Knowledge Base - Full Library

The 2011 Medicare Physician Fee Schedule (MPFS) final rule, which was released by CMS earlier this week, contains two rules that affect hospitals.

The first concerns the application of a multiple procedure payment reduction for therapy services. Specifically, beginning CY 2011, CMS will apply a 25% payment reduction to the practice expense (PE) component of the Physician Fee Schedule (PFS) payment rate for the second and subsequent "always therapy" services that are furnished to a single patient by a single provider on one date of service. Note that this will not be a reduction of 25% to the total payment amount for the additional multiple services, but only a reduction to one of three components used to calculate the payment rate. The “always therapy” service with the highest PE component will pay at 100% of the payment rate and other “always therapy” services provided the same day will be paid at a reduced rate calculated using the reduced PE component. Without final payment rates and component ratios, we are unable to determine what the final impact will be; we also note that the percent reduction will vary based on the number and combination of services furnished. When the final PFS rates are available, MMP, Inc. will provide some example reduction scenarios.

This policy applies to:

• services provided to the same patient, by the same provider, on the same day of service;
• multiple units of the same therapy service, as well as to multiple different services;
• all settings where outpatient therapy services are paid under Part B at PFS rates, which includes hospital outpatient therapy services;
• services furnished in different sessions on the same day by the same provider; and
• services provided by different therapy disciplines, such as physical therapy, occupational therapy and/or speech therapy.

The “always therapy” CPT codes to which the policy applies are: 92506, 92507, 92508, 92526, 92597, 92607, 92609, 96125, 97001, 97002, 97003, 97004, 97012, 97016, 97018, 97022, 97024, 97026, 97028, 97032, 97033, 97034, 97035, 97036, 97110, 97112, 97113, 97116, 97124, 97140, 97150, 97530, 97533, 97535, 97537, 97542, 97750, 97755, 97760, 97761, 97762, G0281, G0283, and G0329. The policy does not apply to add-on, bundled, or contractor-priced codes.

The other rule effective for CY 2011 concerns signature requirements for laboratory requisitions. Previous guidance from CMS stated that a signature was not required on a laboratory requisition because the requisition was only “ministerial paperwork” and although a signature on a laboratory requisition was one way of documenting the treating physician ordered the test, it was not the only way. CMS believes this guidance was causing a lot of confusion about when signatures were and were not required. Providers were also having problems when Medicare reviewers, such as CERT, required them to produce a signed order to support payment if the requisition was not signed.   In the 2011 MPFS rule, CMS finalized their policy to require a physician’s or non-physician practitioner’s (NPP) signature on requisitions for clinical laboratory diagnostic tests paid under the Clinical Laboratory Fee Schedule (CLFS). Note that for hospitals paid under OPPS, diagnostic laboratory tests are paid under the CLFS (status indicator “A”). Physicians and NPPs may also continue to request laboratory tests by means other than a requisition, such as a written, signed order; a copy of annotated medical records; telephonically; or electronically. (Note: If an order is communicated via telephone, both the treating physician/practitioner, or his or her office, and the testing facility must document the telephone call in their respective copies of the beneficiary's medical records. Under the Hospital Conditions of Participation, verbal orders must be countersigned by the ordering physician/NPP within 48 hours.)

 

For more detail on both issues, see the complete 2011 MPFS Final Rule. The discussion concerning the therapy payment reduction is on pages 207-240 and the laboratory requisition signature requirements are discussed on pages 1021-1035.

Revenue code 0948, Pulmonary Rehabilitation services, has been added to the list of repetitive Part B services effective April 1, 2011. Institutional providers, such as hospitals, are required to bill repetitive services furnished to a single individual monthly or at the end of treatment. This updated information can be found in Transmittal 2092 or in MLN Matters Article MM7163.

CMS Transmittal 2091 explains requirements for the correct reporting of therapy modifiers (Modifiers GP, GO, and GN) on institutional claims. Only one modifier should be reported per line of service. Effective April 2011, Medicare is implementing new edits to return claims to the provider for correction if more than one of these modifiers is reported on the same line. Medicare also edits for the correct combination of modifier to revenue code as described below.

• Physical Therapy, modifier GP, revenue code 042X
• Occupational Therapy, modifier GO, revenue code 043X
• Speech Language Pathology, modifier GN, revenue code 044X

For more information, see MLN Matters Article MM7170.

