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 Outpatient Services
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OIG Report: Outpatient Services Before/During Inpatient Stays
Published on Aug 22, 2017
20170822
 | AL Medicaid 
 | Billing 
 | OIG 
 | Outpatient Services 

No hospitals want the Office of Inspector General (OIG) to come knocking on their door. If they do, they will likely find at least some billing errors which will likely result in the need to refund payments.  The hospital also has to respond to the OIG findings and give reasons for the errors.  These may often sound like excuses, but if there were improper payments, there was a reason, excuse or not.  Sometimes the dog does eat the homework.  In a recent OIG report concerning outpatient services furnished before or during inpatient stays, hospitals gave the following reasons for incorrect billing.

  • They did not understand Medicare requirements,
  • Clerical errors, and
  • They were not aware the patients were inpatients at other hospitals.

Clerical errors and lack of complete patient information are going to happen.  Your hospital can decrease the likelihood of their occurrence by having well-trained employees and sufficient oversight.  I think CMS will find the lack of understanding of Medicare rules to be the most egregious of the reasons.  It may fall under the “should have known” or “deliberate ignorance” category of excuses.  Lack of understanding of Medicare requirements is shaky ground.  This is why MMP provides this newsletter and our other services – to help educate providers concerning Medicare requirements – so let’s look at outpatient services furnished before or during inpatient stays.

An inpatient admission includes room and board; nursing and social services; diagnostic, therapeutic, and surgical services; drugs, supplies, and equipment; and transportation services.  In fact the only services listed in Chapter One of the Medicare Benefits Manual  as not included in the inpatient admission are post-hospital nursing facility services and the professional services of physicians and other practitioners.  On occasion, inpatients may have to be sent to another facility to receive services not offered at the host (admitting) hospital.  Such services are provided “under arrangements” to the patient – this means:

  • the host hospital includes the charges for the services on their inpatient claim to Medicare and
  • the host hospital pays the other facility for the services.

There should be clear communication between the hospital and other facilities for any “under arrangement” services so that inappropriate billing does not occur.  Inpatients may also go to outpatient departments within the host hospital during their inpatient stay to receive services – these services are included in the inpatient hospitalization and are not separately billable as outpatient services to Medicare.

Medicare has rules that certain outpatient services furnished before an inpatient admission also have to be bundled onto the inpatient claim.  This is known as the three-day payment window rule.  In general, outpatient services furnished within 3 days prior to and including the date of the patient’s admission are deemed to be inpatient services and included in the inpatient payment. For Medicare there are always nuances to the rules, and this one is no different.

  • The rule applies to outpatient services furnished by the admitting hospital, or by an entity wholly owned or wholly operated by the admitting hospital, or by another entity under arrangements with the admitting hospital. This includes the technical portion of services provided at a hospital-owned or hospital-operated physician clinic or practice.
  • The patient must have Part A coverage for the rule to apply.
  • Ambulance services, maintenance renal dialysis services, and Part A services furnished by skilled nursing facilities, home health agencies, and hospices are excluded from the payment window provisions.
  • The 3-day rule applies to IPPS hospitals (hospitals paid under the inpatient prospective payment system). For hospitals and units excluded from IPPS, this provision applies only to services furnished within one day prior to and including the date of the admission (a 1-day rule).
  • It is a 3 day rule and NOT a 72 hour rule. Three days means the 3 calendar days prior to admission – for a patient admitted on a Wednesday, the 3 days would be Sunday, Monday, and Tuesday.
  • Outpatient services furnished more than 3 days prior to admission, even if part of a single, continuous outpatient encounter prior to admission, are not included on the inpatient claim and may be billed separately on an outpatient claim.
  • The rule does not apply to some differently paid entities, such as CAHs, RHCs, and FQHCs. You should read the regulation in Chapter 3, Medicare Claims Processing Manual, section 40.3 for complete information on exclusions.

The 3-day rule is also affected by the type of services provided and whether they are related to the reason for admission or not.  I like to break the rule down into three parts for easier understanding.

  • All outpatient services (diagnostic and non-diagnostic) subject to the rule that are provided on the day of admission must be billed with the inpatient admission.
  • All outpatient diagnostic services provided within the 3- day payment window (or 1-day window for non-IPPS hospitals) must be billed with the inpatient admission.
  • Non-diagnostic services related to the inpatient admission and provided within the payment window must be billed with the inpatient admission.

The billing hospital determines and attests if non-diagnostic services furnished on the first, second, or third day prior to admission are unrelated to the inpatient admission.  Medicare defines unrelated services as services that are clinically distinct or independent from the reason for the beneficiary’s admission.  These “unrelated” services may be billed on a separate outpatient (Part B) claim with a condition code “51” which is the hospital’s attestation the services are unrelated. Documentation in the patient’s medical record must support that the non-diagnostic services provided within the payment window are unrelated to the patient’s inpatient admission.

The section of the Claims Processing Manual referenced above also includes further explanations and definitions of ownership, non-IPPS hospitals, diagnostic services, and more. Providers need to carefully review the guidance in the manual to have a complete understanding of all the requirements for billing outpatient services provided prior to admission.

This advice applies to all Medicare requirements.  It is the provider’s responsibility to be knowledgeable of Medicare rules, regulations, and guidance. Remember, not “knowing” or not “understanding” are not good excuses.

