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Q:

Our hospital has had Implantable Cardiac Defibrillator (ICD) claims denied by our Medicare Administrative Contractor (MAC) for what appears to be a missing Q0 modifier. The Q0 modifier was required for ICDs implanted for primary prevention to attest the patient was in a clinical trial or the data was reported to a qualifying data registry. We thought this requirement went away with the update to the ICD National Coverage Determination (NCD) which was effective for dates of service on and after February 15, 2018. Why are our claims being denied and is there anything we can do about it?

A:

You are correct that the updated NCD removed this requirement. Here are two statements from MLN Matters Article MM10865 which addressed the updated ICD NCD:

“Effective February 15, 2018, coverage policy is no longer contingent on participation in a trial/study/registry. Therefore, claims with a Date of Service (DOS) on an after February 15, 2018, no longer require any trial-related coding.”

The reason you have had claim denials for this requirement after it was no longer effective is due to the implementation date of the NCD. Once a new or revised NCD is announced, it takes Medicare contractors a while to implement the business requirements, including revising any claims processing system edits they have in place. That is why the transmittals announcing the changes include both an effective date and an implementation date. For a more thorough discussion of decision memos and NCD effective and implementation dates, see our prior Wednesday@One article, Effective Dates of New ICD NCD Rules.

A provider’s options when new NCD rules are released are to:

• Continue to follow the guidelines of the old NCD for claim submission until the implementation date,
• Follow the new NCD guidelines, but hold your claims until the implementation date for submission, or
• Submit your claims following the new NCD guidelines, but realize they may be denied under the old NCD requirements and you will have to appeal these claims to obtain proper payment.

Since your claims have been denied, you will have to appeal the denial or you may be able to resubmit the claim. Palmetto GBA, the MAC for jurisdictions J and M, recently released the following instructions.

Clinical Trial Implantable Defibrillator Claims

Issue Identified: 3/22/2019

Current Status

Claims reporting Implantable Cardiac Defibrillators (ICDs) related to National Coverage Determination (NCD) 20.4, with dates of service on or after February 15, 2018, previously rejected due to absence of clinical trial/study/registry codes may be submitted after March 26, 2019. Please refer to Palmetto GBA Medical Policy Article A56343   regarding applicable billing/coding changes.

Situation
CMS revised Change Request (CR): 10865   (PDF, 113 KB),

"National Coverage Determination (NCD) 20.4 Implantable Cardiac Defibrillators (ICDs)". The implementation date for Medicare Administrative Contractor (MAC) local edits is to March 26, 2019. Effective February 15, 2018, NCD 20.4 is no longer contingent on participation in a clinical trial/study/registry. Therefore, claims with dates of service on an after February 15, 2018, no longer require any trial-related coding.”

https://www.palmettogba.com/palmetto/providers.nsf/ls/JJ%20Part%20A"BAHQ6T4283?opendocument

If you are in another MAC Jurisdiction and have received denials for lack of reporting the Q0 modifier on ICD claims with dates of service on and after February 15, 2018, check with your MAC to see if you can resubmit those claims after March 26, 2019 (the implementation date).  If you have to go the appeal route and send in your medical records, be sure the ICD procedure meets all the requirements of this complex NCD and that your medical record contains the appropriate supporting documentation. Hopefully, this is something for which you already have processes in place and will not be an issue. The ICD procedure has a significant Medicare payment, so whatever you do, be persistent with your MAC in obtaining your proper payment. 

Q:

I am new to Case Management and am searching for resources to help me understand more about Medicare and Medicare Policies for hospitals.

A:

Hospital Conditions of Participation (CoP)

As a new Case Manager, I would first direct you to the Conditions of Participation (CoP) for Utilization Review and Discharge Planning that can be found in the electronic Code of Federal Register: (eCFR) Title 42 Public Health

• Part 482 (482.1 – 482.104) Conditions of Participation for Hospitals
• §482.30 CoP: Utilization Review
• §482.43 CoP: Discharge Planning

To help you better understand CMS’ expectations you can view their Survey Protocol in the CMS State Operations Manual Appendix A – Survey Protocol, Regulations and Interpretive Guidelines for Hospitals.

CMS.gov website

There are several useful webpages available on the www.CMS.gov website. I would start with the Medicare Learning Network® (MLN) Home page.  

Medicare Learning Network® (MLN) Homepage

The Medicare Learning Network® provides free educational materials for health care professionals on CMS programs, policies, and initiatives. From the Homepage you can link to:

• Publications &Multimedia,
• Events & Training, and
• News & Updates.

MLN Publications & Multimedia

One example available are MLN Articles. These articles explain national Medicare policy in an easy-to-understand format with a focus on coverage, billing, and payment rules for specified provider types. Just posted to this webpage is an index of MLN Matters® Article from 2017-2019 in pdf format. One interesting section allows you to search articles specific to individual HCPCS codes.

MLN Events & Training

In this section you will find MLN Web-Based Training page provides you free 24/7 access to web-based training (WBT) courses.

