HFMA Express News - August 27, 2004

IN THIS WEEK’S ISSUE:

1. New Overtime Regulations Go Into Effect
2. CMS Seeks Help with Drug Benefit Subsidy Options
3. States Advised To Give Beneficiaries More Control When Selecting Long-Term Care Services
4. JCAHO Panel To Study Cultural And Language Issues In Hospitals
5. Consumer-Directed Health Care—More Problem Than Solution?
6. Medicare Carrier Identifies Top Ten Billing Errors
7. Quick Links
8. New in the HFMA Resource Center

1.   NEW OVERTIME REGULATIONS GO INTO EFFECT

The much-maligned new overtime regulations, reflecting the Department of Labor’s revisions and clarification of overtime provisions of the Fair Labor Standards Act, became effective August 23. The regulations have been criticized by members of Congress and labor organizations who say that the changes will penalize millions of workers. The Bush administration, however, contends that such criticism is not warranted, arguing that the changes update needed worker protections while reducing litigation costs for employers. The final rule revises both the salary and job-duties tests used in determining exempt status. The changes, the Department of Labor says, are intended to account for workplace changes and federal case law developments that have occurred since the regulations were previously changed (1949, for job-duty requirements).

The final rule was published in the April 23 Federal Register, following a comment period in which 75,280 employees, employers, labor unions, and others responded. It nearly triples the current $155 per week minimum salary level required for exemption from overtime to $455 per week and requires exempt highly compensated employees to “customarily and regularly” perform exempt duties.

2.   CMS SEEKS HELP WITH DRUG BENEFIT SUBSIDY OPTIONS

CMS is asking current and prospective sponsors of health plans that provide retiree drug benefits for their feedback on its proposed implementation of the employer/plan sponsor subsidy provided for in the Medicare Prescription Drug, Improvement, and Modernization Act (MMA). In a discussion paper on the issues involved, CMS laments the considerable uncertainty that surrounds the question of how employers and unions will react to the new Medicare drug benefit, and the lack of information included with the August 3 proposed rule.

The CMS paper lists the following policy goals for the subsidy:

Maximize the number of retirees with employer-provided retiree drug coverage, and maximize the generosity of their coverage

Preclude “windfalls” (by assuring that plan sponsors contribute to retiree drug coverage at least as much as Medicare pays them as a subsidy)

Minimize administrative burden while maximizing flexibility for employers and unions

Limit overall budgetary costs
Consider the proposed options, CMS asks, and let them know what actions employers are likely to take related to each. Also needed are suggestions of how employers and unions might use the agency’s broad waiver authority to facilitate getting retirees their current high-quality drug benefits under these options.

3.  STATES ADVISED TO GIVE BENEFICIARIES MORE CONTROL WHEN SELECTING LONG-TERM CARE SERVICES  26

In an August 17 letter directed to states, CMS encouraged Medicaid directors to adopt approaches that would give elderly and disabled individuals more control over how they obtain the long-term care services they need, according to an announcement released by the agency. The letter included several examples of assistant service delivery models that can empower beneficiaries to achieve the goal of community living and personal control. CMS notes that paying solely for institutional care, a practice favored by the Medicaid program, limits beneficiaries’ access to modern options for living in the community. The letter also provides specific examples of successful programs that give beneficiaries more control and result in more community participation without raising program costs.

4. JCAHO PANEL TO STUDY CULTURAL AND LANGUAGE ISSUES IN HOSPITALS 28

The Joint Commission on Accreditation of Healthcare Organizations (JCAHO) has formed a panel of national experts to assist in a 2.5-year comprehensive study to address language and cultural issues in hospitals, according to an August 20 press release. Panel members will advise JCAHO staff on research tools for collecting data at site visits at 60 hospitals in 2005 to explore how these facilities are addressing the diverse cultural and linguistic needs of their patients. JCAHO will use the study’s findings to inform healthcare practitioners about the state of culturally and linguistically appropriate services in hospitals, and assist with its efforts to reduce disparities in healthcare delivery.

