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A Brave New World for UR Committees

Join us at 1 p.m. (Eastern) Thursday, June 19, for this special free webcast, A Brave New World for UR Committees: UR Conditions of Participation and an Effective UR Plan.

Our regulatory specialist and Medicare boot camp instructor Kimberly A. Hoy Baker, JD, will discuss requirements of UR Conditions of Participation (CoP) including composition, types of review, and requirements for a valid review.

You will learn necessary policies according to the State Operations Manual and will receive valuable guidance regarding the 2-midnight rule and Medicare Part B rebilling changes.

Register for free today!

Note to current registrants:

Webcast instructions and links will be sent by email. Please add us to your safe sender list. If you do not receive an email by 10:00 a.m. (Eastern) Thursday, June 19, contact customer service at 800-650-6787.

Note from the instructor: Devices and Anesthesiologist/CRNA Payments – Clarification of Two CMS Transmittals

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

In the Medicare Claims Processing Transmittal 2903, April 2014 Update of the Hospital Outpatient Prospective Payment System (OPPS), CMS discusses the current policy regarding billing for certain devices that are received by facilities at no cost, full credit, or partial credit. As of January 1, 2014, the modifiers “FB” or “FC” that were previously used to identify these devices are no longer accepted by Medicare Administrative Contractors (MAC), and providers should now be reporting value code “FD” with the amount of the credit. This is not anything new, but I wanted to point out a percentage that was used in the transmittal that may be confusing to facilities.

In the transmittal, CMS states:

Also effective January 1, 2014, for claims with APCs that require implantable devices and have significant device offsets (greater than 40%), the amount of the device credit will be specified in the amount portion for value code “FD” (Credit Received from the Manufacturer for a Replaced Medical Device) and will be deducted from the APC payment from the applicable procedure. The OPPS payment deduction for the applicable APCs referenced above will be limited to the total amount of the device offset when the FD value code appears on a claim. The offset amounts for the above referenced APCs are available on the CMS Web site.

The “greater than 40%” referenced above is actually a threshold used to identify ambulatory payment classifications (APC) that will be affected by the policy. CMS uses this percentage to identify an APC where at least 40% of the payment rate is determined by the cost of the device itself. In theory, if the APC does not meet that device cost threshold, a facility would not have to report a credit regardless of the amount. A list of the affected APCs can be found in Table 30 of the 2014 OPPS Final Rule.

The actual reporting policy for facilities is still based on at least a 50% credit of the cost of the device. Specifically, page 75006 of the Federal Register states that hospitals are required to report the amount of the credit with value code ‘‘FD’’ (Credit Received from the Manufacturer for a Replaced Medical Device) when the hospital receives a credit for a replaced device listed in Table 31 that is 50% or greater than the cost of the device. Although MLN Matters article MM8653 somewhat clarifies the confusion that Transmittal 2903 created, hospitals will continue to use the 50% credit as their reporting threshold for complying with this CMS policy.

To further clarify the remainder of the device credit policy, the OPPS payment deduction for the APCs referenced above is limited to the total amount of the device “offset” when the FD value code appears on a claim. The offset amounts are available under the Annual Policy Files link on the on the CMS OPPS website and can help facilities identify the maximum amount by which the APC payment may be reduced.

In an unrelated transmittal, One Time Notification 1379, CMS published a clarification for certified registered nurse anesthetist (CRNA) and anesthesiologist payments made to a Method II Critical Access Hospital (CAH). For those readers that may not be familiar with this cost based reimbursement system, the following is a brief explanation.

  • Anesthesiologists and CRNAs may reassign their billing rights to a CAH.
  • The CAH may bill under Method II (optional method) by billing the facility outpatient service and the related professional fee on the same outpatient claim by reporting specific revenue codes.
  • In most instances, this allows the CAH to receive reimbursement at 115% of what the Medicare Physician Fee Schedule (MPFS) would have paid the physician or CRNA if they had billed independently on the 1500 claim form.
  • Under certain qualifying circumstances, a CAH can receive cost based reimbursement for its CRNA services rather be paid under the MPFS. This type of payment is called a pass-through payment.

