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CCH® Reimbursement Integrated Library
The Reimbursement Integrated Library delivers the key performance indicators for maximizing reimbursement. The Library includes three invaluable titles:

• Dennis Barry's Reimbursement Advisor - This monthly newsletter provides all the facts about reimbursement strategies to minimize the adverse effects of DRGs, RBRVs, APCs and capitation to optimize hospital reimbursement.
• Receivables Report - This monthly newsletter includes actual profit-improvement examples from facilities nationwide, secrets for successfully challenging denials, tips for using automation to increase cash flow, and strategies your colleagues are using now to prepare for health care reform.
• Hospital Accounts Receivable Analysis - This quarterly journal is a synopsis of statistical data related to hospital receivables.

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July 2008, Volume 23, No. 11

Health care providers face ongoing clarifications and revisions to policy, procedures and regulations relating to Medicare reimbursement. As often is the case, the Centers for Medicare and Medicaid Services (CMS) issues clarifications that can be inconsistent, guidance that that runs counter to prior CMS concerns, and revisions to procedures that may not achieve intended results. In the July 2008 issue, authors examine a new and conflicting CMS position on old debts, CMS’ departure from its prior concerns regarding freestanding emergency departments, and the interim steps leading toward changes in Provider Reimbursement Review Board (PRRB) appeal procedures.

• History rewritten: new Medicare bad debt Joint Signature Memorandum; CMS takes new position on old debts. The Centers for Medicare and Medicaid Services issued a Joint Signature Memorandum (JSM) to “clarify longstanding policy concerning reimbursement for a Medicare bad debt while the account is at a collection agency.” The JSM, however, did nothing of the sort and, rather, the JSM presents a position that is inconsistent with CMS prior policy on the issue. The significance of the JSM lies in the new position that CMS is taking regarding the application of the Medicare bad debt moratorium to bad debts claimed on a cost report while patient accounts are at an outside collection agency (OCA). In this article, the authors examine the implications of CMS’ new position on old debts as stated in the JSM in context with prior CMS policy and regulations governing bad debts.

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Fourth Quarter 2007, Volume 22, Number 1

• Gross Days Revenue Outstanding. US hospitals closed 2007 with a slight increase in the gross days revenue outstanding (GDRO) average. The fourth quarter GDRO average was 50.78, up 0.16 days from the third quarter. Nevertheless, the average GDRO continues to fall well within benchmark range, which is to hold the GDRO average to fewer than 60 days. The pages of the HARA Report on Fourth Quarter 2007 hold more details regarding this key indicator.

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The Senate on July 9, 2008, approved legislation to stave off a 10.6 percent reduction in Medicare physician payments that was to take effect on July 1 and to increase physician pay by 1.1 percent in 2009. In addition, the legislation would decrease payments to Medicare Advantage (MA) plans. The 69 to 30 vote on the “Medicare Improvements for Patients and Providers Act of 2008” (MIPAA) (H.R. 6331), a repeat attempt of the Senate to pass the legislation, followed the House passage by vote of 355 to 59. President Bush has indicated he will veto the bill. After the Senate failed to pass the bill before the July 4th break, the Bush administration agreed to delay until July 15 paying physicians at the lower rate while lawmakers recessed. However, the administration made clear that it opposed reductions in MA payments included in the bill, saying they would “fundamentally change the private fee-for-service program and consequently reduce access, benefits, and choices for many of the approximately 2.25 million beneficiaries who have chosen to enroll in private fee-for-service plans, many of whom live in rural areas. ” CCH Washington Bureau, July 9, 2008.

Calendar year (CY) 2009 updates for Medicare Physician Fee Schedule relative value units (RVUs), geographic adjustment factors (GAFs), Geographic Practice Cost Indices (GPCIs), the Multiple Procedure Payment Reduction Code List, and the wage indexes for urban and rural areas for ESRD facilities are included in the proposed Medicare rule on “Revisions to Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2009; and Revisions to the Amendment of the E-Prescribing Exemption for Computer Generated Facsimile Transmissions.” The proposed rule also discusses the e-prescribing exemption that permits the use of computer-generated facsimiles in cases of temporary or transient network transmission failures, RVUs for practice expense and for malpractice expense, and telehealth services. Proposed rule, 73 FR 38502, July 7, 2008, ¶220,589.

