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HEADLINES
from Medicare and Medicaid Guide Monday, June 30, 2008

CCH® Reimbursement Integrated Library
The Reimbursement Integrated Library delivers the key performance indicators for maximizing reimbursement. The Library includes three invaluable titles:
  • Dennis Barry's Reimbursement Advisor - This monthly newsletter provides all the facts about reimbursement strategies to minimize the adverse effects of DRGs, RBRVs, APCs and capitation to optimize hospital reimbursement.
  • Receivables Report - This monthly newsletter includes actual profit-improvement examples from facilities nationwide, secrets for successfully challenging denials, tips for using automation to increase cash flow, and strategies your colleagues are using now to prepare for health care reform.
  • Hospital Accounts Receivable Analysis - This quarterly journal is a synopsis of statistical data related to hospital receivables.

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Reimbursement Integrated Library

Reimbursement Advisor

Dennis Barry’s Reimbursement Advisor

June 2008, Volume 23, No. 10

Among the articles featured in the June 2008 issue is one that examines a federal district court’s ruling in favor of a hospital that challenged the Centers for Medicare and Medicaid Services’ (CMS) calculation of the supplement security income (SSI) fraction used to determine Medicare disproportionate share hospital payments. This issue also features articles on recent decisions regarding the “good cause” requirement for claims reopenings, successor liability when purchasing a provider, and the potential financial risk related to the “foundation model” for graduate medical education (GME) programs.
  • “Foundation model” for GME programs poses financial risk: Hospitals may face disallowances for residents rotating to nonhospital sites. A popular model for residency training programs is the sharing of expenses among hospitals in a community. Under such models, hospitals within a community jointly finance one or more residency programs, and the residents rotate among the participating hospitals. Although hospitals involved in such programs have assumed that they can count their pro rata share of time spent rotating to nonhospital sites when the hospitals, together, bear “substantially all” of the costs, CMS does not agree. This article examines CMS’ interpretation of GME payment under this model, a recent hospital appeal of the application of this interpretation, and the Provider Reimbursement Review Board’s (PRRB) decision on the appeal.

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Receivables Report

Receivables Report

June 2008, Volume 23, Issue 6
  • Business Office Salaries. Average salaries for hospital billers rose slightly from 2006 to 2007, according to a survey of US hospitals. The average increased from $29,481 to $30,004, with the highest wages paid by larger hospitals, at about $33,000. You can read more in this issue of the Receivables Report.
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    HARA

    Hospital Accounts Receivable Analysis

    Fourth Quarter 2007, Volume 22, Number 1
    • Major Indicators. At the end of 2007, US hospitals reported seeing mixed results among their key indicators. In the HARA Report on Fourth Quarter 2007, we break it down for you.

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    Headlines
    from Medicare and Medicaid Guide

    CMS to delay processing of physician claims

    CMS will temporarily suspend the processing of Medicare claims related to physician and non-physician practitioner services to delay implementation of a 10.6 percent payment cut scheduled to go into effect July 1, the agency announced June 27. According to CMS, “by holding claims for health care services that are delivered on or after July 1, CMS will not be making any payments on the 10.6 percent reduction until July 15, at the earliest. ”

    CMS took its action after the Senate on June 26, 2008, blocked a vote on Medicare legislation that was passed by the House of Representatives two days earlier. The bill (H. 6331) would have amended titles XVIII and XIX of the Social Security Act to extend expiring provisions under the Medicare program, to improve beneficiary access to preventive and mental health services, to enhance low-income benefit programs, and to maintain access to care in rural areas, including pharmacy access, and for other purposes.

    Action on the bill in the Senate is not expected until after the July 4th holiday. CMS is considering additional actions to address other expiring Medicare and Medicaid provisions. CCH Washington Bureau, June 30, 2008.

