Knowledge Base Category -

Pre-orders have started for Apple’s soon to be released iPhone 12. Imagine what it would be like for devoted iPhone fans if the time from placing a pre-order to when you could actually hold one in your hands followed the CMS timeline for approval for new healthcare technologies. This would definitely not be the timeline for creating and maintaining a consumer base of people wanting the latest technology available in an iPhone.

In September, CMS released the proposed rule Medicare Coverage of Innovative Technology (MCIT) and Definition of Reasonable and Necessary Proposed Rule (CMS-3372-P). Per a related CMS Press Release, “Under current rules, FDA approval of a device is followed by an often lengthy and costly process for Medicare coverage. The lag time between the two has been called the “valley of death” for innovative products, with innovators spending time and resources on FDA approval, only to be forced to spend additional time and money on the Medicare coverage process.” Further, U.S. Department of Health and Human Services (HHS) Secretary Alex Azar, stated that “this new proposal would give Medicare beneficiaries faster access to the latest lifesaving technologies and provider more support for breakthrough innovations by finally delivering Medicare reimbursement at the same time as FDA approval.”

FDA Breakthrough Devices Program

The Breakthrough Devices Program is specifically for medical devices and device-led combination products meeting the following two criteria:

• The device provides more effective treatment or diagnosis of life-threatening or irreversibly debilitating human disease or conditions.
• The device must satisfy one of the following elements:
• It represents a breakthrough technology;
• No approved or cleared alternatives exist; or
• It offers significant advantages over existing approved or cleared alternatives.

Current Medicare Coverage Pathways

The MCIT pathway is being proposed because the prescribed statutory timeframes for the National Coverage Determination (NCD) process limits CMS’ ability to institute immediate national coverage policies for new, innovative medical devices. NCDs and Local Coverage Determinations (LCDs) take, on average, 9 to 12 months to finalize.

CMS details current Medicare coverage pathways in this proposed rule. Each pathway is highlighted in the following table. 

‍Proposed MCIT Coverage Pathway

The MCIT Coverage Pathway would be specifically for Medicare coverage of devices that are designated as part of the FDA Breakthrough Devices Program and are FDA market authorized. The pathway would involve a coordinated effort by CMS, the FDA and manufacturers as medical devices move through the FDA regulatory process for Breakthrough devices. This simultaneous effort will ensure Medicare coverage on the date of FDA market authorization for all devices that fall within a Medicare benefit category.

MCIT Pathway Proposals:

• The pathway would be voluntary and be initiated when a manufacturer notifies CMS of its intention to utilize the MCIT pathway.
• To be part of the MCIT Pathway, the device must be used in accordance with its FDA approved or cleared indication for use.
• Unlike the pathways in the above table, CMS is proposing that that MCIT Pathway would allow for immediate national coverage upon the date of FDA market authorization (that is the date the medical device received Premarket Approval (PMA); 510K clearance; or the granting of a De Novo classification request) for the breakthrough device.
• If CMS has issued an NCD for a specific breakthrough device, it would not be eligible for the MCIT pathway.
• Coverage would continue for up to 4 years, unless CMS determines the device does not have a Medicare benefit category as determined as part of the pathway process.
• Reasons that the MCIT pathway may end prior to 4 years includes circumstances where a device becomes subject to an NCD, regulation, statute, or if the device can no longer be lawfully marketed.

CMS intends to list MCIT pathway covered devices on the CMS website to ensure all stakeholders will be aware of what is covered through this pathway.

When an MCIT Coverage Pathway Ends, What Next?

At the end of the 4-year MCIT pathway, coverage of a device would be subject to one of the following three possible outcomes:

• NCD affirmative coverage, which may include facility or patient criteria;
• NCD non-coverage; or
• MAC discretion (claim-by-claim adjudication or NCD).

CMS encourages interested manufacturers to submit an NCD request during the third year of MCIT to allow time for NCD development. They are also seeking comments on whether or not a National Coverage Analysis should be opened if a MAC has not issued an LCD within 6 months of the expiration date of the MCIT period.

MCIT Device Eligibility

CMS is proposing that devices having received Breakthrough Device designation within 2 years of the date this proposed rule is finalized will be eligible for coverage for claims submitted on or after the effective date of the final rule. This group of devices would not be eligible for all 4 years of MCIT coverage as the 4 year period starts on the date of FDA market authorization. CMS anticipates two MCIT pathway participants in the first year based on the number of medical devices that received FY 2020 NTAP and were non-covered in at least one MAC jurisdiction by LCDs and related articles.

Proposal to Codify Definition of “Reasonable and Necessary”

In addition to the proposed MCIT Pathway, CMS is proposing to “codify in regulations the Program Integrity Manual definition of ‘‘reasonable and necessary’’ with modifications, including to add a reference to Medicare patients and a reference to commercial health insurer coverage policies.”

Proposal: “An item or service would be considered ‘‘reasonable and necessary’’ if it is— (1) safe and effective; (2) not experimental or investigational; and (3) appropriate for Medicare patients, including the duration and frequency that is considered appropriate for the item or service, in terms of whether it is:

• Furnished in accordance with accepted standards of medical practice for the diagnosis or treatment of the patient’s condition or to improve the function of a malformed body member;
• Furnished in a setting appropriate to the patient’s medical needs and condition;
• Ordered and furnished by qualified personnel;
• One that meets, but does not exceed, the patient’s medical need; and
• At least as beneficial as an existing and available medically appropriate alternative.”

Proposal: An item or service would be “appropriate for Medicare patients” under (3) if it is covered in the commercial insurance market, except where evidence supports that there are clinically relevant differences between Medicare beneficiaries and commercially insured individuals.

Proposal: An item or service deemed appropriate for Medicare coverage based on commercial coverage would be covered on that basis without also having to satisfy the bullets listed above.

CMS Seeking Comments to the Proposed Rule

In the world of CMS proposed rules, this one makes for a quick read at just 13 pages in the Federal Register. CMS is seeking comments on many aspects of this proposed rule and comments must be received by CMS no later than 5 p.m. on November 2, 2020.

Resources

CMS Press Release: CMS Acts to Spur Innovation for America’s Seniors https://www.cms.gov/newsroom/press-releases/cms-acts-spur-innovation-americas-seniors

CMS Fact Sheet: Proposed Medicare Coverage of Innovative Technology (CMS-3372-P)

https://www.cms.gov/newsroom/fact-sheets/proposed-medicare-coverage-innovative-technology-cms-3372-p

Proposed Rule (CMS-3372-P)

https://www.federalregister.gov/documents/2020/09/01/2020-19289/medicare-program-medicare-coverage-of-innovative-technology-mcit-and-definition-of-reasonable-and

To paraphrase a Barbara Mandrell song, I was a pumpkin spice latte fan before pumpkin spice was cool. In fact, two weeks ago I drank my first pumpkin spice latte for 2020. Did you know that one grande pumpkin spice latte from Starbucks has about 150mg of caffeine? That is enough caffeine to be equivalent to about two shots of expresso. To keep with musical references, Amy Grant once referred to expresso as being a “nap in a can” on one of her live albums. 

