Knowledge Base Category -

Did you ever play the game as a child where you were blindfolded, turned around until you were disoriented, and then relied on a sibling or a friend to guide you? This required some trust even though it was just a game. And the more guidance the better – handholding was better than simply being told where to go. We are not quite as trusting as adults, but often our only choice is to rely on the guidance of others. Hospitals have to rely on Medicare guidance for direction in providing and billing for Medicare services. And like that childhood game, more guidance and clearer guidance is always better. So, thanks to CMS for the additional guidance on the use of the PO modifier.

Last week’s edition of the Wednesday@One included an article about recent developments related to Provider-Based Departments (PBDs), one of which was the requirement to report a PO modifier on outpatient services provided in an off-campus provider based department. In the January 26, 2016, Hospital Open Door Forum (ODF), CMS discussed this requirement and referred providers to a recent Modifier PO FAQ document that provides additional guidance on the use of this modifier.

Before getting into the details of the Frequently Asked Questions, here is an excerpt from last week’s article.

This requirement was finalized in the 2015 OPPS Final Rule which allowed voluntary reporting of the PO modifier for 2015 but mandates use of the modifier beginning in 2016. The use of the PO modifier will allow CMS to track the volumes and types of services being provided in off-campus provider based departments. Things to know about reporting the PO modifier include:

• Off-campus means provider based departments located 250 yards or greater from the main provider building.
• Per discussion at a CMS Hospital Open Door Forum, the modifier is only required to be reported for items and services paid under OPPS. Services paid under another fee schedule, such as rehabilitative therapy services, do not require the PO modifier.
• The modifier should not be reported for remote locations of a hospital, satellite facilities of a hospital, or for services furnished in an emergency department.
• Remote location is another main provider furnishing inpatient services under the name, ownership, and administrative and financial control of the main hospital.
• A satellite facility is a part of a hospital that provides inpatient services in a building also used by another hospital, or in a building(s) located on the same campus as buildings used by another hospital.

A lot of the ODF discussion and the FAQs address when the PO modifier is required and when it is not. The CMS representative speaking on the ODF suggested hospitals ask themselves three questions in deciding whether to use the PO modifier:

1. Are the services provided at a provider-based department?
2. Is the provider-based department located off-campus?
3. Are the services “paid” under the Outpatient Prospective Payment System (OPPS)?

If the answer to all three of these questions is yes, then you must use the PO modifier.

The FAQs address a number of scenarios where the PO modifier is not required. For example, the PO modifier is not required for:

• Critical Access Hospitals (CAHs) because CAHs are not paid through the OPPS
• Off-campus rehabilitative therapy services because therapy services have an OPPS status indicator of “A” which means they are paid under another fee schedule (the Physician’s Fee Schedule) and not under OPPS
• Facilities that do not meet the definition of provider-based
• Off-campus dialysis facilities because these are billed and paid under the ESRD PPS and not under OPPS
• Services provided at a remote hospital location of the main hospital or on the campus of a remote location
• Services provided in either Type A or Type B Emergency Departments
• Laboratory services that are paid under the Clinical Laboratory Fee Schedule – This one is tricky because labs provided on the same day of service with other outpatient services are packaged and therefore are “paid” under OPPS – these would require the PO modifier. If only laboratory services are performed - for example, if a hospital has an off-campus PBD laboratory where patients go for only laboratory services (and no other related outpatient services are provided the same day), then these services are paid under the CLFS and would not require a PO modifier.
• Services provided through Medicare Advantage plans

The FAQs also clarify that it is acceptable to have a claim where some HCPCS codes have the PO modifier and some don’t. Separately payable outpatient drugs reported with HCPCS codes (status indicator “K”) do require the PO modifier when provided in an off-campus PBD.

We have no choice but to trust and rely on the guidance from CMS, but it is always good to have more guidance than lesser guidance in trying to interpret and implement Medicare rules.

The words “term paper” can strike fear in the hearts of students everywhere. Research, note cards, bibliography, and the dreaded draft copy a student presents to his or her teacher for corrections prior to the final composition. That draft copy is often returned marked ubiquitously with red ink. This gives the writer one last chance at correction before a grade is assigned and the wise student utilizes this instruction to improve their paper and the resulting score. CMS likes to give providers a chance to improve their performance also. One of the tools CMS uses to guide providers in preventing billing errors is the Medicare Quarterly Provider Compliance Newsletter.

CMS publishes the Quarterly Compliance Newsletter “to provide education on how to avoid common billing errors and other erroneous activities when dealing with the Medicare Fee-For-Service (FFS) Program. It includes guidance to help health care professionals address and avoid the top issues of the particular Quarter.” The newsletter addresses findings from Medicare review contractors and affiliates, such as the Medicare Administrative Contractors (MACs), CERT, Recovery Auditors, and the OIG. The latest edition of this newsletter, the January 2016 Edition, includes several issues that may be of concern to hospitals.

Admission Source for Inpatient Psychiatric Hospitals

This issue is a concern for acute-care hospitals and critical access hospitals (CAHs) that have an inpatient psychiatric distinct part unit. The inpatient psychiatric hospital (IPF) payment generally includes an adjustment for maintaining a qualifying emergency department (ED). Medicare does not make this adjustment however when patients are transferred from the acute-care section of a hospital to an IPF distinct part unit within the same hospital. This is because the costs associated with ED services are already reflected in the Medicare payment to the hospital for the immediately preceding acute care stay.

