Billing for a Flu Shot Given During an Inpatient Stay
When vaccines are provided to inpatients of a hospital or Skilled Nursing
Facility (SNF), they are covered under the vaccine benefit. However, the hospital
bills the FI on bill type 12X using the discharge date of the hospital stay or
the date benefits are exhausted. A SNF submits type of bill 22X for its Part A
inpatients (using the actual date of administration).
For more information, please see the Centers for Medicare & Medicaid Services (CMS) Internet-Only
Manual Publication 100-04, Chapter 18, Section 10.2.2 at
http://www.cms.gov/manuals/downloads/clm104c18.pdf
Billing
Pneumococcal, influenza, H1N1, and hepatitis B vaccines and their administration are
covered under Medicare Part B. The vaccines and their administration are separately
payable even when the patient is an inpatient in a covered Part A stay or under a home
health plan of care. They are not subject to SNF or HHA consolidated billing.
Pneumococcal and influenza vaccines are paid at 100 percent. Hepatitis B vaccine is
subject to the deductible and coinsurance. (Medicare Claims Processing Manual, Pub.
100-04, chap. 17, sec. 10; chap. 18, sec. 10.2; Medicare One Time Notification,
Pub.100.20 [trans. 815, November 19, 2010]) The applicable CPT codes for the
vaccines are:
90655 Influenza virus vaccine, split virus, preservative free, for children 6 to 35
months of age, for intramuscular use
90656 Influenza virus vaccine, split virus, preservative free, for use in
individuals 3 years and above, for intramuscular use
90657 Influenza virus vaccine, split virus, for children 6 to 35 months of age,
for intramuscular use
90660 Influenza virus vaccine, live, for intranasal uses
90662 Influenza virus vaccine, split virus, preservative free, enhanced
immunogenicity via increased antigen content, for intramuscular use
90669 Pneumococcal conjugate vaccine, polyvalent, for children under 3 years,
for intramuscular use
90670 Pneumococcal conjugate vaccine, 13 valent, for intramuscular use
90732 Pneumococcal polysaccharide vaccine (PPV), 23-valent, adult or
immunosuppressed patient dosage, for use in individuals two years and
older, for subcutaneous or intramuscular use
90740 Hepatitis B vaccine, dialysis or immunosuppressed patient dosage (threedose
schedule), for intramuscular use
90743 Hepatitis B vaccine, adolescent (two-dose schedule), for intramuscular
use
90744 Hepatitis B vaccine, pediatric/adolescent dosage (three-dose schedule),
for intramuscular use
90746 Hepatitis B vaccine, adult dosage, for intramuscular use
90747 Hepatitis B vaccine, dialysis or immunosuppressed patient dosage (fourdose
schedule), for intramuscular use
G9142 Influenza A (H1N1) vaccine, any route of administration
Q2035 Influenza virus vaccine, split virus, when administered to individuals 3
years of age and older, for intramuscular use (AFLURIA)
Q2036 Influenza virus vaccine, split virus, when administered to individuals 3
years of age and older, for intramuscular use (FLULAVAL)
Q2037 Influenza virus vaccine, split virus, when administered to individuals 3
years of age and older, for intramuscular use (FLUVIRIN)
Q2038 Influenza virus vaccine, split virus, when administered to individuals 3
years of age and older, for intramuscular use (Fluzone)
Q2039 Influenza virus vaccine, split virus, when administered to individuals 3
years of age and older, for intramuscular use (not otherwise specified)
— Providers must bill the administration of the vaccine on the same claim as the
vaccine. Report vaccine administration using HCPCS codes:
G0008 Administration of influenza virus vaccine
G0009 Administration of pneumococcal vaccine
G0010 Administration of hepatitis B vaccine (for all providers except OPPS
hospitals)
G9141 Influenza A (H1N1) immunization administration (includes the
physician counseling the patient/family)
90471–90472 Administration of hepatitis B vaccine (OPPS hospitals)
— When billing influenza or PPV vaccine, report special program indicator A6 in
FLs 18–28.
— Hospitals report bill type 013X or 012X as appropriate; SNFs report bill type 022X
or 023X as appropriate; swing-bed providers report bill type 012X; HHAs report bill
type 034X; RDFs report bill type 072X; CORFs report bill type 075X; CAHs report
bill type 085X. Indian Health Service (IHS) or tribally owned and/or operated
hospitals and hospital-based facilities may report bill types 012X, 013X, 083X, and
085X as appropriate.
— When billing hepatitis B vaccine, the NPI of the ordering physician must be reported
in FL 76. When billing influenza vaccine, if a doctor of medicine or osteopathy does
not order the influenza virus vaccine, report the provider’s own NPI in the NPI field
for the attending physician (FL 76).
— Payment for influenza and PPV vaccine and, is based upon reasonable cost for
hospitals, HHAs, SNFs, CAHs, provider-based RDFs. Vaccines administered by
CORFs, freestanding dialysis facilities, and IHS facilities are paid at the lower of
charges or 95 percent of the AWP.
— Payment for hepatitis B vaccine is under OPPS for OPPS hospitals and HHAs.
Vaccine payment for CORFs and freestanding dialysis facilities is made at the lower
of charges or 95 percent of the AWP.
