IN THIS WEEK’S ISSUE:
- IRFs Face Enforcement of 2004 Criteria
- Sub-Acute Care Expedited Review Instructions Issued
- RHC/FQHC Payment Process Monitoring Needed
- Greater Scrutiny Ahead for Consecutive Inpatient Stays
- Changes and Increased Oversight Ahead for Post-Acute Care
- OIG Posts Semi-Annual Report and Three Opinions
- Healthcare Spending Rose by 8 Percent in 2004
- Quick Links
- New in the Resource Center
1. IRFS FACE ENFORCEMENT OF 2004 CRITERIA
CMS announced June 21 that it will proceed with implementing the classification criteria for inpatient rehabilitation facilities (IRFs) adopted in a May 7, 2004, final rule. The rule provided for a four-year transition period during which the required percentage of patients with a qualifying condition (the “compliance threshold”) increases gradually from 50 percent for cost reporting periods beginning July 1, 2004, to July 1, 2005, to 75 percent for cost reporting periods beginning on or after July 1, 2007.
Enforcement of the classification criteria was suspended by the Consolidated Appropriations Act of 2005, which directed CMS not to change the status of certain IRFs for their failure to comply with the rule until it had reviewed recommendations from the Government Accountability Office (GAO, then called the General Accounting Office) for clinically appropriate IRF classification criteria. In its April 2005 recommendations, the GAO did not recommend that CMS delay implementing the May 7 final rule, even though it did call for further refinement of the criteria.
2. SUB-ACUTE CARE EXPEDITED REVIEW INSTRUCTIONS ISSUED
CMS has issued “preliminary instructions” on the expedited review process for Medicare beneficiaries in home health, hospice, comprehensive outpatient rehabilitation facility, skilled nursing facility, and swing bed care settings. Starting July 1, the new process provides expedited reconsideration procedures for beneficiaries when a provider informs them of a Medicare termination of coverage decision.
This right to an expedited review currently exists only with respect to inpatient hospital discharges. Hospitals with swing beds should take note, as neither the implementing rule nor a recent MedLearn Matters article (SE0538) listed swing beds among the affected provider types.
3. RHC/FQHC PAYMENT PROCESS MONITORING NEEDED
Three significant areas of concern have emerged regarding states’ new Medicaid payment systems for rural health clinics (RHCs) and federally qualified health centers (FQHCs), the GAO reported June 17. The concerns have evolved as a result of the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA). Most states used the BIPA PPS, and about half of states used an alternative methodology—generally cost-based reimbursement or a PPS with features slightly different from those required for the BIPA PPS—to pay for at least some of RHC and FQHC services.
The GAO’s primary concerns are:
- Some states’ BIPA PPS payment rates are inappropriate because they did not include all Medicaid-covered FQHC and RHC services in the rates, as required by law. In addition, CMS guidance and oversight regarding the new BIPA payment requirements were inadequate to ensure consistent state compliance with the law.
- Over half the states using the BIPA PPS had not determined how they would make the required adjustment to BIPA PPS rates for a change in scope of services.
- Some states did not ensure their alternative payment methodologies are paying, as required, no lower than what FQHCs and RHCs would have received under the BIPA PPS.
With regard to payment at the appropriate level, the GAO reports, CMS commented that it had not received complaints from FQHCs and RHCs about the amount of payment received under alternative methodologies. CMS also responded that it was not interested in exploring development of a better inflation index, and the GAO indicated plans for “elevating the issue to a matter for congressional consideration.”
4. GREATER SCRUTINY AHEAD FOR CONSECUTIVE INPATIENT STAYS
CMS will direct intermediaries to step up data analysis efforts regarding consecutive Medicare inpatient hospital stays and perform medical reviews if aberrant billing patterns are discovered, the agency said in response to a recent OIG study.
The OIG found that 20 percent of the instances of consecutive stays were associated with poor quality of care and unnecessary fragmentation of care. According to the OIG, some of the quality of care issues include failure to treat patients in a timely manner, inadequate monitoring and treatment of patients, and inadequate care planning. Unnecessary fragmentation of care involved cases that should have been consolidated into fewer stays and unwarranted transfers between acute care and swing beds.
Based on those findings, the OIG recommended better monitoring of the quality of inpatient services provided within sequences of consecutive Medicare inpatient stays. CMS said it would prepare a Medlearn Matters article to educate providers on the appropriate uses of skilled nursing swing beds.
5. CHANGES AND INCREASED OVERSIGHT AHEAD FOR POST-ACUTE CARE
A recent hearing of the House Ways and Means Committee’s health subcommittee focused on the four settings of post-acute care—long-term acute care hospitals (LTCHs), inpatient rehabilitation facilities (IRFs), skilled nursing facilities (SNFs), and patients’ homes, or home health—and the inconsistencies of provider payments, as well as administrative processes.
