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The phrase “waste not, want not” means to use one’s resources wisely in order to always have plenty and avoid poverty. Although Medicare pays for drug wastage in certain circumstances, they also expect healthcare providers and suppliers to “use drugs or biologicals most efficiently, in a clinically appropriate manner.” But when waste cannot be avoided, starting next year, CMS is requiring reporting that will allow them to identify and monitor billing and payment for discarded drugs under Medicare Part B.

As promised, CMS has released a list of frequently asked questions concerning the use of the JW modifier. The JW modifier indicates that a portion of a drug or biological was discarded or wasted. Currently the use of the JW modifier is at the discretion of the jurisdictional Medicare Administrative Contractors (MACs). For example, Cahaba GBA, MAC for Jurisdiction JJ (Alabama, Georgia, and Tennessee) does not require the reporting of the JW modifier for wasted drugs/biological. In order to be more consistent and better able to track drug wastage, CMS is requiring the use of the JW modifier nationally effective January 1, 2017, in order for providers/suppliers to seek payment for drug/biological wastage.

The JW modifier is to be used on Part B drug claims for discarded drugs and biologicals (hereafter referred to as drugs) when they are in single-use vials or packaging. If uncertain, the information as to whether a drug or biological is single use can be found in the manufacturer’s packaging insert. The discarded drug amount is the amount of a single use vial or other single use package that remains after administering a dose/quantity of the drug to a Medicare patient. Multiple use vials/packaging are not eligible for Medicare payment for discarded amounts.

The JW modifier will mainly be used for reporting drug wastage in physician offices and hospital outpatient departments (including Critical Access Hospitals (CAHs)). Some suppliers such as pharmacies may need to report the JW modifier, but it is unlikely they will have much, if any, drug wastage. Hospital Part B inpatient claims on a 12X type of bill would also report the JW modifier for separately payable drugs. Eligible and participating 340B providers are not exempt from use of the JW modifier.

One of the main things to remember about the use of the JW modifier is that it only applies to drugs that are separately payable, for example drugs with an OPPS status indicator of G (pass-through drugs) and K (separately payable non-pass-through drugs). In the outpatient hospital setting, this applies to separately payable drugs billed for surgical patients, patients in the emergency room, patients in outpatient clinics, and other outpatients receiving separately payable drugs.

This means that drugs that are not separately paid by Medicare do not require the use of the JW modifier. For example:

• Drugs provided in rural health clinics (RHCs) and federally qualified health centers (FQHCs) since these are not separately paid,
• Drugs provided during hospital inpatient admissions (Part A) that are paid under the Inpatient Prospective Payment System (IPPS),
• Drugs given to an outpatient but combined to an inpatient Part A claim under the 3 day payment window rule,
• Packaged drugs, such as drugs with an OPPS status indicator of “N” or an SI of “K” that are bundled with comprehensive APCs (see OPPS Addendum D1 for explanation of services packaged with comprehensive APCs)
• Overfill wastage (CMS has made it clear in the past that overfill, which is any amount of drug greater than the amount identified on the package, is not billable.)

CMS also exempts drugs paid under the Part B drug Competitive Acquisition Program (CAP) although at this time the CAP remains on hold so there is no current list of CAP medications.)

One of the questions not clearly addressed by the FAQs is whether providers and suppliers are required to report drug wastage or can they elect to absorb the cost of discarded drugs. The guidance states that the JW modifier is used in order to obtain payment for the discarded amount of a drug or biological and is not needed if no discarded drug is being billed to the payer. So IF you are going to bill and expect payment for drug wastage, you must use the JW modifier January 1, 2017 and after.

In using the JW modifier on and after January 2017, providers must report the amount of the discarded drug on a separate claim line with the JW modifier. The unit field should reflect the quantity of drug discarded. If the provider is unable to quantify the amount of drug wasted, the JW modifier is not required. Do not report one claim line with combined units for amount of drug administered and wasted. Also realize if the amount of drug administered or the amount of drug wasted is less than the amount described by one HCPCS billing unit, then it is not necessary to use the JW modifier.

Prior to January 1, 2017, providers must follow the directions of their MACs or they may voluntarily report the JW modifier. Providers should check their MACs websites for any specific direction concerning the reporting of the JW modifier prior to the mandatory January 1, 2017 requirement. For example, here is some guidance from a few MACs and you can see that current instructions differ from MAC to MAC – that is why it is important to determine your MAC’s guidance for use of the JW modifier in 2016.

Cahaba GBA - Cahaba DOES NOT require the use of the JW modifier at this time. If providers wish to designate that a portion of a single dose vial is being discarded, please continue to bill the injection on ONE line and add the JW modifier to the procedure code and document the discarded amount in the patents records. Bill for the complete vial, even though part of the vial is being discarded. DO NOT split the billing to two claim lines: one with the JW and one without.

First Coast - For billing purposes, First Coast does not require the use of modifier JW prior to January 1, 2017. Drug wastage is billed by combining on a single line the wastage and administered dosage amount.

