Medical Necessity and Cardiovascular Procedures: What Providers and Payers Need to Know to Protect Their Patients and Bottom Lines

Transcription

1 Medical Necessity and Cardiovascular Procedures: What Providers and Payers Need to Know to Protect Their Patients and Bottom Lines Thursday, March 14, 2013 Click here to begin the On-Demand recording of this Webinar Michael Taylor, M.D. President, CEO and Founder Medical Audit & Review Solutions Mark Miani, M.D. Vice President and Chief Medical Officer Medical Audit & Review Solutions Atlantic Information Services, Inc th Street, NW, Suite 300 Washington, DC

2 About the Speakers MICHAEL TAYLOR, M.D., is the president, CEO and founder of Medical Audit & Review Solutions (MARS), a physician-led company focused on medical necessity audit, analytics and review. Dr. Taylor has been widely recognized as a foremost industry expert in the fields of medical necessity assessment and utilization review. He is a frequent speaker at industry conferences and events and has been widely published in leading compliance and utilization review publications. He is board-certified in family medicine and is a graduate of Vanderbilt University School of Medicine and Harvard College. Contact Dr. Taylor at drtaylor@ marsauditor.com. MARK MIANI, M.D., is the vice president and chief medical officer at MARS, where he is responsible for oversight of all clinical operations. He is an industry expert with more than 20 years of domestic and international clinical and administrative medicine experience, including extensive experience in health care utilization working as a medical director in both the provider and payer spaces. Dr. Miani attended Albany Medical College and completed his training at George Washington University Medical Center. He is boardcertified in internal medicine. Contact Dr. Miani at drmiani@marsauditor.com. Moderator: Francie Fernald, Contributing Editor, AIS s Report on Medicare Compliance Three Ways to Submit Your Questions for the 30-Minute Q&A Session Speaker presentation should run approximately 60 minutes, with 30 minutes of questions and answers. Questions may be submitted in three different ways: Prior to the Webinar (1) your question(s) to moderator Francie Fernald at ffernald@aishealth.com or During the Webinar (2) To send a question from the Webinar page, go to the Chat Pod located in the lower left corner of your screen. Type your question into the dialog box at the bottom and then click on the blue send button or (3) Dial *1 on your phone keypad and an operator will connect you to the moderator so that you can ask your question(s) live with the Webinar participants listening 2

3 About the Sponsor Atlantic Information Services, Inc. Atlantic Information Services, Inc., (AIS) is a publishing and information company that has been serving the health care industry for 25 years. It develops highly targeted news, data and strategic information for managers of health plans, hospitals, medical group practices, pharmaceutical companies and other health care organizations. AIS products include print and electronic newsletters, looseleafs and Web services, books, strategic reports, databases, Webinars and management seminars. AIS publishes these highly practical publications that address compliance issues in the health care community, including: REPORT ON MEDICARE COMPLIANCE is the industry s #1 source of timely news and proven strategies on Medicare compliance, Stark and other big-dollar issues of concern to health care compliance officers. Written weekly since 1992 by Nina Youngstrom the field s most knowledgeable, well-connected journalist the award-winning newsletter identifies and provides valuable guidance on dozens of high-risk billing and documentation problems and foreshadows the next moves of federal enforcers and their armies of RAC, ZPIC and MAC auditors. The best information there is for hospital compliance officers, the 8-page newsletter includes weekly insights and strategies that are not available anywhere else. A GUIDE TO COMPLYING WITH STARK PHYSICIAN SELF-REFERRAL RULES is a comprehensive looseleaf service written by a team of experienced health care attorneys. It features easy-to-follow explanations of the prohibitions and exceptions under the Stark rules, chapters devoted to the special Stark interests of different stakeholders, summaries of Stark Advisory Opinions issued by CMS and the OIG, and copies of regulations and other formal documents. Subscription includes quarterly updates and news summaries (in print and CD formats). ($594 annually). Learn more about all of AIS s products and services at the Marketplace at This publication is designed to provide accurate, comprehensive and authoritative information on the subject matter covered. However, the opinions contained in this publication are those solely of the speakers and not the publisher. The publisher does not warrant that information contained herein is complete or accurate. The conference materials are published with the understanding that the publisher is not engaged in rendering legal or other professional services. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. Copyright 2013 by Atlantic Information Services, Inc. All rights reserved. Organizations participating in the March 14, 2013, Webinar are hereby permitted to make one photocopy of these materials for each of their employees or contractors who listen to the live broadcast of the Webinar. 3

4 Webinar Program Introductions/Administrative Reminders Speaker Presentation 30-Minute Q&A Session Webinar Materials Medical Necessity and Cardiovascular Procedures: What Providers and Payers Need to Know to Protect Their Patients and Bottom Lines...page 5 Presentation by Michael Taylor, M.D., and Mark Miani, M.D., Medical Audit & Review Solutions Selected articles from Report on Medicare Compliance...page 36 Supplemental Materials...page 64 Inpatient-only Procedures, Cardiovascular System, 2013 Medicare Fact Sheet: Cardiac Pacemakers: Complying with Coverage and Documentation Requirements Medicare Quarterly Provider Compliance Newsletter: Cardiac Issues Pub , Medicare National Coverage Determinations Manual Sec Implantable Automatic Defibrillators Sec Percutaneous Transluminal Angioplasty (PTA) Sec Cardiac Pacemakers Webinar Outline Part 1: Michael Taylor, M.D., and Mark Miani, M.D., Medical Audit & Review Solutions What is medical necessity? Cardiovascular audit targets What are the criteria to pass muster? Implantable automatic defibrillators: sec. 20.4, Medicare National Coverage Determinations Manual Percutaneous Transluminal Angioplasty (PTA): sec. 20.7, Medicare NCD Manual Cardiac Pacemakers: sec. 20.8, Medicare NCD Manual Audit Findings Part 2: Questions and Answers 4

5 Medical Necessity and Cardiovascular Procedures: What Providers and Payers Need to Know to Protect Their Patients and Bottom Lines Michael Taylor, M.D. Mark Miani, M.D. An AIS webinar March 14, MARS 3/13/2013

6 What is medical necessity? Social Security Act Sec [42 U.S.C. 1395y] (a) Notwithstanding any other provision of this title, no payment may be made under part A or part B for any expenses incurred for items or services (1)(A) which, except for items and services described in a succeeding subparagraph, are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member MARS 3/14/2013

7 A commercial health plan s definition of medical necessity "Medically Necessary" or "Medical Necessity" shall mean health care services that a Physician, exercising prudent clinical judgment, would provide to a patient for the purpose of evaluating, diagnosing or treating an illness, injury, disease or its symptoms, and that are: In accordance with the generally accepted standards of medical practice; Clinically appropriate, in terms of type, frequency, extent, site and duration, and considered effective for the patient's illness, injury or disease; and Not primarily for the convenience of the patient or Physician, or other Physician, and not more costly than an alternative service or sequence of services at least as likely to produce equivalent therapeutic or diagnostic results as to the diagnosis or treatment of that patient's illness, injury or disease MARS 3/14/2013

8 Evidence-based standards of care: CMS Ruling 95-1 Medicare contractors, in determining what "acceptable standards of practice" exist within the local medical community, rely on: Published medical literature A consensus of expert medical opinion Consultations with their medical staff, medical associations, including local medical societies, and other health experts "Published medical literature" refers generally to scientific data or research studies that have been published in peer-reviewed medical journals or other specialty journals that are well recognized by the medical profession, such as the New England Journal of Medicine and the Journal of the American Medical Association MARS 3/14/2013

9 Cardiovascular audit targets AICDs/ICDs (cardiac defibrillators) Resynchronization devices Pacemakers PTCA / coronary artery stents Renal artery stents Peripheral angioplasty and stents AICD: automatic implantable cardiac defibrillators PTCA: percutaneous transluminal coronary angioplasty MARS 3/14/2013

10 ICDs MARS 3/13/

11 NCD Implantable Automatic Defibrillators Covered Indications: Primary Prevention 1. Cardiac arrest due to ventricular fibrillation Not transient or reversible 2. Ventricular tachyarrhythmia (VT) Sustained Spontaneous or induced by an electrophysiology (EP) study Not associated with an acute myocardial infarction (MI) Not due to a transient or reversible cause NCD: Pub , Medicare National Coverage Determinations Manual MARS 3/14/2013

12 NCD 20.4 Secondary Prevention Criteria Familial or inherited conditions with a high risk of life-threatening VT Coronary artery disease (CAD) with a prior MI, a measured left ventricular ejection fraction (LVEF) 0.35, and inducible, sustained VT or ventricular fibrillation (VF) at EP study. The MI must have occurred more than 40 days prior to defibrillator insertion. The EP test must be performed more than 4 weeks after the qualifying MI. Prior MI and a measured LVEF 0.30 and a QRS duration of >120 milliseconds. Patients must not have: New York Heart Association (NYHA) classification IV; Cardiogenic shock or symptomatic hypotension while in a stable baseline rhythm; Had a coronary artery bypass graft (CABG) or percutaneous transluminal coronary angioplasty (PTCA) within past 3 months; Had an enzyme positive MI within past month (for services on or after Jan. 27, 2005, patients must not have had an acute MI in the past 40 days); Clinical symptoms or findings that would make them a candidate for coronary revascularization; or Any disease, other than cardiac disease (e.g., cancer, uremia, liver failure), associated with a likelihood of survival of less than 1 year MARS 3/14/

13 NCD 20.4 Secondary Prevention Criteria Patients with ischemic dilated cardiomyopathy (IDCM), documented prior MI, NYHA Class II and III heart failure and measured LVEF 35%; Patients with non-ischemic dilated cardiomyopathy (NIDCM) > 9 months, NYHA Class II and III heart failure, and measured LVEF 35%; Patients who meet all current Centers for Medicare & Medicaid Services (CMS) coverage requirements for a cardiac resynchronization therapy (CRT) device and have NYHA Class IV heart failure; MARS 3/14/

14 NCD 20.4 Exclusions All indications must meet the following criteria: a. Patients must not have irreversible brain damage from preexisting cerebral disease; b. MIs must be documented and defined according to the consensus document of the Joint European Society of Cardiology/American College of Cardiology Committee for the Redefinition of Myocardial Infarction; MARS 3/14/

15 NCD 20.4 Indications 3-8 (primary prevention of sudden cardiac death) must also meet the following criteria: Patients must be able to give informed consent; Patients must not have: Cardiogenic shock or symptomatic hypotension while in a stable baseline rhythm; Had a CABG or PTCA within the past 3 months; Had an acute MI within the past 40 days; Clinical symptoms or findings that would make them a candidate for coronary revascularization; Any disease, other than cardiac disease (e.g., cancer, uremia, liver failure), associated with a likelihood of survival less than 1 year;» Ejection fractions must be measured by angiography, radionuclide scanning, or echocardiography;» The beneficiary receiving the defibrillator implantation for primary prevention is enrolled in either a Food and Drug Administration (FDA)-approved category B investigational device exemption (IDE) clinical trial (42 CFR ), a trial under the CMS Clinical Trial Policy (National Coverage Determination (NCD) Manual 310.1) or a qualifying data collection system including approved clinical trials and registries MARS 3/14/2013

16 DOJ ICD Medical Review Guidelines/Resolution Model It must be emphasized that CMS National Coverage Determination ( NCD ) 20.4 governs the payment of ICDs by Medicare. The Resolution Model is not CMS policy. It does not replace, update or interpret NCD 20.4 and should not be relied upon or utilized in any manner to determine whether an ICD is payable by Medicare MARS 3/14/

17 DOJ No Enforcement Categories No MI (Appropriately coded or without difference in payment) Permanent Pacemaker (PPM)/Cardiac Resynchronization Therapy (CRT) Patient qualifies for permanent pacemaker (PPM) and (other than the waiting periods) also qualifies for an ICD Patient qualifies for cardiac resynchronization therapy (CRT) and (other than the waiting periods) also qualifies for an ICD Replacement ICD (includes upgrade from one type of ICD to another) Associated With Technical Violation (Late Stage Implant) Syncope Bridge to Heart Transplant in Listed Candidates Certain Familial and Inherited Conditions Congenital long- or short-qt interval syndromes Hypertrophic cardiomyopathy Arrhythmogenic right ventricular dysplasia/cardiomyopathy Brugada syndrome CPVT (catecholaminergic polymorphic ventricular tachycardia) Cardiac Resynchronization Therapy MARS 3/14/

