The ABCs of CMS

The Hospitalist. 2009 April;2009(04):

April 1, 2009|The Hospitalist

Now, more than ever, major changes in the way healthcare is provided, measured, and paid for seem to be coming from a single source: the Centers for Medicare and Medicaid Services (CMS). From the Physician Quality Reporting Initiative (PQRI) to last summer’s Medicare Physician Fee Schedule, CMS has an ever-growing influence on U.S. healthcare.

Although it has published numerous articles about CMS and its policies, The Hospitalist has never offered an explanatory overview of one of the largest healthcare agencies in the world. In order to help hospitalists understand the policies, payments, and trends that affect them every day, we have prepared this CMS fact sheet.

Agency Background

CMS falls under the jurisdiction of the U.S. Department of Health and Human Services, and is tasked primarily with administering the Medicare program and working in partnership with state governments to administer Medicaid and the State Children’s Health Insurance Program (SCHIP). CMS’ current mission is “to ensure effective, up-to-date healthcare coverage and to promote quality care for beneficiaries,” which is a more modern focus than when the Medicare and Medicaid programs were first signed into law in 1965. Those programs were created solely to provide healthcare coverage to Americans over the age of 65, as well as low-income children and people with certain disabilities.

CMS has grown in size and scope since its inception. “First and foremost, CMS is the largest single payor for healthcare in the United States,” says Patrick J. Torcson, MD, MMM, FACP, director of hospital medicine at St. Tammany Parish Hospital in Covington, La., and chair of SHM’s Performance and Standards Committee. Insurance companies model their coverage and fee schedules after CMS. “That makes it very important for reimbursement.”

Approximately 45 million Americans are Medicare beneficiaries, and CMS pays reimbursements for more than 90 million people through the Medicare, Medicaid, and SCHIP programs. Hospitalists treat so many of these beneficiaries that Dr. Torcson estimates CMS represents “at least a third” of the payor mix for most adult hospitalists. For hospitals, the percentage is larger: “For acute-care public hospitals, I’d estimate that Medicare is probably 50% of the payor mix,” Dr. Torcson says.

Policy Points

COORDINATED CARE PROGRAMS NOT COST-EFFECTIVE

A CMS trail of coordinated care programs has shown that these programs—specifically created to keep Medicare patients out of the hospital and reduce costs—generally did not work, according to a study published in the Feb. 19 Journal of the American Medical Association.

In 2002, CMS instituted the Medicare Coordinated Care Demonstration (MCCD), selecting 15 coordinated care test-site programs with a total of 18,309 Medicare beneficiaries, most of whom had age-related chronic conditions, including diabetes, heart disease, and lung disease. Nurses in the program provided patient education and monitoring to improve adherence and ability to communicate with physicians. Of the 15 programs, only two of the sites met their goals.

CMS contracted with Mathematica Policy Research to conduct an independent evaluation of the demonstration. Randall Brown, the main author of the evaluation, deemed the program results “underwhelming.” The only way to reduce hospitalizations and costs, he says, “is by changing patients’ behavior and by changing physicians’ behavior, and both things are really hard to do.”

The study is available online at jama.amaassn.org/cgi/content/full/301/6/603.

SCHIP EXPANDED

Congress reauthorized the State Children’s Health Insurance Program (SCHIP) for another four and a half years, increasing the program’s funding to $32.8 billion—largely through an increase in the federal tax on cigarettes—and allowing it to cover an additional 4.1 million children. The bill includes money for the development of pediatric quality measures and demonstration projects to test ways to improve the delivery of children’s healthcare, including the use of health information technology.

MARYLAND WORKS TO RESTRICT HOSPITALS’ DEBT COLLECTION

A Maryland state senator has introduced legislation that would set minimum standards on hospitals providing no-cost or reduced-cost care to patients. Democratic Sen. George Della introduced a bill requiring hospitals to provide no-cost care to patients with incomes of as much as 150% of the federal poverty level. The bill also prohibits hospitals from placing liens on patients’ homes.