Knowledge Base Category -

October 1st has seen its share of historical events. Before looking forward, let’s take a look back at a few highlights from this date in history.

October 1, 1800: Spain ceded Louisiana to France in a secret treaty.

October 1, 1851: First Hawaiian stamp is issued.

October 1, 1880: First electric lamp factory opened by Thomas Edison.

October 1, 1890: Yosemite National Park forms.

October 1, 1908: Ford puts the Model T car on the market at a price of US$825.

October 1, 1942: Little Golden Books (children books) begins publishing.

October 1, 1955: “Honeymooners” premieres.

October 1, 1982: Sony launches the first consumer compact disc player (model CDP-101).

October 1, 1989: U.S. issues a stamp, labeling an Apatosaurus as a brontosaurus.

October 1, 2013: U.S. federal government shuts down non-essential services after it is unable to pass a budget measure.

As we are now 29 days from October 1st, it appears that the transition to ICD-10 won’t be shut down. While ICD-10 is and should be a main focus for hospitals right now, a gentle reminder that October 1st is also the start of the Centers for Medicare and Medicaid Services (CMS) fiscal year and the implementation of the Fiscal Year (FY) 2016 Inpatient Prospective Payment System (IPPS) Final Rule. This article highlights some of the key MS-DRG changes finalized in the Inpatient Prospective Payment System (IPPS) 2016 Final Rule that will also begin on October 1, 2015.

Documentation and Coding Adjustment

CMS is required to recover $11 billion by 2017 to fully recoup documentation and coding overpayments related to the transition to the MS-DRG system that began in FY 2008. CMS finalized another -0.8 percent adjustment as begun in FY 2014 to continue the recoupment process.

Changes to Preventable Hospital Acquired Conditions (HACs), Including Infections for FY 2016

CMS finalized the proposal to implement the ICD-10-CM/PCS Version 33 HAC list to replace the ICD-9-CM Version 32 HAC list. The HAC code list translations from ICD-9-CM to ICD-10-CM/PCS are located in Appendix I of the ICD-10-CM/PCS MS-DRG Version 32 Definitions Manual that can be located in the Downloads section of the ICD-10 MS-DRG Conversion Project Web site at: https://www.cms.gov/Medicare/Coding/ICD10/ICD-10-MS-DRG-Conversion-Project.html

Finalized Changes to Specific MS-DRG Classifications for FY 2016

MDC 5: Diseases and Disorders of the Circulatory System

The CMS created 2 New MS-DRGs to classify Percutaneous Intracardiac Procedures.

Major Cardiovascular Procedures have been moved from MS-DRGs 237 and 238 to five new MS-DRGs as outlined in the following table.

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

Revision of Hip or Knee Replacements ICD-10-PCS Version 32 Logic

The CMS finalized the proposal to add code combinations which capture the joint revision procedure. These combination codes will be the same for MS-DRGs 466,467, 468 as well as MS-DRGs 628, 629, and 630 (Other Endocrine, Nutritional, and Metabolic Operating Room Procedures with MCC, with CC, and without CC/MCC) as the joint procedures are also included in this MS-DRG group. The table of code combinations can be found on pages 49,390 thru 49,406 of the Final Rule.

Spinal Fusion

The CMS finalized the proposal to change the title of MS-DRGs 456, 457 and 458. They indicated that by changing the reference of “9+ Fusions” to “Extensive Fusions,” this more appropriately identifies the procedures classified under these groupings. The final title revisions are as follows:

• MS-DRG 456: Spinal Fusion Except Cervical with Spinal Curvature/Malignancy/Infection or Extensive Fusion with MCC,
• MS-DRG 457: Spinal Fusion Except Cervical with Spinal Curvature/Malignancy/Infection or Extensive Fusion with CC; and
• MS-DRG 458: Spinal Fusion Except Cervical with Spinal Curvature/Malignancy/Infection or Extensive Fusion without CC/MCC.

MDC 14: Pregnancy, Childbirth and the Puerperium

The CMS finalized the proposal to modify the logic for several ICD-10 procedure codes where the current logic did not result in the appropriate MS-DRG assignment. Specifically, the codes should not be designated as O.R. codes. Specific Codes where the logic was modified include:

• 3E0P7GC (Introduction of other therapeutic substance into female reproductive, via natural or artificial opening);
• 3E0P76Z (Introduction of nutritional substance into female reproductive, via natural or artificial opening);
• 3E0P77Z (Introduction of electrolytic and water balance substance into female reproductive, via natural or artificial opening);
• 3E0P7SF (Introduction of other gas into female reproductive, via natural or artificial opening);
• 3E0P83Z (Introduction of anti-inflammatory into female reproductive, via natural or artificial opening endoscopic);
• 3E0P86Z (Introduction of nutritional substance into female reproductive, via natural or artificial opening endoscopic);
• 3E0P87Z (Introduction of electrolytic and water balance substance into female reproductive, via natural or artificial opening endoscopic);
• 3E0P8GC (Introduction of other therapeutic substance into female reproductive, via natural or artificial opening endoscopic); and
• 3E0P8SF (Introduction of other gas into female reproductive, via natural or artificial opening endoscopic).

Finalized Changes to the Postacute Care Transfer MS-DRGs

Per the 2015 OPTUM DRG Expert, “CMS established a postacute care transfer policy effective October 1, 1998. The purpose of the IPPS postacute care transfer payment policy is to avoid providing an incentive for a hospital to transfer patients to another hospital early in the patient’s stay in order to minimize costs while still receiving the full DRG payment. The transfer policy adjusts the payments to approximate the reduced costs of transfer cases.”

The CMS finalized the proposal to update the list of MS-DRGs that are subject to the Postacute Care Transfer Policy to include:

• MS-DRG 273: Percutaneous Intracardiac Procedures with MCC; and
• MS-DRG 274: Percutaneous Intracardiac Procedures without MCC.

Note: MS-DRGs 273 and 274 met the criteria for the special payment methodology and therefore are also subject to the MS-DRG special payment methodology.

Please be aware that this article highlights some of the key changes. For those closely involved with coding in your facility be on the lookout for our Annual Fall Inpatient webinar.

In the meantime, the FY 2016 Final Rule can be accessed at http://www.gpo.gov/fdsys/pkg/FR-2015-08-17/pdf/2015-19049.pdf.

We all realize that to be effective in our jobs, we must have the cooperation of others and this is especially true when it comes to healthcare. Physicians rely on hospitals to provide the tools and services they need to care for their patients, and hospitals rely on physicians to utilize those services appropriately and to provide sufficient documentation to support coding, billing and payment. The Medicare Quarterly Compliance Newsletter for July is now available and provides several examples of issues where team work between physicians and hospitals is a must. Most of the articles in this quarter’s edition focus on physician issues, but there are a couple of articles that relate to hospital outpatient services and some instructions in the physician articles that will benefit hospitals as well.

