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Did you ever play the game as a child where you were blindfolded, turned around until you were disoriented, and then relied on a sibling or a friend to guide you? This required some trust even though it was just a game. And the more guidance the better – handholding was better than simply being told where to go. We are not quite as trusting as adults, but often our only choice is to rely on the guidance of others. Hospitals have to rely on Medicare guidance for direction in providing and billing for Medicare services. And like that childhood game, more guidance and clearer guidance is always better. So, thanks to CMS for the additional guidance on the use of the PO modifier.

Last week’s edition of the Wednesday@One included an article about recent developments related to Provider-Based Departments (PBDs), one of which was the requirement to report a PO modifier on outpatient services provided in an off-campus provider based department. In the January 26, 2016, Hospital Open Door Forum (ODF), CMS discussed this requirement and referred providers to a recent Modifier PO FAQ document that provides additional guidance on the use of this modifier.

Before getting into the details of the Frequently Asked Questions, here is an excerpt from last week’s article.

This requirement was finalized in the 2015 OPPS Final Rule which allowed voluntary reporting of the PO modifier for 2015 but mandates use of the modifier beginning in 2016. The use of the PO modifier will allow CMS to track the volumes and types of services being provided in off-campus provider based departments. Things to know about reporting the PO modifier include:

• Off-campus means provider based departments located 250 yards or greater from the main provider building.
• Per discussion at a CMS Hospital Open Door Forum, the modifier is only required to be reported for items and services paid under OPPS. Services paid under another fee schedule, such as rehabilitative therapy services, do not require the PO modifier.
• The modifier should not be reported for remote locations of a hospital, satellite facilities of a hospital, or for services furnished in an emergency department.
• Remote location is another main provider furnishing inpatient services under the name, ownership, and administrative and financial control of the main hospital.
• A satellite facility is a part of a hospital that provides inpatient services in a building also used by another hospital, or in a building(s) located on the same campus as buildings used by another hospital.

A lot of the ODF discussion and the FAQs address when the PO modifier is required and when it is not. The CMS representative speaking on the ODF suggested hospitals ask themselves three questions in deciding whether to use the PO modifier:

1. Are the services provided at a provider-based department?
2. Is the provider-based department located off-campus?
3. Are the services “paid” under the Outpatient Prospective Payment System (OPPS)?

If the answer to all three of these questions is yes, then you must use the PO modifier.

The FAQs address a number of scenarios where the PO modifier is not required. For example, the PO modifier is not required for:

• Critical Access Hospitals (CAHs) because CAHs are not paid through the OPPS
• Off-campus rehabilitative therapy services because therapy services have an OPPS status indicator of “A” which means they are paid under another fee schedule (the Physician’s Fee Schedule) and not under OPPS
• Facilities that do not meet the definition of provider-based
• Off-campus dialysis facilities because these are billed and paid under the ESRD PPS and not under OPPS
• Services provided at a remote hospital location of the main hospital or on the campus of a remote location
• Services provided in either Type A or Type B Emergency Departments
• Laboratory services that are paid under the Clinical Laboratory Fee Schedule – This one is tricky because labs provided on the same day of service with other outpatient services are packaged and therefore are “paid” under OPPS – these would require the PO modifier. If only laboratory services are performed - for example, if a hospital has an off-campus PBD laboratory where patients go for only laboratory services (and no other related outpatient services are provided the same day), then these services are paid under the CLFS and would not require a PO modifier.
• Services provided through Medicare Advantage plans

The FAQs also clarify that it is acceptable to have a claim where some HCPCS codes have the PO modifier and some don’t. Separately payable outpatient drugs reported with HCPCS codes (status indicator “K”) do require the PO modifier when provided in an off-campus PBD.

We have no choice but to trust and rely on the guidance from CMS, but it is always good to have more guidance than lesser guidance in trying to interpret and implement Medicare rules.

Did you know that Section 6401 of the Affordable Care Act (ACA) provides that a “provider of medical or other items or services or supplier within a particular industry sector or category” shall establish a compliance program as a condition of enrollment in Medicare, Medicaid, or the Children’s Health Insurance Program (CHIP)? Although an enforcement date has yet to be issued, the Secretary of Health and Human Services (HHS), in consultation with the HHS Office of Inspector General (OIG) have established seven core or key elements of an effective compliance program as required by the ACA.

The 5th core element is Auditing and Monitoring. CMS indicated in an Affordable Care Act Provider Compliance Programs: Getting Started Webinar that “a system for auditing and monitoring must be implemented to measure the effectiveness of the compliance program, ensure compliance with CMS requirements, and identify compliance risks.”

Ensuring compliance with CMS requirements is a full time job in and of itself and we recognize that our clients are busier than ever. As Making HealthCare Make Sense is what we are about, we have added a standing article the last week of each month spotlighting key Medicare Transmittals released by CMS during the month.

January 2016 Transmittals

January 2016 Integrated Outpatient Code Editor (I/OCE) Specifications Version 17.0

• Numbers: Transmittal R3437CP, Change Request 9459, MLN Matters MM9459
• Dates: Issued: 01/06/2016, MLN: 1/11/2016, Implementation: 1/4/2016
• Affects: Providers who submit claims to Medicare Administrative Contractors, including Home Health and Hospice MACs (HH+H MACs) for services provided to Medicare beneficiaries
• Updates: Medicare Claims Processing Manual, Chapter 4, Section 40.1

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.

