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Hospitals have struggled with the 2-Midnight Rule since it was implemented on October 1, 2013. Since then the Centers for Medicare and Medicare Services (CMS) has held numerous National Provider Calls, released sub-regulatory guidance, implemented a Probe and Educate Process conducting by Medicare Administrative Contractors (MACs) and requested public comment for an alternative short stay payment policy from health care providers. On July 1st, the CMS released the CY 2016 Outpatient Prospective Payment System (OPPS) Proposed Rule. Tucked way back on page 150 of the 177 page document, not only does CMS propose a change to the 2-Midnight Rule but they provide detail regarding a new medical review strategy that CMS will adopt on October 1, 2015 “regardless of whether the 2-midnight rule remains unchanged or is modified.”

Two-Midnight Rule Background

• The Two-Midnight Rule was implemented for admissions on or after October 1, 2013 in response to the concerning trend of extended “observation” services as these days do not count towards the three-day inpatient hospital stay required before a beneficiary becomes eligible for treatment in a skilled nursing facility and patient status can have a significant implications for provider reimbursement and beneficiary cost sharing.

• In general, the 2-Midnight Rule specified that an Inpatient stay is appropriate and payable under Medicare Part A when:
• The admitting physician has an expectation that a hospitalization will cross two midnights and the medical record documentation supports that expectation, or
• The beneficiary is being admitted for a Medicare designated Inpatient Only Procedure.

• Through sub-regulatory guidance, CMS has indicated “review contactors’ expectations for sufficient documentation will be rooted in good medical practice. Expected length of stay and the determination of the underlying need for medical or surgical care at the hospital must be supported by complex medical factors such as history and comorbidities, the severity of signs and symptoms, current medical needs, and the risk of an adverse event, which Medicare review contractors will expect to be documented in the physician assessment and plan of care. CMS does not anticipate that physicians will include a separate attestation of the expected length of stay, but rather that this information may be inferred from the physician’s standard medical documentation, such as his or her plan of care, treatment orders, and physician’s notes.”

• With the implementation of the Two-Midnight Rule, CMS initiated a Probe and Educate Process where Medicare Administrative Contractors (MACs) have been conducting prepayment patient status probe reviews of Medicare Part A inpatient hospital claims spanning 0 or 1 midnight after the formal inpatient admission to determine the medical necessity of the inpatient status in accordance with the 2 midnight benchmark.

• The Medicare Access and CHIP Reauthorization Act of 2015 extended the Probe and Educate Process through September 30, 2015. This Act also continues to prohibit Recovery Auditor from conducting post-payment medical reviews of inpatient hospital patient status claims with dates of admission between October 1, 2013 and September 30, 2015.

• Since the implementation of the Two-Midnight Rule, CMS has indicated that “other circumstances where an inpatient admission would be reasonable in the absence of an expectation of a 2 midnight stay should be rare and unusual. To date, CMS has identified “Mechanical Ventilation Initiated during Present Visit” as the only rare and unusual circumstance in which the 2-midnight benchmark would not apply.”

Proposed Policy Change for Medical Review of Inpatient Hospital Admissions under Medicare Part A

The proposed policy change for medical review of inpatient hospital admissions is aimed at changing “the standard by which inpatient admissions generally qualify for Part A payment based on feedback from hospitals and physicians to reiterate and emphasize the role of physician judgement.”

CMS is “proposing to modify our existing “rare and unusual” exceptions policy to allow for Medicare Part A payment on a case-by-case basis for inpatient admissions that do not satisfy the 2-midnight benchmark, if the documentation in the medical record supports the admitting physician’s determination that the patient requires inpatient hospital care despite an expected length of stay that is less than 2 midnights. For payment purposes, the following factors, among others, would be relevant to determining whether an inpatient admission where the patient stay is expected to be less than 2 midnights is nonetheless appropriate for Part A payment:

• The severity of the signs and symptoms exhibited by the patient;
• The medical predictability of something adverse happening to the patient; and
• The need for diagnostic studies that appropriately are outpatient services (that is, their performance does not ordinarily require the patient to remain at the hospital for 24 hours or more).

We note that, under the existing rare and unusual policy, only one exception—prolonged mechanical ventilation—has been identified to date. Upon further consideration and based on feedback from stakeholders, we believe there may be other patient-specific circumstances where certain cases may nonetheless be appropriate for Part A payment, absent an expected stay of at least 2 midnights. Such circumstances would be determined on a case-by-case basis. Under the proposed revised policy, for

purposes of Medicare payment, an inpatient admission will be payable under Part A if the documentation in the medical record supports either the admitting physician’s reasonable expectation that the patient will require hospital care spanning at least 2 midnights, or the physician’s determination based on factors such as those identified above, that the patient requires formal admission to the hospital on an inpatient basis”…”We are proposing to revise § 412.3(d) to state that when the admitting physician expects a hospital patient to require hospital care for only a limited period of time that does not cross 2 midnights, the services may be appropriate for payment under Medicare Part A if the physician determines and documents in the patient’s medical record that the patient requires a reasonable and necessary admission to the hospital as an inpatient. In general, we would expect that with most inpatient admissions where the stay is expected to last less than the 2-midnight benchmark, the patient will remain in the hospital at least overnight but acknowledge that the patient can be unexpectedly discharged or transferred to another hospital and not actually use a hospital bed overnight. Cases for which the physician determines that an inpatient admission is necessary, but that do not span at least 1 midnight, will be prioritized for medical review.”

“Under the proposed policy change, for stays for which the physician expects the patient to need less than 2 midnights of hospital care and the procedure is not on the inpatient only list or on the national exception list, an inpatient admission would be payable on a case-by-case basis under Medicare Part A in those circumstances under which the physician determines that an inpatient stay is warranted and the documentation in the medical record supports that an inpatient admission is necessary.”