To prevent this inappropriate additional payment, the transfer to an IPF-distinct part unit from the acute-care section of the hospital should be coded with an admission source of “D” - Transfer from One Distinct Unit of the Hospital to another Distinct Unit of the Same Hospital Resulting in a Separate Claim to the Payer. Failure to use the correct Source of Admission code in these circumstances will result in an overpayment as has been found by Recovery Auditor’s automated reviews.

For more information, see the Medicare Claims Processing Manual, Chapter 3, Section 190.6.4.

Duplicate Claims

Another automated review by Recovery Auditors has identified problems with payments for duplicate services submitted on separate claims. Claims for services should only be submitted one time. Providers should use the claim status inquiry process to determine the status of their claims instead of resubmitting the claim.

If the services are not duplicate services, the provider should use an appropriate modifier to indicate such. The use of modifiers is discussed in the Medicare Claims Processing Manual, Chapter 4, Section 20.6.

Medical Necessity of Rituximab

A number of MACs have a Local Coverage Determination (LCD) or Article for Rituximab that lists appropriate ICD-10 diagnosis codes to support the medical necessity of the drug. Claims for Rituximab must include one of the required ICD-10 diagnosis codes to support payment. Most claims submitted without an acceptable diagnosis code will be denied as “not medically necessary” by claims processing edits. However, an automated review by the Recovery Auditors has identified paid claims where providers are billing for a service of J9310 - Rituximab with an ICD-10 code that is not included in the list of covered ICD-10 codes in applicable Local Coverage Determination documents. Here is a listing of the LCDs and Articles that contain diagnosis code requirements for Rituximab.

‍Outpatient Cardiovascular Nuclear Medicine Procedure Codes

Medical necessity issues were also identified by Recovery Auditor automated reviews related to cardiovascular nuclear medicine tests. This was the result of the same issue as for Rituximab – an ICD-10 diagnosis code approved for coverage as indicated by Local Coverage Determinations was not included on the claim. This includes a large range of services:

• Myocardial perfusion imaging – CPT codes 78451-78454
• Myocardial imaging – CPT codes 78466 and 78468-78469
• Cardiac blood pool imaging – CPT codes 78472, 78473, 78481, 78483, 78494, and 78496
• Cardiovascular stress test – CPT codes 93015-93018

Check your MAC’s LCDs and Articles to see if there are coverage requirements for these tests for your jurisdiction.

Providers need to read and take actions if needed based on the guidance in the Medicare Quarterly Compliance Newsletter. If you don’t learn from this guidance, your claims may end up covered in red marks.

After struggling with application of Medicare’s incomplete listing of drug testing codes for 2015, I was so hopeful that Medicare would accept the drug testing CPT codes for 2016. For 2015, the American Medical Association (AMA) majorly revised the CPT drug testing codes, reorganizing the drug testing codes as presumptive, definitive, or therapeutic.

• Presumptive testing is for the possible use or non-use of a drug. Presumptive methods of testing are mainly immunoassays, enzymatic methods, and thin-layer chromatography (TLC). The CPT codes for presumptive testing, 80300-80304, are defined based on testing method and whether the drugs being tested are in Drug Class List A or Drug Class List B (also defined in the CPT manual).
• Definitive testing uses more complex testing methods, such as gas or liquid chromatography (GC/LC) with mass spectrometry (MS) and identifies individual drugs.
• Therapeutic drug assays are performed to monitor clinical response to a known, prescribed medication.

A helpful tool in the CPT code manual is the “Definitive Drug Classes Listing” that describes some of the particular drugs and metabolites included in each drug class for definitive testing. The most significant statement in the CPT instructions relative to definitive testing is, “Each category of a drug class, including metabolite(s) if performed (except stereoisomers), is reported once per date of service.” I admit some of the technical speak in the CPT instructions is even over my head (what is a stereoisomer??) but bottom line, this sentence means that CPT codes 80320 – 80377 are to be reported once a day per drug class. MMP even confirmed this with the American Hospital Association Coding Clinic. So if you test for oxycodone and oxymorphone, you only report CPT code 80365 with one unit.

Back to my wishful thinking - you don’t always get what you want. For 2016, Medicare is not accepting the CPT codes for drug testing. CMS has deleted all of the drug testing HCPCS codes from last year (G0431, G0434, and G6030 – G6058) and created new HCPCS codes for 2016. The bad news is that there is still not a one-to-one correlation between CPT and HCPCS codes for drug testing; the good news is that this year’s HCPCS codes appear a little easier to use and understand.

There are three new presumptive testing HCPCS codes based on testing methods. Only one of the three presumptive G codes may be billed per day.

• G0477 Drug tests(s), presumptive, any number of drug classes; any number of devices or procedures, (eg, immunoassay) capable of being read by direct optical observation only (eg, dipsticks, cups, cards, cartridges), includes sample validation when performed, per date of service.
• G0478 Drug tests(s), presumptive, any number of drug classes; any number of devices or procedures, (eg, immunoassay) read by instrument-assisted direct optical observation (eg, dipsticks, cups, cards, cartridges), includes sample validation when performed, per date of service.
• G0479 Drug tests(s), presumptive, any number of drug classes; any number of devices or procedures by instrumented chemistry analyzers (eg, immunoassay, enzyme assay, TOF, MALDI, LDTD, DESI, DART, GHPC, GC mass spectrometry), includes sample validation when performed, per date of service.

The most likely correlation for presumptive testing is that HCPCS codes G0477 and G0478 correlate with CPT codes 80300; HCPCS code G0479 correlates with CPT codes 80301, 80302, 80303, and 80304.

