August 1998 Bulletin


HCFA to test 500 commercial coding edits

Starting October 1, the Health Care Financing Administration (HCFA) will add about 500 commercial edits (or mutually exclusive code pairs designed to detect inappropriate coding) to the National Correct Coding Initiative (NCCI). It's a test of using commercial edits, which is sometimes called a "black box" because the edits will not be available to the public. The NCCI has more than 100,000 edit pairs which are open to physician review and comment. HCFA will give carriers manuals that will contain the rationale for the 500 code combinations to explain to providers who call to discuss denials. Carriers also must track denials made because of the commercial edits to determine how much money they save Medicare. In 1995, a GAO report said hundreds of millions of dollars per year could be saved if HCFA would use commercially-available software for the Medicare program. HCFA conducted a pilot test of commercial codes in Iowa to determine how the claims are normally paid with how they would have been paid using a vendor's software.

'Centers' project start-up delayed until summer 1999

The Health Care Financing Administration doesn't expect the "participating centers of excellence" demonstration project for hip and knee replacement procedures to get underway before next summer. Joan Bandzwdek, co-manager of the project, said the names of the institutions invited to negotiate for participation in the project may be announced by the end of this summer. She said the delay was caused by the Balance Budget Act which created additional demands on HCFA, forcing some staff to be redirected to new projects.

House subcommittee recommends 8.2% boost in NIAMS budget

As a result of the efforts of the Academy's Committee on Research and the Academy's Washington office, the House Subcommittee on Labor, Health and Human Services and Education recommended an 8.2 percent increase, or $296,668,000, for the National Institute of Arthritis and Musculoskeletal and Skin Diseases in fiscal year 1999. The subcommittee also identified women's sports injuries and childhood musculoskeletal conditions as high priority areas.

HCFA to delay updates to 'debug' computer system

Scheduled Medicare reimbursement updates for hospitals on Oct. 1, 1999, and physicians on Jan. 1, 2000, will be delayed while Health Care Financing Administration officials overhaul the computer system. HCFA will adjust payments later in 2000 at a rate that will yield a full year's update by the end of the budget year. HCFA can't change the computer system to update payment rates while simultaneously debugging the computers so they won't read year 2000 as year 1900.

Most physicians not ready for year 2000 problem

Most solo and small group practices are not aware of their exposure to the year 2000 problem, says Lynne Dunbrack, senior health consultant, GartnerGroup, Stamford, Conn. "The time horizon to failure is very short," she warns. Physicians need software with year 2000 capability to prevent problems with billing, scheduling and other services because their computers will recognize year 2000 as 1900. If the physician is using an old version of software, for instance, release 5.0, Dunbrack says he/she may not be able to leapfrog to release 9.0 with year 2000 capability. The physician may have to upgrade in steps. Physicians may find their original vendor is too busy, gone out of business or has been acquired by a larger vendor. Physicians could face a hardware problem, too. If the practice has a DOS-based system, it will need to upgrade to a Windows-based system. Yet another headache: interfacing with the payer or supplier that has not upgraded.

IG advisory said to pose minimal risk of investigation

The final rule revising and clarifying procedures for requesting the Department of Health and Human Services Inspector General to give an advisory opinion on whether a proposed health care business arrangement violates the Medicare and Medicaid anti-kickback statute states there is an unavoidable risk of the potential applicability of a criminal statute to an existing arrangement. However, the rule said the risk is minimal because most requests will be about arrangements that are not yet operative. Failure to obtain a favorable advisory opinion does not mean that an arrangement is illegal; it means only that the arrangement may pose some risk of fraud and abuse, the IG said.

Device market growing, but prices under pressure

The orthopaedic and musculoskeletal surgery device market will experience growth increases in the next five years, according to Medical Data International (MDI). A growing active population and an increase in women competing in physical sporting activities are fueling growth, although cost pressures are creating challenges for these markets. MDI estimates 3.7 million musculoskeletal surgical procedures will be performed by the year 2002. The arthroscopic surgery device market is forecast to increase from $313.2 million in 1997 to $399.7 million by year 2002, an annual growth rate of 5 percent. Counteracting the trend is price pressure from reimbursement agencies.

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