“I Know It When I See It”

In 1964, there was a Supreme Court decision—Jacobellis v. Ohio—on the First Amendment and how it applied to the showing of a movie. The Supreme Court ruled that the First Amendment does not permit censorship. The most famous opinion in that decision was by Justice Potter Stewart who wrote “I shall not today attempt further to define the kinds of material I understand to be embraced within that shorthand description; and perhaps I could never succeed in intelligibly doing so. But I know it when I see it, and the motion picture involved in this case is not that.”. . .

The phrase “I know it when I see it” has become a colloquial expression whereby a speaker attempts to categorize an observable fact or event, although the category is subjective or lacks clearly defined parameters.

This expression can be applied to hospitals in their efforts to distinguish Implantable Devices charged to patients from regular billable Medical Supplies. CMS has never provided any specific guidance, only that hospitals should report UB revenues codes 0275 – pacemaker, 0276 – intraocular lens, 0278 – other implants and 0624 – Food and Drug Administration (FDA) investigational devices on line 72.

Some general guidance is given that instructs hospitals to have an established charge structure which is applied uniformly to each patient as services are furnished which is reasonably and consistently related to the cost of providing the services.

Tip #32:

The identification of billable Medical Supplies versus Implants is at the hospital’s discretion, but ensure you have a uniform charging structure that could withstand CMS scrutiny (CMS Pub 15-1, Section 2203).

Further guidance can be found on the Centers for Medicare and Medicaid Services (CMS) website:

Provider Reimbursement Manual 15-1

Questions? Please contact Marie White at 612.253.6546 or mewhite@eidebailly.com.

 

Be Your Own Insurance Spokesperson

The insurance industry is constantly reminding people to review their current insurance premiums and do a comparison to see whether there’s a better deal out there. Many of the national carriers have spokespeople or mascots who poke fun at all that can go wrong if you fail periodically reevaluate your insurance plan for adequate coverage. No such spokespeople or mascots exist to give reminders to hospitals.

The regulations allow hospitals to purchase coverage from a commercial company, be self-insured or a combination of the two. This regulation applies to health insurance coverage for employees, malpractice insurance for physicians, or general liability coverage for the entity. The selection of one kind over another is only required to be “reasonable and prudent” for the organization.

The regulations also recommend the hospital should conduct a comparative analysis which demonstrates that the provider’s choice results in a reasonable cost for the coverage offered and that the extent of coverage is consistent with sound management practices. This analysis should be performed on a periodic basis, usually every three to five years, to assure consistent application of the prudent buyer principle and to properly monitor the cost effectiveness of the insuring method being applied. 

Tip #31:

Periodically conduct a comparative analysis of your health insurance to ensure your facility is meeting the “prudent buyer” principle (CMS Pub 15-1, Section 2162). Further guidance can be found on the Centers for Medicare and Medicaid Services (CMS) website:

Provider Reimbursement Manual 15-1

Questions? Please contact Marie White at 612.253.6546 or mewhite@eidebailly.com.