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With the release of the 2017 IPPS Final Rule last week, we are one step closer to the MOON. The Medicare Outpatient Observation Notice (MOON) is a requirement of the August 6, 2015 Notice of Observation Treatment and Implication for Care Eligibility Act (the NOTICE Act). Guidance for provision of the MOON to Medicare beneficiaries was in the 2017 IPPS Proposed Rule. This week we will walk through the 2017 IPPS Final Rule, which is not the final step to the MOON.

When to Begin Providing the MOON?

The NOTICE Act provided the effective date for this notification to begin 12 months after enactment of the Act on August 6, 2015.

However, in the Final Rule, CMS indicates the standardized notice, the MOON, is going through the Paperwork Reduction Act (PRA) approval process and is subject to a 30-day public comment period that begins on the date of publication of Final Rule. “Following review of comments and final approval of the MOON under the PRA process, hospitals and CAHs must fully implement use of the MOON no later than 90 calendar days from the date of PRA approval of the MOON.” So, when will you be required to provide the Moon?

• Public Comment Period: August 22nd through September 21st

The Final Rule is scheduled for publication in the Federal Register on August 22nd. The public will have 30 days after that to “comment” on the form which puts us at September 21st.

• PRA Process: At a minimum November 20th

An FAQ regarding how long the PRA clearance process takes indicates that “the complete review and approval process can take anywhere from 6-9 months, depending on the number of requests currently in the process and the data collection of the subject matter. This estimate includes the 60-day and 30-day public comment periods and the 60 days OMB has to review and act upon each submission.

• PRA approval to Full Implementation of the MOON: Date TBD

CMS notes the implementation date will be announced on the CMS Beneficiary Notices Initiative Web site at: https://www.cms.gov/Medicare/Medicare-General-Information/BNI/index.html and in an HPMS memorandum to MA plans.

Further, “Hospitals and CAHs will be required to deliver the MOON to applicable patients who begin receiving observation services as outpatients on or after the notice implementation date.”

Who should receive the MOON?

Insurance Coverage

Individuals entitled to benefits under Title XVIII of the Act, whether or not the services furnished are payable under the title should receive the MOON when he/she receives observation services as an outpatient for more than 24 hours. This would include the following:

• The individual enrolled in Medicare Part A and Part B,
• The individual enrolled in Medicare Part A only “would still receive notice even though the observation services received as an outpatient fall under the Part B benefit and would not be covered or payable by Medicare for that person,”
• Individuals enrolled in a Medicare Advantage (MA) or other Medicare health plan, and
• Individuals where Medicare or MA is the secondary payer. CMS notes “the applicability of the notice requirement depends on whether the individual is entitled to benefits under Title XVIII, not on whether Medicare makes payment (primary or otherwise).”

States with a similar Notice Requirement

“The NOTICE Act specifically requires hospitals and CAHs to deliver notice (written and oral)…to Medicare beneficiaries who receive observation services as an outpatient for more than 24 hours. The MOON satisfies the written NOTICE Act requirement for a designated population of Medicare beneficiaries receiving a specific set of services.”

Comments were submitted noting that several states are already required to provide a notice similar to the MOON and it would be beneficial to allow for delivery of the MOON to a broader population (i.e. all Outpatients) to avoid confusion. CMS, reiterated that the NOTICE Act specifically requires provision of the MOON to outpatients receiving observation services and provided the following guidance:

• On a state-by-state basis Hospitals and CAHs will need to determine if delivery of the MOON fulfills individual state requirements.
• When State law, “requires notification to Medicare beneficiaries who receive observation services as an outpatient for more than 24 hours and requires such notice to contain content that is not included in the MOON, hospitals may utilize the free text field in the MOON’s “Additional Information” section for communicating such additional content.”
• “Hospitals and CAHs subject to State law notice requirements may also attach an additional page to the MOON to supplement the “Additional Information” section in order to communicate additional content required under State law, or may attach the notice required under State law to the MOON.”

Timing of Delivery of the MOON

Before 24 Hours of Observation

A commenter noted that while the NOTICE Act requires delivery of the MOON to individuals receiving more than 24 hours of observation services as an outpatient, there are State specific laws that require written notice within 24 hours of initiation of services.

CMS clarified “that hospitals and CAHs may deliver the MOON before an individual has received more than 24 hours of observation services as an outpatient.”

After 24 Hours of Observation

Even with this clarification CMS went on to indicate “that we do not encourage hospitals and CAHs to deliver the MOON at the initiation of outpatient observation services. Routine and systematic delivery of the MOON by a hospital or CAH at the initiation of observation services would, in effect, render the MOON a notice of receiving outpatient observation services, as all patients receiving observation services would be given the MOON independent of the length of time they received observation services.”

When does the 24 hour timeframe begin?

Several commenters requested clarification as to whether the timeframe starts:

1. After services begin following the written order for observation services;
2. When related services commence if such services commence before the written order was executed and the patient occupies an outpatient bed count; or
3. Based on the documentation of when nursing care began.

CMS indicated “there may be times when an individual is subject to an order for observation services, but is not actually receiving observation services. For example, following an order for observation services in an emergency department, a hospital may need to wait to begin furnishing observation services until a bed is available for the patient. In this situation, services are considered initiated when observation services commence.”

They went on to clarify “that the start of observation services, for the purposes of determining when more than 24 hours of observation services have been received, is the clock time as documented in the patient’s medical record at which observation services are initiated (furnished to the patient) in accordance with a physician’s order.”

What if a Resident writes the order?

Several commenters also requested clarification when the order for observation services was written by a resident. CMS responded that “to the extent that a resident is authorized by State licensure law and hospital staff bylaws to order outpatient services, once observation services are initiated in accordance with the resident’s order, the 24 hour time period will commence.”

Billable or Elapsed Time to Count the Hours?

A commenter noted that the counting of hours could be interpreted as elapsed time or billable time. CMS believes using elapsed time is most consistent with language in the NOTICE Act. “Therefore, for purposes of identifying the 24-hour timeframe for which an individual has received observation services, and thus is required by the NOTICE Act to receive notice by the hospital or CAH, observation time will be measured as the elapsed time in hours beginning at the clock time documented in the patient’s medical record, which coincides with the time that observation care is initiated in accordance with a physician’s order.”

