Becker's Hospital Review

36 CFO / FINANCE Houston hospital appeals loss of federal funding for heart transplants By Ayla Ellison H ouston-based Baylor St. Luke's Medical Center filed an administrative ap- peal with CMS Sept. 14, about a month after the agency terminated Medi- care and Medicaid funding for the hospital's heart transplant program, according to the Houston Chronicle. The hospital suspended its heart transplant program for 14 days starting June 1 after an investigation by ProPublica and the Houston Chronicle revealed the hos- pital's heart transplant survival rate ranks near the bottom nationally, and three of nine patients who received heart transplants at the hospital in the first six months of 2018 have died. The program resumed June 15 after hospital officials said changes were made to improve care. CMS notified St. Luke's in late June that the hospital had violated a federal statute by failing to notify the agency of its plan to suspend the heart transplant program. CMS said St. Luke's had not done enough to ensure patient safety. The agency ended funding for the hospital's heart transplant program Aug. 17. St. Luke's said it has taken steps to strengthen its heart transplant program over the past few years. "We do not believe CMS' recent decisions reflect our ongoing progress and accomplishments to improve the quality of our care, and we look forward to presenting the facts so that heart transplant reimbursements can be reinstated," the hospital said in a statement cited by the Houston Chronicle. The hospital's appeal will be heard before an HHS administrative law judge. n Proposed payment changes likely to ding hospital margins By Ayla Ellison P roposed hospital reimbursement changes included in CMS' Outpatient Prospective Payment System rule for 2019 would generally be credit neg- ative for nonprofit and for-profit hospitals, according to a Moody's Inves- tors Service report. Under the proposed rule, CMS would make payments for clinic visits site-neu- tral by reducing the payment rate for hospital outpatient clinic visits provided at off-campus provider-based departments to 40 percent of the OPPS rate. This change, amid other revenue pressures, would further constrain hospital margins, according to Moody's. "Over the years, hospitals have been actively acquiring independent physician practices and subsequently were able to benefit from higher OPPS off-cam- pus PBD rates," said Moody's. "Hospitals that acquired large numbers of med- icine-based or primary care physician practices, which would be associated with these clinic visits, would be particularly vulnerable to revenue reductions if CMS cuts these visit fees." The clinic visit is the most common service billed under the OPPS, and CMS estimates the payment proposal would save the Medicare program and Medi- care recipients a combined $760 million in 2019. The proposed OPPS rule also adds certain cardiac procedures as covered ser- vices at ambulatory surgery centers. The effects of this proposed change vary by hospital, but the proposal would likely have the most significant effect on the hospital sector, according to Moody's. n Michigan hospital blames 'aggressive, direct competitor' for financial troubles By Ayla Ellison D ickinson County Healthcare System in Iron Mountain, Mich., continues to face financial stress even aer laying off about 10 percent of its staff in the past year, according to e Daily News. e hospital laid off 80 employees, or about 10 percent of its staff, between June 2017 and June 2018 to improve its financial position. However, the hospital still faces financial pressure due to a decline in patient volume. "ere is an aggressive, direct competitor in our market and they are funneling health- care dollars into other communities and away from DCHS," the hospital stated in a news re- lease, according to e Daily News. "As we are all aware, the healthcare dollars that are generated in our communities through our insurance coverages and from Medicare and Medicaid are limited," said John Schon, administrator and CEO of Dickinson County Healthcare System, according to the report. "If patients are referred out of this commu- nity for services that are provided at our local hospital, the result will be the loss of these services in the future, eventually leading to the further loss of jobs and jeopardizing the hospital's future ability to continue to provide the full scope of services it currently provides for our community 24 hours per day, seven days per week, 365 days a year." Mr. Schon said DCHS could have avoided some layoffs if patient volumes had not fallen in the first half of 2018. "e annual impact of these staffing reduc- tions equates to an estimated $4.5 million reduction in our hospital payroll. However, if our hospital patient utilization would have remained the same as 2017, we would have been able to maintain a significant number of these jobs — bolstering our local econo- my, rather than the economy of other com- munities where patients are being referred for their patient care," he said. n

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