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Q:

If a patient is admitted and documented with a condition in which laterality can be distinguished such as bilateral osteoarthritis of the knees, and only one side is being treated, would you report a diagnosis code only for the side receiving treatment?

A:

No.
You would assign the “bilateral” code.

• When a patient has a bilateral condition and the condition still exists on both sides, then a bilateral code is reported.
• Once one side has been treated and that condition no longer exists on that particular side then the appropriate “unilateral” code would be assigned.
• If treatment does not completely resolve the condition for the first side treated, then the “bilateral” code would continue to be reported.

Example #1: Patient is documented with bilateral osteoarthritis of the knees (stage IV of the right and stage III of the left) and is admitted for total knee replacement of the right knee.

ICD-10-CM code assignment would be:

M17.0 for Bilateral Primary OA of Knee

Example #2: H&P states patient with history of bilateral senile nuclear sclerosis cataract. Patient had great success with cataract surgery for the left eye 3 months prior and is now admitted for surgery on the right eye.

ICD-10-CM code assignment would be:

H25.11 for Age-related Nuclear Cataract, Right Eye

Example #3: Documentation shows patient with history of bilateral osteoarthritis of the hip. Total hip arthroplasty was performed on the left side 9 months prior successfully eliminating all pain and symptoms on that side. Patient is admitted now with continued pain on the right side which has been interfering with her daily activities.

ICD-10-CM codes assigned would be:

M16.11 for Unilateral Primary OA, Right Hip and
Z96.642 for Presence of Left Artificial Hip Joint

Q:

What is new for outpatient rehabilitative therapy services for 2017?

A:

Answer: CPT is deleting the existing rehabilitative therapy evaluation codes 97001-97004 and replacing them with eight new codes, CPTs 97161-97168. The new codes include complexity levels of low, moderate, and high for the evaluation codes for physical therapy (PT) and occupational therapy (OT) respectively and one re-evaluation code for each. Below are the new codes with their short descriptors, but the long descriptors can be found in the table at the end of MLN Matters Article MM9782 which also adds the new codes as “always therapy” codes to the therapy code list.

• CPT 97161 – PT Evaluation, Low Complexity, 20 minutes
• CPT 97162 – PT Evaluation, Moderate Complexity, 30 minutes
• CPT 97163 – PT Evaluation, High Complexity, 45 minutes
• CPT 97164 – PT Revaluation of Established Plan of Care

• CPT 97165 – OT Evaluation, Low Complexity, 30 minutes
• CPT 97166 – OT Evaluation, Moderate Complexity, 45 minutes
• CPT 97167 – OT Evaluation, High Complexity, 60 minutes
• CPT 97168 – OT Revaluation of Established Plan of Care

Medicare has also released the Therapy Cap Values for 2017 in MLN Matters Article MM9865. For physical therapy and speech-language pathology combined, the 2017 therapy cap will be $1,980. For occupational therapy, the cap for 2017 will be $1,980. As a reminder, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) extended the therapy caps exceptions process through December 31, 2017 and also extended the application of the therapy caps, and related provisions, to outpatient hospitals until January 1, 2018. The exceptions process allows billing of therapy services exceeding the limit with the KX modifier if the services are medically necessary.

TRANSMITTALS

New Physician Specialty Code for Hospitalist

• MLN Matters® Number: MM9716
• Related Change Request (CR) #: CR 9716
• Related CR Release Date: October 28, 2016
• Effective Date: April 1, 2017
• Related CR Transmittal #: R3637CP and R274FM
• Implementation Date: April 3, 2017
• Affects physicians, other providers, and suppliers submitting claims to Medicare Administrative Contractors (MACs) for services to Medicare beneficiaries.
• https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/MM9716.pdf

Summary: The Centers for Medicare and Medicaid Services (CMS) has established a new physician specialty code for Hospitalist (C6).

Modifications to the National Coordination of Benefits Agreement Crossover Process

• MLN Matters® Number: MM9681
• Related Change Request (CR) #: CR 9681
• Related CR Release Date: October 27, 2016
• Effective Date: April 1, 2017
• Related CR Transmittal #: R1733OTN
• Implementation Date: April 3, 2017
• Affects providers, including hospices, submitting institutional claims to Medicare Administrative Contractors (MACs) requiring Coordination of Benefits (COB) for services provided to Medicare beneficiaries.
• https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/MM9681.pdf

Summary: Modifies the Part A shared system to ensure that all 837 institutional Coordination of Benefits (COB) claims will contain a Claim Adjustment Reason Code and Remittance Advice Remark Code combination, that hospital day counts may not be entered duplicatively on incoming claims submissions to Medicare, and that Present on Admission (POA) indicators are only permitted on incoming inpatient hospital-oriented claims.

Instructions to Process Services Not Authorized by the Veterans Administration (VA) in a Non-VA Facility Reported with Value Code (VC) 42

• MLN Matters® Number: MM9818
• Related Change Request (CR) #: CR 9818
• Related CR Release Date: October 28, 2016
• Effective Date: October 1, 2013
• Related CR Transmittal #: R3635CP
• Implementation Date: April 3, 2017
• Affects hospitals and skilled nursing facilities who submit inpatient claims to Medicare Administrative Contractors (MACs) for services provided to Medicare beneficiaries.
• https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/MM9818.pdf

Summary: Clarifies how Medicare contractors shall process inpatient claims for services in a Non-VA facility that were not authorized by the VA.

