Get a Jump on 2013 Government Reviews

By Jillian Harrington, MHA, CPC, CPC-P, CPC-I, CCS-P

Use this year’s OIG Work Plan to control risk and keep physician compliance programs healthy.

When preparing to close out one calendar year and move to the next, it’s important to review your Medicare compliance efforts. A comprehensive auditing and monitoring program is crucial to yearly compliance planning. Developing a program includes identifying specific items that have been problematic for your medical practice or facility throughout the year. You can derive this information through auditing, by knowing general risk areas for your practice or facility, and from reviewing items discussed in the Office of Inspector General’s (OIG) Work Plan for Fiscal Year 2013 (Work Plan).

The OIG’s annual Work Plan lists specific areas of interest the government intends to investigate throughout the year. Having this information enables health care organizations to identify and correct potential compliance risks before they become a liability.

We’ll begin by examining Part 1: Medicare Part A and Part B as it pertains to the physician practice. Next month, we’ll take another look at this section, focusing on the items that pertain to hospitals.

Part 1: Part B

Many items affecting physician practices are found in the “Other Providers and Suppliers” portion of the Medicare Part A and Part B section. Only a few of these items are directed specifically at physicians, but you’ll want to broaden your focus to include those items that look at Part B services in general.

Assignment Rules and Excessive

“Noncompliance with Assignment Rules and Excessive Billing of Beneficiaries” is not a new item in the Work Plan, but it is important to review.

Start by reviewing your systems, and verifying that you have everything in place to write off appropriate amounts reflective of current Medicare fee schedule rates. Also make sure you are using Advanced Beneficiary Notices (ABNs) when appropriate, and have a solid process in place to use that important tool. For example, ensure you have a system for reviewing medical necessity for procedures and ancillary services performed in your office. This will give beneficiaries the opportunity to make an informed consumer decision about the services they’re about to or will soon receive. It also helps to ensure your practice will be appropriately paid for services rendered.

Place of Service

“Place-of-service Coding Errors” is another familiar item in the Work Plan, reinforcing the need for physician practices to review their place-of-service (POS) coding. The OIG will be looking specifically for services performed in an ambulatory surgery center (ASC) or a hospital outpatient department. In those settings, applying the incorrect POS code may result in an improper higher payment. You’ll want to pay special attention to your POS coding for hospital outpatient-based clinics, hospital outpatient surgeries, and ASC services; your POS code should match the actual place where the services were performed. For example, if your physician is providing services at a facility-based (provider-based) clinic, the POS code is 22 Outpatient hospital, not 11 Physician office. Although this may be the physicians’ main office location in some instances, this is still an outpatient hospital location and must be reported as such.

Anesthesia Services

Anesthesiology practices have a new item to examine specifically aimed at services coded with modifier AA Anesthesia services performed personally by anesthesiologist, or when an anesthesiologist assists a physician in the care of a single patient. The OIG will examine anesthesia services to determine whether they were personally performed and billed appropriately with modifier AA appended. Payment for medically directed anesthesia services billable with modifier QK Medical direction of 2, 3, or 4 concurrent anesthesia procedures involving qualified individuals is 50 percent of the amount allowable for services reported with modifier AA.

Review your documentation and determine if it establishes that the anesthesiologist personally performed the services. If services were only directed by the anesthesiologist, and not personally performed, modifier AA would not be appropriate.

Ophthalmological Services

Ophthalmology practices have a new item to consider: The OIG is reviewing “questionable billing” in 2011 for ophthalmology services. The review includes analysis of specific geographic locations where providers have been problematic; although, at this time additional details have not been provided on location. There appears to have been an increase in the expenditure in Medicare dollars in ophthalmology and concern about potential fraud in the recent past; however, few details are provided on exactly how much. If the OIG finds issues with 2011 documentation, they will move forward into other documentation for providers with problematic records.

Due to the generic nature of this review, use it as an opportunity to take an overall look at your documentation. What are you doing well? Where are your risks? Review your use of incident-to guidelines regarding technologists in your office because this is always a concern under OIG review. Any areas that have been problematic for your practice in previous audits could be reviewed to verify the issues have been resolved.

