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Monday, December 7, 2009

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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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Reimbursement Integrated Library

Reimbursement Advisor

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

Receivables Report

November 2009, Volume 24, No. 11
  • Ready for RACs? RAC investigations are affecting any provider that treats Medicare patients. Many providers have already been through the audits, and those who have not are probably getting ready. To prepare, providers can look at where the auditors have found previous improper payments by checking Get more tips concerning this hot topic inside the November 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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    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

    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.


    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:

    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
    for instructions on how to listen via telephone or Web see

    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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