HCFA delays outpatient PPS by one month

ED managers have been given a break — but it’s a short one. The Health Care Financing Administration (HCFA) has delayed implementation of the hospital outpatient prospective payment system (OPPS) by one month, to Aug. 1.

"I have made this decision because I believe that it is virtually impossible for HCFA or the hospital industry to implement [the change] on July 1," HCFA administrator Nancy-Ann DeParle wrote in a letter sent to the American Hospital Association (AHA) and other hospital associations. "In particular, I am aware that the unavoidable delays on our part in meeting certain milestones — such as the delay of nine weeks from the original target date of April 1 to release the Claims Expansion and Line Item Processing (CELIP), the expanded claim form necessary for the new system — have also limited the ability of the hospital industry to prepare."

DeParle asked that hospitals not collect deductibles or co-insurance from Medicare beneficiaries beginning Aug. 1 until HCFA can notify the beneficiaries of the correct amount. This step will ensure beneficiaries are charged the correct co-insurance amount, she explained. In July, HCFA will work with hospitals to inform beneficiaries that the OPPS-triggered changes in Medicare payments could mean changes in the amount of coinsurance — usually less — that beneficiaries will need to pay, DeParle wrote.

"We will provide all hospitals with a plain English’ flier to distribute to beneficiaries," she said in the letter.

HCFA is intensifying its efforts to provide clear and accurate training to fiscal intermediaries and hospitals, DeParle said. "Unfortunately, this one-month postponement is critical to ensure that HCFA and the hospital industry are ready for this significant change," she wrote. ". . . By continuing to work together, I am confident that we will overcome the challenges posed by the implementation."

And what are those challenges? According to the AHA, they include fiscal intermediary staff who can’t answer coding questions, incorrect information from intermediaries — even from an intermediary that has led training — and contradictory instructions from HCFA to fiscal intermediaries. The AHA and several other groups had asked HCFA to delay implementation of the outpatient PPS.

In a May 24 letter requesting a delay for the hospital outpatient PPS, the groups said they wanted assurance from officials at the Department of Justice that they would not pursue billing and claims mistakes that might occur during a reasonable period of time after implementation.

"Moreover, we need their assurances in writing," the letter said.