Knowledge Base Article

Finally fall weather has arrived in the South. The days are not too hot or too cold, so it is the perfect season to spend some time outdoors. Yesterday my dog and I went walking through the woods. Many of the paths had obstacles such as fallen trees or low hanging branches, so we would have to adjust and try a different route. This is also the time of year to get ready to adjust your paths with Medicare due to policy changes finalized in the 2018 Outpatient Prospective Payment System (OPPS) Final Rule that will become effective January 1, 2018.

Two of our Wednesday@One articles last week addressed finalized policies from the 2018 OPPS Final Rule – changes to the inpatient only list and payment reduction for separately payable drugs purchased through the 340B program.  This week we will examine some of the other significant policy changes from the 2018 OPPS final rule that will require some provider adjustments.

Drug Administration

Over the past several years, CMS has taken numerous actions to move the OPPS more toward an actual prospective payment system as the name indicates.  To this end, “the OPPS packages payments for multiple interrelated items and services into a single payment to create incentives for hospitals to furnish services most efficiently and to manage their resources with maximum flexibility.”  Specifically, over the past few years CMS has created and expanded comprehensive APCs which bundle payment for all adjunctive services into the payment for the primary service, packaged add-on codes, and conditionally packaged payment of ancillary services with a geometric mean cost of $100 or less.

Drug administration services have, up until this year, escaped the packaging concept as CMS examined various alternative payment policies for drug administration, including the associated drug administration add-on codes.  Finally, in 2018 CMS takes a baby step toward packaging of some drug administrative services.  They are conditionally packaging payment for some Level 1 and Level 2 drug administration services with a status indicator (SI) of “Q1” (see table below). Vaccine administration codes for preventive services (influenza, pneumococcal, and hepatitis B) and add-on drug administration codes, which still have an SI of “S,” are not packaged and will continue to be paid separately.  Vaccine admin codes 90471 and 90473, that are for administration of vaccines other than preventive services, are conditionally packaged. Since the Level 1 and 2 drug admin codes are conditionally packaged, they will be separately payable when not billed on the same claim as a HCPCS code with status indicator “S”, “T”, or “V”. The main impact from this drug admin packaging for hospitals will be for CPT code 96372 (therapeutic SQ/IM injection), and CPT codes 96401 and 96402 (chemotherapy SQ/IM injection codes).

As usual for packaged codes, CMS reminds hospitals that they are expected to report all HCPCS codes that describe the services provided, regardless of whether or not those services are separately paid or their payment is packaged. Although CMS did not package payment for add-on drug administration codes for 2018, they discussed the comments received and may propose more drug administration packaging in future years.

Lab Date of Service Policy

Probably the most difficult revised policy to explain and understand is the lab date of service policy. Laboratory date of service (DOS) rules start simple:

1. The DOS for clinical diagnostic laboratory services generally is the date the specimen is collected.
2. For archived lab specimens that are stored for more than 30 days before testing, the DOS is the date the specimen was obtained from storage.

Now this is where it starts getting complicated with what is known as the 14-day rule.

3. The DOS is the date the test was performed (instead of the date of collection) if the following conditions are met:
4. The test is ordered by the patient’s physician at least 14 days following the date of the patient’s discharge from the hospital;
5. The specimen was collected while the patient was undergoing a hospital surgical procedure;
6. It would be medically inappropriate to have collected the sample other than during the hospital procedure for which the patient was admitted;
7. The results of the test do not guide treatment provided during the hospital stay; and
8. The test was reasonable and medically necessary for the treatment of an illness.
9. Another 14-day rule applies to chemotherapy sensitive tests performed on live tissue under the same conditions as described above with only slight variation to the first condition:
10. The decision regarding the specific chemotherapeutic agents to test is made at least 14 days after discharge;

Both of these 14-day rules apply to hospital inpatients and outpatients and the key point is that the test is ordered at least 14 days after discharge.  These DOS requirements determine whether the hospital bills Medicare for a clinical diagnostic laboratory test (CDLT) or whether the laboratory performing the test bills Medicare directly. When the 14-day rule applies, laboratory tests are not bundled into the hospital stay, but are instead paid separately under Medicare Part B to the testing laboratory.

