Knowledge Base Category -

“I’m late! I’m late! For a very important date!”- The White Rabbit in the 1951 Disney Classic Alice in Wonderland

Much like the White Rabbit, CMS was a day late in the release of the Fiscal Year (FY) 2017 Inpatient Prospective Payment System (IPPS) Final Rule. Late or not, CMS noted in a related Fact Sheet that this rule finalizes policies that continue their commitment to increasingly shift Medicare payments from volume to value. This article focuses on final revisions made to the general acute care hospital Quality Programs.

HOSPITAL INPATIENT QUALITY REPORTING (IQR) PROGRAM

The Hospital IQR Program is a pay-for-reporting program established by the Medicare Prescription Drug, Improvement, and Modernization Act. General acute care hospitals successfully participating in this program and are also meaningful electronic health record (EHR) users will receive approximately 0.95 percent increase in their operating payment rates. The Final Rule finalized changes to this program for FY 2018 and FY 2019 payment determinations.

FY 2018 Program Year: Two Claims Based Measure Refinements

PN Payment: Hospital-Level, Risk-Standardized 30-Day Episode-of-Care Payment Measure for Pneumonia (NQF #2579)

This measure cohort will be expanded to include hospitalizations for patients with

• Principal discharge diagnosis of pneumonia, including not only viral or bacterial pneumonia, but also aspiration pneumonia; and
• Principal discharge diagnosis of sepsis (but not severe sepsis) with a secondary diagnosis of pneumonia (including viral or bacterial pneumonia and aspiration pneumonia) coded as present on admission (POA).

PSI 90: Patient Safety and Adverse Events Composite Measure (NQF #0531): The modified PSI 90 composite was adopted for the IQR Program. See table 3 for further detail.

FY 2019 Program Year: 15 Measures Removed & Four New Measures Added

CMS finalized the proposal to remove 15 measures for the FY 2019 payment determination and subsequent years (see Table 1).

Table 1: Measures Finalized for Removal for the FY 2019 Payment Determination and Subsequent Years

‍Four New Measures to be added to the Hospital IQR Program for the FY 2019 Payment Determination and Subsequent Years.

Table 2: New Measures Finalized for FY 2019 Payment Determination and Subsequent Years

CMS notes that the new “measures capture Medicare payment for services related to the episode procedure and take into account beneficiaries’ clinical complexity as well as geographic payment differences. We proposed these clinical episode-based measures to supplement the Hospital IQR Program’s Medicare Spending per Beneficiary (MSPB) Measure….the measures also support our mission to provide better healthcare for individuals, better health for populations, and lower costs for healthcare.”

In response to stakeholder concerns that these measures overlap with the Medicare Spending Per Beneficiary (MSPB) Measure, CMS notes “that unlike the overall MSPB measure, the clinical episode-based payment measures assess payment variation at the procedure level and only include services that are clinically related to the named episode procedure (for example, the spinal fusion measure includes inpatient admissions for “medical back problems” that occur following the initial spinal fusion procedure since the admission is likely a result of complications from the initial procedure).”

HOSPITAL VALUE BASED PURCHASING (VBP) PROGRAM

The Act instructs the Secretary to reduce the base operating DRG payment amount for a hospital for each discharge in a fiscal year by an applicable percent to fund this budget neutral program. CMS indicates in Table 16A of the Final Rule that the estimated amount available for value-based incentive payments to hospitals for FY 2017 is approximately $1.8 billion. Actual amounts will be displayed in Table 16B that is expected to be posted in October of this year.

FY 2019 Program Year: New Domain Name and Expansion of location for CAUTI and CLABSI

The Patient-and-Caregiver-Centered Experience of Care/Care Coordination Domain will become simply the Person and Community Engagement Domain.

The NHSN (National Health Safety Network) CAUTI (Catheter-Associated Urinary Tract Infection) and CLABSI (Central Line-Associated Blood Stream Infections) outcome measures will include select ward (non-ICU) locations. “This expansion of the CAUTI and CLABSI measures aligns with the Hospital IQR Program. It also aligns with the HAC Reduction Program, which adopted the expansion of the CAUTI and CLABSI measures beginning with its FY 2018 program year (80 FR 49576 through 49578).”

FY 2021 Program Year: Two New Condition-Specific Payment Measures and Expansion of a 30-Day Mortality Measure Cohort

Two New Measures

Hospital-Level, Risk-Standardized Payment Associated with a 30-Day Episode-of-Care for Acute Myocardial Infarction (AMI) (NQF #2431), and

Hospital-Level, Risk-Standardized Payment Associated with a 30-Day Episode-of-Care for Heart Failure (HF) (NQF #2436).

Expansion of 30-Day-PN Mortality Cohort

Also for the FY 2021 Program Year, CMS finalized expansion of the cohort used for the 30-Day-PN Mortality measure to include patients with a principal discharge diagnosis of pneumonia, patients with a principal diagnosis of aspiration pneumonia and patients with a principal diagnosis of sepsis with a secondary diagnosis of pneumonia coded as present on admission (POA).

FY 2022 Program Year: CMS finalized the addition of Hospital 30-Day, All-Cause, Risk-Standardized Mortality Rate (RSMR) Following CABG Surgery (NQF #2554) (MORT-30-CABG) measure.

HOSPITAL ACQUIRED CONDITIONS (HAC) REDUCTION PROGRAM

This program creates an incentive for reducing the incidence of HACs by adjusting payments to hospitals in the worst performing quartile for HACs. CMS finalized the following five changes to the existing HAC Reduction Program policies:

• Clarified data requirements for Domain 1 (PSI-90),
• Established National Health Safety Network (NHSN) Centers for Disease Control and Prevention (CDC) Healthcare Associated Infection (HAI) data submission requirements for newly opened hospitals,
• Established performance periods for the FY 2018 and 2019 HAC Reduction Program,
• Adopted the refined Patient Safety Indicator (PSI) 90: Patient Safety for Selected Indicators Composite Measure (NQF #0531) beginning with the FY 2018 payment determination.
• Changed the Program scoring methodology from the current decile-based scoring to a continuous scoring methodology.

FY 2018 Program Year: Finalized Refinements to PSI 90

• First, the name of the PSI 90 measure will change to “Patient Safety and Adverse Events Composite: (NQF #0531).
• Second, the modified PSI 90 measure will include three new indicators (PSI-09, PSI-10 and PSI-11),
• Third, two Indicators will be re-specified in the modified PSI 90.
• PSI-12 Perioperative Pulmonary Embolism (PE) or Deep Vein Thrombosis (DVT) Rate no longer includes ECMO procedures in the denominator or isolated deep vein thrombosis (DVT) of the calf veins in the numerator.
• PSI 15 Accidental Puncture and Laceration Rate is now limited to discharges with an abdominal/pelvic operation, rather than including all medical and surgical discharges.
• Fourth, PSI-07 Central venous catheter-related blood stream infections rate will be removed in the modified PSI 90.
• Fifth, weighting of component indicators will be based not only on volume of each patient safety and adverse events, but also the harms associated with the events.

PSI 90: To Expand from 8 to 10 Indicators for FY 2018 Program

Table 3: PSI 90: Patient Safety and Adverse Events Composite (NQF #0531) for FY 2018

‍HOSPITAL READMISSIONS REDUCTION PROGRAM (HRRP)

This program requires a reduction to a hospital’s based operating DRG payment to account for excess readmissions associated with the applicable conditions. For FY 2017 and subsequent years, a hospital’s potential reduction will be based on a risk-adjusted readmission rate during a three-year period for the following six conditions:

• Acute Myocardial Infarction (AMI),
• Heart Failure (HF),
• Pneumonia (PN),
• Chronic Obstructive Pulmonary Disease (COPD),
• Total Hip Arthroplasty/Total Knee Arthroplasty (THA/TKA), and
• New Condition for FY 2017 (pursuant to prior rulemaking): All-Cause, Unplanned Readmission Following Coronary Artery Bypass Graft (CABG) Surgery (inclusion of this condition was finalized in the FY 2015 IPPS/LTCH Final Rule).

CMS is updating the public reporting policy so that excess readmission rates will be posted to the Hospital Compare website as soon as feasible following the hospitals’ preview period.

More Than Half a Billion Dollars in Readmission Penalties for FY 2017

Set to begin October 1, 2016, Jordan Rau of Kaiser Health News (KHN)reports that readmission penalties are set to reach a new high of more than half a billion dollars in payments being withheld in the coming fiscal year. To see if and how much your hospital will be penalized you can get the data in KHN’s Article Medicare's Readmission Penalties Hit New High.

