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No hospitals want the Office of Inspector General (OIG) to come knocking on their door. If they do, they will likely find at least some billing errors which will likely result in the need to refund payments.  The hospital also has to respond to the OIG findings and give reasons for the errors.  These may often sound like excuses, but if there were improper payments, there was a reason, excuse or not.  Sometimes the dog does eat the homework.  In a recent OIG report concerning outpatient services furnished before or during inpatient stays, hospitals gave the following reasons for incorrect billing.

• They did not understand Medicare requirements,
• Clerical errors, and
• They were not aware the patients were inpatients at other hospitals.

Clerical errors and lack of complete patient information are going to happen.  Your hospital can decrease the likelihood of their occurrence by having well-trained employees and sufficient oversight.  I think CMS will find the lack of understanding of Medicare rules to be the most egregious of the reasons.  It may fall under the “should have known” or “deliberate ignorance” category of excuses.  Lack of understanding of Medicare requirements is shaky ground.  This is why MMP provides this newsletter and our other services – to help educate providers concerning Medicare requirements – so let’s look at outpatient services furnished before or during inpatient stays.

An inpatient admission includes room and board; nursing and social services; diagnostic, therapeutic, and surgical services; drugs, supplies, and equipment; and transportation services.  In fact the only services listed in Chapter One of the Medicare Benefits Manual  as not included in the inpatient admission are post-hospital nursing facility services and the professional services of physicians and other practitioners.  On occasion, inpatients may have to be sent to another facility to receive services not offered at the host (admitting) hospital.  Such services are provided “under arrangements” to the patient – this means:

• the host hospital includes the charges for the services on their inpatient claim to Medicare and
• the host hospital pays the other facility for the services.

There should be clear communication between the hospital and other facilities for any “under arrangement” services so that inappropriate billing does not occur.  Inpatients may also go to outpatient departments within the host hospital during their inpatient stay to receive services – these services are included in the inpatient hospitalization and are not separately billable as outpatient services to Medicare.

Medicare has rules that certain outpatient services furnished before an inpatient admission also have to be bundled onto the inpatient claim.  This is known as the three-day payment window rule.  In general, outpatient services furnished within 3 days prior to and including the date of the patient’s admission are deemed to be inpatient services and included in the inpatient payment. For Medicare there are always nuances to the rules, and this one is no different.

• The rule applies to outpatient services furnished by the admitting hospital, or by an entity wholly owned or wholly operated by the admitting hospital, or by another entity under arrangements with the admitting hospital. This includes the technical portion of services provided at a hospital-owned or hospital-operated physician clinic or practice.
• The patient must have Part A coverage for the rule to apply.
• Ambulance services, maintenance renal dialysis services, and Part A services furnished by skilled nursing facilities, home health agencies, and hospices are excluded from the payment window provisions.
• The 3-day rule applies to IPPS hospitals (hospitals paid under the inpatient prospective payment system). For hospitals and units excluded from IPPS, this provision applies only to services furnished within one day prior to and including the date of the admission (a 1-day rule).
• It is a 3 day rule and NOT a 72 hour rule. Three days means the 3 calendar days prior to admission – for a patient admitted on a Wednesday, the 3 days would be Sunday, Monday, and Tuesday.
• Outpatient services furnished more than 3 days prior to admission, even if part of a single, continuous outpatient encounter prior to admission, are not included on the inpatient claim and may be billed separately on an outpatient claim.
• The rule does not apply to some differently paid entities, such as CAHs, RHCs, and FQHCs. You should read the regulation in Chapter 3, Medicare Claims Processing Manual, section 40.3 for complete information on exclusions.

The 3-day rule is also affected by the type of services provided and whether they are related to the reason for admission or not.  I like to break the rule down into three parts for easier understanding.

• All outpatient services (diagnostic and non-diagnostic) subject to the rule that are provided on the day of admission must be billed with the inpatient admission.
• All outpatient diagnostic services provided within the 3- day payment window (or 1-day window for non-IPPS hospitals) must be billed with the inpatient admission.
• Non-diagnostic services related to the inpatient admission and provided within the payment window must be billed with the inpatient admission.

The billing hospital determines and attests if non-diagnostic services furnished on the first, second, or third day prior to admission are unrelated to the inpatient admission.  Medicare defines unrelated services as services that are clinically distinct or independent from the reason for the beneficiary’s admission.  These “unrelated” services may be billed on a separate outpatient (Part B) claim with a condition code “51” which is the hospital’s attestation the services are unrelated. Documentation in the patient’s medical record must support that the non-diagnostic services provided within the payment window are unrelated to the patient’s inpatient admission.

The section of the Claims Processing Manual referenced above also includes further explanations and definitions of ownership, non-IPPS hospitals, diagnostic services, and more. Providers need to carefully review the guidance in the manual to have a complete understanding of all the requirements for billing outpatient services provided prior to admission.

This advice applies to all Medicare requirements.  It is the provider’s responsibility to be knowledgeable of Medicare rules, regulations, and guidance. Remember, not “knowing” or not “understanding” are not good excuses.

At least annually, DRG classifications and relative weights are adjusted to reflect changes in treatment patterns, technology, and other factors that may change the relative use of hospital resources. This week is the third and final article in our series about the FY 2018 IPPS Final Rule. We finish by sharing several of the changes to the Medicare Severity Diagnosis-Related Group (MS-DRG) Classifications.   

MDC 1: Diseases and Disorders of the Nervous System

Functional Quadriplegia

Section 1.C.18.f of the FY 2017 ICD-10-CM Official Coding Guidelines addresses coding the diagnosis of functional quadriplegia. “Functional quadriplegia (described by diagnosis code R53.2) is the lack of ability to use one’s limbs or to ambulate due to extreme debility. The condition is not associated with neurologic deficit or injury, and diagnosis code R53.2 should not be used to identify cases of neurologic quadriplegia. In addition, the Guidelines state that the diagnosis code should only be assigned if functional quadriplegia is specifically documented by a physician in the medical record, and the diagnosis of functional quadriplegia is not associated with a neurologic deficit or injury. A physician may document the diagnosis of functional quadriplegia as occurring with a variety of conditions.”

CMS received a request to reassign cases identified by diagnosis code R53.2 from MS-DRGs 052 and 053 (Spinal Disorders and injuries with and without CC/MCC, respectively). One commenter noted the ICD-10-CM code for functional quadriplegia is located in Chapter 18, Symptoms, Signs and Abnormal findings because it can be the result of a variety of underlying conditions and it is not appropriate to classify this diagnosis as a nervous system disorder.  Clinical advisors agreed and CMS has finalized the assignment of code R532 (functional quadriplegia) to MS-DRGs 947 and 948 (Signs and Symptoms with MCC and without MCC, respectively).

