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Minnesota AUC Administrative Simplification
 

Letter to HCFA about APCs/APGs

November 4, 1998

Health Care Financing Administration
Department of Health and Human Services
Attention: HCFA-1005-P
P.O. Box 26688
Baltimore, MD 21207-0488

On behalf of the Minnesota Administrative Uniformity Committee and the members of the Minnesota APC/APG Technical Advisory Group, we would like to take this opportunity to comment on the Notice of Proposed Rulemaking (NPRM) for a Prospective Payment System for Hospital Outpatient Services (HCFA-1005-P), published in the September 8, 1998, issue of the Federal Register.

Enclosed you will find a series of tables containing our comments to the various sections of the Notice.

We would like to highlight four areas of concern in this letter. First, it appears from the timing that the system changes required for implementation of the proposed rules will coincide with Year 2000 systems issues. We would suggest an implementation date of January 1, 2001. This will allow organizations to effectively deal with Year 2000 system issues.

Second, we are concerned about the Medicare payment amount and the beneficiary copayment amount for services covered under the outpatient prospective payment system. The calculation is flawed for low-charge states. The beneficiaries will pay more during the phase-in than beneficiaries in other parts of the country, unless the provider takes a reduction. This will also impact Medigap policies in low-charge states, causing those policies to pick up the increased beneficiary copayment amount. State Medicaid programs will be faced with an unexpected payment that is not calculated in the future budgets . This results in cost shifting from Medicare to the Medicaid program. The HCFA impact statement does not apply to Minnesota, due to the fact that our beneficiaries will not receive a 6.9% reduction in their copayment amounts. Based on the information presented, we feel that a regional assessment should be done to clarify the impact on beneficiaries. Also, the co-insurance should be changed from a national median charge basis to a regional median charge basis.

Third, for setting the prospective payment rates for hospital clinic and emergency visits we suggest using Approach 2: Using CPT Codes Only. This approach is more of an APC approach. The diagnosis codes do not indicate the level of service. The industry is likely to be more compliant with less cumbersome coding requirements.

Finally, we are particularly concerned about the provider-based designation. We are concerned about what the specific criteria will be for designation. There are overlapping Medicare billing rules dictated by ownership and control (i.e. 72 hour rule). We need clarification on issues like:

if the provider meets the standard, are they required to bill as a provider-based entity or do they have the option to bill as a free standing clinic? If you are designated as a provider-based entity, are you required to charge a facility fee or may you elect not to charge a facility fee, and bill as a clinic site of service?

About the Minnesota Administrative Uniformity Committee
The Minnesota Administrative Uniformity Committee (AUC) was formed in 1991 to address issues of nonuniformity in many health care business practices. AUC members (see an attached list) come from many areas of health care: providers--large and small, payers, and state agencies. The AUC seeks to standardize as many processes and data elements as feasible in transactions such as claims, remittances, enrollments and so on. We have been successful in improving these transactions, as reflected in Minnesota state law.

The AUC convened a Minnesota APC / APG Technical Advisory Group (see an attached list) to access the impact of the proposed regulation to the Minnesota health care community and review and provide comment about the NPRM within the 60-day comment period.

There are many other issues contained in the full text of our comments. We hope that the thoughts of the members of the Technical Advisory Group who participated in our comment process are useful to you in implementing this legislation.

Sincerely,

Trisha Schirmers, Chair
Minnesota Administrative Uniformity Committee

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