How will the MOON work with the 2-Midnight Policy?

“The NOTICE Act requires hospitals to inform patients who have remained outpatients of the hospital and received observation services for more than 24 hours that they are not hospital inpatients and are subject to potentially different cost-sharing requirements and postacute care benefits than someone who has been admitted as an inpatient. We note that a scenario could arise whereby a patient is admitted to the hospital immediately after being a hospital outpatient receiving observation services for greater than 24 hours. In such a scenario, the inpatient admission may be payable under Medicare Part A under the 2-midnight policy and, as stated earlier, the hospital or CAH would still be required to furnish the MOON to the patient within 36 hours after the time the individual begins receiving observation services.”

What if the Inpatient Admission occurs prior to delivery of the MOON?

As recommended by a commenter, CMS agrees that when “an inpatient admission occurs prior to delivery of the MOON, the MOON should be annotated with date and time of the inpatient admission. Therefore, we are requiring that, in the event that a patient is subsequently admitted as a hospital inpatient directly after receiving observation services for more than 24 hours, and the inpatient admission occurs prior to delivery of the MOON, the MOON be annotated with the date and time of the inpatient admission. Additional guidance regarding elements for the free text field of the MOON will be provided in the CMS Internet Only Manual.”

Written Notice Requirements

A standard notice (the MOON) is to be used by all hospitals and CAHs. Several comments were submitted regarding the form content and format. Changes made in response to comments include:

• A reduced number of fillable fields on the MOON, specific examples provided by CMS include:
• The physician name and the date and time observation services began are no longer on the notice,
• The field for the hospital name was removed. CMS indicated that consistent with current beneficiary notices, and as will be detailed in future guidance, hospitals will be permitted to preprint the MOON to include their hospital name and logo at the top of the notice.
• One commenter suggested making the MOON a single page. CMS noted this would require the font to be too small but did note that hospitals may print the MOON as two sides of a single page.
• The CMS’s Office of Communications performed a plain language review and appropriate changes were incorporated wherever possible.
• In response to suggestions to keep the focus of the MOON on status and related coverage and cost-sharing implications, the QIO contact section was removed from the MOON.

What “Additional Information” is expected to be included in this section of the MOON?

CMS generally does not specify expected language for additional information of beneficiary notices. However, they believe this section may be used for the following:

• A place to include information such as unique circumstances regarding the particular patient,
• A place to note when a beneficiary refuses to sign the MOON,
• A place to note hospital waivers of the beneficiary’s responsibility for the cost of self-administered drugs,
• Part A cost sharing responsibilities if the beneficiary is subsequently admitted as an inpatient, or specific information for contacting hospital staff.

Required Retention of the MOON in the Medical Record

Several commenters requested clarification on how the document must be maintained. CMS indicated that “consistent with longstanding practice in implementing beneficiary notices, we will require that hospitals and CAHs retain a signed copy of the MOON. Such a practice assures both hospitals and CAHs and surveyors that the appropriate notices have been delivered as required. However, in the past, we have permitted providers to determine the method of storage. This same flexibility will be afforded to hospitals and CAHs delivering the MOON. Hospitals and CAHs may choose to retain a signed notice as a hard copy or electronically.”

Delivering the MOON

CMS proposed the use of the MOON to include all of the information elements required by section 1866(a)(1)(Y)(ii) of the Act to fulfill the written notice requirement of the NOTICE Act. An English language version of this notice has been submitted to the OMB for approval. Once the English language version is approved a Spanish language version will be made available.

CMS notes that if an individual cannot read the MOON or comprehend the required oral explanation, they expect hospitals and CAHs to employ their usual procedures to ensure notice comprehension and refers you to the Medicare Claims Processing Manual (Pub. 100-4), Chapter 30, Section 40.3.4.3, for similar existing procedures related to comprehension of the Advance Beneficiary Notice of Noncoverage (ABN). CMS finalized the proposed provisions for delivering the MOON without modification.

Oral Notice

Several commenters questioned how they should handle and document the oral explanation required by the NOTICE Act. Interestingly, one commenter recommended that CMS allow the oral explanation to be delivered as a video presentation with staff being present to answer any questions and provide additional explanation when needed. The following are CMS responses to comments and questions:

• The statute requires an oral explanation of the written notification, or MOON.
• A video presentation is acceptable if there is someone available to answer questions.
• The NOTICE Act requires delivery of a written and oral explanation of the MOON when notice delivery is required.

Signature Requirements

The NOTICE Act sets forth that the written notice must be:

• Signed by the individual receiving observation services as an outpatient, or
• Signed by a person acting on the individual’s behalf to acknowledge receipt of the notice, or
• If the individual or person refused to provide a signature, “the written notification is to be signed by the staff member of the hospital or CAH who presented the written notification and certain information needs to be included with such signature.” The “certain information” to be included is the staff member’s name and title, a certification statement that the notice was presented, and the date and time the notice was presented.

CMS finalized the proposed signature requirements without modification.

No Appeal Rights under the NOTICE Act

In the proposed rule CMS stated the NOTICE Act “does not afford appeal rights to beneficiaries…to provide clarity to this point, we are proposing to amend the regulations at 42 CFR 405.926 relating to actions that are not initial determinations, by adding new paragraph (u) to explain that issuance of the MOON by a hospital or CAH does not constitute an initial determination and therefore does not trigger appeal rights under 42 CFR part 405, subpart I.” After consideration of public comments the proposed revision to §405.926(u) was finalized without modification.

When will you be required to provide the MOON? Not for a while. In the meantime, the current draft document looks different from the first iteration. I would encourage key stakeholders to closely review this document, submit comments to the Office of Information and Regulatory Affairs, Office of Management and Budget and begin to work through the process of providing the MOON.

Resources:

Link to pre-published 2017 IPPS Final Rule: https://s3.amazonaws.com/public-inspection.federalregister.gov/2016-18476.pdf

Link to Details for CMS Form Number CMS-10611: Medicare Outpatient Observation Notice: https://www.cms.gov/Regulations-and-Guidance/Legislation/PaperworkReductionActof1995/PRA-Listing-Items/CMS-10611.html?DLPage=2&DLEntries=10&DLSort=1&DLSortDir=descending

• Note: Instructions for submitting public comments are not in the final rule document. Until a correction notice can be published in the Federal Register, instructions are available at this website.