The new definitive HCPCS codes correlate with all of the CPT codes 80320 through 80377, depending on the number of definitive drug classes tested. The instructions in the 2016 Clinical Lab Fee Schedule Final Determinations state:

• Only one of the four definitive G codes may be billed per day.
• The unit used to determine the appropriate definitive G code to bill is “drug class.”
• Each drug class may only be used once per day in determining the appropriate definitive G code to bill.
• Drug classes are consistent with their usage in the AMA CPT Manual. The AMA CPT Manual may be consulted for examples of individual drugs within each class.

This means you can count the number of definitive CPT drug test codes to determine which of the HCPCS codes to bill. The new Medicare definitive codes are defined as: “Drug test(s), definitive, utilizing drug identification methods able to identify individual drugs and distinguish between structural isomers (but not necessarily stereoisomers), including, but not limited to GC/MS (any type, single or tandem) and LC/MS (any type, single or tandem and excluding immunoassays (eg, IA, EIA, ELISA, EMIT, FPIA) and enzymatic methods (eg, alcohol dehydrogenase)); qualitative or quantitative, all sources, includes specimen validity testing, per day,…”

• G0480 - 1-7 drug class(es), including metabolite(s) if performed.
• G0481 - 8-14 drug class(es), including metabolite(s) if performed.
• G0482 - 15-21 drug class(es), including metabolite(s) if performed.
• G0483 - 22 or more drug class(es), including metabolite(s) if performed.

Even though Medicare has their own codes for definitive drug testing, as you can see, they rely heavily on CPT definitions. Very important verbiage for both CPT codes 80320-80377 and HCPCS codes G0480-G0483 is that these codes are not to be used for drug testing by immunoassay and enzymatic methods. One last thing to note – all the HCPCS drug testing codes include testing for specimen validation, such as pH, creatinine, etc. Testing to ensure the integrity of the specimen should not be billed separately.

For 2016, we may not have gotten what we wanted when it comes to drug testing codes, but we have to live with what we got. So get busy and update your charge description master.

Almost everyone reading this newsletter works in the field of healthcare. But even those of us in healthcare often take for granted the amazing advancements in medicine over the last few centuries. Last fall I visited Yorktown, one of the major cities involved in America’s fight for independence (for fellow history buffs, I highly recommend visiting there). Do you realize that during the Revolutionary War almost three times the number of Americans died from disease as were killed in war? Historians believe around 17,000 deaths occurred from disease compared to 6,800 casualties from battle. Modern medicine involves a variety of things that are put into or onto bodies to heal or improve health. Part 2 of our discussion of the January 2016 OPPS Update looks at Medicare’s latest rules for devices, drugs, biologicals, and blood products.

Devices

The key to understanding the rules for Medicare payment for devices is to know that payment for most devices is bundled into the payment for the associated procedure. Medicare does pay for the device – the payment is just part of the procedure payment. In order to be able to adjust payments when a device is separately reimbursed (pass-through payments) or when the hospital incurs no cost or reduced cost for the device (device credits), Medicare calculates the percentage of each APC that is attributable to the cost of the device. This is known as the device-offset amount.

Certain categories of devices are eligible for transitional pass-through payments for 2-3 years. Effective January 1, 2016, HCPCS code C1822, Generator, neurostimulator (implantable), high frequency, with rechargeable battery and charging system, is being added as a pass-through device. There are a number of considerations related to this new pass-through device.

• Pass-through devices, including C1822, are assigned a status indicator of “H.” This means that the device is reimbursed based on cost. Medicare calculates the payment amount by applying your hospital’s cost-to-charge ratio to the device charge on the claim.
• HCPCS C1822 should always be reported with CPT code 63685 (Insertion or replacement of spinal neurostimulator pulse generator or receiver, direct or inductive coupling) which is assigned to APC 5464.
• Medicare will deduct the device-offset amount for this APC from the pass-through payment amount for the device when HCPCS C1822 is reported.
• The description of HCPCS code C1820 was changed to differentiate it from the C1822. C1820 is Generator, neurostimulator (implantable), non-high frequency, with rechargeable battery and charging system. C1820 is non-high frequency whereas C1822 is high-frequency.

The 2016 APC off-set file can be found at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/passthrough_payment.html .

Another important aspect of understanding device payments is to know that device-intensive APCs are those APCs with a device-offset amount greater than 40%. Over 40% of the APC payment is “payment” for the device. Beginning in 2016, Medicare will make an additional payment adjustment for device-intensive APCs when the procedure is discontinued prior to the administration of anesthesia (reported with modifier -73). Modifier 73 is appended to surgical procedures for which anesthesia is planned, but the procedure is terminated after the patient is prepared and taken to the room where the procedure is to be performed, but prior to the administration of anesthesia. Modifier 73 reduces the procedure payment by 50%. Effective January 1, 2016, the device off-set amount will be deducted from the APC payment and then the 50% reduction will be applied.

Also for 2016, all procedures assigned to a device-intensive APC will require a device code to be present on the claim. Table 42 in the 2016 OPPS Final Rule lists the device-intensive APCs.

Corneal Tissue

In 2016, Medicare will only pay separately for the procurement or acquisition of corneal tissue when it is used in a corneal transplant procedure. Hospitals should only report HCPCS code V2785 (Processing, preserving and transporting corneal tissue) when corneal tissue is used in a corneal transplant procedure described by one of the following CPT codes:

• 65710 (Keratoplasty (corneal transplant); anterior lamellar);
• 65730 (Keratoplasty (corneal transplant); penetrating (except in aphakia or pseudophakia));
• 65750 (Keratoplasty (corneal transplant); penetrating (in aphakia));
• 65755 (Keratoplasty (corneal transplant); penetrating (in pseudophakia));
• 65756 (Keratoplasty (corneal transplant); endothelial);
• 65765 (Keratophakia);
• 65767 (Epikeratoplasty); and
• Any successor code or new code describing a new type of corneal transplant procedure that uses eye banked corneal tissue.

