Knowledge Base Category -
On July 25, 2018, CMS finally released the 2019 Proposed Rule for Outpatient Prospective Payment System (OPPS) for hospitals and Ambulatory Surgical Centers (ASCs) (link to Proposed Rule). Toward the end of the OPPS portion of the rule, there is a section titled “Proposed Nonrecurring Policy Changes” that could also be appropriately named, “Bad News for Hospital Off-Campus Provider-Based Departments.”
Background
Before discussing the proposed rule changes, let’s define some terms and examine some history concerning provider-based departments (PBDs). Provider based entities are created or acquired by the main hospital to furnish healthcare services and are under the ownership, administrative, and financial control of the main provider, in accordance with Medicare’s provider-based rules (42 CFR 413.65). PBDs may be on-campus, that is immediately adjacent to the hospital’s main buildings or within 250 yards of the main buildings, or off-campus, which are PBDs located beyond 250 yards from the main hospital buildings.
The concern over the past several years with PBDs is that they furnish the same types of services provided in a physician office setting but receive higher Medicare payments due to Medicare’s payment rules for outpatient hospital services versus physician fee schedule payments. The Medicare patient (beneficiary) payment share is also more for hospital-based services. In 2015, Section 603 of the Bipartisan Budget Act of 2015, addressed some of these concerns. The Act required “new” off-campus PBDs to be paid under a payment system other than the OPPS that would provide payments more equitable with physician office payments. “New” off-campus PBDs were those PBDs that did not furnish and bill for services prior to the date of enactment of the Act, November 2, 2015.
CMS created other exceptions to the application of Section 603 so the below entities and services are known as “excepted” provider-based departments. Excepted PBDs and excepted services continue to be paid under OPPS.
- On-campus PBDs
- “Grandfathered” off-campus PBDs – those furnishing and billing for services before November 2, 2015
- Services furnished by a dedicated emergency department
This means “non-excepted” PBDs are those new off-campus PBDs that do not meet one of the above exceptions and that will no longer be paid under OPPS.
To implement the requirements of Section 603, beginning January 1, 2017, services provided by non-excepted off-campus PBDs are paid under the Medicare Physician Fee Schedule (PFS) at special rates established for this provision. Currently, and proposed for 2019, these non-excepted services, that would previously have been paid under OPPS, are paid under the PFS at 40% of the OPPS payment rate. Providers append modifier “PN” to these non-excepted services to trigger the reduced payment rate. In addition to the reduced payment rates, OPPS packaging rules and most adjustments continue to apply to these non-excepted services – a double whammy, so to speak. Excepted off-campus PBD services are reported with modifier “PO” to allow CMS to gather data on the volume of these services, but as stated above, payment for excepted services is currently still made under the OPPS rates.
Continuing Concerns
In the proposed rule, CMS states, “the majority of hospital off-campus departments continue to receive full OPPS payment (including off-campus emergency departments and excepted off-campus departments of a hospital), which is often higher than the payment that would have been made if a similar service had been furnished in the physician office setting.” Also, CMS is extremely concerned about the continuing growth of outpatient hospital services. Despite the implementation of a prospective payment system (OPPS) in 2000 and increased packaging in recent years, “the OPPS has been the fastest growing sector of Medicare payments out of all payment systems under Medicare Parts A and B” which CMS attributes in large part to the payment differential between hospital-based services and physician office services. Here are a few quotes from the proposed rule that highlight CMS’s concerns:
“Total spending has been growing at a rate of roughly 8 percent per year under the OPPS, and total spending under the OPPS is projected to further increase by more than $5 billion from approximately $70 billion in CY 2018 through CY 2019 to nearly $75 billion.”
“We (CMS) are concerned that the rate of growth suggests that payment incentives, rather than patient acuity or medical necessity, may be affecting site-of-service decision-making. This site-of-service selection has an impact on not only the Medicare program, but also on Medicare beneficiary out-of-pocket spending.”
“A large source of growth in spending on services furnished in hospital outpatient departments (HOPDs) appears to be the result of the unnecessary shift of services from (lower cost) physician offices to (higher cost) HOPDs. We would consider these shifts in the sites of service unnecessary if the beneficiary can safely receive the same services in a lower cost setting but instead receives care in a higher cost setting.”
“One-third of the growth in outpatient volume from 2014 to 2015 was due to an increase in the number of evaluation and management (E&M) visits billed as outpatient services. This growth in part reflects hospitals purchasing freestanding physician practices and converting the billing from the Physician Fee Schedule to higher paying hospital outpatient department (HOPD) visits… From 2012 to 2015, hospital-based E&M visits per beneficiary grew by 22 percent, compared with a 1-percent decline in physician office–based visits.”
The Proposed Solutions, i.e. the Bad News
CMS is proposing to take action on several fronts to decrease what they see as unnecessary and excessive spending on services provided in off-campus PBDs.
The most significant of these proposals is capping the OPPS payment for clinic evaluation and management (E&M) visits for excepted off-campus PBDs at the PFS-equivalent rate. This means clinic visits (HCPCS code G0463) provided in excepted off-campus PBDs and currently billed with the PO modifier would be paid at the same reduced OPPS rate as those currently billed with the PN modifier by non-excepted PBDs. This would reduce the payment rate for clinic visits (G0463) in excepted off-campus PBDs from the proposed unadjusted Medicare OPPS payment rate of $116 to the reduced PFS (40% of OPPS) rate of $46. CMS also notes the beneficiary liability would correspondingly decrease from $23 to $9. This proposal is not budget-neutral and CMS estimates total savings of $760 million ($610 M Medicare saving and $150 M beneficiary savings).
