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CMS Administrator Seema Verma is quoted as saying in an April 23rd Press Release that “transformative technologies are coming to the private market, but Medicare’s antiquated payment systems have not contemplated these technologies…I am particularly concerned about cases that have been reported to the agency in which Medicare’s inadequate payment has led hospitals to curtail access to needed therapies. We must continually update our policies in response to the rapid pace of advancement in medical science.”

Over the past two weeks we have covered finalized changes to ICD-10-CM diagnosis code severity designation and MS-DRGs found in the FY 2020 IPPS Final Rule. This week we examine the finalized New Technology Add-On Payments.

Background

Annually, CMS addresses applications for new technology add-on payments in the IPPS proposed rule. They do not make proposals, instead the proposed rule describes any concerns they may have about an applicant meeting the criteria for payment as a new technology and seeks additional information as needed to make a decision in the IPPS final rule. To be eligible for an add-on payment a new technology must meet the following three criteria:

• The medical service or technology must be new;
• The medical service or technology must be costly such that the DRG rate otherwise applicable to discharges involving the medical service or technology is determined to be inadequate; and
• The service or technology must demonstrate a substantial clinical improvement over existing services or technologies.

Once a new technology add-on payment status is granted hospitals are eligible to receive the payment for up to three years.

Increasing Add-On-Payment Amount

For FY 2019, the calculation for add-on payments is based on cost to hospitals for the new medical service or technology. Specifically, Medicare makes an add-on payment equal to the lesser of the following:

• 50% of the costs of the new medical service or technology, or
• 50% of the amount by which the costs of the case exceed the standard DRG payment.

In response to concerns from commenters and stakeholders, CMS agrees “that capping the add-on payment amount at 50 percent could, in some cases, no longer provide a sufficient incentive for the use of the technology.” As such, for discharges on or after October 1, 2019, CMS finalized their proposal to make the add-on payment be equal to the lesser of the following:

• 65% of the costs of the new medical service or technology, or
• 65% of the amount by which the costs of the case exceed the standard DRG payment.

New Technology Add-On Payment for Qualified Infectious Disease Products

CMS received comments and concerns related to antimicrobial resistance and its serious impact on Medicare beneficiaries and public health overall and finalized that for medical products designated as a Qualified Infectious Disease Product (QIDP) by the FDA, “if the costs of a discharge involving a new medical service or technology exceed the full DRG payment…Medicare will make an add-on payment equal to the lesser of (1) 75 percent of the costs of the new medical service or technology; or (2) 75 percent of the amount by which the costs of the case exceed the standard DRG payment.”

CMS Finalizes Proposal to Modernize Payment Policies for Medical Devices Meeting FDA’s Breakthrough Devices Designation

In December 2018 the U.S. Food and Drug Administration (FDA) implemented the Breakthrough Devices Program. At that time, the FDA indicated this “is a voluntary program for certain medical devices and device-led combination products that provides for more effective treatment or diagnosis of life-threatening or irreversibly debilitating diseases or conditions…this program is intended to help patients have more timely access to these medical devices by expediting their development, assessment, and review, while preserving the statutory standards for premarket approval, 510(k) clearance, and De Novo marketing authorization, consistent with the Agency’s mission to protect and promote public health.”

CMS finalized the proposal that “for applications received for IPPS new technology add-on payments for FY 2021 and subsequent fiscal years, if a medical device is part of the FDA’s Breakthrough Devices Program and received FDA marketing authorization, such a device would be considered new and not substantially similar to an existing technology for purposes of new technology add-on payment under the IPPS.” CMS also finalized extending this proposal to products designated by the FDA as a QIDP.

Applications for New Technology Add-On Payments for FY 2020

 

• For FY 2020, CMS proposed to continue 10 of 13 technologies receiving NTAP in FY 2019.
• The remaining 3 of 13 technologies receiving NTAP in FY 2019 were no longer considered “new” and have been discontinued for FY 2020.
• There were 17 new applicants for new technology add-on payment for FY 2020
• Eight of the 17 new applicants discussed in the proposed rule either withdrew their application, did not receive FDA approval by the deadline of July 1 or after evaluation CMS found they did not meet the criteria to be considered a new technology.
• Effective October 1, 2019, there will be 19 New Technologies eligible for Add-On Payments.

 

CMS estimates the payment amounts for new technology add-on payments in the Final Rule based on the applicant’s estimates. This amount and the estimated number of patients is highlighted in the following table:  

‍For Your Consideration

While the number of patients estimated to receive one of the FY 2020 technologies approved for add-on payments is relatively small, this is an opportunity not to be missed for those hospitals providing the service. Looking at paid claims data in RealTime Medicare Data (RTMD), it appears that not all hospitals are taking advantage of the additional payment opportunity by not including a code for these medical services or technologies on the claim. That said, some questions come to mind for you to think about:

• Is your hospital providing any of these medical services or technology?
• Who needs to be aware of what the new technologies are? (i.e. Physicians, Pharmacy, Coding Professionals, Clinical Documentation Integrity Specialists, Case Managers)
• What process do you have in place to alert your Coding Staff of the need to code the new technologies?

To help you get started, I have put together a document detailing each New Technology including a description of the technology, the ICD-10-PCS code(s) and code description and the maximum new technology add-on payment in FY 2019 and for FY 2020. To download this document, click here.

At least annually, DRG classifications and relative weights are adjusted to reflect changes in treatment patterns, technology, and other factors that may change the relative use of hospital resources. This week is the second article in our series about the 2020 IPPS Final Rule. This week highlights finalized changes to specific MS-DRG Classifications.

Pre-MDC

Extracorporeal Membrane Oxygenation (ECMO)

In FY 2019, three new procedure codes were finalized describing different types of ECMO treatments being used (central and peripheral). However, the codes were not finalized prior to the release of the FY 2019 IPPS Proposed Rule meaning there was no proposed Major Diagnostic Category (MDC), MS-DRG or O.R. vs. Non-O.R. designation made for the new codes.  

Given this unique situation, CMS Clinical Advisors reviewed the predecessor central ECMO code (5A15223) and determined the new peripheral codes should not sequence to Pre-MDC MS-DRG 3 where the central ECMO code is assigned.

Instead the new Peripheral ECMO codes were designated as Non-O.R. Procedures impacting MS-DRG assignment for specific medical MS-DRGs. The following table reflects the differences in ECMO Procedures DRG assignment:

In the FY 2020 IPPS Proposed Rule, stakeholders expressed the following concerns:

• MS-DRG assignment for ECMO should not be based on how the patient is cannulated as most of the cost can be attributed to a patient’s severity of illness,
• There was a lack of opportunity for public comment on the final MS-DRG assignments,
• Patient access to ECMO treatment and programs is now at risk because of inadequate payment, and
• CMS did not appear to have access to enough patient data to evaluate for appropriate MS-DRG assignment.