Did your mom ever tell you or did you ever tell your own children, “Because I said so!”? That may or may not have worked to accomplish the desired behavior depending on the pre-existing dynamics of the parent-child relationship. CMS encounters the same problem when dealing with the provider community. Sometimes providers follow the rules, sometimes they have never heard of the rules, sometimes they ignore the rules and sometimes they deliberately disobey. This is why where there are Medicare coverage policies, Medicare medical review audits will likely follow. Such is the case for Spinal Cord Stimulators.

Medicare has a National Coverage Determination (NCD) for Electrical Nerve Stimulators (NCD 160.7) which addresses Spinal Cord (Dorsal Cord) Stimulation. The following conditions must be met in order for Medicare to make payment for these services:

• The implantation of the stimulator is used only as a late resort (if not a last resort) for patients with chronic intractable pain;
• Other treatment modalities (pharmacological, surgical, physical, or psychological therapies) have been tried and did not prove satisfactory, or are judged to be unsuitable or contraindicated for the given patient;
• Patients have undergone careful screening, evaluation and diagnosis by a multidisciplinary team prior to implantation. (Such screening must include psychological, as well as physical evaluation);
• All the facilities, equipment, and professional and support personnel required for the proper diagnosis, treatment training, and follow up of the patient must be available; and
• Demonstration of pain relief with a temporarily implanted electrode precedes permanent implantation.

In addition to the NCD, several Medicare Administrative Contractors (MACs) also have Local Coverage Determinations that address this procedure.

As stated above, a medical review audit often follows coverage policies. The Medicare Supplemental Medical Review Contractor (SMRC) recently published their findings for Project Y3P167 – Spinal Cord Stimulator (SCS) Services. The review looked at claims that contained CPT codes 63650 (Percutaneous implantation of neurostimulator electrode array), 63655 (Laminectomy for implantation of neurostimulator electrode plate/paddle), and 63685 (Insertion or replacement of spinal neurostimulator pulse generator or receiver). There was a 72% denial rate for this review, with 26% of claims denied for lack of record submission and 46% denied for failing to meet Medicare’s coverage requirements. According to the report, “The main reason for claim denials following medical review was the provider’s failure to provide documentation of a psychiatric evaluation/screening as required by NCD 160.7.”

Hospitals that provide this service should evaluate their practices and documentation to make sure Medicare’s requirements for payment are being met. Why? Because Medicare said so! 

Dilemma:

I have a claim where an anterior fusion was performed in the morning then the patient was brought back to the OR for a posterior fusion in the afternoon. The encoder groups these two procedures to DRG 455 Combined Anterior/Posterior Spinal Fusion without CC/MCC. Is this correct?

Solution:

DRG 455 is correct because it reflects that an Anterior and a Posterior fusion were performed during that admission. It is not an issue, from a coding standpoint, that the procedures were performed at two separate operative episodes.

Resources:

• TruCode Encoder

TRANSMITTALS

Remittance Advice Remark Code (RARC), Claims Adjustment Reason Code (CARC), Medicare Remit Easy Print (MREP) and PC Print Update

• Transmittal 3562, Change Request 9695, MLN Matters Article MM9695
• Issued July15, 2016, Effective October 1, 2016, Implementation October 3, 2016
• Affects physicians, providers, and suppliers submitting claims to Medicare Administrative Contractors (MACs) for services provided to Medicare beneficiaries.

Summary of Changes: The purpose of this Change Request (CR) is to update the Remittance Advice Remark Code (RARC) and Claim Adjustment Reason Code (CARC) lists and also to instruct ViPS Medicare System (VMS) and Fiscal Intermediary Shared System (FISS) to update Medicare Remit Easy Print (MREP) and PC Print.

The Supplemental Security Income (SSI)/Medicare Beneficiary Data for Fiscal Year 2014 for Inpatient Prospective Payment System (IPPS) Hospitals, Inpatient Rehabilitation Facilities (IRFs), and Long Term Care Hospitals (LTCH)

• Transmittal 1681, Change Request 9648, MLN Matters Article MM9648
• Issued July 15, 2016, Effective August 16, 2016, Implementation August 16, 2016
• Affects Inpatient Prospective Payment System (IPPS) hospitals, Inpatient Rehabilitation Facilities (IRFs), and Long Term Care Hospitals (LTCHs) submitting
• claims to Medicare Administrative Contractors (MACs) for services provided to Medicare beneficiaries.

Summary of Changes: Provides updated data for determining the disproportionate share adjustment for IPPS hospitals and the Low Income Patient (LIP) adjustment for IRFs as well as payments as applicable for LTCH discharges

Quarterly Update to the Correct Coding Initiative (CCI) Edits, Version 22.3, Effective October 1, 2016

• Transmittal 3561, Change Request 9725, MLN Matters Article MM9725
• Issued July 15, 2016, Effective October 1, 2016, Implementation October 3, 2016
• Affects physicians, providers, and suppliers submitting claims to Medicare Administrative Contractors (MACs) for services provided to Medicare beneficiaries.

Summary of Changes: This is the normal update to the CCI procedure to procedure edits.

July 2016 Update of the Hospital Outpatient Prospective Payment System (OPPS)

• Transmittal 3552 and 3557, Change Request 9658, MLN Matters Article MM9658
• Issued June 28 and July 1, 2016, Effective July 1, 2016, Implementation July 5, 2016
• Affects providers and suppliers who submit claims to Medicare Administrative Contractors (MACs), including Home Health and Hospice (HH&H) MACs, for services provided to Medicare beneficiaries and which are paid under the Outpatient Prospective Payment System (OPPS).

Summary of Changes: This Recurring Update Notification describes changes to and billing instructions for various payment policies implemented in the July 2016 OPPS update. Transmittal 3557 replaces Transmittal 3552 to include the statement announcing delay in implementation of the reporting for certain outpatient department services (that are similar to therapy services) (“non-therapy outpatient department services”) that are adjunctive to comprehensive APC procedures.

Medicare Coverage of Diagnostic Testing for Zika Virus

• MLN Matters Article SE1615
• Issued June 27, 2016
• Affects physicians, providers, and clinical diagnostic laboratories who submit claims to Medicare Administrative Contractors (MACs) for services to Medicare beneficiaries.

