Knowledge Base - Full Library

Q:

How do I determine which devices, APCs, and DRGs are subject to Medicare’s device credit policy?

 

A:

Medicare publishes the list of APCs subject to the device credit policy in the annual Outpatient Prospective System (OPPS) Final Rule.  For 2016, Medicare is proposing to apply the device credit to all device-intensive APCs listed in Table 38 of the Proposed Rule (see page 70 of the 2016 OPPS Proposed Rule).  In previous years, CMS also included a separate list of the devices subject to the device credit policy.  For CY 2016 and beyond, they are proposing to no longer specify a list of devices, but “apply the APC payment adjustment to all replaced devices furnished in conjunction with a procedure assigned to a device-intensive APC when the hospital receives a credit for a replaced specified device that is 50 percent or greater than the cost of the device.”

In MLN Matters Article MM9121, CMS updated the list of MS-DRGs subject to the device credit policy.  Due to changes to MS-DRGs for 2015 and 2016, Medicare deleted two expired DRGs from the list and added seven DRGs.  The complete list of MS-DRGs, including the existing MS-

DRGs and the new MS-DRGs subject to the policy for replaced devices offered without cost or with a credit, is displayed in the table attached to CR9121.

For more information about Medicare’s Device Credit Policy, see the article Learning More about Medicare’s Device Credit Policy in this week's Wednesday@One which can also be accessed through the Knowledge Base section of our website or listen to our On-Demand Webinar on Understanding and Managing Device Credits which can be purchased in the Classes section of our website.

MMP Knowledge Base Webpage: http://www.mmplusinc.com/knowledge-base

MMP Classes Webpage: http://www.mmplusinc.com/earn-ceus

Everyone loves a bargain, a special, or a deal. Package deals involve a discounted price when multiple services are bundled together. These have been especially popular with telecommunication companies lately and a lot of households have a “bundle” that includes cable or satellite television service, internet service and telephone service. Medicare, charged with efficient use of our tax dollars for healthcare services, loves a package deal also. So it is no surprise that we are seeing more and more service bundles for Medicare services.

Injections during cataract and other ocular surgeries are becoming more common, replacing the previous application of drugs via eye drops after the surgery. This technique may be referred to as “dropless cataract surgery.” In the 2015 Outpatient Prospective Payment System (OPPS) October Update, CMS reminds providers of correct coding conventions for injections provided during ocular surgery. The National Correct Coding Initiative clearly states that injection of a drug during a cataract extraction procedure or other ophthalmic procedure is not separately reportable – it is a packaged service. The CPT/ HCPCS code used to report the ocular procedure includes any injections performed during the surgery.

The injections during ocular surgery may be combined or compounded drugs such as triamcinolone and moxifloxacin with or without vancomycin. Effective June 30, 2015, the manner of reporting compounded drugs to Medicare changed. Modifier JF (Compounded drug) was discontinued and replaced with HCPCS code Q9977 (Compounded Drug, Not Otherwise Classified) effective July 1, 2015. HCPCS code Q9977 should be used to report compounded drug combinations, including the compounded drug combinations use for ocular surgeries. These drugs will be packaged as surgical supplies and separate payment will not be made for the drugs. Providers should be sure to report these drug combinations in accordance with these instructions. Providers should not:

• Report these drugs and drugs combinations with HCPCS code C9399
• Try to shift the financial liability to the patient for the drugs or injections using an Advance Beneficiary Notice (ABN) because both are a covered part of the surgical procedure
• Circumvent packaged payment by having patients purchase and bring the drugs with them to the facility for administration.

Other updates from the July OPPS update include the following:

Q:

At the August 18th Hospital Open Door Forum, the CMS representative who answered questions about the “PO” modifier stated that the modifier applied to all outpatient services “paid under OPPS.” The instructions for the “PO” modifier from the July 2015 OPPS Update state that, “This modifier is to be reported with every HCPCS code for all outpatient hospital items and services furnished in an off-campus provider-based department of a hospital.” From reading of the 2015 OPPS Final Rule it appears the intent of this modifier is mainly to gather information on off-campus physician offices and clinics operating as hospital provider-based departments.

