In the News

AARC Reacts to CMS Database Release

Bookmark and Share

May 9, 2013

Webcast: Thursday, May 30

AARC reacted to the public release of a Medicare database that shows disparities in billable charges from one hospital to the next, many of which are located within the same geographic location. The Association will hold a webcast with Rick Ford, RRT, FAARC, on Thursday, May 30. He will discuss the implications and opportunities for respiratory therapists.

In an effort to be more transparent with regard to value-based purchasing, the Centers for Medicare and Medicaid Services (CMS) released a public database yesterday outlining inpatient charges, reimbursement, and volume information for the top 100 Diagnostic Related Groups (DRGs) for most hospitals in the U.S. 

It is the belief that public disclosure of this information will allow consumers to make more informed decisions about their care.  “Public criticism of hospital billing practices has always been a point of contention for patients, but we need to be cautious in interpreting this information,” said George Gaebler, AARC President. He says there is no quality of care information or indigent care statistics published with the report.

Susan Gallo, AARC representative to the AMA CPT Health Care Professional Advisory Committee, cautions RTs not to make kneejerk reactions to the discrepancies in billable charges. “This information, while accurate, is a misrepresentation of the actual costs that individuals and payers are paying.  Almost no one actually pays the official rates.”

She noted that CMS pays a set fee based on the DRG so that regardless of the amount of care patients receive or their length of stay in the hospital, Medicare pays the same set amount. Medicaid generally pays lower than Medicare.  Insurance companies also pay a set fee based on other criteria, which is negotiated in advance with the hospitals. 

She adds, “Managers and respiratory therapists need to be aware of this variability in information.  They need to know how to respond to patients and families if asked about this recent release.”

While the differences in charges may create the most discussion, there are opportunities for the profession with publication of this report. “Department managers now have a unique opportunity to gather information on respiratory-specific DRGs in their own organization that they may not have previously had access to,” says Bill Cohagen, chair of the AARC’s Management Section.

Of particular interest for department heads are volume statistics and hospital reimbursement by DRG. This information is laden with opportunity for managers trying to add value to their organization, according to Gaebler. “This level of business intelligence offers managers an improved insight into the financials of respiratory specific DRGs.” He said that RT managers who combine this data with expense and readmission figures may now find opportunities that can result in places where they can save money for their hospitals.

You may access this information and download it into an Excel spreadsheet by clicking on the CMS link below:

CMS Medicare Provider Charge Data