1. Lower reimbursements. In October, CMS implemented a 2.9 percent reduction in the marketbasket update for hospitals. CMS said hospitals were overpaid in 2008 and 2009 due to changes in hospital coding practices that do not reflect increases in patients’ severity of illness. But Ms. Scanlon says CMS did not account for the historical trend in case mix growth.
2. GOP takes over in many states. Republicans took over at least 10 governorships and many state legislatures. Pennsylvania, for example, is switching from a Democratic governor and House to a Republican governor and both houses of the legislature. In the changeover, new directors will take over state agencies and there will be a new mood of the legislature. Ms. Scanlon says it is an opportunity to pursue tort reform, which Republicans tend to support.
3. RACs gear up. Medicaid recovery audit contractors, which begin next year to identify overpayments to hospitals in each state, will provide a new source of income to cash-strapped states. Pennsylvania, for example, has a $5 billion-$6 billion structural shortfall coming into next year’s budget. Meanwhile, Medicare RACs are just beginning in Pennsylvania hospitals, so facilities will face a double-whammy. “Hospitals in this state are not financially flush,” Ms. Scanlon says.
4. Hospitals may pay more for reform. “There was an agreement that hospitals would contribute $155 billion in cuts over 10 years to healthcare reform,” Ms. Scanlon says. “Now there are calls to increase that amount.” The chairs of the President’s deficit commission, for example, recently called for cuts in medical education funds, DSH payments and other funds for hospitals. Many of these recommendations are not likely to stand, but they may be recirculated. “The commission has created a laundry list of areas to look for savings that other people can cherry-pick from later,” Ms. Scanlon says.
5. Uncertain fate of reforms. Opponents of the law might fail to repeal the law but they may be able to remove parts of it, such as the mandate to buy health insurance. Without a mandate, hospitals would not get higher patient volumes. “The law has lots of pieces that are interrelated,” Ms. Scanlon says. “If one part is removed, that could be very troublesome.”
6. Hospitals holding off on ACOs. Ms. Scanlon does not know of one hospital in Pennsylvania that has announced plans for an ACO. They are holding off for CMS to issue proposed regulations on ACOs. “To decide to be ACOs, hospitals need assess their core competencies and they cannot do that without knowing what the regulations will be,” she says.
Learn more about the Hospital & Healthsystem Association of Pennsylvania.
