Knowledge Base Category -

CMS’s Medicare Learning Network (MLN) offers a number of articles, booklets, podcasts and other educational materials to educate providers concerning Medicare requirements. MMP encourages providers to utilize these resources but also to be aware of the topics addressed. MLN educates concerning issues that Medicare contractors or other government entities have found to be at-risk areas for non-compliance. So the benefit of the MLN products is two-fold: identification of issues that you may need to consider for internal review and guidance on achieving compliance.

For example, MLN recently released an article (SE1401) on overpayments identified by Recovery Auditors when the wrong admission source is reported for a patient transferred from an acute care stay to a distinct-part psychiatric unit in the same facility. Inpatient psych facilities receive additional payment for the first day of admission if the facility has a qualifying emergency department. This payment is not appropriate if the patient is transferred from acute care to psych within the same facility. In order to prevent inappropriate overpayment, the Point of Origin for Admission or Visit Code "D" (formerly the Source of Admission Code) must be used when a patient is discharged from an acute-care stay in a hospital and transferred to the same hospital’s inpatient psychiatric Distinct Part Unit (DPU). This issue has also been identified on several OIG Hospital Compliance Audits.

This quarter’s Provider Compliance Newsletter did not address any inpatient hospital issues (perhaps due to the change in Medicare admission guidelines and the mandated delay in contractor reviews of medical necessity of admissions). Two articles did address outpatient hospital issues related to dose versus units billed for the drugs zolendronic acid (Zometa) and Adenosine. Correct billing of drug units is a long-standing compliance challenge for hospitals. Drugs units billed are based on the dosage administered and the HCPCS code description of the drug. For example, as noted in the Compliance newsletter, adenosine HCPCS code J0152 was defined as 30 mg. So an injection of 30 mg of Adenosine was properly billed as 1 unit of J0152.

Adding to the challenge of billing drug units correctly are changes in codes and/or descriptions. For 2014, Adenosine is now billed with HCPCS code J0151 which is per 1 mg – in 2014 a 30 mg injection of Adenosine will be billed as 30 units of J0151. And although the units describing Zometa have not changed, there have been 3 different codes within the past year (J3487 prior to July 1, 2013; Q2051 from July 1 through December 31, 2013; and J3489 effective January 1, 2014). In order to submit Medicare claims with compliant drug charges, hospitals must:

• have someone diligently watch for Medicare updates to drug codes and descriptions,
• verify their charge description master drug codes and “multiplier” units are correct and updated as needed, and
• ensure correct “translation” from the pharmacy module to the billing module.

One other MLN product that might be of interest to hospitals is the Discharge Planning booklet. Experienced case managers, discharge planners, and social workers are likely familiar with the information in the booklet, but it offers a good overview and links to the relevant Medicare manuals. It would be an excellent resource for new staff members dealing with discharge planning.

Providers should take advantage of the educational products provided by CMS and their area MACs. The information is good and the topics are important. And in the case of errors related to these topics, a hospital wouldn’t have much luck arguing they didn’t know the rules.

A Medicare patient presents to your hospital to have her pacemaker replaced. Is your hospital due a manufacturer’s credit because the pacemaker is still under warranty, is being recalled, or has malfunctioned? How do you know? If a credit is due, did you receive it? And if you received the credit, did you pass the appropriate information on to Medicare by including the correct modifiers and/or codes on the claim? Understanding and implementing the rules on credits for replaced devices is important in order to receive correct payment and to prevent non-compliance.

The Office of Inspector General (OIG) continues with their compliance reviews of hospitals which look at a number of high-risk issues that the OIG has previously identified. One issue that affects both inpatient and outpatient billing and appears on almost every OIG compliance audit is “manufacturer credits for replaced medical devices not reported.” For example, in four compliance audits published in September, overpayments for manufacturer credits not reported totaled almost $350,000.

Federal regulations require reductions in the inpatient (IPPS) or outpatient (OPPS) payment for the replacement of an implanted device if

1. the device is replaced without cost to the provider or the beneficiary,
2. the provider receives full credit for the device cost, or
3. the provider receives partial credit equal to or greater than 50 percent of the cost of the replacement device.

The biggest challenge for hospitals is not the billing instructions (explained below), but internal policies and processes to identify, obtain, and properly report credits from medical device manufacturers. Within the hospital, this will require coordination and communication between the hospital purchasing department, the product manufacturer, the department performing the procedure (usually cardiology or surgery), patient accounts, and possibly the physician performing the procedure.

Making this even more difficult is the government’s expectation that not only will hospitals correctly report credits they have received, but also that they be aware of when they are due a credit. The Medicare Provider Reimbursement Manual states that Medicare providers are expected to pursue free replacements or reduced charges under warranties for medical devices. The OIG discusses this in their reports as the “prudent buyer principle.”

A recent FDA rule may make the process easier for hospitals to track devices. On September 25, 2013, the FDA finalized a rule that requires most medical devices to have a “unique device identifier” (UDI). This will allow devices to be tracked from the manufacturer to the seller to the buyer to the patient. This new identifier may assist hospitals in tracking credits received and credits due them.

