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Connolly posts two new issues in two categories

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

According to the Connolly website, the new issues are:

For outpatient hospitals:

·        Incorrect Billing of Hydration Therapy – OP – C003932013. Providers are billing hydration therapy with diagnosis codes that are not considered reasonable and medically necessary per applicable LCDs.

For physicians:

·        Incorrect Billing of Major Joint Replacement Procedures – Carrier – C004142013. Overpayments were identified where ICD-9 codes billed were not in accordance with billing requirements outlined in Local Coverage Determinations.

Update on laboratory billing: New 2-midnight guidance

This note from the instructor is written by Kimberly Hoy Baker, JD, a regulatory specialist for HCPro.

In this  note, I wanted to briefly update you on the billing issues that Debbie Mackaman, RHIA, CHCO, regulatory specialist for HCPro, highlighted in the last note and also review some recent updates posted on CMS’ Inpatient Hospital Review site related to the 2-midnight rule.

First, CMS published MLN Matters Article SE1412 this week addressing billing of outpatient hospital laboratory services under the new rules that went into effect in January. As Debbie pointed out in her note, there were issues with hospitals’ use of type of bill (TOB) 14X to bill for separate payment under the Clinical Laboratory Fee Schedule (CLFS) for laboratory services that were not packaged under CMS’ new laboratory packaging policy.  

The new MLN officially announces a modifier, yet to be named, that will be used to bill laboratory services for separate payment on a normal outpatient TOB 13X, rather than on a reference lab TOB 14X. The modifier will be effective back to January, but it will not be implemented until the July OPPS update. Providers have the choice of holding their billing until that time and billing with the modifier for services all the way back to January or billing with the TOB 14X until the modifier is implemented and then switching to the modifier.  

CMS provided special instructions for providers that receive a differential payment for their separately paid laboratory services, such as sole community hospital (SCH) and rural SCH. In order to get the higher payment rate they to which they are entitled, they will have to wait until July to bill their laboratory services on a 13X with the modifier. In the meantime, for laboratory services already billed they will have to cancel and rebill claims in July once the modifier is implemented.

The MLN also provides several billing examples. Providers should review the MLN and consider the alternatives for billing laboratory services pending implementation of the new modifier.

The second update relates to new guidance published February 24 on the Inpatient Hospital Review site, where CMS has posted most of the guidance for the new 2-midnight rule. CMS posted updated versions of all the guidance documents posted there as well as a new document reviewing the status of the probe and educate audits, including examples of some of the errors the MACs have found in audits thus far.

One of the most significant, and awaited, clarifications relates to patients transferred from another hospital. CMS clarified in its guidance to hospitals that the receiving hospital may take into account the time the patient spent at the transferring hospital when determining whether the patient meets the 2-midnight benchmark for admission. The hospital should be careful not to include any wait time or time when care was delayed. CMS stated that review contractors may request records from the transferring hospital to verify time spent there prior to transfer. 

There was also a clarification related to off-campus provider-based emergency departments (e.g., freestanding ED). CMS clarified that when these locations are provider-based facilities, they are like any other department of the hospital and time spent in the freestanding ED prior to admission would count into the 2-midnight calculation in the same manner as time in a traditional ED. However, they did note that the transportation of the patient from the freestanding ED to the hospital for admission would be the responsibility of the hospital (i.e., Medicare would not pay for the transport), noting that it would be similar to the patient moving from the on-campus ED to a specified floor for admission.

Finally, CMS announced that it is requesting the MACs re-review denials made in the probe and educate audits to this point. CMS wants the MACs to be certain that any denials are consistent with the most recent guidance and clarifications issued, particularly related to orders and certification. As a result of a re-review of a denial, the MAC can issue payment without an appeal by the provider if they find the claim is payable in light of the most recent guidance.

Because a claim may be paid as a result of a re-review, CMS encouraged providers to verify with the MAC whether a claim had been “re-reviewed” prior to filing an appeal. CMS is waiving the timely filing requirement of 120 days for appeals of denials for claims with dates of service prior to January 30 (when the most recent order and certification guidance was updated) and is allowing appeals to be submitted through September 30, 2014, for those denials if they are not overturned on re-review. 

