FASB and the Budget Control Act: Two New Items Potentially Impacting the Revenue Cycle

The first week in August provided two new items healthcare providers need to consider: the Financial Accounting Standards Board’s (FASB) amendments to its healthcare accounting standards, and the Budget Control Act of 2011’s impact on Medicare reimbursement.

FASB’s amendments are targeted at enhancing metrics comparisons. Operating margins, reported growth in revenue, and revenue per admission are all items that are included. Equally as important, bad debt, which includes patient service revenue, will be presented as a contra-revenue instead of an operating expense. In keeping with the disclosure trends of Sarbanes Oxley and Dodd Frank, greater reporting and specificity is required for revenue recognition and bad debt assessment policies. ‣ Read more...

Posted on:          under: General

CMS Releases Third Quarter Results of the National Recovery Audit Program

In July 2011, the Centers for Medicare and Medicaid Services (CMS) provided figures for overpayments, underpayments and top audit issues per region. Each of the four regions (A,B,C and D) each had different target areas and the amount collected varied. Total 3rd Quarter corrections amounted to $289.3 million, bringing FY2011 corrections to nearly $592.5 million. ‣ Read more...

Posted on:          under: General

Addressing the Issue of Payment Reductions to Hospitals and Physicians

A significant issue facing physicians and hospitals are the proposed reductions in payment by the Centers for Medicare and Medicaid (CMS). Physicians are facing flat Medicare cut in payments of 29.5% in January 2012. Furthermore, CMS is proposing additional pay reductions for imaging. (42 CFR Parts 410, 414, 415, and 495). Historically, cuts have only been applied to the “technical component” or overhead costs of providing exams. Under the proposed rule, a multiple procedure payment reduction (MPPR) of one-half to the “professional component” of ultrasound, MRI and CT diagnostic services administered to the same patient, in the same setting, on the same day. ‣ Read more...

Posted on:          under: General

A Clinical Documentation Improvement Program: The Key Item in Preparing for ICD-10

As the United States prepares to implement ICD-10 on October 1, 2013, there are many steps health care providers should be taking now. Of these, the most important is implementing a clinical documentation improvement program.

Some of the fundamental issues associated with transitioning from ICD-9 to ICD-10 are: a greater number of codes (approximately 15, 000 (ICD-9) to over 150,000 (ICD-10)); increased specificity (3-5 digits (ICD-9) to 3-7 digits (ICD-10)); wider gap in clinical language between physicians and coders; and the elimination of “catch all” codes such as NOS and NEC. Complicating matters even more, unlike other countries that have implemented ICD-10 as outlined by the World Health Organization, the United States has two sets of codes - ICD-10-CM and ICD-10-PCS. ‣ Read more...

Posted on:          under: General

An Accurate Medical Record – the Best Defense to RAC and ZPIC Audits

Unlike Recovery Audit Contractors (RACs), whose goal is to identify improper payments made on healthcare services rendered to Medicare Beneficiaries, Zone Program Integrity Contractors (ZPICs) ensure the integrity of all Medicare-related claims. The scope, approach and outcomes for ZPIC are much broader and carry more severe consequences that RAC findings.

Section 302 of the Tax Relief and Healthcare Act of 2006 authorized the expansion of RAC oversight to all 50 states by 2010. (www.cms.hhs.gov/rac). Whether the improper payment is an overpayment or underpayment, in either case, the RAC auditor relies on either the medical record or areas that are open for automatic review. Place of code service and unbundled procedures do not require a chart review. The majority of audits focus on information contained in the medical chart and whether or not claims meet Medicare’s medical necessity policy.  (https://www.cms.gov/NationalCorrectCodInitEd/NCCIEP/list.asp). ‣ Read more...

Posted on:          under: General

Proposed Changes to Medicare Payment Policy Underscores the Importance of Clinical Documentation

On July 1, 2011, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule that would impact payment policies and rates for services rendered to Medicare beneficiaries under the Medicare Physician Fee Schedule that becomes effective on January 1, 2012. (42 CFR Parts 410, 414, 415, and 495). Following up on a March 2011 CMS projection, physician payments would be reduced by nearly 29.5% and the professional component (PC) of advanced imaging services, such as computed tomography (CT) scans, magnetic resonance imaging (MRI) and ultrasound, would be reduced. Specifically, the procedures with the highest PC payment would be paid in full, while the subsequent procedures, furnished on the same day to the same patient, would be reduced by 50%. ‣ Read more...

Posted on:          under: General