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Health Care Compliance

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Even those in the health care arena used to a host of new acronyms, will find RQHDAPU a tongue twister. However it is something that everyone should understand, not just compliance officers. Financial officers and attorneys will certainly hear about it when hospital revenues are impacted for failure to comply with new reporting requirements for hospital quality data. Financial officers caught off guard will want to know how to appeal CMS decisions to reduce their payment levels. This article is intended to introduce this subject to those not familiar with this program.

CMS has imposed an ever-growing number of requirements upon hospitals that must be met to ensure that they receive their full Prospective Payment System (“PPS”) update. CMS implemented the RHQDAPU program in August 2004. The initiative was initially developed as a result of the Medicare Prescription Drug, Improvement and Modernization Act (MMA) of 2003. Section 5001(a) of Pub. 109-171 of the Deficit Reduction Act (DRA) of 2005 set out new requirements for the RQHDAPU program, which build on the ongoing voluntary Hospital Quality Initiative.

That initiative is intended to equip consumers with hospital quality of care information to make more informed decisions about their health care, while encouraging hospitals and clinicians to improve the quality of inpatient care provided to all patients. The hospital quality of care information gathered through the initiative is available to consumers on the Hospital Compare website.

The RHQDAPU initiative requires “sub-section (d)” hospitals to submit data for specific quality measures for health conditions common among people with Medicare, and which typically result in hospitalization. For fiscal year 2009, CMS requires that hospitals submit data regarding 30 quality measures.

Statutory provisions were amended in 2006 by the Deficit Reduction Act (“DRA”) of 2005 so that beginning in FY 2007; acute care hospitals face a reduction of 2% in their annual PPS update for a given year, unless they submit certain hospital quality data to CMS. To avoid the reduction in their Annual Payment Update, hospitals must meet specific requirements outlined in the RHQDAPU for FY 2009. The DRA amendment to the statute also modified the requirements pertaining to the quality measures to be reported. CMS was instructed to expand the number of quality measures subject to the data submission process.

In addition, CMS has also created a separate validation process involving reviewing 5 medical records per quarter, randomly selected by its contractor. This re-abstraction is then compared to the hospital’s abstraction to determine validation. For 2008, hospitals must meet an 80 percent validation rate in order to receive the full PPS Update; otherwise a 2% reduction is levied. Of particular import here, CMS allows hospitals only 30 days to respond to the request for validation records. Failure to submit a medical record within this timeframe results in the assignment of a zero-percent agreement. CMS characterizes such a result as technical non-compliance.

It is reasonable to assume that CMS will continue to ratchet up the number of quality indicators and percent of PPS subject to penalty for failing to meet these standards. The importance of hospitals tracking and reviewing their submittals and requests for validation and compliance cannot be overstated. For hospitals that fail to submit the required data or who do so but fail to meet the 80% standard, there will be a reduction in the PPS payment by 2% and that will be a big hit on the revenue cycle for the hospital.

Certain appeal rights are available to hospitals that do not receive their full PPS update, however this can be very problematic. How a hospital initially proceeds can be critical in recovering their lost revenue. It would be advisable to study this process in advance of any problem so as to be sure that you understand the judicious way to seek redress of any PPS reduction as result of RHQDAPU.

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