Knowledge Base - Full Library

If your life is not hectic, I want to know where you live and how you manage that! In today’s busy world, as most of us balance numerous responsibilities at work and at home, we have to be able to multi-task. It is a great feeling to be able to accomplish several things with one action. This article about Medicare coverage updates addresses multiple lessons to learn from one LCD. 

Effective December 7, 2017, First Coast Service Options, the Medicare Administrative Contractor (MAC) for Jurisdiction N (JN) has a new LCD for Wound Care (L37166). As usual, with new LCDs, there is also an accompanying Article that reviews the comments received from the provider community in regards to the draft LCD and First Coast’s responses to those comments.  Here are the lessons to be learned from the First Coast Wound Care LCD and Article:

• Requirements for coverage of wound care services
• Documentation necessary to support coverage of wound care services
• Importance of commenting on draft policies
• Importance of reading LCD comments

Coverage Requirements

The LCD is lengthy and contains a lot of detailed information. This is a summary of some of the coverage highlights, so providers affected by this LCD should read it carefully for a complete understanding. Other than for palliative care covered in specific circumstances, Medicare coverage for wound care is contingent upon evidence that the wound is improving.  Wound care must also include all applicable adjunctive measures as part of comprehensive wound management in order to be medically reasonable and necessary. Debridement is not covered when the wound is without devitalized, fibrotic, nonviable tissue, infection, necrosis, foreign matter, or if the wound has pink to red granulated tissue.

Also per the First Coast LCD, “the following services are considered to be not reasonable and necessary wound debridement services:

• Removal of necrotic tissue by cleansing or dry-to-dry or wet-to-dry dressing.
• Washing bacterial or fungal debris from lesions.
• Removal of secretions and coagulation serum from normal skin surrounding an ulcer.
• Dressing of small or superficial lesions.
• Paring or cutting of corns or non-plantar calluses.
• Incision and drainage of abscess including paronychia, trimming or debridement of mycotic nails, avulsion of nail plates, acne surgery, or destruction of warts.
• Removal of non-tissue integrated fibrin exudates, crusts, or other materials from a wound without removal of tissue does not meet the definition of any debridement code and may not be reported as such.”

Documentation Requirements

Documentation has the same disclaimer as coverage – providers must read the entire LCD to understand all of the documentation requirements. Some key points to remember concerning documentation are that the documentation should include:

• The current status of the wound,
• A plan of care containing treatment goals and physician follow-up,
• Complicating factors for wound healing and the measures taken to control the complicating factors,
• An operative note or procedure note for the debridement services that among other requirements, describes the wound size and characteristics, the medical necessity for debridement, the level of tissue debrided, the material removed, the instrument used, goals and response to treatment, and follow-up instructions, and
• Evidence of the wound’s progress toward healing.

Commenting on Draft Policies

Medicare requires MACs provide a minimum comment period of 45 calendar days for draft LCDs and an additional 45-day notice period after final revisions based on the comments received before an LCD becomes effective. The comment period allows providers and the medical community to express their concerns and suggestions about the proposed LCD.

The benefit of reviewing and commenting on draft policies is twofold. Most importantly, the MAC may agree with your comments and revise the policy. Secondly, even if no changes are made, you become familiar with the policy and are better prepared when it is finalized. It is not unusual for the MAC to make revisions to a draft LCD based on comments. The following clarifications or revisions were some of the ones made by First Coast in response to the comments:

• Clarification is provided on judicious use and efficacy of wet-to-dry and dry-to-dry dressings.
• The limitations addressing ulcers which may arise after paring or cutting of corns or non-plantar calluses as not reasonable and necessary wound debridement services have been removed from the finalized LCD. 
• Photographic documentation for wounds has been amended to suggestions for best practices in wound care. (instead of a requirement)
• The final LCD was amended to remove the reference about podiatrists. 
• After consideration, some of the conditions which were referred to as dermatologic have been amended or removed.

Read LCD Comments

Do you ever read a coverage policy and wonder “what were they thinking?” The LCD Comments Article gives hints, at least on the issues addressed, as to what the MAC was thinking regarding the policy decisions. Here are a few examples from the First Coast Wound Care LCD Comments Article demonstrating this:

• The Contractor also recognizes studies show disposable Negative Pressure Wound Therapy (NPWT) may be just as effective as the traditional NPWT, and it has been determined that there will be access to coverage for NPWT utilizing durable medical equipment or non-durable medical equipment in appropriately selected patients. 
• Concerning the establishment of an appropriate non-skilled maintenance program: Medicare coverage is defined by reasonable and necessary criteria per Social Security Act section 1862 (a) 1(A). This statement is an expectation; it does not preclude a skilled maintenance program or palliative wound care when reasonable and necessary.
• Concerning the addition of biofilm or bioburden to Covered Indications for debridement: The contractor agrees that this statement is incorrect. There are active wound care management CPT® codes that reference removal of biofilm and may be reported for such debridement. Please reference CPT® and coding guidelines. 
• Concerning frequency limitations for debridement of muscle/fascia or bone: Debridement codes involving fascia or bone would be expected to lessen over a period of time as the wound heals. Data analysis illustrates that a minority of beneficiaries receiving wound care actually receive more than five debridements involving muscle/fascia or bone in a rolling 360-day period. Debridements of an unusually prolonged or excessive number should be accompanied by meticulous documentation illustrating that the service is both medical necessary and reasonable.

