Coding Update- July 2008

Medicare Improvements for Patients and Providers Act of 2008

On July 15, 2008, the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) (PubLNo 110-275) was enacted. As a result of this new legislation many payment systems and other Medicare programs were immediately affected. Below is a brief summary of how different providers are affected by this new legislation.

Physicians. Retroactive to July 1, 2008, the mid-year 2008 Medicare Physician Fee Schedule (MPFS) rate of -10.6 percent has been replaced with a 0.5 percent update. Physicians, non-physician practitioners, and other providers of services paid under MPFS should already be receiving payment at the 0.5 percent update rates (the rate adjustment was to begin 10 business days after the legislation was enacted). Claims with dates of service July 1 and later billed with a submitted charge at least at the level of the January 1 – June 30, 2008, fee schedule amount will be automatically reprocessed. Any lesser amount will require providers to contact their local contractor for direction on obtaining adjustments. Non-participating physicians who submitted unassigned claims at a reduced nonparticipation amount will also need to request an adjustment.

Outpatient Therapy. The effective date of the exceptions process to the therapy caps has been extended to December 31, 2009. Outpatient therapy service providers may now resume submitting claims with the KX modifier for therapy services that exceed the cap furnished on or after July 1, 2008. Before the legislation was enacted, outpatient therapy service providers were previously instructed to not submit the KX modifier on claims for services furnished on or after July 1, 2008. Because the extension is retroactive to July 1, 2008, providers should resubmit claims using the 837 institutional electronic claim format or the UB-04 paper claim format by appending the KX modifier so that they may now be processed and paid. For those providers who use the 837 professional electronic claim format or the CMS-1500 paper claim format, they should request to have their claims adjusted in order to have the contractor pay the claim.

DMEPOS Accreditation. The new legislation has delayed the Medicare Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Billing Program. As a result of the delay, the special accreditation deadlines previously established for the second round of the program have been cancelled. Prior to the enactment of this law, suppliers had to applied for accreditation by July 21, 2008, to be eligible to submit a bid for the second round of competitive bidding and must have obtained accreditation by January 14, 2009, to be eligible for a second round contract. Both of these deadlines have been cancelled and no longer apply; however, the September 30, 2009, deadline is still in effect.

Brachytherapy Payments. The new law extended the use of the cost-to-charge payment methodology for brachytherapy and therapeutic radiopharmaceuticals through January 1, 2010. This change is retroactive to July 1, 2008. To avoid a disruption in payment while the cost-to-charge payment methodology is re-implemented, impacted claims will continue to be paid based on the OPPS rates. Contractors will mass adjust all impacted OPPS claims with dates of service beginning July 1, 2008, as soon as the methodology has been implemented. Reprocessing is expected to be complete by September 30, 2008.

Independent Laboratory Moratorium. The moratorium that allowed independent laboratories to bill for the TC of physician pathology services furnished to hospital patients has been extended to January 1, 2010, as a result of the new law. Prior to this new law, independent laboratories had been instructed that they could no longer bill with the TC modifier after July 1, 2008. This moratorium is retroactive to July 1, 2008.

This legislation can be viewed on the IRN at ¶52,199.

How to Enhance your Compliance Results with Proper Code Assignment

An article in the July-August Journal of Health Care Compliance by Rita A. Schichilone, discusses the six general error types that are often the root causes of coding variation. According to Schichilone, “the coding process relies on timely and complete documentation as the data source with access to rules and guidelines governing the use of the required coding systems.” However, there are no existing requirements (federal or otherwise) that delineate the specific documents that must be present at the time of coding. As such, a well-designed coding process workflow must be implemented to enhance compliance by preventing errors and variance before reporting rather than reaction afterward.

To prevent common occurrences of “partial” or “guess coding,” facilities should design a workflow process for code assignment that builds in compliance and identifies data integrity issues before external reporting takes place. This will reduce the costs a facility spends on denied claims and payment reviews. To create this workflow process, it is recommended the facility include a data integrity feedback loop in to the workflow; and apply corrective action immediately when issues are identified.

The six general error types that cause denied claims include: coder errors, provider, physician documentation errors, computer system errors, leadership (education and training) errors, and other errors.

Coder errors are generally based on insufficient knowledge of clinical coding, coding conventions and application of official coding guidelines and coding advice. This leads to incorrect application of hospital-specific policies and procedures, and ineffective work habits and use of resources.

