Announcements

Gov. Strickland is preserving hospital jobs and services by returning the franchise fee to the hospital community.

• OHA news release
• Send Gov. Strickland a thank you e-mail/letter
• View video thank you from hospital community to Strickland
  

The OSHRM/SOHA Fall Conference is being held September 16-17 at The Embassy Suites in Dublin.  Register now.

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OSHCA 2010 Fall Conference is being held September 16-17 at Cherry Valley Lodge in Newark.  Register now.

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The Ohio Society of Healthcare Human Resources Administrators will hold their 2010 fall conference on November 11-12 at Quest Business Center in Columbus.  A program agenda and registration information will be available soon.

CGI Federal, the Medicare Recovery Audit Contractor for the region which includes Ohio, announced this week it will immediately begin reviews on 18 newly approved projects that involve the medical necessity of selected inpatient DRG payments. The projects are expected to be posted to CGI's Web page today and hospitals are advised to plan accordingly.

The American Hospital Association is warning states to watch the new projects closely, since problems with medical necessity reviews occurred during the three-year RAC demonstration, including a key concern that RAC auditors lacked adequate clinical  expertise and Medicare-coverage experience to determine whether hospital care was reasonable and necessary.

OHA is also planning its first annual Ohio RAC Summit, for Wednesday, Nov. 3 at the Bridgewater Conference Center in Columbus. Mark your calendars for this one-day session featuring updates from CGI, CMS and National Government Services, as well as sessions on the CMS PEPPER report and updated RAC best practices. Additional information and registration materials will be posted to OHA's RAC Web page soon.

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CMS' final rule on its FFY 2011 Medicare inpatient hospital prospective payment system (IHPPS) was publised in the Federal Register Aug. 16, including a 2.9 percent cut to recover what CMS alleges was a past increase in operating and capital payments related to better ICD.9.CM coding, rather than the cost of the care (2.5 percent to long-term care hospitals). A brief CMS fact sheet is available as is a detailed review by Lawrence Goldberg (Grant Thornton). The 2011 IHPPS final rule is expected to be published in the Federal Register on Aug. 16 and go into effect Oct. 1.

CMS' 2.9 percent "coding creep" cut was by far the most controversial and contested part of the 2011 final rule and is expected to be the subject of intense Congressional lobbying this summer and fall. According to American Hospital Association (AHA) estimates, it will reduce Medicare payment to hospitals nationwide by $3.7 billion in 2011 ($125 million estimated in Ohio), with another cut of the same size scheduled for FFY 2012. Overall, and due specifically to the coding cut, AHA states the average acute care hospital will be paid .4 percent less in 2011 than it was in 2010.

Other aspects of the final rule include:

• Sets of additional quality reporting measures for FFY 2011, 2012 & 2013, totaling 60 measures once all are effective.
• Three updates to payment policy for Critical Access Hospitals, including what many think is the
  first step off a slippery slope of tying the allowance of state hospital tax payments to "related" returns.
• Further tinkering with the three-day, "DRG Window" inpatient admission bundling rules, with CMS now saying all outpatient non-diagnostic care in the three days before an inpatient admission will be considered related -- a complete reversal of policy re-stated a year ago -- unless the hospital specifically documents that it is not, using a yet-to-be released format.
• Lower thresholds for IHPPS outlier payments for acute care hospitals.
• Better payments to "low-volume" and Medicare-dependent hospitals

After 30 years of advocating for hospitals at the Ohio Hospital Association (OHA), John Callender is retiring as senior vice president and CFO, effective Aug. 31.

View OHA news release

CMS' Jurisdiction 15 (J15) Medicare Administrative Contractor (MAC) award to CIGNA Government Services is again on hold. Both National Government Services (NGS), the current Medicare FI for the region, and Hignmark Medicare Services filed  protests last week, which means the US Government Accountability Office may not issue a decision until mid-fall.

CMS posted a brief overview of its decision to award the J15 MAC to CIGNA Government Services, LLC earlier this month. The MAC contract includes nearly all Medicare parts A and B, provider and beneficiary  operations in Ohio and Kentucky, and was first awarded to Highmark in January 2009. Two firms protested, the award, one of them reportedly CIGNA, and CMS re-bid the contract. Following the re-bid, CMS announced it had reversed its initial decision and gave the job to CIGNA. Now that award has been officially protested, so the process is once again on hold.   

The J15 MAC also includes home health and hospice claims administration for Colorado, Delaware, District of Columbia, Iowa, Kansas, Maryland, Missouri, Montana, Nebraska, North Dakota, Pennsylvania, South Dakota, Utah, Virginia, West Virginia and Wyoming.

NGS says it it is likely any MAC transition will run well into 2011, regardless, so it is Medicare business usual for Ohio hospitals and doctors. OHA will continue to monitor the situation and report again as details are released. 

CMS released the FFY 2011 Medicare Skilled Nursing Facility Prospective Payment System (SNF PPS) proposed update notice on July 22. SNF payment updates will be effective October 1, 2010. Comments are due Sept. 20. CMS set the Medicare SNF PPS marketbasket at 2.3 percent, but is proposing to reduce it 0.6 percent to account for a forecasting error in the 2009 payment update, resulting in a proposed 1.7 percent update for 2011.

In line with a Congressional order in the PPACA, CMS will delay the start of SNF PPS Resource Utilization Groups (RUGs) Version IV. However, version 3.0 of the Minimum Data Set (MDS) is supposed to go forward on Oct. 1, as scheduled.