5.  CONSUMER-DIRECTED HEALTH CARE — MORE PROBLEM THAN SOLUTION?

The high-deductible plans that are a key characteristic of consumer-directed health care (CDHC) not only could fail to reduce healthcare costs, but also could worsen health outcomes if patients don’t get needed preventive and chronic condition care, says Karen Davis, PhD, president of the Commonwealth Fund. In a recent article for the August issue of Health Services Research, “Consumer-Directed Health Care: Will It Improve Health System Performance?,” Davis advocates care management as a more effective alternative to the increased cost sharing of CDHC.

A high-performance healthcare system would be more effective at reducing costs than cutting consumer spending across the board, Davis says. But achieving high performance requires public reporting of cost and quality data, investment in IT, development of guidelines and standards, rewarding high-quality performance including improved efficiency and better management of patients with high-cost conditions, and investment by the federal government in healthcare quality research.

6.  Medicare Carrier Identifies Top Ten Billing Errors

Duplicate claims constitute the most common billing error made by healthcare providers, according to TrailBlazer Health Enterprises, LLC, a CMS contracted intermediary. TrailBlazer has posted providers’ ”Top Ten Billing Errors” on its web site. The list of top billing errors, identified using a data analysis program, will be updated on a quarterly basis. It includes a definition of each error type and a possible resolution of the error.

Top billing errors in ranked order are as follows:
(1) claims submitted are exact duplicates of previous claims submitted
(2) service is bundled into payment for other services
(3) facility information is not included on the claim
(4) patient is not eligible for Medicare
(5) the service billed is deemed not medically necessary
(6) the provider number is missing
(7) Medicare is the secondary payer for the claim
(8) the service billed is not covered by Medicare
(9) the unique physician identification (UPIN) number is missing or
      invalid
(10) an incorrect modifier is used.

7.  QUICK LINKS

HFMA PRESIDENT & CEO MAKES TOP 100 MOST POWERFUL
LIST. - Once again, Richard L. Clarke, FHFMA, President and CEO of HFMA, is ranked among Modern Healthcare magazine's 100 Most Powerful People in Healthcare. Regarding the distinction, Clarke says, "Within this context, a powerful person is one who can have an influence over healthcare issues nationally. My position at HFMA and HFMA's large membership give me that opportunity."

OIG POSTS ANNUAL REPORT.  - The OIG posted the FY03 Annual Report of the State Medicaid Fraud Control Units (MFCU). Additionally, the OIG posted on its website examples of the July 2004, criminal enforcement actions.

DoD CORRECTS FINAL RULE 1027.  - The Department of Defense (DoD) has published a final rule correcting the previous version published on July 28 implementing sections of the National Defense Authorization Act for FY02. The rule terminates the Individual Case Management Program and provides additional benefits for certain eligible active duty dependents by amending the TRICARE regulations governing the Program for Persons with Disabilities.

NEW CMS ARTICLE PROVIDED TO CLARIFY “INCIDENT TO” SERVICES 29 - A special article on the subject of "Incident To" services is now available on the CMS Medlearn Matters web site. The purpose of the article is to clarify "incident to" services billed by physicians and nonphysician practitioners to carriers.

8.   NEW IN THE HFMA RESOURCE CENTER

READY-TO-USE PRESENTATION: MEDICARE OUTPATIENT PPS PROPOSED RULE FOR CY05 - Use this convenient presentation to brief board members and/or staff on the proposed calendar year 2005 changes to the Medicare outpatient payment system.

PPS ROUNDUP: FINAL MEDICARE INPATIENT REHABILITATION  UPDATE FOR FY05 -  Use this summary as a quick reference to key points of the notice updating the PPS rates for inpatient rehabilitation facilities for 2005, including information on case-mix groups, and outlier payments.

PPS ROUNDUP: FINAL MEDICARE SNF UPDATE FOR FY05 - Use this summary as a quick reference to the key points of the notice updating the payment rates under the SNF PPS for 2005, including implementation of important MMA provisions.

For customer service, send an e-mail to HFMA’s Member Service Center or call (800) 252-HFMA, and press 2.