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Medicare’s Readmission Penalties Hit New High



The federal government’s readmission penalties on hospitals will reach a new high as Medicare withholds more than half a billion dollars in payments over the next year, records released Tuesday show.

The government will punish more than half of the nation’s hospitals — a total of 2,597 — having more patients than expected return within a month. While that is about the same number penalized last year, the average penalty will increase by a fifth, according to a Kaiser Health News analysis.

The new penalties, which take effect in October, are based on the rehospitalization rate for patients with six common conditions. Since the Hospital Readmissions Reduction Program began in October 2012, national readmission rates have dropped as many hospitals pay more attention to how patients fare after their release.

 

The penalties are the subject of a prolonged debate about whether the government should consider the special challenges faced by hospitals that treat large numbers of low-income people. Those patients can have more trouble recuperating, sometimes because they can’t afford their medications or lack social support to follow physician instructions, such as reducing the amount of salt that heart failure patients consume. The Centers for Medicare & Medicaid Services says those hospitals should not be held to a different standard.

Medicare said the penalties are expected to total $528 million, about $108 million more than last year, because of changes in how readmissions are measured.

Medicare examined these conditions: heart attacks, heart failure, pneumonia, chronic lung disease, hip and knee replacements and — for the first time this year — coronary artery bypass graft surgery.

The fines are based on Medicare patients who left the hospital from July 2012 through June 2015. For each hospital, the government calculated how many readmissions it expected, given national rates and the health of each hospital’s patients. Hospitals with more unplanned readmissions than expected will receive a reduction in each Medicare case reimbursement for the upcoming fiscal year that runs from Oct. 1 through September 2017.

The payment cuts apply to all Medicare patients, not just those with one of the six conditions Medicare measured. The maximum reduction for any hospital is 3 percent, and it does not affect special Medicare payments for hospitals that treat large numbers of low-income patients or train residents. Forty-nine hospitals received the maximum fine. The average penalty was 0.73 percent of each Medicare payment, up from 0.61 percent last year and higher than in any other year, according to the KHN analysis.

Under the Affordable Care Act, which created the penalties, a variety of hospitals are excluded, including those serving veterans, children and psychiatric patients. Maryland hospitals are exempted as well because Congress has given that state extra leeway in how it distributes Medicare money. Critical access hospitals, which Medicare also pays differently because they are the only hospitals in their areas, are also exempt.

As a result, more than 1,400 hospitals were automatically exempt from the penalties. Other hospitals did not have enough cases for Medicare to evaluate accurately and were not penalized.  Of the hospitals that Medicare did evaluate, four out of five were penalized.

The KHN analysis found that 1,621 hospitals have been penalized in each of the five years of the program.

Kaiser Health News staff writer Sydney Lupkin contributed to this report.

KHN’s coverage of late life and geriatric care is supported by The John A. Hartford Foundation.

 

OnDemand upgrade



PowerHealth OnDemand upgraded its users to the new platform. The features of the upgrade are:

Enhanced Navigation and OnDemand Report Performance

    • Faster navigation speeds
    • Faster report load times
    • Improved performance to report drills to details

Introduction of the New OnDemand Support Center

    •  Complete OnDemand Knowledge base featuring:
      • Advanced Search capabilities
      • Updated report help and support documentation
      • How-to training videos for self service support
    • Automated issue tracking system to provide quick and consistent turnaround
    • Personalized view of “My Cases” to help manage track your support and new content requests

Standard and Custom report enhancements – Please contact OnDemand Client Support for more information about the new reporting options and information on adding these solutions to your subscription!

    • New and improved Emergency Department metrics to support your hospital operations and Lean initiatives
    • New and improved enhancements to our OR solutions
    • New Clinical Performance reporting and dashboards to support initiatives for quality outcomes

Internet Explorer v7,8,9 performance improvements – Though we have made some fixes for older versions of IE users, we recommend using an updated browser when using OnDemand to experience maximum performance.

 

OnDemand Release



At PowerHealth OnDemand, customer success is our #1 priority. Our goal is to deliver optimal value in each of our software releases for our customers and their teams. We are excited to introduce next release.

What’s coming?

Our engineering and design teams have been up late creating a new and improved user experience.
Easy User Navigation: All users from Administrators to Power Users/Analysts to infrequent users from departments will have access to OnDemand’s newly designed and intuitive and organized user interface.
Mobile Access: This release will feature a new way to stay attached to critical OnDemand information answers using a desktop, laptop, iPad or other tablets. Now users from analysts to department management to executives will be able to more easily view summary level answers through our new OnDemand Watchlist Key Performance Indicators, new Dashboards, Charts, and Analysis Grids. Mobile devices that are “touch-compatible” will now have their OnDemand Answers at their fingertips.