MLN News & Updates

This section provides you access to the MLN Connects weekly e-newsletter for health care professionals. CMS notes this newsletter is your single source for:

• CMS program and policy details,
• Updates and announcements,
• Press Released,
• Upcoming Educational Event Registration and Reminders,
• Claims, Pricer, and Code Information, and
• Updates on New and Revised MLN Publications.

Medicare Quarterly Provider Compliance Newsletter Archive

Another great resource is the Medicare Quarterly Provider Compliance Newsletter that provides education regarding how to address common billing errors and other claims review findings. You can search newsletters by common keywords, phrases, and claim review findings.

CMS National Training Program (NTP)

One additional resource to consider is the NTP website. This site provides materials and educational opportunities to help you better understand and educate others about Medicare, Medicaid, the Children’s Health Insurance Program (CHIP), and the Federally-facilitated Health Insurance Marketplace.

A healthcare claim form is a form which providers of services (hospitals, physicians, etc.) use to tell payors of services (Medicare, Medicaid, commercial payors, etc.) what items, tests, and services were provided to the patient and to request payment for those services. In other words, it is a communication tool between the provider of services and the payor of services that says, “this is what we did; please pay us.” In addition to this basis request for payment, it is sometimes used to communicate other information about the services that may affect payment immediately, or may allow the payors to gather data they could use to affect payment down the road. Medicare, as the largest healthcare payor, provides lots of claim-processing instructions, such as the quarterly updates to the Medicare Outpatient Prospective Payment System (OPPS).

Two of the bigger news items from the April 2019 OPPS Update are instructions on billing for (CAR) T-cell Therapy and reporting of the ER modifier for services performed in an off-campus provider-based emergency department. Along with these items are the other code updates and changes of the types that usually appear in the quarterly updates.

Chimeric Antigen Receptor (CAR) T- Cell Therapy

Chimeric Antigen Receptor (CAR) T- Cell Therapy is a new cancer treatment. To understand billing, you have to have an idea of how the therapy works. The CMS transmittal describes it as:

(CAR) T-cell therapy is a cell-based gene therapy in which T-cells are collected and genetically engineered to express a chimeric antigen receptor that will bind to a certain protein on a patient’s cancerous cells. The CAR T-cells are then administered to the patient to attack certain cancerous cells and the individual is observed for potential serious side effects that would require medical intervention.

In February, CMS released a proposed decision memo that would allow coverage of (CAR) T-Cell therapy under Coverage with Evidence Development (CED) (see a prior Wednesday@One article for more information on the proposed coverage). Until that decision memo is made final, there is no national Medicare policy for covering CAR T-cell therapy, so local Medicare Administrative Contractors (MACs) have discretion over whether to pay for it. The drugs associated with this treatment are currently payable as pass-through drugs and there is also a payable code for the administration of CAR T-cells in the hospital outpatient setting.

Although there are CPT codes for the collection and preparation of the CAR T-cells, Medicare does not generally pay separately for each step used to manufacture a drug or biological. The drug codes above also clearly specify that leukapheresis and dose preparation are included. Because of this, the collection and preparation codes were assigned a status indicator of “B” (Codes that are not recognized by OPPS) and were not to be reported on an outpatient hospital Part B bill type (12x and 13x). Medicare has now decided that in order to track utilization and cost data, they will allow the reporting of these non-payable codes on the claim as non-covered services.  Effective for claims received on or after April 1, 2019, providers should report the following CPT codes, associated revenue codes, and value code when these services are provided.

These services may be reported as non-covered charges on the outpatient claim. Also, hospitals may report the CAR T-cell related revenue codes 087X (Cell/Gene Therapy) and 089X (Pharmacy) as well as new value code 86 (Invoice Cost) established by the NUBC on hospital outpatient department claims.

The transmittal even gives examples of what should be reported in different scenarios:

• CAR T-cells collected, prepared and given in hospital outpatient department
• Report the appropriate drug code (Q2041 or Q2042) and the administration code (0540T) as covered services
• Report 0537T, 0538T, and 0539T codes and charges as non-covered
• CAR T-cells collected and prepared in hospital outpatient department, but not given
• Report 0537T, 0538T, and 0539T codes and charges as non-covered
• CAR T-cells collected and prepared in hospital outpatient department, given in subsequent inpatient admission
• Report charges associated with services described by CPT codes 0537T, 0538T, and 0539T under revenue code 0891 (Special Processed Drugs – FDA Approved Cell Therapy - Charges for Modified cell therapy) on inpatient claim (11x type of bill)
• Do NOT report drug codes (Q20140 or Q2042) when CAR T-cells are given to inpatients

Modifier “ER”

Another new reporting requirement solely for the benefit of allowing Medicare to collect utilization data is the new modifier “ER.” Hospitals are required to report this modifier on all services provided in an off-campus provider-based emergency department. Additional information about the “ER” modifier:

• Effective January 1, 2019;
• Report on every claim line that contains a CPT/HCPCS code for an outpatient hospital service furnished in an off -campus provider-based emergency department;
• Report on UB-04 (Form 1450) for hospital outpatient services;
• Not required to be reported by critical access hospitals (CAHs);
• For off-campus provider-based emergency departments that meet the definition of “a dedicated emergency department”, that is they are:
• Licensed by the State as an emergency department; OR
• Held out to the public (by name, posted signs, advertising, or other means) as a place that provides care for emergency medical conditions on an urgent basis without requiring a previously scheduled appointment; OR
• They provide at least one-third of all of their outpatient visits for the treatment of emergency medical conditions on an urgent basis without requiring a previously scheduled appointment.