Electrodiagnostic Testing

Several types of specialists perform various types of electrodiagnostic testing in their offices. The OIG has a new item in its Work Plan this year regarding inappropriate use of these tests. They will be reviewing questionable billing and looking at Medicare utilization rates by provider specialty, diagnosis, and geographic area for these services. There is concern specifically about using this testing for financial gain.

This gives providers who perform in-office electrodiagnostic testing an opportunity to review their records and determine how often these services are being performed. Are there any obvious patterns that could appear suspicious? Is there solid medical necessity on file for all patients who had testing? Is there documentation to support all testing performed? This could be a serious issue for practices, so detailed records will be vital.

Claims with G Modifiers

The OIG will be reviewing possible errors in instances when providers expected denials.

When a provider obtains an ABN, modifier GA Waiver of liability statement issued as required by payer policy or modifier GX Notice of liability issued, voluntary under payer policy (depending on whether the ABN was required or voluntary) is appended to the procedure code. In other instances, payments are not expected, and modifiers GY Item or service statutorily excluded, does not meet the definition of any Medicare benefit or for non-Medicare insurers, is not a contract benefit or GZ Item or service is expected to be denied as not reasonable and necessary is used. In those instances, the OIG has concerns contractors have made payments inappropriately. A previous review showed that $4 million in inappropriate payments were made on claims with modifiers GA and GZ appended.

Review services billed from your practice with those four modifiers. Have payments been made by the contractor? If so, was the payment refunded to the contractor? Were the modifiers applied appropriately originally? This is an important review item giving providers the opportunity to analyze modifier application processes, as well as refund processes.

These are only a few of the important items from this year’s Work Plan. It’s advisable to review the entire document. The Medicaid section is important to all providers who see Medicaid patients. The Public Health section includes reviews of research grant-related topics for providers who perform grant-funded research. There is great information throughout the Work Plan that can be used to help all health care entities control risk and maintain compliance.

January 1st, 2013

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2013 OPPS: Up 1.8 Percent

By Denise Williams, RN, CPC-H

CMS estimates an “overall” rate increase, but changes cost methodology.

In the 2013 Outpatient Prospective Payment System (OPPS) final rule, the Centers for Medicare & Medicaid Services (CMS) bases payments on claims data submitted by hospital providers during 2011. CMS is changing the calculation based on median cost to geometric mean cost, citing this methodology will result in payment rates more accurately reflecting the cost of providing services. CMS believes this means improved data under the OPPS, and improved payment policy. CMS notes there will be some fluctuation in the relative weights used for calculating payment, but as the costs are realigned, the fluctuations should stabilize over time.

Understand the Master Plan

CMS estimates payments under the OPPS will increase overall by 1.8 percent compared to 2012 (see Chart A for a six-year conversion factor history); however, there continue to be other factors involved that will affect payments. Payments to community mental health centers (CMHC) will decrease by 3.9 percent due to the relative weight being based on geometric mean cost rather than median cost.

The payment adjustment for dedicated cancer centers will continue for calendar year 2013. Because these centers provide cutting edge therapies and procedures, their cost is higher on average than other facilities. CMS recognizes this, and the adjustment is to offset their higher-than-usual cost. Since the OPPS contains a budget neutral requirement, CMS must shift monies from other facilities to the cancer centers to make the adjustment.

Chart A

CMS reviewed comments regarding intraoperative radiation therapy (IORT) services represented by CPT® codes 77424 Intraoperative radiation treatment delivery, X-ray, single treatment session and 77425 Intraoperative radiation treatment delivery, electrons, single treatment session. These services are not the typical intraoperative services considered integral to or dependent on the surgical procedure because these are actual radiation therapy services provided while a patient is in the operative suite. These services will no longer be packaged for 2013 and are assigned to Ambulatory Payment Classification (APC) 0412.

It appears CMS has abandoned the establishment of national guidelines for reporting visits under the OPPS. The final rule notes, “it would be disruptive and administratively burdensome” to require hospitals that have successfully implemented internal guidelines to implement new national guidelines. CMS acknowledges new guidelines would have to be implemented by thousands of hospitals and inevitably create new problems that would need to be addressed.

You can download the CMS display copy of the rule and all addenda. Select CMS-1589-FC to download the final rule: “Hospital Outpatient Prospective Payment – Final Rule with Comment Period and CY 2013 Payment Rates.”

