2019 MPFS Final Rules Affecting Hospitals

on Tuesday, 27 November 2018. All News Items | Outpatient Services | Billing

It Could Be Worse

One of my grandchildren’s favorite books is “It Could Be Worse.” This book follows the trip home of a young mouse from visiting friends. The mouse experiences one calamity after another – he falls in a hole, tumbles down a bank, falls into a stream, etc. The young mouse believes he is having a very bad day, but the illustrations show that he is actually narrowly escaping real disasters due to his minor mishaps. He falls in the hole just as a large predatory bird swoops down to grab him, for example. Sometimes we think things are bad, but generally they could always be worse.

Over the past couple of weeks, we have included articles in the Wednesday@One about the Outpatient Prospective Payment System (OPPS) Final Rule. For most of our hospital clients and readers, your outpatient services are paid under OPPS. There are some services however that, even for OPPS hospitals, are paid under a fee schedule other than OPPS. These services are identified on the OPPS Addendum B with a status indicator (SI) of “A” – “Not paid under OPPS.  Paid by MACs under a fee schedule or payment system other than OPPS.” Along with the payment systems often come payment rules for these services that also apply to hospital billing. Hospitals have to look to the Medicare Physician Fee Schedule (MPFS) Final Rule for some of these additional requirements. This week we examine some of the rule changes from the MPFS rule for 2019 that affect hospitals, including some changes that will not become effective until next year.

Off-Campus Provider Based Departments

Non-excepted off-campus provider-based departments (PBDs), that is those off-campus PBDs that began billing and furnishing services on or after November 2, 2015, are paid under the MPFS instead of under OPPS due to Section 603 of the Bipartisan Budget Act of 2015. Currently Medicare sets the MPFS rates for non-excepted off-campus PBDs annually in the MPFS final rule. This year, CMS finalized their “proposal to maintain the PFS Relativity Adjuster at 40 percent for CY 2019 and beyond until there is an appropriate reason and process for implementing an alternative to our current policy, at which time we will make a proposal through notice and comment rulemaking.” This means services in a non-excepted off-campus PBD will be paid at 40% of the OPPS payment rate for 2019 and beyond until Medicare elects to use a different payment policy for these services. Currently, OPPS packaging and payment rules also apply, including this year the reduced payment of ASP minus 22.5% for separately payable outpatient drugs (SI=”K”) purchased through the 340B program.

Therapy Services

Medicare is ending the requirements for reporting and documentation of functional limitation G codes (HCPCS codes G8978 through G8999 and G9158 through G9186) and severity modifiers (in the range CH through CN) for outpatient therapy claims with dates of service on and after January 1, 2019. This means physical therapy (PT), occupational therapy (OT), and speech language pathology (SLP) no longer have to report the functional limitation codes and modifiers beginning the first of the new year. CMS is not deleting these G codes until 2020 so that claims will not return or reject if they inadvertently contain these codes.

The Bipartisan Budget Act of 2018 contained requirements for reduced payments for therapy services furnished in whole or in part by therapy assistants. The payment reductions do not begin until 2022 and reporting requirements to identify such services do not begin until 2020. There is nothing to deal with this year, but here are some points to be aware of for the future.

  • Reporting and payment reduction will apply to hospital outpatient therapy services (except for critical access hospitals).
  • Payment for therapy services furnished on or after January 1, 2022, in whole or in part by a therapy assistant, will be paid at 85% of the otherwise applicable Part B payment amount for the service.
  • Since there are no therapy assistants for Speech Language Pathology (SLP) services, this only applies to physical therapy assistants and occupational therapy assistants.
  • CMS is creating two new modifiers to be appended to PT and OT line items furnished in whole or in part by a therapy assistant beginning with dates of service on and after January 1. 2020 (although payment reduction will not occur until 2022). The new modifiers, PTA modifier CQ and OTA modifier CO, will be reported alongside of the existing GP and GO modifiers.
  • CMS considers a service to be furnished in whole or in part by a PTA or OTA when more than 10% of the service is furnished by the PTA or OTA.

Laboratory Services

Most laboratory services on OPPS Addendum B have an SI of “Q4” due to the OPPS packaging requirements. However, when lab services meet the criteria for separate payment (i.e. they are the only type of service billed on the claim), they are paid separately under the Clinical Lab Fee Schedule (CLFS). The Protecting Access to Medicare Act of 2014 (PAMA), made significant changes to how Medicare pays for clinical diagnostic laboratory tests under the CLFS. Beginning January 1, 2018, CLFS rates are based on private payor rates reported to CMS by applicable laboratories. Not many hospital laboratories met the definition of an applicable reporting laboratory because it was defined as an entity that receives more than 50 percent of its Medicare revenues during a data collection period from the CLFS and/or the Physician Fee Schedule (PFS). Unless a hospital lab had its own NPI separate from the hospital NPI, it was unlikely the percent of CLFS/MPFS revenues was enough to meet the definition.

This year, Medicare is changing the definition to use Form CMS-1450 14x type of bill (TOB) to define applicable laboratories for the next data collection period (January 1, 2019, through June 30, 2019) and the next data reporting period (January 1, 2020, and ends March 31, 2020), subject to other regulatory and subregulatory requirements, such as the regulatory low expenditure threshold. Hospital outreach laboratories that do not receive at least $12,500 in CLFS revenues on the 14X TOB during a data collection period (6 months) would be exempt from the reporting requirements. This means more hospital laboratories will now be required to report private payor lab rates to CMS, specifically those hospital outreach labs with more than $12,500 in CLFS revenues per six months.  Hospitals need to evaluate whether they meet the new criteria for reporting and if so, be prepared to report by 2020.

Appropriate Use Criteria for Advanced Imaging

Imaging services are paid under OPPS, but there are new rules coming for 2020 that affect hospitals also. PAMA also directed CMS to establish a program to promote the use of appropriate use criteria (AUC) for advanced diagnostic imaging services. Under the program, ordering professionals must consult specified applicable appropriate use criteria (AUC) using a qualified clinical decision support mechanism (CDSM) when ordering applicable imaging services, and furnishing professionals must report AUC consultation information on the Medicare claim. Reporting is required beginning January 1, 2020. Year 2020 is an educational and operations testing period during which AUC consultation information is expected to be reported on claims, but claims will not be denied for failure to include the information. Reporting is required across claim types and by both the furnishing professional and furnishing facility, including hospital outpatient facilities (inpatient services paid under Part A are exempted). A lot more details on AUC can be found in the MPFS Final Rule. Since reporting is not required until 2020, hospitals have time to prepare. We will provide more details prior to the 2020 reporting requirement.

That is a summary of some changes from the MPFS Final Rule that affects hospitals. A couple of issues that you do not have to worry about until next year – reporting new modifiers for therapy assistants and reporting AUC information for advanced imaging services. This year your non-excepted off-campus PBDs will continue to be paid at 40% of OPPS rates, functional limitation reporting for therapy services goes away, and you need to decide if your outreach laboratory meets the definition of an applicable lab for reporting private payor lab rates to Medicare. Not a lot of things from the MPFS to consider, …yet – it could be worse.

Article by Debbie Rubio

Debbie Rubio, BS, MT (ASCP), is the Manager of Regulatory Affairs and Compliance at Medical Management Plus, Inc.  Debbie has over twenty-seven years of experience in healthcare including nine years as the Clinical Compliance Coordinator at a large multi-facility health system.  In her current position, Debbie monitors, interprets and communicates current and upcoming regulatory and compliance issues as they relate to specific entities concerning Medicare and other payers.  You may contact Debbie at This email address is being protected from spambots. You need JavaScript enabled to view it..

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.

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