— Report the appropriate diagnosis for the immunization in FLs 67, 67A–Q:
V03.82 PPV
V04.81 Influenza
V05.3 Hepatitis B
V06.6 PPV and Influenza
Use G9141 to report the administration of H1N1 influenza vaccine. OPPS providers
must report the H1N1 vaccine reporting G9142 with the G9141 for the H1N1 vaccine
administration. (Medicare Claims Processing Manual, Pub. 100-04, chap. 4, sec. 10.9
[trans. 1980, June 4, 2010])
----------------------------------------------------------
New Influenza Virus Vaccine Code
MLN Matters® Number: MM7580
Related Change Request (CR) #: 7580
Related CR Release Date: October 28, 2011
Effective Date: May 9, 2011
Related CR Transmittal #: R2337CP
Implementation Date: April 2, 2011
Provider Types Affected
Providers and physicians submitting claims to Medicare contractors (Fiscal Intermediaries (FIs), Part A/B Medicare
Administrative Contractors (A/B MACs), and/or Regional Home Health Intermediaries (RHHIs)) for influenza
vaccines provided to Medicare beneficiaries are affected by this article.
What You Need to Know
Effective May 9, 2011, claims with influenza virus vaccine code 90654 (influenza virus vaccine, split virus,
preservative-free, for intradermal use, for adults ages 18 – 64) will be payable by Medicare for claims with dates of
service on or after May 9, 2011, if submitted on or after April 2, 2012. HCPCS code 90654 was added to the 2011
HCPCS file effective January 1, 2011. However, 90654 didn’t become payable by Medicare until May 9, 2011.
Please make sure your billing staff is aware of these changes. Medicare contractors will not adjust claims submitted
prior to May 9, unless you bring such claims to their attention.
Background
Change Request (CR) 7580 advises that payment for this code to institutional providers is as follows:



Hospitals (Types of Bill (TOB) 12X and 13X, Skilled Nursing Facilities (SNFs) (TOBs 22X and 23X),
Home Health Agencies (HHAs) (TOB 34X), hospital-based Renal Dialysis Facilities (RDFs) (TOB 72X)
and Critical Access Hospitals (CAHs) (TOB 85X) are paid on reasonable cost;
Indian Health Service (IHS) hospitals (TOB12X and 13X) and IHS CAHs (TOB 85X) are paid based on
the lower of the actual charge or 95% of the Average Wholesale Price (AWP); and
Comprehensive outpatient rehabilitation facilities and independent RDFs (TOB 72X) are paid based on the
lower of the actual charge or 95% of the AWP.
Fiscal Intermediary Shared System (FISS) Claims Processing Updates For Ambulance Services
MLN Matters Number: MM7557
Related Change Request (CR) #: 7557
Related CR Release Date: October 28, 2011
Effective Date: For UB-04 Hardcopy Claims, August 1, 2011. For NPI requirement changes, April 1, 2012
Related CR Transmittal #: R2336CP
Implementation Date: April 2, 2012
Provider Types Affected
Providers and suppliers submitting claims to Centers for Medicare & Medicaid Services (CMS) contractors (Fiscal
Intermediaries (FIs) and/or Part A/Part B Medicare Administrative Contractors (A/B MACs) for ambulance services
provided to Medicare beneficiaries.
Provider Action Needed
This article identifies two changes in ambulance claims submissions. The first applies to UB-04 hard copy claims
beginning with dates of service on or after January 1, 2011, submitted August 1, 2011 and after. Mileage must be
reported as fractional units. When reporting fractional mileage, providers must round the total miles up to the nearest
tenth of a mile and the decimal must be used in the appropriate place (e.g., 99.9). For trips totaling less than 1 mile,
enter a “0” before the decimal (e.g., 0.9). This applies on trips of up to 100 miles.
The second change applies to claims with dates of service on or after April 1, 2012. Only non-emergency trips (i.e.,
Healthcare Common Procedure Coding System (HCPCS) codes A0426, A0428) require a National Provider
Identifier (NPI) in the Attending Physician field. Entry of a NPI in the Attending Physician field is not required for
emergency trips (i.e., HCPCS codes A0427, A0429, A0430, A0431, A0432, A0433, and A0434).
For claims with dates of service on or after April 1, 2012, Medicare will assure that only non-emergency trips (i.e.,
HCPCS A0426, A0428) require an NPI in the Attending Physician field. Emergency trips do not require an NPI in the
Attending Physician field (i.e., A0427, A0429, A0430, A0431, A0432, A0433, A0434).
Payment for Multiple Surgeries in a Method II Critical Access Hospital (CAH)
MLN Matters® Number: MM7587
Related Change Request (CR) #: CR 7587
Related CR Release Date: October 28, 2011
Effective Date: April 1, 2012
Related CR Transmittal #: R2333CP
Implementation Date: April 2, 2012
Provider Types Affected
Physicians, providers, and Method II Critical Access Hospitals (CAHs) submitting claims to Medicare contractors
(Fiscal Intermediaries (FIs) and/or A/B Medicare Administrative Contractors (A/B MACs)) for services provided to
Medicare beneficiaries are affected.
Provider Action Needed
This article is based on Change Request (CR) 7587 which implements the multiple procedure payment reduction
policy for CAH Method II providers. CR 7587 updates the “Medicare Claims Processing Manual” (Chapter 4,
Section 250). CR7587 is for clarification purposes only and does not introduce any policy changes.