In accordance with updates by the National Uniform Billing Committee (NUBC), CMS is implementing the following changes effective April 1, 2011 concerning Point of Origin codes:

• Point of Origin codes are no longer required on 14x bill types (used for non-patient laboratory specimens)
• Point of Origin code 9 – information not available – will be accepted on all bill types.

This information can be viewed in MLN Matters Article MM7144.

Question:
Can anything be billed to Medicare when a patient is DOA (dead on arrival)?

Answer:
Yes, services are covered until the patient is pronounced dead. If the patient is pronounced prior to arrival, there is no coverage.

Medicare Benefits Policy Manual, 100-02, Chapter 6, Section 20.2:

"Outpatient hospital services furnished in the emergency room to a patient classified as 'dead on arrival' are covered until pronouncement of death, if the hospital considers such patients as outpatients for record-keeping purposes and follows its usual outpatient billing practice for such services to all patients, both Medicare and non-Medicare. This coverage does not apply if the patient was pronounced dead prior to arrival at the hospital."

On September 24, 2010, CMS released Transmittal 776 (CR 7140) which clarifies the date for which CPT code 80101 is no longer valid for Medicare purposes. According to the transmittal, which has an implementation and effective date of October 26, 2010, CPT code 80101 is not valid for Medicare billing as of January 1, 2010. For dates of service on and after January 1, 2010, providers should use HCPCS code G0431 in place of 80101 (G0431QW in place of 80101QW for laboratories with a CLIA certificate of waiver). Claims with denials for CPT code 80101 from January 1, 2010 through June 30, 2010 should be resubmitted with HCPCS code G0431. Providers should not resubmit claims if they received payment for 80101.

The CPT/HCPCS descriptions for both 80101 and G0431 are identical: Drug screen, qualitative: single drug class method (e.g. immunoassay, enzyme assay), each drug class.

For more information, see MLN Matters Article MM7140 or Transmittal 776.

CMS recently released Transmittal 2033 (CR7064) concerning the January 1, 2011 implementation of the End Stage Renal Disease (ESRD) bundled prospective payment system (PPS).  ESRD PPS was mandated by the Medicare Improvements for Patients and Providers Act (MIPPA).  The ESRD PPS will provide a single payment to ESRD facilities that will cover all the resources used in providing an outpatient dialysis treatment, including supplies, equipment, drugs, biologicals, laboratory tests, training, and support services.  Hospitals need to be aware of the consolidated billing (CB) rules for laboratory tests and drugs under the ESRD PPS. 

Effective January 1, 2011, all ESRD-related lab tests must be billed by the renal dialysis facility whether provided directly or under arrangements with an independent lab.  When an outpatient hospital furnishes lab tests subject to ESRD CB for reasons other than for the treatment of ESRD, the hospital must use new modifier ‘AY’ to receive separate payment.  Modifier ‘AY’ is defined as “item or service furnished to an ESRD patient that is not for the treatment of ESRD.”  See the list below of the laboratory tests that are subject to ESRD CB.   Medicare systems will reject ESRD lab services’ line items on bill types  13x, 14x, and 85x that do not contain modifier AY or HCPCS G0257 (hospital outpatient emergency/unscheduled dialysis for ESRD patient) when overlapping a dialysis claim.

Similarly, all ESRD-related drugs and biologicals (see list below) must be billed by the renal dialysis facility.  When an ESRD-related drug or biological is provided to an ESRD patient by a hospital for reasons other than ESRD treatment, the hospital may submit a claim for separate payment using modifier AY.  Contractors shall reject at the line item level incoming outpatient TOBs 13x, 14x, and 85x for drugs subject to ESRD CB that do not contain modifier AY or HCPCS G0257 when overlapping the from and through date of a covered dialysis claim.

Also with the implementation of the ESRD PPS, ESRD-related EPO and Aranesp are not separately payable on Part B claims for other providers with the exception of a hospital billing for an emergency or unscheduled dialysis session.

