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I enjoy what I do. For some weird reason, I like to read and do my best to interpret the Medicare regulations. I hope my efforts make it easier for hospitals to receive the appropriate reimbursement for the healthcare services they provide by helping them to follow Medicare’s documentation, coding and billing requirements. But unfortunately, the news I share is not always the best news or even fun. So before I get into the “not so fun” part of this article, I want to acknowledge National Radiologic Technology Week.

As in many areas of healthcare, radiology includes many different types of services, such as plain x-rays, computed tomography (CT), magnetic imaging resonance (MRI), ultrasound, nuclear medicine, interventional radiology, radiation oncology, and others. Radiologic technologists provide a valuable contribution to healthcare. How many times over the past year have you, your family or friends received radiologic services? How would your care have been affected without this technology? Within my own circle of family and friends – an x-ray for a broken wrist, annual mammogram, Dexa scan, MRI for spinal stenosis, and CT to rule out a pulmonary embolism. So thanks to all our radiology friends!

A few weeks ago an article reviewed some of the National Correct Coding Initiative (NCCI) guidance for respiratory services for their recognition week. Continuing that theme for National Radiology Week, let’s look at some of the NCCI instructions that apply to Medicare coding and billing for radiology services.

A recent NCCI edit (July 2014) bundled spinal myelography procedures (72240-72270) into procedures for CT neck, chest and lumbar studies (72125-72133). The code pairs may be reported together with the appropriate modifier when warranted. If both tests are medically necessary, distinctly ordered, and there is a separate interpretation for each procedure, then it is appropriate to append modifier 59 to the CT of the spine with contrast code to identify that it is a separate and distinct procedure. (CPT Assistant September 2014)

The following are selected excerpts from the Radiology chapter of the NCCI manual. For complete information regarding these topics and other radiologic issues, please see Chapter IX of the NCCI Policy Manual found in the downloads section of the Medicare NCCI Website.

• CPT code descriptors that specify a minimum number of views include additional views if there is no more comprehensive code specifically including the additional views.
• CPT Manual instructions state that in the presence of a clinical history suggesting urinary tract pathology complete ultrasound evaluation of the kidneys and urinary bladder constitutes a complete retroperitoneal ultrasound study (CPT code 76770). A limited retroperitoneal ultrasound (CPT code 76775) plus limited pelvic ultrasound (CPT code 76857) should not be reported in lieu of the complete retroperitoneal ultrasound (CPT code 76770).
• When a central venous catheter is inserted, a chest radiologic examination is usually performed to confirm the position of the catheter and absence of pneumothorax. Similarly when an emergency endotracheal intubation procedure (CPT code 31500), chest tube insertion procedure (e.g., CPT codes 32550, 32551, 32554, 32555), or insertion of a central flow directed catheter procedure (e.g., Swan Ganz)(CPT code 93503) is performed, a chest radiologic examination is usually performed to confirm the location and proper positioning of the tube or catheter. The chest radiologic examination is integral to the procedures, and a chest radiologic examination (e.g., CPT codes 71010, 71020) should not be reported separately.
• CPT code 75635 describes computed tomographic angiography of the abdominal aorta and bilateral iliofemoral lower extremity runoff. This code includes the services described by CPT codes 73706 (computed tomographic angiography, lower extremity...) and 74175 (computed tomographic angiography, abdomen...). CPT codes 73706 and 74175 should not be reported with CPT code 75635 for the same patient encounter. CPT code 73706 plus CPT code 74175 should not be reported in lieu of CPT code 75635.
• Diagnostic angiography (arteriogram/venogram) performed on the same date of service by the same provider as a percutaneous intravascular interventional procedure should be reported with modifier 59. If a diagnostic angiogram (fluoroscopic or computed tomographic) was performed prior to the date of the percutaneous intravascular interventional procedure, a second diagnostic angiogram cannot be reported on the date of the percutaneous intravascular interventional procedure unless it is medically reasonable and necessary to repeat the study to further define the anatomy and pathology. Report the repeat angiogram with modifier 59.
• Fluoroscopy reported as CPT codes 76000 or 76001 is integral to many procedures including, but not limited, to most spinal, endoscopic, and injection procedures and should not be reported separately. For some of these procedures, there are separate fluoroscopic guidance codes which may be reported separately.
• Computed tomography (CT) and computed tomographic angiography (CTA) procedures for the same anatomic location may be reported together in limited circumstances. If a single technical study is performed which is utilized to generate images for separate CT and CTA reports, only one procedure, either the CT or CTA, for the anatomic region may be reported. Both a CT and CTA may be reported for the same anatomic region if they are performed at separate patient encounters or if two separate and distinct technical studies, one for the CT and one for the CTA, are performed at the same patient encounter. The medical necessity for the latter situation is uncommon.
• If a breast biopsy, needle localization wire, metallic localization clip, or other breast procedure is performed with mammographic guidance (e.g., 19281,19282), the physician should not separately report a post procedure mammography code (e.g., 77051, 77052, 77055-77057, G0202-G0206) for the same patient encounter. The radiologic guidance codes include all imaging by the defined modality required to perform the procedure.
• CPT codes 76942, 77002, 77003, 77012, and 77021 describe radiologic guidance for needle placement by different modalities. CMS payment policy allows one unit of service for any of these codes at a single patient encounter regardless of the number of needle placements performed. The unit of service for these codes is the patient encounter, not number of lesions, number of aspirations, number of biopsies, number of injections, or number of localizations.
• The code descriptor for CPT code 77417 states “Therapeutic radiology port film(s)”. The MUE value for this code is one (1) since it includes all port films.
• An MRI study of the brain (CPT codes 70551-70553) and MRI study of the orbit (CPT codes 70540-70543) are separately reportable only if they are both medically reasonable and necessary and are performed as distinct studies. An MRI of the orbit is not separately reportable with an MRI of the brain if an incidental abnormality of the orbit is identified during an MRI of the brain since only one MRI study is performed.

