News briefs
News briefs
Continued financial woes for hospitals, study finds
A recent study indicates that the Balanced Budget Refinement Act of 1999 (BBRA) has not quelled many of the financial problems facing the nation’s hospitals. The study, "The Financial State of Hospitals: Post-BBA and Post-BBR" — conducted by Ernst & Young LLP in Irvine, CA, and HCIA-Sachs LLC in Evanston, IL — shows that despite the passage of the BBRA, U.S. hospitals continue to show declining hospital profit margins. The study used 1999 data in its calculations.
The study found that nationwide total hospital profit margins have significantly fallen from pre-BBA (Balanced Budget Act of 1997) levels. The BBA caused total margins to decline from 5.5% to 2.9% in 1999, with the BBRA providing minimal relief, according to the study. Hospitals are expected to experience their lowest margins since 1984.
Smaller, rural hospitals are in the greatest financial jeopardy. By 2001, hospitals with less than 100 beds are estimated to report profit margins of less than 1%, the study says. By the end of 2004, the end of the five-year scoring window for BBRA, nearly 60% of all hospitals will be losing money, according to a study conducted by the Lewin Group in Falls Church, VA.
"The effect of these two studies cannot be ignored. Many hospitals will likely experience bond downgrades, loss of capital equipment, and a reduction in staff," says Michael Hamilton, partner and national director of Ernst & Young’s Health Care Advisory Business Services.
For a copy of the study visit HCIA’s Web site at http://www.hciasachs.com or Ernst & Young at http://www.ey.com/industry/health.
AMA to collaborate for next generation of CPT
The American Medical Association (AMA) in Chicago announced that it will collaborate with Apelon to develop a new computer-friendly structure for the current procedural terminology (CPT) coding system.
The new configuration is due to be introduced in 2001 and is part of the process to phase in CPT-5. The innovations to CPT are designed to support the emerging needs of computer systems, electronic medical records, and research databases.
The current flat version of CPT will be converted into a multidimensional model using a hierarchical structure that will define relationships in the coding system’s content. These innovations to CPT will allow:
• easy electronic interchange;
• better user understanding of the links between related codes;
• deeper analysis and greater clinical detail of specific areas of interest;
• electronic representation of the CPT book, eventually with a browser interface.
Apelon has previously assisted the AMA in the expansion of the CPT-4 print index. In this new collaboration, Apelon will work closely with the AMA and the CPT Advisory Panel in the definition of processes to support the ongoing maintenance of CPT.
Additional information on the CPT-5 project can be found on the AMA Web site: http://www.ama-assn.org/med-sci/cpt/cpt5.htm.
The Health Care Financing Administration (HCFA) has added several new replacement codes to the ambulatory surgery centers (ASC) list of services furnished on or after Jan. 1, 2000. The American Medical Association’s (AMA’s) Jan. 1, 2000, update to the current procedural terminology (CPT) book had caused some ASC codes to be deleted, resulting in several carriers and intermediaries denying payment for the deleted codes.
HCFA’s Transmittal No. AB-00-28 also added CPT code 36833 to the list, since the AMA’s definition for ASC code 36832 was split. CPT codes 15580 and 15625 were deleted and will not be replaced due to the revised CPT code descriptions. Finally, the transmittal says that type of service (TOS) "F" (ASC facility usage for surgical services) should be used when modifier SG appears on an ASC claim. Otherwise, TOS "2" (surgery) for professional services rendered in an ASC should be used.
For carriers, the implementation date for these changes was May 29, 2000; for intermediaries, the implementation deadline is Oct. 1, 2000. To read HCFA’s announcement, which includes the full list of replacement codes, go to http://www.hcfa. gov/pubforms/transmit/AB002860.pdf.
Final rule exempts data bank from Privacy Act
The Department of Health and Human Services Office of Inspector General in Washington, DC, published a final rule on June 1 exempting the new system of records for the Healthcare Integrity and Protection Data Bank (HIPDB) from certain provisions of the Privacy Act. The Health Insurance Portability and Accountability Act of 1996 mandated a national data bank to provide a database of certain final adverse actions taken against health care providers. The effective date of the final rule was June 1. Final regulations for the HIPDB were published in October 1999, along with a proposed rule to exempt the new system from some privacy act requirements.
The exemption in this final rule applies to investigative materials compiled for law enforcement purposes, says a review of the rule by the Joint Healthcare Information Technology Alliance in Washington, DC. The rule exempts the data bank from those provisions in the Privacy Act that protect from release to the subject of the record, information on law enforcement queries to the data bank and exempts the data bank from Privacy Act access and amendment procedures to establish access and amendment procedures contained in the HIPDB regulations.
Record subjects would be guaranteed access to and correction rights for substantive information reported to the HIPDB. The Privacy Act procedures use access and correction as a basis, while providing additional rights, according to the final rule. In addition, data bank subjects would have broader rights on HIPDB correction procedures, including the right to file a statement of disagreement as soon as a report is filed with the HIPDB.
Medication reminder program available on ’Net
A new Internet-based medication reminder program allows retail pharmacies to offer care reminders to consumers that help them realize the full benefits of their medications. Through pharmacy-customized Web sites, NDC Care Reminder, a service of National Data Corp. (NDC) Health Information Services in Atlanta, allows consumers to opt-in and then choose when and how they wish to be reminded of their daily medication dosage and monthly refills. When no more refills remain, they are reminded to contact their physician for a new prescription.
NDC offers retail pharmacies the opportunity to private-label the NDC Care Reminder Internet-messaging service through a customizable Web site and marketing program. Consumers that opt-in choose from several reminder services that provide personalized messaging via the device best suited to their lifestyle: e-mail, pager, or mobile phone. Consumers can also choose to receive news of discounts and promotions on their prescription products and their personal health interests.
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