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I know this story is an indication of my age but I often mention my grandchildren in my articles, so everyone already knows I am no longer “young.” My grandmother had one of those washing machines with a wringer on top. After the clothes washed, you put them through the two turning rollers (the wringer) to squeeze out excess water before hanging them outside on a clothesline. As a Medicare provider, do you sometimes feel like Medicare is putting hospitals and other providers through the “wringer” to squeeze out additional revenues that we used to get? This article examines the latest squeeze for hospitals from the 2019 Outpatient Prospective Payment System (OPPS) Final Rule.

Comprehensive APCs

One such squeeze in recent years is Comprehensive APCs (C-APCs) where payment for all other services on a claim (with only rare exceptions) is packaged into the payment of the most-costly primary procedure on the claim. CMS’s reasoning is that these other services are adjunctive to the primary service and making one payment for the entire episode of care is in keeping with the prospective payment strategy of OPPS. Primary procedures are designated by a status indicator (SI) of “J1” in OPPS Addendum B. For 2019, CMS is adding three new C-APCs – Level 3 ENT Procedures (levels 4 and 5 ENT procedures were already C-APCs) and Level 3 and 4 Vascular Procedures (a new type of APC group for C-APCs). This brings the total number of C-APCs to 65 involving over 2,900 CPT/HCPCS codes, of which 183 codes are 2019 additions for the APCs noted above.

Some good news is that CMS finalized the proposal to exclude payment for any procedure assigned to a New Technology APC from being packaged when included on a claim with a “J1” service assigned to a C-APC. For more background information on C-APCs, please read the Wednesday@One article about the 2019 OPPS Proposed Rule.

Medicare also pays observation services as a comprehensive APC when reported with visit codes with an SI of “J2” and when certain criteria are met.

Composite APCs

CMS is continuing their composite APC payment policies for mental health services and multiple imaging services for 2019. The mental health composite policy applies when the total payments for specified mental health services for one patient for one day exceed the maximum partial hospitalization (PHP) per diem rate. When this occurs, the services will be paid through a composite APC with a rate set at the maximum PHP per diem payment rate. In other words, the payment for individual mental health services for one day will not be more than the PHP daily rate.

For the imaging composite policy, Medicare makes one payment when more than one imaging procedure within certain imaging families is performed on the same date of service. CMS states these imaging composites “reflect and promote the efficiencies hospitals can achieve when performing multiple imaging procedures during a single session.” There are five multiple imaging composite APCs for CT/CTA with contrast, CT/CTA without contrast, MRI/MRA with contrast, MRI/MRA without contrast and ultrasound services. You can find a listing of the composite CPT codes in the final rule or they are identified on Addendum B with an SI of “Q3.”

Drug/Biological Payments

Currently and continuing for 2019, separately payable drugs, including pass-through drugs, are generally paid at a rate of the average sales price (ASP) plus 6%. The biggest financial hit lately for hospital drug payments was the reduction in payment for drugs purchased through the 340B program beginning in 2018. Drugs purchased at discounted rates through the 340B program will continue to be paid the reduced rate of ASP minus 22.5% (an overall reduction of -28.5%) for 2019. Also, for 2019 CMS expanded the 340B payment reduction to apply to non-excepted, off-campus, provider-based departments (PBDs) of a hospital. The 340B reduced payment applies to drugs with an SI of “K.” These drugs are identified on a claim by the addition of the JG modifier. There are some exceptions to the reduction – vaccines, pass-through drugs, and drugs purchased by rural sole community hospitals (SCHs), children’s hospitals, and PPS-exempt cancer hospitals will be paid at ASP+6%.

CMS did increase the packaging threshold for separately payable drugs from $120 in 2018 to $125 for 2019. This means the payment for drugs, biologicals, and therapeutic radiopharmaceuticals with a per day cost of $125 or less will be packaged and the HCPCS code assigned a status indicator of “N.”

Device-Intensive Procedures

Currently, device-intensive procedures are those procedures that involve surgically inserted or implanted devices that remain in the patient’s body after surgery and for which the portion of the APC payment attributed to the device (device off-set amount) exceeds 40%. Device-intensive procedures require the reporting of a device HCPCS code on the same claim with the procedure. Any device code will satisfy this requirement. Also, device-intensive procedures are subject to the no cost/full credit and partial credit device policy which requires the reporting of value code FD and the dollar amount of the credit when the hospital receives a credit for a replaced device that is 50% or greater than the cost of the device. In this case, the payment is decreased by the credit amount on both inpatient and outpatient claims.

