Advisory group aids HFMA's capital PPS activities - prospective payment system; Healthcare Financial Management Association - Healthcare Financial Management Association News

Healthcare Financial Management, May, 1992

On Oct. 1, 1991, Medicare's prospective payment system (PPS) for hospitals' inpatient capital costs went into effect, beginning for hospitals what promises to be a difficult 10-year transition to the new payment methodology.

To deal with questions or problems prompted by this transition, HFMA has formed the Capital Advisory Group--a group of HFMA members from hospitals, state hospital associations, and consulting firms who analyze the changes necessitated by capital PPS, keep abreast of capita PPS applications in hospitals, and maintain communication with the Health Care Financing Administration (HCFA) to help overcome any capital PPS obstacles.

During its first few months, the Capital Advisory Group met frequently via conference call to review various documents released by HCFA that facilitate the implementation of capital PPS. The group members also share personal and chapter-wide experiences concerning capital PPS.

To date, the group has assisted HFMA in a variety of ways, including: helping write the Association's comment letter to HCFA on the initial capital PPS proposal released in February 1991; analyzing four sets of instructions to fiscal intermediaries (FIs) concerning audits and the setting of interim payment rates; and analyzing HCFA's proposed Provider Reimbursement Manual revision concerning capital PPS and revisions to the Medicare cost report.

As a result of the group's activities, some solutions to problems identified through capital PPS analysis have been found; several other areas of concern are still under discussion by HFMA staff and HCFA staff, as advised by the group.

The HFMA Capital Advisory Group members are:

* Wayne Cafran, senior consultant,

KPMG Peat Marwick, New York,

N.Y.;

* Paul Fiduccia, partner, Winston &

Strawn, Washington, D.C., and

counsel, National Council of

Health Facilities Finance

Authorities, Washington, D.C.;

* James R. Hart, vice president of

fiscal services, Colorado Hospital

Association, Denver, Colo.;

* Glen I. Kazahaya, vice president

of finance, Delaware Valley

Hospital Council, Philadelphia, Pa.;

* Wilbert E. Paschal, CPA, assistant

vice president of health financing

resources, Hospital Corporation

of America, Nashville, Tenn.;

and,

* Dalton Tong, vice president for

finance, Greater Southeast

Community Hospital, Washington,

D.C.

Marion Torchia, PhD, HFMA director, policy and government relations, coordinates Capital Advisory Group activities. Questions or suggestions for the group should be directed to Torchia in the Washington, D.C., office at (800) 252-HFMA, ext. 601.