As if it is not hard enough to report all the codes for which you do get paid, Medicare sometimes requires that we report codes for which there is no payment. Bummer! 

MEDICARE TRANSMITTALS – RECURRING UPDATES

Healthcare Common Procedure Coding System (HCPCS) Codes Subject to and Excluded from Clinical Laboratory Improvement Amendments (CLIA) Edits

The new HCPCS codes for 2019 that are subject to and excluded from Clinical Laboratory Improvement Amendments (CLIA) edits.

https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/MM11135.pdf

April 2019 Integrated Outpatient Code Editor (I/OCE) Specifications Version 20.1

https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/MM11192.pdf

Remittance Advice Remark Code (RARC), Claims Adjustment Reason Code (CARC), Medicare Remit Easy Print (MREP) and PC Print Update

https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/MM11204.pdf

April 2019 Update of the Hospital Outpatient Prospective Payment System (OPPS)

Describes changes to, and billing instructions for, various payment policies implemented in the April 2019 OPPS update.

OTHER MEDICARE TRANSMITTALS

Evaluation and Management (E/M) When Performed with Superficial Radiation Treatment

Allows providers to bill E/M codes 99211, 99212, and 99213 for Levels I through III, when performed with superficial radiation treatment delivery.

https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/MM11137.pdf

MEDICARE SPECIAL EDITION ARTICLES

Medicare Part B Clinical Laboratory Fee Schedule: Revised Information for Laboratories on Collecting and Reporting Data for the Private Payor Rate-Based Payment System

Assist the laboratory community in meeting the requirements under Section 1834A of the Social Security Act (the Act) for the Medicare Part B Clinical Laboratory Fee Schedule (CLFS). Includes clarifications for determining

• whether a hospital outreach laboratory meets the requirements to be an “applicable laboratory,”
• the applicable information (that is, private payor rate data) that must be collected and reported to CMS,
• the entity responsible for reporting applicable information to CMS,
• the data collection and reporting periods, and
• the schedule for implementing the next private payor-rate based CLFS update.

https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/SE19006.pdf

New Medicare Beneficiary Identifier (MBI) Get It, Use It

https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/SE18006.pdf

MEDICARE COVERAGE UPDATES

National Coverage Determination (NCD90.2): Next Generation Sequencing (NGS)

CMS covers diagnostic laboratory tests using next generation sequencing when performed in a Clinical Laboratory Improvement Amendments- certified laboratory when ordered by a treating physician and when specific requirements are met.

https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/MM10878.pdf

MEDICARE PRESS RELEASES

CMS Updates Consumer Resources for Comparing Hospital Quality

CMS updated hospital performance data on the Hospital Compare website and on data.medicare.gov. This data includes specific measures of hospitals’ quality of care, many of which are updated quarterly, and the Overall Hospital Star Ratings, which were last updated in December 2017. The data are collected through CMS’s Hospital Quality Initiative programs.  

https://www.cms.gov/newsroom/press-releases/cms-updates-consumer-resources-comparing-hospital-quality

CMS Updates Drug Dashboards with Prescription Drug Pricing and Spending Data

Updated with 2017 data.

https://www.cms.gov/newsroom/press-releases/cms-updates-drug-dashboards-prescription-drug-pricing-and-spending-data

MEDICARE EDUCATIONAL RESOURCES

Medicare Fast Facts

Medicare Fast Facts resources this month include:

• Bill Correctly for Device Replacement Procedures

https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/Fast-Facts.html?DLSort=1&DLEntries=10&DLPage=1&DLSortDir=descending

OTHER MEDICARE UPDATES

KEPRO Winter 2019 Care Review Connections Newsletter

A quarterly e-newsletter from your Beneficiary and Family Centered Care Quality Improvement Organization (BFCC-QIO).

https://www.keproqio.com/providers/winter-2019-acute-newsletter/

Guidelines for Achieving a Compliant Query Practice—2019 update

“Guidelines for Achieving a Compliant Query Practice” was produced through the joint effort of the Association of Clinical Documentation Improvement Specialists (ACDIS) and the American Health Information Management Association (AHIMA). Both associations collaborated on the creation of this practice brief and approved its contents, and as such it represents the recommended industry standard for provider queries.

This practice brief supercedes one published in 2016 and all previous versions.

https://acdis.org/resources/guidelines-achieving-compliant-query-practice%E2%80%942019-update 

Q:

In the Public Comment section of the February 18, 2018 ICD Final Decision Memo (CAG-00157R4), CMS responded to a comment with the following statement:

“CMS believes in the importance of an evidenced based tool but they are not specifying the type of tool that is required. They do provide an example of an evidence based decision aid for patients with heart failure who are at risk for sudden cardiac death and are considering an ICD. This tool was funded by the National Institutes on Aging and the Patient-Centered Outcomes Research Institute and can be found at https://patientdecisionaid.org/wp-content/uploads/2017/01/ICD-Infographic-5.23.16.pdf. CMS notes that this tool is based on published clinical research and interviews with patients and includes discussion of the option for future ICD deactivation.”

