Washington Report – August, 2012 - HBMA



Washington Report – September, 2012

Bill Finerfrock, Pam Jackson, Zhaneta Mansaku, Kristen Metzger and Jessica Harrington

CMS approves RAC Audit Expansion

CMS Announces a “new” POS Policy, Delays Effective Date

CMS Awards new MAC Contracts

SGR Fix, SGR Fix, Wherefore art our SGR Fix?

CBO: 6 Million People Will Pay Health Care Penalty

Sequestration Update

Bi-partisan Group of Senators Work to Avoid Fiscal Cliff

HHS: Enrollment in Medicare Advantage Remains Strong

CMS Announces Preliminary Decisions on Hospital Outpatient Supervision Levels for Select Services

CMS Extends Code Freeze Schedule

HHS OIG Announces Fiscal Year 2013 Work Plan

CMS Transmittals

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CMS approves RAC Audit Expansion

On September 12, 2012, The Centers for Medicare and Medicaid Services (CMS) has approved a request by one of the Recovery Audit Contractors (RACs) to expand their scope of work to include “Incorrect Billing of Evaluation and Management Claims (CPT 99215).” The Contractor (Connolly) has received approval to use a statistical sampling methodology in making their review and analysis.

Connolly has indicated they intend to begin reviewing claims in the following states: Alabama, Arkansas, Colorado, Florida, Georgia, Louisiana, Mississippi, New Mexico, North Carolina, Oklahoma, Puerto Rico, South Carolina, Tennessee, Texas, Virgin Islands, Virginia, West Virginia in the near future. It should be noted that CMS can expand this initiative to other states without prior public notice

Limited information about the new initiative is available on Connolly's website. Billing companies that bill E/M services for physicians and non-physicians in the affected states may wish to check the Connolly website periodically to learn more about their plans as they become available.

Several organizations, including HBMA, have expressed concerns about this decision by CMS to expand the RAC auditing process into this area. While expansion into physician billing has long been expected, most observers were surprised that CMS is beginning this program with E/M codes given the highly subjective nature of these claims.

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CMS Announces A “new” POS Policy, Delays Effective Date

On September 28th, CMS announced it is delaying enforcement of the Place of Service Policy the agency had announced in April, 2012; and, that the agency had also made revisions to the policy based upon industry feedback. HBMA and other healthcare organizations had sought this delay and had also been aggressively pushing CMS to change its policy.

The effective date for the “new” policy is April 1, 2013.

Unfortunately, a close reading of the “new” Place of Service Policy concludes that it is not substantially different from the policy announced in April, 2012. Other than a clarification HBMA requested with respect to “infrequent” locations in which the PC of a diagnostic test is performed, the key problem area - identification of the physical location of the physician at the time he/she reviews a medical image - remained largely unchanged. HBMA and other organizations have repeatedly pointed out to CMS that this new policy presents huge technical and practical problems for physicians, medical billing companies and practice management software providers. Despite these efforts, it appears that CMS has largely ignored the industry’s concerns.

HBMA is preparing a response to the “new” policy and will once again reiterate both the technical and practical problems with the policy CMS is seeking to adopt.

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CMS Awards new MAC Contracts

As part of the on-going process of competitively bidding and awarding the Medicare Administrative Contractor contracts, CMS announced earlier this year that it was accepting bids on new MAC contracts for various regions of the country. Most MAC contracts are for a five-year period and, unless there are extenuating circumstances, these contracts will be re-bid every five years.

On September 27, 2012, CMS made a contract award for the Jurisdiction 6 A/B MAC to National Government Services, Inc (NGS). The Jurisdiction 6 A/B MAC administers Medicare Part A and Part B claims for covered services in the states of Illinois, Minnesota, and Wisconsin. This contractor will also administer Medicare billings from home health and hospice providers in thirteen states and five U.S. territories. The current Medicare fiscal intermediaries and carriers

for these Medicare workloads (in addition to NGS, Wisconsin Physicians Service and Noridian Administrative Services are currently servicing some of the Medicare claims to be transferred to the new contract) will continue in their responsibilities for several months while CMS and NGS implement the new contract. Jurisdiction 6 Award Fact Sheet

On September 20, 2012, CMS made a contract award for the Jurisdiction E A/B MAC contract to Noridian Administrative Services. The Jurisdiction E A/B MAC administers Medicare Part A and Part B claims for covered services in the California, Hawaii, and Nevada, as well as the U.S.

territories of American Samoa, Guam, and the Northern Mariana Islands.

