Knowledge Base Category -

This week, March 9-15, 2014, is Pulmonary Rehabilitation Week. MMP would like to thank all of the healthcare professionals who enhance the quality of life of individuals with lung disease through a Pulmonary Rehab program. We are glad that Medicare finally recognized Pulmonary Rehab as a distinct payable comprehensive program. But along with the benefit of Medicare coverage comes the challenges of meeting all of Medicare’s requirements for coverage. And for Pulmonary Rehab, like a lot of other services, that is no easy task.

The Medicare rules for Pulmonary Rehab can be found in the Medicare manuals, specifically the Benefit Policy Manual, Chapter 15, section 231 and the Claims Processing Manual, Chapter 32, section 140.4. Also, some local Medicare Administrative Contractors (MACs) have coverage policies or articles that further define coverage, such as specific diagnosis codes. Pulmonary Rehab professionals need to be fully aware of Medicare’s requirements and ensure that their program is in compliance.

A recent medical review of Pulmonary Rehab programs by Palmetto GBA, the Part A MAC for Jurisdiction 11 (North Carolina, South Carolina, Virginia, and West Virginia) found charge denial rates of 76-93%. All PR providers could learn from the results of these reviews so I would like to share some of the major findings.

Claims were denied for the following reasons related to the requirements for:

Diagnosis

• The documentation submitted does not represent a patient with moderate to severe chronic obstructive pulmonary disease (COPD) as defined by the Gold Classification II, III, and IV per 42 CFR 410.47.
• The documentation of post-bronchodilator pulmonary function studies does not meet the requirement of FEV1 less than 80% of predicted and FEV1/FVC of less than 70%.

Physician Referral

• There is no physician’s order/referral for admission to pulmonary rehabilitation services present.

Required Program Components

• Does not contain the required components for pulmonary rehabilitation program as defined in 42 CFR 410.47
• There is no psychosocial assessment of the individual's mental and emotional functioning as it relates to their rehabilitation or respiratory condition.
• There is no outcomes assessment as a written evaluation of patient progress related to the rehabilitation.
• Does not contain mandatory individualized treatment plans as a written, established, reviewed, and signed by a physician every 30 days as defined in 42 CFR 410.47.
• There is no physician's prescribed exercise program present in the documentation.
• There is no documentation of the patient's education or training as it relates to care and treatment.

Frequency and Limits

• The documentation submitted does not meet the requirements for pulmonary rehabilitation services up to 36 and no more than two sessions per day as defined in 42 CFR 410.47.
• The documentation submitted does not meet the requirements for pulmonary rehabilitation services up to 72 sessions, with KX modifier and no more than two sessions per day as defined in 42 CFR 410.47.

Physician Oversight

• The documentation submitted does not indicate the supervising physician was available and accessible for medical consultations and emergencies at all times, when services were provided under the program as defined in 42 CFR 410.47.

As you can see, there are a lot of requirements which equals a lot of reasons for Medicare to deny your Pulmonary Rehab claim. Make sure you are following all of Medicare’s requirements so that you can continue to provide this valuable service and actually get paid for your work.

Every year, there are a number of Medicare provisions that expire on a particular date. For the requirements of these provisions to continue past the expiration date, Congress must take action through a new law. Such was the case for several rehabilitative therapy provisions set to expire at the end of 2013. The Pathway for SGR Reform Act of 2013, signed into law on December 26, 2013 extended the following provisions related to payments for Medicare outpatient therapy services through March 31, 2014.

Application of therapy caps and therapy threshold to therapy services furnished in a hospital outpatient department -

Therapy caps are a financial limitation on the amount Medicare allows for outpatient therapy services for a single Medicare patient in a given calendar year. The therapy cap amount for each patient starts over each January 1st. For 2014, the therapy cap is $1,920 for physical therapy (PT) and speech language pathology (SLP) services combined; and a separate $1,920 for occupational therapy (OT) services.

Exceptions process for outpatient therapy caps -

When providers of therapy services furnish medically necessary therapy services beyond the therapy cap, they may request an exception by appending the KX modifier to the appropriate therapy services on the claim. Additional information about the exception process for therapy services may be found in the http://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/clm104c05.pdf">Medicare Claims Processing Manual, Pub.100-04, Chapter 5, Section 10.3.

