CMS eases provider burden and reporting requirements in CLFS final rule
CMS issued a final rule in June to revamp the way it pays for tests under the Clinical Laboratory Fee Schedule (CLFS), though the agency has pushed the start date back a year and worked to ease administrative burden based on public comments.
"This, along with some other changes CMS finalized based on commenter concerns and additional analyses, is really good news for providers," says Jugna Shah, MPH, president and founder of Nimitt Consulting, Inc. "It’s all in the spirit of reducing provider burden."
Now starting January 1, 2018, CMS will base CLFS payments on the weighted median amount paid by private payers for the same services. Providers are hopeful that these new weighted median rates based on a different process from the existing CLFS updating process, which has remained relatively unchanged since its establishment in 1984, will result in more accurate rates, says Shah.
Applicability
In order to develop the new rates, CMS will require "applicable laboratories to report applicable information" to the agency.
An applicable lab is defined as one that receives at least $ 12,500 in payments under the CLFS, and more than 50% of Medicare revenue from laboratory and/or physician services over the data reporting period to report private payer rates and test volumes for laboratory tests.
These thresholds will exclude approximately 95% of physician office laboratories and 55% of independent laboratories from having to report information, along with just about all hospital labs, according to CMS.
The applicable information required to be reported is:
- The payment rate that was paid by each private payer for each test during the data collection period
- The volume of such tests for each such payer
CMS originally proposed to use Taxpayer Identification Numbers (TIN) to identify applicable laboratories, but in the final rule made a change to use National Provider Identifiers (NPI). In order to keep administrative burden at a minimum, CMS will continue to apply the reporting requirements at the TIN level, making those entities responsible for reporting all NPI-level information for its applicable laboratories.
CMS also clarified that the information that must be reported is tied to payments received, which means that if a claim was submitted but payment was not yet received or was denied, that data would not be reported to CMS.
The data reporting period has been shortened from one year in the proposed rule to six months in the final rule. The first data collection period is from January 1?June 30, 2016. That collected data will have to be reported to CMS from January 1?March 31, 2017.
CMS plans to follow this schedule for subsequent collecting and reporting periods, which will occur every three years for all CLFS tests except Advanced Diagnostic Laboratory Tests (ADLT), which will have more frequent data collection and updating.
CMS has defined an ADLT as a clinical diagnostic laboratory test that is covered under Medicare Part B and offered and furnished by only a single laboratory, and only sold for use by the original developing laboratory, or a successor owner.
The test must also meet the following criteria:
- The test is an analysis of multiple biomarkers of DNA, RNA, or proteins combined with a unique algorithm to yield a single patient-specific result
- the test is cleared or approved by the Food and Drug Administration (FDA)
- the test meets other similar criteria established by the secretary of HHS
In response to public comments to the proposed rule, CMS changed the definition of ADLTs, which originally only included molecular pathology analysis and did not include protein-only based tests.
ADLTs have been established by the agency in order to recognize when a laboratory has expended all of the resources associated with a test, including development, marketing, and selling.
The $ 12,500 threshold for CLFS payments will not apply with respect to ADLTs. If a laboratory would otherwise meet the definition of applicable, excepting the $ 12,500 threshold, CMS will consider it applicable with respect to the ADLT and it must report the applicable information pertaining to the ADLT.
Payments and penalties
In order to slowly migrate current payment rates over to the new ones based on private payer data, CMS has built in safeguards to prevent payments from dropping more than a certain amount each year, says Shah, which is helpful for mitigating large financial swings. CMS finalized that payment for a test cannot drop more than 10% compared to the previous year for the first three years after the January 1, 2018 implementation, and not more than 15% in the subsequent three years.
For example, a test currently has a payment rate of $ 20, but the data from the first reporting period shows a weighted median private payer rate of $ 15. For the first year of implementation, instead of using the $ 15 payment, CMS would limit the reduction to $ 2, resulting in an $ 18 payment rate. Another 10% would be subtracted the next year, bringing payment to $ 16.20. CMS would continue to apply the maximum allowed percentage reduction until the payment reaches the weighted median of private payer rates.
Initial payment for new ADLTs will be based on the actual list charge of the test for three calendar quarters. CMS defines the list charge as the "publicly available rate on the first day the new ADLT is obtainable by a patient who is covered by private insurance, or marketed to the public as a test a patient can receive, even if the test has not yet been performed on that date."
