WARRANTY CREDITS GINGER MANWELL SR. DIRECTOR, INTERNAL AUDIT CLEVELAND CLINIC
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1 1 WARRANTY CREDITS GINGER MANWELL SR. DIRECTOR, INTERNAL AUDIT CLEVELAND CLINIC AHIA 32 nd Annual Conference August 25-28, 2013 Chicago, Illinois
2 Cleveland Clinic 2 1,300 bed hospital Nonprofit group practice Main Campus located in Cleveland l -east Over 5 million outpatient visits ,164 inpatient admissions 2012 Over 26,000 inpatient surgeries in ,900 outpatient surgeries in 2012
3 Industry Issues with Device Credits 3 Medtronic Inc. Entered into agreements to resolve lawsuits 10/15/07. Involved Sprint Fidelis Models: 6930, 6931, 6948, Settled U.S. lawsuits and claims pending as of October 15, Total payments $268 million. Action alerted OIG Boston District. 9 hospitals initially i i investigated. i
4 Industry Issues (continued) 4 Guidant LLC (Boston Scientific) $9.3 million to resolve FCA allegations. Inflated the cost of replacement pacemakers and defibrillators. Only involved federal health care programs. Knowingly failed to grant warranty credits/rebates. Explanted Devices.
5 Types of Credits 5 Credit: Money, goods or services provided in lieu of payment on what has already been paid. Rebate: Sales promotion paid by reducing the cost of goods or services.
6 Warranty Device Credits 6 Guarantee of the reliability of a product under normal use. Pacemakers 5-10 years Defibrillators 3-7 years Cardiac Leads years
7 Warranty Device Credits (continued) 7 Cochlear implants Internal 10 years; External major components 3 5 years Pain pumps Maximum of 7 years, battery 5 7 years Neurostimulators Depends on the individual, d battery 9 years Orthopedics, depending on the implant and/or the person at least 10 years
8 Inpatient Regulations for Credits 8 Transmittal 1509, CR 5860 issued 5/16/08 Condition Codes (18-28): 49 Product Replacement within Product Lifecycle - Replacement of a product earlier than the anticipated lifecycle. e. 50 Product Replacement for Known Recall of a Product - Manufacturer or FDA has identified the product for recall.
9 Inpatient Regulations (continued) 9 After October 1, 2008 Medicare required special billing: When a hospital receives a credit for a replaced device. Amount of credit in value code FD (39-41). Bill the no cost charge less than $1.01 Automatically deducted from the DRG payment.
10 Inpatient MS-DRGs Regs IPPS Replaced Devices Offered Without Cost or With a Credit Policy Learning-Network- MLN/MLNMattersArticles/downloads/MM7457.pdf or Guidance/Guidance/Transmittals/downloads/R922OTN.pdf / / /
11 Inpatient Device Table 11 Inpatient Examples MS-DRG Narrative Description of DRG 1 & 2 Heart Transplant or Implant of Heart Assist System with and without MCC 25 & 26 Craniotomy and Endovascular Intracranial Procedure with MCC or with CC 26 & 27 Craniotomy and Endovascular Intracranial Procedure with CC or without CC/MCC 40 & 41 Peripheral & Cranial Nerve & Other Nervous System Procedure with MCC; or with CC or Peripheral Neurostimulator 258 & 259 Cardiac Pacemaker Device Replacement With MCC, and Without MCC 226 & 227 Cardiac Defibrillator Implant without Cardiac Catheterization with MCC and without MCC 215 Other Heart Assist System Implant 222, 223, 224 & 225 Cardiac Defibrillator Implant with Cardiac Catheterization with Acute Myocardial Infarction/Heart Failure/Shock with MCC and without MCC 242, 243, & 244 Permanent Cardiac Pacemaker Implant with MCC, with CC, and without CC/MCC 461 & 462 Bilateral or Multiple Major Joint Procedures of Lower Extremity with MCC, or without MCC 469 & 470 Major Joint Replacement or Reattachment of Lower Extremity with MCC or without MCC 466, 467, & 468 Revision of Hip or Knee Replacement with MCC, with CC, or without CC/MCC
12 Outpatient Regulations for Credits 12 For services furnished after 1/1/08: Report HCPCS modifier FC on the procedure code. Device being implanted on the list of creditable devices. Procedure code used on the list of creditable APCs. Credit of 50 percent or more of the cost.