    MedPAC recommends significant payment system reforms

    A new payment design for bundling Medicare payments to cover all services, including hospital and physician services, during an episode of care is being proposed by the Medicare Payment Advisory Commission (MedPAC) in its June 2008 report to Congress. Other major changes include: (1) adding an outlier payment to the skilled nursing facilities (SNFs) prospective payment system (PPS), as well as other significant changes to the SNF PPS; (2) changes to the physician payment system to encourage the delivery of primary care; and (3) the development of a “medical home” demonstration project. Reforming the Delivery System, MedPAC Report to Congress, June 1, 2008.

    Prevalence, causes, and effects of physician self-referral analyzed

    Recent growth in the number of physician self-referrals, physician-owned specialty hospitals and ambulatory surgical centers (ASCs), and imaging services performed in physician offices and independent diagnostic testing facilities (IDTFs) has resulted in higher utilization of services, increased costs, and treatment of more profitable patients in specialty hospitals and ASCs than in general hospitals, according to a report released by the Robert Wood Johnson Foundation on June 24, 2008. The report addresses: (1) the prevalence and growth of self-referral to physician-owned specialty facilities; (2) factors leading to physician self-referral and the creation of physician-owned specialty facilities; and (3) the effects of physician self-referral and physician-owned specialty facilities on the quality, cost, access and organization of health care. Robert Wood Johnson Foundation Report, Research Synthesis Report No. 15, Physician Self-Referral and Physician-Owned Specialty Facilities, June 2, 2008.

    Proposed settlement would accelerate Part D auto-enrollment

    HHS has agreed to a proposed class-action lawsuit settlement that would accelerate the Part D process of auto-enrolling full benefit dual eligibles and for deeming them eligible for the low-income subsidy (LIS). If approved, the proposed settlement would require CMS to modify its current system for auto-enrolling to enable it to process each Medicare Modernization Act (MMA) file received from a state on the day the MMA file is received or on the first business day after it is received. The settlement would also require CMS to conduct an outreach campaign to pharmacists and pharmacy organizations in order to explain the modifications to the POS contract and encourage utilization of the POS system. Two weeks after approval, CMS would be required to issue clarification of the best available evidence (BAE) policy in the form of an health plan management system memorandum. CMS would also need to implement internal procedures under which a regional office caseworker or CMS contractor would be required to contact the State Medicaid agency to confirm whether or not the individual was Medicaid eligible in any month after June of the previous calendar year. By June 30, 2008, or eight weeks following approval of the settlement, whichever is later, partner tip sheets instructing beneficiaries, pharmacists, and advocates about beneficiary rights and plan requirements related to the BAE policy would be issued by CMS. Situ v. Leavitt, Proposed Settlement Agreement, Civil Action No. C0602841, N. Cal., June 19, 2008, ¶52,264.

    Senators urge CMS to open waiver decision process

    Four members of the Senate Finance Committee contend that CMS has not followed its own announced procedures for deciding whether to grant states' requests for waivers of statutory requirements concerning Medicaid and the State Children's Health Insurance Program (SCHIP). In a letter to HHS Secretary Mike Leavitt, committee chair Max Baucus (D-Mont.), Senator Jay Rockefeller (D-WV), Senator Jack Reed (D-RI), and Senator Sheldon Whitehouse (D-RI) urged the agency to allow notice and public comment at both the state and federal levels before granting waivers. The senators noted that the GAO has “ repeatedly” criticized CMS' lack of transparency concerning waiver decisions. In addition, the final report of the Medicaid Commission appointed by President Bush recommended that the administration “comply with the existing policy for notice and comment.”“Despite this broad consensus regarding notice and public comment, waiver negotiations are currently conducted largely behind closed doors, ” the senators wrote. Senate Finance Committee Release, June 19, 2008.
    Decisions and Developments
    CMS Manuals

    Update to outpatient therapeutic services incident to physician services

    Medicare Benefit Policy Manual , Pub. 100-04, Transmittal No. 90, June 19, 2008, ¶157,398. Premium content

    Hospital outpatient prospective payment system update

    Medicare Claims Processing Manual, Pub. 100-04, Transmittal No. 1536, June 19, 2008, ¶157,399. Premium content

