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Note from the Instructor: More on Medicare Preventive Services

This week’s note from the instructor is written by Debbie Mackaman, RHIA, CPCO, CCDS, regulatory specialist for HCPro.  
A few weeks ago, I wrote an article about billing for preventive services in a rural health clinic (RHC). Since then I have received several questions about preventive services, specifically the Initial Physical Preventive Exam (IPPE) and the Annual Wellness Visit (AWV), which are performed in hospital outpatient departments, provider-based clinics/departments, and freestanding physicians’ offices.

Medicare differentiates between these exams based on eligibility, timing, and the purpose of the visit:
  • The IPPE is an introduction to Medicare and covered benefits, with a focus on health promotion and disease detection. It must be performed within the first 12 months after the effective date of the beneficiary’s Medicare Part B coverage.
  • The AWV is intended for reviewing the patient’s history, risk factors for diseases, and medications. It is also intended to provide personalized health counseling and establish or update a written personalized prevention plan.

Although there are very specific HCPCS codes used to bill for the IPPE (G0402) and the AWV (G0438 initial and G0439 subsequent), Medicare does not require a specific diagnosis code for coverage of these services. The HCPCS code and the frequency in which the services are provided drive the coverage rules.

Hospitals may encounter difficulties with billing and payment when other diagnostic services are ordered in connection with the IPPE or AWV. For example, it is not uncommon for a physician to order laboratory services following these exams and give an ICD-9 diagnosis code in the range of V70.0–V70.9 (general health examination) as the reason for the test. However, the Medicare National Coverage Determinations (NCD) Coding Policy Manual and Change Report, Clinical Diagnostic Laboratory Services (otherwise known as the Lab NCD Manual) lists these diagnosis codes as never covered. If a code from the non-covered section of the manual is provided, the provider may bill the test to the Medicare beneficiary without issuing a mandatory ABN. By reporting the non-covered diagnosis code, it would appear to Medicare that the test was performed for screening rather than diagnostic purposes. Instead, the practitioner or the provider may issue a voluntary ABN to inform the patient of his or her financial liability in the case of a never covered item or service.

Unfortunately, the patients and sometimes the practitioners are under the assumption that the lab services are also covered as part of the IPPE or AWV. While there are several other laboratory preventive services that are covered by Medicare, they also have specific HCPCS codes and frequency limitations and many have specific diagnosis code requirements as well. A list of these tests can be found in the links that follow.
Practitioners who order additional services and the providers who may perform them must be aware of the coverage and billing differences between diagnostic and screening services that may result as a follow up to one of the covered preventive exams. Not only will the provider’s bottom line be affected by incorrectly billing for additional services without a covered diagnosis, but the patient’s out-of-pocket expense will potentially increase.
The following resources provide complete coverage and billing guidance for Medicare preventive services when provided in any setting.

Note from the Instructor: Coverage of prescription drugs under Medicare Parts A, B, C, and D

This week’s note from the instructor is written by Judith L. Kares, JD, regulatory specialist for HCPro.  
During several recent custom and open-registration Medicare Boot Camps-Hospital Version, participants have expressed confusion about coverage of prescription drugs under Medicare Parts A, B, C, and D. Each part of Medicare provides some coverage for prescription drugs, primarily depending upon whether those drugs are medically necessary to care for the condition for which they are prescribed and the setting in which they are provided.

In this note, we will discuss drug coverage available under Parts A, B, and C, including the limitations of such coverage. In a subsequent note, we will focus on Part D, which is the most recently implemented part of Medicare, specifically designed to close some of the gaps in Medicare coverage for prescription drugs. We will also explore the potential for additional coverage for prescription drugs under Part D when those drugs are not covered under other parts of Medicare.

Coverage under Part A
Part A is primarily responsible for inpatient facility services, including services provided to hospital inpatients. Most prescription drugs provided to hospital inpatients during covered Part A days are covered as long as they are “reasonable and necessary” for the care and treatment of the inpatient for whom they are prescribed. Coverage under Part A, however, is generally limited to 90 regular inpatient benefit days per benefit period, during which the beneficiary is only responsible for certain deductible and coinsurance amounts. Each time an old benefit period ends and a new benefit period begins, the beneficiary once again has 90 covered benefit days during that benefit period.

In addition, each beneficiary covered under Part A has 60 lifetime reserve benefit days, during which he or she is only responsible for certain coinsurance amounts. Unfortunately, lifetime reserve days do not renew; once used, they are gone forever.

Coverage under Part B
Coverage of prescription drugs provided to hospital outpatients under Part B is more limited. Generally, outpatient hospital drugs are not covered unless they fall within one of the following three exceptions:
  • Certain categories of outpatient drugs covered by statute;
  • Outpatient drugs that are provided “incident to” a physician’s services and are “not usually self-administered,” as determined by the MAC with jurisdiction for those hospital services; and
  • Certain self-administered drugs if they are an integral component of a procedure, are directly related to it, or facilitate the performance of, or recovery from, the procedure.

