Knowledge Base Category -

I love my cats – sometimes… If there was ever an animal with a mind of its own, it is a cat. One minute they are kind and loving and the next they don’t want to be held or even touched (and watch out –some even bite). It is also impossible to direct their activity, thus the expression about herding cats. Sometimes dealing with Medicare and all their coverage policies is as hard as herding cats.

Remember LMRP’s? I had just started in Corporate Compliance when hospital representatives from around our state met to discuss the big concern – our Medicare Fiscal Intermediary (FI) would deny CT scans and other tests if they did not contain a diagnosis that supported “medical necessity” based on the new Local Medical Review Policies (LMRPs). There have been a lot of transitions since that time – no more FIs – they are now known as Medicare Administrative Contractors (MACs) and LMRPs are now LCDs (Local Coverage Determinations). There has also been a shift in the focus of “medical necessity.” There are more LCDs than ever, but a recent focus on procedures instead of simply diagnostic tests. For example, this month Cahaba finalized the draft policy for lumbar spinal fusion.

When medical necessity was simply a matter of checking for an appropriate diagnosis, the process was simpler. Providers could install upfront edits to check against the approved diagnoses lists. Today, as policies contain more coverage indications and limitations, meeting the coverage guidelines is a bigger challenge.

So what should hospitals do to ensure they are meeting Medicare’s coverage guidelines? Here are some suggestions to assist you in meeting this challenge.

• Be familiar with the different coverage policies – LCDs and National Coverage Determinations (NCDs). That is the reason we at MMP do a monthly article addressing coverage guidelines and listing new and retired policies of the MACs within our clients’ regions. For an idea of the scope of coverage policies:
• There are 338 NCDs
• There are 2773 LCDs overall
• Cahaba GBA (JJ MAC) has 64 active Part A LCDs
• First Coast (JN MAC) has 171 active LCDs (Part A and B)
• Novitas (JH MAC) has 84 active LCDs (A and B)
• Novitas (JL MAC) has 83 active LCDs (A and B)
• Palmetto (J-11 MAC) has 48 active Part A LCDs

To access a comprehensive list of the policies, use the Indexes tab on the Medicare Coverage Database website. Read the policies carefully – some still contain lists of covered diagnoses, but also remember that all indications and limitations within the policies must be considered.

• Policies that contain list of “covered” diagnoses are still adjudicated with automatic edits.
• For these, front end systems that identify the covered diagnoses are helpful – they allow a provider to request additional diagnostic information from the ordering physician prior to submitting a claim or obtain an Advance Beneficiary Notice (ABN) from the patient.
• Reviewing your Medicare denials by Claim Adjustment Reason Code (CARC) will identify those services that deny for lack of medical necessity. CARC 50 indicates “These are non-covered services because this is not deemed a ''medical necessity'' by the payer. Example: A diagnosis code was not submitted to support medical necessity based on Medicare's criteria.” Knowing the volume and financial impact of your medical necessity denials will help you determine which issues you need to address.
• Evaluate coverage policies for services your facility offers that are “at risk.” You will want to consider the volume of the services you offer, the reimbursement amounts for these services, and the conditions of the policy. For example, if your facility performs implantation of Automatic Implantable Cardiac Defibrillators, the reimbursement is significant and the requirements are detailed. Also, there has been a lot of review activity of these services by government agencies, such as the Department of Justice, which brings us to our next suggestion –
• Monitor review activity of Medicare contractors and affiliates. MACs are now required to post their planned pre- and post-payment reviews and the findings from these reviews. Recovery Auditors and the Supplemental Medicare Review Contractor also post their planned reviews on their websites. The Office of Inspector General (OIG) has an annual Work Plan of their planned review activities, publishes reports of their reviews, and posts enforcement actions. Medicare has a Quarterly Compliance Newsletter, Medicare Compliance Fast Facts and many other educational resources that target at risk areas. Also numerous newsletters from consultants, list-serves, etc. are available – for example, we hope you find our weekly newsletter helpful in identifying issues that you need to address.
• Have a robust process to address Additional Documentation Requests (ADRs) and monitor denial reasons. Sometimes this involves tracking the ADR outcome through FISS but the information is often worth the effort.

As you can see, there is a lot of information available to help providers ensure their services pass Medicare’s medical necessity criteria, but as you can also see, it will take some time and effort to sort it all out, develop plans, and take actions to ensure compliance. No one promised it would be easy – in fact, it is as hard as herding cats!

See the table below for recent Coverage Policy updates. Also a reminder that the Medicare Probe and Educate program that is examining providers’ compliance with the inpatient admission two-midnight rule will continue through April 30, 2015. There is pending legislation in Congress to address a number of expiring provisions, including the Probe and Educate program.

I love making lists – all sorts of lists: daily to-do’s, grocery lists, my favorite songs/books, long-term goals, etc. There is something satisfying about organizing things into a list format. For those fellow list-lovers out there, the long-awaited instructions on billing of pacemakers to Medicare should be right up your alley. There are lists of covered conditions, non-covered conditions, HCPCS codes, CPT codes, ICD-9 procedure codes, covered diagnosis codes, and sometimes allowed diagnosis codes.

Medicare has finally issued the manual guidance concerning the new guidelines for coverage of single chamber and dual chamber permanent cardiac pacemakers. Under the new guidelines, effective for dates of service on and after August 13, 2013, Medicare covers implanted permanent single chamber or dual chamber cardiac pacemakers for:

1. Documented non-reversible symptomatic bradycardia due to sinus node dysfunction.
2. Documented non-reversible symptomatic bradycardia due to second degree and/or third degree atrioventricular block.

Symptoms of bradycardia are symptoms that can be directly attributable to a heart rate less than 60 beats per minute (for example, syncope, seizures, congestive heart failure, dizziness, or confusion).