Background
Medicare uses the payment policy indicators on the Medicare Physician Fee Schedule (MPFS) to determine if a
multiple procedure is authorized for a specific Healthcare Common Procedure Coding System/Current Procedural
Terminology (HCPCS/CPT) code.
Physicians and non-physician practitioners billing on type of bill (TOB) 85X for professional services rendered in a
Method II CAH have the option of reassigning their billing rights to the CAH. When the billing rights are reassigned
to the Method II CAH, payment is made to the CAH for professional services (revenue code 96X, 97X, or 98X)
based on the MPFS supplemental file.
Multiple surgeries are separate procedures performed by a single physician or physicians in the same group practice
on the same patient at the same operative session or on the same day for which separate payment may be allowed.
Co-surgeons, surgical teams, or assistants-at-surgery may participate in performing multiple surgeries on the same
patient on the same day.
Medicare pays for multiple surgeries by ranking from the highest MPFS amount to the lowest MPFS amount. When
the same physician performs more than one surgical service at the same session, the allowed amount is 100 percent
for the surgical code with the highest MPFS amount. The allowed amount for the subsequent surgical codes is based
on 50 percent of the MPFS amount. In addition, special endoscopic pricing rules are applied prior to the multiple
surgery rules, if applicable. Claims lines containing CPT modifier 22 are excluded from the multiple surgery
payment methodology.
When the multiple surgery and/or special endoscopic payment methodologies are applied, the remittance advice
notice will contain:


Claim adjustment reason code 59 – “Processed based on the multiple or concurrent procedure rules” and
Group code “CO” contractual obligation.
Endoscopies
If multiple endoscopies are billed, special rules for multiple endoscopic procedures apply. Medicare contractors will
perform the following actions when multiple HCPCS/CPT codes with a payment policy indicator of ‘3’ (Special
rules for multiple endoscopic procedures), with the same date of service, are present:
1. Identify if the billed codes share the same Endoscopic Base Code (using the Physician Fee Schedule Payment
Policy Indicator File).
2. Pay the full value of the highest valued endoscopy (if the same base is shared), plus the difference between the
next highest and the base endoscopy.
Example: In the course of performing a fiber optic colonoscopy (CPT code 45378), a physician performs a biopsy
on a lesion (code 45380) and removes a polyp (code 45385) from a different part of the colon. The physician bills
for codes 45380 and 45385. The value of codes 45380 and 45385 have the value of the diagnostic colonoscopy
(45378) built in. Rather than paying 100 for the highest valued procedure (45385) and 50 for the next (45380), pay
the full value of the higher valued endoscopy (45385), plus the difference between the next highest endoscopy
(45380) and the base endoscopy (45378).
Medicare contractors:
1.
2.
Assume the following fee schedule amounts for these codes: 45378 - $255.40; 45380 - $285.98;
45385 - $374.56; and
Pay the full value of 45385 ($374.56), plus the difference between 45380 and 45378 ($30.58), for
a total of $405.14.
NOTE: If an endoscopic procedure with an indicator of ‘3’ (Special rules for multiple endoscopic procedures) is
billed with other procedures that are not endoscopies (procedures with an indicator of ‘2’ (Standard payment
adjustment rules for multiple procedures)), the standard multiple surgery rules apply.
3. Apply the following rules where multiple endoscopies are performed on the same day as unrelated endoscopies or
other surgical procedures (indicator of ‘2’ (Standard payment adjustment rules for multiple procedures)):
Procedure Performed
Rules Applied
Two unrelated endoscopies (e.g., CPT code Apply the usual multiple surgery rules.
46606 and 43217)
Two sets of unrelated endoscopies (e.g.,
43202 and 43217; 46606 and 46608)
1. Apply the special endoscopy rules
to each series, then
2. Apply the multiple surgery rules.
(Consider the total payment for each set of
endoscopies as one service)
Two unrelated endoscopies and a third,
unrelated procedure
Two related endoscopies and a third,
unrelated procedure
Apply the multiple surgery rules.
1. Apply the special endoscopic rules
to the related endoscopies, then
2. Apply the multiple surgery rules.
(Consider the total payment for the
related endoscopies as one service
and the unrelated endoscopy as
another service.)
You can review the multiple surgery and special endoscopic pricing rules in the Medicare Claims Processing
Manual (Chapter 12 (Physicians/Nonphysician Practitioners), Section 40.6 (Claims for Multiple Surgeries)); see
https://www.cms.gov/manuals/downloads/clm104c12.pdf on the CMS website). In addition, Chapter 12, Section
40.6.D addresses rare situations where the above payment rules may be bypassed using modifier 22 (Increased
Procedural Services). Providers should be aware that CAH claims billed with CPT modifier 22 may be subject to
medical review.
Additional Billing Clarification for Positron Emission Tomography (PET)
Positron Emission Tomography (PET) is a minimally invasive diagnostic imaging procedure used to
evaluate metabolism in normal tissues and diseased tissues in conditions such as cancer, ischemic heart
disease and some neurologic disorders.
Coverage Guidelines
The Centers for Medicare & Medicaid Services (CMS) coverage policies for PET indications are
determined at a national level. On April 3, 2009, the CMS expanded coverage for initial diagnostic
testing with PET in a National Coverage Determination (NCD) policy so that all Medicare beneficiaries
with certain cancers will be able to receive Medicare coverage for at least one PET scan as prescribed by
their physicians. The CMS PET coverage is documented in the Medicare National Coverage
Determinations Manual 100-03, Chapter 1, Part 4, section 220.6 (PDF, 1.04 MB).