Bevacizumab Medical Necessity (page 15 in the Compliance Newsletter)

Recovery Auditors have an automated edit to identify claims for Bevacizumab, J9035, that are incorrectly paid when they do not contain a diagnosis code required by a Local Coverage Determination (LCD). After a general description of Medicare requirements for drug coverage and identification of a specific CGS LCD that list diagnoses for a number of drugs and biologicals used to treat cancer and other acute and chronic conditions, the article discusses Medicare coverage of off-label drug usage. Drugs used for indications other than those in the approved labeling may be covered under Medicare if it is determined that the use is medically accepted, taking into consideration the major drug compendia, authoritative medical literatures, and/or accepted standards of medical practice. Some local coverage policies have been expanded to include off label usage in accordance with CMS Policy for Off Label Usage.

The Medicare Benefit Policy Manual, Chapter 15, section 50.4.5, provides guidance on the off-label use of drugs and biologicals in an anti-cancer chemotherapeutic regimen. Per the manual, “In general, a use is identified by a compendium as medically accepted if the:

1. indication is a Category 1 or 2A in NCCN, or Class I, Class IIa, or Class IIb in DrugDex; or,
2. narrative text in AHFS-DI or Clinical Pharmacology is supportive.

A use is not medically accepted by a compendium if the:

1. indication is a Category 3 in NCCN or a Class III in DrugDex; or,
2. narrative text in AHFS or Clinical Pharmacology is “not supportive.”

The complete absence of narrative text on a use is considered neither supportive nor non-supportive.”

Contractors may also determine to cover off-label uses that are supported by clinical research based on evaluation of evidence in certain specified peer-reviewed medical literature. FDA-approved drugs and biologicals may also be considered for use in the determination of medically accepted indications for off-label use if determined by the contractor to be reasonable and necessary. Refer to the complete manual instructions for specific details of coverage.

There are also a number of LCDs and Articles that address the coverage of chemotherapeutic use of Bevacizumab and off-label uses of drugs.

Providers also need to bear in mind that some Medicare Administrative Contractors (MACs) are performing probe reviews and targeted reviews on anti-cancer drugs including Bevacizumab. These reviews have significant denial rates due to lack of medical necessity, failure to follow established protocols and lack of documentation, such as physician’s orders.

So What Should Providers Do to Ensure Coverage of Anti-Cancer Treatments

• Be aware of any coverage policies in your MAC jurisdiction and follow the diagnosis requirements.
• For off-label use not included as covered in your MAC’s LCD, verify that your off-label usage is supported by Medicare approved standards in the pharmaceutical compendia or accepted peer-reviewed medical literature. Appeal any denials and be sure to include the supporting medical literature with your appeal.
• Follow established and accepted protocols for anti-cancer chemotherapeutic regimens.
• Make sure the documentation of services is complete and sufficient to support your billing.
• Be aware of probe and targeted reviews by your MAC for anti-cancer drugs and monitor your denial rates. Take corrective actions based on denial reasons.

Other issues related to hospitals identified in the July Compliance Newsletter include:

• Claims lacking medical necessity for hydration services based on LCD requirements (page 22)
• Physician claims with insufficient documentation for nasal endoscopy (pg 7), lithotripsy (pg 9), and lumbar spinal fusion (pg 12). Although these reviews focused on physician services, hospital payment may also be affected as it is often dependent on the physician’s documentation. Hospitals must work with physicians to make sure the documentation for these services includes:
• The correct date of service;
• The reason for performing the procedure;
• The results of the procedure;
• A physician’s signature; and/or
• A signature log or attestation for an illegible signature.

As often is the case, the hospital’s payment for services is dependent on the physician’s documentation and treatment choices. It must be a team effort for all providers to follow Medicare requirements and get the reimbursement they deserve.

Hospitals have struggled with the 2-Midnight Rule since it was implemented on October 1, 2013. Since then the Centers for Medicare and Medicare Services (CMS) has held numerous National Provider Calls, released sub-regulatory guidance, implemented a Probe and Educate Process conducting by Medicare Administrative Contractors (MACs) and requested public comment for an alternative short stay payment policy from health care providers. On July 1st, the CMS released the CY 2016 Outpatient Prospective Payment System (OPPS) Proposed Rule. Tucked way back on page 150 of the 177 page document, not only does CMS propose a change to the 2-Midnight Rule but they provide detail regarding a new medical review strategy that CMS will adopt on October 1, 2015 “regardless of whether the 2-midnight rule remains unchanged or is modified.”

Two-Midnight Rule Background

• The Two-Midnight Rule was implemented for admissions on or after October 1, 2013 in response to the concerning trend of extended “observation” services as these days do not count towards the three-day inpatient hospital stay required before a beneficiary becomes eligible for treatment in a skilled nursing facility and patient status can have a significant implications for provider reimbursement and beneficiary cost sharing.

• In general, the 2-Midnight Rule specified that an Inpatient stay is appropriate and payable under Medicare Part A when:
• The admitting physician has an expectation that a hospitalization will cross two midnights and the medical record documentation supports that expectation, or
• The beneficiary is being admitted for a Medicare designated Inpatient Only Procedure.

• Through sub-regulatory guidance, CMS has indicated “review contactors’ expectations for sufficient documentation will be rooted in good medical practice. Expected length of stay and the determination of the underlying need for medical or surgical care at the hospital must be supported by complex medical factors such as history and comorbidities, the severity of signs and symptoms, current medical needs, and the risk of an adverse event, which Medicare review contractors will expect to be documented in the physician assessment and plan of care. CMS does not anticipate that physicians will include a separate attestation of the expected length of stay, but rather that this information may be inferred from the physician’s standard medical documentation, such as his or her plan of care, treatment orders, and physician’s notes.”

• With the implementation of the Two-Midnight Rule, CMS initiated a Probe and Educate Process where Medicare Administrative Contractors (MACs) have been conducting prepayment patient status probe reviews of Medicare Part A inpatient hospital claims spanning 0 or 1 midnight after the formal inpatient admission to determine the medical necessity of the inpatient status in accordance with the 2 midnight benchmark.

• The Medicare Access and CHIP Reauthorization Act of 2015 extended the Probe and Educate Process through September 30, 2015. This Act also continues to prohibit Recovery Auditor from conducting post-payment medical reviews of inpatient hospital patient status claims with dates of admission between October 1, 2013 and September 30, 2015.

• Since the implementation of the Two-Midnight Rule, CMS has indicated that “other circumstances where an inpatient admission would be reasonable in the absence of an expectation of a 2 midnight stay should be rare and unusual. To date, CMS has identified “Mechanical Ventilation Initiated during Present Visit” as the only rare and unusual circumstance in which the 2-midnight benchmark would not apply.”

