Knowledge Base Category -
“We rarely talk about cost. We talk about waste, quality, and safety, and we find our costs go down.”
- Patrick Hagan, former COO of Seattle Children’s Hospital
Risk Factor: Socio-economic Status
The Establishing Beneficiary Equity in the Hospital Readmission Reduction Program Act of 2015 (S. 688 and H.R. 1343) would have required the CMS to account for socio-economic status when calculating risk-adjusted readmission penalties. This bill garnered support from the Association of American Medical Colleges as well as the American Hospital Association. You can read more about this Act in a related MMP article.
A year later the House Ways and Means Committee released the Helping Hospitals Improve Patient Care Act of 2016 (H.R. 5273) that included a modified version of H.R. 1343. This latest version of the bill was passed in the House and was sent to the Senate where it was read twice and referred to the Committee on Finance.
Fast Forward to the 2019 IPPS Proposed Rule which includes a discussion about “Accounting for Social Risk Factors” (including socioeconomic status) in the following Programs discussed in the Proposed Rule:
- Hospital Readmission Reduction Program (HRRP),
- Hospital Value Based Purchasing (VBP) Program,
- Hospital Acquired Condition (HAC) Reduction Program,
- Hospital Inpatient Quality Reporting (IQR) Program,
- IPPS-Exempt Cancer Hospital Quality Reporting (PCHQR) Program, and
- Long Term Care Hospital Quality Reporting Program (LTCH QRP).
Accounting for Social Risk Factors
CMS notes their “commitment to ensuring that medically complex patients, as well as those with social risk factors, receive excellent care. We discussed how studies show that social risk factors, such as being near or below the poverty level as determined by HHS, belonging to a racial or ethnic minority group, or living with a disability, can be associated with poor health outcomes and how some of this disparity is related to the quality of health care.”
Specific CMS aims within their core objectives include:
- Improving health outcomes,
- Attaining health equity for all beneficiaries, and
- Ensuring that complex patients as well as those with social risk factors receive excellent care.
The Office of the Assistant Secretary for Planning and Evaluation (ASPE) and the National Academy of Medicine
The ASPE and National Academy of Medicine have examined the influence of social risk factors in the CMS value-based purchasing programs. To date, as required by the IMPACT Act of 2014, ASPE has provided a report to Congress where they found that “in the context of value-based purchasing programs, dual eligibility was the most powerful predictor of poor health care outcomes among those social risk factors they examined and tested.” ASPE is continuing to examine this issue in a second report required by the IMPACT Act that is due to Congress in the fall of 2019.
National Quality Forum (NQF)
CMS noted in the FY 2018 IPPS/LTCH PPS Final Rule, that the NQF “undertook a 2-year trial period in which certain new measures and measures undergoing maintenance review have been assessed to determine if risk adjustment for social risk factors is appropriate for those measures.” This period ended April 2017.
NQF Trial Conclusion:
The NQF notes in the July 2017 Social Risk Trial Final Report Abstract that “the trial period has illuminated the feasibility of adjusting measures for social risk, with 17 measures endorsed by NQF for factors such as a person’s level of education.” The NQF has extended the socioeconomic status (SES) Trial, allowing further examination of social risk factors in outcome measures.
The Centers for Medicare and Medicaid Services
CMS solicited feedback in the FY and CY 2018 Proposed Rules on which social risk factors provide the most valuable information to stakeholders for illuminating differences in outcome rates among patient groups. Commenters encouraged CMS to stratify measures by other social risk factors such as age, income, and educational attainment (82 FR 38404).
CMS Next Steps
As next steps, CMS is considering the following:
- Options to reduce health disparities among patient groups within and across hospitals by increasing the transparency of disparities as shown by quality measures,
- Implementing a hospital-specific disparity method that would promote quality improvement by calculating difference in outcome rates among patient groups within a hospital while accounting for their clinical risk factors,
- Implementing a method to assess hospitals’ outcome rates for subgroups of patients, such as dual eligible patients, across hospitals, allowing for a comparison among hospitals on their performance caring for patients with social risk factors.
Specific to the Hospital IQR Program, CMS acknowledges the complexity of interpreting stratified outcome measures and plans to stratify Pneumonia Readmission measure (NQF #0506) data by highlighting both hospital-specific disparities and readmission rates specific for dual-eligible beneficiaries across hospitals for dual-eligible patients in hospitals’ confidential feedback reports beginning Fall 2018. CMS is considering expanding confidential hospital feedback reports for other measures and eventually making this data publicly available on the Hospital Compare website.
CMS believes “the stratified results will provide hospitals with information that could illuminate disparities in care or outcome, which could subsequently be targeted through quality improvement efforts. We further believe that public display of this information could drive consumer choice and spark additional improvement efforts.” CMS plans to continue to work with the ASPE, the public and key stakeholders to “identify policy solutions that achieve the goals of attaining health equity for all beneficiaries and minimizing unintended consequences.”
Beth Cobb
When we think of copycat products, we often picture the nefarious character flipping open his overcoat to reveal a row of “Rolex” watches available at bargain basement prices - in other words, counterfeit products of a lesser quality and illegally bearing a trademark name. But in the world of biological drugs, legitimate but costly copycat products offer physicians and patients other options for treatment. With appropriate payment policies, the United States biosimilar product marketplace can continue to grow resulting in cost savings and those additional treatment options. In the 2018 Medicare Physician Fee Schedule Final Rule (MPFS), CMS changed the payment policy for biosimilars to separately code and determine payment for each biological biosimilar product under Medicare Part B.
The original policy addressing biosimilars was from the 2016 MPFS rule. At that time CMS decided to base the payment amount for a biosimilar biological product on the average sales price (ASP) of all biosimilars for one reference product and to assign one payment code (HCPCS code) to all biosimilars for the same reference product. “In general, this means that products that rely on a common reference product’s biologics license application (that is, FDA’s previous finding of safety, purity, and potency for the common reference product) are grouped into the same payment calculation for determining a single ASP payment limit and that a single HCPCS code is used for such biosimilar products. The regulation went into effect on January 1, 2016.” Biosimilars sharing the same HCPCS code, but produced by different manufacturers, were distinguished by HCPCS modifiers.
