A number of states recently made changes to their Medicaid prospective payment systems, according to an Industry Insight published by Ingenix. These states include:

• Georgia – Switching to the Version 24 CHAMPUS Grouper from Version 16 CHAMPUS DRGs
• Michigan – Effective Jan. 1, 2008, Michigan Medicaid implemented Version 25 of the Medicare DRG Grouper, and applies Michigan-specfic DRG weights.
• New York – Effective Jan. 1, 2008, the New York Department of Health transitioned to using a prospective payment system based on Version 25 of the All-Patient DRGs (AP-DRGs).
• North Carolina – At the start of its fiscal year (Oct. 1, 2007), the North Carolina Division of Medical Assistance (NC DMA) implemented the Medicare Version 24.0 DRG assignment rules. Also, NC DMA will continue to replace MDC 15 with 10 North Carolina-specific neonatal DRGs.
• Ohio – The state added new high trim points and cost outlier thresholds, effective Jan. 1, 2008.

Additional details about these changes can be found in the Industry Insight document link above. If you have questions regarding the prospective payment programs described above, or if you need software to assign appropriate casemix measures and calculate state-specific reimbursement, please contact Ingenix at 1-866-222-1298 or msdrg@ingenix.com.
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Cigna HealthCare announced this month that is has joined the ranks of insurers that will no longer pay for hospital-acquired conditions (HACs) and never events, starting Oct. 1, 2008. Both Aetna and Wellpoint have taken similar positions, as previously reported in this blog.

Cigna's list of events that it will not pay for include the eight conditions that CMS selected to not reimburse, plus "never events," such a surgical procedures that performed on the wrong side, site, body part or patient.
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Inpatient reimbursement is expected to increase by 4.1 percent, if the Proposed Rule issued by CMS for fiscal year 2009 becomes final. Within the Proposed Rule, CMS states:

"We estimate that total FY 2009 operating payments will increase 4.1 percent compared to FY 2008, largely due to the statutorily mandated update to the IPPS rates. This amount also reflects the -0.9 percent FY 2009 documentation and coding adjustment to the IPPS national standardized amounts..."

The increase includes the effects of the 3.0 percent market basket update, according to CMS, and the total increase will amount to $3.96 billion in fiscal year 2009.
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Hospitals will lose money under MS-DRGs, unless they implement documentation improvement programs that include coders, clinicians, case managers and any other staff that documents care delivery. This statement is taken from an article by Janis K. Oppelt, "Improving Documentation for Better Coding," published in the April 7, 2008 issue of Advance for Health Information Professionals.

According to the article, documentation-improvement programs should include the following elements:
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The Centers for Medicare and Medicaid Services (CMS) announced a proposal to add nine conditions to the list of Hospital Acquired Conditions (HACs) for which it will not reimburse hospitals, and to add 43 conditions to Medicare's quality reporting initiative. The annoucement was part of the Proposed Rule for Medicare's Inpatient Prospective Payment System (IPPS) for fiscal year 2009.

The proposed HACs include:
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Another major health plan has announced in April that it will no longer reimburse for specific "preventable adverse events" and "never events."

As of Oct. 1, 2008, WellPoint will no longer pay for 11 preventable errors. These include the same eight conditions that CMS has selected to not reimburse for as of Oct. 1, plus WellPoint has added three additional scenarios:
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For the fourth consecutive year, the Ingenix Web.Strat™ coding, compliance and reimbursement management solution from Ingenix has earned a top ranking in the KLAS report. Specifically, Web.Strat had the first-place ranking in the general market software category of “Medical Records Coding” in the “Top 20: 2007 Year-End Best in KLAS” report published by KLAS Enterprises, LLC.

Web.Strat is the browser-based version of the WinStrat encoding solution. Web.Strat’s web-based deployment enables an organization’s staff members – regardless of their location – to follow the same coding policies and guidelines. Additional information about Web.Strat can be found here.
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In the couple years a great many regulatory changes have impacted the inpatient care market, ranging from the revamping of the DRG system, to the introduction of recovery audit contactors.

With all of these changes, just what are the industry’s top 10 compliance challenges? To find out, two attorneys from the law firm Foley & Lardner LLP asked this question to 50 of their colleagues who work on compliance issues in private practice and as in-house counsel. The article, “What are the Top 10 Compliance Challenges for Hospitals?” appears in the March 26, 2008 issue of Report on Medicare Compliance.
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The article "OIG Work Plan Steps Up Focus on Quality" in the January 2008 issue of Coding Compliance Strategies offers some interesting perspectives on the role that internal audits can play.

Some highlights from the article include:
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