The list of conditions for which implanted cardiac pacemakers are not covered is much longer than the list of covered indications. Diagnosis codes for a few of the non-covered indications (exceptions) may be accepted on claims that also contain a covered diagnosis for the bradycardia. The non-covered conditions include:

1. Reversible causes of bradycardia such as electrolyte abnormalities, medications or drugs, and hypothermia.
2. Asymptomatic first degree atrioventricular block. *(exception)
3. Asymptomatic sinus bradycardia.
4. Asymptomatic sino-atrial block or asymptomatic sinus arrest. *(exception)
5. Ineffective atrial contractions (for example, chronic atrial fibrillation or flutter, or giant left atrium) without symptomatic bradycardia. *(exception)
6. Asymptomatic second degree atrioventricular block of Mobitz Type I unless the QRS complexes are prolonged or electrophysiological studies have demonstrated that the block is at or beyond the level of the His Bundle (a component of the electrical conduction system of the heart).
7. Syncope of undetermined cause. *(exception)
8. Bradycardia during sleep.
9. Right bundle branch block with left axis deviation (and other forms of fascicular or bundle branch block) without syncope or other symptoms of intermittent atrioventricular block. *(exception)
10. Asymptomatic bradycardia in post-myocardial infarction patients about to initiate long-term beta-blocker drug therapy.
11. Frequent or persistent supraventricular tachycardias, except where the pacemaker is specifically for the control of tachycardia. *(exception)
12. A clinical condition in which pacing takes place only intermittently and briefly, and which is not associated with a reasonable likelihood that pacing needs will become prolonged.

Hospital Claim Requirements

For outpatient claims, implantable cardiac pacemakers are reported with the following -

Pacemaker device HCPCS Codes

• C1785 – Pacemaker, dual chamber, rate-responsive (implantable);
• C1786 – Pacemaker, single chamber, rate-responsive (implantable);
• C2619 – Pacemaker, dual chamber, nonrate-responsive (implantable);
• C2620 – Pacemaker, single chamber, nonrate-responsive (implantable);

CPT Procedure Codes

• 33206 – Insertion or replacement of permanent pacemaker with transvenous electrode(s) – atrial
• 33207 – Insertion or replacement of permanent pacemaker with transvenous electrode(s) –ventricular
• 33208 – Insertion or replacement of permanent pacemaker with transvenous electrode(s) – atrial and ventricular

A –KX modifier must be appended to the procedure claim line(s) to attest that documentation is on file verifying the patient has non-reversible symptomatic bradycardia, with symptoms such as syncope, seizures, congestive heart failure, dizziness, or confusion. Claims with one of the above listed pacemaker insertion CPT codes without the KX modifier will be returned to the provider.

Report pacemaker insertion procedures on a hospital inpatient claim with one of the following procedure codes:

• 37.81 Initial insertion of single chamber device, not specified as rate responsive
• 37.82 Initial insertion of single chamber device, rate responsive
• 37.83 Initial insertion of single chamber device

Both inpatient and outpatient claims require one of the following diagnosis codes for the services to be covered by Medicare:

• 426.0 Atrioventricular block, complete (I44.2)
• 426.12 Mobitz (type) II atrioventricular block (I44.1)
• 426.13 Other second degree atrioventricular block (I44.1)
• 427.81 Sinoatrial node dysfunction (I49.5)
• 746.86 Congenital heart block (Q24.6)

 

 

There are diagnoses from the “non-covered” indications (exceptions) that the Medicare Administrative Contractors may decide to accept on claims, but only when reported with one of the above “covered” diagnosis codes. The claim must contain one of the covered diagnosis codes in addition to one of the following diagnosis codes. Also note, this coverage is at the discretion of the MAC. One more note - after ICD-10 implementation, the presence of code R55 (syncope and collapse) will result in denial. These codes are:

• 426.10 Atrioventricular block, unspecified/ I44.30 Unspecified atrioventricular block;
• 426.11 First degree atrioventricular block/ I44.0 Atrioventricular block first degree;
• 426.4 Right bundle branch block/ I45.10 Unspecified right bundle-branch block/ I45.19 Other right bundle-branch block;
• 427.0 Paroxysmal supraventricular tachycardia/ I47.1 Supraventricular tachycardia;
• 427.31 Atrial fibrillation/ I48.1 Persistent atrial fibrillation/ I48.91, Unspecified atrial fibrillation;
• 427.32 Atrial flutter/ I48.3 Typical atrial flutter/ I48.4 Atypical atrial flutter or I48.91 Unspecified atrial fibrillation; or
• 780.2 Syncope and collapse/R55 Syncope and collapse (R55 is the ICD-10 dx code but is not payable upon implementation of ICD-10 and is only included here for information purposes). 

 

For additional information, please refer to the MLN Matters Article MM9078, Transmittal R3204CP, and Transmittal R179NCD. This includes instructions on professional billing, listing of I-10 procedure codes, and coverage not addressed by the NCD that is left to the discretion of the Medicare Administrative Contractors.

Now you have Medicare’s lists… When hospitals implement these instructions, they will want to have a checklist of their own to make sure they have addressed all the requirements for coverage.

Other recent coverage updates include:

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.

 

On January 26th, Health and Human Services Secretary Sylvia M. Burwell “announced measurable goals and a timeline to move the Medicare program, and the health care system at large, toward paying providers based on the quality, rather than the quantity of care they give patients.” According to the CMS Press Release, “this is the first time in the history of the Medicare program that HHS has set explicit goals for alternative payment models and value-based payments.”

This call to action by Secretary Burwell brings to mind the Institute for Health Improvement’s (IHI) Plan-Do-Study-Act (PDSA) cycle that involves planning a test or observation, trying out the test on a small scale, analyzing data and studying the results and finally, refining the change based on what was learned.

Plan-Do-Study

Long before the Affordable Care Act, it was obvious that the current state of healthcare in the United States was more reactive than proactive and that the current Prospective Payment System was not financially sustainable.

In a related Fact Sheet to the January 26th announcement, CMS indicated that “the Affordable Care Act offers many tools to improve the way providers are paid to reward for quality and value instead of quantity, to strengthen care delivery by better integrating and coordinating care for patients, and to make information more readily available to consumer and providers. Doing so will improve coordination and integration of health care, engage patients more deeply in decision-making and improve the health of patients – with a priority on prevention and wellness.”

