A Look Back at 2017: Looking for Potential

on Wednesday, 03 January 2018. All News Items | Case Management | Recovery Auditor | Quality | Outpatient Services

Soon we will have completed our annual list of good intentions. Across the country there are millions of cigarettes waiting to be stomped out, tons of fat waiting to be lost, miles to be run, lives to be organized, selves to be improved.
      Once again, we will pass resolutions as if we were our own Congress, legislating changes in our lives. On a million scraps of paper, we will publish an updated catalog of promises to be filed on the shelf of the self....
      But I have a feeling that our resolutions have more to do with controlling our lives than enriching them....
      We spend Jan. 1 walking through our lives, room by room, drawing up a punch list of work to be done, cracks to be patched. We decide that it's time to get a painful grip on ourselves....
      But life improvement is not just a matter of discipline, self-control. It's a matter of expansion, the deliberate pursuit of happiness....
      We ought to walk through the rooms of our lives a second time, not looking for the flaws, but for potential.
      ~Ellen Goodman, The Boston Globe, December 1982

Another year has come and gone. As we enter the New Year before “looking for potential,” it is important to take a look back at key events in the world of CMS in 2017 that will continue to impact hospitals in the coming year.


3rd – Medicare Program; Advancing Care Coordination Through Episode Payment Models (EPMS); Cardiac Rehabilitation Incentive Payment Model; and Changes to the Comprehensive Care for Joint Replacement Model (CJR) Final Rule

The Final Rule was published January 3rd and in a related Fact Sheet, CMS notes that this Rule finalizes significant new policies that will improve cardiac care, orthopaedic care and provide an Accountable Care Organization opportunity for small practices.

Link to related article: http://www.mmplusinc.com/news-articles/item/episode-payment-models-and-cardiac-rehabilitation-incentive-payment-model-final-rule.

20th – CMS Transmittal 3695: Medicare Outpatient Observation Notice (MOON) Instructions

Transmittal 3695 updated Chapter 30 of the Medicare Claims Processing Manual to include the MOON form instructions. As a reminder, the MOON was developed to inform all Medicare beneficiaries when they are an outpatient receiving observation services, and are not an inpatient of the hospital or critical access hospitals (CAH). You can access the MOON Form (CMS-10611) on the Medicare Beneficiary Initiatives (BNI) webpage.

20th – EPMs, Cardiac Rehabilitation Incentive Payment Model; and CJR Changes – Interim Final Rule

As directed by a White House memorandum entitled “Regulatory Freeze Pending Review,” CMS delayed the effective date on the provision of this Final Rule from February 18th to March 21st.



16th - $5.5 million HIPAA Settlement Shines Light on the Important of Audit Controls

The Office of Civil Rights (OCR) posted a Press Release indicating that Memorial Healthcare System (MHS) paid “$5.5 million to settle potential Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy and Security Rules and agreed to implement a robust corrective action plan.” MHS had reported that the protected health information (PHI) of 114,143 individuals had been impermissibly accessed by its employees and impermissibly disclosed to affiliated physician office staff.

Recovery Auditors Begin to Post Approved Issues for Auditing

October 31st 2016 CMS announced the next round of Recovery Audit Contract (RAC) Awardees. With the new round there are now 5 Regions with Region 5 covering the entire nation and is dedicated to the post payment review of Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) and Home Health/Hospice services. In late January and February of this year three of the four new RACs that review hospital issues began posting newly approved review issues to their websites.

Link to related article: http://www.mmplusinc.com/news-articles/item/new-rac-review-issues-posted



8th – MOON Compliance

Hospitals and CAHs were required to begin providing the MOON no later than this date. A MOON implementation timeline and further information about the Manual Instructions can be found in a related article at http://www.mmplusinc.com/news-articles/item/moon-manual-instructions.

21st – EPMs, Cardiac Rehabilitation Incentive Payment Model; and Changes to the CJR Model Delayed

On March 21st CMS released an Interim Final Rule with comment period delaying the EPMS, Cardiac Rehabilitation Incentive Payment Model and Changes to the Comprehensive Care for Joint Replacement (CJR) Model.  



