Knowledge Base Category -

My youngest nephew is currently the number one pitcher for his high school baseball team. His team recently participated in a spring break tournament in Memphis, Tennessee. Unfortunately, they only won one game. However, as my brother said, it was a valuable experience for the coaches to identify what the challenges are for the team for the rest of the season.

Similarly, hospitals are challenged with identifying who all of the players are that perform Medicare Fee-for-Service record reviews and what risk areas are they targeting. So, instead of Abbott and Costello trying to clarify “Who’s on First, What’s on second, and I Don’t Know’s on third,” this article identifies the Who’s (OIG, MAC, RAC, SMRC, CERT, and PEPPER), so you won’t feel like the third baseman “I Don’t Know.”

Office of Inspector General (OIG):

In June of 2017 the OIG began updating their once Annual Work Plan on a monthly basis. In an announcement they indicated that the Work Planning Process is “dynamic and adjustments are made throughout the year to meet priorities and to anticipate and respond to emerging issues with the resources available. You can learn more about the work plan, recently added items, all active work plan items and a work plan archive on the OIG website. You can access the Work Plan on the OIG website.

Medicare Administrative Contractors (MACs):

In October 2017, CMS implemented a Target Probe and Educate (TPE) Review Process for the MACs. With this type of approach, MACs focus on providers/suppliers who have the highest claim error rates or billing practices that vary significantly from their peers. In general, MACs will post a current Active Medical Log to their website. Depending on the MAC, this can sometimes be a challenge to find.

At this time, due to the ongoing COVID-19 Pandemic, TPE Reviews are on hold. However, MACs are conducting Post-Payment Reviews. Similar to TPE Reviews, MACs have been posting their post-payment review targets and audit findings to their websites.

If you are unsure of who your MAC is, you can find out on the CMS MAC Website List webpage.

Recovery Audit Program (RACs)

The RACs review claims on a post-payment basis. CMS maintains a RAC webpage where you will find links to each of the RACs across the country, Proposed Topics and Approved RAC Topics for review. A few of their current Approved Topics includes Total Knee Arthroplasty, Polysomnography, and Implantable Automatic Defibrillators (ICDs) medical necessity and documentation requirements reviews.

Supplemental Medical Review Contractor (SMRC)

The SMRC performs reviews at the direction of CMS with the aim of lowering improper payment rates.

On February 13, 2018 CMS announced that Noridian Healthcare Solutions, LLC, was awarded the new $227 million contract. Similar to the RACs, one of the current projects for Noridian is polysomnography. They are also conducting a medical review of COVID-19 claims in response to the 20% add on payment as a result of the Coronavirus Aid, Relief, and Economic Security (CARES) Act enacted on March 27, 2020.

The Comprehensive Error Rate Testing (CERT) Program

CMS implemented the CERT program to measure improper payments in the Medicare Fee-for-Service program. Annually, the CERT selects a stratified random sample of approximately 50,000 claims submitted to Part A/B MACs and Durable Medical Equipment MACs (DMACs) for review. It is important to keep in mind that the CERT reports a measurement of payments not meeting Medicare requirements and is not a “fraud rate.”

Every year an Annual Report and Report Appendices is published on the CERT CMS webpage. Reviewing these reports can help you identify high error prone case types. For example, in the 2020 Medicare Fee-for-Service Supplemental Improper Payment Data, the top four service types with highest improper payments in the hospital inpatient setting included:

• Major Hip and Knee Joint Replacement or Reattachment of Lower Extremity (MS-DRGs 469 and 470),
• Endovascular Cardiac Valve Replacements (MS-DRGs 266, and 267),
• Spinal Fusion Except Cervical (MS-DRGs 459 and 460), and
• Percutaneous Intracardiac Procedures (MS-DRGs 273 and 274).

Beneficiary and Family Centered Care Quality Improvement Organizations (BFCC-QIOs)

In 2015, CMS made the decision to move Short Stay reviews from the MACs to the BFCC-QIOs. These reviews are for hospital inpatient admissions with a length of stay less than two midnights and focus on ensuring doctors and hospitals are following the Part A payment policy for inpatient admission. Effective May 8, 2019, CMS temporarily suspended Short Stay reviews to find one contractor to perform Short Stay and Higher Weighted DRG (HWDRG) reviews. To date, CMS has not announced who this will be. In the meantime, you can find out who your BFCC-QIO is at this website: https://qioprogram.org/contact.

Program for Evaluating Payment Patterns Electronic Report (PEPPER)

The PEPPER is an electronic data report containing a single hospital’s claims data statistics for MS-DRGs and discharges at risk for improper payment due to billing, coding and/or admission necessity issues. Each report compares a hospital to their state, MAC Jurisdiction and the nation. “The Office of Inspector General encourages hospitals to develop and implement a compliance program to protect their operations from fraud and abuse. As part of a compliance program, a hospital should conduct regular audits to ensure charges for Medicare services are correctly documented and billed. The Program for Evaluating Payment Patterns Electronic Report (PEPPER) can help guide the hospital’s auditing and monitoring activities.” In general, a hospital’s Quality Department can provide the report to key departments (i.e. Case Management and HIM).