In the Final Rule CMS finalized the following proposals:

• Reassign the procedure codes describing peripheral ECMO procedures from their current MS-DRG assignments to Pre-MDC MS-DRG 003,
• Maintain the designation of the peripheral ECMO procedures as non-O.R., and
• Make changes to the titles for MS-DRGs 207, 291, 296, and 870 to no longer reflect the ECMO terminology in the title.

Allogenic Bone Marrow Transplant

A request was made to create new MS-DRGs for cases that would identify patients undergoing an allogeneic hematopoietic cell transplant (HCT) procedure according to the donor source (related or unrelated donor source). The requester indicated this would more appropriately recognize the clinical characteristics and cost differences in allogeneic HCT cases.

CMS data analysis of MS-DRG 014 cases reporting HCT related donor source, HCT unrelated donor source and unspecified donor source had comparable average length of stay and average costs. Thus, no proposal was made to create new MS-DRGs.

However, as a result of CMS’ review of procedure codes they proposed and finalized:

• The reassignment of 4 ICD-10-PCS codes for HCT procedures specifying autologous cord blood stem cell as the donor source from MS-DRG 014 to MS-DRGs 016 and 017, and
• Delete 128 clinically invalid codes from the transfusion table describing arterial access as transfusion procedures always use venous access rather than arterial access.

Chimeric Antigen Receptor (CAR) T-Cell Therapy

“Chimeric Antigen Receptor (CAR) T-cell therapy is a cell-based gene therapy in which a patient’s own T-cells are genetically engineered in a laboratory and used to assist in the patient’s treatment to attack certain cancerous cells. Blood is drawn from the patient and the T-cells are separated. The laboratory then utilizes the CAR process to genetically engineer the T-cells, resulting in the addition of a chimeric antigen receptor that will bind to a certain protein on the patient’s cancerous cells. The CAR T-cells are then administered to the patient by infusion.”

Two CAR T-cell therapy drugs received FDA approval in 2017 (KYMRIAH™ manufactured by Novartis Pharmaceuticals Corporation and YESCARTA™ manufactured by Kite Pharma, Inc.). Current ICD-10-PCS procedures codes involving the CAR T-cell therapy drugs includes:

• XW033C3 (Introduction of engineered autologous chimeric antigen receptor t-cell immunotherapy into peripheral vein, percutaneous approach, new technology group 3), and
• XW043C3 (Introduction of engineered autologous chimeric antigen receptor t-cell immunotherapy into central vein, percutaneous approach, new technology group 3).

Both ICD-10-PCS procedure codes became effective October 1, 2017 and are designated as non-O.R. procedures impacting MS–DRG assignment.

In FY 2019 CMS finalized the assignment of these procedure codes to Pre-MDC MS-DRG 016, revise the title of MS-DRG 016 to include “or T-cell immunotherapy,” and Car T-cell therapy was approved for a new technology add-on payment.

In the FY 2020 IPPS Proposed Rule, a request was made to create new MS-DRGs for CAR T-cell therapy. CMS does not believe enough data is available to make a change at this time. However, CMS has finalized the continuation of CAR-T cell therapy being eligible for new technology and add-on payments for FY 2020.

MDC 1: Diseases and Disorders of the Nervous System

Carotid Artery Stent Procedures

Current logic for case assignment to MS-DRGs 034, 035, and 036 (Carotid Artery Stent Procedures with MCC, with CC, and without CC/MCC respectively) “is comprised of two lists of logic that include procedure codes for operating room (O.R.) procedures involving dilation of a carotid artery (common, internal or external) with intraluminal device(s).”

CMS identified 46 ICD-10-PCS procedures codes in the second list that do not describe dilation of a carotid artery with intraluminal device. CMS finalized the proposal to remove these 46 codes from MS-DRGs 034, 035 and 036.

 

These 46 ICD-10-PCS codes are also assigned to MS-DRGs 037, 038, and 039 (Extracranial Procedures with MCC, with CC, and without CC/MCC, respectively.) Therefore, CMS also examined claims data for this MS-DRG group and finalized their proposals to:

• Remove 96 ICD-10-PCS procedure codes describing dilation of a carotid artery with an intraluminal device from the logic for MS-DRG group 037-038 and 039,
• Reassign 6 ICD-10-PCS procedure codes describing dilation of a carotid artery with an intraluminal device from MS-DRG group 037, 038 and 039 to MS-DRG group 034, 035, and 036,
• Delete 48 procedure codes from MS-DRGs 037, 038, and 039 that include the qualifier term “bifurcation;” and
• Combining all procedure codes identifying a carotid artery stent procedure within MS-DRGs 034, 035, and 036 into one list entitled “Operating Room Procedures” to better reflect the definition of the MS-DRGs.

MDC 4: Diseases and Disorders of the Respiratory System

Pulmonary Embolism

A request was made to reassign the following three ICD-10-CM diagnosis codes for Pulmonary Embolism (PE) with acute core pulmonale from MS-DRG 176 (PE without MCC) to MS-DRG 175 (PE with MCC):

• I26.01 – Septic pulmonary embolism with acute cor pulmonale,
• I26.02 – Saddle embolus of pulmonary artery with acute cor pulmonale, and
• I26.09 – Other pulmonary embolism with acute cor pulmonale.

The requestor noted with the FY 2019 IPPS Final Rule special logic change where a Principal Diagnosis could no longer be its own CC or MCC this resulted in these three codes being assigned to MS-DRG 176 when no other MCC is present. The requestor stated MS-DRG 176 does not appropriately account for cost and resource utilization associated with these cases.

CMS claims analysis supported the requestor’s statement about cost and resource utilization. CMS has finalized their proposals to:

• Reassign cases reporting diagnosis codes I26.01, I26.02 and I26.09 to MS-DRG 175, and
• Revise the MS-DRG 175 title to “Pulmonary Embolism with MCC or Acute Cor Pulmonale.”

The difference in relative weight (RW) and Geometric Mean Length of Stay (GMLOS) are reflected in the following table.