Expanded OnDemand Analytic Reporting

Based upon our OnDemand Community recommendations, we’ve continued to enhance and expand our product line to meet user needs. High level enhancements include updates to the following:

Financial Performance Analytics now includes areas such as:

1. GL Budget/Variance by organization and individual department, with integration to items such as Labor and Materials Management
2. GL Department Summary
3. GL PowerGrid for Ad hoc Reporting
4. Interactive Income Statement to view and manage all department details

Clinical Operations Performance Analytics have been expanded and organized to enable users to better visualize and manage bottlenecks to patient throughput in areas from “Door to Discharge”. OnDemand now includes analytics reporting to manage critical areas such as Patient Census, Volumes, OR throughput, and Emergency Department , LABS, and Radiology throughput.

Quality Performance Analytics have also been enhanced to enable users to view summary and detailed level answers related to better manage quality outcomes by procedure, readmissions by any variable, ICD performance, patient satisfaction, and more.

OnDemand Support Center: We have revamped our Help & Support system to better accommodate our users from Administrators to Power to Casual users. More to come on this soon!

Custom Reports to help drive decisions. Users who need additional help generating Answers will find a new OnDemand Reporting Service available to their organization. Users will have easy access to submitting a form our PowerHealth team when they require unique or complex reports that require our services.

Lean Management System – All OnDemand subscribers now have access to our newly released Lean management solution called Kaizen OnDemand. This system is tailored to help your organization better manage Lean initiatives through an easy to access online system for ANY and ALL staff members. Contact us today to find out more!

OnDemand Go-Live specifics

• The scheduled time for the OnDemand upgrade will occur on Monday, July 22nd and order to minimize user downtime, the upgrade will occur on a weekend night before our scheduled go-live.
• There will be a brief upgrade window when we will perform this service. During the upgrade window, users will receive a message stating that the service is momentarily unavailable. Once the service is available, organizations will be on the OnDemand 5.0 release.

Resources

We are providing four 30-minute training sessions to educate OnDemand users on the new release features/enhancements. Please refer to your “5.0 release email” for a schedule of trainings.

 

B.I. a focal point for hospital systems taking part in HFMA’s “Value Journey”



FREEPORT, ME – Participation in a national hospital project has shown one small Maine hospital the importance of business intelligence tools.

The 65-bed Franklin Memorial Hospital, a member of Franklin Community Health Network (FCHN), is taking part in Value Journey, a project organized by the Healthcare Financial Management Association (HFMA). The project sets out to identify common challenges that all healthcare providers are facing as they adapt to a value-based business model, such as the fragmentation of care delivery, as well as common capabilities, strategies and tactics that will help them make the change. Thirty-five hospital systems across the country are taking part.

Franklin Memorial has chosen to focus on one facet of the Value Journey project – using business intelligence tools to drive clinical and financial improvement at the hospital said Wayne Bennett, the chief financial officer of FCHN, during a one-day workshop sponsored by the Maine chapter of HFMA.

The hospital began by focusing on a combination of two issues: data warehousing and data integration technologies and desktop query, reporting and analysis tools for self-service access to information, said Bennett.

“Putting the two together – data warehousing and desktop query – allows us to really understand this,” said Bennett. “Relationships of data drive the business intelligence, and you can stop working off of anecdotal information and focus on straight facts. Really, data intelligence is an evolution.”

The evolution of business intelligence maturity, explained Bennett, begins with production reporting, moves to spreadmarts and then eventually moves towards data marts and data warehouses, where data is pooled and reports are run off of a common database, rather than separated databases from each department of the hospital.

“We are at the data warehousing period of the evolution, where we are not only working off of one database, but we are also delivering business intelligence dashboards of information and putting more energy on analyzing information, rather than gathering information,” said Bennett.

Bennett explained that the hospital partnered with PowerHealth Solutions, which specializes in hospital data systems for patient costing and billing, to work on getting their hospital data out of specific systems in the organization and into one data warehouse.

The evolution does not stop at data warehousing though, explained Bennett. From data warehousing, organizations can then make the leap to enterprise data warehousing, where “people begin studying the data and working on improving costs and solving problems,” he said.

From here, organizations then move towards the “ultimate evolution” period of analytic services where every smaller system is driven by an analytic database, he said.

“Wherever your organization is along this evolution spectrum, the good news is you can always try to move to the next level,” he said. “The key is to keep going rather than try to perfect everything at once.”

B.I. a focal point for hospital systems taking part in HFMA’s “Value Journey”



HealthCare Finance News I April 01, 2013 I Kelsey Brimmer, Associate Editor

FREEPORT, ME – Participation in a national hospital project has shown one small Maine hospital the importance of business intelligence tools.