Issuing Compliance Letters to Specific Providers and Suppliers Regarding Inappropriate Billing of Qualified Medicare Beneficiaries (QMBs) for Medicare Cost-Sharing

• MLN Matters®Number: MM9817
• Related Change Request (CR) #: CR 9817
• Related CR Release Date: November 4, 2016
• Effective Date: December 6, 2016
• Related CR Transmittal #: R1747OTN
• Implementation Date: March 8, 2017
• Affects providers submitting claims to Medicare Administrative Contractors (MACs) and Durable Medical Equipment MACs (DME MACs) for services provided to certain Medicare beneficiaries.
• https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/MM9817.pdf

Summary: Federal law bars Medicare providers from charging individuals enrolled in the Qualified Medicare Beneficiary Program (QMB) for Medicare Part A and B deductibles, coinsurances, or copays. Change Request (CR) 9817 instructs MACs to issue a compliance letter instructing named providers and suppliers to refund any erroneous charges and recall any past or existing billing with regard to improper QMB billing.

Therapy Cap Values for Calendar Year (CY) 2017

• MLN Matters® Number: MM9865
• Related Change Request (CR) #: CR 9865
• Related CR Release Date: November 4, 2016
• Effective Date: January 1, 2017
• Related CR Transmittal #: R3644CP
• Implementation Date: January 3, 2017
• Affects physicians, therapists, and other providers submitting claims to Medicare Administrative Contractors (MACs), including Home Health & Hospice MACs, for outpatient therapy services provided to Medicare beneficiaries.
• https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/MM9865.pdf

Summary: Describes the amounts and policies for outpatient therapy caps for CY 2017. For physical therapy and speech-language pathology combined, the 2017 therapy cap will be $1,980. For occupational therapy, the cap for 2017 will be $1,980.

Quarterly Update to the Correct Coding Initiative (CCI) Edits, Version 23.0, Effective January 1, 2017

• MLN Matters®Number: MM9847
• Related Change Request (CR) #: CR 9847
• Related CR Release Date: November 4, 2016
• Effective Date: January 1, 2017
• Related CR Transmittal #: R3646CP
• Implementation Date: January 3, 2017
• Affects physicians, providers, and suppliers submitting claims to Medicare Administrative Contractors (MACs) for services provided to Medicare beneficiaries.
• https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/MM9847.pdf

Summary: Instructs MACs of the normal update to the Correct Coding Initiative (CCI) Procedure to Procedure (PTP) edits, effective January 1, 2017.

Payment Reduction for X-Rays Taken Using Film

• MLN Matters®Number: MM9727
• Related Change Request (CR) #: CR 9727
• Related CR Release Date: August 12, 2016
• Effective Date: January 1, 2017
• Related CR Transmittal #: R3583CP
• Implementation Date: January 3, 2017
• Affects physicians, other providers, and suppliers who submit Part B claims to Medicare Administrative Contractors (MACs) for X-ray imaging services provided to Medicare beneficiaries.
• https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/MM9727.pdf

Summary: Reduces the technical component (TC) (including the TC portion of a global service) of X-ray imaging services provided using film.

2017 Annual Update to the Therapy Code List

• MLN Matters®Number: MM9782
• Related Change Request (CR) #: CR 9782
• Related CR Release Date: November 10, 2016
• Effective Date: January 1, 2017
• Related CR Transmittal #: R3654CP
• Implementation: January 3, 2017
• Affects physicians, therapists, and other providers, including Comprehensive Outpatient Rehabilitation Facilities (CORFs), submitting claims to Medicare Administrative Contractors (MACs), including Home Health & Hospice MACs, for outpatient therapy services provided to Medicare beneficiaries.
• https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/MM9782.pdf

Summary: Updates the therapy code list for Calendar Year (CY) 2017 by adding eight “always therapy” codes (97161 – 97168) for physical therapy (PT) and occupational therapy (OT) evaluative procedures and deletes the four codes currently used to report these services (97001 – 97004).

ICD-10 Coding Revisions to National Coverage Determination (NCDs)

• Transmittal 1755
• Date: November 18, 2016
• Change Request 9861
• https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R1755OTN.pdf

Summary: The 10th maintenance update of ICD-10 conversions and other coding updates specific to national coverage determinations (NCDs). These NCD coding changes are the result of newly available codes, coding revisions to NCDs released separately, or coding feedback received.

Annual Update of HCPCS Codes Used for Home Health Consolidated Billing Enforcement

• MLN Matters®Number: MM9771
• Related Change Request (CR) #: CR 9771
• Related CR Release Date: October 7, 2016
• Effective Date: January 1, 2017
• Related CR Transmittal #: R3618CP
• Implementation Date: January 3, 2017
• Affects Home Health Agencies (HHAs) and other providers submitting claims to Medicare Administrative Contractors (MACs) for services to Medicare beneficiaries in a home health period of coverage.
• https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/MM9771.pdf

Summary: 2017 annual update to the list of HCPCS codes used by Medicare systems to enforce consolidated billing of home health services.

Office of Inspector General Report: Stem Cell Transplantation

• MLN Matters®Number: SE1624
• Article Release Date: November 22, 2016
• Affects providers billing Medicare Administrative Contractors (MACs) for services related to stem cell transplantation.
• https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/SE1624.pdf

Summary: Addresses issues of incorrect billing as a result of the February 2016 OIG report and clarifies coverage of stem cell transplantation.

MEDICARE HOSPITAL PAYMENT RULES

Hospital Inpatient Prospective System (IPPS) Final Rule Correction Notice

• October 31, 2016
• https://www.gpo.gov/fdsys/pkg/FR-2016-10-31/pdf/2016-26182.pdf

Summary: This document corrects a typographical error in the final rule that appeared in the August 22, 2016 Federal Register as well as additional typographical errors in a related correction to that rule that appeared in the October 5, 2016 Federal Register.

