Knowledge Base Category -

The phrase “waste not, want not” means to use one’s resources wisely in order to always have plenty and avoid poverty. Although Medicare pays for drug wastage in certain circumstances, they also expect healthcare providers and suppliers to “use drugs or biologicals most efficiently, in a clinically appropriate manner.” But when waste cannot be avoided, starting next year, CMS is requiring reporting that will allow them to identify and monitor billing and payment for discarded drugs under Medicare Part B.

As promised, CMS has released a list of frequently asked questions concerning the use of the JW modifier. The JW modifier indicates that a portion of a drug or biological was discarded or wasted. Currently the use of the JW modifier is at the discretion of the jurisdictional Medicare Administrative Contractors (MACs). For example, Cahaba GBA, MAC for Jurisdiction JJ (Alabama, Georgia, and Tennessee) does not require the reporting of the JW modifier for wasted drugs/biological. In order to be more consistent and better able to track drug wastage, CMS is requiring the use of the JW modifier nationally effective January 1, 2017, in order for providers/suppliers to seek payment for drug/biological wastage.

The JW modifier is to be used on Part B drug claims for discarded drugs and biologicals (hereafter referred to as drugs) when they are in single-use vials or packaging. If uncertain, the information as to whether a drug or biological is single use can be found in the manufacturer’s packaging insert. The discarded drug amount is the amount of a single use vial or other single use package that remains after administering a dose/quantity of the drug to a Medicare patient. Multiple use vials/packaging are not eligible for Medicare payment for discarded amounts.

The JW modifier will mainly be used for reporting drug wastage in physician offices and hospital outpatient departments (including Critical Access Hospitals (CAHs)). Some suppliers such as pharmacies may need to report the JW modifier, but it is unlikely they will have much, if any, drug wastage. Hospital Part B inpatient claims on a 12X type of bill would also report the JW modifier for separately payable drugs. Eligible and participating 340B providers are not exempt from use of the JW modifier.

One of the main things to remember about the use of the JW modifier is that it only applies to drugs that are separately payable, for example drugs with an OPPS status indicator of G (pass-through drugs) and K (separately payable non-pass-through drugs). In the outpatient hospital setting, this applies to separately payable drugs billed for surgical patients, patients in the emergency room, patients in outpatient clinics, and other outpatients receiving separately payable drugs.

This means that drugs that are not separately paid by Medicare do not require the use of the JW modifier. For example:

• Drugs provided in rural health clinics (RHCs) and federally qualified health centers (FQHCs) since these are not separately paid,
• Drugs provided during hospital inpatient admissions (Part A) that are paid under the Inpatient Prospective Payment System (IPPS),
• Drugs given to an outpatient but combined to an inpatient Part A claim under the 3 day payment window rule,
• Packaged drugs, such as drugs with an OPPS status indicator of “N” or an SI of “K” that are bundled with comprehensive APCs (see OPPS Addendum D1 for explanation of services packaged with comprehensive APCs)
• Overfill wastage (CMS has made it clear in the past that overfill, which is any amount of drug greater than the amount identified on the package, is not billable.)

CMS also exempts drugs paid under the Part B drug Competitive Acquisition Program (CAP) although at this time the CAP remains on hold so there is no current list of CAP medications.)

One of the questions not clearly addressed by the FAQs is whether providers and suppliers are required to report drug wastage or can they elect to absorb the cost of discarded drugs. The guidance states that the JW modifier is used in order to obtain payment for the discarded amount of a drug or biological and is not needed if no discarded drug is being billed to the payer. So IF you are going to bill and expect payment for drug wastage, you must use the JW modifier January 1, 2017 and after.

In using the JW modifier on and after January 2017, providers must report the amount of the discarded drug on a separate claim line with the JW modifier. The unit field should reflect the quantity of drug discarded. If the provider is unable to quantify the amount of drug wasted, the JW modifier is not required. Do not report one claim line with combined units for amount of drug administered and wasted. Also realize if the amount of drug administered or the amount of drug wasted is less than the amount described by one HCPCS billing unit, then it is not necessary to use the JW modifier.

Prior to January 1, 2017, providers must follow the directions of their MACs or they may voluntarily report the JW modifier. Providers should check their MACs websites for any specific direction concerning the reporting of the JW modifier prior to the mandatory January 1, 2017 requirement. For example, here is some guidance from a few MACs and you can see that current instructions differ from MAC to MAC – that is why it is important to determine your MAC’s guidance for use of the JW modifier in 2016.

Cahaba GBA - Cahaba DOES NOT require the use of the JW modifier at this time. If providers wish to designate that a portion of a single dose vial is being discarded, please continue to bill the injection on ONE line and add the JW modifier to the procedure code and document the discarded amount in the patents records. Bill for the complete vial, even though part of the vial is being discarded. DO NOT split the billing to two claim lines: one with the JW and one without.

First Coast - For billing purposes, First Coast does not require the use of modifier JW prior to January 1, 2017. Drug wastage is billed by combining on a single line the wastage and administered dosage amount.

NGS - National Government Services does NOT require the use of the JW modifier at this time but providers may choose to use it. Claims will process appropriately with or without the JW modifier. If the JW modifier is used; it should be appended to a separate line for the HCPCS code (separate from the amount administered) indicating the amount (in units) discarded.

One thing CMS and all the MACs agree on is that wastage of the drug must be documented in the patient’s medical record to support the billing of discarded drugs. Here is CMS’s answer to the FAQ concerning documentation of drug wastage:

“CMS expects that providers and suppliers will maintain accurate (medical and/or dispensing) records for all beneficiaries as well as accurate purchasing and inventory records for all drugs that were purchased and billed to Medicare. General guidance on documentation is available in MLN Matters SE 1316. Providers and suppliers should also check with the MAC that processes their Part B drug claims in case additional information on billing and documentation is available at the local level.”

For complete details concerning the JW modifier, see the following CMS guidance:

• MLN Matters Article MM9603,
• Section 40 of Chapter 17 of the Medicare Claims Processing Manual,
• CMS’s FAQ document
• Any information on the JW modifier on your local MAC’s website

Providers should use drugs wisely and efficiently, but if wastage cannot be avoided and the provider wants to be paid for it, then understanding the proper use, reporting and documentation for the JW modifier is critical.

“The only way to make sense out of change is to plunge into it, move with it, and join the dance.”- Alan Watts

This week we conclude our in-depth analysis of the 2017 IPPS Final Rule by taking a plunge into finalized changes to Medicare Severity Diagnosis-Related Group (MS-DRG) Classifications broken down by Major Diagnostic Categories (MDCs).

 

Pre-Major Diagnostic Category (Pre MDC)

Total Artificial Heart Replacement

The proposal to assign ICD-10-PCS procedure codes 02RK0JZ and 02RL0JZ as a code cluster to ICD–10 Version 34 MS–DRGs 001 and 002 (Heart Transplant or Implant of Heart Assist System with and without MCC, respectively) to accurately replicate the Version 32 ICD–9–CM based MS–DRG logic of procedure code 37.52 was finalized.

MDC1: Diseases and Disorders of the Nervous System

Mechanical Complication Codes

In the proposed rule CMS agreed with a requestor that ICD-10-CM diagnosis codes T85.610A, T85.620A, T85.630A, and T85.690A describe conditions occurring within the nervous system. These ICD-10 diagnosis codes describe concepts not previously captured by the ICD-9-CM. As a result, CMS finalized the reassignment of these four ICD–10–CM diagnosis codes from MDC 21 under MS–DRGs 919, 920, and 921 to MDC 1 under MS–DRGs 091, 092, and 093. The official code titles were revised after publication of the Proposed Rule. The new ICD-10 code titles are as follow:

 

 

MDC 4: Diseases and Disorders of the Ear, Nose, Mouth and Throat

Reassignment of Diagnosis Code R22.2

The proposal to reassign ICD–10–CM diagnosis code R22.2 (Localized Swelling, Mass and Lump, Trunk) from MDC 4 to MDC 9 under MS–DRGs 606 and 607 (Minor Skin Disorders with and without MCC, respectively) was finalized.

 

MDC 5: Diseases and Disorders of the Circulatory System

Implant of Loop Recorder

The proposal to re-designate the following four ICD–10–PCS codes from non-O.R. to O.R. procedures within Appendix E of the Version 34 ICD–10 MS–DRG Definitions Manual was finalized.

• 0JH602Z (Insertion of monitoring device into chest subcutaneous tissue and fascia, open approach);
• 0JH632Z (Insertion of monitoring device into chest subcutaneous tissue and fascia, percutaneous approach);
• 0JWT02Z (Revision of monitoring device in trunk subcutaneous tissue and fascia, open approach); and
• 0JWT32Z (Revision of monitoring device in trunk subcutaneous tissue and fascia, percutaneous approach).

