CMS releases requirements for long-term care facilities

At the agencies

Centers for Medicare and Medicaid Services (CMS) Acting Principal Deputy Administrator Patrick Conway discussed the expected advantages of new bundled payment models for Medicare in a recent CMS blog post. The new bundle payment models are, according to Conway, intended to shift Medicare payments away from rewarding quantity and towards rewarding quality care by incentivizing hospitals and clinics to deliver better care to patients at a lower cost. The new proposed bundle payment model will focus on care for heart attacks, heart bypass surgery and hip fracture surgery. Conway also released CMS’ second annual evaluation report for Models 2-4 of the Bundle Payments for Care Improvement initiative in the blog. The report showed potential savings for Medicare in 11 out of 15 clinical episode groups. Additionally, orthopedic surgery under Model 2 showed statistically significant savings, but cardiovascular surgery episodes under Model 2 did not show savings but nevertheless maintained quality of care.

CMS has released a new rule overhauling long-term care facilities and banning mandatory arbitration. It is the first CMS rule regarding nursing homes in 25 years. According to CMS, the new rule is intended to reduce unnecessary hospital readmissions and infections and to improve quality of care and safety measures. The rule requires facility staff to be properly trained to care for residents with dementia to prevent elderly abuse and requires facilities to base staff levels on the health of the residents. Dietitians and therapy providers are granted more responsibility in accordance with state licensing laws under the new rule. Language defining “deliberate” abuse was finalized in the rule aimed to prevent the long-standing problem of abuse and neglect in nursing homes. CMS removed stricter rehabilitation standards from its earlier proposed rule following strong public comment and potential inconsistencies between the then-proposed rule and Medicare’s outpatient payment policies.

A few of the provisions initially proposed by CMS in its prior version of this rule did not make it into the final version. For one, long-term care facilities will not be mandated to provide an in-person evaluation of a patient before ordering an unscheduled transfer of that patient to a hospital. CMS also decided not to include a provision regarding minimum staffing ratio requirements. This provision would have required that long-term care facilities have a pre-determined appropriate ratio of particular types of staff, for example a social worker, on site at the facility at a given time. Besides the numerous comments that CMS received in protest of this proposed policy, the agency also highlighted the complexity of the issue and “concerns about determining the ‘right’ number for any staffing ratio.”

Perhaps the most discussed element of the new rule is the removal of mandatory arbitration agreements that many residents are asked to sign prior to admission to the facility. This element drew criticism from LTC facilities but wide support amongst consumers and patient advocacy groups. LTC facilities are still able to suggest voluntary arbitration when conflicts over quality of care present themselves. The new rule will be implemented in three phrases, with some aspects implemented immediately, the last going into effect three years after the rule effective date.

In the courts

On Monday Sept. 19, a D.C. federal judge ruled against the U.S. Department of Health and Human Services (HHS), refusing to grant the agency more time to reduce the large backlog of Medicare billing appeals from hospitals nationwide. The judge rejected HHS’s request to pause litigation brought by the American Hospital Association. HHS had hoped to have additional time in order to see if administrative and legislative fixes would shrink the backlog, but the ruling concluded that the fixes are not sufficient and thus waiting would prove useless. The backlog stands at roughly a million appeals, which is estimated to decline slightly before increasing to over a million in the absence of congressional action by 2020.

On Tuesday Sept. 27, the U.S. Third Circuit sided with the Federal Trade Commission (FTC) and its analysis of geographic markets in the case of a merger between two Pennsylvanian hospitals. In a 3-0 decision the Third Circuit ordered Penn State Hershey Medical Center and Pinnacle Health System to temporarily halt their merger amid anti-trust concerns. The FTC has argued that the merger would raise prices and reduce competition as they argue the hospitals would have 64 percent of the market share in south-central Pennsylvania and 76 percent in the Harrisburg region. In May, a U.S. District judge ruled in favor of the hospitals and in his opinion wrote that the FTC had defined the systems’ geographic market too narrowly.

For more information on this topic, or to learn how Baker Tilly healthcare specialists can help, contact our team.