HCA Addresses Issues of Programming Errors in Outpatient Payment

March 4, 2015

We have heard from many of you about issues with the Health Care Authority’s (HCA) programming of Enhanced Ambulatory Payment Groups (EAPGs)  related to implementation of the new  payment system implemented July 2014. The errors caused significant numbers of outpatient prospective payment hospital Medicaid claims to be underpaid or denied. HCA has agreed that as programming is corrected, it will adjust claims as needed.

The programming errors also impact the payments prospective payment hospitals receive from the Medicaid managed care plans. The extent of underpayment depends on how plans programmed their systems and the vendor grouping/pricing software they use. Some plans also adopted EAPGs at a later date than HCA.

To address the health plan issue, HCA recently shared detailed correction information with the managed care plans at an all-plan meeting via a Draft Issues Log. Hospitals should compare the issues described on the log to their claims experience to determine if their managed care payments are experiencing the same errors. Hospitals should review language in their plan contracts and contact the plans they work with regarding the timing and corrections to EAPG payments. HCA plans to post updated information as available its OPPS rate website. More information on this issue can be found in our previous Bulletin. (Andrew Busz, andrewb@wsha.org)

“Site Neutral” Payments Would Hurt Hospitals with High Medicare Populations

Medicare payments to Washington hospitals would be reduced by nearly $1 billion over the next 10 years if Congress adopted three so-called “site neutral” payment policies, according to a WSHA analysis. The proposal to cut hospitals fails to recognize that “site neutral” payments do not reflect the fact that hospital outpatient departments have higher costs than freestanding clinics and/or ambulatory surgery centers due to the complexity of their patients and greater regulatory requirements.  (See the recent American Hospital Association report documenting differences in patients served by outpatient departments.)

This policy would impact PPS hospitals that care for a lot of Medicare patients. Over 10 years, the proposed cuts would: 

  • Pay hospital outpatient departments (OPD) for evaluation and management services at the physician-fee schedule (nearly $600 million cut);
  • Cap OPD payment for 66 ambulatory payment classifications to the physician-fee schedule rate ($250 million cut); and
  • Cap OPD payments for 12 proposed services at the ambulatory surgery center rate ($133 million cut).

Representatives from Olympic Medical Center in Port Angeles this week joined WSHA and other national hospital leaders in Washington D.C. to urge Congress to oppose these cuts. To tell your hospital’s story to your representative and senators, please contact Chelene Whiteaker at chelenew@wsha.org, or John Flink at john@jwfconsultingdc.com.

Legislators Begin Difficult Budget Task

According to a recent presentation given by the Economic and Revenue Forecast Committee, the state will collect $107 million in additional revenue for the 2013-2015 biennium and an additional $129 million for the 2015-2017 biennium beyond the amounts previously projected. Unfortunately, the additional revenue amounts are in the context of significant funding needs, which include increased caseloads, education investments due to the McCleary decision and Initiative 1351, and other urgent policy needs.

Because of competing needs, limited resources, and ideological differences regarding need for new revenues, legislators will have their hands full as they begin their work putting together a budget for the 2015-2017 biennium. It is expected the House and Senate will propose separate budgets within the next few weeks. WSHA’s budget priorities are posted here. (Andrew Busz, andrewb@wsha.org)

WSHA and AWPHD Report on Lobbying Expenses for Medicare Cost Reports

The Medicare Provider Reimbursement Manual requires hospitals to adjust their Medicare cost reports to eliminate the portion of association dues related to lobbying expenses. For calendar year 2014, the Washington State Hospital Association (WSHA) has determined 21.80 percent of its membership dues were expended in activities that meet the Medicare definition of lobbying. For the Association of Washington Public Hospital Districts (AWPHD), 20.31 percent of its membership dues were used for lobbying.

Please forward this information to the persons in your organization responsible for completing and submitting Medicare cost reports. A separate Bulletin with this information was also sent to Hospital Chief Financial Officers yesterday.   If you have AWPHD questions, please contact Ben Lindekugel at benl@awphd.orgor (206) 216-2528. Please direct any other questions to Andrew Busz andrewb@wsha.org or (206) 216-2533.


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