Understanding Washington: a nephrologist's perspective from inside the Beltway.

The major principles that drive U.S. federal health policy-making are: (1) fixed or reduced costs, (2) ensured outcomes (or no evidence of undertreatment), (3) streamlined administration, and (4) political viability. A corollary is that providers are uniquely sensitive to financial incentives. Understanding these principles is vital to understanding federal health policy. Critically, these principles are nonpartisan and have been supported and used by all administrations since President Reagan. This article examines the end-stage renal disease (ESRD) prospective payment system, colloquially called "The Bundle," in the context of these major principles. Successful health policy, successful legislation, and successful regulation building all require executive leadership, mutual trust, and compromise. This is demonstrated by the events surrounding the passage of the Medicare inpatient prospective payment system, which governs hospital reimbursement for Medicare beneficiaries, including those not covered in the ESRD program. Given that the ESRD benefit consumes 6.3% of the Medicare budget for approximately 2% of Medicare beneficiaries, if nephrology is to experience future success, we must change how both policymakers and the wider field of medicine perceive our specialty. Understanding the major principles behind health care policy may facilitate this goal.

State health care financing strategies for children with intellectual and developmental disabilities.

We provide the first descriptive summary of selected programs developed to help expand the scope of coverage, mitigate family financial hardship, and provide health and support services that children with intellectual and developmental disabilities need to maximize their functional status and quality of life. State financing initiatives were identified through interviews with family advocacy, Title V, and Medicaid organizational representatives. Results showed that states use myriad strategies to pay for care and maximize supports, including benefits counseling, consumer- and family-directed care, flexible funding, mandated benefits, Medicaid buy-in programs, and Tax Equity and Fiscal Responsibility Act of 1982 funding. Although health reform may reduce variation among states, its impact on families of children with intellectual and developmental disabilities is not yet clear. As health reform is implemented, state strategies to ameliorate financial hardship among families of children with intellectual and developmental disabilities show promise for immediate use. However, further analysis and evaluation are required to understand their impact on family and child well-being.

Modernizing Medicaid eligibility criteria for children with significant disabilities: moving from a disabling to an enabling paradigm.

Children with significant disabilities may qualify for Medicaid benefits, regardless of household income, if their state elects to offer the Tax Equity Fiscal Responsibility Act (TEFRA) option. However, a significant number of children with serious medical problems presently are being denied eligibility for, or terminated from, this Medicaid program. This Article describes the ways in which the existing health insurance system inadequately meets the needs of children with significant disabilities, recounts the history and development of the TEFRA Medicaid coverage option, and analyzes the eligibility criteria used by the various states. It proceeds to consider how disability should be legally defined in the health care context and proposes reforms to modernize the eligibility standards so that these benefits can be more effectively, efficiently, and fairly allocated. To accomplish this goal, the federal statute and regulation that define disability, as well as corresponding state laws, must be reformed so that the law can keep pace with advances in modern medical science, and people with disabilities are not, in effect, penalized for receiving currently accepted preventative care that maintains health but will never cure the underlying disease.

Trends in the supply of inpatient rehabilitation facilities services: 1996 to 2004.

OBJECTIVES: Describe the supply of inpatient rehabilitation facilities (IRFs) services in 1996 and examine changes between 1996 and 2004, including the impact of the IRF prospective payment system (PPS) in 2002 on organizational trends. DESIGN: Retrospective pre-post design. SETTING: Freestanding and subprovider (distinct-part units) IRFs. PARTICIPANTS: IRFs (N=1424), including 257 freestanding IRFs and 1167 IRF units reported in the Healthcare Cost Report Information System database, from years 1996 to 2004. INTERVENTIONS: Not applicable. MAIN OUTCOME MEASURES: Number of IRF openings, IRF closures, beds, and inpatient days. RESULTS: The number of IRFs grew from 1037 to 1183 between 1996 and 2001 and grew to 1235 between 2001 and 2004. The likelihood of IRF closures trended lower after PPS, and there was a significant increase in the likelihood of openings when PPS was introduced. For-profit, rural, and small IRFs were more likely to open over the entire period. There was a 12.9% increase in the number of total inpatient days, somewhat less than the 15.7% growth in IRF beds over the period. There was no impact of PPS on beds available but a significant decline in total inpatient days after PPS. CONCLUSIONS: Inpatient days rose under the Tax Equity and Fiscal Responsibility Act and declined after 2002. Yet the likelihood of openings and closures did not appear to respond to these changes, perhaps because they were modest compared with changes in local IRF markets. The IRF PPS did little to affect service distribution in less well-served areas, although we did find growth in rural areas. Occupancy rates in 2004 were close to rates at the start of the period (70%). This observation implies that IRFs were implementing strategies to recruit a sufficient number of patients, even though bed numbers were increasing and length of stay was declining. Consequently, policy that limits the potential of IRFs to increase patient admissions, such as the limits on admissions to IRFs of patients with conditions other than those included in the 75% rule, is likely to produce substantial decreases in total inpatient days.

