Note from the instructor: CMS clarifies payment amount to be applied to payment caps and manual review thresholds for outpatient therapy services provided by critical access hospitals

This week’s note from the instructor is written by Judith Kares, JD, regulatory specialist for HCPro, Inc.

General Guidelines

In the April 2, 2013 issue of the Medicare Insider, Debbie Mackaman discussed the provisions of the American Taxpayer Relief Act (the “ATRA”) related to outpatient therapy services furnished in various outpatient settings (including outpatient hospital departments) on and after January 1 through December 31, 2013 (CY 2013).  In particular, she noted the following individual beneficiary therapy payment caps and manual medical review thresholds applicable to outpatient therapy services provided during CY 2013:

Therapy payment caps:

• Physical therapy (PT) and speech language pathology (SLP) combined — $1900
• Occupational therapy (OT) — $1900

Manual review thresholds:

• PT and SLP combined — $3700
• OT — $3700

In the event that providers furnish what they believe to be medically necessary therapy services in excess of the applicable therapy caps for a specific beneficiary, they are to report those services with the –KX modifier.  If providers furnish therapy services in excess of the manual review thresholds for a specific beneficiary, those services are to be manually reviewed by the Recovery Auditors (RAs), effective April 1, 2013.  The RA reviews will be either pre- or post-payment, depending upon the state in which the provider is located.

Special Rules for CAH Outpatient Therapy Services

Under the ATRA, critical access hospitals (CAHs) will not be subject to the payment caps and review thresholds for the outpatient therapy services they furnish to Medicare beneficiaries. The outpatient therapy services provided by a CAH, however, will count toward all other providers’ therapy payment caps for those specific beneficiaries.  For example, if a patient is seen at a CAH and receives physical therapy services payable by Medicare, the payment for those services will count toward another hospital’s payment cap and review threshold for that beneficiary if the patient transfers care or starts a new episode of care at that facility during CY 2013.

Initially, CMS indicated that the amount that should be applied against a specific beneficiary’s payment cap and review threshold for services provided by a CAH should be the amount that would be payable for those services under the Medicare Physician Fee Schedule (MPFS).  In a recent Transmittal (R1216OTN) and related MLN Matters Article (MM8278), CMS clarified that Medicare payments for outpatient hospital therapy services should include a multiple procedure payment reduction when more than one unit or procedure is provided to the same patient on the same day by the same provider.  Therefore, when multiple outpatient hospital therapy services are provided to the same patient on the same day by the same provider, the payment amounts applied against payment caps and review thresholds should reflect applicable multiple procedure payment reductions, rather than the full MPFS amount that would otherwise apply.

Potential Payment Adjustment

In those instances where a CAH furnished outpatient therapy services to a beneficiary to whom a hospital has also provided outpatient therapy services, the hospital should check to see

• Whether multiple outpatient hospital therapy services were provided to the same patient on the same day by that same CAH; and

• If so, whether full MPFS payment amounts for the CAH outpatient therapy services were applied against that specific beneficiary’s payment caps or review thresholds, resulting in denial of claims that would have been payable if the multiple reduction rules had been appropriately applied.

If the answer to both queries above is “yes,” the hospital will need to request that its FI or AB MAC adjust such claims.

HDI posts one new issue

HDI posted one issue for DME/non-physician to its CMS approved list for providers in Region D. (See link for individual state applicability.)

According to the HDI website, the issue is:

For DME/non-physician:

• Excessive Units of Spring Powered Device. More than one spring powered device (A4258) per 6 months is not reasonable and necessary.

Connolly posts one new issue

Connolly posted one issue for Skilled Nursing Facilities (SNF) to its CMS approved list for providers in Region C. (See link for individual state applicability.)

According to the Connolly website, the issue is:

For SNF:

• Units in Excess of PPS Assessment Maximum – C002842013. Medicare assigns standard scheduled payment periods for SNF assessments. Overpayment occurs when additional units in excess of assessment maximums are billed.

Connolly posts nine new issues in one category

Connolly posted nine new issues in one category to its CMS approved list for providers in Region C. (See link for individual state applicability.

