Washington Report - December, 2002
Bill Finerfrock
Capitol Associates
Never a Dull Moment
December is generally a quiet time in Washington, at least when Congress is not in session. Thoughts of family, friends, good health and good cheer tend to dominate the discussions in DC this time of year. While fireworks are not uncommon in DC, they are usually confined to the days around the 4th of July. Rarely do we get fireworks - at least not the political kind - in December.
This December has been different, to say the least.
When I wrote the November Report the Congressional Leadership picture appeared set for the 108th Congress. Since that report was written a major shake-up has occurred in the Republican leadership.
Due to some inappropriate comments by Senator Trent Lott (R-MS) with regard to the 1948 Presidential campaign of former Senator Strom Thurmond (R-SC), Senator Lott is no longer going to be the Majority Leader in the 108th Congress. In mid-December, Senator Lott, under pressure from his Republican colleagues, resigned as the Republican Leader (Majority Leader-elect). In his place, Republicans elected Senator Bill Frist (R-TN) as the new Senate Republican Leader. By virtue of this position and the Republicans controlling a majority in the Senate, Senator First will is the Senate Majority Leader.
While at first blush this may seem like a mere administrative change within the Republican family, this change will likely have significant policy implications, particularly as it relates to health policy. Senator Frist is the only physician in the United States Senate and has developed a bi-partisan reputation as one of the Senate’s leading experts on health policy matters. Senator Frist continues to maintain his medical license and has, on several occasions since being elected to the U.S. Senate, been called upon to use his skills as a physician to save lives.
Because of the shake-up in the Republican hierarchy, Senate Republicans have been delayed in getting to work on their agenda for the 108th Congress. As a result, some issues that had been slated for quick action by the new Congress may slip on the calendar. One of those issues is dealing with the pending cut in Medicare payments for physicians. Some Congressional leaders had been talking about trying to move a Medicare “fix-it” bill in the early weeks of the 108th Congress in order to prevent the 4.4% cut in Medicare provider payments from taking effect on March 1, 2003. In addition to the timing problems, some key Congressional leaders - particularly those representing rural constituencies - have stated that if they are going to fix Medicare, then they want to do a comprehensive overhaul and not a piecemeal issue-by-issue approach.
Once Members begin the formal process of laying out their legislative agendas, the prospects for early action on Medicare legislation will become more clear.
CMS Delays Fee Schedule Cut
By waiting until December 31st to formally announce the long anticipated Medicare fee schedule reduction, the Centers for Medicare and Medicaid has bought the Congress two months to deal with this volatile issue. According to the Federal Register notice, Carriers are to begin applying the new fee schedule amounts for services delivered beginning on March 1. As noted in the previous story, it is still not clear, however, if this is sufficient time for Congress to act.
As part of the December 31st announcement, CMS stated,
“The Department intends to work closely with Congress to develop legislation
that could permit a positive update, and hopes that such legislation can be passed
before the negative update takes effect.”
In anticipation of receiving Congressional authority, CMS is soliciting comments and suggestions for how the fee schedule rates could be recalculated.
If you would like to review the entire rule, you can go to:
http://a257.g.akamaitech.net/7/257/2422/14mar20010800/edocket.access.gpo.gov/2002/pdf/0232503.pdf
In commenting, responders should refer to file code CMS-1204-FC and mail two copies
of their comments to:
Centers for Medicare and Medicaid Services
Department of Health and Human Services
Attention: CMS-1204-FC
P.O. Box 8013
Baltimore, MD 21244-8013
Comments must be received by CMS no later than March 5, 2003.
While one is hard pressed to find a Member of Congress who supports the fee schedule reduction, finding a legislative fix that enjoys the support of a majority of Members has proved elusive. Many, as previously noted, are arguing that while the physician fee schedule reduction is wrong, it is not the only provider payment problem that is occurring. Why, these Members argue, should we only fix the physician problem when we know there are similar problems occurring with respect to hospital payments, home health payments and payments for a variety of other services?
Senators Charles Grassley (R-IA), the incoming Chairman of the Senate Finance Committee, and Senator Max Baucus (D-MT), the outgoing Chairman of the Finance Committee, have been two of the most vocal critics of a physician-only fix approach. Each of these Senators represents a rural state whose providers, they argue, have labored under inequitable Medicare payments for many years.
According to CMS staff, instead of a 4.4 percent cut in payments, the Bush Administration believes physicians were entitled to a 1.6 percent increase. The final rule notes that the differential (negative 4.4 percent versus positive 1.6 percent) is caused by flaws in the Sustainable Growth Rate Formula mandated by Congress. The net effect of the switch from a cut to an increase would be millions of additional dollars being spent on physician services over the next 10 years. The Bush Administration is expected to formally recommend the increase as part of the President’s budget submission which will be released in early February.
Health Care - A Growth Industry
According to a new report that will appear in the January/February issue of Health Affairs, spending on health care continues to rise. In 2001, health care expenditures, as a percent of Gross Domestic Product (GDP), rose .8% meaning that health care costs, as a percentage of our nation’s GDP, now exceeds 14%. This was the largest annual increase since 1991. Spending for physician services increased by 8.6 percent in 2001, totaling over $300 Billion.
The new data are included in the annual report: Trends in U.S. Health Care Spending, produced by the Centers for Medicare and Medicaid Services. Per Capita costs in 2001 exceeded $5,000 per person. This represented an 8.7% increase over per capita spending in 2000. According to the authors, public funding for health care grew at a faster rate than private sector growth reflecting increased Medicaid expenditures brought about by the 2000 recession.