Blood Products

There are three new blood product codes for 2016 for pathogen-reduced blood products – that is blood products treated to eliminate certain pathogens and reduce the risk of transfusion-associated infections, such as those treated with Amotosalen and UVA light. The new codes are:

‍Drugs

Like devices, payments for drugs have special rules under OPPS. Payment for drugs below a threshold per-day cost ($100 for 2016) is packaged; drugs exceeding this threshold are separately reimbursed at average sales price (ASP) + 6%, which provides payment for both the acquisition cost and pharmacy overhead costs associated with the drug, biological or therapeutic radiopharmaceutical. Pass-through drugs, biologicals and radiopharmaceuticals are also paid at ASP+6%.  The January 2016 OPPS Update article lists a number of new and revised drug HCPCS codes plus other information concerning drug payments.

• See the article for the complete lists – Table 7 for new drug codes, Table 8 for changed codes or revised descriptions, and Table 9 for Corrected Effective Dates for Certain Vaccine Codes.
• For the new codes, remember that Status Indicator
• G is a pass-through drug,
• K is a separately paid non-pass-through drug/biological,
• E is not paid by Medicare for outpatients, and
• N is a packaged drug.
• For changed codes and descriptions, pay close attention to the units in the old and new descriptors, for example
• 2015 - C9443, Injection, dalbavancin, 10 mg; 2016 - J0875, Injection, dalbavancin, 5 mg
• 2015 - J1446, Injection, tbo-filgrastim, 5 micrograms; 2016 - J1447, Injection, tbo-filgrastim, 1 microgram
• 2015 - J7506, Prednisone, oral, per 5mg; 2016 - J7512, Prednisone, immediate release or delayed release, oral, 1 mg
• Biosimilars are paid the ASP of the biosimilar(s) described by the HCPCS code + 6% of the ASP of the reference product. Only the first eligible biosimilar biological product to a reference product will be eligible for pass-through status; subsequent biosimilars to a reference product will not meet the newness criterion.
• New FDA approved drugs, biologicals, and therapeutic radiopharmaceuticals without an assigned HCPCS code should be billed with HCPCS code C9399. New diagnostic radiopharmaceuticals and contrast materials are not to be reported with C9399. Until they are granted pass-through status and a new C code is assigned, report new diagnostic radiopharms with the appropriate HCPCS code:
• A4641 (Radiopharmaceutical, diagnostic, not otherwise classified),
• A9599 (Radiopharmaceutical, diagnostic, for beta-amyloid positron emission tomography (PET) imaging, per study dose), or
• J3490 (Unclassified drugs) (applicable to all new diagnostic radiopharmaceuticals used in non-beta-amyloid PET imaging)
• Report new contrast materials with HCPCS code:
• A9698 (Non-radioactive contrast imaging material, not otherwise classified, per study) or
• A9700 (Supply of injectable contrast material for use in echocardiography, per study

Skin substitute products that do not qualify for pass-through status are also packaged. Payment is packaged into the payment for the associated skin substitute application procedure. The skin substitute products are divided into two groups for packaging purposes:

1. High cost skin substitute products - application reported with CPT codes 15271-15278
2. Low cost skin substitute products - application reported with HCPCS code C5271-C5278

See the MLN Matters article for a list of the skin substitute products’ designations as high or low. All pass-through skin substitute products are to be reported in combination with one of the skin application procedures described by CPT code 15271-15278.

As you can tell from the above discussion, even though there are new advancements in technology, devices, and drugs, in the long run, Medicare may bundle the payment.

Do you know the difference in a law and a regulation pertaining to Medicare? Where do rules and sub-regulatory guidance fit in? This is valuable knowledge when dealing with Medicare and trying to figure out how to stay compliant with all the various requirements.

• A law is legislation that is enacted by Congress and signed into law by the President (or overridden by Congressional vote if vetoed by the President).
• Once a law is on the books, the appropriate Federal agency, in this case the Centers for Medicare and Medicaid Services (CMS), creates regulations to implement the provisions of the law. Regulations are generally published for industry and public comment as a “proposed rule” in the Federal Register, followed by a Final Rule, also published in the Federal Register, with response and possible revisions due to the comments received. Regulations in the Final Rule amend the Code of Federal Regulations (CFR).
• After regulations are final, CMS publishes sub-regulatory guidance in transmittals to provide direction, advice and instructions on implementing the regulations. Some transmittals update the Medicare manuals.

To be fully compliant, hospitals should follow Medicare laws, rules, regulations, and guidance. The further down the line you go, the more details there are. But sometimes, it can be like trying to clean eyeglasses with an oily cloth – the more you try to clarify, the cloudier it gets.

These various methods of establishing Medicare requirements often result in multiple publications discussing the same issue. That can be a good thing though, because people learn best through repetition. MLN Matters Article MM9486 (CR 9486) implements changes to and billing instructions for various policies implemented in the January 2016 OPPS update. There is so much information in this MLN article that I will only review some of the issues this week. I will review the rest of the issues in future articles. This week, let’s look at modifiers, observation, lab packaging, lung cancer screening and some items related to radiation therapy.

Modifiers

Modifier CA is not new, but the APC payment method associated with use of this modifier has changed. Modifier CA is used to report an inpatient-only procedure furnished to an outpatient who expires before the patient can be admitted as an inpatient or transferred. For 2016, this will be paid as a comprehensive APC. Medicare will make a single payment for all services reported on the claim, including the “inpatient-only” procedure through APC 5881.