The instructions for reporting device credits on the Medicare claim are found in the Medicare Claims Processing manual: Chapter 3, section 100.8 for inpatient claims and Chapter 4, section 61.3 for outpatient claims.

Inpatient Claims

The important things to remember for inpatient billing regarding device credits include:

• Report condition code 49 or 50 -
• 49 Product Replacement within Product Lifecycle—Replacement of a product earlier than the anticipated lifecycle due to an indication that the product is not functioning properly.
• 50 Product Replacement for Known Recall of a Product—Manufacturer or FDA has identified the product for recall and therefore replacement.

• Report value code FD with the amount of the credit, or cost reduction, received by the hospital for the replaced device. Medicare deducts this amount from the final IPPS payment.
• Inpatient device credits only apply to specific MS-DRGs defined by Medicare. A list of the applicable DRGs can be found in MLN Matters Article MM7457.

Outpatient Claims

Outpatient claims must include:

• Modifier FB when the hospital receives a device at no cost or with full credit -
• If the replacement device costs the same or less than the device being replaced, the hospital would report a charge of less $1.01 for the replacement device.
• If the replacement device costs more than the credit for the device being replaced, the hospital would report a device charge of the difference between its usual charges for the replacement device and the device being replaced.
• Modifier FC when the hospital receives a partial credit of 50 percent or more of the cost of a new replacement device due to warranty, recall, or field action.
• Modifiers FB and FC are applied to the procedure code (not the device code)
• Medicare payment is reduced by the full offset payment amount for modifier FB and partial offset amount for modifier FC.
• Outpatient device credits only apply to specific APCs defined by Medicare. The list of applicable APCs can be found at the Hospital OPPS webpage.

MMP encourages hospitals to make sure they have sufficient systems in place to identify manufacture credits for replaced devices they are due or have received, and to perform correct billing to report these credits. Remember, the OIG is watching!

National Correct Coding Initiative (NCCI) edits have been around since 1996 and Medically Unlikely Edits (MUEs) since 2007, but do you know what they are, why they were developed, how to read the tables, and when and how to appropriately by-pass these Medicare edits? And more importantly, do you realize these edits impact your reimbursement and compliance risk?

Both sets of edits were developed by CMS to reduce inappropriate payments for Part B claims. NCCI edits are based on coding guidelines, conventions and practices and are designed to prevent improper coding and payment. CCI edits originally applied only to physician billing, but there are now tables for physicians and a subset of edits for hospital providers. There are separate MUE tables for practitioner services, facility outpatient services, and DME supplier services.

The MUE table is straightforward with a column for the CPT/HCPCS code and a column for the MUE limit. An MUE for a HCPCS/CPT code is the maximum units of service that a provider would report under most circumstances for a single beneficiary on a single date of service. Although CMS publishes most MUE values on its website, other MUE values are confidential and are for CMS and CMS Contractors' use only.  

The NCCI table includes code pairs that generally should not be reported together for a number of reasons as explained in the Coding Policy Manual. If both codes of a code-pair edit are reported together for the same date of service by the same provider without an NCCI-modifier, the column 1 code will be paid and the column 2 code will be denied. In addition to the code pair, effective date, and deletion date if applicable, the table includes a modifier indicator that indicates if a modifier is allowed to by-pass the CCI edit when appropriate. An indicator of “1” means a modifier is allowed, “0” means a modifier is not allowed to by-pass the edit and “9” is not applicable (canceled edits).

NCCI edits and MUEs are updated quarterly. The latest versions of the edits are available on Medicare’s NCCI webpage. Also, Medicare publishes the revisions for the quarter for both CCI edits and MUEs.   The MUE updates include additions, deletions, and revisions to the MUE quantity. The CCI edits include additions, deletions and revisions to the modifier indicator.

Tips on Dealing with the Edits

• First and foremost, modifiers should only be used to by-pass the edits when it is appropriate to do so.
• Modifiers are allowed for CCI edits when separate procedures are performed, such as a separate encounter, separate anatomic sites, or separate specimens. Modifiers are appended to the column 2 code of a code pair.
• For MUEs a modifier would be appropriate when the quantity performed exceeds the MUE limit. Separate line items must be reported on the claim so that no single line item quantity exceeds the MUE limit. Modifiers are added to the second and additional line items.
• There are “date of service” MUEs that cannot be bypassed with a modifier. All units of a code with a date of service MUE are denied if the quantity for that date exceeds the MUE limit.
• Acceptable modifiers to by-pass edits include anatomic modifiers: E1-E4, FA, F1-F9, TA, T1-T9, LT, RT, LC, LD, RC, LM, RI; global surgery modifiers: 24, 25, 57, 58, 78, 79; and other modifiers: 27, 59, 91.
• Refer to the NCCI Policy Manual for a better understanding of the edits and their reasoning. There is a general chapter and then chapters for each CPT/HCPCS code group (such as codes 80000-89999). This manual contains valuable information about correct coding and the edit principals.
• Coders generally apply modifiers for surgical codes when appropriate, but ancillary code pairs may not be identified until processing through facility billing systems. Input from the ancillary department is often necessary to know if it is appropriate to append a modifier to by-pass the code-pair edit. Hospital billers should have a system in place and contact people in the ancillary areas to assist with CCI edits.