Proposed Policy Change for Medical Review of Inpatient Hospital Admissions under Medicare Part A

The proposed policy change for medical review of inpatient hospital admissions is aimed at changing “the standard by which inpatient admissions generally qualify for Part A payment based on feedback from hospitals and physicians to reiterate and emphasize the role of physician judgement.”

CMS is “proposing to modify our existing “rare and unusual” exceptions policy to allow for Medicare Part A payment on a case-by-case basis for inpatient admissions that do not satisfy the 2-midnight benchmark, if the documentation in the medical record supports the admitting physician’s determination that the patient requires inpatient hospital care despite an expected length of stay that is less than 2 midnights. For payment purposes, the following factors, among others, would be relevant to determining whether an inpatient admission where the patient stay is expected to be less than 2 midnights is nonetheless appropriate for Part A payment:

• The severity of the signs and symptoms exhibited by the patient;
• The medical predictability of something adverse happening to the patient; and
• The need for diagnostic studies that appropriately are outpatient services (that is, their performance does not ordinarily require the patient to remain at the hospital for 24 hours or more).

We note that, under the existing rare and unusual policy, only one exception—prolonged mechanical ventilation—has been identified to date. Upon further consideration and based on feedback from stakeholders, we believe there may be other patient-specific circumstances where certain cases may nonetheless be appropriate for Part A payment, absent an expected stay of at least 2 midnights. Such circumstances would be determined on a case-by-case basis. Under the proposed revised policy, for

purposes of Medicare payment, an inpatient admission will be payable under Part A if the documentation in the medical record supports either the admitting physician’s reasonable expectation that the patient will require hospital care spanning at least 2 midnights, or the physician’s determination based on factors such as those identified above, that the patient requires formal admission to the hospital on an inpatient basis”…”We are proposing to revise § 412.3(d) to state that when the admitting physician expects a hospital patient to require hospital care for only a limited period of time that does not cross 2 midnights, the services may be appropriate for payment under Medicare Part A if the physician determines and documents in the patient’s medical record that the patient requires a reasonable and necessary admission to the hospital as an inpatient. In general, we would expect that with most inpatient admissions where the stay is expected to last less than the 2-midnight benchmark, the patient will remain in the hospital at least overnight but acknowledge that the patient can be unexpectedly discharged or transferred to another hospital and not actually use a hospital bed overnight. Cases for which the physician determines that an inpatient admission is necessary, but that do not span at least 1 midnight, will be prioritized for medical review.”

“Under the proposed policy change, for stays for which the physician expects the patient to need less than 2 midnights of hospital care and the procedure is not on the inpatient only list or on the national exception list, an inpatient admission would be payable on a case-by-case basis under Medicare Part A in those circumstances under which the physician determines that an inpatient stay is warranted and the documentation in the medical record supports that an inpatient admission is necessary.”

The proposed rule makes a point to note that CMS is “not proposing any changes for hospitals stays that are expected to be greater than two midnights; that is, if the physician expects the patient to require hospital care that spans at least 2 midnights and admits the patient based on that expectation, the services are generally appropriate for Medicare Part A payment.”

CMS goes on to reiterate that it would “be rare and unusual for a beneficiary to require inpatient hospital admission after having a minor surgical procedure or other treatment in the hospital that is expected to keep him or her in the hospital for only a few hours and not at least overnight” and CMS “will monitor the number of these admissions and plan to prioritize these types of cases for medical review.”

What does this mean for a Hospital?

When I was first introduced to the concept of Clinical Documentation one key concept different in the inpatient setting versus the outpatient setting was that diagnoses still documented as possible, probable or likely at the time of discharge could be coded as if the condition existed.

Here is a breakdown of the possible, probable and likely of this 2-Midnight Proposal.

• It would now be possible that a physician can admit a patient as an inpatient without having a 2-Midnight Expectation, but
• It is also probable without excellent physician documentation in the record a medical reviewer would disagree with the inpatient status, and
• It is likely moving forward all of your 1 day Inpatient Hospital reviews will be prioritized for medical review. The question now is who will be doing that review. The answer leads us to the change being made for the 2016 IPPS fiscal year to the CMS medical review strategy.

CMS Changing the Medical Review Strategy

As mentioned earlier in this article, the MACs have had the responsibility of performing the Probe & Educate audits that have been ongoing since October 1, 2013. This is about to change. CMS has indicated even if the 2-Midnight Proposal is not finalized “that, no later than October 1, 2015, we are changing the medical review strategy plan to have Quality Improvement Organization (QIO) contractors conduct these reviews of short inpatient stays rather than the MACs.”

Key Facts about QIOs

• A statutory duty of the QIO’s is to review “some or all of the professional activities of providers and practitioners in the QIO’s service area.” These reviews are aimed at determining if services being delivered are reasonable and medically necessary, if the quality of services meet professional recognized standards of care, and for inpatient services, if the services could have been appropriately and effectively furnished in a different setting (i.e. outpatient). Further, section 1154(a)(2) of the Act provides for payment determinations to be made based on these QIO reviews.”

• Additional QIO Review Functions:
• Addressing beneficiary complaints,
• Provider-based notice appeals,
• Violations of the Emergency Medical Treatment and Labor Act (EMTALA),
• Peer review; and
• Higher Weighted Diagnosis Related-Group (HWDRG) coding reviews. When this “involves a service provided during a short inpatient stay, QIOs also perform a corresponding medial review to validate adherence to the current 2-midnight policy.”

• The Secretary has broad authority to “direct additional activities by QIOs to improve the effectiveness, efficiency, economy, and quality of services under the Medicare program. These reviews are integral to the determination of whether items and services should be payable under the Medicare program.”
• “QIOs routinely collaborate and interact with State survey agencies, MACs, recovery auditors, and qualified independent contractors (QICs).”

• “To mitigate the perception of a potential conflict of interest between medical review and quality improvement functions of the QIOs, on August 1, 2014, the QIO program separated medical case review from its quality improvement activities in each State under two types of regional contracts. These include Beneficiary and Family Centered Care QIOs (BFCC-QIOs) contractors who perform medical case review, and Quality Innovation Network QIOs (QIN-QIOs) contractors who perform quality improvement activities and provide technical assistance to providers and practitioners. In addition, the restructured QIO program uses a non-QIO contractor to assist CMS in the monitoring and oversight of the BFCC-QIO case review activities.”

New QIO Short Inpatient Medical Review Process to be adopted by October 1, 2015

• “QIOs will review a sample of post-payment claims and make a determination of the medical appropriateness of the admission as an inpatient.”