A second cost-saving proposal is to expand the reduced payments for drugs purchased through the 340B Program to non-excepted off-campus PBDs. The implementation of reduced 340B drug payments last year did not affect the payments for drugs in non-excepted off-campus PBDs since they are not paid under OPPS. With this proposal, separately payable drugs (those with an OPPS status indicator of “K”) furnished and billed by non-excepted off-campus PBDs and purchased through the 340B program would be paid at ASP-22.5% for 2019 and subsequent years instead of the current payment of ASP+6%. In other words, the payment amount for SI “K” 340B drugs in non-excepted PBDs would decrease by 28.5%. Medicare would continue to pay ASP+6% for SI “K” drugs not purchased through the 340B program billed by non-expected off-campus PBDs.
In the last proposal to control increasing payments under OPPS for off-campus PBDs, CMS is proposing to limit the expansion of services in excepted off-campus PBDs. If an excepted off-campus PBD furnishes services from a clinical family of services that it did not furnish in a baseline period, those new services would be non-excepted and paid at the non-excepted reduced PFS payment rate effective January 1, 2019.
- CMS is proposing a one-year baseline period from November 1, 2014 through November 1, 2015, or one year from the first date the PBD furnished services under OPPS for those that began furnishing services after November 1, 2014.
- There are 19 clinical families of services defined by CMS and mapped to the applicable APCs in Table 32 in the Proposed Rule.
One last proposal related to PBDs that does not affect payment – YET – is the creation of a HCPCS modifier to be reported for outpatient hospital services furnished in an off-campus provider-based emergency department. Critical access hospitals (CAHs) would not be required to report this modifier.
It will be interesting to see which of these proposals for discouraging off-campus PBD services paid under OPPS will make it to the final rule. It is clear from reading the proposed rule that CMS is intent on limiting expansion and making payments more site-neutral. This is bad news for hospitals that have increased their bottom line through the expansion of off-campus services.
Debbie Rubio
MEDICARE TRANSMITTALS
Revisions to the Telehealth Billing Requirements for Distant Site Services - REVISED
Revised criteria that allows the GT modifier to be present on Method II CAH claim lines.
Quarterly Healthcare Common Procedure Coding System (HCPCS) Drug/Biological Code Changes – July 2018 Update - REVISED
The article is revised to show the Type of Service Code for CPT code 90739 remains as V.
Quarterly Update to the National Correct Coding Initiative (NCCI) Procedure-to-Procedure (PTP) Edits, Version 24.3, Effective October 1, 2018
Medical Review of Evaluation and Management (E/M) Documentation
Provides direction to Medicare’s medical review contractors on how to review claims where a medical student documented the E/M service.
Medicare Special Edition Articles
New Medicare Beneficiary Identifier (MBI) Get It, Use It – REVISED
This article was revised on July 11, 2018, to provide additional information regarding the format of the MBI not using letters S, L, O, I, B, and Z (page 2).
MEDICARE RULES
2019 Medicare Physician Fee Schedule (MPFS) Proposed Rule
Addresses changes to the Medicare physician fee schedule (PFS) and other Medicare Part B payment policies to ensure that our payment systems are updated to reflect changes in medical practice and the relative value of services, as well as changes in the statute.
https://s3.amazonaws.com/public-inspection.federalregister.gov/2018-14985.pdf
MEDICARE EDUCATIONAL RESOURCES
Medicare Billing for Cardiac Device Credits
Learn about billing Medicare inpatient and outpatient cardiac devices and reducing overpayments.
Beneficiary Notices Initiative (BNI) webpage – updated
New look for Medicare’s Notices webpage.
https://www.cms.gov/Medicare/Medicare-General-Information/BNI/index.html
Medicare Fee for Service Recovery Audit Program webpage – updated
New look for Medicare’s RAC webpage
Transition to New Medicare Numbers and Cards Fact Sheet
Medicare Quarterly Provider Compliance Newsletter – July 2018
Addresses common billing errors and other erroneous activities and provides guidance to help health care professionals address and avoid the top issues of the particular quarter.
MEDICARE FAST FACTS
Medicare Fast Facts resources this month include:
- Payment for Outpatient Services Provided to Beneficiaries Who Are Inpatients of Other Facilities
- Comprehensive Error Rate Testing: Arthroscopic Rotator Cuff Repair
- Proper Use of the KX Modifier for Part B Immunosuppressive Drug Claims
OTHER MEDICARE UPDATES
Contract Award for A/B MAC Jurisdiction F
CMS awarded the Jurisdiction F contract to Noridian, the current incumbent contractor for JF.
MEDICARE TRANSMITTALS
July 2018 Quarterly Average Sales Price (ASP) Medicare Part B Drug Pricing Files and Revisions to Prior Quarterly Pricing Files
CMS supplies MACs with the ASP and Not Otherwise Classified (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). Also see related content at PalmettoGBA - “The drug pricing files contain the payment amounts used to reimburse for Part B covered drugs for the applicable quarter of 2018. The payment amounts in the quarterly ASP files are 106 percent of the Average Sales Price (ASP) calculated from data submitted by drug manufactures (ASP X 1.06). The ASP rate must be adjusted before applying the 22.5 percent reduction (for 340B-acquired drugs).”
