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HCFA says decision still up in the air
With the Oct. 1, 2000, implementation deadline for the hospital rehab prospective payment system looming increasingly closer, industry arguments for a per-discharge payment methodology have picked up steam. At stake: how the Health Care Financing Administration (HCFA) pays hospitals and medical facilities for physical rehabilitation costs under Medicare.
The latest to enter the debate is U.S. Rep. Bill Thomas (R-CA), head of the House Ways and Means Subcommittee on Health. Thomas has urged HCFA to drop its traditional approach of a per-diem payment methodology, which pays set daily prices for rehabilitation services based on the type of service provided. Industry groups have long argued that a per-diem system will provide an incentive for hospitals to decrease daily costs, cut back on services provided each day, and even increase lengths of stay for rehab patients.
Taking the fight public
Under the per-episode methodology, however, prices would be based upon the entire cost of treating an injury.
"Having reviewed this issue thoroughly, I strongly urge you to implement a discharge-based system," Thomas wrote to HCFA administrator Nancy Ann DeParle in a letter published in The Washington Times. Calls to Thomas’ office by Rehab Continuum Report were not returned.
"Rumor has it that the HCFA will go along with Mr. Thomas’ recommendation," one Washington insider told Rehab Continuum Report. However, HCFA has not yet made a decision on the payment methodology issue, says HCFA spokesman Craig Polotsky.
Industry groups such as the American Hospital Association (AHA) in Chicago and the American Medical Rehabilitation Providers Association (AMRPA) in Washington, DC, continue to lobby HCFA heavily in favor of the per-episode payment methodology. AMRPA has posted data on its Web site that further support the issue (see editor’s note at right).
"HCFA asserts that a per-discharge approach may result in patients being discharged prematurely, or facilities stinting on care," a statement posted on the Web site reads. "AMRPA has noted that while the length of stay for rehab patients has dropped, functional improvement has remained the same."
Data posted on the Web site shows an AMRPA analysis of reports from 1990 to 1997 from the Uniform Data System for Medical Rehabilitation (UDSMR), which developed a functional outcomes measurement system widely used among rehab providers, the Functional Impairment Measurement (FIM). Information also is included from Medicare cost reports for a similar time period.
For Medicare UDSMR patients, the length of stay dropped from 28 days in 1990 to 17 days in 1997,AMRPA reports. For Medicare UDSMR patients from 1994 to 1998, the length of stay dropped from 19.7 days to 15.5 days. "In 1990, patients gained 23.2 FIM points for all patients, and in 1994, 21.4 points for Medicare patients in functional ability and [patients] demonstrated the same gain in 1997 and 1998 for Medicare with little or no change in the interim," AMRPA reports.
The AHA also is concerned about the cuts in outpatient hospital rates that will occur under prospective pay, says Debra Williams, senior associate director for policy. Williams says HCFA told AHA in mid-May that the calculations showed a planned 5.7% reduction in base pay to hospitals for outpatient services, rather than the previously believed 3.8% reduction. "It is our belief that HCFA wanted the system to be budget neutral, that it intended for hospitals to neither lose nor gain revenue," she says. As a result, she says, AHA will continue to push for changes to the outpatient PPS formula so hospitals are not unfairly penalized for decreasing Medicare beneficiary copayments.
The bottom line: It should be an interesting summer. Stay tuned.
(Editor’s note: A full copy of the Medicare UDSMR data is available on AMRPA’s Web site at www. amrpa.org.)