Knowledge Base Category -

“The difference between the almost right word and the right word is really a large matter --- it’s the difference between the lightning bug and lightning.”- Mark Twain: Letter to George Bainton, October 15, 1888

In MMP’s article Case Mix Index: Beyond the Physician's Pen, our readers were introduced to the concepts of Medicare Severity Diagnosis-Related Groups (MS-DRGs), how an MS-DRG is assigned, Principal and Secondary diagnoses, Relative Weight (RW), and Case Mix Index (CMI). CMS defines CMI as a representation of the average diagnosis-related group (DRG) relative weight for that hospital. It is calculated by summing the DRG weights for all Medicare discharges and dividing by the number of discharges. CMIs are calculated using both transfer-adjusted cases and unadjusted cases.

We also likened the way a CMI is calculated to calculating a student’s Grade Point Average (GPA).

Formula for CMI: Sum of RWs ÷ Total Number of MS-DRGs = CMI
Formula for GPA: Sum of Grade Points ÷ Sum of Credit Hours = GPA

A higher CMI reflects a more complex patient population that required higher resource utilization. A higher GPA reflects a higher level of academic achievement by the student which required a higher focus on academic studies resulting in the student having a more complex understanding of the subject matter.

CMI Pain Points for Hospitals

This article focuses on CMI pain points for hospitals including understanding that a successful MS-DRG Program is a collaborative process, there are several reasons that a CMI can fluctuate, and that slight shifts in CMI can have a significant impact on your hospital finances.

Pain Point: Understanding that a successful MS-DRG Program is a Collaborative Process

For a hospital to be successful in obtaining the CMI that truly reflects their patient population is a collaborative effort between the Physician, Clinical Documentation Improvement Specialists and Professional Coders. Here are the specific roles each team member must fill to truly tell the patient’s story.

• The Physician’s Role: Tell the Patient’s Story by providing complete and accurate documentation of a patient’s Principal Diagnosis, comorbidities and complications, any procedures performed, the plan of care and the patient’s discharge status in the medical record.

• The Clinical Documentation Specialist’s Role: Interpret the documentation by performing concurrent medical record reviews and ask for clarity and/or accuracy of the clinical picture.  

• The Coder’s Role: May be concurrent medical record review or a retrospective review after discharge; also to ask queries when indicated. Ultimately, it is the Coding Professional’s role to translate documentation into codes for MS-DRG assignment.

Before moving on to the next Pain Point, it is important to note that CMS supports this collaborative process. In fact in the 2008 IPPS Final Rule CMS noted that they do “not believe there is anything inappropriate, unethical or otherwise wrong with hospitals taking full advantage of coding opportunities to maximize Medicare payment that is supported by documentation in the medical record. We encourage hospitals to engage in complete and accurate coding.”

AHIMA’s 2016 Practice Brief, Guidelines for Achieving a Compliant Query Practice, also supports the query process. Specifically, they note that a Physician Query is “a communication tool used to clarify documentation in the health record for accurate code assignment. The desired outcome from a query is an update of a health record to better reflect a practitioner’s intent and clinical though processes, documented in a manner that supports accurate code assignment.”

Pain Point: Recognizing Factors Leading to CMI Fluctuations

As a Clinical Documentation Specialist in the hospital, I can remember monthly operational review meetings where inevitably the Chief Financial Officer (CFO) wanted an explanation for the shift (positive or negative) in CMI and placed this responsibility solely on the Clinical Documentation Improvement Team. Quite a few years have passed since then and I am hopeful that this is no longer the case at your hospital. However, if it is, share this article with your CFO to help him/her understand that shifts in CMI can happen that are beyond a Coder or Clinical Documentation Specialists control.

A decrease in CMI may be reflective of:

• Non-specific Physician documentation,
• Increase in Medical Volume with a decrease in Surgical Volume as Surgical MS-DRGs in general are more resource intensive and will have a higher RW,
• Surgeons being on vacation;
• Inpatient admissions that could have been treated as an Outpatient, or
• Physicians being unresponsive to Coder and Clinical Documentation Specialists queries.
• Note, queries are asked to clarify documentation, not to question a physician’s clinical judgment.

An increase in CMI may be reflective of:

• Increase in surgical volume,
• Tracheostomy procedures that have an extremely high RW,
• Ventilator patients, or
• Improved physician response to queries resulting in improved documentation depicting the patient’s story.

Pain Point: Recognizing that Small Variances in CMI can Significantly Impact a Hospitals Finances

CMI shifts of even 0.1000 can have a significant impact on your hospital finances. To illustrate, the following table takes a look at the “We Care for You Hospital” which saw a decrease in their CMI of 0.1000 from FY 2015 to FY 2016.

The above example is just that, an example. In reality, surgeons go on vacation, surgical and medical volumes change, MS-DRGs are reassigned a new RW on an annual basis that may be higher or lower than the prior fiscal year, improved physician documentation can have a positive impact on your secondary diagnoses capture rate, and ICD-10 happened.

To validate there is more to CMI than meets the eye, I turned to our sister company RealTime Medicare Data (RTMD) to analyze Medicare Fee-for-service paid claims data. Specifically, I compared the Fiscal Year prior to ICD-10 implementation to the first full Fiscal Year after the October 1, 2015 ICD-10 implementation date. The following two tables contrasts the Top 10 MS-DRGs by RW, CMI, number of discharges and actual payment for the state of Alabama.

At the end of the day, accurate documentation captures the clinical severity of the patient that in turn can:

• Increase patient safety,
• Increase the accuracy of Quality measures,
• Decrease the risk of medical necessity denials,
• Result in more accurate Readmission and Mortality rates for your hospital,
• Impact physician and hospital profiles; and
• Support that your patients have received the right care, at the right time, at the right cost and in the right setting.

Resource:

Federal Register / Vol. 72, No. 162 / Wednesday, August 22, 2007 / Rules and Regulations / page 47180 at https://www.gpo.gov/fdsys/pkg/FR-2007-08-22/pdf/07-3820.pdf

Medicare requires that practitioners ordering or providing services authenticate their orders and other documentation notes. A simple enough concept, but sometimes it is the simple things that seem to trip us up. Medicare reviews often cite lack of physicians’ signatures on orders, procedure notes, diagnostic reports or progress notes as a documentation deficiency that could result in a denial of payment. A review of Medicare signature requirements is an excellent reminder of the basics of good documentation.

What forms of signatures are acceptable?

Signatures may be handwritten or electronic. Stamped signatures generally are not acceptable, but are permitted in the case of an author with a physical disability who can provide proof to a CMS contractor of inability to sign due to the disability.

Can signatures be added to documentation that is not signed?

No. Providers may not add late signatures to medical records beyond the short delay that occurs during the transcription process.

Medicare does not accept retroactive orders. If an order is unsigned and there are no signed progress notes that specify the tests/services being ordered, a Medicare reviewer will disregard the order. This will result in a documentation error, which may involve recoupment of an overpayment.

For other types of medical record documentation that lack a signature besides orders, an attestation statement from the author of the medical record may be submitted. An attestation may read as follows, though no specific format is required:

            “I, John R. Doe (printed name), hereby attest that the medical record entry for March 9, 2016 accurately reflects signatures/notations that I made in my capacity as M.D. when I treated/diagnosed the above listed Medicare beneficiary. I do hereby attest that this information is true, accurate and complete to the best of my knowledge and I understand that any falsification, omission, or concealment of material fact may subject me to administrative, civil, or criminal liability.”

Must orders for clinical diagnostic tests be signed?

No - but yes. The order for a clinical diagnostic test does not have to be signed. However, if the order itself is not signed, there must be medical documentation by the treating physician (e.g., a progress note) that he/she intended the clinical diagnostic test be performed. The documentation showing the intent that the test be performed must be authenticated by the author via a handwritten or electronic signature. It also must specify the tests ordered; simply saying “labs ordered” is not sufficient. And, a copy of this signed documentation must be submitted to the Medicare contractor in the case of a Medicare review.