MMP’s Protection Assessment Report (PAR)

In January of 2017, the OIG, in collaboration with a group of compliance professionals, released a Resource Guide to measure the effectiveness of compliance programs.  Items 5.27-5.36 emphasize that a Risk Assessment is key to developing an effective Compliance audit/work plan.  As you can see from the list of Contractors above, the number of Medicare risk areas to consider can be overwhelming and the financial risk is great.

Medical Management Plus, Inc. (MMP) can help.  Our proprietary Protection Assessment Report incorporates current OIG, MAC, RAC, SMRC, CERT, and PEPPER risk areas into one report. Working closely with RealTime Medicare Data (RTMD), hospital specific Medicare fee-for-service paid claims data (volume, charges and payments) for risk areas is included in this report. If you are interested in learning more about this Report, please contact us using the form below or 205-941-1105.

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My first thought when I hear the word “smorgasbord,” in keeping with its primary definition, is a large well-stocked buffet meal. Can’t you just see and smell the seafood, soups, salad bars, meats, vegetables, side dishes and of course, desserts? It is hard to know where to begin and when to stop. The word “smorgasbord” has also come to mean any extensive array or variety. Recently, Palmetto GBA, the Medicare Administrative Contractor (MAC) for Jurisdictions J and M, has published a smorgasbord of articles about various DRGs. These articles can be found under General Information on the CERT Topics webpage on either JJ Part A CERT General Information or JM Part A CERT General Information.

As a reminder, CERT, which stands for Comprehensive Error Rate Testing (program), was established by CMS to monitor and report the accuracy of Medicare fee-for-service (FFS) payments. CERT contractors select random claims out of the total claims’ submissions for a contractor for review. This random review of claims differs from that of other Medicare review entities who review selected topics based on risk and data analysis of aberrant utilization and/or billing patterns. A random review results in lower error rates since high-risk areas are not targeted, but it is also able to identify a broader array of issues.

CERT findings are used by other Medicare contractors, especially the MACs, to select topics for targeted reviews. According to Palmetto’s CERT webpage, “The CERT program measures the error rate for claims submitted to Medicare contractors. Palmetto GBA uses CERT reports to identify areas of focus for our Provider Outreach & Education efforts. One of the major outcomes of these CERT reports is the paid claims error rate (percentage of dollars paid incorrectly).” This means the CERT is sort of a report card on the MACs and in order to make a better “grade” the MACs educate providers based on the errors identified by the CERT. This can be accomplished through targeted reviews as mentioned above or through educational articles such as those that are the topic of this article.

The Palmetto articles offer a variety of information from documentation requirements to information on assignment of principal and secondary diagnosis to coverage requirements to consideration of an alternate DRG. Below is a listing of the DRGs featured in a Palmetto article so far, at the time of the writing of this article. It is possible Palmetto may be adding other articles, so check the links above to watch for more articles.

DRG 266 - Endovascular Cardiac Valve Replacement with MCC

• Addresses Transcatheter Aortic Valve Replacement (TAVR) and Tricuspid Valve Replacement
• Provides requirements for and a listing of ICD-10-PCS procedure codes
• “The correct procedure code must depict: Initial placement, Replacement, Removal, or Adjustment”
• TPE review topic for Jurisdiction N MAC, First Coast.

DRG 460 – Spinal Fusion

• Provides documentation requirements and strategies to support payment for spinal fusion-related hospital care, to reduce audit errors, and to substantiate the medical necessity of the procedure for a particular patient
• “The most common reason for denial has been a lack of specific information about conservative care before the surgical intervention. Statements such as: “Failed outpatient therapy, admit for spinal fusion” are simply not sufficient evidence of medical necessity for the admission or the surgery.”
• Palmetto recently released a new LCD for Spinal Fusion services.
• TPE review topic for CGS, J15; new 2019 topic for Supplemental Medical Review Contractor (SMRC); and PEPPER target.

DRG 193, 194, and 195 - Simple Pneumonia and Pleurisy

• Addresses appropriate assignment of the principal and secondary diagnoses
• “Abnormal billing practices are seen when the principle and secondary diagnoses are improperly assigned, which can result in overpayments. The most common areas were related to sequencing of the principal diagnosis and improper coding of secondary diagnosis. Secondary diagnoses errors are related to selecting the improper code based on physician documentation or the addition of a secondary diagnosis that was not documented within the medical record.”
• DRGs 193 and 194 are PEPPER targets.