I encourage providers to review the most recent guidance as there were several other minor revisions and updates. 

 

Performant posts one new issue

Performant Recovery posted three new issue in to its CMS list for providers in Region A. (See link for individual state applicability.)

According to the Performant website, the new issue is:

For DME suppliers:

  • High Frequency Chest Wall Oscillation Devices – Jurisdiction A. Potential incorrect billing occurred when claims for high frequency chest wall oscillation devices were billed without an indication supporting medical necessity as described in the NHIC Local Coverage Determination (LCD) L12870 and related article (A25231).

 

Note from the instructor: Billing Outpatient Laboratory Services – TOB 131 vs. TOB 141

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

Since the implementation of the calendar year (CY) 2014 Outpatient Prospective Payment System (OPPS) final rule, there has been much confusion and discussion regarding the requirement to bill certain outpatient lab services on Type of Bill (TOB) 141 rather than TOB 131. Under the new OPPS packaging rules, reimbursement for most outpatient lab services is bundled into other separately payable services on the outpatient claim, excluding molecular pathology.

As of January 1, 2014, date of service, CMS expanded the use of TOB 14X to allow separate billing and payment at Clinical Laboratory Fee Schedule (CLFS) rates for hospital outpatient laboratory tests. However, this change is not only counterintuitive for facilities, it also creates major operational issues.

Historically and by definition, TOB 14X is for non-patient (specimen only) lab services where the patient does not receive outpatient services on the same date of service. Prior to January 1, 2014, the non-patient lab services were easy for hospitals to identify and systematically direct the claim to process under TOB 141. Under the new billing guidance, hospitals have had to create back-end processes and in some cases, separate review by staff to identify if the outpatient lab should be billed on TOB 141 to receive separate reimbursement under the “exceptions” guidance provided by CMS.

According to the Medicare Claims Processing Manual Transmittal 2845, lab tests may be (or must be for a non-patient specimen) billed on a 14X claim in the following circumstances:
  1. Non-patient laboratory specimen tests; non-patient continues to be defined as a beneficiary that is neither an inpatient nor an outpatient of a hospital, but that has a specimen that is submitted for analysis to a hospital and the beneficiary is not physically present at the hospital;
  2. Beginning in 2014, when the hospital only provides laboratory tests to the patient (directly or under arrangement) and the patient does not also receive other hospital outpatient services during that same encounter; and
  3. Beginning in 2014, when the hospital provides a laboratory test (directly or under arrangement) during the same encounter as other hospital outpatient services that is clinically unrelated to the other hospital outpatient services, and the laboratory test is ordered by a different practitioner than the practitioner who ordered the other hospital outpatient services provided in the hospital outpatient setting. In this case the lab test would be billed on a 14X claim and the other hospital outpatient services would be billed on a 13X claim.

In addition to the operational and compliance concerns that have been created under this new guidance, another issue surfaced. A former student, Melinda McCaslin of Solders + Sailors Hospital in Wellsboro, Pa., raised the question regarding the rural sole community add-on payment that certain hospitals receive when lab is billed on TOB 131. If the hospital must bill their “lab only” or “unrelated lab” on TOB 141, the add-on payment may not be triggered which could be a significant reduction in revenue depending on outpatient lab volumes. Although CMS stated in the OPPS final rule that the application of the rural adjustment for rural sole community hospitals would remain the same and that some APCs had been recalibrated to accommodate this change, it would appear that billing certain outpatient lab under TOB 141 would prevent the add-on payment from being generated as this bill type is only paid under the CLFS. McCaslin later confirmed that their hospital was not receiving their additional payment in these types of situations.

I inquired with CMS in regards to what appeared to be a lack of payment for the rural sole community adjustment for lab. After several emails back and forth, it was alluded that there may be a change in this OPPS policy in the near future. The CMS representative indicated that the use of a modifier on TOB 131 may replace the requirement to report outpatient lab on TOB 141. Shortly after the response I received from CMS, a letter was posted to the National Uniform Billing Committee (NUBC) website that indicated this change may be forthcoming.

