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HEADLINES
What's New in Medicare and Medicaid
Answers Now
Monday, December 7, 2009
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Decisions and Developments
CCH® Reimbursement Integrated Library
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- 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.
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Reimbursement Integrated Library
Dennis Barry’s Reimbursement Advisor
December 2009, vol. 25, no. 4
In the December 2009 issue of Dennis Barry’s Reimbursement Advisor, authors examine the transition to the new procedure coding system of the International Classification of Disease, 10th Revision, (ICD-10). In addition, authors examine a recent US district court decision that has implications on whether a hospital’s claim of unrecoverable bad debt can be refused by the Centers for Medicare and Medicaid Services.
- ICD-10 preparation: triumph or tragedy.
In early 2009, the Centers for Medicare and Medicaid Services (CMS) announced that health care providers would be required to use the new procedure coding system of the International Classification of Disease, 10th Revision, (ICD-10) in reporting services provided on or after October 1, 2013. At first glance, a roughly four-year timeframe to implement ICD-10 might appear to be ample for health care providers to prepare. In actuality, the schedule is quite tight due to the reliance that the entire health care industry today has on the International Classification of Diseases, 9th Revision, Clinical Modification (ICD-9-CM). In this article, the author offers an in-depth look at the new ICD-10 coding system and how the transition to ICD-10 will impact providers and payers and how it will affect entire infrastructures and operations at significant costs to most all organizations.
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Receivables Report
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Hospital Accounts Receivable Analysis
2nd Quarter 2009,
vol. 23, no. 3
- More Hospitals Wait to Make Collection Calls
The murky economy has made hospitals’ collections tactics difficult. While they want to escalate their collection efforts, many hospitals find that because employees are facing layoffs or other problems, they have to make more efforts to accommodate payment plans and other arrangements. That could explain why more hospitals are making collection demands later in the process, as revealed by their answers to the HARA survey. Only 26.10 percent of hospitals are making collection calls within 30 days of discharge, down from 45 percent last year. You can get all the information in the most recent issue of HARA.
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Headlines
from Medicare and Medicaid Guide
CBO report highlights Senate reform changes
The direct spending and revenue effects of enacting the Patient
Protection and Affordable Care Act as proposed in the Senate would
yield a net reduction in federal deficits of $130 billion from 2010
to 2019, according to the Congressional Budget Office (CBO).
The legislation would cost $599 billion over 10 years for the
proposed expansions in insurance coverage: $848 billion in subsidies
to help individuals purchase insurance through the new insurance exchanges,
increased net outlays for Medicaid and the Children’s Health
Insurance Program (CHIP), and tax credits for small employers; offset
in part by $149 billion in revenues from the excise tax on high-premium
insurance plans and $100 billion in net savings from other sources.
Medicare and Medicaid changes
Starting in 2014, most nonelderly people with income below 133
percent of the federal poverty level would be made eligible for Medicaid.
The federal government would pay all of the costs of covering newly
eligible enrollees through 2016; in subsequent years, the share of
federal spending would vary somewhat from year to year but ultimately
would average about 90 percent.
Reimbursement changes in the Medicare and Medicaid programs
would reduce spending in those programs by $491 billion over 10 years.
Permanent reductions in the annual updates to Medicare’s payment
rates for most services in the fee-for-service sector would save $192
billion. Setting payment rates in the Medicare Advantage program on
the basis of the average of the bids submitted by Medicare Advantage
plans in each market would save $118 billion. Reducing Medicaid and
Medicare payments to hospitals that serve a large number of low-income
patients, known as disproportionate share (DSH) hospitals, would save
$43 billion.
CBO Report, Nov. 18, 2009, ¶53,210.
Deeming authority for hospital accreditation
The Joint Commission's approval as a national accreditation
program for hospitals that request participation in the Medicare and
Medicaid programs has been extended until July 15, 2014, and the American
Association for Accreditation of Ambulatory Surgery Facilities' (AAAASF)
application for extension of its deeming authority for ambulatory
surgical centers (ASCs) has been conditionally approved until May
26, 2010. Both organization made numerous changes to their survey
and reporting procedures in order to receive continued deeming authority.
