Tools

As an integral part of our RHC Boot Camp Seminars we have developed a series of notebooks and CDs filled with RHC information. These notebooks are available for purchase at any time. Each notebook is current as of January 2005 and is filled with outlines, forms, slide presentations, policies & procedures and other related information.

Click here to go to the RHC Update Workbook Order Form

This workbook & CD includes copies of the slide presentations, Outline of recent changes in Cost Reporting, Billing and Certification, Quality Improvement

policies & procedures, HIPAA Security & Privacy policies and procedures, New Cost Reporting Forms (January 2005 Update) from CMS, The Workbook is approximately 350 pages. The CD is a comprehensive Rural Health Clinic resource which includes updated versions of CMS Online Manuals, RHC/FQHC Billing manual, The Guide to Medicare Preventive Services published January 2005, How to Start a Rural Health Clinic published April, 2004, Annual Evaluation Template, the recently updated HPSA shortage area listings, 855 preparation software, Web pages and Web links, RHC Courier Newsletters, RHC Code of Regulations, and Provider Reimbursement Manual. The Workbook was updated in February, 2005 with information from Trailblazer Health Enterprises, LLC.

This workbook is from our Cost Reporting Workshops

and is filled with information on preparing the Medicare Cost Report. It includes PowerPoint presentations, checklists, model workpapers, new Cost Report forms from CMS (updated Jan. 2005), instructions, and a review tool to determine accuracy of your reimbursement. A CD is included which contains Cost Reporting information and a software program to complete the Cost Report. This is not the same notebook we send to our Cost Report clients to aid in organizing and accumulating information to prepare the Cost Report. The Cost Report Boot Camp Seminar Notebook is 275 pages and comes with a CD ($125). The RHC Cost Report Workpapers Notebook, with 12 tabs for organization of Cost Report data, has 150 pages and does not include a CD($100).

This notebook & CD includes copies of the slide presentatio

ns from RHC Intermediaries on Billing, Medicare Program Transmittals, Billing and Compliance Checklists, tables with Medicare Information summarized regarding RHCs, Med-Learn articles from CMS, CMS Publications on Billing including the new Preventive Health Services Book and Frequently Asked Questions on Billing including how to bill for injections, surgeries, and preventive services. The new instructions on UB-92 Billing and Rural Health Clinic Billing effective April 1, 2005 are included. The workbook is approximately 350 pages.

CMS Offers free consulting on Electronic Medical Records for small and rural physician practices

The Centers for Medicare and Medicaid Services (CMS) is now offering free consulting services for small and rural physician practices regarding the implementation of electronic medical records called DOC-IT. This project is designed to improve outcomes for patients with chronic illnesses by promoting the adoption of Electronic Health Records (EHR) systems and Health Information Technology (HIT). It is reported that President Bush would like to see all physician offices have electronic medical records within the next 10 years and this is the first step in helping small rural physician practices access the potential for conversion to an electronic medical record. We have included a link to a document from one of the CMS contractors in Indiana who can direct you to resources in your local area.

To view the program transmittal from CMS regarding the new published RHC maximum rate of $70.78; follow the following hyperlink.

Medicare now requires that a Rural Health Clinic include a Medicaid Remittance Advice in the Cost Report Workpapers; if the clinic is claiming a Medicare/Medicaid crossover bad debt. This is effective for the 12/31/2004 fiscal year end. To See the flash report from Riverbend communicating this change; please follow the hyperlink below:

News from the Annual meeting of the National Association of Rural Health Clinics in Washington, D.C. in October, 2004

Mark R. Lynn of Healthcare Business Specialists attended the National Association of Rural Health Clinics meeting in Washington, DC on October 28-30, 2004. This Newsletter is designed to update our cost report, RHC startup, Quality Improvement, and Annual Evaluation clients regarding the changes to the Medicare program as presented in the conference.

Some of the changes are very significant regarding the implementation of the 12/24/2003 Final Regulations regarding RHCs that was issued last year. Those rules have been rescinded due to some technical problems with the release of the regulations. (They were released over 3 years after the proposed regulations were distributed which is prohibited in provisions of the Medicare Modernization Act of 2003). This has a significant impact on all rural health clinics as a Quality Assessment and Improvement Plan is no longer required; and the annual evaluation of the RHC program is now accepted and expected by some RHC inspectors. This rescission will also stop the loss of RHC status due to loss of urban status and areas which have lost their medically underserved status.