DRG 313 – Chest Pain

• Includes a listing of the principal diagnoses, a link to the MS-DRG Definition Manual, and the FY 2019 Final Rule and Correction Notice Table 5 – List of MS-DRGs, Relative Weighting Factors and Geometric & Arithmetic Mean Length of Stay.
• “The Principal Diagnoses are:
• R072 Precordial pain
• R0782 Intercostal pain
• R0789 Other chest pain
• R079 Chest pain, unspecified”
• Palmetto has an LCD that addresses Chest Pain

DRG 884 – Organic Disturbances and Mental Retardation and DRG 885 - Psychoses

• Provides information on coverage/benefits and documentation/billing requirements including the most common errors and reasons for denials
• The most common CERT errors are insufficient documentation and medically unnecessary service or treatment
• DRG 885 is currently a topic of review for both Palmetto JJ and JM Targeted Probe and Educate (TPE) program

DRG 092: Other Disorders of Nervous System with Complication or Comorbidity (CC) 

• Includes a link to the MS-DRG Definition Manual, and the FY 2019 Final Rule and Correction Notice Table 5 – List of MS-DRGs, Relative Weighting Factors and Geometric & Arithmetic Mean Length of Stay.

DRG 493 – Lower Extremity and Humerus Procedures except Hip, Foot, Femur w/CC)

• Includes a link to the MS-DRG Definition Manual, and the FY 2019 Final Rule and Correction Notice Table 5 – List of MS-DRGs, Relative Weighting Factors and Geometric & Arithmetic Mean Length of Stay.
• Also addresses medical record documentation requirements such as H&P, evidence of prior conservation treatment, outpatient records supporting medical necessity of procedure, imaging reports and operative reports.

DRG 682 - Renal Failure with Major Complication or Comorbidity (MCC)

• Contains a listing of the documentation required to support the principal and secondary diagnoses.
• This includes signs and symptoms, elevated urine protein, documented treatment, potential underlying cause, and specificity of whether acute or chronic failure
• Palmetto recently added this DRG as a TPE review topic for both JJ and JM

DRG 057 – Degenerative Nervous System Disorders W/O MCC

• Describes situations that can cause a neuropathic condition
• “The most common medical condition to cause peripheral neuropathy is diabetes mellitus. … Other medical conditions, such as HIV, kidney disorders, hormonal imbalances and cancers may also damage nerve cells. Heredity can play a role, as can traumatic situations such as a crush injury or fractured bone, which can result in compression, stretching, or severing of the nerve cell, leading to a neuropathic condition.”
• Also includes a link to the MS-DRG Definition Manual, and the FY 2019 Final Rule and Correction Notice Table 5 – List of MS-DRGs, Relative Weighting Factors and Geometric & Arithmetic Mean Length of Stay.

DRG 227 – Cardiac Defibrillator Implant W/O Cardiac Catheterization w/o MCC

• Reviews the covered indications for implantation of a cardiac defibrillator
• “Medicare defines the requirements for coverage of an implantable cardioverter-defibrillator (ICD) insertion in National Coverage Determination (NCD) 20.4, Implantable Automatic Defibrillators.”
• All MACs have a coverage article that addresses “Implantable Automatic Defibrillators – Coding and Billing” which can be found on the Medicare Coverage Database or your MAC’s website.

DRG 518 (Back and Neck Procedures except Spinal Fusion w/ Major Complications or Comorbidity (MCC) or Disc Device or Neurostimulator)

• Includes a link to the MS-DRG Definition Manual, and the FY 2019 Final Rule and Correction Notice Table 5 – List of MS-DRGs, Relative Weighting Factors and Geometric & Arithmetic Mean Length of Stay.

DRG 312 – Syncope and Collapse

• Addresses the causes and clinical considerations of syncope, process and approach of key components, and principal diagnosis.
• Clinical considerations include other DRGs that might be more appropriate if the cause and underlying conditions can be determined.
• Consideration of appropriate patient status - “People suspected of having cardiac syncope but who don't have serious medical conditions may be managed as outpatients. Further inpatient evaluation is needed if serious medical conditions are present.”
• PEPPER target

DRG 517 (Other Musculoskeletal System and Connective Tissue O.R. Procedures without CC/MCC

• Includes a link to the MS-DRG Definition Manual, and the FY 2019 Final Rule and Correction Notice Table 5 – List of MS-DRGs, Relative Weighting Factors and Geometric & Arithmetic Mean Length of Stay.
• Also includes top ICD diagnosis codes, top ICD procedure code, and Charge Capture Analysis

DRG 556 (Signs and Symptoms of Musculoskeletal System and Connective Tissue without CC/MCC

• Includes a link to the MS-DRG Definition Manual, and the FY 2019 Final Rule and Correction Notice Table 5 – List of MS-DRGs, Relative Weighting Factors and Geometric & Arithmetic Mean Length of Stay.
• Also includes top ICD diagnosis codes, top ICD procedure code, and Charge Capture Analysis
• “Do not use this DRG if the signs and symptoms are attributable to a specific condition:
• DRG 542 — Fatigue, stress or pathological fracture, initial encounter
• DRG 557 — Tendonitis, Myositis and Bursitis with MCC”

A smorgasbord indeed – lots to choose from and lots to digest. Happy reading!