Much concern was centered on the dramatic differences found in the separate payment methodologies for treatments of similar healthcare needs. For example, a patient having a knee replacement and complications would, CMS asserted, incur Medicare costs that would vary by over $13,000 (at 2003 rates) depending on the setting in which care was provided—from $4,447 in a SNF to $17,671 for the LTCH (with an IRF getting $10,829 and home health $5,165).
Herb Kuhn, director of the CMS Center for Medicare Management, said his agency is committed to developing more consistent payment and patient assessment systems that would put the patient in the most appropriate post-acute care setting.
6. OIG POSTS SEMI-ANNUAL REPORT AND THREE OPINIONS
The Office of the Inspector General (OIG) has posted its semi-annual report to Congress on activities completed for the first six months of FY05. The OIG reported $17 billion in savings and expected recoveries from OIG investigations, evaluations, and audit reports completed during this period.
The OIG also recently issued three advisory opinions. In advisory opinion 05-08, the OIG concluded that the proposed arrangement between a laboratory that would provide blood supplies at no charge to certain physicians and would pay them a $3 to $6 dollar per patient fee could potentially generate prohibited compensation under the antikickback statute and the OIG could potentially impose administrative sanctions on the requestor.
In advisory opinion 05-09, the OIG stated that the proposed arrangement in which a municipality would apply an “insurance only” billing policy to residents (who reside in the remote areas of the municipality’s fire service locale) for emergency medical services would not implicate the antikickback statute as it applies to Medicare and any other Federal healthcare program that has cost-sharing provisions.
In advisory opinion 05-10, the OIG found that a proposed arrangement in which the city is the sole provider of emergency medical services within city boundaries and does not subcontract these services would not generate prohibited remuneration under the antikickback statute.
7. 2004 HEALTHCARE SPENDING ROSE 8 PERCENT
Healthcare spending for those in the U.S. with private health insurance increased by 8.2 percent in 2004, about the same as the growth in 2003 and almost four times the growth in wages, according to a study by the Center for Studying Health System Change, published by Health Affairs. The study also found that healthcare spending growth in 2004 exceeded the rate of inflation by 2.6 percentage points.
In 2001, healthcare spending increased by 11.3 percent, compared with 10.7 percent in 2002 and 8.4 percent in 2003. The study projects the rates of growth for the next few years to approximate the 2003-2004 experience.
8. QUICK LINKS
MASS ADJUSTMENT OF TRANSPLANT CLAIMS. CMS has directed Medicare intermediaries to adjust certain transplant claims with discharge dates on or after August 8, 2003, which were processed incorrectly, resulting in overpayments. According to a recent Medlearn Matters article, the adjustment will occur automatically without any action required by the provider.
CalPERS 2006 RATES. The California Public Employees’ Retirement System (CalPERS) has announced a 8.7 percent rate increase for 2006 basic HMO premiums, the smallest gain since 1999 without major changes in office visit and prescription drug copayments.
OPEN DOOR FORUM ON IHS AND PRESCRIPTION DRUG COVERAGE. CMS will host an Open Door Forum June 27, 2:00-4:00 p.m. (Eastern Time), to review the Medicare prescription drug benefit as it relates to the Indian Health Service (IHS), tribal health programs, urban Indian programs, and CMS outreach to beneficiaries. To participate, call (800) 837-1935 and use conference ID 6586603.
IMMIGRANTS AND THE UNINSURED. Immigrants accounted for 26 percent of the uninsured population in 2003, up from 19 percent in 1994, likely because the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 restricted their public assistance benefits for five years after they enter the U.S., reports the Employee Benefit Research Institute.
CAST A VOTE FOR HEALTHCARE FINANCE LEADERSHIP. Make sure healthcare finance leaders are represented among Modern Healthcare’s 2005 list of the “Top 100 Most Powerful People in Healthcare.” HFMA President and CEO Richard Clarke has been recognized on this list for the past three years. Voting ends at midnight tonight (June 24).
9. NEW IN THE RESOURCE CENTER
FY06 POST-ACUTE CARE TRANSFER PAYMENT POLICY PROPOSED CHANGES. This useful reference sheet summarizes the proposed, expanded post-acute transfer policy, published in the FY06 hospital inpatient PPS proposed rule. These changes are particularly significant because CMS has said it is developing new compliance strategies for this policy.
THE CASE FOR QUALITY: EFFECTIVE CLINICAL AND FINANCIAL CASE MANAGEMENT. Learn about the essential processes and bottom-line benefits of combining clinical and financial case management.
HFMA ROUNDTABLE: REVENUE CYCLE UPGRADES--INCREASE CASH FLOW AND LOWER EXPENSES. Gain viewpoints and advice from four healthcare executives on opportunities to improve the revenue cycle.
Copyright 2005 Healthcare Financial Management Association, all rights reserved. HFMA Express News ISSN: 1540-0689. Volume XII, Number 25. Editor: Rob Fromberg rfromberg@hfma.org, (800) 252-HFMA, ext. 385.
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