The term “argue back” is listed as an idiom in an on-line dictionary, similar to the phrases “answer back”, “talk back” or “back talk”. Parents often reprimand their children for “talking back”. However in the grown-up world, making a persuasive argument to support your opinion is not only acceptable, but often necessary to achieve fair and just outcomes. But then again, sometimes life just isn’t fair.

As of this month, the Office of Inspector General (OIG) is approaching 100 reports on Medicare compliance reviews of hospitals. There are similarities between the reports: the issues are often the same, and the reviews are based on computer matching, data mining and data analysis techniques to identify at-risk claims. There are differences between the reports: some hospitals have a much greater overpayment than others and some refund amounts are extrapolated from the overpayment amounts while others are not. We at MMP have not been able to determine a pattern for which audits result in extrapolation versus those that do not.

Last week, the OIG published the report on Compliance Review of University of Cincinnati Medical Center that is particularly interesting. So what makes this report stand out among all the many compliance reviews?

• The refund amount of $9,818,296 was extrapolated from an overpayment amount of $603,267 (to date refund amounts have been extrapolated on only 10 of 99 compliance reviews).
• The refund amount of almost $10 million is the largest of all the compliance reviews. In fact, only three other reviews topped $2M refund and no other refund amounts prior to this one (even other extrapolated reviews) exceeded $5M.
• The University of Cincinnati Medical Center (UCMC) vehemently argued their case at great length against some of the OIG’s decisions from the audit. They make some interesting points in their arguments as noted below.

UCMC believes the OIG claim selection method contains a judgmental bias toward inclusion of claims likely to have overpayments and exclusion of claims likely to have underpayments. The biased findings are further magnified by the use of extrapolation.

UCMC disagreed with 50 of 57 claims the OIG determined were “incorrectly billed as inpatient.” Some of the reasons for disagreement were:

• Some were for inpatient-only procedures
• Reviewers based review decision on information that was not available to the admitting physician at the time of admission
• The hospital was not allowed to have discussion with the reviewers regarding their decisions or request re-review of the cases
• Extrapolation is not appropriate because decisions are judgmental and case-specific, and the potential effect of Part B rebilling is not considered in the extrapolation amount

It is interesting to note that on the seven cases UCMC concurred with, they cite lack of documentation to support the clinical decision of the physician to admit the patient, physician receptiveness to the involvement of RN Case Managers, and interpretation of third party vendor services as weaknesses in existing internal controls.

UCMC was cited for failing to pursue credits for replaced devices. According to UCMC’s response, the Medicare Claim Processing Manual (CMS Pub. 100-04, Sec. 100.8, Replaced Devices Offered Without Cost or With Credit) does not require hospitals to pursue manufacturers for credits on replaced devices. Medicare policy only requires that hospitals report credits actually received where the credit is more than 50% of the cost of the replacement device. UCMC argues that the prudent buyer principle is applicable to defining allowable costs for Medicare cost reports but does not apply to Medicare claims-based audits.

On June 2, 2014, the American Hospital Association (AHA) submitted a letter to the U.S. Department of Health and Human Services also objecting to the OIG hospital compliance audits. The AHA arguments are similar to those made by UCMC and include:

• OIG audits redundant to RAC reviews thereby being unduly burdensome to hospitals
• The OIG misconstrued and misapplied numerous Medicare regulations and policies
• The OIG used flawed sampling and extrapolation methods to estimate overpayments and refunds
• The OIG audits do not take into consideration Part B payments that may have been appropriate for the hospital to receive by their own admission
• They are in violation of reopening time frames and MAC statutory limits on extrapolation

For complete details, read the AHA's letter.

The “arguing back” of both UCMC and the AHA is well thought out, supported by references, and clearly explained, but whether either will prevail concerning their arguments and/or planned appeals remains to be seen.

All Medicare discharges from acute Inpatient Prospective Payment System (IPPS) hospitals are not created equal. Specifically, hospitals must determine whether the patient was “discharged” or “transferred” from the hospital.

In May, the Office of Inspector General (OIG) released the report, Medicare Inappropriately Paid Hospitals’ Inpatient Claims Subject to the Postacute Care Transfer Policy.

