KFF Health Medicare Reimbursement News produces in-depth journalism about health issues as one of the core operating programs at KFF, an independent nonprofit source of research and journalism.
Macroeconomic headwinds sweeping through health care are creating complex and unique challenges for stakeholders in this industry. Two recent webcasts on demand provide insight into reimbursement landscape.
Medicare Reimbursement News
Medicare Reimbursement News represents an essential source of revenue for many healthcare professionals, regardless of their role within an institution or as independent practitioners. Therefore, it’s vital that healthcare professionals remain up-to-date on changes that affect Medicare reimbursement rates; otherwise they risk negatively impacting their bottom lines in the future.
Medicare Part B reimburses services according to an economic index which tracks changes in specific economic indicators like costs associated with maintaining an office practice or earnings levels in general economy.
Current charges determined by Medicare Reimbursement News carriers increase every year according to this index, increasing depending on whether beneficiaries meet their deductible and receive benefits; average allowed charges per service are determined by Medicare carriers who increase them according to this economic indicator; total services furnished vary as determined by Medicare carriers as determined by an index determined each year using which carrier charges increase by an economic index that correlates with these indicators such as cost of maintaining an office practice or earnings levels in general economy.
The national average reimbursement can differ substantially based on geographic region, age and sex, type of facility providing the service provided and whether private insurers negotiated directly with Medicare on their enrollee’s behalf to access Part B services; average reimbursement was higher at physicians’ offices than other facilities while race was also a factor when correlating charges with reimbursements.
Medicaid Reimbursement
The federal and state governments share the cost of Medicaid benefits for people with low incomes. The federal share varies by state and is calculated using a formula taking into account each state’s per capita income. Individual states also can set spending caps that do not exceed those set by the federal government.
Hospitals receive prospective payment rates based on one of over 700 diagnoses-related groups (DRGs). Payment rates may be adjusted based on factors like patient age, sex, secondary diagnosis and length of stay; penalties or rewards may also be given based on readmission rates as measured against Medicare overall star ratings.
Recent healthcare leaders and lawmakers have made great strides toward value-based reimbursement through MACRA. Clinicians now can earn incentives or face penalties depending on quality outcomes – this move could even radically transform how Medicare reimburses them.
In many states, doctors can be simultaneously reimbursed by both Medicaid and Medicare simultaneously for services provided through both programs. Reimbursement typically comes through hospital outpatient prospective payment system and physician fee schedule reimbursements; Medicaid also reimburses doctors who deliver services via telehealth; for these services they typically compensate the physician based on time spent at distant sites in addition to facility and transmission charges imposed. It must be clear to state officials that such charges pertain to providing covered Medicaid services.
Medicare Shared Savings Program
The Medicare Shared Savings Program (MSSP) is an incentive-driven voluntary program that holds accountable care organizations (ACOs) accountable for both quality and costs for specific patient populations, ultimately driving health system priorities such as controlling costs while simultaneously improving outcomes.
This program works by offering bonus payments when participants’ gross reductions in Medicare spending meet a defined benchmark, making this measure particularly appealing for ACOs that include physician groups or hospitals as this gives them additional motivations to reduce spending than ACOs without such commitments.
Early MSSP ACOs have proven successful at cutting Medicare costs, yet its distribution remains unclear. ACOs must publicly report their shared savings distribution plans, while additional responsibilities could affect how much savings they expect to produce.
One study of 338 MSSP ACOs that have reported their detailed plans revealed that on average, these ACOs planned to allocate 63% of total savings directly to PCPs, specialists, and hospitals. Nearly half (155 out of 338) also allotted some portion of their savings to infrastructure – likely as many ACOs use savings for administrative costs before dispersing it among partners.
