Three-day prior hospitalization
Background
In order to qualify for post-hospital extended care services, people with Medicare must have been an inpatient in a
hospital for a medically necessary stay for at least three consecutive days. In addition, the beneficiary must have
been transferred to a participating skilled nursing facility (SNF) within 30 days following discharge from the hospital.
In determining whether the three consecutive calendar day stay requirement has been met, the day of admission is
counted as a hospital inpatient day, not the day of discharge. Time spent in observation status or in the emergency
room prior to an inpatient admission to the hospital does not count toward the three-day qualifying inpatient hospital
stay. For purposes of the SNF benefit qualifying hospital stay requirement, inpatient status begins with the calendar
day of hospital admission.
Coverage determination
To be covered, the extended care services must have been for the treatment of a condition for which the beneficiary
was receiving inpatient hospital services or a condition which arose while in the SNF for treatment of a condition for
which the beneficiary was previously hospitalized. In this context, the applicable hospital condition does not have to
be the principal diagnosis that actually precipitated the beneficiary’s admission to the hospital, but could be any one
of the conditions present during the qualifying hospital stay.
Critical Care CPT 99291 Widespread
Prepayment Targeted Review Results
Posted May 22, 2014 in Part B
Medical Review (MR) Part B has recently completed the widespread prepayment widespread
targeted review of CPT 99291, Critical Care, Evaluation and Management of the Critically Ill or
Injured Patient: First 30-74 Minutes for the first quarter of 2014. Claims which met the edit
parameters were randomly selected across the provider community. The error rates for this review
were 93% for Alabama, 68% for Georgia, and 40% for Tennessee. Based on the outcomes of this
review the prepayment widespread targeted review will be discontinued and data analysis will be
reviewed to determine if any providers are driving the continued high error rates.
Review of the claims submitted indicated that the documentation did not support critical care
services were provided as submitted on the claim by the billing of 99291.
State
Error Rate
Alabama
75%
Georgia
89%
Tennessee
75%
Medical record reviews indicated the following:

Critical care time was not documented; the reviewer could not determine the amount of
time the physician and/or hospital staff spent with patients.

CPT 99291 was billed with less than 30-74 minutes documented;


Examples:

Total critical care time of 15 minutes was documented in the record

Patient had arrived on full life support and was pronounced dead soon after arrival
Documentation did not support that the physician and/or hospital staff were engaged in
active face to face critical care of a critically ill or critically injured patient.
Critical care is defined as the direct delivery by a physician (or hospital staff) of medical care for a
critically ill or critically injured patient. A critical illness or injury acutely impairs one or more vital
organ systems such that there is a high probability of imminent or life threatening deterioration
in the patient’s condition.
Critical care services include the treatment of vital organ failure and/or the prevention of further life
threatening deterioration in a patient’s condition. Delivering critical care in a moment of crisis or
upon being called to the patient’s bedside emergently is not the only criteria for providing critical
care services. Treatment and management of a patient’s condition in the threat of imminent
deterioration while not necessarily emergent, also meets the requirement. Failure to initiate
interventions on an urgent basis would likely result in sudden, clinically significant or life threatening
deterioration in the patient’s condition.
NOTE: Critical Care services may be provided/billed when the services are medically
necessary and meet the definition of critical care. Services may be provided emergently (ex.
– at the time of presentation to the ER) or later in the episode of care.
CPT Code 99291 can be used once per calendar date.
Medical record documentation of critical care services should demonstrate the patient’s condition
warranted the type and amount of services provided. The medical necessity of the services must be
documented with the total time the physician and/or hospital staff were engaged in active face
to face critical care of a critically ill or critically injured patient.
There were also a high percentage of denials due to the lack of timely submission of requested
documentation, as indicated by denial reason code 351. According to the Medicare Program
Integrity Manual, PUB 100-8, Chapter 3, § 3.4.1.2, if a coverage or coding determination cannot be
made based upon the information on the claim, the Medicare Administrative Contractor (MAC) may
solicit additional documentation from the provider by issuing an Additional Documentation Request
(ADR) and must notify the provider of the 30 day time-period to respond. If the ADR-requested
information is not is received within 45 days after the date of the request, then the claim must be
denied.
To eliminate 351 denials, please review the following elements to ensure appropriate and timely
record processing:

Attach a copy of the ADR to the front of the requested medical documentation

Send requested information by your preferred method: mail, fax, CD, esMD, etc…

Include ALL requested documentation outlined in the ADR

Submit the above information in a timeframe to ensure the MAC receives the information by
the 45th day after the date of the request.
For detailed documentation and coding information on critical care services (CPT 99291) in the
hospital outpatient setting, refer to the following references:

American Medical Association Current Procedural Terminology (CPT ®) 2012 and/or 2013
Standard Edition

Medicare Claims Processing Manual, Chapter 12, Section 30.6.12
Note from the instructor: CMS? Advisory
Panel on Hospital Outpatient Payment seeks
input on chemotherapy supervision rules
Medicare Insider, July 1, 2014
Hospital outpatient therapeutic services paid under OPPS or paid to critical access hospitals
(CAH) on a cost basis must be furnished “incident to” a physician’s service to be covered. There
are four elements to meet incident to; however, furnishing the service under the appropriate level
of supervision by a physician or non-physician practitioner has become the most complex.
In most circumstances, CMS has designated direct supervision to be the default level of
supervision for hospital outpatient therapeutic services. CMS has also designated general
supervision as appropriate for specific services that have been identified through a sub-regulatory
process. The Advisory Panel on Hospital Outpatient Payment–called the Panel—which has
included representation from CAHs since 2010, considers recommendations from providers and
its own members.
The Panel meets in March and August, and CMS prioritizes requests for consideration by the
Panel based on service volume, total expenditures, and frequency of requests. Hospitals may
request that the Panel review a particular service and recommend to CMS that it be approved to
be provided under general supervision. Following the Panel meeting, CMS posts their
preliminary decisions on the Panel’s recommendations for a 30-day comment period. After the
comment period, they will issue their decisions effective July 1 following the March meeting or
January 1 following the August meeting.
On March 10, 2014, the Panel met and reviewed the supervision levels of eight HCPCS codes
related to the administration of chemotherapy, complex drugs, or biologic agents. At that
meeting, the Panel recommended that these codes be changed from direct to general supervision.
However, CMS “believed that the appropriate supervision level for these services is inherently a
clinical issue” and they decided not to change the supervision requirement. Although CMS
solicited public comments regarding the clinical standards for supervision for both initial and
subsequent administrations of these drugs, it appeared to CMS that the commenters
misunderstood their intent of suggesting a different supervision level for the initial
administration and when that same drug is being given in a subsequent encounter. Instead, CMS
decided to refer these services back to the Panel for further deliberations at the August 2014
Panel meeting.
CMS explained that current clinical guidelines suggest that a general level of supervision is
unsafe. They are asking for more input whether the supervision level should be direct for the
initial administration followed by general for subsequent administrations of the same drug. CMS
also stated that they “welcome other suggested approaches that balance professional and hospital
viewpoints” and asked the Panel to weigh supervision levels as recommended by clinical
guidelines from professional associations with the realities of hospital operations and patient care
in rural areas.
On CMS’ hospital OPPS website, hospitals can also find the current list of hospital outpatient
therapeutic services that are either designated as non-surgical extended duration therapeutic
services (NSEDTS or “extended duration services”) or those that may be furnished under general
supervision in accordance with applicable Medicare regulations and policies. When hospitals
review the list, they may find a surprise that will go into effect on July 1, 2014. CMS’
preliminary decision on one of the recommendations from the March 10 Panel meeting stated
that they would not move transfusion of blood or blood products (HCPCS 36430) from direct to
general supervision.
“While we would not accept the Panel’s recommendation that CMS change the supervision level
to general for CPT code 36430, we would designate this code as a Non-Surgical Extended
Duration Therapeutic Services (or “extended duration services”), which would require an initial
period of direct supervision with potential transition of the patient to general supervision. We
believe blood transfusion warrants direct supervision initially to manage potential adverse
events and reactions.”
In looking at the updated list, hospitals will find that HCPCS 36340 will change from direct
supervision to general supervision which is contradictory to their March statement. For hospitals
that struggle with meeting direct supervision for certain outpatient services, like blood
transfusions, that are often provided by nursing staff and sometimes “after usual department
hours,” this may be the solution they have been looking for.
Part A New Modifier L1 & Separately Billable Clinical Laboratory Fee Schedule Services
CMS Change Request (CR) 8776 (PDF, 186KB) explains recurring Outpatient PPS update and CR 8764 (PDF, 110
KB) explains recurring Integrated Outpatient Code Editor (I/OCE) specifications for date of service beginning July
1, 2014. In these CRs, CMS announces the new modifier L1 for use by PPS hospitals when submitting claims for