For 2019, CMS finalized their proposals to change the definition of device-intensive procedures to include “procedures that involve surgically inserted or implanted, single-use devices that meet the device offset percentage threshold to qualify as device-intensive procedures, regardless of whether the device remains in the patient’s body after the conclusion of the procedure and to modify criteria to lower the device offset percentage threshold from 40 percent to 30 percent.” This means there will be more procedure codes that require the reporting of a device HCPCS code and to which the device credit policy applies. The larger impact on hospitals may be a decrease in volume of these types of procedures as this policy change will encourage migration of services from the hospital outpatient department into the ambulatory surgery center (ASC) setting. Medicare rates for procedures performed in the ASC setting are generally less than hospital rates, resulting in cost savings to the Medicare program and Medicare beneficiaries.

Speaking of ASC’s, Medicare approved the addition of 12 cardiac catheterization procedures (CPT codes 93451-93462) and five procedures performed during cardiac catheterization procedures (CPT codes 93566, 93567, 93568, 93571, and 93572) to the list of ASC covered surgical procedures.

Other significant changes from the 2019 OPPS Final Rule relate to provider-based departments. We will address those in an article in next week’s newsletter but here is a hint – more squeezing of revenues but some less than proposed and others phased in over time.

A few years ago, my husband and I determined we were stuck in a rut in our social life. We decided to expand our horizons by traveling more and trying new and different activities and adventures. Even simple things like trying different types of restaurants and reading varying genres of books proved to be fun. It is often hard for people to try new things because of fears and habits. This applies in our personal and work environments. Here at MMP, our focus is traditional Medicare rules for acute-care hospitals, but when reading through the various list serves and newsletters I receive daily, I read about a variety of issues, not just hospital issues. There are benefits to this – it expands my horizons mentally and often the information does relate directly or indirectly to hospitals. A perfect example is audit reports from the Office of Inspector General (OIG). Here are some recent audit reports that were not specific to hospitals, but which contain learnings for hospital providers.

Medicare Improperly Paid Providers for Specimen Validity Tests Billed in Combination with Urine Drug Tests - https://oig.hhs.gov/oas/reports/region9/91602034.pdf

This report was directed toward Medicare Part B claims (independent clinical laboratories and physicians’ offices). Many hospitals also bill for urine drug tests and in a hospital setting the reporting of the types of tests used for specimen validity would be common. Specimen validity tests are those lab tests used to ensure a sample for urine drug testing has not been tampered with or altered. The OIG report states, “Specimen validity testing includes tests for urinary pH, specific gravity, creatinine, and oxidants. For example, a urinary pH test determines the degree of acidity or alkalinity of a urine sample. If the pH levels are outside the normal range, the sample may have been altered.”

When these tests are used for validity testing, they are considered part of the drug testing service and are not separately billable to Medicare. If these tests are ordered for the diagnosis, treatment, or management of a patient’s medical condition, such as a urinary tract infection or kidney stones, they should be covered by Medicare as medically necessary services. When used for medical management, these tests should be reported separately on the claim even when urine drug tests are also performed and reported.

In order to prevent inappropriate reporting of such tests, Medicare has National Correct Coding Initiative (NCCI) procedure-to-procedure (PTP) coding edits for code pairs involving urine drug testing and urinalysis. When a urinalysis is performed to manage a patient’s specific medical condition, the provider would have to append a modifier to the column two code of the CCI pair to by-pass the edit and receive separate payment for the test. For example, the urinalysis codes 81000-81005 require modifiers to allow separate payment when billed on the same date of service with urine drug testing CPT codes 80305-80307. Although I understand Medicare’s intent to prevent inappropriate billing and payment with these edits, this places an additional burden on providers to evaluate and modify the claim to receive payment for a medically necessary test that pays around $3 - $4.

Hospital providers should read this OIG report and verify they are billing correctly for urine drug screens and urinalysis testing.