Endovascular Thrombectomy of the Lower Limbs

CMS agreed with a commenter that procedures describing endovascular thrombectomy of the lower limbs should be assigned to ICD–10 MS–DRGs 270, 271, and 272. CMS finalized their proposal to restructure the ICD–10–PCS MS–DRG configuration and add 20 of the proposed ICD–10–PCS code translations (which would capture procedures describing endovascular thrombectomy of the lower limbs) to ICD–10–PCS Version 34 (The code table can be found on page 56804 of the final rule.)

Pacemaker Procedure Codes Combinations

The proposal to modify the ICD-10 MS-DRG logic to capture a wider range of possible reported procedure codes describing procedures involving both a pacemaker device and leads was finalized.

Transcatheter Mitral Valve Repair with Implant

Proposals finalized:

• Collapse MS-DRGs 228, 229, and 230 from three severity levels by deleting MS-DRG 230 and revising MS-DRG 229,
• ICD-9-CM procedure code 35.97 and the cases reporting ICD-10-PCS procedure code 02UG3JZ (Supplement mitral valve with synthetic substitute, percutaneous approach) will be reassigned from MS–DRGs 273 and 274 to MS–DRG 228 and revised MS–DRG 229,
• The title of revised MS-DRG 229 is now “Other Cardiothoracic Procedures without MCC”; and
• The title for MS–DRG 228 will remain “Other Cardiothoracic Procedures with MCC.”

 

MDC 6: Diseases and Disorders of the Digestive System

Excision of Ileum

CMS received a request to analyze an MS-DRG replication issue. Under ICD–9, procedure code 45.62 (Other partial resection of small intestine) was assigned to MS–DRGs 329, 330 and 331 (Major Small and Large Bowel Procedures with MCC, with CC, and without CC/MCC, respectively).

Under the current ICD–10 MS–DRGs Version 33, ICD–10–PCS procedure code 0DBB0ZZ (Excision of ileum, open approach) is assigned to MS–DRGs 347, 348, and 349 (Anal and Stomal Procedures with MCC, with CC, and without CC/MCC, respectively). The requestor indicated that, despite the variation in terms for ‘‘excision’’ and ‘‘resection’’ between the two code sets, the surgical procedure to remove a portion of the small intestine, whether it is the ileum, duodenum, or jejunum, has not changed and should not result in different MS–DRG assignments when translated from ICD–9–CM to ICD–10. CMS agreed that this is a replication error.

Additionally, CMS reviewed the MS–DRG assignments for ICD–10–PCS code 0DBA0ZZ (Excision of jejunum, open approach) and determined the MS–DRG assignment for this code resulted in the same replication error.

As a result of analysis, CMS proposed and finalized the reassignment of ICD–10–PCS codes 0DBB0ZZ and 0DBA0ZZ from MS–DRGs 347, 348, and 349 (Anal and Stomal Procedures with MCC, with CC, and without CC/MCC, respectively) to MS–DRGs 329, 330, and 331 (Major Small and Large Bowel Procedures with MCC, with CC, and without CC/MCC, respectively), effective with the ICD–10 MS–DRGs Version 34 on October 1, 2016.

 

MDC 7: Diseases and Disorders of the Hepatobiliary System and Pancreas

Bypass Procedures of the Veins

A requestor noted that currently, ICD–10–PCS procedure code 06183DY (Bypass portal vein to lower vein with intraluminal device, percutaneous approach) is assigned to only MDC 5 (Diseases and Disorders of the Circulatory System) and MS–DRGs 270, 271, and 272 (Other Major Cardiovascular Procedures with MCC, with CC, and without CC/MCC, respectively) under ICD–10 MS–DRGs Version 33.

The requestor stated that the code should also be assigned to MDC 7 and MS–DRGs 405, 406, and 407 to be consistent with the ICD–9–CM MS–DRGs Version 32. CMS analyzed this issue and agreed and finalized the assignment of ICD–10–PCS procedure code 06183DY to MDC 7 and MS–DRGs 405, 406, and 407 for FY 2017.

 

MDC 8: Diseases and Disorders of the Musculoskeletal System and Connective Tissue

Combination Codes for Removal and Replacement of Knee Joints

CMS examined knee joint revision combination codes that are not currently assigned to MS–DRGs 466, 467, and 468 (Revision of Hip or Knee Replacement with MCC, with CC, and without CC/MCC, respectively) in ICD–10 MS–DRGs Version 33 and identified 58 additional combinations that also should be included so that the same logic is used in the ICD–10 version of the MS–DRGs as is used in the ICD–9–CM version. CMS finalized the addition of these 58 new code combinations that capture the joint revisions to the Version 34 MS DRG structure for MS–DRGs 466, 467, and 468, effective October 1, 2016. The table of new combination codes begins on page 56821 of the Final Rule.

Decompression Laminectomy

Currently, under ICD–10–PCS, the procedure describing a decompression laminectomy is coded for the ‘‘release’’ of a specified area of the spinal cord. These decompression codes are assigned to MS–DRGs 028, 029, and 030 (Spinal Procedures with MCC, with CC or Spinal Neurostimulators, or without CC/MCC, respectively) and to MS–DRGs 518, 519, and 520 (Back and Neck

Procedures Except Spinal Fusion with MCC or Disc Device or Neurostimulator, with CC, or without CC/MCC, respectively) in the ICD–10 MS–DRGs Version 33.

A commenter brought attention to the fact that codes describing release of specific peripheral nerve are assigned to MS–DRGs 515, 516, and 517 (Other Musculoskeletal System and Connective Tissue O.R. Procedures with MCC, with CC, and without C/MCC, respectively). The commenter suggested that a subset of these codes also be assigned to MS–DRGs 028 through 030 and MS–DRGs 518 through 520 for clinical coherence purposes.

CMS agreed with the commenter’s suggestion and CMS proposed to reassign 18 ICD–10–PCS procedure codes from MS–DRGs 515 through 517 to MS–DRGs 028 through 030 and MS–DRGs 518 through 520 under the ICD–10 MS–DRGs Version 34.

This change was delayed in the Final Rule, “until the ICD-10 claims data are available, because we will have the ability to better analyze the impact of reassigning the specified codes according to their anatomic locations, as well as receive clarification regarding which specific codes should be taken under consideration for reassignment.”

Lordosis

A replication issue involving four diagnosis codes related to lordosis (excessive curvature of the lower spine) was discovered in MS-DRGs 446,457, and 458 (Spinal Fusion Except Cervical with Spinal Curvature or Malignancy or Infection or Extensive Fusions with MCC, with CC, and without CC/MCC).

These MS–DRGs contain specific logic requiring a principal diagnosis describing a spinal curvature, a malignancy, or infection or a secondary diagnosis that describes a spinal curvature disorder related to another condition.

Under the ICD–10 MS–DRGs Version 33, the following diagnosis codes were listed on the principal diagnosis list and the secondary diagnosis list for MS–DRGs 456, 457, and 458:

After consideration CMS finalized maintaining these four codes in the logic for the principal diagnosis list but to remove them from the secondary diagnosis list.

 

MDC 13: Diseases and Disorders of the Female Reproductive System

Pelvic Evisceration

Current GROUPER logic for MS–DRGs 332, 333, and 334 (Rectal Resection with MCC, with CC and without CC/MCC, respectively) under MDC 6 (Diseases and Disorders of the Digestive System) and for MS–DRGs 734 and 735 (Pelvic Evisceration, Radical Hysterectomy and Radical Vulvectomy with CC/MCC and without CC/MCC, respectively) under MDC 13 (Diseases and Disorders of the Female Reproductive System) include a ‘‘cluster’’ of ICD–10–PCS procedure codes that describe pelvic evisceration.

A ‘‘cluster’’ is the term used to describe a circumstance when a combination of ICD–10–PCS procedure codes is needed to fully satisfy the equivalent meaning of an ICD–9–CM procedure code for it to be considered a plausible code translation.

Under ICD–10–PCS, users are instructed to code separately the organs or structures that are actually removed and for which there is a distinctly defined body part. Therefore, the case of a patient who undergoes a pelvic evisceration (exenteration) that involves the removal of the sigmoid colon and rectum would have each of those procedure sites (sigmoid colon and rectum) coded and reported separately (in addition to the procedure codes displayed in the cluster). In this scenario, if the principal diagnosis is a condition from the MDC 6 diagnosis list, the case would group to MS–DRGs 332, 333, and 334, regardless of the code cluster. In other words, it would not be necessary to retain the code cluster describing procedures performed on female pelvic organs in MDC 6.

Therefore, CMS proposed and finalized removing the procedure code cluster for pelvic evisceration procedures from MDC 6 under the ICD–10 MS–DRGs Version 34. The cluster would remain in ICD–10 MDC 13 under MS–DRGs 734 and 735 only.

