HFMA Express News - October 21, 2005

IN THIS WEEK’S ISSUE:

1. Uninsured Billing Lawsuit Granted Class Action Status
2. Medicaid Cuts May Shift to Medicare
3. CMS Clarifies Billing for Repetitive Services
4. Insurers to More Offer Consumer-Directed Health Products
5. Study Finds Altered Billing and Collection Practices
6. New Code for Power Mobility Devices
7. Quick Links
8. New in the Resource Center

1. UNINSURED BILLING LAWSUIT GRANTED CLASS ACTION STATUS

A circuit court judge in Portland, Oregon, has granted class action status to plaintiffs in a lawsuit filed against Legacy Health System, Portland, according to a press release issued by the Scruggs Law Firm. The lawsuit, which is the first of its kind to receive class-action certification in state court, accuses Legacy of overcharging uninsured patients without their knowledge. The plaintiffs in the suit allege that Legacy charged uninsured patients much higher rates than it charged those covered by Medicare and private insurance for identical services. This lawsuit comes on the heels of the class action status granted by the Washington Superior Court to plaintiffs in a lawsuit against a Virginia Mason Medical Center in Seattle for allegedly charging certain patients more for the same procedures than others. 

2. MEDICAID CUTS MAY SHIFT TO MEDICARE

Financial managers working on calendar year budgets should keep their options open with regard to federal reimbursement, which is the subject of fundamentally different approaches in the House and Senate committees working on the FY06 budget reconciliation bills. To offset some of the government’s Hurricane Katrina relief spending, Rep. Joe Barton (R-Texas), chairman of the House Energy and Commerce Committee, seeks $2 billion more in Medicaid cuts than the much-publicized $10 billion in spending reductions called for by the 2006 budget resolution. On the other hand, Sen. Chuck Grassley (R-Iowa), chairman of the Senate Finance Committee, is determined to ease the hit on Medicaid by reducing Medicare expenditures. The Senate position is expected to be decided this month, and then the House and Senate differences will be addressed.

Meanwhile, the National Governors Association (NGA) has written Senate leadership urging that states be fully reimbursed for Hurricane Katrina costs and that Medicaid’s reform take the direction the NGA advocates, with changes in the areas of prescription drugs, long term care, cost sharing, and benefit flexibilities.

3. CMS CLARIFIES BILLING FOR REPETITIVE SERVICES

CMS has updated the Medicare claims processing manual to clarify billing for repetitive services. According to CMS, if there is an inpatient stay, or outpatient surgery or services subject to outpatient PPS during a period of repetitive outpatient services, providers can submit one bill for repetitive services for the entire month as long as the provider uses an occurrence span code 74 on the monthly repetitive bill to include the inpatient stay, day of outpatient surgery, or hospital services subject to outpatient PPS.

In addition, when reporting a HCPCS code for separately payable, nonrepetitive hospital outpatient PPS services, hospitals should report on the same claim charges for all services and supplies associated with the services furnished on the same date.   

4. INSURERS TO OFFER MORE CONSUMER-DIRECTED HEALTH PRODUCTS

Most health insurance providers intend to offer a consumer-directed health (CDH) product to employers within the next year, according to results from the latest annual survey of group health insurers conducted by Milliman Consultants and Actuaries. The survey of HMOs and PPOs shows that 93 percent expect to offer employers healthcare reimbursement accounts or health savings accounts. However, it is unclear how many employers and employees will choose these products given their low selection rate in the past.

Respondents said they expect CDH premium revenue, which will only be 2.5 percent of all commercial premium revenue in 2005, to more than double to 5.2 percent in 2006. Forty-four percent of the respondents expect to offer a tiered provider network within the next year, and more than half of all respondents reported that they currently share or plan to share price and quality information for hospital and physician services with members within the next year. Complete results for the Milliman 2005 Group Health Insurance Survey will be available later on this month.

5. STUDY FINDS ALTERED BILLING AND COLLECTION PRACTICES

The Center for Studying Health System Change (HSC) has found many hospitals have adopted more generous charity-care guidelines for uninsured patients in the aftermath of publicity about aggressive hospital billing and collection practices and several dozen lawsuits alleging hospitals overcharged uninsured patients. The findings are reported in a new HSC Issue Brief, “Balancing Margin and Mission: Hospitals Alter Billing and Collection Practices for Uninsured Patients.” The study is the result of site visits to 12 nationally representative communities: Boston; Cleveland; Greenville, S.C.; Indianapolis; Lansing, Mich.; Little Rock, Ark.; Miami; northern New Jersey; Orange County, Calif.; Phoenix; Seattle; and Syracuse, N.Y.  

