Comment Letter on Fiscal
Year 2001 Medicare Prospective Payment System Proposed Rule
June 30, 2000
Nancy-Ann Min DeParle, Administrator
Health Care Financing Administration
Room 443-G
Hubert H. Humphrey Building
200 Independence Ave, SW
Washington, DC 20201
Attention: File Code HCFA-1118-P
Dear Administrator Min-DeParle:
The Association of American Medical Colleges (AAMC) welcomes
this opportunity to comment on the Health Care Financing Administration's
(HCFA or the Agency) proposed rule entitled "Medicare
Program; Changes to the Hospital Inpatient Prospective Payment
Systems (PPS) and Fiscal Year 2001 Rates," 65 Fed.
Reg. 26282 (May 5, 2000). The AAMC represents over 400 major
teaching hospitals; all 125 accredited U.S. medical schools;
86 professional and academic societies; and the nation's medical
students and residents.
This letter addresses two issues: Medicare teaching payments
for residents training in nonhospital sites and a new diagnosis-related
group (DRG) for joint kidney and pancreas transplants
Medicare Payments for Residents Training in Nonhospital
Sites
In the May 5 publication, HCFA proposes a new methodology
for determining direct graduate medical education (DGME) payments.
This new methodology will affect DGME payments associated
with residents training in both hospital and nonhospital sites.
Medicare currently pays teaching hospitals the costs associated
with residents educated in nonhospital sites so long as the
teaching hospital incurs "all or substantially all"
of the costs of the residency training in those sites. Effective
as of January 1, 1999, "all or substantially all"
includes compensation for teaching physician supervisory activities.
The AAMC strongly supports ambulatory training in nonhospital
sites. However, we remain concerned that requiring hospitals
to demonstrate that they are incurring supervisory costs in
order to receive Medicare teaching reimbursements may result
in fewer residents training in these sites. Moreover, there
continues to be confusion regarding HCFA's policy on physicians
who volunteer to supervise residents.
In the FY 2000 PPS Final Rule (July 30, 1999), HCFA stated
that it would continue its volunteer supervisory physician
policy and that "[h]ospitals may receive payment for
the costs of training physicians in the nonhospital site even
though the hospital might not be incurring any costs for supervisory
physician activities." (July 30 Final Rule at page 41518).
Medicare Program Memorandum A-98-44 (December, 1998) also
recognizes that physicians may volunteer their time spent
in supervisory activities.
Despite these pronouncements, communications with HCFA staff
suggest that there continues to be ambiguity on HCFA's volunteer
physician policy. The AAMC respectfully requests that HCFA
explicitly state that, so long as the other criteria are met,
hospitals may receive DGME payments for residents training
in nonhospital sites when they do not incur supervisory costs
if the written agreement, which is signed by both the hospital
and nonhospital site, indicate that the supervisory physician
has agreed to volunteer his time in supervising activities.
New DRG for Joint Kidney/Pancreas Transplants
In the fiscal year 2000 PPS final rule (July 30, 1999), HCFA
published notification that, effective July 1, 1999 Medicare
would cover pancreas transplants if they are performed with
or after a kidney transplant. Under the current DRG assignment
process, if the pancreas transplant is performed simultaneously
with the kidney transplant, the case is assigned to DRG 302
(Kidney Transplant) and, therefore, receives the same payment
as a kidney-only transplant. If it is performed following
a kidney transplant, in a different hospitalization, it is
assigned to DRG 468 (Extensive OR procedure Unrelated to Principal
Diagnosis).
In response to a comment suggesting that joint pancreas/kidney
transplants may be more costly to perform than kidney-only
transplants, HCFA stated in the July 30, 1999 final rule that
it would review 1999 MedPAR pancreas/kidney transplant data
to determine whether these cases should be reassigned to a
different DRG or whether a new DRG should be created. In this
year's proposed rule, HCFA reported that the 1999 MedPAR data
contained 49 dual pancreas/kidney transplants, which HCFA
claims is an insufficient sample size to warrant creation
of a new DRG.
The AAMC believes that HCFA must re-evaluate its determination
not to create a new DRG this year for joint pancreas/kidney
transplants. According to our members, performing a joint
pancreas/kidney transplant is more costly than a kidney-only
transplant due to items such as pharmaceuticals, laboratory
tests, and additional operating room costs. Consequently,
these cases are underpaid every time they are performed. Given
the fragile financial state of many of the institutions that
perform these life-sustaining procedures, it is imperative
that the joint pancreas/kidney transplants are paid an amount
that more closely corresponds to actual resource costs.
According to the United Network for Organ Sharing (UNOS),
1,213 pancreas /kidney transplants were performed in 1999.1
Although these data were not stratified according to Medicare
patient eligibility status, it is highly likely that many
more than 49 dual transplant cases were performed on Medicare
beneficiaries in 1999.
One likely reason for the relatively low number of dual transplant
cases in the 1999 MedPAR file is HCFA's error regarding the
code assignments (see May 5 Federal Register at page 26,294).
In some cases, this error resulted in claim rejections that
were subsequently paid after December 31, 1999. In any event,
hospitals that perform dual transplants should not be penalized
because of an error not within their control.
The AAMC urges HCFA to reevaluate the data available on pancreas/kidney
transplants. If possible, HCFA should query the MedPAR file
for claims data from after December 31, 1999 to determine
if more cases exist. The AAMC also offers its assistance in
surveying our members on utilization and cost data for these
procedures. A determination of whether a new DRG is necessary
should not be deferred if there are credible means of obtaining
the necessary data.
Medicare Disproportionate Share Payments
The proposed rule discusses the requirement under the Balanced
Budget Refinement Act (BBRA) for HCFA to collect data from
hospitals on costs incurred for providing services that are
not compensated. These costs include non-Medicare bad debt
and charity care. These data are required for cost reporting
periods beginning on or after October 1, 2001. The proposed
rule indicated that HCFA will be revising its cost report
instructions to hospitals for FY 2002 to capture these data.
The AAMC would be happy to assist HCFA in identifying the
data elements necessary to carry out the BBRA mandate. It
is important that the cost report instructions collect the
necessary data without imposing undue administrative burden
on hospitals.
Conclusion
Thank you for this opportunity to present our views. We would
be happy to work with HCFA on any of the issues discussed
above or other topics that involve the academic health care
community.
If you have questions concerning these comments, please feel
free to call Robert Dickler, Senior Vice President of the
Association, or Karen Fisher, Associate Vice President, both
of whom may be reached at (202) 828-0490.
Sincerely,
Jordan J. Cohen, M.D.
1.Based on UNOS OPTN/Scientific
Registry data as of April 4, 2000.
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