There were varying opinions about Medicare’s payment policy for biosimilars from the beginning – some stakeholders supporting the use of one HCPCS code and others opposing it. In the 2018 MPFS FR, CMS notes, “The biosimilar product marketplace has continued to grow, and four biosimilar biological products that are paid under Part B have been licensed, including one product approved in 2017 that is sharing a HCPCS code with another previously licensed biosimilar biological product. Based on the number of biosimilar biological products that are reported to be nearing approval and the approvals made over the past 2 years, CMS anticipates that several more biosimilar biological products will be licensed for use in the United States during the next year and that during the following years, the marketplace will continue to grow steadily, provided that the approved products are marketed without delay. …CMS is aware of concerns that current Medicare policy may discourage development of new biosimilars and other innovation in this area potentially resulting in higher costs over time due to a lack of competition in the market place.”
As usual for CMS rules, the topic was discussed in great detail in the 2018 MPFS Final Rule (starting on page 53182). Some of the more interesting points of the discussion include,
Facts about Biosimilars:
- Biosimilars are similar, but not identical, to their reference products, and due to these subtle differences, they may have different therapeutic and adverse effects on patients, requiring clinical distinctions between the products.
- None of the currently available biosimilars are approved as interchangeable. The current biosimilar approval process does not compare biosimilar biological products to each other, rather, only similarity to a reference product is established and the licensing of a biological product under the biosimilar pathway does not mean that the products are interchangeable.
- Biosimilar biological products may be approved for fewer indications than the reference product and the approved indications within a group of biosimilar biological products with the same reference product may vary.
- These products are likely to be expensive and may have different acquisition costs. The development costs for these products and their manufacturing facilities are estimated to be in the hundreds of millions of dollars.
Stakeholders’ Comments
- Grouping (biosimilars) for payment could lead to prescribing choices based on cost rather than clinical considerations.
- The current policy may impair access to biosimilars, could potentially limit the introduction of biosimilars to the US market, and would fail to maximize competition and savings.
- Grouping products for payment that do not have all the same indications could cause clinicians and patients to think the products are interchangeable or could lead to off-label use.
- Blended payment could be a significant financial risk to the provider because the products that would be the best choice for a patient may not be paid above acquisition cost.
- ‘‘Race to the bottom’’ pricing competition would result from shared codes and lead to prices that could not sustain educational efforts and other activities associated with marketing new and complex biological products, ultimately resulting in manufacturers leaving the United States marketplace.
- Determining a payment for each biosimilar product by using individual HCPCS codes would drive and reward innovators, producing the potential cost savings of at least 10–15 percent compared to the reference biologic ASP necessary for biosimilar products to compete with the reference biological.
Because of the above facts and concerns, CMS has “become increasingly concerned about the relationship between cost, prices and competition; specifically, many commenters’ continued unease regarding the effects of our payment policy on patient and provider choices, as well as the biosimilar marketplace. We have also considered how the payment policy could affect market entry of new biosimilar manufacturers. If payment amounts limit manufacturers’ willingness to invest in the development of new biosimilars, it could in the long term, decrease the number of biosimilar biological products that are available to prescribe and thus impair price competition. Given that the United States’ biosimilar biological product marketplace is still relatively new, we believe that it is important to maintain a payment policy innovation as well as reasonable pricing for consumers. We agree that it is important to consider and effect policy changes early, as this portion of the drug marketplace develops, in order to support a robust marketplace that provides choices for providers and patients while maximizing savings.”
Effective January 1, 2018, newly approved biosimilar biological products with a common reference product will no longer be grouped into the same HCPCS code. Each biosimilar will be assigned a unique HCPCS code and payment will be based on the ASP for that individual biosimilar. Biosimilar HCPCS codes in use prior to January 1, 2018 are being changed and replaced to be in compliance with the new payment policy. This is described on the Medicare Biosimilar webpage and addressed in the April 2018 OPPS Update MLN Matters Article. Effective April 1, 2018, the descriptor for HCPCS code Q5101 (filgrastim biosimilar) is being changed to “Injection, zarxio.” HCPCS code Q5102 (infliximab biosimilar) is being replaced effective April 1, 2018 with HCPCS codes Q5103 (Injection, inflectra) and Q5104 (Injection, renflexis). The new biosimilar payment policy also makes the use of modifiers that describe the manufacturer of a biosimilar product unnecessary. Therefore, modifiers ZA, ZB, and ZC will be discontinued for dates of service on or after April 1, 2018. However, please note that HCPCS code Q5102 and the requirement to use applicable biosimilar modifiers remain in effect for dates of service prior to April 1, 2018.
Debbie Rubio
MEDICARE TRANSMITTALS
ICD-10 and Other Coding Revisions to National Coverage Determinations (NCDs) – (Revised 3/1/18)
A maintenance update of the ICD-10 conversions and other coding updates specific to National Coverage Determinations (NCDs).
Appropriate Use Criteria for Advanced Diagnostic Imaging – Voluntary Participation and Reporting Period - Claims Processing Requirements – HCPCS Modifier QQ
New HCPCS modifier (QQ) that may be reported with CPT code for an advanced diagnostic imaging service when the ordering physician consults appropriate use criteria.
April 2018 Integrated Outpatient Code Editor (I/OCE) Specifications Version 19.1
The modifications of the I/OCE for the April 2018 V19.1 update.
April 2018 Update of the Hospital Outpatient Prospective Payment System (OPPS)
Changes to the OPPS to be implemented in the April 2018 update.
Quarterly Healthcare Common Procedure Coding System (HCPCS) Drug/Biological Code Changes - April 2018 Update
The HCPCS code set is updated on a quarterly basis. Change Request (CR) 10454 informs MACs of the April 2018 updates of specific biosimilar biological product HCPCS code, modifiers used with these biosimilar biologic products and an autologous cellular immunotherapy treatment.
Clarification of Instructions Regarding the Intensive Level of Rehabilitation Therapy Services Requirements
Instructions for conducting medical review of Inpatient Rehabilitation Facility (IRF) claims when reviewing the requirements for the intensive level of rehabilitation therapy services.
https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2018Downloads/R771PI.pdf
Correction to Pub. 100-04, Chapter 5
Updates the list of Types of Bill subject to application of the therapy caps and related policies to Critical Access Hospital (CAH) claims in accordance with CR 8426.
https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2018Downloads/R3995CP.pdf
Quarterly Update for Clinical Laboratory Fee Schedule and Laboratory Services Subject to Reasonable Charge Payment – (Revised 3/15/18)
Changes in the April 2018 quarterly update to the Clinical Laboratory Fee Schedule (CLFS).
