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The Fiscal Year (FY) 2016 Inpatient Prospective Payment System (IPPS) Final Rule builds on the CMS’s recurring theme of moving the health care system toward paying for quality rather than quantity as CMS indicates in a related Fact Sheet “the Administration has set measurable goals and a timeline to move the Medicare program, and the health care system at large, toward paying providers based on quality, rather than the quantity of care they give patients. The final rule includes policies that advance that vision and of several final rules that reflect a broader Administration-wide strategy to create a health care system that results in better care, smarter spending, and healthier people.”

This article highlights Fiscal Year 2016 IPPS Final Rule (CMS-1632-F) Payment Rate changes and changes to the Quality Programs.

Finalized Changes to Payment Rates for IPPS Participating Acute Care Hospitals

• Hospitals that successfully participate in the Hospital Inpatient Quality Reporting (IQR) Program and are meaningful electronic health record (EHR) users will see a 0.9% increase in operating payments.
• Hospitals that do not successfully participate in the Hospital IQR Program and submit the required quality data will see a one-fourth reduction in their Market Basket update.
• Hospitals that are not meaningful EHR users will see a one-half reduction in their Market Basket update.
• Additional Potential Penalties
• Hospital Value Based Purchasing (VBP) Program: Hospitals will either receive an incentive bonus or a penalty potentially as high as 3%.
• Hospital Readmission Reduction Program (HRRP): Hospitals will be penalized up to 3% for excessive readmission rates.
• Hospital Acquired Condition (HAC) Reduction Program: 1% penalty for hospitals in the lowest performing quartile.

Hospital Inpatient Quality Reporting (IQR) Program

Pneumonia Cohort Expanded

CMS finalized proposed cohort refinements to the following two previously adopted Pneumonia measures:

• The Hospital 30-Day All-Cause, Risk-Standardized Mortality Rate (RSMR) following Pneumonia Hospitalization measure
• The Hospital 30-Day All-Cause, Risk-Standardized Readmission Rate (RSRR) following Pneumonia Hospitalization measure

CMS defines “cohort” as the hospitalization, or “index admission,” that is included in each measure to determine if a patient died within 30 days of the index admission in the case of the Mortality Measure or if the patient was readmitted within 30 days in the case of the Readmission Measure.

For the FY 2017 payment determination and subsequent years the cohort for both measures has been expanded to include:

• Patients with a principal discharge diagnosis of pneumonia (the current reported cohort),
• Patients with a principal discharge diagnosis of aspiration pneumonia (new); and
• Patients with a principal discharge diagnosis of sepsis (excluding severe sepsis) with a secondary diagnosis of pneumonia coded as present on admission (POA).

More interesting than the actual cohort changes are the reasons cited by CMS for making the change.

• “Recent evidence has shown an increase in the use of sepsis and respiratory failure as principal diagnosis codes among patients hospitalized with pneumonia. Pneumonia patients with these principal diagnosis codes are not currently included in the measure cohort, and including them would better capture the complete patient population of a hospital with patients receiving clinical management and treatment for pneumonia.
• Second, “efforts to evaluate changes over time in pneumonia outcomes could be biased as coding practices change.”

CMS Adds Seven New Measures to the Hospital IQR Program

CMS finalized seven new measures for the FY 2018 and 2019 payment determinations and subsequent years. The following table highlights the new measures and the year the measure will be included in a hospital’s payment determination.

 

CMS Removes Nine Measures from the Hospital IQR Program

For the FY 2018 payment determination and subsequent years, CMS finalized the removal of the following nine chart-abstracted measures:

1. STK-01 Venous Thromboembolism Prophylaxis
2. STK-06 Discharged on Statin Medication*
3. STK-08 Stroke Education*
4. VTE-1 Venous Thromboembolism Prophylaxis*
5. VTE-2 Intensive Care Unit Venous Thromboembolism Prophylaxis*
6. VTE-3 Venous Thromboembolism Patients with Anticoagulation Overlap Therapy*
7. IMM-1 Pneumococcal Immunization
8. SCIP-Inf-4 Cardiac Surgery Patients with Controlled Postoperative Blood Glucose
9. AMI-7a Fibrinolytic Therapy Received Within 30 Minutes of Hospital Arrival*

Note: Measures with an asterisk (*) were finalized to be removed from chart abstraction but are being retained as Electronic Clinical Quality Measures (eCQM) for the FY 2018 payment determination and subsequent years as proposed.

Hospital Value Based Purchasing (VBP) Program

In the Final Rule CMS estimates that the total amount available for value-based incentive payments for FY 2016 is $1,499,107,502, based on the December 2014 update of the FY 2014 MedPAR file. This estimate will be updated for the FY 2016 IPPS/LTCH PPS final rule, using the March 2015 update of the FY 2014 MedPAR file.

As required by section 1886(o)(7)(B) of the Act, incentive payments will be funded for FY 2016 through a reduction to the FY 2016 base operating DRG payment for each discharge of 1.75 percent.

CMS finalized the removal of two current measures effective with the FY 2018 program year.

• IMM-2 Influenza Immunization
  Note: CMS does believe that “this measure should continue to be part of the Hospital IQR Program measure set because it is the only measure that addresses the Best Practices to Enable Healthy Living goal in the CMS Quality Strategy and priority of the same name in the National Quality Strategy.”

• AMI-7a Fibrinolytic Therapy Received within 30 Minutes of Hospital Arrival

CMS finalized a New Care Coordination Measure for the FY 2018 Program Year.

• 3-Item Care Transition Measure (CTM-3) that will add the following three questions to the HCAHPS (Hospital Consumer Assessment of Healthcare Providers and Systems )Survey:

1. During this hospital stay, staff took my preferences and those of my family or caregiver into account in deciding what my health care needs would be when I left.
2. Strongly disagree
3. Disagree
4. Agree
5. Strongly Agree
   
   
6. When I left the hospital, I had a good understanding of the things I was responsible for in managing my health.
7. Strongly disagree
8. Disagree
9. Agree
10. Strongly Agree
11. When I left the hospital, I clearly understood the purpose for taking each of my medications.
12. Strongly disagree
13. Disagree
14. Agree
15. Strongly Agree
16. I was not given any medication when I left the hospital

Note: The CTM-3 measure was developed by Eric Coleman, MD, MPH, Professor of Medicine & Health at the Division of Health & Policy Research at the University of Colorado Anschutz Medical Campus. Dr. Coleman is the founder and director of The Care Transitions Program (www.caretransitions.org).

CMS indicated that they intend to propose in future rulemaking the inclusion of non-ICU locations in the Catheter Association Urinary Tract Infection (CAUTI) and Central Line-Associated Blood Stream Infection (CLABSI) measures beginning with the FY 2019 program year. “Selected ward (non-ICU) locations are defined as adult or pediatric medical, surgical, and medical/surgical wards [79 FY 50061; 78 FR 50787].”