On June 7, 2013 in previously released Transmittal 2719, CMS announced that effective January 1, 2013, qualifying CAHs and rural hospitals were eligible to receive pass-through payments for services that CRNAs are legally authorized to perform in the state in which the services are furnished (see amended 42 CFR 410.69(b)). The pass-through payments included those procedures outside of the anesthesia HCPCS codes (00100-01999) that were billed using revenue code 964 on the CAH’s outpatient claim (TOB 085X).

Although this information was first released in June 2013, CMS is now clarifying in One Time Notification Transmittal 1379 that the effective date for payment of CRNA service outside of the anesthesia code range is January 1, 2013, and includes payment made under pass-through and Method II reimbursement methodologies. Unfortunately, CAHs have to read the entire transmittal to understand that if they want the proper Method II reimbursement for procedures performed by CRNAs outside of the anesthesia code range, the CAH is responsible to resubmit claims to their MAC. CMS also instructs MACs to bypass timely filing so that facilities can rebill claims back to the January 1, 2013 date of service based on this more recent clarification. This transmittal goes on to announce that effective January 1, 2014, a Method II CAH can also receive reimbursement for anesthesiologist services identified by revenue code 963 on the CAH’s outpatient claim.

Unfortunately, in the current Medicare claims editing and processing systems, the only HCPCS codes 00100–01999 performed by an anesthesiologist (revenue code 963) or CRNA (revenue code 964) that can be reimbursed under Method II. The claims processing system will not be updated until October 6, 2014, as identified by the implementation date on this transmittal. Again, the CAH is responsible to resubmit claims to their MAC once this policy is implemented.

To prevent lost reimbursement, CAHs may want to consider reviewing claims data from January 1, 2013, to the current period that were billed with revenue code 964 and a HCPCS code outside of the anesthesiology code range. These claims may need to be resubmitted to receive proper Method II reimbursement and CAHs should consult their MACs for further guidance.

CAHs may also want to review claims data from January 1, 2014, to the current period that were billed with revenue code 963 and a HCPCS code outside of the anesthesiology code range. If the service was not paid appropriately under Method II reimbursement methodology, hold the claim and resubmit after October 6, 2014. For outpatient claims that have not been billed yet and for which the facility will report revenue code 963 with a HCPCS code outside of the anesthesiology code range, hold the claim and submit after October 6, 2014, keeping in mind that timely filing requirements must be met.

Note from the instructor: CMS reassigns packaged skin substitute products approved for payment in CY 2014 based upon updated payment information

 

This note from the instructor is written by Judith Kares, JD, regulatory specialist for HCPro.

One of the more complex aspects of coding, billing, and payment for covered drugs and biologicals relates to skin substitute products. Under the CY 2014 OPPS/ASC final rule (CY 2014 final rule), CMS is packaging most skin substitute products into the application procedures that utilize them. Per CMS policy, there is no separate payment for packaged items and services; the payment for packaged items and services is included in the payment for the separately payable procedures of which they are an integral part.

Special billing rules for packaged skin substitute products

For packaging purposes, CMS created two groups of application procedures: application procedures that use high-cost skin substitute products (billed using CPT codes 15271–15278) and application procedures that use low-cost skin substitute products (billed using HCPCS codes C5271–C5278).

In making its decision as to whether a skin substitute product will be assigned to the high cost or low cost group, CMS did a comparison of the July 2013 payment rate for the skin substitute product to $32, which is the weighted average payment per unit for all skin substitute products. In doing so, CMS used skin substitute utilization data from CY 2012 claims and the July 2013 payment rate for each product. For CY 2014, skin substitute products with a July 2013 payment rate that was more than $32 per square centimeter are packaged into the payment for the high-cost application procedures, and those with a July 2013 payment rate that was equal to or less than $32 per square centimeter are packaged into the low cost application procedures. 

