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Several years ago, there was a lot of excitement among laboratories and hospitals when CMS stated that a laboratory requisition did not have to be signed by the ordering practitioner. That excitement was short-lived however, when it became apparent that the lack of a signature requirement for lab requisitions did not mean a signed order for the laboratory testing was not required. Upon medical review by a Medicare contractor, the billing entity (such as the hospital) was required to submit a signed practitioner’s order, or other documentation, such as an office progress note, supporting the intent to order the specific laboratory tests. Many laboratories quickly realized it was easier and more efficient to continue to require the physician’s signature on the lab requisition.

Bearing this cautionary tale in mind, what does the proposed policy change to remove the requirement that written inpatient admission orders are a specific requirement for Medicare Part A payment actually mean for hospitals? I certainly do not think it means you no longer need an order for inpatient admission.

In fact, the 2019 Inpatient Prospective Payment System (IPPS) proposed rule states, “This proposal does not change the requirement that an individual is considered an inpatient if formally admitted as an inpatient under an order for inpatient admission.”

What it does mean is a shift in the focus of Medicare reviewers away from the admission order itself. The Proposed Rule affirms that Medicare reviewers will focus on the medical necessity of the inpatient services. The wording in the proposed rule also provides hints as to the types of “technical discrepancies” reviewers may overlook, such as:

• Missing practitioner admission signatures,
• Missing authentication signatures or co-signatures, or
• Signatures occurring after discharge.

Reviewers may also be more willing to allow payment for inpatient admissions when there is not an admission order but “the intent, decision, and recommendation of the ordering physician or other qualified practitioner to admit the beneficiary as an inpatient can clearly be derived from the medical record.” This should still be a rare occurrence because hospitals are expected to comply with the Medicare Conditions of Participation which require an admission order.

The rule change for admission orders does not change the “two-midnight” policy. This change, if finalized, will allow hospital personnel to concentrate on ensuring documentation is present in the record to support the medical necessary expectation of a two-midnight stay instead of chasing physicians to obtain signatures before the patient is discharged.

Q:

What is the “Approach” for a needle aspiration of Bone Marrow from a lumbar vertebra when performed during an open lumbar spinal fusion?

A:

The operative “Approach” for needle aspiration of Bone Marrow would be assigned to “Open”.  This would not be considered a “Percutaneous” approach because the aspiration did not cut through the skin.  The code assigned would be 07DS0ZZ, Extraction of Vertebral Bone Marrow, Open Approach

In addition, needle aspiration of bone marrow from the iliac crest is commonly performed during spinal fusions and would be assigned to 07DR0ZZ, Extraction of Iliac Bone Marrow, Open Approach.  This would be reported once even if performed bilaterally.  

Resources:

Coding Clinic, Third Quarter 2016, page 41

Coding Tip: Biopsy Coding in PCS When Fluid is Aspirated; Kim Carrier, Health Information Associates

As I write this article, I realize the word “challenge” appears frequently in my articles. How could it not? Dealing with Medicare is a lot of things, but always a challenge. Especially since Medicare tends to change their guidance often and without warning. Sometimes guidance changes are couched as “clarifications” and sometimes providers wait and hope for additional guidance that seems to take forever to come.  Such is the case with Medicare’s transmittal that manualizes the new laboratory date of service policy from the 2018 Outpatient Prospective Payment System (OPPS) Final Rule. The good news is that this transmittal includes a list of codes to which the new policy applies, which was not clear from the discussion in the final rule.

Prior to the new lab date of service policy, hospitals had to bill Medicare directly for all outpatient laboratory tests unless the test was ordered at least 14 days following the date of the patient’s discharge from an outpatient hospital procedure. This policy created unintentional operational consequences for hospitals and testing laboratories when molecular pathology tests and ADLTs, that are separately paid at the clinical lab fee schedule (CLFS) rate and not under the hospital OPPS rate, were performed on specimens collected during a hospital outpatient encounter. CMS recognized the concerns and in the 2018 OPPS Final Rule, changed the lab date of service policy as follows:

“In the case of a molecular pathology test or an Advanced Diagnostic Laboratory Test (ADLT) that meets the criteria of section 1834A(d)(5)(A) of the Act, the date of service must be the date the test was performed only if the following conditions are met:

• The test is performed following a hospital outpatient’s discharge from the hospital outpatient department;
• The specimen was collected from a hospital outpatient during an encounter (as both are defined 42 CFR 410.2);
• It was medically appropriate to have collected the sample from the hospital outpatient during the hospital outpatient encounter;
• The results of the test do not guide treatment provided during the hospital outpatient encounter; and
• The test was reasonable and medically necessary for the treatment of an illness.