Notice of New Interest Rate for Medicare Overpayments and Underpayments -2nd Qtr Notification for FY 2016

• Numbers: Transmittal R258FM, Change Request 9532, MLN not released at time of this article
• Dates: Issued: 01/12/2016, Implementation 01/19/2016
• Affects: Medicare Providers
• Updates: Medicare Financial Management Manual, Chapter 3, Section 10

Summary of Changes: Medicare Regulation 42 CFR Section 405.378 provides for the charging and payment of interest on overpayments and underpayments to Medicare providers. The Secretary of Treasury certifies an interest rate quarterly. Treasury utilized the most comprehensive data available on consumer interest rates to determine the certified rate. Interest is assessed on delinquent debts in order to protect the Medicare Trust Funds.

Award of Durable Medical Equipment (DME) Medicare Administrative Contractor (MAC) Contract for Jurisdiction D

• Numbers: Transmittal R1592OTN, Change Request 9453, MLN not released at time of this article
• Dates: Issued: 01/15/2016, Implementation: 03/01/2016
• Affects: Providers submitting DME claims for Medicare beneficiaries inJurisdiction D (U.S. Territories of Alaska, Arizona, California, Hawaii, Idaho, Iowa, Kansas, Missouri, Montana, Nebraska, Nevada, North Dakota, Oregon, South Dakota, Utah, Washington, Wyoming, American Samoa, Guam, and Norther Mariana Islands.
• Summary of Changes: The purpose of this change request is to announce the award of the Durable Medical Equipment (DME) Medicare Administrative Contractor (MAC) Jurisdiction D contract to Noridian Healthcare Solutions, LLC for the administration of Medicare DME Fee-for-Service (FFS) claims.

There has been a lot of discussion and contention lately about hospital off-campus provider based departments (PBDs). And as with a lot of things, the issue boils down to money. Services provided in off-campus PBDs are paid by Medicare at a higher reimbursement rate than similar services provided in freestanding clinics or physicians’ offices. CMS attributes the higher facility payment as compensation to hospitals for higher overhead costs required to operate the provider-based clinic, which is more highly regulated than the freestanding physician clinic locations. This is because hospitals, including off-campus PBDs, are required to meet the conditions of participation, to maintain standby capacity for emergency situations, and to be available to address a wide variety of complex medical needs in a community. That argument seems to no longer be holding up under the increased scrutiny of the OIG, the Medicare Payment Advisory Commission, and others concerned with high medical costs. This is evidenced by several new developments related to off-campus PBDs.

First, effective January 1, 2016, hospitals are required to report a PO modifier on outpatient services provided in an off-campus provider based department. This requirement was finalized in the 2015 OPPS Final Rule which allowed voluntary reporting of the PO modifier for 2015 but mandates use of the modifier beginning in 2016. The use of the PO modifier will allow CMS to track the volumes and types of services being provided in off-campus provider based departments. Things to know about reporting the PO modifier include:

• Off-campus means provider based departments located 250 yards or greater from the main provider building.
• Per discussion at a CMS Hospital Open Door Forum, the modifier is only required to be reported for items and services paid under OPPS. Services paid under another fee schedule, such as rehabilitative therapy services, do not require the PO modifier.
• The modifier should not be reported for remote locations of a hospital, satellite facilities of a hospital, or for services furnished in an emergency department.
• Remote location is another main provider furnishing inpatient services under the name, ownership, and administrative and financial control of the main hospital.
• A satellite facility is a part of a hospital that provides inpatient services in a building also used by another hospital, or in a building(s) located on the same campus as buildings used by another hospital.

Second, the Office of Inspector General continues to examine issues concerning provider-based status as part of their 2016 Work Plan.

• The first issue involves Medicare oversight of provider-based status in which the OIG will determine:
• The number of provider-based facilities that hospitals own,
• The extent to which CMS has methods to oversee provider-based billing,
• The extent to which provider-based facilities meet requirements described in 42 CFR Sec. 413.65 and CMS Transmittal A-03-030, and
• Whether there were any challenges associated with the provider-based attestation review process.

Per the OIG discussion, “Provider-based status allows facilities owned and operated by hospitals to bill as hospital outpatient departments. Provider-based status can result in higher Medicare payments for services furnished at provider-based facilities and may increase beneficiaries’ coinsurance liabilities. The Medicare Payment Advisory Commission (MedPAC) has expressed concerns about the financial incentives presented by provider-based status and stated that Medicare should seek to pay similar amounts for similar services.”

• The second issue is an OIG comparison of Medicare payments for physician office visits in provider-based clinics and freestanding clinics to determine the difference in payments made to the clinics for similar procedures and assess the potential impact on Medicare of hospitals' claiming provider-based status for such facilities.

Third and the most significant news related to PBDs is the Bipartisan Budget Act of 2015 which changes the method of reimbursement for off-campus PBDs beginning in 2017. This Act which was signed into law on November 2, 2015, excludes payment of services under OPPS for services furnished on and after January 1, 2017 in an off-campus provider based department, with a couple of exceptions. The exceptions are:

• Grandfathered off-campus PBDs – that is those off-campus PBDs that were billing under the OPPS prior to the date of enactment of the law - November 2, 2015, and
• Items and services provided in a dedicated Emergency department.

Therefore, beginning in 2017, non-emergency services performed at off-campus PBDs that are not “grandfathered” will be paid under the applicable payment system, such as the Ambulatory Surgical Center Payment System or the Physician Fee Schedule instead of under OPPS.

Hospitals need to be aware of all the new requirements, oversight, concerns, and changes for provider-based departments. They may need to reevaluate acquiring or opening new off-campus provider based departments in light of the change in expected reimbursement. Hopefully this will not affect the availability of outpatient services in areas where they are needed. That would be a shame because sometimes healthcare is about more than the money.