    Submission of self-administered drugs exclusion list

    Medicare Benefit Policy Manual, Pub. 100-02, Transmittal No. 91, June 20, 2008, ¶157,400; and Medicare Claims Processing Manual, Pub. 100-04, Transmittal No. 1539, June 20, 2008, ¶157,403. Premium content

    Skilled nursing facility coding updates

    Medicare Claims Processing Manual, Pub. 100-04, Transmittal No. 1537, June 20, 2008, ¶157,401. Premium content

    New waived tests for clinical laboratories

    Medicare Claims Processing Manual, Pub. 100-04, Transmittal No. 1538, June 20, 2008, ¶157,402. Premium content

    Ambulatory surgical center payment updates

    Medicare Claims Processing Manual, Pub. 100-04, Transmittal No. 1540, June 20, 2008, ¶157,404. Premium content

    Required elements needed during a pelvic examination

    Medicare Claims Processing Manual, Pub. 100-04, Transmittal No. 1541, June 20, 2008, ¶157,405. Premium content

    Remittance advice message and Medicare summary notices for the durable medical equipment, prosthetics, orthotics and supplies national competitive bidding program

    Medicare Claims Processing Manual, Pub. 100-04, Transmittal No. 1542, June 20, 2008, ¶157,406. Premium content

    Numerous changes to the Medicare provider and supplier chapter

    Medicare Program Integrity Manual, Pub. 100-08, Transmittal No. 260, June 20, 2008, ¶157,407. Premium content

    Additional reason codes for processing claims under the durable medical equipment, prosthetics, orthotics, and supplies national competitive bidding program

    One-Time Notification Manual, Pub. 100-20, Transmittal No. 356, June 20, 2008, ¶157,408. Premium content
    DAB Decisions

    Agency discretion in provider revocation

    The provider enrollment of a physician who disclosed his felony conviction for selling non-controlled prescription drug samples was properly revoked by CMS. The physician had informed CMS of his previous conviction when enrolling as a Medicare provider in April 2006. CMS approved the enrollment in May 2006, but revoked his billing privileges after a Medicaid state agency made an inquiry about the physician's Medicare status in light of his conviction. The Secretary has the authority to deny enrollment or re-enrollment to any provider who has been convicted of a felony offense that the Secretary determines is detrimental to the best interest of the program under 42 C.F.R. §424.535(a)(3). Thus, CMS has the discretion to determine which convictions will be the basis for denying enrollment or revalidation and revoking the physician's billing privileges was proper. Barnett v. CMS, HHS Departmental Appeals Board, Civil Remedies Division, Doc. No. C-08-210, Dec. No. CR1786, May 8, 2008, ¶121,376. Premium content

    Ambulatory surgical center license

    A physician group and a clinic (the petitioners) did not qualify for Medicare provider numbers as ambulatory surgical centers (ASCs), because they were not licensed as ASCs by their home state. The providers alleged that the state did not require them to be licensed as ASCs in order to perform office endoscopies and therefore, they were compliant with state licensure laws and eligible for Medicare approval as an ASC. The hearing officer noted that the state licensure laws did not require licenses for the endoscopies performed in a physician's office, but did require a license as part of the operation of an ASC. CMS argued that the petitioners also failed to meet the definition of an ASC under 42 C.F.R. §416.2, which required that an ASC must be a “ distinct entity that operates exclusively for the purpose of providing surgical services to patients not requiring hospitalization.” The hearing officer's determination was based on the state licensure issue only, however, since CMS did not raise the “distinct entity” argument at the hearing. The hearing officer correctly concluded that, as long as the petitioners lacked state licenses as ASCs, under 42 C.F.R. §416.40they were not qualified to enroll in Medicare as ASCs. The petitioners' argument that their accreditation by a national ambulatory care association was sufficent for Medicare provider status failed; under 42 C.F.R. §416.26(a)(2), CMS requires that, even with deemed status through accreditation, ASCs must comply with state licensure requirements. Salem Gastroenterology Associates v. CMS, HHS Departmental Appeals Board, Civil Remedies Division, Doc. No. C-06-519, Dec. No. CR1785, May 7, 2008, ¶121,375. Premium content