18 DOJ Category with Enforcement Previously Qualified No MI (the MI was coded in error and there is a difference in the payment) ICD not implanted (coding error) CABG/PTCA not performed (the CABG/PTCA was coded in error and there is a difference in the payment) ICD implants not covered by the NCD or a DOJ Category, but some justification claimed. a) the facility asserts that the MI which preceded the ICD implant was "inconsequential and treatment is unlikely to result in an improved heart function; b) the facility asserts that the revascularization which preceded the ICD implant was "incidental" and unlikely to result in an improved heart function; c) the ICD would have met the criteria of the NCD or a DOJ Category as set forth above, except that there was insufficient documentation as defined above; or d) a case does not fall within I-IV above, but the facility asserts there is a compelling justification for the implant MARS 3/14/

19 Documentation Standards Independent Documentation: Examples include a procedure report, an ECG or monitor strip showing dysrhythmia or test result reports. While a clinical reviewer should use independent documentation to verify documented conditions when possible, it may not always exist in the medical record. In these instances, the clinical reviewer may use corroboration as verification of clinical conditions as outlined below. Corroboration: Typically, significant clinical events that occur in a hospital or when the patient is attended by clinical personnel are documented by multiple care givers in various medical record entries. For instance, if a patient has an episode of VF, one may see documentation from the nurse and/or monitor technician, documentation from the physician and perhaps new orders for a change in clinical care. If there is physician documentation in the patient record and there is no independent documentation of an event, the presence of corroborating documentation by the nurse or other caregiver, or new orders to treat the condition, may be sufficient to confirm that the event/condition occurred. Simple reiteration of clinical findings would not be considered corroborating documentation MARS 3/14/2013

20 Documentation Requirements Documentation Requirements: There is documentation in the medical record that the patient had a cardiac arrest due to VF. Optimally, there will be cardiac monitor recordings (telemetry strips) in the medical record that show the VF. There should be documentation of the arrest in the form of a code report or a similar record. If the arrest occurred outside the hospital (in the field), there will likely be no documentation other than a statement made by the first responders. If there is documentation that the patient required defibrillation by an automatic external defibrillator, it will be considered to be corroborating documentation. If the treating physician documented that the VF was due to a transient or reversible cause (including, but not limited to, electrolyte imbalances, drugs, ischemia, or acidosis), or based upon, for example, findings from a cardiac catheterization report or revascularization procedure note (e.g., revascularization of a culprit lesion ) and this cause was treatable, the clinical reviewer will find that the patient s presentation does not meet NCD Indication # MARS 3/14/

21 PTA MARS 3/14/

22 NCD 20.7 Percutaneous Transluminal Angioplasty (PTA) Treatment of atherosclerotic obstructive lesions In the lower extremities, i.e., the iliac, femoral and popliteal arteries, or in the upper extremities, i.e., the innominate, subclavian, axillary and brachial arteries. The upper extremities do not include head or neck vessels. Of a single coronary artery for patients for whom the likely alternative treatment is coronary bypass surgery and who exhibit the following characteristics:» Angina refractory to optimal medical management;» Objective evidence of myocardial ischemia; and» Lesions amenable to angioplasty. Of the renal arteries for patients in whom there is an inadequate response to a thorough medical management of symptoms and for whom surgery is the likely alternative. PTA for this group of patients is an alternative to surgery, not simply an addition to medical management. Of arteriovenous dialysis fistulas and grafts when performed through either a venous or arterial approach MARS 3/14/

23 NGS LCD L28395 Percutaneous Coronary Intervention Does not replace NCD Lists potential indications for PCI Acute coronary syndrome/mi Significant obstructive coronary artery disease Restenosis of stent or graft Chronic angina Silent ischemia Lists limitation of coverage Performance of diagnostic procedure and interventional procedure on the same day is increasingly the standard of practice. Rationale for delaying intervention must be documented Unless there is new clinical information, a repeat diagnostic catheterization within 3 months is considered not necessary LCD: Local Coverage Determination issued by Medicare contractors NCD: National Coverage Determination issued by Medicare; overrides LCDs MARS 3/14/2013

24 Novitas LCD L32641 Non-coronary vascular stents Does not replace NCD Provides additional details regarding coverage for specific vascular stents Lists limitation of coverage Must document objective symptoms or limitations of function (otherwise procedure is considered preventive and is not covered) Not covered if PTA alone would sufficiently resolve symptoms Devices that carry a current, valid FDA Investigational Device Exemption (IDE) may be covered Detailed indications for renal artery stenting are given Examples Hypertension not controlled despite documented adherence/maximum accepted doses of 3 or more antihypertensive medications and Cross-sectional stenosis of >75% or vessel diameter narrowing of >50% (unless renal venin studies confirm source of hypertension) MARS 3/14/2013 3/13/

25 Pacemakers MARS 3/14/

26 NCD Cardiac Pacemakers Group I: Single-Chamber Cardiac Pacemakers (a) conditions under which single-chamber pacemaker claims may be considered covered without further claims development; and (b) conditions under which single-chamber pacemaker claims would be denied unless further claims development shows that they fall into the covered category or special medical circumstances exist sufficient to convince the contractor that the claim should be paid. Group II: Dual-Chamber Cardiac Pacemakers (a) conditions under which dual-chamber pacemaker claims may be considered covered without further claims development, and (b) conditions under which dual-chamber pacemaker claims would be denied unless further claims development shows that they fall into the covered categories for single- and dual-chamber pacemakers, or special medical circumstances exist sufficient to convince the contractor that the claim should be paid MARS 3/14/

27 NCD 20.8 Nationally Covered Indications A. Nationally Covered Indications Conditions under which cardiac pacing is generally considered acceptable or necessary, provided that the conditions are chronic or recurrent and not due to transient causes, such as acute myocardial infarction, drug toxicity or electrolyte imbalance. (In cases where there is a rhythm disturbance, if the rhythm disturbance is chronic or recurrent, a single episode of a symptom such as syncope or seizure is adequate to establish medical necessity.) 1. Acquired complete (also referred to as third-degree) AV heart block. 2. Congenital complete heart block with severe bradycardia (in relation to age), or significant physiological deficits or significant symptoms due to the bradycardia. 3. Second-degree AV heart block of Type II (i.e., no progressive prolongation of P-R interval prior to each blocked beat. P-R interval indicates the time taken for an impulse to travel from the atria to the ventricles on an electrocardiogram). 4. Second-degree AV heart block of Type I (i.e., progressive prolongation of P-R interval prior to each blocked beat) with significant symptoms due to hemodynamic instability associated with the heart block. 5. Sinus bradycardia associated with major symptoms (e.g., syncope, seizures, congestive heart failure); or substantial sinus bradycardia (heart rate less than 50) associated with dizziness or confusion. The correlation between symptoms and bradycardia must be documented, or the symptoms must be clearly attributable to the bradycardia rather than to some other cause. 6. In selected and few patients, sinus bradycardia of lesser severity (heart rate 50-59) with dizziness or confusion. The correlation between symptoms and bradycardia must be documented, or the symptoms must be clearly attributable to the bradycardia rather than to some other cause MARS 3/14/2013

28 NCD 20.8 Nationally Covered Indications A. Nationally Covered Indications (Cont.) 7. Sinus bradycardia is the consequence of long-term necessary drug treatment for which there is no acceptable alternative when accompanied by significant symptoms (e.g., syncope, seizures, congestive heart failure, dizziness or confusion). The correlation between symptoms and bradycardia must be documented, or the symptoms must be clearly attributable to the bradycardia rather than to some other cause. 8. Sinus node dysfunction with or without tachyarrhythmias or AV conduction block (i.e., the bradycardiatachycardia syndrome, sino-atrial block, sinus arrest) when accompanied by significant symptoms (e.g., syncope, seizures, congestive heart failure, dizziness or confusion). 9. Sinus node dysfunction with or without symptoms when there are potentially life-threatening ventricular arrhythmias or tachycardia secondary to the bradycardia (e.g., numerous premature ventricular contractions, couplets, runs of premature ventricular contractions or ventricular tachycardia). 10. Bradycardia associated with supraventricular tachycardia (e.g., atrial fibrillation, atrial flutter, or paroxysmal atrial tachycardia) with high-degree AV block which is unresponsive to appropriate pharmacological management and when the bradycardia is associated with significant symptoms (e.g., syncope, seizures, congestive heart failure, dizziness or confusion). 11. The occasional patient with hypersensitive carotid sinus syndrome with syncope due to bradycardia and unresponsive to prophylactic medical measures. 12. Bifascicular or trifascicular block accompanied by syncope that is attributed to transient complete heart block after other plausible causes of syncope have been reasonably excluded. 13. Prophylactic pacemaker use following recovery from acute myocardial infarction during which there was temporary complete (third-degree) and/or Mobitz Type II second-degree AV block in association with bundle branch block. 14. In patients with recurrent and refractory ventricular tachycardia, "overdrive pacing" (pacing above the basal rate) to prevent ventricular tachycardia MARS 3/14/2013

29 Nationally Noncovered Indications Conditions which, although used by some physicians as a basis for permanent cardiac pacing, are considered unsupported by adequate evidence of benefit and, therefore, should not generally be considered appropriate uses for single-chamber pacemakers in the absence of the above indications. Contractors should review claims for pacemakers with these indications to determine the need for further claims development prior to denying the claim, as additional claims development may be required. The object of such further development is to establish whether the particular claim actually meets the conditions in a) above. In claims where this is not the case or where such an event appears unlikely, the contractor may deny the claim. 1. Syncope of undetermined cause. 2. Sinus bradycardia without significant symptoms. 3. Sino-atrial block or sinus arrest without significant symptoms. 4. Prolonged P-R intervals with atrial fibrillation (without third-degree AV block) or with other causes of transient ventricular pause. 5. Bradycardia during sleep. 6. Right bundle branch block with left axis deviation (and other forms of fascicular or bundle branch block) without syncope or other symptoms of intermittent AV block). 7. Asymptomatic second-degree AV block of Type I unless the QRS complexes are prolonged or electrophysiological studies have demonstrated that the block is at or beyond the level of the His bundle (a component of the electrical conduction system of the heart). 8. Asymptomatic bradycardia in post-myocardial infarction patients about to initiate long-term beta-blocker drug therapy MARS 3/14/

30 Audit Findings MARS 3/14/

31 Examples: CERT Medical Findings Coronary Angiography procedure reasonable in light of continued angina. Inpatient admission not reasonable & necessary: elective procedure; no untoward post-op events. All could have been accomplished as outpatient services. Percutaneous Coronary Intervention beneficiary admitted for elective heart catheterization following positive stress test showed 3 blockages and PTCA was done x 3 at that time. There were no complications and the beneficiary was discharged the following day. documentation does not support that inpatient admission is reasonable and necessary. Peripheral Angioplasty Lower Extremity beneficiary presented for elective PTCA of left lower extremity secondary to severe pain in right leg documentation does not support that inpatient admission is reasonable and necessary MARS 3/14/2013

32 Example: CERT Medical Findings AICD generator change and lead replacement Agree with procedure replacement of AICD total system per CERT Medical Director review. This procedure is not on the Addendum E inpatient-only list. Dual chamber pacemaker for bradycardia Inpatient admission was not reasonable and necessary. Procedure, dual chamber permanent pacemaker, does not meet NCD 20.8 Cardiac Pacemakers, effective 4/30/2004 criteria no rationale is documented by the inserting MD as to why a dual rather than a single chamber pacemaker was inserted. The beneficiary was in hospital observation and did not require an inpatient admission for procedure when already at the facility in hospital observation and the procedure can be done as an outpatient MARS 3/14/2013

33 First Coast (Florida) Prepayment Review Topic Principle Error First Coast Denial Rate AICD * DRG 226, 227 Pacemaker DRG 242,243,244 PCI * DRG 247, 251, 253 Other vascular procedures * DRG 254 Other circulatory OR procedures * DRG 264 Cardiac cath w/o MI * DRG 287 Procedure did not meet NCD criteria Procedure did not meet NCD criteria Inpatient setting not medically necessary 52% Inpatient setting 48% Procedure not necessary Inpatient setting not medically necessary Inpatient setting not medically necessary 19% - 36% 33%-51% 16% - 34% 23% (RAC denials 28%) * Inpatient DRG subject to prepayment review, generally 60% of claims are reviewed 19% 21% MARS 3/14/2013

34 MARS Audit Experience Procedure Lack of Medical Necessity for Inpatient Setting Pacemaker insertion, nonemergent 84% Pacemaker generator replacement only 92% AICD Insertion, nonemergent 72% AICD generator replacement only 86% PTCA +/- stent, nonemergent 68% Renal angioplasty 81% Lower extremity angioplasty 77% Dialysis access procedure (initial) 88% Dialysis access procedure (revision) 90% Targeted audit based on claim and practice pattern analysis MARS 3/14/2013 3/13/

35 Contact Information Michael Taylor, MD President & CEO Medical Audit & Review Solutions Office: (855)-321-MARS Direct: (484) Mobile: (256) MARS 3/14/2013