Hospital Outpatient Prospective System (OPPS) and ASC Final Rule

• November 1, 2016
• http://tinyurl.com/gvm4vor

Summary: This final rule with comment period revises 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 CMS’s continuing experience with these systems.

OTHER MEDICARE ANNOUNCEMENTS

2017 Medicare Parts A & B Premiums and Deductibles Announced

• November 10, 2016
• https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2016-Press-releases-items/2016-11-10-2.html

Summary: The 2017 premiums for the Medicare inpatient hospital (Part A) and physician and outpatient hospital services (Part B) programs.

New Recovery Auditor Contracts Awarded

• October 31, 2016 – CMS has awarded the next round of Medicare Fee-for-Service Recovery Audit Contractor (RAC) contracts to:
• Region 1 – Performant Recovery, Inc.
• Region 2 – Cotiviti, LLC
• Region 3 – Cotiviti, LLC
• Region 4 – HMS Federal Solutions
• Region 5 – Performant Recovery, Inc
• RAC Recent Updates webpage

The RACs in Regions 1-4 will perform postpayment review to identify and correct Medicare claims that contain improper payments (overpayments or underpayments) that were made under Part A and Part B, for all provider types other than Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) and Home Health/Hospice. The Region 5 RAC will be dedicated to the postpayment review of DMEPOS and Home Health/Hospice claims nationally.

CMS Hospital Value-Based Purchasing Program Results for Fiscal Year 2017

• November 1, 2016
• Adjustments to Medicare hospital payments based on the quality of care they provide to patients as determined by quality reporting
• 2017 VBP Fact Sheet
• Includes link to FY2017 Hospital VBP incentive payment adjustment factors

Fiscal Year 2017 HHS OIG Work Plan

• November 10, 2016
• https://oig.hhs.gov/reports-and-publications/workplan/index.asp

Summary: The U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) Work Plan for fiscal year (FY) 2017 summarizes new and ongoing reviews and activities that OIG plans to pursue with respect to HHS programs and operations during the current fiscal year and beyond.

There are some things in America’s healthcare system that just seem wrong – for example, the unreasonable and escalating price of prescription drugs and the significant increase in healthcare premiums. But like Newton’s third law, for every opinion of wrong, there is an equal and opposite opinion that it is not wrong. Neither the drug companies nor healthcare insurers think their prices or premiums are unreasonable or wrong. There have been concerns over the past few years about the rates Medicare and Medicare patients pay for services furnished in provider-based departments (PBDs) of hospitals. Medicare, Congress, and many others think it is wrong that services in PBDs cost significantly more than the same services provided in a physician’s office setting. Hospitals, on the other hand, understand that these PBDs must comply with the myriad of regulations that apply to hospitals which increases the costs of operation of these locations.

But Congress has the power to make laws and in Section 603 of the Bipartisan Budget Act of 2015, the law requires that “new” off-campus hospital provider-based departments no longer be paid the higher payment rates of the Outpatient Prospective Payment System (OPPS), but instead be paid under a different payment system whose rates are more equitable with physician office rates. In the 2017 OPPS Final Rule, CMS provides instructions on the implementation of this requirement to be effective January 1, 2017 as mandated by the Act.

Before getting into the instructions, here is a reminder of the “new” words CMS is using to describe these services. Services and facilities that are an exception from the new payment requirements – that is the new payment system does not apply to them and they will continue to be paid under OPPS are referred to by CMS as “excepted” services/facilities. “Nonexcepted” services are services without an exception to the new rule, so the new payment method applies to nonexcepted services and nonexcepted locations.

The first thing to consider is to what facilities and services does the law apply and what facilities and services are excepted from the requirements. Excepted facilities will continue to be paid under the OPPS payment system and include:

• On-campus hospital provider-based departments
• Provider-based departments on the campus of or within 250 yards of a remote location of a hospital
• Services provided at a dedicated emergency department
• Off-campus hospital provider-based departments that were furnishing services prior to November 2, 2015 and billed for those service within timely filing limits – note that this is a change from the wording of the proposed rule which stated that only off-campus PBDs that were billing for services prior to November 2, 2015 were exempt.

So this means the new payment system applies to new off-campus hospital provider-based departments that began furnishing and billing for services on or after November 2, 2015.

There are some circumstances where an off-campus PBD that is currently excepted could lose its exception status. If an existing off-campus PBD relocates, it will no longer be excepted and will be paid under the new payment system. The only rare and limited exception to this relocation rule is if the relocation is due to extraordinary circumstances outside the hospital’s control such as natural disasters. CMS did not finalize the rule that PBDs would lose their exception status if they expanded their service line and offered new types of services. Also the excepted status for an off-campus PBD can be transferred to a new owner if ownership of the main provider is also transferred and the Medicare provider agreement is accepted by the new owner.

One of the biggest issues that CMS had to work out was how to pay for services provided at non-excepted off-campus PBDs. You may remember they proposed to pay only the physicians at a non-facility rate for these services and provide no payment to the hospital. Due to concerns about this proposal resulting in potentially inappropriate hospital/physician financial relationships that might implicate the physician self-referral law and Federal anti-kickback statute, they came up with another option. Hospitals will continue to bill on an institutional claim form (UB) and will append a “PN” modifier to services provided in a non-excepted off-campus PBD. Medicare will make payment to the hospital under the Medicare Physician Fee Schedule (MPFS) at new rates established for this purpose. These rates are set at 50% of the OPPS payment rates. The packaging requirements of OPPS will apply to these services (such as comprehensive APCs, packaged and conditionally packaged services). Also services assigned to an OPPS status indicator of “A” will continue to be paid under the “other” fee schedule by which they are currently paid. This includes therapy services paid under the MPFS, laboratory services when separate payment criteria is met under the Clinical Lab Fee Schedule, separately payable drugs at ASP + 6%, preventive services, etc.

