Knowledge Base Category -
MEDICARE TRANSMITTALS
Revisions to the Telehealth Billing Requirements for Distant Site Services - REVISED
Revised criteria that allows the GT modifier to be present on Method II CAH claim lines.
Quarterly Healthcare Common Procedure Coding System (HCPCS) Drug/Biological Code Changes – July 2018 Update - REVISED
The article is revised to show the Type of Service Code for CPT code 90739 remains as V.
Quarterly Update to the National Correct Coding Initiative (NCCI) Procedure-to-Procedure (PTP) Edits, Version 24.3, Effective October 1, 2018
Medical Review of Evaluation and Management (E/M) Documentation
Provides direction to Medicare’s medical review contractors on how to review claims where a medical student documented the E/M service.
Medicare Special Edition Articles
New Medicare Beneficiary Identifier (MBI) Get It, Use It – REVISED
This article was revised on July 11, 2018, to provide additional information regarding the format of the MBI not using letters S, L, O, I, B, and Z (page 2).
MEDICARE RULES
2019 Medicare Physician Fee Schedule (MPFS) Proposed Rule
Addresses changes to the Medicare physician fee schedule (PFS) and other Medicare Part B payment policies to ensure that our payment systems are updated to reflect changes in medical practice and the relative value of services, as well as changes in the statute.
https://s3.amazonaws.com/public-inspection.federalregister.gov/2018-14985.pdf
MEDICARE EDUCATIONAL RESOURCES
Medicare Billing for Cardiac Device Credits
Learn about billing Medicare inpatient and outpatient cardiac devices and reducing overpayments.
Beneficiary Notices Initiative (BNI) webpage – updated
New look for Medicare’s Notices webpage.
https://www.cms.gov/Medicare/Medicare-General-Information/BNI/index.html
Medicare Fee for Service Recovery Audit Program webpage – updated
New look for Medicare’s RAC webpage
Transition to New Medicare Numbers and Cards Fact Sheet
Medicare Quarterly Provider Compliance Newsletter – July 2018
Addresses common billing errors and other erroneous activities and provides guidance to help health care professionals address and avoid the top issues of the particular quarter.
MEDICARE FAST FACTS
Medicare Fast Facts resources this month include:
- Payment for Outpatient Services Provided to Beneficiaries Who Are Inpatients of Other Facilities
- Comprehensive Error Rate Testing: Arthroscopic Rotator Cuff Repair
- Proper Use of the KX Modifier for Part B Immunosuppressive Drug Claims
OTHER MEDICARE UPDATES
Contract Award for A/B MAC Jurisdiction F
CMS awarded the Jurisdiction F contract to Noridian, the current incumbent contractor for JF.
Can I be honest?
I have type 2 diabetes and take a pill for it every day, but I don’t like diabetes coding. Diagnosis code assignment for diabetes and diabetes-related conditions has always been confusing to me. When looking at a chart of a patient with diabetes, I frequently go back to the ICD-10 diagnosis coding guidelines and Coding Clinic articles to validate my understanding.
Based on some of the coding proficiency reviews we’ve done over the past couple of years, I think other coders may share some of my confusion. One of the most common diagnosis coding discrepancies we come across with diabetes coding is the scenario of a patient with Type 2 diabetes who is also taking an oral antidiabetic drug. We usually see the appropriate diagnosis code for Type 2 diabetes, but ICD-10 diagnosis code Z79.84 is not reported for long-term use of an antidiabetic drug when it’s applicable.
Z79.84 was introduced October 2016, and in addition to all the other diabetes-related coding rules we already had, this new code came with, yet, another rule to remember: When E11- is reported for type 2 diabetes, use an additional code to identify control using an oral antidiabetic / hypoglycemic drug.
In talking with coders and coding supervisors, one of the problems in picking up Z79.84 is that coders may not know which drugs are classified as an antidiabetic. The good news is – we don’t have to know if the drug is a biguanide versus an alpha-glucosidase inhibitor versus SGLT 2 inhibitor, etc., we just need to know which oral medications are considered antidiabetic or hypoglycemic.
Below is a list of the more common oral antidiabetic drugs we see. Did you realize the different preparations of Metformin had so many other names? Keep the list handy in case you see one of these drugs in your patient’s record, so you will have a better idea when Z79.84 should be reported in addition to the E11- diabetes code. Click here to see a more comprehensive list on the Healthline.com website.