So why the focus on caffeine? The October 1st start date of the 2021 CMS Fiscal Year is just 22 days from today and CMS has been publishing updates effective October 1st at a pace worthy of a shot or two of expresso to keep you energized as you prepare for these changes. This article highlights recently released MLN articles providing guidance on updates effective October 1st.

Modify Edits in the Fee for Service (FFS) System when a Beneficiary has a Medicare Advantage (MA) Plan

• Article Release Date: July 21, 2020 – Revised July 21, 2020
• What You Need to Know: This article is “for providers, especially hospitals, submitting claims to Medicare Administrative Contractors (MACs) for Part A services provided to Medicare beneficiaries when a beneficiary’s Medicare Advantage (MA) plan becomes effective during the inpatient admission.”
• MLN MM11580: https://www.cms.gov/files/document/mm11580.pdf
• Change Request 11580: https://www.cms.gov/files/document/r10229CP.pdf
• Effective Date: October 1, 2020
• Implementation Date: October 5, 2020
  

Addition of the QW Modifier to Healthcare Common Procedure Coding System (HCPCS) Code 87426

• Article Release Date: July 24, 2020
• What You Need to Know: This article provides information about the addition of the QW modifier to HCPCS code 87426 [(Infectious agent antigen detection by immunoassay technique, (eg, enzyme immunoassay [EIAhttps://www.cms.gov/files/document/mm11927.pdf">https://www.cms.gov/files/document/mm11927.pdf
• Change Request 11927: https://www.cms.gov/files/document/r10231OTN.pdf
• Effective Date: June 25, 2020
• Implementation Date: October 5, 2020
  

New Waived Tests

• Article Release Date: July 28, 2020
• What You Need to Know: This article provides information about five new Clinical Laboratory Improvement Amendments of 1988 (CLIA) waived tests that have been approved by the FDA. These tests are marketed immediately after approval so CMS must notify the MACs of the new tests for accurate claims processing. “Note: MACs will not search their files to either retract payment or retroactively pay claims. However, MACs should adjust claims if you bring those claims to their attention.
• MLN Matters MM11916: https://www.cms.gov/files/document/mm11916.pdf
• Change Request 11916: https://www.cms.gov/files/document/r10230CP.pdf
• Effective Date: October 1, 2020
• Implementation Date: October 5, 2020
  

July 31, 2020: CMS Releases Inpatient Psychiatric Facility (IPF), Skilled Nursing Facilities (SNF), and Hospices FY 2021 Final Rules

CMS announced in a News Alert that they are “finalizing three Medicare payment rules that further advance our efforts to strengthen the Medicare program by better aligning payments for inpatient psychiatric facilities (IPF), skilled nursing facilities (SNF) and hospices.”   For fact sheets on each final rule, visit:

• IPF PPS – https://www.cms.gov/newsroom/fact-sheets/fiscal-year-2021-final-medicare-payment-and-policy-changes-inpatient-psychiatric-facilities-cms-1731
• SNF PPS – https://www.cms.gov/newsroom/fact-sheets/fiscal-year-2021-payment-and-policy-changes-medicare-skilled-nursing-facilities-cms-1737-f
• Hospices PPS -- https://www.cms.gov/newsroom/fact-sheets/fiscal-year-2021-hospice-payment-rate-update-final-rule-cms-1733-f

Inpatient Psychiatric Facilities Prospective Payment System (IPF PPS) Updates for Fiscal Year 2021

• Article Release Date: August 21, 2020
• What You Need to Know: This article provides updates related to the IPF PPS FY 2021 Final Rule including information about:
• Market Basket Update,
• FY 2021 Wage Index Update,
• IPF Quality Reporting Program,
• PRICER Updates,
• ICD-10 CM/PCS Updates,
• Cost of Living Adjustment (COLA) Adjustment, and
• Rural Adjustment.
• MLN MM11949: https://www.cms.gov/files/document/mm11949.pdf
• Change Request 11949: https://www.cms.gov/files/document/r10312CP.pdf
• Effective Date: October 1, 2020
• Implementation Date: October 5, 2020

Quarterly Update for Clinical Laboratory Fee Schedule and Laboratory Services Subject to Reasonable Charge Payment

• Article Release Date: August 7, 2020 – Revised August 24, 2020
• What You Need to Know: This article provides information about the quarterly update to the clinical laboratory fee schedule. On August 24th it was updated to reflect changes to Change Request (CR) 11937 that includes additional COVID-19 codes 86408, 86409, 0225U, 0226U, effective August 10, 2020. This CR also added codes 0015M and 0016M, effective October 1, 2020.
• MLN MM11937: https://www.cms.gov/files/document/mm11937.pdf
• Change Request 11937: https://www.cms.gov/files/document/r10318CP.pdf
• Effective Date: October 1, 2020
• Implementation Date: October 5, 2020

Quarterly Update to the Medicare Physician Fee Schedule Database (MPFSDB) – October 2020 Update

• Article Release Date: August 7, 2020
• What You Need to Know: This article provides information about the issuance of updated payment files in October of the 2020 MPFS.
• MLN MM11939: https://www.cms.gov/files/document/mm11939.pdf
• Change Request 11939: https://www.cms.gov/files/document/r10288cp.pdf
• Effective Date: January 1, 2020
• Implementation Date: October 5, 2020
  

October 2020 Quarterly Average Sales Price (ASP) Medicare Part B Drug Pricing Files and Revisions to Prior Quarterly Pricing Files – REVISED

• Article Release Date: July 2, 2020 – Revised August 14, 2020
• What You Need to Know: Changes made on August 14th were a revised Change Request (CR) release date, transmittal number and web address. All other information remained the same.
• MLN MM11854: https://www.cms.gov/files/document/MM11854.pdf
• Change Request 11854: https://www.cms.gov/files/document/r10306CP.pdf
• Effective Date: October 1, 2020
• Implementation Date: October 5, 2020
  

Medicare Part A Skilled Nursing Facility (SNF) Prospective Payment System (PPS) Pricer Update FY 2021

• Article Release Date: July 2, 2020 – Revised August 19, 2020
• What You Need to Know: This article was revised to reflect a revised CR 11859 which “shows that effective for Fiscal Year (FY) 2021, a 5 percent cap will be adopted and applied to all Skilled Nursing Facility providers on any decrease to a provider’s FY 2021 final wage index from that provider’s final wage index of the prior fiscal year (FY 2020).”
• MLN MM11859: https://www.cms.gov/files/document/MM11859.pdf
• Change Request 11859: https://www.cms.gov/files/document/r10314CP.pdf
• Effective Date: October 1, 2020
• Implementation Date: October 5, 2020
  

October 2020 Update of the Hospital Outpatient Prospective Payment System (OPPS)

• Article Release Date: August 28, 2020
• What You Need to Know:
• MLN MM11960: https://www.cms.gov/files/document/mm11960.pdf
• Change Request 11960: https://www.cms.gov/files/document/r10331CP.pdf
• Effective Date: October 1, 2020
• Implementation Date: October 5, 2020
  

October 2020 Integrated Outpatient Code Editor (I/OCE) Specifications Version 21.3

• Article Release Date: August 28, 2020
• What You Need to Know: This article provides information about the October 2020 version of the I/OCE instructions and specifications that Medicare uses.
• MLN MM11944: https://www.cms.gov/files/document/mm11944.pdf
• Change Request 11944: https://www.cms.gov/files/document/r10332cp.pdf
• Effective Date: October 1, 2020
• Implementation Date: October 5, 2020

