Knowledge Base Category -

Q:

How should hospitals handle inpatient billing when both covered and non-covered procedures are performed during a hospital inpatient admission? For example, an inpatient had a prostatectomy due to prostate cancer but a vasectomy was also performed during the surgery. Per a Medicare National Coverage Determination, vasectomies are non-covered by Medicare.

A:

Medicare instructs hospitals to remove the procedure code and related charges for the non-covered procedure from the inpatient claim.

Per the Medicare Claims Processing Manual, Chapter 1, section 60.2.1:

“…when a non-covered procedure is provided during an inpatient stay where a covered procedure is also performed, the claims processing system is unable to decipher what procedure code(s) is/are non-covered, so as to not consider such procedure(s) for payment (more specifically, to ignore non-covered procedures when grouping to the MS-DRG). Therefore, effective for inpatient discharges April 1, 2010, hospitals must only seek payment for covered services by removing non-covered procedure codes and related charges from the payable Type of Bill (TOB) 11X.”

If the hospital needs to submit a claim for the non-covered service to receive a denial, that procedure code and related charges should be reported on a no-pay claim (Type of Bill 11x) with the same From and Through Date as the covered 11x claim.

“Mortality rates from sepsis are higher than heart attack, stroke, or trauma. Sepsis needs to be viewed with the same urgency as these other life-threatening conditions because we know early treatment can decrease mortality.”- Craig M. Coopersmith, MD, FCCM, Task Force Member and Immediate Past President of the Society for Critical Care Medicine (SCCM)

On February 22, 2016 the Third International Consensus Definitions for Sepsis and Septic Shock (Sepsis-3) was released at SCCM’s 45th Critical Care Congress. The new recommendations are the result of extensive efforts by a Task Force of 19 leaders in the field of sepsis that was convened by the SCCM and the European Society of Intensive Care Medicine (ESICM). According to the SCCM announcement “the group’s recommendations have been endorsed by more than 30 medical societies from six continents, spanning disciplines from critical care and emergency medicine to infectious disease and family practice.”

Sepsis-3 Definitions

The Sepsis-3 definitions were published in the February 2016 issue of the Journal of American Medical Association (JAMA). “The task force recommended that its report be designated “Sepsis-3,” recognizing the two iterations to define sepsis (1991 and 2001) and signaling the need for future study.”  

Sepsis is now defined as “life threatening organ dysfunction due to a dysregulated host in response to infection.”

SOFA (Sequential [Sepsis-related] Organ Failure Assessment) is a tool to be used to clinically characterize the septic patient.

qSOFA (quick Sequential [Sepsis-Related] Organ Failure Assessment) is a new diagnostic tool that clinicians can conduct for patients outside a hospital, in an Emergency Department or General Hospital floor setting to identify patients at risk for sepsis. The three warning signs to assess for are:

• An alteration in mental status,
• A decrease in systolic blood pressure of less than 100mm Hg; and
• A respiration rate greater than 22 breaths/min.

Two or more of the warning signs increases the risk of a hospitalized patient having a longer length of stay in an ICU or to die in the hospital.

The task force stresses that SOFA and qSOFA are not intended to be used as a “stand alone definition of sepsis.”

Septic Shock is now defined as “a subset of sepsis in which particularly profound circulatory, cellular, and metabolic abnormalities substantially increase mortality.” The task force identified the following two new criteria for diagnosing septic shock:

• “Persisting hypotension requiring vasopressors to maintain MAP ≥65 mm Hg;” and
• “Blood lactate level ≥2 mmol/L despite adequate volume resuscitation.”

Sepsis (lay definition) the recently published definition that “sepsis is a life-threatening condition that arises when the body’s response to infection injures its own tissues,” was endorsed by the task force as it is consistent with the new Sepsis-3 definition.

Severe Sepsis was deemed “redundant” by the task force, “as sepsis has a mortality rate of 10 percent or higher, making the condition already severe.”

