Knowledge Base Category -
As a child I loved watching and playing along with game shows. A lot of television viewers must also enjoy game shows as they continue to be popular with the ongoing creation of new shows and now even an entire channel dedicated to game shows. There are game shows where the contestants must answer difficult questions, game shows where people gamble on random choices, and game shows where the contestants try to guess answers given by others. Though it is not an official “game show,” every year it is fun to guess which proposals from CMS’s proposed rules for inpatient and outpatient prospective payment systems will make the cut to become final Medicare requirements. “Fun” may not be the word everyone would choose to describe this guessing game – some might consider it nerve racking. There are some clues you can use to help with your guess: the tone of the discussion in the proposed rule and the resulting public conversations from interested parties.
Based on public arguments concerning the 2018 Outpatient Prospective Payment System (OPPS) proposed payment reduction for drugs purchased through the 340B program, I truly thought CMS would back off, either altogether with no payment reduction or at least a lesser payment reduction. There were numerous objections to the proposal from some influential entities – hospital associations, previous different and less severe proposals by the Medicare Payment Advisory Commission (MedPAC) and the Office of Inspector General (OIG), Hospital Outpatient Payment (HOP) Advisory Panel, and even members of Congress. BUT – sound the buzzer – I was wrong. CMS has indeed finalized their proposal to reduce payment for separately payable drugs purchased under the 340B program to ASP -22.5% as opposed to ASP +6% for drugs not purchased through the 340B program.
Background on the 340B Program
- The program allows participating hospitals and other health care providers to purchase certain “covered outpatient drugs” at discounted prices from drug manufacturers.
- It was established by section 340B of the Public Health Service Act by the Veterans Health Care Act of 1992 and is administered by the Health Resources and Services Administration (HRSA) within the Department of Health and Human Services (HHS).
- Health care providers eligible to participate in the 340B program if they meet certain criteria are:
- Federal health care grant recipients,
- Hospitals with a Medicare disproportionate share hospital (DSH) percentage > 11.75%,
- Critical Access Hospitals (CAHs),
- Children’s Hospitals with a DSH adjustment > 11.75%,
- Sole Community Hospitals (SCHs) with a DSH adjustment ≥0%
- Rural Referral Centers (RRCs) with a DSH adjustment ≥0%, and
- Freestanding Cancer Hospitals with a DSH adjustment > 11.75%.
- HRSA calculates the maximum (ceiling) price a participating drug manufacturer can charge a covered entity for each covered outpatient drug based on average manufacturer price (AMP) and a unit rebate amount (URA) that considers innovator vs. non-innovator drugs and the availability of generics.
- Deeper discounts (known as “subceiling prices”) are available on some covered outpatient drugs through HRSA’s Prime Vendor Program (PVP).
- The statutory intent of the 340B Program is to maximize scarce Federal resources as much as possible, reaching more eligible patients, and providing care that is more comprehensive.
CMS’s Reasons for the Payment Reductions
Payment Not Aligned with Costs
CMS’s goal is to make Medicare payment for separately payable drugs more aligned with the resources expended by hospitals to acquire such drugs. Various reports by government agencies estimated 340B hospitals receive a significant minimum discount for drugs paid under the OPPS with even deeper discounts if participating in the PVP program.
- MedPAC – discount of 22.5% of the ASP
- OIG – discount of 33.6% of the ASP
- GAO – discount of 20-50% of the ASP
Another MedPAC report estimated savings of $3.8 billion on outpatient drugs purchased through the 340B Program in 2013. Also, participation in the program has grown steadily, from 583 participating hospitals in 2005, to 1,365 hospitals in 2010, and 2,140 hospitals in 2014.
There are limitations in estimating 340B drug costs due to the inability to identify which drugs were purchased through the 340B Program within Medicare claims data. This is another concern CMS addresses in the final rule.
Drug Utilization/Spending
A MedPAC study also found that “Medicare spending grew faster among hospitals that participated in the 340B Program … than among hospitals that did not participate in the 340B Program …”. The GAO found per beneficiary Medicare Part B drug spending, including oncology drug spending, was substantially higher at 340B DSH hospitals than at non-340B hospitals. According to the GAO report, this indicates that, on average, beneficiaries at 340B DSH hospitals were either prescribed more drugs or more expensive drugs than beneficiaries at the other non-340B hospitals in GAO’s analysis.
Beneficiary Costs
CMS is also concerned about the cost of co-pays for Medicare beneficiaries. Medicare beneficiaries are liable for a 20% copayment of the OPPS payment rate, which is currently ASP+6% (regardless of the 340B purchase price for the drug). In another unfavorable report, the OIG found 35 drugs where the “difference between the Part B [payment] amount and the 340B ceiling price was so large that, in at least one quarter of 2013, the beneficiary’s coinsurance alone… was greater than the amount a covered entity spent to acquire the drug.”
Public Comments
A number of commenters agreed with CMS’s proposal and reasons and also put forth a few other reasons for going forward with the payment reduction. Here are some of reasons given by commenters.
- Reverse the “perverse incentives” that have driven the closure and consolidation of the nation’s community cancer care system
- Only a small minority of 340B participating hospitals are using the program to benefit patients in need
- The increasing scope and magnitude of required 340B discounts are increasing drug prices to record-breaking levels as manufacturers factor these discounts into pricing decisions
- Future decreases in prices for supplemental insurance due to coinsurance savings from the 340B payment reduction if it is implemented
- Encourage site-neutral care as patients may receive the same services at a physician office setting without a significant difference in their financial liability between settings
- Address the incentive for hospitals to utilize these drugs solely for financial reasons
The major opposition to the payment reduction expressed by commenters was the lack of CMS’s statutory authority to impose such a large reduction in the payment rate for 340B drugs, and that payment cuts of this magnitude would greatly “undermine 340B hospitals’ ability to continue programs designed to improve access to services—the very goal of the 340B Program.” If you are interested in the details of CMS’s response, you can read the display copy of the Final Rule beginning on page 562. In summary, CMS stood their ground on most of the proposals although they did concede some additional exceptions and a change in the required modifier reporting.
The Final Decision
For CY 2018, separately payable Part B drugs assigned status indicator (SI) “K” that are acquired through the 340B Program (including 340B PVP) will be paid at the ASP minus 22.5 percent when billed by a hospital paid under the OPPS that is not excepted from the payment adjustment. Since separately payable Part B drugs with an SI of “K” were paid at ASP + 6% in 2017, the 340B drug payment reduction actually represents a total reduction of 28.5% from 2017 to 2018. Also, since separately payable drugs not purchased through the 340B program will continue to be paid at ASP + 6% in 2018 the payment rate for these drugs posted in Addendum B of the 2018 OPPS Final Rule is ASP + 6%. Therefore, to calculate the reduced payment, you must first determine ASP by subtracting 6% and then the final reduced payment by subtracting the 22.5% to arrive at ASP – 22.5%, which is a reduction of 28.5% from the posted payment rate.
CMS believes an average discount to set payment rates for 340B-acquired separately payable drugs achieves the goals of (1) adjusting payments to better reflect resources expended to acquire such drugs, and (2) protecting the confidential nature of discounts applied to a specific drug. According to CMS, the estimated average minimum discount of 22.5% of the ASP calculated by MedPAC adequately represents the average minimum discount a 340B participating hospital receives for separately payable drugs. In fact, they think it is likely the average discount is higher, potentially significantly higher, than the average minimum of 22.5%. CMS wants to ensure that Medicare beneficiaries are not liable for a copayment rate that is tied to the current methodology of ASP+6% when the actual cost to the hospital to purchase the drug under the 340B Program is much lower than the ASP for the drug.
