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Hospital Outpatient Payment Panel announces recommendations

For the second time this year, the Hospital Outpatient Payment Panel has made its recommendations to establish supervision levels different than the default level of direct supervision for certain outpatient therapeutic services. The alternate level of supervision must take into consideration the quality and safety for the delivery of the service in relation its clinical nature and inherent risks.

Beginning in 2012, CMS established a sub-regulatory process for an independent panel made up of members from the prospective payment system hospital and critical access hospital communities to recommend, at the request of CMS or the public at large, the alternate levels of supervision (e.g. general or personal) for individual services described by HCPCS codes.

The panel held their first meeting in March of this year and the CMS approved recommendations became effective on July 1, 2012. The second meeting was held in August and based on those recommendations; CMS is proposing the following changes to the current supervision levels for these categories:

  • Influenza, pneumococcal and hepatitis B vaccine administration;
  • Trimming of nails;
  • Venipuncture via vein, VAD or central catheter;
  • Foley catheter insertion;
  • Changing of cystostomy tube;
  • Bladder scan for residual urine measurement;
  • Refilling portable pump;
  • Irrigation of implanted VAD; and,
  • IV hydration, initial hour and each additional hour.

The last service, IV hydration, had been previously identified by CMS as a “non-surgical extended duration service” in the CY 2011 OPPS final rule. Those types of services must be provided under direct supervision during the initiation of the service followed by general supervision for the remainder of the service. Initiation of the service is defined as the beginning portion of the service until the supervising physician or non-physician practitioner 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.

However, CMS would not accept the Panel’s recommendations that the following services to be furnished under general supervision because the services either involve assessment by a physician or there is a significant potential for patient complications or reactions that would require the supervising physician or appropriate non-physician practitioner to be immediately available:

  • IV infusions and injections that are currently designated as non-surgical extended duration services;
  • H1N1 vaccine administration with family counseling.
  • Bladder irrigation;
  • Two casting/strapping procedures; and,
  • Direct admission for observation and observation per hour.

Of note is the fact that observation services were not addressed in the first meeting by the Panel, possibly because those services had been previously categorized into the non-surgical extended duration services; however, that did not alleviate the supervision concerns that critical access hospitals had raised. CMS announced in the 2013 OPPS proposed rule that they are considering giving CAHs and small rural hospitals one more year of non-enforcement for meeting supervision rules and also stated that it would most likely be the last year for that “waiver.” Based on CMS’ position that there is a significant potential for patient complications in regards to observations services, it is highly unlikely that we will see this move to a general supervision category any time soon and smaller hospitals should begin to prepare now.

These recommendations are open for public comment through October 24, 2012 and the final decisions will become effective on January 1, 2013. Hospitals that may have a stake in loosening the supervision requirements for the delivery of these outpatient services may submit their comments via email to: HOPSupervisionComments@cms.hhs.gov .

July 2012 quarterly update contains multiple significant updates and clarifications

There were a number of interesting items in the July 2012 Update to the Hospital Outpatient Prospective Payment System. The Claims Processing Manual transmittal had several new and replacement codes that hospitals should take note of and make appropriate chargemaster changes. The quarterly update also included a Benefit Policy Manual transmittal with three clarifications, including a new section on packaged self-administered drugs.

There were seven new Category III CPT codes adopted for July 2012, including new codes related to intracardiac ischemia monitoring systems (0302T-0307T) and a replacement code for insertion of ocular telescopic prosthesis (0308T), which should be used to replace deleted code C9732 effective July 1, 2012.  Also effective July 1, 2012, the pass-through code C1840 formerly billed with deleted code C9732 must be billed with new code 0308T to receive pass through payment.

There were also two new biologicals approved for pass through payment effective July 1: C9368 (Grafix Core, per square centimeter) and C9369 (Grafix Prime, per square centimeter).  CMS also adopt six new drug codes, three of which are replacement codes for existing drug codes that will no longer be billable effective July 1, 2012.

Human fibrinogen concentrate will now be billed with new code Q2045 in 1 mg units rather than J1680 which was billed in 100 mg units.  Similarly, aflibercept will be billed with new code Q2046 in 1 mg units rather than C9291 which was formerly used for a 2mg vial. Providers should take care to ensure that they properly adjust the units billed in addition to replacing the code in the chargemaster in order to avoid underpayments.