Internet Only Manual Update to Pub 100-04, Chapter 16, Section 40.8 -Date of Service Policy
Manualizes the additional exception to the current laboratory DOS regulations from the CY 2018 OPPS/ASC final rule published December 14, 2017, so that the DOS for Advanced Diagnostic Laboratory Tests and molecular pathology tests excluded from OPPS packaging policy is the date the test was performed if certain conditions are met. This new exception to the laboratory DOS policy is effective beginning on January 1, 2018.
https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2018Downloads/R4000CP.pdf
MEDICARE SPECIAL EDITION ARTICLES
Billing Requirements for OPPS Providers with Multiple Service Locations
Enforcement editing requirements for hospitals operating off-campus, outpatient, provider-based departments of a hospital’s facilities (facility address and appropriate modifiers).
MEDICARE COVERAGE UPDATES
MEDICARE PRESS RELEASES
CMS finalizes coverage of Next Generation Sequencing tests, ensuring enhanced access for cancer patients
CMS finalized a National Coverage Determination that covers diagnostic laboratory tests using Next Generation Sequencing (NGS) for patients with advanced cancer (i.e., recurrent, metastatic, relapsed, refractory, or stages III or IV cancer).
Trump Administration Announces MyHealthEData Initiative to Put Patients at the Center of the US Healthcare System
The MyHealthEData initiative will work to make clear that patients deserve to not only electronically receive a copy of their entire health record, but also be able to share their data with whomever they want, making the patient the center of the healthcare system.
MEDICARE EDUCATIONAL RESOURCES
OTHER MEDICARE UPDATES
Enforcement Instruction on Supervision Requirements for Outpatient Therapeutic Services in Critical Access Hospitals and Small Rural Hospitals
February Patients Over Paperwork Newsletter
Update on CMS’s initiative to evaluate and streamline regulations with a goal to reduce unnecessary burden, to increase efficiencies, and to improve the beneficiary experience.
Website for Providers about New Medicare Cards
New Medicare cards start going out in April and providers must be able to accept them. This website has information and other resources on the new cards.
https://www.cms.gov/Medicare/New-Medicare-Card/Providers/Providers.html
MEDICARE TRANSMITTALS
Quarterly Healthcare Common Procedure Coding System (HCPCS) Drug/Biological Code Changes - April 2018 Update
The April 2018 updates of specific biosimilar biological product HCPCS code, modifiers used with these biosimilar biologic products and an autologous cellular immunotherapy treatment.
E/M Service Documentation Provided By Students (Manual Update)
Allows the teaching physician to verify in the medical record any student documentation of components of E/M services, rather than re-documenting the work.
Quarterly Update to the National Correct Coding Initiative (NCCI) Procedure-to-Procedure (PTP) Edits, Version 24.1, Effective April 1, 2018
Medicare Fee-for-Service Recovery Audit Program Additional Documentation Limits for Medicare Institutional Providers (i.e. Facilities)
New ADR limits for the Recovery Audit Program.
Diagnosis Code Update for Add-on Payments for Blood Clotting Factor Administered to Hemophilia Inpatients
Updates to diagnosis codes required in order to allow add-on payments under the Inpatient Prospective Payment System (IPPS) for blood clotting factor administered to hemophilia inpatients.
Quarterly Update for Clinical Laboratory Fee Schedule and Laboratory Services Subject to Reasonable Charge Payment
Changes in the April 2018 quarterly update to the Clinical Laboratory Fee Schedule (CLFS).
Replacement of Mammography HCPCS Codes, Waiver of Coinsurance and Deductible for Preventive and Other Services, and Addition of Anesthesia and Prolonged Preventive Services – REVISED
Healthcare Common Procedure Coding System (HCPCS) Codes Subject to and Excluded from Clinical Laboratory Improvement Amendments (CLIA) Edits – REVISED
Revised to add HCPCS code G0475 as a code that is subject to CLIA edits effective, April 13, 2015.
Modifications to the Implementation of the Paperwork (PWK) Segment of the Electronic Submission of Medical Documentation (esMD) System
Enables MACs to receive unsolicited documentation (also known as paperwork (PWK)) via the Electronic Submission of Medical Documentation (esMD) system.
Update to the Medicare Physician Fee Schedule Database (MPFSDB) - April 2018 Update
Remittance Advice Remark Code (RARC), Claims Adjustment Reason Code (CARC), Medicare Remit Easy Print (MREP) and PC Print Update
Updates the Remittance Advice Remark Codes (RARC) and Claims Adjustment Reason Code (CARC) lists and instructs Medicare Shared System Maintainers (SSMs) to update Medicare Remit Easy Print (MREP) and PC Print.
ICD-10 and Other Coding Revisions to National Coverage Determinations (NCDs)
A maintenance update of the International Classification of Diseases, Tenth 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.
MEDICARE COVERAGE UPDATES
Supervised Exercise Therapy (SET) for Symptomatic Peripheral Artery Disease (PAD)
Effective May 25, 2017, new NCD to cover Supervised Exercise Therapy (SET) for beneficiaries with Intermittent Claudication (IC) for the treatment of symptomatic Peripheral Artery Disease (PAD).
Decision Memo for Implantable Cardioverter Defibrillators (CAG-00157R4)
Changes to the ICD NCD from the 2005 reconsideration.
OTHER MEDICARE UPDATES
Medicare Fee-for-Service Recovery Audit Program Additional Documentation Limits for Medicare Institutional Providers (i.e. Facilities)
Correction: Hospital Outpatient Prospective Payment (OPPS) and Ambulatory Surgical Center (ASC) Payment Systems and Quality Reporting Programs
https://www.gpo.gov/fdsys/pkg/FR-2018-01-31/pdf/C1-2017-27949.pdf
Targeted Probe and Educate (TPE) Website Update
New resources available on the TPE website.
MEDICARE EDUCATIONAL RESOURCES
Transition to New Medicare Numbers and Cards FACTSHEET
Medicare Transmittals
Clinical Laboratory Fee Schedule – Medicare Travel Allowance Fees for Collection of Specimens
Revises the payment of travel allowances when billed on a per mileage basis using Health Care Common Procedure Coding System (HCPCS) code P9603 and when billed on a flat-rate basis using HCPCS code P9604 for Calendar Year (CY) 2018.
Changes to the Laboratory National Coverage Determination (NCD) Edit Software for April 2018
Changes in the April 2018 quarterly release of the edit module for clinical diagnostic laboratory services.
New Waived Tests
New Clinical Laboratory Improvement Amendments of 1988 (CLIA) waived tests approved by the Food and Drug Administration.
Healthcare Common Procedure Coding System (HCPCS) Codes Subject to and Excluded from Clinical Laboratory Improvement Amendments (CLIA) Edits
The new Healthcare Common Procedure Coding System (HCPCS) codes for 2018 that are subject to and excluded from Clinical Laboratory Improvement Amendments (CLIA) edits.
