HCFA Increases 2001 ESRD Rates and Ambulance Services Update Factors - Government Activity - Brief Article

Healthcare Financial Management, April, 2001

HCFA has continued its effort to quickly update its end-of-year program memorandums (PMs) to account for provisions of the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act (BIPA) that expand Medicare coverage and increase payment rates and limits. Enacted in December 2000, BIPA provides the healthcare industry with $35 billion in Balanced Budget Act relief.

In February, HCFA published PM A-01-19 defining the 2001 and 2002 BIPA-revised composite rates for end-stage renal disease (ESRD) facilities in urban and rural areas. The new 2001 composite rate, which takes effect on April 1, 2001, will be $144.59, up 2.79 percent over the current 2001 rate. The current 2001 rate, an increase of 1.2 percent over the 1999 rate, was announced December 12 in PM A-00-94. However, BIPA was passed just after the PM's release. HCFA indicated at that time it would shorten the effective period of PM A-00-94 to March 31, 2001, to allow for implementation of the higher rate mandated by BIPA. (For more information, see the February 2001 "Updata.")

In addition, the revised 2002 composite rate, which becomes effective January 1, 2002, will be $144.05, reflecting a 2.4 percent boost over the previously announced 2002 rate. To read about the new ESRD composite rates, go to http://www.hcfa.gov/pubforms/transmit/A0119.pdf.> BIPA also required HCFA to revise the 2001 payment limit for ambulance services. In February, HCFA issued PM AB-01-22 announcing that the new reasonable-charge update factor for ambulance services will be 4.7 percent, a 2.0 percent increase over the 2001 update factors announced in September in PM AB-01-99. Carriers will use the revised update factor in calculating the 2001 inflation-indexed screen amount for ambulance services. (This update applies only to the 2000 reasonable charge screen amount.) Further, the reasonable-cost-per-trip update factor, which is used in calculating per-trip reimbursements for ambulance services, also will be 4.7 percent.

HCFA also has shortened the effective period of PM AB-01-99 to allow the revised update factors to be effective for services rendered July 1, 2001, through December 31, 2001. To read about the new update factors, go to http://www.hcfa.gov/pubforms/transmit/AB0122.pdf.> In another BIPA-mandated billing change, HCFA expanded Medicare coverage for colorectal screening. Medicare now will cover screening colonoscopies (code G0121) performed on or after July 1, 2001, for individuals not at high risk for colorectal cancer. HCFA limited the new benefit to one test per patient every 10 years. In addition, beneficiaries who underwent a covered screening flexible sigmoidoscopy must wait four years to qualify for a covered screening colonoscopy. For more information on the changes in colorectal screening, go to transmittal 769 at http://www.hcfa.gov/pubforms/transmit/R769HO.pdf.> Further, HCFA outlined the payment conditions for the BIPA provision extending coverage for the replacement of artificial limbs and prosthetic devices without consideration of continuous use or useful lifetime restrictions, if the ordering physician deems it necessary. HCFA stipulated that for Medicare to provide coverage, the ordering physician must determine that there has been a change in the patient's physiological condition or an irreparable change in the device's condition, or that the device requires repairs that would amount to more than 60 percent of the cost of a replacement device. The expanded coverage for these devices takes effect April 1, 2001. For more information on the coverage changes for replacing artificial limbs, go to PM AB-01-06 at http://www.hcfa.gov/pubforms/transmit/AB0106.pdf.>

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