23. August 2012 · Comments Off · Categories: Health Law · Tags:

In its OPPS rule for 2013, CMS has asked for comments from hospitals as to whether there would be greater clarity “regarding patient status if there were more specific criteria for patient status in terms of how many hours a patient remains in a hosptial.”  In other words, would a “bright-line” test of, say, 24 hours determine whether someone is an inpatient under all circumstances? 

Clearly, the Recovery Auditors target “inpatient cases” becasue denials of inpatient status result in income for RACs. 

It is possible that a bright line test would result in a change of emphasis from review of the setting to review of the appropriatness of medical necessity.  Stay tuned – but comments are due September 4.

Awhile back I posted a short note regarding the Small Business Health Options Program (SHOP).  This is a plan under the healthcare reform law that creates options for small employers to offer employee health coverage under the new “State Insurance Exchanges” implemented under the Affordable Care Act (health care reform).

Well, this week, the U.S Department of Health and Human Services (HHS) (the federal agency that administers the Affordable Care Act-health care reform) announced a “final rule” covering those State Insurance Exchanges.  The final rule builds upon and incorporates two preliminary rules and a whopping 24,780 comments from the public.  The rule is fairly long, and it covers a variety of issues governing how state exchanges will be run.  I’m still digesting the thing.  Actually I have yet to finish the first course.  Regardless of where I am in this “buffet of delight,” I do offer some salient points:

  • According to HHS, states will have flexibility in designing how the state insurance exchanges will work.  That is, the state exchange in Vermont need not look exactly like the one in Tennessee.
  • The rule governs how the Exchanges will be established and operated; how health insurance plans can participate in the Exchanges; how individuals will be eligible to enroll in the Exchange health plans; and how small business employers will be eligible to participate in the SHOP.
  • For individual “consumers,” the rule states that there will be a stream-lined and “web-based system” for enrollment in qualified health plans through the Exchanges.  Each individual is supposed to be able to use the same application without the need to submit “multiple applications.”
  • On the tech side, the comments to the rule demonstrates a significant, though perhaps anticipated, emphasis on using existing “electronic data sources…to the maximum extent possible” in the Exchanges.  HHS appears to be pushing for the US and states to officially enter the 21st century.
  • The SHOP will begin in 2014.  SHOP is supposed to provide small employers with the ability to choose the level of coverage they will offer to their employees and choices for the employees of qualified health plans enrolled in the Exchanges.  Under SHOP, states will be able to set the size of their small group markets, as well as offer employees different levels of coverage through different participating plans.

Back to the meal, though I think I’ll be eating the leftovers for awhile.  Can you say “one thin mint?”

I’ll try to make this somewhat technical change in a proposed rule from the Centers for Medicare and Medicaid (CMS) as simple as possible.  The proposed rule will make a difference.  Here’s why:

Hospitals that serve a large number of uninsured patients – a “disproportionate share” of uninsured (or low-income) patients – may be entitled to receive  ”reimbursement” of the costs (or charges, but let’s not quibble here) of treating those patients because those patients cannot pay for those services.  The states administer this program by which hospitals receive these payments.  Now it intuitively makes sense that the amount of DSH payments hospitals receive should not exceed the total dollar amount of uncompensated care that hospitals provide.  In other words, under the system the uncompensated care provided should equal the “disproportionate share” payment received.

The problem, as always, is found in the definitions. Here, the issues are what exactly is “uncompensated care,” and of what it is composed?  Suppose someone with insurance but with many ailments and health problems comes to the hospital.  The patient’s insurance covers examinations, lab tests, and diagnostic screenings.  The patient is very sick, and all of the examinations reveal that she, indeed, needs a new liver, through an organ transplant.  But what happens if her insurance does not cover organ transplants?

Under the current rule, according to CMS, the definition of “uncompensated care” could be interpreted to exclude the costs of services provided to patients with some type of insurance where the patient’s insurance covered some, but not all, of the hospital services provided to that patient.  In short, if Hospital A has a patient with some insurance who requires services that the insurance doesn’t cover, Hospital A cannot treat the unpaid services as “uncompensated care” for purposes of receiving its “DSH” payment.   So, the hospital above would not receive any payment for the liver transplant itself.  Ouch.

Put very simply, in order to receive the “DSH” payments, hospitals must provide the states each year with information on the dollar amount of care provided to “uninsured individuals.”  The rule as proposed simply would define “individuals with no health insurance” as those “who have no insurance (or other source of third party coverage) for the services furnished during the year.”

This change will make a difference to hospitals because the dollars expended for services provided to “under-insured individuals” are remarkably high.