Based on differences in the above descriptions of the use of the “PO” modifier, to which types of outpatient services provided in off-campus provider-based departments (PBDs) should the PO modifier be appended?

 

A:

Medical Management Plus posed this question to CMS through the Hospital Open Door Forum email. The answer we received from Tiffany Swygert with CMS is that, “It applies to all services paid under the OPPS that are furnished in an off-campus provider based department of a hospital except for remote locations, satellite facilities and EDs. If the specific services are not paid under the OPPS, then no modifier is required under this policy.”

Ms. Swygert went on to clarify specifically that rehabilitative therapy services (PT, OT and Speech therapy) paid under the Medicare Physician’s Fee Schedule in accordance with an OPPS Status Indicator of “A” do not require a PO modifier when furnished in an off-campus PBD since they are not paid under the OPPS. Another common outpatient service not paid under OPPS is laboratory services when they are non-patient services or the only outpatient services performed. In this situation, most clinical lab services are paid under the Clinical Laboratory Fee Schedule (CLFS) and based on the same logic would not require a PO modifier. However, lab services furnished with other outpatient services are packaged services which means they are “paid under OPPS” although there is no separate payment. Therefore these lab services would require a PO modifier.

The use of the PO modifier is voluntary for 2015, but will be required on claims for off-campus provider-based departments beginning in 2016.

Hospitals should refer to the OPPS Addendum B to find a service’s status indicator and to Addendum D1 for the descriptions of the status indicators to determine which services are paid under OPPS and which are not.

 

 

Q:

How will the coding of blood transfusions change in ICD-10-PCS?

 

A:

Answer: Under I-9, the coder would search for, Transfusion in the Alphabetic Index and then look for the specific blood product to be transfused.

Example: Transfusion of PRBCs - 99.04

In I-10, much more clinical information will be required to arrive at the correct code. We will have to know the specific blood vessel that will receive the blood product and the approach/technique used to reach that blood vessel. Also, we will have to know whether the blood is Autologous (taken from the patient; auto-transfusion) or Non-Autologous (obtained from another person).

Example: Transfusion of Nonautologous Red Blood Cells into Peripheral Artery, Percutaneous Approach – 30253N1

To obtain more specific documentation from the clinician, it would be beneficial to list all of the physical locations in the hospital where the patient would have the opportunity to receive blood products, such as, at bedside, Operating Room, or Emergency Room. Inform the appropriate personnel in these areas of the documentation needed for code assignment. Or, simply request that this specific documentation be added to your hospital’s blood transfusion sheets.

 

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

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

October 1, 1851: First Hawaiian stamp is issued.

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

October 1, 1890: Yosemite National Park forms.

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

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

October 1, 1955: “Honeymooners” premieres.

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

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

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

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

Documentation and Coding Adjustment

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

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

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

Finalized Changes to Specific MS-DRG Classifications for FY 2016

MDC 5: Diseases and Disorders of the Circulatory System

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

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

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

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

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

Spinal Fusion

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

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

MDC 14: Pregnancy, Childbirth and the Puerperium

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

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

Finalized Changes to the Postacute Care Transfer MS-DRGs

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

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

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

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

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

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

The Fiscal Year (FY) 2016 Inpatient Prospective Payment System (IPPS) Final Rule builds on the CMS’s recurring theme of moving the health care system toward paying for quality rather than quantity as CMS indicates in a related Fact Sheet “the Administration has set measurable goals and a timeline to move the Medicare program, and the health care system at large, toward paying providers based on quality, rather than the quantity of care they give patients. The final rule includes policies that advance that vision and of several final rules that reflect a broader Administration-wide strategy to create a health care system that results in better care, smarter spending, and healthier people.”

This article highlights Fiscal Year 2016 IPPS Final Rule (CMS-1632-F) Payment Rate changes and changes to the Quality Programs.