The Joint Commission's statutorily-guaranteed deeming authority
for hospitals was revoked by section 125 of the Medicare Improvements
for Patients and Providers Act of 2008 (MIPPA)(PubLNo 110-275). Effective
July 15, 2010, the Secretary has the authority to recognizes the Joint
Commission as a national accreditation body for hospitals based on
the terms and conditions, and upon submission of such information,
as the Secretary may require. After review of the Joint Commission
submission in which it revised several of its elements of performance
(EPs) and survey reports to meet the Medicare conditions of participation,
its deeming authority was extended.
Review of AAAASF's renewal application revealed that AAAASF
has ongoing, serious, widespread areas of non-compliance, specifically
(1) an inability to provide accurate and timely data on deemed providers;
(2) lack of complete and accurate deemed facility survey files; and
(3) an inadequate surveyor training and evaluation program. If it
is determined that an accreditation organization has failed to adopt
requirements comparable to Medicare conditions of participation, a
conditional approval of the accreditation organization's deeming authority
for a period of up to 1 year may be granted. During that time the
organization may make changes to its surveys and policies so that
they are comparable to Medicare requirements. AAAASF has been put
on a 180 day probationary period. Within 60 days after the end of
AAAASF's probationary period, a final determination will be made as
to whether or not AAAASF's ASC accreditation requirements are acceptable.
Generally, to enter into an agreement to be a Medicare provider,
an entity must first be certified by a state survey agency as complying
with Medicare conditions or requirements. Then, the organization
is subject to regular surveys by a state survey agency to determine
whether it continues to meet those requirements. There is an alternative,
however, to surveys by state agencies. If an accreditation organization
is recognized by the Secretary as having standards for accreditation
that meet or exceed Medicare requirements, a provider entity accredited
by the national accrediting body's approved program may be deemed
to meet the Medicare conditions of participation. A national accreditation
organization applying for approval of deeming authority, must provide
reasonable assurances that the accreditation organization requires
the provider entities to meet requirements that are at least as stringent
as the Medicare conditions.
Notice, 74 FR 62332,
Nov. 27, 2009; ¶262,547;
and Notice, 74 FR 62330, Nov. 27, 2009; ¶262,548.
Iowa first to receive EHR funds
CMS recently announced that Iowa’s Medicaid program is
the first to receive federal matching funds for planning activities
necessary to implement the electronic health record (EHR) incentive
program established by the American Recover and Reinvestment Act of
2009 (ARRA) (PubLNo 111-5). Iowa will receive approximately $1.16 million in federal
matching funds.
Under ARRA, a 90 percent federal match is provided for state
planning activities to: administer the incentive payments to Medicaid
providers, ensure their proper payments through audits, and participate
in efforts to promote the use of EHR technology. EHRs assist many
providers who treat Medicaid patients with coordinating care, and
additionally assist patients with accessing the information they need
to make decisions about their health care.
Cindy Mann, director of the Center for Medicaid and State Operations
at CMS, said, while Iowa is the first state to receive approval of
its plan for implementing the ARRA's EHR incentive program, a number
of other states have submitted plans as well. Meaningful and interoperable
use of EHRs in Medicaid will increase health care efficiency, reduce
medical errors and improve quality-outcomes and patient satisfaction
within and across the states.
Planning activities
Iowa's Medicaid program will use the federal funds for various
planning activities, such as a comprehensive analysis to determine
the state's current status of health information technology (HIT)
activities. Toward that end, Iowa will gather information on issues
such as existing barriers to Iowa's use of EHRs, provider eligibility
for EHR incentive payments, and the creation of a State Medicaid HIT
Plan.
Iowa will also use the federal funds towards assessing expectations
of its incentive payment recipients and their need for personal health
records (PHRs). PHRs are confidential, electronic records that are
used to manage an individual’s health services information.
The difference between PHRs and EHRs is that PHRs are managed by the
consumer, while EHRs are maintained by health care providers and relate
to the patient and the care provided.
CCH Chicago Bureau,
Nov. 24, 2009.
$80 million in grants to support health IT training
announced
The National Coordinator for Health Information Technology,
Dr. David Blumenthal, announced plans to make available $80 million
in grants to help develop and strengthen the health information technology
(IT) workforce. Grants totalling $70 million will be made available
to community colleges for health IT training programs and $10 million
will be used to develop educational materials to support these programs.
These programs will be used to support the need for skilled health
IT professionals who will facilitate the adoption and use of health
IT nationwide.