What if a signature is illegible?

If there is a printed signature below the illegible signature, this is acceptable. Providers can also submit a signature log to address illegible signatures. A signature log should list the typed or printed name of the author associated with the author’s handwritten initials or signature. Note that providers may create and submit a signature log at any time. It is a good practice to maintain a signature log of all practitioners.

Another way to address illegible signatures is an attestation statement. The attestation must be signed and dated by the author of the medical record entry in order to be valid for Medicare medical review purposes. It also must contain sufficient information to identify the Medicare patient/beneficiary.

Must signatures be dated?

It depends. If Medicare regulations specify that a date is required for the particular type of documentation then it must be dated. For example, for rehabilitative therapy services, the Medicare Benefit Policy manual states, “Certification requires a dated signature on the plan of care or some other document that indicates approval of the plan of care.” Therefore, for therapy certifications, a dated signature is required.

If the Medicare regulations do not specify that a date is required, undated documentation may be acceptable. Documentation that is not dated is acceptable for medical review purposes if the reviewer is able to determine the date the service was performed and/or ordered based on other documentation in the record.

Since the issue of missing and illegible signatures continues to be a common error, Medicare provides a variety of resources addressing the requirements. Providers must get back to the basics of documentation by ensuring appropriate signatures are present.

• Medicare Signature Requirements – Educational Resources for Health Care Professionals: SE1419
• Medicare Signature Requirements Fact Sheet: Fact Sheet
• Chapter 3, Section 3.3.2.4, Medicare Program Integrity Manual
• Signature Guidelines for Medical Review Purposes: MM6698 

Hospitals are at T-7 days for the March 8, 2017 compliance date with the Notice of Observation Treatment and Implication for Care Eligibility Act (NOTICE Act). In the spirit of last minute preparations, this article is meant to reinforce key definitions, provide CMS responses to comments found in the 2017 IPPS Final Rule in the form of questions and answers and links to MOON resources.

Definitions

The MOON is intended to inform beneficiaries who receive observation services for more than 24 hours that they are outpatients receiving observation services and not inpatients, and the reasons for such status.

• Outpatient Defined
  The Medicare Claims Processing Manual (Pub. 100-04), Chapter 1, Section 50.3.1, defines an Outpatient as “a person who has not been admitted as an inpatient but who is registered on the hospital or critical access hospital (CAH) records as an outpatient and receives services (rather than supplies alone) directly from the hospital or CAH.”

• Observation Services
  Observation services are “services that are reasonable and necessary, specifically ordered by a physician or other nonphysician practitioner authorized by State licensure law and hospital staff bylaws to admit patients to the hospital or to order outpatient services, and meet other published Medicare criteria for payment.”
  
  “Individuals receiving observation services will always be registered as outpatients; however, not all outpatients receive observation services.”

• Decision to order Observation Services
  “By definition… the reason for ordering observation services will always be the result of a physician’s decision that the individual does not currently require inpatient services and observation services are needed for the physician to make a decision regarding whether the individual needs further treatment as a hospital inpatient or if the individual is able to be discharged from the hospital.” (Source: 2017 IPPS Final Rule referencing the Medicare Benefits Policy Manual (Pub. 100-02), Chapter 6, Section 20.6.)

Questions and Answers

Again, CMS’ responses to comments from the 2017 IPPS Final Rule have been formatted as Questions and Answers.

Question: Several commenters requested clarification as to whether the timeframe starts:

1. After services begin following the written order for observation services;
2. When related services commence if such services commence before the written order was executed and the patient occupies an outpatient bed count; or
3. Based on the documentation of when nursing care began.

Answer: CMS indicated “there may be times when an individual is subject to an order for observation services, but is not actually receiving observation services. For example, following an order for observation services in an emergency department, a hospital may need to wait to begin furnishing observation services until a bed is available for the patient. In this situation, services are considered initiated when observation services commence.”

They went on to clarify “that the start of observation services, for the purposes of determining when more than 24 hours of observation services have been received, is the clock time as documented in the patient’s medical record at which observation services are initiated (furnished to the patient) in accordance with a physician’s order.”

Question: Will time be counted as Billable or Elapsed Time?

Answer: CMS believes using elapsed time is most consistent with language in the NOTICE Act. “Therefore, for purposes of identifying the 24-hour timeframe for which an individual has received observation services, and thus is required by the NOTICE Act to receive notice by the hospital or CAH, observation time will be measured as the elapsed time in hours beginning at the clock time documented in the patient’s medical record, which coincides with the time that observation care is initiated in accordance with a physician’s order.”

Question: What if the Inpatient Admission occurs prior to delivery of the MOON?

Answer: As recommended by a commenter, CMS agrees that when “an inpatient admission occurs prior to delivery of the MOON, the MOON should be annotated with date and time of the inpatient admission. Therefore, we are requiring that, in the event that a patient is subsequently admitted as a hospital inpatient directly after receiving observation services for more than 24 hours, and the inpatient admission occurs prior to delivery of the MOON, the MOON be annotated with the date and time of the inpatient admission. Additional guidance regarding elements for the free text field of the MOON will be provided in the CMS Internet Only Manual.”

Question: How will the MOON work with the 2-Midnight Policy?

Answer: “The NOTICE Act requires hospitals to inform patients who have remained outpatients of the hospital and received observation services for more than 24 hours that they are not hospital inpatients and are subject to potentially different cost-sharing requirements and postacute care benefits than someone who has been admitted as an inpatient. We note that a scenario could arise whereby a patient is admitted to the hospital immediately after being a hospital outpatient receiving observation services for greater than 24 hours. In such a scenario, the inpatient admission may be payable under Medicare Part A under the 2-midnight policy and, as stated earlier, the hospital or CAH would still be required to furnish the MOON to the patient within 36 hours after the time the individual begins receiving observation services.”

Question: Can a Hospital or CAH deliver the MOON before an individual has received more than 24 hours of observation services as an inpatient?

Answer: Yes.

• This affords hospitals flexibility to deliver the MOON consistent with any applicable state law requiring notice within 24hrs.
  
  Note: “Hospitals and CAHs subject to State law notice requirements may also attach an additional page to the MOON to supplement the “Additional Information” section in order to communicate additional content required under State law, or may attach the notice required under State law to the MOON.”

• This allows hospitals and CAHs to spread out the delivery of the MOON and other hospital paperwork in an effort to avoid overwhelming and confusing beneficiaries.
  
  Note: CMS does not encourage delivery of the MOON at the initiation of outpatient observation services.

Question: Can the MOON form be altered?

Answer: No, because the MOON is a standard form approved by the Office of Management and Budget (OMB), Hospitals and CAHs are not permitted to alter the included language, only the information to be included in the free text fields.

The MOON must remain two pages, except as needed for the additional information field. The pages of the notice can be two sides of one page or one side of separate pages, but must not be condensed to one page.

Hospitals may include their business log and contact information on the top of the MOON. Text may not be shifted from page 1 to page 2 to accommodate large logos, address headers, or any other information.

Question: Can you use “drop down” boxes in the free text field for telling the patient why they are not an inpatient?

Answer: CMS indicates in the 2017 IPPS Final Rule, “We may consider, in the future, the other suggestions commenters made to improve the MOON, such as checkboxes with common reasons for the patient’s outpatient status or suggested narratives for insertion in this section.”

Question: If more space is needed for “Additional Information”, may a Hospital attach additional pages to the MOON?

Answer: Yes

Question: Can you (CMS) clarify the effect of a resident’s order for services on the counting of hours of observation care?

Answer: “To the extent that a resident is authorized by State licensure law and hospital staff bylaws to order outpatient services, once observation services are initiated in accordance with the resident’s order, the 24 hour time period will commence.”

Question: What do you do if the individual receiving the notice is unable to read its written contents and/or comprehend the required oral explanation?