While not an all-inclusive list, specific examples of progress attributed to the Affordable Care Act by CMS include:

• Years 2011, 2012 and 2013 saw the slowest growth in real per capita national healthcare expenditures on record in part due to slow growth in per-beneficiary spending across Medicare, Medicaid, and the private insurance beneficiary population.
• “Looking forward, due primarily to the persistent slowdown in health care costs, the Congressional Budget Office now estimated that Federal spending on Medicare and Medicaid in 2020 will be $188 billion below what it projected as recently as August 2010.”
• The Partnership for Patients has been instrumental in “patient harm falling by 17%, saving 50,000 lives and billions of dollars.”
• The Affordable Care Act tied Medicare payment for hospitals to readmission rates. Since 2012 the efforts made by hospitals “translates into an 8 percent reduction in the rate and an estimated 150,000 fewer hospital readmissions among Medicare beneficiaries between January 2012 and December 2013.”
• Providers are engaged as evidenced by the fact that currently “there are 424 organizations currently participating in Medicare ACOs, serving over 7.8 million Medicare beneficiaries” and the “ACOs participating in the Shared Savings Program and the Pioneer ACO Model combined generated over $417 million in savings for Medicare.”
• The three mandated quality programs for hospitals (Hospital Value-Based Purchasing Program, Hospital Readmissions Reduction Program and Hospital-Acquired Condition Reduction Program) reward hospitals for the quality of care they provide to patients.
• Improvement in the availability of information to guide the beneficiary in their decision-making has been made available through Physician Compare, updates to Hospital Compare, and the May 2013 release of Charge Data for Hospital and Physician Services by CMS.

Act

Again, Secretary Burwell made the HHS call to action by setting explicit alternative payment model goals and value based payment goals to “help drive the health care system towards greater value-based purchasing – rather than continuing to reward volume regardless of quality of care delivered.”

Alternative Payment Models Goal

By the end of 2016 have 30 percent of Medicare payments in alternative payment models.

By the end of 2018 have 50 percent of Medicare payments in alternative payment models.

The Medicare Shared Savings Program (MSSP) and Pioneer Accountable Care Organizations (ACOs), the Bundled Payment for Care Initiative, and the Comprehensive Primary Care Initiative are examples of current Alternative Payment Models. “HHS is working with private payers, including health plans in the Health Insurance Marketplace and Medicare Advantage plans, as well as state Medicaid programs to move in the same direction toward alternative payment models and value-based payment to providers and to meet or exceed the goals outlined above wherever possible.”

Value Based Payments Goal

By 2016 have 85 percent of Medicare fee-for-service payments tied to quality of value.

By 2018 have 90 percent of Medicare fee-for-service payments tied to quality of value.

The Hospital Value Based Purchasing Program, Hospital Readmission Reduction Program and the Hospital-Acquired Condition Program are the three Affordable Care Act Mandated Quality Programs that have begun to tie a hospitals payment to quality of value.

How to Reach the Goals

Secretary Burwell also announced the creation of a Health Care Payment Learning and Action Network. This Network “will accelerate the transition to more advanced payment models by fostering collaboration between HHS, private payers, large employers, providers, consumers, and state and federal partners. Working together, Learning and Action Network partners will:

• Serve as a convening body to facilitate joint implementation and expansion of new models of payment and care delivery
• Identify areas of agreement around movement toward alternative payment models and define how best to report on these new payment models
• Collaborate to generate evidence, share approaches, and remove barriers
• Develop common approaches to core issues such as beneficiary attribution, financial models, benchmarking, and risk adjustment
• Create implementation guides for payers and purchasers

Alignment between HHS, private sector payers, employers, providers, and consumers will help health care payments transition more quickly from pure fee-for-service to alternative payment models – a critical step toward better care, smarter spending, and healthier people.” The first Network meeting is set for March 2015.

As health care in this country is propelled towards new payment models and payment for quality instead of quantity, there are a couple of valuable resources that hospitals should be familiar with.

First is the CMS Innovation Center. Per the Affordable Care Act, “the purpose of the [Center] is to test innovative payment and service delivery models to reduce program expenditures…while preserving or enhancing the quality of care furnished to individuals under such titles.” I encourage you to visit their website to find out where and what Innovation is Happening in your state and while there check out the November 10, 2014 CMS Innovation Center Update Webinar that featured Dr. Patrick Conway, CMS Deputy Administrator for Innovation and Quality and CMS Chief Medical Officer.

A second resource is the Health Care Transformation Task Force. On January 28, 2015, just two days after the CMS announcement, this group “whose members include six of the nation’s top 15 health systems and four of the top 25 health insurers, challenged other providers and payers to join its commitment to put 75 percent of their business into value-based arrangements that focus on the Triple Aim of better health, better care and lower costs by 2020.”

Resources:

Fact Sheet: Better Care, Smarter Spending, Healthier People: Why It Matters: http://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2015-Fact-sheets-items/2015-01-26-2.html

Fact Sheet: Better Care, Smarter Spending, Healthier People: Paying Providers for Value, Not Volume: http://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2015-Fact-sheets-items/2015-01-26-3.html

Fact Sheet: Better Care, Smarter Spending, Healthier People: Improving Out Health Care Delivery System: http://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2015-Fact-sheets-items/2015-01-26.html 

American Hospital Association Response to January 26th Announcement:

http://www.aha.org/presscenter/pressrel/2015/150126-pr-medicare.shtml

American Medical Association Response to January 26th Announcement: http://www.ama-assn.org/ama/pub/news/news/2015/2015-01-26-hhs-shifting-medicare-reimbursements-volume-value.page

 

 

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.

 

The human race continues to make amazing strides in technology that are wondrous and change the very ways we live and even how long we may live. There are devices that monitor how many steps we take in a day, that allow us to control our home electrical systems from our smart phones and that track our “global positioning” wherever we go. And in the medical realm, there is a new FDA-approved device to clip mitral valve leaflets together and potentially prevent the heart failure that could result from mitral regurgitation. This device is inserted via a Transcatheter Mitral Valve Repair (TMVR) procedure.