‍MDC 5: Diseases and Disorders of the Circulatory System

 

Transcatheter Mitral Valve Repair (TMVR) with Implant

CMS received a request to modify the current MS-DRG assignment for TMVR with implant procedures (MS-DRG 228 and 229: Other Cardiothoracic Procedures with MCC and without MCC, respectively). The requestor believed that TMVR is more similar to the replacement procedures in MS-DRGs 266 and 267 compared to other procedures currently assigned to MS-DRGs 228 and 229 and “noted that both TMVR procedures and endovascular cardiac valve replacements use a percutaneous approach, treat cardiac valves, and use an implanted device for purposes of improving the function of the specified valve.”

 

In the Proposed Rule CMS indicated “Our clinical advisors continue to believe that transcatheter cardiac valve repair procedures are not the same as a transcatheter (endovascular) cardiac valve replacement.

However, they agree with the requestor and, based on our data analysis, that these procedures are more clinically coherent in that they also describe endovascular cardiac valve interventions with implants and are similar in terms of average length of stay and average costs to cases in MS-DRGs 266 and 267 when compared to other procedures in their current MS-DRG assignment. For these reasons, our clinical advisors agree that we should propose to reassign the endovascular cardiac valve repair procedures (supplement procedures)…to the endovascular cardiac valve replacement MS-DRGs.”

CMS finalized the following proposals:

• Modify the structure of MS-DRGs 266 and 267 by reassigning the procedure codes describing transcatheter cardiac valve repair (supplement) procedure,
• Revise the title of MS-DRG 266 from “Endovascular Cardiac Valve Replacement with MCC” to “Endovascular Cardiac Valve Replacement and Supplement Procedures with MCC,”
• Revise the title of MS-DRG 267 from “Endovascular Cardiac Valve Replacement without MCC” to “Endovascular Cardiac Valve Replacement and Supplement Procedure without MCC,”
• Create two new MS-DRGs with a two-way severity split for the remaining (non-supplement) transcatheter cardiac valves.
• MS-DRG 319 (Other Endovascular Cardiac Valve Procedures with MCC), and
• MS-DRG 320 (Other Endovascular Cardiac Valve Procedures without MCC).

Pacemaker Leads

CMS noted that ICD-10-PCS procedure code 02H60JZ (Insertion of pacemaker lead into right atrium, open approach) was inadvertently omitted from the GROUPER logic for MS-DRGs 260, 261, and 262. They finalized adding this procedure code to the list of Non-O.R. procedures that would impact MS-DRGs 260, 261, and 262 when reported as a stand-alone procedure code.

 

MDC 8: Diseases and Disorders of the Musculoskeletal System and Connective Tissue

 

Knee Procedures with Principal Diagnosis of Infection

In FY 2019 ICD-10-CM diagnosis codes M00.9 (Pyogenic arthritis, unspecified) and A54.42 (Gonococcal arthritis) grouped to MS-DRGs 488 and 489 (Knee Procedures without Principal Diagnosis of Infection with and without CC/MCC, respectively) when a knee procedure is reported on the claim.

 

CMS received a request to add these two codes to the list of principal diagnoses for MS-DRGs 485, 486, 487 (Knee Procedure with Principal Diagnosis of Infection with MCC, with CC, and without CC/MCC, respectively).  

CMS finalized the following:

• Add both codes to the list of principal diagnosis codes for MS-DRGs 485, 486 and 487,
• Add 10 additional ICD-10-CM diagnosis codes specific to the knee and describing an infection; and
• Remove 8 ICD-10-CM diagnosis codes from the list of principal diagnosis for MS-DRG 485, 486 and 487 as they do not describe an infection of the knee.

Scoliosis: Neuromuscular and Secondary Scoliosis and Kyphosis

Requests were made to add ICD-10-CM diagnosis codes describing neuromuscular scoliosis, secondary scoliosis and secondary kyphosis to the list of principal diagnosis codes for MS-DRGs 456, 457, and 458 (Spinal Fusion except Cervical with Spinal Curvature or Malignancy or Infection or Extensive Fusions with MCC, with CC, without CC/MCC, respectively).

CMS finalized their proposals to:

• Add 5 codes describing neuromuscular scoliosis and 8 codes describing secondary scoliosis and secondary kyphosis to the list of principal diagnosis codes for MS-DRGs 456, 457, and 458; and
• Remove 34 ICD-10-CM diagnosis codes describing conditions involving the cervical region from MS-DRGs 456, 457, and 458.

MDC 11: Diseases and Disorders of the Kidney and Urinary Tract

Extracorporeal Shock Wave Lithotripsy (ESWL)

Data analysis revealed a steady decline in inpatient cases reporting urinary stones and an ESWL procedure over the past five years. CMS indicated in the proposed rule that due to an ESWL procedure being a Non-O.R. procedure and the decreased usage of this procedure in the inpatient setting, clinical advisors believe there is no longer a reason to subdivide the MS-DRGs for urinary stones (MS-DRGs 691 &692, and 693 & 694) based on ESWL procedures.

CMS finalized their proposals to:

• Delete MS-DRGs 691 and 692 (Urinary Stones with ESW Lithotripsy with CC/MCC and without CC/MCC respectively); and
• Revise the MS-DRG title for MS-DRGs 693 and 694 from “Urinary Stones without ESW Lithotripsy with MCC” and “without MCC”, respectively to “Urinary Stones with MCC” and “Urinary Stones without MCC.”

MDC 12: Diseases and Disorders of the Male Reproductive System

In FY 2019, four ICD-10-CM diagnosis codes (R93.811, R93.812, R93.813, and R93.819) describing body parts with male anatomy grouped to in MS-DRGs 302 and 303 (Atherosclerosis with MCC and without MCC, respectively) in MDC 5 (Diseases and Disorders of the Circulatory System).

Based on a request and claims data analysis, CMS finalized the reassignment of these four codes from MDC 5 in MS-DRGs 302 and 303 to MS-DRGs 729 and 730 (Other Male Reproductive System Diagnosis with CC/MCC and without CC/MCC, respectively) in MDC 12.

 

MDC 14: Pregnancy, Childbirth and the Puerperium

Reassignment of Diagnosis Code 099.89 (Other specified Diseases and Conditions complicating pregnancy, childbirth and the puerperium)

CMS finalized their proposal to reclassify ICD-10-CM diagnosis code 099.89 (Other specified diseases and conditions complicating pregnancy, childbirth and the puerperium) from a postpartum condition to an antepartum condition.

Coding logic will now assign a case with an O.R. procedure and this code to MS-DRGs 817, 818, or 819 (Other Antepartum Diagnoses with O.R. Procedure with MCC, with CC, and without CC/MCC, respectively). When no O.R. procedure is reported on the claim, the logic will assign the case to MS-DRGs 831, 832, and 833 (Other Antepartum Diagnoses without O.R. Procedure with MCC, with CC, and without CC/MCC, respectively).

