Knowledge Base Category -
MEDICARE TRANSMITTALS – RECURRING UPDATES
Notice of New Interest Rate for Medicare Overpayments and Underpayments -3rd Qtr Notification for FY 2019
The Medicare contractors shall implement an interest rate of 10.375 percent effective April 17, 2019 for Medicare overpayments and underpayments.
https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2019Downloads/R313FM.pdf
Quarterly Update for Clinical Laboratory Fee Schedule and Laboratory Services Subject to Reasonable Charge Payment
International Classification of Diseases, 10th Revision (ICD-10) and Other Coding Revisions to National Coverage Determination (NCDs)
A maintenance update of International Classification of Diseases, 10th Revision (ICD-10) conversions and other coding updates specific to National Coverage Determinations (NCDs). These NCD coding changes are the result of newly available codes, coding revisions to NCDs released separately, or coding feedback received.
Remittance Advice Remark Code (RARC), Claims Adjustment Reason Code (CARC), Medicare Remit Easy Print (MREP) and PC Print Update
Claim Status Category and Claim Status Codes Update
Quarterly Healthcare Common Procedure Coding System (HCPCS) Drug/Biological Code Changes – July 2019 Update
Updates the HCPCS code set for codes related to drugs and biologicals.
OTHER MEDICARE TRANSMITTALS
Implementation to Exchange the List of Enrollment in Electronic Medical Documentation Requests (eMDR) for Registered Providers via the Electronic Submission of Medical Documentation (esMD) System
Introduces the enrollment process for the providers who intend to get their Additional Documentation Request (ADR) letters electronically (as eMDR) through their registered Health Information Handler.
Re-implementation of the AMCC Lab Panel Claims Payment System Logic
Because CMS no longer has payment logic to roll up panel pricing for organ or disease-oriented panels (also known as Automated Multi-Channel Chemistry or AMCC tests), laboratories must report the HCPCS code for the AMCC panel test where appropriate and not report separately the tests that make up that panel.
Documentation of Evaluation and Management Services of Teaching Physicians
A change in policy of documentation for teaching physicians providing evaluation and management (E/M) services.
Implementation of the Skilled Nursing Facility (SNF) Patient Driven Payment Model (PDPM)
Effectuates changes to the SNF Prospective Payment System (PPS) that are required for the PDPM. These changes were finalized in the FY 2019 SNF PPS Final Rule (83 FR 39162). SNFs billing on Type of Bill (TOB) 21X and hospital swing bed providers billing on TOB 18X, (subject to SNF PPS) will be subject to these requirements.
Reporting the HCPCS Level II Modifiers of the Patient Relationship Categories and Codes
Provides educational information regarding reporting of the HCPCS Level II code modifiers for the Patient Relationship Categories and Codes (PRC).
Additional Processing Instructions to Update the Standard Paper Remit (SPR)
Effective October 1, 2019, MACs will mask the Patient Control Number field (also named the Patient CNTRL Number) or the Patient Account Number (ACNT) field on any print file used to create an SPR for mailing if it contains a HICN or SSN in accordance with the Social Security Number (SSN) Fraud Prevention Act of 2017.
MEDICARE SPECIAL EDITION ARTICLES
Proper Use of Modifier 59
Clarifies existing policy on the proper use of Modifier 59. Revised article to correct updated CPT code.
MEDICARE COVERAGE UPDATES
National Coverage Determination (NCD90.2): Next Generation Sequencing (NGS)
CMS covers diagnostic laboratory tests using next generation sequencing when performed in a CLIA-certified laboratory when ordered by a treating physician and when specific requirements are met.
Delay in Final Chimeric Antigen Receptor (CAR) T-cell therapy National Coverage Determination
CMS will not be issuing a final National Coverage Determination on CAR T-cell therapy for cancer today (5-17-19), but a decision is forthcoming.
MEDICARE PRESS RELEASES
CMS outlines comprehensive strategy to foster innovation for transformative medical technologies
MEDICARE EDUCATIONAL RESOURCES
Medicare Fast Facts
Medicare Fast Facts resources this month include:
- Payment for Outpatient Services Provided to Beneficiaries Who Are Inpatients of Other Facilities
OTHER MEDICARE UPDATES
2020 Hospital Inpatient Prospective Payment System (IPPS) and Long-Term Acute Care Hospital (LTCH) Prospective Payment System Proposed Rule
https://s3.amazonaws.com/public-inspection.federalregister.gov/2019-08330.pdf
Fact Sheet for Proposed Rule - https://www.cms.gov/newsroom/fact-sheets/fiscal-year-fy-2020-medicare-hospital-inpatient-prospective-payment-system-ipps-and-long-term-acute
BFCC-QIO Contract Awarded for 12th Scope of Work to Start July 2019
The 11th Scope of Work is coming to an end. On April 30th KEPRO and LIVANTA were again awarded the BFCC-QIO contracts for the 12th Scope of Work (SOW) that will run from 2019 – 2023
Temporary Pause of BFCC-QIO Short Stay and HWDRG Reviews
CMS has temporarily paused the performance of both Short Stay reviews and Higher Weighted Diagnosis-Related Group (HWDRG) reviews by the Beneficiary and Family Centered Care Quality Improvement Organizations (BFCC-QIOs). CMS took this action to procure a new BFCC-QIO contractor. Going forward, Short Stay reviews and HWDRG reviews will resume with a single organization performing reviews on a national basis. CMS anticipates a contract award to be issued by the 3rd quarter of calendar year 2019.
https://qioprogram.org/qionews/articles/temporary-pause-bfcc-qio-short-stay-and-hwdrg-reviews
Local Coverage Determination (LCD) Process Modernization Qs & As
Describes recent changes to the LCD process.
https://www.cms.gov/Medicare/Coverage/DeterminationProcess/Downloads/LCD_QsAs.pdf
System Edits Will Be Activated for OPPS Providers with Multiple Service Locations
On July 1, 2019, CMS will begin enforcing edit requirements for Outpatient Prospective Payment System (OPPS) providers with multiple service locations submitting claims to Medicare.
At least annually, DRG classifications and relative weights are adjusted to reflect changes in treatment patterns, technology, and other factors that may change the relative use of hospital resources. This week is the third article in our series about the 2020 IPPS Proposed Rule. This week highlights proposed changes to specific MS-DRG Classifications.
Pre-MDC
Extracorporeal Membrane Oxygenation (ECMO)
In FY 2019, three new procedure codes were finalized describing different types of ECMO treatments being used (central and peripheral). However, the codes were not finalized prior to the release of the FY 2019 IPPS Proposed Rule meaning there was no proposed Major Diagnostic Category (MDC), MS-DRG or O.R. vs. Non-O.R. designation made for the new codes.
Given this unique situation, CMS Clinical Advisors reviewed the predecessor central ECMO code (5A15223) and determined the new peripheral codes should not sequence to Pre-MDC MS-DRG 3 where the central ECMO code is assigned.
Instead the new Peripheral ECMO codes were designated as Non-O.R. Procedures impacting MS-DRG assignment for specific medical MS-DRGs. The following table reflects the differences in ECMO Procedures DRG assignment:
In the FY 2020 IPPS Proposed Rule, stakeholders expressed the following concerns:
- MS-DRG assignment for ECMO should not be based on how the patient is cannulated as most of the cost can be attributed to a patien’ts severity of illness,
- There was a lack of opportunity for public comment on the final MS-DRG assignments,
- Patient access to ECMO treatment and programs is now at risk because of inadequate payment, and
- CMS did not appear to have access to enough patient data to evaluate for appropriate MS-DRG assignment.
On review, Clinical Advisors support the assignment of the new ICD-10-PCS procedure codes for peripheral ECMO procedures to the same MS-DRG as the open central ECMO. Therefore, CMS is proposing the following:
- Reassign peripheral ECMO codes from MS-DRGs 207, 291, 296 and 870 to Pre-MDC MS-DRG 003,
- Remove ECMO from the description of these MS-DRGs, and
- Maintaining the assignment of peripheral ECMO codes of Non-O.R. affecting MS-DRG assignment.