NCCI edits and MUEs apply to Medicare and Medicaid claims. Some other payers may also expect providers to follow the edits. MMP recommends you check with payers to determine if they follow these edits or perhaps have some “coding” edits of their own.

The Office of Inspector General (OIG) recently released the report Medicare Incorrectly Paid Hospitals for Beneficiaries Who Had Not Received 96 or More Hours of Mechanical Ventilation. In fact, the report indicates that in the calendar years 2009 – 2011, Medicare overpaid hospitals $7.7 million.

Background

The OIG has done prior hospital compliance reviews of claims with MS-DRGs requiring 96 or more hours of mechanical ventilation. In past reviews the OIG found erroneous claims and as such this review was performed to determine whether payments made to hospitals for MS-DRGs requiring 96 or more hours of mechanical ventilation were correct. Hospitals use procedure code 96.72 (Continuous invasive mechanical ventilation for 96 consecutive hours or more) to identify these patients. This review focused specifically on two MS-DRGs:

• MS-DRG 207: Respiratory System Diagnosis with Ventilator Support 96+ Hours and
• MS-DRG 870: Septicemia or Severe Sepsis with Mechanical Ventilation 96+ Hours.

Audit by the Numbers

• $12,764,239: The amount of Medicare Part A payments covered in this audit.
• 290: The number of hospitals included in this audit.
• 377: The number of inpatient claims that were selected as at risk for billing errors.
• 4 days or less: This audit reviewed claims where the length of stay was 4 days or less.
• 14: The number of records where the Medicare payment was correct.
• 363: The number of records where the Medicare payment was incorrect due to the beneficiary not receiving 96 or more hours of mechanical ventilation.
• $7,714,825: The overpayments made by Medicare to the hospitals

As part of the audit process the OIG had the hospitals conduct an internal review of the claims to determine if the services had been billed correctly. The OIG also requested that the hospital provide them with the “itemized bills and medical record documentation, including timelog for the mechanical ventilation and summary of the inpatient stay to determine whether the beneficiaries had received 96 or more hours of mechanical ventilation.”

The report indicates that “the hospitals confirmed that these claims were incorrectly billed and generally attributed the errors to incorrectly counting the number of hours that beneficiaries had received mechanical ventilation or to clerical errors in selecting the appropriate procedure code.”

Centers for Medicare and Medicaid Services (CMS) Response and Action Plan

The OIG found that CMS did not have controls in place to identify the incorrectly paid claims. Since this review, CMS “implemented a new length-of-stay edit for continuous invasive mechanical ventilation for 96 consecutive hours or more. With this edit, effective October 1, 2012, claims found to have procedure code 96.72 and a length of stay fewer than 4 days are returned to the provider for validation and resubmission.”

Is Correct Coding of Ventilator Hours still on the Radar?

Since this review focused on 2009 through 2011 calendar year claims and an edit was put in place as a control to identify incorrectly paid claims, you may be thinking that this should no longer be an issue. However, other Contractors continue to review and or monitor correct coding of ventilator hours. Before we walk through a timeline of who is reviewing this issue it is important to note that most reviewers have expanded their efforts beyond MS-DRGs 207 and 870 to also include the following MS-DRGs:

• MS-DRG 003: Ecmo or Tracheostomy with Mechanical Ventilation 96+ Hours or Principal Diagnosis Except Face, Mouth and Neck with Major O.R.
• MS-DRG 004: Tracheostomy with Mechanical Ventilation 96+ Hours or Principal Diagnosis Except Face, Mouth and Neck without Major O.R.
• MS-DRG 927:Extensive Burns or Full Thickness Burns with Mechanical Ventilation 96+ Hours with Skin Graft
• MS-DRG 933: Extensive Burns or Full Thickness Burns with Mechanical Ventilation 96+ Hours without Skin Graft

Timeline of Review Efforts around Correct Coding of Ventilator Hours:

• Medicare Quarterly Compliance Newsletter October 2011: In the Volume 2, Issue 1 - October 2011 newsletter the CMS reported that Recovery Auditors reviewed MS-DRGs 003, 004, 207, 870, 927 and 933 due to Providers not adding the correct number of Ventilator hours during an inpatient admission. This Newsletter provides examples of their findings and education resources for hospitals.

• Cahaba GBA, the Medicare Administrative Contractor (MAC) for Alabama, Georgia and Tennessee completed a widespread probe review of MS-DRG 270 and posted the findings to their website on November 14, 2011. Their focus was on coding accuracy and medical necessity for acute inpatient hospitalization. One issue identified was that “documentation did not confirm 96 consecutive hours on ventilator support.” They took no further action as a result of this review but continue to monitor utilization through data analysis to see if further reviews are needed.

