HFMA Express News - December 17, 2004

IN THIS WEEK’S ISSUE:

1. NUBC Releases New Data Set
2. Medicare Payments Increase for Health Clinics and Centers
3. CMS releases new codes for immunosuppressive drugs
4. EPA Administrator Nominated for HHS Secretary
5. MedPAC Deliberates on 2006 Payment Increases, Specialty Hospitals
6. Growing Healthcare Costs for the Elderly Present Challenges for Future Financing
7. CMS Plans to Reduce Medicare Payment Errors
8. Quick Links
9. In the HFMA Resource Center

1. NUBC RELEASES NEW DATA SET

The National Uniform Billing Committee (NUBC) today announced the start of a 45-day public comment period for the new UB-04 data set and form to replace the UB-92. The UB-04 includes a number of improvements and enhancements resulting from nearly four years of surveys and study.

The NUBC is requesting feedback via an online survey to better understand the timelines and transition issues surrounding the implementation of the UB-04. The NUBC will review the survey results at the next NUBC public meeting in Baltimore on February 22 and 23 and consider an implementation schedule for the UB-04.

2. MEDICARE PAYMENTS INCREASE FOR HEALTH CLINICS AND CENTERS

On December 10, CMS published a transmittal announcing the CY05 payment rate increases for rural health clinics (RHCs) and federally qualified health centers (FQHCs). The RHC upper payment limit per visit increased from $68.65 to $70.78. The upper payment limit per visit for urban FQHCs rose from $106.58 to $109.88, and the maximum Medicare payment limit per visit for rural FQHCs increased from $91.64 to $94.48. The 2005 rates for RHCs and FQHCs each reflect a 3.1 percent increase over the 2004 rates, in accordance with the rate of increase in the Medicare Economic Index.

The transmittal also notes that, in accordance with the Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of 2003, services provided by a RHC or FQHC physician (or other type of practitioner identified as being excluded from SNF consolidated billing) to a skilled nursing facility (SNF) resident in a Part A-covered stay are not subject to consolidated billing.

Before the enactment of the MMA, RHC and FQHC services were not on the list of services excluded from the SNF consolidated billing requirement. Section 410 of the MMA enables RHC and FQHC services provided by these practitioners to retain their separate identity as “excluded" practitioner services. Therefore, these services will be separately billable when furnished to a SNF resident during a covered Part A stay. The transmittal becomes effective January 1, 2005. CMS has told the intermediary it does not have to retroactively adjust individual RHC/FQHC bills paid at previous upper payment limits; however, the intermediary does have the discretion to make adjustments to the interim payment rate or a lump sum adjustment to total payments already made to take into account any excess or deficiency in payments to date.

3. CMS RELEASES NEW CODES FOR IMMUNOSUPPRESSIVE DRUGS

Effective January 1, 2005, in accordance with the MMA, Medicare will pay a separately billable supplying fee of $24.00 to a pharmacy for each filled prescription of immunosuppressive drugs, oral anticancer drugs, and oral anti-emetic drugs. In addition, Medicare will also pay a $50 fee for the initial supplied prescription of the immunosupressive drugs during the first month following a patient’s transplant. The codes for these supplying fees are G0370 and G0369, respectively. The implementing instructions, dated December 10, also provide for a dispensing fee of $57.00 to be paid to pharmacies and suppliers for each 30-day supply of inhalation drugs furnished through durable medical equipment, and $80.00 for each 90-day period of inhalation drugs.

4. EPA ADMINISTRATOR NOMINATED FOR HHS SECRETARY

On Monday, President Bush nominated Environmental Protection Agency (EPA) administrator Mike Leavitt to replace Tommy Thompson as HHS secretary. Before joining the EPA in 2003, Leavitt was governor of Utah for 11 years.

In accepting the nomination, Leavitt said, “I look forward to the implementation of the Medicare prescription drug program in 2006, medical liability reform and finding ways to reduce the cost of health care. I’m persuaded that we can use technology and innovation to meet our most noble aspirations, and not compromise our other values that we hold so dear.”

