Robin Raiford and Jordan Stone
Merger and acquisition (M&A) strategies are no longer the exception among providers; whether motivated by financial insecurity or the need to integrate care across the continuum in response to risk-based payment, many health systems are actively seeking consolidation.
However, acquiring systems could be placing their meaningful use (MU) trajectories at risk in the acquisition process. More specifically, acquirers stand to lose millions of dollars in incentives and may face negative payment adjustments if the newly consolidated entity fails to meet MU thresholds.
What is meaningful use?
Meaningful use refers to requirements—specified in the 2009 HITECH Act—that hospitals, eligible professionals, and critical access hospitals must meet to qualify for Medicare and Medicaid incentives aimed at promoting electronic health record (EHR) use.
MU requirements are phased in across three stages of increasing responsibility and complexity. Systems eligible for “Stage 1” must complete the attestation process by Nov. 30, 2012 to receive EHR incentives for 2013.
Based on readiness in FY2013, all eligible, non-compliant providers will be at risk for “payment adjustments”—1% cuts to Medicare reimbursement—if they have not met MU targets. These penalties will be assessed starting in FY2015 and will increase by 1% annually through FY2018.
M&A strategy: Assess meaningful use early to prevent losses
On March 16, the Department of Health and Human Services released final rules for the Medicaid program expansion mandated by the Patient Protection and Affordable Care Act (ACA). As currently written, Medicaid would be available to individuals aged 19 through 64 with incomes up to 133% of the federal poverty level. That said, the Medicaid provisions of ACA could change substantially when the Supreme Court issues its ruling later this year.
Adding to the complexity, many states are cutting Medicaid reimbursement and issuing more selective eligibility requirements. Regardless of the outcome, health systems must ensure that they receive every dollar earned treating Medicaid-eligible patients. A critical component of this initiative is to improve the process for identifying and enrolling Medicaid-eligible self-pay patients.
Uncover potential Medicaid losses
Barrie Medical Center1, an academic medical center in the Northeast, is an excellent example of a provider that has already taken steps to improve its identification and enrollment processes. The hospital historically suffered losses from treating uninsured individuals who were actually eligible for Medicaid but had not enrolled in the program.
Barrie leadership identified two primary drivers of this phenomenon:
- Front office staff didn't see many individuals with a high probability of being Medicaid-eligible when they presented for care.
- Despite form distribution by the front office staff, many Medicaid-eligible patients failed to complete the paperwork in a timely manner.
Preparing for the Medicaid expansion: Is your registration process ready?