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Medicare transmittals from February include four transmittals based on updates to National Coverage Determinations (NCDs). As a reminder, the NCD process is described in the Medicare Program Integrity Manual, chapter 13.

National Coverage Determinations (NCDs) are developed by CMS and outline the conditions for which an item or service is considered to be covered (or not covered) by Medicare nationally. Initially a decision memorandum is posted on the CMS Web site that describes the clinical position which CMS intends to implement. CMS implements the coverage decision through transmittals generally within 180 days of the end of the calendar quarter in which the memo was posted. Implementation often includes both an update to the NCD manual and the Claims Processing Manual to provide claims processing instructions related to the new coverage requirements.

Such is the case for the February updates with a new NCD for human Papillomavirus (HPV) and a revision to the NCD for Human Immunodeficiency Virus (HIV).

February 2016 Transmittals

Screening for Cervical Cancer with Human Papillomavirus (HPV) Testing – National Coverage Determination (NCD)

• Numbers:Transmittal R189NCD, Transmittal R3460CP, Change Request 9434,MLN Matters MM9434
• Dates:Issued: February 5, 2016; Effective: July 9, 2015; MLN: February 18,2016;   Implementation: January 3, 2017
• Affects: Physicians and other providers who submit claims to Medicare Administrative Contractors
• Updates: National Coverage Determinations Manual, Chapter 1, Section 210.2.1; Medicare Claims Processing Manual, Chapter 18, Sections 30.2.1, 30.5, 30.6, 30.7, 30.8, and 30.9

Summary of Changes: The purpose of this Change Request (CR) is that CMS has determined that for dates of service on or after effective July 9, 2015, evidence is sufficient to add HPV testing under specified conditions.

Screening for the Human Immunodeficiency Virus (HIV) Infection

• Numbers: Transmittal R190NCD; Transmittal R3461CP, Change Request 9403, MLN Matters MM9403
• Dates: Issued: February 5, 2016; Effective: April 13, 2015; MLN: February 17, 2016; Implementation: January 3, 2017
• Affects: Physicians, other providers, and suppliers who submit claims to Medicare Administrative Contractors
• Updates: National Coverage Determinations Manual, Chapter 1, Section 210.7; Medicare Claims Processing Manual, Chapter 18, Sections 130.1, 130.2, 130.3, 130.4, 130.5 and 130.6

Summary of Changes: The purpose of this CR is to inform MACs that CMS has determined that the evidence is adequate to conclude that screening of HIV infection for all individuals between the ages of 15-65 years is reasonable and necessary for early detection of HIV and is appropriate for individuals entitled to benefits under Part A or enrolled in Part B.

“Quality is never an accident; it is always the result of high intention, sincere effort, intelligent direction and skillful execution; it represents the wise choice of many alternatives.”- William A. Foster

The Office of Inspector General (OIG) began releasing Hospital Medicare Compliance Review (Compliance Reviews) Reports in early 2011. In Fiscal Year (FY) 2012 Compliance Reviews became part of the OIG’s Work Plan. Although the name of the project may have changed since 2012, Compliance Reviews remain a part of the Work Plan in FY 2016.

FY 2012 OIG Work Plan Project

• Medicare Inpatient and Outpatient Payments to Acute Care Hospitals (New)

We will review Medicare payments to hospitals to determine compliance with selected billing requirements. We will use the results of these reviews to recommend recovery of overpayments and identify providers that routinely submit improper claims. Prior OIG audits, investigations, and inspections have identified areas that are at risk for noncompliance with Medicare billing requirements. Based on computer matching and data mining techniques, we will select hospitals for focused reviews of claims that may be at risk for overpayments. Using the same data analysis techniques, we will identify hospitals that broadly rank as least risky across compliance areas and those that broadly rank as most risky. We will then review the hospitals’ policies and procedures to compare the compliance practices of these two groups of hospitals. We will also survey or interview hospitals’ leadership and compliance officers to provide contextual information related to hospitals’ compliance programs. (OAS; W-00-11-35538; various reviews; expected issue date: FY 2012; work in progress; and OEI; 00-00-00000; expected issue date: FY 2012; new start)

FY 2016 OIG Work Plan Project

• Selected inpatient and outpatient billing requirements

We will review Medicare payments to acute care hospitals to determine hospitals’ compliance with selected billing requirements and recommend recovery of overpayments. Prior OIG audits, investigations, and inspections have identified areas at risk for noncompliance with Medicare billing requirements. Our review will focus on those hospitals with claims that may be at risk for overpayments. (OAS; W-00-12-35538; W-00-13-35538; W-00-14-35538; W-00-15-35538; various reviews; expected issue date: FY 2016)

Compliance Reviews by the Numbers

As of February 2016, the OIG has released over 140 Compliance Reviews. According to these reviews, collectively this group of hospitals was overpaid $76,447,380.00. Adding insult to injury, in 2013 the OIG began extrapolating their findings. To date, 21 hospitals have been subject to extrapolation, including the most recent hospital Compliance Review released on February 3, 2016 for the University of Minnesota Medical Center for 2012 and 2013.