CMS finalized a Hospital 30-day All-Cause, Risk-Standardized Mortality rate Following Chronic Obstructive Pulmonary Disease (COPD) Hospitalization Measure for the FY 2021 Program Year.

CMS indicates that this measure “is appropriate for the Hospital VBP Program because it addresses a high volume, high cost condition, and chronic lower respiratory disease (including COPD) is the third leading cause of mortality in the United States. The measure aligns with the CMS Quality Strategy Goal of Effective Prevention and Treatment.”

Hospital Acquired Conditions (HAC) Reduction Program

Even though there were no proposals to add or remove measures for FY 2016, the CMS reminds readers that in the FY 2015 IPPS Final Rule they finalized the following measures for the FY 2016 Program:

• AHRQ PSI – 90 Composite

This measure currently consists of the following eight component indicators:             

• PSI-3 Pressure ulcer rate,
• PSI-6 Iatrogenic pneumothorax rate,
• PSI-7 Central venous catheter-related blood stream infections rate,
• PSI-8 Postoperative hip fracture rate,
• PSI-12 Perioperative pulmonary embolism or Deep vein thrombosis rate,
• PSI-13 Postoperative sepsis rate,
• PSI-14 Postoperative Wound dehiscence rate; and
• PSI-15 Accidental puncture and laceration rate.
• CDC Central Line-Associated Bloodstream infection (CLABSI),
• Catheter-Associated Urinary Tract Infection (CAUTI); and
• Colon and Abdominal Hysterectomy Surgical Site Infection (SSI).

As part of the National Quality Foundation maintenance review process, the Agency for Healthcare Research and Quality (AHRQ) is considering adding the following to the PSI Composite measure:

• PSI-9 Perioperative hemorrhage rate,
• PSI-10 Perioperative physiologic metabolic derangement rate; and
• PSI-11 Post-operative respiratory failure rate.

CMS indicates that the potential inclusion of these measures would be a significant change and that they would engage in notice-and-comment rulemaking prior to requiring the reporting of a revised composite for the HAC Reduction Program.

Hospital Readmissions Reduction Program (HRRP)

CMS Expands the Pneumonia Readmission Measure Cohort

CMS finalized a refinement to the pneumonia readmissions measure which would expand the cohort for the FY 2017 payment determination and subsequent years. As discussed earlier in this article, CMS defines “cohort” as the hospitalizations or “index admissions,” that are included in the measure.

Currently, this measure includes hospitalizations for patients with a principal discharge diagnosis of pneumonia indicating viral or bacterial pneumonia. CMS finalized a modified version of their proposal to include patients with a principal discharge diagnosis of pneumonia or aspiration pneumonia, and patients with a principal discharge diagnosis of sepsis (excluding severe sepsis) with a secondary diagnosis of pneumonia coded as POA.

CMS indicates that “the purpose of expanding the cohort of the current pneumonia readmission measure is to include a broader spectrum of pneumonia patients and respond to changes in coding practices that were potentially biasing estimates of the performance of hospitals.”

A related Fact Sheet indicates that the “CMS is also continuing to monitor the impact of socioeconmomic status on provider results in our quality programs, and is working with the National Quality Forum as they undertake a two-year trial to test sociodemographic factor risk adjustment. The Office of the Assistant Secretary for Planning and Evaluation is currently researching the impact of sociodemographic status as directed by the Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act), and CMS will closely examine the findings presented in their reports to Congress and related Secretarial recommendations at such time as they are available.”

Do You Know Your Hospital’s Readmission Penalty?

With hospitals facing financial challenges, do you know your Hospital’s Readmission Penalty for the coming Fiscal Year? Kaiser Health News (KHN) is a nonprofit national health policy news service and on August 3rd, Jordan Rau of KHN released the article Half of Nation’s Hospitals Fail Again To Escape Medicare’s Readmission Penalties. This article provides the reader a link to a PDF file of Medicare Readmission Penalties by Hospital for all four years of the program (FY 2013 through FY 2016).

The entire article can be accessed at: http://khn.org/news/half-of-nations-hospitals-fail-again-to-escape-medicares-readmission-penalties/?utm_campaign=KHN%3A+Afternoon+Edition&utm_source=hs_email&utm_medium=email&utm_content=21032373&_hsenc=p2ANqtz--tfj9Nw4n9neCfizWv04BocrIp3tC95xA5l23W02GylGLyB4LwwY-TqyPtYDzFc3SMx6mV8RP_X1MzflMnd3EhbTYe4g&_hsmi=21032373

The entire Final Rule can be accessed at http://www.gpo.gov/fdsys/pkg/FR-2015-08-17/pdf/2015-19049.pdf.

For those closely involved with Quality Initiatives in your facility here is list of where you can find the specific Quality Program Updates in the Final Rule pdf.

• Hospital Readmission Reduction Program is on pages 206-219,
• Hospital Value-Based Purchasing (VBP) Program is on pages 220-246,
• Hospital-Acquired Condition (HAC) Reduction Program is on pages 246 – 257; and
• Hospital Inpatient Quality Reporting (IQR) Program is on pages 316-380.

A standard circus act throughout time has been jumping through hoops – little dogs with bows and skirts jump through hoops; growling lions and tigers jump through hoops; even people jump through flaming hoops. There is a new “act” in town and it too requires jumping through hoops.

The NOTICE Act

On August 6, 2015, President Obama signed into law the NOTICE Act (Notice of Observation Treatment and Implication for Care Eligibility Act). The NOTICE Act requires hospitals to:

• Provide written and oral notification to patients when they have received observation services for more than 24 hours.
• Notification must be done within 36 hours from the beginning of observation services or at the time of discharge, whichever is first.
• The notice must explain the patient’s status (outpatient with observation services) and the reasons for the outpatient with obs status as opposed to being admitted as an inpatient.
• The notice must also explain the implications of that status for cost-sharing requirements and for subsequent eligibility for coverage of services furnished by a skilled nursing facility.
• The notice must be “written and formatted using plain language and made available in appropriate languages.”
• The patient or their representative must acknowledge receipt of the notice with their signature, or the annotation and signature of the presenter if the patient refuses to sign.
• Hospitals have one year – until August 2016 – to implement this requirement.

CMS may provide additional guidance on the format and requirements for the notice prior to the implementation date. For example, what constitutes “appropriate languages?”

What This Means for Hospitals and Patients

If hospitals are applying the two-midnight inpatient admission rule correctly, the volume of patients receiving observation services for more than 24 hours without subsequently being converted to inpatient status should be low. Remember if a patient requires medically necessary services beyond a second midnight, Medicare regulations state that the patient should be admitted as an inpatient. Patients who no longer require medically necessary services but remain in the hospital for convenience reasons do not meet the criteria for observation services, so observation hours should no longer be charged. Here is one shortcoming of the new law – it does not address patients in an extended outpatient “without observation” status. An Advance Beneficiary Notice (ABN) can be given to these patients who no longer require medically necessary treatment in the hospital setting but remain in an extended outpatient status if the hospital continues to charge for hourly services.

