Knowledge Base Category -

Medical Management Plus enjoys acknowledging the various healthcare professionals with whom we work during their designated annual recognition times. October is National Physical Therapy month and we thank all of those who work diligently in the physical therapy occupation to improve the health of their patients. In association with this recognition, here are some questions and answers related to Medicare therapy services.

1. If a patient in a hospital setting (observation or inpatient) receives therapy services, do you have to follow the Part B (general considered outpatient) therapy guidelines?
2. outpatients receiving observatipon services
3. inpatients whose inpatient admission does not meet criteria so only Part B services are billed, and
4. inpatients who only have Medicare Part B coverage (patient does not have Medicare Part A or Part A benefits are exhausted).
   The 2014 IPPS Final Rule states “we (CMS) believe we also must apply the therapy caps and all other Part B coverage and payment rules to hospital inpatient therapy services paid under Part B. Accordingly, (therapy services) billed to Medicare Part B, … will be subject to the Part B therapy caps …, the therapy caps exceptions process, the manual medical review process, and all other requirements for payment and coverage of therapy services under Part B (for example, functional status reporting requirements).”
5. Is a discharge summary required for all Medicare patients receiving outpatient therapy services?Yes, the Medicare Benefits Policy Manual, Chapter 15, Section 220.3 states:
   “The Discharge Note (or Discharge Summary) is required for each episode of outpatient treatment. … The discharge note shall be a progress report written by a clinician, and shall cover the reporting period from the last progress report to the date of discharge. In the case of a discharge unanticipated in the plan or previous progress report, the clinician may base any judgments required to write the report on the treatment notes and verbal reports of the assistant or qualified personnel.”
6. If a patient discontinues outpatient therapy unexpectedly, must you report a discharge functional limitation HCPCS (G) code and modifier? What do you do if the same patient later returns to continue therapy?
   
   Per MLN Matters Special Article SE 1307: “Discharge reporting is required at the end of the reporting episode or to end reporting on one functional limitation prior to reporting on another medically necessary functional limitation. The exception is in cases where the beneficiary discontinues therapy expectantly. When the beneficiary discontinues therapy expectantly, we encourage clinicians to include discharge reporting whenever possible on the claim for the final services of the therapy episode.
   
   When a beneficiary discontinues therapy without notice, and returns less than 60 calendar days from the last recorded DOS to receive treatment for:
7. the same functional limitation, the clinician must resume reporting following the reporting requirements outlined in the “Required Reporting of Functional Codes” subsection; or
8. a different functional limitation, the clinician must discharge the functional limitation that was previously reported and begin reporting on a different functional limitation at the next treatment DOS.
9. NOTE: A reporting episode will automatically be discharged when it has been 60 or more calendar days since the last recorded DOS.
10. Is it appropriate to use modifier 59 to by-pass CCI edits for therapy services that are performed during the same session but at separate times?
11. Yes, per the NCCI manual, “Some NCCI edits pair a “timed” CPT code with another “timed” CPT code or a non-timed CPT code. These edits may be bypassed with modifier 59 if the two procedures of a code pair edit are performed in different timed intervals even if sequential during the same patient encounter.”
12. Where can I find the information on the time reporting requirements for rehabilitative therapy services?
13. That information can be found in the,Medicare Claims Processing Manual, chapter 5 ,section 20.2and also -Medicare Therapy Billing Scenarios
14. Are Medicare contractors and affiliates still performing medical review of therapy services?
15. Yes, the RACs continue to perform manual medical review of therapy services exceeding the annual threshold amount and the OIG recently published areview of outpatient therapy services. Although this review focused on an independent therapy provider (not hospital outpatient), the findings are relevant to therapy in either setting. Findings included:
    
16. Plan of Care (POC) goals that were not measurable or pertinent to the patient’s functional limitation,
17. Problems with the therapist’s signature on the POC and treatment notes
18. Lack of specific skilled interventions in the treatment notes
19. Lack of documentation of time
20. Lack of medical necessity for therapy services
21. Progress notes not performed every 10th treatment day
22. Physician certifications not signed and/or dated
23. Other Medicare contractors such as the Medicare Administrative Contractors (MACs) and CERT reviewers may also review therapy records.

As always, therapists have more to worry about than just how their patients are progressing.

We have all experienced times when our first attempt at something did not work out the way we planned. Then, if we didn’t just give up, we had to tweak our solution or try something different to accomplish our goal. Evidently Medicare is having a similar experience with their attempts to reduce Medicare paid claims error rates through the National Correct Coding Initiative and the Medically Unlikely Edits. CMS has recently made some modifications to both with the hope of better controlling improper coding and billing.

