The Conversation – Fall 2014


Readmissions penalties rose as of Oct. 1, 2014

An August 25 story in McKnight’s Long-Term Care News reminded readers that in the third phase of the CMS Hospital Readmissions Reduction Program (HRRP), readmission penalties are rising to 3% of Medicare reimbursements as of October 1. The HRRP, which penalizes hospitals with excessive readmissions for specific diagnostic groups, set a first-year (2013) penalty of 1% maximum reduction of reimbursements. In year two (fiscal year 2014), penalties rose to 2%. This year (FY 2015), the maximum penalty goes up to 3% and expands the conditions for which readmissions can be penalized, now including chronic lung disease and elective hip and knee replacements.

Though the penalties currently affect acute providers only, post-acute providers are clearly a key factor in preventing readmissions. As one industry expert notes, “Although not all hospital readmissions are preventable, many could be avoided with improved post-discharge planning and care coordination.” The growing emphasis on preventing hospital readmissions represents a valuable opportunity for post-acute providers to strengthen collaborations with their acute referral sources to improve care transition processes.

Bundled Medicare payments – a growing reality

“Interest surges in Medicare bundled-payment initiative,” says a July 31 story in Modern Healthcare. According to the article, CMS is set to add about 4,100 providers to about 2,400 “already exploring the possible use of bundled payments for some or all of four dozen medical conditions and procedures, such as diabetes, joint replacements and pacemaker implants.” Providers apply to become candidates and move through a data preparation phase before taking on the model.

With “bundled payments,” health care providers (such as hospitals and physicians) are reimbursed “on the basis of expected costs for clinically-defined episodes of care.” Bundled payments are intended to avoid the extremes of fee-for-service reimbursement (providers paid for each service rendered to a patient – the current norm) and capitation (providers paid a “lump sum” per patient regardless of how many services the patient receives). Bundled payments became part of in the Affordable Care Act as a strategy for reducing health care costs and were launched in January 2013. Read the CMS fact sheet about the program here.

CWF to HETS – still coming!

For several months now, CMS has advised providers about the upcoming termination of Common Working File (CWF) eligibility inquiries, with all Part A providers mandated to move to the HIPAA Eligibility Transaction System (HETS). ABILITY is in continual contact with CMS representatives – rest assured, the move will be coming! CMS is committed to delivering a smooth transition when the switch to HETS occurs.

If you do not have HETS-ready eligibility verification services, take a look at the ABILITY HETS information page and consider the advantages of making the transition today. By implementing improved technology and better workflow, ABILITY customers have gained new efficiencies that quickly impact their bottom line. Or, attend this free webinar to learn how to prepare for the CWF to HETS transition.

ABILITY | EASE now serving over 10,000 providers

Over 10,000 hospitals, skilled nursing facilities, home healthcare, and hospice providers across the United States are now using ABILITY | EASE to manage their Medicare reimbursement activities. Wisteria Gardens, a skilled nursing facility in Mississippi, saw a dramatic improvement in their revenue management when they implemented ABILITY | EASE. Read more about Wisteria Gardens and their success, or sign up for a free webinar to learn more about this tool that makes your Medicare billing management easier.

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