FIND quarterly updates

Flipping over the calendar from September to October means there are plenty of updates available to MedicareFind subscribers.

The latest versions of the NCCI edits, both on the physician and hospital outpatient side, have been loaded into our NCCI edit lookup tool. Keep in mind that the hospital outpatient edits are one quarter behind the physician edits.

The quarterly updates to the medically unlikely edits (MUE) is available. As before, some of the MUEs remain unpublished.

And you can now locate the following, in addition to other quarterly changes:

• Third quarter updates to OPPS Addendum A and Addendum B
• The October 2009 lab NCD manual
• The latest I/OCE update

Sign up for a free trial to MedicareFind to access updates like these and more.

OIG releases Work Plan for Fiscal Year 2010

The Office of Inspector General (OIG) of the Department of Health and Human Services has just released its Work Plan for FY 2010.  A number of significant issues relating to hospital services covered under Parts A and B are targeted for review.  These areas, as identified in the Work Plan, include the following:

• Part A hospital capital payments
• Provider based status for inpatient and outpatient facilities
• Part A inpatient prospective payment system (IPPS) wage indexes
• Hospital payments for nonphysician outpatient services under the IPPS
• Payments to organ procurement organizations
• Inpatient rehabilitation facility admission of patient assessment instruments
• Critical access hospitals
• Medicare disproportionate share payments
• Duplicate graduate medical education payments
• Interrupted stays at inpatient psychiatric facilities payments
• Provider bad debts
• Medicare secondary payer
• Reliability of hospital-reported quality measure data
• Hospital admissions with conditions coded present-on-admission
• Hospital readmissions
• Adverse events:  various reviews
• Payments for diagnostic x-rays in hospital emergency departments
• Oversight of hospitals’ compliance with the Emergency Medical Treatment and Labor Act (EMTALA)
• Observations services during outpatient visits
• Coding and documentation changes under the Medicare Severity Diagnosis Related Group  (MSDRG) system
• Financial status of hospitals in the New Orleans area

More than half of them focus on the calculation of, with various adjustments to, payment for inpatient services under the IPPS, including whether certain outpatient services provided before or during that stay will be included in the IPPS payment for that stay or will be otherwise payable.  OIG proposed review ranges from the appropriateness of the current methodology for calculating the capital payment (which is designed to cover the costs of equipment and facilities) to the reliability of hospital-reported quality measure data, which will determine whether a hospital is entitled to a full or reduced cost-of-living update to its operating payment during a particular fiscal year.

Other areas targeted for review include some of the most complex decisions that hospitals have to make, including the spectrum of care required—outpatient, outpatient observation and inpatient–and the appropriateness of specific admissions and discharges.

Hospitals are encouraged to review the Work Plan carefully and to follow the OIG’s ongoing activities as they conduct related audits and report the results of those audits.  At the same time, hospitals should begin to proactively review their own operations in the targeted areas to identify any issues that need to be addressed sooner, rather than later.

Condition Code 44 – The Next Chapter

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

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

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

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

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

CMS clarifies RACs’ “exception authority”

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

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

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

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

MedicareFind tip: Use spotlighting to FIND particular documents

You may often be unsure of which exact document will answer your questions. In these cases, entering keywords into MedicareFind and using the filters and sorting to explore the available guidance is the best method of FINDing the guidance you need.

Sometimes, however, you already know which particular transmittal, MLN Matters article, Job Aid article, program memorandum, or regulation you need. Wouldn’t it be nice if you didn’t have to do any sorting, filtering, or navigating to access it?

MedicareFind can help.

Enter the full transmittal number (e.g., R1745CP), MLN Matters article number (e.g., MM6619), Job Aid article number (e.g., JA0902), or regulation number (e.g., CMS-1414-P), and MedicareFind will spotlight the exact matching document at the top of your results.

Additional results may be there if that reference number is mentioned within other documents (in fact, you may find these results useful in knowing whether the document you have in mind has been superseded), but you do not have to sort through anything to access the source authority you had in mind.

Purchase MedicareFind to start FINDing. You can also sign up for a free trial.

Never Events – Updated guidance on reporting surgical errors for Medicare inpatients

During the last few years, there has been considerable focus on certain events identified as “serious, largely preventable and of concern to both the public and health care providers.” These events have become more popularly known as “never events”—events that should never occur in a well-run healthcare facility with appropriate quality controls. In June of this year, Medicare released three national coverage determinations (NCDs) for the following surgical errors:

• Wrong surgical or other invasive procedure performed on a patient (NCD 140.6);
• Surgical or other invasive procedure performed on the wrong body part (NCD 140.7); and
• Surgical or other invasive procedure performed on the wrong patient (NCD 140.8).