A listing of the respective high- and low-cost skin substitute products, as well as the high- and low-cost skin application procedures into which they will be packaged, is set out in the CY 2014 Final Rule, Tables 13 and 14 respectively. A few skin substitute products (e.g., skin substitute products that are applied as either liquids or powders per milliliter or per milligram and are currently employed in procedures outside of the CPT code range of 15271–15278) are not designated as either high or low cost. They should be billed with the applicable surgical procedures that use them rather than the skin application procedures noted above (that is, they should not be reported with CPT codes15271–15278 or HCPCS codes C5271–C5278). Payment for these skin substitutes will be packaged into payment for the related surgical procedures.

Reassignment of new CY 2014 skin substitute products

Under the CY 2014 final rule, CMS also finalized a policy that for any new packaged skin substitute products approved for payment during CY 2014, CMS will use the $32 per square centimeter threshold to determine mapping to the high- or low-cost skin substitute group, as soon as sufficient pricing information becomes available. Any new packaged skin substitute products without pricing information were assigned originally to the low-cost category. There were nine new packaged skin substitute products that were covered as of January 1, 2014, and that were assigned to the low-cost payment group because pricing information was not available for these products at the time of the January 2014 update.

As reported in CMS’ April quarterly OPPS update (Transmittal R2903CP), there is now pricing information available for three of these nine products. Table 7 below shows the three new products and their updated low/high cost status based on the comparison of the price per square centimeter for each product to the $32 square centimeter threshold for CY 2014.

Table 7—Updated Payment Rates for Certain HCPCS Codes Effective April 1, 2014

HCPCS Code

Long Descriptor

Status Indicator

Low/High Cost Status

Q4143

Repriza, Per Square Centimeter

N

Low

Q4147

Architect Extracellular Matrix, Per Square Centimeter

N

High

Q4148

Neox 1k, Per Square Centimeter

N

High

Billing and payment for pass-through skin substitute products

Although most skin substitute products are packaged, for CY 2014 five skin substitute products have been granted pass-through status and are separately payable. Skin substitutes with pass-through status have a status indicator of “G,” as set out in Table 13. Pass-through skin substitutes should be reported with CPT codes 15271–15278. Payment for pass-through skin substitutes is subject to an offset based on the amount of packaged skin substitute that is already included in the payment for the related skin application procedure. During CY 2014, for those skin application procedures assigned to APC 0328, the offset amount is 56.77%, and for those skin application procedures assigned to APC 0329, the offset amount is 15.93%.

Practical implications

There are several practical implications for hospitals under these complex billing rules. First, for dates of service on and after January 1, the Integrated Outpatient Code Editor will return to provider (Edit 87) any claim with an appropriate skin application procedure that does not also include an appropriate skin substitute product. This applies to both packaged and pass-through skin substitute products. In order to receive payment for the skin application procedure (as well as any pass-through skin substitute product, if applicable), the hospital will need to add the appropriate skin substitute product to the claim.

Second, effective April 1, based upon the reassignment of two skin substitute products—Q4147 and Q4148—from the low to the high-cost group, hospitals will need to revise their billing policies to ensure  that these skin substitute products are billed with the applicable skin application procedures. Hospitals will also need to keep an eye out for potential reassignment of the remaining six new skin application procedures so that appropriate changes in billing policy can be implemented.

HDI posts one new issue in one category

HealthDataInsights (HDI) posted one new issue in one category to its CMS list for providers in Region D. (See link for individual state applicability.)

According to the HDI website, the new issues are:

For Inpatient Acute Care Hospitals:

  • Prospective Payment System (PPS) DRG Outliers – High Cost Implants – J5 and Legacy. Medicare pays for inpatient hospital services provided. Under PPS, hospitals are paid a predetermined rate per discharge for inpatient hospital services furnished to Medicare beneficiaries. Each type of Medicare discharge is classified according to a list of DRGs. These amounts, are, with certain exceptions, payment in full to the hospital for inpatient operating costs. In addition to the basic prospective payments, Medicare also makes payment for cases incurring extraordinarily high costs. This additional payment is known as an “Outlier”. Medical documentation will be reviewed to determine the correct units of service and charges were reported under Revenue Code 278. (Medical Necessity will be excluded at this time.)