The CMS Quarterly Provider Update
As part of the CMS Administrator Tom Scully's “Culture of Responsiveness Initiative”, CMS created the Quarterly Provider Update. This is a quarterly compilation of upcoming changes in regulations and policies. It is intended to provide the provider community with regular and predictable information on new developments in the Medicare and Medicaid programs. To review the January 2003 Quarterly Update, go to:
http://cms.hhs.gov/providerupdate/
Bunning and Smith to Finance
With Republicans taking a majority of seats in the United States Senate in the 108th Congress, a number of Senators will see their Committee assignments change. Most significantly, 4 new Republicans have been appointed to the Senate Finance Committee. It had previously been reported that Senators Bill Frist (R-TN) and Rick Santorum (R-PA) would get two of the Finance Committee slots. It has now been determined that the remaining two slots on the committee are going to Senator Jim Bunning (R-KY) and Senator Gordon Smith (R-OR). Neither Bunning nor Smith have been particularly active on Medicare or Medicaid issues in the past. Senator Smith was recently elected to a second 6 year term in November and Senator Bunning will be up for re-election to a second term in 2004. Prior to coming to the Senate, Senator Bunning was a Member of Congress and prior to that, a Hall of Fame professional baseball player. Senator Smith was a successful businessman and state legislator before being elected to the U.S. Senate in 1996.
For those of you who are baseball fans, you may remember Senator Bunning as a former major league pitcher for the Detroit Tigers and Philadelphia Phillies. During his baseball career, Senator Bunning was the first pitcher to win 100 games in both the American and National Leagues and was one of the few to have also pitched no-hitters in both Leagues.
Hill to Leave Program Integrity
Tim Hill, Director of the CMS Office of Program Integrity, has been promoted to Deputy Director of the CMS Office of Financial Management. Recent news reports have indicated that Dara Corrigan, an attorney in the HHS General Counsel’s office is slated to take Hill’s place. HBMA leadership have worked closely with Hill, and his predecessor Penny Thompson and is sorry to see him leave this important post. HBMA staff and leadership will reach out to the new Director of the Office of Program Integrity once that person is formally in place.
HBMA Meet with CMS HIPAA Staff
Representatives of the HBMA Board of Directors met recently with the Director and senior staff of the new CMS Office of HIPAA Standards. This meeting was a follow-up to a meeting in April, 2003, in which the HBMA representatives outlined concerns about the confusion over whether billing companies were business associates or clearinghouses for purposes of HIPAA compliance. HBMA believes that significant progress is being made in developing a definition of a clearinghouse that will be acceptable to the billing community. CMS and HBMA continue to work together on this important issue and we are hopeful that CMS will issue a definition in the near future. Although Jared Adair has only been on the job as Director of the HIPAA Standards office for a few months, it is clear that she has a strong vision for the role this office will play in both provider education and enforcement. As was noted by one CMS meeting participant, the differences between compliant and complaint are little in spelling but great in enforcement. CMS wants to emphasize efforts to ensure that providers are HIPAA compliant and thereby avoid unnecessary complaints.
HBMA is also working to arrange a site visit for CMS/HIPAA staff to a billing company so they can see first-hand how a billing company works and the process for handling claims.
CMS to hold HIPAA Call-In Forum
The Centers for Medicare & Medicaid Services (CMS) is convening the Sixth HIPAA Implementation Roundtable conference call. The Call will be held on Wednesday, January 15, 2003, from 2:00 3:30 PM EST. The call-in number is 18773816315. The conference identification number is 6632809.
According to a CMS release, the purpose of the call is to “exchange information regarding the implementation of the Administrative Simplification provisions of HIPAA.” This meeting will provide information on the following:
· Update on HIPAA regulations
· Enforcement Issues
· Medicare's HIPAA schedule
· HIPAA resources
In addition to the information CMS staff will present to the listeners, CMS would like to get feedback on the following topics:
· Concerns about HIPAA implementation
· Concerns about how our contractors are implementing transactions
· Concerns about readiness
· Suggestions for outreach
· Ideas to facilitate implementation
Please note that previous calls have attracted hundreds of participants and it is often difficult to get through to raise questions during the Q & A portion of the call. It is strongly recommended that you if you want to raise a question, you “get in line” early.
When you call in, you will be asked to identify yourself to the operator who will provide you with instructions regarding telephone procedures for participation.
If you are unable to join the call, arrangements have been made for an Encore Feature Service. This service will provide you with a recorded playback of the entire session. This feature will be available for up to 72 hours after the session. The toll free number is 18006421687. The operator will ask you to key-in the ID number, 6632809. You will then be able to hear the conference call.
Program Memos Issued by CMS
The following are Program Memos issued by CMS from December 1 through December 31st. These issuances are official agency transmittals used for communicating reminder items, request for action or information of a one time only, nonrecurring nature. To obtain a link to any of these documents, go to:
http://www.cms.gov/manuals/memos/comm_date_dsc.asp
Policy Number / Description / Effective DateA02129 / 2003 Update of the Hospital Outpatient Prospective Payment System (OPPS) / 1/6/2003
AB02184 / Provider Notification of Denials Based on Local Medical Review Policy (LMRP) / N/A
A02128 / Revision to 42CFR 405.371 Suspension, Offset and Recoupment of Medicare Payments to Providers and Suppliers of Services / 1/1/2003
AB02185 / Deletion of Q codes and Reactivation of CPT codes for Hepatitis B Vaccine / N/A
AB02178 / Clarification of the Comprehensive Error Rate Testing (CERT) Program Contractor Resolution Process (CCRP) / 12/27/2002
AB02179 / Complaint Screening / 12/27/2002
AB02180 / Coverage and Billing for Home Prothrombin Time International Normalized Ratio (INR) Monitoring for Anticoagulation Management / 12/27/2002