HFMA Express News - May 13, 2005

IN THIS WEEK’S ISSUE:

1. CMS to Begin Payments for Care to Undocumented Aliens
2. National Provider ID Procedures Announced
3. HPSA and PSA Payment Rules Revised Again
4. Drug Administration Billing and Payments Clarified
5. Minnesota Health Systems Accept Pricing, Collection Agreements
6. HSAs See Rapid Growth Since September
7. CBO Report Explores High-Cost Medicare Beneficiaries
8. HFMA Extends Condolences to Joyce Zimowski
9. Quick Links
10. New in the Resource Center

1. CMS TO BEGIN PAYMENTS FOR CARE TO UNDOCUMENTED ALIENS

CMS has issued its plan, going into effect immediately, for distributing funds to eligible providers for emergency health services provided to undocumented and other specified aliens. MMA Section 1011 provides $250 million annually for fiscal years 2005 through 2008, with two-thirds of the funds to be divided among all 50 states and the District of Columbia based on their relative percentages of undocumented aliens. One-third will be shared by the six states with the largest number of undocumented alien apprehensions (Arizona, California, Florida, New Mexico, New York, and Texas). The funds will be doled out in bill-specific payments to hospitals, physicians, and ambulance providers for dates of service on or after May 10, 2005. Providers should keep in mind the funds are limited and retroactive adjustments may be required.

2. NATIONAL PROVIDER ID PROCEDURES ANNOUNCED

A new identifier for use in standard electronic healthcare transactions is now available, CMS recently announced. The national provider identifier (NPI) will replace the different identifiers currently used by each health plan. This will eliminate the need for healthcare providers to use different numbers to identify themselves when conducting standard transactions with multiple health plans.

Providers can apply for an NPI on-line beginning May 23, 2005, or by mail beginning July 1, 2005. Beginning in the fall, groups can submit applications for multiple providers electronically.

3. HPSA AND PSA PAYMENT RULES REVISED AGAIN

Starting October 1, 2005, Medicare will allow payment of the physician bonus on just the professional component of claims for services with a professional component and technical component indicator of “1” (diagnostic or radiology services) when furnished in a health professional shortage area (HPSA) or a physician scarcity area (PSA), according to a new CMS transmittal. This replaces an April 29 transmittal (547) regarding revision to HPSA and PSA payment rules.

CMS has instructed carriers to ensure that their systems are able to calculate the bonus payment just for the professional component on these claims. This transmittal also creates a process whereby physicians can chose to not receive any PSA or HPSA bonus payments on services that would otherwise be eligible.

4. DRUG ADMINISTRATION BILLING AND PAYMENTS CLARIFIED

In a May 6 transmittal, CMS clarified that hospitals must report all appropriate HCPCS codes and charges for separately payable drugs in addition to reporting the applicable drug administration codes. According to CMS, drugs are to be billed in multiples of the dosage identified by the billing code, and rounded up if necessary.

For packaged drugs, CMS requests that hospitals voluntarily report the HCPCS code and charges for drugs that are packaged into payments for the corresponding drug administration service. Hospitals paid under the outpatient PPS should report an appropriate CPT code for chemotherapy drug administration by infusion, CMS clarified.

5. MINNESOTA HEALTH SYSTEMS ACCEPT PRICING, COLLECTION AGREEMENTS

Four health systems have signed an agreement with Minnesota Attorney General Mike Hatch last week over hospital pricing and debt collection practices. The systems are Allina Health System, North Memorial Health Care, Park Nicollet Health Services, and HealthEast Care System. The Minnesota Hospital Association, which helped broker the agreement, is encouraging all hospitals in the state to adopt the agreement.

The agreement establishes a price cap for the uninsured that would guarantee those with household incomes at or below $125,000 the same discount that hospitals give their largest commercial insurer. The health systems also agreed to standardized collection practices, including a zero tolerance policy for abusive debt collection conduct. The agreement, when combined with a prior agreement with Fairview Health Services, affects approximately 50 percent of Minnesota's hospital capacity.

