Author Archive for Debbie Mackaman

CMS Announces the 2010 Medicare Premiums and Deductibles

CMS recently announced the CY2010 Medicare Part A deductible for inpatient hospital services. When a patient is admitted as an inpatient, the deductible will increase from $1,068 in 2009 to $1,100 in 2010. In addition, beneficiaries will pay an additional daily coinsurance of $275 for days 61 through 90 and $550 for lifetime reserve days. For 2009, the corresponding amounts are $267 and $534, respectively.

The majority of Medicare beneficiaries do not have to pay a premium for Part A inpatient services. This is based on their previous Medicare-covered employment history or because they are a spouse or widow(er) of a covered beneficiary.  However, a small percentage of beneficiaries will see an increase of $18 on their monthly premium to $451 per month for 2010.  In some cases, beneficiaries will qualify to pay a reduced premium based on employment coverage and their monthly premium will be $254 in 2010.

CMS also announced that the Part B deductible will increase to $155 based on an annual percentage increase index. Unfortunately, the Social Security Administration also announced that there would be no increase in Social Security benefits for 2010.  Medicare Part B monthly premiums cover a portion of the cost of outpatient hospital services, physicians’ services, certain home health services, durable medical equipment, and other items.  In 2010, most Medicare beneficiaries (approximately 73%) will not see an increase in their monthly premiums as a result of a “hold harmless” provision in the current law. These beneficiaries will pay the same monthly premium that they paid in 2009 at $96.40.  The other 27 percent of beneficiaries that are not protected by the hold-harmless provision because they are new Medicare enrollees during the year or because they are subject to premiums based on their income or other factors will pay the increased premium of $110.50.  The Administration continues to urge Congress to take actions that would protect all beneficiaries from higher Part B premiums and eliminate the inequity between these two groups.

More detailed information can be found in the October 22 Federal Register and related fact sheet.

Recent OIG Reports and Medical Review Implications

In last week’s post, we looked at the OIG Work Plan for Fiscal Year 2010. There were many issues listed for both Part A and Part B that will be on the radar for a targeted review. Hospitals are encouraged to closely examine the OIG Work Plan as part of their annual compliance program review process.

In addition, reviewing OIG audits can help hospitals and physicians identify some challenging areas within their own operations. This week, CMS published Transmittal 574 that focused on four recent OIG reports:

• Part B Chemotherapy Administration Payment and Policy;
• Prevalence and Qualifications of Nonphysicians Who Perform Medicare Physician Services;
• Inappropriate Medicare Payments for Chiropractic Services; and,
• Part B Billing for Ultrasound.

In these reports, the OIG presented their findings and made recommendations for CMS to reduce the Medicare program’s vulnerability with regards to questionable claims. This transmittal directs all contractors – Carriers, Fiscal Intermediaries (FI), and Medicare Administrative Contractors (MAC) – to review the information contained in the OIG reports and begin to analyze claims data for these areas. If the contractor’s findings indicate potential problems with their providers and suppliers, they have been directed to take the appropriate action, which may include automated prepayment edits and/or pre- and post-payment reviews.

Hospitals should review this transmittal and the related OIG reports to identify any issues that may need to be addressed as soon as possible. Staying abreast of the OIG audit reports is necessary in today’s regulatory environment. These reports can help guide a facility’s compliance activities, help identify processes that may need correction and prevent recoupments in the future.

Condition Code 44 – The Next Chapter

After CMS issued Transmittal 1803, we have continued to receive questions on the correct way to bill for outpatient services when Condition Code 44 criteria have been met. The next chapter of the story involves determining if and when observation begins.

After the provider has documented that Condition Code 44 requirements have been met and is able to “roll back” the patient’s status from inpatient to outpatient, the outpatient regulations begin to apply. According to Chapter 1 of the Medicare Claims Processing Manual, when the hospital has determined that it may submit an outpatient claim, the entire episode of care should be billed on a 13x or 85X type of bill for the services that were ordered and furnished during that period of time. However, in order to bill for medically reasonable observation services, the provider must obtain a timed and documented physician’s order. Because there wasn’t an actual order for observation at the time the patient was admitted as an inpatient, the provider cannot begin counting observation hours until one is obtained. The order for observation is not “retroactive” back to the time of the original inpatient admission order.

In a July 13 MedicareMentor post, we included an email clarification from National Government Services (NGS) confirming the need for and the timing of the observation order. After receiving inquiries from its providers, Noridian Administrative Services also sent out a notification on September 24 confirming this.