One Medicare contractor that we do not talk a lot about, especially concerning outpatient services, is the Comprehensive Error Rate Testing (CERT) contractor. The purpose of the CERT program is to calculate the Medicare Fee-for-Service (FFS) improper payment rate. Improper Payments statutory requirements compel federal agencies to annually review programs they administer in order to reduce and recover improper payments. CERT measures the payment compliance of the Medicare Administrative Contractors (MACs) by evaluating a statistically valid stratified random sample of claims to determine if they were paid properly under Medicare coverage, coding, and billing rules. It is sort of a “report card” for the MACs. The random sampling makes CERT very different from other Medicare reviewers who select targets at potential “high risk” of noncompliance based on data analysis and findings from other reviews. In fact, the MACs often target their medical reviews based on the findings of the random CERT audits.

The reasons we do not discuss CERT findings much are the random nature of the audits and the more general types of findings that are published from CERT outpatient reviews. For outpatients, we often see errors such as missing signatures, lack of a signed order, or a missing report. CERT findings for an individual hospital are shared with that hospital and afford an opportunity to identify any potential system issues. However, a recent article by Palmetto GBA, the MAC for Jurisdictions J and M, about the top CERT errors for Jurisdiction J included some detailed examples of errors that are good lessons for all providers beyond missing signatures, orders and reports. You can find the article here. I encourage providers to check their MAC’s website for information on CERT findings for your jurisdiction.

You can read about all the common errors at the link above, but a few of them particularly caught my attention.

Psychiatric Admission

The common CERT error for psych admissions was medical records missing the physician-signed multidisciplinary treatment plan. This caught my attention because psychosis DRG 885 is a Targeted Probe and Educate review topic for Palmetto (JJ and JM) and First Coast (JN). As a result, I have written about the documentation requirements for psychiatric admissions before and one of my co-workers has recently performed an audit of psych records. Here is information about psych documentation requirements from a prior Wednesday@One article.

Psychiatric admission documentation should include:

• A psychiatric treatment plan developed within the first 3 days of admission that contains
• a substantiated diagnosis;
• short-term and long-range measurable, functional, time-framed goals;
• specific treatment modalities; and
• responsibilities of each treatment team member.
• Treatment plan updates documented at least weekly that are reflective of active treatment and that note changes in type, amount, frequency and duration of the treatments as well as the patient’s progress or lack of progress.
• Psychiatric evaluation and progress notes demonstrating clear evidence the acute psych condition requires active treatment in an inpatient psychiatric setting.
• An initial certification of psychiatric services signed by the physician and including documentation the services can reasonably be expected to improve the patient’s condition or are for diagnostic study.
• Recertifications supporting the medical necessity of continued care - the first by the 12th day of admission and then at least every 30 days thereafter.

Defibrillators/AICD—National Coverage Determination (NCD) 20.4

The common errors for Automatic Implantable Cardiac Defibrillators (AICDs) included:

• “Providers are not submitting physician progress notes to support the medical necessity of the device
• Missing formal shared decision making encounter between the patient and a physician using an evidence-based decision tool on ICDs prior to initial ICD implantation”

This is note-worthy because implantation of AICDs has a large reimbursement rate, generally over $25,000 so it would be a significant financial loss for a hospital for this service to be denied. NCD 20.4 has very detailed coverage requirements so if you perform these services, make sure you are familiar with and follow the requirements. To support the medical necessity of the service, you will need documentation from the physician’s office, such as history and physical and/or progress notes that describe the patient’s condition and the reasons the procedure is needed. You also need to include in the current medical record reports of relevant diagnostic testing and notes describing prior treatments and interventions including the patient’s response.

A term we are seeing more and more these days is “shared decision making.” The AICD NCD has the most descriptive requirements of what documentation is expected, requiring the use of an evidence-based decision tool to document the physician’s discussion with the patient about the risks versus the benefits of proceeding with the procedure. This requirement was added to NCD 20.4 in the February 2018 NCD revision, but the MACs did not implement the new NCD until March 2019. Remember however, that the effective date of the NCD revisions is February 15, 2018. For all claims your hospital submits after the implementation date, the formal SDM tool is required for dates of service on and after February 15, 2018.

Other coverage policies, both national and local, are beginning to include requirements for shared decision making. For example, it is part of NCD 20.34 for Percutaneous Left Atrial Appendage Closure (LAAC) (also known as the Watchman procedure). This NCD requires, “A formal shared decision making interaction with an independent non-interventional physician using an evidence-based decision tool on oral anticoagulation in patients with NVAF prior to LAAC. Additionally, the shared decision making interaction must be documented in the medical record.”

And in Palmetto’s new Local Coverage Determination (LCD) for Lumbar Spinal Fusion, we find the following:

“Where possible, there must be documented shared decision making with the patient or the individual who is serving as the proxy decision maker for the patient with the appropriate discussion of anticipated risks and benefits of the procedure…. Outcomes for fusion in revision surgery, usually do not lead to pain relief and as such fusion is considered a last resort treatment option only when all other treatment options have failed. This information must be communicated to the patient prior to surgery to allow for appropriate shared decision making with a well-informed patient. The medical record must reflect that this counseling was done and that the patient wished to undergo surgery with the appropriately informed consent.”

