HFMA Express News - September 17, 2004

Adjust font size: A A A | Printer-friendly version

IN THIS WEEK’S ISSUE:

Strategies Recommended to Reduce ED Overcrowding
CMS Issues Instructions on Changing Inpatient Admissions to Outpatient
OIG Opinion OKs Obstetrical Malpractice Insurance Subsidy
Updates Issued for Outpatient PPS, Physician Fee Schedule
Observation Services Billing Policy Clarified
CMS Modifies Average Sale Price Calculation
CMS Extends HIPAA Civil Money Penalties Rule
Quick Links
New in the HFMA Resource Center
New in the Compliance Forum Library

1. STRATEGIES RECOMMENDED TO REDUCE ED OVERCROWDING

Leadership buy-in, appropriate multidisciplinary teams, and identification of appropriate performance measures are among the eight critical success factors identified in a new report of best practices to reduce emergency department (ED) overcrowding. Participating hospitals were members of the Urgent Matters Learning Network, a Robert Wood Johnson Foundation initiative to help hospitals eliminate ED congestion and improve healthcare safety. As part of the initiative, each participating hospital developed and implemented a variety of strategies designed to improve patient flow throughout different areas of the ED.

2. CMS ISSUES INSTRUCTIONS ON CHANGING INPATIENT ADMISSIONS TO OUTPATIENT

On September 10, CMS published a transmittal describing when and how a hospital can change a patient’s status from inpatient to outpatient. According to CMS, if a hospital utilization review committee determines that an inpatient admission does not meet the hospital’s inpatient criteria, the hospital can change the beneficiary’s status from inpatient to outpatient and submit a TOB 13x, or a 85x claim for medically necessary Medicare Part B services. However, the following conditions must be met:

The change in patient status from inpatient to outpatient must be made before discharge.
The hospital should not have already submitted a claim to Medicare for the inpatient admission.
A physician must concur with the utilization review committee’s decision.
The physician’s concurrence with the utilization review committee’s decision must be documented in the patient’s medical record.
When the hospital submits claims with types of bills 13x or 85x with an inpatient-to-outpatient status change, the hospital is required to report condition code 44 in one of the form locators 24-30, or in the ANSI X12N 837I in loop 2300, HI segment, with qualifier BG, on the outpatient claim.

3. OIG OPINION OKs OBSTETRICAL MALPRACTICE INSURANCE SUBSIDY

In advisory opinion 04-11, released September 2, the OIG did not state sanctions were appropriate in response to a proposed request for malpractice insurance expense subsidies for four community-based obstetricians. The obstetricians proposed a malpractice insurance subsidy program based on forecasts that malpractice expenses will continue to rise, which could cause these physicians to cease providing obstetrical care in the community. The OIG concludes that since the subsidized physicians will practice obstetrics in a low income, migrant agricultural worker, and homeless population HPSA, the OIG does not think the proposed arrangement will result in any increased risk of fraud or abuse, and would not subject the entity to sanctions arising from the anti-kickback statute.

4. UPDATES ISSUED FOR OUTPATIENT PPS, PHYSICIAN FEE SCHEDULE

CMS has published the fourth-quarter update to the current hospital outpatient PPS rules. Some of the changes include payment for drugs and biologicals recently approved by the Food and Drug Administration, newly approved drugs for pass-through payments, ambulatory payment classification (APC) additions, and code additions and deletions. All changes in the update are effective October 1, 2004.

CMS also published an update to the 2004 Medicare physician fee schedule database (MPFSDB). The update includes numerous CPT/HCPCS code changes with effective dates and changes in payment amounts. Carriers are required to give providers 30 days notice before implementing the revised payment amounts reflected in the update. According to CMS, carriers will not search their files to retract payment for claims already paid or to retroactively pay claims. However, carriers will adjust claims brought to their attention. The update becomes effective January 1, 2004.

5. OBSERVATION SERVICES BILLING POLICY CLARIFIED

CMS has clarified Medicare billing procedures for patients who are referred by a physician directly to the hospital for observation, although the patients’ status would still be considered outpatient, according to a CMS transmittal published on September 10.

