HFMA Express News - October 7, 2005

IN THIS WEEK’S ISSUE:

1. More States Get Sec. 1115 Waivers for Katrina Evacuees
2. Proposed Regulations Encourage Electronic Health Records
3. Hurricane Katrina Displaces 6,000 Physicians 
4. Current ASC Rates Will Remain in Effect for 2006
5. CMS Clarifies Additional Documentation Requests for Medical Review
6. Teleconference Paves Way for IRS E-Filing Initiative
7. SEC Extends Sarbanes-Oxley Section 404 Compliance Dates
8. FASB Exposure Draft Examines Assets, Liabilities with Uncertainties
9. Medicare Coding and Billing Update
10. Quick Links

1. MORE STATES GET SEC. 1115 WAIVERS FOR KATRINA EVACUEES

Alabama, Florida, and Mississippi healthcare organizations will receive payments for the medical care provided to Hurricane Katrina evacuees, according to HHS. The agreement would allow evacuees who cannot pay for care to get coverage through Medicaid or SCHIP for up to five months. The emergency section 1115 waiver will provide medical services to evacuees who are children up to age 19 and their parents, pregnant women, individuals with disabilities, low-income Medicare beneficiaries, and those who need long-tem care.

The agreement would create an uncompensated care pool to help compensate physicians, hospitals, and others who give needed medical treatment to evacuees who do not currently have health insurance and are ineligible for Medicaid or SCHIP.

In a related story, the IRS announced some tax relief for victims of Hurricanes Katrina and Rita by postponing deadlines for affected taxpayers to file tax returns, pay taxes, and perform other time-sensitive acts until February 28, 2006.

2. PROPOSED REGULATIONS ENCOURAGE ELECTRONIC HEALTH RECORDS

In an effort to encourage the use of electronic health record (EHR) and electronic prescribing systems, HHS has announced it will propose an exception to the rule prohibiting physician self-referral, to let hospitals and other organizations give doctors EHR and electronic prescribing system hardware, software, and training services. A second proposal would create a safe harbor for organizations donating such technology.

The proposed rules would establish conditions under which hospitals may donate EHR and e-prescribing technologies to physicians. CMS is considering a cap on the value of donations to reduce the potential that they will be used as kickbacks for patient referrals. Currently, physicians are prohibited from referring patients to facilities in which they have a financial interest, unless an exception applies. The proposed rules will be published in the October 11. Federal Register.

3. HURRICANE KATRINA DISPLACES 6,000 PHYSICIANS

Nearly 6,000 active physicians in six Louisiana and four Mississippi counties or parishes have been displaced by Hurricane Katrina, making it the largest displacement of doctors in U.S. history, according to a new study conducted by the University of North Carolina at Chapel Hill.

The majority of the displaced physicians (2,952) were specialists, while 1,292 practiced primary care medicine and 272 practiced obstetrics and gynecology. Also, 1,300 medical students, originally enrolled at Tulane University and Louisiana State University, have been accepted by programs in Baton Rouge and east Texas.

In addition to the physician practices that were destroyed, very few medical records housed in community health centers located in the poorer areas of New Orleans were spared by the disaster, the study notes.

4. CURRENT ASC RATES WILL REMAIN IN EFFECT FOR 2006

The current ambulatory surgical center (ASC) payment rates and wage index values will remain in effect for FY06, CMS has announced. The Medicare Modernization Act delayed the implementation of new FY06 wage index values until CMS can determine the impact of changes in the FY06 inpatient hospital wage index on payment amounts for individual ASCs.

Medicare contractors will continue to use the FY04 wage index to calculate payments to ASCs and the payment rates that were effective for services furnished beginning April 1, 2004. Payment for ASCs will remain at the following rates:

The FY06 ASC payment rates are:

• Group 1  $333
• Group 2  $446
• Group 3  $510
• Group 4  $630
• Group 5  $717
• Group 6  $826 ($676+$150 for intraocular lenses)
• Group 7  $995
• Group 8  $973 ($823+$150 for intraocular lenses)
• Group 9  $1,339

5. CMS CLARIFIES ADDITIONAL DOCUMENTATION REQUESTS FOR MEDICAL REVIEW

CMS has revised the Medicare Program Integrity Manual to clarify that Medicare contractors can request and review additional documentation related to a patient’s condition before and after a service is rendered when the information on a claim and its attachment are not sufficient to determine coverage. The new policy is based on a recent report by the OIG that recommends reviewing additional information along with the claim documentation for chiropractic services. CMS is extending the OIG recommendation to apply to all services.

