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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

Peripheral Nerve Block for Pain Management after Total Knee Arthroplasty
Published on Mar 08, 2023
 | Coding 

Did You Know?

A peripheral nerve block (PNB) may be reported for postoperative pain management following a Total Knee Arthroplasty (TKA), if not captured by the hospital’s Chargemaster.

Why It Matters?

Various studies have shown that PNBs following a TKA can deliver safe and effective pain relief. This type of pain relief can improve postoperative pain, patient satisfaction, and decrease the need for opioid use. Coding PNBs do not affect the DRG; however, reporting a procedure code for PNB will give a more accurate clinical picture of what was required to take care of that TKA patient.

Also, an ICD-9 Coding Clinic noted that coding a procedure for management of postoperative pain was permissible.

What Can I Do?

  1. Review documentation from the Anesthesiologist that indicates the surgeon requested a PNB for postoperative pain management. This documentation is typically found on a Pre-Anesthesia Evaluation sheet. Types of PNB: Femoral, Obturator, Sciatic, Lumbar Plexus, and Adductor Canal Nerve.
  2. Contact the business office to see if this procedure was captured in the Chargemaster.
  3. Verify if there is a hospital policy for coding secondary procedures that do not affect the DRG.
  4. Educate coding staff.


Coding Clinic, 2nd Quarter 2000, page 14

Review on Nerve Blocks Utilized for Perioperative Total Knee Arthroplasty Analgesia | Published in Orthopedic Reviews (

Anita Meyers

Colorectal Cancer Awareness Month
Published on Mar 08, 2023
 | Coding 

Did You Know?

The U.S. Preventive Services Task Force’s indicated in their May 18, 2021 Final Recommendation statement for colorectal cancer screening that:

  • It is estimated that 10.5% of new colorectal cancer cases occur in persons younger than 50 years,
  • Incidence of colorectal cancer (specifically adenocarcinoma) in adults aged 40 to 49 years has increased by almost 15% from 2000-2002 to 2014-2016,
  • In 2016, 25.6% of eligible adults in the US had never been screened for colorectal cancer, and
  • In 2018, 31.2% were not up to date with screening.

Based on these recommendations, this time last year I wrote that 45 was the new 50 for colorectal cancer screening.

Why it Matters?

Effective January 1, 2023, the recommended minimum age for certain colorectal screening tests has decreased from 50 to 45 years of age and older.

MLN Matters article MM13017, Removal of a National Coverage Determination and & Expansion of Coverage of Colorectal (CRC) Screening includes:

  • A list of the specific screening tests where the minimum age has decreased from 50 to 45 years and older, and  
  • An expanded definition of CRC screening tests and new billing instructions for colonoscopies under certain scenarios.

Also, National Coverage Determination (NCD 210.3) Colorectal Cancer Screening Tests has been revised to reflect the decrease in minimum age for each of the covered indications listed in this policy.

2023 Colorectal Cancer Screening Claims Being Held: Palmetto GBA, the Medicare Administrative Contractor for Jurisdictions J and M posted the following open claims issue regarding colorectal cancer screening claims:

“CMS has instructed Medicare Administrative Contractors to hold colorectal cancer screening claims with HCPCS codes G0104, G0105, G0106, G0120, G0121, G0327, G0328, 81528 and CPT® code 82270 until April 4, 2023. Claims for dates of service on or after January 1, 2023, will be held to allow the CMS system maintained to make updates to the claim processing system to accommodate 2023 colorectal cancer screening coverage changes.”

What Can You Do?

As a healthcare provider, be aware of the changes in Medicare’s colorectal screening coverage. The following changes have been made to the MLN Educational Tool Medicare Preventive Services

  • Information has been added about reduced coinsurance (starting January 1, 2023) when a screening colorectal cancer procedure becomes diagnostic or therapeutic,
  • The reduced minimum age for colorectal cancer screening tests from 50 to 45, and
  • If a non-invasive stool-based test returns a positive test, colorectal cancer screening tests now include a follow-up screening colonoscopy.  

As a healthcare consumer, I encourage everyone to talk with your doctor about your risk(s) for colorectal cancer and the need for screening tests.


U.S. Preventive Services Task Force May 18, 2021 Final Recommendation Statement for colorectal cancer screening:

MLN MM13017:

MLN Educational tool Medicare Preventive Services:

NCD 210.3 Colorectal Cancer Screening Tests:

Palmetto GBA Claims Payment Issue: 2023 Colorectal Cancer Screening Claims Being Held:

Beth Cobb

February 2023 Medicare Transmittals, MLN Articles and Coverage Updates
Published on Mar 01, 2023
 | Billing 
 | Coding 

Medicare Transmittals & MLN Articles

January 24, 2023: MLN MM12865: Provider Enrollment: Regulatory Changes Make sure your staff knows about recent enrollment changes, including Skilled Nursing Facility (SNF) screening and fingerprinting requirements, screening of certain changes of ownership, and screening for “bump-ups.”