The words “term paper” can strike fear in the hearts of students everywhere. Research, note cards, bibliography, and the dreaded draft copy a student presents to his or her teacher for corrections prior to the final composition. That draft copy is often returned marked ubiquitously with red ink. This gives the writer one last chance at correction before a grade is assigned and the wise student utilizes this instruction to improve their paper and the resulting score. CMS likes to give providers a chance to improve their performance also. One of the tools CMS uses to guide providers in preventing billing errors is the Medicare Quarterly Provider Compliance Newsletter.

CMS publishes the Quarterly Compliance Newsletter “to provide education on how to avoid common billing errors and other erroneous activities when dealing with the Medicare Fee-For-Service (FFS) Program. It includes guidance to help health care professionals address and avoid the top issues of the particular Quarter.” The newsletter addresses findings from Medicare review contractors and affiliates, such as the Medicare Administrative Contractors (MACs), CERT, Recovery Auditors, and the OIG. The latest edition of this newsletter, the January 2016 Edition, includes several issues that may be of concern to hospitals.

Admission Source for Inpatient Psychiatric Hospitals

This issue is a concern for acute-care hospitals and critical access hospitals (CAHs) that have an inpatient psychiatric distinct part unit. The inpatient psychiatric hospital (IPF) payment generally includes an adjustment for maintaining a qualifying emergency department (ED). Medicare does not make this adjustment however when patients are transferred from the acute-care section of a hospital to an IPF distinct part unit within the same hospital. This is because the costs associated with ED services are already reflected in the Medicare payment to the hospital for the immediately preceding acute care stay.

To prevent this inappropriate additional payment, the transfer to an IPF-distinct part unit from the acute-care section of the hospital should be coded with an admission source of “D” - Transfer from One Distinct Unit of the Hospital to another Distinct Unit of the Same Hospital Resulting in a Separate Claim to the Payer. Failure to use the correct Source of Admission code in these circumstances will result in an overpayment as has been found by Recovery Auditor’s automated reviews.

For more information, see the Medicare Claims Processing Manual, Chapter 3, Section 190.6.4.

Duplicate Claims

Another automated review by Recovery Auditors has identified problems with payments for duplicate services submitted on separate claims. Claims for services should only be submitted one time. Providers should use the claim status inquiry process to determine the status of their claims instead of resubmitting the claim.

If the services are not duplicate services, the provider should use an appropriate modifier to indicate such. The use of modifiers is discussed in the Medicare Claims Processing Manual, Chapter 4, Section 20.6.

Medical Necessity of Rituximab

A number of MACs have a Local Coverage Determination (LCD) or Article for Rituximab that lists appropriate ICD-10 diagnosis codes to support the medical necessity of the drug. Claims for Rituximab must include one of the required ICD-10 diagnosis codes to support payment. Most claims submitted without an acceptable diagnosis code will be denied as “not medically necessary” by claims processing edits. However, an automated review by the Recovery Auditors has identified paid claims where providers are billing for a service of J9310 - Rituximab with an ICD-10 code that is not included in the list of covered ICD-10 codes in applicable Local Coverage Determination documents. Here is a listing of the LCDs and Articles that contain diagnosis code requirements for Rituximab.

‍Outpatient Cardiovascular Nuclear Medicine Procedure Codes

Medical necessity issues were also identified by Recovery Auditor automated reviews related to cardiovascular nuclear medicine tests. This was the result of the same issue as for Rituximab – an ICD-10 diagnosis code approved for coverage as indicated by Local Coverage Determinations was not included on the claim. This includes a large range of services:

• Myocardial perfusion imaging – CPT codes 78451-78454
• Myocardial imaging – CPT codes 78466 and 78468-78469
• Cardiac blood pool imaging – CPT codes 78472, 78473, 78481, 78483, 78494, and 78496
• Cardiovascular stress test – CPT codes 93015-93018

Check your MAC’s LCDs and Articles to see if there are coverage requirements for these tests for your jurisdiction.

Providers need to read and take actions if needed based on the guidance in the Medicare Quarterly Compliance Newsletter. If you don’t learn from this guidance, your claims may end up covered in red marks.

After struggling with application of Medicare’s incomplete listing of drug testing codes for 2015, I was so hopeful that Medicare would accept the drug testing CPT codes for 2016. For 2015, the American Medical Association (AMA) majorly revised the CPT drug testing codes, reorganizing the drug testing codes as presumptive, definitive, or therapeutic.

• Presumptive testing is for the possible use or non-use of a drug. Presumptive methods of testing are mainly immunoassays, enzymatic methods, and thin-layer chromatography (TLC). The CPT codes for presumptive testing, 80300-80304, are defined based on testing method and whether the drugs being tested are in Drug Class List A or Drug Class List B (also defined in the CPT manual).
• Definitive testing uses more complex testing methods, such as gas or liquid chromatography (GC/LC) with mass spectrometry (MS) and identifies individual drugs.
• Therapeutic drug assays are performed to monitor clinical response to a known, prescribed medication.

A helpful tool in the CPT code manual is the “Definitive Drug Classes Listing” that describes some of the particular drugs and metabolites included in each drug class for definitive testing. The most significant statement in the CPT instructions relative to definitive testing is, “Each category of a drug class, including metabolite(s) if performed (except stereoisomers), is reported once per date of service.” I admit some of the technical speak in the CPT instructions is even over my head (what is a stereoisomer??) but bottom line, this sentence means that CPT codes 80320 – 80377 are to be reported once a day per drug class. MMP even confirmed this with the American Hospital Association Coding Clinic. So if you test for oxycodone and oxymorphone, you only report CPT code 80365 with one unit.