Medicare Advantage Appeal Outcomes and Audit Findings Raise Concerns About Service and Payment Denials - https://oig.hhs.gov/oei/reports/oei-09-16-00410.pdf

In this September 2018 OIG report, the OIG concludes that Medicare Advantage plans may be inappropriately denying payment for services in an attempt to increase their profits. They based their conclusion on the fact that Medicare Advantage Organizations (MAOs) are paid under a capitated payment model, overturned 75% of their own denials upon appeal during 2014–16, with even more overturns by independent reviewers, and CMS audits identified widespread and persistent MAO performance problems related to denials of care and payment. The bad part and what hospitals should really pay attention to is that during 2014-16, beneficiaries and providers appealed only 1% of denials to the first level of appeal.

This means hospitals are likely being inappropriately denied for services provided to patients covered by a Medicare Advantage plan. I know, if you work in a hospital, this is not news to you. The lesson here for hospital providers is to appeal, appeal, appeal your denied MAO claims if you believe the services were appropriately provided and should be covered by the MAO.

The OIG recommended and CMS concurred to:

• Enhance its oversight of MAO contracts, including those with extremely high overturn rates and/or low appeal rates, and take corrective action as appropriate;
• Address persistent problems related to inappropriate denials and insufficient denial letters in Medicare Advantage; and
• Provide beneficiaries with clear, easily accessible information about serious violations by MAOs.

Until CMS gets better control over the MAO denials, the onus is on providers and beneficiaries to appeal inappropriate denials.

London Cardiologist Sentenced to 42 Months for Health Care Fraud - https://www.justice.gov/usao-edky/pr/london-cardiologist-sentenced-42-months-health-care-fraud

And when reviewing OIG information, do not forget to read enforcement actions reported on the OIG list serve. These often include important lessons also. This particular item describes a guilty verdict for a physician who implanted dozens of pacemakers into patients that were medically unnecessary, under well-established national guidelines and Medicare coverage rules. 

Though not mentioned in the DOJ release, some hospital also billed for and was paid for these pacemaker implantations. Hospitals bear responsibility to ensure the services they provide and bill for meet Medicare coverage guidelines. Also, under Medicare’s Hospital Conditions of Participation, a hospital’s “governing body must ensure that the medical staff is accountable to the governing body for the quality of care provided to patients.”

Other types of services addressed by the OIG that might affect some hospitals either directly or indirectly include:

• Inpatient Rehabilitation Facilities - https://oig.hhs.gov/oas/reports/region1/11500500.asp
• Ambulance Services - https://oig.hhs.gov/oas/reports/region9/91703017.asp
• CPAP Devices - https://oig.hhs.gov/oas/reports/region4/41704056.asp
• Nursing Homes - https://oig.hhs.gov/oas/reports/region7/71703224.asp

As you can see, there are lots of reasons to read OIG reports other than those specifically targeted to hospitals. It is one small way you should be expanding your horizons.

CMS published Transmittal 825 on September 1, 2018. The purpose of this transmittal was to instruct Contractors on which healthcare professionals should be performing medical record reviews for the purpose of making coverage determinations. Guidance in this transmittal had an effective and implementation date of October 22, 2018.

Background

The Medicare Administrative Contractor (MAC) Medical Review Program performs reviews to carry out the goal of reducing “payment error by preventing the initial payment of claims that do not comply with Medicare’s coverage, coding, payment, and billing policies.” To accomplish this goal, MACs identify noncompliance through:

• Analysis of data (e.g., profiling providers, services, or beneficiary utilization), and
• Evaluation of other information (e.g., complaints, enrollment and/or cost report data).
  

Credentials of Medical Reviewers 

This Transmittal instructs MACs, the Medical Review Accuracy Contractor (MRAC) and the Comprehensive Error Rate Testing (CERT) Contractor that record reviews for the purpose of making coverage determinations must be performed by RNs, therapists or physicians. Current Licensed Practical Nurses (LPNs) performing medical reviews can be grandfathered in and continue to perform reviews. However, Contractors are to no longer hire new LPNs to perform reviews.

Zone Program Integrity Contractor (ZPIC)/Unified Program Integrity Contractor (UPIC), Recovery Auditors (RACs) and the Supplemental Medical Review Contractor (SMRC) must ensure reviewer credentials are consistent with the requirements in their respective Statements of Work (SOWs).

Advice from Other Health Care Professionals

In addition to advising who can perform the reviews, this transmittal adds the following new guidance to Chapter 3, Section 3.3.1.1 of the Medicare Program Integrity Manual:  

• “The MACs, MRAC, and CERT, shall ensure that services reviewed by other licensed health care professionals are within their scope of practice and that their MR strategy supports the need for their specialized expertise in the adjudication of particular claim type (i.e., speech therapy claim, physical therapy).”
  