According to the Connolly website, the new issues are:

For inpatient claims:

• CMS Pre-Pay Demonstration: MS-DRG 639- Diabetes without CC/MCC – C002812013. The Recovery Audit Prepayment Review Demonstration will allow Medicare Recovery Auditors to review claims before they are paid to ensure that the provider complied with all Medicare payment rules, with limitations.
• CMS Pre-Pay Demonstration: MS-DRG 639- Diabetes without CC/MCC – C002802013. The Recovery Audit Prepayment Review Demonstration will allow Medicare Recovery Auditors to review claims before they are paid to ensure that the provider complied with all Medicare payment rules, with limitations.
• CMS Pre-Pay Demonstration: MS-DRG 639- Diabetes without CC/MCC -C002792013. The Recovery Audit Prepayment Review Demonstration will allow Medicare Recovery Auditors to review claims before they are paid to ensure that the provider complied with all Medicare payment rules, with limitations.
• CMS Pre-Pay Demonstration: MS-DRG 638- Diabetes with CC – C002782013. The Recovery Audit Prepayment Review Demonstration will allow Medicare Recovery Auditors to review claims before they are paid to ensure that the provider complied with all Medicare payment rules, with limitations.
• CMS Pre-Pay Demonstration: MS-DRG 638- Diabetes with CC – C002772013. The Recovery Audit Prepayment Review Demonstration will allow Medicare Recovery Auditors to review claims before they are paid to ensure that the provider complied with all Medicare payment rules, with limitations.
• CMS Pre-Pay Demonstration: MS-DRG 638- Diabetes with CC – C002762013. The Recovery Audit Prepayment Review Demonstration will allow Medicare Recovery Auditors to review claims before they are paid to ensure that the provider complied with all Medicare payment rules, with limitations.
• CMS Pre-Pay Demonstration: MS-DRG-637- Diabetes with MCC – C002752013. The Recovery Audit Prepayment Review Demonstration will allow Medicare Recovery Auditors to review claims before they are paid to ensure that the provider complied with all Medicare payment rules, with limitations.
• CMS Pre-Pay Demonstration: MS-DRG-637- Diabetes with MCC – C002742013. The Recovery Audit Prepayment Review Demonstration will allow Medicare Recovery Auditors to review claims before they are paid to ensure that the provider complied with all Medicare payment rules, with limitations.
• CMS Pre-Pay Demonstration: MS-DRG-637- Diabetes with MCC – C002732013. The Recovery Audit Prepayment Review Demonstration will allow Medicare Recovery Auditors to review claims before they are paid to ensure that the provider complied with all Medicare payment rules, with limitations.

Note from the Instructor: Guidance on Implementing Sequestration under the Medicare Fee-for-Service Program

This week’s note from the instructor is written by Judith Kares, JD, CPC, regulatory specialist for HCPro, Inc.

A number of hospitals and other providers have been asking CMS for additional guidance on the practical aspects of implementing “sequestration” under the Medicare program.  Sequestration, as enacted under the Budget Control Act of 2011 (the “Budget Control Act”) and subsequently amended by the American Taxpayer Relief Act of 2012 (the “Taxpayer Relief Act”), calls for mandatory across-the-board reductions in Federal spending.  These reductions specifically include a two percent reduction in payments for Medicare Fee-for-Service (FFS) claims with dates of service or dates of discharge on or after April 1, 2013.

Historical Background

As all of us are aware, Congress has been kicking the can down the road with respect to addressing a number of financial challenges, including growing national deficits (among them deficits arising from the growing cost of health care services).  Presumably, in an effort to force itself to do so, Congress enacted the Budget Control Act.  Under the Budget Control Act, a Joint Select Committee on Deficit Reduction (the “Joint Committee”) was established and specifically tasked with developing recommendations to reduce the deficit significantly over a period of ten years.  They were to report back to Congress with their recommendations by November 23, 2011.  Congress was then required to consider the Joint Committee’s recommendations by December 23, 2011.

If the Joint Committee failed to refer agreed upon legislation to Congress or did not meet the required savings threshold set out in the Budget Control Act, a sequestration process would be put into effect, government-wide, to reduce Federal outlays by the proposed amount.  Instead of blanket across-the-board cuts to all programs, the Budget Control Act imposed exemptions from the sequestration process. Certain programs, such as Social Security and Medicaid, were to be exempt altogether. Any cuts to Medicare were to be limited to no greater than 2% of the program’s costs, and any such cuts were to come primarily from payments to providers.