I noticed that there is a copyright notice on the last page of this tool. Are providers allowed to use this tool “as is” for their Shared Decision Making Encounter with individual patients?

A:

This tool can be found on the Colorado Program for Patient Centered Decisions website. Included on this website are “Terms of Use.” MMP reached out to the contact listed on this page and asked your question. Dan D. Matlock, MD, MPH, Associate Professor of Medicine indicated that “our tools are publicly available for clinic/patient use.”

As a reminder, the Implementation Date for providing a Shared Decision Making Encounter as well as all other changes to the NCD is March 26, 2019. You can read more about all of the changes being implemented in MLN Matters MM10865

My co-worker and I, as part of our duties at MMP, monitor Medicare’s medical review activities. We are often amused that the same old issues seem to come around again and again and again. I guess there are certain Medicare services that are harder to perform, document, code, and/or bill appropriately. And despite the repeated reviews and ongoing education, providers still struggle to get it right. Therefore, Medicare contractors often review the same issues again and again and again. This month is no different; this article contains some new “old” updates of medical review activity.

Dental Services

The new Supplemental Medical Review Contractor (SMRC), Noridian Healthcare Solutions, added several new current projects this month, but the one affecting acute-care hospitals is the medical review of hospital outpatient dental services. As is often the case with SMRC reviews, this one is based on the findings of an Office of Inspector General (OIG) audit. As a reminder, Medicare generally does not cover dental services such as tooth extraction except in very limited circumstances.

From the OIG report, “Under the general exclusion provisions of the Act, items and services in connection with the care, treatment, filling, removal, or replacement of teeth or structures directly supporting the teeth (e.g., preparation of the mouth for dentures) are not covered (§ 1862(a)(12)). Coverage is not determined by the value or the necessity of the dental care but by the type of service provided and the anatomical structure on which the procedure is performed.

For hospital outpatient dental services to be covered, they must be performed as incident to and as an integral part of a procedure or service covered by Medicare. For example, Medicare covers extractions done in preparation for radiation treatment for neoplastic diseases involving the jaw, but a tooth extraction performed because of tooth decay is not covered.”

The OIG found that 542 of 600 dental services (90.3%) did not comply with Medicare’s requirements resulting in overpayments for the six Medicare contractors reviewed of $9,783,023 for a three-year time frame. No wonder this topic keeps being reviewed.

Cardiac and Pulmonary Rehabilitation

The Recovery Auditors (RACs) recently announced newly approved reviews of cardiac and pulmonary rehabilitation services.

Cardiac and pulmonary rehab are Medicare-covered physician-supervised programs that provide exercise, education, and assessments for specific cardiac and pulmonary conditions to improve patients’ physical and social function. Medicare has specific guidelines for the covered conditions eligible for each program, the required components that must be included in each program, and other requirements such as physician supervision and program duration. The Medicare requirements for cardiac and pulmonary rehab can be found in Chapter 15 of the Medicare Benefit Policy Manual, sections 232 and 231 respectively. The required components for both services include:

• Physician-prescribed exercise
• Education or training (in the form of cardiac risk factor modification for cardiac rehab)
• Psychosocial assessment
• Outcomes assessment
• Individualized treatment plan

For the RAC reviews, “Medical Documentation will be reviewed to determine if pulmonary or cardiac rehabilitation is medically reasonable and necessary as well as meeting federal guidelines and Medicare coverage criteria.” Some recommendations on how your documentation could meet the Medicare requirements are discussed in this prior Wednesday@One article about Cardiac Rehab, but also can apply to Pulmonary Rehab documentation.

At the time of the writing of this article, all RAC regions had posted an approved audit issue for cardiac rehab and all but one RAC (Performant Region 1) had posted an approved audit issue for pulmonary rehab.

Facility ED Levels of Care

WPS, the Medicare contractor for Jurisdictions 5 and 8, had previously posted a Targeted Probe and Educate (TPE) review of CPT Codes 99281-99285 Emergency Department Visits. That topic temporarily disappeared from the listing of TPE topics for both J5 and J8 but now it is back. There have not been many, if any, other reviews of facility ED levels by Medicare reviewers, although some commercial insurers have attempted to curb high-level ER payments through review. This is a tricky subject because there are no national guidelines for assigning facility levels of care for Emergency Department services. Each hospital is instructed to develop their own level definitions based on the following guidance from the 2008 OPPS Final Rule.

• The coding guidelines should follow the intent of the CPT code descriptor in that the guidelines should be designed to reasonably relate to the intensity of hospital resources to the different levels of effort represented by the code.
• The coding guidelines should be based on hospital facility resources. The guidelines should not be based on physician resources.
• The coding guidelines should be clear to facilitate accurate payments and be usable for compliance purposes and audits.
• The coding guidelines should meet the HIPAA requirements.
• The coding guidelines should only require documentation that is clinically necessary for patient care.
• The coding guidelines should not facilitate up-coding or gaming.
• The coding guidelines should be written or recorded, well-documented and provided the basis for selection of a specific code.
• The coding guidelines should be applied consistently across patients in the Clinic or emergency department to which they apply.
• The coding guidelines should not change with great frequency. CMS would not generally expect hospitals to adjust guidelines less frequently than every few months, but would be reasonable to adjust annually.
• The coding guidelines should be readily available for fiscal intermediary or MAC review.
• The coding guidelines should result in coding decisions that could be verified by other hospital staff, as well as outside sources.

