Gundersen Health System Issues Public Comment on Centers for Medicare & Medicaid Services Proposed Rule
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On behalf of
In this letter, we address the continued implementation of the Medicaid and Medicare quality reporting programs. Also, we will provide feedback on the annual IPPS payment update, including the proposed changes to calculating Medicare Disproportionate Share Hospitals program adjustments and changes to the hospital wage index. Finally, we will discuss CMS's proposals regarding MS-DRG price transparency and Medicare bad debt policy.
We are pleased to offer comments for the FY 2021 Inpatient Prospective Payment System (IPPS) proposed rule illustrated and detailed in the following sections.
Proposed FY 2021 IPPS Revisions of Payment Policies and Rates
CMS has proposed numerous payment policy and rate changes for FY 2021. These changes are being proposed as part of the annual update applicable with statutory provisions and include increasing the operating payment by 2.5%.
DSH Payment Adjustment and Additional Payment for Uncompensated Care.
Under the
For FY 2021, CMS estimates the total Medicare DSH payments will be
In addition to the updated DSH payment adjustment, CMS is proposing to use S-10 data from the FY 2017 cost report, which the agency has recently audited. CMS has proposed to use the most recent available single year of audited Worksheet S-10 data to distribute uncompensated care payments in all subsequent years for all eligible hospitals except
Comments:
At Gundersen, we have numerous concerns regarding the reliability of using the S-10 worksheet data to calculate a hospital's share of uncompensated care. As we detailed in FY 2020 comment letter, we illustrated our concerns raised regarding the alternative proposal to use FY 2017 cost report data. The continued decrease if funding is also a concern as the unemployment rate has soared during the pandemic and the number of uninsured has increased.
We are very concerned about the accuracy of using data from the worksheet S-10 for purposes of calculating DSH payments. There is greater variation when hospitals submit data using this form. Inaccurate submissions can penalize hospitals that provide correct data. Auditing continues to be sporadic and produces variable results. We urge the agency to take additional steps to ensure the accuracy, consistency, and completeness of these data before their use.
CMS has changed rules regarding S-10 on numerous occasions and this does not provide a clear picture of what CMS would ask for or how it would be measured. We ask for steps to be taken to ensure consistency amongst hospitals in data submissions and a better plan to use the most reliable and accurate data rather than partial or unverified S-10 data for DSH calculations. We have run analyses from the current methodology to the proposed method and found wide variation between the years required for submission.
Concerning CMS's request for feedback on adjusting the data itself for DHS payments, we have numerous concerns with the interpretation of the data used in the S-10 worksheet. Gundersen maintains that CMS continues the current transition to 2014, 2015, and 2016 data use. This is the best course of action as multiple yearly sources would give a better median for the data.
The alternative presented of using 2017 S-10 data will result in disparities as the audit sample was small as well as the audit program interpretation was not consistent across organizations. Also, using the proposed 2015 S-10 data would be remiss as the interpretation of the data has changed from 2015 to 2017. This would not be an accurate representation of the current status of the S-10 report or its results. While 2017 data would make more sense if CMS is adamant about using only one year of data as it is the most up-to-date, we maintain our recommendation that CMS continue with the current data to encourage consistency.
Addressing Wage Index Disparities
The area wage index adjusts payments to reflect differences in labor costs across geographic areas. CMS proposes to continue the low-wage-index hospital policy as established in the FY 2020 final rule. Specifically, for hospitals with a wage index value below the 25th percentile, the agency would continue to increase the hospital's wage index by half the difference between the otherwise applicable wage index value for that hospital and the 25th percentile wage index value for all hospitals. As it has done previously, the agency would reduce the FY 2021 standardized amount for all hospitals to make this policy budget neutral.
Comments:
While we appreciate CMS's commitment to addressing the disparities between high and low wage index hospitals, we are disappointed that CMS is continuing the reduction in reimbursement for hospitals above the 75th percentile.An increase in wage index for hospitals below the 25th percentile would assist in decreasing the discrepancies in the wage index and is something we do support. However, decreasing payments for those in the top 75th percentile would negate the proposed adjustment and cause further issues for those hospitals. By cutting payments to other hospitals especially when Medicare payments rates are lower than the cost of care is irrational. We believe the CMS can provide much-needed relief for lower-wage index hospitals without penalizing high-wage areas.
