Knowledge Base Category -
Background
What is PEPPER: “PEPPER is an electronic data report that contains a single hospital’s claims data statistics for Medicare Severity Diagnosis Related Groups (MS DRGs) and discharges at risk for improper payment due to billing, coding, and/or admission necessity issues… PEPPER does not identify the presence of payment errors, but it can be used as a guide for auditing and monitoring efforts. A hospital can use PEPPER to compare its claims data over time to identify potential areas of concern, including significant changes in billing practices; possible over- or under-coding; and changes in length of stay.” ¹
PEPPER Target Areas: “In general, the target areas are constructed as ratios and expressed as percents; the numerator represents discharge that have been identified as problematic, and the denominator represents discharges of a larger comparison group.” ¹
Program Paused: On February 8, 2024, CMS temporarily paused PEPPER to "improve and update the program reporting system."
Program Resumption Key Takeaways
August 2025: A notice on the PEPPER website indicated “The site is currently testing with select PEPPER recipients and PEPPER Portal access is limited to these users. Thank you for your patience and please check back soon for updates on full availability.” Index Analytics (IA), and its partners Integrity Management Services, Inc. and GovCon Growth Solutions were listed in a limited release PEPPER User’s Guide as being under contract with CMS to develop and distribute the PEPPER.
December 10, 2025: A PEPPER Short-Term Acute Care User’s Guide was released.
What’s New in December 2025 PEPPER Short-Term Acute Care User’s Guide
As compared to the 36th Edition of the User’s Guide, the same Target Area’s continue to be active for FY 2025. However, two Target Areas were impacted due to changes to the Percutaneous Cardiovascular Procedures DRGs effective October 1, 2023.
Target Area: Surgical Complication and Comorbidity (CC) Major Complication and Comorbidity (MCC) modification as of Quarter 1 (Q1) of Fiscal Year (FY) 2024 (Q1FY2024)
DRGs 246 and 248 were removed and replaced with the following two new DRGs effective October 1, 2023:
DRG 321: Percutaneous cardiovascular procedures with intraluminal device with MCC or 4+ Arteries/Intraluminal Devices, and
DRG 322: Percutaneous cardiovascular procedures with intraluminal device without MCC.
Target Area: Percutaneous Cardiovascular Procedures modification as of Q1FY 2024
DRGs 246, 247, 248, and 249 were removed and replaced with the above 2 new DRGs listed above (321 and 322).
PEPPER User’s Guide Suggested Intervention for Outliers
While there are no new Target Areas, I want to call your attention to the Target Area Respiratory Infection. If you are a high outlier, Table 3 of the User’s Guide lists the following suggestions:
- This could indicate potential coding or billing errors related to over-coding for DRGs 177 or 178.
- Review a sample of medical records for these DRGs to determine whether coding errors exist.
- To ensure documentation supports the principal diagnosis, hospitals may generate data profiles to identify cases with the following principal diagnosis codes:
- International Classification of Diseases, Tenth Revision, Clinical Modifications (ICD-10-CM) code J69.0 (pneumonitis due to inhalation of food or vomit)
- ICD-10-CM code J15.69 (Pneumonia due to other Gram-negative bacteria)
- ICD-10-CM code J15.8 (pneumonia due to other specified bacteria)
The User’s Guide does not include information regarding COVID-19. Specifically, when the COVID-19 ICD-10-CM code U07.1 is the principal diagnosis, a claim will group to the DRG group 177,178, and 179. Analysis of RealTime Medicare Data (RTMD) Medicare Fee-for-Service paid claims data tells us that in the first three quarters of the CMS FY 2025 (October 1, 2024 – June 30, 2025):
- Nationwide, DRGs 177 and 178 represented 34.97% of all volume for the six Respiratory Infections Target Area denominator DRGs (see Table 1), and
- ICD-10-CM diagnosis code U07.1 represented 41.95% of all volume for DRGs 177 and 178 (see Tables 2 and 3).
If you are a high outlier for this Target Area, a first step may be to identify the percentage of your claims where ICD-10-CM code U07.1 was the principal diagnosis.
Next Steps
CMS is hosting a webinar on January 6, 2026 from 1-2PM ET to provide guidance on recent changes made to PEPPER, review reports and provide a Q&A session. You will find a link to register for this webinar in the December 18, 2025 edition of the CMS MLN Connects Newsletter. ² Also, Palmetto GBA has posted an article about the relaunch of PEPPER that includes information about accessing PEPPER and download reports. ³
Appendix A: RTMD Medicare FFS Paid Claims Data for Dates of Service October 1, 2024 to June 30, 2025 ⁴
|
Table 1: Nationwide Claims Volume All DRGs in Respiratory Infections Target Area Denominator |
||
|
DRG and Description |
Volume |
% of Volume |
|
177-RESPIRATORY INFECTIONS AND INFLAMMATIONS WITH MCC |
89,508 |
28.25% |
|
178-RESPIRATORY INFECTIONS AND INFLAMMATIONS WITH CC |
21,299 |
6.72% |
|
179-RESPIRATORY INFECTIONS AND INFLAMMATIONS WITHOUT CC/MCC |
3,688 |
1.16% |
|
193-SIMPLE PNEUMONIA AND PLEURISY WITH MCC |
140,825 |
44.45% |
|
194-SIMPLE PNEUMONIA AND PLEURISY WITH CC |
51,734 |
16.33% |
|
195-SIMPLE PNEUMONIA AND PLEURISY WITHOUT CC/MCC |
9,764 |
3.08% |
|
Grand Total |
316,818 |
100.00% |
Key Takeaway: Collectively, nationwide claims for Q1, Q2, and Q3 of FY 2025, DRGs 177 and 178 represented 34.97% of all volume for the six DRGs included in the Respiratory Target Area Denominator.
|
Table 2: DRG 177 Claims with COVID-19 Principal Diagnosis |
||
|
DRG 177-RESPIRATORY INFECTIONS AND INFLAMMATIONS WITH MCC |
Volume |
% of Volume |
|
U07.1-COVID-19 |
37,367 |
41.75% |
|
Grand Total all DRG 177 claims |
89,508 |
100.00% |
|
Table 3: DRG 178 Claims with COVID-19 Principal Diagnosis |
||
|
DRG 178-RESPIRATORY INFECTIONS AND INFLAMMATIONS WITH CC |
Volume |
% of Volume |
|
U07.1-COVID-19 |
9,116 |
42.80% |
|
Grand Total all DRG 178 claims |
21,299 |
100.00% |
Key Takeaway: COVID-19 was the top principal by volume for DRGs 177 and 178.
References
¹ Short-term Acute Care Hospitals December 2025 PEPPER User’s Guide accessed 12/16/2025 from https://pepper.cbrpepper.org/training-short-term-acute-care.html
² December 18, 2025 edition of CMS’ MLN Connects Newsletter accessed 12/18/2025 at https://www.cms.gov/training-education/medicare-learning-network/newsletter/mln-connects-newsletter-december-18-2025#_Toc216870501
³ Palmetto GBA Article: Relaunch of PEPPER for Short-Term Acute Care Hospitals: Published 12/19/2025 at https://palmettogba.com/jja/did/yw9jbpng4k#ls
⁴ RealTime Medicare Data (RTMD): https://www.rtmd.org
Beth Cobb
Medicare Transmittals & MLN Articles
September 23, 2025: MLN MM14246: Ambulatory Surgical Center Payment System: October 2025 Update
CMS details payment system updates effective October 1, 2025 in the ASCs. For example, new hospital outpatient prospective payment system (OPPS) device pass-through category payable in ASCs. https://www.cms.gov/files/document/mm14246-ambulatory-surgical-center-payment-system-october-2025-update.pdf
September 25, 2025: MLN MM14223: Hospital Outpatient Prospective Payment System: October 2025 Update
This MLN article includes updates effective October 1, 2025. For example, new COVID-19 monoclonal antibody and pleural-peritoneal shunt HCPCS codes, and status indicator updates. https://www.cms.gov/files/document/mm14223-hospital-outpatient-prospective-payment-system-october-2025-update.pdf
September 29, 2025: MLN MM14098: Implementing the Transforming Episode Accountability Model: Skilled Nursing Facility 3-Day Rule Waiver
This Transforming Episode Accountability Model (TEAM) will run from January 1, 2026 to December 31, 2030. There were no substantive changes to this third iteration of this MLN article. As a reminder for participating hospitals in this model, “CMS will allow acute care hospitals who participate in the model to discharge patients without a 3-day hospital stay to a qualified SNF or swing bed provider, including a CAH.” https://www.cms.gov/files/document/mm14098-implementing-transforming-episode-accountability-model-skilled-nursing-facility-3-day-rule.pdf
You can visit the CMS.gov TEAM webpage to learn more about this mandatory model. https://www.cms.gov/priorities/innovation/innovation-models/team-model
November 21, 2025: MLN MM14215: Implementing the Transforming Episode Accountability Model: Telehealth Waiver
CMS provides details regarding telehealth services under the TEAM (Transforming Episode of Accountability Model) with dates of service on or after January 1, 2026. As a reminder, this is a mandatory model that will run for five performance years from January 1, 2026, to December 31, 2030, in selected Core-Based Statistical Areas nationwide.
