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Dilemma:

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

Solution:

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

Resources:

• TruCode Encoder

TRANSMITTALS

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

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

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

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

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

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

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

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

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

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

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

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

Medicare Coverage of Diagnostic Testing for Zika Virus

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

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

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

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

Summary of Changes: Recurring notification of interest rates.

OTHER UPDATES

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

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

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

Medicare Quarterly Compliance Newsletter

• July 2016 Edition

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

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

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

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

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

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

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

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

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

Medicare Administrative Contractor (MAC) Review Updates

MAC J15 CGS

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

MAC JF Noridian

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

MAC JE Noridian

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

MAC JM Palmetto

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

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

What Is a Provider-Based Department?

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

Major Concerns – Cost and Increasing Numbers

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

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

Findings from Previous OIG Audits

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

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

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

CMS Fixes

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

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

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

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

Remaining Problems

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

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

OIG Recommendations

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

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

Requirements to be a PBD and Documents to Prove It

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

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

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

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

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

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

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

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

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

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

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

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

Solution:

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

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

Asthmatic (J45.9)

Chronic (J44.9)

with

Acute lower respiratory infection (J44.0)

Exacerbation (acute) (J44.1)

OR

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

with

Chronic Obstructive Bronchitis (J44.9)

with

Acute Lower Respiratory Infection (J44.0)

Exacerbation (acute) (J44.1)

Chronic Obstructive Pulmonary Disease (J44.9)

with

Acute Lower Respiratory Infection (J44.0)

Exacerbation (acute) (J44.1)

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

Two things to remember:

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

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

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

Information Source(s):

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

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

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

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

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

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

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

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

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

About the Virus

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

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

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

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

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

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

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

Medicare to Cover Diagnostic Testing for Zika Virus

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

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

ICD-10-CM Coding for Zika

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

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

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

A92 – Other Mosquito-borne viral fevers

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

Prevention

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

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

TRANSMITTALS

Recovering Overpayments from Providers Who Share Tax Identification Numbers

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

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

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

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

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

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

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

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

Claim Status Category and Claim Status Codes Update

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

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

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

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

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

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

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

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

OTHER NEWS

Temporary Pause of QIO Short Stay Reviews

• Inpatient Hospital Reviews Webpage
• Updated June 6, 2016

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

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

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

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

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

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

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

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

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

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

Competition is the cornerstone of America’s free market economy. Everyone loves to get the best price and not pay more than someone else is paying. The same goes for Medicare. Medicare issued a final rule on June 17, 2016 that will change the Medicare payment rates for clinical diagnostic laboratory tests (CDLTs) paid under the Clinical Laboratory Fee Schedule (CLFS) to be competitive with what private insurers are paid. This rule was the result of legislation in the Protecting Access to Medicare Act of 2014 (PAMA). To determine the basis for the revised payment rates, certain laboratories will be required to submit payor data to Medicare.

REPORTING REQUIREMENTS

Who Reports? – Laboratories are required to report data to Medicare if, based on their National Provider Identifier (NPI),

• More than 50 percent of their total Medicare revenues are received under the CLFS and Physician Fee Schedule (PFS) and
• They receive payments under the CLFS of at least $12,500 during a six-month data collection period

Based on these criteria, approximately 95% of physician office laboratories, 55% of independent laboratories, and most hospital laboratories will be exempt from reporting.

A hospital outreach laboratory that is independently enrolled in Medicare and has its own NPI would meet the definition of an applicable laboratory if it meets the above criteria – that is at least 50 percent of its Medicare revenues are from CLFS and PFS services and its revenues from the CLFS are at least $12,500 during a data collection period.

What Is Reported? – Reporting entities will be required to report private payor payment rates for laboratory tests and the corresponding volumes of tests. Private payors for the purpose of this final rule are a health insurance issuer and a group health plan, a Part C Medicare Advantage plan, and a Medicaid managed care organization.

When is Data Collected and Reported? – CMS adopted a 6-month data collection period. The first data collection period will be from January 1, 2016 through June 30, 2016. The data collected during this period will be reported to CMS from January 1, 2017 through March 31, 2017. All subsequent data collection and reporting periods for CDLTs, except for ADLTs, will follow this same data collection and reporting schedule, every three years.

What Happens If An Applicable Lab Doesn’t Report? – The statute provides for civil monetary penalties of up to $10,000 per day, adjusted for inflation as required by the Inflation Adjustment Act Improvements Act of 2015, for each failure to report and/or each misrepresentation or omission in reporting private payor prices with respect to a CDLT.

Payment Rates

• Private payor rates for laboratory tests reported by the applicable laboratories will be the basis for the revised Medicare payment rates for most laboratory tests on the CLFS beginning in January 2018.
• The payment amount for a test on the CLFS furnished on or after January 1, 2018, will be equal to the weighted median of private payor rates determined for the test.
• The payment amount for a test cannot drop more than 10 percent as compared to the previous year’s payment amount for the first three years after implementation of the new payment system, and not more than 15 percent per year for the subsequent three years.
• Payment rates under the revised CLFS will be updated to reflect market rates paid by private payors every three years for most tests, and every year for ALDTs.

