Provider Types Affected

Inpatient rehabilitation facilities (IRF) submitting claims to Medicare contractors (fiscal intermediaries (FI) and/or Part A/B Medicare Administrative Contractors (A/B MAC)) for services provided to Medicare beneficiaries

Provider Action Needed

Impact to You

This article is based on CR 5965 which instructs Medicare contractors to install the April Inpatient Rehabilitation Facility (IRF) Prospective Payment System (PPS) Pricer.

What You Need to Know

CR 5965 updates the Fiscal Year 2008 (FY08) standard payment conversion factor from $13,451 to $13,034, effective for discharges on or after April 1, 2008, and it adds the default Case Mix Group (CMG) of A9999 as a valid CMG to allow “informational only” claims for Medicare Advantage (MA) patients to be processed, effective for discharges on or after October 1, 2006.

What You Need to Do

See the Background and Additional Information sections of this article for further details regarding these changes.

Background

The purpose of Change Request (CR) 5965 is to:

• Update the standard payment conversion factor per the Medicare, Medicaid, and State Children’s Health Insurance Program (SCHIP) Extension Act of 2007 (Section 115), and
• Provide hospitals with a mechanism to submit “informational only” bills to Medicare for Medicare Advantage (MA) patients.

The following background is provided regarding these issues:

Fiscal Year 2008 Standard Payment Conversion Factor (Effective October 1, 2007)

On August 24, 2007, the Centers for Medicare & Medicaid Services (CMS) issued CR 5694 to outline the prospective payment rates applicable for Inpatient Rehabilitation Facilities (IRFs), effective for Fiscal Year (FY) 2008. CR 5694 also instructed the standard system maintainer to install the new IRF Prospective Payment System (PPS) Pricer that contained updated FY 2008 rates, which set the standard payment conversion factor (also known as the standard Federal rate) at $13,451. You can review the MLN Matters article related to CR 5694 at http://www.cms.hhs.gov/MLNMattersArticles/downloads/MM5694.pdf on the CMS Web site.

“Informational Only” Billing for Medicare Advantage (MA) Patients (Effective October 1, 2006)

On July 20, 2007, CMS issued CR 5647 to require hospitals to submit “informational only” bills to their Medicare contractor for the MA patients they treat, in order for the days to be eventually captured in the Disproportionate Share Hospital (DSH) (or low income patient (LIP) for IRF) calculations. You can review the MLN Matters article related to CR 5647 at http://www.cms.hhs.gov/MLNMattersArticles/downloads/MM5647.pdf on the CMS Web site.

Standard Payment Conversion Factor Update

The Medicare, Medicaid, and SCHIP Extension Act of 2007 (Section 115) amended the Social Security Act (Section 1886(j)(3)(C)) to apply a 0.0 percent increase to payment rates for IRFs for part of FY 2008. You can find Section 1886(j)(3)(C) of the Social Security Act at http://www.ssa.gov/OP_Home/ssact/title18/1886.htm on the Internet.

Note that the new rates will become effective for discharges occurring on or after April 1, 2008, and will apply to the last two quarters of FY 2008 (from April 1, 2008 through September 30, 2008).

Payment rates for the first two quarters of FY 2008 (from October 1, 2007 through March 31, 2008) will continue to be based on the 3.2 percent market basket increase that was implemented in the FY 2008 IRF PPS Final Rule (72 FR 44284). You can review 72 FR 44284 at http://a257.g.akamaitech.net/7/257/2422/01jan20071800/edocket.access.gpo.gov/2007/pdf/07-3789.pdf on the Internet.

Effective April 1, 2008, the new IRF standard payment conversion factor will be $13,034 . Applying this new standard payment conversion factor to the case-mix group relative weights published in the FY 2008 IRF PPS final rule (72 FR 44284, 44293 through 44297) results in the new IRF payment rates listed at: http://www.cms.hhs.gov/InpatientRehabFacPPS/07_DataFiles.asp#TopOfPage on the CMS Web site. You can review 72 FR 44284 and 72 FR 44293 through 44297 at http://a257.g.akamaitech.net/7/257/2422/01jan20071800/edocket.access.gpo.gov/2007/pdf/07-3789.pdf on the Internet.

“Informational Only” Billing for MA Patients

For IRF “informational only” claims (Type of Bill 111 with a condition code 04) for MA patients with discharges on or after October 1, 2006, CMS is instructing IRFs to submit a default Case Mix Group (CMG) code of A9999.

Note: Prior to the implementation of this CR 5965, CMS has been instructing IRFs, on a case-by-case basis, to use any CMG until a default Health Insurance Prospective Payment System (HIPPS) code could be considered a valid CMG in the IRF Pricer software.

In summary, CR 5965 instructs your Medicare contractor to:

• Update the FY 08 standard payment conversion factor from $13,451 to $13,034, effective for discharges on or after April 1, 2008; and
• Add the default CMG of A9999 as a valid CMG to allow “informational only” claims for MA patients to be processed, effective for discharges on or after October 1, 2006.

In addition, CR 5965 instructs your Medicare contractor to install and pay IRF claims with the April 2008 IRF PPS Pricer.

Additional Information

The official instruction, CR 5965, issued to your FI and A/B MAC regarding this change may be viewed at http://www.cms.hhs.gov/Transmittals/downloads/R1479CP.pdf on the CMS Web site.

If you have any questions, please contact your FI or A/B MAC at their toll-free number, which may be found at http://www.cms.hhs.gov/MLNProducts/downloads/CallCenterTollNumDirectory.zip on the CMS Web site.

Disclaimer This article was prepared as a service to the public and is not intended to grant rights or impose obligations. This article may contain references or links to statutes, regulations, or other policy materials. The information provided is only intended to be a general summary. It is not intended to take the place of either the written law or regulations. We encourage readers to review the specific statutes, regulations and other interpretive materials for a full and accurate statement of their contents.