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May 2023 Coverage and Compliance Education Updates, COVID-19 Updates, and More
Published on May 31, 2023

Coverage Updates

May 9, 2023: U.S. Preventive Services Task Forces (USPSTF) Posts Draft Recommendation Statement for Screening Breast Cancer

The USPSTF issued a draft recommendation indicating that science now shows all women should get screened for breast cancer every other year starting at age 40. This recommendation applies to women at average risk of breast cancer and includes people with a family history of breast cancer, and people who have other risk factors, such as dense breasts.


Compliance Education Updates

MLN Fact Sheet: Clinical Laboratory Fee Schedule

This fact sheet has been updated to include the CY 2023 specimen collection amounts and flat-rate travel allowance.


MLN Fact Sheet: Skilled Nursing Facility 3-Day Rule Billing

The end of the COVID-19 PHE brought an end to the 3-day prior hospitalization waiver. CMS has updated this MLN Fact Sheet to remove language related to this waiver. For Case Managers hired during the pandemic, this is a must read to help understand what is required for your Medicare Fee-for-Service beneficiary to qualify for admission to a Skilled Nursing Facility.

COVID-19 Updates

May 19, 2023: End of COVID-19 PHE FAQs Updates

Learn about updates to the Frequently Asked Questions: CMS Waivers, Flexibilities, and the End of the COVID-19 Public Health Emergency (questions 21-23 on page 9). For example, CMS answers the question, can hospitals bill for outpatient physical therapy (PT), occupational therapy (OT), speech language therapy (SLF) services, Diabetes Self-Management Training (DSMT), or Medical Nutrition Therapy (MNT) provided to beneficiaries in their homes through telecommunication technology by hospital-employed staff?


May 25, 2023: FDA Approved Oral Antiviral Paxlovid for Treatment of Mild to Moderate COVID-19

This drug is for use in adults at high risk for progression to severe CODI-19, including hospitalization and death. Approved during the COVID-19 PHE, Patrizia Cavazzoni, M.D., director for the FDA’s Center for Drug Evaluation and Research notes that “Today’s approval demonstrates that Paxlovid has met the agency’s rigorous standards for safety and effectiveness, and that it remains an important treatment option for people at high risk for progression to severe COVID-19.”

Other Updates

Comprehensive Error Rate Testing (CERT) Review Contractor: Same Company, New Name

The CERT review contractor, formerly known as NCI Information Systems, Inc. has changed their company name to Empower AI, Inc. Their email domain is


You can learn more about changes to the CERT Contractors (Review Contractor and Statistical Contractor) in a related Palmetto GBA article at


May 4, 2023 MLN Connects: May is National Mental Health Month

CMS notes in the May 4th edition of MLN connects that 20% of Americans experience mental illness each year and disproportionately affects racial and ethnic minority groups. I encourage you to read this edition of MLN Connects to learn about appropriate preventive services covered by Medicare (i.e., Depression Screening) and additional mental health resources made available by CMS.


May 24, 2023: Inpatient Rehabilitation Review Choice Demonstration and Targeted Probe and Educate

Palmetto GBA clarifies that this demonstration is for IRF providers that are physically located in and bill to the state of Alabama. Also, any current TPE reviews in process prior to June 1, 2023, will continue the normal medical review course until completion.

Beth Cobb

Livanta's Higher Weighted DRG and Short Stay Reviews
Published on May 03, 2023

Did You Know?

Livanta, the National Medicare Claim Review Contractor, is actively reviewing two types of reviews monthly.  

Higher weighted diagnosis-related groups (HWDRG) Reviews: When a hospital resubmits a claim with a higher weighted DRG as a correction to the original claim, this “is a trigger for a potential review of an inpatient claim. This review activity helps ensure that the patient’s diagnostic, procedural, and discharge information is coded and reported properly on the hospital’s claim and matches documentation in the medical record.”  

Short Stay Reviews (SSRs): For SSRs, “reviewers at Livanta obtain and evaluate the medical record to ensure that the patient’s admission and discharge were medically appropriate based on the documentation of the patient’s condition and treatment rendered during the stay, and that the corresponding Part A Medicare claim submitted by the provider was appropriate.” 

Why It Matters? 

HWDRG Reviews: When a hospital’s HWDRG claim is subject to a post-payment review, in addition to DRG validation of the adjusted claim, the review will include validation of medical necessity of the inpatient admission. 