Section 220.6 lists all Medicare-covered uses of PET scans except the area in cancer indications listed as
'Coverage with Evidence Development,' a particular use of PET scans that is not covered unless
otherwise noted in this manual. Although Section 220.6 lists some non-covered uses of PET scans, it
does not provide an exhaustive list of all non-covered uses.
Billing instructions
Complete billing instructions are available in the Medicare Claims Processing Manual 100-04, Chapter 13
- Radiology Services and Other Diagnostic Procedures, section 60 - Positron Emission Tomography (PET)
Scans (PDF, 368 KB).
Claims reporting PET scans are edited for appropriate CMS billing and coverage requirements. Palmetto
GBA assigns PET scans the Fiscal Intermediary Shared System (FISS) reason code series 7PET1 through
7PET9 for claim processing purposes.
The following CPT codes are applicable for all cancer categories:
CPT
Code
Descriptor
78811
PET imaging, limited area (e.g. chest, head/neck)
78812
Skull base to mid-thigh
78813
Whole body
78814
PET with concurrently acquired computed tomography (CT) for attenuation correction and
anatomical localization imaging; limited area (e.g. chest, head/neck)
78815
Skull base to mid-thigh
78816
Whole body
Please note: When reporting 'V' diagnosis codes on a claim, a primary diagnosis is required. Additional
information for cancer diagnoses should be reported in the remarks field. The following chart may be
used to determine if special instructions apply when submitting a PET claim.
Site
Special Instructions
Reference
Colorectal
V code must be billed with a primary diagnosis
National Coverage
Determinations (NCD)
Manual 100-03, Chapter
1, Part 4, section 220.6.4,
220.6.17
Esophagus
V code must be billed with a primary diagnosis
NCD Manual 100-03,
Chapter 1, Part 4, section
220.6.3, 220.6.17
Head and Neck Not Central
V code must be billed with a primary diagnosis
Nervous System or
Thyroid Cancers
NCD Manual 100-03,
Chapter 1, Part 4, section
220.6.7, 220.6.17
Lymphoma
NCD Manual 100-03,
Chapter 1, Part 4, section
220.6.5, 220.6.17
Non-Small Cell
Lung
V code must be billed with a primary diagnosis
V code must be billed with a primary diagnosis
NCD Manual 100-03,
Chapter 1, Part 4, section
220.6.2, 220.6.17
CMS IOM, 100-04,
Chapter 13, §60.7
V code must be billed with a primary diagnosis
NCD Manual 100-03,
Chapter 1, Part 4, section
220.6.14, 220.6.17
Myeloma
N/A
NCD Manual 100-3,
Chapter 1, Part 4, section
220.6.17
Brain
V code must be billed with a primary diagnosis
NCD Manual 100-3,
Chapter 1, Part 4, section
220.6.14, 220.6.17
Cervical
Nationally non-covered FDG for the initial diagnosis of
cervical cancer r/t initial treatment strategy. All other
indications for initial treatment strategy for cervical
cancer are nationally covered.
Ovarian
NCD Manual 100-03,
Chapter 1, Part 4, section
220.6.14, 220.6.17-2d,e,4
CMS IOM, 100-04,
Effective for claims with dates of service on or after
Chapter 13, §60.13,
November 10, 2009, contractors shall accept FDG PET
§60.17
oncologic claims billed to inform initial treatment
strategy; specifically for staging in beneficiaries who
have biopsy-proven cervical cancer when the
beneficiary’s treating physician determines the FDG PET
study is needed to determine the location and/or extent
of the tumor as specified in NCD Manual 100-03, section
220.6.17.
V code must be billed with a primary diagnosis.
Only covered with Coverage Evidence Development
(CED) for subsequent treatment.
Small Cell Lung
V code must be billed with a primary diagnosis.
Additional information should be included in the
Remarks field that the primary diagnosis is ‘small cell
lung cancer.’
NCD Manual 100-03,
Chapter 1, Part 4, section
220.6.14, 220.6.17
Soft Tissue
Sarcoma
V code must be billed with a primary diagnosis
NCD Manual 100-03,
Chapter 1, Part 4, section
220.6.12, 220.6.17
Pancreatic
N/A
NCD Manual 100-03,
Chapter 1, Part 4, section
220.6.14, 220.6.17
V code must be billed with a primary diagnosis
NCD Manual 100-3,
Chapter 1, Part 4, section
220.6.14, 220.6.17
Testicular
Nationally non-covered for initial diagnosis and initial
staging (196.3, 196.8) of Axillary Nodes.
Breast
Female/Male
Cover FDG PET for the initial treatment of male and
female breast cancer only when used in staging distant
metastasis.
V code must be billed with a primary diagnosis.
Add information to indicate subsequent in Remarks
field.
Melanoma
Nationally non-covered for the evaluation and initial
staging of regional lymph nodes.
NCD Manual 100-03,
Chapter 1, Part 4, section
220.6.10, 220.6.17 2b, 4
CMS IOM, 100-04,
Chapter 13, §60.8
NCD Manual 100-03,
Chapter 1, Part 4, section
All other indications for initial treatment strategy are
nationally covered.
V code must be billed with a primary diagnosis.
