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Most of us know the dangers of assumptions. We have all heard the play on letter divisions within the word “ass/u/me.” Medicare and Medicare providers are not immune to the negative consequences of assumptions. Such was the case with the physician supervision rules for hospital outpatient services.

In the 2009 Outpatient Prospective Payment System (OPPS) Proposed and Final Rules, Medicare shocked the provider community with their “clarification” of the physician supervision requirements. Prior to this “clarification,” hospitals had not worried much about meeting the physician supervision requirements on the hospital campus because CMS stated in the original OPPS rule that “we assume the physician supervision requirement is met on hospital premises because staff physicians would always be nearby within the hospital.” But according to Medicare, providers misinterpreted their meaning of the word “assume” and Medicare always expected hospital outpatient therapeutic services to be provided under the direct supervision of physicians in the hospital and in all provider-based departments (PBDs) of the hospital, specifically, both on-campus and off-campus departments of the hospital.

Thus began the on-going discussions, clarifications, adjustments, and exceptions to physician supervision requirements for hospital services. So where are we today with supervision requirements for hospital outpatient services?

Therapeutic Services

Generally, “CMS requires direct supervision by an appropriate physician or non-physician practitioner in the provision of all therapeutic services to hospital outpatients, including CAH outpatients.”

Facts about Direct Supervision:

• Applies to therapeutic services furnished in the hospital or CAH or in an on-campus or off-campus outpatient department of the hospital or CAH.
• Non-physician practitioners (NPPs) may furnish the required supervision of hospital outpatient therapeutic services that they are allowed to personally furnish. NPPs include licensed clinical social workers, physician assistants, nurse practitioners, clinical nurse specialists, and certified nurse-midwives.
• The physician or NPP must be immediately available to furnish assistance and direction throughout the performance of the procedure. Immediately available means the immediate physical presence of the supervisory physician or NPP.
• The physician is not required to be present in the room where the procedure is performed or within any other physical boundary as long as he or she is immediately available.
• Lack of immediate availability would be situations where the supervisory physician is performing another procedure or service that he or she could not interrupt.
• Though not specifically defined in terms of time or distance, the supervisory physician or NPP may not be so physically distant on-campus from the location where hospital/CAH outpatient services are being furnished that he or she could not intervene right away.
• An allowed practitioner can furnish direct supervision from any location in or near an off-campus hospital or CAH building that houses multiple hospital provider-based departments where the services are being furnished as long as the supervisory practitioner is immediately available.
• The supervisory physician or NPP must have, within his or her State scope of practice and hospital-granted privileges, the knowledge, skills, ability, and privileges to perform the service or procedure.
• CMS expects the supervisory practitioner to be knowledgeable about the therapeutic service and clinically able to furnish the service.
• The supervisory responsibility is more than the capacity to respond to an emergency, and includes the ability to take over performance of a procedure or provide additional orders.
• The supervisory practitioner must be clinically able to supervise the service or procedure.
  This means an ER physician does not meet the supervision requirements for a specialized service such as Radiation Oncology.
• The moratorium on enforcement of direct supervision requirements for CAHs and rural hospitals has expired. For 2015 and beyond, CMS requires a minimum of direct supervision for all outpatient therapeutic services furnished in all hospitals, including rural hospitals and CAHs, unless different supervision requirements are assigned as explained below.

CMS may assign certain hospital outpatient therapeutic services either general supervision, personal supervision or extended duration services supervision.

• General supervision means the procedure or service is furnished under the physician's overall direction and control, but the physician's presence is not required during the performance of the procedure.
• Personal supervision requires the physician must be in attendance in the room during the performance of the service or procedure.
• For nonsurgical extended duration therapeutic services (“extended duration services”), CMS requires a minimum of direct supervision during the initiation of the service which may be followed by general supervision for the remainder of the service at the discretion of the supervisory practitioner.
• “Initiation” means the beginning portion of the extended duration service, ending when the supervisory practitioner believes the patient is stable enough for the remainder of the service to be safely administered under general supervision.
• The point of transition to general supervision must be documented in the patient’s progress notes or medical record.
• The list of services that may be furnished under general supervision or that are defined as non-surgical extended duration therapeutic services is available on the Hospital OPPS Webpage.

Diagnostic Services

Payment is allowed under the hospital outpatient prospective payment system for diagnostic services only when those services are furnished under the appropriate level of supervision.

• Supervision levels for diagnostic tests are listed in the quarterly updated Medicare Physician Fee Schedule (PFS) Relative Value File. For guidance regarding the numeric levels assigned to each CPT or HCPCS code in the PFS Relative Value File, see the Medicare Benefit Policy Manual, Chapter15, Section 80, “Requirements for Diagnostic X-ray, Diagnostic Laboratory, and Other Diagnostic Tests.”
• The definitions of “general” and “personal” supervision listed above apply.
• “Direct supervision” means that the physician must be immediately available to furnish assistance and direction throughout the performance of the procedure following the same rules for direct supervision as discussed above. This applies to diagnostic services provided:
• Directly or under arrangement,
• In the hospital or in an on-campus or off-campus outpatient department of the hospital.
• Non-physician practitioners cannot provide the required physician supervision when other hospital staff are performing diagnostic tests.

