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Q:

Where can I find the new QIO contact information that we should put on the Important Message from Medicare (IM) letter?

A:

As of August 1st, the QIO Program began its 11th Scope of Work (SOW). The newly created Beneficiary and Family Centered Care – Quality Improvement Organizations (BFCC-QIOs) are responsible for managing discharge appeals.

There are two BFCC-QIOs for the nation. CMS awarded the two BFCC-QIOs contracts to Livanta, LLC located in Annapolis Junction, Maryland and KePRO located in Seven Hills Ohio. The 50 states, DC, Puerto Rico and the Virgin Islands have been divided into Five (5) Areas.

CMS has provided a 2014 QIO Program Transition Fact Sheet for Providers and Suppliers. In this fact sheet CMS instructs Providers that a list of current BFCC-QIOs as well as the Quality Innovation Network (QIN) QIOs can be found at http://www.qioprogram.org under Locate Your QIO.

We have all experienced times when our first attempt at something did not work out the way we planned. Then, if we didn’t just give up, we had to tweak our solution or try something different to accomplish our goal. Evidently Medicare is having a similar experience with their attempts to reduce Medicare paid claims error rates through the National Correct Coding Initiative and the Medically Unlikely Edits. CMS has recently made some modifications to both with the hope of better controlling improper coding and billing.

NCCI Edits and Modifier 59

The National Correct Coding Initiative (NCCI) contains Procedure to Procedure edits to prevent unbundling of services and inappropriate payments. The edits are based on the principle that the second code defines a subset of the work of the first code. However for some code combinations, there are times when reporting the two codes together on a claim is appropriate and there are HCPCS modifiers that allow some CCI edits to be by-passed.

One of the most commonly used modifiers is modifier 59 which is used to indicate that a service is “separate and distinct” from another service with which it is sometimes bundled. Directions in the NCCI manual instruct to use modifier 59 (if no other modifier fits) to report different encounters, different anatomic sites, and distinct services. For providers it is sometimes difficult to know exactly when the 59 modifier is appropriate and CMS reports that this modifier is indeed associated with considerable abuse and high levels of manual audit activity.

Modifier 59 is used infrequently and usually correctly for different encounters and used more frequently, but less correctly for separate anatomic site. And interestingly, CMS says the most common reason for using modifier 59 is also the most frequently incorrect usage – that is when it is used to define a distinct service. All of this incorrect usage voids the very purpose of the CCI edits.

In Transmittal 1422 (see MLN Matters Article MM8863), CMS is proposing four new HCPCS modifiers to define specific subsets of the -59 modifier. These modifiers are not required to be used at this time, and CMS will accept either a -59 modifier or one of the new modifiers for now, although they are encouraging providers to “rapidly” implement use of the new modifiers. CMS and/or the local Medicare Administrative Contractors (MACs) may require the usage of the new modifiers in the future especially for certain codes at high risk for incorrect billing.

The new modifiers (known as –X {ESPU} modifiers) are:

• XE Separate Encounter, A Service That Is Distinct Because It Occurred During A Separate Encounter
• XS Separate Structure, A Service That Is Distinct Because It Was Performed On A Separate Organ/Structure
• XP Separate Practitioner, A Service That Is Distinct Because It Was Performed By A Different Practitioner
• XU Unusual Non-Overlapping Service, The Use Of A Service That Is Distinct Because It Does Not Overlap Usual Components Of The Main Service

Transmittal 1422 explains a little better than the corresponding MLN Matters article that modifier 59 will still be accepted in many instances. However current, existing guidance concerning modifier 59 continues to apply - “the -59 modifier should not be used when a more descriptive modifier is available” which now includes the new more descriptive –X {ESPU} modifiers.

Medically Unlikely Edits

In a separate Transmittal (see MLN Matters Article MM8853) CMS reviews modification to the Medically Unlikely Edit (MUE) Program. This is basically the same information as previously presented in MLN Matters Special Edition article SE1422 but more details are provided (see the MMP article Medicare MUEs and Correct Bilateral Billing from July).

Like the NCCI edits, the MUE program (which began in January 2007) was implemented to reduce the Medicare paid claims error rate. The MUE is a limit on the number of units that Medicare will adjudicate. Initially, the MUE values were only adjudicated against the units reported on each line item of a claim. In April, 2013, CMS modified the MUE program so that some MUE values would be date of service edits. This means that if the units reported for one day of a HCPCS code (with a date of service MUE) exceed the MUE limit, no payment would be made for that code unless the denial was overturned on a provider-initiated appeal.

At the same time as the date of service edits, CMS introduced an “MUE adjudication indicator” (MAI) to the MUE edit table. The MAI field was not made public knowledge or published until the July 2014 MUE update. These indicators describe the type of MUE and how it is adjudicated.

• An MAI of “1” is a claim line edit. The MUE may be by-passed when appropriate by reporting units exceeding the MUE on separate lines with an acceptable modifier.
• An MUE with an indicator of “2” is an absolute date of service edit. Units of service exceeding the MUE value are considered “impossible” because they are contrary to statute, regulation or subregulatory guidance, including correct coding policies. Denials for services with an MAI of “2” will not be overturned on appeal.
• MUEs for HCPCS codes with an MAI of “3” are date of service edits based on clinical guidelines. These edits will cause an automatic denial if the units for a date of service exceed the limit, but the denial may be overturned on appeal if there is adequate documentation of medical necessity of correctly reported units.

Additional information in this MLN article reminds providers that a denial of services due to an MUE is a coding denial and not a medical necessity denial. Therefore an Advance Beneficiary Notice (ABN) will not shift liability to the beneficiary. There is also a reminder that bilateral services should be reported on one line with a modifier 50 and units of 1 to avoid an MUE denial. Corresponding Transmittal 1421 explains that in determining date of service edits, Medicare will consider all units of the date of service HCPCS on “all claim lines on the current claim and paid claim lines of prior finalized claims”, although only lines on the current claim will be denied. Is this a proactive step to prevent providers from reporting units on separate claims?

As Medicare modifies their regulations, hospitals have to modify their processes to comply and adjust to the new requirements. The two transmittals discussed here will require hospitals to utilize new modifiers and be aware of the different types of MUEs and their impact on billing and appeals. It is always something!

Over the past several weeks, our series of FY 2015 IPPS Final Rule articles have included Quality Program updates (Hospital Value Based Purchasing Program, Readmission Reduction Program and HAC Reduction Program), MS-DRG updates and the discussion of a potential Short Stay Hospital Payment System for Hospitals.

Common to all three articles is the payment impact to hospitals whether it is a quality program payment incentives or penalties, new MS-DRGs impacted by the Post-Acute Transfer Rule or what payment to hospitals for Short Inpatient Stays may look like in the future.

This week our focus takes a one-eighty as we discuss hospital charges by reviewing the Final Rule discussion of the Requirement for Transparency of Hospital Charges Under the Affordable Care Act. CMS used the Final Rule to serve as an opportunity to reiterate the requirement for hospitals to share what they charge for items and services provided to their patients. Even though the text for this topic takes up less than one page of the 597 page Final Rule, it is important that hospitals are aware of and quickly put a plan in place to comply with this requirement.

