HFMA Express News - July 8, 2005

IN THIS WEEK’S ISSUE 

1. HHS Required to Recalculate DSH Payments to Hospitals
2. Home Health Agencies to Get 2.5 Percent Increase for CY06
3. TrailBlazer Wins Bid to Process Claims for Undocumented Aliens
4. Medicaid Commission Appointments Criticized
5. CMS Explores Role in Establishing Personal Health Records
6. UnitedHealth Group and PacifiCare to Merge
7. Senators Propose Bipartisan Healthcare Bills
8. Quick Links
9. New in HFMA's Resource Center

1. HHS REQUIRED TO RECALCULATE DSH PAYMENTS TO HOSPITALS

The U.S. Court of Appeals for the District of Columbia Circuit has ordered the HHS Secretary to recalculate the disproportionate share hospital payments to plaintiff hospitals and has affirmed that the district court had jurisdiction to order the reopening of the hospitals' Notice of Program Reimbursement. The court explained that "HCFA's" (now CMS') old method of calculating DSH entitlement was "inconsistent with the applicable law," and that CMS had improperly restricted DSH eligibility and reduced payments to eligible hospitals. 

2. HOME HEALTH AGENCIES TO GET 2.5 PERCENT INCREASE FOR CY06

Medicare PPS payments to home health agencies will increase by 2.5 percent for CY06, CMS announced in a July 14 proposed rule, which would be the full home health market basket update minus 0.8 percent, in accordance with the MMA. The increase, which would be effective Jan. 1, 2006, is expected to provide an additional $330 million in payments to home health agencies next year. Under the proposal, the updated national 60-day episode rate would become $2,320.89.

CMS is not proposing a change to the outlier fixed dollar loss ratio, but has left the door open for a possible change in the final rule if the data available at that time indicates change is warranted. The new core-based statistical areas would also be adopted under the provisions of the rule. Comments on the proposed rule are due Sept. 6.

3. TRAILBLAZER WINS BID TO PROCESS CLAIMS FOR UNDOCUMENTED ALIENS

CMS has approved TrailBlazer Health Enterprises as the national contractor to process claims for emergency health services provided to undocumented aliens. Section 1011 of the MMA provides $250 million per year for FY05-08 to providers who furnish emergency health services to undocumented aliens.

According to CMS, TrailBlazer will assist providers with enrollment and billing issues, calculate provider payment amounts, and serve as the compliance contractor. TrailBlazer has established a web site to inform providers about enrollment, claims processing, and appeals procedures, as well as a toll-free number for provider inquiries (1-866-860-1011). CMS expects that providers will be able to submit an electronic Section 1011 provider enrollment application in mid-August and payment request by mid-October.

4. MEDICAID COMMISSION APPOINTMENTS CRITICIZED

HHS named members to a commission charged with reforming and stabilizing Medicaid, but the appointed chair, former Republican Tennessee Gov. Don Sundquist, is receiving criticism from some quarters. While governor, Sundquist presided over TennCare, a Medicaid program considered by some to be innovative but that today struggles.

"The decisions he made [overseeing TennCare] were fundamentally flawed," commented Michele Johnson, an attorney with the Tennessee Justice Center, according to the July 9 Tennessean. However, Sen. Bill Frist, R-Tenn., commended the appointments, saying that Sundquist "will bring a unique perspective to the challenges facing the Medicaid program broadly."

The entire Medicaid Advisory commission as well is receiving a fair amount of disapproval, particularly from Democrats and consumer advocates who maintain the Commission is not bipartisan and is taking more dollars from the Medicaid program than may be warranted.

Vice-chair of the commission is former Maine Gov. Angus King, an independent. Of the other 11 voting members, five are current or former federal and state agency leaders. Active healthcare providers are included among the 15 nonvoting members. The first meeting has been scheduled for July 27 in Washington, D.C.