Exclusions and Exceptions
Exclusions from the 340B payment reduction are (1) drugs on pass-through payment status, which are required to be paid based on the ASP methodology (status indicator “G” – paid at ASP + 6%), and (2) vaccines, which are excluded from the 340B Program (status indicator L, paid at reasonable cost). The following types of facilities are also excepted from the 340B payment discount:
- Critical Access Hospitals (CAHs),
- Rural Sole Community Hospitals (SCHs),
- Children’s Hospitals, and
- PPS-exempt Cancer Hospitals.
CMS decided not to make exceptions for the following:
- Biosimilar biological products will be paid the same as other separately payable drugs. Pass-through biosimilars will be paid ASP+6% and non-pass-through biosimilars will be paid at ASP-22.5%. Currently there are only two biosimilars on the market, both with pass-through status for all of CY2018. This means there are no biosimilars at this time that will be affected by the reduced payment for 340B drugs.
- Drugs provided in nonexcepted off-campus provider-based departments will be paid in accordance with section 1847A of the Act (generally, ASP+6 percent), consistent with Part B drug payment policy in the physician office although CMS may consider payment adjustments for these PBDs in 2019.
- Rural referral centers (RRCs) will be subject to the reduced payment if they participate in the 340B program.
- Blood clotting factors and radiopharmaceuticals that are not pass-through drugs will be paid ASP-22.5% if purchased through the 340B program.
Modifier Requirements
In response to comments, CMS is requiring a modifier for drugs acquired under the 340B Program instead of requiring its use on drugs that were not acquired under the 340B Program. In addition, they are establishing an informational modifier for use by certain providers who will be excepted from the 340B payment reduction.
- Effective January 1, 2018, Medicare will require hospitals subject to the 340B payment policy to report modifier “JG” on the same claim line as the drug HCPCS code to identify a 340B-acquired drug. These drugs will be paid at ASP-22.5%.
- Rural SCHs, children’s hospitals and PPS-exempt cancer hospitals excepted from the 340B payment adjustment will be required to report informational modifier “TB” for 340B-acquired drugs, and will continue to be paid ASP+6 percent.
These modifiers will facilitate the collection and tracking of 340B claims data whether they affect payment or not.
Budget Neutrality
CMS plans to implement the payment reduction for 340B drugs in a budget neutral manner. “To maintain budget neutrality within the OPPS, the estimated $1.6 billion in reduced drug payments from adoption of this final alternative 340B drug payment methodology will be redistributed in an equal offsetting amount to all hospitals paid under the OPPS through increased payment rates for non-drug items and services furnished by all hospitals paid under the OPPS for CY 2018. Specifically, the redistributed dollars will increase the conversion factor across non-drug rates by 3.2% for CY 2018.”
Comment Solicitation
It is clear this is not the final word on this issue. CMS states they may revisit the alternative 340B drug payment methodology in CY 2019 rulemaking and I am going to make another guess and say they definitely will. They are still seeking public comments on ways to more closely align the actual acquisition costs that hospitals incur rather than using an average minimum discounted rate while still keeping the ceiling price confidential as required by law.
I guessed wrong concerning the reduction in payment proposal for drugs acquired under the 340B program, but at least I didn’t have any money riding on it. Unfortunately, hospitals do have money riding on it, maybe even a lot of money.
If you are interested in determining the potential impact the 340B payment reduction will have on your hospital, please contact Medical Management Plus, Inc. at 205-941-1105. Utilizing the Medicare claims data from our sister company, RealTime Medicare Data (RTMD), we can compare your actual Medicare payments for drugs with an SI of “K” from a recent 12-month timeframe to the proposed 22.5% reduction from ASP. As explained above this involves first subtracting 6% from the Addendum B payment rate of ASP + 6%, and then reducing the ASP by 22.5%, for a total of 28.5% below the posted payment rate.
Debbie Rubio
Over the past several weeks, our newsletter has focused attention on the transition of the Jurisdiction J (Alabama, Georgia, and Tennessee) Medicare Administrative Contractor (MAC) from Cahaba to Palmetto GBA. For those providers affected by this transition, please pay special attention to this article as you will be required to participate in this program under the Palmetto contract. Special information affecting Jurisdiction J is included at the end of this article.
If you are a regular reader of our Wednesday@One newsletter, you may already know that my original role in healthcare was as a clinical laboratory scientist (CLS) or Medical Technologist (MT). I loved working in the clinical laboratory, but my detail oriented brain also loves my current work with Medicare regulations. In the realm of healthcare compliance, I keep up with the rapid and never-ending changes of Medicare healthcare regulations. Unfortunately, since Compliance is now my focus, I no longer keep up with the also rapid and never-ending changes to laboratory medicine.
Molecular diagnostic testing (MDT) is one area of laboratory advancements that is having a tremendous impact on the practice of medicine overall. Human genomics is reshaping the medical approach to therapy and diagnosis in areas such as inherited genetic diseases, infectious disease, oncology, human leucocyte antigen typing to predict immune function, coagulation, and pharmacogenomics—the genetic prediction of which drugs will work best. As this testing has become more common, healthcare payers have struggled with determining the appropriate coverage and payment for these tests.
Some of the challenges for Medicare related to molecular diagnostic testing were:
- HCPCS and CPT descriptions for these codes describe the pathology and laboratory categories but do not identify a specific test.
- The Clinical Laboratory Fee Schedule pricing methodology does not account for the unique characteristics of these tests.
- Who determines if the tests fall within a Medicare benefit category?
- Some tests have not been assessed for clinical and analytical validity and clinical utility.
Medicare’s solution was the Molecular Diagnostic Services (MolDX) Program, which was developed by Palmetto GBA in 2011 to identify and establish coverage and reimbursement for molecular diagnostic tests. Palmetto GBA currently administers the MolDX Program and all its information.
The program applies to all private, reference, and hospital laboratories that perform molecular diagnostic testing and submit claims to Medicare Part A or Part B. The following molecular diagnostic assays/tests are included in MolDX.
How does the MolDX Program address the above challenges?
The MolDX program performs the following functions, which solve the challenges noted above concerning molecular diagnostic tests:
- Facilitates detailed and unique identification through registration of molecular diagnostics tests to facilitate claims processing and to track utilization.
- Establishes clinical utility expectations
- Completes technical assessments of published test data to determine clinical utility and coverage
- Establishes reimbursement
How does the MolDX Program work?
Obtain a DEX Z-Code
Laboratories must apply for and obtain a unique test identifier for each MDT or LDT (lab developed test) they perform.
Attention Hospitals - You are NOT expected to submit tests to obtain Z-Codes for tests sent to another laboratory to perform. You submit tests to obtain a Z-code only for those tests you perform in-house. However, the MolDX FAQs state it is the responsibility of the billing provider to obtain a DEX Z-Code™ identifier, such as in cases where the performing lab is not in a jurisdiction under the MolDX program. Since reference labs performing genetic testing generally offer services across the nation, most will have already obtained the necessary Z-codes.
