ZEPHYRLIFE REMOTE PATIENT MONITORING REIMBURSEMENT REFERENCE GUIDE

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1 ZEPHYRLIFE REMOTE PATIENT MONITORING REIMBURSEMENT REFERENCE GUIDE Overview This guide includes an overview of Medicare reimbursement methodologies and potential coding options for the use of select remote monitoring technologies and services and related CY 2016 Medicare payment rates. While Medicare does not make separate payment for the ZephyrLIFE system, reimbursement opportunities may exist under certain Medicaid programs and commercial payer policies. Providers should consult with appropriate payer contacts to ensure alignment on coverage, coding and payment expectations for the utilization of and/or physician services provided in association with use of the ZephyrLIFE system. ZephyLIFE is a sophisticated remote patient monitoring system that continuously transmits important patient information (i.e., respiration rate, heart rate, electrocardiograph (ECG), and positional and activity information) to monitoring stations and web-based portals. 1 Remote patient monitoring systems may be utilized to support coordination of care and care transitions for monitored patients. Currently available codes do not describe the totality of the remote monitoring capabilities nor all the physician services provided with use of the ZephyrLIFE system. However, coding may appropriately recognize components of the ZephyrLIFE remote monitoring system. For example, select codes may describe the physician s professional component, which includes a face-to-face physician/patient visit to discuss the review and interpretation of a service, while others reflect the technical components of connecting, recording and disconnecting the remote monitor. Physicians are not typically reimbursed for the technical components of the service, and any associated payment is made to the facility. In some cases, facilities may not be able to bill for these services separately and must assume related costs within their bundled payments such as Diagnosis Related Group (DRG) or per diem payment rates. Examples of potential codes and descriptions may be found within this guide. This guide does not describe reimbursement for telemedicine services. Remote monitoring services and procedures and associated reimbursement differ from that of telemedicine services because telemedicine requires two-way, real-time interactive communication between the patient and the physician or practitioner at the distant site.

2 Physician Payment Under the 2016 Medicare Physician Fee Schedule Final Rule, Medicare will pay for chronic care management (CCM). Some non-face-to-face time services (including remote monitor- ing) will count toward the monthly minimum time billing requirement for the new CCM CPT code (99490). Reimbursement Methodology: Typically, Medicare reimburses physicians for professional services separately from facility payments. Under the Medicare Physician Fee Schedule (MPFS), payments are usually made for each service rendered. Services are identified using the Healthcare Common Procedure Coding System (HCPCS) codes, including Current Procedural Terminology (CPT) codes. Payments are based on relative value units (RVUs) which account for the physician work (e.g., time, training, intensity and skill), practice expense (e.g., relative costliness of resources used) and malpractice expense associated with each code. Using the RVUs, Medicare determines a maximum payment, or Medicare allowable, that it will reimburse for physician services. Coding: Physician services are billed using CPT/HCPCS codes. CPT/HCPCS codes describe individual (or bundled) services performed by physicians. The table below identifies potential coding options for remote monitoring systems and CY 2016 payment rates. Any other CPT codes for remote patient monitoring (e.g., holter monitoring) are not appropriate to report for the use of the ZephyrLIFE system. Providers are responsible for the documentation and billing of patient encounters and are always encouraged to check individual payer policies for specific coding guidance. CPT/HCPCS CODES * Collection and interpretation of physiologic data (eg, ECG, blood pressure, glucose monitoring) digitally stored and/or transmitted by the patient and/or caregiver to the physician or other qualified health care professional, qualified by education, training, licensure/ regulation (when applicable) requiring a minimum of 30 minutes of time Chronic care management services, at least 20 minutes of clinical staff time directed by a physician or other qualified health care professional, per calendar month, with the following required elements: multiple (two or more) chronic conditions expected to last at least 12 months, or until the death of the patient; chronic conditions place the patient at significant risk of death, acute exacerbation/decompensation, or functional decline; comprehensive care plan established, implemented, revised or monitored. CY 2016 TOTAL NON-FACILITY PAYMENT N/A (not eligible for Medicare payment) CY 2016 TOTAL FACILITY PAYMENT $56.96 (not eligible for Medicare payment) $40.84 $31.52 *Per the CY 2016 MPFS final rule, beginning January 1, 2016, physicians may be reimbursed for a range of chronic care management services that occur outside of face-to-face encounters. However, the patient must participate in some face-to-face appointments with the provider who bills for this service. Additionally, to bill for chronic care management, physicians must meet very specific requirements, such as the creation of a patient-centered care plan and real-time access to patient electronic medical records. Depending on how this policy is finalized, it may provide an opportunity for physicians to capture time spent on patient management and care coordination outside of face-to-face encounters (e.g., reviewing results from remote monitoring). Medicare s final rule can be found at html?dlpage=1&dlentries=10&dlsort=2&dlsortdir=descending

