HBS Update - March, 2005

The March, 2005 Newsletter is included in the News link or download it here from the following hyperlink:   

HBS Update March, 2005

The navigation features of the website have changed and now the Tools section includes resources for Billing, Cost Reporting, and Certification. 

Mark Lynn spoke at the National Association of Rural Health Clinics meeting in San Antonio, Texas on March 17th and 18^th.  To download the presentations follow the appropriate hyperlink:

Cost reporting           Cost Report Presentation on March 17, 2005

Annual evaluations:  Annual Evaluation Presentation

                                                    Medicare Secondary consent form

                                                    RHC Policy Procedure Template

                                                    Annual Evaluation Report Template

CMS releases guidance on Preventive Services in January, 2005

In January, 2005, CMS released guidance for billing preventive services in rural health clinics.  This 168 page manual is a great resource for rural health clinics with questions regarding billing preventive services including the "Welcome to Medicare" Physical (IPPE) , Pap Smears, Pelvic Exams, Mammography, Cancer Screenings, Diabetes screening tests, and many other preventive services.    If you would like to download the book please click on the following hyperlink:

                      http://www.cms.hhs.gov/medlearn/psguid.pdf

This publication is also included in our RHC Update Seminar CD in Tab 7 - Billing and will be discussed in our Update Seminars this spring.

"Welcome to Medicare" Physical (IPPE)

"The Medicare Prescription Drug Improvement and Modernization Act (MMA) of 2003 expanded Medicare’s coverage of preventive services. Central to the Centers for Medicare & Medicaid Services' (CMS') initiative to move Medicare toward a more prevention-oriented program is the new initial preventive physical examination (IPPE) also referred to as the "Welcome to Medicare" Physical Examination. All beneficiaries enrolled in Medicare Part B with effective dates that begin on or after January 1, 2005 will be covered for the IPPE benefit. This one-time benefit must be received by the beneficiary within the first six months of Medicare Part B coverage. The goal of the IPPE, which also includes an electrocardiogram (EKG) are health promotion and disease detection and includes education, counseling, and referral to screening and preventive services also covered under Medicare Part B."

The specific guidance regarding RHC billing is as follows:

• RHCs and FQHCs should follow normal billing procedures for RHC/FQHC services.

• Encounters with more than one health professional and multiple encounters with the same health professionals that take place on the same day and at the same location constitutes a single visit.

• The technical component of the EKG performed at an independent RHC/FQHC is billed to the carrier using the practitioner ID and billing instructions.

• The technical component of the EKG performed at a provider-based RHC/FQHC is billed on the applicable TOB (Table 3) and submitted to the FI using the base provider number and billing instructions.

• RHCs and FQHCs use revenue code 052X.

          Effective April 1, 2005, RHCs and FQHCs will no longer have to report additional line items when billing for preventive and screening services on TOBs 71x. Except for telehealth originating site facility fees reported using revenue code 0780, all charges for RHC services must be reported on the revenue code line for the encounter, 052x, or 0900.

Some reminders regarding preventive services.  The professional components of Pap smears and Pelvic exams are not subject to medical necessity edits (only frequency) according to guidance from Riverbend Government Benefits Administrator.  An example of a preventive service that may not meet medical necessity guidelines is Bone Density Scans.  The Technical Component would always be billable to the Part B Carrier/Base (Mother/Hospital) Intermediary if frequency guidelines are meet; however, Medicare may not consider it medically necessary for a physician to have a face-to-face encounter with a patient and deny the professional component if billed to the Intermediary.  Physicians do not normally perform Bone Density scans as they can easily be conducted by an X-Ray Technician. 

CMS issues Billing Instructions for Completion of Form CMS-1450 (UB-92)

Effective April 1, 2005 on November 12th & 19th, 2004

CMS issued billing instructions for completion of the UB-92 on November 12, 2004. and effective April 1, 2005.  This document provides updated information regarding the proper completion of the 86 Form Locators on the UB-92 Form.  If you would like to download the document; just click on the following hyperlink:

http://www.cms.hhs.gov/manuals/pm_trans/R368CP.pdf

The CMS description of this document is as follows: "(Rev.368, Issued: 11-12-04, Effective: 04-01-05, Implementation: 04-04-05) This section contains Medicare requirements for use of codes maintained by the National Uniform Billing Committee that are needed in completion of the Form CMS-1450 and compliant X12N 837 version 4010A1 institutional claims. Instructions for completion are the same for inpatient and outpatient claims unless otherwise noted. If required data is omitted, the FI obtains it from the provider or other sources and maintains it on its history record. The FI need not search paper files to annotate missing data unless it does not have an electronic history record. It need not obtain data that is not needed to process the claim. Data elements in the CMS uniform electronic billing specifications are consistent with the Form CMS-1450 data set to the extent that one processing system can handle both. Definitions are identical. In some situations, the electronic record contains more characters than the corresponding item on the form because of constraints on the form size not applicable to the electronic record."

In addition on  November 19, 2004, CMS issued 31 additional pages of billing instructions for rural health clinics.  This document can be accessed using the following link:

RHC UB-92 Billing Instructions issued November 19, 2004

These instructions indicate that, effective April 1, 2005, RHCs will no longer have to report additional line items when RHCs bill Medicare for preventive and screening services for RHCs and except for telehealth originating site facility fees reported using revenue code 0780, all charges for RHC/FQHC services must be reported on the revenue code line for the encounter, 052x, or 0900.

