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Hospitals are facing significant changes with the implementation of the 2014 IPPS Final Rule. Beyond medical necessity guidance, physician certification and recertification for a Part A inpatient admission and the Part A to Part B rebilling, the National Uniform Billing Committee (NUBC) developed and approved new discharge status codes that were finalized for use in the Final Rule.

An interesting twist is that these codes are to be used specifically for DRG 280 (Acute Myocardial Infarction, Discharged Alive with MCC), DRG 281 (Acute Myocardial Infarction, Discharged Alive with CC), DRG 282 (Acute Myocardial Infarction, Discharged Alive without CC/MCC) and DRG 789 (Neonates, Died or Transferred to Another Acute Care Facility).

DRGs 280, 281 and 282:

The finalized rule added one new code for this DRG group.

• New Code: 69 - Discharged/transferred to a designated disaster alternative care site
• Purpose: “Is to identify those patients diagnosed with an acute myocardial infarction (AMI) who were discharged/transferred to a designated disaster alternative care site alive.”
• Final Rule Comments: Most people that commented on this proposal were supportive of adding this new code and anticipate that it will be used infrequently.

The 15 remaining discharge status codes were proposed and finalized to identify planned readmissions after an AMI index admission. The new codes will replace codes already in place. In response to a comment CMS clarified that “at this time, these new discharge status codes are not related in any way to the Hospital Readmission Reduction Program and will not be taken into account in the readmission measures for that program.” The following table is a crosswalk from the current code to the new code. (This table can be found in the Final Rule on pages 50533 – 50534).

‍DRG 789:

Three new discharge status codes have been added to this DRG “to identify neonates that are transferred to a designated facility with a planned acute care hospital inpatient readmission.” The new codes can be found on page 50538 of the final rule and include:

Suggestions to prepare for the new discharge status codes:

• Work with your IT Department to ensure that your systems have been updated to reflect these changes,
• Provide physician education to help ensure that there is clear documentation in the Index admission that he/she is planning on readmitting the patient; and
• Educate HIM and Case Management staff.

The Medicare Hospital Conditions of Participation (CoPs) allow stamped signatures but Medicare conditions of payment do not allow stamped signatures and now there is an exception to the conditions of payment that does allow stamped signatures. Are you confused yet? Let’s see if we can sort this out.

Section 3.3.2.4 of the Medicare Program Integrity Manual addresses signature requirements for Medicare medical review purposes. This section states:

“For medical review purposes, Medicare requires that services provided/ordered be authenticated by the author. The method used shall be a handwritten or electronic signature. Stamped signatures are not acceptable.” (emphasis added)

This means that for services to be approved for payment by Medicare, they must contain a legible handwritten or electronic signature. Stamped signatures are generally not acceptable for Medicare payment purposes. However, under the Rehabilitation Act of 1973 a stamped signature will be accepted in the case of an author with a physical disability.

Change Request 8219 (MLN Matters Article MM8219) clarifies that CMS will permit the use of a rubber stamp for signature when the author has a disability that prevents him/her from physically signing documentation. These providers must be able to provide proof to the Medicare contractor of their inability to sign their signature due to their disability. By affixing the rubber stamp, the provider is certifying that they have reviewed the document. So if your hospital has a provider that uses a rubber stamp due to a physical disability remember to include the required proof of their inability to sign when you submit medical records containing their stamped signature to a Medicare review contractor.

Question:

If there is no stop time for an infusion, how is this to be reported?

Answer:

If there is no stop time for an infusion, it should be reported as an IV push.

However, be sure to look for other documentation that might support the duration of the infusion service, such as:

• Periodic drug titrations
• Nurse’s notes that the infusion is still in progress
• Nurse’s notes that the infusion continued at the time of transfer
• Documentation of the total hours infused (the most recent guidelines from Cahaba GBA indicate they will accept documentation of “total hours infused”)

Remember, the time the IV is discontinued or removed is not necessarily the same as the infusion stop time.

One thing that we all continue to hear about the transition to ICD-10-CM is the increased specificity of the codes. Asthma is one example of the increased specificity with ICD-10-CM. ICD-9-CM used an older classification for Asthma that is no longer relevant for treatment. Over the years the guidelines and classifications of Asthma have been revised. The latest update was released in 2007 by the National Asthma Education and Prevention Program which is coordinated by the National Heart, Lung and Blood Institute (NHLBI). ICD-10-CM has incorporated the classifications listed below into the new code set.