Once again, I remind everyone in the JN jurisdiction to read the complete LCD for all information about coverage and documentation requirements. I also encourage reading the Comments Article for additional understanding of the MAC’s reasoning on certain points.  For our readers in other jurisdictions, this would be a good time to review the wound care LCD that applies to your hospital. There are always lessons to be learned.

Q:

Since the 340B Drug Payment Reduction does not apply to Critical Access Hospitals (CAHs), do CAHs have to report modifier TB for drugs purchased through the 340B program?

A:

No, CAHs do not have to report modifier TB. Critical Access Hospitals (CAHs) are not included in the 340B policy change because they are paid based on 101 percent of reasonable costs as required by section 1834(g) of the Act.

All other hospitals under the OPPS are currently paid the same rate for separately payable drugs (ASP+6 percent), regardless of whether the hospital purchased the drug at a discount through the 340B Program. The new rule decreases the payment for drugs purchased through the 340B program from ASP+6% to ASP-22.5% (for an overall decrease of 28.5%). Hospitals to which the reduction applies must report modifier JG on 340B drugs in order for the drug payment to be paid at the reduced amount.

There were concerns from commenters about the drug payment reduction being especially harmful to certain type of OPPS hospitals:

• Rural hospitals are in a “hospital closure crisis” (since 2010, 80 rural hospitals have closed and one-third of remaining rural hospitals are vulnerable to closure, with 41 percent operating at a financial loss)
• Children’s hospitals furnish services under Medicare to children with end-stage renal disease (ESRD). Pediatric ESRD patients require high levels of care and rely on life-saving pharmaceuticals that often come at a high cost.
• PPS-exempt cancer hospitals treat the most vulnerable and underserved patients and communities. Also, children’s and PPS-exempt cancer hospitals receive transitional outpatient payments which would likely offset any reduction in payment of 340B drugs.

For these reasons, CMS excepted rural sole community hospitals (SCHs), children’s hospitals and PPS-exempt cancer hospitals from the 340B payment adjustment. CMS still wants to collect information on which drugs being billed to Medicare are acquired under the 340B program. Therefore the 2018 OPPS Final Rule states, “Accordingly, these three types of hospitals (rural SCHs, children’s hospitals, and PPS-exempt cancer hospitals) will still be required to report an informational modifier “TB” for tracking and monitoring purposes.” The TB modifier does not trigger a payment reduction and drugs reported with a TB modifier will be paid at ASP+6%.

What comes to mind when you hear the word PEPPER. For me, it takes me back to my childhood and the lyrics from the 1970’s Dr. Pepper commercial that invited you to join the Dr. Pepper “crowd” with the jingle:

“I’m a Pepper, he’s a Pepper,
She’s a Pepper, we’re a Pepper,
Wouldn’t you like to be a Pepper, too?
Be a Pepper. Drink Dr. Pepper.”

Fast forward a few decades to 2002 and PEPPER takes on a whole new meaning. This is when the TMF Health Quality Institute developed the Program for Evaluating Payment Patterns Electronic Report (PEPPPER) for short-term acute care hospitals in support of the Center’s for Medicare and Medicaid Services (CMS) Hospital Payment Monitoring Program (HPMP).

In 2008 HPMP ended but just as the famous Dr. Pepper jingle lives on, TMF was once again contracted by CMS through the Office of Financial Management Provider Compliance Group to develop, produce and distribute PEPPERs to all short- and long-term hospitals in the nation.

This article focuses on the Short-Term Acute Care Hospitals PEPPER. Specifically, the changes in the recently released Fiscal Year (FY) 2017 Q3 Short-Term Acute Care PEPPER and the PEPPER User’s Guide 23rd Edition. But first, for those not familiar with the PEPPER, let’s take a look at what it is and why it is a valuable resource for hospitals.

Background

What is PEPPER?

The PEPPER contains statistics for specific “Target Areas” that have been identified as being “at risk for improper payment due to billing, coding and/or admission necessity issues.” The Centers for Medicare & Medicaid Services (CMS) approves the Short Term PEPPER target areas.

The PEPPER compares you to other hospitals in your state, Medicare Administrative Contractor (MAC) Jurisdiction and to the nation. “Comparisons enable a hospital to determine if it is an outlier, differing from other short-term acute care hospitals.” Reports are delivered to a hospital electronically, are hospital specific, and provide the most recent twelve federal fiscal quarters for each target area.

