IN THIS WEEK’S ISSUE:
- President Takes Aim at Social Security
- CMS Proposes 3.1 Percent Payment Increase for Long-Term Care Hospitals
- New HHS Secretary Focuses on Medicaid Savings
- OIG Releases Supplemental Compliance Guidance for Hospitals
- HHS Proposes New Medicare E-Prescribing Regulations
- Pay For Performance Pilot Announced
- CMS: Changes to ESRD Facility Conditions of Coverage, New Organ Procurement Center Requirements
- CMS Expands Coverage for Cancer Drugs and Defibrillators
- Surveys Seek Stakeholder Input on Electronic Claims Attachments
- Quick Links
- In the HFMA Resource Center
1. PRESIDENT TAKES AIM AT SOCIAL SECURITY
President Bush provided the first specifics of his plans for social security reform in his State of the Union address Wednesday night.
His changes would maintain the current benefit structure for those over 55; however, younger workers could opt to have a percentage of their payroll taxes go to accounts invested in stocks and bonds that could be passed along to their heirs if not needed during their lifetime.
- The president’s brief proposals for health care included:
- A call for more affordable health care
- Tax credits to help the low income buy health insurance
- Community health centers in every poor community
- Association health plans
- Expanded health savings accounts
- Medical liability reform
2. CMS PROPOSES 3.1 PERCENT PAYMENT INCREASE FOR LONG-TERM CARE HOSPITALS
On February 3, CMS published a proposed rule that would increase by 3.1 percent Medicare payment to long-term care hospitals (LTCHs) for discharges between July 1, 2005, and June 30, 2006. According to CMS, aggregate payments to these hospitals would increase to $2.96 billion during the payment period. Although CMS provided a transition period to move LTCHs into prospective payment, 96 percent of the approximately 330 facilities have opted to forego the transition and be paid at the federal rate. The proposed LTCH PPS standardized amount for 2006 would be $37,975.53.
Other significant provisions of the proposed payment rule include:
- A reduced outlier fixed-loss amount of $11,544 (down from 2005’s $17,864)
- Adoption, without transition, of the new core-based statistical areas (CBSAs) for defining labor market areas.
The proposed rule would also extend for one year the surgical DRG exception to the three-day or less interrupted stay policy, which allows an acute care hospital providing care to an LTCH patient that is grouped to a surgical DRG under the acute care hospital inpatient PPS to receive a separate payment under the inpatient PPS.
Comments on the proposed rule will be accepted until March 29.
3. NEW HHS SECRETARY FOCUSES ON MEDICAID SAVINGS
New HHS secretary Michael Leavitt made it clear this week that the Bush administration is going to turn to Medicaid for savings in the 2006 budget. He expects to hold down the federal match to state Medicaid programs through:
- More aggressive restrictions on state funding mechanisms that rely on intergovernmental transfers
- Reductions in state expenditures for drugs
- Restrictions on the ability of the population to qualify for Medicaid by transferring personal assets to family members
4. OIG RELEASES SUPPLEMENTAL COMPLIANCE GUIDANCE FOR HOSPITALS
On January 27, the OIG issued a supplement to its voluntary compliance program guidance for hospitals that takes into account recent changes to the hospital PPS and focuses on measuring and improving the effectiveness of existing compliance efforts, in addition to identifying additional fraud and abuse risk areas for hospitals.
Risk areas addressed in the supplement include:
- Billing under the outpatient PPS
- Physician self-referral law (Stark)
- Federal anti-kickback statute
- Relationships between hospitals and physicians
- Relationships between hospitals and other providers
- Joint ventures
- Practitioner recruitment
- Furnishing of substandard care
The guidance also looks at lessons learned in the area of corporate compliance.
5. HHS PROPOSES NEW MEDICARE E-PRESCRIBING REGULATIONS
HHS today proposed new regulations in the Federal Register that will establish standards for electronic prescriptions for Medicare when the prescription drug benefit takes effect on January 1, 2006. E-prescribing enables a physician to transmit a prescription electronically to the patient's choice of pharmacy. It also enables physicians and pharmacies to obtain from drug plans information about the patient's eligibility and medication history.
The proposed rule will require drug plans participating in the Medicare Part D drug benefit program to support standardized prescribing, but use of the standards among physicians and pharmacies will be voluntary.
In announcing the rule, CMS stated it would soon be soliciting the participation of physicians, hospitals, prescription drug plan sponsors, health plans, pharmacies and others, in pilots to test new or emerging standards and other aspects of e-prescribing.
CMS is proposing January 1, 2006, for the compliance date for these standards. Public comments will be accepted through April 5, 2005.
6. PAY FOR PERFORMANCE PILOT ANNOUNCED
Medicare will soon begin a 10-group pilot program that pays physicians up to 5 percent extra for lowering costs and providing higher quality care, according to CMS administrator Mark McClellan. The cost measures will be based on all Medicare spending for the patients involved, and not just the physician services. The three-year pilot will use 32 measures of quality and levels of preventive care developed with the involvement of the American Medical Association and the National Committee on Quality Assurance. It will include more than 5,000 physicians and 200,000 beneficiaries.