Manual medical review of outpatient therapy services exceeding the threshold amount -

Medicare mandates that a Medicare contractor perform a manual medical review of therapy services exceeding a $3,700 threshold for PT and SLP services combined and a $3,700 threshold for OT services. Currently this review function is being handled by Medicare Recovery Auditor contractors.

Critical Access Hospitals will also want to study MLN Matters Article MM8426 concerning the application of therapy caps, the exceptions process, and manual medical review to outpatient therapy services provided in the CAH setting.

So we are all set for … well, three months. If this year follows the pattern of previous years, another law will likely extend these provisions through the remainder of 2014. But, we will just have to wait and see.

One of the most significant changes to the Hospital Outpatient Prospective Payment System (OPPS) for 2014 was the packaging of clinical laboratory services. Prior to this year, clinical diagnostic laboratory tests were separately paid under OPPS at the Clinical Laboratory Fee Schedule (CLFS) payment rates. In 2014, most laboratory tests will be packaged under OPPS.

There are some limited exceptions where hospitals may receive separate payment for otherwise packaged lab services. Does your hospital understand these exceptions and do you know how to bill to receive payment in these circumstances?

The January OPPS Update MLN Matters Article and associated transmittal explain the details of when and how to appropriately receive separate payment for packaged laboratory services.

Packaged laboratory services are separately payable in three situations:

• 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.
• When laboratory tests are the hospital outpatient services that a patient receives during an outpatient encounter. For example, patients that are referred from a physician’s office or clinic to a hospital outpatient laboratory for laboratory testing only and no other outpatient services.
• 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.

For 2014, the packaged laboratory tests have a status indicator (SI) of “N” (packaged) – so how are hospitals to receive separate payment?

CMS is allowing hospitals to bill laboratory tests provided in any of the above listed exceptions on a 14X type of bill (TOB). Prior to this year, only non-patient services were required to be billed on a 14x TOB. Most outpatient laboratory services were generally billed on a 13x TOB. For 2014, in order to receive separate reimbursement for packaged laboratory services a hospital must submit the lab charges on a 14x claim. It is the hospital’s responsibility to determine which lab services meet the criteria for separate payment and therefore are appropriate for a 14x claim.

There are some exceptions to packaging of laboratory services:

• CMS did not package molecular pathology test codes since they are recently added laboratory codes. Since molecular pathology laboratory tests are not packaged under OPPS they should be billed on a 13x claim.
• Pathology, cytology and blood bank services are not packaged because they have a SI of “X” and are paid under OPPS, not under the CLFS.
• The status indicator for some other clinical lab tests remained “A” instead of being changed to the packaged status indicator “N” (for example new codes, screening services, and drug screening codes) so these will also still be separately paid under OPPS.

Hospitals should develop processes to ensure that lab tests that meet the criteria are submitted on a 14x claim while lab services that do not meet the criteria continue to be billed on a 13x TOB. These process changes may affect your outpatient laboratory, registration, and billing departments.

CMS’s Medicare Learning Network (MLN) offers a number of articles, booklets, podcasts and other educational materials to educate providers concerning Medicare requirements. MMP encourages providers to utilize these resources but also to be aware of the topics addressed. MLN educates concerning issues that Medicare contractors or other government entities have found to be at-risk areas for non-compliance. So the benefit of the MLN products is two-fold: identification of issues that you may need to consider for internal review and guidance on achieving compliance.

For example, MLN recently released an article (SE1401) on overpayments identified by Recovery Auditors when the wrong admission source is reported for a patient transferred from an acute care stay to a distinct-part psychiatric unit in the same facility. Inpatient psych facilities receive additional payment for the first day of admission if the facility has a qualifying emergency department. This payment is not appropriate if the patient is transferred from acute care to psych within the same facility. In order to prevent inappropriate overpayment, the Point of Origin for Admission or Visit Code "D" (formerly the Source of Admission Code) must be used when a patient is discharged from an acute-care stay in a hospital and transferred to the same hospital’s inpatient psychiatric Distinct Part Unit (DPU). This issue has also been identified on several OIG Hospital Compliance Audits.

This quarter’s Provider Compliance Newsletter did not address any inpatient hospital issues (perhaps due to the change in Medicare admission guidelines and the mandated delay in contractor reviews of medical necessity of admissions). Two articles did address outpatient hospital issues related to dose versus units billed for the drugs zolendronic acid (Zometa) and Adenosine. Correct billing of drug units is a long-standing compliance challenge for hospitals. Drugs units billed are based on the dosage administered and the HCPCS code description of the drug. For example, as noted in the Compliance newsletter, adenosine HCPCS code J0152 was defined as 30 mg. So an injection of 30 mg of Adenosine was properly billed as 1 unit of J0152.