There are more rules on coding and reporting radiology services on a claim than there are slices of a CT scan. And that is not so fun!

We have all experienced times when our first attempt at something did not work out the way we planned. Then, if we didn’t just give up, we had to tweak our solution or try something different to accomplish our goal. Evidently Medicare is having a similar experience with their attempts to reduce Medicare paid claims error rates through the National Correct Coding Initiative and the Medically Unlikely Edits. CMS has recently made some modifications to both with the hope of better controlling improper coding and billing.

NCCI Edits and Modifier 59

The National Correct Coding Initiative (NCCI) contains Procedure to Procedure edits to prevent unbundling of services and inappropriate payments. The edits are based on the principle that the second code defines a subset of the work of the first code. However for some code combinations, there are times when reporting the two codes together on a claim is appropriate and there are HCPCS modifiers that allow some CCI edits to be by-passed.

One of the most commonly used modifiers is modifier 59 which is used to indicate that a service is “separate and distinct” from another service with which it is sometimes bundled. Directions in the NCCI manual instruct to use modifier 59 (if no other modifier fits) to report different encounters, different anatomic sites, and distinct services. For providers it is sometimes difficult to know exactly when the 59 modifier is appropriate and CMS reports that this modifier is indeed associated with considerable abuse and high levels of manual audit activity.

Modifier 59 is used infrequently and usually correctly for different encounters and used more frequently, but less correctly for separate anatomic site. And interestingly, CMS says the most common reason for using modifier 59 is also the most frequently incorrect usage – that is when it is used to define a distinct service. All of this incorrect usage voids the very purpose of the CCI edits.

In Transmittal 1422 (see MLN Matters Article MM8863), CMS is proposing four new HCPCS modifiers to define specific subsets of the -59 modifier. These modifiers are not required to be used at this time, and CMS will accept either a -59 modifier or one of the new modifiers for now, although they are encouraging providers to “rapidly” implement use of the new modifiers. CMS and/or the local Medicare Administrative Contractors (MACs) may require the usage of the new modifiers in the future especially for certain codes at high risk for incorrect billing.

The new modifiers (known as –X {ESPU} modifiers) are:

• XE Separate Encounter, A Service That Is Distinct Because It Occurred During A Separate Encounter
• XS Separate Structure, A Service That Is Distinct Because It Was Performed On A Separate Organ/Structure
• XP Separate Practitioner, A Service That Is Distinct Because It Was Performed By A Different Practitioner
• XU Unusual Non-Overlapping Service, The Use Of A Service That Is Distinct Because It Does Not Overlap Usual Components Of The Main Service

Transmittal 1422 explains a little better than the corresponding MLN Matters article that modifier 59 will still be accepted in many instances. However current, existing guidance concerning modifier 59 continues to apply - “the -59 modifier should not be used when a more descriptive modifier is available” which now includes the new more descriptive –X {ESPU} modifiers.

Medically Unlikely Edits

In a separate Transmittal (see MLN Matters Article MM8853) CMS reviews modification to the Medically Unlikely Edit (MUE) Program. This is basically the same information as previously presented in MLN Matters Special Edition article SE1422 but more details are provided (see the MMP article Medicare MUEs and Correct Bilateral Billing from July).

Like the NCCI edits, the MUE program (which began in January 2007) was implemented to reduce the Medicare paid claims error rate. The MUE is a limit on the number of units that Medicare will adjudicate. Initially, the MUE values were only adjudicated against the units reported on each line item of a claim. In April, 2013, CMS modified the MUE program so that some MUE values would be date of service edits. This means that if the units reported for one day of a HCPCS code (with a date of service MUE) exceed the MUE limit, no payment would be made for that code unless the denial was overturned on a provider-initiated appeal.

At the same time as the date of service edits, CMS introduced an “MUE adjudication indicator” (MAI) to the MUE edit table. The MAI field was not made public knowledge or published until the July 2014 MUE update. These indicators describe the type of MUE and how it is adjudicated.

• An MAI of “1” is a claim line edit. The MUE may be by-passed when appropriate by reporting units exceeding the MUE on separate lines with an acceptable modifier.
• An MUE with an indicator of “2” is an absolute date of service edit. Units of service exceeding the MUE value are considered “impossible” because they are contrary to statute, regulation or subregulatory guidance, including correct coding policies. Denials for services with an MAI of “2” will not be overturned on appeal.
• MUEs for HCPCS codes with an MAI of “3” are date of service edits based on clinical guidelines. These edits will cause an automatic denial if the units for a date of service exceed the limit, but the denial may be overturned on appeal if there is adequate documentation of medical necessity of correctly reported units.