Finalized Changes to Payment Rates for IPPS Participating Acute Care Hospitals

• Hospitals that successfully participate in the Hospital Inpatient Quality Reporting (IQR) Program and are meaningful electronic health record (EHR) users will see a 0.9% increase in operating payments.
• Hospitals that do not successfully participate in the Hospital IQR Program and submit the required quality data will see a one-fourth reduction in their Market Basket update.
• Hospitals that are not meaningful EHR users will see a one-half reduction in their Market Basket update.
• Additional Potential Penalties
• Hospital Value Based Purchasing (VBP) Program: Hospitals will either receive an incentive bonus or a penalty potentially as high as 3%.
• Hospital Readmission Reduction Program (HRRP): Hospitals will be penalized up to 3% for excessive readmission rates.
• Hospital Acquired Condition (HAC) Reduction Program: 1% penalty for hospitals in the lowest performing quartile.

Hospital Inpatient Quality Reporting (IQR) Program

Pneumonia Cohort Expanded

CMS finalized proposed cohort refinements to the following two previously adopted Pneumonia measures:

• The Hospital 30-Day All-Cause, Risk-Standardized Mortality Rate (RSMR) following Pneumonia Hospitalization measure
• The Hospital 30-Day All-Cause, Risk-Standardized Readmission Rate (RSRR) following Pneumonia Hospitalization measure

CMS defines “cohort” as the hospitalization, or “index admission,” that is included in each measure to determine if a patient died within 30 days of the index admission in the case of the Mortality Measure or if the patient was readmitted within 30 days in the case of the Readmission Measure.

For the FY 2017 payment determination and subsequent years the cohort for both measures has been expanded to include:

• Patients with a principal discharge diagnosis of pneumonia (the current reported cohort),
• Patients with a principal discharge diagnosis of aspiration pneumonia (new); and
• Patients with a principal discharge diagnosis of sepsis (excluding severe sepsis) with a secondary diagnosis of pneumonia coded as present on admission (POA).

More interesting than the actual cohort changes are the reasons cited by CMS for making the change.

• “Recent evidence has shown an increase in the use of sepsis and respiratory failure as principal diagnosis codes among patients hospitalized with pneumonia. Pneumonia patients with these principal diagnosis codes are not currently included in the measure cohort, and including them would better capture the complete patient population of a hospital with patients receiving clinical management and treatment for pneumonia.
• Second, “efforts to evaluate changes over time in pneumonia outcomes could be biased as coding practices change.”

CMS Adds Seven New Measures to the Hospital IQR Program

CMS finalized seven new measures for the FY 2018 and 2019 payment determinations and subsequent years. The following table highlights the new measures and the year the measure will be included in a hospital’s payment determination.

 

CMS Removes Nine Measures from the Hospital IQR Program

For the FY 2018 payment determination and subsequent years, CMS finalized the removal of the following nine chart-abstracted measures:

1. STK-01 Venous Thromboembolism Prophylaxis
2. STK-06 Discharged on Statin Medication*
3. STK-08 Stroke Education*
4. VTE-1 Venous Thromboembolism Prophylaxis*
5. VTE-2 Intensive Care Unit Venous Thromboembolism Prophylaxis*
6. VTE-3 Venous Thromboembolism Patients with Anticoagulation Overlap Therapy*
7. IMM-1 Pneumococcal Immunization
8. SCIP-Inf-4 Cardiac Surgery Patients with Controlled Postoperative Blood Glucose
9. AMI-7a Fibrinolytic Therapy Received Within 30 Minutes of Hospital Arrival*

Note: Measures with an asterisk (*) were finalized to be removed from chart abstraction but are being retained as Electronic Clinical Quality Measures (eCQM) for the FY 2018 payment determination and subsequent years as proposed.

Hospital Value Based Purchasing (VBP) Program

In the Final Rule CMS estimates that the total amount available for value-based incentive payments for FY 2016 is $1,499,107,502, based on the December 2014 update of the FY 2014 MedPAR file. This estimate will be updated for the FY 2016 IPPS/LTCH PPS final rule, using the March 2015 update of the FY 2014 MedPAR file.

As required by section 1886(o)(7)(B) of the Act, incentive payments will be funded for FY 2016 through a reduction to the FY 2016 base operating DRG payment for each discharge of 1.75 percent.

CMS finalized the removal of two current measures effective with the FY 2018 program year.

