Hospital Value-Based Purchasing Rules

CMS issued a final rule implementing the PPACA Hospital Value-Based Purchasing (VBP) program which is intended to reward hospitals for providing high quality, safe care for patients. CMS said it will distribute about $850 million in FY 2013 to hospitals based on their overall performance on a set of quality measures that have been linked to improved clinical processes of care and patient satisfaction.

MACPAC Recommendations Implemented

CMS issued a proposed regulation providing guidance for states that may be considering reductions in Medicaid provider payments as a way to achieve state budget goals. The rule proposes that states conduct periodic reviews of the data for covered services using an analytic framework which reflects enrollee needs, the availability of care and providers and the utilization of services. The rule reflects recommendations previously made by the Medicaid and CHIP Payment and Access Commission (MACPAC).

Boost for CMMI by AMA Past President

The Administration announced that Dr. Nancy Nielsen, a past president of the American Medical Association, will become a senior adviser to the CMS Center for Medicare and Medicaid Innovation established under the PPACA. Republicans remain skeptical of the center and can be expected to give close congressional oversight on the agency’s activities.

Single-Payer on the Way in Vermont

Last week the Vermont senate voted to approve legislation that would create a universal single payer health care system called Green Mountain Care. If a conference committee finalizes the legislation, the system would go into effect pursuant to a waiver issued from HHS.

SGR on the Block

The House-passed FY 2012 budget plan anticipates a revision of the Medicare physician payment “sustainable growth rate” system, but leaves the specific changes to committees of jurisdiction to formulate. In a letter to the House E&C Committee, the AMA said that the payment system “should involve transitioning to a new generation of payment models that reward physicians and hospitals for keeping patients healthy, managing chronic conditions in a way that avoids hospitalizations, and, when acute care episodes occur, delivering high quality care with efficient use of resources….” The AMA also suggested that doctors should receive payment updates commensurate with the growth in medical practice costs during any transition period.

SNF Payment Options

CMS issued another proposed rule that provides two options for setting FY 2012 payment rates for skilled nursing facilities. The first would provide an increase of $530 million, or 1.5%, derived from applying the 2012 market basket index of 2.7% and reducing it by 1.2% to account for greater efficiencies in operating nursing homes. The second option would adjust for an unforeseen increase in nursing home payments during FY 2011 and restore overall payments to their intended levels on a prospective basis, thus reducing payments to SNF’s by 11%, or $3.94 billion less than payments in 2011.

IRF Payments to Increase

CMS issued a proposed rule that would increase payments to inpatient rehabilitation facilities under the prospective payment system by about $120 million in FY 2012. The rule would also implement provisions of the PPACA which establishes a new quality reporting program providing for a 2% reduction in the annual  increase factor beginning in 2014 for failure to report quality data to HHS.

MRI Coverage for Patients with Implanted Pacemakers

CMS announced that it is reversing a previous decision and proposing to cover magnetic resonance imaging (MRI) for patients with implanted pacemakers, so long as the pacemakers are used according
to FDA approved labeling in an MRI environment.

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