NGS - National Government Services does NOT require the use of the JW modifier at this time but providers may choose to use it. Claims will process appropriately with or without the JW modifier. If the JW modifier is used; it should be appended to a separate line for the HCPCS code (separate from the amount administered) indicating the amount (in units) discarded.

One thing CMS and all the MACs agree on is that wastage of the drug must be documented in the patient’s medical record to support the billing of discarded drugs. Here is CMS’s answer to the FAQ concerning documentation of drug wastage:

“CMS expects that providers and suppliers will maintain accurate (medical and/or dispensing) records for all beneficiaries as well as accurate purchasing and inventory records for all drugs that were purchased and billed to Medicare. General guidance on documentation is available in MLN Matters SE 1316. Providers and suppliers should also check with the MAC that processes their Part B drug claims in case additional information on billing and documentation is available at the local level.”

For complete details concerning the JW modifier, see the following CMS guidance:

• MLN Matters Article MM9603,
• Section 40 of Chapter 17 of the Medicare Claims Processing Manual,
• CMS’s FAQ document
• Any information on the JW modifier on your local MAC’s website

Providers should use drugs wisely and efficiently, but if wastage cannot be avoided and the provider wants to be paid for it, then understanding the proper use, reporting and documentation for the JW modifier is critical.

Q:

Our hospital laboratory receives pathology specimens for testing from physician offices and ambulatory surgical centers. Since these are not hospital inpatients or outpatients, is it appropriate to use a type of bill (TOB) 14x like we do for clinical lab tests on non-patients?

 

A:

Per clarification in the August 30, 2016 Hospital Open Door Forum, using a TOB 14x for the technical component of pathology non-patient specimens is appropriate. Non-patients are those patients that are neither inpatients nor outpatients of a hospital, but that have a specimen that is submitted for analysis to a hospital; the patient is not physically present at the hospital.

TRANSMITTALS

October 2016 Integrated Outpatient Code Editor (I/OCE) Specifications Version 17.3

• Transmittal 3591, Change Request 9754, MLN Matters Article MM9754
• Issued 8-12-16, Effective 10-1-16, Implementation 10-3-16
• Affects providers who submit claims to Medicare Administrative Contractors MACs), including Home Health and Hospices (HH+H) MACs, for services provided to Medicare beneficiaries.

Summary of Changes: Quarterly update of the I/OCE. All institutional outpatient claims (which includes non-OPPS hospital claims) are routed through a single integrated OCE to apply claims processing edits.

Medicare Part B Clinical Laboratory Fee Schedule: Guidance to Laboratories for Collecting and Reporting Data for the Private Payor Rate-Based Payment System

• MLN Matters Article SE1619
• Issued 8-8-16
• Affects Medicare Part B clinical laboratories who submit claims to Medicare Administrative Contractors (MACs) for services furnished to Medicare beneficiaries.

Summary of Changes: This guidance includes clarifications for determining whether a laboratory meets the requirements to be an “applicable laboratory,” the applicable information (that is, private payor rate data) that must be collected and reported to the Centers for Medicare & Medicaid Services (CMS), the entity responsible for reporting applicable information to CMS, the data collection and reporting periods, and the schedule for implementing the new CLFS

Coding Revisions to National Coverage Determination (NCDs)

• Transmittal 1708, Change Request 9751, Transmittal 1708
• Issued 8-19-16, Effective 1-1-17 unless otherwise noted, Implementation 1-3-17

Summary of Changes: The 9th quarterly maintenance update of ICD-10 conversions and other coding updates specific to national coverage determinations (NCDs)

 

OTHER UPDATES

2017 ICD-10-CM and ICD-10-PCS 2017 Guidelines

• ICD-10-CM Guidelines are available on the CDC and CMS Websites http://www.cdc.gov/nchs/icd/icd10cm.htm and https://www.cms.gov/Medicare/Coding/ICD10/2017-ICD-10-CM-and-GEMs.html
• ICD-10-PCS Guidelines on CMS Website https://www.cms.gov/Medicare/Coding/ICD10/2017-ICD-10-PCS-and-GEMs.html

Summary of Changes: To easily identify what is new for the October 1, 2016 start date for the CMS 2017 Fiscal Year, narrative changes appear in bold text. The ICD-10-CM Preface for 2017 found on the CDC website indicates that “ICD-10-CM is the United States’ clinical modification of the World Health Organization’s ICD-10. The term “clinical” is used to emphasize the modification’s intent: to serve as a useful tool in the area of classification of morbidity data for indexing of health records, medical care review, and ambulatory and other health care programs, as well as for basic health statistics. To describe the clinical picture of the patient the codes must be more precise than those needed only for statistical groupings and trend analysis.”