This was not a new type of review for the OIG. In prior similar reviews, the OIG found issues and made the following recommendations to the Centers for Medicare and Medicaid Services (CMS):

• Recommend that CMS provide hospitals education regarding the transfer policy
• Require Medicare Administrative Contractors (MACs) to put edits in place to “prevent and detect postacute care transfers that are miscoded as discharges.”

In spite of prior OIG reviews and recommendations, the OIG once again found in more recent reviews that hospitals not complying with the policy received approximately $12.2 million in overpayments from Medicare contractors. In the May report, the OIG once again conducted a review with the objective of determining if appropriate payments were being made to hospitals by Medicare for claims subject to the postacute care transfer policy. Before examining the report findings, I believe it is important to first have a basic understanding of Medicare’s Postacute Transfer Policy.

Postacute Care Transfer (PACT) Policy Background

• This policy was established by CMS effective October 1, 1998.
• The purpose of this policy is to prevent Medicare from having to pay twice for the same care: once to the hospital as a MS-DRG payment and second to a postacute facility or level of care.
• This policy distinguishes between beneficiary “discharges” and “transfers” from IPPS hospitals.
• A discharge status code is required by CMS for all inpatient claims. This two-digit code determines whether Medicare pays for a “discharge” or a “transfer.”
• Full Medicare Severity Diagnosis-Related Group (MS-DRG) payments are made for inpatient “discharges” to home or certain types of health care institutions.
• A per diem rate is paid for each day of the stay for “transfers.” This amount is not to exceed the full MS-DRG payment made for discharges to home.
• A “transfer” MS-DRG rate is paid for Medicare inpatients who have a qualifying DRG and one of the following discharge status codes assigned:

(Source: MLN Matters Number: SE0801at: https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/SE0801.pdf)

How CMS determines what DRGs will be Transfer DRG:

• The DRG has a least 2,050 total postacute care transfer cases;
• At least 5.5 percent of the cases in the DRG are discharged to postacute care prior to the geometric mean length of stay (LOS)for the DRG;
• The DRG must have a geometric mean LOS greater than 3 days; and
• If the DRG is a paired set based on the presence/absence of a comorbidity or complication, both paired DRGs are included if either one meets the first three criteria.

Again, the May OIG Report was conducted to determine if inpatient claims subject to the postacute care transfer policy were being appropriately paid by Medicare. The OIG reviewed Medicare beneficiary transfers to postacute care with dates of service from January 2009 through September 2012. Specific claims were identified through data analysis. Specific OIG findings and recommendations are as follows:

OIG Findings by the Numbers:

• 6,635: The number of inappropriately paid claims by Medicare for claims subject to the postacute care transfer policy.
• 91%: The percentage of inappropriately paid claims where the inpatient hospitalization was followed by claims for home health services.
• $19,471,432: The amount Medicare overpaid to hospitals due to Common Working File (CWF) edits related to home health care, SNFs, and non-IPPS hospital not working properly.
• $31.7 million: The approximate amount of money that Medicare could have saved over 4 years if it had had controls to ensure that the Common Working File (CWF) edits were working properly.

OIG Recommendations to CMS:

• “Direct the Medicare contractors to recover the $19,471,432 in identified overpayments in accordance with CMS’s policies and procedures;
• direct the Medicare contractors to identify any transfer claims on which the patient discharge status was coded incorrectly and recover any overpayments after our audit period;
• correct the CWF edits and ensure that they are working properly; and
• educate hospitals on the importance of reporting the correct patient discharge status codes on transfer claims, especially when home health services have been ordered.”

What the Hospital Needs to know:

“The Federal Register emphasizes that the hospital is responsible for coding the bill on the basis of its discharge plan for the patient. If the hospital subsequently determines that postacute care was provided, it is responsible for either coding the original bill as a transfer or submitting an adjusted claim.”

63 Fed. Reg. 40954, 40980 (July 31, 1998). See also MLN Matters Number: SE0408.

There were no changes made to the Post-Acute payment policy for the current 2014 CMS Fiscal Year that goes from October 1, 2013 through September 30, 2014. A complete list of applicable DRGs can be found in Table 5 of the IPPS Final Rule.

Specific detail regarding the PACT policy can be found in the Code of Federal Regulations (CFR) Title 42: Public Health §412.4 Discharges and transfers.

Just as you think you have mastered the challenge of complying with a Medicare rule, the rule changes and you have to start over. So it goes like this – know about the rules, understand the rules, implement processes to comply with the rules and then make sure the rules don’t change on you. Such was the case with the instructions for billing for certain laboratory tests.