In addition to your hospital specific report, the PEPPER Resources National-level Data Reports webpage includes a Target Area Analysis that provides claims volume, average length of stay and average Medicare Payment for each of the target areas.

Why is this a Valuable Resource for your Hospital?

The PEPPER User’s Guide notes that the Office of Inspector General (OIG) “encourages hospitals to develop and implement a compliance program to protect 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.”

It is important to understand that “PEPPER does not identify the presence of payment errors, but it can be used as a guide for auditing and monitoring efforts. A hospital can use PEPPER to compare its claims data over time to identify areas of potential concern:

• Significant changes in billing practices,
• Possible over- or under-coding,
• Changes in lengths of stay.”

PEPPER User’s Guide, 23rd Edition, Effective with Q3FY 2017 Release, What’s Changed?

Defibrillator Implant Target Area Discontinued

Defibrillators as a “Target Area” was initially added to the PEPPER with the release of the 3rd Quarter FY 2015 Report Release.

The 20th User’s Guide indicated that the Comprehensive Error Rate Testing (CERT) contractor had identified a high error rate (58%) for defibrillator implants (DGs 226-227) in the Supplementary Appendices for the Medicare Fee-for-Service 2014 Improper Payments Report. This “Target Area” was “structured to compare the number of defibrillator implants performed on an inpatient basis, as compared to all defibrillator implants performed at the hospital (inpatient or outpatient).”

Interestingly, the Department of Justice (DOJ) posted a notice on October 30, 2015 that they had reached settlements with 457 hospitals in 43 states for more than $250 million related to defibrillators being “implanted in Medicare patients in violation of Medicare coverage requirements.” Coincidence? I will leave that up to you to decide.

This target area has been discontinued due to a continued decrease in the number of hospitals with sufficient data to generate statistics.

Septicemia Target Area Denominator Revised

“In general, the target areas are constructed as ratios and expressed as percents, with the numerators representing discharges that have been identified as problematic… and the denominator includes these DRGs as well as DRGs to which the original DRG is frequently changed.”

The Septicemia target area has been revised to include the following DRGs in the denominator:

• DRG 193: Simple Pneumonia and Pleurisy with MCC,
• DRG 194: Simple Pneumonia and Pleurisy with CC,
• DRG 195: Simple Pneumonia and Pleurisy without CC/MCC,
• DRG 207: Respiratory System Diagnosis with Ventilator Support 96+ Hours, and
• DRG 208: Respiratory System Diagnosis with Ventilator Support <96 Hours.

“This change was made following an analysis of DRG changes for septicemia claims, which identified a relatively large number were changes to simple pneumonia and respiratory system diagnosis DRGs.”

“One-day Stays for Medical DRGs,” “One-Day Stays for Surgical DRGs,” Two-Day Stays for Medical DRGs” and “Two-Day Stays for Surgical DRGs” Revised

This group of target areas have all been revised to exclude claims with the following patient discharge status codes:

• 02: Discharged/Transferred to a Short-Term General Hospital for Inpatient Care,
• 82: Discharged/Transferred to a Short Term General Hospital for Inpatient Care with a Planned Acute Care Hospital Inpatient Readmission,
• 07: Left Against Medical Advice, and
• 20: Expired.

“This change was made to strengthen the statistics by excluding the same claims from the numerator and denominator, thereby focusing solely on the length of stay in the numerator.”

Short-Term Acute Care hospitals are part of the PEPPER crowd and PEPPER can be a valuable resource for your hospital. I encourage you to spend some time on the PEPPER Resources website where you can find a copy of the most recent User’s Guide, Training and Resources available to you including testimonials and training sessions.

The Office of Inspector General (OIG) Work Plan was originally published once a year around October or November. Healthcare compliance officers across the nation pay special attention to this document as it highlights issues considered at high risk of overpayments and/or fraud for federal healthcare payers. In 2015, the OIG began publishing a second “mid-year update” in April or May. When it came time for this year’s mid-year update, the OIG made major changes to the way they present the Work Plan. Instead of once or twice a year, beginning in June 2017, the Work Plan is updated monthly with new additions posted on the Recently Added Items webpage.  Completed items are removed from the Work Plan and there are webpages for recently published reports and a complete listing of Active review topics. The OIG made this change to how the Work Plan is presented to “ensure that it more closely aligns with the work planning process” which “is dynamic and adjustments are made throughout the year to meet priorities and to anticipate and respond to emerging issues with the resources available.”

The OIG added four new Work Plan topics for November 2017. Three of the four apply to Medicaid: Opioid Use, Telemedicine, and Medicaid Managed Care Organizations. The other topic focuses on hospital Medicare services, specifically hospital inpatient billing for severe malnutrition.

Elderly patients are often at risk of being malnourished. Hospitals are allowed to bill for the treatment of malnutrition on the basis of the severity of the condition -- mild, moderate or severe, and whether it affects patient care. Severe malnutrition can significantly affect the resources and time required in treating a hospital inpatient. Medicare recognizes this by classifying it as a major complication or comorbidity (MCC) and makes a higher payment when a diagnosis of severe malnutrition appears on an inpatient claim. Because of this higher payment, the OIG will review hospital inpatient claims “to determine whether providers are complying with Medicare billing requirements when assigning diagnosis codes for the treatment of severe types of malnutrition on inpatient hospital claims.”

