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News You Can Use: Kiss Your ICD-9 and HCPCS Transition Period Goodbye

New code implementation will be immediate, not gradual


Tighten up timing for new ICD-9 and HCPCS codes.
Gear up your chargemasters, hospitals -- starting Oct. 1 of this year, CMS won't be cutting you any slack when you submit claims that don't jibe with the latest version of the ICD-9 manual. And the same policy will apply to HCPCS codes, but not until Jan. 1, 2005.

Until now, the agency allowed a 90-day transition period in which you could gradually implement the code changes into your billing system and still earn reimbursement for the old codes. But alas, no more: CMS recently instructed intermediaries to deny claims that bear outdated ICD-9 and HCPCS codes immediately after the new codes take effect.

Smart idea: The early bird gets reimbursed this fall -- so implement chargemaster changes as soon as you know the new codes.

Prepare for MedPAC to have its way with productivity measure.
No matter how much the American Hospital Association (AHA) voices its reimbursement concerns, the Medicare Payment Advisory Commission (MedPAC) stands firm in its conviction that hospitals just don't understand the productivity-growth measure.

The AHA argues that MedPAC shouldn't make hospital-payment recommendations using a productivity target that relates to the economy as a whole, but in MedPAC's Feb. 9 response to this comment, the commission asserts that hospitals are missing the point. Earlier this year, the AHA protested MedPAC's use of a productivity target garnered from the overall economy in its recommendations on hospital payment.
 
But MedPAC says that use of the measure is consistent with a key goal of Medicare's payment systems: to encourage efficiency among providers. Medicare payments "should be set so that the federal government benefits from providers' productivity gains." MedPAC "expects improvements in productivity consistent with the productivity gains achieved by the firms and workers who pay the taxes and premiums that support Medicare."
The argument that hospitals should be held to a lower, industry-specific standard doesn't hold water, despite the analysis by Columbia University economist Frank Lichtenberg that AHA is using to make its case, the commission says. For one thing, the standard is a "target," intended to spur the industry to greater efficiency, and is "not meant to be an empirical estimate for any specific group of providers."   
MedPAC finds fault with specifics of Lichtenberg's analysis that concludes hospital productivity growth is generally lower than in the rest of the economy. "Improvements in the quality of hospital services have helped to extend patients' lives, raised their quality of life, and reduced medical errors," Commission analysts say. "For these reasons, it's not clear that the productivity growth in the hospital [...]

- Published on 2004-03-09