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ACEP.org Legislative 911 Network September 8, 2000

September 8, 2000

WEEKLY UPDATE for September 8, 2000

LEGISLATIVE UPDATE
1) Overview
2) Patient Protections-the Battle Continues...
3) Medicare Prescription Drug Legislation (S. 3016)
4) Amendment Expanding and Opening the National Practitioner Database (H.R. 5122)
5) Child Passenger Protection Act of 2000 (S. 2070)
SPECIAL REGULATORY UPDATE
1) ACEP Meets with HCFA Regarding Medicaid Emergency Services Issues
2) HCFA Reports on OPPS Implementation
3) HCFA Issues Clarification Regarding OPPS EMTALA Provisions
4) HCFA Issues New Program Memorandum Regarding Audit Processes
5) HHS Issues Final Rule for Electronic Transactions in Health Care
6) HCFA Issues Proposed Medicare Physician Fee Schedule for 2001
7) OIG Solicits Input for Compliance Risk Guidance for the Ambulance Industry
8) HCFA Issues Regulation Implementing BBRA
9) HCFA to Train Physicians on Physician Encounter Data Collection
10) GAO Reports M+C Plans Overpaid by $5.2 Billion in 1998
11) HCFA Issues Guidelines on Medicaid Managed Care Fraud and Abuse
12) OIG Issues Report Regarding FFS Medicare Payments to Excluded Physicians
13) GAO Issues Report Regarding Medicare Fee Schedule Payments for Rural Ambulances
14) FDA Issues Final Guidance on Reuse of Single Use Devices
WELCOME TO THE 911 LEGISLATIVE NETWORK!

LEGISLATIVE UPDATE

1) Overview

Congress returned to Washington last week to finish an ambitious list of legislation before final adjournment which is slated for October 6. Partisan bickering and the looming elections suggest little will be accomplished during the next four weeks. The House and Senate have not completed action on most of the bills that fund government activities and programs. The White House has threatened to veto those appropriations bills that have made it to conference. Because House Republicans, in particular, are anxious to avoid a politically dangerous showdown with the White House that could lead to another government shutdown, it is likely they will agree to spending increases for many domestic programs. On health issues still to be settled, the House version of the Labor HHS bill allots $6.6 million for poison control centers, leaving trauma and emergency care without subsidy; while the Senate version denotes $20 million for poison control and $3 million for trauma and emergency care. Tax reform, prescription drug benefits for Medicare recipients and a patients' bill of rights will almost certainly be decided after the election when the 107th Congress convenes in January.

In the meantime, the dynamics of the Senate have changed following the death of Sen. Paul Coverdell (R-GA). The seat is temporarily filled by former Gov. Zell Miller (D-GA), a moderate Democrat, who will hold the position until the November elections. Sen. Miller makes the 50th vote for the Balanced Budget Act (BBA) and could allow VP Al Gore to cast the tie-breaking vote on the BBA. Sen. Coverdell's assignment to the Finance Committee is being filled by Sen. Larry Craig (R-ID), a friend of Sen. Majority Leader Trent Lott (R-MS), and a fiscal conservative. His appointment could make a difference in the outcome of the BBA "give back" bill.

We do expect a budget reconciliation bill to reach the President's desk this year. The Senate Finance Committee approved the session's second reconciliation bill measure this week in the Senate on a 19-0 vote. The bill focuses on retirement savings and other tax provisions are expected as negotiations continue. The House Ways & Means Committee has until September 13 to report its versions of the second and final reconciliation package. The Committee indicates that it will contain retirement incentives and earmarks for debt reduction from the anticipated surplus. Other bills such as the BBA "give back bill" or the "patients' bill of rights" may be attached to the reconciliation bill because it can not be filibustered in the Senate.

2) Patient Protections-the Battle Continues...

Congressional advocates of a patients' bill of rights continue to press for passage of a bill the President will sign. Rep. Charlie Norwood (R-GA) has been meeting with Speaker Dennis Hastert (R-IL) and others to develop a version of the House-passed Norwood-Dingell bill that would be acceptable to Senate Republicans. To date, discussions have failed to produce any tangible results. Many in Congress believe the bill's fate rests at the center of the calculation that weighs enactment of a bill against political gain if a bill is not passed. At the same time, opposition to a bill outside the halls of Congress has intensified.