WPS’s checklist for the audit recommends submitting documentation of:

• The number and type of interventions under the facility charge,
• The visit record showing the signs/symptoms that support the medical necessity for the interventions, and
• The internal guidelines used to determine the HCPCS equivalent CPT code (99281-99285) for the hospital resources being billed (HCPCS to CPT conversion guidelines).

If a hospital’s codes meet their own definitions, who is to say if that is right or wrong. It does make me cringe to see a Facility ED Level graph that is significantly skewed one way or the other. Medicare has been clear that an individual hospital does not have to have a perfect bell curve, but hospitals should still consider a reasonable distribution of levels for their patient population.

It is likely this topic will not go away. As reported by various healthcare newsletter, MedPAC (the Medicare Payment Advisory Commission) addressed the topic of national guidelines for coding hospital emergency department visits in a recent meeting. This call for guidelines appears to be in response to a commission report showing hospitals are reporting increased volumes of the higher ED levels.  If the recommendation passes in the April MedPAC meeting, it would likely require CMS to revisit national guidelines by 2022 which would result in CMS having a foundation for assessing and auditing coding behavior.

DRG Validation Reviews

One other interesting item to note is an announcement by HMS, the RAC for Region 4, clarifying that MS-DRG reviews are comprehensive coding reviews and are not limited to only code changes that impact the DRG code billed and paid. You can find the March 8, 2019 provider update here.

The good news about reviewing the same topics is that, as a provider, it gives you specific risk areas on which to concentrate. You may find your internal audits, like those of outside contractors, reviewing the same issues again and again and again.

In keeping with March being National Social Work Month, this article focuses on CMS’s Transfer Policy. Medicare’s Transfer policy applies to transfers from an IPPS hospital to another hospital. It also applies to transfers from an IPPS hospital to specific post-acute care settings for specific MS-DRGs, which is known as the Post-Acute Care Transfer (PACT) Policy. This article focuses on the PACT policy, the addition of two new discharge dispositions to the policy and the potential financial implication for hospitals. 

Background

CMS’s PACT Policy was implemented to prevent Medicare from paying for the same care twice. This policy reduces reimbursement to a hospital when:

• A hospitalization codes to an MS-DRG designated as a Transfer MS-DRG,
• The patient’s length of stay (LOS) is at least 1 day less than the geometric mean LOS (GMLOS) for the MS-DRG, and
• The patient is discharged to one of the “qualified discharges” in the following table.

Annually, CMS publishes a list of MS-DRGs subject to the PACT policy in Table 5 of the applicable Fiscal Year IPPS Final Rule. For FY 2019 there are 280 transfer DRGs.

The Bipartisan Budget Act of 2018 required the addition of discharges/transfers to Hospice Home (Discharge Disposition Code 50) and discharges/transfers to Hospice, General Inpatient Care or Inpatient Respite (Discharge Disposition Code 51) be added to the list of qualified discharge dispositions included in the Post-Acute Transfer (PACT) Policy. This change was finalized in the FY 2019 IPPS Final Rule with an effective date of October 1, 2018. CMS actuaries estimated this change in the PACT policy will “generate an annual savings of approximately $240 million in Medicare payments in FY 2019, and up to $540 million annually by FY 2028.”

Transfer MS-DRG Payment

A transferring hospital is generally paid based on a graduated per diem rate for each day of stay, not to exceed the full MS-DRG payment that would have been made if the patient had been discharged without being transferred. A per diem rate is calculated for each transfer DRG based on the following formula:

• MS-DRG Payment ÷ GMLOS = Per Diem Rate

For Transfer MS-DRGs, a hospital is reimbursed twice the per diem amount for the first day of the hospitalization and an additional single per diem rate for subsequent days up to the full MS-DRG payment.

CMS noted in the 2019 IPPS Final Rule, “(t)he rational for per diem payment as part of our transfer policy is that the transferring hospital generally provided only a limited amount of treatment. Therefore, payment of the full prospective payment rate would be unwarranted.” (49 FR 244)… Our longstanding view is the policy addresses the appropriate level of payment once clinical decisions about the most appropriate care in the most appropriate setting have been made.” 

Special Payment MS-DRGs

To account for MS-DRGs subject to the PACT Policy that have exceptionally higher shares of costs very early in the hospital stay, CFR 412.4(f) also includes a special payment methodology. For these MS-DRGs hospitals receive 50 percent of the full MS-DRG payment, plus the single per diem payment, for the first day of the stay, as well as a per diem payment for subsequent days (up to the full MS-DRG payment).

PACT Policy Payment Examples

To help understand the policy payment, following are examples of a Transfer MS-DRG and a Special Pay Transfer MS-DRG.