January 27, 2023: MLN MM13063: Rural Health Clinic & Federally Qualified Health Center Medicare Benefit Policy Manual Update This article highlights key 2022 and 2023 updates for Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs) for example, effective January 1, 2023, RHCs and FQHCs are paid for chronic pain management (CPM) services when a minimum of 30 minutes of qualifying non-face-to-face CPM services are provided during a calendar month.


February 2, 2023: MLN MM13017: Removal of a National Coverage Determination & Expansion of Coverage of Colorectal Cancer Screening This article details removal of NCD 160.22 Ambulatory Electroencephalographic (EEG) Monitoring, the minimum age for certain colorectal screening tests (CRC) decreasing from 50 to 45, and expansion of the definition of CRC screening tests and new billing instructions for colonoscopies under certain scenarios.


February 2, 2023: MLN MM13052: New Payment Adjustments for Domestic N95 Respirators Under the OPPS & IPPS, CMS is providing payment adjustments to hospitals for National Institute for Occupational Safety and Health (NIOSH) approved surgical N95 respirators cost differential. To be reimbursable by Medicare, NIOSH-approved surgical N95 respirators must be wholly made in the United States. Action needed related to this MLN article is to make sure your reimbursement staff know about the cost reporting period changes and documentation requirements starting January 1, 2023.


February 2, 2023: MLN MM13082: Clinical Laboratory Fee Schedule & Laboratory Services Subject to Reasonable Charge Payment: Quarterly Update The next CLSF data reporting period for Clinical Diagnostic Laboratory Tests (CDLTs) is delayed until January 1- March 31, 2024. This article also provides information about the general specimen collection fee increase and new and discontinued HCPCS codes.


MLN MM12103: Extension of Changes to the Low-Volume Hospital Payment Adjustment & the Medicare Dependent Hospital Program Affected Providers includes Low-volume hospitals and Medicare-dependent hospitals (MDHs). This article includes information and criteria and payment adjustments for FY 2023 and the extension of the MDH program through September 30, 2023. 

Revised Transmittals & MLN Articles


December 14, 2022 – Revised January 23, 2023: MLN MM13031: Hospital Outpatient Prospective Payment System: January 2023 Update This article was revised due to a revision to Change Request (CR) 13031 updating tables 5 and 6 and added table 20 to update the pass-through status of 5 devices to extend pass-through status for a 1-year period starting on January 1, 2023.


Coverage Updates

February 6, 2023: MLN MM13070: ICD-10 & Other Coding Revisions to National Coverage Determinations: July 2023 Update NCDs with changes effective July 1, 2023 includes: NCD 20.4 – Implantable Cardiac Defibrillators (ICDs), NCD 20.7 – Percutaneous Transluminal Angioplasty (PTA), NCD 20.20 External Counterpulsation Therapy, NCD 150.3 – Bone Density Studies, NDC 150.10 – Lumbar Artificial Disc Replacement (LADR), NCD 210.1 – Prostate Cancer Screening, and NCD 220.13 – Percutaneous Image-Guided Breast Biopsy.


February 23, 2023: Transmittal 11875 (Change Request 13073): NCD 50.3 – Cochlear Implantation Manual Update The purposed of this CR is to update manuals with the revised eligibility criteria for the cochlear implantation NCD that is expanding beneficiary coverage for treatment of bilateral pre- or post-linguistic, sensorineural, moderate-to-profound hearing loss in individuals who demonstrate limited benefit from amplification.



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

February 2023 PAR Physician Part B Pro Tip: Transthoracic Echocardiography
Published on Feb 22, 2023
 | Billing 
 | Coding 

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.


February 22nd is National Heart Valve Disease (HVD) Awareness Day. One way to diagnose HVD is to perform an echocardiogram. You can read more about causes, risk factors, symptoms, and treatment of HVD  in a related article in this week’s newsletter. This article highlights one MAC’s Targeted Probe and Educate (TPE) review results for Transthoracic Echocardiography (CPT® code 93306).  


Palmetto GBA Jurisdiction J Part B TPE Review Results for Transthoracic Echocardiography July through September 2022

Palmetto GBA recently published their review results for CPT® code 93306: Echocardiography, Transthoracic, Real-Time with Image Documentation, for July through September 2022 claims. Jurisdiction J includes Alabama, Georgia, and Tennessee.


Review Results by the Numbers

  • Thirty-seven providers received additional documentation requests (ADRs) for claims for this review.
  • Palmetto GBA reviewed 1,480 claims.
  • The state specific claim denial rate was 35% in Tennessee, 46% in Alabama and 50% in Georgia.
  • Overall, 45% of the claims were denied.
  • The total dollar denied amount was $101,664.11.
  • Twenty-five providers were found to be “non-compliant” and will progress to a second TPE review of records.


