HRC weak recently: Government trying to gum the works again:
Another Rube-Goldberg, complex, billing system that is
trying to make it harder for health care providers to get
paid.We'll see where HRC setttles down,
TA
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quote.bloomberg.com
U.S. Medicare Program May Delay Hospital Pay System (Update1)
By Paul Heldman
Washington, May 22 (Bloomberg) -- The Clinton administration may postpone the July introduction of a new Medicare reimbursement system for hospital outpatient care, a government official said.
The time frame for the new system is ambitious, said Kathleen Buto, deputy director at Medicare's center for health plans and providers. ``We are still planning to implement on July 3, but we are looking at contingency plans'' that could include a delay, she said at a Schwab investor conference.
Investors in the $424-billion-a-year hospital industry could benefit if Medicare, the government health insurance program for 40 million elderly and disabled Americans, waits longer to begin the new reimbursement system.
A delay ``would be good for (hospital) stocks, because it gives (hospital) managers more time to understand a complex system,'' said Patricia Widner, a partner and health analyst at Deerfield Management, an $800 million health-care hedge fund.
The new system is designed to give hospitals an incentive to hold down outpatient treatment costs by paying them a fixed fee for services and procedures. Medicare outpatient care accounts for about 3 percent to 4 percent of hospital industry revenue.
The elderly oppose a postponement because the new reimbursement setup will reduce patients' co-payments for outpatient hospital services.
The hospital industry is seeking a delay, even though the new system is expected to raise overall Medicare spending on hospital outpatient care 4.6 percent. Industry representatives say they are worried that Medicare and hospital billing systems may not be ready to handle the new payment system, leading to billing delays and errors.
``I don't think there is anybody who thinks we're not going to have massive problems'' with the new reimbursement system, said Tom Scully, president of the Federation of American Health Systems, which represents Columbia/HCA Healthcare Corp., Tenet Healthcare Corp. and other publicly traded hospitals.
Don Muse, a health industry consultant, predicted short-term cash-flow problems for hospitals as they move to the new reimbursement setup, saying the transition could be a ``horrendous mess.''
Scully, however, said he didn't believe the publicly traded hospitals would have cash-flow problems with the system.
The 1997 balanced-budget law called for the creation of the new reimbursement system for outpatient hospital care, in which patients are usually discharged without an overnight stay. Medicare currently pays hospitals for the cost of the outpatient visits and spends $11.4 billion a year on hospital outpatient care.
Medicare's new fixed-fee reimbursement for some services won't cover the cost of providing care, though other types of care will be profitable, Muse said. For example, Medicare reimbursement for cancer chemotherapy will be higher when it is administered in doctors' offices than when it's given in hospital outpatient departments, he said, making it likely that treatment will shift to physicians' offices.
Muse predicted that some hospitals will try to increase profitable outpatient services and could see their Medicare outpatient payments rise by more than the 4.6 percent projected by the Clinton administration.
As for publicly traded hospitals, Scully said, ``I don't see any way our guys lose in the long run. The issue is what happens in the next six months.'' |