 

MDC 23: Factors Influencing Health Status and Other Contacts with Health Services

 

Assignment of Diagnosis Code R93.89 (Abnormal finding on diagnostic imaging of other specified body structures)

There was a request to reassign ICD-10-CM diagnosis code R93.89 from MS-DRGs 302 and 303 (Atherosclerosis with MCC and without MCC, respectively) in the Circulatory MDC 5 to MDC 23.

CMS finalized their proposal to reassign this diagnosis code to MS-DRGs 947 and 948 (Signs and Symptoms with MCC and without MCC, respectively).

 

Review of Procedure Codes in MS-DRGS 981 through 983 and 987 through 989

 

Adding Procedures Codes Currently Grouping to MS-DRGS 981 – 983 and 987 – 989 into MDCs

Annually, CMS conducts a review of procedures resulting in assignment to the O.R. and non-extensive O.R. Procedures Unrelated to Principal Diagnosis MS-DRG Groups (981-983 and 987-989). This review is done on the basis of volume, by procedure, to see if it is more appropriate to move a procedure to a surgical MS-DRG for the MDC where the Principal Diagnosis falls.

Several proposals were made and finalized for FY 2020 to move diagnosis and procedure codes back into a specific MDC including:

• Gastrointestinal stromal tumors (GIST),
• Peritoneal dialysis catheter complications codes,
• Bone excision with pressure ulcers codes,
• Lower extremity muscle and tendon excision codes,
• Insertion of feeding device code,
• Basilic vein reposition in chronic kidney disease codes; and
• Colon Resection with Fistula code 0DTN0ZZ.

You can access the Final Rule and related tables on the FY 2020 IPPS Final Rule Home Page. 

The Calendar Year (CY) 2020 Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System Proposed Rule was finally released on July 29th. This week MMP highlights proposed changes to the Inpatient Only (IPO) List, a related 2-Midnight Rule Proposal and the ASC Covered Procedures List (CPL).  

Inpatient Only List

CMS utilizes the following specific criteria when determining whether or not a procedure should be removed from the IPO List and assigned to an Ambulatory Payment Category (APC) group for payment under the OPPS when provided in the hospital outpatient setting:

1. Most outpatient departments are equipped to provide the services to the Medicare population.
2. The simplest procedure described by the code may be performed in most outpatient departments.
3. The procedure is related to codes that we have already removed from the IPO list.
4. A determination is made that the procedure is being performed in numerous hospitals on an outpatient basis.
5. A determination is made that the procedure can be appropriately and safely performed in an ASC, and is on the list of approved ASC procedures or has been proposed by CMS for addition to the ASC list.

CMS does not require that all five criteria be met to remove a procedure from the IPO List.

CY 2020 Procedure Proposed for Removal

For several years now, CMS has discussed the removal of total hip arthroplasty (THA) as well as partial hip arthroplasty (PHA) from the IPO List. Both procedures were on the original IPO List in CY 2001.

In response to the CY 2018 Proposed Rule, several surgeons and other stakeholders believe that, “given thorough preoperative screening by medical teams with significant experience and expertise involving hip replacement procedures, the THA procedure could be provided on an outpatient basis for some Medicare beneficiaries.”

CMS stated in the CY 2018 OPPS/APC Proposed Rule that “Both PHA and THA need to be tailored to the individual patient’s needs. Patients with a relatively low anesthesia risk and without significant comorbidities who have family members at home who can assist them may likely be good candidates for an outpatient PHA or THA procedure…on the other hand, patients with multiple medical comorbidities, aside from their osteoarthritis, would more likely require inpatient hospitalization and possible postacute care in a skilled nursing facility or other facility.”

CMS believes that CPT code 27130 (Arthroplasty, acetabular and proximal femoral prosthetic replacement (total hip arthroplasty) with or without autograft or allograft) meets criterion 2 and 3 for removal from the IPO List and “believe that appropriately selected patients could have this procedure performed on an outpatient basis.” Therefore, CMS is proposing the following:

• Remove THA from the IPO List, and
• Assign the THA procedure (CPT code 27130) to C-APC with status indicator “J.”

Solicitation of Comments for Potential Removal of Procedures from IPO List

CMS has received several comments on additional codes believed to meet the criterion for removal from the IPO List. CMS is seeking comments on the removal of the following procedures from the IPO List.

• CPT 22633: Arthrodesis, combined posterior or posterolateral technique with posterior interbody technique including laminectomy and/or discectomy sufficient to prepare interspace (other than for decompression), single interspace and segment; lumbar
• CPT 22634: Arthrodesis, combined posterior or posterolateral technique with posterior interbody technique including laminectomy and/or discectomy sufficient to prepare interspace (other than for decompression), singe interspace and segment; lumbar; each additional interspace and segment
• CPT 23265: Laminectomy for excision or evacuation of intraspinal lesion other than neoplasm, extradural; cervical
• CPT 63266: Laminectomy for excision or evacuation of intraspinal lesion other than neoplasm, extradural; thoracic
• CPT 63267: Laminectomy for excision or evacuation of intraspinal lesion other than neoplasm, extradural; lumber
• CPT 63268: Laminectomy for excision or evacuation of intraspinal lesion other than neoplasm, extradural; sacral.

Short Inpatient Hospital Stays

It’s hard to believe come this October, it will have been six years since CMS finalized the Two-Midnight Rule clarifying when an inpatient admission is considered reasonable and necessary for purposes of Medicare Part A payment in the FY 2014 IPPS/LTCH PPS Final Rule.

This policy established a benchmark for when a patient is considered appropriate for inpatient hospital admission and payment. CMS also clarified that “when a beneficiary enters a hospital for a surgical procedure not designated as an inpatient-only (IPO) procedure as described in 42 CFR 419.22(n), a diagnostic test, or any other treatment, and the physician expects to keep the beneficiary in the hospital for only a limited period of time that does not cross 2 midnights, the services would be generally inappropriate under Medicare Part A.”

In the CY 2016 OPPS/ASC Final Rule, CMS revised the previous rare and unusual exceptions policy “and finalized a proposal to allow for case-by case exceptions to the 2-midnight benchmark, whereby Medicare Part A payment may be made for inpatient admissions where the admitting physician does not expect the patient to require hospital care spanning 2 midnights, if the documentation in the medical record supports the physician’s determination that the patient nonetheless requires inpatient hospital care.” The following criteria are relevant to making this determination:

• Complex medical factors such as history and comorbidities;
• The severity of signs and symptoms;
• Current medical needs; and
• The risk of an adverse event.

