Benefit Improvement and Protection Act of 2000 BIPA

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Benefit Improvement and Protection Act of 2000
(BIPA)

• Presented through
• AccountingWeb.com
• Mike Stigler, FHFMA, CPA
• Louisville, Kentucky
• [phone]

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BIPA

• HR 4577, incorporating the text of HR 5661
• P.L. 106-554
• Date of enactment is 12/21/2000
• http//thomas.loc.gov/hom/c106query.html
• Search under bill number HR5661

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Regulatory Impact on Providers
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INPATIENT HOSPITAL PPS

• Update to standardized amounts
• MB plus 1.1 for 4/1/01 to 9/30/01 (except SCHs)
• FY 01 adjustment is temporary
• MB minus 0.55 for FY 02 and 03
• Reinstate HCFAs authority to adjust for case
  mix
• IME adjustment
• 6.75 for 4/1/01 to 9/30/01 (temporary)
• 6.5 in FY 02
• 5.5 in FY 03 and thereafter

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Hospital Total Margin
Source MedPAC
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Percent of Hopsital with negative total margins,
1994-1999
Source MedPAC
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Hospital total margin, by urban and rural
location, 1997 - 1999
Margin (percent)
Prospective payment system year
Source MedPAC
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Top 10 Volumn DRGs
Relative Weight
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INPATIENT HOSPITAL PPS (cont)

• DSH adjustment (in general)
• 1 reduction for 4/1/01 to 9/30/01
• 3 reduction in FY 02
• DSH (Rural and Small Urban Hospitals)
• Effective 4/1/01, all hospitals have 15
  threshold
• Payment formulas modified
• MDH adjustment
• 60 Medicare (days or discharges) utilization
• During any 2 of 3 most recent audited c.r.p.s
• Must be based on settled cost reports
• Effective for c.r.p.s on or after 4/1/01

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DSH Formulas - Discharges April 1, 2001 after
Urban lt 100 Beds. lt 19.3 (p-15) (.65)
2.5 gt 19.3 5.25 Rural lt 19.3 (p-15)
(.65) 2.5 gt 19.3 5.25 Sole Community
Hospital lt 19.3 (p-15) (.65) 2.5 gt
19.3 lt 30 5.25 gt 30 10 Rural
Referral Centers lt 19.3 (p-15) (.65)
2.5 gt 19.3 lt 30 5.25 gt 30
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Effect of disproportionate share policy change on
Medicare inpatient payments, by hospital group
DSH payments as a percent of total payments
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INPATIENT HOSPITAL PPS (cont)

• Allow any SCH to use 1996 as base year
• Wage Index Process
• Create process to allow single statewide index
• Effective immediately
• To be implemented by 10/1/01 for FY 03
• Prohibit any single hospital to seek reclass
• Must collect occupational mix data
• Start using no later than 9/30/03
• For FY 05
• New Technology DRGs for FY 02

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TEFRA HOSPITALS

• Rehab Hospitals
• Eliminate 2 cut in PPS rates
• One-time election to skip phase-in
• 30 days before start of PPS
• Psych Hospitals and Units
• Increase incentive bonus to 3
• Effective for c.r.p.s on or after 10/01/00
• LTC Hospitals (PPS)
• Refined DRGs
• Default existing DRGs

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CRITICAL ACCESS HOSPITALS

• No beneficiary cost sharing for clinical lab
• Also makes it clear that CAH gets cost
• Retroactively effective to BBRA enactment
• Physician payment at 115 of RBRVS
• Effective 7/1/01
• CAH swing beds exempt from SNF PPS
• Receive reasonable cost
• Effective with c.r.p.s beginning on or after
  enactment

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CRITICAL ACCESS HOSPITALS (cont)

• On call emergency physician costs are allowable
• But only if not furnishing services or on-call
  elsewhere
• Effective for c.r.p.s beginning/ending on or
  after 10/1/01
• Ambulance services
• Paid reasonable cost
• If provided by CAH or entity owned
• But only if only supplier within 35 miles
• Effective on enactment
• Study to allow for seasonal flux. in census

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HOSPITAL OUTPATIENT

• Payment Updates
• 3. 2 increase for 4/1/01 to 12/31/01
• MB minus 1 to 2002
• HCFA authority to adjust for case mix
• Separate APCs for contrast agents
• Device pass-through
• Create categories by 4/1/01
• Establish criteria for new categories by 7/1/01
• Special rule for temperature monitored cryoblation

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HOSPITAL OUTPATIENT (cont)

• Hold harmless for hospitals without 1996 cost
  report
• First period after 1996 in which was filed
  (before 2001) is base
• Retroactively effective
• Change in provider-based entity rules
• All facilities grandfathered until 10/1/02 if
  treated as such as of 10/1/00
• 35 mile rule in addition to 75/75 rule
• Special rule for public hospitals with DSH
  greater than 11.75

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HOSPITAL OUTPATIENT (cont)

• Childrens hospitals get 100 hold harmless
• Retroactively effective
• Reduction in beneficiary coinsurance

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HOSPITAL OTHER

• Bad Debt at 70
• Effective for c.r.p.s on or after 10/1/00
• Exception to prohibition against unbundling for
  anatomical path
• But only for two years
• And only for certain hospitals
• Per residents amounts
• Floor increased to 85
• Effective for c.r.p.s on or after 10/1/01
• Change in formula for allied health ed. costs
• Effective for portions of c.r.p.s on or after
  1/1/01

