All Entries in the "OPPS" Category
More on deductibles and coinsurance
CMS recently published the Part A deductible and coinsurance and Part B deductible amounts for CY 2010. For most covered inpatient stays, as well as covered outpatient services, Medicare does not pay the entire Medicare allowable for those stays or outpatient services. Beneficiaries generally are responsible for a portion of the Medicare allowable in the form of deductibles and/or coinsurance.
Under Part A, Medicare beneficiaries are entitled to 90 regular benefit days per benefit period. Regular benefit days renew whenever a new benefit period begins. That is, a patient once again has 90 covered inpatient days every time a new benefit period begins. Medicare beneficiaries are also entitled to 60 lifetime reserve days, which may be used after regular benefit days for that benefit period have been exhausted. Lifetime reserve days do not renew. Once used, they are gone forever.
A benefit period begins with the first day on which a patient is admitted to an inpatient hospital or a SNF to receive services. That benefit period continues until there is a 60-consecutive-day period during which the patient is not an inpatient in either a hospital or a SNF. (With respect to the latter, the benefit period does not close as long as the patient is receiving skilled care as an inpatient in the SNF.)
For the first 60 covered inpatient days during a benefit period, the beneficiary is responsible for one inpatient deductible. The applicable inpatient deductible is the one in effect during the calendar year in which that benefit period begins. For inpatient covered days 61-90, the beneficiary is responsible for a daily coinsurance amount equal to 25% of the applicable inpatient deductible. If a beneficiary exhausts (uses up) his regular benefit days, he may then draw upon any remaining lifetime reserve days. For each lifetime reserve day, the beneficiary is responsible for a daily coinsurance amount equal to 50% of the applicable inpatient deductible. With respect to the coinsurance calculation, the coinsurance amount is based on the deductible applicable for the calendar year in which the coinsurance days occur.
The following is an example of how these rules would apply to an inpatient stay that begins in December of one year (2009) and ends during the following year (2010):
Assume that this was the first inpatient admission during the benefit period and that the beneficiary remained in the hospital for 61 covered days. Because the benefit period began in 2009, the deductible for 2009 (the year in which the benefit period began) would be applied, in the amount of $1068.00. This is the only amount for which the beneficiary would be liable for the first 60 covered days. He would then be responsible for an additional single day’s coinsurance for day 61, in the amount of $275.00, which is the coinsurance amount for covered days occurring during 2010. Thus the beneficiary’s total liability for this stay would be $1343.00.
Hospitals are advised to assure that applicable deductible and coinsurance amounts are applied to each inpatient stay, particularly those that cross over from one calendar year to another.
Signature for Laboratory Tests, Clarification in the MPFS Final Rule
This week, I would like to review a “clarification” regarding physician signatures on orders for clinical diagnostic testing that came out in the Final Rule for Payment Policies under the Physician Fee Schedule and Other Revisions to Part B for 2010. This blog is hospital-directed and we do not normally report on physician fee schedule issues, however, this “clarification” could affect hospital policies on obtaining signatures for the laboratory services they provide.
In the proposed rule published in August, CMS solicited comments on the issue of signatures on clinical diagnostic lab test orders, and a distinction they were drawing between test orders and lab requisitions. In the final rule, CMS reviewed their policy and the comments they received on that policy.
As part of their “clarification” in the proposed rule, CMS reviewed the history of Federal Register and manual guidance on the requirement for signatures on lab requisitions and orders. The issue was first discussed in the clinical lab negotiated rule making final rule on coverage and administrative policies, published November 23, 2001 in the Federal Register. In that rule, CMS indicated that lab tests must be ordered by a physician treating the patient, but that a signed requisition from the physician was not the only way to document that order. However, in the 2010 final rule “clarification” they also state that at the time of the 2001 publishing, they “implicitly left in place the existing requirements for a written order to be signed by the ordering physician”.
After the 2001 rule, in implementing manual sections in Transmittal AB-02-030 they reiterated the statement that a signature is not required on requisitions. They go on to say that another way of documenting the order for these services would be for the ordering physician to document the order in the patient’s medical records. The applicable regulations at 42 CFR 410.32 also do not require the entity submitting a claim for clinical laboratory service to maintain the physician’s order, but do allow for additional information to be requested. They also require that the billing entity be able to provide on audit “documentation of the order for the service billed (including information sufficient to enable CMS to identify and contact the ordering physician or nonphysician practitioner). ” (emphasis added)
These statements were incorporated into the paper-based Carriers Manual via Transmittal R1787B3 published in 2003. Highlighted in red text is the statement “NOTE: No signature is required on orders for clinical diagnostic tests paid on the basis of the physician fee schedule or for physician pathology services.” When CMS transitions to the internet-only manuals this section was inadvertently left out, however CMS added it back in Transmittal 94 to the Benefit Policy Manual in 2008. The new language in the Benefit Policy Manual states that it also applies to tests paid based on the clinical lab fee schedule.
