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2/26/2019
MEDICARE TRANSMITTALS – RECURRING UPDATES
April 2019 Quarterly ASP Medicare Part B Drug Pricing Files and Revisions to Prior Quarterly Pricing Files
International Classification of Diseases, 10th Revision (ICD-10) and Other Coding Revisions to National Coverage Determination (NCDs)
NCD coding changes as the result of newly available codes, coding revisions to NCDs released separately, or coding feedback received.
Healthcare Provider Taxonomy Codes (HPTCs) April 2019 Code Set Update
OTHER MEDICARE TRANSMITTALS
Processing Veterans Administration (VA) Inpatient Claims Exempt from Present on Admission (POA) Reporting
The HAC-POA payment provision required by the Deficit Reduction Act of 2005 (DRA) applies only to Inpatient Prospective Payment System (IPPS) hospitals. Therefore, VA hospitals are exempt from reporting POA and End of POA Indicators.
Updates to Reflect Removal of Functional Reporting Requirements and Therapy Provisions of the Bipartisan Budget Act of 2018
Updates both the Medicare Benefit Policy Manual and Medicare Claims Processing Manual to reflect recent policy revisions including: (a) the repeal of the application of the outpatient therapy caps and the retention of the therapy cap amounts as thresholds of incurred expenses above which claims must include a modifier to confirm services are medically necessary as shown by medical record documentation; and, (b) the discontinuation of the functional reporting requirements.
Ensuring Organ Acquisition Charges Are Not Included in the Inpatient Prospective Payment System (IPPS) Payment Calculation
To prevent potential overpayments, Medicare’s Fiscal Intermediary Shared System (FISS) will deduct organ acquisition charges billed with revenue codes 081X from the total covered charges prior to sending an inpatient Type of Bill (TOB) 11X claim to the IPPS pricer for any date of service processed on or after July 1, 2019.
Revising the Remittance Advice Messaging for the 20-Hour Weekly Minimum for Partial Hospitalization Program Services
Common Working File (CWF) Provider Queries National Provider Identifier (NPI) Verification
The Common Working File (CWF) will require verification of the NPI similar to the HETS when Medicare Part A providers request Medicare beneficiary eligibility and entitlement data via the CWF provider inquiry screens.
Processing Instructions to Update the Standard Paper Remit (SPR)
Instructs MACs to update their systems to ensure that SPRs mailed after July 1, 2019, mask the Health Insurance Claim Number (HICN), so the Social Security Number (SSN) does not show.
Implementation to Exchange the List of Electronic Medical Documentation Requests (eMDR) for Registered Providers via the Electronic Submission of Medical Documentation (esMD) System
Makes the changes required to send Additional Documentation Request (ADR) letters to participating providers via the (esMD) system. A CR to effectuate the exchange of ADR letters to registered providers via the esMD system will be released at a later date.
Update to Mammography Editing
Modifies existing editing to ensure only revenue codes 0401, 0403, 0520, 0521, 096, 097, or 098 are billed on claims containing mammography codes 77065, 77066, or 77067.
https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2019Downloads/R4225CP.pdf
Implementation of the Skilled Nursing Facility (SNF) Patient Driven Payment Model (PDPM)
Effectuates changes to the SNF Prospective Payment System (PPS) that were finalized in the FY 2019 SNF PPS Final Rule (83 FR 39162).
Local Coverage Determinations (LCDs) – REVISED
Multiple revisions of this transmittal that changes the LCD process.
Modification of the MCS Claims Processing System Logic for Modifier 59, XE, XS, XP, and XU Involving the National Correct Coding Initiative (NCCI) Procedure to Procedure (PTP) Column One and Column Two Codes
Medicare will allow modifiers 59, XE, XS, XP, or XU on column one and column two codes to bypass the edit.
Update to the Internet-Only-Manual (IOM) Publication (Pub.) 100-04, Chapter 32, Section 12.1
Removes diagnosis codes from and adds diagnosis codes to the list of valid diagnosis codes for Counseling to Prevent Tobacco Use.
https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2019Downloads/R4237CP.pdf
MEDICARE COVERAGE
Update to Intensive Cardiac Rehabilitation (ICR) Programs
Effective February 9, 2018, coverage in an ICR is expanded to include stable, chronic heart failure defined as patients with left ventricular ejection fraction of 35 percent or less and New York Heart Association (NYHA) Class II to IV symptoms despite being on optimal heart failure therapy for at least 6 weeks.
Supervised Exercise Therapy (SET) for Symptomatic Peripheral Artery Disease (PAD)—Clarification of Payment Rules and Expansion of International Classification of Diseases Tenth Edition (ICD-10) Diagnosis Codes
CMS proposes Coverage with Evidence Development for Chimeric Antigen Receptor (CAR) T-cell Therapy
Decision Memo for Vagus Nerve Stimulation (VNS) for Treatment Resistant Depression (TRD) (CAG-00313R2)
CMS will cover FDA approved vagus nerve stimulation (VNS) devices for treatment resistant depression (TRD) through Coverage with Evidence Development (CED) when offered in a CMS approved, double-blind, randomized, placebo-controlled trial with a follow-up duration of at least one year with the possibility of extending the study to a prospective longitudinal study when the CMS approved, double-blind, randomized placebo-controlled trial has completed enrollment, and there are positive interim findings.