Systemic Inflammatory Response Syndrome (SIRS) “The current use of 2 or more SIRS criteria to identify sepsis was unanimously considered by the task force to be unhelpful.”

While SIRS due to a localized infection can no longer be coded as sepsis in ICD-10, Coding and CDI Professionals need to be mindful that at this time the code set definitions of sepsis and severe sepsis remain the same.

Q:

Since payment for observation services has changed from a composite payment to a comprehensive APC payment (see MMP article Observation Payment for 2016), have the requirements for reporting observation hours changed?

A:

No. The reporting of observation services remains the same as described in the Medicare Claims Processing Manual, Chapter 4, section 290.2.2. Some of the key information from this manual is:

• Observation services are only covered when provided by the order of a physician or other individual authorized to admit patients or to order outpatient services.
• Observation services are generally reported with revenue code 762.
• Other ancillary services performed while the patient is receiving observation care are separately reported.
• Observation time is reported per hour, rounded up to the nearest hour.
• Observation time begins at the clock time documented when observation care is initiated in accordance with a physician’s order.
• Observation time ends when all medically necessary services related to observation care are completed.
• Although 8 or more hours of observation care are required for an observation payment, all hours of observation should be reported.
• Observation services should not be billed concurrently with diagnostic or therapeutic services for which active monitoring is a part of the procedure. This means providers may have to “carve out” procedure time from the total stay to calculate observation hours.
• Standing orders for observation services following outpatient surgery are not appropriate.
• When observation services span more than one day, all observation hours are reported as a single line item for the date observation care began.

“Quality is never an accident; it is always the result of high intention, sincere effort, intelligent direction and skillful execution; it represents the wise choice of many alternatives.”- William A. Foster

The Office of Inspector General (OIG) began releasing Hospital Medicare Compliance Review (Compliance Reviews) Reports in early 2011. In Fiscal Year (FY) 2012 Compliance Reviews became part of the OIG’s Work Plan. Although the name of the project may have changed since 2012, Compliance Reviews remain a part of the Work Plan in FY 2016.

FY 2012 OIG Work Plan Project

• Medicare Inpatient and Outpatient Payments to Acute Care Hospitals (New)

We will review Medicare payments to hospitals to determine compliance with selected billing requirements. We will use the results of these reviews to recommend recovery of overpayments and identify providers that routinely submit improper claims. Prior OIG audits, investigations, and inspections have identified areas that are at risk for noncompliance with Medicare billing requirements. Based on computer matching and data mining techniques, we will select hospitals for focused reviews of claims that may be at risk for overpayments. Using the same data analysis techniques, we will identify hospitals that broadly rank as least risky across compliance areas and those that broadly rank as most risky. We will then review the hospitals’ policies and procedures to compare the compliance practices of these two groups of hospitals. We will also survey or interview hospitals’ leadership and compliance officers to provide contextual information related to hospitals’ compliance programs. (OAS; W-00-11-35538; various reviews; expected issue date: FY 2012; work in progress; and OEI; 00-00-00000; expected issue date: FY 2012; new start)

FY 2016 OIG Work Plan Project

• Selected inpatient and outpatient billing requirements

We will review Medicare payments to acute care hospitals to determine hospitals’ compliance with selected billing requirements and recommend recovery of overpayments. Prior OIG audits, investigations, and inspections have identified areas at risk for noncompliance with Medicare billing requirements. Our review will focus on those hospitals with claims that may be at risk for overpayments. (OAS; W-00-12-35538; W-00-13-35538; W-00-14-35538; W-00-15-35538; various reviews; expected issue date: FY 2016)

Compliance Reviews by the Numbers

As of February 2016, the OIG has released over 140 Compliance Reviews. According to these reviews, collectively this group of hospitals was overpaid $76,447,380.00. Adding insult to injury, in 2013 the OIG began extrapolating their findings. To date, 21 hospitals have been subject to extrapolation, including the most recent hospital Compliance Review released on February 3, 2016 for the University of Minnesota Medical Center for 2012 and 2013.