• The number of admissions for a “minor surgical procedure or other treatment in the hospital that is expected to keep him or her in the hospital for only a few hours (less than 24 hours)” will be monitored and these types of cases will be prioritized for medical review.

• Claim denials will be referred to the MAC for payment adjustments. “Providers’ appeals of denied claims will be addressed under the provisions of section 1869 of the Act.”

• “QIOs will educate hospitals about claims denied under the 2-midnight policy and collaborate with these hospitals in their development of a quality improvement framework to improve organizational processes and/or systems.”

• “Hospitals that are found to exhibit a pattern of practices, including, but not limited to: having high denial rates and consistently failing to adhere to the 2-midnight rule (including having frequent inpatient hospital admissions for stays that do not span one midnight), or failing to improve their performance after QIO educational intervention, will be referred to the recovery auditors for further payment audit.”

• Under current law, Recovery Auditors may resume patient status reviews for dates of admission on or after October 1, 2015. “The number of claims that a recovery auditor will be allowed to review for patient status will be based on the claim volume of the hospital and the denial rate identified by the QIO.”

2-Midnight Rules’ Impact on the Trend of Long Outpatient Hospital Stays

CMS notes that “preliminary data suggest that the 2-midnight rule as it relates to hospital stays spanning at least 2 midnights has been effective in reducing long outpatient hospital stays. Specifically, our data show that the proportion of outpatient long-stay encounters (more than 2 days) involving observation services decreased by 11 percent in FY 2014 compared to FY 2013. The trend in these data is consistent with our adoption of the 2-midnight rule on October 1, 2013.”

Public Comments Requested

CMS noted that is has been argued by members of the hospital community that Medicare should adopt specific criteria for medical review entities to use when reviewing short stay claims. CMS is inviting public comments on whether specific criteria should be adopted for inpatient hospital admissions not expected to span at least 2 midnights and, if so, what should that criteria be.

CMS also noted that “MedPAC recently recommend repealing the 2-midnight rule in its entirety, in Chapter 7 of its June Report to Congress. MedPAC has not recommended a short-stay payment policy. We have requested public comment on three different occasions on issues related to when a patient is appropriately admitted as an inpatient or when the patient is appropriately treated as an outpatient, including potential payment policy options to address this issue” which has not resulted in a consensus on a recommended policy. In a letter earlier this year, the American Hospital Association provided us with its analysis for several payment policy alternatives and their potential impact. The association did not recommend adoption of a particular payment policy in this area. We continue to be open to considering potential payment policy options that have the potential to address this issue.”

For those who wish to comment, CMS is accepting comments on the Two Midnight portion of the proposed rule until August 30, 2015 and will respond to comments in a final rule to be issued on or around November 1, 2015.

Resources

• Link to the CY 2016 OPPS Proposed Rule – Display Copy (see pages 585-606 of the pdf): https://s3.amazonaws.com/public-inspection.federalregister.gov/2015-16577.pdf
• Link to CY 2016 OPPS Proposed Rule in the July 8, 2015 Federal Register (see pages 150-155 of ): http://www.gpo.gov/fdsys/pkg/FR-2015-07-08/pdf/2015-16577.pdf

• Link to the July 1, 2015 CMS Fact Sheet: Two-Midnight Rule: http://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2015-Fact-sheets-items/2015-07-01-2.html

• Link to the July 1, 2015 CMS Fact Sheet: CMS Proposes Hospital Outpatient and Ambulatory Surgical Center Policy and Payment Changes, Including Proposed Changes to the Two-Midnight Rule, and Quality Reporting Changes for 2016: http://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2015-Fact-sheets-items/2015-07-01.html

• Link to CMS Document: Questions and Answers Relating to Patient Status Reviews 3/12/14: http://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/Medical-Review/Downloads/Questions_andAnswersRelatingtoPatientStatusReviewsforPosting_31214.pdf

• June 2015 Medicare Payment Advisory Commission Report to Congress Fact Sheet: http://www.medpac.gov/documents/fact-sheets/fact-sheet-on-medpac%27s-june-2015-report-to-the-congress-medicare-and-the-health-care-delivery-system.pdf?sfvrsn=0

Medicare can be fastidious – picky, particular, specific, precise, even downright finicky in their coding, billing, and documentation requirements. By now, most of us are used to their demands for precision. For example, we are all aware that the units billed must match the dosage, amount, or time specified in the physician’s order. But in the July 2015 OPPS Update, CMS points out an instance related to hyperbaric oxygen treatments (HBO) where this does not hold true.

When a physician orders a 90-minute HBO treatment, he or she expects that the patient will be placed at 100% oxygen for 90 minutes. In billing for HBO treatments, providers are allowed to include not only the time at 100% oxygen but also the time for descent, air breaks, and ascent. In that case, the units billed for HBO will be greater than the units equivalent to the 90 minutes specified in the order.

Effective January 1, 2015, CMS discontinued the old code that had been used to report HBO for years (C1300) and replaced it with new HCPCS code G0277 which has the same description as the old code - Hyperbaric oxygen under pressure, full body chamber, per 30 minute interval. Here are the key points to keep in mind when billing G0277 for HBO services:

• The total number of billable 30-minute intervals would not be based solely on the amount of time noted on the physician order.
• The total number of 30-minute intervals billable under G0277 should be calculated by including:
• Time spent by the patient under 100% oxygen,
• Time for descent,
• Time for air breaks, and
• Time for ascent.
• You must go at least 16 minutes into the next 30-minute interval in order to bill an additional unit. For example:
• 46-75 minutes = 2 units
• 76-105 minutes = 3 units
• 106-135 minutes = 4 units
• HBO is typically prescribed for an average of 90 minutes (at 100% oxygen)
• A common scenario to fulfill an HBO order for 90 minutes of treatment would be 90 minutes of therapeutic HBO, 10 minutes descent, 10 minutes air breaks and 10 minutes ascent for a total of 120 minutes which would equal 4 units of G0277.
• In general, CMS does not expect that a physician order for 90 minutes of HBO therapy would exceed 4 billed units of HCPCS code G0277.

And one more thing Medicare is picky about is their coverage requirements. In addition to getting the correct units on the claim, providers need to be sure the patient qualifies for HBO services in accordance with Medicare’s National Coverage Determination and any Local Coverage Determinations or Articles. The NCD for Hyperbaric Oxygen Therapy (20.29) includes a long list of covered conditions and an even longer list of non-covered indications. HBO is used as an adjunctive treatment and /or after conventional therapy has failed for a number of the covered conditions so review the policy carefully. Be sure that documentation in your medical record provides the details of any conservative or standard treatments in order to support the use of HBO as an adjunctive therapy.