A few other things to know about the new payment system are:

• Partial hospitalization program (PHP) will be paid at the same rate as Community Mental Health Centers (CMHCs)
• Physicians will be paid their professional fee at facility rates
• Hospitals will bill clinic visits at nonexcepted off-campus PBDs with HCPCS code G0463 which will be paid at 50% of the OPPS rate
• Hospitals will report radiation treatment delivery procedures with the HCPCS “G” codes appended with the PN modifier, which will be paid at the MPFS technical component rate
• The following adjustments are not being adopted into the new payment system - outlier payments, the rural sole community hospital (SCH) adjustment, the cancer hospital adjustments, transitional outpatient payments, the hospital outpatient quality reporting payment adjustment, and the inpatient hospital deductible cap to the cost-sharing liability for a single hospital outpatient service
• The supervision rules that apply for hospitals will continue to apply for off-campus PBDs that furnish nonexcepted items and services
• Beneficiary cost-sharing under MPFS of 20% will apply

CMS states they will likely continue this payment method through 2018. At that time, they may develop a different payment methodology, likely similar to their original proposal.

Whether you think it is wrong or right, this is the payment method for new off-campus PBDs we are stuck with for now. I encourage all affected providers to read the details in the final rule (beginning on page 569 of the display copy) and submit comments to CMS when allowed. CMS did make several concessions based on the comments they received from the proposed rule and submitting comments is one way to let your opinion be known and hopefully heard.

“Inpatient only” services are generally, but now always, surgical services that require inpatient care because of the nature of the procedure, the typical underlying physical condition of patient who require the service, or the need for at least 24 hours of postoperative recovery time or monitoring before the patient can be safely discharged.-Source: Medicare Claims Processing Manual, Chapter 4 – Part B Hospital

Annually, CMS releases an updated Inpatient Only (IPO) List in the Calendar Year (CY) Outpatient Prospective Payment System (OPPS) Final Rule. CMS is removing seven CPT codes from this list for CY 2017. This article reminds the reader of two important principles of the IPO list, outlines the criteria for potential removal from the list, lists the codes being removed and their new status indicator assignment, and ends with public comments regarding the removal of Total Knee Arthroplasty (TKA) CPT code 22447 from the IPO list. 

Important Principles of the IPO List

CMS notes in the 2017 OPPS Final Rule that it is not uncommon to receive questions about the IPO list leading them to believe there may be a misunderstanding by some regarding certain aspects of the IPO list. Specifically, the following two aspects:

• “First, just because a procedure is not on the IPO list does not mean that the procedure cannot be performed on an inpatient basis. IPO list procedures must be performed on an inpatient basis (regardless of the expected length of the hospital stay) in order to qualify for Medicare payment, but procedures that are not on the IPO list can be and very often are performed on individuals who are inpatients (as well as individuals who are hospital outpatients and ASC patients).
• Second, the IPO list status of a procedure has no effect on the MPFS professional payment for the procedure. Whether or not a procedure is on the IPO list is not in any way a factor in the MPFS payment methodology.”

Established Criteria for Procedure Removal from Inpatient Only (IPO) List

The criteria for consideration of removal of a CPT code from the IPO list includes the following:

• Most outpatient departments are equipped to provide the services to the Medicare population.
• The simplest procedure described by the code may be performed in most outpatient departments.
• The procedure is related to codes that we have already removed from the IPO list.
• A determination is made that the procedure is being performed in numerous hospitals on an outpatient basis.
• A determination is made that the procedure can be appropriately and safely performed in an ASC, and is on the list of approved ASC procedures or has been proposed by us for addition to the ASC list.

CY 2017 Procedures Removed from the IPO List

‍Codes Removed from IPO List assigned Status Indicators

The spine procedure codes removed from the IPO list are add-on codes to procedures currently performed in the Hospital Outpatient Department and describe variations of (including additional instrumentation used with) the base code procedure. As add-on codes, these codes will be assigned to status indicator “N.”

“The Laryngoplasty codes are related to and clinically similar to CPT code 21495 (Open treatment of hyoid fracture), which is currently not on the IPO list. The two laryngoplasty procedure codes will be assigned to APC 5165 (Level 5 ENT Procedures) with status indicator “J1.”

Response to Solicitation of Public Comments on the Possible Removal of Total Knee Arthroplasty (TKA) Procedure from the IPO List

In the 2017 OPPS Proposed Rule CMS solicited comment from the public on a list of questions relating to the removal of TKA from the IPO list in the future. They also acknowledged the fact that “TKA candidates, although they all have osteoarthritis severe enough to warrant knee replacement, are a varied group in which the anticipated length of hospitalization is dictated more by comorbidities and diseases of other organ systems. Some patients may be appropriate for outpatient surgery while others may be appropriate for inpatient surgery.” But before we review comments received and CMS’s response, let’s look at knee CPTs by the numbers.

Knee CPTs by the Numbers

• 2000: CPT 27447 (Arthroplasty, knee, condyle and plateau; medial and lateral compartments with or without patella resurfacing (total knee arthroplasty)) was placed on the original IPO list in the 2000 OPPS Final Rule (65 FR 18781)
• 4.6 days: The geometric mean average length of stay (GMLOS) in 2000 for the DRG to which uncomplicated TKA procedures were assigned.
• 2.8 days: The GMLOS for the MS-DRG in 2016
• 2002: A similar procedure described by CPT code 27446 (Arthroplasty, knee, condyle and plateau; medial OR lateral compartment) (unicompartmental knee replacement) was removed from the IPO list.
• 2008: CPT code 27446 was added to the ASC covered surgical procedures.
• 2013: CMS Proposed to remove the procedure described by CPT code 27447 from the IPO List in the CY 2013 OPPS/ASC proposed rule. After consideration of public comments, this proposal was not finalized.