    Immediate jeopardy noncompliance

    Civil money penalties (CMPs) of $5000 per day for four days of immediate jeopardy and $100 per day for 94 days of substantial noncompliance against a long-term care facility were reasonable after a resident was found dead with his face and arm caught in his bed's side rail. The state department of health surveyed the facility after it received a report regarding the patient's death. From August 22 through August 25, 2006, the long-term care facility's deficiencies posed immediate jeopardy to residents' health and safety. The long-term care facility placed the deceased resident in a bed with rails that were eight inches apart, rather than the FDA recommended maximum of four and three quarters inches. A survey also established that the facility was using similar side rails on 53 other resident beds posing an immediate jeopardy to those residents. The facility was not in substantial compliance with Medicare program requirements that resident areas remain free of hazards from August 22 through November 27, 2006. Laurelwood Care Center v. CMS, HHS Departmental Appeals Board, Civil Remedies Division, Doc. No. C-07-222, Dec. No. CR1796, May 30, 2008, ¶121,383. Premium content

    CMS failure to appear

    Because CMS failed to present any evidence whatsoever in support of its findings that the provider was not in substantial compliance with conditions of participation, an order was entered in favor of the facility. Counsel for CMS requested postponement the day before the scheduled hearing, but the request was denied because the provider's counsel and witnesses had already begun traveling to attend the hearing. CMS was granted permission to appear by telephone to present its exhibits but took no action after the exhibits were delivered to the wrong city. St. Joseph Villa Nursing Center v. CMS, HHS Departmental Appeals Board, Civil Remedies Division, Doc. No. C-07-628, Dec. No. CR1800, June 6, 2008, ¶121,386. Premium content

    Date of certification

    A provider does not become eligible for certification to participate in Medicare until the intermediary has determined that the operating entity meets the requirements for participation and the survey agency has certified that the facility meets the requirements. The effective date of certification may be no earlier than the date on which both requirements were satisfied. Therefore, CMS acted properly in determining the certification date for a medical center, and judgment was entered in favor of the agency as a matter of law. The provider's detrimental reliance on any statements that employees of the survey agency may have made to the provider's representatives could not be considered because the administrative law judge has no authority to consider equitable estoppel. Physicians Medical Center of Santa Fe, LLC v. CMS, HHS Departmental Appeals Board, Civil Remedies Division, Doc. No. C-07-679, Dec. No. CR1790, May 13, 2008, ¶121,378. Premium content

    ESRD compliance

    CMS' determination to terminate an end stage renal disease (ESRD) facility from the Medicare program was sustained because the ESRD failed to conduct quality improvement activities, as required by 42 C.F.R. §405.2134, and for failing to implement goals of the ESRD network of which it was a member. An on-site review and two off-site reviews of a random sampling of patient charts found the ESRD's most egregious failure to pursue network goals was its failure to deal with excessive medication errors and failures to follow physician's orders. The ESRD failed to: (1) dialyze a patient for the proper amount of time as ordered by the physician; (2) give patients the correct medication or correct dosage of medication; (3) administer antibiotics properly; (4) intervene in dangerous medical situations; and (5) maintain accurate treatment records and care plans. The number of medication errors reflect a systemic, serious problem. The ESRD failed to engage in continuous quality improvements (CQI) to deal with these problems. In addition, the ESRD had ambiguous and multiple policies on the same subject that were not address by a CQI plan. CMS had enough evidence to terminate the ESRD facility from the program and to deny payment for all services furnished to patients was proper. Under 42 C.F.R. §405.2180(a), failure by an ESRD supplier to comply with even one condition of participation authorizes CMS to terminate that supplier's participation in the Medicare program. Optimal Care Dialysis, CCN: 23–2595 v. CMS, HHS Departmental Appeals Board, Civil Remedies Division, Doc. No. Doc. No. C-05–474 and C-06–310, Dec. No. CR1792, May 28, 2008, ¶121,380. Premium content

