Note on CMS Proposed Hospital Payment Rule
On April 14th the Centers for Medicare and Medicaid Services (CMS) released proposed revisions to its hospital reimbursement policy in a 1,205-page report. Following its release, it appears there has been some confusion as to what the proposal’s implications might be for Cepheid.The full CMS report is in line with Cepheid’s expectations and previous discussions on the matters of reimbursement at various conferences. We view the report as positive relative to the need for MRSA, and potentially other Healthcare Acquired Infection (HAI), surveillance programs.
As a leading cause of many of the Healthcare Associated Conditions (HACs) proposed in the report, MRSA continues to be addressed by CMS in its expanded list of HAI proposals for FY2009, as well as concurrent initiatives in ICD-9 coding and discussions of data reporting requirements.
As written in the full CMS report:
“MRSA is currently addressed by the HAC payment provision. For every infectious condition selected, MRSA could be the etiology of that infection. For example, if MRSA were the cause of a vascular catheter-associated infection (one of the eight conditions selected in the FY 2008 IPPS final rule with comment period), the HAC payment provision would apply to that MRSA infection.” (See page #125) Therefore, hospitals with patients that acquire infections, such as the one described above, will not receive reimbursement for the extended management of those patients.
Another key point of confusion is in regards to the prevention of MRSA colonization versus the prevention of MRSA infection. Again, as written in the full CMS report:
“As we noted in the FY 2008 IPPS final rule with comment period, colonization by MRSA is not a reasonably preventable HAC according to the current evidence-based guidelines; therefore, MRSA does not meet the reasonably preventable statutory criterion for an HAC . . . In addition, in last year’s final rule with comment period, we noted that there is no CC/MCC code available for MRSA, and therefore it also does not meet the codeable CC/MCC statutory criterion for an HAC. Only when MRSA causes an infection does a codeable condition occur.” (See page #125)
We agree with this conclusion, as MRSA colonization is not preventable, but MRSA infections are — which makes MRSA surveillance all the more important to healthcare institutions. A few reports on the CMS proposal have added to the confusion, inferring that MRSA infections are not preventable — which is not correct. MRSA is the causative organism in the majority of hospital-associated infections and, of those infections, MRSA is associated with over 20% of the deaths.
As written in the full CMS report:
“October 2007, the CDC published in the Journal of the American Medical Association an article citing high mortality rates from MRSA, an antibiotic-resistant “superbug.” The article estimates 19,000 people died from MRSA infections in the United States in 2005. The majority of invasive MRSA cases are health care-related—contracted in hospitals or nursing homes—though community-acquired MRSA also poses a significant public health concern.” (See page #125)
Looking ahead, CMS is proposing to put MRSA on the list of reportable conditions under the Reporting Hospital Quality Data for Annual Payment Update for FY2011 and beyond. This indicates strong interest in gathering hospital data on the incidence of MRSA infections by Medicare beneficiaries.
Conclusion
- Cepheid sees the new CMS report as supportive of the need for initiation of MRSA and potentially other HAI surveillance programs.
- The CMS report indicates that proposed curtailment of reimbursement is condition-specific and not bug-specific.
- With MRSA as a leading causative organism to HAIs, institutions will need to reduce the incidence of MRSA in order to reduce their overall infection rates.
- The entire CMS report can be found at: http://www.cms.hhs.gov/AcuteInpatientPPS/downloads/CMS-1390-P.pdf
Michele M. Schoonmaker, Ph.D.
Director, Government Affairs
Cepheid
This note contains forward-looking statements that are not purely historical regarding Cepheid's or its management's intentions, beliefs, expectations and strategies for the future, including those relating to reimbursement policies of CMS. Because such statements deal with future events, they are subject to various risks and uncertainties, and actual results could differ materially from the company's current expectations. Factors that could cause actual results to differ materially include risks and uncertainties such as those relating to: future changes in CMS reimbursement policies and procedures; unforeseen regulatory changes in the U.S. or other countries; and the fact that reimbursement policies and procedures and regulatorychanges are inherently unpredictable. Readers should also refer to the section entitled "Risk Factors" in Cepheid's Annual Report on Form 10-K and its other reports filed with the Securities and Exchange Commission. All forward-looking statements and reasons why results might differ included in this release are made as of the date of this press release, based on information currently available to Cepheid, and Cepheid assumes no obligation to update any such forward-looking statement or reasons why results might differ.