WASHINGTON – To help Americans become smarter health care shoppers, Medicare this month started publishing a range of what it pays for 30 common procedures and report how frequently hospitals perform them.

The release of the information fits with the Bush administration’s strategy of moving more people into health savings accounts and high-deductible insurance policies. Such insurance policies require people to bear more of their initial medical expenses.

As more people buy such policies, the administration maintains, cost increases would slow because people would work harder to look for the best deal or decide they don’t really need a medical service after all.

The Medicare data – released June 1 – covers such procedures as heart operations, the implant of heart defibrillators and back and neck operations.

The most common elective surgery paid for by Medicare is the replacement of a hip or knee. The government information shows that those procedures cost an average of $11,761. Medicare paid between $9,992-$12,173, on average.

The Pueblo Chiefton

AISHealth

CMS said recently that hospitals can’t charge Medicare for more than one IV push injection of the same drug during the same patient encounter (HCPCS code C8952C), according to new guidance on billing for drug administration under the outpatient prospective payment system (OPPS). Only multiple injections of different drugs can be charged separately, according to the guidance, which comes in the form of answers to frequently asked questions (FAQs) and was posted on the CMS Web site in mid-February.

This is the latest in a series of OPPS drug administration changes to cause revenue and/or compliance challenges for hospitals.

The Centers for Medicare & Medicaid Services (CMS) announced today that it is expanding Medicare’s national coverage of bariatric surgery for all Medicare beneficiaries. For seniors, who have experienced high complication rates in some settings, Medicare will cover the procedure only in high-volume centers that achieve low mortality rates.

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Implementation of the National Provider Identifier(NPI) is moving forward. We should stay on top of the current implementation calendar and recent CMS guidance.

Here is a link to the CMS site where there is a letter clarifying CMSs expectations on determining subparts to covered entities who should bill CMS using unique NPIs. Here is an excerpt clairfying how organizations should define subparts:

Generally, the type of service being reported on a Medicare claim determines the type of Medicare contractor who processes the claim. Medicare will expect an enrolled organization health care provider or subpart to use a single (the same) NPI when billing more than one type (fiscal intermediary, carrier, RHHI, DMERC) of Medicare contractor. However, in certain situations, Medicare requires that the organization health care provider (or possibly even a subpart) enroll in Medicare as more than one type of provider. For example, an ambulatory surgical center enrolls in Medicare as a Certified Supplier and bills a carrier. If the ambulatory surgical center also sells durable medical equipment, it must also enroll in Medicare as a Supplier of DME and bill a DMERC. This ambulatory surgical center would obtain a single NPI and use it to bill the fiscal intermediary and the DMERC. Medicare expects that this ambulatory surgical center would report two different Taxonomies when it applies for its NPI: (1) that of Ambulatory Health Care Facility—Clinic/Center–Ambulatory Surgical (261QA1903X) and (2) that of Suppliers—Durable Medical Equipment & Medical Supplies (332B00000X) or the appropriate sub-specialization under the 332B00000X specialization.

P4P is already on its way and most organizations that manage Medicare lines of businesses are not preparing for the changes in data collection and reporting. Here is a good article outlining the P4P programs already in demonstration with CMS and where they are headed. Now is the time for us to pay attention and begin planning and preparing.

• Outpatient dialysis facilities: Composite rate payments should be increased by the market basket increase for the sector, or 3.1%, minus 0.45% to account for productivity gains. In addition, MedPAC said Congress should direct the secretary of HHS to eliminate disparities in payments to hospital-based and freestanding dialysis facilities under the composite payment rate and combine the composite rate and add-on adjustment for dialysis medications into a single payment.
• Doctors: Payments to doctors should be increased by the expected change in “input prices” for doctor care minus an adjustment for productivity gains, resulting in an overall increase of 2.8%. The cost of the increase would be $1.5 billion in the first year and $5 billion to $10 billion over five years.
• Payment codes: The HHS secretary should establish a new procedure for reviewing payment codes that accompany the tests and services for which doctors bill Medicare to help identify services that are “overvalued.” A new permanent panel of experts should be appointed to review recommendations by the Resource Utilization Committee. The panel also recommended no payment increase for FY 2007 for home health agencies, inpatient rehabilitation facilities, long-term care hospitals and skilled nursing facilities. In addition, MedPAC decided that it will postpone for now a recommendation to address the “relatively poor performance of rural hospitals” under the existing outpatient Medicare payment system, CQ HealthBeat reports.

Reaction

The American Hospital Association said it was “dismayed” with MedPAC’s recommendation to reduce the Medicare payment increases called for under law. AHA Executive Vice President Rick Pollack said, “This poor decision ignores data detailing the pressures facing hospitals and fails to take into consideration the very serious impact any reduction in payment would have on hospitals and the patients we serve.” He added that hospitals’ Medicare margins have fallen continually since 1997, and in 2004, 68% of hospitals lost money treating Medicare beneficiaries. “With this evidence at hand, MedPAC’s recommendation for less than a full market basket update is very troubling and threatens hospitals’ ability to continue to provide vital health care services,” Pollack said. Larry Minnix, president of the American Association of Homes and Services for the Aging, said, “We are disappointed that MedPAC recommended no inflation adjustment for SNFs in 2007, especially since the Commission reported last month that profit margins at non-profit SNFs are nearly zero.” Minnix added, “This recommendation only amplifies the need for our country to take a comprehensive look at how to overhaul long-term care financing to meet the needs of our aging population” (Reichard, CQ HealthBeat, 1/10).

More…

The office charges $133 for a 20- to 30-minute office visit with a regular patient. Blue Cross Blue Shield and Aetna — both preferred insurance providers for the clinic — cover about $113 of the $133, Warner said. Medicaid, the government insurance program for people with low incomes, pays $77.61.

Starting in 2006, Medicare will pay the least of all. While the extra money was available, Medicare would cover $87.97 of $133, or 66 percent. Now that the money is gone, Medicare will pay $53.30 for the same visit, or only 40 percent, Warner said. The federal government allows patients to make up some of the difference but not all of it.

Forty percent of an office visit is roughly the same percentage Medicare was paying several years ago when local doctors started dropping out of the program and seniors tried, often unsuccessfully, to find someone to treat them after age 65.

The concern today is providers are going to be asked to do more (with all the changes in benefits and Part D implementation) and compensated at the lowest rate yet. How many providers in Alaska will continue to provide services to Medicare patients…

As Joseph Paduda points out, maybe some of those bridges to nowhere could have been better used to build bridges to Medicare.

Another result of the MMA 2003 is the Medicare Contractor Provider Satisfaction Survey. CMS is going to measure how good a job the 42 contractors paying over $280 Billion in claims a year are doing…

“The MCPSS will query 25,000 randomly selected providers (e.g., physicians, suppliers, healthcare practitioners, and institutional providers), a statistically valid and representative sample of the 1.2 million who serve Medicare beneficiaries. Those providers selected to participate in the survey will be notified by mail during the first week of January 2006. The survey is designed so that it can be completed in less than a half hour. Survey responses can be submitted via a secure Web site, mail or fax and will be accepted through January 25, 2006.

The survey questions will focus on seven key areas of provider-contractor interactions, including:

• Provider communications
• Provider inquiries
• Claims processing
• Appeals
• Provider enrollment
• Medical review
• Provider audit and reimbursement”

CMS will post the survey results in July 2006…

CMS Press Release
More Info on MCPSS