The current A/B MAC for this geographic area, Palmetto GBA, will continue to administer provider claims for up to six months as CMS oversees the transfer of these Medicare contract responsibilities to Noridian Administrative Services. For more information about the Jurisdiction E award: Jurisdiction E Award Fact Sheet

On September 17, 2012, CMS made a contract award for the Jurisdiction L A/B MAC contract to Novitas Solutions, Inc. The Jurisdiction L A/B MAC administers Medicare Part A and Part B claims for covered services in the states of Delaware, Maryland, New Jersey, and Pennsylvania, as well as the District of Columbia. For more information about the Jurisdiction L award: Jurisdiction L Award Fact Sheet

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SGR Fix, SGR Fix, Wherefore art our SGR Fix?

HBMA and other organizations have been hammering Congress to enact legislation to avoid the projected 27% cut in physician fee schedule payments on January 1, 2013. On September 11th, a group of 75 HBMA members traveled to Capitol Hill to meet with their Representatives and Senators to personally educate them about the problems the SGR cuts would create if enacted and, more importantly, the unnecessary costs that would occur if the Congress delayed a decision to rescind the SGR cuts until after January 1 and then made that rescission retroactive to January 1, 2013.

The Members and staff the HBMA members met with seemed genuinely impressed with information they were presented and were near universal in their belief that Congress would act in time to prevent the SGR cut from taking place.

HBMA will continue to impress upon Congress the need to fix the SGR problem permanently and to do so in a way that does not discourage physicians from continuing to see Medicare patients.

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CBO: 6 Million People Will Pay Health Care Penalty

 

According to the non-partisan Congressional Budget Office (CBO) six million people will pay the “tax” penalty for not having health insurance in 2016. This represents an increase of 2 million above CBO’s original when the Patient Protection and Affordable Care Act (PPACA) was signed into law in 2010.

 

According to the updated report, the vast majority of the increase can be attributed to higher than expected unemployment rates and lower wages and salaries. The Supreme Court’s decision ruling that the Medicaid expansion included in the PPACA was voluntary for the states rather than mandatory, will also play a role. CBO thinks it is likely that many states will opt out of Medicaid expansion.

If states opt out, this would mean that many low-income workers residing in those states, that CBO originally assumed would have been covered by Medicaid, will not have that option. These individuals will have to be covered by either employer-sponsored insurance or individual policies. CBO believes many of these low-wage workers will be in jobs that will not offer insurance (the employer will be exempt or opt to pay the penalty) and be unable to afford to buy individual insurance in the Healthcare Exchanges.

 

The new estimate means that about 20% of the non-elderly people expected to be uninsured in 2016 will actually pay the penalty. The CBO also noted that some people will try to avoid the tax and so based its estimates on likely compliance rates and the Internal Revenue Service’s ability to enforce the penalty.

 

CBO estimates that the “tax” payments that these people will pay will amount to about $7 billion in 2016 and then about $8 billion each year from 2017 to 2022. These new figures are approximately $3 billion more than the previous estimate.

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Sequestration Update

In August 2011, the federal government was facing the prospect of defaulting on interest owed on certain debt obligations unless Congress and the President agreed to raise the aggregate U.S. debt limit. As part of an agreement to raise the debt limit, called the Budget Control Act of 2011 (BCA), bipartisan majorities in the House and Senate voted for major cuts in future, unspecified, federal spending. Because there was some fear that Congress would not follow-through on the spending reduction agreement, the legislation also authorized across-the-board spending cuts beginning in 2013 if Congress failed to enact the required cuts in spending.