• The Program for Evaluating Payment Patterns Electronic Report (PEPPER) is now into their 12th Edition of the Short-Term Acute Care Hospitalizations Users Guide. Ventilator Support has been an at risk target since their 6th Edition Users Guide. Internally, providers can view their report to see if they are an outlier and follow the audit recommendations in the report.

• In the 2013 OIG Work Plan, the OIG indicated that “We will review Medicare payments for mechanical ventilation to determine whether the DRG assignments and resultant payments were appropriate. We will review selected Medicare payments to determine whether patients received fewer than 96 hours of mechanical ventilation. Mechanical ventilation is the use of a ventilator or respirator to take over active breathing for a patient. CMS requires that claims be completed accurately to be processed correctly and promptly. For certain DRG payments to qualify for Medicare coverage, a patient must receive 96 or more hours of mechanical ventilation.”

As you can see this is certainly not a new issue and hospitals need to remain vigilant in their efforts to correctly code ventilator hours.

This seems to be the year for some big changes from Medicare. As providers are wondering what will happen with the major revisions to OPPS, Medicare finalized two policies relating to patient status in the final IPPS rule that are equally dramatic. The two interrelated policies are designed to reduce the frequency of inappropriate extended observation care and provide appropriate payment for necessary inpatient services. Next week, we will address the revisions concerning the admission and medical review criteria for hospital inpatient admissions. This week we examine the Part B Inpatient Billing requirements.

In the 2014 IPPS final rule, CMS finalized the requirements of the proposed rule for Part B inpatient billing when an inpatient admission is determined to not be medically necessary. When this rule becomes effective on October 1, 2013, it replaces the current Part A to B rebilling regulations under the Ruling that was published on March 13, 2013. The major significant differences of the Final Rule from the Ruling concern the allowance of Part B inpatient billing as the result of a hospital self-audit and the application of timely filing.

Here is a summary of the requirements of the Final Rule. For complete information, please refer to the IPPS final rule which is scheduled to be published in the Federal Registry on August 19th. Until that time a display copy can be viewed at 2014 IPPS Final Rule display copy.

If a hospital inpatient admission is determined to not be medically necessary after a patient’s discharge, the hospital may decide to submit a Part B inpatient claim for all services provided to the patient during the admission.

Who makes the determination the admission is not medically necessary?

• This decision could be made by CMS or a Medicare contractor as a denial, upon medical review of the inpatient claim. In this case, the hospital may decide to appeal the Part A denial or submit a Part B inpatient claim (a 12x type of bill).
• The decision could be made by the hospital as part of a utilization review “self-audit” in accordance with the Medicare Conditions of Participation UR guidelines. If the hospital determines an inpatient admission is not medically necessary after the patient’s discharge, the hospital may bill for Part B inpatient services.

What type of hospitals can submit Part B inpatient claims?

• All hospitals billing Part A services are eligible to bill Part B inpatient services, including short-term acute care hospitals paid under IPPS, hospitals paid under OPPS, LTCHs, IPFs, IRFs, CAHs, children’s hospitals, cancer hospitals, and Maryland waiver hospitals.

What services can be included on the Part B inpatient claim?

• All hospital services that were furnished to an inpatient (after the order for inpatient admission) and would have been reasonable and necessary if the patient had been treated as an outpatient, except for those services specifically requiring an outpatient status. The excluded outpatient services are diabetes self-management training services (DSMT), outpatient visits including ED visits, and observation services. Outpatient services provided prior to the admission order may be billed on a Part B outpatient claim (see below for more information).
• In the proposed rule, rehabilitative therapy services (physical therapy, occupational therapy, and speech language pathology services) were proposed to be excluded as strictly “outpatient” services. This proposal was not finalized; providers may continue to include therapy services on Part B inpatient claims. However, these therapy services will be subject to the Part B therapy caps, the therapy caps exception process, the manual medical review process, and all other requirements for payment and coverage of therapy services under Part B such as functional status reporting requirements.

When can outpatient services furnished during the 3-day (1-day for non-IPPS hospitals) payment window be billed separately?

• When there is no Part A coverage for the inpatient stay, services provided to the patient prior to admission may be separately billed to Part B as outpatient services (13x type of bill). This includes any outpatient visits or observation services provided prior to the admission order.

When can Part B inpatient claims be submitted?