After the first three quarters, the rate will be based on the weighted median of private payer rates and associated volume reported annually.
For new and existing tests which the agency has no applicable information to create the weighted median rate, the agency will use crosswalking or gapfilling methods.
CMS will also be able to impose civil monetary penalties to applicable laboratories that fail to report all applicable information or misrepresent or omit that data. The agency requires that all data be certified by the president, CEO, CFO, or an individual who has been delegated to sign for and directly report to one of those individuals.
In this final rule, CMS also agreed to release subregulatory guidance that will provide a list of HCPCS codes for which private payer rates should be submitted, which will be useful, says Shah, as this takes some of the guesswork out about which services or tests CMS is expecting to receive data.
CMS will use HCPCS G codes to identify new ADLTs and laboratory tests that are cleared or approved by the FDA. These would be temporary codes that would be in effect for up to two years, until a permanent HCPCS code is created or use of the temporary code is extended.
Editor’s note: For more information, see the fact sheet at www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2016-Fact-sheets-items/2016-06-17.html.
Billing therapy services in support of comprehensive APC services
by Valerie A. Rinkle, MPA
CMS’ Transmittal 3523, issued May 13, is the quarterly July 1 OPPS update. In this transmittal, CMS briefly mentions billing physical and occupational therapy and speech-language pathology services provided in support of or adjunctive to comprehensive APC (C-APC) services under revenue code 0940 (general therapeutic services) rather than the National Uniform Billing Committee?defined revenue codes for these services (i.e., 042x, 043x, and 044x, respectively).
CMS refers to these therapy services as "non-therapy outpatient department services." In addition, CMS says that these services should not be reported with therapy CPT® codes.
These therapy services have been packaged into C-APCs since the inception of these per-encounter/per-claim payments in 2015. Initially, CMS implemented 25 C-APCs in 2015 for device-intensive procedures. In 2016, the agency expanded the concept to 33 surgical and procedural C-APCs covering almost 700 CPT/HCPCS procedure codes in nine clinical families. It also added one C-APC to pay for ancillary services in the case of inpatient-only procedures performed on a patient who dies prior to being admitted as an inpatient (billed with modifier ?CA).
Another C-APC is for observation services when billed for eight or more hours, with either ED, clinic, or direct admit codes and no surgery service performed. These C-APCs are defined with status indicators J1 and J2. On these claims, there is one payment associated with one primary CPT/HCPCS regardless of the number of days for the encounter. All of the other charges and codes are billed on the claim. There are a few exceptions, such as non-OPPS services like ambulance and preventive services such as vaccines and mammography.
While the transmittal does not provide much explanation, it is assumed that this instruction follows CMS’ comment in the 2016 OPPS final rule, where CMS stated at 80 FR 70326 (emphasis added):
Payment for these non-therapy outpatient department services that are reported with therapy codes and provided with a comprehensive service is included in the payment for the packaged complete comprehensive service. We note that these services, even though they are reported with therapy codes, are outpatient department services and not therapy services. Therefore, the requirement for functional reporting under the regulations at 42 CFR 410.59(a)(4) and 42 CFR 410.60(a)(4) does not apply.
Therefore, according to this statement in the 2016 OPPS final rule, CMS intended to provide administrative relief to hospitals so that they would no longer have to report functional status HCPCS G codes and modifiers when these therapy services were provided in support of C-APC services and included on the same claim.
However, since January 1, the Integrated Outpatient Code Editor (I/OCE) claim edits continue to require reporting of functional status HCPCS G codes and modifiers if therapy CPT and revenue codes are reported. Changing the reporting of these therapy services from the usual revenue codes and CPT codes to revenue code 0940 and no CPT codes will no longer trigger the claim edits that require the reporting of functional status codes and modifiers. However, there seems to be even more behind this change.
Defining therapy services
CMS described these therapy services provided during the perioperative period or in support of observation as not the same therapy services discussed in section 1834(k) of the Social Security Act (SSA). This distinction is an important one, because therapy services that meet the definition of therapy services performed by therapists under a plan of care in accordance with sections 1835(a)(2)(C) and 1835(a)(2)(D) of the SSA are excluded from OPPS by statute and paid under the Medicare physician fee schedule.