Updates to the Clarifying Questions and Answers Related to the July 6, 2015, CMS/AMA Joint Announcement and Guidance Regarding ICD-10 Flexibilities for Physicians

• Questions & Answers pdf
• Released August 18, 2016

Summary of Changes: The ICD-1 flexibilities are set to expire October 1, 2016. Providers should already be coding to the highest level of specificity. The flexibilities were “solely for the purpose of contractors performing medical review so that they would not deny claims solely for the specificity of the ICD-10 code as long as there is no evidence of fraud.”

I absolutely love those television shows of people viewing and buying houses. One doesn’t have to watch many such shows to realize that people have very different taste in the types of houses they prefer. Some like brand-new, sleek and modern homes; some like more traditional homes; and others have a preference for vintage homes with character. But where is the line between “vintage” and just plain old? This distinction may also be applied to other products, items or aspects of our lives – for example, are film x-rays vintage or just old? However you view x-rays (pun intended), film and even computed radiography x-rays are out-of-date. Healthcare payers do not like to pay for out-of-date technology, especially when a newer technology provides more effective and efficient healthcare. As far as x-rays go, we now live in a digital world.

In the 2017 Outpatient Prospective Payment System (OPPS) proposed rule, CMS, in accordance with the Consolidated Appropriations Act of 2016, is proposing to reduce payments for film x-rays. Effective for services furnished during 2017 or any subsequent year, the payment under the OPPS for imaging services that are X-rays taken using film shall be reduced by 20 percent. CMS is also proposing that these services be identified by the use of a new modifier to be appended to imaging services that are X-rays taken using film. The presence of the modifier will result in a 20% reduction in the payment rate for the imaging service. This payment reduction is not considered an adjustment and will not be budget neutral.

For CYs 2018 through 2022, OPPS payments for X-rays taken using computed radiography will be reduced by 7%. Beginning in 2023 and thereafter, this reduction will be increased to 10%. CMS states that they will address the mechanisms for the reductions in OPPS payment for imaging services that are X-rays taken using computed radiography technology (including the imaging portion of a service) in future rulemaking.

The days of attaching a floppy film to an x-ray viewer are behind us or at least not worth what they once were. Marcus Welby, M.D. – you are out-of-date … or maybe vintage.

When my son was in college, he fell and broke his leg while playing a pick-up game of basketball. Last year my elderly father fell and broke his leg. Was their rehabilitative therapy experience the same? Hardly. Was the therapist’s time, effort and consideration for the therapy evaluation the same? Hardly. A physical therapy or occupational therapy evaluation for a young, healthy teenager with no other medical conditions is not the same as a therapy evaluation for an elderly patient who has numerous other medical conditions and pre-existing limitations in functional abilities. Beginning January 2017, that fact is being addressed with new CPT codes for rehabilitative therapy evaluations based on complexity.

CMS is proposing to accept the new CPT codes for physical and occupational therapy evaluation and re-evaluation services for 2017. The new evaluation codes are tiered based on the complexity of an evaluation that may vary due to the severity and complexity of the patient’s condition. The current evaluation codes and their respective replacement codes are:

• 97001, PT evaluation will be replaced with three new codes: 97x61, 97x62, and 97x63
• New PT re-evaluation code 97x64 will replace 97002
• 97003, OT evaluation will be replaced with three new codes: 97x65, 97x66, and 97x67
• New OT re-evaluation code 97x68 will replace 97004

As discussed in the Medicare Physician Fee Schedule (MPFS) Proposed Rule , Medicare will not have tiered payments for the new codes, but will continue to make one payment amount for all three levels of evaluation. CMS states concerns about potential risk of upcoding as therapists are learning to use the new codes, the incentive to upcode differential payment rates would create, and unknown utilization of the various levels. Perhaps CMS will reconsider tiered payment rates in the future once the learning curve is past and they have some historical data on code usage. Until then payment for evaluations and re-evaluations will likely be similar to current payment rates.

CMS also identified several other therapy codes they consider to be “misvalued” that may have a negative payment rate adjustment for next year. We will have to wait on the final MPFS rule to know exact payment rates. Those CPT codes are:

• 97032 – unattended electrical stimulation,
• 97035 – ultrasound therapy,
• 97110 – therapeutic exercises,
• 97112 – neuromuscular re-education,
• 97113 – aquatic therapy/exercises,
• 97116 – gait training,
• 97140 – manual therapy,
• 97530 – therapeutic activities,
• 97535 – self care management training,
• G0283 – unattended electrical stimulation other than wound care

Therapy codes continue to be subject to the Multiple Procedure Payment Reduction (MPPR) which means only one unit of the highest paid code reported for a day of service is paid at 100%. Additional units and codes are paid at a reduced payment rate.

See Table 19 on page 350 of the MPFS proposed rule for the complete long descriptions and specific components of each new code. The PT re-evaluation code, 97x64 requires an examination with review of history, standardized tests and measures, and a revised plan of care. CPT 97x68, OT re-evaluation, also requires a revised plan of care based on assessment of the patient’s functional or medical status with an updated occupational profile. Information on the new evaluation codes is summarized in a table you can dowload by clicking here.