Extrapolating overpayments has exponentially increased the amount hospitals are to refund to the Contractor. Collectively, the $7,780,049.00 overpaid by 21 hospitals was extrapolated to $66,495,541.00. When you add this subset of hospitals to the overall amounts, the $76,447,380.00 that all hospitals were overpaid increased to $135,262,862.00 to be refunded to the Contractor. Now let’s take a closer look at the most recent Report released.

Medicare Compliance Review of University of Minnesota Medical Center for 2012 and 2013

The objective of this review was to “determine whether University of Minnesota Medical Center (the Hospital) complied with Medicare requirements for billing inpatient and outpatient services on selected types of claims.”

Audit Scope

This Compliance Review covered $24,360,864 in Medicare payments to the hospital for 3,351 claims potentially at risk for billing errors. The OIG selected a stratified random sample of 255 claims with payments totally $2,370,592. Claims consisted of 75 inpatient and 180 outpatient claims with dates of service in Calendar Year 2012 and 2013.

Risk Areas

Specific “risk areas” identified as being at risk for noncompliance with Medicare billing requirements included:

• Inpatient Rehabilitation Claims,
• Inpatient claims billed with high-severity-level DRG codes,
• Inpatient and Outpatient manufacturer credits for replaced medical devices,
• Outpatient dental claims,
• Outpatient claims billed with modifier -59,
• Outpatient claims billed for Doxorubicin Hydrochloride; and
• Outpatient claims billed for Herceptin.

Note that manufacturer credits for replaced medical devices and outpatient dental claims are also stand-alone projects within the FY 2016 Work Plan. This should be a red flag for hospitals to make sure you are in compliance with these two “risk areas.” A valuable resource is readily available in the specific findings in the report where the OIG provides references such as the Code of Federal Regulations (CFR) and the CMS Provider Reimbursement Manual (PRM) as guidance for compliance with billing requirements.

Audit Findings

The Hospital complied with Medicare billing requirements for 125 of the 255 inpatient and outpatient claims reviewed. The remaining 130 claims resulted in overpayments of $565,286, specifically:

• 29 Inpatient claims had billing errors, resulting in overpayments of $261,886, and
• 101 Outpatient claims had billing errors, resulting in overpayments of $303,400.

The OIG indicated that “these errors occurred primarily because the Hospital did not have adequate controls to prevent the incorrect billing of Medicare claims within the selected risk areas that contained errors.” On the basis of this sample, the OIG extrapolated that the hospital received overpayments of at least $3,266,841 for the audit period and recommended that the Hospital refund this amount to the Medicare contractor.

Looking at the dollars to be refunded, it is easy to see why Compliance Reviews continue to be a part of the OIG’s annual Work Plan. While Compliance Reviews are a part of the OIG Work Plan, hospitals should consider closely monitoring “risk areas” in these reports as an additional tool in your annual and ongoing compliance assessment, plan and actions.

The Centers for Medicare and Medicaid Services (CMS) posted an update to the Therapy Cap webpage on February 9, 2016. CMS indicates that the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), signed into law on April 16, 2015 impacted Therapy Caps by extending the “exception process” and making changes to the manual medical review process.

Therapy Cap Exception Process Extension

Therapy caps are a financial limitation on the amount Medicare allows for outpatient therapy services for a single Medicare patient in a given calendar year. The therapy cap amount for each patient starts over each January 1st. The therapy caps for Calendar Year 2016 are $1,960 for Physical Therapy (PT) and Speech-Language Pathology (SLP) combined and $1,960 for Occupational Therapy (OT).

An exception process to the therapy caps for reasonable and necessary services beyond the cap was initially required by section 5107 of the Deficit Reduction Act of 2005. Congress has continuously extended the exception process through legislation. The most recent extension can be found in section 202 of MACRA that extended the therapy caps exception through December 31, 2017.

Manual Medical Review of Therapy Claims

Along with the ability for a provider to receive money beyond the therapy caps came the manual medical review of the claims to ensure that Medicare dollars were being spent appropriately. Initially, the Medicare Administrative Contractors (MACs) conducted pre-payment reviews with dates of service January 1, 2013 to March 31, 2013. The Recovery Auditors assumed responsibility for reviews on April 1, 2013.

MACRA included key changes to this process. First, it shifted the review requirement from ALL records to a “targeted review process.” Second, it prohibits the continued use of Recovery Auditors to conduct the review.

“CMS has tasked Strategic Health Solutions as the Supplemental Medical Review Contractor (SMRC) with performing this medical review on a post-payment basis.

CMS indicates that claims selection will be based on:

• Providers with a high percentage of patients receiving therapy beyond the threshold as compared to their peers during the first year of MACRA.
• Therapy provided in skilled nursing facilities (SNFs), therapists in private practice, and outpatient physical therapy or speech-language pathology providers (OPTs) or other rehabilitation providers.”