    National Volume and Payment for CPT® 93306 July – September 2022 Claims

    In Palmetto GBA’s article Medicare Coverage of Echocardiography, they “identified CPT 93306 as an area of vulnerability” and noted “this code is a major risk.” As this is a TPE review target, is seems Palmetto GBA continues to identify CPT® 93306 as “an area of vulnerability” and “major risk.”


    Since the RTMD database now covers all 50 states and D.C. and inpatient discharges, outpatient hospital services and CMS 1500 Professional Services, I wanted to quantify this “major risk” at the national level.


    RTMD July-September 2022 Part B Professional Claims by Site of Service

    • Non-Hospital: 710,467 claims volume and $107,785,891 payment
    • 21-Inpatient Hospital: 569,770 claims volume and $30,110,417 payment
    • 22-Outpatient Hospital: 556,523 claims volume and $29,110,491 payment
    • 19-Off Campus-Outpatient Hospital: claims 85,517 volume and $4,624,688 payment
    • 23-Emergency Room Hospital: 12,983 claims volume and $674,203 payment


    The Total Volume was 1,935,260 and the Total Payment was $172,305,690. For this three-month time, a 45% claims denial rate equates to 870,867 non-paid claims with a loss in revenue of just over $77.5 million.


    Reasons for Claim Denial

  • 26% of the denials were due to Palmetto GBA not receiving the documentation requested or the documentation was incomplete, and they were unable to make a reasonable and necessary determination.
  • 24% of denials were due to the documentation that was submitted not supporting medical necessity of the services billed based on Palmetto GBA’s applicable Local Coverage Determination (LCD L37379).
  • 19% of the denials were due to documentation containing an incorrect, incomplete, or illegible patient identification or date of service.
  • 18% of the denials were due to a claim billed in error by the Provider.
  • Finally, 11% of the denials were due to documentation not being signed by the rendering Provider.


    Specific to documentation not supporting medical necessity, Palmetto GBA noted in the article mentioned above, that “Echocardiography performed for screening purposes is not covered. Screening includes testing performed on patients who present with risk factors (including the risk factor such as having a positive family history, e.g., familial history of Marfan’s disease). Screening service for high-risk patients is considered good medical practice but is not covered by Medicare. When a screening test is performed, use the appropriate screening ICD-10 code to indicate the test is being done for screening purposes. When the result of the test is abnormal, subsequent diagnostic services may be billed with the test-result diagnosis; however, the initial screening test must be listed as screening, even though the result of the screening test may be a covered condition. Symptoms or an existing condition must be present in the medical record to meet medical necessity.”


    Moving Forward

    For Providers in Palmetto GBA’s Jurisdiction J or M, Take the time to read LCD L37379 and related Local Coverage Article (LCA) A56625 to identify covered indications and diagnoses for this procedure. Palmetto GBA has also made available an on-demand webinar Medicare Coverage of Echocardiography CPT® Code 93306, noting it should be of interest to the Part B Providers staff, managers, supervisors, medical record departments or third parties that respond on behalf to medical records requests from Palmetto GBA or any other CMS review contractor.


    For Providers in other MAC jurisdictions, search the Medicare Coverage Database to identify any applicable LCDs or LCA in place for CPT® 93306.



  • Palmetto GBA February 2, 2023 TPE Review Results for Transthoracic Echocardiography:
  • Palmetto GBA Article Medicare Coverage of Echocardiography:,flow%2C%20valves%2C%20and%20chambers
  • Palmetto GBA Medicare Coverage of Echocardiography OnDemand Webinar:

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

New / Revised ICD-10-CM Codes: Substance Use of Unspecified Severity in Remission
Published on Feb 15, 2023
 | Coding 

Did You Know?

There are new ICD-10-CM codes for substance abuse or dependence as of October 1, 2022.  Assign the following substances to “in remission” when the previous severity of use is unknown (whether there was abuse or dependence), classifying the substance as unspecified.


Why It Matters?

Prior to October 1, 2022, identifying “in remission” was not possible for these substances.  Now, “in remission” can be reported, which will capture more specific information that can be used for data outcomes.

New Code



Alcohol use, unspecified, in remission


Opioid use, unspecified, in remission


Cannabis use, unspecified, in remission


Sedative, hypnotic, or anxiolytic use, unspecified, in remission


Cocaine use, unspecified, in remission


Other stimulant use, unspecified, in remission


Hallucinogen use, unspecified, in remission


Inhalant use, unspecified, in remission


Other psychoactive substance use, unspecified, in remission


There is also a new code for alcohol use when the pattern is unknown, but the alcohol usage is not complicated and is not associated with an alcohol-induced disorder, such as alcohol-induced mood disorder.


New Code



Alcohol use, unspecified, uncomplicated


What Can I Do?

Stay abreast of all new ICD-10-CM codes and new Coding Clinic references.


Coding Clinic for ICD-10-CM/PCS, Fourth Quarter 2022, Page 16

Susie James

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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