13 Outpatient Regulations (continued) 13 No cost/partial cost devices/implants: Report a no cost or full credit device by reporting the FB modifier. List of devices in Addendum OPPS. Bill the charge less the initial cost No cost devices bill less than $1.01.
14 Outpatient Regulations 14 Summary of outpatient changes: Guidance/Guidance/Transmittals/downloads/R1383CP.pdf Learning-Network- MLN/MLNMattersArticles/downloads/SE0732.pdf ti /d l d /SE0732 df Outpatient Device Table Outpatient Device Table Guidance/Guidance/Transmittals/Downloads/R2626CP.pdf
15 Outpatient Device Table Outpatient Examples CPT Code OPPS APC Title Final CY 2012 OPPS Full APC Offset Percentage Final CY 2012 OPPS Partial APC Offset Percentage 0283T Implantation of Cranial Neurostimulator Pulse Generator and Electrode 86% 43% Level II Arthroplasty or Implantation with Prosthesis 61% 31% Insertion/Replacement/Conversion of a Permanent Dual Chamber Pacemaker or Pacing Electrode 73% 37% Insertion/Replacement/Conversion of a Permanent Dual Chamber Pacemaker or Pacing Electrode 73% 37% Insertion/Replacement of Pacemaker Pulse Generator 73% 37% Level II Prosthetic Urological Procedures 71% 35% Level II Prosthetic Urological Procedures 71% 35% Level II Prosthetic Urological Procedures 71% 35% Implantation of Drug Infusion Device 81% 41% Implantation of Drug Infusion Device 81% 41% Level I Implantation/Revision/Replacement of Neurostimulator Electrodes 55% 28% Level II Implantation/Revision/Replacement of Neurostimulator Electrodes 64% 32% Level I Implantation of Neurostimulator Generator 86% 43% Level II Arthroplasty or Implantation with Prosthesis 61% 31% Level II Arthroplasty or Implantation with Prosthesis 61% 31% Level II Arthroplasty or Implantation with Prosthesis 61% 31% Level II Arthroplasty or Implantation with Prosthesis 61% 31% Level VII ENT Procedures 84% 42%
16 Cleveland Clinic Audit Findings claims Reviewed sample size of 1,641claims. 1,247 outpatient claims 397 inpatient claims Initial findings from the OIG had 27 claims Final report involved 24 claims. 10 inpatient with partial or full credits. 9 outpatient claims with full or partial credits missing modifiers. 5 outpatient claims didn t receive credit.
17 Cleveland Clinic Audit (continued) 17 4 of the 14 outpatient claims disagreed with the payment calculations. 3 claims identified as overpayments less than 50%. 3 claims with multiple devices CMS took back both device payments. Outlier payments & multiple devices beyond scope. Final report A hhs gov
18 18 Existing Process
19 19 Process Improvement
20 Process Improvement (continued) 20 Process begins with the Cardiac Pacing and Electrophysiology Lab Business Unit Packages device Creates charges Tracks credits from manufacturer Forwards credit to Accounts Payable (AP) AP matches credit w/original i invoice. i
21 Process Improvement (continued) 21 Billing Unit submits corrected claim Adds condition code 49 or 50 Value code FD w/amount if 50% or greater for inpatient Adds condition code 49 or 50 Modifier FB or FC on procedure code if 50% or greater Notifies department
22 Implementation 22 Inconsistencies Identified: Manufacturers rep filled out paperwork/ packaged devices. Billing changes depended on key phrases in the physician i documentation. No communication between AP and the department.
23 Implementation (continued) 23 Process Changes: Vendors communicate directly with business office. Business office validates and monitors process Additional documentation required to support defective implant/device
24 Challenges 24 Developing processes for all areas. HVI/Cath Lab self-contained. Continuous education of department & finance personnel. On-going monitoring of process to insure compliance. Follow-up with Multiple Vendors. Devices and Never Events.
25 OIG Compliance Reviews 25 CMS Regs for Inpatient/Outpatient billing Has involved over 38 hospitals/medical centers. Just completed a follow-up review Boston. Take up residence 4 to 5 months Hospital provides services Every review has included warranty credits.
26 OIG Compliance Items 26 Short stays Payments greater than $150,000 Transfers Same day discharges and readmissions Inpatient and outpatient manufacturer credits for replaced medical devices
27 OIG Compliance Items (continued) 27 Outpatient claims with payments greater than $25,000 Anticancer drug billing. Billing for injections & infusions. Surgeries billed with units greater than one Proper use of modifiers
28 Save the Date September 21-24, rd Annual Conference Austin, Texas 28
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