Modifier CT is new for 2016 – it is to be reported on CT services furnished on equipment that does not meet the National Electrical Manufacturers Association (NEMA) Standard XR-29-2013. This applies to CPT codes 70450-70498; 71250-71275; 72125-72133; 72191-72194; 73200-73206; 73700-73706; 74150-74178; 74261-74263; and 75571-75574 and will result in a 5% reduction in payment for 2016. The reduction also applies when multiple CT scans are provided on the same day and paid under a composite payment if the equipment does not meet NEMA standards.

Observation

Payment for observation services is also transitioning from a composite payment to a comprehensive payment which means one bundled payment for all visits, observation services, and all other OPPS payable services and items reported on the claim (excluding all preventive services and certain Medicare Part B inpatient services). Services that were separately paid under the observation composite payment, such as injections, infusions, CTs, and MRIs, will no longer receive separate payment in 2016 when a comprehensive observation payment is made. Any clinic visit, Type A Emergency Department (ED) visit, Type B ED visit, critical care visit, or direct referral for observation services furnished in a non-surgical encounter by a hospital in conjunction with observation services of eight or more hours, will qualify for comprehensive payment through C-APC 8011. Obs is now assigned to Status Indicator J2.

Lab Packaging

The Status Indicator for packaged lab services is being changed from “N” (always packaged) to new SI “Q4” (“J1,” “J2,” “S,” “T,” “V,” “Q1,” “Q2,” or “Q3” packaged). This allows separate payment for lab services on outpatient claims (13x type of bill) that contain only laboratory services without having to use the L1 modifier. The L1 modifier is now only required to report unrelated lab services provided with other outpatient services when ordered by a different practitioner for a different diagnosis.

Lung Cancer Screening

In the Final Rule, CMS announced two newly created HCPCS codes to report lung cancer screening counseling visit (G0296) and annual screening by low-dose CT (G0297). These screening benefits were effective February 5, 2015 through an NCD, but Medicare will not be accepting claims until January 4, 2016. To be eligible for the LDCT lung cancer screening benefit, patients must:

• Be 55-77 years of age
• Be asymptomatic (no signs or symptoms of lung cancer)
• Have a tobacco smoking history of at least 30 pack-years (one pack-year = smoking one pack per day for one year; 1 pack = 20 cigarettes)
• Be a current smoker or one who has quit smoking within the last 15 years; and
• Receive a written order for lung cancer screening with LDCT that meets the requirements described in the NCD. Written orders for lung cancer LDCT screenings must be appropriately documented in the beneficiary’s medical records.

See MLN Matters Article MM9246 for more information.

IMRT Planning Services

Payment for IMRT planning services billed with CPT code 77301 includes payment for the services described by several other CPT codes, whether these services are performed on the same or different dates of service. CPT codes 77014, 77280-77295, 77305-77321, 77331, 77336, and 77370 may only be billed separately in addition to CPT 77301 if they are being performed in support of a separate and distinct non-IMRT radiation therapy for a different tumor.

Sterotactic Radiosurgery

Effective for dates of service on and after January 1, 2016 through December 31, 2017, certain planning and preparation services are not bundled into cranial single session Stereotactic Radiosurgery (SRS) procedures (CPT code 77371 or 77372) and may be reported and paid separately in addition to the SRS procedure. These procedures include:

• 70551 - Mri brain stem w/o dye
• 70552 - Mri brain stem w/dye
• 70553 - Mri brain stem w/o & w/dye
• 77011 - Ct scan for localization
• 77014 - Ct scan for therapy guide
• 77280 - Set radiation therapy field
• 77285 - Set radiation therapy field
• 77290 - Set radiation therapy field
• 77295 - 3-d radiotherapy plan
• 77336 - Radiation physics consult

Hospitals must report modifier “CP” for any other services, aside from the 10 codes above, that are adjunctive or related to SRS treatment but billed on a different date of service and within 30 days prior or 30 days after the date of service for either CPT codes 77371 or 77372.

Be sure to add this sub-regulatory guidance to your stockpile of Medicare knowledge and develop processes to be compliant with these regulations.

Composite is defined as something made up of several parts or elements and comprehensive is including all or nearly all elements of something. These definitions are spot on regarding the reclassification of payment for observation services from a composite payment to a comprehensive payment as announced in the 2016 Outpatient Prospective Payment System (OPPS) Final Rule. This is one of the most significant changes found in this year’s final rule. In this article we discuss the reality of the changes with observation payments and other updates from the Final Rule.

Observation Comprehensive Payment

Under the current composite payment method for observation services, the observation payment is combined with the payment for high level ED visits, clinic visits, or direct referral when the observation services meet certain criteria. Other separately billable services are paid according to OPPS guidelines. This means payment for some services is packaged - most clinical laboratory services (since 2014), routine x-rays and some other minor diagnostic services (since 2015), and some minor procedures such as breathing treatments (since 2015). More extensive services, such as injections and infusions, CTs and MRIs, and separately payable drugs are paid separately from the composite payment.

Things change under the Comprehensive Observation APC. In keeping with the Medicare criteria for comprehensive APCs, payment for all adjunctive services is bundled into the comprehensive payment. This means no separate payment for injections, infusions, CTs, or MRIs, – just the one comprehensive observation payment amount of approximately $2174 (Medicare unadjusted payment rate) for the entire episode of care. There were also some changes to the criteria for eligible observation services. The comprehensive observation APC is paid when there is:

• At least eight hours of observation services (no change)
• Observations services in conjunction with any ED visit level (change from only high level ED visits), clinic visit level, or direct referral to observation
• No surgical procedure on the claim with a status indicator of “J1” or “T” (change from “T” status procedure on the day of or day before obs)

When these criteria are not met, observation services are packaged and there is no separate or additional payment for observation.