National Coverage Determination (NCD) 20.4 Implantable Cardiac Defibrillators (ICDs) – REVISED
Implementation date changed from February 26, 2019 to March 26, 2019.
https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2019Downloads/R213NCD.pdf
MEDICARE EDUCATIONAL RESOURCES
Medicare Fast Facts
Medicare Fast Facts resources this month include:
- Medicare Hospital Claims: Avoid Coding Errors
- DME Proof of Delivery Documentation Requirements
OTHER MEDICARE UPDATES
New App Displays What Original Medicare Covers
Allows people with Original Medicare, caregivers and others to quickly see whether Medicare covers a specific medical item or service.
https://www.cms.gov/newsroom/press-releases/new-app-displays-what-original-medicare-covers
Emergency Triage, Treat, and Transport (ET3) Model
A voluntary, five-year payment model that will pay participating ambulance suppliers and providers to 1) transport an individual to a hospital emergency department (ED) or other destination covered under the regulations, 2) transport to an alternative destination (such as a primary care doctor’s office or an urgent care clinic), or 3) provide treatment in place with a qualified health care practitioner, either on the scene or connected using telehealth.
https://www.cms.gov/newsroom/fact-sheets/emergency-triage-treat-and-transport-et3-model
2/18/2019
There is a book and movie about World War I from around 1930 titled “All Quiet on the Western Front.” The title means there was no enemy activity occurring on the western boundary of the homeland troops. The problem in war, and sometimes in other areas of life, is that you have to be aware of all fronts. The enemy may sneak around and come at you from the North, the South, or even from behind. This reminds me of this month’s report on Medicare medical review activity. Though Medicare is not always the enemy, their medical reviews can sometimes feel like an attack and providers definitely have monies at risk.
The year is starting off mostly quiet on the Medicare Administrative Contractor (MAC) Targeted Probe and Educate (TPE) front. The only new activity for the first of the year comes from Novitas, the MAC for Jurisdictions H and L. You will find those issues listed in the table at the end of this article. In contrast, the Recovery Auditors (RACs) appear to be starting off the New Year with a bang, posting four new complex reviews for hospital services since the first of the year. Here is a listing of the new RAC approved issues and some details of what the RACs will be looking for in your documentation.
Hyperbaric Oxygen Therapy (HBOT) for Diabetic Wounds
This is a review to ensure HBOT meets Medicare medical necessity requirements. The coverage of HBO is defined in National Coverage Determination (NCD) 20.29. Medicare coverage for diabetic wounds requires the following:
- Patient must have type I or II diabetes and wound(s) of the lower extremities due to diabetes,
- The wound must be a Wagner Grade 3 or higher,
- The patient must have failed an adequate course of standard wound therapy – specifically, there must be no measurable signs of healing for at least 30 –days of treatment with standard wound therapy (such as, vascular status assessment and correction if possible, optimization of nutritional status and glucose control, debridement and dressings, off-loading and infection treatment),
- HBO must be used in addition to continuing standard wound therapy.
The medical record must contain documentation supporting all of the above requirements, including documentation the patient is diabetic, the Wagner grade of the wound, details of the standard wound therapy that was tried and failed, and evidence that there were no measurable signs of healing for at least 30 days.
In addition to the NCD, three MACs (First Coast JN, and Novitas JH and JL) have Local Coverage Determinations (LCDs) for HBO.
Complex Medical Necessity Panniculectomy
The following verbiage comes from the Noridian JE LCD L35163 and is one of the resources of additional information for this issue:
“Abdominal lipectomy/panniculectomy is surgical removal of excessive fat and skin from the abdomen. When surgery is performed to alleviate such complicating factors as inability to walk normally, chronic pain, ulceration created by the abdominal skin fold, or intertrigal dermatitis, and the above symptoms have been present for at least three months and are refractory to usual standard medical therapy, such surgery may be considered reconstructive. Preoperative photographs may be required to support justification and should be supplied upon request.”
If the panniculectomy is for cosmetic reasons, it is not medically necessary and therefore not covered by Medicare. Also, a panniculectomy performed in conjunction with an open abdominal surgery or incidental to another procedure is not separately coded per Coding Guidelines. In addition to the Noridian JE LCD quoted above, Novitas (JH/JL), Palmetto (JJ/JM), WPS (J5/J8), and Noridian JF also have cosmetic surgery LCDs.
Cryosurgery of the Prostate Medical Necessity
Per NCD 230.9 and section 180 of Chapter 32 of the Medicare Claims Processing Manual (100-04), Medicare covers cryosurgery of the prostate gland for:
- Primary treatment of patients with clinically localized prostate cancer, Stages T1 – T3 (diagnosis code is 185 or C61– malignant neoplasm of prostate).
- Salvage therapy for patients:
- Having recurrent, localized prostate cancer;
- Failing a trial of radiation therapy as their primary treatment; and
- Meeting one of these conditions: State T2B or below; Gleason score less than 9 or; PSA less than 8 ng/ml.
The RACs will looking for records that do not meet Medicare’s medical necessity guidelines.
Medical Necessity Vertebroplasty and Kyphoplasty
This review will be looking at correct coding as well as medical necessity. Most MACs have an LCD for vertebroplasty and kyphoplasty.
According to the Palmetto LCD, “The decision for treatment should be multidisciplinary and consider such factors as the extent of disease, the underlying etiology, the severity of the pain, the nature of any neurologic dysfunction, the outcome of any previous non-invasive treatment attempts, and the general state of the patient’s health.”
So, while the MAC TPE front is quiet, there is a lot of review activity on the RAC front.