Unfortunately, the Joint Committee failed to report the requisite recommendations for deficit reduction. Under the Budget Control Act as originally enacted, this failure would have resulted in the sequestration process starting automatically, effective February 1, 2013 through January 31, 2022. Congress, however, subsequently passed The Taxpayer Relief Act in 2012, which postponed the start of sequestration from February 1, 2013 to April 1, 2013, and the President issued a sequestration order to that effect on March 1, 2013.  Nevertheless, the current Administration continues to urge Congress to take prompt action to address the current budget uncertainty and the economic hardships imposed by sequestration.

Practical Guidance on Implementing Sequestration

As noted above, a number of hospitals and other providers have been asking CMS for additional guidance on the practical aspects of implementing “sequestration” under the Medicare program.  After researching CMS’ responses to various inquiries, it appears that CMS is primarily referring them to the various Medicare Administrative Contractors (MACs) for more specific answers to their questions.  The MACs, including Noridian Administrative Services, LLC (Noridian), which is currently the MAC for Jurisdictions 3 and 6, have been providing this guidance in the form of multiple pronouncements under the title “Mandatory Payment Reduction in the Fee-for-Service Program–‘Sequestration’.”  These publications generally follow a user-friendly Q&A format and are available on the indvidual MAC Websites.  A prime example is an update issued by Noridian on April 22, 2013, which can be found at the following Website:  https://www.noridianmedicare.com/p-meda/mandatory_payment_reductions_in_the_in_the_medicare_fee_for_service_program_sequestration.html.

The remainder of this Note will provide a summary of general and specific guidance from various MACs on implementation of sequestration under the Medicare FFS Program.

Timing/Effective Dates of Current Sequestration Order

The current sequestration order signed by the President on March 1, 2013, covers all Medicare FFS payments for services with dates of service or dates of discharge (or a start date for rental equipment or multi-day supplies) April 1, 2013, through March 31, 2014.

Under sequestration, Medicare FFS claims with dates-of-service or dates-of-discharge on or after April 1, 2013, will incur a 2 percent reduction in Medicare payment. Claims for durable medical equipment (DME), prosthetics, orthotics, and supplies, including claims under the DME Competitive Bidding Program, will be reduced by 2 percent based upon whether the date-of-service, or the start date for rental equipment or multi-day supplies, is on or after April 1, 2013.  Any claims for rental payments with a “FROM” date of service on or after April 1, 2013, will be subject to the 2% reduction, regardless of when the rental period began. On the other hand, the initial and subsequent monthly rental payments billed with a “FROM” date of service beginning on or prior to March 31, 2013 would not be affected by the 2% reduction.

To prevent making overpayments, CMS has also recently directed the MACs to reduce interim and pass-through payments related to the Medicare cost report by 2 percent. Beginning April 1, 2013, the 2 percent reduction will be applied to Periodic Interim Payments (PIP), Critical Access Hospital (CAH) and Cancer Hospital interim payments, and pass-through payments for Graduate Medical Education, Organ Acquisition, and Medicare Bad Debts.

Scope of FFS Items and Services Subject to Sequestration

According to the MACs, all FFS Medicare claims payments are subject to the 2% reduction. There are no exemptions provided in the law for drugs or any other health care item or service provided under the FFS program. As noted above, the 2% reduction also applies to certain interim payments payable under the FFS program.

Calculation of Sequestration Reduction

Payment adjustments required under sequestration are applied to all claims after determining the Medicare payment amount, including application of the current fee schedule, coinsurance, any applicable deductible, and any applicable Medicare Secondary Payment adjustments. All fee schedules, Pricers, etc., are unchanged by sequestration. It is only the final payment amount that is reduced by 2%.