Resources

CMS Fact Sheet Announcing release of 2017 IPPS Final Rule: https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2016-Fact-sheets-items/2016-08-02.html

2017 IPPS Final Rule (Display copy): https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/FY2017-IPPS-Final-Rule-Home-Page-Items/FY2017-IPPS-Final-Rule-Regulations.html?DLPage=1&DLEntries=10&DLSort=0&DLSortDir=ascending

With the release of the 2017 IPPS Final Rule last week, we are one step closer to the MOON. The Medicare Outpatient Observation Notice (MOON) is a requirement of the August 6, 2015 Notice of Observation Treatment and Implication for Care Eligibility Act (the NOTICE Act). Guidance for provision of the MOON to Medicare beneficiaries was in the 2017 IPPS Proposed Rule. This week we will walk through the 2017 IPPS Final Rule, which is not the final step to the MOON.

When to Begin Providing the MOON?

The NOTICE Act provided the effective date for this notification to begin 12 months after enactment of the Act on August 6, 2015.

However, in the Final Rule, CMS indicates the standardized notice, the MOON, is going through the Paperwork Reduction Act (PRA) approval process and is subject to a 30-day public comment period that begins on the date of publication of Final Rule. “Following review of comments and final approval of the MOON under the PRA process, hospitals and CAHs must fully implement use of the MOON no later than 90 calendar days from the date of PRA approval of the MOON.” So, when will you be required to provide the Moon?

• Public Comment Period: August 22nd through September 21st

The Final Rule is scheduled for publication in the Federal Register on August 22nd. The public will have 30 days after that to “comment” on the form which puts us at September 21st.

• PRA Process: At a minimum November 20th

An FAQ regarding how long the PRA clearance process takes indicates that “the complete review and approval process can take anywhere from 6-9 months, depending on the number of requests currently in the process and the data collection of the subject matter. This estimate includes the 60-day and 30-day public comment periods and the 60 days OMB has to review and act upon each submission.

• PRA approval to Full Implementation of the MOON: Date TBD

CMS notes the implementation date will be announced on the CMS Beneficiary Notices Initiative Web site at: https://www.cms.gov/Medicare/Medicare-General-Information/BNI/index.html and in an HPMS memorandum to MA plans.

Further, “Hospitals and CAHs will be required to deliver the MOON to applicable patients who begin receiving observation services as outpatients on or after the notice implementation date.”

Who should receive the MOON?

Insurance Coverage

Individuals entitled to benefits under Title XVIII of the Act, whether or not the services furnished are payable under the title should receive the MOON when he/she receives observation services as an outpatient for more than 24 hours. This would include the following:

• The individual enrolled in Medicare Part A and Part B,
• The individual enrolled in Medicare Part A only “would still receive notice even though the observation services received as an outpatient fall under the Part B benefit and would not be covered or payable by Medicare for that person,”
• Individuals enrolled in a Medicare Advantage (MA) or other Medicare health plan, and
• Individuals where Medicare or MA is the secondary payer. CMS notes “the applicability of the notice requirement depends on whether the individual is entitled to benefits under Title XVIII, not on whether Medicare makes payment (primary or otherwise).”

States with a similar Notice Requirement

“The NOTICE Act specifically requires hospitals and CAHs to deliver notice (written and oral)…to Medicare beneficiaries who receive observation services as an outpatient for more than 24 hours. The MOON satisfies the written NOTICE Act requirement for a designated population of Medicare beneficiaries receiving a specific set of services.”

Comments were submitted noting that several states are already required to provide a notice similar to the MOON and it would be beneficial to allow for delivery of the MOON to a broader population (i.e. all Outpatients) to avoid confusion. CMS, reiterated that the NOTICE Act specifically requires provision of the MOON to outpatients receiving observation services and provided the following guidance:

• On a state-by-state basis Hospitals and CAHs will need to determine if delivery of the MOON fulfills individual state requirements.
• When State law, “requires notification to Medicare beneficiaries who receive observation services as an outpatient for more than 24 hours and requires such notice to contain content that is not included in the MOON, hospitals may utilize the free text field in the MOON’s “Additional Information” section for communicating such additional content.”
• “Hospitals and CAHs subject to State law notice requirements may also attach an additional page to the MOON to supplement the “Additional Information” section in order to communicate additional content required under State law, or may attach the notice required under State law to the MOON.”

Timing of Delivery of the MOON

Before 24 Hours of Observation

A commenter noted that while the NOTICE Act requires delivery of the MOON to individuals receiving more than 24 hours of observation services as an outpatient, there are State specific laws that require written notice within 24 hours of initiation of services.

CMS clarified “that hospitals and CAHs may deliver the MOON before an individual has received more than 24 hours of observation services as an outpatient.”

After 24 Hours of Observation

Even with this clarification CMS went on to indicate “that we do not encourage hospitals and CAHs to deliver the MOON at the initiation of outpatient observation services. Routine and systematic delivery of the MOON by a hospital or CAH at the initiation of observation services would, in effect, render the MOON a notice of receiving outpatient observation services, as all patients receiving observation services would be given the MOON independent of the length of time they received observation services.”

When does the 24 hour timeframe begin?

Several commenters requested clarification as to whether the timeframe starts:

1. After services begin following the written order for observation services;
2. When related services commence if such services commence before the written order was executed and the patient occupies an outpatient bed count; or
3. Based on the documentation of when nursing care began.

CMS indicated “there may be times when an individual is subject to an order for observation services, but is not actually receiving observation services. For example, following an order for observation services in an emergency department, a hospital may need to wait to begin furnishing observation services until a bed is available for the patient. In this situation, services are considered initiated when observation services commence.”

They went on to clarify “that the start of observation services, for the purposes of determining when more than 24 hours of observation services have been received, is the clock time as documented in the patient’s medical record at which observation services are initiated (furnished to the patient) in accordance with a physician’s order.”

What if a Resident writes the order?

Several commenters also requested clarification when the order for observation services was written by a resident. CMS responded that “to the extent that a resident is authorized by State licensure law and hospital staff bylaws to order outpatient services, once observation services are initiated in accordance with the resident’s order, the 24 hour time period will commence.”

Billable or Elapsed Time to Count the Hours?

A commenter noted that the counting of hours could be interpreted as elapsed time or billable time. CMS believes using elapsed time is most consistent with language in the NOTICE Act. “Therefore, for purposes of identifying the 24-hour timeframe for which an individual has received observation services, and thus is required by the NOTICE Act to receive notice by the hospital or CAH, observation time will be measured as the elapsed time in hours beginning at the clock time documented in the patient’s medical record, which coincides with the time that observation care is initiated in accordance with a physician’s order.”

How will the MOON work with the 2-Midnight Policy?

“The NOTICE Act requires hospitals to inform patients who have remained outpatients of the hospital and received observation services for more than 24 hours that they are not hospital inpatients and are subject to potentially different cost-sharing requirements and postacute care benefits than someone who has been admitted as an inpatient. We note that a scenario could arise whereby a patient is admitted to the hospital immediately after being a hospital outpatient receiving observation services for greater than 24 hours. In such a scenario, the inpatient admission may be payable under Medicare Part A under the 2-midnight policy and, as stated earlier, the hospital or CAH would still be required to furnish the MOON to the patient within 36 hours after the time the individual begins receiving observation services.”

What if the Inpatient Admission occurs prior to delivery of the MOON?

As recommended by a commenter, CMS agrees that when “an inpatient admission occurs prior to delivery of the MOON, the MOON should be annotated with date and time of the inpatient admission. Therefore, we are requiring that, in the event that a patient is subsequently admitted as a hospital inpatient directly after receiving observation services for more than 24 hours, and the inpatient admission occurs prior to delivery of the MOON, the MOON be annotated with the date and time of the inpatient admission. Additional guidance regarding elements for the free text field of the MOON will be provided in the CMS Internet Only Manual.”

Written Notice Requirements

A standard notice (the MOON) is to be used by all hospitals and CAHs. Several comments were submitted regarding the form content and format. Changes made in response to comments include:

• A reduced number of fillable fields on the MOON, specific examples provided by CMS include:
• The physician name and the date and time observation services began are no longer on the notice,
• The field for the hospital name was removed. CMS indicated that consistent with current beneficiary notices, and as will be detailed in future guidance, hospitals will be permitted to preprint the MOON to include their hospital name and logo at the top of the notice.
• One commenter suggested making the MOON a single page. CMS noted this would require the font to be too small but did note that hospitals may print the MOON as two sides of a single page.
• The CMS’s Office of Communications performed a plain language review and appropriate changes were incorporated wherever possible.
• In response to suggestions to keep the focus of the MOON on status and related coverage and cost-sharing implications, the QIO contact section was removed from the MOON.