This medical review process will be paying close attention to evaluating the number of units/hours of therapy provided in a day.”

Information about the number of units/hours of therapy provided in a day can be found in a related article Rehabilitation Therapy Documentation, Part 2.

Resources for More Information

Therapy Caps has been a “hot topic” for several years now. Additional articles on therapy caps/manual review can be accessed on our website – just use the subject search function with subject “therapy”.

In addition to the CMS Therapy Cap web page there is also a Therapy Services webpage, which includes links to the Medicare Manual sections that address rehabilitation therapy services as well as a link to the Beneficiary Fact Sheet Medicare Limits on Therapy Services.

Last, we strongly encourage you to visit the Strategic Health Solutions, LLC website at http://strategichs.com/smrc/ to view their prior reviews of Medicare Part B Outpatient Rehabilitation Therapy Services found on their Completed Projects webpage. Pay close attention to the “Denial Reasons” and “How to Prevent Denial” sections of the Project detail.

If you are involved at all with issues relating to the Hospital Outpatient Prospective Payment Rule (OPPS), you likely already know that payment for observation services changed from a composite payment to a comprehensive payment for 2016. But what does this really mean for hospitals?   Whether you are paid more or less than last year for a particular claim depends on the number and types of services being performed. As Medicare intends when creating payment bundles, there are “winners” and “losers” when looking at individual claims – that is, some claims will receive higher reimbursement and some lesser than the previous year.

That said, I still thought it would be interesting to look at some individual observation claims and the differences in Medicare payment amounts from 2015 to 2016. First, a review of the rules for observation services:

The purpose of observation services has not changed in many years. As stated in the Medicare Benefits Policy Manual, Chapter 2, section 60.1 – “Observation care is a well-defined set of specific, clinically appropriate services, which include ongoing short term treatment, assessment, and reassessment before a decision can be made regarding whether patients will require further treatment as hospital inpatients or if they are able to be discharged from the hospital.” In simpler language – the patient is too sick to be sent home and not sick enough to expect a two-midnight hospital stay (inpatient admission), so they are kept in a hospital bed for treatment and tests to determine if they need to be admitted or may safely be sent home. Under the two-midnight rule, patients receiving necessary hospital care that will pass a second midnight should be admitted as inpatients. A physician’s order is required for a patient to receive observation services.

Observation services are billed per hour with HCPCS code G0378. In order to receive separate payment for observation services, the following criteria must be met:

• The patient must receive 8 or more hours of observation services,
• Observation hours must be billed on the day of or the day after certain visit codes:
• An ED visit, type A or type B (CPT codes 99281-99285 or HCPCS codes G0380-G0384) – this requirement was changed for 2016 to include all ED visit levels; previously only high level ED visits qualified for observation payment.
• Critical care services (CPT 99291)
• A clinic visit (HCPCS code G0463)
• A direct referral to observation (HCPCS code G0379) on the same day as observation hours
• There must be no other services on the claim that have an OPPS status indicator (SI) of “J1” (services paid under comprehensive APCs).
• There must be no other services on the claim that have an OPPS status indicator (SI) of “T” (surgical services) – another change from previous years where observation was not paid if there was a T status procedure on the day of or the day before observation hours. For 2016 the observation payment will not be made if there is a T status procedure on any day on the claim.

As a Comprehensive APC, observation now has a status indicator of “J2” and the Medicare unadjusted comprehensive observation payment amount is $2,174.14. Since it is a comprehensive APC, the payment for all adjunctive services is bundled into the observation payment with only a few exceptions. This means for a claim that contains observation services that meets the above criteria, your hospital will receive one payment of approximately $2,174 for the entire claim. Other services on the claim will not be paid separately. As stated above, this is the Medicare national unadjusted payment rate; most hospitals will receive less based on their wage index and a portion of the adjusted payment (around $430) is the patient’s co-pay. Let’s look at some examples.

These are just some general examples about observation payments. These examples do not include discussion of services that were packaged in 2015, such as labs and routine, lower-cost ancillary services since this has not changed in 2016. All references to payment are based on the Medicare unadjusted fee schedules for 2015 and 2016.

Example 1: A level 4 ED visit with an ensuing 17 hours of observation services. Patient received a CTA of the lower extremity and two IV push injections. Total Medicare unadjusted payment for 2015 equals " $1657. 2016 Comprehensive Observation payment " $2,174. Increase for 2016 of $517.

Example 2: A level 5 ED visit with an ensuing 35 hours of observation services. Patient received two CTs (with contrast), a chest x-ray, a vaccine injection, an EEG, an IV infusion and an IV push. Total Medicare unadjusted payment for 2015 equals " $2,044. 2016 Comprehensive Observation payment " $2,174. Increase for 2016 of $130.

Example 3: A level 3 ED visit with an ensuing 10 hours of observation services. Patient received a CTA of the heart, a chest x-ray, and an hour of hydration. Remember that in 2015 a Level 3 ED visit did not qualify for an observation composite payment. Total Medicare unadjusted payment for 2015 equals " $582. 2016 Comprehensive Observation payment " $2,174. Increase for 2016 of $1592.