While CMS has been giving this guidance orally for many months; the first written evidence of this action is provided in a letter dated August 12, 2004, from Thomas E. Hamilton to the State Survey Agency Directors (Reference S & C-04-42). The letter reads as follows"

"The Medicare Modernization Act (MMA) limits the authority of the Secretary to issue and enforce final rules that are issued more than three years after the proposed rule or interim final rule. • These instructions clarify the status of the December 24, 2003, Final Rule.

The Centers for Medicare & Medicaid Services (CMS) has not yet implemented the changes to the Rural Health Clinic regulations that were published on December 24, 2003, (68 FR 74792). Therefore, until further notice, do not take any action to disqualify currently approved Medicare participating Rural Health Clinics that no longer meet basic location requirements. Please note that initial Rural Health Clinic applicants must meet existing rural and shortage area location requirements. In addition, the Quality Assessment and Performance Improvement (QAPI) program requirements, cited at 42 CFR 491.11 in the December 24 publication, are not yet mandatory. However, any Rural Health Clinic that has implemented the QAPI program as specified should be considered to be in compliance with the existing Program Evaluation requirements at that site.

This is great news for rural health clinics faced with loss of RHC status; however, this is not the last of these regulations. David Wargo of CMS indicated that CMS plans to reissue the regulations in the beginning of 2005 as a proposed regulation and then accept comments and prepare a final regulation in the next 12 to 18 months. RHCs should be updating their annual evaluations to comply with the current regulation or go ahead and establish a Quality Improvement and Process Improvement System that is in compliance with the 12/24/2003 regulations. Because of the impact of this action we have prepared some RHC seminars related to this and other reimbursement matters in Las Vegas and Kansas City this December.

As hard as it to believe; it is time to get ready to prepare the Medicare and Medicaid cost reports again. We wanted remind our clients about some of the data that is required to complete the Medicare cost report and some things that you can do now to increase your Medicare reimbursement rate. Here is a listing of the things to do before December 31, 2004 that could help your reimbursement.

On or around December 31, 2004 empty your bank account by paying all your bills and paying additional money as compensation to the owners. This will help you increase your Medicare cost per visit and decrease your corporate or individual taxes as well. Please note that in 2004 some IRS regulations and enforcement actions relate to the declaration of year-end bonuses by physicians. You should talk to your tax accountant; before paying any year-end bonuses to ensure that the bonus is not considered a dividend under IRS rules.

In you next corporate meeting declare a bonus for any excess funds collected in the first 75 days of 2005. This will help you document any bonus that may need to be paid to physician owners during this period. The Medicare rules for corporations are bonuses to owners must be paid within 75 days of year-end.

Prepare a CPT Frequency Report with all CPT codes listed for all payers by provider. We need an individual report for each physician, nurse practitioner, and physician assistant. This is extremely important for sole proprietors and partners; because, Riverbend has clarified that the value of physician compensation can only be claimed for the visits that the physician is able to document that services were actually rendered by the physician. This could have a dramatic impact on clinics that have claimed the physician compensation allowance for total visits in prior cost reports.

Write off any Medicare Bad Debts before year-end. Proposed Medicare rules published; but not finalized, will reduce Medicare bad debt reimbursement to 70% of actual cost over the next three years. Since the bad rules are not final as of this writing; it is in your best interest to go back to the time you were first a rural health clinic and write off any unpaid Medicare deductibles for rural health clinic services. You should review the Medicare bad debt regulations closely to determine that you have met the guidelines. It is imperative that you write the account off your accounting records by the 12/31/2004 deadline or you probably face reduced reimbursement in the future. You should begin working on your Medicare bad debt listing in Microsoft Excel as soon as possible due to the difficulty in obtaining adequate information to obtain reimbursement.

We are working on the 2004 Cost Report Workpaper Notebooks this month and will mail them in early December for our clients to accumulate the information to prepare the cost report. If you are preparing your own cost report; please be aware that there is a new Flash report on the Riverbend website related to preparation of the cost report and you should refer to this before submitting the cost report.

Because of the many changes to the cost reporting process this year; we are offering a seminar on cost reporting in December 2004. The two locations are Las Vegas and Kansas City. Please see the end of the newsletter for complete information related to the seminars.

This will be the first cost reporting season were electronic filing of RHC cost reports will be required. RHC cost reports filed for the period ending 12/31/2004 or after will have to be filed electronically beginning with the May 2005 cost report submissions. We have obtained software to complete the electronic exchange of information with Medicare and this should not be any problem for clients of Healthcare Business Specialists. We will simply add a computer disk to your cost report submission that you mail to Medicare. The same signature pages and signatures will be required at first by Medicare.