Metformin / Kazano
Metformin / Invokamet
Metformin / Xigduo XR
Metformin / Synjardy
Metformin / Glucovance
Metformin / Jentadueto
Metformin / Actoplus
Metformin / PrandiMet
Metformin / Avandamet
Metformin / Kombiglyze XR
Metformin / Janumet
Sitagliptin / Januvia
Sitagliptin-Metformin / Janumet
Canagliflozin / Invokana
Canagliflozin-Metformin / Invokamet
Empagliflozin / Jardiance
Glimepiride / Amaryl
Glipizide / Glucotrol
Chlorpropamide / Diabinese
Tolazamide / Tolinase
Tobbutamide / Orinase
Jeffery Gordon
MEDICARE TRANSMITTALS
July 2018 Quarterly Average Sales Price (ASP) Medicare Part B Drug Pricing Files and Revisions to Prior Quarterly Pricing Files
CMS supplies MACs with the ASP and Not Otherwise Classified (NOC) drug pricing files for Medicare Part B drugs on a quarterly basis. Payment allowance limits under the Outpatient Prospective Payment System (OPPS) are incorporated into the Outpatient Code Editor (OCE). Also see related content at PalmettoGBA - “The drug pricing files contain the payment amounts used to reimburse for Part B covered drugs for the applicable quarter of 2018. The payment amounts in the quarterly ASP files are 106 percent of the Average Sales Price (ASP) calculated from data submitted by drug manufactures (ASP X 1.06). The ASP rate must be adjusted before applying the 22.5 percent reduction (for 340B-acquired drugs).”
Claim Status Category and Claim Status Codes Update
HIPAA requires all covered entities to use only Claim Status Category Codes and Claim Status Codes approved by the National Code Maintenance Committee in the ASC X12 276/277 Health Care Claim Status Request and Response transaction standards adopted for electronically submitting health care claims status requests and responses. These codes explain the status of submitted claim(s).
July 2018 Update of the Hospital Outpatient Prospective Payment System (OPPS)
Changes and billing instructions for various payment policies implemented in the July 2018 OPPS update.
July 2018 Integrated Outpatient Code Editor (I/OCE) Specification Version 19.2
The I/OCE is being updated for July 1, 2018. The I/OCE routes all institutional outpatient claims (which includes non-OPPS hospital claims) through a single I/OCE.
MEDICARE SPECIAL EDITION ARTICLES
New Medicare Beneficiary Identifier (MBI) Get It, Use It
Explains ways you can get MBIs.
REVISED MEDICARE TRANSMITTALS
Diagnosis Code Update for Add-on Payments for Blood Clotting Factor Administered to Hemophilia Inpatients – REVISED
Revised to correct the code description for ICD-10-CM D68.32.
MEDICARE EDUCATIONAL RESOURCES
Medicare Fast Facts
Medicare Fast Facts resources this month include:
- Provider Minute Vide: The Importance of Proper Documentation
- Bill Correctly for Device Replacement Procedures
- Billing for Stem Cell Transplants
FEDERAL REGISTRY CMS RULES
Medicare Program; Changes to the Comprehensive Care for Joint Replacement Payment Model (CJR): Extreme and Uncontrollable Circumstances Policy for the CJR Model
Finalizes a policy that provides flexibility in the determination of episode spending for Comprehensive Care for Joint Replacement Payment Model (CJR) participant hospitals located in areas impacted by extreme and uncontrollable circumstances for performance years 3 through 5.
https://www.gpo.gov/fdsys/pkg/FR-2018-06-08/pdf/2018-12379.pdf
OTHER MEDICARE UPDATES
Hospital Appeals Settlement Process Update
May 8, 2018, CMS executed settlements with an additional 612 hospitals, representing approximately 72,000 claims.
FY 2019 ICD-10-PCS Procedure Codes
FY 2019 ICD-10-PCS procedure code updates including a complete list of code titles are posted on the 2019 ICD-10-PCS webpage.
FY 2019 ICD-10-CM Codes
FY 2019 ICD-10-CM code updates have been posted on the CDC website at: https://www.cdc.gov/nchs/icd/icd10cm.htm.
Although the official start of summer is not until tomorrow at 5:07 AM Central Time, here in Alabama the oppressive humidity and heat activated thunderstorms have already begun. Additionally, and much to my delight, I am already seeing more lightening bugs in the night sky than in recent years. This brings to mind the oft made statement by Mark Twain, “the difference between the almost right word and the right word is really a large matter. ‘tis the difference between the lightening bug and the lightening.”
The same analogy can be made for documentation in a medical record. CMS posted the FY 2019 ICD-10-CM diagnosis code updates to the CMS website on June 11, 2018. Several of the updates revise or expand a code description. Professional Coders and Clinical Documentation Improvement Specialists should take on the challenge of a little summer reading to find out what is changing. In the meantime, here are a few highlights about what will change come October 1, 2018.
Code Changes by the Numbers:
The FY 2019 ICD-10-CM codes updates includes:
- 279 New Codes
- 143 Revised Titles
- 51 Deleted Codes
- 71,932 Total Codes for FY 2019. (Increase from 71,704 in FY 2018).
