55 Ferncroft Road Suite 201
Danvers, MA 01923

(866) 630-CPSC Toll-free
(978) 774-0540 Facsimile

www.CPSCmsa.com

55 Ferncroft Road Suite 404
Danvers, MA 01923

(866) 630-CPSC Toll-free
(978) 774-0540 Facsimile

www.CPSCmsa.com

In response to the Deficit Reduction Act (DRA) of 2005 (S. 1932), Medicare is instituting sweeping reforms to position itself as an active buyer of healthcare services for its beneficiaries, rather than a passive payer of claims, with a focus on quality and efficiency. Therefore, Medicare will no longer pay hospitals for what it considers to be care for preventable secondary diagnoses.
In section 5001, Hospital Quality Improvement, some key requirements in the DRA include:

• The Secretary of Health and Human Services (HHS) is to develop a plan to implement a value-based program for Inpatient Prospective Payment System (IPPS) payments to acute care hospitals beginning with FY 2009.

• Beginning with discharges on October 1, 2007, hospitals are to report any secondary diagnosis codes the patient has at the time of admission.

• By October 1, 2007, the HHS secretary is to identify diagnosis codes associated with at least 2 high cost and/or high volume conditions. Selected diagnosis codes are for those for which the DRG assignment has a higher payment weight when the diagnosis is present as a secondary diagnosis. These diagnosis codes represent conditions, including certain hospital acquired infections, which could reasonably have been prevented with the application of evidence-based guidelines.

• Starting with discharges on October 1, 2008, the DRG assigned to a discharge will be the DRG that does not result in higher payments based on the presence of these secondary diagnosis codes unless the diagnosis code was present at the time of the patient’s admission.

• The list of selected diagnoses may be revised “from time to time”, as long as there are at least two conditions selected for the discharges occurring during any fiscal year.\

• The list of diagnosis codes and DRGs is not subject to judicial review.

Based on these mandates, starting October 1, 2008, Medicare will no longer pay hospitals for the costs of treating certain conditions that are considered to be preventable, or not present at the time of admission.

The hospitals are expected to absorb the costs for the additional treatment required for these preventable conditions and complications. They are prohibited from passing these costs on to the consumer. Many private payers are also considering instituting similar policies. For instance, in the Newark Star Ledger article, dated August 13, 2007, it was noted that HealthPartners of Minnesota will no longer pay for so-called “never events” or clear medical mistakes.

Some repercussions could include unnecessary testing on admission to “prove” whether or not a condition was present on admission. For example, more tests would need to be performed to determine whether or not an infection, such as a urinary tract infection, was already present on admission, rather than acquired while the patient was hospitalized.

An article in the NY Times on August 19, 2007 noted that some hospital executives were worried that they would have to absorb the costs of this additional testing because Medicare generally pays a flat amount for each case. There is also concern that some complications will still occur, even with the best of care.

In an article in the Newark Star Ledger on August 13, 2007, David Knowlton, the chairman of the NJ Health Care Quality Institute, was quoted as saying that “Medicare officials must be reasonable, so that victims of medical mistakes are not left without coverage to treat their infections or botched surgery”. Lisa McGiffert of Consumers Union, based in Washington, DC, was quoted as saying that “CMS will be on the lookout for hospitals that game the system by falsifying codes to increase Medicare payments.”
It should be noted that these changes only address the cost of inpatient care for hospital acquired complications. The cost of inpatient care is to be covered by the “offending” hospital. The cost of follow up care for these secondary diagnoses, including nursing home admissions, rehabilitation, outpatient services, and physician follow up, was not addressed. Perhaps this will be a future addition to the Medicare mandates. This is most definitely an issue that should be closely followed and has major implications in the future of healthcare reimbursement and quality assurance.

Written by Jane D. Heron, RN, BSN, MBA, CLNC Senior Medical Analyst.

Jane has more than 25 years experience in various nursing and business areas. Her clinical experience includes managing a Cardiac Rehabilitation program, being the Trauma Coordinator for a large trauma center in Missouri, and developing program policies, procedures, and quality assurance. She has also worked in medical/surgical areas, Cardiac Cath Lab, and the Emergency Department. She earned her BSN from Columbia University School of Nursing, and MBA from Southwest Missouri State University. She is a Certified Legal Nurse Consultant and is on the Board of Directors for the New Jersey American Association of Legal Nurse Consultants.

California Workers’ Comp Forum

Robert Lewis, Chief Legal Officer for Crowe Paradis Services Corporation, will be speaking at the California Workers Comp Forum on October 17th -19th. It will be held at the Hyatt Regency in Huntington Beach, California. Rob will be speaking about “Medicare Secondary Payer Compliance: Best Practices for Full Compliance at the Right Price.”
Some of the topics covered include:

• Five questions you should ask your MSA vendor or in-house gatekeeper

• If it costs the same, why not have a lawyer and a nurse on every file?

• The MSP requires more than just an MSA: Conditional payments and lien negotiations

• The “Zero Allocation” opportunity and disputed, denied, and other claims with cost-mitigation potential

• Using custodial accounts and professional administration to ensure compliance and lower costs

• Strategies to facilitate settlement and clarify all MSP issues post-settlement

If you would like more information on this conference, please visit http://www.cawcforum.com or email Rob Lewis at rlewis@croweparadis.com.

Other important dates:

- The NAMSAP Annual Conference will be held on November 2, 2007 at the Embassy Suites in San Diego, California. If you would like more information on this conference, please visit www.namsap.org.

- The National Workers Comp and Disability conference will be held on November 6 - 8, 2007 at McCormick Place in Chicago, Illinois. For more information on this conference, please visit www.wcconference.com.

- CPSC and Utilization Management made their first joint appearance at the Mississippi Self Insured Association’s Conference in Biloxi, MS the last week of September.

Would Your Company Like An In-House Training Sesssion?? If so, Please Contact rlewis@cpscmsa.com

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