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SNFs

• Update rates
• MB plus 1 for 4/1/01 to 9/30/01
• BBRA increases not affected
• MB minus 0.5 in FY 02 and 03
• 16.66 increase in nursing component from 4/1/01
  to 9/30/02
• Limit scope of consolidated billing rules
• Part A stays
• Therapy services under Part B
• Effective 1/1/01

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SNFs (cont)

• Adjust rehab RUGs
• 6.7 increase on 4/1/01
• But 20 temporary increase abolished
• for those RUGs getting this new
• increase
• Create process to allow geographic reclass
• Permissive on HCFA not mandatory
• Cannot do it at all until using SNF wage
• index

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Number of certified skilled nursing facilities,
by type and year
Source MedPac
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HOSPICE

• 5 INCREASE IN RATES AS OF 4/1/01
• Permanently in base
• In addition to BBRA increases
• Physician certification of terminal illness
• Based on clinical judgment regarding the normal
  course of the persons illness
• Effective on enactment

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HOME HEALTH

• Updates
• MB plus 2.2 for 4/1/01 to 9/30/01
• MB minus 1.1 for FY 02
• Temporary 10 increase in rural areas (4/1/01 to
  3/31/03)
• Delay 15 cut one more year (to 03)
• Study on use of non routine supply costs
• Temporary two-month restoration of PIP
• Get lump sum payment
• But only for some providers, not all

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HOME HEALTH (cont)

• Clarification of branch office status
• HCFA cannot use time or distance as sole
  determinant
• May consider technology in determining
  supervision of the branch
• Clarification of homebound
• Participation in adult day-care OK
• So is participation in religious services
• Effective on enactment

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Hospital-based Medicare home health agency margin
excluding graduate medical education, by hospital
group, 1996-1999
Source MedPAC
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Medicare profit margins - By program
Source MedPAC
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PHYSICIAN PAYMENT

• GAO studies
• Group practice demonstration

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DRUGS

• Narrow definition of self-administered
• Mandatory assignment
• Moratorium on payment reductions
• No time limit on coverage of immunosuppressive

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OTHER PART B CHANGES

• One year extension of moratorium on therapy caps
• ESRD
• 2.4 increase in composite rate for 2001
  (temporary)
• Exception window closes on 12/31/00 (or 7/1/01 if
  no exception filed in 2000)
• Create ESRD market basket
• Add items and services to compromise rate

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OTHER PART B CHANGES (cont)

• Ambulance
• Rates increased by 4 (temporary) from 7/1/01 to
  1/1/02
• Full payment of mileage rates during phase-in
• Special payment for rural providers
• Ambulatory Surgical Centers
• PPS delayed until 1/1/02
• Phase-in extended to 4 years
• Must use 1999 cost data by 1/1/03
• Durable Medical Equipment
• Increase effective 7/1/01 of 3.2 (temporary)
• Zero in 03

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OTHER PART B CHANGES (cont)

• Orthotics and Prosthetics
• 2.6 increase as of 7/1/01 (temporary)
• 1 in 02
• New special rules for custom devices
• cover replacements after 3 years
• Community Mental Health Centers
• Liberalizes qualifying criteria
• Effective on first day of third month after
  enactment
• Laboratory fee schedule
• 100 of national median for new tests
• Effective 1/1/01

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MEDICARE CHOICE

• Floor payment amounts in 2001 (after March 1)
• 475 in rural areas (and MSAslt250,000)
• 525 in any MSA gt250,000
• But must give it back in the new ACR filing
• Update factor
• 3 after 3/1/01
• 2 in 2002 and thereafter

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MEDICARE CHOICE (cont)

• Phase-in risk adjuster
• 30 in 2004
• 50 in 2005
• 75 in 2006
• 100 in 2007
• 100 in 2001 for congestive heart failure
  patients
• Expansion of new-entry bonus
• Regulatory reform
• Cost contract service area expansion

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BENEFIT EXPANSIONS

• Biennial screening pap smears and pelvic exams
• Currently once every three years
• Effective 7/1/01
• Glaucoma screening
• Annual for people at high risk
• Effective 1/1/02
• Screening colonoscopy
• For all beneficiaries
• If more than 10 years (4 yrs for flex sig since
  last one)
• Effective 7/1/01
• Payment changes for screening mammography
• Nutrition therapy for diabetics
• Also for non-ESRD renal patients
• Effective 1/1/02

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MISCELLANY

• Waiver of 24 months waiting period for ALS
  patients
• Must still prove disability
• Effective 7/1/01
• Telemedicine
• Pay full fee to doctor at the distant site
• Facility fee of 20 for originating site
• Effective 10/1/01
• Rural health clinic limits
• Exempt all hospitals with 50 beds which own RHC
• effective 7/1/01

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MISCELLANY (cont)

• Advisory opinions made permanent
• Retain HCPCS local codes thru end of 2003
• Create process for new items of DME
• For coding and payment
• Effective 1 year after enactment
• Required daily posting by SNF for each shift
• Current number of licensed and unlicensed nursing
  staff
• In a visible place
• In a uniform manner
• Change in Appeals Process
• Change in Coverage Process

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MEDICAID

• Modifications to DSH allotments
• Increase by CPI in both 01 and 02
• Subject to 12 cap
• Effective on date upper payment limit regualtion
  is published
• PPS for FQHCs
• Upper Payment Limits
• Deadline for reg 12/31/2000
• Transition rules
• SCHIP
• Special rule for redistribution of unused funds
  from FY 98 and 99
• Allow for presumptive eligibility