Extrapolating overpayments has exponentially increased the amount hospitals are to refund to the Contractor. Collectively, the $7,780,049.00 overpaid by 21 hospitals was extrapolated to $66,495,541.00. When you add this subset of hospitals to the overall amounts, the $76,447,380.00 that all hospitals were overpaid increased to $135,262,862.00 to be refunded to the Contractor. Now let’s take a closer look at the most recent Report released.

Medicare Compliance Review of University of Minnesota Medical Center for 2012 and 2013

The objective of this review was to “determine whether University of Minnesota Medical Center (the Hospital) complied with Medicare requirements for billing inpatient and outpatient services on selected types of claims.”

Audit Scope

This Compliance Review covered $24,360,864 in Medicare payments to the hospital for 3,351 claims potentially at risk for billing errors. The OIG selected a stratified random sample of 255 claims with payments totally $2,370,592. Claims consisted of 75 inpatient and 180 outpatient claims with dates of service in Calendar Year 2012 and 2013.

Risk Areas

Specific “risk areas” identified as being at risk for noncompliance with Medicare billing requirements included:

• Inpatient Rehabilitation Claims,
• Inpatient claims billed with high-severity-level DRG codes,
• Inpatient and Outpatient manufacturer credits for replaced medical devices,
• Outpatient dental claims,
• Outpatient claims billed with modifier -59,
• Outpatient claims billed for Doxorubicin Hydrochloride; and
• Outpatient claims billed for Herceptin.

Note that manufacturer credits for replaced medical devices and outpatient dental claims are also stand-alone projects within the FY 2016 Work Plan. This should be a red flag for hospitals to make sure you are in compliance with these two “risk areas.” A valuable resource is readily available in the specific findings in the report where the OIG provides references such as the Code of Federal Regulations (CFR) and the CMS Provider Reimbursement Manual (PRM) as guidance for compliance with billing requirements.

Audit Findings

The Hospital complied with Medicare billing requirements for 125 of the 255 inpatient and outpatient claims reviewed. The remaining 130 claims resulted in overpayments of $565,286, specifically:

• 29 Inpatient claims had billing errors, resulting in overpayments of $261,886, and
• 101 Outpatient claims had billing errors, resulting in overpayments of $303,400.

The OIG indicated that “these errors occurred primarily because the Hospital did not have adequate controls to prevent the incorrect billing of Medicare claims within the selected risk areas that contained errors.” On the basis of this sample, the OIG extrapolated that the hospital received overpayments of at least $3,266,841 for the audit period and recommended that the Hospital refund this amount to the Medicare contractor.

Looking at the dollars to be refunded, it is easy to see why Compliance Reviews continue to be a part of the OIG’s annual Work Plan. While Compliance Reviews are a part of the OIG Work Plan, hospitals should consider closely monitoring “risk areas” in these reports as an additional tool in your annual and ongoing compliance assessment, plan and actions.

Dilemma:

What Place of Occurrence code is assigned for an injury that occurred in the backyard of the patient’s home?

Solution:

Use Y92.096, Garden or Yard of Other Non-Institutional Residence as the Place of Occurrence of the External Cause. There are more options now for home as the Place of Occurrence in I-10, such as, House, Single Family. However as a reminder, these specific sites must be documented in order for that code to be assigned. Do not assume the home to be a single-family house.

Resource: AHA ICD-10 Coding Handbook, TruCode Encoder

Q:

How do I determine which devices, APCs, and DRGs are subject to Medicare’s device credit policy?

