|Diane S. Millman, JD
The Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA), enacted on the eve of Congress’ departure for the November elections last year, includes provisions of interest to diagnostic imaging providers. A number of these are highlighted below.
Section 104: Modernization of Screening Mammography Benefit.
Beginning in 2002, this provision will allow for coverage of mammography under Medicare once for women between 35 and 39 and annually for women ages 40 and over. The provision also provides for payment for mammography screenings performed using new technologies. The Secretary of Health and Human Services (Secretary herein) would have the discretion to adjust the frequency of the tests. Payment would be made pursuant to the physician fee schedule.
Mammographies performed using new technology would result in the creation of two new payment rates. First, for mammography screenings using digital imaging but no film and that are performed between April 1, 2001, and December 31, 2001, the payment rate would be equal to 150% of what would be paid for a bilateral diagnostic mammography. Second, standard film mammograms converted to digital form would receive an additional $15.
Section 111: Acceleration of Reduction of Beneficiary Copayment for Hospital Outpatient Department Services.
This provision directs the Secretary to reduce the national unadjusted copayment for covered outpatient department services so that the copayment does not exceed: 57% for procedures performed on or after April 1, 2001, 55% in 2002 or 2003; 50% for procedures performed in 2004; 45% for procedures performed in 2005; and 40% for procedures performed in 2006 and beyond. The provision also clarifies that the copayment amount for a procedure performed in a given year shall not exceed the amount of the inpatient hospital deductible. In light of the substantial copayments for some diagnostic imaging services under the new prospective payment system (PPS) for hospital outpatient services, this provision may have an impact on the copayments authorized to be charged at a number of hospital-based diagnostic imaging centers.
Section 112: Preservation of Coverage of Drugs and Biologicals Under Part B of the Medicare Program.
This provision will ensure that drugs and biologicals that are provided incident to a physician’s services and are not usually self-administered will be covered under Medicare. Under this provision, the criteria for determining whether or not a drug can be self-administered are based on the usual method of administration. This is a departure from the criteria developed by the Health Care Financing Administration (HCFA), which directed its carriers to base their coverage decisions on whether or not any patient could self-administer the drug or biological, regardless of the patient’s physical condition. This provision may affect the payment for some radiopharmaceuticals and other drugs used for therapeutic purposes.
Section 114: Imposition of Billing Limits on Drugs.
Medicare’s payment for covered prescription drugs equals 95% of the average wholesale price of the drug. Certain practitioners are required to bill for all services on an assignment-related basis. This means that they are required to accept Medicare’s recognized payment amount as payment in full, except for any required deductible and coinsurance amounts. Balance billing is prohibited. This provision specifies that payment for drugs under Part B must be made on the basis of assignment. This may affect some freestanding diagnostic imaging centers’ payments for certain contrast agents (such as radiopharmaceuticals) that are reimbursed as “incident to” drugs.
Section 122: Cancer Prevention and Treatment Demonstration for Ethnic and Racial Minorities.
This provision directs the Secretary to conduct demonstration projects to: improve the quality of items and services provided to target individuals in order to reduce disparities in early detection and treatment of cancer; improve clinical outcomes among these targeted individuals with cancer; eliminate the disparities in the rate of preventive cancer screening measures among targeted individuals; and provide collaboration with community-based organizations to ensure cultural competency of health care professionals. To the extent that diagnostic imaging modalities are used in cancer detection, some imaging providers may be included in these demonstration projects.
Section 223: Revision of Medicare Reimbursement for Telehealth Services.
The provision establishes revised payment provisions, effective no later than October 1, 2001, for services provided via a telecommunications system by a physician or practitioner to an eligible telehealth beneficiary in a rural area. The Secretary would be required to make payments for telehealth services to the physician or practitioner at the distant site in an amount equal to the amount that would have been paid to the physician or practitioner if the service had been furnished to the beneficiary without the use of a telecommunications system. A facility fee of $20 would be paid to the originating site, beginning October 1, 2001, through 2002. Originating sites would include a physician or practitioner office, a critical access hospital, a rural health clinic, a federally qualified health center, or a hospital.