separate payment of outpatient lab tests that are paid under the Clinical Laboratory Fee Schedule (CLFS).
As of January 1, 2014 date of service, hospitals have been reporting separately payable labs on 14X type of bills
(TOB). However, the National Uniform Billing Committee (NUBC) addressed CMS with some concerns.
Historically, the definition for 14X TOB is for non-patient (specimen only) lab services where the patient did not
receive outpatient services on the same date of service.
CMS instructs in CR 8776 that beginning with July 1, 2014 date of service, separately payable labs should be billed
on 13X TOB and with modifier L1. This guidance directs all hospitals to revert back to billing non-patient lab tests
on TOB 14X which is consistent with the NUBC’s definition of this bill type. Modifier L1 will be used with lab
services only in either of these two circumstances:
1. When the hospital collects the specimen and only provides lab services on that date of service; or,
2. When the hospital provides outpatient lab services and they are clinically unrelated to other hospital
outpatient services furnished on the same day.
In the second circumstance, unrelated means the laboratory test is ordered by a different physician other than the
physician who ordered the other hospital outpatient services, for a different diagnosis. If this definition is met, the
lab test would be eligible to be reported with modifier L1 to trigger separate payment. If the definition is not met,
modifier L1 would not be reported and the lab payment would be packaged into another separately payable service.
PPS hospitals do not have to resubmit claims for lab tests that had previously been billed using 14X TOB prior to
July 1, 2014 date of service.
Also in CR 8776, CMS clarifies its current payment policy regarding the limited set of Part B inpatient services that
a hospital may bill for when a beneficiary is either not eligible for or not entitled to Part A coverage or when a
beneficiary has exhausted their Part A benefits. Included in that short list of services is lab service paid under the
CLFS.
CMS clarifies that in these scenarios, lab testing is excluded from OPPS packaging rules if the primary service with
which the lab would have been bundled into is not a payable Part B inpatient service. CMS has adjusted its claims
processing logic to make separate payment for laboratory services paid under the CLFS that would otherwise be
packaged under OPPS beginning in 2014.
In CR 8776 states that “Medicare contractors shall adjust 12X claims for beneficiaries who are either not entitled to
Part A at all, or are entitled to Part A but have exhausted their Part A benefits where the laboratory services were
packaged for 2014 date of service that are brought to their attention.”
For those hospitals that billed under 12X TOB including these lab services; please submit a 127 TOB adjustment
claim with a D1 condition code (Change of Charges) and remove those services. You will then need to rebill for
those lab services on a 13X TOB with L1 modifier to receive separate reimbursement.
Please note that CR 8776 does not address Sole Community Hospitals (SCH) billing for unrelated lab on 14X TOB
that have not received additional reimbursement since January 1, 2014. SCHs should refer to additional guidance in
MLN Matters Article SE1412 (PDF, 71 KB).
For claims submitted by a SCH, MACs have no way to discern which labs should have been paid the add-on
payment versus which labs should have been paid as true non-patient labs and cannot reprocess these claims.
Therefore, SCH providers may cancel claims that were submitted without the modifier L1 prior to July 1, 2014 and
then submit a new 13X TOB with the appended modifier after July 1, 2014 in order to receive the corrected
reimbursement.
FACT SHEET
FOR IMMEDIATE RELEASE
July 3, 2014
Contact: CMS Media Relations
(202) 690-6145 or press@cms.hhs.gov
CMS PROPOSES HOSPITAL OUTPATIENT AND AMBULATORY SURGICAL CENTERS POLICY AND PAYMENT
CHANGES FOR 2015
The Centers for Medicare & Medicaid Services (CMS) issued the Calendar Year (CY) 2015 Hospital
Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System
Policy Changes and Payment Rates proposed rule [CMS-1613-P] on July 3, 2014.
The proposed rule would update Medicare payment policies and rates for hospital outpatient department and ASC services,
and update and streamline programs that encourage high-quality care in these outpatient settings. This proposal would
continue the progress made so far in moving the OPPS from what currently resembles a hybrid of a prospective payment
system and a fee schedule, to a more complete prospective payment system. CMS is proposing a policy finalized in the CY
2014 OPPS/ASC final rule with comment period regarding comprehensive APCs, for which implementation was delayed until CY
2015. CMS is proposing refinements and updates to this policy to make a single payment for all related or adjunctive hospital
services provided to a patient in the furnishing of certain primary procedures, such as insertion of a pacemaker.
This Fact Sheet addresses the general payment provisions of the Hospital OPPS and ASC payment system
for CY 2015. A separate fact sheet addressing the quality provisions of the proposed rule can be found