Stakeholders expressed concerns about the current DOS policy because it requires hospitals to bill for tests they did not perform and that may have no relationship to or bearing on treatment received by the patient while in the hospital and it creates billing difficulties for the hospital. CMS agreed with these concerns and modified the date of service rule for hospital outpatients for molecular pathology tests and advanced diagnostic laboratory tests (ADLTs) that are not packaged under OPPS.  These types of lab test have a Status Indicator of “A” on Addendum B.

The new rule states that in the case of a molecular pathology test or an ADLT, the DOS of the test must be the date the test was performed only if—

• The test was performed following a hospital outpatient’s discharge from the hospital outpatient department;
• The specimen was collected from a hospital outpatient during an encounter (as both are defined in 42 CFR 410.2);
• It was medically appropriate to have collected the sample from the hospital outpatient during the hospital outpatient encounter;
• The results of the test do not guide treatment provided during the hospital outpatient encounter; and
• The test was reasonable and medically necessary for the treatment of an illness.

This new exception to the laboratory DOS policy does not apply to ADLT or molecular pathology tests when performed on a specimen collected from a hospital inpatient.

This new laboratory DOS policy will enable laboratories performing ADLTs and molecular pathology tests excluded from the OPPS packaging policy to bill Medicare directly for those tests, instead of requiring them to seek payment from the hospital outpatient department.  In fact, for molecular pathology tests and ADLTs meeting the above requirements, the DOS must be the date the test was performed and the test must be billed by the performing laboratory. Hospital laboratories cannot bill for these tests unless they perform them.

Supervision of OP Therapeutic Services

In the 2009 OPPS final rule, CMS clarified that direct supervision is required for hospital outpatient therapeutic services covered and paid by Medicare that are furnished in hospitals as well as in provider-based departments (PBDs) of hospitals.  They further clarified in the 2010 rule that this supervision requirement also applies to Critical Access Hospitals (CAHs).  Beginning in March 2010 and extending through December 31, 2016, CMS or Congress implemented and extended nonenforcement of this supervision requirement for CAHs and small rural hospitals having 100 or fewer beds.  Due to concerns that some small rural hospitals and CAHs have insufficient staff available to furnish direct supervision, CMS is reinstating the non-enforcement instruction for CYs 2018 and 2019.  This nonenforcement again applies to CAHs and small rural hospitals with 100 or fewer beds to give them more time to comply with the supervision requirements for outpatient therapeutic services and to submit specific services to be evaluated by the HOP Panel for a recommended change in the supervision level.

Other 2018 OPPS Updates

• Skin Substitutes – CMS will continue to assign skin substitutes as low cost or high cost based on their unit or per day cost. In addition, a skin substitute product that does not meet high cost criteria for CY 2018, but was assigned to the high cost group for CY 2017, will remain assigned to the high cost group for CY 2018 in order to maintain payment consistency.
• Comprehensive APCs – There are no new C-APCs for 2018.
• Brachytherapy – CMS decided not to finalize a proposed policy to establish an edit that requires a brachytherapy treatment code when a brachytherapy insertion code is billed. They are deleting Composite APC 8001 (LDR Prostate Brachytherapy Composite) and assigning HCPCS code 55875 to existing C-APC 5627 (Level 7 Radiation Therapy). 
• SRS Treatment – CMS is deleting modifier CP for services that are adjunctive to the primary stereotactic radiosurgery services (SRS) treatment described by HCPCS codes 77371 and 77372, but reported on a different claim. They will continue to make separate payment for the 10 planning and preparation codes adjunctive to the delivery of SRS treatments when furnished within one month of treatment.
• Bone Marrow Aspiration and Biopsy – CMS is deleting the add-on code G0364 and creating a new code (38222) to describe a diagnostic bone marrow with both aspiration and biopsy. The new code is assigned a status indicator of “J1” to the same APC as the codes for a bone marrow aspiration or a bone marrow biopsy performed separately.

This is not of course all of the policy changes from the 2018 OPPS final rule, but maybe the ones you should consider first and make process changes if necessary. The path to billing for Medicare services continually requires adjustments.