Allogenic Bone Marrow Transplant
A request was made to create new MS-DRGs for cases that would identify patients undergoing an allogeneic hematopoietic cell transplant (HCT) procedure according to the donor source (related or unrelated donor source). The requester indicated this would more appropriately recognize the clinical characteristics and cost differences in allogeneic HCT cases.
CMS data analysis of MS-DRG 014 cases reporting HCT related donor source, HCT unrelated donor source and unspecified donor source had comparable average length of stay and average costs. Thus, no proposal was made to create new MS-DRGs. However, as a result of CMS’ review of procedure codes they are proposing to:
- Reassign 4 ICD-10-PCS codes for HCT procedures specifying autologous cord blood stem cell as the donor source from MS-DRG 014 to MS-DRGs 016 and 017, and
- Delete 128 clinically invalid codes from the transfusion table describing arterial access as transfusion procedures always use venous access rather than arterial access.
Chimeric Antigen Receptor (CAR) T-Cell Therapy
“Chimeric Antigen Receptor (CAR) T-cell therapy is a cell-based gene therapy in which a patient’s own T-cells are genetically engineered in a laboratory and used to assist in the patient’s treatment to attack certain cancerous cells. Blood is drawn from the patient and the T-cells are separated. The laboratory then utilizes the CAR process to genetically engineer the T-cells, resulting in the addition of a chimeric antigen receptor that will bind to a certain protein on the patient’s cancerous cells. The CAR T-cells are then administered to the patient by infusion.”
Two CAR T-cell therapy drugs received FDA approval in 2017 (KYMRIAH™ manufactured by Novartis Pharmaceuticals Corporation and YESCARTA™ manufactured by Kite Pharma, Inc.). Current ICD-10-PCS procedures codes involving the CAR T-cell therapy drugs includes:
- XW033C3 (Introduction of engineered autologous chimeric antigen receptor t-cell immunotherapy into peripheral vein, percutaneous approach, new technology group 3), and
- XW043C3 (Introduction of engineered autologous chimeric antigen receptor t-cell immunotherapy into central vein, percutaneous approach, new technology group 3).
Both codes became effective October 1, 2017. Procedures described by these two ICD–10–PCS procedure codes are designated as non-O.R. procedures impacting MS–DRG assignment.
For FY 2019, CMS finalized their proposals to:
- Assign ICD-10-PCS procedure codes XW033CS and XW043C3 to Pre-MDC MS-DRG 016 for FY 2019, and
- Revise the title of MS-DRG 016 from “Autologous Bone Marrow Transplant with CC/MCC” to “Autologous Bone Marrow Transplant with CC/MCC or T-cell Immunotherapy.”
- CAR T-cell therapy was approved for new technology add-on payments in FY 2019.
In the FY 2020 IPPS Proposed Rule, a request was made to create new MS-DRGs for CAR T-cell therapy. The requestor noted this would improve payment in the inpatient setting. CMS does not believe enough data is available to make a change at this time. However, CMS is seeking comments on payment alternatives for CAR-T cell therapies and have proposed to continue the new technology and add-on payments for FY 2020.
MDC 1: Diseases and Disorders of the Nervous System
Carotid Artery Stent Procedures
Current logic for case assignment to MS-DRGs 034, 035, and 036 (Carotid Artery Stent Procedures with MCC, with CC, and without CC/MCC respectively) “is comprised of two lists of logic that include procedure codes for operating room (O.R.) procedures involving dilation of a carotid artery (common, internal or external) with intraluminal device(s).”
CMS identified 46 ICD-10-PCS procedures codes in the second list that do not describe dilation of a carotid artery with intraluminal device. CMS is proposing to remove these 46 codes from MS-DRGs 034, 035 and 036. (The 46 codes are available in a table on pages 19182 – 19183 of the Proposed Rule in the Federal Register.)
These 46 ICD-10-PCS codes are also assigned to MS-DRGs 037, 038, and 039 (Extracranial Procedures with MCC, with CC, and without CC/MCC, respectively.) Therefore, CMS also examined claims data for this MS-DRG group and are proposing to:
- Remove 96 ICD-10-PCS procedure codes describing dilation of a carotid artery with an intraluminal device from the logic for MS-DRG group 037-038 and 039,
- Reassign 6 ICD-10-PCS procedure codes describing dilation of a carotid artery with an intraluminal device from MS-DRG group 037, 038 and 039 to MS-DRG group 034, 035, and 036.
MDC 4: Diseases and Disorders of the Respiratory System
Pulmonary Embolism
A request was made to reassign the following three ICD-10-CM diagnosis codes for Pulmonary Embolism (PE) with acute core pulmonale from MS-DRG 176 (PE without MCC) to MS-DRG 175 (PE with MCC):
- I26.01 – Septic pulmonary embolism with acute cor pulmonale,
- I26.02 – Saddle embolus of pulmonary artery with acute cor pulmonale, and
- I26.09 – Other pulmonary embolism with acute cor pulmonale.
The requestor noted with the FY 2019 IPPS Final Rule special logic change where a Principal Diagnosis could no longer be its own CC or MCC this resulted in these three codes being assigned to MS-DRG 176 when no other MCC is present. The requestor stated MS-DRG 176 does not appropriately account for cost and resource utilization associated with these cases.
CMS claims analysis supported the requestor’s statement about cost and resource utilization. Therefore, CMS is proposing to:
- Reassign cases reporting diagnosis codes I16.01, I26.02 and I26.09 to MS-DRG 175, and
- Revise the MS-DRG 175 title to “Pulmonary Embolism with MCC or Acute Cor Pulmonale.”
The difference in RW, GMLOS and National Payment Rate are reflected in the following table.
MDC 5: Diseases and Disorders of the Circulatory System
Transcatheter Mitral Valve Repair (TMVR) with Implant
CMS received a request to modify the current MS-DRG assignment for TMVR with implant procedures (MS-DRG 228 and 229: Other Cardiothoracic Procedures with MCC and without MCC, respectively). CMS provides a detailed discussion of the MitraClip® System (MitraClip®) for transcatheter mitral valve repair in previous rulemakings:
- FY 2014 IPPS Final Rule: CMS was unable to consider the application for a new technology add-on payment for MitraClip® because it did not receive FDA approval by the July 1, 2013 deadline.
- FY 2015 IPPS Final Rule:
- Proposal was finalized to not create a new MS-DRG or to reassign cases reporting ICD-9 procedure code 35.97 describing MitraClip® to another MS-DRG, and
- Under a new application, the request for new technology add-on payments for the MitraClip® System was approved.
- FY 2016 IPPS Final Rule: For ICD-10 based MS-DRGs to fully replicate for ICD-9-CM based MS-DRGs, ICD-10-PCS code 02UG3JZ (Supplement mitral valve with synthetic substitute percutaneous approach) which identified MitraClip® technology in ICD-10-PCS code translation was assigned to new MS-DRGs 273 and 274 (Percutaneous Intracardiac Procedures with MCC and without MCC, respectively) and continued to be assigned to MS-DRGs 231 and 232 (Coronary Bypass with PTCA with MCC and without MCC, respectively).
- FY 2017 IPPS Final Rule:
- The new technology add-on payment was discontinued.
- ICD-10-PCS code 02UG3JZ (Supplement mitral valve with synthetic substitute percutaneous approach) was reassigned from MS-DRGs 273 and 274 to the new “collapsed” MS-DRG pair MS-DRG 228 and 229 (Other Cardiothoracic Procedures with MCC and without MCC, respectively).
The requestor in the FY 2020 IPPS Proposed Rule believes that TMVR is more similar to the replacement procedures in MS-DRGs 266 and 267 compared to other procedures currently assigned to MS-DRGs 228 and 229 and “noted that both TMVR procedures and endovascular cardiac valve replacements use a percutaneous approach, treat cardiac valves, and use an implanted device for purposes of improving the function of the specified valve.”
In the Proposed Rule CMS indicates “Our clinical advisors continue to believe that transcatheter cardiac valve repair procedures are not the same as a transcatheter (endovascular) cardiac valve replacement.
However, they agree with the requestor and, based on our data analysis, that these procedures are more clinically coherent in that they also describe endovascular cardiac valve interventions with implants and are similar in terms of average length of stay and average costs to cases in MS-DRGs 266 and 267 when compared to other procedures in their current MS-DRG assignment. For these reasons, our clinical advisors agree that we should propose to reassign the endovascular cardiac valve repair procedures (supplement procedures)…to the endovascular cardiac valve replacement MS-DRGs.”
