HFMA Express News - September 23, 2005

IN THIS WEEK’S ISSUE:

1. HFMA Issues Financial Management Checklist For Disaster Recovery
2. CMS Approves Texas 1115 Waiver for Evacuee Care
3. Diagnosis Coding Guidance Released
4. JCAHO Issues Emergency Planning Guide
5. Inpatient and Long-Term Care Hospital PPS Changes
6. Medicare FY06 Premium, Deductible Increases Announced
7. Class Action Status Granted in Patient Charges Lawsuit
8. Test Version of EHR Software Available for Physician Offices
9. Medicare Coding and Billing Update
10. Quick Links
11. New in the HFMA Resource Center

1. HFMA ISSUES FINANCIAL MANAGEMENT CHECKLIST FOR DISASTER RECOVERY

HFMA has posted a financial management checklist for disaster recovery to provide guidelines for the recovery of healthcare facilities’ financial functions once a disaster situation is stabilized. Some of the immediate steps that financial managers must take to address employee needs and business continuity include:

• Address payroll, employee benefit, and other HR issues that could affect employees’ state of mind and distract them from the important recovery work at hand.
• Project cash flow and needs, and make an action plan for getting necessary funding assistance. Key considerations include evaluating whether collection activities should be suspended, if banking relationships are intact, and if the facility can communicate with key payers.
• Ensure there is documentation in patient financial or clinical records to facilitate the reporting of the care and claims for disaster relief funding (see story #3 below).

The checklist was developed by HFMA’s Hurricane Relief Task Force and will be revised as HFMA members share their recovery experiences.

2. CMS APPROVES TEXAS 1115 WAIVER FOR EVACUEE CARE

CMS has approved a section 1115 waiver to address the healthcare needs of thousands of Hurricane Katrina evacuees in Texas and the medical providers who are caring for them. The Texas initiative is a model for disaster relief response, CMS says, that can be used by other states with low-income evacuees who need health care, and the agency is ready to provide expedited review and approval of these waivers.

The waiver establishes a separate temporary eligibility category for evacuees from the states damaged by Hurricane Katrina. Texas will provide temporary eligibility for five months of Medicaid or SCHIP coverage to evacuees who are parents, pregnant women, children under age 19, individuals with disabilities, low-income Medicare recipients, and low-income individuals in need of long-term care up to specified income levels included with the waiver template. Individuals in Texas can apply for evacuee status for five months of temporary eligibility through January 31, 2006. Texas will waive cost-sharing requirements for evacuees. In addition, an uncompensated care pool will be available to Texas through the section 1115 waiver. The waiver program will continue through June 30, 2006.

While CMS holds the waivers up as a model, some Senators believe the effort is insufficient, and have proposed more wide-ranging legislation. The bipartisan “Emergency Health Care Relief Act” (S. 1716), sponsored by Sen. Charles Grassley (R-IA) and Sen. Max Baucus (D-MT), would ease enrollment in states’ Medicaid programs and guarantee full federal funding for Medicaid for survivors.

3. DIAGNOSIS CODING GUIDANCE RELEASED

A guide for diagnosis coding of healthcare services provided in the hurricane aftermath has been developed by the organizations responsible for the official ICD-9-CM coding guides (the American Hospital Association, American Health Information Management Association, CMS, and National Center for Health Statistics). This guidance is useful for ensuring that healthcare records of survivors are readily identified for emergency reimbursement purposes.

4. JCAHO ISSUES EMERGENCY PLANNING GUIDE

The Joint Commission on Accreditation of Healthcare Organizations (JCAHO) has published a step-by-step guide, “Standing Together: An Emergency Planning Guide for America's Communities,” for small, rural, and suburban communities to both prepare for and successfully respond to major local and regional occurrences. The comprehensive planning guide provides 13 essential steps that local government and public health leaders can use to establish an effective community-based emergency management planning and response process.

5. INPATIENT AND LONG-TERM CARE HOSPITAL PPS CHANGES

Hospital financial managers should note the policy changes brought about by the FY06 inpatient PPS final rule, published in the August 12, 2005, Federal Register, which go into effect October 1, 2005. CMS recently released transmittal number 674 announcing the implementation requirements. Some of the changes covered include: new grouper and DRG changes that are effective October 1, 2005, for inpatient PPS as well as long-term care hospital (LTCH) PPS; new ICD-9 codes and technology add-on payments for 2006; postacute care transfer policy expansion; and guidance on the use of patient status codes.