• IMM-2 Influenza Immunization
  Note: CMS does believe that “this measure should continue to be part of the Hospital IQR Program measure set because it is the only measure that addresses the Best Practices to Enable Healthy Living goal in the CMS Quality Strategy and priority of the same name in the National Quality Strategy.”

• AMI-7a Fibrinolytic Therapy Received within 30 Minutes of Hospital Arrival

CMS finalized a New Care Coordination Measure for the FY 2018 Program Year.

• 3-Item Care Transition Measure (CTM-3) that will add the following three questions to the HCAHPS (Hospital Consumer Assessment of Healthcare Providers and Systems )Survey:

1. During this hospital stay, staff took my preferences and those of my family or caregiver into account in deciding what my health care needs would be when I left.
2. Strongly disagree
3. Disagree
4. Agree
5. Strongly Agree
   
   
6. When I left the hospital, I had a good understanding of the things I was responsible for in managing my health.
7. Strongly disagree
8. Disagree
9. Agree
10. Strongly Agree
11. When I left the hospital, I clearly understood the purpose for taking each of my medications.
12. Strongly disagree
13. Disagree
14. Agree
15. Strongly Agree
16. I was not given any medication when I left the hospital

Note: The CTM-3 measure was developed by Eric Coleman, MD, MPH, Professor of Medicine & Health at the Division of Health & Policy Research at the University of Colorado Anschutz Medical Campus. Dr. Coleman is the founder and director of The Care Transitions Program (www.caretransitions.org).

CMS indicated that they intend to propose in future rulemaking the inclusion of non-ICU locations in the Catheter Association Urinary Tract Infection (CAUTI) and Central Line-Associated Blood Stream Infection (CLABSI) measures beginning with the FY 2019 program year. “Selected ward (non-ICU) locations are defined as adult or pediatric medical, surgical, and medical/surgical wards [79 FY 50061; 78 FR 50787].”

CMS finalized a Hospital 30-day All-Cause, Risk-Standardized Mortality rate Following Chronic Obstructive Pulmonary Disease (COPD) Hospitalization Measure for the FY 2021 Program Year.

CMS indicates that this measure “is appropriate for the Hospital VBP Program because it addresses a high volume, high cost condition, and chronic lower respiratory disease (including COPD) is the third leading cause of mortality in the United States. The measure aligns with the CMS Quality Strategy Goal of Effective Prevention and Treatment.”

Hospital Acquired Conditions (HAC) Reduction Program

Even though there were no proposals to add or remove measures for FY 2016, the CMS reminds readers that in the FY 2015 IPPS Final Rule they finalized the following measures for the FY 2016 Program:

• AHRQ PSI – 90 Composite

This measure currently consists of the following eight component indicators:             

• PSI-3 Pressure ulcer rate,
• PSI-6 Iatrogenic pneumothorax rate,
• PSI-7 Central venous catheter-related blood stream infections rate,
• PSI-8 Postoperative hip fracture rate,
• PSI-12 Perioperative pulmonary embolism or Deep vein thrombosis rate,
• PSI-13 Postoperative sepsis rate,
• PSI-14 Postoperative Wound dehiscence rate; and
• PSI-15 Accidental puncture and laceration rate.
• CDC Central Line-Associated Bloodstream infection (CLABSI),
• Catheter-Associated Urinary Tract Infection (CAUTI); and
• Colon and Abdominal Hysterectomy Surgical Site Infection (SSI).

As part of the National Quality Foundation maintenance review process, the Agency for Healthcare Research and Quality (AHRQ) is considering adding the following to the PSI Composite measure:

• PSI-9 Perioperative hemorrhage rate,
• PSI-10 Perioperative physiologic metabolic derangement rate; and
• PSI-11 Post-operative respiratory failure rate.

CMS indicates that the potential inclusion of these measures would be a significant change and that they would engage in notice-and-comment rulemaking prior to requiring the reporting of a revised composite for the HAC Reduction Program.