Program objectives
The health IT grants were authorized by the American Recovery
and Reinvestment Act (ARRA) (PubLNo. 111-5), to help strengthen
and support the health IT workforce. Additional details of the grant
programs will be announced in the coming weeks. Community colleges
programs will establish extensive non-degree training programs that
can be completed in six months or less by individuals with some background
in either health care or IT. Colleges that participate in this program
will coordinate efforts through five regional consortia that will
cover the entire country.
The trained graduates will be available during the critical
process of deploying IT systems and they will support the process
on an ongoing basis. Any United States nonprofit institution of higher
learning that currently provides training in health IT and that is
interested in drafting curriculum or establishing a consortium that
includes community colleges may apply for the grants. Information
regarding grant applications, workforce plans, and other grant programs
authorized by the Health Information Technology for Economic and Clinical
Health (HITECH) Act will be available at http://HealthIT.HHS.gov/HITECHgrants.
Dr. Blumenthal explained the reasoning behind these grants in
this way: “Ensuring the adoption of electronic health records
(EHRs) information exchange among health care providers and public
health authorities, and redesigning workflows within health care settings
all depends on having a qualified pool of workers.” “The
expansion of a highly skilled workforce developed through these programs
will help health care providers and hospitals implement and maintain
EHRs and use them to strengthen the delivery of care,” he said.
Critical to achieving the goal of the HITECH Act and supporting
meaningful use of health IT, according the Dr. Blumenthal, is the
availability of a skilled workforce that understands the unique technology
and management needs within a clinical setting. “These newly
funded programs are designed to equip the most qualified and advanced
IT workforce in the world with the tools they need to modernize our
health care systems,” he said.
HHS Press Release,
Nov. 24, 2009.
Decisions and Developments
CMS Manuals
Implementation of changes in end stage renal
disease payment for 2010
Medicare Benefit
Policy Manual, Pub. 100-02, Transmittal No. 113, Oct. 30,
2009, ¶158,548.
Changes to payments for anesthetic services
implemented by the 2010 Physician Fee Schedule
Medicare
Claims Processing Manual, Pub. 100-04, Transmittal No. 1859,
Nov. 20, 2009, ¶158,551.
Hospice reporting requirements for attending
physicians and physicians certifying terminal illnesses
Medicare
Claims Processing Manual, Pub. 100-04, Transmittal No. 1863,
Nov. 27, 2009, ¶158,560.
Clarification of instructions for deactivation
of Medicare billing privileges
Medicare Program
Integrity Manual, Pub. 100-08, Transmittal No. 314, Nov.
27, 2009, ¶158,561.
Home health agency capitalization requirements
Medicare Program Integrity Manual, Pub. 100-08,
Transmittal No. 312, Nov. 20, 2009, ¶158,552.
Program Integrity Manual reorganization to
chapters 1, 2, and 7
Medicare Program Integrity
Manual, Pub. 100-08, Transmittal No. 313, Nov. 20, 2009, ¶158,553.
Instructions on Medicare secondary payer claims
when negative CARC amounts are received in the CAS for certain MSP
claims
One-Time Notification Manual,
Pub. 100-20, Transmittal No. 598, Nov. 23, 2009, ¶158,557.
Medicare administrative contractor certification
test package development for HIPPA 5010 changes
One-Time
Notification Manual, Pub. 100-20, Transmittal No. 602, Nov.
27, 2009, ¶158,562.
Re-write of integrated outpatient code editor
to the Java Programming Language
One-Time
Notification Manual, Pub. 100-20, Transmittal No. 599, Nov.
20, 2009, ¶158,554.
Elimination of national standard format code
from VMS system
One-Time Notification Manual,
Pub. 100-20, Transmittal No. 600, Nov. 20, 2009, ¶158,555.
Remittance advice and codes for oxygen equipment,
replacements, repairs and accessories
One-Time
Notification Manual, Pub. 100-20, Transmittal No. 603, Nov.
27, 2009, ¶158,563.
Updates to Health Insurance Portability and
Accountability Act spreadsheets for Parts A and B
One-Time
Notification Manual, Pub. 100-20, Transmittal No. 605, Nov.
27, 2009, ¶158,565.
List of new waived tests approved by the Food
and Drug Administration under Clinical Laboratory Improvement Amendments
of 1988
Medicare Claims Processing Manual,
Pub. 100-04, Transmittal No. 1857, Nov. 20, 2009, ¶158,549.
January 1, 2010 quarterly update to correct
coding initiative
Medicare Claims Processing
Manual, Pub. 100-04, Transmittal No. 1858, Nov. 20, 2009, ¶158,550.
