Monday, March 31, 2003

WASHINGTON - It looks like some private insurers are ratcheting back reimbursement and pointing to HIPAA as their reason for doing so.

“I’m hearing a lot of these complaints, and it’s something that is an unintended consequence of HIPAA, and we’re going to have to look at ways to address it, whether it is through the association or through individual companies dealing directly with their managed care (customers),” said Asela Cuervo, sr. vp of government relations at AAHomecare.

Payers must switch to HIPAA’s national coding system by Oct.16, which entails exchanging their local codes for Medicare’s HCPCS. In implementing the change, reports have surfaced that some payers are: 1.) eliminating codes and thus reimbursement for some products; 2.) reducing reimbursement as they make the switch.

Case in point: Jim Clark, president of Clark Respiratory and Medical Supply in Catskill, N.Y., recently saw his monthly reimbursement for portable oxygen systems drop $40 per patient when area MCOs adopted the HCPCS.

For a portable oxygen system, MCOs used to reimburse Clark $40 for a conserver and $15 for the regulator. Clark billed the consever under a miscellaneous code. Some of his MCOs - those now using the HCPCS - have dumped the miscellaneous code. Since Medicare doesn’t have a code for conservers and bundles it under the HCPCS for a regulator, the MCOs intend to do the same. As a result, Clark has lost $40 a month per patient providing MCO patients with portable oxygen. His payers did not increase the $15 a month they pay for regulators/conservers. Medicare pays $38 for that combo.

“A lot of the (insurers) are beginning to sing the same song,” Clark said. “Those that are still allowing it are saying, ‘We’ll allow it for a little while, but once HIPAA is in place there is no code. What do you want us to do. We don’t’ know how to do it.”

While some MCOs may balk at using a miscellaneous code for products that don’t have designated HCPCS, don’t look for this problem to spread far and wide. For the most part, private insurers seldom need miscellaneous codes. Additionally, like Medicare, most already bundle their portable oxygen benefit, said Vickie El-Hout, billing supervisor for Allegro Medical Billing in Tampa, Fla.

Regardless, given Clark’s problems and others surfacing around the country, it’s apparent that HIPAA implementation needs more oversight, Cuervo said.

“CMS has sort of taken the position that, ‘Congress told us to do this, and we’re doing it, but that is as far as we are going to go. We’re not going to actually tell people how to do it. We’re just going to say you have to do it.’” HME