CMS implies that therapy services performed during the same encounter as C-APC services, even when performed by licensed and credentialed therapists, do not meet that same statutory definition of therapy, namely due to not being under a plan of care. Therefore, CMS no longer wants these therapy services in support of C-APCs to be reported with the same revenue and CPT codes as that used for therapy provided under a plan of care, which are required to be billed as repetitive services on monthly claims. C-APC services are required to be on an outpatient hospital claim that includes all the other charges and codes for services performed during the same encounter that are supportive or adjunctive to the C-APC service.
The transmittal also refers to the status indicator for this revenue code (0940) being changed from B to N. Status indicator B means codes that are not recognized when submitted on an OPPS claim. One way to remember this is that B stands for "better code." Status indicator N means items unconditionally or always packaged, or stated another way, services never separately paid. Heretofore, status indicators were preserved for CPT/HCPCS codes and APC groupings and not assigned to revenue codes.
However, CMS maintains a list of packaged revenue codes. Previously, revenue code 0940 was not included in the list of packaged revenue codes (Table 4 in the 2016 OPPS final rule at 80 FR 70320). CMS appears to be changing revenue code 0940 to be included in the list of packaged revenue codes.
If the services are no longer to be reported with CPT codes, then this revenue code will become packaged. As is the case with all packaged revenue codes, if the service is defined by a CPT/HCPCS code, and all other CPT/HCPCS coding and NCCI policies are followed, the CPT/HCPCS codes should be reported in addition to the revenue code irrespective of the fact that the revenue code is packaged.
Setting a precedent
This transmittal is the first time that CMS appears to suggest that services that meet the definition of CPT/HCPCS codes should not be reported at all, even when all other CPT/HCPCS coding conventions and NCCI policies are followed; it appears to be a precedent for CMS.
Once this change occurs, CMS will not use hospital therapy cost center cost-to-charge ratios from hospital cost reports to reduce the billed charges for therapy under revenue code 0940, but rather hospitals’ "other" cost center cost-to-charge ratios. It will likely result in a mismatch of revenue and expense that could adversely impact future rate setting.
It is interesting to note that rehabilitation services are optional hospital services under CMS’ Conditions of Participation (CoP) at 42 CFR 482.56, which states:
Physical therapy, occupational therapy, speech-language pathology or audiology services, if provided, must be provided by qualified physical therapists, physical therapist assistants, occupational therapists, occupational therapy assistants, speech-language pathologists, or audiologists as defined in part 484 of this chapter.
There are a few services that CMS defines as "sometimes therapy services" which can either be performed by therapists or nurses, namely wound care services. The CoPs, which are different than conditions of payment, do not require a plan of care, but do require orders. Therefore, it appears that hospital therapy services can be provided without a plan of care, and presumably, these services are now packaged under OPPS and do not qualify for physician fee schedule payment. Requirements for therapy plan of care for coverage can be found at 42 CFR 410.61 and 42 CFR 424.24.
To implement this change, hospitals will likely have to duplicate therapy charges in the chargemaster under the different revenue code that would only be used for Medicare outpatients and not for Medicare inpatients, and commercial or Medicaid accounts that are not likely to follow this billing instruction. This implementation step will likely complicate charge capture and increase the likelihood of errors.
Providers should evaluate this CMS instruction and provide feedback to the agency. Consider the following:
- Is this proposal more or less burdensome than continuing to report therapy under the current revenue codes and also reporting the functional status codes and modifiers?
- Do hospitals currently develop plans of care for therapy, whether or not it is in support of a C-APC service?
- Will it alleviate a different type of burden on therapists if plans of care are not required?
Providers should comment to CMS if this solution is more burdensome or creates more confusion. CMS may be able to find other ways to change the I/OCE edits for functional status codes and modifiers and allow therapy services to continue to be reported with the usual revenue codes and CPT codes.
One of the most significant impacts may be to the accuracy of future payment rates. If this instruction continues without change, then a fundamental principle of cost reporting and rate setting seems to have been changed. This new policy may create a critical precedent for future rate setting. If CMS does not hear from many providers, then it is not likely to change the requirement and providers will need to work toward implementation as of July 1.
Editor’s note: Rinkle is a lead regulatory specialist and instructor for HCPro’s Medicare Boot Camp®?Hospital Version, Medicare Boot Camp®?Utilization Review Version, and Medicare Boot Camp®?Critical Access Hospital Version. Rinkle is a former hospital revenue cycle director and has over 30 years in the healthcare industry, including over 12 years of consulting experience in which she has spoken and advised on effective operational solutions for compliance with Medicare coverage, payment, and coding regulations.