Debbie Rubio
2/18/2019
On January 31, 2019, Palmetto GBA, the Medicare Administrative Contractor (MAC) for Jurisdictions J and M, published the following instruction regarding coding for therapy records.
Yes, you may use the therapist intervention notes to help support your codes. You are allowed to do that for Medicare purposes. Make sure that the physician is informed on the therapist activities and you will still need to forward those notes to the physician at some point.
This is not the gift it may originally seem and I want to offer some cautions associated with this instruction. First, what would be the benefit of doing this? The MACs may have edits in place for therapy claims that require specific diagnoses in order to be paid. When physicians/practitioners order therapy services, they may list the medical diagnosis on the order, for example, “status post meniscectomy for left lateral meniscus tear.” But the therapist is not technically treating the meniscus tear or the meniscectomy, but the associated functional deficits caused by the repair. (I had one of these, so I know!) They are treating the joint pain, swelling, limited range of motion, gait issues, etc. associated with the surgery. The therapist describes these functional diagnoses in the evaluation and plan of care, with objective measures and subjective observations supporting these limitations. This makes it easy to see why coding from the therapist’s documentation makes sense to more accurately describe the “diagnosis” for the therapy services. And if edits are indeed in place for the payor, these diagnoses are more likely to “pass” the edits for a functional diagnosis and allow your claim to be paid.
But most state laws do not allow therapists to diagnose patients, so your coders will have some heartburn with this instruction. And do NOT let this instruction make your therapists think this makes it acceptable to delay obtaining the physician/practitioner’s signature on the plan of care. Medicare requires the patient to be under the care of a physician/practitioner and their certification of the plan of care. This certification shows the physician/NPP approves of the therapist’s plan and gives permission for the therapist to move forward with the approved plan. Therapists do not have to wait on the signature to begin treatment, but a signature certifying the plan is required for Medicare payment and Medicare expects this to be done in a timely manner, i.e. as soon as possible after the plan is established. This means that if the record is audited by a Medicare reviewer, there must be a plan of care certification signed by the patient’s physician/practitioner in the medical record. If this documentation is missing, Medicare will deny the claim.
How likely is it your therapy claim will be reviewed by Medicare? That is hard to know, but currently 7 of the 12 MAC Jurisdictions have therapy services as a topic of their Targeted Probe and Educate (TPE) reviews, and 8 of the 12 MACs have a Local Coverage Determination and/or Coverage Article addressing therapy services. I would say the odds are not looking good for escaping scrutiny.
Debbie Rubio
2/12/2019
In January, the Supplemental Medical Review Contractor (SMRC) Noridian Healthcare Solutions, LLC (Noridian) finally posted current SMRC projects related to inpatient claims as depicted in the following table.
So what about Project’s 01-001, 01-002 and 01-003? Noridian notes on their website that “at CMS discretion, not all projects will be made available on this website.” Spinal Fusions have been subject to audit for several years now. This article focuses on Spinal Fusions. More specifically we will look at prior Spinal Fusion audits, the SMRCs Medical Review Announcement, why new audits may focus on DRG Validation, what other Medicare Contractors are auditing Spinal Fusions, and next steps for hospitals.
A Look Back at Spinal Fusions Audits
Cahaba, GBA
Prior to calendar year 2018 Cahaba, GBA was the Medicare Administrative Contractor (MAC) for Jurisdiction J which includes Alabama, Georgia and Tennessee. In October 2012 they posted probe review results of MS-DRG 460. Out of 306 claims submitted 172 were denied. Cahaba indicated the documentation they would expect to find would include:
- Pre-procedure radiologic findings or mention of the radiology report results in the medical record,
- Failed conservative measures/treatment prior to surgery,
- Documentation of duration of pain and/or impairment of function,
- Physical exam documenting the functional pathology, and
- Documentation of instability if applicable.
Strategic Health Solutions
Strategic Health Solutions, LLC (Strategic), the first SMRC Contractor, completed a review of Spinal Fusions in year one of their contract. Strategic noted that analysis of claims data for calendar years 2012 and 2013 indicated a significant increase in billing and payment for MS-DRGs 459 and 460 (Spinal Fusion with and without MCC respectively). As a result of this analysis, Strategic selected a random sample of 2,000 claims representing 125 unique facilities with dates of service June 1, 2012 through May 31, 2013. The overall outcome of this audit is depicted in the following table:
July 2015 Medicare Quarterly Compliance Newsletter
The July 2015 edition the newsletter included findings from a Comprehensive Error Rate Testing (CERT) special study of orthopedic surgeon’s claims for fusion of the lumbar spine. This article provided examples of improper payments due to insufficient documentation. In one example the physician had submitted an operative note. It was what was not submitted that caused the improper payment. Specifically there no visit notes, consultant’s notes, lumbar spinal imaging results, documentation of prior conservative measures attempted or completed or documentation of a condition that would have made conservative treatment inappropriate.
CMS stated “it is important to note that supplier prepared statements and physician attestations that conservative treatment measures were completed do not by themselves provide sufficient documentation of medical necessity, even if signed by the ordering physician. For example, a claim was scored an insufficient documentation error when a physician dictated the following generalized statement as part of an operative note without providing any supporting documentation, “the patient failed conservative measures and has met all of the Medicare requirements.”