Under the first exception, the following categories of outpatient drugs are covered by statute:
  • Blood clotting factors for hemophilia patients;
  • Drugs used in immunosuppressive therapy;
  • Erythropoietin for dialysis patients; and
  • Certain oral anti-cancer drugs and anti-emetics used in certain situations.
Under the second exception, although the MACs are tasked with the responsibility of determining which drugs meet the “incident to” rules and are “not usually self-administered,” Medicare provides the following guidelines:

  • Generally, only those drugs administered by injection, including infusion, are considered to be “not usually self-administered;” and
  • If administered by injection (other than infusion), only those drugs administered by deep, penetrating, intramuscular injection are considered to be “not usually self-administered.”

The MACs are required to report a list of those drugs determined to be “usually self-administered,” and, therefore, not covered, to Medicare. They are also supposed to post that list (referred to as the “Self-Administered Drug” [SAD] list) on their websites.

Medicare continues to stress the limited nature of the third exception. This exception applies only when certain self-administered drugs are an integral component of a procedure, are directly related to it, or facilitate the performance of, or recovery from, the procedure. There is no coverage when the self-administered drug is the treatment itself, regardless of whether it is medically necessary. A prime example would be a hospital emergency room providing insulin to a patient suffering from hyperosmolar hyperglycemic syndrome. Since the patient is an outpatient and the insulin (which is self-administered) is the treatment, rather than an integral component, it would not be covered.

It is important for both hospitals and beneficiaries to understand that Medicare has made a decision to cover only certain drugs provided to hospital outpatients under Part B. That coverage determination is not necessarily related to whether those drugs are medically appropriate for the care and treatment of a specific patient.

Some coverage may also be available under Part B for prescription drugs provided to hospital inpatients when there is no coverage under Part A (e.g., patient is not entitled to Part A or has exhausted Part A inpatient days). Coverage under inpatient Part B is generally on the same terms and conditions as those that would have applied had the services been provided in the outpatient setting.
Coverage under Part C
Medicare, as originally implemented in 1965, only included coverage under Parts A and B. Under “original” Medicare, beneficiaries continue to have broad choice of providers for their Part A (inpatient) and Part B (primarily outpatient) services delivered in the traditional manner. Beginning in the 1980s, Medicare began to provide coverage under Part C, using a variety of managed care, risk-based delivery models. At a minimum, these private entity managed care plans (currently referred to as “Medicare Advantage Plans” or “MA Plans”) must provide coverage for all of the services, including prescription drugs, covered under Parts A and B. In addition, since their inception, MA Plans (and their predecessors) were permitted to offer additional benefits in the form of reduced cost sharing or additional services. Many of them elected to offer expanded outpatient drug coverage.

Since the implementation of Part D on January 1, 2006, many MA Plans are required, or have elected to, provide drug coverage under Part D. An MA Plan that provides drug coverage under Part D is referred to as an MA-PD Plan.

Continuing discussion

As noted above, we will continue this discussion in a subsequent note, focusing on Part D, which is the most recently implemented part of Medicare. Part D was specifically designed to close some of the gaps in coverage for prescription drugs. We will also explore the potential for additional coverage under Part D when certain prescription drugs are not covered under Parts A, B, or C.

In the meantime, you can find additional information in the following source authorities:

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Note from the Instructor: Billing for Preventive Services in a Rural Health Clinic

This week’s note from the instructor is written by Debbie Mackaman, RHIA, CPCO, CCDS regulatory specialist for HCPro.  
I was recently out teaching HCPro’s Rural Health Clinic (RHC) Boot Camp® and we got into a lengthy discussion about billing for a clinic visit with preventive services. Based on our conversation, I thought it might be helpful to examine specific RHC billing issues.

The Rural Health Clinic Services Act of 1977 was passed to assist Medicare patients’ access healthcare in rural areas, where there is a shortage of physicians, and also to increase the use of non-physician practitioners such as nurse practitioners (NP) and physician assistants (PA) in these areas. Approximately 4,000 RHCs nationwide provide access to primary care services in rural areas, according to the CMS Rural Health Clinic Fact Sheet. These RHCs, certified by CMS as such, experience unique billing scenarios.

In general, when a patient is seen by a physician or non-physician practitioner in the clinic or other designated area, most of the services provided will be bundled into one line for charging purposes. The patient will pay the usual deductible amount and 20% of the total charge for their coinsurance portion. However, when certain Medicare preventive services are provided as part of a clinic visit, the charge for the preventive service must be deducted from the total charge for the visit in order for the correct deductible and coinsurance to be applied to the medical visit and appropriately waived for the preventive service. The waiver of the deductible and coinsurance applies to those services recommended by the U.S. Preventive Services Task Force with a grade A or B and those preventive services limited by frequency. CMS has published an updated interactive table of preventive services, which can be found on the Medicare Learning Network website.

