Knowledge Base - Full Library

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

People learn in different ways – some of us are visual learners, some auditory learners, some “hands-on” learners – overall various sources report between three to seven styles of learning. One hard-knocks way to learn is by failure. Medicare claim denials after medical review are an example of this form of learning. It appears from the numbers below that hospitals in some states are learning about the documentation requirements for spinal fusion services. Maybe your hospital can be proactive and learn from others’ mistakes instead of from your own.

This month two Medicare Administrative Contractors (MACs), Palmetto JM and Noridian JF, released findings from targeted and probe reviews of DRG 460, Spinal Fusion except Cervical without MCC. Of the six state areas involved in these reviews, the reviews in three state areas – North Carolina, Virginia/West Virginia, and Oregon – were discontinued with denial rates of 13.8%, 10.7% and 9% respectively. In Palmetto’s JM Jurisdiction (North Carolina, South Carolina, Virginia and West Virginia) this represents a substantial improvement from an initial probe denial rate of 65%.

The three remaining states – South Carolina, Montana, and Washington - will remain under a service-specific targeted medical review for DRG 460. The major reason for denials in all states is that the documentation does not support that the services were reasonable and necessary. As you can see from the examples below, this is more commonly due to insufficient documentation of supporting elements rather than procedures performed without a covered diagnosis.

Some of the specific examples of how documentation failed to support medical necessity include:

• There was no documentation of pain impacting the functional ability of the beneficiary, despite conservative treatment.
• There was no documentation of conservative measures/treatments failed.
• There was no documentation of neurological impairment-spinal stenosis.
• There were no X-ray, CT or MRI results submitted that support advanced degenerative changes, mechanical instability, and deformity of the lumbar spine or neural compression that would require this type of procedure.
• No documented operative report submitted / no medical necessity for procedure.
• Procedure documented as "investigational."

Since insufficient documentation is the culprit for most denials, hospital staff must work as a team with the operating physicians to ensure the medical record contains the necessary elements to support coverage. Some possible actions to ensure complete documentation are:

• Require a copy of the physician’s office note H&P that explains past treatments and patient response to be included in the hospital’s medical record;
• Educate physicians who perform these procedures about the documentation requirements;
• Make sure UR and CDI staff work together to review these types of records for the required documentation.

The probe and targeted review findings of the various MACs are great instructional tools for learning the details of coverage and documentation requirements. So whatever your style of learning, it is easier on your hospital’s finances to learn from instruction than from experience.

With the New Year looming, it is hard to believe that is has almost been a year since the U.S. Department of Health and Human Services (HHS) announced for the first time in the history of the Medicare program explicit goals for alternative payment models and value-based payments.

Alternative Payment Model Goals

By the end of 2016 have 30% of Medicare payments in alternative payment models.

By the end of 2018 have 50% of Medicare payments in alternative payment models.

Value Based Payment Goals

By 2016 have 85% of Medicare fee-for-service payments tied to quality of value.

By 2018 have 90% of Medicare fee-for-service payments tied to quality of value.

On November 25th, Patrick Conway, M.D., MSc, Acting Deputy Administrator and Chief Medical Officer, CMS announced in The CMS Blog an updated 2016 HHS National Quality Strategy (NQS) indicating that “the main purposes of the 2016 CMS Quality Strategy update are to achieve the broad aims of the NQS and to apply the Administration’s strategy for shifting Medicare payments from volume to value.”

National Quality Strategy: By the Numbers

Three Aims

1. Better Care
2. Healthier People, Healthier Communities
3. Smarter Spending

Six Priorities

1. Make Care Safer by Reducing Harm Caused in the Delivery System
2. Strengthen Person and Family Engagement as Partners in their Care
3. Promote Effective Communication and Coordination of Care
4. Promote Effective Prevention and Treatment of Chronic Disease
5. Work with Communities to Promote Best Practices of Health Living
6. Make Care Affordable

Four Foundational Principles

1. Eliminating racial and ethnic disparities,
2. Strengthening infrastructure and data systems across all settings of care,
3. Enabling local innovations, and
4. Fostering learning organizations.

The Centers for Medicare and Medicaid Services (CMS) has made the six priorities goals in the CMS Quality Strategy. They identified the Four Foundational Principles to help guide their action towards meeting these goals and believe that incorporating these “will drive change to improve quality and cost of care for all. “

CMS Quality Strategy Goals: A Call to Action

To advance the three aims, the CMS Quality Strategy Goals reflect the six priorities for the NQS. There are innumerable activities being implemented to achieve this vision. The remainder of this article will provide you a glimpse of what is being done to achieve each of these Goals.

Goal 1: Making Care Safer by Reducing Harm Caused in the Delivery System

Hospital-Acquired Conditions (HACs)

On December 3rd the Agency for Healthcare Research and Quality (AHRQ) announced that data from the recent report Saving Lives and Saving Money: Hospital-Acquired Conditions Update Interim Data from National Efforts to Make Care Safer, 2010-2014 shows between 2010 and 2014:

• An estimated 87,000 fewer patients died from a HAC,
• The overall incidence of HACs has been reduced by 2.1 million for an estimated savings of $19.8 billion; and
• In 2014 alone, 37,000 fewer patients died than would have died if the rate of adverse events had remained at the 2010 level. Most of the deaths averted resulted from a reduction in rates of pressure ulcers and adverse drug events (ADEs).

