The Texas Provider Identifier (TPI) will be assigned and sent to providers (Medicaid, CIDC, managed care, and family planning) on February 1, 2000. Providers will be given a six-month transition period to begin using the TPI when Compass 21 is implemented. We encourage providers to begin using the TPI on May 1, 2000.

Pilot testing and deployment of TDHconnect for Compass 21 to current TDHconnect users will begin on February 1, 2000. It will be sent to you on CD-Rom and will include a Quick Start Guide that contains loading instructions. The Compass 21 version will be TDHconnect, Version 2.0. Deployment will be completed by March 31, 2000.

For providers that submit electronic claims to NHIC using a vendor/billing service, please inform your vendor that the vendor specifications have been posted at www.texmednet.com and are final as of July 2, 1999. It is required that all vendors test prior to the May 1, 2000 implementation of Compass 21. Vendor testing will begin on February 1, 2000.

Title XIX providers of family planning professional services will begin using the new family planning claim form 2017/electronic format on May 1, 2000. Until this time, providers of family planning professional services for Title XIX will continue to use the HCFA 1500 claim form/electronic format for submission of family planning services. Services billed by the hospital continue to be filed using the UB92 claim/format.

• CHRONICALLY ILL AND DISABLED CHILDRENíS (CIDC) PROGRAM

Nursing facilities that submit forms 3652, 3618, and/or 3619 to NHIC electronically will receive upgraded software that is Year 2000 compliant beginning on October 1, 1999. You may begin using this software upon receipt, but you must use it to submit these forms by January 1, 2000. Nursing facilities will begin using TDHconnect for submission of these forms on May 1, 2000.

Community Based Alternative providers who are HCSS agencies that submit forms 3652, 3618, and/or 3619 to NHIC electronically will receive upgraded software that is Year 2000 compliant beginning on October 1, 1999. You may begin using this software upon receipt, but you must use it to submit these forms by January 1, 2000. CBA providers will begin using TDHconnect for submission of these forms on May 1, 2000.

Long Term Care providers using CMSconnect were scheduled to begin using TDHconnect on November 1, 1999. This transition has been postponed until May 1, 2000. LTC providers using CMSconnect (which is Year 2000 compliant) should continue to do so until the new version of TDHconnect is issued to you with the implementation of Compass 21.

Until the implementation of Compass 21, NHIC will continue to process claims using our current system. This system has been remediated to be Year 2000 Compliant. NHIC has undergone four audits (Health Care Financing Administration-HCFA, Electronic Data Systems internal Year 2000, Texas Department of Health, and Texas Department of Insurance) to ensure readiness for Year 2000. The outcome of these audits was positive in every case.

As mentioned previously in this letter, all current users of TDHconnect will receive version 1.6 of TDHconnect, which is Year 2000 Compliant. You must begin using this version no later than January 1, 2000.

NHIC encourages all providers to ensure that your systems are Year 2000 compliant. If you are interfacing with vendors, we suggest that you request that your vendors verify that they are Year 2000 compliant. To assist you with your Year 2000 preparedness, NHIC and TDH have identified websites that contain helpful information. In addition we have included below a toll free number established by the Health Care Financing Administration (HCFA) to help answer questions related to Year 2000 preparedness.

As always, NHIC is ready to be of assistance to you in any of these matters. If you have any questions about the information in this letter, please call the Compass 21 Provider Hotline at 512-514-3609.

Sherry M. Travis
Compass 21 Provider Transition Manager

Osteopathic Physician Day on Capitol Hill

The American Osteopathic Association is looking for physicians wishing to participate in Operation OP DOC (Osteopathic Physician Day on Capitol Hill). Operation OP DOC is a forum where the osteopathic community travels to the nationís Capitol to influence policymaking.

• Mission - Storm the halls of Congress and tell policymakers about the needs of the osteopathic community.
• Location ñ Capitol Hill, Washington, D.C.
• Date ñ Thursday, April 13, 2000
• Players ñ D.O.s, physician spouses, students

Participants will receive cutting-edge briefing materials on pending health legislation, participate in advocacy trainings, attend AOA-scheduled meeting with their members of Congress and contribute to the political strength of the osteopathic community.

Anyone interested in participating in OP DOC should call 800/962-9008, ext. 225. Or, fax your name, home and work address, e-mail address and phone number to 202-544-3525; or e-mail to Hecker@aoa-net.org.

HCFA Announces 2000 Medicare Physician Fee Schedule

On November 2, 1999, the Health Care Financing Administration published the Medicare physician fee schedule for calendar year 2000 in the Federal Register..

Continuing reforms initiated in the 1999 fee schedule, the 2000 Medicare physician fee schedule relates payment for physician practice expenses to the actual resources used to provide medical services rather than physiciansí historical charges. A fully resource-based fee schedule reflects the relative resources involved in delivering a service, breaking the link with the physicianís historical charges.

