September 2009

You are currently browsing the monthly archive for September 2009.

Labor Day Weekend Links

September 5, 2009 in Uncategorized | No comments

Tags:

Medicare Reimbursement Information V

September 4, 2009 in Medicaid/Medicare | 1 comment

Medicare reimburses providers based on the type of service they provide. In the Medicare claims data there are three types of procedure codes:

  • Current Procedural Terminology (CPT): CPT codes are designed by the American Medical Association. They describe medical, surgical, and diagnostic services and are designed to communicate uniform information about medical services and procedures among physicians, coders, patients, accreditation organizations, and payers for administrative, financial, and analytical purposes. The CPT codes are republished and updated annually by the AMA.
  • International Statistical Classification of Disease and Related Health Problems (ICD): “The ICD is used to provide a standard classification of diseases for the purpose of health records. The World Health Organization (WHO) assigns, publishes, and uses the ICD to classify diseases and to track mortality rates based on death certificates and other vital health records.”  Code lookup. The most recent version of the ICD classification is the tenth edition (i.e., ICD-10).
  • Healthcare Common Procedure Coding System (HCPCS): “The HCPCS is divided into two principal subsystems, referred to as level I and level II of the HCPCS. Level I of the HCPCS is comprised of CPT (Current Procedural Terminology), a numeric coding system maintained by the American Medical Association (AMA)… Level I of the HCPCS, the CPT codes, does not include codes needed to separately report medical items or services that are regularly billed by suppliers other than physicians…Level II of the HCPCS is a standardized coding system that is used primarily to identify products, supplies, and services not included in the CPT codes, such as ambulance services and durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) when used outside a physician’s office. Because Medicare and other insurers cover a variety of services, supplies, and equipment that are not identified by CPT codes, the level II HCPCS codes were established for submitting claims for these items.”

Also there are 7 types of Medicare claims. These are:

  • inpatient (IP),
  • outpatient (OP),
  • skilled nursing facility (SNF),
  • hospice (HS),
  • home health (HH),
  • Part B or carrier (PB), and
  • durable medical equipment (DME).

The first five claim types are deemed “institutional” claims and the last two are deemed “non-institutional.”

Tags: ,

A Lucidicus Health Wonk Review

September 3, 2009 in Carnivals | No comments

The latest edition of the Health Wonk Review is up at The Lucidicus Project.

Tags:

Medicare Reimbursement Information IV

September 3, 2009 in Medicaid/Medicare | No comments

The Medicare Reimbursement Series Continues. The sources of this information is MedPAC’s Payment Basics.

Clinical Laboratory Services:

  • Under Part B, Medicare covers medically diagnostic and monitoring laboratory services ordered by a physician.
  • Medicare does not cover routine screening tests except for cholesterol and blood lipid tests, fecal occult blood testing, Pap smear tests, prostate-specific antigen tests, and diabetes screening tests.
  • In 2007, Medicare payments for clinical lab services totaled $6.8 billion. Overall lab spending declined by 1 percent between 2006 and 2007 due to a drop in hospital-based lab spending. Medicare spending for lab services grew by an average of 9 percent per year between 1999 and 2006.
  • Medicare sets payment rates for more than 1,100 Healthcare Common Procedure Coding System (HCPCS) codes used in billing for laboratory services.
  • For new lab tests, CMS “crosswalks” to assign the test to a similar existing HCPCS. If the new lab test is dissimilar from all existing tests, CMS relies on a “gapfilling” method in which the carriers independently set rates for the first year of use.
  • There is no beneficiary copayment.

Durable Medical Equiment (DME)

  • Medicare spent about $8.6 billion on DME in fiscal year 2007. Medicare spending for oxygen and related supplies accounts for one-quarter of total DME expenditures.
  • Generally, current fees are an average of the allowed charges from 1986 and 1987, adjusted by the consumer price index for all urban consumers to account for inflation.  However, there are exceptions to this for pharmaceuticals associated with DME use, home oxygen, and customized equipment.
  • Each state has its own fee schedule to take into account regional cost variation.
  • A pilot program using competitive bidding method was found to decrease DME costs 17%-22%.  A competitive bidding process for DME was to be phased in nationwide, starting with 10 metropolitan statistical areas (MSAs) in 2008 and expanding to 80 MSAs by 2009.  However, this schedule may be delayed due to problems with bidding software and organizational issues.

Tags: ,

Pfizer to pay $2.3 billion in Medicare/Medicaid Fraud

September 2, 2009 in Pharmaceuticals | No comments

This past February, I wrote about the spread of physician learning concerning harmful side-effects of Cox-2 inhibitors, including Bextra.  Today, The New York Times reports that Pfizer has agreed to pay a $2.3 billion settlement with CMS over the company’s illegal promotion of its now-withdrawn painkiller, Bextra.

“Marketing fraud cases against pharmaceutical companies have become almost routine, with almost every major drug maker having been accused of giving kickbacks to doctors or shortchanging the Medicaid program on prices. Prosecutors said that they had become so alarmed by the growing criminality in the industry that they had begun increasing fines into the billions of dollars and would soon start charging doctors individually as well.”