NCCI Edits and Modifier 59

The National Correct Coding Initiative (NCCI) contains Procedure to Procedure edits to prevent unbundling of services and inappropriate payments. The edits are based on the principle that the second code defines a subset of the work of the first code. However for some code combinations, there are times when reporting the two codes together on a claim is appropriate and there are HCPCS modifiers that allow some CCI edits to be by-passed.

One of the most commonly used modifiers is modifier 59 which is used to indicate that a service is “separate and distinct” from another service with which it is sometimes bundled. Directions in the NCCI manual instruct to use modifier 59 (if no other modifier fits) to report different encounters, different anatomic sites, and distinct services. For providers it is sometimes difficult to know exactly when the 59 modifier is appropriate and CMS reports that this modifier is indeed associated with considerable abuse and high levels of manual audit activity.

Modifier 59 is used infrequently and usually correctly for different encounters and used more frequently, but less correctly for separate anatomic site. And interestingly, CMS says the most common reason for using modifier 59 is also the most frequently incorrect usage – that is when it is used to define a distinct service. All of this incorrect usage voids the very purpose of the CCI edits.

In Transmittal 1422 (see MLN Matters Article MM8863), CMS is proposing four new HCPCS modifiers to define specific subsets of the -59 modifier. These modifiers are not required to be used at this time, and CMS will accept either a -59 modifier or one of the new modifiers for now, although they are encouraging providers to “rapidly” implement use of the new modifiers. CMS and/or the local Medicare Administrative Contractors (MACs) may require the usage of the new modifiers in the future especially for certain codes at high risk for incorrect billing.

The new modifiers (known as –X {ESPU} modifiers) are:

• XE Separate Encounter, A Service That Is Distinct Because It Occurred During A Separate Encounter
• XS Separate Structure, A Service That Is Distinct Because It Was Performed On A Separate Organ/Structure
• XP Separate Practitioner, A Service That Is Distinct Because It Was Performed By A Different Practitioner
• XU Unusual Non-Overlapping Service, The Use Of A Service That Is Distinct Because It Does Not Overlap Usual Components Of The Main Service

Transmittal 1422 explains a little better than the corresponding MLN Matters article that modifier 59 will still be accepted in many instances. However current, existing guidance concerning modifier 59 continues to apply - “the -59 modifier should not be used when a more descriptive modifier is available” which now includes the new more descriptive –X {ESPU} modifiers.

Medically Unlikely Edits

In a separate Transmittal (see MLN Matters Article MM8853) CMS reviews modification to the Medically Unlikely Edit (MUE) Program. This is basically the same information as previously presented in MLN Matters Special Edition article SE1422 but more details are provided (see the MMP article Medicare MUEs and Correct Bilateral Billing from July).

Like the NCCI edits, the MUE program (which began in January 2007) was implemented to reduce the Medicare paid claims error rate. The MUE is a limit on the number of units that Medicare will adjudicate. Initially, the MUE values were only adjudicated against the units reported on each line item of a claim. In April, 2013, CMS modified the MUE program so that some MUE values would be date of service edits. This means that if the units reported for one day of a HCPCS code (with a date of service MUE) exceed the MUE limit, no payment would be made for that code unless the denial was overturned on a provider-initiated appeal.

At the same time as the date of service edits, CMS introduced an “MUE adjudication indicator” (MAI) to the MUE edit table. The MAI field was not made public knowledge or published until the July 2014 MUE update. These indicators describe the type of MUE and how it is adjudicated.

• An MAI of “1” is a claim line edit. The MUE may be by-passed when appropriate by reporting units exceeding the MUE on separate lines with an acceptable modifier.
• An MUE with an indicator of “2” is an absolute date of service edit. Units of service exceeding the MUE value are considered “impossible” because they are contrary to statute, regulation or subregulatory guidance, including correct coding policies. Denials for services with an MAI of “2” will not be overturned on appeal.
• MUEs for HCPCS codes with an MAI of “3” are date of service edits based on clinical guidelines. These edits will cause an automatic denial if the units for a date of service exceed the limit, but the denial may be overturned on appeal if there is adequate documentation of medical necessity of correctly reported units.

Additional information in this MLN article reminds providers that a denial of services due to an MUE is a coding denial and not a medical necessity denial. Therefore an Advance Beneficiary Notice (ABN) will not shift liability to the beneficiary. There is also a reminder that bilateral services should be reported on one line with a modifier 50 and units of 1 to avoid an MUE denial. Corresponding Transmittal 1421 explains that in determining date of service edits, Medicare will consider all units of the date of service HCPCS on “all claim lines on the current claim and paid claim lines of prior finalized claims”, although only lines on the current claim will be denied. Is this a proactive step to prevent providers from reporting units on separate claims?