HDI posts one new issue in one category

HealthDataInsights (HDI) posted one new issue in one category to its CMS list for providers in Region D. (See link for individual state applicability.)

According to the HDI website, the new issues are:

For inpatient acute care hospitals:

Prospective Payment System (PPS) DRG Outliers – High Cost Implants – JE and JF. Medicare pays for inpatient hospital services provided. Under PPS, hospitals are paid a predetermined rate per discharge for inpatient hospital services furnished to Medicare beneficiaries. Each type of Medicare discharge is classified according to a list of DRGs. These amounts, are, with certain exceptions, payment in full to the hospital for inpatient operating costs. In addition to the basic prospective payments, Medicare also makes payment for cases incurring extraordinarily high costs. This additional payment is known as an “Outlier”. Medical documentation will be reviewed to determine the correct units of service and charges were reported under Revenue Code 278. (Medical Necessity will be excluded at this time.)

CGI posts two new issues in one category

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 outpatient services at Critical Access Hospitals:

The Cardiovascular Nuclear Medicine services have coverage guidelines specific to the Local Coverage Documentation and the CMS Manuals in Ohio and Kentucky. Decision-making for testing is based upon the presence of multiple clinical risk factors, the level of functional capacity, the risk of the surgery and the likelihood that the results of the cardiac testing would change the management. There are specific diagnoses associated with each form of testing. When an unapproved diagnosis is reported for any type of Cardiovascular Nuclear Medicine service, the service is denied.

The Cardiovascular Nuclear Medicine services have coverage guidelines specific to the Local Coverage Documentation and the CMS Manuals in Michigan and Indiana. Decision-making for testing is based upon the presence of multiple clinical risk factors, the level of functional capacity, the risk of the surgery and the likelihood that the results of the cardiac testing would change the management. There are specific diagnoses associated with each form of testing. When an unapproved diagnosis is reported for any type of Cardiovascular Nuclear Medicine service, the service is denied.

AHA Files Two Lawsuits Related to the 2-Midnight Rule; Still a Rule in Turmoil

Last week, the American Hospital Association (AHA), along with four hospitals/health systems and four hospital associations from New York City, New York State, New Jersey, and Pennsylvania, filed two lawsuits against the relatively controversial 2-midnight rule and some of its accompanying provisions. All this while Congress has recently extended the probe and educate period for the provision, and is considering other changes to the rule. We also expect the FY2015 IPPS proposed rule at any time, which could also make new proposals affecting the rule.

The first AHA lawsuit takes aim at the 2-midnight rule itself as well as the order and certification requirement and the Part B inpatient billing provisions. The complaint asks for the 2-midnight rule to be declared arbitrary and capricious and set aside, presumably returning to the prior guidance on inpatient admissions.

The complaint also asks that the physician order requirement be set aside as invalid, arbitrary and capricious, and contrary to the Medicare Act. While the complaint seems to discuss the new certification requirements, which are more onerous for hospitals than the order requirement, the suit only appears to ask for the order requirement to be set aside.

Finally, they ask that the one year timely filing requirement in the new Part B inpatient billing regulations be set aside as well. As the lawsuit notes, the one year timely filing limit is difficult, if not impossible, to meet for audits by external auditors.

Regardless of how the lawsuit proceeds, however, hospitals can take advantage of the new Part B inpatient billing rules by doing their own internal audits any time up to a year after the patient’s discharge and still get full Part B payment. This represents a big transition from requiring concurrent audits in order to get limited Part B inpatient payment and a big revenue opportunity for hospitals that they can take advantage of now.