The proposed rule makes a point to note that CMS is “not proposing any changes for hospitals stays that are expected to be greater than two midnights; that is, if the physician expects the patient to require hospital care that spans at least 2 midnights and admits the patient based on that expectation, the services are generally appropriate for Medicare Part A payment.”

CMS goes on to reiterate that it would “be rare and unusual for a beneficiary to require inpatient hospital admission after having a minor surgical procedure or other treatment in the hospital that is expected to keep him or her in the hospital for only a few hours and not at least overnight” and CMS “will monitor the number of these admissions and plan to prioritize these types of cases for medical review.”

What does this mean for a Hospital?

When I was first introduced to the concept of Clinical Documentation one key concept different in the inpatient setting versus the outpatient setting was that diagnoses still documented as possible, probable or likely at the time of discharge could be coded as if the condition existed.

Here is a breakdown of the possible, probable and likely of this 2-Midnight Proposal.

• It would now be possible that a physician can admit a patient as an inpatient without having a 2-Midnight Expectation, but
• It is also probable without excellent physician documentation in the record a medical reviewer would disagree with the inpatient status, and
• It is likely moving forward all of your 1 day Inpatient Hospital reviews will be prioritized for medical review. The question now is who will be doing that review. The answer leads us to the change being made for the 2016 IPPS fiscal year to the CMS medical review strategy.

CMS Changing the Medical Review Strategy

As mentioned earlier in this article, the MACs have had the responsibility of performing the Probe & Educate audits that have been ongoing since October 1, 2013. This is about to change. CMS has indicated even if the 2-Midnight Proposal is not finalized “that, no later than October 1, 2015, we are changing the medical review strategy plan to have Quality Improvement Organization (QIO) contractors conduct these reviews of short inpatient stays rather than the MACs.”

Key Facts about QIOs

• A statutory duty of the QIO’s is to review “some or all of the professional activities of providers and practitioners in the QIO’s service area.” These reviews are aimed at determining if services being delivered are reasonable and medically necessary, if the quality of services meet professional recognized standards of care, and for inpatient services, if the services could have been appropriately and effectively furnished in a different setting (i.e. outpatient). Further, section 1154(a)(2) of the Act provides for payment determinations to be made based on these QIO reviews.”

• Additional QIO Review Functions:
• Addressing beneficiary complaints,
• Provider-based notice appeals,
• Violations of the Emergency Medical Treatment and Labor Act (EMTALA),
• Peer review; and
• Higher Weighted Diagnosis Related-Group (HWDRG) coding reviews. When this “involves a service provided during a short inpatient stay, QIOs also perform a corresponding medial review to validate adherence to the current 2-midnight policy.”

• The Secretary has broad authority to “direct additional activities by QIOs to improve the effectiveness, efficiency, economy, and quality of services under the Medicare program. These reviews are integral to the determination of whether items and services should be payable under the Medicare program.”
• “QIOs routinely collaborate and interact with State survey agencies, MACs, recovery auditors, and qualified independent contractors (QICs).”

• “To mitigate the perception of a potential conflict of interest between medical review and quality improvement functions of the QIOs, on August 1, 2014, the QIO program separated medical case review from its quality improvement activities in each State under two types of regional contracts. These include Beneficiary and Family Centered Care QIOs (BFCC-QIOs) contractors who perform medical case review, and Quality Innovation Network QIOs (QIN-QIOs) contractors who perform quality improvement activities and provide technical assistance to providers and practitioners. In addition, the restructured QIO program uses a non-QIO contractor to assist CMS in the monitoring and oversight of the BFCC-QIO case review activities.”

New QIO Short Inpatient Medical Review Process to be adopted by October 1, 2015

• “QIOs will review a sample of post-payment claims and make a determination of the medical appropriateness of the admission as an inpatient.”

• The number of admissions for a “minor surgical procedure or other treatment in the hospital that is expected to keep him or her in the hospital for only a few hours (less than 24 hours)” will be monitored and these types of cases will be prioritized for medical review.

• Claim denials will be referred to the MAC for payment adjustments. “Providers’ appeals of denied claims will be addressed under the provisions of section 1869 of the Act.”

• “QIOs will educate hospitals about claims denied under the 2-midnight policy and collaborate with these hospitals in their development of a quality improvement framework to improve organizational processes and/or systems.”

• “Hospitals that are found to exhibit a pattern of practices, including, but not limited to: having high denial rates and consistently failing to adhere to the 2-midnight rule (including having frequent inpatient hospital admissions for stays that do not span one midnight), or failing to improve their performance after QIO educational intervention, will be referred to the recovery auditors for further payment audit.”

• Under current law, Recovery Auditors may resume patient status reviews for dates of admission on or after October 1, 2015. “The number of claims that a recovery auditor will be allowed to review for patient status will be based on the claim volume of the hospital and the denial rate identified by the QIO.”

2-Midnight Rules’ Impact on the Trend of Long Outpatient Hospital Stays

CMS notes that “preliminary data suggest that the 2-midnight rule as it relates to hospital stays spanning at least 2 midnights has been effective in reducing long outpatient hospital stays. Specifically, our data show that the proportion of outpatient long-stay encounters (more than 2 days) involving observation services decreased by 11 percent in FY 2014 compared to FY 2013. The trend in these data is consistent with our adoption of the 2-midnight rule on October 1, 2013.”

Public Comments Requested

CMS noted that is has been argued by members of the hospital community that Medicare should adopt specific criteria for medical review entities to use when reviewing short stay claims. CMS is inviting public comments on whether specific criteria should be adopted for inpatient hospital admissions not expected to span at least 2 midnights and, if so, what should that criteria be.

CMS also noted that “MedPAC recently recommend repealing the 2-midnight rule in its entirety, in Chapter 7 of its June Report to Congress. MedPAC has not recommended a short-stay payment policy. We have requested public comment on three different occasions on issues related to when a patient is appropriately admitted as an inpatient or when the patient is appropriately treated as an outpatient, including potential payment policy options to address this issue” which has not resulted in a consensus on a recommended policy. In a letter earlier this year, the American Hospital Association provided us with its analysis for several payment policy alternatives and their potential impact. The association did not recommend adoption of a particular payment policy in this area. We continue to be open to considering potential payment policy options that have the potential to address this issue.”