The across-the-board spending reductions are referred to as Sequestration.

The expectation at the time the BCA was enacted was that the prospect for major reductions in virtually every federal program (defense and non-defense) would be so onerous to a broad political spectrum that it would force a bi-partisan agreement on targeted reductions in order to avoid the across-the-board reductions. Frankly, the hope on both sides of the political spectrum was that sequestration would never occur. It was viewed as a threat – but a very powerful threat.

In late 2011, Congress failed to reach agreement on the necessary spending cuts and that failure triggered a count-down to January 1, 2013 when the sequestration cuts are slated to take effect.

For most of the past 10 months, there has been tremendous finger pointing as each party to the 2011 budget agreement attempts to point the blame at someone else. It has been so bad recently, that you would think that the Budget Control Act, which triggered this process, was enacted by a group of aliens who briefly occupied the bodies of our elected officials. In truth, the bi-partisan group who approved the BCA in August, 2011 and the President who signed it into law are the current occupants of their respective offices.

Subsequent to enactment of the BCA, the Congress approved legislation entitled, “The Sequestration Transparency Act of 2012 (STA). This legislation, signed by the President, requires the President to submit a report to Congress on the potential impact of sequestration.

On September 14th, the Office of Management and Budget (OMB) released its report based on assumptions as required by the STA. The report provides Congress with a breakdown of exempt and non-exempt budget accounts, an estimate of the funding reductions that would be required across non-exempt accounts, an explanation of the calculations in the report, and additional information on the potential implementation of the sequestration.

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Bi-partisan Group of Senators Work to Avoid Fiscal Cliff

 

HBMA’s government relations staff have picked up rumblings of bi-partisan negotiations among a group of eight senators to reach a compromise on the expiring tax cuts and the automatic spending reductions (Sequestration) schedule to take effect on January 2, 2012.

According to Senate Majority Leader Harry Reid (D-NV) the group includes:

Democrats Republicans

Mark Warner – Virginia Mike Crappo - Idaho

Dick Durbin – Illinois Tom Coburn - Oklahoma

Kent Conrad – North Dakota Saxby Chambliss - Georgia

Michael Bennett – Colorado Lamar Alexander – Tennessee

Any proposal agreed to by the group would have to be approved by both Houses of Congress as well as the President in order to avoid the double whammy of tax increases and major spending reductions slated to take effect in early January.

 

Because any legislation aimed at extending the tax cuts or avoiding large spending cuts would have to be considered during a lame duck session of Congress, the outcome of the election will largely dictate what, if anything will be accomplished during that 4 week post-election session.

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HHS: Enrollment in Medicare Advantage Remains Strong

According to a statement issued by Kathleen Sebelius, Secretary of the Department of Health and Human Services, “Enrollment in the Medicare Advantage (MA) program is projected to increase by 11 percent in the next year and premiums will remain steady.” In a press release accompanying the announcement, HHS officials noted that since enactment of the Patient Protection and Affordable Care Act in 2010, Medicare Advantage premiums have fallen by 10 percent and enrollment has risen by 28 percent.

In addition to the growth in MA plan enrollment, HHS also noted that “Access to supplemental benefits remains steady and beneficiaries’ average out-of-pocket spending remains constant.”

In 2013, HHS estimates that the average monthly Medicare Advantage premium will increase by $1.47 compared to 2012.

The Annual Medicare Advantage Open Enrollment Period begins on October 15 and ends December 7. CMS provides helpful tools to beneficiaries seeking more information on plan benefits and costs.

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CMS Announces Preliminary Decisions on Hospital Outpatient Supervision Levels for Select Services

In the Calendar Year 2012 Outpatient Prospective Payment System (OPPS) Final Rule, CMS established a process to obtain independent advice from the Hospital Outpatient Payment Panel regarding the appropriate supervision levels for certain individual hospital outpatient therapeutic services.