Responsive Neurostimulator (RNS©) System

The RNS© Neurostimulator is a cranially implanted neurostimulator that is a treatment option for persons diagnosed with medically intractable epilepsy. Currently these cases are assigned to MS-DRG 023 (Craniotomy with Major Device Implant or Acute Complex Central Nervous System (CNS) Principal Diagnosis (PDX) with MCC or Chemo Implant) and MS-DRG 024 (Craniotomy with Major Devise Implant or Acute Complex CNS PDx without MCC).

For FY 2018, CMS is reassigning all cases with a principal diagnosis of epilepsy… and one of the following ICD-10-PCS code combinations capturing cases with the neurostimulator generators inserted into the skull (including cases involving the use of the RNS© neurostimulator), to MS-DRG 023, even if there is no MCC reported:

• 0NH00NZ (Insertion of neurostimulator generator into skull, open approach), in combination with 00H00MZ (Insertion of neurostimulator lead into brain, open approach);
• 0NH00NZ (Insertion of neurostimulator generator into skull, open approach), in combination with 00H03MZ (Insertion of neurostimulator lead into brain, percutaneous approach); and
• 0NH00NZ (Insertion of neurostimulator generator into skull, open approach), in combination with 00H04MZ (Insertion of neurostimulator lead into brain, percutaneous endoscopic approach).

A complete list of epilepsy codes assigned to MS-DRG 023 can be found on page 38016 of the Final Rule.

The title for MS-DRG 023 is changing to “Craniotomy with Major Device Implant or Acute Complex Central Nervous System (CNS) Principal Diagnosis (PDX) with MCC or Chemotherapy Implant or Epilepsy with Neurostimulator” to reflect the modifications to MS-DRG assignments.

Precerebral Occlusion or Transient Ischemic Attack with Thrombolytic

“At the onset of stroke symptoms, tPA must be given within 3 hours (or up to 4.5 hours for certain eligible patients) in an attempt to dissolve a clot and improve blood flow to the specific area affected in the brain. If, upon receiving the tPA, the stroke symptoms completely resolve within 24 hours and imaging studies (if performed) are negative, the patient has suffered what is clinically defined as a transient ischemic attack, not a stroke.”

For FY 2018, ICD-10-CM diagnosis codes assigned to MS-DRGs 067, 068, and 069 will be added to the GROUPER logic for MS-DRGs 061, 062 and 063 when sequenced as principal diagnosis and reported with an ICD-10-PCS code describing use of a thrombolytic agent (for example, tPA). The title of MS-DRGs 061, 062 and 063 are changing to “Ischemic Stroke, Precerebral Occlusion or Transient Ischemia with Thrombolytic Agent with MCC, with CC and without CC/MCC” respectively, and the title of MS-DRG 069 is changing to “Transient Ischemia without Thrombolytic.”

MDC 2: Diseases and Disorders of the Eye

Swallowing Eye Drops (Tetrahydrozoline)

CMS finalized moving the following four diagnosis codes describing swallowing eye drops:

• 5X1A (Poisoning by ophthalmological drugs and preparations, accidental (unintentional), initial encounter);
• 5X2A (Poisoning by ophthalmological drugs and preparations, intentional self-harm, initial encounter);
• 5X3A (Poisoning by ophthalmological drugs and preparations, assault, initial encounter); and
• 5X4A (Poisoning by ophthalmological drugs and preparations, undetermined, initial encounter).

These codes will move from MS-DRGs 124 and 125 (Other Disorders of the Eye with and without MCC, respectively) to MS- DRGs 917 and 918 (Poisoning and Toxic Effects of Drugs with and without MCC, respectively).

MDC 5: Diseases and Disorders of the Circulatory System

Percutaneous Cardiovascular Procedures and Insertion of a Radioactive Element

Currently the following six procedure codes are included in MS-DRG 246 (Percutaneous Cardiovascular Procedures with Drug-Eluting Stent with MCC or 4+ Vessels or Stents), MS-DRG 247 (Percutaneous Cardiovascular Procedures with Drug-Eluting Stent without MCC), MS-DRG 248 (Percutaneous Cardiovascular Procedures with Non-Drug-Eluting Stent with MCC or 4= Vessels or Stents), and MS-DRG and 249 (Percutaneous Cardiovascular Procedures with Non-Drug-Eluting Stent without MCC):  

• WHC01Z: Insertion of radioactive element into mediastinum, open approach
• 0WHC31Z: Insertion of radioactive element into mediastinum, percutaneous approach
• 0WHC41Z: Insertion of radioactive element into mediastinum, percutaneous endoscopic approach
• 0WHD01Z: Insertion of radioactive element into pericardial cavity, open approach
• 0WHD31Z: Insertion of radioactive element into pericardial cavity, percutaneous approach
• 0WHD41Z: Insertion of radioactive element into pericardial cavity, percutaneous endoscopic approach

When any of the above procedure codes are reported without a percutaneous cardiovascular procedure code, they are assigned to MS-DRG 264 (Other Circulatory System O.R. Procedures).

“Unlike procedures involving the insertion of stents, none of the procedures described by the procedure codes listed above are performed in conjunction with a percutaneous cardiovascular procedure, and two of the six procedures described by these procedure codes (ICD-10-PCS codes 0WHC01Z and 0WHD01Z) are not performed using a percutaneous approach, but rather describe an open approach to performing the specific procedure…Furthermore, the indications for the insertion of a radioactive element typically involve a diagnosis of cancer, whereas the indications for the insertion of a coronary artery stent typically involve a diagnosis of coronary artery disease.” For FY 2018, these six “insertion of radioactive element” codes will maintain their current assignment to MS-DRG 264 and be removed from MS-DRGs 246 through 249.  

MS-DRG Title Change for MS-DRGs 246 and 248

CMS finalized changing the title for MS-DRG 246 and 247 to better reflect the ICD-10-PCS terminology of “arteries” versus “vessels.” The two new MS-DRG titles will be:

• MS-DRG 246: Percutaneous Cardiovascular Procedures with Drug-Eluting Stent with MCC or 4+ Arteries or Stents
• MS-DRG 248: Percutaneous Cardiovascular Procedures with Non-Drug-Eluting Stent with MCC or 4+ Arteries or Stents
  

Percutaneous Mitral Valve Replacement Procedures

“MS-DRGs 266 and 267 were created to uniquely classify the subset of high-risk cases representing patients who undergo a cardiac valve replacement procedure performed by a percutaneous (endovascular) approach.” 