Summary of Changes: This MLN Matters Special Edition Article informs the public that Medicare covers Zika virus testing under Medicare Part B as long as the clinical diagnostic laboratory test is reasonable and necessary for the diagnosis or treatment of a person’s illness or injury. This article reminds laboratories furnishing Zika virus tests to contact their MACs for guidance on the appropriate billing codes to use on claims for Zika virus testing. Furthermore, laboratories should provide resources and cost information as may be requested by the MACs in order for the MACs to establish appropriate payment amounts for the tests.

Notice of New Interest Rate for Medicare Overpayments and Underpayments -4th Qtr Notification for FY 2016

• Transmittal 270, Change Request 9750
• Issued July 12, 2016, Effective July 18, 2016, Implementation July 18, 2016

Summary of Changes: Recurring notification of interest rates.

OTHER UPDATES

CMS Proposes Hospital Outpatient Prospective Payment System Changes to Better Support Physicians and Improve Patient Care

• 2017 OPPS Proposed Rule CMS-1656-P
• Issued July 6, 2016

Summary of Changes: This proposed rule would revise the Medicare hospital outpatient prospective payment system (OPPS) and the Medicare ambulatory surgical center (ASC) payment system for CY 2017 to implement applicable statutory requirements and changes arising from our continuing experience with these systems.

Medicare Quarterly Compliance Newsletter

• July 2016 Edition

Summary: Articles on Automatic External Defibrillators, Treprostinil Inhalation Solution, Therapeutic Shoes for Persons with Diabetes, and Hospital Outpatient Dental Services.

In late summer, the corn stalks grow tall and full across our nation. I love the rustle of a cornfield as the stalks move in the summer breeze. But have you ever been lost in a cornfield or a maze? There is this moment of panic when you think you may not be able to find your way out. The maze of Medicare requirements and reviews can also create feelings of panic. For example, a recent OIG review focused on sleep study services; at least nine Medicare Administrative Contractors (MACs) have local coverage determinations (LCDs) or Articles for sleep studies; and sleep study services have also been the focus of reviews by a Recovery Auditor (Region D HDI) and the Supplemental Medical Review Contractor (SMRC).

Based on the findings from the recent Sleep Study Review, the OIG estimated overpayments of over $1 Million for the audit period for this particular independent sleep study provider. The LCD for the provider’s jurisdiction required that prior to sleep testing, the patient must have a face-to-face clinical evaluation by the treating physician that must include, among other requirements:

• the patient's sleep history and symptoms,
• a physical examination that documents body mass index, neck circumference, and
• a focused cardiopulmonary and upper airway evaluation.

Out of 130 lines of services, 50 had no documentation for the face-to-face clinical evaluation, attending physician's orders, technician's report, or interpretation report and 80 failed to include one or more of the following requirements of the face-to-face clinical evaluation: patient's sleep history and symptoms, Epworth sleepiness scale, body mass index, or neck circumference.

A previous OIG report on sleep studies from 2013 found that Medicare paid nearly $17 million for polysomnography services that did not meet one or more of three Medicare requirements – inappropriate diagnosis codes, duplicate studies for the same date of service, or invalid NPI numbers. According to the report, “Payments for services with inappropriate diagnosis codes composed a majority of these payments. Eighty-five percent of claims with inappropriate diagnosis codes came from hospital outpatient departments.”

The SMRC review from 2014 found that sixty-three percent (63%) of denials were because providers did not provide a History and Physical or other documentation to support medical necessity for polysomnography testing.

Providers need to be familiar with their MAC’s requirements for sleep testing. Hospital-based and independent sleep clinics should verify they are following the Medicare requirements and including appropriate documentation in their records. This is the best way to avoid the panic and ensure a good night’s sleep for you and your patients.

A summary of some Medicare medical review updates from last month are listed below.

Medicare Administrative Contractor (MAC) Review Updates

MAC J15 CGS

• Cataract Removal (HCPCS 66984, 66983, 66982)
• Error rate of 61.5% - 68.5%
• Review to continue

MAC JF Noridian

• Facet Joint Injections, CPT 64493
• Error rate 37% - 54%%
• Review to continue

MAC JE Noridian

• Brotezomib (Velcade), HCPCS J9041
• Error rate 10.7%
• Review to continue

MAC JM Palmetto

• Infliximab, HCPCS J1745
• Error rate 44% - 54%
• Review to continue
• HCPCS G0424, Outpatient Pulmonary Rehabilitation
• Error rate 26.3% – 55.3%
• Discontinued
• HCPCS Code J2505, Pegfilgrastim, 6 mg
• Error rate – 15.2% - 41.2%
• Discontinue in VA and WV, continue in NC and SC
• HCPCS Code J9035, Bevacizumab, 10 mg
• Error rate – 26.3% - 37.6%
• Discontinue in SC; continue in NC and VA/WV

Are you tired of hearing about and reading about provider-based departments? If so, sorry, but some governmental agencies (for example, the Office of Inspector General (OIG), the Medicare Payment Advisory Commission (MedPAC), and even Congress) just won’t let it go. This issue is evidently “stuck in their craw” and so the discussion continues, and continues, and continues… This article looks at information from the June 2016 OIG report concerning provider-based facilities.

What Is a Provider-Based Department?

Provider-based status is a Medicare payment designation established by the Social Security Act that allows facilities with a provider-based designation to bill Medicare as a hospital outpatient department and thereby receive higher payments. Provider-based facilities may be on campus (within 250 yards of the main buildings of the main provider) or off campus (more than 250 yards but less than or equal to 35 miles from the main buildings of the main provider). Hospitals and their provider-based departments (PBDs) have to meet specific requirements described in 42 CFR § 413.65 and CMS Transmittal A-03-030. The requirements include practice licensure, integration of clinical services and financial operations, and compliance with nondiscrimination and health and safety rules. In addition, off-campus PBDs must meet requirements for administration, supervision, and location.