Claim Status Category and Claim Status Codes Update
HIPAA requires all covered entities to use only Claim Status Category Codes and Claim Status Codes approved by the National Code Maintenance Committee in the ASC X12 276/277 Health Care Claim Status Request and Response transaction standards adopted for electronically submitting health care claims status requests and responses. These codes explain the status of submitted claim(s).
July 2018 Update of the Hospital Outpatient Prospective Payment System (OPPS)
Changes and billing instructions for various payment policies implemented in the July 2018 OPPS update.
July 2018 Integrated Outpatient Code Editor (I/OCE) Specification Version 19.2
The I/OCE is being updated for July 1, 2018. The I/OCE routes all institutional outpatient claims (which includes non-OPPS hospital claims) through a single I/OCE.
MEDICARE SPECIAL EDITION ARTICLES
New Medicare Beneficiary Identifier (MBI) Get It, Use It
Explains ways you can get MBIs.
REVISED MEDICARE TRANSMITTALS
Diagnosis Code Update for Add-on Payments for Blood Clotting Factor Administered to Hemophilia Inpatients – REVISED
Revised to correct the code description for ICD-10-CM D68.32.
MEDICARE EDUCATIONAL RESOURCES
Medicare Fast Facts
Medicare Fast Facts resources this month include:
- Provider Minute Vide: The Importance of Proper Documentation
- Bill Correctly for Device Replacement Procedures
- Billing for Stem Cell Transplants
FEDERAL REGISTRY CMS RULES
Medicare Program; Changes to the Comprehensive Care for Joint Replacement Payment Model (CJR): Extreme and Uncontrollable Circumstances Policy for the CJR Model
Finalizes a policy that provides flexibility in the determination of episode spending for Comprehensive Care for Joint Replacement Payment Model (CJR) participant hospitals located in areas impacted by extreme and uncontrollable circumstances for performance years 3 through 5.
https://www.gpo.gov/fdsys/pkg/FR-2018-06-08/pdf/2018-12379.pdf
OTHER MEDICARE UPDATES
Hospital Appeals Settlement Process Update
May 8, 2018, CMS executed settlements with an additional 612 hospitals, representing approximately 72,000 claims.
FY 2019 ICD-10-PCS Procedure Codes
FY 2019 ICD-10-PCS procedure code updates including a complete list of code titles are posted on the 2019 ICD-10-PCS webpage.
FY 2019 ICD-10-CM Codes
FY 2019 ICD-10-CM code updates have been posted on the CDC website at: https://www.cdc.gov/nchs/icd/icd10cm.htm.
I love reading. And although people’s reading preferences vary, sometimes I read a book that is so well written and has such a great storyline that I have to recommend it to my friends. Unfortunately, a lot of my reading is not just for the fun of reading. I read numerous newsletters and government publications to stay current on the happenings of Medicare rules and regulations. Sometimes even this necessary reading leads to an article that I feel compelled to share with others because it clearly and thoroughly explains a Medicare issue. This week I must recommend the Palmetto GBA article on Resolution Tips for Overlapping Claims.
Overlapping claims can be sneaky. You don’t even know you have one until Medicare rejects your claim. This is because avoiding overlapping claims depends on the information you get from patients and other facilities or agencies and on correct billing by your facility as well as that of other Medicare providers. The basic rules are:
- A patient cannot be an inpatient in two different facilities at the same time,
- Outpatient services are included in inpatient stays with only a few exceptions,
- Some Medicare services (e.g. home health) include certain other outpatient services, and
- Hospice is responsible for all Medicare services related to the hospice condition except the professional services of the patient’s attending physician/practitioner.
The possibilities for overlapping claims is large – per the Palmetto article, “An overlapping situation may occur between hospitals for inpatient stays, which include [Inpatient Psychiatric Hospitals (IPH), Long Term Care Hospitals (LTCH), Inpatient Rehab Facilities (IRF), Critical Access Hospital (CAH)], hospitals for outpatient services, Skilled Nursing Facilities (SNFs), Home Health Agencies (HHAs), Hospice agencies, Outpatient Rehab Facilities (ORF), Comprehensive Outpatient Rehab Facilities (CORF), End Stage Renal Disease (ESRD) Facilities, or a combination of one provider type and another.”
Here are some tips I gleaned from this article specifically for hospitals on ways to avoid overlapping claims:
- Verify patient eligibility by questioning the patient/family carefully and by checking Medicare electronic eligibility systems.
- Establish a good relationship with the other providers in your area so that you can work together to resolve overlap situations.
- Ensure your discharge status code is correct. Coders need to accurately understand the discharge status codes and work with Case Managers if the record is unclear. Post-discharge follow-up with the patient may be required – did the patient start home health services as planned, was their nursing home stay approved as skilled, etc. Also understand that you will not always be aware of where the patient goes when they leave your hospital and will only find out when Medicare asks you to adjust your discharge status. It is appropriate to change your discharge status based on Medicare request, although I recommend keeping documentation of this in your medical record or independently verifying the patient’s post-discharge care.
- Know the billing rules when patients go from or to other inpatient facilities – when a patient is discharged and readmitted to an LTCH within 3 days, payment is made to the LTCH; IPFs and IRFs must use condition code 74 when a patient is admitted to a hospital but returns to their facility within 3 days.
- A patient cannot receive home health services or outpatient services during an inpatient stay. Any outpatient services provided to the patient during an inpatient admission must be bundled into the inpatient claim.