I found several of the NUBC’s statements in the January 21 letter to CMS worthy of noting:
  • “…writing on behalf of the members of the National Uniform Billing Committee (NUBC) to express our concern about a recent Centers for Medicare & Medicaid (CMS) action that alters the official definition and purpose of an NUBC data element (as indicated in the Official UB-04 Data Specifications Manual (UB-04 Data Set)).“
  • “Unless the situation is corrected, the NUBC plans on filing a HIPAA complaint with CMS OESS for failure to adhere to the HIPAA standards.”
  • “Even if CMS had done so, the rule making process is not applicable to an external code list that is not within the purview of CMS to arbitrarily change. The NUBC has a change request process that CMS, in this instance, did not follow.”

CMS provided a written response to the NUBC February 18 and indicated that it has requested a modifier to be created for “lab only” and “unrelated lab” situations and that hospitals would be directed to return to billing under TOB 131 once the modifier was approved. This modifier would be retroactive to January 1, 2014, dates of service; however, CMS indicated in its letter to the NUBC that billing instructions to hospitals would probably not be published until the July quarterly OPPS update transmittal.

Hospitals should continue to bill using TOB 141 until CMS provides further instruction. At this time, it is unknown if hospitals will need to rebill certain TOB 141 claims using the new modifier or if the MACs will reprocess these claims for them. Based on the issues discussed above, it is my best guess that providers will be responsible to rebill claims because MACs will not be able to identify which labs are truly non-patient services appropriately billed on TOB 141 and those that are truly outpatient labs that had previously been billed on TOB 131. Stay tuned!

Connolly posts three new issues in three categories

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

According to the Connolly website, the new issues are:

For inpatient services:

  • Medical Necessity: Percutaneous Transluminal Angioplasty – OP – C004332013. Percutaneous Transluminal Angioplasty (PTA) involves inserting a balloon catheter into a narrow or occluded blood vessel to recanalize and dilate the vessel by inflating the balloon. The objective of PTA is to improve the blood flow through the diseased segment of a vessel so that vessel patency is increased and embolization is decreased. PTA is covered for certain conditions as outlined in CMS medical policies. Medical documentation will be reviewed to determine if the percutaneous transluminal angioplasty was reasonable and necessary for the patient.

For physician services:

  • Medical Necessity: Percutaneous Transluminal Angioplasty – Carr – C004322013. Percutaneous Transluminal Angioplasty (PTA) involves inserting a balloon catheter into a narrow or occluded blood vessel to recanalize and dilate the vessel by inflating the balloon. The objective of PTA is to improve the blood flow through the diseased segment of a vessel so that vessel patency is increased and embolization is decreased. PTA is covered for certain conditions as outlined in CMS medical policies. Medical documentation will be reviewed to determine if the percutaneous transluminal angioplasty was reasonable and necessary for the patient.

For outpatient hospitals:

  • Medical Necessity: Percutaneous Transluminal Angioplasty – OP – C004332013. Percutaneous Transluminal Angioplasty (PTA) involves inserting a balloon catheter into a narrow or occluded blood vessel to recanalize and dilate the vessel by inflating the balloon. The objective of PTA is to improve the blood flow through the diseased segment of a vessel so that vessel patency is increased and embolization is decreased. PTA is covered for certain conditions as outlined in CMS medical policies. Medical documentation will be reviewed to determine if the percutaneous transluminal angioplasty was reasonable and necessary for the patient.

 

CGI posts two new issues

CGI posted two new issues in one category to its CMS list for providers in Region B. (See link for individual state applicability.)

According to the CGI website, the new issues are:

For professional services:

  • Excessive Units of Hospital Visits – NGS.  Both Initial Hospital Care codes (CPT codes 99221 – 99223) and Subsequent Hospital Care codes (CPT Codes 99231 – 99233) are “per diem” services and may be reported only once per day by the same physician(s) of the same specialty from the same group practice.
  • PF Observation Care Billed with Discharge Services on Same Day – J6 (NGS). An issue exists where discharge services have been reported incorrectly with Observation Services on the same date of service. This automated review will identify the incorrect reporting of discharge services when billed on the same day as an Observation Service for a beneficiary.

 

Performant posts one new issue

Performant Recovery posted one new issue to its CMS list for providers in Region A. (See link for individual state applicability.)