Major Concerns – Cost and Increasing Numbers

According to the OIG report, “Medicare often pays over 50 percent more for services performed in provider-based facilities than for the same services performed in a non-hospital based facility (i.e., a freestanding facility). Beneficiaries generally are responsible for higher copayments for most services in provider-based facilities than in freestanding facilities.” In provider-based departments, Medicare makes a payment to the PBD based on Outpatient Prospective Payment System (OPPS) payment rates and a separate payment to physicians for their professional services.

Another concern is the increasing numbers of PBDs. Over the past seven years, there has been a 33% increase in hospital outpatient services including those provided in PBDs. One reason for the increased number of PBDs is that more and more hospitals are purchasing freestanding facilities and converting them to provider-based facilities.

Findings from Previous OIG Audits

In earlier reviews, the OIG found that CMS was not aware of the number of provider-based facilities or the increased cost associated with PBDs without a corresponding benefit. CMS has claimed that PBDs improve quality of care by offering increased beneficiary access and integration of care. CMS also has maintained that increased payments are appropriate to accommodate higher costs resulting from financial and clinical integration. But per the OIG, CMS has yet to provide any evidence provider-based facilities produce specific benefits to justify the higher costs compared to freestanding facilities.

Hospitals may voluntarily attest to provider-based status with supporting documentation required to be submitted to the Medicare Administrative Contractors for off-campus PBDs. The OIG found inconsistent reviews by the Medicare Regional Offices confirming the attestations. The OIG has also found that some physicians are receiving overpayments for services provided in PBDs if they report the incorrect place-of-service (POS) code.

Bottom line is the OIG recommended the complete elimination of provider-based status.

CMS Fixes

CMS did not concur with the OIG recommendation for eliminating provider-based status but did take some actions based on the OIG’s findings. Specifically, CMS

• Produced a set of standards (i.e., 42 CFR § 413.65) for provider-based facilities and entities designed to guard against abuse of the payment system,
• Developed a management information system that contains the results of provider-based reviews and enables CMS to monitor review status, and
• Developed detailed guidance on the proper use of place- of-service codes.

Due to continuing concerns from the OIG, the MedPAC committee, and Congress, CMS created new physician place-of-service codes to distinguish between services performed in on- or off-campus provider-based facilities. Effective January 1, 2016, physicians use place-of-service code 22 for services in on-campus provider-based facilities and place-of-service code 19 for services in off-campus provider-based facilities. Also, voluntary beginning January 2015 but mandatory effective January 1, 2016, CMS requires that hospital claims contain a specific two-digit modifier (modifier PO) for OPPS services furnished in an off-campus PBD.

Another significant development concerning provider-based status is the Bipartisan Budget Act of 2015 (BBA) which mandates that, effective January 1, 2017, only off-campus outpatient departments billing the OPPS for services before November 2, 2015, (grandfathered provider-based facilities) may continue to receive payment under OPPS. New off-campus provider-based facilities will be paid under payment systems equitable with independent and physician office payments. (Be on the lookout in next week’s Wednesday@One for details of how CMS proposes to handle this in the 2017 OPPS Proposed Rule.)

Remaining Problems

Although CMS has taken steps to improve its monitoring of provider-based billing, the OIG details a long list of remaining vulnerabilities related to PBDs, some of which include:

• Grandfathered facilities under the BBA will continue to generally receive higher payments (i.e., payments from both the OPPS and MPFS) for services than if the same services were provided in a freestanding facility (i.e., receiving payment only from the MPFS).
• Some hospital PBDs may be receiving overpayments because they do not meet all the PBD requirements. Due to the voluntary attestation process, CMS is unable to determine whether all provider-based facilities meet requirements to bill at the higher provider-based rate. CMS also reports challenges with the provider-based attestation review process because of difficulties obtaining supporting documentation.
• Some physicians may be receiving overpayments due to reporting of incorrect place-of-service codes. CMS has no means to ensure physicians use the correct POS codes because they do not match the facility component of a claim to the associated professional component of a claim.
• CMS cannot segregate billing by provider-based facilities, which is critical to ensuring appropriate payments and implementation of the BBA of 2015.

OIG Recommendations

The OIG continues to recommend that CMS eliminate provider-based status or equalize payment for the same services provided in different settings. If CMS does not accept these recommendations, the OIG recommends CMS:

• Implement systems and methods to monitor on- and off-campus billing by provider-based facilities to help implement the Bipartisan Budget Act of 2015 and better monitor billing by individual facilities.
• Require hospitals to submit attestations and supporting documentation for all of their provider-based facilities, both on and off campus with a deadline after which Medicare would deny claims for services in provider-based facilities that do not have an attestation on file with CMS.
• Determine how to address the issue of grandfathered facilities that do not meet regulatory requirements after January 1, 2017, and determine whether they may continue billing as provider-based facilities if they later come into compliance.
• Ensure that its regional offices and MACs apply provider-based requirements appropriately when reviewing documentation during their attestations reviews.
• Recover overpayments and take action to ensure hospitals and facilities improperly billing as provider-based do not receive higher provider-based payment in the future until non-compliance is corrected.

Requirements to be a PBD and Documents to Prove It

Hospitals need to understand the requirements for provider-based status, ensure that any on-campus or off-campus facilities for which the hospital is billing as provider-based meets the requirements, and be prepared to furnish appropriate documentation to CMS to support the PBD designation. The OIG report contained valuable information on the requirements and supporting documentation that is summarized below. Hospitals should read the OIG report for complete details of everything discussed in this article.

Requirement: A provider-based facility and the main provider must be operated under the same license, unless State laws prohibit this or require separate licenses.
Supporting Documentation: Copy of the State license or documentation that the State in which the facility is located requires a separate license

Requirement: Integrated clinical services including same clinical privileges, same monitoring and oversight, reporting relationship between PBD medical director and hospital chief medical officer, oversight by hospital medical staff committees, a unified medical records retrieval system, and integrated and fully accessible services.
Supporting Documentation: Information about whether professional staff of the PBD has clinical privileges at the main provider, a copy of the record retrieval policy of the main provider and provider-based facility, and examples of inpatient and outpatient service integration

Requirement: Fully integrated financial operations including costs reporting and financial status.
Supporting Documentation: Appropriate section of a main provider’s cost report or trial balance that show the provider-based facility’s revenues and expenses

Requirement: Provider-based facility is held out to the public and other payers as part of the main provider.
Supporting Documentation: Letterhead with a shared name, websites, and other examples to show that the facility is part of the main provider