Several states including Connecticut, Maryland, New York, Pennsylvania and Virginia, already require hospitals to give patients notices about observation care and some hospitals in other states are voluntarily providing notices to patients concerning their status. Hospitals have a whole year to develop a process for implementing this requirement – whether it is to modify their current notification process or come up with a new process.

One purpose of the notice is to explain “cost-sharing” – that is the patient’s financial responsibility of outpatient status with observation versus inpatient status. It would be rare that the patient’s deductible and co-pay for observation care would exceed the inpatient deductible of $1,260. The outpatient deductible is only $147 per year for all Part B services and hospital outpatient co-pay is around 20% of the observation payment (proposed to be " $2,100 for 2016) and other separately payable services. If the 2016 OPPS proposal for a comprehensive observation payment goes forward, all adjunctive services provided during the outpatient with observation stay are bundled into the observation payment. Patients in an outpatient hospital stay are also responsible for self-administered drugs but again it is unlikely that the combined outpatient cost-sharing will exceed the inpatient deductible amount. The one exception is for patients who do not have Part B coverage – these patients would be responsible for the cost for the total outpatient care. As opposed to the Important Message from Medicare for inpatient admissions, under this Observation Notice patients do not have any appeal rights – their only options if they are concerned about their costs are to try to sway their physician to admit them or leave the hospital.

It is also unlikely that a patient receiving only outpatient with observation services for greater than 24 hours would be a candidate for a skilled nursing facility (SNF) admission – another notification requirement of the act. Medicare beneficiaries must have a qualifying three-day inpatient stay to qualify for Medicare benefits for a SNF admission. In the days prior to the two-midnight rule, it was not unusual to have patients with extended observation stays of 3 days or longer that were not eligible for Medicare coverage of a SNF admission. The more likely scenario now, post-two-midnight rule, is that patients receiving observation services will be converted to an inpatient status for hospital care prior to being transferred to a SNF. The problem here, not addressed by the new law, is whether the post-observation care inpatient admission lasts for three days, enough to qualify for the SNF admission.

So hospitals are left with another hoop to jump through that, although well-intentioned, may fall short on protecting the patient.

The summer heat is brutal these days. Everyone is looking for ways to beat the heat – staying inside in air conditioned comfort, jumping in a pool or under a sprinkler, and drinking lots and lots of water. But there are conditions and illnesses that result in dehydration at any time of the year where infusion of fluids is needed for treatment. What is required by Medicare in order for hydration services to be covered?

A couple of weeks ago, the Wednesday@One included an article about the July 2015 Medicare Quarterly Provider Compliance Newsletter. The Compliance Newsletter mentioned Recovery Auditor findings for hydration services lacking medically necessary diagnoses required by a Novitas Local Coverage Determination (LCD). At Medical Management Plus, we receive numerous questions related to hydration services, so this week I offer some guidance for hydration services based on the Novitas LCD, another LCD and three coverage Articles from various Medicare Administrative Contractors (MACs).

CPT instructions require the administration of a hydration infusion of more than 30 minutes in order to allow the coding of hydration as an initial service. Hydration of 30 minutes or less is not separately billable. This means hydration must last at least 31 minutes in order to bill it. If there is no documented stop time, the duration of the hydration infusion is unknown and should not be billed.

There must be a practitioner’s order for hydration therapy and documentation of the reason a patient needs hydration in the medical record.

Hydration for the following reasons is not considered medically necessary therapeutic hydration and is not covered by Medicare.

• Hydration to maintain vascular access/vessel patency is not covered.
• Fluids used solely to administer drugs is considered incidental hydration and not separately billable.
• Administration of fluids with blood transfusions or between chemotherapeutic agents to flush lines is not separately billable.

Covered indications for hydration services vary between the different coverage articles and LCDs:

• Palmetto’s Article (A53402) simply states hydration must be medically reasonable and necessary for a clinical condition that warrants hydration.
• Noridian’s Articles (A53857 and A50359) states, “Routine administration of IV fluids without documentation supporting signs and/or symptoms including those of dehydration or fluid loss is not supported as medically necessary.”
• Novitas’s LCD (L32738) indicates coverage for clinical manifestations of dehydration or volume depletion and in conjunction with chemotherapy. Hydration with chemotherapy is covered only when the infusion is prolonged and done sequentially (done hour(s) before and/or after administration of chemotherapy), and when the volume status of a beneficiary is compromised or will be compromised by side effects of chemotherapy or an illness.
• Cahaba’s LCD (L32290) lists four different medically necessary reasons for hydration:
• Documented volume depletion,
• In conjunction with chemotherapy (same restrictions as Novitas policy),
• Some endocrine conditions such as hypercalcemia, and
• As an adjunct to the treatment of hypotension.

There are a few additional restrictions in some policies other than those already mentioned:

• Cahaba and Novitas LCDs state that rehydration with the administration of an amount of fluid equal to or less than 500 ml is not reasonable and necessary.
• Cahaba also claims rehydration should only take a few hours, so the medical necessity of hydration lasting beyond 12 hours must be supported by documentation.
• The Noridian articles do not specify a certain rate of infusion but do clarify that to qualify as medically necessary hydration, the rate of infusion should support performance of this service for rapid replenishment.

If your MAC jurisdiction has a coverage policy for hydration services, please read it carefully to learn all of the indications and limitations of coverage. If your MAC does not have a policy that addresses hydration, the guidelines in the policies referenced here may provide some guidance for your hospital. Continue to monitor your MAC’s draft and new policies for any future requirements for hydration services.

Q:

CPT guidance indicates it is acceptable to report CPT code 31624, Bronchoscopy with bronchial alveolar lavage, with a bilateral modifier when this procedure is performed bilaterally. However, a comment on a recent MMP HIQUP report stated this was not appropriate. We are confused – could you please explain?

A:

This is one of those examples where the CPT guidelines differ from Medicare guidelines. Very similar to the guidelines for billing modifier 50 for certain cystoscopy procedures, but Medicare says modifier 50 should not be used.

To our understanding, when Medicare processes a hospital claim, they apply the bilateral surgery indicators from the Physician fee schedule RVU file, and that is the basis for the edit you see in the HIQUP Report. For the code range 31623 – 31656, the bilateral surgery indicator is a zero, which means “Do not submit these procedures with modifier 50”. The RVU Explanation for Bilateral Indicator “0” states: “The bilateral adjustment is inappropriate for codes in this category (a) because of physiology or anatomy, or (b) because the code description specifically states that it is a unilateral procedure and there is an existing code for the bilateral procedure.”

The good news is - - if you submit modifier 50, Medicare ignores it and pays the code as quantity of 1, so this should not result in an overpayment. We think this is a very low risk for recoupment since overpayment does not occur, but it is “possible” RAC could cite inappropriate billing and try to recoup your correct payment. We say this based on other RAC targets where the correct code was billed, correct payment was received, but there was some other technicality cited as incorrect billing (wrong revenue code, modifier RT/LT).