Additional information in this MLN article reminds providers that a denial of services due to an MUE is a coding denial and not a medical necessity denial. Therefore an Advance Beneficiary Notice (ABN) will not shift liability to the beneficiary. There is also a reminder that bilateral services should be reported on one line with a modifier 50 and units of 1 to avoid an MUE denial. Corresponding Transmittal 1421 explains that in determining date of service edits, Medicare will consider all units of the date of service HCPCS on “all claim lines on the current claim and paid claim lines of prior finalized claims”, although only lines on the current claim will be denied. Is this a proactive step to prevent providers from reporting units on separate claims?

As Medicare modifies their regulations, hospitals have to modify their processes to comply and adjust to the new requirements. The two transmittals discussed here will require hospitals to utilize new modifiers and be aware of the different types of MUEs and their impact on billing and appeals. It is always something!

Have you ever seen the guy spinning numerous plates at once at the top of poles? This used to be a regular segment on the Ed Sullivan Show many years ago. Sometimes keeping up with all the different payer regulations is like spinning plates. For example, there are numerous ways to report bilateral procedures, but Medicare only wants it one way. Reporting it wrong will end up in a denial for certain procedures. Coders’ heads are spinning like those plates.

Medicare has published MLN Matters Article SE1422 to address improper Medicare billing of bilateral surgical procedures and date of service Medically Unlikely Edits (MUEs). As a reminder, per Medicare’s MUE webpage an MUE for a HCPCS/CPT code is the maximum units of service that a provider would report under most circumstances for a single patient on a single day of service.  Medicare FAQ 2277 explains that line-item MUEs are adjudicated separately against the MUE value for the procedure code on thatline. The appropriate use of CPT modifiers (such as -76, -77, -59, or anatomic modifiers) to report the same code on separate lines of a claim will enable a provider to report medically reasonable and necessary units of service in excess of an MUE value. 

Medicare, with back-up from the Office of Inspector General, is convinced that providers are inappropriately by-passing line item MUEs by reporting multiple line items. To address this concern, CMS is converting most MUEs into per day edits. That means that all lines of a CPT code will be denied if the units for that CPT code exceed the MUE limit for the day of service. In this case, reporting CPT codes on separate lines, with or without modifiers, will not by-pass the edits.

CMS is also adding MUE Adjudicator Indicators (MAIs) to indicate the type of MUE and its basis.

• An MAI of 3 indicates an MUE based on clinical information such as billing patterns or prescribing information. Exceptions to the MUE limits can occur but would be rare, so Medicare considers items exceeding MUE limits when the MAI is 3 to be a billing error. Providers can appeal denials for MUEs with an MAI of 3 if they have verified that the units are correct, the service is medically necessary, and they have correctly interpreted all coding instructions.
• An MAI of 2 indicates an MUE based on regulation or subregulatory instruction (“policy”), including the instruction that is inherent in the code descriptor or its applicable anatomy. MUE denials where the MAI is 2 will not be overturned on appeal.
• If a provider receives an MUE denial and determines that the units originally billed were incorrect due to a clerical error, they can request a reopening instead of having to go through the appeals process. They can then submit a corrected claim with the correct number of units.

There is now a revised July 1, 2014 update on the MUE webpage that identifies the published MUE edits with an MAI value of 1 (line edit), 2 (date of service edit: policy) or 3 (date of service edit: clinical).

These per day MUEs will create a problem with bilateral codes for surgical procedures if they are not billed according to Medicare instructions. Medicare instructs in the Medicare Claims Processing Manual and the National Correct Coding Initiative Manual that bilateral surgical procedures (if bilateral is not included in the code description) should be reported using a single unit of service and the -50 modifier. If these procedures are incorrectly reported on two lines with RT and LT modifiers or on one line with units of 2, they may exceed the MUE if the per day MUE limit is one. A date of service MUE of one is fairly common for bilateral surgical procedures. The article only discusses bilateral surgical procedures; it does not address the correct reporting of bilateral radiology procedures.

Through our 835 claims analysis (HIQUP reports), MMP has identified denials of services that appear to be the result of inappropriate reporting of bilateral surgical procedures with RT and LT instead of the -50 modifier. For example, such CPT codes as 30140, 49505, 64483, and 67904 submitted with RT/LT modifiers are being denied with Claim Adjustment Reason Code (CARC) 151 (information submitted does not support this many services).

Hospitals need to watch for these types of denials and educate coders and billers or adjust chargemasters to assure bilateral surgical procedures are being reported correctly. Hospitals will also need to be aware of the per day MUEs and their respective MAIs for other services that may be affected. Something else to watch for and another acronym to remember.

All Medicare discharges from acute Inpatient Prospective Payment System (IPPS) hospitals are not created equal. Specifically, hospitals must determine whether the patient was “discharged” or “transferred” from the hospital.