Composite APCs Remain the Same

No new composite APCs were created for 2013; however, new CPT® codes have been established to combine electrophysiological (EP) evaluations with ablations and have been assigned to the composite APC. Previously, composite payment was triggered when an EP evaluation and ablation were reported on the same date of service, so the cost for both studies was included in the payment calculation. Assigning new CPT® codes for the combination services to the composite APC should maintain consistent payment rates.

Outlier Fixed-dollar Thresholds Updated

CMS annually updates the formula for calculating outlier payments. Consistent with prior years, for 2013 an outlier payment will be triggered when costs for providing a service or procedure exceed both:

• 1.75 times the APC payment amount; and
• APC payment plus the $2,025 fixed-dollar threshold (increased $125 from 2012).

Two-times Rule Violations: Resolutions and Exemptions

During the Hospital Outpatient Payment (HOP) Panel’s (formerly called the APC Panel) February 2012 meeting, information was presented regarding the resource expenditures involved in a direct referral for observation services. CMS analyzed claims data and agreed with the information presented: The resources involved with HCPCS Level II G0379 (*Direct referral for observation services) are very similar to the resources expended for CPT® 99205 (**Level 5 outpatient visit). Based on this data, CMS has reassigned G0379 to APC 0608; this change also resolves the longstanding “two times rule” violation. This change will also provide more appropriate payment when the criteria for composite APC 8002 are not met.

Seventeen APCs have been deemed exemptions from the two-times rule for 2013, based on meeting CMS’ criteria for exceptions (resource homogeneity; clinical homogeneity; hospital outpatient setting utilization; volume of services; opportunity for upcoding and code fragments). A complete discussion of these criteria can be found in the April 7, 2000 OPPS final rule (65 FR 18457 and 18458).

Radioisotope Add-on Payment

The U.S. government and the International Atomic Energy Agency (IAEA) are promoting the conversion of all medical radioisotope production to non-highly enriched uranium (non-HEU) fueled nuclear reactors. This transition is expected to be completed in five years. Alternative methods for producing Tc-99m, such as in cyclotrons, are expected to apply costs in the OPPS that are not accounted for in current or previous claims data. Suppliers of these radioisotopes are expected to pass on the full impact of these costs to hospitals. CMS believes this will create significant payment discrepancies for hospitals due to factors that are over and above the norm.

CMS has created a new HCPCS Level II code, Q9969 Tc-99m from non-highly enriched uranium source, full cost recovery add-on per study dose, to provide an add-on payment to cover additional cost as these sources become available, rather than waiting until the cost is reflected in the claims data. The add-on payment will change as the use becomes more widespread and is included in the rate setting claims data. As these isotopes become more widely used, the cost will fold into the procedure, just as costs for established radiopharmaceutical sources do currently.

Pass-through Payment Changes

Three devices are eligible for pass-through payment in 2013: HCPCS Level II codes C1830 Powered bone marrow biopsy needle; C1840 Lens, intraocular (telescopic); and C1886 Catheter, extravascular tissue ablation, any modality (insertable). Edits will continue for device/procedure reporting and radiopharmaceutical/nuclear medicine procedures.

Reporting of modifiers FB Item provided without cost to provider, supplier or practitioner, or full credit received for replaced device (examples, but not limited to, covered under warranty, replaced due to defect, free samples) and FC Partial credit received for replaced device continues to be mandated by CMS for 2013. These modifiers indicate a device was received at no cost or at a discounted cost from the manufacturer and triggers a reduced APC payment. The APCs for which these modifiers apply are listed in Tables 29 and 30 of the OPPS final rule.

Pass-through status for 23 drugs and biologicals expired Dec. 31, 2012. These are listed in Table 31 of the final rule. The cost of two of these drugs is above the packaging threshold, which is $80 for 2013, and separate payment will continue. There are 26 drugs and biologicals designated for pass-through status for 2013. These drugs are listed in Table 32. There are HCPCS Level II code changes for several of these drugs; for example, C9289 is replaced by J9019 Injection, asparaginase (erwinaze), 1000 iu beginning Jan. 1, 2013.

Payment for all separately-payable drugs (with or without pass-trhough status) for 2013 will be made at average sales price (ASP) plus 6 percent. The packaging threshold applies to all classes of drugs, including anticancer therapies.