Example 4: A level 5 ED visit with an ensuing 18 hours of observation services. Patient received a CTA of the chest, a chest x-ray, an IV push, an hour of hydration, a myocardial SPECT study, and an Echo. Total Medicare unadjusted payment for 2015 equals " $3,280. 2016 Comprehensive Observation payment " $2,174. Decrease for 2016 of $1106.

Example 5: A level 5 ED visit with an ensuing 26 hours of observation services. Patient received several MRAs and MRIs without contrast, three hours of hydration, an Echo, a Duplex scan of extracranial arteries, and a CNS visual evoked potential. Total Medicare unadjusted payment for 2015 equals " $2,787. 2016 Comprehensive Observation payment " $2,174. Decrease for 2016 of $613.

So what is a hospital to make of this and are there actions that need to be taken? First, hospitals simply need to be aware of this change in payment structure. The only actions hospitals can take concerning comprehensive observation payments, increased packaging in general, the overall shift to prospective payment systems, and the transition to value-based payments instead of fee-for-service is to operate more effectively and efficiently. Focus on the best outcomes for the least amount of cost. Control utilization of services – do the necessary things that affect patient outcomes, but don’t overdo testing or treatments that are not necessary. Make sure you are treating and testing the patient in the appropriate setting – don’t perform tests that could and should be provided as outpatient services on an observation patient or an inpatient. The healthcare world is changing rapidly and only those providers who rise to the challenge of better outcomes in a cost-effective manner will survive. There will be winners and losers…

Dilemma:

How to interpret the Excludes1 notes in ICD-10-CM when the conditions are unrelated to one another.

 

Solution:

 

On October 26, 2015 the Centers for Disease Control and Prevention (CDC) posted the following Excludes1 notes guidance on their ICD-10-CM webpage. This guidance was originally posted on October 19, 2015. The Updated information appears in bold).

There are circumstances that have been identified where some conditions included in Excludes1 notes should be allowed to both be coded, and thus might be more appropriate for an Excludes2 note. However, due to the partial code freeze, no changes to Excludes notes or revisions to the official coding guidelines can be made until October 1, 2016. This new guidance concerning Excludes1notes is intended to allow conditions to be reported together when appropriate even though they may currently be subject to an Excludes1 note. This coding advice has been approved by the four Cooperating Parties – the American Health Information Management Association (AHIMA), the American Hospital Association (AHA), the Centers for Medicare and Medicaid Services (CMS), and the National Center for Health Statistics (NSHC).

This advice was published in the 4th Quarter 2015 issue of Coding Clinic for ICD-10-CM and ICD-10-PCS.

Question:
We have received several questions regarding the interpretation of Excludes1notes in ICD-10-CM when the conditions are unrelated to one another. How should this be handled?

Answer:
If the two conditions are not related to one another, it is permissible to report both codes despite the presence of an Excludes1 note. For example, the Excludes1 note at code range R40-R46, states that symptoms and signs constituting part of a pattern of mental disorder (F01-F99) cannot be assigned with the R40-R46 codes. However, if dizziness (R42) is not a component of the mental health condition (e.g., dizziness is unrelated to bipolar disorder), then separate codes may be assigned for both dizziness and the mental health condition.

In another example, code range I60-I69 (Cerebrovascular Diseases) has an Excludes1 note for traumatic intracranial hemorrhage (S06.-). Codes in I60-I69 should not be used for a diagnosis of traumatic intracranial hemorrhage. However, if the patient has both a current traumatic intracranial hemorrhage and sequela from a previous stroke, then it would be appropriate to assign both a code from S06- and I69.

Note: This information was discussed by MMP’s AHIMA Approved ICD-10-CM/PCS Trainer Coding Professionals in our 2016 IPPS Coding Updates Webinar last fall. If you missed the opportunity to join us live, this session will be available on our Classes page as an On-Demand Webinar soon.

 

Did you ever play the game as a child where you were blindfolded, turned around until you were disoriented, and then relied on a sibling or a friend to guide you? This required some trust even though it was just a game. And the more guidance the better – handholding was better than simply being told where to go. We are not quite as trusting as adults, but often our only choice is to rely on the guidance of others. Hospitals have to rely on Medicare guidance for direction in providing and billing for Medicare services. And like that childhood game, more guidance and clearer guidance is always better. So, thanks to CMS for the additional guidance on the use of the PO modifier.

Last week’s edition of the Wednesday@One included an article about recent developments related to Provider-Based Departments (PBDs), one of which was the requirement to report a PO modifier on outpatient services provided in an off-campus provider based department. In the January 26, 2016, Hospital Open Door Forum (ODF), CMS discussed this requirement and referred providers to a recent Modifier PO FAQ document that provides additional guidance on the use of this modifier.

Before getting into the details of the Frequently Asked Questions, here is an excerpt from last week’s article.