Debbie Rubio

Updates to the OIG Work Plan
Published on Aug 01, 2017
20170801
 | FAQ 
 | OIG 
 | Outpatient Services 

Back in June when the Office of Inspector General (OIG) changed the process and publication of their Work Plan, they used the word “dynamic” to describe their work planning process.  The Merriam-Webster dictionary defines dynamic as “marked by usually continuous and productive activity or change.”  So far, the OIG is remaining true to this definition by posting numerous new issues each month.  For July, the OIG posted 14 new issues all focused on the CMS agency.  The OIG is responsible for oversight for all agencies of Health and Human Services (HHS), but a review of active issues shows that most of their efforts are related to CMS.

I understand the OIG’s responsibility “to provide independent and objective oversight that promotes economy, efficiency, and effectiveness in the programs and operations of HHS.” But having worked in hospitals for years, I also understand the challenges of complying with all of the Medicare rules. If it were easy we might not need the OIG, but it is definitely not an easy task. 

Since MMP’s focus is hospital Medicare issues, I will only describe the new OIG Work Plan items related to hospitals and Medicare.  For a list of all the new issues, see the OIG’s Recently Added updates.

Nationwide Medicare Electronic Health Record Incentive Payments to Hospitals

Hospital can receive incentive payments for adopting electronic health record (EHR) technology. The OIG is concerned about potential incentive overpayments. Their concerns are based on the following:

  • The Government Accountability Office (GAO) identified improper incentive payments as the primary risk to the Medicare EHR incentive program.
  • An OIG report found CMS faces obstacles in oversight of the EHR program.
  • OIG reviews showed that State agencies have and will continue to overpay hospitals millions of dollars due to inaccuracies in the hospitals’ calculations.

The OIG will be reviewing hospitals’ incentive payment calculations to ensure appropriate payment amounts and prevent future overpayments.  This is a hospital finance issue which is not my area of expertise, but I bet it is not that easy.  Calculations never are.

Review of Medicare Payments for Nonphysician Outpatient Services Provided Under the Inpatient Prospective Payment System

Medicare pays hospitals a prospective payment amount for inpatient services – we know this as the DRG payment.  The DRG payment is payment for all the hospital’s operating costs associated with the inpatient admission. This also includes diagnostic and related therapeutic outpatient services provided the day of admission or within the 3 days prior to admission under Medicare’s 3-day payment window rule.  Identifying those outpatient services that should be bundled with the inpatient claim and then billing correctly in compliance with the 3-day payment window is not an easy task either. Prior OIG reviews have found overpayments where hospitals billed inappropriately and Medicare contractors paid for outpatient services provided during or before the inpatient admission. The OIG will review to determine if outpatient payments during an inpatient admission and under the payment window rule were correct.

Medicare Payments for Unallowable Overlapping Home Health Claims and Part B Claims

Home Health (HH) agencies are also paid a Medicare prospective payment which covers all of their costs for providing services to the patient.  This includes services furnished by the home health agency and certain items or services provided under arrangement. The home health consolidated billing requirements mandate that certain items, supplies, and services are part of the home health payment and should not be billed separately to Medicare Part B from other entities. The OIG will be looking to see if Part B payments were allowable and followed the consolidated billing requirements.  From my experience, the major area of concern related to HH consolidated billing for hospitals is rehabilitative therapy services.  Medicare patients may present to a hospital’s therapy department for services even though they are receiving HH services. Hospitals should check Medicare eligibility systems and question the patient carefully to determine if they are currently under a home health plan of care.

Medicare Payments for Unallowable Overlapping Hospice Claims and Part B Claims

Once a Medicare beneficiary elects hospice care, all services related to the terminal illness are handled by the hospice.  Hospitals must seek payment for services provided to a hospice patient and related to the terminal illness from the hospice agency and not from Medicare. The OIG is reviewing to make sure any separate Part B payments were appropriate. Hospitals are often caught unaware when a hospice patient shows up in their emergency department. The hospital must determine if the patient has elected hospice and if so, is the medical condition for which they are seeking treatment related to the terminal illness.  If the answer to both is yes, the hospital must coordinate with the hospice agency to determine appropriate treatment and billing.  Not an easy task, especially in an emergency department setting. The same applies to non-emergency hospital services – reference laboratory testing is one example, but your clue here should be that the specimens are brought in by a hospice nurse.  In MMP’s experience, edits in the Medicare claims processing system catch most of these overlaps with hospice agencies and deny the hospital’s payment. It is then up to the hospital to spend extra time and effort to determine the circumstances and obtain payment from the hospice agency.  Not an easy task on the back end either.

One last issue somewhat related to hospitals:

Review of Medicare Payments for Telehealth Services

One of the Medicare requirements for telehealth payment is that the services be between a beneficiary located at a rural originating site and a practitioner located at a distant site.  An eligible originating site must be the practitioner’s office or a specified medical facility, such as a hospital.  The OIG will be looking for telehealth payments where there was not a corresponding claim from the originating site to ensure the payments were correct.  More information on billing telehealth services can be found in the Medicare Telehealth Fact Sheet.

Not much about health care and hospital services is easy, but the OIG work plan gives us some areas on which to focus our scrutiny when it comes to billing Medicare.

Debbie Rubio

July Medicare Transmittals and Other Updates
Published on Jul 25, 2017
20170725
 | Billing 
 | Coding 
 | Medicare Coverage 
 | Outpatient Services 

TRANSMITTALS

The Supplemental Security Income (SSI)/Medicare Beneficiary Data for Fiscal Year 2015 for Inpatient Prospective Payment System (IPPS) Hospitals, Inpatient Rehabilitation Facilities (IRFs), and Long Term Care Hospitals (LTCH)

Summary: Informs MACs about updated data for determining the disproportionate share adjustment for Inpatient Prospective Payment System (IPPS) hospitals and the low income patient (LIP) adjustment for IRFs as well as payments as applicable for Long Term Care Hospitals (LTCH) discharges (for example, discharges paid the IPPS comparable amount under the short-stay outlier payment adjustment).