PACT Policy

MS-DRG 470 (Major hip and knee joint replacement or reattachment procedures of the lower extremity with MCC without MCC) has been designated as Transfer MS-DRGs. Below is an example of payment utilizing FY 2018 IPPS Final Rule data. 

‍Special Pay MS-DRGs

MS-DRG 266 (Endovascular cardiac valve replacement with MCC) has been designated as Special Pay MS-DRGs. Below is an example of payment utilizing FY 2018 IPPS Final Rule data. 

Case Study

With the addition of Hospice to the PACT Policy and the estimated savings by CMS actuaries, what could this mean for individual hospitals? MMP conducted this case study with the objective of answering this question.

How Case Study Conducted

The first step was to select a group of short term acute care hospitals in Alabama both urban and rural. The second step was to use paid claims data from our sister company RealTime Medicare Data (RTMD) RealHealth Analytics database. Specifically, MMP used a report available in the Inpatient Compliance-RAC-Quality options titled Your Post-Acute Care Transfer Risks.

Specific parameters selected to run the report included:

• Hospital Name,
• Dates of Service: FY 2018 (October 1, 2017 through September 30, 2018), and
• Discharge Status Codes for Hospice Only.

Data Elements utilized from the report to identify potential financial impact included:

• DRG and DRG Description,
• Identified if Transfer DRG was also a Special Pay DRG,
• GMLOS,
• National Average Reimbursement for the DRGs,
• Length of stay for each claim; and
• Hospital specific unadjusted reimbursement.

Case Study Findings:

The following table depicts Transfer MS-DRG Volumes for FY 2018 where the discharge was to hospice, the hospital actual unadjusted reimbursement, the national average reimbursement, what the new national average payment would be when applying PACT policy payment methodology and the payment reduction the hospital could anticipate in FY 2019.

Hospitals in this case study can anticipate a 25-40% reduction in reimbursement due to the addition of discharge to hospice to the PACT Policy. It is important to understand the potential shift in hospital revenue. However, I believe it is more important to ensure your patients receive the right care, at the right time and in the right setting.

If your hospital has a hospital outreach laboratory that furnishes laboratory testing to non-patients, you may be required to collect and report private payor lab rates and volumes to Medicare. A non-patient is a patient that is neither an inpatient nor an outpatient of a hospital.

Non-patients are those patients that:

• Have a specimen submitted for analysis to a hospital and the patient is not physically present at the hospital;
• The patient did not receive other outpatient services at the hospital on the same day the specimen was collected; or
• The specimen was not collected by an employee of the hospital or of a facility provider-based to the hospital.

Hospital laboratories may bill Medicare under their own NPI separate from the hospital NPI. Hospital laboratories that bill under the hospital NPI, bill for non-patient specimens on Form CMS-1450 (UB-04) 14x Type of Bill (TOB).

The Protecting Access to Medicare Act of 2014 (PAMA) made significant changes to the way in which Medicare payments for laboratory tests paid under the Clinical Laboratory Fee Schedule (CLFS) are determined. Under the CLFS final rule “Medicare Clinical Diagnostic Laboratory Tests Payment System Final Rule” (CMS-1621-F), which was published in June 2016 and implemented the PAMA requirements, private payor rates became the basis for the revised CLFS rates beginning January 1, 2018. Medicare obtains the data for the private payor rates from applicable laboratories that are required to report their private payor payments and volumes to CMS. When this rule first came out the definition of applicable reporting labs had to do with the percentage of Medicare services for a particular NPI that were paid under the CLFS or the physician fee schedule. Since hospital Medicare revenues are mainly from inpatient and outpatient prospective payment systems (IPPS and OPPS), most hospital labs did not qualify as an applicable reporting laboratory with the exception of hospital laboratories that had their own NPI number. In the 2019 Medicare Physician Fee Schedule (MPFS) Final Rule, CMS changed the definition of an applicable reporting laboratory to use the Medicare revenue from a hospital 14x type of bill for the data collection period beginning January 1, 2019.

On February 27, 2019, Medicare published MLN Matters Article SE19006 that includes a lengthy discussion of the reporting requirements including “clarifications for determining whether a hospital outreach laboratory meets the requirements to be an “applicable laboratory,” the applicable information (that is, private payor rate data) that must be collected and reported to the Centers for Medicare & Medicaid Services (CMS), the entity responsible for reporting applicable information to CMS, the data collection and reporting periods, the schedule for implementing the next private payor-rate based CLFS update” and information about a condensed data reporting option for reporting entities.

For many hospitals that perform outreach testing, this will be a big deal. The reporting entity is based on the Tax Identification Number (TIN) but data is reported for each individual NPI that meets the definition of an applicable laboratory.  This means the first step is determining if your laboratory meets the definition of an applicable reporting laboratory. If your hospital lab bills under its own NPI, you likely dealt with determining if you were a reporting laboratory for the first reporting period.

