Protect your organization from ACA penalties that start today

A new fiscal year has begun. Here's how to prepare.

October 1 signals the start of a new fiscal year for the federal government, and CMS has begun implementing two Affordable Care Act (ACA) programs that target hospitals' quality of care and readmission rates in a broader effort to improve quality and cut costs.

More than 2,000 hospitals stand to lose under readmissions program—don't be one of them.

Under Medicare's new Hospital Readmissions Reduction Program, hospitals will be penalized for readmissions that fall above the national average (on a risk-adjusted basis) for heart failure, AMI, and pneumonia.

Payment reductions are limited to 1% of total Medicare inpatient revenue in 2013, increasing to 2% in 2014 and topping out at 3% in 2015. About 2,200 hospitals are expected to lose at least some part of their inpatient Medicare payments in FY 2013.

Are you at risk? Members can get a customized estimate of their potential penalty using the Health Care Advisory Board's customized readmissions estimator tool.

And it's not enough to just know about the penalties; learn how to avoid them with the Clinical Advisory Board's study Preventing Unnecessary Readmissions, which includes 17 best practices for promoting seamless transitions both within and beyond the four walls of the hospital.

Members also can see the Clinical Advisory Board's research on how to boost provider communication and evaluate the effectiveness of popular care transitions programs

Value-based purchasing will change payment incentives

Meanwhile, the new Value-Based Purchasing Program requires CMS to withhold 1% of Medicare revenues in 2013, rising to 2% in 2017, with the revenues then redistributed based on quality performance.

CMS expects the VBP program to be budget neutral so that roughly half of hospitals will receive a bonus payment exceeding the amount of revenues withheld, while the other half—about 1,500 hospitals—will experience reduced payments.

Looking to understand VBP's impact on your organization? Review the mechanics of the VBP program, how it works, and five implications of Medicare's broader move toward pay-for-performance. 

But for members that are still scrambling to map out their VBP performance in FY 2013. We have a message for you: Time to move on.

The performance periods that CMS will use to determine your FY 2013 incentive payment are over, meaning that your attention should now be squarely focused on the FY 2014 performance periods that are all well under way. Forward-looking hospital leaders should register for this week's webconference to begin setting Medicare payment strategy for next year.

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