Answer: As discussed in the proposed rule (81 FR 25134), an English language version of the proposed MOON was submitted to OMB for approval. We stated in the proposed rule that once we receive OMB approval, a Spanish language version of the MOON will be made available. If the individual receiving the notice is unable to read its written contents and/or comprehend the required oral explanation, we expect hospitals and CAHs to employ their usual procedures to ensure notice comprehension. (We refer readers, for example, to the Medicare Claims Processing Manual (Pub. 100–4), Chapter 30, Section 40.3.4.3., for similar existing procedures related to notice comprehension for the Advance Beneficiary Notice of Noncoverage (ABN).) Usual procedures may include, but are not limited to, the use of translators, interpreters, and assistive technologies. Hospitals and CAHs are reminded that recipients of Federal financial assistance have an independent obligation to provide language assistance services to individuals with limited English proficiency (LEP) consistent with section 1557 of the Affordable Care Act and Title VI of the Civil Rights Act of 1964. In addition, recipients of Federal financial assistance have an independent obligation to provide auxiliary aids and services to individuals with disabilities free of charge, consistent with section 1557 of the Affordable Care Act and section 504 of the Rehabilitation Act of 1973.”

Question: Does the beneficiary have appeal rights under the NOTICE Act?

Answer: No, “The MOON is a required informational/educational notice regarding patient status provided by a hospital or CAH when the beneficiary is still in the hospital or CAH and receives observation services as an outpatient for more than 24 hours. The MOON explains the current status of the patient as an outpatient and not an inpatient, in addition to the implications of being an outpatient receiving observation services. As we explained in the proposed rule, delivery of the MOON does not constitute an initial determination issued in response to a claim for benefits, and the MOON itself is not a notice of an initial determination (81 FR 25134). Furthermore, delivery of the MOON by a hospital or CAH does not constitute a denial of coverage of any services, and does not constitute a noncoverage decision with respect to post-hospital SNF care as asserted by the commenter. In fact, generally beneficiaries will still be receiving care when the MOON is delivered and will sometimes be formally admitted as inpatients after delivery of the MOON.

The NOTICE Act does not provide for appeal rights regarding the notice itself, which makes sense given the nature of the document, as explained above. The NOTICE Act also does not afford any new appeal rights beyond those already available (under section 1869 of the Social Security Act), nor does the NOTICE Act limit or restrict currently available appeal rights. Consistent with the legislation, the proposed rule did not propose to expand or limit appeal rights. For the reasons discussed above, we are not adopting the various recommendations with respect to amending the MOON to include appeal rights or an explanation of the lack of appeal rights.”

MOON and Condition Code 44

“In rare circumstances where a physician initially orders inpatient services, but following internal utilization review (UR) performed while the patient is hospitalized, the hospital determines that the services do not meet its inpatient criteria and the physician concurs with UR and orders the discontinuation of inpatient services and initiation of outpatient observation services (that is, a Condition Code 44 situation), we stated in the proposed rule that the MOON would be delivered as required by the NOTICE Act (when outpatient observation services have been ordered and furnished for more than 24 hours). If observation services are ordered when Condition Code 44 applies, the 24-hour time period for observation notification commences at the same time that observation services are initiated under a physician’s order, consistent with existing policy for observation services furnished to outpatients. (We refer readers to the Medicare Claims Processing Manual (Pub. 100–04), Chapter 1, Section 50.3.)

As discussed in the proposed rule and as stated in the notice announcing CMS Ruling CMS–1455–R (78 FR 16614), the Part B Inpatient Billing Ruling, in cases where reviewers find that an inpatient admission was not medically reasonable and necessary after the beneficiary is discharged, and thus, not appropriate for payment under Medicare Part A, the beneficiary’s patient status remains ‘‘inpatient’’ as of the time of the inpatient admission. The patient’s status is not changed to outpatient because the beneficiary was formally admitted as an inpatient, and there is no provision to change a beneficiary’s status after he or she is discharged from the hospital. Where CMS denies a claim after the beneficiary has been discharged because the inpatient admission was not medically reasonable and necessary, there would be no need to issue the MOON because the individual’s status remains inpatient, despite the fact that the inpatient admission was improper. Similarly, where a hospital determines through UR after a beneficiary is discharged that his or her inpatient admission was not reasonable and necessary and the hospital bills the services that were provided on a Medicare Part B claim, the NOTICE Act notification requirements would not apply for these individuals because their status would also remain inpatient.” (Excerpt from page 281-282 2017 IPPS Final Rule pdf document)

MOON Resources

• CMS 2017 IPPS Final Rule web page: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/FY2017-IPPS-Final-Rule-Home-Page.html
• See section III. L. Hospital and CAH Notification Procedures for Outpatients Receiving Observation Services (pages 277 – 292 Final Rule pdf document)

• CMS Transmittal 3695, Date: January 20, 2017
  Subject: medicate Outpatient Observation Notice (MOON) Instructions: https://www.cms.gov/Medicare/Medicare-General-Information/BNI/Downloads/CR9935-MOON-Instructions.pdf

• CMS MLN Matters® Number: MM9935: Medicare Outpatient Observation Notice (MOON) Instructions: https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/MM9935.pdf

• CMS Beneficiary Notices Initiative web page: https://www.cms.gov/Medicare/Medicare-General-Information/BNI/index.html?redirect=/BNI/

• CMS Product No. 11435: Are You a Hospital Inpatient or Outpatient? If You Have Medicare – Ask! at: https://www.medicare.gov/Pubs/pdf/11435.pdf

My grandson is in elementary school and the first thing he reports to his parents each afternoon is how he behaved in school. His teacher uses a color scale, on which the student moves up or down depending on good or bad behavior – green is good, blue is better, but red – oh no! The one excuse I am sure his parents would never accept for bad behavior is that he did not know the rules. From an early age, life has rules and it is our responsibility to know, understand, and follow those rules. Such is the case when submitting claims and accepting payment from Medicare for healthcare services.

In November 2016, CMS released a transmittal that updates the section on Provider Liability in Chapter 3 of the Medicare Financial Management Manual. Specifically, the update adds new reasons for why a provider, physician, or supplier should have known certain services were noncovered. Section 90 of this chapter begins by stating “A provider is liable for overpayments it received unless it is found to be without fault.” To be without fault, the provider must have:

• Exercised reasonable care in billing for, and accepting Medicare payment,
• Made full disclosure of all material facts,
• Had a reasonable basis for assuming payment was correct based on Medicare instructions, regulations, and other facts, and/or
• Promptly communicated with the Medicare contractor if there was a reason to question the payment.

A provider may know or should have known a payment is incorrect if there is a Medicare policy or rule that specifically prohibits the payment. Prior to this updated transmittal, the reasons listed in the manual when a provider should have known about a policy or rule were 1) the policy or rule is in the provider manual or in Federal regulations, 2) the Medicare contractor provided general notice to the medical community concerning the policy or rule, or 3) the Medicare contractor gave written notice of the policy or rule to the particular provider. Transmittal 275 (MLN Matters Article MM9708) expands the term provider to be “provider, physician, or supplier” and adds the following reasons they should be aware of a particular Medicare policy or rule.

The provider, physician, or supplier:

1. Was previously investigated or audited as a result of not following the policy or rule;
2. Previously agreed to a Corporate Integrity Agreement as a result of not following the policy or rule;
3. Was previously informed that its claims had been reviewed/denied as a result of the claims not meeting certain Medicare requirements which are related to the policy or rule; or
4. Previously received documented training/outreach from CMS or one of its contractors related to the same policy or rule.

As a provider, what is your responsibility related to overpayments and ensuring reasonable care in billing and accepting Medicare payment?

Know the Rules

If the rules were static, this would still be a huge challenge. There are laws, regulations (e.g. Code of Federal Regulations), and sub-regulatory guidance (e.g. Medicare policy manuals). Medicare has an expansive website with information in every corner, including an educational section (Medicare Learning Network – MLN). I recommend providers subscribe to the CMS and OIG (Office of Inspector General) list serves at a minimum. Also providers should have a thorough knowledge of the Medicare Benefit Policy, Claims Processing, and National Coverage Determination (NCD) manuals. Then there is the website of your Medicare Administrative Contractor (MAC) and their Local Coverage Determinations (LCDs) and coverage articles. It is an overwhelming amount of information to digest so I also recommend subscribing to newsletters from some reputable healthcare consultants/educators who can target key issues and provide relevant information in an easy to read, understandable format. Hopefully you find this Wednesday@One newsletter serves this function well.