• Mild Intermittent Asthma (J45.2_)
• Symptoms occur less than two days per week and no interference with regular activities.
• Fewer than 2 days a month of night time symptoms
• Lung Function Tests (LFTs) are normal when they are not having an asthma attack
•  Mild Persistent Asthma(J45.3_)
• Symptoms occur more than 2 days per week, but not every day and there is interference of daily activities.
• Three to four times a month of night time symptom occurrences
• LFTs are normal when not having an asthma attack
•  Moderate Persistent Asthma (J45.4_)
• Symptoms occur daily requiring inhaled asthma medication and may restrict physical activity
• Night time symptoms occur more than once a week, but not every day
• Abnormal LFTs
• Severe Persistent Asthma (J45. 5_)
• Symptoms occur throughout the day with frequent severe attacks limiting the ability to breathe and perform physical activities
• Night time symptoms sometimes occur every night
• Abnormal LFTs

It is interesting to note that in ICD-9-CM Extrinsic Asthma codes to 493.0x and Intrinsic Asthma codes to 493.1x. However, in ICD-10-CM both Extrinsic/Intrinsic (allergic and nonallergic) are assigned to J45.909, Unspecified Asthma.

A discussion needs to take place with your physicians who treat Asthma patients to make them aware of the updated classifications so their documentation will reflect the medical complexity of their patients. Talking to your physicians now will hopefully reduce the amount of queries in the future.

Below are the links that contain the clinical information and updated guidelines for Asthma.

 http://www.nhlbi.nih.gov/guidelines/asthma/asthsumm.pdf

 http://www.webmd.com/asthma/tc/classification-of-asthma-topic-overview

With just 40 days until the 2014 Final Rule goes into effect, there are significant changes for hospitals to digest and develop a plan to educate key stakeholders. Ongoing improper payments for short-stay hospital claims prompted two of the biggest changes. These two changes are the Two-midnight Benchmark and the Two-midnight Presumption Medical Review Policies.

Two-midnight Benchmark: Patient Status Guidance for Admitting Physicians

Historically, the decision to admit a beneficiary as an inpatient was based on a 24 hour benchmark. In the Final Rule CMS specifies “that the 24 hours relevant to inpatient admission decisions are those encapsulated by 2 midnights. This distinction is consistent with our application of Medicare utilization days, which are based on the number of midnights crossed.”

The two-midnight benchmark is intended as guidance for Physicians in identifying those patients that are appropriate for inpatient admissions. Specific 2 midnight guidance includes:

• There are two indications for a Physician to write an inpatient admission order:
• If the Physician has the expectation that a beneficiary’s length of stay (LOS) will be longer than 2 midnights.
• If the beneficiary undergoes an inpatient only procedure. In this instance, CMS acknowledges that there are times when a beneficiary would not require a two-midnight stay after an inpatient only procedure and they indicate “that procedures on the OPPS inpatient-only list are always appropriately inpatient, regardless of the actual time expected at the hospital so long as the procedure is medically necessary and performed pursuant to a physician order and formal admission.”
   
• The decision to write an inpatient admission order should be based on:
• The Physician expectation that the beneficiary will require medical care beyond 2 midnights.
• Factors leading a Physician to write an inpatient admission order need to be clearly and completely documented in the medical record. Supportive documentation would include “complex medical factors such as history and comorbidities, the severity of signs and symptoms, current medical needs, and the risk of an adverse event.”
• Note: Factors that could result in an inconvenience to the beneficiary and/or family are NOT justification for an inpatient admission.
  
  
• Timing for the two-Midnight Benchmark:
• If the Physician does not expect that a beneficiary will need medical services beyond 2 midnights then the beneficiary should be placed in outpatient with observation services. “As new information becomes available, the physician must then reassess the beneficiary to determine if discharge is possible or if it is evident that an inpatient stay is required.”
• After one midnight has past, “the decision to admit becomes easier as the time approaches the second midnight, and beneficiaries in medically necessary hospitalizations should not pass a second midnight prior to the admission order being written.”
• Currently, the inpatient admission starts at the date and time that the admission order is written. This will continue to apply on or after October 1st.
  
  However, final rule guidance directs that the decision to admit is based on all of the time a beneficiary is in the hospital, including any initial outpatient services. “In other words, if the physician makes the decision to admit after the beneficiary arrived at the hospital and began receiving services, he or she should consider the time already spent receiving those services in estimating the beneficiary’s total expected length of stay.”
  