Labs are required to report data if they:

• Have more than $12,500 in Medicare revenues from laboratory services on the Clinical Laboratory Fee Schedule (CLFS) during a 6-month data collection period, and
• Receive more than 50 percent of their Medicare revenues from CLFS and physician fee schedule services during a data collection period”

Hospital labs billing under the hospital’s NPI now use the 14x TOB for these calculations. Since 14x revenues are “non-patient” services, they consist exclusively (or mostly) of lab services, meaning the percentage will likely always exceed 50%. The means if your hospital outreach lab’s 14x revenues equal or exceed $12,500 in the 6-month reporting period, then you are required to report the lab private payor data to Medicare.

If you are an applicable laboratory, you must report each private payor rate and volume for each lab test subject to the data collection and reporting requirements. You can find a list of the lab tests subject to reporting in the Downloads section of the Medicare CLFS PAMA webpage – the document is titled CLFS Applicable Information HCPCS Codes. Private payors are defined as a health insurer issuer, a group health plan, a Medicare Advantage plan or a Medicaid Managed Care Organization.  

Labs report the final amount paid by a private payor including patient cost sharing amounts and secondary insurer payments. If an applicable laboratory has more than one payment rate for the same private payor for the same test, or more than one payment rate for different payors for the same test, the reporting lab will report each such payment rate and the volume for the test at each such rate.  There may be some insurances that do not pay individual amounts per HCPCS code, such as an insurance that pays under capitation or under a claim-level payment (such as, EAPGs for example). In this case, if the final private payor rate amount paid by HCPCS code and the associated volume paid at that final rate cannot be determined, the payment amount is not a private payor rate for purposes of applicable information and therefore is not reported to CMS.

Hospital laboratories that meet the applicable reporting status based on billing on the 14X TOB report only applicable information attributed to the lab’s non-hospital patients. This means the hospital must distinguish private payor payments made for lab tests furnished to non-patients from private payor payments made for lab tests furnished to hospital inpatients and outpatients. Only the private payor rates and volumes of laboratory tests furnished to non-patients are to be reported to CMS.

The next data collection period for this reporting began January 1, 2019 and goes through June 30, 2019. Then there is a six-month review and validation period from July 1, 2019-December 31, 2019. Applicable laboratories will report their data between January 1, 2020 and March 31, 2020. This data will be used to set the Clinical Lab Fee Schedule (CLFS) rates beginning in year 2021. The data collection, reporting and setting of new rates occurs every 3 years.

There is a new option available for condensed reporting at the TIN level. The TIN level reporting entity may combine the volume paid at the same private payor rate for the same HCPCS code for its component applicable laboratories. The condensed data reporting is only permitted when a specific lab test HCPCS code is paid at the same private payor rate to more than one applicable lab under the same TIN. The reporting entity must select one NPI as the reporting NPI when using this condensed data reporting. The MLN Matters article gives examples of how the condensed reporting would work. This is only an option if a reporting entity has multiple applicable laboratories for which it is reporting.

This reporting is not voluntary, optional, or discretionary. If your laboratory qualifies as an applicable reporting laboratory, you must ensure accurate collection and reporting of applicable information. There is a lot to consider and a lot of preparation prior to reporting. This article is only a cursory explanation of the process. I encourage hospitals to first determine if the reporting requirements apply to you and if they do, begin by reading all the Medicare information on the data collection and reporting process. I am sure after further study, you will agree, this is a big deal.

Resources:

MLN Matters Article SE19006

Medicare Laboratory PAMA Webpage

FAQs CY 2019 CLFS  

It is important to maintain balance in life, for example, people need to balance their job responsibilities with their family and personal lives. In healthcare, it is important to balance the risks of new innovations against their efficacy and safety. Medicare has detailed processes for evaluating and approving coverage of new items and services through the National Coverage Determination (NCD) process. A final NCD describes the covered indications and any contraindications for a particular item or service. Even using the NCD process, Medicare sometimes determines there is not yet enough evidence available to make a coverage decision. In these situations, Medicare must balance offering the new technology to those in need, while being careful not to cover services that may not be effective or safe enough for the benefits to outweigh the risks. They have another process for these scenarios – coverage with evidence development (CED).

According to a Medicare document, “Coverage with Evidence Development (CED) allows coverage of certain items or services where additional data gathered in the context of clinical care would further clarify the impact of these items and services on the health of Medicare beneficiaries. Medicare coverage may be extended to patients enrolled in a clinical research study. CED allows Medicare to provide coverage for an item or service because it is provided within a research setting where there are added safety, patient protections, monitoring, and clinical expertise. CED projects provide the necessary new evidence to influence clinical practice and help Medicare beneficiaries and providers make more informed diagnostic and therapeutic decisions.”

In mid-February, CMS released one final and one proposed decision memo allowing coverage with evidence development for two services.

Vagus Nerve Stimulation (VNS) for Treatment Resistant Depression (TRD):

The final decision memo allows coverage of “FDA approved vagus nerve stimulation (VNS) devices for treatment resistant depression (TRD) through Coverage with Evidence Development (CED) when offered in a CMS approved, double-blind, randomized, placebo-controlled trial with a follow-up duration of at least one year with the possibility of extending the study to a prospective longitudinal study when the CMS approved, double-blind, randomized placebo-controlled trial has completed enrollment, and there are positive interim findings.” The studies must be approved by CMS and must address whether VNS improves health outcomes for TRD patients compared to a control group. The policy delineates specific research questions, patient criteria and contraindications for trial participation.