Therapists must educate themselves on how to appropriately use the new codes and the documentation required to support the codes. Therapists are used to scrutiny of their documentation to support the services they provide. These new tiered codes add yet another documentation challenge for therapists.

“The only way to make sense out of change is to plunge into it, move with it, and join the dance.”- Alan Watts

This week we conclude our in-depth analysis of the 2017 IPPS Final Rule by taking a plunge into finalized changes to Medicare Severity Diagnosis-Related Group (MS-DRG) Classifications broken down by Major Diagnostic Categories (MDCs).

 

Pre-Major Diagnostic Category (Pre MDC)

Total Artificial Heart Replacement

The proposal to assign ICD-10-PCS procedure codes 02RK0JZ and 02RL0JZ as a code cluster to ICD–10 Version 34 MS–DRGs 001 and 002 (Heart Transplant or Implant of Heart Assist System with and without MCC, respectively) to accurately replicate the Version 32 ICD–9–CM based MS–DRG logic of procedure code 37.52 was finalized.

MDC1: Diseases and Disorders of the Nervous System

Mechanical Complication Codes

In the proposed rule CMS agreed with a requestor that ICD-10-CM diagnosis codes T85.610A, T85.620A, T85.630A, and T85.690A describe conditions occurring within the nervous system. These ICD-10 diagnosis codes describe concepts not previously captured by the ICD-9-CM. As a result, CMS finalized the reassignment of these four ICD–10–CM diagnosis codes from MDC 21 under MS–DRGs 919, 920, and 921 to MDC 1 under MS–DRGs 091, 092, and 093. The official code titles were revised after publication of the Proposed Rule. The new ICD-10 code titles are as follow:

 

 

MDC 4: Diseases and Disorders of the Ear, Nose, Mouth and Throat

Reassignment of Diagnosis Code R22.2

The proposal to reassign ICD–10–CM diagnosis code R22.2 (Localized Swelling, Mass and Lump, Trunk) from MDC 4 to MDC 9 under MS–DRGs 606 and 607 (Minor Skin Disorders with and without MCC, respectively) was finalized.

 

MDC 5: Diseases and Disorders of the Circulatory System

Implant of Loop Recorder

The proposal to re-designate the following four ICD–10–PCS codes from non-O.R. to O.R. procedures within Appendix E of the Version 34 ICD–10 MS–DRG Definitions Manual was finalized.

• 0JH602Z (Insertion of monitoring device into chest subcutaneous tissue and fascia, open approach);
• 0JH632Z (Insertion of monitoring device into chest subcutaneous tissue and fascia, percutaneous approach);
• 0JWT02Z (Revision of monitoring device in trunk subcutaneous tissue and fascia, open approach); and
• 0JWT32Z (Revision of monitoring device in trunk subcutaneous tissue and fascia, percutaneous approach).

Endovascular Thrombectomy of the Lower Limbs

CMS agreed with a commenter that procedures describing endovascular thrombectomy of the lower limbs should be assigned to ICD–10 MS–DRGs 270, 271, and 272. CMS finalized their proposal to restructure the ICD–10–PCS MS–DRG configuration and add 20 of the proposed ICD–10–PCS code translations (which would capture procedures describing endovascular thrombectomy of the lower limbs) to ICD–10–PCS Version 34 (The code table can be found on page 56804 of the final rule.)

Pacemaker Procedure Codes Combinations

The proposal to modify the ICD-10 MS-DRG logic to capture a wider range of possible reported procedure codes describing procedures involving both a pacemaker device and leads was finalized.

Transcatheter Mitral Valve Repair with Implant

Proposals finalized:

• Collapse MS-DRGs 228, 229, and 230 from three severity levels by deleting MS-DRG 230 and revising MS-DRG 229,
• ICD-9-CM procedure code 35.97 and the cases reporting ICD-10-PCS procedure code 02UG3JZ (Supplement mitral valve with synthetic substitute, percutaneous approach) will be reassigned from MS–DRGs 273 and 274 to MS–DRG 228 and revised MS–DRG 229,
• The title of revised MS-DRG 229 is now “Other Cardiothoracic Procedures without MCC”; and
• The title for MS–DRG 228 will remain “Other Cardiothoracic Procedures with MCC.”

 

MDC 6: Diseases and Disorders of the Digestive System

Excision of Ileum

CMS received a request to analyze an MS-DRG replication issue. Under ICD–9, procedure code 45.62 (Other partial resection of small intestine) was assigned to MS–DRGs 329, 330 and 331 (Major Small and Large Bowel Procedures with MCC, with CC, and without CC/MCC, respectively).

Under the current ICD–10 MS–DRGs Version 33, ICD–10–PCS procedure code 0DBB0ZZ (Excision of ileum, open approach) is assigned to MS–DRGs 347, 348, and 349 (Anal and Stomal Procedures with MCC, with CC, and without CC/MCC, respectively). The requestor indicated that, despite the variation in terms for ‘‘excision’’ and ‘‘resection’’ between the two code sets, the surgical procedure to remove a portion of the small intestine, whether it is the ileum, duodenum, or jejunum, has not changed and should not result in different MS–DRG assignments when translated from ICD–9–CM to ICD–10. CMS agreed that this is a replication error.