It is almost July and just in time, CMS has issued the modifier to be appended to laboratory services when separate payment under OPPS is appropriate. Modifier L1 will be used starting July 1, 2014 to indicate that laboratory services provided to hospital outpatients meet one of the exceptions of “unrelated” or “lab test only” lab services.

As a reminder, the 2014 OPPS final rule packaged almost all clinical laboratory services as ancillary services with a revised Status Indicator (SI) of “N”. There are exceptions when lab tests are the only service provided or if the lab services are “unrelated” to other outpatient services. The original instructions from CMS for obtaining separate payment for the excepted lab services, was to submit a 14x type of bill (TOB). After concerns from the National Uniform Billing Committee (NUBC) and providers, CMS agreed to change the requirements effective July 1, 2014.

CMS Transmittal 2971 (CR 8776) (MLN Matters Article MM8776) issued May 23, 2014 manualized changes related to the new billing requirements for separately reimbursable laboratory services.

• Non-Patient (Referred) Laboratory Specimen - A non-patient is neither an inpatient nor an outpatient of a hospital. The patient is not physically present at the hospital but has a specimen submitted for analysis, for example, from a physician’s office or a non-hospital clinic. These non-patient laboratory services are to be billed on a TOB 14X. They are paid under the clinical laboratory fee schedule (CLFS) at the lesser of the actual charge or the fee schedule amount. Part B deductible and coinsurance do not apply.
• Outpatient lab tests only - If the only services the hospital provides to an outpatient are outpatient laboratory tests, the lab services are separately reimbursable and may be submitted on a TOB 13x with modifier L1 beginning July 1, 2014. The L1 modifier must be added to each lab line item on the claim. Such patients do not receive any other hospital outpatient services on the same day of service.
• Unrelated outpatient lab tests- If the hospital provides an outpatient laboratory test on the same date of service as other hospital outpatient services that is clinically unrelated to the other hospital outpatient services, then this lab service is also separately reimbursable and may be submitted on a TOB 13x with modifier L1 beginning July 1, 2014. Again, each lab line item that meets the exception requirements for separate Medicare reimbursement must be appended with the L1 modifier. Clinically unrelated means the laboratory test is
• ordered by a different practitioner than the practitioner who ordered the other hospital outpatient services, and
• for a different diagnosis.
• Payment for separately reimbursable outpatient laboratory tests is the lesser of the actual charge or the fee schedule amount for lab tests paid under the CLFS with no Part B deductible or co-pay.

The transmittal also addressed the payment of laboratory services related to Part B Inpatient claims (12x claims when there is no Part A payment). The new Part A to B rebilling rules from the 2014 IPPS Final Rule allow the submission of all Part B services on a 12x TOB when there is no Part A payment because the inpatient admission was not medically necessary. For these claims, the laboratory services will be packaged according to the OPPS rules since associated Part B services are payable under the expanded Part B billing.

When there is no Part A payment because the patient is not eligible for Part A or has exhausted Part A benefits, only limited Part B services may be billed on a 12x TOB. For these types of claims, the laboratory services will be reimbursed separately if the associated Part B services are not billable / payable under the limited Part B billing.

Just as hospitals had likely gotten their systems and processes in place to handle the 14x type of bill, the rules changed. Now hospitals need to start again on new systems and processes for use of the new modifier L1 to allow separate payment for laboratory services. Job security for someone?

Have you ever questioned whether a patient actually has a UTI or not, based on the clinical signs and symptoms documented in the medical record, even if “UTI” is documented by the physician? In this week’s article, we'll be discussing UTIs in more specified detail to help with this very issue, as well as CKD.

UTI

Lab Results

We all should be aware that urine cultures growing greater than 100,000 colony forming units (CRU/mL) usually indicates that an infection is present.

Sometimes an infection, if symptoms are present, may be indicated with lower numbers (1,000 to 100,000 CFU/mL).

If a patient has a urine sample collected with a catheter, which minimizes contamination, results of 1,000 to 100,000 CFU/mL may be considered significant.