Hospital Readmissions Reduction Program (HRRP)

CMS Expands the Pneumonia Readmission Measure Cohort

CMS finalized a refinement to the pneumonia readmissions measure which would expand the cohort for the FY 2017 payment determination and subsequent years. As discussed earlier in this article, CMS defines “cohort” as the hospitalizations or “index admissions,” that are included in the measure.

Currently, this measure includes hospitalizations for patients with a principal discharge diagnosis of pneumonia indicating viral or bacterial pneumonia. CMS finalized a modified version of their proposal to include patients with a principal discharge diagnosis of pneumonia or aspiration pneumonia, and patients with a principal discharge diagnosis of sepsis (excluding severe sepsis) with a secondary diagnosis of pneumonia coded as POA.

CMS indicates that “the purpose of expanding the cohort of the current pneumonia readmission measure is to include a broader spectrum of pneumonia patients and respond to changes in coding practices that were potentially biasing estimates of the performance of hospitals.”

A related Fact Sheet indicates that the “CMS is also continuing to monitor the impact of socioeconmomic status on provider results in our quality programs, and is working with the National Quality Forum as they undertake a two-year trial to test sociodemographic factor risk adjustment. The Office of the Assistant Secretary for Planning and Evaluation is currently researching the impact of sociodemographic status as directed by the Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act), and CMS will closely examine the findings presented in their reports to Congress and related Secretarial recommendations at such time as they are available.”

Do You Know Your Hospital’s Readmission Penalty?

With hospitals facing financial challenges, do you know your Hospital’s Readmission Penalty for the coming Fiscal Year? Kaiser Health News (KHN) is a nonprofit national health policy news service and on August 3rd, Jordan Rau of KHN released the article Half of Nation’s Hospitals Fail Again To Escape Medicare’s Readmission Penalties. This article provides the reader a link to a PDF file of Medicare Readmission Penalties by Hospital for all four years of the program (FY 2013 through FY 2016).

The entire article can be accessed at: http://khn.org/news/half-of-nations-hospitals-fail-again-to-escape-medicares-readmission-penalties/?utm_campaign=KHN%3A+Afternoon+Edition&utm_source=hs_email&utm_medium=email&utm_content=21032373&_hsenc=p2ANqtz--tfj9Nw4n9neCfizWv04BocrIp3tC95xA5l23W02GylGLyB4LwwY-TqyPtYDzFc3SMx6mV8RP_X1MzflMnd3EhbTYe4g&_hsmi=21032373

The entire Final Rule can be accessed at http://www.gpo.gov/fdsys/pkg/FR-2015-08-17/pdf/2015-19049.pdf.

For those closely involved with Quality Initiatives in your facility here is list of where you can find the specific Quality Program Updates in the Final Rule pdf.

• Hospital Readmission Reduction Program is on pages 206-219,
• Hospital Value-Based Purchasing (VBP) Program is on pages 220-246,
• Hospital-Acquired Condition (HAC) Reduction Program is on pages 246 – 257; and
• Hospital Inpatient Quality Reporting (IQR) Program is on pages 316-380.

A standard circus act throughout time has been jumping through hoops – little dogs with bows and skirts jump through hoops; growling lions and tigers jump through hoops; even people jump through flaming hoops. There is a new “act” in town and it too requires jumping through hoops.

The NOTICE Act

On August 6, 2015, President Obama signed into law the NOTICE Act (Notice of Observation Treatment and Implication for Care Eligibility Act). The NOTICE Act requires hospitals to:

• Provide written and oral notification to patients when they have received observation services for more than 24 hours.
• Notification must be done within 36 hours from the beginning of observation services or at the time of discharge, whichever is first.
• The notice must explain the patient’s status (outpatient with observation services) and the reasons for the outpatient with obs status as opposed to being admitted as an inpatient.
• The notice must also explain the implications of that status for cost-sharing requirements and for subsequent eligibility for coverage of services furnished by a skilled nursing facility.
• The notice must be “written and formatted using plain language and made available in appropriate languages.”
• The patient or their representative must acknowledge receipt of the notice with their signature, or the annotation and signature of the presenter if the patient refuses to sign.
• Hospitals have one year – until August 2016 – to implement this requirement.