HBO covered conditions include:

1. Acute carbon monoxide intoxication,
2. Decompression illness,
3. Gas embolism,
4. Gas gangrene,
5. Acute traumatic peripheral ischemia. HBO therapy is a valuable adjunctive treatment to be used in combination with accepted standard therapeutic measures when loss of function, limb, or life is threatened.
6. Crush injuries and suturing of severed limbs. As in the previous conditions, HBO therapy would be an adjunctive treatment when loss of function, limb, or life is threatened.
7. Progressive necrotizing infections (necrotizing fasciitis),
8. Acute peripheral arterial insufficiency,
9. Preparation and preservation of compromised skin grafts (not for primary management of wounds),
10. Chronic refractory osteomyelitis, unresponsive to conventional medical and surgical management,
11. Osteoradionecrosis as an adjunct to conventional treatment,
12. Soft tissue radionecrosis as an adjunct to conventional treatment,
13. Cyanide poisoning,
14. Actinomycosis, only as an adjunct to conventional therapy when the disease process is refractory to antibiotics and surgical treatment,
15. Diabetic wounds of the lower extremities in patients who meet the following three criteria:
16. Patient has type I or type II diabetes and has a lower extremity wound that is due to diabetes;
17. Patient has a wound classified as Wagner grade III or higher; and
18. Patient has failed an adequate course of standard wound therapy.

A 2014 review of HBO claims by Medicare’s Supplemental Medical Review Contractor revealed an error rate of 58%. Although over half of the denials were for lack of response to the document request, other medically reviewed claims lacked documentation in the submitted medical records to support the HBO services as medically reasonable and necessary. The documentation did not include:

• Specific timelines and goals for therapy. For example, the documentation simply stated “continue HBO” or “until healed”
• Radiology and pathology reports confirming diagnosis such as osteomyelitis or gas gangrene
• Monitoring for improvement or lack of improvement

In addition, when documentation was provided, descriptions of diabetic wounds did not meet Wagner Criteria for Grade three (III) or four (IV) wounds and therapy was provided beyond the 30 days allowed under Medicare coverage guidelines.

So before you bill for HBO make sure your patients meet the criteria for coverage and that you correctly calculate the number of units to report. If not, picky Medicare may decide to “pick” on you!

Q:

How do you report the quantity of a drug with a HCPCS code when the HCPCS dose is different from the dose that was given?

A:

You can round up the quantity when needed with any of the drug HCPCS codes.

So if the HCPCS code is “per 5 MG” and you gave 10 MG, you would report the HCPCS code with a quantity of 2. If the HCPCS code is “per 5 MG” and gave 8 MG, you would round up and report the HCPCS code with a quantity of 2.

Reference: Medicare Claims Processing Manual, chapter 17, section 10

“Hospitals must report all appropriate HCPCS codes and charges for separately payable drugs, in addition to reporting the applicable drug administration codes. Hospitals should also report the HCPCS codes and charges for drugs that are packaged into payments for the corresponding drug administration or other separately payable services. Historical hospital cost data may assist with future payment packaging decisions for such drugs. Drugs are billed in multiples of the dosage specified in the HCPCS code long descriptor. If the drug dose used in the care of a patient is not a multiple of the HCPCS code dosage descriptor, the provider rounds to the next highest unit based on the HCPCS long descriptor for the code in order to report the dose provided. If the full dosage provided is less than the dosage for the HCPCS code descriptor specifying the minimum dosage for the drug, the provider reports one unit of the HCPCS code for the minimum dosage amount.”

Merriam-Webster defines confusion as “a situation in which people are uncertain about what to do or are unable to understand something clearly,” or “the feeling that you have when you do not understand what is happening, what is expected, etc.” and finally as “a state or situation in which many things are happening in a way that is not controlled or orderly.”

All three definitions are apt depictions of how the healthcare industry felt in response to the 2014 Inpatient Prospective Payment System (IPPS) Final Rule and more specifically how to implement the then new 2-Midnight Rule and Physician Certification Requirements. Adding to the confusion, the Physician Certification Requirements changed again on January 1, 2015 with the implementation of the 2015 Outpatient Prospective Payment System (OPPS) Final Rule and more recently, the Centers for Medicare and Medicaid Services (CMS) have extended the Inpatient Probe and Educate process through April 30, 2015. We have recently come across certain Myths about the regulations and wanted to equip our readers with the Facts.

Myth: As of April 1st, 2015, the Centers for Medicare and Medicaid Services (CMS) have once again delayed implementation of the 2-Midnight Rule.

Fact: On April 1st the CMS indicated that “given potential Congressional action on H.R. 2, the Medicare Access and CHIP Reauthorization Act of 2015, CMS will continue the Inpatient Probe and Educate process until April 30, 2015 and will continue to prohibit Recovery Auditor inpatient hospital patient status reviews for dates of admission occurring between October 1, 2013 and April 30, 2015.”

However, hospitals should have implemented the 2-Midnight Rule at the start of the CMS 2014 Fiscal Year on October 1, 2013. This rule was intended as guidance for Physicians in identifying patients appropriate for inpatient admission. CMS has NEVER delayed the implementation date for hospital compliance with the 2-Midnight Rule. The Inpatient Probe and Educate Process was put in place to delay Contractor inpatient hospital status reviews thereby allowing hospitals time to further understand and implement this policy.

Note: Congress has passed legislation and, at the time of this posting, President Obama has indicated that he will sign it into law. This means that the Probe and Educate process will be extended to the end of the fiscal year on September 30, 2015.

Myth: As a result of the 2-Midnight Rule, CMS will not reimburse hospitals for inpatient hospitalizations that do not span 2 Midnights.

Fact: In Sub-regulatory guidance following implementation of the 2014 IPPS Final Rule, the CMS indicated that there may be “unforeseen circumstances” or possible “exceptions” to when a beneficiary is appropriately placed in an inpatient status but does not remain in the hospital 2 Midnights. To date the CMS has identified four Unforeseen Circumstances and one possible Exception.

Unforeseen Circumstances

• Beneficiary death or transfer,
• A beneficiary rapidly improving and the reasonable 2-Midnight expectation was clearly documented in the record,
• A beneficiary leaves Against Medical Advice (AMA), or
• In the event that a beneficiary declines further workup and/or treatment and elects Hospice Care.

Exception

• “CMS believes a physician will generally expect beneficiaries with newly initiated mechanical ventilation to require 2 or more midnights of hospital care, if the physician expects that the beneficiary will only require 1 midnight of hospital care, inpatient admission and Part A payment is nonetheless generally appropriate. NOTE: This exception is not intended to apply to anticipated intubations related to minor surgical procedures or other treatment.”

Myth: CMS has suspended review of all inpatient claims submitted by hospitals to the Medicare program between October 1, 2013 and April 30 of this year.

Fact: It is true that Recovery Auditors are prohibited from patient status reviews on inpatient claims with dates of service from October 1, 2013 now through April 30, 2015.

