IN THIS WEEK’S ISSUE:
- IRS Finds Growing Abuses in the Tax-Exempt Sector
- CMS Clarifies Hospital Billing for Initial Exams
- More Charity Lawsuits Dismissed
- Web Site Allows Consumers to Compare Hospital Quality
- Private Payers Fall Behind in Mental Health Spending
- Racial Disparity Initiative Has Financial Implications
- CMS Open Forum to Address Claims Appeals
- HFMA CEO Speaks to Financial Managers in China
- Medicare Coding and Billing Update
- Quick Links
1. IRS FINDS GROWING ABUSES IN THE TAX-EXEMPT SECTOR
Abuse is a growing problem in the tax-exempt sector, IRS commissioner Mark Everson told the Senate Finance Committee on April 5, and the government should act quickly to deter it. Everson stated that the huge increase in the number of tax-exempt organizations since 2000 has made this sector one of the IRS’s top enforcement priorities.
The top issues that IRS is looking into are compensation excesses, charities that benefit their donors, charitable trust abuses, the misuse of exempts for charitable donations, and abusive tax shelters. Additionally, Congress is particularly interested in looking at the tax-exempt sector for new revenue streams as a way to reduce federal budget deficits.
2. CMS CLARIFIES HOSPITAL BILLING FOR INITIAL EXAMS
CMS published a transmittal clarifying hospital billing for initial preventive physical examinations. When billing for IPPEs (G0344) and the technical component of the EKG (G0367) on the same claim, hospitals subject to Medicare outpatient PPS must place modifier -25 on HCPCS code G0344 in order to receive payments, according to CMS.
In a December 22, 2004, transmittal instructing hospitals on billing for IPPE, CMS failed to take into account the outpatient code editor version 6.0, which contains an edit that requires a modifier - 25 on any evaluation and management code with status code “S” or “T.” As result, these claims were erroneously denied. CMS said contractors would adjust any claims initially denied for HCPCS code G0344, however the providers must request the adjustment.
3. MORE CHARITY LAWSUITS DISMISSED
The last 2 weeks saw the dismissal of Federal lawsuits against tax-exempt hospitals in New York, Arizona, and Illinois over billing and charging the uninsured for healthcare services. Judges rejected plaintiffs’ arguments that federal law creates a contract with exempt facilities that is breached if those facilities don’t provide a set amount of charity care. Judges also rejected the argument that any laws exist requiring healthcare providers to charge uninsured patients the same rates as those negotiated with insurers.
Last week, Judge Loretta Preska of the U.S. District Court for the Southern District of New York became the first judge to dismiss with prejudice all of the plaintiffs’ claims in Kolari v. New York-Presbyterian Hospital. “With prejudice” means that the lawsuits cannot be pursued in state court. Preska ruled that none of plaintiffs’ claims had any legal basis.
4. WEB SITE ALLOWS CONSUMERS TO COMPARE HOSPITAL QUALITY
This week, HHS launched it’s the HospitalCompare web site, the latest in the line of healthcare quality data reporting sites that are part of the agency’s overall quality improvement initiative. Currently, consumers can research hospital quality information on 17 measures for three common medical conditions—heart attack, heart failure, and pneumonia—with new conditions and measures to be added in the future.
Virtually all acute care hospitals in the U.S. submitted quality data for the site. The data reporting was a requirement to qualify for the full FY05 Medicare inpatient PPS market basket update. The quality reporting initiative was supported by Hospital Quality Alliance, a partnership of hospitals, government agencies, quality experts, purchasers, consumer groups and other healthcare organizations.
5. PRIVATE PAYERS FALL BEHIND IN MENTAL HEALTH SPENDING
More of the financial burden of mental health treatment shifted to public programs during the decade ending 2001, according to new research published March 29 on the Health Affairs Web site. Mental health spending by public programs, such as Medicare and Medicaid, grew at an annual rate of 6.8 percent, while spending by private payers grew at an annual rate of 3.7 percent.