A:

Medicare publishes the list of APCs subject to the device credit policy in the annual Outpatient Prospective System (OPPS) Final Rule.  For 2016, Medicare is proposing to apply the device credit to all device-intensive APCs listed in Table 38 of the Proposed Rule (see page 70 of the 2016 OPPS Proposed Rule).  In previous years, CMS also included a separate list of the devices subject to the device credit policy.  For CY 2016 and beyond, they are proposing to no longer specify a list of devices, but “apply the APC payment adjustment to all replaced devices furnished in conjunction with a procedure assigned to a device-intensive APC when the hospital receives a credit for a replaced specified device that is 50 percent or greater than the cost of the device.”

In MLN Matters Article MM9121, CMS updated the list of MS-DRGs subject to the device credit policy.  Due to changes to MS-DRGs for 2015 and 2016, Medicare deleted two expired DRGs from the list and added seven DRGs.  The complete list of MS-DRGs, including the existing MS-

DRGs and the new MS-DRGs subject to the policy for replaced devices offered without cost or with a credit, is displayed in the table attached to CR9121.

For more information about Medicare’s Device Credit Policy, see the article Learning More about Medicare’s Device Credit Policy in this week's Wednesday@One which can also be accessed through the Knowledge Base section of our website or listen to our On-Demand Webinar on Understanding and Managing Device Credits which can be purchased in the Classes section of our website.

MMP Knowledge Base Webpage: http://www.mmplusinc.com/knowledge-base

MMP Classes Webpage: http://www.mmplusinc.com/earn-ceus

Q:

At the August 18th Hospital Open Door Forum, the CMS representative who answered questions about the “PO” modifier stated that the modifier applied to all outpatient services “paid under OPPS.” The instructions for the “PO” modifier from the July 2015 OPPS Update state that, “This modifier is to be reported with every HCPCS code for all outpatient hospital items and services furnished in an off-campus provider-based department of a hospital.” From reading of the 2015 OPPS Final Rule it appears the intent of this modifier is mainly to gather information on off-campus physician offices and clinics operating as hospital provider-based departments.

Based on differences in the above descriptions of the use of the “PO” modifier, to which types of outpatient services provided in off-campus provider-based departments (PBDs) should the PO modifier be appended?

A:

Medical Management Plus posed this question to CMS through the Hospital Open Door Forum email. The answer we received from Tiffany Swygert with CMS is that, “It applies to all services paid under the OPPS that are furnished in an off-campus provider based department of a hospital except for remote locations, satellite facilities and EDs. If the specific services are not paid under the OPPS, then no modifier is required under this policy.”

Ms. Swygert went on to clarify specifically that rehabilitative therapy services (PT, OT and Speech therapy) paid under the Medicare Physician’s Fee Schedule in accordance with an OPPS Status Indicator of “A” do not require a PO modifier when furnished in an off-campus PBD since they are not paid under the OPPS. Another common outpatient service not paid under OPPS is laboratory services when they are non-patient services or the only outpatient services performed. In this situation, most clinical lab services are paid under the Clinical Laboratory Fee Schedule (CLFS) and based on the same logic would not require a PO modifier. However, lab services furnished with other outpatient services are packaged services which means they are “paid under OPPS” although there is no separate payment. Therefore these lab services would require a PO modifier.

The use of the PO modifier is voluntary for 2015, but will be required on claims for off-campus provider-based departments beginning in 2016.

Hospitals should refer to the OPPS Addendum B to find a service’s status indicator and to Addendum D1 for the descriptions of the status indicators to determine which services are paid under OPPS and which are not.

Everyone loves a bargain, a special, or a deal. Package deals involve a discounted price when multiple services are bundled together. These have been especially popular with telecommunication companies lately and a lot of households have a “bundle” that includes cable or satellite television service, internet service and telephone service. Medicare, charged with efficient use of our tax dollars for healthcare services, loves a package deal also. So it is no surprise that we are seeing more and more service bundles for Medicare services.