Even before making this a new addition to their Work Plan, the OIG has already published reports from two audits of Severe Malnutrition. In these audits they reviewed for I-10 diagnosis codes E41 (Nutritional Marasmus and Severe Malnutrition with Marasmus) and E43 (Unspecified Severe Protein-Calorie Malnutrition). The sample size was small but 89% and 98% of 100 claims reviewed for each audit respectively did not comply with Medicare billing requirements. And adding insult to injury, of the combined approximately $865,000 actual overpayments, the OIG extrapolated to estimated overpayments for both hospitals combined to over $2.6M.  For more information on the OIG prior severe malnutrition audits, see our previous article on the MMP website.

The OIG has another Work Plan issue related to malnutrition that focuses specifically on claims billed with a diagnosis of Kwashiorkor, a form of severe protein malnutrition that is typically not found in the United States. So far, findings from OIG audits for Kwashiorkor have shown that almost all (if not all) claims with this diagnosis are incorrectly coded and billed. Sometimes the code for Kwashiorkor results in an overpayment and sometimes it does not affect the final Medicare MS-DRG payment since other MCCs are appropriately coded on the claim. The ICD-10 diagnosis codes for Kwashiorkor are E40 and E42.

The topic of correct billing for severe malnutrition is also a pending Targeted Probe and Educate (TPE) issue for the Novitas Medicare Administrative Contractor (MAC) for Jurisdiction H and Jurisdiction L. The topic is listed specifically as “E41 and E43 – Severe Malnutrition.” With two Medicare review entities already looking at this topic, it would not be surprising if other reviewers, such as other MACs, the Recovery Auditors (RACs) or the Supplemental Medical Review Contractor (SMRC) also selected this review issue.

Hospitals should watch our newsletter for updates from all the review contractors to see if anyone else begins reviews of malnutrition. In the meantime, I recommend hospitals perform self-reviews with internal or contracted resources to ensure proper coding of severe malnutrition on their inpatient claims before a Medicare reviewer comes knocking.

Q:

Can we report the NIHSS stroke score with our hemorrhagic strokes, code ranges I61 – I62?

A:

Only assign the NIHSS stroke scale score with category

I63 - Cerebral Infarction. The Inpatient ICD-10-CM Coding Guidelines, Coding Clinic 4th Qtr. 2016 page 61, and The AHA’s Coding Handbook FY 2018 all specify to use with category I63. The subcategory, NIHSS score, R29.7-, has an instructional note to code first the type of cerebral infarction (I63-), and does not include hemorrhagic infarctions.  The I63 subcategory also has an instruction note to add a code for the NIHSS score, if known, whereas, the subcategory for the hemorrhagic infarctions does not.

Resources:

FY 2018 Inpatient ICD-10-CM Coding Guidelines
Coding Clinic, 4th Quarter 2016, page 61
The AHA’s Coding Handbook FY 2018

I love a beautiful sunset, especially those where low level clouds in the western sky catch the rays of the waning sun and light up the sky with an orangish, pinkish, reddish glow. It always brings to mind a saying I learned as a child – “red sky at night, sailors delight; red sky at morning, sailors take warning.” For providers approved to participate in a study and bill Medicare for NaF-18 PET scans for bone metastasis, there is a warning for the upcoming sunset of NCD 200.6.19.

Although Medicare generally does not cover experimental or investigational items and services, the National Coverage Determination (NCD) Coverage with Evidence Development (CED) process allows Medicare coverage for some items and services on the condition they are furnished in the context of approved clinical studies or with the collection of additional clinical data. CMS performs an initial review of medical literature to determine if CED coverage is appropriate with the expectation the studies conducted under a CED NCD will produce evidence that will lead to revisions of Medicare coverage policies.  The CED process allows patients earlier access to innovative technology while ensuring patient safeguards. CED NCDs usually list the specific questions CMS expects the study or data collection to answer.

In February 2010, CMS approved coverage of NaF-18 Positron Emission Tomography (PET) to identify bone metastasis of cancer under the CED process. Specifically, under NCD 220.6.19, Medicare covers “NaF-18 PET imaging when the beneficiary’s treating physician determines that the NaF-18 PET study is needed to inform the initial antitumor treatment strategy or to guide subsequent antitumor treatment strategy after the completion of initial treatment, and when the beneficiary is enrolled in, and the NaF-18 PET provider is participating in, (a specified) type of prospective clinical study.”  Medicare expected the clinical studies to answer the following questions:

Does the addition of NaF-18 PET imaging lead to:

• A change in patient management to more appropriate palliative care; or
• A change in patient management to more appropriate curative care; or
• Improved quality of life; or
• Improved survival?

