Knowledge Base Category -

Payment Integrity: Medicare FFS Hospital Outpatient

The FY 2022 HHS Agency Financial Report (https://www.hhs.gov/sites/default/files/fy-2022-hhs-agency-financial-report.pdf) was published in late 2022.  Section 3 of this document includes the Payment Integrity Report where HHS indicates “the actual overpayments identified by the Comprehensive Error Rate Testing program during the FY 2022 report period were $24,004,089.28. The MACs recovered the identified overpayments via standard payment recovery methods. As of the report publication date, MACs reported collecting $15,552,853.67 or 64.79 percent of the actual overpayment dollars.”

 

The improper payment estimate for hospital outpatient claims increased from 4.57 percent in RY 2021 to 5.43 percent in RY 2022. However, this increase was not statistically significant. The primary reason cited for hospital outpatient errors was “missing documentation to support the order, or the intent to order for certain services.   

 

Mitigation Strategies and Corrective Actions

HHS addresses improper payments through mitigation strategies and corrective actions believing that “targeted actions will prevent and reduce improper payments in these areas.” Strategies and corrective actions in the hospital outpatient setting cited in this report includes:  

 

Internal Policy Change: In 2020, HHS implemented the Prior Authorization for Certain Hospital Outpatient Department (OPD) Services process. This initiative was once again expanded in the CY 2023 OPPS Final Rule to include Facet Joint interventions effective July 1, 2023.

 

Internal Process: Medical Review Strategies

Medical review strategies are developed “using improper payment data to target the areas of highest risk and exposure. HHS requires its Medicare review contractors to identify and prevent improper payments due to documentation errors in certain error-prone claim types,” including hospital outpatient claims.

 

Audits: Targeted Probe & Educate (TPE)

Medicare Administrative Contractors (MACs) perform the TPE process. In 2022, MACs continued to offer extensions as needed due to the continued impacts of COVID-19. Approximately 3,280 hospital outpatient providers were reviewed by the MACs in 2022.

 

Audits: Supplemental Medical Review Contractor (SMRC)

The SMRC conducts reviews on a post-payment basis at the direction of CMS. When the SMRC completes a review, the results are shared with the MACs for claim adjustments. Providers receive detailed review result letters and MAC demand letters for overpayment recovery. Letters include educational information regarding what was incorrect in the original billing of the claim. In 2022, the SMRC performed post-payment medical reviews for 26,777 hospital outpatient claims.

 

Audits: Recovery Audit Contractor (RAC) Reviews

In 2022, the largest share of Medicare FFS RAC collections (37.4 percent) were from hospital outpatient overpayments.

 

Moving Forward

• Prepare for the July 1, 2023 addition of Facet Joint interventions to the Prior Authorization for Certain OPD Services process.
• Identify active TPE, SMRC and RAC review targets to assess your compliance with related documentation, coding, and billing requirements.
• Respond to additional documentation requests in a timely manner.

Fiscal Year 2022 Supplemental Improper Payment Data

On December 8, 2022, the Comprehensive Error Rate Testing (CERT) published the 2022 Medicare Fee-for-Service Supplemental Improper Payment Data (https://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/CERT/CERT-Reports).

This report supplements the FY 2022 HHS Agency Final Report for Fiscal Year 2022, highlights common causes of improper payments, and includes tables allowing you to drill down into the review findings.

 

Estimated Improper Payment Rates

Calculation for the FY 2022 Medicare FFS improper payment rate included claims submitted during the 12-month period from July 1, 2020 through June 30, 2021. As compared to FY 2020 and 2021, the improper payment rate is trending up:

 

Improper Payment Rate

• FY 2020: 6.27%
• FY 2021: 6.26%
• FY 2022: 7.46%

  Improper Payment Amount

• FY 2020: $25.74 billion
• FY 2021: $25.03 billion
• FY 2022: $31.46 billion.

   

  “It is important to note that the improper payment rate is not a “fraud rate,” but is a measurement of payments that did not meet Medicare requirements. Improper payments are attributed to one of five major error categories (no documentation, insufficient documentation, medical necessity, incorrect coding, or other).

  Similar to prior years, in FY 2022 “insufficient documentation” was the main cause of improper payments. The CERT defines “insufficient documentation” as when the medical record documentation submitted is inadequate to support payment for the services billed. In other words, the CERT contractor reviewers could not conclude that the billed services were actually provided, were provided at the level billed, and/or were medically necessary. Claims are also placed into this category when a specific documentation element that is required as a condition of payment is missing, such as a physician signature on an order, or a form that is required to be completed in its entirety.

