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HCFA update: coding rules, practice expenses, more

Date changed for new outpatient coding rules

From the May 1996 ACP Observer, copyright 1996 by the American College of Physicians.

July 1, 1996 is the new implementation date of the Health Care Financing Administration (HCFA) rule requiring physicians to document Medicare Part B services using ICD-9 codes that include the fourth and fifth digits, when they exist (see January ACP Observer, page 4 ). The rule was to have gone into effect April 1. Medicare carriers have been made aware of the new implementation date. Physicians should record the highest level of specificity when using ICD-9 codes to bill for outpatient services to provide the most accurate information about a patient's condition. As of July, carriers may reject claims that do not provide the required ICD-9 codes.

HCFA survey: practice expenses

HCFA is surveying approximately 5,000 solo and group practitioners as well as 800 nonphysician practices about their indirect costs--aggregate practice level costs and service mix. HCFA will use the responses to establish relative values that take into account indirect resource-based practice expenses. HCFA is relying on Clinical Practice Expert Panels comprised of physicians, practice administrators and nurses to provide data on direct costs--nonphysician labor, equipment and supplies--used in providing clinical services in office and nonoffice settings. The new values will be used for the Medicare Part B fee schedule, set to be implemented in January 1998.

HCFA used databases from the American Medical Association to randomly select physicians to participate in its "Survey of Practice Costs." Abt Associates, Inc., a private research firm in Cambridge, Mass., developed the survey to determine indirect practice costs. The survey does not ask about patient level or medical records.

Although participation is voluntary, the College encourages physicians who receive the survey to complete it. If you have questions about the survey, contact Sharon Mikolanis, RN, MHSA, ACP Senior Associate for Payment Policy, 800-633-9400.

HCFA issues rule for physician incentive plans in managed care

HCFA recently issued a regulation regarding managed care plans that might create incentives for physicians to undertreat patients. The regulation clarifies requirements in the Omnibus Budget Reconciliation Act of 1990.

The regulation requires those plans that contract with Medicare and Medicaid and operate physician incentive plans (such as capitation or withholds) to disclose to program beneficiaries any financial incentives that might encourage physicians to limit services. Health plans that place physicians or physician groups at "substantial" financial risk (i.e., more than 25% of their total payment is at risk for services they don't provide) must provide adequate stop-loss protection for the physicians and conduct beneficiary satisfaction surveys.

"Until we do a better job measuring quality and holding plans accountable for quality, this is a proxy," said Bruce Fried, HCFA's director of the office of managed care.

Information: Michael Werner, JD, ACP Senior Associate for Government Relations, 800-633-9400.

ACP seeks volunteers to evaluate new coding system

HCFA will be seeking input from the College and other medical specialty societies to review its new ICD-10 coding system. The system, being developed by 3M Health Information Systems, is comprised of seven-character codes instead of the current four-character codes. It will offer more flexibility in documenting hospital procedures than the current "ICD-9 CM Procedure Coding System" (volume 3) and will allow for advancements in medical technology.

Physicians with expertise in hospital procedure coding who would like to help the College evaluate the ICD-10 coding recommendations should contact Sharon Mikolanis, RN, MHSA, ACP Senior Associate for Payment Policy, 800-633-9400.

College honors Clinton administration's anti-smoking efforts

The College was part of a gathering of more than 100 medical and public health organizations that awarded President Clinton the National Public Service Award of the Coalition on Smoking OR Health in honor of the administration's efforts to prevent tobacco use, especially by young people.

The award is given in memory of former Rep. Mike Synar (D-Okla.) who was well-known for his courageous and groundbreaking anti-smoking advocacy in Congress. Rep. Synar died this year from a brain tumor.

Immediate Past ACP President Gerald E. Thomson, MACP, personally thanked President Clinton during a White House ceremony.

The College is an active member of the anti-smoking coalition and serves on its public policy advisory council. ACP supports the Food and Drug Administration's assertion that it has the proper legal authority to regulate the manufacture, sale, distribution, advertising and promotion of tobacco. The College added its voice to the growing anti-smoking campaign by taking the message to Capitol Hill as part of the 1996 Leadership Day (see "College leaders promote modest reform during Leadership Day," April ACP Observer).

Mary Herald appointed to HHS Practicing Physicians Advisory Council

Mary T. Herald, FACP, former ACP Governor for New Jersey, has been selected to serve a four-year term on the Practicing Physicians Advisory Council (PPAC). The 15-member council provides advice on federal regulations and carrier manual instructions related to physician services, before they are proposed by the Secretary of Health and Human Services. Issues currently under discussion include Medicare coverage regulation, the national provider identification project and end-of-life care. The PPAC meets quarterly and submits its recommendations in an annual report to the Secretary of Health and Human Services and the Administrator of the Health Care Financing Administration. Dr. Herald has a full-time private practice in endocrinology in Westfield, N.J.

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