As Medicare modifies their regulations, hospitals have to modify their processes to comply and adjust to the new requirements. The two transmittals discussed here will require hospitals to utilize new modifiers and be aware of the different types of MUEs and their impact on billing and appeals. It is always something!

The Office of Inspector General (OIG) regularly posts reports of their audit findings. A number of these reports relate to hospital payment errors, although the reports often address the same issues from hospital to hospital. However, I always read through the findings to see if there are any new twists to the issues and to remind myself of these OIG target areas – in other words to see what’s in it for me.

Recently the OIG released three reports of hospital audits – two related to drug payment errors and one general compliance review. Here are a couple of issues from these reports worth noting.

Non-covered Use of Reteplase

The drug reteplase (HCPCS code J2993 – injection, reteplase, 18.1 mg) is approved by the Food and Drug Administration (FDA) to treat cardiac conditions using a single-use dose. The OIG identified a billing error that occurred when a provider billed Medicare for one full single-use dose of reteplase when they had actually split a single dose into multiple doses and used them as a thromblytic agent to clean dialysis patient catheters. This is a non-covered use of reteplase and resulted in an overpayment to the facility. (OIG Report Drug Overpayments Jurisdiction 13)

Bundled IMRT Planning Services

In the OIG Medicare Compliance Review of Good Samaritan Hospital, the OIG identified that the hospital had billed separately for services performed as part of Intensity Modulated Radiation Therapy (IMRT) planning resulting in an overpayment. These services are included in the payment for IMRT planning even when provided on a different date of service.

Hospitals are to report CPT code 77301 for IMRT planning. The Medicare Claims Processing Manual, Chapter 4, section 200.3.2 states that “Payment for the services identified by CPT codes 77014, 77280-77295, 77305-77321, 77331, 77336, and 77370 is included in the APC payment for IMRT planning when these services are performed as part of developing an IMRT plan that is reported using CPT code 77301.” Therefore these codes should not be billed in addition to IMRT planning (CPT 77301), regardless if provided on the same or different dates of service, unless they are not provided as part of developing the IMRT treatment plan.

A quick review of OIG reports relating to hospital findings is a great way to become familiar with the OIG target areas and to evaluate issues against your hospital’s practices. Better to be proactive than regretfully reactive.

Just as you think you have mastered the challenge of complying with a Medicare rule, the rule changes and you have to start over. So it goes like this – know about the rules, understand the rules, implement processes to comply with the rules and then make sure the rules don’t change on you. Such was the case with the instructions for billing for certain laboratory tests.

It is almost July and just in time, CMS has issued the modifier to be appended to laboratory services when separate payment under OPPS is appropriate. Modifier L1 will be used starting July 1, 2014 to indicate that laboratory services provided to hospital outpatients meet one of the exceptions of “unrelated” or “lab test only” lab services.

As a reminder, the 2014 OPPS final rule packaged almost all clinical laboratory services as ancillary services with a revised Status Indicator (SI) of “N”. There are exceptions when lab tests are the only service provided or if the lab services are “unrelated” to other outpatient services. The original instructions from CMS for obtaining separate payment for the excepted lab services, was to submit a 14x type of bill (TOB). After concerns from the National Uniform Billing Committee (NUBC) and providers, CMS agreed to change the requirements effective July 1, 2014.

CMS Transmittal 2971 (CR 8776) (MLN Matters Article MM8776) issued May 23, 2014 manualized changes related to the new billing requirements for separately reimbursable laboratory services.

• Non-Patient (Referred) Laboratory Specimen - A non-patient is neither an inpatient nor an outpatient of a hospital. The patient is not physically present at the hospital but has a specimen submitted for analysis, for example, from a physician’s office or a non-hospital clinic. These non-patient laboratory services are to be billed on a TOB 14X. They are paid under the clinical laboratory fee schedule (CLFS) at the lesser of the actual charge or the fee schedule amount. Part B deductible and coinsurance do not apply.
• Outpatient lab tests only - If the only services the hospital provides to an outpatient are outpatient laboratory tests, the lab services are separately reimbursable and may be submitted on a TOB 13x with modifier L1 beginning July 1, 2014. The L1 modifier must be added to each lab line item on the claim. Such patients do not receive any other hospital outpatient services on the same day of service.
• Unrelated outpatient lab tests- If the hospital provides an outpatient laboratory test on the same date of service as other hospital outpatient services that is clinically unrelated to the other hospital outpatient services, then this lab service is also separately reimbursable and may be submitted on a TOB 13x with modifier L1 beginning July 1, 2014. Again, each lab line item that meets the exception requirements for separate Medicare reimbursement must be appended with the L1 modifier. Clinically unrelated means the laboratory test is
• ordered by a different practitioner than the practitioner who ordered the other hospital outpatient services, and
• for a different diagnosis.
• Payment for separately reimbursable outpatient laboratory tests is the lesser of the actual charge or the fee schedule amount for lab tests paid under the CLFS with no Part B deductible or co-pay.

