Krieg DeVault

Medicare auditors are focusing on outpatient drugs, specifically errors in the number of units billed, when auditing hospitals.  Errors tend to stem from mistakes when translating medication doses to billable units and a disconnect between pharmacy information and billing systems.  When hospitals and physicians report outpatient drugs, they use HCPCS codes to specify the dose, then use a multiplier if a larger dose than specified by the HCPCS code is given.  As required by Medicare, hospitals must use the drug’s National Drug Code (“NDC”) to charge Medicare.  Although there is a crosswalk for hospitals to use to translate the HCPCS code to the NDC, the HCPCS code for a specific drug may cross walk to various NDCs.  Unless the hospital is paying close attention, the HCPCS code can inadvertently be crosswalked to an NDC that relates to the HCPCS but is not necessarily the correct NDC.  Hospitals should review the crosswalk to ensure the HCPCS code connects to the correct NDC, as incorrect NDCs can trigger significant overpayments and greatly impact revenue streams.  The six drugs that have been identified as the most vulnerable to billing-unit errors are: Epoetin alfa, Infliximab, Bortezomib, Alteplase recombinant, Alpha 1-proteinase inhibitor, and Immune globulin.   RACs are also focusing on Oxaliplatin and Neulasta and using automated reviews to identify errors for billable units. 

The number of units associated with the HCPCS code should exclude drugs that are prepared but never used and should not reflect the total amount in the vial, although Medicare allows billing for “wasted” drugs in single-use vials.  Ensuring the correct number of units are associated with the HCPCS code is difficult due to a disconnect between pharmacy information systems and billing systems.  To eliminate the disconnect, hospitals may use computer matching programs to align pharmacy and billing data.

It is recommended that if the dose is not a multiple of the HCPCS code, hospitals should round to the next highest unit.  Three steps hospitals can take to reduce the risk of errors and audits are: (1) review billable-unit guidelines and NDC-to-HCPCS crosswalk tables published on the CMS website, (2) validate claims to confirm the number and type of drug units associated with the HCPCS code are correctly calculated, and use predictive modeling to flag potential errors.  Such steps may helps hospitals eliminate errors and reduce overpayments.  If you have any further questions please contact Meghan Linvill McNab at 317-808-5863 or Kristen L. Gentry at 317-238-6288.

In an effort to prevent improper payments rather than recover improper payments after the fact, Medicare administrative contractors (“MACs”) are increasing their prepayment reviews.  Although MACs prepayment reviews have historically focused on the outpatient sector, MACs reviews are moving to inpatient admissions and other inpatient services.  The focus is on admission necessity and coding accuracy as that is where the errors tend to be.  At some hospitals which have already fallen subject to prepayment reviews the MACs are focusing on medical necessity of short stays for 50 MS-DRGs, potential upcoding of complications and comorbidities (“CCs”) or major complications or comorbidities (“MCCs”), and medical necessity of dual-chamber pacemakers.  For example, MACs are raising the question of why patients with CCs were discharged after just one day and whether the surgery implanting the pacemaker meets Medicare’s national coverage decision for pacemakers. Before a prepayment review, some MACs are doing probe audits and if the results are not to their liking, the MAC may suspend payment unless and until the MAC is satisfied the documentation supports the charges.  Furthermore, instead of MACs announcing their prepayment review, they may simply submit the review request as a routine records request or additional development request (“ADR”) which are often overlooked.  An employee in claims processing may receive the ADR, prepare and send in the medical records and then the MAC’s response of whether to pay or not pay the claim, is on the hospital’s accounts receivable and may not be noticed for several months.  Such potential of prepayment reviews should be an incentive to compliance to add prepayment reviews to its tracking of other audits, such as RAC reviews. 

Prepayment reviews may be both positive and negative.  The positives are that the reviews happen not long after the services were provided, so the patients are fresh in the physicians’ minds. Also, prepayment audits may be helpful because they prevent take-backs or losses due to interest and penalties.  The negative side is that prepayment reviews deprive hospitals of cash flow while they await a verdict on the claim and the payment may never be forthcoming.  Regardless, prepayment reviews should be utilized by providers as an education opportunity and to potentially improve compliance.  If you have any further questions please contact Meghan Linvill McNab at 317-808-5863 or Kristen L. Gentry at 317-238-6288.