Calculation for Assigned Claims

The following example illustrates application of the sequestration reduction to the approved Medicare payment amount for an assigned claim:

A provider bills a service with an approved amount of $100.00, and $50.00 is applied to the deductible. A balance of $50.00 remains. Medicare normally would pay 80% of the approved amount after the deductible is met, which is $40.00 ($50.00 x 80% = $40.00). The patient is responsible for the remaining 20% coinsurance amount of $10.00 ($50.00 – $40.00 = $10.00). However, due to the sequestration reduction, 2% of the $40.00 calculated payment amount is not paid, resulting in a payment of $39.20, instead of $40.00 ($40.00 x 2% = $0.80).  Please note that the beneficiary’s deductible and coinsurance liability for this assigned claim is not affected by sequestration.

Calculation for Unassigned Claims

Medicare’s payment to beneficiaries for unassigned claims, however, is subject to the 2% sequestration reduction. The non-participating physician who bills on an unassigned basis collects his/her full payment from the beneficiary, and Medicare reimburses the beneficiary the Medicare portion (e.g., 80% of the reduced fee schedule amount. [NOTE: The "reduced fee schedule" refers to the fact that Medicare’s approved amount for claims from non-participating physicians/practitioners is 95% of the full fee schedule amount]). This reimbursed amount to the beneficiary would be subject to the 2% sequestration reduction, just like payments to physicians on assigned claims. Both are claims payments, but to different parties. If the Limiting Charge applies to the service rendered, physicians/practitioners cannot collect more than the Limiting Charge amount from the beneficiary.

The following example illustrates application of the sequestration reduction to the approved Medicare payment amount for an unassigned claim:

A non-participating provider bills an unassigned claim for a service with a Limiting Charge of $109.25. The beneficiary remains responsible to the provider for this full amount. However, sequestration affects how much Medicare reimburses the beneficiary. The non-participating fee schedule approved amount is $95.00 (assuming that the otherwise approved Medicare amount is $100), and $50.00 is applied to the deductible. A balance of $45.00 remains. Medicare normally would reimburse the beneficiary for 80% of the approved amount after the deductible is met, which would be $36.00 ($45.00 x 80% = $36.00). However, due to the sequestration reduction, the $36.00 calculated payment amount is reduced by 2%, resulting in a payment of $35.28, instead of $36.00 ($36.00 x 2% = $0.72), to the beneficiary.

CMS encourages physicians, practitioners, and suppliers who bill unassigned claims to discuss with their Medicare patients the impact of the sequestration reductions to Medicare payments.

Reporting the Sequestration Reduction

Claim adjustment reason code (CARC) 223 is used to report the sequestration reduction on the Remittance Advice (RA).  CARC 223 is defined as “Adjustment code for mandated Federal, State or local law/regulation that is not already covered by another code and is mandated before a new code can be created.”

For institutional Part A claims, the adjustment is reported on the RA at the claim level. For Part B physician/practitioner claims and institutional provider outpatient claims, the adjustment is reported at the line level.

Continuing Guidance

Hospitals and other providers are encouraged to check with their local contractors for new updates, as well as additional guidance and clarification on the practical application of sequestration to the Medicare Program.

Connolly posts twelve new issues across six categories

Connolly posted twelve new issues across six categories to its CMS approved list for providers in Region C. (See link for individual state applicability.)

According to the Connolly website, the new issues are:

For Comprehensive Outpatient Rehab Facility (CORF) claims:

• Postpayment Review – Manual Medical Review of Therapy Claims Above the $3,700 Threshold (CORF) – C002592013. In accordance with The American Taxpayer Relief Act of 2012 (ATRA) signed into law by President Obama on January 2, 2013, postpayment reviews will be conducted on Comprehensive Rehabilitation Facility claims (CORF) reaching the $3,700 threshold for PT and SLP services combined and/or $3,700 for OT services.

For Outpatient Rehab Facility (ORF) claims:

• Postpayment Review – Manual Medical Review of Therapy Claims Above the $3,700 Threshold (ORF) -C002582013. In accordance with The American Taxpayer Relief Act of 2012 (ATRA) signed into law by President Obama on January 2, 2013, postpayment reviews will be conducted on Outpatient Rehabilitation Facility claims reaching the $3,700 threshold for PT and SLP services combined and/or $3,700 for OT services.

For home health:

• Postpayment Review – Manual Medical Review of Therapy Claims Above the $3,700 Threshold (HH) – C002572013. In accordance with The American Taxpayer Relief Act of 2012 (ATRA) signed into law by President Obama on January 2, 2013, postpayment reviews will be conducted on Home Health claims reaching the $3,700 threshold for PT and SLP services combined and/or $3,700 for OT services.