Adding to the challenge of billing drug units correctly are changes in codes and/or descriptions. For 2014, Adenosine is now billed with HCPCS code J0151 which is per 1 mg – in 2014 a 30 mg injection of Adenosine will be billed as 30 units of J0151. And although the units describing Zometa have not changed, there have been 3 different codes within the past year (J3487 prior to July 1, 2013; Q2051 from July 1 through December 31, 2013; and J3489 effective January 1, 2014). In order to submit Medicare claims with compliant drug charges, hospitals must:

• have someone diligently watch for Medicare updates to drug codes and descriptions,
• verify their charge description master drug codes and “multiplier” units are correct and updated as needed, and
• ensure correct “translation” from the pharmacy module to the billing module.

One other MLN product that might be of interest to hospitals is the Discharge Planning booklet. Experienced case managers, discharge planners, and social workers are likely familiar with the information in the booklet, but it offers a good overview and links to the relevant Medicare manuals. It would be an excellent resource for new staff members dealing with discharge planning.

Providers should take advantage of the educational products provided by CMS and their area MACs. The information is good and the topics are important. And in the case of errors related to these topics, a hospital wouldn’t have much luck arguing they didn’t know the rules.

The Centers for Medicare and Medicaid Services (CMS) hosted a National Provider Call regarding the 2-Midnight Rule that went into effect on October 1, 2013 with the Fiscal Year (FY) 2014 IPPS Final Rule. For those of you that were unable to attend here is a run-down of 5 key takeaways from the session.

1. CMS is already planning future training sessions for Physician Orders/Certification and Transfers.
2. CMS has acknowledged that there could be times when an inpatient stay would still be appropriate even though an “unforeseen circumstance” occurs and the patient ultimately does not require a 2-Midnight or greater hospitalization. Specific examples from CMS have included patient death, transfer, leaving against medical advice (AMA) or the patient rapidly improving. New to this list is a patient that is admitted, documentation clearly supports a 2-Midnight expectation and the patient / family elect Hospice care and the patient is discharged home to hospice. Key to all of these “unforeseen circumstances” is that documentation in the record clearly supports the physician expectation of a 2-Midnight stay.
3. Effective December 1, 2013, the NUBC redefined Occurrence Span Code 72 to allow “Contiguous outpatient hospital services that preceded the inpatient admission” to be reported on inpatient claims. At this time this is a voluntary code but CMS encourages hospital to use this code.
4. Prior to opening the call up to questions and answers, CMS provided answers to two common questions that they had received prior to this call.
5. Q: How does level of care factor into the 2-Midnight Rule?
6. A: Under the 2014 IPPS Final Rule, the decision to admit is based on medical necessity of hospital care whether it is observation or inpatient care. If the answer is yes then the next question to ask is do you think this patient will be in the hospital for at least 2-Midnights?
7. Q: Can any elective surgeries be ok in Inpatient setting?
8. A: If there is an “unexpected circumstance” requiring 2-Midnights (i.e. a complication) then the stay would be appropriate as an Inpatient admission.
9. During the open Q&A session a question was asked regarding patients staying beyond 2-Midnights and whether or not a hospital would still be able to use InterQual® criteria. CMS responded by indicating that they believe hospitals will not use InterQual® or Milliman. They did go on to indicate that these screening tools could be used to help determine whether a patient should remain in the hospital or is safe for discharge.

The entire slide presentation from this call can be downloaded at http://www.cms.gov/Outreach-and-Education/Outreach/NPC/Downloads/2014-01-14-Midnight-Presentation.pdf

A Medicare patient presents to your hospital to have her pacemaker replaced. Is your hospital due a manufacturer’s credit because the pacemaker is still under warranty, is being recalled, or has malfunctioned? How do you know? If a credit is due, did you receive it? And if you received the credit, did you pass the appropriate information on to Medicare by including the correct modifiers and/or codes on the claim? Understanding and implementing the rules on credits for replaced devices is important in order to receive correct payment and to prevent non-compliance.

The Office of Inspector General (OIG) continues with their compliance reviews of hospitals which look at a number of high-risk issues that the OIG has previously identified. One issue that affects both inpatient and outpatient billing and appears on almost every OIG compliance audit is “manufacturer credits for replaced medical devices not reported.” For example, in four compliance audits published in September, overpayments for manufacturer credits not reported totaled almost $350,000.