The transmittal also addressed the payment of laboratory services related to Part B Inpatient claims (12x claims when there is no Part A payment). The new Part A to B rebilling rules from the 2014 IPPS Final Rule allow the submission of all Part B services on a 12x TOB when there is no Part A payment because the inpatient admission was not medically necessary. For these claims, the laboratory services will be packaged according to the OPPS rules since associated Part B services are payable under the expanded Part B billing.

When there is no Part A payment because the patient is not eligible for Part A or has exhausted Part A benefits, only limited Part B services may be billed on a 12x TOB. For these types of claims, the laboratory services will be reimbursed separately if the associated Part B services are not billable / payable under the limited Part B billing.

Just as hospitals had likely gotten their systems and processes in place to handle the 14x type of bill, the rules changed. Now hospitals need to start again on new systems and processes for use of the new modifier L1 to allow separate payment for laboratory services. Job security for someone?

A farmer is selling baskets of apples that were picked several days ago. He knows that some may be bad so he will give a discount based on the percentage of bad apples. The first customer chooses five apples at random and only one of the five is bad, so the farmer gives him a 20% discount. The next customer carefully selects five apples with visible dark spots and all five apples are bad. The farmer gives him a 90% discount. Sometimes it is all in the selection.

In a recent OIG review of payments for selected outpatient drugs, the OIG found that payments for 1,132 of the 1,905 line items for outpatient drugs selected for review were not correct. This appears to be an astonishing error percentage, but beware, this is not a random selection. The OIG uses computer matching, data mining, and other analytical techniques to identify the line items potentially at risk for noncompliance with Medicare billing requirements. Some specific targets mentioned in the report are selected outpatient drugs, payments for drugs that exceeded charges by at least $1,000, and high-dollar payments.

The report found errors involving incorrect units of service, incorrect HCPCS codes, both incorrect units and HCPCS, billing for packaged or non-covered use of a drug, and lack of supporting documentation. Some of the specific drugs and issues include:

• Incorrect units were the cause of most of the billing errors.
• The billable units of a drug can be calculated by dividing the dosage of the drug given by the amount in the HCPCS code description for the drug. For example if 140 mg of a drug is given that has a HCPCS code description of Injection, drug, 1 milligram, then the correct units are 140÷1 = 140 units; if 800 mg of a drug is given that has a HCPCS code description of Injection, drug, 200 mg, then the correct units are 800÷200 = 4 units.
• Leuprolide acetate injections are used for different purposes, each with a different HCPCS code and description.
• HCPCS code J1950, leuprolide acetate injection, 3.75 milligrams per unit, is indicated for the treatment of endometriosis, uterine leiomyoma, and malignant neoplasms of the breast
• HCPCS code J9217, leuprolide acetate injection, 7.5 milligrams per unit is indicated for the treatment of prostate cancer
• Due to difference in Medicare payment rates for these drugs (J1950 - $760.03 and J9217 - $206.78) and the difference in milligram descriptions, billing the wrong HCPCS code for the wrong treatment will result in a significant over or under payment.
• Doxorubicin hydrochloride is available in both a lipid (or liposomal) and a non-lipid (or non-liposomal) formula. The non-lipid form of doxorubicin hydrochloride (HCPCS code J9000) is packaged, whereas the liposomal forms (previously J9001) receive separate Medicare payment. Medicare payment rates for the current HCPCS codes for liposomal doxorubicin (Q2049 and Q2050) are close to $500 per 10 mg.
• Are you using the correct HCPCS code? For example, are your codes correct for:
• Epoetin alfa, 1000 units, for non-ESRD use – J0885
• Darbepoeitn alfa, 1 mcg, non-ESRD use – J0881
• Epoetin alfa, 100 units, for ESRD use – Q4081
• Herceptin – not specifically mentioned in this report because Herceptin audits get their own separate reports. Herceptin is available in a 44mg multi-use vial and Medicare does not pay for drug wastage for multi-use vials. The units of Herceptin billed should be based on the patient’s dosage, not the vials used.

These types of errors may be repeated errors if the reason is a wrong multiplier in the chargemaster. Look for payments that appear too large or too small in relation to the charge amounts.