Implementing FISS Updates to Accommodate Section 603 Bipartisan Budget Act of 2015 - Phase 2

Summary: If a hospital claim is submitted with a service facility location that was not included on the CMS 855A enrollment form, the claim will be Returned to the Provider (RTP) until the CMS 855A enrollment form and claims processing system are updated.

Quarterly Update to the National Correct Coding Initiative (NCCI) Procedure to Procedure (PTP) Edits, Version 23.3, Effective October 1, 2017

Summary: Informs the MACs about the update to the National Correct Coding Initiative (NCCI) procedure to procedure edits (PTP). This notice applies to Chapter 23, Section 20.9 of the Medicare Claims Processing Manual

Changes to the Laboratory National Coverage Determination (NCD) Edit Software for October 2017

Summary: Informs MACs about the changes that will be included in the October 2017 quarterly release of the edit module for clinical diagnostic laboratory services.

Clarifying the Instructions for Amending or Correcting Entries in Medical Records

Summary: Clarifies the requirements for a practitioner to authenticate an alteration or revision in the medical records. The contractor shall also accept initials in instances when the author of the alteration must sign and date a revision made.

Notice of New Interest Rate for Medicare Overpayments and Underpayments -4th Qtr Notification for FY 2017

Summary: Medicare Regulation 42 CFR Section 405.378 provides for the charging and payment of interest on overpayments and underpayments to Medicare providers. The Department of the Treasury has notified the Department of Health and Human Services that the private consumer rate has been changed to 10.125 percent.

 

REVISED TRANSMITTALS

Qualified Medicare Beneficiary Indicator in the Medicare Fee-For-Service Claims Processing System

Screening for Hepatitis B Virus (HBV) Infection

Percutaneous Image-guided Lumbar Decompression (PILD) for Lumbar Spinal Stenosis (LSS)

Summary: Update references in the CPM and NCD manuals and to add clarifying language.  In the NCD manual, the reference to Pub 100-04, Chapter 32, and Section 68 needs to be changed to Section 69. In the CPM manual, the reference in Pub. 100-04, Chapter 32, Section 68 needs to be changed to Section 69 and clarifying language needs to be added to indicate that CMS will cover procedure code 0275T for PILD only when the procedure is performed within any other CED approved randomized and non-blinded clinical trial.  All other information remains the same.

OTHER MEDICARE ANNOUNCEMENTS

Proposed Policy, Payment, and Quality Provisions Changes to the Medicare Physician Fee Schedule for Calendar Year 2018

Summary: The Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that includes proposals to update payment policies, payment rates, and quality provisions for services furnished under the Medicare Physician Fee Schedule (PFS) on or after January 1, 2018.

CMS Proposes Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System Changes for 2018, and Releases a Request for Information (CMS-1678-P)

Summary: The Centers for Medicare & Medicaid Services (CMS) issued the Calendar Year (CY) 2018 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System proposed rule (CMS-1678-P) that includes updates to the 2018 rates and quality provisions, and proposes other policy changes. CMS is proposing a number of policies that would support care delivery; reduce burdens for providers, especially in rural areas; lower beneficiary out of pocket drug costs for several drugs; enhance the patient-doctor relationship; and promote flexibility in healthcare.

Revision of Civil Money Penalty (CMP) Policies and CMP Analytic Tool

  • July 07, 2017
  • Memorandum

Summary: This policy memo replaces S&C Memo 15-16-NH. When noncompliance exists, enforcement remedies, such as civil money penalties (CMPs), are intended to promote a swift return to substantial compliance for a sustained period of time, preventing future noncompliance. To increase national consistency in imposing CMPs, the Centers for Medicare & Medicaid Services (CMS) is revising the CMP analytic tool.

Medicare Quarterly Provider Compliance Newsletter [Volume 7, Issue 4]

Summary: Educational newsletter.  This quarter’s focus is on Cert Findings regarding Skilled Nursing Facility (SNF) Certification and Re-certification and OIG Findings regarding Studies of Hospital Billings of use of Modifier 59 on Heart Biopsy Claims and Procedure Coding for Ventilation Support Claims 

Proposed Payment Rate for Nonexcepted PBDs
Published on Jul 25, 2017
20170725
 | Outpatient Services 

CMS is known for their novel-length explanations of their calculations and reasoning for rate setting.  This year is no different as they take over 20 pages of the Medicare Physician Fee Schedule (MPFS) Proposed Rule for 2018 to explain why they chose an adjustment of 25% versus last year’s 50% adjustment for the PFS payment rates for nonexcepted off-campus hospital provider based department payment rates.  Then they say based on comments, they may consider a middle ground such as 40% - maybe they should just spin a wheel.

In compliance with Section 603 of the Bipartisan Budget Act of 2015, CMS began paying nonexcepted hospital provider based departments under a different payment system than the Outpatient Prospective Payment System (OPPS) beginning January 1, 2017.  Nonexcepted PBDs are new off-campus hospital provider-based departments that began furnishing and billing for services on or after November 2, 2015.  The payment system CMS selected for payment of nonexcepted services was the Physician Fee Schedule (PFS).  For 2017, Medicare set PFS rates at 50% of the OPPS payment rates. This 50% adjustment is known as the PFS Relativity Adjuster. In the 2018 MPFS Proposed Rule, CMS proposes revising the PFS Relativity Adjuster for nonexpected hospital PBDs for CY 2018. 