3 Inpatient Hospital Due to the MS-DRG payment methodology (i.e., single bundled payment per stay), hospitals will not receive additional payment for use of remote monitoring systems. Reimbursement Methodology: Under the Inpatient Prospective Payment Systems (IPPS), Medicare uses Medicare Severity Diagnosis-Related Groups (MS- DRGs) to pay for all inpatient services rendered during a single inpatient stay. An MS-DRG is a clinically cohesive group of hospital services that require a similar amount of hospital resources and exhibit similar length-ofstay patterns. IPPS assigns every inpatient stay to one MS-DRG based on diagnoses, procedures and patient characteristics, resulting in a single hospital payment. Coding: Hospitals used the International Classification of Diseases, Ninth Revision, Clinical Modification (ICD-9-CM) procedure codes and diagnosis codes through September 30, 2015 to report inpatient services and patient characteristics. Effective October 1, 2015, inpatient hospitals began using ICD-10-PCS and ICD-10-CM codes to report their services. Not all codes directly influence DRG mapping/payment. The table below identifies coding options for specific diagnostic services. These codes do not drive DRG mapping but may warrant inclusion of the other codes as well. ICD-9-CM PROCEDURE CODE Other nonoperative respiratory measurements Ambulatory cardiac monitoring Electrocardiogram Electrographic monitoring Other nonoperative cardiac and vascular measurements ICD-10-CM PROCEDURE CODE 4A02XCZ 4A02XFZ 4A02X4Z 4A09XCZ 4A12XCZ 4A12XFZ 4A12X4Z 4A19XCZ Measurement of cardiac rate, external approach Measurement of cardiac rhythm, external approach Measurement of cardiac electrical activity, external approach Measurement of respiratory rate, external approach Monitoring of cardiac rate, external approach Monitoring of cardiac rhythm, external approach Monitoring of cardiac electrical activity, external approach Monitoring of respiratory rate, external approach Note: Physicians use Current Procedural Terminology (CPT) codes to report all services in all settings of care, including the inpatient hospital setting. See Physician Payment section for relevant coding and payment information.