Back to my wishful thinking - you don’t always get what you want. For 2016, Medicare is not accepting the CPT codes for drug testing. CMS has deleted all of the drug testing HCPCS codes from last year (G0431, G0434, and G6030 – G6058) and created new HCPCS codes for 2016. The bad news is that there is still not a one-to-one correlation between CPT and HCPCS codes for drug testing; the good news is that this year’s HCPCS codes appear a little easier to use and understand.

There are three new presumptive testing HCPCS codes based on testing methods. Only one of the three presumptive G codes may be billed per day.

• G0477 Drug tests(s), presumptive, any number of drug classes; any number of devices or procedures, (eg, immunoassay) capable of being read by direct optical observation only (eg, dipsticks, cups, cards, cartridges), includes sample validation when performed, per date of service.
• G0478 Drug tests(s), presumptive, any number of drug classes; any number of devices or procedures, (eg, immunoassay) read by instrument-assisted direct optical observation (eg, dipsticks, cups, cards, cartridges), includes sample validation when performed, per date of service.
• G0479 Drug tests(s), presumptive, any number of drug classes; any number of devices or procedures by instrumented chemistry analyzers (eg, immunoassay, enzyme assay, TOF, MALDI, LDTD, DESI, DART, GHPC, GC mass spectrometry), includes sample validation when performed, per date of service.

The most likely correlation for presumptive testing is that HCPCS codes G0477 and G0478 correlate with CPT codes 80300; HCPCS code G0479 correlates with CPT codes 80301, 80302, 80303, and 80304.

The new definitive HCPCS codes correlate with all of the CPT codes 80320 through 80377, depending on the number of definitive drug classes tested. The instructions in the 2016 Clinical Lab Fee Schedule Final Determinations state:

• Only one of the four definitive G codes may be billed per day.
• The unit used to determine the appropriate definitive G code to bill is “drug class.”
• Each drug class may only be used once per day in determining the appropriate definitive G code to bill.
• Drug classes are consistent with their usage in the AMA CPT Manual. The AMA CPT Manual may be consulted for examples of individual drugs within each class.

This means you can count the number of definitive CPT drug test codes to determine which of the HCPCS codes to bill. The new Medicare definitive codes are defined as: “Drug test(s), definitive, utilizing drug identification methods able to identify individual drugs and distinguish between structural isomers (but not necessarily stereoisomers), including, but not limited to GC/MS (any type, single or tandem) and LC/MS (any type, single or tandem and excluding immunoassays (eg, IA, EIA, ELISA, EMIT, FPIA) and enzymatic methods (eg, alcohol dehydrogenase)); qualitative or quantitative, all sources, includes specimen validity testing, per day,…”

• G0480 - 1-7 drug class(es), including metabolite(s) if performed.
• G0481 - 8-14 drug class(es), including metabolite(s) if performed.
• G0482 - 15-21 drug class(es), including metabolite(s) if performed.
• G0483 - 22 or more drug class(es), including metabolite(s) if performed.

Even though Medicare has their own codes for definitive drug testing, as you can see, they rely heavily on CPT definitions. Very important verbiage for both CPT codes 80320-80377 and HCPCS codes G0480-G0483 is that these codes are not to be used for drug testing by immunoassay and enzymatic methods. One last thing to note – all the HCPCS drug testing codes include testing for specimen validation, such as pH, creatinine, etc. Testing to ensure the integrity of the specimen should not be billed separately.

For 2016, we may not have gotten what we wanted when it comes to drug testing codes, but we have to live with what we got. So get busy and update your charge description master.

Almost everyone reading this newsletter works in the field of healthcare. But even those of us in healthcare often take for granted the amazing advancements in medicine over the last few centuries. Last fall I visited Yorktown, one of the major cities involved in America’s fight for independence (for fellow history buffs, I highly recommend visiting there). Do you realize that during the Revolutionary War almost three times the number of Americans died from disease as were killed in war? Historians believe around 17,000 deaths occurred from disease compared to 6,800 casualties from battle. Modern medicine involves a variety of things that are put into or onto bodies to heal or improve health. Part 2 of our discussion of the January 2016 OPPS Update looks at Medicare’s latest rules for devices, drugs, biologicals, and blood products.

Devices

The key to understanding the rules for Medicare payment for devices is to know that payment for most devices is bundled into the payment for the associated procedure. Medicare does pay for the device – the payment is just part of the procedure payment. In order to be able to adjust payments when a device is separately reimbursed (pass-through payments) or when the hospital incurs no cost or reduced cost for the device (device credits), Medicare calculates the percentage of each APC that is attributable to the cost of the device. This is known as the device-offset amount.

Certain categories of devices are eligible for transitional pass-through payments for 2-3 years. Effective January 1, 2016, HCPCS code C1822, Generator, neurostimulator (implantable), high frequency, with rechargeable battery and charging system, is being added as a pass-through device. There are a number of considerations related to this new pass-through device.

• Pass-through devices, including C1822, are assigned a status indicator of “H.” This means that the device is reimbursed based on cost. Medicare calculates the payment amount by applying your hospital’s cost-to-charge ratio to the device charge on the claim.
• HCPCS C1822 should always be reported with CPT code 63685 (Insertion or replacement of spinal neurostimulator pulse generator or receiver, direct or inductive coupling) which is assigned to APC 5464.
• Medicare will deduct the device-offset amount for this APC from the pass-through payment amount for the device when HCPCS C1822 is reported.
• The description of HCPCS code C1820 was changed to differentiate it from the C1822. C1820 is Generator, neurostimulator (implantable), non-high frequency, with rechargeable battery and charging system. C1820 is non-high frequency whereas C1822 is high-frequency.