Link to MLN Article: https://www.cms.gov/files/document/mm14215-implementing-transforming-episode-accountability-model-telehealth-waiver.pdf
Link to learn more about TEAM: https://www.cms.gov/priorities/innovation/innovation-models/team-model
November 21, 2025: MLN MM14219: Outpatient Services for Hospice Patients: New Edit
CMS has “created a new edit to automatically compare the outpatient claim’s primary diagnosis with the hospice claim’s primary diagnosis codes by doing an exact diagnosis match. This edit will deny hospital inpatient and outpatient claims when there’s a hospice claim for the same Medicare patient within the same covered period with condition code 07 or modifier GW with the same principal diagnosis.” Make sure your billing staff know about new systems’ edits that will compare primary diagnosis codes on hospital and hospice claims for Medicare hospice patients to prevent duplicate payments and how to use condition code 07. https://www.cms.gov/files/document/mm14219-outpatient-services-hospice-patients-new-edit.pdf
Coverage Updates
October 28, 2025: Final National Coverage Determination (NCD): Cardiac Contractility Modulation (CCM) for Heart Failure
CMS’ final decision is that CCM for heart failure (HF) management is covered under Coverage with Evidence Development (CED) according to sections (B) Coverage Criteria and (C) Other Uses of CCM. https://www.cms.gov/files/document/id317a.pdf-0
October 28, 2025: Final NCD: Renal Denervation for Uncontrolled Hypertension
CMS’ final decision is that radiofrequency renal denervation (rfRDN) and ultrasound renal denervation (uRDN) (collectively, RDN) for uncontrolled hypertension is covered under CED. https://www.cms.gov/medicare-coverage-database/view/ncacal-decision-memo.aspx?proposed=N&NCAId=318
Compliance Education Updates
September 2025: MLN Educational Tool (MLN6922507): Medicare Payment Systems
The Acute Care Hospital Inpatient Prospective Payment System section of this tool was updated to include FY 2026 changes. https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/html/medicare-payment-systems.html#Acute
September 2025: MLN Fact Sheet (MLN900943): Health Care Code Sets
This MLN Fact Sheet was updated to include information about National Drug Codes (NDCs) in the code sets table. https://www.cms.gov/files/document/mln900943-health-care-code-sets.pdf
Other Updates
September 2025: Joint Commission Goals Starting in 2026: New – Nurse Staffing as Core Component of Quality
Effective January 1, 2026, National Performance Goals (NPGs) are replacing National Patient Safety Goals. The Joint Commission notes this is “a new chapter that organizes requirements that rise above regulation (excluding the “Medical Staff” (MS) chapter) into salient, measurable topics with clearly defined goals. NPGs are available for the Hospital and Critical Access Hospital accreditation programs.” For the first time, nurse staffing is a core component in Goal 12.02.01 – EP 5 which states “there must be an adequate number of licensed registered nurses, licensed practical (vocational) nurses, and other staff to provide nursing care to all patients, as needed.” https://www.jointcommission.org/en-us/standards/national-performance-goals
October 22, 2025: Acentra Health Special Bulletin: Higher-Weighted DRG (HWDRG) Reviews
Previously Livanta, the National Claim Review Contractor, completed short stay reviews (SSRs) and higher-weighted DRG (HWDRG) reviews nationwide. Livanta’s contract concluded August 11, 2025. As of September 1, 2025, the Medicare Administrative Contractors (MACs) assumed responsibility for pre-payment SSRs.
Acentra Health’s special bulletin provides information about HWDRG reviews now being completed by the Beneficiary and Family Centered Care Quality Improvement Organizations (BFCC-QIOs) according to their regional assignments. Acentra noted they would soon begin requesting medical records for these reviews. You can read more about this on their HWDRG reviews webpage at https://www.acentraqio.com/providers/hwdrg.
October 31, 2025: CMS Releases CY 2026 Physician Fee Schedule (PFS) Final Rule
Specific to telehealth services, CMS finalized streamlining the process for adding services to the Medicare Telehealth Services List by simplifying the review process by removing the distinction between provision and permanent services and limited their review on whether the service can be furnished using an interactive, two-way audio-video telecommunication system. You can read more about the final rule in a CMS Fact Sheet at https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2026-medicare-physician-fee-schedule-final-rule-cms-1832-f.
November 14, 2025: 2026 Medicare Parts A & B Premium and Deductibles
CMS published a Fact Sheet releasing the 2026 premiums, deductibles, and coinsurance amounts for the Medicare Part A and Part B programs, and the 2026 Part D income-related monthly adjustment amounts. For example, the Inpatient Hospital Deductible: Is increasing $60 from $1,676 in 2025 to $1,736 in 2026. You can read about other changes in the CMS Fact Sheet at
https://www.cms.gov/newsroom/fact-sheets/2026-medicare-parts-b-premiums-deductibles.
November 20, 2025: CMS Released CY 2026 ESRD Prospective Payment System (PPS) Final Rule
CMS notes for CY 2026 the ESRD PPS base rate will increase to $281.71 and total payments to all ESRD facilities, both freestanding and hospital-based, are expected to increase by approximately 2.2%. You can read more about the final rule in a related CMS Fact Sheet at https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2026-end-stage-renal-disease-esrd-prospective-payment-system-final-rule.
November 21, 2025: CMS Releases CY 2026 Outpatient Prospective Payment System (OPPS) / Ambulatory Surgical Center (ASC) Final Rule
In this final rule CMS finalized the elimination of the Inpatient Only List over three years with 285 mostly musculoskeletal procedures being removed for CY 2026. At the same time 271 of the 285 codes are being added to the ASC Covered Procedure List (CPL) as well as 289 additional procedures that were not on the IPO list.
CY 2026 OPPS/ASC Final Rule Resources
CMS Press Release: https://www.cms.gov/newsroom/press-releases/cms-empowers-patients-boosts-transparency-modernizing-hospital-payments
CY 2026 OPPS Final Rule CMS webpage: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices/cms-1834-fc
CMS Fact Sheet: https://www.cms.gov/newsroom/fact-sheets/calendar-year-2026-hospital-outpatient-prospective-payment-system-opps-ambulatory-surgical-center
Hospital Price Transparency Policy Changes Fact Sheet: https://www.cms.gov/newsroom/fact-sheets/cy-2026-opps-ambulatory-surgical-center-final-rule-hospital-price-transparency-policy-changes
Medicare and You 2026 Edition Now Available
Medicare and You is the official U.S. government Medicare handbook. The 2026 version is now available. CMS noted in the November 20, 2025 edition of MLN Connects new and important items this year includes:
- Capping yearly out-of-pocket Part D prescription drug costs,
- Meeting health care needs with Advanced Primary Care Management services,
- Detecting colon cancer early through a wide range of screenings, and
- Information to help fight fraud and cut waste.
You can download your copy today at: https://www.medicare.gov/publications/10050-medicare-and-you.pdf.
