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May 2022 PAR Pro Tips

Published on 

Wednesday, May 18, 2022

MMP’s Protection Assessment Report (P.A.R.) combines current Medicare Fee-for-Service review targets (i.e., MAC, RAC, OIG) with hospital specific paid claims data made possible through a collaboration with RealTime Medicare Data (RTMD). Monthly, our newsletter spotlights current review activities. This month’s focus is on the April 2022 release of CMS’ Medicare Provider Compliance newsletter.


In the Tax Relief and Health Care Act of 2006, the U.S. Congress authorized the expansion of the Recovery Audit Program nationwide by January 2010 to further assist the CMS in identifying improper payments.

The first Medicare Quarterly Compliance Newsletter was issued in October 2010 as a Medicare Learning Network® (MLN) educational product, “to help providers understand the major findings identified by Medicare Claims Processing Contractors, Recovery Auditors, Program Safeguard Contractors, Zone Program Integrity Contractors, and other governmental organizations such as the Office of Inspector General.”

In the second edition of this newsletter CMS indicated that it is “designed to help FFS providers, suppliers, and their billing staffs understand their claims submission problems and how to avoid certain billing errors and other improper activities, such as failure to submit timely medical record documentation, when dealing with the Medicare FFS program.”

Twelve years later, much has changed since the release of the first quarterly newsletter.

  • Instead of a network of contractors (i.e., Carriers and Fiscal Intermediaries) processing more than 1 billion claims each year, there are twelve Medicare Administrative Contractor (MAC) regions where the MACs process the claims,
  • In addition to the Recovery Auditors and the OIG, there are new contractors auditing claims, for example the Supplemental Medicare Review Contractor (SMRC) and the Unified Program Integrity Contractors (UPICs) who assumed the responsibilities of the former ZPIC contractor,
  • The OIG no longer publishes an annual workplan, instead the Work Plan is updated monthly to be able “to anticipate and respond to emerging issues with resources available,” and
  • As of the April 2022 edition, this newsletter is now released twice a year instead of quarterly.

What has not changed is the ongoing challenge for providers to meet Medicare rules and regulations required to accurately order, schedule, perform, code and bill medically necessary services.

April 2022 Medicare Provider Compliance Newsletter

In the April 2022 edition of the newsletter (link), you will find information about:

  • The Comprehensive Error Rate Testing (CERT) review of hospice certification and recertification of terminal illness,
  • The CERT review of refills of Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) items provided on a recurring basis, and
  • The Recovery Auditor review of Issue 0184: total hip arthroplasty (THA) medical necessity and documentation requirements.

This article focuses on the RAC’s review of total hip arthroplasty (link).

RAC Issue 0184: Total Hip Arthroplasty: Medical Necessity and Documentation Requirements

Total hip arthroplasty procedures were removed from the Medicare Inpatient Only (IPO) procedure list effective January 1, 2020. RAC issue 0184 was approved in August 2020. This RAC Issue entails a review of medical records (complex review) for provider types of inpatient hospital, outpatient hospital and professional services.

The review only focuses on total (involving the entire joint) hip arthroplasties to determine if documentation supports that a THA was medically necessary according to the guidelines outlined in the Local Coverage Determinations (LCDs) and Local Coverage Articles (LCAs) of the following MACS:

  • Jurisdiction N MAC: First Coast Service Options, Inc.,
  • Jurisdictions H and L MAC: Novitas Solutions, Inc.,
  • Jurisdictions 6 and K MAC: National Government Services, Inc.,
  • Jurisdictions J and M MAC: Palmetto GBA LLC, and
  • Jurisdictions E and F MAC: Noridian Healthcare Solutions, LLC.

Unlike the CERT reviews included in this newsletter, the RAC review does not include an improper payment amount. What you will find are the CPT codes for review, the reminder to respond to review requests promptly and ensure records include documentation supporting the medical necessity of the THA, and links to the MAC’s LCDs and LCAs.