What “Additional Information” is expected to be included in this section of the MOON?

CMS generally does not specify expected language for additional information of beneficiary notices. However, they believe this section may be used for the following:

• A place to include information such as unique circumstances regarding the particular patient,
• A place to note when a beneficiary refuses to sign the MOON,
• A place to note hospital waivers of the beneficiary’s responsibility for the cost of self-administered drugs,
• Part A cost sharing responsibilities if the beneficiary is subsequently admitted as an inpatient, or specific information for contacting hospital staff.

Required Retention of the MOON in the Medical Record

Several commenters requested clarification on how the document must be maintained. CMS indicated that “consistent with longstanding practice in implementing beneficiary notices, we will require that hospitals and CAHs retain a signed copy of the MOON. Such a practice assures both hospitals and CAHs and surveyors that the appropriate notices have been delivered as required. However, in the past, we have permitted providers to determine the method of storage. This same flexibility will be afforded to hospitals and CAHs delivering the MOON. Hospitals and CAHs may choose to retain a signed notice as a hard copy or electronically.”

Delivering the MOON

CMS proposed the use of the MOON to include all of the information elements required by section 1866(a)(1)(Y)(ii) of the Act to fulfill the written notice requirement of the NOTICE Act. An English language version of this notice has been submitted to the OMB for approval. Once the English language version is approved a Spanish language version will be made available.

CMS notes that if an individual cannot read the MOON or comprehend the required oral explanation, they expect hospitals and CAHs to employ their usual procedures to ensure notice comprehension and refers you to the Medicare Claims Processing Manual (Pub. 100-4), Chapter 30, Section 40.3.4.3, for similar existing procedures related to comprehension of the Advance Beneficiary Notice of Noncoverage (ABN). CMS finalized the proposed provisions for delivering the MOON without modification.

Oral Notice

Several commenters questioned how they should handle and document the oral explanation required by the NOTICE Act. Interestingly, one commenter recommended that CMS allow the oral explanation to be delivered as a video presentation with staff being present to answer any questions and provide additional explanation when needed. The following are CMS responses to comments and questions:

• The statute requires an oral explanation of the written notification, or MOON.
• A video presentation is acceptable if there is someone available to answer questions.
• The NOTICE Act requires delivery of a written and oral explanation of the MOON when notice delivery is required.

Signature Requirements

The NOTICE Act sets forth that the written notice must be:

• Signed by the individual receiving observation services as an outpatient, or
• Signed by a person acting on the individual’s behalf to acknowledge receipt of the notice, or
• If the individual or person refused to provide a signature, “the written notification is to be signed by the staff member of the hospital or CAH who presented the written notification and certain information needs to be included with such signature.” The “certain information” to be included is the staff member’s name and title, a certification statement that the notice was presented, and the date and time the notice was presented.

CMS finalized the proposed signature requirements without modification.

No Appeal Rights under the NOTICE Act

In the proposed rule CMS stated the NOTICE Act “does not afford appeal rights to beneficiaries…to provide clarity to this point, we are proposing to amend the regulations at 42 CFR 405.926 relating to actions that are not initial determinations, by adding new paragraph (u) to explain that issuance of the MOON by a hospital or CAH does not constitute an initial determination and therefore does not trigger appeal rights under 42 CFR part 405, subpart I.” After consideration of public comments the proposed revision to §405.926(u) was finalized without modification.

When will you be required to provide the MOON? Not for a while. In the meantime, the current draft document looks different from the first iteration. I would encourage key stakeholders to closely review this document, submit comments to the Office of Information and Regulatory Affairs, Office of Management and Budget and begin to work through the process of providing the MOON.

Resources:

Link to pre-published 2017 IPPS Final Rule: https://s3.amazonaws.com/public-inspection.federalregister.gov/2016-18476.pdf

Link to Details for CMS Form Number CMS-10611: Medicare Outpatient Observation Notice: https://www.cms.gov/Regulations-and-Guidance/Legislation/PaperworkReductionActof1995/PRA-Listing-Items/CMS-10611.html?DLPage=2&DLEntries=10&DLSort=1&DLSortDir=descending

• Note: Instructions for submitting public comments are not in the final rule document. Until a correction notice can be published in the Federal Register, instructions are available at this website.

For those of you that do not live in the state of Alabama it is hard to comprehend just how big college football is in this state. When I was new to the state one of the first questions people would ask is “which team are you for?” As a transplant from “up north,” (Tennessee), the obvious answer for me was neither.

In the world of Medicare and Acute Care Hospitals one main question that keeps being asked is, “are you an inpatient or an outpatient.” And for the Medicare beneficiary that has spent zero or one midnight in a hospital bed, though the answer will ultimately be inpatient or outpatient, it is not always an obvious answer.

The Comprehensive Error Rate Testing (CERT) Program is used to calculate the improper payment estimate for the Medicare Fee-for-Service Program. Each November, the Department of Health and Human Services (HHS) publishes the improper payment rate in the Agency Financial Report at www.hhs.gov/afr. CMS later publishes more detailed information in an annual Medicare Fee-for-Service (FFS) Improper Payments Report and Appendices. This article will focus on why patient status for zero and one day lengths of stay remains a focus, who is keeping a close eye on this dilemma and resources for you to help assess this patient population in your hospital.

Why Zero and One Day Inpatient Lengths of Stay Continues to be a Focus?

“Are you and Inpatient or Outpatient” still being a question for zero and 1 midnight hospitalizations is best demonstrated in the Appendices table Projected Improper Payments by Length of Stay. This table was new to the Appendices in 2014 and again appears in the 2015 report. Depicted below is a compare of data from the 2014 table and 2015 table. While the improper payment rate dropped 9.3% it is this group of claims that continue to have the highest error ate.

Table 1: “Projected Improper Payments by Length of Stay” 2014 to 2015 Compare

‍Who is Monitoring for Compliance with Patient Status Assignment?

Beneficiary and Family Centered Care (BFCC) QIOs and Recovery Auditors

HHS indicated in the FY 2015 Agency Financial Report that they are committed to reducing improper payments in the Medicare FFS program. One of the five corrective actions they believe will have a considerable effect in preventing and reducing improper payments is the update to the “Two Midnight” rule in the CY 2016 OPPS Final Rule. At the same time they announced the following two changes in their education and enforcement strategies.

• “Beginning on October 1, 2015, the Quality Improvement Organizations (QIOs) assumed responsibility to conduct initial patient status review of providers to determine the appropriateness of Part A payment for short stay inpatient hospital claims. From October 1, 2015 through December 31, 2015, short stay inpatient hospital reviews conducted by the QIOs will be based on Medicare’s current payment policies.
• Beginning on January 1, 2016, QIOs and Recovery Audit Contractors (RACs) will conduct patient status reviews in accordance with policy changes finalized in the Hospital Outpatient Prospective Payment System rule (CMS-1613-P) and effective in calendar year 2016. Effective January 1, 2016, RACs may conduct patient status reviews only for those providers that have been referred by the QIO as exhibiting persistent noncompliance with Medicare payment policies.”

To learn more about the transition of patient status reviews, you can:

• Read a related article at http://www.mmplusinc.com/news-articles/item/two-midnight-rule-once-again-to-be-or-not-to-be;or
• Join us for our 2016 Medicare Updates Webinar tomorrow afternoon.

Office of Inspector General

• FY 2014 and 2015 Work Plans: Inpatient Admission Criteria (OEI; 00-00-00000)

With the implementation of the “Two Midnight” Rule, the OIG added new inpatient admission criteria to the Work Plan in FY 2014 and 2015. This issue was focused on determining the impact of the new admission criteria on hospital billing, Medicare payments, and beneficiary payments. It also was focused on determining how billing varied among hospitals in FY 2014. This focus was based on the fact that “previous OIG work identified millions of dollars in overpayments to hospitals for short inpatient stays that should have been billed as outpatient stays. Beginning in FY 2014, new criteria state that physicians should admit for inpatient care those beneficiaries who are expected to need at least 2 nights of hospital care (known as the “two midnight policy””). Beneficiaries whose care is expected to last fewer than 2 nights should be treated as outpatients. The criteria represent a substantial change in the way hospitals bill for inpatient and outpatient stays.”