What is in the Final Rule?

The discussion in the Final Rule is broken into an overview of hospital charges and the Transparency of Hospital Charges Requirement. Key information from both sections is as follows:

Overview

• Hospital charges are determined by the individual hospital for items and services provided to patients.
• What Hospitals charge and what hospitals are paid from Medicare for items and services provided are two very different amounts.
• “Hospital reported charges are used in determining Medicare’s national payment rates (for example, billed charges are adjusted to cost to determine how much to pay for one type of case relative to another.)”
• Per CMS, hospital charges “remain an important component of our healthcare system. For example hospital charges are often billed, in full, to uninsured patients who cannot benefit from discounts negotiated by insurance companies.”
• The wide variation in charges by hospital makes it challenging for patients to compare the cost of similar services.
• In 2013, CMS released inpatient and outpatient data providing hospital charges that “in general were significantly higher than the amount paid by Medicare under the IPPS or the OPPS.”
• CMS believes that this “charge data comparisons is introducing both transparency and accountability to hospital pricing, and we are continuing to pursue opportunities to report on hospital charging practices.”

Transparency Requirement Under the Affordable Care Act

Section 2718(e) of the Public Health Service Act requires that “[e]ach hospital operating within the United States shall for each year establish (and update) and make public (in accordance with guidelines developed by the Secretary) a list of the hospital’s standard charges for items and services provided by the hospital, including diagnosis-related-groups established under section 1886(d)(4) of the Social Security Act.”

In the FY 2015 IPPS Proposed Rule CMS reminded hospitals of their obligation to comply with this section of the Act. With the Final Rule they reiterated the following specific guideline for hospitals:

• “Either make public a list of their standard charges (whether that be the chargemaster itself or in another form of their choice), or their policies for allowing the public to view a list of these charges in response to an inquiry.”

CMS went on to indicate that “hospitals are in the best position to determine the exact manner and method by which to make the list public in accordance with the guidelines.”

CMS’s Expectations

• Make data consumer friendly “to help patients understand what their potential financial liability might be for services they obtain at the hospital, and to enable patients to compare charges for similar services across hospitals.”
• CMS expects hospitals to update their data at a minimum annually or as needed to reflect their current charges.
• CMS will continue to post data on the CMS Web site in a consumer friendly way. Data currently posted includes:
• May and June 2013 hospital charge data release,
• April 2014 physician data releases; and
• Data on geographic variation in payments and payments per beneficiary.

Consider yourself reminded, now what?

While you as the hospital are in the best position to determine how you are going to comply with these guidelines, the question that comes to mind is what information is already available to the public? It is amazing how much data is available and yet how far we still have to go to provide data in a consumer friendly format, let alone helping the public understand that charges and costs are two very different things.

What Data is Available?

As just mentioned, there is quite a bit of information available on the internet for consumers. However, after spending quite some time looking for and at the data, I am not convinced that consumers know what is available or could understand what it means.

State Level

The National Conference of State Legislature Web Site has a Web page dedicated to Resources for transparency and disclosure of health costs and provider payments: state actions. For those interested I encourage you to visit this site to see what if any legislation has been enacted in your state.

Ultimately, what I found was that the issue of price transparency is not a new one, several states have no legislation in place and several state health price information websites are maintained by State Hospital Associations.

Examples provided on this site include:

• “California’s Common Surgeries and Price Comparisonis a website allowing healthcare consumers to view and compare the price of 28 common elective inpatient procedures at hospitals across California.
• Florida has established a Website that enables consumers to obtain data on hospitals' charges and readmission rates (http://www.floridahealthfinder.gov/CompareCare/SelectChoice.aspx).
• Maryland’s Health Care Commission provides consumers with an online hospital pricing guidethat lists, for each acute care hospital in Maryland, the number of cases, the average charge per case, and the average charge per day for the 15 most common diagnoses.
• Oregon’s website "Oregon Pricepoint," is sponsored and maintained by the Oregon Association of Hospitals and Health Systems and allows health care consumers to receive basic, facility-specific information about services and charges.
• New Jersey launched to help consumers make informed choices regarding price and quality of hospital services in New Jersey.”

A couple of other states examples that I found include:

• Iowa’s Hospital Association Web site includes their Iowa Hospital Charges Compare that “allows health care consumers to access basic information about services and charges at Iowa hospitals.”
• Virginia’sPricePoint System through the Virginia Hospital & Healthcare Association that is described as “a user friendly resource created to provide basic demographic, quality and charge information on Virginia hospitals and to promote consumer/hospital interaction. Virginia’s hospitals are committed to providing hospital charge and quality data to help consumers make informed decision about their health care.”

National Level

The CMS releases Medicare Provider Utilization Payment Data

On May 8, 2013 the Department of Health and Human Services (HHS) released new hospital charge data. The data posted was comprised of charges for services for the 100 most common Medicare inpatient stays. In a related Fact Sheet, CMS indicated that “this data enables comparisons between the amounts charged by individual hospitals within local markets, and nationwide, for services that may be provided during similar inpatient stays.”

American Hospital Association (AHA) and Price Transparency

A search for “hospital price transparency” on the AHA website resulted in about 841 items. There were two recent items of interest to share with you in this article.

• A March 21, 2014 Issue Paper: Hospital Price Transparency that provides a background, current initiatives and the AHA Principles for Price Transparency.
• The August 15, 2014 release of the resource “Achieving Price Transparency for Consumers: Toolkit for Hospitals.” According to the AHA, “this resource will spark conversation and action by allowing hospitals to assess their current efforts and learn from others through case examples and sample price transparency tools.”

If you are unsure where to start I encourage you to look to the examples of hospitals efforts in the AHA Toolkit. Whatever you choose, remember that you are in the best position to determine how your facility will comply with the price transparency requirement in the Affordable Care Act.

Resource:

FY 2015 IPPS Final Rule pages 50145 – 50146 at:

http://www.gpo.gov/fdsys/pkg/FR-2014-08-22/pdf/2014-18545.pdf

Link to Medicare Provider Utilization and Payment Data CMS webpage:

http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Medicare-Provider-Charge-Data/index.html

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.

Hospitals claims are often denied by Medicare reviewers while the associated physicians’ claims receive payment. Hospitals and physicians strive for more complete and thorough documentation to prevent denials but physicians’ claims may never be evaluated based on the documentation even when there is a denial of the hospital claim. Based on a recent CMS manual update this may change and Medicare may be trying to kill two birds with one stone.

CMS has now opened the door for a direct effect on physician claims when hospital claims are denied. CMS had previously issued a transmittal for the denial of “related” claims, but that transmittal was rescinded. On August 8th, CMS released Transmittal 534, CR 8802 addressing claims that are related. This transmittal updates the Medicare Program Integrity manual to allow Medicare Administrative Contractors (MACs) and Zone Program Integrity Contractors (ZPICs) the discretion to deny other “related” claims submitted before or after the claim in question. The transmittal is effective September 8, 2014.

A claim is considered “related” if documentation associated with that claim can be used to validate another claim. The MACs and ZPICs must obtain CMS approval prior to initiating requested “related” claim(s) review. Also, MACs must post the intent to conduct “related” claims review(s) to the website within one month of initiation. Recovery Auditors (RAs or RACs) shall utilize the review approval process outlined in their Statement of Work when performing reviews of “related” claims.