After additional data analysis, CMS is making the following proposals:
- Modify the structure of MS-DRGs 266 and 267 by reassigning the procedure codes describing transcatheter cardiac valve repair (supplement) procedure,
- Revise the title of MS-DRG 266 from “Endovascular Cardiac Valve Replacement with MCC” to “Endovascular Cardiac Valve Replacement and Supplement Procedures with MCC,”
- Revise the title of MS-DRG 267 from “Endovascular Cardiac Valve Replacement without MCC” to “Endovascular Cardiac Valve Replacement and Supplement Procedure without MCC,”
- Create two new MS-DRGs with a two-way severity split for the remaining (non-supplement) transcatheter cardiac valves.
- Proposed New MS-DRG 319 (Other Endovascular Cardiac Valve Procedures with MCC), and
- Proposed New MS-DRG 320 (Other Endovascular Cardiac Valve Procedures without MCC).
Pacemaker Leads
CMS noted that ICD-10-PCS procedure code 02H60JZ (Insertion of pacemaker lead into right atrium, open approach) was inadvertently omitted from the GROUPER logic for MS-DRGs 260, 261, and 262. They are proposing to add this procedure code to the list of Non-O.R. procedures that would impact MS-DRGs 260, 261, and 262 when reported as a stand-alone procedure code.
MDC 8: Diseases and Disorders of the Musculoskeletal System and Connective Tissue
Knee Procedures with Principal Diagnosis of Infection
CMS received a request to add ICD-10-CM diagnosis codes M00.9 (Pyogenic arthritis, unspecified) and A54.42 (Gonococcal arthritis) to the list of principal diagnoses for MS-DRGs 485, 486, 487 (Knee Procedure with Principal Diagnosis of Infection with MCC, with CC, and without CC/MCC, respectively) in MDC 8.
Currently, when reported as the principal diagnosis, these two ICD-10-CM diagnosis codes group to MS-DRGs 488 and 489 (Knee Procedures without Principal Diagnosis of Infection with and without CC/MCC, respectively) when a knee procedure is also reported on the claim. CMS notes that neither of these codes is specific to the knee.
After analysis, CMS is proposing the following:
- Add ICD-10-CM diagnosis code M00.9 to the list of principal diagnosis codes for MS-DRGs 485, 486 and 487. Note, clinical advisors did not recommend the same for ICD-10-CM diagnosis code A54.42 as this code is not specifically indexed to include the knee or any infection in the knee.
- Add 10 additional ICD-10-CM diagnosis codes specific to the knee and describing an infection, and
- Remove 8 ICD-10-CM diagnosis codes from the list of principal diagnosis for MS-DRG 485, 486 and 487 as they do not describe an infection of the knee.
Scoliosis: Neuromuscular and Secondary Scoliosis and Kyphosis
Requests were made to add ICD-10-CM diagnosis codes describing neuromuscular scoliosis and ICD-10-CM diagnosis codes describing secondary scoliosis and secondary kyphosis to the list of principal diagnosis codes for MS-DRGs 456, 457, and 458 (Spinal Fusion except Cervical with Spinal Curvature or Malignancy or Infection or Extensive Fusions with MCC, with CC, without CC/MCC, respectively).
After analysis, CMS is proposing to add 5 codes describing neuromuscular scoliosis and 8 codes describing secondary scoliosis and secondary kyphosis to the list of principal diagnosis codes for MS-DRGs 456, 457, and 458. CMS also identified 34 ICD-10-CM diagnosis codes describing conditions involving the cervical region that are not clinically appropriate for assignment to MS-DRGs 456, 457, and 458. CMS has proposed to remove these 34 codes from this MS-DRG group.
MDC 11: Diseases and Disorders of the Kidney and Urinary Tract
Extracorporeal Shock Wave Lithotripsy (ESWL)
Data analysis revealed a steady decline in inpatient cases reporting urinary stones and an ESWL procedure over the past five years. CMS indicates that due to an ESWL procedure being a Non-O.R. procedure and the decreased usage of this procedure in the inpatient setting, clinical advisors believe there is no longer a reason to subdivide the MS-DRGs for urinary stones (MS-DRGs 691 &692, and 693 & 694) based on ESWL procedures.
CMS is proposing to:
- Delete MS-DRGs 691 and 692 (Urinary Stones with ESW Lithotripsy with CC/MCC and without CC/MCC respectively) and
- Revise the MS-DRG title for MS-DRGs 693 and 694 from “Urinary Stones without ESW Lithotripsy with MCC” and “without MCC”, respectively to “Urinary Stones with MCC” and “Urinary Stones without MCC.”
MDC 12: Diseases and Disorders of the Male Reproductive System
Currently, four ICD-10-CM diagnosis codes describing body parts with male anatomy are assigned to MDC 5 (Diseases and Disorders of the Circulatory System) in MS-DRGs 302 and 303 (Atherosclerosis with MCC and without MCC, respectively).
There was a request to review these codes and consider reassignment to MDC 12. Based on this request and claims data analysis, CMS is proposing to reassign these four codes from MDC 5 in MS-DRGs 302 and 303 to MDC 12 in MS-DRGs 729 and 730 (Other Male Reproductive System Diagnosis with CC/MCC and without CC/MCC, respectively).
MDC 14: Pregnancy, Childbirth and the Puerperium
Proposed Reassignment of Diagnosis Code 099.89 (Other specified Diseases and Conditions complicating pregnancy, childbirth and the puerperium)
CMS is proposing to reclassify ICD-10-CM diagnosis code 099.89 (Other specified diseases and conditions complicating pregnancy, childbirth and the puerperium) from a postpartum condition to an antepartum condition.
If finalized, coding logic would assign a case with an O.R. procedure and this code to MS-DRGs 817, 818, or 819 (Other Antepartum Diagnoses with O.R. Procedure with MCC, with CC, and without CC/MCC, respectively).
When no O.R. procedure is reported on the claim, the logic would assign the case to MS-DRGs 831, 832, and 833 (Other Antepartum Diagnoses without O.R. Procedure with MCC, with CC, and without CC/MCC, respectively).
MDC 23: Factors Influencing Health Status and Other Contacts with Health Services
Proposed Assignment of Diagnosis Code R93.89 (Abnormal finding on diagnostic imaging of other specified body structures)
There was a request to reassign ICD-10-CM diagnosis code R93.89 from MS-DRGs 302 and 303 (Atherosclerosis with MCC and without MCC, respectively) in the Circulatory MDC 5 to MDC 23. The requestor did not suggest a specific MS-DRG assignment in MDC 23.
After analysis, CMS is proposing to reassign ICD-10-CM diagnosis code R93.89 to MS-DRGs 947 and 948 (Signs and Symptoms with MCC and without MCC, respectively).
Review of Procedure Codes in MS-DRGS 981 through 983 and 987 through 989
Adding Procedures Codes Currently Grouping to MS-DRGS 981 – 983 and 987 – 989 into MDCs
Annually, CMS conducts a review of procedures resulting in assignment to the O.R. and non-extensive O.R. Procedures Unrelated to Principal Diagnosis MS-DRG Groups (981-983 and 987-989). This review is done on the basis of volume, by procedure, to see if it is more appropriate to move a procedure to a surgical MS-DRG for the MDC where the Principal Diagnosis falls.
There are several proposals being made to move diagnosis and procedures codes back into a specific MDC for FY 2020. For those interested, you can find these proposals on pages 19216 – 19229 of the Proposed Rule in the Federal Register.
MMP strongly encourages key stakeholders at your facility take the time to review this proposed rule and submit comments. CMS is accepting comments through 5 p.m. EDT on June 24, 2019.
Beth Cobb
This is the second article in a series of 2020 IPPS Proposed Rule Articles. Last week’s article provided details of the significant proposed changes to the CC and MCC severity designations. This week we take a look at proposed payment rate changes and the wage-index adjustment proposal being touted by CMS as a key priority of “Rethinking Rural Health.”