These are the steps required for participation in the MolDX program:
- You are required to register your organization in the DEX Diagnostics Exchange if you plan to submit claims for the MolDX codes to MACs participating in the MolDX program (see list of Participating MACs below).
- Providers billing Part A for molecular tests performed by a proprietary or reference laboratory will “Request Sharing” in DEX, from your reference lab, to get access to the Z-Code for billing purposes. You must obtain the DEX Z-CodeTM for the molecular test(s) from the performing laboratory, either directly or through the DEX system.
- Hospital providers billing for molecular services performed by their hospital-based laboratory must register and obtain a unique DEX Z-CodeTM for each molecular test in the MolDX code ranges designated above.
Obtain a Technical Assessment Approval (Coverage Determination)
Once a Z-code is assigned, coverage is determined through a technical assessment (TA). Established FDA-approved tests with proven utility that are performed within labeling indications may not require a technical assessment. A TA is required for molecular assays that are laboratory developed tests (LDT), employ new or novel technology, or have undefined or unproven clinical utility. For these tests, labs/developers must submit a detailed dossier of clinical data to substantiate the test meets Medicare’s requirements for coverage. The Technical Assessment Submission Instructions (M00115) provides the steps to submit a dossier.
All new test services will be denied as noncovered until the test completes the TA process and reasonable and necessary criteria is established. Claims submission for tests in the TA process should be suspended until a final coverage determination is made. Labs should not provide lab tests pending a TA approval until coverage is approved and appropriate billing and coding guidelines are published.
Once a coverage determination has been established, the results will be published to the provider community. A Local Coverage Determination (LCD) or Coverage Article may be developed if the test requires administration of reasonable and necessary limitations.
Report Z-Code on Claim
When the unique test identifier (DEX Z-Code™) is reported in conjunction with the appropriate CPT/HCPCS code on the claim, it allows Medicare to determine the exact test that has been performed, facilitating the process of making pricing and/or coverage determinations. The MolDX Manual provides instructions on the claim line detail fields for reporting the Z-codes.
- Part B providers – Paper claim - Block 19 of the CMS 1500 claim form; electronic claims (837P) - SV101-7 field adjacent to the applicable CPT code.
- Part A providers – Paper claim - block 80 of the UB04 claim form; electronic claims (837I) - line SV202-7.
- Part A providers will need to specify which lines are billed for MolDX and the appropriate DEX Z-Code per line within the remarks section of the claim.
Adjudication
The molecular test is adjudicated in accordance with the MAC’s LCDs and coverage articles.
Palmetto GBA’s “Molecular Diagnostic Tests (MDT)” LCD provides coverage for MDTs and LDTs that are identified as covered in the LCD. Palmetto has also developed and published specific LCDs, and/or coverage articles for some MolDX tests. MDTs and LDTs not identified as covered in an NCD, LCD, or coverage article are not covered. Palmetto GBA will continue to accept and consider requests on excluded genetic tests. You can find a link to Palmetto’s LCDs, as well as list of covered and excluded tests, on Palmetto’s MolDX website.
Participating MACs
Although Palmetto “owns” the MolDX program, several other MACs also participate in the program. These include Noridian JE and JF, CGS J15, and WPS J5 and J8. Each of these MACs have coverage policies and websites dedicated to the MolDX program. If you are a provider in one of these jurisdictions, please check you MACs website for more information. At this time CMS has not determined how MolDX will be expanded.
Jurisdiction J Transition
Medicare Part A and Part B providers in the Palmetto GBA Jurisdiction J will be required to register all molecular tests with the Diagnostics ExchangeTM (DEX), an online test registry. There will be a phase in for Jurisdiction J to allow time for test providers to obtain their Z-codes. We strongly suggest labs and other test providers begin the process now to avoid any claim processing delays once the Z-code is required on the claim, which is currently projected to be no later than claims submitted on or after June 1, 2018 (note this is not Date of Service driven).
Refer to the Steps for Participating in the MolDX Program listed above to determine exactly what actions are needed for JJ providers billing for molecular diagnostic testing. JJ providers should carefully study all the information on the MolDX website and become familiar with Palmetto’s MolDX LCDs. This is a necessary piece of the JJ transition.
Debbie Rubio
Calculating Interim Rates for Graduate Medical Education (GME) Payments to New Teaching Hospitals
Provides instructions to the MACS on calculating interim rates for Graduate Medical Education (GME) payments to new teaching hospitals.
Quarterly Healthcare Common Procedure Coding System (HCPCS) Drug/Biological Code Changes - October 2017 Update
Recurring quarterly update to HCPCS code set – created new modifier ZC for use with biosimilars manufactured by Merck/Samsung Bioepis, such as Infliximab.
Updates to Medicare’s Cost Report Worksheet S-10 to Capture Uncompensated Care Data
Provides additional guidance to 1886(d) hospitals to ensure appropriate reporting of uncompensated care costs and to achieve proper Medicare reimbursement. Summarizes revisions and clarifications to the instructions for the Worksheet S-10 of the Medicare cost report.
Quarterly Update to the National Correct Coding Initiative (NCCI) Procedure to Procedure (PTP) Edits, Version 24.0, Effective January 1, 2018
Recurring quarterly updates of CCI edits.
Accepting Payment from Patients with a Workers' Compensation Medicare Set-Aside Arrangement (WCMSA), a Liability Insurance Medicare Set-Aside Arrangement (LMSA), or a No-Fault Insurance Medicare Set-Aside Arrangement (NFMSA) - RESCINDED
Rescinded October 3, 2017
Implementing the Remittance Advice Messaging for the 20 Hour Weekly Minimum for Partial Hospitalization Program Services – REISSUE
Re-issued on October 3, 2017, to confirm that its content remains valid even though Special Edition Article SE1607 was rescinded. Message on remittance reminding providers that PHP patients require a minimum of 20 hours of PHP services per week, in accordance with the plan of care.
Medicare Appeals; Adjustment to the Amount in Controversy (AIC) Threshold Amounts for Calendar Year 2018
Federal Register Notice – The calendar year 2018 AIC threshold amounts are $160 for ALJ hearings and $1,600 for judicial review.
https://www.gpo.gov/fdsys/pkg/FR-2017-09-29/pdf/2017-20883.pdf
January 2018 Quarterly Average Sales Price (ASP) Medicare Part B Drug Pricing Files and Revisions to Prior Quarterly Pricing Files
Quarterly update to drug pricing. OPPS hospitals are paid ASP + 6% for separately paid drugs (both pass-through and non-pass-through drugs).
Transition to New Medicare Numbers and Cards
Factsheet telling the why, when, and how to be ready for the new cards.
Clarification Regarding the Use of Control Materials as Calibrators to Determine Test Cut-off Values (Laboratories)
Memorandum to State Survey Agency Directors clarifying information concerning laboratory controls and calibration materials.
Changes to the Laboratory National Coverage Determination (NCD) Edit Software for January 2018
Quarterly updates to the national coverage policies for certain laboratory tests. There is a link within the article to a spreadsheet of all the changes – deletions and additions.
Clinical Laboratory Fee Schedule Not Otherwise Classified, Not Otherwise Specified or Unlisted Service or Procedure Code Data Collection
Instructs providers to include the laboratory test name or short description in Field 19 when billing an unlisted laboratory test code on a 1500 claim form. Also, laboratory “reporting entities” must report private payor payment rates and volumes for unique tests reported with an unlisted code.
