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The 2010 OPPS final rule released on October 30 contains few surprises, but does finalize two changes that received considerable attention when CMS proposed them.
“The information CMS has finalized for physician supervision and drug reimbursement are two key areas for hospital review, though for slightly different reasons,” says Jugna Shah, MPH, president of Nimitt Consulting in Washington, DC.
Click here to read more.
By Judith Kares, JD, CPC, regulatory specialist for HCPro, Inc., is the author of this week’s note from the instructor.
CMS has released a display copy of the outpatient prospective payment system (OPPS) final rule for 2010, which also includes the 2010 changes to the rules for ambulatory surgery centers (ASCs). This final rule will be published in the Federal Register on November 20. In terms of reimbursement, OPPS hospitals that meet quality indicator reporting requirements for 2010 are entitled to the “full update,” which will result in a 2.1% increase in their payments for 2010. Those OPPS hospitals that do not meet their quality indicator reporting requirements will be subject to a reduced update of 0.1% in 2010. ASCs, on the other hand, will receive a 1.2% inflation update beginning January 1, 2010.
Among the most anticipated changes in the OPPS final rule are the so-called “incident to” a physician’s services requirements. Most nonphysician outpatient therapeutic services that are provided by hospitals or critical access hospitals (CAHs) are only covered if they are provided “incident to” the services of a physician or another specified nonphysician practitioner.
Click over to the MedicareMentor Blog to read more.
Documentation and coding adjustment on hold; hospitals to receive a 2.1% increase in payments
By Kristen Kohrt, CPC-A
Though many hospitals feared a 1.9% reduction in payment for 2010, they will actually see a 2.1% increase, according to the fiscal year (FY) 2010 IPPS final rule that CMS released July 31.
CMS had originally proposed a documentation and coding adjustment to account for the effect of increases in aggregate payments due to changes in hospital coding practices that it says do not reflect increases in patients’ severity of illness.
The proposed adjustment would have resulted in historically low payments for hospitals and especially penalize hospitals that have yet to develop a clinical documentation improvement (CDI) program, says DeAnne Bloomquist, RHIT, CCS, president and chief consultant for Mid-Continent Coding, Inc. in Overland Park, KS. “I think that means that hospitals can breathe a sigh of relief.”
James S. Kennedy, MD, CCS, a director with FTI Healthcare in Atlanta, agrees. “CMS’ proposed imposition of a documentation and coding adjustment, while logical and consistent with their rules, would have financially disadvantaged hospitals that have not enacted rigorous clinical definition accountability and documentation improvement programs,” he says.
Payment changes
In the proposed IPPS rule, CMS intended to reduce future payment rates “based on the observed increase in spending due to documentation and coding that occurred in fiscal 2008,” according to CMS’ press release. However, because it does not have a full year of data that would show the extent of documentation and coding effects on 2009, CMS decided not to implement the adjustment until it has a full year of FY 2009 data.
This does not mean hospitals won’t see an adjustment in the future, however. The press release also states, “Based on complete analysis of fiscal 2008 and fiscal 2009 data, CMS will consider phasing in future adjustments over an extended period beginning in fiscal 2011.”
“This is basically granting [hospitals] a reprieve,” Bloomquist says.
In the next year, hospitals with CDI programs should continue their initiatives, while those who have not implemented one yet should work toward that goal, says Gloryanne Bryant, RHIA, CCS, CCDS, Regional Managing HIM Director at Kaiser Foundation Health Plan Inc & Hospitals.
“This does not mean that hospitals should slow down or abandon their clinical documentation and coding improvement activities or initiatives,” she says. “Hospitals should be capturing all valid codeable conditions to represent the patient severity, acuity and risk of mortality. We will need to stay tuned on the analysis that CMS will be doing on the data in so far as the possible impact and/or reduction for FY2011.”
“The policies and payment rates in this final rule will ensure that Medicare beneficiaries continue to have access to high quality inpatient care in both short-stay acute care and long-term care hospitals,” said Jonathan Blum, director of the CMS Center for Medicare Management, in CMS’ press release. “In developing the final rule, CMS has paid careful attention to comments submitted by the public to proposals issued in May.”
Quality measures
CMS included in the final rule four new quality measures for which hospitals must submit data under the Reporting Hospital Quality Data for Annual Payment Update (RHQDAPU) program.
The two additions to the existing Surgical Care Improvement Project (SCIP) measure set include the following:
- SCIP Infection (INF) 9 – Urinary catheter removed on postoperative day one (POD1) or postoperative day two (POD2)
- SCIP INF 10 – Surgery patients with perioperative temperature management
The two structural measures include the following:
- Participation in a systematic clinical database registry: Nursing sensitive care
- Participation in a systematic clinical database registry: Stroke care
IPPS hospitals must report these quality measures, along with the 43 other existing measures included in the RHQDAPU program, in order to receive the full market basket update in 2011, according to Bloomquist. “They have to report on these to get their full DRG payments,” she says.