SSRs: Short Stays are a high volume and high-cost review focus for more contractors than Livanta. RealTime Medicare Data’s (RTMDs) database includes Medicare Fee-for-Service paid claims for the nation. The following RTMD data represents paid short stay claims in CY 2022:

  • 874,104: The volume of short stay claims,
  • $47,043,865,852: The total charges by hospitals for short stay claims, and
  • $10,052,743,324: The total payment by Medicare to hospital for short stays.

Discharge disposition codes expired (20), transfer to another acute care facility (02), transfer to a short-term general hospital with a planned acute care hospital inpatient admission (82), left against medical advice (07), and hospice election (50 & 51) are excluded from the short stay RTMD data as CMS considers them to be unforeseen circumstances. 

Office of Inspector General (OIG)

Prior OIG audits identified millions of dollars in overpayments for inpatient claims with short lengths of stay. The OIG had previously stated they would not audit short stays after October 1, 2013; however, their current work plan includes a review of CMS’ Oversight of the Two-Midnight Rule for Inpatient Admissions.

Comprehensive Error Rate Testing (CERT)

Since the October 1, 2013 implementation of the Two-Midnight Rule, as part of their annual report, the CERT review contractor has reported hospital inpatient review findings by length of stay. The improper payment rate for “0 or 1 day” claims is consistently higher than other lengths of stay. In fact, the improper payment rate for short stay claims increased from 16.8% in 2021 to 20.1% in 2022 with a projected improper payment of $1.5B.

Program for Evaluating Payment Patterns Electronic Report (PEPPER)

One-Day stays for medical and surgical DRGs are review targets in the short-term acute care PEPPER. The suggested intervention for high outliers is that “this could indicate that there are unnecessary admissions related to the inappropriate use of admission screening criteria or outpatient observation. A sample of one-day stay cases should be reviewed to determine whether inpatient admission was necessary or if care could have been provided more efficiently on an outpatient basis (e.g., outpatient observation).”

What Can I Do?

Livanta provides several education resources on their website. For example, the Livanta Claims Review Advisor newsletter alternates between SSRs and HWDRG reviews. Examples of newsletter topics includes: 

HWDRG Review Topics: Physician Queries, Sepsis DRGs, Encephalopathy, Anemia and GI Bleeding, and Malnutrition, and Short Stay Review Topics: Chest Pain, Atrial Fibrillation, Congestive Heart Failure, and Transient Ischemic Attack Case Scenarios.

I encourage you to share this information with your HIM, Case Management, and Clinical Documentation Integrity staff.


Livanta website:

RealTime Medicare (RTMD):

OIG Workplan:

CERT Reports:

36th Edition of Short-Term Acute Care Hospitals Users Guide at


Beth Cobb

April 2023 COVID-19 and Other Medicare Updates
Published on Apr 26, 2023

COVID-19 Updates


March 29, 2023: FAQs Issued on Coverage of COVID-19 Testing and Vaccines by Health Plans After the Public Health Emergency Ends

A set of FAQs were issued to help group health plans and health insurance issuers in the private market understand their obligations under the Families First Coronavirus Response Act (FFCRA) and Coronavirus Aid, Relief, and Economic Security Act (CARES Act) related to coverage for COVID-19 diagnostic testing and vaccines following the expiration of the PHE. The FAQs were issued jointly by HHS, the Department of Labor, and the Department of Treasury.


April 10, 2023: New COVID-19 Treatments Add-On Payment (NCTAP)

This webpage was updated to let providers know Medicare will provide an enhanced payment through September 30, 2023, for eligible inpatient cases using certain new products with current FDA approval or emergency use authorization (EUA) to treat COVID-19.


April 5, 2023: COVID-19 Over the Counter (OTC) Test Coverage Ends May 11, 2023

“Effective May 12, 2023, COVID-19 OTC tests (HCPCS K1034) are no longer a covered benefit for Medicare. Any providers or suppliers providing monthly supplies to their patients should notify their patients of this change before providing further services.”


Other Updates


April 4, 2023: Special Edition MLN Connects: Proposed Rules

CMS announced the release of the FY 2024 proposed rules for Hospice, Medicare Inpatient Psychiatric Facilities, Inpatient Rehabilitation Facilities, and Skilled Nursing Facilities. Included in the announcement are links to related Fact Sheets.