The Public Weighs in on Removing CPT 27447 from the IPO List

The following are comments were published in the 2017 OPPS Final Rule.

• “The overwhelming majority of the commenters…supported removing TKA from the IPO list.”
• Those supporting the removal of TKA included “ASCs, therapeutic professional associations, hospital associations, as well as many surgeons.”
• Most supporters “noted that an appropriate patient selection protocol should be used to determine the patients who are best suited for outpatient joint replacement.”
• A few commenters opposing the removal of a TKA procedure represented professional organizations, health systems, and hospital associations. “The comments believed that the increased likelihood that Medicare patients have comorbidities that require the need for intensive rehabilitation after a TKA procedure preclude this procedure from being performed in the outpatient setting. They also state that most outpatient departments are not currently equipped to provide TKA procedures to Medicare beneficiaries, which require exceptional patient selection, exceptional surgical technique, and a carefully constructed postoperative care plan
• Commenters expressed concern about the implications that the removal of this procedure would have for pricing methodologies, target pricing, and reconciliation process in the Comprehensive Care for Joint Replacement and Bundled Payments for Care Improvement Models currently in place through the CMS Innovation Center.

CMS responded to comments in typical CMS fashion by indicating that they “thank the stakeholder public for the many detailed comments on this topic. We will consider all of these comments in future policy making.”

So for now, 27447 remains on the IPO List. The Final Rule and IPO list in Addenda E can be accessed on the CMS Hospital 2017 OPPS web page. Additional guidance about Inpatient-only Services in general can be found in the Medicare Claims Processing Manual, Chapter 4 – Part B Hospital, Section 180.7.

As the holiday season approaches, most of us excitedly anticipate gifts and packages from our friends and relatives for Christmas. In fact, the anticipation is often more thrilling than the actual gift. For those of you who deal with Medicare outpatient services, you may have been, like me, anxiously anticipating the release of the 2017 OPPS Final Rule. The wait is over as CMS released the Final Rule on November 1st. As has been the trend for many years now, CMS continues to increase the packaging of outpatient services under OPPS into more bundled payments. CMS “packages payment for multiple interrelated items and services into a single payment to create incentives for hospitals to furnish services most efficiently and to manage their resources with maximum flexibility.” Our article today examines the new packaging rules for 2017 from the OPPS Final Rule.

Comprehensive APCs

A comprehensive APC (C-APC) results in one bundled payment for the provision of a primary service and all adjunctive services provided to support the delivery of the primary service. The C-APC payment policy was finalized in the 2014 OPPS Final Rule but implementation was delayed until January 2015. For 2017, CMS is adding 25 more C-APCs bringing the total number of C-APCs to 62. Since most of us think more in terms of HCPCS codes (includes CPT codes) rather than APCs, it is easier to understand the impact of this increase in C-APCs by looking at the numbers of HCPCS codes assigned to Status Indicator “J1” which denotes a comprehensive APC primary service.

• January 2015 – 219 HCPCS codes
• January 2016 – 872 HCPCS codes
• January 2017 – 2,737 HCPCS codes

In 2016, CMS added another type of comprehensive APC for a specific combination of services performed in combination with each other and named observation services as this type of C-APC. To accomplish the comprehensive payment for observation, visit codes (all ED visits, critical care, clinic visit, and direct referral to observation) were assigned a Status Indicator of “J2.” A comprehensive APC payment is made for the visit codes when all of the criteria for observation services are met – 8 or more hours of obs reported on the day of or day after the visit code, no services with an SI of “J1” on the claim, and no services with an SI of “T” on the day of or day after observation.

The adjunctive services whose payment is bundled with C-APCs includes just about everything –

• diagnostic procedures,
• lab tests,
• other diagnostic tests and treatments,
• visits and evaluations,
• therapeutic services such as injections and infusions,
• other non-primary surgical procedures and add-on procedures,
• prosthetics, orthotics and other durable medical equipment,
• outpatient department services similar to therapy services (PT, OT, SLP), and
• drugs, biologicals and radiopharmaceuticals.

Only a few services not covered or paid under OPPS are excluded from the C-APC policy. The following services are paid separately in addition to the C-APC payment – mammograms, ambulance services, brachytherapy seeds, pass-through drugs and devices, and preventive services. Self-administered drugs (SADs) that are not otherwise packaged as supplies are also excluded from the C-APC policy; hospitals may hold the patient financially responsible for SADs since Medicare does not cover them.

Medicare makes a complexity adjustment for certain comprehensive services. This means they may increase the payment rate of a C-APC to the next higher paying C-APC in the same clinical family in some incidences

• when more than one service with a “J1” status indicator is reported on the same claim or
• when certain add-on codes are reported with a “J1” service.

Medicare bases the decision to apply a complexity adjustment on frequency and cost thresholds. They modified their criteria for complexity adjustments this year which will result in more code combinations being eligible for the increased payment. Addendum J to the Final Rule includes a listing of the code combinations that will receive a complexity adjustment.