In most cases, the RHC will be paid under the all-inclusive rate (AIR) for all services provided to the patient on that particular date of service. The RHC-specific AIR is based on the clinic’s allowable costs reported on the annual cost report. Further consideration must be given to billing if the RHC has been designated as provider-based under the current regulations. This also allows the clinic to be paid its actual AIR without regard to the national limitation amount set by CMS every calendar year.

In the case of a clinic visit and an Initial Preventive Physical Exam (IPPE) occurring on the same date of service, the RHC will be paid two AIRs–one for the clinic visit, which includes most of the charges for the visit and one for the IPPE. The deductible and coinsurance will be waived for the IPPE, and the patient will be responsible for the coinsurance amount for other services billed on the clinic visit line. Let me walk through a simplified example to demonstrate the complexity of billing RHC services.

A patient presents to a provider-based RHC for an IPPE under his Medicare benefit. After the IPPE is completed, the physician also addresses the patient’s chronic fatigue and blood is drawn for a complete blood count (CBC) test to be performed by the hospital laboratory. In an RHC, an E/M code (e.g., 99213) is not reported for non-preventive services, as the level of service does not drive the actual reimbursement. If the venipuncture is performed by the RHC staff, the venipuncture charge is included in the same line with the visit charge. Laboratory services are not included in the AIR and patients usually do not have any out-of-pocket expenses, so they must be billed separately.

Key billing points of this example:
  • The RHC will report the IPPE, medical evaluation, and venipuncture on the UB04 claim form using TOB 0711.
  • The clinic will report the medical portion of the visit (chronic fatigue) with revenue code 0521 without an E/M level on the claim.
  • The clinic will include the venipuncture charge in the line with charge for the medical visit.
  • The patient will pay his remaining Part B deductible and 20% of the total charge for the medical portion of the visit, which includes the evaluation for chronic fatigue and the venipuncture.
  • The clinic will report the IPPE on a separate line using revenue code 0521 and HCPCS G0402 in order to waive the patient’s deductible and coinsurance for the preventive service only.
  • The RHC will receive two AIR payments—one for the medical visit and one for the IPPE performed on the same date of service.
  • The main provider of the provider-based RHC will bill for the laboratory services only on the appropriate bill type (i.e., TOB 031 OPPS or TOB 0851 CAH) and be paid under its associated payment methodology.

The key to compliant billing in this setting is to understand how to bill for non-RHC services and when the patient will be financially responsible for a portion of the visit. In a future article, I will address the difference between billing for independent and provider-based non-RHC services.

Note from the Instructor: Increasing Amounts of Data Available on Providers

This week’s note from the instructor is written by Kimberly Anderwood Hoy Baker, JD, regulatory specialist for HCPro.  

Providers may be surprised at the information that can be easily downloaded about them from the CMS website. This week two fact sheets from CMS announced provider specific data sets available with detailed information on the types of claims and charges submitted to Medicare by hospitals and physicians. These documents show just a sampling of the information available. CMS maintains a website to provide access to Medicare Provider Utilization and Payment Data. The site contains data on inpatient and outpatient hospital charges as well as physician and non-physician provider data, including both charges and prescribing information.

Inpatient hospital data, by specific hospital, is available for the top 100 DRGs by volume. The data includes information on the number of discharges, and averages charges and payments, including total payments from all sources. Individual sites for fiscal years 2011, 2012, and 2013 contain both hospital-specific and national/state aggregate downloadable files, in either Excel or Comma Separated Value files. The data allows providers and others to easily compare hospitals in a specific area or compare a hospital to statewide and national averages.

The inpatient hospital data has been used by media and authors for dramatic effect, tending to focus on charges, which can have a surprisingly small correlation with what providers are paid from government payers. With the increasing use of creative contracting strategies and alternate payment models, charges may also bare little correlation to payments from other insurers either. Unfortunately for uninsured patients, these are the amounts they are billed, although many states have laws that limit the charges to or require discounts for uninsured patients. None of this information is generally taken into account in media articles looking to dramatize the data.

The site also includes data on hospital outpatient charges for 30 common APCs, including minor procedures (e.g., debridements, excisions and biopsies, certain endoscopies and injections), diagnostic tests (e.g., ultrasounds, MRIs, cardiac and pulmonary tests), and clinic visits. Noticeably missing is data on surgical procedures such as vascular procedures, stenting, and pacemakers, which is included in the inpatient data. If outpatient charge and payment information was available for these procedures, it would allow an easier comparison between inpatient and outpatient payments from Medicare for these procedures, which has been very controversial since implementation of the 2-Midnight Rule.

While the hospital data is detailed, the physician data seems almost invasive. It lists the physician’s name, NPI, credentials, specialty, address, and even gender. Files are available for 2012 and 2013 and contain a line for each HCPCS code billed by the provider more than 10 times during the year. For privacy reasons, lines are not included for HCPCS codes billed 10 or fewer times per year. Information for each HCPCS code includes, among other things, allowed amounts, the provider’s average charges, and Medicare payment amounts.