October Quarterly Update for the 2020 Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) Fee Schedule

• Article Release Date: August 28, 2020
• What You Need to Know: This article provides details about the changes to the DMEPOS fee schedules that Medicare updates quarterly, when necessary, to implement fee schedule amounts for new and existing codes, as applicable, and apply changes in payment policies. Specific to the ongoing Public Health Emergency (PHE) due to the COVID-19 pandemic, “the October 2020 DMEPOS and PEN fee files continue to include the non-rural contiguous non-CBA 75/25 blended fees required by Section 3712(b) of the CARES Act signed into law on March 27, 2020.
• MLN MM11956: https://www.cms.gov/files/document/mm11956.pdf
• Change Request 11956: https://www.cms.gov/files/document/r10334CP.pdf
• Effective Date: October 1, 2020
• Implementation Date: October 5, 2020

Update to Hospice Payment Rates, Hospice Cap, Hospice Wage Index and Hospice PRICER for FY 2021

• Article Release Date: August 31, 2020
• What You Need to Know: This article provides updates in Change Request (CR) 11876 to hospice payment rates, wage index, Pricer, and aggregate cap amounts for Fiscal Year (FY) 2021.
• MLN Matters 11876: https://www.cms.gov/files/document/mm11876.pdf
• Change Request 11876: https://www.cms.gov/files/document/r10338cp.pdf
• Effective Date: October 1, 2020
• Implementation Date: October 5, 2020

Inpatient Rehabilitation Facility (IRF) Annual Update: Prospective Payment System (PPS) PRICER Changes for FY 2020

• Article Release Date: September 3, 2020
• What You Need to Know: This article is meant to notify IRFs about a new IRF PRICER software package to be released prior to October 1, 2020.
• MLN Matters: 11858: https://www.cms.gov/files/document/mm11858.pdf
• Change Request 11858: https://www.cms.gov/files/document/r10321cp.pdf
• Effective Date: October 1, 2020
• Implementation Date: October 5, 2020

As if all of this isn’t expresso worthy, the FY 2021 Inpatient Prospective Payment System Final Rule was released last Wednesday September 2nd. So grab yourself a pumpkin spice latte and enjoy while reading about MS-DRGs changes in the IPPS Final Rule discussed in a related article in this week’s edition of Wednesday@One.

MEDICARE TRANSMITTALS – RECURRING UPDATES

April 2020 Average Sales Price (AS) Medicare Part B Drug Pricing Files and Revisions to Prior Quarterly Pricing Files

• Article Release Date: March 20, 2020
• What You Need to Know: Article informs MACs about new and revised Average Sales Price (ASP) and ASP Not Otherwise Classified (NOC) drug pricing files for Medicare Part B drugs.
• MLN MM11701: https://www.cms.gov/files/document/mm11701.pdf

Quarterly Update to the National Correct Coding Initiative (NCCI) Procedure-to-Procedure (PTP) Edits, Version 26.2, Effective July 1, 2020

• Article Release Date: March 27, 2020
• What You Need to Know: This MLN article is a companion article to Change Request 11734 which providers the quarterly updated to the NCCI PTP edits. CMS advises making sure your billing staffs know the updates.
• MLN MM11734: https://edit.cms.gov/files/document/mm11734.pdf

July 2020 Average Sales Price (ASP) Medicare Part B Drug Pricing Files and Revisions to Prior Quarterly Pricing Files

• Article Release Date: March 27, 2020
• What You Need to Know: Related Change Request (CR) 11745 informs MACs about new and revised Average Sales Price (ASP) and ASP Not Otherwise Classified (NOC) drug pricing files for Medicare Part B drugs. The Centers for Medicare & Medicaid Services (CMS) supplies MACs with the ASP and NOC drug pricing files for Medicare Part B drugs on a quarterly basis. Payment allowance limits under the Outpatient Prospective Payment System (OPPS) are incorporated into the Outpatient Code Editor (OCE) through separate instructions that are available in Chapter 4, Section 50 of the Medicare Claims Processing Manual. Make sure your billing staffs are aware of these changes.
• MLN MM11745: https://www.cms.gov/files/document/mm11745.pdf

April 2020 Update of the Hospital Outpatient Prospective Payment System (OPPS)

• Article Release Date: April 7, 2020
• What You Need to Know: Change Request 11691 describes changes to and billing instructions for various payment policies implemented in the April 2020 OPPS update.
• MLN MM11691: https://www.cms.gov/regulations-and-guidanceguidancetransmittals2020-transmittals/r4544cp

Quarterly Update to the Fiscal Year 2020 Inpatient Psychiatric Facilities Pricer

• Article Release Date: April 10, 2020
• What You Need to Know: CR 11759 updates the Inpatient Psychiatric Facilities (IPF) Pricer software used in Medicare claims procession. This update includes updates to the comorbidity tables to include the new ICD-10 diagnosis code for COVID-19 (U01.7) effective for claims with discharges on or after April 1, 2020.
• MLN MM11758: https://www.cms.gov/files/document/mm11759.pdf

Quarterly Update to the Long Term Care Hospital (LTCH) Prospective Payment System (PPS) Fiscal Year (FY) 2020 Pricer

• Article Release Date: April 24, 2020
• What You Need to Know: CT 11742 updates the LTCH Pricer software. The new version include the payment policy for an LTCH that is subject to the Discharge Payment Percentage (DPP) payment adjustment described in CR 11616. CR 11742 also included new payment policy for COVID-19.
• MLN MM11742: https://www.cms.gov/files/document/MM11742.pdf

July 2020 Quarterly Update to the Inpatient Prospective Payment System (IPPS) Fiscal Year (FY) 2020 Pricer

• Article Release Date: April 24, 2020
• What You Need to Know: CR 11764 updates the FY 2020 IPPS Pricer software. This new version includes new payment policy for individuals diagnosed with COVID-19.
• MLN MM11764: https://www.cms.gov/files/document/MM11764.pdf

OTHER MEDICARE TRANSMITTALS

NCD (20.32) Transcatheter Aortic Valve Replacement (TAVR)

• Article Release Date: March 13, 2020
• What You Need to Know: Effective June 21, 2019, CMS will continued coverage of TAVR under Covered with Evidence Development (CED) when the procedure is provided for the treatment of symptomatic aortic valve stenosis and according to a FDA-approved indication for use with an approved device.
• MLN MM11660: https://www.cms.gov/files/document/mm11660.pdf

The Supplemental Security Income (SSI)/Medicare Beneficiary Data for Fiscal Year 2018 for Inpatient Prospective Payment System (IPPS) Hospitals, Inpatient Rehabilitations Facilities (IRFs), and Long Term Care Hospitals (LTCHs)

• Article Release Date: 3/13/2020
• What You Need to Know: This MLN article includes links to hospital specific data for determining adjustments to be made for caring for low-income patients (LIP).
• MLN MM11679: https://www.cms.gov/files/document/MM11679.pdf

Supplier Education on Use of Upgrades for Multi-Function Ventilators

• Article Release Date: April 3, 2020
• What You Need to Know: This article informs DME suppliers that effective immediately, you may provide and bill for multi-function ventilators described by code E0467 as an upgrade in situations where beneficiaries only meet the coverage criteria for a ventilator.
• MLN SE20012: https://www.cms.gov/files/document/se20012.pdf