    Exclusion

    The Inspector General (IG) properly excluded a doctor from participation in Medicare, Medicaid, and all other federal health care programs based on conviction for a criminal offense related to the delivery of a health care item or service under the Medicare or state health program. The doctor was convicted of one count of health care fraud and excluded from the program for a minimum of five years with an additional five years added for aggravating factors pursuant to Soc. Sec. Act § 1128(a)(1)and 42 C.F.R. §1001.102(b)(1), (2) and (5). The additional five years were for the presence of aggravating factors, including: (1) the restitution of $63,332.14 payable to the federal health care program, reflecting the amount of damages to the program; (2) conduct spanning more than eight years; and (3) incarceration. The Departmental Appeals Board held there was a proper basis for his exclusion, and the presence of aggravating factors and no mitigating factors, warrant the extension of the exclusion by five years for a total exclusion period of ten years. Franklin v. Inspector General, HHS Departmental Appeals Board, Civil Remedies Division, Doc. No. C-08–40, Dec. No. CR1791, May 19, 2008, ¶121,379. Premium content

    Exclusion

    The Inspector General (IG) properly excluded a pharmacy intern from participation in Medicare, Medicaid, and all other federal health care programs based on a felony conviction for a criminal offense related to the delivery of a health care item or service. The pharmacy intern stole drugs from the pharmacy for her own personal use. The pharmacy intern pled guilty to six counts of felony theft by deception and was excluded from participating in the program for a minimum of five years as required by Soc. Sec. Act § 1128(a)(3); and 42 C.F.R. §1001.101(c).The pharmacy intern argued that she committed no crime with respect to the delivery of a health care item because the drugs were store property that had not been prescribed to a patient and she had kept them for her own personal use. To accept her argument would mean that pharmacies obtain and stock pharmaceuticals for purposes other than delivery to customers. Timkovick v. Inspector General, HHS Departmental Appeals Board, Civil Remedies Division, Doc. No. C-08–259, Dec. No. CR1793, May 27, 2008, ¶121,381. Premium content

    Exclusion

    The Inspector General (IG) properly excluded a doctor from participation in Medicare, Medicaid, and all other federal health care programs based on conviction of a criminal offense related to the delivery of a health care item or service under the Medicaid program. The doctor plead guilty to a felony relating to the manufacture, distribution, dispensing or prescription of a controlled substance, by knowingly making a false statement that he had a Drug Enforcement Administration registration number which enabled him to write a prescription for a controlled substance, when in fact, he did not. The doctor's hearing request is not being dismissed, because he could come back to the Department of Appeals Board (DAB) at a later date and seek reinstatement if appeal of his conviction is successful. The doctor is arguing in his appeal that his conviction should have been a misdemeanor, and not a felony, which would not include the mandatory five year exclusion provision. Exclusion of the doctor is mandated by Soc. Sec. Act §1128(a)(4)and Soc. Sec. Act §1128(c)(3)(B) , which states any individual convicted of a felony must be excluded for a minimum period of five years. Hoxie v. Inspector General, HHS Departmental Appeals Board, Civil Remedies Division, Doc. No. C-08–272, Dec. No. CR1794, May 30, 2008, ¶121,382. Premium content

    Immediate jeopardy

    Civil money penalties (CMPs) of $4,000 per day and $300 per day were appropriate for a skilled nursing facility (SNF) that failed to provide the highest level of practicable physical, mental and psychosocial care and pharmaceutical services to meet the needs of each resident under 42 C.F.R. §§483.25and 483.60, respectively. A resident was admitted to the facility with multiple diagnoses of respiratory failure, sleep apnea, cervical stenosis and diabetes. Although a physician had ordered pain tablets to be administered to the resident on a daily basis, the SNF did not have the medication on hand. The SNF substituted the prescription with a different pain tablet, without permission of the physician. The facility also failed to notify the physician and responsible party of a second resident's change in condition, after discovering the resident in his room shaking uncontrollably and unresponsive. The resident's family was not contacted until the resident was transported from the SNF to a hospital 12 hours later in the day. The imposition of CMPs for failure to provide resident's with a level of care and service under federal regulations was reasonable and proper. Universal Healthcare v. CMS, HHS Departmental Appeals Board, Civil Remedies Division, Doc. No. C-06-227, Dec. No. CR1784, May 6, 2008, ¶121,374. Premium content