  Services that are to be considered toward the 2 midnight expectation include observation services, treatment in the emergency department and procedures performed in the operating room or other treatment areas.
  
  
• Example: A beneficiary spends one midnight as an outpatient observation or has routine recovery following an outpatient surgery. The following day the physician reassesses the beneficiary and expects that he will need another midnight of medical services. At this point the physician should take the time spent in outpatient observation or routine outpatient surgery recovery into consideration that the 2 midnight benchmark will be met and an inpatient admission order should be written.
  
  
• Potential Exceptions when Inpatient Admission May Not span two-midnights: 
• When a physician has an expectation that a beneficiary will remain in the hospital beyond 2 midnights and “the beneficiary improved more rapidly than the physician’s reasonable, documented expectation. Such unexpected improvement may be provided and billed as inpatient care, as the regulation is framed upon a reasonable and supportable expectation, not the actual length of care, in defining when hospital care is appropriate for inpatient payment.”
• “If an unforeseen circumstance, such as beneficiary death or transfer, results in a shorter beneficiary stay than the physician’s expectation of at least 2 midnights, the patient may be considered to be appropriately treated on an inpatient basis, and the hospital inpatient payment may be made under Medicare Part A.”

2-midnight Presumption: Guidance for Medical Reviewers

The 2-midnight presumption “directs medical reviewers to select claims for review under a presumption that the occurrence of 2 midnights after admission appropriately signifies an inpatient status for a medically necessary claim.” Under this revised policy, the main focus of review efforts will now be on inpatient short stays with a LOS of 1 midnight or less.

In addition to this shifted focus, CMS will also be monitoring for “evidence of systematic gaming, abuse or delays in the provision of care in an attempt to qualify for the 2-midnight presumption (that is, inpatient hospital admissions where medically necessary treatment was not provided on a continuous basis throughout the hospital stay and the services could have been furnished in a shorter timeframe).”

Reviews contractors will continue to assess claims that cross 2 midnights to ensure the medical necessity of services provided, that the hospitalization was medically necessary, to validate coding and documentation and when directed by the CERT Contractor or other governmental entity to do so.

• What Medicare Review Contractors are looking for in the Medical Record:
• A physician order for an inpatient admission to the hospital.
• Required elements of the physician certification.
• Medical documentation supporting that the decision to admit as an inpatient was reasonable and necessary.
• “Contractors will consider complex medical factors that support a reasonable expectation of the needed duration of the stay relative to the 2-midnight benchmark. Both the decision to keep the beneficiary at the hospital and the expectation of needed duration of the stay are based on such complex medical factors as beneficiary medical history and comorbidities, the severity of signs and symptoms, current medical needs, and the risk (probability) of an adverse event occurring during the time period for which hospitalization is considered.”
  
  
• Certification and Recertification of the need for Inpatient Admission:
• The physician must certify and recertify that inpatient services are medically necessary. CMS clarified that the relationship between the physician order and physician certification by adding language to 42 CFR 412.3(c) that “the physician order also constitutes a required component of the physician certification of the medical necessity of hospital inpatient services under Part 424 of this chapter.”
• Physicians need to be mindful that the admission order and physician certification are not conclusive proof that an admission was medically necessary but two pieces of information to be considered along with documentation in the medical record.
• CMS is requiring that for inpatient admissions the certification has to be completed, signed and documented in the medical record before the beneficiary is discharged.
• Guidance on the certification requirements can be found in the Code of Federal Register (CFR) at §424.10, §424.11 and §424.
• Note: CMS indicated in an August 15, 2013 Open Door Forum that they will be providing further guidance in the near future on how to satisfy this requirement.
  
  
• Reasonable and Necessary Admissions:
• Commenter’s of the Final Rule requested additional guidance as to what criteria would support a reasonable and necessary admission.
  
  CMS Response:
  “Medicare review contractors must abide by CMS policies in conducting payment determinations, but are permitted to take into account evidence-based guidelines or commercial utilization tools that may aid such a decision. We also acknowledge that this type of information may be appropriately considered by the physician as part of the complex medical judgment that guides his or her decision to keep a beneficiary in the hospital and formulation of the expected length of stay. As we update our manuals and take additional steps to implement this rule, we anticipate using our usual processes to develop and release subregulatory guidance such as manual instructions and education materials, which may include open door forums, regional meetings, correspondence and other ongoing interactions with stakeholders; and that our contractors will continue to involve local entities as they implement these rules.”
  