Who are Your Contractors?

For those not closely involved with Medicare Medical Reviews, you can see from this Transmittal there are a lot of Contractors requesting and reviewing records. To find out the specific Contractors that could be requesting records, you can go to the Review Contractor Directory Interactive Map on the CMS website. https://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/Review-Contractor-Directory-Interactive-Map/.

Q:

Do you code Pneumonia, nos (J18.9) when a physician documents “Right Upper Lobe Pneumonia” and no causal organism is identified?

A:

No.  Effective with discharges September 24, 2018, Right Upper Lobe Pneumonia is coded to Lobar Pneumonia, unspecified organism (J18.1).  If the physician documents that Pneumonia is specified in one  or more lobes, code to Lobar Pneumonia or Multi-lobar Pneumonia, depending on how many lobes are affected.  Remember, the right-side has three lobes and the left-side has two lobes. By coding Lobar Pneumonia, we are coding the specific site of the Pneumonia instead of the type of Pneumonia.  Of course, if an organism is identified as causing the Pneumonia, code to the type of Pneumonia instead.  Please refer to the Coding Clinic listed below for the full update.  

Resource:  Coding Clinic for ICD-10-CM/PCS, Third Quarter 2018:  Page 24 

Q:

With so many different Contractors requesting medical records for review, how can I keep current with who is reviewing what?

A:

You are correct, there are several Contractors requesting records and staying abreast of all of the issues can be a challenge. Here are some of the key players auditing Medicare records.

Office of Inspector General (OIG):

In June of 2017 OIG began updating their once Annual Work Plan on a monthly basis as the Work Planning Process is “dynamic and adjustments are made throughout the year to meet priorities and to anticipate and respond to emerging issues with the resources available. You can access the Work Plan on the OIG website at: https://oig.hhs.gov/reports-and-publications/workplan/index.asp

Medicare Administrative Contractors (MACs):

In October 2017 CMS implemented a Target Probe and Educate (TPE) Review Process for the MACs. With this type of approach, MACs are focused on providers/suppliers who have the highest claim error rates or billing practices that vary significantly from their peers. In general, MACs will post a current Active Medical Log to their website. Depending on the MAC, this can sometimes be a challenge to find.

CMS has a MAC Website List page where you can select your state to go to your specific MACs website (https://www.cms.gov/Medicare/Medicare-Contracting/FFSProvCustSvcGen/MAC-Website-List.html#Alabama).

Recovery Audit Program (RACs)

The RAC’s review claims on a post-payment basis. CMS maintains a RAC webpage that provides links to the different RACs across the country, Proposed and Approved RAC Topics. A few of their current Approved Topics includes cardiac pacemakers, cataract surgery and implantable automatic defibrillators – ICDs. You can access the CMS RAC webpage at: https://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/Recovery-Audit-Program/Index.html.

Supplemental Medical Review Contractor (SMRC)

Prior to February 13, 2018 Strategic Health Solutions was the SMRC. The SMRC performs reviews at the direction of CMS with the aim of lowering the improper payment rates. On February 13, 2018 CMS announced that Noridian Healthcare Solutions, LLC was awarded the new $227 million contract. CMS does have a SMRC webpage (https://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/Medical-Review/SMRC.html). However, at the time of this article neither CMS nor Noridian have posted any issues under review.

The Comprehensive Error Rate Testing (CERT) Program

CMS implemented this program to measure improper payments in the Medicare Fee-for-Service program. Annually, the CERT selects a stratified random sample of approximately 40,000 claims submitted to Part A/B MACs and Durable Medical Equipment MACs (DMACs) for review. It is important to keep in mind that they report a measurement of payments not meeting Medicare requirements meaning their improper payment is not a “fraud rate.”  They post an Annual Report and Appendices to the CERT CMS webpage. Reviewing these reports can help you identify high find error prone cases types. For example, in the 2017 National Annual Report, the CERT reported Major Joint Replacement or Reattachment of Lower Extremity, Heart Failure and Shock, and Chronic Obstructive Pulmonary Disease as three of the top 20 service types with the highest improper payment in the acute inpatient setting. The CERT webpage can be accessed at: https://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/CERT/index.html.