Federal regulations require reductions in the inpatient (IPPS) or outpatient (OPPS) payment for the replacement of an implanted device if

1. the device is replaced without cost to the provider or the beneficiary,
2. the provider receives full credit for the device cost, or
3. the provider receives partial credit equal to or greater than 50 percent of the cost of the replacement device.

The biggest challenge for hospitals is not the billing instructions (explained below), but internal policies and processes to identify, obtain, and properly report credits from medical device manufacturers. Within the hospital, this will require coordination and communication between the hospital purchasing department, the product manufacturer, the department performing the procedure (usually cardiology or surgery), patient accounts, and possibly the physician performing the procedure.

Making this even more difficult is the government’s expectation that not only will hospitals correctly report credits they have received, but also that they be aware of when they are due a credit. The Medicare Provider Reimbursement Manual states that Medicare providers are expected to pursue free replacements or reduced charges under warranties for medical devices. The OIG discusses this in their reports as the “prudent buyer principle.”

A recent FDA rule may make the process easier for hospitals to track devices. On September 25, 2013, the FDA finalized a rule that requires most medical devices to have a “unique device identifier” (UDI). This will allow devices to be tracked from the manufacturer to the seller to the buyer to the patient. This new identifier may assist hospitals in tracking credits received and credits due them.

The instructions for reporting device credits on the Medicare claim are found in the Medicare Claims Processing manual: Chapter 3, section 100.8 for inpatient claims and Chapter 4, section 61.3 for outpatient claims.

Inpatient Claims

The important things to remember for inpatient billing regarding device credits include:

• Report condition code 49 or 50 -
• 49 Product Replacement within Product Lifecycle—Replacement of a product earlier than the anticipated lifecycle due to an indication that the product is not functioning properly.
• 50 Product Replacement for Known Recall of a Product—Manufacturer or FDA has identified the product for recall and therefore replacement.

• Report value code FD with the amount of the credit, or cost reduction, received by the hospital for the replaced device. Medicare deducts this amount from the final IPPS payment.
• Inpatient device credits only apply to specific MS-DRGs defined by Medicare. A list of the applicable DRGs can be found in MLN Matters Article MM7457.

Outpatient Claims

Outpatient claims must include:

• Modifier FB when the hospital receives a device at no cost or with full credit -
• If the replacement device costs the same or less than the device being replaced, the hospital would report a charge of less $1.01 for the replacement device.
• If the replacement device costs more than the credit for the device being replaced, the hospital would report a device charge of the difference between its usual charges for the replacement device and the device being replaced.
• Modifier FC when the hospital receives a partial credit of 50 percent or more of the cost of a new replacement device due to warranty, recall, or field action.
• Modifiers FB and FC are applied to the procedure code (not the device code)
• Medicare payment is reduced by the full offset payment amount for modifier FB and partial offset amount for modifier FC.
• Outpatient device credits only apply to specific APCs defined by Medicare. The list of applicable APCs can be found at the Hospital OPPS webpage.

MMP encourages hospitals to make sure they have sufficient systems in place to identify manufacture credits for replaced devices they are due or have received, and to perform correct billing to report these credits. Remember, the OIG is watching!

For continuing to provide quality patient care while dealing with Medicare’s ever-increasing requirements, MMP applauds the providers of all types of rehabilitative therapy services, with a special recognition of physical therapy providers during October, Physical Therapy Month. We hope our articles on therapy issues help therapists to understand and better implement Medicare’s rules. With that in mind, I would like to address the requirements for the use of the Advance Beneficiary Notice (ABN) for outpatient therapy services.

Prior to January 2013, therapy services provided to a patient that exceeded the therapy cap and were not medically necessary were denied as a benefit category denial. That meant the patient was liable for payment and although encouraged, a notification of liability did not have be given to the patient. The American Tax Relief Act changed denials above the therapy cap amount to be provider liable unless the patient is issued an ABN. Since therapy services below the cap have always required an ABN for patient liability, this change provides more consistency. Now, all therapy services that are not medically necessary, above or below the therapy cap amount, require that an ABN be issued to the patient so that the patient can choose whether to obtain the services and accept financial responsibility for them.