ADVANCED DIAGNOSTIC LABORATORY TESTS

Advanced diagnostic laboratory tests (ADLTs) will have different data collection, reporting, and payment policies associated with them. An ADLT is a laboratory test that is covered under Medicare Part B and is offered and furnished only by a single laboratory, that is not sold for use by a laboratory other than the original developing laboratory (or a successor owner), and that meets one of the following criteria:

1. The test is an analysis of multiple biomarkers of DNA, RNA, or proteins combined with a unique algorithm to yield a single patient-specific result;
2. The test is cleared or approved by the Food and Drug Administration (FDA);
3. The test meets other similar criteria established by the Secretary.

New ADLTs will be paid using their actual list charge amount during a new ADLT initial period of three quarters. Once the new ADLT initial period is over, payment for a new ADLT will be based on the weighted median private payor rate paid to the single laboratory and reported to CMS.

WHAT THIS MEANS FOR HOSPITALS

In the long run, hospitals will likely receive lower payments for clinical diagnostic laboratory tests. The impact of this will not be as significant as it once would have been since payment for most hospital outpatient lab tests is now bundled under the Outpatient Prospective Payment System (OPPS). Separate payment for laboratory tests is only made to OPPS hospitals if the lab tests are the only services provided for the day or if unrelated lab tests (those ordered by a different physician for a different diagnosis from other outpatient services) are furnished. The payment reduction will affect hospital outpatient laboratories and hospital reference lab services where patients and/or specimens are referred from a physician’s office to the hospital to obtain laboratory testing only.

It is also unlikely that a lot of hospital laboratories will meet the criteria to be an applicable reporting laboratory. The lab would have to be independently enrolled in Medicare with its own NPI number and meet the reporting criteria as explained above.

For more details on this topic see the Medicare Fact Sheet, Press Release, or the Final Rule.

So welcome to the free market economy of healthcare competitive payment rates. Probably a smart thing for our government, but another belt-tightening for hospitals that again must do more for less.

This week hails the first week of official summer and it is hot – very hot here in the Deep South. Thank goodness for air conditioners! When I was a child I often visited my grandparents during the summer and we would sit outside because they did not have central air. It was not uncommon for “good news bees” to buzz around us (officially known as yellow jacket hover fly). My grandmother said they meant you were going to hear some good news. I thought it was good news enough that these flying insects didn’t bite or sting like so many others. To celebrate the arrival of summer let me share some “good news” from Medicare.   It is not often that Medicare publications and updates are considered good news by providers. And even rarer is when good news gets even better.

In September 2015, I wrote an article about MLN Matters Article SE1521 that limits the scope of review on redeterminations and reconsiderations of certain claims. In the MLN Matters Article, CMS instructed Medicare Administrative Contractors (MACs) and Qualified Independent Contractors (QICs) to limit their review to the reason(s) the claim or line item at issue was initially denied. They should not issue unfavorable decisions for reasons other than those specified in the initial determination. As a reminder, redeterminations are the first level of appeal and are submitted to the MAC. If the MAC upholds their original denial during a redetermination, the provider may pursue a second level of appeal, a reconsideration, with the QIC.

Limiting the scope of appeal reviews was good news for hospitals and other providers, but a revised version of SE1521 offers even better news. In the original article, the limited scope of review only applied to post-payment determinations. The revised article (revised May 9, 2016) expands the limited scope of review to complex prepayment reviews as well as complex and automated post-payment reviews. This has the potential for serious impact as most MAC medical reviews seem to be performed on a prepayment basis.

There are still some exceptions to the limited reviews of which providers need to be aware. Claims overturned on appeal by a favorable decision to allow payment will still be subject to system imposed payment limitations, conditions or restrictions (for example, frequency limits or Correct Coding Initiative edits) which could result in new denials. These new denials will have full appeal rights.

Also, if the original reason for denial of a pre- or post-payment review was failure to submit requested documentation, upon appeal the contractor will review for all coverage and payment requirements, including medical necessity. This means “claims initially denied for insufficient documentation may be denied on appeal if additional documentation is submitted and it does not support medical necessity.” This seems fair to me, because not submitting requested documentation should not happen. If your hospital has denials for failing to submit documentation, a thorough review and correction of your Additional Documentation Request (ADR) process is needed.

The original SE1521 applied to redetermination/reconsideration requests received by a MAC or QIC on or after August 1, 2015, and was not applied retroactively. Likewise, the revised article will not be applied retroactively – it applies to redetermination and reconsideration requests received by a MAC or QIC on or after April 18, 2016. CMS also clarifies that “appellants will not be entitled to request a reopening of a previously issued redetermination or reconsideration for the purpose of applying this clarification on the scope of review. CMS encourages providers and suppliers to include any audit or review results letters with their appeal request. This will help alert contractors to appeals where this instruction applies.”

So let’s celebrate Medicare’s good news and enjoy a hot and sunny summer!