Five hospital groups are demanding another delay in the implementation of the Medicare prospective payment system for outpatient care, while others are taking a less-aggressive approach.
Led by the American Hospital Association, the groups last week sent a sharply worded, five-page letter to HHS Secretary Donna Shalala and HCFA Administrator Nancy-Ann Min DeParle insisting on a second delay, at least until Oct. 1.
The letter bore the signatures of officials from the AHA; the Association of American Medical Colleges; the National Association of Public Hospitals and Health Systems; the Premier hospital alliance; and VHA, another hospital alliance.
"In view of the material operations deficiencies and lack of testing identified below, the decision of HCFA to implement the outpatient PPS on Aug. 1, 2000, is arbitrary, capricious and an abuse of discretion," the July 18 letter said. "It is evident the system cannot be implemented on Aug. 1 and, accordingly, we reluctantly conclude that a delay is required."
The original start date was July 1, but HCFA pushed that back to Aug. 1 last month (June 12, p. 8).
The coalition said it wants the PPS postponed to a date "not earlier than 60 days after all of the deficiencies described above and in prior correspondence are satisfactorily cured, and the provider community and fiscal intermediaries are allowed an opportunity for full-scale, rigorous testing of the new system."
If the PPS is not postponed, the coalition warned that software problems could delay payment to hospitals and "lead to insolvency for providers with limited resources"--despite the letter's acknowledgement that hospitals will receive $800 million in additional revenue in the PPS' first year alone.
"Hospitals are making a sacrifice by delaying the PPS, and beneficiaries are making a sacrifice by delaying the PPS," said Herb Kuhn, Premier's vice president of advocacy. "We all need to roll up our sleeves and do it as quickly as possible, but we also need to do it right."
Noticeably absent from the July 18 letter were signatures from the Catholic Health Association and the Federation of American Health Systems, now known as the Federation of American Hospitals, both of which had signed onto the coalition's previous letters nagging HCFA about the PPS implementation.
After Catholic healthcare executives met separately with HCFA Deputy Administrator Mike Hash last week, the CHA sent HCFA its own letter seeking a delay. The July 20 letter raises many of the same issues that the coalition's did, but the difference was in the diplomatic wording.
"We respectfully request that HCFA delay (PPS) implementation until preparations are complete," the CHA's letter said.
The federation also is meeting privately with HCFA.
"Our members remain concerned about the PPS, and we are dealing in direct contact with HCFA," said federation spokesman Dan Boston.
Carmela Coyle, the AHA's senior vice president for policy, said the coalition is still in contact with the CHA and the federation on PPS issues, but she declined to comment on why the two groups did not sign the July 18 letter.
Other members of the AHA-run coalition denied that they were being too heavy-handed with HCFA.
"I don't think we would be doing our job if we weren't looking at the impact on our members and, ultimately, the beneficiaries," said Edward Goodman, VHA's vice president of public policy. "How can you be too aggressive in making your point, when everything is backed with solid rationale and examples?"
In addition to making peer groups uncomfortable, the coalition's actions appear to have soured its once-pleasant working relationship with HCFA.
After issuing the final rule on the PPS in April, HCFA had given hospitals a timetable detailing when the agency expected to have the various stages of implementation completed. HCFA also granted hospitals the 30-day delay last month, noting the late release of the expanded claim form necessary for the new PPS and other "unavoidable delays."
But recently, HCFA did not respond to at least two requests by hospital groups for an updated timetable. Several sources told MODERN HEALTHCARE that was because every time HCFA missed a deadline, the AHA and other groups would quickly grouse about it, vexing some members of HCFA's staff.
Hospitals, however, insist that they still have a good working relationship with HCFA. "We're continuing to work together and are in touch on a weekly basis," Coyle said. "The relationship has been collegial. A timetable certainly would've been helpful, but we haven't had one (recently)."
A HCFA spokesman said only that the PPS' start date was still set for Aug. 1, and added that the agency is hosting a town hall-style meeting to discuss the PPS
July 25 at its Baltimore headquarters.
Meanwhile, the American Association of Retired Persons said it will "strongly oppose" any further delay in the PPS because it would force Medicare beneficiaries to wait even longer before they see the decreases in their coinsurance payments promised under the PPS.
"We're disappointed the hospitals have asked for another delay," said Kirsten Sloane, a lobbyist for the politically powerful AARP. "Whenever you have a new payment system, it's complex and at some point in time, you have to move forward with it and work out the glitches later."