The 65-bed Franklin Memorial Hospital, a member of Franklin Community Health Network (FCHN), is taking part in Value Journey, a project organized by the Healthcare Financial Management Association (HFMA). The project sets out to identify common challenges that all healthcare providers are facing as they adapt to a value-based business model, such as the fragmentation of care delivery, as well as common capabilities, strategies and tactics that will help them make the change. Thirty-five hospital systems across the country are taking part.

READ MORE…

 

Massachusetts Hospital Tansformation Through Technology



Growth Strategies | September 27, 2012 | CFO.com | David Rosenbaum

Why is a finance director involved in what seems to be operational minutia? Because operations drives finance.

But all hospitals share the same problem: an aging population.

“With an older population,” says Josh Gray, managing director of the financial leadership council of The Advisory Board Company, a health care and educational consultancy, “you get a higher proportion of medical as opposed to surgical care. Older people have fewer surgeries, and medical care is reimbursed more poorly than surgery. This places incredible pressure on hospital margins while costs are increasing.” (And they are. According to a recent New York Timesinvestigation, Medicare reimbursements to hospitals were $1 billion more in 2010 than five years earlier.)

Hospital margins are already grocery-store thin. At 2%, Jordan Hospital’s is relatively robust, with a total 2011 surplus of a little over $4 million on net patient service revenues of $194 million. But Jordan Hospital is part of the Jordan Health System, which also includes 50-doctor Jordan Physician Associates, Cranberry Hospice, and a wellness center. As a whole, the Jordan Health System’s margin was under .5%, and its surplus was $900,000.

And as hospital revenue streams shift from fee-for-service to what the Advisory Board’s Executive Director Zachery Stillerman calls “risk-based services,” CFOs must develop “different business processes and tracking mechanisms.” It is, says Stillerman, “a huge challenge.”

Beyond Fee-for-service
Instead of insurers paying providers on a transactional, fee-for-service basis, under the ACA their payments increasingly will be based on the care of individuals, a process-based system.

Jordan, for example, became one of 27 national Medicare Accountable Care Organization in April 2012. That means, says Robbins, “we have contracts with a handful of insurers to manage the care of buckets of patients. We have a budget for these patients. For example, we have a contract with Tufts Health Care for the hospital care of 800 enrolled Medicare beneficiaries. Tufts comes up with a budget for their care. We have to manage within that budget.”

Under the terms of the new Medicare Shared Savings Plan, if Jordan spends less on the Medicare-eligible recipients in its ACO (determined by a defined base year, with the additional requirement to report on 30 patient quality indicators that will be used to determine future improvements), it keeps a percentage of the savings. For the first three years, if the hospital exceeds the base year level, it will continue to be reimbursed at traditional Medicare rates. After that, it will be “at risk,” as future reimbursements, says Robbins, “will be contingent upon the achievement of improved patient quality outcomes as compared to the base year.”

In order to reduce that risk, Robbins needs to know “what services are being offered to patients, what’s being used to excess, where physicians are operating out of bounds of reasonable utilization rates.” That is, she needs to get operational.

To do that, she needs the cooperation of Jordan’s physicians, and a single view of the truth, a single view of the patient.

Transformation through Technology
To help get that single view (or something approaching it), in 2010 Robbins implemented PowerHealth OnDemand’s new business intelligence product. PowerHealth OnDemand is a software-as-a-service analytics and business performance system, deployed at Jordan Hospital since 2007, that allows hospitals to pull information from their legacy systems and slice and dice it – no easy task.

“The health-care information system world is made up of many different modules,” says PowerHealth OnDemand chief executive officer Paul Evans. “There are distinct silos, and bringing it into one source is a huge problem. Furthermore, hospitals have to combine third-party systems – clinical, physician management, insurance systems – with revenues and costs and electronic medical records” to get a single view of the patient.

Once that single view is achieved, it can help hospital finance executives figure out profitability and margins. “Let’s take orthopedics,” Evans says. “Having a view of what the costs are for implants in each procedure, plus the labor (nurses, physicians, and staff), allows you to know how much money you’re making or losing on a knee transplant and whether that’s a business you should be investing in.”

 

Massachusetts Hospital Tansformation Through Technology



Growth Strategies | September 27, 2012 | CFO.com | David Rosenbaum

Why is a finance director involved in what seems to be operational minutia? Because operations drives finance.

But all hospitals share the same problem: an aging population.