Keep Up with Rule Changes

Unfortunately, the rules are not static – they are ever changing at a rapid pace. The list serves, websites, and newsletters mentioned above should address the changes also. More specifically, watch the Medicare transmittals, most of which are converted into the easier to read and understand format of MLN Matters articles. The transmittals provide updates of Medicare sub-regulatory guidance. All the MACs have a news section on their websites for updates and specific webpages related to coverage policies and medical review. There are major rule changes on an annual basis for the Inpatient Prospective Payment System (IPPS), Outpatient Prospective Payment System (OPPS), Physician Fee Schedule, etc. Medicare provides fact sheets related to these rules and numerous independent newsletters also offer summaries and in-depth analyses of the key issues.

Understand the Rules

Interpreting the rules correctly is no small task. Once again all of the references mentioned above are helpful but a focus on Medicare review activities to understand Medicare expectations is extremely helpful here. The medical review webpage areas of the MAC websites, OIG reports, the Medicare Quarterly Compliance Newsletter, etc. often provide more granular details on what is expected to comply with certain rules. These issues are also the more “at risk” issues and a good place to focus your internal efforts as well.

Know Your Facility History of Billing Compliance

Notice that the third existing reason why providers “should have known” and all four of the new reasons relate to the provider’s own history of compliance. Facilities need to know if they have been notified, investigated, audited, had claims denied, or educated due to noncompliance with a particular policy or rule. This also includes having been put under a Corporate Integrity Agreement (CIA). If so, your facility has no excuse for not knowing these rules.

Have Appropriate Processes

Knowing the rules is of no benefit unless you correctly apply the rules to your facility’s practices. I will not say much about this, because after all, this is what providers do, so you know how to address it. Internal policies and procedures to ensure appropriate processes are necessary as is employee education and training.

Internal Communication

The importance of communication between departments cannot be overemphasized. For example, who within the facility knows the compliance history referenced above and who within the facility is responsible for keeping up with rule changes and disseminating that information to the affected departments? A team approach is required for education and establishing processes. Be sure to include all key stakeholders.

Checks and Rechecks

Oversight of processes and compliance with the rules is also necessary. Such oversight can be in the form of internal monitoring, internal audits, or audits with contracted external consultants or auditors. This process should start by identifying risk areas and developing an overall compliance audit plan. I recommend considering the issues Medicare agencies and entities are reviewing (such as the OIG Annual Work Plan, MAC medical review topics, etc.)

The tasks of knowing, understanding and implementing processes to keep up with all of the Medicare policies and rules may seem overwhelming, but it is the cost of doing business with Medicare. Like in elementary school, you have to know the rules and you have to comply or you do not get a star for the day.

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

Recovery Auditor Finding

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

Transfer Policy Background

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

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

PACT Policy and Discharge Status Codes

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

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

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

How to Avoid this Problem

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

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

“Observation care is a well-defined set of specific, clinically appropriate services, which include ongoing short term treatment, assessment, and reassessment, that are furnished while a decision is being made regarding whether patients will require further treatment as hospital inpatients or if they are able to be discharged from the hospital.”

Under the two-midnight rule, hospitals may approach the decision for observation services a little differently. When a patient presents to the hospital, the first decision for the physician is, “does the patient require care in a hospital setting?” If the answer to this question is yes, then for patients with an expectation of a two-midnight stay an inpatient admission is appropriate. If the physician does not think the patient will require two midnights of care in the hospital or is unsure, then observation services are generally appropriate. When a patient who is receiving observation services approaches a second midnight in the hospital, a change to inpatient status is appropriate if the patient still requires care in a hospital setting. Considering this, it should be rare that a patient receives observation services beyond a second midnight.

Observation services are not appropriate for preparation time for outpatient testing, or for routing pre-op or post-operative services. Even with the two-midnight rule, observation services still remain a period of treatment or monitoring in order to make a decision concerning the patient’s admission or discharge.

When to Start

“Observation time begins at the clock time documented in the patient’s medical record, which coincides with the time that observation care is initiated in accordance with a physician’s order.”

What does this mean exactly? First, there must be a physician’s order for observation before observation services can begin. Observation orders cannot be back-dated. For example, when condition code 44 is used to change a patient’s status from inpatient to outpatient, observation services do not begin until there is an order for observation (which would be after the change to outpatient status). Observation services would begin at the time that order was written.

If the patient is already actively receiving care, such as in the example above, then observation begins at the time the observation order is written. For patients being transferred to a room after an observation order is written, observation care may not begin until the patient begins to receive evaluation and/or care in the hospital room.

Rounding

Observation hours are rounded to the nearest hour. This means everything from 9:01 through 9:29 is rounded to 9:00 and from 9:31 to 9:59 is rounded to 10:00. 9:30 is ambiguous and could be rounded either way. The example in the Medicare manual is a patient receiving observation services from 3:03 p.m. until 9:45 p.m. – this equals 7 hours of obs.

Concurrent Active Monitoring

“Observation services should not be billed concurrently with diagnostic or therapeutic services for which active monitoring is a part of the procedure (e.g., colonoscopy, chemotherapy).”

Medicare does not provide a list or any examples beyond the two noted in the statement above for what constitutes a procedure with “active monitoring.” This is something the hospital will have to determine, but generally includes near-constant monitoring by a nurse or other health care professional. If such a procedure occurs during a period of observation, the hospital must subtract or “carve out” that time from the total observation hours. This could be accomplished by using the beginning and ending time of the procedure, or Medicare allows hospitals to use an “average length of time” for interrupting procedures and deduct that amount of time from the observation hours.

When to End

“Observation time ends when all medically necessary services related to observation care are completed.”

Observation ending time may not coincide with the time of the physician’s discharge order. Sometimes necessary medical care may end prior to the discharge order or care may extend beyond the time of the discharge order. If after care has ended, the patient is waiting for transportation home, the waiting time should not be included in observation time.

Observation hours end when an order is written to admit the patient as an inpatient. The observation services will be bundled into the inpatient claim, but for accurate records this is when observation counting stops.

Why Bother?

Isn’t observation packaged, so why does the counting of observation hours matter? Well, yes, but no. The outpatient claim line item for observation services, billed with HCPCS code G0378, is a packaged service and receives no separate payment. However, if certain criteria are met, an observation comprehensive APC is paid for the associated visit code, such as any level ED visit, an outpatient clinic visit, or a direct referral for observation services. If 8 or more hours of observation are billed with a visit code and without a primary procedure (status indicator J1) on the claim or surgical procedure (status indicator T) on the day of or before obs, then the claim qualifies for an observation comprehensive APC payment. For 2016, the unadjusted national Medicare payment for the obs C-APC is $2174.14. Definitely worth following the rules.

Hospitals have been dealing with observation services for a long time and most providers probably have their systems down on how to accurately count and report observation services. But a reminder of the rules never hurts. 

Fall is my favorite time of year. How could it not be when kids are going back to school, college football returns, and although the summer heat lingers longer than I would like, we have some spectacular fall foliage. Everything I love about fall at the most basic is consistent from year to year but in truth brings about tremendous change. Maybe it’s my oldest nephew entering high school this year, or the first weekend of regular season football shattering the predictions in the football standings - at the end of the day one constant of fall is change.

The one constant I have seen in health care for more years than I care to think about now is change. Exhibit A: the ICD-10-CM Official Guidelines for Coding and Reporting updates go into effect every fall on October 1st with the start of a new CMS Fiscal Year. In the update, narrative changes appear in bold text. However, with the FY 2017 Guidelines there are some significant changes, of which one in particular has sparked a lot of debate in the Coding and Clinical Documentation Community.

