Adapting to the 2018 CMS reimbursement changes

Hospitals and clinics will again face challenges as CMS approves the 2018 final rule that creates important changes to healthcare reimbursement. The changes will create significant reductions in organizations’ net revenue. The main challenges and our suggested solutions are outlined below.

The Challenges:

  • Hospitals can expect a 1.35% increase in Medicare reimbursement rate. Although this increase does not keep pace with inflation, it does represent a revenue increase.
  • The 340B reimbursement will be substantially reduced. The previous formula will be replaced with a new one that takes the average sales price of the medication minus 22.5%. The previous reimbursement was average sales price plus 6%. This almost 30% shift in reimbursement will impact the poorest cities and communities in the country. It will have a significant impact on patients on Medicaid and other government assistance and their ability to purchase their necessary medications.
  • Medicare physicians’ fees will see an increase of 0.41%. This increase is occurring after CMS transitioned hospital-based outpatient departments off OPPS in 2017 and onto the physicians fee schedule, which on average reduced payment to healthcare organizations by roughly half of their previous OPPS rates. Some potentially bright news in this transition is the expansion of telehealth to include interactive complexity, health risk assessments, chronic disease management and crisis psychotherapy.  

Meeting the challenges:

  1. Streamline financial operations – Optimize financial and clinical technology. Innovate new solutions for patient access to care with meaningful financial screening and data gathering. Establish medical necessity and level of care before admission/service encounter. Ensure continuous improvement of clinical documentation to support and defend services billed and reimbursed.
  2. Strategize technology – Capture all information necessary for coding with additional reason and condition codes at the point of care attached to the documentation to integrate with billing functions.
  3. Analytics – Invest in analytics solutions to have real-time data and information available from point of service through reimbursement; identify trends in payment changes and reductions to assure they are appropriate and not related to a denial that needs root cause analysis. Don’t accept payment reductions without careful analysis.
  4. Training and Education – Provide education and training on the changes and what to expect across the continuum of care and in particular to the revenue cycle and underpayment staff to ensure a full understanding of what to expect and alert leadership to potential problems immediately.

Despite these challenging times, Jacobus Consulting is here to provide assistance to our customers to obtain the maximum reimbursement dollars available by utilizing defined best practices and conducting comprehensive revenue and denials management assessments. In addition, Jacobus has the clinical experts your organization needs to create the necessary provider documentation within your EMR that translates provider assessment information into clear documentation of the patients’ visit, resulting in a well-defined patient problem list and history that tells the patient’s story to construct a clear assessment and plan for each patient encounter.

Jacobus Consulting uses a clear methodology to evaluate current state processes and mold them into a future state environment that meets the challenges and changes facing healthcare today as well as tomorrow. Contact us today to determine how our team of experts can change your future. For additional detail on the 2018 CMS changes, please reference this current article from Rev Cycle Intelligence.