For those who wish to comment, CMS is accepting comments on the Two Midnight portion of the proposed rule until August 30, 2015 and will respond to comments in a final rule to be issued on or around November 1, 2015.

Resources

• Link to the CY 2016 OPPS Proposed Rule – Display Copy (see pages 585-606 of the pdf): https://s3.amazonaws.com/public-inspection.federalregister.gov/2015-16577.pdf
• Link to CY 2016 OPPS Proposed Rule in the July 8, 2015 Federal Register (see pages 150-155 of ): http://www.gpo.gov/fdsys/pkg/FR-2015-07-08/pdf/2015-16577.pdf

• Link to the July 1, 2015 CMS Fact Sheet: Two-Midnight Rule: http://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2015-Fact-sheets-items/2015-07-01-2.html

• Link to the July 1, 2015 CMS Fact Sheet: CMS Proposes Hospital Outpatient and Ambulatory Surgical Center Policy and Payment Changes, Including Proposed Changes to the Two-Midnight Rule, and Quality Reporting Changes for 2016: http://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2015-Fact-sheets-items/2015-07-01.html

• Link to CMS Document: Questions and Answers Relating to Patient Status Reviews 3/12/14: http://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/Medical-Review/Downloads/Questions_andAnswersRelatingtoPatientStatusReviewsforPosting_31214.pdf

• June 2015 Medicare Payment Advisory Commission Report to Congress Fact Sheet: http://www.medpac.gov/documents/fact-sheets/fact-sheet-on-medpac%27s-june-2015-report-to-the-congress-medicare-and-the-health-care-delivery-system.pdf?sfvrsn=0

Some of you may remember the television series Columbo that featured an unkempt cigar-smoking detective in a long beige raincoat. Columbo seemed to ramble on aimlessly when questioning suspects and just as they thought he was finally leaving, he would turn back to them with “just one more thing…” This month CMS added or reminded providers of several “just one more thing” items in relation to existing National Coverage Determinations (NCDs).

TAVR Hospital Program Volume Requirements

Effective May 1, 2012, Medicare covers Transcatheter Aortic Valve Replacement (TAVR) procedures under coverage with evidence development (CED) for the treatment of symptomatic aortic stenosis when:

• Furnished according to a Food and Drug Administration (FDA) approved indication; and
• Certain conditions are met including requirements for individual hospitals in which TAVR procedures are performed.

Hospitals must meet the volume requirements specified in the TAVR national coverage determination (NCD 20.32) in order for the TAVR procedure to be eligible for Medicare coverage. These requirements apply to each hospital site individually and hospitals that do not meet these volume requirements are not eligible for waivers or exceptions.

1. To begin a TAVR program, the hospital (without TAVR experience) must have:
2. ≥ 50 total aortic valve replacements (AVRs) in the previous year prior to TAVR, including ≥ 10 high-risk patients; and
3. ≥ 2 physicians with cardiac surgery privileges; and
4. ≥ 1000 catheterizations per year, including ≥ 400 percutaneous coronary interventions (PCIs) per year.
5. To continue a TAVR program, the hospital (with TAVR experience) must maintain:
6. ≥ 20 AVRs per year or ≥ 40 AVRs every 2 years; and
7. ≥ 2 physicians with cardiac surgery privileges; and
8. ≥ 1000 catheterizations per year, including ≥ 400 percutaneous coronary interventions (PCIs) per year.

See MLN Matters Article SE1515 for complete information.

Hepatitis C Virus (HCV) Screening

Effective June 2, 2014, Medicare covers screening for HCV as described below:

1. Once in a lifetime for individuals not at high-risk born from 1945 to 1965.
2. Use HCPCS code G0472
3. Individuals born prior to 1945 and after 1965 that do not have risk factors are not eligible for this screening
4. Once in a lifetime for individuals at high-risk of HCV regardless of birth year. “High risk” is defined as persons with a current or past history of illicit injection drug use; and persons who have a history of receiving a blood transfusion prior to 1992.
5. Use HCPCS code G0472
6. ICD-9 diagnosis code V69.8 (ICD-10 code Z72.89) “other problems related to lifestyle” is required
7. Annually for high-risk individuals who have had continued illicit injection drug use since the prior negative screening test.
8. Use HCPCS code G0472
9. Diagnosis codes required - ICD-9 code V69.8 (ICD-10 code Z72.89) AND
10. ICD-9 diagnosis code 304.91 (unspecified drug dependence continuous) (ICD-10 code F19.20)

Rural Health Clinics (RHCs), Federally Qualified Health Centers (FQHCs) and Method II Critical Access Hospitals (CAHs) are not valid facilities for HCV screening services. See MLN Matters Article MM9200 for more information. CPT code 86803, HCV rapid antibody test, is not appropriate for reporting HCV screening – use HCPCS code G0472.

Coverage of MTWA Using Non-SA Methods

Medicare has covered Microvolt T-wave Alternans (MTWA) diagnostic testing for sudden cardiac death (SCD) from ventricular arrhythmias since March 2006 but only when analyzed by spectral analysis (SA) method.

• Effective for claims with dates of service on and after January 13, 2015, CMS removed the national non-coverage of the MMA method and now allows Medicare Administrative Contractors (MACs) to determine coverage at their discretion of MTWA diagnostic testing for the evaluation of patients at risk for SCD using analysis methods other than SA.
• Providers should report CPT 93025 (MTWA for assessment of ventricular arrhythmias) with the –KX modifier to attest that documentation is on file verifying the MTWA was performed using a method of analysis other than SA for the evaluation of patients at risk for SCD from ventricular arrhythmias and that all other NCD criteria were met. (Claims for MTWA using spectral analysis do not require the KX modifier).
• MLN Matters Article MM9162 contains a list of the diagnosis codes approved by CMS – this list may or may not be complete based on the discretion of the MACs.
• The MACs will not automatically adjust previously denied claims based on the new coverage guidelines but providers may bring these to the MAC’s attention within timely filing.