For more information on supervision requirements, see the Medicare Benefit Policy Manual, Chapter 6, sections 20.4.4, 20.5.2, and 20.7.

It is unknown if or how Medicare will enforce these supervision requirements, but we definitely don’t want to “assume” they will not.

Q:

What is the KX modifier and when should it be used?

A:

The KX modifier is defined as “Requirements specified in the medical policy have been met.” It is a multipurpose informational modifier.

CMS has further defined some specific circumstances when providers should report the KX modifier.

• To report an automatic exception to therapy caps. Adding the KX modifier to the line items that exceed the therapy caps indicates that the clinician attests that services at and above the therapy caps are medically necessary and justification is documented in the medical record.
• When billing for permanent cardiac pacemakers under the latest NCD revision effective August 13, 2013. Appending the KX modifier is an attestation by the provider that documentation is on file verifying the patient has non-reversible symptomatic bradycardia.
• To bill additional optional sessions of cardiac rehab or pulmonary rehab. Medicare allows 36 sessions, with the option for an additional 36 sessions for each of these services. Sessions beyond the initial 36 sessions, up to 72 sessions, require the KX modifier.
• To report FDG PET scans for subsequent treatment strategy beyond the 3rd scan. Each different cancer diagnosis is allowed one (1) initial treatment strategy (-PI modifier) FDG PET Scan and three (3) subsequent treatment strategy (-PS modifier) FDG PET Scans without the -KX modifier. The fourth FDG PET Scan and beyond for subsequent treatment strategy for the same cancer diagnosis will always require the -KX modifier.
• On MRIs for patients with implanted pacemakers that are FDA-approved for use in an MRI environment.Inclusion of the KX modifier on the claim line(s) means that the provider attests that documentation is on file verifying that FDA-approved labeling requirements are met.

In 1735, Benjamin Franklin noted that “an ounce of prevention is worth a pound of cure.” Although Franklin was actually addressing fire safety, this axiom is also true in reference to health. The Centers for Disease Control (CDC) in an article about the National Prevention Strategy states that “Increasing the focus on prevention in our communities will help improve America's health, quality of life and prosperity.” And in the long run, prevention reduces health care costs for patients, providers, and insurers. So it is not surprising that CMS is continuing to expand Medicare preventive and screening services.

On April 13, 2015, CMS released a Final Decision Memorandum expanding the coverage of HIV Screening for Medicare beneficiaries. Medicare has offered coverage of HIV screening since December 2008, but only covered the screening for individuals with certain high-risk factors or during pregnancy. This latest decision memo expands coverage to an annual screening for all Medicare beneficiaries between the ages of 15-65.

The complete list of covered conditions for HIV screening includes:

• A maximum of one, annual voluntary screening for all adolescents and adults between the age of 15 and 65, without regard to perceived risk;
• A maximum of one, annual voluntary screening for adolescents younger than 15 and adults older than 65 who are at increased risk for HIV infection. Increased risk for HIV infection is defined as follows:
• Men who have sex with men
• Men and women having unprotected vaginal or anal intercourse
• Past or present injection drug users
• Men and women who exchange sex for money or drugs, or have sex partners who do
• Individuals whose past or present sex partners were HIV-infected, bisexual or injection drug users
• Persons who have acquired or request testing for other sexually transmitted infectious diseases
• Persons with a history of blood transfusions between 1978 and 1985
• Persons who request an HIV test despite reporting no individual risk factors
• Persons with new sexual partners
• Persons who based on individualized physician interview and examination are deemed to be at increased risk for HIV infection.
• A maximum of three, voluntary HIV screenings of pregnant Medicare beneficiaries: (1) when the diagnosis of pregnancy is known, (2) during the third trimester, and (3) at labor, if ordered by the woman’s clinician.

In addition to the list of covered conditions, testing for HIV screening must also meet the following requirements.

• An FDA approved laboratory test or point of care test
• Testing in accordance with FDA approved labeling and compliant with CLIA regulations
• Ordered by the patient’s physician or practitioner within the context of a healthcare setting
• Performed by an eligible Medicare provider or supplier for these services

Remember that Medicare Administrative Contractors’ (MACs) claims processing systems may not yet be ready to accept claims under the new coverage conditions. Within a few months, Medicare will publish a transmittal updating the National Coverage Determination Manual and claims processing instructions if needed, with an effective date by which MACs should be prepared to accept claims under the new guidelines.

In related news, Medicare released a proposed decision memorandum on April 16, 2015 that proposes the coverage of Human Papillomavirus (HPV) testing for screening for cervical cancer. The memo recommends HPV testing once every five years for asymptomatic beneficiaries aged 30 to 65 in conjunction with the Pap smear test. CMS is currently accepting comments on this proposal and will respond to public comments in a final decision memorandum.