The Affordable Care Act (“ACA”) requires Indiana Health Coverage Programs (“IHCP”) to revalidate all provider enrollments, applying ACA criteria.  ACA criteria involve screening providers according to their assigned risk level of either high, moderate, or limited.   Providers newly enrolled after January 1, 2012 are screened against the ACA criteria at initial enrollment and will not be revalidated for 3 years (if durable medical equipment of home medical equipment providers) or 5 years (all other providers).  Beginning March 2012, IHCP will begin revalidating providers enrolled before January 1, 2012.  Such revalidations will be scheduled in phases and therefore providers should not begin the revalidation process until they receive a notification letter from IHCP.  Notification letters with instructions will be sent 90 days before providers revalidation deadline with a second notification letter being mailed 60 days before the revalidation deadline.  If a provider has multiple service locations, each location will receive a separate letter and must revalidate individually.  However, rendering providers will not have to revalidate individually, as providers enrolled with a group classification will be responsible for revalidating the rendering providers associated with the revalidating service location.  To ensure providers receive their notification letter, providers should verify the accuracy of the Mail To address on file with IHCP.

Because the revalidation process may take up to twenty business days to process, providers are encouraged to submit revalidation paperwork well in advance of the deadline stated in the notification letter.  If a provider does not timely submit the revalidation paperwork, the provider will be deactivated at the established deadline.  Deactivation will cause claims billed with dates of service on or after the deactivation date to be denied; for providers participating in managed care programs, their members will be reassigned to other primary medical providers (“PMPs”); and members may be denied benefits if they have level-of-care (“LOC”) services or are in the Right Choices Program (“RCP”).   If a provider submits revalidation paperwork after being deactivated and meets all other enrollment requirements, the provider will be re-activated, but because the re-enrollment date cannot be back-dated the provider will have a period that it was inactive.

Future revalidation will occur every 3 years (if durable medical equipment of home medical equipment providers) or 5 years (all other providers) and providers will be notified by IHCP when it is time to revalidate.  If you have any further questions please contact Meghan Linvill McNab at 317-808-5863 or Kristen L. Gentry at 317-238-6288.

The Affordable Care Act  health reform law ("ACA") requires providers to return overpayments to Medicare contractors within 60 days of identifying them, along with an explanation of their cause.  The letters that accompany a Medicare overpayment return (refund) and state the reason for the overpayment can be more problematic that the overpayment itself.  The refund letter should be straightforward and should not admit liability because the government may view the provider’s refund differently than the provider does.  The refund letter should also preserve the defenses and arguments the provider may make if things go awry.  The following language should also be avoided: temporal references, characterization of the cause of the refund as billing fraud, stating a statistically valid sample was used, phrases stating the problem was corrected, and saying “our attorney told us it was ok.”  Temporal references should be avoided, as there is no upside of talking about when the provider discovered the problem, especially now that overpayments are to be returned within 60 days of being identified.   Labeling the cause of the refund as billing fraud, can be construed as a clear admission and should be avoided in the letter.  By using the phrase “possible issues,” a provider may indicate it might have been wrong, but without admitting liability.  A provider should also not state that a statistically valid sample was used unless it is absolutely true.  Phrases stating the provider “corrected the problem” can be dangerous because the provider may not be able to guarantee the problem has been fixed.  Instead it is recommended the refund letter state that the provider took certain corrective actions and then specifically list what actions the provider took.  The refund letter should also avoid stating the provider’s attorney told the provider it was ok, as this may potentially waive the attorney-client privilege.  It is further recommended that providers use the word “refund” rather than “overpayment” to avoid any implicit admission.  The letters should also use “limiting” language and draw lines around the error to ensure Medicare knows the overpayment return relates only to the stated matter.  Providers should also emphasize that the identification of the overpayment is evidence of the effectiveness of the provider’s compliance program. 

It should be noted that some Medicare administrative contractors are requiring providers to send a list of every claim covered by the refund instead of a lump sum and are saying the provider should rebill.  However, providers should carefully and thoughtfully prepare the refund letter to avoid further exacerbating the refund issue.  If you have any further questions please contact Meghan Linvill McNab at 317-808-5863 or Kristen L. Gentry at 317-238-6288.

Telehealth is the delivery of health care through telecommunications, which allows providers to use videoconferencing and other technology to provide certain services to patients in other regions or states.  For Medicare coverage, a patient has to be located in a health professional shortage area not included in a metropolitan statistical area, but the treating providers can be anywhere.  Recent moves by CMS and some states may fuel its use by hospitals, however if a hospital anticipates using telehealth, it should implement compliance measures.  Below is a list of legal and regulatory challenges facing telehealth users. 

Credentialing and privileging. Required credentialing, verification of a provider’s credentials, and privileging, what services providers are qualified to perform, is now easier for telehealth users due to a recent change in credentialing and privileging rules by CMS.  CMS now allows hospitals and critical access hospitals to rely on credentialing and privileging conducted by the distant-site facility for telemedicine practitioners providing telemedicine services, however there must be a written agreement between the facility that credentials and privileges the provider and the facility where the patient presents.

State licensure. Although about 20 states still require providers to have licenses in the states where patients are located, there is a movement of reducing state licensure barriers based on the excitement for telehealth.  For example: 10 states have special telehealth licenses; a few states have reciprocity, so a license in one state is the same as a license in another for telehealth purposes; and some states allow an exception for consultations.