36 Atlantic Information Services, Inc. Hospital Settles Stent False Claims Case; More Audits Predicted as Standards Evolve Reprinted from the Jan. 14, 2013, issue of AIS s weekly newsletter Report on Medicare Compliance. Call (800) for more information. In a medical-necessity case, an Ohio hospital and a medical group have settled false claims allegations that they billed Medicare for implanting stents in patients whose arteries weren t blocked enough to need them, the Department of Justice announced Jan. 7. EMH Regional Medical Center (EMH), a nonprofit health system in Lorain County, has agreed to pay $3,863,857 and North Ohio Heart Center Inc. (NOHC), an independent physician group, will pay $541,870. The defendants did not admit wrongdoing in the settlement and there is no corporate integrity agreement. Challenging the medical necessity of treatment is the next frontier of audits and enforcement, experts say. The cardiac arena is ripe for it in light of recent guidance from specialty societies that is reshaping the calculus of diagnosis and intervention. In certain cases, the literature doesn t show people do any better with stents than medication, but physicians and hospitals often reap financial rewards for implanting stents, says Evan Pollack, M.D., national medical director for Medical Audit & Review Solutions in West Chester, Pa. In light of the tension between money, medicine and audits, now is the time for increased vigilance by cardiology leadership on a hospital-by-hospital level. If cardiologists and hospital compliance staff don t take a proactive role to ensure the clinical appropriateness of their practices through robust quality monitoring and peer review, it seems inevitable that external audits and enforcement authorities will be intervening, adds Michael Taylor, M.D., president of Medical Audit & Review Solutions. In the Ohio settlement, the government alleges that EMH and NOHC billed Medicare for coronary angioplasty and stent placement procedures that were not reasonable and necessary for the diagnosis or treatment of illness from January 1, 2001, through November 24, DOJ added in a press release that the patients had heart disease but their blood vessels were not sufficiently occluded to require the procedures. Cleveland attorney Stephen Sozio, who represents EMH, tells RMC that the settlement reflects a relatively small percentage of the Part A dollars received by the hospital for stent placements, which were ordered by the physicians. The hospital is not the entity making medical necessity determinations, says Sozio, who is with Jones Day. At the time, he notes, stenting was more popular than it is today. The hospital, which now employs many of the NOHC physicians, took steps to ensure quality of care, Sozio says. For example, it does regular external peer review in addition to internal peer review, he says. An external interventional cardiologist will do an overread on a sample of cases to ensure quality standards are being met, he says. The complaint was initially filed by a whistleblower, who alleged more complex misdeeds, although Sozio says the government did not intervene in those allegations. The whistleblower, Kenny Loughner, was formerly the manager of EMH s catheterization and electrophysiology lab. Patients came to the lab for angiograms, which use X-rays to identify blockages in the blood vessels serving the heart (arteries), and angioplasties, a procedure to clear them and restore blood flow by inflating a balloon and/or implanting stents. Both procedures require anesthesia and are performed by cardiologists. Cardiologists generally Copyright 2013 by Atlantic Information Services, Inc. All rights reserved. Reproduction by any means including photocopy, FAX or electronic delivery is a violation of federal copyright law punishable by fines of up to $150,000 per violation. 36

37 Atlantic Information Services, Inc. approach angiograms prepared to do an angioplasty if necessary, because the patient is already sedated and a cardiac catheter is in place. The complaint alleged that the hospital and cardiology group scheduled angiograms without planning to perform angioplasties. As a result, patients with blockages came back for the angioplasties. In some cases, the providers allegedly would insert fewer than the necessary number of stents, leaving blocked or occluded blood vessels to be stented at a later date. This practice led the defendants to routinely schedule serial angioplasties, the usual frequency between procedures being one to three weeks later, the complaint said. As a result, the defendants overcharged Medicare, the complaint alleged. Cardiac Cases Are Big Bucks for Hospitals Cardiac cases are bread and butter for many hospitals, and any pattern of questionable procedures makes them vulnerable to false claims lawsuits, says Washington, D.C., attorney Andy Ruskin, with Morgan Lewis and Bockius LLP. Cardiology is also the centerpiece of Medicare pay-for-performance programs, he says. Two of the three conditions that trigger payment denials for readmissions are heart related acute myocardial infarction and congestive heart failure. And CMS s value-based purchasing program, which links Medicare payments to performance, puts a premium on cardiac measures, Ruskin says. Two of the 12 clinical process-of-care measures address treatment for acute myocardial infarction. Against the backdrop of payment for outcomes, auditors are focusing on the medical necessity of implanting automatic implantable cardiac defibrillators (RMC 10/15/12, p. 1), stents and pacemakers and performing diagnostic procedures. Taylor breaks down the problem areas of cardiac procedures into fraud and waste/ abuse: Fraud: One of the first warning signs may be a cardiologist, cardiology group or hospital with practice patterns far outside their peers, he says. This is reflected in the data, such as the total number of interventions performed per patient and patterns of appropriateness whether a different intervention, such as a bypass, would have been preferable, or whether the procedure was superior to medication. In the process, auditors should consider the context (e.g., the geographic area and the demographics of the patient population). If you see a pattern of behavior in the data that suggests highly unusual billing practices, that is often a compelling reason to investigate further with review of medical records and images by a qualified cardiologist, Pollack says. Whether there has been fraud doesn t turn on legitimate differences of opinion among cardiologists but rather patterns of intentional misrepresentation, Taylor adds, such as angiograms that don t support the need for stents because minimal disease is consistently interpreted as high-grade stenosis (abnormal narrowing in blood vessels). Waste and abuse: This is a far bigger realm than fraud in terms of dollars, Taylor says. He notes there is somewhat of a divergence between physician practice patterns and the medical society consensus statements about what benefits patients. In the past 18 months, the number of consensus statements on coronary artery disease and intervention is impressive, says Mark Miani, M.D., chief medical officer for Medical Audit & Review Solutions. They are redefining which patients should undergo catheterization, when patients with blockages would benefit from immediate intervention, and when it s valuable to perform angioplasty to make a diagnosis, Miani says. He cites a November 2012 report by Copyright 2013 by Atlantic Information Services, Inc. All rights reserved. Reproduction by any means including photocopy, FAX or electronic delivery is a violation of federal copyright law punishable by fines of up to $150,000 per violation. 37

38 Atlantic Information Services, Inc. the Society for Cardiovascular Angiography and Interventions in the journal Catheterization and Cardiovascular Interventions; a May 2012 report by the American College of Cardiology Foundation Appropriate Use Criteria Task Force on diagnostic catheterization in the Journal of the American College of Cardiology; and 2011 practice guidelines on percutaneous coronary intervention from the American Heart Association and American College of Cardiology Foundation Task Force. Cardiologists have a number of authoritative references guiding their choices, Miani says. Because of the recent consensus in the field, Taylor suggests that hospitals and cardiologists seize the opportunity to exercise authority over peer review. If not, you will see more aggressive auditing and audits moving from clear cases of fraud to waste and abuse, Taylor says. Peer Review Has Its Demons But peer review has its own demons. When competing cardiology groups practice at the same hospital, there may be problems with perceptions of fairness, Taylor says. It s up to compliance, legal and cardiology leadership to put business rivalries aside, he says. This is about ensuring patient safety and appropriateness of care. Hospitals that don t take steps to police standards of care will be hospitals that rank poorly in measures of quality and cost effectiveness, and as the literature and practice standards become more sophisticated, they will find themselves falling behind in these measures. And with the myriad acquisitions under way, it s a good idea for hospitals to consider case reviews to ensure the practice they are buying has been practicing a defensible standard of care. In a statement, John Schaeffer, M.D., president of North Ohio Heart Center, said it settled only to move on. It s very important to note that this settlement is only about whether or not Medicare covered some procedures we did six to ten years ago that were considered cutting edge at the time, he said. As the physicians on the ground when these decisions were made and the procedures were performed, we felt confident we were making the correct choices for our patients, adding it has passed every Medicare audit ever done whether regarding stent procedures, or any other service. Schaeffer notes that EMH for three years has received the HealthGrades Cardiac Care Excellence Award and is ranked in the top 5% nationally for cardiac care. Cardiac Care Triggers Many Settlements The Ohio settlement is at least the fourth one with a hospital over unnecessary cardiac care. In 2003, Redding Medical Center in California paid the Department of Justice $54 million to settle a false claims lawsuit over allegations that two cardiac surgeons performed medically unnecessary cardiac catheterizations and bypass surgeries. Redding s then-parent, Tenet Healthcare Corp., made a deal with OIG to prevent the hospital s Medicare exclusion by selling Redding. In 2011, Peninsula Regional Medical Center in Salisbury, Md., agreed to pay $1.8 million to resolve allegations that it was aware of, but failed to take action to prevent medically unnecessary cardiac stent procedures by John R. McLean, formerly a cardiologist with privileges at PRMC, the U.S. Attorney s Office said (RMC 8/15/11, p. 1). A jury convicted McLean of one count of health care fraud and five counts of making false statements relating to health care fraud matters in connection with the medically unnecessary stents he implanted in Copyright 2013 by Atlantic Information Services, Inc. All rights reserved. Reproduction by any means including photocopy, FAX or electronic delivery is a violation of federal copyright law punishable by fines of up to $150,000 per violation. 38

39 Atlantic Information Services, Inc. patients at Peninsula Regional Medical Center (RMC 8/1/11, p. 3). He was sentenced to eight years in prison and ordered to pay fines and restitution of about $1.1 million. In 2010, St. Joseph Medical Center in Towson, Md., paid $22 million to settle a false claims case over alleged Stark violations and medically unnecessary stent implant surgery (RMC 11/15/10, p. 1). In that case, the Maryland Board of Physicians yanked the license of the surgeon, Mark Midei, M.D., who played a pivotal role in the case. Contact Ruskin at aruskin@morganlewis.com, Taylor at Michael.taylor@marsauditor. com, Pollack at evan.pollack@marsauditor.com, Sozio at sgsozio@jonesday.com and Miani at mark.miani@marsauditor.com. G ICD Medical Necessity Jam Continues as Hospitals Weigh DOJ Settlement Method Reprinted from the Oct. 15, 2012, issue of AIS s weekly newsletter Report on Medicare Compliance. Call (800) for more information. Hospitals swept up in the false claims investigation of implantable cardiac defibrillators (ICDs) are now deciding whether to review their claims under terms set forth by the Department of Justice (DOJ), which may let them off the hook for certain cases that fall outside Medicare coverage guidelines. While DOJ s unusual approach has brought some clarity to past ICD cases, hospitals still face the compliance challenge of current and future implants that don t fit squarely in the national coverage determination (NCD) for ICD implants, but arguably are medically necessary, lawyers say. The two-year-old medical necessity investigation of ICDs, which are small electronic devices that shock the heart back to a normal rhythm, focuses on hospital claims that don t comply with Medicare s national coverage decision for ICDs (20.4). Initially, DOJ took the position that certain ICD implants violated the False Claims Act. But after months of discussions with lawyers, CMS, medical experts and consultants about gray areas in ICD medical necessity and terminology, DOJ lawyers adopted a more nuanced approach to the enforcement action (RMC 8/6/12, p. 1). What emerged is a resolution model that s intended to promote consistency across hospitals and reviewers as they classify retrospective ICD cases into different categories, says Kevin Cornish, national director of the healthcare dispute, compliance and investigation practice at Navigant Consulting. There are six categories in the resolution model that have differing levels of potential treatment by DOJ, he says (see chart, p. 42). DOJ has asked hospitals in the dragnet to self-audit ICD cases that were previously flagged and report back how many fell into each category in the resolution model, said Cornish, who spoke Oct. 1 at the Fraud and Compliance Forum co-sponsored by the American Health Lawyers Association and Health Care Compliance Association in Baltimore. There s no deadline for reporting to DOJ at this time, although sooner is better, he said. The resolution model is only one dimension of a larger problem facing hospitals caught in the crossfire of the NCD s limitations, physicians surgical recommendations and beneficiary needs. Whether or not they are DOJ targets, hospitals that implant ICDs still have to find a way Copyright 2013 by Atlantic Information Services, Inc. All rights reserved. Reproduction by any means including photocopy, FAX or electronic delivery is a violation of federal copyright law punishable by fines of up to $150,000 per violation. 39