Additionally, CMS reviewed the MS–DRG assignments for ICD–10–PCS code 0DBA0ZZ (Excision of jejunum, open approach) and determined the MS–DRG assignment for this code resulted in the same replication error.

As a result of analysis, CMS proposed and finalized the reassignment of ICD–10–PCS codes 0DBB0ZZ and 0DBA0ZZ from MS–DRGs 347, 348, and 349 (Anal and Stomal Procedures with MCC, with CC, and without CC/MCC, respectively) to MS–DRGs 329, 330, and 331 (Major Small and Large Bowel Procedures with MCC, with CC, and without CC/MCC, respectively), effective with the ICD–10 MS–DRGs Version 34 on October 1, 2016.

 

MDC 7: Diseases and Disorders of the Hepatobiliary System and Pancreas

Bypass Procedures of the Veins

A requestor noted that currently, ICD–10–PCS procedure code 06183DY (Bypass portal vein to lower vein with intraluminal device, percutaneous approach) is assigned to only MDC 5 (Diseases and Disorders of the Circulatory System) and MS–DRGs 270, 271, and 272 (Other Major Cardiovascular Procedures with MCC, with CC, and without CC/MCC, respectively) under ICD–10 MS–DRGs Version 33.

The requestor stated that the code should also be assigned to MDC 7 and MS–DRGs 405, 406, and 407 to be consistent with the ICD–9–CM MS–DRGs Version 32. CMS analyzed this issue and agreed and finalized the assignment of ICD–10–PCS procedure code 06183DY to MDC 7 and MS–DRGs 405, 406, and 407 for FY 2017.

 

MDC 8: Diseases and Disorders of the Musculoskeletal System and Connective Tissue

Combination Codes for Removal and Replacement of Knee Joints

CMS examined knee joint revision combination codes that are not currently assigned to MS–DRGs 466, 467, and 468 (Revision of Hip or Knee Replacement with MCC, with CC, and without CC/MCC, respectively) in ICD–10 MS–DRGs Version 33 and identified 58 additional combinations that also should be included so that the same logic is used in the ICD–10 version of the MS–DRGs as is used in the ICD–9–CM version. CMS finalized the addition of these 58 new code combinations that capture the joint revisions to the Version 34 MS DRG structure for MS–DRGs 466, 467, and 468, effective October 1, 2016. The table of new combination codes begins on page 56821 of the Final Rule.

Decompression Laminectomy

Currently, under ICD–10–PCS, the procedure describing a decompression laminectomy is coded for the ‘‘release’’ of a specified area of the spinal cord. These decompression codes are assigned to MS–DRGs 028, 029, and 030 (Spinal Procedures with MCC, with CC or Spinal Neurostimulators, or without CC/MCC, respectively) and to MS–DRGs 518, 519, and 520 (Back and Neck

Procedures Except Spinal Fusion with MCC or Disc Device or Neurostimulator, with CC, or without CC/MCC, respectively) in the ICD–10 MS–DRGs Version 33.

A commenter brought attention to the fact that codes describing release of specific peripheral nerve are assigned to MS–DRGs 515, 516, and 517 (Other Musculoskeletal System and Connective Tissue O.R. Procedures with MCC, with CC, and without C/MCC, respectively). The commenter suggested that a subset of these codes also be assigned to MS–DRGs 028 through 030 and MS–DRGs 518 through 520 for clinical coherence purposes.

CMS agreed with the commenter’s suggestion and CMS proposed to reassign 18 ICD–10–PCS procedure codes from MS–DRGs 515 through 517 to MS–DRGs 028 through 030 and MS–DRGs 518 through 520 under the ICD–10 MS–DRGs Version 34.

This change was delayed in the Final Rule, “until the ICD-10 claims data are available, because we will have the ability to better analyze the impact of reassigning the specified codes according to their anatomic locations, as well as receive clarification regarding which specific codes should be taken under consideration for reassignment.”

Lordosis

A replication issue involving four diagnosis codes related to lordosis (excessive curvature of the lower spine) was discovered in MS-DRGs 446,457, and 458 (Spinal Fusion Except Cervical with Spinal Curvature or Malignancy or Infection or Extensive Fusions with MCC, with CC, and without CC/MCC).

These MS–DRGs contain specific logic requiring a principal diagnosis describing a spinal curvature, a malignancy, or infection or a secondary diagnosis that describes a spinal curvature disorder related to another condition.

Under the ICD–10 MS–DRGs Version 33, the following diagnosis codes were listed on the principal diagnosis list and the secondary diagnosis list for MS–DRGs 456, 457, and 458:

After consideration CMS finalized maintaining these four codes in the logic for the principal diagnosis list but to remove them from the secondary diagnosis list.