 

MDC 19: Mental Diseases and Disorders

CMS finalized the proposal to the title of MS-DRG 884 (Organic Disturbances and Mental Retardation) to “MS-DRG 884 (Organic Disturbances and Intellectual Disability)” to reflect the current terminology to describe the condition.

 

MDC 23: Factors Influencing Health Status and Other Contacts with Health Services

Logic of MS-DRGs 945 and 946 (Rehabilitation with CC/MCC and without CC/MCC, respectively)

CMS received several requests to examine the Grouper logic for MS-DRGs 945 and 946. The requestors were concerned that ICD–9–CM codes that clearly identified an encounter for rehabilitation services such as procedure codes V57.89 (Care involving other specified rehabilitation procedure) and V57.9 (Care involving unspecified rehabilitation procedure) were not included in ICD–10–CM Version 33. In addition, the requestors pointed out that ICD–10–CM has significantly changed the guidelines for coding of admissions/encounters for rehabilitation.

In a Final Rule response CMS indicates that they “agree with the commenters that the issue of any updates to ICD–10–PCS guidelines should be considered along with any proposed MS–DRG updates because updated guidelines may impact code reporting. We welcome any suggestions on how to update the ICD–10–PCS guidelines. These suggestions should be sent to ICDProcedureCodeRequest@cms.hhs.gov. We plan to take any proposed ICD–10–PCS rehabilitation guideline updates to a future meeting of the ICD–10 Coordination and Maintenance Committee so that the public can provide input on any new rehabilitation guideline.”

 

As mentioned at the start, this article highlights MDC specific MS-DRG changes. This is a small dive into the coding changes found in the Final Rule. MMP, Inc. encourages you to review the Final Rule and to be on the lookout for our Annual Fall Inpatient Webinar focused on Coding Changes in October. 

“I’m late! I’m late! For a very important date!”- The White Rabbit in the 1951 Disney Classic Alice in Wonderland

Much like the White Rabbit, CMS was a day late in the release of the Fiscal Year (FY) 2017 Inpatient Prospective Payment System (IPPS) Final Rule. Late or not, CMS noted in a related Fact Sheet that this rule finalizes policies that continue their commitment to increasingly shift Medicare payments from volume to value. This article focuses on final revisions made to the general acute care hospital Quality Programs.

HOSPITAL INPATIENT QUALITY REPORTING (IQR) PROGRAM

The Hospital IQR Program is a pay-for-reporting program established by the Medicare Prescription Drug, Improvement, and Modernization Act. General acute care hospitals successfully participating in this program and are also meaningful electronic health record (EHR) users will receive approximately 0.95 percent increase in their operating payment rates. The Final Rule finalized changes to this program for FY 2018 and FY 2019 payment determinations.

FY 2018 Program Year: Two Claims Based Measure Refinements

PN Payment: Hospital-Level, Risk-Standardized 30-Day Episode-of-Care Payment Measure for Pneumonia (NQF #2579)

This measure cohort will be expanded to include hospitalizations for patients with

• Principal discharge diagnosis of pneumonia, including not only viral or bacterial pneumonia, but also aspiration pneumonia; and
• Principal discharge diagnosis of sepsis (but not severe sepsis) with a secondary diagnosis of pneumonia (including viral or bacterial pneumonia and aspiration pneumonia) coded as present on admission (POA).

PSI 90: Patient Safety and Adverse Events Composite Measure (NQF #0531): The modified PSI 90 composite was adopted for the IQR Program. See table 3 for further detail.

FY 2019 Program Year: 15 Measures Removed & Four New Measures Added

CMS finalized the proposal to remove 15 measures for the FY 2019 payment determination and subsequent years (see Table 1).

Table 1: Measures Finalized for Removal for the FY 2019 Payment Determination and Subsequent Years

‍Four New Measures to be added to the Hospital IQR Program for the FY 2019 Payment Determination and Subsequent Years.

Table 2: New Measures Finalized for FY 2019 Payment Determination and Subsequent Years

CMS notes that the new “measures capture Medicare payment for services related to the episode procedure and take into account beneficiaries’ clinical complexity as well as geographic payment differences. We proposed these clinical episode-based measures to supplement the Hospital IQR Program’s Medicare Spending per Beneficiary (MSPB) Measure….the measures also support our mission to provide better healthcare for individuals, better health for populations, and lower costs for healthcare.”

In response to stakeholder concerns that these measures overlap with the Medicare Spending Per Beneficiary (MSPB) Measure, CMS notes “that unlike the overall MSPB measure, the clinical episode-based payment measures assess payment variation at the procedure level and only include services that are clinically related to the named episode procedure (for example, the spinal fusion measure includes inpatient admissions for “medical back problems” that occur following the initial spinal fusion procedure since the admission is likely a result of complications from the initial procedure).”

HOSPITAL VALUE BASED PURCHASING (VBP) PROGRAM

The Act instructs the Secretary to reduce the base operating DRG payment amount for a hospital for each discharge in a fiscal year by an applicable percent to fund this budget neutral program. CMS indicates in Table 16A of the Final Rule that the estimated amount available for value-based incentive payments to hospitals for FY 2017 is approximately $1.8 billion. Actual amounts will be displayed in Table 16B that is expected to be posted in October of this year.

FY 2019 Program Year: New Domain Name and Expansion of location for CAUTI and CLABSI

The Patient-and-Caregiver-Centered Experience of Care/Care Coordination Domain will become simply the Person and Community Engagement Domain.

The NHSN (National Health Safety Network) CAUTI (Catheter-Associated Urinary Tract Infection) and CLABSI (Central Line-Associated Blood Stream Infections) outcome measures will include select ward (non-ICU) locations. “This expansion of the CAUTI and CLABSI measures aligns with the Hospital IQR Program. It also aligns with the HAC Reduction Program, which adopted the expansion of the CAUTI and CLABSI measures beginning with its FY 2018 program year (80 FR 49576 through 49578).”

FY 2021 Program Year: Two New Condition-Specific Payment Measures and Expansion of a 30-Day Mortality Measure Cohort

Two New Measures

Hospital-Level, Risk-Standardized Payment Associated with a 30-Day Episode-of-Care for Acute Myocardial Infarction (AMI) (NQF #2431), and

Hospital-Level, Risk-Standardized Payment Associated with a 30-Day Episode-of-Care for Heart Failure (HF) (NQF #2436).

Expansion of 30-Day-PN Mortality Cohort

Also for the FY 2021 Program Year, CMS finalized expansion of the cohort used for the 30-Day-PN Mortality measure to include patients with a principal discharge diagnosis of pneumonia, patients with a principal diagnosis of aspiration pneumonia and patients with a principal diagnosis of sepsis with a secondary diagnosis of pneumonia coded as present on admission (POA).

FY 2022 Program Year: CMS finalized the addition of Hospital 30-Day, All-Cause, Risk-Standardized Mortality Rate (RSMR) Following CABG Surgery (NQF #2554) (MORT-30-CABG) measure.

HOSPITAL ACQUIRED CONDITIONS (HAC) REDUCTION PROGRAM

This program creates an incentive for reducing the incidence of HACs by adjusting payments to hospitals in the worst performing quartile for HACs. CMS finalized the following five changes to the existing HAC Reduction Program policies:

• Clarified data requirements for Domain 1 (PSI-90),
• Established National Health Safety Network (NHSN) Centers for Disease Control and Prevention (CDC) Healthcare Associated Infection (HAI) data submission requirements for newly opened hospitals,
• Established performance periods for the FY 2018 and 2019 HAC Reduction Program,
• Adopted the refined Patient Safety Indicator (PSI) 90: Patient Safety for Selected Indicators Composite Measure (NQF #0531) beginning with the FY 2018 payment determination.
• Changed the Program scoring methodology from the current decile-based scoring to a continuous scoring methodology.

FY 2018 Program Year: Finalized Refinements to PSI 90

• First, the name of the PSI 90 measure will change to “Patient Safety and Adverse Events Composite: (NQF #0531).
• Second, the modified PSI 90 measure will include three new indicators (PSI-09, PSI-10 and PSI-11),
• Third, two Indicators will be re-specified in the modified PSI 90.
• PSI-12 Perioperative Pulmonary Embolism (PE) or Deep Vein Thrombosis (DVT) Rate no longer includes ECMO procedures in the denominator or isolated deep vein thrombosis (DVT) of the calf veins in the numerator.
• PSI 15 Accidental Puncture and Laceration Rate is now limited to discharges with an abdominal/pelvic operation, rather than including all medical and surgical discharges.
• Fourth, PSI-07 Central venous catheter-related blood stream infections rate will be removed in the modified PSI 90.
• Fifth, weighting of component indicators will be based not only on volume of each patient safety and adverse events, but also the harms associated with the events.