The transmittal only provides one approved example of claims that may be denied as “related”, but reserves the option for future approved “related” claim review situations. The example appears to address one of the most common denials for hospitals – the situation in which an inpatient admission is denied for Part A payment (inpatient setting not medically necessary). The example also offers two options on addressing the physician’s payment in this situation– 1) the physician’s Part B payment could be downgraded from inpatient evaluation and management (E&M) services to outpatient E&M services or 2) the physician services could be denied all together if the documentation does not support the medical necessity of the procedure performed.

The exact wording of the approved example is:

• “The MAC performs post-payment review/recoupment of the admitting physician's and /or surgeon's Part B services. For services related to inpatient admissions that are denied because they are not appropriate for Part A payment (i.e., services could have been provided as outpatient or observation), the MAC reviews the hospital record and if the physician service was reasonable and necessary the service will be recoded to the appropriate outpatient evaluation and management service. For services where the patient’s history and physical (H&P), physician progress notes or other hospital record documentation does not support the medical necessity for performing the procedure, postpayment recoupment will occur for the performing physician’s Part B service.”

It will be interesting to see how this plays out in reality, with the requirements for CMS approval, possible time delays resulting from the approval/notification process, and only one “related” scenario for now. But hospitals and physicians alike need to watch out for those stones.

The FY 2015 Inpatient Prospective Payment System (IPPS) Final Rule did little to nothing to alleviate the 2-Midnight Rule or Physician Certification requirements for hospitals. As we continue our review of the Final Rule, this week’s article focuses on public comments regarding creating a payment policy for short inpatient hospital stays, the continued request for suggested exceptions to the 2-Midnight rule, the Probe & Educate Program and Physician Certification changes in the IPPS Final Rule as well a proposed change in the FY 2015 Outpatient Prospective Payment System (OPPS) Proposed Rule.

Medicare Payment for Short Inpatient Hospital Stays

In the FY 2015 IPPS Proposed Rule CMS requested public comments on a payment methodology for short inpatient hospital stays. Specifically, CMS outlined specific questions/considerations that they considered to be critical for the payment methodology.

Defining Short or Low Cost Inpatient Hospital Stays

Question

How to define short inpatient hospital stays for determining an appropriate Medicare payment?

• Should a short inpatient hospital stay be one where the average mean length of stay (AMLOS) is short for the MS-DRG?
  Example: MS-DRG 313 (Chest Pain)
• In FY 2014 the AMLOS is 2.1 days with a national average payment of $3,217.87
• Should a short inpatient hospital stay be an atypically short or low cost case relative to other cases within the same MS-DRG
  Example: MS-DRG 871 (Septicemia or Severe Sepsis without Mechanical Ventilation 96+ hours with MCC)
• In FY 2014 the AMLOS is 6.7 days with a national average payment of $9,949.52

Considerations

CMS believes that if a payment methodology was adopted that paid for atypically low-cost or short stay cases relative to the average case in the same MS-DRG (i.e. MS-DRG 871) this policy would be less likely to apply to MS-DRGs that are already low cost or a short stay (i.e., MS-DRG 313).

Determining Appropriate Payment for Short Inpatient Hospital Stays

Question

How is an appropriate payment determined once a short stay has been identified? “Some have suggested a per diem based payment amount, perhaps modelled on the existing transfer payment policy.”

Considerations

Again, a per diem based payment amount is more likely to impact payment for atypically short-stay or low-coast cases in an MS-DRG with a longer AMLOS. This would be less likely to impact MS-DRGs with a short AMLOS as the full IPPS payment would be made in 1 or 2 days.

Given that payment for the same case will be very different under the OPPS and IPPS dependent on whether or not the beneficiary has been formally admitted as an inpatient, pursuant to a physician order:

• When should an IPPS payment be limited to an OPPS payment amount?
• When would it be appropriate for the payment to be higher?
• If a higher payment is determined to be appropriate then how should the additional payment amount be determined?

Public Comments

Public comments received by the CMS made it apparent that for any short-stay policy there should be some general principles that the policy adheres and it should include some or all of the following:

• The policy “should provide more appropriate and adequate payment for medically necessary inpatient services that span less than 2 midnights."
• Payments should be higher than the OPPS rate but not exceed the full IPPS payment for a given MS-DRG.
• Admissions for procedures on the “inpatient only” list should be excluded from a short-stay policy.
• The policy should be budget neutral.
• “Hospitals should be eligible for all add-on payments they would otherwise receive (for example, DHS and IME), either in full or on a pro rate basis.”
• Short inpatient stays for beneficiaries should be considered inpatients and cost-sharing obligations should be calculated under Medicare Part A.
• The policy should not increase administrative burden for hospitals, physicians, or other medical providers.
• “CMS should provide clear and consistent guidance and allow adequate time for hospitals to implement the short-stay policy prior to its effective date.”
• Short stay policy considerations submitted included considering a per diem approach modeled after the existing transfer policy, creating MS-DRG weights for short-stay and nonshort-stay cases, or allowing the full MS-DRG payment for short stays in the interim while this issue is studied further.
• Other commenters indicated that to create a separate MS-DRG system for short stays undermines the MS-DRG system that “is predicated on the understanding that there will be a diversity of treatment patterns and individual patient circumstances for any given clinical condition, and that this diversity balances out – high-intensity cases are balanced by low-intensity cases.”
• MedPAC intends to explore alternative short-stay policies in their next work cycle.

At the end of the day, CMS thanked the commenters and they “look forward to continuing to actively work with stakeholders to address the complex question of how to further improve payment policy for short inpatient hospital stays.”

Suggested Exceptions to the 2-Midnight Benchmark

The CMS has identified that unforeseen circumstances such as a beneficiary’s death, transfer to another hospital, unexpected clinical improvement, election of hospice care, or leaving the hospital against medical advice (AMA) are all situations that could result in a hospital stay shorter than the two midnight expectation by the physician. In these instances, when a medical record contains an inpatient order, the physician’s clinical expectation and orders are clearly documented and support an expected medically necessary two midnight stay, “the patient may be considered to be appropriately treated on an inpatient basis and hospital inpatient payment may be made under Medicare Part A.”

The CMS has also indicated that there can be exceptions to the 2-midnight benchmark and it would still be appropriate for the beneficiary to be an inpatient. Specifically, in the 2014 IPPS Final Rule the exception was provided of procedures on the OPPS inpatient only list always being appropriate as an inpatient regardless of length of stay as long as the procedure is medically necessary and performed pursuant to a physician order and formal admission.

To date, one additional exception has been added in sub-regulatory guidance. “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.”

The CMS continues to be open to suggestions regarding potential additional exceptions to the 2-midnight benchmark. Suggestions can be sent to CMS via written correspondence or email at SuggestedExceptions@cms.hhs.gov.

