IN THIS WEEK’S ISSUE:
- OIG Publishes 2006 Work Plan
- McClellan to Congress: Fix Physician Payment with Offsets
- Tax Relief Bill Boosts Accountability Requirements, Charitable Incentives
- CMS Revises Instructions on Provider Audits
- Quick Links
1. OIG PUBLISHES 2006 WORK PLAN
The OIG has published its 2006 work plan, which identifies the project areas the agency will address over the next fiscal year. These projects are developed in response to new issues, information, and the shifting priorities of Congress. Although the work plan highlights the OIG’s critical areas of concern pertaining to all providers, the areas getting more attention for the coming year include Medicare hospitals, Medicaid drug reimbursement, Medicare medical equipment and supplies, and information system controls. The administration of the Medicare Part D program is a new area to be examined.
The OIG will continue its oversight of HHS projects that provide relief to the areas and individuals affected by Hurricanes Katrina and Rita, in addition to those outlined in the new work plan. As these hurricane relief efforts are conducted, the OIG explains, resources will need to be shifted away from some projects originally planned.
2. MCCLELLAN TO CONGRESS: FIX PHYSICIAN PAYMENT WITH OFFSETS
CMS administrator Mark McClellan, MD, told a Congressional subcommittee on November 16 that the administration “will work with the Congress on a fully-offset provision to address the negative physician update for 2006 and 2007, with differential updates for physicians who report valid, consensus-based quality measures.” McClellan acknowledged that the current Medicare physician payment system will result in multi-year reductions in physician payments, and there is concern that such a system might not ensure access to care for Medicare beneficiaries. He referred to steps CMS has taken toward developing standards, information, and systems that can be part of a payment system based on quality and effectiveness of patient care. “These steps will prepare us to quickly and efficiently implement a fully modified payment system should Congress make that possible,” he said.
The 2006 Medicare physician payment update final rule, published in Monday’s Federal Register, will result in a 4.4 percent reduction in physician payments in 2006, in the absence of action by Congress. McClellan said CMS supports moving toward a performance-based payment system in Medicare that does not add to overall Medicare costs.
3. TAX RELIEF BILL BOOSTS ACCOUNTABILITY REQUIREMENTS, CHARITABLE INCENTIVES
Excise taxes for excess benefit, or “self-dealing,” transactions by disqualified individuals and managers in tax-exempt organizations would increase under the Tax Relief Act of 2005 (S 2020), which the Senate approved November 18. The bill includes a variety of reforms to crack down on abuses of charitable organizations and to encourage charitable giving.
The legislation also would extend the present-law public disclosure and inspection requirements and penalties applicable to Form 990 to the unrelated business income tax returns of charitable organizations. A charitable organization that normally has annual total gross revenues or gross assets of at least $10 million must include with its Form 990 and Form 990-T filings (if any) an independent auditor’s certification that the organization’s filings accurately reflect the organization’s annual unrelated business income tax liability.
The bill also includes incentives to encourage charitable giving. Among the provisions that are relevant to healthcare providers are: deductions for cash donations made by taxpayers who do not itemize their deductions; an exclusion from gross income for certain distributions from individual retirement accounts that would otherwise be taxable; and a mileage deduction for volunteers. The incentive package is similar to those included in the CARE Act. (S 1780) and companion House legislation, the Charitable Giving Act (HR 3908).
4. CMS REVISES INSTRUCTIONS ON PROVIDER AUDIT
CMS revised its instructions to contractors on changes regarding provider audit and settlement by rescinding transmittal number 83, dated November 4, 2005, and replacing it with transmittal number 84. According to CMS, contractors must settle all cost reports that are not scheduled for audit within 12 months of acceptance of the cost report unless the contractor has a documented reason why the cost report cannot be settled.
In addition, if a provider files an amended cost report and that cost report is not going to be audited, contractors are required to settle the cost report within the greater of five months from the acceptance of the amended cost report or the time left of the 12 months from the acceptance of the initial filed cost report.
5. QUICK LINKS
INTERIM FINAL RULE ON COMPETITIVE ACQUISITION PROGRAM. CMS has published an interim final rule with comment period to provide clarification and solicit comments on the relationship between drugs supplied under the competitive acquisition program (CAP) for Part B drugs and biologicals and the calculation of average sales price (ASP). The rule also excludes units of drugs supplied under the CAP from ASP calculations for a period of up to 3 years.
LAB NCD EDIT SOFTWARE CHANGES. CMS published a transmittal announcing changes that will be included in the January 2006 laboratory National coverage determination (NCD) edit software, effective January 1, 2006. The edit module will be updated quarterly to reflect NCD coding updates and changes.
NURSING HOMES AND DRUG BENEFITS. On November 18, CMS posted a new MedLearn Matters article that gives nursing home administrators key information about the shift in drug coverage from Medicaid to Medicare for covered nursing home patients.
Copyright 2005 Healthcare Financial Management Association, all rights reserved. HFMA Express News ISSN: 1540-0689. Volume 12, Number 46. Editor: Rob Fromberg, rfromberg@hfma.org, (800) 252-HFMA, ext. 385.
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