Chimeric Antigen Receptor (CAR) T-cell Therapy:

CMS proposes to cover autologous treatment with T-cells expressing at least one chimeric antigen receptor (CAR) through coverage with evidence development (CED)

• when prescribed by the treating oncologist,
• performed in a hospital,
• for patients who have relapsed or refractory cancer and have not currently been experiencing any comorbidity that would otherwise preclude patient benefit, and
• when certain hospital and treatment criteria are met.

CAR T-cell therapy is a new form of cancer therapy that uses a patient’s own immune system to fight the disease. It is the first FDA-approved gene therapy. According to the CMS announcement, “The proposed National Coverage Determination would require Medicare to cover the therapy nationwide when it is offered in a CMS-approved registry or clinical study, in which patients are monitored for at least two years post-treatment. Evidence from the registries and studies would help CMS identify the types of patients that benefit from CAR T-cell therapy, informing a future decision by the agency regarding the types of cases in which Medicare would cover the treatment with no registry or trial requirement.”

Both of these decision memos will improve access to treatment options and maintain patient safety while deepening CMS’s understanding of how patients in Medicare respond. This will allow CMS to ensure that it is paying for treatments in which the benefits outweigh the risks.

Coverage updates over the last month from local Medicare Administrative Contractors are listed below. Notice that 9 of the 12 MACs have released a coverage article on Coding and Billing for Implantable Automatic Defibrillators (ICDs). 

As I write this article, it is a beautiful day with warm temperatures and lots of sunshine – a hint that spring is on its way though the weather forecast includes a drop back to frigid temperatures in the next few days, a harsh reminder that Winter is not yet finished. The intermittent warmth has caused new plant growth and already my lawn needs mowing to control the weeds and errant grasses. Time to pull out the lawn mower or call the lawn service. If you use a lawn service, you would not want to pay them for cranking their lawn mowers in addition to paying them for cutting the grass. Cranking the lawn mower is an inherent part of the service. Years ago, Medicare realized they should not be paying separately for services inherent in another procedure or groups of procedures and “developed the National Correct Coding Initiative (NCCI) to promote national correct coding methodologies and to control improper coding leading to inappropriate payment in Part B claims. CMS developed the NCCI coding policies based on coding conventions defined in the American Medical Association's CPT Manual, national and local policies and edits, coding guidelines developed by national societies, analysis of standard medical and surgical practices, and a review of current coding practices.” (Medicare NCCI webpage)

The NCCI includes:

• Procedure-to-Procedure (PTP) Edits – The PTP Column One/Column Two Correct Coding Edit Table contains edits which are pairs of HCPCS/CPT codes that in general should not be reported together. Each edit has a column one and column two HCPCS/CPT code. If a provider reports the two codes of an edit pair, the column two code is denied, and the column one code is eligible for payment. However, if it is clinically appropriate to utilize an NCCI-associated modifier, both the column one and column two codes are eligible for payment.
• Medically Unlikely Edits (MUEs) - MUEs prevent payment for an inappropriate number/quantity of the same service on a single day. An MUE for a HCPCS/CPT code is the maximum number of units of service (UOS) under most circumstances reportable by the same provider for the same beneficiary on the same date of service. The ideal MUE value for a HCPCS/CPT code is one that allows the vast majority of appropriately coded claims to pass the MUE.
• The NCCI Policy Manual for Medicare Services - A general reference tool that explains the rationale for NCCI edits.

As noted above, both codes in some PTP code pairs can be paid if reported with an applicable modifier. Each PTP code pair includes a modifier indicator that specifies if modifiers are allowed to by-pass the NCCI edit or not. A modifier indicator of “0” means you cannot add a modifier to that code pair to by-pass the edit, while an indicator of “1” means a modifier is allowed. Providers should NEVER append a modifier solely to bypass an NCCI PTP edit if the clinical circumstances do not justify its use. Generally, the use of modifiers is related to circumstances such as separate patient encounters, separate anatomic sites or separate specimens. Some of the more common modifiers for by-passing NCCI PTP edits are the 59 and associated XE, XS, XP, and XU modifiers. For years, the instructions have been that the modifier must be appended to the column two code of a PTP edit to bypass the edit. That was just confusing and required extra time and effort to verify which code of the pair was the “column two code.” Claims data sometimes showed that even the Medicare contractors couldn’t get it right and paid both codes even when the modifier was reported on the column one code. Finally, Medicare is addressing this issue and effective July 1, 2019, Medicare will allow modifiers 59, XE, XS, XP, or XU on column one and column two codes to bypass the edit as communicated in MLN Matters Article MM11168.

In related news, there is a new Medicare contractor for the NCCI program. On February 1, 2019, CMS awarded the NCCI contract to Capitol Bridge LLC. The transition of the contract from the incumbent contractor, CCS WP LLC/Correct Coding Solutions LLC, to Capital Bridge started on February 3, 2019, and will end on March 15, 2019.  An announcement of the new contract can be found on the Medicare NCCI webpage in the Downloads section.