A National Coverage Determination (NCD) for coverage of TMVR was announced in MLN Matters Article MM9002 effective for dates of service on and after August 7, 2014. Medicare will cover TMVR for treatment of Mitral Regurgitation (MR) when furnished under Coverage with Evidence Development (CED). This means that patients receiving this procedure must be entered into a national qualified registry or part of a FDA-approved, randomized clinical trial.

Some of the requirements for coverage of TMVR for mitral regurgitation include:

• The TMVR procedure must be performed by an interventional cardiologist and/or cardiac surgeon
• For treatment of significant, symptomatic, degenerative mitral regurgitation for FDA-approved indication or for non-listed indications for MR within context of approved clinical trial
• Face-to-face examination and evaluation of patient prior to TMVR by cardiac surgeon and cardiologist experienced in mitral valve surgery with documentation of their decision and rationale
• Performed in a hospital with appropriate infrastructure and with a surgical program, interventional cardiology program, and heart team that meets certain specific requirements. There are numerous and very detailed requirements that the hospital must meet – refer to the NCD for the specifics of these requirements.

TMVR is non-covered for the treatment of MR when not furnished under CED according to the NCD criteria. TMVR used for the treatment of any non-MR indications are non-covered by Medicare.

Hospital Claim Requirements

This is an inpatient-only procedure. Hospital inpatient claims (11x type of bill) must contain:

• ICD-9 Procedure Code - 35.97 - Percutaneous mitral valve repair with implant
• ICD-9 Diagnosis Code for TMVR for MR Claims is - 424.0 – Mitral valve disorder
• Secondary ICD-9 diagnosis code V70.7
• Condition Code 30
• An 8-digit National Clinical Trial Number

For complete information, including instructions for physician claims, see the MLN Matters article referenced above.

This month’s coverage updates include a number of retired LCDs from the MACs within our client regions and Palmetto finalized the LCD on Wound Debridements. Please refer to our coverage article from July 2014 for more information about the various wound care/debridement local coverage policies.

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.

Over the past several weeks, our series of FY 2015 IPPS Final Rule articles have included Quality Program updates (Hospital Value Based Purchasing Program, Readmission Reduction Program and HAC Reduction Program), MS-DRG updates and the discussion of a potential Short Stay Hospital Payment System for Hospitals.

Common to all three articles is the payment impact to hospitals whether it is a quality program payment incentives or penalties, new MS-DRGs impacted by the Post-Acute Transfer Rule or what payment to hospitals for Short Inpatient Stays may look like in the future.

This week our focus takes a one-eighty as we discuss hospital charges by reviewing the Final Rule discussion of the Requirement for Transparency of Hospital Charges Under the Affordable Care Act. CMS used the Final Rule to serve as an opportunity to reiterate the requirement for hospitals to share what they charge for items and services provided to their patients. Even though the text for this topic takes up less than one page of the 597 page Final Rule, it is important that hospitals are aware of and quickly put a plan in place to comply with this requirement.

What is in the Final Rule?

The discussion in the Final Rule is broken into an overview of hospital charges and the Transparency of Hospital Charges Requirement. Key information from both sections is as follows:

Overview

• Hospital charges are determined by the individual hospital for items and services provided to patients.
• What Hospitals charge and what hospitals are paid from Medicare for items and services provided are two very different amounts.
• “Hospital reported charges are used in determining Medicare’s national payment rates (for example, billed charges are adjusted to cost to determine how much to pay for one type of case relative to another.)”
• Per CMS, hospital charges “remain an important component of our healthcare system. For example hospital charges are often billed, in full, to uninsured patients who cannot benefit from discounts negotiated by insurance companies.”
• The wide variation in charges by hospital makes it challenging for patients to compare the cost of similar services.
• In 2013, CMS released inpatient and outpatient data providing hospital charges that “in general were significantly higher than the amount paid by Medicare under the IPPS or the OPPS.”
• CMS believes that this “charge data comparisons is introducing both transparency and accountability to hospital pricing, and we are continuing to pursue opportunities to report on hospital charging practices.”

Transparency Requirement Under the Affordable Care Act

Section 2718(e) of the Public Health Service Act requires that “[e]ach hospital operating within the United States shall for each year establish (and update) and make public (in accordance with guidelines developed by the Secretary) a list of the hospital’s standard charges for items and services provided by the hospital, including diagnosis-related-groups established under section 1886(d)(4) of the Social Security Act.”

In the FY 2015 IPPS Proposed Rule CMS reminded hospitals of their obligation to comply with this section of the Act. With the Final Rule they reiterated the following specific guideline for hospitals:

• “Either make public a list of their standard charges (whether that be the chargemaster itself or in another form of their choice), or their policies for allowing the public to view a list of these charges in response to an inquiry.”

CMS went on to indicate that “hospitals are in the best position to determine the exact manner and method by which to make the list public in accordance with the guidelines.”

CMS’s Expectations

• Make data consumer friendly “to help patients understand what their potential financial liability might be for services they obtain at the hospital, and to enable patients to compare charges for similar services across hospitals.”
• CMS expects hospitals to update their data at a minimum annually or as needed to reflect their current charges.
• CMS will continue to post data on the CMS Web site in a consumer friendly way. Data currently posted includes:
• May and June 2013 hospital charge data release,
• April 2014 physician data releases; and
• Data on geographic variation in payments and payments per beneficiary.

Consider yourself reminded, now what?

While you as the hospital are in the best position to determine how you are going to comply with these guidelines, the question that comes to mind is what information is already available to the public? It is amazing how much data is available and yet how far we still have to go to provide data in a consumer friendly format, let alone helping the public understand that charges and costs are two very different things.

What Data is Available?

As just mentioned, there is quite a bit of information available on the internet for consumers. However, after spending quite some time looking for and at the data, I am not convinced that consumers know what is available or could understand what it means.

State Level

The National Conference of State Legislature Web Site has a Web page dedicated to Resources for transparency and disclosure of health costs and provider payments: state actions. For those interested I encourage you to visit this site to see what if any legislation has been enacted in your state.

