HCFA Information Systems Rules

During the 2000 calendar year, the Department of Health and Human Services and the Health Care Financing Administration (HCFA) are expected to publish several draft and final information systems regulations that have the potential for a major impact on the day-to-day functioning of hospitals.

These regulations, mandated under the Health Insurance Portability and Accountability Act of 1996 (HIPAA), will affect virtually every department of every entity that provides or pays for healthcare. The HIPAA regulations are intended to reduce the costs and administrative burdens of healthcare by making possible the standardized, electronic transmission of many administrative and financial transactions.

The act seeks to simplify and encourage the electronic transfer of data by replacing the numerous non-standard formats currently used across the country with a single set of electronic standards.

In addition to the recently proposed standards to protect the security and privacy of individually identifiable health information, other standards are being developed to address the software and data elements for claims, claims attachments, and remittance transactions; standardization of code sets across providers and payers; and unique identifiers for healthcare providers, health plans, employers, and individuals.

The implications of these regulations will be profound. The American Hospital Association (AHA) has voiced its support of the intent of these information system regulations, yet the AHA is concerned about the costs and disruptions that hospitals will face in implementing these all-encompassing regulations. The Arkansas Hospital Association will continue to review regulations as they are issued.

Both organizations will also work to influence HCFA's regulations through comment and advocacy, with particular focus on the costs of implementation and member readiness. In addition, both groups will support legislation to adjust Medicare payment updates to address the increased costs that providers will face in complying with the new standards. If the final regulations prove to be unreasonably burdensome or costly, further legislative or judicial action may be needed.

Arkansas Least Healthy State

According to the UnitedHealth Group State Health Rankings, Arkansas is no longer close to the bottom in terms of general health of the population. It is now the least healthy of all states, ranking 50th. Last year UnitedHealth Group ranked Arkansas in 48th place. At no time during the 10 years the poll has been released has Arkansas ranked higher than 45th. According to the rankings, Arkansas is 20% below the national health index of lifestyle, healthcare access, and mortality indicators.

Among reasons for the low ranking are falling high school graduation rates and the rising number of uninsured people in Arkansas. While the state didn't rank last in any of the 17 statistical categories used to establish overall rankings, it consistently posted low scores in most areas, and ranked 41st or worse in 11 categories. Of the 50 states, only Arkansas, Louisiana, and Mississippi show a decline in health status under UnitedHealth's ranking system through the 1990s.

The fact that Arkansas typically is listed among the least healthy states in rankings by various groups each year should be an even better reason for the Arkansas Legislature to spend the state's share of the national tobacco settlement strictly on healthcare, particularly since Arkansas ranked 40th or below in categories such as prevalence of cigarette smoking, risk for heart disease, rate of cancer cases, and percentage of uninsured.

AHA Home Health PPS Advisory

The American Hospital Association (AHA) issued a Regulatory Advisory December 15 regarding the Health Care Financing Administration's (HCFA) proposed rules for the Home Health Prospective Payment System (PPS). The proposed rule was published October 28, 1999 and is scheduled to take effect in October 2000.

According to the AHA, hospitals appear to fare well under the proposal. HCFA estimates that hospital-based agencies will likely see a 3.8% increase in payments from current levels. Home health PPS payments are based on 60-day episodes of care, adjusted for case mix intensity. There will be no transition from the interim payment system now in place to control home health spending and the new PPS.

The proposed rule sets forth information on payment rates (the federal standard rate is $2,037 for a 60-day episode), case mix, wage index, and other adjustments. It also provides information about notices of admissions, billing, and split payments. The AHA advises that hospitals educate and train physicians and staff about the proposed new rules.

It is important that caregivers also understand the 20 items from the home health Outcome Assessment and Information Set (OASIS) that determines a patient's classification for payment purposes. The AHA's Web site (www.aha.org) has a special section under the "Members Only" page which contains the full text of the proposed rule, along with helpful summary information.

Report Shows Facts About Uninsured

The number of uninsured Americans continues to skyrocket, according to the Health Insurance Association of America (HIAA). The advocacy group warned that 55 million Americans, 22% of the U.S. population, could be without health coverage by 2008, if the federal government doesn't do something to address the situation.

The HIAA numbers depend on a continued robust economy over the years. If there is an economic downturn, the number of uninsured people could grow to 60 million. Currently, there are around 44 million non-elderly adults in the country who don't have health insurance coverage.

At the same time the numbers are increasing, the overall health of the uninsured population gets worse. The American College of Physicians-American Society of Internal Medicine (ASIM) recently reviewed 124 scientific studies published during the last ten years and pulled together some of the most telling statistics about how uninsured people wait until they are seriously ill to seek medical treatment.

Among its findings, the ASIM report concludes that the uninsured are more than three times as likely to delay seeking needed medical care as people with health coverage.

As a group, the uninsured are three time as likely to say they did not receive care they thought needed within the last year; were more likely to need hospital treatment that could have been avoided for conditions such as diabetes, asthma, hypertension, and pneumonia; had a greater chance of being diagnosed with cancer at a late stage; and were more likely to die from their medical condition.