At the Margins

Our latest insight into health care margin improvement efforts

Map: New overall star ratings are out. How did your hospital fare?

by Eric Fontana and Kenna Hawes January 3, 2018

On Dec. 21, CMS released a long-awaited update of its Overall Star Ratings. 3,692 hospitals received ratings in the latest update, which was postponed from July while the agency revised the underlying methodology.

Just updated: Get 1-page cheat sheets on other Hospital Quality Rating Programs

The methodology changes have certainly impacted hospitals' performance: The December update contains a much broader distribution of hospital performance across the range of star ratings (see below) than the old methodology would have yielded.

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2 weeks before major 340B changes, CMS answers some of your top questions

by Eric Fontana and Kenna Hawes December 20, 2017

Major changes to the 340B Drug Pricing Program are scheduled to kick in on Jan. 1, 2018—and CMS just released a new FAQ answering some of providers' top questions. 

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Our 2017 revenue cycle benchmarks are out. How do you stack up?

by Eric Fontana and Lulis Navarro December 14, 2017

Without a doubt, it's a critical time to refocus on the revenue cycle. In the face of growing reimbursement pressures and accelerating costs, finance leaders must elevate revenue cycle performance by both increasing revenue capture and lowering the cost of doing so.

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Community hospitals: Are your finances on solid ground?

John Johnston, CPA, MHA December 6, 2017

John Johnston, CPA, MHA

Following months of uncertainty regarding health care reform and anxiety about provider margins, Moody's August report confirmed the assumptions of many hospital executives: Not-for-profit operating margins declined in FY16, and for the first time in several years, annual expense growth significantly outpaced revenue gains.

Moody's forecast for tighter margins for the not-for-profit hospital sector going forward is troubling news for all, but especially for community hospitals, which typically have lower margins and fewer resources to fall back on than their large-system peers. Industry analysts have responded by emphasizing the structural challenges facing the industry, and some have noted the growing difficulty for independent hospitals to go it alone, while speculating on a possible uptick in mergers.

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The 3-pronged strategy you need for cost reduction

Eric Fontana , Robin Brand November 22, 2017

Health systems' costs are quickly outgrowing revenue, and payers are looking for every opportunity to spend less for care and target high-cost acute services.

That means a Band-Aid strategy of slashing one-time costs will not suffice. The most successful organizations will pursue a three-pronged strategy of an all-hands-on-deck tactical agenda, fixed cost restructuring, and clinical variation reduction.

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3 trends in contract management—and how to solve them

by Braden Decker, Senior Director, Partner Services November 7, 2017

Over the past 15 years, I've seen managed care leaders face new and constantly evolving challenges. But one theme stays constant: They must find ways to negotiate better contracts and receive the associated reimbursement. Recently, I've been struck by three trends in the managed care space that providers must address to remain successful in today's margin-constrained environment. With the right contract management technology in place, organizations will successfully navigate these new complexities.

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A $1.6B cut to 340B payments, plus outpatient TKA: Our key takeaways on the 2018 Outpatient Final Rule

Eric Fontana November 2, 2017

Late yesterday, CMS released its Final Rule regulating outpatient payment in CY 2018. The biggest news includes two major changes that could significantly affect many hospitals' margins:

  • CMS will reduce the reimbursement for drugs acquired with discounts under the 340B program to average sale price (ASP) minus 22.5%
  • CMS will remove total knee arthroplasty (TKA) from the inpatient-only list, a change that will likely trigger a shift of cases to outpatient settings starting next year

Read on for more information about these changes, or hear a full analysis of the details in our webconference recording on the Outpatient Final Rule.

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MedPAC mulls reforming the hospital inpatient quality landscape: 5 key takeaways

Eric Fontana , Tony Panjamapirom, PhD October 26, 2017

We recently attended the Oct. 6 meeting of the Medicare Payment Advisory Commission (MedPAC), where the agency presented the first draft of a plan to simplify and consolidate Medicare's array of inpatient value incentive programs.

As a refresher: MedPAC is an independent agency that advises Congress on issues affecting the Medicare program. MedPAC consists of staff researchers and a 17-member commission representing different areas of the health care industry.

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