- Know and understand the 3-day payment window rule. All services the day of admission are bundled into the inpatient claim; all diagnostic services within 3 days of admission are bundled; and therapeutic services within 3 days of admission that are related to the reason for admission are bundled into the inpatient claim.
- Same-day readmissions to the same hospital are combined to one claim unless the reason for the second admission is unrelated to the reason for the first stay. In that case, you would report condition code B4 on the second inpatient claim.
- Understand consolidated billing rules for SNFs and home health agencies. Certain outpatient services are separately billable to Medicare when provided to a SNF or HH patient. See SNF Consolidated Billing and Home Health PPS for more information.
- Hospice overlaps can be especially challenging for hospitals. If your hospital has an outreach laboratory, testing on hospice patients should generally be billed back to the hospice. The Palmetto article offers the following guidance for all provider types overlapping hospice:
“Providers of all types whose claims are overlapping a hospice election should contact the Hospice agency to determine if the services are related to the terminal illness. If related, payment arrangements should be made with the hospice provider. Services that are not related to the terminal illness should be billed with a 07 Condition Code…. Providers who suspect that the hospice may no longer be in business and are unable to verify if their services are related, or if the hospice has failed to update the revocation indicator should contact their MAC for assistance.”
Overlapping claims can be sneaky, challenging and frustrating. Again, I recommend this Palmetto article for more complete information. Being more informed and prepared will not remove all the challenges of overlapping claims but knowing what to expect and how best to respond may relieve some frustrations.
Debbie Rubio
We often associate the term “it takes a village” with the raising of children. It is true that parents, grandparents, relatives, teachers, coaches, church members, healthcare providers, and/or others often play key roles in bringing up a physically and emotionally healthy, well-adjusted young person. But what brought the “it takes a village” phrase to my mind today was listening to a replay of Palmetto GBA’s webcast on Inpatient Psychiatric Facility (IPF) coverage and documentation requirements.
Palmetto likely offered this educational session in preparation for and in response to their Targeted Probe and Educate (TPE) medical review of DRG 885, Psychoses. This is a target review area for both Palmetto’s Jurisdictions - J and M. First Coast, the Medicare Administrative Contractor (MAC) for Jurisdiction N, also has a planned TPE review for this DRG. The Palmetto webcast reminded providers that other Medicare review entities such as the CERT contractor, Recovery Auditors, and the Office of Inspector General (OIG) could review inpatient psych or any other Medicare services.
According to the webcast, the “villagers” involved and their concerns and responsibilities for IPF services are listed below. Many tasks will involve the input of multiple staff and are a shared responsibility – more evidence that “it takes a village.”
Physicians
- Patient must be under the care of a physician
- Write admission and other orders for patient’s care
- Perform a psychiatric evaluation of the patient at admission to include
- Medical history and mental status
- Onset of illness and admission circumstances
- Patient attitudes and behaviors
- An estimate of intellectual functioning, memory functioning & orientation; and
- A descriptive inventory of patient’s assets
- Certify/recertify the need (medical necessity) for inpatient care, which includes
- Patient psychiatric condition severe enough to warrant inpatient care
- Need for active treatment
- Intensive, comprehensive, multimodal treatments exceeding the level and intensity of those that may be rendered in an outpatient setting
- Generally, an expectation of improvement of the patient’s condition or for diagnostic purpose
- Establish a treatment plan that includes
- Substantiated diagnosis
- Short-term & long-range goals
- Specific treatment modalities utilized
- Each treatment team member’s responsibilities
- Adequate documentation to justify diagnosis & treatment/rehabilitation activities carried out
- Document H&P, evaluations, examinations, treatment plan, progress notes, and discharge summary
Clinicians (Nurses, Social Workers)
- Perform and document assessments and interviews
- Provide and document treatments including description of service, content and purpose, patient’s response and correlation to treatment plan goals
Utilization Review, Social Services, Discharge Planning
- Appropriate utilization of patient benefit days and lifetime reserve days in appropriate setting
Billing
- Submit correct type of bill (TOB) with appropriate revenue and occurrence codes
- Special considerations for
- Admission source “D” for patients transferred from acute care hospital to their psych distinct part unit (prevents overpayment due to ER adjustment)
- One day payment window
- Interrupted stays and occurrence span code 74
- Services provided by other facilities during IPF stay
Coders
- Assignment of correct primary and secondary diagnosis codes to the highest degree of specificity
- Discharge status code
These are just some of the coverage and documentation requirements to support Medicare inpatient psychiatric services. I recommend providers who offer inpatient psychiatric services listen to this webcast (located on Palmetto’s Past Events webpage) whether you are in Palmetto’s jurisdictions or not. The information applies universally to all Medicare inpatient psych services. Palmetto also shared some of their findings from TPE reviews so far as well as some of the CERT findings. Providers need to pay special attention to make sure their records include:
- Physician’s orders for admission and other services. Be sure all orders include a legible signature, a date, and the author’s credentials. If signatures are illegible, send an attestation log with the documentation upon review.
- Valid and timely certifications and recertifications.
- An initial psychiatric evaluation at the time of admission or no later than 60 hours after admission
- Documentation that services and treatments are related to improving the patient’s condition
- A valid, individualized treatment plan that supports psychotherapy with type, amount, frequency, duration, diagnosis & anticipated goals
- Documentation of active treatments during billing period
- Complete and sufficient documentation
You may want to hold a town hall meeting for all the villagers to communicate, coordinate and understand their individual and shared responsibilities. Sometime it takes a village meeting to guide a village.