 

MDC 13: Diseases and Disorders of the Female Reproductive System

Pelvic Evisceration

Current GROUPER logic for MS–DRGs 332, 333, and 334 (Rectal Resection with MCC, with CC and without CC/MCC, respectively) under MDC 6 (Diseases and Disorders of the Digestive System) and for MS–DRGs 734 and 735 (Pelvic Evisceration, Radical Hysterectomy and Radical Vulvectomy with CC/MCC and without CC/MCC, respectively) under MDC 13 (Diseases and Disorders of the Female Reproductive System) include a ‘‘cluster’’ of ICD–10–PCS procedure codes that describe pelvic evisceration.

A ‘‘cluster’’ is the term used to describe a circumstance when a combination of ICD–10–PCS procedure codes is needed to fully satisfy the equivalent meaning of an ICD–9–CM procedure code for it to be considered a plausible code translation.

Under ICD–10–PCS, users are instructed to code separately the organs or structures that are actually removed and for which there is a distinctly defined body part. Therefore, the case of a patient who undergoes a pelvic evisceration (exenteration) that involves the removal of the sigmoid colon and rectum would have each of those procedure sites (sigmoid colon and rectum) coded and reported separately (in addition to the procedure codes displayed in the cluster). In this scenario, if the principal diagnosis is a condition from the MDC 6 diagnosis list, the case would group to MS–DRGs 332, 333, and 334, regardless of the code cluster. In other words, it would not be necessary to retain the code cluster describing procedures performed on female pelvic organs in MDC 6.

Therefore, CMS proposed and finalized removing the procedure code cluster for pelvic evisceration procedures from MDC 6 under the ICD–10 MS–DRGs Version 34. The cluster would remain in ICD–10 MDC 13 under MS–DRGs 734 and 735 only.

 

MDC 19: Mental Diseases and Disorders

CMS finalized the proposal to the title of MS-DRG 884 (Organic Disturbances and Mental Retardation) to “MS-DRG 884 (Organic Disturbances and Intellectual Disability)” to reflect the current terminology to describe the condition.

 

MDC 23: Factors Influencing Health Status and Other Contacts with Health Services

Logic of MS-DRGs 945 and 946 (Rehabilitation with CC/MCC and without CC/MCC, respectively)

CMS received several requests to examine the Grouper logic for MS-DRGs 945 and 946. The requestors were concerned that ICD–9–CM codes that clearly identified an encounter for rehabilitation services such as procedure codes V57.89 (Care involving other specified rehabilitation procedure) and V57.9 (Care involving unspecified rehabilitation procedure) were not included in ICD–10–CM Version 33. In addition, the requestors pointed out that ICD–10–CM has significantly changed the guidelines for coding of admissions/encounters for rehabilitation.

In a Final Rule response CMS indicates that they “agree with the commenters that the issue of any updates to ICD–10–PCS guidelines should be considered along with any proposed MS–DRG updates because updated guidelines may impact code reporting. We welcome any suggestions on how to update the ICD–10–PCS guidelines. These suggestions should be sent to ICDProcedureCodeRequest@cms.hhs.gov. We plan to take any proposed ICD–10–PCS rehabilitation guideline updates to a future meeting of the ICD–10 Coordination and Maintenance Committee so that the public can provide input on any new rehabilitation guideline.”

 

As mentioned at the start, this article highlights MDC specific MS-DRG changes. This is a small dive into the coding changes found in the Final Rule. MMP, Inc. encourages you to review the Final Rule and to be on the lookout for our Annual Fall Inpatient Webinar focused on Coding Changes in October. 

That time of the year is fast approaching. The magical date is October 1, 2016. Not only will there be updates for codes but “Coding Guidelines” as well. As coders, you will want to be aware of these updates so that when October 1st arrives, you’ll be fully prepared and not so overwhelmed with the many changes.

Here are a few area’s that may peak your interest:

1. Section I.A.12.a – Excludes “1”
2. Section I.A.15 – “With” - This term will greatly affect diagnoses such as Diabetes and Hypertension.
3. Section I.A.19 – Code Assignment and Clinical Criteria
4. Section I.B.13 – Laterality
5. Section I.C.1.f.1) – Zika Virus Infections
6. Section I.C.4.a.3 – Diabetes Mellitus and the Use of Insulin and Oral Hypoglycemics
7. Section I.C.9.a. – Hypertension
8. Section I.C.18.e – Coma Scale
9. Section I.C.18.i – NIHSS Stroke Scale

Some of these changes will be fully discussed in our upcoming Inpatient Webinar in October of this year.  In the mean time, for your reading pleasure, click on the links below for the updated Guidelines for both ICD-CM and ICD-PCS.

http://www.cdc.gov/nchs/data/icd/10cmguidelines_2017_final.pdf

https://www.cms.gov/Medicare/Coding/ICD10/Downloads/2017-Official-ICD-10-PCS-Coding-Guidelines.pdf

“I’m late! I’m late! For a very important date!”- The White Rabbit in the 1951 Disney Classic Alice in Wonderland

Much like the White Rabbit, CMS was a day late in the release of the Fiscal Year (FY) 2017 Inpatient Prospective Payment System (IPPS) Final Rule. Late or not, CMS noted in a related Fact Sheet that this rule finalizes policies that continue their commitment to increasingly shift Medicare payments from volume to value. This article focuses on final revisions made to the general acute care hospital Quality Programs.