And don’t try billing this code with modifiers RT and LT . . . since the MUE for these codes is 1 – that would result in no payment at all for the procedure due to exceeding the MUE. 

We all realize that to be effective in our jobs, we must have the cooperation of others and this is especially true when it comes to healthcare. Physicians rely on hospitals to provide the tools and services they need to care for their patients, and hospitals rely on physicians to utilize those services appropriately and to provide sufficient documentation to support coding, billing and payment. The Medicare Quarterly Compliance Newsletter for July is now available and provides several examples of issues where team work between physicians and hospitals is a must. Most of the articles in this quarter’s edition focus on physician issues, but there are a couple of articles that relate to hospital outpatient services and some instructions in the physician articles that will benefit hospitals as well.

Bevacizumab Medical Necessity (page 15 in the Compliance Newsletter)

Recovery Auditors have an automated edit to identify claims for Bevacizumab, J9035, that are incorrectly paid when they do not contain a diagnosis code required by a Local Coverage Determination (LCD). After a general description of Medicare requirements for drug coverage and identification of a specific CGS LCD that list diagnoses for a number of drugs and biologicals used to treat cancer and other acute and chronic conditions, the article discusses Medicare coverage of off-label drug usage. Drugs used for indications other than those in the approved labeling may be covered under Medicare if it is determined that the use is medically accepted, taking into consideration the major drug compendia, authoritative medical literatures, and/or accepted standards of medical practice. Some local coverage policies have been expanded to include off label usage in accordance with CMS Policy for Off Label Usage.

The Medicare Benefit Policy Manual, Chapter 15, section 50.4.5, provides guidance on the off-label use of drugs and biologicals in an anti-cancer chemotherapeutic regimen. Per the manual, “In general, a use is identified by a compendium as medically accepted if the:

1. indication is a Category 1 or 2A in NCCN, or Class I, Class IIa, or Class IIb in DrugDex; or,
2. narrative text in AHFS-DI or Clinical Pharmacology is supportive.

A use is not medically accepted by a compendium if the:

1. indication is a Category 3 in NCCN or a Class III in DrugDex; or,
2. narrative text in AHFS or Clinical Pharmacology is “not supportive.”

The complete absence of narrative text on a use is considered neither supportive nor non-supportive.”

Contractors may also determine to cover off-label uses that are supported by clinical research based on evaluation of evidence in certain specified peer-reviewed medical literature. FDA-approved drugs and biologicals may also be considered for use in the determination of medically accepted indications for off-label use if determined by the contractor to be reasonable and necessary. Refer to the complete manual instructions for specific details of coverage.

There are also a number of LCDs and Articles that address the coverage of chemotherapeutic use of Bevacizumab and off-label uses of drugs.

Providers also need to bear in mind that some Medicare Administrative Contractors (MACs) are performing probe reviews and targeted reviews on anti-cancer drugs including Bevacizumab. These reviews have significant denial rates due to lack of medical necessity, failure to follow established protocols and lack of documentation, such as physician’s orders.

So What Should Providers Do to Ensure Coverage of Anti-Cancer Treatments

• Be aware of any coverage policies in your MAC jurisdiction and follow the diagnosis requirements.
• For off-label use not included as covered in your MAC’s LCD, verify that your off-label usage is supported by Medicare approved standards in the pharmaceutical compendia or accepted peer-reviewed medical literature. Appeal any denials and be sure to include the supporting medical literature with your appeal.
• Follow established and accepted protocols for anti-cancer chemotherapeutic regimens.
• Make sure the documentation of services is complete and sufficient to support your billing.
• Be aware of probe and targeted reviews by your MAC for anti-cancer drugs and monitor your denial rates. Take corrective actions based on denial reasons.

Other issues related to hospitals identified in the July Compliance Newsletter include:

• Claims lacking medical necessity for hydration services based on LCD requirements (page 22)
• Physician claims with insufficient documentation for nasal endoscopy (pg 7), lithotripsy (pg 9), and lumbar spinal fusion (pg 12). Although these reviews focused on physician services, hospital payment may also be affected as it is often dependent on the physician’s documentation. Hospitals must work with physicians to make sure the documentation for these services includes:
• The correct date of service;
• The reason for performing the procedure;
• The results of the procedure;
• A physician’s signature; and/or
• A signature log or attestation for an illegible signature.

As often is the case, the hospital’s payment for services is dependent on the physician’s documentation and treatment choices. It must be a team effort for all providers to follow Medicare requirements and get the reimbursement they deserve.

Hospitals have struggled with the 2-Midnight Rule since it was implemented on October 1, 2013. Since then the Centers for Medicare and Medicare Services (CMS) has held numerous National Provider Calls, released sub-regulatory guidance, implemented a Probe and Educate Process conducting by Medicare Administrative Contractors (MACs) and requested public comment for an alternative short stay payment policy from health care providers. On July 1st, the CMS released the CY 2016 Outpatient Prospective Payment System (OPPS) Proposed Rule. Tucked way back on page 150 of the 177 page document, not only does CMS propose a change to the 2-Midnight Rule but they provide detail regarding a new medical review strategy that CMS will adopt on October 1, 2015 “regardless of whether the 2-midnight rule remains unchanged or is modified.”

Two-Midnight Rule Background

• The Two-Midnight Rule was implemented for admissions on or after October 1, 2013 in response to the concerning trend of extended “observation” services as these days do not count towards the three-day inpatient hospital stay required before a beneficiary becomes eligible for treatment in a skilled nursing facility and patient status can have a significant implications for provider reimbursement and beneficiary cost sharing.

• In general, the 2-Midnight Rule specified that an Inpatient stay is appropriate and payable under Medicare Part A when:
• The admitting physician has an expectation that a hospitalization will cross two midnights and the medical record documentation supports that expectation, or
• The beneficiary is being admitted for a Medicare designated Inpatient Only Procedure.

• Through sub-regulatory guidance, CMS has indicated “review contactors’ expectations for sufficient documentation will be rooted in good medical practice. Expected length of stay and the determination of the underlying need for medical or surgical care at the hospital must be supported by complex medical factors such as history and comorbidities, the severity of signs and symptoms, current medical needs, and the risk of an adverse event, which Medicare review contractors will expect to be documented in the physician assessment and plan of care. CMS does not anticipate that physicians will include a separate attestation of the expected length of stay, but rather that this information may be inferred from the physician’s standard medical documentation, such as his or her plan of care, treatment orders, and physician’s notes.”

• With the implementation of the Two-Midnight Rule, CMS initiated a Probe and Educate Process where Medicare Administrative Contractors (MACs) have been conducting prepayment patient status probe reviews of Medicare Part A inpatient hospital claims spanning 0 or 1 midnight after the formal inpatient admission to determine the medical necessity of the inpatient status in accordance with the 2 midnight benchmark.