New Waived Tests

• Article Release Date: April 17, 2020
• What You Need to Know: Change Request 11747 informs MACs of new Clinical Laboratory Amendments of 1988 (CLIA) waived tests by the FDA. These tests are marketed immediately after approval and as such, the CMS must notify MACs of the new tests for accurate claims processing. The following statement is included in the article: “Note: MACs will not search their files to either retract payment or retroactively pay claims; however, MACs should adjust claims if you bring those claims to their attention.”
• MLN MM11747: https://www.cms.gov/files/document/mm11747.pdf

REVISED MEDICARE TRANSMITTALS

New Medicare Beneficiary Identifier (MBI) Get It, Use It – Revised

• Article Release Date: March 19, 2020
• What You Need to Know: This article was revised to clarify that you need the beneficiary’s first name, last name, date of birth, and SSN to use MBI look-up tool. All other information remains the same.
• MLN SE18006: https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/SE18006.pdf

Healthcare Common Procedure Coding System (HCPCS) Codes Subject to and Excluded from Clinical Laboratory Improvement Amendment (CLIA) Edits

• Article Revised: March 24, 2020
• What You Need to Know: This article was revised to reflect an update CR 11604. CR 11640 informs the MACs about new HCPCS codes for 2020 that are subject to and excluded from CLIA Edits.
• MLN MM11640: https://www.cms.gov/files/document/mm11640.pdf

Quarterly Update to the National Correct Coding Initiative (NCCI) Procedure-to-Procedure (PTP) Edits, Version 26.1, Effective April 1, 2020

• Article Revised: March 25, 2020
• What You Need to Know: This article was revised to reflect a revised Change Request (CR) 11628. This revision had no impact on the substance of the article.
• MLN MM11628: https://www.cms.gov/files/document/mm11628.pdf

Implementation of Additional Requirements to add HCPC and CPT as Paired Items of Service for Prior Authorization and Medicare Claims Processing for Part A, Part B, DME, and Home Health and Hospice

• Change Request revised date: March 27, 2020
• What You Need to Know: Transmittal 2438, dated February 21, 2020 was rescinded and replaced with Transmittal 10021, dated March 27, 2020 to remove business requirement 11516.7 and to change the PA Program Indicator in the attachment Criteria Template. All other information remains the same.
• Transmittal 10021: https://www.cms.gov/files/document/r10021otn.pdf

April 1, 2020: Update to ICD-10-CM for Vaping Related Disorder and 2019 Novel Coronavirus (COVID-19)

• Article Revised: April 1, 2020
• What You Need to Know: This article was revised to reflect the update to Change Request (CR) 11623 where the new ICD-10-CM code for the 2019 Novel Coronavirus (COVDI-19) was added.
• MLN MM11623: https://www.cms.gov/files/document/MM11623.pdf

April 2020 Integrated Outpatient Code Editor (I/OCE) Specifications Version 21.1

• Article Revised: April 1, 2020
• What You Need to Know: CR 11680 provides the I/OCE instruction and specifications for the April 1, 2020 updates. This article was revised to reflect the CR revisions adding information to Table 1, including COVID-19 changes.
• MLN MM11680: https://www.cms.gov/files/document/MM11680.pdf

Quarterly Update for Clinical Laboratory Fee Schedule and Laboratory Services Subject to Reasonable Charge Pay

• Article Revised: April 6, 2020
• What You Need to Know: This article was revised to reflect revisions to Change Request 1168 where the section on the delay of the CLFS reporting period was removed and the following codes were added:
• 87635: added to HCPCS file, effective March 13, 2020
• Two new COVID-19 test codes (G2023 and G2024), effective March 1, 2020
• MLN MM11681: https://www.cms.gov/files/document/mm11681.pdf

Quarterly Update to the Medicare Physician Fee Schedule Database (MPFSDB) – April 2020 Update – Revised

• Article Revised: April 6, 2020
• What You Need to Know: The revision was made to reflect the revised CR 11661 to make MPFSDB file revisions for COVID-19.
• MLN MM11661: https://www.cms.gov/files/document/mm11661.pdf

Claim Status Category and Claim Status Codes Update

• Article Revised: April 10, 2020
• What You Need to Know: This MLN article was revised to reflect a revised Change Request (CR) 11467. Specifically the Uniform Resource Locators (URLs) references (page 2 in this article) in Background Section in the CR was revised.
• MLN MM11467: https://www.cms.gov/files/document/mm11467.pdf

April 2020 Updated of the Ambulatory Surgical Center (ASC) Payment System - Revised

• Article Revised: April 14, 2020
• What You Need to Know: CR 11694 describes changes to and billing instructions for various payment policies implemented in the April 2020 ASC payment system update. MLN 11694 was revised on April 14th due the revised CR that added information on Q4206 to the policy section of the CR (page 6 in the MLN article).
• MLN MM11694: https://www.cms.gov/files/document/mm11694.pdf

Remittance Advice Remark Code (RARC), Claims Adjustment Reason Code (CARC), Medicare Remit Easy Print (MREP) and PC Print Update

• Article Revised: April 16, 2020
• What You Need to Know: This article was updated to reflect a revised WPC website address in the background section of Change Request 11638 on page 2 of the article. All other information remained the same.
• MLN MM11638: https://www.cms.gov/files/document/mm11638.pdf

Implement Operating Rules – Phase III Electronic Remittance Advice (ERAA) Electronic Funds Transfer (EFT): Committee on Operating Rules for Information Exchange (CORE) 360 Uniform Use of Claim Adjustment Reason Codes (CARC), Remittance Advice Remark Codes (RARC) and Claim Adjustment Group Code (CAGC) – Update from Council for Affordability Quality Healthcare (CAQH) CORE

• MLN Article Revised: April 23, 2020
• What You Need to Know: This article was revised to reflect the revised Change Request (CR) 11490. Specifically, the CR updated the WPC website address. This change was made in this Article as well as changing the CR Release Date to April 23, 2020.

MEDICARE COMPLIANCE TIPS

Medicare Advance Written Notices of Non-Coverage MLN Booklet Revised

CMS noted in the April 9, 2020 MLNConnects eNewsletter that a revised Medicare Advance Written Notices of Noncoverage Medicare Learning Network Booklet is now available. This booklet provides guidance on how to complete the form and collect payment.

OTHER MEDICARE UPDATES

Fiscal Year (FY) 2021 Proposed Rules Released April 10, 2020: Skilled Nursing Facilities, Inpatient Psychiatric Facilities, and Hospice

On April 10th CMS released Fact Sheets announcing the FY 2021 Proposed Rules for Skilled Nursing Facilities, Inpatient Psychiatric Facilities and Hospice have been put on display in the Federal Register. In each of the Fact Sheets, CMS notes the proposed rules are being published consistent with legal requirements to update Medicare payment policies. CMS acknowledges that the entire healthcare system is focused on responding to the COVID-19 public health emergency. 