14th – Fiscal Year (FY) 2018 IPPS Proposed Rule (CMS-1677-P) Issued

CMS projected that total Medicare spending on inpatient hospital services, including capital, will increase by about $3.1 billion in FY 2018. Beyond several MS-DRGs proposed changes and proposed changes to the Quality Programs, CMS proposed to reclassify over 800 ICD-10-PCS procedure codes from O.R. to Non-O.R. Procedures.

Link to related article: http://www.mmplusinc.com/news-articles/item/icd-10-cms-procedure-codes-re-designated-as-non-o-r.


20th – EPMs, Cardiac Rehabilitation Incentive Payment Model; and CJR Changes - Final Rule

Final Rule finalized a further delay of the start date until January 1, 2018.

30th – New Medicare Cards

CMS announced the kick-off of a multi-faceted outreach campaign to help providers prepare for the fraud prevention initiative of removing Social Security numbers from Medicare cards to help combat identify theft, and safeguard taxpayer dollars. New cards will use a Medicare Beneficiary Identifier (MBI) to replace the SSN-based Health Insurance Claim Number (HICN). MBIs will be unique, randomly-assigned numbers. CMS is set to begin mailing new cards in April 2018. You can find more information on the CMS New Medicare Cards webpage.


9th – Elimination of Routine Reviews Including Documentation Compliance Reviews and Instituting Three Medical Reviews

CMS released Transmittal 721 instructing contractors to not perform routine reviews including documentation compliance reviews and there are now the following three types of reviews: 1) Medical records review-formerly “complex review”; 2) Automated review; and 3) Non-medical record review. Changes were effective July 11, 2017. This update applies to MACs, CERT, RACs, Supplemental Medical Review Contractor(s) and ZPICs/UPICs.


15th – Office of Inspector General (OIG) Work Plan

Historically, the OIG Work Plan was updated once or twice each year. In June the OIG noted that their “work planning process is dynamic and adjustments are made throughout the year to meet priorities and to anticipate and respond to emerging issues with the resources available…In order to enhance transparency around OIG's continuous work planning efforts, effective June 15, 2017, OIG will update its Work Plan website monthly.”


21st – Effective Date for Updated Advanced Beneficiary Notice (ABN)

In March of 2017 the ABN form was revised to include language information beneficiaries of their rights to CMS nondiscrimination practices and how to request the ABN in an alternative format if needed. June 21st was the effective date for the use of the renewed ABN (Form CMS-R-131). The new expiration date for this form is March 2020.



KEPRO Implements Scheduling Program to Schedule Short Stay Review Educational Sessions

KEPRO, the Beneficiary and Family Centered Care (BFCC) Quality Improvement Organization (QIO) for Areas 2, 3 and 4 announced that they have implemented a scheduling program to assist providers with setting up educational sessions. This program can be accessed on KEPRO’s Short Stay Reviews webpage.  



2nd – FY 2018 IPPS Final Rule Released

The following table highlights key policy changes finalized and links to related MMP, Inc. articles.

Finalized Policy Changes Link to Related MMP, Inc. Article
Quality Programs Policy Changes http://www.mmplusinc.com/news-articles/item/ipps-fy-2018-final-rule-part-2-quality-programs
ICD-10-PCS Codes Re-designated as Non-O.R. Procedures http://www.mmplusinc.com/news-articles/item/icd-10-cms-procedure-codes-re-designated-as-non-o-r-2
MS-DRG Policy Changes http://www.mmplusinc.com/news-articles/item/ipps-fy-2018-final-rule-part-3-ms-drgs-2

3rd – FY 2018 Readmission Penalties

Will you be subject to a Readmission Penalty in FY 2018? Kaiser Health News (KHN) is a nonprofit national health policy news service and on August 2nd, Jordan Rau of KHN released the article Under Trump, Hospitals Face Same Penalties Embraced by Obama. This article includes links to review penalties by Hospital or State. The entire article can be accessed at: https://khn.org/news/under-trump-hospitals-face-same-penalties-embraced-by-obama/


14th – Targeted Probe and Educate Pilot

Acute Inpatient hospitals first experienced a Probe and Educate Program after the implementation of the 2-Midnight Rule. CMS believes this has been a favorable strategy based on the decrease in claims errors after providers received education. On August 14th CMS announced the further improvement of this strategy by moving from a broad Probe and Educate Program to a Targeted Probe and Educate (TPE) Pilot Program to be carried out by select Medicare Administrative Contractors (MACs). Additional information can be found on the CMS TPE webpage.