5. MEDPAC DELIBERATES ON 2006 PAYMENT INCREASES, SPECIALTY HOSPITALS

At its December meeting, the Medicare Payment Advisory Commission (MedPAC) discussed draft recommendations for the 2006 provider payment updates, with full market basket rate increases proposed for hospital inpatient and outpatient services. No updates were recommended for skilled nursing facilities (SNFs) and home health agencies.

The commission also addressed the specialty hospital moratorium, with commissioners expressing concern about the need for a fair marketplace for community and specialty hospitals. The proposed recommendation would eliminate the whole-hospital exception in the Stark law for new specialty hospitals, and charge the HHS secretary with developing criteria for grandfathering current facilities.

The recommendations to Congress are subject to change before the Commissioners vote on them at the January 12 & 13, 2005 meeting.

6. GROWING HEALTHCARE COSTS FOR THE ELDERLY PRESENT CHALLENGES FOR FUTURE FINANCING

A fast-growing population of elderly individuals requiring more expensive care and utilization of services may present significant challenges in financing health care in the future, according to a new Healthcare Financing Review web exclusive article. The article’s authors present historical trends of healthcare spending for children, working age people, and the elderly to offer insight into the elderly population’s effect on healthcare funding programs and expenditures over the next several years.

The 1999 data shows the largest amount of money spent on health care was for the elderly. People aged 65 or over made up only 13 percent of the population, but consumed 36 percent of spending for personal health care, totaling $387 billion, or $11,089 per person. Medicare covered 46 percent of this health spending, while Medicaid financed more than 15 percent. The elderly accounted for four-fifths of all spending for nursing home care and three-fifths of spending for home health care.

7. CMS PLANS TO REDUCE MEDICARE PAYMENT ERRORS

The Medicare payment error rate is 9.3 percent for FY04, CMS recently announced, up from 5.8 percent in FY03, due in large part to non-responses from providers when errors were being resolved by contractors and insufficient documentation. CMS measures to reduce this rate in the future, include:
Encouraging the American Medical Association (the owner of the physician coding system) to improve clinical examples and other documentation guidelines for correctly coding evaluation and management services

• Development of new data analysis procedures to identify payment aberrancies and the utilization of that information to stop improper payments before they occur Encouraging Medicare contractors to educate providers about documentation rules
• Encouraging Medicare contractors to educate providers about documentation rules

CMS will also expand the current frequently asked questions (FAQ) database available on its web site. FAQs will be automatically generated from Medlearn Matters articles, solicited from FIs and carriers, and solicited from over 50 national associations.

8. QUICK LINKS

CHEMOTHERAPY DEMONSTRATION PROJECT. CMS issued implementation instructions on the Medicare chemotherapy demonstration project, which was announced November 15 in the 2005 final physician fee schedule.

INSTRUCTIONS ON PREPAYMENT REVIEW OF CLAIMS. Medicare contractors should not initiate nonrandom prepayment medical review of a provider for self reporting of an improper billing practice unless there is a likelihood of a sustained or high level of payment error, CMS instructed. The instructions become effective December 1, 2004.

COVERAGE DECISION FOR EKG SERVICES. Transmittal 26 is a national coverage decision on the use of electrocardiographic (EKG) services that meet the criteria described in section 20.15 of publication 100-03, the National Coverage Determinations Manual. NCDs are binding on all carriers, fiscal intermediaries, quality improvement organizations, health maintenance organizations, competitive medical plans, health care prepayment plans, the Medicare Appeals Council, and Administrative Law Judges.

VA PUBLISHES 2005 CALENDAR YEAR UPDATE. The Department of Veterans Affairs has published the Reasonable Charges for Inpatient DRG and SNF Medical Services; 2005 Calendar Year Update in the December 15 Federal Register. The charges become effective January 1, 2005.

9. IN THE HFMA RESOURCE CENTER

HFMA EXECUTIVE ROUNDTABLE: LESSONS LEARNED FROM OUTSOURCING HOSPITAL REVENUE CYCLE FUNCTIONS. The modern healthcare environment makes it increasingly difficult for hospitals to manage all of their operations in-house. Learn how this group of hospital and health system executives use outsourcing to save costs and gain operational flexibility.

2005 COMPLIANCE AND OIG WORK PLAN. Use these Ready-to-Use PowerPoint presentations to educate your staff on what projects the OIG will address during 2005.

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