Reimbursement Rules That Could Trip Up Hospital Attorneys THEMES

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1 Reimbursement Rules That Could Trip Up Hospital Attorneys Cynthia F. Wisner Associate Counsel, Trinity Health 1 THEMES Medicare is eliminating grandfathering and bundling payments Lab technical fees 3 day rule Hospitals are affiliating and compliance with the 3 day rule is complicated Place of service codes and modifiers are tricky (required for physician services) Outpatient departments and physician offices must be operated differently 2 1

2 THEMES Paying physicians and billing for physician services is complex Physicians must not opt out of Medicare Locums Tenens rules and Reciprocal Billing rules are for occasional use Billing when physician extenders perform services is complicated Physician bills cannot be submitted for services to family members 3 THEMES Hospitals are seeking to optimize revenue with provider based status Provider based rules are complicated Many hospitals are expanding to off campus locations and former physician office locations Direct physician supervision may be required for the hospital to bill a procedure or facility fee for outpatient therapeutic services Hospital responses trigger scrutiny Expansion of 340B Increases in billings for free Medicare services 4 2

3 Technical Fees for Lab Services to Inpatients Congress voted February 17, 2012 to discontinue direct Medicare payments for the technical component of pathology services provided to inpatient and outpatients for grandfathered hospitals, after June 30, 2012 Since 1999, independent/reference laboratories that provided services to grandfathered hospitals could bill Medicare separately for the technical component of pathology services Labs and pathologists will bill hospitals 5 3 Day Rule Diagnostic & Nondiagnostic Services In November 2011 the CMS 3 day rule was clarified as it applies to physicians services in locations that are wholly owned or whollyoperated by a hospital 3 day payment window reduces the physician payment in wholly owned or wholly operated facilities from the non facility rate to the facility rate for services provided during the 3 day window prior to a related inpatient admission 6 3

4 3 Day Rule Applies to any entity that furnishes the diagnostic or nondiagnostic services Previously required exact match between principal ICD 9 CM diagnosis codes for outpatient services & inpatient admission 2010 Act broadened to any nondiagnostic service that is clinically related to the reason for patient s inpatient admission 7 3 Day Rule Diagnostic & Nondiagnostic Services Bundles services furnished by hospital (or by an entity that is wholly owned or whollyoperated by hospital) to patient during the 3 days prior to date of patient's admission Claim must be submitted with a modifier (PD) to identify it (1 day for hospitals not considered subsection (d) hospitals under IPPS) 8 4

5 Hospital Space and PSAs Location in space leased from the hospital can still qualify for the office place of service code Physician group pays for the space and the hospital does not wholly own the entity that furnishes the diagnostic or non diagnostic services PSAs, however, operate in hospital locations and hospital may provide the diagnostic or non diagnostic services 9 3 Day Rule and Hospital Billing Hospital is required to include the technical portion of any outpatient diagnostic test and non diagnostic service on the inpatient claim for the hospital (when the service was provided within the 3 day period prior to admission) Including the services likely will not affect the DRG 10 5

6 3 Day Rule Subsidiary is wholly owned if 100% owned Entity is wholly operated by a hospital if hospital has exclusive responsibility for conducting and overseeing entity s routine operations regardless of whether the hospital also has policymaking authority over the entity 11 3 Day Rule 12 6

7 Joint Ventures If the Joint Venture is wholly operated by the hospital and provides diagnostic services (including clinical diagnostic laboratory tests) or nondiagnostic services related to the admission the rule applies 3 Day Rule does not apply to Ambulatory Surgery centers because surgeries in those locations are already paid at the facility rate 13 3 Day Rule 14 7

8 Increasing Revenue with Provider Based Status 1. Physician place of service codes 2. Problems with 100% hospital space 3. Problems with system signage 4. Levels of technical and professional services 5. Split bills 6. Proposed repeal Place of Service Codes Provider Based obligations include: (b) Physician services furnished in hospital outpatient departments or hospital based entities (other than RHCs) must be billed with the correct site of service so that appropriate physician and practitioner payment amounts can be determined. (c) Hospital outpatient departments must comply with all the terms of the hospital's provider agreement. 16 8

9 2. 100% Hospital Space An off campus location cannot be both provider based and a physician office location (some commentators have suggested time sharing the space) CMS advises that location must be 100% provider based all of the time Physicians do not have to be employed to provide services in provider based space System Signage The location/space must be identified as part of the hospital - both with signage and other identification, such as name, patient registration forms, letterhead, advertisements, and Web site Advertisements that only show the facility to be part of or affiliated with the main provider s network or healthcare system are not sufficient Because when patients enter the providerbased facility, they need to be aware that they are entering the main provider 18 9