Additionally, a separate site contains files that list each physician and the drugs they have prescribed during 2013 that were paid through Medicare Part D. The file contains a line for each drug prescribed and information such as the number of claims for the drug, number of days supplied, and cost of the drug for all patients as well as for beneficiaries over 65. The file also identifies expenditures for brand name and generic versions of the drug.

The CMS website indicates the data is being made available as part of efforts to “make our healthcare system more affordable and accountable.” However, the detailed level of the data seems to lend itself to abuses. For example, pharmaceutical companies could use the data to market to physicians if the physician’s prescribing pattern indicates higher usage of generic versions or attorneys could use the data in cases against providers to compare them, fairly or unfairly, against other providers. And we’ve already seen the inpatient data used to make dramatic arguments that sometimes did not portray the reality of the financial picture for hospitals. Providers cannot exclude themselves from the data, but they should at least familiarize themselves with the data publicly available about them.

Note from the Instructor: Update on FY 2015 OIG enforcement actions and priorities

This week’s note from the instructor is written by Judith L. Kares, JD,regulatory specialist for HCPro.  
The OIG of the HHS is the primary enforcement arm of the HHS. As stated in the recently released FY 2015 Work Plan Mid-Year Update (the “Update”), the OIG was created to protect the integrity of HHS programs and operations and the well-being of federal healthcare program beneficiaries by doing the following:
  • Detecting and preventing fraud, waste, and abuse;
  • Identifying opportunities to improve program economy, efficiency, and effectiveness; and,
  • Holding accountable those who do not meet program requirements or who violate federal healthcare laws.
In FY 2014, more than 75% of the OIG’s budget was directed at oversight of the Medicare and Medicaid Programs. Periodically, the OIG assesses the resources available and prioritizes the issues to be addressed, primarily by establishing a work plan for each FY, which is reviewed and updated at midyear. The OIG also provides a report to Congress, generally on a semi-annual basis, on its progress to date. The Semiannual Report to Congress (the “Report”) for the first half of FY 2015 was released last week.
In this note, we will focus on key updates relating to services provided to Medicare beneficiaries by hospitals and critical access hospitals (CAH), including recent OIG auditing and recovery activities.
Overview of initiatives relating to hospitals and CAHs included in the Update
The Update continues to divide hospital initiatives into the following previously existing categories (no separate categories for CAHs), and sub-categories, and adds two new initiatives:
Hospital-Related Policies and Practices
  • Reconciliations of outlier payments
  • Hospitals’ use of outpatient and inpatient stays under Medicare’s 2-midnight rule
  • Medicare costs associated with defective medical devices
  • Analysis of salaries included in hospital cost reports
  • Medicare oversight of provider-based status
  • Comparison of provider-based and free-standing clinics
Hospitals—Billing and Payments
  • Inpatient claims for mechanical ventilation
  • Duplicate graduate medical education payments
  • Indirect medical education payments
  • Outpatient dental claims
  • Nationwide review of cardiac catheterizations and endomyocardial biopsies
  • Payments for patients diagnosed with Kwashiorkor
  • Bone marrow or stem cell transplants
  • Review of hospital wage data used to calculate Medicare payments
  • NEW Intensity-modulated radiation therapy
o   The OIG will review Medicare outpatient payments for intensity-modulated radiation therapy (IMRT) to determine whether the payments were made correctly. IMRT is an advanced mode of high-precision radiotherapy that uses computer-controlled linear accelerators to deliver precise radiation doses to a malignant tumor or specific areas within the tumor. To be processed correctly and promptly, a bill must be completed accurately. In addition, certain services should not be billed when they are performed as part of developing an IMRT plan. (See Medicare Claims Processing Manual, Ch. 1, § and Ch. 4, § 200.3.2 for more detailed guidance.)
Hospitals—Quality of Care and Safety
  • Inpatient rehabilitation facilities—Adverse events in post-acute care for Medicare beneficiaries
  • Long-term-care hospitals—Adverse events in post-acute care for Medicare beneficiaries
  • NEW Hospital preparedness and response to high-risk infectious diseases
o   The OIG will describe hospitals’ efforts to prepare for the possibility of public health emergencies resulting from infectious diseases. Several HHS agencies, including the CDC, the Office of the Assistant Secretary for Preparedness and Response (ASPR), and CMS provide resources for hospitals as they prepare. Additionally, the OIG will determine hospital use of HHS resources and identify lessons learned through recent experiences with pandemic or highly-contagious diseases, such as Ebola.