Prescribing.  Many states have different approaches to prescribing using telehealth, but there is some movement with states liberalizing prescribing laws.  For example, Virginia allows physicians to prescribe drugs via telehealth if the physician has a bona fide relationship with the patient, in which the physician has conducted a physical exam either physically or using instruments and diagnostic equipment through which images and medical records can be transmitted electronically.

Medicare coverage and reimbursement. Medicare covers 20 categories of telehealth services.  Such services will be covered if the patient is seen at approved originating sites and the service is performed at distant sites by physicians, clinical psychologists, nurse practitioners, physician assistants or other designated clinicians.

Medicaid coverage. About 39 state Medicaid plans reimburse telehealth.  Although Medicaid’s definition of “telehealth services” is modeled on Medicare’s, CMS allows states to decide whether to cover telehealth and which services to pay for.

Private insurance coverage.  Only a few states require private pay insurance to cover telehealth and reimbursement of telehealth is generally lower than comparable face-to-face meetings. 

Anti-kickback fraud and abuse.  Although distant sites and vendors may give originating sites expensive telehealth equipment to allow telehealth encounters, this may trigger the anti-kickback statute for giving or receiving free items or services.  However, telehealth arrangements may escape through the anti-kickback law’s safe harbors for space rentals, equipment rentals, personal services and management agreements, or donations for electronic health record technology and e-prescribing.  When determining whether a telehealth arrangement creates a kickback risk, the provider shall consider whether (1) a subsidy for telehealth resulted in referrals; (2) something of value was offered, requested or changed hands; (3) the conduct was willful; (4) patients were informed of the inducements; (5) providers knew about the kickback law, and if so, whether there was a relevant safe harbor; and (6) a federal health program pays for some or all of the telehealth services.

HIPAA privacy and security. Because some telehealth providers communicate with patients using Skype, GoogleTalk or ooVoo, the protected health information is not encrypted.  Providers should create a HIPAA authorization form and consent form for certain technology in which the potential risks and consequences are disclosed.

Although telehealth is becoming more popular, the above listed risks should be considered and addressed by providers before making the move to using telehealth.  If you have any further questions please contact Meghan Linvill McNab at 317-808-5863 or Kristen L. Gentry at 317-238-6288.

The 5% reduction in reimbursement for inpatient and outpatient hospital services was extended through June 30, 2013.  HP, the IHCP claims processing contractor, found that encounter inpatient risk-based managed care claims received from July 1, 2011 to present and processed through IndianaAIM for payment of the medical education payment, were not reduced by the 5%.  As such, HP will mass adjust the encounter inpatient claims and reduce the medical education payment by 5%.  Such adjustment will appear on Remittance Advices, beginning March 20, 2012, as an accounts receivable and will have an internal control number that begins with region code “56.”  The overpayment will be recouped at 100% from future claims paid to the respective provider number.  If you have any further questions please contact Meghan Linvill McNab at 317-808-5863 or Kristen L. Gentry at 317-238-6288.

Indiana Health Coverage Programs (“IHCP”) has linked Healthcare Common Procedure Coding System (“HCPCS”) code G0365 – Mapping of vessels for Hemodialysis access, which has a maximum reimbursement rate of $152.13, to the following revenue codes: 320 – Radiology, diagnostic;, 323 – Diagnostic x-ray, arteriography; 329 – Diagnostic x-ray, other; 402 – Ultrasound; and 409 – Other imaging services, for dates of services on or after April 15, 2012.  Providers should bill the procedure code with the TC – Technical component modifier and the revenue code together for reimbursement.  If you have any further questions please contact Meghan Linvill McNab at 317-808-5863 or Kristen L. Gentry at 317-238-6288.

The False Claims Act received a boost from the health reform law passed in March 23, 2010.  Although there does not seem to be a lot of qualitative changes, in that recent cases do not necessarily relate to the new amendments, there are a lot of quantitative changes with an overall increase in the number of false claims cases filed.  In 2011, Federal health care fraud enforcement resulted in more than $4.1 billion in recoveries, $2.4 billion of which was attributable to civil health fraud cases brought under the False Claims Act.  As a large amount of settlements are coming down the pike, false claims recoveries are forecasted to reach about $10 million this year. These settlements include hospitals, home health and hospice companies as well as a few large-dollar cases with pharmaceutical companies.  

Although cases usually drag on and remain hush-hush for years, cases are now beginning to remain under full seal for only one and a half to two years as U.S. attorneys’ offices are reaching out to defendants earlier, with permission of the judge, to inform the defendants that a case has been filed under seal and ask that they cooperate in the investigation.  Such cooperation entails the defendant submitting medical records and simultaneously conducting a self-audit of a sample of claims and reporting the results to the government.  Because such cooperation involves only a partial unsealing, the identity of the whistleblower remains confidential. 