Requirement: Compliance with applicable rules related to hospital anti-dumping, nondiscrimination, health and safety, Medicare agreement and Medicare payment.
Supporting Documentation: Copies of anti-dumping and nondiscrimination policies

Requirement (Off-Campus PBD): The hospital main provider must own 100-percent of the provider-based facility, have final responsibility and approval for administrative and personnel decisions, have the same governing body, and operate under the same organizational documents.
Supporting Documentation: Bylaws for the main provider and provider-based facility

Requirement (Off-Campus PBD): Hospital and PBD must have the same frequency, intensity, and level of accountability reporting relationship that exists between the main provider and one of its existing facilities plus additional requirements concerning direct supervision, monitoring, and oversight of the provider-based facility and the integration of administrative functions (e.g., billing services, payroll).
Supporting Documentation: An organizational chart that reflects reporting relationships and a list of the integrated administrative functions

Requirement (Off-Campus PBD): A provider-based facility must be located within a 35-mile radius of the main provider’s campus (with some exceptions).
Supporting Documentation: Maps indicating the location of each facility

Requirement (Off-Campus PBD): When providing treatment to a Medicare beneficiary that is not required by anti-dumping rules, off-campus PBDs must give beneficiaries written notice of potential hospital and physician co-insurance liabilities including an estimate of the amount of the additional liability before delivering the service.
Supporting Documentation: A copy of the form given to patients and a copy of policies regarding distribution of the form

It seems obvious that the discussions and changes regarding provider-based status are not over. So stay tuned for further news and be prepared for what may come.

Dilemma:
How do you code COPD with Acute Exacerbation of Asthmatic Bronchitis?

Solution:

Two codes are necessary to capture the full diagnosis, one code for the Acute Exacerbation of COPD (J44.1) plus a second code to identify the type of Asthma (J45.901).
Per ICD-10-CM, coders are instructed as follows:

Bronchitis (diffuse) (fibrinous) (hypostatic) (infective) (membranous) (J40)

Asthmatic (J45.9)

Chronic (J44.9)

with

Acute lower respiratory infection (J44.0)

Exacerbation (acute) (J44.1)

OR

Asthma, asthmatic (bronchial) (catarrh) (spasmodic) (J45.909)

with

Chronic Obstructive Bronchitis (J44.9)

with

Acute Lower Respiratory Infection (J44.0)

Exacerbation (acute) (J44.1)

Chronic Obstructive Pulmonary Disease (J44.9)

with

Acute Lower Respiratory Infection (J44.0)

Exacerbation (acute) (J44.1)

Under category (J44) (Other Chronic Obstructive Pulmonary Disease) there is a Code also note instructing coders to code the type of Asthma, if applicable (J45.-). In this case, Unspecified Asthma with Acute Exacerbation (J45.901) is added.

Two things to remember:

1. Since an Acute Exacerbation is a worsening of a Chronic Condition, we automatically know that the Asthmatic Bronchitis is a Chronic condition.
2. The diagnosis of Acute Asthmatic Bronchitis is not the same as Acute Bronchitis.

If an MD documents Acute Bronchitis and then further specifies it as Acute Asthmatic Bronchitis, a code for Acute Bronchitis (J44.0) is not coded in addition. In this case, the patient does not have Acute Bronchitis, only Acute Asthmatic Bronchitis.

If the documentation is unclear as to whether a patient has Acute Bronchitis and an Acute Exacerbation of Asthmatic Bronchitis or just an Acute Exacerbation of Asthmatic Bronchitis, query the physician for clarification. Work with your physicians to help them understand the different descriptions and options in ICD-10-CM.

Information Source(s):

• ICD-10-CM Official Coding Guidelines
• ICD-10-CM and ICD-10-PCS Coding Handbook, Chapter 19 – Diseases of the Respiratory System, written by Nelly Leon-Chisen, RHIA, American Hospital Association
• TruCode encoder 
• ICD-10-CM Expert for Hospitals, by Optum

National Medicare (CMS) and their local Administrative Contractors (MACs) are responsible for a variety of different tasks – processing and paying claims, educating providers, ensuring payments are appropriate, and verifying that providers are following the Medicare regulations. It’s a big job but, lucky for them, they have help, especially in the area of oversight. There are the Recovery Auditors, the Quality Improvement Organizations (QIOs), Supplemental Medical Review Contractors (SMRCs), Comprehensive Error Rate Testing (CERT) auditors, and the Office of Inspector General (OIG). A recent OIG audit concerning mechanical ventilation found billing errors so the OIG offered a number of recommendations to CMS on how to make things better.

The OIG conducted a review to determine whether Medicare payments to hospitals for inpatient claims with certain MS-DRGs that required 96 or more consecutive hours of mechanical ventilation complied with Medicare requirements. MS-DRG 207 (respiratory system diagnosis) and MS-DRG 870 (septicemia or severe sepsis) both require that the patient has received 96 hours or more continuous mechanical ventilation, indicated on the claim with procedure code 96.72. These MS-DRGs pay a higher reimbursement rate than the corresponding MS-DRG assignments for a patient who did not receive 96 hours or more of ventilation.

Due to findings from previous OIG audits and the known risk of overpayments associated with mechanical ventilation, CMS has already taken actions to reduce the number of payment errors. They have claims processing edits based on the inpatient admission length of stay and also have provided education concerning the requirements for coding mechanical ventilation of 96 hours or more. One such education offering is the October 2011 Medicare Quarterly Compliance Newsletter.

In the current review, the OIG identified overpayments of $1.5 million for the specific claims reviewed. The OIG estimates overpayments of over $19.5 million for MS-DRGs 207 and 870 for the two-year audit period. Based on this finding, they determined current controls were inadequate to prevent incorrect billing and recommended additional actions by CMS to reduce payment errors. Specifically the current billing edit is based on total length of stay – the OIG recommends the edit be modified to look at the date mechanical ventilation begins and the discharge date to ensure there is sufficient time for 96 or more hours of mechanical ventilations. CMS concurred with the recommendation and replied, “Effective October 1, 2016, CMS will implement an edit to ensure correct coding of mechanical ventilation greater than 96 consecutive hours by using the mechanical ventilation procedure service date as the start date to calculate consecutive days.” CMS published official guidance for this in Transmittal 3504 from April 2016. To fulfill other recommendations from the audit Medicare will also be recouping the identified overpayments, expanding their own reviews, and providing additional education.

