Maine Hospital Association,

Testimony of David Winslow,
Vice-President, Maine Hospital Association
Regarding
MaineCare Benefits Manual Rule Changes
Chapters 2 and 3, Section 45, Hospital Services
June 13, 2007

Good afternoon, my name is David Winslow, Vice-President of the Maine Hospital Association. The Maine Hospital Association represents all 39 acute care and specialty hospitals in the State of Maine as well as their affiliates. Our acute care hospitals are nonprofit, community-governed organizations with more than 800 volunteer community leaders serving on the boards of Maine's hospitals. Maine is one of only a handful of states in which all of its acute care hospitals are non-profit.

This change to the MaineCare Benefits Manual proposes to reduce reimbursement rates for hospital-based physicians from 100% of allowable costs to 89.7% of allowable costs. This rate change would apply to both Critical Access Hospitals and non-Critical Access Hospitals. The proposed change also requires that certain hospital-based physician costs be billed on the CMS-1500.

While we cannot be supportive of any MaineCare rate reduction that shifts the costs of providing services to MaineCare patients to other payers, we understand some of the budget constraints facing the Department this year, so I will focus my comments today on the requirement that certain hospital-based physician costs be billed on the CMS-1500.

45.03 - 1 Acute Care Non-Critical Access Hospitals Prospective Interim Payment

This section uses the term "outpatient emergency room hospital-based physician costs" when describing what will be included in the Prospective Interim Payment and then removes "outpatient physician services expected to be billed and paid on the CMS-1500" later in the calculation to get to the total annual PIP obligation amount. This language apparently attempts to describe what types of hospital-based physician claims will be included in the PIP payments and then identifies which physician claims will be required to be billed on the CMS-1500 and removes them from the Prospective Interim Payment. This proposed language, however, is inconsistent with other sections of the proposed regulation and is also inconsistent with the Department's own billing instructions which were sent out on May 30, 2007 and which I have attached to my testimony.

The billing instructions clearly state that "only hospital-based primary care providers will be required to change their billing practices".

The billing instructions further go on to state that "Primary care practices that are considered Medicare provider based entities will have MaineCare billing requirements that mirror Medicare's billing requirements. This includes submitting primary care professional fees for physician and mid-levels on a CMS-1500 (or its electronic equivalent) and submitting the facility fee and other services provided on a UB04 (or its electronic equivalent).

These billing instructions are consistent with our prior conversations with Medicaid Director Tony Marple and other Department staff regarding these proposed changes.

We therefore ask you to amend this section of the rule so that all hospital-based physician payments are included in the first calculation and then only the amounts associated with the provider based entities specifically described in the billing instructions are removed from the Prospective Interim Payment.

NOTE: This section further states that the PIP amount will be limited to 72% of the calculated amount. We have been told that this provision will be eliminated in another proposed rulemaking in the coming weeks to bring the 2008 PIP payment amounts into compliance with the agreement between Governor Baldacci and the Maine Hospital Association which was executed in October of 2006.

Section 45.03 Acute Care Non-Critical Access Hospital
Subsection B. Outpatient Services and Subsection C. Other Components

These sections again use the term "non-emergency room outpatient hospital-based physician costs" and is not consistent with the May 30, 2007 billing instructions. We request that these sections be changed to be consistent with the billing instructions.

Section 45.04 Acute Care Critical Access Hospitals

This section again uses the term "outpatient physician services expected to be billed and paid on the CMS 1500" and we request that this section be changed to be consistent with the May 30, 2007 billing instructions.

Section 45.11 Billing Instructions

This section does reference the billing instructions but should be more specific about which primary care providers this covers. This would also be the appropriate section of the proposed regulation to tie everything together and make this rule and easier to understand by having these definitions and instructions as clear and consistent as possible.

Effective Date

The effective date of this proposed regulation is July 1, 2007. Given that the comment deadline is June 24, 2007 - there is no way that this regulation will be effective until well after July 1, 2007. It is sometimes appropriate to make regulations retroactive such as a retroactive reimbursement rate that has been properly published and advertised. It is not be appropriate to make billing standards retroactive. This type of retroactive change would cause confusion for the providers and the Department and is not necessary. We have also been told recently that all of the affected practices will have to be issued new provider identification numbers. It is unclear how many practices will actually be impacted by this billing change, but our guess is that it could be well over 100. At this point we are unaware that the Department has issued even one new identification number and it would be close to impossible to have all of the identification numbers issued in the next three weeks so they could be used on July 1, 2007.

We have been told multiple times that MECMS can easily process all new claims from all newly enrolled providers, however, anytime MECMS experiences something new there is a chance it might not work properly.

For these reasons, we ask you to extend the effective date of the new billing requirements to at least October 1, 2007 and to consider some sort of phased in implementation. This would give your staff and the billing staff at the hospitals the appropriate time to get their new ID numbers and begin this new billing in a rational way.

Thank you for the opportunity to comment on these rule changes and I would be happy to answer any questions.

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