In May, the Office of Inspector General (OIG) released the report, Medicare Inappropriately Paid Hospitals’ Inpatient Claims Subject to the Postacute Care Transfer Policy.

This was not a new type of review for the OIG. In prior similar reviews, the OIG found issues and made the following recommendations to the Centers for Medicare and Medicaid Services (CMS):

• Recommend that CMS provide hospitals education regarding the transfer policy
• Require Medicare Administrative Contractors (MACs) to put edits in place to “prevent and detect postacute care transfers that are miscoded as discharges.”

In spite of prior OIG reviews and recommendations, the OIG once again found in more recent reviews that hospitals not complying with the policy received approximately $12.2 million in overpayments from Medicare contractors. In the May report, the OIG once again conducted a review with the objective of determining if appropriate payments were being made to hospitals by Medicare for claims subject to the postacute care transfer policy. Before examining the report findings, I believe it is important to first have a basic understanding of Medicare’s Postacute Transfer Policy.

Postacute Care Transfer (PACT) Policy Background

• This policy was established by CMS effective October 1, 1998.
• The purpose of this policy is to prevent Medicare from having to pay twice for the same care: once to the hospital as a MS-DRG payment and second to a postacute facility or level of care.
• This policy distinguishes between beneficiary “discharges” and “transfers” from IPPS hospitals.
• A discharge status code is required by CMS for all inpatient claims. This two-digit code determines whether Medicare pays for a “discharge” or a “transfer.”
• Full Medicare Severity Diagnosis-Related Group (MS-DRG) payments are made for inpatient “discharges” to home or certain types of health care institutions.
• A per diem rate is paid for each day of the stay for “transfers.” This amount is not to exceed the full MS-DRG payment made for discharges to home.
• A “transfer” MS-DRG rate is paid for Medicare inpatients who have a qualifying DRG and one of the following discharge status codes assigned:

(Source: MLN Matters Number: SE0801at: https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/SE0801.pdf)

How CMS determines what DRGs will be Transfer DRG:

• The DRG has a least 2,050 total postacute care transfer cases;
• At least 5.5 percent of the cases in the DRG are discharged to postacute care prior to the geometric mean length of stay (LOS)for the DRG;
• The DRG must have a geometric mean LOS greater than 3 days; and
• If the DRG is a paired set based on the presence/absence of a comorbidity or complication, both paired DRGs are included if either one meets the first three criteria.

Again, the May OIG Report was conducted to determine if inpatient claims subject to the postacute care transfer policy were being appropriately paid by Medicare. The OIG reviewed Medicare beneficiary transfers to postacute care with dates of service from January 2009 through September 2012. Specific claims were identified through data analysis. Specific OIG findings and recommendations are as follows:

OIG Findings by the Numbers:

• 6,635: The number of inappropriately paid claims by Medicare for claims subject to the postacute care transfer policy.
• 91%: The percentage of inappropriately paid claims where the inpatient hospitalization was followed by claims for home health services.
• $19,471,432: The amount Medicare overpaid to hospitals due to Common Working File (CWF) edits related to home health care, SNFs, and non-IPPS hospital not working properly.
• $31.7 million: The approximate amount of money that Medicare could have saved over 4 years if it had had controls to ensure that the Common Working File (CWF) edits were working properly.

OIG Recommendations to CMS:

• “Direct the Medicare contractors to recover the $19,471,432 in identified overpayments in accordance with CMS’s policies and procedures;
• direct the Medicare contractors to identify any transfer claims on which the patient discharge status was coded incorrectly and recover any overpayments after our audit period;
• correct the CWF edits and ensure that they are working properly; and
• educate hospitals on the importance of reporting the correct patient discharge status codes on transfer claims, especially when home health services have been ordered.”

What the Hospital Needs to know:

“The Federal Register emphasizes that the hospital is responsible for coding the bill on the basis of its discharge plan for the patient. If the hospital subsequently determines that postacute care was provided, it is responsible for either coding the original bill as a transfer or submitting an adjusted claim.”

63 Fed. Reg. 40954, 40980 (July 31, 1998). See also MLN Matters Number: SE0408.

There were no changes made to the Post-Acute payment policy for the current 2014 CMS Fiscal Year that goes from October 1, 2013 through September 30, 2014. A complete list of applicable DRGs can be found in Table 5 of the IPPS Final Rule.

Specific detail regarding the PACT policy can be found in the Code of Federal Regulations (CFR) Title 42: Public Health §412.4 Discharges and transfers.

Just as you think you have mastered the challenge of complying with a Medicare rule, the rule changes and you have to start over. So it goes like this – know about the rules, understand the rules, implement processes to comply with the rules and then make sure the rules don’t change on you. Such was the case with the instructions for billing for certain laboratory tests.

It is almost July and just in time, CMS has issued the modifier to be appended to laboratory services when separate payment under OPPS is appropriate. Modifier L1 will be used starting July 1, 2014 to indicate that laboratory services provided to hospital outpatients meet one of the exceptions of “unrelated” or “lab test only” lab services.