In 2015, the National Oncologic PET Registry (NOPR), which is the approved study for NaF-18 PET, asked CMS to reconsider NCD 220.6.19, end the CED data collection requirements, and authorize national coverage of NaF-18 PET for bone metastasis of all oncologic indications. On December 15, 2015, CMS issued a Decision Memo that did not end the CED data collection requirements for NaF-18 PET, but extended coverage under the CED process for an additional 24 months. This means the current NCD and Medicare coverage for NaF-18 PET (under CED) will sunset on December 14, 2017. NOPR has sent notices concerning the expiration of this NCD to the participating facilities and also has an announcement on their website, but I was unable to locate any information on Medicare’s websites concerning this.

I reached out to Medicare and have received confirmation that this is indeed correct. For dates of service on and after December 15, 2017, Medicare will no longer cover NaF-18 PET scans to identify bone metastasis of cancer. There have not been any published studies that conclusively answer the study questions. Medicare denials will likely be based on the presence of HCPCS code A9580 (Sodium fluoride F-18, diagnostic, per study dose, up to 30 millicuries) on the claim.    

It is likely CMS will receive another request for reconsideration of this policy from NOPR or other stakeholders. Be on the lookout for further guidance from CMS in the future as to whether they will reinstate coverage of NaF-18 PET to identify bone metastasis of cancer under CED, cover the service outright without CED, or continue to not cover the service at all. Until that time, providers take warning – this sunset isn’t pretty since it takes away your Medicare reimbursement for NaF-18 PET.

Last week’s Wednesday@One newsletter contained an article about the new laboratory date of service policy and the molecular diagnostic services (MolDX) program.  In that article, I made this statement:

“Since CPT/HCPCS codes are not reported and separately reimbursed (on inpatient claims), the Z-codes are not required on inpatient claims.”

I thought about this before I wrote it – individual HCPCS codes are not reported or separately reimbursed on Medicare hospital inpatient claims (type of bill 11x). The inpatient stay is paid a composite payment for all inpatient services provided based on the MS-DRG assignment determined by the ICD-10 diagnosis and procedure codes reported. Since the purpose of the MolDX program is to determine coverage, coding, and pricing for molecular diagnostic tests and other molecular pathology services which are not relevant to inpatient claims and since the MolDX manual instructions state, “When (a test-specific identifier – a DEX Z-Code is) reported in conjunction with the appropriate CPT/HCPCS code, …” which also does not seem to apply to inpatient claims, I felt confident with my statement about Z-codes not being required on inpatient claims.  It seems absolutely unnecessary and makes no sense that they should be reported.

However, I could not find this definitively spelled out on the MolDX website, so I decided to submit a question to the MolDX email address. I did not receive the answers in time to make a correction to last week’s article prior to publication. Below are my questions and the answers I received from MolDX team.

Q: Since individual CPT/HCPCS codes are not submitted on inpatient claims, are DEX Z-codes required to be reported on inpatient claims when molecular pathology tests are performed on an inpatient?

A: Yes. You will need to register with DEX and obtain the Z-code for all Molecular tests performed at your location.

Q: Could you please clarify further as to where the Z-codes would be reported on the inpatient claim since individual HCPCS codes are not reported on inpatient claims?

A: DEX Z-Code identifiers need to be added in block 80 of the UB04 claim form or on line SV202-7 of the 8371 electronic claim.

Well – there you go. Even though it still makes no sense to me, these answers contradict the statement I made in last week’s article. I have removed the ‘erroneous’ statement from the article on our website. Unless there is ever definitive guidance to the contrary, it seems that the Z-codes are indeed required on inpatient claims.

That will teach me to deduce Medicare rules based on what makes sense.

Ambulance Inflation Factor for CY 2018 and Productivity Adjustment

The Calendar Year (CY) 2018 Ambulance Inflation Factor (AIF) for determining the payment limit for ambulance services is 1.1 percent.

https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/MM10323.pdf

Correction to Prevent Payment on Inpatient Information Only Claims for Beneficiaries Enrolled in Medicare Advantage Plans

Sets system edits to zero out payment on inpatient information only claims billed with condition codes 04 and 30 for Investigational Device Exemption (IDE) Studies and Clinical Studies Approved Under Coverage with Evidence Development (CED).

https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/MM10238.pdf

New Common Working File (CWF) Medicare Secondary Payer (MSP) Type for Liability Medicare Set-Aside Arrangements (LMSAs) and No-Fault Medicare Set- Aside Arrangements (NFMSAs) - RESCINDED

https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/MM9893.pdf

Clarifying Signature Requirements

Medicare requires that services provided/ordered/certified be authenticated by the persons responsible for the care of the beneficiary in accordance with Medicare’s policies. Claim denials shall be limited to those instances in which signatures that are required by Medicare policies are flawed or missing.

https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2017Downloads/R751PI.pdf

Clinical Laboratory Improvement Amendments of 1988 (CLIA); Fecal Occult Blood (FOB) Testing