Notice of New Interest Rate for Medicare Overpayments and Underpayments - 2nd Qtr Notification for FY 2018
Medicare contractors shall implement an interest rate of 10.625 percent effective January 19, 2018 for Medicare overpayments and underpayments.
https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2018Downloads/R297FM.pdf
ICD-10 and Other Coding Revisions to National Coverage Determinations (NCDs)
Replaces Transmittal 1975. A maintenance update of ICD-10 conversions and other coding updates specific to National Coverage Determinations (NCDs).
https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2018Downloads/R2005OTN.pdf
Medicare Special Edition Articles
Proper Use of Modifier 59 – REVISED
Revised on January 3, 2018, to conform with the latest Modifier 59 article on the NCCI website.
Medically Unlikely Edits (MUE) and Bilateral Surgical Procedures
Inform providers that Medically Unlikely Edits (MUEs) may render certain claim lines for bilateral surgical procedures unpayable.
Medicare Coverage Updates
Proposed Decision Memo for Magnetic Resonance Imaging (MRI)
Proposing to modify the national coverage determination to eliminate the collection of additional information under the Coverage with Evidence Development.
Rules and Regulations
Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs; Correction
This document corrects technical errors that appeared in the final rule with comment period published in the Federal Register on December 14, 2017 entitled ‘‘Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs.’’
https://www.gpo.gov/fdsys/pkg/FR-2017-12-27/pdf/2017-27949.pdf
State Survey Memorandums
Texting of Patient Information among Healthcare Providers
Memorandum clarifies 1) Texting patient information among members of the health care team is permissible if accomplished through a secure platform; 2) Texting of patient orders is prohibited regardless of the platform utilized; 3) Computerized Provider Order Entry (CPOE) is the preferred method of order entry by a provider.
Medicare Press Releases
New Payment Model
CMS’s Center for Medicare and Medicaid Innovation (Innovation Center) announced the launch of a new voluntary bundled payment model called Bundled Payments for Care Improvement Advanced (BPCI Advanced).
Medicare Educational Resources
Medicare Quarterly Provider Compliance Newsletter – January 2018
Topics include Advanced Care Planning and proper use of modifier 59 for physicians and non-physician practitioners
Major Joint Replacement (Hip or Knee) MLN Booklet
Due to the high volume of major joint replacement claims, CMS has had multiple auditing entities, including the Recovery Auditors, Comprehensive Error Rate Testing (CERT) Contractors, and Medicare Administrative Contractors (MACs) review claims for these MS-DRGs. Their findings have demonstrated very high paid claim error rates among both hospital and professional claims associated with major joint replacement surgery.
The Office of Inspector General (OIG) Work Plan was originally published once a year around October or November. Healthcare compliance officers across the nation pay special attention to this document as it highlights issues considered at high risk of overpayments and/or fraud for federal healthcare payers. In 2015, the OIG began publishing a second “mid-year update” in April or May. When it came time for this year’s mid-year update, the OIG made major changes to the way they present the Work Plan. Instead of once or twice a year, beginning in June 2017, the Work Plan is updated monthly with new additions posted on the Recently Added Items webpage. Completed items are removed from the Work Plan and there are webpages for recently published reports and a complete listing of Active review topics. The OIG made this change to how the Work Plan is presented to “ensure that it more closely aligns with the work planning process” which “is dynamic and adjustments are made throughout the year to meet priorities and to anticipate and respond to emerging issues with the resources available.”
The OIG added four new Work Plan topics for November 2017. Three of the four apply to Medicaid: Opioid Use, Telemedicine, and Medicaid Managed Care Organizations. The other topic focuses on hospital Medicare services, specifically hospital inpatient billing for severe malnutrition.
Elderly patients are often at risk of being malnourished. Hospitals are allowed to bill for the treatment of malnutrition on the basis of the severity of the condition -- mild, moderate or severe, and whether it affects patient care. Severe malnutrition can significantly affect the resources and time required in treating a hospital inpatient. Medicare recognizes this by classifying it as a major complication or comorbidity (MCC) and makes a higher payment when a diagnosis of severe malnutrition appears on an inpatient claim. Because of this higher payment, the OIG will review hospital inpatient claims “to determine whether providers are complying with Medicare billing requirements when assigning diagnosis codes for the treatment of severe types of malnutrition on inpatient hospital claims.”
Even before making this a new addition to their Work Plan, the OIG has already published reports from two audits of Severe Malnutrition. In these audits they reviewed for I-10 diagnosis codes E41 (Nutritional Marasmus and Severe Malnutrition with Marasmus) and E43 (Unspecified Severe Protein-Calorie Malnutrition). The sample size was small but 89% and 98% of 100 claims reviewed for each audit respectively did not comply with Medicare billing requirements. And adding insult to injury, of the combined approximately $865,000 actual overpayments, the OIG extrapolated to estimated overpayments for both hospitals combined to over $2.6M. For more information on the OIG prior severe malnutrition audits, see our previous article on the MMP website.
The OIG has another Work Plan issue related to malnutrition that focuses specifically on claims billed with a diagnosis of Kwashiorkor, a form of severe protein malnutrition that is typically not found in the United States. So far, findings from OIG audits for Kwashiorkor have shown that almost all (if not all) claims with this diagnosis are incorrectly coded and billed. Sometimes the code for Kwashiorkor results in an overpayment and sometimes it does not affect the final Medicare MS-DRG payment since other MCCs are appropriately coded on the claim. The ICD-10 diagnosis codes for Kwashiorkor are E40 and E42.
The topic of correct billing for severe malnutrition is also a pending Targeted Probe and Educate (TPE) issue for the Novitas Medicare Administrative Contractor (MAC) for Jurisdiction H and Jurisdiction L. The topic is listed specifically as “E41 and E43 – Severe Malnutrition.” With two Medicare review entities already looking at this topic, it would not be surprising if other reviewers, such as other MACs, the Recovery Auditors (RACs) or the Supplemental Medical Review Contractor (SMRC) also selected this review issue.
Hospitals should watch our newsletter for updates from all the review contractors to see if anyone else begins reviews of malnutrition. In the meantime, I recommend hospitals perform self-reviews with internal or contracted resources to ensure proper coding of severe malnutrition on their inpatient claims before a Medicare reviewer comes knocking.
Debbie Rubio
Ambulance Inflation Factor for CY 2018 and Productivity Adjustment
The Calendar Year (CY) 2018 Ambulance Inflation Factor (AIF) for determining the payment limit for ambulance services is 1.1 percent.
