AHA fights outpatient PPS implementation date
Hospitals should be prepared for system this month
Implementation time for the outpatient prospective payment system (PPS) is here. Are you prepared? You might have more time to get ready if the American Hospital Association (AHA) in Chicago has its way.
The AHA is fighting the Health Care Financing Administration (HCFA) in Baltimore for a delay in the implementation of the final rule.
"This new payment system will significantly change how hospitals are reimbursed for outpatient services under Medicare," wrote Rick Pollack, AHA executive vice president, in a letter to association members. "But while HCFA took more than a year and a half to issue its final regulation, hospitals and health systems will have less than 90 days to make sweeping system changes."
In a letter to HCFA Administrator Nancy-Ann DeParle, the AHA expressed "grave concern" that the agency’s schedule is too short to implement the new system accurately. "Medicare beneficiaries could receive conflicting financial statements from hospitals and the intermediaries, which could confuse them and also harm the reputations of hospitals in their communities."
On May 23, HCFA revealed its contingency plans for the Medicare outpatient PPS, according to the AHA. If claims are processed under outpatient PPS using the new systems more than three weeks after July 1, HCFA will make accelerated payments to providers requesting them. Payments would be 70% of the estimated Medicare payment and would be made biweekly. Adjustments would be made once outpatient PPS becomes operational, and other payers would be told of the Medicare payments for each claim, allowing them to pay providers additional amounts. Similar payments would be made up to eight weeks after July 1 if individual providers can’t submit bills compatible with outpatient PPS.
Even with the efforts of the AHA to delay implementation of the outpatient PPS, hospitals should be ready for the regulations to go into effect this month.
"Hospitals that have prepared as far as looking at their coding accuracy, impact analysis, and flow processes for the billing cycle are in a much better position than those that have to do all that plus look at their data and information systems from the perspective of the new rule," says Sue Prophet, RHIA, CCS. She is the director for coding policy and compliance at the Chicago-based American Health Information Management Association (AHIMA).
The final rule requires hospitals to refine their implementation plan. "They need to fine-tune and understand exactly what goes into the APCs [ambulatory payment classifications] and some of the things that have been added, such as new drugs that have pass-through payments," Prophet says.
Darice Grzybowski, RHIA, national manager of HIM industry relations with 3M HIS in Salt Lake City, offers two points of advice for preparation for the outpatient PPS:
1. Ensure you have appropriate software.
"You have to make sure you have software that groups your patients into APCs. You have to have software that allows you to calculate what you are going to get reimbursed," she says. "It’s one thing to group them, but another thing to project your reimbursement. You have to have the ability to store that information and generate reports on it so you can analyze the data such as profit and loss."
2. Make sure your processes are reviewed and modified to be able to accommodate the work flow changes necessary to support APCs.
This allows the health information management (HIM) department to review both the charge-generated HCFA common procedure coding system codes as well as the ICD and common procedure terminology codes. "If you are not looking at them together, how are you going to see the big picture?" Grzybowski asks. "Another example would be the ability to do a final APC grouping after all charges are entered, even late charges, which may not be available at the time of HIM coding. You need to look at those type of process issues and your interfaces to your data back to your systems."
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