On September 7, the American Association of Health Plans (AAHP) aired a new round of commercials designed to block congressional action on any patients' bill of rights. Their television ads suggest that this legislation would devastate HMOs and would lead to a flood of frivolous lawsuits. AAHP also launched a campaign to have 100,000 citizens contact their legislators to raise questions about the cost of the Norwood-Dingell bill.

PLEASE CALL YOUR LEGISLATORS-- KEEP UP THE HEAT!
Members of the 911 Network are urged to contact their Senators and Representatives to reiterate their support for the Norwood-Dingell bill and for the emergency services provisions in the bill. The message is: "A compromise between the House and Senate versions of a patients' bill of rights must contain emergency services provisions as written in the Norwood-Dingell bill. Please pass real patient protection legislation before the November 7 elections." Call Ann LaBelle with questions, at 800-320-0610, extension 3015.

3) Medicare Prescription Drug Legislation (S. 3016)

Senate Finance Committee Chair William Roth (R-DE) introduced a bill establishing an outpatient prescription drug assistance program for low-income Medicare beneficiaries and those beneficiaries with high drug costs on September 7. This bill would provide a short-term fix for the politically hot Medicare prescription drug issue. Through out the year, congressional Republicans have been divided on the details of how to provide a drug benefit. Now Senate Republicans and some House Republicans are supporting Roth's bill, which is a version of GOP nominee George W. Bush's plan to create state grants to help seniors buy drugs. Democrats say that this approach would exclude millions of middle class elderly who also need this help.

Costing $20 billion dollars over five years, the bill would provide immediate assistance to low income seniors. Republicans view this bill as an interim measure and hope to work on more comprehensive Medicare reform in the 107th Congress. In response, Senate Democrats vowed to pass a comprehensive bill that guarantees all seniors the same premiums and benefits.

4) Amendment Expanding and Opening the National Practitioner Database (H.R. 5122)

Rep. Tom Bliley (R-VA), Chairman of the House Commerce Committee, proposed legislation that would publicly disclose a national database of doctors and health professionals who have had legal or disciplinary action against them. Expanding the 10-year old National Practitioner Data Bank, the bill would also expand the system to report felonies and misdemeanors committed by doctors. The bill is expected to be marked up within the next two weeks and may be included in a reconciliation bill later this month. Many have suggested that this bill is Chairman Bliley's way of retaliating against the AMA for promoting the patients' bill of right and Rep. Tom Campbell's (R-CA) bill that gives physicians the right to bargain collectively with health plans.

5) Child Passenger Protection Act of 2000 (S. 2070)

Sponsored by Sen. Peter Fitzgerald (R-IL), the Child Passenger Protection Act is a bill that improves the safety standards for child restraints in motor vehicles. The bill is scheduled for mark up on September 20 and Senate leaders are optimistic for its passage by the end of the session. ACEP has supported this bill since its introduction.

REGULATORY UPDATE

1) ACEP Meets with HCFA Regarding Medicaid Emergency Services Issues

In early September, ACEP President Dr. Michael Rapp and Federal Affairs Director Michelle Fried, along with the Emergency Department Practice Management Association, met with HCFA's Director of Medicaid and State Operations and other senior HCFA officials regarding HCFA's Medicaid policies for emergency services. HCFA was eager to discuss practices that states, managed care organization, and PCCMs are utilizing that are not in compliance with the Balanced Budget Act of 1997. HCFA had reviewed the detailed information we presented in advance of the meeting, and expressed great interest in working with us to solve the problems that are occurring. We also discussed retroactivity of claims payment for claims that were denied in violation of the BBA and HCFA's policies related to coverage of emergency services in the Medicaid fee-for-service program. The meeting was very positive and HCFA committed to work with us on these issues. Please update Michelle on a continuing basis regarding experiences with Medicaid prudent layperson implementation in your state, including problems and "best practices." Michelle may be reached at mfried@acep.org.