This requirement was finalized in the 2015 OPPS Final Rule which allowed voluntary reporting of the PO modifier for 2015 but mandates use of the modifier beginning in 2016. The use of the PO modifier will allow CMS to track the volumes and types of services being provided in off-campus provider based departments. Things to know about reporting the PO modifier include:

• Off-campus means provider based departments located 250 yards or greater from the main provider building.
• Per discussion at a CMS Hospital Open Door Forum, the modifier is only required to be reported for items and services paid under OPPS. Services paid under another fee schedule, such as rehabilitative therapy services, do not require the PO modifier.
• The modifier should not be reported for remote locations of a hospital, satellite facilities of a hospital, or for services furnished in an emergency department.
• Remote location is another main provider furnishing inpatient services under the name, ownership, and administrative and financial control of the main hospital.
• A satellite facility is a part of a hospital that provides inpatient services in a building also used by another hospital, or in a building(s) located on the same campus as buildings used by another hospital.

A lot of the ODF discussion and the FAQs address when the PO modifier is required and when it is not. The CMS representative speaking on the ODF suggested hospitals ask themselves three questions in deciding whether to use the PO modifier:

1. Are the services provided at a provider-based department?
2. Is the provider-based department located off-campus?
3. Are the services “paid” under the Outpatient Prospective Payment System (OPPS)?

If the answer to all three of these questions is yes, then you must use the PO modifier.

The FAQs address a number of scenarios where the PO modifier is not required. For example, the PO modifier is not required for:

• Critical Access Hospitals (CAHs) because CAHs are not paid through the OPPS
• Off-campus rehabilitative therapy services because therapy services have an OPPS status indicator of “A” which means they are paid under another fee schedule (the Physician’s Fee Schedule) and not under OPPS
• Facilities that do not meet the definition of provider-based
• Off-campus dialysis facilities because these are billed and paid under the ESRD PPS and not under OPPS
• Services provided at a remote hospital location of the main hospital or on the campus of a remote location
• Services provided in either Type A or Type B Emergency Departments
• Laboratory services that are paid under the Clinical Laboratory Fee Schedule – This one is tricky because labs provided on the same day of service with other outpatient services are packaged and therefore are “paid” under OPPS – these would require the PO modifier. If only laboratory services are performed - for example, if a hospital has an off-campus PBD laboratory where patients go for only laboratory services (and no other related outpatient services are provided the same day), then these services are paid under the CLFS and would not require a PO modifier.
• Services provided through Medicare Advantage plans

The FAQs also clarify that it is acceptable to have a claim where some HCPCS codes have the PO modifier and some don’t. Separately payable outpatient drugs reported with HCPCS codes (status indicator “K”) do require the PO modifier when provided in an off-campus PBD.

We have no choice but to trust and rely on the guidance from CMS, but it is always good to have more guidance than lesser guidance in trying to interpret and implement Medicare rules.

Did you know that Section 6401 of the Affordable Care Act (ACA) provides that a “provider of medical or other items or services or supplier within a particular industry sector or category” shall establish a compliance program as a condition of enrollment in Medicare, Medicaid, or the Children’s Health Insurance Program (CHIP)? Although an enforcement date has yet to be issued, the Secretary of Health and Human Services (HHS), in consultation with the HHS Office of Inspector General (OIG) have established seven core or key elements of an effective compliance program as required by the ACA.

The 5th core element is Auditing and Monitoring. CMS indicated in an Affordable Care Act Provider Compliance Programs: Getting Started Webinar that “a system for auditing and monitoring must be implemented to measure the effectiveness of the compliance program, ensure compliance with CMS requirements, and identify compliance risks.”

Ensuring compliance with CMS requirements is a full time job in and of itself and we recognize that our clients are busier than ever. As Making HealthCare Make Sense is what we are about, we have added a standing article the last week of each month spotlighting key Medicare Transmittals released by CMS during the month.

January 2016 Transmittals

January 2016 Integrated Outpatient Code Editor (I/OCE) Specifications Version 17.0

• Numbers: Transmittal R3437CP, Change Request 9459, MLN Matters MM9459
• Dates: Issued: 01/06/2016, MLN: 1/11/2016, Implementation: 1/4/2016
• Affects: Providers who submit claims to Medicare Administrative Contractors, including Home Health and Hospice MACs (HH+H MACs) for services provided to Medicare beneficiaries
• Updates: Medicare Claims Processing Manual, Chapter 4, Section 40.1

Summary of Changes: This notification provides the Integrated OCE instructions and specifications for the Integrated OCE that will be utilized under the OPPS and Non-OPPS for hospital outpatient departments, community mental health centers, all non-OPPS providers, and for limited services when provided in a home health agency not under the Home Health Prospective Payment System or to a hospice patient for the treatment of a non-terminal illness.