    Immediate jeopardy

    An immediate jeopardy finding was established by evidence that a certified nurse assistant (CNA) did not respond properly to an emergency. The CNA found a resident who had fallen out of his wheelchair and was being strangled by a seat belt around his neck. After trying for an undetermined period to remove the belt, the CNA left the patient alone while she looked for help. Although CMS did not establish the length of time that the patient was left unattended, the burden was on the facility to prove that its response was appropriate. The evidence that several patients were equipped with bed alarms and/or chair alarms that did not function established substantial noncompliance with the requirements of 42 C.F.R. §§483.70(c)(2)and 483.25(h)(2)that all equipment related to patient care be maintained in safe operating condition and that residents receive adequate supervision and assistive devices to prevent accidents. CMS' findings of one day of immediate jeopardy and 18 days of substantial noncompliance were not clearly erroneous, and imposition of civil money penalties $50 above the minimum for immediate jeopardy and at the minimum level for the remaining days was reasonable. JFK Hardwyck at Oak Tree v. CMS, HHS Departmental Appeals Board, Civil Remedies Division, Doc. No. C-06-167, Dec. No. CR1788, May 13, 2008, ¶121,377. Premium content

    Immediate jeopardy

    The findings that a skilled nursing facility (SNF) was in substantial compliance with program participation requirement was reversed due to the administrative law judge's (ALJ's) failure to consider that the SNF had already admitted its noncompliance to program requirements in a stipulation. The SNF stipulated to the following facts during the ALJ's hearing and agreed that it was not in substantial compliance with the quality of care requirements when it failed to: (1) supervise a cognitively impaired resident from hurting himself; (2) ensure nurses' aides had completed or enrolled in a nurse aide training program; (3) ensure that a resident maintained adequate nutritional status; (4) provide sufficient fluid intake for residents to maintain proper hydration and health; and (5) meet the dietary services requirements. These admissions were enough to find immediate jeopardy and impose a civil money penalty (CMP) of $3050 per day for February 3, 2004 through February 10, 2004, and a CMP of $200 a day, for February 11, 2004 to February 26, 2004.

    The SNF would not have been in compliance even if these items were resolved because the SNF did not comply with 42 C.F.R. §483.25, which states that each resident must receive and the facility must provide the necessary care and services to attain or maintain the highest practicable physical, mental and psychosocial well-being, in accordance with the comprehensive assessment and plan of care. The SNF failed to: (1) notify the physician of a resident's significant weight-loss; (2) conduct nutritional assessments; (3) monitor and document the resident's food intake; (4) document the resident's status, and the care and services provided; and (4) adequately plan for the resident's care. Sheridan Health Care Center v. CMS, HHS Departmental Appeals Board, Appellate Division, Doc. No. A-08–18, Dec. No. 2178, June 2, 2008, ¶121,373. Premium content

    Revocation of billing privileges

    Medicare enrollment and billing privileges were properly revoked for a physician who had been found guilty of mail fraud and filing false tax returns within the 10 years preceding his enrollment or revalidation of enrollment in Medicare, and the revocation was not barred by the doctrine of equitable estoppel. Pursuant to Soc. Sec. Act §1866(b)(2)(D), if a provider or supplier is convicted of a federal or state felony, CMS may revoke billings privileges. CMS considers financial crime such as income tax evasion or other similar crimes to be detrimental to Medicare. The physician argued that CMS was estopped from revoking his billing privileges because he received a letter from the inspector general (IG) dated December 18, 2002, informing him that a prior action to exclude him did not meet statutory requirements. The physician argued that because CMS and the IG are both a part of HHS that CMS is estopped from revoking his Medicare enrollment because of the IG's prior determination. Under the doctrine of equitable estoppel, the party asserting estoppel must show that he or she relied upon the act of the government employee to his or her detriment. The physician failed to show that building up his Medicare practice and accepting Medicare payments from 2002, until he was terminated from the program in 2007, caused him any injury. Also, the physician's ignorance to the fact that CMS could exclude him from the program was not an applicable defense. Under federal law, estoppel will not lie against the government in cases that involve funds paid from the Treasury, like Medicare. The doctrine of equitable estoppel is only available if the party asserting estoppel relied to his or her detriment upon the conduct of the party against whom estoppel is asserted. Rojas v. CMS, HHS Departmental Appeals Board, Civil Remedies Division, Doc. Doc. No. C-08-78, Dec. No. CR1797, June 2, 2008, ¶121,384. Premium content