Beth Cobb
Medicare Transmittals & MLN Articles
August 27, 2025: MLN MM14098: Implementing the Transforming Episode Accountability Model: Skilled Nursing Facility 3-Day Rule Waiver
Make sure your billing staff knows about updates the details, participation, and payments for the new Transforming Episode Accountability Model (TEAM) running from January 1, 2026 – December 31, 2030. For example, CMS will allow acute care hospitals who participate in the model to discharge patients without a 3-day hospital stay to a qualified SNF or swing bed provider, including a CAH. https://www.cms.gov/files/document/mm14098-implementing-transforming-episode-accountability-model-skilled-nursing-facility-3-day-rule.pdf
September 2, 2025: MLN MM14195: National Fee Schedule for Vaccine Administration: October 2025 Update
Make sure your billing staff knows about coding updates for: AVTOZMA® for post-exposure prophylaxis or COVID-19 treatment, and newly FDA-approved products not yet assigned to a unique HCPCS Level II code. https://www.cms.gov/files/document/mm14195-national-fee-schedule-vaccine-administration-october-2025-update.pdf
September 18, 2025: MLN Matters MM14136: Medicare Severity Diagnosis-Related Groups Subject to Inpatient Prospective Payment System Replaced Devices Policy: FY 2026 Update
Key Updates for FY 2026 related to this policy includes the addition of 2 MS-DRGs to the list subject to the policy for reducing payment for replaced devices offered without cost or with credit (MS-DRGs 209 and 213), and conforming title changes for 2 MS-DRGs (MS-DRGs 023 and 024). https://www.cms.gov/files/document/mm14136-medicare-severity-diagnosis-related-groups-subject-inpatient-prospective-payment-system.pdf
September 19, 2925: MLN MM14190: Hospice Payments: FY 2026 Update
CMS advises that you make sure your billing staff knows about FY 2026 hospice updates effective October 1, 2025, including payment rates, inpatient and aggregate caps, and wage index. https://www.cms.gov/files/document/mm14190-hospice-payments-fy-2026-update.pdf
September 22, 2025: MLN MM14203: Inpatient and Long-Term Care Hospital Prospective Payment Systems: FY 2026 Changes
CMS advises that you make sure your billing staff knows about the FY 2026 updates in this article.
This article should also be shared with HIM, CDI, Case Management, and Quality professionals. Examples of key updates included in this MLN article:
- CMS has deleted 6 MS-DRGs and finalized 5 new MS-DRGs, decreasing the number of MS-DRGs by 1 for a total of 772 for FY 2026.
- No MS-DRGs were added to or removed from the list of those subject to the post-acute transfer or special payment policies. Table 5 of the final rule includes a list of all post-acute and special post-acute MS-DRGs.
- Related to the new technology add-on payment policy for FY 2026, MAC implementation file 8 provides information on new technologies either continuing to receive payments, or those starting to receive payments, and technologies no longer eligible for the new technology add-on payment.
- This MLN article also includes updates related to quality programs (i.e., the Hospital-Acquired Condition Reduction Program, Value-Based Purchasing Program, and Hospital Readmission Reduction Program). https://www.cms.gov/files/document/mm14203-inpatient-long-term-care-hospital-prospective-payment-systems-fy-2026-changes.pdf
Coverage Updates
September 10, 2025: Screening for Colorectal Cancer-Non-Invasive Biomarker Tests National Coverage Analysis (NCA) (CAG-0040R)
CMS received a formal request to provide coverage for ColoSense, an FDA-approved multi-target stool RNA (mt-sRNA) colorectal cancer (CRC) screening test. This NCA focuses on coverage of CRC non-invasive biomarker screening tests, including mt-sRNA tests only and does not intend to review the long-standing coverage for fecal occult blood tests (FOBT). CMS is accepting comments until October 10, 2025. https://www.cms.gov/medicare-coverage-database/view/ncacal-tracking-sheet.aspx?ncaid=319
September: CMS National Coverage Determination (NCD) Dashboard
At the time of the CMS NCD Dashboard September update, there are three open NCDs, five NCDs have been finalized in the past twelve months, there is one pending Transitional Coverage for Emerging Technologies (TCET) pathway topic and nine accepted requests on the NCD wait list. https://www.cms.gov/files/document/ncddashboard2025.pdf
Compliance Education Updates
July 2025: MLN Fact Sheet: MLN905364: Complying with Medicare Signature Requirements
CMS updated this fact sheet in July by adding information about stamped signatures, artificial intelligence, and attestations and signature logs. https://www.cms.gov/files/document/mln905364-complying-medicare-signature-requirements.pdf
September 2025: MLN Booklet: MLN006764: Evaluation and Management Services
CMS has made changes to several sections of this document including adding information regarding office or outpatient (O/O) Evaluation and Management (E/M) visits, critical care services, hospital outpatient clinic visits, and telehealth services.
Specific to telehealth services, if Congress takes no action prior to October 1, 2025, the statutory limitations that were in place for Medicare telehealth services before the COVID-19 public health emergency (PHE) will retake effect for most telehealth services. https://www.cms.gov/files/document/mln006764-evaluation-management-services.pdf
September 2025: Palmetto GBA Targeted Probe and Educate Checklist
Palmetto GBA, the Medicare Administrative Contractor (MAC) for Jurisdictions J and M published this checklist “to assist providers in all rounds of TPE to provide a better understanding of the Additional Documentation Request (ADR) process.” https://palmettogba.com/jja/did/4jklzyhi3t#ls
Other Updates
September 3, 2025: New Prior Authorization Demonstration for ASCs
CMS announced a new prior authorization demonstration for ASCs set to begin with discharges on or after December 15, 2025. Like the Prior authorization for Certain Hospital Outpatient (OPD) Services that began July 1, 2020, services targeted include:
- Blepharoplasty,
- Botulinum toxin injections,
- Panniculectomy,
- Rhinoplasty, and
- Vein ablation.
This demonstration will last for five years for ASCs in California, Florida, Texas, Arizona, Tennessee, Pennsylvania, Maryland, Georgia, and New York. You can read more about this demonstration on the CMS website at https://www.cms.gov/data-research/monitoring-programs/medicare-fee-service-compliance-programs/prior-authorization-and-pre-claim-review-initiatives/prior-authorization-demonstration-certain-ambulatory-surgical-center-asc-services.
September 5, 2025: CMS Memorandum QS)-25-24-Hospitals: Updates to the State Operations Manual (SOM) Appendix A – New Interpretive Guidelines and Survey Processes reflecting Discharge Planning Conditions of Participation (COP)
Over five years later, CMS finally published sub-regulatory guidance related to the Discharge Planning Conditions of Participation (CoP) released in 2019 and 2020.
For example, in Appendix A §483.43(a) Standard: Discharge Planning Process, the interpretive guidelines indicate “the discharge planning process is expected to begin in the early stages in the hospitalization of the patient…However, no noncompliance deficiency citations will be made if the identification of patients likely to need discharge planning is completed at least 48 hours in advance of the patient’s discharge and there is no evidence that:
- The patient’s discharge was delayed due to the hospital’s failure to complete an appropriate discharge planning evaluation on a timely basis, or
- The patient was placed unnecessarily in a setting other than that from which he/she was admitted primarily due to a delay in discharge planning. For example, a delay in identification of a patient in need of discharge planning might result in discharging the patient to a nursing facility, because such placements can be arranged comparatively quickly, when the patient preferred to return home, and could have been supported in the home environment with arrangement of appropriate community services.”