Because there is currently no Grouper that can handle the combination of the old RUGs and new MDS systems, effective Oct. 1, on an interim basis, CMS will pay claims under the RUG-IV system, and once it develops a hybrid RUG-III/MDS 3.0 system to pay SNF claims under the PPACA-mandated rules, CMS will retroactively adjust SNF claims back to Oct. 1, 2010. CMS is also proposing to apply an upward 34.2% parity adjustment to the nursing case-mix weights under the hybrid RUG-III system to ensure parity between overall payments under the RUG-53 model and anticipated payments under the hybrid RUG-III system required by the PPACA.

CMS is proposing to decrease the labor-related share of the federal rates from 69.840% in FFY 2010 to 69.311% in FFY 2011, and will keep the per diem adjustment of 128% for SNF residents with AIDS.

Medicare released its FFY 2011 Inpatient Rehabilitation Facility Prospective Payment System (IRF PPS) notice in the July 22 Federal Register. The updates go into effect for IRF discharges on and after Oct. 1, 2010. CMS is not requesting comments related to the update notice as it contains only rate updates, with no major policy changes.

CMS set the IRF PPS "marketbasket" at 2.5 percent, but will reduce it by 0.25 percentage points as ordered by Congress in the PPACA. Including other adjustments for budget neutrality, the IRF standard payment conversion factor for 2011 will be $13,860, up from $13,627 in 2010, a 1.7 percent increase.

CMS is proposing no changes to the current facility-level rural, low-income patient (LIP), and teaching adjustments under the IRF PPS. CMS will maintain for FFY 2011, the facility-level adjustments established for FFY 2010. To ensure outlier payments continue to comprise 3.0% of total IRF PPS payments, will increase the outlier threshold to $11,410, which will reduce the number of rehabilitation cases eligible for outlier payments. Finally, CMS will decrease the labor-related share of the federal rates from 75.779 percent in FFY 2010 to 75.271 percent in FFY 2011.

Thirty-four northeast Ohio hospitals have shown dramatic progress in improving health care quality including: 

• a 7.6% improvement in providing all recommended care to pneumonia patients;
• a 13% improvement in providing all recommended care to heart failure patients;
• a 5.9% improvement in providing all recommended care to heart attack patients; and
• a 13.9% improvement in providing all recommended care to surgical patients.

View OHA news release
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The Coalition to Protect America's Health Care has launched a national television ad campaign to tell Congress to extend the enhanced FMAP.

Visit www.protecthealthcare.org

The Centers for Medicare & Medicaid Services (CMS) approved a plan to return an estimated $87 million to hospitals through Upper Payment Limit (UPL) payments enacted in the 2010-2011 state budget.

View OHA news release

On July 2, CMS released its annual proposed rule to update the Medicare Outpatient Prospective Payment System (OPPS) for calendar year 2011. The rule covers both outpatient hospital and ambulatory surgical center (ASC) services. A display copy is available now and the formal filing is scheduled for the Aug. 3 Federal Register. A detailed review by Lawrence Goldberg (Grant Thornton) is also available. Comments are due Aug. 31.

The proposed inflationary update to the OPPS APC conversion factor for hospitals is 2.4 percent, which will be reduced by .25 percent as ordered by Congress in the Affordable Care Act (ACA). The 2011 ASC inflationary update is pegged at 1.6 percent, which CMS proposes to completely eliminate in line with a required productivity adjustment, also ordered in the ACA, which coincidentally equals 1.6 percent. Hospitals that did not submit required quality data in 2010 will suffer an additional 2 percentage point reduction. CMS is also proposing six new quality reporting data measures for 2011 -- increasing the total to 17 -- another seven for 2012, and six more to go into effect in 2103. CMS will randomly pick 800 hospitals next year and validate the accuracy of their quality data, with the threat of additional payment reductions if CMS does not agree with the majority of the results.

In addition to the usual laundry list of changes to Ambulatory Patient Groups, CMS continues to tinker with its physician supervision requirements by proposing to require two levels of supervision for "non-surgical extended duration" services, including outpatient observation. The proposed rule also expands CMS' program of reduced coinsurance and deductible amounts for a list of basic preventative services.

Finally, the proposed rule includes policy and reimbursement changes for cancer hospitals, covered ASC services, partial hospitalization programs, inpatient-only procedures and outlier payments.

The Ohio Bureau of Workers' Compensation  will start a Medicare-based, hospital outpatient prospective payment system (OPPS) Jan. 1, 2011.  In a revised version of OAC 54123-6-37.2 , BWC outlines the state-fund OPPS rules. BWC also has a comparative overview of the Medicare and BWC OPPS' available.

From Jan. 1, 2011, through March 31, 2012, BWC will pay acute care hospitals 197 percent of what Medicare pays for the same outpatient service and 253 percent of the Medicare rate at childrens hospitals. Critical Access Hospitals are exempt.  For the first quarter of calendar year (CY) 2011, BWC will use Medicare's 2010 OPPS pricing and grouping methodology. Effective April 1, 2011, BWC will adopt Medicare's CY 2011 version. Thereafter, annual updates to the BWC OPPS will occur on April 1.

In the second year of BWC's transition to its OPPS -- April 1, 2012, through March 31, 2013 -- BWC will pay acute care hospitals 181 percent of what Medicare pays for the same service and pay childrens hospitals 253 percent of what Medicare pays. After April 1, 2013, the acute care rate will drop to 166 percent of what Medicare pays, while childrens hospitals will stay at 253 percent.   

The revised BWC state-fund OPPS has no direct effect on self-insured employers, but other BWC rules give them the right to adopt the state-fund methodology if they choose.

BWC is working with OHA member hospitals on testing and OHA's Finance and Admitting, Billing & Collection Committees will continue to meet with BWC over the summer and fall on the transition. 
 