Notice of New Interest Rate for Medicare Overpayments and Underpayments -2nd Qtr Notification for FY 2016

• Numbers: Transmittal R258FM, Change Request 9532, MLN not released at time of this article
• Dates: Issued: 01/12/2016, Implementation 01/19/2016
• Affects: Medicare Providers
• Updates: Medicare Financial Management Manual, Chapter 3, Section 10

Summary of Changes: Medicare Regulation 42 CFR Section 405.378 provides for the charging and payment of interest on overpayments and underpayments to Medicare providers. The Secretary of Treasury certifies an interest rate quarterly. Treasury utilized the most comprehensive data available on consumer interest rates to determine the certified rate. Interest is assessed on delinquent debts in order to protect the Medicare Trust Funds.

Award of Durable Medical Equipment (DME) Medicare Administrative Contractor (MAC) Contract for Jurisdiction D

• Numbers: Transmittal R1592OTN, Change Request 9453, MLN not released at time of this article
• Dates: Issued: 01/15/2016, Implementation: 03/01/2016
• Affects: Providers submitting DME claims for Medicare beneficiaries inJurisdiction D (U.S. Territories of Alaska, Arizona, California, Hawaii, Idaho, Iowa, Kansas, Missouri, Montana, Nebraska, Nevada, North Dakota, Oregon, South Dakota, Utah, Washington, Wyoming, American Samoa, Guam, and Norther Mariana Islands.
• Summary of Changes: The purpose of this change request is to announce the award of the Durable Medical Equipment (DME) Medicare Administrative Contractor (MAC) Jurisdiction D contract to Noridian Healthcare Solutions, LLC for the administration of Medicare DME Fee-for-Service (FFS) claims.

There has been a lot of discussion and contention lately about hospital off-campus provider based departments (PBDs). And as with a lot of things, the issue boils down to money. Services provided in off-campus PBDs are paid by Medicare at a higher reimbursement rate than similar services provided in freestanding clinics or physicians’ offices. CMS attributes the higher facility payment as compensation to hospitals for higher overhead costs required to operate the provider-based clinic, which is more highly regulated than the freestanding physician clinic locations. This is because hospitals, including off-campus PBDs, are required to meet the conditions of participation, to maintain standby capacity for emergency situations, and to be available to address a wide variety of complex medical needs in a community. That argument seems to no longer be holding up under the increased scrutiny of the OIG, the Medicare Payment Advisory Commission, and others concerned with high medical costs. This is evidenced by several new developments related to off-campus PBDs.

First, effective January 1, 2016, hospitals are required to report a PO modifier on outpatient services provided in an off-campus provider based department. This requirement was finalized in the 2015 OPPS Final Rule which allowed voluntary reporting of the PO modifier for 2015 but mandates use of the modifier beginning in 2016. The use of the PO modifier will allow CMS to track the volumes and types of services being provided in off-campus provider based departments. Things to know about reporting the PO modifier include:

• Off-campus means provider based departments located 250 yards or greater from the main provider building.
• Per discussion at a CMS Hospital Open Door Forum, the modifier is only required to be reported for items and services paid under OPPS. Services paid under another fee schedule, such as rehabilitative therapy services, do not require the PO modifier.
• The modifier should not be reported for remote locations of a hospital, satellite facilities of a hospital, or for services furnished in an emergency department.
• Remote location is another main provider furnishing inpatient services under the name, ownership, and administrative and financial control of the main hospital.
• A satellite facility is a part of a hospital that provides inpatient services in a building also used by another hospital, or in a building(s) located on the same campus as buildings used by another hospital.

Second, the Office of Inspector General continues to examine issues concerning provider-based status as part of their 2016 Work Plan.

• The first issue involves Medicare oversight of provider-based status in which the OIG will determine:
• The number of provider-based facilities that hospitals own,
• The extent to which CMS has methods to oversee provider-based billing,
• The extent to which provider-based facilities meet requirements described in 42 CFR Sec. 413.65 and CMS Transmittal A-03-030, and
• Whether there were any challenges associated with the provider-based attestation review process.

Per the OIG discussion, “Provider-based status allows facilities owned and operated by hospitals to bill as hospital outpatient departments. Provider-based status can result in higher Medicare payments for services furnished at provider-based facilities and may increase beneficiaries’ coinsurance liabilities. The Medicare Payment Advisory Commission (MedPAC) has expressed concerns about the financial incentives presented by provider-based status and stated that Medicare should seek to pay similar amounts for similar services.”

• The second issue is an OIG comparison of Medicare payments for physician office visits in provider-based clinics and freestanding clinics to determine the difference in payments made to the clinics for similar procedures and assess the potential impact on Medicare of hospitals' claiming provider-based status for such facilities.

Third and the most significant news related to PBDs is the Bipartisan Budget Act of 2015 which changes the method of reimbursement for off-campus PBDs beginning in 2017. This Act which was signed into law on November 2, 2015, excludes payment of services under OPPS for services furnished on and after January 1, 2017 in an off-campus provider based department, with a couple of exceptions. The exceptions are:

• Grandfathered off-campus PBDs – that is those off-campus PBDs that were billing under the OPPS prior to the date of enactment of the law - November 2, 2015, and
• Items and services provided in a dedicated Emergency department.