April 6, 2023: Advance Beneficiary Notice of Noncoverage: Form Renewal         

CMS posted a notice in the March 6, 2023 edition of MLN Connects letting providers know the OMB has approved the Advance Beneficiary Notice of Noncoverage (Form CMS-R-131) for renewal. The expiration date is the only change to the form and must be used beginning June 30, 2023.


April 17, 2023: New Resources to Address Rising Threat of Cyberattacks in Health and Public Health Sector

HHS issued a Press Release announcing new resources made available by the U.S. HHS 405(d) Program to address cybersecurity concerns in the Healthcare and Public Health (HPH) sector including a Knowledge on Demand – platform offering free educational cybersecurity trainings, the 2023 edition of the Health Industry Cybersecurity Practices (HICP) report, and a Hospital Cyber Resiliency Initiative Landscape Analysis reporting on the current state of domestic hospitals’ cybersecurity preparedness.


The HICP report indicates that “healthcare records continue to be one of the most lucrative items on the underground market, ranging from $250 to $1,000 compared to other items like credit cards only selling for an average of $100,” driver’s license an average of $20, and SSN’s average of $1.


April 21, 2023: CMS Issues Two More Civil Monetary Penalties for Failure to Meet Hospital Price Transparency Requirements

On April 21, CMS updated the hospital’s price transparency enforcement actions webpage by adding two more hospitals subject to civil monetary penalties for noncompliance with the hospital price transparency requirements ( 

Beth Cobb

April 2023 Medicare Transmittals and Compliance Education Updates
Published on Apr 26, 2023

Medicare Transmittals & MLN Articles


March 17, 2023: MLN MM13136: Hospital Outpatient Prospective Payment System: April 2023 Update – Article Revised April 3, 2023

This article was revised to reflect a revision to Change Request (CR) 13136 which changed a reference to average sales price (ASP) calculations based on sales price submissions from the third quarter of CY 2022 to the fourth quarter.


April 6, 2023: MLN MM13162: New Waived Tests

CMS advises that your billing staff know about Clinical Laboratory Improvement Amendments (CLIA) requirements, new CLIA-waived tests approved by the FDA, and use of modifier QW for CLIA-waived tests.


April 21, 2023: Transmittal 11995, Change Request (CR) 13181: Medicare Policy Updates for Dental Services as Finalized in the CY 2023 Physician Fee Schedule (MPFS) Final Rule

The purpose of CR 13181 is to update the Internet Only Manual (IOM) Medicare benefit policy for dental services as finalized in the CY 2023 MPFS final rule. CMS provides four scenarios in which Medicare payment for dental services is not excluded. They also note these policies do not prevent a MAC from deciding that payment can be made for dental services in other circumstances under which the dental services are inextricably linked to, and substantially related and integral to the clinical success of, certain covered medical services, but are not specifically addressed in final rules, manual provisions, and the finalized amendment to §411.14(i).


April 21, 2023: MLN MM13149: Skilled Nursing Facility Prospective Payment System: Updates to Current Claims Editing

Information in this article is for SNFs and hospital swing bed providers. Action needed is to make sure your staff knows about improved editing of claims that have interrupted stays that span two months and modified editing for occurrence span code (OSC) edits allowing for proper claims decisions.



Compliance Education Updates


February 2023: MLN Booklet: Information for Critical Access Hospitals

CMS has updated the MLN Booklet. Changes to the booklet are highlighted in dark red, for example, information about the new provider type call rural emergency hospitals (REHs) starting January 1, 2023 has been added to this document.


April 13, 2023: MLN Connects: Hospital Outpatient Departments: Prior Authorization for Facet Joint Interventions Starts July 1

CMS reminds hospitals in the April 13th edition of MLN Connects that hospital outpatient departments must submit prior authorization requests for facet joint interventions starting on or after July 1, 2023. The Prior Authorization CMS webpage was updated on April 12, 2023 with the addition of this notice and access to a complete list of all HCPCS codes requiring prior authorization as part of this initiative. In general, the Medicare Administrative Contractors (MACs) will begin accepting prior authorization requests for facet joint interventions on or around June 15th.