This new exception to laboratory DOS policy will permit laboratories performing ADLTs and molecular pathology tests excluded from the Outpatient Prospective Payment System (OPPS) packaging policy to bill

Medicare directly for those tests, instead of requiring them to seek payment from the hospital outpatient department.” In fact, under the new policy the testing lab must bill for the applicable tests; the hospital can no longer bill Medicare directly for these tests.

In the final rule, CMS appeared to exclude some lab tests that now are included according to Transmittal 4000 – the final rule stated, “we are not including ADLTs under Criterion (B), GSP (genomic sequencing procedures) tests, PLA (proprietary laboratory analysis) tests, or protein-based MAAAs (multianalyte assays with algorithmic analyses) in the revised DOS policy at this time.” In CMS’s defense, I think they meant GSP, PLA, and MAAA laboratory tests that are conditionally packaged under OPPS. All ADLT and molecular pathology-type codes that are conditionally packaged laboratory tests codes under OPPS are not included in the new policy – only separately payable molecular path and ADLT test codes with an OPPS status indicator of “A” are included. As noted above, the transmittal includes a list of codes to which the policy applies –-

• CPTs 81105-81383, 81400-81408, 81410-81479, 81493, 81504, 81507, 81519–81528, 81540-81595, 0004M, 0006M–0009M, 0001U, 0004U, 0008U, 0010U, 0012U–0014U, 0016U–0019U, 0022U, and 0023U. (0004U was deleted effective January 1, 2018, but is included in Medicare’s listing.)

This new policy prevents hospitals from having to bill Medicare directly for these types of tests which encompassed accepting Medicare CLFS payment rates and paying a reference laboratory their charges to perform the tests. Under the new policy, Medicare pays the CLFS rate directly to the testing laboratory. Hospital labs will have to be aware of which tests fall under this policy (testing lab bills Medicare) and which do not (hospital lab bills Medicare directly). Also, hospitals must develop a process to provide the patients’ billing information to the testing lab in order for the testing lab to bill Medicare.

The transmittal is effective for dates of service on and after January 1, 2018, but the implementation date of the transmittal is not until July 2, 2018. I recommend hospitals proceed now with allowing the testing laboratory to bill for the applicable services. Should Medicare deny any payments prior to the implementation date, the transmittal allows for correction of the claim payment when brought to the Medicare contractor’s attention. Alternatively, testing labs may hold such claims until after the implementation date.

The challenge continues as we try to read between the lines, make our best guess, and remain prepared for CMS “clarifications” in order to code, bill and document correctly to meet Medicare guidelines. In my line of work, I guess this translates to job security.

We hope our readers find our articles helpful in understanding the ins and outs of dealing with Medicare. We provide the latest updates on Medicare issues and dig deep into the more complex or unclear topics. Did you know all of our prior articles can be found under the Knowledge Base tab on our website at www.mmplusinc.com ? This page includes a search function that allows viewers to search by title, category, text keyword or date. One of our most popular prior articles, based on internet search traffic, is the “type of bill” article from 2014. Today, we are rerunning a slightly revised version of that article as a reminder of exactly what a type of bill is and the appropriate TOB for the various types and settings of healthcare.

A ‘type of bill’ designation is required on the institutional uniform billing form known as a UB-04 or CMS-1450. Chapter 25 of the Medicare Claims Processing Manual, section 70.1 describes the form as:

“… a uniform institutional provider bill suitable for use in billing multiple third party payers. Because it serves many payers, a particular payer may not need some data elements. The National Uniform Billing Committee (NUBC) maintains lists of approved coding for the form. Medicare Administrative Contractors servicing both Part A and Part B lines of business (A/B MACs (A) and (HHH)) responsible for receiving institutional claims also maintain lists of codes used by Medicare.”