The procedures for filing will be revised and streamlined by Medicare over time and the amount paper filed with Medicare will eventually decrease. Just not this year. We will prepare the usual paper cost report submission, Workpaper file and 339 Questionnaire for Medicare. The Riverbend Cost Report personnel indicated that if they could have the influenza/pnuemococal logs and the Medicare Bad Debt listing in Microsoft Excel format; it would speed the processing of your cost report. This is not required; but, would help Medicare to quickly process your cost report. Riverbend does have free software on their website to prepare the cost report and prepare the electronic file. Just go to Riverbendgba.com and look in the Provider section (Audit and Reimbursement). We have included the actual hyperlink to the software below:

Click on a link to open the file, or to begin the download procedure. (If you have trouble initiating the download by clicking on the link, then right-click the link and choose Save Target As, Save File, Save Link As, etc.) The software must be decompressed, since it currently in zipped format.

The subject which has generated the most questions in recent weeks is related to the shortage of influenza shots and how it will affect the Medicare cost report. Unfortunately; we do not have any magic bullet answers on this one; except, the only cost report impact is that You will not have as large of a settlement at year-end as you have had in the past. Medicare cost report settlements typically are made up of three elements—rate settlement, bad debt settlement, and influenza and pneumococcal costs; with influenza and pneumococcal being the largest percentage of the settlement.

Influenza Mist is not considered a flu shot and should not be logged or included in your Influenza invoice total.

Medicare will allow more as a reasonable cost this year due to the high cost of influenza vaccine this year; but, be reasonable in purchasing the vaccine. Outrageous prices should be avoided and may not be allowable if the cost is unreasonable.

If your rural health clinic receives free injections from the local health department; go ahead and log the shots for the Medicare Cost Report. The cost report will account for the time spent by the nurses giving the shots and you will receive additional reimbursement on the cost report settlement. Also find out the cost of the shots; because under Medicare reimbursement rules, this cost can be claimed as an allowable cost.

On November 3, 2004, CMS announced the Physician Fee Schedule for 2005 which includes a 3.1% increase in the Medicare Economic Index

The 3.1% increase in the Medicare Economic Index (MEI) translates into 3.1% increase in the maximum allowable cost per visit for rural health clinics in 2005. An integral part of receiving the correct reimbursement on the cost report is to have the proper Medicare maximum allowable cost per visit in the cost report. The table has the maximum allowable cost from 2001 through 2005. Please note that in 2003 there are two different maximum c0st per visits. One for the period 1/1/2003 to 2/28/2003 of $66.46 and for the period 3/1/2003 through 12/31/2003 the maximum rate is $66.72. The reason for the two different caps was Congress was late in announcing the 2003 Part B fee schedule due to a last minute adjustment to correct the rate.

With the announcement of the 3.1% increase in the Medicare Economic Index for 2005; we can update our physician compensation tables to include 2005. Table 1 and Table 2 are to be used to compute allowable physician compensation for physician owners in rural health clinics. According to Section 902.1 of the CMS Cost Reporting manual; “The allowance of compensation for services of sole proprietors and partners is the amount determined to be the reasonable value of the services rendered regardless of whether there is any actual distribution of the profits of the business.” We use these tables to compute the allowable compensation for physician owners when preparing RHC cost reports.

Guideline for Reasonableness of Physician Owners Salary at Rural Health Clinics (Time)

This table can be used to determine the allowable compensation for physician administrative time in an RHC. In 1996, the Medicare Intermediary converted to a per visit method of computing allowable physician compensation; however, it does not account for administrative time that a physician owner may provide in the operation of a medical practice. The purpose of this table is to compute the allowable physician compensation related to that administrative time.

Guideline for Reasonableness of Physician Owners Salary at Rural Health Clinics (Visits)

In 1996 the Medicare RHC intermediary converted to a per visit method of computing allowable physician compensation. The purpose of this table is to determine the allowable cost per visit to be multiplied by the number of encounters that the physician/provider owner provided during the fiscal year.

[1] The 3.0% increase represents a 2.6% increase and a .4% increase for a total of 3.0% for the annual update. The table illustrates the increase over the prior year.

[2] The Salary is based upon 2,080 hours for a full time equivalent (FTE).

[3] Medicare Economic Index (MEI) is the % increase in the RHC Cost Cap annually.

[4] Cap represents the Medicare maximum allowable cost per visit for RHCs.