CMS may provide additional guidance on the format and requirements for the notice prior to the implementation date. For example, what constitutes “appropriate languages?”

What This Means for Hospitals and Patients

If hospitals are applying the two-midnight inpatient admission rule correctly, the volume of patients receiving observation services for more than 24 hours without subsequently being converted to inpatient status should be low. Remember if a patient requires medically necessary services beyond a second midnight, Medicare regulations state that the patient should be admitted as an inpatient. Patients who no longer require medically necessary services but remain in the hospital for convenience reasons do not meet the criteria for observation services, so observation hours should no longer be charged. Here is one shortcoming of the new law – it does not address patients in an extended outpatient “without observation” status. An Advance Beneficiary Notice (ABN) can be given to these patients who no longer require medically necessary treatment in the hospital setting but remain in an extended outpatient status if the hospital continues to charge for hourly services.

Several states including Connecticut, Maryland, New York, Pennsylvania and Virginia, already require hospitals to give patients notices about observation care and some hospitals in other states are voluntarily providing notices to patients concerning their status. Hospitals have a whole year to develop a process for implementing this requirement – whether it is to modify their current notification process or come up with a new process.

One purpose of the notice is to explain “cost-sharing” – that is the patient’s financial responsibility of outpatient status with observation versus inpatient status. It would be rare that the patient’s deductible and co-pay for observation care would exceed the inpatient deductible of $1,260. The outpatient deductible is only $147 per year for all Part B services and hospital outpatient co-pay is around 20% of the observation payment (proposed to be " $2,100 for 2016) and other separately payable services. If the 2016 OPPS proposal for a comprehensive observation payment goes forward, all adjunctive services provided during the outpatient with observation stay are bundled into the observation payment. Patients in an outpatient hospital stay are also responsible for self-administered drugs but again it is unlikely that the combined outpatient cost-sharing will exceed the inpatient deductible amount. The one exception is for patients who do not have Part B coverage – these patients would be responsible for the cost for the total outpatient care. As opposed to the Important Message from Medicare for inpatient admissions, under this Observation Notice patients do not have any appeal rights – their only options if they are concerned about their costs are to try to sway their physician to admit them or leave the hospital.

It is also unlikely that a patient receiving only outpatient with observation services for greater than 24 hours would be a candidate for a skilled nursing facility (SNF) admission – another notification requirement of the act. Medicare beneficiaries must have a qualifying three-day inpatient stay to qualify for Medicare benefits for a SNF admission. In the days prior to the two-midnight rule, it was not unusual to have patients with extended observation stays of 3 days or longer that were not eligible for Medicare coverage of a SNF admission. The more likely scenario now, post-two-midnight rule, is that patients receiving observation services will be converted to an inpatient status for hospital care prior to being transferred to a SNF. The problem here, not addressed by the new law, is whether the post-observation care inpatient admission lasts for three days, enough to qualify for the SNF admission.

So hospitals are left with another hoop to jump through that, although well-intentioned, may fall short on protecting the patient.

The summer heat is brutal these days. Everyone is looking for ways to beat the heat – staying inside in air conditioned comfort, jumping in a pool or under a sprinkler, and drinking lots and lots of water. But there are conditions and illnesses that result in dehydration at any time of the year where infusion of fluids is needed for treatment. What is required by Medicare in order for hydration services to be covered?

A couple of weeks ago, the Wednesday@One included an article about the July 2015 Medicare Quarterly Provider Compliance Newsletter. The Compliance Newsletter mentioned Recovery Auditor findings for hydration services lacking medically necessary diagnoses required by a Novitas Local Coverage Determination (LCD). At Medical Management Plus, we receive numerous questions related to hydration services, so this week I offer some guidance for hydration services based on the Novitas LCD, another LCD and three coverage Articles from various Medicare Administrative Contractors (MACs).

CPT instructions require the administration of a hydration infusion of more than 30 minutes in order to allow the coding of hydration as an initial service. Hydration of 30 minutes or less is not separately billable. This means hydration must last at least 31 minutes in order to bill it. If there is no documented stop time, the duration of the hydration infusion is unknown and should not be billed.