Proposed Payment Rate Changes by the Numbers
“By law, CMS is required to update payment rates for IPPS hospitals annually, and to account for changes in the prices of goods and services used by these hospitals in treating Medicare patients, as well as for other factors. This is known as the hospital “market basket.” The IPPS pays hospitals for services provided to Medicare beneficiaries using a national base payment rate, adjusted for a number of factors that affect hospitals’ costs, including the patient’s condition and the cost of hospital labor in the hospital’s geographic area.”
- 3.2% is the projected market basket update for general 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.
- 3.7% is the CMS estimated total increase in IPPS payments for FY 2020.
- $4.7 Billion is the increase in total Medicare spending on inpatient hospital services, including capital, projected by CMS for FY 2020.
Hospital Readmission Reduction Program (HRRP)
- 2,599 is the number of hospitals that CMS estimates will have base operating DRG payments reduced based on their hospital readmission rates.
- $550 Million the estimated amount CMS will save in FY 2020 as a result of decreased payments to the estimated 2,599 hospitals.
Hospital Inpatient Quality Report (IQR) Program
CMS estimates that proposed changes for this program will result in changes to the information collection burden compared to previously adopted requirements. Specifically, the proposal to adopt the Hybrid Hospital-Wide All-Cause Readmission (Hybrid HWR) measure. Estimated impact of this change:
- 2,211 hours in total collection burden increase, and
- $83,266 total cost increase for all participating IPPS hospitals annually.
Hospital Value-Based Purchasing (VBP) Program
This program is a budget neutral program because “by law, the amount available for value-based incentive payments under the program in a given year must be equal to the total amount of base operating MS-DRG payment amount reduction for that year.”
- $1.9 Billion is the estimated amount available for value-based incentive payments for FY 2020 discharges.
“Rethinking Rural Health:” Proposed Changes to the Inpatient Hospital Wage Index
Public Comments
In the FY 2019 IPPS Proposed Rule, CMS solicited comments, suggestions and recommendations for changes to the Medicare inpatient hospital wage index. Fast forward to the April 2019 release of the FY 2020 IPPS Proposed Rule where CMS shares that “many of the responses received…reflect a common concern that the current wage index system perpetuates and exacerbates the disparities between high and low wage index hospitals.” There was also a concern “that the calculation of the rural floor has allowed a limited number of States to manipulate the wage index system to achieve higher wages for many urban hospitals at the expense of hospitals in other states, which also contributes to wage index disparities.”
Inpatient Hospital Wage Index, What is it?
In the April 23, 2019 Press Release CMS Advances Agenda to Re-Think Rural Health and Unleash Medical Innovation, CMS notes the following about the Inpatient Hospital Wage Index:
- It specifies how inpatient payment rates are adjusted to account for local differences in wages that hospitals face in their respective labor markets,
- It is intended to measure differences in hospital wage rates across geographic regions,
- It is updated annually based on wage data reported by hospitals, and
- Hospitals located in areas with wages less than the national average receive a lower Medicare payment rate than hospitals located in areas with wages higher than the national average.
An example provided in the Press Release is that of hospital in a rural community receiving about $4000 in payment for treatment of a Medicare beneficiary with pneumonia while a hospital in a high wage area could receive nearly $6,000 for the same case due to differences in the wage index. CMS goes on to note that, “high wage index hospitals, by virtue of higher Medicare payments, can afford to pay their staff more, allowing the hospitals to continue operating as high wage index hospitals. Conversely, low wage index hospitals often cannot afford to pay wages that would allow them to climb to a higher wage index. Over time, this creates a downward spiral that increases the disparity in payments between high wage index and low wage index hospitals, and payment for rural hospitals and other low wage index hospitals decline.”
FY 2020 Inpatient Hospital Wage Index Proposals
Stopping the “Downward Spiral”
First, CMS is proposing to increase the wage index for hospitals with a wage index value below the 25th percentile wage index. For FY 2020, the 25th percentile wage index value across all hospitals is 0.8482.
Specifically, the increase would be equal to half the difference between the otherwise applicable final wage index value for a year for that hospital and the 25th percentile wage index value for that year across all hospitals.
To better understand what the increase would be, CMS provides the following example in the Proposed Rule:
- First, assume the wage index for a geographically rural Alabama hospital is 0.6663,
- Second, note the 25th percentile wage index value for FY 2020 is 0.8482.
- Third, determine half the distance between the hospital wage index and the 25th percentile (0.8482 – 0.6663/2) = 0.0910
- Fourth, add the Rural Alabama hospital wage index with half the difference to get the new FY 2020 wage index value for the hospital (0.6663 + 0.0910) = wage index 0.7573.
This proposal would be effective for at least 4 years beginning in FY 2020.
Budget Neutrality
Second, CMS believes that “it would be appropriate to maintain budget neutrality for the low wage index policy proposed…by adjusting the wage index for high wage index hospitals.” Specifically, CMS is proposing to identify high wage index hospitals as hospitals in the highest quartile. This would be hospitals above the 75th percentile wage index across all hospitals for a fiscal year.
The methodology would be analogous to methodology used for hospitals below the 25th percentile. Following is the example provided in the Proposed Rule:
- First, assume high wage index Hospital A has a wage index value of 1.7351,
- Second, CMS notes that based on data for the proposed rule, the 75th percentile wage index value is 1.0351.
- Third, determine the distance between the hospital wage index and the 75th percentile (1.7351 – 1.0351) = 0.7000,
- Fourth, CMS would estimate the uniform multiplicative budget neutrality factor needed to reduce those distances for all high wage index hospitals so the estimated decreased payments offset the estimated increased aggregate payments to low wage index hospitals. For FY 2020 the estimated factor is 3.4 percent. Therefore, Hospital A’s wage index would be reduced by 0.0238 (Prior distance of 0.7000 x 0.034) = 0.0238.
- Fifth, the new wage index for Hospital A would be 1.7113 (that is, current value 1.7351 – wage reduction of 0.0238) = 1.7113.
To help mitigate any significant wage index decreases, CMS is “proposing to place a 5-percent cap on any decrease in a hospital’s wage index from the hospital’s final wage index in FY 2019. In other words, we are proposing that a hospital’s final wage index for FY 2020 would not be less than 95 percent of its final wage index for FY 2019.”
Rural Floor Calculation Change
Commenters to the FY 2019 Proposed Rule “indicated that another contributing systemic factor to wage index disparities is the rural floor….for discharges on or after October 1, 1997, the area wage index applicable to any hospitals that is located in an urban area of a State may not be less than the area wage index applicable to hospitals located in rural areas in that State.”
CMS is proposing to remove the urban to rural reclassifications from the calculation of the rural floor beginning in FY 2020. You can read a detailed discussion about this on pages 19396 – 19398 of the FY 2020 IPPS Proposed Rule in the Federal Register.
April 29, 2019 CMS.Gov Newsroom Article: “What they are Saying / CMS Advances Agenda to Re-Think Rural Health and Unleash Medical Innovation”
Less than a week after the FY 2020 IPPS Proposed Rule was released, CMS posted a CMS.Gov Newsroom Article with reaction from key healthcare stakeholders to the Proposed Rule. Since I live in Alabama and work for a company located in Birmingham, I wanted to share what Alabama leaders are saying about “Rethinking Rural Health.”
Executive Vice President and Chief Policy Officer Danne Howard
Alabama Hospital Association
“We could not be more grateful to CMS Administrator Seema Verma and her staff for listening to our concerns and taking action,” Howard said. “Alabama has been penalized for decades by this flawed formula, which has resulted in some states being paid three times as much as Alabama’s hospitals for the exact same procedure. Alabama’s entire congressional delegation worked tirelessly in a non-partisan manner to make this happen, and we specifically would like to acknowledge Sens. Richard Shelby and Doug Jones and Rep. Bradley Byrne for leading the charge.”
Sen. Richard Shelby (R-Ala)
“The Medicare Wage Index has negatively affected Alabama hospitals for over 20 years,” said. [sic], who wrote a letter last month signed by the state’s congressional delegation to Center for Medicare and Medicaid Services Administrator Seema Verma requesting a change to the index. After two decades of working to address a problem that significantly contributes to heightened hospital closures throughout our state, I am glad to see Administrator Verma and CMS taking steps to solve this dire issue. I look forward to continuing my work with the agency to make sure that this sort of careless imbalance is eliminated moving forward.”
