On the Regulatory Radar Screen

CMS final rule on Medicaid Drug Rebate program that requires State Medicaid programs to use National Drug Codes for Medicaid outpatient services

Published July 17, 2007; Effective Jan. 1, 2007. 

HRSA proposed rule with changes to the 340B program’s contract pharmacy service guidelines

Published Jan. 12, 2007; Effective upon release of final rule

HRSA proposed rule on clarifications to the definition of “patient” for the 340B drug rebate program

Published Jan. 12, 2007; Effective upon release of final rule

CMS proposed rule to make revisions to current rules governing Medicaid provider taxes. 

Published March 23, 2007 

CMS proposed rule to eliminate federal funding of Medicaid GME

Published May 23; Final Rule is subject to the one-year moratorium and cannot be issued before May 29, 2008

CMS final rule changing how states raise Medicaid matching funds through Intergovernmental transfers, certified public expenditures and upper payment limits

Published May 29; One-year moratorium on implementation through May 29, 2008

CMS final rule on outpatient PPS and ASC changes for CY 2008

Published Nov. 27; Effective Jan. 1, 2008

CMS final rule of physician fee schedule for CY 2008

Published Nov. 27; Effective Jan. 1, 2008

IRS changes to Form 990 for tax-exempt organizations

Released Dec. 20: New Form 990 and most schedules effective tax year 2008; most of new schedule H effective for tax year 2009

CMS proposed rule on long-term care hospital PPS for RY 2009

Expected Jan.; Effective July 1

National rollout of Medicare Recovery Audit Contractor program

Expected Implementation April

CMS proposed rule on inpatient rehabilitation PPS for FY 2008

Expected April/May; Effective Oct. 1

CMS proposed rule on skilled nursing facility PPS for  FY 2008

Expected April/May; Effective Oct. 1

CMS proposed rule on inpatient PPS changes for FY 2008

Expected April/May; Effective Oct. 1

CMS final rule on long term care hospital PPS for RY 2009

Expected May; Effective July 1

HOT TOPIC

HOT TOPIC

Medicare recovery audit contractor program expands in April.

Hospitals in 15 states this April will join those in California, Florida, New York, South Carolina and Massachusetts to participate in the Centers for Medicare & Medicaid Services' (CMS) recovery audit contractor (RAC) program. Beginning in April, RACs can review Medicare claims dating back to Oct. 1, 2007, to identify improper payments. RACs are paid on a contingency fee basis to collect improper payments. CMS must have RACs operating in all 50 states by 2010. The AHA is advising hospitals to begin preparing immediately by reviewing claims, medical records and documentation procedures and performing a self-audit. The AHA also suggests identifying a RAC team and educating them on the RAC process. The AHA plans to introduce early this year its own data-collection effort to track the impact of the RAC program on hospitals. It will survey hospitals on the number of medical records requested; claims reviewed, denied and appealed; and the number of denials overturned on appeal. For more information, click here.

Yellow - March 2008
Greeb - October 2008
Blue - January 2009 or Later

Hospitals must submit “present on admission” information.

As of Jan. 1, the Centers for Medicare and Medicaid Services requires hospitals participating in the Medicare inpatient prospective payment system (PPS) to submit “present on admission” (POA) information for all primary and secondary diagnoses on all claims. The agency has indicated it will accept all claims and provide feedback on reporting errors. However, beginning April 1, claims with incorrect POA reporting will be returned to the hospital, and for discharges on or after Oct. 1, hospitals will not receive payment for eight secondary diagnoses if they are not POA.

The eight conditions are: object left in during surgery; air embolism; blood incompatibility; catheter-associated urinary tract infections; pressure ulcers; vascular catheter associated infections; mediastinitis after coronary artery bypass graft; and hospital-acquired injuries including fractures, dislocations, intracranial injury, crushing injury and burns. When these conditions are not POA, their presence will keep the patient from being assigned to a higher-paying diagnosis related group (DRG). Conditions that develop during an outpatient encounter, including emergency department, observation or outpatient surgery, are considered to be POA.

The POA requirement, part of the fiscal year 2008 Medicare PPS final rule, carries out a provision of the 2005 Deficit Reduction Act that called for an adjustment in Medicare DRG payment for certain “health care acquired conditions” - an illness or condition acquired during hospitalization and was not present on the patient's admission.

For more information on the program, including affected hospitals and the reporting of POA information, visit http://www.cms.hhs.gov/HospitalAcqCond/.