  
• Beneficiary Status Order:
• “The order serves the unique purpose of initiating the inpatient admission and documenting the physician’s (or other qualified practitioner as provided in the regulations) intent to admit the patient, which impacted its required timing. Therefore, we are specifying in new paragraph (d) of §412.3 that ‘The Physician order must be furnished at or before the time of the inpatient admission”
• An order to “Admit to ICU” or to “Admit” is no longer sufficient for an inpatient status order. The order “must specify the admitting practitioner’s recommendation to admit “to inpatient,” “as an inpatient,” “for inpatient services,” or similar language specifying his or her recommendation for inpatient care.”
• If Physicians and Review Contractors can consider time spent in outpatient towards the inpatient admission does that mean that this time can count towards the 3 day requirement for Skilled Nursing Facility (SNF) services?
• Per CMS, “We reiterate that the physician order, the remaining elements of the physician certification, and formal inpatient admission remain the mandated means of inpatient admission. While outpatient time may be accounted for in application of the 2-midnight benchmark, it may not be retroactively included as inpatient for skilled nursing care eligibility or other benefit purposes. Inpatient status begins with the admission based on a physician order.”

CMS held an Open Door Forum this past Thursday August 15th regarding the Final Rule. After participating in this call, it appears that there are more questions than answers. In fact, CMS encourages everyone to send them questions at  IPPSAdmissions@cms.hhs.gov. They indicated that they will be providing further guidance in the near future. Be assured that as additional guidance is provided we will be sharing it with you.

This seems to be the year for some big changes from Medicare. As providers are wondering what will happen with the major revisions to OPPS, Medicare finalized two policies relating to patient status in the final IPPS rule that are equally dramatic. The two interrelated policies are designed to reduce the frequency of inappropriate extended observation care and provide appropriate payment for necessary inpatient services. Next week, we will address the revisions concerning the admission and medical review criteria for hospital inpatient admissions. This week we examine the Part B Inpatient Billing requirements.

In the 2014 IPPS final rule, CMS finalized the requirements of the proposed rule for Part B inpatient billing when an inpatient admission is determined to not be medically necessary. When this rule becomes effective on October 1, 2013, it replaces the current Part A to B rebilling regulations under the Ruling that was published on March 13, 2013. The major significant differences of the Final Rule from the Ruling concern the allowance of Part B inpatient billing as the result of a hospital self-audit and the application of timely filing.

Here is a summary of the requirements of the Final Rule. For complete information, please refer to the IPPS final rule which is scheduled to be published in the Federal Registry on August 19th. Until that time a display copy can be viewed at 2014 IPPS Final Rule display copy.

If a hospital inpatient admission is determined to not be medically necessary after a patient’s discharge, the hospital may decide to submit a Part B inpatient claim for all services provided to the patient during the admission.

Who makes the determination the admission is not medically necessary?

• This decision could be made by CMS or a Medicare contractor as a denial, upon medical review of the inpatient claim. In this case, the hospital may decide to appeal the Part A denial or submit a Part B inpatient claim (a 12x type of bill).
• The decision could be made by the hospital as part of a utilization review “self-audit” in accordance with the Medicare Conditions of Participation UR guidelines. If the hospital determines an inpatient admission is not medically necessary after the patient’s discharge, the hospital may bill for Part B inpatient services.

What type of hospitals can submit Part B inpatient claims?

• All hospitals billing Part A services are eligible to bill Part B inpatient services, including short-term acute care hospitals paid under IPPS, hospitals paid under OPPS, LTCHs, IPFs, IRFs, CAHs, children’s hospitals, cancer hospitals, and Maryland waiver hospitals.

What services can be included on the Part B inpatient claim?

• All hospital services that were furnished to an inpatient (after the order for inpatient admission) and would have been reasonable and necessary if the patient had been treated as an outpatient, except for those services specifically requiring an outpatient status. The excluded outpatient services are diabetes self-management training services (DSMT), outpatient visits including ED visits, and observation services. Outpatient services provided prior to the admission order may be billed on a Part B outpatient claim (see below for more information).
• In the proposed rule, rehabilitative therapy services (physical therapy, occupational therapy, and speech language pathology services) were proposed to be excluded as strictly “outpatient” services. This proposal was not finalized; providers may continue to include therapy services on Part B inpatient claims. However, these therapy services will be subject to the Part B therapy caps, the therapy caps exception process, the manual medical review process, and all other requirements for payment and coverage of therapy services under Part B such as functional status reporting requirements.