Overview of OIG auditing, enforcement, and other oversight activities relating to hospitals and CAHs
In the Report, the OIG noted several areas of concern relating to hospital and CAH payments, including the following:
  • Reconciliation of hospital outlier payments—Medicare contractors Pinnacle Business Solutions (Pinnacle), Noridian Healthcare Solutions (Noridian), and National Government Services (NGS) did not always refer Medicare cost reports whose outlier payments qualified for reconciliation to CMS. In addition, the three contractors did not always reconcile the outlier payments associated with cost reports whose outlier payments qualified for reconciliation. The financial impact to Medicare of the unreconciled outlier payments and cost reports was approximately $14.4 million (Pinnacle), $31.8 million (Noridian), and $19 million (NGS).
  • Swing-bed usage at CAHs—Medicare spending for swing-bed services at CAHs steadily increased to almost four times the cost of similar services at alternative facilities. Medicare could have saved $4.1 billion over a six-year period at CAHs if swing-bed services were reimbursed using the skilled nursing facility prospective payment system rate (SNF PPS). CAHs ensure beneficiaries in rural areas have access to a range of hospital services. CAHs provide swing-bed services, which are the equivalent of services performed at a SNF. Medicare reimburses CAHs at 101% of their reasonable costs for providing services to beneficiaries rather than at rates set by Medicare’s PPS or Medicare’s fee schedules. Although CMS did not concur, the OIG continues to recommend that CMS seek legislation to adjust CAH swing-bed reimbursement rates to the lower SNF PPS rates paid for similar services at alternative facilities.
  • Beneficiary cost sharing for CAH services—Beneficiaries typically pay more in coinsurance for outpatient services received at CAHs than for outpatient services received at other acute care hospitals. For example, for 10 frequently provided outpatient services at CAHs, beneficiaries paid between two and six times the amount in coinsurance that they would have for the same services at acute-care hospitals. Without a change in how coinsurance for CAH outpatient services is calculated, beneficiaries will continue to pay more for these services. CMS neither concurred nor non-concurred with the OIG’s recommendation to seek legislative authority to modify how coinsurance is calculated for outpatient services received at CAHs.
In other reports of recent auditing activity, the OIG has focused on the following compliance issues:
Outpatient hospital services
  • Improper payments for sleep study services that did not meet Medicare reimbursement requirements;
  • Failure of hospitals to seek credit available against the cost of replacement devices for outpatient services;
  • Failure of hospitals to report credit received against the cost of replacement devices for outpatient services;
  • Billing for excess units/inappropriate use of certain drugs (e.g., Herceptin, Aflibercept); and
  • Inappropriate reporting of modifiers without supporting documentation, resulting in overpayments.
Inpatient hospital services
  • Failure of hospitals to seek credit available against the cost of replacement devices for inpatient services;
  • Failure of hospitals to report credit received against the cost of replacement devices for inpatient services;
  • Upcoding inpatient claims, resulting in higher DRG assignment than justified by the medical record;
  • Incorrectly billing as inpatient under Part A when stay was not reasonable and necessary under inpatient criteria;
  • Billing same-day discharge and related re-admission to same hospital on two separate claims; and
  • Incorrect reporting of diagnosis code for Kwashiorkor, not justified by medical record.
Keeping up with the OIG
If you have not already done so, hospitals and CAHs are encouraged to subscribe to the OIG List Serv, which can be accessed through the link on HCPro’s links page, under “Listserve Subscriptions.” Click here to access HCPro’s links page.

The Hospital Guide to Contemporary Utilization Review: Applying the 2-Midnight Rule to Transfer Patients

Editor’s note: The following is an except from The Hospital Guide to Contemporary Utilization Review, a comprehensive resource designed to identify utilization review (UR) best practices and provide guidance on developing and enhancing a contemporary UR committee. The book includes tips for intradepartmental collaboration to guide professionals through the process of selecting a physician advisor and partnering with nurses, case managers, and revenue cycle team members.
The 2-midnight rule also changes the way patient transfers are handled. If a patient requires hospital care that is expected to require more than two midnights, but the plan at the time of admission to the originating hospital is to transfer the patient to another facility prior to the second midnight, he or she should be placed as outpatient with observation services at the initial hospital. If the patient requires hospital care at the originating hospital that is expected to exceed two midnights and the initial plan is to care for the patient at the original hospital but then transfer if his or her condition deteriorates, the patient should be admitted as inpatient. If the patient is subsequently transferred, even within hours of admission, the billing status remains inpatient based on the initial plan.
The UR specialist in access management at the receiving hospitals should now consider any medically necessary midnights spent at the transferring hospital (including time spent emergency department at the sending hospital) and the number of anticipated midnights at their institution when making the decision on the proper status. For example, if a patient spent two or more midnights at the transferring hospital and is transferred for a procedure that may not require another midnight (i.e., a cardiac catheterization after a myocardial infarction), the UR specialist at the receiving hospital should still recommend inpatient admission. The stay at the receiving hospital may not pass any midnights, but the rule states the receiving hospital should admit the patient as inpatient. The patient will incur an inpatient deductible for the admission at the first hospital but since the admission to the second hospital is within the 60-day “spell of illness,” there is no deductible for that second admission. It will also not be considered a readmission as part of the CMS’ Hospital Readmission Reduction Program as the index admission will be coded using discharge status 02 (transfer to another acute care hospital), which is not counted as a readmission.
It should also be noted that CMS stated in the 2014 IPPS final rule that it expects providers to clearly document the need for hospitalization, including the risks and their plans for the patient:
The factors that lead a physician to admit a particular beneficiary based on the physician’s clinical expectation are significant clinical considerations and must be clearly and completely documented in the medical record. Because of the relationship that develops between a physician and his or her patient, the physician is in a unique position to incorporate complete medical evidence in a beneficiary’s medical records, and has ample opportunity to explain in detail why the expectation of the need for care spanning at least 2 midnights was appropriate in the context of that beneficiary’s acute condition.
—Medicare Program, 2013