HOSPITAL INPATIENT QUALITY REPORTING (IQR) PROGRAM

The Hospital IQR Program is a pay-for-reporting program established by the Medicare Prescription Drug, Improvement, and Modernization Act. General acute care hospitals successfully participating in this program and are also meaningful electronic health record (EHR) users will receive approximately 0.95 percent increase in their operating payment rates. The Final Rule finalized changes to this program for FY 2018 and FY 2019 payment determinations.

FY 2018 Program Year: Two Claims Based Measure Refinements

PN Payment: Hospital-Level, Risk-Standardized 30-Day Episode-of-Care Payment Measure for Pneumonia (NQF #2579)

This measure cohort will be expanded to include hospitalizations for patients with

• Principal discharge diagnosis of pneumonia, including not only viral or bacterial pneumonia, but also aspiration pneumonia; and
• Principal discharge diagnosis of sepsis (but not severe sepsis) with a secondary diagnosis of pneumonia (including viral or bacterial pneumonia and aspiration pneumonia) coded as present on admission (POA).

PSI 90: Patient Safety and Adverse Events Composite Measure (NQF #0531): The modified PSI 90 composite was adopted for the IQR Program. See table 3 for further detail.

FY 2019 Program Year: 15 Measures Removed & Four New Measures Added

CMS finalized the proposal to remove 15 measures for the FY 2019 payment determination and subsequent years (see Table 1).

Table 1: Measures Finalized for Removal for the FY 2019 Payment Determination and Subsequent Years

‍Four New Measures to be added to the Hospital IQR Program for the FY 2019 Payment Determination and Subsequent Years.

Table 2: New Measures Finalized for FY 2019 Payment Determination and Subsequent Years

CMS notes that the new “measures capture Medicare payment for services related to the episode procedure and take into account beneficiaries’ clinical complexity as well as geographic payment differences. We proposed these clinical episode-based measures to supplement the Hospital IQR Program’s Medicare Spending per Beneficiary (MSPB) Measure….the measures also support our mission to provide better healthcare for individuals, better health for populations, and lower costs for healthcare.”

In response to stakeholder concerns that these measures overlap with the Medicare Spending Per Beneficiary (MSPB) Measure, CMS notes “that unlike the overall MSPB measure, the clinical episode-based payment measures assess payment variation at the procedure level and only include services that are clinically related to the named episode procedure (for example, the spinal fusion measure includes inpatient admissions for “medical back problems” that occur following the initial spinal fusion procedure since the admission is likely a result of complications from the initial procedure).”

HOSPITAL VALUE BASED PURCHASING (VBP) PROGRAM

The Act instructs the Secretary to reduce the base operating DRG payment amount for a hospital for each discharge in a fiscal year by an applicable percent to fund this budget neutral program. CMS indicates in Table 16A of the Final Rule that the estimated amount available for value-based incentive payments to hospitals for FY 2017 is approximately $1.8 billion. Actual amounts will be displayed in Table 16B that is expected to be posted in October of this year.

FY 2019 Program Year: New Domain Name and Expansion of location for CAUTI and CLABSI

The Patient-and-Caregiver-Centered Experience of Care/Care Coordination Domain will become simply the Person and Community Engagement Domain.

The NHSN (National Health Safety Network) CAUTI (Catheter-Associated Urinary Tract Infection) and CLABSI (Central Line-Associated Blood Stream Infections) outcome measures will include select ward (non-ICU) locations. “This expansion of the CAUTI and CLABSI measures aligns with the Hospital IQR Program. It also aligns with the HAC Reduction Program, which adopted the expansion of the CAUTI and CLABSI measures beginning with its FY 2018 program year (80 FR 49576 through 49578).”

FY 2021 Program Year: Two New Condition-Specific Payment Measures and Expansion of a 30-Day Mortality Measure Cohort

Two New Measures

Hospital-Level, Risk-Standardized Payment Associated with a 30-Day Episode-of-Care for Acute Myocardial Infarction (AMI) (NQF #2431), and

Hospital-Level, Risk-Standardized Payment Associated with a 30-Day Episode-of-Care for Heart Failure (HF) (NQF #2436).

Expansion of 30-Day-PN Mortality Cohort

Also for the FY 2021 Program Year, CMS finalized expansion of the cohort used for the 30-Day-PN Mortality measure to include patients with a principal discharge diagnosis of pneumonia, patients with a principal diagnosis of aspiration pneumonia and patients with a principal diagnosis of sepsis with a secondary diagnosis of pneumonia coded as present on admission (POA).