This is the example that was given: Patient A was admitted at noon on Sunday. On Monday afternoon it was determined that the patient didn’t meet inpatient criteria, the physician concurred, and the status was changed to outpatient. The outpatient status is considered to have begun at noon on Sunday. However, observation hours cannot be billed until the physician has written an order for observation. If the order was written at 2 p.m. on Monday, the hospital would begin the observation hours at that time. No observation can be charged between noon on Sunday and 2 p.m. on Monday.

In light of the previous RAC focus on observation billing, we encourage all providers to review the regulations and their current processes. Providers should contact their FI/MAC with any questions that they may have to ensure that observation hours are being billed correctly when condition code 44 is being submitted.

CMS clarifies RACs’ “exception authority”

On September 11, CMS published Transmittal 302 that updated the Program Integrity Manual on Local Coverage Determination (LCD) exceptions. When specific authorized contractors conduct a complex medical review, they have the authority (in rare and unusual circumstances) to apply an exception to the “reasonable and necessary” requirements described in an LCD to approve or deny a claim.  However, they cannot make exceptions to National Coverage Determinations (NCDs). In addition, and unless otherwise directed by CMS, RACs can only use the exceptions process to not deny a claim.  This is a good time to review the difference between a national and a local coverage determination policy.

NCDs are coverage policies created by CMS for an item or service to be applied on a national basis for all Medicare beneficiaries. NCDs help ensure that access to advances in technologies that may improve healthcare are available to Medicare beneficiaries when those items and services are “reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member”. However, NCDs may also be used to bar payment for specific items or services that are not “reasonable and necessary”.

LCDs are determinations made by a fiscal intermediary, carrier, or Medicare Administrative Contractor (MAC) in regards to whether or not a particular item or service is covered on an intermediary-, carrier-, or MAC-wide basis. LCDs specify the circumstances under which a service is generally considered to be “reasonable and necessary” to assist providers in submitting correct claims for payment. Medicare contractors develop LCDs when there is no NCD or when there is a need to further define an NCD. The contractors must make sure that all LCDs are consistent with all statutes, rulings, regulations, and national coverage, payment, and coding policies. In addition, codes describing what is covered and what is not covered can be part of the LCD; however, coding guidelines are not elements of LCDs.

It will be important for providers to understand where to locate and how to use an NCD and/or LCD during the RAC review and appeal processes. More information on draft, current and retired NCDs can be found in the MedicareFind database or on the CMS web site. CMS requires all draft, final (active), and retired LCD information to be posted to each contractor’s website.

Florida RAC Reviews See a New Issue Emerge

Connolly Healthcare, the recovery audit contractor (RAC) for Region C, posted its CMS approved audit issues list for Florida last week.  Connolly had previously posted its issues list for South Carolina; however, when comparing the lists between the two states, there is a slight difference.  Although bronchoscopy services were approved for South Carolina, this issue has not been approved for Florida.

In contrast, a new issue has made its way to the audit list for Florida.  Clinical social worker (CSW) services provided during an inpatient stay at a hospital or a skilled nursing facility (SNF) are not separately payable under Medicare Part B.  When these services are provided by a professional who meets the definition of a CSW and is legally authorized under state law to provide that service, the CSW provider must seek reimbursement directly from the facility. Under their respective prospective payment systems, the facilities have already received reimbursement for these services in their payment. The Medicare Benefit Policy Manual, Chapter 15, Section 170 and MLN Matters SE0439 provide guidance for the proper billing of these services.

This audit issue would fall under the RAC’s automated review process since the Common Working File could identify those patients who were an inpatient in either a hospital or a SNF during the same date of service when social work services were billed to Medicare Part B. Providers who have billed Medicare Part B for CSW services provided to inpatients may want to review their processes.

CMS announces a coverage determination on the “screening virtual colonoscopy”

On August 7, CMS issued transmittal R105NCD to implement its decision to maintain non-coverage of computed tomography colonography (CTC) for colorectal cancer screening, also known as a “virtual colonoscopy.” In 2008, the medical community had recommended that CMS consider coverage of this exam for screening purposes in specific individuals. After performing its own review, CMS has determined that the current medical evidence is inadequate and that no national coverage determination (NCD) is appropriate at this time.

Currently, Medicare beneficiaries can receive one of the following colorectal cancer screening tests:

• Fecal occult blood test (guaiac-based or immunoassay-based) once every 12 months;
• Flexible sigmoidoscopy once every 4 years depending on risk factors;
• Screening colonoscopy once every 10 years for patients without a known risk;
• Screening colonoscopy once every 2 years for patients at high risk for colorectal cancer;
• Barium enema every 4 years as a substitute for a flexible sigmoidoscopy;
• Barium enema every 2 years as a substitute for a screening colonoscopy for high risk patients.