• FY 2021 Proposed Medicare Payment and Policy Changes for Skilled Nursing Facilities (CMS-1737-P) CMS Fact Sheet
• FY 2021 Proposed Medicare Payment and Policy Changes for Inpatient Psychiatric Facilities (CMS-1731-P) CMS Fact Sheet
• FY 2021 Hospice Payment Rate Update Proposed Rule (CMS-1733-P) CMS Fact Sheet

CMS is accepting comments on all three proposed rules through June 9, 2020.

March 18, 2020: Advanced Beneficiary Notice Form Update

CMS put the following announcement on the CMS Fee-for-Service ABN webpage:

“The ABN, Form CMS-R-131, is currently awaiting OMB approval for renewal. CMS will provide instructions when it does get approved.  In the meantime, continue to use the current form until further instruction is provided.”

March 27, 2020: KEPRO Releases Spring 2020, Special COVID-19 Edition Newsletter

The following topics are included in the Spring 2020 edition of KEPRO’s Case Review Connections newsletter:

• COVID-19 Guidance for Providers,
• Beneficiary Notice Delivery Guidance in Light of COVID-19,
• Frequently Asked Questions,
• An Immediate Advocacy Success Story; and
• Staff Education about BFCC-QIO Services.

April 16, 2020: CMS Fact Sheet: Fiscal Year (FY) 2021 Inpatient Rehabilitation Facilities (IRF) Prospective Payment System (PPS) Proposed Rule (CMS-1729-P)

Similar to the proposed rules released on April 10th, CMS indicates this proposed rule is being published consistent with legal requirements. They go on to indicate that “In recognition of the significant impact of the COVID-19 public health emergency, and limited capacity of health care providers to review and provide comment on extensive proposals, CMS has limited annual IRF rulemaking required by statute to essential policies including Medicare payment to IRFs, as well as proposals that reduce provider burden and may help providers in the COVID-19 response.” CMS is accepting comments on this proposed rule until June 15, 2020.

• FY 2021 IRF PPS Proposed Rule (CMS-1729-P) CMS Fact Sheet

April 21, 2020: CMS Interoperability and Patient Access Final Rule

This Final Rule was initially released on March 9th, 2020. However, it took until April 21st for the

unpublished version to be filed in the Federal Register. The Final Rule is scheduled to be published in the Federal Register on May 1, 2020. Following is an excerpt from a related CMS Press Release detailing how this Rule will impact hospitals:

“To further advance the mission of fostering innovation, the CMS final rule establishes a new Condition of Participation (CoP) for all Medicare and Medicaid participating hospitals, requiring them to send electronic notifications to another healthcare facility or community provider or practitioner when a patient is admitted, discharged, or transferred. These notifications can facilitate better care coordination and improve patient outcomes by allowing a receiving provider, facility, or practitioner to reach out to the patient and deliver appropriate follow-up care in a timely manner.”

Effective Date for New CoP

In the March 9th release of the Final Rule CMS stated the CoPs would be effective 6 months after the Rule was published in the Federal Register. However, the Final Rule currently on display indicates this date has been changed to indicate the new CoPs at 42 CFR Parts 482 and 485 will now be effective 12 months after the Final Rule is published in the Federal Register. This delay is due to CMS recognizing that hospitals, including psychiatric hospitals, and critical access hospitals, are on the front line of the COVID-19 public health emergency. You can learn more about this Final Rule on the CMS Interoperability and Patient Access final rule webpage.

April 24, 2020: 340B Hospital Survey

The 340B hospital survey is now available for hospitals paid under the OPPS, that were enrolled in the 340B program during calendar year Q4 2018 and/or Q1 2019. Both a detailed and "Quick Survey" method are available to submit 340B-acquired drug acquisition cost information to the Centers for Medicare & Medicaid Services through https://www.340bsurvey.com/survey. The survey closes on May 15, 2020.

Does it seem that people are less willing to make concessions these days than in the past? I am not sure if this is generally true, but if you look at our governments, it certainly seems so. In Britain, the government cannot agree or compromise to accomplish Brexit, and in our own country, the political parties cannot seem to agree on anything. They also seem completely unwilling to compromise or offer any concessions to the opposing viewpoint. Due to my cynicism from such an environment, I was a bit surprised to read in the 2020 Physician Fee Schedule (PFS) Final Rule  that CMS made 3 significant concessions concerning the requirements for the new modifiers for therapy services provided in whole or in part by a therapy assistant.

These new modifiers are mandated by the Balanced Budget Act (BBA) of 2018 which required that these modifiers:

• Be established by January 1, 2019;
• Be applied to claims lines for outpatient therapy services being furnished in whole or in part by a therapy assistant for dates of services beginning on January 1, 2020; and
• Effectuate a payment reduction for services furnished on and after January 1, 2022.

This is all in keeping with the major intent of the BBA provision that “for services furnished on or after January 1, 2022, payment for outpatient physical and occupational therapy services for which payment is made under sections 1848 or 1834(k) of the Act which are furnished in whole or in part by a therapy assistant must be paid at 85 percent of the amount that is otherwise applicable.”

This means beginning in 2022, therapy services furnished by physical or occupational therapy assistants will be paid less than services provided by therapists – 15% less to be specific. These services will be paid 85% of the usual applicable payment rate. For example, if a unit of therapeutic exercise (CPT 97110) is normally paid $35, when billed with one of the assistant modifiers, the payment would be $29.75. Remember the PFS therapy rates are dependent on your carrier jurisdiction and the multiple procedure payment reductions (MPPR) continue to apply also.

The modifiers that are required to be reported on therapy line items when the services are furnished in whole or in part by a therapy assistant beginning in 2020 are:

• CQ Modifier: Outpatient physical therapy services furnished in whole or in part by a physical therapist assistant.
• CO Modifier: Outpatient occupational therapy services furnished in whole or in part by an occupational therapy assistant.

These new modifiers will be reported alongside the GP and GO modifiers used to identify services furnished under a PT or OT plan of care, respectively. Other modifiers used for therapy services, such as the KX and 59 modifiers, should also continue to be reported. Thank goodness the functional limitation reporting modifiers are no longer required.

In the 2019 PFS Final Rule, CMS finalized a de minimis standard under which a service is considered 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. For example, for therapy services of 60 minutes, 10% would be 6 minutes and for the assistant to furnish more than 10% would be 7 minutes or more. This means once the PTA/OTA furnishes at least 7 minutes of the service, the CQ/CO modifier would be required to be added to the claim for that service. Untimed codes include services such as evaluative services, group therapy, and supervised modalities. Although assistants cannot perform an evaluation or re-evaluation, they can assist the therapists by performing clinical labor tasks such as obtaining vital signs, providing self-assessment tools to the patient and verifying their completion.

So, what are the concessions CMS made concerning the new therapy modifiers?

• CMS agreed with commenters that the time when a therapist and a therapist assistant furnish services to the same patient at the same time should not be counted as part of the assistant time. This means the time spent by a PTA/OTA furnishing a therapeutic service “concurrently,” or at the same time, with the therapist will not count for purposes of assessing whether the 10 percent standard has been met. The final policy is that only the minutes that the PTA/OTA spends independent of the therapist will count towards the 10 percent de minimis standard.