Palmetto GBA Jurisdiction M Review
In 2015 and 2016 Palmetto conducted pre-payment service specific targeted medical reviews on MS-DRG 460. By the eighth quarter of targeted medical review this review had been discontinued in North Carolina, Virginia and West Virginia based on “acceptable Edit Effectiveness results.” In February 2017 they posted results for South Carolina’s eighth quarter of targeted medical reviews for claims processed October 1, 2016 through December 2016. Twenty three of forty three claims were completely or partially denied which represented $560,903.53 dollars denied and a charge denial rate of 50.8%. Examples of “granular detail” of reasons for denial included the following:
- No documentation of conservative measures/treatments failed or no documentation of neurological impairment-spinal stenosis.
- No documentation of pain impacting the functional ability of beneficiary despite conservative treatment.
- No X-ray, CT or MRI results submitted that support advanced degenerative changes, mechanical instability, and deformity of the lumbar spins or neural compression that would require this type of procedure.
For those closely involved with documentation requirements for total hip and knee procedures, the expected documentation requirements by Cahaba, the CERT and Palmetto should hopefully sound vaguely familiar.
Noridian Medical Review Announcement
Noridian’s Medical Review announcement notes this is a post-payment review of claims for Part A services billed on dates of service from January 1, 2017, through December 31, 2017. They note that prior review activities have focused on MS-DRGs 459 and 460 (Spinal Fusion except cervical with and without MCC respectively) and “further medical review activities were anticipated.”
Documentation Requirements
Specific documentation requirements being requested in the Additional Documentation Request (ADR) is in line with prior Spinal Fusion audits and includes the following:
- Office notes/hospital record, including history and physical by the attending/treating surgeon
- Documentation of the history and duration of unsuccessful conservative therapy (non-surgical medical management as applicable)
- Records sufficient to document failed non-surgical medical management to include, but not limited to the following:
- Documentation to support activity modifications and exercises or explanation why these could not be completed
- Documentation and clinical notes to support supervised skilled physical therapy (PT) and/or occupational therapy (OT) for support of activities of daily living (ADLs) diminished despite completing a plan of care or explanation why these could not be completed
- Documentation to support the trial of anti-inflammatory medications, oral or injection therapy as appropriate, and analgesics, or explanation why these could not be used
- Interpretation and reports for X-rays, MRI’s, CT’s, etc.
- Medical clearance reports (as applicable)
- Complete operative report(s)
The review announcement also includes references and resources including two Local Coverage Determinations (LCDs) for Spinal Fusion.
- The first LCD is L33382 Lumbar Spinal Fusion for Instability and Degenerative Disc Conditions. This is First Coast Service Options, Inc. LCD. They are the MAC for Jurisdiction N which includes Florida.
- The second LCD is L35942 Surgery: Fusion for Degenerative Joint Disease of the Lumbar Spine. This was a Cahaba GBA LCD for Alabama, Georgia and Tennessee that was active during the date range of claims being reviewed.
Spinal Fusion and MS-DRG Validation Reviews
In addition to medical necessity audits, changes in the FY 2019 IPPS Final Rule could well prompt Spinal Fusion MS-DRG validation reviews. Spinal Fusion procedures require some type of device to facilitate fusion of the vertebral bones (i.e. instrumentation with bone graft or bone graft alone.) When an ICD-10-PCS code includes a device value of “Z” this means that “No Device” was used in the procedure. CMS identified ICD-10-PCS codes describing spinal fusion with a device value of “Z” meaning they were clinically invalid codes for Spinal Fusions.
CMS analyzed the FY 2017 MedPAR File and found that “invalid spinal fusion procedures represented approximately 12% of all discharges across the spinal fusion MS-DRGs.” They also found this group of claims to have a longer length of stay and higher average costs as reflected in the following summary table for spinal fusion procedures provided by CMS in the FY 2019 IPPS Final Rule.
As a result of their review, CMS deleted 99 spinal fusion ICD-10-PCS procedure codes with a device value of “Z” effective October 1, 2018. CMS plans to continue to collaborate with the American Hospital Association (AHA) through Coding Clinic and provide further education on spinal fusion procedures and proper reporting of procedure codes.
Who else is Reviewing Spinal Fusion MS-DRGs?
CGS Administrators, LLC (CGS)
CGS, the Jurisdiction J MAC for Kentucky and Ohio, currently has edits in place to review Spinal Fusion MS-DRGs 456-460 as part of their Targeted Probe & Educate Process.
Recovery Auditors
All of the Recovery Auditors have received approval to perform complex inpatient hospital MS-DRG Coding Validation reviews. With the issues noted by CMS in the FY 2019 IPSP Final Rule there is a high possibility that they may include spinal fusions in their list of audits.
Moving Forward
Noridian Resource
While Noridian as the SMRC Contractor is conducting post-payment reviews of Spinal Fusions (MS-DRGs 459 and 460), Noridian is also the MAC for Jurisdictions J-E (California, Hawaii, Nevada, American Samoa, Guan, Northern Mariana Islands) and J-F (Alaska, Arizona, Idaho, Montana, North Dakota, Oregon, South Dakota, Utah, Washington and Wyoming).
Noridian has a Local Coverage Article titled Spinal Fusion Services: Documentation Requirements for both MACs. (J-E Article A53972 and J-F Article A53975). The articles indicate that the “Noridian Medical Review team and CERT contractor has identified multiple errors regarding documentation to support the medical necessity of spinal fusion procedures. This article clarifies medical necessity and documentation requirements regarding spinal fusion procedures.”
CMS Resource
In 2016 CMS created a Provider Compliance Video containing pointers to help provide proper documentation when billing for Lumbar Spinal Fusion. You can find a link to this YouTube video on the CMS website.