However, during this time, Medicare Administrative Contractors (MACs) are facilitating the Probe & Educate program in which they are performing a limited number of pre-payment probe reviews of 1 day or less inpatient hospitalizations with dates of services on or after October 1, 2013. MACs were instructed to assess for compliance with the admission order requirements, physician certification requirements and 2-Midnight Benchmark Guidance. While this is a Probe and Educate program, hospitals do not receive payment for denied claims.

CMS outlines reviews not impacted by the 2014 IPPS Final Rule on the Inpatient Hospital Reviews Webpage. Specifically, “MACs, Recovery Auditors and the Supplement Medical Review Contractor will continue other types of inpatient hospital reviews, including, but not limited to:

• Coding reviews,
• Reviews for the medical necessity of a surgical procedure provided to a hospitalized beneficiary, and
• Inpatient hospital patient status reviews for dates of admission prior to October 1, 2013 (based on the applicable policy at the time of admission).”

Myth: All Medicare inpatient admissions need an Initial Physician Certification completed prior to the patient being discharged

Fact: This was true for Medicare admissions with dates of service on or after October 1, 2013 through December 31, 2014. However, this changed with the 2015 OPPS Final Rule. As of January 1, 2015, CMS finalized their “policy as proposed in the CY 2015 OPPS/ASC proposed rule, which limits the requirement for physician certification to long-stay (20 days or longer) and outlier cases.” Furthermore, they finalized their “proposed revision of paragraph (b) of § 424.13, without modification, to specify that certifications for long-stay cases must be furnished no later than 20 days into the hospital stay.”

Myth: Any practitioner treating a Medicare Inpatient can write a valid Inpatient Status Order.

Fact: Per the January 30, 2014 CMS Sub-regulatory guidance Hospital Inpatient Admission Order and Certification, the order must be provided by a Physician or other practitioner that meets the following criteria

1. Is licensed by the state to admit inpatients to hospitals,
2. Has been granted privileges by the hospital to admit inpatients to that specific facility, and
3. Is knowledgeable about the patient’s hospital course, medical plan of care, and current condition at the time of the admission.

Resources:

CMS Inpatient Hospital Reviews Web page: http://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/Medical-Review/InpatientHospitalReviews.html

January 30, 2014 CMS Sub-regulatory Guidance: Hospital Inpatient Admission Order and Certification

http://cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/Downloads/IP-Certification-and-Order-01-30-14.pdf

Can you sometimes tell by the tone of someone’s voice or the way they drag out the words, that there is a condition to their answer? “Well, nooo…” You just know the conjunction “but” is coming. Medicare generally communicates with providers in writing, but experience tells us there is often a condition to Medicare’s answers.

A few years ago there was a lot of discussion in Medicare billing circles about whether a physician’s signature is required on a laboratory requisition. And in typical Medicare fashion, the answer was a clear, “No…, but…” The “but” being that although the signature of the ordering physician is not required on the requisition, there has to be an order or documentation of intent to order the lab tests that is signed by the physician. This documentation can be located in the physician’s office chart, but needs to be submitted to the Medicare contractor in the case of a medical review of the claim. And the provider being reviewed (i.e. the testing lab), whose payment is at risk, is the one ultimately responsible for submitting the supporting documentation.

With all the reminders of these requirements that circulated back then, surely most hospital-based and independent laboratories understood what was expected. Therefore, I was a bit surprised to see an announcement back in December concerning a significant increase in pathology and laboratory service errors identified by data analysis of the Comprehensive Error Rate Testing (CERT) program findings. In response to the increase in errors, CERT published a document addressing the lab and pathology errors.

CERT identifies insufficient documentation and incorrect coding as the reasons for the significant errors, but the main issue addressed in the publication is missing or incomplete documentation.

“If a physician’s order for a diagnostic test is not included in the medical record, the physician must document the intent to order the laboratory service.” This documentation must state the specific tests the physician is ordering. Simply stating “ordering lab” is not sufficient. Also the documentation of intent must be signed by the physician or there must be a signed physician’s order for the lab tests. A signed order or signed documentation of intent to order must be sent to the Medicare contractor reviewing the record to support the services billed. Without this documentation, the claim will be denied.

“Documentation must support the medical necessity for the services performed.” Per the Medicare Claims Processing Manual, Chapter 16 , section 120.1 – “Diagnoses are required on all claims” and such diagnostic information must be supplied to the performing laboratory by the ordering physician. There are twenty-three National Coverage Determinations (NCDs) for lab services and individual Medicare Administrative Contractors (MACs) often have Local Coverage Determinations (LCDs) for other lab services. Both the NCDs and LCDs require certain diagnoses to support the medical necessity of the lab tests; additional indications and documentation may also be required by the coverage policies. Two examples of required lab documentation from the CERT document include:

• Blood Glucose - The ordering physician must include evidence in the patient’s clinical record that an evaluation of history and physical preceded the ordering of glucose testing and that manifestations of abnormal glucose levels were present to warrant the testing.
• Thyroid Function tests - When thyroid function tests are billed at a greater frequency than the norm (two per year), the ordering physician’s documentation must support the medical necessity of this frequency.

One more requirement – signatures must meet the Medicare signature guidelines as described in the Medicare Program Integrity Manual, Chapter 3, section 3.3.2.4.

In summary, if the CERT contractor reviews your laboratory claims, be sure to:

1. Respond timely to the CERT medical record request
2. Providers have 75 days to submit requested records
3. CERT will accept late documentation
4. Include all necessary documentation
5. A signed order or documentation of intent to order labs signed by the ordering physician
6. Signatures must meet Medicare signature requirements
7. Documentation to support the medical necessity of the services
8. Lab results/reports
9. Appeal unfavorable decisions to your local MAC
10. Include additional supporting documentation

That “no signature” thing comes with a huge conditional “but”!

This material was compiled to share information. MMP, Inc. is not offering legal advice. Every reasonable effort has been taken to ensure the information is accurate and useful.

Yes, it is true that in this age of electronic health records (EHRs) that most Physician notes are no longer written with a pen. However, in the January 2015 release of the Medicare Quarterly Compliance Newsletter, there are two Comprehensive Error Rate Testing (CERT) review findings that share the denial commonality of “the physician’s failure to document a reasonable expectation that the beneficiary would require a hospital stay that would cross 2 or more midnights.” So hand written or electronic, it is a fact that the denials were due to the Physician’s pen.

First, for those that may still be unfamiliar with this newsletter, it is a resource provided by the CMS to serve as an “educational product, to help providers understand the major findings identified by MACs, Recovery Auditors, Program Safety Contractors, Zone Program Integrity Contractors, the Comprehensive Error Rate Testing (CERT) review contractor and other governmental organizations, such as the Office of Inspector General.” If you are interested in viewing past issues, the CMS maintains a Newsletter Archive of all of the newsletters to date.