  While the CERT data reports on improper payments in several settings (i.e., skilled nursing facilities, hospital outpatient, hospice), this article focuses on Part A (Hospital IPPS) findings.

   

   

  “0 or 1 day” Length of Stay Claims

  A compare of improper payments rates for Part A hospital claims by length of stay (LOS) has been a part of this report since the October 1, 2013 implementation of the Two-Midnight Rule:

   

• 2014: “0 or 1 Day” stay claims highest improper payment rate to date at 37.18%,
• 2021: “0 or 1 Day” stay claims lowest improper payment rate to date at 16.8%.
• 2022: The “0 or 1 Day” claims rate increased to 20.1% with projected improper payments of $1.5 billion.

 

In addition, to the CERT’s focus on claims by length of stay, short stays (“0 of 1 Day” Stays) are also actively being reviewed by the OIG as part of their Work Plan (https://oig.hhs.gov/reports-and-publications/workplan/summary/wp-summary-0000538.asp) and Livanta, the National Medicare Claim Review Contractor (https://livantaqio.com/en/ClaimReview/index.html), who is actively requesting short stay claims across the nation on a monthly bases.  

 

Top 20 Service Types with Highest Improper Payments: Part A Hospital IPPS

Table D4 of this report includes the top 20 DRG types with the highest improper payment rate. The table also details the percentage of error by each of the CERT’s major error categories.

 

Overall, 44.4% of the errors in the top 20 service types were due to error category medical necessity. A claim is placed in this category when the CERT contractor reviewer receives adequate documentation from the medical records submitted to make an informed decision that the services billed were not medically necessary based upon Medicare coverage and payment policies. One hundred percent of the errors for the following two DRG Types was attributed to medical necessity:

 

• DRG Group 252, 253, and 254: Other Vascular Procedures, and
• DRG Pair 551 and 552: Medical Back Problems.

   

  Top Root Causes of Improper Payments

  The 2022 report includes tables highlighting the top root cause of improper payments for the top three service types with the highest projected improper payments in the Part A (Hospital IPPS) setting.

   

   

  Moving Forward

  Moving forward, here are ideas and resources to help in your efforts to prevent claims errors:

• Visit the CERT Provider Website (https://c3hub.certrc.cms.gov/) to find information about the CERT, how to submit records, sample request letters and much more,
• Become familiar with National and Local Coverage Determinations and Local Coverage Articles that detail indications and limitations of specific services. For example, CMS has published an MLN Booklet titled Major Joint Replacement (Hip or Knee) (https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/Downloads/jointreplacement-ICN909065.pdf) to provide guidance on what to document to avoid denied claims, and
• Take the time to review the CERT’s Supplemental Improper Payment Data report annually.

1. Major Hip and Knee Joint Replacement or Reattachment of Lower Extremity (DRGs 469, 470) Top Root Cause: “Inpatient admission not medically necessary and the invasive procedure should have been billed as an outpatient procedure.”
2. Endovascular Cardiac Valve Replacement and Supplement Procedures (DRGs 266, 267) Top Root Cause: “Documentation to support medical necessity for the procedure – missing.”
3. Percutaneous Intracardiac Procedures (DRGs 273, 274) Top Root Cause: NCD requirement(s), other documentation required for payment – Missing.”

Did You Know?

On January 11, 2023 CMS updated their 2023 ICD-10-CM and PCS webpages to provide information about the new codes that will be effective April 1, 2023. You can read more about the codes in a related MMP article ( https://www.mmplusinc.com/kb-articles/new-icd-10-cm-and-icd-10-pcs-codes-effective-april-1-2023).

 

Why Should I Care?

In addition to new diagnosis codes, the FY 2023 ICD-10-CM Official Guidelines for Coding and Reporting has been updated to include new guidance regarding Social Determinants of Health (SDOH).

 

Specifically, new guidance clarifying when to assign a code for living alone, food insecurity and homelessness, has been added to guidelines for SDOHs in Chapter 21 of the Chapter-Specific Guidelines, Section b.17.  Following is a compare of the June 2022 guidance to the January 11, 2023 guidance.