For SNF claims:

• Postpayment Review – Manual Medical Review of Therapy Claims Above the $3,700 Threshold (SNF) -C002562013. In accordance with The American Taxpayer Relief Act of 2012 (ATRA) signed into law by President Obama on January 2, 2013, postpayment reviews will be conducted on Skilled Nursing Facility claims reaching the $3,700 threshold for PT and SLP services combined and/or $3,700 for OT services.
• SNF Level of Care Review – C000982013. While a 3-day stay in a psychiatric hospital satisfies the prior hospital stay requirement, institutions that primarily provide psychiatric treatment cannot participate in the program as SNFs. Therefore, a patient with only a psychiatric condition who is transferred from a psychiatric hospital to a participating SNF is likely to receive only non-covered care. In the SNF, the term “non-covered care” refers to any level of care, which is less intensive than the SNF level of care, which is covered under the program.
• SNF Level of Care Review – C000972013. While a 3-day stay in a psychiatric hospital satisfies the prior hospital stay requirement, institutions that primarily provide psychiatric treatment cannot participate in the program as SNFs. Therefore, a patient with only a psychiatric condition who is transferred from a psychiatric hospital to a participating SNF is likely to receive only non-covered care. In the SNF, the term “non-covered care” refers to any level of care, which is less intensive than the SNF level of care, which is covered under the program.
• SNF Coding Validation – C000422013. We will review claims submitted by SNFs to determine the extent to which the Minimim Data Set (MDS) is accurate and supported by the resident’s medical records. Upon receipt of the requested documentation, the entire benefit period will be reviewed to determine the appropriate level of care. (Medical Necessity will not be included in this review)
• SNF Coding Validation – C000412013. We will review claims submitted by SNFs to determine the extent to which the Minimim Data Set (MDS) is accurate and supported by the resident’s medical records. Upon receipt of the requested documentation, the entire benefit period will be reviewed to determine the appropriate level of care. (Medical Necessity will not be included in this review)

For outpatient hospital claims:

• Postpayment Review – Manual Medical Review of Therapy Claims Above the $3,700 Threshold (OP) -C002492013. In accordance with The American Taxpayer Relief Act of 2012 (ATRA) signed into law by President Obama on January 2, 2013, postpayment reviews will be conducted on outpatient hospitals claims reaching the $3,700 threshold for PT and SLP services combined and/or $3,700 for OT services.
• Non-Covered use of Arpetitant (J8501) – Outpatient Hospital – C001212013. Coverage for aprepitant (J8501) is predicated by its use as the three drug combination of aprepitant, a 5-HT3 antagonist and dexamethasone, and must be used in conjunction with one or more specified chemotherapuetic agents.

For carrier claims:

• Postpayment Part B Review – Manual Medical Review of Therapy Claims Above the Threshold (Carrier) – C002512013. In accordance with The American Taxpayer Relief Act of 2012 (ATRA) signed into law by President Obama on January 2, 2013, postpayment reviews will be conducted on outpatient hospitals claims reaching the $3,700 threshold for PT and SLP services combined and/or $3,700 for OT services.
• Mohs Surgery with Pathology billed by different provider – C003122012. Mohs micrographic surgery used for removal of complex or ill-defined skin cancer requires physicians to act in two integrated but separate capacities: surgeon & pathologist. If either surgery or pathology is delegated to another physician who reports services separately, Mohs codes should not be reported since they include both the excision and the pathology services.

CMS releases additional guidance on Part A to B rebilling

This week’s note from the instructor is written by Debbie Mackaman, RHIA, CHCO, regulatory specialist for HCPro, Inc.

• For electronic submissions:  Providers are instructed to place the appropriate (pre-authorized) code above into Loop 2300 REF02 (REF01 = G1). Please note, the loop and segment are included for billing purposes, but only SPN65 needs to be present in the field:
  • REF*G1*SPN65~
    • The original denied inpatient claim (CCN/DCN/ICN) number shall be included in the Billing Notes loop 2300/NTE (NTE01 = ADD) in the format: NTE*ADD*12345678910999~
• For DDE or paper claims:Providers are instructed to use fields 5/MAP1715 (for DDE) or first line of the Treatment Authorization field #63 (for paper) and the following format:
  • SPN65 
    • The original denied inpatient DCN/CCN/ICN shall be added to the Remarks Field (form locator #80) on the claim.