PSI 90: To Expand from 8 to 10 Indicators for FY 2018 Program

Table 3: PSI 90: Patient Safety and Adverse Events Composite (NQF #0531) for FY 2018

‍HOSPITAL READMISSIONS REDUCTION PROGRAM (HRRP)

This program requires a reduction to a hospital’s based operating DRG payment to account for excess readmissions associated with the applicable conditions. For FY 2017 and subsequent years, a hospital’s potential reduction will be based on a risk-adjusted readmission rate during a three-year period for the following six conditions:

• Acute Myocardial Infarction (AMI),
• Heart Failure (HF),
• Pneumonia (PN),
• Chronic Obstructive Pulmonary Disease (COPD),
• Total Hip Arthroplasty/Total Knee Arthroplasty (THA/TKA), and
• New Condition for FY 2017 (pursuant to prior rulemaking): All-Cause, Unplanned Readmission Following Coronary Artery Bypass Graft (CABG) Surgery (inclusion of this condition was finalized in the FY 2015 IPPS/LTCH Final Rule).

CMS is updating the public reporting policy so that excess readmission rates will be posted to the Hospital Compare website as soon as feasible following the hospitals’ preview period.

More Than Half a Billion Dollars in Readmission Penalties for FY 2017

Set to begin October 1, 2016, Jordan Rau of Kaiser Health News (KHN)reports that readmission penalties are set to reach a new high of more than half a billion dollars in payments being withheld in the coming fiscal year. To see if and how much your hospital will be penalized you can get the data in KHN’s Article Medicare's Readmission Penalties Hit New High.

Resources

CMS Fact Sheet Announcing release of 2017 IPPS Final Rule: https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2016-Fact-sheets-items/2016-08-02.html

2017 IPPS Final Rule (Display copy): https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/FY2017-IPPS-Final-Rule-Home-Page-Items/FY2017-IPPS-Final-Rule-Regulations.html?DLPage=1&DLEntries=10&DLSort=0&DLSortDir=ascending

A medical claim is a form of communication with a healthcare payer that request payment and describes the services provided to a patient, plus other pertinent information. Medicare and other payers have detailed specifications about the types of information that must be included on a claim. Modifiers are often used on claims to explain the special circumstances of a particular item or service. In honor of National Occupational Therapy (OT) month, we examine some modifiers that are often required for rehabilitative services.

The American Occupational Therapy Association website states that occupational therapists and assistants are part of a vitally important profession that helps people across the lifespan participate in the things they want and need to do through the therapeutic use of everyday activities. In addition to clinical responsibilities, including complete and thorough documentation of their medical services, OTs and other rehabilitative therapists such as physical therapists (PT) and speech language pathologists (SLP) are required to understand some aspects of Medicare therapy billing. For example, therapists need to understand the proper use of some billing modifiers.

Therapy Discipline Modifiers

Services for Medicare patients provided by rehabilitative therapists must be appended with a modifier that describes the therapy discipline. Modifiers are used to identify therapy services whether or not financial limitations (therapy caps) are in effect. When limitations are in effect, Medicare tracks the financial limitation based on the presence of therapy modifiers. The therapy modifiers are:

• GN – Services delivered under an outpatient speech-language pathology plan of care;
• GO - Services delivered under an outpatient occupational therapy plan of care; or,
• GP - Services delivered under an outpatient physical therapy plan of care.

Modifiers GN, GO, and GP refer only to services provided under plans of care for rehabilitative therapy services. They should never be used with codes that are not on the list of applicable therapy services. For institutional claims, the modifiers must correlate with the respective revenue code (PT – modifier GP with revenue code 42x; OT – modifier GO with revenue code 43x; and SLP – modifier GN with revenue code 44x).

Modifier 59

Modifier 59 is appended to a CPT/HCPCS procedure code to indicate that a procedure or service was distinct or independent from other services performed on the same day. It is used to identify procedures/services that are not normally reported together, but are appropriate under the circumstances.

For PT, OT and SLP services, providers should not report more than one physical medicine and rehabilitation therapy service for the same fifteen minute time period with the exception of “supervised modality” codes. Some National Correct Coding Initiative (NCCI) procedure-to-procedure edits pair a “timed” therapy CPT code with another “timed” CPT code or a non-timed CPT code as services that would not normally be reported together. These edits may be bypassed with modifier 59 if the two procedures of a code pair edit are performed in different timed intervals even if sequential during the same patient encounter. When modifier 59 is used, documentation in the therapy record must support that the services were performed at separate and distinct time periods.

Modifier KX

Medicare sets financial limitations on the amount of therapy services a beneficiary may receive in a calendar year. For 2016 the therapy cap amounts are $1,960 for physical therapy (PT) and speech-language pathology (SLP) services combined and $1,960 for occupational therapy (OT) services. Medicare allows an exception when the patient’s condition requires continued skilled therapy beyond the amount payable under the therapy cap, to achieve their prior functional status or maximum expected functional status within a reasonable amount of time. Documentation in the therapy record must justify a medically necessary need for additional therapy beyond the therapy cap.

When exceptions are in effect and the beneficiary qualifies for a therapy cap exception, the provider must add a KX modifier to the therapy HCPCS code subject to the cap limits. By appending the KX modifier, the provider is attesting that the services billed:

• Are reasonable and necessary services that require the skills of a therapist; and
• Are justified by appropriate documentation in the medical record,; and
• Qualify for an exception using the automatic process exception.

When the cap is exceeded by at least one line on the claim, use the KX modifier on all of the lines on that institutional claim that refer to the same therapy cap (PT/SLP or OT), regardless of whether the other services exceed the cap. For example, if one PT service line exceeds the cap, use the KX modifier on all the PT and SLP service lines (also identified with the GP or GN modifier) for that claim. When the PT/SLP cap is exceeded by PT services, the SLP lines on the claim may meet the requirements for an exception due to the complexity of two episodes of service. In addition to the KX modifier, the GN, GP and GO modifiers shall continue to be reported.

Be sure that services are medically necessary and that documentation is sufficiently detailed to support the use of the modifier. Medicare is aware of the potential for misuse of the KX modifier. Note that:

• Routine use of the KX modifier for all patients with certain conditions will likely show up on data analysis as aberrant and invite inquiry.
• Use of the KX modifier when there is no indication that the cap is likely to be exceeded is abusive.
• If the use of the KX modifier is determined to be inaccurate, the provider/supplier is subject to sanctions resulting from providing inaccurate information on a claim.

For more information on the use of the KX modifier, see the Medicare Claims Processing Manual, Chapter 5 , Section 10.3.

Functional Limitation Modifiers

In 2013, Medicare began requiring the reporting of rehabilitative therapy functional limitation information on claims. Claims for outpatient therapy services are required to include non-payable G-codes and modifiers, which describe a beneficiary’s functional limitation and severity level, at specified intervals during the therapy episode of care. The severity modifier reflects the beneficiary’s percentage of functional impairment as determined by the clinician furnishing the therapy services for each functional status: current, goal, or discharge.

Therapists must document in the medical record how they made the modifier selection so that the same process can be followed at succeeding assessment intervals. For more information on functional limitation codes and modifiers, see the Medicare Benefit Policy Manual, Chapter 15, Section 220.4.

When communicating with Medicare and other payers, providers must know the specifics of the service and claim requirements. Proper use of modifiers to provide additional information about the services rendered is necessary for clear communication.

If you have ever audited electronic healthcare medical records, you have likely seen patients that are the same one day as another – exactly the same – no, I mean EXACTLY the same - the exact same wording of the patient’s condition, patient statements, treatment plan and/or other documentation elements. This is the result of “copy and paste” within an electronic medical record.

There are benefits and risks associated with the use of “copy and paste” within EHRs as described by the Partnership for Health IT Patient Safety. Benefits include time savings and a more efficient way to capture complex information which may result in improved tracking of multiple problems and improved continuity of care. It can also reduce transcription errors and omissions of important information. However, the outdated, inaccurate, irrelevant, and misleading information that can result from “copy and paste” erodes confidence in the record, may have medico-legal implications, and can result in more queries and work to determine if the information is correct. Charts and notes can become overwhelmingly long and effective communication is compromised because important findings and problems are intertwined with normal patient information, making it difficult to decipher what is important or current.

In response to safety concerns, the Partnership for Health IT Patient Safety developed a Toolkit for the Safe Use of Copy and Paste. Although the focus of the toolkit is patient safety, other concerns associated with “copy and paste” include billing and compliance issues and potential malpractice implications.

The recommendations provided in the toolkit and listed below are not intended to impair usability of EHR systems or impede workflow. Their goal is to allow providers the opportunity to evaluate the best ways to see the information that is being reused and to take steps toward the safe use of “copy and paste.”