According to the press release, 97% of participating hospitals received the full update last year. Hospitals that do not report data successfully, or at all, in 2010 will receive an inflation update equal to the hospital market basket less two percentage points. With 2010’s inflation rate of 2.1%, that would mean a 0.1% update for non-participating hospitals.
Hospital-acquired conditions
The final rule did not include any additions to CMS’ list of hospital-acquired conditions (HAC). However, it did follow through with the proposed ICD-9-CM coding changes for two diagnoses in the fall and trauma category:
- Torus fracture of ulna (813.46)
- Torus fracture of radius and ulna (813.47)
CMS is still interested in refining the HAC list. The final rule stated that those who commented on the proposed rule “expressed strong support for a robust program evaluation before modifying the HAC list.”
CMS plans on conducting a joint evaluation of the HAC program’s impact, along with sister agencies such as the Department of Health and Human Services, the Centers for Disease Control and Prevention, the Agency for Healthcare Research and Quality, and the Office of Public Health and Science.
“It’s very important for providers to comment as to what these HACs should be and to even ask CMS whether there should be some sort of severity or case mix adjustment,” Kennedy says.
Wrong surgery codes
CMS followed through with its proposal of two new E codes to signify wrong surgery, and the revision of the title for another E code, E876.5 – performance of wrong operation/procedure on correct patient. The two new codes are:
- E876.6 – Performance of operation/procedure on patient not scheduled for surgery
- E876.7 – Performance of correct operation/procedure on wrong side/body part
MS-DRGs
CMS did not include any major policy changes related to MS-DRGs or their relative weights. In the proposed rule, CMS invited public comment regarding a request to move ICD-9-CM procedure code 88.59 (intraoperative fluorescence vascular angiography [IFVA]) from MS-DRGs 235 and 236 (coronary bypass without cardiac catheterization with and without MCC, respectively) into the following two MS-DRGs:
- MS-DRG 233 (coronary bypass with cardiac catheterization with MCC)
- MS-DRG 234 (coronary bypass with cardiac catheterization without MCC)
In the proposed rule, CMS discussed analysis which showed these cases would be overpaid if they were reclassified as requested. They accepted public comment anyway, but ultimately decided against reclassification because the data did not support it.
CMS’ general lack of changes regarding MS-DRGs and their flaws is unfortunate, Kennedy says. There are some conditions that should be CCs or MCCs and others that are CCs or MCCs, but shouldn’t be, he says. This is why it is essential for the public to provide strong commentary and suggestions, he adds.
“CMS reminds us that proposed MS-DRG changes for next year should be submitted by December 1, 2010 so that they can be fully vetted by their staff and considered in the proposed rule for next year,” Kennedy says.
MCCs and CCs
Additions to the MCC list include:
- 277.88, Tumor lysis syndrome
- 670.22, Puerperal sepsis, delivered, with mention of postpartum complication
- 670.24, Puerperal sepsis, postpartum condition or complication
- 670.32, Puerperal septic thrombophlebitis, delivered, with mention of postpartum complication
- 670.34, Puerperal septic thrombophlebitis, postpartum condition or complication
- 670.80, Other major puerperal infection, unspecified as to episode of care or not applicable
- 670.82, Other major puerperal infection, delivered, with mention of postpartum complication
- 670.84, Other major puerperal infection, postpartum condition or complication
- 756.72, Omphalocele
- 756.73, Gastroschisis
- 768.73, Severe hypoxic-ischemic encephalopathy
- 779.32, Bilious vomiting in newborn
The lone MCC deletion is 768.7, Hypoxic-ischemic encephalopathy (HIE) due to its deletion as a code. As noted above, 768.73, severe hypoxic-ischemic encephalopathy, is an MCC while below, 768.71 (mild) and 768.72 (moderate) hypoxemic-ischemic encephalopathy are CCs.
The final rule includes numerous CC additions to list, including these noteworthy ones:
- Chronic pulmonary embolism (416.2) – new code
- Chronic venous embolism and thrombosis of upper and lower extremities: axillary, subclavian, jugular veins, etc. (453.5x, 453.6x, and 453.7x)
- Acute venous embolism and thrombosis of upper and lower extremities: axillary, subclavian, jugular veins, etc. (453.8x)
- Puerperal endometritis (670.1x)
- Hypoxic-ischemic encephalopathy, unspecified (768.70)
- Mild hypoxic-ischemic encephalopathy (768.71)
- Moderate hypoxic-ischemic encephalopathy (768.72)
CMS is deleting 453.8, other venous embolism and thrombosis of other specified veins, as a CC since the code was deleted.
Click here for a complete list of the CC and MCC additions and deletions.
ICD-9-CM
ICD-9-CM coding changes were light in the final rule, but commenters had plenty to say about ICD-10-CM and ICD-10-PCS.
According to the rule, several commenters recommended that CMS begin processing and reporting more than nine diagnosis and six procedure codes on their claims, even before the planned October 1, 2013 implementation. Other commenters expressed concern about CMS transparency during implementation steps.