Physician documentation errors create conflicting, incomplete, ambiguous and sometimes illegible documentation that is typically based on coding without key documentation and facility or payer specific coding guidelines.

Computer system errors are a result of problems between the clinical, coding, and billing systems. This impacts the accuracy of the code assignments.

Leadership via education and training errors result from insufficient accountability by the medical staff and lack of standardized HIM workflow model. This creates inadequate tracking, trending, reporting, and follow up on coding quality review results.

Other errors are those not categorized above that is part of the aggregate underlying cause of variance in code assignment and interest to the compliance program.

ndent: 0.17in; margin-bottom: 0in; line-height: 109%"> Schichilone, Rita A. Enhanced Compliance Results by Improving the Code Assignment Process. Vol. 10, No. 4, July – August 2008, Journal of Health Care Compliance. This article can be viewed in print at page 61 or electronically via the Internet Research Network on the CCH Health Care Compliance tab/Health Care Compliance Portfolio/Journal of Health Care Compliance /July-August 2008.

2009 Proposed Update to OPPS and ASC Payment Systems Released

Projected payments under the outpatient prospective payment system (OPPS) for calendar year (CY) 2009 are expected to rise to $28.7 billion, and projected payments for ambulatory surgical center services will rise to $3.9 billion. Included in the updates is a new payment rate that has been proposed for services provided at type B emergency departments, which are emergency departments that are not open 24 hours a day, seven days a week. The payment rate will be received via the report of a single APC when two or more imaging procedures using the same imaging modality were provided in a single session. Additionally, two payments have been proposed for partial hospitalization program rates: one for days with up to three services, and one for days with four or more services.

Nine new surgical procedures will be added to the AC payment system and five new procedures to the list of office-based procedures. This includes three new procedures and six procedures that were previously excluded. The ASC payment for these codes is based on the second year of a four-year transition. Proposed rule, 73 FR 41416, July 18, 2008. This Proposed rule can be viewed on the IRN at ¶220,590; and on REX in the CMS Federal Register (Current Year), July 2008, July 28, 2008 folder under the title “Proposed rule: Medicare Program: Proposed Changes to the Hospital Outpatient Prospective, Ambulatory Surgical Center.”

Why Correct Service Units and MUEs Assignment is a Billing Compliance Imperative?

According to Melinda S. Stegman, “facilities must carefully monitor service units and medically unlikely edits (MUEs) for each area submitting charges and routinely audit claims.” For acute-care hospital billing, each field on the UB-04 claim form is important, but few carry as much compliance risk as the “service edits” field, which is found at field locator number 46. This field is located to the right of the CPT or HCPCS code and service date and provides a quantitative measure of the services provided to the patient.

The OIG has increased its scrutiny of the hospital outpatient service units via analysis of outpatient claims with charges greater than or equal to $50,000. Of the 59 claims originally analyzed, 18 were appropriate and 41 received inappropriate payments totaling $3,463,740. The entire group of overpayment claims was a result of inappropriate service unit reporting, sometimes in combination with incorrect CPT and HCPCS codes.

One constant source of confusion involves “rolled up” charges that happen frequently in service areas such as ambulatory surgery. In these areas, multiple charges are reported under a revenue code such as 360, operating room, which contains all the itemized charges rolled up into this one line item. Regardless of the number of items “rolled up,” the service units remain set at “1” because one surgical procedure was performed. If the coding staff reports more than one CPT code, it appears as a second 260 revenue code line on the bill with allocated charges.

To prevent such confusion from occurring at a facility, a facility’s CDM coordinator should maintain CDM policy and procedure documents that clarify the definition of service units for each outpatient service area. If this is not done, the facility will be incurring either a compliance risk or will lose legitimate reimbursement to which it is entitled.

Stegman, Melinda S. OIG Scrutiny of Service Units and Medically Unlikely Edits: A Billing Compliance Imperative. Vol. 10, No. 4, July – August 2008, Journal of Health Care Compliance. This article can be viewed in print at page 65 or electronically via the Internet Research Network on the CCH Health Care Compliance tab/Health Care Compliance Portfolio/Journal of Health Care Compliance /July-August 2008.

HCPCS Code Set

CMS released several new codes, effective July 1, 2008. New codes include: C9242; G9356- G9358 and G0398 – G0400. To view these updates on the IRN, go to the Search Code Sets tab in ChargeMaster Comply, select the HCPCS code set, select added in the Filter Actions and in the Start Date field enter 07/01/2008. To view these updates in REX, go to the HCPCS and CPT® CodeBook – 2008 / CodeBook Changes and Updates Report.