Key NARRATIVE Changes

“With”

“The word “with” should be interpreted to mean “associated with” or “due to” when it appears in a code title, the Alphabetic Index, or an instructional note in the Tabular List. The classification presumes a causal relationship between the two conditions linked by these terms in the Alphabetic Index or Tabular list. These conditions should be coded as related even in the absence of provider documentation explicitly linking them, unless the documentation clearly states the conditions are unrelated. For conditions not specifically linked by these relational terms in the classification, provider documentation must link the conditions in order to code them as related. The word “with” in the Alphabetic Index is sequenced immediately following the main term, not in alphabetical order.”

Code assignment and Clinical Criteria

The New addition to the guidelines, “Code assignment and Clinical Criteria,” is the “hot button” that has sparked much debate as to what this really means.  

“The assignment of a diagnosis code is based on the provider’s diagnostic statement that the condition exists. The provider’s statement that the patient has a particular condition is sufficient. Code assignment is not based on clinical criteria used by the provider to establish the diagnosis.”

This guidance poses a real dilemma for Professional Coders and Clinical Documentation Improvement (CDI) Specialists as we include clinical indicators when constructing a query for the physician and government contractors have become notorious for denying a claim for lack of clinical indicators in the documentation supporting the coded diagnosis. Unfortunately, I have yet to see, read or hear about a good solution for this guidance.

Zika virus infections

1. “Code only confirmed cases
   Code only a confirmed diagnosis of Zika virus (A92.5, Zika virus disease) as documented by the provider. This is an exception to the hospital inpatient guidelines Section II, H.
   
   In this context, “confirmation” does not require documentation of the type of test performed; the physician’s diagnostic statement that the condition is confirmed is sufficient. This code should be assigned regardless of the stated mode of transmission.
   
   If the provider documents “suspected”, “possible” or “probable” Zika, do not assign code A92.5. Assign a code(s) explaining the reason for encounter (such as fever, rash, or joint pain) or Z20.828, Contact with and *suspected) exposure to other viral communicable diseases.”

Hypertension

With the transition to ICD-10 last October there was one code for Hypertension (I-10). There was no longer a way to differentiate when it was actually a “hypertensive crisis” or “hypertensive emergency.”

As of October 1, 2016, they are back.

“Hypertensive Crisis
Assign a code from category I16, Hypertensive crisis, for documented hypertensive urgency, hypertensive emergency or unspecified hypertensive crisis. Code also any identified hypertensive disease (I10-I15). The sequencing is based on the reason for the encounter.”

Documented Pressure Ulcer Stage

There are two new changes for 2017. First being for patients admitted with pressure ulcers documented as healing. “For ulcers that were present on admission but healed at the time of discharge, assign the code for the site and stage of the pressure ulcer at the time of admission.”

The second change is for the patient admitted with pressure ulcer evolving into another stage during the admission. “If a patient is admitted with a pressure ulcer at one stage and it progresses to a higher stage, two separate codes should be assigned: one code for the site and stage of the ulcer on admission and a second code for the same ulcer site and the highest stage reported during the stay.”

While I have highlighted a few of the key narrative changes, it is worth noting that there are over 40 narrative changes in the guidelines. Looking for specific changes also made me realize how many times the guidelines advise “when documentation is unclear the provider should be queried” (26 times).

From the CDI Specialist perspective the guidelines provide a good foundation for understanding and appreciating the coding conventions to which Coding Professionals must adhere. They are also an essential read for anyone preparing for the Certified Clinical Documentation Specialist (CCDS) exam.

I encourage Coding Professionals and CDI Specialists to read the entire document and be on the lookout for how to register for our fall Inpatient Coding Updates Webinar that is held annually in October. 

The phrase “waste not, want not” means to use one’s resources wisely in order to always have plenty and avoid poverty. Although Medicare pays for drug wastage in certain circumstances, they also expect healthcare providers and suppliers to “use drugs or biologicals most efficiently, in a clinically appropriate manner.” But when waste cannot be avoided, starting next year, CMS is requiring reporting that will allow them to identify and monitor billing and payment for discarded drugs under Medicare Part B.

As promised, CMS has released a list of frequently asked questions concerning the use of the JW modifier. The JW modifier indicates that a portion of a drug or biological was discarded or wasted. Currently the use of the JW modifier is at the discretion of the jurisdictional Medicare Administrative Contractors (MACs). For example, Cahaba GBA, MAC for Jurisdiction JJ (Alabama, Georgia, and Tennessee) does not require the reporting of the JW modifier for wasted drugs/biological. In order to be more consistent and better able to track drug wastage, CMS is requiring the use of the JW modifier nationally effective January 1, 2017, in order for providers/suppliers to seek payment for drug/biological wastage.

The JW modifier is to be used on Part B drug claims for discarded drugs and biologicals (hereafter referred to as drugs) when they are in single-use vials or packaging. If uncertain, the information as to whether a drug or biological is single use can be found in the manufacturer’s packaging insert. The discarded drug amount is the amount of a single use vial or other single use package that remains after administering a dose/quantity of the drug to a Medicare patient. Multiple use vials/packaging are not eligible for Medicare payment for discarded amounts.

The JW modifier will mainly be used for reporting drug wastage in physician offices and hospital outpatient departments (including Critical Access Hospitals (CAHs)). Some suppliers such as pharmacies may need to report the JW modifier, but it is unlikely they will have much, if any, drug wastage. Hospital Part B inpatient claims on a 12X type of bill would also report the JW modifier for separately payable drugs. Eligible and participating 340B providers are not exempt from use of the JW modifier.

One of the main things to remember about the use of the JW modifier is that it only applies to drugs that are separately payable, for example drugs with an OPPS status indicator of G (pass-through drugs) and K (separately payable non-pass-through drugs). In the outpatient hospital setting, this applies to separately payable drugs billed for surgical patients, patients in the emergency room, patients in outpatient clinics, and other outpatients receiving separately payable drugs.

This means that drugs that are not separately paid by Medicare do not require the use of the JW modifier. For example:

• Drugs provided in rural health clinics (RHCs) and federally qualified health centers (FQHCs) since these are not separately paid,
• Drugs provided during hospital inpatient admissions (Part A) that are paid under the Inpatient Prospective Payment System (IPPS),
• Drugs given to an outpatient but combined to an inpatient Part A claim under the 3 day payment window rule,
• Packaged drugs, such as drugs with an OPPS status indicator of “N” or an SI of “K” that are bundled with comprehensive APCs (see OPPS Addendum D1 for explanation of services packaged with comprehensive APCs)
• Overfill wastage (CMS has made it clear in the past that overfill, which is any amount of drug greater than the amount identified on the package, is not billable.)

CMS also exempts drugs paid under the Part B drug Competitive Acquisition Program (CAP) although at this time the CAP remains on hold so there is no current list of CAP medications.)

One of the questions not clearly addressed by the FAQs is whether providers and suppliers are required to report drug wastage or can they elect to absorb the cost of discarded drugs. The guidance states that the JW modifier is used in order to obtain payment for the discarded amount of a drug or biological and is not needed if no discarded drug is being billed to the payer. So IF you are going to bill and expect payment for drug wastage, you must use the JW modifier January 1, 2017 and after.

In using the JW modifier on and after January 2017, providers must report the amount of the discarded drug on a separate claim line with the JW modifier. The unit field should reflect the quantity of drug discarded. If the provider is unable to quantify the amount of drug wasted, the JW modifier is not required. Do not report one claim line with combined units for amount of drug administered and wasted. Also realize if the amount of drug administered or the amount of drug wasted is less than the amount described by one HCPCS billing unit, then it is not necessary to use the JW modifier.

Prior to January 1, 2017, providers must follow the directions of their MACs or they may voluntarily report the JW modifier. Providers should check their MACs websites for any specific direction concerning the reporting of the JW modifier prior to the mandatory January 1, 2017 requirement. For example, here is some guidance from a few MACs and you can see that current instructions differ from MAC to MAC – that is why it is important to determine your MAC’s guidance for use of the JW modifier in 2016.