Code Q2048 (Injection, doxorubicin hydrochloride, liposomal, doxil, 10mg) is being created to replace J9001(Injection, doxorubicin hydrochloride, all lipid formulation, 10mg) and an additional code Q2049 is being adopted for doxorubicin hydrochloride, liposomal, imported lipodox, 10mg. In addition to new and replacement codes, CMS is changing the status indicator to payable for eight drugs and biological effective retrospectively to April 1, 2012.

CMS is also publishing new payment Addenda related to a correction notice published April 24th. The July Addendum A and B will contain corrected payment rates that are retroactive to January 1, 2012. Providers must request reprocessing if they believe they have been underpaid due to a change in the payment rates.

The Claims Processing Manual transmittal also had a policy clarification related to inpatient-only procedures. A statement was added to the manual to clarify that removal from the inpatient-only list does not mean the procedure must be provided on an outpatient basis. The clarification specifically emphasizes that procedures removed from the list are still payable on an inpatient basis.

The Benefit Policy Manual had two clarifications related to coverage and supervision and an additional important addition related to self-administered drugs. CMS updated the section on coverage of hospital outpatient services to specifically exclude physical therapy, occupational therapy and speech language pathology. This is in line with commentary in the OPPS final rule for 2012 that indicated these services were exempt from these requirements, including the supervision requirements, because they were not paid under the OPPS.  Additionally, CMS published the notice regarding services that only require general supervision as discussed in this blog on June 5.

Lastly, CMS has finally manualized language from Program Memorandum A-02-129 that discussed coverage of self-administered drugs when they are packaged supplies to a procedure. The original language in A-02-129 specified that self-administered drugs were covered if they were integral to a treatment or procedure, but the new language added to the manual appears to be limiting this coverage to drugs integral to procedures only. Specifically they state that the policy applies to drugs that are “an integral component of a procedure or are directly related to it, i.e., when they facilitate the performance of or recovery from a particular procedure.”

Additionally, CMS changed the bullet point examples of what is included and excluded from this policy. They eliminated the bullet point mentioning local anesthetics on the list of items integral to procedures and added language to the bullet point on eye drops making clear it would not include “the patient’s eye drops” that they use pre and post-operatively.

They also added two examples to the list of items not covered by this exception: pain medication for an outpatient presenting with pain and laxatives for constipation.  These examples appear to be aimed at explaining new language indicating that if the drug itself is the treatment it is not considered a packaged supply and therefore is not covered. This is also in line with their removal of “treatment” from the section discussing integral drugs that are covered, mentioned above.

Providers should take note of this new section on packaged self-administered drugs because it may affect their current policies on drugs they consider integral to procedures. As discussed, there are subtle but important changes to the language from the original program memorandum published in 2002.

 

CMS announces supervision levels for select services

On May 22, CMS announced the newly designated services that may be conducted under general supervision in accordance with the current Medicare regulations and policies. In the 2012 OPPS Final Rule, [76 Fed. Reg 74360]. CMS established a sub-regulatory process to adopt alternate levels of supervision, such as general or personal, for individual HCPCS codes. Hospitals can make requests twice a year to the Hospital Outpatient Payment Panel and upon further review, this panel makes recommendations to CMS for the alternative level of supervision.  CMS posts these recommendations for comment on their website and then announces their final decision whereby the changes become effective on either July 1 or January 1.

As a regulatory specialist, one of our responsibilities is to stay cognizant of the endless stream of CMS announcements, but I have to admit that not only did this one slip by me, but any information related to this topic is also very difficult to find on the CMS website. [Well, more difficult than usual!] Because of this, we have included many of the links and citations in this article to help our readers find the information more easily.

Remember that CMS first established the category of “nonsurgical extended duration therapeutic services (a.k.a. extended duration services)” in the 2011 OPPS Final Rule [75 Fed. Reg. 72013 Table 48A]. This initial list of 16 HCPCS codes, which included observation services per hour and injections and infusions, had to be provided under direct supervision during the initiation of the service followed by general supervision for the remainder of the service. CMS defined the initiation of the service as the beginning portion of the service until the supervising physician or NPP determines the patient is stable and the remainder of the service can be delivered safely under general supervision.