So practically, when would a therapist provide medically unnecessary services? The scenario that requires an ABN be given that I have seen most often is when patients have been receiving therapy services for a condition for a while. The patient’s progress plateaus or reaches its maximum potential for that patient in the therapist’s opinion. Sometimes such patients do not want to discontinue therapy services but the therapy is no longer “medically necessary” according to Medicare requirements. This is an appropriate time to issue an ABN to the patient. The challenge here is explaining the situation to the patient so that he or she understands the Medicare regulations and their impending liability. Just another one of the challenges therapists face beyond their clinical duties!

See the last two pages of MLN Matters Article MM8404 for more information on outpatient therapy services use of an ABN.

The hardest part of Medicare’s new guidance is understanding all of the details and nuances of the rules. For example, there were some surprising guidelines in the temporary instructions for the implementation of the final rule for Part A to B billing of denied hospital inpatient claims that could have a financial impact on hospitals. Drug administrations and nebulizer treatments are some of the more frequent Part B services provided to inpatients and now Medicare is saying these services are not billable on a Part B inpatient claim. I understand these services are included in the room and board charge for inpatients, but how is a hospital to recoup the cost of these services when billing under Part B if these services are not separately billable and there is no inpatient Part A payment?

The temporary instructions were published September 16th in MLN Matters article (SE1333).   A lot of the guidance in this article simply reaffirms the instructions from the final rule. MMP presented that information several weeks ago in an article titled “If ‘A’ Doesn’t Work, Try ‘B’”. 

As a reminder, the basic rule for admissions on or after October 1, 2013 is:

“When an inpatient admission is found to be not reasonable and necessary, the Centers for Medicare & Medicaid Services (CMS) will allow payment of all hospital services that were furnished and would have been reasonable and necessary if the beneficiary had been treated as an outpatient, rather than admitted to the hospital as an inpatient, 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 outpatients and not inpatients.”

So this week, I would like to point out a few items from the temporary instructions that are new or clarified guidance.

• One of the most significant clarifications concerns the billing of infusions and injections and nebulizer treatments on the Part B inpatient claim. The article clarifies that routine services generally captured in the room and board rate are not separately billable Inpatient Part B services. This includes IV infusions and injections, blood administrations, and nebulizer treatments provided by the floor nurse.
• In the case of UR self-audit determination that the stay was not medically necessary, the hospital must submit a no-pay, provider liable Part A claim and receive a denial before submitting the Part B inpatient claim (12x type of bill). Provider liability is indicated by the inclusion of Occurrence Span Code “M1” and the inpatient admission Dates of Service on the no-pay inpatient claim. If a Part A claim for payment has already been submitted, the hospital must cancel that claim, submit the no-pay claim, and receive a denial prior to billing Part B.
• Services provided prior to the admission order are billed on a 13x outpatient claim; services provided after the admission order are billed on the 12x Part B inpatient claim. This means “inpatient-only” services (such as procedures on the inpatient only list) provided prior to the admission may not be reported on the inpatient claim even though they are not payable on the outpatient claim. Also if observation services are continued after the admission order is written, they are not billable on the inpatient claim since they are exclusively “outpatient” services.
• The article includes a listing of revenue codes not covered under inpatient Part B medical necessity denials. However, note that when a revenue code can be sometimes covered and sometimes not covered, providers should use the HCPCS code to determine if the service is covered.
• The article encourages providers to remember the medical necessity requirements for outpatient services, specifically those outlined in local coverage determinations (LCDs), and to include all diagnosis codes to support these medical necessity requirements on both the Part B inpatient and outpatient claims.
• Billing of limited Part B services still applies when there is no Part A payment because the beneficiary is not entitled to Part A benefits or has exhausted Part A benefits.

Please refer to the article for complete information including the specific claim requirements for the Part A provider liable claim and the Part B inpatient claim.

With just 40 days until the 2014 Final Rule goes into effect, there are significant changes for hospitals to digest and develop a plan to educate key stakeholders. Ongoing improper payments for short-stay hospital claims prompted two of the biggest changes. These two changes are the Two-midnight Benchmark and the Two-midnight Presumption Medical Review Policies.

Two-midnight Benchmark: Patient Status Guidance for Admitting Physicians

Historically, the decision to admit a beneficiary as an inpatient was based on a 24 hour benchmark. In the Final Rule CMS specifies “that the 24 hours relevant to inpatient admission decisions are those encapsulated by 2 midnights. This distinction is consistent with our application of Medicare utilization days, which are based on the number of midnights crossed.”