Since the Comprehensive Observation is for a combination of services which differs from the criteria for other comprehensive services which are based on a primary service, CMS created a new status indicator for Observation of “J2.” Nine other “J1” Primary Service Comprehensive APCs were also added in the final rule for device-intensive procedures.

Lung Cancer Screening by Low-Dose CT

Medicare issued a National Coverage Determination (NCD) for lung cancer screening by low-dose CT on February 5, 2015. Providers have been anxiously awaiting Medicare guidance on how to bill for this service, specifically what CPT or HCPCS code to report. In the OPPS Final Rule, CMS created new HCPCS code G0297 to report this service on and after January 1, 2016. At that time, they will accept claims for dates of service on and after February 5, 2015, so if you have already been providing this service and holding your claims you can submit them after the first of the year and receive payment. The Medicare unadjusted payment rate for G0297 is $112.49. Timely filing rules do apply so be sure to submit claims before a year has passed since the date of service.

Clinical Laboratory Services

There is good news related to lab services and then there is some really bad news. Let’s get the bad news out of the way first. CMS finalized a reduction of 2.0 percentage points to the CY 2016 conversion factor. This reduction was due to an error CMS made in calculating the impact of lab packaging in 2014. In combination with other financial adjustments for the year, the bottom line is a -0.3% reduction in OPPS payments overall for 2016.

Clinical lab services continue to be packaged in 2016 with the exceptions of molecular pathology codes and preventive services. In fact they will now be packaged per claim instead of per date of service, but I doubt this will be a significant impact. The good news is that CMS created new status indicator “Q4” for lab services so that lab payments will automatically receive separate payment if they are the only type of service reported on the claim. This means laboratories will no longer have to report the L1 modifier when only lab services are performed. The L1 modifier can still be used when lab services are unrelated to other outpatient services on the claim (ordered by a different physician for a different diagnosis), but not having to use it for lab-only outpatient claims should result in a lot less time and effort expended by hospital staff.

Increased Packaging

Since so many minor services have already been packaged in previous years, there was only a minimal increase in packaging of services for 2016. This year CMS is packaging three more APCs:

• Level 4 Minor Procedures will be S, T, V packaged with a status indicator of “Q1”
• Level 3 and Level 4 Pathology will be T packaged with a status indicator of “Q2”

Other Issues

Other issues addressed in the OPPS final rule include:

• Numerous additional requirements for hospitals to bill and receive payment for Chronic Care Management (CCM) services, CPT code 99490.
• Removal of seven procedures from the inpatient only list (vagus nerve blocking therapy, spine surgery procedures and penile implants). Carotid artery stenting remains on the inpatient only list.
• Payment reduction for CT scans (5% in 2016; 15% in 2017) if CT scanner does not meet the NEMA Standard XR-29-2013. Providers are to report new modifier “CT” if the CT scanner does not meet the standards in order to receive the appropriately reduced payment.

The reality of OPPS payment policies is increased packaging in the form of more comprehensive APCs, including an observation C-APC and increased packaging of services. CY 2016 also includes an overall reduction in payment due to adjustments for this and that, including a big adjustment for miscalculation of lab packaging payments. Sometimes the reality is just too real.

A standard circus act throughout time has been jumping through hoops – little dogs with bows and skirts jump through hoops; growling lions and tigers jump through hoops; even people jump through flaming hoops. There is a new “act” in town and it too requires jumping through hoops.

The NOTICE Act

On August 6, 2015, President Obama signed into law the NOTICE Act (Notice of Observation Treatment and Implication for Care Eligibility Act). The NOTICE Act requires hospitals to:

• Provide written and oral notification to patients when they have received observation services for more than 24 hours.
• Notification must be done within 36 hours from the beginning of observation services or at the time of discharge, whichever is first.
• The notice must explain the patient’s status (outpatient with observation services) and the reasons for the outpatient with obs status as opposed to being admitted as an inpatient.
• The notice must also explain the implications of that status for cost-sharing requirements and for subsequent eligibility for coverage of services furnished by a skilled nursing facility.
• The notice must be “written and formatted using plain language and made available in appropriate languages.”
• The patient or their representative must acknowledge receipt of the notice with their signature, or the annotation and signature of the presenter if the patient refuses to sign.
• Hospitals have one year – until August 2016 – to implement this requirement.

CMS may provide additional guidance on the format and requirements for the notice prior to the implementation date. For example, what constitutes “appropriate languages?”

What This Means for Hospitals and Patients

If hospitals are applying the two-midnight inpatient admission rule correctly, the volume of patients receiving observation services for more than 24 hours without subsequently being converted to inpatient status should be low. Remember if a patient requires medically necessary services beyond a second midnight, Medicare regulations state that the patient should be admitted as an inpatient. Patients who no longer require medically necessary services but remain in the hospital for convenience reasons do not meet the criteria for observation services, so observation hours should no longer be charged. Here is one shortcoming of the new law – it does not address patients in an extended outpatient “without observation” status. An Advance Beneficiary Notice (ABN) can be given to these patients who no longer require medically necessary treatment in the hospital setting but remain in an extended outpatient status if the hospital continues to charge for hourly services.

Several states including Connecticut, Maryland, New York, Pennsylvania and Virginia, already require hospitals to give patients notices about observation care and some hospitals in other states are voluntarily providing notices to patients concerning their status. Hospitals have a whole year to develop a process for implementing this requirement – whether it is to modify their current notification process or come up with a new process.