The fee schedule specifies payments to physicians for more than 7,000 services and procedures ranging from routine office visits to cardiac bypass surgery. In 2000, Medicare is expected to spend nearly $37 billion on physician services.

In 2000, Medicare physician fees will reflect the relative costs each specialty incurs for malpractice insurance. With the full implementation of resource-based practice expenses in 2002, the Medicare fee schedule will be entirely resource-based.

The inclusion of malpractice insurance costs will have a modest effect on the fees. Of the 35 major medical specialties, HCFA estimates that 15 will experience payment increases and 19 will experience payment decreases, and one specialty will experience no change.

The 5.5 percent update is determined by a formula established by law. The law requires that the update in the annual physician fee schedule be equal to the Medicare Economic Index (MEI), increased or decreased based on expenditures compared to the Sustainable Growth Rate (SGR), a target for physician service expenditure growth. The MEI is an index of inflation in the cost of medical practice. If expenditures are less than the SGR, the update is increased. If the expenditures are more than the SGR, the update is decreased.

The final regulation also adjusts the physician practice expense relative value units by excluding costs associated with clinical staff accompanying physicians to a facility setting such as a hospital. Medicare pays for clinical staff through other payment systems. This change will decrease payments for some services that are performed primarily in hospitals and increase payments for many office-based services.

The final regulation also includes a discussion of the mandated five-year review of relative value units for physician work and a request for comments from the public on this process.

The resource-based practice expense component of the Medicare fee schedule is being phased in during a four-year transition that began January 1, 1999. Payments under the 2000 fee schedule are based on a blend of 50 percent of the resource-based practice expense system and 50 percent of the old, charge-based practice expense system. When the resource-based practice expense is fully effective in 2002, all components of the fee schedule, malpractice insurance expense and practice expense, will be resource-based.

Two Texas Locations Selected for NHANES Program

The National Center for Health Statistics is conducting a major study of the health and nutritional status of persons living in the United States. In Texas, El Paso County and Ellis County have been selected as survey locations during the current National Health and Nutrition Examination Survey (NHANES).

The survey is part of the U. S. Public Health Serviceís continuing study of the nationís health. During the past 38 years, similar surveys have been successfully conducted on various segments of the U. S. population, providing important data on health conditions and concerns. Data are collected through household interviews and standardized medical exams in a mobile medical center.

The survey began in El Paso County on December 13, 1999, and will run through March 13, 2000. Dates for Ellis county are from February 22 through March 24. A sample of about 500 people from each area are being asked to participate in the survey.

The survey examines risk factors, smoking, alcohol consumption, sexual practices, drug use, physical fitness and activity, weight, and dietary intake. Additionally, diseases, medical conditions and health indicators are studied.

The current program has added some new initiatives to be culled from survey findings. These include:

• Survey results will help the Food and Drug Administration decide if there is a need to change vitamin and mineral fortification regulations for the nationís food supply.

• The national programs to reduce hypertension and cholesterol levels continue to depend on NHANES data to steer education and prevention programs toward those at risk and to measure success in curtailing risk factors associated with heart disease, the nationís number one cause of death.

• New measures of physical fitness will further our understanding of its role in health and enhance the analysis of relationships between exercise and obesity and disease.

• In recent years, TB has reemerged as a major public health problem. Current information is not sufficient to adequately monitor the extent of the disease. NHANES will provide the first national data on TB infection in the U. S. population.

Results of NHANES will be used to determine the prevalence of major diseases and risk factors for diseases. Information will be used to assess nutritional status and its association with health promotion and disease prevention. NHANES findings are also the basis for national standards for such measurements as height, weight and blood pressure. Data from this survey will be used in epidemiological studies and health sciences research, which help develop sound public health policy, direct and design health programs and services, and expand the health knowledge for the nation.

TDH announces Changes in the Texas Controlled Substances Act

The Administrator of the Drug Enforcement Administration (DEA) has issued final rules concerning the following:

Ketamine, including its salts, isomers, and salts of isomers, has been placed into Schedule III of the Federal Controlled Substances Act. Ketamine hydrochloride is marketed in the United States as a general anesthetic for use in human medicine under the trade name Ketalar®. It is also marketed as a veterinary product under various names including Ketajet®, Ketaset®, and Vetalar®. This action was based on the following:

• Ketamine has a potential for abuse less than the other drugs or other substances in Schedules I and II;

• Ketamine is a FDA-approved drug product and has currently accepted medical use in treatment in the United States; and

• Abuse of ketamine may lead to moderate or low physical dependence or high psychological dependence.

Ketamine has been added to Schedule III of the Texas Controlled Substances Act.