6. MEDICARE FY06 PREMIUM, DEDUCTIBLE INCREASES ANNOUNCED

The monthly Medicare Part B premium will rise to $88.50 in 2006, an increase of $10.30 from the 2005 rate, CMS announced September 16. CMS attributes the increase primarily to the continued rapid growth in the intensity and utilization of physician and hospital outpatient services, higher payment rates to Medicare Advantage health plans, and the need to restore and stabilize Medicare trust fund reserves.

The Part A deductible will increase by $40 to $952. Beneficiaries will pay $238 per day for days 61 through 90 in 2006 (up from $228 in 2005), and $476 per day for stays beyond the 90th day in the benefit period (up from $456 in 2005). The Medicare Modernization Act requires that the Part B deductible be indexed to the increase in the average cost of Part B services for aged beneficiaries beginning January 1, 2006. In 2006, the Part B deductible will be $124, compared to $110 in 2005. The Part A premium, for those seniors and certain people under age 65 with disabilities who have fewer than 30 quarters of coverage, will be $393 per month, an increase of $18 from 2005.

7. CLASS ACTION STATUS GRANTED IN PATIENT CHARGES LAWSUIT

Plaintiffs in a lawsuit against a Seattle hospital, Virginia Mason Medical Center (VMMC), have been given class action status by the Washington Superior Court. As reported in the BNA Class Action Litigation Report, the court said the claims “arise from Virginia Mason’s alleged practice of charging more for procedures at its downtown outpatient clinic than it charges for the same procedures at its satellite clinics.”

In a statement posted to its web site, VMMC noted the decision is not a ruling on the merits of the case, and that “most of our downtown campus is licensed as a hospital (including the downtown clinic). Therefore, when a patient visits the downtown clinic, they are, in effect, visiting the hospital and are charged a hospital fee for some services.”

8. TEST VERSION OF EHR SOFTWARE AVAILABLE FOR PHYSICIAN OFFICES

On September 19, CMS released an evaluation version of electronic health record (EHR) technology for physicians to assess in their private practices. The software, VistA-Office Electronic Health Record, provides for transactions such as order entry, documentation templates, clinical reminders, patient registration, reporting quality measures, and printing/faxing of medication prescriptions. The evaluation version will be distributed by qualified vendors and evaluated for usability, effectiveness, implementation, and its potential for interoperability.

Participation in the evaluation is not free: there are fees to get the software on computer disk and licensing and support fees for the database program and CPT® codes. Other cost considerations include the office staff cost associated with the implementation of an EHR system and vendor support for installation, configuration, and maintenance, similar to support with any other EHR system.

9. MEDICARE CODING AND BILLING UPDATE

New transmittals recently posted to the CMS web site include changes to appeals of claims decisions; 2006 updates to HCPCS codes; and quarterly updates to the CCI edits and billing for devices under the hospital outpatient prospective payment system.

10. QUICK LINKS

2006 INPATIENT REHAB ANNUAL UPDATE. CMS has published the 2006 update to the inpatient rehabilitation facility PPS pricer, which includes: changes to the case mix groups, changes made within the comorbidity tier codes, the transition from metropolitan statistical areas to core-based statistical areas, the three-year hold harmless policy, and the update to the low-income percentage adjustment.

HIPAA CMP EXTENSION. HHS has extended the expiration date for the interim final rule on civil money penalties (CMPs) for HIPAA violations. The date changed from September 16, 2005, to March 16, 2006, according to a notice published in the September 14, 2005, Federal Register. The extension allows HHS to continue with the development of a more comprehensive enforcement rule.

BIOMEDICAL RESEARCH FUNDING TRENDS. Biomedical research funding increased from $37.1 billion in 1994 to $94.3 billion in 2003, according to a study of research spending published in the September 21 Journal of the American Medical Association.

UPDATED INTEGRITY AGREEMENTS. The OIG has posted an updated list of its corporate integrity agreements (CIAs) and settlement agreements with integrity provisions.

UPDATED OIG EXCLUSIONS. The OIG has posted the full updated list of OIG exclusion and reinstatement actions through August 2005.

11. NEW IN THE HFMA RESOURCE CENTER

FY06 SKILLED NURSING FACILITY PPS FINAL RULE HIGHLIGHTS. Use these highlights as a handy reference to the main provisions of the SNF PPS final rule.

FY06 INPATIENT PPS FINAL RULE -- A READY-TO-USE-POWERPOINT PRESENTATION. Brief your [staff; on the key points of the FY06 inpatient PPS update with HFMA’s ready-to-use presentation (PPT, 36 slides).

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

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