Medicare Administrative Contractor (MAC) Probe and Educate Program

While there were no changes made to the 2-midnight rule that was finalized in the FY 2014 IPPS Final Rule, CMS does indicate in the 2015 IPPS Final Rule that “during the summer and fall of 2014, CMS plans to evaluate the results of the “probe & educate” process (a process by which MACs are reviewing a prepayment, provider-specific probe sample of inpatient Part A claims for appropriateness of inpatient admission under the revised 2-midnight benchmark and providing provider-specific education, as necessary, to correct improper payments) and issue additional subregulatory guidance to our claim review contractors, if necessary, to ensure consistency in application of the 2-midnight policy.”

Revision of the Requirements for Physician Certification for Critical Access Hospital Inpatient Services

For Critical Access Hospitals (CAHs) to receive payment under Medicare Part A for inpatient services a physician must certify “that the individual may reasonably be expected to be discharged or transferred to a hospital within 96 hours after admission to the critical access hospital.”

The 2014 IPPS Final Rule revised the physician certification timing requirement for CAHs from being required no later than 1 day before the date on which the claim for payment for the inpatient CAH service is submitted to require that “the certification must be completed, signed, and documented in the medical record prior to discharge (78 FR 50970).”

The 2015 IPPS Final Rule reversed the 2014 ruling and finalized that “a CAH is required to complete all physician certification requirements no later than 1 day before the date on which the claim for the inpatient service is submitted.”

FY 2015 OPPS Proposed Changes to the Physician Certification

Within the July 3rd, 2014 release of the FY 2015 OPPS Proposed Rule came two proposals that have the potential to ease some of the burden created by the FY 2014 IPPS Final Rule for Inpatient hospitals.

Inpatient Order Proposed Change

“While we continue to believe that the inpatient admission order is necessary for all inpatient admissions, we are proposing to require such orders as a condition of payment based upon our general rulemaking authority under section 1871 of the Act rather than as an element of the physician certification under section 1814(a)(3) of the Act.”

Physician Certification Proposed Change

“We are proposing to change our interpretation of section 1814(a)(3) of the Act to require a physician certification only for long-stay cases and outlier cases.”

“We are proposing to revise paragraph (a) of § 424.13 to specify that ‘Medicare Part A pays for inpatient hospital services (other than inpatient psychiatric facility services) for cases that are 20 inpatient days or more, or are outlier cases under subpart F of Part 412 of this chapter, only if a physician certifies or recertifies the following:

1. The reasons for either –
2. Continued hospitalization of the patient for medical treatment or medically required diagnostic study; or
3. Special or unusual services for cost outlier cases (under the prospective payment system set forth in subpart F or part 412 of this chapter).
4. The estimated time the patient will need to remain in the hospital.
5. The plans for posthospital care, if appropriate.’

If both proposals are finalized, hospitals need to be mindful of the following:

• The Inpatient Order remains a Condition of Participation (CoP) and a requirement for payment for Medicare Part A Services.
• Thorough physician documentation in the medical record (i.e. History & Physical, MD Progress Notes and Physician Orders) continues to be required to support the medical necessity for hospital care expected to span at least two midnights.
• The Inpatient Admission Order must still be signed prior to the beneficiary’s discharge. Without the inpatient order hospitals should not submit a Medicare Part A claim. In a response to a comment in the 2014 IPPS Final Rule, CMS indicated that “because the physician order is a requirement as a condition of payment, if the order is not documented in the medical record, the hospital should not submit a claim for Part A payment.”
• For Medicare beneficiaries that reach a 20 day length of stay it will be important to make sure that the Physician Progress notes on that day support the need for a continued medically necessary hospitalization and the plan of care for the beneficiary.

For more information:

• Details regarding short inpatient hospital stays, 2-midnight benchmark exceptions, and the probe and educate program can be found on pages  50146 – 50148 of the Final Rule at http://www.gpo.gov/fdsys/pkg/FR-2014-08-22/pdf/2014-18545.pdf.
• Details regarding the Physician Certification for CAHs can be found on pages 1278-1286 of the pre-published Final Rule.
• The proposed revision to the Physician Certification can be found in the Federal Register / Vol. 79, No. 134 / Monday, July 14, 2014 / Proposed Rules
• The Final Rule has a scheduled publication date of 08/22/2014 and will be available online at: http://ofr.gov/(S(pcl2zalo5cz115uiw2as4qqr))/inspection.aspx.

As we continue our review of the FY 2015 Inpatient Prospective Payment System (IPPS) Final Rule, this week’s article focuses on MS-DRG changes and the resulting changes to the Post-Acute Transfer DRGs.

MS-DRG Classification Changes in the Final Rule

Endovascular Cardiac Valve Replacement

Request

There was a request to create a new MS-DRG specific for various types of cardiac valve replacements performed by an endovascular or transcatheter technique.

CMS Data Analysis

The ICD-9-CM procedure codes (35.05, 35.06, 35.07, 35.08 and 35.09) are currently assigned to MS-DRGs 216, 217, 218, 219, 220 and 221. FY 2013 MedPar data revealed the following number of cases:

CMS established five criteria in the FY 2008 IPPS final rule (72 CFR 47169) to determine if subgroups of base MS-DRG cases should be created. In 2008 the criteria was based on average charges that was later converted to average costs. Criteria warranting a creation of a CC or MCC subgroup within a base MS-DRG must meet all of the following:

1. A reduction in variance of costs of at least 3 percent.
2. At least 5 percent of the patients in the MS-DRG fall within the CC or MCC subgroup.
3. At least 500 cases are in the CC or MCC subgroup.
4. There is at least a 20-percent difference in average costs between subgroups.
5. There is a $2000 difference in average costs between subgroups.

Data analysis supported the creation of a new base MS-DRG subdivided into two severity levels. CMS’s advisors noted that patients undergoing endovascular cardiac valve replacements are significantly different than the population undergoing an open chest cardiac valve replacement. They also noted that grouping these procedures separately “provides greater clinical cohesion for this subset of high risk patients.”

FY 2013 MedPar data for the two proposed MS-DRGs as provided in the final rule:

Final Rule

Two new MS-DRGs were created for endovascular cardiac valve replacements.

• MS-DRG 266 (Endovascular Cardiac Valve Replacement with MCC); and
• MS-DRG 267 (Endovascular Cardiac Valve Replacement without MCC).

Shoulder Replacement Procedures

Request

A request was made to change the MS-DRG assignment for the following two shoulder replacement procedure codes:

• 81.88 (Reverse total shoulder replacement); and
• 81.97 (Revision of joint replacement of upper extremity).

For procedure code 81.88 the request was made to reassign this procedure from MS-DRGs 483 and 484 (Major Joint/Limb Reattachment Procedure of Upper Extremities with CC/MCC and without CC/MCC respectively) to MS-DRG 483 only.

For procedure code 81.97 the request was made to reassign this procedure code from MS-DRGs 515, 516, and 517 (Other Musculoskeletal System and Connective Tissue O.R. Procedures with MCC, with CC, and without CC/MCC, respectively), to MS-DRG 483.

Based on the five criteria to determine if subclasses should be created for a base MS-DRG the claims data no longer supported the two severity level MS-DRGs 483 and 484. In the proposed rule CMS “proposed to collapse MS-DRGs 483 and 484 into a single MS-DRG by deleting MS-DRG 484 and revising the title of MS-DRG 483 to read “Major Joint/Limb Reattachment Procedure of Upper Extremities”.”