Insuficiencia financiera y gasto sanitario en España / Financial insufficient and health expenditure in Spain

La aprobación de un nuevo modelo de financiación autonómica y la publicación de las liquidaciones en sus dos primeros años de vigencia (2002 y 2003) ha puesto de manifiesto la insuficiencia en la financiación sanitaria para muchas regiones, lo cual ha sido el motivo principal del reciente pacto para su mejora alcanzado en septiembre de 2005. En este artículo se analiza el sistema de financiación territorial de competencias sanitarias, así como el gasto en esta partida y la definición de su posible déficit para mostrar las diferencias existentes entre regiones. Finalmente, tras algunos comentarios y observaciones, se cierra el trabajo con un apartado de resultados y consideraciones finales

Approval of a new regional community financing model and publication of the results in its first two years (2002 and 2003) has shown the inadequacy of health care financing for many regions (this being the main reason for the recent agreement to improve it reached in September 2005). In this paper, health care financing, expenditure and the definition of budget deficit are analysed in order to show differences among regions. Finally, after some comments and observations, the paper is concluded with a section on results and final considerations

Trends in Medicare disproportionate share (DSH) distribution in US hospitals: 1996-2003.

Implemented in 1986, Medicare's disproportionate share (DSH) adjustment is intended to recognize hospitals' additional resource investment in caring for low-income patients. This project analyzed changes in the DSH percentage between 1996 and 2003 and examined the association between selected hospital characteristics and such changes. Results obtained revealed some interesting findings. First, minimal changes in DSH percentage occurred during the period 1996-1999 with a hike in that ratio in 2000-2001. However, even with the absence of any legislative or executive changes to the DSH threshold or formula during 2002 and 2003, significant increases occurred during 2001-2003 (11 percent increase between 2001 and 2003). Such an increase may be caused by the nation's economic situation during that timeframe (i.e., more people depending on public programs for coverage).

The TEFRA medicaid eligibility option for children with severe disabilities: a national study.

The Tax Equity and Fiscal Responsibility Act (TEFRA) Medicaid Eligibility Option, also known as the Katie Beckett Option, was developed to allow children with disabilities from near-poor and middle-income families to qualify for Medicaid. TEFRA has been available since 1982; however, little is known about the number of children served and their qualifying disability. This first national study found that 20 states enrolled nearly 25,000 children in 2001. Only 10 of these states allowed children to qualify because of a mental health disability. Additional research is needed to understand the role of TEFRA in providing insurance to children with disabilities.

It was 20 years ago today ... some say it's complex and vulnerable to political whims, but Medicare's PPS has helped impose order on hospital finances.

In October 1983, Medicare launched a new payment system that would no longer write hospitals a blank check. It was called the prospective payment system and became known simply as the PPS. With its 20-year anniversary looming, the program's fundamental strengths and weaknesses have become apparent. Although some say it's vulnerable to politics, most agree it has imposed order on hospital finances.

Medicare's payment system: its effect on discharges to skilled nursing facilities from rehabilitation hospitals.