Beneficiary and Family Centered Care Quality Improvement Organizations (BFCC-QIOs)

In 2015, CMS made the decision to move Short Stay reviews from the MACs to the BFCC-QIOs. These reviews are for a hospital length of stay less than two midnights and focus on ensuring doctors and hospitals are following the Part A payment policy for inpatient admission. If a hospital is identified as having a consistent trends of high denial rates, the process if for the BFCC-QIO to refer that hospital to the RACs who will conduct patient status reviews. You can locate your QIO at this website: https://qioprogram.org/contact.

Program for Evaluating Payment Patterns Electronic Report (PEPPER)

The PEPPER is an electronic data report containing a single hospital’s claims data statistics for MS-DRGs and discharges at risk for improper payment due to billing, coding and/or admission necessity issues. Each report compares a hospital to their state, MAC Jurisdiction and the nation. “The Office of Inspector General encourages hospitals to develop and implement a compliance program to protect their operations from fraud and abuse. As part of a compliance program, a hospital should conduct regular audits to ensure charges for Medicare services are correctly documented and billed. The Program for Evaluating Payment Patterns Electronic Report (PEPPER) can help guide the hospital’s auditing and monitoring activities.” In general, a hospital’s Quality Department can provide the report to key departments (i.e. Case Management and HIM).

MMP, Inc. Compliance Assessment Tool (CAT)

In January of 2017, the OIG, in collaboration with a group of compliance professionals, released a Resource Guide to measure the effectiveness of compliance programs.  Items 5.27-5.36 emphasize a Risk Assessment is key to developing an effective Compliance audit/work plan.  As you can see from the list of Contractors above, the number of Medicare risk areas to consider can be overwhelming and the financial risk is great. Medical Management Plus, Inc. (MMP) can help.  We can provide a Compliance Assessment Tool that summarizes the Medicare risk areas from Medicare review entities with your facility’s volumes, charges, and payments for each issue.  The report also includes information on coverage policies that define the medical necessity requirements for these issues.  And MMP is always available to help with audits or education.  If you are interested in learning more about our Compliance Assessment Tool or our audit and education services, please contact us using the form at the bottom of this page or call 205-941-1105.

In a fit of spring-cleaning this week (well, I guess that would be fall-cleaning technically since it is October), I cleaned out my grandchildren’s toy closet. Those toys beyond repair were trashed and those in good shape but no longer played with I donated. I kept their favorite toys, including those toys that seem timeless even in our current electronic world such as water color paints, building blocks, and magnets. Even as an adult, I am fascinated by the pull of a magnetic field on metal objects. One really big magnet is a Magnetic Resonance Imaging (MRI) machine which has an enormous magnetic pull. This is a cause for concern and extreme caution when a patient is put into an MRI machine. Medicare recently released transmittals expanding coverage of MRI services to patients who have cardiac pacemakers or defibrillators, but only under specific conditions.

MLN Matters Article MM10877 explains that for dates of service on and after April 10, 2018, Medicare will allow for MRI coverage for beneficiaries with an Implanted Pacemaker (PM), Implantable Cardioverter Defibrillator (ICD), Cardiac Resynchronization Therapy Pacemaker (CRT-P), or Cardiac Resynchronization Therapy Defibrillator (CRT-D) according to changes to National Coverage Determination (NCD) 220.2. The MRI must be used according to FDA labeling. For devices that do not have FDA labeling specific to use in an MRI environment, the following conditions must be met:

• MRI field strength is 1.5 Tesla using Normal Operating Mode;
• The implanted pacemaker, ICD, CRT-P, or CRT-D system has no fractured, epicardial, or abandoned leads;
• The facility has implemented a checklist which includes the following:
• patient assessment is performed to identify the presence of an implanted pacemaker, ICD, CRT-P, or CRT-D;
• before the scan benefits and harms of the MRI scan are communicated with the patient or the patient’s delegated decision-maker;
• prior to the MRI scan, the implanted pacemaker, ICD, CRT-P, or CRT-D is interrogated and programmed into the appropriate MRI scanning mode;
• a qualified physician, nurse practitioner, or physician assistant with expertise with implanted pacemakers, ICDs, CRT-Ps, or CRT-Ds must directly supervise the MRI scan as defined in 42 CFR § §410.28 and 410.32;
• patients are observed throughout the MRI scan via visual and voice contact and monitored with equipment to assess vital signs and cardiac rhythm;
• an advanced cardiac life support provider must be present for the duration of the MRI scan;
• a discharge plan that includes before being discharged from the hospital/facility, the patient is evaluated and the implanted pacemaker, ICD, CRT-P, or CRT-D is reinterrogated immediately after the MRI scan to detect and correct any abnormalities that might have developed.