A three-part Webinar series on the growth of social media opportunities and challenges for hospitals. 

• July 29, Twitter Training: How, What and When to Tweet, Speaker: OHA’s Mary Sterenberg
• Aug. 25, Social Media Benefits & Hazards for Health Care Organizations, Speaker: James. G. Petrie, Bricker & Eckler
• Sept. 15, No More Piecemeal Social Media: Adding Strategy & Measurement, Speaker: Stephanie Pavol, Lesic & Camper Communications

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In its Spring 2010 Ohio Medicaid Quality Monitor Permedion, the Ohio Department of Job and Family Services' (ODJFS) quality review contractor, outlines its concerns that hospitals may be inappropriately using unlisted CPT procedure codes on outpatient Medicaid bills. 

ODJFS initially brought the issue to the OHA Finance Committee's attention during the public rule review that preceded the implementation of the 2010 outpatient hospital fee schedule.  While examining the payment-to-statewide-cost of various code sets in the fee schedule, ODJFS discovered that codes for unlisted surgery and for services billed under Paragraph K of OAC 5101:3-2-21 were being reimbursed at an high rate compared to others. See the January OHA Finance News for additional background on the 2010 Medicaid outpatient hospital fee schedule.  

While part of the payment anomaly can be attributed to the fact that these services are paid on the basis of a percentage-of-charge, ODJFS stated it is concerned that services being billed with unlisted CPT codes, particularly those related to dental services, may not be covered in a hospital setting. The Finance Committee replied that most of the dental care being billed by hospitals relate to services delivered in an emergency setting or to patients requiring non-routine sedation. 

ODJFS nonetheless stated it intends to carefully review both unlisted procedure codes and the services being billed under Paragraph K to determine whether they are being over-paid. The Spring 2010 Permedion newsletter represents the start of that process and hospitals are advised to review it respond appropriately.  

In a June 17 comment letter, OHA joined the American Hospital Association (AHA) and dozens of other state hospital associations in opposing CMS' plan to substantially cut Medicare payments under the 2011 and 2012 Medicare inpatient hospital prospective payment systems (IHPPS) to account for what CMS alleges are overpayment related to coding improvement on Medicare bills. The CMS proposal could cost Ohio hospitals as much as $250 million over two years.

OHA data shows hospitals are not overpaid under the current system, but that they were underpaid using the prior diagnosis-related grouping system. OHA also protested CMS' plan to disallow the cost of state hospital tax assessment programs as a cost of doing business for Critical Access Hospitals.

CMS published the initial IHPPS proposed rule rule May 4.  A follow-up proposed rule to cover the provisions of the Patient Protection and Affordable Care Act (PPACA) of 2010 was published June 2.  Lawrence Goldberg has detailed reviews of both rules in his Washington Bulletins on the Grant Thornton Web site. 

This marks the third time that CMS has called for huge cuts in hospital payments to offset alleged past increases it states are attributed to better diagnosis and procedure coding rather than increases in the cost of the care. To explain its position CMS released Understanding the Documentation and Coding Adjustment.  Hospitals successfully blocked similar CMS proposals so far, but it is not clear how CMS or Congress will respond this year and AHA predicts a major fight . 

Other Medicare policy and payment proposals for 2011 include the usual 2 percentage point cut to hospitals that did not submit required data on quality measures, 10 new and one retired quality measure (bringing the total to 55), but no new Hospital Acquired Conditions, at least not for next year.

The OONE 2010 Fall Conference will once again host a nursing poster session.  The conference is scheduled for October 20 through 22 at Cherry Valley Lodge in Newark, Ohio.  Below are the necessary forms and information for the poster session.

Memo
Application
Exhibit Information
Judging Criteria
BioData Form

The 2009 and 2010 Ohio Hospital Care Assurance Programs will have  a bit of additional funding because of an unanticipated, retroactive increase in the Consumer Price Index for urban consumers from 4 to 4.4 percent. Assuming an additional assessment on Ohio hospitals amounting to approximately $956,000 -- and CMS approval -- the 2009 distribution model will be increased by more than $2.5 million, which is expected to be distributed later this fall based on the existing, approved 2009 model. A preliminary, updated 2009 HCAP distribution model is available. 

The revised CPI-U will also flow through to the 2010 HCAP, but based on a recommendation from the OHA Board of Trustees, OHA will ask the Ohio Department of Job and Family Services (ODJFS) to split allocate the additional 2010 funds to the rural hospital and Critical Access Hospital (CAH) “pots.”  ODJFS is still waiting CMS approval on the plan. A preliminary 2010 HCAP model, including the additional funds from the revised CPI-U is also available.

Finally, a copy of the PowerPoint presentation from the June 15 OHA HCAP annual meeting, held at the Hilton Easton in Columbus, is also available. 

CGI Federal, the Region B Recovery Audit Contractor (RAC) started rolling out the third, 45-day cycle of Additional Documentation Requests (ADRs) this month, increasing the pressure on providers by announcing higher limits on the number of requests it can make each cycle for most Medicare hospitals.  The Centers for Medicare & Medicaid Services (CMS) authorized RACs to request up to 300 medical records each 45-day period if an instutional provider had more than 100,000 claims in 2009, although CGI states it is still not requesting as many records as CMS allows. A brief CMS presentation on the revised limits is available. CGI states there will be additional information on its Web site later this month that will lay out how it calculates each hospital's records limits. 

For other Ohio RAC developments, including a report on problems with the link between the RAC activities and the Medicare Remittance Advice, go to the April OHA Finance News.  CMS also posted a PowerPoint presentation on its RAC adjustment "Section 935" Limitation on Recoupment process. 
   