• The Medicare Access and CHIP Reauthorization Act of 2015 extended the Probe and Educate Process through September 30, 2015. This Act also continues to prohibit Recovery Auditor from conducting post-payment medical reviews of inpatient hospital patient status claims with dates of admission between October 1, 2013 and September 30, 2015.

• Since the implementation of the Two-Midnight Rule, CMS has indicated that “other circumstances where an inpatient admission would be reasonable in the absence of an expectation of a 2 midnight stay should be rare and unusual. To date, CMS has identified “Mechanical Ventilation Initiated during Present Visit” as the only rare and unusual circumstance in which the 2-midnight benchmark would not apply.”

Proposed Policy Change for Medical Review of Inpatient Hospital Admissions under Medicare Part A

The proposed policy change for medical review of inpatient hospital admissions is aimed at changing “the standard by which inpatient admissions generally qualify for Part A payment based on feedback from hospitals and physicians to reiterate and emphasize the role of physician judgement.”

CMS is “proposing to modify our existing “rare and unusual” exceptions policy to allow for Medicare Part A payment on a case-by-case basis for inpatient admissions that do not satisfy the 2-midnight benchmark, if the documentation in the medical record supports the admitting physician’s determination that the patient requires inpatient hospital care despite an expected length of stay that is less than 2 midnights. For payment purposes, the following factors, among others, would be relevant to determining whether an inpatient admission where the patient stay is expected to be less than 2 midnights is nonetheless appropriate for Part A payment:

• The severity of the signs and symptoms exhibited by the patient;
• The medical predictability of something adverse happening to the patient; and
• The need for diagnostic studies that appropriately are outpatient services (that is, their performance does not ordinarily require the patient to remain at the hospital for 24 hours or more).

We note that, under the existing rare and unusual policy, only one exception—prolonged mechanical ventilation—has been identified to date. Upon further consideration and based on feedback from stakeholders, we believe there may be other patient-specific circumstances where certain cases may nonetheless be appropriate for Part A payment, absent an expected stay of at least 2 midnights. Such circumstances would be determined on a case-by-case basis. Under the proposed revised policy, for

purposes of Medicare payment, an inpatient admission will be payable under Part A if the documentation in the medical record supports either the admitting physician’s reasonable expectation that the patient will require hospital care spanning at least 2 midnights, or the physician’s determination based on factors such as those identified above, that the patient requires formal admission to the hospital on an inpatient basis”…”We are proposing to revise § 412.3(d) to state that when the admitting physician expects a hospital patient to require hospital care for only a limited period of time that does not cross 2 midnights, the services may be appropriate for payment under Medicare Part A if the physician determines and documents in the patient’s medical record that the patient requires a reasonable and necessary admission to the hospital as an inpatient. In general, we would expect that with most inpatient admissions where the stay is expected to last less than the 2-midnight benchmark, the patient will remain in the hospital at least overnight but acknowledge that the patient can be unexpectedly discharged or transferred to another hospital and not actually use a hospital bed overnight. Cases for which the physician determines that an inpatient admission is necessary, but that do not span at least 1 midnight, will be prioritized for medical review.”

“Under the proposed policy change, for stays for which the physician expects the patient to need less than 2 midnights of hospital care and the procedure is not on the inpatient only list or on the national exception list, an inpatient admission would be payable on a case-by-case basis under Medicare Part A in those circumstances under which the physician determines that an inpatient stay is warranted and the documentation in the medical record supports that an inpatient admission is necessary.”

The proposed rule makes a point to note that CMS is “not proposing any changes for hospitals stays that are expected to be greater than two midnights; that is, if the physician expects the patient to require hospital care that spans at least 2 midnights and admits the patient based on that expectation, the services are generally appropriate for Medicare Part A payment.”

CMS goes on to reiterate that it would “be rare and unusual for a beneficiary to require inpatient hospital admission after having a minor surgical procedure or other treatment in the hospital that is expected to keep him or her in the hospital for only a few hours and not at least overnight” and CMS “will monitor the number of these admissions and plan to prioritize these types of cases for medical review.”

What does this mean for a Hospital?

When I was first introduced to the concept of Clinical Documentation one key concept different in the inpatient setting versus the outpatient setting was that diagnoses still documented as possible, probable or likely at the time of discharge could be coded as if the condition existed.

Here is a breakdown of the possible, probable and likely of this 2-Midnight Proposal.

• It would now be possible that a physician can admit a patient as an inpatient without having a 2-Midnight Expectation, but
• It is also probable without excellent physician documentation in the record a medical reviewer would disagree with the inpatient status, and
• It is likely moving forward all of your 1 day Inpatient Hospital reviews will be prioritized for medical review. The question now is who will be doing that review. The answer leads us to the change being made for the 2016 IPPS fiscal year to the CMS medical review strategy.

CMS Changing the Medical Review Strategy

As mentioned earlier in this article, the MACs have had the responsibility of performing the Probe & Educate audits that have been ongoing since October 1, 2013. This is about to change. CMS has indicated even if the 2-Midnight Proposal is not finalized “that, no later than October 1, 2015, we are changing the medical review strategy plan to have Quality Improvement Organization (QIO) contractors conduct these reviews of short inpatient stays rather than the MACs.”

Key Facts about QIOs

• A statutory duty of the QIO’s is to review “some or all of the professional activities of providers and practitioners in the QIO’s service area.” These reviews are aimed at determining if services being delivered are reasonable and medically necessary, if the quality of services meet professional recognized standards of care, and for inpatient services, if the services could have been appropriately and effectively furnished in a different setting (i.e. outpatient). Further, section 1154(a)(2) of the Act provides for payment determinations to be made based on these QIO reviews.”

• Additional QIO Review Functions:
• Addressing beneficiary complaints,
• Provider-based notice appeals,
• Violations of the Emergency Medical Treatment and Labor Act (EMTALA),
• Peer review; and
• Higher Weighted Diagnosis Related-Group (HWDRG) coding reviews. When this “involves a service provided during a short inpatient stay, QIOs also perform a corresponding medial review to validate adherence to the current 2-midnight policy.”

• The Secretary has broad authority to “direct additional activities by QIOs to improve the effectiveness, efficiency, economy, and quality of services under the Medicare program. These reviews are integral to the determination of whether items and services should be payable under the Medicare program.”
• “QIOs routinely collaborate and interact with State survey agencies, MACs, recovery auditors, and qualified independent contractors (QICs).”

• “To mitigate the perception of a potential conflict of interest between medical review and quality improvement functions of the QIOs, on August 1, 2014, the QIO program separated medical case review from its quality improvement activities in each State under two types of regional contracts. These include Beneficiary and Family Centered Care QIOs (BFCC-QIOs) contractors who perform medical case review, and Quality Innovation Network QIOs (QIN-QIOs) contractors who perform quality improvement activities and provide technical assistance to providers and practitioners. In addition, the restructured QIO program uses a non-QIO contractor to assist CMS in the monitoring and oversight of the BFCC-QIO case review activities.”