Medicare Bad Debt Policy:
CMS proposes to codify retroactively effective for cost reporting periods beginning before, on, or after the effective date of the rule, CMS's purported prior interpretation of many of the bad debt provisions are currently contained in the Provider Reimbursement Manual. The proposed rule would retroactively codify the following provisions:
1. the presumption of noncollectibility after 120 days of reasonable collection efforts (but provide that the 120-day period would restart if any payments are received on the account);
2. the requirement that providers use similar collection efforts for Medicare and nonMedicare patients, including a provision that amounts remaining at a collection agency, for whatever reason, may not be claimed for Medicare bad debt reimbursement;
3. that in making a determination of indigency, providers must evaluate a patient's "total resources," including, but not limited to, an analysis of the patient's assets, liabilities, income, expenses, and any extenuating circumstances; and
4. the requirement that for dual-eligible beneficiaries, the provider submits a bill to the State Medicaid program and furnish a Medicaid remittance advice to the contractor.
In addition, the proposed rule would prospectively provide that reasonable collection efforts require the issuance of a bill on or before 120 days after the later of (1) the date of the Medicare remittance advice or (2) the date of the remittance advice from the beneficiary's secondary payer. Finally, the proposed rule would provide for certain changes in accounting for Medicare bad debt, based on recent changes in1 national accounting standards.
Comments:
Gundersen strongly opposes making proposals effective retroactively. This proposal does not merely codify existing policy but makes changes to which hospitals may not have been complying in the past as the PRM is considered guidance and is not mandatory. Efforts to backtrack and change accounting processes for Medicare bad debt reporting for prior periods is not consistent with the Administration's efforts to minimize burden on providers. This proposed change will not only increase the burden on some hospitals that must comply with Federal and state requirements related to financial assistance but also the determination of eligibility to maintain their tax-exempt status.
By codifying these regulations as retrospective, CMS has circumvented notice and comment period for prior rulemaking periods. CMS' proposal to make these bad debt policies retroactive is also in conflict as detailed in a memorandum dated
The
The codification of this part of the manual is not suggestive (i.e., does not use "should") about what the provider must do, but is directly requiring that "the provider must do all of the following" which includes a list of five actions. Even after indigence is determined, the provider must conclude that "there has been no improvement in the beneficiary's financial status" before the bad debt may be deemed uncollectible without applying a collection effort. This increases the burden to providers who now must comply with the requirements of their FAP, and then for Medicare purposes follow five steps and even then, cannot determine that an unpaid amount is uncollectible without looking again at the beneficiary's financial status to see if it has changed. CMS should allow hospitals that must comply with 501(r) to use the criteria that they have established to determine a patient's indigence and whether a debt can be deemed uncollectible.
Most tax-exempt hospitals already must comply with requirements imposed by section 501(r) of the Affordable Care Act to retain their Federal exemption under section 501(c)(3) of the tax code. In proposing revisions to portions of the bad debt policy, and codification of other portions that are in the PRM, Chapter 3, CMS is imposing an entirely new set of requirements, not putting into regulation long-standing policy. Included in the PRM is guidance that the provider "should take into account a patient's total resources" and also that the provider "should take into account any extenuating circumstances." Manual guidance is not mandatory, therefore the promotion of manual guidance to regulatory requirements is establishing a substantive legal standard where there was not one previously.
This proposed change impacts a multitude of financial processes for hospitals. For Gundersen specifically, as a multi-state system, there would be an exceptional administrative burden to not only change to a new system but collect bad debt with different regulations from multiple states.
Several states do not allow assets to be used to determine indigency. This is in addition to other grant programs that would be impacted as well such as HRSA - NHSC for physicians in a health care shortage area. Finally, it is important to note that leaving codifying of the billing policy up to the facility to determine what Medicaid is obligated to pay even if it is not clear on the remit is incredibly burdensome in and of itself. However, then additionally requiring the facility to reduce the bad debt by the codified amount does not give the facility recourse against the state to make such a claim. This is especially true for facilities that deal with states that run out of money early, such as
We would like to note that if a facility has to spend a significant amount of time chasing charity claims, more money is likely to be spent than the hospital will receive. For example, within the 120 day collection period, if a patient pays a hospital or the collection agency
As CMS is looking to "clarify" regulations, they fail to take into account the auditing process.