I think a well-informed patient is a good thing and I applaud CMS for beginning to make this a documented requirement. This documentation of shared decision making goes beyond a surgical consent – it should include the risks and benefits that were discussed with the patient. The tools CMS recommends for AICD and the Watchman procedure SDM make it easy to know what to include – in Palmetto’s Spinal Fusion LCD the SDM requirements are left up to the physician as to what should be included and how it should be documented. Providers should not skim over this however, as I expect Medicare reviewers will be looking for this documentation for all services that require it. I appreciate the challenge this may present for physicians especially with elderly patients who have declining cognitive abilities. In this case, the physician may need to document a discussion with a family member or friend or whoever is serving as the proxy decision maker for the patient.

Physicians and other providers can find information on the Agency for Healthcare Research and Quality (AHRQ) website about AHRQ’s SHARE Approach, “a five-step process for shared decision-making that includes exploring and comparing the benefits, harms, and risks of each option through meaningful dialogue about what matters most to the patient.”

Cataract Surgery

Speaking of the challenges of elderly patients, the CERT common error for cataract surgery caught my eye (unintended pun) because my mother has recently had cataract surgery on one eye and will undergo the second eye surgery soon. The error was the lack of documentation “to support the beneficiary’s own assessment of his/her functional status (usually in the form of a patient questionnaire).” I do not recall that I or my mother completed such a form, but had she filled it out she would have said she could see “fine.” However, we did have that discussion with the doctor, with my mother saying she could see just fine, and me insisting that lack of clear vision was causing issues with her activities of daily living. Hopefully the physician documented that conversation for justification of his and the facility’s Medicare payment.

Another common error listed for cataract surgery was that providers are only submitting documentation for the affected date of service. As you can tell from the above discussions about including diagnostic test results, prior treatments and physician office notes, documentation from only the procedure date of service would be lacking much critical information to support the services were medically necessary.

These are good lessons that contain some excellent learning points from CERT findings. Check the MAC websites (especially your own MAC’s) and review your hospital’s CERT report for more potential lessons from the CERT reviews. By being proactive, the CERT can be another education opportunity instead of just another means to deny your Medicare claims. 

What comes to mind when you hear the word PEPPER. For me, it takes me back to my childhood and the lyrics from the 1970’s Dr. Pepper commercial that invited you to join the Dr. Pepper “crowd” with the jingle:

“I’m a Pepper, he’s a Pepper,
She’s a Pepper, we’re a Pepper,
Wouldn’t you like to be a Pepper, too?
Be a Pepper. Drink Dr. Pepper.”

Fast forward a few decades to 2002 and PEPPER takes on a whole new meaning. This is when the TMF Health Quality Institute developed the Program for Evaluating Payment Patterns Electronic Report (PEPPPER) for short-term acute care hospitals in support of the Center’s for Medicare and Medicaid Services (CMS) Hospital Payment Monitoring Program (HPMP).

In 2008 HPMP ended but just as the famous Dr. Pepper jingle lives on, TMF was once again contracted by CMS through the Office of Financial Management Provider Compliance Group to develop, produce and distribute PEPPERs to all short- and long-term hospitals in the nation.

This article focuses on the Short-Term Acute Care Hospitals PEPPER. Specifically, the changes in the recently released Fiscal Year (FY) 2017 Q3 Short-Term Acute Care PEPPER and the PEPPER User’s Guide 23rd Edition. But first, for those not familiar with the PEPPER, let’s take a look at what it is and why it is a valuable resource for hospitals.

Background

What is PEPPER?

The PEPPER contains statistics for specific “Target Areas” that have been identified as being “at risk for improper payment due to billing, coding and/or admission necessity issues.” The Centers for Medicare & Medicaid Services (CMS) approves the Short Term PEPPER target areas.

The PEPPER compares you to other hospitals in your state, Medicare Administrative Contractor (MAC) Jurisdiction and to the nation. “Comparisons enable a hospital to determine if it is an outlier, differing from other short-term acute care hospitals.” Reports are delivered to a hospital electronically, are hospital specific, and provide the most recent twelve federal fiscal quarters for each target area.

In addition to your hospital specific report, the PEPPER Resources National-level Data Reports webpage includes a Target Area Analysis that provides claims volume, average length of stay and average Medicare Payment for each of the target areas.

Why is this a Valuable Resource for your Hospital?

The PEPPER User’s Guide notes that the Office of Inspector General (OIG) “encourages hospitals to develop and implement a compliance program to protect operations from fraud and abuse. As part of a compliance program, a hospital should conduct regular audits to ensure charges for Medicare services are correctly documented and billed.”

It is important to understand that “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 areas of potential concern:

• Significant changes in billing practices,
• Possible over- or under-coding,
• Changes in lengths of stay.”

PEPPER User’s Guide, 23rd Edition, Effective with Q3FY 2017 Release, What’s Changed?

Defibrillator Implant Target Area Discontinued

Defibrillators as a “Target Area” was initially added to the PEPPER with the release of the 3rd Quarter FY 2015 Report Release.

