Oct. 17

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• Hospitals Notified of Medicaid DSH Payment
• THHSC Tightens National Drug Coding Reporting Requirements
• TRICARE Changes May Impact Texas Hospitals
• Early Voting Begins Next Week; HOSPAC Congressional Endorsements Announced
• IHI Urges Commitment from Governing Boards
• Important Dates
• Educational Opportunities
• Legal Update
• Texas Register Highlights 

Hospitals Notified of
Medicaid DSH Payment

On Oct. 10, the Texas Health and Human Services Commission mailed letters notifying Texas hospitals of tentative eligibility for participation in the state fiscal year 2009 Medicaid disproportionate share hospital payment program. Hospitals have until Oct. 24 to submit in writing a request for review of the data used to determine eligibility and DSH payment. 
    As detailed in the Medicaid DSH payment rules, the written request must contain specific documentation supporting the hospital's contention that THHSC made factual or calculation errors. In addition, a hospital must submit all additional documentation within 30 calendar days of the date of notification.
    The amount of available Medicaid DSH funding for state fiscal year 2009 still is under consideration by THHSC. Several key factors may alter dramatically the amount of DSH payments a hospital may receive, including the negotiation and implementation of the federal Medicaid reform waiver. If the reform waiver is implemented, it is expected that THHSC will transfer more than $150 million from the FY2009 disproportionate share pool into the Texas Health Opportunity Pool. 
    Other factors affecting the distribution include the expectation that a large number of DSH appeals will be filed and that the Centers for Medicare & Medicaid Services will make final adjustments to the 2009 federal DSH allotment. (John Hawkins/Jennifer Banda J.D./John Berta)

• A timeline by which the hospital will come into compliance with federal requirements to submit claims for physician-administered drugs using the NDC; and
• A description of any contingency plans that will be implemented to prevent any negative impact to patient care if the hospital cannot comply with federal reporting requirements by Jan. 1.

    In discussing the letter with THHSC staff, the Texas Hospital Association determined that hospitals located in hurricane-affected areas or hospitals already in compliance with NDC reporting requirements are not required to submit a timeline or contingency plan. However, hospitals located in hurricane-affected areas will be required to fully implement all NDC reporting requirements, effective Jan. 1. THHSC has provided a list of hospitals defined by the agency as located in hurricane-affected areas. 
    In addition, the letter also notifies hospitals that, if the Centers for Medicare & Medicaid Services subsequently were to withhold funds from THHSC for payments issued to hospitals for drug claims submitted without an NDC, THHSC may elect to pursue recovery of those payments directly from the hospital.
As illustrated in the following table, hospitals must submit valid NDC codes beginning Jan. 1. However, TMHP will continue to apply an edit and deny payments for non-reporting of the top 20 most common Medicaid drugs. 

U.S. Senate (six-year term)
*John Cornyn (R), Dallas     

U.S. House of Representatives (two-year term)
District 1 –*Louie Gohmert (R), Tyler      
District 2 –*Ted Poe (R), Humble   
District 3 –*Sam Johnson (R), Plano
District 4 –*Ralph Hall (R), Rockwall
District 5 –*Jeb Hensarling (R), Dallas
District 6 –*Joe Barton (R), Ennis
District 7 –*John Culberson (R), Houston
District 8 –*Kevin Brady (R), The Woodlands
District 9 –*Al Green (D), Houston
District 10–*Michael McCaul (R), Austin
District 11–*Mike Conaway (R), Midland
District 12–*Kay Granger (R), Fort Worth
District 13–*William M. “Mac” Thornberry (R), Clarendon
District 14–*Ron Paul (R), Lake Jackson
District 15–*Ruben Hinojosa (D), Mercedes 
District 16–*Silvestre Reyes (D), El Paso
District 17–*Chet Edwards (D), Waco
District 18–*Sheila Jackson Lee (D), Houston
District 19–*Randy Neugebauer (R), Lubbock   
District 20–*Charles Gonzalez (D), San Antonio
District 21–*Lamar Smith (R), San Antonio
District 22–*Nick Lampson (D), Sugar Land
District 23–*Ciro Rodriguez (D), San Antonio 
District 24–*Kenny Marchant (R), Carrollton
District 25–*Lloyd Doggett (D), Austin
District 26–*Michael C. Burgess (R), Lewisville
District 27–*Solomon Ortiz (D), Corpus Christi
District 28–*Henry Cuellar (D), Laredo
District 29–*Gene Green (D), Houston
District 30–*Eddie Bernice Johnson (D), Dallas
District 31–*John Carter (R), Round Rock
District 32–*Pete Sessions (R), Dallas

