4018: May 19, 2010
Health Care Reform Tools for PPS Hospitals
Implementation of federal health reform promises to bring many changes, challenges, and opportunities. The Washington State Hospital Association (WSHA) is developing reports, models, and tools to assist you in preparing for health reform. Look for WSHA's Spotlight on Health Care Reform for the latest information. Some general information is also available on the WSHA website.
WSHA’s Health Information Program has begun to calculate specific impacts of the current proposals on your hospital. The first two pieces of this hospital-specific work are attached.
1. Ten-Year Estimate of Medicare Reductions
The purpose of this model is to provide you with an estimate of some of the payment reductions contained in the recently signed health reform laws.
The model creates hospital-specific and Washington State reports with projected impacts for Medicare hospital payments under the new health reform laws (The Patient Protection and Affordable Care Act of 2010 and the Health Care and Education Affordability Reconciliation Act of 2010). The reports also note details of the various payment provisions and the respective rate years in which they are applicable.
The major Medicare payment provisions affecting hospitals that we model are:
- Reductions to Medicare update factors for
productivity; - Reductions to Medicare update factors in
addition to productivity offsets; - Rural add-on for home health care providers;
- Readmission penalties;
- Medicare disproportionate share hospital (DSH)
reductions; - One-year extension of the Section 508 wage index reclassifications; and
- One-year extension of the outpatient prospective payment system transition
corridor for small rural hospitals and expansion to include all sole community
hospitals.
A few Medicare changes that are scheduled to take effect cannot yet be modeled (e.g., geographic variation, health care acquired conditions, value based purchasing, inpatient payment adjustment for low volume hospitals, and home health cap on outlier payments). This analysis also does not model any Medicaid payment changes for hospice providers, ambulance services, ambulatory surgery centers, laboratories, and durable medical equipment providers or changes to Medicaid DSH payments. Most importantly, it does not address the potential positive impact of increasing numbers of people with health insurance – we hope the tool below will assist you with this.
2. Health Reform Coverage Expansion Payment Estimator
Hospitals are greatly affected by serving uninsured people who cannot get primary care and often arrive at hospital emergency rooms with serious health problems. At the same time, there are people unable to use hospital services because they cannot afford them. The keystone of the health care reform law is insurance coverage for 32 million more Americans.
This tool allows you to enter your own data and estimations of potential growth over time in charity care or uncompensated care. We used the Congressional Budget Office numbers for the percent of the uninsured who will become eligible for Medicaid and private insurance, but these can be changed. With this information and several ratios, the tool will estimate increases in Medicaid and private coverage for a facility.
If you need more information on how these calculations were made or have other questions, please contact me at jimc@wsha.org or (206) 216-2551.