When can outpatient services furnished during the 3-day (1-day for non-IPPS hospitals) payment window be billed separately?

• When there is no Part A coverage for the inpatient stay, services provided to the patient prior to admission may be separately billed to Part B as outpatient services (13x type of bill). This includes any outpatient visits or observation services provided prior to the admission order.

When can Part B inpatient claims be submitted?

• The “expanded” Part B inpatient services can only be billed when payment cannot be made under Part A because the inpatient admission was not reasonable and necessary. This new policy does not apply to other circumstances when there is no Part A payment, such as when a beneficiary exhausts or is not entitled to Part A benefits.
• A Part B inpatient claim cannot be submitted if there is a current Part A claim. Any corresponding Part A claims must be canceled by the provider or denied by Medicare and any pending appeals must be withdrawn by the provider. A Part A “no pay/provider liable” claim must be submitted first if the decision to bill Part B inpatient claim is made as part of a hospital “self-audit”. Once the Part A claim denial is posted in the claims history, the Part B claim(s) can be submitted.
• The final rule applies timely filing requirements for services with dates of admission on and after October 1, 2013. Both Part B inpatient and outpatient claims must be filed within one calendar year after the date of service.
• Medicare allowed an extension of the Ruling time frames - hospitals may follow the Part B billing timeframes established in the Ruling after the effective date of the final rule, provided (1) the Part A claim denial was one to which the Ruling originally applied; or (2) the Part A inpatient claims has a date of admission before October 1, 2013, and is denied after September 30, 2013 on the grounds that although the medical care was reasonable and necessary, the inpatient admission was not.

What information must be included on the Part B claims?

• The hospital must furnish information as may be necessary in order to determine the amounts due for the services billed on the Part B outpatient or inpatient claims.
• This means re-coding to itemize the outpatient services provided with HCPCS codes as required and diagnosis coding for the time period of the claim. Providers will need to consider appropriate coding to support the medical necessity of the Part B services furnished.

What if the hospital determines the inpatient admission is not medically necessary prior to the patient’s discharge?

• This new policy does not change the existing regulations concerning changing a patient’s status from inpatient to outpatient following the condition code 44 requirements.

Does the patient’s status change if a Part B inpatient claim is submitted and how does this affect utilization days and the skilled nursing facility (SNF) 3-day qualifying stay?

• The patient’s status remains inpatient because there is no provision to change a patient’s status after he or she is discharged from the hospital.
• Medicare will not deduct the days associated with the inpatient hospital stays billed under Part B from a beneficiary’s 150 utilization days when no Part A payment is made for that inpatient hospital stay.
• The 3-day inpatient hospital stay which qualifies a beneficiary for “post-hospital” SNF benefits does not have to be covered by Medicare, as long as it is does not represent a “substantial departure from normal medical practice”. This means that most denied hospital inpatient stays will meet the requirements to qualify the patient for SNF coverage because the care was medically necessary, although the admission was not. An exception would be if the admission was solely for the purpose of qualifying the beneficiary for the SNF stay and therefore was a substantial departure from normal medical practice.

What is the patient’s liability and must hospitals bill the patient for their liability?

• If a Part A admission is denied as not reasonable and necessary and the patient is not liable under section 1879 of the Act, the hospital must refund Part A deductible and co-payment amounts paid by the patient and other insurers.
• The patient (Medicare beneficiary) is responsible for applicable deductible and co-payment amounts for covered Part B services and the cost of services excluded from coverage such as self-administered drugs.
• If the beneficiary is not enrolled in Part B, hospitals should bill Part B to ensure the claim enters the coordination of benefits cross-over process in the event the beneficiary has coverage under a supplemental or secondary insurance plan.
• The issue of whether hospitals are required to bill the beneficiaries for their Part B liabilities is governed by the beneficiary inducement and anti-kickback laws and falls under the jurisdiction of the OIG.

May appeals adjudicators require payment under Part B if a Part A denial is upheld?

• No, appeals adjudicators may only consider the claim that is before them and may not order payment for items or services that have not yet been billed.

