Medicare Compliance & Reimbursement

Hospitals should brace themselves for potential reimbursement shortfalls under the Centers for Medicare & Medicaid Services' new outlier policy. While the policy change was explicitly crafted to deter a handful of hospitals from gaming the system, the broader effect of the new rule could strike a blow even to hospitals that play by the rules, hospital associations fear. While CMS chief Tom Scully has suggested that honest hospitals could actually fare better under the new outlier rule his agency unveiled March 5, the American Hospital Association disagrees. The changes, in addition to imposing new and unnecessary paperwork burdens, "would create significant and unanticipated reductions in outlier payments to providers," the AHA charges in March 31 comments on the rule. Indeed, according to the Catholic Healthcare Association's comment letter, the rule would impose "new and burdensome demands on all providers in an effort to guard against the apparent manipulative behavior of just a very few."

The AHA urges CMS to allow more time for comments and set up a transition plan for hospitals pinched by the rule. Both the AHA and the CHA add that CMS should lower the threshold for outlier payments.