Therefore, beginning in 2017, non-emergency services performed at off-campus PBDs that are not “grandfathered” will be paid under the applicable payment system, such as the Ambulatory Surgical Center Payment System or the Physician Fee Schedule instead of under OPPS.

Hospitals need to be aware of all the new requirements, oversight, concerns, and changes for provider-based departments. They may need to reevaluate acquiring or opening new off-campus provider based departments in light of the change in expected reimbursement. Hopefully this will not affect the availability of outpatient services in areas where they are needed. That would be a shame because sometimes healthcare is about more than the money.

The words “term paper” can strike fear in the hearts of students everywhere. Research, note cards, bibliography, and the dreaded draft copy a student presents to his or her teacher for corrections prior to the final composition. That draft copy is often returned marked ubiquitously with red ink. This gives the writer one last chance at correction before a grade is assigned and the wise student utilizes this instruction to improve their paper and the resulting score. CMS likes to give providers a chance to improve their performance also. One of the tools CMS uses to guide providers in preventing billing errors is the Medicare Quarterly Provider Compliance Newsletter.

CMS publishes the Quarterly Compliance Newsletter “to provide education on how to avoid common billing errors and other erroneous activities when dealing with the Medicare Fee-For-Service (FFS) Program. It includes guidance to help health care professionals address and avoid the top issues of the particular Quarter.” The newsletter addresses findings from Medicare review contractors and affiliates, such as the Medicare Administrative Contractors (MACs), CERT, Recovery Auditors, and the OIG. The latest edition of this newsletter, the January 2016 Edition, includes several issues that may be of concern to hospitals.

Admission Source for Inpatient Psychiatric Hospitals

This issue is a concern for acute-care hospitals and critical access hospitals (CAHs) that have an inpatient psychiatric distinct part unit. The inpatient psychiatric hospital (IPF) payment generally includes an adjustment for maintaining a qualifying emergency department (ED). Medicare does not make this adjustment however when patients are transferred from the acute-care section of a hospital to an IPF distinct part unit within the same hospital. This is because the costs associated with ED services are already reflected in the Medicare payment to the hospital for the immediately preceding acute care stay.

To prevent this inappropriate additional payment, the transfer to an IPF-distinct part unit from the acute-care section of the hospital should be coded with an admission source of “D” - Transfer from One Distinct Unit of the Hospital to another Distinct Unit of the Same Hospital Resulting in a Separate Claim to the Payer. Failure to use the correct Source of Admission code in these circumstances will result in an overpayment as has been found by Recovery Auditor’s automated reviews.

For more information, see the Medicare Claims Processing Manual, Chapter 3, Section 190.6.4.

Duplicate Claims

Another automated review by Recovery Auditors has identified problems with payments for duplicate services submitted on separate claims. Claims for services should only be submitted one time. Providers should use the claim status inquiry process to determine the status of their claims instead of resubmitting the claim.

If the services are not duplicate services, the provider should use an appropriate modifier to indicate such. The use of modifiers is discussed in the Medicare Claims Processing Manual, Chapter 4, Section 20.6.

Medical Necessity of Rituximab

A number of MACs have a Local Coverage Determination (LCD) or Article for Rituximab that lists appropriate ICD-10 diagnosis codes to support the medical necessity of the drug. Claims for Rituximab must include one of the required ICD-10 diagnosis codes to support payment. Most claims submitted without an acceptable diagnosis code will be denied as “not medically necessary” by claims processing edits. However, an automated review by the Recovery Auditors has identified paid claims where providers are billing for a service of J9310 - Rituximab with an ICD-10 code that is not included in the list of covered ICD-10 codes in applicable Local Coverage Determination documents. Here is a listing of the LCDs and Articles that contain diagnosis code requirements for Rituximab.

‍Outpatient Cardiovascular Nuclear Medicine Procedure Codes

Medical necessity issues were also identified by Recovery Auditor automated reviews related to cardiovascular nuclear medicine tests. This was the result of the same issue as for Rituximab – an ICD-10 diagnosis code approved for coverage as indicated by Local Coverage Determinations was not included on the claim. This includes a large range of services:

• Myocardial perfusion imaging – CPT codes 78451-78454
• Myocardial imaging – CPT codes 78466 and 78468-78469
• Cardiac blood pool imaging – CPT codes 78472, 78473, 78481, 78483, 78494, and 78496
• Cardiovascular stress test – CPT codes 93015-93018

Check your MAC’s LCDs and Articles to see if there are coverage requirements for these tests for your jurisdiction.

Providers need to read and take actions if needed based on the guidance in the Medicare Quarterly Compliance Newsletter. If you don’t learn from this guidance, your claims may end up covered in red marks.

