IN THIS WEEK’S ISSUE:
- NMHS Withdraws From Charity-Care Settlement
- Ways and Means Resumes Tax-Exempt Hearings
- FASB Issues Interpretation on Asset Retirement Obligations
- CMS Clarifies ASC Code Payment Policy
- Uninsured Population to Grow by 11 Million in Seven Years
- CMS Seeks Comments on Evidence-Based NCDs
- Forum to Address Quality-Based Payment Demonstration
- Quick Links
1. NORTH MISSISSIPPI WITHDRAWS FROM CHARITY-CARE SETTLEMENT
North Mississippi Health System (NMHS) announced that it has withdrawn from the memorandum of understanding (MOU) it signed as part of a settlement in a class action lawsuit brought by the Scruggs Law Firm. NMHS says that when it entered into the agreement, it believed the financial consequences of the settlement would be minimal. The health system says that many of the terms found in the MOU are now included in its charity care and other policies.
The MOU included opt-outs related to financial or other unanticipated consequences such as government reimbursement policies, opening of a competing hospital, or an influx of persons seeking charity care from outside NMHS’ service area. Since the MOU was announced, NMHS’s charity care has jumped from $45 million provided in 2004 to a projected $60 million in 2005. “NMHS has experienced a significant increase in the volume of charity care. It appears that patients are bypassing other hospitals in the 24-county service area and coming to NMHS to receive charity care,” John Heer, NMHS president and chief executive officer, said in a press release.
Charity care class action lawsuits were filed against many hospitals and health systems at the time NMHS entered into the MOU, but the federal courts have dismissed many of them since then. In response, plaintiffs have indicated they intend to shift their efforts to state courts.
2. WAYS AND MEANS RESUMES TAX-EXEMPT HEARINGS
Scrutiny of not-for-profit organizations is intensifying on Capitol Hill. On April 20, the House Ways and Means Committee will resume its series of hearings on the tax-exempt sector. The hearing follows on the heels of one last week by the Senate Finance Committee, which is considering developing legislation to regulate tax-exempt organizations. The Ways and Means Committee will hear from the Government Accountability Office, the Congressional Budget Office, the Joint Committee on Taxation, and other legal experts. In announcing the hearing, chairman Bill Thomas (R-CA) said, “Congress has a responsibility to oversee and assure the American taxpayer that the tax-exempt sector is living up to its responsibilities.”
The focus of the hearing will be on the tax-exempt sector’s size, scope and impact on the economy, the need for Congressional oversight, and what the IRS is doing with regard to oversight and compliance. Any individual or organization may submit a written statement for inclusion in the printed record of the hearing.
3. FASB ISSUES INTERPRETATION ON ASSET RETIREMENT OBLIGATIONS
The Financial Accounting Standards Board (FASB) recently published FASB Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations. FASB says that Interpretation 47 will result in:
- More consistent recognition of liabilities related to asset retirement obligations,
- More information about expected future cash outflows associated with those obligations, and
- More information about investments in long-lived assets because additional asset retirement costs will be recognized as part of the carrying amounts of the assets.
FASB states that this interpretation was necessary because diverse accounting practices had developed with respect to the timing of liability recognition for legal obligations associated with the retirement of a tangible long-lived asset when the timing and method of the obligation settlement are conditional on a future event. Interpretation 47 clarifies terms used in FASB Statement No. 143, Accounting for Asset Retirement Obligations. Interpretation 47 is effective no later than the end of fiscal years ending after December 15, 2005.
4. CMS CLARIFIES ASC CODE PAYMENT POLICY
CMS has clarified payment policy regarding HCPCS code Q3001 for radioelements for brachytherapy services performed in ambulatory surgical centers (ASCs). According to CMS, providers are required to use the code instead of CPT code 79900 (discontinued as of January 1, 2005) for billing brachytherapy seeds used in ASCs. Previously, Q3001 was only paid under the outpatient PPS and billable only to fiscal intermediaries. However, effective for dates of service on or after January 1, 2005, it became carrier-priced in the 2005 Medicare physician fee schedule database.