Final Rule

• Procedure code 81.97 will continue to be assigned to MS-DRGs 515, 516 and 517.
• MS-DRGs 483 and 484 have been collapsed into MS-DRG 483 (Major Joint/Limb Reattachment Procedure of Upper Extremities).

Back and Neck Procedures

Request

A request was made to reassign cases with a complication or comorbidity (CC) in MS-DRG 490 (Back & Neck Procedures Except Spinal Fusion with CC/MCC or Disc Device/Neurostimulator) to MS-DRG 491 (Back & Neck Procedures Except Spinal Fusion without CC/MCC or Disc Device/Neurostimulator). The suggestion was made to create a new MS-DRG subdivided based solely on the “with MCC or Disc Device/Neurostimulator” and the “without MCC” (and no device) criteria.

CMS Data Analysis

FY 2013 MedPar data was evaluated using a three-way severity level split with the three subgroups in the following table:

Final Rule

CMS adopted the proposed new MS-DRG grouping of:

• MS-DRG 518 (Back & Neck Procedures Except Spinal Fusion with MCC or Disc Device/Neurostimulator);
• MS-DRG 519 (Back & Neck Procedure Except Spinal Fusion with CC); and
• MS-DRG 520 (Back & Neck Procedure Except Spinal Fusion without CC/MCC).

MDC 15: Newborns & Other Neonates with Conditions Originating in the Perinatal Period

Request

A request was made to evaluate the MS-DRG assignment of seven ICD-9-CM diagnosis codes in MS-DRG 794 (Neonate with Other Significant Problems). The requestor noted that the codes in question had no bearing on the neonate and do not represent a neonate with a significant problem. It was recommended that MS-DRG logic change so that the codes would not lead to assignment of MS-DRG 794.

The recommendation was to add these seven codes to the “only secondary diagnosis” list under MS-DRG 795 (Normal newborn) so the case would be assigned to MS-DRG 795 (Normal newborn).

Final Ruling

The proposal was adopted as final to reassign the following seven diagnoses to the “only secondary diagnosis list” under MS-DRG 795 (Normal newborn) so that the case would be assigned to MS-DRG 795 (Normal newborn):

• V17.0 (Family history of psychiatric condition),
• V172 (Family history of other neurological diseases),
• V17.49 (Family history of other endocrine and metabolic diseases),
• V18.0 (Family history of diabetes mellitus),
• V18.19 (Family history of other endocrine and metabolic diseases),
• V18.8 (Family history of infectious and parasitic diseases); and
• V50.3 (Ear piercing).

MS-DRG Surgical Hierarchy Changes

Background

The MS-DRG Surgical Hierarchy is “an ordering of surgical classes from most resource-intensive to least resource-intensive.” “Application of this hierarchy ensures that cases involving multiple surgical procedures are assigned to the MS-DRG associated with the most resource-intensive surgical class.”

Hierarchy Changes in the Final Rule

MDC 5: Diseases and Disorders of the Circulatory System

• New MS-DRG 266 (Endovascular Cardiac Valve Replacement with MCC) and new MS-DRG 267 (Endovascular Cardiac Valve Replacement without MCC) will be sequenced above MS-DRG 222 (Cardiac Defibrillator Implant with Cardiac Catheterization with AMI/HF/Shock with MCC).

MDC 8: Diseases and Disorders of the Musculoskeletal System and Connective Tissue

• MS-DRGs 490 and 491 (Back & Neck Procedures Except Spinal Fusion with CC/MCC or Disc Device/Neurostimulator and without CC/MCC or Disc Device/Neurostimulator respectively) are being removed from the hierarchy.
• New MS-DRG 518 (Back & Neck Procedure Except Spinal Fusion with MCC or Disc Device/Neurostimulator), new MS-DRG 519 (Back & Neck Procedure Except Spinal Fusion with CC), and new MS-DRG 520 (Back & Neck procedure Except Spinal Fusion without CC/MCC) are being sequenced above MS-DRG 492 (Lower Extremity and Humerus Procedure Except Hip, Foot, Femur with MCC).

Partial Code Freeze

The Protecting Access to Medicare Act of 2014 (PAMA) (Pub. L. 113-9) was signed into law on April 1, 2014. PAMA specified that the Secretary may not adopt ICD-10 prior to October 1, 2015. On August 1st CMS issued a rule finalizing October 1, 2015 as the new ICD-10 Compliance Date. Changes in the final rule to the schedule for the partial code freeze include:

• On October 1, 2012, October 1, 2013 and October 1, 2014, there will be only limited code updates to both the ICD-9-CM and ICD-10 codes sets to capture new technologies and diseases as required by section 1886(d)(5)(K) of the Act.
• On October 1, 2015, there will be only limited code updates to ICD-10 code sets to capture new technologies and diagnoses as required by section 1886(d)(5)(K) of the Act. There will be no updates to ICD-9-CM, as it will no longer be used for reporting.
• On October 1, 2016 (1 year after implementation of ICD-10), regular updates to ICD-10 will begin.

MS-DRGs Subject to the Post-acute Care Transfer Policy (§412.4)

Background

§412.4(a) defines a discharge under the IPPS as when “a patient is formally released from an acute care hospital or dies in the hospital.”

§414.4(f) “provides that when a patient is transferred and his or her length of stay is less than the geometric mean length of stay for the MS-DRG to which the case is assigned, the transferring hospital is generally paid based on a graduated per diem rate for each day of stay, not to exceed the full MS-DRG payment that would have been made if the patient had been discharged without being transferred.”

MLN® Acute Care Hospital Inpatient Prospective Payment System Fact Sheet (ICN 006815 April 2013) indicates that under the Transfer Policy DRG payments are reduced when:

• The beneficiary’s LOS is at least 1 day less than the geometric mean LOS for the MS-DRG;
• The beneficiary is transferred to another IPPS acute care hospital or, for certain MS-DRGs, discharged to a post-acute setting;
• The beneficiary is transferred to a hospital that does not participate in Medicare (effective October 1, 2010); and
• The beneficiary is transferred to a CAH (effective October 1, 2010).

Post-acute care settings subject to the transfer policy include:

• Long-term care hospitals;
• Rehabilitation facilities;
• Psychiatric facilities;,
• Skilled nursing facilities (SNFs);
• Home Health Care (HHC) when the beneficiary receives clinically related care within 3 days after a hospital stay;
• Rehabilitation distinct part (DP) units located in an acute care hospital or CAH;
• Psychiatric DP units located in an acute care hospital or CAH;
• Cancer hospitals; and
• Children’s hospitals.

How CMS calculates the Per Diem Rate for the transferring hospital:

• Full MS-DRG payment ÷ geometric mean length of stay (GMLOS) = Per Diem Rate

CMS’s policy for Post-acute Care Transfer MS-DRGs payment calculation:

• The transferring hospital will receive 2x the Per Diem Rate on the first day of the hospitalization.
• The hospital will receive the Per Diem Rate for subsequent days up to the full MS-DRG payment (§412.4(f)(1)
• Note: Transfer cases are also eligible for outlier payments

CMS’s policy for Post-Acute Special Payment MS-DRGs:

• Hospital will receive 50% of the full MS-DRG payment + the single day Per Diem Rate on the first day of the hospitalization.
• The hospital will receive 50% the Per Diem Rate for subsequent days up to the full MS-DRG payment (§412.4(f)(6)).