Background

First, let’s look at a little background on the payment system.  CMS originally proposed to pay only the physicians at a non-facility rate for these services and provide no payment to the hospital. There were many concerns with this approach so CMS selected the PFS as the payment system for nonexcepted PBDs.  They set new PFS rates at 50% of OPPS rate, which allowed hospitals to continue to bill on an institutional UB claim form. CMS required nonexcepted services to be appended with a PN modifier so the appropriate payment rate could be applied.  This also allowed the claims to process through the Outpatient Code Editor (OCE) so OPPS packaging rules (such as comprehensive APCs, packaged and conditionally packaged services) could be applied to the claims. Services assigned to an OPPS status indicator of “A” continued to be paid under the “other” appropriate fee schedules. That included therapy services paid under the MPFS, laboratory services when separate payment criteria is met under the Clinical Lab Fee Schedule, separately payable drugs at ASP + 6%, preventive services, etc. For more information on the 2017 payment system see last year’s article.

In 2017 CMS attempted to strike an appropriate balance that avoided potentially underestimating the relative resources involved in furnishing services in nonexcepted off-campus PBDs.  CMS arrived at a 50% reduction of OPPS rates by comparing the OPPS rate to the technical component portion of PFS rate and to the ASC rate for 22 high volume services. Although there was considerable variation in the differences, per CMS “the overall total payment made for services is more relevant to the goal of site neutrality than the quantity of individual payments made.” It is important to note that the data analysis did not include the most frequently billed service furnished in nonexcepted off-campus hospital PBDs, outpatient visits.

2018 Proposed Payment

Precise data to identify and value nonexcepted services billed by hospitals is still not available for 2018 rate setting, so again CMS must estimate payment rates to reflect overall relativity between PFS and OPPS payments. 

The bad news is that in the 2018 proposal, CMS shifts their focus from making sure rates do not underestimate the relativity to ensuring rates do not overestimate the appropriate overall payments for these services.  Since the majority of services currently billed in off-campus PBDS are visit services, for 2018 CMS performed a comparison of only the clinic visit code, G0463 to the weighted average of outpatient visits (CPT codes 99201-99205 and CPT codes 99211-99215) billed by physicians and other professionals in an outpatient hospital place of service.  Based on this comparison, CMS arrived at a proposed PFS Relativity Adjuster of 25%.  This means nonexcepted services provided in a nonexcepted off-campus hospital PBD will be paid at 25% of the OPPS rate for that service. This is a significant payment decrease for 2018 from the 2017 payment rate.

CMS is requesting comment on whether they “should adopt a different PFS Relativity Adjuster, such as 40 percent, that represents a relative middle ground between the CY 2017 PFS Relativity Adjuster, selected to ensure adequate payment to hospitals and our proposed CY 2018 PFS Relativity Adjuster, selected to ensure that hospitals are not paid more than others would be paid through the PFS nonfacility rate.”

Other payment policies for nonexcepted off-campus PBDs that are not proposed to change from last year include:

  • OPPS packaging rules will continue to apply
  • Services with an OPPS status indicator of “A” will continue to be paid under the appropriate fee schedule
  • Partial hospitalization program (PHP) will be paid at the Community Mental Health Centers (CMHCs) per diem rate for APC 5853, for providing three or more partial hospitalization services per day
  • Hospitals will report radiation treatment delivery procedures with the HCPCS “G” codes appended with the PN modifier, which will be paid at the MPFS technical component rate
  • Hospitals will bill clinic visits at nonexcepted off-campus PBDs with HCPCS code G0463 (which will be paid at 25% of the OPPS rate)
  • Outlier payments, the rural sole community hospital (SCH) adjustment, the cancer hospital adjustments, transitional outpatient payments, the hospital outpatient quality reporting payment adjustment, and the inpatient hospital deductible cap to the cost-sharing liability for a single hospital outpatient service are not being adopted into the new payment system
  • The supervision rules that apply for hospitals will continue to apply for off-campus PBDs that furnish nonexcepted items and services
  • Beneficiary cost-sharing under MPFS of 20% will apply
  • Geographic adjustments used under the OPPS continue to apply

Moving Forward

CY 2017 claims data for services reported using the “PN” modifier will be available for use in PFS rate setting for CY 2019.  CMS plans to use these data to determine the appropriate PFS Relativity Adjuster and additional adjustments if appropriate.  They want to equalize payment rates as much as possible but still allow straight-forward billing.  CMS’s ultimate goal is to attain “site neutral payments to promote a level playing field under Medicare between physician office settings and nonexcepted off-campus PBD settings, without regard to the kinds of services furnished by particular off-campus PBDs.”

Debbie Rubio

Medicare to Cover Exercise Therapy for PAD
Published on Jun 13, 2017
20170613
 | Medicare Coverage 
 | Outpatient Services 

I do not usually write articles about Medicare Coverage Decision Memorandums. This is because Coverage Decision Memos are not binding on contractors or Administrative Law Judges (ALJs) until they are implemented in a CMS-issued program instruction. Formal program instructions are supposed to occur within 180 days of the end of the calendar quarter in which the memo was posted on the Web site. If there are specific coding and billing instructions, they will also be published at the same time in a transmittal that updates the Medicare Claims Processing manual. The effective date of Medicare coverage of a particular service finalized in a National Coverage Determination (NCD) appears to always be made retroactive back to the date of the decision memo. So although the coverage of a service begins at the time of the Decision Memo, providers shouldn’t attempt to bill for the service until a final NCD and any associated billing/coding instructions are released.