Debbie Rubio
The relationship between physicians and hospitals could be described as a symbiotic partnership, that is, a mutually beneficial relationship between different groups. Physicians need hospitals to provide the resources and personnel to care for their patients and hospitals need physicians to refer patients to the hospitals for such care when medically necessary. Physicians direct a patient’s care and decide when and what services are necessary. It also often falls on the physicians’ documentation to support that services and care provided and paid for by Medicare meet the requirements of being medically necessary. Unfortunately for hospitals, it is often their payment at risk if a physician provides a service in the hospital setting that is not medically necessary or fails to document sufficiently to support the medical necessity of the service. Because directing the patient’s care is the physician’s responsibility, many Medicare education resources about compliance are directed to the physicians. Likewise, hospitals must work with physicians to ensure services are appropriately provided and documented. Such is the case for ophthalmology services.
Though a number of ophthalmology services determined by the Office of Inspector General (OIG) to be at risk of “questionable billing” are more likely to be performed in a physician office setting, there are also services that could be performed in a hospital setting. Hospitals need to be aware of the concerns and requirements for these types of ophthalmology services.
A December 2014 OIG audit found that Medicare paid $22 million for ophthalmology claims in 2012 that were potentially inappropriate, according to national and local coverage requirements. The three eye conditions for which Medicare pays the most each year are cataracts, wet age-related macular degeneration (wet AMD), and glaucoma. The concerns for inappropriate payments related to these conditions are:
- Cataracts
- Medicare has a national requirement stating that it will not routinely cover more than one comprehensive eye examination and scan for beneficiaries whose only diagnosis was cataracts.
- It is medically impossible to perform more than one cataract surgery on the same eye because an eye’s natural lens will never grow back.
- Submitting disproportionately more claims for complex than standard cataract surgery.
- Wet AMD
- Some Medicare Administrative Contractors (MACs) have local coverage determinations (LCDs) limiting the number of wet AMD diagnostic or evaluation services for which a provider may bill annually.
- Medicare paid providers substantially more for treating wet AMD with the expensive biologic Lucentis instead of other biologic treatments that are similarly effective.
- Some MACs have LCDs specifying that Lucentis injections are not covered more frequently than once per month per eye. These guidelines are in keeping with the Food and Drug Administration (FDA)-approved dosing guidelines that Lucentis injections should be administered between once monthly and once every 3 months.
- Medicare has a national requirement that it covers each step of ocular photodynamic therapy only when both steps are performed on the same date. These steps are billed separately, but they must be performed within 30 minutes of one another.
- Glaucoma
- A national requirement states that Medicare covers either of two types of screening services once every 12 months for beneficiaries at high risk for glaucoma.
A September 2015 follow up OIG report found Medicare paid $171 million for services associated with the measures on which certain providers demonstrated questionable billing.
Prior to these OIG reports, the Recovery Auditors identified overpayments associated to outpatient hospital providers billing more than one unit of cataract removal for the same eye for the same date of service. CMS published MLN Special Edition Article SE1319 in response to these findings. It reminded providers,
“According to the “National Correct Coding Initiative (NCCI) Policy Manual for Medicare Services,” Chapter 8, Section D #3, cataract removal codes are mutually exclusive of each other and can only be billed once for the same eye. Because CPT codes describing cataract extraction (66830-66984) are mutually exclusive of one another, providers may not report multiple codes for the same eye even if more than one technique is used or more than one code could be applicable. Only one code from this CPT code range may be reported for an eye.”
The NCCI Policy Manual chapter and section noted above addresses 25 other correct coding guidelines for ophthalmology services of which providers should be aware.
For another ophthalmology service, CMS clarified in a 2005 ruling that a Medicare beneficiary may request insertion of a presbyopia-correcting intraocular lenses (IOLs) in place of a conventional IOL following cataract surgery. However, if the Medicare patient selects a presbyopia-correcting IOL, he/she is responsible for payment of that portion of the charge for the presbyopia-correcting IOL and associated services that exceed the charge for insertion of a conventional IOL following cataract surgery. The MLN Article describing this ruling included payment policies for facilities and physicians. The policy relevant to hospital services states:
- For an IOL inserted following removal of a cataract in a hospital, on either an outpatient or inpatient basis, that is paid under the hospital outpatient prospective payment system (OPPS) or the inpatient prospective payment system (IPPS), respectively;
- Payment for the IOL is packaged into the payment for the surgical cataract extraction/lens replacement procedure. Medicare does not make separate payment to the hospital for an IOL inserted following removal of a cataract.
- For a presbyopia-correcting IOL inserted following removal of a cataract in a hospital, on either an outpatient or inpatient basis, that is paid under the OPPS or the IPPS, respectively;
- The facility will bill for removal of a cataract with insertion of a conventional IOL, regardless of
- whether a conventional or presbyopia-correcting IOL is inserted.
- When a beneficiary receives a presbyopia-correcting IOL following removal of a cataract, hospitals and ASCs shall report the same CPT code that is used to report removal of a cataract with insertion of a conventional IOL.
- There is no Medicare benefit category that allows payment of facility charges for services and supplies required to insert and adjust a presbyopia-correcting IOL following removal of a cataract that exceed the facility charges for services and supplies required for the insertion and adjustment of a conventional IOL.
- There is no Medicare benefit category that allows payment of facility charges for subsequent treatments, services and supplies required to examine and monitor the beneficiary who receives a presbyopia-correcting IOL following removal of a cataract that exceed the facility charges for subsequent treatments, services and supplies required to examine and monitor a beneficiary after cataract surgery followed by insertion of a conventional IOL.