The government is said to be working on the false claims act part II which will reduce fraud by changing the corporate culture.  This change in corporate culture will cause middle managers, regional managers, and top managers to be excluded from federal health program if they break the law.  HR 675, the Strengthening Medicare Anti-Fraud Measures Act of 2011, authorizes the HHS Office of Inspector General to exclude officers and managers who are affiliated with “sanctioned” entities (i.e., entities that are excluded or convicted) even if the officers or managers leave the entity before the entity is excluded.  The House passed this bill in 2011, but the Senate adjourned before it had a chance to vote on the bill.  

Whistleblowers are also becoming more prevalent in the healthcare realm as under the Dodd-Frank Act, whistleblowers can report publicly traded companies for violations of the securities law and collect a share of the fines or penalties recovered.  Therefore for-profit health care organizations are now open to whistleblowers.  The Foreign Corrupt Practices Act (FCPA), which penalizes companies that pay bribes to foreign officials in order to get business, and requires companies to meet accounting standards, is also a risk for health care organizations.  This is because health care organizations are now going global; and hospitals and other health care entities in other countries are often controlled by government, so hospital employees are government employees and considered foreign officials under FCPA. So for example, if a salesperson pays hospital employees to choose their medical device, or an executive bribes a city official in a foreign country for approval to build a clinic, the organization may have violated the FCPA.  Because bribes are not booked, the company’s books are not correct, so then a company employee can act as an SEC whistleblower for the violation of the accounting provisions of the FCPA.  Such changes in the False Claims Act and the recent use of SEC whistleblowers and FCPA violations on health care organizations is putting increasing pressure on health care organizations to properly report transactions to avoid cases and high-dollar settlements.  If you have any further questions please contact Meghan Linvill McNab at 317-808-5863 or Kristen L. Gentry at 317-238-6288.

More problems are arising with hospitals and their recovery audits.  One problem that is arising during the appeal process is due to a change in the way appeal-filing deadlines are calculated.  One Medicare Administrative Contractor (MAC) starts the appeal deadline countdown from the date on the Medicare remittance advice, not the demand letter.  Because the remittance advice is sent electronically, it is received by the hospital before the demand letter, so starting the appeal clock from the remittance advice date shortens the amount of time hospitals have to prepare appeals.  This is causing more appeals to be rejected by MACs because the appeals miss the 120-day filing deadline based on the receipt of the remittance advice, not the demand letter.  In one case the demand letter stated the appeal was due within 120 days of receipt, but the MAC still rejected several appeals for not being filed within 120 days of the date of the Medicare remittance advice.  In several cases where there were unreturned overpayments and other requests or incorrect denials by MACs and RACs it has taken months to receive a reply and resolution.  Part of the problem also stems from remittance advices being sent to different individuals at the hospital than demand letters are sent to.  Some MACs accept requests to send demand letters to a designated person  at the hospital, but they are not obligated to do so.    There is also frustration on the physician side with documentation improvement and denial management.  It is recommended that data on cases that were denied, due to missing or erroneous documentation, be shared with physicians, so hopefully learning about how much money was lost due to the denied claims will cause physicians to change their behavior.  If you have any further questions please contact Meghan Linvill McNab at 317-808-5863 or Kristen L. Gentry at 317-238-6288.

A recent IHCP Newsletter published an article regarding the various requirements for disenrolling certain Medicaid enrollees.  When Indiana Health Coverage Program (“IHCP”) members transition to a long-term care facility, a psychiatric residential treatment facility (“PRTF”), hospice care, a waiver program, or to the 590 program; the member must be disenrolled from the Hoosier Healthwise risk-based managed care (“RBMC”) program.  Until Hoosier Healthwise disenrollment occurs, fee-for-services (“FFS”) claims, except for carved-out services, for these members will be denied.  

Long-Term Institutional Care

                The nursing facility or ICF/MR must request a Pre-Admission Screening Resident Review (“PASRR”) for facility placement before admission and notify the member’s managed care entity (“MCE”) of the PASRR request within 72 hours of admission. The State will then approve the PASRR request and designate the appropriate level of care in IndianaAIM, which will automatically trigger RBMC disenrollment and result in same-day processing for disenrollment and level of care. If the provider fails to verify an IHCP member’s coverage or fails to contact the MCE within 72 hours, the provider is responsible for charges incurred until the member is disenrolled from the MCE.  If the provider does not complete the paperwork for the appropriate level of care determination, and the member is still enrolled in Hoosier Healthwise after two months, the MCE is no longer liable for payment, and as long as the patient remains a member of the MCE, and FFS claims will be denied.  If the member’s PASRR is in processing while the member is linked to an MCE, the financial responsibility lies with the MCE for up to 60 days.  However, an MCE may obtain services for its members in a nursing facility for a short-term stay, less than 30 days, and the MCE may negotiate rates for reimbursing the nursing facilities for these short-term stays.