This time I am going to make an exception because I think it is very interesting and an excellent Medicare benefit that CMS has decided to cover exercise therapy for patients with peripheral artery disease (PAD). PAD is the buildup of plaque in the arteries causing narrowing and affecting the lower extremities. Approximately 12% of Americans have PAD, but the prevalence increases with age. PAD causes pain and discomfort in the legs when walking or exercising but resolves with rest. This is known as intermittent claudication (IC). IC can dramatically affect patients’ functional independence and quality of life. As with all things Medicare, the minutiae are in the explanation of the coverage requirements.

Medicare will cover supervised exercise therapy (SET) when the following requirements are met:

  • For beneficiaries with intermittent claudication (IC) for the treatment of symptomatic peripheral artery disease (PAD);
  • Up to 36 sessions over a 12 week period;
  • Sessions lasting 30-60 minutes comprising a therapeutic exercise-training program for PAD in patients with claudication;
  • In a hospital outpatient setting, or a physician’s office;
  • Delivered by qualified auxiliary personnel trained in exercise therapy for PAD to ensure benefits exceed harms; and
  • Under the direct supervision of a physician, physician assistant, or nurse practitioner/clinical nurse specialist trained in both basic and advanced life support techniques.

The patient must have a face-to-face visit with and obtain a referral for the SET from the physician treating their PAD. At this visit, the patient must receive information on cardiovascular disease and PAD risk factor reduction. This could include education, counseling, behavioral interventions, and outcome assessments. The Medicare Administrative Contractor may approve 36 additional sessions of SET for PAD based on a second referral. Medicare will not cover SET if a patient’s primary physician determines the patient has an absolute contraindication to exercise.

Exercise therapy is an effective way to alleviate the pain of PAD. SET may also prevent the progression of PAD and lower the risk of cardiovascular events that are prevalent in these patients. Greater access to SET programs could decrease the need for endovascular revascularization (ER) procedures so that ER can be reserved for cases where the patient is too functionally impaired for SET.

Providers should be on the lookout for the NCD and any associated claims processing instructions related to this decision memo.

Debbie Rubio

Pathology Tests Violate False Claims Act
Published on Jun 06, 2017
20170606
 | FAQ 
 | OIG 
 | Outpatient Services 

How do you go from laboratory technologist to compliance professional? You see it often because the detail oriented mind of laboratorians fits well into the myriad details of compliance requirements. For me, I happened to be the manager of a hospital outpatient laboratory at the time the Office of Inspector General (OIG) released the Compliance Program Guidance for Clinical Laboratories. In short order, it fell upon my shoulders to “do something” about this Compliance Guidance. The OIG guidance was in part a response to recent concerns about laboratory billing practices. A prominent national laboratory had at the time been under scrutiny for adding one more laboratory test to a large, frequently ordered lab profile that consisted of a significant number of different lab tests. According to the government, this caused physicians to unknowingly (or at least without careful consideration of medical need) order “medically unnecessary” lab tests.

I often refer to this as “the original compliance sin” and the issue of medical necessity is still a major concern for compliance, and not only for laboratory tests. Medical necessity now involves various types of medical services – from ambulances, to cardiology procedures, to high-cost drugs, to joint replacements, to many other services and even back to laboratory tests. Two recent enforcement actions posted on the OIG’s website are related to medically unnecessary laboratory pathology services.

The first case involves Poplar Healthcare located in Memphis, Tennessee, which paid nearly $900,000 to resolve False Claims Act allegations. According to the Department of Justice (DOJ) Press Release, “The government alleges that Poplar, directly and through a subsidiary known as GI Pathology, promoted and billed the government for diagnostic tests that the government contends were not medically necessary.” Poplar conducted an extensive, multi-year promotional campaign promoting the use of a special pathology stain they claimed could definitively diagnose “mast cell enterocolitis.” The government contended Poplar’s claims about the stain were not supported by scientific evidence and were not consistent with FDA approval requirements.

A similar case against Piedmont Pathology in Hickory, N.C also involves the medically unnecessary use of pathology stains. In this case, the pathology laboratory was performing and billing for special stains on certain gastric biopsies. The special stains were performed before a pathologist reviewed routinely stained specimens to determine if there was a medical need for the additional special stains. Piedmont Pathology has agreed to pay the United States $601,000 to settle allegations that it violated the False Claims Act by submitting false claims to Medicare and Medicaid for medically unnecessary procedures. The DOJ press release provides further details.

Another similarity between these two cases is that both were “whistleblower” cases where a private citizen can bring suit on behalf of the government for false claims under provisions of the False Claim Act. The government can decide to take over the case and the whistleblower shares in any monetary recovery. In these cases, the relator’s share was $205,841 and approximately $120,200, respectively.

There are important take-aways for all providers from these settlements:

  • The government is serious about the medical necessity of services (for all types of healthcare services);
  • No service is too big or too small for government attention;
  • Be careful what a vendor tries to sell you;
  • Verify the medical need for the services you provide; and
  • Watch out for the whistleblowers!