Correction to Prevent Payment on Inpatient Information Only Claims for Beneficiaries Enrolled in Medicare Advantage Plans
Sets system edits to zero out payment on inpatient information only claims billed with condition codes 04 and 30 for Investigational Device Exemption (IDE) Studies and Clinical Studies Approved Under Coverage with Evidence Development (CED).
New Common Working File (CWF) Medicare Secondary Payer (MSP) Type for Liability Medicare Set-Aside Arrangements (LMSAs) and No-Fault Medicare Set- Aside Arrangements (NFMSAs) - RESCINDED
Clarifying Signature Requirements
Medicare requires that services provided/ordered/certified be authenticated by the persons responsible for the care of the beneficiary in accordance with Medicare’s policies. Claim denials shall be limited to those instances in which signatures that are required by Medicare policies are flawed or missing.
https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2017Downloads/R751PI.pdf
Clinical Laboratory Improvement Amendments of 1988 (CLIA); Fecal Occult Blood (FOB) Testing
Clarifies CLIA regulations that the waived test categorization applies only to non- automated fecal occult blood tests.
https://www.gpo.gov/fdsys/pkg/FR-2017-10-20/pdf/2017-22813.pdf
Calculating Interim Rates for Graduate Medical Education (GME) Payments to New Teaching Hospitals – REVISED
Re-issued to revise several policy statements and to address how to handle certain impacted claims.
New Common Working File (CWF) Medicare Secondary Payer (MSP) Type for Liability Medicare Set-Aside Arrangements (LMSAs) and No-Fault Medicare Set-Aside Arrangements (NFMSAs) – REPLACED
Removes provider education requirements from original transmittal.
https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2017Downloads/R1954OTN.pdf
Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs Final Rule
Revises the Medicare hospital outpatient prospective payment system (OPPS) and the Medicare ambulatory surgical center (ASC) payment system for CY 2018.
https://www.gpo.gov/fdsys/pkg/FR-2017-11-13/pdf/2017-23932.pdf
Revisions to Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2018
Addresses changes to the Medicare physician fee schedule (PFS) and other Medicare Part B payment policies to update payment systems to reflect changes in medical practice and the relative value of services, as well as changes in the statute. In addition, this final rule includes policies necessary to begin offering the expanded Medicare Diabetes Prevention Program model.
https://www.gpo.gov/fdsys/pkg/FR-2017-11-15/pdf/2017-23953.pdf
Implementation of the Award for the Jurisdiction Part A and Part B Medicare Administrative Contractor (JJ A/B MAC)
Announces CMS has awarded the JJ A/B MAC contract for the administration of the Part A and Part B Medicare fee-for-service claims in the states of Alabama (AL), Georgia (GA) and Tennessee (TN) to Palmetto GBA LLC.
https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2017Downloads/R1960OTN.pdf
Update to Pub 100-04, Chapter -18 Preventive and Screening Services -Screening for Lung Cancer with Low Dose Computed Tomography (LDCT)
Adds ICD-10 diagnosis codes: F17.210 (Nicotine dependence, cigarettes, uncomplicated), F17.211 (Nicotine dependence, cigarettes, in remission), F17.213 (Nicotine dependence, cigarettes, with withdrawal), F17.218 (Nicotine dependence, cigarettes, with other nicotine-induced disorders), or F17.219 (Nicotine dependence, cigarettes, with unspecified nicotine-induced disorders), for LDCT coverage.
https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2017Downloads/R3901CP.pdf
Billing Requirements for Ophthalmic Bevacizumab
Clarifies HCPCS code for billing ophthalmic bevacizumab.
Notification of the 2018 Dollar Amount in Controversy Required to Sustain Appeal Rights for an Administrative Law Judge (ALJ) Hearing or Federal District Court Review
ALJ hearing requests amount for 2018 will remain at $160. Federal District Court appeals amount will increase to $1,600 for 2018.
Accepting Payment from Patients with a Medicare Set-Aside Arrangement
Explains what a MSA is and explains why it is appropriate to accept payment from a patient that has a funded MSA.
CMS Hospital Value-Based Purchasing Program Results for Fiscal Year 2018
Fact Sheet describing VBP program and updates. Estimates the total amount available for value-based incentive payments for FY 2018 discharges will be approximately $1.9 billion.
Additional Appeals Settlement Option
CMS will make available an additional settlement option for providers and suppliers (appellants) with appeals pending at the Office of Medicare Hearings and Appeals (OMHA) and the Medicare Appeals Council (the Council) at the Departmental Appeals Board.
ICD-10 and Other Coding Revisions to National Coverage Determinations (NCDs)
NCD coding changes the result of newly available codes, coding revisions to NCDs released separately, or coding feedback received.
CMS Posts RAC Review Topics
CMS has begun to post a list of review topics that have been proposed, but not yet approved, for RACs to review. These topics will be listed, on a monthly basis, on the Provider Resources page.
Partial Settlement of 2-Midnight Policy Court Cases
Provides instructions to Medicare Administrative Contractors (MACs) on how to ensure hospitals receive additional payments due to a partial settlement agreement regarding the 0.2 percent downward adjustment beginning in Fiscal Year ("FY") 2014.
https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2017Downloads/R1969OTN.pdf
New Waived Tests
New Clinical Laboratory Improvement Amendments of 1988 (CLIA) waived tests approved by the Food and Drug Administration (FDA).
Annual Update of HCPCS Codes Used for Home Health Consolidated Billing Enforcement
Provides the 2018 annual update to the list of Healthcare Common Procedure Coding System (HCPCS) codes used by Medicare systems to enforce consolidated billing of home health services.
Remittance Advice Remark Code (RARC), Claims Adjustment Reason Code (CARC), Medicare Remit Easy Print (MREP), and PC Print Update
Updates the Remittance Advice Remark Codes (RARC) and Claims Adjustment Reason Code (CARC) lists and instructs Medicare Shared System Maintainers (SSMs) to update Medicare Remit Easy Print (MREP) and PC Print.
Claim Status Category Codes and Claim Status Codes Update
MAC and shared systems changes will be made as necessary as part of a routine release to reflect applicable changes such as retirement of previously used codes or newly created codes.
Therapy Cap Values for Calendar Year (CY) 2018
For physical therapy and speech-language pathology combined, the CY 2018 cap is $2,010. For occupational therapy, the CY 2018 cap is $2,010.
New Positron Emission Tomography (PET) Radiopharmaceutical/Tracer Unclassified Codes
CMS has created two new PET radiopharmaceutical unclassified tracer codes that can be used temporarily pending the creation/approval/implementation of permanent CPT codes that would later specifically define their function: A9597 - Positron emission tomography radiopharmaceutical, diagnostic, for tumor identification, not otherwise classified; A9598 – Positron emission tomography radiopharmaceutical, diagnostic, for non-tumor identification, not otherwise classified.