The following tables highlights some of the changes come October 1, 2018.
(*)Note, code Z62813 falls within the Z62 category “Problems Related to Upbringing.” This is one of the ICD-10-CM code categories that identifies patients with potential health hazards related to socioeconomic and psychosocial circumstances. Coding Clinic for ICD-10-CM/PCS, First Quarter 2018 advised that it would be acceptable to report these codes based on documentation from non-physician clinicians following the patient. You can read more about the Z55-Z65 code categories in a related MMP article about Social Determinants of Health.
Information about the FY 2019 ICD-10-CM code updates can also be found on the Centered for Disease Control and Prevention (CDC) website at: https://www.cdc.gov/nchs/icd/icd10cm.htm. Reminder, the code updates will be used for discharges occurring from October 1, 2018 through September 30, 2019.
Beth Cobb
The Office of Inspector General (OIG) has released the Spring 2018 Semiannual Report to Congress. This report summarizes work by the OIG for the reporting period covering October 1, 2017 to March 31, 2018. This Report describes work undertaken “to identify significant problems, abuses, deficiencies, remedies, and investigative outcomes relating to the administration of HHS programs and operations that were disclosed during the reporting period.”
The Inspector General, Daniel R. Levinson, notes “over the 6-month reporting period OIG worked to enhance the integrity of HHS programs and operations, protect vulnerable populations, and drive value in health and human services…Looking forward, OIG will continue to leverage our staff expertise to inform Department-wide goals, including combating the opioid crises, bringing down the cost of prescription drugs, addressing the cost and availability of health insurance, and transforming our health care system to a value-based system.”
This article highlights OIG overall expected recoveries and statistics found in the report and provides examples of OIG Activities specific to the Centers for Medicare & Medicaid Services (CMS) from the first half of FY 2018.
“Fighting Fraud” by the Numbers
Highlights of Enforcement Accomplishments
- $1.46 billion is the expected investigative recoveries.
- 424 is the number of individuals or entities that engaged in crimes against HHS programs where criminal actions against them have been taken.
- 1,588 is the number of individuals and entities that have been excluded from Federal health care programs.
- 349 is the number of civil actions taken against individuals or entities.
Highlights of Accomplishments in Assessment of Mismanagement and Abuse in HHS Programs
- $187.5 million is the amount the OIG expects to recover.
- $1.5 billion is the amount of potential savings.
- $680 million is the amount of questioned costs during this time period.
Highlights from CMS Medicare Program Reports and Reviews
CMS Did Not Adequately Address Discrepancies in the Coding Classification for Kwashiorkor (A-03-14-00010), November 2017
Report Highlights
- 2,145 inpatient claims at 25 providers were reviewed.
- The OIG determined that only 1 claim correctly included the diagnosis code for Kwashiorkor.
- Findings equated to overpayments in excess of $6 million.
- CMS agreed with OIGs recommendations.
- The 25 hospitals reviewed repaid $5.7 million in overpayments.
Note: In January of this year the OIG Announced the Active Work Plan Item: Hospitals Billing for Severe Malnutrition on Medicare Claims. The OIG indicated in the announcement that “this review will assess the accuracy of Medicare payments for the treatment of severe malnutrition. We will determine whether providers are complying with Medicare billing requirements when assigning diagnosis codes for the treatment of severe types of malnutrition on inpatient hospital claims.”
Wisconsin Physicians Service Paid Providers for Hyperbaric Oxygen Therapy Services That Did Not Comply With Medicare Requirements (A-01-15-00515), February 2018
Report Highlights
- Wisconsin Physicians Service (WPS) paid 73 providers for HBO therapy services that did not comply with Medicare requirements.
- OIG estimated WPS overpaid providers in Jurisdiction 5 $42.6 million.
- WPS “generally agreed” to the following OIG recommendations:
- Recover the “appropriate portion of the $300,789 in identified Medicare overpayments,
- Notify providers responsible for the 44,820 non-sampled claims with potential overpayments to investigate and return any identified overpayments, and
- To identify and recovery any improper payments after the audit and strengthen policies & procedures for making payments for HBO therapy.
Note: HBO Therapy Services is a current Targeted Probe & Educate Medical Review target for Palmetto JM. Palmetto’s May 15, 2018 Ask the Contractor Teleconference (ACT) focused on Hyperbaric Oxygen Therapy. You can find Answers to Pre-submitted Questions on Palmetto’s JM website.
While this is not an Active Medical Review for Palmetto JJ (Alabama, Georgia, Tennessee), for those providing HBO therapy services it would be worth your time to read this and ask the question, are we compliant with Medicare requirements?