The 2016 APC off-set file can be found at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/passthrough_payment.html .

Another important aspect of understanding device payments is to know that device-intensive APCs are those APCs with a device-offset amount greater than 40%. Over 40% of the APC payment is “payment” for the device. Beginning in 2016, Medicare will make an additional payment adjustment for device-intensive APCs when the procedure is discontinued prior to the administration of anesthesia (reported with modifier -73). Modifier 73 is appended to surgical procedures for which anesthesia is planned, but the procedure is terminated after the patient is prepared and taken to the room where the procedure is to be performed, but prior to the administration of anesthesia. Modifier 73 reduces the procedure payment by 50%. Effective January 1, 2016, the device off-set amount will be deducted from the APC payment and then the 50% reduction will be applied.

Also for 2016, all procedures assigned to a device-intensive APC will require a device code to be present on the claim. Table 42 in the 2016 OPPS Final Rule lists the device-intensive APCs.

Corneal Tissue

In 2016, Medicare will only pay separately for the procurement or acquisition of corneal tissue when it is used in a corneal transplant procedure. Hospitals should only report HCPCS code V2785 (Processing, preserving and transporting corneal tissue) when corneal tissue is used in a corneal transplant procedure described by one of the following CPT codes:

• 65710 (Keratoplasty (corneal transplant); anterior lamellar);
• 65730 (Keratoplasty (corneal transplant); penetrating (except in aphakia or pseudophakia));
• 65750 (Keratoplasty (corneal transplant); penetrating (in aphakia));
• 65755 (Keratoplasty (corneal transplant); penetrating (in pseudophakia));
• 65756 (Keratoplasty (corneal transplant); endothelial);
• 65765 (Keratophakia);
• 65767 (Epikeratoplasty); and
• Any successor code or new code describing a new type of corneal transplant procedure that uses eye banked corneal tissue.

Blood Products

There are three new blood product codes for 2016 for pathogen-reduced blood products – that is blood products treated to eliminate certain pathogens and reduce the risk of transfusion-associated infections, such as those treated with Amotosalen and UVA light. The new codes are:

‍Drugs

Like devices, payments for drugs have special rules under OPPS. Payment for drugs below a threshold per-day cost ($100 for 2016) is packaged; drugs exceeding this threshold are separately reimbursed at average sales price (ASP) + 6%, which provides payment for both the acquisition cost and pharmacy overhead costs associated with the drug, biological or therapeutic radiopharmaceutical. Pass-through drugs, biologicals and radiopharmaceuticals are also paid at ASP+6%.  The January 2016 OPPS Update article lists a number of new and revised drug HCPCS codes plus other information concerning drug payments.

• See the article for the complete lists – Table 7 for new drug codes, Table 8 for changed codes or revised descriptions, and Table 9 for Corrected Effective Dates for Certain Vaccine Codes.
• For the new codes, remember that Status Indicator
• G is a pass-through drug,
• K is a separately paid non-pass-through drug/biological,
• E is not paid by Medicare for outpatients, and
• N is a packaged drug.
• For changed codes and descriptions, pay close attention to the units in the old and new descriptors, for example
• 2015 - C9443, Injection, dalbavancin, 10 mg; 2016 - J0875, Injection, dalbavancin, 5 mg
• 2015 - J1446, Injection, tbo-filgrastim, 5 micrograms; 2016 - J1447, Injection, tbo-filgrastim, 1 microgram
• 2015 - J7506, Prednisone, oral, per 5mg; 2016 - J7512, Prednisone, immediate release or delayed release, oral, 1 mg
• Biosimilars are paid the ASP of the biosimilar(s) described by the HCPCS code + 6% of the ASP of the reference product. Only the first eligible biosimilar biological product to a reference product will be eligible for pass-through status; subsequent biosimilars to a reference product will not meet the newness criterion.
• New FDA approved drugs, biologicals, and therapeutic radiopharmaceuticals without an assigned HCPCS code should be billed with HCPCS code C9399. New diagnostic radiopharmaceuticals and contrast materials are not to be reported with C9399. Until they are granted pass-through status and a new C code is assigned, report new diagnostic radiopharms with the appropriate HCPCS code:
• A4641 (Radiopharmaceutical, diagnostic, not otherwise classified),
• A9599 (Radiopharmaceutical, diagnostic, for beta-amyloid positron emission tomography (PET) imaging, per study dose), or
• J3490 (Unclassified drugs) (applicable to all new diagnostic radiopharmaceuticals used in non-beta-amyloid PET imaging)
• Report new contrast materials with HCPCS code:
• A9698 (Non-radioactive contrast imaging material, not otherwise classified, per study) or
• A9700 (Supply of injectable contrast material for use in echocardiography, per study

Skin substitute products that do not qualify for pass-through status are also packaged. Payment is packaged into the payment for the associated skin substitute application procedure. The skin substitute products are divided into two groups for packaging purposes:

1. High cost skin substitute products - application reported with CPT codes 15271-15278
2. Low cost skin substitute products - application reported with HCPCS code C5271-C5278

See the MLN Matters article for a list of the skin substitute products’ designations as high or low. All pass-through skin substitute products are to be reported in combination with one of the skin application procedures described by CPT code 15271-15278.

As you can tell from the above discussion, even though there are new advancements in technology, devices, and drugs, in the long run, Medicare may bundle the payment.

