Experts prepare for Medicare PPS
With a scheduled Jan. 1, 1999, launch date looming for the hospital-based Medicare prospective payment system (PPS), Medicare officials are busy calculating costs and devising payment rates.
Similar work is ongoing in revamping the ambulatory surgery center (ASC) fee list, which has slipped behind schedule. Officials at the Health Care Financing Administration (HCFA) in Baltimore had expected to unveil a new ASC list this year to be effective Jan. 1, 1998. But they now tentatively predict a mid-1998 launch date. Details of the new ASC list will be explained in a Federal Register notification scheduled by this December.
Is there enough time for providers to gear up? Providers are likely to be allowed to continue submitting claims on the HCFA 1500 form for the hospital portion for some time beyond the 1999 starting date.
Change will be gradual
Regardless of the system eventually adopted, hospital claims will probably be accepted by Medicare carriers in the conventional manner until providers get sufficiently acquainted with the new payment methodology. By then, software vendors should have adapted their products to conform to new specifications, according to HCFA.
ASCs will be given claims processing instructions in future months.
In the meantime, what do industry insiders think of the new PPS? Here’s a sampling:
Deborah Williams, senior associate director for policy development with the American Hospital Association in Washington, DC:
"The balanced budget act took a lot of money out of the system. [Facilities] will have to become more efficient. But it’s really important for HCFA to adopt a simple and consistent fee schedule."
William Kelly, MBA, MPH, executive vice president, CHPS, a prospective payment consulting firm in Albany, NY:
"[Prospective payment] is going to land squarely on the shoulders of medical records. But it’s also going to be an opportunity for providers to clean up their data and hone their knowledge of CPT coding if they’re going to survive financially."
James Matthews, policy analyst, Prospective Payment Assessment Commission, a health care PPS think tank in Washington, DC:
"The government may try to project utilization for groups of [outpatient] services and cap those volumes through payment limits based on annual patient volumes. That could be one way HCFA will manage future utilization and lower costs under the PPS."
Tracy D. Warner, director of policy and issues development, Iowa Association of Hospitals and Health Systems in Des Moine, IA:
"There are several unanswered questions regarding the HCFA APGs. We’re just not sure how it will ultimately affect payments. Another concern is if hospitals continue to submit claims the conventional way, they won’t be able to understand which services they should offer or how to plan financially."
Darrell A. Fisk, executive director, Association of Western Endoscopy Centers in Federal Way, WA:
"I doubt that endoscopy facilities, which are so specialized, are prepared for the change. HCFA has gone a long way to complicate a system that wasn’t perfect but workable. People are unhappy with the reimbursement levels, not the system."
Nancy Kessler, MS, executive director, El Camino Surgery Center in Mountainview, CA:
"It’s safe to assume that most ASCs have the computer systems to accommodate the new system. It won’t be a big leap for anyone. The big challenge will be how a facility will fare in managing its costs under the new rates."
Robin L. Rojka, CPAM, director of patient financial services, Southwest General Hospital in Middleburg, OH:
"Providers who lack the payment software will have the time to adapt to the new system. The tough part will be having the ability early on to make proper payment projections without any in-house claims processing experience."
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