The Secretary is required to conduct a study, and submit recommendations to Congress, that identify additional settings, sites, practitioners, and geographic areas that would be appropriate for telehealth services. Entities participating in federal demonstration projects approved by, or receiving funding from, the Secretary as of December 31, 2000, would be qualified sites.
Section 301: Revision of Acute Care Hospital Payment Update for 2001.
Under current law, Medicare’s operating payments to hospitals are annually updated by a factor determined in part by a “market basket” that measures price increases that affect the costs of goods and services purchased by acute care hospitals. Hospitals receive an annual update factor that is the market basket index (MBI) minus 1.1% with one exception-if a hospital is a sole community hospital, then it receives the full MBI each year. This provision will ensure that every hospital receives a full MBI-based update in 2001, without the 1.1% decrease.
This provision also gives the Secretary the authority to adjust the standardized amount in future fiscal years to correct for changes in the aggregate Medicare payments caused by adjustments to the diagnosis-related groups (DRG) weighting factors in a previous fiscal year (or estimates for such adjustments for a future fiscal year) that did not take into account coding improvements or changes in discharge classifications and did not accurately represent increases in the resource intensity of patients treated by PPS hospitals.
Section 401: Revision of Hospital Outpatient PPS Payment Update.
The hospital outpatient PPS is a schedule of fees for groups of related types of care and services. The fee schedule is updated annually based on the hospital MBI increase. Under current law, the outpatient department fee schedule increase in FYs 2001 and 2002 is equal to the hospital MBI minus one percentage point. This provision will allow for PPS payments for hospital outpatient department services to increase by the full MBI in FY 2001.
A special rule applies to the outpatient PPS rates in 2001: For the period January 2, 2001, through March 31, 2001, the PPS amounts shall be those in effect on the day before implementation of the new law. For the periods April 1, 2001, through December 31, 2001, the PPS amounts in effect during the prior period shall be increased by 0.32%.
Effective as if enacted with the Balanced Budget Act (BBA) ’97, if the Secretary determines that updates to the adjustment factor used to convert the relative utilization weights under the PPS into payment amounts have, or are likely to, result in hospitals changing their coding or classification of covered services, thereby changing aggregate payments, the Secretary would be authorized to adjust the conversion factor in later years to eliminate the effect of coding or classification changes.
Section 402: Clarifying Process and Standards for Determining Eligibility of Devices for Pass-Through Payments Under Hospital Outpatient PPS.
The Balanced Budget Refinement Act (BBRA) of 1999 provided that, for a defined period of time of 2 to 3 years, the Secretary is required to provide additional payments for costs of certain innovative devices, drugs, and biologicals, and certain “new” high-cost devices, drugs, and biologicals used in hospital outpatient department care. These payments are referred to as “pass-through payments,” because they would pass through the hospital outpatient PPS and be paid separately from the underlying PPS payments associated with the procedure in which the pass-through item is used.
This provision will require the Secretary to establish criteria for defining special payment categories under the hospital outpatient PPS for new medical devices. The new process will affect payment for new diagnostic imaging agents in the future.
Section 404: Application of Rules for Determining Provider-Based Status for Certain Entities.
This provision grandfathers existing arrangements whereby certain facilities (such as outpatient clinics and skilled nursing facilities) are considered provider-based. Provider-based entities are clinically and financially affiliated with a main hospital. Under the grandfather provision, any relationship treated as provider-based as of October 1, 2000, will continue to be regarded as provider-based until October 1, 2002.
If a facility or organization requests approval for provider-based status during the period October 1, 2000, through September 31, 2002, it could not be treated as if it did not have such status during the period of time the determination is pending. In making such a status determination on or after October 1, 2000, HCFA would treat the applicant as satisfying any requirements or standards for geographic location if it satisfied geographic location requirements in regulations or is located not more than 35 miles from the main campus of the hospital.
