News Briefs: CMS changes could cause big trouble for hospitals

If the Centers for Medicare & Medicaid Services (CMS) goes ahead with planned changes to its hospital outpatient payment before it is ready to pay claims, many hospitals are saying substantial problems will result.

Of primary concern, say hospitals, is the fact that paperwork problems and restricted cash flow are likely to arise coinciding with payment cuts to hospitals that the American Hospital Association has estimated at $1.5 billion.

Should the new regulation be implemented before the CMS can pay claims, hospitals won’t be the only victims, say hospital groups.

Beneficiaries, fiscal intermediaries, and other payers such as state Medicaid programs will suffer as well.

CMS Administrator Thomas Scully publicly has said that CMS won’t be able to process claims before April 2002. In an effort to work around this, Scully has said CMS is considering either asking Medicare to hold all hospital outpatient claims or pay the claims at 2001 rates and then make up the difference once the new CMS payment program is running.

Opposing groups claim that a delay in Medi-care payments will hamper hospitals’ ability to get beneficiary copayments from other payers, while paying at 2001 rates and later reconciling those fees would pose an undue administrative burden.

Under the proposed new system, hospitals will lose about $1 billion in 2002 in outpatient pass-through payments for procedures using new technology, while for procedures that don’t involve medical technology, hospitals will receive 8% less in payments.