    In preparation for the 2008 General Election, THA and HOSPAC have developed get-out-the-vote materials. Hospitals are encouraged to host get-out-the-vote activities or to volunteer to serve as early voting or Election Day polling sites. (Lisa Kepple/John Hawkins) (Ernie Schmid, FACHE)

Important Dates

Oct. 20-31
General Election early voting by personal appearance

Oct. 20
Deadline to complete Texas Hospitals' Contributions to Nursing Education Survey

Oct. 30
HOSPAC Leadership Reception featuring Rep. Dan Gattis, Austin

Nov. 1
Deadline for hospitals to comply with “red flags” rules for creditors

Nov. 4
General Election Day

Nov. 7
Deadline for completing THA membership updates online

Nov. 12
HAI Panel meeting, Austin

Webinar Series: Managing Joint Commission Standards for Environment of Care
Oct. 17
Nov. 14

Audioconference Series: Critical Access Hospital Conditions of Participation: What Every CAH Should Know
Provided by THA in conjunction with Texas Healthcare Trustees
Oct. 21
View details

Audioconference: Nurse Staffing, Peer Review and Protections
(Part 6 of THA's “Keeping Current on Compliance” series)
Oct. 16
View details

Audioconference: Joint Commission and CMS Requirements for Annual Governing Body Reports
Oct. 30
View details

Texas Health Law Conference
Nov. 3-4, Austin
View details

Texas Healthcare Trustees Fall 2008 Teleconference Series
Nov. 12
View details

Chargemaster Coding Updates and Implementation for 2009
Nov. 12, Houston
Nov. 13, San Antonio
Nov. 14, Dallas
View details

Audioconference: Update on Current Issues Related to Emergency Care
(Part 7 of THA's “Keeping Current on Compliance” series)
Nov. 13
View details

THA offers
audioconferences and webinars on a wide range of topics. View a complete listing of webinars. For information on all of THA's upcoming educational events, visit THA's online Education Calendar.

Legal Update

By Fulbright & Jaworski, of counsel to THA

Tenth Circuit Holds That False Certification of Compliance with the Medicare Conditions of Participation Does Not Constitute Violation of False Claims Act. On Oct. 2, the Tenth Circuit Court of Appeals affirmed the dismissal of a qui tam action predicated on a hospital's failure to comply with the Medicare Conditions of Participation. The relator, a physician who formerly held privileges at the hospital, argued that the hospital violated the False Claims Act by certifying in its annual cost reports that it had complied with “the laws and regulations regarding the provision of health care services,” even though it was in violation of the CoPs. The Tenth Circuit rejected the argument, emphasizing that the prohibitions in the False Claims Act are only triggered when a defendant has “certified compliance with a statute or regulation as a condition to government payment….” (Emphasis in original.) The annual cost report, the court explained, “contains only general sweeping language and does not contain language stating that payment is conditioned on perfect compliance with any particular law or regulation.” The court reasoned that even though the government “considers substantial compliance a condition of ongoing Medicare participation, it does not require perfect compliance as an absolute condition to receiving Medicare payments for services rendered.” (Emphasis in original.) However, the court limited its analysis to the CoPs and explicitly avoided the question of whether violations of the Anti-Kickback Statute can serve as the basis for False Claims liability under the “false certification” theory. As a result, whether the court's opinion will have a broader impact on False Claims litigation remains to be seen. Read the opinion online.