The type of bill goes in field (FL) 4 on the UB-04. Type of bill consists of four digits, the first digit being zero. This leading zero is ignored by Medicare for processing and is usually dropped when discussing bill types. The second digit identifies the type of facility and the third classifies the type of care being billed.  For example, claims with a second digit of “1” are hospital claims, such as 011x or 013x.

The fourth digit of the TOB indicates the sequence of the bill for a specific episode of care as defined below:

• “0” indicates a non-payment/zero claim. For example, if a facility determines an inpatient admission is not medically necessary after discharge, they would first submit a no-pay/provider liable inpatient claim, a 110 TOB. After denial, they would then submit a Part B inpatient claim (TOB 121) to receive payment for the Part B services furnished.
• “1” is for an admit-through-discharge claim.
• “2” is the first interim claim in a series of claim when the patient is expected to remain in a facility for an extended period of time or is receiving outpatient recurring services, such as physical therapy.
• “3” is a continuing claim in a series of claims.
• “4” indicates the last claim in a series.
• “5” is used as the last digit for late charges only claims.
• “7” is a replacement claim to be used when a previously finalized claim needs to be rebilled entirely such as corrected or adjustment claims.
• “8” is used to cancel a claim.

There are some additional fourth characters for special providers such as hospice and home health.

As usual with Medicare, nothing is as straight forward as it seems. Be sure to read the Medicare manual and other resources to ensure you are using the type of bill codes correctly.  For example, Medicare Claims Processing Manual, Chapter 1, section 50.2 discusses Frequency of Billing for Providers.

MEDICARE TRANSMITTALS

Adjustments to Qualified Medicare Beneficiary (QMB) Claims Processed Under CR 9911

Directs MACs to mass adjust QMB claims impacted by CR9911.
https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/MM10494.pdf

April 2018 Integrated Outpatient Code Editor (I/OCE) Specifications Version 19.1 – REVISED

Revised to correct the status indicator for the drug code J0606 from SI=G to SI=K.
https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/MM10514.pdf

April 2018 Update of the Hospital Outpatient Prospective Payment System (OPPS) - REVISED

Updated the number of drugs and biologicals with OPPS pass-through status effective April 1, 2018, from twelve to eleven and removed HCPCS code J0606, Injection, etelcalcetide, 0.1 mg, from Table 5, Attachment A in the CR since its status indicator remains "K" for the April update.
https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/MM10515.pdf

Claims Processing Actions to Implement Certain Provisions of the Bipartisan Budget Act of 2018

Provides direction to MACs to reprocess claims related to several provisions of the Bipartisan Budget Act of 2018, specifically the Ambulance add-on payment provisions, the Work Geographic Practice Cost Index (GPCI) Floor, the 3% Home Health (HH) Rural Add-on Payment, and the repeal of outpatient therapy caps with requirement to submit the KX modifier for services in excess of the prior cap amounts.
https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/MM10531.pdf

Institutional Billing for No Cost Items

Provides clarification of the billing instructions specific to drugs provided at no cost when claims processing edits prevent drug administration charges from being billed when the claim does not contain a covered/billable drug charge.
https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/MM10521.pdf

New Waived Tests

New Clinical Laboratory Improvement Amendments of 1988 (CLIA) waived tests approved by the Food and Drug Administration (FDA).
https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/MM10586.pdf

Supervised Exercise Therapy (SET) for Symptomatic Peripheral Artery Disease (PAD) – REVISED

Clarifies that the SET program must be provided in a physician’s office (Place of Service code 11).
NOTE:  MMP contacted CMS and was informed another revision of this CR would be forthcoming.
https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/MM10295.pdf

Quarterly Update to the National Correct Coding Initiative (NCCI) Procedure-to-Procedure (PTP) Edits, Version 24.2 Effective July 1, 2018

https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/MM10593.pdf

Change in Type of Service (TOS) for Current Procedural Terminology (CPT) Code 77067

Corrects the TOS indicator assigned to CPT code 77067 – Screening Mammography to “1” instead of “4” to allow screening mammography claims to be billed without referring physician information on the claim, consistent with Medicare’s coverage policy for screening mammograms.
https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/MM10607.pdf