Currently GROUPER logic for aortic and pulmonary valves are included in MS-DRGs 266 and 266. However, for the mitral valve, the GROUPER logic includes the procedures in the transapical, percutaneous approach.

CMS agreed with a requestor that all cardiac valve replacement procedures should be grouped within the same MS-DRG and finalized the reassignment of the following four mitral valve replacement procedures from MS-DRGs 216 through 221 (Cardiac Valve and Other Major Cardiothoracic Procedures with and without Cardiac Catheterization with MCC, with CC and without CC/MCC respectively) to MS-DRGs 266 and 267 (Endovascular Cardiac Valve Replacement with MCC and without MCC, respectively)

• 02RG37Z: Replacement of mitral valve with autologous tissue substitute, percutaneous approach
• 02RG38Z: Replacement of mitral valve with zooplastic tissue, percutaneous approach
• 02RG3JZ: Replacement of mitral valve with synthetic substitute, percutaneous approach
• 02RG3KZ: Replacement of mitral valve with nonautologous tissue substitute, percutaneous approach
  

Additionally, CMS finalized the assignment of the following eight new procedures codes, effective October 1, 2017, describing percutaneous and transapical, percutaneous tricuspid valve replacement procedures to MS-DRGs 266 and 267:  

• 02RJ37H: Replacement of tricuspid valve with autologous tissue substitute, transapical, percutaneous approach.
• 02RJ37Z: Replacement of tricuspid valve with autologous tissue substitute, percutaneous approach.
• 02RJ38H: Replacement of tricuspid valve with zooplastic tissue, transapical, percutaneous approach.
• 02RJ38Z: Replacement of tricuspid valve with zooplastic tissue, percutaneous approach.
• 02RJ3JH: Replacement of tricuspid valve with synthetic substitute, transapical, percutaneous approach.
• 02RJ3JZ: Replacement of tricuspid valve with synthetic substitute, percutaneous approach.
• 02RJ3KH: Replacement of tricuspid valve with nonautologous tissue substitute, transapical, percutaneous approach.
• 02RJ3KZ: Replacement of tricuspid valve with nonautologous tissue substitute, percutaneous approach.

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

Total Ankle Replacement (TAR) Procedures

TAR procedures are currently assigned to MS-DRGs 469 and 470 (Major Joint Replacement or Reattachment of Lower Extremity with MCC and without MCC, respectively).  

CMS finalized that all TAR procedures be reassigned from MS-DRG 470 to MS-DRG 469, even when there is no MCC reported noting “the claims data support the fact that these cases require more resources than other cases assigned to MS-DRG 470.”

Specific codes proposed for reassignment to MS-DRG 469 include the following:

• 0SRF0J9 (Replacement of right ankle joint with synthetic substitute, cemented, open approach);
• 0SRF0JA (Replacement of right ankle joint with synthetic substitute, uncemented, open approach);
• 0SRF0JZ (Replacement of right ankle joint with synthetic substitute, open approach);
• 0SRG0J9 (Replacement of left ankle joint with synthetic substitute, cemented, open approach);
• 0SRG0JA (Replacement of left ankle joint with synthetic substitute, uncemented, open approach); and
• 0SRG0JZ (Replacement of left ankle joint with synthetic substitute, open approach) for FY 2018.

Additionally, CMS finalized the following title changes for MS-DRG 469 and 470:

• MS-DRG 469: Major Hip and Knee Joint Replacement or Reattachment of Lower Extremity with MCC or Total Ankle Replacement; and
• MS-DRG 470: Major Hip and Knee Joint Replacement or Reattachment of Lower Extremity without MCC.

Revision of Total Ankle Replacement

CMS noted in the Proposed Rule that they had received two requests to modify the MS-DRG assignment for revision of Total Ankle Replacement (TAR) procedures, indicating these procedures are assigned to MS-DRGs 515, 516, and 517 (Other Musculoskeletal System and Connective Tissue O.R. Procedures with MCC, with CC, and without CC/MCC respectively).

CMS Response Key Takeaways

• CMS conducted an analysis of the correct coding revision and agreed with commenters that these cases are not captured with ICD-10-PCS codes with the root operation “Revision” as stated in the Proposed Rule. Instead, the revision of TAR cases are correctly coded using a combination of codes with the root operation “Removal and Replacement” as commenters suggested.
• CMS has asked the American Hospital Association to provide additional information on how to capture revision of TARs in a future issue of Coding Clinic for ICD-10.
• CMS noted that an error in replication for the ICD-10 MS-DRGs resulted in the revision of TAR procedures being assigned to MS-DRGs 469 and 470. This error was not noticed until commenters on the FY 2018 proposed rule pointed out that accurate coding of TARs would result in cases not being assigned to MS-DRGs 515, 516, and 517.
• Since the implementation of ICD-10 MS-DRGs, revision TAR procedures have not been assigned to MS-DRGs 515,516, and 517. Therefore, there is no need to modify MS-DRG logic to reassign the procedures because correctly coded cases are assigned to MS-DRGs 469 and 470.
• CMS noted that by finalizing that all TAR procedure codes be assigned to MS-DRG 469, even if there is no MCC present, for FY 2018 this will result in all revision of TAR procedures being assigned to MS-DRG 469.

Combined Anterior/Posterior Spinal Fusion

It was brought to the attention of CMS “that 7 of the 10 new ICD-10-PCS procedure codes describing fusion using a nanotextured surface interbody fusion device were not added to the appropriate GROUPER logic list for MS-DRGs 453, 454, and 455 (Combined Anterior/Posterior Spinal Fusion with MCC, with CC and without CC/MCC, respectively), effective October 1, 2016. The logic for MS-DRGs 453, 454, and 455 is comprised of two lists: an anterior spinal fusion list and a posterior spinal fusion list. Assignment to one of the combined spinal fusion MS-DRGs requires that a code from each list be reported.”

After reviewing spinal fusion codes using a nanotextured surface interbody fusion device CMS finalized the following:

• Moving 7 codes describing spinal fusion using a nanotextured surface interbody fusion device from the posterior spinal fusion list to the anterior spinal fusion list in the GROUPER logic for MS-DRGS 453, 454, and 455.
• Moving 149 procedures codes describing spinal fusion of the anterior column with a posterior approach from the posterior spinal fusion list to the anterior spinal fusion list in the GROUPER logic for MS-DRGs 453, 454, and 455.
• Deleting 33 procedure codes describing spinal fusion of the posterior column with an interbody fusion device from MS-DRGs 453 through 460 and 471 through 473, as well as from the ICD-10-PCS classification.