here: http://cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2014-Fact-sheets.html.
Overview
More than 4,000 hospitals, including general acute care hospitals, inpatient rehabilitation facilities,
inpatient psychiatric facilities, long-term acute care hospitals, children’s hospitals, and cancer hospitals
are paid under the OPPS. There are approximately 5,300 Medicare-participating ASCs paid under the ASC
payment system.
The OPPS provides payment for most hospital outpatient department services, and covers partial
hospitalization services furnished by hospital outpatient departments and community mental health
centers. OPPS payment amounts vary according to the Ambulatory Payment Classification (APC) group to
which a service or procedure is assigned.
Proposed Changes to Hospital OPPS Payments and Policies
Proposed Payment Update. CMS proposes to update the OPPS market basket by 2.1 percent for CY
2015. The increase is based on the projected hospital market basket increase of 2.7 percent minus both
a 0.4 percentage point adjustment for multi-factor productivity and a 0.2 percentage point adjustment
required by law.
Comprehensive-APCs.
In the CY 2014 OPPS/ASC final rule, CMS adopted a Comprehensive-APC policy to expand the categories
of related items and services packaged into a single payment for a comprehensive primary service
under the OPPS, in order to make the OPPS more consistent with a prospective payment system. CMS
created Comprehensive-APCs to prospectively pay under the OPPS for high cost device dependent
services in 29 device dependent APCs using a single payment for the hospital stay. However, CMS
delayed implementation of this policy to CY 2015 to provide CMS and hospitals with more time to
evaluate and comment further on the policy.
In the CY 2015 OPPS/ASC proposed rule, we are proposing several additional Comprehensive-APCs,
including some lower cost device dependent APCs not proposed last year and 2 new APCs for other
procedures and technologies that are either largely device dependent or represent single session services
with multiple components. We are also proposing the restructuring and consolidation of some of the
current device dependent APCs with similar costs based on the 2013 claims data. After the APC
consolidation and restructuring we are proposing a total of 28 Comprehensive-APCs for 2015 versus the
29 Comprehensive-APCs that were described in the CY 2014 final rule.
Proposed Items and Services to be “Packaged” or Included in Payment for a Primary Service.
Under the OPPS, CMS currently pays separately for services that are ancillary, that is, they are integral,
supportive, dependent, or adjunctive to a primary service. These ancillary services are primarily minor
diagnostic tests, but therapeutic services can also be ancillary services.
For CY 2015, CMS proposes conditional packaging of all ancillary services assigned to APCs with a
geometric mean cost of $100 or less (prior to applying the conditional packaging status indicator to the
services within these APCs), as a criterion to establish an initial set of conditionally packaged ancillary
service APCs. When these ancillary services are furnished by themselves, CMS proposes to make separate
payment for these services only. Exceptions to the ancillary services packaging policy include preventive
services, psychiatry-related services, and drug administration services. Psychotherapy and related
services are excepted because these services are similar to visits and drug administration is excepted
because we are considering alternatives for drug administration services including the associated add-on
codes.
Off-Campus Provider-Based Departments. CMS proposes to begin collecting data on services furnished in off-
campus provider-based departments beginning in 2015 by requiring hospitals and physicians to report a modifier
for those services furnished in an off-campus provider-based department on both hospital and physician claims.
Hospital Outpatient Outlier Payment. CMS proposes that for a hospital to receive an outlier payment
under the OPPS, the cost of a service must exceed the multiple threshold of 1.75 times the APC payment
rate and exceed the CY 2015 fixed dollar threshold of the APC payment plus $3100. CMS estimates that
these thresholds would pay at the proposed target of 1 percent of total OPPS spending in outlier
payments.
Community Mental Health Center (CMHC) Outlier Payment. CMS is proposing to continue to set the
CMHC outlier threshold at 3.40 times the highest CMHC Partial Hospitalization Program (PHP) APC
payment rate (that is, APC 0173 (Level II Partial Hospitalization)) for CY 2015.
Part B Drugs in the Outpatient Department. CMS is proposing to continue paying average sales price
(ASP) + 6 percent for non-pass-through drugs and biologicals that are payable separately under the
OPPS.
Other Proposed Payment Updates
ASC Payment Update. ASC payments are annually updated for inflation by the percentage increase in the
Consumer Price Index for all urban consumers (CPI-U). The Medicare statute specifies a multifactor
productivity (MFP) adjustment to the ASC annual update. For CY 2015, the CPI-U update is projected to
be 1.7 percent. The MFP adjustment is projected to be 0.5 percent, resulting in an MFP-adjusted CPI-U