The 20th User’s Guide indicated that the Comprehensive Error Rate Testing (CERT) contractor had identified a high error rate (58%) for defibrillator implants (DGs 226-227) in the Supplementary Appendices for the Medicare Fee-for-Service 2014 Improper Payments Report. This “Target Area” was “structured to compare the number of defibrillator implants performed on an inpatient basis, as compared to all defibrillator implants performed at the hospital (inpatient or outpatient).”

Interestingly, the Department of Justice (DOJ) posted a notice on October 30, 2015 that they had reached settlements with 457 hospitals in 43 states for more than $250 million related to defibrillators being “implanted in Medicare patients in violation of Medicare coverage requirements.” Coincidence? I will leave that up to you to decide.

This target area has been discontinued due to a continued decrease in the number of hospitals with sufficient data to generate statistics.

Septicemia Target Area Denominator Revised

“In general, the target areas are constructed as ratios and expressed as percents, with the numerators representing discharges that have been identified as problematic… and the denominator includes these DRGs as well as DRGs to which the original DRG is frequently changed.”

The Septicemia target area has been revised to include the following DRGs in the denominator:

• DRG 193: Simple Pneumonia and Pleurisy with MCC,
• DRG 194: Simple Pneumonia and Pleurisy with CC,
• DRG 195: Simple Pneumonia and Pleurisy without CC/MCC,
• DRG 207: Respiratory System Diagnosis with Ventilator Support 96+ Hours, and
• DRG 208: Respiratory System Diagnosis with Ventilator Support <96 Hours.

“This change was made following an analysis of DRG changes for septicemia claims, which identified a relatively large number were changes to simple pneumonia and respiratory system diagnosis DRGs.”

“One-day Stays for Medical DRGs,” “One-Day Stays for Surgical DRGs,” Two-Day Stays for Medical DRGs” and “Two-Day Stays for Surgical DRGs” Revised

This group of target areas have all been revised to exclude claims with the following patient discharge status codes:

• 02: Discharged/Transferred to a Short-Term General Hospital for Inpatient Care,
• 82: Discharged/Transferred to a Short Term General Hospital for Inpatient Care with a Planned Acute Care Hospital Inpatient Readmission,
• 07: Left Against Medical Advice, and
• 20: Expired.

“This change was made to strengthen the statistics by excluding the same claims from the numerator and denominator, thereby focusing solely on the length of stay in the numerator.”

Short-Term Acute Care hospitals are part of the PEPPER crowd and PEPPER can be a valuable resource for your hospital. I encourage you to spend some time on the PEPPER Resources website where you can find a copy of the most recent User’s Guide, Training and Resources available to you including testimonials and training sessions.

The October 2016 release of the Medicare Quarterly Provider Compliance Newsletter included two issues specific to hospitals. This article focuses on the Recovery Auditors automated review performed to identify discharge status codes that had been improperly submitted under the IPPS Post-Acute Care Transfer (PACT) Policy.

Recovery Auditor Finding

“Analysis of discharge status codes and secondary claim data identified improper payments. Where a hospital used discharge status code 01, but should have shown a transfer to another care setting with a different discharge status code, the hospital may be overpaid for the inpatient services. It is crucial that hospitals place the correct discharge status code on claims to avoid subsequent overpayment identification and recovery.”

Transfer Policy Background

MLN® Acute Care Hospital Inpatient Prospective Payment System Fact Sheet (ICN 006815) indicates that under the Transfer Policy DRG payments are reduced when:

• The patient’s LOS is at least 1 day less than the geometric mean LOS for the DRG;
• The patient is transferred to another hospital covered by the Acute Care Hospital IPPS or, for certain MS-DRGs, discharged to a post-acute setting (PACT Policy);
• The patient is transferred to a hospital that does not have an agreement to participate in the Medicare Program (effective October 1, 2010); and
• The patient is transferred to a CAH (effective October 1, 2010)

PACT Policy and Discharge Status Codes

Cases with a length of stay less than the Geometric Mean Length of Stay (GMLOS) for a PACT DRG will not reimburse the full Diagnosis Related Group (DRG) payment if the patient was transferred to a post-acute care (PAC) setting. This policy involves the following patient discharge status codes:

When a patient is discharged with the status code of 01, Medicare’s overpayment edit will look for:

• “The presence of a transfer claim to a Skilled Nursing Facility, Cancer Hospital, Psychiatric Hospital, Children’s Hospital, Inpatient Rehab Facility, or Long Term Care Facility that commences or continues within one day of the acute care discharge, or
• A transfer claim to Home Health Care that commences or continues within three days of the acute care discharge.”

How to Avoid this Problem

Medicare advises that “hospitals should take steps to assure claims coders understand that the patient discharge status code is a crucial data element in determining payment for inpatient stays.” They go on to provide links to resources providing more information on how to avoid these errors.

MMP, Inc. advises that key stakeholders in your facility read and share the October 2016 issue of the Medicare Quarterly Compliance Newsletter.