Within new policy manual pages, CMS notes that if a hospital intends to retain or place a beneficiary in observation for a non-covered service, the hospital must give the beneficiary proper written advance notice of noncoverage.

Additionally, CMS would not cover the following observation stays:

Services that are not reasonable or necessary for the diagnosis or treatment of the patient but are provided for the convenience of the patient, his or her family, or a physician
Services that are covered under Part A, or services that are part of another Part B-covered service
Standing orders for observation following outpatient surgery

This clarification came as a result of concerns from providers about how to bill when a patient changes status from observation to inpatient admission.

6. CMS MODIFIES AVERAGE SALE PRICE CALCULATION

CMS is modifying the proposed price calculation of Part B drugs and biologicals, based on responses it received to an April 6 interim final rule. In a final rule published in yesterday’s Federal Register, CMS revised the methodology that manufacturers must use to determine the average sales price (ASP) for drugs furnished incident to physicians’ services, those provided under the durable medical equipment benefit, certain oral anti-cancer drugs, and oral immunosuppressive drugs (all paid under Social Security Act sections 1842(o)(1)(D), 1847A, or 1881(b)(13)(A)(ii)). This change, CMS says, clarifies what manufacturers must report, starting in October, for the determination of payment allowances that will go into effect January 1, 2005.

7. CMS EXTENDS HIPAA CIVIL MONEY PENALTIES RULE

A comprehensive enforcement rule pertaining to civil money penalties on entities that violate the administrative simplification provisions of HIPAA, originally scheduled for release by September 16, 2004, has been delayed. Consequently, the life of last year’s regulation (45 CFR part 160, subpart E) has been extended to September 16, 2005.

HIPAA authorizes the HHS secretary to levy a penalty of not more than $100 for each violation and not more than $25,000 for all violations of the same provision during a calendar year. CMS says it won’t need the full year, but intends to propose “in the near future, a rule to establish complete procedural and substantive provisions for the enforcement of HIPAA rules through the imposition of civil money penalties.”

8. QUICK LINKS

CMS PUBLISHES FY05 REASONABLE CHARGE UPDATES FOR SPLINTS, CASTS, DIALYSIS - SUPPLIES. CMS has published instructions for calculating reasonable charges for payment of claims for splints, casts, dialysis supplies and equipment, and intraocular lenses, effective January 1, 2005.

NO GRACE PERIOD FOR 2005 HCPCS UPDATE. - CMS published a notice reminding providers of the 2005 healthcare common procedure coding system (HCPCS) annual update. The 2005 version contains existing, new, revised, and discontinued HCPCS codes for 2005.

FY05 TRICARE MENTAL HEALTH RATES - The Department of Defense has published a notice updating the mental health per diem rates under TRICARE for FY05, effective October 1, 2004.

SCHIP FINAL FY05 ALLOTMENTS - CMS has published FY05 final allotments available to states to initiate and expand health insurance coverage to uninsured, low-income children under their State Children’s Health Insurance Programs (SCHIPs).

9. NEW IN THE HFMA RESOURCE CENTER

ELECTION 2004: IMPLICATIONS FOR PROVIDERS IN THE CAMPAIGN PROMISES - Use this ready-to-use PowerPoint presentation to brief staff or board members on the role of health care in the 2004 presidential campaign.

UPDATED: HFMA’S INTERNET GUIDE TO MEDICARE CODING AND - BILLING. Use this handy billing compliance reference to be sure you are up to date on important Medicare coding and billing instructions.

PPS ROUNDUP: PROPOSED 2005 MEDICARE OUTPATIENT UPDATE - Use this summary as a quick reference to key changes in the PPS rates for outpatient services in 2005.

10. NEW IN THE HEALTHCARE COMPLIANCE FORUM LIBRARY

OIG AUDIT REPORT AND ADVISORY OPINION - Read an OIG audit report that addresses Medicare payment rates for home oxygen equipment. Additionally, a recent OIG advisory opinion offers insight into a proposed request to provide obstetrical malpractice insurance subsidies to four community-based obstetricians. For Healthcare Compliance Forum Members Only.

For customer service, send an e-mail to HFMA’s Member Service Center or call (800) 252-HFMA, and press 2.

featured sponsors