Q:

During a procedure when only one or two lymph nodes are removed; would the correct “Root Operation” be “Resection” or “Excision”?

 

A:

Lymph nodes are known to form together in clusters, better known as a “chain of nodes”. There are generally numerous amounts of lymph nodes within a chain of nodes. It can be difficult to know for sure whether all nodes were removed or not during any one particular procedure. One example of this would be when a patient is extremely obese.

Assign root operation “Resection”:

• When all nodes in a chain are removed.
• When total removal of lymph nodes is the physician’s intent but difficult to determine if they have actually all been removed.

Assign root operation “Excision”:

• When only a partial amount of lymph nodes are removed from the chain.

Assign root operation “Excision”:

• Sampling of nodes removed – example would be Sentinel Nodes

The operative report should be read carefully to determine the exact intent for the lymph node removal.

References Coding Clinic 3rd Quarter 2014 (ICD-10-CM/PCS) pages 9 and 10

Medicare can be fastidious – picky, particular, specific, precise, even downright finicky in their coding, billing, and documentation requirements. By now, most of us are used to their demands for precision. For example, we are all aware that the units billed must match the dosage, amount, or time specified in the physician’s order. But in the July 2015 OPPS Update, CMS points out an instance related to hyperbaric oxygen treatments (HBO) where this does not hold true.

When a physician orders a 90-minute HBO treatment, he or she expects that the patient will be placed at 100% oxygen for 90 minutes. In billing for HBO treatments, providers are allowed to include not only the time at 100% oxygen but also the time for descent, air breaks, and ascent. In that case, the units billed for HBO will be greater than the units equivalent to the 90 minutes specified in the order.

Effective January 1, 2015, CMS discontinued the old code that had been used to report HBO for years (C1300) and replaced it with new HCPCS code G0277 which has the same description as the old code - Hyperbaric oxygen under pressure, full body chamber, per 30 minute interval. Here are the key points to keep in mind when billing G0277 for HBO services:

• The total number of billable 30-minute intervals would not be based solely on the amount of time noted on the physician order.
• The total number of 30-minute intervals billable under G0277 should be calculated by including:
• Time spent by the patient under 100% oxygen,
• Time for descent,
• Time for air breaks, and
• Time for ascent.
• You must go at least 16 minutes into the next 30-minute interval in order to bill an additional unit. For example:
• 46-75 minutes = 2 units
• 76-105 minutes = 3 units
• 106-135 minutes = 4 units
• HBO is typically prescribed for an average of 90 minutes (at 100% oxygen)
• A common scenario to fulfill an HBO order for 90 minutes of treatment would be 90 minutes of therapeutic HBO, 10 minutes descent, 10 minutes air breaks and 10 minutes ascent for a total of 120 minutes which would equal 4 units of G0277.
• In general, CMS does not expect that a physician order for 90 minutes of HBO therapy would exceed 4 billed units of HCPCS code G0277.

And one more thing Medicare is picky about is their coverage requirements. In addition to getting the correct units on the claim, providers need to be sure the patient qualifies for HBO services in accordance with Medicare’s National Coverage Determination and any Local Coverage Determinations or Articles. The NCD for Hyperbaric Oxygen Therapy (20.29) includes a long list of covered conditions and an even longer list of non-covered indications. HBO is used as an adjunctive treatment and /or after conventional therapy has failed for a number of the covered conditions so review the policy carefully. Be sure that documentation in your medical record provides the details of any conservative or standard treatments in order to support the use of HBO as an adjunctive therapy.

HBO covered conditions include:

1. Acute carbon monoxide intoxication,
2. Decompression illness,
3. Gas embolism,
4. Gas gangrene,
5. Acute traumatic peripheral ischemia. HBO therapy is a valuable adjunctive treatment to be used in combination with accepted standard therapeutic measures when loss of function, limb, or life is threatened.
6. Crush injuries and suturing of severed limbs. As in the previous conditions, HBO therapy would be an adjunctive treatment when loss of function, limb, or life is threatened.
7. Progressive necrotizing infections (necrotizing fasciitis),
8. Acute peripheral arterial insufficiency,
9. Preparation and preservation of compromised skin grafts (not for primary management of wounds),
10. Chronic refractory osteomyelitis, unresponsive to conventional medical and surgical management,
11. Osteoradionecrosis as an adjunct to conventional treatment,
12. Soft tissue radionecrosis as an adjunct to conventional treatment,
13. Cyanide poisoning,
14. Actinomycosis, only as an adjunct to conventional therapy when the disease process is refractory to antibiotics and surgical treatment,
15. Diabetic wounds of the lower extremities in patients who meet the following three criteria:
16. Patient has type I or type II diabetes and has a lower extremity wound that is due to diabetes;
17. Patient has a wound classified as Wagner grade III or higher; and
18. Patient has failed an adequate course of standard wound therapy.

A 2014 review of HBO claims by Medicare’s Supplemental Medical Review Contractor revealed an error rate of 58%. Although over half of the denials were for lack of response to the document request, other medically reviewed claims lacked documentation in the submitted medical records to support the HBO services as medically reasonable and necessary. The documentation did not include:

• Specific timelines and goals for therapy. For example, the documentation simply stated “continue HBO” or “until healed”
• Radiology and pathology reports confirming diagnosis such as osteomyelitis or gas gangrene
• Monitoring for improvement or lack of improvement

In addition, when documentation was provided, descriptions of diabetic wounds did not meet Wagner Criteria for Grade three (III) or four (IV) wounds and therapy was provided beyond the 30 days allowed under Medicare coverage guidelines.

So before you bill for HBO make sure your patients meet the criteria for coverage and that you correctly calculate the number of units to report. If not, picky Medicare may decide to “pick” on you!