Cahaba GBA - Cahaba DOES NOT require the use of the JW modifier at this time. If providers wish to designate that a portion of a single dose vial is being discarded, please continue to bill the injection on ONE line and add the JW modifier to the procedure code and document the discarded amount in the patents records. Bill for the complete vial, even though part of the vial is being discarded. DO NOT split the billing to two claim lines: one with the JW and one without.

First Coast - For billing purposes, First Coast does not require the use of modifier JW prior to January 1, 2017. Drug wastage is billed by combining on a single line the wastage and administered dosage amount.

NGS - National Government Services does NOT require the use of the JW modifier at this time but providers may choose to use it. Claims will process appropriately with or without the JW modifier. If the JW modifier is used; it should be appended to a separate line for the HCPCS code (separate from the amount administered) indicating the amount (in units) discarded.

One thing CMS and all the MACs agree on is that wastage of the drug must be documented in the patient’s medical record to support the billing of discarded drugs. Here is CMS’s answer to the FAQ concerning documentation of drug wastage:

“CMS expects that providers and suppliers will maintain accurate (medical and/or dispensing) records for all beneficiaries as well as accurate purchasing and inventory records for all drugs that were purchased and billed to Medicare. General guidance on documentation is available in MLN Matters SE 1316. Providers and suppliers should also check with the MAC that processes their Part B drug claims in case additional information on billing and documentation is available at the local level.”

For complete details concerning the JW modifier, see the following CMS guidance:

• MLN Matters Article MM9603,
• Section 40 of Chapter 17 of the Medicare Claims Processing Manual,
• CMS’s FAQ document
• Any information on the JW modifier on your local MAC’s website

Providers should use drugs wisely and efficiently, but if wastage cannot be avoided and the provider wants to be paid for it, then understanding the proper use, reporting and documentation for the JW modifier is critical.

“The only way to make sense out of change is to plunge into it, move with it, and join the dance.”- Alan Watts

This week we conclude our in-depth analysis of the 2017 IPPS Final Rule by taking a plunge into finalized changes to Medicare Severity Diagnosis-Related Group (MS-DRG) Classifications broken down by Major Diagnostic Categories (MDCs).

Pre-Major Diagnostic Category (Pre MDC)

Total Artificial Heart Replacement

The proposal to assign ICD-10-PCS procedure codes 02RK0JZ and 02RL0JZ as a code cluster to ICD–10 Version 34 MS–DRGs 001 and 002 (Heart Transplant or Implant of Heart Assist System with and without MCC, respectively) to accurately replicate the Version 32 ICD–9–CM based MS–DRG logic of procedure code 37.52 was finalized.

MDC1: Diseases and Disorders of the Nervous System

Mechanical Complication Codes

In the proposed rule CMS agreed with a requestor that ICD-10-CM diagnosis codes T85.610A, T85.620A, T85.630A, and T85.690A describe conditions occurring within the nervous system. These ICD-10 diagnosis codes describe concepts not previously captured by the ICD-9-CM. As a result, CMS finalized the reassignment of these four ICD–10–CM diagnosis codes from MDC 21 under MS–DRGs 919, 920, and 921 to MDC 1 under MS–DRGs 091, 092, and 093. The official code titles were revised after publication of the Proposed Rule. The new ICD-10 code titles are as follow:

MDC 4: Diseases and Disorders of the Ear, Nose, Mouth and Throat

Reassignment of Diagnosis Code R22.2

The proposal to reassign ICD–10–CM diagnosis code R22.2 (Localized Swelling, Mass and Lump, Trunk) from MDC 4 to MDC 9 under MS–DRGs 606 and 607 (Minor Skin Disorders with and without MCC, respectively) was finalized.

MDC 5: Diseases and Disorders of the Circulatory System

Implant of Loop Recorder

The proposal to re-designate the following four ICD–10–PCS codes from non-O.R. to O.R. procedures within Appendix E of the Version 34 ICD–10 MS–DRG Definitions Manual was finalized.

• 0JH602Z (Insertion of monitoring device into chest subcutaneous tissue and fascia, open approach);
• 0JH632Z (Insertion of monitoring device into chest subcutaneous tissue and fascia, percutaneous approach);
• 0JWT02Z (Revision of monitoring device in trunk subcutaneous tissue and fascia, open approach); and
• 0JWT32Z (Revision of monitoring device in trunk subcutaneous tissue and fascia, percutaneous approach).

Endovascular Thrombectomy of the Lower Limbs

CMS agreed with a commenter that procedures describing endovascular thrombectomy of the lower limbs should be assigned to ICD–10 MS–DRGs 270, 271, and 272. CMS finalized their proposal to restructure the ICD–10–PCS MS–DRG configuration and add 20 of the proposed ICD–10–PCS code translations (which would capture procedures describing endovascular thrombectomy of the lower limbs) to ICD–10–PCS Version 34 (The code table can be found on page 56804 of the final rule.)

Pacemaker Procedure Codes Combinations

The proposal to modify the ICD-10 MS-DRG logic to capture a wider range of possible reported procedure codes describing procedures involving both a pacemaker device and leads was finalized.

Transcatheter Mitral Valve Repair with Implant

Proposals finalized:

• Collapse MS-DRGs 228, 229, and 230 from three severity levels by deleting MS-DRG 230 and revising MS-DRG 229,
• ICD-9-CM procedure code 35.97 and the cases reporting ICD-10-PCS procedure code 02UG3JZ (Supplement mitral valve with synthetic substitute, percutaneous approach) will be reassigned from MS–DRGs 273 and 274 to MS–DRG 228 and revised MS–DRG 229,
• The title of revised MS-DRG 229 is now “Other Cardiothoracic Procedures without MCC”; and
• The title for MS–DRG 228 will remain “Other Cardiothoracic Procedures with MCC.”

MDC 6: Diseases and Disorders of the Digestive System

Excision of Ileum

CMS received a request to analyze an MS-DRG replication issue. Under ICD–9, procedure code 45.62 (Other partial resection of small intestine) was assigned to MS–DRGs 329, 330 and 331 (Major Small and Large Bowel Procedures with MCC, with CC, and without CC/MCC, respectively).

Under the current ICD–10 MS–DRGs Version 33, ICD–10–PCS procedure code 0DBB0ZZ (Excision of ileum, open approach) is assigned to MS–DRGs 347, 348, and 349 (Anal and Stomal Procedures with MCC, with CC, and without CC/MCC, respectively). The requestor indicated that, despite the variation in terms for ‘‘excision’’ and ‘‘resection’’ between the two code sets, the surgical procedure to remove a portion of the small intestine, whether it is the ileum, duodenum, or jejunum, has not changed and should not result in different MS–DRG assignments when translated from ICD–9–CM to ICD–10. CMS agreed that this is a replication error.

Additionally, CMS reviewed the MS–DRG assignments for ICD–10–PCS code 0DBA0ZZ (Excision of jejunum, open approach) and determined the MS–DRG assignment for this code resulted in the same replication error.

As a result of analysis, CMS proposed and finalized the reassignment of ICD–10–PCS codes 0DBB0ZZ and 0DBA0ZZ from MS–DRGs 347, 348, and 349 (Anal and Stomal Procedures with MCC, with CC, and without CC/MCC, respectively) to MS–DRGs 329, 330, and 331 (Major Small and Large Bowel Procedures with MCC, with CC, and without CC/MCC, respectively), effective with the ICD–10 MS–DRGs Version 34 on October 1, 2016.

MDC 7: Diseases and Disorders of the Hepatobiliary System and Pancreas

Bypass Procedures of the Veins

A requestor noted that currently, ICD–10–PCS procedure code 06183DY (Bypass portal vein to lower vein with intraluminal device, percutaneous approach) is assigned to only MDC 5 (Diseases and Disorders of the Circulatory System) and MS–DRGs 270, 271, and 272 (Other Major Cardiovascular Procedures with MCC, with CC, and without CC/MCC, respectively) under ICD–10 MS–DRGs Version 33.