The article also addresses coding requirements, beneficiary liability and notification requirements for these services.
Both hospitals and physicians must be aware of and follow the Medicare requirements for providing and billing ophthalmology services. Working together to “get it right” keeps the relationship between physicians and hospitals mutually beneficial for both parties and for Medicare.
Debbie Rubio
MEDICARE TRANSMITTALS
Revisions to the Telehealth Billing Requirements for Distant Site Services
Implements requirements for billing modifier GT for Telehealth Distant Site Services. As of January 1, 2018, the GT modifier is only allowed on institutional claims billed by a Critical Access Hospital (CAH) Method II.
Implementation of Changes to the Pre-Payment Additional Documentation Request (ADR) Letters for Medical Review
https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2018Downloads/R2083OTN.pdf
Quarterly Update for Clinical Laboratory Fee Schedule and Laboratory Services Subject to Reasonable Charge Payment
Updates to Publication 100-04, Chapters 1 and 27, to Replace Remittance Advice Remark Code (RARC) MA61 with N382
MACs will use N382 in place of MA61 to communicate reject/denials for patient identifiers (HICN or MBI) in all remittance advices and 835 transactions. However, MACs will continue to use RARC MA61 only when/if communicating rejections/denials related to a missing/incomplete/invalid social security number.
Inpatient Prospective Payment System (IPPS) and Long-Term Care Hospital (LTCH) PPS Extensions per the Advancing Chronic Care, Extenders, and Social Services (ACCESS) Act Included in the Bipartisan Budget Act of 2018
Information and implementation instructions for:
- Section 50204 – Extension of Increased Inpatient Hospital Payment Adjustment for Certain Low-Volume Hospitals
- Section 50205 – Extension of the Medicare-Dependent Hospital (MDH) Program
- Section 51005 – Adjustments to the LTCH Site Neutral Payment Rate
Supervised Exercise Therapy (SET) for Symptomatic Peripheral Artery Disease (PAD) – REVISED
The article was revised on May 15, 2018, to clarify that one of the requirements of the SET program is it must be conducted in a hospital outpatient setting or in a physician’s office.
Quarterly Healthcare Common Procedure Coding System (HCPCS) Drug/Biological Code Changes – July 2018 Update – REVISED
A sentence is added to show that Part B payment for Q9995 includes the clotting factor furnishing fee.
Intent to Reopen
Provides instructions for contractors to: provide notification of the reopening process and to notify the provider or supplier of their intent to reopen a specific claim when requested documentation is received after a denial of the claim has been made.
https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2018Downloads/R796PI.pdf
Remittance Advice Remark Code (RARC), Claims Adjustment Reason Code (CARC), Medicare Remit Easy Print (MREP) and PC Print Update
Quarterly Update to the Medicare Physician Fee Schedule Database (MPFSDB) - July 2018 Update
MEDICARE COVERAGE UPDATES
International Classification of Diseases, Tenth Revision (ICD-10) and Other Coding Revisions to National Coverage Determinations (NCDs)
CR10622 makes coding and clarifying adjustments to the following NCDs:
- NCD 110.18 Aprepitant
- NCD 150.3 Bone Mineral Density Studies
- NCD 190.11 Prothrombin Time/International Normalized Ratio (PT/INR)
- NCD 220.6.16 Positron Emission Tomography (PET) for Infection/Inflammation
- NCD 220.6.17 PET for Solid Tumors
- NCD 220.13 Percutaneous Image-Guided Breast Biopsy
MEDICARE PRESS RELEASES
CMS Announces Agency’s First Rural Health Strategy
The agency’s first Rural Health Strategy intended to provide a proactive approach on healthcare issues to ensure that the nearly one in five individuals who live in rural America have access to high quality, affordable healthcare.
CMS Unveils Enhanced “Drug Dashboards” to Increase Transparency on Drug Prices
For the first time, the dashboards include year-over-year information on drug pricing and highlight which manufactures have been increasing their prices.
MEDICARE EDUCATIONAL RESOURCES
Palmetto JM Provider Contact Center (PCC) Frequently Asked Questions (FAQs): January 2018 - April 30, 2018
MLN Fact Sheet Complying with Medicare Signature Requirements
Targeted Probe and Educate Video
MEDICARE RULES
Hospital IPPS and LTC 2019 FY Proposed Rule
The proposed rule proposes updates to Medicare payment policies and rates under the Inpatient Prospective Payment System (IPPS) and the Long-Term Care Hospital (LTCH) Prospective Payment System (PPS). Also includes proposal concerning Quality Programs, EHR Incentive Programs, Cost-Reporting and Physician Claim Certifications.
https://s3.amazonaws.com/public-inspection.federalregister.gov/2018-08705.pdf
Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities (SNF) Proposed Rule for FY 2019, SNF Value-Based Purchasing Program, and SNF Quality Reporting Program
This proposed rule would update the payment rates used under the prospective payment system (PPS) for skilled nursing facilities (SNFs) for fiscal year (FY) 2019.
https://s3.amazonaws.com/public-inspection.federalregister.gov/2018-09015.pdf
Inpatient Rehabilitation Facility Prospective Payment System for Federal Fiscal Year 2019
This proposed rule would update the prospective payment rates for inpatient rehabilitation facilities (IRFs) for federal fiscal year (FY) 2019.