The language in the manual seems clear regarding signatures on lab test orders, however, CMS points out in their clarification that the change in terminology from “requisition” in the 2001 rule to order in the manual was inadvertent. They continue to reiterate that they do not require a signature on a lab requisitions as they view them as administrative in nature, but a signature on a lab requisition could qualify as a physician order. They go on to point out, notwithstanding the clear manual text, that it is their longstanding policy that a written order for diagnostic tests must be signed by the ordering physician. They also cite the Conditions of Participation and Joint Commission standards as having signature requirements in their medical records standards.
This leaves us in the strange situation that the manual, through several transmittals and iterations, says no signature is required for lab orders. But we have a preamble discussion that says in effect ‘we didn’t really mean that’ and CMS stating their longstanding policy is to require signatures on lab orders which was suppose to be implicit in their statements about not requiring a signature on requisitions.
This led to many very good comments. Several of these CMS deferred to future rule making or indefinitely, simply stating they would consider the comment. Some responses were quite vague. For instance, a commenter asked if the requisition did not need to be signed and the documentation of the order could be maintain instead in the physician’s medical record, how was the lab suppose to verify its existence, especially in light of the urgency of testing degrading samples or the need to immediately perform tests. CMS’ response what simply that the regulation allows for the billing entity to request additional documentation from the physician without further explanation about when the entity should obtain this documentation, etc.
Due to the confusion raised by this issue, I would expect that it will be raised on the next hospital open door forum and will be the subject of more clarification in the near future. In the meantime, I encourage providers to review the discussion in the final rule. The discussion begins on page 939 of the display copy of the rule. Additionally, the provider may wish to inquire with their MAC as to specific standards the MAC may be applying and their rationale for their policies in light of the clarification.
On a personal note, for those of you wondering why you haven’t seen a note from me in a while, I was off having a baby. Zoey Mae was born August 4th and is doing well but still keeping her mom awake at nights. Her and I enjoy sitting up and reading all that interesting reading material CMS seems to like to putting out. Glad to be back!
CMS issues 2010 final rule for ambulatory surgery centers and most hospital outpatient departments
CMS has released a display copy of the outpatient prospective payment system (OPPS) final rule for 2010, which also includes the 2010 changes to the rules for ambulatory surgery centers (ASCs). This final rule will be published in the Federal Register on November 20. In terms of reimbursement, OPPS hospitals that meet quality indicator reporting requirements for 2010 are entitled to the “full update,” which will result in a 2.1% increase in their payments for 2010. Those OPPS hospitals that do not meet their quality indicator reporting requirements will be subject to a reduced update of 0.1% in 2010. ASCs, on the other hand, will receive a 1.2% inflation update beginning January 1, 2010.
Among the most anticipated changes in the OPPS final rule are the so-called “incident to” a physician’s services requirements. Most nonphysician outpatient therapeutic services that are provided by hospitals or critical access hospitals (CAHs) are only covered if they are provided “incident to” the services of a physician or another specified nonphysician practitioner.
During the last few years, CMS has made several changes to the “incident to” rules. Prior to 2009, for example, such services had to be provided on the order of a physician. In 2009, CMS expanded the practitioners qualified to meet the order requirement to include clinical psychologists, licensed clinical social workers, physician assistants, nurse practitioners, clinical nurse specialists and certified nurse-midwives (the “NPPs”). In that same year, however, CMS clarified that, in order to be covered, such services must be provided under the supervision of a physician or clinical psychologist who is “on the premises” and immediately available. On the premises was defined as “present in the provider-based department.”
The latter revision prompted considerable response from the hospital community, which ultimately resulted in the following changes to the therapeutic “incident to” rules. These changes were announced in the OPPS 2010 final rule and will become effective for services provided on and after January 1, 2010.
In order to be covered, most therapeutic outpatient hospital and CAH services furnished incident to a physician or nonphysician practitioner must be furnished
- By or under arrangements made by the hospital or CAH;
- On the order of a physician or one of the specified NPPs;
- As an integral though incidental part of a physician’s or nonphysician practitioner’s services;
- In the hospital or CAH or in a provider-based department of the hospital or CAH; and
- Under the direct supervision of a physician or one of the specified NPPs (which includes the same nonphysician practitioners as those permitted to order such services); nonphysician practitioners may directly supervise services they are permitted to provide themselves within the scope of their licensure and hospital-granted privileges, assuming they otherwise meet all Medicare conditions of participation and related requirements.