CMS has put its proposed rule for the 2011 Medicare Skilled Nursing Facility Prospective Payment System (SNF PPS) on hold.

In a May 24 announcement, CMS stated the Patient Protection and Affordable Care Act (PPACA) mandates it delay the start of most of Version 4 of its new SNF PPS case mix classification system -- the Resource Utilization Groups (RUG) IV) -- until FFY 2012, and requires version 3.0 of the Minimum Data Set (MDS 3.0) Resident Assessment Instrument be implemented as planned in FY 2011.  As such, CMS must hold the 2011 SNF PPS proposed rule as it builds the required payment infrastructure.

CMS states it will publish interim Oct. 1, 2010, payment rates in a future Federal Register, using both MDS 3.0 and RUG-IV in its entirety. Then, if necessary, it will adjust payments at some point in the future, once the software for the PPACA-required hybrid RUG classification system is ready.   CMS states this approach will allow  it to make payments with the least disruption for providers and beneficiaries. Watch for additional information this summer.  

CMS hosted a national conference call on RUG IV June 23 to review  coding procedures with emphasis on the appropriate “look-back” periods to be used when coding the MDS 3.0, and how SNFs should separately report individual, concurrent and group therapy for accurate payment.  A PowerPoint slide presentation from the 6/23 call is available. Two additional provider calls are being scheduled for August 2010 to explain other payment issues, including the transition from RUG-III to RUG-IV and the additional changes needed to install a hybrid RUG-III grouper (HR-III) mandated by statute. 

 

CMS released the Inpatient Psychiatric Facilities Prospective Payment System (IPF PPS) update for rate year (RY) 2011 in the April 30 Federal Register. IPF PPS RY 2011 starts with discharges July 1, 2010. An overview of the notice by Lawrence Goldberg, Grant Thornton, is available

The IPF PPS employs a national, per diem base rate adjusted by a psychiatric DRG, an area wage index and the presence of one or more facility or patient-specific factors. CMS will reduce the annual market-basket-based 2.4 percent update to the federal per diem rate by .25 percent, as ordered in the Patient Protection and Affordable Care Act, to arrive at a new base rate for RY 2011 of $665.71.

Announcement: OHA white paper describing and distinguishing the Provena Covenant Medical Center property tax exemption case in Illinois from Ohio law

The ONPR Annual Conference will be held Sept. 30-Oct. 1, 2010, at the Hilton at Easton in Columbus.  An agenda and registration information will be available later.  Make online hotel reservations directly with the Hilton at Easton.

Hospitals across Ohio are receiving the second round of Recovery Audit Contractor (RAC) Additional Documentation Requests (ADRs) on Complex Review projects. CGI Federal, the Region B RAC for most of the great lakes states, started distributing “Round Two” ADR letters earlier this month on a rolling basis to Ohio Medicare providers, and in most cases, results from the first round of RAC Complex Reviews are also coming in. Hospitals are advised to keep watch for both.

CMS is also holding the first of a series of national “RAC 101” teleconferences April 28 from 1-2:30 p.m. For details and dates on additional calls go to the CMS Web page for recent RAC updates.

Other Ohio RAC developments, including a report on problems with the link between the RAC activities and the Medicare Remittance Advice. go to the April OHA Finance News.

National Government Services (NGS), the regional Medicare Part A Fiscal Intermediary, is predicting it may be well into 2011 before the Centers for Medicare & Medicaid Services(CMS) moves forward with plans to combine all beneficiary, medical review and provider operations into one Medicare Administrative Contractor (MAC) for Ohio and Kentucky.

CMS has had several regional MAC contracts on hold for some time, including the OH/KY Jurisdiction 15, initially based on a threatened legal challenge to its decision to award the J-15 MAC contract to the Philadelphia-based Highmark Medicare Services, later because of a conflict with the rollout of the Region B Medicare Recovery Audit Contractor (RAC), and now, reportedly due to CMS' desire to see what Congress does with national Medicare payment and coverage reform.

NGS states it is still in the running for the J-15 MAC award and will report again as soon as additional information is released from CMS. Regardless, NGS is telling OHA it will be handling Medicare Part A claims processing and medical review, including RAC appeals, for the rest of 2010 and probably well into 2011.

The OSHHRA Spring Conference will be held April 16 at Cherry Valley Lodge.  Register soon!

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The Ohio Bureau of Workers' Compensation (BWC) will delay the start of its transition to a hospital outpatient prospective payment system (OPPS) until 2011, citing complaints from OHA and a number of member hospitals about the negative effects of the proposed BWC OPPS on 2010 budgets.

Last summer, BWC unveiled a plan to adopt the Medicare OPPS as its payment methodology for outpatient hospital services for the state-fund Health Partnership Program (HPP), effective April 2010. BWC also announced its intention to cut $30 million a year in state-fund outpatient hospital payments by setting the BWC OPPS rate at 166 percent of what Medicare pays for the same service at a general acute care hospital and 253 percent of the Medicare rate at a childrens' hospital. Critical access hospitals would be exempt from the BWC OPPS, just as they are from Medicare's.

OHA's Finance Committee opposed the move in a series of meetings with BWC staff, protesting that the imposition of an OPPS is unnecessary, overly expensive and, in conjunction with planned payment cut, highly redistributive within hospitals and systems. BWC insisted its OPPS plan was sound and cost effective, but initially responded to OHA by bumping the implementation back one month and adding a two-year transition, during which hospital payments would be based on a blend of old and new payment systems.