https://s3.amazonaws.com/public-inspection.federalregister.gov/2018-08961.pdf
FY 2019 Inpatient Psychiatric Facilities Prospective Payment System and Quality Reporting Updates for Fiscal Year Beginning October 1, 2018 (FY 2019)
This proposed rule would update the prospective payment rates for Medicare inpatient hospital services provided by inpatient psychiatric facilities (IPFs), which include psychiatric hospitals and excluded psychiatric units of an acute care hospital or critical access hospital.
https://s3.amazonaws.com/public-inspection.federalregister.gov/2018-09069.pdf
OTHER MEDICARE UPDATES
Kepro Case Review Connections, Acute Care Edition, Spring 2018
A quarterly e-newsletter from your Beneficiary and Family Centered Care Quality Improvement Organization (BFCC-QIO).
https://www.keproqio.com/providers/spring-2018-acute-newsletter/
Trump Administration Releases Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs
“No payment may be made under (Medicare) part A or part B for any expenses incurred for items or services — which, …, are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member, …”Social Security Act 1862(a)(1)(A)
If your work involves knowledge of Medicare requirements, you are likely very familiar with the above statement that is the basis for the concept of “medical necessity” for covered healthcare services. But do you actually consider the implications of this statement when billing Medicare for services?
It appears a large number of providers did not assess their services against this statement before billing Medicare for specimen validity testing as a recent Office of Inspector General (OIG) report found $66.3 million in overpayments for this type of testing. Specimen validity testing is used to analyze urine specimens prior to drug testing to determine whether the specimens have been adulterated or tampered with. Although necessary to assure the legitimacy of the drug testing, these tests themselves are not used to provide a diagnosis or treatment to a patient.
As the OIG report explains, the requirements for laboratory testing are that tests meet the requirement for medical necessity as described above and more specifically, to be covered under Medicare Part B, clinical laboratory tests must:
- Be ordered by a physician who is treating a beneficiary for a specific medical problem;
- Be related to the patient’s illness, injury, symptom or complaint; and
- The results must be used in the management of the patient’s problem.
The overpayments occurred because the same tests used for specimen validity testing may be medically necessary if used to diagnose certain conditions. “For example, tests for urinary pH and specific gravity may be performed to diagnose diseases of the kidney and urinary system. If these tests are used for diagnosis, treatment, or management, they may be Medicare-covered services. However, when used for the purpose of determining whether a specimen is adulterated, the test results are not being used to manage a beneficiary’s specific medical problem. In these cases, specimen validity testing is not a separately billable Medicare-covered service.”
Providers should have known this because, over the years, Medicare and their contractors have addressed this issue numerous times. Almost all the Medicare Administrative Contractors (MACs) have a Local Coverage Determination (LCD) for drug testing that includes direction that tests to validate urine specimens are not separately billable. The first such LCD instruction was in 2010 and in 2015 the Medicare National Correct Coding Initiative (NCCI) manual included the statement, “Providers performing validity testing on urine specimens utilized for drug testing should not separately bill the validity testing.” Beginning in 2016, new HCPCS codes for urine drug testing include specimen validity testing in their code descriptions and payments, regardless of whether specimen validity testing is performed or not. And in April 2016, NCCI edits were created to prevent payment for the type of lab tests performed for validity testing when billed on the same date of service as a urine drug test unless modified by the provider to indicate a “separate and distinct” service.
Although the number of overpayments dramatically decreased from 2014 to 2016, the OIG thinks further actions by CMS could reduce the risk of estimated overpayments of $12,146,760 over a 5-year period. The OIG recommends CMS “strengthen its system edits to prevent improper payments for specimen validity tests and instruct the Medicare contractors to educate providers on properly billing for specimen validity and urine drug tests.” Also, be warned that CMS may be recouping the overpayments identified in the OIG audit.
Now is a good time to investigate your billing practices for specimen validity testing with the understanding that if you have been separately billing these services, you owe the government some money back. Going forward, be sure to first apply the Social Security Act standard in determining whether to bill for services – i.e., to be paid under Medicare, a service must be reasonable and necessary for the diagnosis or treatment of illness or injury. After that, there are a lot more coverage rules that need to be considered, but it is a good place to start.
Debbie Rubio
As I write this article, I realize the word “challenge” appears frequently in my articles. How could it not? Dealing with Medicare is a lot of things, but always a challenge. Especially since Medicare tends to change their guidance often and without warning. Sometimes guidance changes are couched as “clarifications” and sometimes providers wait and hope for additional guidance that seems to take forever to come. Such is the case with Medicare’s transmittal that manualizes the new laboratory date of service policy from the 2018 Outpatient Prospective Payment System (OPPS) Final Rule. The good news is that this transmittal includes a list of codes to which the new policy applies, which was not clear from the discussion in the final rule.
Prior to the new lab date of service policy, hospitals had to bill Medicare directly for all outpatient laboratory tests unless the test was ordered at least 14 days following the date of the patient’s discharge from an outpatient hospital procedure. This policy created unintentional operational consequences for hospitals and testing laboratories when molecular pathology tests and ADLTs, that are separately paid at the clinical lab fee schedule (CLFS) rate and not under the hospital OPPS rate, were performed on specimens collected during a hospital outpatient encounter. CMS recognized the concerns and in the 2018 OPPS Final Rule, changed the lab date of service policy as follows:
“In the case of a molecular pathology test or an Advanced Diagnostic Laboratory Test (ADLT) that meets the criteria of section 1834A(d)(5)(A) of the Act, the date of service must be the date the test was performed only if the following conditions are met:
- The test is 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 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 laboratory DOS policy will permit laboratories performing ADLTs and molecular pathology tests excluded from the Outpatient Prospective Payment System (OPPS) packaging policy to bill
Medicare directly for those tests, instead of requiring them to seek payment from the hospital outpatient department.” In fact, under the new policy the testing lab must bill for the applicable tests; the hospital can no longer bill Medicare directly for these tests.
