Knowledge Base Article

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

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

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

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

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

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

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

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

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