Modafinil, including its salts, isomers, and salts of isomers, has been placed into Schedule IV of the Federal Controlled Substance Act. Modafinil is marketed in the United States as a central nervous system (CNS) stimulant for the treatment of excessive daytime sleepiness associated with narcolepsy under the trade name Provigil®. This action was based on the following:

• Modafinil has a low potential for abuse relative to the drugs or other substances in Schedule III;

• Modafinil is a FDA-approved drug product and has a currently accepted medical use in treatment in the United States; and

• Abuse of modafinil may lead to limited physical dependence and psychological dependence relative to the drugs or other substances in Schedule III.

Modafinil has been added to Schedule IV of the Texas Controlled Substances Act.

How to Handle Professional Courtesy

RESOLVED, THAT THE AMERICAN OSTEOPATHIC ASSOCATION REQUEST THE COUNCIL ON FEDERAL HEALTH PROGRAMS (COFHP) TO INITIATE, AT THE FEDERAL LEVEL, A NEW POLICY THAT WOULD ALLOW THE PRACTICE OF PROFESSIONAL COURTESY TO BE REINSTATED WITHOUT FEAR OF REPRISAL.

At COFHPís request, the AOA Washington Office examined the issue of professional courtesy. Based on information from the HHS Office of the Inspector General (OIG), the simplest way to continue the tradition of professional courtesy, without conflicting with federal law, is to provide the service for free. According to the OIG, a routine practice by a physician of waiving the entire fee for service provided to other physicians, without regard to the potential for referrals, is not a problem.

The OIG was questioned as to whether providing a free service would conflict with Section 1848(g)(4) of the Social Security Act. That provision requires physicians and suppliers to submit Part B claims processed by Medicare carriers within one year for services furnished on or after September 1, 1990. Physicians and suppliers who fail to submit a claim are subject to sanctions, monetary penalties of up to $2,000 per violation, and/or Medicare program exclusion. The OIG cited Section 1862 (Exclusions from Coverage; Basic Guidelines) which states "no payment may be made under Part A or B for any expenses incurred for items or services for which the individual furnished such items or services has no legal obligation to pay, and which no other person has a legal obligation to provide or pay for,..."According to the OIG, a physician may provide a service for free.

In the case of financial hardships, a physician may be able to discount or waive a fee only after the hardship has been proven. Discounts and fee waivers may violate the False Claims Act, the anti-kickback statutes, the Civil Monetary Penalties law, 42 USC 1320a-7a (a) 5, as amended by Pub. L. No. 104-91 section 231(h), and state laws.

The OIG states that discounts may not be appropriate unless the total fee is discounted or reduced. In such cases, the payor (Medicare, Medicaid, or any other private payor) should receive its proportional share of the discount or reduction. Otherwise, the physician is submitting a false claim. Even when the total fee is reduced and the insurer receives its proportional share of the discount, the physician still must charge a co-payment, according to the OIG. Physicians must make a good faith effort to collect co-payments, deductibles and non-covered services from federally and privately insured patients.

The Magistrate has Spoken

Federal Magistrate W. Thomas Rosemond, Jr., has determined that HCFA made "a reasonable interpretation of an unclear statute" in setting the base year for the transition to resource-based practice expense relative value units. He issued a ruling September 8, 1999.

Eleven specialty societies filed a lawsuit in 1998 arguing that HCFA should not use the adjusted 1998 PE-RVUs as the starting point when calculating the RVUs for 1999, 2000 and 2001. Plaintiffs contested the validity of the HHS Secretaryís interpretation of the statutory formula for a transition to a new fee schedule. Plaintiffs argued that the defendants violated the Medicare Act, the Administrative Procedure Act, and the plaintiffsí due process rights.

U.S. District Court Judge Ann Claire Williams will review the Magistrateís recommendation and issue an opinion. She is not bound by Rosemondís recommendation. The specialty societies have filed objections to the Magistrateís recommendations.

The Magistrate also rejected the governmentís argument that federal laws bar courts from ruling on the determination of relative value units. The law allows a challenge of whether HCFA "violated the Constitution or federal statutes while interpreting the statutory requirements for the transition to resource-based PE-RVUs."

The full text of the Magistrateís recommendation is available at the AOAís Washington Office. Contact Carol Monaco at 202-414-0145 for further information.

HIPDB on Hold for Now

October 1, 1999, was supposed to the start up date of the Health Care Integrity & Protection Data Bank (HIPDB) and the associated Integrated Querying and Reporting service (IQRS). The start up date has been postponed as a result of an indefinite delay in the clearance and publication of the final regulations, which will govern the HIPDB operations. There is no current estimation of time as to when the start up will occur. Until then, the current system for querying and reporting to the National Practitioner Data Bank will continue. For more information, check out the web site: www.npdb-hipdb.com.