update of 1.2 percent for CY 2015.
Partial Hospitalization Program (PHP) Rates. CMS proposes to update the two payment rates for
community mental health centers and the two payment rates for hospital-based PHPs. For community
mental health centers, the proposed CY 2015 APC geometric mean per diem cost for Level I (three
services) would be $97.43 and for Level II (four or more services), $114.93. For hospital-based PHPs, the
proposed update to the APC geometric mean per diem cost would be $177.32 for Level I and $190.21 for
Level II.
Other Proposed Policy Changes
Proposed Overpayment Recovery and Appeals Process for Medicare Part C and Medicare Part D. CMS is
proposing a process that would allow CMS to recover overpayments that result from the submission of
erroneous payment data by a Medicare Advantage (MA) organization or Part D prescription drug plan
sponsor in the limited circumstances where the plan fails to correct those data upon request by
CMS. CMS is also proposing an appeals process for MA organizations and Part D sponsors to seek review
of CMS’s determination that the payment data are erroneous. The appeals process would have three
levels of review that would include reconsideration, an informal hearing, and an Administrator review.
Revision of the Requirements for Physician Certification of Hospital Inpatient Services. CMS currently requires a
physician certification, including an admission order and certain additional elements, for all inpatient
admissions. CMS found that for shorter stays and non-outlier stays, the admission order is a sufficient safeguard
from both a beneficiary and Trust Fund protection standpoint. Therefore, CMS is proposing that the admission
order would continue to be required for all admissions, but the physician certification would only be required for
outlier cases and long-stay cases of 20 days or more.
CMS will accept comments on the proposed rule until September 2, 2014 and will respond to comments
in a final rule to be issued on or around November 1, 2014. The proposed rule will appear in the July 14,
2014 Federal Register and can be downloaded from the Federal Register at:
http://www.ofr.gov/inspection.aspx?AspxAutoDetectCookieSupport=1.
#
FACT SHEET
FOR IMMEDIATE RELEASE
July 3, 2014
Contact: CMS Media Relations
(202) 690-6145 or press@cms.hhs.gov
CMS PROPOSES HOSPITAL OUTPATIENT AND AMBULATORY SURGICAL CENTERS QUALITY CHANGES FOR
2015
The Centers for Medicare & Medicaid Services (CMS) issued the Calendar Year (CY) 2015 Hospital
Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System
Policy Changes and Payment Rates proposed rule [CMS-1613-P] on July 3, 2014.
This fact sheet addresses the general quality provisions of the Hospital OPPS and ASC proposed rule for CY 2015. A separate
fact sheet addressing the payment provisions of the proposed rule can be found
here: http://cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2014-Fact-sheets.html
Overview
More than 4,000 hospitals, including general acute care hospitals, inpatient rehabilitation facilities,
inpatient psychiatric facilities, long-term acute care hospitals, children’s hospitals, and cancer hospitals
are paid under the OPPS. There are approximately 5,300 Medicare-participating ASCs paid under the ASC
payment system.
Proposed Quality Program Changes
Hospital Outpatient Quality Reporting (OQR) Program. CMS is proposing to remove three measures -- a cardiac
care measure (OP-4: Aspirin at Arrival (NQF #0286)) and two prophylactic antibiotic surgery measures (OP-6: Timing
of Prophylaxis Antibiotics and OP-7: Prophylactic Antibiotic Selection for Surgical Patients (NQF #0528)) as
performance is high with little variation between hospitals. CMS is proposing the addition of one claims-based
measure (OP-32: Facility 7-Day Risk-Standardized Hospital Visit Rate after Outpatient Colonoscopy) for the CY 2017
payment determination and subsequent years. CMS also proposes to change one chart-abstracted measure (OP-31:
Cataracts -- Improvement in Patient’s Visual Function within 90 Days Following Cataract Surgery (NQF #1536)) from
required to voluntary reporting.
CMS also is proposing modifications to the Hospital OQR Program validation process and formalization of
a review and corrections period.
ASC Quality Reporting Program. CMS continues to propose measure alignment across the Hospital OQR and
Ambulatory Surgical Center Quality Reporting (ASCQR) Programs. Therefore, we are proposing the addition of one
outcome measure (Facility Seven-Day Risk-Standardized Hospital Visit Rate after Outpatient Colonoscopy) and the
transition of one outcome measure (Cataracts -- Improvement in Patient’s Visual Function within 90 Days Following
Cataract Surgery (NQF #1536)) to voluntary reporting for both the Hospital OQR and ASCQR Programs.
CMS will accept comments on the proposed rule until September 2, 2014 and will respond to comments
in a final rule to be issued on or around November 1, 2014. The proposed rule will appear in the July 14,
2014 Federal Register and can be downloaded from the Federal Register at:
http://www.ofr.gov/inspection.aspx?AspxAutoDetectCookieSupport=1.
#
CMS Media Relations Group has sent this update. To contact press@cms.hhs.gov go to our contact us page.
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