Injections during cataract and other ocular surgeries are becoming more common, replacing the previous application of drugs via eye drops after the surgery. This technique may be referred to as “dropless cataract surgery.” In the 2015 Outpatient Prospective Payment System (OPPS) October Update, CMS reminds providers of correct coding conventions for injections provided during ocular surgery. The National Correct Coding Initiative clearly states that injection of a drug during a cataract extraction procedure or other ophthalmic procedure is not separately reportable – it is a packaged service. The CPT/ HCPCS code used to report the ocular procedure includes any injections performed during the surgery.

The injections during ocular surgery may be combined or compounded drugs such as triamcinolone and moxifloxacin with or without vancomycin. Effective June 30, 2015, the manner of reporting compounded drugs to Medicare changed. Modifier JF (Compounded drug) was discontinued and replaced with HCPCS code Q9977 (Compounded Drug, Not Otherwise Classified) effective July 1, 2015. HCPCS code Q9977 should be used to report compounded drug combinations, including the compounded drug combinations use for ocular surgeries. These drugs will be packaged as surgical supplies and separate payment will not be made for the drugs. Providers should be sure to report these drug combinations in accordance with these instructions. Providers should not:

• Report these drugs and drugs combinations with HCPCS code C9399
• Try to shift the financial liability to the patient for the drugs or injections using an Advance Beneficiary Notice (ABN) because both are a covered part of the surgical procedure
• Circumvent packaged payment by having patients purchase and bring the drugs with them to the facility for administration.

Other updates from the July OPPS update include the following:

Q:

How will the coding of blood transfusions change in ICD-10-PCS?

A:

Answer: Under I-9, the coder would search for, Transfusion in the Alphabetic Index and then look for the specific blood product to be transfused.

Example: Transfusion of PRBCs - 99.04

In I-10, much more clinical information will be required to arrive at the correct code. We will have to know the specific blood vessel that will receive the blood product and the approach/technique used to reach that blood vessel. Also, we will have to know whether the blood is Autologous (taken from the patient; auto-transfusion) or Non-Autologous (obtained from another person).

Example: Transfusion of Nonautologous Red Blood Cells into Peripheral Artery, Percutaneous Approach – 30253N1

To obtain more specific documentation from the clinician, it would be beneficial to list all of the physical locations in the hospital where the patient would have the opportunity to receive blood products, such as, at bedside, Operating Room, or Emergency Room. Inform the appropriate personnel in these areas of the documentation needed for code assignment. Or, simply request that this specific documentation be added to your hospital’s blood transfusion sheets.

Q:

CPT guidance indicates it is acceptable to report CPT code 31624, Bronchoscopy with bronchial alveolar lavage, with a bilateral modifier when this procedure is performed bilaterally. However, a comment on a recent MMP HIQUP report stated this was not appropriate. We are confused – could you please explain?

A:

This is one of those examples where the CPT guidelines differ from Medicare guidelines. Very similar to the guidelines for billing modifier 50 for certain cystoscopy procedures, but Medicare says modifier 50 should not be used.

To our understanding, when Medicare processes a hospital claim, they apply the bilateral surgery indicators from the Physician fee schedule RVU file, and that is the basis for the edit you see in the HIQUP Report. For the code range 31623 – 31656, the bilateral surgery indicator is a zero, which means “Do not submit these procedures with modifier 50”. The RVU Explanation for Bilateral Indicator “0” states: “The bilateral adjustment is inappropriate for codes in this category (a) because of physiology or anatomy, or (b) because the code description specifically states that it is a unilateral procedure and there is an existing code for the bilateral procedure.”

The good news is - - if you submit modifier 50, Medicare ignores it and pays the code as quantity of 1, so this should not result in an overpayment. We think this is a very low risk for recoupment since overpayment does not occur, but it is “possible” RAC could cite inappropriate billing and try to recoup your correct payment. We say this based on other RAC targets where the correct code was billed, correct payment was received, but there was some other technicality cited as incorrect billing (wrong revenue code, modifier RT/LT).

And don’t try billing this code with modifiers RT and LT . . . since the MUE for these codes is 1 – that would result in no payment at all for the procedure due to exceeding the MUE.