Total Hip Arthroplasty Removal from the Medicare Inpatient Only (IPO) Procedure List

As mentioned above THA procedures were removed from the Medicare IPO List effective January 1, 2020. CMS reminded providers in the CY 2020 Outpatient Prospective Payment System (OPPS) Final Rule that “the removal of any procedure from the IPO list, including THA, does not require the procedure to be performed only on an outpatient basis. That is, when a procedure is removed from the IPO, it simply means that Medicare will pay for it in either the hospital inpatient or outpatient setting; it does not mean that the procedure must be performed on an outpatient basis.”

CMS also finalized a two-year exemption from site-of-service claims denials, Beneficiary and Family Centered Care (BFCC) Quality Improvement Organization referrals to Recovery Auditors, and Recovery Auditor reviews for “patient status” (that is, site-of-service) for procedures removed from the IPO list under the OPPS beginning January 1, 2020.

It is important for providers to be mindful that this exemption does not include medical necessity based on a National or Local Coverage Determination meaning irrespective of site-of-service, a short stay claim can still be denied for lack of documentation supporting medical necessity of the procedure.

THA Site of Service in CY 2020 and 2021

In keeping with the late Paul Harvey’s, The Rest of the Story segments, I turned to RTMD to see where THA’s are being performed since being removed from the IPO list. The following claims data represents Medicare Fee-for-Service paid claims data available in RTMD’s footprint which includes all U.S. states and territories except Kentucky and Ohio. The reader should be reminded that THA was added to the Ambulatory Surgery Center (ASC) Covered Procedure List (CPL) January 1, 2021.

Calendar Year 2020 THA Claims Data in RTMD Database

Inpatient Claims

  • Claims Volume: 116,804
  • Percent of All 2020 THA Claims: 56.8%
  • Sum of Paid Claims: $1,620,651,115.06

Outpatient Claims

  • Claims Volume: 88,828
  • Percent of All 2020 THA Claims: 43.2%
  • Sum of Paid Claims: $893,162,528.27
  • Calendar Year 2021 Claims Data in RTMD Database

    Inpatient Claims

    • Claims Volume: 48,330
    • Percent of All 2021 THA Claims: 24.37%
    • Sum of Paid Claims: $659,846,754.97

    Outpatient Claims

    • Claims Volume: 128,385
    • Percent of All 2021 THA Claims: 62.41%
    • Sum of Paid Claims: $1,311,707,091.83

    Ambulatory Surgery Center (ASC)

    • Claims Volume: 26,218
    • Percent of All 2021 THA Claims: 13.22%
    • Sum of Paid Claims: $64,580,122.48

    There has been a significant shift in site-of-service for THA procedures away from the inpatient hospital setting. While the patient setting should be based on each individual patient, it is also important to be aware of the difference in payment for THA based on the setting.

    • In the inpatient setting THA procedures group to MS-DRG 469 with an MCC or MS-DRG 470 without an MCC. In general, most inpatient THA procedures group to MS-DRG 470. The 2021 national average payment for MS-DRG 470 was $11,192.94.
    • 2021 ambulatory payment category (APC) national payment rate for THA: $12,314.76.
    • 2021 ASC CPL national payment rate for THA: $8,818.37.

    Whether hospital inpatient, outpatient or ASC is the most appropriate setting for your patient, you must ensure documentation in the medical record supports indications outlined in your MAC’s LCDs.

    Article Author: Beth Cobb, RN, BSN, ACM, CCDS
    Beth Cobb, RN, BSN, ACM, CCDS, is the Manager of Clinical Analytics at Medical Management Plus, Inc. Beth has over twenty-five years of experience in healthcare including eleven years in Case Management at a large multi-facility health system. In her current position, Beth is a principle writer for MMP’s Wednesday@One weekly e-newsletter, an active member of our HIPAA Compliance Committee, MMP’s Education Department Program Director and co-developer of MMP’s proprietary Compliance Protection Assessment Tool.

    This material was compiled to share information.  MMP, Inc. is not offering legal advice. Every reasonable effort has been taken to ensure the information is accurate and useful.