The requestor stated that the code should also be assigned to MDC 7 and MS–DRGs 405, 406, and 407 to be consistent with the ICD–9–CM MS–DRGs Version 32. CMS analyzed this issue and agreed and finalized the assignment of ICD–10–PCS procedure code 06183DY to MDC 7 and MS–DRGs 405, 406, and 407 for FY 2017.

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

Combination Codes for Removal and Replacement of Knee Joints

CMS examined knee joint revision combination codes that are not currently assigned to MS–DRGs 466, 467, and 468 (Revision of Hip or Knee Replacement with MCC, with CC, and without CC/MCC, respectively) in ICD–10 MS–DRGs Version 33 and identified 58 additional combinations that also should be included so that the same logic is used in the ICD–10 version of the MS–DRGs as is used in the ICD–9–CM version. CMS finalized the addition of these 58 new code combinations that capture the joint revisions to the Version 34 MS DRG structure for MS–DRGs 466, 467, and 468, effective October 1, 2016. The table of new combination codes begins on page 56821 of the Final Rule.

Decompression Laminectomy

Currently, under ICD–10–PCS, the procedure describing a decompression laminectomy is coded for the ‘‘release’’ of a specified area of the spinal cord. These decompression codes are assigned to MS–DRGs 028, 029, and 030 (Spinal Procedures with MCC, with CC or Spinal Neurostimulators, or without CC/MCC, respectively) and to MS–DRGs 518, 519, and 520 (Back and Neck

Procedures Except Spinal Fusion with MCC or Disc Device or Neurostimulator, with CC, or without CC/MCC, respectively) in the ICD–10 MS–DRGs Version 33.

A commenter brought attention to the fact that codes describing release of specific peripheral nerve are assigned to MS–DRGs 515, 516, and 517 (Other Musculoskeletal System and Connective Tissue O.R. Procedures with MCC, with CC, and without C/MCC, respectively). The commenter suggested that a subset of these codes also be assigned to MS–DRGs 028 through 030 and MS–DRGs 518 through 520 for clinical coherence purposes.

CMS agreed with the commenter’s suggestion and CMS proposed to reassign 18 ICD–10–PCS procedure codes from MS–DRGs 515 through 517 to MS–DRGs 028 through 030 and MS–DRGs 518 through 520 under the ICD–10 MS–DRGs Version 34.

This change was delayed in the Final Rule, “until the ICD-10 claims data are available, because we will have the ability to better analyze the impact of reassigning the specified codes according to their anatomic locations, as well as receive clarification regarding which specific codes should be taken under consideration for reassignment.”

Lordosis

A replication issue involving four diagnosis codes related to lordosis (excessive curvature of the lower spine) was discovered in MS-DRGs 446,457, and 458 (Spinal Fusion Except Cervical with Spinal Curvature or Malignancy or Infection or Extensive Fusions with MCC, with CC, and without CC/MCC).

These MS–DRGs contain specific logic requiring a principal diagnosis describing a spinal curvature, a malignancy, or infection or a secondary diagnosis that describes a spinal curvature disorder related to another condition.

Under the ICD–10 MS–DRGs Version 33, the following diagnosis codes were listed on the principal diagnosis list and the secondary diagnosis list for MS–DRGs 456, 457, and 458:

After consideration CMS finalized maintaining these four codes in the logic for the principal diagnosis list but to remove them from the secondary diagnosis list.

MDC 13: Diseases and Disorders of the Female Reproductive System

Pelvic Evisceration

Current GROUPER logic for MS–DRGs 332, 333, and 334 (Rectal Resection with MCC, with CC and without CC/MCC, respectively) under MDC 6 (Diseases and Disorders of the Digestive System) and for MS–DRGs 734 and 735 (Pelvic Evisceration, Radical Hysterectomy and Radical Vulvectomy with CC/MCC and without CC/MCC, respectively) under MDC 13 (Diseases and Disorders of the Female Reproductive System) include a ‘‘cluster’’ of ICD–10–PCS procedure codes that describe pelvic evisceration.

A ‘‘cluster’’ is the term used to describe a circumstance when a combination of ICD–10–PCS procedure codes is needed to fully satisfy the equivalent meaning of an ICD–9–CM procedure code for it to be considered a plausible code translation.

Under ICD–10–PCS, users are instructed to code separately the organs or structures that are actually removed and for which there is a distinctly defined body part. Therefore, the case of a patient who undergoes a pelvic evisceration (exenteration) that involves the removal of the sigmoid colon and rectum would have each of those procedure sites (sigmoid colon and rectum) coded and reported separately (in addition to the procedure codes displayed in the cluster). In this scenario, if the principal diagnosis is a condition from the MDC 6 diagnosis list, the case would group to MS–DRGs 332, 333, and 334, regardless of the code cluster. In other words, it would not be necessary to retain the code cluster describing procedures performed on female pelvic organs in MDC 6.

Therefore, CMS proposed and finalized removing the procedure code cluster for pelvic evisceration procedures from MDC 6 under the ICD–10 MS–DRGs Version 34. The cluster would remain in ICD–10 MDC 13 under MS–DRGs 734 and 735 only.

MDC 19: Mental Diseases and Disorders

CMS finalized the proposal to the title of MS-DRG 884 (Organic Disturbances and Mental Retardation) to “MS-DRG 884 (Organic Disturbances and Intellectual Disability)” to reflect the current terminology to describe the condition.

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

Logic of MS-DRGs 945 and 946 (Rehabilitation with CC/MCC and without CC/MCC, respectively)

CMS received several requests to examine the Grouper logic for MS-DRGs 945 and 946. The requestors were concerned that ICD–9–CM codes that clearly identified an encounter for rehabilitation services such as procedure codes V57.89 (Care involving other specified rehabilitation procedure) and V57.9 (Care involving unspecified rehabilitation procedure) were not included in ICD–10–CM Version 33. In addition, the requestors pointed out that ICD–10–CM has significantly changed the guidelines for coding of admissions/encounters for rehabilitation.

In a Final Rule response CMS indicates that they “agree with the commenters that the issue of any updates to ICD–10–PCS guidelines should be considered along with any proposed MS–DRG updates because updated guidelines may impact code reporting. We welcome any suggestions on how to update the ICD–10–PCS guidelines. These suggestions should be sent to ICDProcedureCodeRequest@cms.hhs.gov. We plan to take any proposed ICD–10–PCS rehabilitation guideline updates to a future meeting of the ICD–10 Coordination and Maintenance Committee so that the public can provide input on any new rehabilitation guideline.”

As mentioned at the start, this article highlights MDC specific MS-DRG changes. This is a small dive into the coding changes found in the Final Rule. MMP, Inc. encourages you to review the Final Rule and to be on the lookout for our Annual Fall Inpatient Webinar focused on Coding Changes in October. 

“I’m late! I’m late! For a very important date!”- The White Rabbit in the 1951 Disney Classic Alice in Wonderland

Much like the White Rabbit, CMS was a day late in the release of the Fiscal Year (FY) 2017 Inpatient Prospective Payment System (IPPS) Final Rule. Late or not, CMS noted in a related Fact Sheet that this rule finalizes policies that continue their commitment to increasingly shift Medicare payments from volume to value. This article focuses on final revisions made to the general acute care hospital Quality Programs.

HOSPITAL INPATIENT QUALITY REPORTING (IQR) PROGRAM

The Hospital IQR Program is a pay-for-reporting program established by the Medicare Prescription Drug, Improvement, and Modernization Act. General acute care hospitals successfully participating in this program and are also meaningful electronic health record (EHR) users will receive approximately 0.95 percent increase in their operating payment rates. The Final Rule finalized changes to this program for FY 2018 and FY 2019 payment determinations.