Moving healthcare towards a focus on prevention will hopefully improve the physical and financial health of America. Unfortunately today, the US spends more per capita on healthcare than many other nations, but does not have better health outcomes to show for it. Maybe this “ounce of prevention” will bring forth that “pound of cure.”

Another article in this week’s Wednesday@One newsletter reviews the different definitions of the word “confusion.” There are also numerous definitions for the verb “observe” but let’s concentrate on two of these definitions. One definition of “observe” is “to watch, view, or note for a scientific, official, or other specialpurpose.” This definition fits the services provided to a patient in a hospital stay for “observation services” – the patient is being watched for a special purpose. But observe also means to “obey or comply” as providers of services to Medicare patients must “observe” Medicare rules and regulations. In fact, these providers must “observe the rules of observation services.”

Since there was not a lot of MAC Medical Review activity this month, let’s look beyond the MAC reviews to a finding reported in the OIG compliance review of Northwestern Memorial Hospital released in March 2015. The OIG reported that the hospital incorrectly billed Medicare for observation hours resulting in incorrect outlier payments. In this review, the overpayment amount for observation services was less than $4,000 but findings from this review were extrapolated expanding overpayments of around $272,000 to a refund amount of over $6M. Other OIG compliance reviews over the years have identified cases of over $20,000 in outlier overpayments related to incorrect reporting of observation hours.

The most common reason for over-reporting observation hours is the inclusion of observation time for services that were part of another Part B service including postoperative monitoring or standard recovery care. According to the Medicare Claims Processing Manual, Chapter 4, Section 290.2.2, observation services should not be billed:

• For services that are part of another Part B service, such as postoperative monitoring during a standard recovery period (e.g., 4-6 hours);
• For routine preparation services furnished prior to diagnostic testing and recovery afterwards; or
• Concurrently with diagnostic or therapeutic services for which active monitoring is a part of the procedure.

Medicare allows hospitals the discretion of determining the most appropriate way to account for concurrent time. Hospitals may deduct the actual time spent in procedures with active monitoring or use an average length of time for the interrupting service.

Another problem identified by this and previous OIG reviews was including inappropriate time before or after observation services.

• Observation time begins at the clock time documented in the patient’s medical record, which coincides with the time that observation care is initiated in accordance with a physician’s order. You cannot bill for observation hours prior to the time of the physician’s order for observation. Keep this in mind especially when using Condition Code 44 to convert an inappropriate inpatient admission to an outpatient stay. The entire stay, from the time of the inpatient admission order, becomes outpatient status, but if the order is to “change to outpatient with observation services”, observation only begins at the time of that order.
• Observation time ends when all medically necessary services related to observation care are completed. This could be before, at the time of, or after the time of the discharge order. The key here is when medically necessary services are complete. Consider if the patient is still receiving medical care related to the observation services. Once medical care/assessment is complete, observation services are complete and the billing of observation hours should stop at that point.

There were also issues with physician’s orders – either missing orders or untimely orders. There must be a signed order for observation services – section 290.1 of Chapter 4 of the Medicare Claims Processing manual states, “Observation services are covered only when provided by the order of a physician or another individual authorized by State licensure law and hospital staff bylaws to admit patients to the hospital or to order outpatient services.” In the OIG review that noted untimely orders, one order was signed after the observation care was no longer necessary and the other order was signed when the observation services were nearly complete. Observation orders must be medically necessary at the time they are written, which leads nicely into the final issue.

The final observation issue noted in the OIG review - the patient’s condition did not warrant observation services. Providers must consider the medical necessity of observation services just like they consider the medical necessity of all procedures and services. This applies to an initial decision for observation services and the continuation of observation services.

“Observation care is a well-defined set of specific, clinically appropriate services, which include ongoing short term treatment, assessment, and reassessment, that are furnished while a decision is being made regarding whether patients will require further treatment as hospital inpatients or if they are able to be discharged from the hospital. Observation services are commonly ordered for patients who present to the emergency department and who then require a significant period of treatment or monitoring in order to make a decision concerning their admission or discharge. … In the majority of cases, the decision whether to discharge a patient from the hospital following resolution of the reason for the observation care or to admit the patient as an inpatient can be made in less than 48 hours, usually in less than 24 hours.”

Observation is short term treatment or assessment while the physician is deciding whether the patient needs to be admitted as an inpatient or is medically stable enough to send home. Once this is decided and short term treatments and assessments are complete, observation services are no longer medically necessary.

To be compliant with the reporting of observation services, providers must consider - is observation reasonable and necessary, is there a physician’s order, and is observation time being counted correctly? As with all things Medicare, there are a lot of details, in this case for observing the rules of observation.

MAC Medical Review Activity for the month included:

Merriam-Webster defines confusion as “a situation in which people are uncertain about what to do or are unable to understand something clearly,” or “the feeling that you have when you do not understand what is happening, what is expected, etc.” and finally as “a state or situation in which many things are happening in a way that is not controlled or orderly.”