Ultimately, what I found was that the issue of price transparency is not a new one, several states have no legislation in place and several state health price information websites are maintained by State Hospital Associations.

Examples provided on this site include:

• “California’s Common Surgeries and Price Comparisonis a website allowing healthcare consumers to view and compare the price of 28 common elective inpatient procedures at hospitals across California.
• Florida has established a Website that enables consumers to obtain data on hospitals' charges and readmission rates (http://www.floridahealthfinder.gov/CompareCare/SelectChoice.aspx).
• Maryland’s Health Care Commission provides consumers with an online hospital pricing guidethat lists, for each acute care hospital in Maryland, the number of cases, the average charge per case, and the average charge per day for the 15 most common diagnoses.
• Oregon’s website "Oregon Pricepoint," is sponsored and maintained by the Oregon Association of Hospitals and Health Systems and allows health care consumers to receive basic, facility-specific information about services and charges.
• New Jersey launched to help consumers make informed choices regarding price and quality of hospital services in New Jersey.”

A couple of other states examples that I found include:

• Iowa’s Hospital Association Web site includes their Iowa Hospital Charges Compare that “allows health care consumers to access basic information about services and charges at Iowa hospitals.”
• Virginia’sPricePoint System through the Virginia Hospital & Healthcare Association that is described as “a user friendly resource created to provide basic demographic, quality and charge information on Virginia hospitals and to promote consumer/hospital interaction. Virginia’s hospitals are committed to providing hospital charge and quality data to help consumers make informed decision about their health care.”

National Level

The CMS releases Medicare Provider Utilization Payment Data

On May 8, 2013 the Department of Health and Human Services (HHS) released new hospital charge data. The data posted was comprised of charges for services for the 100 most common Medicare inpatient stays. In a related Fact Sheet, CMS indicated that “this data enables comparisons between the amounts charged by individual hospitals within local markets, and nationwide, for services that may be provided during similar inpatient stays.”

American Hospital Association (AHA) and Price Transparency

A search for “hospital price transparency” on the AHA website resulted in about 841 items. There were two recent items of interest to share with you in this article.

• A March 21, 2014 Issue Paper: Hospital Price Transparency that provides a background, current initiatives and the AHA Principles for Price Transparency.
• The August 15, 2014 release of the resource “Achieving Price Transparency for Consumers: Toolkit for Hospitals.” According to the AHA, “this resource will spark conversation and action by allowing hospitals to assess their current efforts and learn from others through case examples and sample price transparency tools.”

If you are unsure where to start I encourage you to look to the examples of hospitals efforts in the AHA Toolkit. Whatever you choose, remember that you are in the best position to determine how your facility will comply with the price transparency requirement in the Affordable Care Act.

Resource:

FY 2015 IPPS Final Rule pages 50145 – 50146 at:

http://www.gpo.gov/fdsys/pkg/FR-2014-08-22/pdf/2014-18545.pdf

Link to Medicare Provider Utilization and Payment Data CMS webpage:

http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Medicare-Provider-Charge-Data/index.html

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.

The FY 2015 Inpatient Prospective Payment System (IPPS) Final Rule did little to nothing to alleviate the 2-Midnight Rule or Physician Certification requirements for hospitals. As we continue our review of the Final Rule, this week’s article focuses on public comments regarding creating a payment policy for short inpatient hospital stays, the continued request for suggested exceptions to the 2-Midnight rule, the Probe & Educate Program and Physician Certification changes in the IPPS Final Rule as well a proposed change in the FY 2015 Outpatient Prospective Payment System (OPPS) Proposed Rule.

Medicare Payment for Short Inpatient Hospital Stays

In the FY 2015 IPPS Proposed Rule CMS requested public comments on a payment methodology for short inpatient hospital stays. Specifically, CMS outlined specific questions/considerations that they considered to be critical for the payment methodology.

Defining Short or Low Cost Inpatient Hospital Stays

Question

How to define short inpatient hospital stays for determining an appropriate Medicare payment?

• Should a short inpatient hospital stay be one where the average mean length of stay (AMLOS) is short for the MS-DRG?
  Example: MS-DRG 313 (Chest Pain)
• In FY 2014 the AMLOS is 2.1 days with a national average payment of $3,217.87
• Should a short inpatient hospital stay be an atypically short or low cost case relative to other cases within the same MS-DRG
  Example: MS-DRG 871 (Septicemia or Severe Sepsis without Mechanical Ventilation 96+ hours with MCC)
• In FY 2014 the AMLOS is 6.7 days with a national average payment of $9,949.52

Considerations

CMS believes that if a payment methodology was adopted that paid for atypically low-cost or short stay cases relative to the average case in the same MS-DRG (i.e. MS-DRG 871) this policy would be less likely to apply to MS-DRGs that are already low cost or a short stay (i.e., MS-DRG 313).

Determining Appropriate Payment for Short Inpatient Hospital Stays

Question

How is an appropriate payment determined once a short stay has been identified? “Some have suggested a per diem based payment amount, perhaps modelled on the existing transfer payment policy.”

Considerations

Again, a per diem based payment amount is more likely to impact payment for atypically short-stay or low-coast cases in an MS-DRG with a longer AMLOS. This would be less likely to impact MS-DRGs with a short AMLOS as the full IPPS payment would be made in 1 or 2 days.

Given that payment for the same case will be very different under the OPPS and IPPS dependent on whether or not the beneficiary has been formally admitted as an inpatient, pursuant to a physician order:

• When should an IPPS payment be limited to an OPPS payment amount?
• When would it be appropriate for the payment to be higher?
• If a higher payment is determined to be appropriate then how should the additional payment amount be determined?