In addition to interpretive guidelines for the Discharge Planning CoPs, there are also updates incorporating prior memorandums involving life safety code updates, co-location, electronic reporting for deaths in restraint and seclusion, infection prevention and control, Quality Assessment and Performance Improvement (QAPI), and ligature risk and assessments. I recommend sharing this Memorandum with key stakeholders within your facility. https://www.cms.gov/medicare/health-safety-standards/quality-safety-oversight-general-information/policy-memos/policy-memos-states-and-cms-locations/revisions-hospital-appendix-state-operations-manual
Beth Cobb
Medicare Transmittals & MLN Articles
February 24, 2025: MLN MM13937: Roster Billing for Hepatitis B: July 2025 Release
For affected providers make sure your billing staff knows about the expanded coverage for more Medicare patients to receive the hepatitis B vaccine, that Medicare patients no longer need a doctor’s order for the administration of the vaccine, and that mass immunizers can use the roster billing process to submit Medicare Part B claims for hepatitis B vaccinations and their administration. https://www.cms.gov/files/document/mm13937-roster-billing-hepatitis-b-july-2025-release.pdf
March 14, 2025: MLN MM13959: HCPCS Codes & Clinical Laboratory Amendments Edits: April 2025
This article includes updates about discontinued and new HCPCS codes and HCPCS codes subject to and those that are excluded from Clinical Laboratory Improvement Amendments (CLIA) edits. https://www.cms.gov/files/document/mm13959-hcpcs-codes-clinical-laboratory-improvement-amendments-edits-april-2025.pdf
March 17, 2025: MLN MM13966: Clinical Laboratory Fee Schedule (CLFS) & Laboratory Services Subject to Reasonable Charge Payment: April 2025 Quarterly Update
Make sure your billing staff knows about when the next CLFS reporting period for Clinical Diagnostic Laboratory Tests (CDLTs) begins and new and deleted CPT codes effective April 1, 2025. https://www.cms.gov/files/document/mm13966-quarterly-update-clinical-laboratory-fee-schedule-clfs-and-laboratory-services-subject.pdf
March 21, 2025: MLN MM13946: Rural Health Clinic & Federally Qualified Health Center Medicare Benefit Policy Manual Update
CMS advises that your billing staff needs to know about the 2025 updates to the Medicare Benefit Policy Manual, Chapter 13, and all other revisions clarifying existing policy. https://www.cms.gov/files/document/mm13946-rural-health-clinic-federally-qualified-health-center-medicare-benefit-policy-manual-update.pdf
Coverage Updates
March 11, 205: Proposed Decision Memo (CAG-00465N) Noninvasive Positive Pressure Ventilation (NIPPV) in the Home for the Treatment of Chronic Respiratory Failure consequent to COPD
CMS has published a proposed Decision Memo in response to a request for reconsideration of NCD 280.1, to establish coverage policies for the use of noninvasive home mechanical ventilators and respiratory assist devices for Medicare beneficiaries with various respiratory conditions. CMS accepted the request for the indication of COPD. The public comment period for this proposed Decision Memo is from March 11, 2025 through April 10, 2025. https://www.cms.gov/medicare-coverage-database/view/ncacal-decision-memo.aspx?proposed=Y&ncaid=315
March 19, 2025: Transcatheter Tricuspid Valve Replacement (TTVR) Final Decision Memo (CAG-00467N)
CMS now covers TTVR for the treatment of symptomatic tricuspid regurgitation (TR) under Coverage with Evidence Development (CED) when provisions in the Decision Memo are met for patient, physician and CED study criteria. Specific to that patient, it is covered when “despite optimal medical therapy (OMT), patients must have symptomatic TR with tricuspid valve replacement being considered as appropriate by a heart team.” The heart team, at a minimum, must include a cardiac surgeon, interventional cardiologist, cardiologist with training and experience in heart failure management, electrophysiologist, multi-modality imaging specialists, and an interventional cardiographer. “All of the specialists listed above must have experience in the care and treatment of tricuspid regurgitation.” CMS also notes that “all CMS-approved CED studies must meet the patient and physician criteria. https://www.cms.gov/medicare-coverage-database/view/ncacal-decision-memo.aspx?proposed=N&ncaid=314&fromTracking=Y&
Compliance Education Updates
December 2024: MLN Fact Sheet: Complying with Medical Record Documentation Requirements
CMS updated this MLN Fact Sheet (MLN909160) to add documentation guidelines for medical services and additional resources for Medicare documentation requirements. For example, “if providers don’t include sufficient documentation on claims we’ve already paid, we may consider the payment an overpayment, which we can partially or fully recover.” https://www.cms.gov/files/mln909160-complying-with-medical-record-documentation-requirements.pdf
February 2025: MLN Fact Sheet: Medicare Coverage of Diabetes Supplies
CMS updates this MLN Fact Sheet (MLN7674574) to add coverage information on continuous glucose monitors. https://www.cms.gov/files/document/mln7674574-medicare-coverage-diabetes-supplies.pdf
March 2025: MLN Fact Sheet: Hospital Price Transparency
This new fact sheet (MLN7215754) opens with the following: “On February 25, 2025, the White House issued an Executive Order to empower consumers with clear, accurate, and actionable health care pricing information. Read this White House fact sheet for more information.” https://www.cms.gov/files/document/mln7215754-hospital-price-transparency.pdf
Other Updates
February 26, 2025: ICD-10-CM/PCS What’s New Effective April 1, 2025
CMS has updated the ICD-10 webpage to announce 50 new ICD-10-PCS codes, effective April 1, 2025 and to let providers know there are no new ICD-10-CM codes. https://www.cms.gov/medicare/coding-billing/icd-10-codes
March 6, 2025: Livanta Published Year 3 Review Findings for Higher-Weighted DRG Validation
In their February 2025 edition of “The Livanta Claims Review Advisor,” Livanta shares their higher-weighted diagnosis related groups (HWDRG) validation reviews for reviews completed from November 1, 2023 through October 31, 2024. Of the 6,447 claims found to be in error, 5,744 (10%) were a result of DRG changes and 703 (1%) were a result of failure to meet the guidelines of the Two-Midnight Rule. CMS Region 4 (AL, FL, GA, KY, MS, NC, SC, and TN) have the highest volume of claims reviewed and the highest regional error rate at 14%. For the third review cycle, sepsis DRGs (871 and 872) collectively continue to account for the highest percentage of DRGs found to be in error. Livanta posts their newsletters on their Provider Education and Toolkit webpage at https://www.livantaqio.cms.gov/en/ClaimReview/Provider/provider_education.html.
Beth Cobb
In mid-November, the Comprehensive Error Rate Testing (CERT) published the 2024 Medicare Fee-for-Service Supplemental Improper Payment Data (https://www.cms.gov/files/document/2024-medicare-fee-service-supplemental-improper-payment-data.pdf). This report supplements the FY 2024 HHS Agency Final Report for Fiscal Year 2024, highlights common causes of improper payments, and includes tables allowing you to drill down into the review findings.
Estimated Improper Payment Rates
Calculation for the FY 2024 Medicare FFS improper payment rate included claims submitted during the 12-month period from July 1, 2022 through June 30, 2023. As compared to FY 2020 and 2021, the improper payment rate is trending up.
Table 1
|
Fiscal Year |
Improper Payment Rate |
Estimated Improper Payment |
|
2020 |
6.37% |
$25.74 Billion |
|
2021 |
6.26% |
$25.03 Billion |
|
2022 |
7.46% |
$31.46 Billion |
|
2023 |
7.38% |
$31.23 Billion |
|
2024 |
7.66% |
$31.7 Billion |
“It is important to note that the improper payment rate is not a “fraud rate,” but is a measurement of payments that did not meet Medicare requirements. Improper payments are attributed to one of five major error categories (no documentation, insufficient documentation, medical necessity, incorrect coding, or other).
Unfortunately, like last year, “insufficient documentation” continues to be the main cause of improper payments. The CERT defines “insufficient documentation” as when the medical record documentation submitted is inadequate to support payment for the services billed. In other words, the CERT contractor reviewers could not conclude that the billed services were provided, were provided at the level billed, and/or were medically necessary. Claims are also placed into this category when a specific documentation element that is required as a condition of payment is missing, such as a physician signature on an order, or a form that is required to be completed in its entirety.
While the CERT data reports on improper payments in various settings (i.e., skilled nursing facilities, hospital outpatient, hospice), this article focuses on Part A (Hospital IPPS) findings.
“0 or 1 day” Length of Stay Claims
A compare of improper payments rates for Part A hospital claims by length of stay (LOS) has been a part of this annual report since the October 1, 2013 implementation of the Two-Midnight Rule. Table 1 trends short stays findings from the initial year this information was included in the CERT report.
Table 2
|
Report FY |
Improper Payment Rate |
Projected Improper Payments |
Percent of Overall Improper Payments |
|
2014 |
37.18% |
$3.3B |
6.8% |
|
2020 |
19.9% |
$1.9B |
7.0% |
|
2021 |
16.8% |
$1.5B |
5.7% |
|
2022 |
20.1% |
$1.5B |
4.7% |
|
2023 |
21.7% |
$1.7B |
5.1% |
|
2024 |
24.3% |
$1.7B |
5.2% |
In addition, to the CERT’s focus on claims by length of stay, short stays (“0 of 1 Day” Stays) short stays are also actively being reviewed by the OIG as part of their Work Plan (https://oig.hhs.gov/reports-and-publications/workplan/summary/wp-summary-0000538.asp) and Livanta, the National Medicare Claim Review Contractor (https://livantaqio.com/en/ClaimReview/index.html), who reviews short stay claims across the nation on a monthly bases.