In February, the panel met and made recommendations to CMS regarding the supervision levels for 28 HCPCS codes and on April 18, 2012, CMS posted the preliminary decisions for public comment on the OPPS website. In summary, most commenters supported the panel’s recommendations regarding the list of HCPCS codes that will move from direct to general supervision on July 1:

  • Specific mental health services from the range 90804-90828 which excludes codes for medical evaluation and management; 90846-90857; G0177; G0410 and G0411
  • Bladder catheter insertion 51701
  • Vaccine administration 90471-90474
  • Smoking cessation counseling 99406-99407

However, at this time, CMS rejected the panel’s recommendation to move HCPCS code 94640 for an inhalation treatment to general supervision because it is not performed over an extended period of time and hospital patients receiving this service may require the supervising practitioner’s presence depending on their condition.

Of note for 2012, critical access hospitals (CAHs) were represented on the panel to help identify and provide perspective on the unique supervision scenarios that occur due to their distinct staffing patterns allowed by the Medicare Conditions of Participation.  Even though CAH representation is now present on the Panel, CMS stated for CY2012 it would not enforce supervision requirements for CAHs and small rural hospitals with 100 beds or less paid under PPS. Unfortunately in this announcement, CMS did not restate this 2012 caveat which may cause some confusion for those hospitals that are currently excluded from this regulation.

The next panel meeting is scheduled for August 27-29 and the deadline for submitting recommendations for consideration is July 27. Hospitals that are interested in providing comments must follow the very specific guidelines listed on the CMS website.

Benefit policy changes under the CY 2012 OPPS final rule

The most significant changes to coverage and reimbursement under the Outpatient Prospective Payment System (OPPS) are implemented at the start of each calendar year.  In addition to the final rule, CMS publishes its first quarter updates to the OPPS in January of each year.  These updates are published in the form of recurring update notification (RUN) transmittals. This year, CMS published two RUN transmittals incorporating changes under the calendar year (CY) 2012 OPPS final rule.  One of the transmittals (R152BP) focuses on related changes to the Medicare Benefit Policy Manual (MBPM), and the other (R2376CP) focuses on relevant changes to the Medicare Claims Processing Manual (MCPM).  In this week’s Note, I will focus on benefit policy changes and clarifications.

Benefit policy changes/clarifications

The only benefit policy change/clarification addressed in the January update relates to physician supervision requirements for outpatient hospital therapeutic services provided directly, or under arrangements, by hospitals or critical access hospitals (CAH).

In CY 2010, the required level of supervision by an appropriate physician or non-physician practitioner was “direct supervision”. In addition to immediate availability, direct supervision included specific location requirements depending upon whether the services were performed (i) in the hospital or in an on-campus provider-based department; or (ii) in an off-campus provider-based department.  Please note that these specific supervision requirements were waived with respect to CAHs for CY 2010.

However, in CY 2011, CMS removed the specific location requirements and simply stated that the supervising physicians or non-physician practitioners must be “immediately available” and able to provide direction and assistance throughout the performance of the procedure.  They also introduced a second level of physician supervision—general supervision—which, during CY 2011, applied only to a limited number of services referred to as non-surgical extended duration therapeutic services.  During the initial phase of these services, direct supervision would apply, but only during the initial phase of the service. After that was completed general supervision would be sufficient. The definition for general supervision followed the definition described in regulations regarding physician supervision requirements for outpatient diagnostic services.  Please note that these specific supervision requirements were also waived with respect to CAHs and certain small rural hospitals for CY 2011.

In CY 2012, CMS is reserving the right to extend its assignment of two alternative levels of supervision—“general supervision” and “personal supervision”—to certain outpatient hospital therapeutic services.  In doing so, CMS has also defined these terms to match the regulations that provide guidance for physician supervision of outpatient diagnostic services.

  • General supervision “means the definition specified at 42 CFR 410.32(b)(3)(i), that is, the procedure or service is furnished under the physician’s overall direction and control, but the physician’s presence is not required during the performance of the procedure.”
  • Similarly, personal supervision “means the definition specified at 42 CFR 410.32(b)(3)(iii), that is, the physician must be in attendance in the room during the performance of the service or procedure.” 