In the FY 2015 final rule the MS-DRG changes were evaluated against the post-acute care transfer policy criteria as well as the special payment methodology criteria. The following table is a breakdown of the new MS-DRGs and whether or not they qualify as a Transfer MS-DRG and if yes did it also qualify for a Special Payment MS-DRG:

For more information:

• Additional details regarding MS-DRG changes can be found in the pre-published https://www.federalregister.gov/articles/2014/08/22/2014-18545/hospital-inpatient-prospective-payment-systems-for-acute-care-hospitals-and-the-long-term-care">Final Rule (pages 93 - 592).
• The Final Rule has a scheduled publication date of 08/22/2014 and will be available online at: http://ofr.gov/(S(pcl2zalo5cz115uiw2as4qqr))/inspection.aspx.

• MLN Matters® Number: SE0459 Clarification of Medicare’s Transfer Policy Under the Inpatient Prospective Payment System (IPPS) at: http://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/SE0459.pdf

One of the greatest features pertaining to ICD-10-CM/PCS that we as coders can look forward to is greater specificity. For the most part, the coding guidelines for ICD-10-CM regarding poisonings and injuries will remain the same as they are now in ICD-9-CM. A seventh character extension which identifies the encounter is one of the new features in ICD-10-CM. Refer to Section I.C.19.a of ICD-10-CM Official Guidelines for Coding and Reporting.

1. A - Initial encounter:     Used while patient is receiving active treatment for the condition. Examples of active treatment:
2. surgical treatment
3. emergency department encounter
4. evaluation and treatment by a new physician
5. D - Subsequent encounter:     Used for encounters after the patient has received active treatment of the condition and is receiving routine care for the condition during the healing or recovery phase. Examples of subsequent care:
6. cast change or removal
7. removal of external or internal fixation device
8. medication adjustment
9. S – Sequela:     Used for complications or conditions that arises as a direct result of a condition or injury. Example of sequel care:
10. painful scar formation secondary to 3rd degree burn right lower leg
11. complete quadriplegia secondary to traumatic C2 displaced vertebral fracture - G82.51 & S12.100S

FROM THE AUTHOR

Please note the last paragraph of Section I.C.19. a of ICD-10-CM Official Guidelines for Coding and Reporting regarding application of “S” as the seventh character.

When using 7th character “S”, it is necessary to use both the injury code that precipitated the sequel and the code for the sequel itself.     The “S” is added only to the injury code, not the sequel code. The 7th character “S” identifies the injury responsible for the sequel.   The specific type of sequel is sequenced first, followed by the injury code.

Injuries – Section I.C.19.b of the ICD-10-CM Official Guidelines for Coding and Reporting

• A separate code should be assigned for each individual injury unless a combination code is provided.
• Code T07 for Unspecified multiple injuries should not be assigned in the inpatient setting unless supporting documentation for a more specific code is not available. Always query the MD in an attempt to gain information to support a more specific diagnosis code.
• Do not assign traumatic injury codes (S00-T14.9) for normal healing surgical wounds or to identify complications of surgical wounds.
• Sequence first the more serious injury as determined by the MD/provider and receiving main focus of treatment.
• Do not assign a code for superficial injuries (abrasions or contusions) when a more severe injury is associated with the same site.
• When a primary injury results in minor damage to peripheral nerves or blood vessels, the primary injury is sequenced first with additional code(s) for injuries to nerves and spinal cord and/or injury to blood vessels. When the primary injury is to the blood vessels or nerves, that injury should be sequenced first.

Traumatic Fractures – Section I.C.19.c of the ICD-10-CM Official Guidelines for Coding and Reporting

• Once again, specificity is the name of the game. ICD-10-CM fracture codes can now indicate the fracture type:
• Greenstick
• Transverse
• Oblique
• Spiral
• Comminuted
• Segmental
• Documentation should specify:
• Displaced
• Non-displaced
• Open
• Closed
• Laterality
• Specific anatomical site
• Routine vs delayed healing
• Non-union
• Mal-union
• Type of encounter
• A fracture not indicated as displaced or non-displaced should be coded as displaced.
• A fracture not indicated as open or closed should be coded to closed.
• Multiple fractures are sequenced in accordance with the severity of the fracture.
• Fracture extensions are expanded to include:
• A – Initial encounter for closed fracture
• B – Initial encounter for open fracture
• D – Subsequent encounter for fracture with routine healing
• G – Subsequent encounter for fracture with delayed healing
• K – Subsequent encounter for fracture with non-union
• P – Subsequent encounter for fracture with Mal-union
• S – Sequela
• Fractures in a patient with known Osteoporosis should be assigned a code from category M80 (non-traumatic fracture), even if the patient had a minor fall or trauma. Refer to Section I.C.13 of the ICD-10-CM Official Guidelines for Coding and Reporting.

Open Fracture Classification System

The Gustilo open fracture classification system is utilized in the 7th character extender lists for some fractures. This indicates the energy of the fracture, soft tissue damage and the degree of contamination. The Gustilo classification system is divided into 3 major categories.

Facilities will need to educate their providers on using the scale below to ensure supporting documentation for proper code assignment. This will also help lessen the number of queries sent to the provider.

Grade I

• Low energy, wound less than 1 cm with minimal soft tissue damage
• Wound bed is clean
• Bone injury is simple with minimal comminution
• With intramedullary nailing, average time to union is 21–28 weeks

Grade II

• Wound is > than 1cm with moderate soft tissue damage
• High energy wound > than 1cm with extensive soft tissue damage
• Wound bed is moderately contaminated
• fracture contains moderate comminution
• With intramedullary nailing, average time to union is 26-28 weeks

Grade III

The following fracture types automatically results in classification as type III.

• Segmental fracture with displacement
• Fracture with diaphyseal segmental loss
• Fracture with associated vascular injury requiring repair
• Farmyard injuries or highly contaminated wounds
• High velocity gunshot wound
• Fracture caused by crushing force from fast moving vehicle

Grade IIIA

• Wound less than 10cm with crushed tissue and contamination
• Adequate soft tissue coverage of bone is usually possible
• With intramedullary nailing, average time to union is 30-35 weeks

Grade IIIB

• Wound greater than 10cm with crushed tissue and contamination
• Inadequate soft tissue coverage and requires regional or free flap
• With intramedullary nailing, average time to union is 30-35 weeks

Grade IIIC

• Associated major arterial injury with fracture which requires repair for limb salvage
• In some cases it will be necessary to consider BKA following tibial fracture

Seventh character extensions to designate the specific type of open fracture – based on the Gustilo open fracture classification.