Spinal Fusion audits are not new. The documentation expectation to support the medical necessity of the procedure has been made known by several different auditors. There are a few key questions that you should answer.
- Do your surgeons know what documentation elements are required?
- Does your staff responding to ADRs know what information needs to be sent to an auditor?
- Have you performed an internal audit of Spinal Fusion records to make sure expected documentation is in the record?
If you can’t answer yes to these three questions, now is the time to make sure you can.
Beth Cobb
2/12/2019
It is no secret that physical activity and exercise are good for you. For most healthy adults, the Department of Health and Human Services recommends at least 150 minutes of moderate aerobic activity or 75 minutes of vigorous aerobic activity a week, or a combination of the two. Medicare patients with certain conditions can participate in structured exercise programs as a benefit through Medicare. For example, there are cardiac and pulmonary rehabilitation programs for patients who meet certain cardiac and obstructive pulmonary criteria and in 2017 Medicare approved supervised exercise therapy for patients with symptomatic peripheral artery disease.
On February 1, 2019, CMS issued a new transmittal that clarified the payment rules and expanded the list of covered diagnosis codes for supervised exercise therapy (SET). Here are some things providers need to know about SET:
- On May 25, 2017, CMS issued a National Coverage Determination (NCD) to cover SET for Medicare beneficiaries with Intermittent Claudication (IC) for the treatment of symptomatic peripheral artery disease (PAD).
- Claudication is pain in the thigh, calf, or buttocks that occurs when walking. Intermittent claudication (IC) is the most common symptom experienced by people with PAD.
- SET involves the use of intermittent walking exercise, which alternates periods of walking to moderate-to-maximum claudication, with rest. SET has been recommended as the initial treatment for patients suffering from IC.
- SET consist of sessions lasting 30-60 minutes comprising a therapeutic exercise-training program for PAD in patients with claudication.
- It must be performed in an outpatient hospital setting or a physician’ s office.
- It must be delivered by qualified auxiliary personnel trained in exercise therapy for PAD and under the supervision of a physician or non-physician practitioner (PA, NP, or CNS).
- Medicare covers up to 36 sessions over a 12-week period with the option, at the discretion of the Medicare Administrative Contractor (MAC), to cover an additional 36 sessions (up to 72 sessions) over an extended period of time. Providers should append the KX modifier to sessions beyond the initial 36 to attest documentation is on file verifying that further treatment is medically necessary and meets the policy requirements.
- Patients must have a face-to-face visit with the physician responsible for PAD treatment to obtain the referral for SET. At this visit, the patient must receive information regarding cardiovascular disease and PAD risk factor reduction, which could include education, counseling, behavioral interventions, and outcome assessments. Be sure there is documentation of this visit in your SET records to support coverage.
- SET is non-covered for beneficiaries with absolute contraindications to exercise as determined by their primary attending physician.
- SET is reported with CPT code 93668 and an appropriate diagnosis code is required for coverage. Please see the ICD-10 diagnosis code table in the transmittal for covered diagnoses.
People should start their own exercise regimen while they are healthy and before health conditions qualify them for one of Medicare’s exercise programs. An ounce of prevention is worth a pound of cure.
Debbie Rubio
2/5/2019
While a majority of the country is in the grips of below freezing weather, here in the South our promised snow did not happen and temperatures by the first of next week are forecast to be in the 70’s. Some flowers, such as jonquils, are beginning to bloom and whether from the changing weather patterns or from early bloomers, I have a sinus headache. This time next year, many hospital laboratories will be in the middle of another large headache – that of reporting private payor data for clinical diagnostic laboratory tests (CDLTs) to Medicare.
The Protecting Access to Medicare Act of 2014 (PAMA) made significant changes to the way in which Medicare payments for laboratory tests paid under the Clinical Laboratory Fee Schedule (CLFS) are determined. Under the CLFS final rule “Medicare Clinical Diagnostic Laboratory Tests Payment System Final Rule” (CMS-1621-F), which was published in June 2016 and implemented the PAMA requirements, private payor rates became the basis for the revised CLFS rates beginning January 1, 2018. Medicare obtains the data for the private payor rates from applicable laboratories that are required to report their private payor payments and volumes to CMS. When this rule first came out the definition of applicable reporting labs had to do with the percentage of Medicare services for a particular NPI that were paid under the CLFS or the physician fee schedule. Since hospital Medicare revenues are mainly from inpatient and outpatient prospective payment systems (IPPS and OPPS), most hospital labs did not qualify as an applicable reporting laboratory with the exception of hospital laboratories that had their own NPI number.
In the 2019 Medicare Physician Fee Schedule (MPFS) Final Rule, CMS changed the definition of an applicable reporting laboratory to use the Medicare revenue from a hospital 14x type of bill for the data collection period beginning January 1, 2019. The official definition for applicable reporting laboratories is:
“Laboratories, including physician offices laboratories and hospital outreach laboratories that bill using a 14X TOB are required to report laboratory test HCPCS codes, associated private payor rates, and volume data if they:
- Have more than $12,500 in Medicare revenues from laboratory services on the Clinical Laboratory Fee Schedule (CLFS), and
- Receive more than 50 percent of their Medicare revenues from CLFS and physician fee schedule services during a data collection period”
As explained in the January 22, 2019 ‘Clinical Diagnostic Laboratories to Collect and Report Private Payor Rates Call’, hospitals will divide the CLFS and PFS revenues attributed to 14x Type of Bill by their total 14x
revenues. Since 14x revenues are “non-patient” services, they consist exclusively (or mostly) of lab services, meaning the percentage will likely always exceed 50%. This means if your hospital outreach lab’s 14x revenues equal or exceed $12,500 in the 6-month reporting period, then you are required to report the lab private payor data to Medicare.
