April 18

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• THHSC Schedules Hearing on Medicaid Rates for Psychiatric Hospitals
• HAI Panel Makes Recommendations
• Workers' Comp Agency Publishes FAQ on Hospital Fee Guidelines
• House Committee Passes Bill Extending Medicaid Moratorium
• CMS Proposes 2009 Hospital Prospective Payment Rules
• Proposed IPPS Rules Contain Key Provisions on Quality
• AHA to Host Conference Calls on Never Events Policies
• OAG Offers Free Posters to Hospitals
• New Medical Director Named for Medicaid Program
• Important Dates
• Educational Opportunities
• Legal Update
• Federal Register Highlights

THHSC Schedules Hearing on Medicaid Rates For Psychiatric Hospitals

The Texas Health and Human Services Commission has scheduled a hearing to receive public comment on proposed Medicaid payment rates for freestanding psychiatric hospitals. The hearing will be at 9 a.m. on April 23 at THHSC's Braker Center, located at 11209 Metric Blvd. in Austin. The meeting will take place in the Lone Star Conference Room in Building H. 
    A briefing package describing the proposed rates may be requested; contact Amber Lovett by e-mail, or by telephone at 512/491-1371 or by facsimile at 512/491-1998. The briefing package also will be available at the public hearing. 
    Written comments regarding the proposed payment rates may be submitted instead of oral testimony until 5 p.m. the day of the hearing. Instructions for submitting written comments may be downloaded from the agency's Web site. (John Hawkins/Ernie Schmid, FACHE/John Berta)

The Health Care-Associated Infection Panel, created by legislation passed in 2007, met for the third time on April 15 and made two specific recommendations for reporting health care-associated infections to the Texas Department of State Health Services.  
    The panel recommended that TDSHS establish the Texas health care-associated infection reporting system using the Centers for Disease Control and Prevention's National Healthcare Safety Network, subject to the following requirements being met:

• Newly allocated and sustained funding for the system;
• Support in the form of dedicated full-time equivalent employees with administration, information technology and infection control expertise in the regional and central offices;
• Continuing availability of education, training and clinical support for health care infection control professionals; and
• Mechanisms for validating and auditing the data.

    The panel recommended that the publicly available data be displayed only on a statewide aggregate level for the first year of the program for purposes of evaluation, analysis and validation. The aggregate reports will be followed by phased-in facility-level reports.
    TDSHS is seeking funding during the next legislative session in the range of $2.6 - $3 million per biennium to meet the requirements listed above. At its next meeting on May 12, the panel will review the TDSHS funding request, draft the June 1 report to the Texas Legislature and discuss implementation logistics.  (Starr West/Matt Wall, J.D./Dinah Welsh)

The Centers for Medicare & Medicaid Services has proposed rules used to compute hospital payment rates in federal fiscal year 2009, which begins Oct. 1. In the news release announcing the proposed rules, CMS focused exclusively on quality-related issues (see article below), with little mention of other substantive changes in the rules. Comments on the proposed rules will be accepted through June 13.
    The payment update is 3 percent for hospitals submitting data on all 30 quality measures. The rules also update standard amounts, wage indices and severity adjusted diagnosis-related group values used in computing reimbursement.

Standardized Rates for areas with Wage Index < 1

     No Texas communities have a wage index equal to the national average of 1. The new regulations make wage area reclassification more difficult.  

Texas Wage Indices

    In 2009, severity-adjusted DRGs are fully adopted. The standardized amount is reduced by 0.9 percent to offset what CMS calls “behavioral” coding changes.  
    CMS' proposal makes the post-acute care transfer policy even more complex and prone to error. Current policy can reduce hospital payment if a patient enters sub-acute care within three days of discharge. The proposed regulations change this timeframe to seven days for patients using home health services. 
    The rules also state that the Emergency Medical Treatment and Labor Act requires a hospital with specialized treatment capacity to accept an admitted unstable inpatient from another hospital if the hospital has the capacity to treat the patient. 
    CMS estimates the proposed rule will increase Medicare payments to acute-care hospitals by nearly $4.0 billion nationwide. Texas hospitals typically experience about 6 percent of any national change.  (Ernie Schmid, FACHE)

Proposed Changes to the Hospital-Acquired Conditions
CMS is proposing to expand the list of conditions that are reasonably preventable through proper care and for which Medicare will no longer pay at a higher rate if the patient acquires them during a hospital stay. Nine conditions are being considered for addition to the previously selected hospital-acquired conditions for FY 2009:

• Surgical site infections following certain elective procedures;
• Legionnaires' Disease;
• Glycemic Control;
• Iatrogenic Pneumothorax;
• Delirium;
• Ventilator-Associated Pneumonia;
• Deep Vein Thrombosis/Pulmonary Embolism;
• Staphylococcus aureus Septicemia; and
• Clostridium Difficile-Associated Disease.