April 27, 2023: New OMB approved Medicare Outpatient Observation Notice


The Medicare Outpatient Observation Notice (MOON) and Important Message from Medicare (IM)/Detailed Notice of Discharge (DND) forms received OMB approval on January 23, 2023. The new versions must be used no later than April 27, 2023. All updated forms are available on the CMS Beneficiary Notices Initiative webpage at


MLN Fact Sheet: Intravenous Immune Globulin Demonstration Fact Sheet

This demonstration began in October 2014 and will end on December 31, 2023. A related MLN Fact Sheet has been updated this month with updated 2022 and 2023 payment rates for Q2052 and claims adjustment language for updated payment rates.

Beth Cobb

March 2023 Compliance Education, COVID-19 and Other Medicare Updates
Published on Mar 29, 2023

Compliance Education

March 9, 2023: Medicare Part B Inflation Rebate Guidance: Use of the 340B Modifier – Revised

In the March 9th edition of MLN Connects CMS encouraged readers to learn about the requirement to include a modifier on claims for separately payable Part B drugs and biologicals acquired under the 340B Program. Along with the announcement, CMS provided links to an updated MLN Fact Sheet and Updated FAQs.

March 27, 2023: The Livanta Claims Review Advisor: Short Stay Review (SSR) – Review Findings from Year One

In Livanta’s March 2023 edition of their Claims Review Advisor newsletter, they report findings from the first year of reviews, noting that Medicare short stay reviews were paused in May 2019 and resumed in October 2021. Of the 18,672 claims reviewed, 2,663 (14%) were admission denials. The first common reason cited by Livanta for denials was insufficient documentation to support a two-midnight expectation at the time of the admission order. You can find past issues of the Livanta Claims Review Advisor as well as the full Review Findings from Year One report on Livanta’s website at

COVID-19 Updates

February 27, 2023: CMS PHE Fact Sheet: What Do I Need to Know? Waivers, Flexibilities, and the Transition Forward

CMS published a fact sheet covering COVID-19 vaccines, testing, and treatments; telehealth services; continuing flexibilities for health care professionals; and inpatient hospital care at home when the PHE expires at the end of the day on May 11, 2023.

March 10, 2023: OIG’s COVID-19 PHE Flexibilities End May 11, 2023

The OIG published a notice to describe the flexibilities they had implemented in response to the COVID-19 PHE (i.e., their March 17, 2020 Telehealth Policy Statement), and to remind the health care community said flexibilities will end on May 11, 2023.

 March 13, 2023: FDA’s Guidance Documents related to COVID-19

The FDA published this notice in the Federal Register “to provide clarity to stakeholders with respect to the guidance documents that will no longer be effective with the expiration of the PHE declaration and the guidance’s that FDA is revising to continue in effect after the expiration of the PHE declaration.” Specifically, there are 72 COVID-19 related guidance documents currently in effect addressed in this notice. Twenty-two will expire at the end of the COVID-19 PHE, another twenty-two will continued for 180 days after the PHE ends, twenty-four will remain in effect with plans to revise (i.e., guidance related to emergency use authorization for vaccines to prevent COVID-19), and the remaining four will also remain in effect.

March 16, 2023: MLN Connects: Do not Report CR Modifier & DR Condition Code After Public Health Emergency

CMS included the following in the March 13th edition of MLN Connects: “The end of the COVID-19 public health emergency (PHE) is expected to occur on May 11, 2023. Since the CR modifier and DR condition code should only be reported during a PHE when a formal waiver is in place, plan to discontinue using them for claims with dates of service on or after May 12, 2023.”

Other Updates

February 28, 2023: New Region 2 Recovery Auditor

On February 28th, Performant posted a general program update alerting providers that on February 7, 2023, CMS approved Performant to begin performing on their new Region 2 contract. Coming soon to their website will be Provider Outreach and education plans.

March 9, 2023: MLN Connects: New Inflation Reduction Act Resources

This addition of MLN Connects includes information about the Inflation Reduction Act (IRA), including a recently issues social media toolkit that stakeholders can use to educate people with Medicare about the new insulin benefit and additional vaccines available at no cost and additional resources to provide to your patients that need it.

Beth Cobb

Fiscal Year 2022 Fourth Quarter PEPPER Release
Published on Mar 15, 2023

The fourth quarter FY 2022 Short-Term Acute Care Program for Evaluating Payment Patterns Electronic Report (PEPPER) was released last week. At the same time, the 36th Edition of the related PEPPER User’s Guide is now posted on the PEPPER Resources website.