As Kimberly pointed out in last week’s note, CMS is scheduled to announce, effective July 1, 2012, a list of services with alternative levels of supervision based on recommendations from the Advisory Panel on Hospital Outpatient Payment.  In any event, hospitals and CAHs are encouraged to review their existing policies, including policies for credentialing and documenting the assignment of appropriate practitioners to assure compliance with applicable supervision requirements.

Stay tuned for next week’s note, which will focus on CY 2012 claims processing changes/clarifications.

Top five issues to watch in 2012

Welcome back from the holidays. CMS was extremely quiet last week so I thought I’d review some of the areas I believe warrant special attention in 2012. These are issues you may wish to include in your compliance audit plan or address by reviewing and revising current policies.

  1. Inpatient-only procedures:  During the August 23, 2011 open door forum (ODF) CMS stated that there is no grace period to obtain an inpatient order after a scheduled outpatient procedure turned to an inpatient-only procedure due to complications.  This was contrary to prior guidance from a 2007 ODF in which a CMS representative indicated that the order could be written immediately following the procedure.  CMS indicated on the 2011 ODF that this was a rather unique situation and should be addressed to by the local Medicare administrative contractor (MAC).  However, in talking with providers this is actually a rather common situation.  This new guidance is especially troubling in light of manual instructions published this past year that state inpatient-only procedures provided on an outpatient basis are not combined to a subsequent inpatient admission under the three-day rule, even if the admission is a result of the surgery.  With this being such a common occurrence and with such potentially significant penalties for providers, we may hear more on this on a national basis.
  2. Self-administered drugs:  Also during the August 23, 2011 ODF, CMS stated that the exception for coverage of self-administered drugs integral to a procedure is “very limited” and that the majority of self-administered drugs are noncovered.  This contradicts prior guidance that stated “most drugs” are considered integral and a covered part of procedures.   Most of this hinges on the definition of integral. Does it mean integral to this patient’s procedure or integral for all patients who receive the procedure?   HCPro surveyed audio conference listeners and found that 48% were applying a definition of “this” patient and billing Medicare for antibiotics required due to a special condition. In contrast 52% considered the same antibiotic not integral because other patients did not receive it. Those listeners billed the drugs to the patient, even though the procedure could not be performed for that patient without the antibiotic.  This survey results certainly show that this term is not well understood by providers.  National guidance seems necessary to clarify the policy in light of the impact on beneficiaries who pay for these expensive drugs. We may hear more on this issue as well.
  3. Discount devices:  There was one update to this policy in 2011, in which CMS added DRG 265 to the list of DRGs subject to the inpatient reduced cost device reporting policy.  However, I have it on my list due to the attention that the OIG and Department of Justice is paying to this issue as well as the complexity of complying with the policy.  There have been a number of facilities audited and found at fault for not properly reporting device discounts, and also cited for not properly obtaining discounts that were available for devices they removed.   The Department of Justice also recently settled a case with Guidant for $9.25 million that alleged the company failed to grant warranty credits and rebates to hospitals after advertising them.   This also hits my list because of the complexity of making this work in hospitals.  It generally involves several departments including billing, coding, surgery, supply, and accounts payable..
  4. Physician supervision:  The repeated clarifications and changes to physician supervision rules for the last three years make it a shoe in for the list.  Not much changed for 2012, but in my experience, providers are still adjusting to and trying to understand the 2011 changes.  This year we will also see the first round of services that may be subject to general or personal supervision rather than direct supervision as CMS goes through the first round of its new advisory processes.  According to the 2012 outpatient prospective payment system (OPPS) final rule, we will see an announcement, effective July 1, 2012, that lists services with alternative levels of supervision based on recommendations from the Advisory Panel on Hospital Outpatient Payment.  In addition to watching for that mid-year guidance, providers should focus on the credentials and qualifications of the staff they use to supervise their services and their method of documentation.
  5. Three-day window:  The three-day payment window is another area subject to clarification over the past few years. This year, the focus will be on whether outpatient Part B services provided at related entities are subject to the rule.  CMS guidance in the 2012 Medicare Physician Fee Schedule final rule implemented a new PD modifier and extended the compliance date for the modifier to July 1, 2012. Once providers identify related entities that fall under the rule, the most difficult on-going task will be to automate communication between the main hospital and those entities to ensure easy compliance with the rule.  In the meantime, many providers will use manual processes that will be susceptible to error. Compliance departments will need the keep a close eye on these processes to facilitate interdepartment and interfacility communication.