Under the new NCDs, effective for services performed on and after January 15, 2009, CMS will not cover surgical or other invasive procedures performed in error, as described above. In addition, Medicare will also not cover hospitalizations and other procedures “related” to these non-covered services.

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More on observation services: The Medicare Compliance Forum

Frequent MedicareMentor readers will be aware of the series of posts my colleague Kimberly Hoy has written on observation services — read the ongoing discussions here, here, and here. You can hear Kimberly say a bit more about the cluster of issues surrounding observation at the upcoming Medicare Compliance Forum.

The “Medicare Compliance Forum: A Strategic Approach to RACs, Observation Status and the Role of Physician Advisors”, is an upcoming seminar with a whole track of sessions that will help you resolve observation-related questions and problems. Kimberly joins other experts such as ACS’ Deborah Hale, CCS, and Executive Health Resources’ Joe Zebrowitz, MD.

I’ve found the back-and-forth on observation here on the MedicareMentor Blog to be very substantive and illuminating (many thanks to those who’ve commented!), and you can expect the same rigorous, source-based analysis in the forum sessions.

Check out the event brochure, additional tracks, and more on the Medicare Compliance Forum page.

CMS updates CLIA waived tests

CMS recently issued Medicare Claims Processing Manual Transmittal 1799 (CR 6570), which is a Recurring Update Notification to inform contractors of new waived tests approved by the Food and Drug Administration under the Clinical Laboratory Improvement Amendments of 1988 (CLIA). Since these tests are marketed immediately after approval, CMS must notify its contractors of the new tests so that the contractors can accurately process claims.  This seems like a good time to review the basic guidelines set out under CLIA with respect to waived tests.

CLIA regulations require that all laboratories performing and billing tests to Medicare be appropriately certified.  There are varying levels of certification under CLIA, including certificate of waiver, certificate for provider-performed microscopy procedures (PPMP), certificate of registration, certificate of compliance, and certificate of accreditation.

Only laboratories with a current certificate of waiver are permitted to bill, and receive payment from, Medicare for laboratory tests categorized as waived complexity under CLIA.  To ensure that Medicare only pays for laboratory tests categorized as waived complexity under CLIA in facilities with a CLIA certificate of waiver, laboratory claims are currently edited at the CLIA certificate level.

Independent laboratories performing tests covered by CLIA must submit their CLIA number in Item 23 of the CMS 1500 paper claim (or its electronic equivalent).  The CLIA number, however, is not required on the UB-04 (or its electronic equivalent).

Using data obtained from the certification process, the Common Working File (CWF) edits Carrier/MAC claims to ascertain that the laboratory identified by the CLIA number is certified to perform the test.  Providers that bill FIs are responsible for verifying CLIA certification prior to ordering laboratory services under arrangement. The survey process validates that these providers have procedures in place to insure that laboratory services are provided by CLIA approved laboratories.

CMS identifies waived tests by providing an updated list of waived tests to Medicare contractors on a quarterly basis via a Recurring Update Notification. To be recognized as a waived test, some CLIA waived tests have unique Healthcare Common Procedure Coding System (HCPCS) procedure codes and some must have a QW modifier included with the HCPCS code.

Hospitals are encouraged to review Transmittal 1799 (CR 6570) (along with MLN Matters Article MM 6570 and Job Aid JA 6570) carefully with respect to the updated list of waived tests and related billing requirements, including attachment of -QW modifier.  Please note that your Medicare contractor will not search their files to either retract payment or retroactively pay claims processed before CR 6570 is implemented. However, they will adjust claims that you bring to their attention.

Free MedicareFind on-demand webcast

Thanks to everyone who participated in the MedicareFind webcast we held on July 22. I’m happy to announce that this is now available as a free on-demand recording — it should be a good resource for folks hoping to improve their use of MedicareFind.

During the webcast, HCPro’s Director of Medicare and Compliance (and fellow blog participant) Kimberly Hoy discussed three developing regulatory topics:

• Physician supervision (changes for 2009 and proposed 2010 changes)
• Counting observation hours
• HACs

I provided some demonstrations of how you can use MedicareFind to access the primary authorities in these areas and stay current with future updates.

To access the webcast, start here and go through the signup process. Happy FINDing!

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.