Review of Procedures Codes in MS-DRGs 981 through 983, 984 through 986; and 987 through 989

Annually, CMS reviews the following cases to determine if it would be appropriate to change the procedures assigned among these MS-DRGs:

• MS-DRGs 981, 982, and 983: Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively,
• MS-DRGs 984, 985, and 986: Prostatic O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively; and
• MS-DRGs 987, 988, and 989: Nonextensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively.

These MS-DRGs are reserved for when none of the O.R. procedures performed are related to the principal diagnosis. They are “intended to capture atypical cases, that is, those cases not occurring with sufficient frequency to represent a distinct, recognizable clinical group.”

Based on claims data review CMS found it is no longer necessary to maintain a separate set of MS-DRGs specifically for the prostatic O.R. procedures and therefore finalized the following:

• Reassign procedure codes currently assigned to MS-DRGs 984 through 986 to MS-DRGs 987; and
• Delete MS-DRGs 984, 985 and 986 as they would no longer be needed.

In the Final Rule, CMS encourages input from stakeholders concerning annual IPPS updates. In previous years, to be considered for the next annual proposed rule update, CMS has required that input be sent to them by December 7th of the prior year. As CMS undertakes working with ICD-10 data they note this will require additional time and are changing the deadline to request updates to MS-DRGs to November 1 of each year which provides them with 5 additional weeks for the data analysis and review process. For those interested in submitting comments and/or suggestions for FY 2019, they need to be sent by November 1, 2017, via the CMS MS_DRG Classification Change Requests Mailbox located at: MSDRGClassificationChange@cms.hhs.gov.

As stated in the opening of this article, we have shared a few key highlights from this portion of the Final Rule. MMP encourages all key stakeholders to take the time to dive a little deeper into the detail.

Q:

Our hospital is receiving Medicare denials for claims when the patient has outpatient dialysis (HCPCS code G0257) and a balloon angioplasty of the dialysis catheter (CPT 36905) during the same outpatient encounter.  We know CPT 36905 has a status indicator (SI) of J1 and payment for all adjunctive services will be bundled into the payment for that code.  We do not understand why we are not being paid at all for this claim

A:

The most likely reason your claim is denying is because there is a procedure-to-procedure (PTP) National Correct Coding (NCCI) edit for the code combination G0257 and 36905. The outpatient dialysis code (G0257) is the column one code and the PTA (36905) is the column two code.  A modifier appended to the column two code (36905) is allowed to by-pass this edit. 

Even though there is no separate payment for the outpatient dialysis due to the “J1” packaging, Medicare still applies NCCI edits to all codes submitted on the claim.  If there is a PTP CCI edit for a code combination on the claim that is not modified to by-pass the edit, that line item will deny.  In this case, all of your payment is associated with the denied line item and there is $0 payment for the entire claim.

We have also seen denials for services that pay separately under the J1 packaging, such as brachytherapy sources which have an SI of “U”.  The brachytherapy source denied because a modifier was not added to the HCPCS code to by-pass a CCI edit. In one example the brachytherapy source (HCPCS C2616) was billed with radiopharmaceutical localization of a tumor (CPT 78800).  There is a PTP edit for this code combination with C2616 being the column two code.  As such it requires a modifier to by-pass the edit and allow separate payment when reported with a J1 comprehensive APC.

Most hospitals’ billing systems have Medicare pre-claim submission edits that alert the billers when an NCCI PTP code combination without a modifier to by-pass the edit is reported. The billers should have clear guidance, procedures, and assistance in determining when the addition of a modifier is appropriate.  This is especially important for high-dollar claims where the facility stands to lose a substantial amount of reimbursement if denied. 

Oh, the sounds of summer – waves crashing on the beach, birds chirping, bees buzzing, crickets filling the night with their chirping, and lawn mowers humming. Yes, lawn care is very much a necessary part of our summer routine and Americans love their pristine lawns. We even pay lawn care companies to spray our yards with fertilizers, weed control, insect and grub control, pre-emergents, and chemicals to prevent lawn diseases. The lawn care technician leaves a receipt listing the treatments which were applied that day. But what if you received your bill and there were charges for treatments that the technician did not include on your receipt? The receipt is all you have to verify what was done and you know what they say – “if it’s not documented, it wasn’t done.”  This is not necessarily true, but for payment and legal purposes it is the standard. Those of us working in healthcare are very familiar with this adage, but Medicare review contractors still deny numerous claims for insufficient documentation.

Here are some tips about proper documentation to support the Medicare services provided that I present as Know, Respond, Gather, and Sign.

1. KNOW – It is the provider’s responsibility to know the Medicare documentation requirements to support provision and billing of services. Providers should not wait until they receive an Additional Documentation Request (ADR) to review the coverage and documentation requirements. Instead, providers should have processes in place to ensure the services meet Medicare’s requirements prior to the provision of the services. Coverage and documentation rules can be found in various Medicare publications, such as Medicare coverage policies – national coverage determinations (NCDs) and local coverage determinations (LCDs). In addition to explaining the conditions for which a service is covered, these policies often explain what documentation is required in the medical record to substantiate the medical necessity of the service. Some requirements, such as the need for a signed certification of a plan of care for rehabilitative therapy services, can be found in the Medicare manuals. Other sources of information target those services for which Medicare reviewers have identified ongoing errors. Since the ongoing errors may result in continuing audits of these services, providers need to carefully review educational materials which address these. The Medicare Quarterly Provider Compliance Newsletter, facts sheets such as Complying with Medical Record Documentation Requirements, and audit findings from the individual Medicare Administrative Contractors (MACs) on their websites all offer great guidance for documentation of services at higher risk of review.
2. RESPOND – There are often a large number of denials for Medicare reviews because of a lack of a timely response to the ADR. For example, in a review by the Supplemental Medical Review Contractor (SMRC) for SPECT scans 65% of denials were because providers did not respond to the ADR timely. Providers need to have systems in place to identify ADRs, route them to the appropriate hospital department, and respond with complete records in the appropriate time frame.
3. GATHER – In responding to an ADR request, providers must have the knowledge discussed above about the documentation needed to support the services. Knowing what is required will allow you to gather the relevant information in your response to Medicare. And you may have to look outside your own medical record to find what is needed to support your billing. The fact sheet referenced about states, “it is the billing provider’s responsibility to obtain supporting documentation as needed from a referring physician’s office (for example, physician order, notes to support medical necessity) or from an inpatient facility (for example, progress note).” Here are some examples that occur often:
4. A laboratory test is performed and billed based on a lab requisition form that is not signed (per Medicare rules, it doesn’t have to be), but Medicare does require a signed order from the referring physician to support the billing. This may be a signed note in the physician’s office record stating that this particular lab test be ordered.
5. Some services require that the patient first receive and fail conservative treatments before having this more extensive or invasive service. Medicare requires details of which conservative treatments were tried. Again, this information may be found in the physician’s office notes and the billing provider (such as the hospital) may have to obtain and send this documentation with their ADR response. It is advisable to require the physicians provide this information to the facility before performing the service. Then you are not scrambling on the back end to locate the documentation that is needed to support your services.
6. The need for some services is supported by previously performed diagnostic studies, such as x-rays or laboratory tests findings. The results of these tests may be in the physician’s office record, at another testing entity, or in a prior hospital record. You must gather this information to include in your ADR response.
7. SIGN – Medicare requires that services that are ordered or provided must be authenticated by the ordering practitioner. Sounds easy enough but evidently, based on Medicare review findings, remains a challenge for providers. Signatures can be legible handwritten signature or electronic authentication. Signatures should happen in a timely manner so your options in responding to an ADR are limited if orders and other documentation are not already signed. Medicare does not allow late signatures, but will accept a signature attestation for certain types of unsigned documentation (other than orders). An unsigned order is considered invalid during a Medicare review. Illegible signatures may be accepted if accompanied by an attestation or a signature log.  For complete information regarding Medicare signature requirements, see the Fact Sheet Complying with Medicare Signature Requirements and section 3.3.2.4 of the Medicare Program Integrity Manual. 