Sen. Doug Jones (D-Ala)
“The decision by CMS to propose a new reimbursement formula is welcome news and a great first step for the health care providers across our state who have struggled for years with an inexplicably low reimbursement rate,” the senator said. “These hospitals provide care to all Alabamians, regardless of their insurance status, and they have to absorb the costs when that care isn’t reimbursed. That puts the entire system on slippery financial footing and can hurt the broader community if a hospital is forced to close its doors.”
CMS is accepting comments to the Proposed Rule no later than 5 p.m. EDT on June 24, 2019.
Resources:
CMS 2020 IPPS Proposed Rule Home Page: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/FY2020-IPPS-Proposed-Rule-Home-Page.html
CMS Fact Sheet Announcing Release of 2020 Proposed Rule: https://www.cms.gov/newsroom/fact-sheets/fiscal-year-fy-2020-medicare-hospital-inpatient-prospective-payment-system-ipps-and-long-term-acute
CMS April 23, 2019 Press Release: CMS Advances Agenda to Re-think Rural Health and Unleash Medical Innovation: https://www.cms.gov/newsroom/press-releases/cms-advances-agenda-re-think-rural-health-and-unleash-medical-innovation
Beth Cobb
MEDICARE TRANSMITTALS – RECURRING UPDATES
July 2019 Quarterly Average Sales Price (ASP) Medicare Part B Drug Pricing Files and Revisions to Prior Quarterly Pricing Files
Changes to the Laboratory National Coverage Determination (NCD) Edit Software for July 2019
Quarterly Update to the National Correct Coding Initiative (NCCI) Procedure-to-Procedure (PTP) Edits, Version 25.2 Effective July 1, 2019
OTHER MEDICARE TRANSMITTALS
Billing for Hospital Part B Inpatient Services
Provides billing instructions for hospital Part B inpatient services.
Evaluation and Management (E/M) When Performed with Superficial Radiation Treatment – REVISED
Revised to clarify that providers need to bill the 25 modifier when performing E/M services with CPT code 77401.
Pub. 100-04, Chapter 29 – Appeals of Claims Decisions – Revisions
Incorporates the following policy updates to the Medicare Claims Processing Manual:
- The policy on use of electronic signatures
- Timing of signatures on transfer of appeal rights and the appointment of representative forms
- Tolling an adjudication timeframe when trying to cure a defective appointment form
- Limiting scope of redetermination review in certain instances
- Application of good cause for late filing involving beneficiary accessibility
- Application of good cause where there is a declared disaster
New Waived Tests
Informs MACs of new Clinical Laboratory Improvement Amendments of 1988 (CLIA) waived tests approved by the Food and Drug Administration (FDA).
MEDICARE SPECIAL EDITION ARTICLES
Activation of Systematic Validation Edits for OPPS Providers with Multiple Service Locations
Claim information for Outpatient Prospective Payment System (OPPS) providers that have multiple service locations.
MEDICARE COVERAGE UPDATES
CMS Proposes Updates to Coverage Policy for Transcatheter Aortic Valve Replacement (TAVR)
CMS is updating the coverage criteria for hospitals and physicians to begin or maintain a TAVR program.
MEDICARE EDUCATIONAL RESOURCES
Medicare Fast Facts
Medicare Fast Facts resources this month include:
- Proper Coding for Specimen Validity Testing Billed in Combination with Urine Drug Testing
- Provider Minute Video: The Importance of Proper Documentation
OTHER MEDICARE UPDATES
April 2019 Patients Over Paperwork Newsletter
Updates on ongoing work to reduce administrative burden and improve the customer experience for hospitals.
GAO Report for Medicare and Medicaid:
CMS Should Assess Documentation Necessary to Identify Improper Payments
GAO examined: (1) Medicare and Medicaid documentation requirements and factors that contribute to improper payments due to insufficient documentation; and (2) the extent to which Medicaid reviews provide states with actionable information.
The kicker to the saying that “time flies when you’re having fun,” is that time also flies when you are not. However, I have been extremely fortunate over the past 10 years to actually enjoy my job. Last October marked my 10-year anniversary as an employee of Medical Management Plus, Inc. (MMP). Yes, it is nerdy that I actually enjoy reading Medicare regulations, but I do. I enjoy even more writing articles, such as this one, which I hope share Medicare and related guidance in an easy-to-read and understandable format and help our readers do their own challenging healthcare jobs better. The rapid passing of time is relevant because the very first article I wrote at MMP over ten years ago was about the 2008 AHIMA (American Health Information Management Association) article, “Managing an Effective Query Process.”
In February of this year, the Association of Clinical Documentation Improvement Specialists (ACDIS) and the American Health Information Management Association (AHIMA) jointly produced “Guidelines for Achieving a Compliant Query Practice (2019 Update).” This Practice Brief is the recommended industry standard for provider queries and describes best practices for coding and clinical documentation improvement (CDI) professionals performing query functions. It supersedes the 2016 and all prior versions.
Coders and CDI professionals should carefully review and follow the practices described in this Brief, but other healthcare team members also need to be aware of this guidance. For example, case management, quality management professionals, and infection control clinicians educate physicians to document a certain way. Since these interactions could ultimately affect coding, these healthcare professionals need to be aware of and comply with query compliance standards. Other healthcare professionals, such as compliance, revenue cycle, patient financial services, physician groups, facility leaders, and any who work with documentation and coding also need to be familiar with this guidance. The Brief also points out that it serves as a resource for external reviewers, such as the Office of Inspector General (OIG), government contractors, payor review agencies, and others.
According to the Brief, a query is a communication tool “used to clarify documentation in the health record for documentation integrity and accurate code assignment.” In addition to ensuring a medical record that accurately reflects patient complexity and the facts of the encounter, an effective query process ensures appropriate reimbursement and accurate risk-adjustment and quality of care statistics derived from claims data.
The Practice Brief states, “The objective of a query is to ensure the reported diagnoses and procedures derived from the health record documentation accurately reflect the patient’s episode of care.” Among other functions, some of the main uses of queries are to:
- Determine if a clinical condition is present when supported by clinical indicators within the record,
- Clarify conflicting documentation,
- Add specificity in certain situations,
- Establish “cause and effect” relationships, and
- Clarify when a documented diagnosis does not appear to be clinically supported.
I am not going to list all of the requirements of a compliant query and encourage those affected to read the entire Practice Brief for all the guidance provided. Here are some of the main points from the Brief that caught my attention.
Leading Queries
Bearing in mind that my background is compliance, I will start with the rule that queries should not be leading – they should not “lead” the physician or other practitioner to the preferred answer or to a specific diagnosis or procedure. Multiple choice queries are acceptable, but be sure to include options that allow the provider to explain other clinical options or to reply that the answer may be clinically undetermined. In the words of the Brief, “the choices provided as part of the query must reflect reasonable conclusions specific to the clinical scenario of the individual patient.”
Impact on Reimbursement
At one time, reimbursement seemed to be the major driver of the query process. This should not be – querying is about obtaining accurate documentation and coding, which often can affect a facility’s payment. However, keep your focus on accuracy and completeness and never include the impact on reimbursement or on quality measures in the query. It is best not to even discuss the effects of querying on reimbursement or quality measures with your physicians or others. If your records are accurate and complete, your facility will receive the appropriate reimbursement and accurate quality measures.
Specificity
Queries can be helpful for determining a more specific code in some situations. However, bear in mind “that code accuracy is not the same as code specificity.” Although some payors resist unspecified codes, there are times when unspecified codes are appropriate based on the clinical situation.
Clinical Indicators
When querying for documentation of medical diagnoses or conditions that are clinically evident, be sure to include clinical indicators that:
- “Are specific to the patient and episode of care
- Support why a more complete or accurate diagnosis or procedure is sought
- Support why a diagnosis requires additional clinical support to be reportable”
Clinical indicators can be such things as the physical exam and assessment, diagnostic findings, and treatments. Clinical indicators should be relevant and clearly support the clinical condition. More is not always better, as the Brief states, “The quality of clinical indicators—how well they relate to the condition being clarified—is more important than the quantity of clinical indicators.”