Hospitals need to make sure the correct drug code is being submitted for the correct treatment purpose.

Your hospital can use the same data mining approach that the OIG uses to check for internal issues with the billing for drugs. MMP’s HIQUP (Hospital Improvement in Quality and Performance) report, which data mines a facility’s Medicare outpatient 835 files, includes several queries designed to identify drugs at high risk of billing errors. So if you are struggling with drug units, please contact us if we can help.

Happy National Laboratory Week to all the laboratorians who work behind the scenes to assist in the diagnosis and treatment of patients. Laboratory science has come a long way since I entered the profession many years ago with a lot more instrumentation and ever evolving tests offerings, such as genetic molecular pathology testing. Thanks to all the dedicated laboratory professionals who play a valuable role in maintaining and improving our nation’s health.

From a Medicare reimbursement standpoint, it has been a tough year for hospital outpatient clinical laboratory services. The 2014 OPPS Final Rule finalized a proposal to package payment for clinical laboratory tests performed during the same encounter with other outpatient services. This means there is no additional separate payment for lab tests performed on Medicare patients in the following areas:

• Patients treated in the Emergency department
• Patients in Outpatient hospital clinics, such as a Wound Care clinic or Cancer clinic
• Patients receiving Observation services
• Patients during an outpatient surgery
• Patients having lab tests performed during the same encounter as any other outpatient services such as imaging studies

Medicare still pays separately for clinical laboratory tests in the following exceptions if the claims are billed correctly:

1. When a specimen is submitted for analysis to a hospital and the patient is not physically present at the hospital. These are commonly referred to as non-patient services, outreach lab services or reference lab tests.
2. When laboratory tests are the only hospital outpatient services that a patient receives during an outpatient encounter. For example, patients that are referred from a physician’s office/clinic to a hospital outpatient laboratory for laboratory testing only and no other outpatient services.
3. When laboratory tests are clinically unrelated to other outpatient services the patient receives during an outpatient encounter and the lab tests are ordered by a different practitioner than the one who ordered the other (non-lab) outpatient services.

And as if this were not confusing enough already, the rules for billing laboratory claims to receive separate payment are about to change again. Effective January 1, 2014, CMS instructed hospitals to bill laboratory claims in the above listed situations on a 14x type of bill. However, because of concerns from hospitals and the National Uniform Billing Committee (NUBC) that all of these situations do not conform to the NUBC definition of a 14x bill as a “non-patient” claim, CMS is modifying the billing instructions effective July 1, 2014 as explained in MLN Matters Article SE1412.

Effective for claims billed on or after July 1, 2014, CMS will create a new modifier (yet to be determined) to be used on the 013X TOB (instead of the 014X TOB) when non-referred lab tests are eligible for separate payment under the Clinical Laboratory Fee Schedule (CLFS) for exceptions (2) and (3) listed above. For claims with dates of service on or after January 1, 2014 that are billed to Medicare on or after July 1, 2014 the following billing instructions apply:

‍Hospitals should continue to bill all exceptions for separate payment for laboratory tests on a 14x TOB until July 1, 2014. It continues to be the hospital’s responsibility to determine when laboratory tests qualify to receive separate payment. Starting with claims received July 1, 2014, and after, when a hospital appends the new modifier to a laboratory service, the provider is attesting that exception (2) or (3) listed above is met. The requirement for all OPPS services to be submitted on a single 13x claim (other than recurring services) continues to apply. In addition, laboratory tests for molecular pathology tests described by CPT codes in the ranges of 81200 through 81383, 81400 through 81408, and 81479 are not packaged in the OPPS and do not require the new modifier.

MMP will provide more information, specifically the new modifier and any accompanying instructions, as it becomes available. Please refer to the MLN Matters Article reference above for more information, including some billing scenarios.

When Medicare reviewers audit your records, your documentation should “tell a good story.” For example, for rehabilitative therapy does your record tell what was wrong, when it happened, how it affected the patient’s life, why skilled services are needed, which services are needed and for how long and often, that a physician was involved in the patient’s care, and finally what was the patient’s outcome? I also review therapy records and complete, accurate documentation tells a compelling story of a patient’s therapy episode.

The first CERT Task Force scenario is a guide to educate providers on common documentation errors for outpatient rehabilitation therapy services. In addition to actual pre- and post-payment reviews, Medicare Administrative Contractors (MACs) provide feedback and education to providers through publication of their review findings, direct provider education, and now through collaboration with each other and the CERT review program. Certain A/B MACs are working together through the CERT A/B MAC Outreach and Education Task Force to educate providers on costly claim denials and billing errors to Medicare with an ultimate goal of reducing the national payment error rate.  

