IN THIS WEEK’S ISSUE:
- McClellan on IRFs: FIs Report No Problems, CMS Monitoring
- CMS Plans to Assist Physicians with EHR
- Medicare Part D: A Challenge To Long Term Care
- CY05 Clinical Laboratory Update – No Increase
- Web Site Clarifies HIPAA Implementation Guides
- MedPAC: Heart Hospitals Have Only Slight Impact On Community Hospitals
- Consumer Medical Prices Continue Moderate Growth Trend
- Study: More Nurses, But Continued Shortage
- Quick Links
- In the HFMA Resource Center
1. MCCLELLAN ON IRFs: FIs REPORT NO PROBLEMS, CMS MONITORING
On Thursday, CMS administrator Mark McClellan responded to concerns expressed by Sen. Charles Grassley, R-Iowa, Senate Finance Committee chairman, about the effects of the 75 percent rule on inpatient rehabilitation facilities. McClellan stated that the aim is to “use the IRF requirements to support access to IRF services for those patients that truly require the specialized and intensive inpatient rehabilitation care provided in an IRF, in contrast to care that can be appropriately provided at a lower cost in some of these other settings.”
The fiscal intermediaries (FIs) have not reported any hospitals experiencing problems meeting the 50 percent compliance threshold, according to McClellan. He also described instructions sent to the CMS regional offices (ROs) and FIs, as well as training for ROs, FIs, and FI medical directors on implementing the policies in the final rule of May 7, 2004. Finally, he described the CMS research agenda during the phase-in of the rule and point to data that indicate the IRF PPS payment exceeds the average IRF cost by 17 percent.
2. CMS PLANS TO ASSIST PHYSICIANS WITH EHR
CMS intends to motivate the private sector to make electronic health record (EHR) systems more affordable and build on work done by the Leapfrog Group and HL7 on standards for the components of EHR systems, officials told participants of a November 16 Open Door Forum. CMS’s plan also calls for quality improvement organizations (QIOs) to help physicians’ offices adopt the technology and modify their patient care workflow accordingly. More details of the QIOs’ role will be in the 8th Scope of Work (their next contract period) now under development.
CMS will also address financial incentives of EHR implementation with a demonstration project under Section 649 of the MMA. The project would operate much like the Bridges to Excellence grant program of the private sector and make funds available to those who also adopt clinical measures programs.
Read about the CMS demonstration project in Section 649 of HFMA’s convenient bookmarked version of the MMA (click on the “bookmark” tab, then scroll down to the link for Section 649)
3. MEDICARE PART D: A CHALLENGE TO LONG TERM CARE
Providers expressed concern over the delivery and financing of the Medicare prescription drug benefit at a November 16 listening session on implementation issues related to long term care. This feedback is integral to a Lewin Group study, required under section 107 of the Medicare Modernization Act of 2003 (MMA), which will guide CMS development of the implementing regulations for the MMA’s prescription drug coverage, or Medicare Part D. Providers’ list of concerns was headed by continued beneficiary access to covered drugs and beneficiary education needs.
One long-term care pharmacist cautioned that January 1, 2006, the typical nursing homes will findhave roughly 85 percent of their patients’ drugs covered by Medicare Part D, quite a change fromas the 65 percent Medicaid and 20 percent private/third-party coverage todaypatients use the new benefit. Aside from anythe difficulty providers may have adjusting to that change, there are many questions about how the prescription drug plans’ (PDPs’) will administer Part D, given their incentive to restrict medications.
4. CY05 CLINICAL LABORATORY UPDATE--NO INCREASE
The annual update to the 2005 local clinical laboratory fees is 0 percent, according to CMS instructions to fiscal intermediaries (FIs) and carriers published November 5. In the transmittal CMS also updates laboratory costs subject to reasonable charge payments.
The 2005 laboratory fee schedule keeps the national minimum payment amount at $14.76. Tests for which national limitation amounts (NLAs) were established before January 1, 2001, will have NLAs that are 74 percent of the median of the local fees. Tests with NLAs established on or after January 1, 2001, will have NLAs that are 100 percent of the median of the local fees.
The fee schedule includes separately payable fees for certain specimen collection methods (codes G0001, P9612, and P9615). For dates of service January 1, 2005 through December 31, 2005, the personnel payment is $0.45 per mile and the standard mileage rate for transportation costs is $0.385. Also included in the transmittal are the outpatient codes paid under a reasonable charge basis.