New QIO Short Inpatient Medical Review Process to be adopted by October 1, 2015

• “QIOs will review a sample of post-payment claims and make a determination of the medical appropriateness of the admission as an inpatient.”

• The number of admissions for a “minor surgical procedure or other treatment in the hospital that is expected to keep him or her in the hospital for only a few hours (less than 24 hours)” will be monitored and these types of cases will be prioritized for medical review.

• Claim denials will be referred to the MAC for payment adjustments. “Providers’ appeals of denied claims will be addressed under the provisions of section 1869 of the Act.”

• “QIOs will educate hospitals about claims denied under the 2-midnight policy and collaborate with these hospitals in their development of a quality improvement framework to improve organizational processes and/or systems.”

• “Hospitals that are found to exhibit a pattern of practices, including, but not limited to: having high denial rates and consistently failing to adhere to the 2-midnight rule (including having frequent inpatient hospital admissions for stays that do not span one midnight), or failing to improve their performance after QIO educational intervention, will be referred to the recovery auditors for further payment audit.”

• Under current law, Recovery Auditors may resume patient status reviews for dates of admission on or after October 1, 2015. “The number of claims that a recovery auditor will be allowed to review for patient status will be based on the claim volume of the hospital and the denial rate identified by the QIO.”

2-Midnight Rules’ Impact on the Trend of Long Outpatient Hospital Stays

CMS notes that “preliminary data suggest that the 2-midnight rule as it relates to hospital stays spanning at least 2 midnights has been effective in reducing long outpatient hospital stays. Specifically, our data show that the proportion of outpatient long-stay encounters (more than 2 days) involving observation services decreased by 11 percent in FY 2014 compared to FY 2013. The trend in these data is consistent with our adoption of the 2-midnight rule on October 1, 2013.”

Public Comments Requested

CMS noted that is has been argued by members of the hospital community that Medicare should adopt specific criteria for medical review entities to use when reviewing short stay claims. CMS is inviting public comments on whether specific criteria should be adopted for inpatient hospital admissions not expected to span at least 2 midnights and, if so, what should that criteria be.

CMS also noted that “MedPAC recently recommend repealing the 2-midnight rule in its entirety, in Chapter 7 of its June Report to Congress. MedPAC has not recommended a short-stay payment policy. We have requested public comment on three different occasions on issues related to when a patient is appropriately admitted as an inpatient or when the patient is appropriately treated as an outpatient, including potential payment policy options to address this issue” which has not resulted in a consensus on a recommended policy. In a letter earlier this year, the American Hospital Association provided us with its analysis for several payment policy alternatives and their potential impact. The association did not recommend adoption of a particular payment policy in this area. We continue to be open to considering potential payment policy options that have the potential to address this issue.”

For those who wish to comment, CMS is accepting comments on the Two Midnight portion of the proposed rule until August 30, 2015 and will respond to comments in a final rule to be issued on or around November 1, 2015.

Resources

• Link to the CY 2016 OPPS Proposed Rule – Display Copy (see pages 585-606 of the pdf): https://s3.amazonaws.com/public-inspection.federalregister.gov/2015-16577.pdf
• Link to CY 2016 OPPS Proposed Rule in the July 8, 2015 Federal Register (see pages 150-155 of ): http://www.gpo.gov/fdsys/pkg/FR-2015-07-08/pdf/2015-16577.pdf

• Link to the July 1, 2015 CMS Fact Sheet: Two-Midnight Rule: http://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2015-Fact-sheets-items/2015-07-01-2.html

• Link to the July 1, 2015 CMS Fact Sheet: CMS Proposes Hospital Outpatient and Ambulatory Surgical Center Policy and Payment Changes, Including Proposed Changes to the Two-Midnight Rule, and Quality Reporting Changes for 2016: http://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2015-Fact-sheets-items/2015-07-01.html

• Link to CMS Document: Questions and Answers Relating to Patient Status Reviews 3/12/14: http://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/Medical-Review/Downloads/Questions_andAnswersRelatingtoPatientStatusReviewsforPosting_31214.pdf

• June 2015 Medicare Payment Advisory Commission Report to Congress Fact Sheet: http://www.medpac.gov/documents/fact-sheets/fact-sheet-on-medpac%27s-june-2015-report-to-the-congress-medicare-and-the-health-care-delivery-system.pdf?sfvrsn=0

Some of you may remember the television series Columbo that featured an unkempt cigar-smoking detective in a long beige raincoat. Columbo seemed to ramble on aimlessly when questioning suspects and just as they thought he was finally leaving, he would turn back to them with “just one more thing…” This month CMS added or reminded providers of several “just one more thing” items in relation to existing National Coverage Determinations (NCDs).

TAVR Hospital Program Volume Requirements

Effective May 1, 2012, Medicare covers Transcatheter Aortic Valve Replacement (TAVR) procedures under coverage with evidence development (CED) for the treatment of symptomatic aortic stenosis when:

• Furnished according to a Food and Drug Administration (FDA) approved indication; and
• Certain conditions are met including requirements for individual hospitals in which TAVR procedures are performed.

Hospitals must meet the volume requirements specified in the TAVR national coverage determination (NCD 20.32) in order for the TAVR procedure to be eligible for Medicare coverage. These requirements apply to each hospital site individually and hospitals that do not meet these volume requirements are not eligible for waivers or exceptions.

1. To begin a TAVR program, the hospital (without TAVR experience) must have:
2. ≥ 50 total aortic valve replacements (AVRs) in the previous year prior to TAVR, including ≥ 10 high-risk patients; and
3. ≥ 2 physicians with cardiac surgery privileges; and
4. ≥ 1000 catheterizations per year, including ≥ 400 percutaneous coronary interventions (PCIs) per year.
5. To continue a TAVR program, the hospital (with TAVR experience) must maintain:
6. ≥ 20 AVRs per year or ≥ 40 AVRs every 2 years; and
7. ≥ 2 physicians with cardiac surgery privileges; and
8. ≥ 1000 catheterizations per year, including ≥ 400 percutaneous coronary interventions (PCIs) per year.

See MLN Matters Article SE1515 for complete information.