2018 Medicare Electronic Health Record (EHR) Incentive Program Payment Adjustment Fact Sheet for Hospitals
Fact sheet on the EHR payment adjustments for eligible hospitals.
https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2017-Fact-Sheet-items/2017-10-10.html
Notice of New Interest Rate for Medicare Overpayments and Underpayments -1st Qtr. Notification for FY 2018
The certified interest rate effective October 18, 2017 for Medicare over- and under-payment is 9.750%.
https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2017Downloads/R295FM.pdf
Defending Medical Review Decisions at Administrative Law Judge (ALJ) Hearings
Updates Medicare Program Integrity Manual due to recent changes in the Office of Medicare Hearings and Appeals process, such as restrictions on the number of contractors able to participate during oral testimony and the adoption of the witness role for those cases in which additional support may be sought.
https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2017Downloads/R748PI.pdf
Medicare Quarterly Provider Compliance Newsletter – October 2017
Provide education on how to avoid common billing errors and other erroneous activities when dealing with the Medicare Fee-For-Service (FFS) Program. This quarter’s newsletter addresses Arthroscopic Rotator Cuff Repair (Physicians), CERT errors for Outpatient Hospital Services, and a DME item.
Prohibition on Billing Dually Eligible Individuals Enrolled in the Qualified Medicare Beneficiary (QMB) Program – REVISED
Revised October 18, 2017 to indicate the Provider Remittance Advice and Medicare Summary Notice identifies the QMB status of beneficiaries and exemption from cost-sharing for Part A and B claims processed on or after October 2, 2017. It also recommends how providers can use these and other upcoming system changes to promote compliance with QMB billing requirements.
Fiscal Year (FY) 2018 Inpatient Prospective Payment System (IPPS) and Long Term Care Hospital (LTCH) PPS Changes - REVISED
Updates to some financial information, tables, files, and lists.
American Hospital Association (AHA) Letter to Office of Inspector General (OIG)
The AHA request to OIG to implement actions to address fundamental flaws and inaccuracies in the OIG hospital compliance reviews.
http://www.aha.org/advocacy-issues/letter/2017/171002-let-hatton-cms-hospital-compliance-reviews.pdf
Hurricane Nate and Medicare Disaster Related Alabama, Florida, Louisiana and Mississippi Claims
Describes CMS authorized waivers for providers affected by Hurricane Nate.
In a June 2016 Wednesday@One article about the new payment rates for laboratory tests, it was pointed out that Medicare wants competitive pricing for the services for which they pay. That is why the new lab payment rates are designed to be competitive with the rates of private insurers.
Background
The Protecting Access to Medicare Act of 2014 (PAMA) mandated a change to the way Medicare determines payment rates for laboratory tests under the Clinical Laboratory Fee Schedule. The purpose of this change was to make Medicare lab payments competitive with what private insurers are paid. A final rule was published in June 2016 implementing this requirement. To determine the basis for the revised payment rates, certain laboratories were required to submit private payor data to Medicare. Below is some information that appeared in that previous Wednesday@One article concerning how the new payment rates were to be determined.
Payment Rates Determination
- Private payor rates for laboratory tests reported by the applicable laboratories will be the basis for the revised Medicare payment rates for most laboratory tests on the CLFS beginning in January 2018.
- The payment amount for a test on the CLFS furnished on or after January 1, 2018, will be equal to the weighted median of private payor rates determined for the test.
- The payment amount for a test cannot drop more than 10 percent as compared to the previous year’s payment amount for the first three years after implementation of the new payment system, and not more than 15 percent per year for the subsequent three years.
- Payment rates under the revised CLFS will be updated to reflect market rates paid by private payors every three years for most tests, and every year for ALDTs.
Preliminary CLFS Rates
On September 22, CMS published preliminary rates for the new private payor rate-based Clinical Lab Fee Schedule (CLFS) that will go into effect on January 1, 2018. The data reported to CMS upon which the new CLFS rates are based captured over 96% of laboratory tests on the CLFS and represented over 96% of Medicare’s spending on tests in CY 2016. CMS will be accepting comments on the preliminary determinations until October 23, 2017. To see the preliminary rates, how to submit comments, and more information about the PAMA requirements see the CLFS PAMA Regulations webpage.
The table of preliminary payment rates with 10% phase-in reduction in 2018, 2019 and 2020 includes 1,360 laboratory HCPCS codes. Of these,
- 879 codes have a 2018 payment reduction of 10% (the cap),
- 115 codes have a payment reduction < 10%,
- 134 codes have an increase in payment,
- 161 codes did not have a payment rate for 2017 but are assigned one for 2018,
- 71 codes are not assigned a 2018 payment rate due to payment and/or volume equal to 0 or they were new codes for 2017 or 2018.
Payment rates will continue to be adjusted until they reach the weighted median. For 2018, 2019, and 2020, the maximum decrease per year will be a 10% reduction (reduction cap); after that, the reduction will be 15% for the next three years. Regarding the reductions,
- 410 codes will reach the full payment change in 2018 (this includes the 115 codes with a reduction < 10%, the 134 codes with an increase in payment rates, and the 161 codes with a new rate for 2018),
- 61 codes will reach the full payment change in 2019,
- 102 codes will reach the full payment change in 2020,
- 716 codes will still require adjustment after 2020 to reach the full payment change.
Here are the proposed payments rates for some common laboratory tests.
For hospitals, the adjustments to payment rates will not have as significant an impact as they will for independent testing laboratories. This is because since 2014, the payment for most Medicare outpatient clinical laboratory tests billed by hospitals is packaged into the payment for other outpatient services. This means lab tests performed in the emergency department, outpatient surgery, outpatient clinics or performed with other outpatient services are not separately paid. Separate payment for lab tests is only made to hospitals when the laboratory tests are the only outpatient services performed and billed on a claim. This includes testing on outpatients referred to the hospital lab by their physician and lab specimens sent to the hospital lab for testing. Therefore, the impact on any particular hospital depends on the volume of outpatient hospital outreach lab testing.
Let’s look at the potential impact on hospitals. Using data from our sister company, RealTime Medicare Data (RTMD), I determined the Medicare payments for a year for the common laboratory tests listed above from several hospitals with a significant amount of outpatient laboratory payments. These are actual payments so they represent laboratory testing that was separately paid by Medicare. I averaged the payment data and estimated volumes based on 2017 pricing to allow comparison between these volumes and your facility’s volumes. As you can see, even hospital laboratories with robust outreach business have limited loss of payments, with a total of around $166,000 annually for these 8 high-volume lab tests. Of course, there are many more lab tests and payment reductions for most tests will continue over time, at least over a three period until a new evaluation of private payor payments is done.
Even though this is not a huge reimbursement loss for hospitals, in these days of already declining revenues and increasing costs, every penny counts. And these are just more lost pennies.
Debbie Rubio
As our readers may have noticed over the last two weeks, we are providing information on the transition of Jurisdiction J from Cahaba GBA as the Medicare Administrative Contractor (MAC) to Palmetto GBA beginning in January and February of 2018. Numerous MMP clients are located in Jurisdiction J, so we believe providing information on the transition is beneficial to our clients and other providers in this Jurisdiction (Alabama, Georgia, and Tennessee). Along these lines, the focus coverage policy for this month is B-type natriuretic peptide (BNP). I selected this policy because Cahaba GBA has been conducting pre-payment medical review of BNP in the outpatient/non-patient laboratory setting for several years with consistent error rates in the range of 99-100%. These denials are mainly due to “the documentation submitted did not support clinical urgency for 83880” which would be expected for acute potential cardiac events.