• The “expanded” Part B inpatient services can only be billed when payment cannot be made under Part A because the inpatient admission was not reasonable and necessary. This new policy does not apply to other circumstances when there is no Part A payment, such as when a beneficiary exhausts or is not entitled to Part A benefits.
• A Part B inpatient claim cannot be submitted if there is a current Part A claim. Any corresponding Part A claims must be canceled by the provider or denied by Medicare and any pending appeals must be withdrawn by the provider. A Part A “no pay/provider liable” claim must be submitted first if the decision to bill Part B inpatient claim is made as part of a hospital “self-audit”. Once the Part A claim denial is posted in the claims history, the Part B claim(s) can be submitted.
• The final rule applies timely filing requirements for services with dates of admission on and after October 1, 2013. Both Part B inpatient and outpatient claims must be filed within one calendar year after the date of service.
• Medicare allowed an extension of the Ruling time frames - hospitals may follow the Part B billing timeframes established in the Ruling after the effective date of the final rule, provided (1) the Part A claim denial was one to which the Ruling originally applied; or (2) the Part A inpatient claims has a date of admission before October 1, 2013, and is denied after September 30, 2013 on the grounds that although the medical care was reasonable and necessary, the inpatient admission was not.

What information must be included on the Part B claims?

• The hospital must furnish information as may be necessary in order to determine the amounts due for the services billed on the Part B outpatient or inpatient claims.
• This means re-coding to itemize the outpatient services provided with HCPCS codes as required and diagnosis coding for the time period of the claim. Providers will need to consider appropriate coding to support the medical necessity of the Part B services furnished.

What if the hospital determines the inpatient admission is not medically necessary prior to the patient’s discharge?

• This new policy does not change the existing regulations concerning changing a patient’s status from inpatient to outpatient following the condition code 44 requirements.

Does the patient’s status change if a Part B inpatient claim is submitted and how does this affect utilization days and the skilled nursing facility (SNF) 3-day qualifying stay?

• The patient’s status remains inpatient because there is no provision to change a patient’s status after he or she is discharged from the hospital.
• Medicare will not deduct the days associated with the inpatient hospital stays billed under Part B from a beneficiary’s 150 utilization days when no Part A payment is made for that inpatient hospital stay.
• The 3-day inpatient hospital stay which qualifies a beneficiary for “post-hospital” SNF benefits does not have to be covered by Medicare, as long as it is does not represent a “substantial departure from normal medical practice”. This means that most denied hospital inpatient stays will meet the requirements to qualify the patient for SNF coverage because the care was medically necessary, although the admission was not. An exception would be if the admission was solely for the purpose of qualifying the beneficiary for the SNF stay and therefore was a substantial departure from normal medical practice.

What is the patient’s liability and must hospitals bill the patient for their liability?

• If a Part A admission is denied as not reasonable and necessary and the patient is not liable under section 1879 of the Act, the hospital must refund Part A deductible and co-payment amounts paid by the patient and other insurers.
• The patient (Medicare beneficiary) is responsible for applicable deductible and co-payment amounts for covered Part B services and the cost of services excluded from coverage such as self-administered drugs.
• If the beneficiary is not enrolled in Part B, hospitals should bill Part B to ensure the claim enters the coordination of benefits cross-over process in the event the beneficiary has coverage under a supplemental or secondary insurance plan.
• The issue of whether hospitals are required to bill the beneficiaries for their Part B liabilities is governed by the beneficiary inducement and anti-kickback laws and falls under the jurisdiction of the OIG.

May appeals adjudicators require payment under Part B if a Part A denial is upheld?

• No, appeals adjudicators may only consider the claim that is before them and may not order payment for items or services that have not yet been billed.

I realize this is a lot of information to absorb. You may want to print this article to use as a resource for future questions. MMP plans to present a webinar prior to October 1st to address both the Part B inpatient billing and the new admission criteria. Be on the lookout in the Wednesday@One for> announcements about this upcoming webinar.

This material was compiled to share information. MMP, Inc. is not offering legal advice. Every reasonable effort has been taken to ensure the information is accurate and useful.

One of the frustrations of dealing with the overwhelming volume of reviews by Medicare contractors is often the lack of guidance from Medicare on how to handle a particular issue. In June, CMS released several MLN Matters SE articles concerning some of the findings of CERT and Recovery Auditors. These articles describe the issue and the corrective actions necessary for providers to resolve the issue. Although some of these are obvious resolutions – such as, only one cataract removal per eye – I wanted to point out the information on Mohs surgery and also make you aware of some of the other issues that are addressed.

The correct billing of Mohs Micrographic Surgical (MMS) services affects both hospitals and physicians and recent Recovery Auditor reviews have revealed errors in the billing of MMS. Medicare will only reimburse for MMS services when the Mohs surgeon acts as both surgeon and pathologist. Providers should not bill Medicare for these procedures if preparation or interpretation of pathology slides is performed by a physician other than the Mohs surgeon.

Mohs surgery is a two-step process where the tumor is removed in stages with histologic evaluation after each stage until all margins are clear. The performing physician serves as both surgeon and pathologist, performing both the excision and histologic evaluation of the specimen. The CPT codes for MMS (CPTs 17311-17315) should not be billed with separate CPT codes for the histologic evaluation of the tumor tissue removed. If the histology is performed by another physician, the excision should be billed with the standard malignant tissue excision codes (CPT 11600-11646) and the histologic evaluation with the surgical pathology code (CPT 88305).