• B – Initial encounter for open fracture type I or II (open fracture NOS )
• C – Initial encounter for open fracture type IIIA, IIIB, or IIIC
• E – Subsequent encounter for open fracture type I or II with routine healing
• F – Subsequent encounter for open fracture type IIIA, IIIB, or IIIC with routine healing
• H – Subsequent encounter for open fracture type I or II with delayed healing
• J – Subsequent encounter for open fracture type IIIA, IIIB, or IIIC with delayed healing
• M – Subsequent encounter for open fracture type I or II with non-union
• N – Subsequent encounter for open fracture type IIIA, IIIB, or IIIC with non-union
• Q – Subsequent encounter for open fracture type I or II with mal-union
• R – Subsequent encounter for open fracture type IIIA, IIIB, or IIIC with mal-union

The Gustilo classification is not used for all bones or all fracture types (such as Greenstick fracture or Torus fracture). Coders will need to be sure to look at each 7th character extender box for correct assignment.

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

We all learned our ABCs in kindergarten, but now we have to know Medicare’s version of the alphabet. For example this article looks at LCDs by the MACs and a new CMS NCD for coverage of CHF for CR for certain NYHA classes. And don’t forget to add the KX modifier when needed.

Cahaba, Palmetto, and First Coast - Medicare Administrative Contractors (MACs) for Jurisdictions 10, 11 and N respectively - did not have any new, retired or draft Local Coverage Determinations (LCDs) last month, but Novitas, the MAC for Jurisdictions H and L, retired a number of policies and replaced most of them with new policies. It appears Novitas is working toward having one policy on a topic for both of their jurisdictions and for both Part A and B. This will ensure consistency in coverage criteria for all providers handled by Novitas. See the table at the conclusion of this article for the list of this month’s new and retired policies.

On the national front, CMS manualized the National Coverage Determination (NCD) for coverage of congestive heart failure (CHF) for cardiac rehabilitation (CR) (see MLN Matters Article MM8758). The transmittals, to be implemented August 18, 2014, allow Medicare coverage, effective for dates of service on and after February 18, 2014, of cardiac rehabilitation services for patients with stable, chronic heart failure.

Stable, chronic heart failure is defined as patients with left ventricular ejection fraction of 35% or less and New York Heart Association (NYHA) class II to IV symptoms despite being on optimal heart failure therapy for at least six weeks. Stable patients are defined as patients who have not had recent (≤6 weeks) or planned (≤6 months) major cardiovascular hospitalizations or procedures.

In addition to CHF, Medicare covers cardiac rehab for the following conditions:

• Acute myocardial infarction within the preceding 12 months
• Coronary artery bypass surgery
• Current stable angina pectoris
• Heart valve repair or replacement
• Percutaneous transluminal coronary angioplasty (PTCA) or coronary stenting or
• Heart or heart-lung transplant

This is a good time to remind CR providers about the maximum number of sessions for CR and appropriate billing. MMP, as part of our 835 reviews for the HIQUP reports, consistently sees some cardiac rehab services denied with claim adjustment reason code (CARC) 151 (Payment adjusted because the payer deems the information submitted does not support this many services). This appears to be denials for cardiac rehab services exceeding the allowed maximum sessions.

Cardiac rehabilitation program sessions are limited to a maximum of 2 1-hour sessions per day for up to 36 sessions over up to 36 weeks, with the option for an additional 36 sessions over an extended period of time if approved by the Medicare contractor. For medically necessary CR sessions beyond 36, the provider should append a KX modifier on the claim lines as an attestation that documentation is on file verifying that further treatment beyond the 36 sessions is medically necessary up to a total of 72 sessions for that beneficiary. The Medicare contractor will accept the KX modifier and allow payment. Medicare will not cover CR sessions beyond 72 sessions, with or without the inclusion of a modifier.

The CARC for these maximum benefit denials may be changing as the Claims Processing Manual update included the following instructions:

The following messages shall be used when contractors deny CR claims that exceed 36 sessions, when a KX modifier is not included on the claim line:

Claim Adjustment Reason Code (CARC) 119 – Benefit maximum for this period or occurrences has been reached

Regardless of the denial reason code, providers need to carefully monitor their CR patients’ number of sessions and use the KX modifier when appropriate to assure proper payment. This will be even more important now that the volume of cardiac rehab will likely increase due to the inclusion of CHF as a covered indication.

On August 1st the Centers for Medicare and Medicaid Services (CMS) released the FY 2015 Inpatient Prospective Payment System (IPPS) Final Rule. Over the next few weeks we will share with you key portions of the Rule.

As with the FY 2015 IPPS Proposed Rule, the Final Rule’s main focus is on Quality. Specifically, the following three Affordable Care Act (ACA) mandated Programs:

• Hospital Readmission Reduction Program,
• Hospital Value Based Purchasing (VBP) Program; and
• Hospital-Acquired Condition (HAC) Reduction Program.

All three Programs are designed to improve quality of care to the patient during and after a hospitalization. At the national level several of the measures within these Programs are closely aligned with the Institute for Health (IHI) Triple Aim. “In 2008 Don Berwick, Tom Nolan, and John Whittington first described the Triple Aim of simultaneously improving population health, improving the patient experience of care, and reducing per capita cost. The Institute for Healthcare Improvement (IHI) developed the Triple Aim as a statement of purpose for fundamentally new health systems that contribute to the overall health of populations while reducing costs. The idea struck a nerve. It has since become the organizing framework for the US National Quality Strategy, for strategies of public and private health organizations around the world, and for many of the over 100 sites from around the world that have been involved in IHI’s Triple Aim prototyping initiative.”1

The Triple Aim of improving population health, improving the patient experience of care, and reducing per capita cost is not only the right thing for our patients it is a key framework to guide hospitals as our health care system moves forward towards pay for performance. Beyond the patient, it is also critical for hospitals to be aware of the potential payment reduction impact that these three Programs combined can have for hospitals with low quality performance.

‍Readmission Reduction Program:

Background

This Program began on October 1, 2012. In the first two years of the program hospitals with excessive 30 day readmission rates for Acute Myocardial Infarction (AMI), Heart Failure (HF) and Pneumonia (PN) were penalized a percentage of their base operating DRG payment amount for ALL Medicare discharges.

What’s New?

• Eligible hospital discharges occurring between July 1, 2010 and June 30, 2013 were used to calculate the FY 2015 Excess Readmission Rates (ERRs).
• The maximum hospital payment adjustment is increasing to 3%, as required by the ACA.
• Two new readmission measures are being added to the program.
• 30-day Risk Standardized Readmission for Chronic Obstructive Pulmonary Disease (COPD), and
• 30-day Risk Standardized Readmission following elective, primary total hip and/or total knee replacement (THA/TKA).
  To ensure that hip fracture patients are excluded from this measure, CMS finalized a refinement to the measure cohort to exclude patients with hip fracture coded as either the principal or secondary diagnosis during the index admission.
• The FY 2015 Hospital Readmission Reduction Program results are to be publically posted on Hospital Compare in December at http://www.medicare.gov/hospitalcompare/readmission-reduction-program.html.
• The rule finalized Readmissions for Coronary Artery Bypass Graft (CABG) Surgical Procedure as an new measure in FY 2017.
• Though not new it is important to note that discharge diagnoses for each applicable condition are based on specific ICD-9-CM codes for that condition. These codes can be found on the QualityNet Web site at: http://www.QualityNet.org > Hospital-Inpatient > Claims-Based Measures > Readmission Measures > Measure Methodology.