Recommendation A: Provide a mechanism to make copy and paste material easily identifiable.

• Allows verification of accuracy and facilitates review for edits
• Potential Actions: Create policies and procedures; block certain areas of documentation from copying; have a different appearance for copied material (italics, different color, etc.)

Recommendation B: Ensure that the provenance of copy and paste material is readily available.

• Helps verify that the information is appropriate and accurate and increases the potential to defend the record and achieve billing compliance
• Potential Actions: Identify original source of information and track changes and authors

Recommendation C: Ensure adequate staff training and education regarding the appropriate and safe use of copy and paste.

• Helps providers understand their liability and the potential patient safety and compliance risks of copy and paste
• Potential Actions: Provide regular training and feedback; identify methods to verify current and correct information

Recommendation D: Ensure that copy and paste practices are regularly monitored, measured, and assessed.

• Ensures the integrity of the clinical record, the quality and safety of care rendered, and compliance with state and federal regulations
• Potential Actions: Create auditing policy; perform regular audits and report findings and provide feedback

I personally think this toolkit offers excellent recommendations for the safe use of a “copy and paste” function. As explained in the Toolkit, some of the recommendations will take time to implement, particularly those that require technology changes by developers and workflow changes for providers. However, there are some steps that hospitals could implement now to improve the use “copy and paste.” A realization of the associated risks of “copy and paste” is one first step.

A common mnemonic device to aid memory is to come up with a short sentence or phrase using the first letters of what you are trying to remember. Since it is spring and we are planning our vegetable garden, for PGATO I came up with “please gather all the okra.” If you have never grown okra, you may not realize the gathering demands of okra in the miserably hot, sultry days of late summer. The reward however is the delicious, Southern dish of fried okra. For Medicare services, rewards are two-fold – one is helping patients to recover or improve and two is the Medicare reimbursement you receive if you have followed all of Medicare’s requirements for billing, coding, and documentation. Like okra plants can be prickly, so can Medicare requirements.

PGATO is my memory tool for remembering all of the components for proper documentation to support billing of psychotherapy - plan, goals, activity, time, and outcomes. CPT codes 90832-90838 represent insight oriented, behavior modifying, supportive, and/or interactive psychotherapy. Reviews by the Comprehensive Error Rate Testing (CERT) contractors have identified issues with missing documentation.

Plan and Goals

A recent CERT review (see Cahaba Article Psychotherapy Codes) has identified errors in outpatient psychotherapy CPT codes 90832 and 90834, Type of Bill 13X. The primary issue identified on review was the absence of a signed, individualized plan of care for the services billed.

The individualized treatment plan must state the type, amount, frequency and duration of the services to be furnished and indicate the diagnoses and anticipated goals. Treatment goals should be measurable and objective. Documentation should include specific therapeutic interventions planned and an estimated duration of treatment.

Services must reasonably be expected to improve the patient’s condition. The treatment must be designed to reduce or control the patient’s psychiatric symptoms so as to prevent relapse or hospitalization, and improve or maintain the patient’s level of functioning. Psychotherapy services are not covered for severe and profound intellectual disabilities. Also, psychotherapy services are not covered for dementia patients when documentation indicates that dementia has produced a severe enough cognitive defect to prevent psychotherapy from being effective. When a patient has dementia, the capacity to meaningfully benefit from psychotherapy must be documented in the medical record.

Activity and Time

Another CERT review as described in MLN Matters Article SE1407 identified the main error as not clearly documenting the amount of time spent only on psychotherapy services.

The medical record must indicate the time spent in the psychotherapy encounter and the therapeutic maneuvers, such as behavior modification, supportive or interpretive interactions that were applied to produce a therapeutic change. Behavior modification is not a separate service, but is an adjunctive measure in psychotherapy.

A variety of techniques are recognized for coverage under the psychotherapy codes; however, the services must be performed by persons authorized by their state to render psychotherapy services (such as physicians, clinical psychologists, registered nurses with special training, and clinical social workers). Medicare coverage of procedure codes 90832-90838 does not include teaching grooming skills, monitoring activities of daily living, recreational therapy (dance, art, play) or social interaction.

Psychotherapy codes 90832-90838 are timed codes and the documentation must support the time billed as a psychotherapy encounter. The time associated with these codes is for face-to-face services only with the patient (or patient and family). In general, providers should select the code that most closely matches the actual time spent performing psychotherapy. CPT® provides flexibility by identifying time ranges that may be associated with each of the three codes:

• Code 90832 (or + 90833) 30 minutes: 16 to 37 minutes
• Code 90834 (or + 90836) 45 minutes: 38 to 52 minutes, or
• Code 90837 (or + 90838) 60 minutes: 53 minutes or longer

Do not bill psychotherapy codes for sessions lasting less than 16 minutes.

CPT codes 90833, 90836, and 90838 are add-on codes for psychotherapy services provided with an evaluation and management (E&M) service. Both services are payable if they are significant and separately identifiable and billed using the correct codes. Time spent for the E&M service is separate from the time spent providing psychotherapy and time spent providing psychotherapy cannot be used to meet criteria for the E&M service. Because time is indicated in the code descriptor for the psychotherapy CPT codes, it is important for providers to clearly document in the patient’s medical record the time spent providing the psychotherapy service rather than entering one time period including the E&M service.

Outcomes

A periodic summary of goals, progress toward goals and an updated treatment plan must be included in the medical record. The general expectation is that the treatment plan will be updated at least every three months.

There are no specific limits on the length of time that services may be covered, but the duration of a course of psychotherapy must be individualized for each patient. As long as the evidence shows that the patient continues to show improvement in accordance with their individualized treatment plan, and the frequency of services is within the norms of practice, coverage may be continued. However, prolonged periods of psychotherapy must be well-supported in the medical record and include a description of the necessity for ongoing treatment.

You may want to come up with your own memory tool for remembering to include all the required documentation components of psychotherapy. However you choose to remember, meeting Medicare’s prickly requirements will help guarantee appropriate payments.

Fall has definitely arrived and with it comes memories of camping trips with Girl Scouts as well as family outings. A favorite part of these trips was the campfire, roasted marshmallows and ghost stories. Let the story begin. First, imagine sitting around a campfire huddled under a blanket on a cool fall night with a new moon and stars up above. Now, let the cautionary to some but scary to others plot unfold. The years were 2000 through 2008. The Department of Justice had alleged that hospitals were overcharging Medicare “when performing kyphoplasty, a minimally-invasive procedure used to treat certain spinal fractures that often are due to osteoporosis. In many cases, the procedure can be performed safely as a less costly outpatient procedure, but the government contends that the hospitals performed the procedure on an in-patient basis in order to increase their Medicare billings.”¹

The characters of this tale included the Department of Justice, a whistleblower (Mr. Charles Bates former regional sales manager for Kyphon in Birmingham, AL), the U.S. Attorney’s Office for the Western District of New York, the Department of Health and Human Services’ Office of Inspector General and Office of Counsel to the Inspector General, Medtronic Spine LLC the corporate successor to Kyphon Inc., and twenty five hospitals that settled allegations of submitting false claims to Medicare.

After a lengthy investigation, this story ended with several hospitals returning millions of dollars back to the Medicare Trust Fund and it became clear that Kyphoplasty was an outpatient procedure.

Now, fast forward to 2015 when hospitals are continuing to perform these procedures just not with the beneficiary being a hospital inpatient. This story is specific to Alabama, Georgia and Tennessee. However, all of the Medicare Administrative Contractors (MACs) have a Kyphoplasty Local Coverage Determination (LCD) so all states need to be take heed of what is required to prove medical necessity of the procedure.

STORYLINE

January 7, 2015

This story begins January 7, 2015 with the MAC for Alabama, Georgia and Tennessee (Cahaba) posting a notification of an upcoming widespread probe review of CPT 22513 and/or CPT 22514 combined for Bill Type 13X.

• CPT 22513 (Percutaneous vertebral augmentation, including cavity creation (fracture reduction and bone biopsy included when performed) using mechanical device (e.g., kyphoplasty), one vertebral body, unilateral or bilateral cannulation, inclusive of all imaging guidance; thoracic).
• CPT 22514 (Percutaneous vertebral augmentation, including cavity creation (fracture reduction and bone biopsy included when performed) using mechanical device (e.g., kyphoplasty), one vertebral body, unilateral or bilateral cannulation, inclusive of all imaging guidance; lumbar).

July 6, 2015

The plot thickened when Cahaba posted widespread probe review results for review of CPT 22513 and/or CPT 22514 combined for Bill Type 13X on their website on July 6, 2015. The findings speak for themselves, not good.