2) HCFA Reports on OPPS Implementation

In late August, the Health Care Financing Administration reported that the majority of claims covered by the Medicare Outpatient Prospective Payment System (OPPS) are being processed correctly. Implementation of OPPS began on August 1, despite the fact that hospitals pushed for a delay until October 1. HCFA has informed its fiscal intermediaries that a contingency plan designed to pay claims in the event that HCFA's systems were not working properly would not be needed. HCFA noted, however, that due to the complexity of the OPPS system, some "glitches" were to be expected and have been found in the standard systems and Outpatient Code Editor (OCE). HCFA admitted that these problems are likely to result in claims processing errors. HCFA hopes all of the glitches will be addressed by October 1, 2000. A copy of the "Important Notice of Outpatient Prospective Payment System Implementation," is available on HCFA's web site at: http://www.hcfa.gov/whatsnew.

3) HCFA Issues Clarification Regarding OPPS EMTALA Provisions

On August 3, 2000, the Health Care Financing Administration issued an interim final rule clarifying issues related to the EMTALA provisions contained in the Medicare hospital outpatient prospective payment system regulation that was published in the Federal Register on April 7, 2000. One of ACEP's biggest concerns with the April 7 rule related a requirement to provide beneficiaries treated in a hospital outpatient department or hospital-based entity that is not on the main campus with an Advance Beneficiary Notice (ABN) prior to the delivery of services. ACEP argued that this requirement conflicted with the purposes of EMTALA and with previous guidance from the Office on Inspector General regarding EMTALA, and asked that HCFA revise the regulation to exempt services performed pursuant to EMTALA requirements. HCFA agreed with ACEP's comments and clarified that hospitals are not required to deliver ABNs before screening and stabilizing a patient with an emergency medical condition. The August 3 rule also clarified the requirement that staff in an off-campus department that is not usually staffed with physicians, RNs or LPNs contact emergency personnel at the main hospital campus before arranging an appropriate transfer to a medical facility other than the main hospital. HCFA stated in the August 3 rule that the contact with emergency personnel at the main hospital should not delay an appropriate transfer, and should be made either after or concurrently with the actions needed to arrange the transfer.

4) HCFA Issues New Program Memorandum Regarding Audit Processes

In early August, the Health Care Financing Administration issued a new program memorandum revising its prepayment and postpayment audit processes. Key provisions of the program memorandum include the following:

  • A carrier's decision to conduct medical review should be data driven.
  • Medical review should be no more extensive than is necessary to address the nature and extent of the identified problem (e.g. a small level of non-compliance does not merit a 100% prepay review).
  • Error Rate is important in deciding how to address problems.
  • Carriers should consider the past history of physicians' billing errors and their willingness to address the problems.
  • Carriers must consider the amount of the undercoding.
  • Physician education and feedback is essential to solve both individual physician or widespread (among region and/or specialty) billing problems. If the billing problem is widespread, the carrier must work with the specialty and state medical societies on educational efforts.
  • Carriers must provide comparative data to the physician about how the physician varies from other physicians in the same payment specialty area or locality.
  • Carriers must remove a physician from medical review as soon as possible when the physician demonstrates compliance with Medicare billing requirements.
  • Carriers must send written notification to all physicians when they are placed on medical review and removed from medical review.
  • The carrier must make a reasonable effort to accommodate a physician's request for a meeting.
  • If a carrier must contact a physician as a result of more than one problem, the carrier must ensure that its contacts are necessary, timely and appropriate, not redundant.
  • HCFA does not consider it an efficient use of medical review resources to deny claims that are routinely appealed and reversed. Therefore, carriers must consider the Administrative Law Judge reversal rate in deciding whether or not to implement medical review.

The program memorandum, "Medical Review Progressive Corrective Action," is effective October 1, 2000 and is available on HCFA's web site at: http://www.hcfa.gov/pubforms/transmit/memos/comm_date_dsc.htm.