40 Atlantic Information Services, Inc. to comply with the NCD or work around it in the most compliant manner, which includes having procedures to find out when surgeons conclude the patient needs the device outside the NCD and how to bill for it in a way that reduces future false claims allegations and perhaps will allow reimbursement, if appropriate, lawyers say. You may think of compliance as doing what the government says, but it s not the best characterization of compliance. It s to do what is right, says Minneapolis attorney David Glaser, with Fredrikson & Byron. In the current legal climate, it s reasonable for a hospital to implant a medically necessary device and scary not to. Ultimately it s a choice you have to make. You have a duty to fight for the rights of your patients. Medicare coverage for ICD implants is restricted to nine covered indications. They are divided into indications for: (1) Primary prevention, which means the patient did not experience prior episodes of an irregular heartbeat but is still at elevated risk for sudden death due to cardiac arrest, and (2) Secondary prevention, which means the patient had prior episodes of an irregular heartbeat. Only the indications for primary prevention three through nine have timing requirements. Medicare won t pay for a patient s ICD implant within 40 days of an acute myocardial infarction (MI) or within 90 days of a coronary artery bypass graft (CABG) or percutaneous transluminal coronary angioplasty (PTCA). The false claims investigation focused mostly on the timing requirements. The resolution model has six categories and hospitals face no liability for the first two. The first category includes cases that fit comfortably in the NCD. The second category DOJ s noenforcement category includes eight scenarios that are not clearly defined by the NCD but are addressed in other documents, such as medical literature, or the ICD Registry (RMC 10/31/11, p. 1). Hospitals will not repay anything in these two categories because of the compromise with DOJ. DOJ Cuts Slack on Pacemaker/ICD Combo For example, although it s common for patients to require both pacemakers and ICDs, the NCD won t cover an ICD unless it s implanted at least 40 days after a patient s myocardial infarction (to give the patient s body a chance to heal on its own). But the myocardial infarction patients may get a pacemaker before the expiration of the 40-day timing window. Patients who require both a pacemaker and ICD would then endure two separate surgeries 40 days apart to be covered under the NCD, Cornish says. Because surgeons are loathe to open a patient s chest twice solely to comply with the 40-day rule, they often implant pacemakers and ICDs at the same time, he says. DOJ is saying we understand the logic behind it and agreed to take these cases off the false claims table, he explained. Hospitals also won t pay damages for technical violations (late-stage implants). DOJ created a grace period for ICDs implanted inside the NCD s 40-day waiting period after myocardial infarctions and 90-day waiting periods after CABGs and PTCAs, Cornish said. If it s more than 30 days after your myocardial infarction, you are OK, he says. Hospitals also get a pass on ICD cases performed more than 67 days after CABGs or PTCAs, Cornish said. Then there are the four categories of ICD cases in the resolution model that are subject to repayments and penalties. They include implants that are not medically indicated and coding errors. The resolution model is an advancement considering where this investigation began, but it is not necessarily the right answer, Cornish said. Every claim for which there is a repayment is Copyright 2013 by Atlantic Information Services, Inc. All rights reserved. Reproduction by any means including photocopy, FAX or electronic delivery is a violation of federal copyright law punishable by fines of up to $150,000 per violation. 40

41 Atlantic Information Services, Inc. technically considered a false claim. In my experience based on review of hundreds of ICD cases, it s extremely rare to see a case that was not done for a clear, medically justifiable reason or that physicians and hospitals were not making a good-faith effort to attempt to comply with the NCD. Cornish emphasized that hospitals outside the investigation shouldn t look at the resolution model as a tool to interpret the NCD. It is only a possible method for settlement between DOJ and the affected hospitals in the investigation. DOJ specifically says that the resolution model is not CMS policy and doesn t update or replace the NCD. However, it s an open question whether hospitals that have not been hit by DOJ can use the resolution model to evaluate their past ICD cases, Cornish said. Moving forward, all hospitals should improve their oversight of ICD medical necessity and nail down when patients are eligible for implants under the NCD. But that can be an uphill battle because physicians don t always see things the same way. For example, the NCD s first covered indications are.(1) cardiac arrest due to ventricular fibrillation (VF) that is not due to a transient or reversible cause, and (2) documented sustained ventricular tachyarrhythmia (VT), either spontaneous or induced by an electrophysiology (EP) study, and not associated with an acute myocardial infarction and not due to a transient or reversible cause. Those three phrases sustained ventricular tachycardia, associated with and transient and reversible cause present the lion s share of problems in the interpretation of whether an ICD case does or does not comply with the NCD, he said, and yet they are not defined in the NCD. Without a common understanding within an organization of what things qualify for those words, it is impossible to be consistent in knowing how an ICD case should be interpreted by the NCD. Suppose a man goes into cardiac arrest while at work and is brought to the hospital by ambulance. The paramedic indicates there was ventricular tachycardia, which most cardiac surgeons would say meets a secondary indication for an ICD implant under the NCD. But maybe the root of the tachycardia is an electrolyte imbalance or a blocked artery, which are transient and reversible. If it is a plumbing problem, it is generally transient and reversible and therefore an ICD is not necessary because ICDs are for electrical problems, Cornish said. The thinking and decision making in the medical record has to make a clear distinction that the basis for the ICD implant is electrical and not plumbing. Establish a System for Screening ICDs It s important for hospitals to establish standards to evaluate the merits of ICD cases that are outside the NCD because this investigation and others like it (e.g., stents and kyphoplasty) underscore how hospitals are held accountable for their medical staff s medical decision making, Cornish said. Hospitals should demonstrate an affirmative involvement in the process so they cannot be accused of being asleep at the wheel while a physician proceeded to provide services that are not consistent with the beliefs of the hospital, he said. However, if the hospital and physician believe an ICD implant is medically necessary despite clashing with the NCD, hospitals can contact their MAC and send letters with the claims, making sure Medicare is aware that the hospital colored outside the lines. If the claims are denied, hospitals can appeal to HHS administrative law judges and hopefully get the claim paid that way, Cornish says. The primary goal is to not incur false claims risk for future ICD cases. While there s no clear guidance on how to bill cases that aren t within the four corners of the NCD, communication and documentation can potentially help provide proof that a provider was not attempting to bill a false claim. Contact Cornish at kcornish@navigant.com. G Copyright 2013 by Atlantic Information Services, Inc. All rights reserved. Reproduction by any means including photocopy, FAX or electronic delivery is a violation of federal copyright law punishable by fines of up to $150,000 per violation. 41

42 Atlantic Information Services, Inc. DOJ Blueprint for Calculating Hospital Liablity For Implantable Cardiac Defibrillators (ICDs) The Department of Justice has developed a resolution model to pave the way for settlement of its investigation into hospital claims for implantable cardiac defibrillators (ICDs). The excerpt below lists six categories of ICD cases, and how they may be treated by the government if hospitals follow through with the resolution model. DOJ Resolution Model Summary Chart DAMAGES Single Damages 1 X Multiplier 2 I. Covered by the NCD and/or Excluded from this Investigation: Covered Under NCD Indication #1 Covered Under NCD Indication #2 Covered Under a Clinical Trial No Medicare Payment NA NA NA NA NA NA NA NA II. DOJ No Enforcement Categories (Buckets): No MI (Proper Code or No Payment Change) Pacemaker CRT-D Replacement Technical Violation (Late Stage Implants) Syncope Bridge to Transplant NCD Indication #3 (Familial/Inherited Conditions) None None None None None None None None None None None None None None None None III. DOJ Category - With Enforcement: Previously Qualified YES YES IV. Coding Error (Without Repeating Patterns): No MI (Coding Error With Payment Difference) No ICD (Coding Error) No CABG/PTCA (Coding Error) V. Not Covered By NCD or DOJ Categories YES YES VI. Not Medically Indicated YES YES 1 Single damages will be the difference between what the facility was paid on each claim and what the facility should have been paid on each claim without the ICD code(s) and related charges ("damages"). It will be necessary to assign the correct DRG in order to calculate this difference. Outlier payments may also need to be recalculated. 2 The multipliers in this Resolution Model will be determined during discussions with each facility and will be based upon many factors, including, but not limited to, the categories above, patient harm, patterns, compliance efforts and effectiveness, ICD registry submissions and knowledge evidence ( multiplier ). Go to the From the Editor page on RMC s password-protected page at to access the complete Department of Justice ICD Investigation Medical Review Guidelines/Resolution Model. YES YES YES YES YES YES Feds Turn Corner in ICD Investigation; Hospital Liability Divided into Categories Reprinted from the Aug. 6, 2012, issue of AIS s weekly newsletter Report on Medicare Compliance. Call (800) for more information. The Department of Justice is apparently about to take a big step forward in its national false claims investigation of Medicare billing for implantable cardiac defibrillator (ICD) procedures. After a year of debating the medical-necessity parameters of ICD implants, DOJ now has a blueprint for determining hospital liability, according to attorneys familiar with the case. Some ICD cases will be home free, while others will be the subject of repayment plus interest or triple damages, they say. Copyright 2013 by Atlantic Information Services, Inc. All rights reserved. Reproduction by any means including photocopy, FAX or electronic delivery is a violation of federal copyright law punishable by fines of up to $150,000 per violation. 42

43 Atlantic Information Services, Inc. There has been a breakthrough, one attorney says. As a result, DOJ will soon send letters to hospitals with instructions for resolving their potential ICD overpayments. Hospitals will be asked to self-audit ICD procedures using an audit tool the federal government developed in collaboration with defense counsel and Navigant Consulting, attorneys say. After the audits are completed, hospitals will report back to DOJ, which will spot check their findings. Then settlement talks presumably will begin, the attorneys say. They want to move forward and close these cases that have been pending for close to two years, says another attorney. The U.S. Attorney s Office for the Southern District of Florida, which is spearheading the case, had no comment. The investigation of ICDs, which are small electronic devices that shock the heart back to a normal rhythm, focuses on hospital claims that ran afoul of Medicare s national coverage decision (NCD 20.4). Initially, DOJ took the position that noncompliant billing for ICD implantation is within the realm of the False Claims Act, but it paused to consider that perhaps medical necessity in this area is not always black and white. There will be cases that literally or technically are outside of the NCD but the government will not be demanding a repayment because there are just some scenarios that clearly were not contemplated by the authors of the NCD, one attorney says. The NCD for ICDs describes nine categories covered indications that trigger Medicare payment (RMC 10/31/11, p. 1). They are divided into indications for primary prevention, which means the patient did not experience prior episodes of an irregular heartbeat but is still at elevated risk for sudden death due to cardiac arrest, and secondary prevention, which means the patient had prior episodes of an irregular heartbeat. Only the indications for primary prevention three through nine have timing requirements. Medicare won t pay for a patient s ICD implant within 40 days of an acute myocardial infarction (MI) or within three months of a coronary artery bypass graft (CABG) or percutaneous transluminal coronary angioplasty (PTCA). For example, Medicare covers ICDs for patients with non-ischemic dilated cardiomyopathy and for patients with coronary artery disease with a documented prior MI, as long as acute MI didn t occur in the previous 40 days. The idea is to first give patients time to recover from the heart attack to determine whether the patient really is at elevated risk for cardiac arrest. Hospitals May Not Be as Vulnerable If hospitals billed Medicare for ICD procedures, they may be at risk in the national false claims enforcement action. But they may not take as big a hit as was feared when DOJ first sent out subpoenas and civil investigative demands, lawyers say. There are some different categories where the hospitals and doctors have good things to say about the medical necessity of the decision to implant. And the government has now acknowledged the decision to implant and no demand for money will be made in those cases, one attorney says. Some categories of ICD cases that are not NCD compliant won t face any repayment, one attorney says. For example, a patient may need a pacemaker or a pacemaker replacement or the surgeon recommends a pacemaker ICD combination. Although the cardiac patient may clearly be entitled to the pacemaker, a recent acute myocardial infarction places him outside Copyright 2013 by Atlantic Information Services, Inc. All rights reserved. Reproduction by any means including photocopy, FAX or electronic delivery is a violation of federal copyright law punishable by fines of up to $150,000 per violation. 43