At this point, however, while still defending its decision to move to an OPPS, BWC states it will compromise with hospitals concerned about meeting 2010 budgetary targets set before the bureau's plans were finalized by holding off on OPPS until Winter 2011, and then starting the promised two-year transition, which will push full OPPS implementation back to 2013. OHA will follow the story as it develops and report again when additional details are released.

The Lobbying Expenditure Law requires OHA to notify its membership of the percentage of membership dues related to lobbying activities that, depending on an institution’s tax status, would be non-deductible under the law. OHA sent a letter with 2010 details to hospital CFOS by e-mail Friday, Feb. 19. 

ODJFS revised its Medicaid outpatient hospital fee schedules for 2010, reversing an Oct. 1, 2009, increase to specific CPT codes and services in the hospital emergency department and surgery fee schedules. Instead, ODJFS will inflate all non-charge-based outpatient hospital fee schedule payments by 5 percent, effective with services delivered Jan. 1, 2010, and after (see the October 2009 OHA Finance News for additional background) . The updated hospital fee schedules are included as attachments to HHTL 3352-09-07, which includes all changes to OAC 5101:3-2-21. The department also released HHTL 3352-10-01 with all 2010 hospital payment and policy updates.

ODJFS also states it will "open" UB-04 Revenue Code 0636 to allow hospitals to submit detail coding for drugs, effective April 1. RC 0636 is not required, but if it is used, hospitals will have to include a HCPCS J Code with it. 

OHA is still waiting on word regarding a possible requirement for additional detailed coding of pharmacy items. In December, ODJFS stated it would hold back any requirement to use National Drug Codes (NDCs) while it explores other, less expensive and cumbersome options with CMS. OHA continues to recommend hospitals cease all activity on NDCs until further notice.

The Quality Institute of the Ohio Hospital Association is accepting proposals for presentations to be held at the 3rd Annual Quality Collaborative Summit  June 16 at OHA’s Annual Meeting at the Hilton Columbus at Easton.

The Quality Institute calls for speakers and poster presenters on the following four educational topics:

• Infection Control
• Falls
• HCAHPS (Patient Satisfaction)
• Readmissions
  

View RFP for more information.

The OSHHRA 2010 Spring Conference will be held April 16 at Cherry Valley Lodge in Newark.  The OSHHRA 2010 Fall Conference is scheduled for Nov. 11-12 at Quest Conference Center in Columbus.  Program agendas and registration will be available soon.

CMS last month released a letter outlining the dispute resolution process for non-contracting providers under its Medicare Advantage (MA)  managed care plan. CMS states its clarification covers "any decisions where a non-contracted provider contends that the amount paid by the organization for a covered service is less than the amount that would have been paid under original Medicare. Provider payment disputes also include instances where there is a disagreement between a non-contracted provider and the organization about the plan’s decision to pay for a different service than that billed, often referred to as down-coding of claims".  CMS assumes any in-panel provider dispute with a MA plan will be addressed in the terms of the provider's contract.

First Coast Service Options, Inc., a Florida-based Medicare Administrative Contractor will act as the national intermediary for these disputes. The CMS letter has street and electronic addresses for First Coast, directions for documentation and timelines for response. 

Hard copy demand letters on automated RAC reviews and medical records requests (ADRs) for complex reviews are being received across the state. There are almost 50 approved review projects now listed on the CGI Issues page. Unfortunately, in some instances the letters are not being directed to the identified RAC contact and are being sent to a general address. Please be on the lookout for correspondence from CGI Technologies and Solutions. Sample demand letters and envelopes are available on OHA’s RAC Web page. If a letter or request is sent to the wrong address, immediately contact CGI at RACB@cgi.com and ask it to update its records and confirm the change.

In a minor related issue, CGI reported the previously announced automated issue on Medically Unlikely Edits (MUE) was prematurely posted to its issues page and has been removed. Once the MUE project is through the entire approval process at CMS, it will be reposted.

The SOOHP Annual Conference will be held March 25-26, 2010, at The Doubletree Hotel in Worthington. 

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The Ohio Department of Job and Family Services (ODJFS) confirmed this week the Feb. 1 carve-out of coverage for prescription drug and related medical supplies from Medicaid managed care capitation rates should not affect hospital bills or managed care payments to hospitals. ODJFS published background on the pharmacy carve-out, revised co-pay requirements for pharmacy providers, billing procedures, information on tamper-resistant prescription pads and sample managed care enrollment cards in Medical Assistance Letter 565 and Medicaid Handbook Transmittal Letter 3344-10-01. ODJFS also has a list of medical supplies affected by the policy change and a set of pharmacy carve-out Q&As.

In essence, ODJFS is separating the benefit for free-standing and take-home pharmacy items and related supplies from the monthly, per-member capitation rate it pays to Medicaid Managed Care Plans (MCPs) and instead will direct pharmacies to bill ODJFS directly. This change does not affect drugs and related supples delivered by a hospital during an inpatient admission or outpatient visit, but it will mean hospital-based pharmacies that fill scripts for take-home drugs must bill Medicaid rather than the patient's MCP.

The final nomination deadline for OHA’s 2010 Albert E. Dyckes Health Care Worker of the Year Award is Monday, Feb. 1. Supporting material for nominations is available, including:

• A submission checklist
• Nomination writing tips
• Health Care Worker of the Year facts
• A PDF document of nomination questions (to review questions before submitting the online nomination)

Nominations must be submitted online by Feb. 1. All nominees will be celebrated at the OHA Recognition Dinner June 15 at the Hilton Columbus at Easton during OHA’s Annual Meeting.