This focus on therapy services is timely as April is National Occupational Therapy month. In addition to sharing some of the key points from this guide, MMP would like to acknowledge the valuable contribution of Occupational Therapists to healthcare. The older I get, the more I value the ability to perform the physical functions necessary to lead an active lifestyle and to accomplish simple activities of daily living. When age, illness, or injury impairs function, occupational therapists are there to help patients restore and maintain their abilities.

In addition to their technical skills, all rehabilitative therapists must document their services in a manner consistent with Medicare’s documentation requirements. According to the CERT Task Force guide, “The leading cause of payment errors for therapy services is ‘insufficient’ documentation in the medical records.” Therapy documentation is often missing the required elements as outlined in applicable local coverage determinations and the Medicare manuals.

Here are some of the key documentation elements from the guide, LCDs, and the Medicare manuals.

• Plan of Care must include:
• The patient’s diagnoses (helpful to include functional limitations)
• Measurable long term goals for the entire episode of care
• Type of therapy (PT, OT, or SLP) (helpful to describe specific treatments, such as therapeutic activities, neuromuscular reeducation, etc.)
• The amount, duration and frequency of services
• Legible, dated signature and professional identity of the person establishing the plan and the practitioner certifying the plan
• Treatment notes must include:
• Date of treatment
• Specific intervention(s) provided and billed
• Total timed code treatment minutes and total treatment time in minutes
• Signature and professional identification of the qualified professional who furnished the services
• Functional Reporting
• Nonpayable G-codes and severity modifiers reported on claim must be documented in the therapy record
• Therapists must document in the medical record how they made the modifier selection so that the same process can be followed at succeeding assessment intervals.

I encourage therapists to review the CERT Task Force guide, as well as the Medicare manuals and LCDs for therapy services for a complete discussion of the documentation requirements. I realize a lot of documentation is required, but good therapy documentation paints a complete and accurate picture of the patient’s conditions, the need for therapy, the treatments provided, and the patient’s ultimate outcome. For my nerdy, healthcare brain, it is like reading a good novel!

On April 1st, President Obama signed into law the Protecting Access to Medicare Act of 2014. Per a White House Press Secretary release this new law “averts cuts to Medicare physician payments that will go into effect on April 1, 2014, under the current-law “sustainable growth rate” system, to extend other health-related provisions set to expire, and to make other changes to current-law health provisions.” In addition to averting cuts to physician payments, this law includes additional “Medicare Extenders” and “Other Health Provisions.” But before looking at some of the more significant topics within the law, it is interesting to note how quickly this bill was presented, voted on and became law.

• March 26, 2014: Representative Joe Pitts (R-PA), Chairman, Energy and Commerce Subcommittee on Health introduced H.R. 4302 the Protecting Access to Medicare Act of 2014.
• March 27, 2014: The House voted by a voice vote and approved the bill. This vote was under special rules that provided for no amendments, limited debate and only needed a two-thirds majority votes.
• March 31, 2014: The United States Senate passed the bill with a vote of 64 YEAs, 35 NAYs and 1 Not Voting.

April 1, 2014: The Act was signed into law by President Obama signed the Protecting Access to Medicare Act of 2014 into Law.

Spotlight on Extensions and Health Provisions in the Law:

Section 101: Physician Payment Update: This section provides for a 0.5 percent update for claims with dates of service on or after January 1, 2014, through December 31, 2013. Further, it provides a zero percent update to the 2015 Medicare Physician Fee Schedule (MPFS) through March 31, 2015.

Section 103: Extension of Therapy Cap Exception Process: This section extends the exceptions process for outpatient therapy caps through March 31, 2015. When a provider requests an exception to the cap for medically necessary services they must submit the KX modifier on their claim. This law extends the application of the caps, exceptions process, and threshold for therapy services provided in a hospital outpatient department (ODP).

Therapy caps for 2014:

• Occupational Therapy (OT) cap is $1,920
• Physical Therapy (PT) and Speech-Language Pathology Services (SLP) combined is $1,920

Additional information regarding therapy caps can be found on the CMS Therapy Cap webpage as well as Chapter 5, Section 10.3 in the Medicare Claims Processing Manual.

Section 106: Extension of the Medicare-Dependent Hospital (MDH) Program: This program provides enhanced payment to small rural hospitals where Medicare beneficiaries makes up a significant percentage of inpatient days or discharges. This provision extends the program through March 31, 2015.