Proposed Change for Medical Review of Certain Inpatient Hospital Admissions under Medicare Part A for CY 2020 and Subsequent Years

The 2-Midnight benchmark is applicable once procedures have been removed from the IPO list. These surgical claims are also subject to initial medical reviews of claims for short-stay inpatient admissions conducted by the Beneficiary and Family-Centered Care Quality Improvement Organization (BFCC-QIO).

BFCC-QIO’s may “refer a provider to the Recovery Audit Contractors (RACs) for further medical review due to exhibiting persistent noncompliance with Medicare payment policies, including, but not limited to:

• Having high denial rates;
• Consistently failing to adhere to the 2-midnight rule; or
• Failing to improve their performance after QIO educational intervention.”

For CY 2020 and subsequent years, CMS is “proposing to establish a 1-year exemption from site-of-service claim denials, BFCC-QIO referrals to RACs, and RAC reviews for “patient status” (that is, site-of-service) for procedures that are removed from the IPO list under the OPPS beginning on January 1, 2020. We encourage BFCC-QIOs to review these cases for medical necessity in order to educate themselves and the provider community on appropriate documentation for Part A payment when the admitting physician determines that it is medically reasonable and necessary to conduct these procedures on an inpatient basis. We note that we will monitor changes in site- of-service to determine whether changes may be necessary to certain CMS Innovation Center models.”

As a provider, it is important to be mindful that the exemption is specific to site-of-service claim denials. This exemption does not include medical necessity based on a National or Local Coverage Determination meaning irrespective of site-of-service, a short stay claim can still be denied for lack of documentation supporting medical necessity of the procedure.

Ambulatory Surgical Center (ASC) – Proposals

In the CY 2019 OPPS Final Rule, CMS finalized the “proposal to define a surgical procedure under the ASC payment system as any procedure described within the range of Category I CPT codes that the CPT Editorial Panel of the American Medical Association (AMA) defines as “surgery” (CPT codes 10000 through 69999) (72 FR 42478), as well as procedures that are described by Level II HCPCS codes or by Category I CPT codes or by Category III CPT codes that directly crosswalk or are clinically similar to procedures in the CPT surgical range that we have determined are not expected to pose a significant risk to beneficiary safety when performed in an ASC, for which standard medical practice dictates that the beneficiary would not typically be expected to require an overnight stay following the procedure, and are separately paid under the OPPS.”

CMS conducted a review of HCPCS codes currently paid under the OPPS but are not included on the ASC CPL. Based on this review, the following table highlights the proposed procedures to be added to the ASC CPL.

Specific to the proposal to add Total Knee Arthroplasty (TKA) to the ASC CPL, CMS notes in the Proposed Rule that “we agree with commenters that there is a small subset of Medicare beneficiaries who may be suitable candidates to receive TKA procedures in an ASC setting base on their clinical characteristics. For example, based on Medicare Advantage encounter data, we estimate over 800 TKA procedure were performed in an ASC on Medicare Advantage enrollees in 2016. We believe that beneficiaries not enrolled in an MA plan should also have the option of choosing to receive the TKA procedure in an ASC setting based on their physicians’ determinations.”

Further, CMS notes “TKA procedures are still predominantly performed in the inpatient hospital setting in CY 2018 (82 percent of the time) based on professional claims data, and we are cognizant of the fact that the majority of beneficiaries may not be suitable candidates to receive TKA in an ASC setting. We believe that appropriate limits are necessary to ensure that Medicare Part B payment will only be made for TKA procedures performed in an ASC setting when the setting is clinically appropriate. Therefore, we are soliciting public comment on the appropriate approach to provide safeguards for Medicare beneficiaries who should not receive the TKA procedure in an ASC setting.”

CMS is accepting comments on the proposed rule no later than 5 p.m. EST on September 27, 2019.

You can read more about the Proposed Rule in a CMS Fact Sheet at: https://www.cms.gov/newsroom/fact-sheets/cy-2020-medicare-hospital-outpatient-prospective-payment-system-and-ambulatory-surgical-center

The Proposed Rule is scheduled to be published in the Federal Register on August 9, 2019. In the meantime you can access a pre-published copy on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices-Items/CMS-1717-P.html?DLPage=1&DLEntries=10&DLSort=2&DLSortDir=descending

Finally, you can keep reading the Wednesday@One as we will have more information on the proposed rule next week.

As part of the Targeted and Probe and Educate (TPE) Process, Palmetto GBA hosts Quarterly Medical Review Hot Topic TPE Teleconferences. These sessions are open to all providers. The most recent Jurisdiction J (JJ) teleconference was on June 3, 2019. Questions and Answers (Q&A’s) from this session are now available on the Palmetto GBA JJ website.

Before opening the session up to questions, Palmetto reminded providers that the interaction between the Palmetto GBA reviewer and your hospital is a key component of the TPE model and “to ensure that the reviewer can reach out to the individual in your organization who can benefit from the educational contacts that we’re making, we do want to remind and encourage you to submit the name and phone number of that designate in your organization when you respond to the additional documentation request.”

Below are just a few of the Q&A’s from the teleconference where the MMP team has been asked similar questions from our clients.

Question: We are in TPE review and received claim denials, but haven’t received a letter yet. Should we wait until the reviewer calls before submitting an appeal?

Answer: The appeal process has not changed. You are notified of appeal rights the date you receive the electronic remittance advice of the finalized claim. You have 120 days to request an appeal from the denial date, which is the date of the remittance advice. Therefore, you should not wait until the TPE review letter and subsequent education call.

Question: How many ADRs are requested from a facility? If we have 35 patients and we receive 30 ADRs, is that normal?

Answer: The TPE model is set so that a sample of between 20 and 40 claims are requested to be reviewed per provider. The number of claims chosen is based on the denial rate associated with that service or the probability of claims being sampled improperly. This is all taken into account prior to setting the edit and we usually sample low for most providers. If the service error rate or probability of improper payment for that service is very high; we’ll sample high. Without knowing the exact service and all other information associated with your edit, then 30 claims is a normal sample size.

Question: It seem like the ADRs are sporadic, is there a length of time it takes for each sampling?

Answer: It is dependent upon the provider and claim submission. If you have a higher volume of a certain type of claim, we are able to sample faster. If the other services are provided at a lower frequency; then it is a more sporadic build and it will take longer to meet the 20–40 claim sample.

Question: Is there an overall error rate to determine whether we need to proceed to the next round?