CGI Technologies and Solutions, the Ohio Medicare Recovery Audit Contractor (RAC) will add two new automated RAC review projects -- totaling 13, when you count the eleven already posted to its Issues Web page -- and 17 new complex review projects, effective Jan. 18. Nearly all the Complex Review Projects involve DRG validation topics.
 
CGI informed OHA it will slowly begin to issue demand letters on automated projects this week, indicating individual hospitals should not see repayment demands for any large number of accounts at first. CGI has provided sample copies of the automated Demand Letter and a sample envelope in which the hardcopy demand letters will be mailed.  The Complex Review Projects will start within the next couple of weeks with requests for medical records (Additional Documentation Requests, or ADRs). To assist, CGI also has also posted Medical Records Submission Instructions.

The American Hospital Association also posted a January 2010 RAC Update, with new information on ADRs and limits on medical records requests.

In a Jan. 12 memo to Bureau of Workers' Compensation (BWC) medical services chief Robert Coury, OHA re-affirmed its opposition to the imposition of a Medicare-style outpatient prospective payment system (OPPS) on hospital services delivered to state-fund injured workers.

Last summer, BWC unveiled a plan to change its outpatient, state-fund hospital payment methodology from one based on Medicaid cost to another based on the Medicare OPPS, effective April 2010. BWC did not propose to make the change on a budget-neutral basis. Rather, BWC stated it also plans to cut $30 million a year in outpatient hospital payments by setting the BWC OPPS rate at 166 percent of what Medicare pays for the same service at a general acute care hospital and 253 percent of the Medicare rate at a childrens hospital. Critical Access Hospitals would be exempt from the BWC OPPS, just as they are from Medicare's. An overview of BWC's OPPS proposal and a PowerPoint presentation are available.

OHA initially responded in a Oct. 2009 memo to Coury, protesting that imposition of an OPPS would be unnecessary, overly expensive and, in conjunction with the huge outpatient payment cut, highly redistributive within HPP-certified hospitals. BWC replied in Dec. 2009, that it did not agree the OPPS was inappropriate for the HPP, but stated it would permit a one-year transition, during which general acute care hospitals would be paid 189 percent of the Medicare OPPS payment rate (essentially halving the payment cut for one year) and moving the start date back to May 2010.

The BWC Board of Directors is scheduled to vote on the proposal Jan. 22, after which, if it is approved, BWC will proceed with the public rules necessary to change the HPP payment system. OHA will follow the proceeding and comment at each step, and encourages member hospitals to analyze the effects of the proposal and respond, too, if appropriate.

CMS released the CY 2010 Home Health Prospective Payment System final rule (HH PPS) Nov. 10. The 2010 rule updates the base HH PPS rates by 2 percent, but also continues CMS' 2.75 percent reduction to the HH PPS rates to account for what it alleges are payment increases related solely to coding improvements. The rule also caps outlier payments and implements a new version of the OASIS patient assessment tool, the OASIS-C, beginning Jan. 1, 2010. A detailed review by Lawrence Goldberg, Grant Thornton is available.

The National Uniform Billing Committee (NUBC) recently approved a series of changes to the UB-92 Point of Origin code set (formerly “Source of Admission”). These changes become effective for discharges on or after July 1, 2010. This data element is reported in Form Locator 15 of the UB-04 and in CL102/Loop ID 2300 of the 837 Institutional implementation guide.

1) Three codes are eliminated and will no longer be valid for use:

• Code 7 - Emergency Room
• Code B - Transfer from Anther Home Health Agency (Replaced with new Condition Code 47)
• Code C - Readmission to Same Home Health Agency

2) The definitions to Codes 1 and 2 have been modified. Code 2 now includes both clinic and physician office points of origin.

3) Also effective 7/1/10 is new Condition Code P7 to indicate that the patient was admitted directly from this facility’s Emergency Room/Department; it is FOR PUBLIC HEALTH REPORTING ONLY.

CGI, the Ohio RAC, has informed OHA it will begin seven automated review projects in Ohio within the next few weeks. The seven automated review projects, including a new one on "wheelchair bundling," are listed on CGI's Web site, with background and manual citations. CGI also provided sample copies of the automated Demand Letter and a sample envelope in which the hardcopy demand letters will be mailed. Automated RAC projects do not include requests for medical records. CGI states it will slowly roll out the seven automated projects to Ohio providers, which means individual hospitals should not see repayment demands for any large number of accounts at first.

This week, too, the Centers for Medicare & Medicaid Services issued a revised statement on how it will calculate the per-provider limits on requests for medical records.  According to CMS, RACs will establish a "campus-unit" limit on records, every 45 days, that will be defined by a combination of Tax Identification Numbers and Zip Codes. The campus-based unit methodology will reduce the number of potential records requests for hospitals with multiple provider numbers and distinct service lines within a close geographical setting.  

CMS released the CY 2010 Home Health Prospective Payment System final rule (HH PPS) Nov. 10.  The 2010 rule updates the base HH PPS rates by 2 percent, but also continues CMS' 2.75 percent reduction to the HH PPS rates to account for what it alleges are payment increases related solely to coding improvements. The rule also caps outlier payments and implements a  new version of the OASIS patient assessment tool, the OASIS-C, beginning Jan. 1, 2010. A detailed review by Lawrence Goldberg, Grant Thornton is available.