Annual Spending Growth Rate by Behavioral Health Service 1991 – 2001
All health.... 6.5 percent
All behavioral health..... 5.6 percent
Substance abuse...... 4.7 percent
Inpatient specialty units in general hospitals..... 1 percent
Reseachers also found that while the share of spending for inpatient mental health services declined 12 percentage points to 28 percent by 2001, the share of spending for mental health drugs grew 11 percentage points, to 17 percent, in 2001.
6. RACIAL DISPARITY INITIATIVE HAS FINANCIAL IMPLICATIONS
Healthcare strategic planners should consider the financial implications of government initiatives to reduce racial and ethnic healthcare disparities, as HHS works towards its national goal of eliminating those disparities by the end of this decade.
Medicare, Medicaid, the Indian Health Service, and the Department of Defense will likely play a part in meeting that goal, since they cover millions of racial and ethnic minorities. In order to meet the elimination goal, these programs will need data information systems to monitor and provide feedback about racial and ethnic differences in the quality of care.
From a reimbursement perspective, providers may find opportunities to meet pay-for-performance quality goals by ensuring these populations receive appropriate care.
7. CMS OPEN FORUM TO ADDRESS CLAIMS APPEALS
An April 15 CMS Open Door Forum will address the changes being implemented to the claims appeals process through which Medicare beneficiaries and, under certain circumstances, healthcare providers and suppliers can appeal adverse determinations under Medicare Part A and Part B. The conference will run from 2:00 - 3:30 p.m., Eastern time. There is no preregistration for those participating by telephone. Several days prior to the forum, CMS will post a brief slide presentation on the ODF web site.
8. HFMA CEO SPEAKS TO FINANCIAL MANAGERS IN CHINA
In March, HFMA president and CEO Richard L. Clarke, FHFMA, traveled to China to participate in two seminars on healthcare financial management. The purpose of the trip was to determine if HFMA’s basic healthcare financial management training would be helpful to Chinese healthcare financial managers—and to explore whether such a venture would offer useful professional opportunities for HFMA’s members.
China’s healthcare system is complex and varied: Although the government owns most hospitals, there is a significant “entrepreneurial” spirit among Chinese healthcare managers as the national Chinese government encourages hospital management to become more self-sufficient. The dilemma for HFMA’s Chinese colleagues is that they have limited experience in managing hospitals as business enterprises.
9. MEDICARE CODING AND BILLING UPDATE
Several noteworthy Medicare transmittals were posted April 1 to the CMS web site, including coverage of PET scans for certain cancers and an update to 100-04 and therapy code lists. HFMA staff review CMS notices regularly for transmittals that affect healthcare financial managers, and post links to those transmittals on HFMA’s web site.
10. QUICK LINKS
NEW MEDICARE ADVANTAGE RATES TO RISE. CMS has announced that the national per capita Medicare Advantage rates for 2006 for aged beneficiaries is 4.8 percent. CMS also released the risk adjustment model for the Medicare Part D benefit in 2006.
OPEN DOOR FORUM ON ADMINSTRATOR SCOPE OF WORK. On April 19, CMS will host an open door forum on the proposed performance measures for the primary Part A and Bart B Medicare administrative contractor scope of work. The proposed performance measures will be released for comment on April
11. ADMINISTRATIVE SIMPLIFICATION COMPLAINT PROCEDURE
A March 26, 2005, Federal Register notice outlines procedures for filing a complaint of noncompliance with HIPAA administrative simplification provisions. The notice also describes the procedures CMS would use to review the complaints.
CORPORATE INTEGRITY AGREEMENTS UPDATED. The OIG has updated the list of corporate integrity agreements on its web site.
Copyright 2005 Healthcare Financial Management Association, all rights reserved. HFMA Express News ISSN: 1540-0689. Volume XII, Number 14.
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