For Medicare patients with implanted PMs, ICDs, CRT-Ps, or CRT-Ds undergoing MRIs both on and off FDA label, providers should report the appropriate MRI code and ICD-10 diagnosis code Z95.0 for cardiac pacemakers and CRT-Ps or code Z95.810 for ICDs and CRT-Ds.

Since the changes to the NCD also include removal of the Coverage with Evidence Development (CED) requirement, the -Q0 and -KX modifiers on claims for MRIs for patients with an implanted pacemaker are no longer required effective April 10, 2018.

These NCD changes expand the benefits of diagnostic MRI studies to Medicare patients with certain cardiac devices. Radiology personnel must still be mindful of potential complications from metallic objects and MRIs. For example, the NCD lists a contraindication for patients with metallic clips on vascular aneurysms. Toy magnets are fun to play with and big magnets have many valuable uses – as long as we remain aware of the dangers.

MEDICARE TRANSMITTALS – RECURRING UPDATES

 Changes to the Laboratory National Coverage Determination (NCD) Edit Software for January 2019

The January 2019 quarterly release of the edit module for clinical diagnostic laboratory services.

https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/MM10941.pdf

Quarterly Influenza Virus Vaccine Code Update - January 2019

https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2018Downloads/R4141CP.pdf

2019 Annual Update of Healthcare Common Procedure Coding System (HCPCS) Codes for Skilled Nursing Facility (SNF) Consolidated Billing (CB) Update

Updates to edits to allow only those services that are excluded from SNF CB to be paid separately.

https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/MM10981.pdf

Notice of New Interest Rate for Medicare Overpayments and Underpayments - 1st Qtr Notification for FY 2019

The Medicare contractors shall implement an interest rate of 10.125 percent effective October 17, 2018 for Medicare overpayments and underpayments.

https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2018Downloads/R307FM.pdf

OTHER MEDICARE TRANSMITTALS

Implementation of the Award for the Jurisdiction F (J-F) Part A and Part B Medicare Administrative Contractor (JF A/B MAC)

The Jurisdiction JF A/B MAC recompetition procurement was recently awarded to Noridian Healthcare Solutions, LLC (Noridian), the incumbent contractor for this workload.

https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2018Downloads/R2143OTN.pdf

Guidance Regarding the Use of Statistical Sampling for Overpayment Estimation

Updates instructions for Unified Program Integrity Contractors (UPICs), Recovery Audit Contractors (RACs), the Supplemental Medical Review Contractor (SMRC), and Medicare Administrative Contractors (MAC) regarding the use of statistical sampling in their reviews and estimation of overpayments.

https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2018Downloads/R828PI.pdf

Local Coverage Determinations (LCDs)

CMS is updating the Medicare Program Integrity Manual with detailed changes to the Local

Coverage Determination (LCD) process.

https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/MM10901.pdf

Fiscal Year (FY) 2019 Inpatient Prospective Payment System (IPPS) and Long-Term Care Hospital (LTCH) PPS Changes

Implements Fiscal Year (FY) 2019 policy changes for the Inpatient Prospective Payment System (IPPS) and LTCH PPS.

https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/MM10869.pdf

Updating Calendar Year (CY) 2019 Medicare Diabetes Prevention Program (MDPP) Payment Rates

This MLN Matters Article is intended for organizations enrolled as Medicare Diabetes Prevention Program (MDPP) suppliers billing Medicare Administrative Contractors (MACs) for MDPP services provided to Medicare beneficiaries.

https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/MM10970.pdf

Medical Review of Diagnostic Laboratory Tests

Clarifies how medical review contractors should review orders for diagnostic laboratory test claims.

https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2018Downloads/R836PI.pdf

MEDICARE SPECIAL EDITION ARTICLES

Activation of Systematic Validation Edits for OPPS Providers with Multiple Service Locations