Tags: , ,

Medicare Reimbursement Information III

September 2, 2009 in Medicaid/Medicare | No comments

Today, we will focus on hospital care outside of the traditional Inpatient hospital care setting. Again, this information is culled from MedPAC reports.

Outpatient Hospital Services

  • Outpatient hospital care, from injections to complex procedures, accounted for $19 billion of total Medicare spending in 2007
  • Originally, outpatient reimbursement was cost based and copayments amounted to about 50% of total payments. Now, Medicare uses the Outpatient prospective payment system (OPPS) and copyament rates have decreased to 28% of total payments. There are carve outs for three additional items that fall outside the OPPS system: i) pass-through payments for new technologies, ii) outlier payments for unusually costly services, and iii) hold-harmless payments for cancer and children’s hospitals and rural hospitals with 100 or fewer beds that are not sole community hospitals
  • Payments from Medicare to the hospital are based on the ambulatory payment classifications (APC). New technologies can be placed in a “new technology” classification for up to 3 years. Payments outside of the APC system include: CMS pays i) corneal tissue acquisition costs, ii) blood and blood products, and iii) many drugs.

Home Health Services

  • Beneficiaries of home health services receive visits from skilled professionals to provide the following services: skilled nursing care, physical, occupational, and speech therapy, medical social work, and home health aide services.
  • About 2.9 million beneficiaries used home health care in 2006. Medicare pays for home health care with both Part A and Part B funds; in 2006, total payments were $14.1 billion. Beneficiaries pay not copayments for these services.
  • Medicare pays home health agencies based on 60-day episodes. The exact value or cost of home health benefits is inherently difficult to define. Medicare uses one of 153 home health resource groups (HHRGs) to determine payment rates. The HHRGs are based on clinical (e.g., IV needed, wound present, ulcer present) functional (e.g., dressing, bathing, toileting needs) and the number of visits needed.
  • Outlier payments are available when costs exceed 167% of the base pay. Home health agencies receive 80% of the difference between the HHRG base rate and their reported cost.

Hospice Care

  • Hospice care is available for Medicare beneficiaries whose life expectancy is six months or less. However, by agreeing to hospice care, patients forego the right to curative treatment. Medicare will pay for medical care for illnesses that are unrelated to their terminal illness. Beneficiaries occasionally pay a $5 hospital copayment, but are largely protected form out-of-pocket expenses within the hospice setting.
  • Between 2000 and 2005, hospice use increased by 11% per year. In addition, as of December 2007, 51 percent of hospice agencies were for profit, compared to 27 percent in 2000. Medicare payment for hospice grew from $2.9 billion in 2000 to over $10 billion in 2007.
  • Benefits cover skilled nursing services, drugs, physical and occupational therapy, counseling and other services.
  • Hospice agencies receive a set daily rate for their services. The vast majority of hospice cases receive the routine home care (RHC) base payment, but five percent do receive higher daily rates for more complicated cases. This base payment is adjusted geographically to reflect wage differences between regions. Payments are also capped; total payments over total number of beneficiaries may not exceed $22,386.

Tags: ,

Medicare Reimbursement Information II

September 1, 2009 in Medicaid/Medicare | No comments

I will continue reviewing some Medicare reimbursement information as described in a variety of MedPAC reports.

Medicare Advantage

  • Medicare Advantage is a program where Medicare beneficiaries can receive private heath insurance, partially or fully funded by CMS.  The health insurance must provide coverage at least as generous as Medicare Parts A and B.
  • Private health plans bid to provide services to Medicare beneficiaries.  If a plan’s standard bid is above the benchmark, then the plan receives a base rate equal to the benchmark and the enrollees have to pay an additional premium that equals the difference between the bid and the benchmark. Ifa plan bid falls below the benchmark, the plan receives a base rate equal to its standard bid.
  • Medicare payments are also based on enrolled beneficiaries’ demographics and health risk characteristics. Medicare uses beneficiaries’ characteristics, such as age and prior health conditions, and a risk-adjustment model—the CMS–hierarchical condition category (CMS–HCC)—to develop a measure of their expected relative risk for covered Medicare spending.
  • Medicare Advantage Plans can be either local or regional.  Regional plans can be offered to any beneficiary of one of the 26 Medicare regions.   A region’s benchmark is a weighted average of the average county rate and the average plan bid.  The average plan bid is each plan’s bid weighted by each plan’s projected number of enrollees

PART D

  • Medicare Part D provides coverage for pharmaceutical expenses.
  • Overall, Medicare subsidizes premiums by about 75 percent and provides additional subsidies for beneficiaries who have low levels of income and assets.
  • The standard 2009 benefit includes: a $295 deductible; coverage for 75 percent of allowable drug expenses up to a benefit limit of $2,700; no coverage between $2700 and $6134, and about 5 percent coinsurance for drug spending above the catastrophic limit of $6154.
  • Individuals eligible for both Medicare and Medicaid with incomes up to 100 percent of poverty have no deductibles, nominal copays, and no coverage gap.
  • Medicare subsidies for Part D come in two forms: A direct, capitated payment to plans calculated as a share of the adjusted national average of plan bids, and individual reinsurance of 80 percent of drug spending above

Tags: , ,

Newer entries »