Prostate
FDG (A9552) PET is nationally non-covered for initial
anti-tumor treatment strategy for patients with
Adenocarcinoma of the prostate.
220.6.6 and 220.6.17 2c,
4
CMS IOM, 100-04,
Chapter 13, §60.7
NCD Manual 100-03,
Chapter 1, Part 4, section
220.6, 220.6.17 2a
V code must be billed with primary diagnosis.
Nationally covered for subsequent treatment strategy of
recurrent or residual thyroid cancer of follicular cell
origin previously treated by thyroidectomy and
radioiodine ablation and have a serum thyroglobulin >
10ng/ml and have a negative I-131 whole body scan.
Thyroid
All other indications for subsequent treatment for
thyroid cancer are nationally covered under CED.
Add information to indicate previous treatment
(thyroidectomy and radioiodine ablation), serum
thyroglobulin level and negative I-131 whole body scan
in the Remarks field.
NCD Manual 100-03,
Chapter 1, Part 4, section
220.6.11 and 220.6.17, 4
CMS IOM, 100-04,
Chapter 13, §60.10
V code must be billed with primary diagnosis.
All other Cancers
Not Listed
N/A
NCD Manual 100-03,
Chapter 1, Part 4, section
220.6, 220.6.17
All other Solid
Tumors Not
Listed
N/A
NCD Manual 100-03,
Chapter 1, Part 4, section
220.6, 220.6.17
Influenza Vaccine Payment Allowances: Annual Update for 2011-2012 Season
MLN Matters® Number: MM7575
Related Change Request (CR) #: 7575
Related CR Release Date: October 27, 2011
Effective Date: September 1, 2011
Related CR Transmittal #: R2329CP
Implementation Date: January 27, 2012
Provider Types Affected
This article is for physicians and providers submitting claims to Medicare contractors (carriers, Fiscal
Intermediaries (FIs), and/or Part A/B Medicare Administrative Contractors (A/B MACs)) for influenza vaccines
provided to Medicare beneficiaries.
Provider Action Needed
The Centers for Medicare & Medicaid Services (CMS) issued Change Request (CR) 7575 in order to update
payment allowances, effective September 1, 2011, for influenza vaccines when payment is based on 95 percent of
the Average Wholesale Price (AWP). Be sure your billing staffs are aware of this update.
Background
CR7575 provides the payment allowances for the following seasonal influenza virus vaccines: Current Procedural
Terminology (CPT) codes 90654, 90655, 90656, 90657, 90660, and 90662 and Healthcare Common Procedure
Coding System (HCPCS) codes Q2035, Q2036, Q2037, Q2038, and Q2039 when payment is based on 95 percent of
the AWP. The payment allowances for influenza vaccines are updated on an annual basis effective September 1 of
each year.
Effective for dates of service on or after September 1, 2011, (except payment is based on reasonable cost where the
vaccine is furnished in a hospital outpatient department, a Rural Health Clinic, or a Federally qualified health
center), the Medicare Part B payment allowance for:







CPT 90655 is $15.705;
CPT 90656 is $12.375;
CPT 90657 is $6.653;
HCPCS Q2035 (Afluria®) is $11.543;
HCPCS Q2036 (Flulaval®) is $8.784
HCPCS Q2037 (Fluvirin®) is $13.652; and
HCPCS Q2038 (Fluzone®) is $13.306
Note: The Medicare Part B payment allowance for HCPCS Q2039 (Flu Vaccine Adult - Not Otherwise Classified)
will be determined by your local Medicare contractor.
Hospital routine services under arrangement requirement
On August 18, 2011, the Centers for Medicare & Medicaid Services (CMS) issued the fiscal year (FY) 2012
inpatient prospective payment system (IPPS) final rule. The final rule included a provision limiting the
circumstances under which a hospital may furnish services “under arrangement.” Under the revised policy, only
therapeutic and diagnostic services may be furnished outside of the hospital under arrangement; “routine
services” (for example, bed, board, and nursing services) must be provided by the hospital. Under the policy,
routine services that are furnished in the hospital to its inpatients are considered as being provided by the
hospital. If services are provided outside of the hospital, the services are considered as being provided under
arrangement.
CMS recognizes that hospitals may need more time to restructure existing arrangements and establish
operational protocols necessary to comply with the requirement that only therapeutic and diagnostic services
may be furnished outside of the hospital under arrangement and that “routine services” must be provided by the
hospital. CMS expects that during FY 2012, hospitals will work towards ensuring compliance with the new
requirements. CMS will continue to work with these hospitals to communicate the requirements of this provision
and to provide continued guidance. Beginning with the FY 2013, all hospitals will need to be in full compliance
with the modified under arrangement provisions.
CMS adopts policy and payment changes for outpatient care in
hospitals and ambulatory surgical centers
The Centers for Medicare & Medicaid Services (CMS) issued a final rule with comment period (final rule) that
will update payment policies and payment rates for services furnished to Medicare beneficiaries in hospital
outpatient departments (HOPDs) and ambulatory surgical centers (ASCs) beginning January 1, 2012. In
addition to establishing payment rates for calendar year (CY) 2012, the final rule expands the measures to be
reported under the hospital outpatient quality reporting program, creates a new quality reporting program for
ASCs, and strengthens the hospital value-based purchasing (hospital VBP) program that will affect payments
to hospitals for inpatient stays beginning Oct. 1 2012.