Symptoms of a UTI

• Painful urination
• Frequent urination
• Urine that is cloudy, bloody, or has an odor
• Pain and pressure in the pubic bone area (women) and rectal pressure (men)
• Feeling of a full bladder but only have drops of urine on urination
• Tiredness
• Weakness
• Fever if the UTI has spread to the kidneys or blood
• Fever is not common with a UTI of the lower urinary tract (urethra or bladder)

NOTE FROM 2Q Coding Clinic, page 20

The provider must clearly document the causal relationship between the UTI and catheter. A coder cannot automatically assign a Catheter-Associated Urinary Tract Infection (CAUTI) when the patient has an indwelling catheter and then develops a UTI.

However, preventing and tracking CAUTIs is very important so if a patient has an indwelling catheter and a UTI, the coder should query the provider as to the cause of the UTI. This information should be documented in the record, as well.

UTI’s in the Elderly

TIP

Look for catheter use in the elderly.

Symptoms can appear non-specific and a diagnosis may be more difficult to determine in the elderly population and/or for those patients in healthcare settings requiring long-term catheter use.

UTI Due to a Catheter--See Complication, catheter, urethral, indwelling, infection and inflammation in the alphabetic index.

• ICD-9--(996.64)
• ICD-10—(T83.51X_) (seven characters)
• initial encounter
• subsequent encounter
• sequela

Contaminant

Remember, if a UTI is documented and the urine sample grows >100,000 colonies, but is labeled as contaminated, no UTI code is reported.

Something You May Not Know

• Females get UTIs more frequently than males.
• For patients that have frequent UTIs, their bacteria may become resistant to antibiotics over time.
• Patients may be more prone to recurring UTIs if the following are present:
• Kidney disease
• Diseases that affect the kidneys, i.e. Diabetes, Hypertension, etc.
• Compromised immune systems

Chronic Kidney Disease

Chapter 14: Disease of Genitourinary System (I-10)-Coding Guidelines

(Unless otherwise indicated, these guidelines apply to all health care settings)

1. Stages of chronic kidney disease (CKD)
   
   The ICD-10-CM classifies CKD based on severity. The severity of CKD is designated by stages 1-5. Stage 2, code N18.2, equates to mild CKD; stage 3, code N18.3, equates to moderate CKD; and stage 4, code N18.4, equates to severe CKD. Code N18.6, End stage renal disease (ESRD), is assigned when the provider has documented end-stage-renal disease (ESRD).
   
   If both a stage of CKD and ESRD are documented, assign code N18.6 only.
   
   
2. Chronic kidney disease and kidney transplant status
   
   Patients who have undergone kidney transplant may still have some form of chronic kidney disease (CKD) because the kidney transplant may not fully restore kidney function. Therefore, the presence of CKD alone does not constitute a transplant complication. Assign the appropriate N18 code for the patient’s stage of CKD and code Z94.0, Kidney transplant status. If a transplant complication such as failure or rejection or other transplant complication is documented, see section I.C.19.g for information on coding complications of a kidney transplant. If the documentation is unclear as to whether the patient has a complication of the transplant, query the provider.
   
   
3. Chronic kidney disease with other conditions
   
   Patients with CKD may also suffer from other serious conditions, most commonly diabetes mellitus and hypertension. The sequencing of the CKD code in relationship to codes for other contributing conditions is based on the conventions in the Tabular List.

See I.C.9. Hypertensive chronic kidney disease

See I.C.19. Chronic kidney disease and kidney transplant complications

NOTE FROM 3Q Coding Clinic, page 3

Complications of a transplanted organ are assigned when the transplanted organ is being rejected by the recipient or there are other complications or diseases of the transplanted organ. Ex: A patient develops Acute Renal Failure after a transplant. If the post-transplant condition affects the function of the transplanted organ, two codes are required. One for the Complication of the Transplanted Organ (996.81) (T86.12), which is sequenced as the principal diagnosis, and a second code describing the Acute Renal Failure (584.9) (N17.9).

Pre-existing conditions or medical conditions that develop after a transplant are coded as Complications of the Transplanted Organ only when they affect the function of that organ.

Status code V42.0 should only be used if there is no complication of the organ replaced. A V42.x status code is never used in conjunction with a (996.8x) code if there is no complication of the same transplanted organ.

Sometimes there are no easy solutions when it comes to coding. After all record documentation has been thoroughly reviewed and analyzed there may be only one solution left. When in doubt, query the physician. The worst that can happen is the physician says ‘no’, right?