Public Comments

Public comments received by the CMS made it apparent that for any short-stay policy there should be some general principles that the policy adheres and it should include some or all of the following:

• The policy “should provide more appropriate and adequate payment for medically necessary inpatient services that span less than 2 midnights."
• Payments should be higher than the OPPS rate but not exceed the full IPPS payment for a given MS-DRG.
• Admissions for procedures on the “inpatient only” list should be excluded from a short-stay policy.
• The policy should be budget neutral.
• “Hospitals should be eligible for all add-on payments they would otherwise receive (for example, DHS and IME), either in full or on a pro rate basis.”
• Short inpatient stays for beneficiaries should be considered inpatients and cost-sharing obligations should be calculated under Medicare Part A.
• The policy should not increase administrative burden for hospitals, physicians, or other medical providers.
• “CMS should provide clear and consistent guidance and allow adequate time for hospitals to implement the short-stay policy prior to its effective date.”
• Short stay policy considerations submitted included considering a per diem approach modeled after the existing transfer policy, creating MS-DRG weights for short-stay and nonshort-stay cases, or allowing the full MS-DRG payment for short stays in the interim while this issue is studied further.
• Other commenters indicated that to create a separate MS-DRG system for short stays undermines the MS-DRG system that “is predicated on the understanding that there will be a diversity of treatment patterns and individual patient circumstances for any given clinical condition, and that this diversity balances out – high-intensity cases are balanced by low-intensity cases.”
• MedPAC intends to explore alternative short-stay policies in their next work cycle.

At the end of the day, CMS thanked the commenters and they “look forward to continuing to actively work with stakeholders to address the complex question of how to further improve payment policy for short inpatient hospital stays.”

Suggested Exceptions to the 2-Midnight Benchmark

The CMS has identified that unforeseen circumstances such as a beneficiary’s death, transfer to another hospital, unexpected clinical improvement, election of hospice care, or leaving the hospital against medical advice (AMA) are all situations that could result in a hospital stay shorter than the two midnight expectation by the physician. In these instances, when a medical record contains an inpatient order, the physician’s clinical expectation and orders are clearly documented and support an expected medically necessary two midnight stay, “the patient may be considered to be appropriately treated on an inpatient basis and hospital inpatient payment may be made under Medicare Part A.”

The CMS has also indicated that there can be exceptions to the 2-midnight benchmark and it would still be appropriate for the beneficiary to be an inpatient. Specifically, in the 2014 IPPS Final Rule the exception was provided of procedures on the OPPS inpatient only list always being appropriate as an inpatient regardless of length of stay as long as the procedure is medically necessary and performed pursuant to a physician order and formal admission.

To date, one additional exception has been added in sub-regulatory guidance. “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.”

The CMS continues to be open to suggestions regarding potential additional exceptions to the 2-midnight benchmark. Suggestions can be sent to CMS via written correspondence or email at SuggestedExceptions@cms.hhs.gov.

Medicare Administrative Contractor (MAC) Probe and Educate Program

While there were no changes made to the 2-midnight rule that was finalized in the FY 2014 IPPS Final Rule, CMS does indicate in the 2015 IPPS Final Rule that “during the summer and fall of 2014, CMS plans to evaluate the results of the “probe & educate” process (a process by which MACs are reviewing a prepayment, provider-specific probe sample of inpatient Part A claims for appropriateness of inpatient admission under the revised 2-midnight benchmark and providing provider-specific education, as necessary, to correct improper payments) and issue additional subregulatory guidance to our claim review contractors, if necessary, to ensure consistency in application of the 2-midnight policy.”

Revision of the Requirements for Physician Certification for Critical Access Hospital Inpatient Services

For Critical Access Hospitals (CAHs) to receive payment under Medicare Part A for inpatient services a physician must certify “that the individual may reasonably be expected to be discharged or transferred to a hospital within 96 hours after admission to the critical access hospital.”

The 2014 IPPS Final Rule revised the physician certification timing requirement for CAHs from being required no later than 1 day before the date on which the claim for payment for the inpatient CAH service is submitted to require that “the certification must be completed, signed, and documented in the medical record prior to discharge (78 FR 50970).”

The 2015 IPPS Final Rule reversed the 2014 ruling and finalized that “a CAH is required to complete all physician certification requirements no later than 1 day before the date on which the claim for the inpatient service is submitted.”

FY 2015 OPPS Proposed Changes to the Physician Certification

Within the July 3rd, 2014 release of the FY 2015 OPPS Proposed Rule came two proposals that have the potential to ease some of the burden created by the FY 2014 IPPS Final Rule for Inpatient hospitals.

Inpatient Order Proposed Change

“While we continue to believe that the inpatient admission order is necessary for all inpatient admissions, we are proposing to require such orders as a condition of payment based upon our general rulemaking authority under section 1871 of the Act rather than as an element of the physician certification under section 1814(a)(3) of the Act.”

Physician Certification Proposed Change

“We are proposing to change our interpretation of section 1814(a)(3) of the Act to require a physician certification only for long-stay cases and outlier cases.”

“We are proposing to revise paragraph (a) of § 424.13 to specify that ‘Medicare Part A pays for inpatient hospital services (other than inpatient psychiatric facility services) for cases that are 20 inpatient days or more, or are outlier cases under subpart F of Part 412 of this chapter, only if a physician certifies or recertifies the following:

1. The reasons for either –
2. Continued hospitalization of the patient for medical treatment or medically required diagnostic study; or
3. Special or unusual services for cost outlier cases (under the prospective payment system set forth in subpart F or part 412 of this chapter).
4. The estimated time the patient will need to remain in the hospital.
5. The plans for posthospital care, if appropriate.’

If both proposals are finalized, hospitals need to be mindful of the following:

• The Inpatient Order remains a Condition of Participation (CoP) and a requirement for payment for Medicare Part A Services.
• Thorough physician documentation in the medical record (i.e. History & Physical, MD Progress Notes and Physician Orders) continues to be required to support the medical necessity for hospital care expected to span at least two midnights.
• The Inpatient Admission Order must still be signed prior to the beneficiary’s discharge. Without the inpatient order hospitals should not submit a Medicare Part A claim. In a response to a comment in the 2014 IPPS Final Rule, CMS indicated that “because the physician order is a requirement as a condition of payment, if the order is not documented in the medical record, the hospital should not submit a claim for Part A payment.”
• For Medicare beneficiaries that reach a 20 day length of stay it will be important to make sure that the Physician Progress notes on that day support the need for a continued medically necessary hospitalization and the plan of care for the beneficiary.