The rules also propose refinements to two of the previously selected hospital-acquired conditions: 

• CMS proposes adding ICD-9-CM diagnosis code 998.7 (acute reaction to foreign substance accidentally left during a procedure) to the Foreign Object Retained After Surgery condition.
• New ICD-9-CM diagnosis codes were created for staging pressure ulcers.  ICD-9-CM diagnosis codes 707.23 and 707.24, signifying Stage III and IV pressure ulcers, would be the only pressure ulcer codes used to determine a higher paying DRG assignment. 

Proposed Changes to RHQDAPU
The measure set to be used for determining FY 2009 payment updates under the Reporting of Hospital Quality Data for Annual Hospital Payment Update program will include three new measures, bringing the total number of measures to 30: 

• SCIP Infection 4: Cardiac Surgery Patients with Controlled 6 a.m. Postoperative Serum Glucose
• SCIP Infection 6: Surgery Patients with Appropriate Hair Removal
• Pneumonia 30-day mortality rate

    In addition, CMS proposes to increase the total number of measures to 72 for FY 2010 with the addition of:

• One surgical care measure;
• Four nursing sensitive measures;
• Three readmission measures;
• Six venous thromboembolism measures;
• Five stroke measures;
• Nine Agency for Healthcare Research and Quality measures; and
• 15 cardiac surgery measures.

    Three different deadlines have been proposed for hospitals to begin submitting the new measures, depending on the data source.  While some of the proposed measures have been endorsed by the National Quality Forum and adopted by the Hospital Quality Alliance, most have not.
    In addition, CMS proposes to allow hospitals that have fewer than five heart attack, heart failure, pneumonia or surgical care patients in a calendar quarter to not submit quality measures data for those patients. Hospitals that have fewer than five HCAHPS-eligible patients in any month will not be required to submit HCAHPS surveys for that month.
    The measures will be finalized in the FY 2009 IPPS final rules or the CY 2009 outpatient prospective payment system/ambulatory surgery center final rules. (Starr West)

• Exempla Healthcare, April 18 at 12 p.m. (Central)
• HCA, May 1 at 10:30 a.m. (Central)
• Children's Hospital and Regional Medical Center, June 24 at 2 p.m. (Central)

    Visit AHA's Web site to make a reservation for the conference calls, which are free to AHA members.  (Starr West/Richard Schirmer, FACHE)

Important Dates 

April 18, May 1, June 24
AHA conference calls on never events policies

April 23
Public hearing on proposed THHSC payment rates for freestanding psychiatric hospitals

June 1
Comments due on draft instructions for redesigned IRS Form 990

June 13
Deadline to comment on proposed IPPS rules

THT Audioconference Series Part II: Board-CEO Relationships
April 22
View details.

Audioconference: Hospital Billing & Collection Practices
(Part 1, Keeping Current on Compliance)
May 8
View details.

Webinar: Financing for Future Hospital Flexibility
May 13
View details.

Webinar: Adaptable Design: Building for Now and Later
May 20
View details.

Webinar: Improving Alignment for Strategy Execution
May 29
View details.

Audioconference: Establishing Fair Market Value in Hospital-Physician Arrangements
(Part 2, Keeping Current on Compliance)
June 12
View details.

Webinar Series: Managing Joint Commission Standards for Environment of Care
June 13
July 11
Aug. 22
Sept. 19
Oct. 17
Nov. 14

THA Psychiatric Services Conference
July 14-15, San Antonio
Save the date!

THT Conference
July 24-26, San Antonio
Save the date!

Audioconference: Observation Services: Coding, Billing and Compliance
July 31
View details.

Rural Health Trifecta
Aug. 5-7, Austin 
Save the date!

THA also offers
audioconferences and webinars on a wide range of topics. Viewa complete listing of webinars. For information on all of THA's upcoming educational events, visit THA's online Education Calendar.