Using Medicare claims data from our sister company, RealTime Medicare Data (RTMD), I looked at the 14x revenue for a number of hospitals and I was surprised that most hospitals easily surpassed the $12,500 per 6-months threshold for reporting. The current data collection period began January 1, 2019 and goes through June 30, 2019. The reporting period for this collection period is January 1, 2020 through March 31, 2020. This gives hospitals time to evaluate their status and prepare for reporting.
I recommend hospitals first verify they are using the 14x type of bill correctly. The 14x type of bill is used to bill non-patient lab services, such as when a specimen is sent to the hospital lab for testing from a physician’s office. Patients that are referred to your laboratory for testing and actually physically come to the hospital lab for specimen collection are outpatients. Outpatient testing is billed to Medicare on a 13x type of bill. Although the data collection period has already begun, if you are not using the 14x bill type correctly, now is the time to correct it.
Hospitals then need to determine the amount of their 14x revenues for a six-month period. The current collection period of January-June 2019 will be the official period for determining 14x lab revenues for reporting purposes, but hospitals can estimate if they will meet the criteria based on prior data. If it appears your hospital laboratory will meet the definition of an applicable reporting lab, someone at your facility needs to learn the requirements for reporting so you are ready next year. Here are some resources to get you started with the process.
- Medicare's Laboratory PAMA webpage – a wealth of information and links to other resources on this page. If you are an applicable reporting lab, you will want to check out the CLFS Data Collection System User Guide.
- Medicare FAQs on the Final Rule (at the time this article was written, these FAQs were not yet updated with the new 2019 applicable lab definition)
- National Provider Call January 22 2019 – this website includes the presentation, audio recording, and transcript of this call. CMS will be having additional calls on this topic so be on the lookout for these.
The January 22, 2019 National Provider Call explained how to determine if you are a reporting laboratory under the new 14x definition. The CMS presenters were unsure exactly what data would be required to be reported to Medicare – was it only 14x data, or was the 14x data only for determining reporting status and all lab non-patient and outpatient data would have to be reported. They promised to clarify this in upcoming sub-regulatory guidance.
In general, reporting labs have to report the private payor rate for each test for which final payment has been made during the data collection period, the associated volume for each test, and the specific HCPCS code associated with the test. If an applicable laboratory has more than one payment rate for the same private payor for the same test, or more than one payment rate for different payors for the same test, the reporting entity will report each such payment rate and the volume for the test at each such rate.
There may be some insurances that pay a lump sum amount per claim, instead of individual line item payments, such as an insurance that pays under EAPGs for example. In this case, if the final private payor rate amount paid by HCPCS code and the associated volume paid at that final rate cannot be determined, the payment amount is not a private payor rate for purposes of applicable information and therefore is not reported to CMS.
Even from this cursory discussion of the required reporting for private payor lab rates, you can tell it will certainly be a huge headache. You cannot change that, but you can start now to know where you stand and what to expect as the reporting period approaches.
Debbie Rubio
2/5/2019
Q:
The documentation in the record specified “intentional Wellbutrin overdose, but not done in a suicidal fashion”. Should the intent be coded as “intentional self-harm?
A:
Assign the code for Poisoning, By Other Antidepressants, Accidental (Unintentional), Initial Encounter (T43.291A). Per the guidelines specific for Chapter 19, when the intent of the overdose is not documented then we are to assign the code for accidental intent.
References:
Coding Clinic, 2nd Quarter 2016, page 8
FY 2019 - ICD-10 Official Guidelines for Adverse Effects, Poisoning, Underdosing and Toxic Effects
1/28/2019
MEDICARE TRANSMITTALS – RECURRING UPDATES
January 2019 Update of the Hospital Outpatient Prospective Payment System (OPPS)
Describes changes to and billing instructions for various payment policies implemented in the January 2019 OPPS update.
Clinical Laboratory Fee Schedule – Medicare Travel Allowance Fees for Collection of Specimens
Revises travel allowances payment amounts when billed on a per mileage basis using HCPCS code P9603 and when billed on a flat rate basis using HCPCS code P9604 for Calendar Year (CY) 2019.
Quarterly Update to the National Correct Coding Initiative (NCCI) Procedure-to-Procedure (PTP) Edits, Version 25.1 Effective April 1, 2019
Calendar Year (CY) 2019 Annual Update for Clinical Laboratory Fee Schedule and Laboratory Services Subject to Reasonable Charge Payment
Provides instructions for the Calendar Year (CY) 2019 Clinical Laboratory Fee Schedule (CLFS), mapping for new codes for clinical laboratory tests, and updates for laboratory costs subject to the reasonable charge payment.
OTHER MEDICARE TRANSMITTALS
Medicare Claims Processing Manual Chapter 23 - Fee Schedule Administration and
Coding Requirements
Updates manual concerning National Correct Coding Initiative (NCCI) procedure-to-procedure (PTP) edits, medically unlikely edits (MUEs), and modifiers -59 and -91 usage.
https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2018Downloads/R4188CP.pdf
Local Coverage Determinations (LCDs) – REVISED
Added language to show that MACs have the discretion to host multi-jurisdictional CACs.