One 2017 C-APC of note is the new Allogeneic Hematopoietic Stem Cell Transplantation (HSCT) C-APC. Per the FR, “The creation of a new C-APC for allogeneic HSCT and the assignment of status indicator “J1” to CPT code 38240 would allow for the costs for all covered OPD services, including donor acquisition services, included on the claim to be packaged into C-APC payment rate.” To appropriately capture costs, CMS is creating a new cost center and a new revenue code, 0815, for reporting all services required to acquire stem cells from a donor, such as National Marrow Donor Program fees, tissue typing, donor evaluation, collection procedures, and the preparation and processing of stem cells. CMS is also putting in place a claim edit that will require revenue code 0815 to be present on the claim if CPT code 38240 is reported.

Laboratory Packaging

Since 2014, Medicare has packaged most clinical diagnostic laboratory tests. They have only paid laboratory tests separately if:

• they are the only services provided to a beneficiary on a claim,
• they are “unrelated” laboratory tests (ordered by a different physician for a different diagnosis and reported with the L1 modifier),
• they are molecular pathology tests, or
• they are considered preventive services.

For 2017, CMS is eliminating the L1 modifier and will no longer pay separately for “unrelated” lab tests. Medicare will continue to pay separately when lab tests are the only services reported on a claim. In addition to the exclusion of molecular pathology tests from laboratory packaging, for 2017 Medicare will also exclude advance diagnostic laboratory tests (ADLTs) from lab packaging. The ADLTs will be assigned to status indicator “A” and paid under the Clinical Lab Fee Schedule (CLFS). ADLTs are defined as tests that provide an analysis of multiple biomarkers of DNA, RNA, or proteins combined with a unique algorithm to yield a single patient-specific result.

Per Claim Packaging

Most clinical laboratory tests are assigned to a Status Indicator of “Q4” and, as mentioned above, are sometimes packaged and sometimes eligible for separate payment. This is known as conditional packaging and there are two other status indicators that also indicate conditionally packaged services – “Q1” and “Q2” which prior to 2017 were packaged based on date of service. For 2017, these conditionally packaged status indicators will be packaged on a per claim basis, like lab tests with a “Q4” SI already are. “Q1” services will be packaged if they are reported on the same claim with services with status indicators of “S”, “T”, or “V.” “Q2” services will be packaged if they are on the same claim with services with an SI of “T.”

As you can see, Medicare is a generous gifter – there is not just one package for providers for the New Year, but a whole bunch of them. Unfortunately, you can’t just choose one; you have to take them all.

Q:

Given the new Coding Guidelines for FY 2017 that went into effect October 1, 2017, do we automatically assume a causal relation between two diagnoses associated with the term “with”?

A:

Yes. You may interpret “with” to mean “due to” or “associated with” when it appears in a code title, the Alphabetic Index, or an instructional note in the Tabular List. A relationship may be assumed even without a physician’s documentation linking the conditions together. In the Alphabetic Index, the term “with” is sequenced immediately following the main term instead of alphabetic order.

To name a few, this new rule will effect conditions such as hypertension, diabetes and congestive heart failure.

Examples:

1. Code I11.0 would be assigned for hypertension with heart failure along with an additional code to identify the type of heart failure (I50._)
2. Code E11.43 would be reported for type 2 diabetes with gastroparesis.
3. Codes I13.2, I50.22, E11.22 and N18.6 would be the codes to report for a patient with hypertension, chronic systolic heart failure, type 2 diabetes and ESRD.

This guideline was actually effective in March 2016 but the Official Coding Guidelines were not updated until October 2016. You can refer to Section I.A.15 of the Official Coding Guidelines for FY 2017 and Coding Clinic 1st Qtr. 2016 page 11, 2nd Qtr. 2016 page 36 and 4th Qtr. 2016 page 141.

America has a drug problem. (Actually more than one considering the rocketing costs of medicinal drugs for patients, payers, and providers, but that would be another article.) Today I am referring to the problem of drug abuse. There is an opioid epidemic fueled by the over-prescribing of pain medications; abuse of illicit drugs continues with newer, cheaper opium derivatives and combinations; and there is also the seemingly never-ending development of new synthetic drugs. Controlling the drug problem in America is a challenge for law enforcement and governmental authorities, but coding for drug testing is a challenge for healthcare providers. The coding challenge is fueled by the also seemingly never-ending changes to drug testing codes from CPT (published and copyrighted by the American Medical Association) and Medicare (HCPCS codes).

Drug testing codes have been changing for many years, but in 2015 CPT did a major overhaul of the drug testing codes. They developed new codes for presumptive drug testing (drug screening) based on testing methods and major groupings of drug classes (Drug Class Lists A and B), and new codes for definitive drug testing based on drug classes and tested by more complex methods. Medicare did not accept the new CPT drug testing code changes for 2015 and instead kept their existing drug screening codes, developed new HCPCS codes for some of the deleted CPT codes, and maintained the previous year’s CPT instructions for selection of other drug testing codes. As a reminder, Medicare’s drug screening codes were based on test complexity and the new HCPCS codes for 2015 were by drug name or class.

The year 2016 saw a complete revision in the HCPCS codes Medicare accepts for drug testing. They deleted all of the HCPCS codes from the previous year (G0431, G0434, and G6030-G6058) and developed a much simpler, straightforward system. The screening or presumptive drug testing codes (G0477-G0479) were based on the testing/reading method and device and the definitive drug testing codes (G0480-G0483) were based on the number of drug classes tested as defined by the CPT drug class definitions. Each new HCPCS code and type of drug testing code (presumptive or definitive) was only to be reported once per date of service and included sample validation testing. There were no drug testing code changes for CPT for 2016.