After struggling with application of Medicare’s incomplete listing of drug testing codes for 2015, I was so hopeful that Medicare would accept the drug testing CPT codes for 2016. For 2015, the American Medical Association (AMA) majorly revised the CPT drug testing codes, reorganizing the drug testing codes as presumptive, definitive, or therapeutic.

• Presumptive testing is for the possible use or non-use of a drug. Presumptive methods of testing are mainly immunoassays, enzymatic methods, and thin-layer chromatography (TLC). The CPT codes for presumptive testing, 80300-80304, are defined based on testing method and whether the drugs being tested are in Drug Class List A or Drug Class List B (also defined in the CPT manual).
• Definitive testing uses more complex testing methods, such as gas or liquid chromatography (GC/LC) with mass spectrometry (MS) and identifies individual drugs.
• Therapeutic drug assays are performed to monitor clinical response to a known, prescribed medication.

A helpful tool in the CPT code manual is the “Definitive Drug Classes Listing” that describes some of the particular drugs and metabolites included in each drug class for definitive testing. The most significant statement in the CPT instructions relative to definitive testing is, “Each category of a drug class, including metabolite(s) if performed (except stereoisomers), is reported once per date of service.” I admit some of the technical speak in the CPT instructions is even over my head (what is a stereoisomer??) but bottom line, this sentence means that CPT codes 80320 – 80377 are to be reported once a day per drug class. MMP even confirmed this with the American Hospital Association Coding Clinic. So if you test for oxycodone and oxymorphone, you only report CPT code 80365 with one unit.

Back to my wishful thinking - you don’t always get what you want. For 2016, Medicare is not accepting the CPT codes for drug testing. CMS has deleted all of the drug testing HCPCS codes from last year (G0431, G0434, and G6030 – G6058) and created new HCPCS codes for 2016. The bad news is that there is still not a one-to-one correlation between CPT and HCPCS codes for drug testing; the good news is that this year’s HCPCS codes appear a little easier to use and understand.

There are three new presumptive testing HCPCS codes based on testing methods. Only one of the three presumptive G codes may be billed per day.

• G0477 Drug tests(s), presumptive, any number of drug classes; any number of devices or procedures, (eg, immunoassay) capable of being read by direct optical observation only (eg, dipsticks, cups, cards, cartridges), includes sample validation when performed, per date of service.
• G0478 Drug tests(s), presumptive, any number of drug classes; any number of devices or procedures, (eg, immunoassay) read by instrument-assisted direct optical observation (eg, dipsticks, cups, cards, cartridges), includes sample validation when performed, per date of service.
• G0479 Drug tests(s), presumptive, any number of drug classes; any number of devices or procedures by instrumented chemistry analyzers (eg, immunoassay, enzyme assay, TOF, MALDI, LDTD, DESI, DART, GHPC, GC mass spectrometry), includes sample validation when performed, per date of service.

The most likely correlation for presumptive testing is that HCPCS codes G0477 and G0478 correlate with CPT codes 80300; HCPCS code G0479 correlates with CPT codes 80301, 80302, 80303, and 80304.

The new definitive HCPCS codes correlate with all of the CPT codes 80320 through 80377, depending on the number of definitive drug classes tested. The instructions in the 2016 Clinical Lab Fee Schedule Final Determinations state:

• Only one of the four definitive G codes may be billed per day.
• The unit used to determine the appropriate definitive G code to bill is “drug class.”
• Each drug class may only be used once per day in determining the appropriate definitive G code to bill.
• Drug classes are consistent with their usage in the AMA CPT Manual. The AMA CPT Manual may be consulted for examples of individual drugs within each class.

This means you can count the number of definitive CPT drug test codes to determine which of the HCPCS codes to bill. The new Medicare definitive codes are defined as: “Drug test(s), definitive, utilizing drug identification methods able to identify individual drugs and distinguish between structural isomers (but not necessarily stereoisomers), including, but not limited to GC/MS (any type, single or tandem) and LC/MS (any type, single or tandem and excluding immunoassays (eg, IA, EIA, ELISA, EMIT, FPIA) and enzymatic methods (eg, alcohol dehydrogenase)); qualitative or quantitative, all sources, includes specimen validity testing, per day,…”

• G0480 - 1-7 drug class(es), including metabolite(s) if performed.
• G0481 - 8-14 drug class(es), including metabolite(s) if performed.
• G0482 - 15-21 drug class(es), including metabolite(s) if performed.
• G0483 - 22 or more drug class(es), including metabolite(s) if performed.

Even though Medicare has their own codes for definitive drug testing, as you can see, they rely heavily on CPT definitions. Very important verbiage for both CPT codes 80320-80377 and HCPCS codes G0480-G0483 is that these codes are not to be used for drug testing by immunoassay and enzymatic methods. One last thing to note – all the HCPCS drug testing codes include testing for specimen validation, such as pH, creatinine, etc. Testing to ensure the integrity of the specimen should not be billed separately.

For 2016, we may not have gotten what we wanted when it comes to drug testing codes, but we have to live with what we got. So get busy and update your charge description master.