Hospitals Did Not Comply With Medicare Requirements for Reporting Certain Cardiac Devices (A-05-16-00059), March 2018
Report Highlights
- All 296 payments reviewed did not comply with Medicare requirements.
- Medicare contractors incorrectly paid hospitals $7.7 million rather than the $3.3 million they should have been paid.
- CMS agreed with the recommendation to “consider studying alternatives to implementing edits in order to eliminate the current Medicare requirements for reporting device credits.”
Note: In the Thursday, June 7, 2018 edition of the MLNConnects e-newsletter, CMS included a Provider Compliance Reminder for correct billing for device replacement procedures. The reminder provides links to resources to correctly bill and avoid overpayment recoveries.
Beth Cobb
We often associate the term “it takes a village” with the raising of children. It is true that parents, grandparents, relatives, teachers, coaches, church members, healthcare providers, and/or others often play key roles in bringing up a physically and emotionally healthy, well-adjusted young person. But what brought the “it takes a village” phrase to my mind today was listening to a replay of Palmetto GBA’s webcast on Inpatient Psychiatric Facility (IPF) coverage and documentation requirements.
Palmetto likely offered this educational session in preparation for and in response to their Targeted Probe and Educate (TPE) medical review of DRG 885, Psychoses. This is a target review area for both Palmetto’s Jurisdictions - J and M. First Coast, the Medicare Administrative Contractor (MAC) for Jurisdiction N, also has a planned TPE review for this DRG. The Palmetto webcast reminded providers that other Medicare review entities such as the CERT contractor, Recovery Auditors, and the Office of Inspector General (OIG) could review inpatient psych or any other Medicare services.
According to the webcast, the “villagers” involved and their concerns and responsibilities for IPF services are listed below. Many tasks will involve the input of multiple staff and are a shared responsibility – more evidence that “it takes a village.”
Physicians
- Patient must be under the care of a physician
- Write admission and other orders for patient’s care
- Perform a psychiatric evaluation of the patient at admission to include
- Medical history and mental status
- Onset of illness and admission circumstances
- Patient attitudes and behaviors
- An estimate of intellectual functioning, memory functioning & orientation; and
- A descriptive inventory of patient’s assets
- Certify/recertify the need (medical necessity) for inpatient care, which includes
- Patient psychiatric condition severe enough to warrant inpatient care
- Need for active treatment
- Intensive, comprehensive, multimodal treatments exceeding the level and intensity of those that may be rendered in an outpatient setting
- Generally, an expectation of improvement of the patient’s condition or for diagnostic purpose
- Establish a treatment plan that includes
- Substantiated diagnosis
- Short-term & long-range goals
- Specific treatment modalities utilized
- Each treatment team member’s responsibilities
- Adequate documentation to justify diagnosis & treatment/rehabilitation activities carried out
- Document H&P, evaluations, examinations, treatment plan, progress notes, and discharge summary
Clinicians (Nurses, Social Workers)
- Perform and document assessments and interviews
- Provide and document treatments including description of service, content and purpose, patient’s response and correlation to treatment plan goals
Utilization Review, Social Services, Discharge Planning
- Appropriate utilization of patient benefit days and lifetime reserve days in appropriate setting
Billing
- Submit correct type of bill (TOB) with appropriate revenue and occurrence codes
- Special considerations for
- Admission source “D” for patients transferred from acute care hospital to their psych distinct part unit (prevents overpayment due to ER adjustment)
- One day payment window
- Interrupted stays and occurrence span code 74
- Services provided by other facilities during IPF stay
Coders
- Assignment of correct primary and secondary diagnosis codes to the highest degree of specificity
- Discharge status code
These are just some of the coverage and documentation requirements to support Medicare inpatient psychiatric services. I recommend providers who offer inpatient psychiatric services listen to this webcast (located on Palmetto’s Past Events webpage) whether you are in Palmetto’s jurisdictions or not. The information applies universally to all Medicare inpatient psych services. Palmetto also shared some of their findings from TPE reviews so far as well as some of the CERT findings. Providers need to pay special attention to make sure their records include:
- Physician’s orders for admission and other services. Be sure all orders include a legible signature, a date, and the author’s credentials. If signatures are illegible, send an attestation log with the documentation upon review.
- Valid and timely certifications and recertifications.
- An initial psychiatric evaluation at the time of admission or no later than 60 hours after admission
- Documentation that services and treatments are related to improving the patient’s condition
- A valid, individualized treatment plan that supports psychotherapy with type, amount, frequency, duration, diagnosis & anticipated goals
- Documentation of active treatments during billing period
- Complete and sufficient documentation
You may want to hold a town hall meeting for all the villagers to communicate, coordinate and understand their individual and shared responsibilities. Sometime it takes a village meeting to guide a village.