I hope this list is helpful, as you develop your compliance plans.  There are many other areas that are sure to be included in the revenue cycle portion of hospital compliance plans such as readmissions, inpatient orders, electronic health records incentives, and lengthy observation stays. However these five areas are those that I feel are most troubling and will see changes in 2012.  We will watch for any developments and keep you posted through the blog.  Have a great 2012!

Physician supervision clarification still causing confusion

In the calendar year (CY) 2012 OPPS Final Rule, CMS once again amended the regulations for supervision of hospital services, and once again CMS seems to have made unclear clarifications that are stirring up controversy.  The crux of the confusion is around its amendment of 410.27, the regulation containing coverage requirements for hospital outpatient therapeutic services furnished incident-to a physician’s service. CMS expanded the definition of incident-to services to include all services that are not diagnostic.

Previously, the regulation appeared to be limited to services provided incident to a physician’s service and covered under a specific provision of the Social Security Act that describes coverage of hospital outpatient departments services provided incident to.  This limitation seemed to indicate that other services such as physical therapy (PT), occupational therapy (OT) , speech language pathology and radiation therapy, which are covered under other provisions, did not have to meet the requirements in 410.27, most notably the supervision requirements.

However, in the OPPS final rule, CMS discussed its belief that all covered outpatient therapeutic services are provided incident to a physician’s service and therefore the requirements in 410.27 would apply to all therapeutic services regardless of which section of the Social Security Act covers them.  CMS indicates this is a longstanding position that is founded in guidance that pre-dates OPPS; however, it has been a common source of debate amongst healthcare lawyers and providers for some time.

So does this mean that PT, OT, and speech therapy (ST) have to meet the direct supervision requirements in 410.27? Well, not exactly.  CMS said in the OPPS final rule commentary section, that the requirements only apply to services paid under OPPS or paid to critical access hospitals (CAH) on a cost basis. This is good news for prospective payment system hospitals because PT, OT, and ST are paid under the Medicare Physician Fee Schedule and not OPPS.  Radiation therapy on the other hand is paid under OPPS, so those services have to meet the supervision and other requirements of 410.27.

But that good news was not shared by CAHs. CMS’ commentary indicates it would apply the requirements to PT, OT, and ST provided in CAHs because these services are paid on cost basis similar to all other CAH outpatient services.  This creates inconsistency and CMS seems to even acknowledge this in their commentary on pages 74369-70 of the rule.  CAHs have one additional year to come into compliance, because CMS extended the non-enforcement letter one more year; however, that does not resolve the issue of the inconsistency in supervision requirements.

In talking with colleagues recently, there is a concern that we can’t rely on the CMS commentary in the final rule because the plain text of the regulation indicates supervision requirements apply to all non-diagnostic services.  Regardless of how clear that commentary seems now, we have seen this sort of commentary be the subject of CMS clarification in the past and thus totally changing how the commentary was understood by the provider community. Examples include physician supervision within the hospital, critical care billing, lab signatures, observation billing, inpatient-only billing, the three day payment window, etc.

With all that in mind, I think the concern is well-founded. So what’s a provider to do?  For now, I think providers can proceed with the understanding that the requirements don’t apply to fee schedule services, with the exception of our poor friends in the CAH environment.  But providers should also make requests directly to CMS and through hospital associations to amend the regulation if it is truly CMS’ intention to exclude these services from the requirements.