The policy also instructs contractors not to deny other claims related to the documentation of the patient’s condition unless contractors review and give appropriate consideration to the additional information.

6. TELECONFERENCE PAVES WAY FOR IRS E-FILING INITIATIVE

The IRS conducted its first Form 990 electronic filing forum via teleconference this week, answering many questions about the requirement that larger organizations electronically file in 2006. Among the questions answered were two that are particularly important to healthcare providers:

• PDFs may not be attached to electronic claims to provide supplementary information because the PDF format does not readily permit pertinent data to be retrieved and used by the IRS; however, more than 200 pages of free text may be included in the electronic filing.
• Most of the fields that allowed limited numbers of characters in early e-filing versions will be “unlimited” for 2006 filings.

Exempt organizations with assets of $100 million or more, and that file at least 250 returns (counting information returns such as W-2s), will be required to file 990s electronically in 2006. The e-filing requirement will be broadened in 2007 by lowering the assets threshold to $10 million.

A second phone forum will provide a more general discussion about electronic filing for tax-exempt organizations, and is tentatively scheduled for November 1, 2005, from 1:00-3:00 p.m. Eastern time.

 

7. SEC EXTENDS SARBANES-OXLEY SECTION 404 COMPLIANCE DATES

The Security and Exchange Commission (SEC) has voted to extend for an additional year the compliance dates regarding its internal control reporting requirements for companies that are not accelerated filers. Currently, a public company subject to the reporting requirements would have to include in its annual report a report by management on the effectiveness of the company’s internal control over financial reporting and an accompanying auditor’s report.

Under the extension, a company that is not an accelerated filer will be required to comply with the “Section 404” requirements for its first fiscal year ending on or after July 15, 2007.

The rule amendments, published in the September 29 Federal Register (with a comment period ending October 31, 2005), also redefined “accelerated filers” as companies that have at least $75 million but less than $700 million in public float. 

8. FASB EXPOSURE DRAFT EXAMINES ASSETS, LIABILITIES WITH UNCERTAINTIES

The Financial Accounting Standards Board (FASB) has issued an exposure draft titled Selected Issues Relating to Assets and Liabilities with Uncertainties and is inviting comments on the role of probability and uncertainty in defining, recognizing, and measuring assets and liabilities. That role currently varies among FASB standards and concepts statements, the FASB notes.

Consideration of probability and uncertainty are aspects of upcoming deliberations on matters related to the conceptual framework project, such as: revisions to existing definitions of financial statement elements, concepts for recognizing them, and attributes for measuring them. FASB says responses to the invitation to comment will enter into that consideration. The exposure draft was released September 30, 2005; the comment letter deadline is January 3, 2006.

9. MEDICARE CODING AND BILLING UPDATE

CMS recently issued transmittals updating several of Medicare’s prospective payment systems, including:

• Hospital outpatient PPS
• Hospital inpatient PPS
• Long-term care hospital PPS
• Inpatient rehabilitation facility PPS

HFMA staff review CMS notices regularly for transmittals that affect healthcare financial managers, and post links to those transmittals on HFMA’s web site.

10. QUICK LINKS

HEALTHCARE PROVIDER TAXONOMY CODE UPDATE. Carriers and durable medical equipment regional carriers must get version 5.1 of the healthcare provider taxonomy code (HPTC) list and use it to update their internal HPTC tables, CMS instructed in transmittal 694.

NPI IMPLEMENTATION UPDATES. CMS has released the second in a series of special Medlearn Matters articles on the national provider identifier (NPI). It includes instructions on getting and sharing the NPI, what providers can do to prepare for NPI implementation, and NPI transition plans for fee-for-service providers.

OIG TESTIMONY ON POST-KATRINA ACTIVITIES. The OIG established a work group to address the immediate and long-term needs of those affected by Hurricane Katrina, and has provided testimony to the House Energy & Commerce Subcommittee on Oversight and Investigations about the OIG’s activities to guard against waste, fraud, and abuse in post-Katrina recovery and relief efforts.

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