Dear Readers:
Changes Coming to HFMA Express News
Starting January 13, HFMA Express News will become HFMA's Weekly News--your source for the latest healthcare business news from Capitol Hill to Wall Street to Main Street. And it will have a great new look as well! More information will be coming your way soon.
HFMA Express News will not be published on December 30. Your next issue will be January 6, 2006. HFMA wishes you a safe and relaxing holiday!
IN THIS WEEK’S ISSUE:
- Budget Reconciliation Will Cut Medicare and Medicaid
- Both Federal and State Health Emergency Preparedness Is Weak
- Hospital Inflation Projected to Hold Steady
- Consumer Medical Costs Increased in November
- FASB Seeks Survey Respondents for Codification System
- CMS Clarifies Consultation Services
- CMS Offers E-Prescribing Teleconference
- Coding and Payment Changes for Drug Administration Issued
- PacifiCare and UnitedHealth Given OK to Merge
- Quick Links
- New in the Resource Center
1. BUDGET RECONCILIATION WILL CUT MEDICARE AND MEDICAID
A payment freeze for physicians and home health were part of the conference report reconciling differences between House and Senate versions of the Deficit Reduction Act of 2005. The conference agreement would also give states more flexibility with Medicaid, encouraging copayments and restricting eligibility for nursing home patients that means “no more Medicaid for millionaires” in the words of the House Energy & Commerce committee, which has jurisdiction over the program.
Other provisions include:
- Extending the inpatient rehabilitation facility classification criteria phase-in, adding a year to the transition and retaining the 60 percent threshold for 2006
- Ambulatory surgical center payment reforms that ensure payment rates for ASC services do not exceed payments for the same services provided in the hospital outpatient setting, effective January 1, 2007
- Continuation of the 5 percent rural home health add-on for 2006
- Extension of the Medicare dependent hospital program to 2011 and rebasing it
The House approved the conference report on Monday and the Senate passed the bill, 51 to 50, Wednesday with Vice President Dick Cheney casting a tie-breaking vote. Democratic procedural maneuvers will require the House to vote again before it can be sent to the President for his signature, but according to the AP/Washington Post, “passage is all but certain.”
2. BOTH FEDERAL AND STATE EMERGENCY PREPAREDNESS IS WEAK
The federal government got a D+ for post-9/11 health emergency preparedness, and more than half of the states scored 5 or less out of 10 for their key indicators of health emergency preparedness, according to a report released by Trust for America’s Health (TFAH). The report, “Ready or Not? Protecting the Public’s Health from Disease, Disasters, and Bioterrorism,” rated such aspects as capabilities to test for chemical and biological threats and hospital surge capacity to care for patients in a mass emergency.
The report says, “Both federal and state preparedness for major health emergencies must be accelerated in order to adequately protect the American people.” TFAH is supported by grants from the Robert Wood Johnson Foundation, Bauman Foundation, and the Beldon Fund.
3. HOSPITAL INFLATION PROJECTED TO HOLD STEADY
The fourth-quarter 2005 projections through 2008 show inflation is expected to remain steady during the period, hovering between 4.4 and 4.5 percent, according to new estimates by R-C Healthcare Management Services. These projections are based on inflation of hospital expenses and represent the actual/projections from the producer price index (PPI), consumer price index (urban) (CPI-U) and CMS data.
CMS inflation projections are significantly lower, the analysts caution, due to lower CMS hospital compensation projections. CMS projections show a steady decline from 2005’s 3.3 percent to 2.8 percent in 2008.
4. CONSUMER MEDICAL COSTS INCREASED IN NOVEMBER
Consumers’ out-of-pocket costs for medical care in November increased 0.6 percent, after increasing 0.5 percent in October, according to the U.S. Bureau of Labor Statistics data released December 15. By comparison, the Consumer Price Index for all urban consumers (CPI-U) dropped 0.8 percent in November, largely because of declining energy prices, and the largest decline since a 0.9 drop in July 1949.
November’s medical cost increase reflects a 1.1 percent increase for hospital services, a notable rise over the 0.8 percent increase in October. Costs rose by 0.6 percent for drugs and supplies; charges for professional services increased 0.3 percent.
5. FASB SEEKS SURVEY RESPONDENTS FOR CODIFICATION SYSTEM
The Financial Accounting Standards Board (FASB) is asking people who perform GAAP research to complete a brief survey pertaining to its planned codification retrieval system for GAAP literature. Once complete, the codification will become the authoritative source of US GAAP, and all existing standards will be superseded. The web-based survey, which takes about 5-10 minutes to complete, will help FASB develop the requirements list for an electronic research system to support public access to the codification retrieval system.
