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WGH working now on changes under Health Care Act

Medicare payments will reduce slightly

September 25, 2010
Since the landmark health care reform bill became law, health care providers, like Warren General Hospital, have been challenged to cope with the upcoming changes. The Patient Protection and Affordable Care Act was signed into law by President Barack Obama on March 23. According to WGH compliance officer Christine Kuntz, the bill has three objectives: have health insurance available for most Americans, increase the quality or value of health care and reduce to the cost of health care. Over the next five years, components and provisions of the law will be phased in, and the executive staff at WGH is already working with the effects of those changes. “While the bill creates challenges, our focus needs to be on meeting the overall premise of the bill, and that is assuring access to care and ensuring quality of care. We must continue to find ways to work together to meet those goals,” said hospital CEO John Papalia. A reduction in revenue will be the result of lower Medicare reimbursements which begin this year with a reduction in Medicare inpatient, outpatient, inpatient rehabilitation facility and psychiatric hospital payments by 0.25 percent. The decreases continue with a reduction in Medicare payment by a productivity adjustment of 0.1 percent in 2011 and 2012, and 0.3 percent in 2013. Additionally, Medicaid hospital payment cuts of $600 million will be applied to each state in fiscal years 2015 and 2016. According to the Hospital and Healthsystem Association of Pennsylvania, the law reduces Medicare and Medicaid payments to adjust for reductions to the number of uninsured individuals. These decreases are particularly important to hospitals like WGH because, as Skip Marsh, WGH Chief Financial Officer said, the federal government classifies WGH as a Medicare dependent hospital. “I like where (the bill) was going strategically, but the devil is in the details,” Marsh added. In terms of increased costs, the new law calls for more transparency, which involves more man-hours for data collection and reporting. There is also a technology component. In order to improve quality and efficiency, the government has mandated hospitals to implement a fully functional electronic medical record system. According to Kuntz, WGH has until 2015 to implement the technology before facing monetary penalties. She described the provision as a large undertaking in terms of the cost of implementation and way the hospital does business. With this provision, paper charts will become a thing of the past. “This method reduces redundancy in care,” she said. While the hospital has until 2015 to implement the technology, they have already begun the process with implementation of electronic medical records, digital archiving, and digital technology in medical equipment. As to the transparency requirements, WGH has been at the forefront of this movement for years, and is actually ahead of the curve. Warren General volunteered to be part of pilot programs participating with state and federal reporting agencies. “Hospitals will have to publicize their financial assistance policies,” Kuntz said. Related to this, hospitals will be prohibited from taking “extraordinary” collections efforts unless they make a “reasonable effort” to determine whether a patient is eligible for the hospital’s financial assistance. Kuntz went on to explain that Warren General has been following these guidelines for years. We have a dedicated financial assistance counselor, who works with patients to identify those who qualify for financial assistance through a wide variety of programs. The new law also limits how much hospitals may charge for emergency and medically-necessary care to those patients who qualify for the hospital’s financial assistance program. This means self-pay patients will be not be charged rates greater than those paid by the insurance companies. As the provisions of the law come into effect, hospital officials are looking to the organization’s long standing goals of continued quality care, patient satisfaction, fiscal viability, growth, patient safety and good medical practices to weather the storm. “What we as a hospital will continue to do is find more effective, efficient ways to deliver quality care,” Papalia said. He added that WGH will continue to work towards finding opportunities to improve access points for primary care service in Warren County and the surrounding region. “Our strength lies in our ability to collectively work together on these issues,” he said.


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