All three definitions are apt depictions of how the healthcare industry felt in response to the 2014 Inpatient Prospective Payment System (IPPS) Final Rule and more specifically how to implement the then new 2-Midnight Rule and Physician Certification Requirements. Adding to the confusion, the Physician Certification Requirements changed again on January 1, 2015 with the implementation of the 2015 Outpatient Prospective Payment System (OPPS) Final Rule and more recently, the Centers for Medicare and Medicaid Services (CMS) have extended the Inpatient Probe and Educate process through April 30, 2015. We have recently come across certain Myths about the regulations and wanted to equip our readers with the Facts.

Myth: As of April 1st, 2015, the Centers for Medicare and Medicaid Services (CMS) have once again delayed implementation of the 2-Midnight Rule.

Fact: On April 1st the CMS indicated that “given potential Congressional action on H.R. 2, the Medicare Access and CHIP Reauthorization Act of 2015, CMS will continue the Inpatient Probe and Educate process until April 30, 2015 and will continue to prohibit Recovery Auditor inpatient hospital patient status reviews for dates of admission occurring between October 1, 2013 and April 30, 2015.”

However, hospitals should have implemented the 2-Midnight Rule at the start of the CMS 2014 Fiscal Year on October 1, 2013. This rule was intended as guidance for Physicians in identifying patients appropriate for inpatient admission. CMS has NEVER delayed the implementation date for hospital compliance with the 2-Midnight Rule. The Inpatient Probe and Educate Process was put in place to delay Contractor inpatient hospital status reviews thereby allowing hospitals time to further understand and implement this policy.

Note: Congress has passed legislation and, at the time of this posting, President Obama has indicated that he will sign it into law. This means that the Probe and Educate process will be extended to the end of the fiscal year on September 30, 2015.

Myth: As a result of the 2-Midnight Rule, CMS will not reimburse hospitals for inpatient hospitalizations that do not span 2 Midnights.

Fact: In Sub-regulatory guidance following implementation of the 2014 IPPS Final Rule, the CMS indicated that there may be “unforeseen circumstances” or possible “exceptions” to when a beneficiary is appropriately placed in an inpatient status but does not remain in the hospital 2 Midnights. To date the CMS has identified four Unforeseen Circumstances and one possible Exception.

Unforeseen Circumstances

• Beneficiary death or transfer,
• A beneficiary rapidly improving and the reasonable 2-Midnight expectation was clearly documented in the record,
• A beneficiary leaves Against Medical Advice (AMA), or
• In the event that a beneficiary declines further workup and/or treatment and elects Hospice Care.

Exception

• “CMS believes a physician will generally expect beneficiaries with newly initiated mechanical ventilation to require 2 or more midnights of hospital care, if the physician expects that the beneficiary will only require 1 midnight of hospital care, inpatient admission and Part A payment is nonetheless generally appropriate. NOTE: This exception is not intended to apply to anticipated intubations related to minor surgical procedures or other treatment.”

Myth: CMS has suspended review of all inpatient claims submitted by hospitals to the Medicare program between October 1, 2013 and April 30 of this year.

Fact: It is true that Recovery Auditors are prohibited from patient status reviews on inpatient claims with dates of service from October 1, 2013 now through April 30, 2015.

However, during this time, Medicare Administrative Contractors (MACs) are facilitating the Probe & Educate program in which they are performing a limited number of pre-payment probe reviews of 1 day or less inpatient hospitalizations with dates of services on or after October 1, 2013. MACs were instructed to assess for compliance with the admission order requirements, physician certification requirements and 2-Midnight Benchmark Guidance. While this is a Probe and Educate program, hospitals do not receive payment for denied claims.

CMS outlines reviews not impacted by the 2014 IPPS Final Rule on the Inpatient Hospital Reviews Webpage. Specifically, “MACs, Recovery Auditors and the Supplement Medical Review Contractor will continue other types of inpatient hospital reviews, including, but not limited to:

• Coding reviews,
• Reviews for the medical necessity of a surgical procedure provided to a hospitalized beneficiary, and
• Inpatient hospital patient status reviews for dates of admission prior to October 1, 2013 (based on the applicable policy at the time of admission).”

Myth: All Medicare inpatient admissions need an Initial Physician Certification completed prior to the patient being discharged

Fact: This was true for Medicare admissions with dates of service on or after October 1, 2013 through December 31, 2014. However, this changed with the 2015 OPPS Final Rule. As of January 1, 2015, CMS finalized their “policy as proposed in the CY 2015 OPPS/ASC proposed rule, which limits the requirement for physician certification to long-stay (20 days or longer) and outlier cases.” Furthermore, they finalized their “proposed revision of paragraph (b) of § 424.13, without modification, to specify that certifications for long-stay cases must be furnished no later than 20 days into the hospital stay.”

Myth: Any practitioner treating a Medicare Inpatient can write a valid Inpatient Status Order.

Fact: Per the January 30, 2014 CMS Sub-regulatory guidance Hospital Inpatient Admission Order and Certification, the order must be provided by a Physician or other practitioner that meets the following criteria

1. Is licensed by the state to admit inpatients to hospitals,
2. Has been granted privileges by the hospital to admit inpatients to that specific facility, and
3. Is knowledgeable about the patient’s hospital course, medical plan of care, and current condition at the time of the admission.