As a reminder, the 2014 OPPS final rule packaged almost all clinical laboratory services as ancillary services with a revised Status Indicator (SI) of “N”. There are exceptions when lab tests are the only service provided or if the lab services are “unrelated” to other outpatient services. The original instructions from CMS for obtaining separate payment for the excepted lab services, was to submit a 14x type of bill (TOB). After concerns from the National Uniform Billing Committee (NUBC) and providers, CMS agreed to change the requirements effective July 1, 2014.

CMS Transmittal 2971 (CR 8776) (MLN Matters Article MM8776) issued May 23, 2014 manualized changes related to the new billing requirements for separately reimbursable laboratory services.

• Non-Patient (Referred) Laboratory Specimen - A non-patient is neither an inpatient nor an outpatient of a hospital. The patient is not physically present at the hospital but has a specimen submitted for analysis, for example, from a physician’s office or a non-hospital clinic. These non-patient laboratory services are to be billed on a TOB 14X. They are paid under the clinical laboratory fee schedule (CLFS) at the lesser of the actual charge or the fee schedule amount. Part B deductible and coinsurance do not apply.
• Outpatient lab tests only - If the only services the hospital provides to an outpatient are outpatient laboratory tests, the lab services are separately reimbursable and may be submitted on a TOB 13x with modifier L1 beginning July 1, 2014. The L1 modifier must be added to each lab line item on the claim. Such patients do not receive any other hospital outpatient services on the same day of service.
• Unrelated outpatient lab tests- If the hospital provides an outpatient laboratory test on the same date of service as other hospital outpatient services that is clinically unrelated to the other hospital outpatient services, then this lab service is also separately reimbursable and may be submitted on a TOB 13x with modifier L1 beginning July 1, 2014. Again, each lab line item that meets the exception requirements for separate Medicare reimbursement must be appended with the L1 modifier. Clinically unrelated means the laboratory test is
• ordered by a different practitioner than the practitioner who ordered the other hospital outpatient services, and
• for a different diagnosis.
• Payment for separately reimbursable outpatient laboratory tests is the lesser of the actual charge or the fee schedule amount for lab tests paid under the CLFS with no Part B deductible or co-pay.

The transmittal also addressed the payment of laboratory services related to Part B Inpatient claims (12x claims when there is no Part A payment). The new Part A to B rebilling rules from the 2014 IPPS Final Rule allow the submission of all Part B services on a 12x TOB when there is no Part A payment because the inpatient admission was not medically necessary. For these claims, the laboratory services will be packaged according to the OPPS rules since associated Part B services are payable under the expanded Part B billing.

When there is no Part A payment because the patient is not eligible for Part A or has exhausted Part A benefits, only limited Part B services may be billed on a 12x TOB. For these types of claims, the laboratory services will be reimbursed separately if the associated Part B services are not billable / payable under the limited Part B billing.

Just as hospitals had likely gotten their systems and processes in place to handle the 14x type of bill, the rules changed. Now hospitals need to start again on new systems and processes for use of the new modifier L1 to allow separate payment for laboratory services. Job security for someone?

Appending modifier 59 to a procedure code on an outpatient claim may result in Medicare payment when the code would not have received payment without the modifier. This is a good thing if the modifier is used appropriately for the correct circumstances. But modifier 59 is often misused and this could be a compliance concern for your hospital. Understanding CCI edits and correct modifier usage is critical for compliant billing.

The healthcare industry has been dealing with the National Correct Coding Initiative policy (NCCI or CCI) and edits for over 15 years now, but correct billing and modifier usage continues to be difficult and confusing for a lot of providers. One of the most commonly used and misused modifiers is modifier 59 which identifies a distinct procedural service. In fact misuse of this modifier is such a problem, that CMS has repeatedly provided education, clarification, and examples on the proper use of modifier 59. Last week, they released a new MLN Matters Article, SE1418 that again clarifies the appropriate use of modifier 59.

First, let’s look at some general information about the CCI edits:

• They were developed to promote national correct coding methodologies and to control improper coding leading to inappropriate payment in Part B claims
• They are based on coding conventions defined in the American Medical Association's CPT Manual, national and local policies and edits, coding guidelines developed by national societies, analysis of standard medical and surgical practices, and a review of current coding practices.
• The NCCI edits are updated quarterly and the NCCI Policy Manual is updated annually. The policy manual explains the rationale for the edits, the correct usage of modifiers, and specific policies for certain code pairs.
• The edits began in 1996 for Part B claims, and in 2000 for hospital claims. The Part B and hospital edits are not exactly the same.
• Procedure-to-Procedure (PTP) edits define when two HCPCS/CPT codes should not be reported together either in all situations or in most situations.
• A Correct Coding Modifier Indicator (CCMI) of “0” indicates the two codes should never be reported together by the same provider for the same patient on the same day of service. A CCMI of “1” indicates the codes may be reported together only in defined circumstances which are identified on the claim by the use of specific NCCI-associated modifiers.

“Modifier 59 is used to identify procedures/services, other than E/M services, that are not normally reported together, but are appropriate under the circumstances. Documentation must support a different session, different procedure or surgery, different site or organ system, separate incision/excision, separate lesion, or separate injury (or area of injury in extensive injuries) not ordinarily encountered or performed on the same day by the same individual.” Modifier 59 should only be used if there is not another modifier that could be used to explain the circumstances. Modifier 25, not 59, is used to indicate separate and distinct Evaluation and Management (E/M) services.

