In April, we pledged that HCFA staff and staff of our fiscal intermediaries would do everything possible to make the outpatient prospective payment system (PPS) effective on July 1, 2000. While we have been working as hard as we can and have achieved several important milestones toward this goal, there are others that we have missed. Further, our informal surveys of the hospital community indicate that a significant number of hospitals may not be prepared to implement the PPS on July 1.
Therefore, after careful consideration of the status of systems changes at HCFA's contractors and in hospitals around the country, I have concluded that we must take steps to postpone the effective date of the new PPS for one month, from July 1 to August 1. Claims received for outpatient services rendered on or after August 1, 2000, will be paid under the new PPS. Claims received for outpatient services provided before August 1 will be paid under current rules.
I have made this decision because I believe that it is virtually impossible for HCFA or the hospital industry to implement the new PPS on July 1. In particular, I am aware that the unavoidable delays on our part in meeting certain milestones--such as the delay of nine weeks from the original target date of April 1 to release the Claims Expansion and Line Item Processing (CELIP), the expanded claim form necessary for the new system--have also limited the ability of the hospital industry to prepare for the outpatient PPS.
I am distressed about having to postpone the benefits of the new system for beneficiaries, even if only for one month. That is why we must and will redouble our efforts to ensure that the new system is effective on August 1. In order to assure that beneficiaries are charged the correct co-insurance, I have asked the major hospital associations to help us urge the hospital industry not to collect deductibles or co-insurance from Medicare beneficiaries beginning August 1 until we notify them of the correct amount. In this way, we can ensure that most beneficiaries will be charged the correct, generally lower, co-insurance amounts when hospitals' claims are processed in August.
We understand that beneficiaries will need information about how the new system will affect them and we have a plan to communicate with them. In July, we will begin working together with hospitals to inform beneficiaries that changes in Medicare payments for hospital outpatient department services could mean changes in the amount of coinsurance that they will need to pay.
We will provide all hospitals with a "plain English" flyer to distribute to all beneficiaries. We will also inform beneficiaries that they should call HCFA's Medicare Choice Helpline, 1-800-MEDICARE (1-800-633-4227), for more information about the new payment system. Medicare customer service representatives will be available to answer questions and provide information about their bills.
We have developed contingency plans that would be triggered in the unlikely event that hospitals or community mental health centers (CMHCs) are unable to submit claims in the new format or that HCFA is unable to process claims under the PPS in a timely manner. We appreciate the suggestions offered by the major hospital associations on these plans, and we are carefully considering them. These contingency plans will help us all ensure that:
- Medicare beneficiaries will be charged the correct copayments under the new system;
- Medicare providers will continue to be paid; and
- The financial integrity of the Medicare program will be protected.
We are intensifying our efforts to provide clear and accurate training to fiscal intermediaries, hospitals, and CMHCs. On June 15, we will host a national satellite broadcast to assist hospitals in preparing for implementation. We are also compiling a booklet of "Frequently Asked Questions and Answers" that will be available both on the internet and in printed form. Other efforts include reconfiguring the PPS materials on the HCFA web site to facilitate access to relevant program instructions, training documents, and other materials. In July, we plan to host two face-to-face town hall meetings at the HCFA headquarters in Baltimore, Maryland: one for hospitals and one for CMHCs and other providers paid under the outpatient PPS. The purpose of these meetings will be to respond to any remaining concerns about the implementation of the new system. To ensure that our fiscal intermediaries remain up-to-date, and that we can respond to any contractor concerns, we are conducting weekly conference calls and will also provide them with a video to update their training. We also plan to continue our regularly scheduled teleconferences with hospital, CMHC, and other provider associations to keep them abreast of our implementation schedule, and to answer any questions.
This one-month postponement, while unfortunate, is critical to ensure that HCFA and the hospital and CMHC communities are ready to overcome the challenges posed by the implementation of the new outpatient PPS.