The second lawsuit separately challenges the 0.2% cut in inpatient payments made by CMS in order to maintain the budget neutrality of the new inpatient status provisions in light of the additional inpatient admissions they anticipated. The complaint argues that the payment cut did not comply with the notice and comment period as required and violates technical requirements of the Medicare Act.

Meanwhile, earlier this month, the Protecting Access to Medicare Act of 2014 was passed which extended the probe and educate period for MACs to review hospitals’ application of the 2-midnight rule until March 31, 2015. It also prohibited Recovery Auditors from auditing claims until that date.  I recently wrote a white paper on this new law and the audits.

In addition to this legislation, there are also proposed laws in both the Senate and House that would restructure the 2-midnight rule or prevent its application, which can be accessed by searching “2 Midnight” at Congress.gov. This month, CMS is also set to release the FY2015 IPPS rule. Based on the multiple clarifications issued related to patient status after last year’s rule, there very well may be new regulatory clarification included in the annual proposed rule.

Hospitals must continue their compliance efforts with all the new rules adopted for FY2014 because for now there is no change in their application and probe and educate audits continue at the MAC level. CMS may continue to issue guidance on their application informally on their website. Please note the CMS’ Inpatient Review site has moved, so if you are monitoring that site for new guidance, please link to the new site here..

But hospitals must also be cognizant of all the potential changes to the rules that could be coming up and be prepared to be flexible to accommodate any new rules. We will make every effort to monitor these developments closely and keep you updated in the Medicare Insider.

Medical Necessity 2014: Inpatient Admissions and the 2-Midnight Rule

Join us at 1 p.m. (Eastern) Wednesday, April 16 for the live 90-minute webcast “Medical Necessity 2014: Inpatient Admissions and the 2-Midnight Rule.”

MACs recently selected more than 29,000 records for review as part of CMS’ probe audits of inpatient claims with admission dates on or after October 1, 2013. CMS’ effort to determine compliance with the 2-midnight rule makes it more important than ever for hospitals to avoid denials by staying on top of ever-changing guidance.

During this show, our expert speakers Ralph Wuebker, MD, MBA, and Jonathan G. Wiik, MSHA, MBA, will discuss preliminary results of the audits and provide real-world examples of denied inpatient claims. You’ll also get tips for determining medical necessity and the latest guidance on 2-midnight rule compliance.

Click to hear why speaker Ralph Wuebker, MD, MBA, thinks you should attend this program.

For more information or to register, click here or call 800-650-6787.

At the conclusion of this program, you will be able to:

  • Apply best practices for physician documentation of medical necessity at your facility
  • Recognize appropriate standard order sets and physician documentation of medical necessity
  • Identify cases that are at risk for denials or audits by MACs and Recovery Auditors
  • Discuss preliminary results of CMS’ probe audits

CGI posts one new issue

 

CGI posted one new issue 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 issue is:

For outpatient services:

  • OP Cardiovascular Nuclear Medicine Correct Coding J6 (NGS) Rev 1. The Cardiovascular Nuclear Medicine services have coverage guidelines specific to the Local Coverage Documentation and the CMS Manuals. Decision-making for testing is based upon the presence of multiple clinical risk factors, the level of functional capacity, the risk of the surgery and the likelihood that the results of the cardiac testing would change the management. There are specific diagnoses associated with each form of testing, when an unapproved diagnosis is reported for any type of Cardiovascular Nuclear Medicine service, the service is denied.

Note from the instructor: Hospital Outpatient Payment Panel makes recommendations to CMS

 

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

Hospital outpatient therapeutic services, such as emergency department or clinic visits, paid under OPPS or paid to critical access hospitals (CAH) on a cost basis must be furnished “incident to” a physician’s service to be covered. In order to qualify for “incident to” coverage, the service must be furnished on the order of a physician or non-physician practitioner in a hospital or provider-based department of the hospital, be furnished as an integral part of treating the patient, and be provided under the appropriate level of supervision (i.e., general, direct, or personal).