FY 2022 Program Year: CMS finalized the addition of Hospital 30-Day, All-Cause, Risk-Standardized Mortality Rate (RSMR) Following CABG Surgery (NQF #2554) (MORT-30-CABG) measure.

HOSPITAL ACQUIRED CONDITIONS (HAC) REDUCTION PROGRAM

This program creates an incentive for reducing the incidence of HACs by adjusting payments to hospitals in the worst performing quartile for HACs. CMS finalized the following five changes to the existing HAC Reduction Program policies:

• Clarified data requirements for Domain 1 (PSI-90),
• Established National Health Safety Network (NHSN) Centers for Disease Control and Prevention (CDC) Healthcare Associated Infection (HAI) data submission requirements for newly opened hospitals,
• Established performance periods for the FY 2018 and 2019 HAC Reduction Program,
• Adopted the refined Patient Safety Indicator (PSI) 90: Patient Safety for Selected Indicators Composite Measure (NQF #0531) beginning with the FY 2018 payment determination.
• Changed the Program scoring methodology from the current decile-based scoring to a continuous scoring methodology.

FY 2018 Program Year: Finalized Refinements to PSI 90

• First, the name of the PSI 90 measure will change to “Patient Safety and Adverse Events Composite: (NQF #0531).
• Second, the modified PSI 90 measure will include three new indicators (PSI-09, PSI-10 and PSI-11),
• Third, two Indicators will be re-specified in the modified PSI 90.
• PSI-12 Perioperative Pulmonary Embolism (PE) or Deep Vein Thrombosis (DVT) Rate no longer includes ECMO procedures in the denominator or isolated deep vein thrombosis (DVT) of the calf veins in the numerator.
• PSI 15 Accidental Puncture and Laceration Rate is now limited to discharges with an abdominal/pelvic operation, rather than including all medical and surgical discharges.
• Fourth, PSI-07 Central venous catheter-related blood stream infections rate will be removed in the modified PSI 90.
• Fifth, weighting of component indicators will be based not only on volume of each patient safety and adverse events, but also the harms associated with the events.

PSI 90: To Expand from 8 to 10 Indicators for FY 2018 Program

Table 3: PSI 90: Patient Safety and Adverse Events Composite (NQF #0531) for FY 2018

‍HOSPITAL READMISSIONS REDUCTION PROGRAM (HRRP)

This program requires a reduction to a hospital’s based operating DRG payment to account for excess readmissions associated with the applicable conditions. For FY 2017 and subsequent years, a hospital’s potential reduction will be based on a risk-adjusted readmission rate during a three-year period for the following six conditions:

• Acute Myocardial Infarction (AMI),
• Heart Failure (HF),
• Pneumonia (PN),
• Chronic Obstructive Pulmonary Disease (COPD),
• Total Hip Arthroplasty/Total Knee Arthroplasty (THA/TKA), and
• New Condition for FY 2017 (pursuant to prior rulemaking): All-Cause, Unplanned Readmission Following Coronary Artery Bypass Graft (CABG) Surgery (inclusion of this condition was finalized in the FY 2015 IPPS/LTCH Final Rule).

CMS is updating the public reporting policy so that excess readmission rates will be posted to the Hospital Compare website as soon as feasible following the hospitals’ preview period.

More Than Half a Billion Dollars in Readmission Penalties for FY 2017

Set to begin October 1, 2016, Jordan Rau of Kaiser Health News (KHN)reports that readmission penalties are set to reach a new high of more than half a billion dollars in payments being withheld in the coming fiscal year. To see if and how much your hospital will be penalized you can get the data in KHN’s Article Medicare's Readmission Penalties Hit New High.

Resources

CMS Fact Sheet Announcing release of 2017 IPPS Final Rule: https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2016-Fact-sheets-items/2016-08-02.html

2017 IPPS Final Rule (Display copy): https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/FY2017-IPPS-Final-Rule-Home-Page-Items/FY2017-IPPS-Final-Rule-Regulations.html?DLPage=1&DLEntries=10&DLSort=0&DLSortDir=ascending

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

When to Begin Providing the MOON?

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

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

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

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

• PRA Process: At a minimum November 20th

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

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

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

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

Who should receive the MOON?

Insurance Coverage

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

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

States with a similar Notice Requirement

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

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

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

Timing of Delivery of the MOON

Before 24 Hours of Observation

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

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

After 24 Hours of Observation

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

When does the 24 hour timeframe begin?

Several commenters requested clarification as to whether the timeframe starts:

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

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

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

What if a Resident writes the order?

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

Billable or Elapsed Time to Count the Hours?

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

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

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

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

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

Written Notice Requirements

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

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

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

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

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

Required Retention of the MOON in the Medical Record

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

Delivering the MOON

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

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

Oral Notice

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

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

Signature Requirements

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

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

CMS finalized the proposed signature requirements without modification.

No Appeal Rights under the NOTICE Act

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

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

Resources:

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

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

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

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

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

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

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

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

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