HFMA Express News - September 10, 2004

IN THIS WEEK’S ISSUE:

1. Congress Attempts To Head Off The "75 Percent" Rule
2. Increased Medicare Premium and Deductible Rates Announced
3. Central Post Office Simplifies Municipal Bond Filing Requirements
4. GAO Concludes Scully Broke Appropriations Law
5. CMS Enhances QIO Scope of Work
6. CMS Issues Billing Instructions for IRF Claims
7. CMS To Expand Stent Coverage for Post-Approval Study
8. CMS Issues Payment Instructions for Chronic Care Services
9. Quick Links

1.  CONGRESS ATTEMPTS TO HEAD OFF "75 PERCENT" RULE

On September 8, the House passed an amendment to the HHS appropriations bill that could halt CMS's implementation of the "75 percent" rule, which revises criteria for classifying hospitals as inpatient rehabilitation facilities (IRFs) for Medicare payment. The amendment requires rehabilitation care field experts to participate in a study by the Government Accounting Office (GAO) and make recommendations that reflect the medical advances in rehabilitation care.

Although Congress urged CMS to withhold the rule for a thorough investigation of how rehabilitation medicine has changed, the rule was finalized in April and implemented on July 1. . The final rule is less stringent than the original 75 percent requirement, but mandates that in order to be paid as an IRF, currently 50 percent of a facility's admissions must be included on CMS's list of qualifying medical conditions, 60 percent in 2005, 65 percent in 2006, and 75 percent in 2007.

The Labor, HHS, and Education Appropriations bill must be enacted before the amendment could take effect. The House has approved the bill and referred it to the Senate.

2.  INCREASED MEDICARE PREMIUM AND DEDUCTIBLE RATES ANNOUNCED

In 2005, the monthly Medicare Part B premium will rise to $78.20, an increase of $11.60 from this year’s premium of $66.60, HHS announced September 3. HHS reports that the new premiums reflect general growth in healthcare costs, higher payments to physicians and Medicare Advantage coordinated care health plans under the MMA, and the need for trust fund reserves.

The Part A deductible will increase by $36 to $912. Beneficiaries will pay $228 per day for days 61 through 90 in 2005 (up from $219 in 2004), and $456 per day for stays beyond the 90th day in a benefit period (up from $438 in 2004). For beneficiaries in skilled nursing facilities, the daily coinsurance for days 21 through 100 in a benefit period will be $114, compared to $109.50 in 2004.

The MMA requires raising the Part B deductible in 2005 and indexing it thereafter. In 2005, the Part B deductible will be $110. Beginning January 1, 2006, the deductible will be indexed to the increase in the average cost of Part B services for aged beneficiaries.

3.  CENTRAL POST OFFICE SIMPLIFIES MUNICIPAL BOND FILING REQUIREMENTS

An electronic central post office (CPO) will now offer a convenient way for bond issuers to meet filing requirements for secondary market disclosure documents. The post office is located on a new web site, DisclosureUSA.org. The site is the product of a cooperative effort of the Muni Council, which is a group of 18 organizations, including HFMA, and the Municipal Advisory Council of Texas (Texas MAC), which will run the post office. The CPO will address deficiencies in the current filing system and function as a one-stop conduit that receives the filings from issuers and then transmits them electronically to the nationally recognized municipal securities information repositories and state information depositories, as required by continuing disclosure agreements. The CPO will also ensure that the same documents will be available at the document repositories and that document indexing will be improved for easier retrieval.

Staff of the Securities and Exchange Commission’s (SEC’s) Division of Market Regulation issued an Interpretative Letter authorizing the use of DisclosureUSA.org by municipal security issuers and others who make continuing disclosure filings pursuant to Rule 15c2-12.

4.  GAO CONCLUDES SCULLY BROKE APPROPRIATIONS LAW

The Government Accountability Office (GAO) has concluded in a recent legal opinion that former CMS administrator Tom Scully should pay back the government salary he received after he prohibited CMS chief actuary Richard Foster from giving legislators cost estimates of last year's Medicare prescription drug law. In a September 7 letter to 18 Democratic senators, the GAO said it is illegal for federal employees to prohibit or prevent any other employee from giving information to Congress, and the law prohibits an agency from paying the salary of any federal officer who commits such an act. Sen. Frank Lautenberg (D-NY), who requested the opinion, said Scully should have to repay about $80,000 of his salary as penalty for his actions.