Those are my tips for responding to Medicare ADRs so hopefully your hospital can avoid the “not documented, not done” and the “not signed, not valid” snares of Medicare reviewers.

Back in June when the Office of Inspector General (OIG) changed the process and publication of their Work Plan, they used the word “dynamic” to describe their work planning process.  The Merriam-Webster dictionary defines dynamic as “marked by usually continuous and productive activity or change.”  So far, the OIG is remaining true to this definition by posting numerous new issues each month.  For July, the OIG posted 14 new issues all focused on the CMS agency.  The OIG is responsible for oversight for all agencies of Health and Human Services (HHS), but a review of active issues shows that most of their efforts are related to CMS.

I understand the OIG’s responsibility “to provide independent and objective oversight that promotes economy, efficiency, and effectiveness in the programs and operations of HHS.” But having worked in hospitals for years, I also understand the challenges of complying with all of the Medicare rules. If it were easy we might not need the OIG, but it is definitely not an easy task. 

Since MMP’s focus is hospital Medicare issues, I will only describe the new OIG Work Plan items related to hospitals and Medicare.  For a list of all the new issues, see the OIG’s Recently Added updates.

Nationwide Medicare Electronic Health Record Incentive Payments to Hospitals

Hospital can receive incentive payments for adopting electronic health record (EHR) technology. The OIG is concerned about potential incentive overpayments. Their concerns are based on the following:

• The Government Accountability Office (GAO) identified improper incentive payments as the primary risk to the Medicare EHR incentive program.
• An OIG report found CMS faces obstacles in oversight of the EHR program.
• OIG reviews showed that State agencies have and will continue to overpay hospitals millions of dollars due to inaccuracies in the hospitals’ calculations.

The OIG will be reviewing hospitals’ incentive payment calculations to ensure appropriate payment amounts and prevent future overpayments.  This is a hospital finance issue which is not my area of expertise, but I bet it is not that easy.  Calculations never are.

Review of Medicare Payments for Nonphysician Outpatient Services Provided Under the Inpatient Prospective Payment System

Medicare pays hospitals a prospective payment amount for inpatient services – we know this as the DRG payment.  The DRG payment is payment for all the hospital’s operating costs associated with the inpatient admission. This also includes diagnostic and related therapeutic outpatient services provided the day of admission or within the 3 days prior to admission under Medicare’s 3-day payment window rule.  Identifying those outpatient services that should be bundled with the inpatient claim and then billing correctly in compliance with the 3-day payment window is not an easy task either. Prior OIG reviews have found overpayments where hospitals billed inappropriately and Medicare contractors paid for outpatient services provided during or before the inpatient admission. The OIG will review to determine if outpatient payments during an inpatient admission and under the payment window rule were correct.

Medicare Payments for Unallowable Overlapping Home Health Claims and Part B Claims

Home Health (HH) agencies are also paid a Medicare prospective payment which covers all of their costs for providing services to the patient.  This includes services furnished by the home health agency and certain items or services provided under arrangement. The home health consolidated billing requirements mandate that certain items, supplies, and services are part of the home health payment and should not be billed separately to Medicare Part B from other entities. The OIG will be looking to see if Part B payments were allowable and followed the consolidated billing requirements.  From my experience, the major area of concern related to HH consolidated billing for hospitals is rehabilitative therapy services.  Medicare patients may present to a hospital’s therapy department for services even though they are receiving HH services. Hospitals should check Medicare eligibility systems and question the patient carefully to determine if they are currently under a home health plan of care.

Medicare Payments for Unallowable Overlapping Hospice Claims and Part B Claims

Once a Medicare beneficiary elects hospice care, all services related to the terminal illness are handled by the hospice.  Hospitals must seek payment for services provided to a hospice patient and related to the terminal illness from the hospice agency and not from Medicare. The OIG is reviewing to make sure any separate Part B payments were appropriate. Hospitals are often caught unaware when a hospice patient shows up in their emergency department. The hospital must determine if the patient has elected hospice and if so, is the medical condition for which they are seeking treatment related to the terminal illness.  If the answer to both is yes, the hospital must coordinate with the hospice agency to determine appropriate treatment and billing.  Not an easy task, especially in an emergency department setting. The same applies to non-emergency hospital services – reference laboratory testing is one example, but your clue here should be that the specimens are brought in by a hospice nurse.  In MMP’s experience, edits in the Medicare claims processing system catch most of these overlaps with hospice agencies and deny the hospital’s payment. It is then up to the hospital to spend extra time and effort to determine the circumstances and obtain payment from the hospice agency.  Not an easy task on the back end either.

One last issue somewhat related to hospitals:

Review of Medicare Payments for Telehealth Services

One of the Medicare requirements for telehealth payment is that the services be between a beneficiary located at a rural originating site and a practitioner located at a distant site.  An eligible originating site must be the practitioner’s office or a specified medical facility, such as a hospital.  The OIG will be looking for telehealth payments where there was not a corresponding claim from the originating site to ensure the payments were correct.  More information on billing telehealth services can be found in the Medicare Telehealth Fact Sheet.