10 4. Intensity Levels No definitive strong correlation between facility and professional coding Thus no rational basis for the application of one set of derived codes, either facility or professional, to the determination of the other on a case by case basis Facility coding reflects the volume and intensity of resources utilized by the facility to provide patient care Professional codes are determined based on the complexity and intensity of provider performed work and include the cognitive effort expended by the provider Split Billing CMS eliminated this split billing requirement in revised (g) In response to comments from providers on the rule, Medicare stated: we have decided to revise it to restrict the requirement for uniform billing to Medicare patients only, thus allowing hospitals to bill other payers in whatever manner is appropriate under those payers rules. As revised, (g)(6) [sic] states that hospital outpatient departments (other than RHCs) must treat all Medicare patients, for billing purposes, as hospital outpatients. The department must not treat some Medicare patients as hospital outpatients and others as physician office patients

11 5. Split Billing Notwithstanding the revisions, some commentators have noted that the conservative approach is to bill all payers (including self pay patients) as it bills Medicare unless the payer will not accept the hospital s technical component charges or directs the hospital to bill otherwise Split billing satisfies the part of the providerbased regulation that requires public awareness further requiring that the providerbased site must be held out to the public and other payers as part of the main provider Split Billing CMS s provider based attestation form requires providers to certify: The facility or organization seeking status as a department of a provider, a remote location of a hospital, or a satellite location is held out to the public and other payers as part of the main provider. When patients enter the provider based facility or organization, they are aware that they are entering the main provider and are billed accordingly

12 5. Split Billing Example: Split bill Medicare and Global bill for all other payers Facility Fee: $50.00 Professional Fee: $75.00 Medicare Commercial UB Billing Form $50.00 N/A 1500 Billing Form $75.00 $ Appropriate billing if the physician billing system has ability to maintain two different charge structures (i.e. $75 for Medicare and $125 for the commercial payers) Split Billing Special note re Medicare Secondary Coverage Billing for patients who have a commercial payer as a primary and Medicare as a secondary is challenging because of the two different charge structures (e.g. providerbased vs. freestanding) If the patient has Medicare as secondary, Medicare will not pay the technical fee unless the primary payer is billed using a split bill 24 12

13 5. Split Billing If the Payer cannot process or declines to process a facility fee on a UB form and the location is an outpatient department of the hospital What should be on the 1500 form? If payer does not recognize hospital outpatient departments the charge on the 1500 should equal charge on the combined split bills Non Medicare payers may reduce the payment to the amount paid for services in a physician office Split Billing UB $ $75 total $ to payers who do not recognize the location as a hospital location is 125 Non Medicare Payer pays $100 Physician to be paid 60% of the $100 = $60 The entire reduction in the bundled global should not be allocated to the hospital. This is true even if in the physician office the Medicare fee for the physician would be $75 because The hospital outpatient department cannot be treated as a physician office in determining compensation to the physician 26 13

14 6. Possible Repeal 2013 OIG Workplan OIG will determine the extent to which practices using the hospital, or providerbased status met the billing requirements of CMS OIG also will determine the impact of hospitalowned physician practices billing Medicare as provider based physician practices Possible Repeal OIG noted that in 2011, the Medicare Payment Advisory Commission (MedPAC) expressed concerns about the financial incentives presented by provider based status and stated that Medicare should seek to pay similar amounts for similar services MedPAC recommends the technical component of hospital outpatient evaluation and management (E&M) services be reduced to the practice component payment rates under the physician fee schedule 28 14

15 Supervision CMS begins enforcing its supervision requirements across the board in 2014 CMS modified supervision levels for outpatient therapeutic services and also assigns supervision levels for diagnostic services For direct supervision the physician must be immediately available 29 Supervision Physicians are deemed immediately available in on campus outpatient departments Schedules are required for physicians providing supervision in off campus outpatient departments To buy physician services counsel needs knowledge of supervision requirements Not as simple as serving as medical director 30 15

16 Supervision NPPs can now provide direct supervision for hospital outpatient services (if within scope of practice) CMS deleted the within the office suite reference Direct Supervision is now required for initiation of 16 nonsurgical extended duration therapeutic services followed by general supervision once the patient is medically stable 31 Supervision An Advisory Panel on Hospital Outpatient Payment (HOP Panel) will recommend supervision levels for individual hospital outpatient therapeutic services Last year CMS reduced the level of supervision for 49 outpatient therapeutic services from direct to general supervision HOP Panel s next meeting is March 11 12, 2013 AHA recommends a default standard of general supervision for outpatient therapeutic services with reasonable exceptions process 32 16