Psychiatric Residential Treatment Facility Services

                Before a PRTF can be reimbursed for FFS claims for a Hoosier Healthwise member, the member must be disenrolled from the MCE.  The PRTF must fax a PRTF prior authorization (“PA”) request to the PA vendor, ADVANTAGE Health Solutions, at 1-800-689-2759.    The PRTF must also contact the MCE before the member is admitted to the PRTF, or immediately upon admission, if advance notice is not feasible.   ADVANTAGE will approve the PA request, then enter the PRTF level of care in IndianaAIM which will automatically trigger RBMC disenrollment and provide for same day processing.  Upon discharge, the PRTF must notify ADVANTAGE, and ADVANTAGE will end-date the level of care for the member.  If the member is still eligible for RBMC, the auto-assignment process will immediately reassign the member to the member’s previous MCE, effective the first or 15^th of the month, depending on the disenrollment date.

Hospice Care

                Although hospice care is not covered under Hoosier Healthwise, terminally ill members may qualify for hospice care under the FFS Medicaid program upon disenrollment from RBMC.  Hospice providers must fax a hospice election form to ADVANTAGE at 1-800-689-2759 and contact the MCE the member is enrolled in.  ADVANTAGE will approve the request and designate the appropriate hospice level of care in IndianaAIM, which will automatically trigger RBMC disenrollment providing same day processing.  RBMC disenrollment documentation should be faxed to (317) 810-4488.  MCEs are required to coordinate care for its members who are transitioning into hospice and give the hospice provider any information necessary to complete the hospice election form.

Home and Community-Based Waiver Services

                Home and Community-Based Waiver Services (“HCBS”) are excluded from Hoosier Healthwise, and therefore members approved for waivers must be disenrolled from RBMC.  The MCE must coordinate care for a member during the member’s transition to HCBS, until disenrollment is effective.  The case manager must submit a Notice of Action to the Division of Disability and Rehabilitative Services (“DDRS”) for autism, developmental disabilities, and support services waivers; or the Division of Aging (“DA”) for aged and disabled, and traumatic brain injury waivers.  The appropriate division will review the waiver designation request and enter a waiver level of care into IndianaAIM, which will automatically disenroll the member from RBMC, effective the date the level of care was processed.  If a retroactive level of care date is entered, the disenrollment date will be the “processing date.”

Medicaid-to-590 Program Disenrollment

                Hoosier Healthwise members being transitioned to the 590 program must be disenrolled from RBMC.  As most members seeking enrollment in the 590 program are on disability Medicaid and not in Hoosier Healthwise, the facility must send a request to suspend Medicaid, to the county casework of the Division of Family Resources Service Center.   The facility must then fax State form 32696 E/D/T (Enrollment/Discharge/Transfer) to the HP Eligibility Unit at (317) 488-5217, to enroll the member in the 590 Program.   The HP Eligibility Unit will enter the enrollment and fax the completed for back to the facility, which will trigger RBMC disenrollment, effective the same day.   If you have any further questions please contact Meghan Linvill McNab at 317-808-5863 or Kristen L. Gentry at 317-238-6288.

New CMS guidance states that hospitals should bill Medicare for outpatient services when they have no physician order and inform patients before discharge if they are shifted from inpatient to outpatient status.  When a hospital service or procedure can be provided in fewer than 24 hours, and is not a surgical procedure on the Medicare inpatient-only list, Medicare administrative contractors (“MACs”) and recovery auditor contractors (“RACs”) are frequently finding that outpatient status would have been the most appropriate status setting.  In a new MLN Matters article (SE 1210) CMS states that RACs have found that inpatient admissions are often not supported for renal and urinary tract disorders and warns hospitals about medically unnecessary admissions for such procedures.   CMS also discusses general inpatient medical necessity versus outpatient status and observation and states that when an observation patient is subsequently admitted based on an inpatient order, the admission must be medically reasonable and necessary at the time the order is written. 

Although a physician order is not explicitly required for admission, a clearly documented admission order has become a de facto inpatient admission requirement.  CMS recommends that when a physician neglects to specify status on an order, hospitals should default to the outpatient setting.

Condition code 44 allows hospitals to salvage outpatient payments when the hospital realizes the inpatient admission will not pass medical-necessity muster, as long as the treating physician and utilization review committee agree.  However, the hospital must notify the patient before discharge if the physician admits them as inpatient but want to change their status to outpatient.  The hospital must give the patient adequate notice of the status change and it is recommended that the hospital place a letter explaining the implications of the status change in the patient’s paperwork and make sure the patient certifies they understand.  If you have any further questions please contact Meghan Linvill McNab at 317-808-5863 or Kristen L. Gentry at 317-238-6288.