ICD-9-CM Volume 1 Diagnostic and Volume 3 Procedural Code Sets

Effective October 1, 2008, CMS released hundreds of changes to both code sets including new, modified and deleted codes. To view these updates on the IRN, go to the Search Code Sets tab in ChargeMaster Comply, select both or either of the ICD-9 code sets, select added, modified and/or deleted in the Filter Actions and in the Start Date field enter 10/01/2008.

Physician Fee Schedule Code Set

CMS released many new physician fee schedule codes effective July 1, 2008, including: 0188T – 0192T and 3351T – 3354T. Several other changes were introduced as a result of the Medicare Improvements to Patient and Providers Act of 2008 (MIPPA) (PubLNo 110-275) as enacted July 15, 2008. To view all changes on the IRN, go to the Search Code Sets tab in ChargeMaster Comply, select the Physician Fee Schedule code set, select added in the Filter Actions and in the Start Date field enter 07/01/2008. To view these updates in REX, go to the Physician Fee Schedule and CodeBook – 2008 / Changes and Updates to the PFS CodeBook.

APC Code Set

CMS released many new and modified APC codes effective July 1, 2008. The new codes include: 0188T – 0192T and 3351T – 3354T; and the modified codes include: 90371, A4565 and C9121. There were also several modifications that were released in the Medicare Improvements to Patient and Providers Act of 2008 (MIPPA) (PubLNo 110-275) as enacted July 15, 2008. These modifications affected the status indicators of brachytherapy codes. To view these new and modified codes on the IRN, go to the Search Code Sets tab in ChargeMaster Comply, select the APC code set, select added in the Filter Actions and in the Start Date field enter 07/01/2008. To view these updates in REX, go to the APC CodeBook – 2008 / APC CodeBook Changes and Updates

AMA Coding Guidance: June 2008 CPT® Assistant

The CPT Assistant newsletter for June 2008 has been released and is now reflected on the IRN and REX.

Coding Communication: Hernia Repair - Hernioplasty, Herniorrhaphy, and Herniotomy

There are three main types of hernia repair: herniorrhaphy, hernioplasty, and herniorrhaphy. The appropriate treatment option is usually chosen by the type of hernia the patient is experiencing. Below is a list of the different types of hernias and the CPT codes that are associated with them and their repair:

Inguinal hernia (codes 49491- 49525, 49650, and 49651);

Lumbar hernia (code 49540);

Femoral hernia (codes 49550 - 49557);

Incisional or ventral hernia (codes 49560 - 49566 and 49568);

Epigastric hernia (codes 49570 - 49572);

Umbilical hernia (codes 49580 - 49587);

Spigelian hernia (code 49590); and

Omphalocele/Gastroschisis (codes 49600 - 49611).

margin-bottom: 0in; line-height: 109%"> If manual reduction is initially used to treat a hernia, it is performed as part of an evaluation and management service and should not be separately reported, code 49999 can be used to report the service. Codes 39502-39541 should be used to report the repair of a diaphragmatic or hiatal hernia and if another procedure is performed it should be reported with a separate code and with modifier 51. If hernia repair is not medically necessary but is performed during the course of another abdominal procedure it should not be reported separately.

Coding Clarification: Drug Administration Part III

When a patient receives hydration concurrently with chemotherapeutic agents, the hydration does not have to be separately reported. If the hydration occurs before or after the use of chemotherapeutic agents or is used as the primary therapeutic service either CPT code 90760 or 90761 should be reported. If hydration is a distinct service, and not being done as toxicity prevention during chemotherapy, it should be reported separately with modifier 59.

Coding Clarification: Fluoroscopy

Fluoroscopy can be used in combination with other imaging methods or it can be used independently. Fluoroscopy code 76000 is used to report up to one hour of physician time and it has been designated as a "separate procedure" code. Modifier 59 can be appended to code 76000 to signify that a distinct or independent service was performed. Code 76001 should be used to report more than an hour of service provided by the radiologist to a non-radiologist during a procedure that requires fluoroscopy. Add-on code 77001 should be reported with the appropriate central venous access catheter or device procedure code and codes 77002 and 77003 are used to report fluoroscopic guidance for needle placement and the determination for which code to use can be made by picking the code related to the anatomy involved in the procedure.