The January edition of the newsletter includes findings from the Office of Inspector General (OIG), Recovery Auditor and CERT. This article focuses on two of the CERT findings.

Surgical Procedures Related to Hemodialysis being billed as an Inpatient
Provider Types Affected: Physicians and Hospitals

Background

Placement of an arteriovenous fistula (AVF) is the best option for beneficiaries requiring hemodialysis for end-stage renal disease (ESRD). The procedure is typically an outpatient procedure. “Inpatient hospital admission is appropriate when the beneficiary has some other acute problem requiring inpatient care or when a serious post-operative complication arises.”

Medicare payment to a hospital for surgical procedures includes the procedure itself and all normal post-op recovery and monitoring even if the monitoring extends overnight. Also, hemodialysis and a beneficiary’s need for chronic hemodialysis “does not justify an inpatient hospital admission for a vascular access-related procedure.”

Review Finding

Most improper payments identified by the CERT were due to the hospital inappropriately billing Medicare for the surgery and post-op care as an inpatient hospital admission.

Denial due to the Physician’s Pen

The CERT asserted that the most common denial for an inpatient hospitalization spanning less than 2 midnights “is the physician’s failure to document a reasonable expectation that the beneficiary would require a hospital stay that would cross 2 or more midnights.”

What You Should Know

“Physicians do not need to include a separate attestation of the expected length of stay; rather, this information may be inferred from the physician’s standard medical documentation, such as his or her plan of care, treatment orders, and physician’s notes. Expectation of time and the determination of the underlying need for medical care at the hospital are supported by complex medical factors such as history and comorbidities, the severity of signs and symptoms, current medical needs, and the risk of an adverse event, which are expected to be documented in the physician’s assessment and plan of care.”

The 2 Midnight Rule and Elective Procedures
Provider Types Affected: Physicians Facilities and Hospitals

Background

The 2014 IPPS Final Rule (CMS-1599-F) 2-Midnight Rule provision maintains that an inpatient admission and payment under Medicare Part A is generally appropriate when the physician:

1. “Expects the beneficiary to require a stay that crossed at least two midnights; and
2. Admits the beneficiary to the hospital based upon that expectation.”

Medicare Administrative Contractors (MACs) have been performing reviews under the Probe and Educate Program that began with admissions on or after October 1, 2013 and is currently set to end on March 31, 2015.

This review focuses on the review findings “as they pertain to admissions for elective procedures.”

Exception to the 2 Midnight Rule and Unforeseen Circumstances

When the Expected Length of Stay was Less Than 2 Midnights

It would not be appropriate to admit a beneficiary as an inpatient when they present for an elective surgical procedure that is not designated as Inpatient Only by Medicare and the physician does not expect to keep the patient in the hospital beyond 2 midnights.

Contractors will deny this type of claim unless there is documentation in the record of an approved exception. Currently the only approved exception is “newly initiated mechanical ventilation (excluding anticipated intubations related to minor surgical procedures or other treatment).”

When the Expected Length of Stay was 2 or More Midnights

There are times when a physician expects a beneficiary to require a 2 midnight or longer hospitalization but due to unforeseen circumstance the stay is less than 2 midnights. CMS approved examples of unforeseen circumstances includes “unexpected death, transfer to another hospital, departure against medical advice, clinical improvement, and election of hospice care in lieu of continued treatment in the hospital.”

Denial due to the Physician’s Pen

The CERT again asserted in this review that the most common denial for an inpatient hospitalization spanning less than 2 midnights “is the physician’s failure to document a reasonable expectation that the beneficiary would require a hospital stay that would cross 2 or more midnights.”

Two examples of Medicare Part A Inpatient Denied Claims provided in this review include a vascular procedure where the documentation did not support the inpatient admission and a urologic procedure where there was no inpatient order and the documentation did not support a 2 midnight expectation.

What You Should Know

Just as in the first CERT review findings, this article asserts that what you should know is that “Physicians do not need to include a separate attestation of the expected length of stay; rather, this information may be inferred from the physician’s standard medical documentation, such as his or her plan of care, treatment orders, and physician’s notes. Expectation of time and the determination of the underlying need for medical care at the hospital are supported by complex medical factors such as history and comorbidities, the severity of signs and symptoms, current medical needs, and the risk of an adverse event, which are expected to be documented in the physician’s assessment and plan of care.”

I encourage you to take the time to read this entire newsletter as it provides the issues, what you should know as well as valuable links to resources to find more information about each review type.

Some people may not get their gift from Santa this Christmas. When I was a child, I was always told that Santa Claus would not come until I went to sleep. If the number of people having sleep study testing is any indication, a lot of people in the US are having trouble sleeping. An OIG audit reported that from 2005 to 2011, Medicare spending for polysomnography services rose from $407 million to $565 million, an increase of 39 percent.

Because of this dramatic increase in the volume of sleep studies, several Medicare review contractors have sleep studies and polysomnography as one of their review topics. Two such contractors are the Comprehensive Error Rate Testing (CERT) reviewers and the Supplemental Medical Review Contractors (SMRC). (see the SMRC Polysomnography Project )

Medicare covers diagnostic testing of sleep disorders when the patient has symptoms or complaints of narcolepsy, sleep apnea, impotence or parasomnia. Polysomnography for chronic insomnia is not covered. (See Medicare Benefit Policy Manual, Chapter 15 section 70) There is also a National Coverage Determination (NCD 240.4.1) and several Local Coverage Determinations (LCDs) concerning the coverage requirements for sleep studies.

All reasonable and necessary diagnostic tests for the conditions listed above are covered when the following criteria are met:

• The clinic is either affiliated with a hospital or is under the direction and control of physicians. Diagnostic testing routinely performed in disorder clinics may be covered even in the absence of direct supervision by a physician;
• Patients are referred to the sleep disorder clinic by their attending physicians, and the clinic maintains a record of the attending physician’s order; and
• The need for diagnostic testing is confirmed by medical evidence, e.g. physician examination and laboratory tests.

Based on the findings from CERT reviews, discussed in the October 2014 Medicare Quarterly Compliance Newsletter, 97% of improper payments are due to insufficient documentation. So what do providers need to do to ensure they receive payment for their polysomnography services? Make sure the documentation in the medical record for sleep studies includes:

• A valid physician’s order for the diagnostic study or documentation to support the intent to order study (if there is no order, evidence of the intent to order PSG documented in the medical record can be accepted)
• A physician’s signature on the procedure note; and
• Clinical documentation to support the reason/need for the diagnostic study (e.g. documentation to support the fact that the beneficiary had symptoms and signs of sleep apnea).