Other key findings of the study include:

• It is now common for hospitals to provide charity care to uninsured people with incomes under 200 percent of the federal poverty level, or $38,700 for a family of four in 2005, and offer sliding-scale discounts beyond this income threshold, in some cases up to 400 percent or 500 percent of the poverty level;
• Some hospitals have restricted access to care for some uninsured—for example, some public hospitals limit nonemergency care for uninsured out-of-county residents; and,
• Most changes in billing and collection policies have had negligible impact on hospital finances to date.

“In every HSC community, most hospitals have either recently changed their pricing, billing, and collection policies or tried to improve the clarity of the information provided to patients,” said HSC research analyst Andrea Staiti, a coauthor of the study. 

6. NEW CODE FOR POWER MOBILITY DEVICES

CMS has established a new G code (G0372) to recognize additional physician services and resources required to establish and document the need for power mobility devices (PMDs), effective October 25, 2005.  

Code G0372 indicates that all of the information necessary to document the PMD prescription is included in the medical record, and the prescription, along with the supporting documentation, is delivered to the PMD supplier within 30 days after the face-to-face examination. Medicare will pay $21.60 for code G0372 for 2005, adjusted by the geographic area where the service is provided, and based on the physician fee schedule values for a level 1 established office visit, CMS said.

In a related story, CMS said it will develop new quality standards for durable medical equipment suppliers after a GAO study found that Medicare improperly paid $900 million for durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) due to fraud by suppliers. CMS plans to propose new DME standards this year, with proposed regulations due next year.   

7. QUICK LINKS  

ANNUAL HOME HEALTH HCPCS CODE UPDATES. CMS has updated the lists of HCPCS codes that are subject to home health consolidated billing requirements, effective January 1, 2006, in transmittal 710.  
UPDATED DISASTER CLAIMS MODIFIER TRANSMITTAL. CMS has recalled transmittal 183, dated October 13, 2005, and replaced it with transmittal 184. The transmittal updated the national modifier and condition code for disaster-related claims to include Hurricane Rita and to remove all references to Medicaid.  

IRS 2006 PENSION PLAN LIMITS. The IRS has announced the cost-of-living adjustments applicable to dollar limitations for pension plans and other items for tax year 2006. Many of the pension plan limitations will change for 2006 and several limitations, set by the Economic Growth and Tax Relief Reconciliation Act of 2001, are scheduled to increase at the beginning of 2006 (for example, elective deferrals to section 401(k) plans and to the Federal Government’s Thrift Savings Plan).  

SEPTEMBER INFLATION INDICATOR. The Consumer Price Index for All Urban Consumers leaped 1.2 percent in September, mostly because of the surge in energy costs, the Bureau of Labor Statistics reported. Consumers paid 0.3 percent more for medical costs for the month, and hospital charges increased 0.3 percent, after declining 0.4 percent in August.  

HOSPITAL IT SURVEY. Ninety-two percent of surveyed hospitals said they were actively considering, testing, or using clinical IT, according to an American Hospital Association report. Commonly cited barriers to IT adoption were investment costs, lack of interoperability, acceptance of technology by clinical staff, and availability of well-trained IT staff.

OIG 2006 WORK PLAN LISTSERV. The new OIG work plan is expected to be available in late October or early November. The OIG notes the 2006 work plan will be more readable and easier to use. Once the document is posted on the OIG web site, the office will publish a notice of its availability on its listserv.  

2006 BONUS PAYMENTS FOR HPSAs. CMS has updated the FY06 health professional shortage area (HPSA) bonus payment file. The update includes files for automated payments of HPSA bonuses for services rendered January 1, 2006, through December 31, 2006.

8. NEW IN THE RESOURCE CENTER

MEDICARE PART D PAYMENT SYSTEM EXPLAINED. Learn how the payment system works for Medicare’s new outpatient prescription drug benefit, which goes into effect January 1, 2006.  

Updated! HOSPITAL FINANCIAL MANAGEMENT CHALLENGES IN 2005: AN HFMA PLANNING TOOL (PPT, 70 slides). This presentation covers the major challenges facing hospital financial managers in the coming year, and is a handy budget planning tool. You can also modify it to brief your board and executive team on these important issues.

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

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