Since our newsletter is read nation-wide, I do not want to forget our readers in other Jurisdictions. It turns out it is easy to remember almost everyone when discussing coverage of BNP, because 7 of the 8 MACs (9 of 11 Jurisdictions) also have Local Coverage Determinations (LCDs) for BNP. And with only one exception, the indications and limitations for coverage across these policies is consistent. Here is a listing of the various Part A LCDs for BNP (CPT code 83880). You can easily view the specific policies by entering the Document ID # in the Quick Search section of the Medicare Coverage Database webpage.
Although stated somewhat differently between policies, the consensus for coverage of BNP is that it is covered:
- When used in combination with other medical data such as medical history, physical examination, laboratory studies, chest x-ray, and electrocardiography; and
- To distinguish cardiac cause of acute dyspnea from pulmonary or other non-cardiac causes;
- To distinguish decompensated CHF from exacerbated chronic obstructive pulmonary disease (COPD) in a symptomatic patient with combined chronic CHF and COPD (Cahaba’s LCD does not include this indication, although Cahaba has stated in verbal discussion with providers that this would be a covered use of BNP.); or
- As a risk stratification tool (to assess risk of death, myocardial infarction or congestive heart failure) among patients with acute coronary syndrome (myocardial infarction with or without T-wave elevation and unstable angina) when obtained in the first few days after the onset of ischemic symptoms.
Providers also need to be familiar with the ICD-10 diagnosis codes that “support medical necessity.” The list of codes supporting medical necessity varies between LCDs. It is likely the MAC will deny coverage utilizing automated edits when a claim is submitted without a “covered” diagnosis code.
BNP is not covered:
- As a stand-alone test, without being used in conjunction with standard diagnostic tests, medical history and clinical findings;
- For monitoring the efficiency of treatment for CHF and in tailoring the therapy for heart failure;
- For adjustment of therapy in individual patients, or
- As part of cardiovascular risk assessment panels (screening).
Some policies quote the American College of Cardiology/American Heart Association 2005 Guideline Update for the Diagnosis and Management of Chronic Heart Failure in the Adult. These guidelines were updated in 2017 and can be viewed on the ACC website. Some physicians argue the new guidelines support a standard of care to monitor and adjust therapy, determine prognosis and establish disease severity in CHF patients followed in an ambulatory setting based on the
“Class I recommendation (Level of Evidence: A) for measurement of B-type natriuretic peptide (BNP) or N-terminal (NT)-proBNP for establishing prognosis or disease severity in chronic HF.”
However the full ACC/AHA article states, “Because of the absence of clear and consistent evidence for improvement in mortality and cardiovascular outcomes (43-62), there are insufficient data to inform specific guideline recommendations related to natriuretic peptide–guided therapy or serial measurements of BNP or NT-proBNP levels for the purpose of reducing hospitalization or deaths in the present document.”
The National Government Services (NGS) LCD for Jurisdictions K and 06 is significantly different, though extremely specific, from the other LCDs by allowing coverage for:
- To establish prognosis or disease severity in chronic CHF when needed to guide therapy,
- To achieve optimal dosing of guideline-directed medical therapy (GDMT) in select clinically euvolemic patients followed in a well-structured heart failure (HF) disease management program,
- To guide therapeutic decision-making in individuals who have amyloidosis.
Laboratory tests are not paid separately for inpatients or for outpatients having other outpatient services, and even when paid the Clinical Lab Fee Schedule payment rate for BNP is around only $46. The Medicare issue with laboratory tests such as BNP is not the payment rate per test, but that millions of lab tests across the nation can add up to large reimbursement amounts for Medicare.
Hospitals need to evaluate whether their physicians are following the Medicare LCD guidelines for their Jurisdiction when ordering BNP testing on outpatients in a setting other than the Emergency Department. Should another MAC besides Cahaba perform audits, what does your hospital have at risk?
Debbie Rubio
October 2017 Integrated Outpatient Code Editor (I/OCE) Specifications Version 18.3
Quarterly update to the I/OCE which is the program Medicare uses to process claims for all outpatient institutional providers (OPPS and non-OPPS hospitals). This update describes new or changed processing edits.
October 2017 Update of the Hospital Outpatient Prospective Payment System (OPPS)
Quarterly update to the hospital OPPS system. This update includes new/changed codes, directions on billing for Supervised Exercise Therapy (SET) for peripheral artery disease, and a revision to Medicare policy on Upper Eyelid Blepharoplasty and Blepharoptosis Repair.
Screening for Hepatitis B Virus (HBV) Infection (Revision)
Revision includes clarifications for HBV for ESRD patients and pricing of HCPCS G0499.
Internet Only Manual (IOM) Update to Pub. 100-04, Chapter 15 - Ambulance, to Restore Multiple Patients on One Trip Instructions
Restores missing instructions concerning “Multiple Patients on One Trip” to the Medicare Claims Processing Manual.
Revision to Publication 100.06, Chapter 3, Medicare Overpayment Manual, Section 200, Limitation on Recoupment
Updates the Medicare Financial Management Manual section on Limitation on Recoupment Overpayments
Provider-Based Determination (Revision)
Revision related to acceptable checklist.
Updates to Pub. 100-04, Chapter 18 Preventive and Screening Services and Chapter 32 Billing Requirements for Special Services and Publication 100-03, Chapter 1 Coverage Determinations Part 4
Updates to Cardiac Rehab and Intensive Cardiac Rehab Programs to allow a one-time switch from the ICR program to the cardiac rehabilitation program. Policy clarifications regarding Smoking Cessation Services, and Colorectal Cancer Screening.
https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2017Downloads/R3848CP.pdf
National Coverage Determination (NCD) for Smoking and Tobacco-Use Cessation Counseling - RETIRED (210.4)
Effective September 30, 2015 Section 210.4 is deleted and the remaining NCD entitled Counseling to Prevent Tobacco Use (210.4.1) remains effective.
2018 Annual Update of Healthcare Common Procedure Coding System (HCPCS) Codes for Skilled Nursing Facility (SNF) Consolidated Billing (CB) Update
SNF consolidated billing defines which services are “included” in the SNF payment and which services are “excluded” (can be directly billed to Medicare by other providers). This updates the HCPCS codes edits for 2018.
Fiscal Year (FY) 2018 Inpatient Prospective Payment System (IPPS) and Long Term Care Hospital (LTCH) PPS Changes
Implements policy changes for the Fiscal Year (FY) 2018 Inpatient Prospective Payment System (IPPS) and LTCH Prospective Payment System (PPS).
ICD-10-CM FY 2018 Guidelines
These guidelines are approved by the four organizations that make up the Cooperating Parties for the ICD-10-CM: the American Hospital Associated (AHA), the American Health Information Management Association (AHIMA), CMS, and the National Center for Health Statistics (NCHS). These guidelines are to be used as a companion document to the official version of the ICD_10-CM as published on the NCHS website.
https://www.cdc.gov/nchs/icd/icd10cm.htm
Office of Inspector General Report: Medicare Inappropriately Paid Acute-Care Hospitals for Outpatient Services they Provided to Beneficiaries who were Inpatients of Other Facilities
The OIG identified outpatient claims from acute-care hospitals that overlapped with the identified inpatient claims from other types of facilities - LTCHs, IRFs, IPFs, and CAHs. The OIG found inappropriate payments of $51.6 million to acute-care hospitals for outpatient services that overlapped inpatient admissions elsewhere.
https://oig.hhs.gov/oas/reports/region9/91602026.pdf
Office of Inspector General Reports Highlight Hospital Billing Issues
Discusses coding concerns for Right Heart Catheterizations (RHCs) with heart biopsies that used modifier -59 and claims for 96 or more continuous hours of mechanical ventilation.