The article contains a lot of information about the correct use and inappropriate uses of modifier 59. Providers should carefully review the complete article to fully understand how to use this important modifier. Some of the common uses of modifier 59 described in the article include:

• Different anatomic sites, which includes different organs and in some cases, different lesions in the same organ. However, since CCI edits are to prevent the inappropriate billing of lesions and sites that should not be considered to be separate and distinct, modifier 59 should only be used to identify clearly independent services that represent significant departures from the usual situations. The treatment of contiguous structures in the same organ or anatomic region does not constitute treatment of different anatomic sites, for examples nails, nails beds and adjacent soft tissue; posterior segment structures of the eye; and adjoining areas in the same shoulder.
• Different patient encounters on the same day. One huge issue here is how a patient encounter is defined. Recently an NCCI coding specialist clarified that “encounter” as used in the new NCCI paragraph concerning the use of CPT code 94640 for respiratory treatment represents direct personal contact in the hospital between a patient and a physician or other healthcare professional. In other words, there may be several different encounters with a patient during a day of an extended care episode. For CPT 94640 multiple encounters on the same date of service are reported with modifier 76, but there are codes where modifier 59 would be the appropriate modifier for different encounters on the same day. Beware that this definition of “encounter” may not apply to all CCI edits or be accepted by all Medicare contractors.
• Sequential “timed code” services – this generally refers to rehabilitative therapy services which are defined in 15 minutes intervals. If the therapy services are provided sequentially for a different 15 minute interval, then modifier 59 is appropriate.
• A diagnostic service that proceeds a therapeutic service if “(a) it occurs before the therapeutic procedure and is not interspersed with services that are required for the therapeutic intervention; (b) it clearly provides the information needed to decide whether to proceed with the therapeutic procedure; and (c) it does not constitute a service that would have otherwise been required during the therapeutic intervention.” The example given is angiography preceding a revascularization if the circumstances noted above are met.
• A diagnostic procedure subsequent to a completed therapeutic procedure only when the diagnostic procedure is not a common, expected, or necessary follow-up to the therapeutic procedure. For example, a chest x-ray after a chest tube insertion to verify placement is not appropriate for modifier 59, but a chest x-ray after a chest tube insertion when the patient experiences unexpected complications is appropriate for modifier 59.

One interesting paragraph in the article describes a common misuse of modifier 59 relating to the portion of the definition describing “a different procedure or surgery.” According to the article, providers should not use modifier 59 to by-pass a CCI edit based on the two codes being “different procedures” unless the two procedures are performed at separate anatomic sites or at separate patient encounters on the same date of service. Please refer to the exact wording in the article for a clear understanding of this instruction.

Getting the correct modifiers on the correct code is not as easy as it sounds. In the hospital setting, this often involves billers, coders, and the relevant hospital departments. It also includes a financial and compliance aspect. Hospitals need a well-planned approach in dealing with CCI edits and their impact on billing and reimbursement.

Happy National Laboratory Week to all the laboratorians who work behind the scenes to assist in the diagnosis and treatment of patients. Laboratory science has come a long way since I entered the profession many years ago with a lot more instrumentation and ever evolving tests offerings, such as genetic molecular pathology testing. Thanks to all the dedicated laboratory professionals who play a valuable role in maintaining and improving our nation’s health.

From a Medicare reimbursement standpoint, it has been a tough year for hospital outpatient clinical laboratory services. The 2014 OPPS Final Rule finalized a proposal to package payment for clinical laboratory tests performed during the same encounter with other outpatient services. This means there is no additional separate payment for lab tests performed on Medicare patients in the following areas:

• Patients treated in the Emergency department
• Patients in Outpatient hospital clinics, such as a Wound Care clinic or Cancer clinic
• Patients receiving Observation services
• Patients during an outpatient surgery
• Patients having lab tests performed during the same encounter as any other outpatient services such as imaging studies

Medicare still pays separately for clinical laboratory tests in the following exceptions if the claims are billed correctly:

1. When a specimen is submitted for analysis to a hospital and the patient is not physically present at the hospital. These are commonly referred to as non-patient services, outreach lab services or reference lab tests.
2. When laboratory tests are the only hospital outpatient services that a patient receives during an outpatient encounter. For example, patients that are referred from a physician’s office/clinic to a hospital outpatient laboratory for laboratory testing only and no other outpatient services.
3. When laboratory tests are clinically unrelated to other outpatient services the patient receives during an outpatient encounter and the lab tests are ordered by a different practitioner than the one who ordered the other (non-lab) outpatient services.

And as if this were not confusing enough already, the rules for billing laboratory claims to receive separate payment are about to change again. Effective January 1, 2014, CMS instructed hospitals to bill laboratory claims in the above listed situations on a 14x type of bill. However, because of concerns from hospitals and the National Uniform Billing Committee (NUBC) that all of these situations do not conform to the NUBC definition of a 14x bill as a “non-patient” claim, CMS is modifying the billing instructions effective July 1, 2014 as explained in MLN Matters Article SE1412.