Link to related article: http://www.mmplusinc.com/news-articles/item/targeted-probe-and-educate-pilot

17th – Medicare Program; Cancellation of EPMs, Cardiac Rehabilitation Incentive Payment Model; Changes to CJR Payment Model – Proposed Rule

Proposed Rule proposed the cancellation of the EPMS and Cardiac Rehabilitation incentive payment models and revisions to certain aspects of the CJR Model. 

28th – Effective Date for Updated Important Message from Medicare (IM) and Detailed Notice of Discharge (DND)

In June of 2017 the IM and DND forms were revised to include the same language as what was added to the ABN earlier in the year. August 28 was the effective date for the use of the updated forms. The new expiration dates for these forms are March 31, 2020 for the IM form and October 31, 2019 for the DND form. Information about the ABN, IM and DND can be found on the Medicare Beneficiary Initiatives (BNI) webpage.



7th – New MAC for Jurisdiction J

On September 7th, CMS announced that Palmetto GBA (Palmetto) had been awarded a new contract for the administration of Medicare Part A and Part B Fee-for-Service (FFS) claims in the states of Alabama, Georgia, and Tennessee (A/B MAC Jurisdiction J).  The implementation effective dates are:  

January 29, 2018: Part A Implementation Effective Date

February 26, 2018: Part B Implementation Effective Date

Palmetto GBA has set up a Jurisdiction J A/B MAC Transition website to help prepare providers for the transition.



1st: Sequencing COPD and Pneumonia Makes Sense Again

An instruction note for Code J44.0 COPD with Acute Lower Respiratory Infection instructed the coder to “use additional code to identify the infection” became effective for hospital discharges on or after September 23, 2016. What this meant was that for the patient admitted and treated for Pneumonia, who also had a history of COPD even if stable during the admission, COPD would be the principal diagnosis. 

The proposal made to delete the instructional note under J44.0 at the March 2017 ICD-10-CM Coordination and Maintenance Committee meeting was finalized. The FY 2018 ICD-10-CM Tabular List of Diseases & Injuries Addenda indicates this instruction has been deleted and the note “code also to identify the infection” has been added. This means that as of October 1, 2017, COPD or pneumonia can again be sequenced as the principal diagnosis.

Link to related article: http://www.mmplusinc.com/news-articles/item/sequencing-copd-and-pneumonia-about-to-make-sense-again

1st – Targeted Probe and Educate expands to ALL MACs

One-Time Notification Transmittal 1919 announced the expansion of the existing TPE Pilot to include all MACs effective October 1, 2017.



1st – OPPS Final Rule for Calendar Year 2018 Released

The following table highlights key Policy Changes finalized and links to related MMP, Inc. articles.  

Finalized Policy Changes Link to Related MMP, Inc. Article
340B Program http://www.mmplusinc.com/news-articles/item/opps-final-rule-major-payment-reduction-for-340b-drugs
Inpatient Only Procedure List http://www.mmplusinc.com/news-articles/item/opps-final-rule-changes-for-calendar-year-2018-inpatient-only-procedure-list
Drug Administration, Lab Date of Service, and Supervision of Outpatient Therapeutic Services http://www.mmplusinc.com/news-articles/item/more-policy-changes-from-the-2018-opps-final-rule

3rd – CMS Hospital Value-Based Purchasing Program Results for Fiscal Year 2018

In a November 3rd Fact Sheet, CMS announced that for FY 2018 they estimate the total amount available for value-based incentive payments for FY 2018 discharges will be approximately $1.9 billion (an increased from $1.8 billion in 2017). Now in its sixth year, close to 1,600 hospitals will have a positive payment adjustment for FY 2018.