More information about MDH Hospitals can be found in the Acute Care Hospital Inpatient Prospective Payment System Fact Sheet. Specific criteria to be designated a MDH Hospital includes:

• It is rural (located in a rural area);
• It has 100 or fewer beds during the cost reporting period;
• It is not also classified as a Sole Community Hospital (SCH); and
• At least 60 percent of its inpatient days or discharges were attributable to Medicare Beneficiaries entitled to Part A during the hospital’s cost reporting period.

Section 111: Extension of Two-Midnight Rule:

For hospital staff closely involved in trying to implement the Two-Midnight Rule, I felt it was important to provide you with the exact language in the bill.

“(a) CONTINUATION OF CERTAIN MEDICAL REVIEW ACTIVITIES.— The Secretary of Health and Human Services may continue medical review activities described in the notice entitled ‘‘Selecting Hospital

Claims for Patient Status Reviews: Admissions On or After October 1, 2013’’, posted on the Internet website of the Centers for Medicare & Medicaid Services, through the first 6 months of fiscal year

2015 for such additional hospital claims as the Secretary determines appropriate. (b) LIMITATION.—The Secretary of Health and Human Services shall not conduct patient status reviews (as described in such notice) on a post-payment review basis through recovery audit contractors under section 1893(h) of the Social Security Act (42 U.S.C. 1395ddd(h)) for inpatient claims with dates of admission October 1, 2013, through March 31, 2015, unless there is evidence of systematic gaming, fraud, abuse, or delays in the provision of care by a provider of services (as defined in section 1861(u) of such Act (42 U.S.C. 1395x(u))).”

What does this mean for hospitals?

• The Medicare Administrative Contractor (MAC) Probe and Educate program has now been extended for a fourth time through March 31, 2015.
• Recovery Audit Contractors “shall not conduct patient status reviews on a post-payment review basis” for inpatient claims with dates of service October 1, 2013 through March 31, 2015. It is important to remember that on February 18th CMS announced that current RAC activity is winding down during the new contract procurement round.
• Hospitals should take advantage of this additional time to continue to educate staff and fine tune your processes.

Section 212: Delay in Transition for ICD-9 to ICD-10 Code Sets

“The Secretary of Health and Human Services may not, prior to October 1, 2015, adopt ICD–10 code sets as the standard for code sets under section 1173(c) of the Social Security Act (42 U.S.C. 1320d–2(c)) and section 162.1002 of title 45, Code of Federal Regulations.”

This is a significant delay for everyone that has been proactively planning and providing education for an October 1, 2014 transition to the ICD-10 Code Sets. MMP plans to continue to provide I-10 Corner articles and encourages all to not look at this as a setback but as an opportunity to provide more training to your staff and test the readiness of your computer systems.

Section 221: Medicaid DSH

This law delays reductions in payments to Disproportionate Share Hospitals (DSH) by a year and then makes additional reductions through 2024.

There are still quite a few extensions and provisions not discussed in this article. MMP encourages those interested to review the Protecting Access to Medicare Act of 2014 in its entirety.

Since the release of the 2014 IPPS Final Rule (CMS-1599-F), the Centers for Medicare and Medicaid Services (CMS) have provided additional guidance to several elements of the rule. On March 21st they released MLN Matters® Number: MM8666 proving guidance on how to implement the Part B Inpatient Payment Policies in the CMS-1599-F. This article is based on Change Request (CR) 8666 that updates the Medicare Benefit Policy Manual Chapter 6 – Hospital Services Covered under Part B. Now, let’s walk through highlights from the article.

When would a Hospital consider rebilling Part A to Part B?

When a hospital “self-audits” a Medicare beneficiary’s hospitalization after they have been discharged and determines that the inpatient admission was not reasonable and necessary and instead should have been a hospital outpatient stay, then they should consider rebilling.

A hospital can also consider rebilling when a Medicare Contractor has performed a complex review of an inpatient claim and denied the claim.

What Services are allowable by Medicare when the claim is rebilled?

“Medicare will allow payment under Part B of all hospital services that were furnished and would have been reasonable and necessary if the beneficiary had been treated as a hospital outpatient…except for those services that specifically require an outpatient status, such as outpatient visits, emergency department visits, and observation services, that are, by definition, provided to hospital outpatient and not inpatients.”

What are limitations of being able to rebill?

• The beneficiary must be enrolled in Part B,
• The allowed timeframe for submitting claims (within one calendar year from the date of service) hasn’t expired; and
• Waiver of liability payment is not made.

What is the process for submitting a claim?

• If you have already submitted a claim to Medicare for Part A payment, this claim must be cancelled before submitting the Part B services claim.
• Even if you have not yet submitted a claim “Medicare requires the hospital to submit a “no pay” Part A claim indicating that the provider is liable under section 1879 of the Act for the cost of the Part A services.”