Note from the Instructor: CMS provides additional guidance on chronic care management

This week’s note from the instructor is written by Judith L. Kares, JD, regulatory specialist for HCPro.  
CMS provided updated guidance to hospitals and practitioners on chronic care management (CCM) in two recent releases, both of which can be downloaded from the CMS website:
Although these updates are primarily aimed at physician and non-physician practitioners (NPP), there are also ramifications for outpatient hospital departments and clinics. An important point of clarification is that individuals providing CCM must have 24/7 access to the electronic care plan, rather than the entire medical record.
CMS also responded to a number of requests for additional information in the form of Frequently Asked Questions (FAQ). These FAQs are set out in SE1516 and cover several specific areas, including claims submission, intersection with transitional care management services, and the provision of CCM services in facility settings.


There is a growing awareness and acknowledgment by both CMS and the healthcare community that care management is an important component of primary care, often leading to better outcomes, as well as cost savings. To that end, for dates of service on and after January 1, 2015, Medicare began paying practitioners under the Medicare physician fee schedule (MPFS) for non-face-to-face care coordination services furnished to Medicare beneficiaries with multiple chronic conditions (reported with CPT code 99490).

Overview of FAQs

The remainder of this note will focus on key information relating to CCM services furnished in hospital outpatient settings. For purposes of this discussion, such hospital outpatient settings include hospital outpatient departments, as well as provider-based departments and clinics, and will be referred to generally as “HOPDs.” This information is primarily set out in some of the above-referenced FAQs.

FAQ #18. Are HOPDs eligible to bill CPT code 99490 under the OPPS?
Medicare will pay for CCM facility services (also reported with CPT code 99490) under the OPPS when the requirements in FAQ #19 are met. Since CPT code 99490 is defined as a physician-directed service, Medicare will pay for the CCM facility services only when the hospital’s clinical staff furnishes the services at the direction of the physician/NPP. Separate payment for the physician’s/NPP’s time spent directing CCM services in the HOPD setting is made under the MPFS at the facility rate.

FAQ #19. What are the requirements to bill CCM under the OPPS?
Since CPT code 99490 is defined as a physician-directed service, when the CCM service is furnished in an HOPD, the HOPD may only bill and be paid for the facility portion of CCM services furnished to eligible hospital outpatients under the OPPS if:
  • The hospital’s clinical staff furnishes at least 20 minutes of care management services under the direction of the physician/NPP during the calendar month; and
  • The billing physician/NPP directing the CCM services meets the requirements to bill CCM services under the MPFS set out below:
  1. Patient Eligibility—patient has two or more chronic conditions expected to last at least 12 months or until the death of the patient, placing the patient at significant risk of death, acute exacerbation/decompensation, or functional decline;
  2. Patient Agreement—patient consent to receive CCM services has been obtained by the practitioner and documented in the medical record;
  3. CCM Scope of Service Elements—all applicable Scope of Service Elements (as set out in the MPFS final rules for calendar years (CY) 2014 and 2015) are furnished by the HOPD; and
  4. CCM Certified Technology—the HOPD furnished the CCM services using a version of certified EHR that is acceptable under the EHR Incentive Programs as of December 31 of the CY preceding each Medicare MPFS payment year (referred to as “CCM Certified Technology”). The hospital must also meet the requirements to use electronic technology in providing CCM services, such as 24/7 access to the care plan, and electronic sharing of the care plan and clinical summaries (other than by fax), specified in the MPFS final rules for CYs 2014 and 2015.
FAQ # 20. How does CMS define a “hospital outpatient” for whom a hospital may bill CCM services (CPT code 99490)?