The two-midnight benchmark is intended as guidance for Physicians in identifying those patients that are appropriate for inpatient admissions. Specific 2 midnight guidance includes:

• There are two indications for a Physician to write an inpatient admission order:
• If the Physician has the expectation that a beneficiary’s length of stay (LOS) will be longer than 2 midnights.
• If the beneficiary undergoes an inpatient only procedure. In this instance, CMS acknowledges that there are times when a beneficiary would not require a two-midnight stay after an inpatient only procedure and they indicate “that procedures on the OPPS inpatient-only list are always appropriately inpatient, regardless of the actual time expected at the hospital so long as the procedure is medically necessary and performed pursuant to a physician order and formal admission.”
   
• The decision to write an inpatient admission order should be based on:
• The Physician expectation that the beneficiary will require medical care beyond 2 midnights.
• Factors leading a Physician to write an inpatient admission order need to be clearly and completely documented in the medical record. Supportive documentation would include “complex medical factors such as history and comorbidities, the severity of signs and symptoms, current medical needs, and the risk of an adverse event.”
• Note: Factors that could result in an inconvenience to the beneficiary and/or family are NOT justification for an inpatient admission.
  
  
• Timing for the two-Midnight Benchmark:
• If the Physician does not expect that a beneficiary will need medical services beyond 2 midnights then the beneficiary should be placed in outpatient with observation services. “As new information becomes available, the physician must then reassess the beneficiary to determine if discharge is possible or if it is evident that an inpatient stay is required.”
• After one midnight has past, “the decision to admit becomes easier as the time approaches the second midnight, and beneficiaries in medically necessary hospitalizations should not pass a second midnight prior to the admission order being written.”
• Currently, the inpatient admission starts at the date and time that the admission order is written. This will continue to apply on or after October 1st.
  
  However, final rule guidance directs that the decision to admit is based on all of the time a beneficiary is in the hospital, including any initial outpatient services. “In other words, if the physician makes the decision to admit after the beneficiary arrived at the hospital and began receiving services, he or she should consider the time already spent receiving those services in estimating the beneficiary’s total expected length of stay.”
  
  Services that are to be considered toward the 2 midnight expectation include observation services, treatment in the emergency department and procedures performed in the operating room or other treatment areas.
  
  
• Example: A beneficiary spends one midnight as an outpatient observation or has routine recovery following an outpatient surgery. The following day the physician reassesses the beneficiary and expects that he will need another midnight of medical services. At this point the physician should take the time spent in outpatient observation or routine outpatient surgery recovery into consideration that the 2 midnight benchmark will be met and an inpatient admission order should be written.
  
  
• Potential Exceptions when Inpatient Admission May Not span two-midnights: 
• When a physician has an expectation that a beneficiary will remain in the hospital beyond 2 midnights and “the beneficiary improved more rapidly than the physician’s reasonable, documented expectation. Such unexpected improvement may be provided and billed as inpatient care, as the regulation is framed upon a reasonable and supportable expectation, not the actual length of care, in defining when hospital care is appropriate for inpatient payment.”
• “If an unforeseen circumstance, such as beneficiary death or transfer, results in a shorter beneficiary stay than the physician’s expectation of at least 2 midnights, the patient may be considered to be appropriately treated on an inpatient basis, and the hospital inpatient payment may be made under Medicare Part A.”

2-midnight Presumption: Guidance for Medical Reviewers

The 2-midnight presumption “directs medical reviewers to select claims for review under a presumption that the occurrence of 2 midnights after admission appropriately signifies an inpatient status for a medically necessary claim.” Under this revised policy, the main focus of review efforts will now be on inpatient short stays with a LOS of 1 midnight or less.

In addition to this shifted focus, CMS will also be monitoring for “evidence of systematic gaming, abuse or delays in the provision of care in an attempt to qualify for the 2-midnight presumption (that is, inpatient hospital admissions where medically necessary treatment was not provided on a continuous basis throughout the hospital stay and the services could have been furnished in a shorter timeframe).”

Reviews contractors will continue to assess claims that cross 2 midnights to ensure the medical necessity of services provided, that the hospitalization was medically necessary, to validate coding and documentation and when directed by the CERT Contractor or other governmental entity to do so.