Projected payments under the outpatient prospective payment system (OPPS) for calendar year (CY) 2009 are expected to rise to $28.7 billion, and projected payments for services at ambulatory surgery centers (ASC) will be $3.9 billion in CY 2009, according to an advance release of a CMS Proposed rule (see ¶220,590). The increase in the OPPS includes a 3.0 percent annual inflation update for most services. Current law does not allow for an inflation update to the ASC payment rate. Hospitals that failed to report data on seven quality measures in CY 2008 will only receive a one percent inflationary increase for services provided in CY 2009. Four new quality measures will be added for CY 2009, which hospitals must report if they want to receive the full inflation increase in CY 2010. The Proposed rule will be published in a later report following its scheduled publication in the Federal Register on July 18. CMS Releases, July 3, 2008.

A federal appeals court overturned the order of a Tennessee district court directing state officials to allow the plaintiffs' expert to make forensic copies of state officials' computer records in pretrial discovery. The discovery dispute concerned the state officials' obligation to allow access to electronic data in its electronic form rather than by way of printouts. The state officials argued that the district court order was overbroad, burdensome, interfered with the operations of state government, and contained privileged material. The court of appeals agreed. The entry of a U.S. Marshal into state offices or the homes of individuals who had information on their personal computers was inconsistent with “principles of federalism and comity” that require greater respect for the privacy and confidentiality issues implicated. Although the state's willingness to comply with required discovery was questioned, the record did not contain evidence of a real danger that the electronic data would be destroyed. The district court was ordered to remove those provisions from the order. The court of appeals left the means by which the state should comply with the discovery requirements to the district court. John B. v. Goetz, 6th Cir., June 26, 2008, ¶302,450.

Over 27,000 health care providers paid under Medicare during calendar year (CY) 2006 had payroll and other federal tax debts totaling over $2 billion, according to the Government Accountability Office (GAO). The GAO's analysis of data provided by CMS and the Internal Revenue Service (IRS) revealed abusive and potentially criminal activity, including willful failure to remit to the IRS payroll taxes withheld from their employees. The GAO selected 25 Medicare providers with significant tax debt for more in-depth investigation of the nature of extent of abuse and potentially criminal activity, and found that: (1) some providers diverted payroll taxes withheld from employees for other purposes; (2) individuals associated with some of these providers used payroll taxes withheld from employees for personal gain, amassing substantial wealth and assets while failing to pay their federal taxes; and (3) some providers received Medicare payments despite having quality of care issues. The GAO recommended that (1) CMS consider issuing guidance to require Medicare contractors to screen prospective Medicare providers for unpaid taxes and (2) CMS incorporate all Medicare payments into the continuous levy program. GAO Report, No. GAO-08-618, June 13, 2008.

CMS needs to do a better job of collecting information regarding the amount of state Medicaid supplemental payments and the types of providers who receive these payments, according to a report from the Government Accountability Office (GAO). The GAO found that $23 billion in supplemental Medicaid payments were made to Medicaid providers in FY 2006. The majority of these payments, $17.1 billion, was spent on Medicaid disproportionate share hospital (DSH) programs, and $6.3 billion was spent on non-DSH supplemental payments. However, the GAO believes this amount is probably understated because non-DSH payments information was incomplete. The exact amount and distribution of FY 2006 non-DSH payments by states is unknown because states did not report all their payments to CMS. The GAO recommends that CMS: (1) expedite issuance of the Final rule implementing additional DSH reporting requirements and (2) develop a strategy to identify all of the supplemental payment programs established in states' Medicaid plans and review those programs that have not been subject to review under CMS' 2003 initiative. GAO Report, No. GAO-08-614, May 1, 2008.

Medicare Claims Processing Manual, Pub. 100-04, Transmittal No. 1546, July 1, 2008, ¶157,418. Premium content

Medicare Program Integrity Manual, Pub. 100-08, Transmittal No. 262, July 1, 2008, ¶157,419. Premium content

Medicare National Coverage Determinations Manual, Pub. 100-03, Transmittal No. 86, July 3, 2008, ¶157,420. Premium content

Medicare Claims Processing Manual, Pub. 100-04, Transmittal No. 1547, July 3, 2008, ¶157,421. Premium content

Medicare Prescription Drug Benefit Manual, Pub. 100-18, Transmittal No. 1, July 3, 2008, ¶157,422. Premium content

One-Time Notification Manual, Pub. 100-20, Transmittal No. 357, July 7, 2008, ¶157,423. Premium content