5) HHS Issues Final Rule for Electronic Transactions in Health Care

In late August, the Department of Health and Human Services issued a final rule regarding industry standards for the electronic transmission of health information. The rule is one of several that HHS is required to promulgate pursuant to the administrative simplification provisions of the Health Insurance Portability and Accountability Act of 1996 (HIPAA). According to HHS, there are currently approximately 400 formats for electronic health care claims, making it difficult and expensive for providers and plans. Entities covered by the regulation, including health plans, health care clearinghouses, and providers who transmit administrative data in electronic form, will be required to comply with the regulation by October 2002. Small health plans will have to comply by October 2003. The new rule establishes the content and formats to be used in submitting claims and other administrative data electronically between health care entities.

Pursuant to HIPAA, the transactions that are required to use the new standards include:

  • health claims and equivalent encounter information
  • enrollment and disenrollment in a health plan
  • eligibility for a health plan
  • health care payment and remittance advice
  • health plan premium payments
  • health claim status
  • referral certification and authorization
  • coordination of benefits

HHS has posted "questions and answers" about the rule on its web page at: http://aspe.hhs.gov/admnsimp/faqtx.htm

6) HCFA Issues Proposed Medicare Physician Fee Schedule for 2001

In late July, the Health Care Financing Administration published a proposed rule in the Federal Register establishing the Medicare physician fee schedule for 2001. In 2001, the practice expense component of the fee schedule will be 25 percent charge-based and 75 percent resource-based. Regarding practice expense, HCFA recommended that the AMA include a question on the SMS survey about how many hours are spent providing uncompensated care. ACEP has been asking HCFA to recognize the uncompensated care costs related to EMTALA in the practice expense component of the physician fee schedule, and is pleased that HCFA continues to recognize the importance of the issue. However, HCFA's recommendation is not adequate since the AMA has stated that it will no longer be fielding the SMS survey. We will continue to work with HCFA to develop a solution to this problem. HCFA did make some refinements to the practice expense component of the fee schedule. Overall, these changes are not expected to have much of an effect on payment to emergency physicians.

In the proposed rule, HCFA stated that it is proposing to correct an inconsistency between the pricing of observation care codes and its policies regarding payment for hospital admissions and discharges on the same day. HCFA's proposed new policy would significantly reduce RVUs for certain observation care codes. On a positive note, HCFA is proposing to increase the work RVUs for critical care codes 99291 and 99292. These RVUs had been reduced last year.

7) OIG Solicits Input for Compliance Risk Guidance for the Ambulance Industry

On August 17, 2000, the Office of Inspector General published a notice in the Federal Register soliciting input and recommendations from interested parties as the OIG develops Compliance Risk Guidance for ambulance services providers. The notice stated that the ambulance industry has experienced a number of cases of ambulance provider and supplier fraud and abuse and that the industry expressed an interest in the guidance. The OIG is soliciting input regarding the most common fraud and abuse risk areas for the ambulance industry. The Compliance Risk Guidance will provide guidance on how to address the risk areas, prevent the occurrence of fraud and abuse, and develop corrective actions when problems are identified.

8) HCFA Issues Regulation Implementing BBRA

In early August, the Health Care Financing Administration issued an interim final rule to implement changes resulting from the Balanced Budget Refinement Act of 1999. The rule included changes regarding payments for indirect and direct graduate medical education. The rule contains details regarding how a hospital will compute the full-time equivalent cap for direct GME payments and the IME adjustment. The rule also provides for additional payment to teaching hospitals equal to the additional amount the hospitals would have been paid for FY 2000 if the IME adjustment formula for that year had been the same as for FY 1999.

9) HCFA to Train Physicians on Physician Encounter Data Collection

The Health Care Financing Administration is planning to hold a series of training sessions for physicians who work with managed care plans regarding requirements for submitting physician encounter data to Medicare+Choice organizations. The Balanced Budget Act of 1997 required HCFA to implement a risk adjustment payment methodology for payment to Medicare+Choice organizations that accounts for variations in payment based on health status of the organizations' enrollees. Beginning October 1, Medicare+Choice organizations must submit physician encounter data for services provided on or after October 1. The encounter data will include both diagnostic and procedure codes.

The training sessions are scheduled to take place: September 7 in Chicago, Illinois; September 13 in Tampa, Florida; and September 20 in San Diego, California. Other sessions may be scheduled at a later date. Additional information about the training sessions is available of HCFA's web site at: http://www.hcfa.gov/events/events.htm.

