How will hospitals adapt?
The CMS did not give hospitals transition time. The reinterpretation became effective in June 2017, just 60 days after the agency issued the final rule. Dr. McHugh said he is not sure why the agency did not build in time for hospitals to adapt, particularly given the uncertainty around the national uninsured rate going forward, with so many potential changes to the American health care system under a new administration.
How any of these changes trickle down to hospitalists remains to be seen, said Dr. Flansbaum. Dr. McHugh believes it could lead to increased patient loads, higher turnover and churn, and fewer experienced physicians in safety net hospitals as younger doctors are hired and burn out. “At the end of the day, that feeds into patient care and patient satisfaction and quality,” he said.
However, hospitals across the country have been living with this “slow burn” for a long time, said Dr. Flansbaum, though not necessarily due to inadequate DSH payments. At least in some areas, reimbursements have gone down, hospital occupancy rates have declined, rural hospitals have closed, hospitals have consolidated, and people have been laid off.
It’s important to ensure the hospitals providing care for high levels of uninsured or underinsured patients receive the help they need, he said, and it’s also important to examine the role hospitals play as a whole in the American health care system.
“It’s an expensive system,” he said. “We have we created a system where, unlike other countries that have developed more vigorous primary or outpatient care, we have created an inpatient health system.”
With the CMS’ change, the government is the only entity that seems to win across the board, Dr. McHugh said. He said he would not be surprised if analysts looked to see how hospitals were affected by it in coming months.
But, he remains optimistic. In fact, the final rule also came with an $800 million increase in the amount of uncompensated care payments for acute care hospitals in fiscal year 2018, the CMS says.4
“Hospitals are adaptable,” Dr. McHugh said. “I think what you’ll see is this will spur some innovation in terms of patient care maybe a few years down the road. It may hit some stumbling blocks in the early going but there may be some positive changes in the future.”
1. Medicaid Program; Disproportionate Share Hospital Payments –Treatment of Third Party Payers in Calculating Uncompensated Care Costs. Centers for Medicare and Medicaid Services final rule. Citation 82 FR 16114. Published April 3, 2017. Last accessed August 14, 2017. https://www.federalregister.gov/documents/2017/04/03/2017-06538/medicaid-program-disproportionate-share-hospital-payments-treatment-of-third-party-payers-in
2. Kugler E. 2016-09-14 NAUH Medicaid Program DSH Payments – Treatment of Third Party Payer in Calculating Uncompensated Care Costs. September 14, 2016. Last accessed August 14, 2017. https://www.regulations.gov/document?D=CMS-2016-0144-0020
3. Berg A. Proposed Rule on Disproportionate Share Hospital Payments – Treatment of Third Party Payers in Calculating Uncompensated Care Costs, CMS-2399-P. September 14, 2016. Last accessed August 14, 2017. https://www.regulations.gov/document?D=CMS-2016-0144-0046
4. CMS finalizes 2018 payment and policy updates for Medicare hospital admissions. Published August 2, 2017. Last accessed August 14, 2017. https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2017-Press-releases-items/2017-08-02.html