IN THIS WEEK’S ISSUE:
- CMS Corrects, Clarifies FY05 Inpatient, IRF, and SNF PPS Rules
- NFMA Provides Disclosure Best Practices
- Demonstration Project Launched for High-Cost Beneficiaries
- More Work Needed to Move Appeals Process into CMS
- Medicare Coverage of CORFs Services Clarified
- Medicare Payments Updated for Flu and Pneumoccocal Vaccines
- New CMS Council Establishes Coding Change Process
- S&P Expects More Health Care Downgrades Next Year
- Quick Links
- In the HFMA Resource Center
1. CMS CORRECTS, CLARIFIES FY05 INPATIENT, IRF, AND SNF PPS RULES
Yesterday, CMS published corrections to the FY05 final inpatient PPS rule that appeared in the August 11 Federal Register, addressing policy details omitted from the final rule (primarily reclassifications, IME, and GME resident caps) and errors in some of the regulatory text (pertaining to critical access hospitals and hospitals-within-hospitals, in particular). In the October 7 Federal Register, CMS also said that the wage index data, geographic reclassifications, and inpatient PPS payment rates had been revised. CMS noted those revisions would be published soon in the Federal Register and advised that the data on the CMS web site is correct.
In a related change to its web site, on October 5 CMS modified the instructions regarding hospitals’ applications for redistributed GME slots.
Separate October 7 Federal Register notices correct the inpatient rehabilitation facility (IRF) and skilled nursing facility (SNF) PPS systems, largely to reflect the hospital wage index corrections discussed above.
2. NFMA PROVIDES DISCLOSURE BEST PRACTICES
The National Federation of Municipal Analysts has produced its first NFMA Recommended Best Practices in Disclosure, a collection of disclosure guidelines that should prove valuable in the preparation of official statements, annual information reports, and other data placed on debt issuer web sites. The publication is a collaborative effort of municipal analysts, investment bankers, governmental issuers, bond counsel, and financial advisors.
Among the sector-specific guidelines are recommended best practices in disclosure for: hospital debt transactions, general obligation and tax-supported debt, long-term care/senior living debt, and variable rate and short-term debt.
3. DEMONSTRATION PROJECT LAUNCHED FOR HIGH-COST BENEFICIARIES
CMS announced it will launch a demonstration project to explore ways to reduce costs while improving quality of life for beneficiaries in the traditional Medicare fee-for-service (FFS) program with high medical expenses. The project will test various care management models for high-cost beneficiaries, such as intensive care management, increased provider availability, restructured physician practices, and expanded flexibility in care settings.
Physicians groups, hospitals, and integrated delivery systems are encouraged to participate in the demonstration project. Participating organizations can request a monthly fee per participant or participate under a gain-sharing arrangement based on Medicare savings, according to CMS. However, organizations will be required to assume risk if they do not meet established performance standards for clinical quality of care, beneficiary and provider satisfaction, and savings to Medicare.
Beneficiaries’ participation will be voluntary and free, and will not change their FFS benefits. There will be one organization selected per area. Applications must be received on or before January 4, 2005. There will be a maximum of six awards.
4. MORE WORK NEEDED TO MOVE APPEALS PROCESS INTO CMS
The process through which Medicare beneficiaries in the traditional fee-for-service program appeal denied claims is currently slated to move from the control of the Social Security Administration (SSA) to HHS; however, the Government Accountability Office (GAO) has concerns about the implementation plan for this change, according to a recent GAO report. The transfer of appeals is required by the Medicare Modernization Act (MMA) and should be completed no later than October 1, 2005. However, GAO’s evaluation of the plan found it weak in areas like addressing the development of new regulations to guide the appeals process, plans for hiring and training administrative law judges, and developing appropriate performance standards.
To the extent providers are helping beneficiaries with their appeals, these developments should be closely monitored.
5. MEDICARE COVERAGE OF CORF SERVICES CLARIFIED
According to CMS, a service may be covered as a comprehensive rehabilitation facility (CORF) service only if it would be covered as an inpatient hospital service provided to a hospital inpatient. This does not mean that the beneficiary must require a hospital level of care or meet other requirements unique to hospital care, merely that the service, if otherwise covered, would be covered if provided in a hospital. This transmittal and the related Medlearn Matters article clarify the general requirements, covered and noncovered services, provisions of services, and specific CORF services. The implementation date for the changes is October 25, 2004, with an effective date of June 30, 2004.