I realize this is a lot of information to absorb. You may want to print this article to use as a resource for future questions. MMP plans to present a webinar prior to October 1st to address both the Part B inpatient billing and the new admission criteria. Be on the lookout in the Wednesday@One for> announcements about this upcoming webinar.

This material was compiled to share information. MMP, Inc. is not offering legal advice. Every reasonable effort has been taken to ensure the information is accurate and useful.

CMS, Members of Congress and others have been expressing concerns about observation stays and short inpatient stays for Medicare beneficiaries. Three main concerns being voiced include:

• Beneficiaries paying more for long observation stays than if they had been an inpatient,
• Beneficiaries not meeting the three day qualifying inpatient stay requirement for skilled nursing facility care; and
• Improper payment for short inpatient stays when the beneficiaries could have been treated in a lesser level of care such as outpatient.

The Office of Inspector General (OIG) recently released a report in response to these concerns based on 2012 claims data. To help our clients better understand the potential payment differenced in patient status we have provided the following comparison of outpatient stays and short inpatient stays.

‍Report Drill Down:

Observation Stays:

• Medicare paid $2.6 billion which averages $1,741 per stay.
• Beneficiaries paid $606 million which averages $410 per stay.
• The top 10 most common reasons for observation stays should not be a surprise to anyone and include chest pain, digestive disorders, fainting, signs & symptoms, nutritional disorders, dizziness, irregular heartbeat, circulatory disorders, respiratory signs & symptoms and medical back problems.
• Observation stays typically begin with treatment in the emergency department.
• The most common operating procedure was coronary stent insertion.

Long Outpatient Stays (stays lasting at least 1 night but had no observation services coded):

• Some of these stays did include observation services that were not coded by the hospital as they are not always paid a separate amount for coding claims as observation stays.
• This set of beneficiaries had similar characteristics to the observation stays i.e. most stays began in the emergency department and beneficiaries were most commonly treated for chest pain and digestive disorders.

Short Inpatient Stays (stays lasting less than 2 nights):

• This group of beneficiaries on average was more costly to Medicare and the Beneficiary.

1. Medicare paid $5.9 billion which averages to $5,142 per stay.
2. Beneficiaries paid $831 million which averages to $725 per stay.

• Ninety percent of this group spent 1 night in the hospital while the remaining 10% spent less than 1 night in the hospital.
• Similar to the other two stay types, these stays began in the emergency department, were most commonly treated for chest pain and 6 of the 10 most common reasons for a short inpatient stay were also among the 10 most common reasons for observation stays (chest pain, digestive disorders, fainting, nutritional disorders, irregular heartbeat and circulatory disorders).

Concerns and Report Conclusions:

Concern: Beneficiaries paying more for long observation stays than if they had been an inpatient

• Short Inpatient Stays in 2012 were more costly to the beneficiary when being treated for the same reason.
• Two exceptions where the cost was more for an observation stay were for coronary stent insertions and circulatory disorders.
• Six percent of all observation stays paid more than the inpatient deductible with a smaller subset paying more than two times the inpatient deductible.

Concern: Beneficiaries not meeting the three day qualifying inpatient stay requirement for skilled nursing facility care

• There were 617,702 hospital stays that lasted at least 3 nights that did not include 3 inpatient nights and therefore did not qualify for SNF services.
• While not mentioned in this report, a point of interest is that similar legislation has recently been introduced in the House (H.R. 1179) and the Senate (S.569) which would amend the law to allow for time beneficiaries spent in the hospital under observation services to count toward the required three-day hospital stay for coverage of skilled nursing facility (SNF) care.

Concern: Improper payment for short inpatient stays when the beneficiaries could have been treated in a lesser level of care such as outpatient.

• Short inpatient stays in 2012 were more costly to Medicare than observation stays. This validates the concern that there is improper payment for short inpatient stays when the beneficiaries could have been treated in a lesser level of care such as outpatient.
• Use of short inpatient stays varied widely among hospitals.