Under the temporary instructions, most hospitals will be paid at 90% of the usual payment amount that would be due to them for TOB 12X if they had originally submitted the claim as an outpatient claim. This partial payment is made based on the OPPS Pricer amount or the lab fee schedule amount after subtracting the beneficiary’s unmet deductible and any coinsurance amounts. Maryland Waiver hospitals will be paid their 90% amount based on the outpatient payment that would have been available if the claim was originally paid as an outpatient claim.

When calculating the expected payment, hospitals need to be aware that CMS will apply this temporary payment methodology at the claim level rather than at the line level. After July 1, contractors will notify providers through their usual methods that they will perform a mass adjustment for all TOB 12X claims that were previously processed under the temporary 90% payment methodology and at that time, providers will receive full payment. When using this temporary billing method, hospitals will receive their regular payment for the outpatient services that are billed on the TOB 13X. This includes those outpatient services provided in the three-day payment window on the day of admission and prior to the inpatient admission including provider-based clinic visits, emergency department visits and observation services.

While hospitals are in the process of identifying claims that meet the rebilling criteria and using the temporary payment methodology, they should not forget to comment on the proposed rule that may eliminate the current exception for timely filing. Comments must be submitted by 5:00 pm on May 17^th to be considered by CMS.

CMS continues to provide updates on the Medicare and Medicaid EHR Incentive Programs

Editor’s note: Judith Kares, JD, CPC, regulatory specialist for HCPro, Inc., is the author of this week’s note from the instructor.

To keep eligible professionals, hospitals and critical access hospitals (CAHs) informed on the Medicare and Medicaid Electronic Health Record Incentive Programs (the “EHR Incentive Programs”), CMS has recently added two new Frequently Asked Questions (FAQs) and an updated FAQ to the CMS FAQ Database.

These EHR Incentive Programs are intended to provide incentive payments to eligible professionals, eligible hospitals and CAHs as they adopt, implement, upgrade and demonstrate meaningful use of certified EHR technology.

Under applicable regulations, an electronic health record (EHR)—sometimes called an electronic medical record (EMR)—allows healthcare providers to record patient information electronically instead of using paper records. Since EHRs are often capable of doing much more than just recording information, the EHR Incentive Programs encourage providers to use the capabilities of their EHRs to identify and analyze relevant patient data—including the establishment of appropriate benchmarks–that can lead to improved patient care, as well.

Although most hospitals will be able to receive a payment from both programs, eligible professionals must choose which program in which to participate. Only those professionals who meet the applicable program requirements as set out below would be eligible to receive incentive payments under that incentive program.

Eligible professionals under the Medicare EHR Incentive Program include:

• Doctor of medicine or osteopathy
• Doctor of dental surgery or dental medicine
• Doctor of podiatry
• Doctor of optometry
• Chiropractor

Eligible professionals under the Medicaid EHR Incentive Program include:

• Physicians (primarily doctors of medicine and doctors of osteopathy)
• Nurse practitioner
• Certified nurse-midwife
• Dentist
• Physician assistant who furnishes services in a Federally Qualified Health Center of Rural Health Clinic that is led by a physician assistant.

In addition, hospital-based eligible professionals are not eligible for incentive payments. An eligible professional is considered hospital-based if 90% or more of his or her services are performed in a hospital inpatient (Place Of Service code 21) or emergency room (Place Of Service code 23) setting.

For relevant eligibility information, hospitals and CAHs are encouraged to visit the Eligible Hospital Information page available at CMS’ official EHR website.

Here are the two new EHR FAQs recently added to the CMS FAQ Database:

FAQ8035. Can attestation information submitted for the EHR Incentive Programs be updated, changed, cancelled or withdrawn after successful submission in the EHR Registration and Attestation System?

A. If an eligible professional (EP) or hospital participating in the Medicare EHR Incentive Program chooses to change or withdraw their attestation, an attestation amendment form or incentive payment attestation withdrawal form must be completed and sent back along with any incentive payments already received.