Number of Inpatient-only Procedures Reduced by One

Despite commenters’ requests that 39 procedures be removed from the list for 2013, only one procedure—CPT® 22856 Total disc arthroplasty (artificial disc), anterior approach, including discectomy with end plate preparation (includes osteophytectomy for nerve root or spinal cord decompression and microdissection), single interspace, cervical—was removed from the inpatient-only list. CMS noted the procedures not removed from the list were reviewed, and safe performance can be accomplished only in the inpatient setting. Table 45 provides the specifics regarding the single procedure removed, its corresponding CPT® code, and APC assignment.

Supervision for Outpatient Therapeutic Services

CMS extended through 2013 the enforcement of direct supervision for therapeutic services provided in critical access hospitals (CAHs) and small rural hospitals with 100 beds or fewer. In the final rule, CMS notes this will be the final year for the extension.

The HOP Panel received requests for change in supervision levels at both meetings held during 2012. The latest requests were reviewed during the August 2012 meeting and recommendations were made to CMS. Comments were accepted and are in the review process. The final decision will be issued prior to January 2013. The final decisions for change in supervision levels can be found on the CMS website.

Hospital Quality Reporting Program

No new quality measures were established for 2013, and one was removed. CMS policy of reducing payment to hospitals that fail to meet quality reporting requirements will continue at 2 percent for 2013. This reduction extends to the beneficiary and secondary payer payments, as well. CMS will again use a separate conversion factor to apply these reduced payments.

Short Stay Billing Under Part B – Demonstration Project

A new demonstration project has been initiated and is expected to last over the next three years. Titled the “Medicare Part A to Part B Rebilling (AB Rebilling) Demonstration,” this project is in response to hospital comments that staffing restrictions prevent all short stay admissions from being reviewed while the patient is still in-house. Based on the requirements for reporting Condition Code 44, if the patient has been discharged, the hospital has no means to change the status from inpatient to outpatient. Under the demonstration project, when the recovery audit contractor (RAC), Medicare audit contractor (MAC), or Comprehensive Error Rate Testing (CERT) contractor denies the short stay claim on the basis that an inpatient admission was not reasonable and necessary, participating hospitals can rebill the claims under Part B and receive 90 percent of allowable Part B payment for these Part A short stays. Medicare beneficiaries are protected from any adverse impacts based on Part B rebilling.

Other Nuggets

CMS published updates for therapy services in the 2013 Medicare Physician Fee Schedule final rule. Over the past couple of years, CMS has noted they are required to implement a claims-based methodology for therapy services to reform the payment system in the future. To move in that direction, the new guidance initiates the capture of data that has never been reported via a claim. New HCPCS Level II G codes and modifiers have been created to reflect the complexity of service and severity of illness related to beneficiary condition, services furnished, and final outcome. It is imperative that therapy departments review the requirements. Documentation and correct reporting of services are crucial.

*  The definition provided in this article for G0379 is not the HCPCS Level II definition, “Direct admission of patient for hospital observation care.” The definition “Direct referral for observation services” was used purposefully because CMS has repeatedly noted that observation is an OP service and “admission” infers IP admission. CMS has publically stated that “referral” is more appropriate.

** The definition provided in this article for CPT® 99205 is the short definition that hospitals use and will recognize. The full definition is for physicians, not hospitals.

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Three-day Rule for Related Non-diagnostic Services Is in Effect

Effective July 1, physician offices and other Part B entities wholly owned or operated by a hospital must append modifier PD Diagnostic or related nondiagnostic item or service provided in a wholly owned or operated entity to a patient who is later admitted as an inpatient within 3 days to codes for diagnostic or related non-diagnostic items or services furnished to a Medicare patient who is later admitted as an inpatient within a three-day payment window.

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June 29th, 2012

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Physician Self Referrals and Compliance: What You Should Know

To keep designated health services in the clear, know Stark regulations and their exceptions.

By Julie E. Chicoine, Esq., RN, CPC

Physicians and their practices are undergoing increased government scrutiny with regard to their referrals and financial relationships for health care services. At the heart of this scrutiny lies the physician self-referral law, known as the Stark law (provided in full detail at section 1877 of the Social Security Act, and codified at 42 U.S.C. section 1395nn). As a coding professional, you should understand the basic principles of Stark law so that you are able to recognize when a possible infringement may be taking place.