Debbie Rubio
“The social determinants of health are the conditions in which people are born, grow, live, work and age. These circumstances are shaped by the distribution of money, power and resources at global, national and local levels. The social determinants of health are mostly responsible for health inequities - the unfair and avoidable differences in health status seen within and between countries.”
- Social Determinants of Health World Health Organization definition
The Office of Disease Prevention and Health Promotion’s Healthy People 2020 initiative includes a Social Determinants of Health (SDOH) topic area. They note that “social determinants of health are conditions in the environments in which people are born, live, learn, work, play, worship, and age that affect a wide range of health, functioning, and quality-of-life outcomes and risks…resources that enhance quality of life can have a significant influence on population health outcomes. Examples of these resources include safe and affordable housing, access to education, public safety, availability of healthy foods, local emergency/health services, and environments free of life-threatening toxins.”
In general, since the Wednesday@One focuses on topics related to Medicare Rules and Regulations in the acute hospital setting, you may be asking, this is interesting but what does it have to do with the hospital? Well, I am glad you “asked.”
ICD-10-CM codes included in categories Z55-Z65 identify patients with potential health hazards to socioeconomic and psychosocial circumstances. Information represented in this code block is information that would typically be identified by a Social Worker, Case Manager, or admitting nurse as a hospital begins the discharge planning process as soon as the patient is admitted.
In Coding Clinic for ICD-10-CM/PCS, First Quarter 2018, a question was asked to verify whether or not these codes could be assigned based on non-physician documentation. Advice given was that these codes represent social information and it would be acceptable to report them based on documentation from other clinicians following the patient.
To help you begin to understand what information is represented in these codes categories, the following table provides a high-level detail of the code categories and examples of codes within each category.
In MMP’s 2019 IPPS Proposed Rule series of articles, there was a related article discussing CMS’ efforts to account for social risk factors in several of the Hospital Quality Reporting Programs.
The Health People 2020 SDOH topic area has a goal to “create social and physical environments that promote good health for all.” A key to this is analyzing and acting upon data. As a hospital it is important that you begin to identify and utilize these codes.
If you are interested in learning more about SDOH’s, you can visit the Centers for Disease Control and Prevention (CDC) Social Determinants of Health web page at https://www.cdc.gov/socialdeterminants/.
Beth Cobb
MEDICARE TRANSMITTALS
Revisions to the Telehealth Billing Requirements for Distant Site Services
Implements requirements for billing modifier GT for Telehealth Distant Site Services. As of January 1, 2018, the GT modifier is only allowed on institutional claims billed by a Critical Access Hospital (CAH) Method II.
Implementation of Changes to the Pre-Payment Additional Documentation Request (ADR) Letters for Medical Review
https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2018Downloads/R2083OTN.pdf
Quarterly Update for Clinical Laboratory Fee Schedule and Laboratory Services Subject to Reasonable Charge Payment
Updates to Publication 100-04, Chapters 1 and 27, to Replace Remittance Advice Remark Code (RARC) MA61 with N382
MACs will use N382 in place of MA61 to communicate reject/denials for patient identifiers (HICN or MBI) in all remittance advices and 835 transactions. However, MACs will continue to use RARC MA61 only when/if communicating rejections/denials related to a missing/incomplete/invalid social security number.
Inpatient Prospective Payment System (IPPS) and Long-Term Care Hospital (LTCH) PPS Extensions per the Advancing Chronic Care, Extenders, and Social Services (ACCESS) Act Included in the Bipartisan Budget Act of 2018
Information and implementation instructions for:
- Section 50204 – Extension of Increased Inpatient Hospital Payment Adjustment for Certain Low-Volume Hospitals
- Section 50205 – Extension of the Medicare-Dependent Hospital (MDH) Program
- Section 51005 – Adjustments to the LTCH Site Neutral Payment Rate
Supervised Exercise Therapy (SET) for Symptomatic Peripheral Artery Disease (PAD) – REVISED
The article was revised on May 15, 2018, to clarify that one of the requirements of the SET program is it must be conducted in a hospital outpatient setting or in a physician’s office.
Quarterly Healthcare Common Procedure Coding System (HCPCS) Drug/Biological Code Changes – July 2018 Update – REVISED
A sentence is added to show that Part B payment for Q9995 includes the clotting factor furnishing fee.
