Medicare Software Implementation To Delay Payments
CMS has asked hospitals across the country to hold off processing all outpatient claims for Medicare beneficiaries until a new software system is ready, the Wall Street Journal reports. The Outpatient Coding Editor software system was supposed to be ready Jan. 1 to process claims using new Medicare payment rates, but the system now won't be ready until April 1. CMS Administrator Tom Scully attributed the delay to a "series of payment rules" imposed by Congress that have complicated new Medicare payment rate regulations, meaning they take more time to implement. While the new system is being finished, CMS has asked contractors not to process outpatient claims for services such as same-day surgery or diagnostic tests for various procedures. The Journal reports that the total value of affected claims "could run into the billions of dollars"; next year, Medicare expects to spend $17.5 billion on outpatient medical bills. Even though CMS intends to pay facilities in full for services covered under Medicare, the delayed payments could "imperi[l]" many hospital that are already "financially troubled," as well as hospitals that treat a high volume of Medicare beneficiaries, the Journal reports.
In addition, the agency, unable until April 1 to determine the proper copayments for Medicare beneficiaries, has asked hospitals not to collect such payments from patients until after April 1. Hospitals have said the "delay of revenue" from copayments alone will be "devastating" because copayments represent 50% of hospitals' outpatient revenue. To alleviate some of the hospitals' concerns, CMS has said it will make "partial payments" to hospitals. During the first three months of 2002, the agency will pay hospitals "an amount equal to 90% of Medicare payments each hospital received from Sept. 1, 2001, to Nov. 30." The agency would later pay the difference between the 90% amount and "actual claims from Jan. 1 and April 1, plus interest." However, hospital groups say the partial payments "are unlikely to be enough." Scully said, "I don't blame (hospitals) for being upset." The Journal reports that this is the most recent in a series of problems between CMS and hospitals concerning 2002 Medicare outpatient payment rates. Hospital groups have said that the new Medicare payment codes are "fraught" with errors that will lead to "huge billing complications" (Martinez, Wall Street Journal, 12/14).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.