AHA Hosts
APC Workshops

The Arkansas Hospital Association will continue a series of workshops throughout the state in preparation for the July 1 implementation of the new Medicare Outpatient Prospective Payment System (OPPS).

The workshops review the coding/payment implications of the federal government's Correct Coding Initiative; review requirements of the soon-to-be-released Outpatient Code Editor; examine the methodology for adding modifiers; discuss the importance of training physicians about implications of the new system; look at packaging and discounting; and review the responsibility of the Chargemaster.

They also review outlier adjustments, included services, co-insurance issues, and transitional corridors. For information about the workshops, call Beth Ingram at (501) 224-7878. The workshop dates and locations are: June 13, Fort Smith; June 14, Fayetteville; and June 23, Camden.

First Look: Medicare Outpatient PPS
Based on a quick first look by the American Hospital Association (AHA), the Health Care Financing Administration's (HCFA) 700-plus-page final rule implementing an outpatient prospective payment system (OPPS) appears to be a significant improvement from the agency's proposed rule-largely due to adjustments included in the Balanced Budget Refinement Act (BBRA).

The BBRA eliminated HCFA's proposed 5.7% across-the-board provider cut, which was to cover Medicare's reduction in beneficiary coinsurance; and provided additional funds for the 3.5-year transition to OPPS. Under the act, hospitals scheduled to see increases related to the new system will receive them immediately, and hospitals likely to face losses will have those losses phased-in.

The BBRA also protects rural hospitals with fewer than 100 beds from any loss as a result of the switch to OPPS during the transition, and certain cancer hospitals are permanently protected from reduced Medicare payments under OPPS.

The new payment system reimburses hospital outpatient services by classifying them into 451 groups called ambulatory payment classifications (APCs). The APC payment rate established for each group applies to all services within the group.

Payments to providers overall should actually increase about 4% from current amounts and 10% from the payment levels estimated under earlier drafts of the outpatient PPS regulations, according to the Health Care Financing Administration (HCFA).

The effect on individual hospitals will vary, with some seeing a decline and others a gain. While the BBRA lessens the impact of OPPS, the AHA is still analyzing what might be HCFA's most complicated regulation to date. So far, this is what the AHA knows about the final rule:

• The effective date for OPPS is July 1.
• HCFA made significant changes from the proposed rule to recognize high-cost cases and the costs of new medical devices and drugs.
• Hospitals will only be required to bundle, or consolidate, services directly related to a patient's encounter and provided as part of the encounter. They will not be responsible for diagnostic tests provided at a physician's office earlier in the day.
• HCFA acknowledges that the coding for emergency room and clinic services is unclear and states that hospital codes do not have to match physician codes for those services. This may limit some false claims liability for the coding of those services.

Arkansas Trauma Regulations Final
All regulatory steps have been completed and Arkansas' new Trauma System Rules and Regulations are now final, according to Arkansas Hospital Association's (AHA) legal counsel Diane Mackey. Every Arkansas hospital should have received a copy of the rules and regulations. If not, an e-mail request for them should be sent to gragen@mail.doh.state.ar.us.

It is important that each hospital's Emergency Department be fully informed about these regulations, since compliance with EMTALA will be affected by the system, particularly when the diversion provisions apply.

On page 4, "M," the definition of "Emergency Medical Services" is as follows: "The transportation and medical care provided the critically ill or injured patient prior to arrival at an emergency department and within a medical facility subject to the individual approval of the medical staff and governing board of that facility."

The Arkansas Board of Nursing may be at odds with this definition, but it does add weight to the AHA's and the Department of Health's argument that qualified emergency personnel can do whatever a hospital officially wants in a medical facility. To the extent possible, the new Trauma System Rules and Regulations include the suggestions and recommendations made by hospital CEOs and other representatives.

CDC Issues Recommendations for Biological Attack Preparations
The Centers for Disease Control and Prevention have issued a strategic plan for preparedness and response to possible biological and chemical terrorist attacks in the U.S. The CDC's recommendations focus on five areas: preparedness and prevention, detection and surveillance, diagnosis and characterization of biological and chemical agents, response, and communication systems.

"Success of the plan hinges on strengthening the relationships between medical and public health professionals and on building new partnerships with emergency management, the military and law enforcement professions," according to the report. The plan, which was published in the Morbidity and Mortality Weekly Report in April, can be found at http://www2.cdc.gov/mmwr.

Arkansas Hospitals: Members of Not-For-Profit Multi-Hospital Systems (click link for chart)

Arkansas Hospitals: Investor Owned and/or Managed Hospital (click link for chart)

Arkansas Hospitals Are Top Employers
The Arkansas Hospital Association often touts the fact that its member hospitals create a major economic impact on the state's economy. In many cases, hospitals are the largest employer in the county where they are located. Beyond that, several Arkansas hospitals are among the largest employers of all types of businesses operating in the state, according to the weekly Arkansas Business publication.

In its March 6 issue, the newspaper listed the 31 largest Arkansas employers. Among them are Baptist Health (#5-7,311 employees), St. Vincent Health System (#14-3,570 employees), and Arkansas Children's Hospital (#16-3,293 employees). Nine other hospitals employ more than 1,000 people each in full-time and part-time positions.

Collectively, all hospitals in Arkansas employ almost 47,000 Arkansans, according to the 2000 edition of the American Hospital Association's Hospital Statistics, published by The Health Forum. Those workers share in a total annual payroll of $1.2 billion, which is channeled back into local economics when they pay bills and buy goods and services.

The Arkansas Business report showed that the four Arkansas employers ranked above Baptist Health to round out the top five are Arkansas State Government (47,410 employees), Wal-Mart Stores (52,800), Tyson Foods (23,841), and the U.S. Government (19,513).