Answer: We wait until the reviews are final before making those decisions. What we're looking for is a claim denial rate or charge denial rate — either one that is greater than 20 percent. If 20 percent or more of your claims are denied; then we are going to progress you. If 20 percent or more of your total charges are denied for the entire sample, then we will progress you to the next round.”

In a related CMS TPE Q&A's document, they answer the question of what is the error percentage that qualifies as a “high denial rate?” CMS’ responded that “the error percentage that qualifies a provider/supplier as having a high denial rate varies based on the service/item under review. The Medicare Fee-For-Service improper payment rate for a specific service/item or other data may be used in this determination, and the percentage may vary by MAC. It is important to note that the determination of whether a provider/supplier moves on to additional rounds of review is based upon improvement from round to round, with education being provided during and after each round in order to help the provider/supplier throughout the process.”

I encourage you to read the complete Q&A document as it provides additional useful information such as where to find the list of active TPE medical review topics. Also, Palmetto GBA has two more teleconferences planned for 2019, September 3rd and December 2nd. For those interested in listening in, you can visit the Palmetto GBA Event Registration Portal TPE Teleconference Schedule webpage.

The June 26th edition of the Wednesday@One included the article Palmetto Posts a Series of DRG Education Articles by Debbie Rubio. Debbie provided highlights of recently posted DRG specific articles that Palmetto GBA, the Medicare Administrative Contractor (MAC) for Jurisdictions J and M has been posting on their CERT Topics webpage (JJ Part A CERT General Information or JM Part A CERT General Information).

Palmetto GBA has continued to post DRG specific articles. Today we highlight new DRG Articles that have been posted, including highlights from each of the articles.  

DRG 003: Mechanical Ventilation

• Provides clinical findings for when a mechanical ventilator should be considered (i.e., Respiratory rate > 30/min, inability to maintain arterial oxygen saturation > 90% with fractional inspired oxygen (Fio2) > 0.60).
• Lists the ICD-10-PCS procedure codes for consecutive number of hours receiving respiratory ventilation.
• Billing, compliance and reimbursement guidance when reporting mechanical ventilation (i.e., calculate the duration of time in hours, not days).

DRG 207: Respiratory System Diagnoses with Ventilator Support >96 Hours

• Provides an example of improper billing.
• Offers tips for accurate billing of DRG 207.
• Cites the Officer Inspector General (OIG) report Medicare Improperly Paid Hospitals for Beneficiaries Who Had Not Received 96 or More Consecutive Hours of Mechanical Ventilation.

DRGs 453, 454, 455: Combined Anterior/Posterior Spinal Fusion with MCC, with CC and without CC/MCC

• Provides a list of ICD-10-PCS procedure codes for Anterior Spinal Fusion and Posterior Spinal Fusion, noting “assignment to one of the combined spinal fusion MS-DRGs requires that a code from each list be reported.”
  

DRG 560: Aftercare, Musculoskeletal System and Connective Tissue with CC

• Palmetto notes this DRG does not include complications of an internal orthopedic device (DRG codes 495-499) or local excision and removal of internal fixation devices (DRG codes 494-499).
• Provides the top three ICD-10-CM Diagnosis Codes and ICD-10-PCS procedure codes used with this DRG.

DRG 627: Thyroid, Parathyroid and Thyroglossal Procedure without CC/MCC

• Provides anatomy and physiology discussion of the thyroid and parathyroid glands.
• Discusses a thyroglossal duct cyst procedure.
• Provides tips to meet medical necessity of admissions for procedures and surgeries including guidance that “when patients are admitted for the sole purpose of performing the procedure(s), the inpatient admission will be denied if documentation does not support the need for intense post-operative treatment warranting inpatient admission.”

DRG 627 represents an inpatient admission where no major comorbidity/complication (MCC) or comorbidity/complication (CC) was coded. Since Palmetto indicates the admission would be denied when the sole purpose of the admission was for the procedure, I was curious to see the data on patient volumes. The table below highlights the volume of claims, average charges, average actual payment and average length of stay by state in calendar year 2018.

As of July 8th, 2019 Palmetto GBA has posted nineteen DRG specific articles. Currently only Psychoses (DRG 885) and Renal Failure (DRG 682) have come under scrutiny in the Targeted Probe and Educate (TPE) Program. It will be interesting to follow and see what DRGs may become part of the TPE Program in the future.

Sometimes providers do not pay as much attention to the Medicare documentation requirements for diagnostic tests as they do for therapeutic services. There are several reasons for this. Diagnostic tests generally do not pay as much as therapeutic services, they are less likely to have a coverage policy, the documentation required is not as extensive as the documentation requirements for therapeutic services, and they are less likely to be reviewed by Medicare contractors. Therefore, the financial risk, even if some claims are reviewed, is not that significant for an individual provider. For Medicare however, due to the large volumes of diagnostic services, overpayments could result in significant costs.

The Medicare Comprehensive Error Rate Testing (CERT) program contractor audits random claims to determine if the Medicare Administrative Contractors (MACs) are paying claims appropriately. This means the CERT contractor looks at all types of claims, including those for diagnostic tests. WPS, the MAC for Jurisdictions 5 and 8, recently published an article containing documentation reminders related to CERT denials of diagnostic tests. Those documentation reminders are:

• “Only the treating physician, nurse practitioner, clinical nurse specialist or physician assistant can sign and date an order.
• The order must specify the exact test(s) ordered. Stating “x-ray” is not sufficient.
• The physician or non-physician must document the medical necessity in a signed and dated progress note.
• Medicare will not consider unsigned and/or undated orders; this includes laboratory requisition forms.
• Providers cannot use a signature attestation statement used in place of an unsigned order.”

These are the basics of which every provider should already be aware. But the article states the CERT contractor has “noted significant error findings for diagnostic services.” So, where do providers go wrong? First, nurses in a physician’s office cannot sign an order. Physicians and non-physician practitioners may delegate the writing of orders to others in the office, but they have to actually be the ones to validate and sign the orders. Remember that Medicare contractors do not accept late signatures or signature attestations for orders. Unsigned orders are “ignored” by Medicare reviewers – an unsigned order is the same as a non-existent order. Orders and progress notes describing the orders must be specific – for example, a progress note that states “labs ordered” or “x-rays ordered” is not sufficient.