Not much about health care and hospital services is easy, but the OIG work plan gives us some areas on which to focus our scrutiny when it comes to billing Medicare.

Dilemma:

Why can’t the Root Operation, ‘Destruction’ be used when cauterization is performed in the nose to stop bleeding instead of ‘Control’? For instance, a patient was admitted for surgery due to multiple failed attempts to stop epistaxis.  The surgeon saw no active bleeding; but did see some suspicious sites so he cauterized the right turbinate and the nasal septum. 

Also, using ‘Destruction’ grouped the case to an ENT DRG (see table) which appears to be an appropriate clinical representation of the admission.  However, using ‘Control’ grouped the case to Extensive OR Procedure Unrelated to Principal Diagnosis. 

FY 2017 ICD-10-PCS Coding Guideline:

• Control
  Stopping, or attempting to stop, postprocedural or other acute bleeding. If an attempt to stop postprocedural or other acute bleeding is initially unsuccessful, and to stop the bleeding requires performing any of the definitive root operations Bypass, Detachment, Excision, Extraction, Reposition, Replacement, or Resection, then that root operation is coded instead of Control.

Solution:

The Root Operation, ‘Control’ was broadened to include these types of cases, so regardless of the method, the coding reflects the main objective of these types of procedures, which is to control bleeding.

The above procedure grouping is a DRG shift that has been reported to CMS and should be corrected in the next October 1st update. 

Resource:  Rhonda Butler, Clinical Research Manager for 3M Health Information Systems

FY 2017 ICD-10-PCS Coding Guidelines

CMS is known for their novel-length explanations of their calculations and reasoning for rate setting.  This year is no different as they take over 20 pages of the Medicare Physician Fee Schedule (MPFS) Proposed Rule for 2018 to explain why they chose an adjustment of 25% versus last year’s 50% adjustment for the PFS payment rates for nonexcepted off-campus hospital provider based department payment rates.  Then they say based on comments, they may consider a middle ground such as 40% - maybe they should just spin a wheel.

In compliance with Section 603 of the Bipartisan Budget Act of 2015, CMS began paying nonexcepted hospital provider based departments under a different payment system than the Outpatient Prospective Payment System (OPPS) beginning January 1, 2017.  Nonexcepted PBDs are new off-campus hospital provider-based departments that began furnishing and billing for services on or after November 2, 2015.  The payment system CMS selected for payment of nonexcepted services was the Physician Fee Schedule (PFS).  For 2017, Medicare set PFS rates at 50% of the OPPS payment rates. This 50% adjustment is known as the PFS Relativity Adjuster. In the 2018 MPFS Proposed Rule, CMS proposes revising the PFS Relativity Adjuster for nonexpected hospital PBDs for CY 2018. 

Background

First, let’s look at a little background on the payment system.  CMS originally proposed to pay only the physicians at a non-facility rate for these services and provide no payment to the hospital. There were many concerns with this approach so CMS selected the PFS as the payment system for nonexcepted PBDs.  They set new PFS rates at 50% of OPPS rate, which allowed hospitals to continue to bill on an institutional UB claim form. CMS required nonexcepted services to be appended with a PN modifier so the appropriate payment rate could be applied.  This also allowed the claims to process through the Outpatient Code Editor (OCE) so OPPS packaging rules (such as comprehensive APCs, packaged and conditionally packaged services) could be applied to the claims. Services assigned to an OPPS status indicator of “A” continued to be paid under the “other” appropriate fee schedules. That included therapy services paid under the MPFS, laboratory services when separate payment criteria is met under the Clinical Lab Fee Schedule, separately payable drugs at ASP + 6%, preventive services, etc. For more information on the 2017 payment system see last year’s article.

In 2017 CMS attempted to strike an appropriate balance that avoided potentially underestimating the relative resources involved in furnishing services in nonexcepted off-campus PBDs.  CMS arrived at a 50% reduction of OPPS rates by comparing the OPPS rate to the technical component portion of PFS rate and to the ASC rate for 22 high volume services. Although there was considerable variation in the differences, per CMS “the overall total payment made for services is more relevant to the goal of site neutrality than the quantity of individual payments made.” It is important to note that the data analysis did not include the most frequently billed service furnished in nonexcepted off-campus hospital PBDs, outpatient visits.

2018 Proposed Payment

Precise data to identify and value nonexcepted services billed by hospitals is still not available for 2018 rate setting, so again CMS must estimate payment rates to reflect overall relativity between PFS and OPPS payments. 

The bad news is that in the 2018 proposal, CMS shifts their focus from making sure rates do not underestimate the relativity to ensuring rates do not overestimate the appropriate overall payments for these services.  Since the majority of services currently billed in off-campus PBDS are visit services, for 2018 CMS performed a comparison of only the clinic visit code, G0463 to the weighted average of outpatient visits (CPT codes 99201-99205 and CPT codes 99211-99215) billed by physicians and other professionals in an outpatient hospital place of service.  Based on this comparison, CMS arrived at a proposed PFS Relativity Adjuster of 25%.  This means nonexcepted services provided in a nonexcepted off-campus hospital PBD will be paid at 25% of the OPPS rate for that service. This is a significant payment decrease for 2018 from the 2017 payment rate.

CMS is requesting comment on whether they “should adopt a different PFS Relativity Adjuster, such as 40 percent, that represents a relative middle ground between the CY 2017 PFS Relativity Adjuster, selected to ensure adequate payment to hospitals and our proposed CY 2018 PFS Relativity Adjuster, selected to ensure that hospitals are not paid more than others would be paid through the PFS nonfacility rate.”

Other payment policies for nonexcepted off-campus PBDs that are not proposed to change from last year include:

• OPPS packaging rules will continue to apply
• Services with an OPPS status indicator of “A” will continue to be paid under the appropriate fee schedule

• Partial hospitalization program (PHP) will be paid at the Community Mental Health Centers (CMHCs) per diem rate for APC 5853, for providing three or more partial hospitalization services per day
• Hospitals will report radiation treatment delivery procedures with the HCPCS “G” codes appended with the PN modifier, which will be paid at the MPFS technical component rate
• Hospitals will bill clinic visits at nonexcepted off-campus PBDs with HCPCS code G0463 (which will be paid at 25% of the OPPS rate)
• Outlier payments, the rural sole community hospital (SCH) adjustment, the cancer hospital adjustments, transitional outpatient payments, the hospital outpatient quality reporting payment adjustment, and the inpatient hospital deductible cap to the cost-sharing liability for a single hospital outpatient service are not being adopted into the new payment system
• The supervision rules that apply for hospitals will continue to apply for off-campus PBDs that furnish nonexcepted items and services
• Beneficiary cost-sharing under MPFS of 20% will apply
• Geographic adjustments used under the OPPS continue to apply

Moving Forward

CY 2017 claims data for services reported using the “PN” modifier will be available for use in PFS rate setting for CY 2019.  CMS plans to use these data to determine the appropriate PFS Relativity Adjuster and additional adjustments if appropriate.  They want to equalize payment rates as much as possible but still allow straight-forward billing.  CMS’s ultimate goal is to attain “site neutral payments to promote a level playing field under Medicare between physician office settings and nonexcepted off-campus PBD settings, without regard to the kinds of services furnished by particular off-campus PBDs.”