Moving Forward:

Proposed Changes to Payment Policies for Inpatient and Outpatient Stays

This report touches on two payment issues that occurred earlier this year. The first issue was announced in April when CMS made a proposal through a Notice of Proposed Rulemaking (NPRM) that would have a tremendous effect on how hospitals bill for observation and short inpatient stays. If implemented, “CMS contractors would presume that inpatient hospital stays lasting 2 nights or longer were reasonable and necessary and would qualify for patient as inpatient stays. Conversely, CMS contractors would presume that stays lasting less than 2 nights would not qualify for payment as inpatient stays and instead would be paid for as outpatient stays.” The OIG believes that their report findings may be useful as “our results further indicated that, under the policies proposed in the NPRM, some hospitals would likely follow the previsions and continue to bill these as outpatient stays; other hospitals – given strong financial incentives and few barriers – would likely not follow the provision and would admit beneficiaries as inpatients as soon as possible to meet the 2-night presumption.”

In March the second issue announced was that “CMS revised its Part B inpatient billing policy to allow for all hospital services that were provided and would have been reasonable and necessary if the beneficiary had been treated as an outpatient.”

Since the release of this OIG report, CMS released the fiscal year 2014 IPPS Final Rule last Friday August 2nd. Both proposals are now implemented in the Final Rule. We will be addressing the IPPS changes in the coming weeks

The findings in this report also “raise concerns about SNF services” and the OIG advises that “CMS should consider how to ensure that beneficiaries with similar post-hospital care needs have the same access to and cost-sharing for SNF services.”

On a final note, you should be aware that the OIG plans to “refer to CMS in a separate memorandum the SNFs that received $255 million in inappropriate payments so that CMS can look into recoupment.” Unfortunately, beneficiaries could be receiving unexpected bills for SNF services at some point in the not too distant future. The entire report can be accessed at http://oig.hhs.gov/oei/reports/oei-02-12-00040.pdf.

One of the frustrations of dealing with the overwhelming volume of reviews by Medicare contractors is often the lack of guidance from Medicare on how to handle a particular issue. In June, CMS released several MLN Matters SE articles concerning some of the findings of CERT and Recovery Auditors. These articles describe the issue and the corrective actions necessary for providers to resolve the issue. Although some of these are obvious resolutions – such as, only one cataract removal per eye – I wanted to point out the information on Mohs surgery and also make you aware of some of the other issues that are addressed.

The correct billing of Mohs Micrographic Surgical (MMS) services affects both hospitals and physicians and recent Recovery Auditor reviews have revealed errors in the billing of MMS. Medicare will only reimburse for MMS services when the Mohs surgeon acts as both surgeon and pathologist. Providers should not bill Medicare for these procedures if preparation or interpretation of pathology slides is performed by a physician other than the Mohs surgeon.

Mohs surgery is a two-step process where the tumor is removed in stages with histologic evaluation after each stage until all margins are clear. The performing physician serves as both surgeon and pathologist, performing both the excision and histologic evaluation of the specimen. The CPT codes for MMS (CPTs 17311-17315) should not be billed with separate CPT codes for the histologic evaluation of the tumor tissue removed. If the histology is performed by another physician, the excision should be billed with the standard malignant tissue excision codes (CPT 11600-11646) and the histologic evaluation with the surgical pathology code (CPT 88305).

Other Medicare requirements for coverage of Mohs surgery include:

• The surgery must be of a higher degree of complexity that most skin cancers, such as poorly defined borders, possible deep invasion, prior irradiation or when maximum conservation of tumor-free tissue is important.
• Only physicians (MDs or DOs) specifically trained and highly skilled in MMS techniques and pathological identification may perform Mohs surgery.
• Medical record documentation should support the medical necessity of the procedure including the location, number and size of the lesions; the number of stages; the number of specimens per stage; and a detailed description of the histology of the specimens.

For complete information, please read MLN Matters Article SE1318.

Issues addressed by other MLN Matters SE articles include:

• Appending modifiers to duplicate services billed for the same patient on the same date – SE1314.
• Billing the correct drug units by converting dosage of drugs given (such as milligrams) to units based on HCPCS description – SE1316.
• Billing cataract removal only once per eye – SE1319.
• Being sure to include the code for the primary service when billing add-on codes – SE1320.
• Appropriate bundling of outpatient services onto the inpatient claim under the 3-day window billing rule – SE3124.

Last month we wrote about Saint Thomas Hospital in Nashville, TN being the first hospital that the Office of Inspector General (OIG) extrapolated their Medicare Compliance Review findings. Since then they have done it again. This time Baptist Medical Center South in Montgomery, Alabama was subjected to extrapolation. This resulted in an increase in their amount to be refunded from an initial $242,514 to $1,784,982.  