There must be a practitioner’s order for hydration therapy and documentation of the reason a patient needs hydration in the medical record.

Hydration for the following reasons is not considered medically necessary therapeutic hydration and is not covered by Medicare.

• Hydration to maintain vascular access/vessel patency is not covered.
• Fluids used solely to administer drugs is considered incidental hydration and not separately billable.
• Administration of fluids with blood transfusions or between chemotherapeutic agents to flush lines is not separately billable.

Covered indications for hydration services vary between the different coverage articles and LCDs:

• Palmetto’s Article (A53402) simply states hydration must be medically reasonable and necessary for a clinical condition that warrants hydration.
• Noridian’s Articles (A53857 and A50359) states, “Routine administration of IV fluids without documentation supporting signs and/or symptoms including those of dehydration or fluid loss is not supported as medically necessary.”
• Novitas’s LCD (L32738) indicates coverage for clinical manifestations of dehydration or volume depletion and in conjunction with chemotherapy. Hydration with chemotherapy is covered only when the infusion is prolonged and done sequentially (done hour(s) before and/or after administration of chemotherapy), and when the volume status of a beneficiary is compromised or will be compromised by side effects of chemotherapy or an illness.
• Cahaba’s LCD (L32290) lists four different medically necessary reasons for hydration:
• Documented volume depletion,
• In conjunction with chemotherapy (same restrictions as Novitas policy),
• Some endocrine conditions such as hypercalcemia, and
• As an adjunct to the treatment of hypotension.

There are a few additional restrictions in some policies other than those already mentioned:

• Cahaba and Novitas LCDs state that rehydration with the administration of an amount of fluid equal to or less than 500 ml is not reasonable and necessary.
• Cahaba also claims rehydration should only take a few hours, so the medical necessity of hydration lasting beyond 12 hours must be supported by documentation.
• The Noridian articles do not specify a certain rate of infusion but do clarify that to qualify as medically necessary hydration, the rate of infusion should support performance of this service for rapid replenishment.

If your MAC jurisdiction has a coverage policy for hydration services, please read it carefully to learn all of the indications and limitations of coverage. If your MAC does not have a policy that addresses hydration, the guidelines in the policies referenced here may provide some guidance for your hospital. Continue to monitor your MAC’s draft and new policies for any future requirements for hydration services.

Q:

CPT guidance indicates it is acceptable to report CPT code 31624, Bronchoscopy with bronchial alveolar lavage, with a bilateral modifier when this procedure is performed bilaterally. However, a comment on a recent MMP HIQUP report stated this was not appropriate. We are confused – could you please explain?

A:

This is one of those examples where the CPT guidelines differ from Medicare guidelines. Very similar to the guidelines for billing modifier 50 for certain cystoscopy procedures, but Medicare says modifier 50 should not be used.

To our understanding, when Medicare processes a hospital claim, they apply the bilateral surgery indicators from the Physician fee schedule RVU file, and that is the basis for the edit you see in the HIQUP Report. For the code range 31623 – 31656, the bilateral surgery indicator is a zero, which means “Do not submit these procedures with modifier 50”. The RVU Explanation for Bilateral Indicator “0” states: “The bilateral adjustment is inappropriate for codes in this category (a) because of physiology or anatomy, or (b) because the code description specifically states that it is a unilateral procedure and there is an existing code for the bilateral procedure.”

The good news is - - if you submit modifier 50, Medicare ignores it and pays the code as quantity of 1, so this should not result in an overpayment. We think this is a very low risk for recoupment since overpayment does not occur, but it is “possible” RAC could cite inappropriate billing and try to recoup your correct payment. We say this based on other RAC targets where the correct code was billed, correct payment was received, but there was some other technicality cited as incorrect billing (wrong revenue code, modifier RT/LT).

And don’t try billing this code with modifiers RT and LT . . . since the MUE for these codes is 1 – that would result in no payment at all for the procedure due to exceeding the MUE. 