About the PEPPER

As part of a hospital’s Compliance Program, regular chart audits should be completed to confirm guidance with Medicare coverage, coding, and billing requirements. The PEPPER is a free resource that provides a compare of a hospital to its state, MAC region, and the nation for specific Target Areas. This comparison enables a hospital to identify whether it is an outlier as compared to other short-term acute care hospitals.

In general, there are two types of Target Areas, targets related to DRG coding and admission necessity focused target areas. The “PEPPER does not identify the presence of payment errors, but it can be used as a guide for auditing and monitoring efforts. A hospital can use PEPPER to compare its claims data over time to identify areas of potential concern:

  • Significant changes in billing practices
  • Possible over- or under – coding, and
  • Changes in lengths of stay.”

When CMS approves a Target Area it is because it has been identified as prone to improper Medicare payments. Historically, target areas have been the focus of past Office of Inspector (OIG) or Recovery Auditor audits.

35th Edition PEPPER User’s Guide, What’s New?

Three target areas have been removed from the report including Excisional Debridement, Emergency Department Evaluation and Management Visits, and Chronic Obstructive Pulmonary Disease.

In keeping with the trend that MMP has noticed where services are moving away from the inpatient hospital setting, the existing Spinal Fusion target area has been modified to now include hospital outpatient spinal fusion claims.

The last change is to the existing Percutaneous Cardiovascular Procedures target area. This has been modified to remove reference to the following two outpatient codes in the denominator:

  • Current Procedural Terminology® (CPT®) code 92942, and
  • Healthcare Common Procedure Coding System (HCPCS) code C9606.

Moving Forward

Also included in the PEPPER User’s Guide are suggested interventions for when a hospital is a high or low outlier for each of the review targets.

DRG Coding Focused Target Area Example: Unrelated OR Procedure

  • Suggested Interventions for High Outliers: “This could indicate that there are coding or billing errors related to over-coding of DRGs 981, 982, 987, 988, or 989. A sample of medical records for these DRGs should be reviewed to determine whether the principal diagnosis and principal procedure are correct.
  • Suggested Intervention for Low Outlier: “This could indicate that the principal diagnosis is being billed with the related procedures No intervention is necessary.”

Admission Necessity Focused Target Area Example: Spinal Fusion

  • Suggested Interventions for High Outlier: “This could indicate that unnecessary spinal fusion procedures may have been performed. A sample of medical records for spinal fusion cases, including both the inpatient and outpatient setting, should be reviewed to validate the medical necessity of the procedure. Medical record documentation of 1) previous non-surgical treatment, 2) physical examination clearly documenting the progression of neurological deficits, extremity strength, activity modification, and pain levels, 3) diagnostic test results and interpretation, and 4) adequate history of the presenting illness, may help substantiate the necessity of the procedure.”
  • Suggested interventions for Low Outlier: “Not applicable, as this is an admission-necessity focused target area.”

Of note, more than half of the target areas in the 36th Edition User’s Guide are admission-necessity focused. Moving forward, I encourage you to review your hospital’s latest PEPPER and take advantage of suggested interventions available in the User’s Guide, paying close attention to documentation that may help substantiate the inpatient admission.


PEPPER Resources:

Beth Cobb

February 2023 COVID-19, MOON, IM/DND, REH, and Therapy Cap Updates
Published on Mar 01, 2023

COVID-19 Updates

January 24, 2023 CDC Call: Updates to COVID-19 Testing and Treatment for the Current SARS-CoV-2 Variants: This CDC call included an overview of COVID-19 epidemiology and the current variant landscape, addressed current CDC testing guidance and the National Institutes of Health and Infectious Disease Society of America COVID-19 treatment guidelines, and discussed risk assessment and considerations for treatment options. You can access a recording of this session and slides on the CDC website.


February 9, 2023: Letter to U.S. Governors from HHS Secretary Xavier Becerra: HHS Secretary Xavier Becerra published a letter to Governors (, informing them “that effective February 11, 2023, I am renewing for 90 days the COVID-19 Public Health Emergency (PHE)…the U.S. Department of Health and Human Services is planning for this to be the final renewal and for the COVID-19 PHE to end on May 11, 2023. Rather than 60 days’ notice, I am providing 90 days’ notice before the COVID-19 PHE ends to give you and your communities ample time to transition.” HHS also published the Fact Sheet: COVID-19 Public Health Emergency Transition Roadmap (


February 23, 2023: PHE 1135 Waivers: Updated Guidance for Providers: CMS published an MLN Connects (, letting providers know the COVID-19 PHE Provider-specific fact sheets have been updated and in the coming weeks they will be hosting stakeholder calls and office hours to provide additional information.