Clarification of payment policy for implantable
tissue markers
One-Time Notification Manual,
Pub. 100-20, Transmittal No. 604, Nov. 27, 2009, ¶158,564.
Technical correction to earlier transmittal
updating the calendar year 2010 caps for therapy services
Medicare Claims Processing Manual, Pub. 100-04,
Transmittal No. 1860, Nov. 23, 2009, ¶158,556.
Zero percent update to the calendar year 2010
ambulance inflation factor
Medicare Claims
Processing Manual, Pub. 100-04, Transmittal No. 1861, Nov.
27, 2009, ¶158,558.
Addition, modification and deactivation of
codes for claim adjustment reason code, remittance advice remark advice
codes, and Medicare remit easy print codes
Medicare
Claims Processing Manual, Pub. 100-04, Transmittal No. 1862,
Nov. 27, 2009, ¶158,559.
Medicaid: Federal News
FY 2011 FMAP
The federal medical
assistance percentage (FMAP) and enhanced FMAP have been assigned
to each jurisdiction participating in Medicaid for federal fiscal
year 2011. The calculated percentages will be used in determining
the amount of federal matching funds for state expenditures for HHS
programs, including Medicaid, the Children's Health Insurance Program
(CHIP), Temporary Assistance for Needy Families (TANF), Child Support
Enforcement collections, adoption assistance, and foster care.
Notice,
74 FR 62315, Nov. 27, 2009, ¶262,545.
Personal assistance benefit limitation
The extent of the discretion that Medicaid beneficiaries and
state agencies may exercise in the use of Medicaid funds to purchase
goods has been clarified. Medicaid beneficiaries who receive a cash
benefit to direct their own personal assistance services may set aside
money to save for the purchase of certain goods or home improvements
that will increase their independence or substitute for covered human
assistance. Medicaid agencies may approve purchase of items or services
that decrease the need for other Medicaid services, foster the individual's
inclusion and participation in the community, or increase safety of
the home environment. The item or service also must: (1) address a
need identified in the agency-approved plan of care; (2) be unavailable
from any other source, including other funds available to the recipient;
(3) be affordable under the budget without compromising the beneficiary's
safety; and (4) be for the benefit of or directed toward the recipient.
The beneficiary's budget may not be used for experimental or prohibited
services, recreational or social purchases not specifically addressed
in the care plan, housing, or items or services that are covered by
third parties or are the responsibility of another program. State
agencies must provide beneficiaries with assistance and training in
the use of their budgets and the criteria for permissible purchases;
they may use appropriately trained brokers or consultants to do so.
CMS
Letter to State Medicaid Directors, No. SMDL 09-007, Nov.
19, 2009, ¶53,211.
Delay of regulations
The effective
date of the Final rule setting requirements for Medicaid
state plans offering benchmark and benchmark-equivalent benefit packages
(see ¶180,843)
is further delayed until July 1, 2010, to allow further consideration
of the effects of the amendments made by the Children's Health Insurance
Program Reauthorization Act (CHIPRA) (PubLNo 111-3). The effective date of
the Final rule providing for new flexibility to require
recipients to pay premiums or other cost sharing (see ¶180,842)
also has been delayed until July 1, 2010, to allow CMS to consider
the effects of the amendments made by the American Recovery and Reinvestment
Act (ARRA) (PubLNo
111-5).
Final rule, 74 FR 62501, Nov. 30,
2009, ¶180,985.
Coverage of rehabilitative services
The Proposed rule published August 13, 2007,
(see ¶220,553)
that would have limited Medicaid coverage of rehabilitative services
has been withdrawn. Moratoria imposed by Congress (see ¶51,945and ¶52,273)
prohibited CMS from publishing a final rule or implementing the proposed
policies until April 1, 2009. The American Recovery and Reinvestment
Act (ARRA) (PubLNo
111-5) expressed the “sense of Congress” opposing
implementation of the Proposed rule.
Proposed
rule, 74 FR 61096, Nov. 23, 2009, ¶220,757.
Medicare
MEDCAC meeting
The Medicare
Evidence Development and Coverage Advisory Committee (MEDCAC) will
hold a public meeting to discuss whether there is sufficient available
evidence to determine whether the results of pharmacogenomic testing
affect health outcomes of patients with cancer when used as a guide
for certain drug treatments. The meeting will take place on Wednesday,
January 27, 2010, from 7:30 a.m. until 4:30 p.m. eastern standard
time, at CMS' main auditorium at 7500 Security Boulevard, Baltimore,
MD. Requests to speak and written submissions must be submitted by
December 28, 2009. Requests for special accommodations must be made
by January 8, 2010, and others wishing to attend must register by
January 20, 2010.
