News to Note – August 2024

• A new term, “administrative harm,” was highlighted in a recent article in the Journal of the American Medical Association (JAMA).  
• It is defined as, “the adverse consequences of administrative decisions within health care and directly influences patient care and outcomes, professional practice, and organizational efficiencies regardless of employment setting.”  
• Interestingly, it seems almost everything we do – choosing admission status, teaching terminology to ensure the care can be coded accurately, initiatives like discharge by noon, decisions to not provide select services on weekends, changes to split-shared billing rules, charging employees for parking, accepting transfers when there are no open beds, the many prior authorization requirements used by payers, and more – are considered administrative harm.  Time will tell what comes of this concept.
• Recently, the Office of the Inspector General (OIG) released a scathing criticism of Medicare’s oversight of short Inpatient admissions, claiming that the Centers for Medicare and Medicaid Services (CMS) is not doing nearly enough to ensure that these claims are compliant and worthy of payment as a Diagnosis-Related Group (DRG).  
• They said, “Although BFCC-QIOs [Beneficiary and Family-Centered Care-Quality Improvement Organizations] reviewed thousands of claims for short inpatient stays and denied $49.2 million in improper payments during our audit period, these reviews denied only 0.6 percent of the $7.8 billion in improper payments estimated by CMS’s Comprehensive Error Rate Testing reviews.”  
• Is the OIG’s estimate of $7.8 billion of improper payments just for short Inpatient admissions high?  Or, are there a number of hospitals out there billing most or even all hospitalized patients as Inpatient?  Either way, the OIG is suggesting that CMS up their game on audits to ensure that improper payments are found and recouped.  
• The OIG also suggested that CMS establish an occurrence span code for hospitals to use to attest that a short Inpatient hospitalization does in fact meet the Two-Midnight Rule provisions just as we now have occurrence span Code 72 applying to claims with less than two Inpatient midnights.  
• Additionally, the OIG questioned why no providers had been referred to the Recovery Audit Contractors (RACs) for auditing of short Inpatient admissions as permitted.  CMS responded that no provider met the guidelines for such a referral.  While this was not stated, it seems possible the OIG took that response as proof that CMS was not auditing enough providers. 
• All hospitals should be determining admission status compliantly and have a process to review short Inpatient hospitalizations prior to claim submission.  
• Recently, the Medicare Administrative Contractor (MAC), Noridian, posted an appeals newsletter entitled, Billing the Subsequent Inpatient Care 99232.  
• The document described several common denial reasons.  Included in this list was, “charge exceeds fee schedule.”  But, what is that?  Noridian is denying claims when the charge exceeds the approved amount?  That’s not how it works.  Providers charge their own charges and the MAC should adjust the amount to meet their fee schedule and pay that amount.  We certainly hope they are not denying claims where the charge is not exactly equal to the approved amount.  Perhaps this is something to bring to your billing department’s attention so they can investigate and ensure this is not happening to your hospital claims.
• Also, in the resource section of the document, there is a link to a page entitled, Observation and Inpatient (E/M) Common Denials and Resolutions.  This section, sadly, contains errors.  On January 1, 2023, the E&M codes for observation services were deleted and observation visits had to be coded with the initial hospital visit codes.  The Noridian document, updated on December 9, 2023, exactly 343 days after the observation codes were deleted, refers repeatedly to observation service codes.  There’s a one-year timely filing deadline for providers so theoretically, on December 9th, 2023, a provider could bill for a service provided in 2022.  It would have been helpful if Noridian added a note about the deleted codes.  
• A dilemma many have faced is the hospitalized Medicare patient who requires skilled nursing facility (SNF) care but the patient also requires ongoing treatment with a costly medication such as chemotherapy.  
• Under Medicare Part A SNF payment rules, the SNF gets a fixed payment per day and must cover the cost of all patient care except for a limited list of excluded services and drugs.  If the patient’s costly medication is not excluded from the consolidated payment, most SNFs will understandably refuse to accept the patient.  
• Here is a solution to consider:  Critical access hospitals often have swing beds which provide SNF care but they are paid as a percent of charges.  If they give costly medications, they get reimbursed for the cost.  Critical access hospitals are also permitted to hospitalize patients who received their inpatient care at other hospitals.  Obviously, critical access hospitals are, by definition, not in metropolitan areas so this plan may not be appealing to the patient.  But, for a patient who needs chemotherapy and rehabilitation in a SNF, this is something to keep in mind as an option to offer. 
• It appears there is a new SNF wrinkle involving Medicare Advantage (MA) plans.  Here is the scenario:
• A patient is receiving care at a SNF, approved by the MA plan.