Resources:

CMS Inpatient Hospital Reviews Web page: http://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/Medical-Review/InpatientHospitalReviews.html

January 30, 2014 CMS Sub-regulatory Guidance: Hospital Inpatient Admission Order and Certification

http://cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/Downloads/IP-Certification-and-Order-01-30-14.pdf

I love my cats – sometimes… If there was ever an animal with a mind of its own, it is a cat. One minute they are kind and loving and the next they don’t want to be held or even touched (and watch out –some even bite). It is also impossible to direct their activity, thus the expression about herding cats. Sometimes dealing with Medicare and all their coverage policies is as hard as herding cats.

Remember LMRP’s? I had just started in Corporate Compliance when hospital representatives from around our state met to discuss the big concern – our Medicare Fiscal Intermediary (FI) would deny CT scans and other tests if they did not contain a diagnosis that supported “medical necessity” based on the new Local Medical Review Policies (LMRPs). There have been a lot of transitions since that time – no more FIs – they are now known as Medicare Administrative Contractors (MACs) and LMRPs are now LCDs (Local Coverage Determinations). There has also been a shift in the focus of “medical necessity.” There are more LCDs than ever, but a recent focus on procedures instead of simply diagnostic tests. For example, this month Cahaba finalized the draft policy for lumbar spinal fusion.

When medical necessity was simply a matter of checking for an appropriate diagnosis, the process was simpler. Providers could install upfront edits to check against the approved diagnoses lists. Today, as policies contain more coverage indications and limitations, meeting the coverage guidelines is a bigger challenge.

So what should hospitals do to ensure they are meeting Medicare’s coverage guidelines? Here are some suggestions to assist you in meeting this challenge.

• Be familiar with the different coverage policies – LCDs and National Coverage Determinations (NCDs). That is the reason we at MMP do a monthly article addressing coverage guidelines and listing new and retired policies of the MACs within our clients’ regions. For an idea of the scope of coverage policies:
• There are 338 NCDs
• There are 2773 LCDs overall
• Cahaba GBA (JJ MAC) has 64 active Part A LCDs
• First Coast (JN MAC) has 171 active LCDs (Part A and B)
• Novitas (JH MAC) has 84 active LCDs (A and B)
• Novitas (JL MAC) has 83 active LCDs (A and B)
• Palmetto (J-11 MAC) has 48 active Part A LCDs

To access a comprehensive list of the policies, use the Indexes tab on the Medicare Coverage Database website. Read the policies carefully – some still contain lists of covered diagnoses, but also remember that all indications and limitations within the policies must be considered.

• Policies that contain list of “covered” diagnoses are still adjudicated with automatic edits.
• For these, front end systems that identify the covered diagnoses are helpful – they allow a provider to request additional diagnostic information from the ordering physician prior to submitting a claim or obtain an Advance Beneficiary Notice (ABN) from the patient.
• Reviewing your Medicare denials by Claim Adjustment Reason Code (CARC) will identify those services that deny for lack of medical necessity. CARC 50 indicates “These are non-covered services because this is not deemed a ''medical necessity'' by the payer. Example: A diagnosis code was not submitted to support medical necessity based on Medicare's criteria.” Knowing the volume and financial impact of your medical necessity denials will help you determine which issues you need to address.
• Evaluate coverage policies for services your facility offers that are “at risk.” You will want to consider the volume of the services you offer, the reimbursement amounts for these services, and the conditions of the policy. For example, if your facility performs implantation of Automatic Implantable Cardiac Defibrillators, the reimbursement is significant and the requirements are detailed. Also, there has been a lot of review activity of these services by government agencies, such as the Department of Justice, which brings us to our next suggestion –
• Monitor review activity of Medicare contractors and affiliates. MACs are now required to post their planned pre- and post-payment reviews and the findings from these reviews. Recovery Auditors and the Supplemental Medicare Review Contractor also post their planned reviews on their websites. The Office of Inspector General (OIG) has an annual Work Plan of their planned review activities, publishes reports of their reviews, and posts enforcement actions. Medicare has a Quarterly Compliance Newsletter, Medicare Compliance Fast Facts and many other educational resources that target at risk areas. Also numerous newsletters from consultants, list-serves, etc. are available – for example, we hope you find our weekly newsletter helpful in identifying issues that you need to address.
• Have a robust process to address Additional Documentation Requests (ADRs) and monitor denial reasons. Sometimes this involves tracking the ADR outcome through FISS but the information is often worth the effort.

As you can see, there is a lot of information available to help providers ensure their services pass Medicare’s medical necessity criteria, but as you can also see, it will take some time and effort to sort it all out, develop plans, and take actions to ensure compliance. No one promised it would be easy – in fact, it is as hard as herding cats!

See the table below for recent Coverage Policy updates. Also a reminder that the Medicare Probe and Educate program that is examining providers’ compliance with the inpatient admission two-midnight rule will continue through April 30, 2015. There is pending legislation in Congress to address a number of expiring provisions, including the Probe and Educate program.