Notice, 74 FR 62580, Nov. 30, 2009.
Health information technology
The
public advisory committee on health information technology for the
Office of the National Coordinator for Health Information Technology
(ONC) will meet on December 15, 2009, from 9 a.m. to 5 p.m., Eastern
Time (ET) and will be open to the public. The committee will hear
reports from its workgroups, including the Meaningful Use Workgroup
and the Nationwide Health Information Network (NHIN) Workgroup. ONC
intends to make background material available to the public no later
than two business days prior to the meeting. If ONC is unable to post
the background material on its Web site prior to the meeting, it will
be made publicly available at the location of the advisory committee
meeting, and the background material will be posed on ONC's Web site
after the meeting.
The HIT Standards Committee will host a dial-in meeting on December
18, 2009, via telephone conference call, from 9 a.m. to 2 p.m., ET.
Interested persons may present data, information, or views, orally
or in writing, on issues pending before the committee. Written submissions
may be made to the contact person on or before December 10, 2009.
Members of the public should call 1-877-705-6006; confirmation code “HIT
Standards Committee meeting.” To listen via computer, no sooner
than 10 minutes prior to the meeting, please go to: https://admin.na3.acrobat.com/_a758956138/HITstandards.
The HIT Policy Committee's Nationwide Health Information Network
(NHIN) Workgroup will meet on December 16, 2009, from 10 a.m. to 5
p.m., ET, at the OMNI Shoreham Hotel, 2500 Calvert Street, NW, Washington,
DC. The committee will be discussing the nationwide health information
network (NHIN), and will be hearing testimony from stakeholder groups.
The meeting will be available via Webcast; visit http://healthit.hhs.gov/portal/server.pt for
instructions on how to listen via telephone or Web see http://healthit.hhs.gov/portal/server.pt.
Notice
of meeting, 74 FR 62572, Nov. 30, 2009; Notice of
meeting, 74 FR 62571, Nov. 30, 2009; and Notice of
meeting, 74 FR 62572, Nov. 30, 2009.
Office for coordination of HIT
The
Office of the National Coordinator for Health Information Technology
(HIT) has reorganized its substructure components in order to more
effectively meet the mission outlined by the Health Information
Technology for Economic and Clinical Health (HITECH) Act, part of
the American Recovery and Reinvestment Act of 2009 (ARRA) (PubLNo
111-5). The reorganization affects all four of the original Director-level
offices: the Office of Health Information Technology Adoption (OHITA);
the Office of Interoperability and Standards (OIS); Office of Programs
and Coordination (OPC); and the Office of Policy and Research (OPR).
The new organizational structure is composed of five offices with
direct reporting capability to the National Coordinator for Health
Information Technology (National Coordinator): the Office of Economic
Modeling and Analysis; the Office of the Chief Scientist; the Office
of the Deputy National Coordinator for Programs & Policy; the
Office of the Deputy National Coordinator for Operations, and the
Office of the Chief Privacy Officer.
Notice, 74
FR 62785, Dec. 1, 2009, ¶262,551.
Town hall meeting
A town hall
meeting will be held to discuss fiscal year (FY) 2011 applications
for add-on payments for new medical services and technologies under
the hospital inpatient prospective payment system (IPPS) on February
10, 2010. In addition, an informational workshop for all interested
parties on the application process and criteria for new medical services
and technologies under the IPPS and on the outpatient prospective
payment system (OPPS) transitional pass-through payment for drugs,
biologicals, and devices and new technology Ambulatory Payment Classification
(APC) assignment for new services application processes will be held
before the town hall meeting on the same day. The majority of the
town hall meeting will be reserved for presentations of comments,
recommendations, and data from registered presenters. Presenters must
register before February 2, 2010. The Informational Workshop is open
to all interested parties including organizations representing hospitals,
physicians, and manufacturers. All interested parties are encouraged
to attend, especially those who are not familiar with these processes.
Participants must register by February 2, 2010 as well. The meetings
will be held at the CMS main auditorium in Baltimore, Maryland.
Notice,
74 FR 62339, 2009.
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