $ = $11,

51 Example 3: Community Hospital in 2017 Standardized base operating: $5, Wage index: , labor portion: 62% Wage adjusted base operating: $4, DSH factor Total operating base: $5, Total capital base: $ Total base rate: $5, DRG weight: Total payment: $5, * = $11, Readmissions reduction factor: , no reduction Value Based Purchasing factor: , payment increase $ Total payment: $11,

52 Financial Impact of Final Rule Provisions

53 Estimated Financial Impact of Final Rule 53

54 Estimated Impact of FY 2013 Final Rule 54

55 Thank You. Claire Kapilow, MSM Director of Regulatory Affairs