2018 Medicare Parts A & B Premiums and Deductibles
On November 17, 2017, the Centers for Medicare & Medicaid Services (CMS) released the 2018 premiums, deductibles, and coinsurance amounts for the Medicare Part A and Part B programs. The standard monthly premium for Medicare Part B enrollees will be $134 for 2018, the same amount as in 2017. The annual deductible for all Medicare Part B beneficiaries will be $183 in 2018, the same annual deductible in 2017. The Medicare Part A annual inpatient hospital deductible that beneficiaries pay when admitted to the hospital will be $1,340 per benefit period in 2018, an increase of $24 from $1,316 in 2017.
https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2017-Fact-Sheet-items/2017-11-17.html
Quarterly Update of HCPCS Codes Used for Home Health Consolidated Billing Enforcement
Provides the quarterly update of HCPCS codes used for HH consolidated billing effective April 1, 2018.
Calculating Interim Rates for Graduate Medical Education (GME) Payments to New Teaching Hospitals
Provides instructions to the MACS on calculating interim rates for Graduate Medical Education (GME) payments to new teaching hospitals.
Quarterly Healthcare Common Procedure Coding System (HCPCS) Drug/Biological Code Changes - October 2017 Update
Recurring quarterly update to HCPCS code set – created new modifier ZC for use with biosimilars manufactured by Merck/Samsung Bioepis, such as Infliximab.
Updates to Medicare’s Cost Report Worksheet S-10 to Capture Uncompensated Care Data
Provides additional guidance to 1886(d) hospitals to ensure appropriate reporting of uncompensated care costs and to achieve proper Medicare reimbursement. Summarizes revisions and clarifications to the instructions for the Worksheet S-10 of the Medicare cost report.
Quarterly Update to the National Correct Coding Initiative (NCCI) Procedure to Procedure (PTP) Edits, Version 24.0, Effective January 1, 2018
Recurring quarterly updates of CCI edits.
Accepting Payment from Patients with a Workers' Compensation Medicare Set-Aside Arrangement (WCMSA), a Liability Insurance Medicare Set-Aside Arrangement (LMSA), or a No-Fault Insurance Medicare Set-Aside Arrangement (NFMSA) - RESCINDED
Rescinded October 3, 2017
Implementing the Remittance Advice Messaging for the 20 Hour Weekly Minimum for Partial Hospitalization Program Services – REISSUE
Re-issued on October 3, 2017, to confirm that its content remains valid even though Special Edition Article SE1607 was rescinded. Message on remittance reminding providers that PHP patients require a minimum of 20 hours of PHP services per week, in accordance with the plan of care.
Medicare Appeals; Adjustment to the Amount in Controversy (AIC) Threshold Amounts for Calendar Year 2018
Federal Register Notice – The calendar year 2018 AIC threshold amounts are $160 for ALJ hearings and $1,600 for judicial review.
https://www.gpo.gov/fdsys/pkg/FR-2017-09-29/pdf/2017-20883.pdf
January 2018 Quarterly Average Sales Price (ASP) Medicare Part B Drug Pricing Files and Revisions to Prior Quarterly Pricing Files
Quarterly update to drug pricing. OPPS hospitals are paid ASP + 6% for separately paid drugs (both pass-through and non-pass-through drugs).
Transition to New Medicare Numbers and Cards
Factsheet telling the why, when, and how to be ready for the new cards.
Clarification Regarding the Use of Control Materials as Calibrators to Determine Test Cut-off Values (Laboratories)
Memorandum to State Survey Agency Directors clarifying information concerning laboratory controls and calibration materials.
Changes to the Laboratory National Coverage Determination (NCD) Edit Software for January 2018
Quarterly updates to the national coverage policies for certain laboratory tests. There is a link within the article to a spreadsheet of all the changes – deletions and additions.
Clinical Laboratory Fee Schedule Not Otherwise Classified, Not Otherwise Specified or Unlisted Service or Procedure Code Data Collection
Instructs providers to include the laboratory test name or short description in Field 19 when billing an unlisted laboratory test code on a 1500 claim form. Also, laboratory “reporting entities” must report private payor payment rates and volumes for unique tests reported with an unlisted code.
2018 Medicare Electronic Health Record (EHR) Incentive Program Payment Adjustment Fact Sheet for Hospitals
Fact sheet on the EHR payment adjustments for eligible hospitals.
https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2017-Fact-Sheet-items/2017-10-10.html
Notice of New Interest Rate for Medicare Overpayments and Underpayments -1st Qtr. Notification for FY 2018
The certified interest rate effective October 18, 2017 for Medicare over- and under-payment is 9.750%.
https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2017Downloads/R295FM.pdf
Defending Medical Review Decisions at Administrative Law Judge (ALJ) Hearings
Updates Medicare Program Integrity Manual due to recent changes in the Office of Medicare Hearings and Appeals process, such as restrictions on the number of contractors able to participate during oral testimony and the adoption of the witness role for those cases in which additional support may be sought.
https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2017Downloads/R748PI.pdf
Medicare Quarterly Provider Compliance Newsletter – October 2017
Provide education on how to avoid common billing errors and other erroneous activities when dealing with the Medicare Fee-For-Service (FFS) Program. This quarter’s newsletter addresses Arthroscopic Rotator Cuff Repair (Physicians), CERT errors for Outpatient Hospital Services, and a DME item.
Prohibition on Billing Dually Eligible Individuals Enrolled in the Qualified Medicare Beneficiary (QMB) Program – REVISED
Revised October 18, 2017 to indicate the Provider Remittance Advice and Medicare Summary Notice identifies the QMB status of beneficiaries and exemption from cost-sharing for Part A and B claims processed on or after October 2, 2017. It also recommends how providers can use these and other upcoming system changes to promote compliance with QMB billing requirements.
Fiscal Year (FY) 2018 Inpatient Prospective Payment System (IPPS) and Long Term Care Hospital (LTCH) PPS Changes - REVISED
Updates to some financial information, tables, files, and lists.
American Hospital Association (AHA) Letter to Office of Inspector General (OIG)
The AHA request to OIG to implement actions to address fundamental flaws and inaccuracies in the OIG hospital compliance reviews.
http://www.aha.org/advocacy-issues/letter/2017/171002-let-hatton-cms-hospital-compliance-reviews.pdf
Hurricane Nate and Medicare Disaster Related Alabama, Florida, Louisiana and Mississippi Claims
Describes CMS authorized waivers for providers affected by Hurricane Nate.