For more information:

• Details regarding short inpatient hospital stays, 2-midnight benchmark exceptions, and the probe and educate program can be found on pages  50146 – 50148 of the Final Rule at http://www.gpo.gov/fdsys/pkg/FR-2014-08-22/pdf/2014-18545.pdf.
• Details regarding the Physician Certification for CAHs can be found on pages 1278-1286 of the pre-published Final Rule.
• The proposed revision to the Physician Certification can be found in the Federal Register / Vol. 79, No. 134 / Monday, July 14, 2014 / Proposed Rules
• The Final Rule has a scheduled publication date of 08/22/2014 and will be available online at: http://ofr.gov/(S(pcl2zalo5cz115uiw2as4qqr))/inspection.aspx.

As we continue our review of the FY 2015 Inpatient Prospective Payment System (IPPS) Final Rule, this week’s article focuses on MS-DRG changes and the resulting changes to the Post-Acute Transfer DRGs.

MS-DRG Classification Changes in the Final Rule

Endovascular Cardiac Valve Replacement

Request

There was a request to create a new MS-DRG specific for various types of cardiac valve replacements performed by an endovascular or transcatheter technique.

CMS Data Analysis

The ICD-9-CM procedure codes (35.05, 35.06, 35.07, 35.08 and 35.09) are currently assigned to MS-DRGs 216, 217, 218, 219, 220 and 221. FY 2013 MedPar data revealed the following number of cases:

CMS established five criteria in the FY 2008 IPPS final rule (72 CFR 47169) to determine if subgroups of base MS-DRG cases should be created. In 2008 the criteria was based on average charges that was later converted to average costs. Criteria warranting a creation of a CC or MCC subgroup within a base MS-DRG must meet all of the following:

1. A reduction in variance of costs of at least 3 percent.
2. At least 5 percent of the patients in the MS-DRG fall within the CC or MCC subgroup.
3. At least 500 cases are in the CC or MCC subgroup.
4. There is at least a 20-percent difference in average costs between subgroups.
5. There is a $2000 difference in average costs between subgroups.

Data analysis supported the creation of a new base MS-DRG subdivided into two severity levels. CMS’s advisors noted that patients undergoing endovascular cardiac valve replacements are significantly different than the population undergoing an open chest cardiac valve replacement. They also noted that grouping these procedures separately “provides greater clinical cohesion for this subset of high risk patients.”

FY 2013 MedPar data for the two proposed MS-DRGs as provided in the final rule:

Final Rule

Two new MS-DRGs were created for endovascular cardiac valve replacements.

• MS-DRG 266 (Endovascular Cardiac Valve Replacement with MCC); and
• MS-DRG 267 (Endovascular Cardiac Valve Replacement without MCC).

Shoulder Replacement Procedures

Request

A request was made to change the MS-DRG assignment for the following two shoulder replacement procedure codes:

 

• 81.88 (Reverse total shoulder replacement); and
• 81.97 (Revision of joint replacement of upper extremity).

 

 

For procedure code 81.88 the request was made to reassign this procedure from MS-DRGs 483 and 484 (Major Joint/Limb Reattachment Procedure of Upper Extremities with CC/MCC and without CC/MCC respectively) to MS-DRG 483 only.

For procedure code 81.97 the request was made to reassign this procedure code from MS-DRGs 515, 516, and 517 (Other Musculoskeletal System and Connective Tissue O.R. Procedures with MCC, with CC, and without CC/MCC, respectively), to MS-DRG 483.

Based on the five criteria to determine if subclasses should be created for a base MS-DRG the claims data no longer supported the two severity level MS-DRGs 483 and 484. In the proposed rule CMS “proposed to collapse MS-DRGs 483 and 484 into a single MS-DRG by deleting MS-DRG 484 and revising the title of MS-DRG 483 to read “Major Joint/Limb Reattachment Procedure of Upper Extremities”.”

Final Rule

• Procedure code 81.97 will continue to be assigned to MS-DRGs 515, 516 and 517.
• MS-DRGs 483 and 484 have been collapsed into MS-DRG 483 (Major Joint/Limb Reattachment Procedure of Upper Extremities).

Back and Neck Procedures

Request

A request was made to reassign cases with a complication or comorbidity (CC) in MS-DRG 490 (Back & Neck Procedures Except Spinal Fusion with CC/MCC or Disc Device/Neurostimulator) to MS-DRG 491 (Back & Neck Procedures Except Spinal Fusion without CC/MCC or Disc Device/Neurostimulator). The suggestion was made to create a new MS-DRG subdivided based solely on the “with MCC or Disc Device/Neurostimulator” and the “without MCC” (and no device) criteria.

CMS Data Analysis

FY 2013 MedPar data was evaluated using a three-way severity level split with the three subgroups in the following table:

Final Rule

CMS adopted the proposed new MS-DRG grouping of:

• MS-DRG 518 (Back & Neck Procedures Except Spinal Fusion with MCC or Disc Device/Neurostimulator);
• MS-DRG 519 (Back & Neck Procedure Except Spinal Fusion with CC); and
• MS-DRG 520 (Back & Neck Procedure Except Spinal Fusion without CC/MCC).

MDC 15: Newborns & Other Neonates with Conditions Originating in the Perinatal Period

Request

A request was made to evaluate the MS-DRG assignment of seven ICD-9-CM diagnosis codes in MS-DRG 794 (Neonate with Other Significant Problems). The requestor noted that the codes in question had no bearing on the neonate and do not represent a neonate with a significant problem. It was recommended that MS-DRG logic change so that the codes would not lead to assignment of MS-DRG 794.

The recommendation was to add these seven codes to the “only secondary diagnosis” list under MS-DRG 795 (Normal newborn) so the case would be assigned to MS-DRG 795 (Normal newborn).