Patient History and Prior Encounters
Coding from prior encounters without documentation in the current record is not allowed, but generating a query based on information from a prior encounter may be acceptable, but only if the information is clinically pertinent to the current encounter. The Brief includes a list of example situations where information from a prior encounter could be used to query, such as specificity, baseline status, present on admission (POA) status, cause and effect, and etiology. The Brief cautions that “it is inappropriate to “mine” a previous encounter’s documentation to generate queries not related to the current encounter.”
Documentation and Retention of Queries
Sometimes it is easier to explain a situation to a provider in person. Verbal queries are acceptable, but the exchange, including the provider’s response, should be documented and maintained. And like written queries, conversations should not be leading. When documenting these interactions, be sure to include the same components you would include in a written query – the details of the discussion, the reason for the query, the clinical indicators, options discussed and the provider’s decision. Also, date, time, and sign your documentation.
It is recommended the query be part of the permanent medical record. Another option is to keep queries as part of the business record. They should be easily retrievable for auditing, monitoring, and compliance. Facilities should have a policy that addresses query retention and it should apply to all queries, regardless of provider response.
Clinical Validation and Escalation
Sometimes it may appear that a documented diagnosis is not clinically supported. These clinical validation queries can be more challenging than other types of queries. AHIMA has developed a separate Practice Brief to address these concerns titled “Clinical Validation: The Next Level of CDI.” AHIMA members can view this Brief in the AHIMA HIM Body of Knowledge at http://bok.ahima.org.
Clinical validation may be a good time to involve a physician advisor or the chief medical officer. Facilities should have a documented escalation policy for certain situations, which may include clinical validation situations, failure to respond, or other issues. There should also be policies defining the role and expectations of those issuing the queries and the responders.
Again, this is a high-level overview of the Practice Brief on Compliant Queries. The Brief contains much more information, including query examples in Appendix B, which I found to be particularly enlightening. Be sure to read the entire Brief carefully – study it, discuss it with other stakeholders within your facility, and use it to develop your policies, procedures and practices. Be sure to include initial training for new employees and on-going education for all employees. Also, watch for updated guidance - I will not promise to be around in another 10 years to share the information.
Debbie Rubio
On March 26, 2019 CMS published a Proposed Decision Memo for Transcatheter Aortic Valve Replacement (TAVR) (CAG-00430R). In a related CMS Press Release CMS noted they would continue to cover TAVR under Coverage with Evidence Development (CED) when furnished according to an FDA-approved indication.
TAVR Background
CMS first released National Coverage Determination (NCD) 20.32 Transcatheter Aortic Valve Replacement (TAVR) with an effective date of May 1, 2012. At that time, TAVR was considered a new technology for use in treating patients with aortic stenosis where a biprosthetic valve is inserted percutaneously using a catheter and implanted in the orifice of the native aortic valve.
TAVRs are performed in a cardiac catheterization lab or a hybrid operating room/cardiac catheterization lab with advanced quality imaging and with the ability to safely accommodate complicated cases that may require conversion to an open surgical procedure. The interventional cardiologist and cardiothoracic surgeon jointly participate in the intra-operative technical aspects of TAVR.
NCD 20.32 allows for coverage of the TAVR Procedure under Coverage with Evidence Development (CED) with specific conditions being met, appropriate volume requirements and a heart team and hospitals participation in a prospective, national, audited registry. For indications not approved by the FDA, CMS covers TAVR under CED when a patient is enrolled in a qualifying clinical study.
Registry and Clinical Study Approvals by CMS can be found on the CMS Coverage with Evidence Development TAVR webpage. https://www.cms.gov/Medicare/Coverage/Coverage-with-Evidence-Development/TAVR.html
TAVR Hospital Volumes
TAVR procedures are on the Medicare Inpatient Only Procedure List and sequence to the MS-DRG Pair 266 and 267 (Endovascular Cardiac Valve Replacement with MCC and without MCC respectively). In CMS Fiscal Year (FY) 2015 through 2017, this MS-DRG pair also included ICD-10-PCS codes for replacement of pulmonary valves. In FY 2018 an additional 4 mitral valve codes and 8 new tricuspid valve codes were also added to this MS-DRG pair.
To provide you with a glimpse into these types of procedures, I utilized Medicare Fee-for-Service paid claims data from our sister company RealTime Medicare Data (RTMD) for CMS FY 2015 through 2018. The following table highlights an increase in volumes and average charges and a decrease in actual average payment and average length of stay (ALOS) for Medicare Fee-for-Service paid claims in Alabama, Georgia and Tennessee.
Proposed Decision Memo: Changes and CMS’ Request for Comments
The Decision Memo proposes to update “the coverage criteria for hospitals and physicians to begin or maintain a TAVR program. The proposed decision provides more flexibility in how providers can meet the requirements performing TAVR, while continuing to ensure good health outcomes for patients receiving the procedure.”
The CMS Press Release notes they are also seeking to gather additional information and specifically proposed “a question regarding the relationship between other metrics and patient health outcomes, which could inform a future change to replace the volume criteria with a different metric.”
Key stakeholders at your hospital should take the time to read the Proposed Decision Memo and provide public comments. There is a 30-day public comment period ending April 25th and a final decision will be issued no later than 60 days after the conclusion of the 30-day public comment period. All public comments may be submitted at https://www.cms.gov/medicare-coverage-database/indexes/nca-open-for-public-comment-index.aspx.
Link to NCD 20.32: https://www.cms.gov/medicare-coverage-database/details/ncd-details.aspx?NCDId=355&ncdver=1&bc=AAAAgAAAAAAAAA%3d%3d&
Beth Cobb
MEDICARE TRANSMITTALS – RECURRING UPDATES
Healthcare Common Procedure Coding System (HCPCS) Codes Subject to and Excluded from Clinical Laboratory Improvement Amendments (CLIA) Edits
The new HCPCS codes for 2019 that are subject to and excluded from Clinical Laboratory Improvement Amendments (CLIA) edits.
April 2019 Integrated Outpatient Code Editor (I/OCE) Specifications Version 20.1
Remittance Advice Remark Code (RARC), Claims Adjustment Reason Code (CARC), Medicare Remit Easy Print (MREP) and PC Print Update
April 2019 Update of the Hospital Outpatient Prospective Payment System (OPPS)
Describes changes to, and billing instructions for, various payment policies implemented in the April 2019 OPPS update.
OTHER MEDICARE TRANSMITTALS
Evaluation and Management (E/M) When Performed with Superficial Radiation Treatment
Allows providers to bill E/M codes 99211, 99212, and 99213 for Levels I through III, when performed with superficial radiation treatment delivery.
MEDICARE SPECIAL EDITION ARTICLES
Medicare Part B Clinical Laboratory Fee Schedule: Revised Information for Laboratories on Collecting and Reporting Data for the Private Payor Rate-Based Payment System
Assist the laboratory community in meeting the requirements under Section 1834A of the Social Security Act (the Act) for the Medicare Part B Clinical Laboratory Fee Schedule (CLFS). Includes clarifications for determining
- whether a hospital outreach laboratory meets the requirements to be an “applicable laboratory,”
- the applicable information (that is, private payor rate data) that must be collected and reported to CMS,
- the entity responsible for reporting applicable information to CMS,
- the data collection and reporting periods, and
- the schedule for implementing the next private payor-rate based CLFS update.
New Medicare Beneficiary Identifier (MBI) Get It, Use It
MEDICARE COVERAGE UPDATES
National Coverage Determination (NCD90.2): Next Generation Sequencing (NGS)
CMS covers diagnostic laboratory tests using next generation sequencing when performed in a Clinical Laboratory Improvement Amendments- certified laboratory when ordered by a treating physician and when specific requirements are met.
MEDICARE PRESS RELEASES
CMS Updates Consumer Resources for Comparing Hospital Quality
CMS updated hospital performance data on the Hospital Compare website and on data.medicare.gov. This data includes specific measures of hospitals’ quality of care, many of which are updated quarterly, and the Overall Hospital Star Ratings, which were last updated in December 2017. The data are collected through CMS’s Hospital Quality Initiative programs.