Other Medicare requirements for coverage of Mohs surgery include:

• The surgery must be of a higher degree of complexity that most skin cancers, such as poorly defined borders, possible deep invasion, prior irradiation or when maximum conservation of tumor-free tissue is important.
• Only physicians (MDs or DOs) specifically trained and highly skilled in MMS techniques and pathological identification may perform Mohs surgery.
• Medical record documentation should support the medical necessity of the procedure including the location, number and size of the lesions; the number of stages; the number of specimens per stage; and a detailed description of the histology of the specimens.

For complete information, please read MLN Matters Article SE1318.

Issues addressed by other MLN Matters SE articles include:

• Appending modifiers to duplicate services billed for the same patient on the same date – SE1314.
• Billing the correct drug units by converting dosage of drugs given (such as milligrams) to units based on HCPCS description – SE1316.
• Billing cataract removal only once per eye – SE1319.
• Being sure to include the code for the primary service when billing add-on codes – SE1320.
• Appropriate bundling of outpatient services onto the inpatient claim under the 3-day window billing rule – SE3124.

On March 13, 2013, CMS released a Ruling and a Proposed Rule that changes Medicare’s existing policy and allows payment of all Part B hospital services that were furnished and would have been reasonable and necessary if the patient had been treated as an outpatient, rather than admitted as an inpatient, except for those services specifically requiring an outpatient status. CMS also released Change Request 8185 with billing instructions for Part B rebilling to be implemented July 1, 2013 and discussed the Part B rebilling rules on the April 2 Hospital Open Door Forum call. But even with all this information, there are parts of the new rules that remain somewhat confusing. We thought we would address some questions to hopefully clear some of the confusion. Note that more information is expected from CMS soon and we will do our best to keep you up to date.

What services go on the Part B outpatient claim (13x type of bill) and what services go on the Part B inpatient claim (12x type of bill)?

Outpatient services that were bundled into the Part A inpatient claim under the 3-day payment window rule can be separately billed on an outpatient claim (13x TOB) if the inpatient admission is determined to be not reasonable and necessary. Therefore services that were provided before the inpatient order was written would be on the 13x claim.

Part B services that were provided after the patient was admitted (after the admission order was written) would be eligible to be billed on the Part B inpatient claim (TOB 12x). Services that require an outpatient status, such as ER services and observation services, would not be provided after the inpatient admission order was written, so these types of services are not allowed on the 12x claim.

When can claims for Part B rebilling be submitted?

The Ruling was effective March 13, 2013 but Medicare has to work out the details of claims submission and allow the processing contractors time to put changes in place to accept the claims. Medicare published CR 8185 with billing instructions, but this CR will not be implemented until July 1, 2013. CMS has promised interim billing instructions to be released soon. Once these interim instructions are released, Part B rebilling claims can be submitted.The interim billing instructions are now available at http://www.cms.gov/Center/Provider-Type/Hospital/Other-Content-Types/Quick-Reference-CMS-1455-R.pdf

Which previously denied claims are eligible for rebilling?

The ruling applies to claims denied after March 13, 2013, claims with pending appeals, and claims denied prior to March 13th that are still within the appeals timeframe. On the latter point, if claims were within the appeals timeframe as of March 13th, do they remain eligible for rebilling even when they are beyond the appeals timeframe? As providers wait on billing instructions from CMS, claims that were still eligible for appeal as of March 13th will have their appeals timeframe expire. But in listening to the Hospital Open Door Forum, CMS’s comments seem to indicate that these claims would remain eligible for rebilling until the 180 days post denial date. CMS even indicated that denials from November 8, 2012, which is 125 days prior to March 13th (120 appeals timeframe plus 5 mailing days) would be eligible for rebilling under this rule until May 7, 2013 (180 days from 11/8/12). This means that providers would not have to appeal previously denied claims to maintain their billing rights under the Ruling. This gives CMS some time to develop billing instructions without impacting providers’ rebilling opportunities.

Can rehabilitative therapy services be included on a Part B inpatient claim?

Under current regulations, outpatient therapy services (PT, OT, and SLP services) are included in the list of “Part B only” services and may be billed on a Part B inpatient, 12x type of bill. Billing of therapy services will also be allowed under the Ruling. But, in the proposed rule for Part B rebilling, Medicare notes such “therapy” services are defined in section 1833 (a) (8) of the Act as outpatient services. Since “services specifically requiring an outpatient status” are not allowed to be billed on an inpatient claim under the proposed rule, rehabilitative therapy services (physical therapy, occupational therapy, and speech language pathology services) cannot be billed on the Part B inpatient claim once the proposed rule is finalized. So any therapy services that are provided to the patient after he/she is admitted will not be billable, unless Medicare further modifies the policy.