Resources:

American Association for Clinical Chemistry

ICD-10-CM Coding Book by Ingenix

AHIMA ICD-10-CM Training Manual

Medicine.Net

Q:
We have been told to use modifier 76 on CPT code 93005 when more than 1 EKG is performed on the same date of service, and not to use modifier 59. We are seeing claims where the EKG is hitting our internal billing edit for a CCI conflict. These are scenarios where it would be appropriate to separately report the EKG. Will modifier 76 by-pass a CCI edit? 

A:

No. Chapter 1 of the CCI policy manual states modifier 76 will not bypass a CCI edit.

In your scenario, you would have to use modifier 59 to bypass the CCI edit; this would indicate the EKG was performed as a separate and distinct service from the other procedure(s) hitting the internal CCI edit.

Anything can be improved. That is true in all aspects of life, but when you are talking about a large bureaucratic governmental entity, it is a given. But don’t worry; the government has other large, bureaucratic entities to oversee large, bureaucratic entities… Is it a wonder our national budget is out of control?

One of the top priorities of the Office of Inspector General (OIG) is to improve Medicare oversight and reduce fraud, waste, and abuse in the Medicare program. In testimony before the House Ways and Means Committee on May 20, 2014, the OIG Regional Inspector General for Office of Evaluation and Inspections, Jodi D. Nudelman, explained three areas that are key to improving the Medicare program for taxpayers and beneficiaries. Hospitals should pay close attention to these issues as they will likely have an effect on future reimbursement.

The Two-Midnight Hospital Policy Must Be Carefully Evaluated

OIG evaluations of hospitals’ use of observation stays and short inpatient stays prior to the implementation of the new policy showed that Medicare and Medicare beneficiaries paid significantly more for short-stay inpatient care than for observation services even though the conditions treated and the treatment rendered were often the same. There was a wide variation between hospitals on their use of observation versus short inpatient stays. Another concern was that observation care of three nights or more does not meet the criteria to qualify a patient for skilled nursing facility (SNF) care under the Medicare.

It is still unclear whether the new two-midnight policy will increase the number of inpatient admissions or the number of observation stays. The OIG continues to be concerned about the same issues as identified prior to implementation of the new rule. The OIG believes careful evaluation of the impact of the new policy is needed to ensure that policymakers consider payment variations for Medicare and beneficiaries, differing hospital practices, and the impact on post-hospital SNF care.

CMS Should Strengthen its Oversight of RACs and Follow through on Vulnerabilities That Lead to Improper Payments

The OIG recommends that CMS enhance its follow-through on improper payment vulnerabilities identified through RAC audits including evaluating the effectiveness of actions taken to address vulnerabilities. They also recommended that CMS’s evaluations of the Recovery Auditors include information on the RAC’s ability, accuracy, and effectiveness in identifying overpayments.

The Medicare Appeals System Needs Fundamental Changes

Some of the OIG’s concerns with the appeal process were that most appeals were submitted by a small percentage of providers and a large number of denials were overturned at the ALJ level due to differing interpretations of Medicare policies and differences in the content, organization, and format of the case files at the ALJ level from the files at the QIC level of appeal. The OIG recommendations for the appeal process were:

• Clarification of Medicare policies
• Training on Medicare policies
• Standardized, electronic case files
• Increased CMS participation in ALJ hearings
• Quality assurance process to review ALJ decisions

As the OIG testimony concluded, “Clear policies, strong oversight of contractors, and an appeals system that is effective, efficient, and fair are critical to” an effective and efficient Medicare program.

Appending modifier 59 to a procedure code on an outpatient claim may result in Medicare payment when the code would not have received payment without the modifier. This is a good thing if the modifier is used appropriately for the correct circumstances. But modifier 59 is often misused and this could be a compliance concern for your hospital. Understanding CCI edits and correct modifier usage is critical for compliant billing.

The healthcare industry has been dealing with the National Correct Coding Initiative policy (NCCI or CCI) and edits for over 15 years now, but correct billing and modifier usage continues to be difficult and confusing for a lot of providers. One of the most commonly used and misused modifiers is modifier 59 which identifies a distinct procedural service. In fact misuse of this modifier is such a problem, that CMS has repeatedly provided education, clarification, and examples on the proper use of modifier 59. Last week, they released a new MLN Matters Article, SE1418 that again clarifies the appropriate use of modifier 59.