As part of the Panel’s charge, CMS directed the Panel to recommend the supervision level for certain services that that will “ensure the appropriate quality and safety for delivery of a given service as defined by its Healthcare Common Procedure Coding System (HCPCS) or Current Procedural Terminology (CPT) code.”

Based on the Panel’s recommendations, CMS is proposing the following changes to the current supervision requirements.

For the following services CMS accepts the Panel’s recommendations that they change the requirement from direct supervision to general supervision, since provision of the service does not typically require the immediate availability of the supervising physician or appropriate non-physician practitioner.

• HCPCS code G0008 Administration of influenza virus vaccine

• HCPCS code G0009 Administration of pneumococcal vaccine

• HCPCS code G0010 Administration of hepatitis B vaccine

• HCPCS code G0127 Trimming of dystrophic nails, any number

• CPT code 11719 Trimming of nondystrophic nails, any number

• CPT code 36000 Introduction of needle or intracatheter, vein

• CPT code 36591 Collection of blood specimen from a completely implantable venous access device

• CPT code 36592 Collection of blood specimen using established central or peripheral catheter, venous, not otherwise specified

• CPT code 51702 Insertion of temporary indwelling bladder catheter; simple (e.g., Foley)

• CPT code 51705 Change of cystostomy tube; simple

• CPT code 51798 Measurement of post-voiding residual urine and/or bladder capacity by ultrasound, non-imaging

• CPT code 96360* Intravenous infusion, hydration; initial, 31 minutes to 1 hour

• CPT code 96361* Intravenous infusion, hydration; each additional hour (list separately in addition to code for primary procedure)

• CPT code 96521 Refilling and maintenance of portable pump

• CPT code 96523 Irrigation of implanted venous access device for drug delivery systems

CMS asks stakeholders to note that these decisions are preliminary and are open to public comment through October 24, 2012. Comments may be submitted via email to HOPSupervisionComments@cms.. CMS intends to post final decisions after considering any comments that the receive and those decisions will be effective on January 1, 2013.

CMS, however, did not accept all of the panel’s recommendations because they believe the following services either involve assessment by a physician, or there is a significant potential for patient complications or reactions that would require the supervising physician or appropriate non-physician practitioner to be immediately available.

CMS will maintain this designation for both of the observation services and for the other extended duration services listed below:

• HCPCS code G0379* Direct admission of patient for hospital observation care

• HCPCS code G9141 Influenza A (H1N1) immunization administration (includes the physician counseling the patient/family)

• CPT code 29580 Strapping; Unna boot

• CPT code 29581 Application of multi-layer compression system; leg (below knee), including ankle and foot

• CPT code 51700 Bladder irrigation, simple, lavage and/or instillation

• CPT code 96365* Intravenous infusion, for therapy, prophylaxis, or diagnosis (specify substance or drug); initial, up to 1 hour

• CPT code 96366* Intravenous infusion, for therapy, prophylaxis, or diagnosis (specify substance or drug); each additional hour (list separately in addition to code for primary procedure)

• CPT code 96367* Intravenous infusion, for therapy, prophylaxis, or diagnosis (specify substance or drug); additional sequential infusion of a new drug/substance, up to 1 hour (list separately in addition to code for primary procedure)

• CPT code 96368* Intravenous infusion, for therapy, prophylaxis, or diagnosis (specify substance or drug); concurrent infusion (list separately in addition to code for primary procedure)

• CPT code 96372* Therapeutic, prophylactic, or diagnostic injection (specify substance or drug); subcutaneous or intramuscular

• CPT code 96374* Therapeutic, prophylactic, or diagnostic injection (specify substance or drug); intravenous push, single or initial substance/drug

• CPT code 96375* Therapeutic, prophylactic, or diagnostic injection (specify substance or drug); each additional sequential intravenous push of a new substance/ drug (list separately in addition to code for primary procedure)

• CPT code 96376* Therapeutic, prophylactic, or diagnostic injection (specify substance or drug); each additional sequential intravenous push of the same substance/ drug provided in a facility (list separately in addition to code for primary procedure)

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CMS Extends Code Freeze Schedule

At a meeting on September 14, 2011, the ICD-9-CM Coordination & Maintenance (C&M) Committee implemented a partial freeze of the ICD-9-CM and ICD-10 codes. The plan was that the partial freeze would end October 1, 2014, one year after the implementation of ICD-10 (October 1, 2013).

