IN THIS WEEK’S ISSUE:
- CMS Issues Instructions on FY05 Inpatient PPS Final Rule
- Wage Index Data for 2006 Posted for Review
- AHA Assesses Specialty Hospital Impact
- CMS Clarifies MSP Rules Regarding Leave of Absence
- OIG Posts 2005 Work Plan
- Medicare Advantage Regions to be the Focus of Open Door Forum
- Weight-Loss Surgery Effective for Extremely Obese Patients
- Quick Links
- In the HFMA Resource Center
1. CMS ISSUES INSTRUCTIONS ON FY05 INPATIENT PPS FINAL RULE
On October 1, CMS published instructions to fiscal intermediaries for implementing certain provisions of the 2005 inpatient PPS final rule. The new ICD-9-CM coding changes affect the Outpatient Code Editor in addition to the Medicare Code Editor, effective October 1, 2004.
The inpatient-related provisions include:
The low-volume hospital adjustment
Long term care hospitals’ cost-to-charge ratios
Hospitals-within-hospitals provisions
The new instructions also address new technology add-ons, new pricer rates, the hospital quality initiative, low-volume hospitals, core-based statistical areas, and other changes related to capital payments. The instructions are effective with discharges occurring on or after October 1, 2004, unless otherwise noted.
2. WAGE INDEX DATA FOR 2006 POSTED FOR REVIEW
Data for the Medicare acute care hospital wage index for FY06 was posted to the CMS wage index web page October 7 for provider review. The wage index values are based on wage data as reported by hospitals on their Medicare cost reports for FY02, excluding non-PPS providers and critical access hospitals designated as of September 21, 2004. CY03 occupational mix data, which is the same as that submitted for development of the FY05 wage index, is also there.
Hospitals are urged to review their data in both files and, according to the timetable provided on the web site, respond to their fiscal intermediary by November 29, 2004, with requests for revision and the documentation to support such requests.
3. AHA ASSESSES SPECIALTY HOSPITAL IMPACT
The American Hospital Association’s (AHA’s) latest analysis of trends and developments affecting hospitals finds the rapid growth in specialty, or limited-service, hospitals threatens to hurt community hospitals and create patient care conflicts.
The AHA analysis provided background and statistics on:
- The rapid growth of “niche” hospitals
- Location
- Ownership (physicians and others)
- Amount of care relative to ownership
- Patient demographics
- How they impact community hospitals
An 18-month moratorium on the creation of specialty hospitals began with the enactment of the Prescription Drug, Improvement, and Modernization Act last December. Congress continues to debate the need for regulations that ensure community services are not adversely affected.
4. CMS CLARIFIES MSP RULES REGARDING LEAVE OF ABSENCE
CMS published a transmittal clarifying Medicare’s role as secondary payer in situations of temporary leave of absence. According to CMS, when a Medicare-covered employee who is also covered by the employer’s group insurance is on a temporary leave of absence, Medicare is the secondary payer because the employee still has employee status and retains the employer’s health coverage. In the past, contractors have misinformed employers and health plans that Medicare is the primary coverage when an employee is on a leave of absence, CMS said.
5. OIG POSTS 2005 WORK PLAN
The OIG’s 2005 Work Plan identifies projects that have evolved in response to new issues and the shifting priorities of Congress. Among the areas getting more attention in the new plan are physicians and other health professionals, Medicaid, and Medicare drug reimbursement. Hospitals can expect to see renewed emphasis placed on:
- Inpatient rehabilitation payments-late assessments
- Medical necessity of inpatient psychiatric stays
- Rebates paid to hospitals
- Coronary artery stents
- Diagnosis-related group coding
- Quality improvement organization mediation of beneficiary complaints
- Medical education payment for dental and podiatry residents
- Nursing and allied health education payments
- Graduate medical education voluntary supervision in non-hospital settings
- Compliance program guidance to the healthcare industry (hospitals)
The OIG published draft supplemental compliance program guidance for hospitals on June 8, 2004, and requested that comments be submitted by July 23, 2004. The OIG will review the comments received and issue the final guidance sometime in 2005.
6. MEDICARE ADVANTAGE REGIONS TO BE THE FOCUS OF OPEN DOOR FORUM
CMS will devote an upcoming teleconference to the factors that should be used to decide Medicare Advantage (MA) regions. The discussion will focus on the MA regional health plans, in addition to the Medicare Part D prescription drug plans. The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 directed the Secretary of HHS to establish no fewer than 10 and no more than 50 MA regions, and to establish PDP regions consistent with the MA regions.
In the future, CMS will use slides available on their web site to facilitate the discussion, which will solicit input from participants on the factors and their priority. No RSVP is necessary to participate. Simply dial in (800-837-1935) and provide the conference ID, 1461886.
CMS plans to have the slides available on its web site.
7. WEIGHT-LOSS SURGERY EFFECTIVE FOR EXTREMELY OBESE PATIENTS
Bariatric surgery may be an effective weight reduction option for extremely obese patients who have tried and failed to lose weight with exercise and diet, especially those with life-threatening illnesses, according to a report issued October 8 by the Agency for Healthcare Research and Quality (AHRQ). The evidence review also found that some prescription medicines promote moderate weight loss when prescribed along with recommendations for dieting.
In July, CMS removed language in the Medicare Coverage Issues Manual that states obesity is not an illness. Currently, CMS does not cover treatment for obesity, but does cover treatment when obesity adversely affects another disease. The Medicare Coverage Advisory Committee will meet November 4 to evaluate the risks and benefits of bariatric surgery for Medicare beneficiaries.
8. QUICK LINKS
CMS ISSUES INSTRUCTIONS ON POST-PAYMENT AUDITS. Beginning October 25, 2004, Medicare contractors must provide written notice to all providers of the intent to conduct a post-payment audit. According to CMS, contractors should notify providers in the cost report reminder letter or the provider statistical and reimbursement transmittal letter that all submitted cost reports are subject to an audit.
TRICARE BENEFIT CHANGES. The Department of Defense has published benefit changes to the TRICARE program authorized by Congress in the National Defense Authorization Act for FY02 (NDAA-02).
OIG POSTS LIST OF EXCLUDED INDIVIDUALS/ENTITIES. OIG posted its updated lists of excluded individuals/entities (LEIE) reflecting all OIG exclusion and reinstatement actions taken through September of 2004. Individuals and entities that have been reinstated to the federal healthcare programs are not included in this file. .
HEALTHCARE PREMIUMS CONTINUE TO OUTPACE INFLATION. Employer-based healthcare premiums increased sharply again this year, but may begin moderating next year, according to Hewitt Associates. For 2005, Hewitt projects an 11.3 percent average increase for employers, which is lower than 2004’s 12.3 percent increase.
HOSPITALS ABLE TO PREVIEW QUALITY DATA. Hospitals taking part in the Hospital Quality Alliance have until November 6 to preview their first-quarter 2004 quality data before CMS publicly releases it. Hospitals that have difficulty accessing their data or find significant errors are urged to contact their Quality Improvement Organization before November 6.
9. IN THE HFMA RESOURCE CENTER
HFMA EXECUTIVE ROUNDTABLE: WORKING WITH PAY-FOR-PERFORMANCE. Pay-for-performance plans, which seek to reward top-quality care, bring providers a whole new set of administrative and clinical challenges. Read about how a group of CFOs and clinical executives have been responding to this new reimbursement trend.
Copyright 2004 Healthcare Financial Management Association, all rights reserved. HFMA Express News ISSN: 1540-0689. Volume XI, Number 41.
For customer service, send an e-mail to HFMA’s Member Service Center or call (800) 252-HFMA, and press 2.