• CMS proposed, for billing purposes, that each outpatient therapy service that is subject to the 10 percent de minimis standard would be identified on the claim by a single procedure code, for both untimed codes and codes described in 15-minute-unit increments. Commenters pointed out the 15-minute code issue, so CMS finalized a revised definition of a service to which the de minimis standard is applied to include untimed codes and each 15-minute unit of codes described in 15-minute increments as a service. This revised definition will allow the separate reporting, on two different claim lines, of the number of 15-minute units of a code to which the therapy assistant modifiers do not apply, and the number of 15-minute units of a code to which the therapy assistant modifiers do apply.

For a 15-minute increment that equals 1 unit of a timed code, the assistant would have to furnish 3 or more minutes of the treatment to meet the 10% de minimis standard. If a PTA independently furnishes 8 consecutive minutes of therapeutic exercises to a patient who receives a total of 45 minutes of ther ex (therapist provides the other 37 minutes of ther ex), then the hospital would bill 2 units of CPT 97110 without the CQ modifier and 1 unit of CPT 97110 with the CQ modifier.

• CMS proposed to add a requirement that the treatment notes explain, via a short phrase or statement, the application or non-application of the CQ/CO modifier for each service furnished that day. CMS agreed that the addition of narrative phrases for each service could be duplicative of existing documentation requirements so they did not finalize this requirement. Neither does the documentation have to specify therapist and therapy assistant minutes.

However, CMS does expect the documentation in the medical record to be sufficient to know whether a specific service was furnished independently by a therapist or a therapist assistant, or was furnished “in part” by a therapist assistant, in sufficient detail to permit the determination of whether the 10% standard was exceeded.

Particularly related to number 1 and 2 above, CMS intends to provide further detail regarding examples of clinical scenarios to illustrate their final policies regarding the applicability of the therapy assistant modifiers through information that will be posted on the cms.gov website. Check the CMS therapy website at https://www.cms.gov/Medicare/billing/therapyServices/index for updates.

The modifier reporting and future payment reductions do not apply to critical access hospitals (CAHs) or to other providers that are not paid based on PFS rates. It also does not apply to outpatient therapy services that are furnished by, or incident to the services of, physicians or nonphysician practitioners (NPPs). This is because only therapists and not therapy assistants can furnish outpatient therapy services incident to the services of a physician or NPP.

Bottom line for hospitals – be sure to have the new therapy assistant modifiers set up and processes in place to get them appended to line item therapy services. Apply the modifiers:

• To all therapy services’ billing codes that are furnished in whole by therapy assistants,
• To untimed therapy services’ billing codes when an assistant independently furnishes more than 10% of the service (time of service divided by 10, rounded to the nearest whole integer, plus one minute)
• To timed 15-minute increments of a timed-code service when the assistant independently furnishes 3 minutes or more of a 15-minute service (for services > 8 minutes, but < 23, determine 10% as described above for untimed codes, i.e. 8-14 minutes – 2 minutes Assistant time; 15-23 minutes – 3 minutes Assistant time).

This last explanation of assistant time for timed codes is my understanding from the discussion in the final rule. I will be looking for more examples from CMS as promised to verify my understanding is correct. I definitely concede that Medicare rules can be difficult to understand and follow.

My youngest son got married earlier this month, and I have already conveyed to him and his bride my desire for more grandchildren. Grandkids are such fun because you can love on them and spoil them, then turn them back over to their parents for the serious stuff. A friend of mine has a one-year old granddaughter and I love to spend time with her. She is currently learning the word “no,” and I get to sit back and smile as it is obvious that she knows what it means but pretends she doesn’t. That slight hesitation and determined expression are “cute” from my perspective, but frustrating for her parents as she proceeds with her actions, undeterred by their instruction of “No!”

Do you think the judicial system and affected parties are frustrated by CMS’s decisions to go forward with certain actions when the judicial system has given the instruction of “no?” Maybe CMS is more like teenagers than babies, because they are old enough to argue, and are putting forth appeals, the potential to appeal, and alternative options as they proceed with their original actions. The 2020 Outpatient Prospective Payment System (OPPS) Final Rule was released Friday, November 1, 2019 and CMS is continuing for 2020 a couple of policies the courts have already found to be inappropriate.

First is the reduction in payment for clinic visits performed in excepted off-campus provider-based departments (PBDs). A little history here – in November 2015, Congress passed a law to pay “new” off-campus hospital provider-based departments that began furnishing and billing for services on or after November 2, 2015 at a different, lower payment rate than that of OPPS. This was done to address concerns about higher payments for services provided in hospital outpatient departments than the lower payments for the same services provided in a physician office setting. Hospitals were instructed to report the services in these non-excepted off-campus PBDs with a PN modifier and CMS determined to pay these under the physician fee schedule at 40% of the OPPS rate (a payment reduction of 60%). Services provided in excepted off-campus PBDs and reported with the PO modifier continued to be paid at OPPS rates at that time. That is until 2019, when CMS decided to expand site-neutrality payments further to include clinic visits (HCPCS code G0463) provided in excepted off-campus PBDs. They phased in the 60% payment reduction over two years, with a 30% reduction for 2019 and the full 60% reduction in 2020 – this makes the payment for clinic visits at all off-campus PBDs the same as the physician fee schedule payment for non-excepted PBD services of 40% of OPPS payment rates.

CMS claims they are “removing the payment differential that drives the site-of-service decision and, as a result, unnecessarily increases service volume.” They further claim they are doing this under authority of a certain section of the Social Security Act that gives them power “to adopt a method to control unnecessary increases in the volume of covered outpatient department services.” They are also implementing this payment reduction in a “non-budget neutral manner” which means the costs savings to the Medicare program will not be redistributed back to hospitals. So far, the courts have not agreed with CMS on their authority to implement this payment reduction policy.

On September 17, 2019, the United States District Court for the District of Columbia entered an order vacating the portion of the CY 2019 OPPS/ASC final rule that adopted the payment reduction for clinic visit services furnished by excepted off-campus PBDs. In October, the district court denied CMS’s request for stay and entered final judgment. CMS acknowledges the court’s decision and states they are “working to ensure affected 2019 claims for clinic visits are paid consistent with the court’s order.” Despite these statements, CMS chose to proceed with the second year of the two-year phase-in of the clinic visit policy for 2020. This means for CY 2020, clinic visits (G0463) provided in excepted off-campus PBDs and billed with the PO modifier will be paid at 40% of the OPPS payment rate. CMS states they have appeal rights and are still considering whether to appeal the final judgement or not.

The second policy for which the courts have issued a negative opinion is the payment of drugs purchased through the 340B program at Average Sales Price (ASP) minus 22.5%. The district courts have found that for both the 2018 and 2019 payment reductions, CMS exceeded their statutory authority by making such a large adjustment in payment rate. The case is currently under appeal from CMS and although they are requesting comments on options to remedy the underpayments of those years, they are also proceeding for 2020 with the same reduced payment amount of ASP-22.5% for drugs purchased through the 340B program including such drugs in a non-excepted off-campus PBD.