4 Outpatient Hospital Reimbursement Methodology: The Medicare Outpatient Prospective Payment System (OPPS) classifies all outpatient services into clinically and cost-similar groups called Ambulatory Payment Classifications (APCs) for payment of services. CMS assigns CPT/HCPCS codes to APCs on the basis of clinical and cost similarity, and determines payment rates for each APC based on the mean costs of the services included in the APC. Depending on the services provided, an outpatient hospital may be paid for more than one APC for a patient encounter. Coding: OPPS uses CPT/HCPCS codes to identify services and map to APCs to determine payment. The CPT/HCPCS codes typically are the same codes billed by physicians for professional services, but are also used by Hospital Outpatient Departments (HOPDs) to capture the facility payment for services rendered. Physicians are reimbursed separately for services rendered in a HOPD. Currently available codes do not map to APCs for payment in the hospital outpatient setting. CODE Collection and interpretation of physiologic data (eg, ECG, blood pressure, glucose monitoring) digitally stored and/or transmitted by the patient and/or caregiver to the physician or other qualified health care professional, qualified by education, training, licensure/regulation (when applicable) requiring a minimum of 30 minutes of time Chronic care management services, at least 20 minutes of clinical staff time directed by a physician or other qualified health care professional, per calendar month, with the following required elements: multiple (two or more) chronic conditions expected to last at least 12 months, or until the death of the patient; chronic conditions place the patient at significant risk of death, acute exacerbation/ decompensation, or functional decline; comprehensive care plan established, implemented, revised or monitored. STATUS INDICATOR APC REL WEIGHT 2016 MEDICARE NATIONAL AVG PMT N N/A N/A N/A V *Status Indicators: N = Payment is packaged into payment for other services. Therefore, there is no separate APC payment. V = Clinic or Emergency Department Visit. Paid under OPPS; separate APC payment. Long-Term Care Hospital Due to the MS-LTC-DRG payment methodology (i.e., single bundled payment per stay), hospitals will not receive additional payment for use of remote monitoring systems. Reimbursement Methodology: Under the long-term care hospital (LTCH) prospective payment system (PPS), Medicare reimburses facilities with per-dis- charge payment rates for different case-mix groups called Medicare Severity Long-Term Care Diagnosis-Related groups (MS-LTC-DRGs). Patients are assigned to MS-LTC-DRGs based on diagnosis, procedures, age, sex and discharge status. MS-LTC-DRG payment rates are based on the expected relative cost of treatment for patients in the group. 2 Similar to the IPPS, LTCH stays are assigned to one MS-LTC-DRG, resulting in a single LTCH payment per case. Coding: Like acute-care hospitals, LTCHs will use ICD-9-CM procedure codes through September 30, 2015 to report services. Beginning October 1, 2015, inpatient hospitals will begin to use the ICD-10-PCS coding system to report their services (See Inpatient Hospital Coding section above for possible remote monitoring codes).

5 Skilled Nursing Facility Due to the Medicare SNF per diem payment methodology (i.e., single RUG payment per day), SNFs will not receive additional payment for use of remote monitoring systems. Reimbursement Methodology: Medicare bases reimbursement for services in the skilled nursing facility (SNF) on a per diem payment. The per diem encompasses nursing care, therapy services, housing costs and drugs. There is not separate payment for remote monitoring systems in the SNF setting. Each day of patient care is assigned to one of 66 Resource Utilization Groups (RUGs) based on patient characteristics and expected resource use, and each RUG has associated nursing and therapy weights that are applied to the base daily payment rate. 3 The daily rate differs for urban and rural facilities, and represents the sum of the nursing, therapy and non-case mix (e.g., room, board, administrative services) resource costs. The final FY 2016 unadjusted federal rate per diem is $ for urban facilities and $ for rural facilities. 4 Coding: Coding for specific services (e.g., remote monitoring) will not impact the SNF per diem payment. Hospice Medicare s daily rate for hospice care reflects expected resource use for beneficiaries and does not enable separate payment for remote monitoring. Reimbursement Methodology: Similar to the SNF per diem payment methodology, Medicare pays hospice agencies a daily rate for each day a beneficiary is enrolled in the hospice benefit. The daily payment rate is intended to cover hospice costs for an array of services, including: skilled nursing services; drugs and biologicals for pain control and symptom management; physical, occupational and speech therapy; counseling; home health services; short-term inpatient care; inpatient respite care and other services including remote patient monitoring technologies and services necessary for the palliation and management of the terminal illness and related conditions. Medicare payment for hospice care is made at one of four predetermined rates for each day that a Medicare beneficiary is under the care of the hospice, with rates varying daily depending on the level of care furnished to the beneficiary. The four categories of care are routine home care (RHC), continuous home care (CHC), inpatient respite care (IRC) and general inpatient care (GIC). 5 CATEGORY OF CARE FY 2016 BASE PAYMENT RATE 6 RHC Home care provided on a typical day CHC Home care provided during periods of patient crisis (Hourly rate of x 24 hours of care) IRC GIC Inpatient care for a short period to provide respite for primary caregiver Inpatient care to treat symptoms that cannot be managed in another setting Coding: Since Medicare reimburses hospice providers at a daily rate, coding for specific services (e.g., remote monitoring) will not impact reimbursement. 7 Home Health Though remote monitoring may prove to be a valuable component of chronic care management in the home setting, the current HH PPS episode-based payment methodology does not permit separate payment for remote patient monitoring devices. Reimbursement Methodology: The home health prospective payment system (HH PPS) reimburses home health agencies with a single payment per 60-day episode of care (with a minimum of five visits per episode). Each episode is assigned to one of 153 home health resource groups (HHRGs) based on clinical and functional status and service use as measured by the Outcome and Assessment Information Set (OASIS). The base fee per 60-day episode in 2016 is $2,938. If there are fewer than five total home health visits in an episode, the episode payment is substituted by a fixed payment per visit based on historic per-visit costs by discipline. 8 Coding: Under Medicare, coding for specific services (e.g., remote monitoring) in the home health setting does not impact reimbursement. The HHRG and corresponding payment for each beneficiary is determined by the clinical, functional, and service information.