 

Excerpt from June 2022 Official Guidelines for Coding and Reporting (https://ftp.cdc.gov/pub/Health_Statistics/NCHS/Publications/ICD10CM/2023/ICD-10-CM-Guidelines-FY2023.pdf)

 

Codes describing problems or risk factors related to social determinants of health (SDOH) should be assigned when this information is documented. Assign as many SDOH codes as are necessary to describe all of the problems or risk factors. These codes should be assigned only when the documentation specifies that the patient has an associated problem or risk factor. For example, not every individual living alone would be assigned code Z60.2, Problems related to living alone.

For social determinants of health, such as information found in categories Z55-Z65, Persons with potential health hazards related to socioeconomic and psychosocial circumstances, code assignment may be based on medical record documentation from clinicians involved in the care of the patient who are not the patient’s provider since this information represents social information, rather than medical diagnoses. For example, coding professionals may utilize documentation of social information from social workers, community health workers, case managers, or nurses, if their documentation is included in the official medical record.

 

Patient self-reported documentation may be used to assign codes for social determinants of health, as long as the patient self-reported information is signed-off by and incorporated into the medical record by either a clinician or provider.

 

Excerpt from January 2023 Official Guidelines for Coding and Reporting

(https://www.cms.gov/files/document/fy-2023-icd-10-cm-coding-guidelines-updated-01/11/2023.pdf)

 

Social determinants of health (SDOH) codes describing social problems, conditions, or risk factors that influence a patient’s health should be assigned when this information is documented in the patient’s medical record. Assign as many SDOH codes as are necessary to describe all of the social problems, conditions, or risk factors documented during the current episode of care. For example, a patient who lives alone may suffer an acute injury temporarily impacting their ability to perform routine activities of daily living.

When documented as such, this would support assignment of code Z60.2, Problems related to living alone. However, merely living alone, without documentation of a risk or unmet need for assistance at home, would not support assignment of code Z60.2. Documentation by a clinician (or patient-reported information that is signed off by a clinician) that the patient expressed concerns with access and availability of food would support assignment of code Z59.41, Food insecurity. Similarly, medical record documentation indicating the patient is homeless would support assignment of a code from subcategory Z59.0-, Homelessness.

For social determinants of health, such as information found in categories Z55-Z65, Persons with potential health hazards related to socioeconomic and psychosocial circumstances, code assignment may be based on medical record documentation from clinicians involved in the care of the patient who are not the patient’s provider since this information represents social information, rather than medical diagnoses. For example, coding professionals may utilize documentation of social information from social workers, community health workers, case managers, or nurses, if their documentation is included in the official medical record.

Patient self-reported documentation may be used to assign codes for social determinants of health, as long as the patient self-reported information is signed-off by and incorporated into the medical record by either a clinician or provider.

The files containing information on the ICD-10-CM updates effective with discharges on and after April 1, 2023 are available on the CMS ICD-10-CM webpage (https://www.cms.gov/medicare/icd-10/2023-icd-10-cm) and the CDC’s Comprehensive Listing ICD-10-CM Files webpage (https://www.cdc.gov/nchs/icd/Comprehensive-Listing-of-ICD-10-CM-Files.htm).

 

What Can I Do?

Share this information with key stakeholders at your facility (i.e., Coding Professionals, Clinical Documentation Improvement Specialists, and Case Management).

Did You Know?

January is Cervical Health Awareness Month.

Why Should You Care?

According to a CDC Fact Sheet (link), while all women are at risk for cervical cancer, it occurs most often in women over age 30. Almost all cervical cancers are cause by the Human Papillomavirus (HPV), additional factors that can increase a woman’s risk for cervical cancer includes:

• Smoking,
• Having HIV or another condition that makes it hard for your body to fight off health problems,
• Using birth control pills for five or more years, and
• Having given birth to three or more children.

What Can You Do?

The good news is that with regular screening tests and follow-up with your doctor, cervical cancer is the easiest of gynecological cancers to prevent.

Medicare covers:

• Cervical cancer screening with HPV Tests in asymptomatic Medicare Part B female patients aged 30-65 years once every five years,
• Pap tests screening for female patients with Medicare Part B annually for women with a high risk for developing cervical or vaginal cancer and every two years for low-risk women, and,
• Screening pelvic exams also annually for high-risk women and every two years for low-risk women.

The patient pays nothing for any of these screening tests if the physician accepts assignment.

You can learn more about these tests including applicable National Coverage Determinations, HCPCS and CPT codes by accessing the MLN Educational Tool Medicare Preventive Services (MLN006559 December 2022) at: https://www.cms.gov/Medicare/Prevention/PrevntionGenInfo/medicare-preventive-services/MPS-QuickReferenceChart-1.html#CERV_CAN).