One purpose of the notice is to explain “cost-sharing” – that is the patient’s financial responsibility of outpatient status with observation versus inpatient status. It would be rare that the patient’s deductible and co-pay for observation care would exceed the inpatient deductible of $1,260. The outpatient deductible is only $147 per year for all Part B services and hospital outpatient co-pay is around 20% of the observation payment (proposed to be " $2,100 for 2016) and other separately payable services. If the 2016 OPPS proposal for a comprehensive observation payment goes forward, all adjunctive services provided during the outpatient with observation stay are bundled into the observation payment. Patients in an outpatient hospital stay are also responsible for self-administered drugs but again it is unlikely that the combined outpatient cost-sharing will exceed the inpatient deductible amount. The one exception is for patients who do not have Part B coverage – these patients would be responsible for the cost for the total outpatient care. As opposed to the Important Message from Medicare for inpatient admissions, under this Observation Notice patients do not have any appeal rights – their only options if they are concerned about their costs are to try to sway their physician to admit them or leave the hospital.

It is also unlikely that a patient receiving only outpatient with observation services for greater than 24 hours would be a candidate for a skilled nursing facility (SNF) admission – another notification requirement of the act. Medicare beneficiaries must have a qualifying three-day inpatient stay to qualify for Medicare benefits for a SNF admission. In the days prior to the two-midnight rule, it was not unusual to have patients with extended observation stays of 3 days or longer that were not eligible for Medicare coverage of a SNF admission. The more likely scenario now, post-two-midnight rule, is that patients receiving observation services will be converted to an inpatient status for hospital care prior to being transferred to a SNF. The problem here, not addressed by the new law, is whether the post-observation care inpatient admission lasts for three days, enough to qualify for the SNF admission.

So hospitals are left with another hoop to jump through that, although well-intentioned, may fall short on protecting the patient.

The summer heat is brutal these days. Everyone is looking for ways to beat the heat – staying inside in air conditioned comfort, jumping in a pool or under a sprinkler, and drinking lots and lots of water. But there are conditions and illnesses that result in dehydration at any time of the year where infusion of fluids is needed for treatment. What is required by Medicare in order for hydration services to be covered?

A couple of weeks ago, the Wednesday@One included an article about the July 2015 Medicare Quarterly Provider Compliance Newsletter. The Compliance Newsletter mentioned Recovery Auditor findings for hydration services lacking medically necessary diagnoses required by a Novitas Local Coverage Determination (LCD). At Medical Management Plus, we receive numerous questions related to hydration services, so this week I offer some guidance for hydration services based on the Novitas LCD, another LCD and three coverage Articles from various Medicare Administrative Contractors (MACs).

CPT instructions require the administration of a hydration infusion of more than 30 minutes in order to allow the coding of hydration as an initial service. Hydration of 30 minutes or less is not separately billable. This means hydration must last at least 31 minutes in order to bill it. If there is no documented stop time, the duration of the hydration infusion is unknown and should not be billed.

There must be a practitioner’s order for hydration therapy and documentation of the reason a patient needs hydration in the medical record.

Hydration for the following reasons is not considered medically necessary therapeutic hydration and is not covered by Medicare.

• Hydration to maintain vascular access/vessel patency is not covered.
• Fluids used solely to administer drugs is considered incidental hydration and not separately billable.
• Administration of fluids with blood transfusions or between chemotherapeutic agents to flush lines is not separately billable.

Covered indications for hydration services vary between the different coverage articles and LCDs:

• Palmetto’s Article (A53402) simply states hydration must be medically reasonable and necessary for a clinical condition that warrants hydration.
• Noridian’s Articles (A53857 and A50359) states, “Routine administration of IV fluids without documentation supporting signs and/or symptoms including those of dehydration or fluid loss is not supported as medically necessary.”
• Novitas’s LCD (L32738) indicates coverage for clinical manifestations of dehydration or volume depletion and in conjunction with chemotherapy. Hydration with chemotherapy is covered only when the infusion is prolonged and done sequentially (done hour(s) before and/or after administration of chemotherapy), and when the volume status of a beneficiary is compromised or will be compromised by side effects of chemotherapy or an illness.
• Cahaba’s LCD (L32290) lists four different medically necessary reasons for hydration:
• Documented volume depletion,
• In conjunction with chemotherapy (same restrictions as Novitas policy),
• Some endocrine conditions such as hypercalcemia, and
• As an adjunct to the treatment of hypotension.

There are a few additional restrictions in some policies other than those already mentioned:

• Cahaba and Novitas LCDs state that rehydration with the administration of an amount of fluid equal to or less than 500 ml is not reasonable and necessary.
• Cahaba also claims rehydration should only take a few hours, so the medical necessity of hydration lasting beyond 12 hours must be supported by documentation.
• The Noridian articles do not specify a certain rate of infusion but do clarify that to qualify as medically necessary hydration, the rate of infusion should support performance of this service for rapid replenishment.

If your MAC jurisdiction has a coverage policy for hydration services, please read it carefully to learn all of the indications and limitations of coverage. If your MAC does not have a policy that addresses hydration, the guidelines in the policies referenced here may provide some guidance for your hospital. Continue to monitor your MAC’s draft and new policies for any future requirements for hydration services.

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

Bevacizumab Medical Necessity (page 15 in the Compliance Newsletter)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Coming In and Going Out

At the National Spelling Bee, spellers can ask for the definition of the word they are trying to spell.  Words can sound similar in pronunciation but be spelled differently based on definition.  For example, do you know the difference in the words “emigrate” and “immigrate”?  Emigrate means to leave a country (he emigrated from Ireland) and immigrate means to move into a country (he immigrated to America).  The comings in and going out of laboratory tests also have rules – well Medicare billing rules at least.