Clarifies CLIA regulations that the waived test categorization applies only to non- automated fecal occult blood tests.

https://www.gpo.gov/fdsys/pkg/FR-2017-10-20/pdf/2017-22813.pdf

Calculating Interim Rates for Graduate Medical Education (GME) Payments to New Teaching Hospitals – REVISED

Re-issued to revise several policy statements and to address how to handle certain impacted claims.

https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/MM10240.pdf

New Common Working File (CWF) Medicare Secondary Payer (MSP) Type for Liability Medicare Set-Aside Arrangements (LMSAs) and No-Fault Medicare Set-Aside Arrangements (NFMSAs) – REPLACED

Removes provider education requirements from original transmittal.

https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2017Downloads/R1954OTN.pdf

Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs Final Rule

Revises the Medicare hospital outpatient prospective payment system (OPPS) and the Medicare ambulatory surgical center (ASC) payment system for CY 2018.

https://www.gpo.gov/fdsys/pkg/FR-2017-11-13/pdf/2017-23932.pdf

Revisions to Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2018

Addresses changes to the Medicare physician fee schedule (PFS) and other Medicare Part B payment policies to update payment systems to reflect changes in medical practice and the relative value of services, as well as changes in the statute. In addition, this final rule includes policies necessary to begin offering the expanded Medicare Diabetes Prevention Program model.

https://www.gpo.gov/fdsys/pkg/FR-2017-11-15/pdf/2017-23953.pdf

Implementation of the Award for the Jurisdiction Part A and Part B Medicare Administrative Contractor (JJ A/B MAC)

Announces CMS has awarded the JJ A/B MAC contract for the administration of the Part A and Part B Medicare fee-for-service claims in the states of Alabama (AL), Georgia (GA) and Tennessee (TN) to Palmetto GBA LLC.

https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2017Downloads/R1960OTN.pdf

Update to Pub 100-04, Chapter -18 Preventive and Screening Services -Screening for Lung Cancer with Low Dose Computed Tomography (LDCT)

Adds ICD-10 diagnosis codes: F17.210 (Nicotine dependence, cigarettes, uncomplicated), F17.211 (Nicotine dependence, cigarettes, in remission), F17.213 (Nicotine dependence, cigarettes, with withdrawal), F17.218 (Nicotine dependence, cigarettes, with other nicotine-induced disorders), or F17.219 (Nicotine dependence, cigarettes, with unspecified nicotine-induced disorders), for LDCT coverage.

https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2017Downloads/R3901CP.pdf

Billing Requirements for Ophthalmic Bevacizumab

Clarifies HCPCS code for billing ophthalmic bevacizumab.

https://www.palmettogba.com/palmetto/providers.nsf/ls/JM%20Part%20A"ASURVC5135?opendocument&utm_source=J11AL&utm_campaign=JMALs&utm_medium=email

Notification of the 2018 Dollar Amount in Controversy Required to Sustain Appeal Rights for an Administrative Law Judge (ALJ) Hearing or Federal District Court Review

ALJ hearing requests amount for 2018 will remain at $160. Federal District Court appeals amount will increase to $1,600 for 2018.

https://www.palmettogba.com/palmetto/providers.nsf/ls/JM%20Part%20A"97KFK41765?opendocument&utm_source=J11AL&utm_campaign=JMALs&utm_medium=email

Accepting Payment from Patients with a Medicare Set-Aside Arrangement

Explains what a MSA is and explains why it is appropriate to accept payment from a patient that has a funded MSA.

https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/SE17019.pdf

CMS Hospital Value-Based Purchasing Program Results for Fiscal Year 2018

Fact Sheet describing VBP program and updates. Estimates the total amount available for value-based incentive payments for FY 2018 discharges will be approximately $1.9 billion.

https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2017-Fact-Sheet-items/2017-11-03.html?DLPage=1&DLEntries=10&DLSort=0&DLSortDir=descending

Additional Appeals Settlement Option

CMS will make available an additional settlement option for providers and suppliers (appellants) with appeals pending at the Office of Medicare Hearings and Appeals (OMHA) and the Medicare Appeals Council (the Council) at the Departmental Appeals Board.

https://www.cms.gov/Medicare/Appeals-and-Grievances/OrgMedFFSAppeals/Hospital-Appeals-Settlement-Process-2016.html

ICD-10 and Other Coding Revisions to National Coverage Determinations (NCDs)

NCD coding changes the result of newly available codes, coding revisions to NCDs released separately, or coding feedback received.

https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/MM10318.pdf

CMS Posts RAC Review Topics

CMS has begun to post a list of review topics that have been proposed, but not yet approved, for RACs to review. These topics will be listed, on a monthly basis, on the Provider Resources page.