The other big issue for diagnostic tests besides signed and dated orders is documentation supporting the medical necessity of the test. Years ago, if you had a signed and dated order that included a diagnosis or a diagnosis code, that was sufficient for medical necessity. These days, most Medicare reviewers want to also see the documentation from the physician, such as an office progress note, describing the medical necessity for the test. And remember any physician progress notes submitted to a Medicare contractor also have to be signed and dated by the practitioner. The good thing about CERT reviews is that the CERT contractor generally communicates the need for any additional documentation needed and gives the provider several chances to submit that before denying the claim.

Some other diagnostic services are also being targeted by other Medicare reviewers and entities. For example, Novitas (JH/JL MAC) is looking at cardiovascular nuclear medicine testing, sleep testing is part of the OIG Work Plan, and the Recovery Auditors (RACs) have complex reviews involving the medical necessity/coding of chest x-rays and the medical necessity of transthoracic echocardiography.

One new complex issue recently approved by all of the Recovery Auditors is for the diagnostic test Computed Tomography (CT) Coronary Angiography. The issue details reiterate the documentation reminders discussed above -

“All diagnostic tests, including Computed Tomography (CT) Coronary Angiography, must be ordered by the physician who is treating the beneficiary, for a specific medical problem and who uses the results in the management of the beneficiary's specific medical problem. Tests not ordered by the physician who is treating the beneficiary are not reasonable and necessary. The physician who orders the service must maintain documentation of medical necessity in the beneficiary's medical record. Examinations performed for a purpose other than treatment or diagnosis of a specific illness, symptoms, complaint, or injury, as part of a routine physical checkup are excluded from coverage.”

How can hospitals ensure compliance with the signature and medical necessity requirements of diagnostic tests without undue effort? Train hospital personnel who first encounter orders for diagnostic testing to reject or obtain corrected orders when order requirements are not met – unsigned orders, orders not dated, orders lacking diagnoses, non-specific orders, etc. This could be the Scheduling, Registration, or Ancillary departments, for example. Hopefully, the practice of only accepting appropriate orders will encourage your physicians and practitioners to get it right the first time. On the back end, if a Medicare reviewer requests claims for diagnostic tests ensure all the required documentation is sent to the reviewer. The request for records should detail the specific medical record elements the reviewer needs. If required, contact the ordering physician’s office to obtain office progress notes for submission to the Medicare contractor.

With a little effort, denials of diagnostic tests can be eliminated or at least, minimized. Though not always a large financial impact, every penny helps and proactive processes also reduce the costs of additional time and effort.

There are no MAC Medical Review Activity updates for this month.

Another good resource for Providers is the CMS YouTube presentation Provider Minute: The Importance of Proper Documentation at https://www.youtube.com/watch?v=10pmw4czf08.

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

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

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

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

DRG 266 - Endovascular Cardiac Valve Replacement with MCC

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

DRG 460 – Spinal Fusion

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

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

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

DRG 313 – Chest Pain

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

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

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

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

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

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

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

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

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

DRG 057 – Degenerative Nervous System Disorders W/O MCC

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

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

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

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

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

DRG 312 – Syncope and Collapse

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

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

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

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

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

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

I have really good intentions. I plan to do this and plan to do that, but sometimes “the best-laid plans of mice and men often go awry.” This is often simply a failure on my part to follow through, but other times, things happen that impede my plans. This can happen to anyone – rain on the day of a planned outdoor outing, an injury that prevents a planned activity, or extenuating circumstances that prevent a planned medical procedure.

The problem with planned medical procedures that have to be canceled is that the hospital often has already invested resources into preparing for the planned service. Thankfully, Medicare has a means to report canceled services that allows the hospital to recoup some or all of their expenses through the use of modifiers. It is incumbent on the hospitals to appropriately use these modifiers and maintain documentation in their medical records that support their use. As with all reimbursements, there is a risk that payments may be made when not appropriate. A couple of weeks ago, Medicare approved a new issue for the Recovery Auditors (RACs) regarding “Discontinued Procedure Prior to the Administration of Anesthesia: Coding and Documentation Requirements.” This is to be a complex review, meaning the RACs will request and review medical record documentation to determine if payment was appropriate. The review is for Ambulatory Surgical Centers (ASCs) and outpatient hospitals. As of the date of this article, none of the RACs have posted this issue on their Approved Issues websites. Also note that at this time, the link for the details of the issue on the CMS RAC Approved Issues webpage is not working.

However, the instructions for the use of modifiers for discontinued services can be found in Chapter 4 of the Medicare Claims Processing Manual, section 20.6.4. There are two modifiers for services which require the use of anesthesia and one modifier for services that do not require anesthesia. According to the manual reference above, “Modifiers provide a way for hospitals to report and be paid for expenses incurred in preparing a patient for a procedure and scheduling a room for performing the procedure where the service is subsequently discontinued.”

For the modifiers for services requiring anesthesia (modifiers -73 and -74), anesthesia is defined as:

• Local anesthesia,
• Regional blocks,
• Moderate sedation/analgesia (“conscious sedation”),
• Deep sedation/analgesia, or
• General anesthesia.

Modifier -73 is used when procedures requiring anesthesia are terminated prior to administration of anesthesia.  Other considerations for using modifier -73 include:

• Termination is due to extenuating circumstances or to circumstances that threatened the well-being of the patient.
• Termination occurs after the patient had been prepared for the procedure (including procedural pre-medication when provided), and has been taken to the room where the procedure was to be performed.
• Procedures reported with modifier -73 will be paid at 50% of the full OPPS payment amount.
• Payment for device-intensive procedures (device offset amount exceeds 30% of the procedure’s mean coast) reported with modifier -73 will be reduced by 100% of the device offset amount prior to applying the additional payment adjustments.
• Documentation should clearly indicate the reason the procedure is being canceled and support that the patient was prepped and taken to the procedure room.

Modifier -74 is used when procedures requiring anesthesia are terminated after the induction of anesthesia or after the procedure was started (e.g., incision made, intubation started, scope inserted). Other facts about modifier -74 include:

• Termination is due to extenuating circumstances or to circumstances that threatened the well-being of the patient.
• Modifier -74 may also be used to indicate that a planned surgical or diagnostic procedure was discontinued, partially reduced or cancelled at the physician's discretion after the administration of anesthesia.
• Procedures reported with modifier -74 will be paid at the full OPPS payment amount.
• Documentation should clearly indicate the reason the procedure is being canceled and support that the patient received anesthesia and include the progress of the procedure.

Modifier -52 is used to indicate partial reduction, cancellation, or discontinuation of services for which anesthesia is not planned. For modifier -52,

• The patient has been prepared and taken to the room where the procedure is to be performed.
• Procedures reported with modifier -52 will be paid at 50% of the full OPPS payment amount.
• Documentation should clearly indicate the reason the procedure is being canceled and support that the patient was prepped and taken to the procedure room.
• This modifier is often used for radiologic procedures that cannot be completed as planned.

