HCA Holdings 2012 Annual Report Download - page 17

Through DRA 2005, Congress has expanded the federal government’s involvement in fighting fraud, waste
and abuse in the Medicaid program by creating the Medicaid Integrity Program. Among other things, DRA 2005
requires CMS to employ private contractors, referred to as Medicaid Integrity Contractors (“MICs”), to perform
post-payment audits of Medicaid claims and identify overpayments. MICs are assigned to five geographic
regions and have commenced audits in states assigned to those regions. The Health Reform Law increased
federal funding for the MIC program beginning in federal fiscal year 2011. In addition to MICs, several other
contractors and state Medicaid agencies have increased their review activities. The Health Reform Law also
expands the RAC program’s scope to include Medicaid claims by requiring all states to enter into contracts with
RACs to audit payments to Medicaid providers.
Managed Medicaid
Managed Medicaid programs enable states to contract with one or more entities for patient enrollment, care
management and claims adjudication. The states usually do not relinquish program responsibilities for financing,
eligibility criteria and core benefit plan design. We generally contract directly with one of the designated entities,
usually a managed care organization. The provisions of these programs are state-specific.
Enrollment in managed Medicaid plans has increased in recent years, as state governments seek to control
the cost of Medicaid programs. However, general economic conditions in the states in which we operate may
require reductions in premium payments to these plans and may reduce enrollment in these plans.
Accountable Care Organizations and Bundled Payment Initiatives
The Health Reform Law requires HHS to establish a Medicare Shared Savings Program (“MSSP”) that
promotes accountability and coordination of care through the creation of Accountable Care Organizations
(“ACOs”). The program allows certain providers and suppliers (including hospitals, physicians and other
designated professionals) to voluntarily form ACOs and work together along with other ACO participants to
invest in infrastructure and redesign delivery processes to achieve high quality and efficient delivery of services.
The program is intended to produce savings as a result of improved quality and operational efficiency. ACOs that
achieve quality performance standards established by HHS will be eligible to share in a portion of the amounts
saved by the Medicare program. HHS has significant discretion to determine key elements of the program. In
2011, CMS, the HHS Office of Inspector General (the “OIG”) and certain other federal agencies released a series
of rules and guidance further defining and implementing the MSSP. These rules and guidance provide for two
different ACO tracks, the first of which allows ACOs to share only in the savings under the MSSP. The second
track requires ACOs to share in any savings and losses under the MSSP but offers ACOs a greater share of any
savings realized under the MSSP. As authorized by the Health Reform Law, the rules and guidance also provide
for certain waivers from fraud and abuse laws for ACOs. CMS has approved over 200 ACOs to participate in the
MSSP.
The Health Reform Law created the Center for Medicare and Medicaid Innovation with responsibility for
establishing demonstration projects and other initiatives in order to identify, develop, test and encourage the
adoption of new methods of delivering and paying for health care that create savings under the Medicare and
Medicaid programs while improving quality of care. One initiative announced by the Center for Medicare and
Medicaid Innovation is a voluntary bundled payment initiative involving over 400 participants that will link
payments to participating providers for services provided during an episode of care. In addition, the Health
Reform Law requires HHS to establish a separate five-year voluntary, national pilot program on payment
bundling for Medicare services beginning no later than January 1, 2013. Under the program, providers agree to
receive one payment for services provided to Medicare patients for certain medical conditions or episodes of
care. The Health Reform Law also provides for a bundled payment demonstration project for Medicaid services.
HHS may select up to eight states to participate, and these state programs may target particular categories of
beneficiaries, selected diagnoses or geographic regions of the state. The selected state programs will provide one
payment for both hospital and physician services provided to Medicaid patients for certain episodes of inpatient
care.
13