Auditors apply existing regulations to everything they are auditing and do not always focus on what rules were in place at the time of reporting. When these rule change, as CMS is proposing, hospitals can get unfairly noted for noncompliance during an audit. As this would also be a retrospective change, not only are all open cost reports (back to 2015) be opened up, it also opens up any cost report settled within the last 3 years (2013 - 2014). This would be a significant financial burden to staff as well as a loss of reimbursement. Auditors could go back through hospital's financial data and pull another sample of bad debts that would then have to have all of the new documentation gathered and sent. This many result in more questions and ultimately denial of claims.
We have additional concerns with this proposed regulation that we implore CMS to consider and address in the following section:
1. The proposed requirement to confirm that there is no other source of payment available:
a. What documentation must providers maintain to show compliance with this requirement?
b. What if a guardian has control of the SSI check instead of the patient?
2. CMS is stating that the definition of bad debt is a price concession. Bad debt is defined as an expense when the facility expects the full payment, but the patient is unwilling or unable to pay. Before this proposed rule, the new Accounting Standards Update was taken into effect on
a. Will implicit price concessions (bad debts are written off as contractual) be allowed on the upcoming cost report? Facilities cannot write off bad debt to a "bad debt expense account" if it is written off to a contract revenue account.
b. If it is to be treated as contractual, CMS needs to detail this on the final rule.
c. If this is finalized the facility will have to choose between generally accepted accounting principles and claiming the bad debt.
3. What documentation is needed from the state to prove that the patient was eligible for the date of service?
a. From our interpretation of the regulation, remittance advice would not be considered proof of indigency. If this is the case, what other documentation in addition to the RA would be necessary?
If CMS is adamant about inserting this new proposal retroactively, there needs to be consistent interpretation and treatment of hospitals by MACs.We advise CMS to develop further guidance for defined rules for facilities to have something to aim for and meet, otherwise it will be arbitrary and left up to the MACs. If that occurs, hospitals will have even more inconsistent application of regulation leading to an increase of appeals for bad debt. We have pointed out numerous concerns and questions in the section regarding CMS's proposed change. Ultimately, we do not support this proposed rule and ask CMS to listen to stakeholders regarding the impact it will have.
MS-DRG Data Collection (Price Transparency)
CMS proposes to require hospitals to report the median payer-specific negotiated rates for inpatient services, by MS-DRG, for Medicare Advantage organizations and third-party payers on the Medicare cost report. The agency notes that hospitals will be required to make this information public following the Hospital Price Transparency Final Rule. CMS is considering incorporating this information into the methodology for calculating inpatient PPS MS-DRG relative weights, beginning FY 2024.
Comments:
At Gundersen, our triple-aim strategic plan aims to ease the financial burden of care delivery. We are committed to complying with cost and price transparency policies and providing good faith estimates to patients on request. We are proud to have participated in ongoing price transparency programs at the state level where patients already have access to information on common medical procedures performed in our hospitals. In principle, price transparency policies should be:
a) Consistent and clear in their definition (baseline charges, an average of insurance rates, Medicare cost-to-charge ratios, etc.)
b) Apply across insurers and healthcare providers as to defining price as it can greatly depend on the type and extent of non-public contract negotiations between private enterprises.
c) Recognize existing state-level programs for purposes of compliance, such as databases of common medical procedures.
However, we are concerned about the sole burden placed on hospitals and providers regarding price and cost. Much depends on a patients' insurance status, including specific carrier, deductibles, co-insurance, co-pays, and other cost-sharing policies that are inaccessible to healthcare providers. Price transparency efforts must involve health insurers, which are often more appropriately equipped with a patient's specific benefits and deductible levels to determine the estimated out-of-pocket costs for a procedure, hospitalization, or outpatient/clinical service.
Lastly, while hospitals and health systems are dealing with the impacts of COVID-19, we ask CMS to revisit such proposals when hospitals are more financially stable. While we remain committed to providing pricing estimates, it is vital policies are applied to health insurers and managed care organizations so that patients are empowered and best informed on estimated costs of their care.
Medicare and Medicaid Promoting Interoperability (PI) Programs
CMS proposes to continue several policies including a continuous 90-day reporting period for CY 2022 and retaining the Query of Prescription Drug Monitoring Program measure as an optional measure worth five bonus points in CY 2021.
