HCFA Publishes Final Rule; Lawmakers, Associations Campaign to Halt It Washington Even though lawmakers have taken up a letter-writing campaign to stop it, consolidated billing moved another step closer to reality July 30 when the Health Care Financing Administration published the final rule and notice for the Medicare Prospective Payment System for skilled nursing facilities in the Federal Register.

HCFA did reiterate that Y2K considerations have delayed implementation of the rule, which was mandated by the 1997 Balanced Budget Act. The mandate calls for not only a PPS for SNFs, but also a consolidated billing system under which the facility has the responsibility for billing Medicare for virtually all services and equipment its residents receive. The notice gave no indication when the rule will be implemented-industry estimates are mid-2000-but said that HCFA will publish a Federal Register notice "at least 90 days in advance."

It ruled on the contentious issue of the financial relationship between a SNF and a home medical equipment provider-in which HCFA will reimburse the SNF for durable medical equipment, and the SNF, in turn, will reimburse the provider. HCFA said it will not regulate that area and will leave the SNF and the provider to work out the situation.

"A SNF's relationship with its supplier is essentially a private contractual matter, and the terms of the supplier's payment by the SNF must be arrived at through direct negotiations between the two parties themselves," the rule states.

"Accordingly, we believe that the most effective way for a supplier to address any concerns that it may have about the adequacy or timeliness of the SNF's payment would be for the supplier to ensure that any terms to which it agrees in such negotiations satisfactorily address those concerns."

Some comments received by HCFA dealt with concerns that SNFs could delay or withhold Medicare reimbursements owed to a provider, who would have no recourse through Medicare to recover the funds.

"We still don't understand why HCFA even wants consolidated billing," said Erin Bush, associate director of government relations for HIDA. "Paying a SNF when the services come from a supplier is convoluted. And they think this is supposed to counteract fraud and abuse? I don't see how."

Meanwhile, Rep. Robert Matsui, D-Calif., added his name to the list of congressional letter writers urging Health and Human Services Secretary Donna Shalala to delay the implementation of consolidated billing because of its impact on the industry.

Sens. Bill Frist, R-Tenn., Kent Conrad, D-N.D., and Byron Dorgan, D-N.D., and Reps. Charles Canady, R-Fla., and Martin Frost, R-Texas, have sent similar letters to Shalala.