A hospital outpatient is generally defined as a person who has not been admitted by the hospital as an inpatient but is registered on the hospital records as an outpatient and receives outpatient services from the hospital. Since CPT code 99490 will ordinarily not be performed face-to-face, the patient will typically not be a registered outpatient when receiving the service. As noted above, in order to bill for the service, the hospital’s clinical staff must provide at least 20 minutes of facility CCM services under the direction of the billing physician/NPP. Because of the practitioner’s direct relationship with the beneficiary, he or she should inform the patient the hospital will be performing care management services under the practitioner’s direction.
FAQ # 21. When CCM services are furnished by a physician in a hospital outpatient department, can the physician and the hospital both bill Medicare for the CCM services?
When professional CCM services are furnished by a physician/NPP in an HOPD to an eligible patient, the physician/NPP may bill Medicare for payment under the MPFS, reporting CPT code 99490 and place of service 22 (outpatient hospital), which will result in payment at the facility rate. The hospital may also bill Medicare for payment of the facility CCM services under the OPPS by reporting CPT code 99490.
FAQ #23. Is CPT code 99490 payable to provider-based hospital outpatient departments under the hospital OPPS? May a hospital-owned practice that is not provider-based bill the OPPS for CCM services?
A provider-based outpatient department of a hospital is part of the hospital and, therefore, may bill for facility CCM services furnished to eligible patients, provided that it meets all applicable requirements. A hospital-owned practice that is not provider-based is not part of the hospital and, therefore, is not eligible to bill for facility services under the OPPS. The physician/NPP practicing in the hospital-owned practice, however, may bill for payment under the MPFS for professional CCM services furnished to eligible patients, provided all MPFS billing requirements are met.
FAQ # 24. What is the supervision level for facility CCM services furnished in the hospital setting?
CPT code 99490 is assigned a general supervision level under the OPPS when furnished in the HOPD setting. General supervision means the procedure is furnished under the physician's/NPP’s overall direction and control, but the physician's/NPP’s presence is not required during the performance of the procedure. Under general supervision, the training of the non-physician personnel who actually perform the procedure and the maintenance of the necessary equipment and supplies are the continuing responsibility of the physician/NPP.
Interestingly, facility CCM services are considered to be outpatient hospital therapeutic services, which are generally subject to coverage requirements under the facility “incident to” a physician’s services requirements (see 42 CFR §410.27). Under these “incident to” requirements, the default level of physician/NPP supervision is “direct supervision,” which requires the supervising practitioner to be immediately available and able to furnish assistance and direction throughout the performance of the procedure. The decision to assign the lower level of general supervision to CPT code 99490 to facility CCM services was at the initiation of CMS, effective for dates of service on and after January 1, 2015.

Hospitals are encouraged to review the recent releases referenced above for more specific information on professional and facility CCM services.

Note from the Instructor: Improved Edit Resources from CMS

This week’s note from the instructor is written by Kimberly Anderwood Hoy Baker, JD, regulatory specialist for HCPro.  
In last week’s note, Judith wrote about the Medical Unlikely Edits (MUE), one aspect of the National Correct Coding Initiative (NCCI). This week I thought I would take the opportunity to review the new, improved format for another of the NCCI edits, the Procedure to Procedure (PTP) edits. Additionally, CMS has made available an extended Integrated Outpatient Code Editor (IOCE) data file that contains information on many of the other edits applied through the broader IOCE, giving providers even more information on the edits applied to their claims.

Updates to the PTP Edit File
The latest version of the PTP edits, published for April, contains a new column with the rationale for each edit. The rationale column includes descriptions such as:

·         Standards of medical/surgical practice,
·         HCPCS/CPT procedure code definition,
·         CPT® ‘separate procedure’ definition, or
·         Misuse of column two code with column one code.

I was unable to find a further explanation of the meaning of these rationale, but they do give providers a place to start further researching the basis of a PTP edit.

The new rationale column also identifies “Mutually exclusive procedures.” This is important because this information has not been available since the reformatting of the excel files containing the edits in April 2012. CMS places the codes in column one and column two differently for mutually exclusive edits than for the other bundling edits. For mutually exclusive edits, the first column contains the least expensive code, and if the provider does not apply a modifier, the column two code (or more expensive code) will be rejected for payment.

It’s important to review mutually exclusive edits carefully. For the other bundling edits, if no modifier applies, the column one code is generally the correct code and the column two code should be removed. However, for mutually exclusive procedures either code could be correct. The coder needs to reassess the pair of codes to determine not only if a modifier applies, but also, if a modifier doesn’t apply, which code to remove. Failure to do this will cause the lower paying code to pay, when the higher paying code may represent the correct code for the procedure provided.

New IOCE Data File Available
Beginning in January, CMS has made available the IOCE Quarterly Data files, along with PC and Mainframe software. Previously, CMS had only published the IOCE Specifications, which contains a detailed explanation of the edits, and the IOCE Summary of Data Changes, which contains a listing of the codes changed for that quarter. CMS continues to publish these two files along with the new files on the CMS website.

The new Quarterly Data File contains all HCPCS/CPT® codes and information about the codes and their inclusion in various edits applied through the IOCE. The file provides the status indicator for each code and information such as whether it is:

·         Treated as a conditionally bilateral code for coding purposes,
·         A procedure that requires a device to be billed,
·         A device that satisfies the procedure/device edit,
·         A separate procedure under the inpatient only separate procedure exception, or
·         A comprehensive APC procedure.

This file, along with the detailed explanations in the IOCE Specifications, allows providers to research edits applied through the IOCE and determine how to correct claims.

Unfortunately, I have tried several times to download and install the PC software that is also now available and have been unable to get the software to run on my computer. I have viewed it on another computer and it appears to allow a provider to enter various codes and modifiers and receive the output from the IOCE (i.e., whether an edit applies). I encourage interested providers to download the software, though it appears to run better on Windows 7® and prior versions.