6 Other Payers This reimbursement guide is specific to Medicare reimbursement. As noted above, since coverage, coding requirements, and payment vary significantly by payer, providers should consult with appropriate payer contacts to ensure alignment on coverage, coding, and payment expectations for the ZephyrLIFE system. Providers should check with non-medicare payers to determine coverage, coding and payment recommendations for the comprehensive ZephyrLIFE platform and/or components of the technology. REFERENCES 1. ZephyrLIFE website All Medicare Physician Fee Schedules calculated using CF $ effective January 1, December 31, The new CF is reflected in the January PFS update available at: CMS-1631-FC.html?DLPage=1&DLEntries=10&DLSort=2&DLSortDir=descending 3. Hospital ICD-9-CM 2015, Volumes 1, 2, & 3. American Medical Association, Chicago, IL ICD-10-PCS American Medical Association, Chicago, IL OPPS and ASC Final Rule, Federal Register (80 Fed Reg, No. 219) November 13, 2016, 42 CFR Parts 405, 410 and 412 et al. Correction Notice CMS-1633-CN. 6. IPPS for Acute Care Hospitals and the Long-Term Care Hospital Final Rule, Federal Register (80 Fed Reg, No. 158) August 17, 2016, 42 CFR Part 412, et al. 7. Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities for FY 2016; Final Rule, Federal Register (79 Fed Reg No 45628) August 4, CFR Part FY 2016 Wage Index and Payment Rate Update and Hospice Quality Reporting Requirements; Final Rule, Federal Register (80 Fed Reg, No. 151) August 6, 2015, 42 CFR Part Home Health Prospective Payment System Rate Update, Final Rule Correction. Federal Register (80 Fed Reg No 214) November 5, CFR Parts 409, 424, and 484) DISCLAIMER: This reimbursement guide should be used as a provider reference to inform potential coding and payment scenarios for the ZephyrLIFE remote monitoring technology. As such, this document offers no guarantee of coverage, appropriate coding or payment amount, which vary significantly by payer. Providers should consult with appropriate payer contacts to ensure alignment on coverage, coding and payment expectations for the ZephyrLIFE system. Coding decisions should be based upon all applicable coding guidance, medical necessity, and procedures and supplies provided to the patient. Information provided in this guide is for educational purposes and does not ensure coverage or reimbursement of the specific item or service in a given case. If you have questions or would like additional information, please call our toll-free reimbursement hotline at or contact us at Medtronic, Medtronic with logo, Medtronic logo and Further, Together are U.S. and internationally registered trademarks of Medtronic Medtronic Medtronic 6135 Gunbarrel Avenue Boulder, CO USA Tel: medtronic.com Rev. 2015/12

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