TRANSMITTALS

The Supplemental Security Income (SSI)/Medicare Beneficiary Data for Fiscal Year 2015 for Inpatient Prospective Payment System (IPPS) Hospitals, Inpatient Rehabilitation Facilities (IRFs), and Long Term Care Hospitals (LTCH)

• MLN Matters Number: MM10026
• Related CR Release Date: June 30, 2017
• Related CR Transmittal Number: R1863OTN
• Related Change Request (CR) Number: CR10026
• Effective Date: July 31, 2017
• Implementation Date: July 31, 2017
• https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/MM10026.pdf
• Affects providers submitting claims to Medicare Administrative Contractors (MACs) for services provided to Medicare beneficiaries.

Summary: Informs MACs about updated data for determining the disproportionate share adjustment for Inpatient Prospective Payment System (IPPS) hospitals and the low income patient (LIP) adjustment for IRFs as well as payments as applicable for Long Term Care Hospitals (LTCH) discharges (for example, discharges paid the IPPS comparable amount under the short-stay outlier payment adjustment).

Implementing FISS Updates to Accommodate Section 603 Bipartisan Budget Act of 2015 - Phase 2

• MLN Matters®Number: MM9907
• Related Change Request (CR) #: CR 9907
• Related CR Release Date: February 2, 2017
• Effective Date: January 1, 2017
• Related CR Transmittal #: R1783OTN
• Implementation Date: July 3, 2017
• https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/MM9907.pdf
• Affects Hospital providers who submit claims to Medicare Administrative Contractors (MACs) for services provided to Medicare beneficiaries.

Summary: If a hospital claim is submitted with a service facility location that was not included on the CMS 855A enrollment form, the claim will be Returned to the Provider (RTP) until the CMS 855A enrollment form and claims processing system are updated.

Quarterly Update to the National Correct Coding Initiative (NCCI) Procedure to Procedure (PTP) Edits, Version 23.3, Effective October 1, 2017

• MLN Matters Number: MM10183
• Related CR Release Date: July 14, 2017
• Related CR Transmittal Number: R3807CP
• Related Change Request (CR) Number: CR10183
• Effective Date: October 1, 2017
• Implementation Date: October 2, 2017
• https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/MM10183.pdf
• Affects physicians, other providers, and suppliers submitting claims to Medicare Administrative Contractors (MACs) for services provided to Medicare beneficiaries.

Summary: Informs the MACs about the update to the National Correct Coding Initiative (NCCI) procedure to procedure edits (PTP). This notice applies to Chapter 23, Section 20.9 of the Medicare Claims Processing Manual

Changes to the Laboratory National Coverage Determination (NCD) Edit Software for October 2017

• MLN Matters Number: MM10156
• Related CR Release Date: June 16, 2017
• Related CR Transmittal Number: R3797CP
• Related Change Request (CR) Number: CR 10156
• Effective Date: October 1, 2017
• Implementation Date: October 2, 2017
• https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/MM10156.pdf
• Affects physicians, providers and suppliers submitting claims to Medicare Administrative Contractors (MACs) for services provided to Medicare beneficiaries.

Summary: Informs MACs about the changes that will be included in the October 2017 quarterly release of the edit module for clinical diagnostic laboratory services.

Clarifying the Instructions for Amending or Correcting Entries in Medical Records

• CR Release Date: July 21, 2017
• CR Transmittal Number: R732PI
• Change Request (CR) Number: CR 10120
• Effective Date: August 22, 2017
• Implementation Date: August 22, 2017
• https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2017Downloads/R732PI.pdf

Summary: Clarifies the requirements for a practitioner to authenticate an alteration or revision in the medical records. The contractor shall also accept initials in instances when the author of the alteration must sign and date a revision made.

Notice of New Interest Rate for Medicare Overpayments and Underpayments -4th Qtr Notification for FY 2017

• CR Release Date: July 13, 2017
• CR Transmittal Number: R291FM
• Change Request (CR) Number: CR 10227
• Effective Date: July 18, 2017
• Implementation Date: July 18, 2017
• https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2017Downloads/R291FM.pdf

Summary: Medicare Regulation 42 CFR Section 405.378 provides for the charging and payment of interest on overpayments and underpayments to Medicare providers. The Department of the Treasury has notified the Department of Health and Human Services that the private consumer rate has been changed to 10.125 percent.

REVISED TRANSMITTALS

Qualified Medicare Beneficiary Indicator in the Medicare Fee-For-Service Claims Processing System

• In the article, the CR release date, transmittal number, and the Web address of CR9911 are revised. Clarifications are also made to the second paragraph of the Background section.
• https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/MM9911.pdf

Screening for Hepatitis B Virus (HBV) Infection

• Reflects an updated Change Request (CR) 9859
• https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/MM9859.pdf

Percutaneous Image-guided Lumbar Decompression (PILD) for Lumbar Spinal Stenosis (LSS)

• Transmittals 196 and 3787, dated May 26, 2017, is being rescinded and replaced by Transmittals 199 and 3805 dated, July 11, 2017 to
• https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2017Downloads/R199NCD.pdf
• https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2017Downloads/R3805CP.pdf

Summary: Update references in the CPM and NCD manuals and to add clarifying language.  In the NCD manual, the reference to Pub 100-04, Chapter 32, and Section 68 needs to be changed to Section 69. In the CPM manual, the reference in Pub. 100-04, Chapter 32, Section 68 needs to be changed to Section 69 and clarifying language needs to be added to indicate that CMS will cover procedure code 0275T for PILD only when the procedure is performed within any other CED approved randomized and non-blinded clinical trial.  All other information remains the same.

OTHER MEDICARE ANNOUNCEMENTS

Proposed Policy, Payment, and Quality Provisions Changes to the Medicare Physician Fee Schedule for Calendar Year 2018

• July 13, 2017
• https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2017-Fact-Sheet-items/2017-07-13-2.html

Summary: The Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that includes proposals to update payment policies, payment rates, and quality provisions for services furnished under the Medicare Physician Fee Schedule (PFS) on or after January 1, 2018.