CMS attributes the confusion regarding the use of Q3001 to an earlier HCPCS processing note indicating that the code could not be used for Part B services. The note has since been deleted in the HCPCS database. Carriers are required to process claims containing HCPCS code Q3001 and adjust claims brought to their attention.
5. UNINSURED POPULATION TO GROW BY 11 MILLION IN SEVEN YEARS
The number of nonelderly Americans without health insurance will grow from 45 million in 2003 to 56 million by 2013, according to projections published in a Health Affairs web exclusive article this month. This growth will be driven by rising healthcare costs, which makes health insurance increasingly unaffordable, the authors assert.
These findings were based on the relationship between healthcare spending growth and personal income. Health spending is expected to outpace median personal income by 2.4 percent annually. For each percentage point increase in healthcare spending relative to personal income, the number of uninsured will increase by 246,000, the authors estimate. Further, based on estimates from the Institute of Medicine, the growth in the number of uninsured is expected to result in 4,500 deaths annually, and an increased annual loss of human capital of $16 billion to $32 billion.
6. CMS REQUESTS COMMENTS ON EVIDENCE-BASED NCDs
CMS has released draft guidance on the factors to be considered when making national coverage determinations (NCDs) for certain items and services related to protocol-driven, prospective data collection efforts. CMS refers to this approach as coverage with evidence development (CED). The intention is to identify a small group of high priority pilots on topics for which there is substantial agreement that better evidence would contribute to expanding access to specific technologies and services.
CMS plans to hold an Open Door Forum on May 9, 2005, to allow for public dialogue about the CED policy and encourage feedback on other potential venues for information sharing. Comments on the draft guidance are due June 5, 2005, and can be submitted online to CAGInquiries@cms.hhs.gov
7. FORUM TO ADDRESS QUALITY-BASED PAYMENT DEMONSTRATION
CMS will host an Open Door Forum on the Medicare Health Care Quality Demonstration on April 20, 2005. Required by Medicare Modernization Act Section 646, the demonstration program is to encourage physician groups, integrated delivery systems, and regional healthcare consortia to improve the quality of patient care through: incentives to improve healthcare safety, quality, and efficiency, use of best practice guidelines; examination of utilization and outcomes measurement and research variations; shared decision-making between providers and patients; and culturally and ethnically sensitive healthcare delivery.
8. QUICK LINKS
SECURITY RULE COMPLIANCE STARTS NEXT WEEK. April 20 is the effective date for all covered entities to be in compliance with the requirements of the HIPAA security rule (small health plans have until April 20, 2006, to comply). The January 21 HFMA Express News included a list of HFMA resources to help with compliance.
GME PAYMENT FAQS. CMS has posted frequently asked questions on how hospitals may include residents who are training in nonhospital settings in their resident count for purposes of determining their direct and indirect graduate medical education payments.
DoD ELIMINATES NONAVAILABILITY STATEMENTS. A Department of Defense final rule eliminates the coverage requirement for certain TRICARE beneficiaries to get a nonavailability statement from a military medical treatment facility before receiving inpatient or maternity care from a civilian provider.
COURT RULING ON TENNCARE CUTS. The 6th U.S. Circuit Court of Appeals has ruled that TennCare may proceed with disenrollment and related policy changes that will affect approximately 323,000 enrollees. The decision has been posted on the Tennessean web site.
COMMUNITY HEALTH CENTER GRANTS. Under the Health Resources and Services Administration Consolidated Health Center Program, HHS announced plans to release 105 new health center grants totaling more than $63 million to help communities create or expand access to comprehensive primary healthcare services for low-income, uninsured patients.
KEY SENIOR HOUSING AND CARE FINANCIAL INDICATORS. Loan volume, loan performance, and occupancy rates increased for the senior housing and care industry during the fourth quarter of 2004, according to the National Investment Center for the Seniors Housing & Care Industries.
Copyright 2005 Healthcare Financial Management Association, all rights reserved. HFMA Express News ISSN: 1540-0689. Volume XII, Number 15. Editor: Rob Fromberg rfromberg@hfma.org, (800) 252-HFMA, ext. 385.
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