Top 20 Service Types with Highest Improper Payments: Part A Hospital IPPS
Table D4 of the CERT report includes the top 20 DRG types with the highest improper payment rate. The table also details the percentage of error by each of the CERT’s major error categories.
For fourteen of the top 20 DRG types, the type of error with the highest percentage was error type medical necessity. A claim is placed in this category when the CERT contractor reviewer receives adequate documentation from the medical records submitted to make an informed decision that the services billed were not medically necessary based upon Medicare coverage and payment policies. The following three DRG types had the highest percent of errors attributed to medical necessity:
- DRG Pair 551 and 552 (Medical Back Problems): 99.6% error attributed to medical necessity.
- DRG 884 (Organic Disturbances & Intellectual Disability): 93.1% error attributed to medical necessity.
- DRG Pair 469 and 470 (Major Hip and Knee Joint Replacement or Reattachment of Lower Extremity): 92.8% error attributed to medical necessity.
Top Root Causes of Improper Payments
The 2024 CERT report includes the same top three service types with the highest improper payments in the Part A (Hospital IPPS) setting as in the 2023 report. Each of the three service types also have the same top root cause for improper payments in FY 2023 and FY 2024.
In the 2024 report, the CERT identified the following new root causes of improper payments not noted listed in the 2023 report.
New Root Causes for DRG 469 and 470
- Documentation to support conservative treatment for the billed surgical procedure(s) – missing,
- Preoperative surgeon’s office notes – missing,
- Documentation to support conservative treatment for the billed surgical procedure(s) – inadequate, and
- Radiographs to support medical necessity for the billed surgical procedure(s) – inadequate.
New Root Cause for DRGs 273 and 274
- Documentation to support medical necessity for the procedure – Missing.
New Root Causes for DRGs 266 and 267
- NCD requirements, other documentation required for payment – Missing, and
- Incorrect secondary diagnosis code – DRG change.
Moving Forward
Moving forward, here are ideas and resources to help in your efforts to prevent claims errors:
- Visit the CERT Provider Website (https://c3hub.certrc.cms.gov/) to find information about the CERT, how to submit records, view sample request letters and much more,
- Become familiar with National and Local Coverage Determinations and Local Coverage Articles that detail indications and limitations of coverage for applicable services. For example, CMS has published two resources related to Major Hip and Knee replacement:
- MLN Product: Medicare Compliance Tips: Major Hip & Knee Replacement or Reattachment of Lower Extremity (https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/medicare-provider-compliance-tips/medicare-provider-compliance-tips.html#Hip), and
- MLN Matters article SE19002: Total Knee Arthroplasty (TKA) Removal from the Medicare Inpatient-Only (IPO) List and Application of the 2-Midnight Rule (https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/SE19002.pdf), and
- Annually, take the time to review the new Supplemental Improper Payment Data report. Historically, a new FY report is released in late November.
Resource
CMS.gov Fact Sheet, November 15, 2024, Fiscal Year 2024 Improper Payments Fact Sheet: https://www.cms.gov/newsroom/fact-sheets/fiscal-year-2024-improper-payments-fact-sheetBeth Cobb
Medicare Transmittals & MLN Articles
November 5, 2024: MLN MM13818: ICD-10 & Other Coding Revisions to National Coverage Determinations: April 2025 Update (CR 1 of 2)
CMS advises making sure your billing staff knows about newly available codes, recent coding changes, and National Coverage Determination (NCD) coding information. https://www.cms.gov/files/document/mm13818-icd-10-other-coding-revisions-national-coverage-determinations-april-2025-update-cr-1-2.pdf
November 5, 2024: MLN MM13828: ICD-10 & Other Coding Revisions to National Coverage Determinations: April 2025 Update (CR 2 of 2)
CMS advises making sure your billing staff know about the same updates as in MLN article (MM13818). https://www.cms.gov/files/document/mm13828-icd-10-other-coding-revisions-national-coverage-determinations-april-2025-update-cr-2-2.pdf
November 6, 2024: MLN MM13858: New Waived Tests
This article provides information about the new waived test approved by the FDA that will be effective January 1, 2025. https://www.cms.gov/files/document/mm13858-new-waived-tests.pdf
November 8, 2024: MLN MM13796: Medicare Deductible, Coinsurance, & Premium Rates: CY 2025 Update
This article includes Medicare Part A and Part B deductible, Part A and Part B coinsurance rates, and Part A and Part B premiums effective January 1, 2025. https://www.cms.gov/files/document/mm13796-medicare-deductible-coinsurance-premium-rates-cy-2025-update.pdf
November 22, 2024: MLN MM13846: Medicare Change of Status Notice Instructions (Expedited Determinations When a Patient is Reclassified from an Inpatient to an Outpatient Receiving Observation Services)
Hospitals (including Critical Access Hospitals) need to make sure your staff knows about:
- Appeal rights for eligible Medicare patients reclassified from an inpatient to outpatient receiving observation services,
- Medicare Change of Status Notice (MCSN) delivery requirements, and
- New Section 450 to the Medicare Claims Processing Manual, Chapter 30.
https://www.cms.gov/files/document/mm13846-medicare-change-status-notice-instructions.pdf
November 25, 2024: MLN MM13887: Medicare Physician Fee Schedule Final Rule Summary: CY 2025
Make sure your billing staff knows about change to the following services:
- Telehealth,
- Caregiver training,
- Therapy,
- Cardiovascular risk assessment and management,
- Evaluation and management (E/M),
- Behavioral Health,
- Advanced Primary Care Management (APCM),
- Global Surgery Payment, and
- Dental and Oral Health.
Coverage Updates
November 15, 2024: CMS National Coverage Determination (NCD) Dashboard Updated
As of November 14, 2024, there are eight topics on the NCD wait list, four open NCDs, and two NCDs finalized in the past twelve months. https://www.cms.gov/files/document/ncddashboard2024.pdf
Compliance Education Updates
November 2024: MLN Booklet (MLN907166) Global Surgery Revised
This booklet has been reviewed to add information about modifiers and about new G-code, HCPCS code G0559, for post-operative care services provided by a practitioner other than the one who performed the surgical procedure (or another practitioner in the same group practice). https://www.cms.gov/files/document/mln907166-global-surgery-booklet.pdf
Other Updates
November 1, 2024: Calendar Year (CY 2025 Medicare Physician Fee Schedule (PFS) Final Rule
CMS finalized their proposal to establish coding and payment under the PFS for a new set of Advanced Primary Care Management Services (APCM) described by three new HCPCS G-codes (G0556, G0557, G0558). The finalized APCM incorporates elements of several existing care management and communication technology-based services. However, unlike existing care management codes, there are no time-based thresholds included in the service elements, which is intended to reduce the administrative burden associated with coding and billing. Instead, the new APCM codes are stratified into three levels based on an individual’s number of chronic conditions and status as a Qualified Medicare Beneficiary, reflecting the patient’s medical and social complexity. You can read additional high level summary of this final rule in a related CMS Fact Sheet at https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2025-medicare-physician-fee-schedule-final-rule and CMS Press Release at https://www.cms.gov/newsroom/press-releases/hhs-finalizes-physician-payment-rule-strengthening-person-centered-care-and-health-quality-measures
November 1, 2024: CY 2025 Medicare Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System Final Rule (1809-FC)
CMS is finalizing an update to OPPS payment rates of 2.9% for hospitals that meet applicable quality reporting requirements. Policies in this final rule will affect approximately 3,500 hospitals and approximately 6,100 ASCs.
Following are the changes being made to the Medicare Inpatient Only (IPO) Procedure list effective January 1, 2025 as listed in Table 138 in the final rule:
CPT Codes to be Added to IPO List
- 0894T (Cannulation of the liver allograft in preparation for connection to the normothermic perfusion device decannulation of the liver allograft following normothermic perfusion)
- 0895T (Connection of liver allograft to normothermic machine perfusion device, hemostasis control; initial 4 hours of monitoring time, including hourly physiological and laboratory assessments (e.g., perfusate temperature, perfusate pH, hemodynamic parameters, bile production, bile pH, bile glucose, biliary)
- 0896T (Connection of liver allograft to normothermic machine perfusion device, hemostasis control; each additional hour, including physiological and laboratory assessments (e.g., perfusate temperature, perfusate pH, hemodynamic parameters, bile production, bile PH, bile glucose, biliary bicarbonate, lactate levels, macroscopic
CPT Removed from the IPO List
- 22848 (Pelvic fixation (attachment of caudal end of instrumentation to pelvic bony structures) other than sacrum (List separately in addition to code for primary procedure)
You can read a high level summary of this final rule in a related CMS Press Release at https://www.cms.gov/newsroom/press-releases/cms-announces-new-policies-reduce-maternal-mortality-increase-access-care-and-advance-health-equity.