That brings us to 2017. CPT is changing the presumptive (screening) codes to basically mirror the HCPCS screening codes from 2016 based on testing/reading method and device. They are deleting CPT codes 80301-80304 and replacing them with:

• CPT Code 80305 – drug test(s), presumptive, any number of drug classes, any number of devices or procedures (eg, immunoassay); capable of being read by direct optical observation only (eg, dipsticks, cups, cards, cartridges) includes sample validation when performed, per date of service
• CPT Code 80306 – drug test(s), presumptive, any number of drug classes, any number of devices or procedures (eg, immunoassay); read by instrument assisted direct optical observation (eg, dipsticks, cups, cards, cartridges) includes sample validation when performed, per date of service
• CPT Code 80307 – drug test(s), presumptive, any number of drug classes, any number of devices or procedures, by instrument chemistry analyzers (eg, utilizing immunoassay [eg, EIA, ELISA, EMIT, FPIA, IA, KIMS, RIA]), chromatography (eg, GC, HPLC), and mass spectrometry either with or without chromatography, (eg, DART, DESI, GC-MS, GC-MS/MS, LC-MS, LC-MS/MS, LDTD, MALDI, TOF) includes sample validation when performed, per date of service

More simply stated:

• CPT 80305 is drug screening by dipsticks, cups, cards or cartridges read visually
• CPT 80306 is drug screening by dipsticks, cups, cards or cartridges read on an instrument reader
• CPT 80307 is drug screening on a chemistry analyzer
• Each code is only reported once per date of service regardless of the number of drugs tested
• The codes include sample validation testing such as pH, specific gravity, nitrites, etc.

CPT is not making any changes to the definitive drug testing codes (80320-80377) for 2017. These codes are only for complex testing methods that are able to identify individual drugs and distinguish between structural isomers, such as gas or liquid chromatography with mass spectrometry, and specifically EXCLUDE immunoassay and enzymatic testing methods. Each category of a drug class, including metabolite(s) if performed is reported once per date of service. This means each code (or each drug class if described by more than one code) is reported only once a day.

As usual, the Medicare Clinical Lab Fee Schedule (CLFS) Test Codes Final Determinations for the coming year are not available yet, so this discussion for HCPCS codes is based on the Preliminary Determinations (available here). Medicare plans to delete the 2016 HCPCS codes for presumptive testing and go with the above CPT codes for 2017 – not surprising since as stated above, the new CPT codes mirror last year’s HCPCS codes.

Medicare plans to keep their definitive HCPCS codes for 2017 and possibly add one more HCPCS code. Again as stated above, the existing codes (G0480-G0483) are based on the number of drug classes tested as defined by the CPT drug class definitions. And like the CPT definitive testing codes, they are reserved for complex testing methods and exclude testing by immunoassay or enzymatic methods. Medicare is considering increasing the payment rate for these codes for 2017, but remains concerned that “inappropriate testing continues to occur including simplified testing billed at the higher code with suspect results.” Therefore they are proposing a new HCPCS G code (yet to be named) for those labs that are performing a less sophisticated version of these tests than is usually performed in drug testing laboratories that would be paid the same as G0479/80307.

GCCCC: Drug test(s), definitive, utilizing drug identification methods able to identify individual drugs and distinguish between structural isomers (but not necessarily stereoisomers), including but not limited to GC/MS (any type, single or tandem) and LC/MS (any type, single or tandem), excluding immunoassays (eg, IA, EIA, ELISA, EMIT, FPIA) and enzymatic methods (eg, alcohol dehydrogenase), performed in a single machine run without drug or class specific calibrations; qualitative or quantitative, all sources, includes specimen validity testing, per day.

Another thing for hospitals to remember – the drug testing codes are assigned to Status Indicator “Q4.” This means that if they are performed and reported on the same claim with any other outpatient services, there is no separate payment for the drug testing, for example drug testing during an emergency department visit.

All providers also need to be sure the drug testing is medically necessary, especially related to definitive drug testing of multiple drugs, such as might be ordered from a pain clinic. According to a recent Department of Justice (DOJ) press release concerning a False Claims Act settlement, “The use of quantitative drug tests – tests that are very specific and also very expensive – is appropriate only if there is reason to doubt the more general and cheaper qualitative drug test screens.” There may be times when the treating physician needs to know a specific drug identification – in that case, the medical reason should be clearly documented in the medical record.

Providers need to be on the lookout for Medicare’s final determinations concerning drug testing codes. We will publish those updates in the Wednesday@One when available. Providers may also want to work with their physicians to ensure appropriate documentation to support the medical necessity of drug testing as this continues to be a Medicare concern – see Medicare’s Compliance Fact Sheet for Urine Drug Screening.

TRANSMITTALS

Implementation of New Influenza Virus Vaccine Code

• Transmittal R3617CP, Change Request 9793, MLN Matters Article MM9793
• Issued September 30, 2016, Effective August 1, 2016, Implementation January 3, 2017
• Affects physicians and providers submitting claims to Medicare Administrative Contractors (MACs) for services to Medicare beneficiaries.
• Summary of Changes: Provides instructions for payment and edits for the common working file (CWF) to include influenza virus vaccine code 90674.

Changes to the Laboratory National Coverage Determination (NCD) Edit Software for January 2017

• Transmittal R3614CP, Change Request 9806, MLN Matters Article MM9806
• Issued September 23, 2016, Effective October 1, 2016, Implementation January 3, 2017
• Affects physicians, other providers, and suppliers submitting claims to Medicare Administrative Contractors (MACs) for services provided to Medicare beneficiaries.
• Summary of Changes: Quarterly updates to the national coverage determinations (NCDs) for clinical diagnostic laboratory services.