Life would be chaos without rules. Driving on the wrong side of the road, lack of education because what child would go to school if it wasn’t a rule, no money for government services without tax payments, and of course, how would we ever bill Medicare without all the regulations? But some rules are just bigger, badder, and uglier than others.

The April 2015 OPPS update allows the inclusion of an inpatient only procedure onto the inpatient claim if it is provided on an outpatient basis prior to an inpatient admission and qualifies under the three-day window rule. This is a significant change in the rules which previously did not allow payment for inpatient only procedures in this situation.

The new rule effective April 1, 2015 states that “inpatient only procedures that are provided to a patient in the outpatient setting on the date of the inpatient admission or during the 3 calendar days (or 1 calendar day for a non-subsection (d) hospital) preceding the date of the inpatient admission that would otherwise be deemed related to the admission, according to the policy for the payment window for outpatient services treated as inpatient services will be covered by CMS and are eligible to be bundled into the billing of the inpatient admission.”

The BIG question is – does this mean that if the physician failed to write an inpatient admission order prior to the IP only procedure, that it is now acceptable to write the inpatient order after the inpatient only procedure when the only reason for inpatient admission is based on the performance of the inpatient only procedure (that is, there is no expectation of a 2-midnight stay after the order)? The BAD news is that the Transmittal does not answer this question which leaves the new rule open to a lot of interpretation. This could get UGLY. I have emailed the pre-implementation CMS contacts for further guidance and will publish any clarification I receive.

This is a good time to review the three-day window rule. I break the three-day window rule into three parts to better remember and understand it. Under the three-day window rule, the following outpatient services must be combined onto the ensuing inpatient claim for IPPS hospitals:

1. All services provided on the day of admission
2. All diagnostic services provided within 3 calendar days* prior to admission
3. All non-diagnostic services related to the reason for admission provided within 3 calendar days prior to admission

Note* - Non-IPPS hospitals (non-subsection (D) hospitals) combine services within 1 calendar day of admission.

But knowing the rule is only part of the challenge. The bigger challenge for hospitals is in implementing the rule.

• Identify the affected claims – Claims that contain services provided within the payment window by the admitting hospital, or by an entity wholly owned or wholly operated by the admitting hospital (or by another entity under arrangements with the admitting hospital)
• Determine if non-diagnostic services are related - the preadmission non-diagnostic services are considered related unless they are clinically distinct or independent from the reason for the beneficiary’s admission
• Combine the charges
• All charges from the day of admission
• All charges for diagnostic services within 3 days of admission - diagnostic services are defined by the presence on the bill of the specific revenue and/or CPT codes listed in the Medicare Claims Processing Manual, Chapter 3, Section 40.3.B.
• Charges for related non-diagnostic services within 3 days of admission
• Re-code the “combined” claim – include any ICD diagnosis codes and procedure codes from the combined outpatient services (effective April 1, 2015, this will include procedure codes for inpatient only procedures provided during the outpatient time preceding the inpatient admission)
• Bill unrelated non-diagnostic services provided during the payment window on a separate 13x type of bill – add condition code 51 to attest that these services are unrelated to the ensuing inpatient admission

There are a lot of other important details concerning the three-day window rule, such as exempt services, services provided in a physician’s office owned by the hospital, and how to code the present-on-admission (POA) indicators, just to name a few. For complete guidance on the three-day window rule, see the Medicare Claims Processing Manual, Chapter 3, Section 40.3.

As you can see the 3-day rule is not just remembering three little things. It is a really big, bad and ugly rule that unfortunately just seems to have gotten uglier.

I love making lists – all sorts of lists: daily to-do’s, grocery lists, my favorite songs/books, long-term goals, etc. There is something satisfying about organizing things into a list format. For those fellow list-lovers out there, the long-awaited instructions on billing of pacemakers to Medicare should be right up your alley. There are lists of covered conditions, non-covered conditions, HCPCS codes, CPT codes, ICD-9 procedure codes, covered diagnosis codes, and sometimes allowed diagnosis codes.

Medicare has finally issued the manual guidance concerning the new guidelines for coverage of single chamber and dual chamber permanent cardiac pacemakers. Under the new guidelines, effective for dates of service on and after August 13, 2013, Medicare covers implanted permanent single chamber or dual chamber cardiac pacemakers for:

1. Documented non-reversible symptomatic bradycardia due to sinus node dysfunction.
2. Documented non-reversible symptomatic bradycardia due to second degree and/or third degree atrioventricular block.

Symptoms of bradycardia are symptoms that can be directly attributable to a heart rate less than 60 beats per minute (for example, syncope, seizures, congestive heart failure, dizziness, or confusion).