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

Partial Settlement of 2-Midnight Policy Court Cases

Provides instructions to Medicare Administrative Contractors (MACs) on how to ensure hospitals receive additional payments due to a partial settlement agreement regarding the 0.2 percent downward adjustment beginning in Fiscal Year ("FY") 2014.

https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2017Downloads/R1969OTN.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/MM10321.pdf

Annual Update of HCPCS Codes Used for Home Health Consolidated Billing Enforcement

Provides the 2018 annual update to the list of Healthcare Common Procedure Coding System (HCPCS) codes used by Medicare systems to enforce consolidated billing of home health services.

https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/MM10308.pdf

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

Updates the Remittance Advice Remark Codes (RARC) and Claims Adjustment Reason Code (CARC) lists and instructs Medicare Shared System Maintainers (SSMs) to update Medicare Remit Easy Print (MREP) and PC Print.

https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/MM10270.pdf

Claim Status Category Codes and Claim Status Codes Update

MAC and shared systems changes will be made as necessary as part of a routine release to reflect applicable changes such as retirement of previously used codes or newly created codes.

https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/MM10271.pdf

Therapy Cap Values for Calendar Year (CY) 2018

For physical therapy and speech-language pathology combined, the CY 2018 cap is $2,010. For occupational therapy, the CY 2018 cap is $2,010.

https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/MM10341.pdf

New Positron Emission Tomography (PET) Radiopharmaceutical/Tracer Unclassified Codes

CMS has created two new PET radiopharmaceutical unclassified tracer codes that can be used temporarily pending the creation/approval/implementation of permanent CPT codes that would later specifically define their function: A9597 - Positron emission tomography radiopharmaceutical, diagnostic, for tumor identification, not otherwise classified; A9598 – Positron emission tomography radiopharmaceutical, diagnostic, for non-tumor identification, not otherwise classified.

https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/MM10319.pdf

2018 Medicare Parts A & B Premiums and Deductibles

On November 17, 2017, the Centers for Medicare & Medicaid Services (CMS) released the 2018 premiums, deductibles, and coinsurance amounts for the Medicare Part A and Part B programs. The standard monthly premium for Medicare Part B enrollees will be $134 for 2018, the same amount as in 2017. The annual deductible for all Medicare Part B beneficiaries will be $183 in 2018, the same annual deductible in 2017. The Medicare Part A annual inpatient hospital deductible that beneficiaries pay when admitted to the hospital will be $1,340 per benefit period in 2018, an increase of $24 from $1,316 in 2017.

https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2017-Fact-Sheet-items/2017-11-17.html

Quarterly Update of HCPCS Codes Used for Home Health Consolidated Billing Enforcement

Provides the quarterly update of HCPCS codes used for HH consolidated billing effective April 1, 2018.

https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/MM10374.pdf

Q:

Will Medicare payments be reduced for 2018 for X-rays taken using computed radiography imaging?  If so, why?

A:

Yes, payments for imaging services taken using computed radiography imaging will be reduced for CY 2018 and subsequent years. The Consolidated Appropriations Act, 2016, which was enacted on December 18, 2015, contains provisions to incentivize the transition from traditional X-ray imaging to digital radiography by reducing payment for older imaging technology. 

The reduction for computed radiography (CR) will be phased in over several years. The Act requires that payments for CR services furnished during CY 2018, 2019, 2020, 2021, or 2022, be reduced by 7%, and if such services are furnished during CY 2023 or a subsequent year, by 10%. Computed radiography technology is defined as cassette-based imaging which utilizes an imaging plate to create the image involved.

CMS created a new modifier – modifier “FY” (X-ray taken using computed radiography technology/cassette-based imaging) to be reported on claims to identify those HCPCS codes that describe X-rays taken using CR technology. The payment reduction (7% for 2018) will be taken when this modifier is reported with the applicable HCPCS code(s) to describe imaging services that are taken using CR technology.

Already implemented beginning in 2017 as a requirement of the Act, payment for X-rays taken using film is reduced by 20 percent. Providers are required to report modifier “FX” (X-ray taken using film) with the appropriate HCPCS codes to identify x-rays taken using film.  The 20% payment reduction is taken when this modifier is reported with the applicable HCPCS code(s) for film x-rays. This 20% reduction began in January 1, 2017 and continues for subsequent years.

Due to increased packaging of payment for ancillary services over the past few years, payment for some x-ray services is packaged into the payment for the primary service. When payment for an X-ray service taken using film or computed radiography imaging is packaged into the payment for another item or service under the OPPS, no separate payment for the X-ray service is made. Therefore, there will be no payment reduction for packaged x-ray services.

An addendum to this article can be found by clicking here.

Background

The MolDX program requires billing laboratories to register in the DEX Diagnostics Exchange and apply for and obtain a unique test identifier (a Z-code) for each molecular diagnostic test (MDT) or lab developed test (LDT) they perform. If the billing laboratory does not perform the test but instead sends it to an outside laboratory to be performed, it is still the billing laboratory that must submit the Z-code on its claim. In this case, the billing lab obtains the DEX Z-CodeTM for the molecular test(s) from the performing laboratory, either directly or through the DEX system. Only certain MAC jurisdictions participate in the MolDX program. Since Palmetto is a MAC that participates, Jurisdiction J providers must follow the rules of the MolDX program sometime after transition (effective date to be announced by Palmetto but no earlier than March 2018).

