Corporate Compliance

Note from the Instructor: Potpourri of Important Guidance from CMS this Week

Medicare Insider, August 18, 2015

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This week’s note from the instructor is written by Kimberly Anderwood Hoy Baker, JD, regulatory specialist for HCPro.


This week CMS released guidance on the new Place of Service (POS) code for off-campus provider-based facilities, the 2-Midnight Rule, and appeals of claims denied by post-payment review contractors. Each item is short, but provides information on topics important to providers and physicians.

First, CMS released Claims Processing Manual Transmittal 3315, redefining POS 22 and adding POS 19. The new definition of POS 22, effective January 1, 2016, is “On-Campus Outpatient Hospital.” It will continue to be used for services provided by physicians to hospital outpatients when the services are provided on the main campus of the hospital. On-campus is defined as within 250 yards of the main buildings of the hospital and corresponds to the definition of campus for purposes of the Emergency Medical Treatment and Active Labor Act (EMTALA). New POS 19, effective January 1, 2016, is defined as “Off-Campus Outpatient Hospital.” It will be used for services provided to hospital outpatients when the services are provided in off-campus provider-based departments.

This new POS code, POS 19, was anticipated after CMS finalized a policy for reporting of encounters in off-campus provider-based departments in the calendar year (CY) 2015 Medicare Physician Fee Schedule (MPFS) and Outpatient Prospective Payment System (OPPS) rules. Beginning January 1, 2016, hospitals will be required to report new modifier PO on the HCPCS codes for services provided in off-campus departments. Physicians will report the new POS 19 for those services. The new POS code is informational, and CMS indicated it will be treated similarly to POS 22 by the processing system, paying at the facility rate under the MPFS.


The next item of interest is an update to the Inpatient Hospital Reviews page on the CMS website. In the past, CMS has posted information about the 2-Midnight Rule, the Probe and Educate process used in its implementation, and the hospital appeals settlement process for outstanding appeals of patient status denials to this page. The update includes information on the proposed changes to the 2-Midnight Rule that were included in the CY 2016 OPPS Proposed Rule, including a link to this Fact Sheet. The site also provides information on the transition of patient status reviews to determine the appropriateness of Part A payment for short stay inpatient hospital claims to the Quality Improvement Organizations (QIO).

The QIOs will take over patient status reviews as of October 1, with the Medicare Administrative Contractors (MAC) completing education from the third round of the Probe and Educate process through the end of the year. According to the site, Recovery Auditors will not resume patient status reviews until January 1, 2016, and then will only review providers referred from the QIO because of high denial rates, consistently failing to adhere to the 2-Midnight Rule, or failing to improve after QIO educational intervention.

The last item I wanted to point out relates to the scope of review by the MAC or Qualified Independent Contractor (QIC) for first- and second-level appeals. CMS released Special Edition MLN Matters Article 1521 providing information on a Technical Direction Letter they issued to the MACs conducting Redeterminations (first-level appeals) and QICs conducting Reconsiderations (second-level appeals) of claims appealed after postpayment denials. The affected appeals are the result of claims initially paid, then reopened and denied after a postpayment audit by a MAC, Recovery Auditor, Comprehensive Error Rate Testing (CERT) contractor, or Zone Program Integrity Contractor (ZPIC).

CMS directed the MACs and QICs to limit their review of these appeals to the reason the claim or line item was initially denied. Normally, the MACs and QICs have the discretion to review all aspects of coverage and payment related to a claim or line and develop new issues that may result in denial for a different reason than the original denial. For prepayment denials, they can continue to develop new issues upon appeal; however, for these postpayment denials, they are limited to the original reason for denial in their review. This new direction applies to redeterminations and reconsiderations received on or after August 1, 2015.
 



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