Medicare covers a growing number of preventive services. Excellent resources to learn about Medicare’s Preventive services include a Medicare booklet and website for beneficiaries and a Preventive Services Chart and the Medicare manuals (Claims Processing Manual, Chapter 18, Benefit Policy Manual, Chapter 15, and NCD Manual, Chapter 1, Part 4) for providers. One such screening benefit is screening for colorectal cancer. Medicare covers fecal-occult blood testing, sigmoidoscopy, colonoscopy, barium enemas, and most recently Cologuard™ - A Multitarget Stool DNA Test for colorectal cancer screening. There are frequency and diagnosis limitations so read the coverage requirements carefully.

This year there is a new procedure code for Cologuard. See the update to MLN Matters Article MM9115. The previous HCPCS code, G0464, (Colorectal cancer screening; stool-based DNA and fecal occult hemoglobin (for example, KRAS, NDRG4 and BMP3)) expired effective December 31, 2015 and is replaced with CPT code 81528 for dates of service on and after January 1, 2016.

As a review, Medicare covers Cologuard sDNA testing:

• Effective for dates of service on and after October 9, 2014
• Once every three years for
• Asymptomatic Medicare patients
• Between the ages of 50-85 years
• At average risk of developing colorectal cancer
• For hospital outpatients (types of bill 13x, 14x, and 85x)
• With ICD-9 diagnosis codes V76.41 and V76.51 on the claim prior to October 1, 2015 and ICD-10 diagnosis codes Z12.12 and Z12.11 on the claim for October 1, 2015 and after
• With HCPCS code G0464 for October 9, 2014 through December 31, 2015 and for CPT code 81528 for January 1, 2016 and after
• There is no coinsurance or deductible for this test

Other coverage updates from last month are listed below. Notice that yet another Medicare Administrative Contractor (NGS) has published a new policy on urine drug testing.

For those of you that do not live in the state of Alabama it is hard to comprehend just how big college football is in this state. When I was new to the state one of the first questions people would ask is “which team are you for?” As a transplant from “up north,” (Tennessee), the obvious answer for me was neither.

In the world of Medicare and Acute Care Hospitals one main question that keeps being asked is, “are you an inpatient or an outpatient.” And for the Medicare beneficiary that has spent zero or one midnight in a hospital bed, though the answer will ultimately be inpatient or outpatient, it is not always an obvious answer.

The Comprehensive Error Rate Testing (CERT) Program is used to calculate the improper payment estimate for the Medicare Fee-for-Service Program. Each November, the Department of Health and Human Services (HHS) publishes the improper payment rate in the Agency Financial Report at www.hhs.gov/afr. CMS later publishes more detailed information in an annual Medicare Fee-for-Service (FFS) Improper Payments Report and Appendices. This article will focus on why patient status for zero and one day lengths of stay remains a focus, who is keeping a close eye on this dilemma and resources for you to help assess this patient population in your hospital.

Why Zero and One Day Inpatient Lengths of Stay Continues to be a Focus?

“Are you and Inpatient or Outpatient” still being a question for zero and 1 midnight hospitalizations is best demonstrated in the Appendices table Projected Improper Payments by Length of Stay. This table was new to the Appendices in 2014 and again appears in the 2015 report. Depicted below is a compare of data from the 2014 table and 2015 table. While the improper payment rate dropped 9.3% it is this group of claims that continue to have the highest error ate.

 

Table 1: “Projected Improper Payments by Length of Stay” 2014 to 2015 Compare

‍Who is Monitoring for Compliance with Patient Status Assignment?

Beneficiary and Family Centered Care (BFCC) QIOs and Recovery Auditors

HHS indicated in the FY 2015 Agency Financial Report that they are committed to reducing improper payments in the Medicare FFS program. One of the five corrective actions they believe will have a considerable effect in preventing and reducing improper payments is the update to the “Two Midnight” rule in the CY 2016 OPPS Final Rule. At the same time they announced the following two changes in their education and enforcement strategies.

• “Beginning on October 1, 2015, the Quality Improvement Organizations (QIOs) assumed responsibility to conduct initial patient status review of providers to determine the appropriateness of Part A payment for short stay inpatient hospital claims. From October 1, 2015 through December 31, 2015, short stay inpatient hospital reviews conducted by the QIOs will be based on Medicare’s current payment policies.
• Beginning on January 1, 2016, QIOs and Recovery Audit Contractors (RACs) will conduct patient status reviews in accordance with policy changes finalized in the Hospital Outpatient Prospective Payment System rule (CMS-1613-P) and effective in calendar year 2016. Effective January 1, 2016, RACs may conduct patient status reviews only for those providers that have been referred by the QIO as exhibiting persistent noncompliance with Medicare payment policies.”

To learn more about the transition of patient status reviews, you can:

• Read a related article at http://www.mmplusinc.com/news-articles/item/two-midnight-rule-once-again-to-be-or-not-to-be;or
• Join us for our 2016 Medicare Updates Webinar tomorrow afternoon.

Office of Inspector General

• FY 2014 and 2015 Work Plans: Inpatient Admission Criteria (OEI; 00-00-00000)

With the implementation of the “Two Midnight” Rule, the OIG added new inpatient admission criteria to the Work Plan in FY 2014 and 2015. This issue was focused on determining the impact of the new admission criteria on hospital billing, Medicare payments, and beneficiary payments. It also was focused on determining how billing varied among hospitals in FY 2014. This focus was based on the fact that “previous OIG work identified millions of dollars in overpayments to hospitals for short inpatient stays that should have been billed as outpatient stays. Beginning in FY 2014, new criteria state that physicians should admit for inpatient care those beneficiaries who are expected to need at least 2 nights of hospital care (known as the “two midnight policy””). Beneficiaries whose care is expected to last fewer than 2 nights should be treated as outpatients. The criteria represent a substantial change in the way hospitals bill for inpatient and outpatient stays.”