OBJECTIVE: To determine if Medicare's payment system for rehabilitation hospitals encourages discharges to skilled nursing facilities (SNFs). Medicare payments to hospitals are based on limits derived from a hospital's average allowable patient charge during a base year. Thereafter, payments are capped, but hospitals receive additional incentive payments if succeeding costs are reduced. It was a hypothesis of this study that discharges to SNFs would increase after the base year. In this way, rehabilitation hospitals would limit high-cost patients when under reimbursement limitation. METHODS: Medicare claims data for 162,239 discharges from 69 rehabilitation hospitals between 1987 and 1994 were analyzed. After controlling for patient and provider characteristics, we compared the odds of being discharged to a SNF before, during, and after the base year. RESULTS: Before and during the base year, 4.7% and 6.6% of patients were discharged to a SNF. After the base year, 9% of patients were sent to a SNF. After controlling for temporal and seasonal trends, as well as for patient and provider characteristics, those discharged after the base year were significantly more likely to be sent to a SNF than those discharged during the base year. These odds increased with increasing length of stay in the rehabilitation hospital. For those with a length of stay of 29 days (75th percentile) the odds increased by 11% (odds ratio, 1.11; 95% confidence interval, 1.04-1.18). CONCLUSIONS: The incentives of Medicare's reimbursement system may encourage an increase in the percentage of patients discharged to SNFs after the base year. These findings have significant implications regarding the structure of Medicare's prospective payment system currently planned for this class of hospital.

Implications of the Balanced Budget Act of 1997 for general hospital psychiatry inpatient units providing medical and psychiatric services.

Since 1983, the Tax Equity and Fiscal Responsibility Act (TEFRA) of 1982 has determined payment for services in most psychiatry units located in general hospitals. This system provided reimbursement on a cost-per-discharge basis. In 1997, a Balanced Budget Act (BBA) was passed by Congress which has replaced the TEFRA system of 1982 (H.R 2015). As a result of this law, many general hospital psychiatry units, particularly those that address the needs of elderly patients with high levels of medical comorbidity, will experience a reduction in their reimbursement when compared with the old TEFRA system. This reduction will average 7.8% and affect up to 84% of health care organizations. Those with higher TEFRA target amounts, such as is found with most general hospital programs, will have proportionately greater reductions. This article summarizes legislation affecting Medicare reimbursement and suggests a service reorganization approach that would allow billing to both medical and psychiatric payers. Finally, it encourages active participation in psychiatric access and quality standards development and with legislation, such as The Medicare Psychiatric Hospital Prospective Payment System Act of 1999.

Provisions of the Balanced Budget Act challenge IDS care coordination patterns.

Provisions of the Balanced Budget Act of 1997 that focus on postacute services have important ramifications for integrated delivery systems (IDSs) because changes in payment rates for such services create financial incentives to alter patient-flow patterns among acute and postacute care services. In particular, IDSs should understand the provisions of the act that deal with a prospective payment system for skilled nursing services, the definition of a transfer from an acute care hospital, interim and prospective payment systems for home health care, limits imposed by the 1982 Tax Equity and Fiscal Responsibility Act for acute rehabilitation providers, a PPS for acute rehabilitation providers, TEFRA limits for long-term acute care, and limits on outpatient therapy services.

Medicare risk contracting: analyzing managed care for the aging population in the USA.

This paper focuses on Medicare risk contracting in the USA. The issue of the current method of reimbursement versus Medicare risk contracting is explored. Risk sharing and payment mechanisms are described and analyzed. The strengths and weaknesses (score-card) of Medicare beneficiaries entering HMOs are reviewed. Finally, the issue of selection bias in Medicare HMOs is discussed regarding future implementation strategy.

Medicaid TEFRA option in Minnesota: implications for patient rights.

This research studied a special-needs population under age 18 who had both private insurance and Medicaid coverage through the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) option. We found that children with managed care plans, particularly health maintenance organizations (HMOs), tended to incur higher total expenses to TEFRA than children with indemnity plans. Our findings also show that managed care in Minnesota tends to provide the same or marginally better coverage as indemnity plans do for core medical items but much less coverage for ancillary items such as home care, therapies, and durable medical equipment.