Knowledge Base Article

On March 23, 2010, President Obama signed into law the Patient Protection and Affordable Care Act (PPACA).  Several issues of interest to hospitals affected by the Act are discussed below.

• Section 3104 of this statute permits independent clinical laboratories to continue to bill for the technical component (TC) of physician pathology services for inpatients or outpatients of a hospital.  This is effective for dates of service January 1, 2010 through December 31, 2010.  For more information see CMS Transmittal 1945 or MLN Matters Article MM6813. 
• Section 6404 of the PPACA amended the timely filing requirements to reduce the maximum time period for submission of all Medicare FFS claims to one calendar year after the date of service.  Under the new law, claims for services furnished on or after January 1, 2010, must be filed within one calendar year after the date of service.  In addition, Section 6404 mandates that claims for services furnished before January 1, 2010, must be filed no later than December 31, 2010.  The following rules apply to claims with dates of service prior to January 1, 2010.  Claims with dates of service before October 1, 2009, must follow the pre-PPACA timely filing rules.  Claims with dates of service October 1, 2009, through December 31, 2009, must be submitted by December 31, 2010. 
• Section 3122 of the Patient Protection and Affordable Care Act re-institutes reasonable cost payment for clinical laboratory tests performed by hospitals with fewer than 50 beds in qualified rural areas as part of their outpatient services for cost reporting periods beginning on or after July 1, 2010 through June 30, 2011. For some hospitals this could affect services performed as late as June 30, 2012.  For more information see CMS Transmittal 1940 or MLN Matters Article MM6873.
• The act extends the Outpatient Hold Harmless provision, effective for dates of service on and after January 1, 2010, through December 31, 2010, to rural hospitals with 100 or fewer beds and to all sole community hospitals and Essential Access Community Hospitals regardless of bed size. 

Issues of interest to other provider types include:

• Section 3103 of the Act extends the exceptions process for outpatient therapy caps.  Providers may continue to submit claims with the KX modifier, when an exception is appropriate, for services furnished on or after January 1, 2010, through December 31, 2010.  Therapy caps do not apply to hospital outpatient therapy services.
• Section 3131(c) of this statute creates a 3% add-on to payments made for home health services to patients in rural areas.   The add-on applies to episodes ending on or after April 1, 2010, through December 31, 2016.  Similar to temporary rural add-on provisions in the past, claims that report a rural state code (code beginning with 999) as the Core Based Statistical Area (CBSA) code for the beneficiary’s residence will receive the additional 3% payment.   The CBSA code is reported associated with value code 61 on home health claims.  CMS is working to expeditiously implement the home health rural add-on provision.