CMS Updates Drug Dashboards with Prescription Drug Pricing and Spending Data
Updated with 2017 data.
MEDICARE EDUCATIONAL RESOURCES
Medicare Fast Facts
Medicare Fast Facts resources this month include:
- Bill Correctly for Device Replacement Procedures
OTHER MEDICARE UPDATES
KEPRO Winter 2019 Care Review Connections Newsletter
A quarterly e-newsletter from your Beneficiary and Family Centered Care Quality Improvement Organization (BFCC-QIO).
https://www.keproqio.com/providers/winter-2019-acute-newsletter/
Guidelines for Achieving a Compliant Query Practice—2019 update
“Guidelines for Achieving a Compliant Query Practice” was produced through the joint effort of the Association of Clinical Documentation Improvement Specialists (ACDIS) and the American Health Information Management Association (AHIMA). Both associations collaborated on the creation of this practice brief and approved its contents, and as such it represents the recommended industry standard for provider queries.
This practice brief supercedes one published in 2016 and all previous versions.
https://acdis.org/resources/guidelines-achieving-compliant-query-practice%E2%80%942019-update
In keeping with March being National Social Work Month, this article focuses on CMS’s Transfer Policy. Medicare’s Transfer policy applies to transfers from an IPPS hospital to another hospital. It also applies to transfers from an IPPS hospital to specific post-acute care settings for specific MS-DRGs, which is known as the Post-Acute Care Transfer (PACT) Policy. This article focuses on the PACT policy, the addition of two new discharge dispositions to the policy and the potential financial implication for hospitals.
Background
CMS’s PACT Policy was implemented to prevent Medicare from paying for the same care twice. This policy reduces reimbursement to a hospital when:
- A hospitalization codes to an MS-DRG designated as a Transfer MS-DRG,
- The patient’s length of stay (LOS) is at least 1 day less than the geometric mean LOS (GMLOS) for the MS-DRG, and
- The patient is discharged to one of the “qualified discharges” in the following table.
Annually, CMS publishes a list of MS-DRGs subject to the PACT policy in Table 5 of the applicable Fiscal Year IPPS Final Rule. For FY 2019 there are 280 transfer DRGs.
The Bipartisan Budget Act of 2018 required the addition of discharges/transfers to Hospice Home (Discharge Disposition Code 50) and discharges/transfers to Hospice, General Inpatient Care or Inpatient Respite (Discharge Disposition Code 51) be added to the list of qualified discharge dispositions included in the Post-Acute Transfer (PACT) Policy. This change was finalized in the FY 2019 IPPS Final Rule with an effective date of October 1, 2018. CMS actuaries estimated this change in the PACT policy will “generate an annual savings of approximately $240 million in Medicare payments in FY 2019, and up to $540 million annually by FY 2028.”
Transfer MS-DRG Payment
A transferring hospital is generally paid based on a graduated per diem rate for each day of stay, not to exceed the full MS-DRG payment that would have been made if the patient had been discharged without being transferred. A per diem rate is calculated for each transfer DRG based on the following formula:
- MS-DRG Payment ÷ GMLOS = Per Diem Rate
For Transfer MS-DRGs, a hospital is reimbursed twice the per diem amount for the first day of the hospitalization and an additional single per diem rate for subsequent days up to the full MS-DRG payment.
CMS noted in the 2019 IPPS Final Rule, “(t)he rational for per diem payment as part of our transfer policy is that the transferring hospital generally provided only a limited amount of treatment. Therefore, payment of the full prospective payment rate would be unwarranted.” (49 FR 244)… Our longstanding view is the policy addresses the appropriate level of payment once clinical decisions about the most appropriate care in the most appropriate setting have been made.”
Special Payment MS-DRGs
To account for MS-DRGs subject to the PACT Policy that have exceptionally higher shares of costs very early in the hospital stay, CFR 412.4(f) also includes a special payment methodology. For these MS-DRGs hospitals receive 50 percent of the full MS-DRG payment, plus the single per diem payment, for the first day of the stay, as well as a per diem payment for subsequent days (up to the full MS-DRG payment).
PACT Policy Payment Examples
To help understand the policy payment, following are examples of a Transfer MS-DRG and a Special Pay Transfer MS-DRG.
PACT Policy
MS-DRG 470 (Major hip and knee joint replacement or reattachment procedures of the lower extremity with MCC without MCC) has been designated as Transfer MS-DRGs. Below is an example of payment utilizing FY 2018 IPPS Final Rule data.
Special Pay MS-DRGs
MS-DRG 266 (Endovascular cardiac valve replacement with MCC) has been designated as Special Pay MS-DRGs. Below is an example of payment utilizing FY 2018 IPPS Final Rule data.
Case Study
With the addition of Hospice to the PACT Policy and the estimated savings by CMS actuaries, what could this mean for individual hospitals? MMP conducted this case study with the objective of answering this question.
How Case Study Conducted
The first step was to select a group of short term acute care hospitals in Alabama both urban and rural. The second step was to use paid claims data from our sister company RealTime Medicare Data (RTMD) RealHealth Analytics database. Specifically, MMP used a report available in the Inpatient Compliance-RAC-Quality options titled Your Post-Acute Care Transfer Risks.
Specific parameters selected to run the report included:
- Hospital Name,
- Dates of Service: FY 2018 (October 1, 2017 through September 30, 2018), and
- Discharge Status Codes for Hospice Only.
Data Elements utilized from the report to identify potential financial impact included:
- DRG and DRG Description,
- Identified if Transfer DRG was also a Special Pay DRG,
- GMLOS,
- National Average Reimbursement for the DRGs,
- Length of stay for each claim; and
- Hospital specific unadjusted reimbursement.
Case Study Findings:
The following table depicts Transfer MS-DRG Volumes for FY 2018 where the discharge was to hospice, the hospital actual unadjusted reimbursement, the national average reimbursement, what the new national average payment would be when applying PACT policy payment methodology and the payment reduction the hospital could anticipate in FY 2019.
Hospitals in this case study can anticipate a 25-40% reduction in reimbursement due to the addition of discharge to hospice to the PACT Policy. It is important to understand the potential shift in hospital revenue. However, I believe it is more important to ensure your patients receive the right care, at the right time and in the right setting.
Beth Cobb
On November 21, 2018, CMS issued Transmittal 211 regarding revisions made to the Implantable Cardiac Defibrillator (ICD) National Coverage Determination (NCD 20.4) through a February 15, 2018 Final Decision Memo. Transmittal 211 indicated the revisions effective date was February 15, 2018 and the implementation date was to be February 26, 2019.
New Implementation Date: March 26, 2019
Almost two weeks ago on February 15th, CMS rescinded Transmitted 211 and replaced it with Transmittal 213. The only change made in the Transmittal was to change the implementation date from February 26, 2019 to March 26, 2019 (for MAC local edits). All other information remained the same.
Summary of Significant NCD Revisions
The delay in implementation affords providers an opportunity to make last minute adjustments to their systems and/or provide additional education to key stakeholders to ensure compliance with the NCD revisions. Following is a summary review of the significant changes in the NCD revision:
- MRI has been added to the list of imaging studies that can be performed to evaluate left ventricular ejection fraction (LVEF);
- At least three months of Optimal Medical Therapy (OMT) is a new requirement for patients who have severe non-ischemic dilated cardiomyopathy and no personal history of sustained ventricular tachyarrhythmia or cardiac arrest due to ventricular fibrillation;
- A Shared Decision Making (SDM) interaction must happen prior to ICD implantation for certain patients. (Note: This includes all patients receiving an ICD for primary prevention);
- The Class IV heart failure requirement for cardiac resynchronization therapy (CRT) has been removed,
- An exception to the waiting period has been added for patients meeting CMS coverage requirements for cardiac pacemakers, and who meet the criteria for an ICD;
- An exception to the waiting period has also been added for patients with an existing ICD and qualifying replacement; and
- There is no longer a data collection requirement (e.g. a registry).
Additional information about the NCD Revisions and Effective and Implementation dates can be found in related Wednesday@One articles (http://mmplusinc.com/news-articles/item/ncd-20-4-implantable-cardiac-defibrillators-icds and http://mmplusinc.com/news-articles/item/effective-dates-of-new-icd-ncd-rules).