• FY 2016 Work Plan: Hospitals’ use of outpatient and inpatient stays under Medicare’s two-midnight rule (OEI; 02-15-00020)

With hospitals now entering into their third fiscal year under the “Two Midnight” Policy, as part of the FY 2016 Work Plan the OIG will “determine how hospitals’ use of outpatient and inpatient stays changed under Medicare’s two-midnight rule, as well as how Medicare and beneficiary payments for these stays changed, by comparing claims for hospital stays in the year prior to the effective date of the two-midnight rule to stays in the year following the effective date of that rule. We will also determine the extent to which the use of outpatient and inpatient stays varied among hospitals. CMS implemented the two-midnight rule on October 1, 2013. This rule represents a substantial change to the criteria that hospital physicians are expected to use when deciding whether to admit beneficiaries as inpatients or treat them as outpatients.”

Hospital Zero and One Day Inpatient Stay Volume

The CERT, OIG, BFCC-QIOs and potentially the Recovery Auditors are monitoring hospital’s compliance with the “Two-Midnight” policy by auditing zero and one midnight inpatient claims. But, do you know how this specific patient volume has changed where you work?

PEPPER Report

One source available to IPPS Participating Hospitals is the Program for Evaluating Payment Patterns Electronic Report (PEPPER). In the PEPPER User’s Guide, the OIG encourages hospitals to develop and implement a compliance program and conduct regular audits as a part of this program to ensure charges for Medicare services have been correctly documented and billed. They note that the PEPPER “can help guide the hospital’s auditing and monitoring activities.”

This report focuses on Medicare severity diagnosis related groups (DRGs) and discharges at risk for improper payment due to billing, coding and/or admission necessity.” One-day and Same-day Stays for Medical and Surgical DRGs are target areas in the report. A hospital is compared to its state, Medicare Administrative Contractor (MAC) Jurisdiction and the Nation for each target area.

The tables below compare the Nationals, J-J MAC Jurisdiction (Alabama, Georgia and Tennessee) and Alabama’s 80th Percentile for the 3rd quarter (April – June) of the Fiscal Year prior to implementation of the “Two-Midnight” Policy (2013), one year after implementation (2014) and the most current 3rd quarter fiscal year data (2015).

 

The PEPPER provides the following suggested interventions for Hospitals that are High Outliers:

“This could indicate that there are unnecessary admissions related to inappropriate use of admission screening criteria or outpatient observation. A sample of same- and/or one-day stay cases should be reviewed to determine if inpatient admission was necessary or if care could have been provided more efficiently on an outpatient basis (e.g., outpatient observation). Hospitals may generate data profiles to identify same- and/or one-day stays sorted by DRG, physician or admission source to assist in identification of any patterns related to same- and/or one-day stays. Hospitals may also wish to identify whether patients admitted for same- and/or one- day stays were treated in outpatient, outpatient observation or the emergency department for one or more nights prior to the inpatient admission. Hospitals should not review same- and/or one- day stays that are associated with procedures designated by CMS as “inpatient only.”

RealTime Medicare Data

Another source that can assist you is our sister company RealTime Medicare Data (RTMD). RTMD collects over 680 million Medicare claims annually from 23 states and the District of Columbia, and allows for searching of over 5.1 billion historical claims. In response to the “Two-Midnight” Policy, RTMD has available in their suite of Inpatient Hospital reports a One Day Stay Report. This report enables a hospital to view one day stay paid claims data by DRG and Physician to direct where audits should be focused. For further information on all that RTMD has to offer you can visit their website at www.rtmd.org.

 

Resources

Department of Health and Human Services Fiscal Year 2015 Agency Financial Report: http://www.hhs.gov/afr/fy-2015-hhs-agency-financial-report.pdf

The Supplementary Appendices for the Medicare Fee-for-Services 2015 Improper Payments Report: https://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/CERT/CERT-Reports-Items/Downloads/AppendicesMedicareFee-for-Service2015ImproperPaymentsReport.pdf

FY 2016 OIG Work Plan: http://oig.hhs.gov/reports-and-publications/archives/workplan/2016/oig-work-plan-2016.pdf

Short-term Acute Care Program for Evaluating Payment Patterns Electronic Report User’s Guide 18th Edition: https://www.pepperresources.org/Portals/0/Documents/PEPPER/ST/STPEPPERUsersGuide_Edition18.pdf

Do you know the difference in a law and a regulation pertaining to Medicare? Where do rules and sub-regulatory guidance fit in? This is valuable knowledge when dealing with Medicare and trying to figure out how to stay compliant with all the various requirements.

• A law is legislation that is enacted by Congress and signed into law by the President (or overridden by Congressional vote if vetoed by the President).
• Once a law is on the books, the appropriate Federal agency, in this case the Centers for Medicare and Medicaid Services (CMS), creates regulations to implement the provisions of the law. Regulations are generally published for industry and public comment as a “proposed rule” in the Federal Register, followed by a Final Rule, also published in the Federal Register, with response and possible revisions due to the comments received. Regulations in the Final Rule amend the Code of Federal Regulations (CFR).
• After regulations are final, CMS publishes sub-regulatory guidance in transmittals to provide direction, advice and instructions on implementing the regulations. Some transmittals update the Medicare manuals.