Annual Clotting Factor Furnishing Fee Update 2018
The clotting factor furnishing fee for 2018 is $0.215 per unit. For dates of service from January 1, 2018, through December 31, 2018, the clotting factor furnishing fee of $0.215 per unit is added to the payment limit for the clotting factor.
October 2017 Update of the Hospital Outpatient Prospective Payment System (OPPS) (Revision)
Revised to add or clarify information on Transuretheral Waterjet Prostate Ablation Procedure (CPT code 0421T) and the OPPS status indicator for Q5102.
Billing in Medicare Secondary Payer (MSP) Liability Insurance Situations
Reminder of the fundamental guidance governing billing where liability insurance (including self-insurance) is involved.
Accepting Payment from Patients with a Workers' Compensation Medicare Set-Aside Arrangement (WCMSA), a Liability Insurance Medicare Set-Aside Arrangement (LMSA), or a No-Fault Insurance Medicare Set-Aside Arrangement (NFMSA)
This article explains what a Medicare Set-Aside Arrangement (MSA) is and explains why it is appropriate to accept payment from a patient that has a funded MSA.
Targeted Probe and Educate
CMS is expanding the existing Targeted Probe and Educate (TPE) Pilot to include all MACs in order to reduce appeals, decrease provider burden, and improve the medical review/education process.
https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2017Downloads/R1919OTN.pdf
Revisions to the State Operations Manual (SOM) Appendix A– Survey Protocol, Regulations and Interpretive Guidelines for Hospitals
Adds a current regulation with interpretive guidelines not previously included in Appendix A as well as revising interpretive guidelines defining whether a hospital is primarily engaged in providing inpatient services under section 1861(e)(1) of the Social Security Act.
https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2017Downloads/R170SOMA.pdf
Contract Award for A/B MAC Jurisdiction J (posted 9/8/2017)
CMS awarded the Medicare Administrative Contract to Palmetto GBA (Palmetto) for the administration of Medicare Part A and Part B Fee-for-Service (FFS) claims in Jurisdiction J (AL, GA, and TN)
CMS Reveals New Medicare Card Design
The first look at the newly designed Medicare card. The new Medicare card contains a unique, randomly-assigned number that replaces the current Social Security-based number.
The first weekend in September marked the return of college football for another season. Football is a rough sport that requires a lot of padding to prevent and lessen injuries, so football pads are a good thing. If you have ever done home projects that require working on your knees, you quickly realize the value of knee pads. And for long-winded speakers, you hope your chair has a comfortable pad. All of these are good “pads,” but some pads are not so welcome. The extra padding of weight gain and aging is not so good – for example those extra “pads” around your eyes. Peripheral artery disease, abbreviated PAD, is another pad that is bad. The October 2017 update of the Outpatient Prospective Payment System addresses ways Medicare handles these examples of bad “pads.”
Supervised Exercise Therapy (SET) for Peripheral Artery Disease (PAD)
Under a new National Coverage Determination (NCD) effective May 25, 2017, Medicare will pay for supervised exercise therapy (SET) for beneficiaries with intermittent claudication for the treatment of symptomatic peripheral artery disease. The October OPPS update provides details of the requirements and CPT coding for this service.
The Medicare requirements for coverage of SET for PAD are:
- A therapeutic-exercise training program consisting of 30-60 minute sessions,
- Generally up to 36 sessions over 12 weeks,
- Referral from the physician responsible for PAD treatment,
- Contractor discretion for an additional 36 sessions over an extended period of time with a second referral,
- Performed in a hospital setting or physician’s office,
- Delivered by personnel trained in exercise therapy for PAD and who ensure benefits outweigh harms,
- Direct supervision by a physician or non-physician practitioner trained in both basic and advanced life support techniques,
- Patient has no absolute contraindications to exercise as determined by their primary physician, and
- A face-to-face visit with the physician responsible for PAD treatment to obtain:
- The referral for supervised exercise therapy, and
- Information regarding cardiovascular disease and PAD risk factor reduction, such as education, counseling, behavioral interventions, and outcome assessments.
Peripheral artery disease (PAD) rehabilitation is reported with CPT code 93668 for each session. This service is paid under OPPS with a status indicator of “S” (separate APC payment, not discounted when multiple).
Upper Eyelid Blepharoplasty and Blepharoptosis Repair
CMS is revising their policy on blepharoplasty and blepharoptosis when performed together. Before addressing the revision, let’s review the differences in these procedures and the prior policy. Blepharoplasty is removing “pads” (excess fat or skin) around the eye. This is often a cosmetic procedure to improve appearance and cosmetic procedures are not covered by Medicare. Medicare may cover blepharoplasty if there is medical need, such as an injury or the excess skin interferes with vision. Ptosis repair tightens muscles around the eye to raise the height of a drooping eyelid. Medicare’s prior policy, as clarified in the July 2016 OPPS Update, was that any removal of upper eyelid tissue (blepharoplasty) performed in conjunction with a ptosis repair of the same eye was considered a part of the blepharoptosis repair and could not be billed separately to Medicare or to the patient.
Effective October 1, 2017, CMS is revising this policy to allow either cosmetic or medically necessary blepharoplasty to be performed in conjunction with a medically necessary upper eyelid blepharoptosis surgery. This means both procedures can be billed when performed together on the same eye – medically necessary procedures to Medicare and procedures performed for cosmetic reasons to the patient. Patients should be made aware of their financial obligations for cosmetic procedures per Advance Beneficiary Notice (ABN) instructions. If both the ptosis repair and the blepharoplasty are medically necessary and billed to Medicare, the payment for the blepharoplasty is bundled into the comprehensive APC payment for the blepharoptosis. In other words, when Medicare covers both procedures, there is no separate payment for the blepharoplasty.
The article also includes a list of practices related to blepharoplasty and blepharoptosis that are not appropriate for separate payment under Medicare, such as procedures performed on different dates. Please refer to the October 2017 OPPS Update for the full list. You can also find additional information on the original policy clarification in a prior article on this subject.
When billing Medicare for exercise therapy for PAD or blepharoplasty procedures, you need to grab your pad of paper and your favorite padded ink pen, sit in your most comfortable padded chair, and make notes on Medicare’s rules about “pads.”
Debbie Rubio
Local Medicare Administrative Contractor (MAC) coverage updates during the last month included a new Article from Noridian Jurisdiction E and a combining of existing Parts A and B articles for Noridian JF concerning the topic of Lymphedema Decongestive Treatment. Noridian is the only MAC with a separate Article or Local Coverage Determination (LCD) that specifically addresses this topic. However, almost all the other MACs do address lymphedema treatment as part of their Physical/Occupational Therapy policies. Lymphedema treatment is important to restore normal shape, reduce the likelihood of complications, and to restore function (such as self-care and other activities of daily living [ADLs]).