Responding to a shortage of N95 respirators, the Ohio Department of Health (ODH) this week provided new guidance to prevent and control the transmission of H1N1 and seasonal influenza in health care and non-health care environments. The new guidelines relax the need to use N95 respirators for all influenza patients and recommend actions health care facilities can take to reduce N95 respirators used within the facility. This guidance was jointly developed by ODH, OHA, the Ohio Bureau of Workers’ Compensation, the Ohio Department of Public Safety and the Ohio Department of Administrative Services.
View ODH N95 guidance

OHA’s updated its Supply Shortage Evaluation Process document, which includes tools and information to help hospitals make decisions on the evaluation and monitoring of supplies.
View OHA Supply Shortage Evaluation Process

The Medicare Outpatient Prospective Payment System (OPPS), which covers outpatient hospital and ASC services, was updated in  the Nov. 20 Federal Register. Hospitals that report the 11 required outpatient quality data measures will receive an overall 2.1 percent update. ASCs will get 1.2 percent. The rule also covers several policy changes on the coverage of additional pulmonary and cardiac rehab services and newly clarified guidelines for physician supervision that will allow an on-campus hospital exemption to the direct supervision requirement to continue. Off-campus hospital services will be subjected to more stringent supervision guidelines. CMS has additional details on the 2010 OPPS on its Web site and a detailed analysis from Lawrence Goldberg, Grant Thornton, is also available.

CMS released revised inpatient rehab hospital coverage guidelines in Transmittal 112 on Oct. 23.  Reflecting changes contained in the Aug. 7, FFY 2010 Inpatient Rehabilitation Facility PPS Final Rule, the latest updates go into effect on Jan. 1, 2010,  and include new documentation, screening and evaluation, and supervision requirements, as well as updated medical necessity criteria.  Copies of the overhead presentation from a CMS Nov. 12 special conference call on the new IRF requirements are available.   

Earlier this month, the U.S. Department of Health and Human Services (HHS) Office for Civil Rights (OCR) issued a notice of proposed rulemaking to strengthen privacy protections for genetic information under the HIPAA Privacy Rule, as required by the Genetic Information Nondiscrimination Act of 2008 (GINA). GINA gives individuals new privacy and nondiscrimination rights with regard to the use of genetic information in health insurance decisions and employment. The proposed rule would modify the HIPAA Privacy Rule to clarify that genetic information is health information and to prohibit the use and disclosure of genetic information by health plans for underwriting purposes. The proposal includes a 60-day comment period.

Last week OHA testified in favor of a decision by the Ohio Department of Job and Family Services (ODJFS) to scrap an earlier plan that would have allocated the Jan.1, 2010, increase in outpatient hospital reimbursement to specific revenue areas (see related Oct. 12 OHA Finance News article). Instead, ODJFS will increase the entire, non-charge-based outpatient hospital fee schedule by 5 percent, effective Jan. 1, and discuss an alternative payment methodology for unlisted surgical procedures with OHA later next year. The Jan. 1, 2010, permanent rule is available. The updated 2010 Medicaid outpatient hospital fee schedules are currently available only by going to the Register of Ohio and entering rule number 5101:3-2-21 in the left-hand section titled "Search Proposed and Recently Adopted Rules by." The fee schedules are included in the appendices to OAC 5101:3-2-21.

What this change means:

• The temporary rule that went into effect Oct. 1, and which allocated approximately $19 million to specific emergency department (ED) and group surgery services, will stay in effect through the end of 2009. The temporary fee schedules are currently only available at the Register of Ohio site linked above.
• Effective (service date) Jan. 1, 2010, ODJFS will inflate the entire, non-charge-based outpatient hospital fee schedule, which was in place prior to Oct. 1, by 5 percent. That is, ODJFS will back out the changes made in temporary rule on Oct. 1 to the ED and surgery fee schedules and multiply the remaining reimbursement rates by 1.05 for every service not paid on the basis of a percent-of-charge.
• If increasing the payment for a lab service by five percent would cause it to pay more than Medicare does for the same service, the Medicare payment ceiling will apply. ODJFS will also create a hospital-specific lab fee schedule, so the payment update does not cover independent, non-hospital labs.
• Items and services paid at a percent-of-charge, like OAC 5101:3-1-21(K) and unlisted surgical procedures (CPT 99-level) will continue to be paid as they are now. After the first of the year, ODJFS intends to review the services being billed using unlisted surgery CPT codes and may recommend additional changes for later in the year. The OHA Finance Committee will stay involved in those discussions and we will report again when more is known.
• Finally, ODJFS will not implement any requirement to use National Drug Codes until April 1, 2010, at the earliest, while it continues to explore other, less expensive and cumbersome options. At this point it looks like the department may instead recommend the use of HCPCS J codes instead of NDCs, so OHA continues to recommend hospitals cease all activity to prepare for the use of NDCs until further notice.
  

ODJFS already updated Medicaid managed care capitation rates by an amount equal to five percent of each managed care plan's outpatient hospital book of business, effective Oct. 1, so there likely no additional action needed to apply the Jan 1. permanent rule to Medicaid managed care.

OHA and ODH are addressing concerns over shipment of H1N1 vaccines to hospitals, which are asked to reduce the number of staff on the registry to one or two and reevaluate the type of vaccine ordered. ODH will direct Ohio’s allotment of H1N1 vaccine to hospitals and local health departments before other providers to meet the CDC’s priority guidelines.

View OHA talking points

The FDA issued authorization for the emergency use of the unapproved drug Peramivir IV for treatment of H1N1 in certain adult and pediatric patients. To learn more, view a fact sheet for health care providers. Only physicians with prescribing authority can request the drug.

The Ohio Department of Job and Family Services (ODJFS) is re-thinking its proposed requirement for National Drug Codes (NDCs) on outpatient Medicaid bills.