5. CMS EXPLORES ROLE IN ESTABLISHING PERSONAL HEALTH RECORDS

On July 21, CMS will hold a special open-door forum to obtain input from stakeholders in the healthcare system, including physicians, beneficiary advocates, health systems, and other providers and payers, on the role that CMS might play in supporting the development and adoption of personal health record technologies. CMS defines the personal health record as a collection of health information, electronic in format, which is specific to an individual and controlled and freely accessed by that individual. It may contain medical information ranging from laboratory test results and allergic sensitivities to insurance information such as enrollment and benefits. The personal health record, CMS says, differs from an electronic health record in that it is owned and/or controlled by the individual, not a healthcare provider, and can contain significantly more than the individual's medical history.

This CMS initiative begins work toward the goal of enabling beneficiaries to use their Medicare information in personal health records to make informed healthcare decisions. Preregistration for the call is not required; just dial in to 800-837-1935 at 2 p.m. EDT and reference conference ID 6586606.

6. UNITEDHEALTH GROUP AND PACIFICARE TO MERGE

UnitedHealth Group announced that it has signed a definitive agreement to merge with PacifiCare Health Systems, Inc. According to UnitedHealth Group chairman and CEO William McGuire, MD, "this transaction expands the platform and presence to more fully advance capabilities, use technology to improve the customer experience, and support evidence-based care on behalf of our joint clients." Through its family of businesses, UnitedHealth Group serves approximately 55 million individuals nationwide, while PacifiCare Health Systems is one of the country's largest consumer health organizations, with nearly 3.2 million health plan members and approximately 11.3 million specialty plan members nationwide.

The transaction is expected to close in late 2005 or early 2006, provided the required regulatory approvals have been granted as well as approvals by PacifiCare shareholders.

7. SENATORS PROPOSE BIPARTISAN HEALTHCARE BILLS

On June 30, Senate Committee on Finance chairman Sen. Chuck Grassley (R-Iowa) and committee member Sen. Max Baucus (D-Mont.) introduced the Medicare Value Purchasing Act, which would create quality-based Medicare payments for physicians and practitioners, hospitals, health plans, skilled nursing facilities, home health, and end-stage renal disease facilities. The proposal would implement recommendations from the Institute of Medicine and the Medicare Payment Advisory Commission to establish financial incentives that promote high-quality care and better value in the Medicare payment system.

A second proposal, the Better Healthcare Through Information Technology Act, submitted by Sens. Mike Enzi (R-Wyo.) and Edward Kennedy (D-Mass.), would provide assistance to healthcare providers to invest in health information technology. The senators suggest that the two bills will provide a road map for healthcare providers that could ultimately lead to improved quality, better healthcare coverage, and a stronger system for all.

8. QUICK LINKS

NEW ONLINE CMS SERVICE FOR LOW-INCOME BENEFICIARIES. CMS has announced a new web-based service that will assist low-income beneficiaries with Medicare drug coverage. The updated version of BenefitsCheckUpRx screens beneficiaries for eligibility and then allows online application for the extra help that covers an average of 95 percent of drug costs for beneficiaries who have limited income.

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 June.

CMS APPROVES 143 NEW MEDICARE ADVANTAGE PLANS. As a result of the MMA, CMS announced recently that it has approved 143 new Medicare Advantage Plans to provide services in 2005.

SCHIP FINAL FY06 ALLOTMENTS. CMS has published FY06 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.

CMS QUARTERLY LISTING OF PROGRAM ISSUANCES. CMS has published a notice listing manual instructions, memoranda, regulations, national coverage determinations, FDA-approved investigational device exemptions, and other issuances published from January through March relating to the Medicare and Medicaid programs.

9. NEW IN HFMA'S RESOURCE CENTER

MAKING PRICES MAKE SENSE: A BALANCED APPROACH TO DEFENSIBLE PRICES. Learn tools and techniques for developing an appropriate and effective pricing strategy.

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

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