Skip to main content

Impact analysis: Enacted Medicare cuts

DataGen has completed its analysis of enacted Medicare cuts, the results of which are shared here. Please note that this analysis is intended for advocacy purposes only and should be used as an indication of the extent to which hospital providers nationwide have been impacted by existing Medicare provider payment cuts.

These cuts were enacted by Congress to achieve Medicare payment policy and long-term deficit reduction goals. This DataGen impact analysis includes major cuts enacted since 2010.

The enacted legislative cuts analyzed consist of:

  • Medicare marketbasket, Medicare Disproportionate Share Hospital and quality adjustments authorized by the Affordable Care Act of 2010; note that for the purposes of this analysis, quality adjustments are broken out into their own category;
  • the effect of the 2.0% across-the-board sequestration reduction to payments authorized by the Budget Control Act of 2011;
  • inpatient coding adjustment reductions authorized by the American Taxpayer Relief Act of 2012;
  • the reduction in bad debt payments authorized by the Middle Class Tax Relief and Job Creation Act of 2012;
  • payment adjustments for services paid for under the clinical laboratory fee schedule authorized by the Protecting Access to Medicare Act of 2014;
  • reduction of OPPS payments to non-excepted off-campus sites to a level equivalent to that paid under the Medicare Physician Fee Schedule required by the Bipartisan Budget Act of 2015;
  • marketbasket adjustments authorized by the Medicare Access and CHIP Reauthorization Act of 2015;
  • change in Home Health Prospective Payment System payments resulting from the implementation of the Patient-Driven Grouping Model; and
  • payment reductions authorized by the Bipartisan Budget Act of 2018, including adding hospice to the Inpatient PPS short-stay post-acute care transfer policy.
The enacted regulatory cuts analyzed consist of:
  • regulatory coding adjustments implemented by CMS;
  • 2.0% reduction to the calendar year 2016 outpatient marketbasket update for rate inflation due to packaging of laboratory payments;
  • long-term care hospital site-neutral payment adjustment implemented in the federal fiscal year 2016 final rule;
  • net payment impacts resulting from CMS’ reduction in OPPS payments for 340B Program purchased drugs;
  • reduction in payments for Wholesale Acquisition Cost-based drugs from WAC+6% to WAC+3%;
  • change in Skilled Nursing Facility PPS payment methodology from the Resource Utilization Group-IV system to the Patient-Driven Payment Model; and
  • reduction of OPPS payments for clinic services provided at excepted off-campus sites to a level equivalent to that paid under the Medicare Physician Fee Schedule.

The quality cuts analyzed include estimated impacts from Medicare’s Value-based Purchasing, Readmissions Reduction and Hospital-acquired Conditions programs.

These cuts could have a major impact on hospital finances and operations in the coming years. To learn more about this impact and about how to thrive in alternative payment models, contact us today.

Comments

Popular posts from this blog

How to prepare: Radiation Oncology Model, Part 1

Check your participation status and build your plan Are you a hospital outpatient department, physician group practice or freestanding clinic providing radiation therapy services? If so, you may be required to adopt the new mandatory Radiation Oncology Model. Mandatory participation is randomized by Core-based Statistical Areas. You can check your organization’s participation status online. CMS released the Final Rule for the RO Model, giving providers 60 days to prepare for program launch on January 1, 2022. If your organization performs radiation therapy in a ZIP code on the list, you will need to begin preparing for the model.

Proposed rule updates for the Radiation Oncology Model

The new Radiation Oncology alternative payment model will start Jan. 1, 2022, after the proposal is finalized in the calendar year 2022 Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System final rule, scheduled for early November. This rule will require prospective hospital outpatient departments, physician practices and freestanding clinics providing radiation therapy services to adopt a prospective bundled payment model with new clinical and quality measure reporting requirements. The model is mandatory for participants selected by CMS. The new RO model includes several notable changes that must be addressed for successful participation: Disease sites update The criteria for cancer types have been clarified. Cancer types must be: commonly treated with radiation therapy according to nationally recognized evidence-based guidelines; associated with ICD-10 codes that demonstrate pricing stability; and not determined to be unsuitable for inclusion by the H

What to know about CMS’ 2022 rules

Key takeaways from five final and two proposed rules from CMS CMS adopted five final Medicare Prospective Payment System rules for FFY 2022 and proposed two rules for calendar year 2022. DataGen has interpreted and analyzed each of the final and proposed rules to help you gauge how these changes may impact your organization.   These rules include regular updates to the wage index and other significant items listed below. The Inpatient PPS final rule includes the following proposals: rebasing and revising the IPPS marketbasket and the Capital Input Price Index from FFY 2014 cost report data to FFY 2018 data; rate increase (+0.5%) for the Medicare Access and CHIP Reauthorization Act of 2015 coding offset adjustment; nonstandard adjustments to hospital wage indexes (for eligible hospitals) including bottom quartile adjustments, a 5% wage index “stop-loss” and the reintroduction of an imputed floor policy as mandated by the Consolidated Appropriations Act of 2021; updates to Medicare Dis