On August 24, 2012 CMS announced a delay in the effective date for ICD-10 CM to October 1, 2014. This delay caused some to wonder whether CMS would either temporarily lift the code freeze to reflect the change in the ICD-10 CM effective date or extend the code freeze an additional year to reflect the delayed effective date.

CMS has decided to extend the freeze one additional year so that it will now end one year after implementation of ICD-10 CM.

The following actions will occurred over the next few years:

• On October 1, 2012 and October 1, 2013 there will be only limited code updates to both the ICD-9-CM and ICD-10 code sets to capture new technologies and diseases as required by section 503(a) of Pub. L. 108-173.

• On October 1, 2014, there will be only limited code updates to ICD-10 code sets to capture new technologies and diagnoses as required by section 503(a) of Pub. L. 108-173. There will be no updates to ICD-9-CM, as it will no longer be used for reporting.

• On October 1, 2015, regular updates to ICD-10 will begin.

The ICD-9-CM Coordination and Maintenance Committee will continue to meet twice a year during the partial freeze. At these meetings, the public will be asked to comment on whether or not requests for new diagnosis or procedure codes should be created based on the criteria of the need to capture a new technology or disease. Any code requests that do not meet the criteria will be evaluated for implementation within ICD-10 on and after October 1, 2015 once the partial freeze has ended.

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HHS OIG Announces Fiscal Year 2013 Work Plan

The HHS Office of Inspector General (OIG) Work Plan for Fiscal Year 2013 has been released by the agency. It provides brief descriptions of activities that OIG plans to initiate or continue with respect to HHS programs and operations in fiscal year 2013 (October 1, 2013 – September 30, 2014).

The Work Plan describes the primary objectives and provides for each review its internal identification code, the year in which we expect one or more reports to be issued as a result of the review, and indicates whether the work was in progress at the start of the fiscal year or will be a new start during the year.

The entire Work Plan covering all agencies and programs within the jurisdiction of the Department of Health and Human Services is available as a single large PDF file. However, the document has also been broken up and posted in ten smaller PDF files. There is a specific section on the areas the OIG intends to examine with respect to the Medicare program.

Some of the Medicare Part B areas the OIG will either continue to examine or will newly examine in FY 2013 include:

Program Integrity—Onsite Visits for Medicare Provider and Supplier Enrollment and Reenrollment

Program Integrity—Payments to Providers Subject to Debt Collection

Independent Therapists—High Utilization of Outpatient Physical Therapy Services

Sleep Disorder Clinics—High Utilization of Sleep Testing Procedures

Ambulances—Compliance With Medical Necessity and Level-of-Transport Requirement

Anesthesia Services —Payments for Personally Performed Services

Ophthalmological Services—Questionable Billing

Ambulatory Surgical Centers—Payment System

Rural Health Clinics—Compliance With Location Requirements

Electro-diagnostic Testing—Questionable Billing

Part B Imaging Services—Payments for Practice Expenses

Diagnostic Radiology—Medical Necessity of High-Cost Tests

Laboratory Tests—Billing Characteristics and Questionable Billing in 2010

Physicians and Other Suppliers—Noncompliance With Assignment Rules and Excessive Billing of Beneficiaries

Physicians—Error Rate for Incident-To Services Performed by Nonphysicians

Physicians—Place-of-Service Coding Errors

Evaluation and Management Services—Potentially Inappropriate Payments in 2010

Claims Processing Errors—Medicare Payments for Part B Claims With G Modifiers

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CMS Transmittals

CMS uses transmittals to communicate new or changed policies or procedures that will be incorporated into the CMS Online Manual System. The cover or transmittal page summarizes and specifies the changes. The following Transmittals were issued by CMS during the Month of September.