Today June 3rd is National Repeat Day. Who knew, certainly not me until doing research for this article but, today June 3rd is National Repeat Day. Although the origins of today June 3rd being National Repeat Day are not really known, it is the perfect opportunity to re-visit patient status (Inpatient or Outpatient) with a focus on communicating the status with the beneficiary. We will take a look at the Important Message from Medicare (IM) letter for the inpatient, the CMS publication “Are You a Hospital Inpatient or Outpatient?” and introduce you to a repeat piece of legislation that could impact when and how you let the Medicare beneficiary know that they are receiving services in your hospital as an Outpatient.

The Important Message from Medicare

Currently, hospitals are required to deliver the Important Message from Medicare (IM), CMS-R-193 to all Medicare beneficiaries (Original Medicare and Medicare Advantage plan enrollees) who are hospital inpatients. This letter is to be provided within two days of admission and a second copy within two days of discharge. This letter informs the beneficiary of their rights as a hospital inpatient as well as their Medicare discharge rights.

Rights as a Hospital Inpatient:

• The Right to receive Medicare covered services that include medically necessary hospital services and services that may be needed after discharge.
• The Right to know about these services, who will pay for them, and where you can get them.
• The Right to be involved in decisions about the hospital stay, and who will pay for it.
• The Right to report any concerns about the quality of care received to the Quality Improvement Organization (QIO).

Medicare Discharge Rights:

• The Right to appeal if you believe that you are being discharged too soon.
• The right to talk with hospital staff, doctor and managed care plan (if you belong to one) about your concerns.
• The right to appeal through a review of your case by a Quality Improvement Organization (QIO).

Are You a Hospital Inpatient or Outpatient?

The CMS publication 11435: “Are You a Hospital Inpatient or Outpatient?” provides information regarding the difference in patient status (inpatient or outpatient), what the difference in cost to the beneficiary will be, and common hospital situations with a description of how Medicare will pay.

The Outpatient Receiving Observation Services?

How does a beneficiary know when they are receiving care in the hospital as an Outpatient? Here at MMP we have clients that are already notifying the beneficiary when they are an Outpatient. However, if your hospital is not notifying Medicare beneficiaries of their Outpatient status, there is legislation in the U.S. House of Representatives and the U.S. Senate that could require you to develop and implement a process to do just that.

H.R. 876: Notice of Observation Treatment and Implication for Care Eligibility Act (NOTICE Act)

Representative Lloyd Doggett (D-TX) first introduced this bill as H.R. 5232 on July 29, 2014 during the 113th Congress but it never made it to a Committee. Representative Doggett re-introduced a “repeat” version of this Bill (H.R. 876) on February 11, 2015. Unlike H.R. 5232, this bill has already made it through the House with a 395 Yea to Zero Nay vote on March 16, 2015. The two remaining steps for this Bill to become law are for it to be passed by the Senate and signed by the President (see Figure 1).

Figure 1: H.R. 876: NOTICE Act History

Bill introduced
February 11, 2015

Reported by committee
February 26, 2015 

Passed House 395-0
Marched 16, 2015

Next Step:
Passing Senate

Final step:
Enacting by President

The Congressional Research Services, which is a nonpartisan division of the Library of Congress has summarized this Act  and writes that this ACT “amends title XVIII (Medicare) of the Social Security Act to require a hospital or critical access hospital with an agreement with the Secretary of Health and Human Services to give each individual who receives observation services as an outpatient for more than 24 hours an adequate oral and written notification within 36 hours after beginning to receive them which:

explains the individual's status as an outpatient and not as an inpatient and the reasons why; explains the implications of that status on services furnished (including those furnished as an inpatient), in particular the implications for cost-sharing requirements and subsequent coverage eligibility for services furnished by a skilled nursing facility; includes appropriate additional information; is written and formatted using plain language and made available in appropriate languages; and is signed by the individual or a person acting on the individual's behalf (representative) to acknowledge receipt of the notification, or if the individual or representative refuses to sign, the written notification is signed by the hospital staff who presented it.”

S.1349: Notice of Observation Treatment and Implication for Care Eligibility Act (NOTICE Act)

Senator Benjamin Cardin (D-MD) introduced S.1349 on May 14, 2015. This Act is also known as the NOTICE Act and is also a Bill “to amend title XVIII of the Social Security Act to require hospitals to provide certain notifications to individuals classified by such hospitals under observation status rather than admitted as inpatients of such hospitals.” Unlike H.R. 876, this bill has yet to make to a Committee (see Figure 2).

Figure 2: S.1349 NOTICE ACT History

Bill introduced
February 11, 2015

Next Step:
Reporting by Commitee 

Next Step:
Passing Senate

Next Step:
Passing House

Final step:
Enacting by President

What You Need to Know if the NOTICE Act becomes Law

• IPPS Acute and Critical Access Hospitals will be required to furnish a Notice.
• Hospitals will have 12 months after the Act becomes law to implement this process.
• A notice will need to be provided to the beneficiary no later than 36 hours after he or she begins to receive observation services (or sooner, upon release).
• The Notice will be written and formatted using plain language and made available in appropriate languages as determined by the Secretary.

For those interested in additional information about the Important Message from Medicare, the CMS publication “Are You a Hospital Inpatient or Outpatient?” or following these Bills links have been provided below. In the meantime, we will continue to follow both pieces of legislation and keep you posted on any updates.

In honor of today June 3rd being National Repeat Day I leave you with this repeatable quote.

“Decide to be a success; decide to be great, decide to be above average, decide to do the very best of you. Do you know who a P.O.O.R. person is? P.O.O.R. people are those who are “Passing On Opportunities Repeatedly."-Israelmore Ayivor, Dream Big!: See Your Bigger Picture!