February 27, 2023: What Do I Need to Know? CMS Waivers, Flexibilities, and the Transition Forward from the COVID-19 PHE: CMS released a new overview fact sheet providing clarity on several topics including: COVID-19 vaccines, testing and treatments, telehealth services, and healthcare access (

Other Updates

January 23, 2023: The MOON and IM/DND Receive OMB Approval: A January 23, 2023, update on the Beneficiary Notices Initiative webpage ( alerted providers that the Medicare Outpatient Observation Notice (MOON), Important Message from Medicare (IM), and Detailed Notice of Discharge (DND) have received OMB approval and the updated versions are now available. The new versions must be used no later than April 27, 2023.


January 26, 2023: Guidance for Newest Medicare Provider Type – Rural Emergency Hospitals (REH): This memorandum ( provides guidance regarding the REH enrollment and conversion process for eligible facilities, FAQs, and a newly developed State Operations Manual Appendix (Appendix O) with survey procedures and Conditions of Participation (CoP) regulatory text. CMS notes the interpretive guidance is pending and will be provided in a future release. You can learn more about REHs in an October 2022 MLN Fact Sheet (


CY 2023 Therapy Services Threshold Amounts: The February 2, 2023 edition of MLN Connects included the CY 2023 per-beneficiary threshold amounts for therapy services. Claims must include the KX modifier to confirm services were medically necessary and justified by appropriate documentation. Threshold Amounts for CY 2023 are:

  • $2,230 for Physical Therapy (PT) and Speech-Language Therapy (SLT) combined, and
  • $2,230 for Occupational Therapy (OT) services.

To learn more about therapy services, visit the CMS Therapy Services webpage (

Beth Cobb

National Medicare Claims Review Contractor Year One Review Results
Published on Feb 15, 2023
 | Billing 
 | Coding 

We are fast approaching the ten-year anniversary of the Two-Midnight Rule that went into effect on October 1, 2013. Following the start date of this rule, CMS provided sub-regulatory guidance. Specific to claims reviews, CMS directed Medicare review contractors to apply the Two-Midnight presumption that “directs medical reviewers to select Part A claims for review under a presumption that the occurrence of 2 midnights after formal inpatient hospital admission pursuant to a physician order indicates an appropriate inpatient status for a reasonable and necessary Part A claim.”

Initially, Medicare Administrative Review Contractors (MACs) were tasked with auditing short stay claims. Next, this task was turned over to the two Beneficiary and Family Centered Care Quality Improvement Organizations (BFCC-QIOs) KEPRO and Livanta. In 2019, reviews were halted as CMS began the process of selecting one contractor to perform Short Stay Reviews (SSRs) and Higher Weighted DRG (HWDRG) reviews nationally.

In April 2021, Livanta announced they had been awarded the contract to be the National Medicare Claim Review Contractor. Livanta notes on their website that “claim review services represent an important activity of advancing Medicare’s triple aim of better health, better care, and lower costs.”

In October 2021, Livanta began requesting records monthly and they have recently posted their First Year Review Findings for SSRs and HWDRG reviews.

First Year Review Findings for Short Stay Reviews

Livanta notes in this report that SSRs focus on appropriate application of the Two-Midnight Rule, they are not incentivized to find errors, providers may provide supplementation documentation for initially denied claims, and a hospital may request education sessions at any point in the review process.

Livanta developed a review strategy, approved by CMS, to score each eligible paid claim to account for the influences of volume, cost, and clinical risk of improper payment. This score also scores a claim by length of stay (LOS) with a 0-day LOS scoring higher than a 1-day LOS.


Year 1 Report Highlights

  • Livanta reviewed 18,672 short stay claims,
  • 2,663 (14%) reviews were denied,
  • The 0-Day LOS error rate was eighteen percent,
  • The 1-Day LOS error rate was thirteen percent,
  • The highest volume of claims denied were circulatory system claims, and
  • The principal diagnosis with the highest number of denials was I480 (Paroxysmal atrial fibrillation).