Fall is without a doubt my favorite time of year. The one downside is that the days get shorter leaving fewer hours of daylight. Fewer hours of daylight leads to prioritizing what I want to get accomplished on my off days. While deciding where to start is an easy choice when it comes to chores around the outside of my house versus driving through a state park to catch a glimpse of the fall foliage, deciding how to prioritize “at risk” issues for a hospital can be a challenge. One good starting point is knowing what issues the Comprehensive Error Rate Testing (CERT) Program has found to be “at risk.”
CERT Program Background
The objective of the CERT program is to calculate the Medicare Fee-for-Service (FFS) program improper payment rate. “The CERT program considers any payment that should not have been made or that was paid at an incorrect amount (including both overpayments and underpayments) to be an improper payment. It is important to note that the improper payment rate does not measure fraud. It estimates the payments that did not meet Medicare coverage, coding, and billing rules.”
The CERT Review contractor performs audits to see how well Medicare Administrative Contractors (MACs) are adjudicating claims. A claim review entails checking for compliance with Medicare statutes and regulations, billing instructions, National Coverage Determinations (NCDs), Local Coverage Determinations (LCDs), and provisions in the CMS instructional manuals. A stratified random sample is chosen by claims types for review and using statistical weighting, the findings from the sample are projected to the total universe of Medicare FFS claims submitted during the report period.
Reconciliation of Improper Payments
The CERT program notifies the MACs of improper payments identified through the CERT process. The MACs then repay underpayments and recoup overpayments. MACs can recover the overpayments identified in the CERT sample but cannot recoup projections made to the claims universe.
Medicare Fee-For-Service 2016 Improper Payments Report
Annually, an Improper Payments Report is released as well an Appendices of tables breaking down the findings. The Medicare FFS 2016 Improper Payments report was posted on the CMS CERT Reports webpage in July of this year. This report includes claims submitted during the 12-month period from July 1, 2014 through June 30, 2015 and highlights the services and supplies that were the largest drivers of the 2016 improper payment rate.
2016 Report by the Numbers:
- 89% - The estimated Medicare FFS Payment Accuracy Rate.
- $332.6 billion – the estimated amount paid correctly by Medicare for services and supplies provided to Medicare beneficiaries.
- 11% - The estimated Medicare FFS Improper Payment Rate
- $41.1 billion – the estimated amount paid incorrectly by Medicare.
- $22 million or 86% - the amount of actual overpayment dollars identified during the 2016 report period that the MACs had collected as of the time the 2016 report was published.
The report indicates that “the major contributor to the Medicare FFS improper payment rate decrease from 12.1 percent in 2015 to 11.0 percent in 2016, were implementation of CMS’ “Two Midnight” rule and corresponding educational efforts.” Also, as in prior years, “the most common cause of improper payments (accounting for 64.1 percent of total improper payments) was lack of documentation to support the services or supplies billed to Medicare. In other words, the CERT contractor reviewers could not conclude that the billed services were actually provided, were provided at the level billed, and/or were medically necessary.”
2016 Part A Driver of the Improper Payment Rate
The majority of hospital IPPS improper payments were due to the record not supporting a reasonable expectation that the admitting practitioner expected the patient to require a hospital stay that crossed two midnights. During the 2016 report period the CERT denied 733 claims for this reason totaling $7.4 million in actual overpayments. The projected overpayment to the universe of Medicare claims was $2.1 billion.
CMS goes on to note that errors are more likely to occur when the length of stay is shorter and where there is an elective surgical procedure. In fact, 18.6% of improper payments made to Part A IPPS Hospitals was for claims with a length of stay 0 or 1 days.
CMS Key Effort to Prevent and Reduce Improper Payments
One way that CMS and its contractors are working to reduce improper payments is by developing “medical review strategies using the improper payment data to ensure the areas of highest risk and exposure are targeted. MACs use improper payment data analysis to determine which claims to review on either a pre-payment or post-payment basis. Improper payment data analysis also guides the MAC’s corrective actions and educational efforts.
What Hospital Can do to Reduce Improper Payments
Examples of efforts hospitals can undertake to prevent and reduce improper payments include:
- Visit the CERT Provider Website that provides information about the CERT, how to submit records, sample request letters and much more.
- Become familiar with NCDs, LCDs and coverage articles that provide guidance on what is needed to support the medical necessity of the services you provide. The CERT Provider Website contains a link to a CMS CERT Presentation. Below is an example from the presentation reinforcing the need to be familiar with coverage determinations:
Medical Necessity Example
- “The CERT program received medical records from two different physicians documenting that a patient who underwent implantation of an AICD had severe dementia. The National Coverage Determination (NCD 20.4) specifies that the patient must not have irreversible brain damage from preexisting cerebral disease.
- The CERT contractor reviewers made an informed decision that the services billed were not medically necessary based upon Medicare coverage and payment policies.”
- Visit the CERT A/B MAC Outreach & Education Task Force page on the CMS website which includes Education Resources, Web-based Training, Presentations and information about any upcoming events.
- Become familiar with and utilize your hospitals Program for Evaluating Payment Patterns Electronic Report (PEPPER).
- And last but not least be familiar with the improper payment issues identified in the Annual CERT Reports.
Beth Cobb
It was Miss Peacock in the Dining Room with the Candlestick is just one of the many possibilities in solving the murder mystery in the game of Clue. Learning to put the pieces together to solve the mystery as a child has served me well when it comes to the world of Clinical Documentation Improvement where each chart is a new mystery and I am the detective. When reviewing a chart you may find clinical indicators without a diagnosis that provides you with the needed “clues” to query the physician. You may also find a diagnosis lacking the supporting “clues” (clinical indicators) that again require querying the physician. And, if all goes well, at the end of the hospitalization the mystery is solved and there is clear documentation supporting a principal diagnosis, secondary diagnoses, the resources utilized and the medical necessity of the admission.
More and more emphasis is being put towards outpatient Clinical Documentation. For many this is an entirely new and different mystery to be solved. One key to solving this mystery is having a basic understanding of Hierarchical Condition Categories (HCCs). This article is meant to be a starting point to unraveling the mystery of HCCs.
Background
- Medicare Advantage (Part C) plans are paid a monthly capitation rate to provide health care services to enrolled beneficiaries.
- Historically, payments to Medicare Advantage (Part C) plans were linked to Fee-for-Service expenditures. “Research showed that the managed care program was increasing total Medicare Program expenditures, because its enrollees were healthier than FFS enrollees.”¹
- The Benefits Improvement Protection Act (BIPA 2000) required the implementation of a risk adjustment model using not only diagnoses from inpatient hospital stays, but also from ambulatory setting beginning in 2004.