Resources:

• CMS Hospital Discharge Appeal Notices web page: http://www.cms.gov/Medicare/Medicare-General-Information/BNI/HospitalDischargeAppealNotices.html
• Are You a Hospital Inpatient or Outpatient? (May 2014 version): https://www.medicare.gov/Pubs/pdf/11435.pdf
• Follow H.R. 876: NOTICE Act on govtrack.us at: https://www.govtrack.us/congress/bills/114/hr876
• Follow S. 1349: NOTICE Act on govtrack.us at: https://www.govtrack.us/congress/bills/114/s1349

Coming In and Going Out

At the National Spelling Bee, spellers can ask for the definition of the word they are trying to spell.  Words can sound similar in pronunciation but be spelled differently based on definition.  For example, do you know the difference in the words “emigrate” and “immigrate”?  Emigrate means to leave a country (he emigrated from Ireland) and immigrate means to move into a country (he immigrated to America).  The comings in and going out of laboratory tests also have rules – well Medicare billing rules at least.

It is not unusual these days for a hospital to have an outpatient and outreach laboratory where patients may present with their physician orders for lab tests or where physician offices, clinics, or other healthcare entities may send specimens to be tested.  Hospital laboratories perform a wide array of laboratory tests, but there are some esoteric tests that a hospital lab may not perform and these tests are sent to a specialized reference laboratory for testing.  So with lab tests coming in and going out, who bills Medicare for the tests?  Actually, there are rules about that…

Outpatient Lab Testing

Only the hospital can bill Medicare for laboratory testing provided to hospital inpatients and outpatients.  This includes lab tests performed by an outside reference laboratory on specimens from hospital inpatients and outpatients.  Section 40.3 of the Medicare Claims Processing Manual, Chapter16, states: “When the hospital obtains laboratory tests for outpatients under arrangements with clinical laboratories or other hospital laboratories, only the hospital can bill for the arranged services.”  In such cases, the hospital would bill Medicare for the lab services on an outpatient claim (13x type of bill) and the hospital would pay the reference laboratory for the testing.

Section 40.3 referenced above also defines who is and is not an outpatient.  The section that defines “outpatient” refers to critical access hospitals, but the manual goes on to say the same rules apply in determining whether clinical laboratory services are furnished as part of outpatient services of a hospital.  The patient is considered a hospital “outpatient” when one of the following occurs:

• He or she is present in the hospital when the specimen is collected,
• Other outpatient services are received on the same day the specimen is collected,
• The specimen is collected by an employee of the hospital or a hospital provider-based-department.

Non-Patient Lab Testing

When the patient’s specimen is not collected at the hospital or by a hospital employee and the patient is not receiving other hospital outpatient services on that day, the patient is considered a non-patient.  For tests performed in the hospital’s own laboratory, the hospital bills Medicare on a 14x type of bill.  If the tests are sent to a reference laboratory for testing, either the hospital or the reference lab may bill Medicare for the testing.  Only one laboratory may bill for a referred laboratory service.  It is the responsibility of the referring laboratory (hospital in this case) to ensure that the reference laboratory does not bill Medicare for the referred service when the hospital bills Medicare.

Exceptions

There are some special rules for specimens received from certain types of healthcare entities.

Skilled Nursing Facilities

• For Part A SNF inpatients, the SNF must bill Medicare directly.
• For Part B SNF inpatients or outpatients, either the SNF or the performing laboratory may bill Medicare.

End-Stage Renal Disease Lab Tests

• All ESRD-related laboratory services are included in the ESRD PPS base rate and must be reported by the ESRD facility.  A list of lab tests that are routinely performed for the treatment of ESRD can be found at ESRD Consolidated Billing webpage.
• Laboratory services that are not related to the treatment of ESRD are separately billable under the ESRD PPS.  Hospital outpatients with unrelated ESRD tests must be billed by the hospital.  Non-patient unrelated lab testing may be billed by either the ESRD facility or the hospital laboratory.
• If the ESRD facility or testing laboratory bills a laboratory service that was not related to the treatment of ESRD, the bill must include the modifier AY.  The AY modifier serves as an attestation that the item or service is medically necessary for the dialysis patient but is not being used for the treatment of ESRD.

Hospice Patients

• Hospice nurses often collect specimens and bring them to a hospital laboratory for testing.  All services related to the patient’s terminal or co-morbid conditions are covered under the hospice benefit.  The hospital laboratory would bill the Hospice provider for these laboratory services.

Separate Payment for Lab Tests under OPPS

In 2014, Medicare packaged most laboratory tests under the Outpatient Prospective Payment System as ancillary services with a revised Status Indicator (SI) of “N”.  This means there is no separate payment for laboratory services.  There are some exceptions when lab services will be paid separately by Medicare.  These exceptions include:

• Lab tests on non-patient specimens billed on a 14x type of bill
• When laboratory tests are the only outpatient service the patient receives for that day.  These are billed on a 13x type of bill and an L1 modifier is appended to the lab services.
• Unrelated laboratory tests that are ordered by a different physician for a different diagnosis than other outpatient services received that day.  These are also billed on a 13x type of bill with the L1 modifier.

Other Payer Rules for Lab Tests

To keep life interesting and providers on their toes, not all payers follow Medicare rules.  You will have to check with individual payers to determine how laboratory tests should be billed.  Some payers may require the testing lab to bill and others may have specific criteria for when the referring lab can bill.  For example Alabama Medicaid states the following concerning charges for referred testing.

 Hospital labs may bill Medicaid on behalf of the reference lab that a specimen is sent to for analysis. Payment may be made to the referring laboratory but only if one of the following conditions is met:

• The referring laboratory is located in, or is part of, a rural hospital;
• The referring laboratory is wholly owned by the entity performing such test, the referring laboratory wholly owns the entity performing such test, or both the referring laboratory and the entity performing such test are wholly-owned by a third entity; or
• The referring laboratory does not refer more than 30 percent of the clinical laboratory tests for which it receives requests for testing during the year (not counting referrals made under the wholly-owned condition described above).