• FY 2016 Work Plan: Hospitals’ use of outpatient and inpatient stays under Medicare’s two-midnight rule (OEI; 02-15-00020)

With hospitals now entering into their third fiscal year under the “Two Midnight” Policy, as part of the FY 2016 Work Plan the OIG will “determine how hospitals’ use of outpatient and inpatient stays changed under Medicare’s two-midnight rule, as well as how Medicare and beneficiary payments for these stays changed, by comparing claims for hospital stays in the year prior to the effective date of the two-midnight rule to stays in the year following the effective date of that rule. We will also determine the extent to which the use of outpatient and inpatient stays varied among hospitals. CMS implemented the two-midnight rule on October 1, 2013. This rule represents a substantial change to the criteria that hospital physicians are expected to use when deciding whether to admit beneficiaries as inpatients or treat them as outpatients.”

Hospital Zero and One Day Inpatient Stay Volume

The CERT, OIG, BFCC-QIOs and potentially the Recovery Auditors are monitoring hospital’s compliance with the “Two-Midnight” policy by auditing zero and one midnight inpatient claims. But, do you know how this specific patient volume has changed where you work?

PEPPER Report

One source available to IPPS Participating Hospitals is the Program for Evaluating Payment Patterns Electronic Report (PEPPER). In the PEPPER User’s Guide, the OIG encourages hospitals to develop and implement a compliance program and conduct regular audits as a part of this program to ensure charges for Medicare services have been correctly documented and billed. They note that the PEPPER “can help guide the hospital’s auditing and monitoring activities.”

This report focuses on Medicare severity diagnosis related groups (DRGs) and discharges at risk for improper payment due to billing, coding and/or admission necessity.” One-day and Same-day Stays for Medical and Surgical DRGs are target areas in the report. A hospital is compared to its state, Medicare Administrative Contractor (MAC) Jurisdiction and the Nation for each target area.

The tables below compare the Nationals, J-J MAC Jurisdiction (Alabama, Georgia and Tennessee) and Alabama’s 80th Percentile for the 3rd quarter (April – June) of the Fiscal Year prior to implementation of the “Two-Midnight” Policy (2013), one year after implementation (2014) and the most current 3rd quarter fiscal year data (2015).

The PEPPER provides the following suggested interventions for Hospitals that are High Outliers:

“This could indicate that there are unnecessary admissions related to inappropriate use of admission screening criteria or outpatient observation. A sample of same- and/or one-day stay cases should be reviewed to determine if inpatient admission was necessary or if care could have been provided more efficiently on an outpatient basis (e.g., outpatient observation). Hospitals may generate data profiles to identify same- and/or one-day stays sorted by DRG, physician or admission source to assist in identification of any patterns related to same- and/or one-day stays. Hospitals may also wish to identify whether patients admitted for same- and/or one- day stays were treated in outpatient, outpatient observation or the emergency department for one or more nights prior to the inpatient admission. Hospitals should not review same- and/or one- day stays that are associated with procedures designated by CMS as “inpatient only.”

RealTime Medicare Data

Another source that can assist you is our sister company RealTime Medicare Data (RTMD). RTMD collects over 680 million Medicare claims annually from 23 states and the District of Columbia, and allows for searching of over 5.1 billion historical claims. In response to the “Two-Midnight” Policy, RTMD has available in their suite of Inpatient Hospital reports a One Day Stay Report. This report enables a hospital to view one day stay paid claims data by DRG and Physician to direct where audits should be focused. For further information on all that RTMD has to offer you can visit their website at www.rtmd.org.

Resources

Department of Health and Human Services Fiscal Year 2015 Agency Financial Report: http://www.hhs.gov/afr/fy-2015-hhs-agency-financial-report.pdf

The Supplementary Appendices for the Medicare Fee-for-Services 2015 Improper Payments Report: https://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/CERT/CERT-Reports-Items/Downloads/AppendicesMedicareFee-for-Service2015ImproperPaymentsReport.pdf

FY 2016 OIG Work Plan: http://oig.hhs.gov/reports-and-publications/archives/workplan/2016/oig-work-plan-2016.pdf

Short-term Acute Care Program for Evaluating Payment Patterns Electronic Report User’s Guide 18th Edition: https://www.pepperresources.org/Portals/0/Documents/PEPPER/ST/STPEPPERUsersGuide_Edition18.pdf

The Final Rule for the Comprehensive Care for Joint Replacement (CJR) Model was released on November 16, 2015 and published in the Federal Register on November 24, 2015. Unlike the proposed January 1st start date, the final rule start date is April 1, 2016 and is most definitely not an April Fool’s Day Joke. The model will include five (5) Performance Periods that will run through December 31, 2020. CMS has indicated that through an impact analysis they “expect the CJR model to result in savings to Medicare of $343 million over the 5 performance years of the model.”

Participating hospitals need to familiarize themselves with several new terms specific to the CJR Model as provided in Table 1.

Table 1: Key CJR Model Terms and Acronyms

‍CJR Model: Key Aspects

• For the first time, hospitals in selected MSAs are required to participate. CMS indicates that they “have designed the CJR model to require participation by hospitals in order to avoid the selection bias inherent to any model in which providers may choose whether to participate. Such a design will allow for testing of how a variety of hospitals will fare under an episode payment approach, leading to a more robust evaluation of the model's effect on all types of hospitals.”

• Eligible beneficiaries who elect to receive care at these hospitals will automatically be included in the model. Patients cannot opt out of this model.

• Participant hospitals will be required to supply beneficiaries with written information regarding the design and implications of this model as well as their rights under Medicare, including their right to use their provider of choice.

• Unlike the Total Hip Arthroplasty (THA) and Total Knee Arthroplasty (TKA) 30 Day Readmission Measure, this model will include LEJR procedures that result from hip fracture treatment rather than limiting the model conditions to only elective THA and TKA.

• CMS finalized the inclusion of any lower extremity joint procedure that results in discharge from MS-DRG 469 or 470, including ankle replacement; lower leg, ankle, and thigh reattachment; and hip resurfacing procedures. CSM acknowledges that while this volume of patients is likely to be small at any one hospital, these beneficiaries may also benefit from care redesign resulting in improved care coordination and quality that are goals of this model.

Payment

• During the performance years CMS will continue paying hospitals and other providers and suppliers according to the usual Medicare FFS payment systems.

• The Repayment requirement will not begin until Performance Year 2 (Episodes that end between January 1, 2017, and December 31, 2017).

• After the completion of a performance year, the Medicare claims payments for services furnished to the beneficiary during the episode, based on claims data, will be combined to calculate an actual episode payment. The amount of this calculation, if positive, will be paid to the participant hospital. This payment will be called a reconciliation payment. If negative Medicare will require repayment of the difference between the actual episode payments and the CJR target price from a participant hospital if the CJR target price is exceeded.

• CMS will limit how much a hospital can gain or lose based on its actual episode payments relative to target prices.

Payment and Pricing: Link to Quality

Hospitals will be assigned a composite quality score annually based on their performance and improvement on the following 2 quality measures:

1. Hospital Level Risk Standardized Complication Rate (RSCR) Following Elective Primary Total Hip Arthroplasty (THA) and/or Total Knee Arthroplasty (TAK) measure (NQF #1550); and
2. Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) Survey measure (NQF #0166)

CMS intends to publicly report this information on the Hospital Compare website. Participating hospitals who successfully submit voluntary THA/TKA patient-reported outcomes and limited risk variable data will receive additional points for their composite quality score.

Program Waivers

“CMS finalized the proposal, without modification, that waivers of Medicare program rules would apply to the care of beneficiaries who are in CJR model episodes at the time the service is furnished to the beneficiary under the waiver, even if the episode is later canceled. This policy would include circumstances where a beneficiary's care is ultimately excluded from the CJR model due to a change in the beneficiary's coverage during the episode.”

CMS proposed and finalized three specific waivers of Medicare Program Rules. “The purpose of such flexibilities would be to increase LEJR episode quality and decrease episode spending or internal costs or both of providers and suppliers that results in better, more coordinated care for beneficiaries and improved financial efficiencies for Medicare, providers, and beneficiaries.”

• Home Visits Waiver
  CMS finalized their proposal, “without modification, to waive the "incident to" direct physician supervision requirement set forth at § 410.26(b)(5), to allow a CJR beneficiary who does not qualify for home health services to receive up to 9 post-discharge visits in his or her home or place of residence any time during the episode following discharge from an anchor hospitalization.”