44 Atlantic Information Services, Inc. the reach of the ICD because of the timing requirement. Some scenarios were clearly not contemplated by the authors of the NCD, he says. For that reason, DOJ is expected to let these cases off the hook, the attorney says. Timing Requirement Can Be a Problem But it doesn t look like the government will go easy when hospitals billed in violation of the timing requirement in other circumstances, the attorney says. For example, some patients are previously qualified. They are entitled to ICDs under the NCD s primary indicators but subsequently have an acute MI, CABG or PTCA while deciding whether to proceed or waiting to schedule surgery. That essentially restarts the clock on Medicare coverage for their ICD surgery 40 days from their MI or 90 days from their CABG/PTCA. There had been hope that DOJ would include that as a category with zero damages, but rumor is those cases will not be included in the zero-damages category, the attorney says. They will be treated in a category for which the government will seek some form of payment. The attorney doesn t think that makes much sense. If patients were qualified on Jan. 1 but had an intervening event, such as an acute MI, there s no reason to think they will be in better shape during the 40-day waiting period. ICDs Also a Focus of Compliance Review ICD noncompliance also recently made its first appearance in a Medicare compliance review, although it was the outpatient version and the DOJ investigation targets inpatient ICDs. Still, the NCD applies, and the HHS Office of Inspector General determined that Tampa General Hospital incorrectly billed Medicare for one outpatient surgery because the beneficiary had a PTCA within 3 months of the ICD implantation, OIG stated, resulting in a $25,583 overpayment. Tampa General Hospital has edits in place to ensure ICD claims are screened before submission. That job falls to the Medical Bill Audit Department, which consists primarily of clinicians, say Ron Peterson, chief compliance officer, and Stephen Harris, director of reimbursement. The edit is like a marker. It identifies these cases so they are reviewed, Harris tells RMC. We still have to write them off from time to time because they don t meet criteria. At the same time, the hospital and its physicians are taking more time to evaluate the medical necessity of the procedure before it s performed, Harris says. The ICD investigation has raised the bar on the criteria before a device can be implanted. And for its part, the government has become more aware that this is not black and white. Treatment of patients is so dynamic and doesn t always fit into a regulation. You will see this evolve. Generally, to avoid claims denials or false claims for ICDs and similar procedures, it s a good idea for hospitals to study relevant NCD and local coverage decisions, the attorney says. There is a large but not infinite number of NCDs in the NCD manual, and it would be a good move for hospitals to figure out which apply to them and make sure they are trained and knowledgeable about them, the attorney says. If hospitals decide to bill for an ICD or other procedure outside the scope of the NCD, do it in a transparent way that puts the Medicare administrative contractor on full notice, he says. There are some good arguments that something outside the NCD is still covered by Medicare and you have to bill it to preserve your appeal argument, but you have to do it in a transparent way. Or don t charge for it. He emphasizes that the NCD applies to professional services as well, so if the procedure isn t covered, physicians can t bill for it either. G Copyright 2013 by Atlantic Information Services, Inc. All rights reserved. Reproduction by any means including photocopy, FAX or electronic delivery is a violation of federal copyright law punishable by fines of up to $150,000 per violation. 44

45 Atlantic Information Services, Inc. Site of Service for Cardiovascular Surgery Tops RAC Findings of Overpayments Reprinted from the June 18, 2012, issue of AIS s weekly newsletter Report on Medicare Compliance. Call (800) for more information. Admissions for cardiovascular procedures that could have been performed on an outpatient basis top the list of errors identified by three of four recovery audit contractors in CMS s recent report on overpayments. Hospitals will have an uphill battle on appeal if there s a disconnect between physician decisions to admit and the strength of their documentation. Meanwhile, other challenges to inpatient admissions are emerging. For example, there s confusion around billing for cancelled surgeries, and some auditors don t consider elective surgeries to be serious enough for inpatient admission, even though they sometimes appear on the Medicare inpatient-only list, says Evan Pollack, M.D., senior medical director of regulatory affairs at Executive Health Resources in Newtown Square, Pa. In case there was even a smidgeon of a doubt that medical necessity was the top RAC target, the new CMS summary on the leading errors detected by the RACs has eliminated it. Pollack thinks cardiovascular procedures are targeted because they are high-dollar, short-stay events. Most patients are discharged the next day, he says. Coronary stents the second most audited DRG under the recovery audit program is one type of cardiovascular procedure where the admission necessity is questioned, Pollack says. Others include pacemakers, defibrillators and peripheral artery stents (for legs or kidneys), he says The RACs are not contending the procedure is medically unnecessary, at least in this context. Only the site of service is at issue here. Physician documentation is always a sore spot in medical necessity compliance. Pollack says physicians may write inpatient orders and then, in contrast, paint a fairly rosy picture about the patient s prognosis. After the procedure is over, the physician may write, I intend to discharge the patient the following morning. The problem here, Pollack says, is that the physician is stating up front that risk of an adverse event is pretty low because he is predicting the patient will not be there the next morning. If that s what he really means, the hospital should consider making the patient an outpatient. But Pollack doubts physicians are thinking in terms of billing one site of service or another because that s not their priority. Hospitals should explain to physicians the importance of clarity in documenting the reason for admitting patients, including the presence of severe underlying conditions or bad outcomes if sent home. Whichever way it goes inpatient or outpatient documentation has to be consistent with what they have ordered, he says. RACs won t necessarily look too deeply at the documentation to parse out the physician s words or intent, Pollack says. They will focus on the MS-DRG and length of stay and may be quick to issue a denial, so the documentation has to help support the appeal if it s warranted, he says. Elective Surgeries Can Cause Problems Hospitals should also be on alert to RAC overpayment determinations for elective surgeries, Pollack says. There is some misconception that the description elective means less serious and therefore automatically appropriate for the outpatient side. But just because a procedure is elective doesn t mean it shouldn t be performed on an inpatient basis, he says. Even some inpatient-only procedures are dubbed elective. But procedures not on the inpatient-only list may also warrant admission, even when patients don t exhibit what are Copyright 2013 by Atlantic Information Services, Inc. All rights reserved. Reproduction by any means including photocopy, FAX or electronic delivery is a violation of federal copyright law punishable by fines of up to $150,000 per violation. 45

46 Atlantic Information Services, Inc. perceived as severe signs and symptoms, Pollack says. For example, patients may be admitted to the hospital by their private-practice physicians when their unstable angina doesn t respond to medication. The physician orders a cardiac catheterization and then a stent is placed. It s still classified as elective because the patient didn t come in through the emergency department, Pollack says, but inpatient care may be necessary. However, more cardiovascular procedures can be performed on an outpatient basis as technology advances. For example, stent placement through a radial artery in the wrist instead of a femoral artery in the leg is gaining currency, Pollack says. Using the wrist artery reduces the risk for bleeding, especially with antiplatelet IV medication, which makes outpatient surgery more viable, he says. You can look at those patients on a case-by-case basis, he says. As always, the decision to admit a patient is a complex medical judgment which can be made only after the physician has considered a number of factors, including the patient s medical history and medical needs, the types of facilities available, the hospital s bylaws and admissions policies, and the risk of something bad happening to the patient if he or she is sent home, according to Sec. 10 of the Medicare Benefit Policy Manual. Some Medicare administrative contractors have their own guidance. For example, WPS Medicare recently issued a new local coverage determination (L32222) on acute inpatient services versus observation services. Hospitals also may be struggling with the proper way to bill for admissions when surgeries are cancelled, according to a February teleconference held by WPS Medicare. Surgeries may be cancelled for two reasons, according to Pollack: (1) Patients make mistakes, such as eating or taking aspirin before surgery. In this case, the hospital sends in a V code for a cancelled surgery and can bill for any services that were provided during that time, he says, including lab work. (2) Hospitals cancel surgeries. They may have overbooked the operating room or the surgeon had an emergency bypass, for example. The case is left open, the patient is treated as a leave of absence and when the patient returns for surgery it is bundled into the cancelled day, so the hospital gets only one DRG payment, he says. Patients may require inpatient admission despite cancelled surgeries, Pollack says. Maybe they are scheduled for back surgery, but they took aspirin so surgery was nixed for now. However, their pain is so severe that they are admitted to treat the medical back pain with other modalities. Contact Pollack at epollack@ehrdocs.com.g MACs Start Comprehensive Hospital Audits, Use Data Analysis to Identify Outliers Reprinted from the May 7, 2012, issue of AIS s weekly newsletter Report on Medicare Compliance. Call (800) for more information. Some Medicare reviewers are entering new territory with sweeping audits of multiple types of hospital errors in one fell swoop. This echoes the Medicare compliance reviews conducted by the HHS Office of Inspector General, in which auditors hit eight to 16 hospital risk areas at the same time and evaluate internal controls as well. Copyright 2013 by Atlantic Information Services, Inc. All rights reserved. Reproduction by any means including photocopy, FAX or electronic delivery is a violation of federal copyright law punishable by fines of up to $150,000 per violation. 46

47 Atlantic Information Services, Inc. It s a sign of the times, as the government tries to leverage data mining to expose as many potential errors as possible based on volume and value trending. OIG and CMS are spearheading audits on the premise that volume or value outliers may correlate with payment errors and lack of medical necessity, and the Department of Justice has joined the party as well. This is the same thing that has happened with one-day stay [audits] and investigations of implantable cardiac defibrillators and cardiac stents. It s indicative of a pattern of different regulatory and enforcement entities using data analysis and trending to identify outliers as a proxy for potentially inappropriate activity, says Kevin Cornish, national director of the healthcare dispute, compliance and investigation practice at Navigant Consulting. Then they put the onus on hospitals to provide information and substantiate why they are outliers and that the underlying activity was appropriate if that s the case. For example, one MAC conducted a data analysis of short-term care hospitals and identified eight hospitals that were outliers. The MAC, Wisconsin Physicians Services (WPS), sent the hospitals a February letter saying they have billing characteristics significantly different than other providers billing the same services. As a result, the hospitals were selected for a probe review. The MAC asked them to submit documentation for all line items on 40 claims specified in the letter. The documentation requested is unusually comprehensive, Cornish says. It includes, according to the letter: u Preadmission/admission screening tools and updates; u Acute-care transfer records; u Physician orders; u History and physical; u Physician progress notes; u Physician consultation/documentation; u Discharge summaries; u Diagnostic lab orders, indications and results; u Diagnostic/therapeutic radiology orders, indications and results; u Documentation of surgical interventions; u Documentation to support an interrupted stay; u Documentation to support procedures that were ordered and/or performed; u Nursing documentation (e.g., initial and daily assessment, treatment records, wound care, medication administration records); u Respiratory care documentation (e.g., initial and daily assessments, plans of care, units of treatment provided); u Documentation of physical, speech and occupational therapy; u Nutritional therapy documentation; u Case management/medical social work documentation (e.g., admission screening tools, discharge planning and coordination of team goals); and u Advance beneficiary notice if relevant. Copyright 2013 by Atlantic Information Services, Inc. All rights reserved. Reproduction by any means including photocopy, FAX or electronic delivery is a violation of federal copyright law punishable by fines of up to $150,000 per violation. 47

48 Atlantic Information Services, Inc. The MAC s letter says that its own medical reviewers will examine the documentation to determine if the services billed are medically reasonable and necessary and meet other requirements for Medicare coverage. It s probably a good idea for hospitals to conduct their own review before submitting the records to the MAC, Cornish says. He contends the probe reviews are atypical because of the way hospitals were selected. They are being issued purely based on trending analysis and outlier status with no proof someone has done something wrong, he says. It is not a traditional thing where you re submitting some identified atypical code or claim type or a number of claims are constantly hitting an edit or the services are not medically necessary based on an audit. This is merely you have trended above the norm, you must be doing something inappropriate and because of this, we will initiate an audit. It s essentially a fishing expedition, he says. The probe reviews emphasis on potential lack of medical necessity of services, procedures or admissions places hospitals in a very precarious circumstance, he says. Hospitals have an outlier trend they have to validate, which means supporting the decision making by physicians who may or may not be hospital employees. It s hard, absent something specific from Medicare that says we will cover [a service] under these circumstances. Sometimes that exists in a national coverage determination (e.g., ICDs) and sometimes it doesn t (e.g., stents). Outlier status may be misleading, Cornish notes. For example, one of Cornish s hospital clients has a world renowned interventional cardiology program, and it would have a different distribution pattern than typical hospital patterns because it attracts more acute patients not because it performs medically unnecessary procedures. Fishing expeditions, however, are not necessarily unreasonable, says Bruce Truitt, an instructor at the Government Audit Training Institute in Washington, D.C., and head of Noesis Analytics in Austin, Texas. Let s not invalidate the potential utility of a fishing expedition. It is a pain in the ass for providers, but it has utility for OIG or CMS, he says. It could tell them if what they are looking at is what they should look at and if what they should look at is what they are looking at. So it s possible the MAC is just fishing for future things to look at, testing a risk focus, attribute or algorithm, or they may be trying to develop a risk assessment, algorithm or model for the purpose of broadening their analytical framework for identifying a potential, preponderance or pattern of fraudulent, wasteful or abusive activity. They would then test the efficacy of this broadened analysis by examining what is going on at other providers. The MAC letter may be vague, but Truitt says it s entirely possible there are multiple objectives with a communication like this. For one thing, hospitals shouldn t read too much into the fact that the MAC isn t revealing exactly what it s after. That s just good auditing practice, Truitt says. They are listing things they could be looking for without tipping the auditor s hand. That makes it incredibly difficult for the auditee to do any sort of manipulation of the evidence because the auditee doesn t know what to manipulate. Also, because the MAC s informational demands are so extensive, it would be incredibly hard for large institutions to go back and look at all these particular areas of claims administration and correct any mistakes themselves in the time allotted for responding to the letter. The long list allows auditors to expand their scope in a legitimate way, Truitt says. They get in there looking for A and end up noticing something about B or C. It would be better from the auditors perspective if the elements of potential curiosity are already listed in this. Copyright 2013 by Atlantic Information Services, Inc. All rights reserved. Reproduction by any means including photocopy, FAX or electronic delivery is a violation of federal copyright law punishable by fines of up to $150,000 per violation. 48