    Substantial noncompliance

    Civil money penalties (CMP) ranging from $200 per day for more than a week to a $4000 CMP for one day for immediate jeopardy noncompliance were proper for a skilled nursing facility (SNF) that failed to implement necessary precautions to prevent a resident from rolling out of a shower bed and suffering injuries that resulted in her death two days later. The bed was a device that enabled SNF staff to transfer bedridden residents from their beds into the facility's shower area. This level of immediate jeopardy was eliminated after January 29, 2007, when SNF management and staff implemented effective measures to prevent the injuries during bathing. Due to other findings of substantial noncompliance, CMS had the discretion to issue a denial of payment for new Medicare admissions between February 25 to March 1, 2007. Cogburn Nursing Center - Huntsville v. CMS, HHS Departmental Appeals Board, Civil Remedies Division, Doc. No. C-07-375, Dec. No. CR1798, June 3, 2008, ¶121,385. Premium content

    Untimely filing of claims

    Denial of federal financial participation (FFP) reimbursement was proper after the state health agency failed to timely file claims and establish that it met the exception to the two-year filing requirement. CMS disallowed $5,627,497 of reimbursement for costs of administering the state's Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) program. The state's public school districts helped to administer the EPSDT program and were reimbursed by the state health agency for incurred costs. In November 2004, the state health agency filed a claim seeking FFP for EPSDT administrative costs incurred between October 1999 and August 2002. Under Soc. Sec. Act §1132(a), administrative costs associated with an FFP claim must be made within two years after the relevant program “ expenditures” were made. Exceptions to section 1132 include “ adjustments to prior year costs.” However, an adjustment is only considered when the amount of a particular cost item was claimed under an “interim rate concept.” There was no retrospective adjustment of interim payment rates for medical or other services during this period, therefore no exception applied. Nebraska Department of Health and Human Services, HHS Departmental Appeals Board, Appellate Division, Doc. No. A-07-57, Dec. No. 2177, May 30, 2008, ¶121,372. Premium content
    PRRB Decisions

    Asset loss on transfer

    The intermediary's adjustment disallowing the loss on the disposition of appreciable assets through a consolidation was upheld. The provider is a general acute care hospital consolidated with another corporation to create a new not-for-profit entity. For a gain or a loss to be realized, the consolidation must have occurred between two parties not related per 42 C.F.R. §413.17. The test of common ownership and control are to be applied separately, before and after the transaction. The new corporation maintained extensive powers over the hospital's assets before and after the consolidation, and the relationship between the hospital and its new parent corporation had not changed. The governing bodies and executive boards of both entities continued to operate after the consolidation, the same as they did prior to the consolidation. Also, the transfer of assets to the new corporation did not constitute consideration under a bona fide sale, as stated in section §104.24 of the Provider Reimbursement Manual (PRM). Total assets were at least twice the value of liabilities. There was no actual loss on disposal of assets to be claimed and the disallowance by the intermediary was proper. PRRB Hearing, Dec. No. 2008–D18, Mercy Center for Health Care Services v. BlueCross BlueShield Association/AdminaStar Federal, Inc., April 15, 2008, ¶81,907. Premium content
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    2008 Master Medicare Guide
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    2008 Medicare Explained
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