CMS, however, stated in the final rule that it did not consider comments because it did not address ICD-10-CM in the proposed rule; therefore, it did not address it in the final rule, either.
Look for more coverage about the IPPS Final Rule in the upcoming issue of Briefings on Coding Compliance Strategies. To view the final rule, visit www.cms.hhs.gov/AcuteInpatientPPS/01_overview.asp.
Rule calls for $1.05 billion decrease in payments to SNFs
CMS released the final rule for fiscal year (FY) 2010 payment updates to skilled nursing facilities (SNF) on July 28, leaving many industry leaders concerned about the future of long-term care.
A major component of the final rule is the recalibration of the case-mix indexes (CMI), which will reduce Medicare payments to SNFs by $1.05 billion, or 3.3%. The CMI recalibration will correct a FY 2006 projection error, which resulted in an unexpected increase in Medicare payments, and will better align reimbursement with the resources used to care for a resident. Fortunately, this significant cut in Medicare payments will be partially offset by the SNF market basket update for FY 2010, which will result in a $690 million, or 2.2%, increase. Thanks to the market basket update, the total reduction in Medicare payment to SNFs in FY 2010 will be $360 million, or 1.1% lower than FY 2009 payments.
“Although the payment cuts included in the proposed rule are significant and come at a time when many SNFs are already struggling with tight budgets, CMS believes that the cuts should not affect the quality of care provided,” says Diane Brown, a regulatory specialist and Boot Camp instructor at HCPro.
Another important component of the final rule is the finalization of the Resource Utilization Group, Version Four (RUG-IV) for implementation in FY 2011. In the final rule, CMS addressed many comments they received about RUG-IV and provided responses and explanations. Ultimately, CMS plans to implement RUG-IV as it appeared in the proposed rule, with a few minor modifications, such as:
- Fever with feeding tube will be added to the Special Care High category
- CMS clarified that dehydration has been deleted as a qualifier in any category, including the Special Care and Clinically Complex categories
- Respiratory failure in combination with oxygen therapy while a SNF resident will be added to the Special Care Low category
- Oxygen therapy while a SNF resident will be moved to the Clinically Complex category
- A patient will also qualify in the Special Care Low category if one of the following is present along with two or more skin treatments:
- Two or more venous/arterial ulcers; or
- One Stage 2 pressure ulcer and one venous/arterial ulcer
“The simultaneous implementation of the MDS 3.0 and RUG-IV will be a major challenge for facilities but CMS is giving us plenty of time to prepare,” Brown says. “To ensure that the transition is as smooth and successful as possible, SNFs should really begin training their staff and adapting their facility processes now.”
To view the SNF final rule for FY 2010, visit the Resources page on MDS Central.
Though many hospitals had feared a 1.9% reduction in payment for 2010, they will actually see a 2.1% increase, according to the fiscal year (FY) 2010 IPPS final rule that CMS released July 31.
CMS had originally proposed a documentation and coding adjustment to account for the "effect of increases in aggregate payments due to changes in hospital coding practices that do not reflect increases in patient’s severity of illness," according to CMS.
However, CMS states it will continue to research the effects of the MS-DRG transition, including performing a complete analysis of FY 2008 and FY 2009 data. The agency may consider phasing in future adjustments over an extended period beginning in FY 2011, according to a CMS press release.
In addition, CMS expands the number of quality measures hospitals must report to be eligible for a full market basket update in FY 2011. New measures include Surgical Care Improvement Project (SCIP) Infection 9 (Urinary Catheter Removed on Postoperative Day 1 or Postoperative Day 2) and SCIP INF 10 (Surgery Patients with Perioperative Temperature Management).
The agency will not make any changes to the list of hospital-acquired conditions. It will, however, evaluate the impact of the existing policy on hospital practices and care.
To view the final rule, visit www.cms.hhs.gov/AcuteInpatientPPS/01_overview.asp.
Editor's note: Visit the Revenue Cycle Institute later today for additional analysis of the IPPS final rule.
Don’t miss HCPro’s experts’ analysis of the IPPS final rule, which will be released this summer. Join us on August 26 at 1 p.m. for the live audio conference, The Impact of the New and Revised 2010 ICD-9-CM Codes. Register today by calling customer service at 800/650-6787.
CMS issues corrections to 2009 OPPS final rule
On January 26, CMS published in the Federal Register technical corrections to the 2009 OPPS final rule.
CMS announced a temporary delay in the implementation of a competitive bidding program for durable medical equipment, prosthetics, orthotics and supplies. This delay is to incorporate changes from the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) enacted by congress because of concerns surrounding round one bids.
As part of the changes required, CMS will put in place a new Federal advisory committee, terminate the existing contracts that were awarded in round one, and offer a new chance to compete for the contracts in 2009.
Under the interim final rule, which takes effect February 17, hospitals that furnish certain types of equipment and supplies to patients during their stay or on the date of discharge—that have been competitively bid-on—will be exempt from the program. CMS will accept comments on the rule through March. 17.
Sources: Medical News Today, Centers for Medicare & Medicaid Services
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