• Billing and Payment for Telehealth Services Waiver
  CMS finalized without modification to waive the geographic site requirement and the originating site requirement to permit telehealth visits to originate in the beneficiary’s home or place of residence. Under this waiver, telehealth could not be a substitute for in-person home health services paid under the home health prospective payment system. Services must be furnished in accordance with all other Medicare coverage and payment criteria and the facility fee paid by Medicare to an originating site would be waived if the service was originated in the beneficiary’s home.

• Skilled Nursing Facility (SNF) Waiver
  Beginning in performance year 2, the CJR model waives the SNF 3-day rule for coverage of a SNF stay following the anchor hospitalization. A condition to using this waiver is that the beneficiary must be transferred to SNFs rated 3-stars or higher for at least 7 of the previous 12 months on the CMS Nursing Home Compare website. CMS will post the list of qualified SNFs quarterly to the CMS website.

Beneficiary Choice and Beneficiary Notification

CMS finalized the proposal to require that participant hospitals notify beneficiaries of the requirements surrounding the model at the point of admission to the hospital. Additional detail to the content, timing and form of the notification specified in the final rule includes:

• Participant hospitals will be required to provide beneficiaries on admission with a general notice of the existence of the model and of certain beneficiary rights.

• “Participant hospitals must require as a condition of any sharing arrangement that the collaborators must notify beneficiaries of the existence of a sharing arrangement. We are modifying our regulations to specify that, in the case of physicians, this notification must occur at the point of the decision to proceed to surgery, or, in the case of other collaborators, prior to the furnishing of the first service provided by the collaborator that is related to the joint replacement.”

• As part of discharge planning, participant hospitals “must inform beneficiaries of all Medicare participating PAC providers/suppliers in an area but may identify those providers/suppliers that the hospital considers to be preferred…..the participant hospital must also as part of this specific second notice inform the beneficiary of providers/suppliers with whom a sharing arrangement exists.”

• Participant hospitals will be required to reference the most recently published CMS list of SNFs which qualify for the waiver of the 3-day rule.

Participant hospitals have from today until March 31, 2016 to plan for an April 1st, 2016 implementation date of this model. MMP strongly encourages participant hospitals to not only read the Final Rule but become very familiar with the information available on the CJR Web page.

New “Exception” to the 2-Midnight Rule

Just 40 days prior to the 2014 Final Rule going into effect we released an article titled Inpatient Status: To Be or Not to Be, That is the Question. Since that time, through sub-regulatory guidance CMS has indicated that there may be “unforeseen circumstances” or “exceptions” where even though a beneficiary’s stay is not 2-Midnights that inpatient may still be appropriate.

• CMS defines “unforeseen circumstances” as when a beneficiary’s stay is shorter than the physician’s expectation of at least 2 midnights and “the patient may still be considered to be appropriately treated on an inpatient basis for payment purposes, and the hospital inpatient payment may be made under Medicare Part A.” Examples provided by CMS include unforeseen: death, transfer to another hospital, departure against medical advice, clinical improvement, and election of hospice care in lieu of continued treatment in the hospital.
• CMS has also acknowledged that there is the possibility of an “exception” to the 2-Midnight Rule where an inpatient admission would be reasonable in the absence of an expectation of a 2 midnight stay. Prior to the CY 2016 Outpatient Prospective Payment (OPPS) Final Rule, CMS had only identified one “exception.” The exception is mechanical ventilation initiated during the present visit.

CMS finalized a second “exception” to the 2-Midnight Rule in the CY 2016 OPPS Final Rule released October 30, 2015. CMS indicated in the Final Rule that “after consideration of the public comments we received, we are finalizing, without modification, our proposal to revise our previous “rare and unusual” exceptions policy to allow for Medicare Part A payment on a case-by-case basis for inpatient admissions that do not satisfy the 2-midnight benchmark, if the documentation in the medical record supports the admitting physician’s determination that the patient requires inpatient hospital care despite an expected length of stay that is less than 2 midnights.”

Challenge for Hospitals

With this new “exception,” to be or not to be an inpatient continues to be the question. Unfortunately, CMS provides no examples of what they would consider to be such an exception. What we do know is this:

• Records will be considered on a case-by-case basis.
• Documentation in medical records must support the admitting physician’s determination that the patient required inpatient hospital care absent the expectation of a 2-Midnight stay.
• CMS has indicated that factors relevant to determining whether or not the inpatient stay would be nonetheless appropriate for Part A payment include:
• The severity of the signs and symptoms exhibited by the patient;
• The medical predictability of something adverse happening to the patient; and
• The need for diagnostic studies that appropriately are outpatient services, that is, their performance does not ordinarily require the patient to remain at the hospital for 24 hours or more).
• One final challenge is making sure you have an appropriately authenticated inpatient order in the record prior to the patient being discharged.

1-Day Short Stay Hospital Volumes

From the implementation of the 2-Midnight Rule through September 30, 2015 short-stay reviews have been a review focus of Medicare Administrative Contractors (MACs) through the Probe and Educate Program. As of October 1, 2015 the short-stay review responsibility has shifted to the Beneficiary and Family Centered Care (BFCC) Quality Improvement Organizations (QIOs). But before I get ahead of myself, let’s look at the numbers.

Has the implementation of the 2-Midnight Rule impacted the volume of 1-Day short stays?

To answer this question, I needed to ask two more questions.  

• Has there been a significant difference in 1-day stays prior to the implementation of the 2-Midnight Rule vs. after October 1, 2013?
• What is the percentage of 1-day short stays compared to a hospital’s total inpatient volume for our client base?

To find answers, I looked to our sister company RealTime Medicare Data (RTMD). RTMD collects over 680 million Medicare claims annually from 23 states and the District of Columbia, and allows for searching of over 5.1 billion historical claims. By accessing this data base I analyzed 1-Day Short Stay paid claims data for several hospitals within the MMP footprint. Specifically, I chose 1-day short stay claims with dates of service January 1, 2013 through June 30, 2013 which pre-dated implementation of the 2-Midnight Rule and January 1, 2015 through June 30, 2015 to compare the same six months after implementation of the 2-Midnight Rule. What I found was that while not all hospitals realized a decrease in 1-day stays, collectively there was a 2.87% decrease in 1-Day Short Stays compared to overall inpatient volume as depicted in Table 1.

Table 1

 I do not believe there should be a 1-Day Stay volume benchmark for all hospitals to strive for. I do believe that if physician documentation in your medical records supports the need for an inpatient admission, then the volume of 1-day short stays at your hospital will be what it should be. On the other hand, if you are an outlier above or below an “average” this may be a reason to take a closer look at these claims.

Medical Review Responsibility Change effective October 1, 2015

As previously mentioned, the BFCC-QIO’s have assumed responsibility for the short-inpatient stay medical review process. This transition, while outlined in the CY 2016 OPPS Proposed Rule, was not a proposal and subsequently occurred October 1, 2015.

CMS indicated in the CY 2016 OPPS Final Rule that “Under the new short-stay inpatient medical review process that we adopted beginning on October 1, 2015, BFCC-QIOs began to transition to reviewing a sample of post-payment claims and making a determination of the medical appropriateness of the admission as an inpatient.

QIOs will conduct “Revised Determination Reviews” (42 CFR 405.980) on hospital short-stay Medicare Part A claims. QIOs will conduct patient status reviews to determine the appropriateness of Medicare Part A payment for these short-stay inpatient hospital admissions, in accordance with section 1862(a)(1)(A) of the Act. In conducting these reviews, QIOs will use the information documented in the patient’s medical record, and may use evidence-based guidelines and other relevant clinical decision support materials as components of their review activity (we refer readers to 42 CFR 476.100 relating to setting standards for QIO reviews).

Comment: Several commenters stated the need for transparency and for more detailed information regarding the types of claims that would be subject to QIO review, claim sample sizes, the frequency of reviews, the claim look back periods, ADR limits, and administrative burden.

Response: We will address the technical medical review questions posed by commenters in subregulatory guidance.

We expect to release this information on the CMS Web site at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityImprovementOrgs/index.html?redirect=/qualityimprovementorgs/, no later than December 31, 2015.”

There are five BFCC-QIO Service Areas in the country. Most of the MMP footprint is located in an area where KEPRO is the BFCC-QIO. On September 30, 2015 KEPRO provided a Two-Midnight Short-Stay Reviews webinar. Short-stay review guidance provided in this session is outlined in Table 2.