President Signs Health Care Safety Net Act. On Oct. 8, President Bush signed the Health Care Safety Net Act of 2008 (H.R. 1343), which reauthorizes the community health centers program and provides $13 billion in funding over the next five years. The law reauthorizes the National Health Service Corps and the Rural Health Care grant programs, and provides increased funding for scholarship and loan repayments for health professionals. The law also makes permanent the automatic designation of community health centers as being in Health Professional Shortage Areas.

CMS Issues New Guidance Clarifying New Medicare Part D and Medicare Advantage Marketing Regulations. The Centers for Medicare & Medicaid Services issued an Oct. 8 memorandum to health care insurers intended to clarify the new Medicare Part D and Medicare Advantage marketing regulations and guidance released by CMS on Sept. 15 to help the industry implement the new regulations. The memorandum discusses the new requirements regarding compensation to marketing and sales agents for enrolling beneficiaries in Part D and Medicare Advantage plans. Shortly before the Sept. 15 rules were to go into effect on Oct. 1, CMS delayed implementation of the compensation provisions until Oct. 8. In the memorandum, CMS explains that plan sponsors now have until Oct. 15 to develop and implement compliant compensation arrangements.  

The Texas Board of Nursing adopts a rule, effective Oct. 19, concerning the executive director. The rule outlines the board's current policies that delegate authority to the executive director. The rule includes delegated authority to enter board orders for remedial education and fines for violations, including practice on a delinquent license; aiding, abetting or permitting a nurse to practice on a delinquent license; failure to comply with continuing education requirements; failure to comply with mandatory reporting requirements; failure to assure licensure/credentials of personnel for whom the nurse is administratively responsible; failure to provide employers, potential employers or the board with complete and accurate answers to specific questions regarding employment or background (e.g., presenting incomplete employment history); failure to report unauthorized practice; failure to comply with board requirements for change of name/address; failure to develop, maintain and implement a peer review plan according to statutory peer review requirements; failure to file, or cause to be filed, complete, accurate and timely reports required by board order; and failure to comply with the terms of any stipulation contained in a board order. Additionally, the executive director may enter orders requiring a licensee to comply with a peer assistance program and also may grant certain motion for rehearings on default orders. The executive director is to report summaries of dispositions to the board at its regular meetings. (Oct. 10)

The Texas Board of Nursing adopts rules, effective Oct. 19, concerning vocational nursing and professional nursing education. The rules address general requirements; definitions; program development, expansion and closure; approval; philosophy/mission and objectives/outcomes; administration and organization; faculty; students; program of study; clinical learning experiences; facilities, resources and services; records and reports; and total program evaluation. (Oct. 10)

The Texas Board of Nursing adopts a rule, effective Oct. 19, concerning the nursing jurisprudence exam. The rule implements recommendations made by the Sunset Advisory Committee and addresses developing the examination, applicable fees, administering  the examination, re-examination procedures, grading procedures and notice of results. The requirement will affect applications received on or after Sept. 1, 2008, from candidates for initial licensure by examination and those seeking to endorse their nursing license to Texas.  (Oct. 10)

The Texas Board of Nursing adopts a rule, effective Oct. 19, concerning fees. The rules sets a “not to exceed” fee for the jurisprudence exam. Currently, the jurisprudence exam is being developed in-house by board staff and the iBridge Group. Staff anticipates that the board will be able to absorb all developmental and maintenance costs at this time, but would like the option to charge a fee if it is deemed necessary at a later date. Board staff will evaluate the costs of the jurisprudence examination on March 1, 2009, and again on Aug. 31 of that year. (Oct. 10) (Sharon D. Johnson)