In 2007, responding to a 2005 Congressional order to pursue drug manufacturer rebates, the Centers for Medicare & Medicaid Services (CMS) mandated state Medicaid agencies require hospitals and outpatient providers to separately identify and NDC-code pharmacy items, effective January 2008. ODJFS repeatedly asked CMS for extensions, but advised OHA to plan on an eventual 2010 rollout out that would include Medicaid secondary claims. Earlier this month, CMS announced it was backing off its national mandate, and instead would permit states to decide for themselves whether to require NDCs.

ODJFS has informed OHA it is reconsidering NDCs and may instead rely on HCPCS J codes to report outpatient pharmacy items. ODJFS also states it will likely delay any requirement until April 1, 2010, regardless. As such, and until further notice, OHA is advising its members to hold all preparations to include NDCs on Medicaid bills. OHA will follow the changing situation closely and report again as soon as more is known.

The Public Utilities Commission of Ohio (PUCO) on Oct. 15 modified rules that implement the alternative energy portfolio standards created by Senate Bill 221, Ohio’s electricity law. They incorporate requirements for energy efficiency, alternative and renewable energy resources and the resource plan. View the PUCO order and revised rules

On Oct. 14, CDC updated its H1N1 infection control guidance for health care settings, including use of N95 respirators. CDC still recommends health care workers in close contact with patients having suspected or confirmed H1N1 flu use N95s, but acknowledged supply concerns. Hospitals that demonstrate “good faith” efforts to acquire N95s will not be deemed out of compliance by the Occupational Safety and Health Administration.

View CDC guidelines 

Please join us on Nov.17 from 9 a.m. - 12 p.m. at the OHA offices for a presentation by Roger King.  Mr. King will update attendees on the following topics:

• Wage and Hour Compliance
• Wellness Program: How Healthy is your Workforce; H1N1 Practical Guidance and Compliance with Expanded ADA
• Labor Relations Update
• Electronic Communications and Privacy of Workforce

Registration information will be posted and sent out soon.

In a letter released today, OHA formally opposed the BWC plan to start using the Medicare outpatient prospective payment system (OPPS) next April to pay for care delivered to state-fund injured workers, calling it over-complicated, expensive and inappropriate. BWC states the move would cut an estimated $30 million from hospital reimbursement each year. OHA states that cut could more than double if self-insured employers also adopt the OPPS, which state rules give them the right to do. BWC has yet to respond, but earlier stated it would take OHA's concerns to its Board of Directors in November.  

The Health Coalition on Liability and Access issued a report on “The State of Medical Liability Reform” in which it showed how patient access to care was improved in states with tort reform as compared to states without tort reform.

The American Hospital Association updated its report on the rollout of the national RAC program, with links to the four RACs' approved projects and new information on medical records requests limits. CMS has postponed its Nov. 5 RAC "town hall meeting." OHA will follow up as soon as CMS reschedules.   

CMS will not cut Medicare inpatient hospital (IH) PPS and long-term acute hospital (LTCH) payments to account for "coding creep" in FFY 2010. In its final rule, CMS states its data is not detailed enough to warrant the cut in 2010, but it will continue to analyze inpatient payment data and re-visit the policy in FFY 2011. Both OHA and the American Hospital Association strongly opposed CMS' earlier statement that the cut was necessary to reverse payment increases due to better ICD.9.CM coding, rather than the cost of care. CMS will also continue to pay teaching hospitals for capital expenditures, strengthen hospitals' quality reporting requirements and make several other changes to IH PPS and LTCH coverage and payment policy. A detailed review by Lawrence Goldberg, Grant Thornton, is available, as are CMS alerts on the hospital payment and quality provisions

CMS will implement the 2010 update to the Medicare Skilled Nursing Facility Prospective Payment System (SNF PPS) Oct. 1, 2009. A final rule was released Aug. 11.  CMS' continued "refinement" of the Resource Utilization Group (RUG) III discharge classification system will result new payment cuts to SNFs estimated at $609 billion, even with a full market-basket increase in 2010. CMS states it will implement RUG IV in 2011, which is expected to further increase the number of PPS groups and continue to drive down SNF reimbursement. A review of the FY 2010 SNF PPS final rule by Lawrence Goldberg, Grant thornton, is available.   

OHA is launching a redesigned Web site Sept. 15. The new site will contain many new features, including:

• A tool for employees to select their area of interest and have access to pertinent educational activities, news, etc...;
• The ability to sign up for RSS feeds on a variety of subjects;
• Photos showcasing hospitals and employees;
• Important announcements featured in a special section.

The new site will be more interactive and bring important news and information to hospitals, legislators, elected officials, the media and public in a more accessible way.

The WasteWise Program provides a mechanism for U.S. EPA to once again award exceptional efforts in waste reduction and green house gas (GHG) emission reductions. It is the agency's best-suited voluntary program to support health care sustainability efforts.

Hospitals and physicians should consider prescribing antiviral medications to patients at high risk for complications from seasonal or H1N1 flu, according to updated guidelines released Sept. 8 by the Centers for Disease Control and Prevention.

For the first time, Consumer Reports will provide patient satisfaction ratings for hospitals across the U.S. Subscribers to www.ConsumerReportsHealth.org will be able to look up their local hospitals to see how they stack up. Hospitals may receive inquiries from media and patients. 

CMS released its rate year 2010 final notice with updates to the Inpatient Psychiatric Hospital Prospective Payment System (IPF PPS) on May 1, 2009. The notice, effective with discharges July 1, 2009, and after, includes a 2.1 percent increase in overall IPF PPS payments, upping the federal per day base rate to $651.76. The notice also slightly increases the portion of the base rate to which an area wage index is applied and makes minor adjustments to the drg groupings and comorbidity payments. A review of the notice by Lawrence Goldberg, Grant Thornton, is available.