Table 2

Resources

• Link to display copy of the CY 2016 OPPS Final Rule: https://s3.amazonaws.com/public-inspection.federalregister.gov/2015-27943.pdf

• Link to CY 2016 OPPS Final Rule in the November 13, 2015 Federal Register:http://www.gpo.gov/fdsys/pkg/FR-2015-11-13/pdf/2015-27943.pdf

• Link to KEPRO Two-Midnight Short-Stay Reviews webpage: https://www.keproqio.com/twomidnight/Default.aspx

This week we introduce a new area of focus for our weekly Wednesday@One newsletter – Hospital Compliance. Most of what Medical Management Plus already does relates to compliance because we are all about Medicare’s rules and regulations, but a more intense focus on Compliance never hurts. The newsletter this week includes articles on Compliance 101 and hospital issues addressed in Medicare’s Quarterly Compliance Newsletter. One of the challenges of Hospital Compliance is deciding where to direct your efforts, as there are many issues to consider. One suggestion is to follow the leader - follow the lead of Medicare contractors and entities that pursue improper payments, fraud, waste, and abuse within the Medicare program.

Medicare Administrative Contractors (MACs) – In addition to processing Medicare claims, MACs perform medical reviews, provide education to providers, and establish coverage requirements. Being familiar with their medical review topics, LCDs, and education offerings will help lead you to what the MACs think are “risk” areas. MMP publishes new medical review announcements and findings from all the MACs in the Wednesday@One newsletter on the third week of the month. Recent review topics for MACs include:

• Laboratory BNP Test (Cahaba)
• High-cost drugs (Palmetto, Noridian JE)
• Pulmonary Rehab (Palmetto)
• Kwashiorkor (Novitas)
• Joint Replacements (Cigna)
• Facet Joint Injections (Noridian JF)

Supplemental Medical Review Contractor (SMRC) – Strategic Health Solutions is the SMRC and performs “tasks aimed at lowering the improper payment rates and increasing efficiencies of the medical review functions of the Medicare and Medicaid programs.” One of their main tasks is to perform nationwide medical reviews as directed by CMS. You may want to consider their topics as your topics for addressing risks. Their website includes a list of their current projects and their completed projects. Current projects include the following topics:

• Electrodiagnostic testing
• Intensity Modulated Radiation Therapy (IMRT)
• Bariatric Surgery
• Blepharoplasty Services

Comprehensive Error Rate Testing (CERT) – CMS uses the CERT program to calculate the Medicare Fee-for-Service improper payment rate. CERT publishes an annual report that can be found on the CERT website.  The major errors identify by CERT reviews include:

• Lack of or insufficient documentation to support services
• Incorrect patient status
• Failure to meet medical necessity
• Coding errors

Program for Evaluating Payment Patterns Electronic Report (PEPPER) – A link from the CERT website labeled as “Hospital Specific Improper Payments Information and Training Resources” connects readers directly to the PEPPER Resources website. PEPPER can help guide a hospital’s auditing and monitoring activities by comparing your hospital’s statistics for discharges and services vulnerable to improper payments to the statistics of other hospitals in your state, MAC jurisdiction and nationally. This helps you identify where your hospital is an outlier. Some of the current PEPPER targets are:

• Stroke Intracranial Hemorrhage
• Septicemia
• Medical/Surgical DRGs with CC or MCC
• Excisional Debridement
• Chronic Obstructive Pulmonary Disease
• Syncope
• Thirty Day Readmissions
• One-Day and Two-Day Stays

Office of Inspector General (OIG) – The OIG protects the integrity of Department of Health & Human Services (HHS) programs as well as the health and welfare of program beneficiaries. They publish an annual Work Plan that describes their target areas for the coming year and then perform audits throughout the year of the risk areas identified in the Work Plan. Compliance departments can use the Work Plan and the audit findings to select areas at risk of fraud, waste, and abuse within healthcare. Some of the topics addressed in the OIG 2015 Work Plan Mid-Year Update include:

• Outlier payments
• Provider-based status
• Mechanical ventilation
• Compliance reviews of Medicare billing requirements
• Dental claims
• Hospital wage data
• Kwashiorkor
• Intensity modulated radiation therapy (IMRT)

Recovery Auditors (RAs or RACs) – The mission of the Recovery Audit program is to identify and correct Medicare improper payments. Each RAC has their own website that list the issues they are reviewing to identify Medicare overpayments and underpayments. This is another great source for hot topics for your hospital compliance program. Although the RAC program has had to step back some lately, CMS recently released the report to Congress of the 2014 RAC activity which reported $2.39 billion of overpayments were collected, and $173.1 million of underpayments repaid to providers. For updates on the RA program, see the Medicare Recovery Audit Program webpage. We are still awaiting the Recovery Audit program to move forward to the next Scope of Work, but until then the current RACs have begun to post some new issues for review. For hospitals, these include:

• Cardiac PET Scan (Cotiviti, formerly Connolly)
• Sacral Nerve Stimulation for Urinary and Fecal Incontinence (Performant)
• Rambizumab (Performant)
• Cataract Surgery Once in a Lifetime (Performant)
• Bariatric Surgery (Performant)
• MS-DRG Validation: Cardiac Defibrillator Implantation (Performant)
• MS-DRG Validation: Permanent Cardiac Pacemaker Implant (Performant)
• Back and Neck Procedure except Spinal Fusion (CGI Federal)

Following Medicare’s lead is an easy way to begin to put together your hospital compliance plan. It gets harder, of course, as you consider what risk areas may be specific to your facility, but at least it is a place to start.

So much of healthcare is a team effort – doctors, nurses, and ancillary services working together to care for patients; billing, coding and case management working together to ensure appropriate inpatient billing; ancillary departments and compliance working together to ensure proper documentation to support billing; and many other incidences of coordination within a hospital that are too numerous to name. The October Medicare Quarterly Provider Compliance Newsletter includes a few compliance issues related to hospitals that definitely require a team effort: one for inpatient billing and a couple regarding outpatient laboratory services.

The inpatient item addresses same-day readmissions. When a Medicare beneficiary is readmitted on the day of discharge to the same acute care PPS hospital, and the reason for the readmission is related to the condition treated in the prior admission, the hospital must combine the original and subsequent stay onto a single inpatient claim. Medicare does not specifically define “related” other than to say “for symptoms related to, or for evaluation and management of, the prior stay’s medical condition” so this can be a judgment call for the hospital. If the claims are combined, coding of diagnoses and procedures must encompass the entire “combined” stay which began when the patient was first admitted and ends with the discharge from the readmission. Present on Admission (POA) indicators are based on the original admission date since this is “one” admission for Medicare.

If the same-day readmission is not related to the prior inpatient admission, the hospital should submit separate inpatient claims and report Condition Code B4 on the second admission. Make sure your documentation clearly supports an unrelated admission because Medicare may request your records for review to support a separate same-day readmission. If hospitals fail to add the condition code B4 to a second unrelated admission, Medicare payment may be at risk of recoupment for automated reviews by Recovery Auditors or other Medicare reviewers.

Hospitals need to have a system in place to address same-day readmissions to:

• Determine if the readmission is related to the prior admission or not. This is a clinical decision and you need to involve clinical staff, such as Case Management, in this review.
• Appropriately code the entire episode for related combined admissions. Your Medical Records Coders will have to look at both records as one and appropriately apply the correct diagnosis, procedure, and POA codes. Unrelated readmissions are coded separately with each record standing on its own.
• Combine the two claims into one for related same-day readmissions by the Billing Department. If the claim for the first admission has already been submitted, it will need to be cancelled and a new or adjusted combined claim submitted. Remember that coding will need to be revised for combined claims before they are submitted. For unrelated same-day readmissions, the condition code B4 will need to be added to the second admission.

As you can see, this requires several different hospital departments working together to get this right - definitely a team effort!

The Compliance newsletter also addresses some issues related to outpatient laboratory services. Laboratory services may be denied upon review by a Comprehensive Error Rate Testing (CERT) contractor due to lack of orders and/or documentation to support medical necessity or due to services exceeding frequency limits.