Note also that AL Medicaid only allows venipuncture to be billed if the specimen is tested at a different lab than the lab collecting the specimen – “Hospital labs may bill ‘routine venipuncture’ only for collection of laboratory specimens when sending blood specimens to another site for analysis”

Hospital providers must consider the comings in and goings out of laboratory specimens in order to know who and how to bill.  It’s enough to make one want to immigrate to another career – or would that be emigrate?

Q:

How do you report the quantity of a drug with a HCPCS code when the HCPCS dose is different from the dose that was given?

 

A:

You can round up the quantity when needed with any of the drug HCPCS codes.

So if the HCPCS code is “per 5 MG” and you gave 10 MG, you would report the HCPCS code with a quantity of 2. If the HCPCS code is “per 5 MG” and gave 8 MG, you would round up and report the HCPCS code with a quantity of 2.

Reference: Medicare Claims Processing Manual, chapter 17, section 10

“Hospitals must report all appropriate HCPCS codes and charges for separately payable drugs, in addition to reporting the applicable drug administration codes. Hospitals should also report the HCPCS codes and charges for drugs that are packaged into payments for the corresponding drug administration or other separately payable services. Historical hospital cost data may assist with future payment packaging decisions for such drugs. Drugs are billed in multiples of the dosage specified in the HCPCS code long descriptor. If the drug dose used in the care of a patient is not a multiple of the HCPCS code dosage descriptor, the provider rounds to the next highest unit based on the HCPCS long descriptor for the code in order to report the dose provided. If the full dosage provided is less than the dosage for the HCPCS code descriptor specifying the minimum dosage for the drug, the provider reports one unit of the HCPCS code for the minimum dosage amount.”

Most of us know the dangers of assumptions. We have all heard the play on letter divisions within the word “ass/u/me.” Medicare and Medicare providers are not immune to the negative consequences of assumptions. Such was the case with the physician supervision rules for hospital outpatient services.

In the 2009 Outpatient Prospective Payment System (OPPS) Proposed and Final Rules, Medicare shocked the provider community with their “clarification” of the physician supervision requirements. Prior to this “clarification,” hospitals had not worried much about meeting the physician supervision requirements on the hospital campus because CMS stated in the original OPPS rule that “we assume the physician supervision requirement is met on hospital premises because staff physicians would always be nearby within the hospital.” But according to Medicare, providers misinterpreted their meaning of the word “assume” and Medicare always expected hospital outpatient therapeutic services to be provided under the direct supervision of physicians in the hospital and in all provider-based departments (PBDs) of the hospital, specifically, both on-campus and off-campus departments of the hospital.

Thus began the on-going discussions, clarifications, adjustments, and exceptions to physician supervision requirements for hospital services. So where are we today with supervision requirements for hospital outpatient services?

Therapeutic Services

Generally, “CMS requires direct supervision by an appropriate physician or non-physician practitioner in the provision of all therapeutic services to hospital outpatients, including CAH outpatients.”

Facts about Direct Supervision:

• Applies to therapeutic services furnished in the hospital or CAH or in an on-campus or off-campus outpatient department of the hospital or CAH.
• Non-physician practitioners (NPPs) may furnish the required supervision of hospital outpatient therapeutic services that they are allowed to personally furnish. NPPs include licensed clinical social workers, physician assistants, nurse practitioners, clinical nurse specialists, and certified nurse-midwives.
• The physician or NPP must be immediately available to furnish assistance and direction throughout the performance of the procedure. Immediately available means the immediate physical presence of the supervisory physician or NPP.
• The physician is not required to be present in the room where the procedure is performed or within any other physical boundary as long as he or she is immediately available.
• Lack of immediate availability would be situations where the supervisory physician is performing another procedure or service that he or she could not interrupt.
• Though not specifically defined in terms of time or distance, the supervisory physician or NPP may not be so physically distant on-campus from the location where hospital/CAH outpatient services are being furnished that he or she could not intervene right away.
• An allowed practitioner can furnish direct supervision from any location in or near an off-campus hospital or CAH building that houses multiple hospital provider-based departments where the services are being furnished as long as the supervisory practitioner is immediately available.
• The supervisory physician or NPP must have, within his or her State scope of practice and hospital-granted privileges, the knowledge, skills, ability, and privileges to perform the service or procedure.
• CMS expects the supervisory practitioner to be knowledgeable about the therapeutic service and clinically able to furnish the service.
• The supervisory responsibility is more than the capacity to respond to an emergency, and includes the ability to take over performance of a procedure or provide additional orders.
• The supervisory practitioner must be clinically able to supervise the service or procedure.
  This means an ER physician does not meet the supervision requirements for a specialized service such as Radiation Oncology.
• The moratorium on enforcement of direct supervision requirements for CAHs and rural hospitals has expired. For 2015 and beyond, CMS requires a minimum of direct supervision for all outpatient therapeutic services furnished in all hospitals, including rural hospitals and CAHs, unless different supervision requirements are assigned as explained below.

CMS may assign certain hospital outpatient therapeutic services either general supervision, personal supervision or extended duration services supervision.

• General supervision means the procedure or service is furnished under the physician's overall direction and control, but the physician's presence is not required during the performance of the procedure.
• Personal supervision requires the physician must be in attendance in the room during the performance of the service or procedure.
• For nonsurgical extended duration therapeutic services (“extended duration services”), CMS requires a minimum of direct supervision during the initiation of the service which may be followed by general supervision for the remainder of the service at the discretion of the supervisory practitioner.
• “Initiation” means the beginning portion of the extended duration service, ending when the supervisory practitioner believes the patient is stable enough for the remainder of the service to be safely administered under general supervision.
• The point of transition to general supervision must be documented in the patient’s progress notes or medical record.
• The list of services that may be furnished under general supervision or that are defined as non-surgical extended duration therapeutic services is available on the Hospital OPPS Webpage.

Diagnostic Services

Payment is allowed under the hospital outpatient prospective payment system for diagnostic services only when those services are furnished under the appropriate level of supervision.