Hospital Value-Based Purchasing Program:

Background

The Hospital VBP Program also began October 1, 2012. A CMS Fact Sheet indicates that this program works by rewarding hospitals “based on the quality of care provided to Medicare patients, how closely best clinical practices are followed, and how well hospitals enhance patients’ experiences of care during hospital stays. Hospitals are no longer paid solely based on the quantity of services they provide.”

As this program matures the weighting of measures is shifting away from clinical process of care measures towards the patient experience, patient outcomes and efficiency as evidenced in the following table:

‍What’s New?

• The percent reduction for redistribution is increasing to 1.5% of the base operating DRG payment amount for all participating hospitals.
• The total estimated amount available for value-based incentive payments in FY 2015 is approximately $1.4 billion.
• As finalized in the FY 2013 Final Rule, the Efficiency Domain is being added in FY 2015. The current measure in this domain is the Medicare Spending Per Beneficiary (MSPB) measure. This measure “assesses Medicare Part A and Part B payment for services provided to a Medicare beneficiary during a spending-per-beneficiary episode that spans from 3 days prior to an inpatient hospital admission through 30 days after discharge.”
  The QualityNet MSPB web page indicates that “by measuring cost of care through this measure, CMS hopes to increase the transparency of care for consumers and recognize hospitals that are involved in the provision of high-quality care at lower cost to Medicare.”
• Six measures are to be removed from the program in FY 2017 due to them being “Topped-Out.” Topped out measures meet the two criteria of having a statistically indistinguishable performance at the 75th to 90th percentile and having a truncated coefficient variation of ≤ 0.10. The Topped-Out measures include:

‍

• Three new measures were finalized for FY 2017.
• Two new Outcome Measures for the Safety Domain
• Hospital-onset Methicillin-Resistant Staphylococcus Aureus (MRSA) bacteremia
• Clostridium difficile infection
• One new Clinical Process of Care Measure
• Elective Delivery Prior to 39 Weeks Gestation
• Two new measures were finalized for FY 2019.
• Hospital-Level Risk-Standardized Complication Rate (RSCR) Following Elective Primary Total Hip Arthroplasty (THA) and Total Knee Arthroplasty (TKA)
• This measure will assess “complications occurring after THA and TKA surgery from the date of the index admission to 90 days post date of the index admission.”
• The outcome is one or more of the following complications:
• AMI, PN, or sepsis/septicemia within 7 days of admission;
• Surgical site bleeding, pulmonary embolism or death within 30 days of admission; or
• Mechanical complications, periprosthetic joint infection or wound infection within 90 days of admission.
• PSI-90 Composite Measure which includes PSI-3 – Pressure Ulcer Rate, PSI-6- Iatrogenic Pneumothorax Rate, PSI-7-Central Venous Catheter-Related Blood Stream Infections Rate and PSI-8-Post-op Hip Fracture Rate.

Hospital-Acquired Condition (HAC) Reduction Program:

Background

The Deficit Reduction Act of 2005 (DRA) required that the Secretary identify at least two HACs by October 1, 2007. HACs are high cost and/or high volume conditions that have been designated as a complication (CC or MCC) for coding purposes, have evidence-based guidelines to prevent the condition and if it was the only secondary diagnosis driving the MS-DRG assignment to a higher paying MS-DRG it would be discounted and the hospital would receive payment as if the HAC never occurred. HACs began to impact payment for hospitals for discharges occurring on or after October 1, 2008.

What’s New?

The HAC Reduction Program is set to begin on October 1, 2014. This program is a penalty program that will reduce payments to hospitals with excessive HACs by 1% for ALL Medicare discharges.

In the FY 2014 Final Rule CMS indicated that “the HAC Reduction Program aligns with our national strategy to improve health care quality by promoting the prevention of HACs, such as “never events” and HAIs. Our goal for the HAC Reduction Program is to heighten the awareness of HACs and reduce the number of incidences that occur.” They went on to state that “we believe that our efforts in using payment adjustments and our measurement authority will encourage hospitals to eliminate the incidence of HACs that could be reasonably prevented by applying evidenced based guidelines.”

In an August 5th MLN Connects™ Provider eNews CMS indicated that “this new program builds on the progress in this area achieved through the existing HAC program, which is currently saving approximately $30 million annually.”

The measures in this program are separated into two domains and scoring for each measure will begin at the minimum value for each measure. Scoring of the measures will result in a Total HAC Score. The finalized domains, domain weight and measures are as follows:

‍

At the end of the day it really is all about the patient.

For more information:

• Additional details about all three of these programs can be found in the pre-published https://www.federalregister.gov/articles/2014/08/22/2014-18545/hospital-inpatient-prospective-payment-systems-for-acute-care-hospitals-and-the-long-term-care">Final Rule (pages 722-820, 822-976 and 976 – 1,049).
• The Final Rule has a scheduled publication date of 08/22/2014 and will be available online at: http://ofr.gov/(S(pcl2zalo5cz115uiw2as4qqr))/inspection.aspx.

Reference

1Stiefel M, Nolan K. A Guide to Measuring the Triple Aim: Population Health, Experience of Care, and Per Capita Cost. IHI Innovation Series white paper. Cambridge, Massachusetts: Institute for Healthcare Improvement; 2012. (Available on www.IHI.org)

The Office of Inspector General (OIG) regularly posts reports of their audit findings. A number of these reports relate to hospital payment errors, although the reports often address the same issues from hospital to hospital. However, I always read through the findings to see if there are any new twists to the issues and to remind myself of these OIG target areas – in other words to see what’s in it for me.

Recently the OIG released three reports of hospital audits – two related to drug payment errors and one general compliance review. Here are a couple of issues from these reports worth noting.

Non-covered Use of Reteplase

The drug reteplase (HCPCS code J2993 – injection, reteplase, 18.1 mg) is approved by the Food and Drug Administration (FDA) to treat cardiac conditions using a single-use dose. The OIG identified a billing error that occurred when a provider billed Medicare for one full single-use dose of reteplase when they had actually split a single dose into multiple doses and used them as a thromblytic agent to clean dialysis patient catheters. This is a non-covered use of reteplase and resulted in an overpayment to the facility. (OIG Report Drug Overpayments Jurisdiction 13)

Bundled IMRT Planning Services

In the OIG Medicare Compliance Review of Good Samaritan Hospital, the OIG identified that the hospital had billed separately for services performed as part of Intensity Modulated Radiation Therapy (IMRT) planning resulting in an overpayment. These services are included in the payment for IMRT planning even when provided on a different date of service.

Hospitals are to report CPT code 77301 for IMRT planning. The Medicare Claims Processing Manual, Chapter 4, section 200.3.2 states that “Payment for the services identified by CPT codes 77014, 77280-77295, 77305-77321, 77331, 77336, and 77370 is included in the APC payment for IMRT planning when these services are performed as part of developing an IMRT plan that is reported using CPT code 77301.” Therefore these codes should not be billed in addition to IMRT planning (CPT 77301), regardless if provided on the same or different dates of service, unless they are not provided as part of developing the IMRT treatment plan.

A quick review of OIG reports relating to hospital findings is a great way to become familiar with the OIG target areas and to evaluate issues against your hospital’s practices. Better to be proactive than regretfully reactive.