IN THIS WEEK’S ISSUE:
- OIG Counsel Stresses Caution on Gainsharing Ventures
- IRS Posts Draft Form 990 for Comment
- Wage Index Data Is Available for Review
- Inpatient PPS Outlier Reconciliation Instructions Released
- 2006 SNF HCPCS Codes Published
- Long-Term Care Facilities Must Provide Vaccinations
- More Published on Technology Safe Harbors
- New Diagnosis Code Required for Home Dialysis Claims
- OIG: Inhalation Drug Suppliers Provide Limited Services
- Quick Links
1. OIG COUNSEL STRESSES CAUTION ON GAINSHARING VENTURES
Gainsharing arrangements may violate the civil monetary penalty (CMP) rule and pose a substantial risk of violating the federal antikickback statute, concluded Lewis Morris, chief counsel of the Office of the Inspector General, in testimony to the House Ways and Means health subcommittee on October 7. However, he did state that when properly structured, gainsharing arrangements offer ways for hospitals to reduce costs without causing inappropriate reductions in medical services or rewarding referrals of federal healthcare program patients.
According to Morris, gainsharing between hospitals and physicians should occur only with strict safeguards that stress accountability, quality controls, and the prevention of direct payment for referrals. A major concern, Morris said is the impact of gainsharing on the quality of care provided to Medicare and Medicaid beneficiaries.
Morris cited congressional concerns that under the inpatient PPS, hospitals would have an economic incentive to pay physicians to discharge patients too soon or truncate patient care. Any hospital gainsharing plan that encourages physicians, through direct or indirect payments, to reduce or limit clinical services violates the CMP, Morris said. Hospitals that have obtained favorable advisory opinions, Morris added, established baseline thresholds based on historic utilization and national data to protect against inappropriate reductions in services and to ensure that physicians would not receive any money for savings that accrued beyond the baseline thresholds.
Also, arrangements intended to encourage physicians to “cherry pick” healthier patients for hospitals offering gainsharing while sending the sicker, more costly patients to other hospitals not offering gainsharing could potentially implicate the federal antikickback statutes, according to Morris.
2. IRS POSTS DRAFT FORM 990 FOR COMMENT
The draft Form 990 for 2005, recently posted for comment by the IRS, puts a new focus on current and former officers, directors, trustees, and key employees. Whereas Part V of the 2004 form was primarily a list of officers, directors, trustees, and key employees, with hours, compensation, benefits, and expense accounts/allowances, the proposed form for 2005 follows that listing with additional questions at line 75 about those individuals’ relationships with one another and related organizations. At line 75d, the IRS asks if the organization has a written conflict of interest policy.
New Part V-B asks for a list of former officers, directors, trustees, and key employees receiving payments during the year, and whether there were loans and advances or benefits and expenses attributable to them.
The form will apply to the 2005 calendar year returns, as well as those for tax years (or periods) beginning in 2005. The IRS has requested comments on the proposed form.
3. WAGE INDEX DATA IS AVAILABLE FOR REVIEW
CMS has posted to its web site two preliminary FY07 wage index files that hospitals should review to ensure that the correct data has been captured. The files are of FY03 Worksheet S-3 wage data and CY03 occupational mix data. The FY03 wage data file includes the wage data on cost reports submitted through June 30, 2005. The CY03 occupational mix file includes the occupational mix data collected during the 12 months of CY03 or a four-week period during January 2004, updated to include timely revisions submitted by hospitals for the FY06 wage index. Both files exclude facilities designated as critical access hospitals as of September 26, 2005.
The deadline by which hospitals must request data revisions and supply supporting documentation to their fiscal intermediaries is December 5.
4. INPATIENT PPS OUTLIER RECONCILIATION INSTRUCTIONS RELEASED
CMS has issued a transmittal instructing fiscal intermediaries on the implementation of the Medicare inpatient PPS outlier reconciliation policies. The transmittal addresses the application of the time value of money to reconciliation, how to calculate and use cost-to-charge ratios (CCRs), and when to use alternative data for cost-to-charge ratios.
According to CMS, for discharges on or after August 8, 2003, from hospitals whose charges appeared to have been increasing at an excessive rate, intermediaries would use alternative CCRs, rather than one based on the latest settled cost report. For all other hospitals, effective October 1, 2003, intermediaries would use CCRs from the latest settled cost report, or from the latest tentative settled cost report (whichever is from the later period) to determine a hospital’s operating and capital CCRs.
5. 2006 SNF HCPCS CODES PUBLISHED
CMS has published the 2006 annual updates to the list of HCPCS codes used for skilled nursing facility (SNF) consolidated billing. These updates will be used to revise the common working file (CWF) edits that allow only those services excluded from consolidated billing to be paid for separately by the carrier or fiscal intermediary. `
The new code files will be provided to the CWF by November 1, provided that there are no delays in the release of the Medicare physician fee schedule, CMS notes. The new code files, to be used by carriers and fiscal intermediaries for claims processing, will be posted to the CMS web site by the first week in December. CMS urges providers and contractors to view the “General Explanation of the Major Categories” bullet located under each annual update to understand the major categories, including additional exclusions not driven by HCPCS codes.