Hepatitis C Virus (HCV) Screening

Effective June 2, 2014, Medicare covers screening for HCV as described below:

1. Once in a lifetime for individuals not at high-risk born from 1945 to 1965.
2. Use HCPCS code G0472
3. Individuals born prior to 1945 and after 1965 that do not have risk factors are not eligible for this screening
4. Once in a lifetime for individuals at high-risk of HCV regardless of birth year. “High risk” is defined as persons with a current or past history of illicit injection drug use; and persons who have a history of receiving a blood transfusion prior to 1992.
5. Use HCPCS code G0472
6. ICD-9 diagnosis code V69.8 (ICD-10 code Z72.89) “other problems related to lifestyle” is required
7. Annually for high-risk individuals who have had continued illicit injection drug use since the prior negative screening test.
8. Use HCPCS code G0472
9. Diagnosis codes required - ICD-9 code V69.8 (ICD-10 code Z72.89) AND
10. ICD-9 diagnosis code 304.91 (unspecified drug dependence continuous) (ICD-10 code F19.20)

Rural Health Clinics (RHCs), Federally Qualified Health Centers (FQHCs) and Method II Critical Access Hospitals (CAHs) are not valid facilities for HCV screening services. See MLN Matters Article MM9200 for more information. CPT code 86803, HCV rapid antibody test, is not appropriate for reporting HCV screening – use HCPCS code G0472.

Coverage of MTWA Using Non-SA Methods

Medicare has covered Microvolt T-wave Alternans (MTWA) diagnostic testing for sudden cardiac death (SCD) from ventricular arrhythmias since March 2006 but only when analyzed by spectral analysis (SA) method.

• Effective for claims with dates of service on and after January 13, 2015, CMS removed the national non-coverage of the MMA method and now allows Medicare Administrative Contractors (MACs) to determine coverage at their discretion of MTWA diagnostic testing for the evaluation of patients at risk for SCD using analysis methods other than SA.
• Providers should report CPT 93025 (MTWA for assessment of ventricular arrhythmias) with the –KX modifier to attest that documentation is on file verifying the MTWA was performed using a method of analysis other than SA for the evaluation of patients at risk for SCD from ventricular arrhythmias and that all other NCD criteria were met. (Claims for MTWA using spectral analysis do not require the KX modifier).
• MLN Matters Article MM9162 contains a list of the diagnosis codes approved by CMS – this list may or may not be complete based on the discretion of the MACs.
• The MACs will not automatically adjust previously denied claims based on the new coverage guidelines but providers may bring these to the MAC’s attention within timely filing.

Q:

During a procedure when only one or two lymph nodes are removed; would the correct “Root Operation” be “Resection” or “Excision”?

 

A:

Lymph nodes are known to form together in clusters, better known as a “chain of nodes”. There are generally numerous amounts of lymph nodes within a chain of nodes. It can be difficult to know for sure whether all nodes were removed or not during any one particular procedure. One example of this would be when a patient is extremely obese.

Assign root operation “Resection”:

• When all nodes in a chain are removed.
• When total removal of lymph nodes is the physician’s intent but difficult to determine if they have actually all been removed.

Assign root operation “Excision”:

• When only a partial amount of lymph nodes are removed from the chain.

Assign root operation “Excision”:

• Sampling of nodes removed – example would be Sentinel Nodes

The operative report should be read carefully to determine the exact intent for the lymph node removal.

References Coding Clinic 3rd Quarter 2014 (ICD-10-CM/PCS) pages 9 and 10

Medicare can be fastidious – picky, particular, specific, precise, even downright finicky in their coding, billing, and documentation requirements. By now, most of us are used to their demands for precision. For example, we are all aware that the units billed must match the dosage, amount, or time specified in the physician’s order. But in the July 2015 OPPS Update, CMS points out an instance related to hyperbaric oxygen treatments (HBO) where this does not hold true.

When a physician orders a 90-minute HBO treatment, he or she expects that the patient will be placed at 100% oxygen for 90 minutes. In billing for HBO treatments, providers are allowed to include not only the time at 100% oxygen but also the time for descent, air breaks, and ascent. In that case, the units billed for HBO will be greater than the units equivalent to the 90 minutes specified in the order.

Effective January 1, 2015, CMS discontinued the old code that had been used to report HBO for years (C1300) and replaced it with new HCPCS code G0277 which has the same description as the old code - Hyperbaric oxygen under pressure, full body chamber, per 30 minute interval. Here are the key points to keep in mind when billing G0277 for HBO services:

• The total number of billable 30-minute intervals would not be based solely on the amount of time noted on the physician order.
• The total number of 30-minute intervals billable under G0277 should be calculated by including:
• Time spent by the patient under 100% oxygen,
• Time for descent,
• Time for air breaks, and
• Time for ascent.
• You must go at least 16 minutes into the next 30-minute interval in order to bill an additional unit. For example:
• 46-75 minutes = 2 units
• 76-105 minutes = 3 units
• 106-135 minutes = 4 units
• HBO is typically prescribed for an average of 90 minutes (at 100% oxygen)
• A common scenario to fulfill an HBO order for 90 minutes of treatment would be 90 minutes of therapeutic HBO, 10 minutes descent, 10 minutes air breaks and 10 minutes ascent for a total of 120 minutes which would equal 4 units of G0277.
• In general, CMS does not expect that a physician order for 90 minutes of HBO therapy would exceed 4 billed units of HCPCS code G0277.

And one more thing Medicare is picky about is their coverage requirements. In addition to getting the correct units on the claim, providers need to be sure the patient qualifies for HBO services in accordance with Medicare’s National Coverage Determination and any Local Coverage Determinations or Articles. The NCD for Hyperbaric Oxygen Therapy (20.29) includes a long list of covered conditions and an even longer list of non-covered indications. HBO is used as an adjunctive treatment and /or after conventional therapy has failed for a number of the covered conditions so review the policy carefully. Be sure that documentation in your medical record provides the details of any conservative or standard treatments in order to support the use of HBO as an adjunctive therapy.

HBO covered conditions include:

1. Acute carbon monoxide intoxication,
2. Decompression illness,
3. Gas embolism,
4. Gas gangrene,
5. Acute traumatic peripheral ischemia. HBO therapy is a valuable adjunctive treatment to be used in combination with accepted standard therapeutic measures when loss of function, limb, or life is threatened.
6. Crush injuries and suturing of severed limbs. As in the previous conditions, HBO therapy would be an adjunctive treatment when loss of function, limb, or life is threatened.
7. Progressive necrotizing infections (necrotizing fasciitis),
8. Acute peripheral arterial insufficiency,
9. Preparation and preservation of compromised skin grafts (not for primary management of wounds),
10. Chronic refractory osteomyelitis, unresponsive to conventional medical and surgical management,
11. Osteoradionecrosis as an adjunct to conventional treatment,
12. Soft tissue radionecrosis as an adjunct to conventional treatment,
13. Cyanide poisoning,
14. Actinomycosis, only as an adjunct to conventional therapy when the disease process is refractory to antibiotics and surgical treatment,
15. Diabetic wounds of the lower extremities in patients who meet the following three criteria:
16. Patient has type I or type II diabetes and has a lower extremity wound that is due to diabetes;
17. Patient has a wound classified as Wagner grade III or higher; and
18. Patient has failed an adequate course of standard wound therapy.