49 Atlantic Information Services, Inc. There s also a potential educational component. The MAC is saying these are stinky fish we have been finding in the lake so if you are out fishing in your boat, these are the fish you might want to look for, Truitt says assuming the elements in the letter are based on solid data analysis. MAC Letters Are Similar to Stent Probe Cornish says the MAC s data-based review of hospital billing is analogous to an emerging investigation of cardiac stents. A small number of hospitals are being audited or investigated by OIG or the Department of Justice for the medical necessity of their stent implantations. Already two Maryland hospitals have settled false claims cases in this area (RMC 8/15/11, p. 1) and one physician was sent to prison for implanting medically unnecessary stents (RMC 8/1/11, p. 3). We know in these cases that data trending has been done on these providers related to the stent either being the reason for the investigation or to substantiate a [whistleblower s] claim, Cornish says. The government is looking specifically at the targeted hospitals volume of MS-DRGs and APCs associated with stents and how they compare to their peers. This investigation is troubling because stents are not fully addressed by national coverage decisions, in contrast to ICDs, which are the subject of a two-year-old national enforcement initiative based on hospitals departure from a Medicare NCD, Cornish says. NCDs set forth the circumstances under which Medicare pays for a service or procedure based on CMS s perception of medical necessity, although some contend that coverage guidelines and medical necessity don t mean the same thing. Cornish believes that stents are ripe for a regional or national investigation and therefore hospitals should have a process for trending the data in this area, whether or not they employ physicians. Hospitals need insight into medical decision making, Cornish says, and some way to validate that what the physician is doing is OK. The peer review process, which has historically been relied on for this purpose, does not really work in this context, he says. Between the ICD and stent investigations and MAC/OIG comprehensive hospital audits, Cornish predicts big changes on the horizon. They are using data trending and medical necessity in a combination that lets them cast a broader net to initiate reviews and investigate, he says. These Medicare watchdogs aren t talking about coding or modifiers or anything straightforward, but rather are acting as the arbiters of medical necessity, which is the ultimate hammer on Medicare s payment obligation, Cornish says. If and when this hits your hospital, Truitt says the board, senior management and key program staff should know the specifics and assess the associated risks for their particular facility and area of operations. He suggests convening a meeting between these players and the compliance and audit departments, director of nursing, chief radiologist, head of rehab and other clinical managers. They should go down the list of documents requested, consider their individual related expressed or implied risks and ask themselves honestly, What do we know about each of these items that can create legal, compliance or financial exposure for this institution? Truitt says the MAC and OIG letters are quite probably an assertion of hypothetical risk given that it unpacks medical necessity to the level of audit procedure. So, even though it s unclear exactly where the audit focus will be, CMS and Medicare contractors are a whole lot more likely to kiss and tell about people who consider these candidly and seriously and, even better, self-audit. Contact Cornish at kcornish@navigantconsulting.com and Truitt at brucetruitt@gmail.com.g Copyright 2013 by Atlantic Information Services, Inc. All rights reserved. Reproduction by any means including photocopy, FAX or electronic delivery is a violation of federal copyright law punishable by fines of up to $150,000 per violation. 49

50 Atlantic Information Services, Inc. New Paradigm Seen in ICD False Claims Investigation; Registry Plays a Big Role Reprinted from the Oct. 31, 2011, issue of AIS s weekly newsletter Report on Medicare Compliance. Call (800) for more information. Hospitals may have room to maneuver inside the supposedly ironclad Medicare coverage rules for implantable cardiac defibrillators (ICDs), which are the subject of a major national false claims investigation. Whether or not hospitals ultimately face the Department of Justice (DOJ), their ICD billing compliance may require a deeper dive into the confusing world of defibrillator coverage, insiders say. And that means delving into the ICD Registry, where hospitals report ICD implantations at CMS s behest and investigators go to hunt for information. ICD Registry reporting has existed since 2005, but now it s much more important, says Kevin Cornish, national director of the healthcare dispute, compliance and investigation practice for Navigant Consulting. Provider use and misuse of the registry has become a significant aspect of the ICD investigation, he says. There are other unique angles to the DOJ s ICD investigation, which represents the first widespread use of civil investigative demands (CIDs) in the health care industry. CIDs, which got a boost from the 2009 Fraud Enforcement and Recovery Act, require hospitals to produce documentation in civil or criminal investigations conducted by U.S. attorneys offices. Insiders believe the ICD investigation was based on CMS data prospecting a more needle-in-the-haystack strategy than data mining apparently without the benefit of Medicare audits or education to first try to coax hospitals back into compliance. This is a great example of the new paradigm of how the government will investigate providers, says Dallas attorney Frank Sheeder, who is with DLA Piper. Data mining is when you have done tests and you know where to dig. With data prospecting, you are trying to figure out where there is gold to dig for, he says. The investigation kicked off in March 2010, when the Department of Justice issued CIDs to hospitals, hospital chains and device manufacturers, says Houston attorney Lynn Adam, with King & Spalding. Then DOJ mellowed a bit, asking the next set of hospital-targets for ICD information in what Cornish calls preserve and hold letters. The letters requested policies and procedures and ICD Registry data, but not specific medical records. Hospital responses were voluntary, Cornish notes, but hospitals that don t comply run the risk of getting a CID. Hundreds of hospitals have received CIDs or preserve and hold letters. The investigation focuses on claims for ICD implantations that allegedly run afoul of the Medicare national coverage decision (NCD) for ICDs (20.4). The NCD describes nine categories covered indications that trigger Medicare payment. In some of the categories, Medicare won t pay for a beneficiary s ICD implant within 40 days of having a heart attack or within three months of a coronary artery bypass graft (CABG) or percutaneous transluminal coronary angioplasty (PTCA). Four through nine of the NCD s covered indications known as primary indications include the timing restrictions. The rest, which have no timing limitations, are informally known as secondary indications. DOJ may consider it a timing violation when ICDs are implanted before the 40th day after a heart attack or before the 90th day after a CABG or Copyright 2013 by Atlantic Information Services, Inc. All rights reserved. Reproduction by any means including photocopy, FAX or electronic delivery is a violation of federal copyright law punishable by fines of up to $150,000 per violation. 50

51 Atlantic Information Services, Inc. PTCA. But physicians and hospitals have a strong medical-necessity argument for some ICD surgeries performed in close proximity to heart attacks, CABGs or PTCA, Cornish and Sheeder say. Even if you fall within the timing window, you may have another justification for getting paid or for why the case should not be considered a recovery by the Department of Justice, Cornish says. Prosecutors may argue that the timing window is a make-or-break proposition, but Sheeder and Cornish don t agree because of inconsistencies in the definitions of primary and secondary in the NCD, ICD Registry and other CMS documents. One example: patients who have significant histories of cardiac disease and associated scarring probably qualify for an ICD because they meet an NCD primary indication and have heart disease that no amount of waiting will improve. However, once the patients have a heart attack or revascularization, they are automatically thrown into the timing window and no longer qualify for Medicare ICD coverage for 40 days (if it s a heart attack) or three months (for revascularization). The whole point of waiting is not relevant for them, Cornish says. Waiting makes sense for patients without a history of cardiac disease because time should help heal the wounds of an acute heart attack or revascularization. But no amount of time will make the heart get better when patients have a long cardiac history and documented cardiac inefficiency, he says. The waiting period is designed for people with acute cardiac illnesses because that will lead to the heart improving. With chronic illnesses, the physician knows waiting won t make a difference. Primary and Secondary Labels Matter There s more to the story. What throws off compliance and DOJ investigators is the fact that physicians and regulators have inconsistently labeled patients primary or secondary, Cornish says. Yet the distinction is all-important with respect to the false claims investigation because there are no timing indications, and therefore no timing violations, with secondary indications, he says. And that s where the ICD Registry comes in. CMS requires hospitals as a condition of payment to report their ICD procedures to the ICD Registry, a national databank, for primary-indication patients. There s not enough information on claims to verify that patients had the clinical conditions required for a primary indication, and the elaboration in the registry enables CMS to evaluate compliance with coverage condition. Most hospitals also submit information for secondary indications, although it s not mandated, Cornish says. The ICD Registry is the only place that defines a secondary indication. It s also the only place where hospitals make a formal determination of whether a patient is a primary or secondary ICD indication. There are times the NCD by itself is not sufficient for hospitals and physicians to accurately understand what a primary and secondary ICD indication is. For example, the registry talks about syncope associated with cardiac arrhythmias as one type of secondary indication, but it s not even mentioned in the NCD as a reason for an ICD surgery. When the NCD is interpreted in context with the ICD Registry definitions, hospitals have a more accurate framework for evaluating ICD cases and a better chance of fending off falseclaims allegations, he says. But sometimes hospitals make mistakes in registry reporting. Many institutions were calling patients secondary that really weren t secondary, Cornish says. If they are truly secondary cases, prosecutors shouldn t pursue them because there are no timing requirements in covered indications one and two, he says. Physicians may use inaccurate definitions as well, so hospitals can t always turn to them to make the distinction. Copyright 2013 by Atlantic Information Services, Inc. All rights reserved. Reproduction by any means including photocopy, FAX or electronic delivery is a violation of federal copyright law punishable by fines of up to $150,000 per violation. 51

52 Atlantic Information Services, Inc. All of this underscores how large the registry looms in compliance. But it s just one factor in a very tricky investigation. In fact, the complexity of ICD medical decision making has apparently given the Justice Department some pause. No allegations have been made yet, Sheeder said Sept. 26 at the Fraud and Compliance Forum co-sponsored by the American Health Lawyers Assn. and Health Care Compliance Assn. The government has been very careful to have a dialogue with defense counsel and experts, including the Heart Rhythm Society. It s in everyone s interest to work this out with the Department of Justice. While it s ICDs today, it will be something else tomorrow, Sheeder said, whether hip replacement, stents or something else. The wheels of program integrity never stop turning. In light of this NCD-based false claims investigation, Cornish offers these tips to hospitals: u Develop clear policies and procedures that ensure you respond to new NCDs and educate physicians, billers and other staffers accordingly. u Establish procedures to monitor compliance with NCDs by physicians and the hospital. u Train the appropriate people in the hospital affected by the NCDs. u Develop documentation standards to address ambiguities in NCDs. For example, in the NCD for ICD implants, hospitals could develop accepted definitions around key words, including sustained, transient, reversible and associated, Cornish says, so the government isn t left to guess whether a case complies with the NCD. And physicians must tell hospitals where they stand. If an ICD case falls outside the NCD coverage but the physician believes the procedure is medically necessary, the hospital needs to know what s going on so it can evaluate for itself the medical necessity of the procedure and bill the procedure in a way that doesn t create false claims liability. You want to be very transparent [when] billing Medicare for an ICD procedure that you believe falls outside the NCD but for which the hospital and physician feel there is a compelling medical necessity argument. Contact Cornish at kcornish@navigant.com and Sheeder at frank.sheeder@dlapiper.com. G From Zero-Day Stays to Pacemakers, Reviewers Hit Medical Necessity Harder Reprinted from the Oct. 3, 2011, issue of AIS s weekly newsletter Report on Medicare Compliance. Call (800) for more information. Medicare auditors and investigators are prying into the medical necessity of Medicare services, questioning zero-day stays and other hospital admissions and challenging whether hospitals should have done certain procedures at all. Some auditors also are expected to use extrapolation to recover large overpayments from a small universe of claims denials, although so far some hospitals have fared well in medical-necessity appeals. With so much at stake for hospitals, the best bet for preventing overpayment determinations is to strengthen their utilization review process, improve documentation and prepare to appeal claims they believe were denied unfairly, experts say. The signs that medical necessity are on the front burner are everywhere. Medicare administrative contractors (MACs), for example, are auditing the medical necessity of inpatient Copyright 2013 by Atlantic Information Services, Inc. All rights reserved. Reproduction by any means including photocopy, FAX or electronic delivery is a violation of federal copyright law punishable by fines of up to $150,000 per violation. 52