Cahaba cited the following three key reasons for denials found in their widespread review:

1. The documentation did not justify the medical necessity of the services: According to LCD: Surgery: Vertebral Augmentation Procedures (VAPs) (then L30062 – post October 1, 2015 LCD L34300); the performance of VAPs are considered to be medically reasonable and necessary for persistent debilitating pain caused by the recent pathologic fracture of noncervical vertebrae, painful non-unions of Vertebral Compression Fractures (VCF), back pain associated with osteolytic metastatic disease or multiple myeloma involving a vertebral body, or painful hemangiomas. Conservative management should be implemented prior to performing a VAP. Documentation must indicate that conservative medical management has been tried and has failed or why the patient meets the exceptions to conservative management which may include a high level of pain, disability and neurologic compromise.
2. Lack of documentation: Claims were denied due to the lack of documentation to review for services provided on the claim. Claims either did not include physician orders, procedure reports, or progress notes to support the service was provided as submitted on the claim.
3. Lack of timely submission of requested documentation: Claims were denied due to a lack of record submission in a timely manner. According to the Medicare Program Integrity Manual, PUB 100-8, Chapter 3, 3.2.3.8b, “During prepayment…or post payment…review, if no response is received within 45 calendar days after the date of the ADR, the MACs and ZPICs shall deny the claim.”

Cahaba indicated that from this review finding they plan to “begin a prepayment widespread targeted review…Once selected, the claims will be reviewed for medical necessity (e.g. compliance with CMS’ guidelines, contractor LCD’s, correct billing and coding).

Will there be a Happy Ending?

 

Here at MMP we have been hearing from clients that they are receiving Additional Documentation Requests (ADRs) for records where the patient has undergone a kyphoplasty. To help ensure this story has a happy ending for your hospital, here are some suggestions of what you can do:

• Timely submission of requested documentation is a must.
• Read the LCD for your MAC to understand the Coverage Guidance (Indications and Limitations, ICD-10 codes that support medical necessity) and Documentation Requirements.
• Work with your Physicians performing these procedures to ensure they are aware of the LCD requirements.

To help everyone get started, we are providing this table with a link to the current LCD for all of the MACs, post ICD-10 implementation.

‍ Resource

¹http://www.justice.gov/opa/pr/2011/January/11-civ-006.html

October 1st has seen its share of historical events. Before looking forward, let’s take a look back at a few highlights from this date in history.

October 1, 1800: Spain ceded Louisiana to France in a secret treaty.

October 1, 1851: First Hawaiian stamp is issued.

October 1, 1880: First electric lamp factory opened by Thomas Edison.

October 1, 1890: Yosemite National Park forms.

October 1, 1908: Ford puts the Model T car on the market at a price of US$825.

October 1, 1942: Little Golden Books (children books) begins publishing.

October 1, 1955: “Honeymooners” premieres.

October 1, 1982: Sony launches the first consumer compact disc player (model CDP-101).

October 1, 1989: U.S. issues a stamp, labeling an Apatosaurus as a brontosaurus.

October 1, 2013: U.S. federal government shuts down non-essential services after it is unable to pass a budget measure.

As we are now 29 days from October 1st, it appears that the transition to ICD-10 won’t be shut down. While ICD-10 is and should be a main focus for hospitals right now, a gentle reminder that October 1st is also the start of the Centers for Medicare and Medicaid Services (CMS) fiscal year and the implementation of the Fiscal Year (FY) 2016 Inpatient Prospective Payment System (IPPS) Final Rule. This article highlights some of the key MS-DRG changes finalized in the Inpatient Prospective Payment System (IPPS) 2016 Final Rule that will also begin on October 1, 2015.

Documentation and Coding Adjustment

CMS is required to recover $11 billion by 2017 to fully recoup documentation and coding overpayments related to the transition to the MS-DRG system that began in FY 2008. CMS finalized another -0.8 percent adjustment as begun in FY 2014 to continue the recoupment process.

Changes to Preventable Hospital Acquired Conditions (HACs), Including Infections for FY 2016

CMS finalized the proposal to implement the ICD-10-CM/PCS Version 33 HAC list to replace the ICD-9-CM Version 32 HAC list. The HAC code list translations from ICD-9-CM to ICD-10-CM/PCS are located in Appendix I of the ICD-10-CM/PCS MS-DRG Version 32 Definitions Manual that can be located in the Downloads section of the ICD-10 MS-DRG Conversion Project Web site at: https://www.cms.gov/Medicare/Coding/ICD10/ICD-10-MS-DRG-Conversion-Project.html

Finalized Changes to Specific MS-DRG Classifications for FY 2016

MDC 5: Diseases and Disorders of the Circulatory System

The CMS created 2 New MS-DRGs to classify Percutaneous Intracardiac Procedures.

Major Cardiovascular Procedures have been moved from MS-DRGs 237 and 238 to five new MS-DRGs as outlined in the following table.

‍MDC 8: Diseases and Disorders of the Musculoskeletal System and Connective Tissue

Revision of Hip or Knee Replacements ICD-10-PCS Version 32 Logic

The CMS finalized the proposal to add code combinations which capture the joint revision procedure. These combination codes will be the same for MS-DRGs 466,467, 468 as well as MS-DRGs 628, 629, and 630 (Other Endocrine, Nutritional, and Metabolic Operating Room Procedures with MCC, with CC, and without CC/MCC) as the joint procedures are also included in this MS-DRG group. The table of code combinations can be found on pages 49,390 thru 49,406 of the Final Rule.

Spinal Fusion

The CMS finalized the proposal to change the title of MS-DRGs 456, 457 and 458. They indicated that by changing the reference of “9+ Fusions” to “Extensive Fusions,” this more appropriately identifies the procedures classified under these groupings. The final title revisions are as follows:

• MS-DRG 456: Spinal Fusion Except Cervical with Spinal Curvature/Malignancy/Infection or Extensive Fusion with MCC,
• MS-DRG 457: Spinal Fusion Except Cervical with Spinal Curvature/Malignancy/Infection or Extensive Fusion with CC; and
• MS-DRG 458: Spinal Fusion Except Cervical with Spinal Curvature/Malignancy/Infection or Extensive Fusion without CC/MCC.

MDC 14: Pregnancy, Childbirth and the Puerperium

The CMS finalized the proposal to modify the logic for several ICD-10 procedure codes where the current logic did not result in the appropriate MS-DRG assignment. Specifically, the codes should not be designated as O.R. codes. Specific Codes where the logic was modified include:

• 3E0P7GC (Introduction of other therapeutic substance into female reproductive, via natural or artificial opening);
• 3E0P76Z (Introduction of nutritional substance into female reproductive, via natural or artificial opening);
• 3E0P77Z (Introduction of electrolytic and water balance substance into female reproductive, via natural or artificial opening);
• 3E0P7SF (Introduction of other gas into female reproductive, via natural or artificial opening);
• 3E0P83Z (Introduction of anti-inflammatory into female reproductive, via natural or artificial opening endoscopic);
• 3E0P86Z (Introduction of nutritional substance into female reproductive, via natural or artificial opening endoscopic);
• 3E0P87Z (Introduction of electrolytic and water balance substance into female reproductive, via natural or artificial opening endoscopic);
• 3E0P8GC (Introduction of other therapeutic substance into female reproductive, via natural or artificial opening endoscopic); and
• 3E0P8SF (Introduction of other gas into female reproductive, via natural or artificial opening endoscopic).

Finalized Changes to the Postacute Care Transfer MS-DRGs

Per the 2015 OPTUM DRG Expert, “CMS established a postacute care transfer policy effective October 1, 1998. The purpose of the IPPS postacute care transfer payment policy is to avoid providing an incentive for a hospital to transfer patients to another hospital early in the patient’s stay in order to minimize costs while still receiving the full DRG payment. The transfer policy adjusts the payments to approximate the reduced costs of transfer cases.”

The CMS finalized the proposal to update the list of MS-DRGs that are subject to the Postacute Care Transfer Policy to include:

• MS-DRG 273: Percutaneous Intracardiac Procedures with MCC; and
• MS-DRG 274: Percutaneous Intracardiac Procedures without MCC.

Note: MS-DRGs 273 and 274 met the criteria for the special payment methodology and therefore are also subject to the MS-DRG special payment methodology.

Please be aware that this article highlights some of the key changes. For those closely involved with coding in your facility be on the lookout for our Annual Fall Inpatient webinar.

In the meantime, the FY 2016 Final Rule can be accessed at http://www.gpo.gov/fdsys/pkg/FR-2015-08-17/pdf/2015-19049.pdf.

We all realize that to be effective in our jobs, we must have the cooperation of others and this is especially true when it comes to healthcare. Physicians rely on hospitals to provide the tools and services they need to care for their patients, and hospitals rely on physicians to utilize those services appropriately and to provide sufficient documentation to support coding, billing and payment. The Medicare Quarterly Compliance Newsletter for July is now available and provides several examples of issues where team work between physicians and hospitals is a must. Most of the articles in this quarter’s edition focus on physician issues, but there are a couple of articles that relate to hospital outpatient services and some instructions in the physician articles that will benefit hospitals as well.