Wound care centers are under increased scrutiny by Medicare administrative contractors (“MACs”) and will be a big target when recovery audit contractors (“RACs”) expand their scrutiny of medical necessity from the inpatient to the outpatient side.  Because wound care centers are very complex, and do not have a special designation, often times care is not properly and adequately documented causing centers to be a target upon MAC or RAC review.  Clinicians and coders need to understand the difference between documenting indications and documenting medical necessity.  Indications are the diagnoses, while medical necessity documentation provides evidence that services are used correctly and patients are improving.  Auditors are looking for medical necessity spread throughout the patient’s chart, like a story.  Clinicians and coders also need to be aware of documentation challenges with electronic health records (“EHRs”).  Even if they are putting a lot of data into field, if the software does not have the payers’ logic written into it behind the screen or the clinicians are not consistent in their entries, it may not translate the data into a compliant medical record.

Another challenging area for hospitals is the new codes for wound care on the outpatient side.  CPT 2011 update changed the definition of CPT codes 11042 to 11044: CPT 11042 is “debridement, subcutaneous tissue” (which is skin), 11043 is “debridement, muscle and/or fascia,” and 11044 is “debridement, bone” (which includes skin and muscle along the way).  Debridement is reported according to the depth of the tissue removed and by the surface area of the wound.  CPT  codes 11042, 11043, and 11044 are for the first 20 square centimeters of the wound, and there are three add-on codes for additional increments of 20 square centimeters (11045 for skin, 11046 for muscle, and 11047 for bone).  Also, effective January 1, 2012, the CPT book deleted 24 skin biologic and skin-substitute codes that were linked to products and replaced them with eight new application codes (15271-15278) which are grouped by the size of the wound and location on the patient’s body.  Skin-substitute products will still have unique HCPCS codes, but they must be used with the eight new application codes.  As skin substitutes are considered a drug/biologic, any part of the sheet that is discarded must be reported to Medicare as waste.

Because wound care is subject to repetitive billing to Medicare, hospitals may lump the wound care services over a thirty-day period on one claim.  However, MACs want expensive therapies and modalities to be reported on the claim with a primary code to ensure they correlate to the patient’s problem and Medicare coverage.  This is problematic when multiple services are provided in the same month and their primary diagnoses vary because the hospital UB-04 claim form has only one primary-code box available, and MACs may deny the claim if the primary diagnosis code doesn’t support all the services on the claim.

All CPT codes on Medicare claim forms must be linked to a revenue code, but because wound care centers do not have their own revenue code, the wrong revenue code is often used, which will affect hospital reimbursement through the cost report.  Most services performed at wound care centers are reported with the revenue codes for clinic or treatment rooms (0761 and 0510). To improve wound care center compliance and reimbursement, clinic managers, billers, coders, registration, and compliance department should trained on proper coding of services at wound care centers.  If you have any further questions please contact Meghan Linvill McNab at 317-808-5863 or Kristen L. Gentry at 317-238-6288.

The Indiana Medicaid migration to International Classification of Diseases, Tenth Edition (ICD-10) remains unaltered as the Centers for Medicare & Medicaid Services (“CMS”) has not offered a set time line for the ICD-10 implementation.  Further information will be forthcoming, as soon as CMS provides definitive guidance regarding implementation dates.  If you have any further questions please contact Meghan Linvill McNab at 317-808-5863 or Kristen L. Gentry at 317-238-6288.

Effective January 1, 2012, the Indiana Health Coverage Programs (“IHCP”) expanded the provider enrollment classifications to include comprehensive outpatient rehabilitation facilities (“CORFs”) and independent diagnostic testing facilities (“IDTFs”).  CORFs and IDTFs may enroll in the following IHCP programs: traditional Medicaid, Assistance to Residents in County Homes (“ARCH”), 590 Program, Hoosier Healthwise, and Care Select.  CORFs and IDTFs are enrolled under the moderate risk category and are subject to an application fee during enrollment or revalidation. 

A CORF is a facility primarily engaged in providing outpatient rehabilitation services to the injured or disabled, or patients recovering from illness with a plan of treatment under the supervision of a physician.  CORFs are required to provide outpatient mental health services (405 IAC 5-20-8), physical therapy and physician services; and may provide speech-language therapy and occupational therapy services.  CORFs should use provider type code “04-Rehabilitation Facility” and provider specialty code “041-Comprehensive Outpatient Rehabilitation Facility.”   The billing criteria states CORF services should be billed on a CMS-1500 Professional claim form or the Health Insurance Portability and Accountability Act (“HIPAA”) 837P transaction using place-of-service code 62-CORF. 