6. MEDICARE PAYMENTS UPDATED FOR FLU AND PNEUMOCCOCAL VACCINES
Effective September 1, 2004, the payment allowance for flu vaccines (CPT 90658) is $10.10 and the allowance for pneumoccocal vaccines (CPT 90732) is $23.28, when payment is based on 95 percent of the average wholesale price. Annual Part B deductible and coinsurance amounts do not apply. All physicians, non-physician practitioners, and suppliers who administer these vaccinations must take assignment on the claim for the vaccines, CMS said. Contractors are not required to search their files either to retract payment for claims already paid or to retroactively pay claims, according to CMS. However, they will adjust claims brought to their attention.
In a related story, the Centers for Disease Control and Prevention (CDC) released interim influenza vaccination recommendations for the 2004 through 2005 flu season. The recommendations include a list of priority groups for vaccination in light of a current shortage of the flu vaccine for the 2004-2005 flu season.
7. NEW CMS COUNCIL ESTABLISHES CODING CHANGE PROCESS
The CMS Council on Technology and Innovation (CTI) has improved the process for updating HCPCS codes, which should accelerate the establishment of payments for certain healthcare services and items. The change is in keeping with the CTI’s purpose “to coordinate the activities of coverage, coding, and payment processes affecting new technologies and procedures.”
The new procedures will include publicizing proposed HCPCS codes and providing more opportunities for public input, with preliminary decisions to be displayed on the CMS website to facilitate public comment. The application process for new codes will require less marketing data in the request’s simplified format. Additionally, CMS is working with states on a process for Medicaid program coding changes.
8. S&P EXPECTS MORE HEALTH CARE DOWNGRADES NEXT YEAR
Low interest rates in the months ahead could lead to more aggressive financial leveraging and a year of more downgrades than upgrades, says the latest Standard & Poors (S&P) report on U.S. corporate health care. Recent rating reductions are primarily attributable to company-specific events, rather than “broad industry influences.” Corporate health care, as used in the report, refers not only to hospitals and nursing homes, but also to clinical laboratory companies, pharmacy benefit managers, life science companies, medical products companies, and pharmaceutical manufacturers.
Although the aging market’s strong demand for top-quality medical care provides a positive outlook for the healthcare field, new and potentially negative developments could stem from concerns about drug costs and questions about payment responsibility for services and products. This report considers the outlook for more than 100 publicly traded healthcare organizations.
9. QUICK LINKS
TECHNICAL REVISIONS TO INTEGRITY DATA BANK FINAL RULE. In a September 21, 2004, Federal Register notice, the OIG finalized technical changes made to the data collection reporting requirements for the Healthcare Integrity and Protection Data Bank (HIPDB), which (became effective on July 19, 2004. .
PHYSICIAN CCI EDITS VERSION 10.3. Version 10.3 of the Correct Coding Initiative (CCI) edit files for physicians are now available on the Internet. The edits are effective October 1, 2004, through December 31, 2004.
NCQA STATE OF HEALTH CARE QUALITY 2004 REPORT. The quality of care that health plans delivered improved markedly in the past year, according to publicly reported performance data; however, the US healthcare system as a whole remains plagued by quality gaps that contribute to as many as 79,000 avoidable deaths every year, said the National Committee for Quality Assurance’s (NCQA’s) recently released State of Health Care Quality 2004.
10. IN THE HFMA RESOURCE CENTER
FACT SHEET: MEDICARE 2005 PHYSICIAN FEE SCHEDULE PROPOSED RULE. Use this handy summary to quickly locate key provisions of Medicare’s proposed changes to the 2005 physician fee schedule payment policies.
HFMA EXECUTIVE ROUNDTABLE: IMPROVING PERFORMANCE WITH CLINICAL SERVICE LINES. Read the real-world insights of CFOs and clinical executives who recently gathered to discuss their experiences with service line management and analysis.
Copyright 2004 Healthcare Financial Management Association, all rights reserved. HFMA Express News ISSN: 1540-0689. Volume XI, Number 40.
For customer service, send an e-mail to HFMA’s Member Service Center or call (800) 252-HFMA, and press 2.