Hospitals need to be sure their coders understand the correct assignment of the procedure code for mechanical ventilation. Coders also need to be aware of the change in procedure code description from ICD-9 to ICD-10. The I-10 description for 5A1955Z is Respiratory ventilation, greater than 96 consecutive hours, which differs from the I-9 procedure code 96.72 description of 96 consecutive hours or more. The “greater than” description equates to a patient being on continuous mechanical ventilation for at least five (5) days, one day longer than the minimum 4 days of “96 hours or more.” This means Medicare’s new edit for October 2016 will look for less than 5 days from the date of initiation of mechanical ventilation until discharge.

Hospitals may want to consider some internal education and/or audits of claims assigned this procedure code. In other words, hospitals may want to “oversight” themselves, before oversight by Medicare or the overseers of Medicare oversight.

Growing up in the south, I remember being told that summer is mosquito season. What I found in writing this article is that it’s more about the temperature levels. Specifically, when temperatures reach a consistent 50°F mosquito eggs begin hatching and mosquito season begins. So, in more temperate parts of the nation, mosquitoes can be present year-round. Here in my home state of Alabama the mosquito season typically begins in early March.

I also learned that there are over 3,000 different species of mosquitoes throughout the world; currently 176 of these species has been recognized in the United States. Today, we are focusing on just one group of mosquito, Aedes mosquitoes that can transmit the Zika virus.

About the Virus

The Zika Virus was first discovered in 1947 in the Zika Forest of Uganda. The first human cases of the virus were detected in 1952 and since outbreaks have been reported in tropical Africa, Southeast Asia, and the Pacific Islands. The disease is transmitted by Aedes mosquitoes who also transmit three other vector-borne diseases (dengue, chikungunya and yellow fever).

The Centers for Disease Control (CDC) indicates that most infected people are asymptomatic. When a person is symptomatic, common symptoms of the virus normally lasts for 2-7 days and can include:

• Acute onset of fever,
• Maculopapular rash,
• Headache,
• Muscle and joint pain, and
• Conjunctivitis.

The World Health Organization (WHO) notes two serious complications reported by Brazil:

• July 2015: Brazil reported an association between the virus and Guillain-Barre syndrome.
• October 2015: Brazil reported an association between the virus infection and microcephaly.

On February 1, 2016 the WHO declared the Zika virus a Public Health Emergency of International Concern (PHEIC) and since then has been posting weekly Zika Situation Reports. The last report posted at the time of this article was June 23, 2016. Key notes of concern from the June 23rd Summary includes:

• As of June 22, 2016, 61 countries and territories report continuing mosquito-borne transmissions of which:
• 47 countries are experiencing a first outbreak of the virus since 2015 with ongoing transmissions by mosquitoes.
• Ten countries have reported evidence of person-to-person transmission of the virus noted to probably be via a sexual route.
• As of June 22, 2016, microcephaly and other central nervous system (CNS) malformations potentially associated with the virus or suggestive of congenital infection have been reported by twelve countries or territories.
• As of June 9th, the CDC has reported three live born infants with birth defects and three pregnancy losses with birth defects with laboratory evidence of possible Zika virus infection.
• 13 Countries and territories worldwide have reported an increase incidence of Guillain-Barre syndrome (GBS) and/or laboratory confirmation of a Zika virus infection among GBS cases.

Medicare to Cover Diagnostic Testing for Zika Virus

CMS has released MLN Matters Article SE1615 titled Medicare Coverage of Diagnostic Testing for Zika Virus. Specific Provider Action Needed includes:

• Informing the public that Medicare covers testing under Medicare Part B “as long as the clinical diagnostic laboratory test is reasonable and necessary for the diagnosis or treatment of a person’s illness or injury,”
• As currently there are no HCPCS codes for testing of the Zika virus, laboratories furnishing the Zika tests should contact their Medicare Administrative Contractors (MACs) for guidance on appropriate billing codes to use on the claims; and
• Labs should provide “resources and cost information as may be requested by the MACs in order for the MACs to establish appropriate payment amounts for the tests.”

ICD-10-CM Coding for Zika

The Zika Virus was discussed during the March 9-10, 2016 ICD-10 Coordination and Maintenance Committee Meeting. ICD-10-CM currently classifies the virus to code A92.8, Other specific mosquito-borne virus.

In December 2015 the WHO noted the need for a separate code for the Zika Virus to allow for tracking of cases. The WHO proposed a new code for the Zika virus (A92.5). To be consistent with the planned WHO ICD-10 update, effective October 1, 2016 ICD-10-CM will include the addition of the following:

Chapter 1 – Certain Infectious and Parasitic Diseases (A00-B99)

A92 – Other Mosquito-borne viral fevers

New Code: A92.5 – Zika virus disease
Zika virus fever
Zika virus infection
Zika, NOS

Prevention

The American Mosquito Control Association (AMCA) is an association “dedicated to providing leadership, information and education leading to the enhancement of public health and quality of life through the suppression of mosquitoes.” In fact, this past week of June 26 – July 2nd was National Mosquito Control Awareness Week 2016. In a Press Release template, the AMCA® reminds the public to practice the THREE D's of Mosquito Prevention and Protection:

• Drain: Empty out water containers at least once per week
• Dress: Wear long sleeves, long pants, and light-colored, loose-fitting clothing, and
• Defend: Properly apply an approved repellant such as DEET, picaridin, IR3535 or oil of lemon-eucalyptus.

TRANSMITTALS

Recovering Overpayments from Providers Who Share Tax Identification Numbers

• MLN Matters Article SE1612
• Issued June 22, 2016
• Affects providers of services and suppliers who share the same Tax Identification Number (TIN) even though they may have different National Provider Identifiers or other billing numbers used to bill Medicare.