This week we introduce a new area of focus for our weekly Wednesday@One newsletter – Hospital Compliance. Most of what Medical Management Plus already does relates to compliance because we are all about Medicare’s rules and regulations, but a more intense focus on Compliance never hurts. The newsletter this week includes articles on Compliance 101 and hospital issues addressed in Medicare’s Quarterly Compliance Newsletter. One of the challenges of Hospital Compliance is deciding where to direct your efforts, as there are many issues to consider. One suggestion is to follow the leader - follow the lead of Medicare contractors and entities that pursue improper payments, fraud, waste, and abuse within the Medicare program.

Medicare Administrative Contractors (MACs) – In addition to processing Medicare claims, MACs perform medical reviews, provide education to providers, and establish coverage requirements. Being familiar with their medical review topics, LCDs, and education offerings will help lead you to what the MACs think are “risk” areas. MMP publishes new medical review announcements and findings from all the MACs in the Wednesday@One newsletter on the third week of the month. Recent review topics for MACs include:

• Laboratory BNP Test (Cahaba)
• High-cost drugs (Palmetto, Noridian JE)
• Pulmonary Rehab (Palmetto)
• Kwashiorkor (Novitas)
• Joint Replacements (Cigna)
• Facet Joint Injections (Noridian JF)

Supplemental Medical Review Contractor (SMRC) – Strategic Health Solutions is the SMRC and performs “tasks aimed at lowering the improper payment rates and increasing efficiencies of the medical review functions of the Medicare and Medicaid programs.” One of their main tasks is to perform nationwide medical reviews as directed by CMS. You may want to consider their topics as your topics for addressing risks. Their website includes a list of their current projects and their completed projects. Current projects include the following topics:

• Electrodiagnostic testing
• Intensity Modulated Radiation Therapy (IMRT)
• Bariatric Surgery
• Blepharoplasty Services

Comprehensive Error Rate Testing (CERT) – CMS uses the CERT program to calculate the Medicare Fee-for-Service improper payment rate. CERT publishes an annual report that can be found on the CERT website.  The major errors identify by CERT reviews include:

• Lack of or insufficient documentation to support services
• Incorrect patient status
• Failure to meet medical necessity
• Coding errors

Program for Evaluating Payment Patterns Electronic Report (PEPPER) – A link from the CERT website labeled as “Hospital Specific Improper Payments Information and Training Resources” connects readers directly to the PEPPER Resources website. PEPPER can help guide a hospital’s auditing and monitoring activities by comparing your hospital’s statistics for discharges and services vulnerable to improper payments to the statistics of other hospitals in your state, MAC jurisdiction and nationally. This helps you identify where your hospital is an outlier. Some of the current PEPPER targets are:

• Stroke Intracranial Hemorrhage
• Septicemia
• Medical/Surgical DRGs with CC or MCC
• Excisional Debridement
• Chronic Obstructive Pulmonary Disease
• Syncope
• Thirty Day Readmissions
• One-Day and Two-Day Stays

Office of Inspector General (OIG) – The OIG protects the integrity of Department of Health & Human Services (HHS) programs as well as the health and welfare of program beneficiaries. They publish an annual Work Plan that describes their target areas for the coming year and then perform audits throughout the year of the risk areas identified in the Work Plan. Compliance departments can use the Work Plan and the audit findings to select areas at risk of fraud, waste, and abuse within healthcare. Some of the topics addressed in the OIG 2015 Work Plan Mid-Year Update include:

• Outlier payments
• Provider-based status
• Mechanical ventilation
• Compliance reviews of Medicare billing requirements
• Dental claims
• Hospital wage data
• Kwashiorkor
• Intensity modulated radiation therapy (IMRT)

Recovery Auditors (RAs or RACs) – The mission of the Recovery Audit program is to identify and correct Medicare improper payments. Each RAC has their own website that list the issues they are reviewing to identify Medicare overpayments and underpayments. This is another great source for hot topics for your hospital compliance program. Although the RAC program has had to step back some lately, CMS recently released the report to Congress of the 2014 RAC activity which reported $2.39 billion of overpayments were collected, and $173.1 million of underpayments repaid to providers. For updates on the RA program, see the Medicare Recovery Audit Program webpage. We are still awaiting the Recovery Audit program to move forward to the next Scope of Work, but until then the current RACs have begun to post some new issues for review. For hospitals, these include:

• Cardiac PET Scan (Cotiviti, formerly Connolly)
• Sacral Nerve Stimulation for Urinary and Fecal Incontinence (Performant)
• Rambizumab (Performant)
• Cataract Surgery Once in a Lifetime (Performant)
• Bariatric Surgery (Performant)
• MS-DRG Validation: Cardiac Defibrillator Implantation (Performant)
• MS-DRG Validation: Permanent Cardiac Pacemaker Implant (Performant)
• Back and Neck Procedure except Spinal Fusion (CGI Federal)

Following Medicare’s lead is an easy way to begin to put together your hospital compliance plan. It gets harder, of course, as you consider what risk areas may be specific to your facility, but at least it is a place to start.