November 1, 2024: Calendar Year 2025 End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) Final Rule (CMS-1805-F)
For CY 2025, CMS is increasing the ESRD PPS base rate to $273.82, which CMS expects will increase total payments to all ESRD facilities, both freestanding and hospital-based, by approximately 2.7%. This final rule also includes changes to the methodology for calculating the ESRD facility wage index, changes to the Low-Volume Payment Adjustment (LVPA) methodology, and several changes to the ESRD outlier policy. You can read more in a related CMS Fact Sheet at https://www.cms.gov/newsroom/fact-sheets/calendar-year-2025-end-stage-renal-disease-esrd-prospective-payment-system-pps-final-rule-cms-1805-f.
November 4, 2024: CMS Update to Prior Authorization for Certain Hospital Outpatient Department (OPD) Services Initiative
CMS is changing the review timeframe for standard prior authorization decision from 10 business days to 7 calendar days for requests submitted on or after January 1, 2025. The timeframe for expedited requests remains 2 business days. https://www.cms.gov/data-research/monitoring-programs/medicare-fee-service-compliance-programs/prior-authorization-and-pre-claim-review-initiatives/prior-authorization-certain-hospital-outpatient-department-opd-services
Note, this change in the review timeframe will also go into effect for the Prior Authorization Process for Certain DMEPOS Items and Prior Authorization for Repetitive, Scheduled Non-Emergent Ambulance Transport Initiative.
November 8, 2024: CMS Fact Sheet: 2025 Medicare Parts A & B Premiums and Deductibles
CMS published a Fact Sheet that includes the 2025 premiums, deductibles, and coinsurance amounts for the Medicare Part A and Part B programs, and the 2025 Medicare Part D income-related monthly adjustments. The standard Part B premium will be $185.00 for 2025, an increase of $10.30 from $174.70 in 2024. The following table provides a comparison of Part A deductible, and coinsurance amounts for CY 2024 and CY 2025 by type of cost sharing.
|
Part A Deductible and Coinsurance Amounts for Calendar Years 2024 and 2025 by Type of Cost Sharing |
||
|
|
2024 |
2025 |
|
Inpatient hospital deductible |
$1,632 |
$1,676 |
|
Daily hospital coinsurance for 61st-90th day |
$408 |
$419 |
|
Daily hospital coinsurance for lifetime reserve days |
$816 |
$838 |
https://www.cms.gov/newsroom/fact-sheets/2025-medicare-parts-b-premiums-and-deductibles
November 2024: Acentra Health Case Review Connections: Appeals Update – Safe Discharges
Acentra Health notes the following in their November edition of Case Review Connections for Acute Care:
“What are the key factors you are looking at for a safe discharge plan? What if a member needs a higher level of care, but there is no movement on finding a discharge plan?
Key considerations for a safe discharge plan:
- Secure a skilled nursing facility (SNF) bed, if applicable.
- If the beneficiary is going home, ensure they can safely return alone.
- Confirm that home health care is arranged.
- Ensure durable medical equipment (DME) is ordered and will arrive before discharge.
All arrangements needed for the discharge must be confirmed and not pending when the appeal is filed.” https://acentraqio.com/bene/newsletter/november2024acute
MLN Fact Sheet: Rural Emergency Hospitals (MLN2259384)
This MLN Fact Sheet was updated in November to add new information on Indian Health Services Hospitals and CY 2025 payment amount. https://www.cms.gov/files/document/mln2259384-rural-emergency-hospitals.pdf
Beth Cobb
CMS published details about this five-year mandatory model as part of the FY 2025 IPPS and LTCH PPS Final Rule. CMS indicates that it will incentivize coordination between care providers during a surgery as well as the services provided during the 30 days after surgery with the aim of:
- Improving the quality of care of people with Medicare undergoing certain surgical procedures;
- reducing hospitalization and recovery time;
- lowering Medicare spending; and
- driving equitable outcomes.
The model is set to start in January 2026 and end in December 2030.
TEAM Participation
All acute care hospitals, with limited exceptions, located within the mandatory Core-Based Statistical Areas (CBSAs) that CMS selected will be required to participate in TEAM.
CMS will allow a one-time opportunity for hospitals that participate until the last performance period in the BPCI Advanced model or CJR model, that are not located in a mandatory CBSA to voluntarily opt into TEAM.
A final list of the selected mandatory CBSAs is available in the FY 2025 IPPS Final Rule Table X.Z.-05: Final List of CBSAs for Selection into TEAM
TEAM Episode
An Episode will include non-excluded Medicare Parts A and B items and services and would begin with an anchor hospitalization or anchor procedure and will end 30 days after hospital discharge.
The following table is available in the final rule and provides the specific TEAM episode categories and related billing codes.
|
Episode Category |
Billing Codes (MS-DRG/HCPCS) |
|
Lower Extremity Joint Replacement (LEJR) |
MS-DRG: 469, 470, 521, 522 HCPCS: 27447, 27130, 27702 |
|
Surgical Hip and Femur Fracture Treatment (SHFFT) |
MS-DRG: 480, 481, 482 |
|
Coronary Artery Bypass Graft Surgery (CABG) |
MS-DRG: 231, 232, 233, 234, 235, 236 |
|
Spinal Fusion |
MS-DRG: 402, 426, 427, 428, 429, 430, 447, 448, 450, 451, 471, 472, 473 HCPCS: 22551, 22554, 22612, 22630, 22633 |
|
Major Bowel Procedure |
MS-DRG: 329, 330, 331 |
|
Source: Table X.A.-08: Final Team Episode and Billing Categories in FY 2025 IPPS Final Rule |
|
Billing Medicare
TEAM participants will continue to bill Medicare FFS for services furnished to Medicare FFS beneficiaries. However, the TEAM participant may also receive a reconciliation payment amount from CMS depending on their Composite Quality Score (CQS) and if their performance year spending is less than their reconciliation target price.
Participants may also owe CMS a repayment amount, subject to their quality performance adjustment, if their spending is above the reconciliation target price.
Target Prices will be based on 3 years of baseline data, prospectively trended forward to the relevant performance year, and calculated at the level of MS-DRG/HCPCS episode type and region.
The Target Prices will include a discount factor, a normalization factor, a retrospective trend adjustment factor, and a beneficiary and provider level risk-adjustment.
Moving Forward
Determine if your hospital is in one of the selected mandatory CBSA. If your hospital will be part of this model, you can find additional information and resources available on the CMS Innovation Center’s TEAM webpage at:https://www.cms.gov/priorities/innovation/innovation-models/team-model
Resource
CMS FY 2025 IPPS Final Rule webpage: https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps/fy-2025-ipps-final-rule-home-page
Beth Cobb
Medicare Transmittals & MLN Articles
August 5, 2024: MLN MM13706: ICD-10 & Other Coding Revisions to National Coverage Determinations: January 2025 Update
Make sure key stakeholders are aware of new codes and recent coding changes that will be effective January 1, 2025. Change Request (CR) 13706 includes the following NCDs and NCD specific updates:
- 20.33 TMVR/TEER: Effective January 1, 2025, any existing edits that require ICD-10 I34.0 and I34.1 be listed as primary will be deleted, along with clinical trial ICD-10 Z00.6 as secondary. These codes can appear in any position, and
- 210.10 STIs: June 30, 2024 is the end date for CPT 0353U. Effective July 1, 2024 add CPT 0455U (used for combined chlamydia and gonorrhea testing).