Challenges and opportunities in data analytics
Healthcare organizations have become mass gatherers of data. But without sophisticated analytics, integrated IT tools, and processes to mine that data, they may not be able to take advantage of it.
The 33 leaders who gathered for the HealthLeaders Media Revenue Cycle Exchange, held March 23?25 at the Fairmont Grand Del Mar in San Diego, discussed some of the challenges and opportunities they’ve identified within their organizations around data analytics, as well as the tools that help them maintain an effective revenue cycle.
Let the data do the talking
Popular wisdom says culture starts at the top?but data is another important catalyst for change. The ongoing managed Medicaid expansion is requiring organizations to collect more prior authorizations and precertifications, presenting a challenge for revenue cycle leaders. Changing the culture of the organization is often key to handling that challenge, and one way to make the change is through data, says Jane Berkebile, MA, CPAM, system vice president of revenue cycle for OhioHealth in Columbus.
One significant challenge for OhioHealth is educating physicians about the increased need for preauthorizations under managed Medicaid. In the past, many of these patient accounts were written off as charity care. However, Berkebile’s organization now needs to focus on the administrative requirements around Medicaid.
Educating OhioHealth’s 343 physician practices, as well as the employed specialists and primary care physicians, by showing them the importance of preauthorizations, has represented a change in culture.
"For communication with our physicians, clinicians, and administration, the best tool we have is to show them in the data what’s really happening," says Berkebile. Her organization’s data analytics team drills down to the information that impacts each department. Departments usually see the gross charge number and think they are doing well, she says.
However, if a department is not getting appropriate authorizations, it may not actually be getting paid that amount. Berkebile finds physicians in particular react positively to seeing data.
"If you show them the data and don’t preach to them, and let them discover the problem, you can get more positive reactions from the physician community," she says. Following the data trail can also help you avoid pitfalls, such as relying on anecdotes that may hide the actual problem.
"The tyranny of the anecdote will not be allowed in this organization," says Doug Robison, performance improvement leader for John Muir Health in Walnut Creek, California. "You have to back it up with data."
Turn data into information
Even data only goes so far?it needs to be turned into information, says Russ Weaver, vice president of revenue cycle/finance for Adventist Health System in Burleson, Texas, relating advice he once received.
"You will be more successful if you figure out how to turn data into information. When you’re given something, ask, ‘What does this tell me?’ "
It is important to get back to the root cause and have a sufficient level of detail to address change. As part of the transition to the Cerner Patient Accounting product, Adventist has taken the opportunity to review its processes and reporting. As part of this, Weaver is careful to avoid relying on anecdotal information.
"You can’t go to the director of patient accounts and say you think his or her department is doing something wrong without having meaningful data to back it up," he says.
Sometimes what seems like a data problem is really something else, so it’s important not to lose sight of the basics, such as whether your organization is collecting required data on the front end, according to Doug Brandt, CPA, associate chief financial officer for Truman Medical Centers in Kansas City, Missouri.
"We’re focused on capturing the data items that need to be captured. There is always some low-hanging fruit, so identify and fix that first, then move to the harder-to-fix items," he says.
For example, it is important for revenue cycle leaders to look at the root cause of things such as denials. Even if you are measuring all the right things, if something is not happening at the front end (for example, the registration department is not verifying the patient insurance), you are going to get denials. UnityPoint Health in Des Moines, Iowa, is using data to get to the root cause of denials.
"We’re using data to drive that change by having the service providers focus on getting it correct at the beginning, versus always having to do it on the back end," says Renee Rasmussen, CPA, MBA, FHFMA, vice president of revenue cycle for UnityPoint Health.
Ensure ‘clean’ data
Organizations that can’t trust their data might run into problems with data standardization. Alternatively, organizations can fall into the trap of having too much data, but not enough accountability. The first step to ensuring clean data is to assemble a group of stakeholders to determine what data is necessary and where it will come from, says Tammy Thomlison, chief revenue cycle officer for the University of Mississippi Medical Center in Jackson.
Her organization has set up a team to look at the data warehouse generated by Epic and agree, organizationwide, where they will pull data from.
"As an organization, we had to decide where we would pull certain information from the data warehouse, so that when we’re pulling reports we all get the same results," says Thomlison. Her team also uses the Qlik software to provide reporting options on top of the data warehouse. Having data in multiple systems and managing various interpretations of that data is a challenge for many organizations.