Update to Hepatitis B Deductible and Coinsurance and Screening Pap Smears Claims Processing Information

• Transmittal R3615CP, Change Request 9778, MLN Matters Article MM9778
• Issued September 23, 2016, Effective December 27, 2016, Implementation December 27, 2016
• Affects physicians, providers, and suppliers submitting claims to Medicare Administrative Contractors (MACs) for services provided to Medicare beneficiaries.
• Summary of Changes: Updates erroneous information regarding coinsurance and deductible for hepatitis B virus vaccine and screening Pap smears.

Notice of New Interest Rate for Medicare Overpayments and Underpayments -1st Qtr Notification for FY 2017

• Transmittal R273FM, Change Request 9863
• Issued October 12, 2016, Effective October 18, 2016, Implementation October 18, 2016
• Summary of Changes: Quarterly update of the interest on overpayments and underpayments to Medicare providers

OTHER UPDATES

BFCC-QIOs Resuming Short-Stay Reviews

• Inpatient Hospital Reviews
• Effective September 12, 2016
• Summary of Changes: BFCC-QIOs will resume initial patient status reviews of short stays in acute care inpatient hospitals, long-term care hospitals, and inpatient psychiatric facilities to determine the appropriateness of Part A payment for short stay hospital claims.

Hospital Appeals Settlement

• Inpatient Hospital Reviews
• Issued September 28, 2016
• Summary of Changes: CMS has decided to once again allow eligible providers to settle their inpatient status claims currently under appeal using the Hospital Appeals Settlement process. Specific details of the settlement will be released in the near future. Please continue to monitor CMS’ website for additional information.

KEPRO, BFCC-QIO Releases Short Stay Reviews FAQ #1

KEPRO, the BFCC-QIO for Area’s 2, 3 and 4, provided a Short Stay Review webinar for key stakeholders on September 19 and 20, 2016. In October they released a pdf document titled FAQ #1: Short Stay Reviews which includes a first round portion of questions submitted during the webinars. An updated documented will be posted to their website once all remaining questions are answered.

Adjustment to the amount in controversy threshold amounts for calendar year (CY) 2017 for Medicare appeals

• Federal Register notice
• September 23, 2016
• Summary of Changes: Announcement of the annual adjustment in the adjustment to the amount in controversy (AIC) threshold amounts for ALJ hearings and judicial review under the Medicare appeals process for 2017. The CY 2017 AIC threshold amounts are $160 for ALJ hearings and $1,560 for judicial review.

 Notice of interim final rule adjusting Civil Monetary Penalties (CMP)

• Survey and certification letter
• September 8, 2016
• Summary of Changes: Announces adjustments for inflation of the CMP amounts authorized under the Social Security Act.

Partnership for Patients and the Hospital Improvement Innovation Networks: Continuing Forward Momentum on Reducing Patient Harm

• CMS Fact Sheet
• September 29, 2016
• Summary of Changes: CMS) awarded $347 million to 16 national, regional, or state hospital associations and health system organizations to serve as Hospital Improvement Innovation Networks (HIINs).

October 2016 Medicare Quarterly Provider Compliance Newsletter Released

• October 2016 Quarterly Compliance Newsletter
• Summary of Changes: Addresses Comprehensive Error Rate Testing (CERT) review of Transluminal Balloon Angioplasty, Venous; Endovenous Ablation Therapy of Incompetent Vein; Blepharoplasty; and Transurethral Resection of the Prostate and Recovery Auditor findings regarding Post-Acute Care Transfer and Skilled Nursing Facility (SNF) Coding Validation.

The October 2016 release of the Medicare Quarterly Provider Compliance Newsletter included two issues specific to hospitals. This article focuses on the Recovery Auditors automated review performed to identify discharge status codes that had been improperly submitted under the IPPS Post-Acute Care Transfer (PACT) Policy.

Recovery Auditor Finding

“Analysis of discharge status codes and secondary claim data identified improper payments. Where a hospital used discharge status code 01, but should have shown a transfer to another care setting with a different discharge status code, the hospital may be overpaid for the inpatient services. It is crucial that hospitals place the correct discharge status code on claims to avoid subsequent overpayment identification and recovery.”

Transfer Policy Background

MLN® Acute Care Hospital Inpatient Prospective Payment System Fact Sheet (ICN 006815) indicates that under the Transfer Policy DRG payments are reduced when:

• The patient’s LOS is at least 1 day less than the geometric mean LOS for the DRG;
• The patient is transferred to another hospital covered by the Acute Care Hospital IPPS or, for certain MS-DRGs, discharged to a post-acute setting (PACT Policy);
• The patient is transferred to a hospital that does not have an agreement to participate in the Medicare Program (effective October 1, 2010); and
• The patient is transferred to a CAH (effective October 1, 2010)

PACT Policy and Discharge Status Codes

Cases with a length of stay less than the Geometric Mean Length of Stay (GMLOS) for a PACT DRG will not reimburse the full Diagnosis Related Group (DRG) payment if the patient was transferred to a post-acute care (PAC) setting. This policy involves the following patient discharge status codes:

When a patient is discharged with the status code of 01, Medicare’s overpayment edit will look for:

• “The presence of a transfer claim to a Skilled Nursing Facility, Cancer Hospital, Psychiatric Hospital, Children’s Hospital, Inpatient Rehab Facility, or Long Term Care Facility that commences or continues within one day of the acute care discharge, or
• A transfer claim to Home Health Care that commences or continues within three days of the acute care discharge.”

How to Avoid this Problem

Medicare advises that “hospitals should take steps to assure claims coders understand that the patient discharge status code is a crucial data element in determining payment for inpatient stays.” They go on to provide links to resources providing more information on how to avoid these errors.

MMP, Inc. advises that key stakeholders in your facility read and share the October 2016 issue of the Medicare Quarterly Compliance Newsletter.