Also, CR 13706 removed the delayed termination of the Appropriate Use Criteria (AUC) Program modifiers with an effective date for the AUC modifier removal noted as being January 1, 2025. https://www.cms.gov/files/document/mm13706-icd-10-other-coding-revisions-national-coverage-determinations-january-2025-update.pdf
August 6, 2024: MLN MM13707: Hospice Payments: FY 2025 Update
This article provides information about payment rates, inpatient and aggregate caps, and wage index updates effective October 1, 2024. https://www.cms.gov/files/document/mm13707-hospice-payments-fy-2025-update.pdf
August 6, 2024: MLN MM13632: Hospital Outpatient Prospective Payment System: July 2024 Update - Revised
In this second iteration of this MLN article, CMS updated the number of certain drugs, biologicals, and radiopharmaceuticals and added new subsections g and j in Section 7. Substantive content changes are in dark red. https://www.cms.gov/files/document/mm13632-hospital-outpatient-prospective-payment-system-july-2024-update.pdf
August 19, 2024: MLN MM13486: Annual Wellness Visit: Social Determinants of Health Risk Assessment - Revised
This article was initially released May 3, 2024. In this update CMS has clarified that MACs will process G0136 using the Physician fee Schedule. https://www.cms.gov/files/document/mm13486-annual-wellness-visit-social-determinants-health-risk-assessment.pdf
August 21, 2024: MLN MM13750: Revisions to Medicare Part B Coverage of Pneumococcal Vaccinations Policy
Make sure your billing staff knows about updated Medicare coverage requirements for pneumococcal vaccinations and changes to align with the Advisory Committee on Immunization Practices (ACIP) recommendations for pneumococcal vaccination coverage. https://www.cms.gov/files/document/mm13750-revisions-medicare-part-b-coverage-pneumococcal-vaccinations-policy.pdf
August 22, 2024: MLN MM13766: Inpatient Psychiatric Facilities Prospective Payment System: FY 2025 Updates
This article highlights key information for your billing staff for FY 2025, for example the refinements to adjustment factors and electroconvulsive therapy (ECT) payment per treatment. https://www.cms.gov/files/document/mm13766-inpatient-psychiatric-facilities-prospective-payment-system-fy-2025-updates.pdf
August 26, 2024: MLN MM13757: New Waived Tests
Make sure your billing staff knows about Clinical Laboratory Improvement Amendments (CLIA) requirements, the one new CLIA-waived test approved by the FDA, and use of modifier QW for CLIA-waived tests. https://www.cms.gov/files/document/mm13757-new-waived-tests.pdf
August 29, 2024: MLN MM13734: Inpatient & Long-Term Care Hospital Prospective Payment System: FY 2025 Changes
This thirteen-page article provides updates that will be effective October 1, 2024. For example, regarding the Hospital-Acquired Condition (HAC) Reduction Program, CMS expects to issue the final list of hospitals that are subject to the HAC Reduction Program for FY 2025 to MACs in mid-September 2024. https://www.cms.gov/files/document/mm13734-inpatient-long-term-care-hospital-prospective-payment-system-fy-2025-changes.pdf
Coverage Updates
August 5, 2024: CMS Prior Authorization and Pre-Claim Review Initiatives Update
CMS is removing CPTs 64492 and 64494 from the list of codes that require prior authorization as a condition of payment. According to the revised Local Coverage Determinations for Facet Joint Interventions, three or four-level procedures are not medically necessary and non-covered. Therefore, the decision on the prior authorization request will always be non-affirmative, so submitting the request would be unnecessary. The full list of HCPCS codes has been updated to reflect this change. https://www.cms.gov/data-research/monitoring-programs/medicare-fee-service-compliance-programs/prior-authorization-and-pre-claim-review-initiatives/prior-authorization-certain-hospital-outpatient-department-opd-services
August 7, 2024: Final Notice – Transitional Coverage for Emerging Technologies (TCET) (CMS-3421-FN)
CMS announced in the August 8, 2024, edition of MLN connects that CMS has issued a final procedural notice outlining a Medicare coverage pathway to achieve more timely and predictable access to certain new medical technologies for people with Medicare. The new TCET pathway for certain FDA-designated Breakthrough Devices increases the number of National Coverage Determinations (NCDs) that CMS will conduct per year and supports both improved patient care and innovation by providing a clear, transparent, and consistent coverage process while maintaining robust safeguards for the Medicare population.
Link to August 8, 2024, MLN Connects: https://www.cms.gov/training-education/medicare-learning-network/newsletter/2024-08-08-mlnc
August 21, 2024: MLN MM13604: National Coverage Determination 110.23: Allogeneic Hematopoietic Stem Cell Transplantation – Revised
This MLN article was revised to add two procedure codes to the coding instructions (XW133C8 and XW143C8). https://www.cms.gov/files/document/mm13604-national-coverage-determination-11023-allogeneic-hematopoietic-stem-cell-transplantation.pdf
Compliance Education Updates
August 12, 2024: OIG Report: Medicare Improperly Paid Hospitals an Estimated $79M for Enrollees Who Had Received Mechanical Ventilation
OIG performed this audit due to prior OIG audits finding hospitals did not fully comply with Medicare requirements for MS-DRGs that require enrollees to have received 96 or more consecutive hours (i.e., 4 days or more) of mechanical ventilation. This audit specifically evaluated if claims reporting a mechanical ventilation start date that was 5 to 10 days before the enrollee discharge date were at risk for billing errors. The audit included inpatient claims with dates of service from October 2015 through September 2021 that were grouped to MS-DRGs 207 and 870. They found that for 17 of 250 sampled claims hospitals did not comply with requirements. Based on this finding, the OIG estimated that Medicare improperly paid hospitals $79.4M for the audit period. CMS concurred with OIG recommendations to recover the identified overpayments and continue to educate providers to reinforce requirements for billing mechanical ventilation. https://oig.hhs.gov/documents/audit/9957/A-09-22-03002.pdf
August 2024: MLN Fact Sheet MLN2886155: A Prescriber’s Guide to Medicare Prescription Drugs (Part D) Opioid Policies – Revised
This MLN Fact Sheet was revised in August to add information on the expansion of the exempted patient definition. Effective January 1, 2025, CMS is expanding the definition of an exempted patient being treated for cancer-related pain to include:
- Patients undergoing active cancer treatment,
- Cancer survivors:
- With chronic pain who’ve completed cancer treatment,
- In clinical remission, and
- Under surveillance only.
MLN Booklet MLN909188: Chronic Care Management Services – Revised
Earlier in May 2024, this MLN Booklet was revised to add new codes describing chronic pain management and treatment and added information about other care management services. https://www.cms.gov/outreach-and-education/medicare-learning-network-mln/mlnproducts/downloads/chroniccaremanagement.pdf
Other Updates
August 1, 2024: FY 2025 Hospital IPPS and LTCH PPS Final Rule (CMS-1808-F)
For FY 2025, the increase in operating payment rates for acute care hospitals paid under the IPPS that successfully participate in the Hospital Inpatient Quality Reporting (IQR) program and are meaningful electronic health record (EHR) users is 2.9%.
Link to Related CMS Fact Sheet: https://www.cms.gov/newsroom/fact-sheets/fy-2025-hospital-inpatient-prospective-payment-system-ipps-and-long-term-care-hospital-prospective-0
August 13, 2024: CMS Memorandum: Updated Model Signage for the Emergency Medical Treatment and Labor Act (EMTALA)
In the memorandum summary, CMS notes that they are “dedicated to safeguarding the health and safety of millions of individuals, a commitment that includes enforcing federal laws including EMTALA.” Further, CMS regulations require Medicare-participating hospitals to post signage outlining patients’ rights under EMTALA in the emergency department and areas where patients will be examined or treated, or wait to be examined or treated, for emergency medical conditions (EMCs). CMS is releasing updated model signage that hospitals may use to meet this obligation.” https://www.cms.gov/files/document/qso-24-17-emtala.docx
August 13, 2024: CMS Posts Content for Health Care Providers in Preparation of Coverage Transition from Part D to Part B of Antiretroviral Drugs to Prevent HIV
CMS is encouraging pharmacies and other affected parties to prepare now for this expected transition. They expect to release the final National Coverage Determination (NCD) in late September 2024. Coverage under Part B will begin once the final NCD is released. https://www.cms.gov/medicare/coverage/prep
August 15, 2024: HHS Press Release: Negotiating for Lower Drug Prices Works, Saves Billions
HHS announced agreements for new lower prices for 10 drugs that are “some of the most expensive and most frequently dispensed drugs in the Medicare program and are used to treat conditions such as heart disease, diabetes, and cancers.” New prices go into effect January 1, 2026 for people with Medicare Part D prescription drug coverage. CMS will continue to select up to 15 more drugs for 2027 and 2028, and up to 20 more drugs each year after that, as required by the Inflation Reduction Act (IRA).