According to the Performant website, the new issue is:

For DME suppliers:

  • High Frequency Chest Wall Oscillation Devices – Jurisdiction A. Potential incorrect billing occurred when claims for high frequency chest wall oscillation devices were billed without an indication supporting medical necessity as described in the NHIC Local Coverage Determination (LCD) L12870 and related article (A25231).

 

Performant posts one new issue

 

Performant Recovery posted one new issue to its CMS list for providers in Region A. (See link for individual state applicability.)

According to the Performant website, the new issues are:

For DME suppliers:

·        Spinal Orthoses: Thoracic Lumbar Sacral Orthoses (TLSO) and Lumbar Sacral Orthoses (LSO) – Jurisdiction A. Potential incorrect billing occurred when claims for spinal orthoses (TLSO and LSO) were billed without an indication supporting Medical Necessity as described in the NHIC Local Coverage Determination (LCD) L11470 and related article (A23663).

Performant posts one new issue

Performant Recovery posted one new issue to its CMS list for providers in Region A. (See link for individual state applicability.)

According to the CGI website, the new issues are:

For ambulance providers:

  • Skilled Nursing Facility (SNF) to SNF Transfer- JK. Ambulance claims for SNF to SNF transfers (modifier NN) are not separately payable under Part B when a beneficiary is in a Part A covered SNF stay. The SNF discharging the beneficiary to another SNF is financially responsible for the transportation fees. Ambulance providers should seek payment from the transferring SNF.

Note from the instructor: Lab billing details in the January 2014 OPPS update

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

Last week, CMS released MLN Matters article MM8572 with billing instructions for laboratory services paid under either OPPS or the Clinical Laboratory Fee Schedule (CLFS). Prior to this guidance, I had received several questions from clients and past students regarding rural sole community hospital (SCH) add-on payments for lab services. Several weeks ago, I had requested clarification from CMS and the response that I received last week with the release of this article only generated more questions and I am waiting for further clarification.

According to the OPPS Final Rule (78 Fed. Reg. 74832), the 7.1% upward adjustment will continue to be paid for all services paid under OPPS, excluding separately payable items such as drugs, biologicals, and devices. Historically, rural SCHs also received an add-on payment for lab paid under the CLFS amount (fee schedule amount/0.6 X 0.62). As of January 1, 2014, the lab status indicator has been changed from “A” to “N” to indicate the lab is packaged into other separately payable services on the same claim, excluding molecular pathology. Upon further review of the rule, Table 55 (78 Fed. Reg. 75180-183) demonstrates how APC payments for SCHs were recalibrated to accommodate labs that are now packaged when billed on TOB 13X.

According to the CMS guidance, in calendar year 2014 the use of Type of Bill (TOB) 14X has been expanded to allow separate billing and payment at CLFS rates for hospital outpatient laboratory tests. Laboratory tests may be (or must be for a non-patient specimen) billed on TOB 14X in the following circumstances:

  • For non-patient laboratory specimen tests when the beneficiary does not receive other hospital services on the same day and is not physically present at the hospital; or,
  • When the hospital only provides outpatient laboratory tests to the patient and the patient does not also receive other hospital outpatient services during that same encounter; or,
  • When the hospital provides a laboratory test during the same encounter as other hospital outpatient services that is clinically unrelated to the other hospital outpatient services and the laboratory test is ordered by a different practitioner than the one who ordered the other hospital outpatient services.

Unfortunately, when following this guidance using TOB 14X, the add-on payment is not triggered for SCHs. I have recently received confirmation from a hospital that they, in fact, did not receive the add-on payment for their outpatient lab services appropriately billed on TOB 141. The financial impact for rural SCHs is yet to be determined and will highly depend on the volume of “outpatient lab only” that had traditionally been billed on TOB 131 but are now required to be billed on TOB 141. One of the problems that SCHs may encounter is how to identify a non-patient lab from an outpatient lab when they are billed on the same bill type. SCHs should put a system into place now to track this issue if their volume warrants monitoring potential changes in revenue.

Note: Although the release date on the related Medicare Claims Processing Manual Transmittal 2845 is December 27, 2013, I did not see a notice that this was published until MM8572 was available on January 14, 2014. All PPS hospitals should review the transmittal for other outpatient billing instructions related to the major changes impacting them with dates of service January 1, 2014.