An IDTF is a diagnostic testing facility that is independent of a physician’s office or hospital and furnishes diagnostic tests but does not use test results to directly treat patients.  An IDTF can be differentiated from similar facilities by ownership structure and types of services provided.  Before enrolling in IHCP, an IDTF must be enrolled in Medicare where it will be required to provide a list of all the Current Procedural Terminology (CPT®1) and Healthcare Common Procedure Coding System (HCPCS) codes for the services to be performed as well as a list of equipment used to perform the tests.  In order to perform additional tests not on the original Medicare application, the IDTF will need to amend its Medicare application to add codes and equipment.  An IDTF must also employ at least one supervisory physician, not a physician group practice, who is proficient in the performance and interpretation of each type of diagnostic procedure performed by the IDTF.  IDTFs should use provider type code “28-Laboratory” and provider specialty code “282-Independent Diagnostic Testing Facility” or “283-Independent Diagnostic Testing Facility, Mobile.”  The billing criteria states IDTF services should be billed on a CMS-1500 Professional claim form or HIPPA 837P transaction using place-of-service code 81-Independent Laboratory.  If you have any further questions please contact Meghan Linvill McNab at 317-808-5863 or Kristen L. Gentry at 317-238-6288.

CMS issued a new memo on hospital orders from physicians and other practitioners, which supersedes the November CMS Transmittal 72.  The transmittal provided that rehab and respiratory care performed in a hospital outpatient department must be ordered by a “qualified and licensed practitioner” who had privileges at the hospital.  The new memo states that outpatient services in hospitals may be ordered by a practitioner who is: responsible for the care of the patient; licensed in or holds a license recognized in the jurisdiction where the practitioner sees the patient; acting within scope of practice under State law; and authorized by medical staff to order such outpatient services under a written hospital policy.  Although the transmittal was more restrictive in that it required the practitioner to have privileges at the hospital, it only applied to rehab and respiratory care.  The new memo, only requires that the practitioner satisfy the hospital’s policies for ordering outpatient services; but expands to apply to all outpatient services.  Hospitals that lack proper orders may be cited for deficiencies under the Medicare conditions of participation, which would put their Medicare billing privileges at risk.

The Middle Class Tax Relief and Job Creation Act of 2012 extends a cap on outpatient therapy to hospital outpatient departments.  Under this provision, when services exceed the outpatient therapy caps, hospitals must go through an “exceptions process” with the Medicare administrative contractor (“MAC”), which will trigger manual medical review to determine whether the services are medically necessary and therefore reimbursable by Medicare.    There is a dual cap for speech and physical therapy: the first level of the combined cap is $1,880 and has an automated exceptions process through the MAC; the second level is $3,700 and requires a manual exceptions process.  There is a separate $3,700 cap for occupational therapy.  When payment for services exceed the $3,700 per-beneficiary cap, hospitals have to add the KX modifier on claims to make that clear to Medicare contractors.  The cap will be based on claims for services provided on or after Jan. 1, 2012, although the manual reviews begin on Oct. 1, 2012.  If a hospital does not inform Medicare when exceeding the cap, the hospital will deal with billing, operational and compliance demands and increased scrutiny from Medicare administrative contractors.  If you have any further questions please contact Meghan Linvill McNab at 317-808-5863 or Kristen L. Gentry at 317-238-6288.

As auditors from the HHS Office of Inspector General (“OIG”) begin Medicare compliance reviews of hospitals, here are some tips on what to expect from hospitals who have already went through the review process.  During the review, which may last several months, the auditors are on site in a designated room and may request access to the Internet, a copier, a phone and a fax machine.  These are a different kind of audit and instead of focusing on one error type, OIG audits seven to ten errors types, picking from a menu of thirty risk areas identified by OIG for these reviews.  OIG may tell the hospital it is reviewing a certain risk area but then go in another direction, and once auditors are inside a chart, they can review the chart for anything.  OIG is also doing “concurrent audits,” where OIG will review one item, the hospital will self-audit another item, they switch and audit/self-audit, then review their findings together and compare notes. It is recommended that hospitals view audits as an educational opportunity.  Hospitals should ask questions and potentially make a few changes in response to the Medicare compliance review.   If you have any further questions please contact Meghan Linvill McNab at 317-808-5863 or Kristen L. Gentry at 317-238-6288.