Implantable Automatic Defibrillator – Coding and Billing Local Coverage Article
CMS A/B MACs have been instructed to implement the NCD at the local level. At the time information for this article was compiled, all but two MACs (WPS and CGS) had posted or announced their plan to post an Implantable Automatic Defibrillator – Coding and Billing Local Coverage Article. The following table provides links to the currently available Future Articles.
The Articles provide coding and billing instructions for the implementation of NCD 20.4, including the ICD-10-CM codes that must be billed for the now six covered indications. In addition to meeting one of the covered indications, there are additional criteria that must be met. The first one being, “patients must be clinically stable (e.g., not in shock, from any etiology).” Indications 2, 3 and 4 are for patients with a low LVEF (≤ 30 or ≤ 35%). Per the Coverage Articles, one of the heart failure codes in the following table must be billed.
Note this list of heart failure ICD-10-CM codes does not include I50.9 Heart failure, unspecified. From auditing records, physicians still have a tendency to document congestive heart failure without further clarification and CDI Professionals in turn continue to query to clarify the type of congestive heart failure. Without the clarification, unspecified heart failure would not meet the coding requirement outlined in the coverage article.
The next issue that raised a question for me was the “patients must be clinically stable” requirement. While ICD’s are not an inpatient only procedure and are in general performed as an outpatient, there are instances where an ICD is implanted during an inpatient admission. Can an inpatient undergoing ICD placement due in part to a low LVEF be in acute heart failure and clinically stable at the same time? Or, could the acute systolic heart failure inpatient admission be long enough for the patient to stabilize and be clinically stable at the time of ICD implant? At this time I have questions with no answers and a plan to seek clarification from Palmetto. Stay tuned for an answer……
Beth Cobb
MEDICARE TRANSMITTALS – RECURRING UPDATES
April 2019 Quarterly ASP Medicare Part B Drug Pricing Files and Revisions to Prior Quarterly Pricing Files
International Classification of Diseases, 10th Revision (ICD-10) and Other Coding Revisions to National Coverage Determination (NCDs)
NCD coding changes as the result of newly available codes, coding revisions to NCDs released separately, or coding feedback received.
Healthcare Provider Taxonomy Codes (HPTCs) April 2019 Code Set Update
OTHER MEDICARE TRANSMITTALS
Processing Veterans Administration (VA) Inpatient Claims Exempt from Present on Admission (POA) Reporting
The HAC-POA payment provision required by the Deficit Reduction Act of 2005 (DRA) applies only to Inpatient Prospective Payment System (IPPS) hospitals. Therefore, VA hospitals are exempt from reporting POA and End of POA Indicators.
Updates to Reflect Removal of Functional Reporting Requirements and Therapy Provisions of the Bipartisan Budget Act of 2018
Updates both the Medicare Benefit Policy Manual and Medicare Claims Processing Manual to reflect recent policy revisions including: (a) the repeal of the application of the outpatient therapy caps and the retention of the therapy cap amounts as thresholds of incurred expenses above which claims must include a modifier to confirm services are medically necessary as shown by medical record documentation; and, (b) the discontinuation of the functional reporting requirements.
Ensuring Organ Acquisition Charges Are Not Included in the Inpatient Prospective Payment System (IPPS) Payment Calculation
To prevent potential overpayments, Medicare’s Fiscal Intermediary Shared System (FISS) will deduct organ acquisition charges billed with revenue codes 081X from the total covered charges prior to sending an inpatient Type of Bill (TOB) 11X claim to the IPPS pricer for any date of service processed on or after July 1, 2019.
Revising the Remittance Advice Messaging for the 20-Hour Weekly Minimum for Partial Hospitalization Program Services
Common Working File (CWF) Provider Queries National Provider Identifier (NPI) Verification
The Common Working File (CWF) will require verification of the NPI similar to the HETS when Medicare Part A providers request Medicare beneficiary eligibility and entitlement data via the CWF provider inquiry screens.
Processing Instructions to Update the Standard Paper Remit (SPR)
Instructs MACs to update their systems to ensure that SPRs mailed after July 1, 2019, mask the Health Insurance Claim Number (HICN), so the Social Security Number (SSN) does not show.
Implementation to Exchange the List of Electronic Medical Documentation Requests (eMDR) for Registered Providers via the Electronic Submission of Medical Documentation (esMD) System
Makes the changes required to send Additional Documentation Request (ADR) letters to participating providers via the (esMD) system. A CR to effectuate the exchange of ADR letters to registered providers via the esMD system will be released at a later date.
Update to Mammography Editing
Modifies existing editing to ensure only revenue codes 0401, 0403, 0520, 0521, 096, 097, or 098 are billed on claims containing mammography codes 77065, 77066, or 77067.
https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2019Downloads/R4225CP.pdf
Implementation of the Skilled Nursing Facility (SNF) Patient Driven Payment Model (PDPM)
Effectuates changes to the SNF Prospective Payment System (PPS) that were finalized in the FY 2019 SNF PPS Final Rule (83 FR 39162).
Local Coverage Determinations (LCDs) – REVISED
Multiple revisions of this transmittal that changes the LCD process.
Modification of the MCS Claims Processing System Logic for Modifier 59, XE, XS, XP, and XU Involving the National Correct Coding Initiative (NCCI) Procedure to Procedure (PTP) Column One and Column Two Codes
Medicare will allow modifiers 59, XE, XS, XP, or XU on column one and column two codes to bypass the edit.
Update to the Internet-Only-Manual (IOM) Publication (Pub.) 100-04, Chapter 32, Section 12.1
Removes diagnosis codes from and adds diagnosis codes to the list of valid diagnosis codes for Counseling to Prevent Tobacco Use.
https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2019Downloads/R4237CP.pdf
MEDICARE COVERAGE
Update to Intensive Cardiac Rehabilitation (ICR) Programs
Effective February 9, 2018, coverage in an ICR is expanded to include stable, chronic heart failure defined as patients with left ventricular ejection fraction of 35 percent or less and New York Heart Association (NYHA) Class II to IV symptoms despite being on optimal heart failure therapy for at least 6 weeks.
Supervised Exercise Therapy (SET) for Symptomatic Peripheral Artery Disease (PAD)—Clarification of Payment Rules and Expansion of International Classification of Diseases Tenth Edition (ICD-10) Diagnosis Codes
CMS proposes Coverage with Evidence Development for Chimeric Antigen Receptor (CAR) T-cell Therapy
Decision Memo for Vagus Nerve Stimulation (VNS) for Treatment Resistant Depression (TRD) (CAG-00313R2)
CMS will cover FDA approved vagus nerve stimulation (VNS) devices for treatment resistant depression (TRD) through Coverage with Evidence Development (CED) when offered in a CMS approved, double-blind, randomized, placebo-controlled trial with a follow-up duration of at least one year with the possibility of extending the study to a prospective longitudinal study when the CMS approved, double-blind, randomized placebo-controlled trial has completed enrollment, and there are positive interim findings.
National Coverage Determination (NCD) 20.4 Implantable Cardiac Defibrillators (ICDs) – REVISED
Implementation date changed from February 26, 2019 to March 26, 2019.
https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2019Downloads/R213NCD.pdf
MEDICARE EDUCATIONAL RESOURCES
Medicare Fast Facts
Medicare Fast Facts resources this month include:
- Medicare Hospital Claims: Avoid Coding Errors
- DME Proof of Delivery Documentation Requirements
OTHER MEDICARE UPDATES
New App Displays What Original Medicare Covers
Allows people with Original Medicare, caregivers and others to quickly see whether Medicare covers a specific medical item or service.
https://www.cms.gov/newsroom/press-releases/new-app-displays-what-original-medicare-covers
Emergency Triage, Treat, and Transport (ET3) Model
A voluntary, five-year payment model that will pay participating ambulance suppliers and providers to 1) transport an individual to a hospital emergency department (ED) or other destination covered under the regulations, 2) transport to an alternative destination (such as a primary care doctor’s office or an urgent care clinic), or 3) provide treatment in place with a qualified health care practitioner, either on the scene or connected using telehealth.
https://www.cms.gov/newsroom/fact-sheets/emergency-triage-treat-and-transport-et3-model
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