NEW GLOUCESTER, ME – The inaugural Healthcare Finance News Virtual Conference and Exhibition in mid-October, which featured expert speakers on various healthcare finance issues, offered one overriding message: Healthcare providers should prepare for significant change.

That will come in the form of new legislation as healthcare reform in Congress moves to a denouement and healthcare providers continue to deal with the fallout of the recession.

Blair Childs, vice president of the Premier healthcare alliance and the VCE’s keynote speaker, said hospitals in particular must pay heed to the payment reforms that are almost certain to be part of final Congressional healthcare legislation.

Value-based purchasing “is coming,” Childs predicted, noting that a percentage of hospital payments will probably be tied to performance by 2013. He said hospital quality measures would be developed by the Centers for Medicare and Medicaid Services, in cooperation with external stakeholders, focusing on the most common high-cost conditions.

Reductions in hospital payments for “potentially avoidable” readmissions will almost certainly be part of the final bill, Childs said. The legislation will likely reduce hospital payments by 20 percent if patients are readmitted within seven days of leaving a hospital, and by 10 percent if readmitted within 15 days.

Congress will likely allocate approximately $10 billion to test new provider payment models. Childs suspects that accountable care organization, or ACOs, will be high on the list, along with bundled payments. He noted that, beginning in 2014, hospitals will probably be penalized for hospital-acquired infection rates in the top 25th percentile, reducing total payments by $1.2 billion.

Paul Keckley, executive director of the Deloitte Center for Health Solutions and a VCE speaker, warned hospital executives that provider reimbursement changes could also lead to a “major redesign of the workforce.”

He said the current delivery system would not be capable of providing enough doctors to manage the expected influx of patients and the greater emphasis on primary care that will result from healthcare reform.
While preparing for reform, providers must also be aggressive in defending their bottom lines against Medicare audits, said another VCE speaker.

Stephen Forney, vice president of margin development at Ardent Health Services, a Nashville, Tenn.-based operator of eight hospitals in two states, recommended that providers develop an internal audit program, using the Medicare Recovery Audit Contractor demonstration project, conducted between 2005 and 2008, as a model to determine current exposure to RAC audits.