Additional resources were included in the Thursday, August 15, 2024 edition of MLN Connects at https://www.cms.gov/training-education/medicare-learning-network/newsletter/2024-08-15-mlnc
August 2024: CMS FAQs about Add-on HCPCS Code G2211
CMS has published an FAQ document about office/outpatient (O/O) evaluation and management (E/M) visit complexity add-on HCPCS code G2211 (visit complexity inherent to evaluation and management associated with medical care services that serve as the continuing focal point for all needed health care services and/or with medical care services that are part of ongoing care related to a patient’s single, serious condition or a complex condition. (Add-on code, list separately in addition to office/outpatient evaluation and management visit, new or established)). https://www.cms.gov/files/document/hcpcs-g2211-faq.pdfBeth Cobb
Medicare Transmittals & MLN Articles
June 24, 2024: Changes to the Laboratory National Coverage Determination Edit Software: October 2024 Update
CMS advises providers to make sure your billing staff know about newly available codes, recent coding changes, and how to find NCD coding information.
June 25, 2024: MLN MM13656: Ambulatory Surgical Center Payment Update – July 2024
Initially released on June 13, 2024, this article was updated to remove HCPCS codes J3393, J3394, J9172, J9322, and J9324 from table of the change request, which now has 12 codes. https://www.cms.gov/files/document/mm13656-ambulatory-surgical-center-payment-update-july-2024.pdf
June 25, 2024: MLN MM13487: Diabetes Screening & Definitions Update: CY 2024 Physician Fee Schedule Final Rule
Initially released May 3, 2024, this article was updated to clarify claims processing requirements for ICD-10-CM diagnosis code Z13.1 and previously processed claims. https://www.cms.gov/files/document/mm13487-diabetes-screening-definitions-update-cy-2024-physician-fee-schedule-final-rule.pdf
June 27, 2024: Change Request (CR) 13649: Utilization of KX Modifier Medicare Physician Fee Schedule Payment for Dental Services Inextricably Linked to Covered Medical Services
This CR provides instructions to A/B MACs regarding usage of the KX modifier for dental services inextricably linked to covered medical services under the Medicare Physician Fee Schedule. CMS includes four examples of types of evidence that providers must submit to demonstrate the inextricable link between the dental service and covered medical service. https://www.cms.gov/files/document/r12702otn.pdf
July 18, 2024: MLN MM13717: Clinical Laboratory Fee Schedule & Laboratory Services Reasonable Charge Payment: October Update
Make sure your billing staff knows about the next private payor data reporting period of January 1, 2025 – March 31, 2025, and new and deleted HCPCS codes.
July 18, 2024: MLN MM13286: Lymphedema Compression Treatment Items: Implementation
Now in it’s fourth iteration, this MLN article was updated on July 18th to add information on how to prevent claims denial due to duplicate payments for compression bandaging systems. https://www.cms.gov/files/document/mm13286-lymphedema-compression-treatment-items-implementation.pdf
Compliance Education Updates
July: CMS’ Oral Health Cross-Cutting Initiative Fact Sheet
In the July 25, 2024, edition of MLN Connects, CMS released this Fact Sheet noting that overall health and well-being are impacted by oral health, affecting individuals, families, and communities. CMS is committed to eliminating barriers to oral health as part of our broader goal of improving quality, equity, and outcomes in the health care system. The CMS Oral Health Cross-Cutting Initiative aligns our programs and policies to better address oral health needs, and the fact sheet highlights this important work and accomplishments to date.
- Link to MLN Connects: https://www.cms.gov/training-education/medicare-learning-network/newsletter/2024-07-25-mlnc#_Toc172639983
- Link to Fact Sheet: https://www.cms.gov/files/document/oral-health-cci-fact-sheet.pdf
July: CMS Request for Inpatient for Improving the PEPPER
Also, in the July 25, 2024 edition of MLN Connects, CMS noted they are taking steps to improve the effectiveness, accessibility, and design of the Program for Evaluating Payment Patterns Electronic Reports (PEPPERs) and Comparative Billing Reports (CBRs). They note you can help by responding to their Request for Information (RFI) by August 19, 2024. https://www.cms.gov/training-education/medicare-learning-network/newsletter/2024-07-25-mlnc#_Toc172639983
Other Updates
CMS Publishes CY 2025 Final Rules for Home Health and End-Stage Renal Disease
Links to related Final Rule Fact Sheets:
- June 26, 2024: CY 2025 Home Health Prospective Payment System Proposed Rule Fact Sheet (CMS-1803-P)
- https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2025-home-health-prospective-payment-system-proposed-rule-fact-sheet-cms-1803-p
- June 27, 2024: CY 2025 End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) Proposed Rule Fact Sheet (CMS-1805-P)
- CMS Fact Sheet: https://www.cms.gov/newsroom/fact-sheets/calendar-year-2025-end-stage-renal-disease-esrd-prospective-payment-system-pps-proposed-rule-cms
June 27, 2024: CDC Recommendations Updated 2024-2025 COVID-19 and Flu Vaccines for Fall/Winter Virus Season
The CDC encourages providers to begin their influenza vaccination planning efforts now and to vaccinate patients as indicated once 2024-2025 influenza vaccines become available.
https://www.cdc.gov/media/releases/2024/s-t0627-vaccine-recommendations.htmlBeth Cobb
Kepro
Kepro’s service areas include CMS Regions 1,4, 6, 8, and 10. In December 2022, Kepro merged with CNSI. Six months later, they announced the organization had been rebranded as Acentra Health indicating that “the name Acentra Health derives from the root words “accelerate” and “central,” reflecting the company’s uncompromising resolve to be a vital partner to public sector health agencies in the delivery of comprehensive healthcare solutions and services, with “Health” being its central business focus.”
On April 30, 2024, Kepro published a special bulletin letting providers know about their name change. They encouraged providers to update their beneficiary notices, the Important Message from Medicare (IM) and the Notice of Medicare Non-Coverage (NOMNC), by replacing “Kepro” with “Acentra Health.” However, they did note that notices that still have the name “Kepro” listed will be accepted and validated and posted a list of FAQs on their website about this change. Key things to be aware of include:
- Phone numbers and fax numbers will not be changing,
- Their “go live” target date for rebranding to “Acentra Health” is August 1st and plan to have all their items changed by fall 2024,
- Kepro has been contracted to perform Medicare’s mandatory reviews through 2029 and its CMS Regions will not be changing,
- There will be a new website with a new web address, and will be available when the name change occurs by fall 2024, and
- They encourage you to sign up to their newsletter, Case Review Connections, which includes updates and news from Kepro.
A day after the special bulletin was published, on May 1, 2024, Kepro began a new process for hospital discharge appeals. Specifically, when a Medicare Fee-for-Service beneficiary calls Kepro to file a discharge appeal due to concerns with their discharge planning will be transferred to the Immediate Advocacy (IA) team. This team will review the concerns, identify any gaps or misunderstandings, and determine if additional guidance is needed. You can read more about this new process on Kepro’s Hospital Discharge Appeals webpage.
Livanta
Livanta’s service areas include CMS Regions 2, 3, 5, 7, and 9. On May 17, 2024 they distributed Provider Bulletin # 21 announcing that they had been awarded the BFCC-QIO contract for case reviews from May 1, 2024, through April 30, 2029. Livanta will also continue to serve as the national Medicare Claim Review contractor.
Livanta’s announcement includes the following four sections:
- Section 1: Beneficiary Case Review versus Claim Review,
- Section 2: What is changing, and what is staying the same?
- Section 3: Updating Contact Information and Memoranda of Agreement, and
- Section 4: Stay in Touch with Livanta.
If you are unsure who your BFCC-QIO is, you can use the QIO “Locate Your BFCC-QIO” tool at https://qioprogram.org/locate-your-bfcc-qio.
Resource
Livanta Provider Bulletin #21: https://www.livantaqio.cms.gov/assets/files/13-SOW-MD2024-QIOBFCC-PROV-1.pdfBeth Cobb
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