So much of healthcare is a team effort – doctors, nurses, and ancillary services working together to care for patients; billing, coding and case management working together to ensure appropriate inpatient billing; ancillary departments and compliance working together to ensure proper documentation to support billing; and many other incidences of coordination within a hospital that are too numerous to name. The October Medicare Quarterly Provider Compliance Newsletter includes a few compliance issues related to hospitals that definitely require a team effort: one for inpatient billing and a couple regarding outpatient laboratory services.

The inpatient item addresses same-day readmissions. When a Medicare beneficiary is readmitted on the day of discharge to the same acute care PPS hospital, and the reason for the readmission is related to the condition treated in the prior admission, the hospital must combine the original and subsequent stay onto a single inpatient claim. Medicare does not specifically define “related” other than to say “for symptoms related to, or for evaluation and management of, the prior stay’s medical condition” so this can be a judgment call for the hospital. If the claims are combined, coding of diagnoses and procedures must encompass the entire “combined” stay which began when the patient was first admitted and ends with the discharge from the readmission. Present on Admission (POA) indicators are based on the original admission date since this is “one” admission for Medicare.

If the same-day readmission is not related to the prior inpatient admission, the hospital should submit separate inpatient claims and report Condition Code B4 on the second admission. Make sure your documentation clearly supports an unrelated admission because Medicare may request your records for review to support a separate same-day readmission. If hospitals fail to add the condition code B4 to a second unrelated admission, Medicare payment may be at risk of recoupment for automated reviews by Recovery Auditors or other Medicare reviewers.

Hospitals need to have a system in place to address same-day readmissions to:

• Determine if the readmission is related to the prior admission or not. This is a clinical decision and you need to involve clinical staff, such as Case Management, in this review.
• Appropriately code the entire episode for related combined admissions. Your Medical Records Coders will have to look at both records as one and appropriately apply the correct diagnosis, procedure, and POA codes. Unrelated readmissions are coded separately with each record standing on its own.
• Combine the two claims into one for related same-day readmissions by the Billing Department. If the claim for the first admission has already been submitted, it will need to be cancelled and a new or adjusted combined claim submitted. Remember that coding will need to be revised for combined claims before they are submitted. For unrelated same-day readmissions, the condition code B4 will need to be added to the second admission.

As you can see, this requires several different hospital departments working together to get this right - definitely a team effort!

The Compliance newsletter also addresses some issues related to outpatient laboratory services. Laboratory services may be denied upon review by a Comprehensive Error Rate Testing (CERT) contractor due to lack of orders and/or documentation to support medical necessity or due to services exceeding frequency limits.

The issue of the ordering physician’s signature on a laboratory requisition has been the topic of much discussion for several years. And the final CMS decision – a laboratory requisition does not have to be signed by the ordering physician - is a little misleading. Because even though the requisition does not have to be signed, somewhere there must be a valid signed physician’s order or signed documentation supporting the intent to order the laboratory tests. There also must be documentation supporting the medical necessity for the lab services - a diagnosis code or medical condition reason for which the test is being ordered. These requirements can be met by having a physician’s signature and a documented diagnosis on the laboratory requisition. If the lab requisition is not signed or does not contain a supporting diagnosis, a valid order and proof of medical necessity must be submitted to the reviewer. This could be a copy of the physician’s office notes or other types of physician documentation. CERT may send a request for documentation to the referring physician, but remember it is the responsibility of the billing provider to supply the requested documentation regardless of the place of service. This same concept applies to other types of outpatient services such as DMEPOS and ambulance services.

Laboratory services that exceed Medicare’s established frequency limits may also be denied by automated edits or when reviewed by the CERT contractor. There are a number of lab tests and other services that have frequency limits. The newsletter gives examples of a Hepatitis C Screening test exceeding one per lifetime and a screening pap smear exceeding the limit of one every two years. The lab test that MMP most commonly sees exceeding the frequency limit is HCPCS code G0103, Screening PSA which is covered once a year for asymptomatic men over 50.

You may notice that all of the services with frequency limits mentioned above are preventive or screening services. Medicare preventive services, both lab and non-lab services, generally have frequency limits and there are several resources that describe the coverage conditions for preventive services. One such resource is https://www.medicare.gov/coverage/preventive-and-screening-services.html . Some non-screening laboratory tests also have frequency limits: for example, hemoglobin A1C is generally only covered once every three months, with some exceptions, and a lipid panel is necessary once a year for monitoring or following patients with hyperlipidemia. It is often difficult for the testing laboratory or hospital to know when a patient last had a preventive service or a certain lab test. If you are concerned about loss of revenue due to exceeding frequency limits, remember it is acceptable to give patients an Advanced Beneficiary Notice of Non-Coverage (ABN) for services with frequency limits. For more information about ABNs see https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/downloads/ABN_Booklet_ICN006266.pdf .

Hopefully healthcare professionals working together as a team can take care of patients, appropriately document their services, follow the Medicare and other payers’ rules, and submit a clean claim to obtain payment for their services. Not an easy task so working as a team is a must.