OIG Medicare Compliance Reviews by the Numbers:

In addition to extrapolating findings what else is occurring in these Medicare Compliance Reviews?

After completing an extensive review of all reviews to date, here is a list of interesting facts by the numbers:

• One: The number of hospitals with no identified overpayments during a review
• Regional Medical Center at Memphis, Tennessee
• One: The number of hospitals where the OIG identified overpayments as well as potential underpayments to the hospital during the review.
• University of Alabama Hospital at Birmingham, Alabama
• Two: The number of hospitals who have now had their Medicare Compliance Review Findings extrapolated.
• Saint Thomas Hospital in Nashville, Tennessee, and;
• Baptist Medical Center South in Montgomery, Alabama
• Three: The number of hospitals that have been revisited for additional reviews by the OIG.
• Fletcher Allen Health Care, Inc. in Burlington, Vermont,
• Boston Medical Center in Boston, Massachusetts; and
• Tufts Medical Center in Boston, Massachusetts.
• Eleven: The highest number of hospitals within a single state to undergo an OIG Medicare Compliance Review (Massachusetts).
• Twenty-Six: Number of states that have had at least one hospital subject to an OIG Medicare Compliance Review.

• Sixty-Three: The total number of Medicare Compliance Reviews completed and reported on the OIG website as of July 17, 2013.
• Eight in 2011, Thirty-Nine in 2012 and Sixteen thru July 17 of 2013
• $12,222: The lowest overpayment amount identified to date was at Sanford University of South Dakota Medical Center.
• $2,244,649: The highest overpayment amount identified to date was at Cedars Sinai Medical Center. Note, this amount was not an extrapolated amount.
• $26,979,529: The amount identified as overpayments for all hospitals to date requiring payback to the Contractor without extrapolation being applied.
• $29,420,885: The amount identified as overpayments for all hospitals to date requiring payback to the Contractor with extrapolation being applied to Saint Thomas and Baptist Medical Center South.

Has Your Hospital Been Subject to an OIG Medicare Compliance Review?

Clicking the link below will show a table of all Medicare Compliance Reviews displayed on the OIG website to date. This table includes a link to the OIG reports, the “risk areas” looked at in the audit and the amount the OIG recommended the hospital refund.

OIG Medicare Compliance Reviews as of July 17, 2013

This material was compiled to share information. MMP, Inc. is not offering legal advice. Every reasonable effort has been taken to ensure the information is accurate and useful.

Medicare’s Recovery Audit program affords a variety of ways for hospitals to lose money. But it makes it harder to accept when you don’t have a process to deal with the issues. In this article we look at an inpatient issue that offers such challenges.

When we think of Recovery Auditor reviews of hospital inpatient records, we normally think of DRG Validation reviews and the ever-so-popular Medical Necessity reviews. But the Recovery Auditors also review inpatient records for other issues.

The topic addressed here is actually several different issues, all dealing with the correct assignment of the patient’s discharge disposition status. These include:

• reviews of acute care hospital to hospital transfers receiving an overpayment due to the assignment of an incorrect discharge status code,
• reviews of overpayments when a patient receives post-acute care but is coded as a discharge to home, and
• underpayment reviews for patients coded as a transfer to a post-acute care setting who never actually receive post-acute care.

Some of the errors may be the result of an error in code assignment, but a lot of these are due to either incomplete documentation concerning the patient’s post-discharge plans or circumstances that change after the patient is discharged.

So what can a hospital do to prevent receiving an improper payment, either over or under? First make sure physicians, case managers and discharge planners document clearly in the medical record the plans for the patient post-discharge. Also develop an avenue for coders to follow up on discharge status if the documentation in the record is unclear or conflicting. Now the harder part is how to address those patients that do not end up where they were planned to go. Some hospitals have implemented systems to verify the actual post-discharge care the patient receives. Examples of this would be contacting patients scheduled to begin home health care after discharge to see if this actually occurred or contacting skilled nursing facility to see if the patient was actually admitted. Medicare recently addressed post-acute care transfer underpayments in an MLN Matters article, SE1317.

This can be a difficult issue and contains financial risks for hospitals. Hopefully, being aware of what the issues are, understanding the regulations and having a plan in place will help reduce risks for hospitals.

This material was compiled to share information. MMP, Inc. is not offering legal advice. Every reasonable effort has been taken to ensure the information is accurate and useful.