CMS projects that total payments to more than 4,000 hospitals -- which includes general acute care hospitals,
inpatient rehabilitation facilities, inpatient psychiatric facilities, long-term acute care hospitals, children’s
hospitals, and cancer hospitals -- paid under the outpatient prospective payment system (OPPS) in CY 2012
will be approximately $41.1 billion. CMS also projects that payments to approximately 5,000 Medicareparticipating ASCs paid under the ASC payment system will be approximately $3.5 billion for CY 2012.
“The CMS is committed to the goal of improving the quality and safety of care in all settings for all patients,”
said CMS Administrator Donald M. Berwick, M.D. “Using the tools made available under the Affordable Care
Act, CMS is moving aggressively to reform the payment and health care delivery systems to provide better care
at lower costs through improvement.”
The final rule also establishes an electronic reporting pilot that will allow additional hospitals, including critical
access hospitals (CAHs), to report clinical quality measures in CY 2012 for purposes of participating in the
Medicare electronic health record incentive program.
Provisions affecting payments to hospital outpatient departments
The final rule will increase payment rates under the OPPS by 1.9 percent in CY 2012. This increase is based
on the projected hospital inpatient market basket percentage increase of 3.0 percent for inpatient services paid
under the hospital inpatient prospective payment system (IPPS) minus the multifactor productivity adjustment
of 1.0 percentage points and minus a 0.1 percentage point adjustment, both of which are required by the
Affordable Care Act.
The final rule also provides a payment adjustment for designated cancer hospitals as required by the
Affordable Care Act. This payment adjustment is expected to increase payments to cancer hospitals by 11.3
percent (or approximately $71 million) over what they would have otherwise been paid.
In response to concerns that Medicare’s requirement for direct physician supervision of outpatient hospital
therapeutic services could hinder access for beneficiaries specifically in rural areas, the final rule establishes an
independent advisory review process to consider requests that specific outpatient services be subject to a level
of supervision other than direct supervision. Under this process, CMS will seek recommendations from
Ambulatory Payment Classification (APC) Advisory Panel about appropriate supervision requirements. This
panel was created to provide technical advice and recommendations to CMS about assigning items and
services furnished in hospital outpatient departments to appropriate payment classifications. CMS will add two
small rural PPS hospital members and two CAH members to represent their interests to the panel so that all
hospitals subject to the supervision rules for payment of outpatient therapeutic services will be represented.
Since CAHs are not paid under the OPPS, CAH representatives would not participate in deliberations about
APC assignments.
“The CMS is committed to ensuring that beneficiaries who are treated in small rural hospitals have access to
high quality, safe therapeutic services in outpatient departments,” said Jonathan Blum, deputy administrator
and director for CMS’s Center for Medicare. “We believe the process we have adopted will provide meaningful
and transparent input from stakeholders to assist CMS in establishing appropriate supervision requirements.”
In other provisions, the final rule will:
• Pay for the acquisition and pharmacy overhead costs of separately payable drugs and biologicals, other than
new drugs and biologicals that have pass-through status, at the average sales price (ASP) plus 4 percent.
• Pay for partial hospitalization (PHP) services in hospital-based PHPs and community mental health centers
(CMHCs) based on the unique cost-structures of each type of program. For both types of providers, CMS is
proposing to finalize our proposal to update the four PHP per diem payment rates based on the median costs
calculated using the most recent claims data for each provider type.
• Increase the number of measures for reporting in CY 2012 and CY 2013 for purposes of the CY 2014 and CY
2015 payment determinations, and would modify the process for selecting hospitals for validating reported
chart-abstracted measures that was adopted for CY 2012 in the CY 2011 OPPS rule.
Provisions affecting payments to ambulatory surgical centers
The final rule increases payment rates to ASCs by 1.6 percent in CY 2012. This reflects a consumer price
index for all urban consumers estimated at 2.7 percent, minus a 1.1 percent productivity adjustment required by
the Affordable Care Act.
The final rule also establishes a quality reporting program for ASCs and adopts five quality measures, including
four outcome measures and one surgical infection control measure beginning in CY 2012 for the CY 2014
payment determination. The final rule adds two structural measures for reporting beginning in CY 2013 for the
CY 2015 and CY 2016 payment determinations -- one for safe surgery checklist use, and one for ASC facility
volume data on selected ASC surgical procedures.
Provisions affecting the hospital value-based purchasing program
The hospital VBP, which was required by section 3001(a) of the Affordable Care Act, was initially established in
a final rule published in May 2011. The final rule contained the measures, performance standards, and scoring
methodology that would be used to determine the value-based incentive payments to hospitals in FY 2013. The
final rule announced today addresses the program requirements for the FY 2014 program. These changes
include: adding one clinical process measure to guard against infections due to urinary catheters; and,
establishing the weighting, performance periods, and performance standards for the clinical process, patient
experience, and outcomes measures for FY 2014.
The final rule with comment period for the OPPS and the ASC payment system can be downloaded from:
http://www.ofr.gov/inspection.aspx
.
It will appear in the November 30, 2011, Federal Register. CMS will accept comments on issues open for
comment by January, 3, 2012, and will respond to them in the CY 2013 rule.
The addenda to the final rule for the OPPS are available at: http://www.cms.gov/HospitalOutpatientPPS .