Medicare Attestation Amendment Form:
https://www.cms.gov/Regulations-and-Guidance/Legislation/EHRIncentivePrograms/Downloads/Attestation_Amendment_Form_2012-08-17.pdf.

Medicare Incentive Payment Withdrawal Form:
https://www.cms.gov/Regulations-and-Guidance/Legislation/EHRIncentivePrograms/Downloads/Medicare_EHR_Incentive_Withdrawal_Final.pdf.

An EP or hospital wishing to change or withdraw their attestation in the Medicaid EHR Incentive Program should contact their state directly to make this request.

Please note that the Centers for Medicare and Medicaid Services (CMS) do not require providers who relied on flawed software for their attestation information to submit amended attestation data. For additional information, please see FAQ#6097.

FAQ8037.Can eligible professionals (EPs) or eligible hospitals round their patient volume percentage when calculating patient volume in the Medicaid EHR Incentive Program?

A. To participate in the Medicaid EHR incentive program, EPs are required to demonstrate a patient volume of at least 30% Medicaid patients over a 90-day period in the prior calendar year or in the 12 months before attestation. The Centers for Medicare and Medicaid Services allow rounding 29.5% and higher to 30% for purposes of determining patient volume. Similarly, pediatric patient volume may be rounded from 19.5% and higher to 20%. Finally, acute care hospitals are required to demonstrate a patient volume of at least 10% Medicaid patients over a 90-day period in the prior fiscal year preceding the hospital’s payment year or in the 12 months before attestation. Hospitals’ patient volume may be rounded from 9.5% and higher to 10%.

FAQ7817.How can an EP that is new to a practice meet the patient volume/practice predominantly criteria to be eligible for the Medicaid EHR Incentive Program?

A. There are three ways an EP could meet the patient volume/practice predominantly criteria to potentially qualify for an incentive payment. For illustrative purposes, assume the EP in the below example joined the practice in 2013:

• Next year (2014), after the EP establishes his/her own 90-day patient volume period as an EP from the prior calendar year (2013) or 12-month period prior to attestation, if this option is allowed by his/her state.
• This year (2013), if he/she is part of a group using the group patient volume proxy and it is appropriate to include him/her (i.e., he/she see Medicaid patients*). It is not a requirement that he/she was in the group for the period that is the basis for the proxy. However, using the group patient volume proxy is distinct from whether an EP practices predominantly in a Federally Qualified Health Center (FQHC) or Rural Health Center (RHC). To meet the “practice predominantly” criterion, an EP must use individualized data; there is no group proxy (see below bullet).
• If the EP is working in an FQHC or RHC, next year (2014), after the EP practiced predominately in his/her the FQHC/RHC for at least 6 months. The EP could then use either individual or group proxy needy individual patient volume. FQHCs/RHCs using the group proxy must follow the regulations, including ensuring all EPs in the clinic use the proxy, and counting only encounters associated with the clinic (not an EP’s outside encounters).

Each state has a method to determine whether or not an EP is considered hospital-based. Generally, the state uses data from the prior fiscal or calendar year to make this determination.

*Note that it is within the state’s discretion to require validation of an EP’s status as a Medicaid provider in the form of a paid encounter from the previous year. If the EP is new to practicing medicine (e.g., a recent graduate of an appropriate training program), he/she is not required to provide such information.

Additional information on the EHR Incentive Programs is continually being added to and updated on the official CMS Medicare and Medicaid EHR Incentive Programs website. Interested providers are encouraged to visit that website from time to time for more recent updates.

Manual medical review by Recovery Auditors of outpatient therapy claims begins April 1

This week’s note from the instructor is written by Debbie Mackaman, RHIA, CHCO, regulatory specialist for HCPro, Inc.

During the last quarter of 2012, hospital outpatient departments temporarily fell under the therapy caps and manual medical review provisions as required under the Middle Class Tax Relief and Job Creation Act. On January 2, 2013, the American Taxpayer Relief Act revised those provisions that impacted outpatient therapy services, including those provided in hospital outpatient departments for services furnished between January 1 and December 31, 2013.