Debbie Rubio

May Medicare Transmittals and Other Updates
Published on May 30, 2017
20170530
 | Recovery Auditor 
 | Billing 
 | Medicare Coverage 
 | Outpatient Services 

TRANSMITTALS

Update FISS Editing to Include the Admitting Diagnosis Code Field

Summary: Updates various system edits to look at the admitting diagnosis field. FISS editing is now being updated to ensure that all of the National Coverage Determination (NCD) edits within Reason Code ranges 3xxxx and 59xxx that are tied to the diagnosis code fields (other than the primary diagnosis field) include the admitting diagnosis field for Inpatient claims on Types of Bill (TOB) 011x, 012x, 018x, 021x, and 022x.

Screening for Hepatitis B Virus (HBV) Infection

Summary: Medicare will cover screening for Hepatitis B Virus (HBV) infection for certain individuals when performed with an FDA approved/cleared laboratory tests

REVISED: Revision to clarify language on page 3, under the “Professional Billing Requirements.” It now reads, only when services are ordered by the following provider specialties found on the provider’s enrollment record…

Implementing the Remittance Advice Messaging for the 20 Hour Weekly Minimum for Partial Hospitalization Program Services

Summary: Implements informational messaging, effective October 1, 2017, that conveys supplemental and educational information to the provider submitting claims for PHP services where the patient did not receive the minimum 20 hours per week of therapeutic services his plan of care indicates is required, on claims with line item date of service (LIDOS) on or after October 1, 2017.

New Physician Specialty Code for Advanced Heart Failure and Transplant Cardiology, Medical Toxicology, and Hematopoietic Cell Transplantation and Cellular Therapy

Summary: Establishes new physician specialty codes for Advanced Heart Failure and Transplant Cardiology (C7), Medical Toxicology (C8), and Hematopoietic Cell Transplantation and Cellular Therapy (C9).

Payment for Moderate Sedation Services Furnished with Colorectal Cancer Screening Tests

Summary: Ensures accurate program payment for moderate sedation services furnished in conjunction with screening colonoscopy services for which the beneficiary should not be charged the coinsurance or deductible.

Office of Inspector General Report: Stem Cell Transplantation

Summary: This article was revised on May 1, 2017, to make a number of clarifications and to delete the table that had been in the article.

Update FISS Editing to Include All Three Patient Reason for Visit Code Fields

Summary: FISS edits to ensure all of the National Coverage Determination (NCD) edits within Reason Code ranges 3xxxx and 59xxx are tied to the diagnosis code fields including all three Patient Reason for Visit (PRV) fields for outpatient hospital claims on Types of Bills (TOB) 013x and 085x. CR9672 makes no policy changes.

New Common Working File (CWF) Medicare Secondary Payer (MSP) Type for Liability Medicare Set-Aside Arrangements (LMSAs) and No-Fault Medicare SetAside Arrangements (NFMSAs)

Summary: Establishes two (2) new set-aside processes: a Liability Insurance Medicare Set-Aside Arrangement (LMSA), and a No-Fault Insurance Medicare Set-Aside Arrangement (NFMSA).

Clarifying Medical Review of Hospital Claims for Part A Payment

Summary: Clarifies the medical review requirements for Part A payment of short stay hospital claims (more commonly referred to as the "Two-Midnight" Rule) for MACs, Supplemental Medical Review Contractors (SMRC), Recovery Audit Contractors and the Comprehensive Error Rate Testing (CERT) contractors.

Quarterly Healthcare Common Procedure Coding System (HCPCS) Drug/Biological Code Changes – July 2017 Update

Summary: The HCPCS code set is updated on a quarterly basis. Change Request (CR) 10107 informs MACs of updating specific drug/biological HCPCS codes.

July 2017 Integrated Outpatient Code Editor (I/OCE) Specifications Version 18.2

MLN Matters Number: MM10115

Summary: The I/OCE is being updated July 1, 2017. The I/OCE routes all institutional outpatient claims (which includes non-Outpatient Prospective Payment System (OPPS) hospital claims) through a single integrated OCE.

OTHER MEDICARE ANNOUNCEMENTS

Medicare Program; Advancing Care Coordination Through Episode Payment Models (EPMs); Cardiac Rehabilitation Incentive Payment Model; and Changes to the Comprehensive Care for Joint Replacement Model (CJR); Delay of Effective Date

Summary: This final rule finalizes May 20, 2017 as the effective date of the rule. It also finalizes a delay of the applicability date of the regulations from July 1, 2017 to January 1, 2018.

Billing for Prolonged Chemotherapy Infusions
Published on May 16, 2017
20170516
 | Billing 
 | Outpatient Services 

In life, sometimes you win and sometimes you lose. The same goes for dealings with Medicare although most of us probably think we lose more than we win in this arena. But every now and then the providers come out to the good. At the beginning of last year, CPT code 96416 was the appropriate code to bill for prolonged chemotherapy infusions using a portable or implantable infusion pump. Last year, some Medicare Administrative Contractors (MACs) instructed to use an unlisted code for this service. Now there is a new code. Why have there been so many coding changes for this service and what is included in the current code?

The definition for CPT code 96416 is “Initiation of prolonged chemotherapy infusion (more than 8 hours), requiring use of a portable or implantable pump” and it was at one time the appropriate code to bill for these prolonged infusions. In April, 2016, CMS released MLN Matters Article SE1609. The main point of this article seemed to be to emphasize that the pump used for these prolonged infusions should not be billed separately as a DME item. The article stated, “Medicare’s payment for the administration of the drug or biological billed to the MAC will also include payment for equipment used in furnishing the service. Equipment, such as an external infusion pump used to begin administration of the drug or biological that the patient takes home to complete the infusion, is not separately billable as durable medical equipment for a drug or biological paid under the section 1861(s)(2)(A) and (B) incident to benefit.”