53 Atlantic Information Services, Inc. admissions for certain DRGs, such as chest pain and esophagitis/gastroenteritis, and the medical necessity of performing certain procedures. They are under a lot of pressure to perform, Robert Corrato, M.D., president of Executive Health Resources in Philadelphia, said Sept. 26 at the Fraud and Compliance Forum co-sponsored by the American Health Lawyers Assn. and Health Care Compliance Assn. One MAC categorically denied coronary artery stent cases at hospitals in its jurisdiction, he said. Their denial rate was almost 99%. But not all denials were sound: Of 150 cases that hospitals appealed, almost 30% were overturned at the first level, which is handled by the MAC that denied them. Many more pacemaker claims denials were overturned at the second level by the qualified independent contractor (QICs) and at the third level by an administrative law judge (ALJ). Corrato believes the cycle of coronary artery stent denials and reversals stems partly from the MAC s failure to routinely involve physicians in reviews. The likelihood is at best there is an application of a screening criteria tool, such as InterQual or Milliman. If the admission doesn t pass muster with its software, the MAC rejects the claim without consulting a physician, Corrato adds in an interview. That means MACs may not subject claims to physician review even for complex medical-necessity cases. Stakes Are Raised for Pacemakers Meanwhile, the stakes have been raised for pacemaker medical necessity by an alert from the Comprehensive Error Rate Testing contractor, a Medicare program-integrity player. The CERT alert informed hospitals that eligibility for payment for dual-chamber pacemakers is a CERT target, Corrato said. The CERT alert identifies a suspected high level of errors, Michael Taylor, M.D., vice president of clinical operations at Executive Health Resources, says in an interview. RACs and MACs pick up on these alerts and base future review strategies on them. The CERT alert presents medical necessity as a two-part issue: (1) did the patient need the pacemaker at all, and if so, (2) would the less expensive, single-chamber version be adequate? Auditors are second guessing very detailed, educated, nuanced judgment and decisions made by physicians, Corrato said. He and Taylor foresee increased auditor and investigator attention to Medicare coverage of pacemakers, not unlike the national enforcement initiative involving the medical necessity of implantable cardiac defibrillators (ICDs), the medical cousin of pacemakers. Medical necessity in this area turns on whether hospitals comply with the Medicare national coverage decision for cardiac pacemakers (20.8). The NCD spells out the circumstances under which Medicare will pay for a single chamber or a dual chamber pacemaker. For example, the NCD states that patients are eligible for dual-chamber pacemakers when (1) they have single-chamber pacemakers and a definite drop in blood pressure; (2) they have pacemaker syndrome, which means their atrial and ventricle chambers are not beating together and it s causing significant symptoms; (3) pacemaker syndrome can be anticipated; or (4) a small increase in cardiac efficiency will improve their quality of life. MACs and other reviewers may deny pacemaker implants for failure to meet the NCD (or because documentation made it seem that way), Taylor says. Complicating matters is that many electrophysiologists consider the NCD outdated. It was created at a time when more single chamber pacemakers were used, and today physicians are much more likely to put in dual-chamber pacemakers, Taylor says. Although it might be dated, Corrato says, the NCD is binding at the ALJ level. Copyright 2013 by Atlantic Information Services, Inc. All rights reserved. Reproduction by any means including photocopy, FAX or electronic delivery is a violation of federal copyright law punishable by fines of up to $150,000 per violation. 53

54 Atlantic Information Services, Inc. Also attracting medical-necessity scrutiny are zero-day stays, which means patients were discharged before midnight of the date of admission. Zone program integrity contractors (ZPICs) CMS s fraud and abuse (and increasing overpayment) hunters are suspicious of what are basically the shortest of short stays. But Corrato says sometimes patients are admitted to the hospital in bad shape and dramatically improve before midnight. For example, pacemakers are often performed on an outpatient basis, but bad things can happen to people intraprocedure (e.g., heart, respiratory or kidney failure), Corrato says. That may prompt the physician to admit the patient because of the possibility of adverse events, especially in older Medicare beneficiaries. But the patient rallies and is released 12 hours later. That s a zero-day stay, Corrato says, and it should be considered medically necessary if supported by documentation. In contrast, ZPICs may find questionable zero-day stays. This is an appropriate and clever area for ZPICs to look at, Taylor says. According to the Medicare Benefit Policy Manual (Chapter One, Sec. 10), there has to be an expectation for the need for overnight care. When there is no physician intent to keep a patient overnight in the hospital for inpatient medical care, the patient should generally be considered an outpatient unless the procedure is on the CMS inpatient-only list, Taylor says. This is an area of high risk and hospitals should apply the same rigorous utilization-review criteria they apply to other inpatient admissions. At the same time, when they see these denials, hospitals should have a physician assess every case and question whether the denials are correct. If auditors properly denied your zero-day stay, Taylor recommends putting more muscle into concurrent reviews to prevent future errors. If the denial is inappropriate perhaps for cardiac or urology procedures where patients are expected to require overnight stays but were able to go home early consider an appeal, he says. Use of Extrapolation Is Growing He also notes that ZPICs are starting to use extrapolation in their reviews. They can calculate large recoveries based on small samples (e.g., 25 or 30 denials), Corrato says. ZPICs can extrapolate when there is a sustained or high degree of payment error or failure of documented education, Taylor says. Extrapolation can be a big financial blow to hospitals. He points to two strategies that may help hospitals mitigate their risk: (1) Challenge the validity of individual claims denials underlying the extrapolation if you believe the denials were off base and have documentation to support an appeal; and (2) Challenge the premise for the extrapolation if the ZPIC hasn t used sound statistical sampling methodology. We have found several cases recently where the ZPIC s extrapolation was overturned at the first level of appeals because of inappropriate statistical methodologies, Taylor says. Corrato encourages hospitals to view denials critically and make sure auditors conclusions are appropriate. Hospitals should not just defer to auditors, he says. But you can t appeal ZPICs decisions to extrapolate because they are allowed under their CMS contracts. The agency also has given RACs the green light to extrapolate. It s a Long Road to the ALJs On a case-by-case basis, hospitals may have a long appeals road in front of them, all the way to the top of the food chain. In the medical-necessity arena, ALJs are often just what the doctor ordered. That s what happened in one case of a stent denial Corrato described at the conference. Copyright 2013 by Atlantic Information Services, Inc. All rights reserved. Reproduction by any means including photocopy, FAX or electronic delivery is a violation of federal copyright law punishable by fines of up to $150,000 per violation. 54

55 Atlantic Information Services, Inc. A Medicare patient was admitted to the hospital for percutaneous coronary intervention, a procedure to implant a stent that keeps blocked arteries open. The procedure was scheduled in other words, it was elective and not performed in a medical crisis, Corrato said. Improved technology allows surgeons to perform these procedures on sicker patients, and that was the case here: the 83-year old beneficiary had two blockages, so two-thirds of his heart muscle was supplied by blocked arteries. Initially, the MAC paid the MS-DRG, but later reopened the case and denied payment. According to Corrato, the reason given for the denial: The medical record did not support an inpatient level of care. The MAC did not elaborate. The surgeon also failed to detail the basis for his admission decision; if there were complications, they weren t documented, Corrato says. The hospital appealed the claim, noting marginal blood pressure and brachycardia (slow heart rate) during the procedure. The appeal was denied at the first level, called redetermination, with little explanation, Corrato said. The QIC upheld the claims denial, laconically stating that an expert panel determined the care could have been provided in observation status. But the hospital s luck turned around when it got to the ALJ. Unlike the MAC and QIC, the ALJ wasn t dissuaded by the fact the procedure was scheduled, Corrato said. Heart transplants are scheduled, he noted. The ALJ was persuaded by the surgeon s use of atropine, a drug to treat very low heart rates, as well as the patient s brachycardia and the distribution of blood flow, which make us believe this [case] was a much higher level of risk. The ALJ ruled in favor of the hospital, which received payment for the MS-DRG. The thrust of the ALJ s opinion was that, while bad things didn t happen to the patient, they could have and that was good enough in this context to justify the admission, he said. Corrato described another experience with an appeal on behalf of a hospital. Its MAC conducted a probe audit of admission necessity for chest pain (MS-DRG 313) and concluded that 90% did not make the grade. In response, the hospital implemented a utilization review process for admissions. It consists of two levels: InterQual screening of admissions, and then second-level physician advisor reviews. The MAC then audited the hospital s chest-pain cases and denied 55% of them (11 of 20). The MAC then demanded a corrective action plan, but the hospital pushed back, citing the merits of the cases and data from the CMS Program for Evaluating Payment Patterns Electronic Report (PEPPER). According to PEPPER, which is free electronic comparative billing data, the hospital s volume of chest pain admissions was lower than half of all hospitals in the state, MAC jurisdiction and nation. The hospital also appealed the 11 denials and all were overturned. The ALJ determined that the medical evidence and documentation of the chart supported the medical necessity of the admission in question, Corrato said. Compliant Admissions Are Key Taylor emphasizes the importance of having a compliant medical-necessity admission review program. That involves applying admission screening criteria (e.g., InterQual), followed by physician review and then, if necessary, input by the attending physician. If all those pieces are in place and function properly, denials should not be upheld by a limitation of liability provision, Corrato notes. CMS s limitation of liability provision authorizes payment if providers did not know, or could not have been expected to know, that a service was not reasonable and necessary. Contact Corrato at drcorrato@ehrdocs.com and Taylor at mtaylor@ehrdocs. G Copyright 2013 by Atlantic Information Services, Inc. All rights reserved. Reproduction by any means including photocopy, FAX or electronic delivery is a violation of federal copyright law punishable by fines of up to $150,000 per violation. 55

56 Atlantic Information Services, Inc. DOJ Appears Open to Idea that Medical Necessity, NCD Don t Always Overlap Reprinted from the June 27, 2011, issue of AIS s weekly newsletter Report on Medicare Compliance. Call (800) for more information. Medicare coverage of implantable cardiac defibrillators (ICDs) may not be as black-andwhite as fraud enforcers contend, which gives hospitals some pushback in the national investigation of billing for ICD implants, some lawyers tell RMC. The Department of Justice (DOJ) is scrutinizing expensive implants of ICDs, which are small electronic devices that treat tachyarrhythmias by shocking the heart back into a normal rhythm. The investigation focuses on hospital claims that fail to meet Medicare s national coverage decision (NCD) for ICD implantation. NCDs specify when and why a procedure is covered by Medicare. The premise of the [DOJ] investigation appears to be that you need to meet the conditions in the NCD to get an ICD. That is just wrong, says Minneapolis attorney David Glaser, with Fredrikson & Byron. The NCD is a safe harbor. It extends coverage to certain situations, but doesn t limit it. The NCD describes nine covered indications for ICD implants. But it doesn t cite any noncovered conditions. That s noteworthy, Glaser says, because NCDs for other procedures (e.g., cardiac pacemakers) list both covered and noncovered conditions. The [CMS] NCD manual says that unless there s an explicit limitation on coverage, the NCD doesn t limit coverage, he says. Without a definitive yes/no calculus, the engine of the DOJ false claims enforcement initiative sputters, he contends. The NCD doesn t limit coverage. It is not absolute, Glaser says. He and other lawyers have made this case to the Department of Justice and are awaiting a response. Glaser and other experts, including physician Tom McCarter, chief clinical officer of Executive Health Resources in Philadelphia, say that ICDs should be more open to interpretation. Sometimes ICDs are medically necessary even if they don t fit inside the tidy box of the covered indications. A classic example is former vice president Dick Cheney, whose life has been saved by cardiac procedures. Cheney, who has an ICD implant, became fodder for the Medicare ICD coverage debate even though at the time he was covered by the Federal Employees Health Benefits Program rather than Medicare. Despite serious, highly publicized heart problems, Cheney still would not have been a candidate for Medicare-covered ICD surgery, according to minutes of a 2003 meeting of the Medicare Coverage Advisory Committee. [Cheney] didn t actually qualify because his ejection fraction was 40%, said physician Arthur Moss, who represented the Guidant Corporation, a device maker. The NCD requires ejection fractions of less than or equal to 35%. (Ejection fraction refers to how well the left side of the heart is pumping blood.) The Cheney case demonstrates that it may be possible for patients to need an ICD and still not meet the Medicare criteria, Glaser says. That means DOJ and Medicare auditors should be asking hospitals whether the decision to implant the ICD in the patient is reasonable and necessary, rather than whether the implants met the letter of the NCD, he says. It has to be done on a case-by-case basis, he says. The medical-necessity issue has yet to be adjudicated in the HHS administrative system (e.g., administrative law judges) and hasn t reached the civil court system. We have not seen auditors denying cases based on the medical necessity language of the NCD, so this Copyright 2013 by Atlantic Information Services, Inc. All rights reserved. Reproduction by any means including photocopy, FAX or electronic delivery is a violation of federal copyright law punishable by fines of up to $150,000 per violation. 56