Laboratory Tests Subject to ESRD Consolidated Billing*:
Albumin, aluminum, vitamin D 25-hydroxy and  25-dihydroxy, calcium, ionized calcium, CO2, carnitine, chloride, creatinine, urine creatinine, creatinine clearance, vitamin B-12, erythropoietin, ferritin, folic acid, iron, iron binding, magnesium, parathormone, alkaline phosphatase, phosphorus, potassium, prealbumin, protein, sodium, transferrin, urea nitrogen  (blood and urine), urea-n clearance, hematocrit, hemoglobin, CBC and CBC with automated diff (with and without platelet count), RBC count, reticulocyte count, reticyte/hgb concentrate, leukocyte count, hepatitis B core antibody (total and IgM), hepatitis B surface antibody, hepatitis B surface antigen, blood culture, bacterial cultures (other, aerobic other, anaerobic other, anaerobic except blood, aerobic and anaerobic definitive ID, and screening cultures)
* See Attachment 6 to Transmittal 2033 for a complete description of ESRD CB lab tests including CPT/HCPCS codes.

Drugs Subject to ESRD Consolidated Billing*:
Heparin, lepiridun, reteplase, alteplase recombinant, urokinase, darbepoetin, iron sucrose injection, Na ferric gluconate complex, vitamin B12, EPO, midazolam hydrochloride, diazepam, calcium gluconate, calcitonin salmon, clacitriol, deferoxamine mesylate, doxercalciferol, ibandronate sodium, pamidronate disodium, paricalcitol, levocarnitine, daptomycin, vancomycin HCl
*May not apply to all forms of the drug.  See Attachment 7 to Transmittal 2033 for complete drug descriptions and HCPCS codes.

For complete information, see Transmittal 2033  or MLN Matters Article MM7064.

In August, CMS released Transmittal 756 to alert hospitals that effective with the implementation of 5010, IPPS hospitals will no longer report the Present on Admission (POA)  indicator of ‘1’.  The POA field should be left ‘blank’ for those ICD-9-CM diagnosis codes that are exempt from the POA reporting requirement instead of populating a ‘1’.

Also, the K3 segment, which was required for reporting POA in the 4010A1 version of the 837I, will no longer be used to report POA.  The POA indicators will instead follow the diagnosis code in the appropriate 2300 HI segment.

The compliance date for implementing Version 5010 is January 1, 2012.  All Medicare systems will be ready to handle the new standards by January 1, 2011. Medicare plans for its systems to handle the current 4010A standard and the new 5010 standards for incoming claims and inquiries and for outgoing replies and remittances from January 1, 2011 until January 1, 2012. This will allow providers who are ready to begin using the new standards on January 1, 2011, while providing an additional year for all providers to be ready.

Additional information concerning the change in POA indicator ‘1’ can be read at MLN Matters Article MM7024.  See MLN Matters Article SE0904 for more Information on HIPAA Version 5010 implementation.

CMS recently published MLN Matters educational article, SE1022, regarding medical records retention timeframes.  The article reminds providers that they should maintain an accurately written, promptly completed, accessible, properly filed and retained medical records for each Medicare beneficiary that is their patient.  CMS also encourages providers to use a system of author identification and record maintenance that ensures the integrity of the authentication and protects the security of all record entries.  The Medicare program does not have requirements for the media formats for medical records.  Medical records need to be in their original form or in a legally reproduced form so they may be reviewed and audited by authorized entities.  This form may be electronic as long as the provider has a medical record system that ensures the record may be accessed and retrieved promptly.  The article also reminds providers they may be eligible for incentive payments if they meaningfully use certified electronic health records (EHRs).
The record retention guidelines from the article and State requirements are as follows:

 For more information, see the   MLN Matters Article SE1022 and the Alabama Health Care Authorities Records Disposition Authority document.

Hospitals may wish to obtain legal advice concerning record retention after these time periods and medical document format.

The Patient Protection and Affordable Care Act (PPACA) and the Health Care and Education Affordability Act (the Reconciliation Act) made many changes to healthcare that will affect hospitals.  One little publicized requirement requires hospitals to make their charges public.  This requirement is buried in a section of the law that deals primarily with insurance companies and bringing down the cost of health care coverage. 

A paragraph in Section 2718 states:

“(e) STANDARD HOSPITAL CHARGES.—Each hospital operating within the United States shall for each year establish (and update) and make public (in accordance with guidelines developed by the Secretary) a list of the hospital‘s standard charges for items and services provided by the hospital, including for diagnosis-related groups established under section 1886(d)(4) of the Social Security Act.” 