The article went on to say that the MACs could direct use of a specific CPT or HCPCS code to be used to report the service, even a miscellaneous code “if there is no specified code that describes the drug administration service that also accounts for the cost of equipment that the patient takes home to complete the infusion that they later return to the physician or hospital.” Some MACs did instruct their providers to use the miscellaneous chemotherapy CPT code, CPT 96549. This caused great angst for providers because the Medicare OPPS unadjusted payment rate for 2016 for CPT 96549 was $30.87 as opposed to $280.27 for CPT 96416. The payment rate for the miscellaneous code failed to even cover the cost of providing the service.

Luckily for providers, this unfair payment situation was remedied with the creation of a new HCPCS code to describe the administration service and also account for the equipment cost. In the April 2017 OPPS Update, Medicare instructed the use of HCPCS code G0498 for these prolonged chemotherapy infusions “where the facility incurred a facility expense specific to the provision of the non-implantable, external infusion pump.” It is good to note that HCPCS code G0498 has the same OPPS status indicator (“S”) and payment rate ($279.45 for 2017) as CPT code 96416. And, CMS made the code retroactive to January 1, 2016.

The full description of HCPCS code G0498 is “Chemotherapy administration, intravenous infusion technique; initiation of infusion in the office/other outpatient setting using office/other outpatient setting pump/supplies, with continuation of the infusion in the community setting (e.g., home, domiciliary, rest home or assisted living).” The code includes the chemotherapy administration service (the IV infusion of the drug), any supplies used, and the cost of using the pump. Providers should not report another code for the chemotherapy infusion – it is covered by this HCPCS code. The chemotherapy drug can be billed separately in addition to the administration code, G0498.

It feels good to win!

Debbie Rubio

April Medicare Transmittals and Other Updates
Published on Apr 26, 2017
20170426
 | Recovery Auditor 
 | Billing 
 | Medicare Coverage 
 | Outpatient Services 

Transmittals

FISS Implementation of the Restructured Clinical Lab Fee Schedule

Summary: Informs MACs about the changes to the Fiscal Intermediary Shared System (FISS) to incorporate the revised CLFS containing the National fee schedule rates.

Payment for Moderate Sedation Services

Summary: Revises existing Medicare Claims Processing Manual language to bring the manual in line with current payment policy for moderate sedation and anesthesia services.

Providers should refer to the revised Medicare Claims Processing Manual, Chapter12 (Physicians/Non-physician Practitioners), Sections 50 and 140 for information regarding the reporting of moderate sedation and anesthesia services.

Quarterly Update to the National Correct Coding Initiative (NCCI) Procedure to Procedure (PTP) Edits, Version 23.2, Effective July 1, 2017

Summary: Informs about the quarterly update to the National Correct Coding Initiative (NCCI) procedure to procedure edits (PTP).

Other Medicare Announcements

Final Rule Correction – Medicare Physician Fee Schedule

  • Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2017; Medicare Advantage Bid Pricing Data Release; Medicare Advantage and Part D Medical Loss Ratio Data Release; Medicare Advantage Provider Network Requirements; Expansion of Medicare Diabetes Prevention Program Model; Medicare Shared Savings Program Requirements; Corrections
  • March 22, 2017
  • https://www.gpo.gov/fdsys/pkg/FR-2017-03-22/pdf/2017-05675.pdf

Summary: Corrects technical errors in the addenda to the final rule published in the November 15, 2016, Federal Register.

CMS Voluntary Self-Referral Disclosure Protocol and Form

Summary: New protocol and form to self-disclose actual or potential violations of the physician self-referral statute and/or noncompliant financial relationships with physician(s).

Renewal of Advance Beneficiary Notice of Non-coverage, Form CMS-R-131

Summary: The ABN form and instructions have been approved by the Office of Management and Budget (OMB) for renewal. While there are no changes to the form itself, providers should take note of the newly incorporated expiration date on the form.  With the 2016 PRA submission, a non-substantive change has been made to the ABN. In accordance with Section 504 of the Rehabilitation Act of 1973 (Section 504), the form has been revised to include language informing beneficiaries of their rights to CMS nondiscrimination practices and how to request the ABN in an alternative format if needed.

Clinical Laboratory Data Reporting: Enforcement Discretion

Summary: CMS will exercise enforcement discretion until May 30, 2017, regarding the data-reporting period for reporting applicable information under the Clinical Laboratory Fee Schedule and the application of the Secretary’s potential assessment of civil monetary penalties for failure to report applicable information. This discretion applies to entities that are subject to the data reporting requirements adopted in the Medicare Clinical Diagnostic Laboratory Tests Payment System final rule published on June 23, 2016 (81 FR 41036).

Decision Memo for Hyperbaric Oxygen (HBO) Therapy (Section C, Topical Oxygen) (CAG-00060R)

Summary: Decision memo for HBO therapy that removes the coverage exclusion of Continuous Diffusion of Oxygen Therapy (CDO) from NCD Manual 20.29, Section C. CMS has decided that no National Coverage Determination is appropriate at this time concerning the use of topical oxygen for the treatment of chronic wounds and will amend NCD 20.29 by removing Section C, Topical Application of Oxygen. Medicare coverage of topical oxygen for the treatment of chronic wounds will be determined by the local contractors.

