Proposed Medicare Reimbursement Changes to Impact Hospitals Profitability |
Healthcare executives can obtain hospital-specific data packages to determine how proposed rules would apply to their existing reimbursements.
Louisville, KY (PRNewswire) July 10, 2007 — Proposed changes to the Medicare payment system by the Centers for Medicare and Medicaid Services (CMS) would significantly affect how hospitals are reimbursed. The regulations may redistribute revenues among medical services and significantly affect the bottom line for many hospitals. Changes are also proposed for the payment of high cost cases and patients transferred to another setting. Despite the extensive changes being proposed, however, many hospital administrators and healthcare executives do not yet have a clear understanding of how proposed rulings will impact their operations.
A final regulation will be scheduled to take effect on October 1, 2007, but is expected to contain most of the provisions in the proposed rule. These include a new severity adjusted system for payment classifications (MS-DRGs) and continued phase-in of a new methodology for defining relative weights based on hospital-specific costs.
“The changes proposed by CMS for FY2008 are the most challenging since the introduction of prospective payment in 1983. In effect, total Medicare reimbursement may stay about the same, but its distribution among medical services may be profoundly different based on a new severity-adjusted DRG system and weighting methodology used to classify patients for payment,” says Paul Shoemaker, president and CEO of American Hospital Directory. “Hospital administrators and finance executives will need to quickly assess how their operating budgets and specific program profitability will be impacted.”
American Hospital Directory (www.ahd.com) has posted a projection of case mix index changes and total inpatient prospective payment system (IPPS) revenue impact for every effected hospital on their free website. Subscribers to their service also have access to projected case mix index changes by medical service. Packaged reports and custom reports are also available to detail changes.
AHD measures detailed impact by using a base year of Medicare claims data and then computing IPPS payment on a patient-by-patient basis under existing and/or proposed payment regulations for various fiscal years. Their analysis of the proposed regulations uses FY2006 Medicare inpatient claims with IPPS payment computed for fiscal years 2006-2008 according to respective regulations. (This is the same data source used by the Medicare program in promulgating the proposed regulations.)
This detailed, bottom-up approach provides levels of detail and reliability that have not been previously available to the private sector. Using such information healthcare finance executives can establish the bottom-line impact on their operations, examine redistributions of revenue among medical service categories, and compare their experience with both peer groups and competitors.
“Having timely access to this information is critically important for understanding operational impact. Even if the bottom line impact is unremarkable for a hospital there may be significant redistributions of Medicare revenue. This is especially true for areas such as cardiovascular surgery where some hospitals may realize significant losses,” according to Leatrice Ford, CEO of ConsultCare Partners. “Many hospitals are preparing their 2008 budgets. This information will be invaluable for those projections.”
The company's new subscription center for hospital administration is available at their Web site at http://www.ahd.com/custom_services.html.
About American Hospital Directory
The American Hospital Directory (www.ahd.com) provides online data about more than 6,000 hospitals in the United States . The extensive database of information is built from both public and private sources including Medicare claims data (MedPAR and OPPS), hospital cost reports, and other files obtained from the federal Centers for Medicare and Medicaid Services (CMS). AHD was founded in 1996 and today serves more than 10,000 visitors per day.
Contact:
Barbara Eilert
(502) 396-2637
Email: beilert@eilertinc.com