An applicant facility or organization would be treated as satisfying all requirements for provider-based status if it is owned or operated by a unit of state or local government, is a public or private nonprofit corporation that is formally granted governmental powers by a unit of state or local government, or is a private hospital that, under contract, serves certain low income households or has a certain disproportionate share adjustment.
This provision is important for hospital-based diagnostic imaging centers that do not meet the new criteria for provider-based status, since it effectively postpones the new requirements for existing centers until October 1, 2002; however, new provider-based entities are required to meet the new provider-based status requirements.
Section 411: GAO Studies Relating to Physicians’ Services.
This provision directs the General Accounting Office (GAO) to study the appropriateness of furnishing in physicians’ offices specialist physicians’ services that are ordinarily furnished in hospital outpatient departments. The GAO is also required to study the refinements to the practice expense relative value units made during the transition to the resource-based practice expense system.
Section 412: Physician Group Practice Determination.
The provision requires the Secretary to conduct demonstration projects to test, and if proven effective, expand the use of incentives to health care groups participating under Medicare. These incentives would be designed to: encourage coordination of care furnished under Medicare Parts A and B by institutional and other providers and practitioners; encourage investment in administrative structures and processes to encourage efficient service delivery; and reward physicians for improving health outcomes.
Section 413: Study on Enrollment Procedures for Groups That Retain Independent Contractor Provisions.
This provision directs the GAO to study the current Medicare enrollment process for groups that retain independent contractor physicians. This provision may affect enrollment procedures for diagnostic imaging centers enrolled as physicians’ offices that have retained radiologists as independent contractors. It is unclear whether this provision will affect enrollment procedures for Independent Diagnostic Testing Facilities.
Section 429: Revised Part B Payment for Drugs and Biologicals and Related Services.
While Medicare generally does not pay for prescription drugs, it does cover drugs and biologicals that are administered incident to a physician’s services. When payment is not made on a cost or PPS basis, Medicare reimburses at a rate equal to 95% of the average wholesale price (AWP) of the drug.
Recent Congressional and federal investigations have uncovered that in many cases this methodology results in payments to physicians and other suppliers of covered drugs that are substantially in excess of the supplier’s actual acquisition cost. BBRA ’99 directed GAO to study the physician and nonphysician clinical resources necessary to provide safe outpatient cancer therapy services and the appropriate payment rates for such services.
This provision will require the GAO to conduct a broader study on discrepancies between the average acquisition costs of covered drugs and the associated payments made for such drugs currently under the AWP reimbursement methodology. Additionally, GAO is required to study the adequacy of other payments currently made to physicians and other suppliers of drugs under the Medicare program for the related administration and handling of these drugs. GAO must submit recommendations to the Secretary for revising the current payment methodology such that a more appropriate payment methodology can be made for the cost of covered drugs. The provision requires that this report be submitted to Congress and the Secretary within 9 months after enactment. Finally, the Secretary is precluded from taking any administrative action to reduce the payment for covered drugs until the GAO has completed its study and made its recommendation.
This provision may affect payment for radiopharmaceuticals and contrast agents used in freestanding centers and physician office settings.
Section 430: Contrast Enhanced Diagnostic Procedures Under Hospital Prospective Payment System.
This provision requires the Secretary to create additional groups of covered outpatient department services that separately classify those procedures that use contrast media and those that do not. It also requires HCFA to provide pass-through payment for new contrast agents. n
Diane S. Millman, JD, is a health care attorney with Powers, Pyles, Sutter & Verville in Washington, DC, and a member of the Decisions in Axis Imaging News editorial advisory board.
Section 437: GAO Studies and Reports on Medicare Payments.
The provision directs the GAO to conduct a study on the postpayment audit process for physicians’ services. The study would include the proper level of resources HCFA should devote to educating physicians regarding coding and billing, documentation requirements, and calculation of overpayments. The GAO is also required to conduct a study of the aggregate effects of regulatory, audit, oversight, and paperwork burdens on physicians and other health care providers participating in Medicare.