• Private therapy practices and physician offices;
• Part B Skilled Nursing Facilities;
• Home Health Agencies (TOB 034X);
• Outpatient Rehabilitation Facilities (ORFs) and Comprehensive Outpatient Rehabilitation Facilities (CORFs);
• Hospital Outpatient Departments (TOB 013X including TOB 012X); excluding CAHs.

Critical access hospitals (CAHs) will not be included in applying the payments caps to their outpatient therapy services or reporting the –KX modifier; however, the therapy visits provided at a CAH will count towards all other providers’ therapy payment caps. In other words, if a patient is seen at a CAH and receives physical therapy that Medicare pays $1,000 for, those services will count toward another hospital’s payment cap if the patient transfers care or starts a new episode of care at another facility in the same calendar year. Of interest is that the CMS representative on the recent March Rural Health Open Door Forum stated that CAHs will be considered for inclusion in the therapy caps in 2014 through the proposed rule making process.

The manual medical review provision of the law affects therapy claims that exceed $3,700 threshold cap for PT and SLP services combined and a separate one for OT services. Although the manual medical review provision has been in place with dates of service beginning January 1, 2013, some MACs put this process on hold until further notice. CMS has announced that effective April 1, 2013, Recovery Auditors (RA) will review all therapy claims which have exceeded the $3,700 threshold cap for the year. Although PT and SLP services are combined for triggering the threshold, the medical review will be conducted separately for each discipline.

Recovery Auditors will conduct both prepayment and post payment reviews when services exceed the threshold cap.

• Recovery Audit Prepayment Review Demonstration will be conducted in eleven states -FL, CA, MI, TX, NY, LA, IL, PA, OH, NC, and MO. The claims will be reviewed and compared to the medical record before the claim is processed for payment whenever the $3,700 threshold cap is met.

• The ADR will be sent to the provider by the MAC with instructions to send the records to the RA who will then have 10 business days after receiving the medical record to conduct the prepayment review. The provider will receive a review results letter describing the RA’s findings and their determination.

• The remaining states will fall under post payment review by RAs for all therapy claims that reach the $3,700 threshold cap. The request for medical records will occur immediately after the claim has been processed for payment.

• CMS did not indicate a separate timeframe for completion of the post payment review outside of the current RA process; however, if the RA determines than an improper payment has been made, a demand letter will be sent to the provider from the MAC who will initiate the take back.

• For both prepayment and post payment reviews, the current medical record request limits will not apply to therapy services since they are based on a payment cap. All therapy claims that hit the cap will fall into review outside of the usual RA ADR limits.

Keep in mind that all providers must report the National Provider Identifier (NPI) on the claim form of the physician or non-physician practitioner who is responsible for reviewing the therapy plan of care to prevent claims from being rejected and further delaying payment. Additional guidance on the therapy payment cap and manual medical review can be found on the CMS Therapy Cap web page.

Performant Recovery posts four new issues across three categories

Performant Recovery added four new issues across three categories—Two for outpatient hospital claims, one for physician/nonphysician practitioner claims, and one for DME claims—to its CMS-approved list for providers in Region A. (See link for individual state applicability).

For DME claims

• Osteogenesis stimulators – JA. Potential incorrect billing occurred when claims for Osteogenesis Stimulators were billed without an ICD-9-CM code supporting medical necessity and without all other required criteria described in NHIC’s Local Coverage Determination (LCD) L11501 and related article (A35349).

For hospital outpatient claims

• Cardiovascular nuclear medicine – J13. Potential incorrect billing occurred for claims billed with ICD-9-CM codes that are not listed by National Government Services (NGS) Local Coverage Determination (LCD) L26859 (related article A46181) as medically necessary.
• Nerve conduction studies (NCS) – Maximum units- J13. Potential incorrect billing occurred for claims reporting CPT codes 95900 and 95904 for units in excess of what is medically necessary per utilization guidelines outlined in National Government Services (NGS) Local Coverage Determination (LCD) L26869 and related article A51823.

For physician/nonphysician practitioner

• Nerve conduction studies (NCS) – Maximum units- J13. Potential incorrect billing occurred for claims reporting CPT codes 95900 and 95904 for units in excess of what is medically necessary per utilization guidelines outlined in National Government Services (NGS) Local Coverage Determination (LCD) L26869 and related article A51823.