The list of conditions for which implanted cardiac pacemakers are not covered is much longer than the list of covered indications. Diagnosis codes for a few of the non-covered indications (exceptions) may be accepted on claims that also contain a covered diagnosis for the bradycardia. The non-covered conditions include:

1. Reversible causes of bradycardia such as electrolyte abnormalities, medications or drugs, and hypothermia.
2. Asymptomatic first degree atrioventricular block. *(exception)
3. Asymptomatic sinus bradycardia.
4. Asymptomatic sino-atrial block or asymptomatic sinus arrest. *(exception)
5. Ineffective atrial contractions (for example, chronic atrial fibrillation or flutter, or giant left atrium) without symptomatic bradycardia. *(exception)
6. Asymptomatic second degree atrioventricular block of Mobitz Type I unless the QRS complexes are prolonged or electrophysiological studies have demonstrated that the block is at or beyond the level of the His Bundle (a component of the electrical conduction system of the heart).
7. Syncope of undetermined cause. *(exception)
8. Bradycardia during sleep.
9. Right bundle branch block with left axis deviation (and other forms of fascicular or bundle branch block) without syncope or other symptoms of intermittent atrioventricular block. *(exception)
10. Asymptomatic bradycardia in post-myocardial infarction patients about to initiate long-term beta-blocker drug therapy.
11. Frequent or persistent supraventricular tachycardias, except where the pacemaker is specifically for the control of tachycardia. *(exception)
12. A clinical condition in which pacing takes place only intermittently and briefly, and which is not associated with a reasonable likelihood that pacing needs will become prolonged.

Hospital Claim Requirements

For outpatient claims, implantable cardiac pacemakers are reported with the following -

Pacemaker device HCPCS Codes

• C1785 – Pacemaker, dual chamber, rate-responsive (implantable);
• C1786 – Pacemaker, single chamber, rate-responsive (implantable);
• C2619 – Pacemaker, dual chamber, nonrate-responsive (implantable);
• C2620 – Pacemaker, single chamber, nonrate-responsive (implantable);

CPT Procedure Codes

• 33206 – Insertion or replacement of permanent pacemaker with transvenous electrode(s) – atrial
• 33207 – Insertion or replacement of permanent pacemaker with transvenous electrode(s) –ventricular
• 33208 – Insertion or replacement of permanent pacemaker with transvenous electrode(s) – atrial and ventricular

A –KX modifier must be appended to the procedure claim line(s) to attest that documentation is on file verifying the patient has non-reversible symptomatic bradycardia, with symptoms such as syncope, seizures, congestive heart failure, dizziness, or confusion. Claims with one of the above listed pacemaker insertion CPT codes without the KX modifier will be returned to the provider.

Report pacemaker insertion procedures on a hospital inpatient claim with one of the following procedure codes:

• 37.81 Initial insertion of single chamber device, not specified as rate responsive
• 37.82 Initial insertion of single chamber device, rate responsive
• 37.83 Initial insertion of single chamber device

Both inpatient and outpatient claims require one of the following diagnosis codes for the services to be covered by Medicare:

• 426.0 Atrioventricular block, complete (I44.2)
• 426.12 Mobitz (type) II atrioventricular block (I44.1)
• 426.13 Other second degree atrioventricular block (I44.1)
• 427.81 Sinoatrial node dysfunction (I49.5)
• 746.86 Congenital heart block (Q24.6)

There are diagnoses from the “non-covered” indications (exceptions) that the Medicare Administrative Contractors may decide to accept on claims, but only when reported with one of the above “covered” diagnosis codes. The claim must contain one of the covered diagnosis codes in addition to one of the following diagnosis codes. Also note, this coverage is at the discretion of the MAC. One more note - after ICD-10 implementation, the presence of code R55 (syncope and collapse) will result in denial. These codes are:

• 426.10 Atrioventricular block, unspecified/ I44.30 Unspecified atrioventricular block;
• 426.11 First degree atrioventricular block/ I44.0 Atrioventricular block first degree;
• 426.4 Right bundle branch block/ I45.10 Unspecified right bundle-branch block/ I45.19 Other right bundle-branch block;
• 427.0 Paroxysmal supraventricular tachycardia/ I47.1 Supraventricular tachycardia;
• 427.31 Atrial fibrillation/ I48.1 Persistent atrial fibrillation/ I48.91, Unspecified atrial fibrillation;
• 427.32 Atrial flutter/ I48.3 Typical atrial flutter/ I48.4 Atypical atrial flutter or I48.91 Unspecified atrial fibrillation; or
• 780.2 Syncope and collapse/R55 Syncope and collapse (R55 is the ICD-10 dx code but is not payable upon implementation of ICD-10 and is only included here for information purposes). 

For additional information, please refer to the MLN Matters Article MM9078, Transmittal R3204CP, and Transmittal R179NCD. This includes instructions on professional billing, listing of I-10 procedure codes, and coverage not addressed by the NCD that is left to the discretion of the Medicare Administrative Contractors.

Now you have Medicare’s lists… When hospitals implement these instructions, they will want to have a checklist of their own to make sure they have addressed all the requirements for coverage.

Other recent coverage updates include:

Can you sometimes tell by the tone of someone’s voice or the way they drag out the words, that there is a condition to their answer? “Well, nooo…” You just know the conjunction “but” is coming. Medicare generally communicates with providers in writing, but experience tells us there is often a condition to Medicare’s answers.