First, let’s look at some general information about the CCI edits:

• They were developed to promote national correct coding methodologies and to control improper coding leading to inappropriate payment in Part B claims
• They are based on coding conventions defined in the American Medical Association's CPT Manual, national and local policies and edits, coding guidelines developed by national societies, analysis of standard medical and surgical practices, and a review of current coding practices.
• The NCCI edits are updated quarterly and the NCCI Policy Manual is updated annually. The policy manual explains the rationale for the edits, the correct usage of modifiers, and specific policies for certain code pairs.
• The edits began in 1996 for Part B claims, and in 2000 for hospital claims. The Part B and hospital edits are not exactly the same.
• Procedure-to-Procedure (PTP) edits define when two HCPCS/CPT codes should not be reported together either in all situations or in most situations.
• A Correct Coding Modifier Indicator (CCMI) of “0” indicates the two codes should never be reported together by the same provider for the same patient on the same day of service. A CCMI of “1” indicates the codes may be reported together only in defined circumstances which are identified on the claim by the use of specific NCCI-associated modifiers.

“Modifier 59 is used to identify procedures/services, other than E/M services, that are not normally reported together, but are appropriate under the circumstances. Documentation must support a different session, different procedure or surgery, different site or organ system, separate incision/excision, separate lesion, or separate injury (or area of injury in extensive injuries) not ordinarily encountered or performed on the same day by the same individual.” Modifier 59 should only be used if there is not another modifier that could be used to explain the circumstances. Modifier 25, not 59, is used to indicate separate and distinct Evaluation and Management (E/M) services.

The article contains a lot of information about the correct use and inappropriate uses of modifier 59. Providers should carefully review the complete article to fully understand how to use this important modifier. Some of the common uses of modifier 59 described in the article include:

• Different anatomic sites, which includes different organs and in some cases, different lesions in the same organ. However, since CCI edits are to prevent the inappropriate billing of lesions and sites that should not be considered to be separate and distinct, modifier 59 should only be used to identify clearly independent services that represent significant departures from the usual situations. The treatment of contiguous structures in the same organ or anatomic region does not constitute treatment of different anatomic sites, for examples nails, nails beds and adjacent soft tissue; posterior segment structures of the eye; and adjoining areas in the same shoulder.
• Different patient encounters on the same day. One huge issue here is how a patient encounter is defined. Recently an NCCI coding specialist clarified that “encounter” as used in the new NCCI paragraph concerning the use of CPT code 94640 for respiratory treatment represents direct personal contact in the hospital between a patient and a physician or other healthcare professional. In other words, there may be several different encounters with a patient during a day of an extended care episode. For CPT 94640 multiple encounters on the same date of service are reported with modifier 76, but there are codes where modifier 59 would be the appropriate modifier for different encounters on the same day. Beware that this definition of “encounter” may not apply to all CCI edits or be accepted by all Medicare contractors.
• Sequential “timed code” services – this generally refers to rehabilitative therapy services which are defined in 15 minutes intervals. If the therapy services are provided sequentially for a different 15 minute interval, then modifier 59 is appropriate.
• A diagnostic service that proceeds a therapeutic service if “(a) it occurs before the therapeutic procedure and is not interspersed with services that are required for the therapeutic intervention; (b) it clearly provides the information needed to decide whether to proceed with the therapeutic procedure; and (c) it does not constitute a service that would have otherwise been required during the therapeutic intervention.” The example given is angiography preceding a revascularization if the circumstances noted above are met.
• A diagnostic procedure subsequent to a completed therapeutic procedure only when the diagnostic procedure is not a common, expected, or necessary follow-up to the therapeutic procedure. For example, a chest x-ray after a chest tube insertion to verify placement is not appropriate for modifier 59, but a chest x-ray after a chest tube insertion when the patient experiences unexpected complications is appropriate for modifier 59.

One interesting paragraph in the article describes a common misuse of modifier 59 relating to the portion of the definition describing “a different procedure or surgery.” According to the article, providers should not use modifier 59 to by-pass a CCI edit based on the two codes being “different procedures” unless the two procedures are performed at separate anatomic sites or at separate patient encounters on the same date of service. Please refer to the exact wording in the article for a clear understanding of this instruction.