Summary of Changes: Allows CMS to recover payments made to a provider of services or supplier that shares the same TIN with a provider of services or supplier that has an outstanding Medicare overpayment across multiple states within a Medicare Administrative Contractor (MAC) jurisdiction

October Quarterly Update to 2016 Annual Update of HCPCS Codes Used for Skilled Nursing Facility (SNF) Consolidated Billing (CB) Enforcement

• Transmittal 3546, Change Request 9688, MLN Matters Article MM9688
• Issued June 17, 2016, Effective October 1, 2016, Implementation October 3, 2016
• Affects physicians, providers, and suppliers submitting claims to all Medicare Administrative Contractors (MACs) for services to Medicare beneficiaries who are in a Part A Skilled Nursing Facility (SNF) stay.

Summary of Changes: This notification provides updates to the lists of Healthcare Common Procedure Coding System (HCPCS) codes that are subject to the consolidated billing provision of the SNF Prospective Payment System (PPS)

JW Modifier: Drug Amount Discarded/Not Administered to any Patient

• Transmittal 3538, Change Request 9603, MLN Matters Article MM9603
• Issued June 9, 2016, Effective January 1, 2017, Implementation January 3, 2017
• Affects physicians, providers, and suppliers submitting claims to Medicare Administrative Contractors (MACs) for drugs or biologicals administered to Medicare beneficiaries.

Summary of Changes: Transmittal 3530, dated May 24, 2016, is being rescinded and replaced by Transmittal 3538 to update the Effective and Implementation dates. Effective January 1, 2017, claims for discarded drug or biological amount not administered to any patient, shall be submitted using the JW modifier. Also, effective January 1, 2017, providers must document the discarded drugs or biologicals in patient's medical record. This CR updates the Section 40 - Discarded Drugs and Biologicals of Chapter 17 of the Claims Processing Manual 100-04.

Claim Status Category and Claim Status Codes Update

• Transmittal 3527, Change Request 9550, MLN Matters Article MM9550
• Issued May 20, 2016, Effective October 1, 2016, Implementation October 3, 2016
• Affects physicians, other providers, and suppliers submitting claims to Medicare Administrative Contractors (MACs) for services provided to Medicare beneficiaries..

Summary of Changes: The purpose of this Change Request (CR) is to update as needed the Claim Status and Claim Status Category Codes used for the Accredited Standards Committee (ASC) X12 276/277 Health Care Claim Status Request and Response and ASC X12 277 Health Care Claim Acknowledgment transactions. This Recurring Update Notification (RUN) can be found in Chapter 31, Section 20.7.

July 2016 Update of the Hospital Outpatient Prospective Payment System (OPPS)

• Transmittal 3523, Change Request 9658, MLN Matters Article MM 9658
• Issued May 13, 2016, Effective July 1, 2016, Implementation July 5, 2016
• Affects providers and suppliers who submit claims to Medicare Administrative Contractors (MACs), including Home Health and Hospice (HH&H) MACs, for services provided to Medicare beneficiaries and which are paid under the Outpatient Prospective Payment System (OPPS).

Summary of Changes: This Recurring Update Notification describes changes to and billing instructions for various payment policies implemented in the July 2016 OPPS update.

July 2016 Integrated Outpatient Code Editor (I/OCE) Specifications Version 17.2

• Transmittal 3524, Change Request 9661,MLN Matters Article MM9661
• Issued May 13, 2016, Effective July 1, 2016, Implementation July 5, 2016
• Affects providers submitting claims to Medicare Administrative Contractors (MACs) for outpatient services provided to Medicare beneficiaries and paid under the Outpatient Prospective Payment System (OPPS) and for outpatient claims from any non-OPPS provider not paid under the OPPS. It is also intended for claims for limited services when provided in a Home Health Agency (HHA) not under the Home Health PPS (HH PPS) or claims for services to a hospice patient for the treatment of a non-terminal illness..

Summary of Changes: This notification provides the Integrated OCE instructions and specifications for the Integrated OCE that will be utilized under the OPPS and Non-OPPS for hospital outpatient departments, community mental health centers, all non-OPPS providers, and for limited services when provided in a home health agency not under the Home Health Prospective Payment System or to a hospice patient for the treatment of a non-terminal illness. The attached Recurring Update Notification applies to 100-04, Chapter 4, section 40.1

OTHER NEWS

Temporary Pause of QIO Short Stay Reviews

• Inpatient Hospital Reviews Webpage
• Updated June 6, 2016

Summary of Changes: CMS requires that beginning June 6, 2016, the BFCC-QIOs re-review all short stay patient status claims that were denied under the QIO medical review process.

Medicare Will Use Private Payor Prices to Set Payment Rates for Clinical Diagnostic Laboratory Tests Starting in 2018

• CLFS Payment Rates Press Release
• Issued June 17, 2016
• Affects laboratories performing clinical diagnostic laboratory tests

Summary of Changes: CMS released a final rule implementing Section 216(a) of the Protecting Access to Medicare Act of 2014 (PAMA), requiring laboratories performing clinical diagnostic laboratory tests to report the amounts paid by private insurers for laboratory tests. Medicare will use these private insurer rates to calculate Medicare payment rates for laboratory tests paid under the Clinical Laboratory Fee Schedule (CLFS) beginning January 1, 2018. Further details of this rule can be found by clicking here.

CMS Proposes Rule to Improve Health Equity and Care Quality in Hospitals

• https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2016-Press-releases-items/2016-06-13.html
• Issued June 13, 2016
• Affects the 6,228 hospitals and critical access hospitals that participate in Medicare or Medicaid.

Summary of Changes: The rule proposes to reduce overuse of antibiotics and implement comprehensive requirements for infection prevention. The proposed rule also advances protections for traditionally underserved and often excluded populations based on race, color, religion, national origin, sex (including gender identity), age, disability, or sexual orientation. For a closer look at this proposed rule, click here.

Medicare Makes Enhancements to the Shared Savings Program to Strengthen Incentives for Quality Care

• https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2016-Press-releases-items/2016-06-06.html
• Issued June 6, 2016
• Affects Accountable Care Organizations in the Medicare Shared Savings Program.

Summary of Changes: CMS released a final rule improving how Medicare pays Accountable Care Organizations in the Medicare Shared Savings Program for delivering better patient care. Medicare is moving away from paying for each service a physician provides towards a system that rewards physicians for coordinating with each other. Accountable Care Organizations are a major part of that transition, rewarding providers that deliver high-quality, efficient, and coordinated care for patients.