HAC Reduction Program

The Affordable Care Act (ACA) established the HAC Reduction Program as an incentive for hospitals to reduce HACs. CMS released the FY 2016 results for the Program on December 10th and they estimate that the total savings in FY 2016 will be $364 million.

Nationwide 758 out of 3,308 eligible hospitals are in the worst performing quartile and will have a one percent payment reduction applied to all Medicare discharges occurring between October 1, 2015 and September 30, 2016. The number of hospitals being penalized is up from the 724 hospitals subject to a payment reduction in FY 2015.

In the FY 2016 HAC Reduction Program, hospitals with a Total HAC Score greater than 6.7500 are subject to a payment reduction. You can find your hospital Total HAC Score at https://www.medicare.gov/hospitalcompare/HAC-reduction-program.html.

Goal 2: Strengthen Person and Family Engagement as Partners in their Care

Everyone with Diabetes Counts (EDC) Program

The Quality Innovation Network Quality Improvement Organizations (QIN-QIOs) are administering the EDC Program. This program offers evidence-based diabetes self-management training and is designed to improve health outcomes and quality of life among disparate and underserved Medicare populations.

Goal 3: Promote Effective Communication and Coordination of Care

CMS cites strengthening the hospital Conditions of Participation (CoP) for Discharge Planning and Bundled Payment Initiatives as two examples to further this goal.

Discharge Planning CoP

On October 29, 2015 CMS announced proposed revisions to the discharge planning requirements that hospitals, including long-term care hospitals (LTCHs), Inpatient Rehabilitation Facilities (IRFs), Critical Access Hospitals (CAHs), and Home Health (HH) agencies must meet in order to participate in the Medicare and Medicaid program. They are currently soliciting comments from the healthcare community. You can read more about this in a related article at http://www.mmplusinc.com/news-articles/item/october-29-2015-cms-releases-a-discharge-planning-proposed-rule.

Bundled Payment Initiatives

CMS recently finalized the Comprehensive Care for Joint Replacement (CJR) Model which is set to begin on April 1, 2016 and run through December 31, 2020. CMS expects this model to result in $343 million in savings to Medicare over the 5 performance years. Notable about this model is that for the first time, selected hospitals are required to participate. You can read more about this in a related article at http://www.mmplusinc.com/news-articles/item/comprehensive-care-for-joint-replacement-model-finalized.

Goal 4: Promote Effective Prevention and Treatment of Chronic Disease

CMS indicates that more than 133 million Americans report at least one chronic condition, while many have multiple chronic conditions (MCC) affecting them at the same time. For example a person with diabetes and heart disease has multiple chronic conditions.

Million Hearts® Initiative

CMS cites being a lead partner in the Million Hearts® Initiative as one way they are promoting effective prevention and treatment of chronic disease. This initiative seeks to reduce the incidence of heart attacks and strokes by 1 million by 2017. The Million Hearts® website provides educational material for you and your patients, access to data and research, proven techniques to prevent and treat heart attack and stroke and education regarding risks, costs and consequences and ways to prevent heart disease and strokes.

Goal 5: Work with Communities to Promote Best Practices of Health Living

CMS is committed to partnering with key stakeholders to link Medicare, Medicaid, and Children’s Health Insurance Program (CHIP) beneficiaries, and the providers that serve them, with communities and resources that support good health. One specific federal effort cited by CMS is the WIC Farmers’ Market Nutrition Program (FMNP)

The FMNP is associated with the Special Supplemental Nutrition Program for Women, Infants and Children (WIC) and was established by Congress in 1992 “to provide fresh, unprepared, locally grown fruits and vegetables to WIC participants, and to expand the awareness, use of, and sales at farmers’ markets.”

Goal 6: Make Care Affordable

Hospital Value Based Purchasing Program

This program adjusts hospital payments for inpatient services based on hospitals’ performance on measures that fall into a number of domains. For FY 2016 this program is funded by a 1.75% reduction from participating hospitals’ base operating diagnosis-related group (DRG) payments. The resulting funds are redistributed to hospitals based on their Total Performance Score (TPS).

CMS added the following measures for Fiscal Year (FY) 2016:

• IMM-2, Influenza Immunization (Clinical Process of Care domain)
• CAUTI, Catheter-Associated Urinary Tract Infection (Outcome domain)
• SSI, Surgical Site Infection Colon Surgery & Abdominal Hysterectomy (Outcome domain)

For those interested in learning more, CMS held a National Provider call on May 12, 2015 to provide an overview of all Hospital Inpatient Quality Reporting and Value-Based Purchasing Programs. Slides, an audio recording and written transcript are available on the CMS website.

One last valuable resource to find out “where we are now” is the CMS Innovation Center. The Innovation Center has a growing portfolio testing various payment and service delivery models that aim to achieve better care for patients, better health for our communities, and lower costs through improvement for our health care system. I encourage you to visit their website to find out where and what Innovation is happening in your state.