- The CMS-HCC model was implemented in 2004 as a risk-adjustment model. Per CMS this allows them “to pay plans for the risk of the beneficiaries they enroll, instead of an average amount for Medicare beneficiaries. By risk adjusting plan payments, CMS is able to make appropriate and accurate payments for enrollees with differences in expected costs. Risk adjustment is used to adjust bidding and payment based on the health status and demographic characteristics of an enrollee. Risk scores measure individual beneficiaries’ relative risk and risk scores are used to adjust payments for each beneficiary’s expected expenditures. By risk adjusting plan bids, CMS is able to use standardized bids as base payments to plans.”²
- CMS-HCC data is calculated once a year based on information reported on claims.
- To continue to be factored into an enrollees risk adjustment, all chronic conditions, including past surgeries, must be documented annually during a face-to-face encounter.
CMS-HCC Model Basics
- An HCC is a category of disease type (e.g., congestive heart failure) with multiple individual ICD-10 diagnoses that map to that HCC category.
- Similar to severity weighted MS-DRGs in the acute hospital inpatient setting, each HCC is assigned a Risk-Adjustment Factor (RAF) This score is a total of all relative factors related to one patient for a total year. Specifically, demographic (age and whether the patient is community-based or living in a skilled nursing facility (SNF) and disease complexity factors. There is an Interaction Factor for certain conditions indicating the presence of several conditions at the same time.
- Diagnoses from inpatient, outpatient and professional practice encounters are used to calculate the RAF score.
- There are currently 79 HCC Categories (e.g., Infection, Diabetes with Acute Complications, Diabetes with Chronic Complications, Cerebrovascular Disease).
CMS-HCC Model: Guiding Principles
The CMS-HCC model uses demographic information (age, sex, Medicaid dual eligibility, disability status) and a profile of major medical conditions in the base year to predict Medicare expenditures in the next year. The following 10 principles guided the creation of the CMS-HCC diagnostic classification system:
- Principle 1: Diagnostic categories should be clinically meaningful,
- Principle 2: Diagnostic categories should predict medical expenditures.
- Principle 3: Diagnostic categories that will affect payments should have adequate sample sizes to permit accurate and stable estimates of expenditures.
- Principle 4: In creating an individual’s clinical profile, hierarchies should be used to characterize the person’s illness level within each disease process, while the effects of unrelated disease processes accumulate.
- Principle 5: The diagnostic classification should encourage specific coding. “Vague diagnostic codes should be grouped with less severe and lower-paying diagnostic categories to provide incentives for more specific diagnostic coding.”²
- Principle 6: The diagnostic classification should not reward coding proliferation. “Neither the number of times that a particular code appears, nor the presence of additional, closely related codes that indicate the same condition should increase predicted costs.”²
- Principle 7: Providers should not be penalized for recording additional diagnoses.
- Principle 8: The classification system should be internally consistent.
- Principle 9: The diagnostic classification should assign all ICD-10-CM codes as each code potentially contains relevant clinical information.
- Principle 10: Discretionary diagnostic categories should be excluded from payment models.
CMS-HCC Model: Disease Hierarchy
Similar to the surgical hierarchy in the inpatient setting. The CMS-HCC model follows a disease hierarchy. The hierarchy addresses “situations when multiple levels of severity for a disease, with varying levels of associated costs, have been reported for a beneficiary. The hierarchies prioritize the inclusion in a risk score of multiple HCCs where diagnoses are clinically related and ranked by costs. In the case of a disease hierarchy, Part C payment is based only on the most severe and costly manifestation of the disease. Hierarchies are published in the Rate Announcement for the years when CMS recalibrated the CMS-HCC model.”²
CMS-HCC Model: Risk Adjustment Data Submission Requirements
The following bullets can be found in Chapter 7 of the Medicare Managed Care Manual and detail some of what plan sponsors must do when submitting data.
- “Ensure the accuracy and integrity of risk adjustment data submitted to CMS. All diagnosis codes submitted must be documented in the medical record and must be documented as a result of a face-to-face visit. The diagnosis must be coded according to International Classification of Diseases, (ICD) Clinical Modification Guidelines for Coding and Reporting.
- Implement procedures to ensure that diagnoses are from acceptable data sources. The only acceptable data sources are hospital inpatient facilities, hospital outpatient facilities, and physicians. Plan sponsors are responsible for determining provider type based on the source of the data.
- Submit the required data elements from acceptable data sources according to the coding guidelines.
- Submit all required diagnosis codes for each beneficiary and submit unique diagnoses at least once during the risk adjustment data-reporting period. Submitters must filter diagnosis data to eliminate the submission of duplicate diagnosis clusters.
- For Part B-only beneficiaries enrolled in a plan, the plan sponsor must submit diagnosis codes under the same rules as for a beneficiary with both Parts A and B. The plan should also submit diagnosis codes for Part A services provided under a non-Medicare contract.
If upon conducting an internal review of submitted diagnosis codes, the plan sponsor determines that any diagnosis codes that have been submitted do not meet risk adjustment submission requirements, the plan sponsor is responsible for deleting the submitted diagnosis codes as soon as possible.”²
HCCs beyond Medicare
The CMS-HCC Model is just one example of HCCs being used. Examples of different ways HCCs are being used includes the following:
- The CMS-RxHCC Model is used separately to address Medicare Part D (Medicare prescription drug coverage),
- The Department of Health and Human Services maintains the HHS-HCC Model to address commercial payer populations;
- Accountable Care Organizations (ACOs) participating with the Medicare Shared Savings Program (MSSP); and
- The Medicare Hospital-Value-Based Purchasing Program measure Medicare Spending per Beneficiary.
Risk-Adjustment Payment Models are an integral part of CMS’s move away from paying for volume and towards payment for quality. To accurately reflect risk, there should be no mystery as to what the physician meant in the documentation. Documentation needs to reflect all medical conditions being managed, evaluated, assessed and treated and be detailed enough so the conditions can be coded to the highest specificity.
Resources:
- Pope G, Kautter J, Ellis R, Ash A, Ayanian J, Iezzoni L, Igber M, et al. Risk adjustment of Medicare capitation payments using the CMS-HCC model. Health Care Financing 2004; 25:119-141. Accessed August 31, 2017 at: https://www.cms.gov/Research-Statistics-Data-and-Systems/Research/HealthCareFinancingReview/downloads/04Summerpg119.pdf
- Medicare Managed Care Manual, Chapter 7 – Risk Adjustment Accessed August 31, 2017 at: https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/mc86c07.pdf
Beth Cobb
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