Notice of New Interest Rate for Medicare Overpayments and Underpayments - 3rd Qtr Notification for FY 2018

Medicare contractors shall implement an interest rate of 10.25 percent effective April 17, 2018 for Medicare overpayments and underpayments.
https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2018Downloads/R303FM.pdf

Internet Only Manual Update to Pub 100-04, Chapter 16, Section 40.8 - Date of Service Policy

Updates the Date of Service (DOS) Policy for Clinical Laboratory and Pathology Specimens
https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2018Downloads/R4000CP.pdf

Quarterly Healthcare Common Procedure Coding System (HCPCS) Drug/Biological Code Changes – July 2018 Update

Quarterly update of drug/biological HCPCS codes.
https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNmattersArticles/downloads/MM10624.pdf

MEDICARE SPECIAL EDITION ARTICLES

Prohibition Billing Dually Eligible Individuals Enrolled in the Qualified Medicare Beneficiary (QMB) Program - REVISED

Updates information about the Remittance Advice (RA) and Medicare Summary Notice (MSN) for all Medicare Fee-For-Service (FFS) QMB claims and includes new statistics on the number of beneficiaries enrolled in QMB.
https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/SE1128.pdf

Proper Coding for Specimen Validity Testing Billed in Combination with Drug Testing

Reminds laboratories and other providers performing validity testing on urine specimens utilized for drug testing not to separately bill the validity testing.
https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/SE18001.pdf

MEDICARE COVERAGE UPDATES

Decision Memo for Magnetic Resonance Imaging (MRI) (CAG-00399R4)

Evidence is sufficient to conclude that magnetic resonance imaging (MRI) for Medicare beneficiaries with an implanted pacemaker (PM), implantable cardioverter defibrillator (ICD), cardiac resynchronization therapy pacemaker (CRT-P), or cardiac resynchronization therapy defibrillator (CRT-D) is reasonable and necessary. Will modify current NCD to eliminate the collection of additional information under the Coverage with Evidence Development paradigm.
https://www.cms.gov/medicare-coverage-database/details/nca-decision-memo.aspx?NCAId=289&TimeFrame=7&DocType=All&bc=AgAAYAAAQAAA&

OTHER MEDICARE UPDATES

New Proposed RAC Review Topics – April 2018

April 2018 proposed topics include:

• Exact Duplicate Claims
• Implantable Automatic Defibrillators
• Group 3 Support Surfaces
• Percutaneous Implantation of Neurostimulator Electrode Array

https://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/Recovery-Audit-Program/Provider-Resources.html

March Patients Over Paperwork Newsletter

https://www.cms.gov/Outreach-and-Education/Outreach/Partnerships/Downloads/MarchPoPNewsletter032618.pdf

New OIG Compliance Resource Portal

OIG launches new compliance resource portal that provides links to handy resources for the public that can help ensure that you are in compliance with Federal health care laws.
https://oig.hhs.gov/compliance/compliance-resource-portal/

The Outpatient Prospective Payment System (OPPS) final rule is released each year around the first of November, and that only gives hospitals two months (during an already busy and short-staffed holiday season I might add) to implement the new requirements for the coming year. Sometimes this means beginning to make changes before final guidance and addenda are available – a good way to get a jump on necessary revisions. The caution for this approach is to be sure to check any additional guidance and revised addenda prior to implementation and make the necessary adjustments.

For example, the 2018 OPPS final rule required the reporting of modifiers for drugs purchased through the 340B drug discount program. Modifier JG is reported with separately payable drugs with a status indicator of “K” by most hospitals purchasing drugs through the 340B program. The JG modifier causes Medicare payment to be made at average sale price (ASP) minus 22.5%, instead of the ASP +6% that is paid for separately payable drugs not purchased through the 340B program and a few other exceptions. Modifier TB is reported on the applicable drugs by certain excepted types of providers (rural sole-community hospitals, children’s hospitals and cancer hospitals) and for pass-through drugs which have a status indicator of “G.” If your hospital proactively added the applicable modifiers to your chargemaster, did you remember to verify that the status indicator for each drug did not change for 2018?