Getting the correct modifiers on the correct code is not as easy as it sounds. In the hospital setting, this often involves billers, coders, and the relevant hospital departments. It also includes a financial and compliance aspect. Hospitals need a well-planned approach in dealing with CCI edits and their impact on billing and reimbursement.

Our next chapter to address in the I-10 Corner is the Digestive System. Please review the table below so that you can see what areas of the chapter have either been expanded or restructured.

EXAMPLE

Some things change…, some things don’t… Although a lot changed last year with the Medicare standard for inpatient admission, the fact that all Medicare services must be reasonable and necessary did not change. In fact, this is part of the law upon which the Medicare program is founded.

A recent Palmetto GBA article emphasizes that inpatient services must still be medically necessary for Medicare coverage in addition to meeting the two-midnight expectation. As the article points out, this is a standard from the original Social Security Act that created Medicare, which in section 1862 states:

"…no payment may be made under part A or part B for any expenses incurred for items or services - which, are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member…"

The article goes on to quote numerous other references concerning the continuing requirement for medical necessity in regards to the new admission standard from Rule 1599-F itself and the ensuing CMS guidance. So let’s look at the issue of medical necessity as it relates to the determination of patient status and the need for services to be provided in a hospital setting.

The medical necessity of the services (for the diagnosis or treatment of an illness or injury) should be considered first and foremost for every patient encounter without regard initially to the patient’s status. Does the patient need these services to diagnosis or treat a medical condition? Are the services being provided in the appropriate setting? If the services are reasonable and necessary for the patient’s medical condition and being provided at the correct location for those services, then you can move on to determining the appropriate patient status.

Diagnostic services or short-term treatments that a patient may receive and then return home are generally outpatient services – this includes lab, radiology, and other diagnostic testing; clinic visits; short-term emergency services; and same day surgery services. These services include routine preparation and recovery times. Occasionally, routine recovery for some surgeries and procedures may last overnight, but if this is expected and routine for all patients and the patient is expected to go home after recovery, an outpatient status is still appropriate.

Some patients need extended medically necessary services in a hospital setting. This may include diagnostic testing, observation of the patient’s condition, or procedures or treatments that can only be rendered in a hospital setting. If the care the patient is receiving is custodial in nature, rendered for social purposes, or for reasons of convenience, then the care does not meet Medicare’s definition of medically necessary and is not covered by Medicare. Examples of this would be patients waiting on a ride home after an outpatient encounter or patients in the hospital to receive prep for a diagnostic test because they are unable to do the prep at home. Commercial criteria for patient care (inpatient and observation services), such as InterQual and Milliman, may assist in determining if the care is appropriate to be provided in a hospital setting. Note that this is still not a determination of patient status – that is the next step after determining that the care is medically necessary.

Once it has been established that the patient is receiving medically necessary care in the appropriate hospital setting, then it is time to determine the appropriate status using the new two-midnight expectation.

• If the physician does not think the patient will require treatment beyond two midnights or is not sure, then it is likely that observation services are appropriate. In order to bill for observation hours, there must be a physician’s order for observation. This observation care meets the longstanding Medicare definition of observation services as those “services, which include ongoing short term treatment, assessment, and reassessment before a decision can be made regarding whether patients will require further treatment as hospital inpatients or if they are able to be discharged from the hospital.”
• If the physician expects the patient to require hospital care beyond two midnights, then inpatient status is appropriate. The documentation in the record needs to clearly support the physician’s expectation for care beyond two midnights. If for some reason, the care does not actually last beyond the second midnight, inpatient status is still appropriate as long as the original expectation was reasonable, based on the patient’s condition and the plan of care. However, the record should clearly document what happened that resulted in a “shorter-than-expected” stay whether it was a transfer to another hospital, a patient that left AMA, or an unexpectedly rapid recovery.

Under the new admission guidelines, observation care should not continue past a second midnight. If hospital care beyond the second midnight is not medically necessary, then observation care is not appropriate either. If the care is being provided for convenience or social purposes, it is not a covered Medicare service. The patient needs to be in an outpatient status and only services that are medically necessary should be charged. If hospital care beyond a second midnight is medically necessary, then the patient meets the criteria for inpatient admission and an inpatient order should be written prior to the second midnight.

