Health Information Management

Supervision delay extension for CAHs among proposals

JustCoding News: Outpatient, October 17, 2012

Want to receive articles like this one in your inbox? Subscribe to JustCoding News: Outpatient!

CMS has proposed extending the delay on enforcement of physician supervision rules for ­critical ­access hospitals (CAH) as well as small and rural ­hospitals with 100 or fewer beds for one final year. CMS made the proposal as part of the 2013 OPPS proposed rule, released July 6.

CAHs have struggled for years to meet CMS' physician supervision requirements and have argued that they do not need to meet the supervision requirements if they fulfill their Medicare Conditions of Participation (CoP). CAHs are unique in that their CoPs allow them more flexibility for addressing staffing issues in small rural ­hospitals; however, CMS has also stated that the CoPs are for licensure and not for payment.
To address the CAHs' concerns, CMS has temporarily suspended enforcement of the supervision requirements for CAHs and small rural hospitals for the past two years. CMS proposes making 2013 the final year that it will not penalize CAHs and small rural hospitals for not meeting the supervision requirements.
CAHs face a significant challenge in recruiting ­additional medical staff to small rural hospitals, which may be necessary to meet the supervision requirements, says Debbie Mackaman, RHIA, CHCO, regulatory specialist for HCPro, Inc., in Danvers, Mass. In theory, the delay extension may be good news for CAHs because it allows them one more year to develop their strategy to comply with the direct supervision rules.
But CAHs should address the supervision challenges sooner, rather than later, through staffing and ­scheduling, Mackaman says. After all, the solution to this problem may cost a CAH significant money. "When hospitals are allowed to put off the inevitable for multiple years, the urgency of resolving this issue takes a backseat to other current compliance issues that are staring them down," she notes. 
Additional payment for non-HUE Tc-99m
For CY 2013, CMS proposes to make an additional payment of $10 to cover the marginal costs associated with non-highly enriched uranium (HEU) Tc-99m production. CMS suggests establishing a new HCPCS code, QXXXX (Tc-99m from non-HEU source, full cost recovery add-on, per dose), to describe the Tc-99m radioisotope when it's 100% produced by non-HEU methods and used in a diagnostic procedure. Hospitals would report this code once per study with a token charge, the diagnostic scan, and the appropriate radiopharmaceutical HCPCS code for Tc-99m. The presence of the newly proposed Q-code for a 100% certified non-HEU source will prompt CMS' pricer logic to generate the $10 payment in addition to the APC payment for the scan.
CMS' proposal recognizes that it would be inappropriate to ask hospitals to absorb the marginal cost for radioisotopes produced from non-HEU sources over the costs for radioisotopes produced by HEU sources, since this initiative comes from the federal government, says Jugna Shah, MPH, president of Nimitt Consulting in Washington, D.C. However, the proposed $10 payment is not likely to be sufficient because CMS continues to package the cost of all diagnostic radiopharmaceuticals.
Providers have repeatedly asked CMS to provide separate reimbursement for diagnostic radiopharmaceuticals, similar to how it provides separate payment for drugs over a certain packaging threshold. If this were the case, then CMS would not need to provide a separate $10 payment. Providers would simply report their true charge and costs to CMS for non-HEU sources and CMS would factor those into future rates. "It will be interesting to see how the industry responds to this proposal and providers should weigh in," says Shah.
CMS also plans to continue providing additional payments to cancer hospitals so that the hospital's payment-to-cost ratio (PCR) with the payment adjustment is equal to the weighted average PCR for the other OPPS ­hospitals using the most recent submitted or settled cost report data.
Critical care reimbursement
In 2010, the CPT® panel revised its guidance for ­critical care codes 99291 (critical care, evaluation and management of the critically ill or critically injured patient; first 30-74 minutes) and 99292 (critical care, evaluation and management of the critically ill or ­critically injured patient; each additional 30 minutes [List separately in addition to code for primary service]). The panel specifically stated that, for hospital reporting purposes, critical care codes do not include specified ancillary services.
In the 2011 OPPS final rule, CMS instructed facilities to follow the CPT guidelines for reporting critical care services. That meant hospitals were to report all of those ancillary services separately, even though they would not receive separate reimbursement.
Hospital claims data for 2011 showed no ­substantial change in the ancillary services present on the same claims as critical care services, and also showed ­continued low volumes of many ancillary services. If the majority of hospitals changed their billing practices to separately report and charge for the ancillary services, the costs and charges for the critical care CPT codes should have decreased with an increase in the ancillary services reported on the same claims. However, that was not the case. "This seems to indicate that people did not change their practices the way CMS told them to," Shah says.
As a result, CMS plans to continue setting rates based on historical data, which means it will not separately pay for the ancillary services that hospitals may report in addition to the critical care code. CMS also plans to ­continue implementing claims processing edits that ­conditionally package payment for the ancillary services that are reported on the same date of service as critical care services in order to avoid overpayment.
"For CMS to indicate that, based on claims data, most hospitals did not change their billing practices in 2011 makes me wonder if hospitals truly ­understood the guidance change. Or did they decide to leave their bundled charge intact in their chargemaster and not bill separately for the ancillary services that used to be ­inclusive in critical care?" Mackaman says. ­"Unfortunately, hospitals that were following the rule changes since 2011 will also be feeling CMS' wrath in 2013. The fact that claims data shows that ancillary ­services volume did not increase and the charges for critical care did not decrease should be a billing practice that all hospitals review as soon as possible."
This is a clear example of how CMS uses provider claims data to make policy decisions and set future payment rates, says Shah. This is why providers need to comply with appropriate coding, charging, and charge setting practices, because if they don't then they risk future payment rates remaining the same or decreasing.
Observation or inpatient
CMS is concerned about recent increases in the length of time that Medicare beneficiaries spend as outpatients receiving observation services. The number of cases of Medicare beneficiaries receiving observation services for more than 48 hours increased from approximately 3% in 2006 to approximately 7.5% in 2010.
In addition, hospitals continue to express concern about Medicare Part B rebilling policies when a hospital inpatient claim is denied because the admission was not medically necessary.
CMS acknowledged that the need for admission is a complex medical judgment that involves multiple factors, including an expectation that the beneficiary will require an overnight stay in the hospital. It further stated that some commenters believe it has the authority to define whether a patient is an inpatient or an outpatient. Those commenters believe that CMS can redefine "inpatient" using parameters in addition to medical ­necessity and a physician order that it currently uses, such as length of stay or other variables.
CMS currently does not limit the amount of time that a patient can remain in observation, but generally limits payment to 24 or 48 hours. Some commenters have stated that it may be helpful for CMS to establish more specific criteria for patient status in terms of how many hours the beneficiary is in the hospital, or to provide a limit on how long a beneficiary receives observation services as an outpatient.
Other stakeholders have suggested that CMS establish more specific clinical criteria for admission and payment, such as adopting specific clinical measures or requiring prior authorization for payment of an admission.
CMS is soliciting public comments on potential clarifications or changes to its policies regarding patient status.
"I think this is huge," says Kimberly Anderwood Hoy, JD, CPC, director of Medicare and compliance at HCPro. "This would change the entire landscape of RAC/MAC denials for inpatient care."
Editor’s note: This article was originally published in the September issue of Briefings on APCs. Email your questions to Senior Managing Editor Michelle A. Leppert, CPC-A, at

Want to receive articles like this one in your inbox? Subscribe to JustCoding News: Outpatient!

Most Popular