Did You Know?

CMS established the New COVID-19 Treatments Add-On Payment (NCTAP) under the Medicare Inpatient Prospective Payment System (IPPS). This add-on payment was “designed to mitigate potential financial disincentives for hospitals to provide new COVID-19 treatments, and is effective from November 2, 2020, until the end of the fiscal year in which the COVID-19 public health emergency (PHE) ends.”

Why Should You Care?

Providers will receive “an enhanced payment for eligible inpatient cases that use certain new products with current FDA approval or emergency use authorization (EUA) to treat COVID-19.”

NCTAP claims are eligible for the “enhanced payment,” when the claim has the ICD-10-CM diagnosis code U07.1 (COVID-19) and one of the treatments listed on the CMS NCTAP webpage (link).

A new treatment was added to the list in November 2022 after the FDA issued an EUA for Kineret injection for hospital discharges on or after November 8, 2022. Your hospital would report this treatment by adding the applicable NDC code 06665823407 to the claim.

CMS advised that “hospitals should report the ICD-10-PCS code(s) or NDC(s) for all products administered during the stay, even if the hospital got the product for free. Hospitals shouldn’t report charges for products they got for free.”

What Can You Do?

Become familiar with the list of approved treatments and the related ICD-10-PCS code or NDC that must be on the claim and share this information with your coding staff.

MMP’s Protection Assessment Report (P.A.R.) combines current Medicare Fee-for-Service review targets (i.e., MAC, RAC, OIG) with hospital specific paid claims data made possible through a collaboration with RealTime Medicare Data (RTMD). Monthly, our newsletter spotlights current review activities. This month we focus on the Shared Decision-Making (SDM) requirement for Left Atrial Appendage Closure (LAAC) and Implantable Cardioverter Defibrillator procedures.

Did You Know?

The Agency for Healthcare Research and Quality (AHRQ) (link) defines Shared Decision-Making (SDM) as “a model of patient-centered care that enables and encourages people to play a role in the medical decisions that affect their health,” and goes on to note that “the innovation of shared decision making is the use of evidence-based tools, known as patient decision aids, to inform patients and help them set their own goals and clarify their values.”

Why It Matters?

There are two National Coverage Determinations (NCDs) for a cardiac procedure in which an SDM encounter is listed as one of the nationally covered indications for coverage of the procedure.

• NCD 20.34: Left Atrial Appendage Closure (LAAC)
• NCD 20.4 Implantable Automatic Defibrillators

This matters because the Comprehensive Error Rate Testing (CERT) Contractor lists both procedures in Table D4 of the 2021 Comprehensive Error Rate Testing (CERT) supplemental improper payment data report. This table details the top 20 service types with the highest improper payments in the Part A hospital inpatient prospective payment system (IPPS) setting.

DRG pair 273 and 274 (Percutaneous Intracardiac Procedures) had the third highest projected improper payment at $160,504,177 and a 29.3% improper payment rate. LAAC procedures group to this DRG pair. Insufficient documentation accounted for 83% of the improper payment rate and 17% of the improper payment rate was attributed to medical necessity issues.

DRG pair 226 and 227 (Cardiac Defibrillator Implant without Cardiac Catheterization) had the fifth highest projected improper payment rate at $">link),790,870 and a 22.7% improper payment rate. Insufficient documentation accounted for 85.3% of the improper payment rate and 14.7% of the improper payment rate was attributed to medical necessity issues.

CMS recently provided the following guidance in the Thursday, December 1, 2022 edition of MLN Connects (link):

“Shared decision-making (SDM) is an important part of person-centered health care. You work with your patient to make decisions that meet their needs based on:

• Evidence-based information about available options
• Your knowledge and experience
• Patient's values and preferences

When you provide SDM for percutaneous left atrial appendage closure (LAAC) and implantable cardioverter defibrillators (ICDs):

• Document the SDM encounters correctly in medical records before you implant.
• Get preoperative documents from all providers before submitting medical records. While not mandatory, it speeds processing of your claims.

The Comprehensive Error Rate Testing (CERT) contractor reviews your claim documentation to determine if it meets SDM requirements. If it doesn’t, CMS will:

• Issue an error for overpaid claims for these procedure codes
• Recoup the overpayment”

What Can I Do?