It is not unusual these days for a hospital to have an outpatient and outreach laboratory where patients may present with their physician orders for lab tests or where physician offices, clinics, or other healthcare entities may send specimens to be tested.  Hospital laboratories perform a wide array of laboratory tests, but there are some esoteric tests that a hospital lab may not perform and these tests are sent to a specialized reference laboratory for testing.  So with lab tests coming in and going out, who bills Medicare for the tests?  Actually, there are rules about that…

Outpatient Lab Testing

Only the hospital can bill Medicare for laboratory testing provided to hospital inpatients and outpatients.  This includes lab tests performed by an outside reference laboratory on specimens from hospital inpatients and outpatients.  Section 40.3 of the Medicare Claims Processing Manual, Chapter16, states: “When the hospital obtains laboratory tests for outpatients under arrangements with clinical laboratories or other hospital laboratories, only the hospital can bill for the arranged services.”  In such cases, the hospital would bill Medicare for the lab services on an outpatient claim (13x type of bill) and the hospital would pay the reference laboratory for the testing.

Section 40.3 referenced above also defines who is and is not an outpatient.  The section that defines “outpatient” refers to critical access hospitals, but the manual goes on to say the same rules apply in determining whether clinical laboratory services are furnished as part of outpatient services of a hospital.  The patient is considered a hospital “outpatient” when one of the following occurs:

• He or she is present in the hospital when the specimen is collected,
• Other outpatient services are received on the same day the specimen is collected,
• The specimen is collected by an employee of the hospital or a hospital provider-based-department.

Non-Patient Lab Testing

When the patient’s specimen is not collected at the hospital or by a hospital employee and the patient is not receiving other hospital outpatient services on that day, the patient is considered a non-patient.  For tests performed in the hospital’s own laboratory, the hospital bills Medicare on a 14x type of bill.  If the tests are sent to a reference laboratory for testing, either the hospital or the reference lab may bill Medicare for the testing.  Only one laboratory may bill for a referred laboratory service.  It is the responsibility of the referring laboratory (hospital in this case) to ensure that the reference laboratory does not bill Medicare for the referred service when the hospital bills Medicare.

Exceptions

There are some special rules for specimens received from certain types of healthcare entities.

Skilled Nursing Facilities

• For Part A SNF inpatients, the SNF must bill Medicare directly.
• For Part B SNF inpatients or outpatients, either the SNF or the performing laboratory may bill Medicare.

End-Stage Renal Disease Lab Tests

• All ESRD-related laboratory services are included in the ESRD PPS base rate and must be reported by the ESRD facility.  A list of lab tests that are routinely performed for the treatment of ESRD can be found at ESRD Consolidated Billing webpage.
• Laboratory services that are not related to the treatment of ESRD are separately billable under the ESRD PPS.  Hospital outpatients with unrelated ESRD tests must be billed by the hospital.  Non-patient unrelated lab testing may be billed by either the ESRD facility or the hospital laboratory.
• If the ESRD facility or testing laboratory bills a laboratory service that was not related to the treatment of ESRD, the bill must include the modifier AY.  The AY modifier serves as an attestation that the item or service is medically necessary for the dialysis patient but is not being used for the treatment of ESRD.

Hospice Patients

• Hospice nurses often collect specimens and bring them to a hospital laboratory for testing.  All services related to the patient’s terminal or co-morbid conditions are covered under the hospice benefit.  The hospital laboratory would bill the Hospice provider for these laboratory services.

Separate Payment for Lab Tests under OPPS

In 2014, Medicare packaged most laboratory tests under the Outpatient Prospective Payment System as ancillary services with a revised Status Indicator (SI) of “N”.  This means there is no separate payment for laboratory services.  There are some exceptions when lab services will be paid separately by Medicare.  These exceptions include:

• Lab tests on non-patient specimens billed on a 14x type of bill
• When laboratory tests are the only outpatient service the patient receives for that day.  These are billed on a 13x type of bill and an L1 modifier is appended to the lab services.
• Unrelated laboratory tests that are ordered by a different physician for a different diagnosis than other outpatient services received that day.  These are also billed on a 13x type of bill with the L1 modifier.

Other Payer Rules for Lab Tests

To keep life interesting and providers on their toes, not all payers follow Medicare rules.  You will have to check with individual payers to determine how laboratory tests should be billed.  Some payers may require the testing lab to bill and others may have specific criteria for when the referring lab can bill.  For example Alabama Medicaid states the following concerning charges for referred testing.

 Hospital labs may bill Medicaid on behalf of the reference lab that a specimen is sent to for analysis. Payment may be made to the referring laboratory but only if one of the following conditions is met:

• The referring laboratory is located in, or is part of, a rural hospital;
• The referring laboratory is wholly owned by the entity performing such test, the referring laboratory wholly owns the entity performing such test, or both the referring laboratory and the entity performing such test are wholly-owned by a third entity; or
• The referring laboratory does not refer more than 30 percent of the clinical laboratory tests for which it receives requests for testing during the year (not counting referrals made under the wholly-owned condition described above).

Note also that AL Medicaid only allows venipuncture to be billed if the specimen is tested at a different lab than the lab collecting the specimen – “Hospital labs may bill ‘routine venipuncture’ only for collection of laboratory specimens when sending blood specimens to another site for analysis”

Hospital providers must consider the comings in and goings out of laboratory specimens in order to know who and how to bill.  It’s enough to make one want to immigrate to another career – or would that be emigrate?