Intent to Reopen
Provides instructions for contractors to: provide notification of the reopening process and to notify the provider or supplier of their intent to reopen a specific claim when requested documentation is received after a denial of the claim has been made.
https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2018Downloads/R796PI.pdf
Remittance Advice Remark Code (RARC), Claims Adjustment Reason Code (CARC), Medicare Remit Easy Print (MREP) and PC Print Update
Quarterly Update to the Medicare Physician Fee Schedule Database (MPFSDB) - July 2018 Update
MEDICARE COVERAGE UPDATES
International Classification of Diseases, Tenth Revision (ICD-10) and Other Coding Revisions to National Coverage Determinations (NCDs)
CR10622 makes coding and clarifying adjustments to the following NCDs:
- NCD 110.18 Aprepitant
- NCD 150.3 Bone Mineral Density Studies
- NCD 190.11 Prothrombin Time/International Normalized Ratio (PT/INR)
- NCD 220.6.16 Positron Emission Tomography (PET) for Infection/Inflammation
- NCD 220.6.17 PET for Solid Tumors
- NCD 220.13 Percutaneous Image-Guided Breast Biopsy
MEDICARE PRESS RELEASES
CMS Announces Agency’s First Rural Health Strategy
The agency’s first Rural Health Strategy intended to provide a proactive approach on healthcare issues to ensure that the nearly one in five individuals who live in rural America have access to high quality, affordable healthcare.
CMS Unveils Enhanced “Drug Dashboards” to Increase Transparency on Drug Prices
For the first time, the dashboards include year-over-year information on drug pricing and highlight which manufactures have been increasing their prices.
MEDICARE EDUCATIONAL RESOURCES
Palmetto JM Provider Contact Center (PCC) Frequently Asked Questions (FAQs): January 2018 - April 30, 2018
MLN Fact Sheet Complying with Medicare Signature Requirements
Targeted Probe and Educate Video
MEDICARE RULES
Hospital IPPS and LTC 2019 FY Proposed Rule
The proposed rule proposes updates to Medicare payment policies and rates under the Inpatient Prospective Payment System (IPPS) and the Long-Term Care Hospital (LTCH) Prospective Payment System (PPS). Also includes proposal concerning Quality Programs, EHR Incentive Programs, Cost-Reporting and Physician Claim Certifications.
https://s3.amazonaws.com/public-inspection.federalregister.gov/2018-08705.pdf
Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities (SNF) Proposed Rule for FY 2019, SNF Value-Based Purchasing Program, and SNF Quality Reporting Program
This proposed rule would update the payment rates used under the prospective payment system (PPS) for skilled nursing facilities (SNFs) for fiscal year (FY) 2019.
https://s3.amazonaws.com/public-inspection.federalregister.gov/2018-09015.pdf
Inpatient Rehabilitation Facility Prospective Payment System for Federal Fiscal Year 2019
This proposed rule would update the prospective payment rates for inpatient rehabilitation facilities (IRFs) for federal fiscal year (FY) 2019.
https://s3.amazonaws.com/public-inspection.federalregister.gov/2018-08961.pdf
FY 2019 Inpatient Psychiatric Facilities Prospective Payment System and Quality Reporting Updates for Fiscal Year Beginning October 1, 2018 (FY 2019)
This proposed rule would update the prospective payment rates for Medicare inpatient hospital services provided by inpatient psychiatric facilities (IPFs), which include psychiatric hospitals and excluded psychiatric units of an acute care hospital or critical access hospital.
https://s3.amazonaws.com/public-inspection.federalregister.gov/2018-09069.pdf
OTHER MEDICARE UPDATES
Kepro Case Review Connections, Acute Care Edition, Spring 2018
A quarterly e-newsletter from your Beneficiary and Family Centered Care Quality Improvement Organization (BFCC-QIO).
https://www.keproqio.com/providers/spring-2018-acute-newsletter/
Trump Administration Releases Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs
“We rarely talk about cost. We talk about waste, quality, and safety, and we find our costs go down.”
- Patrick Hagan, former COO of Seattle Children’s Hospital
Risk Factor: Socio-economic Status
The Establishing Beneficiary Equity in the Hospital Readmission Reduction Program Act of 2015 (S. 688 and H.R. 1343) would have required the CMS to account for socio-economic status when calculating risk-adjusted readmission penalties. This bill garnered support from the Association of American Medical Colleges as well as the American Hospital Association. You can read more about this Act in a related MMP article.
A year later the House Ways and Means Committee released the Helping Hospitals Improve Patient Care Act of 2016 (H.R. 5273) that included a modified version of H.R. 1343. This latest version of the bill was passed in the House and was sent to the Senate where it was read twice and referred to the Committee on Finance.
Fast Forward to the 2019 IPPS Proposed Rule which includes a discussion about “Accounting for Social Risk Factors” (including socioeconomic status) in the following Programs discussed in the Proposed Rule:
- Hospital Readmission Reduction Program (HRRP),
- Hospital Value Based Purchasing (VBP) Program,
- Hospital Acquired Condition (HAC) Reduction Program,
- Hospital Inpatient Quality Reporting (IQR) Program,
- IPPS-Exempt Cancer Hospital Quality Reporting (PCHQR) Program, and
- Long Term Care Hospital Quality Reporting Program (LTCH QRP).