In claim review, MMP has observed some drugs, whose status indicator changed from “G” in 2017 to “K” in 2018, being reported with the incorrect modifier. Status indicator “G” pass-through drugs purchased through the 340B program are reported with a TB modifier, but once their SI changes to “K” they are to be reported with a JG modifier resulting in a reduced drug payment. Below is a table of those drugs that had a status indicator of “G” for 2017 that changed to “K” for 2018.

Hospitals may want to verify again that the modifiers they are reporting for drugs purchased through the 340B program are correct and appropriate based on the drug’s OPPS status indicator. When billing Medicare, it is a good idea to check and double-check as things can change in an instant.

“Observation care services are covered only when provided by the order of a physician or another individual authorized by state licensure law and hospital staff bylaws to admit patients to the hospital or to order outpatient tests. These services must be deemed reasonable and necessary to be covered by Medicare. Please share with appropriate staff.”

• Source: Palmetto GBA JJ April 10, 2018 Daily Newsletter

Palmetto GBA, the Jurisdiction J (JJ) Medicare Administrative Contractor (MAC) included the above statement in their April 10, 2018 Daily Newsletter. The reminder also included a link to an article about Observation Care on the Palmetto GBA website.

Given that Palmetto GBA started the conversation, MMP would also like to make appropriate staff aware of the fact that there is a new JJ Outpatient Observation Bed/Room Services (L34552) Local Coverage Determination (LCD). This article will walk you through LCD L34552.

LCD Coverage Indications, Limitations and/or Medical Necessity

Observation Services: What it is?

• “Observation services are defined as the use of a bed and periodic monitoring by a hospital's nursing or other ancillary staff, which are reasonable and necessary to evaluate an outpatient's condition to determine the need for possible inpatient admission.”

• “The services may be considered covered only when provided under a physician's order (or under the order of another person who is authorized by state statute and the hospital's bylaws to admit patients or order outpatient testing).”

• “Outpatient observation services must be patient specific and not part of the facilities standard operating procedure or protocol for a given diagnosis or service. Observation services, generally, do not exceed 24 hours.”

Observation Services: What it is not?

• “Outpatient observation services are not to be used as a substitute for medically necessary inpatient admissions. Outpatient observation services are not to be used for the convenience of the hospital, its physicians, patients, or patient's families, or while awaiting placement to another health care facility.”

Documentation Palmetto expects to find in the Medical Record

LCD L34552 includes the following five elements that need to be included in the medical record when a patient is receiving Observation Services:

1. “The attending physician's order including “clock time” for the observation service or “clock time” can be noted in the nursing admission notes/observation unit notes outlining the patient’s condition and treatment.

2. Observation time which begins at the clock time documented in the patient’s medical record, and which coincides with the time the patient is placed in a bed for the purpose of initiating observation care in accordance with a physician’s order.

3. The ending time for observation occurs either when the patient is discharged from the hospital or is admitted as an inpatient. The time when a patient is “discharged” from observation status is the clock time when all clinical or medical interventions have been completed, including any necessary follow-up care furnished by hospital staff and physicians that may take place after a physician has ordered that the patient be released or admitted as an inpatient. However, observation care does not include time spent by the patient in the hospital subsequent to the conclusion of therapeutic, clinical, or medical interventions, such as time spent waiting for transportation to go home.

4. The beneficiary is under the care of a physician during the period of observation as documented in the medical record by admission, discharge, and appropriate progress notes.

5. Risk stratification criteria (such as intensity of service and severity of illness) were used in considering potential benefits of observation care.”

Observation Services Triggering Medical Review

Tucked between the Coverage Indications, Limitations and/or Medical Necessity and the Categories of Observation Services is to me one of the most important sentences in this LCD: 

“Observation claims exceeding 48 hours may be subject to medical review.”

So why 48 hours, in the related Observation Care article mentioned previously? Palmetto notes that CMS has indicated that “In the majority of cases, the decision whether to discharge a patient from the hospital following resolution of the reason for the observation care or to admit the patient as an inpatient can be made in less than 48 hours, usually in less than 24 hours. In only rare and exceptional cases do reasonable and necessary outpatient observation services span more than 48 hours.”

