... The Centers for Medicare and Medicaid Services has released instructions on calculating reasonable charges for claims for splints, casts, dialysis supplies, and certain intraocular lenses furnished in CY07. The payment limit for splints and casts, based on the 2006 limits, increased by 4.3 percent, the percentage change in the consumer price index for all urban consumers for the 12-month period ending June 30, 2006.
Payment continues to be made on a reasonable-charge basis for splints, casts, dialysis supplies, dialysis equipment, and intraocular lenses. For intraocular lenses, payment is made on a reasonable-charge basis only for lenses implanted in a physician's office. For splints and casts, the Q-codes are to be used when supplies are indicated for cast and splint purposes. Carriers will compute 2007 customary and prevailing charges for the services using actual charge data from July 1, 2005, through June 30, 2006. (Transmittal 1118)
... CMS has revised the Medicare Benefits Policy Manual regarding the three-day qualifying hospital stay requirement under the skilled nursing facility coverage policy. According to the transmittal, the fourth paragraph of section 20.1 of the manual instructions has been revised to clarify the type of hospital in which a qualifying stay may take place for purposes of SNF coverage. Specifically, the three-day hospital stay does not have to be in a hospital with which the SNF has a transfer agreement. However, the hospital must be a Medicare participating hospital or an institution that meets the condition of participation for an emergency services hospital. (Transmittal 57)
... CMS has clarified definitions and instructions related to outpatient therapy caps. According to the transmittal, contractors are required, at the request of the Medicare Part B beneficiary, or a person acting on that individual's behalf, to grant an exception to the therapy cap under certain circumstances. Claims for services above the cap for which an exception is not granted will be denied, and the beneficiary will be held liable. Contractors are also required to grant an exception to the therapy cap by approving additional therapy treatment days that are deemed medically necessary based on documentation submitted by the provider in 2006. A related provider education article is available on the MedLearn Matters area of the CMS web site. (Transmittal 60)
... Effective Jan. 1, 2008, a claim for an ambulance service furnished by a supplier within the United States must be filed with the carrier having jurisdiction for the point of pickup. CMS clarified that where the ambulance is garaged is not determinative of the claims-filing jurisdiction. Rather, such jurisdiction is determined by the location where the beneficiary was loaded into the ambulance. According to CMS, where the POP is outside of the United States, the claim for an ambulance service furnished by a supplier must be filed in accordance with Chapter 1, section 10.1.4.1, of the claims processing manual (Internet-only manual). (Transmittal 1100)
... During the stage 2 national provider identifier transition period of Oct. 1, 2006, through May 22, 2007, Medicare is recommending that providers send in both NPIs and legacy provider numbers. However, Medicare will accept claims having only NPIs (as well as those having only legacy provider numbers) during this period. (For institutional paper claims sent to fiscal intermediaries/AB MACs, an NPI will not be accepted by Medicare until the implementation of the UB-04 on May 23, 2007.) As noted in previous announcements by the agency and our contractors, CMS plans to begin testing the new software that has been developed to use the NPI in the existing Medicare fee-for-service claims processing systems. Providers have until May 23, 2007, before they are required to submit claims with only an NPI. (Transmittal 249)
... Section 1881(b) of the Social Security Act, as amended by section 623 of the Medicare Modernization Act, directed the secretary to make a number of revisions to the composite rate payment system, as well as payment for separately billable drugs furnished by end-stage renal disease facilities. For CY07, CMS did not propose any significant changes to composite rate payment methodology, but CMS did make the following updates. The first is an update to the drug add-on adjustment to the composite rate; the second is an update to the wage index and transition.
Section 623 of the MMA established the drug add-on adjustment to the composite payment rate to account for the difference between payment amounts for separately billable drugs under pre-MMA payments and the new payment methodology established under that section of the statute. The current add-on adjustment is 14.5 percent and includes a 1.4 percent update for 2006. For CY07, the drug add-on adjustment to the composite payment rate is 0.5 percent. As a result, the drug add-on adjustment to the composite payment rate for 2007 will increase from 14.5 percent to 15.1 percent (1.145 x 1.005). Also, there are no policy changes to how CMS currently pays for separately billed ESRD drugs. Therefore, for 2007, payment for separately billable drugs furnished by ESRD facilities will continue at ASP +6 percent.
The second is an update to the wage index adjustments to reflect the latest hospital wage data, including a budget neutrality adjustment to the wage index for CY07. CY07 is the second year of the four-year transition period. Consistent with the transition blends, CMS is implementing a 50/50 blend between an ESRD facility's MSA-based composite rate and its CY07 CBSA-based rate reflecting its revised wage index values. Also, for CY07, CMS is reducing the wage index floor from 0.85 to 0.80. After applying a budget neutrality adjustment of 1.052818, the wage index floor is 0.8423. (Transmittal 61)
... The skilled nursing facility consolidated billing edits in the common working file will be updated to bypass those hospital emergency department-related services spanning multiple service dates,
CMS has specified. Currently, the CWF rejects services related to the ED encounter performed on subsequent service dates because the line item date of services for those services does not match the LIDOS reported under the 045x ED revenue code. To bypass ED encounter services that span more than one service date, hospitals must identify those services by appending a modifier ET (emergency services) to those line items. (Transmittal 1109)
HFMA staff review CMS notices regularly for transmittals that affect healthcare financial managers, and post links to those transmittals on HFMA's web site. For links to these and other key transmittals, bookmark HFMA's Regulatory Updates (www.hfma.org/news/reg).
CMS/Premier Hospital Quality Incentive Program Results by Clinical Area (Oct. 1, 2003-Sept. 30, 2004) Average Composite Total Year 1 Quality Quality Score Incentive Payment per Case First quarter Last quarter composite quality composite quality score (Q4-03) score (Q4-03) Acute Myocardial Infarction (49 hospitals) 87.4% 90.8% Coronary Artery Bypass Graft (27 hospitals) 84.9% 89.7% Heart Failure (52 hospitals) 64.6% 74.2% Community Acquired Pneumonia (52 hospitals) 69.4% 79.2% Hip/Knee Replacement (43 hospitals) 84.9% 90.1% Note: Composite quality score measures overall quality performance within each clinical area. Source: DGA Partners analysis of the Centers for Medicare and Medicaid Services/Premier Hospital Quality Incentive Demonstration Project: Project Overview and Findings from Year One (April 13, 2006). Note: Table made from bar graph.

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