New Waived Tests
New Clinical Laboratory Improvement Amendments of 1988 (CLIA) waived tests approved by the Food and Drug Administration (FDA).
Medicare Claims Processing Manual, Chapter 30 Revisions
Chapter revised to provide improved formatting and readability – current policy is not changing.
New Electronic System for Provider Reimbursement Review Board Appeals
MEDICARE SPECIAL EDITION ARTICLES
Total Knee Arthroplasty (TKA) Removal from the Medicare Inpatient-Only (IPO) List and Application of the 2-Midnight Rule - Reissued
Addresses TKA procedures and application of the 2-Midnight Rule now that this procedure has been removed from Medicare’s inpatient-only (IPO) list.
MEDICARE EDUCATIONAL RESOURCES
Appropriate Use Criteria for Advanced Diagnostic Imaging MLN Fact Sheet
ICD-10-CM, ICD10-PCS, CPT, and HCPCS Code Sets MLN Fact Sheet
Medicare Fast Facts
Medicare Fast Facts resources this month include:
- Proper Coding for Specimen Validity Testing Billed in Combination with Urine Drug Testing
- Proper Use of the KX Modifier for Part B Immunosuppressive Drug Claims
OTHER MEDICARE UPDATES
Medicare Fee-for-Service Recovery Audit Program: Additional Documentation Limits for Medicare Institutional Providers (i.e. Facilities)
RAC ADR limits for facilities updated December 21, 2018
1/28/2019
As you may be aware by now, on January 8, 2019 Medicare issued MLN Matters Article SE19002, “Total Knee Arthroplasty (TKA) Removal from the Medicare Inpatient-Only (IPO) List and Application of the 2-Midnight Rule,” and then after an instantaneous, critical response from the healthcare community immediately withdrew the article. On January 24, 2019, they reissued the article and again there was rapid negative critique of their scenarios. I, too, see the errors in some of their examples. In my opinion, they could write 100 examples and most would be subject to some criticism. I believe this is why they have been so hesitant to offer examples of the “case-by-case exception” for an inpatient admission when a greater-than-2-midnight stay is not expected. Hopefully CMS learns from this situation just how very hard it is to apply their rules. I maintain that even though their examples and wording are not perfect, there is something for hospitals to learn from this article.
Solid Documentation
The documentation in your medical records serves more than one function. Most importantly, medical documentation serves to communicate information about a patient’s condition and care between healthcare team members to ensure continuity of care, foster quality care, and improve efficiency of care. Medical documentation is also a legal document that serves as evidence of the care provided, especially in the case of a lawsuit. And it is the medical record that ultimately provides the justification and rationale to support payment for the medical items, tests, and services selected and provided to the patient.
Those of us that deal with Medicare are often reminded that documentation must support the medical necessity of services. It is not good when that reminder comes in the form of a claim denial following a complex medical review, such as reviews of the medical necessity of inpatient admissions. It is best to know what is expected up front so we can follow Medicare’s guidelines and make sure our documentation is thorough and solid enough to support Medicare’s requirements for payment.
Likewise, it is helpful when CMS shares the basis for their coverage and payment rationale, preferably in the form of guidance prior to an actual review. Hospitals have been waiting since the 2016 “case-by-case exception” for further guidance on what would justify the use of this exception. Also, hospitals have been confused by statements made in the final rule when total knee arthroplasty was removed from the inpatient-only list in 2018. TKAs are now paid by Medicare when performed as an outpatient or an inpatient, but when is inpatient admission for a TKA appropriate? Finally, CMS has issued a Special Edition MLN Matters Article SE19002 that addresses Total Knee Arthroplasty (TKA) Removal from the Medicare Inpatient-Only (IPO) List and Application of the 2-Midnight Rule. This article describes the circumstances when an inpatient admission for a TKA would be appropriate and even provides specific examples.
An inpatient admission for a TKA is appropriate when 1) there is an expectation of medically necessary hospital services spanning 2 midnights or longer or 2) there is not an expectation of a 2 midnight stay but the physician/practitioner determines other complex medical factors support an inpatient admission.
Providers should read the SE Article carefully as it provides a lengthy discussion on the topic. Here is a summary of some of that discussion. Inpatient admission for a TKA is appropriate when:
- The admitting physician/practitioner has a reasonable expectation that the patient will require medically necessary hospital services spanning 2 midnights or longer and admits the patient to the hospital based on that expectation.
- If the patient remains an inpatient receiving medically necessary hospital services for greater than 2 midnights and the patient’s medical record documents the medical necessity of a hospital level of care, this meets the 2-Midnight Presumption. Under the 2-Midnight Presumption, which helps guide contractor selection of claims for medical review, hospital claims with lengths of stay greater than 2 midnights are presumed to be reasonable and necessary for Medicare Part A payment.
- Even if the patient is discharged prior to a second midnight, as long as documentation supports that at the time the inpatient order was written, there was a reasonable expectation of medically appropriate hospital care spanning 2-Midnights, this supports the 2-Midnight Benchmark. Under the 2-Midnight Benchmark, hospital claims are generally payable when the admitting practitioner reasonably expected the beneficiary to require medically necessary hospital care spanning 2 or more midnights and this expectation is supported by the medical record documentation. The 2-Midnight Benchmark helps guide contractor reviews of short stay hospital claims for Part A payment.