Bevacizumab Medical Necessity (page 15 in the Compliance Newsletter)

Recovery Auditors have an automated edit to identify claims for Bevacizumab, J9035, that are incorrectly paid when they do not contain a diagnosis code required by a Local Coverage Determination (LCD). After a general description of Medicare requirements for drug coverage and identification of a specific CGS LCD that list diagnoses for a number of drugs and biologicals used to treat cancer and other acute and chronic conditions, the article discusses Medicare coverage of off-label drug usage. Drugs used for indications other than those in the approved labeling may be covered under Medicare if it is determined that the use is medically accepted, taking into consideration the major drug compendia, authoritative medical literatures, and/or accepted standards of medical practice. Some local coverage policies have been expanded to include off label usage in accordance with CMS Policy for Off Label Usage.

The Medicare Benefit Policy Manual, Chapter 15, section 50.4.5, provides guidance on the off-label use of drugs and biologicals in an anti-cancer chemotherapeutic regimen. Per the manual, “In general, a use is identified by a compendium as medically accepted if the:

1. indication is a Category 1 or 2A in NCCN, or Class I, Class IIa, or Class IIb in DrugDex; or,
2. narrative text in AHFS-DI or Clinical Pharmacology is supportive.

A use is not medically accepted by a compendium if the:

1. indication is a Category 3 in NCCN or a Class III in DrugDex; or,
2. narrative text in AHFS or Clinical Pharmacology is “not supportive.”

The complete absence of narrative text on a use is considered neither supportive nor non-supportive.”

Contractors may also determine to cover off-label uses that are supported by clinical research based on evaluation of evidence in certain specified peer-reviewed medical literature. FDA-approved drugs and biologicals may also be considered for use in the determination of medically accepted indications for off-label use if determined by the contractor to be reasonable and necessary. Refer to the complete manual instructions for specific details of coverage.

There are also a number of LCDs and Articles that address the coverage of chemotherapeutic use of Bevacizumab and off-label uses of drugs.

Providers also need to bear in mind that some Medicare Administrative Contractors (MACs) are performing probe reviews and targeted reviews on anti-cancer drugs including Bevacizumab. These reviews have significant denial rates due to lack of medical necessity, failure to follow established protocols and lack of documentation, such as physician’s orders.

So What Should Providers Do to Ensure Coverage of Anti-Cancer Treatments

• Be aware of any coverage policies in your MAC jurisdiction and follow the diagnosis requirements.
• For off-label use not included as covered in your MAC’s LCD, verify that your off-label usage is supported by Medicare approved standards in the pharmaceutical compendia or accepted peer-reviewed medical literature. Appeal any denials and be sure to include the supporting medical literature with your appeal.
• Follow established and accepted protocols for anti-cancer chemotherapeutic regimens.
• Make sure the documentation of services is complete and sufficient to support your billing.
• Be aware of probe and targeted reviews by your MAC for anti-cancer drugs and monitor your denial rates. Take corrective actions based on denial reasons.

Other issues related to hospitals identified in the July Compliance Newsletter include:

• Claims lacking medical necessity for hydration services based on LCD requirements (page 22)
• Physician claims with insufficient documentation for nasal endoscopy (pg 7), lithotripsy (pg 9), and lumbar spinal fusion (pg 12). Although these reviews focused on physician services, hospital payment may also be affected as it is often dependent on the physician’s documentation. Hospitals must work with physicians to make sure the documentation for these services includes:
• The correct date of service;
• The reason for performing the procedure;
• The results of the procedure;
• A physician’s signature; and/or
• A signature log or attestation for an illegible signature.

As often is the case, the hospital’s payment for services is dependent on the physician’s documentation and treatment choices. It must be a team effort for all providers to follow Medicare requirements and get the reimbursement they deserve.

Hospitals have struggled with the 2-Midnight Rule since it was implemented on October 1, 2013. Since then the Centers for Medicare and Medicare Services (CMS) has held numerous National Provider Calls, released sub-regulatory guidance, implemented a Probe and Educate Process conducting by Medicare Administrative Contractors (MACs) and requested public comment for an alternative short stay payment policy from health care providers. On July 1st, the CMS released the CY 2016 Outpatient Prospective Payment System (OPPS) Proposed Rule. Tucked way back on page 150 of the 177 page document, not only does CMS propose a change to the 2-Midnight Rule but they provide detail regarding a new medical review strategy that CMS will adopt on October 1, 2015 “regardless of whether the 2-midnight rule remains unchanged or is modified.”

Two-Midnight Rule Background

• The Two-Midnight Rule was implemented for admissions on or after October 1, 2013 in response to the concerning trend of extended “observation” services as these days do not count towards the three-day inpatient hospital stay required before a beneficiary becomes eligible for treatment in a skilled nursing facility and patient status can have a significant implications for provider reimbursement and beneficiary cost sharing.

• In general, the 2-Midnight Rule specified that an Inpatient stay is appropriate and payable under Medicare Part A when:
• The admitting physician has an expectation that a hospitalization will cross two midnights and the medical record documentation supports that expectation, or
• The beneficiary is being admitted for a Medicare designated Inpatient Only Procedure.

• Through sub-regulatory guidance, CMS has indicated “review contactors’ expectations for sufficient documentation will be rooted in good medical practice. Expected length of stay and the determination of the underlying need for medical or surgical care at the hospital must be supported by complex medical factors such as history and comorbidities, the severity of signs and symptoms, current medical needs, and the risk of an adverse event, which Medicare review contractors will expect to be documented in the physician assessment and plan of care. CMS does not anticipate that physicians will include a separate attestation of the expected length of stay, but rather that this information may be inferred from the physician’s standard medical documentation, such as his or her plan of care, treatment orders, and physician’s notes.”

• With the implementation of the Two-Midnight Rule, CMS initiated a Probe and Educate Process where Medicare Administrative Contractors (MACs) have been conducting prepayment patient status probe reviews of Medicare Part A inpatient hospital claims spanning 0 or 1 midnight after the formal inpatient admission to determine the medical necessity of the inpatient status in accordance with the 2 midnight benchmark.

• The Medicare Access and CHIP Reauthorization Act of 2015 extended the Probe and Educate Process through September 30, 2015. This Act also continues to prohibit Recovery Auditor from conducting post-payment medical reviews of inpatient hospital patient status claims with dates of admission between October 1, 2013 and September 30, 2015.

• Since the implementation of the Two-Midnight Rule, CMS has indicated that “other circumstances where an inpatient admission would be reasonable in the absence of an expectation of a 2 midnight stay should be rare and unusual. To date, CMS has identified “Mechanical Ventilation Initiated during Present Visit” as the only rare and unusual circumstance in which the 2-midnight benchmark would not apply.”

Proposed Policy Change for Medical Review of Inpatient Hospital Admissions under Medicare Part A

The proposed policy change for medical review of inpatient hospital admissions is aimed at changing “the standard by which inpatient admissions generally qualify for Part A payment based on feedback from hospitals and physicians to reiterate and emphasize the role of physician judgement.”

CMS is “proposing to modify our existing “rare and unusual” exceptions policy to allow for Medicare Part A payment on a case-by-case basis for inpatient admissions that do not satisfy the 2-midnight benchmark, if the documentation in the medical record supports the admitting physician’s determination that the patient requires inpatient hospital care despite an expected length of stay that is less than 2 midnights. For payment purposes, the following factors, among others, would be relevant to determining whether an inpatient admission where the patient stay is expected to be less than 2 midnights is nonetheless appropriate for Part A payment:

• The severity of the signs and symptoms exhibited by the patient;
• The medical predictability of something adverse happening to the patient; and
• The need for diagnostic studies that appropriately are outpatient services (that is, their performance does not ordinarily require the patient to remain at the hospital for 24 hours or more).

We note that, under the existing rare and unusual policy, only one exception—prolonged mechanical ventilation—has been identified to date. Upon further consideration and based on feedback from stakeholders, we believe there may be other patient-specific circumstances where certain cases may nonetheless be appropriate for Part A payment, absent an expected stay of at least 2 midnights. Such circumstances would be determined on a case-by-case basis. Under the proposed revised policy, for

purposes of Medicare payment, an inpatient admission will be payable under Part A if the documentation in the medical record supports either the admitting physician’s reasonable expectation that the patient will require hospital care spanning at least 2 midnights, or the physician’s determination based on factors such as those identified above, that the patient requires formal admission to the hospital on an inpatient basis”…”We are proposing to revise § 412.3(d) to state that when the admitting physician expects a hospital patient to require hospital care for only a limited period of time that does not cross 2 midnights, the services may be appropriate for payment under Medicare Part A if the physician determines and documents in the patient’s medical record that the patient requires a reasonable and necessary admission to the hospital as an inpatient. In general, we would expect that with most inpatient admissions where the stay is expected to last less than the 2-midnight benchmark, the patient will remain in the hospital at least overnight but acknowledge that the patient can be unexpectedly discharged or transferred to another hospital and not actually use a hospital bed overnight. Cases for which the physician determines that an inpatient admission is necessary, but that do not span at least 1 midnight, will be prioritized for medical review.”