Legal Update

By Fulbright & Jaworski, of counsel to THA

DOJ Joins Cardiologist's Whistleblower Suit Against Hospital. On April 1, the U.S. Department of Justice intervened in a whistleblower lawsuit against Christ Hospital of Cincinnati. (United States ex rel. Fry v. Health Alliance of Greater Cincinnati, S.D. Ohio, No. C-1-03-167.) The lawsuit alleges that the hospital gave a group of cardiologists illegal remuneration by tying access to its outpatient testing unit to revenues the doctors generated for the hospital. Specifically, the lawsuit alleges Christ Hospital referred patients to the Ohio Heart and Vascular Center, the largest cardiology group in the region, whose doctors, in turn, were allocated panel time at the hospital's outpatient testing unit based on the amount of coronary artery bypass graft procedures and catheter lab revenues they generated for the hospital during the previous year. Many of these procedures were billed to various government programs, including Medicare and Medicaid. The government's decision to intervene appears to be based on the theory that giving physicians the opportunity to bill for their services can result in improper financial incentives in exchange for generating revenue for the hospital and thus constitute illegal remuneration. 
    According to the DOJ, the cardiologists in this case were rewarded for referring business to Christ Hospital with the opportunity to bill for the patients they treated at its Heart Station and for any follow-up procedures that these patients required. The DOJ further claims that this “system for scheduling time at the Heart Station gave area cardiologists an incentive to perform certain cardiac procedures at Christ Hospital and prevented otherwise qualified cardiologists, who failed to generate income for Christ Hospital during the previous year, from working at the Heart Station.” The whistleblower, a cardiologist on the hospital's medical staff, alleges that the hospital violated the federal anti-kickback statute and the False Claims Act by presenting claims for services rendered to patients unlawfully referred to the hospital, making false statements or certifications in submitting the claims and in its cost reports, and conspiring with the physicians to defraud the U.S. government. Christ Hospital has denied any wrongdoing and indicated it plans to seek immediate dismissal of the claims. The DOJ's news release is available online.

IRS Issues Draft Instructions for 2008 Form 990; Seeks Public Input. The Internal Revenue Service has issued draft instructions to accompany the redesigned IRS Form 990, released in final form in December 2007, and effective for information returns due on and after Jan. 1, 2009. The IRS is seeking comments from the general public on these instructions “in an effort to make sure that the final instructions address the needs of the tax-exempt community.” The comment period will remain open until June 1, and comments may be submitted electronically at Form990Revision@irs.gov. The highlights at the beginning of the instructions for the core Form 990 and schedules identify specific areas for which the IRS seeks comment.
    The draft instructions track the core Form 990 and include an overview of the form or schedule explaining its purpose, who must file a particular schedule, and line-by-line instructions to aid in answering questions on the form or schedule. Two areas are of particular interest to hospitals: Part VII of Form 990, titled “Compensation of Officers, Directors, Trustees, Key Employees, Highest Compensated Employees, and Independent Contractors,” provides a definition of “key employee” for purposes of Part VII and Schedule J, that includes individuals with overall responsibilities for the organization as a whole, as well as certain individuals who manage or have authority to control more than five percent of an organization's activities. It is noteworthy that the organization is required only to list those “key employees” whose compensation exceeds $150,000, and that the five percent test is not determinative of an individual's status as a “disqualified person” for purposes of imposing penalties under the intermediate sanctions rules. The instructions accompanying Schedule H, which must be included in any IRS Form 990 filing by a hospital, elaborate on issues like quantifying charity care and certain other community benefits, participation by hospitals in joint ventures and characterization of bad debt.

The Centers for Medicare & Medicaid Services issues a final rule concerning conditions for coverage for end-stage renal disease facilities. The rule establishes new conditions for coverage that dialysis facilities must meet to be certified under the Medicare program. This rule focuses on the patient and the results of care provided to the patient; establishes performance expectations for facilities; encourages patients to participate in their plan of care and treatment; eliminates many procedural requirements from the previous conditions for coverage; and preserves strong process measures when necessary to promote meaningful patient safety, well-being and continuous quality improvement. This final rule reflects the advances in dialysis technology and standard care practices since the requirements were last revised in their entirety in 1976. This rule becomes effective Oct. 14.  (April 15)

The Centers for Medicare & Medicaid Services issues a final rule that codifies clarifications of existing policies associated with the Medicare Prescription Drug Benefit, including the following: guidance that certain supplies associated with the administration of insulin are included in the definition of a Part D drug; guidance regarding the statutory exclusion from the definition of a Part D drug of any drug when used for the treatment of sexual or erectile dysfunction, unless that drug is used for an FDA-approved purpose other than sexual or erectile dysfunction; a recent statutory change that allows for the payment of vaccine administration under Part D for Part D-covered vaccines; and guidance on plan-to-plan reconciliation and reconciliation with a payer other than the Part D plan of record. This final rule also codifies clarifications of existing policies associated with the Retiree Drug Subsidy program, including guidance on aggregating plan options for purposes of meeting the net test for actuarial equivalence, and guidance on applying the Medicare supplemental adjustment when calculating actuarial equivalence. In addition, new clarifications and modifications in this final rule include establishing standards with respect to the timely delivery of infusible drugs covered under Part D, and modifications to the retiree drug subsidy regulations. This final rule codifies certain technical corrections to the regulations and clarifies the intent with respect to certain preamble discussions in a prior final rule implementing the Medicare prescription drug benefit. This rule is effective June 9.  (April 15) (Sharon D. Johnson)