>

On March 13, 2013, CMS released a ruling (Ruling 1455-R) with a HUGE impact for hospitals. This ruling is in light of the numerous recent appeal decisions by Administrative Law Judges (ALJs) and the Medicare Appeals Council to allow payment for Part B services when an inpatient admission is determined to not be medically necessary. This interim ruling is effective immediately and remains in effect until the corresponding proposed CMS rule entitled, "Medicare Program; Part B Billing in Hospitals" is finalized. Note that there are differences in the requirements of the ruling versus the proposed rule. This article discusses the currently effective Ruling only.

The Ruling allows hospitals to bill and receive payment for all reasonable and necessary Part B services provided to a hospital inpatient when a Medicare review contractor denies the Part A inpatient admission as not reasonable and necessary.

On Friday, March 22, 2013, CMS released Transmittal 1203 (CR 8185) which details the claims requirements for Part B rebilling. Although this transmittal is effective March 13, 2013, the implementation date is not until July 1, 2013. Therefore, hospitals cannot bill under the instructions of CR 8185 until July 2013. Further instructions from Medicare regarding billing in the interim are expected to be released soon. As indicated in our Extra newsletter yesterday, if you have a denied claim that has not been appealed and is approaching the end of the appeal timeframe, you should appeal the claim now in order to reserve your right to request a dismissal and bill under Part B once the billing instructions are released.

The key points from the Ruling are: 

• The ruling applies to
• Inpatient denials on or after the date of this ruling (March 13, 2013),
• Prior inpatient denials still within the appeal timeframe or
• Prior inpatient denials with an appeal pending.
• The ruling does not apply to
• Prior inpatient denials if the timeframe to appeal has expired, or
• Inpatient admissions determined by the hospital to not be medically necessary, such as during UR or other internal review.
• Hospital may submit a Part B inpatient claim for all reasonable and necessary Part B services that would have been payable if the patient had been treated as an outpatient –
• It is not limited to “Part B only” services described in Medicare Benefit Policy Manual, Chapter 6, Section 10. Prior to this ruling, a hospital could only bill selected services on a 12x type of bill when an inpatient admission was not allowed. These services are referred to as “Part B only” services, are listed in the policy manual referenced above, and include mostly laboratory tests and imaging studies. They did not include therapeutic services such as drug administrations, surgery, or therapeutic coronary or peripheral interventions. Under the Ruling, these types of services will be allowed to be billed on the Part B inpatient claim if the Part A stay was denied as not medically necessary by a Medicare contractor.
• Outpatient services that require an outpatient status, such as outpatient visits, ER services, and observation services may not be submitted on the Part B inpatient claim. These types of services may occur immediately prior to the inpatient admission and can be billed on an outpatient claim (see next bullet point regarding the 3-day window). Only Part B services occurring during the inpatient admission (i.e. after an inpatient admission order) would be included on the Part B Inpatient claim.
• Reasonable and necessary outpatient services provided during the 3-day payment window prior to inpatient admission may be billed separately on an outpatient claim if the inpatient admission is denied as not medically necessary. This ruling allows billing of this outpatient claim beyond the usual timely filing restrictions in accordance with the time frames listed below.
• The hospital may not have simultaneous requests for both Part A and Part B payment:
• The hospital must withdraw any Part A appeals in order to submit Part B claims for the same services.
• The hospital may not initiate a Part A appeal after submitting a Part B claim for the same services.
• The Part B billing may occur past normal timely filing limitations as long as it is:
• Within 180 days from the date of receipt of an appeal dismissal notice or,
• Within 180 days from the date of receipt of a final denial decision or,
• Within 180 days from the from the date of receipt of the initial or revised determination on the Part A inpatient claim (that is, the date of the remittance advice).

(Note the date of receipt of an initial or revised determination, or an appeal decision or dismissal notice is presumed to be 5 days after the date of such notice or decision, unless there is evidence to the contrary.)

• For the Part B claims billed under this Ruling, the beneficiary's patient status remains inpatient as of the time of inpatient admission and is not changed to outpatient.
• The Part A to Part B Rebilling Demonstration is being terminated. CMS will inform participating hospitals that the Part A to Part B Rebilling Demonstration is being terminated and will provide the necessary instructions.
• The ruling clarifies Medicare appeals adjudicators’ scope of review. Administrative Law Judges (ALJs) may no longer award payment for Part B services when the Part A claim is denied. According to the Office of Medicare Hearings and Appeals (OMHA), “The Ruling explains that adjudicators may only consider the originally billed Part A inpatient admission denial. Adjudicators may not consider potential coverage under Part B because hospitals are solely responsible for determining whether to bill for services under Part A or Part B, and submitting the appropriate claims.”
• Beneficiaries will be responsible for their usual Part B financial obligations under the ruling. Part A copayments or the difference must be refunded to the patient if the Part A amount is greater than the Part B amount.

For more information, see the CMS Ruling and the MLN Matters Article MM8185 concerning Part B Inpatient Billing in Hospitals.

>

The HCPCS codes for the drug medroxyprogesterone acetate changed at the beginning of this year. Medroxyprogesterone acetate is known by the brand names of Depo-Provera, Provera, Prempro, Depo-Provera Contraceptive, Cycrin, Lunelle, Premphase, Amen, depo-subQ provera 104, Curretab, Premphase 14/14.

