HFMA Express News - December 10, 2004

IN THIS WEEK’S ISSUE:

1. Billing Lawsuits Showing Trend Toward Dismissal
2. January 2005 Changes To Hospital Outpatient PPS
3. Provider Identifier Subject of HIPAA Conference Call
4. Medicare Advantage PPO and Drug Plan Regions Designated
5. HHS Secretary Thompson Resigns
6. Healthcare Revenues Rise in 2003
7. Inpatient Psychiatric Facility PPS Clarification And Correction
8. Quick Links
9. In the HFMA Resource Center

1. BILLING LAWSUITS SHOWING TREND TOWARD DISMISSAL

Dismissals of federal billing lawsuits in Michigan, California, and a magistrate’s recommendation of dismissal in Pennsylvania have hospitals hoping the actions signal the direction of future court decisions. In a similar case, however, a Mississippi judge has permitted discovery to proceed. Plaintiffs in the lawsuits alleged that the defendant hospitals’ uninsured billing and collection practices violate particular federal and state laws, including those that govern tax-exempt organizations.

Defendants in the eastern Michigan case were William Beaumont Hospital and the American Hospital Association. The defendant in the northern California case was Sutter Health. The magistrate in the federal district court for western Pennsylvania recommended that the court dismiss federal claims and decline jurisdiction over state claims in the case against the University of Pittsburgh Medical Center. That recommendation is under advisement by the judge. Defendants in the Mississippi lawsuit are Mississippi Baptist Medical Center, Mississippi Baptist Health System, and the AHA.

More information about the class action lawsuits is available from AHA’s Hospitals Caring for Communities web site.

2. JANUARY 2005 CHANGES TO HOSPITAL OUTPATIENT PPS

Effective January 1, 2005, Medicare will no longer pay for diagnostic mammography and computer-aided detection (CAD) services under the outpatient PPS; instead, these services will be paid under the Medicare physician fee schedule, CMS announced in a December 3 update notification.

The notification also describes changes to the outpatient PPS code editor (OCE) data files and PRICER logic that become effective January 1, 2005. The data files include changes made to APCs, HCPCS and CPT procedure codes, APC assignments, status indicators, modifiers, revenue codes, and OCE edits. Changes to the PRICER logic include:

• New outpatient PPS payment rates and coinsurance amounts
• Changes in calculating outliers for hospitals and community mental health centers
• Final wage index values

3. PROVIDER IDENTIFIER SUBJECT OF HIPAA CONFERENCE CALL

CMS’s Eighteenth National HIPAA Implementation Roundtable conference call, scheduled for 2 to 3:30 p.m. (EST) on December 15, will focus on the HIPAA national provider identifier (NPI) and give providers the opportunity to raise NPI implementation questions.

The final rule adopting the HIPAA standard unique identifier for healthcare providers was published in the January 23, 2004, Federal Register. Healthcare providers can begin applying for NPIs on the rule’s effective date (also the beginning of NPI implementation), May 23, 2005. All healthcare providers are eligible for assigned NPIs, but all HIPAA-covered entities (except small health plans) must adopt and begin using the NPIs by May 23, 2007.

The call-in number is (877) 203-0044, and the conference identification number is 1598382. Due to the high participation expected, CMS asks that callers dial in 15 minutes before the start of the meeting.

4. MEDICARE ADVANTAGE PPO AND DRUG PLAN REGIONS DESIGNATED

HHS announced Monday the regions for Medicare Advantage (MA) preferred provider organization (PPO) model health plans and Medicare prescription drug benefit administration. CMS has established 26 regions for MA PPOs and 34 for the prescription drug plans. Beginning in 2006, Medicare beneficiaries will be able to receive drug coverage through a prescription drug plan or Medicare health plan. According to CMS, the prescription drug benefit will rely on market competition to give Medicare beneficiaries the greatest access to their drugs at the lowest possible cost. Beneficiaries with employer-sponsored coverage may choose to keep it.

5. HHS SECRETARY THOMPSON RESIGNS

On December 3, HHS secretary Tommy Thompson announced that he is resigning the post he has held since 2001.

Thompson is the eighth member of Bush's 15-person first-term Cabinet to depart. Thompson said he intends to serve until February 4 or until the Senate confirms his successor.

6. HEALTHCARE REVENUES RISE IN 2003

Revenues for the nation's healthcare and social assistance industries rose 7 percent to $1.3 trillion in 2003, the U.S. Census Bureau reported November 22. The survey found that:

• Hospital revenues in 2003 reached $536 billion, an increase of 5.7 percent over 2002
• Nursing and residential care facility revenues increased 4.6 percent over the previous year to $127 billion
• Home healthcare services showed the strongest revenue growth in 2003, increasing 12 percent to $36 billion
• Physician office revenues increased 8.6 percent to $256 billion

Revenues include government reimbursement for patient services, patients' out-of-pocket payments, payments from private insurance plans, workers compensation, and other sources of funds. Estimates for tax-exempt firms include interest, dividends, gross contributions and grants, rents, and royalties.

7. INPATIENT PSYCHIATRIC FACILITY PPS CLARIFICATION AND CORRECTION

Last week’s HFMA Express News announced instructions to fiscal intermediaries for the implementation of the inpatient psychiatric facility (IPF) PPS and should have stated that the IPF PPS applies to critical access hospitals’ units. According to CMS, section 413.70(e) of the Code of Federal Regulations, Chapter 42, has been amended to clarify that “effective for cost reporting periods beginning on or after January 1, 2005, psychiatric units in CAHs will be paid under the IPF PPS.” For cost reporting periods beginning before January 1, 2005, payment is made on a reasonable cost basis, subject to the limitations under section 413.40.

8. QUICK LINKS

SNF BILLING TRANSMITTAL REPLACED. CMS has reissued instructions modifying the fiscal intermediary shared system requirement to allow for provider liability days on SNF and swing-bed facility inpatient bills. These instructions replace transmittal 253, dated July 23, 2004, which contained incorrect business requirement information.

HCPCS CODE FOR HOSPICE SERVICES. A hospice agency must use HCPCS code G0337, “Hospice Pre-Election Evaluation and Counseling Services,” on claims submitted for specified services provided by a physician who is either the medical director or an employee of the agency.

TAP SETTLES LUPRON SUIT. According to a Boston Globe report, TAP Pharmaceutical Products has agreed to pay $150 million to consumers and private insurers to settle claims that TAP over inflated the price of its Lupron drug.

9. IN THE HFMA RESOURCE CENTER

UPDATED THROUGH NOVEMBER! HFMA’S INTERNET GUIDE TO MEDICARE CODING AND BILLING INSTRUCTIONS. Use this handy billing compliance reference to be sure you are up to date on important Medicare coding and billing instructions.

hfm TOOLBOX: RECEIVABLES ASSET BEHAVIOR DASHBOARD. Use these examples as guidelines to develop a performance dashboard to monitor the asset value of your organization's receivables.

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