Medicare systems will validate service facility location to ensure services are being provided in a Medicare enrolled location based on the information submitted on the Form CMS-855A submitted by the provider and entered into the Provider Enrollment, Chain and Ownership System (PECOS).

https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/SE18023.pdf

2018-2019 Influenza (Flu) Resources for Health Care Professionals

https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/SE18015.pdf

MEDICARE COVERAGE UPDATES

 Magnetic Resonance Imaging (MRI)

Effective for claims with dates of service on and after April 10, 2018, Medicare will allow for MRI coverage for beneficiaries with an Implanted Pacemaker (PM), Implantable Cardioverter Defibrillator (ICD), Cardiac Resynchronization Therapy Pacemaker (CRT-P), or Cardiac Resynchronization Therapy Defibrillator (CRT-D).

https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/MM10877.pdf

MEDICARE PRESS RELEASES

 2019 Medicare Parts A & B Premiums and Deductibles

The standard monthly premium for Medicare Part B enrollees will be $135.50 for 2019. The annual deductible for Medicare Part B beneficiaries is $185 in 2019. The Medicare Part A inpatient deductible that beneficiaries will pay when admitted to the hospital is $1,364 in 2019.

https://www.cms.gov/newsroom/fact-sheets/2019-medicare-parts-b-premiums-and-deductibles

MEDICARE EDUCATIONAL RESOURCES

October 2018 Medicare Quarterly Provider Compliance Newsletter

Assists health care professionals to understand the latest findings identified by MACs and other contractors such as Recovery Auditors and the Comprehensive Error Rate Testing (CERT) review contractor, in addition to other governmental organizations such as the Office of the Inspector General (OIG).

https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/Downloads/MedQtrlyComp-Newsletter-MLN8893947.pdf

Medicare Fast Facts

Medicare Fast Facts resources this month include:

• Proper Use of the KX Modifier for Part B Immunosuppressive Drug Claims

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

September 2018 Patients Over Paperwork Newsletter

An update on CMS’s ongoing work to reduce administrative burden and improve the customer experience while putting patients first.

https://www.cms.gov/Outreach-and-Education/Outreach/Partnerships/POPSeptember2018Newsletter.pdf

What’s the difference between nice and kind? Nice is treating others respectfully while kindness involves a deeper caring for others. A recent television commercial presents that it is related to a particular type of snack bar. If you go for the snack bar analogy, what about healthcare coverage? One might say that Medicare coverage for the elderly is a nice program, and that Medicaid for those with limited income and resources is a kind program. I suppose that makes dual eligibility programs both nice and kind.

Some hospital patients will have both Medicare and Medicaid medical coverage. Certain qualified Medicare beneficiaries (known as dual eligible or QMB patients) meet criteria to get help with their Medicare premiums and cost-sharing. According to CMS’s QMB Program webpage, “In 2016, 7.5 million people (more than one out of eight people with Medicare) were in the QMB program.” Because of this program, providers, including hospitals, must bill the state Medicaid program for the patient’s Medicare deductible and co-pays. Patients in the QMB program are not legally obligated to pay providers for any Medicare cost-sharing, even if Medicaid does not pay the entire amount. The webpage noted above also reports that historically there has been confusion and billing errors related to the QMB program. I can certainly understand – dealing with Medicare rules by themselves is challenging enough – the challenge doubles when there are two government payers. I recommend billers mark the QMB webpage for future reference. It offers numerous resources and information about the QMB program, such as a list of QMB Frequently Asked Questions.

One new question and answer in the QMB FAQs deals with billing limitations and special instructions when an Advance Beneficiary Notice (ABN) is given to a dual eligible patient. An ABN is given to a Medicare patient when the item or service being provided is expected to be denied by Medicare as not reasonable and necessary (medical necessity denial). The ABN notifies patients they will be financially liable for the service and allows them the option to elect to have the service or not. When presenting an ABN to a dually eligible Medicare/Medicaid patient, the provider:

• Directs the patient to select Option 1, which requires a claim be submitted to Medicare for an official decision on payment. (Note: This is the only time a provider may direct a patient as to which option to select.)
• CANNOT require payment from the patient at the time of the service. In fact, the provider cannot bill the patient until the claim is adjudicated by both Medicare and Medicaid.
• Submits a cross-over claim to Medicaid if Medicare denies payment.
• Can shift liability to the patient based on Medicare policy and state laws if the claim is denied by Medicare as not medically necessary and if coverage is denied by Medicaid (or not paid for other reasons).