Overall, the new information available through these two edit systems gives providers access to far more information in researching and resolving the reasons for denials. CMS seems to be providing more information to providers about their edits and this is a very positive trend for provider compliance, as well as revenue integrity.

Note from the Instructor: Review of CMS rules on application of Medically Unlikely Edits

This week’s note from the instructor is written by Judith L. Kares, JD, regulatory specialist for HCPro.  
Under the NCCI, CMS has implemented three types of edits designed to promote correct coding and to discourage incorrect coding. Unfortunately, incorrect coding often leads to inappropriate payments, primarily overpayments. Currently, the following three types of NCCI edits are updated and maintained by CMS contractor Correct Coding Solutions, LLC:
  • Procedure to Procedure Edits;
  • Medically Unlikely Edits; and
  • Add-on Code Edits.
The NCCI edits only apply to Medicare services covered under Part B. The NCCI policy manual and edits may be downloaded from the CMS website, which instructs providers to address concerns regarding specific NCCI edits to the current NCCI administrator. During a recent MBC-H class, participants had a number of questions and concerns regarding the application of the Medically Unlikely Edits, more commonly referred to as MUEs.

Background on MUEs
The MUEs are unit of service limitations which have been introduced incrementally since 2008. Prior to implementation of the MUEs, CMS declined to disclose to providers the limitations for specific services. Following implementation, providers only learned they had exceeded an MUE limitation for a particular service when they billed units in excess of that limitation. After repeated requests for disclosure, CMS began to release MUE limitations for specific services. It is still not clear, however, whether CMS has released the MUE limitations for all services subject to these edits. Currently, CMS has released MUEs for more than 10,800 Medicare-covered services.

Initial application of MUEs
One of the most troubling areas surrounding the MUEs is how they are applied. Initial guidance from CMS indicated that the MUE limitations were to be applied on a per line item basis, so that the number of units on a single line did not exceed the limitation. If providers furnished what they believed to be medically necessary units (to the same beneficiary on the same date of service (DOS)) in excess of the limitation, they were told to bill those excess units on separate line items, with an appropriate modifier, so no single line item for that service contained units in excess of its MUE. In many cases, that methodology appeared to work. For those cases, as long as no line item exceeded the MUE, there was no denial of units in excess of the limitation when billed on a separate line with an appropriate modifier.

In other cases, however, CMS appeared to be applying the limitation on a DOS basis. That is, CMS appeared to be adding together all units of that service performed for the same beneficiary on the same date of service. If the sum of all units exceeded the limitation, then CMS either denied all line items on the claim with the HCPCS code for that service or denied the entire claim. At that point, there was considerable confusion as to how CMS was applying MUEs.

Introduction of MUE adjudication indicators
In response to this confusion and requests for clarification, CMS introduced three MUE adjudication indicators (MAI), which identify how CMS will apply MUEs to each specific service. These three MAIs are designated, defined and applied as follows:

  • MAI 1—applied by claim line
o   Each line reporting services is subject to MUEs edited against the MUE separately
o   For codes subject to MUE limitations, providers should report medically appropriate units in excess of the limit on separate lines, with an appropriate modifier, so no single line exceeds the limitation
o   MUEs with MAI of 1 denied for units in excess of the MUE are generally appealable to the MAC
  • MAI 2—applied by date of service
o   If billed in error, the provider may request reopening to correct
o   All claim lines with the same HCPCS code, regardless of modifier, and the same DOS will be summed and compared to the MUE value
o   All claim lines with that specific code will be denied if the total units exceed the MUE
o   The edit is based on statute, regulation, or subregulatory guidance and the MAC is bound by these rules for both initial decisions and redeterminations
§ Higher-level appeal adjudicators may not be bound by these rules, but should give deference to them

  • MAI 3—applied by date of service
o   If billed in error, the provider may request reopening to correct
o   All claim lines with the same HCPCS code, regardless of modifier, and the same DOS will be summed and compared to the MUE value
o   All claim lines with that code will be denied if the total units exceed the MUE
o   The edit is based on clinical information, and the provider may be able to successfully appeal denial to the MAC if there is adequate documentation of medical necessity

Additional questions and concerns

As noted above, the MUE edit tables are available for download from the CMS website. In the edit tables, CMS has identified each service subject to an MUE by HCPCS code. Beside each HCPCS code, CMS has listed the applicable MUE unit limitation and MAI designation, indicating the basis upon which the MUE is applied to that service. CMS encourages providers to contact the current NCCI administrator, Correct Coding Solutions, if they have questions or concerns about specific MUE limitations. In prior guidance, CMS also suggested that providers contact the national societies whose members order services subject to MUE limitations if they believe certain limitations are too restrictive based upon accepted medical practice.

One area of particular concern is CMS’ decision to deny all line items for services with an MAI of 2 or 3 (indicating the MUE is applied on a DOS basis) when the sum of the units exceeds the limitation, rather than only denying the units in excess of the limitation. This seems unnecessarily punitive, particularly when providers believe the excess units are medically appropriate. This concern might be an area where a coordinated, concerted approach would be more effective than individual action.