6. LONG-TERM-CARE FACILITIES MUST PROVIDE VACCINATIONS
Long-term care facilities (LTCs) will be required to immunize patients annually against influenza as a condition of participation in the Medicare and Medicaid programs, according to an October 7 final rule. Under the rule, LTCs must also offer residents a one-time immunization against pneumococcal disease.
Facilities must educate residents or their legal representatives about the benefits and potential side effects of receiving the vaccines. Residents or their family members can refuse the immunizations, and those who cannot receive immunizations because of medical reasons are exempt. The final rule, which CMS says is intended to decrease the morbidity and mortality rate from the diseases, went into effect October 7.
7. MORE PUBLISHED ON TECHNOLOGY SAFE HARBORS
Hospitals, group practices, prescription drug plan sponsors, and Medicare Advantage organizations would gain a safe harbor for the donation of technology for electronic drug prescribing and electronic health records (EHRs) under two proposed rules published in the October 11 Federal Register. The first proposed rule, issued by the HHS Office of the Inspector General, provides antikickback protection for donations of technology to physician groups, but expressed concern over the potential for some recipients to shift cost to hospitals or other donors by disposing of technology they have already obtained. The OIG is also concerned that the “remunerative” technology might have other functions built in that could have antikickback implications.
A proposed rule from CMS would provide exceptions to the physician self-referral prohibition for nonmonetary remuneration in the form of technology used to receive and transmit electronic prescription drug information, EHR software, and directly related training services. Both agencies addressed two aspects of the EHR safe harbors: one pertaining to donations made before the HHS secretary’s adoption by of product certification criteria (interoperability, functionality, privacy and security of records) expected in the near future and the other addressing donations made after product certification criteria have been adopted.
8. NEW DIAGNOSIS CODE REQUIRED FOR HOME DIALYSIS CLAIMS
Effective for claims with dates of service on or after October 1, suppliers of home dialysis supplies and equipment will be required to use diagnosis code 585.6 (end stage renal disease) on method II home dialysis claims, CMS instructed in transmittal 701. Previously, these suppliers were required to use diagnosis code 585.0 on all method II claims submitted to the durable medical equipment regional carriers. However, with the June 24 annual update to the International Classification of Diseases, Ninth Revision, Clinical Modification (ICD-9-CM) codes, Medicare will no longer accept diagnosis code 585.0. CMS notes that a provider education article related to the transmittal will be available on the Medlearn Matters area of its web site.
9. OIG: INHALATION DRUG SUPPLIERS PROVIDE LIMITED SERVICES
Medicare beneficiaries, on average, received little service from their inhalation drug suppliers beyond the call to the beneficiaries to ask if they needed a drug refill, the OIG concluded in a recent report. CMS, in a 2004 final rule, set the interim dispensing fee for inhalation drugs based on the assumption that beneficiaries received more services from the drug suppliers than has now been indicated.
In the review, conducted to determine the nature and extent of dispensing services provided by inhalation drug suppliers, the OIG found the most common service beneficiaries received from inhalation drug suppliers in 2003 was contact for drug refills. Beneficiaries were three times more likely to receive a service beyond a refill contact if their supplier also provided their respiratory equipment. Additionally, the most common way beneficiaries received services was by telephone and the service levels dropped off after the first month when suppliers billed for drugs.
10. QUICK LINKS
SCREENING MAMMOGRAPHY CODING. CMS has replaced transmittal number 426, dated January 14, 2005, with Transmittal 705, which allows the reporting of either code V766.11 or V76.12 as appropriate for screening mammography. Previously, providers only reported diagnosis code V76.12.
HURRICANES’ ECONOMIC IMPACT. Hurricanes Katrina and Rita have temporarily and significantly reduced the growth of national economic output. However, a full recovery in the affected Gulf states will take quite some time, according to testimony given by CBO director Douglas Holtz-Eakin.
AdvancePCS CORPORATE INTEGRITY AGREEMENT. The OIG has posted on its web site the terms and conditions of the corporate integrity agreement for AdvancePCS.
PART D ANTI-FRAUD EFFORTS. CMS has announced a three-pronged approach to fight fraud in the new Medicare Part D program, including new techniques in data analysis, cooperation with law enforcement, health plans, and consumer groups, and consumer education.
PAY-FOR-PERFORMANCE STUDY. In a study of the effect of a prototypical pay-for-performance program on quality of care, physician groups with baseline performance at or above the plan’s threshold improved the least but garnered the largest share of the bonus payments, according to the October 12 Journal of the American Medical Association.
Copyright 2005 Healthcare Financial Management Association, all rights reserved. HFMA Express News ISSN: 1540-0689. Volume 12, Number 40. Editor: Rob Fromberg, rfromberg@hfma.org, (800) 252-HFMA, ext. 385.
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