There are similarities and differences between the coverage policies from the various MACs, so be sure to refer to the policy for your jurisdiction to understand the requirements that apply to your hospital. In general, complex or comprehensive decongestive therapy (CDT) consists of skin care, manual lymphatic drainage (MLD), compression wrapping, and therapeutic exercises. Other key points related to the treatment are listed below.
- There must be a physician-documented diagnosis of primary or secondary lymphedema. Treatment is not for tissue edema from other causes (e.g. congestive heart failure).
- The patient should have documented signs and symptoms and functional limitations due to the lymphedema.
- The ultimate goal of treatment is to reduce and maintain reduction of lymphedema by establishing a management program that can be carried out by the patient, patient’s family, or patient’s caregiver. This means a major component of treatment is education of the patient and/or caregiver.
- Skilled therapy should not be continued once the patient/caregiver has been sufficiently trained.
- It is necessary for the patient or their caregiver to have the ability to understand and comply with continuation of the treatment regimen after skilled therapy is complete.
- Treatment should be provided by a skilled professional (physician, non-physician practitioner, or therapist) who has received specialized training in this form of treatment.
- Almost all the coverage policies place limits on the amount and duration of treatment. Common limits are 3-5 treatments weekly for up to 12-18 visits but vary by MAC.
- Most MACs support the use of CPT code 97140 (manual therapy) for manual lymphatic drainage and CPT 97110 (therapeutic exercise) for the exercise portion of CDT. Some MACs state they do not accept the compression application codes (29581-29584) for compression wrapping for lymphedema.
- Documentation requirements, when addressed, require supportive documentation of patient history and etiology, prior treatments, ability of patient and/or caregiver to continue home treatment, functional limitations and pain levels, limb measurements and any other skin conditions in that area.
Secondary lymphedema may be the result of surgical removal of lymph nodes (such as in association with surgery for breast cancer or other cancers), fibrosis secondary to radiation, and traumatic injury to the lymphatic system. Decongestive therapy for lymphedema is a valuable treatment for those patients who need it. Providers should be familiar with and follow the guidance of their area Medicare contractors for this beneficial service.
Debbie Rubio
There are times in life when your first attempt at something is just not good enough. Throughout life, you may often be told to try again to get it right:
- As a teenager, you cleaned your room. Your mother took one look and said, “Not good enough – do it again.”
- You turned in a school term paper and the teacher promptly returns it with lots of red writing that points out errors, offers suggestions and says “try again.”
- Your boss tells you the proposal you submitted is not exactly what she wanted and requests you make modifications and try again.
Such constructive criticism may make you mad, embarrassed, or simply thankful for a second chance. However you feel, you must get to work and try again. It happens to everyone.
Case in point, it happened in February of this year to CMS, specifically to the Secretary of Health and Human Services. The Court told the Secretary to try again in regards to the Educational Campaign for the Jimmo settlement.
First a review of the Jimmo Settlement – in 2011, a class action suit was filed against the Secretary of HHS, Jimmo v. Sebelius, in which the plaintiffs alleged that Medicare contractors (MACs) were inappropriately applying an “Improvement Standard” in making claims determinations for Medicare coverage involving skilled care (e.g., the skilled nursing facility (SNF), home health (HH), and outpatient therapy (OPT) benefits). In other words, MACs were denying claims for skilled care because there was no expectation the patient could improve. The argument was that Medicare should cover these services because the beneficiary did require a covered level of skilled care in order to prevent or slow further deterioration in his or her clinical condition. The Court agreed. Medicare also agreed such services should be covered, but claimed that had always been their policy. They denied ever having an “Improvement Standard” rule-of-thumb. They further stated Medicare policy had long recognized skilled care may be required in order to prevent or slow deterioration and maintain a beneficiary at the maximum practicable level of function.
To promote better understanding and application of their existing policies concerning maintenance care, Medicare agreed to clarify that “when skilled services are required in order to provide care that is reasonable and necessary to prevent or slow further deterioration, coverage cannot be denied based on the absence of potential for improvement or restoration.” To accomplish this, CMS agreed to:
- Revise the relevant program manuals used by Medicare contractors to reinforce the intent of the policy. Specifically, coverage of therapy “...does not turn on the presence or absence of a beneficiary’s potential for improvement from the therapy, but rather on the beneficiary’s need for skilled care.”
- Provide an educational campaign for contractors, adjudicators, and providers and suppliers. Education efforts would include written materials, such as Program Transmittals, MLN Matters articles, updated 1-800 MEDICARE script, and national conference calls to communicate the policy clarifications and answer questions.
- Establish accountability measures such as random reviews to determine trends and identify problems, and review of individual claims determinations that may not have been made in accordance with the principles set forth in the settlement agreement.
Medicare stressed that this was not an expansion of coverage, but clarification of existing policies. They also used the Jimmo settlement revisions to introduce additional guidance on documentation requirements.
“Care must be taken to assure that documentation justifies the necessity of the skilled services provided. Justification for treatment would include, for example, objective evidence or a clinically supportable statement of expectation that:
- In the case of rehabilitative therapy, the patient’s condition has the potential to improve or is improving in response to therapy; maximum improvement is yet to be attained; and, there is an expectation that the anticipated improvement is attainable in a reasonable and generally predictable period of time.
- In the case of maintenance therapy, the skills of a therapist are necessary to maintain, prevent, or slow further deterioration of the patient’s functional status, and the services cannot be safely and effectively carried out by the beneficiary personally, or with the assistance of non-therapists, including unskilled caregivers.”
CMS revised the manuals. The revisions can be seen as red text in the attachments to Transmittal 179 (CR8458) updating chapters of the Medicare Benefit Policy manual regarding Inpatient Rehab facilities, Home Health services, Skilled Nursing Facilities, and Outpatient Rehabilitative Therapy services (physical therapy, occupational therapy and speech language pathology services).
They also provided some education, but alas, it was not good enough. In a second suit brought in 2016 (Jimmo v. Burwell), the Court found that CMS (the Secretary) “failed to fulfill the letter and spirit of the Settlement Agreement with respect to at least one essential component of the Educational Campaign.…(S)ome of the information provided by the Secretary in the Educational Campaign was inaccurate, nonresponsive, and failed to reflect the maintenance coverage standard.”
In a February 2017 ruling, the Court mandated implementation of a Corrective Action Plan developed by the Secretary (which goes beyond the requirements of the Settlement agreement) with two required additions. Here are some of the actions CMS is required to take by September 4, 2017:
- CMS will create a webpage on its website dedicated to the Jimmo The webpage will include:
- A message at the top of the webpage summarizing the clarifications to Medicare policy made pursuant to the settlement,
- A statement from CMS disavowing the application of the so-called "Improvement Standard" as improper under Medicare policy for the SNF, HH, and OPT benefits, while making clear that CMS has consistently denied the existence of such an "Improvement Standard."
- Access to public documents related to the settlement,
- Directions for providers and suppliers to the appropriate MAC for questions regarding individual claims,
- A set of Frequently Asked Questions (FAQs) regarding the policy clarification resulting from the Jimmo settlement,
- Messages notifying providers, adjudicators, contractors, and other stakeholder of the webpage and including the disavowal statement, and
- Letters to the MACs and Medicare Advantage Organizations (MAOs) directing them to conduct, within a specified timeframe, additional training on the Jimmo manual clarifications with training materials provided by CMS.
