Corporate Compliance

Note: New Modifiers for Outpatient Never Events; Billing for Hospital Acquired Conditions

Medicare Insider, May 26, 2009

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This week, CMS published the July Integrated Outpatient Code Editor (I/OCE).  Although there were relatively few changes, CMS did introduce three new modifiers for use with the occurrence of three never events identified by the National Quality Forum (NQF) that were recently the subject of National Coverage Analyses by CMS.  The new modifiers are: PA for surgical or invasive procedure on the wrong body part, PB for surgical or invasive procedure on the wrong patient, and PC for wrong surgery or invasive procedure on patient.  The modifiers were added to the list of valid modifiers effective January 1, 2009.

As many of you are aware, earlier this year CMS published three national coverage decision memos related to the never events of wrong patient, wrong body part and wrong procedure surgeries and invasive procedures.  The decision memos, not surprisingly, detailed Medicare’s non-coverage of these procedures.  This distinguishes them from the Hospital Acquired Conditions (HACs) in the inpatient environment, which remain covered even though they are excluded for DRG assignment purposes.

This is an important distinction.  For wrong patient, wrong body part, wrong procedure surgeries, the services are not covered and therefore either not billed to Medicare or billed as non-covered with the appropriate modifier if circumstances dictate (i.e. the need for a denial).  However, because services related to HACs continue to be covered, these services are billed as covered services on the inpatient claim.  The CMS explained this policy in the FY2008 IPPS Final Rule (see 72 Federal Register page 47201).  In that same section, they also go on to clarify that the HAC provisions do not affect outliers and therefore any charges related to HACs could potentially push a hospital over the outlier payment threshold. 

This is a shock to many providers who assumed that the HACs were non-covered conditions because of CMS’ statements about not paying for hospital errors that resulted in conditions acquired at the hospital but that could have reasonably been prevented.  However, as CMS points out, the provision of the Deficit Reduction Act requiring adoption of the HACs only requires that the DRG assignment not be higher because of the HAC, but does not make the services related to the HAC non-covered.  

Additionally, this highlights the difference between CMS’ list of HACs, which they deem to be “reasonably preventable” but not always avoidable and the NQF’s never events which should not occur if proper practices are adopted.  While some never events are on the HAC list, such as blood incompatibility or objects left during surgery, the two lists are very different.  The HAC list contains conditions such as infections and pressure ulcers that may develop despite best practice, due to some compromise in the patient’s system.  Nevertheless, CMS considers them reasonably preventable in most cases and therefore has designated them on the HAC list. 

For more information on the difference between the NQF’s never event list and CMS’ HAC list provider may wish to review a Fact Sheet CMS published in 2008.  While some of the specific conditions have been updated since then, the basic distinctions described there remain the same.  Additionally hospital may wish to review the NCAs for wrong body part procedures, wrong patient procedures, and wrong procedure on patient.


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