• What Medicare Review Contractors are looking for in the Medical Record:
• A physician order for an inpatient admission to the hospital.
• Required elements of the physician certification.
• Medical documentation supporting that the decision to admit as an inpatient was reasonable and necessary.
• “Contractors will consider complex medical factors that support a reasonable expectation of the needed duration of the stay relative to the 2-midnight benchmark. Both the decision to keep the beneficiary at the hospital and the expectation of needed duration of the stay are based on such complex medical factors as beneficiary medical history and comorbidities, the severity of signs and symptoms, current medical needs, and the risk (probability) of an adverse event occurring during the time period for which hospitalization is considered.”
  
  
• Certification and Recertification of the need for Inpatient Admission:
• The physician must certify and recertify that inpatient services are medically necessary. CMS clarified that the relationship between the physician order and physician certification by adding language to 42 CFR 412.3(c) that “the physician order also constitutes a required component of the physician certification of the medical necessity of hospital inpatient services under Part 424 of this chapter.”
• Physicians need to be mindful that the admission order and physician certification are not conclusive proof that an admission was medically necessary but two pieces of information to be considered along with documentation in the medical record.
• CMS is requiring that for inpatient admissions the certification has to be completed, signed and documented in the medical record before the beneficiary is discharged.
• Guidance on the certification requirements can be found in the Code of Federal Register (CFR) at §424.10, §424.11 and §424.
• Note: CMS indicated in an August 15, 2013 Open Door Forum that they will be providing further guidance in the near future on how to satisfy this requirement.
  
  
• Reasonable and Necessary Admissions:
• Commenter’s of the Final Rule requested additional guidance as to what criteria would support a reasonable and necessary admission.
  
  CMS Response:
  “Medicare review contractors must abide by CMS policies in conducting payment determinations, but are permitted to take into account evidence-based guidelines or commercial utilization tools that may aid such a decision. We also acknowledge that this type of information may be appropriately considered by the physician as part of the complex medical judgment that guides his or her decision to keep a beneficiary in the hospital and formulation of the expected length of stay. As we update our manuals and take additional steps to implement this rule, we anticipate using our usual processes to develop and release subregulatory guidance such as manual instructions and education materials, which may include open door forums, regional meetings, correspondence and other ongoing interactions with stakeholders; and that our contractors will continue to involve local entities as they implement these rules.”
  
  
• Beneficiary Status Order:
• “The order serves the unique purpose of initiating the inpatient admission and documenting the physician’s (or other qualified practitioner as provided in the regulations) intent to admit the patient, which impacted its required timing. Therefore, we are specifying in new paragraph (d) of §412.3 that ‘The Physician order must be furnished at or before the time of the inpatient admission”
• An order to “Admit to ICU” or to “Admit” is no longer sufficient for an inpatient status order. The order “must specify the admitting practitioner’s recommendation to admit “to inpatient,” “as an inpatient,” “for inpatient services,” or similar language specifying his or her recommendation for inpatient care.”
• If Physicians and Review Contractors can consider time spent in outpatient towards the inpatient admission does that mean that this time can count towards the 3 day requirement for Skilled Nursing Facility (SNF) services?
• Per CMS, “We reiterate that the physician order, the remaining elements of the physician certification, and formal inpatient admission remain the mandated means of inpatient admission. While outpatient time may be accounted for in application of the 2-midnight benchmark, it may not be retroactively included as inpatient for skilled nursing care eligibility or other benefit purposes. Inpatient status begins with the admission based on a physician order.”

CMS held an Open Door Forum this past Thursday August 15th regarding the Final Rule. After participating in this call, it appears that there are more questions than answers. In fact, CMS encourages everyone to send them questions at  IPPSAdmissions@cms.hhs.gov. They indicated that they will be providing further guidance in the near future. Be assured that as additional guidance is provided we will be sharing it with you.

Edits for outpatient ESRD dialysis HCPCS code G0257 went into effect October 1, 2012. See MLN Matters Article MM7762. Claims will be returned if G0257 is reported on a Type of Bill (TOB) other than 13x or 85x.

• HCPCS code G0257 should only be reported for dialysis performed on hospital outpatients who have ESRD (TOB 13X or 85X) that meet the criteria as described in the Medicare Claims Processing manual, chapter 4, section 200.2.
• CPT code 90935 is reported for:
• Part B services (TOB 12x) for dialysis for hospital inpatients (with or without ESRD) who do not have Part A coverage, and for
• hemodialysis performed on non-ESRD hospital outpatients (TOB 13x or 85x).