Systems must also ensure the data is clean once they have it, says Don Shaw, vice president of revenue cycle for Baton Rouge (Louisiana) General Medical Center. "Once you start pulling information, you find that sometimes you have surprises that you have to fix."
Revenue cycle leadership must hold itself to the same accountability standards it hopes to see from other departments. Data transparency is one way to increase collaboration and trust between the revenue cycle and clinical departments.
"I think it goes back to making sure our data is as accurate as possible. If other departments find differences or errors, we acknowledge that and go back and make those adjustments," says Rasmussen.
Measure the right things
The University of Chicago Medicine focuses more on internal benchmarks than external.
"Your benchmark is what you did last week. Now do better than that," says Charlie Brown, MBA, vice president of revenue cycle for The University of Chicago Medicine. "To really set those individual targets, you’ve got to measure against your own internal performance."
UnityPoint also focuses on internal benchmarks, but supplements them with HFMA’s MAP App, says Rasmussen. "We look at the key performance indicator of net revenue yield for our nine regions to really compare different areas."
The most important thing is to set your own benchmarks and targets, adds Berkebile. "By looking at your data and seeing where you are, you see the opportunities and continually set targets to improve your own data. We don’t try to match somebody else’s number?we continually work on improving our own performance."
Organizations need to avoid the pitfall of measuring the wrong things or being so inundated with data that they can’t make a decision.
"There are an endless number of things we can measure, and you don’t want to be playing a game of whack-a-mole where every time something pops up, you hit it and then another thing pops up," says Brandt. "It’s important to find the balance and identify where we need to drill and what we need to focus on."
Reporting modifiers for services performed in the postoperative period
Modifier -58 describes a staged or related procedure or service by the same provider during the postoperative period. For outpatient hospitals, the postoperative period is defined as the same service date.
Report modifier -58 to indicate the performance of a procedure or service during the same calendar day postoperative period. For example, a scheduled diagnostic procedure might be performed in the morning, resulting in the decision by the surgeon to perform an unscheduled therapeutic procedure on the same patient later on the same day.
Because hospital outpatient reporting represents services performed within a given 24-hour period or a range of dates, the original intent and use of modifier -58 is not altered for hospital outpatient reporting.
Modifier -58 indicates that the reported procedure is related to the original procedure, intended to be performed sometime in the future as a "staged" procedure, and may represent the following:
- A procedure performed by the original surgeon or provider
- A follow-up surgery more extensive than the original procedure
- A therapy following a diagnostic surgical procedure
The use of the modifier -58 enables the fiscal intermediary or other payers/carriers to pay appropriately for the procedure per se and other associated postoperative services performed subsequent to the original procedure on the same calendar date (for outpatient hospital billing).
Modifier -58 is not used to report a related or unrelated procedure performed on the same date as the original procedure. To report this circumstance, use a different, more suitable modifier.
Also remember to check with your fiscal intermediary regarding local policy associated with the use of the modifier -58 for staged procedures on the same date.
Appropriate use of modifier -58
- To report a secondary procedure that was staged or planned at the time of the original procedure
- When the secondary procedure is more extensive than the original procedure
- For therapeutic services following a diagnostic procedure
- When performing a second or related procedure during the postoperative period
- Bill modifier -58 with the subsequent performed procedure
Inappropriate use of modifier -58
- Appending the modifier to services listed in CPT as multiple sessions (e.g., 67208, destruction of localized lesion of retina, one or more sessions)
- For a service that is treating a complication from the original surgery (see modifier -78)
- Unrelated procedures
For example, a spinal neurostimulator generator is inserted following the insertion of two neurostimulator leads and trial dosing performed earlier on the same calendar day.
Providers should report:
- 63650, percutaneous implantation of neurostimulator electrode
- 63650-59, percutaneous implantation of neurostimulator electrode?distinct procedural service
- 63685-58, insertion of spinal neurostimulator pulse generator?staged or related procedure by the same physician during the postoperative period
Reporting modifier -78
Modifier -78 describes a return to the operating room for a related procedure during the postoperative period. For outpatient hospitals, the postoperative period is defined as the same service date.
Use modifier -78 to indicate that another procedure was performed during the postoperative period of the initial procedure that was performed earlier in the same day.
For example, an unscheduled breast lumpectomy may be performed after a breast biopsy that took place earlier on the same calendar day or postoperative control of bleeding may occur for a procedure performed earlier on the same calendar day.
Use of modifiers applies to services/procedures performed on the