Additionally, with the implementation of the 2-Midnight Rule effective October 1, 2013, outpatient observation services spanning greater than 48 hours should be closely followed to convert to Inpatient when appropriate or work with the Physician to determine why he/she believes the patient is continuing to require observation care.

Outpatient Observation Services Categorized

The LCD indicates that outpatient observation services fall into one of three categories.

1. Diagnostic Testing

Under this category, for scheduled invasive outpatient diagnostic tests, routine preparation and immediate recovery after the test is not considered to be an observation service. If further monitoring is required as a result of a significant adverse reaction from the test then outpatient observation services may be reasonable and necessary.

“Observation services begin at that point in time when the reaction occurred and would end when it is determined whether or not the patient required inpatient admission. Medical review decisions will be based on the documentation in the patient’s medical record.”

2. Outpatient Therapeutic Services

“Observation status does not apply when a beneficiary is treated as an outpatient for the administration of blood only and receives no other medical treatment. The use of the hospital facilities is inherent in the administration of the blood and is included in the payment for administration.

When the patient has been scheduled for ongoing therapeutic services as a result of a known medical condition, a period of time is often required to evaluate the response to that service. This period of evaluation is an appropriate component of the therapeutic service and is not considered an observation service.

The observation service begins at that point in time when a significant adverse reaction occurred that is above and beyond the usual and expected response to the service.”

3. Patient Evaluation
   “When a patient arrives at the facility with an unstable medical condition (generally via the Emergency Department), observation services may be reasonable and necessary to evaluate the medical condition to determine the need for a possible admission to the hospital as an inpatient.
   
   An unstable medical condition can be defined as:
   · variance from generally accepted normal laboratory values; and
   · clinical signs and symptoms present that are above or below those of normal range (for the patient) and are such that further monitoring and evaluation is needed. Changes in the patient's status or condition are anticipated and immediate medical intervention may be required.
   
   Documentation in the patient's medical record must support the medical necessity of the observation service.

Inpatient Status Changed to Observation Status is a No Go without Condition Code 44

While this LCD does not mention Condition Code 44, it does include the following statement:
“Upon internal review performed before the claim was initially submitted and upon the hospital determining that the services did not meet its inpatient criteria, an inpatient status may not be automatically changed to observation status. An observation stay must adhere to the criteria as described in the “Coverage Indications, Limitations and/or Medical Necessity” section of this LCD.”

Documentation Requirements

When reading an LCD I often jump to the end where you find the “Documentation Requirements” detailing what the MAC expects to find when reviewing a record for medical necessity of the services provided. Specific to this LCD, “documentation must be legible, relevant and sufficient to justify the services billed. The documentation for Outpatient Observation must include:

1. The attending physician's order including “clock time” for the observation service or “clock time” can be noted in the nursing admission notes/observation unit notes outlining the patient’s condition and treatment.
2. The physician's admission/progress note which clearly indicates the patient's condition, signs and symptoms that necessitate the observation stay.
3. Supporting ancillary reports such as laboratory and diagnostic test reports.

Legible documentation in the medical record must clearly support the medical necessity and reasonableness of the observation services. The documentation should clearly state the method of assessment during observation and, if necessary, treatment in order to determine if the patient should be admitted or may be safely discharged.”

Key Takeaways for Providers

The three major points Providers need to be mindful of when internally reviewing outpatient claims where the beneficiary was receiving observation services are: 

• To support medical necessity of an outpatient stay receiving observation services, the medical record should include the following elements:

1. A timed order for observation services,
2. Physician documentation indicating a patient’s condition, signs and symptoms necessitating observation services.
3. All ancillary reports supporting the patient evaluation (i.e. labs and diagnostic test results).

• An inpatient status may not automatically be changed to an “observation stay.” If the patient was still in house at the time this determination was made you would need to follow Condition Code 44 guidance. You can access further guidance specific to Condition Code 44 in MLN Matters Article SE0622.

• “Observation claims exceeding 48 hours may be subject to medical review.” Make patients receiving observation services a priority for your Utilization Review staff.