Final Ruling

The proposal was adopted as final to reassign the following seven diagnoses to the “only secondary diagnosis list” under MS-DRG 795 (Normal newborn) so that the case would be assigned to MS-DRG 795 (Normal newborn):

• V17.0 (Family history of psychiatric condition),
• V172 (Family history of other neurological diseases),
• V17.49 (Family history of other endocrine and metabolic diseases),
• V18.0 (Family history of diabetes mellitus),
• V18.19 (Family history of other endocrine and metabolic diseases),
• V18.8 (Family history of infectious and parasitic diseases); and
• V50.3 (Ear piercing).

MS-DRG Surgical Hierarchy Changes

Background

The MS-DRG Surgical Hierarchy is “an ordering of surgical classes from most resource-intensive to least resource-intensive.” “Application of this hierarchy ensures that cases involving multiple surgical procedures are assigned to the MS-DRG associated with the most resource-intensive surgical class.”

Hierarchy Changes in the Final Rule

MDC 5: Diseases and Disorders of the Circulatory System

• New MS-DRG 266 (Endovascular Cardiac Valve Replacement with MCC) and new MS-DRG 267 (Endovascular Cardiac Valve Replacement without MCC) will be sequenced above MS-DRG 222 (Cardiac Defibrillator Implant with Cardiac Catheterization with AMI/HF/Shock with MCC).

 

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

• MS-DRGs 490 and 491 (Back & Neck Procedures Except Spinal Fusion with CC/MCC or Disc Device/Neurostimulator and without CC/MCC or Disc Device/Neurostimulator respectively) are being removed from the hierarchy.
• New MS-DRG 518 (Back & Neck Procedure Except Spinal Fusion with MCC or Disc Device/Neurostimulator), new MS-DRG 519 (Back & Neck Procedure Except Spinal Fusion with CC), and new MS-DRG 520 (Back & Neck procedure Except Spinal Fusion without CC/MCC) are being sequenced above MS-DRG 492 (Lower Extremity and Humerus Procedure Except Hip, Foot, Femur with MCC).

Partial Code Freeze

The Protecting Access to Medicare Act of 2014 (PAMA) (Pub. L. 113-9) was signed into law on April 1, 2014. PAMA specified that the Secretary may not adopt ICD-10 prior to October 1, 2015. On August 1st CMS issued a rule finalizing October 1, 2015 as the new ICD-10 Compliance Date. Changes in the final rule to the schedule for the partial code freeze include:

• On October 1, 2012, October 1, 2013 and October 1, 2014, there will be only limited code updates to both the ICD-9-CM and ICD-10 codes sets to capture new technologies and diseases as required by section 1886(d)(5)(K) of the Act.
• On October 1, 2015, there will be only limited code updates to ICD-10 code sets to capture new technologies and diagnoses as required by section 1886(d)(5)(K) of the Act. There will be no updates to ICD-9-CM, as it will no longer be used for reporting.
• On October 1, 2016 (1 year after implementation of ICD-10), regular updates to ICD-10 will begin.

MS-DRGs Subject to the Post-acute Care Transfer Policy (§412.4)

Background

§412.4(a) defines a discharge under the IPPS as when “a patient is formally released from an acute care hospital or dies in the hospital.”

§414.4(f) “provides that when a patient is transferred and his or her length of stay is less than the geometric mean length of stay for the MS-DRG to which the case is assigned, the transferring hospital is generally paid based on a graduated per diem rate for each day of stay, not to exceed the full MS-DRG payment that would have been made if the patient had been discharged without being transferred.”

MLN® Acute Care Hospital Inpatient Prospective Payment System Fact Sheet (ICN 006815 April 2013) indicates that under the Transfer Policy DRG payments are reduced when:

• The beneficiary’s LOS is at least 1 day less than the geometric mean LOS for the MS-DRG;
• The beneficiary is transferred to another IPPS acute care hospital or, for certain MS-DRGs, discharged to a post-acute setting;
• The beneficiary is transferred to a hospital that does not participate in Medicare (effective October 1, 2010); and
• The beneficiary is transferred to a CAH (effective October 1, 2010).

Post-acute care settings subject to the transfer policy include:

• Long-term care hospitals;
• Rehabilitation facilities;
• Psychiatric facilities;,
• Skilled nursing facilities (SNFs);
• Home Health Care (HHC) when the beneficiary receives clinically related care within 3 days after a hospital stay;
• Rehabilitation distinct part (DP) units located in an acute care hospital or CAH;
• Psychiatric DP units located in an acute care hospital or CAH;
• Cancer hospitals; and
• Children’s hospitals.

 

How CMS calculates the Per Diem Rate for the transferring hospital:

• Full MS-DRG payment ÷ geometric mean length of stay (GMLOS) = Per Diem Rate

CMS’s policy for Post-acute Care Transfer MS-DRGs payment calculation:

• The transferring hospital will receive 2x the Per Diem Rate on the first day of the hospitalization.
• The hospital will receive the Per Diem Rate for subsequent days up to the full MS-DRG payment (§412.4(f)(1)
• Note: Transfer cases are also eligible for outlier payments

CMS’s policy for Post-Acute Special Payment MS-DRGs:

• Hospital will receive 50% of the full MS-DRG payment + the single day Per Diem Rate on the first day of the hospitalization.
• The hospital will receive 50% the Per Diem Rate for subsequent days up to the full MS-DRG payment (§412.4(f)(6)).

In the FY 2015 final rule the MS-DRG changes were evaluated against the post-acute care transfer policy criteria as well as the special payment methodology criteria. The following table is a breakdown of the new MS-DRGs and whether or not they qualify as a Transfer MS-DRG and if yes did it also qualify for a Special Payment MS-DRG:

For more information:

• Additional details regarding MS-DRG changes can be found in the pre-published https://www.federalregister.gov/articles/2014/08/22/2014-18545/hospital-inpatient-prospective-payment-systems-for-acute-care-hospitals-and-the-long-term-care">Final Rule (pages 93 - 592).
• The Final Rule has a scheduled publication date of 08/22/2014 and will be available online at: http://ofr.gov/(S(pcl2zalo5cz115uiw2as4qqr))/inspection.aspx.

• MLN Matters® Number: SE0459 Clarification of Medicare’s Transfer Policy Under the Inpatient Prospective Payment System (IPPS) at: http://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/SE0459.pdf