In general, for services furnished in the hospital or CAH or in an on-campus provider-based department of the hospital or CAH, “direct supervision” means that the physician or nonphysician practitioner must be present on the same campus and must be immediately available to furnish assistance and direction throughout the procedure. It does not mean that he or she must be present in the room where the procedure is performed. “In the hospital or CAH” means areas in the main buildings of the hospital or CAH that are under the ownership, financial and administrative control of the hospital or CAH; that are operated as part of the hospital or CAH; and for which the hospital or CAH bills the services furnished under the hospital’s or CAH’s CMS Certification Number.
For services furnished in an off-campus provider-based department of the hospital or CAH, “direct supervision” means the physician or nonphysician practitioner must be present in the off-campus provider-based department and must be immediately available to furnish assistance and direction throughout the procedure. It does not mean that he or she must be present in the room where the procedure is performed.
Please note, however, there is an exception for pulmonary rehabilitation, cardiac rehabilitation and intensive rehabilitation services, wherever these services are provided. For these services, direct supervision must be furnished by a doctor of medicine or osteopathy, whether provided in the hospital or CAH or in an on- or off-campus provider-based department of the hospital or CAH.
Please also note that these most recent revisions do not become effective until January 1, 2010. Prior existing rules will be effective through December 31, 2009. Hospitals and CAHs are advised to review these updated “incident-to” rules, and to make such modifications to existing policies and procedures as necessary to assure that they are in compliance with these changes, effective for dates of service on and after January 1, 2010.
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.
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.
Condition code 44 – The continuing saga
On Friday, CMS issued Medicare Claims Processing Manual (MCPM) transmittal 1803, which is the October 2009 update to the Outpatient Prospective Payment System (OPPS). CMS included minor revisions to those sections of Chapter 1 of the MCPM that relate to condition code 44.
As you will recall, condition code 44 is used when a patient’s initial inpatient status is successfully changed to outpatient for purposes of billing and payment. This generally occurs when case management and other utilization review personnel were not available (weekends and holidays) at the time that the admission decision was made, and it is later determined that the patient does not meet Medicare’s inpatient guidelines. Condition code 44 is reported on the subsequent outpatient (013X) type of bill that is submitted to recover for the services provided in the inpatient setting.
Those inpatient services are covered and reimbursed on the same terms and conditions as if they actually had been provided in the outpatient setting, so long as all of the following criteria are met:
- The decision to change status must be made by the hospital’s “utilization review committee” (UR committee). One “member” of the UR committee can make the decision, with the attending physician’s agreement; in all other cases, the decision must be made by at least two “members.” The change in status must be made prior to discharge or release of the patient and before the hospital has submitted a claim for the inpatient admission;
- A physician must concur with the decision;
- The physician’s concurrence must be documented in the patient’s medical record; and
- The UR committee must provide written notice to the hospital, the patient and the patient’s physician within two days (but not later than the patient’s discharge or release from the hospital) of the change and its impact on the patient, including financial liability for applicable deductible and coinsurance amounts.
In the transmittal issued on Friday, CMS stated that although one physician member of the UR committee is empowered to make the decision to change status, the physician member who makes the decision must be different from the concurring physician, who is the physician responsible for the care of the patient. Based upon this most recent statement, it is not clear what the effect would be if the physician responsible for the care of the patient did not concur with the change in status.
The regulations that set out the hospital’s conditions of participation (CoP), which call for the establishment of a UR committee, along with the scope of its responsibility and authority (including change of status), indicate that, in all other circumstances, the change in status decision must be made by two members of the UR committee. Presumably, this is the procedure that a hospital should follow if it were unable to obtain the agreement of the patient’s physician to change the status of care from inpatient to outpatient.
Hospitals are encouraged to have at least two signatures on the documentation for the change in status: (1) when the attending physician concurs, signatures of both the attending physician and the physician member of the UR committee who made the change in status decision; or (2) when the attending physician does not concur, signatures of the two physician members of the UR committee who made the decision to change status.
Hospitals are also encouraged to confirm with their FI/MAC that the process as outlined above, particularly when the patient’s physician does not concur, meets the requirements of a condition code 44 change in status.
More on condition code 44 and observation
We have received many questions on the articles we have published on the counting of hours of observation in cases where condition code 44 is used to convert an inpatient to an outpatient after UR review. A couple weeks ago I wrote about this issue following contact by a National Government Services representative, encouraging providers to contact their local MAC for more information.