10) GAO Reports M+C Plans Overpaid by $5.2 Billion in 1998

In late August, the General Accounting Office reported that the Health Care Financing Administration overpaid Medicare+Choice plans by an estimated $5.2 billion in 1998. The report, "Medicare+Choice: Payments Exceed Cost of Fee-for-Service Benefits, Adding Billions to Spending," stated that HCFA paid $3.2 billion more on Medicare+Choice enrollees than it would have if the beneficiaries had been in the Medicare fee-for-service program. An additional $2 billion in excess payments resulted from a combination of spending forecast errors and payment provisions in the Balanced Budget Act of 1997. The report will be available on the GAO's web site at http://www.gao.gov/.

11) HCFA Issues Guidelines on Medicaid Managed Care Fraud and Abuse

HCFA recently released "Guidelines for Addressing Fraud and Abuse in Medicaid Managed Care." The purpose of the document is to provide ideas and guidelines to assist states and other stakeholders in preventing, identifying, investigating, reporting and prosecuting fraud and abuse in Medicaid managed care plans.

The guidelines address a wide variety of fraudulent and abuse practices in Medicaid managed care, including:

  • definitions and case examples of ongoing investigations and successful prosecutions of fraud and abuse in managed care versus fee-for-service systems,
  • roles of Medicaid purchasers and consumers in fraud and abuse,
  • utilization of electronic and other data to identify fraud and abuse,
  • key components of an effective managed care fraud and abuse program,
  • required and suggested reporting mechanisms at all levels, and
  • suggested fraud and abuse tools and provisions that can be used in a state's managed care system, including contracts and programs.

The document was developed by a work group, which included representatives from State Medicaid Agencies, Medicaid Fraud Control Units, and HCFA. The guidelines are available on HCFA's web site at: http://www.hcfa.gov/medicaid/fraudgd.pdf.

12) OIG Issues Report Regarding FFS Medicare Payments to Excluded Physicians

In late August, the Office of Inspector General issued a report, "Medicare Payments to OIG Excluded Physicians," which concluded that the "exclusion fee-for-service Medicare payments were made in 1997 to physicians who had been excluded from the Medicare program. The OIG determined that improper payments of only $35,800 were made to only 21 physicians who had been excluded from the Medicare program. The OIG reported that most of the improper payments were due to human error, but that some were alleged to be due to incomplete or faulty exclusion information. The report noted that HCFA is in the process of implementing reforms to try to improve the system. The report is available on the OIG's web site at http://www.hhs.gov/oig/oei/whatsnew.html.

13) GAO Issues Report Regarding Medicare Fee Schedule Payments for Rural Ambulances

In late July, the Government Accounting Office issued a report that recommended that the Health Care Financing Administration implement a payment adjuster for rural ambulances. HCFA is in the process of drafting a proposed rule to implement a Medicare ambulance fee schedule, based on the recommendations of a negotiated rulemaking committee. The report stated that once the ambulance fee schedule is implemented, it will be necessary for HCFA to make payment adjustments to ambulance providers who transport beneficiaries in low-population, isolated areas. The report is available on the GAO's web site at http://www.gao.gov/.

14) FDA Issues Final Guidance on Reuse of Single Use Devices

In early August, the Food and Drug Administration issued final guidance for industry and FDA staff regarding reprocessing and reusing "single-use" medical devices. The guidance, "Enforcement Priorities for Single-Use Devices Reprocessed by Third Parties and Hospitals," states that the FDA will regulate hospitals and third parties that reprocess single-use devices in the same manner in which the agency now regulates the original device manufacturers. Thus, these hospitals and third parties will be subject to pre-market notification and approval requirements, registration and listing of firms, submission of adverse event reports, manufacturing requirements, labeling requirements, and others. The guidance document is available on the FDA's web site at: http://www.fda.gov/cdrh/comp/guidance/1168.pdf.

WELCOME TO THE 911 LEGISLATIVE NETWORK!

Steve Fisher, MD (Rep. Patrick Kennedy, D-RI)
Don Hoechlin, MD (Rep. Ken Calvert, R-CA)
Kelly Larkin, MD (Rep. Ken Bentsen, D-TX)

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