The “old” codes (for dates of services prior to January 1, 2013) were:

• J1051 – Injection, medroxyprogesterone acetate, 50 mg*
• J1055 - Injection, medroxyprogesterone acetate for contraceptive use, 150 mg*

For dates of service on and after January 1, 2013, the following code replaces the above codes:

• J1050, Injection, medroxyprogesterone acetate, 1 mg

As a result of this code change, Alabama Medicaid is requiring the use of a modifier to distinguish between use of the drug for contraceptive use and other (non-contraceptive) uses. Modifier FP is used to indicate the injection of the drug for contraceptive use and modifier U1 indicates non-contraceptive use. The Medicaid Alert also lists the following restrictions for usage.

Contraceptive Use Restrictions (J1050-FP)

• Limited to female recipients 10-55 years of age
• Dosage of 104 – 150 mg per injection
• Allowed once every 70 days
• Claim must include a contraceptive management diagnosis code

Non-contraceptive Use Restrictions (J1050-U1)

• Covered for recipients of all ages
• Limited to 1000 mg per injection
• Claim must not include a contraceptive management diagnosis code

Providers should report the drug units based on the new “per 1 mg” description – for example 150 mg would be billed with 150 units, 500 mg with 500 units. Alabama Medicaid reimburses J1050 at $ 0.20 per unit (per mg). Claims for J1050 billed without a modifier will be denied by Alabama Medicaid. See the link above for complete information.

On November 8, 2012, CMS released MLN Matters Article SE1232 with a series of frequently asked questions and answers about the 3-day payment window. However, these are the same FAQs that CMS published in June of this year. information in the August 15, 2012 Wed@One – search the client section of our www.mmplusinc.com ) using the word “window” to review this article). Also, CMS finally updated the manual instructions for the 3-day payment window in August of this year in Transmittal R2539CP concerning the 2013 IPPS changes. So, even though this information is not exactly new, the 3-day payment window regulations are so complex that another review of the more difficult aspects of this rule never hurts.

Since it is a 3-day rule (not 72 hours), I like to break the rule down into three separate components so I can better understand it.

1. All services on the day of inpatient admission must be bundled into the inpatient claim.
2. All diagnostic services within the payment window (3 days for IPPS hospitals), must be bundled into the inpatient claim, whether related or not.
3. A service is “diagnostic” if it is an examination or procedure to which you subject the patient, or which you perform on materials derived from a hospital outpatient, to obtain information to aid in your assessment of a medical condition or to identify a disease.
4. For this provision, diagnostic services are defined by the presence on the bill of the particular revenue and/or CPT codes specified in the Medicare Claims Processing Manual, Chapter 3, Section 40.3.
5. All non-diagnostic services within the payment window that are related to the reason for inpatient admission must be bundled into the inpatient claim.
6. It is the responsibility of the hospital to determine if non-diagnostic services are clinically related to the inpatient admission. Hospitals should carefully consider how and who to best accomplish this determination and communicate that to billing.
7. Non-diagnostic services within the payment window that are not related may be submitted on a separate outpatient claim. Hospitals attest that these services are unrelated by adding condition code 51 on the outpatient claim.

Other, more challenging, aspects of the 3-day payment window regulations include:

• The 3-day rule does not apply if there is no Part A coverage for the inpatient admission. This means that if an inpatient admission does not meet inpatient criteria and is billed as a no-pay inpatient claim or is denied as not medically necessary, the 3-day rule does not apply. Outpatient services prior to such inpatient admissions can be billed separately on an outpatient claim.
• Services furnished more than 3 days preceding the date of the inpatient admission are not part of the payment window, even when furnished during a single, continuous outpatient encounter. Services prior to the 3 calendar days should not be bundled into the inpatient claim, but should be billed separately on an outpatient claim.
• The 3-day payment window applies to physicians’ practices and other entities that are wholly-owned or operated by the hospital where the patient is admitted. Guidance on combining these services can be found in the Medicare Claims Processing Manual, Publication 100-04, Chapter 12, Sections 90.7 and 90.7.1.
• Hospitals must include on a Medicare claim for a beneficiary’s inpatient stay the diagnoses, procedures, and charges for all services bundled under the 3-day payment window rule. This will require the coordination of billing and coding to combine charges, include and appropriately sequence diagnosis codes for the combined outpatient/inpatient services, and convert combined outpatient procedures to ICD-9-CM procedure codes for the inpatient claim.

And one final very scary thought on the 3-day payment window – in this year’s Office of Inspector General’s (OIG) Work Plan , the OIG states they will “analyze claims data to determine how much CMS could save if it bundled outpatient services delivered up to 14 days prior to an inpatient hospital admission into the diagnosis related group (DRG) payment. OIG work has also concluded that CMS could realize significant savings if the DRG window was expanded from 3 days to 14 days.”