Self Referrals Pose Conflict of Interest in Patient Care

Congress originally passed the Stark law in 1989 in response to a growing concern about physicians referring patients to laboratories where the physician had a financial interest. This posed a conflict of interest; Congress’ concern was that physicians who stood to benefit financially from ordering laboratory tests were likely to order more tests, including more complex tests, even when such services were unnecessary .

Following enactment, Congress expanded the Stark law’s prohibition to include additional designated health services (DHS) and extended its application to the Medicaid program. In 1997, Congress added a provision authorizing the secretary of the Department of Health & Human Services (HHS) to issue written advisory opinions concerning whether a referral relating to DHS (other than clinical laboratory services) is prohibited under the Stark law. Congress also authorized the secretary in 2003 to publish an exception to the physician self-referral prohibition for certain arrangements in which the physician receives necessary non-monetary remuneration used solely to receive and transmit electronic prescription information. They established a temporary moratorium on physician referrals to certain specialty hospitals in which the referring physician has an ownership or investment interest, as well.

The Centers for Medicare & Medicaid Services (CMS) has published a number of regulations interpreting the physician self-referral statute over the years. These rules were published in phases and are referred to as “Phase I, II, and III.” An overview of the Stark law’s regulatory history can be found on the CMS website.

Get to the Core of Stark Law

At its core, the Stark law prohibits physician referrals to entities providing certain DHS in which the physician (or his or her family member) has an ownership or compensation interest, unless an exception applies. The law further prohibits the entity from presenting, or causing to be presented, a claim to bill Medicare or Medicaid for any DHS provided pursuant to a prohibited referral. Due to this broad language, the law also establishes many exceptions.

Under Stark (42 CFR at § 411.351), physician means:

• A doctor of medicine or osteopathy
• A doctor of dental surgery or dental medicine
• A doctor of podiatric medicine
• A doctor of optometry
• A chiropractor

A referral is a request by a physician for, or ordering of, or certifying necessity for, any designated health service for which payment be made under Medicare Part B. DHS personally performed or provided by the referring physician are specifically excluded from the referral definition; however, the service is not considered to be personally performed by the referring physician if the designated health service is performed or provided by the referring physician’s employees, independent contractors, or group practice members.

DHS cover a broad range of health care items and services including:

• Clinical laboratory services
• Physical therapy services
• Occupational therapy services
• Outpatient speech-language pathology services
• Radiology and certain other imaging services
• Radiation therapy services and supplies
• Durable medical equipment (DME) and supplies
• Parenteral and enteral nutrients, equipment, and supplies
• Prosthetics, orthotics, and prosthetic devices and supplies
• Home health services
• Outpatient prescription drugs
• Inpatient and outpatient hospital services

CMS Identifies DHS Codes

Because the regulations define certain DHS by CPT® and HCPCS Level II codes, CMS maintains a list of CPT® and HCPCS Level II codes identifying those items and services included within the categories referenced above. CMS updates this list annually to correspond with CPT® and HCPCS Level II manual updates in Medicare coverage and payment policies. The updated code list is also published in the Federal Register as an addendum to the annual Physician Fee Schedule final rule, which is published annually in November with a Jan. 1 effective date for the following year.

The DHS categories defined by the code list include:

• Clinical laboratory services
• Physical therapy services, occupational therapy services, outpatient speech-language pathology services
• Radiology and certain other imaging services
• Radiation therapy services and supplies

The following DHS categories are defined without reference to the code list (42 CFR §411.351):

• DME and supplies
• Parenteral and enteral nutrients, equipment, and supplies
• Prosthetics, orthotics, and prosthetic devices and supplies
• Home health services
• Outpatient prescription drugs
• Inpatient and outpatient hospital services

Bottom Line: Stay Stark Compliant

When analyzing physician referral activity, physicians and entities must ask two questions:

• Is there a physician referral of a Medicare or Medicaid patient for the provision of a designated health service?
• Is there a financial relationship (a compensation arrangement or an ownership interest) between the referring physician (or his or her family member) and the entity that will provide the designated health service?