You have to be good (and asleep) to get your presents from Santa, but you have to have complete and appropriate documentation to get your present (payment) from Medicare for sleep testing.

This material was compiled to share information. MMP, Inc. is not offering legal advice. Every reasonable effort has been taken to ensure the information is accurate and useful.

Having undergone back surgery at the age of twenty-seven, I would tell you that yes I needed that back surgery. Whether or not my chart demonstrated that need or not, who knows. That was then and this is now and in the current Medical Review Contractor environment, if the documentation in a medical record does not support the medical necessity of the procedure, claims submitted by hospitals and in some instances the surgeon can and are being denied.

There are countless types of back surgeries but for this article the focus is on documentation required to support the medical necessity of lumbar spinal fusions that code to DRGs 459 (Spinal Fusion Except Cervical with Major Co-morbidity or Complication) and DRG 460 (Spinal Fusion Except Cervical without Major Co-Morbidity or Complication).

Who is Looking?

The CMS Inpatient Hospital Reviews webpage indicates that despite the current Medicare Administrative Contractor (MAC) Probe & Educate Program, “MACs, Recovery Auditors and the Supplemental Medical Review Contractors will continue other types of inpatient hospital reviews” including “reviews for the medical necessity of a surgical procedure provided to a hospitalized beneficiary.”

MACs

Jurisdiction-N (J-N): First Coast Services Options, Inc.

First Coast is the MAC for Florida and in the absence of a National Coverage Determination (NCD) they were the first and to date the only MAC to have a Local Coverage Determination (LCD) for Spinal Fusions. LCD L32074: Lumber Spinal Fusion for Instability and Degenerative Disc Conditions had an original effective date for services performed on or after October 16, 2011.

Key LCD Guidance

• It is “when conservative therapy (non-surgical medical management) is unsuccessful after at least 3 to 12 months, depending on the diagnosis, lumbar spinal fusion may be considered for certain conditions.”
• “The hospital records are the primary source of information for the audit of hospital/procedure services. Therefore, any historical data supporting the medical necessity of the fusion (for example, duration and outcome of physiotherapy, injection therapy, anatomic factors influencing the decision for surgery, etc.) must be included in the inpatient medical record as noted in the history and physical examination, operative note and/or copies of office notes. For example, fusion of iatrogenic instability (i.e., surgical resection of facet as essential portion of the required decompression rendering an unstable segment) should be documented in a pre-operative note and/or an operative note.”
• “To meet Medicare’s reasonable and necessary (R&N) threshold for coverage of a procedure, the physician’s documentation for the case should clearly support both the diagnostic criteria for the indication (standard test results and/or clinical findings as applicable) and the medical need (the procedure does not exceed the medical need and is at least as beneficial as existing alternatives & the procedure is furnished with accepted standards of medical practice in a setting appropriate for the patient’s medical needs and condition). Lacking compelling arguments for an exception in the supporting documentation, the hospital (FISS claim) and physician services (MCS claim) can be denied.”
• Physician documentation must support the need for surgery and “must include the following:
• Office notes/hospital record, including history and physical by the attending/treating physician
• Documentation of the history and duration of unsuccessful conservative therapy (non-surgical medical management) when applicable. Failure of non-surgical medical management can be historical and does not have to be under the direction of the operating surgeon.
• Interpretation and reports for X-rays, MRI’s, CT’s, etc.,
• Medical clearance reports (as applicable)
• Documentation of smoking history, and that the patient has received counseling on the effects of smoking on surgical outcomes and treatment for smoking cessation if accepted (if applicable)
• Complete operative report outlining operative approach used and all the components of the spine surgery

Medical record documentation must be made available to Medicare upon request. When the documentation does not meet the criteria for the service(s) rendered or the documentation does not establish the medical necessity for the service(s), such service(s) will be denied as not reasonable and necessary under Section 1862(a)(1)(A) of the Social Security Act.”

Jurisdiction-11 (J-11) Palmetto GBA

Palmetto, the MAC for North Carolina, South Carolina, Virginia and West Virginia posted the YouTube Presentation Clinical Updates: DRG 459, 406earlier this year on August 11th. The most common reason cited by Palmetto for denials was a lack of information in the medical record about the conservative care provided prior to the surgical intervention.

Palmetto goes on to list documentation examples of conservative treatment that when clearly documented may help support payment for spinal fusion-related hospital care. Physical therapy, joint injections, neurologic deficits and upper and lower extremity strength are just a few of the examples provided.

Cahaba GBA, the MAC for Alabama, Georgia and Tennessee, has on more than one occasion indicated that simply documenting “failed outpatient therapy” for a total joint replacement is not sufficient to support the surgery. Similarly, Palmetto notes in this presentation that “failed outpatient therapy, admit for spinal fusion” is not sufficient evidence of Medical Necessity for a spinal fusion.

Supplemental Medicare Review Contractor (SMRC)

Transmittal 508 had an Effective and Implementation date of April 8, 2014 and added the Supplemental Medicare Review Contractor (SMRC) to the already long list of “Review Contractors” (MACs, CERT, RAC, PSCs, and ZPICs) performing medical review activities.

Strategic Health Solutions, LLC was awarded the SMRC Contract and they have been busy this year fulfilling one of their primary tasks of “conducting medical review based on the analysis of national claims data versus data that is limited to a specific jurisdiction as performed by Medicare Administrative Contractors (MACs).”

One such Project was a review of Medicare Part A Inpatient Services for Spinal Fusions. As part of the Project Background they noted that “analysis of Medicare claims data for calendar years 2012 and 2013 indicated a significant increase in billing and payment in Inpatient Hospitals Stays of Diagnosis-Related Group (DRG) Codes 459 (Spinal Fusion, except cervical spine, with major complications or comorbidities) and 460 (Spinal Fusion, except cervical spine, without major complications or comorbidities).”

The purpose of this project was to determine if claims had been appropriately adjudicated according to Medicare regulations and guidelines. At the end of the project 986 claims had been reviewed. Of those claims 589 were denied due to no response from the hospital and 374 claims were denied after review with a resultant overall Error Rate of 49%.

Project findings also included Specific Denial Reasons and Ways to Prevent Denials.

Denial Reasons

• Providers not responding to Additional Documentation Request (ADR) within the 45 day time frame
• Lack of documentation supporting the medical necessity of the procedure.
• Lack of documentation showing that conservative treatment was done prior to the surgical intervention.

Ways to Prevent Denials

• “Responding timely to SMRC ADR letters,
• Submit all documentation related to the services billed which support the medical necessity of services billed.”

Moving forward, hospitals need to be aware of NCD and LCD requirements to ensure records support the medical necessity of a procedure, be mindful of all of the Review Contractors that could be requesting records and submit requested information within the allowed time frame.