To be fully compliant, hospitals should follow Medicare laws, rules, regulations, and guidance. The further down the line you go, the more details there are. But sometimes, it can be like trying to clean eyeglasses with an oily cloth – the more you try to clarify, the cloudier it gets.

These various methods of establishing Medicare requirements often result in multiple publications discussing the same issue. That can be a good thing though, because people learn best through repetition. MLN Matters Article MM9486 (CR 9486) implements changes to and billing instructions for various policies implemented in the January 2016 OPPS update. There is so much information in this MLN article that I will only review some of the issues this week. I will review the rest of the issues in future articles. This week, let’s look at modifiers, observation, lab packaging, lung cancer screening and some items related to radiation therapy.

Modifiers

Modifier CA is not new, but the APC payment method associated with use of this modifier has changed. Modifier CA is used to report an inpatient-only procedure furnished to an outpatient who expires before the patient can be admitted as an inpatient or transferred. For 2016, this will be paid as a comprehensive APC. Medicare will make a single payment for all services reported on the claim, including the “inpatient-only” procedure through APC 5881.

Modifier CT is new for 2016 – it is to be reported on CT services furnished on equipment that does not meet the National Electrical Manufacturers Association (NEMA) Standard XR-29-2013. This applies to CPT codes 70450-70498; 71250-71275; 72125-72133; 72191-72194; 73200-73206; 73700-73706; 74150-74178; 74261-74263; and 75571-75574 and will result in a 5% reduction in payment for 2016. The reduction also applies when multiple CT scans are provided on the same day and paid under a composite payment if the equipment does not meet NEMA standards.

Observation

Payment for observation services is also transitioning from a composite payment to a comprehensive payment which means one bundled payment for all visits, observation services, and all other OPPS payable services and items reported on the claim (excluding all preventive services and certain Medicare Part B inpatient services). Services that were separately paid under the observation composite payment, such as injections, infusions, CTs, and MRIs, will no longer receive separate payment in 2016 when a comprehensive observation payment is made. Any clinic visit, Type A Emergency Department (ED) visit, Type B ED visit, critical care visit, or direct referral for observation services furnished in a non-surgical encounter by a hospital in conjunction with observation services of eight or more hours, will qualify for comprehensive payment through C-APC 8011. Obs is now assigned to Status Indicator J2.

Lab Packaging

The Status Indicator for packaged lab services is being changed from “N” (always packaged) to new SI “Q4” (“J1,” “J2,” “S,” “T,” “V,” “Q1,” “Q2,” or “Q3” packaged). This allows separate payment for lab services on outpatient claims (13x type of bill) that contain only laboratory services without having to use the L1 modifier. The L1 modifier is now only required to report unrelated lab services provided with other outpatient services when ordered by a different practitioner for a different diagnosis.

Lung Cancer Screening

In the Final Rule, CMS announced two newly created HCPCS codes to report lung cancer screening counseling visit (G0296) and annual screening by low-dose CT (G0297). These screening benefits were effective February 5, 2015 through an NCD, but Medicare will not be accepting claims until January 4, 2016. To be eligible for the LDCT lung cancer screening benefit, patients must:

• Be 55-77 years of age
• Be asymptomatic (no signs or symptoms of lung cancer)
• Have a tobacco smoking history of at least 30 pack-years (one pack-year = smoking one pack per day for one year; 1 pack = 20 cigarettes)
• Be a current smoker or one who has quit smoking within the last 15 years; and
• Receive a written order for lung cancer screening with LDCT that meets the requirements described in the NCD. Written orders for lung cancer LDCT screenings must be appropriately documented in the beneficiary’s medical records.

See MLN Matters Article MM9246 for more information.

IMRT Planning Services

Payment for IMRT planning services billed with CPT code 77301 includes payment for the services described by several other CPT codes, whether these services are performed on the same or different dates of service. CPT codes 77014, 77280-77295, 77305-77321, 77331, 77336, and 77370 may only be billed separately in addition to CPT 77301 if they are being performed in support of a separate and distinct non-IMRT radiation therapy for a different tumor.

Sterotactic Radiosurgery

Effective for dates of service on and after January 1, 2016 through December 31, 2017, certain planning and preparation services are not bundled into cranial single session Stereotactic Radiosurgery (SRS) procedures (CPT code 77371 or 77372) and may be reported and paid separately in addition to the SRS procedure. These procedures include:

• 70551 - Mri brain stem w/o dye
• 70552 - Mri brain stem w/dye
• 70553 - Mri brain stem w/o & w/dye
• 77011 - Ct scan for localization
• 77014 - Ct scan for therapy guide
• 77280 - Set radiation therapy field
• 77285 - Set radiation therapy field
• 77290 - Set radiation therapy field
• 77295 - 3-d radiotherapy plan
• 77336 - Radiation physics consult

Hospitals must report modifier “CP” for any other services, aside from the 10 codes above, that are adjunctive or related to SRS treatment but billed on a different date of service and within 30 days prior or 30 days after the date of service for either CPT codes 77371 or 77372.

Be sure to add this sub-regulatory guidance to your stockpile of Medicare knowledge and develop processes to be compliant with these regulations.

Dilemma:

What Place of Occurrence code is assigned for an injury that occurred in the backyard of the patient’s home?

 

Solution:

Use Y92.096, Garden or Yard of Other Non-Institutional Residence as the Place of Occurrence of the External Cause. There are more options now for home as the Place of Occurrence in I-10, such as, House, Single Family. However as a reminder, these specific sites must be documented in order for that code to be assigned. Do not assume the home to be a single-family house.

Resource: AHA ICD-10 Coding Handbook, TruCode Encoder