Q:

We understand that effective January 1, 2018, hospital outpatient facilities are required to use the “FY” modifier with the applicable HCPCS code(s) to describe an imaging service that is an X-ray taken using computed radiography technology. Do we need to report the “FY” modifier if an imaging study includes computed radiography x-rays and digital radiography images?

A:

No.  CMS clarified in the April 2018 OPPS Update Transmittal that the “FY” modifier is not required when the imaging service is comprised of multiple images that include both X-rays taken using computed radiography technology and images taken using digital radiography.

Modifier “FY” (X-ray taken using computed radiography technology/cassette-based imaging) is to be used with the applicable HCPCS code(s) to describe an imaging service that is an X-ray taken using computed radiography technology.  The application of the modifier results in a payment reduction of 7% for calendar years 2018-2022, and 10% in 2023 and after. The payment adjustment applies to an imaging service that is an X-ray taken using computed radiography technology where the X-ray taken using computed radiography technology is not combined with digital radiography in the same imaging service.

The payment reduction is a result of provisions of the Consolidated Appropriations Act, 2016 designed to incentivize the transition from traditional X-ray imaging to digital radiography.

What do you have on your bedside table - an alarm clock, a lamp, perhaps a good book to lull you to sleep? A new addition to many bedside tables over the past few decades is a C-PAP (continuous positive airway pressure) machine for the treatment of sleep apnea. In recent years, the incidence of sleep apnea and C-PAP usage in the United States has increased significantly, likely due in part to the obesity epidemic, increased sleep testing, and the coming of age of the more health-conscious baby boomers. Sleep apnea is not to be taken lightly – the cost in health effects, productivity, and healthcare dollars is staggering.  Some fascinating information on these topics from an internet search include:

American Academy of Sleep Medicine (AASM) 2014 Article

• Sleep apnea afflicts at least 25 million adults in the U.S., according to the National Healthy Sleep Awareness Project. It is now estimated that 26 percent of adults between the ages of 30 and 70 years have sleep apnea.
• Obstructive sleep apnea increases the risk of high blood pressure, heart disease, Type 2 diabetes, stroke and depression.

AASM 2018 Article

• More than 37% of workers (are) sleep-deprived (contributing to) cognitive declines, heightened safety risks and increased economic costs.
• According to the National Safety Council (NSC), sleepy workers are estimated to cost employers $136 billion a year in health-related lost productivity.
• About 13% of work injuries are attributable to sleep deprivation.
• The National Transportation Safety Board (NTSB) estimates that fatigue has been a contributing factor in 20 percent of its (driving-related) investigations over the last two decades.

Wiley Online Library "The Laryngoscope" 2017 Article

• In 2014, 845,569 sleep studies were completed by 1.4% of Medicare beneficiaries for a total of $189 million.
• Since 2010, the number of studies performed has increased by 9.1%.

Sleep Review Journal 2017 Article

• The sleep testing services market is expected to be valued at $8,395.7 million by the end of 2021, reflecting a compound annual growth rate of 12.9% during the forecast period (2016–2021), according to a report by Persistence Market Research.
• The growth of the North America sleep services market is driven by favorable reimbursement policies and high awareness of sleep disease.

Another recent trend related to sleep apnea and sleep testing is the change in credentialing requirements by some Medicare Administrative Contractors (MACs) for hospital-based sleep centers. Prior to the recent changes almost all MACs required sleep testing centers to be certified by the American Academy of Sleep Medicine (AASM), The Joint Commission (formerly known as JCAHO), or Accreditation Commission for Health Care, Inc. (ACHC).  Accreditation by either the Joint Commission Hospital or Ambulatory Care Accreditation programs was acceptable for hospital-based sleep centers. If the Joint Commission survey of the general hospital accreditation included the hospital-based sleep lab, an additional accreditation was not needed.