CMS posts OPPS final rule display copy, press release, and fact sheet

Last week, HCPro issued a breaking news story about the 2012 OPPS final rule, which applies to outpatient services provided on or after January 1, 2012.  Although the final rule will not be published in the Federal Register until November 30, CMS has posted a display copy as well as a press release and a fact sheet highlighting some of the changes.  The following are the highlights from those publications:

  • OPPS payment rates will increase by 1.9%, which is slightly higher than the 1.1% that was finalized for the inpatient prospective payment system (IPPS) payment rates.  Overall, PPS hospitals can be thankful that CMS made increases to both outpatient and inpatient services. Hospitals will need to closely monitor their operations as the payment margins continue to be slim from year to year.
  • Cancer hospitals received a positive payment adjustment of 11.3%. CMS granted the increase without adjusting the PPS hospital rates to remain budget neutral. Doing so would have had a major impact on PPS hospitals who can now breathe a sigh of relief.
  • Drugs and pharmacy overhead costs for separately payable drugs and biologicals will be reimbursed at the average sales price (ASP) plus 4%.  This is great news for hospitals as it was anticipated that the final rule would have adopted ASP plus 3% instead.
  • No immediate changes were made to the direct supervision requirements for outpatient therapeutic (non-diagnostic) services for hospitals and critical access hospitals (CAH). However, CMS did finalize that the APC Advisory Panel will conduct further review of outpatient services. CMS added two small rural PPS hospital members and two CAH members to represent their interests to the panel. This means enforcement of direct supervision will be waived for small rural PPS hospitals (100 beds or less) and CAHs for one more year as the panel discusses this further.  This will be an issue that all hospitals will want to monitor closely as it continues to unfold in 2012.
  • CMS also made changes to the hospital value-based purchasing and quality data reporting measures. Most of the changes CMS published in the proposed rule were adopted, which should not come as much of a surprise to most providers.

On the same day, CMS published the press release and fact sheet for the 2012 Medicare Physicians Fee Schedule final rule. Many hospitals have been monitoring the publication of this rule for guidance on the outpatient direct physician supervision requirement. Providers are particularly interested in guidance regarding free standing clinics wholly owned and operated by a hospital and the technical portion of the services as they relate to the three-day payment window. Unfortunately, neither document alludes to what the final rule will include. Hospitals should be aware that the rule will be published in the Federal Register November 28.

CMS announces 2012 OPPS proposed rule

CMS released the OPPS proposed rule almost one month earlier than we usually see it.  CMS proposes an update factor (basically a cost of living increase) of 1.5%, which includes the market basket update of 2.8% less two statutorily required downward adjustments totaling 1.3%. However, they are also proposing to make two additional adjustments related to increases to cancer hospital payments and decreases in partial hospitalization payments that must be budget neutral, which result in an additional .4% decrease.  This means that overall payments on average should increase by a slim 1.1% in 2012 for most OPPS hospitals.

CMS made relatively few changes to individual APCs. One provider friendly change is the addition of new APCs for the CPT codes created last year for CTs of the abdomen and pelvis.  These codes were assigned to existing APCs for payment of CTs, but really represent two former CT codes; their assignment to a new APC representing both procedures allows for more accurate payment for these codes than that current assignments.

Drug payments, on the other hand, are proposed to go down for providers.  Currently CMS pays for non-pass through drugs at average sales price (ASP) +5%, however, they are proposing to reduce this to ASP +4%, and CMS leaves the possibility that in final calculations the rate to hospitals may go down more.

Another consideration is that under the 2012 Medicare physician fee schedule proposed rule, this payment rate for physicians went from ASP +6% to ASP +3%.  This reduction in payment rates for drugs to physicians means hospitals may find themselves doing more injections and infusions of drugs that physicians can no longer afford to provide in their offices.  This happened once before with payments related to certain drugs, and some hospitals found themselves suddenly doing chemotherapy for a volume of patients they were not prepared for.  With this history in mind, hospitals may wish to initiate open communication with physician offices regarding changes to use of drugs in their practices and how it might impact outpatient volumes at the hospital.

And there is an additional concern regarding payment for some of these drugs.  While some of these drugs will be paid at the lower ASP +4% rate, hospitals will simply be paid nothing for others.  Currently, drugs with a mean daily cost of $70 or less are packaged to the procedures that they are provided with and are not paid separately at all.  And this figure is proposed to increase to $80 next year – a large increase considering that in the past it has increased by increments of $5 every couple of years.

In addition to payment proposals, CMS addresses the policy question of physician supervision again this year.   CMS discussed an independent review process for the level of supervision that should apply to outpatient therapeutic services, similar to the different levels of supervision that apply to outpatient diagnostic services.   CMS plans to use the existing APC Advisory Panel and add members to represent CAH hospitals who would not currently be represented.  In the mean time, CMS proposes to extend non-enforcement of the supervision regulations through 2012 for CAHs and small rural hospitals.