In 2012, CMS established the Hospital Outpatient Payment Panel as an independent review entity, which included stakeholders from the OPPS and CAH hospitals, to give CMS recommendations on the appropriate supervision levels for hospital outpatient therapeutic services. The panel meets in March and August and then CMS posts its preliminary decisions on the panel’s recommendations for a 30-day comment period. After the comment period, CMS issues their decisions, which become effective July 1 following the March meeting or January 1 following the August meeting.”

On March 10, the panel met and proposed several changes to the current supervision requirements. CMS accepted the panel’s recommendations on several key outpatient services but rejected several others based on safety and standards of quality care. One of the outcomes of the panel’s meeting is that CMS will change the following services from direct supervision to general supervision, meaning that the service must be furnished under the physician or non-physician practitioner’s overall direction and control but does not require they be present during the service:

  • G0176 – Activity therapy, such as music, dance, art, or play therapies not for recreation related to the care and treatment of patient’s disabling mental health problems, per session (45 minutes or more)
  • 36593 – Declotting by thrombolytic agent of implanted vascular access device or catheter
  • 36600 – Arterial puncture, withdrawal of blood for diagnosis
  • 94667 – Manipulation chest wall, such as cupping, percussing, and vibration to facilitate lung function; initial demonstration and/or evaluation
  •  94668 – Manipulation chest wall, such as cupping, percussing, and vibration to facilitate lung function; subsequent

However, CMS did not accept the panel’s recommendation to change eight specific chemotherapy administration services from direct supervision to general supervision because the CPT codes describe the injection and intravenous infusion of highly complex drugs or complex biological agents. Direct supervision will continue to be the requirement for these services; CMS is seeking further comment on the panel’s recommendation for consider at its August meeting. Specifically, CMS is looking for clinical input regarding the appropriate level of supervision for the initial and subsequent administrations of these drugs when provided in a hospital or CAH outpatient department.

Although the panel recommended that CPT 97597 (debridement of an open wound) be changed to general supervision, CMS did not accept the proposal, stating that this code includes sharp debridement which is generally not within the nursing scope of practice and therefore is not safe for general supervision. Keep in mind that hospitals paid under OPPS or CAHs paid under cost do not have to meet “incident to” requirements for physical therapy, occupational therapy, speech-language pathology services, diabetes outpatient self-management training, medical nutrition therapy, and kidney disease education.

In CY 2012, CMS also defined an exception to the direct supervision requirements and created a list of Non-Surgical Extended Duration Therapeutic Services (NSEDTS). These services must be provided under direct supervision during the initiation of the service followed by general supervision once the supervising physician determines the patient is stable and the remainder of the service can be delivered safely under general supervision. The supervising physician must document the transition from direct to general supervision in the patient’s medical record. This subset of services was created, in part, to assist CAHs in meeting supervision requirements for payment that were not consistent with their licensure requirements regarding physician and NPP staffing.

CMS will designate CPT code 36430 (transfusion, blood or blood components)as an NSEDTS because it warrants direct supervision initially and has a low risk of adverse effects once the transfusion has begun.

CMS agreed with the panel to change CPT code 96370 (subcutaneous infusion, each additional hour) from an NSEDTS to general supervision, since it describes a subsequent infusion of a previously administered drug that already required direct or extended duration supervision for the initial hour of infusion. However, CMS did not accept the panel’s recommendation to change the following services from NSEDTS to general because they involve administration of a new drug or substance:

  • 96369 – Subcutaneous infusion for therapy or prophylaxis (specify substance or drug); initial, up to 1 hour, including pump set-up and establishment of subcutaneous infusion site(s)
  • 96371 – Subcutaneous infusion for therapy or prophylaxis (specify substance or drug)

These preliminary decisions by CMS remain open to public comment through April 30; comments can be submitted via email to HOPSupervisionComments@cms.hhs.gov. Hospitals are always encouraged to provide their input and suggestions to CMS so that they may be considered in the final decisions that will become effective July 1, 2014.