A 2014 review of HBO claims by Medicare’s Supplemental Medical Review Contractor revealed an error rate of 58%. Although over half of the denials were for lack of response to the document request, other medically reviewed claims lacked documentation in the submitted medical records to support the HBO services as medically reasonable and necessary. The documentation did not include:

• Specific timelines and goals for therapy. For example, the documentation simply stated “continue HBO” or “until healed”
• Radiology and pathology reports confirming diagnosis such as osteomyelitis or gas gangrene
• Monitoring for improvement or lack of improvement

In addition, when documentation was provided, descriptions of diabetic wounds did not meet Wagner Criteria for Grade three (III) or four (IV) wounds and therapy was provided beyond the 30 days allowed under Medicare coverage guidelines.

So before you bill for HBO make sure your patients meet the criteria for coverage and that you correctly calculate the number of units to report. If not, picky Medicare may decide to “pick” on you!

Today June 3rd is National Repeat Day. Who knew, certainly not me until doing research for this article but, today June 3rd is National Repeat Day. Although the origins of today June 3rd being National Repeat Day are not really known, it is the perfect opportunity to re-visit patient status (Inpatient or Outpatient) with a focus on communicating the status with the beneficiary. We will take a look at the Important Message from Medicare (IM) letter for the inpatient, the CMS publication “Are You a Hospital Inpatient or Outpatient?” and introduce you to a repeat piece of legislation that could impact when and how you let the Medicare beneficiary know that they are receiving services in your hospital as an Outpatient.

The Important Message from Medicare

Currently, hospitals are required to deliver the Important Message from Medicare (IM), CMS-R-193 to all Medicare beneficiaries (Original Medicare and Medicare Advantage plan enrollees) who are hospital inpatients. This letter is to be provided within two days of admission and a second copy within two days of discharge. This letter informs the beneficiary of their rights as a hospital inpatient as well as their Medicare discharge rights.

Rights as a Hospital Inpatient:

• The Right to receive Medicare covered services that include medically necessary hospital services and services that may be needed after discharge.
• The Right to know about these services, who will pay for them, and where you can get them.
• The Right to be involved in decisions about the hospital stay, and who will pay for it.
• The Right to report any concerns about the quality of care received to the Quality Improvement Organization (QIO).

Medicare Discharge Rights:

• The Right to appeal if you believe that you are being discharged too soon.
• The right to talk with hospital staff, doctor and managed care plan (if you belong to one) about your concerns.
• The right to appeal through a review of your case by a Quality Improvement Organization (QIO).

Are You a Hospital Inpatient or Outpatient?

The CMS publication 11435: “Are You a Hospital Inpatient or Outpatient?” provides information regarding the difference in patient status (inpatient or outpatient), what the difference in cost to the beneficiary will be, and common hospital situations with a description of how Medicare will pay.

The Outpatient Receiving Observation Services?

How does a beneficiary know when they are receiving care in the hospital as an Outpatient? Here at MMP we have clients that are already notifying the beneficiary when they are an Outpatient. However, if your hospital is not notifying Medicare beneficiaries of their Outpatient status, there is legislation in the U.S. House of Representatives and the U.S. Senate that could require you to develop and implement a process to do just that.

H.R. 876: Notice of Observation Treatment and Implication for Care Eligibility Act (NOTICE Act)

Representative Lloyd Doggett (D-TX) first introduced this bill as H.R. 5232 on July 29, 2014 during the 113th Congress but it never made it to a Committee. Representative Doggett re-introduced a “repeat” version of this Bill (H.R. 876) on February 11, 2015. Unlike H.R. 5232, this bill has already made it through the House with a 395 Yea to Zero Nay vote on March 16, 2015. The two remaining steps for this Bill to become law are for it to be passed by the Senate and signed by the President (see Figure 1).

Figure 1: H.R. 876: NOTICE Act History

Bill introduced
February 11, 2015

Reported by committee
February 26, 2015 

Passed House 395-0
Marched 16, 2015

Next Step:
Passing Senate

Final step:
Enacting by President

The Congressional Research Services, which is a nonpartisan division of the Library of Congress has summarized this Act  and writes that this ACT “amends title XVIII (Medicare) of the Social Security Act to require a hospital or critical access hospital with an agreement with the Secretary of Health and Human Services to give each individual who receives observation services as an outpatient for more than 24 hours an adequate oral and written notification within 36 hours after beginning to receive them which:

explains the individual's status as an outpatient and not as an inpatient and the reasons why; explains the implications of that status on services furnished (including those furnished as an inpatient), in particular the implications for cost-sharing requirements and subsequent coverage eligibility for services furnished by a skilled nursing facility; includes appropriate additional information; is written and formatted using plain language and made available in appropriate languages; and is signed by the individual or a person acting on the individual's behalf (representative) to acknowledge receipt of the notification, or if the individual or representative refuses to sign, the written notification is signed by the hospital staff who presented it.”

S.1349: Notice of Observation Treatment and Implication for Care Eligibility Act (NOTICE Act)

Senator Benjamin Cardin (D-MD) introduced S.1349 on May 14, 2015. This Act is also known as the NOTICE Act and is also a Bill “to amend title XVIII of the Social Security Act to require hospitals to provide certain notifications to individuals classified by such hospitals under observation status rather than admitted as inpatients of such hospitals.” Unlike H.R. 876, this bill has yet to make to a Committee (see Figure 2).

Figure 2: S.1349 NOTICE ACT History

Bill introduced
February 11, 2015

Next Step:
Reporting by Commitee 

Next Step:
Passing Senate

Next Step:
Passing House

Final step:
Enacting by President

What You Need to Know if the NOTICE Act becomes Law

• IPPS Acute and Critical Access Hospitals will be required to furnish a Notice.
• Hospitals will have 12 months after the Act becomes law to implement this process.
• A notice will need to be provided to the beneficiary no later than 36 hours after he or she begins to receive observation services (or sooner, upon release).
• The Notice will be written and formatted using plain language and made available in appropriate languages as determined by the Secretary.

For those interested in additional information about the Important Message from Medicare, the CMS publication “Are You a Hospital Inpatient or Outpatient?” or following these Bills links have been provided below. In the meantime, we will continue to follow both pieces of legislation and keep you posted on any updates.

In honor of today June 3rd being National Repeat Day I leave you with this repeatable quote.

“Decide to be a success; decide to be great, decide to be above average, decide to do the very best of you. Do you know who a P.O.O.R. person is? P.O.O.R. people are those who are “Passing On Opportunities Repeatedly."-Israelmore Ayivor, Dream Big!: See Your Bigger Picture!

Resources:

• CMS Hospital Discharge Appeal Notices web page: http://www.cms.gov/Medicare/Medicare-General-Information/BNI/HospitalDischargeAppealNotices.html
• Are You a Hospital Inpatient or Outpatient? (May 2014 version): https://www.medicare.gov/Pubs/pdf/11435.pdf
• Follow H.R. 876: NOTICE Act on govtrack.us at: https://www.govtrack.us/congress/bills/114/hr876
• Follow S. 1349: NOTICE Act on govtrack.us at: https://www.govtrack.us/congress/bills/114/s1349