If your hospital provides either of these services:

• Ensure documentation in your medical record meets the requirements detailed in the NCD. Palmetto GBA, the Medicare Administrative Contractor (MAC) for Jurisdiction J (Alabama, Georgia, and Tennessee) has published two resources to assist you:
• A Cardiac Procedure Checklist (link) for when a claim is selected for review by the CERT contractor, and
• A Left Atrial Appendage Closure education module (link). Palmetto notes, “This module provides an overview of what Palmetto GBA, and the Comprehensive Error Rate Contractor (CERT) requires in your documentation to support billing of these claims. Shared decision-making (SDM) encounters with the patient is a very intricate part of your documentation.”
• Share this information with your Physicians,
• Respond to Additional Documentation Requests (ADRs) in a timely manner, and
• Have a process in place to ensure that all documents needed to support the medical necessity of the services provided are included when responding to Additional Documentation Requests (ADRs) from Medicare Contractors (i.e., CERT, Recovery Auditor).

On November 22nd, CMS published the following announcement regarding new ICD-10 diagnosis and procedure codes that will become effective April 1, 2023:

In an effort to better enable the collection of health-related social needs (HRSNs), defined as individual-level, adverse social conditions that negatively impact a person’s health or healthcare, are significant risk factors associated with worse health outcomes as well as increased healthcare utilization, the Centers for Disease Control and Prevention’s (CDC) National Center for Health Statistics (NCHS) is implementing 42 new diagnosis codes into the International Classification of Diseases, Tenth Revision, Clinical Modification (ICD-10-CM), for reporting effective April 1, 2023.

Fourteen of the new diagnosis codes are identified as external cause of injury codes and as such there is no assigned severity level, MDC, or MS-DRG.

In addition, the Centers for Medicare & Medicaid Services (CMS) is implementing 34 new procedure codes into the International Classification of Diseases, Tenth Revision, Procedure Coding System (ICD-10-PCS), effective April 1, 2023.

The ICD-10 MS-DRG V40.1 Grouper Software, Definitions Manual Table of Contents, and the Definitions of Medicare Code Edits V40.1 manual to accommodate these new diagnosis and procedure codes, effective for discharges on or after effective April 1, 2023 will be available at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software.html.

The Code Tables, Index and related Addenda files for the 34 new procedure codes will be available at: https://www.cms.gov/medicare/icd-10/2023-icd-10-pcs.

The Index and Tabular Addenda for the new diagnosis codes will be made available via the CDC website at: https://www.cdc.gov/nchs/icd/Comprehensive-Listing-of-ICD-10-CM-Files.htm.

Did You Know?

December 5th – 9th, 2022 is National Influenza Vaccination Week (NIVW). This annual observance is a time to remind everyone that for individuals 6 months and older there is still time to get vaccinated against the flu. This is especially important for individuals at higher risk (i.e., people 65 years and older, diabetics, people with heart disease, and young children) for developing serious complications from the flu.

Why It Matters?

The CDC estimated, that during the 2021 – 2022 influenza season (link), influenza was associated with:

• 9 million illnesses,
• 4 million medical visits,
• 10,000 hospitalizations, and
• 5,000 deaths.

The CDC estimates that, from October 1, 2022 through November 26, 2022, there have been:

• 8.7 – 19 million flu illnesses,
• 4.2 – 9.5 million flu medical visits,
• 78,000 – 170,000 flu hospitalizations, and
• 4,500 – 13,000 flu deaths.

Note, the above 2022 estimates were last reviewed December 2, 2022, are preliminary and change week-by-week as new hospitalizations are reported to the CDC.

What Can I Do?

If you are a healthcare provider, CMS has updated their Flu Shot Toolkit (link) with information about payment for the 2022-2023 flu season, frequency and coverage, billing, coding, and additional resources.

Receiving an annual flu vaccine reduces your risk of flu. Seasonal influenza viruses are detected year-round, however most flu activity peaks between December and February. As a healthcare consumer, if you have not already received your flu shot, it is not too late to get one.

The CMS released the Calendar Year (CY) 2023 Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System Final Rule on November 1, 2022. Following are highlights from the final rule:

CY 2023 OPPS and ASC Payment Rates

CMS is updating the CY 2023 OPPS and ASC payment rate by 3.8%.