CMS has stated they believe direct supervision should be the default level of supervision and services will be evaluated to determine if a more appropriate level (general or personal) should apply.  They will be evaluated at the request of a stakeholder or CMS; if too many requests are received, CMS proposes to prioritize those requests by volume, amount of expenditure, and the frequency and repetition of requests from stakeholders.  CMS proposes to require requestors provide justification for the request and clinical evidence, if possible.  The panel will consider the complexity of the service, acuity of the patient’s receiving the service, probability of unexpected or adverse patient event and the expectation of rapid clinical change during the procedure.

Also of note in the discussion of physician supervision is whether the direct supervision requirements in the regulation apply to only services covered under the hospital “incident-to” provision or whether they also apply to other hospital outpatient therapeutic services.  CMS specifically used the example of radiation therapy and stated that they believe that the supervision requirements “should apply to all these services” “described by benefit categories other than the specific ‘incident to’ provision”, presumably including radiation therapy.

Implementation of the CY 2011 OPPS final rule begins

As you are aware, the most significant changes to the Medicare rules that apply to outpatient hospital services under the OPPS become effective as of the beginning of the calendar year. Although CMS publishes updates to these rules on a quarterly basis during the CY, the most important updates are those that are published effective January 1. These updates are published in the form of transmittals reflecting substantive changes to the Medicare Claims Processing Manual (MCPM) and the Medicare Benefit Policy Manual (MBPM).  Hospitals are encouraged to read each of the initial quarterly updates for CY 2011 in considerable detail to assure that they are implementing the new rules timely and effectively.

In addition to a general summary of the most significant changes, CMS provides corresponding instructions to the contractors on how to implement these changes.  CMS also includes the related language reflecting these changes that is being incorporated into the respective substantive manuals.

Key OPPS policy updates included in MCPM Transmittal 2130 include the following (which is not an exhaustive list):

  • Updates to device/procedure edits;
  • Updates to multiple imaging composite payments (including those specific HCPCS codes included in the three imaging families and subject to composite payment);
  • Updates to the mental health services composite and partial hospitalization APCs;
  • Reporting of certain outpatient hospital services provided in connection with critical care;
  • Waiver of cost-sharing for certain preventive services;
  • Billing and payment for drugs, biologicals, and radiopharmaceuticals (including pass-through radiopharmaceuticals and contrast agents subject to payment offsets for predecessor drugs);
  • Payment adjustments available to rural SCHs and EACHs during CY 2011, as well as small rural hospitals and non-rural SCHs and EACHs; and
  • Factors used to calculate outpatient outlier payments.

Key OPPS policy updates included in MBPM Transmittal 137 involve the continuing refinement of coverage requirements for both outpatient hospital diagnostic and therapeutic services.  These refinements primarily focus on the respective physician supervision requirements that apply for particular types of services during specific time frames, including the removal of specific location requirements for the supervising physician or other non-physician practitioner under the “incident to” rules that apply to outpatient hospital therapeutic services provided on and after January 1, 2011.   This transmittal also includes clarification regarding the supervision requirements for “non-surgical extended duration therapeutic services,” for which “direct supervision” is only required during the “initiation” of such services.

As noted above, hospitals are encouraged to thoroughly review these updates as soon as possible to assure that they are fully compliant.  There is a Hospital Open Door Forum call scheduled for later this week, which would provide an excellent opportunity to ask any questions regarding the implementation of these new rules.

Upcoming physician supervision program

Regular visitors to the MedicareMentor Blog will be familiar with the analysis we’ve provided over the years regarding the changes to the physician supervision requirements under the ‘incident to’ benefit. If you find this topic interesting, I encourage you to check out the upcoming (January 6) program Physician Supervision for Hospital Outpatient Services: Comply with Existing Requirements and 2011 Changes.

Our blog contributor Kimberly Hoy is joined by Kathy Dorale (Avera Health) in discussing and explaining the rules. This should be a great program – Kathy has been closely involved in presenting the rural viewpoint to Washington policymakers and she and Kimberly will go over several case studies to show how the rules connect with reality.

See the agenda and read more about the program here.