Dual eligible patients are also liable for Medicare statutorily excluded services if the patient or the services are not covered by Medicaid. Although an ABN is not required to be given for statutorily excluded services, it is a nice courtesy to ensure patients are aware of their potential financial liability. Or maybe even kind. The world certainly needs more niceness and kindness.

The designation of an ICD-10-PCS code designated as an O.R. or Non-O.R. procedure affects the MS-DRG assignment. Codes designated as an O.R. procedure will group the inpatient stay to a surgical MS-DRG. Codes designated as Non-O.R. procedures would not impact the MS-DRG assignment so the inpatient stay would be grouped to a Medical MS-DRG. In general, surgical MS-DRGs are a higher relative weight meaning higher payment for the inpatient stay.

The transition of procedure code re-designation began with CMS including proposals in the FY 2017 IPPS Proposed Rule.  In the FY 2017 IPPS Final Rule, CMS indicated they had received requests and recommendations for over 800 procedure codes and were unable to fully evaluate and finalize comments received for FY 2017. A year later, allowing for time to evaluate requests and recommendations, CMS did in fact propose to re-designate over 800 current ICD-10-PCS codes as Non-O.R. Procedures in the Proposed Rule and finalized 770+ code re-designations.

CMS noted “the proposed changes for FY 2018 go beyond the FY 2017 proposed (and finalized) MS-DRG updates to change the designation of procedure codes from O.R. to non-O.R. that were done for purposes of replicating the logic of the ICD-9 MS-DRGs….for FY 2018 and future fiscal years, we are no longer replicating the ICD-9 MS-DRGs…we are using ICD-10 coded claims data for the first time to propose changes to the ICD-10 MS-DRG classifications and to compute the relative weights. Therefore, our proposals and final policies for FY 2018 are based solely on the ICD-10 claims data from the FY 2016 MedPAR file.”

FY 2019 IPPS Final Rule

CMS continued reviewing ICD-10 claims data for FY 2019 and finalized the re-designation of nine (9) ICD-10-PCS codes from O.R. Procedures to Non-O.R. Procedures and seventy (70) ICD-10-PCS codes from Non-O.R. to O.R. The following two tables detail the volume of codes changed by Code Group. 

 Potential Financial Impact of Changes

In the absence of a valid O.R. Procedure code, hospitals will still receive reimbursement for the Medical Principal Diagnosis. The challenge is to identify the potential financial impact of the MS-DRG shift from a Surgical MS-DRG to a Medical MS-DRG. To do this I turned to our sister company, RealTime Medicare Data (RTMD) to provide the CY 2017 paid claims data for Alabama for all ICD-10-PCS codes with an O.R. Procedure re-designation where it was the Principal Procedure on the paid claim. This following table highlight the O.R. to Non-O.R. Re-designation findings.

MMP conducted a similar review of the changes made in FY 2018. Through claims analysis we were able to identify the Medical MS-DRG that would have been billed in the absence of the O.R. procedure. In general, we found that hospitals could expect anywhere from a 35% to 45% decrease in payment. Applying the same findings to FY 2019, that would equate to the state of Alabama realizing a potential $1.6 million to $2.1 million decrease in paid claims revenue.

This last table highlights the Non-O.R. to O.R. re-designation findings.

 If you reverse the expected decrease in payment to an expected increase of 35% to 45%, this would equate to the state of Alabama realizing a potential $271,000 to $348,000 increase in paid claims revenue.

For those interested, detailed discussion about the ICD-10-PCS code re-designations can be found on pages 41249 through 41257 of the Final Rule.  

Q:

We have a new physician that wants to use isoproterenol injections for ablation procedures.  Is there a HCPCS code for this drug as an injectable?  If there is not a specific code for it, would this drug qualify for the C9399 code? Is there any reimbursement for this drug? It is high cost and we want to evaluate the financial impact of using it.

A:

Isoproterenol has been around for years, so C9399 would not be applicable unless there is a formulation one of the drug newly released from the FDA.

There are HCPCS codes available for the inhalation form of isoproterenol, but I am not aware of a HCPCS code for the injectable form.  Without a HCPCS code, you will have to report the drug without a HCPCS code and revenue code 250, thus, no separate reimbursement for that line item drug.