Effective for claims billed on or after July 1, 2014, CMS will create a new modifier (yet to be determined) to be used on the 013X TOB (instead of the 014X TOB) when non-referred lab tests are eligible for separate payment under the Clinical Laboratory Fee Schedule (CLFS) for exceptions (2) and (3) listed above. For claims with dates of service on or after January 1, 2014 that are billed to Medicare on or after July 1, 2014 the following billing instructions apply:

‍Hospitals should continue to bill all exceptions for separate payment for laboratory tests on a 14x TOB until July 1, 2014. It continues to be the hospital’s responsibility to determine when laboratory tests qualify to receive separate payment. Starting with claims received July 1, 2014, and after, when a hospital appends the new modifier to a laboratory service, the provider is attesting that exception (2) or (3) listed above is met. The requirement for all OPPS services to be submitted on a single 13x claim (other than recurring services) continues to apply. In addition, laboratory tests for molecular pathology tests described by CPT codes in the ranges of 81200 through 81383, 81400 through 81408, and 81479 are not packaged in the OPPS and do not require the new modifier.

MMP will provide more information, specifically the new modifier and any accompanying instructions, as it becomes available. Please refer to the MLN Matters Article reference above for more information, including some billing scenarios.

Since the release of the 2014 IPPS Final Rule (CMS-1599-F), the Centers for Medicare and Medicaid Services (CMS) have provided additional guidance to several elements of the rule. On March 21st they released MLN Matters® Number: MM8666 proving guidance on how to implement the Part B Inpatient Payment Policies in the CMS-1599-F. This article is based on Change Request (CR) 8666 that updates the Medicare Benefit Policy Manual Chapter 6 – Hospital Services Covered under Part B. Now, let’s walk through highlights from the article.

When would a Hospital consider rebilling Part A to Part B?

When a hospital “self-audits” a Medicare beneficiary’s hospitalization after they have been discharged and determines that the inpatient admission was not reasonable and necessary and instead should have been a hospital outpatient stay, then they should consider rebilling.

A hospital can also consider rebilling when a Medicare Contractor has performed a complex review of an inpatient claim and denied the claim.

What Services are allowable by Medicare when the claim is rebilled?

“Medicare will allow payment under Part B of all hospital services that were furnished and would have been reasonable and necessary if the beneficiary had been treated as a hospital outpatient…except for those services that specifically require an outpatient status, such as outpatient visits, emergency department visits, and observation services, that are, by definition, provided to hospital outpatient and not inpatients.”

What are limitations of being able to rebill?

• The beneficiary must be enrolled in Part B,
• The allowed timeframe for submitting claims (within one calendar year from the date of service) hasn’t expired; and
• Waiver of liability payment is not made.

What is the process for submitting a claim?

• If you have already submitted a claim to Medicare for Part A payment, this claim must be cancelled before submitting the Part B services claim.
• Even if you have not yet submitted a claim “Medicare requires the hospital to submit a “no pay” Part A claim indicating that the provider is liable under section 1879 of the Act for the cost of the Part A services.”

At this point you would submit an inpatient claim for payment under Part B (a 12x type of bill).

How are Part B Payments made?

“Payment is made according to the Part B fee schedules or prospectively determined rates for which payment is made for these services when provided to hospital outpatients.”

What Type of Hospitals can submit Part B inpatient claims?

All hospitals that bill Part A services are eligible to bill the Part B inpatient services, including:

• Short Term Acute Care Hospitals paid under IPPS,
• Hospitals paid under OPPS,
• Long Term Care Hospitals (LTCHs),
• Inpatient Psychiatric Facilities (IPFs) and IPF hospital units,
• Inpatient Rehabilitation Facilities (IRFs) and IRF hospital units,
• Critical Access Hospitals (CAHs),
• Children’s Hospitals,
• Cancer Hospitals; and
• Maryland Waiver Hospitals.

What the Medicare Beneficiary Liability is and the Hospitals Responsibility for Payment?

• A Medicare Beneficiary is liable for their usual Part B financial liability.
• “If the beneficiary’s liability under Part A for the initial claim submitted for inpatient services is greater than the beneficiary’s liability under Part B for the inpatient services they received, the hospital must refund the beneficiary the difference between the applicable Part A and Part B amounts.”
• However “if the beneficiary’s liability under Part A is less than the beneficiary’s liability under Part B for the services they received, the beneficiary may face greater cost sharing.”

The MLN Article goes on to discuss what services a Hospital can and cannot bill for. The CMS makes a point to remind hospitals that “the services billed to Part B must be reasonable and necessary and must meet all applicable Part B coverage and payment conditions. Claims for Part B services submitted following a reasonable and necessary Part A claim denial or hospital utilization review determination must be filed no later than the close of the period ending 12 months or one calendar year after the date of service.”

MMP strongly recommend that hospital read the entire article as well as (CR) 8666 and share this information with all staff members that would be involved in this process.