A few years ago there was a lot of discussion in Medicare billing circles about whether a physician’s signature is required on a laboratory requisition. And in typical Medicare fashion, the answer was a clear, “No…, but…” The “but” being that although the signature of the ordering physician is not required on the requisition, there has to be an order or documentation of intent to order the lab tests that is signed by the physician. This documentation can be located in the physician’s office chart, but needs to be submitted to the Medicare contractor in the case of a medical review of the claim. And the provider being reviewed (i.e. the testing lab), whose payment is at risk, is the one ultimately responsible for submitting the supporting documentation.

With all the reminders of these requirements that circulated back then, surely most hospital-based and independent laboratories understood what was expected. Therefore, I was a bit surprised to see an announcement back in December concerning a significant increase in pathology and laboratory service errors identified by data analysis of the Comprehensive Error Rate Testing (CERT) program findings. In response to the increase in errors, CERT published a document addressing the lab and pathology errors.

CERT identifies insufficient documentation and incorrect coding as the reasons for the significant errors, but the main issue addressed in the publication is missing or incomplete documentation.

“If a physician’s order for a diagnostic test is not included in the medical record, the physician must document the intent to order the laboratory service.” This documentation must state the specific tests the physician is ordering. Simply stating “ordering lab” is not sufficient. Also the documentation of intent must be signed by the physician or there must be a signed physician’s order for the lab tests. A signed order or signed documentation of intent to order must be sent to the Medicare contractor reviewing the record to support the services billed. Without this documentation, the claim will be denied.

“Documentation must support the medical necessity for the services performed.” Per the Medicare Claims Processing Manual, Chapter 16 , section 120.1 – “Diagnoses are required on all claims” and such diagnostic information must be supplied to the performing laboratory by the ordering physician. There are twenty-three National Coverage Determinations (NCDs) for lab services and individual Medicare Administrative Contractors (MACs) often have Local Coverage Determinations (LCDs) for other lab services. Both the NCDs and LCDs require certain diagnoses to support the medical necessity of the lab tests; additional indications and documentation may also be required by the coverage policies. Two examples of required lab documentation from the CERT document include:

• Blood Glucose - The ordering physician must include evidence in the patient’s clinical record that an evaluation of history and physical preceded the ordering of glucose testing and that manifestations of abnormal glucose levels were present to warrant the testing.
• Thyroid Function tests - When thyroid function tests are billed at a greater frequency than the norm (two per year), the ordering physician’s documentation must support the medical necessity of this frequency.

One more requirement – signatures must meet the Medicare signature guidelines as described in the Medicare Program Integrity Manual, Chapter 3, section 3.3.2.4.

In summary, if the CERT contractor reviews your laboratory claims, be sure to:

1. Respond timely to the CERT medical record request
2. Providers have 75 days to submit requested records
3. CERT will accept late documentation
4. Include all necessary documentation
5. A signed order or documentation of intent to order labs signed by the ordering physician
6. Signatures must meet Medicare signature requirements
7. Documentation to support the medical necessity of the services
8. Lab results/reports
9. Appeal unfavorable decisions to your local MAC
10. Include additional supporting documentation

That “no signature” thing comes with a huge conditional “but”!

This material was compiled to share information. MMP, Inc. is not offering legal advice. Every reasonable effort has been taken to ensure the information is accurate and useful.

Recently a hospital reported to MMP that they were cited for an underpayment by the Recovery Auditor because they had billed for a portion of a drug that is only available in a single-dose vial. The hospital, following the appropriate United States Pharmacopeia (USP) standards for compounding, had split the single-dose vial into incremental portions in syringes. They billed Medicare for the dose administered to a patient and the wastage amount of one of the prepared syringes. The RAC denied this as an underpayment – what should the hospital do?

My research revealed that the splitting of single-dose vials is a huge controversy. The Centers for Disease Control and Prevention (CDC) has released a statement opposing the splitting of single-use vials due to safety concerns, except in times of severe shortages of medicines.   CMS has even weighed in on the issue with a memo to the State Survey Agency Directors requiring adherence to strict standards for repackaging of single use vials.

But often single-use vials contain more medication than the routine dose. Drug wastage raises concerns about the high costs of drugs and the ever increasing number of drug shortages. For these reasons, hospital pharmacies may aliquot a single-dose vial into smaller doses. A patient will then be administered the ordered dose from the prepared syringe and any remaining amount within the syringe will be wasted. The hospital should bill for the amount of the drug given and wasted from the single syringe used. This will result in the billing of an amount less than the amount in the single-use vial. Like the situation above, this may cause a Medicare contractor to question your billed units.

The hospital will have to appeal the denial and provide documentation to the contractor that supports:

• Their process for splitting the single-use vial, including adherence to the required criteria
• The dosage within the syringe that was used
• The amount administered to the patient and the amount wasted

If the denial comes from a Recovery Auditor and your hospital has time, you may be able to resolve the issue during the discussion period.

And you probably never thought you would object to an underpayment finding!!