Accounting for Social Risk Factors
CMS notes their “commitment to ensuring that medically complex patients, as well as those with social risk factors, receive excellent care. We discussed how studies show that social risk factors, such as being near or below the poverty level as determined by HHS, belonging to a racial or ethnic minority group, or living with a disability, can be associated with poor health outcomes and how some of this disparity is related to the quality of health care.”
Specific CMS aims within their core objectives include:
- Improving health outcomes,
- Attaining health equity for all beneficiaries, and
- Ensuring that complex patients as well as those with social risk factors receive excellent care.
The Office of the Assistant Secretary for Planning and Evaluation (ASPE) and the National Academy of Medicine
The ASPE and National Academy of Medicine have examined the influence of social risk factors in the CMS value-based purchasing programs. To date, as required by the IMPACT Act of 2014, ASPE has provided a report to Congress where they found that “in the context of value-based purchasing programs, dual eligibility was the most powerful predictor of poor health care outcomes among those social risk factors they examined and tested.” ASPE is continuing to examine this issue in a second report required by the IMPACT Act that is due to Congress in the fall of 2019.
National Quality Forum (NQF)
CMS noted in the FY 2018 IPPS/LTCH PPS Final Rule, that the NQF “undertook a 2-year trial period in which certain new measures and measures undergoing maintenance review have been assessed to determine if risk adjustment for social risk factors is appropriate for those measures.” This period ended April 2017.
NQF Trial Conclusion:
The NQF notes in the July 2017 Social Risk Trial Final Report Abstract that “the trial period has illuminated the feasibility of adjusting measures for social risk, with 17 measures endorsed by NQF for factors such as a person’s level of education.” The NQF has extended the socioeconomic status (SES) Trial, allowing further examination of social risk factors in outcome measures.
The Centers for Medicare and Medicaid Services
CMS solicited feedback in the FY and CY 2018 Proposed Rules on which social risk factors provide the most valuable information to stakeholders for illuminating differences in outcome rates among patient groups. Commenters encouraged CMS to stratify measures by other social risk factors such as age, income, and educational attainment (82 FR 38404).
CMS Next Steps
As next steps, CMS is considering the following:
- Options to reduce health disparities among patient groups within and across hospitals by increasing the transparency of disparities as shown by quality measures,
- Implementing a hospital-specific disparity method that would promote quality improvement by calculating difference in outcome rates among patient groups within a hospital while accounting for their clinical risk factors,
- Implementing a method to assess hospitals’ outcome rates for subgroups of patients, such as dual eligible patients, across hospitals, allowing for a comparison among hospitals on their performance caring for patients with social risk factors.
Specific to the Hospital IQR Program, CMS acknowledges the complexity of interpreting stratified outcome measures and plans to stratify Pneumonia Readmission measure (NQF #0506) data by highlighting both hospital-specific disparities and readmission rates specific for dual-eligible beneficiaries across hospitals for dual-eligible patients in hospitals’ confidential feedback reports beginning Fall 2018. CMS is considering expanding confidential hospital feedback reports for other measures and eventually making this data publicly available on the Hospital Compare website.
CMS believes “the stratified results will provide hospitals with information that could illuminate disparities in care or outcome, which could subsequently be targeted through quality improvement efforts. We further believe that public display of this information could drive consumer choice and spark additional improvement efforts.” CMS plans to continue to work with the ASPE, the public and key stakeholders to “identify policy solutions that achieve the goals of attaining health equity for all beneficiaries and minimizing unintended consequences.”
Beth Cobb
When we think of copycat products, we often picture the nefarious character flipping open his overcoat to reveal a row of “Rolex” watches available at bargain basement prices - in other words, counterfeit products of a lesser quality and illegally bearing a trademark name. But in the world of biological drugs, legitimate but costly copycat products offer physicians and patients other options for treatment. With appropriate payment policies, the United States biosimilar product marketplace can continue to grow resulting in cost savings and those additional treatment options. In the 2018 Medicare Physician Fee Schedule Final Rule (MPFS), CMS changed the payment policy for biosimilars to separately code and determine payment for each biological biosimilar product under Medicare Part B.
The original policy addressing biosimilars was from the 2016 MPFS rule. At that time CMS decided to base the payment amount for a biosimilar biological product on the average sales price (ASP) of all biosimilars for one reference product and to assign one payment code (HCPCS code) to all biosimilars for the same reference product. “In general, this means that products that rely on a common reference product’s biologics license application (that is, FDA’s previous finding of safety, purity, and potency for the common reference product) are grouped into the same payment calculation for determining a single ASP payment limit and that a single HCPCS code is used for such biosimilar products. The regulation went into effect on January 1, 2016.” Biosimilars sharing the same HCPCS code, but produced by different manufacturers, were distinguished by HCPCS modifiers.