• Something happens while at the SNF and the patient is sent to the Emergency Department (ED).  Perhaps the patient is hospitalized, perhaps they are cleared for discharge from the ED.  But, they cannot return to the SNF under the original approval if they are physically in the hospital at midnight.  A new approval for SNF care is required to allow transfer back to the same facility!
• Make sure to ask the case managers at your hospital if this type of thing is happening so it can be investigated and addressed.
• Last month we saw the release of over 3,000 pages of new, proposed regulations for the outpatient and physician fee schedule rules.  
• The Medicare Two-Midnight Rule remains intact and was not even mentioned.  Unfortunately, this also means there is nothing new about enforcing MA plan use of the Rule, either.
• There are no substantive changes to the Medicare Inpatient Only List.  Eight codes were added – three involving liver transplants and five involving dental procedures. 
• Changes to Outpatient payments include Medicare proposals to increase the payment for Observation services by $47.34 and increase payments for Outpatient joint replacements by $215.76.  Please remind your hospital CFOs not to spend all this added revenue at once.
• While hospitals are proposed to receive small payment increases for 2025, the physician fee schedule is expected to suffer another 2.8% cut.  CMS payment rates are regulated by laws passed by Congress.  Some wonder how we can convince them that one day, there could be a breaking point when doctors stop seeing Medicare patients altogether.  If you have ideas, please reach out to Dr. Ritu Prasad, Chair of our Government Affairs Committee.
• The most expensive Outpatient therapy is Hemgenix, a one-time infusion to treat hemophilia with a payment of $3.6 million.  Yes, that’s MILLION with an “m.”  Perhaps this is also why last month, CMS released a transmittal about changing the formatting of notices sent to patients to allow 10-digit dollar amounts.  Imagine opening your mail from Medicare and seeing a charge for $10,000,000!
• MA plans continue to deny Inpatient for patients whose hospitalization meets the two-midnight benchmark for a myriad of reasons.  Now, it appears at least one plan is refusing to acknowledge that midnight counting begins with the start of symptom-related care.  Hospital representatives are meeting with CMS to discuss these violations of federal regulations and if you want to file complaints to CMS about MA plan malfeasance, you can go to this page at ronaldhirsch.com for direction, CMS instructions about encrypting documents, and the CMS form.
• Consider alerting your finance team about an Aetna online policy change which now allows denial of 30-day readmissions to any hospital in a health system utilizing the same Tax ID Number, not just readmissions to the same physical hospital.  If your health system’s Aetna contract lets them unilaterally make contractual changes via their website, suggest to your CFO that this be rectified.
• A well-known medical practice reimbursement consultant recently reported that UnitedHealthcare (UHC) is notifying contracted physician practices that effective October 1^st, UHC will be lowering their physician fee schedule to pay 63% - 87% of Medicare rates.  
• All medical practices should be on watch for this kind of contract amendment which often slips through without any notice.
• Independent medical practices might consider going out of network for UHC (or other payers, for that matter).  Why?  Because, when a critical mass of physicians drop a payer, that payer can no longer claim to have an adequate network of providers.  This could result in companies switching their employee insurance provider to one with better coverage.  It might also result in the plan losing the ability to meet CMS’ network adequacy standard which allows plans to sell MA plans. 
• Recently, a physician advisor posted on an online listserv that their facility was denied a nearly half-of-a-million-dollar hospitalization payment from Optum because several of the ICD-10 codes on the claim were unspecified codes.  Dr. Erica Remer, ACPA’s Clinical Documentation Integrity Committee Chair, responded that this was inappropriate because many diagnosis codes include the term “unspecified” and are perfectly appropriate to report as such.  The physician advisor contacted Optum and they responded that only one of the codes needed adjustment, after all.   Imagine if that physician advisor had not challenged the payor on behalf of their health system?
• Another physician advisor posted, “We recently reviewed a webinar about ABNs [Advanced Beneficiary Notices] that suggested delivering an ABN in the Emergency Department can be considered coercive and recommended against it.”  It is not clear who or what organization gave this webinar, but there is clear regulatory proof that this direction is not correct. 
• CMS, in the Medicare Claims Processing Manual, Chapter 30, addresses this. CMS states, “A written notice should not be obtained from a beneficiary in a medical emergency or otherwise under great duress (i.e., when circumstances are compelling and coercive) since that individual cannot be expected to make a reasoned informed decision.”  But they also state, “ABN usage in the ER may be appropriate in some cases where the beneficiary is medically stable with no emergent health issues.”
• The error by the webinar presenter was to suggest that the prohibition is based on the location of the patient when it is actually the circumstances that dictate if there is potential coercion.  A patient can be in a hospital unit outside of the ED but if they received an injection of Morphine prior to being asked to sign a form, this could certainly be viewed as coercive even though the patient is nowhere near the ED.