“Under the proposed policy change, for stays for which the physician expects the patient to need less than 2 midnights of hospital care and the procedure is not on the inpatient only list or on the national exception list, an inpatient admission would be payable on a case-by-case basis under Medicare Part A in those circumstances under which the physician determines that an inpatient stay is warranted and the documentation in the medical record supports that an inpatient admission is necessary.”

The proposed rule makes a point to note that CMS is “not proposing any changes for hospitals stays that are expected to be greater than two midnights; that is, if the physician expects the patient to require hospital care that spans at least 2 midnights and admits the patient based on that expectation, the services are generally appropriate for Medicare Part A payment.”

CMS goes on to reiterate that it would “be rare and unusual for a beneficiary to require inpatient hospital admission after having a minor surgical procedure or other treatment in the hospital that is expected to keep him or her in the hospital for only a few hours and not at least overnight” and CMS “will monitor the number of these admissions and plan to prioritize these types of cases for medical review.”

What does this mean for a Hospital?

When I was first introduced to the concept of Clinical Documentation one key concept different in the inpatient setting versus the outpatient setting was that diagnoses still documented as possible, probable or likely at the time of discharge could be coded as if the condition existed.

Here is a breakdown of the possible, probable and likely of this 2-Midnight Proposal.

• It would now be possible that a physician can admit a patient as an inpatient without having a 2-Midnight Expectation, but
• It is also probable without excellent physician documentation in the record a medical reviewer would disagree with the inpatient status, and
• It is likely moving forward all of your 1 day Inpatient Hospital reviews will be prioritized for medical review. The question now is who will be doing that review. The answer leads us to the change being made for the 2016 IPPS fiscal year to the CMS medical review strategy.

CMS Changing the Medical Review Strategy

As mentioned earlier in this article, the MACs have had the responsibility of performing the Probe & Educate audits that have been ongoing since October 1, 2013. This is about to change. CMS has indicated even if the 2-Midnight Proposal is not finalized “that, no later than October 1, 2015, we are changing the medical review strategy plan to have Quality Improvement Organization (QIO) contractors conduct these reviews of short inpatient stays rather than the MACs.”

Key Facts about QIOs

• A statutory duty of the QIO’s is to review “some or all of the professional activities of providers and practitioners in the QIO’s service area.” These reviews are aimed at determining if services being delivered are reasonable and medically necessary, if the quality of services meet professional recognized standards of care, and for inpatient services, if the services could have been appropriately and effectively furnished in a different setting (i.e. outpatient). Further, section 1154(a)(2) of the Act provides for payment determinations to be made based on these QIO reviews.”

• Additional QIO Review Functions:
• Addressing beneficiary complaints,
• Provider-based notice appeals,
• Violations of the Emergency Medical Treatment and Labor Act (EMTALA),
• Peer review; and
• Higher Weighted Diagnosis Related-Group (HWDRG) coding reviews. When this “involves a service provided during a short inpatient stay, QIOs also perform a corresponding medial review to validate adherence to the current 2-midnight policy.”

• The Secretary has broad authority to “direct additional activities by QIOs to improve the effectiveness, efficiency, economy, and quality of services under the Medicare program. These reviews are integral to the determination of whether items and services should be payable under the Medicare program.”
• “QIOs routinely collaborate and interact with State survey agencies, MACs, recovery auditors, and qualified independent contractors (QICs).”

• “To mitigate the perception of a potential conflict of interest between medical review and quality improvement functions of the QIOs, on August 1, 2014, the QIO program separated medical case review from its quality improvement activities in each State under two types of regional contracts. These include Beneficiary and Family Centered Care QIOs (BFCC-QIOs) contractors who perform medical case review, and Quality Innovation Network QIOs (QIN-QIOs) contractors who perform quality improvement activities and provide technical assistance to providers and practitioners. In addition, the restructured QIO program uses a non-QIO contractor to assist CMS in the monitoring and oversight of the BFCC-QIO case review activities.”

New QIO Short Inpatient Medical Review Process to be adopted by October 1, 2015

• “QIOs will review a sample of post-payment claims and make a determination of the medical appropriateness of the admission as an inpatient.”

• The number of admissions for a “minor surgical procedure or other treatment in the hospital that is expected to keep him or her in the hospital for only a few hours (less than 24 hours)” will be monitored and these types of cases will be prioritized for medical review.

• Claim denials will be referred to the MAC for payment adjustments. “Providers’ appeals of denied claims will be addressed under the provisions of section 1869 of the Act.”

• “QIOs will educate hospitals about claims denied under the 2-midnight policy and collaborate with these hospitals in their development of a quality improvement framework to improve organizational processes and/or systems.”

• “Hospitals that are found to exhibit a pattern of practices, including, but not limited to: having high denial rates and consistently failing to adhere to the 2-midnight rule (including having frequent inpatient hospital admissions for stays that do not span one midnight), or failing to improve their performance after QIO educational intervention, will be referred to the recovery auditors for further payment audit.”

• Under current law, Recovery Auditors may resume patient status reviews for dates of admission on or after October 1, 2015. “The number of claims that a recovery auditor will be allowed to review for patient status will be based on the claim volume of the hospital and the denial rate identified by the QIO.”

2-Midnight Rules’ Impact on the Trend of Long Outpatient Hospital Stays

CMS notes that “preliminary data suggest that the 2-midnight rule as it relates to hospital stays spanning at least 2 midnights has been effective in reducing long outpatient hospital stays. Specifically, our data show that the proportion of outpatient long-stay encounters (more than 2 days) involving observation services decreased by 11 percent in FY 2014 compared to FY 2013. The trend in these data is consistent with our adoption of the 2-midnight rule on October 1, 2013.”

Public Comments Requested

CMS noted that is has been argued by members of the hospital community that Medicare should adopt specific criteria for medical review entities to use when reviewing short stay claims. CMS is inviting public comments on whether specific criteria should be adopted for inpatient hospital admissions not expected to span at least 2 midnights and, if so, what should that criteria be.

CMS also noted that “MedPAC recently recommend repealing the 2-midnight rule in its entirety, in Chapter 7 of its June Report to Congress. MedPAC has not recommended a short-stay payment policy. We have requested public comment on three different occasions on issues related to when a patient is appropriately admitted as an inpatient or when the patient is appropriately treated as an outpatient, including potential payment policy options to address this issue” which has not resulted in a consensus on a recommended policy. In a letter earlier this year, the American Hospital Association provided us with its analysis for several payment policy alternatives and their potential impact. The association did not recommend adoption of a particular payment policy in this area. We continue to be open to considering potential payment policy options that have the potential to address this issue.”

For those who wish to comment, CMS is accepting comments on the Two Midnight portion of the proposed rule until August 30, 2015 and will respond to comments in a final rule to be issued on or around November 1, 2015.

Resources

• Link to the CY 2016 OPPS Proposed Rule – Display Copy (see pages 585-606 of the pdf): https://s3.amazonaws.com/public-inspection.federalregister.gov/2015-16577.pdf
• Link to CY 2016 OPPS Proposed Rule in the July 8, 2015 Federal Register (see pages 150-155 of ): http://www.gpo.gov/fdsys/pkg/FR-2015-07-08/pdf/2015-16577.pdf

• Link to the July 1, 2015 CMS Fact Sheet: Two-Midnight Rule: http://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2015-Fact-sheets-items/2015-07-01-2.html

• Link to the July 1, 2015 CMS Fact Sheet: CMS Proposes Hospital Outpatient and Ambulatory Surgical Center Policy and Payment Changes, Including Proposed Changes to the Two-Midnight Rule, and Quality Reporting Changes for 2016: http://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2015-Fact-sheets-items/2015-07-01.html

• Link to CMS Document: Questions and Answers Relating to Patient Status Reviews 3/12/14: http://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/Medical-Review/Downloads/Questions_andAnswersRelatingtoPatientStatusReviewsforPosting_31214.pdf

• June 2015 Medicare Payment Advisory Commission Report to Congress Fact Sheet: http://www.medpac.gov/documents/fact-sheets/fact-sheet-on-medpac%27s-june-2015-report-to-the-congress-medicare-and-the-health-care-delivery-system.pdf?sfvrsn=0