HFMA Express News - September 30, 2005

IN THIS WEEK'S ISSUE:

1. CMS Proposes Standards for Electronic Claims
2. New Codes for Disaster-Related Claims Announced
3. IRF Caseload Plummets in Wake of 75 Percent Rule
4. SNF Help File Discontinued
5. Healthcare Supply Expense Defined
6. IRS to Hold Forums On 990 Electronic Filing
7. Medical Innovations Will Increase Healthcare Spending for Elderly
8. Quick Links

1. CMS PROPOSES STANDARDS FOR ELECTRONIC CLAIMS

CMS has published in the September 23, 2005, Federal Register a proposed rule adopting a set of standards for electronic health claim attachments. The rule, mandated by HIPAA, adopts two new X12N transaction standards to be used: a Health Level 7 (HL7) messaging standard to carry clinical information in the response transaction and HL7 specifications for the content or questions that may be asked in each of the six attachment types. The attachment types covered by the proposed rule include: laboratory results, emergency departments services, ambulance services, clinical reports, medications, and nine rehabilitation specialties.

The proposed rule also adopts the Logical Observation Identifiers Names and Codes LOINC® as a new HIPAA code set to be used to identify the questions and answers. The standards allow for the transmission of coded data, as well as images and text. Comments will be accepted until November 23, 2005.

2. NEW CODES FOR DISASTER-RELATED CLAIMS ANNOUNCED

CMS has established a new modifier CR (Catastrophe/Disaster-Related) and condition code DR (Disaster Relief) for providers to use on disaster-related claims. The new modifier and condition codes can be used by a provider submitting claims for a beneficiary who is a disaster patient in any part of the country.

Providers billing their local carriers or DMERCs should only report modifier CR and not the condition code. For institutional billing, either the modifier or the condition code may be reported. According to CMS, the condition code would identify claims that are impacted by specific payer policies related to a national or regional disaster, while the modifier would indicate specific Part B services that may be impacted by policy related to the disaster.

3. IRF CASELOAD PLUMMETS IN WAKE OF 75 PERCENT RULE

Inpatient rehabilitation facilities (IRFs) have seen their annualized caseload growth rate go from 4 percent over 2002 and 2003, to a negative 15.3 percent (for the first two quarters of 2005, annualized), according to a study commissioned by the Federation of American Hospitals and the American Hospital Association. The study found a correlation between CMS's implementation of the "75 percent rule" and data that showed the downward trend following notice of the phase-in of the final rule. The study estimated that in the first year following implementation of the rule, 30,000 fewer Medicare patients received care in IRFs; the projected total number of affected patients in program year 2005 is "likely closer to 40,000 patients." The CMS impact estimate was a caseload change of 1,170 fewer patients.

4. SNF HELP FILE DISCONTINUED

Due to the availability of more current and accurate information on skilled nursing facility (SNF) consolidated billing (CB) for services billed to fiscal intermediaries, CMS has decided to discontinue the SNF help file, according to transmittal 685. The SNF help file is not current and should no longer be used as a guide for determining whether services are included or excluded from SNF CB.

For this information, fiscal intermediaries and providers are instructed to access the latest SNF CB annual update. CMS has redesigned the SNF annual update file, which is available in Excel and PDF formats. This redesign allows providers to easily search a specific HCPCS code to determine if it is excluded from SNF CB. CMS also notes that a provider education article related to the transmittal will be available on the Medlearn Matters area of its web site.

5. HEALTHCARE SUPPLY EXPENSE DEFINED

The Association for Healthcare Resource & Materials Management (AHRMM), with the support of HFMA, recently developed a definition for supply expense in healthcare organizations and a list of items that should be included in healthcare supply expense reporting.

Healthcare institutions are encouraged to use these tools to ensure accurate comparisons to similar organizations and track trends in supply expense. The effort lays the groundwork for a national supply expense benchmarking study, which will require the active participation of all AHRMM members, and assistance from HFMA members and the industry at large.

6. IRS TO HOLD FORUMS ON 990 ELECTRONIC FILING

The IRS will host a meeting and telephone forum on October 5, from 1 p.m. to 3 p.m. ET, to discuss the new temporary regulations regarding e-file requirements for Form 990. The event is specifically for organizations that will be required to electronically file their Forms 990 in 2006-that is, tax-exempt organizations that file at least 250 returns (including income tax, excise tax, employment tax, and information returns) and whose total assets are $100 million or more. A second phone forum, tentatively scheduled for November 1, will be a more general discussion about electronic filing for tax-exempt organizations.

7. MEDICAL INNOVATIONS WILL INCREASE HEALTHCARE SPENDING FOR ELDERLY

Although new advances in medical technology will improve the health and increase the lifespan of the elderly, the costs associated with these innovations are expected to drive up Medicare spending dramatically, according to a Health Affairs article released this week.

Using a demographic and economic simulation model, researchers examined how changes in medical technology, disease, and disability would affect the future of healthcare spending for the elderly over the next 30 years. The authors found that the increased use of technologies, such as implantable cardioverter defibrillators, to treat elderly patients with new cases of heart failure or heart attack would result in total treatment costs of $27 billion in 2030. Also, the use of biomedical advances, such as anti-aging compounds, would also increase healthcare spending by 14 percent.

8. QUICK LINKS

VA REASONABLE CHARGE UPDATES. The Department of Veterans Affairs (VA) has published the FY06 updates to reasonable charge amounts for acute inpatient and skilled nursing facility medical services provided to veterans, effective October 1.

MEDICAID DSH RULE CORRECTION. CMS has issued a correction to the August 26 proposed rule on Medicaid disproportionate share hospital payments to insert a sample Excel spreadsheet that displays the reporting requirements states would have to meet.

HHS COMMUNITY SUPPORT SYSTEMS GRANTS. HHS has released $28.5 million in grants to 17 states with support programs that help people with disabilities or long-term illnesses live in their homes and participate in their communities.

OIG AUDIT REPORT ON OUTLIER PAYMENTS. The OIG has issued a report on whether the 2003 revisions to the outlier payment regulation were effective in reducing operating payments to specific hospitals, and if those payments complied with Medicare regulations.

AUGUST CONSUMER PRICES. The Consumer Price Index for hospitals declined 0.4 percent in August, the first decline in a year, the Bureau of Labor Statistics reports. Consumer prices for physician services showed no change, after increasing 0.1 percent in June and July.

OIG REPORT ON MEDICAID INFLATED DRUG PRICES. If Medicaid based federal upper limit amounts on 150 percent of the average manufacturer prices (AMP) rather than on 150 percent of the lowest published price, the program may have saved approximately $75 million in the first two quarters of 2004, the OIG reports. In the first half of 2004, 58 qualified drug products were not added to the federal upper limit list due to inflated published prices.

NUMBER OF BUSINESSES OFFERING HEALTH COVERAGE SHRINKING. Fewer businesses offered health insurance to their workers over the last five years as the cost of coverage continued to outpace inflation and workers' earnings, according to the 2005 Employers Health Benefits Survey, conducted by the Kaiser Family Foundation and the Health Research and Educational Trust.

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