Since CMS has determined that screening CTCs are non-covered for dates of service on and after May 12, 2009, a signed ABN is not required to be able to bill the patient for the service. However, under the revised ABN instructions, it can be used to inform the patient in advance of their financial responsibility.

More information on covered colorectal cancer screening services can be found in the Medicare Claims Processing Manual, Chapter 18, and the Medicare Benefit Policy Manual, Chapter 1.

Inpatient Prospective Payment System (IPPS) Final Rule Announced

On July 31, 2009, CMS issued the IPPS final rule announcing the changes that will affect the payment rates and related policies for acute care hospitals and long-term care hospitals that are paid under the prospective payment system. The changes are effective for discharges beginning on October 1, 2009 which is the start of the government’s fiscal year for 2010 (FY2010).

In the proposed rule, there were concerns that the payment rate update of 2.1% minus the documentation and coding adjustment (DCA) of 1.9% were going to leave the annual increase for hospitals flat in the midst of a declining economy.  The final rule brought some good news in that the payments are actually projected to increase by $1.9 billion for IPPS hospitals.

With the adoption of MS-DRGs in FY2008, the diagnosis and the severity of the patient’s illness were reflected in the payment structure.  Ultimately, physician documentation needed to improve in order for the coder to assign the most specific and appropriate MS-DRG for reimbursement related to the intensity of those services used to treat the patient.   In anticipation that documentation would improve overall, thereby causing increased reimbursements to hospitals, Medicare statutes required CMS to make “adjustments” to the annual inpatient rates to prevent excess spending in the Medicare program.  For FY2010, CMS had proposed the 1.9% DCA to offset that anticipated increased spending.  However, based on public comments and the fact that CMS could not definitely determine that FY2009 spending was either higher or lower than projected based on those documentation and coding improvements, CMS chose not to make any DCA adjustment at all to the FY2010 rates.  This change and several other adjustments have projected that the IPPS payments will increase by $1.9 billion during the upcoming fiscal year.

This is good news for many hospitals that are struggling; however, keep in mind that after the FY2009 documentation and coding improvement information has been analyzed by CMS, adjustments will probably be forthcoming.  Facilities who have effective clinical documentation improvement programs in place should continue their efforts and those who do not have one in place should seriously consider it.  The lack of a DCA adjustment this fiscal year could help some hospitals put some “money in the bank” in preparation for future adjustments.

“Voluntary Refunds” to MACs/FIs

Many providers are taking a proactive approach to the arrival of the Medicare Recovery Audit Contractors (RAC) and performing their own audits. Using the RAC “hot topics,” providers are using those audit outcomes to understand their risks, to change internal processes regarding areas of concern and to return reimbursements for claims that were found to be paid in error.

Once a self audit has been performed and if an improper payment has been identified, what should be the provider’s next steps? CMS Frequently Asked Question (FAQ) #9503 was updated last week to clarify the process of notifying the RAC on self audit outcomes.  If an improper payment related to a specific claim is identified, the provider should report their findings to their Medicare Administrative Contractor (MAC) or their Fiscal Intermediary (FI) if their transition to a MAC has not been completed.

A “voluntary refund” based on the specific claim can be made and the MAC/FI will make the appropriate adjustment. For details regarding the required claim information that is necessary to complete a voluntary refund, contact your local MAC/FI.  According to CMS, the “RAC will be aware of the adjustment, but the refund does not preclude future review.” Providers should create an internal process to identify any claims that have been processed as a voluntary refund.

Critical access hospitals and billing for non-patient laboratory testing

In a May 12 post, clarification was given regarding a “non-patient” and reference laboratory testing.  Continuing with this discussion, critical access hospitals (CAH) also received good news in Transmittal 1729 to the Claims Processing Manual, dated May 8, 2009.  Under Section 148 of MIPPA (Medicare Improvements for Patients and Providers Act), a CAH will be paid 101% of reasonable cost for outpatient clinical diagnostic laboratory tests for those patients who are not physically present in the CAH at the time the specimen is collected.  These patients are referred to as “non-patients” since only a specimen is received for the date of service.  Prior to this transmittal, all hospitals providing laboratory services to “non-patients” were instructed to bill on Type of Bill (TOB) 14X which triggered reimbursement under the Clinical Laboratory Fee Schedule. [more]