Have you noticed that when Medicare changes the rules, you are always working to come up with new processes to deal with the changes? Such was the case with the numerous revisions finalized for OPPS for 2014. Hopefully since it is now the middle of March, most hospitals have the new processes in place. But we thought it would be a good reminder to review the new requirements and some suggested process revisions for Skin Substitutes.

The 2014 OPPS Final Rule contained a lot of changes, one of which was the packaging of skin substitute products for 2014. Medicare now considers these products to be in the category of “drugs and biologicals that function as supplies or devices when used in a surgical procedure” so in 2014 Medicare will not make a separate payment for the product itself. The payment for the product is “packaged” into the payment for the application procedure.

The good news is that due to comments from the proposed rule, Medicare created two levels of payment for the application of skin substitutes based on whether the skin product was high or low cost. The addition of new HCPCS codes to accommodate the differential application codes requires hospitals to have processes to ensure the correct application code is billed with the correct type of skin product. The payment rates for application of a high-cost substitute are more than double the low-cost substitute application for most codes so the process is definitely important.

High-cost skin substitutes will continue to be billed with the current CPT skin substitute application codes, 15271-15278. The application of low-cost skin substitutes are to be reported with new HCPCS codes C5271-C5278. Note that the HCPCS codes are the same as the CPT codes with the beginning numeral “1” replaced with a “C” (for example CPT 15271 equates to HCPCS C5271).

Hospitals will have to consider if skin substitute application codes are built into the Charge Description Master (CDM) and selected when a charge is entered by the department or if the applications are coded by Medical Records coders. If these codes are built into the CDM, you will now have to have two sets of application charges, one for high-cost substitutes and one for low cost substitutes. Instead of eight items, you now have sixteen CDM entries.

Then the person selecting the charge in the department or the coder selecting the code will have to know whether a high-cost or low-cost skin substitute was applied. See the table (link) at the bottom of this article for a list of high and low-cost skin substitutes. This table includes the changed assignment of two skin products from the April OPPS update. For department charge entry, the superbill or charge sheet will need to be revised to reflect the new application codes. Coders will have to be careful in their selection of codes; automated coding systems may have edits to assist in assigning the proper codes.

Finally, Medicare has installed edits on their billing systems to identify mismatches between the skin substitute product and the application code. Claims hitting these edits will RTP (return to the provider) for correction. Billers will have to be made aware of what the RTP issue is and how to correct it. It is likely they will have to communicate with the department or coders to determine the proper correction.

As I stated above, it is always a process when dealing with Medicare. Guess that means job security for those of us who track and handle compliance with Medicare regulations.

Skin Substitute Product Assignment to High Cost/Low Cost Status for CY 2014

One of the most significant changes to the Hospital Outpatient Prospective Payment System (OPPS) for 2014 was the packaging of clinical laboratory services. Prior to this year, clinical diagnostic laboratory tests were separately paid under OPPS at the Clinical Laboratory Fee Schedule (CLFS) payment rates. In 2014, most laboratory tests will be packaged under OPPS.

There are some limited exceptions where hospitals may receive separate payment for otherwise packaged lab services. Does your hospital understand these exceptions and do you know how to bill to receive payment in these circumstances?

The January OPPS Update MLN Matters Article and associated transmittal explain the details of when and how to appropriately receive separate payment for packaged laboratory services.

Packaged laboratory services are separately payable in three situations:

• When a specimen is submitted for analysis to a hospital and the patient is not physically present at the hospital. These are commonly referred to as non-patient services, outreach lab services or reference lab tests.
• When laboratory tests are the hospital outpatient services that a patient receives during an outpatient encounter. For example, patients that are referred from a physician’s office or clinic to a hospital outpatient laboratory for laboratory testing only and no other outpatient services.
• When laboratory tests are clinically unrelated to other outpatient services the patient receives during an outpatient encounter and the lab tests are ordered by a different practitioner than the one who ordered the other (non-lab) outpatient services.

For 2014, the packaged laboratory tests have a status indicator (SI) of “N” (packaged) – so how are hospitals to receive separate payment?

CMS is allowing hospitals to bill laboratory tests provided in any of the above listed exceptions on a 14X type of bill (TOB). Prior to this year, only non-patient services were required to be billed on a 14x TOB. Most outpatient laboratory services were generally billed on a 13x TOB. For 2014, in order to receive separate reimbursement for packaged laboratory services a hospital must submit the lab charges on a 14x claim. It is the hospital’s responsibility to determine which lab services meet the criteria for separate payment and therefore are appropriate for a 14x claim.

There are some exceptions to packaging of laboratory services:

• CMS did not package molecular pathology test codes since they are recently added laboratory codes. Since molecular pathology laboratory tests are not packaged under OPPS they should be billed on a 13x claim.
• Pathology, cytology and blood bank services are not packaged because they have a SI of “X” and are paid under OPPS, not under the CLFS.
• The status indicator for some other clinical lab tests remained “A” instead of being changed to the packaged status indicator “N” (for example new codes, screening services, and drug screening codes) so these will also still be separately paid under OPPS.

Hospitals should develop processes to ensure that lab tests that meet the criteria are submitted on a 14x claim while lab services that do not meet the criteria continue to be billed on a 13x TOB. These process changes may affect your outpatient laboratory, registration, and billing departments.