Specific guidelines on the implementation of this requirement have not been published and it is unclear as to the effective date of this section.  MMP, Inc. will forward information concerning this requirement as it becomes available.

Question:

How do you change a patient’s status from inpatient to observation?

Answer:

First, CMS has made clear that observation is a service and not a status.  Therefore, an inpatient would be changed to an outpatient status.  Per recent Medicare FAQs and Cahaba education, there must be involvement of the Utilization Review (UR) committee to change a patient’s status from inpatient to outpatient.  A physician’s order to revise a patient’s status from inpatient to outpatient, in and of itself, is not sufficient to change a patient’s status from inpatient to outpatient.  
Inpatient to outpatient status changes must meet all the requirements of Condition Code 44.  These include:

• Change in patient status is made prior to discharge or release;
• Hospital has not submitted an inpatient claim to Medicare;
• A physician concurs with the UR committee’s decision; and
• Physician concurrence with the UR committee’s decision is documented in the patient’s medical record.

For Condition Code 44 decisions, one physician member of the UR committee may make the determination for the committee that the inpatient admission is not medically necessary.  This physician member of the UR committee must be a different person from the concurring physician for Condition Code 44 use, who is the physician responsible for the care of the patient.  The medical record should contain documentation of these interactions including the concurrence of the treating physician.  For more information, see the Medicare Claims Processing Manual (Pub. 100-04), Chapter 1, Section 50.3.2.

Changes in patient status must be fully documented in the medical record, complete with orders and notes that indicate the following:

• Why the change was made;
• The care that was furnished to the beneficiary; and
• The participants making the decision to change the patient’s status.

If the patient requires medically necessary observation services after the change to outpatient status, the attending/treating physician should write an order for the observation services.  Cahaba GBA strongly encourages providers to document a separate order for observation when it is applicable, in addition to the order to revise the patient’s status from inpatient to outpatient, subsequent to Condition Code 44 guidelines.  It is important to note that the hospital may not bill for observation prior to the time of a physician order for observation.  The hospital should begin billing for observation services at the time documented in the patient's medical record that observation services are initiated in accordance with a physician's order for observation services. 

If an inpatient does not meet inpatient medical necessity criteria and the hospital is unable to follow the CC 44 criteria for a status change, the hospital may submit a Type of Bill 12X for covered “Part B Only” furnished services.  See the Medicare Benefits Policy Manual (Pub. 100-02), Chapter 6, Section 10.

With the recent changes and focus on the hospital inpatient three-day payment window, it is important to review the basic tenets of the original rule, such as the definition of an entity that is “wholly owned or operated” by the hospital.

The Payment for Preadmission Services Final Rule (Federal Register, Vol. 63, No. 28, February 11, 1998, page 6864) addressed this definition.  The notice gives the following definition: “In general, if a hospital has direct ownership or control over another entity’s operations, then services provided by that other entity are subject to the 3-day window.  However, if a third organization owns or operates both the hospital and the entity, then the window provision does not apply.” 

The notice goes on to give several examples.  Key points of the examples are:

• A hospital-owned or hospital-operated physician clinic or practice is subject to the payment window provision.  The technical portion of preadmission diagnostic services performed by the physician clinic or practice must be included in the inpatient bill and may not be billed separately. A physician’s professional service is not subject to the window.
• If Hospital A owns Hospital B which owns Hospital C, then CMS would consider Hospital A as owning both Hospitals B and C and the payment window would apply.
• The payment window does not apply to situations in which both the admitting hospital and the entity that furnishes the preadmission services are owned or operated by a third entity. The payment window includes only those situations in which the entity furnishing the preadmission services is wholly owned or operated by the admitting hospital itself.
• The payment window does not apply to situations in which the admitting hospital is not the sole owner or operator of the entity performing the preadmission testing (such as independent laboratories that perform testing and bill Medicare directly for the testing).
• The admitting hospital must be the sole owner or operator of the entity performing the preadmission testing for the payment window to apply.  If the hospital is only part owner of the entity, the payment window would not apply.

The Federal Register notice can be viewed at FR Payment for Preadmission Services Final Rule.