- The admitting physician/practitioner does not expect the patient to need hospital care beyond a second midnight, but determines the patient requires hospital inpatient care based on complex medical factors supported in the medical record and including but not limited to:
- Patient’s history, co-morbidities, and current medical needs
- Severity of signs and/or symptoms, and
- Risk of Adverse Events
The article also emphasizes that TKAs do not always have to be performed as an outpatient and that CMS does not target TKA Short Stay inpatient claims for review.
It is also interesting to note that in the 2018 OPPS Final Rule, CMS made the following statements:
“However, we do not expect a significant volume of TKA cases currently being performed in the hospital inpatient setting to shift to the hospital outpatient setting as a result of removing this procedure from the IPO list. At this time, we expect that a significant number of Medicare beneficiaries will continue to receive treatment as an inpatient for TKA procedures.”
In a seemingly contradictory statement, SE19002 notes, “CMS has not made any pre-determinations on the number of patients receiving TKA procedures that should be treated as an inpatient or outpatient.”
Sometimes even CMS’s documentation is not solid enough to stand up to an audit.
Debbie Rubio
1/28/2019
The mission of the Office of the Inspector General (OIG) is “to protect the integrity of Department of Health & Human Services (HHS) programs as well as the health and welfare of program beneficiaries” with most of their resources focused on oversight of Medicare and Medicaid. I believe this is a noble mission as these programs provide benefits to our elderly and others in need of healthcare. On a personal note, I am getting closer to the day when I will be a Medicare beneficiary and I am even more thankful that agencies such as the OIG have worked hard over the years to protect the Medicare Trust Fund so benefits remain.
Hospitals often feel the sting of OIG investigations, especially when findings indicate a need to refund payments. The benefit of even these investigations, other than protecting the integrity of the programs, is that the reports provide guidance to all hospitals furnishing the same or similar services. The OIG also examines practices of the Medicare and Medicaid agencies themselves and the contractors who administer the programs. The OIG added several new issues to their Work Plan website in January 2019, some of which focus on outcomes from program changes, recommended actions from prior audit findings, and expansion of a prior review in a new direction.
Laboratory Tests Payment Rates
In 2018, CMS began paying for clinical laboratory services under a new system mandated by the Protecting Access to Medicare Act (PAMA) of 2014. Lab payment rates under the new system are set based on the current charges in the private health-care market (as reported to CMS by applicable reporting laboratories). PAMA also requires an annual publicly reported analysis of the top 25 laboratory tests by expenditures by the OIG. In 2019, the OIG will release an analysis of the first year of payments made under the new system for setting payment rates.
Post-Acute-Care Transfer Policy (PACT Policy)
Prior OIG audits identified issues where incorrect discharge dispositions reported on hospital inpatient claims resulted in Medicare overpayments. Under the PACT policy, select Medicare MS-DRG payments for hospital inpatient stays discharged to certain post-acute care settings are paid a prorated rate instead of the full MS-DRG payment amount that would be paid if the patient was discharged to home. Medicare has common working file (CWF) edits that should be able to identify when discharges to these post-acute care settings occur and are reported incorrectly. Then Medicare can notify the hospital to correct the discharge status on the claim so they will receive an accurate payment. The prior audits revealed that Medicare’s edits were not working properly. This follow-up audit will determine whether CMS corrected the CWF edits and ensured they are working properly.
It is important to note that it is not always a coding error that results in an incorrect discharge status code. Often the assigned discharge code matches the documentation in the medical record, but circumstances change at or shortly after discharge that result in the patient going somewhere other than home. This is why it is important to have processes in place to follow up on discharged Medicare patients. For more information on the PACT policy and suggestions on how best to handle this, please see this September 2018 Wednesday@One PACT Article.
Outlier Payments and Device Credit Policy
For years and throughout many different audits, the OIG has found problems with hospitals not reporting appropriately under the device credit policy. The device credit policy requires hospitals to report information on the claim notifying Medicare when they have received certain devices at no or significantly reduced cost. Medicare then reduces the outpatient or inpatient payment amount by the device credit amount reported. This newly announced Work Plan item is a twist on an old issue. For no-cost devices, Medicare instructs providers to report the device line item with a minimal charge (such as $0 or $1), but there is no guidance from Medicare on the charges reported for partial-credit devices. The new OIG audit will look for overstated Medicare charges on outpatient claims with a reported medical device credit that have an outlier payment. Specifically, they would look for elevated charge amounts, such as too large an amount on the partially credited device or device procedure that results in an inappropriate outlier payment. The OIG “will determine whether Medicare payments for replaced medical devices and their respective outlier payments were made in accordance with Medicare requirements.”
For this last issue on the device credit policy, hospitals may want to assess what charges they report for partially credited devices and make sure the charge amounts are appropriate and would not lead to inappropriate outlier payments. Also, this may be a good time to review your entire procedure for complying with the device credit policy, which is a difficult endeavor. The other two new audit issues are more reviews of CMS actions than hospital actions, but again a good time to review your internal policies for determining and reporting discharge status.
There is nothing hospitals can do about the new laboratory prices. It is a good time to remind hospitals that for 2019, CMS changed the definition of an applicable reporting laboratory required to report lab private-payor data to Medicare. This was done to include more hospital laboratories in the reporting. Under the new definition, hospital outreach laboratories that have over $12,500 of Medicare lab revenues in a six-month period under the 14x type of bill (non-patients) are required to report. You can find more information about PAMA and applicable reporting labs at Medicare Lab PAMA webpage.
Debbie Rubio
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