At this point you would submit an inpatient claim for payment under Part B (a 12x type of bill).

How are Part B Payments made?

“Payment is made according to the Part B fee schedules or prospectively determined rates for which payment is made for these services when provided to hospital outpatients.”

What Type of Hospitals can submit Part B inpatient claims?

All hospitals that bill Part A services are eligible to bill the Part B inpatient services, including:

• Short Term Acute Care Hospitals paid under IPPS,
• Hospitals paid under OPPS,
• Long Term Care Hospitals (LTCHs),
• Inpatient Psychiatric Facilities (IPFs) and IPF hospital units,
• Inpatient Rehabilitation Facilities (IRFs) and IRF hospital units,
• Critical Access Hospitals (CAHs),
• Children’s Hospitals,
• Cancer Hospitals; and
• Maryland Waiver Hospitals.

What the Medicare Beneficiary Liability is and the Hospitals Responsibility for Payment?

• A Medicare Beneficiary is liable for their usual Part B financial liability.
• “If the beneficiary’s liability under Part A for the initial claim submitted for inpatient services is greater than the beneficiary’s liability under Part B for the inpatient services they received, the hospital must refund the beneficiary the difference between the applicable Part A and Part B amounts.”
• However “if the beneficiary’s liability under Part A is less than the beneficiary’s liability under Part B for the services they received, the beneficiary may face greater cost sharing.”

The MLN Article goes on to discuss what services a Hospital can and cannot bill for. The CMS makes a point to remind hospitals that “the services billed to Part B must be reasonable and necessary and must meet all applicable Part B coverage and payment conditions. Claims for Part B services submitted following a reasonable and necessary Part A claim denial or hospital utilization review determination must be filed no later than the close of the period ending 12 months or one calendar year after the date of service.”

MMP strongly recommend that hospital read the entire article as well as (CR) 8666 and share this information with all staff members that would be involved in this process.

Have you noticed that when Medicare changes the rules, you are always working to come up with new processes to deal with the changes? Such was the case with the numerous revisions finalized for OPPS for 2014. Hopefully since it is now the middle of March, most hospitals have the new processes in place. But we thought it would be a good reminder to review the new requirements and some suggested process revisions for Skin Substitutes.

The 2014 OPPS Final Rule contained a lot of changes, one of which was the packaging of skin substitute products for 2014. Medicare now considers these products to be in the category of “drugs and biologicals that function as supplies or devices when used in a surgical procedure” so in 2014 Medicare will not make a separate payment for the product itself. The payment for the product is “packaged” into the payment for the application procedure.

The good news is that due to comments from the proposed rule, Medicare created two levels of payment for the application of skin substitutes based on whether the skin product was high or low cost. The addition of new HCPCS codes to accommodate the differential application codes requires hospitals to have processes to ensure the correct application code is billed with the correct type of skin product. The payment rates for application of a high-cost substitute are more than double the low-cost substitute application for most codes so the process is definitely important.

High-cost skin substitutes will continue to be billed with the current CPT skin substitute application codes, 15271-15278. The application of low-cost skin substitutes are to be reported with new HCPCS codes C5271-C5278. Note that the HCPCS codes are the same as the CPT codes with the beginning numeral “1” replaced with a “C” (for example CPT 15271 equates to HCPCS C5271).

Hospitals will have to consider if skin substitute application codes are built into the Charge Description Master (CDM) and selected when a charge is entered by the department or if the applications are coded by Medical Records coders. If these codes are built into the CDM, you will now have to have two sets of application charges, one for high-cost substitutes and one for low cost substitutes. Instead of eight items, you now have sixteen CDM entries.

Then the person selecting the charge in the department or the coder selecting the code will have to know whether a high-cost or low-cost skin substitute was applied. See the table (link) at the bottom of this article for a list of high and low-cost skin substitutes. This table includes the changed assignment of two skin products from the April OPPS update. For department charge entry, the superbill or charge sheet will need to be revised to reflect the new application codes. Coders will have to be careful in their selection of codes; automated coding systems may have edits to assist in assigning the proper codes.

Finally, Medicare has installed edits on their billing systems to identify mismatches between the skin substitute product and the application code. Claims hitting these edits will RTP (return to the provider) for correction. Billers will have to be made aware of what the RTP issue is and how to correct it. It is likely they will have to communicate with the department or coders to determine the proper correction.

As I stated above, it is always a process when dealing with Medicare. Guess that means job security for those of us who track and handle compliance with Medicare regulations.

Skin Substitute Product Assignment to High Cost/Low Cost Status for CY 2014