    Higher Weighted DRG Reviews

    A HWDRG review occurs when a claim is resubmitted by a hospital with a higher weighted DRG as a correction to an original claim. The focus of this type of review is “on medical necessity of the inpatient admission and DRG validation.” Further, “this review activity helps ensure that the patient’s diagnostic, procedural, and discharge information is coded and reported properly on the hospital’s claim and matches documentation in the record.” Similar to SSRs, each claim is scored to account for the influences of volume, cost, and clinical risk.

    Year 1 Report Highlights

  • Livanta completed 54,251 reviews.
  • A Livanta physician identified 4,804 clinical coding errors due to lack of evidence to support the diagnosis code.
  • >There were 6,480 technical coding errors that involved inappropriate application of ICD-10-CM/PCS coding guidelines.

Top Three Reasons for a Denial

  1. The principal diagnosis was not supported by the medical record and coding guidelines.
  2. Submission of a major complication or comorbidity (MCC) or CC not supported by documentation in the medical record. Common diagnoses cited in the report were sepsis, encephalopathy, and malnutrition.
  3. Inappropriate query submissions and unsupported responses.

Moving Forward

Share this information with your Coding and Clinical Documentation Integrity professionals. I also encourage you to review information available to Providers on Livanta’s website and sign up for their monthly newsletter, The Livanta Claims Review Advisor.


Beth Cobb

The COVID-19 PHE is Coming to an End
Published on Feb 07, 2023

In an August 18, 2022 special edition of MLN connects, CMS sounded the call for providers to begin to prepare hospitals for operations after the COVID-19 Public Health Emergency (PHE) comes to an end.

Some five months later, On January 30, 2023, the Biden administration communicated their intent to end the COVID-19 national emergency and public health emergency (PHE) on May 11, 2023, noting that “This wind-down would align with the Administration’s previous commitments to give at least 60 days’ notice prior to termination of the PHE.”

CMS was quick to follow-up on this announcement and on February 1, 2023, they posted an update to the coronavirus waivers & flexibilities CMS webpage:   

  • “Update: On Thursday, December 29, 2022, President Biden signed into law H.R. 2716, the Consolidated Appropriations Act (CAA) for Fiscal Year 2023. This legislation provides more than $1.7 trillion to fund various aspects of the federal government, including an extension of the major telehealth waivers and the Acute Hospital Care at Home (AHCaH) individual waiver that were initiated during the federal public health emergency (PHE).
  • Additionally, on January 30, 2023, the Biden Administration announced its intent to end the national emergency and public health emergency declarations on May 11, 2023, related to the COVID-19 pandemic.
  • CMS is committed to updating supporting resources and providing updates as soon as possible. Please continue to use the provider-specific fact sheets for information about COVID-19 Public Health Emergency (PHE) waivers and flexibilities.” Note, all provider-specific fact sheets were recently updated on February 1, 2023 and include information about the status of waivers when the PHE ends, for example:  


Fact Sheet: Physicians and Other Clinicians: CMS Flexibilities to Fight COVID-19

  • Medicare Telehealth: The Consolidated Appropriations Act of 2023 provides for an extension for some of the flexibilities through December 31, 2024. However, when the PHE ends Clinicians must once again have an established relationship with the patient prior to providing remote patient monitoring (RPM).
  • Reducing Administrative Burden: “Stark Law” waivers: When the PHE ends, all Stark Law waivers will terminate, and physicians and entities must immediately comply with all provisions of the Stark Law.
  • National Coverage Determinations (NCDs) for Percutaneous Left Atrial Appendage Closure, Transcatheter Aortic Valve Replacement, Transcatheter Mitral Valve Replacement and Ventricular Assist Devices: CMS has not enforced the procedural volume requirements contained in these four NCDs for facilities and providers that, prior to the public health emergency for COVID-19, met the volume requirements. This enforcement discretion ensures that beneficiaries continue to have access to the services that are covered under these NCDs. This waiver will end at the conclusion of the PHE. 