• The estimated total payments to OPPS providers in CY 2023 would be approximately $86.5 billion, an increase of approximately $6.5 billion compared to CY 2022 OPPS payments.
• The estimated total payments to ASCs for CY 2023 will be approximately $5.3 billion, an increase of approximately $230 million compared to CY 2022 ASC payments.

Comprehensive Ambulatory Payment Categories (C-APCs) for CY 2023

C-APCs were first implemented on January 1, 2015. A C-APC is defined as “a classification for the provision of a primary service and all adjunctive services provided to support the delivery of the primary service.”

CMS expanded the C-APC methodology in 2016 to include a “Comprehensive Observation Services” C-APC (C-APC 8011). The payment rate for C-APC 8011 in CY 2023 is $2,439.02.

For CY 2023, CMS finalized one new C-APC, C-APC 5372 (Level 2 Urology and Related Services).

For the duration of the COVID-19 PHE, any new FDA approved drug or biological approved for emergency use authorization (EUA) to treat COVID-19 that is authorized for use in the outpatient setting, or not limited to use in the inpatient setting, will be separately paid and will not package into the C-APC when provided on the same claim as the primary C-APC service.

Rural Emergency Hospital (REH)

REH is a new Medicare Provider type that includes facilities who elect to convert either from a critical access hospital (CAH) or a rural hospital with less than fifty beds to an REH. Policies for this new provider type will take effect January 1, 2023.

By statute REH services include emergency department services and observation care. Specific to observation care, CMS notes “there may be instanced in which REH patients receive observation services at an REH for a period exceeding 24 hours, but REHs are not required to provide required notification under the NOTICE Act, known as the Medicare Outpatient Observation Notice (MOON), because REHs are excluded from the definition of “hospital.”

An REH can also elect to provide other outpatient medical and health services furnished on an outpatient basis. CMS finalized the proposal that REHs may provide outpatient services not otherwise paid under the OPPS (i.e., services paid under the Clinical Lab Fee Schedule, post-hospital extended care services in a distinct part unit licensed as a skilled nursing facility).

REHs will receive a monthly facility payment of $272,866. This payment will increase in subsequent years by the hospital market basket percentage increase.

340B-Acquired Drugs

“CMS notes in the final rule that “for CY 2023, in light of the Supreme Court decision in American Hospital Association v. Becerra, 142 S. Ct. 1896 (2022), we are applying the default rate, generally average sales price (ASP) plus 6 percent, to 340B acquired drugs and biologicals in this final rule with comment period for CY 2023 and removing the increase to the conversion factor that was made in CY 2018 to implement the 340B policy in a budget neutral manner.

We are still evaluating how to apply the Supreme Court’s decision to prior calendar years. In the CY 2023 OPPS/ASC proposed rule, we solicited public comments on the best way to craft any potential remedies affecting cost years 2018-2022, and we will take these comments into consideration for separate rulemaking that will be published in advance of the CY 2024 OPPS/ASC proposed rule.”

Reminder, for 2022 claims prior to September 28th, providers will need to submit adjustment claims to recalculate their payments (link).

Medicare Inpatient Only (IPO) List

For CY 2023, CMS is removing 11 services and adding 8 newly created CPT codes to the IPO List. Table 65 of the final rule includes all services to be removed or added to the IPO list.

ASC Covered Procedure Lists

Procedures on the ASC Covered Procedure List (CPL) are surgical procedures that are appropriately performed on an inpatient basis in a hospital but that can also be safely performed in an ASC, a CAH, or an HOPD. Four procedures are being added to this list and can be found in table 80 of the final rule.

Hospital Outpatient Department Prior Authorization Process: New Service Category

Effective for dates of service on or after July 1, 2023, Facet joint interventions will be added to the list of service categories that hospital outpatient departments will be required to get prior authorization to receive payment. Specific Facet Joint CPT codes that will require prior authorization are listed in Table 103 of the final rule.

Outpatient Non-PHP Mental Health Services Furnished Remotely by Hospital Staff to Beneficiaries in Their Homes

CMS finalized its proposal to consider mental health services furnished remotely by hospital staff using communication technology to a beneficiary in his or her home a covered outpatient department service.

An in-person service will be required within 6 months prior to the initiation of remote service and then every 12 months thereafter, exceptions may be made to this requirement based on a beneficiary’s clinical needs and the reason being documented in the medical record. The in-person requirement will not apply to beneficiaries who began receiving mental health telehealth services during the PHE or during the 151-day period after the end of the PHE.

