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Critical access hospital roundup: Select highlights from 2011

Medicare Update for CAHs, December 28, 2011

Since we launched our inaugural issue in June, the Medicare Update for CAHs ezine has covered a number of topics pertinent to critical access hospitals. Below are a few of the highlights from throughout the year.

Inpatient-only procedures in CAHs

Earlier in the year we released an article that explained how inpatient-only procedures apply to critical access hospitals. In summary, all outpatient claims are processed through the integrated outpatient code editor (I/OCE); however, the edits for inpatient-only procedures are not turned on for CAHs. Although they don’t apply, CAHs should still seek clarification from their MAC regarding the application of the definition of these procedures, says Debbie Mackaman, RHIA, CHCO, regulatory specialist for HCPro, Inc.

In addition, the Medicare Contractor Medical Director for MAC jurisdiction 3 told HCPro, Inc. that if a Medicare contractor or review agency has reason to believe that a procedure may be safely performed only as an inpatient and the CAH delivers that service as an outpatient, the claim could be denied for medical necessity based on the wrong setting. In addition, the director stated that it may be difficult for CAHs to defend the decision to ignore the inpatient-only list based solely on how a facility is reimbursed (i.e. OPPS vs. cost-based).

Method II billing for anesthesiologist services

This past August, CMS issued a transmittal that clarifies payment calculations for anesthesia services performed by an anesthesiologist in a Method II CAH. Payment is currently calculated for the anesthesiologist’s professional services identified with a modifier AA in a Method II CAH on a 20% reduction of the fee schedule amount before the deductible and coinsurance are calculated, according to the transmittal. With the new guidance, CMS removes the 20% reduction so it should not be applied in the payment calculation for these services. According to Mackaman, is great news for CAHs billing for physicians’ anesthesiology services. “Since an anesthesiologist is an MD, the 20% reduction in the payment under Method II billing seemed unwarranted in this setting,” she says.

For dates of services on or after January 1, 2008, contractors will pay for anesthesia services submitted by a Method II CAH on an 85X bill type with revenue code 963 and modifier AA based on the lesser of the actual charges or the actual fee schedule amount.   

Method II CAHs who plan to resubmit these claims for the additional reimbursement should be aware that their FIs’ or MACs’ implementation date for overriding the timely filing edit for rebilling these old claims is not until January 1, 2012,” she says.

CAH impact of Medicare conditions of participation changes

This past October, CMS issued in the Federal Register a proposed rule that would revise the Medicare conditions of participation (CoP) that hospitals and critical access hospitals must meet in the Medicare and Medicaid programs.

The following is a summary of some of the proposals that will, in some way, have an impact on critical access hospitals (42 CFR 485 section only):

Definitions (§ 485.602) and provision of services (§ 485.635)

CMS currently requires CAHs to furnish certain types of services directly rather than through contracts or under arrangements. The proposed rule would eliminate the requirement that the CAH staff must provide certain services directly and changes the heading of the standard “direct services” to “patient services.” It also proposes to revise the language in paragraphs§ 485.635(b)(1) through (b)(4), that the CAH staff furnishes as direct services.

Personnel Qualifications (§ 485.604)

CMS is proposing to revise the definition of a clinical nurse specialist at § 485.604(a) to reflect the definition in the statute at§ 1861(aa)(5)(B). Specifically, CMS proposes to change the definition to state that a clinical nurse specialist is a registered nurse licensed to practice nursing in the state in which the clinical nurse specialist services are performed and that holds an advanced degree in a defined clinical area of nursing from an accredited educational institution.

Surgical Services (§ 485.639)

CMS amended this section by revising the introductory text to read as follows: If a CAH provides surgical services, surgical procedures must be performed in a safe manner by qualified practitioners who have been granted clinical privileges by the governing body, or responsible individual, of the CAH in accordance with the designation requirements under paragraph (a) of this section.

There are a number of additional proposed changes included in this document that could have a significant positive impact on hospital procedures. CAHs are encouraged to review the entire proposed rule and submit comments no later than December 23, 2011.

For all of your critical access hospital-related updates in 2012, stay tuned to HCPro’s Medicare Update for CAHs. Thanks for reading!

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