Comments:
We applaud CMS for retaining the Query of Prescription Drug Monitoring Program as an optional measure for CY 2021. There has been past confusion on the measure, however as CMS has worked to provide further clarification, we feel confident about its application in CY 2021.
Hospital Inpatient Quality Reporting (IQR) Program
The Hospital IQR Program is a pay-for-reporting quality program that reduces payment to hospitals that fail to meet program requirements. The IQR has historically been the clearinghouse for measures extracted and applied to performance programs, including Hospital Readmission Reduction, Hospital-Acquired Conditions, and Value-Based Purchasing Program.
CMS proposed additional changes to streamline the validation process under the Hospital IQR Program. These include:
* Requirement to use electronic file submissions via a CMS-approved secure file transmission process rather than paper submission of medical records or copies on CD, DVD, or flash drive;
* Combine the validation processes for chart-abstracted measures and eCQMs;
* Formalize the process for conducting educational reviews for eCQM validation in alignment with current processes for providing feedback or chart-abstracted validation results.
Comments:
Overall, we support the steps CMS has proposed to streamline the validation process for the IQR programs through the use of electronic submission and combining the processes for chart-abstracted measures and eCQMs. These proposals will reduce administrative burden.
eCQM Reporting
For FY 2021, CMS is proposing a progressive increase in the number of quarters of eCQM data that will be reported while maintaining the number of eCQMs reported (four). This will start from one self-selected quarter to four quarters of data over a three-year period. CMS will also publicly display eCQM data beginning with data reported by hospitals for the CY 2021 reporting period and subsequent years.
The breakdown for this proposal is as follows:
* Two quarters of data for the CY 2021 reporting period/FY 2023 payment determinations;
* Three quarters of data for the CY 2022 reporting period/FY 2024 payment determination; and
* Four quarters of data for the CY 2023 reporting period/FY 2025 payment determination, and subsequent years.
Comments:
Gundersen supports the expansion and visibility of eCQM reporting, as we have been reporting eCQMs for several years. The incremental approach in expanded reporting allows hospitals ample time to prepare for the increase in administrative work. However, we ask CMS to delay public reporting of eCQM performance until there is at least one consistent measure reported across all hospitals so consumers can make fair comparisons. We advise CMS to provide hospitals with their results along with national and state benchmarks at least one year before the public reporting period. At this time, we do not have proper information on how we are performing compared to others in eCQM measurement.
Hospital Overall Star Ratings
Last year, CMS announced its intention to use the inpatient PPS proposed rule to propose changes to its star ratings methodology. However, CMS chose to defer proposals on star ratings to future rulemaking in light of the COVID-19 public health emergency.
Comments:
While this is not ideal, we understand the need to postpone changes to the star rating methodology. We ask CMS to remove publication of current ratings until it can address significant methodology concerns through future rulemaking. Also, the impact of COVID-19 on quality measures and suspended measurement in 2020 needs to be better understood before star ratings are released to the public again. We look forward to commenting on any future proposals that CMS develops.
Graduate Medical Education (GME)
CMS is proposing to assist residents in attempting to find alternative hospitals to complete their training and to continue GME funding to the receiving teaching hospital or residency program. When a teaching hospital closes a residency program or the hospital closes entirely, Medicare regulations permit the hospital to temporarily transfer a portion of its hospital-specific direct GME and indirect medical education (IME) FTE resident caps to other hospitals that are willing to accept and train the displaced resident(s).
The proposed rule states that CMS has previously defined "displaced resident" as one that is physically present at the hospital training on the day before or the day of hospital or program closure. CMS proposes to modify this definition to be based on the day that the closure was publicly announced. Also, CMS proposes to consider as "displaced" those residents that were not physically present at the closing program/hospital, but had intended to train at - or return to training at - the closing program/hospital.
Comments:
At Gundersen, we do have a medical residency program in our system. As such, we greatly appreciate any assistance CMS can give to the residents we support. We believe this definition change will help bring residents to rural communities and encourage residents to continue their medical education. We implore CMS to continue to add flexibility in GME regulations.
Conclusion
On behalf of
If you have any questions or need clarification, please feel free to contact us. We look forward to continuing to work with the agency to better improve health policy for our patients and communities.
Sincerely,
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The proposed rule can be viewed at: https://www.regulations.gov/document?D=CMS-2020-0052-0002
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