I recently received some further clarification from National Government Services and wanted to update you. As you know, I’ve advised that hospitals should not be counting the time between the inpatient order and the change to outpatient status as observation – rather, I said, the observation time should begin with the change in status to outpatient when the observation order is written (assuming the appropriate level of care). NGS’ recent clarification, confirmed to me in an email exchange, is as follows:
As you are aware, the recent regulation changes resulted in many questions. We received confirmation from our CMS representative that indeed, a written order for observation status is required and that the inpatient stay can not be converted to observation time when CC 44 is applicable. If the physician (or UR committee in conjunction with the physician) deems the patient meets observation criteria after conversion to outpatient status, then observation time may be billed if the level of care is met. But observation time would begin when the order is written; and the previous (although incorrect) inpatient time could not be billed as observation. The services rendered while the patient was placed in inpatient status would be billed as outpatient services, but no observation time could be billed.
NGS is relying on their CMS central office contact for this clarification and not just their individual interpretation. Therefore, if any of you have received conflicting advice from your MAC, I would encourage you to provide them with this information and continue to use caution in billing any hours of observation without a proper order for observation services.
More on the OPPS proposed rule
Earlier this week, I discussed the physician supervision provisions of the CY2010 OPPS proposed rule.
Another section of interest to many providers will be the sections on the new cardiac rehab, intensive cardiac rehab and pulmonary rehab benefits. CMS discusses their implementation of these new benefits added to the Social Security Act by the MIPPA, effective January 1, 2010. Of particular interest is CMS implementation of the MIPPA provision that states that physician supervision for these programs is assumed when provided in a hospital.
Other significant proposals in the rule include a large proposed increase in the OPPS outlier threshold from $1800 to $2,225, the highest the fixed dollar threshold has been since its introduction.
Additionally, a significant portion of the rule was also devoted to payment methodologies for drugs, however, the end resultant proposal for most drugs remains at ASP + 4%. This includes ASP based payment for therapeutic radiopharmaceutical when the statutory cost based payment methodology expires in 2009. CMS did make the submission of ASP data for therapeutic radiopharmaceutical voluntary, and will base rates on CY2008 hospital mean cost data if ASP is not available.
Similarly, brachytherapy sources, which also were under a statutory cost based payment methodology for 2009, will be transitioned to CY2008 hospital mean cost data (the usual method for setting APC rates for other services). CMS is soliciting comments on several of their proposals and I would encourage pharmacy, radiology and chargemaster coordinators to review these proposals carefully and submit comments if they disagree with any of the proposals.
2010 OPPS proposed rule released
This was a busy week, but the biggest news was the somewhat early release of the OPPS proposed rule for 2010. While the rule is about the same number of pages as previous years, the substantive policy changes seem fewer than in the last couple of years.
For instance there were no new composite APCs introduced this year. Additional composite APCs, including cardiac resynchronization therapy, are being considered for future years. However, CMS indicated that in accordance with comments received in response to the previous composite APCs, they were going to study the effects of existing composites on payment and utilization before introducing additional composite APCs.
One of the more important proposals in the rule relates to physician supervision, a topic we have discussed several times. CMS discusses the recent “restatements” and “clarifications” made over the course of the last year and proposes regulatory changes in accordance with some of the comments they have received from many industry groups.
OPPS, MPFS, NCCI developments
You may have heard about two big announcements yesterday from CMS:
We’re still analyzing these changes, but a look at the CMS fact sheet on the OPPS issuance shows some proposals related to the controversial physician supervision issue:
Physician supervision requirements – CMS is proposing to revise or further define several current policies for the physician supervision of outpatient services. First, CMS is proposing that nonphysician practitioners, specifically physician assistants, nurse practitioners, certified nurse specialists, and certified nurse-midwives, may directly supervise all hospital outpatient therapeutic services that they are able to personally perform within their state scope of practice and hospital-granted privileges. Under current policy, only physicians may provide the direct supervision of these services.
In addition, CMS is proposing to define “direct supervision” for on-campus hospital outpatient services to mean that the physician or nonphysician practitioner must be present in the hospital or on-campus provider-based department of the hospital and immediately available to furnish assistance and direction throughout the performance of the procedure, in contrast to the current definition which requires the physician to be present in the on-campus provider-based department. For services furnished in an off-campus provider-based department, “direct supervision” would continue to mean that the physician or nonphysician practitioner must be present in the off-campus provider-based department and immediately available to furnish assistance and direction throughout the performance of the procedure.
Yesterday also brought a change in NCCI edits for the new quarter. Check these out using our special NCCI lookup tool, available to subscribers or free-trial users.
Purchase MedicareFind to start FINDing late-breaking developments like these. You can also try a free trial to test drive the site.