• Supervision levels for diagnostic tests are listed in the quarterly updated Medicare Physician Fee Schedule (PFS) Relative Value File. For guidance regarding the numeric levels assigned to each CPT or HCPCS code in the PFS Relative Value File, see the Medicare Benefit Policy Manual, Chapter15, Section 80, “Requirements for Diagnostic X-ray, Diagnostic Laboratory, and Other Diagnostic Tests.”
• The definitions of “general” and “personal” supervision listed above apply.
• “Direct supervision” means that the physician must be immediately available to furnish assistance and direction throughout the performance of the procedure following the same rules for direct supervision as discussed above. This applies to diagnostic services provided:
• Directly or under arrangement,
• In the hospital or in an on-campus or off-campus outpatient department of the hospital.
• Non-physician practitioners cannot provide the required physician supervision when other hospital staff are performing diagnostic tests.

For more information on supervision requirements, see the Medicare Benefit Policy Manual, Chapter 6, sections 20.4.4, 20.5.2, and 20.7.

It is unknown if or how Medicare will enforce these supervision requirements, but we definitely don’t want to “assume” they will not.

Q:

What is the KX modifier and when should it be used?

 

A:

The KX modifier is defined as “Requirements specified in the medical policy have been met.” It is a multipurpose informational modifier.

CMS has further defined some specific circumstances when providers should report the KX modifier.

• To report an automatic exception to therapy caps. Adding the KX modifier to the line items that exceed the therapy caps indicates that the clinician attests that services at and above the therapy caps are medically necessary and justification is documented in the medical record.
• When billing for permanent cardiac pacemakers under the latest NCD revision effective August 13, 2013. Appending the KX modifier is an attestation by the provider that documentation is on file verifying the patient has non-reversible symptomatic bradycardia.
• To bill additional optional sessions of cardiac rehab or pulmonary rehab. Medicare allows 36 sessions, with the option for an additional 36 sessions for each of these services. Sessions beyond the initial 36 sessions, up to 72 sessions, require the KX modifier.
• To report FDG PET scans for subsequent treatment strategy beyond the 3rd scan. Each different cancer diagnosis is allowed one (1) initial treatment strategy (-PI modifier) FDG PET Scan and three (3) subsequent treatment strategy (-PS modifier) FDG PET Scans without the -KX modifier. The fourth FDG PET Scan and beyond for subsequent treatment strategy for the same cancer diagnosis will always require the -KX modifier.
• On MRIs for patients with implanted pacemakers that are FDA-approved for use in an MRI environment.Inclusion of the KX modifier on the claim line(s) means that the provider attests that documentation is on file verifying that FDA-approved labeling requirements are met.

 

In 1735, Benjamin Franklin noted that “an ounce of prevention is worth a pound of cure.” Although Franklin was actually addressing fire safety, this axiom is also true in reference to health. The Centers for Disease Control (CDC) in an article about the National Prevention Strategy states that “Increasing the focus on prevention in our communities will help improve America's health, quality of life and prosperity.” And in the long run, prevention reduces health care costs for patients, providers, and insurers. So it is not surprising that CMS is continuing to expand Medicare preventive and screening services.

On April 13, 2015, CMS released a Final Decision Memorandum expanding the coverage of HIV Screening for Medicare beneficiaries. Medicare has offered coverage of HIV screening since December 2008, but only covered the screening for individuals with certain high-risk factors or during pregnancy. This latest decision memo expands coverage to an annual screening for all Medicare beneficiaries between the ages of 15-65.

The complete list of covered conditions for HIV screening includes:

• A maximum of one, annual voluntary screening for all adolescents and adults between the age of 15 and 65, without regard to perceived risk;
• A maximum of one, annual voluntary screening for adolescents younger than 15 and adults older than 65 who are at increased risk for HIV infection. Increased risk for HIV infection is defined as follows:
• Men who have sex with men
• Men and women having unprotected vaginal or anal intercourse
• Past or present injection drug users
• Men and women who exchange sex for money or drugs, or have sex partners who do
• Individuals whose past or present sex partners were HIV-infected, bisexual or injection drug users
• Persons who have acquired or request testing for other sexually transmitted infectious diseases
• Persons with a history of blood transfusions between 1978 and 1985
• Persons who request an HIV test despite reporting no individual risk factors
• Persons with new sexual partners
• Persons who based on individualized physician interview and examination are deemed to be at increased risk for HIV infection.
• A maximum of three, voluntary HIV screenings of pregnant Medicare beneficiaries: (1) when the diagnosis of pregnancy is known, (2) during the third trimester, and (3) at labor, if ordered by the woman’s clinician.

In addition to the list of covered conditions, testing for HIV screening must also meet the following requirements.

• An FDA approved laboratory test or point of care test
• Testing in accordance with FDA approved labeling and compliant with CLIA regulations
• Ordered by the patient’s physician or practitioner within the context of a healthcare setting
• Performed by an eligible Medicare provider or supplier for these services

Remember that Medicare Administrative Contractors’ (MACs) claims processing systems may not yet be ready to accept claims under the new coverage conditions. Within a few months, Medicare will publish a transmittal updating the National Coverage Determination Manual and claims processing instructions if needed, with an effective date by which MACs should be prepared to accept claims under the new guidelines.

In related news, Medicare released a proposed decision memorandum on April 16, 2015 that proposes the coverage of Human Papillomavirus (HPV) testing for screening for cervical cancer. The memo recommends HPV testing once every five years for asymptomatic beneficiaries aged 30 to 65 in conjunction with the Pap smear test. CMS is currently accepting comments on this proposal and will respond to public comments in a final decision memorandum.

Moving healthcare towards a focus on prevention will hopefully improve the physical and financial health of America. Unfortunately today, the US spends more per capita on healthcare than many other nations, but does not have better health outcomes to show for it. Maybe this “ounce of prevention” will bring forth that “pound of cure.”