5. WEB SITE CLARIFIES HIPAA IMPLEMENTATION GUIDES
Providers can use a new web site to ask ASC X12 Insurance Subcommittee (ASC X12N) experts detailed questions about the interpretation of HIPAA transaction standard implementation guidelines. The web site was created by the Accredited Standards Committee (ASC) X12 and the Data Interchange Standards Association (DISA). While the web site does not replace the need to read the guides, it does help interpret and resolve inconsistencies within or between the guides.
6. MEDPAC: HEART HOSPITALS HAVE ONLY SLIGHT IMPACT ON COMMUNITY HOSPITALS
Heart hospitals are capturing market share from community hospitals, but the profit margins of neighboring community hospitals were not hurt by the heart hospitals’ competition, according to a November 17 report of research presented to the Medicare Payment Advisory Commission (MedPAC). The commission is preparing to submit policy recommendations to Congress in December.
The presenters did emphasize that the study was conducted over a six-year period that ended in 2002, and the number of specialty hospitals has doubled over the last two years.
MedPAC’s next meeting is December 9-10 in Washington, D.C., and is open to the public.
7. CONSUMER MEDICAL PRICES CONTINUE MODERATE GROWTH TREND
Consumers’ out-of-pocket costs for medical care rose 0.3 percent in October, the seventh straight month of moderate growth (before seasonal adjustment), according to the latest data from the Bureau of Labor Statistics. Consumer medical prices were 4.5 percent higher than one year ago. By comparison, the Consumer Price Index for all urban consumers (CPI-U) was 3.2 percent higher than in October 2003. Hospital inpatient prices were 5.4 percent higher than a year ago; outpatient prices were 5.0 percent higher.
In other medical care sectors, professional services increased 4.1 percent from a year ago, while medical care commodities increased 2.6 percent. The annual change for nursing homes and adult daycare was an increase of 3.6 percent.
8. STUDY: MORE NURSES, BUT CONTINUED SHORTAGE
Wage increases, high national unemployment, and positive results from private-sector initiatives made 2003 the second straight year of strong employment growth among registered nurses, according to a November Health Affairs article. The increase of 205,000 full-time equivalent RNs from 2002 to 2003 is the largest two-year growth observed since 1983. Older women and foreign-born RNs accounted for a large share of the employment growth, aided by increased numbers of younger people pursuing the RN credential, particularly women in their early 30’s.
However, researchers advised continuing efforts to maintain the growth rates, including scholarships and public relations campaigns. The workforce is projected to reach only to 2.2 million by 2020, in contrast to a forecasted need of 2.8 million.
9. QUICK LINKS
GET THE FINAL RULES PUBLISHED IN THE NOVEMBER 15 FEDERAL REGISTER. Review hospital outpatient PPS, changes and rates update for CY2005
See revisions to Payment Policies Under the Physician Fee Schedule for CY05.
Review PPS for inpatient psychiatric facilities, effective for reporting periods beginning on and after January 1, 2005.
UPDATED INSTRUCTIONS FOR COMPLETING FORM CMS-1450. Chapter 25, Section 60 of the Medicare Claims Processing Manual is being revised to include the new condition and value codes to be used when completing form CMS-1450, CMS announced in transmittal 368, dated November 12.
MARSH & MCLENNAN LAY-OFFS. According to a recent New York Times report, professional services firm Marsh & McLennan announced that it would lay off 3,000 employees, or roughly 5 percent of its workforce.
RECENT/CLOSED OIG CIAs AND ENFORCEMENT ACTIONS. The OIG has updated the list of Corporate Integrity Agreements (CIAs) and settlements on its website. Also available: October criminal enforcement actions.
“October criminal enforcement actions.”
GUIDANCE FOR LONG-TERM CARE FACILITY SURVEYORS. CMS revised Tag F314, Appendix PP, of the State Operations Manual, which provides guidance to surveyors for long-term care facilities, and added new language to Tag F309 to include certain definitions of non-pressure related ulcers.
10. IN THE HFMA RESOURCE CENTER
FACT SHEET: MEDICARE HOME HEALTH PPS UPDATE FOR CY05. Use this summary as a quick reference to key changes in the PPS rates for home health services in 2005, or to brief your staff.
UPDATED! HFMA’S INTERNET GUIDE TO BUSINESS STATISTICS. Find links to useful healthcare business statistics, including margins and performance indicators, labor costs, the uninsured population, inflation data and economic indicators, Medicare, healthcare expenditures, and bond ratings.
UPDATED THROUGH OCTOBER! 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.
Copyright 2004 Healthcare Financial Management Association, all rights reserved. HFMA Express News ISSN: 1540-0689. Volume XI, Number 47.
For customer service, send an e-mail to HFMA’s Member Service Center or call (800) 252-HFMA, and press 2.