6. HSAs SEE RAPID GROWTH SINCE SEPTEMBER

The number of people covered by health savings accounts (HSAs) or high-deductible health plans (HDHPs) more than doubled between September 2004 and March 2005, to 1.03 million, according to the latest survey of America’s Health Insurance Plans (AHIP) member groups that offer the products.

Nearly 400,000 people were covered in the group market under these plans in March 2005. This includes 147,000 in firms with 50 or fewer employees and 162,000 in firms with 51 or more employees. AHIP member companies reported covering an additional 88,000 people in the group market in March 2005, but did not report the breakdown between small and large groups.

7. CBO REPORT EXPLORES HIGH-COST MEDICARE BENEFICIARIES

Medicare expenditures are concentrated among relatively few beneficiaries, and focusing on high-cost beneficiaries could be one way to reduce the program’s overall costs, according to a new Congressional Budget Office (CBO) report. CBO found a significant degree of concentration in the spending of Medicare beneficiaries, both in a given year and over time. High-cost beneficiaries (those in the top 25 percent in terms of their spending) accounted for 85 percent of annual expenditures in 2001 and for 68 percent of five-year cumulative expenditures from 1997 to 2001.

CBO noted that realizing reductions in spending would ultimately rest on the ability to devise and implement effective intervention strategies, clinical or otherwise, to change beneficiaries' use of medical services.

8. HFMA EXTENDS CONDOLENCES TO JOYCE ZIMOWSKI

HFMA extends its deepest condolences to Joyce Zimowski, 2004-05 HFMA National Chairman, on the recent loss of her husband, Edward Fox, who passed away May 10, 2005. Fox was an attorney with Harris Beach, LLP, in Pittsford, NY. Contributions in his memory may be made to:

• Unity Health Foundation, 1555 Long Pond Rd., Rochester, NY 14626 or
• Rochester General Hospital Foundation, 1445 Portland Ave., Suite G04, Rochester, NY 14621

9. QUICK LINKS

NEW COVERAGE CRITERIA FOR POWER WHEELCHAIRS. CMS has announced new national coverage criteria for mobility assistive equipment, including power wheelchairs and scooters, related to the ability of the beneficiary to safely accomplish mobility-related activities of daily living.

HEALTH SERVICES COMPENSATION COST INDEX. Health services compensation costs grew 1.2 percent in the first quarter of 2005, twice the growth rate of the previous quarter, according to the Bureau of Labor Statistics.

PATIENT SAFETY ARTICLES. Advances in Patient Safety: From Research to Implementation, a compendium of 140 articles sponsored by the Agency for Healthcare Research and Quality and the Department of Defense, describes what federally funded programs know about medical errors and how they have implemented programs to improve patient safety over the last five years.

CIA AGREEMENT WITH HAWAII REGION KAISER HEALTH PLANS. The OIG has posted the inspection report and the CIA entered into with the Hawaii Region of Kaiser Foundation Health Plan, Inc., the Hawaii Region of Kaiser Foundation Hospitals, and the Hawaii Permanente Medical Group, Inc.

10. NEW IN THE RESOURCE CENTER

SEVEN PRINCIPLES OF BEST PRACTICE FINANCIAL MANAGEMENT. The keys to capital access lie in the rigorous, consistent application of corporate finance principles. The first report of the Financing the Future II series details key examples in financial planning and execution by leading healthcare organizations and corporations. It was developed by HFMA in partnership with GE Commercial Finance Healthcare Financial Services and Kaufman, Hall & Associates, Inc.

CODING AND BILLING BIBLIOGRAPHY. Use this fact sheet to make sure your coding and billing staff have convenient access to the most current versions of these core reference works and that they know how to use them efficiently.

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

PricewaterhouseCoopers is pleased to sponsor this weekly update of critical financial and regulatory issues. Look to this section of HFMA Express News for regular updates on PwC's insightful research into where the health industry is today and where it is heading.