Since this policy was implemented in a budget-neutral manner (money saved was redistributed to all OPPS hospitals) and a remedy is “no easy task, given Medicare’s complexity,” the courts have remanded the issue to HHS to devise an appropriate remedy while also retaining jurisdiction. There is abundant discussion, comments and responses in the Final Rule about possible options to address the underpayments. As part of one such remedy, CMS is conducting a 340B hospital survey to collect drug acquisition cost data for CY 2018 and 2019. Since the district court has acknowledged that CMS may base the Medicare payment amount on average acquisition cost when survey data are available, it is obvious in the FR that CMS expects the survey data to show that ASP minus 22.5% was a conservative adjustment that overcompensates hospitals. If so, this remedy would get CMS out of their bind and possibly allow the current reduced payment rate to stand. The Final Rule does offer other options for consideration.

For other drugs and biologicals, CMS finalized the following policies:

• A packaging threshold of $130 – this means Medicare will package items with a per day cost less than or equal to $130, and identify items with a per day cost greater than $130 as separately payable unless they are policy-packaged (such as anesthesia, intraoperative items, and drugs that function as supplies, etc.)
• A payment rate of ASP plus 6% for pass-through and separately payable non-pass-through drugs other than those purchased through the 340B program
• Payment rate of Wholesale Acquisition Costs (WAC) plus 3% for drugs paid under WAC (such as when ASP data is not available)

Like stubborn children, the policies of the OPPS Final Rule show that just because CMS has been told “no” does not mean they plan to change their ways. We will be addressing other policies and decisions from the OPPS Final Rule in future articles in this newsletter.

Over the past few weeks, articles in our Wednesday@One newsletter have addressed some of the new and revised policies from the 2020 Medicare Outpatient Prospective Payment System (OPPS) Final Rule. One such article last week discussed the continuation of two policies that the courts have already found to be outside of CMS’s authority – 1) the second year and further decrease in payment rates for outpatient clinic visits in excepted off-campus provider-based departments to the same rate (40% of OPPS rates) as paid for services in nonexcepted off-campus PBDs and 2) payment of separately payable drugs purchased through the 340B program at average sales price (ASP) minus 22.5%. This article will examine the changes in the level of supervision required for hospital outpatient therapeutic services and the new requirement for prior authorization for select cosmetic procedures. The change in supervision requirements is a relief for hospitals, especially critical access and small rural hospitals. Unfortunately, the prior authorizations are an added burden on hospitals, regardless of how CMS tries to couch it.

Level of Supervision of Outpatient Therapeutic Services in Hospitals and Critical Access Hospitals (CAHs)

Around 2010 and in subsequent years, CMS “clarified” in the OPPS final rules, that they expected direct supervision of therapeutic services in a hospital outpatient setting.  Direct supervision in a hospital was defined to mean that a physician was immediately available to direct or take over performance of the procedure. Due to the difficulties in meeting this requirement, CMS or Congress have continually had a nonenforcement rule for CAHs and small rural hospitals for this policy, the latest of which is expiring December 31, 2019. You can read more about the direct supervision requirements and where we currently stand in a prior Wednesday@One article.

In the 2020 OPPS Final Rule, CMS finalized their proposed policy to change the “generally applicable minimum required level of supervision for hospital outpatient therapeutic services from direct supervision to general supervision for services furnished by all hospitals and CAHs.” General supervision means that the procedure is furnished under the physician’s overall direction and control, but that the physician’s presence is not required during the performance of the procedure. CMS took this action to reduce the burden for outpatient hospital providers, to allow more flexibility to provide medical care, and to eliminate what has in effect been a two-tiered system of supervision levels between CAHs/small rural hospitals and all other hospitals. CMS feels comfortable changing the required level of supervision for hospital outpatient therapeutic services because:

• CMS is not aware of any supervision-related complaints from patients or of any data or information from providers indicating the quality of care for services furnished under general supervision was affected,
• There are Medicare Conditions of Participation (CoPs) and State and federal laws that require physician direction and supervision of hospital services to ensure the safety, health, and quality standards of outpatient therapeutic services,
• Hospitals and physicians can decide to furnish direct supervision for services when they believe a higher level of supervision is necessary to ensure the quality and safety of the procedure and to protect the patient from complications that might occur,
• CMS retains the ability to change the supervision level of an individual hospital outpatient therapeutic service or the default minimum level to a more intensive level of supervision, and
• CMS plans to monitor care furnished to Medicare beneficiaries to determine if there is any decline in the quality of therapeutic outpatient services provided as a result of this policy.

This policy becomes effective January 1, 2020 and will remain in place for future years unless modified by later notice and comment rulemaking.

Prior Authorization for Select Hospital Outpatient Services

As part of their responsibility to protect the Medicare Trust Funds, CMS routinely monitors the utilization of services. They have identified several surgical procedures with higher than expected volume increases that could be potentially noncovered by Medicare due to their cosmetic nature. In order to manage the growth of Medicare spending and control unnecessary increases in the volume of hospital outpatient department (OPD) services, CMS is implementing a policy for the prior authorization of certain procedures to “reduce the instances in which Medicare pays for these services when they are merely cosmetic and not medically necessary.”

• The affected procedures are blepharoplasty, botulinum toxin injections, panniculectomy, rhinoplasty and vein ablation. A listing of the affected CPT codes can be found in the final rule. (See page 316 of the 2020 OPPS Final Rule pdf.)
• The requirement would begin for dates of service on or after July 1, 2020.
• Prior authorization is a process through which a request for provisional affirmation of coverage is submitted to Medicare or its contractors for review before the service is provided to the patient and before the claim is submitted.
• The PA request should include all documentation necessary to show that the service meets applicable Medicare coverage, coding and payment rules.
• Claims submitted for services that require a PA that have not received a provisional affirmation of coverage from Medicare would be denied unless the provider is exempt.
• Claims associated with the denied service, such as anesthesiology services, physician services, and/or facility services will also be denied.
• Upon submission of a PA request, CMS or its contractors would issue a decision (affirmative or non-affirmative) within 10 business days.
• Providers can request an expedited review if a delay could seriously jeopardize the patient’s life, health or ability to regain maximum function and a decision will be rendered within 2 business days. Documentation supporting the risk of serious jeopardy must be submitted with the request for an expedited PA.
• Exemption Process - CMS may elect to exempt providers from the PA process who achieve a PA affirmation threshold of at least 90% during a semiannual assessment. This exemption could be removed if the provider subsequently has a rate of non-payable claims greater than 10%.
• A non-affirmation PA decision is not appealable, but the provider will receive a detailed explanation as to why the request was non-affirmed and can resubmit an unlimited number of requests. Appeal rights exist once a claim is denied.
• There will be more sub-regulatory guidance before the requirement becomes effective, but the final rule indicates either the hospital or the physician may submit the PA request, though the hospital is ultimately responsible for ensuring this condition of payment is met.
• A unique tracking number (UTN) corresponding to the PA decision must be included on the OPD claim.

CMS argues this is not an additional burden on hospitals since no new documentation is required beyond what should already be present in the record and the hospital is just having to submit the records before the procedure instead of afterwards as they would have to do in the case of a Medicare medical review. Everyone knows it will be an additional burden, but the good news is that hospitals are used to PA requirements from most other payers, it causes the hospital to get the required documentation together before providing the service, and it likely will prevent some inappropriate payments for cosmetic procedures that do not meet Medicare’s medical necessity requirements.

So, a little relief for some, a little burden for others – is that a wash?