NOTE: The elective cancellation of a procedure should not be reported.

When things do not work out as planned, it is good to have a back-up plan, or in the case of medical procedures, a way to recoup your cost. Just make sure you code, document, and bill appropriately.

Social Determinants of Health (SDOH) are economic and social conditions (i.e., food insecurity, homelessness) that can impact an individual’s health status. As the number of Social Determinants of Health (SDOH) increases the potential for a patient to have poorer health and increased healthcare utilization also increases.

In the May 2, 2019 issue of mlnconnects, CMS included the following tools that organizations can use to measure these factors to help achieve health equity:

• Z codes from ICD-10-CM: Group of codes within the ICD-10 (diagnostic) codes that help capture a patient’s socioeconomic and/or psychosocial needs
• Accountable Health Communities Health-Related Social Needs Screening Tool: Identify needs related to social determinants
• Protocol for Responding to and Assessing Patients' Assets, Risks, and Experiences (PRAPARE) Tool: - Opens in a new window  : Collect the data needed to better understand and act on patients’ social determinants of health
• Health Leads Screening Toolkit - Opens in a new window  : Comprehensive way to assess patients for adverse social determinants

In the newsletter, CMS went on to indicate they are proposing that some data elements specific to SDOH’s has been proposed in several post-acute care provider settings to help “strengthen our understanding of the relationship between social determinants of health and health care use across diverse populations, allowing us to develop solutions and better connect patients to much needed services.”

As a reminder, the SDOH Z-code Z59.0 Homelessness is being proposed for a CC severity designation in the FY 2020 IPPS Proposed Rule. You can read more about this in a related article at: http://www.mmplusinc.com/news-articles/item/fy-2020-ipps-proposed-rule.

Over the past several weeks, MMP has written about what is being proposed in the FY 2020 IPPS Proposed Rule. Prior to its release, there seemed to be a high probability that the proposed rule would include additional guidance regarding hospital charges transparency. My assumption was based on the following from a March 8, 2019 Kaiser Health News article written by Steven Findlay:   

• This article highlighted the fact that CMS Administrator Seema Verma took to twitter in March by posting a Where’s the Price challenge? Specifically, she challenged consumers to visit the website of their local hospital to see if they could find the hospital’s pricing information posted in an electronic format, if you can’t she wants to know by sending her a tweet with the hashtag #WheresThePrice to help drive #PriceTransparency!
• The article ended by indicating a CMS spokesperson said the agency plans to issue its next regulation on hospital price transparency this year.

While this “next regulation” was not in the Proposed Rule, a May 29th Washington Post article, indicated that President Trump is preparing to issue an executive order regarding greater price transparency that is likely to be announced mid-June. While we wait, this article provides a very high level background of what CMS has required of hospitals in regards to price transparency to date and highlights what the data can tell you by utilizing COPD claims data from our sister company RealTime Medicare Data (RTMD).

Hospital Price Transparency Background

Initially, the Price Transparency requirement was included in the Affordable Care Act. Specifically, section 2718(e) of the Public Health Service Act, required that ‘‘[e]ach hospital operating within the United States shall for each year establish (and update) and make public (in accordance with guidelines developed by the Secretary) a list of the hospital’s standard charges for items and services provided by the hospital, including for diagnosis-related groups established under section 1886(d)(4) of the Social Security Act.’’

CMS reminded hospitals of their obligation to comply with this section of the Act and reiterated the following specific guideline for hospitals in the 2015 IPPS Final Rule:

• “Either make public a list of their standard charges (whether that be the chargemaster itself or in another form of their choice), or have a policy for allowing the public to view a list of those charges in response to an inquiry.” (FY 2015 IPPS/LTCH Final Rule (79 FR 50146)

Four years later in the 2019 IPPS Final Rule, CMS finalized their proposal, that effective January 1, 2019, hospitals will be required “to make available a list of their current standard charges via the Internet in a machine readable format and to update this information at least annually, or more often as appropriate.”

Subsequent to the FY 2019 Final Rule, CMS released two FAQ documents answering questions from the health care community. First was an October 2019 FAQ document followed by the December 2018 release of “Additional Frequently Asked Questions Regarding Requirements for Hospitals to Make Public a List of Their Standard Charges via the Internet” document.  

The second FAQ document included a question regarding what will happen if a hospital does not comply with this requirement. CMS answer was to reiterate “as indicated in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41686), specific additional future enforcement or other actions that we may take with the guidelines will be addressed in future rulemaking.”

Analyzing the Data

So, you have posted your chargemaster information on your website, do you know how you compare to your competitors? I turned to our sister company RealTime Medicare Data (RTMD) to take a look at what the average inpatient charges are for patients admitted with COPD. The specific parameters of the data review includes the following:  

• The data is for Medicare fee-for-service claims with a date of service from 10/1/2018 through 12/31/2018.
• The data is focused on one disease type, chronic obstructive pulmonary disease.
• DRG 190: Chronic Obstructive Pulmonary Disease with MCC
• DRG 191: Chronic Obstructive Pulmonary Disease with CC
• DRG 192: Chronic Obstructive Pulmonary Disease without CC/MCC
• Hospitals have been compared to their “Defined Market.” Simply stated, defined markets for a hospital are developed by the facility and all reports are from this perspective. It answers the question: Where did my patients go for treatment?
• Paid claims data was analyzed for five distinct Defined Markets:
• Huntsville Hospital in Huntsville, AL
• Mobile Infirmary in Mobile, AL
• MUSC in Charleston, SC
• UAB Hospital in Birmingham, AL
• University of Kansas Health System, St. Francis Campus

The following table highlights the variation in charges for the care of COPD patients.

For those interested, the links in the above table are to pdf downloads which provide a view of each of these hospital’s defined market average COPD charges.  

Additional Price Transparency Resources:

In November 2018 CMS launched new online tools displaying cost differences for certain surgical procedures (link to CMS press release: https://www.cms.gov/newsroom/press-releases/new-online-tool-displays-cost-differences-certain-surgical-procedures).

AHA Toolkit for Achieving Price Transparency

Guroo.com cost data includes 40M insured individuals and was created with the goal “to give you insight into health care costs and quality so you can be informed and get the most out of every dollar you spend” (www.guroo.com).

Kaiser Health News is a nonprofit news service covering health issues. It is an editorially independent program of the Kaiser Family Foundation, which is not affiliated with Kaiser Permanente.