Link to CMS Fact Sheet: https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2017-Fact-Sheet-items/2017-11-03.html

15th - Medicare Physician Fee Schedule Final Rule Published

Issues affecting hospital providers:

  • Payment Rate for Nonexcepted Off-Campus Provider Based Departments,
  • Therapy Caps, and
  • Appropriate Use Criteria for Advanced Diagnostic Imaging Services.

Link to related article: http://www.mmplusinc.com/news-articles/item/mpfs-updates-affecting-hospitals

20th – CMS Announces the CMS Measures Inventory Tool (CMIT)

Kate Goodrich, MD – Director, CMS Center for Clinical Standards and Quality & CMS Chief Medical Office announced in a CMS Blog “that CMS is deploying an innovative tool that provides all stakeholders improved visibility into the portfolio of CMS measures.” The CMIT “provides a comprehensive list of measures that are currently under development, implemented for use, and have been removed from a CMS quality program or initiative.  The intuitive and user-friendly functions allow you to find measures quickly and to compile and refine sets of related measures.” The CMIT can be access on the CMS Quality Measures webpage.

30th – CMS Finalizes Changes to the CJR Model and Cancels the EPMs and Cardiac Rehabilitation Incentive Payment Model

In 2017, the EPMs, Cardiac Rehabilitation Incentive Payment Model and Changes to the CJR Model has seen a Final Rule, Interim Final Rule, a new Final Rule to ultimately end up with the EPMs and Cardiac Rehabilitation Models being cancelled and refinements made to the CJR Model resulting in the number of mandatory geographic areas being reduced from 67 to 34. Additional information can be found in the November 30th CMS Press Release



1st – Palmetto GBA Consolidates Local Coverage Determinations (LCDs) for Jurisdiction J (JJ)

On December 1st, Palmetto GBA posted an article on the JJ Transition Hub website describing the consolidation of LCDs for JJ. All active Cahaba LCDs were reviewed and consolidated with all active Palmetto GBA Jurisdiction M (JM) AB MAC LCDs. This post serves as notice of the LCDs that will be in effect in JJ following the transition from Cahaba to Palmetto GBA. Palmetto noted that no substantive LCD revisions were permitted ruing the JJ LCD consolidation process.

FY 2018 Hospital Acquired Conditions (HAC) Reduction Program Penalties Announced

Hospitals with a Total HAC Score greater than the 75th percentile (i.e. the worst-performing quartile) are subject to a 1 percent payment reduction. In December 2017, CMS posted Fiscal Year (FY) 2018 HAC Reduction Program information for each hospital on Hospital Compare

For FY 2018, the cutoff for the 75th percentile Total HAC Score is 0.3712. The difference between the first hospital with a score greater than the 75th percentile (0.3712) and the first of 751 hospitals to be penalized was 0.0004 with a Total HAC Score of 0.3716.

A December 21, 2017 Kaiser Health News Kaiser Health News Article written by Jordan Rau provides further breakdown and a list of the hospitals being penalized.

20th – OIG Recaps work in 2017

The OIG’s December Eye on Oversight recaps their work in 2017 and includes topics like reaching a $155 million civil settlement with an electronic health records vendor, releasing a data brief on opioids in Medicare Part A, and the largest healthcare fraud takedown in history. This video can be found on the OIG website at https://oig.hhs.gov/newsroom/video/index.asp#eoo-2017yir.

MMP, Inc. wishes all of our readers a Happy New Year and here is to the potential that is 2018.

Article by Beth Cobb

Beth Cobb, RN, BSN, ACM, CCDS, is the Manager of Clinical Services at Medical Management Plus, Inc.  Beth has over twenty-five years of experience in healthcare including eleven years in Case Management at a large multi-facility health system.  In her current position, Beth monitors, interprets and communicates current and upcoming Case Management / Clinical Documentation issues as they relate to specific entities concerning Medicare.  You may contact Beth 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.

green-iconWe are an environmentally conscious company, dedicated to living “green” both at work and as individuals.


1900 Twentieth Avenue South
Suite 220
Birmingham, AL 35209


This email address is being protected from spambots. You need JavaScript enabled to view it.