The issue of the ordering physician’s signature on a laboratory requisition has been the topic of much discussion for several years. And the final CMS decision – a laboratory requisition does not have to be signed by the ordering physician - is a little misleading. Because even though the requisition does not have to be signed, somewhere there must be a valid signed physician’s order or signed documentation supporting the intent to order the laboratory tests. There also must be documentation supporting the medical necessity for the lab services - a diagnosis code or medical condition reason for which the test is being ordered. These requirements can be met by having a physician’s signature and a documented diagnosis on the laboratory requisition. If the lab requisition is not signed or does not contain a supporting diagnosis, a valid order and proof of medical necessity must be submitted to the reviewer. This could be a copy of the physician’s office notes or other types of physician documentation. CERT may send a request for documentation to the referring physician, but remember it is the responsibility of the billing provider to supply the requested documentation regardless of the place of service. This same concept applies to other types of outpatient services such as DMEPOS and ambulance services.

Laboratory services that exceed Medicare’s established frequency limits may also be denied by automated edits or when reviewed by the CERT contractor. There are a number of lab tests and other services that have frequency limits. The newsletter gives examples of a Hepatitis C Screening test exceeding one per lifetime and a screening pap smear exceeding the limit of one every two years. The lab test that MMP most commonly sees exceeding the frequency limit is HCPCS code G0103, Screening PSA which is covered once a year for asymptomatic men over 50.

You may notice that all of the services with frequency limits mentioned above are preventive or screening services. Medicare preventive services, both lab and non-lab services, generally have frequency limits and there are several resources that describe the coverage conditions for preventive services. One such resource is https://www.medicare.gov/coverage/preventive-and-screening-services.html . Some non-screening laboratory tests also have frequency limits: for example, hemoglobin A1C is generally only covered once every three months, with some exceptions, and a lipid panel is necessary once a year for monitoring or following patients with hyperlipidemia. It is often difficult for the testing laboratory or hospital to know when a patient last had a preventive service or a certain lab test. If you are concerned about loss of revenue due to exceeding frequency limits, remember it is acceptable to give patients an Advanced Beneficiary Notice of Non-Coverage (ABN) for services with frequency limits. For more information about ABNs see https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/downloads/ABN_Booklet_ICN006266.pdf .

Hopefully healthcare professionals working together as a team can take care of patients, appropriately document their services, follow the Medicare and other payers’ rules, and submit a clean claim to obtain payment for their services. Not an easy task so working as a team is a must.

When you hear the word compliance, what comes to mind? The word compliance can and does actually bring to mind a varying degree of answers depending on who you were to ask in the hospital. For Example:

• A Hospital Compliance Officer among other things thinks about the fall release of the Office of Inspector General’s (OIG) annual Work Plan to guide compliance efforts for the coming year. .
• A Case Manager thinks about what is a compliant inpatient status order, does the Physician documentation support a 2-Midnight expectation, is my patient going to be compliant with his/her discharge plan instructions with a goal of preventing a 30-Day Readmission?
• For the Coder, with I-10 finally being implemented, he or she is dealing with compliance with the new coding system and I-10 Coding Clinics.
• A Clinical Documentation Specialist most likely thinks about a compliant query process.
• Infection control promotes compliance with best practices to prevent adverse outcomes for the patient.
• The billing department wants to be compliant while getting a “clean bill” out the door for payment for services rendered by the hospital.

While this is not an exhaustive list of healthcare providers who strive for compliance, it is clear that compliance is a very real concern and desired outcome and at the end of the day, each caregiver wants to “get it right” while providing the best care possible to the patient.

The Health Care Compliance Association (HCCA) defines compliance as being “the process of meeting the expectations of others. More specifically, it is the process of helping our health care professionals understand and meet the expectations of those who grant us money, pay for our services, regulate our industry, etc.” This is where MMP shines by living our mission of “Making HealthCare Make Sense.” This is what we enjoy. This is why when asked I tell people that my hobbies are my husband, my cats and reading the Federal Register.

Our Wednesday@One Newsletter already includes in our production schedule a coverage update the second week of the month and a Medical Review update the third week of each month. This week we are excited to debut a new monthly article the fourth week of each month to be known as The Making HealthCare Make Sense Spotlight. This month we begin by spotlighting free resources available to you on your compliance journey. The use of the term journey is very deliberate as the one thing that you can count on in healthcare is change and that is what makes your career a constant journey.

OIG Compliance Education Materials: Compliance 101:

The OIG developed the resources found on this web page to “help health care providers, practitioners, and suppliers understand the health care fraud and abuse laws and the consequences of violating them. These compliance education materials can also provide ideas for ways to cultivate a culture of compliance within your own health care organization” (http://oig.hhs.gov/compliance/101/).

Medicare Learning Network® (MLN) Provider Compliance page

The MLN Provider Compliance Page “contains educational products that inform health care professionals on how to avoid common billing errors and other improper activities when dealing with various CMS Programs. CMS’ claim review program’s overall goal is to reduce improper payment error by identifying and addressing coverage and coding billing errors. Since 1996, CMS has implemented several initiatives: to prevent improper payments before a claim is processed; and to identify, and recoup improper payments after the claim is processed” (https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/ProviderCompliance.html).

Examples of useful resources on this web page include:

• Provider Compliance Educational Products pdf,
• Fraud and Abuse Educational Products pdf,
• Provider Compliance MLN Matters® Articles pdf; and
• Archive of Medicare Quarterly Provider Compliance Newsletters.

Office of Civil Rights

As a Business Associate we take our HIPAA responsibilities very seriously. The Office of Civil Rights (OCR) has an entire Web page devoted to Health Information Privacy. This web page provides you with information to understand HIPAA Privacy, current enforcement activities and much more. (http://www.hhs.gov/ocr/privacy/index.html).

As we begin this series of articles, we welcome feedback and recommendations for future articles by you our reader. I also encourage you to read the related article in this week’s newsletter, Resources for your Hospital Compliance Plan.

Fall has definitely arrived and with it comes memories of camping trips with Girl Scouts as well as family outings. A favorite part of these trips was the campfire, roasted marshmallows and ghost stories. Let the story begin. First, imagine sitting around a campfire huddled under a blanket on a cool fall night with a new moon and stars up above. Now, let the cautionary to some but scary to others plot unfold. The years were 2000 through 2008. The Department of Justice had alleged that hospitals were overcharging Medicare “when performing kyphoplasty, a minimally-invasive procedure used to treat certain spinal fractures that often are due to osteoporosis. In many cases, the procedure can be performed safely as a less costly outpatient procedure, but the government contends that the hospitals performed the procedure on an in-patient basis in order to increase their Medicare billings.”¹

The characters of this tale included the Department of Justice, a whistleblower (Mr. Charles Bates former regional sales manager for Kyphon in Birmingham, AL), the U.S. Attorney’s Office for the Western District of New York, the Department of Health and Human Services’ Office of Inspector General and Office of Counsel to the Inspector General, Medtronic Spine LLC the corporate successor to Kyphon Inc., and twenty five hospitals that settled allegations of submitting false claims to Medicare.

After a lengthy investigation, this story ended with several hospitals returning millions of dollars back to the Medicare Trust Fund and it became clear that Kyphoplasty was an outpatient procedure.

Now, fast forward to 2015 when hospitals are continuing to perform these procedures just not with the beneficiary being a hospital inpatient. This story is specific to Alabama, Georgia and Tennessee. However, all of the Medicare Administrative Contractors (MACs) have a Kyphoplasty Local Coverage Determination (LCD) so all states need to be take heed of what is required to prove medical necessity of the procedure.

STORYLINE

January 7, 2015

This story begins January 7, 2015 with the MAC for Alabama, Georgia and Tennessee (Cahaba) posting a notification of an upcoming widespread probe review of CPT 22513 and/or CPT 22514 combined for Bill Type 13X.

• CPT 22513 (Percutaneous vertebral augmentation, including cavity creation (fracture reduction and bone biopsy included when performed) using mechanical device (e.g., kyphoplasty), one vertebral body, unilateral or bilateral cannulation, inclusive of all imaging guidance; thoracic).
• CPT 22514 (Percutaneous vertebral augmentation, including cavity creation (fracture reduction and bone biopsy included when performed) using mechanical device (e.g., kyphoplasty), one vertebral body, unilateral or bilateral cannulation, inclusive of all imaging guidance; lumbar).

July 6, 2015

The plot thickened when Cahaba posted widespread probe review results for review of CPT 22513 and/or CPT 22514 combined for Bill Type 13X on their website on July 6, 2015. The findings speak for themselves, not good.