We have included excerpts of the press release from CMS related to the Physician fee schedule which includes information related to the Physician Scarcity Bonus payments and HPSA bonus payments.

“The Centers for Medicare & Medicaid Services (CMS) today issued Medicare’s final rule for physician payment for 2005, with new benefits and higher payments for preventive services including a “Welcome to Medicare Physical” and increased payment rates to physicians. The expanded benefits and increased payments result from the Medicare Modernization Act of 2003 (MMA) and are included in the 2005 Physician Fee Schedule rule, which will become effective January 1.

“This rule follows through on our commitment to make Medicare a prevention-oriented program,” said HHS Secretary Tommy G. Thompson. “At the same time, we are also making sure that Medicare pays accurately for drugs and other services that physicians provide. As a result of the new law, Medicare beneficiaries will receive higher quality care and value for their premium dollar.”

The Physician Fee Schedule sets rates for how Medicare pays more than 875,000 physicians and other health care professionals. In 2005, CMS projects that aggregate spending under the fee schedule will increase 4 percent to $55.3 billion, up from $53.1 billion in 2004. The spending increase is due in part to an MMA provision that increased physician payment rates by 1.5 percent, a move that negated a previous law’s planned cut of payment rates by 3.3 percent for 2005.

In addition, the final rule implements a new “Welcome to Medicare Physical” for all new beneficiaries. This exam gives physicians the opportunity to make an overall assessment of a patient’s health, and provide counseling on nutrition and other steps to stay healthy. Medicare also provides new coverage for screening for cardiovascular disease and for diabetes.

“Too many beneficiaries haven’t used services that make it possible to detect and treat illnesses before they lead to serious health problems and avoidable health care costs,” said CMS Administrator Mark B. McClellan, M.D., Ph.D. “Under the new law, we’ve modernized Medicare to include preventive benefits and appropriate payments for these services, and we intend to close the prevention gap for seniors.”

CMS has made two changes to the proposed payment provisions for the physical to ensure that beneficiaries get the maximum value from this service. Physicians can bill and be paid separately for the screening electrocardiogram, in addition to the payment for the physical. The rule also lets a physician bill for a more extensive office visit when performed at the same time as the physical, as long as the services are medically necessary.

The final rule also dramatically increases payments for vaccinations and other types of injections, reflecting Medicare’s rapid action on recommendations from the American Medical Association’s Drug Administration Workgroup to assure appropriate payment for all drug administration services. For example, payments for administering the influenza vaccine will rise from $8 to $18. Physicians can also be paid for injections and vaccinations, even when performed on the same day as other Medicare-covered services. Medicare currently does not allow payment for injections provided on the same day as other Medicare services.

Other provisions designed to expand beneficiary access to high-quality care include:

The final rule also enhances other physician payments. In addition to the 1.5 percent increase in physician payments,

Medicare will also offer a 5 percent quarterly incentive payment to doctors practicing in “physician scarcity areas.” Those areas are listed on the CMS website at www.cms.hhs.gov/providers/bonuspayment.

We have downloaded the Excel file with a listing of Zip Codes eligible for the 5% bonus. RHCs will not receive this bonus in addition to RHC reimbursement; however, they will receive the bonus on eligible services billed to Medicare Part B.

In 2005, Medicare providers will not have to include a modifier (QB or QU) to claim the 10% bonus for providing services in a geographic, HPSA. Again, RHCs will not receive this 10% bonus in addition to RHC reimbursement; however, they will receive the bonus on eligible services billed to Medicare Part B. The following is a link to the HPSA database which will indicate whether or not your clinic is eligible for the additional reimbursement:

In addition, we have included a link to the Medically Underserved Area database.

Also, CMS will pay physicians who use telecommunications technology to provide monthly management services for rural beneficiaries who are on dialysis. As a result, CMS expects that rural beneficiaries with end stage renal disease will get better support for high-quality care.

The final rule will be published in the November 15, 2004 Federal Register and become effective January 1, 2005.

MEDICARE ANNOUNCES PAYMENT RATES AND POLICY CHANGES FOR HOSPITAL OUTPATIENT SERVICES

On November 3, 2004 CMS announces effective January 1, 2005 Medicare beneficiaries will have greater access to preventive benefits, quicker access to new technologies and lower copayments for hospital outpatient services under a final rule announced today by the Centers for Medicare & Medicaid Services (CMS).