Section 521: Revisions to Medicare Appeals Process.
The provision substantially modifies the Medicare appeals process. Generally, initial determinations by the Secretary would be concluded no later than 45 days from the date the Secretary received a claim for benefits. Any individual dissatisfied with the initial determination would be entitled to a redetermination by the carrier or fiscal intermediary that made the initial determination. Denied claims, whether wholly or partially, must be reviewed by a fiscal intermediary or carrier for a redetermination of such denial in order to preserve future appeal rights. Such redetermination would be required to be completed within 30 days of a beneficiary’s request.
Beneficiaries could appeal the outcome of a redetermination by seeking reconsideration. Generally, a request for a reconsideration must be initiated no later than 180 days after the date the individual receives the notice of an adverse redetermination. In addition, if contested amounts are greater than $100, an individual would be able to appeal an adverse reconsideration decision by requesting a hearing by the Secretary (first for a hearing by an administrative law judge [ALJ], then in certain circumstances, for a hearing before the Department Appeals Board [DAB]).
If the dispute is not satisfactorily resolved through this administrative process, and if contested amounts are greater than $1,000, the individual would be able to request judicial review of the Secretary’s final decision. Aggregation of claims to meet these thresholds would be permitted.
An expedited determination would be available for a beneficiary who received notice: 1) that a provider plans to terminate services and a physician certifies that failure to continue the provisions of the services is likely to place the beneficiary’s health at risk; or 2) that the provider plans to discharge the beneficiary.
The Secretary would enter into 3-year contracts with at least 12 qualified independent contractors (QICs) to conduct reconsiderations. A QIC would promptly notify beneficiaries and Medicare claims processing contractors of its determinations. A beneficiary could appeal the decision of a QIC to an ALJ. In cases where the ALJ decision is not rendered within the 90-day deadline, the appealing party would be able to request a DAB hearing.
The Secretary would perform outreach activities to inform beneficiaries, providers, and suppliers of their appeal rights and procedures. The Secretary would submit to Congress an annual report including information on the number of appeals for the previous year, identifying issues that require administrative or legislative actions, and including recommendations for change as necessary. The report would also contain an analysis of the consistency of the QIC determinations as well as the cause for any identified inconsistencies.
Section 522: Revisions to Medicare Coverage Process.
The provision would clarify when and under what circumstances Medicare coverage policy could be challenged. An aggrieved party could file a complaint concerning a national coverage decision. Such complaint would be reviewed by the DAB of HHS. The provision would also permit an aggrieved party to file a complaint concerning a local coverage determination. In this case, the determination would be reviewed by an administrative law judge. If unsatisfied, complainants could subsequently seek review of such a local policy by the DAB. In both cases, a DAB decision would constitute final HHS action, and would be subject to judicial review. The provision would also permit an affected party to submit a request to the Secretary to issue a national coverage or noncoverage determination if one has not been issued. The Secretary would have 90 days to respond. HHS would be required to prepare an annual report on national coverage determinations.
Section 532: Retention of HCPCS Level III Codes.
This provision extends the time for the use of local codes (known as HCPCS Level III codes) through December 31, 2003. The Secretary is further required to make the codes available to the public.
Section 533: Recognition of New Medical Technologies Under Inpatient Hospital PPS.
This provision requires the Secretary to submit a report to Congress no later than April 1, 2001, on potential and preferred methods for more rapidly incorporating new medical services and technologies used in the inpatient setting in the clinical coding system used with respect to payment for inpatient services. The Secretary must implement the preferred methods no later than October 1, 2001.
Section 543: Extension of Advisory Opinion Authority.
This provision makes permanent the Office of Inspector General (OIG) authority to issue advisory opinions to outside parties who request guidance on the applicability of the antikickback statute, safe harbor provisions, and other OIG health care fraud and abuse sanctions.