Place-of-Service (“POS”) codes allow CMS to pay for services based on where the physician performs the services.  CMS pays physicians more when they perform services in their offices than in outpatient or inpatient departments, because in the case of services provided in an outpatient or inpatient department, hospitals pick up the tab for overhead and recover it through facility fees.  CMS has revised its national policy on POS coding due to errors identified by the HHS Office of Inspector General (“OIG”).  In a new Medicare transmittal (2407), CMS states that POS codes must be assigned based on where the beneficiary received the face-to-face encounter with the physician, nonphysician practitioner (“NP”) or other supplier.  This allows the point of service to follow the patient as opposed to the doctor and bases the payment on where the patient receives the service, not where the physician performs the professional component.  CMS provides an exception for inpatient and outpatient services, because the facility payment is bundled into the inpatient and outpatient prospective payment systems even if a specific service is performed at another site as part of hospital treatment.  Therefore, for a service rendered to a patient who is an inpatient of a hospital (POS code 21) or an outpatient of a hospital (POS code 22) the facility rate is paid regardless of where the face-to-face encounter occurred.  Proper coding of POS is important as POS coding has been identified as a major cause of improper errors by OIG and recover audit contractors and is a target on the OIG 2012 Work Plan.  If you have any further questions please contact Meghan Linvill McNab at 317-808-5863 or Kristen L. Gentry at 317-238-6288.

Two cases have been settled to resolve allegations that the hospital billed Medicare for admissions for Gamma Knife treatment that could have been performed on an outpatient basis. Gamma Knife treatment, formerly known as stereotactic radiosurgery, uses focused radiation to treat tumors, vascular deficiencies and other neurological conditions without damaging outlying tissue and is often performed on an outpatient basis without general anesthesia.  Patients that stay overnight for a procedure are not necessarily considered inpatients.  The Medicare Benefit Policy Manual (Chapter 1, Section 10) specifically states that patients undergoing minor procedures who are expected to require fewer than 24 hours of care often should be considered outpatients even if they spend the night in the hospital.  This is often referred to as “outpatients in a bed” and APC payments under the outpatient prospective payment system include reimbursement for postoperative care up to 24 hours, including routine postoperative observation and monitoring.  When determining whether a patient requires admission, the factors to consider on a case-by-case basis are: whether the procedure is on the Medicare inpatient-only list, whether the patient is expected to require more than 24 hours of care and whether the patient has increased risk or comorbidities that would require care in the inpatient setting.  Because RAC auditor decisions are typically limited to what a chart supports, sufficiently-documented charts are key.  Even when inpatient admissions may be justified, insufficient charted evidence will require denial.  Therefore physicians should include all details, such as frequency of necessary vital signs or neuro checks, and distinguish between the term “admit” for observation versus “admit” for inpatient bed.  If you have any further questions please contact Meghan Linvill McNab at 317-808-5863 or Kristen L. Gentry at 317-238-6288.

The Internal Revenue Services ("IRS") issued an Action on Decision (“AOD”) regarding the issue of whether hormone therapy and sex reassignment surgery constitute medical care under §§213(d)(1)(A) and (9)(B) and are therefore a deductible expense. §213 of the Internal Revenue Code allows a deduction for expenses paid during the taxable year, not compensated for by insurance or otherwise, for medical care of the taxpayer. Medical care includes amounts paid for the treatment of disease, but does not include amounts paid for procedures directed at improving the patient’s appearance, that do not meaningfully promote the proper function of the body or prevent or treat illness or disease. The Tax Court decided in a recent case that the plaintiff's gender identity disorder is a disease within the meaning of §§213(d)(1)(A) and (9)(B) and because the hormone therapy and sex reassignment surgery treat the disease the plaintiff may deduct the expenses for medical care under §213.   Employer sponsored Group health plans, including health reimbursement accounts, flexible spending accounts and medical savings accounts, are subject to Section 213.  Therefore, these types of expenses are reimbursable under these plans unless the employer specifically excludes such expenses.  If you have any further questions please contact Meghan Linvill McNab at 317-808-5863 or Kristen L. Gentry at 317-238-6288.

TrailBlazer Health Enterprises, a Medicare administrative contractor (MAC), has provided guidance on spinal fusion (MS-DRG 460) which has become an area of increased scrutiny by CMS because of the growth in billing volume. The most common reason for denial of payment for spinal fusion-related hospital care is the lack of specific information about conservative care administered before the surgical intervention, but often times this missing information may exist in the outpatient records of the surgeon, primary care physician or other practitioner. To reduce audit errors caused by information missing from the hospital record, the hospital should proactively obtain previous diagnostic and therapeutic records from the surgeon and other practitioners including physical assessments, physician history and physical, progress notes, consultations, physical and occupational therapist evaluations and notes, radiology reports and therapeutic procedure notes. The practitioners should also either create clinically meaningful inpatient records or supply the hospital with relevant documents from their outpatient records. By including adequate history of the presenting illness it will improve the likelihood of payment of the hospital claim and payment of physician services performed in conjunction with the hospital stay.  If you have any further questions please contact Meghan Linvill McNab at 317-808-5863 or Kristen L. Gentry at 317-238-6288.