For hospitals, the final rule provides for a 3.3 percent inflation update in payment rates for outpatient services. The inflation update, together with other policies contained in the final Outpatient Prospective Payment System (OPPS) rule, will increase projected Medicare payments to hospitals for outpatient services to $24.6 billion compared to projected payments of $23.1 billion in 2004.

“The new rule makes it possible for people with Medicare coverage to obtain quality preventive and treatment services in hospital outpatient departments,” said CMS Administrator Mark B. McClellan, M.D., Ph.D. “The rule also will make it easier and faster for beneficiaries to receive state of the art treatment.”

The final rule implements provisions required by the Medicare Modernization Act of 2003 (MMA) for preventive services in hospital outpatient departments. These include the “Welcome to Medicare Physical” for new beneficiaries, which will provide baseline information to the physician on the patient’s health status, allow for early detection and treatment of diseases, and provide an opportunity to refer the patient to other Medicare-covered services. When this examination is provided in an outpatient department, Medicare will pay the hospital about $78 for the use of the facility. The fee does not include payment for the physician’s professional services, which will be separately paid under the Medicare Physician Fee Schedule (MPFS).

The final rule also significantly increases payments for diagnostic mammograms by removing them from payment under the OPPS, as required by the MMA. Like screening mammograms performed in hospital outpatient departments, diagnostic mammograms will be paid under the MPFS, resulting in increases of nearly 40 percent over current OPPS rates for traditional mammograms, and about 60 percent for digital diagnostic mammograms.

In addition to the new physical, the rule increases payment rates to hospitals for screening examinations that Medicare already covers. The final payment increases are as follows:

“The new modernized Medicare helps beneficiaries get access to benefits that help prevent illnesses. That additional access will help close the prevention gap for seniors,” McClellan said.

The rule will be published in the November 15 Federal Register. Comments will be accepted regarding new codes and their APC assignment during the 60-day period following publication. For more information, visit the CMS website at:

Section 410 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA, P.L. 108-173) has amended the law to specify that when a SNF’s Part A resident receives the services of a physician (or another type of practitioner that the law identifies as being excluded from SNF consolidated billing) from an RHC, those services would not become subject to consolidated billing rules merely by virtue of being furnished under the auspices of the RHC.

In effect, the amendment enables RHCs to retain their separate identity as excluded “practitioner” services. As such, these RHC services remain separately billable to the Medicare Part A intermediary (Riverbend, Trailblazer, etc.) when furnished to an SNF resident during a covered Part A stay. The MMA specifies that this provision becomes effective with services furnished on or after January 1, 2005.

To review the Medlearn article on skilled nursing home visits click on the following link:

http://www.cms.hhs.gov/medlearn/matters/mmarticles/2004/SE0431.pdf

RHCs must discontinue the use of Revenue Code 910

Historically, CORFs, RHCs, and FQHCs have been required to use revenue code 0910 as the basis for applying the Outpatient Mental Health Treatment Limitation to their claims when billing for psychiatric/psychological services. Likewise, hospital outpatient departments, CMHCs, and CAHs billing under the Outpatient Partial Hospitalization Program have also been required to use this revenue code.

However, the National Uniform Billing Committee (NUBC) has approved the restructuring/renaming of the 090X and 091X revenue code series for psychiatric and psychological services; as part of this restructuring, it has designated revenue code 0910 as “Reserved for National Use.” Thus, the code is unavailable for use. You can no longer use Revenue code 0910 and you must use 0900 in its place effective October 1, 2004. This includes provider-initiated adjustments.

Specifically, RHCs must use revenue code 0900 to report psychiatric/ psychological treatment and services that are subject to the outpatient mental health treatment limitation just as revenue code 0910 was used in the past. The Medlearn article can be found at the following hyperlink:

http://www.cms.hhs.gov/medlearn/matters/mmarticles/2004/MM3194.pdf

Clarification of "Incident to" regulations by CMS

In September, 2004 CMS published an article on "incident to" which explains what "incident to" billing is and answers some questions regarding laboratory services, flu shots, and anti-coagulation monitoring.

http://www.cms.hhs.gov/medlearn/matters/mmarticles/2004/SE0441.pdf

Tools & Resources for Rural Health Clinics

RHC Tools & Resources

The following links will take you directly to a listing of certification, Quality Improvement, Billing, and Cost Reporting Resources for Rural Health Clinics.

Click here to go to the RHC Update Workbook Order Form

MEDICARE ANNOUNCES PAYMENT RATES AND POLICY CHANGES FOR HOSPITAL OUTPATIENT SERVICES