New Mailbox for BNI Notices Questions

  • Effective April 13, 2017

Questions regarding any of the Fee For Service Beneficiary Notice Initiative (BNI) notices may be sent to the new mailbox:  BNImailbox@cms.hhs.gov. 

The BNI notices are:

  • FFS Advance Beneficiary Notice of Non-coverage (FFS ABN)
  • FFS Home Health Change of Care Notice (FFS HHCCN)
  • FFS Skilled Nursing Facility Advance Beneficiary Notice (FFS SNFABN) and SNF Denial Letters
  • FFS Hospital-Issued Notices of Non-coverage (FFS HINNs)
  • FFS Expedited Determination Notices for Home Health Agencies, Skilled Nursing Facility, Hospice and Comprehensive Outpatient Rehabilitation Facility  (FFS Expedited Determination Notices)
  • Important Message from Medicare (IM) and Detailed Notice of Discharge (DND) (Hospital Discharge Appeal Notices)
  • FFS Notice of Exclusion from Medicare Benefits - Skilled Nursing Facility (FFS NEMB SNF) 

There is an exception for the Medicare Outpatient Observation Notice (MOON). Continue to send questions regarding the MOON to MOONMailbox@cms.hhs.gov.

Fiscal Year (FY) 2018 Medicare Hospital Inpatient Prospective Payment System (IPPS) and Long Term Acute Care Hospital (LTCH) Prospective Payment System Proposed Rule

Summary: Updates 2018 Medicare payment and polices when patients are admitted into hospitals. The rule updates payment rates, quality initiatives, and code sets. In addition to the payment and policy proposals, CMS is soliciting ideas for regulatory, sub-regulatory, policy, practice and procedural changes to improve the health care delivery system, make it less bureaucratic and complex, and reduce burden for clinicians, providers and patients in a way that increases quality of care and decreases costs.

Reporting Correct Drug Units
Published on Apr 18, 2017
20170418
 | Billing 
 | Documentation 
 | Outpatient Services 

What was your strong subject in school – reading, writing, or math? To bill drugs correctly to Medicare, you need a little of all three.

Based on the physician’s order, 500 mg of Infliximab is administered to a patient. To bill for the Infliximab, a provider would report HCPCS code J1745 which has a description of “Injection, Infliximab, excludes biosimilar, 10 mg.” These means 50 units of J1745 would be reported on the claim to reflect the 500 mg given to the patient (500 mg dose divided by 10 mg description equals 50 units). If a patient requires a dose of 800 mg, then 80 units of J1745 would be billed for the amount of the drug administered and the provider may bill 20 additional units with a JW modifier if a 200 mg portion of a 250 mg single-use vial had to be wasted. The point here is that the units billed do not equal the dose amount; the units billed are based on the dose given and/or wasted and the HCPCS description of the drug. Units of service are reported in multiples of the units shown in the HCPCS narrative description. Furthermore, the physician’s order, the medication administration record, and applicable nursing or pharmacy notes must appropriately document the dosage ordered, the amount of drug administered, and any drug wastage.

Sounds straight-forward but evidently a lot of providers have problems getting this correct. The Medicare Supplemental Medical Review Contractor (SMRC) has issued notice of a new project to conduct post payment review of claims to identify incorrect units of service for outpatient drugs. According to the SMRC announcement, “Correct payments depend on providers’ accurate reporting of the HCPCS codes and units of service for each line item billed.”

The SMRC review project is at least partially in response to a July 2015 Office of Inspector General (OIG) report that identified $35.8 million in overpayments for selected outpatient drugs from July 2009 through June 2012. Eighty-eight percent of the overpayments identified in this OIG report were due to billing “either incorrect units of service or a combination of incorrect units of service and incorrect HCPCS codes.”

Medicare has established prepayment Medically Unlikely Edits (MUEs) to reduce payment errors. MUEs establish a limit for the units billed for a drug HCPCS code based on the maximum number of units a provider would reasonably administer to a patient for that code on that date of service. The OIG identified outpatient drugs that (1) had units of service that exceeded the MUE values or (2) did not have established MUE values but had units of service that exceeded the number of units a provider would reasonably administer to a beneficiary on a single date of service.

In addition to the SMRC review of outpatient drug units, the new Recovery Auditors for Regions 1, 2, and 3 have posted approved issues that address drug units. Those issues include:

  • Automated review of drugs and biologicals whose units exceed the only FDA approved dose,
  • Complex review of the drug Trastuzumab (Herceptin), J9355 - multi-dose vial wastage, dose vs. units billed. Documentation will be reviewed to determine if the billed amount of Trastuzumab (Herceptin) meets Medicare coverage criteria and applicable coding guidelines.
  • Automated review of the drug Regadenoson (Lexiscan), J2785, billed with units greater than four (4).
  • Automated review of the drug Zoledronic Acid billed with units greater than or equal to five (5) to identify excess units of J3489 as either excess units within a single line and/or as excess units across multiple lines/claims for the same beneficiary, the same HCPCS code and the same revenue center date.

A number of Medicare Administrative Contractors (MACs) are conducting medical reviews of drugs. These are generally complex reviews and drug units are only one of the issues considered. Search our knowlegde base for "drug review results" for more on this.

When billing for drugs, providers need to ensure they know the HCPCS code description, divide correctly, have the correct conversion factors in their charge description master (CDM), and have appropriate documentation in their records. A little reading, a little math and a little writing…

Debbie Rubio

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