The administrative law judge (ALJ) properly found immediate jeopardy deficiencies for the period from July 18 through September 4, 2006, based on the failure of a skilled nursing facility (SNF) to consult with a resident's physician and notify his family of a significant change in his condition as required by 42 C.F.R. §483.10(b)(11). The resident's weight had declined from 135 pounds to 116 pounds over a five-week period during which his intake of food and liquids declined. The SNF's argument that the resident's intake varied so that there was no significant change to report was not persuasive because it failed to record the intake for about 20 percent of the resident's meals during the five weeks and because the resident's intake and weight had been stable for the preceding three months. Even if a discussion between the SNF staff and the resident's physician after a visit satisfied the consultation requirement, the findings were supported by the SNF's failure to notify the resident's family of the physician's statements that the resident was “ in his final decline” and could not take in adequate food or liquids without a feeding tube, which was a significant change. The family's previous refusal to consent to use of a feeding tube did not justify the SNF's failure to inform the family that adequate nutrition and hydration could only be provided with a feeding tube. The ALJ's conclusion that the deficiency continued until the SNF had completed training all staff on the requirements of the regulation was proper because the deficiency was not corrected until the training was complete. However, the civil money penalties and denial of payment for new admissions imposed because of the SNF's failure to notify a physician about another resident's lab results were improper because CMS had not given the SNF any notice that the incident was at issue in its statement of deficiencies. Because the ALJ had not ruled on several other deficiencies, the matter was remanded for further consideration. Claiborne-Hughes Health Center v. CMS, HHS Departmental Appeals Board, Appellate Division, Doc. No. A-08-45, Dec. No. 2179, June 6, 2008, ¶121,387. Premium content

The evidence supported the findings of the administrative law judge (ALJ) that a skilled nursing facility's (SNF) care of a diabetic patient violated the requirements to notify a resident's physician immediately of any significant change in condition and to adhere to professional standards of quality of care. CMS' determination that the violations posed immediate jeopardy to diabetic patients was not clearly erroneous. The resident's hospital discharge summary stated that he was diabetic, had episodes of hypoglycemia and required frequent “ finger stick checks” of his blood sugar. The SNF's records showed that: (1) staff failed to test the resident's blood sugar until the late morning of his second day there; (2) there was no physician's order for the finger stick checks, although other records required them at four specified times per day; (3) after examining the resident, the physician, who was the medical director of the SNF, entered no notes concerning the diabetes or the episode of hypoglycemia earlier in the day; (4) the SNF had no orange juice or apple juice available to give to the resident during a hypoglycemic episode, as required by its protocols; (5) the staff failed to follow its own protocols requiring retesting and immediate notification of a physician when a resident's blood glucose level remained below 70 after treatment. When the resident first exhibited slurred speech, shaking, gagging while eating, inability to drink water or take medication three days after admission, there was a significant change in his condition that required immediate notification of the physician under both 42 C.F.R. §483.10(b)(11)and the SNF's protocols. The SNF's protocols constitute evidence of the standard of care; failure to follow its own protocols is evidence of violation of professional standards. The Laurels at Forest Glen v. CMS, HHS Departmental Appeals Board, Appellate Division, Doc. No. A-08–39, Dec. No. 2182, June 23, 2008, ¶121,389. Premium content

Per-instance civil money penalties (CMPs) ranging from $1,250 to $2,500 were properly imposed against a skilled nursing facility (SNF) for violations of three Medicare conditions of participation requirements: 42 C.F.R. §§483.25(c), 483.25(i)(1), and 483.25(j). Accordingly, the administrative law judge's (ALJ) conclusion that there was no basis for CMS to revoke the SNF's nurse aid training and competency evaluation program (NATCEP) was stricken. Soc. Sec. Act §1819(f)(2)(B)(iii)(I)(c) prohibits a state from approving a long-term care facility's NATCEP if, within the previous two years, the facility had “been assessed a civil money penalty…of not less than $5,000.” All but two of the ALJ's findings were reversed because of errors of law or lack of substantial evidence. The SNF was not in substantial compliance with one or more participation requirements because it failed to provide proper care and hydration for a resident suffering from dehydration; failed to prevent and to treat another resident's pressure sores; and, failed to prevent excessive weight loss and to provide adequate nutrition for one other patient. Bradford County Manor, HHS Departmental Appeals Board, Appellate Division, Doc. No. A-08-37, Dec. No. 2181, June 23, 2008, ¶121,388. Premium content