We all realize that to be effective in our jobs, we must have the cooperation of others and this is especially true when it comes to healthcare. Physicians rely on hospitals to provide the tools and services they need to care for their patients, and hospitals rely on physicians to utilize those services appropriately and to provide sufficient documentation to support coding, billing and payment. The Medicare Quarterly Compliance Newsletter for July is now available and provides several examples of issues where team work between physicians and hospitals is a must. Most of the articles in this quarter’s edition focus on physician issues, but there are a couple of articles that relate to hospital outpatient services and some instructions in the physician articles that will benefit hospitals as well.

Bevacizumab Medical Necessity (page 15 in the Compliance Newsletter)

Recovery Auditors have an automated edit to identify claims for Bevacizumab, J9035, that are incorrectly paid when they do not contain a diagnosis code required by a Local Coverage Determination (LCD). After a general description of Medicare requirements for drug coverage and identification of a specific CGS LCD that list diagnoses for a number of drugs and biologicals used to treat cancer and other acute and chronic conditions, the article discusses Medicare coverage of off-label drug usage. Drugs used for indications other than those in the approved labeling may be covered under Medicare if it is determined that the use is medically accepted, taking into consideration the major drug compendia, authoritative medical literatures, and/or accepted standards of medical practice. Some local coverage policies have been expanded to include off label usage in accordance with CMS Policy for Off Label Usage.

The Medicare Benefit Policy Manual, Chapter 15, section 50.4.5, provides guidance on the off-label use of drugs and biologicals in an anti-cancer chemotherapeutic regimen. Per the manual, “In general, a use is identified by a compendium as medically accepted if the:

1. indication is a Category 1 or 2A in NCCN, or Class I, Class IIa, or Class IIb in DrugDex; or,
2. narrative text in AHFS-DI or Clinical Pharmacology is supportive.

A use is not medically accepted by a compendium if the:

1. indication is a Category 3 in NCCN or a Class III in DrugDex; or,
2. narrative text in AHFS or Clinical Pharmacology is “not supportive.”

The complete absence of narrative text on a use is considered neither supportive nor non-supportive.”

Contractors may also determine to cover off-label uses that are supported by clinical research based on evaluation of evidence in certain specified peer-reviewed medical literature. FDA-approved drugs and biologicals may also be considered for use in the determination of medically accepted indications for off-label use if determined by the contractor to be reasonable and necessary. Refer to the complete manual instructions for specific details of coverage.

There are also a number of LCDs and Articles that address the coverage of chemotherapeutic use of Bevacizumab and off-label uses of drugs.

Providers also need to bear in mind that some Medicare Administrative Contractors (MACs) are performing probe reviews and targeted reviews on anti-cancer drugs including Bevacizumab. These reviews have significant denial rates due to lack of medical necessity, failure to follow established protocols and lack of documentation, such as physician’s orders.

So What Should Providers Do to Ensure Coverage of Anti-Cancer Treatments

• Be aware of any coverage policies in your MAC jurisdiction and follow the diagnosis requirements.
• For off-label use not included as covered in your MAC’s LCD, verify that your off-label usage is supported by Medicare approved standards in the pharmaceutical compendia or accepted peer-reviewed medical literature. Appeal any denials and be sure to include the supporting medical literature with your appeal.
• Follow established and accepted protocols for anti-cancer chemotherapeutic regimens.
• Make sure the documentation of services is complete and sufficient to support your billing.
• Be aware of probe and targeted reviews by your MAC for anti-cancer drugs and monitor your denial rates. Take corrective actions based on denial reasons.

Other issues related to hospitals identified in the July Compliance Newsletter include:

• Claims lacking medical necessity for hydration services based on LCD requirements (page 22)
• Physician claims with insufficient documentation for nasal endoscopy (pg 7), lithotripsy (pg 9), and lumbar spinal fusion (pg 12). Although these reviews focused on physician services, hospital payment may also be affected as it is often dependent on the physician’s documentation. Hospitals must work with physicians to make sure the documentation for these services includes:
• The correct date of service;
• The reason for performing the procedure;
• The results of the procedure;
• A physician’s signature; and/or
• A signature log or attestation for an illegible signature.

As often is the case, the hospital’s payment for services is dependent on the physician’s documentation and treatment choices. It must be a team effort for all providers to follow Medicare requirements and get the reimbursement they deserve.