Back in 2017, I wrote the section below about changes to the laboratory date-of-service policy changes from the 2018 OPPS Final Rule. The importance of laboratory date of service (DOS) requirements is that they are used to determine whether a hospital bills Medicare directly for a clinical diagnostic laboratory test (CDLT) or whether the laboratory performing the test bills Medicare. Remember, most CDLTs are conditionally packaged under OPPS, and are only paid separately to the hospital when they are: (1) the only service provided to a beneficiary on a claim; (2) considered a preventive service; (3) a molecular pathology test; or (4) an advanced diagnostic laboratory test (ADLT) that meets certain criteria. Preventive services, molecular pathology tests, and ADLTs are assigned an OPPS status indicator (SI) of “A” and paid under the Clinical Lab Fee Schedule (CLFS). CDLTs with an SI of “Q4” are paid separately under the CLFS when they are the only types of services on the claim, but payment is bundled when they appear with other outpatient services.

Excerpt from Prior Wednesday@One Article on Laboratory Date of Service Rule

“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 (2017) 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 (from the 2018 OPPS Final 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.”

Although the “new” lab DOS rule from the 2018 OPPS Final Rule described above was originally set to be implemented July 2, 2018, many hospitals and laboratories reported to CMS they were having administrative difficulties implementing the DOS exception. For that reason, CMS has repeatedly exercised enforcement discretion regarding the new rule, with the latest enforcement discretion in effect until January 2, 2020.

Because of continued concerns about the readiness of labs and hospitals to implement the new rule and additional concerns that some entities performing molecular pathology testing subject to the laboratory DOS exception, such as blood banks and blood centers, may not be enrolled in the Medicare program and may not have established a mechanism to bill Medicare directly, CMS is rethinking this DOS rule. In the 2020 OPPS Proposed Rule, they are seeking comments on three options for potential changes to the laboratory DOS exception.

1. Changing the Test Results Requirements – Under this option, the test would be considered a hospital service unless the ordering physician determines that the test does not guide treatment during a hospital outpatient encounter.

2. Limiting the Laboratory DOS Exception to ADLTs

3. Excluding Blood Banks and Blood Centers from the Laboratory DOS Exception

These options would only affect the new lab DOS exception put forth in the 2018 OPPS Final Rule that applies to molecular pathology tests and ADLTs. The basic lab DOS rules and the 14-day rule DOS exception and the chemotherapy sensitivity test DOS exception would not be affected.

I encourage hospitals and laboratories affected by these date of service rules to read the discussion in the Proposed Rule and to submit comments to CMS. (Lab DOS Policy section begins on page 201 of 247 pages of the pdf printed version.)

A recent story by National Public Radio (NPR) discussed the delay in the implementation of the law requiring physicians to consult clinical guidelines before ordering certain imaging tests. The story notes that critics believe the delay has resulted in unnecessary costs and radiation exposure. I am not agreeing or disagreeing with any of the concerns raised by the story, but I want to point out a few things I know based on my understanding of the new requirements and my experience in healthcare. First, not all physicians order unnecessary tests. The article quotes studies that have found widespread overuse, including one study that reported 26% of the CTs and MRIs they reviewed were inappropriate. However, this was at a large academic medical center, so hopefully most physicians use their training to appropriately order advanced imaging exams.

A fallacy in the story in my opinion is how easy the new process will be – “4 clicks on the computer – or less than a minute.” I am skeptical that the ordering physician’s process will be that easy and there are numerous requirements on the back end, i.e. the performing entity and the interpreting professional claim requirements. Beginning July 1, 2018 through December 31, 2019, providers could voluntarily participate in the program. January 1, 2020 through December 31, 2020 is the Educational and Operations Testing Period in which providers are encouraged to participate, but claims will not be denied. These voluntary and testing periods are beneficial to providers to work out the kinks in what is an anything-but-simple process.

On July 26, 2019, CMS released a transmittal that details the requirements for the Testing Period in 2020. The basic premise of the program - Appropriate Use Criteria (AUC) for Advanced Diagnostic Imaging is:

Step One – When an advanced imaging service is ordered for a Medicare beneficiary, the ordering professional must consult a qualified Clinical Decision Support Mechanism (CDSM), an interactive, electronic tool that assists practitioners in making the most appropriate treatment decision for a patient’s specific clinical condition. The CDSM will provide the ordering professional with a determination of whether the order adheres to AUC, does not adhere to AUC, or if there is no AUC applicable (for example, no AUC is available to address the patient’s clinical condition).

Step Two – The ordering physician must communicate the status and outcome of use of the CDSM to the furnishing entity and physician.

Step Three – The furnishing providers and practitioners must report on their Medicare claim, modifiers describing the CDSM status and decision, if applicable, and when appropriate, a HCPCS indicating which CDSM was used.

The AUC program applies to:

• Advance imaging services such as computed tomography (CT), Positron emission tomography (PET), Nuclear medicine (NM), and Magnetic resonance imaging (MRI). The specific CPT/HCPCS codes affected are listed in the transmittal.
• The following settings:
• Physician offices
• Hospital outpatient departments (including emergency departments)
• Ambulatory Surgical Centers (ASCs)
• Independent diagnostic testing facilities
• Services paid under the Medicare Physician Fee Schedule (MPFS), the Hospital Outpatient Prospective Payment System (OPPS), or the Ambulatory Surgical Center (ASC) fee schedule

CMS does allow exceptions to participation in the program for ordering professionals with a significant hardship (such as limited access to the internet, etc.), patients with an emergency medical condition, and inpatients paid under Medicare Part A. It is confusing to me why applicable settings include hospital emergency departments when patients with an emergency medical condition are exempt. I have submitted a question to CMS for clarification regarding this and will share through the Wednesday@One newsletter any information I receive.

The modifiers to be reported (MA-MH and QQ) describe whether a CDSM was consulted or not and if not, the reason, or if so, the outcome/decision. The modifier is to be appended to the advanced imaging line item code on the claim. If a modifier is reported that indicates a CDSM was consulted (ME, MF or MG), then the claim should additionally contain a G-code (on a separate claim line) to report which qualified CDSM was consulted. These are informational-only G-codes that will not result in any payment, similar to the codes previously required for Functional Limitation Reporting for therapy services. Providers will have to deal with the same issues of submitting a $0 or minimal charge for these codes. The transmittal includes descriptions of all the modifiers and G-codes.

The plan at this time is to fully implement the requirements of AUC effective January 1, 2021. Upon full implementation, claims for the affected imaging services will be denied if they do not contain information regarding the ordering professional’s consultation with CDSM, or exception to such consultation. The ultimate goal of the program is to identify professionals with outlier-ordering patterns and require those practitioners to obtain prior authorizations for these tests. That requirement will likely be several more years down the road.

Just thinking of the processes hospitals and radiologists will have to put into place to make this happen makes my head spin. And that is all after the process the ordering practitioner goes through – (no need to worry about that though as it is only 4 clicks on the computer). Now is the time, during this Testing phase, for hospitals to develop and implement the necessary processes for this program – how will you receive, document, and internally communicate the information from the ordering practitioner; how will the correct modifier get on the claim line item; and how will the appropriate G-code get added to the claim. And still to be worked out is how institutional providers will report line level ordering physician information on the institutional claim since that capability is not currently available.

Sometimes there are good reasons for delaying a well-intentioned idea.