Audio-only interactive telecommunications systems may be used when a beneficiary is not capable of, or does not consent to, the use of two-way, audio/video technology.

Resources

CY 2023 OPPS Final Rule CMS Press Release: https://www.cms.gov/newsroom/press-releases/hhs-continues-biden-harris-administration-progress-promoting-health-equity-rural-care-access-through

CY 2023 OPPS Final Rule Fact Sheet: https://www.cms.gov/newsroom/fact-sheets/cy-2023-medicare-hospital-outpatient-prospective-payment-system-and-ambulatory-surgical-center-2

MMP’s Protection Assessment Report (P.A.R.) combines current Medicare Fee-for-Service review targets (i.e., MAC, RAC, OIG) with hospital specific paid claims data made possible through a collaboration with RealTime Medicare Data (RTMD). Monthly, our newsletter spotlights current review activities. This month we focus on the new service to be added to the Prior Authorization for Certain Hospital Outpatient (OPD) Services effective July 1, 2023.

Did You Know?

CMS implemented the Prior Authorization for Certain Hospital Outpatient Department (OPD) Services through the Calendar Year (CY) 2020 Outpatient Prospective Payment System/Ambulatory Surgical Center (OPPS/ASC) Final Rule (CMS-1717-FC).

Initially, effective July 1, 2020 blepharoplasty, botulinum toxin injections, panniculectomy, rhinoplasty and vein ablation required a prior authorization when performed in the hospital OPD. For claims on or after July 1, 2021, implanted spinal neurostimulators and cervical fusion with disc removal were added to the list.

New for 2023, CMS finalized the addition of facet joint interventions requiring prior authorization for claims on or after July 1, 2023. This service category includes facet joint injections, medial branch blocks, and facet joint nerve destruction. A list of the specific CPT codes that will require prior authorization are listed in Table 103 of the CY 2023 OPPS/ASC Final Rule (CMS-1772-FC).

Why it Matters?

Reviewing facet joint records has been a target by several different entities.

Medicare Administrative Contractors

Noridian Jurisdiction E (JE) Part B MAC has conducted a Targeted and Probe and Educate (TPE) review of CPT 64635 (Destruction by Neurolytic Agent, Paravertebral Facet Joint Nerve). Dates of service reviewed were January 2020 through March 2020. The claims error rate was 75% with the top denial reasons being:

• Failure to return records,
• Documentation does not support the medical necessity as listed in the Coverage Requirement, and
• Duplicate billing.

Noridian indicated in their review results that “Local Coverage Determination L34993 provides an overview of the coverage requirements for these services. Documentation must support the history of pain which has not been responsive to conservative measures. Documentation must also support the conservative measures that have been tried and failed. The LCD also further clarifies that documentation must support a clinical assessment which supports that the pain is a result of the facet joint and that there is no other pathology that may be causing the pain.

Documentation must reflect the patient pre and post procedure pain rating, procedure report, and the injectate used is within the LCD requirements.”

Other Part B MACs that have reviewed or are currently reviewing facet joint injections include Novitas JH and JL and WPS J8.

Office of Inspector General (OIG)

CMS notes in the OPPS/ASC final rule that the OIG has published multiple reports indicating questionable billing practices, improper Medicare payments, and questionable utilization of facet joint interventions. Based on their findings, the OIG recommended that CMS and its contractors provide additional oversight on claims for facet joint injections to prevent additional improper payments.

Supplemental Medical Review Contractor

Just last month on October 10th, the Supplemental Medical Review Contractor (SMRC) posted their review findings of Project 01-304: facet joint injections. The October 2020 OIG report was referenced in the review results. Claims reviewed included hospital outpatient and critical access hospitals with dates of service in CY 2019. The claims error rate was 92% and common denial reasons included:

• Documentation submitted was insufficient or incomplete,
• Documentation submitted did not support medical necessity as listed in National and Local Coverage Determinations, and
• No response to the documentation request by the provider.

What Can I Do?

You can begin to prepare for the July 1, 2023 addition of Facet joint procedures to the Prior Authorization for Certain Hospital OPD Services now by:

• Identifying applicable Medicare Coverage Documents (Local Coverage Determinations (LCDs) and Local Billing and Coding Articles (LCAs)), and
• Ensuring key stakeholders are aware of the need for prior authorization effective July 1, 2023 (i.e., Outpatient Department Nurse Manager, Scheduling, Physicians performing these procedures) and educate them on applicable documentation requirements found in the LCDs and LCAs.