The general billing instructions in chapters 9, 18 and 32 of Pub.100-04, Medicare Claims Processing Manual are being updated to provide more detailed instructions overall.   CMS is eliminating the additional line item reporting for preventive services in RHCs. Currently, RHCs are required to report a second line item when certain preventive services are billed. Currently, the second revenue code line for reporting preventive services may contain charges. Except for the telehealth originating site facility fee reported using revenue code 0780, all charges must now be reported on the revenue code line for the encounter, 052x or 0900.

Only three types of services are billed by Rural Health Clinics on the UB-92:

• Professional or primary services not subject to the psychiatric limit bundled into line item(s) using  revenue code 052x;

•  Services subject to the psychiatric limit under revenue code 0900; and

•  Telehealth originating site facility fees under revenue code 0780.

NOTE: Telehealth is not an RHC/FQHC service. As such, the originating site facility fee is billed in addition to the appropriate encounter billed in revenue code 052x or 0900.

Values for the fourth digit of Revenue code 052x are:

•  0520 = Freestanding Clinic – to be used by all FQHCs;

•  0521 = Rural Health Clinic – to be used by RHCs clinics; and

•  0522 = Rural Health Home – to be used by RHCs in home settings.

•  0780 = Telehealth originating site facility fees

•  0900 = Behavioral Health Treatments/Services, General Classification”) is used for services subject to the psychiatric limit on claims with dates of service on or after October 16, 2003, that are received on and after October 1, 2004

There does appear to be some discrepancies in the two versions of the instructions.  In the past, many RHCs have used revenue code 520 as the revenue code for nursing home visits.  The instructions appear to indicate that revenue code 520 effective April 1, 2005 is reserved for FQHCs.  I asked for clarification for this point on the February 23, 2005 Open Door call with CMS and they did indicate that effective April 1, 2005, Revenue Code 520 should only be used by FQHCs.  Nursing Home visits should be billed using revenue code 522 after April 1, 2005. 

Swing Beds are Billable as RHC visits effective January 1, 2005

In the February 23, 2005 CMS Rural Open Door session, David Wargo indicated that effective January 1, 2005, RHCs can bill swing beds as a rural health clinic covered service.  Previously, CMS had considered a swing bed as being licensed as a hospital bed and would not allow a rural health clinic to bill this service as a RHC service. (We billed the Part B Carrier/(Base/Mother/Hospital Intermediary) and was paid fee-for-service for swing bed services.

For information on skilled nursing go to the following link:

http://www.cms.hhs.gov/manuals/pm_trans/R390CP.pdf

New RHC Cost Report Forms issued in January, 2005

In January, 2005, CMS issued new cost reporting forms and instructions for Independent Rural Health Clinics This transmittal adds new material in the form of electronic cost reporting specifications to Chapter 29, Rural Health Clinic (RHC) Form CMS-222-92 to be completed by RHCs. This transmittal also includes instructional revisions to insure consistency with the electronic reporting specifications. The following is a list of the revised cost reporting forms:        

• Worksheet S, Parts I & II -  Revised entire worksheet format to facilitate electronic cost reporting.

• Worksheet S, Part III  - Added worksheet to accommodate organizations filing under consolidated cost reporting option.

• Worksheet A - Added cost center codes to facilitate electronic cost reporting.

To download the instructions and the Cost Report Forms in an Excel Spreadsheet; please click on the following hyperlinks:

http://www.cms.hhs.gov/manuals/pm_trans/R7P229.pdf

To download the new cost report forms in Microsoft Excel (Filename R7P229.zip) click here.

http://cms.hhs.gov/manuals/pm_trans/R7P229.zip

RHC Cost Reports should not be submitted to the Intermediary until these changes are reflected in the electronic cost report and filing system that you are using in order to comply with new electronic filing requirements.  Also, you be sure to use the new forms to complete the cost report.

HIPAA Security Compliance Due April 21, 2005

Are your Ready? Have you Started?

RHCs have a big deadline coming up for HIPAA compliance.  HIPAA Security measures are to implemented by April 21, 2005.  Unfortunately, many providers have had a Chicken Little attitude towards these new regulations.  Providers are thinking "Every one said the sky was falling when we had Y2K, HIPAA - Privacy,  HIPAA -Transactions, and nothing happened - Why should security be any different?" I am not sure if HIPAA Security will be any different; however, RHCs should take steps to comply with these regulations.

One of the best, easiest, and cheapest ways to comply is by going to the SharpWorkGroup website and downloading tools, policies and procedures, and presentations regarding HIPAA Security. The SharpWorkGroup Security work group goal is to inform providers of the HIPAA Security Rule. With your help they want to provide the HIPAA Security help you need with a reasonable efforts to understand the rules and become compliant!

CMS Offers free consulting on Electronic Medical Records for small and rural physician practices (January, 2005)

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.

                        Free Consulting Advise from CMS on Electronic Medical Records

RHC Cost Report Rates Increased for 2005

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

http://www.cms.hhs.gov/manuals/pm_trans/R390CP.pdf

RHC Cost Report News   -  New Flash Report on Bad Debts

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:

Click here to go to a November, 2004 Flash Report from Medicare on Bad Debts

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

Click here for the HBS Update Newsletter for November 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. 

Final Regulations regarding QAPI Suspended

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.

Effective Date: This guidance is effective immediately. "

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. 

Preparing for the 2004 Medicare Cost Report

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.

Flash 04-05F - Cost Report Submission

Blank RHC Cost Report (Form CMS-222-92)

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.

Electronic Filing of Cost Reports

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:

Cost Report Software

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.

Cost Report Software (4MB zip file)
Instructions (15K PDF file)

Click here for information from Riverbend Government Benefits Administrator on cost reporting 

 Influenza Shot Update

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.

Updated Physician Compensation Tables

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.

  Table 1

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.