If the pilot achieves its cost and care objectives, Medicare will be able to expand the program without legislation. CMS also plans to have another pilot soon for physicians in smaller practices, according to McClellan.
7. CMS: CHANGES TO ESRD FACILITY CONDITIONS OF COVERAGE, NEW ORGAN PROCUREMENT CENTER REQUIREMENTS
CMS published a proposed rule today revising the Medicare end-stage renal disease (ESRD) conditions of coverage and “modernizing” the program. The proposed rule, which will affect over 4,700 dialysis facilities, updates the requirements on dialysis facilities to reflect advances in technology and care practices. Some of the proposed changes include:
- Additional patient rights, such as advance directives, a 30-day notice prior to involuntary discharge, posting of external grievance mechanisms, and internal patient grievance process
- Additional patient safety protections such as defibrillators in the emergency equipment list and updated fire safety code provisions
- Improvement of the existing patient plan of car;
- Minimum federal qualifications for patient care technicians
- Incorporation of the Centers for Disease Control and Prevention infection control guidelines
In other new proposed rules, CMS issued new requirements that organ procurement organizations (OPOs) and organ transplant centers must meet to qualify their services for coverage under the Medicare program. The proposed OPO requirements include multiple process performance standards that address all OPO functions, from screening hospital referral calls to packaging organs for transport. The proposed transplant center rule contains transplant center approval and re-approval requirements as a subset of the CMS hospital conditions of participation.
8. CMS EXPANDS COVERAGE FOR CANCER DRUGS AND DEFIBRILLATORS
CMS announced national Medicare coverage decisions for cancer patients that expand coverage for diagnostic tests and chemotherapy treatments. The action would require Medicare contractors to pay for off-label uses, in selected NCI-sponsored clinical studies, of new anti-cancer drugs approved for colorectal cancer (including oxaliplatin, irinotecan, bevacizumab, and cetuximab). The diagnostic tests decision means Medicare will pay for PET scans for patients who participate with their physician in high quality clinical studies and submit information to a PET database. The drug coverage decision is final, while there will be draft guidance on the PET scans issued by March 31.
CMS has also announced expanded coverage for implantable cardioverter defibrillators (ICDs) increasing by one-third the number of Medicare beneficiaries eligible to receive an ICD. Providers will be required to submit specific demographic, clinical, provider, and device data into a data registry at the time of the procedure so that CMS can ensure that patients are receiving high quality, medically necessary care, and determine the optimal use of ICDs. CMS also announced a proposal to expand coverage of ultrasound stimulation for non-healing fractures to beneficiaries enrolled in comparative prospective clinical trials.
9. SURVEYS SEEK STAKEHOLDER INPUT ON ELECTRONIC CLAIMS ATTACHMENTS
The Workgroup for Electronic Data Interchange (WEDI), Association for Electronic Health Care Transactions, Health Level 7 (HL7), and X12 Electronic Claims Attachments Survey Work Group are requesting help from the provider, health plan, private, governmental, and vendor communities that involves completion of a web-based survey. The input gathered by the survey will help the workgroups advise other industry representatives on how to implement and use the next set of HIPAA standards.
The workgroups hope to get responses from a very broad representation of the healthcare industry. The responses will also be important to the HL7 and X12 workgroups’ work on new standards and attachment documents. All surveys must be completed by March 7.
10. QUICK LINKS
DMEPOS FEE SCHEDULE: QUARTERLY UPDATE. CMS has published instructions regarding the April quarterly update for the 2005 durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) fee schedule in transmittal 451.
OIG DECEMBER 2004 PROGRAM EXCLUSIONS. The OIG has corrected the December 2004 exclusions on individuals and other entities.
POTENTIAL PATIENT SAFETY GOALS RELEASED FOR COMMENT. The Joint Commission on Accreditation of Healthcare Organizations released for review and comment its draft list of specific goals and requirements from which the National Patient Safety Goals for 2006 will be chosen.
CMS ISSUES INSTRUCTIONS ON UNASSIGNED FORM CMS-1500 CLAIMS. 42 Effective July 1, 2005, Unassigned Form CMS – 1500 Medicare Part B claims or its electronic format submitted with incomplete or invalid information (including data governed by HIPAA requirements) will be returned as unprocessable to the provider for correction, according to CMS.
COMMON WORKING FILE EDITS FOR PAP SMEAR. Effective July 1, 2005, when a physician performs and bill for a screening Pap smear (Q0091) for a low risk patient who has already received a covered Pap smear in the past two years, the claim will be denied, according to CMS in a January 21 transmittal.
11. IN THE HFMA RESOURCE CENTER
UPDATED! HFMA’S INTERNET GUIDE TO MEDICARE CODING AND BILLING INSTRUCTIONS
Use this handy billing compliance reference to be sure you are up to date on important Medicare coding and billing instructions.
Copyright 2005 Healthcare Financial Management Association, all rights reserved. HFMA Express News ISSN: 1540-0689. Volume XII, Number 5.
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