FY 2018 Program Year: Two Claims Based Measure Refinements

PN Payment: Hospital-Level, Risk-Standardized 30-Day Episode-of-Care Payment Measure for Pneumonia (NQF #2579)

This measure cohort will be expanded to include hospitalizations for patients with

• Principal discharge diagnosis of pneumonia, including not only viral or bacterial pneumonia, but also aspiration pneumonia; and
• Principal discharge diagnosis of sepsis (but not severe sepsis) with a secondary diagnosis of pneumonia (including viral or bacterial pneumonia and aspiration pneumonia) coded as present on admission (POA).

PSI 90: Patient Safety and Adverse Events Composite Measure (NQF #0531): The modified PSI 90 composite was adopted for the IQR Program. See table 3 for further detail.

FY 2019 Program Year: 15 Measures Removed & Four New Measures Added

CMS finalized the proposal to remove 15 measures for the FY 2019 payment determination and subsequent years (see Table 1).

Table 1: Measures Finalized for Removal for the FY 2019 Payment Determination and Subsequent Years

‍Four New Measures to be added to the Hospital IQR Program for the FY 2019 Payment Determination and Subsequent Years.

Table 2: New Measures Finalized for FY 2019 Payment Determination and Subsequent Years

CMS notes that the new “measures capture Medicare payment for services related to the episode procedure and take into account beneficiaries’ clinical complexity as well as geographic payment differences. We proposed these clinical episode-based measures to supplement the Hospital IQR Program’s Medicare Spending per Beneficiary (MSPB) Measure….the measures also support our mission to provide better healthcare for individuals, better health for populations, and lower costs for healthcare.”

In response to stakeholder concerns that these measures overlap with the Medicare Spending Per Beneficiary (MSPB) Measure, CMS notes “that unlike the overall MSPB measure, the clinical episode-based payment measures assess payment variation at the procedure level and only include services that are clinically related to the named episode procedure (for example, the spinal fusion measure includes inpatient admissions for “medical back problems” that occur following the initial spinal fusion procedure since the admission is likely a result of complications from the initial procedure).”

HOSPITAL VALUE BASED PURCHASING (VBP) PROGRAM

The Act instructs the Secretary to reduce the base operating DRG payment amount for a hospital for each discharge in a fiscal year by an applicable percent to fund this budget neutral program. CMS indicates in Table 16A of the Final Rule that the estimated amount available for value-based incentive payments to hospitals for FY 2017 is approximately $1.8 billion. Actual amounts will be displayed in Table 16B that is expected to be posted in October of this year.

FY 2019 Program Year: New Domain Name and Expansion of location for CAUTI and CLABSI

The Patient-and-Caregiver-Centered Experience of Care/Care Coordination Domain will become simply the Person and Community Engagement Domain.

The NHSN (National Health Safety Network) CAUTI (Catheter-Associated Urinary Tract Infection) and CLABSI (Central Line-Associated Blood Stream Infections) outcome measures will include select ward (non-ICU) locations. “This expansion of the CAUTI and CLABSI measures aligns with the Hospital IQR Program. It also aligns with the HAC Reduction Program, which adopted the expansion of the CAUTI and CLABSI measures beginning with its FY 2018 program year (80 FR 49576 through 49578).”

FY 2021 Program Year: Two New Condition-Specific Payment Measures and Expansion of a 30-Day Mortality Measure Cohort

Two New Measures

Hospital-Level, Risk-Standardized Payment Associated with a 30-Day Episode-of-Care for Acute Myocardial Infarction (AMI) (NQF #2431), and

Hospital-Level, Risk-Standardized Payment Associated with a 30-Day Episode-of-Care for Heart Failure (HF) (NQF #2436).

Expansion of 30-Day-PN Mortality Cohort

Also for the FY 2021 Program Year, CMS finalized expansion of the cohort used for the 30-Day-PN Mortality measure to include patients with a principal discharge diagnosis of pneumonia, patients with a principal diagnosis of aspiration pneumonia and patients with a principal diagnosis of sepsis with a secondary diagnosis of pneumonia coded as present on admission (POA).

FY 2022 Program Year: CMS finalized the addition of Hospital 30-Day, All-Cause, Risk-Standardized Mortality Rate (RSMR) Following CABG Surgery (NQF #2554) (MORT-30-CABG) measure.

HOSPITAL ACQUIRED CONDITIONS (HAC) REDUCTION PROGRAM

This program creates an incentive for reducing the incidence of HACs by adjusting payments to hospitals in the worst performing quartile for HACs. CMS finalized the following five changes to the existing HAC Reduction Program policies:

• Clarified data requirements for Domain 1 (PSI-90),
• Established National Health Safety Network (NHSN) Centers for Disease Control and Prevention (CDC) Healthcare Associated Infection (HAI) data submission requirements for newly opened hospitals,
• Established performance periods for the FY 2018 and 2019 HAC Reduction Program,
• Adopted the refined Patient Safety Indicator (PSI) 90: Patient Safety for Selected Indicators Composite Measure (NQF #0531) beginning with the FY 2018 payment determination.
• Changed the Program scoring methodology from the current decile-based scoring to a continuous scoring methodology.

FY 2018 Program Year: Finalized Refinements to PSI 90

• First, the name of the PSI 90 measure will change to “Patient Safety and Adverse Events Composite: (NQF #0531).
• Second, the modified PSI 90 measure will include three new indicators (PSI-09, PSI-10 and PSI-11),
• Third, two Indicators will be re-specified in the modified PSI 90.
• PSI-12 Perioperative Pulmonary Embolism (PE) or Deep Vein Thrombosis (DVT) Rate no longer includes ECMO procedures in the denominator or isolated deep vein thrombosis (DVT) of the calf veins in the numerator.
• PSI 15 Accidental Puncture and Laceration Rate is now limited to discharges with an abdominal/pelvic operation, rather than including all medical and surgical discharges.
• Fourth, PSI-07 Central venous catheter-related blood stream infections rate will be removed in the modified PSI 90.
• Fifth, weighting of component indicators will be based not only on volume of each patient safety and adverse events, but also the harms associated with the events.

PSI 90: To Expand from 8 to 10 Indicators for FY 2018 Program

Table 3: PSI 90: Patient Safety and Adverse Events Composite (NQF #0531) for FY 2018

‍HOSPITAL READMISSIONS REDUCTION PROGRAM (HRRP)

This program requires a reduction to a hospital’s based operating DRG payment to account for excess readmissions associated with the applicable conditions. For FY 2017 and subsequent years, a hospital’s potential reduction will be based on a risk-adjusted readmission rate during a three-year period for the following six conditions:

• Acute Myocardial Infarction (AMI),
• Heart Failure (HF),
• Pneumonia (PN),
• Chronic Obstructive Pulmonary Disease (COPD),
• Total Hip Arthroplasty/Total Knee Arthroplasty (THA/TKA), and
• New Condition for FY 2017 (pursuant to prior rulemaking): All-Cause, Unplanned Readmission Following Coronary Artery Bypass Graft (CABG) Surgery (inclusion of this condition was finalized in the FY 2015 IPPS/LTCH Final Rule).

CMS is updating the public reporting policy so that excess readmission rates will be posted to the Hospital Compare website as soon as feasible following the hospitals’ preview period.

More Than Half a Billion Dollars in Readmission Penalties for FY 2017

Set to begin October 1, 2016, Jordan Rau of Kaiser Health News (KHN)reports that readmission penalties are set to reach a new high of more than half a billion dollars in payments being withheld in the coming fiscal year. To see if and how much your hospital will be penalized you can get the data in KHN’s Article Medicare's Readmission Penalties Hit New High.

Resources

CMS Fact Sheet Announcing release of 2017 IPPS Final Rule: https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2016-Fact-sheets-items/2016-08-02.html

2017 IPPS Final Rule (Display copy): https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/FY2017-IPPS-Final-Rule-Home-Page-Items/FY2017-IPPS-Final-Rule-Regulations.html?DLPage=1&DLEntries=10&DLSort=0&DLSortDir=ascending