17 Incident to for Facility Services Facility fee cannot be billed for facility therapeutic services unless the services provided are incident to the physician s services Prior to providing therapeutic services the hospital should require a physician order CMS 2012 Facility FAQ: Services provided by a nurse in response to a standing order do not satisfy incident to requirement 33 Incident to Professional Services Does not apply in outpatient departments Requires DIRECT supervision Physician must see the patient first Physician extenders can bill using their own provider numbers Split/Shared Billing requires face to face encounter with both physician and NPP 34 17

18 Locum Tenens Billing Although Medicare typically only pays physicians who actually furnish a service, it does make exceptions for "covering physician" arrangements Regular physician must submit the services using his/her own National Provider Identifier (NPI) Limited to a continuous period of longer than 60 days (exception for Armed Forces absences) 35 Locum Tenens Billing Locum Tenens is not a solution/substitute for delays in credentialing Locum Tenens is not a solution for service line growth and staffing shortages. Key to locums billing with a modifier is that the patient is seeking care from the physician who is temporarily away and a substitute physician provides services to the absent physician s patients If the absent physician is always absent on Fridays and the patient seeks care on Fridays then the patient arguably is not seeking care from the absent physicians and the absence is not temporary 36 18

19 Reciprocal Billing (Coverage) Locum modifier is Q6 On an occasional reciprocal basis, a patient s regular physician will arrange for a substitute physician to provide visit/services, including emergency visits or related services Reciprocal billing modifier is Q5 Also limited to continuous period of no longer than 60 days 37 Locums and Reciprocal Billing Regular physician must keep record of locums and/or reciprocal Services of non physician practitioners (e.g., CRNAs, NPs and PAs) may not be billed under the Locum Tenens or Reciprocal Billing reassignment exceptions Provisions apply only to physicians 38 19

20 Assignment of Right to Payment When employing or contracting with physicians Hospitals must be aware of the participation status of the physician Physicians who wish to change their status from PAR to non PAR or vice versa may do so annually Medicare approved amounts for non PAR physicians are 95% of the rates for PAR physicians Physicians who become private contracting physicians, agreeing to bill patients directly and forego any payments from Medicare to their patients or themselves they cannot submit claims to Medicare for any of their patients for a two year period 39 Family Members Medicare does not pay for care by physicians to immediate family members Intent is to bar Medicare payment for items and services furnished by physicians or suppliers, which would ordinarily be furnished gratuitously because of the relationship of the beneficiary to the person imposing the charge 40 20

21 Family Members Exclusion applies even if the bill or claim is submitted by an unrelated individual or by a partnership or a professional corporation Exclusion also applies to items and services furnished incident to a physician's professional services But only if the physician who ordered or supervised the services has an excluded relationship to the beneficiary B Drug Pricing 2011 report by the US Government Accountability Office found that oversight of the program is inadequate Because program lacks requirements on how 340B revenue can be used, there have been questions about how revenue is generated and applied, and whether a larger share of drug costs are being shifted to others in the health care system 42 21

22 340B Drug Pricing 340B drugs may be sold only to eligible patients as a general rule patients receiving hospital outpatient services Expanded 340B program certain free standing cancer hospitals and children s hospitals, critical access hospitals, sole community hospitals and rural referral centers Current Concerns: drug diversion and drug hoarding and possible inappropriate drug purchases at 340B pricing 43 Free Medicare Screening Health Reform added free screening colonoscopies Asymptomatic individuals (that is, adults showing no signs or symptoms of disease) may encounter unexpected cost sharing for a screening colonoscopy Polyp removal Anesthesia 44 22

23 Free Medicare Screening Proportion of gastroenterology procedures using anesthesia services increased from approximately 14% in 2003 to more than 30% in 2009, and more than two thirds of anesthesia services were delivered to low risk patients Gastroenterologists get paid just as much if an anesthesiologist is involved, but since they don't have to manage sedation, they can work more quickly and handle more cases in a day They also avoid potential liability for patients who might react badly to sedatives Payments for gastroenterology anesthesia services doubled in Medicare patients and quadrupled in commercially insured patients 45 Signatures and Dates on ABNs E. Signature Box Once the beneficiary reviews and understands the information contained in the ABN, the Signature Box is to be completed by the beneficiary (or representative). This box cannot be completed in advance of the rest of the notice

24 Signatures and Dates on ABNs Blank (I) Signature: The beneficiary (or representative) must sign the notice to indicate that he or she has received the notice and understands its contents. If a representative signs on behalf of a beneficiary, he or she should write out representative in parentheses after his or her signature. The representative s name should be clearly legible or noted in print. Blank (J) Date: The beneficiary (or representative) must write the date he or she signed the ABN. If the beneficiary has physical difficulty with writing and requests assistance in completing this blank, the date may be inserted by the notifier