Because of the unique nature of the tests in the MolDX program, hospital laboratories often do not perform these tests, but send most or all of them to an outside reference laboratory to be performed. Currently, Medicare’s laboratory billing and date of service rules require hospitals to bill Medicare directly for tests performed by another laboratory on hospital inpatients or outpatients. The hospital lab has to then pay the testing lab “under arrangements” for performing the test. The only current exception to this requirement is the laboratory date of service 14-day rule, which only applies when the test is ordered at least 14 days after discharge along with other criteria. This can be a burden on hospitals because sometimes the Medicare reimbursement to the hospital is less than the reference lab’s charge for the test. The MolDX program adds the additional burden of having to obtain and submit the Z-code on the Medicare claim in order to be paid.

So how does the new lab DOS policy affect the MolDX program?

In the 2018 OPPS final rule, CMS finalized a new laboratory date of service rule for hospital outpatients for molecular pathology and advanced diagnostic laboratory tests (ADLTs).  These are MDTs and ADLTs that are not packaged under OPPS but are paid separately under the lab fee schedule with an OPPS Status Indicator of “A.”  Basically, beginning January 1, 2018, if these types of tests are collected from a hospital outpatient but the test is not performed until after the patient’s discharge, then under the new rule, the testing lab must bill Medicare directly. The hospital lab cannot bill Medicare for molecular pathology tests and ADLTs performed after discharge unless they actually perform the test.

Because of this new rule, hospital laboratories will not be billing for molecular diagnostic tests and ADLTs with an SI of “A” that they do not perform in their own laboratory if all the requirements of the new date of service rule are met. This means they will not have to obtain or report a unique test identifier (a Z-code) for these tests that are sent to outside laboratories. In this case, the new rule relieves both of the burdens mentioned above.

There are some tests within the MolDX program that do not meet the definition for separately payable MDTs or ADLTs. These tests are conditionally packaged under OPPS with a status indicator of “Q4.” Medicare packages payment for the “Q4” lab tests when reported on a claim with other outpatient services, but pays hospitals separately for these tests if only laboratory tests are billed on the claim. When billing for these tests, the hospital will need to include a Z-code on the claim even if the test was performed under arrangements by an outside laboratory.

There are numerous local coverage determinations (LCDs) for the MolDX tests in the MAC jurisdictions that participate in the MolDX program. Providers should be familiar with the covered indications for the tests they furnish, whether they perform the test themselves or send it to an outside lab for testing. These outside testing labs will not be happy to be denied their Medicare reimbursement for lack of medical necessity because your hospital did not follow the LCD requirements.

The new rule does not apply to tests performed on inpatients. For inpatient testing sent to outside laboratories, the hospital bills Medicare directly and the testing lab receives payment from the hospital.  The only exception would be for tests that meet the lab DOS 14-day rule. Hospitals submit an inpatient claim to Medicare and are paid a MS-DRG payment for inpatients so individual lab CPT/HCPCS codes are not reported on the claim.

Figuring It Out

1. Performing laboratory bills; hospital doesn’t need Z-code: All hospital laboratories will want to identify the molecular pathology and ADLTs with an SI of “A” that they send to an outside lab for testing. Providers can determine the Status Indicator of laboratory tests by referring to Addendum B of the final rule. If the testing meets the new date of service rules (which it should), the testing lab must bill Medicare directly for these tests. Per the OPPS final rule, “hospital laboratories cannot bill for these tests unless they perform them.” Since the hospital will not be billing for tests sent out for testing that meet the new lab date of service rule, the hospital will not need to obtain a Z-code for these tests.

2. Hospital bills for tests performed by another lab and reports Z-code: Hospitals also need to identify the MolDX tests they send to an outside lab for testing that have a status indicator of “Q4.” Providers can determine the Status Indicator of laboratory tests by referring to Addendum B of the final rule. The hospital will bill Medicare directly for these tests and will need to obtain a Z-code from either the performing lab directly or through the DEX system. The Z-code must be submitted on the claim when billing Medicare for these tests.

3. Hospital performs and bills for tests and reports Z-code; And finally, hospitals need to identify the MolDX tests they perform in the hospital lab. The hospital will need to apply for and obtain the DEX Z-CodeTM before performing these tests. The Z-code must be submitted on the claim when billing Medicare for these tests.

Hospital labs need to be aware of both the new date of service rule and the reporting requirements for MolDX tests, and how one rule affects the other.  Review and follow the steps above to determine which molecular pathology and ADLTs your hospital must bill and when Z-code reporting is required.

Resources:
MolDX website - https://www.palmettogba.com/moldx
OPPS Addendum B - https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html
Watch for Medicare Transmittals that give more information on the new Laboratory Date of Service rule.