Cahaba cited the following three key reasons for denials found in their widespread review:

1. The documentation did not justify the medical necessity of the services: According to LCD: Surgery: Vertebral Augmentation Procedures (VAPs) (then L30062 – post October 1, 2015 LCD L34300); the performance of VAPs are considered to be medically reasonable and necessary for persistent debilitating pain caused by the recent pathologic fracture of noncervical vertebrae, painful non-unions of Vertebral Compression Fractures (VCF), back pain associated with osteolytic metastatic disease or multiple myeloma involving a vertebral body, or painful hemangiomas. Conservative management should be implemented prior to performing a VAP. Documentation must indicate that conservative medical management has been tried and has failed or why the patient meets the exceptions to conservative management which may include a high level of pain, disability and neurologic compromise.
2. Lack of documentation: Claims were denied due to the lack of documentation to review for services provided on the claim. Claims either did not include physician orders, procedure reports, or progress notes to support the service was provided as submitted on the claim.
3. Lack of timely submission of requested documentation: Claims were denied due to a lack of record submission in a timely manner. According to the Medicare Program Integrity Manual, PUB 100-8, Chapter 3, 3.2.3.8b, “During prepayment…or post payment…review, if no response is received within 45 calendar days after the date of the ADR, the MACs and ZPICs shall deny the claim.”

Cahaba indicated that from this review finding they plan to “begin a prepayment widespread targeted review…Once selected, the claims will be reviewed for medical necessity (e.g. compliance with CMS’ guidelines, contractor LCD’s, correct billing and coding).

Will there be a Happy Ending?

Here at MMP we have been hearing from clients that they are receiving Additional Documentation Requests (ADRs) for records where the patient has undergone a kyphoplasty. To help ensure this story has a happy ending for your hospital, here are some suggestions of what you can do:

• Timely submission of requested documentation is a must.
• Read the LCD for your MAC to understand the Coverage Guidance (Indications and Limitations, ICD-10 codes that support medical necessity) and Documentation Requirements.
• Work with your Physicians performing these procedures to ensure they are aware of the LCD requirements.

To help everyone get started, we are providing this table with a link to the current LCD for all of the MACs, post ICD-10 implementation.

‍ Resource

¹http://www.justice.gov/opa/pr/2011/January/11-civ-006.html

October 1st has seen its share of historical events. Before looking forward, let’s take a look back at a few highlights from this date in history.

October 1, 1800: Spain ceded Louisiana to France in a secret treaty.

October 1, 1851: First Hawaiian stamp is issued.

October 1, 1880: First electric lamp factory opened by Thomas Edison.

October 1, 1890: Yosemite National Park forms.

October 1, 1908: Ford puts the Model T car on the market at a price of US$825.

October 1, 1942: Little Golden Books (children books) begins publishing.

October 1, 1955: “Honeymooners” premieres.

October 1, 1982: Sony launches the first consumer compact disc player (model CDP-101).

October 1, 1989: U.S. issues a stamp, labeling an Apatosaurus as a brontosaurus.

October 1, 2013: U.S. federal government shuts down non-essential services after it is unable to pass a budget measure.

As we are now 29 days from October 1st, it appears that the transition to ICD-10 won’t be shut down. While ICD-10 is and should be a main focus for hospitals right now, a gentle reminder that October 1st is also the start of the Centers for Medicare and Medicaid Services (CMS) fiscal year and the implementation of the Fiscal Year (FY) 2016 Inpatient Prospective Payment System (IPPS) Final Rule. This article highlights some of the key MS-DRG changes finalized in the Inpatient Prospective Payment System (IPPS) 2016 Final Rule that will also begin on October 1, 2015.

Documentation and Coding Adjustment

CMS is required to recover $11 billion by 2017 to fully recoup documentation and coding overpayments related to the transition to the MS-DRG system that began in FY 2008. CMS finalized another -0.8 percent adjustment as begun in FY 2014 to continue the recoupment process.

Changes to Preventable Hospital Acquired Conditions (HACs), Including Infections for FY 2016

CMS finalized the proposal to implement the ICD-10-CM/PCS Version 33 HAC list to replace the ICD-9-CM Version 32 HAC list. The HAC code list translations from ICD-9-CM to ICD-10-CM/PCS are located in Appendix I of the ICD-10-CM/PCS MS-DRG Version 32 Definitions Manual that can be located in the Downloads section of the ICD-10 MS-DRG Conversion Project Web site at: https://www.cms.gov/Medicare/Coding/ICD10/ICD-10-MS-DRG-Conversion-Project.html

Finalized Changes to Specific MS-DRG Classifications for FY 2016

MDC 5: Diseases and Disorders of the Circulatory System

The CMS created 2 New MS-DRGs to classify Percutaneous Intracardiac Procedures.

Major Cardiovascular Procedures have been moved from MS-DRGs 237 and 238 to five new MS-DRGs as outlined in the following table.

‍MDC 8: Diseases and Disorders of the Musculoskeletal System and Connective Tissue

Revision of Hip or Knee Replacements ICD-10-PCS Version 32 Logic

The CMS finalized the proposal to add code combinations which capture the joint revision procedure. These combination codes will be the same for MS-DRGs 466,467, 468 as well as MS-DRGs 628, 629, and 630 (Other Endocrine, Nutritional, and Metabolic Operating Room Procedures with MCC, with CC, and without CC/MCC) as the joint procedures are also included in this MS-DRG group. The table of code combinations can be found on pages 49,390 thru 49,406 of the Final Rule.

Spinal Fusion

The CMS finalized the proposal to change the title of MS-DRGs 456, 457 and 458. They indicated that by changing the reference of “9+ Fusions” to “Extensive Fusions,” this more appropriately identifies the procedures classified under these groupings. The final title revisions are as follows:

• MS-DRG 456: Spinal Fusion Except Cervical with Spinal Curvature/Malignancy/Infection or Extensive Fusion with MCC,
• MS-DRG 457: Spinal Fusion Except Cervical with Spinal Curvature/Malignancy/Infection or Extensive Fusion with CC; and
• MS-DRG 458: Spinal Fusion Except Cervical with Spinal Curvature/Malignancy/Infection or Extensive Fusion without CC/MCC.

MDC 14: Pregnancy, Childbirth and the Puerperium

The CMS finalized the proposal to modify the logic for several ICD-10 procedure codes where the current logic did not result in the appropriate MS-DRG assignment. Specifically, the codes should not be designated as O.R. codes. Specific Codes where the logic was modified include:

• 3E0P7GC (Introduction of other therapeutic substance into female reproductive, via natural or artificial opening);
• 3E0P76Z (Introduction of nutritional substance into female reproductive, via natural or artificial opening);
• 3E0P77Z (Introduction of electrolytic and water balance substance into female reproductive, via natural or artificial opening);
• 3E0P7SF (Introduction of other gas into female reproductive, via natural or artificial opening);
• 3E0P83Z (Introduction of anti-inflammatory into female reproductive, via natural or artificial opening endoscopic);
• 3E0P86Z (Introduction of nutritional substance into female reproductive, via natural or artificial opening endoscopic);
• 3E0P87Z (Introduction of electrolytic and water balance substance into female reproductive, via natural or artificial opening endoscopic);
• 3E0P8GC (Introduction of other therapeutic substance into female reproductive, via natural or artificial opening endoscopic); and
• 3E0P8SF (Introduction of other gas into female reproductive, via natural or artificial opening endoscopic).

Finalized Changes to the Postacute Care Transfer MS-DRGs

Per the 2015 OPTUM DRG Expert, “CMS established a postacute care transfer policy effective October 1, 1998. The purpose of the IPPS postacute care transfer payment policy is to avoid providing an incentive for a hospital to transfer patients to another hospital early in the patient’s stay in order to minimize costs while still receiving the full DRG payment. The transfer policy adjusts the payments to approximate the reduced costs of transfer cases.”

The CMS finalized the proposal to update the list of MS-DRGs that are subject to the Postacute Care Transfer Policy to include:

• MS-DRG 273: Percutaneous Intracardiac Procedures with MCC; and
• MS-DRG 274: Percutaneous Intracardiac Procedures without MCC.

Note: MS-DRGs 273 and 274 met the criteria for the special payment methodology and therefore are also subject to the MS-DRG special payment methodology.

Please be aware that this article highlights some of the key changes. For those closely involved with coding in your facility be on the lookout for our Annual Fall Inpatient webinar.

In the meantime, the FY 2016 Final Rule can be accessed at http://www.gpo.gov/fdsys/pkg/FR-2015-08-17/pdf/2015-19049.pdf.