In the final rule, CMS appeared to exclude some lab tests that now are included according to Transmittal 4000 – the final rule stated, “we are not including ADLTs under Criterion (B), GSP (genomic sequencing procedures) tests, PLA (proprietary laboratory analysis) tests, or protein-based MAAAs (multianalyte assays with algorithmic analyses) in the revised DOS policy at this time.” In CMS’s defense, I think they meant GSP, PLA, and MAAA laboratory tests that are conditionally packaged under OPPS. All ADLT and molecular pathology-type codes that are conditionally packaged laboratory tests codes under OPPS are not included in the new policy – only separately payable molecular path and ADLT test codes with an OPPS status indicator of “A” are included. As noted above, the transmittal includes a list of codes to which the policy applies –-
- CPTs 81105-81383, 81400-81408, 81410-81479, 81493, 81504, 81507, 81519–81528, 81540-81595, 0004M, 0006M–0009M, 0001U, 0004U, 0008U, 0010U, 0012U–0014U, 0016U–0019U, 0022U, and 0023U. (0004U was deleted effective January 1, 2018, but is included in Medicare’s listing.)
This new policy prevents hospitals from having to bill Medicare directly for these types of tests which encompassed accepting Medicare CLFS payment rates and paying a reference laboratory their charges to perform the tests. Under the new policy, Medicare pays the CLFS rate directly to the testing laboratory. Hospital labs will have to be aware of which tests fall under this policy (testing lab bills Medicare) and which do not (hospital lab bills Medicare directly). Also, hospitals must develop a process to provide the patients’ billing information to the testing lab in order for the testing lab to bill Medicare.
The transmittal is effective for dates of service on and after January 1, 2018, but the implementation date of the transmittal is not until July 2, 2018. I recommend hospitals proceed now with allowing the testing laboratory to bill for the applicable services. Should Medicare deny any payments prior to the implementation date, the transmittal allows for correction of the claim payment when brought to the Medicare contractor’s attention. Alternatively, testing labs may hold such claims until after the implementation date.
The challenge continues as we try to read between the lines, make our best guess, and remain prepared for CMS “clarifications” in order to code, bill and document correctly to meet Medicare guidelines. In my line of work, I guess this translates to job security.
Debbie Rubio
We hope our readers find our articles helpful in understanding the ins and outs of dealing with Medicare. We provide the latest updates on Medicare issues and dig deep into the more complex or unclear topics. Did you know all of our prior articles can be found under the Knowledge Base tab on our website at www.mmplusinc.com ? This page includes a search function that allows viewers to search by title, category, text keyword or date. One of our most popular prior articles, based on internet search traffic, is the “type of bill” article from 2014. Today, we are rerunning a slightly revised version of that article as a reminder of exactly what a type of bill is and the appropriate TOB for the various types and settings of healthcare.
A ‘type of bill’ designation is required on the institutional uniform billing form known as a UB-04 or CMS-1450. Chapter 25 of the Medicare Claims Processing Manual, section 70.1 describes the form as:
“… a uniform institutional provider bill suitable for use in billing multiple third party payers. Because it serves many payers, a particular payer may not need some data elements. The National Uniform Billing Committee (NUBC) maintains lists of approved coding for the form. Medicare Administrative Contractors servicing both Part A and Part B lines of business (A/B MACs (A) and (HHH)) responsible for receiving institutional claims also maintain lists of codes used by Medicare.”
The type of bill goes in field (FL) 4 on the UB-04. Type of bill consists of four digits, the first digit being zero. This leading zero is ignored by Medicare for processing and is usually dropped when discussing bill types. The second digit identifies the type of facility and the third classifies the type of care being billed. For example, claims with a second digit of “1” are hospital claims, such as 011x or 013x.
The fourth digit of the TOB indicates the sequence of the bill for a specific episode of care as defined below:
- “0” indicates a non-payment/zero claim. For example, if a facility determines an inpatient admission is not medically necessary after discharge, they would first submit a no-pay/provider liable inpatient claim, a 110 TOB. After denial, they would then submit a Part B inpatient claim (TOB 121) to receive payment for the Part B services furnished.
- “1” is for an admit-through-discharge claim.
- “2” is the first interim claim in a series of claim when the patient is expected to remain in a facility for an extended period of time or is receiving outpatient recurring services, such as physical therapy.
- “3” is a continuing claim in a series of claims.
- “4” indicates the last claim in a series.
- “5” is used as the last digit for late charges only claims.
- “7” is a replacement claim to be used when a previously finalized claim needs to be rebilled entirely such as corrected or adjustment claims.
- “8” is used to cancel a claim.
There are some additional fourth characters for special providers such as hospice and home health.
As usual with Medicare, nothing is as straight forward as it seems. Be sure to read the Medicare manual and other resources to ensure you are using the type of bill codes correctly. For example, Medicare Claims Processing Manual, Chapter 1, section 50.2 discusses Frequency of Billing for Providers.
Debbie Rubio
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