If the answer to both of these questions is “yes,” the referral is prohibited under Stark law unless one of the statutory exceptions applies. Stark exceptions are generally divided into three categories, including:

1. General exceptions

2. Ownership/investment interest exceptions

3. Certain compensation arrangements

Learn more about these exceptions by visiting CMS’ physician self-referral website. Stark law exceptions can be viewed in their entirety.

Seek Professional Advice on Referrals

Penalties for referrals violating the Stark law can be substantial. If a referral is made violating the Stark law and payment is received by the entity providing the designated health service, penalties can include: civil penalties up to $15,000 for each illegal referral, exclusion from participation in federal health care programs, denial of payment for services, refunding of payments received, a fine of up to $100,000 for each illegal cross-referral arrangement, and civil penalties up to $10,000 per day for failing to report violations. Physician and entity compliance with the Stark law is mandatory.

Because non-compliance with the Stark law requirements poses financial impact, physicians and entities developing arrangements that include referrals for DHS should retain legal counsel to make sure these referrals fit within one of the Stark exceptions.

Julie E. Chicoine, Esq., RN, CPC, is senior attorney for Ohio State University Medical Center. Ms. Chicoine earned her Juris Doctor degree from the University of Houston Law Center. She also holds a Bachelor of Science and a nursing degree from the University of Texas Health Sciences Center at Houston. She has written and spoken widely on health care issues, and is an active member of the AAPC community.

April 1st, 2012

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Coding STI Screening and HIBC Services

Based on United States Preventive Services Task Force (USPSTF) recommendations, and after determining that the criteria for “preventive services” were met, the Centers for Medicare & Medicaid Services (CMS) has finalized a National Coverage Determination (NCD) for Sexually Transmitted Infections (STIs) Screening and High Intensity Behavioral Counseling (HIBC) to Prevent STIs.

Effective Nov. 8, 2011, Medicare will cover screening for chlamydia, gonorrhea, syphilis, and hepatitis B when performed using the appropriate U.S. Food and Drug Administration (FDA) approved laboratory tests and ordered by the patient’s primary care provider who is also an eligible Medicare provider for these services. The tests must be used consistent with FDA approved labeling and in compliance with the Clinical Laboratory Improvement Act (CLIA) regulations.

HIBC to prevent STIs must also be provided by the patient’s primary care provider in a primary care setting, such as by the patient’s family practice physician, internal medicine physician, or nurse practitioner in the doctor’s office.

“Emergency departments, inpatient hospital settings, ambulatory surgical centers (ASCs), independent diagnostic testing facilities, skilled nursing facilities (SNFs), inpatient rehabilitation facilities, clinics providing a limited focus of health care services, and hospice are examples of settings not considered primary care settings under this definition,” CMS warns.

Medicare will cover up to two, individual, 20- to 30-minute, face-to-face counseling sessions annually (every 12 months) for all sexually active adolescents and for adults at increased risk for STIs (as per USPSTF guidelines).

Report HIBC to prevent STIs with:

• G0445 High-intensity behavioral counseling to prevent sexually transmitted infections, face-to-face, individual, includes: education, skills training, and guidance on how to change sexual behavior, performed semi-annually, 30 minutes; and
• V69.8 Other problems related to lifestyle

CMS guidelines further state:

This code [G0445] may be paid on the same date of service as an annual wellness visit (AWV), evaluation and management (E/M) code, or during the global billing period for obstetrical care, but only one G0445 may be paid on any one date of service. If billed on the same date of service with an E/M code, the E/M code should have a distinct diagnosis code other than the diagnosis code used to indicate high/increased risk for STIs for the G0445 service. An E/M code should not be billed when the sole reason for the visit is HIBC to prevent STIs.

CMS provides additional tips for coding screening and counseling services:

• Report diagnosis code V74.5 Screening examination for venereal disease or V73.89 Special screening examination for other specified viral diseases to identify the screening test(s) as preventive.
• Report V22.0 Supervision of normal first pregnancy, V22.1 Supervision of other normal pregnancy, or V23.9 Unspecified high-risk pregnancy, when appropriate.
• The patient’s medical record must clearly support the diagnosis of high/increased risk for STIs and clearly reflect the components of HIBC (education, skills training, and guidance on how to change sexual behavior).

See MLN Matters® MM7610 for further details and billing reminders.

March 2nd, 2012

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