NEWS YOU CAN USE: Cash In, Rural Health Clinics

• RHCs, FQHCs get a 2.8 percent payment increase for 2006
Effective Jan. 1, rural health clinics and federally qualified health centers will have higher upper Medicare payment limits per visit--but fiscal intermediaries (FIs) won’t retroactively adjust individual bills that Medicare paid at previous upper payment limits.
 
Providers billing Medicare FIs for services to beneficiaries in RHCs and FQHCs will enjoy a 2.8 percent increase over the 2005 payment limit, according to a Jan. 4 CMS Medlearn Matters article.
 
RHCs’ upper Medicare payment limit per visit has increased from $70.78 in 2005 to $72.76 for 2006, CMS says. Urban FQHCs’ upper payment limit has increased from $109.88 for last year to $112.96 in 2006, and rural FQHCs’ payment limit will be $97.13, as opposed to $94.48 in 2005. But providers shouldn’t expect their Medicare FIs to pay them retroactively under the higher payment limits, CMS says. However, FIs retain “the discretion to make adjustments to the interim payment rate (or a lump sum adjustment to total payments already made) to take into account any excess or deficiency in payments to date,” the agency says.
• Hospital wage index may not accurately reflect occupational mix
Proposed changes to the occupational mix survey show major idiosyncrasies, according to the Medicare Payment Advisory Commission.
CMS recently proposed changes to the occupational mix survey, which it will use to adjust hospital wage index computations. The adjustment reflects geographic differences in wage levels by taking into account variations in worker mixes in various labor markets.
In MedPAC’s review, it pointed out a mismatch between the hours and wages hospitals submit on their Medicare cost reports and those they’ll report on the occupational mix survey.
Current CMS policy allows hospitals to omit non-patient-care contract labor from cost reports, which could bias its average wage upward, especially for hospitals contracting many low-wage service workers. The occupational mix survey doesn’t account for this variation; instead, it requires hospitals to include contract labor in its reporting. As a result, the occupational mix may not reflect reported hours and wages accurately, MedPAC says.
MedPAC’s recommendation is twofold: 1. Adjust the survey to exclude non-patient-care contract worker hours and 2. Add a new category for reporting employee hours for frequently contracted labor. MedPAC also suggested adding categories to increase accuracy and reporting detail by reducing the number of workers that fall into the nebulous “other” bucket.

- Published on 2006-02-24