The addenda to the final rule for the ASC payment system are available at: http://www.cms.gov/ASCpayment/
.
A CMS fact sheet (November 1, 2011) providing more details on the final rule can be found at:
http://www.cms.gov/apps/media/press/factsheet.asp?Counter=4145
.
Skilled nursing facility claims hold
The Centers for Medicare & Medicaid Services (CMS) has identified a claim processing problem impacting
skilled nursing facility (SNF) type of bills 18x and 21x containing Healthcare Common Procedure Coding
System (HCPCS) code AAAxx and revenue code 0022. CMS is holding these claims. As soon as a system fix
is in place and successfully tested, these claims will be released for processing. CMS appreciates your
patience and apologize for any inconvenience this may cause.
What does attestation for the EHR incentive programs entail?
Over 114,000 eligible professionals and hospitals have registered for the Medicare and Medicaid electronic
health record (EHR) incentive programs. As more hospitals move towards meeting meaningful use and
attesting, the Centers for Medicare & Medicaid Services (CMS) wants to make sure everyone understands
what attestation entails.
In order to attest, successfully demonstrate meaningful use, and receive an incentive payment under the
Medicare EHR incentive program, eligible hospitals must indicate that they agree with several attestation
statements.
Eligible hospitals must agree that the information submitted:
• Is accurate to the knowledge and belief of the hospital or the person submitting on behalf of the hospital
• Is accurate and complete for numerators, denominators, exclusions, and measures applicable to the hospital
• Includes information on all patients to whom the measure applies.
• For clinical quality measures (CQMs), was generated as output from an identified certified EHR technology
By agreeing to the above statements, the hospital is attesting to providing all of the information necessary from
certified EHR technology, uncertified EHR technology, and/or paper-based records in order to render complete
and accurate information for all meaningful use core and menu set measures except CQMs.
Attesting to CQM data's validity
CMS considers information to be accurate and complete for CQMs to the extent that it is identical to the output
that was generated from certified EHR technology. In other words, the hospital is only attesting that what was
put in the attestation module is identical to the output generated by its certified EHR technology. Therefore, the
numerator, denominator, and exclusion information for CQMs must be reported directly from information
generated by certified EHR technology.
CMS, through meaningful use, does not require any data validation. Eligible hospitals are not required to
provide any additional information beyond what is generated from certified EHR technology in order to satisfy
the requirement for submitting CQM information, even if the reported values include zeros. If a hospital has
concerns about the accuracy of its output, the hospital can still attest but should work with its vendor and/or the
Office of the National Coordinator for Health Information Technology
to improve the accuracy of the individual
product and/or the level of accuracy guaranteed by certification.
CMS recommends that hospitals print out or save an electronic copy of the CQM report used at attestation from
their certified EHR. The eligible hospital should retain this copy for its records so that the hospital can show its
numbers in the event of an audit. Upon audit, this documentation will be used to validate that the hospital
accurately attested and submitted CQMs.
For more information about the Medicare and Medicaid EHR incentive programs, please visit the CMS EHR
website
. Also, see the frequently asked questions page for answers on various topic areas of the programs.
------------------------------------------------------------
Medicare Changes to the 3-Day Payment Window Rule Impact Physician Billing in
2012
On November 1, 2011, the Centers for Medicare and Medicaid Services (CMS) issued its Calendar Year
(CY) 2012 Medicare Physician Fee Schedule Final Rule (Final Rule) finalizing proposed changes that
impact physician billing for services subject to a billing policy commonly known as the 3-Day Payment
Window Rule (or 1-Day Payment Window Rule for certain non-IPPS hospitals). Earlier this year, in the
Fiscal Year 2012 Inpatient Prospective Payment System (IPPS) Final Rule, CMS expanded the outpatient
services that are subject to the 3-Day/1-Day Payment Window Rule (Payment Window Rule). These
changes were further discussed under proposed changes to the CY 2012 Medicare Physician Fee
Schedule (MPFS). (See Hall Render's Health Law News article dated August 8, 2011:
http://www.hallrender.com/library/articles/887/080811HLN.html).
Importantly, the effective date of the Final Rule is delayed until July 1, 2012. The delay is to allow
hospitals and wholly owned or wholly operated entities more time to coordinate efforts in ensuring proper
billing.
Under the Payment Window Rule, all diagnostic services furnished to a Medicare beneficiary by a
hospital (or entity wholly owned or wholly operated by the hospital) on the date of the beneficiary's
inpatient admission, or during the 3 calendar days immediately preceding the date of the beneficiary's
admission (1 day for certain non-IPPS hospitals, the "Payment Window"), must be billed by the hospital
and included on the hospital's Part A claim for the inpatient stay. As further explained below, the most
recent changes to the Payment Window Rule expand its application to non-diagnostic services. CMS
stated that all "clinically related" outpatient non-diagnostic services (except for ambulance and chronic
maintenance of renal dialysis services) provided by the hospital (or an entity wholly owned or wholly
operated by the hospital) within the Payment Window must also be billed on the hospital's Part A claim for
the inpatient stay. Any "unrelated" outpatient non-diagnostic services provided within the Payment
Window may be billed separately, but there must be documentation in the medical record to support that
the non-diagnostic services were not related. Previously, CMS's policy was that non-diagnostic services
were included in the Payment Window only if there was an exact match in principal diagnosis codes.