|Transmittal Number |Subject |Effective Date |

|R2553CP |New Waived Tests |2013-01-07 |

|R2554CP |Annual Clotting Factor Furnishing Fee Update 2013 |2013-01-07 |

|R2555CP |Influenza Vaccine Payment Allowances - Annual Update for 2012-2013 Season |2012-12-28 |

|R2556CP |Quarterly Update for the Durable Medical Equipment, Prosthetics, Orthotics and |2013-01-07 |

| |Supplies (DMEPOS) Competitive Bidding Program (CBP) - January 2013 | |

|R2558CP |Maintenance and Update of the Temporary Hook Created to Hold OPPS Claims that Include |2013-01-07 |

| |Certain Drug HCPCS Codes | |

|R430PI |General Update to Chapter 15 of the Program Integrity Manual (PIM) - Part VIII |2012-10-29 |

|R2560CP |New Fiscal Intermediary Shared System (FISS) Consistency Edit to Validate Attending |2013-01-07 |

| |Physician NPI | |

|R453PR1 |Adds material to conform to the current regulations; revises terminology to reflect |  N/A |

| |current usage; revises text to clarify its meaning or to eliminate obsolete policy; | |

| |and adds, deletes, or corrects cross references. | |

|R454PR1 |Donations to a Provider of Produce, Supplies, Space, Etc., has been added to contain |  N/A |

| |the policy previously contained in §§ 608 and 610 of Chapter 6. | |

|R2559CP |October Update to the CY 2012 Medicare Physician Fee Schedule Database (MPFSDB) |2012-10-01 |

|R2561CP |Revised and Clarified Place of Service (POS) Coding Instructions |2013-04-01 |

|R2540CP |October 2012 Integrated Outpatient Code Editor (I/OCE) Specifications Version 13.3 |2012-10-01 |

|R1124OTN |Manual Medical Review of Therapy Services |2012-10-01 |

|R147NCD |National Coverage Determination (NCD) for Transcatheter Aortic Valve Replacement |2013-01-07 |

| |(TAVR) | |

|R2552CP |National Coverage Determination (NCD) for Transcatheter Aortic Valve Replacement |2013-01-07 |

| |(TAVR) | |

|R2551CP |Extracorporeal Photopheresis (ICD-10) |2012-10-01 |

|R2548CP |Common Edits and Enhancements Modules (CEM) Code Set Update |2013-01-07 |

|R2549CP |Medicare Physician Fee Schedule Database (MPFSDB) 2013 File Layout Manual |2013-01-07 |

|R2547CP |Claim Status Category and Claim Status Codes Update |2013-01-07 |

|R2546CP |Instructions for Retrieving the 2013 Pricing and HCPCS Data Files through CMS' |2013-01-07 |

| |Mainframe Telecommunications Systems | |

|R1119OTN |Implementation of the Award for the Jurisdiction 5 Part A and Part B Medicare |2012-10-22 |

| |Administrative Contractor (J5 A/B MAC) Reprocurement Including a New Workload Number | |

| |for the Remaining WPS Legacy Workload | |

|R1122OTN |International Classification of Diseases (ICD)-10 Conversion from ICD-9 of the |2013-01-07 |

| |Medicare Shared Systems as They Relate to CMS National Coverage Determinations (NCDs) | |

| |(CR 1 of 3) (ICD-10) | |

|R2544CP |Contractor and Common Working File (CWF) Additional Instructions Related to Change |2012-10-01 |

| |Request (CR) 7633 - Screening and Behavioral Counseling Interventions in Primary Care | |

| |to Reduce Alcohol Misuse | |

|R2543CP |Extracorporeal Photopheresis (ICD-10) |2012-10-01 |

|R433PI |Review of Debarment List and Processing of Tie-in Notices |2012-10-09 |

|R2542CP |2013 Annual Update of Healthcare Common Procedure Coding System (HCPCS) Codes for |2013-01-07 |

| |Skilled Nursing Facility (SNF) Consoliadated Billing (CB) Update | |

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