Fact Sheet: Hospitals and CAHs (including Swing Beds, DPUs), ASCs and CMHCs: CMS Flexibilities to Fight COVID-19

  • Enhanced Medicare Payments for New COVID-19 Treatments: Hospital Inpatient Stays: Immediately following the end of the PHE, effective for discharges occurring on or after November 2, 2020, and through the end of the FY in which the COVID-19 PHE ends, the Medicare program has provided an enhanced payment for eligible inpatient cases that involve use of certain new products authorized or approved to treat COVID-19 (86 FR 45162). The enhanced payment is equal to the lesser of 1) 65% of the operating outlier threshold for the claim; or 2) 65% of the costs of the case beyond the operating Medicare payment (including the 20% add-on payment under section 3710 of the CARES Act) for eligible cases.
  • Separate Medicare Payment for New COVID-19 Treatments: Hospital Outpatient Departments: CMS has excluded FDA-authorized or approved drugs and biologicals (including blood products) authorized or approved to treat COVID-19 (and for which the FDA authorization or approval does not limit use to the inpatient setting) from being packaged into the Comprehensive Ambulatory Payment Classification (C-APC) payment when these treatments are billed on the same claim as a primary C-APC service. Instead, Medicare has been paying for these drugs and biologicals separately for the duration of the PHE. After the PHE, payment for these treatments will be packaged into the payment for a C-APC when these services are billed on the same outpatient claim.
  • Utilization Review: CMS has been waiving the entire Utilization Review Conditions of Participation (CoP) at §482.30 as “removing these administrative requirements allows hospitals to focus more resources on providing direct patient care.” This waiver will end at the conclusion of the PHE.


I have provided only a select few examples of what will happen when the PHE ends and encourage you to check for updates to the provider-specific fact sheets often as you develop a plan for your hospital beyond the end of the COVID-19 PHE.



Beth Cobb

FY 2022 HHS Agency Financial Report
Published on Jan 30, 2023
 | Coding 
 | Billing 

Payment Integrity: Medicare FFS Hospital Outpatient

The FY 2022 HHS Agency Financial Report ( was published in late 2022.  Section 3 of this document includes the Payment Integrity Report where HHS indicates “the actual overpayments identified by the Comprehensive Error Rate Testing program during the FY 2022 report period were $24,004,089.28. The MACs recovered the identified overpayments via standard payment recovery methods. As of the report publication date, MACs reported collecting $15,552,853.67 or 64.79 percent of the actual overpayment dollars.”


The improper payment estimate for hospital outpatient claims increased from 4.57 percent in RY 2021 to 5.43 percent in RY 2022. However, this increase was not statistically significant. The primary reason cited for hospital outpatient errors was “missing documentation to support the order, or the intent to order for certain services.   


Mitigation Strategies and Corrective Actions

HHS addresses improper payments through mitigation strategies and corrective actions believing that “targeted actions will prevent and reduce improper payments in these areas.” Strategies and corrective actions in the hospital outpatient setting cited in this report includes:  


Internal Policy Change: In 2020, HHS implemented the Prior Authorization for Certain Hospital Outpatient Department (OPD) Services process. This initiative was once again expanded in the CY 2023 OPPS Final Rule to include Facet Joint interventions effective July 1, 2023.


Internal Process: Medical Review Strategies

Medical review strategies are developed “using improper payment data to target the areas of highest risk and exposure. HHS requires its Medicare review contractors to identify and prevent improper payments due to documentation errors in certain error-prone claim types,” including hospital outpatient claims.


Audits: Targeted Probe & Educate (TPE)

Medicare Administrative Contractors (MACs) perform the TPE process. In 2022, MACs continued to offer extensions as needed due to the continued impacts of COVID-19. Approximately 3,280 hospital outpatient providers were reviewed by the MACs in 2022.


Audits: Supplemental Medical Review Contractor (SMRC)

The SMRC conducts reviews on a post-payment basis at the direction of CMS. When the SMRC completes a review, the results are shared with the MACs for claim adjustments. Providers receive detailed review result letters and MAC demand letters for overpayment recovery. Letters include educational information regarding what was incorrect in the original billing of the claim. In 2022, the SMRC performed post-payment medical reviews for 26,777 hospital outpatient claims.


Audits: Recovery Audit Contractor (RAC) Reviews

In 2022, the largest share of Medicare FFS RAC collections (37.4 percent) were from hospital outpatient overpayments.


Moving Forward

  • Prepare for the July 1, 2023 addition of Facet Joint interventions to the Prior Authorization for Certain OPD Services process.
  • Identify active TPE, SMRC and RAC review targets to assess your compliance with related documentation, coding, and billing requirements.
  • Respond to additional documentation requests in a timely manner.

Beth Cobb

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