There were varying opinions about Medicare’s payment policy for biosimilars from the beginning – some stakeholders supporting the use of one HCPCS code and others opposing it. In the 2018 MPFS FR, CMS notes, “The biosimilar product marketplace has continued to grow, and four biosimilar biological products that are paid under Part B have been licensed, including one product approved in 2017 that is sharing a HCPCS code with another previously licensed biosimilar biological product. Based on the number of biosimilar biological products that are reported to be nearing approval and the approvals made over the past 2 years, CMS anticipates that several more biosimilar biological products will be licensed for use in the United States during the next year and that during the following years, the marketplace will continue to grow steadily, provided that the approved products are marketed without delay. …CMS is aware of concerns that current Medicare policy may discourage development of new biosimilars and other innovation in this area potentially resulting in higher costs over time due to a lack of competition in the market place.”
As usual for CMS rules, the topic was discussed in great detail in the 2018 MPFS Final Rule (starting on page 53182). Some of the more interesting points of the discussion include,
Facts about Biosimilars:
- Biosimilars are similar, but not identical, to their reference products, and due to these subtle differences, they may have different therapeutic and adverse effects on patients, requiring clinical distinctions between the products.
- None of the currently available biosimilars are approved as interchangeable. The current biosimilar approval process does not compare biosimilar biological products to each other, rather, only similarity to a reference product is established and the licensing of a biological product under the biosimilar pathway does not mean that the products are interchangeable.
- Biosimilar biological products may be approved for fewer indications than the reference product and the approved indications within a group of biosimilar biological products with the same reference product may vary.
- These products are likely to be expensive and may have different acquisition costs. The development costs for these products and their manufacturing facilities are estimated to be in the hundreds of millions of dollars.
Stakeholders’ Comments
- Grouping (biosimilars) for payment could lead to prescribing choices based on cost rather than clinical considerations.
- The current policy may impair access to biosimilars, could potentially limit the introduction of biosimilars to the US market, and would fail to maximize competition and savings.
- Grouping products for payment that do not have all the same indications could cause clinicians and patients to think the products are interchangeable or could lead to off-label use.
- Blended payment could be a significant financial risk to the provider because the products that would be the best choice for a patient may not be paid above acquisition cost.
- ‘‘Race to the bottom’’ pricing competition would result from shared codes and lead to prices that could not sustain educational efforts and other activities associated with marketing new and complex biological products, ultimately resulting in manufacturers leaving the United States marketplace.
- Determining a payment for each biosimilar product by using individual HCPCS codes would drive and reward innovators, producing the potential cost savings of at least 10–15 percent compared to the reference biologic ASP necessary for biosimilar products to compete with the reference biological.
Because of the above facts and concerns, CMS has “become increasingly concerned about the relationship between cost, prices and competition; specifically, many commenters’ continued unease regarding the effects of our payment policy on patient and provider choices, as well as the biosimilar marketplace. We have also considered how the payment policy could affect market entry of new biosimilar manufacturers. If payment amounts limit manufacturers’ willingness to invest in the development of new biosimilars, it could in the long term, decrease the number of biosimilar biological products that are available to prescribe and thus impair price competition. Given that the United States’ biosimilar biological product marketplace is still relatively new, we believe that it is important to maintain a payment policy innovation as well as reasonable pricing for consumers. We agree that it is important to consider and effect policy changes early, as this portion of the drug marketplace develops, in order to support a robust marketplace that provides choices for providers and patients while maximizing savings.”
Effective January 1, 2018, newly approved biosimilar biological products with a common reference product will no longer be grouped into the same HCPCS code. Each biosimilar will be assigned a unique HCPCS code and payment will be based on the ASP for that individual biosimilar. Biosimilar HCPCS codes in use prior to January 1, 2018 are being changed and replaced to be in compliance with the new payment policy. This is described on the Medicare Biosimilar webpage and addressed in the April 2018 OPPS Update MLN Matters Article. Effective April 1, 2018, the descriptor for HCPCS code Q5101 (filgrastim biosimilar) is being changed to “Injection, zarxio.” HCPCS code Q5102 (infliximab biosimilar) is being replaced effective April 1, 2018 with HCPCS codes Q5103 (Injection, inflectra) and Q5104 (Injection, renflexis). The new biosimilar payment policy also makes the use of modifiers that describe the manufacturer of a biosimilar product unnecessary. Therefore, modifiers ZA, ZB, and ZC will be discontinued for dates of service on or after April 1, 2018. However, please note that HCPCS code Q5102 and the requirement to use applicable biosimilar modifiers remain in effect for dates of service prior to April 1, 2018.
Debbie Rubio
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