The first “additional requirement” of the Court agreement is a prescribed “Corrective Statement” adopted by the Court to be included on the Jimmo webpage, in the FAQs, and in the written materials and oral statements the Secretary has agreed to disseminate as part of her corrective action plan. The second is that CMS shall hold a national call in which the Corrective Statement is orally disseminated. To alleviate any confusion about the purpose of the call, the call notice must state, “This call will include corrective action mandated by the court overseeing the Jimmo settlement, clarifying the rejection of an improvement standard and explaining the maintenance coverage standard now included in the Medicare Beneficiary Policy Manual."
In plain language, what does this mean for therapy providers?
- It means they can provide therapy services to Medicare patients who do not have the potential to improve, but need skilled care to prevent further decline in function.
- The term “skilled” is key; these services could not safely and effectively be provided by non-skilled personnel.
- Documentation must support the need for skilled care and that the therapy is expected to prevent or slow further deterioration in the patient’s condition.
- As with all therapy, the patient should benefit from the therapy as expected in established goals. If the goals are to slow further decline, documentation should support that the therapy is accomplishing that goal.
- Therapy caps and the therapy threshold still apply to these services. Medically necessary services beyond the cap and threshold can still be provided, but may be reviewed by Medicare to ensure it was indeed medically necessary.
So bottom line for therapists – be reasonable with therapy duration and document thoroughly.
For inpatient hospital providers, this “maintenance therapy” standard could affect the need for care in post-acute care settings such as IRF, SNF, or HH care.
The new Jimmo Settlement webpage was made live a couple of weeks ago and a notice was published in the August 24, 2017 MLN Connects publication both including the required “Corrective Statement.” CMS appears to be off to a good start on their re-try. Glad it wasn’t my term paper.
Debbie Rubio
For over a year now, MMP has included updates to CMS transmittals and other CMS news related to acute-care hospitals as a standing article in our Wednesday@One newsletter. Do your eyes sometimes glaze over as you scan titles, numbers, dates, links, etc. or do you hear the adult-speak from the Peanuts cartoons (warnk, warnk, warnk)? I know I do, so beginning this month, we are presenting this information in a different format. We will present a single straight-forward short description of the topic of the transmittal or other update. Then if you want to know more, we provide the link to the MLN Article or other applicable document. We hope you find this new format easier to read and a better direction on what you need to know. We welcome your feed-back on our new format.
Updated Part B Drug Pricing Files
Quarterly updates to the ASP Medicare Part B Drug Pricing files.
New Waived Tests
New waived laboratory tests approved by the FDA for performance in a waived laboratory.
NPI for CWF Provider Queries
Beginning January 2018, the CWF Provider Queries will only accept NPIs as Valid Provider Numbers.
Correction to Transfer Payment for MS-DRG 385
CMS is correcting the FISS IPPS Pricer for correct calculation of transfer payments for DRB 385.
2018 ICD-10-CM POA Exempt Codes Available
The 2018 ICD-10-CM Present on Admission (POA) Exempt Codes are posted on the 2018 ICD-10-CM and GEMs webpage.
Updated Editing of Always Therapy Services
Revised editing of “always therapy” services to require the appropriate therapy modifier in order for the service to be accurately applied to the therapy cap.
NCD 20.8.4 for Leadless Pacemakers
Effective January 1, 2018, Medicare will cover leadless pacemakers when provided in a CMS-approved study.
Provider-Based Determination
Beginning November 6, 2017, MACs are required to use a uniform electronic Provider-Based (PB) checklist to perform uniform reviews of provider-based applications.
HCPCS Codes Used for SNF CB Enforcement
Quarterly (October 1, 2017) update to the list of HCPCS codes that are subject to the Consolidated Billing provision of the SNF Prospective Payment System.
Inpatient Psychiatric Facilities Prospective Payment System (IPF PPS) Fiscal Year (FY) 2018
Updates to the Medicare Claims Processing Manual based on the IPF PPS final rule for FY 2018 (October 1, 2017 – September 30, 2018)
Quarterly Influenza Virus Vaccine Code Update – January 2018
Quarterly update to flu vaccine codes. Effective January 2018, there is one new influenza virus vaccine code: 90756
ICD-10 Coding Revisions to National Coverage Determinations (NCDs)
Periodic updates of claim processing edits based on ICD-10 coding for NCDs. Watch these carefully as they may affect which ICD-10 codes support medical necessity for the involved services.
ICD-10 GEMS for 2018 Available
The 2018 General Equivalence Mappings (GEMs) are available:
- Diagnosis: 2018 ICD-10-CM and GEMs webpage
- Procedures: 2018 ICD-10-PCS and GEMs webpage
This is the last year that the GEMs will be produced. The 2018 ICD-10-CM Guidelines and Conversion Table will be posted once the Centers for Disease Control and Prevention finalizes them.
Inpatient Prospective Payment System (IPPS) Final Rule
The IPPS final rule was published in the Federal Register on Monday, August 14, 2017. The rule finalizes 2018 payment and policy updates for Medicare hospital admissions.
https://www.gpo.gov/fdsys/pkg/FR-2017-08-14/pdf/2017-16434.pdf
ICD-10-CM Official Guidelines for Coding and Reporting
National Center for Health Statistics (NCHS) published new coding and reporting guidelines for using ICD-10 for fiscal year 2018.
https://www.cdc.gov/nchs/data/icd/10cmguidelines_fy2018_final.pdf
Credentials of Reviewers
This transmittal instructs Medicare reviewers (MACs, CERT, RACs, and ZPICs) to ensure complex reviews for coverage determinations are performed by Registered Nurses (RNs), therapists or physicians.
https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2017Downloads/R737PI.pdf
Medicare Parts A & B Appeals Process Booklet
A new MLN booklet (June 2017) describes the appeals process, including the latest changes to the appeals process.
Influenza Vaccine Payment Allowances - Annual Update for 2017-2018 Season
Provides the Medicare Part B payment allowances for influenza vaccines for August 1, 2017-July 31, 2018.
Claim Status Category and Claim Status Codes Update
Updates, as needed, the Claim Status and Claim Status Category Codes for electronically submitted health care claims status requests and responses to explain the status of submitted claim(s).
Enforcement of the Partial Hospitalization Program (PHP) 20 Hours per Week Billing Requirement - Rescinded
MLN Matters Article SE1307 was rescinded on August 18, 2017.
Prohibition on Billing Dually Eligible Individuals Enrolled in the Qualified Medicare Beneficiary (QMB) Program – Revision
Revision on August 23, 2017 about system changes to identify the QMB status and exemption from Medicare cost sharing, ways to promote compliance with QMB billing rules, and reminder on Medicare bad debt.
Proposed Rule- Medicare Program; Cancellation of Advancing Care Coordination Through Episode Payment and Cardiac Rehabilitation Incentive Payment Models; Changes to Comprehensive Care for Joint Replacement Payment Model (CMS-5524-P)
Proposal to cancel the Episode Payment Models (EPMs) and Cardiac Rehabilitation (CR) incentive payment model and to revise certain aspects of the Comprehensive Care for Joint Replacement (CJR) model.
Provider Error Rate Formula
Instructs Medicare Administrative Contractors (MACs) to include claims denied due to no response to additional documentation requests (ADRs) when calculating the provider error rate.
https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2017Downloads/R738PI.pdf
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