Coding Clarification: Prolonged Services.

Prolonged service codes (99354-99359) were created to report Evaluation and Management service that require more than the standard time. Codes 99354 and 99355 are used in reporting services performed in an office or other outpatient setting and 99356 and 99357 are used for inpatient reporting. Prolonged service codes are add-on codes and are required to be reported in addition to a primary service code and both services must occur on the same date. Use of modifier 21 instead of a prolonged service code is appropriate only when the time thresholds for prolonged services are not met or if specific payer policy requires it.

Coding Consultation: Questions and Answers.

An article by the CPT Editorial Panel answers questions posed to the panel regarding the subjects of surgery: integumentary system, surgery cardiovascular system, evaluation and management: medical team conferences, and pathology: laboratory. Some of the responses answer questions concerning, how is the destruction of a port wine stain reported, which CPT code should be reported for the creation of a pocket for a pulse generator, and does the definition of Results, Testing, Interpretation, and Report</quote> in the Instructions for Use of the CPT Codebook apply to all of CPT or only the radiology section? AMA Release, June 27, 2008.

To view these articles on the IRN, search from the Search Code Sets tab in ChargeMaster Comply for any of the codes listed above, view the Related Documents by clicking on the paper icon next to the code, then select the article. To view these articles on REX go to the CPT Assistant Archives folder and in the Search field within this folder and enter “June 2008.”

General Coding News
Effective July 1, 2008, regarding applicability of outpatient prospective payment system (OPPS) to specific HCPCS codes, hospitals should be reporting the code based on the technical component for their facility services in instances where there are separate codes for the technical component, professional component, and/or complete procedure. If the service does not have a separate technical component code, hospitals should report the code that represents the complete procedure. Additionally, brachytherapy sources will be eligible for outlier payments and for the rural sole community hospital adjustment. C-codes have been implemented for these brachytherapy sources and the OPPS coding changes. Category III CPT codes, along with their status indicators and APCs, have been implemented in the OPPS for July 1, 2008. 0188T, 0189T, 0190T, 0191T, and 0192T are actively in the OPPS. It is not appropriate for hospitals to bill HCPCS code C9399 when the mixing of two or more products does not constitute a “new” drug as regulated by the FDA. Unlisted codes such as J9999 or J3490 should be used for compounded products. Medicare Claims Processing Manual, Pub. 100-04, Transmittal No. 1536, June 19, 2008. This transmittal can be viewed on the IRN at ¶157,399; and on REX in the CMS Transmittals and MLN Matters Articles folder under the title “R1536CP July 2008 Update of the Hospital Outpatient Prospective Payment System (OPPS) – 06/19/2008.”

Effective July 1, 2008, special billing instruction to the Medicare contractors and suppliers for claims subject to the Durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) Competitive Bidding Program have been developed and implemented. All claims must be submitted electronically using the ANSI 837P X12, version 4010A1 format, except for MSP claims. Modifiers KG, KK, KU, KL, KT, KV, KW and KY have been implemented. The KG, KK, KU, KW and KY modifiers are pricing modifiers that suppliers must use to identify when the same supply or accessory HCPCS code is furnished in multiple competitive bidding product categories. Medicare Claims Processing Manual, Pub. 100-04, Transmittal No. 1544, June 26, 2008. This transmittal can be viewed on the IRN at ¶157,409; and on REX in the CMS Transmittals and MLN Matters Articles folder under the title “R1544CP Manual Revisions to Reflect Special billing Instructions for DMEPOS Items as a Result of the DMEPOS Competitive Bidding Program.”

Effective July 1, 2008, ambulatory surgical centers (ASCs) are encouraged to report charges for all separately payable drugs and biologicals using the correct HCPCS codes for the items used. It is not appropriate to bill HCPCS code C9399, unclassified drug or biological, for mixing together of two or more products. The combination is not a new drug for which C9399 was designated. If a product is compounded and a specific HCPCS code does not exist for the product, the ASC should report an appropriate unlisted code such as J9999 or J3490. Medicare Claims Processing Manual, Pub. 100-04, Transmittal No. 1540, June 20, 2008. This transmittal can be viewed on the IRN at ¶157,404; and on REX in the CMS Transmittals and MLN Matters Articles folder under the title “R1540CP July Update to the ASC Payment System; Summary of Payment Policy Changes.”

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