“With an older population,” says Josh Gray, managing director of the financial leadership council of The Advisory Board Company, a health care and educational consultancy, “you get a higher proportion of medical as opposed to surgical care. Older people have fewer surgeries, and medical care is reimbursed more poorly than surgery. This places incredible pressure on hospital margins while costs are increasing.” (And they are. According to a recent New York Timesinvestigation, Medicare reimbursements to hospitals were $1 billion more in 2010 than five years earlier.)

Hospital margins are already grocery-store thin. At 2%,  Massachusetts’ Jordan Community Hospital’s is relatively robust, with a total 2011 surplus of a little over $4 million on net patient service revenues of $194 million. But Jordan Hospital is part of the Jordan Health System, which also includes 50-doctor Jordan Physician Associates, Cranberry Hospice, and a wellness center. As a whole, the Jordan Health System’s margin was under .5%, and its surplus was $900,000.

READ MORE…

 

Readmission penalties to hit two-thirds of hospitals



September 10, 2012 Fierce Healthcare | By Karen Cheung-Larivee

Two-thirds of hospitals will see penalties in the coming weeks for higher-than-average readmissions, according to the Medicare Payment Advisory Commission (MedPAC).

Starting Oct. 1, hospitals will face up to a 1 percent penalty in 2013 for readmissions related to acute myocardial infarction, heart failure and pneumonia. In 2014, the penalty will go up to 2 percent and up to 3 percent in 2015, with four more conditions added to the list.

Sixty-seven percent of hospitals will face a penalty, averaging $125,000. A third (33 percent) will have no penalty, for instance, because they do not have enough cases. In aggregate, penalties will equal 0.24 percent of all inpatient payments in 2013.

READ MORE…

 

Readmission penalties to hit two-thirds of hospitals



September 10, 2012 Firece Healthcare | By Karen Cheung-Larivee

Two-thirds of hospitals will see penalties in the coming weeks for higher-than-average readmissions, according to the Medicare Payment Advisory Commission (MedPAC).

Starting Oct. 1, hospitals will face up to a 1 percent penalty in 2013 for readmissions related to acute myocardial infarction, heart failure and pneumonia. In 2014, the penalty will go up to 2 percent and up to 3 percent in 2015, with four more conditions added to the list.

Sixty-seven percent of hospitals will face a penalty, averaging $125,000. A third (33 percent) will have no penalty, for instance, because they do not have enough cases. In aggregate, penalties will equal 0.24 percent of all inpatient payments in 2013.

The commission, which recommended the program in 2008, met Friday to discuss refining the hospital readmissions reduction program. Although it continues to support hospitals curbing readmissions, MedPAC called out some concerns with the program in the long-term.

As the American Hospital Association has noted before, some readmissions are not preventable and other readmissions are planned. MedPAC suggested shifting all-condition measures and including exceptions for planned and unrelated readmissions.

Another concern is that readmission penalties may not account for socio-economic factors. Hospitals that have the largest share of low-income patients are 2.7 times as likely to have high readmission rates, Kaiser Health News previously reported.

MedPAC also expressed concerns about the math related to the penalties in the long run. For instance, the penalty amount increases as the industry presumably reduces readmissions. Therefore, MedPAC sees a fixed penalty multiplier or using all-condition readmissions as possible solutions.

Using all-condition readmissions also could help solve random variations in hospitals with a small number of cases in distinguishing true improvement performance.

MedPAC said it is, indeed, feasible for hospitals to cut down on readmissions by identifying at-risk populations, reducing hospital complications and improving communication with providers outside the hospital. Hospitals also can improve care transitions by providing patient education and self-management tools, scheduling follow-up visits and reconciling medication before discharge, and calling or visiting patients after discharge.

Health IT solutions to reduce readmissions



September 20, 2012 FireceHealthcare | By Karen Cheung-Larivee

In an effort to curb readmissions, hospitals should invest in health technology, including medical records, information sharing and telemonitoring, Jonathan H. Burroughs, president and CEO of The Burroughs Healthcare Consulting Network, wrote in Hospital ImpactOf the 5 million hospital readmissions in the United States, more than two-thirds are preventable, amounting to an annual cost of $25 billion, Burroughs wrote last week. He suggested hospitals and other providers horizontally integrate electronic health records with patient personal healthcare records. “Healthcare is the last industry to digitalize.” Nevertheless, immediate access to shared clinical information between inpatient and ambulatory settings will help combat the fragmented communication.

Burroughs also noted that nurse navigators can influence unnecessary readmissions through centralized patient registers. Once patients leave the hospital, remote monitoring also can detect clinically significant changes in vital signs, blood sugar and other health screens. “The best thing your organization can do is to invest in those initiatives that provide a good return on investment by reducing cost and improving outcomes/service, particularly in light of the reimbursement changes yet to come.” 

 

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