Things began to change in 2017 when 3 MACs, Wisconsin Physician Services (WPS), CGS, and Noridian changed their sleep lab certification requirements so that Joint Commission’s Hospital Accreditation was no longer sufficient to meet the credentialing requirements for a hospital sleep center. The new/revised Local Coverage Determinations (LCDs) require certification by the Joint Commission’s Ambulatory Care Accreditation Program or one of the other approved accreditors (AASM and ACHC). Although the WPS, CGS, and Noridian policies were effective in February, March and June of 2017 respectively, they all issued clarification statements allowing 90 days from the date of the statement to apply for accreditation and 1 year to obtain an accreditation award. This means the accreditation due date for WPS is May 12, 2018; for CGS, May 11, 2018; and June 22, 2018 for Noridian. Hospitals can elect to have all their ambulatory services accredited through the Joint Commission’s Ambulatory Care Accreditation Program or just specifically sleep services only.  You can find more information in a Joint Commission Fact Sheet.

In March 2018, Palmetto GBA followed suit and sleep facilities in the Palmetto Jurisdictions J and M must have sleep-specific accreditation to be eligible for coverage. Palmetto is allowing a much shorter time frame for sleep centers to comply. Here is an excerpt from a future effective Palmetto Article that explains the new requirements and the timeline for compliance.

“As noted above in section 1, outpatient sleep centers affiliated with a hospital which is currently accredited by The Joint Commission (formerly JCAHO) through the hospital’s accreditation will now be required to obtain separate ambulatory care accreditation for the sleep center if ambulatory services accreditation for the sleep center is not currently in place. This accreditation must be obtained by October 1, 2018 in order to continue to render services to Medicare beneficiaries and submit claims to Palmetto GBA.”

This could be bad news for hospitals – if your sleep center is not accredited by The Joint Commission’s Ambulatory Care Accreditation Program or one of the other approved accreditors (AASM and ACHC), your claims for services rendered past the above noted MAC-imposed deadlines may be denied. Enough to make hospital administrators, finance, and sleep lab managers toss and turn and lose sleep.

Facility accreditation is not the only credentialing requirement for sleep centers. Sleep centers must be under the supervision or direction of a physician who meets certain certification requirements. And there are also requirements for the credentials and training of sleep technologists and technicians. Hospital offering sleep testing should carefully review the requirements of their Medicare contractors and other payers. Here is a list of the various coverage policies for sleep testing /polysomnography of the MACs.

Q:

On February 15, 2018, CMS issued a final Decision Memo that included revised criteria for Medicare coverage of Implantable Cardioverter Defibrillators. When should our hospital start following the new criteria such as the requirement for the shared decision-making visit and the end of the requirement for registry data collection and submission?

A:

There are differences in the expected compliance with a coverage decision memorandum and a National Coverage Determination (NCD).  CMS addresses this in the Medicare Program Integrity Manual, Chapter 13, section 13.1.1:

“CMS prepares a decision memorandum before preparing the national coverage decision. The decision memorandum is posted on the CMS Web site, that tells interested parties that CMS has concluded its analysis, describes the clinical position, which CMS intends to implement, and provides background on how CMS reached that stance. Coverage Decision Memos are not binding on contractors or ALJs. … The decision outlined in the Coverage Decision Memo will be implemented in a CMS-issued program instruction within 180 days of the end of the calendar quarter in which the memo was posted on the Web site.”

Providers need to bear in mind however, that the final NCD backdates the effective date of the changes to the date of the decision memo. The issue lies with the implementation date which is communicated in a CMS Transmittal once the NCD changes are finalized. Medicare Administrative Contractors (MACs) will not start enforcing the new rules until the implementation date, but then they will enforce rules for dates of service on and after the date of the decision memo. This means once the final update to the NCD is made and manualized, the effective date will revert to the date of the decision memo but following the new rules will be based on an implementation date.  Claims submitted on and after the implementation date, will follow the new guidelines for dates of service on and after February 15, 2018 (decision memo date).

Best practice is for providers to implement new requirements, such as the shared decision-making visit, as quickly as possible. Until an implementation date is communicated, providers should not stop complying with the requirements of the current NCD if they are continuing to submit claims for the service.  For this NCD, continue to report to a registry and submit applicable claims with the Q0 modifier indicating registry submission and abide by the current waiting periods until the revised NCD is released.  Another option for providers is to follow the new criteria in the Decision Memo and hold claims until after the implementation date of the revised NCD.

For more information about the Decision Memo, see the prior Wednesday@One ICD Decision Memo article.