5.  CMS ENHANCES QIO SCOPE OF WORK

CMS has proposed an eighth scope of work for quality improvement organizations (QIOs), with significant enhancements to the previous QIO contracts. The proposal focuses on four settings: nursing homes, home health agencies, hospitals, and physician offices. Under the proposal, QIOs would:

• Promote and adopt healthcare information technology, performance measurement, and process redesign instruments to improve the quality of health care provided to Medicare beneficiaries.
• Continue to work on appeals, beneficiary complaints, payment errors, and other case review activities.
• Work with prescription drug plans and providers on improvement projects that detect inappropriately prescribed medications.
• mprove the health care of disadvantaged populations by ensuring Medicare beneficiaries get the right physician office-based preventive services and appropriate care for chronic diseases, such as diabetes.
  

The multi-pronged approach includes helping consumers make decisions based on quality of care information, and urging providers to improve quality using free assistance from the QIOs and through pay-for-performance demonstrations. In early 2005, CMS will post hospital quality data on its Hospital Compare web site.

The eighth scope of work will direct the work of the QIOs for the next three years, beginning in August 2005. Comments are due to CMS by September 20.

6.  CMS ISSUES BILLING INSTRUCTIONS FOR IRF CLAIMS

Effective October 1, 2004, IRFs are required to document the date of transmission of the IRF Patient Assessment Instrument (PAI) in the “service date/assessment date” field of the UB-92 (field locator 45 of the revenue code 0024 line) or the electronic equivalent, according to CMS. This was not required when the IRF PPS was implemented in January 1, 2002.

If the transmission date is 28 or more calendar days from the discharge date of the claim, a 25 percent penalty will be applied, and the final total payment amount will be 75 percent of the payment rate associated with the case-mix group for that claim. Failure to supply a valid date will cause the claim to be returned unprocessed to the provider, CMS said.

7. CMS PROPOSES EXPANDING STENT COVERAGE FOR POST-APPROVAL STUDY

CMS seeks public comment on a proposal to expand its coverage of percutaneous transluminal angioplasty (PTA) of the carotid artery with placement of an FDA-approved carotid stent, to cover participants in a large FDA-mandated, post-approval study for the newly approved device. Previously, CMS only covered PTA of the carotid artery concurrent with stent placement in clinical trials prior to FDA approval.

Approval of the carotid stent system is dependent on this study, which is designed to produce information that will help physicians better target the new device to appropriate patients and to develop optimal clinical practices for the new device. Comments on the proposal are due October 1, 2004.

CMS is also evaluating a separate request for broader coverage expansion of PTA of the carotid artery concurrent with stent placement for patients at high risk for carotid endarterectomy. The CMS evidence-based review, which will involve public comment on a draft coverage decision, is scheduled for completion early next year.

8.  CMS ISSUES PAYMENT INSTRUCTIONS FOR CHRONIC CARE SERVICES

CMS announced it will conduct large-scale programs under the voluntary chronic care improvement program mandated by the MMA. According to transmittal 256, private organizations can contract with the agency to provide chronic care services to beneficiaries enrolled in the traditional fee-for-service Medicare program. CMS will use the group health plan payment system to make capitated payments for the services. Beneficiaries will receive only coordinated care or disease management services from these chronic care organizations, and beneficiaries are not restricted on how they receive other Medicare services.

9.  QUICK LINKS

JCAHO INCREASES SURVEY FEES:  The Joint Commission on Accreditation of Healthcare Organizations (JCAHO) announced on September 7 that its board of commissioners has approved an average 9.5 percent increase in triennial accreditation survey fees, starting January 1, 2005.

CMS INCREASES MEDICARE PROGRAM INTEGRITY REACH:  CMS is expanding program integrity oversight beyond traditional Medicare fee-for-service providers to include the Medicare drug discount care program, Part D prescription drug benefits, and the new Medicare Advantage plans. The agency has also issued a proposed rule August 27 calling on states to report improper payments in Medicaid and State Children’s Health Insurance Programs (SCHIP) to HHS.

Copyright 2004 Healthcare Financial Management Association, all rights reserved. HFMA Express News ISSN: 1540-0689. Volume XI, Number 36.

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