Reimbursement Integrated Library

Dennis Barry’s Reimbursement Advisor

Each month, Dennis Barry’s Reimbursement Advisor includes two or three articles the offer practicalanalysis on specific aspects of healthcare provider reimbursement. Thenewsletter is particularly helpful in explaining some of the more complex areasof Medicare reimbursement and regulation. A good example of this is the leadstory in the July 2008 issue on Medicare bad debt. The article explains how arecent CMS memo sent to Medicare contractors, explaining CMS policy relating tobad debt, contradicts years of CMS interpretation of bad debt rules.

The newsletter has been available in print for years and, for thelast couple of years, as part of the “Reimbursement Integrated Library” on theCCH Internet Research Network. In its online version, all the references tolaws, regulations, case law, administrative decisions, and related officialtexts are linked to the full text within the CCH Medicare and Medicaid Guide. So, subscribers get analysis aswell as the official documentation to support the analysis, in one newsletter.

The other parts of the “Reimbursement Integrated Library” includethe monthly Receivables Report newsletterand the quarterly Hospital AccountsReceivable Analysis journal. All three are grouped together under the“Newsletters/Journals” heading on the CCH Internet Research Network. Thislibrary also includes a topical index which helps customers easily findarticles on related topics going back to 2003.

CCH Medicare and Medicaid GuideSignificant proposed rulesThis month, CMS will be publishing two significant proposed rules,one relating to the physician fee schedule and the other to the outpatienthospital prospective payment system. Both of these rules will be publishedelectronically on the IRN and sent out as pamphlets to subscribers.

New legislation?Under current Medicare regulations, physicians faced a 10.1percent cut in Medicare reimbursement starting July 1. Before Congress recessedfor its two week Fourth of July vacation, it failed to pass legislation thatwould delay this payment reduction and possibly increase payments to physiciansover the next 18 months. CMS effectively delayed the physician payment cuts bysuspending the processing of any physician Medicare claims until July 15th.

Congress is expected to act again on legislation when it returnsfrom its vacation. As we mentioned last month, if legislation is passed byCongress and signed by the president, we will send out a pamphlet with the textof the legislation along with a summary. We also will quickly update the partsof the Social Security Law that we publish related to Medicare and Medicaidthat are changed by any legislation.

Other NewsMedPAC recommendssignificant payment system reforms. A new payment design for bundling Medicare paymentsto cover all services, including hospital and physician services, during anepisode of care is being proposed by the Medicare Payment Advisory Commission(MedPAC) in its June 2008 report to Congress. Other major changes include: (1)adding an outlier payment to the skilled nursing facilities (SNFs) prospectivepayment system (PPS), as well as other significant changes to the SNF PPS; (2)changes to the physician payment system to encourage the delivery of primarycare; and (3) the development of a "medical home" demonstrationproject. Reforming the Delivery System,MedPAC Report to Congress, June 1, 2008, ¶52,269.

Settlement would accelerate Part D auto-enrollment. The Department of Health and HumanServices has agreed to a proposed class-action lawsuit settlement that willaccelerate the Part D process of auto-enrolling full benefit dual eligibles andfor deeming them eligible for the low-income subsidy (LIS). The class actionwas filed in the U.S. District Court for the Northern District of California onbehalf of low-income seniors and disabled persons who reported difficulty inobtaining prescription drugs under the Medicare Part D program. The action wassupported by a Government Accountability Office study, which found thatauto-enrollment takes a minimum of five weeks and thereby creates gaps in drugcoverage for these at risk individuals. Situ v. Leavitt, Civ. A. No. C0602841, Proposed Settlement Agreement, N. Cal., June 19, 2008, ¶52,264.

CMS’ competitive bidding program free from judicial review. A complaint by a mail-order diabeticssupplier against HHS and CMS for requiring competitive bidding to provideMedicare mail-order diabetic supplies was dismissed for lack of subject matterjurisdiction. The supplier alleged that these supplies were singled out forinclusion in the competitive bidding program without statutory authority ornotice-and-comment rulemaking. The language of Soc. Sec. Act §1847 shows thatCongress wanted a "detailed, scheduled deployment of the competitivebidding program and imbued the Secretary with the authority –free fromjudicial review –to economize by accelerating the introduction ofcost-effective items and services." CarolinaMedical Sales, Inc. v. Leavitt, D. D.C., June 19, 2008, ¶302,448.

OIG: $2.2 billion inrecoveries for health programs. The Office of the Inspector General (OIG)reported it conducted audits and investigations resulting in anticipatedrecoveries of $2.2 billion; exclusions of 1,291 individuals and entities forfraud and abuse involving federal health care programs; 293 criminalprosecutions for crimes against HHS programs, and 142 civil actions includingFalse Claims Act cases, unjust enrichment suits, civil money penalties law(CMPL) settlements, and administrative recoveries related to provider selfdisclosure matters during the time period from October 1, 2007 to March 31,2008. Also, long standing issues under review included Medicaid paymentintegrity; appropriateness of Medicaid and State Children’s Health Insurance(SCHIP) payments; as well as recent focus on oversight of Medicare Part D;public health emergency preparedness and response; oversight of food, drug andmedical device safety; integrity of information technology and systems; andethics program oversight and enforcement. OIGReport, June 12, 2008.

CMS to rate nursing home quality on "five-star" system. CMS will launch a new"star" rating system to help patients and their families make aninformed assessment of the care provided at nursing homes. The ratings will beposted on CMS’ Nursing Home Compare website by the end of the year. This"five star" rating system is similar to one launched last year thatrates health and prescription drug plans available to Medicare beneficiaries.It is estimated that approximately three million Americans will us the servicesprovided by a nursing home sometime during the year. Kerry Weems, CMS actingadministrator said, "The new `five-star’ rating system will provide acomposite view of quality and safety information currently on the Nursing HomeCompare website to help beneficiaries, their families and caregivers, comparenursing homes more easily." CMSRelease, June 18, 2008.

Hospice conditions of participation raise standards. A Final rule imposing new requirements forhospice participation in Medicare and Medicaid becomes effective December 2,2008. The rule clarifies and increases requirements for patient assessments andplans of care, sets new standards for the qualifications of the medicaldirector, social workers, hospice aides, and adds requirements for infectioncontrol. Final rule, 73 FR 32087, June 5, 2008, ¶180,743.