Novitas, the MAC for Jurisdictions H and L, presented a teleconference last week on the Two-Midnight Rule and the Probe and Educate program. They reviewed the two-midnight rule and provided scenarios of some common reasons for denials they are seeing under the Probe and Educate reviews. Examples included:

• Documentation did not support that there was an expectation of a two-midnight stay;
• There was not a physician’s order for an inpatient admission and the record did not indicate that a two-midnight stay was expected;
• Two-midnight stay expected but the patient discharged prior to the second midnight and the record failed to indicate the reason for the early discharge.

For more information, please see the Novitas handout and Resources for the teleconference.

Determining coverage of services and patient status is a two-step process: first, determine if the services are medically necessary and then second, apply the two-midnight expectation to determine the correct patient status.

 

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

A farmer is selling baskets of apples that were picked several days ago. He knows that some may be bad so he will give a discount based on the percentage of bad apples. The first customer chooses five apples at random and only one of the five is bad, so the farmer gives him a 20% discount. The next customer carefully selects five apples with visible dark spots and all five apples are bad. The farmer gives him a 90% discount. Sometimes it is all in the selection.

In a recent OIG review of payments for selected outpatient drugs, the OIG found that payments for 1,132 of the 1,905 line items for outpatient drugs selected for review were not correct. This appears to be an astonishing error percentage, but beware, this is not a random selection. The OIG uses computer matching, data mining, and other analytical techniques to identify the line items potentially at risk for noncompliance with Medicare billing requirements. Some specific targets mentioned in the report are selected outpatient drugs, payments for drugs that exceeded charges by at least $1,000, and high-dollar payments.

The report found errors involving incorrect units of service, incorrect HCPCS codes, both incorrect units and HCPCS, billing for packaged or non-covered use of a drug, and lack of supporting documentation. Some of the specific drugs and issues include:

• Incorrect units were the cause of most of the billing errors.
• The billable units of a drug can be calculated by dividing the dosage of the drug given by the amount in the HCPCS code description for the drug. For example if 140 mg of a drug is given that has a HCPCS code description of Injection, drug, 1 milligram, then the correct units are 140÷1 = 140 units; if 800 mg of a drug is given that has a HCPCS code description of Injection, drug, 200 mg, then the correct units are 800÷200 = 4 units.
• Leuprolide acetate injections are used for different purposes, each with a different HCPCS code and description.
• HCPCS code J1950, leuprolide acetate injection, 3.75 milligrams per unit, is indicated for the treatment of endometriosis, uterine leiomyoma, and malignant neoplasms of the breast
• HCPCS code J9217, leuprolide acetate injection, 7.5 milligrams per unit is indicated for the treatment of prostate cancer
• Due to difference in Medicare payment rates for these drugs (J1950 - $760.03 and J9217 - $206.78) and the difference in milligram descriptions, billing the wrong HCPCS code for the wrong treatment will result in a significant over or under payment.
• Doxorubicin hydrochloride is available in both a lipid (or liposomal) and a non-lipid (or non-liposomal) formula. The non-lipid form of doxorubicin hydrochloride (HCPCS code J9000) is packaged, whereas the liposomal forms (previously J9001) receive separate Medicare payment. Medicare payment rates for the current HCPCS codes for liposomal doxorubicin (Q2049 and Q2050) are close to $500 per 10 mg.
• Are you using the correct HCPCS code? For example, are your codes correct for:
• Epoetin alfa, 1000 units, for non-ESRD use – J0885
• Darbepoeitn alfa, 1 mcg, non-ESRD use – J0881
• Epoetin alfa, 100 units, for ESRD use – Q4081
• Herceptin – not specifically mentioned in this report because Herceptin audits get their own separate reports. Herceptin is available in a 44mg multi-use vial and Medicare does not pay for drug wastage for multi-use vials. The units of Herceptin billed should be based on the patient’s dosage, not the vials used.

These types of errors may be repeated errors if the reason is a wrong multiplier in the chargemaster. Look for payments that appear too large or too small in relation to the charge amounts.

Hospitals need to make sure the correct drug code is being submitted for the correct treatment purpose.

Your hospital can use the same data mining approach that the OIG uses to check for internal issues with the billing for drugs. MMP’s HIQUP (Hospital Improvement in Quality and Performance) report, which data mines a facility’s Medicare outpatient 835 files, includes several queries designed to identify drugs at high risk of billing errors. So if you are struggling with drug units, please contact us if we can help.