6. CMS CLARIFIES CONSULTATION SERVICES
CMS has issued a transmittal clarifying the definition of a consultation, when it can be reported, and who should report the initial consultation. According to CMS, qualified nonphysician practitioners (NPP) can perform consultations when the requirements are met. In addition, a second-opinion consultation arranged through the attending physician should be reported by a physician or an NPP using the appropriate initial inpatient consultation code.
According to transmittal 782, dated December 16, 2005, follow-up visits to a consultation service should be reported with the subsequent hospital care codes (99231-99233) in hospital inpatient settings and with the new subsequent nursing facility care codes (99307-99310) in the nursing facility settings. Beginning January 1, 2006, the CPT nursing facility codes (99311-99313) are deleted and not valid for subsequent nursing facility visits, CMS said. Also, follow-up visits to a consultation service in the office or other outpatient settings should be reported with the office or other outpatient established patient codes (99212-99215).
7. CMS OFFERS E-PRESCRIBING TELECONFERENCE
On January 5, 2006, CMS will host a special Open Door Forum (ODF) on the e-prescribing final rule and the adopted standards for e-prescribing that were published in the November 7, 2005, Federal Register. CMS says this teleconference will include discussion of the timeline for the adoption of additional e-prescribing standards, the proposed foundation standards, and CMS’s plans to conduct a pilot project to test the additional standards.
The call will be at 2:00 p.m. (Eastern) and may go to 4:00 p.m. Dial 1-800-837-1935 five to ten minutes before the start time and use conference ID number 3100443
8. CODING AND PAYMENT CHANGES FOR DRUG ADMINISTRATION ISSUED
In transmittal 785, dated December 16, 2005, CMS has published the 2006 coding and payment changes for drug administration under the outpatient PPS. Beginning January 1, 2006, CMS will replace some of the CPT codes used for drug administration services under the outpatient PPS in 2005 with more detailed CPT codes incorporating specific procedural concepts, as defined and described by the CPT manual.
To facilitate the transition to more specific CPT codes within the hospital environment and to help hospitals ensure continued correct coding concepts, drug administration services provided in 2006 under the outpatient PPS will be billed using a combination of CPT codes and C-codes. CMS said hospitals should continue to bill a separate evaluation and management (E/M) code with modifier 25 only if a significant, separately identifiable E/M service is performed in the same encounter with outpatient PPS drug administration services.
This transmittal has not yet been posted to the CMS web site.
9. PACIFICARE AND UNITEDHEALTH GIVEN OK TO MERGE
California state regulators have approved UnitedHealth Group Inc.’s planned $8.1 billion acquisition of PacifiCare Health Systems Inc., after “executives gave assurances that the costs of the deal would not be borne by Cypress-based PacifiCare’s customers,” according to an article in the Los Angeles Times. Accordingly, UnitedHealth will invest $200 million in improved services to low-income residents living in service areas with little or no access to quality health care.
The proposed merger has been ratified by six states and still requires approvals from four states and antitrust regulators at the Justice Department, the article says.
10. QUICK LINKS
PATIENT SAFETY TOOL KIT. The American Society for Healthcare Risk Management has sent nearly 10,000 patient safety tool kits to hospital risk managers, consumer advocates, and marketing directors. The tool kit contains a video to be shared with caregivers, patients, and their families.
FDA PUBLIC HEALTH NOTIFICATION. Hospitals using Vapotherm® 2000 Respiratory Gas Administration devices are being advised by the FDA there is the occurrence of “positive Ralstonia spp. (bacteria) cultures from these devices and from exposed patients.” The FDA advises the use of alternative devices until the source of the contamination has been identified.
ADMINISTRATIVE ENFORCEMENT ACTIONS. The OIG posted the recent administrative enforcement actions with civil monetary penalties.
UPDATED OIG EXCLUSIONS AND REINSTATEMENTS. The OIG has posted the full updated list of excluded individuals and entities database file reflecting all OIG exclusion and reinstatement actions through November.
11. NEW IN THE RESOURCE CENTER
STRATEGIC DISASTER RECOVERY PLANNING PRESENTATION. Review the suggested steps in how to use HFMA’s CFO Checklist for Disaster Recovery as a planning tool, presented at the HFMA Region 9 Annual Healthcare conference by HFMA Disaster Recovery Task Force members Richard Rodriguez, FHFMA, and Lawrence Laddaga, Esq., FHFMA.
Copyright 2005 Healthcare Financial Management Association, all rights reserved. HFMA Express News ISSN: 1540-0689. Volume 12, Number 50. Editor: Rob Fromberg, rfromberg@hfma.org, (800) 252-HFMA, ext. 385.
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