CMS Proposes Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System Changes for 2018, and Releases a Request for Information (CMS-1678-P)

• July 13, 2017
• https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2017-Fact-Sheet-items/2017-07-13.html

Summary: The Centers for Medicare & Medicaid Services (CMS) issued the Calendar Year (CY) 2018 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System proposed rule (CMS-1678-P) that includes updates to the 2018 rates and quality provisions, and proposes other policy changes. CMS is proposing a number of policies that would support care delivery; reduce burdens for providers, especially in rural areas; lower beneficiary out of pocket drug costs for several drugs; enhance the patient-doctor relationship; and promote flexibility in healthcare.

Revision of Civil Money Penalty (CMP) Policies and CMP Analytic Tool

• July 07, 2017
• Memorandum

Summary: This policy memo replaces S&C Memo 15-16-NH. When noncompliance exists, enforcement remedies, such as civil money penalties (CMPs), are intended to promote a swift return to substantial compliance for a sustained period of time, preventing future noncompliance. To increase national consistency in imposing CMPs, the Centers for Medicare & Medicaid Services (CMS) is revising the CMP analytic tool.

Medicare Quarterly Provider Compliance Newsletter [Volume 7, Issue 4]

• July 2017
• https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/Downloads/MedQtrlyComp-Newsletter-ICN907797.pdf

Summary: Educational newsletter.  This quarter’s focus is on Cert Findings regarding Skilled Nursing Facility (SNF) Certification and Re-certification and OIG Findings regarding Studies of Hospital Billings of use of Modifier 59 on Heart Biopsy Claims and Procedure Coding for Ventilation Support Claims 

Q:

What information will a Review Contractor accept when reviewing a record for medical necessity of the services provided?

A:

The answer can be found in Chapter 3 of the Medicare Program Integrity Manual. Specifically, Section 3.3.2.1 – Documents on Which to Base a Determination indicates that “The MACs, CERT, Recovery Auditors, and ZPICs shall review any information necessary to make a prepayment and/or postpayment claim determination, unless otherwise directed in this manual. This includes reviewing any documentation submitted with the claim and any other documentation subsequently requested from the provider or other entity when necessary. Reviewers also have the discretion to consider billing history or other information obtained from the Common Working File (in limited circumstances), outcome assessment and information set (OASIS), or the minimum data set (MDS), among others.

For Medicare to consider coverage and payment for any item or service, the information submitted by the supplier or provider must corroborate the documentation in the beneficiary’s medical documentation and confirm that Medicare coverage criteria have been met.”

This guidance applies to Medicare Administrative Contractors (MACs), the Comprehensive Error Rate Testing (CERT), Recovery Auditors, and Zone Program Integrity Contractors (ZPICs).

A Medicare patient presents to your hospital’s Emergency Department late one evening and immediately requires emergency surgery.  The procedure performed in the operating room is on Medicare’s inpatient-only list.  Due to the focus on the medical care and treatment of the patient, an order to admit the patient as an inpatient is not obtained until the next morning.  Can the inpatient-only procedure be reported on the inpatient claim according to the policy for the payment window for outpatient services treated as inpatient services?

This question was recently posed to Medical Management Plus by one of our clients.  I was sure I remembered that Medicare changed an older instruction and now allows the billing of an inpatient-only procedure on the inpatient claim under the 3-day payment window rule.  To confirm this, I read the relevant sections in Chapter 4 of the Medicare Claims Processing Manual, which are Section 10.2 about the payment window and Section 180.7 about inpatient-only services.  Neither section states that combining an inpatient-only procedure performed on an outpatient basis into the succeeding inpatient admission for payment is allowed.  But I am sure I remembered that - have I lost my mind?

I started back-tracking through old transmittals.  I noticed Section 180.7 was last updated January 1, 2016, but a review of that transmittal (Transmittal 3425, CR9486) shows the update was related to the comprehensive payment when a patient has an inpatient-only procedure performed and then expires or is transferred prior to an inpatient order being written. After further searching, I finally located Transmittal 3238, CR 9097.  This transmittal states:

“Effective April 1, 2015, inpatient only procedures that are provided to a patient in the outpatient setting on the date of the inpatient admission or during the 3 calendar days (or 1 calendar day for a non-subsection (d) hospital) preceding the date of the inpatient admission that would otherwise be deemed related to the admission, according to our policy for the payment window for outpatient services treated as inpatient services will be covered by CMS and are eligible to be bundled into the billing of the inpatient admission.” (emphasis added)

This is definitely what I was looking for, but the danger in relying on prior transmittals is they may no longer be effective.  That is why I always confirm any transmittal guidance against the actual manuals.  And remember, I did not find this verbiage in the manuals.  I noticed in the updated manual instructions accompanying this transmittal that there is no “red text” (updated instructions) for these two manual sections other than the ‘update’ dates.  As Alice in Wonderland would say, my investigation was getting “curiouser and curiouser.”  If nothing was added or changed for these manual sections, was something removed?  Exactly what was updated? My search continued.

I finally found (thanks to some old email correspondence) Transmittal 2234, CR 7443 from way back in 2011. It is the July 2011 OPPS Update transmittal and it includes the following revisions.  Added to both manual sections noted above is the statement – “inpatient only procedures that are provided to a patient in the outpatient setting on the date of the patient’s inpatient admission or during the 3 calendar days (or 1 calendar day for a non-subsection (d) hospital) preceding the date of the inpatient admission that would otherwise be deemed related to the admission are not paid for by CMS and must be submitted on a no-pay claim (Type of Bill (TOB) 110).”  Now the April 2015 update made sense!  Nothing was added or changed, but the above statement was removed from both manual sections.  And since it is still absent from the manual instructions, its removal stands.

So I wasn’t crazy after all – at least not about this issue.  It is acceptable to report an inpatient-only procedure performed on an outpatient basis on the ensuing inpatient admission (within the 3 day payment window) and Medicare will cover this related procedure.  In fact, I think the scenario I described above is the perfect example of when this bundling is appropriate.  I do not think CMS changed this policy simply to allow hospitals to obtain a late inpatient admission order when they failed to do so in a timely manner.  I think this rule change was intended to allow appropriate payment in the case of emergencies or when the outpatient surgical procedure intended must be changed to one that is on the inpatient-only list during the surgery.

I am glad CMS made this change, but I wish they had ‘included’ rather than ‘excluded’ instructions in the manual updates.  Then I would not have gone looking for something that was not there.