IN THIS WEEK’S ISSUE:
- Hospital Chains' Latest Reports Reflect Uncertainty
- Reminder: Grace Period Ending for Discontinued HCPCS Codes
- CWF Edits to be Revised for SNF Consolidated Billing Payments
- CMS Expands on Summary Instructions for Billing Noncovered Charges to Intermediaries
- Marsh & McLennan Make Significant Reform Changes
- Hospice Payment Methodology May Need Modifications
- Clarification On Uninsured Lawsuits Ruling; One Action Dismissed
- Quick Links
- In the HFMA Resource Center
1. HOSPITAL CHAINS' LATEST REPORTS REFLECT UNCERTAINTY
Third quarter reports to investors reflect notable variations in financial performance for six of the nation's for-profit hospital chains. Reports recently issued were from CHS, HCA, HMA, LifePoint, Triad, and UHS.
In one area of consistency, revenues per equivalent admission increased 4.5 percent for HCA, 5.7 percent for Triad, and 6.4 percent for LifePoint, compared with the third quarter of 2003 (the statistic was not provided by CHS, HMA, and UHS). Inpatient admissions, however, varied from a 2.6 percent increase for LifePoint to a 2 percent decrease for UHS.
Collections experience also varied. Triad dropped its provision for doubtful accounts as a percentage of revenue to 10.9 percent, from 13.9 the third quarter of 2003. LifePoint’s change was from 10.2 percent to 9.6 percent. HMA showed no change, with 7.5 percent for both periods, but there were increases
between 0.7 percent and 1.6 percent for CHS, HCA, and UHS.
2. REMINDER: GRACE PERIOD ENDING FOR DISCONTINUED HCPCS CODES
CMS has issued a reminder that, effective January 1, 2005, Medicare providers will no longer have a 90-day grace period for the use of discontinued healthcare common procedure coding system (HCPCS) codes for services rendered in the first 90 days of the year. This means that use of discontinued codes on the claims for services provided after the date on which the codes are discontinued will cause claims to be returned unpaid by carriers, durable medical equipment regional carriers, and fiscal intermediaries (FIs). CMS emphasized that HCPCS codes must be valid at the time the service is rendered. To ensure prompt and timely payment of claims, providers should use the new HCPCS for 2005 for services rendered on or after January 1, 2005.
3. CWF EDITS TO BE REVISED FOR SNF CONSOLIDATED BILLING PAYMENTS
Effective January 1, 2005, changes to HCPCS codes and the Medicare physician fee schedule designations will be used for the 2005 update of the common working file (CWF) edits to allow carriers to make payments in accordance with policy for skilled nursing facility (SNF) consolidated billing in Chapter 6, Section 110.4.1 of the Medicare Claims Processing Manual. The CWF currently has edits in place for claims received for beneficiaries in a SNF Part A covered stay, as well as those in a noncovered stay. These edits only allow services that are excluded from consolidated billing to be paid separately by the carrier. The new codes will be provided to the CWF by November 1, if there is no delay in the Medicare physician fee schedule. The update is effective January 1, 2005.
4. CMS EXPANDS ON SUMMARY INSTRUCTIONS FOR BILLING NONCOVERED CHARGES TO INTERMEDIARIES
Effective April 1, 2005, CMS will allow institutional providers to submit noncovered provider-liable outpatient claims to fiscal intermediaries without condition codes 20 (provider-liable claims) or 21 (demand bills), according to change request 3416. Other areas addressed in the noncovered charges instructions include:
- Providing additional guidance on billing bundled services related to an ABN, with specific examples for rural health clinics, federally qualified health clinics, and laboratory panel tests billed on institutional claims
- Bypassing some edits related to noncovered ambulance line items using the –QM or –QN modifiers
5. MARSH & MCLENNAN MAKE SIGNIFICANT REFORM CHANGES
On October 25, Marsh & McLennan (MMC) announced that Marsh, Inc., one of its risk insurance services subsidiaries, is implementing new business practice reforms and will stop accepting fees that New York attorney general Eliot Spitzer alleged helped to steer unsuspecting clients to insurers and amounted to "bid-rigging" to obtain insurance contracts.
Michael Cherkasky, the new president and CEO at MMC, will lead a newly established global compliance department. In addition, compliance process changes will include a requirement that all key business leaders submit compliance certifications for their respective areas. Regular compliance verification meetings between compliance professionals and underwriters will ensure that Marsh brokers are meeting the organization’s compliance requirements. The company will initiate the reforms by January 1, 2005.
6. HOSPICE PAYMENT METHODOLOGY MAY NEED MODIFICATIONS
Modifications to the hospice payment methodology may be warranted because the methodology may not be consistent with current patterns of care, and payment rates may not adequately reflect the costs of care, according to a report published this month by the Government Accountability Office (GAO).
Based on reviews of 2000 and 2001 cost report data from freestanding hospices, GAO determined that the per diem payment rate for all hospice care was about 8 percent higher than the average per diem cost of providing care in 2000, and more than 10 percent higher in 2001. However, the relationship between payment rates and costs varied across the payment categories and hospice types.
GAO recommended that CMS collect comprehensive, patient-specific utilization and cost data on hospice services and determine whether modifications are needed, including any adjustments for small providers.
7. CLARIFICATION ON UNINSURED LAWSUITS RULING; ONE ACTION DISMISSED
HFMA Express News last week should have stated that the Federal Judiciary Panel on Multidistrict Litigation (JPML) denied a plaintiff’s motion to consolidate 28 actions against not-for-profit hospitals. The class status of each suit will be decided by the federal judge who hears the case. As the JPML was issuing its ruling, a judge in Alabama was dismissing the complaint against Baptist Health Systems, Inc., of Birmingham. The judge ruled that the plaintiffs had already lost their case in state court.
8. QUICK LINKS
CLAIMS FOR BLOOD CLOTTING FACTORS. Local Part B carriers will process claims submitted by Part B suppliers for blood clotting factors, CMS clarified in transmittal 327, effective November 22.
SOCIAL SECURITY 2005 CHANGES. Although the social security tax rates for employees in 2005 will stay at the 2004 level of 6.2 percent, the wage base will rise 2.4 percent, from $87,900 to $90,000.The change takes the maximum deduction for 2005 social security taxes to $5,580.
GROUP PRACTICES SPEND TOO MUCH TIME ON ADMINISTRATIVE TASKS. Medical group staff members (including physicians) spend excessive staff time on redundant administrative tasks, according to a study on administrative complexity in medical group practices by the Medical Group Management Association (MGMA).
9. IN THE HFMA RESOURCE CENTER
HFMA EXECUTIVE ROUNDTABLE: WEB-ENABLED BILLING SYSTEMS: TAKING THE VISION ON-LINE. Read about how a group of healthcare finance executives view this revenue cycle opportunity.
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 43.
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