CAH OIG Report and Recommendations Friday, September 27, 2013 Elizabeth G. Cobb MPH Kentucky Hospital Association
Office Of Inspector General • Report released by OIG under Federal Health and Human Services • August 15, 2013 • Report and Recommendations requested by a Congressional Committee • Significant impact on majority of the nation’s CAHs
OIG Report – Objectives • To determine the extent to which CAHs would meet the location requirement if required to re-enroll in Medicare • To Calculate potential savings to Medicare and beneficiaries if CMS decertified CAHs that would not meet the location requirements if required to re-enroll.
CAH Certification Requirements CAHs must meet two location-related requirements • CAHs must be located at least a certain distance from other hospitals (including CAHs, acute, psych, rehab, LTACH and Childrens) • CAHs must be located in a rural area
Distance Requirement • Those wishing to obtain certification must: • Be located more than a 35-mile from a hospital or CAH • By being located more than 15 mile from a hospital or CAH in areas of mountainous terrain or areas where only secondary roads available.
Necessary Provider CAHs • CAHs could be designated without meeting distance criteria by being designated as a “Necessary Proider” • Criteria included being rural, health profession shortages, etc. • NP Provision expired January 1, 2006 under the Medicare Prescription Drug, Improvement and Modernization Act • Existing CAHs allowed to retain their NP designation indefinitely
Increased Scrutiny • 2011, President published “Plan for Economic Growth and Deficit Reduction” • Reduce CAH reimbursement to 100% of cost • Eliminate CAH designation for CAHs less than 10 miles from another CAH • President’s budget proposals have made similar recommendations
OIG Methodology • Used mapping software • Considered types of roads • Survey of States’ Department of Transportation • OIG stated they used older datasets and mapping and may have “underestimated the number of CAHs that would not meet the distance criteria”
Findings • 849 of the 1,329 CAHs (64%) would NOT meet the distance requirement • 1.2 million beneficiaries received services at these CAHs in 2011 • 306 CAHs were 15 miles or less from another hospital
OIG Recommendations CMS Should: • Seek legislative authority to remove NP CAHs’ permanent exemption from the distance requirement • Seek LA to revise the CAH CoPs to include alternative location-related criteria • Periodically reassess CAHs’ compliance with location requirements • Ensur that it applies its uniform definition of Mountainous Terrain to all CAHs
Kentucky • 15/29 Kentucky CAHs made the OIG list • All 15 CAHs were 15 miles or less from another hospital or CAH
Problems with OIG Report • CAHs have a substantial economic impact on local communities. Wages and taxes far outweigh the savings that would be made to Medicare program • Most Kentucky CAHs would not survive under traditional hospital payment system • Physician and provider recruitment is often spearheaded by local CAH. If CAH closes, would lose primary care services as well • There are 39 Kentucky counties with NO hospital or CAH. It does not make sense to measure distance between hospitals and not patient travel distance.
What Comes Next • Educating the media and public! • The report alone does not implement, it would require legislation • CAH Value report • Talking points and letters of support