Whenever a physician furnishes services in a hospital, including an outpatient department of a hospital,
Medicare pays the physician under the MPFS at a facility-based payment rate that is lower than the "nonfacility" payment rate in order to avoid duplication of payment for supplies, equipment and staff that are
paid directly to the hospital by Medicare. Therefore, when physicians provide services during the
Payment Window in a wholly owned or wholly operated entity, physicians should receive payment at the
facility rate for related non-diagnostic services and receive payment for only the professional component
of diagnostic services.
Billing Changes: New Payment Modifier
Beginning on January 1, 2012, new payment modifier "PD" will be available to wholly owned or wholly
operated entities to identify a "diagnostic or related non-diagnostic item or service provided in a wholly
owned or wholly operated entity to a patient who is admitted as an inpatient within 3 days, or 1 day."
Even though compliance with the Final Rule is delayed until July 1, 2012, entities should begin using
modifier PD on applicable claims as soon as possible. The PD modifier will signal claims processing to
provide payment for the professional component only of CPT/HCPCS codes with a professional
component and technical component (PC/TC) split and at the facility rate for non-diagnostic services
when the services are provided within the Payment Window.
Hospitals are required to include the technical component portion of all diagnostic and clinically-related
non-diagnostic services furnished by wholly owned or wholly operated entities during the Payment
Window on their cost reports. Hospitals are advised to "accumulate the costs incurred and the
adjustments required for these services and report as costs with related organizations on the Medicare
cost report." This step may prove challenging for hospitals and will require planning to ensure that the
appropriate costs are reported.
Further, the Payment Window may also overlap with a global surgical period that varies depending on the
type of surgical procedure. If the surgical procedure occurs during the Payment Window, the Payment
Window Rule applies and the wholly owned or wholly operated physician practice will bill for preadmission
diagnostic and clinically-related non-diagnostic services with the new HCPCS modifier. If the surgical
procedure occurs before the Payment Window, the Payment Window Rule does not apply. However, any
service billed separately from the global surgical package will be subject to the Payment Window Rule.
Applicability of Payment Window to Physician Services Furnished in Wholly Owned or Wholly
Operated Entities
If a physician practice is wholly owned or wholly operated by a hospital, that physician practice is subject
to the Payment Window Rule and therefore impacted by these changes. But, CMS clarified that these
changes also apply to entities besides physician practices. CMS is amending 42 C.F.R.
§414.22(b)(5)(1)(A), which defines facility practice expense RVUs, to use the term "entity" instead of
"physician practice" as was proposed. More fully, the regulation will state "the facility PE RVUs apply to
services furnished to patients in places of service including, but not limited to, a hospital, a skilled nursing
facility, a community mental health center, a hospice, or an ambulatory surgical center, or in a wholly
owned or wholly operated entity furnishing preadmission services...." This decision was made to make
the definition more broad and to eliminate any ambiguity that the statutory authority for the billing policy
applies solely to physician offices or clinics. Therefore, hospitals need to review each wholly owned and
wholly operated entity to determine the extent to which the Payment Window Rule applies to each type of
entity.
Even though they would be considered "entities" under the Payment Window Rule, CMS stated it is not
applying the Payment Window policy to rural health clinics (RHCs) and federally qualified health centers
(FQHCs). Medicare pays RHCs and FQHCs through an all-inclusive rate and it would be difficult to
distinguish within the all-inclusive rate the amount of the payment that represents the professional portion
versus the technical portion. Since the Payment Window Rule requires the hospital to include in its
inpatient bill the technical portion of any outpatient diagnostic service and admission-related nondiagnostic service, the Payment Window Rule cannot practically be applied to RHCs and FQHCs. The
Payment Window Rule could apply in the future if RHCs and FQHCs transition from an all-inclusive rate
to a prospective or other payment system that would allow a distinction between professional and
technical charges. However, if practitioners furnish additional services to beneficiaries during the visit,
services that are not considered RHC/FQHC services, those additional services payable under Medicare
Part B are subject to the Payment Window Rule.
CMS reiterated its refusal to identify all non-diagnostic services that should be considered "clinically
related." CMS reasoned that the determination of whether services are "clinically related" requires
knowledge of specific clinical circumstances involved in a patient's inpatient admission and should be
determined on a case-by-case basis.
Identification of Wholly Owned or Wholly Operated Entities
The longstanding definitions of "wholly owned" and "wholly operated" have not changed. If the hospital is
the sole owner of the entity or the sole operator of the entity (i.e., if the hospital has exclusive
responsibility for conducting and overseeing the entity's routine operations, regardless of whether the
hospital also has policymaking authority over the entity), then services provided by the entity are subject
to the Payment Window. With the Payment Window Rule expansion however, CMS is evaluating ways to
determine which entities are wholly owned or wholly operated by a hospital.
Hospitals face the challenge of identifying the services provided by their wholly owned and wholly
operated entities that are subject to the Payment Window Rule and putting processes in place to ensure
proper billing of both the facility claim and the claim for professional services. For example, if the services
are billed on different billing systems, it may be difficult to identify the applicable services. Use of the
"PD" modifier is new and will require education of billing staff submitting professional claims. The hospital
must confirm that appropriate documentation is in the medical record when the claims are billed as
unrelated. Finally, hospitals and their entities will need to communicate to ensure that patients who may
have received preadmission services are identified at the time of the inpatient admission.