The majority of the reimbursement cuts that will affect hospitals are in the Disproportionate Share Hospital (DSH) payment system that pays hospitals based on their volume of charity care. Cuts are slated to begin in 2014, and the Medicare and Medicaid DSH reductions will equal approximately $36 billion over 10 years. These reductions will not materialize until after the number of insured individuals has increased and levels of uncompensated care costs have decreased, however. The law directs the Secretary of Health and Human Services to develop the methodology for reducing DSH payments to all states to achieve the mandated reductions. More information will be available as these regulations are proposed.
Financial viability will require that hospitals be aggressive in acquiring insurance, funding, and co-pay information from patients. This has historically been problematic for ED personnel trying to balance these tasks with concerns about violating HIPAA and EMTALA laws. As long as ED intake processes do not delay care in pursuit of insurance and demographic information and reasonable attempts are made to ensure patient privacy, the department is not at risk. The three tasks that occur at intake — identification, medical screening, and collecting registration information (including co-payment collection) — are best performed in that order and at separate points in the ED visit. Process redesign options include computerized ID and self-check-in kiosks, clinical assessment “chutes” at intake, and discharge kiosks where prescriptions and discharge instructions are given and payment information is obtained.
Home care and hospice providers will not fare as well as hospitals under the new health care reform law. In a nutshell, they will not see any direct expansions but will face Medicare cuts of nearly $40 billion over 10 years.
On a more positive note, the new health care law establishes the Independence at Home demonstration program, which will allow for chronically ill Medicare beneficiaries to test a payment incentive and service delivery system that utilizes physician-directed home-based primary care teams that aim to reduce expenditures and improve health outcomes. Again these initiatives will require a system that has an ED component and could play out with resources and personnel present in the ED and a place to orchestrate the care plan.
It is easy to see how technology may be used to facilitate all of these changes. Systems that seamlessly convey data from primary care to the ED and back will be imperative. A comprehensive electronic medical record with interfaces for all the components of a patient's care will be the cornerstone on which the reformed health care system will be built.
Information technology that crafts patient-friendly instructions about the patient's management plan and follow-up will be a crucial part of the new care model. Systems that capture and flag information about readmissions, hospital-acquired conditions, and complications will allow real-time cueing of staff in the ED and aggregate data collections to identify best practices. Clinical decision support and alerts that help practitioners with patient management will all be part of the robust IT support for the reforms to begin affecting the hospital and the ED.
ACOs and the ED
The largest step toward a value-based delivery system within the Patient Protection and Affordable Care Act is the Medicare Shared Savings Program, which creates a pathway for health care providers to care for Medicare beneficiaries using Accountable Care Organizations (ACO), a group of providers (physicians, hospitals) that partners to deliver seamless, high-quality care. The population will be assigned to the ACO based on the primary care utilization of Medicare beneficiaries. If an ACO can deliver high-quality care at a cost that is lower than the average beneficiary expenditures adjusted for demographic characteristics, it will receive 50 to 60 percent of the shared savings. A proposed rule governing the Medicare Shared Savings Program was released by the Centers for Medicare & Medicaid Services at the end of March. The program is slated to begin in January.
The best way to envision an ACO is that it is an organization with incentives to design delivery of care around the needs of the patient in ways that promote value and reduce waste. If the hospital readmission and value-based purchasing programs are focused experiments, an ACO is an “all-in” strategy designed to accelerate changes in the system. Unlike the managed care world of the '90s, Medicare beneficiaries will be free to seek care from any provider, even if their primary care base is part of an ACO. This means ACOs will need to earn the business of Medicare beneficiaries, not force them into narrow networks of tightly controlled providers.
How will this affect your emergency department? Because Medicare patients are free to seek care from any provider, you will still be paid on a fee-for-service basis for Medicare patients coming to your ED. If your hospital and community providers are part of an ACO, you should expect that the ACO will be reaching out to you with efforts to connect the ED to its primary care providers. If you take a “glass half-full” perspective, this means you should have more reliable options for sending a Medicare patient home with prompt follow-up care.
The ACO has every incentive to make sure the patient is seen promptly and receives appropriate outpatient services. On the “glass half-empty” side, it could mean that you will have greater pressure not to admit (or readmit) patients. Relationships with hospital leaders and primary care providers in the community will be key in ensuring that you can do the right thing for the patient. Fortunately, ACOs have to meet rigorous quality standards before they can qualify for any shared savings so everyone's goal should start with the needs of the patient.
No Standing Still
The most important message to take away from this is that the ground is shifting under emergency medicine. The rules and the playbook have changed. Efficiency will still be important as a correlate with patient satisfaction and therefore quality, but the new focus will be on value over volume. Moving more and more patients through acute care settings only to have poor clinical outcomes will no longer be tolerated. Stakeholders will have to see each patient as an opportunity for successful management and strategize to prevent complications and readmissions. This will not be business as usual.
Though these changes may still seem vague and futuristic, it is important for emergency medicine to begin grappling with its role in the new paradigm. Emergency medicine will always be at the interface of hospital-based and community-based care. Emergency physicians play a pivotal role in how patients with exacerbations of chronic disease are being managed. It is important to translate that vision into a detailed picture of the work we will do and the physical space, processes, and technology that we will need to do it. This is the first step in the journey of the reform-ready ED.
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Dr. Welch is a fellow with Intermountain Institute for Health Care Delivery Research, an emergency physician with Utah Emergency Physicians, and a member of the board of the Emergency Department Benchmarking Alliance. Dr. Augustine is the medical director of the emergency department at Mercy Hospital Anderson in Cincinnati, the director of clinical operations at EMP Management in Canton, a clinical associate professor in emergency medicine at Wright State University in Dayton, the chair of the Joint Commission's Hospital Professional and Technical Advisory Committee, and the vice president of the Emergency Department Benchmarking Alliance. Dr. Asplin is the president of the Fairview Medical Group in Minneapolis, has twice been named one of the 100 Most Influential Health Care Leaders by Minnesota Physician Publishing, and is the president of the American College of Emergency Physician's Quality and Performance Committee.