57 Atlantic Information Services, Inc. language has not been tested through an appeals process, McCarter says. The audit activity up to this point by Medicare administrative contractors and recovery audit contractors has focused on the question of the appropriate setting for the procedure. But Medicare administrative contractors (MACs) and RACs have denied other cardiac device surgeries, such as stents, because they failed to meet NCD criteria, McCarter says. Hospitals Face Documentation Challenges While attorneys try to persuade DOJ that decisions about ICD implants are not always straightforward, hospitals face the challenge of gathering documentation for DOJ and RAC reviews and ensuring ICD surgeries moving forward are supported by the medical record, McCarter says. The NCD for implantable automatic defibrillators (20.4) has nine covered indications and several exclusions, but the exclusions do not result in non-coverage, Glaser says. Instead, the exclusions mean that the MAC must analyze the medical necessity of that particular case, he says. If the [covered indications] are not documented in the medical record, Medicare may determine there is no obligation to pay, McCarter says. As hospitals work through RAC denials of ICD coverage and prepare their defense for the DOJ investigation, it helps to break down the NCD into workable parts. The top reason for ICD implantation, McCarter says, is ischemic cardiomyopathy, which means the patient s heart has trouble pumping blood. Ischemic cardiomyopathy is addressed in covered indications four, five and six, which also require the presence of other criteria. For example, in covered indication five, there must be a documented prior myocardial infarction at least 40 days earlier (but not sooner) and a left ventricular ejection fraction of less than or equal to 30%, McCarter says. Patients might be excluded from Medicare coverage of ICD implants for a time period by the NCD if they have had certain procedures. For example, patients who have undergone a coronary artery bypass graft (CABG) or percutaneous transluminal coronary angioplasty (PTCA) within the past three months don t qualify for an ICD implant under covered indication five. To defend their claims in the DOJ national investigation and RAC and MAC audits, hospitals have to prove their patients met NCD coverage criteria, McCarter says. For example, if the ICD implant was driven by ischemic cardiomyopathy, the basis for determining that would be the patient s past history, he says. The medical records should establish the patient s history of ischemic cardiomyopathy through documentation of bypass surgery, abnormal cardiac catheterization (which will distinguish ischemic from nonischemic cardiomyopathy) and a previous myocardial infarction. When patients come in for this procedure, we may not document all the things that happened five to 10 years ago, McCarter says. But given the NCD s requirements and the government s scrutiny, physicians should document that the patient had a myocardial infarction five years ago, as indicated by elevated cardiac enzymes that can be obtained from older medical records. Medicare will look specifically to see that all these pieces are present, so you might want to do the medical detective work to avoid denials by auditors or false claims allegations. Don t count on auditors to hunt down old documents to fill in the gaps. The same documentation rules apply to ejection fractions. Echocardiograms, nuclear cardiac studies and cardiac catheterizations yield this information, which must be noted in the Copyright 2013 by Atlantic Information Services, Inc. All rights reserved. Reproduction by any means including photocopy, FAX or electronic delivery is a violation of federal copyright law punishable by fines of up to $150,000 per violation. 57

58 Atlantic Information Services, Inc. medical record. The best practice is to say on this date, the patient had this procedure and here is the result, McCarter says. He suggests placing a copy of the test results in the current medical record. Again, he says, I don t think the government sees it as their obligation to do detective work. They will see the case as one with a significant vulnerability unless the information is present. While there aren t noncovered conditions, the NCD cites exclusions that would take ICD implantation off the table. For example, patients must not have irreversible brain damage from pre-existing cerebral disease. This NCD Is a Compelling Vehicle The granularity of the guidance makes this NCD a compelling enforcement vehicle, McCarter says. For example, CMS is very specific in barring coverage of ICD implantation if the patient had a heart attack up to 40 days before, and the government is focusing on the timing of a few of the exclusions, McCarter says. But as clinicians work through the covered conditions, you can find exceptions that are reasonable, he says. For example, McCarter says, if the patient had a heart attack 20 days earlier and develops a life-threatening slow heart rate, the patient might meet the NCD requirements for a pacemaker (NCD 20.8). If this patient also has a history of cardiomyopathy and would meet the other requirements under the NCD for a defibrillator, what should the care team do? Should they place the necessary pacemaker now, and then upgrade the device to a defibrillator in 20 days, putting the patient at increased risk by placing two devices? Or should a pacemaker be placed today that also has the ability to defibrillate, in one procedure, with one device? If the doctor implants a pacemaker with the ability to defibrillate, will the DOJ see the value in making exceptions? McCarter wonders. There are signs the answer is yes, lawyers say. As its ICD investigation of numerous hospitals moves forward, the Department of Justice apparently is open to that line of reasoning. During its months of discussions with hospitals and reviews of their medical records, DOJ is becoming more flexible about the NCD criteria, says Houston attorney Scott McBride, with Baker & Hostetler. I think they are looking at putting claims in different buckets, he says. The government recognizes there s not a lot of difference from a medical standpoint between an ICD implanted 91 days after a PTCA versus an ICD implanted 89 days after the PTCA, yet the latter falls outside the NCD. The NCD is not the litmus test for coverage, Glaser says. I can see how, in a quick read, someone would think you have to fit in there. But you have to think about it a bit to recognize the problem in that thought process. The good news is that government attorneys working on this case have been very reasonable, Glaser says, and are emphasizing that they are trying to be fair. As a result, I am hopeful that they will agree. Contact Glaser at dglaser@fredlaw.com, McCarter at tmccarter@ehrdocs.com and McBride at smcbride@bakerlaw.com. G Copyright 2013 by Atlantic Information Services, Inc. All rights reserved. Reproduction by any means including photocopy, FAX or electronic delivery is a violation of federal copyright law punishable by fines of up to $150,000 per violation. 58

59 Atlantic Information Services, Inc. Scrutiny of Medical Necessity Intensifies, But Gray Areas Persist Reprinted from the May 20, 2011, issue of AIS s weekly newsletter Report on Medicare Compliance. Call (800) for more information. Expensive procedures that are covered only if they meet specific Medicare coverage guidelines face greater scrutiny from recovery audit contractors (RACs) and other watchdogs. Instead of challenging the medical necessity of the inpatient admission for the procedure, reviewers are questioning the medical necessity of the procedure itself. RACs have been looking at the correct setting of care, but we have seen increasing focus recently from auditors and investigators on whether a procedure is necessary in the first place, says Michael Taylor, M.D., vice president of clinical operations for Executive Health Resources in Philadelphia. A prime example is cardiac procedures stents, pacemakers and automatic implantable cardiac defibrillators (AICDs). They re all high-volume, high-dollar procedures, and reimbursement hinges on compliance with national coverage decisions (NCDs), which describe the conditions of coverage. Only certain procedures are subject to NCDs (or local coverage decisions), which means Medicare won t pay unless patients meet explicit criteria. That makes the job of auditors and investigators easier; they are questioning whether the patient needed the cardiac procedure at all based on the NCD, which is obviously a different question than whether it should have been implanted in the outpatient setting instead of the inpatient setting. There is an abundance of clinical evidence about which patients benefit from these procedures, so investigators have good reason to believe they should focus on them, Taylor says. National Inquiry by DOJ Is Underway The Department of Justice (DOJ) has a national investigation underway of AICD surgery at hospitals (RMC 10/18/10, p. 1) and cardiac stents are a target area of CMS s Program to Evaluate Payment Error Patterns Electronic Report, or PEPPER (RMC 5/9/11, p. 5). And St. Joseph Medical Center in Towson, Md., paid $22 million in November 2010 to settle false claims allegations over kickbacks and Stark violations involving a group of cardiac surgeons and to reimburse Medicare for payments it received for medically unnecessary stents performed by Mark Midei, M.D., according to the U.S. attorney s office for the District of Maryland (RMC 11/15/10, p. 3). The hospital fired Midei and yanked his privileges. Physicians and hospitals should expect claims denials unless the reason for performing the procedure comports with the NCD s coverage indications. It may happen more often than you think because clinical literature and evidence continue to evolve, Taylor says. The physician may follow clinical guidelines, but be unfamiliar with the NCD, he says. If they conflict, Medicare will deny the claim. Documentation is a big problem. When physicians don t explain how patients meet the NCD s coverage guidelines, they are asking for trouble with auditors. Pacemakers are a classic example, Taylor says. The Comprehensive Error Rate Testing (CERT) program has identified pacemakers as an area rife with errors. The specific vulnerability is dual-chamber pacemakers, he says. In its NCD (20.8), CMS distinguishes the coverage requirements for single-chamber versus dual-chamber pacemakers. For example, the NCD states that patients are eligible for dual-chamber pacemakers Copyright 2013 by Atlantic Information Services, Inc. All rights reserved. Reproduction by any means including photocopy, FAX or electronic delivery is a violation of federal copyright law punishable by fines of up to $150,000 per violation. 59

60 Atlantic Information Services, Inc. when (1) they have single-chamber pacemakers and a definite drop in blood pressure; (2) they have pacemaker syndrome, which means their atrial and ventricle chambers are not beating together and it s causing significant symptoms; (3) pacemaker syndrome can be anticipated; or (4) a small increase in cardiac efficiency will improve their quality of life. Physicians Must Document the Rationale Physicians, however, often fail to document the reasons for a dual-chamber pacemaker and, specifically, to explain why it s medically necessary to implant a dual-chamber pacemaker instead of the cheaper single-chamber version, Taylor says. The claim may be denied unless the medical records fully explain the reason for the dual-chamber pacemaker, he says. Auditors tend to examine everything in the hospital record admission notes, discharge notes, procedure notes and claims may be denied if pieces of the documentation puzzle were left in the physician s office. Make documentation easy to find and document specifically how the NCD is fulfilled, he says. Be very specific why dual chamber is necessary. Also make sure patients receiving the device don t have one of the exclusions in the NCD. That disqualifies them from coverage, which again may trigger a claims denial, he notes. Hospitals are at particularly high risk with AICDs because of the double whammy of Medicare auditors and the DOJ investigation. The NCD for AICDs (20.4) has nine coverage indications, and the common denominator is timing of the device placement, Taylor says. Physicians need to be aware of timing when they perform the procedures, he says. There are two groups of indicators: (1) Secondary prevention: AICDs are medically necessary for patients who already suffered life-threatening arrhythmia (indicators one and two on the NCD). (2) Primary prevention: AICDs are medically necessary for patients who have not yet experienced life-threatening arrhythmia, but who are at risk for various reasons. For example, they may have coronary artery disease with prior heart disease or inducible sustained arrhythmia on an electrophysiology study. But many of these patients are not eligible for AICDs if they had a myocardial infarction within the previous 40 days or if they had a bypass or PTCA (stent) within the previous three months. Explicit, Thorough Documentation Is Needed Documentation for AICDs must be explicit and thorough, Taylor says. Make it clear to the auditor that it was necessary and appropriate. If auditors have to hunt through hundreds of documents, the procedure may be denied, he says. And don t force auditors to use a decoder ring to translate what you re thinking. If ejection fraction is necessary, the doctor should make sure an accurate ejection fraction is on the [hospital] record and not just in their office record. The NCD for stents (20.7) requires physicians to establish objective evidence of myocardial ischemia. According to the NCD, the lesions [in arteries] should be amenable to angioplasty and the procedure should be performed for angina refractory to optimal medical management. Hospitals may see denials in some cases if previous medical management is not documented. Physicians should document the medical management that has been tried with patients before resorting to surgery. Explain what was effective, what wasn t and why. A detailed explanation of why angioplasty is necessary should be provided, he says. Copyright 2013 by Atlantic Information Services, Inc. All rights reserved. Reproduction by any means including photocopy, FAX or electronic delivery is a violation of federal copyright law punishable by fines of up to $150,000 per violation. 60

61 Atlantic Information Services, Inc. To minimize denials for all cardiac procedures, Taylor says, hospital case management should use a two-pronged approach: education and screening. Make sure physicians are well-versed in the NCDs. It s helpful to have access to templates and other tools that make it easier to determine if patients meet the NCD standards. Some hospitals are finding they can improve the process with an abstraction tool that case management can use, he says. Hospitals should differentiate the clear-cut from the gray-area cases, because some cases will require more analysis before surgery proceeds, perhaps from physicians with particular expertise in the area who can help determine if documentation of coverage requirements is sufficient, Taylor says. For example, CMS recognizes that experts may differ in their judgments about what constitutes appropriate criteria for dual-chamber pacemaker use. Similarly, with AICDs, these physicians might not always agree whether the NCD has been satisfied in a given case. Auditor attention to NCDs fits in with the overall paradigm shift in health care, Taylor says. Payers increasingly expect physicians to follow evidence-based guidelines and auditors will increasingly review based on them (RMC 12/6/10, p. 1). There will be more accountability, he notes. Meanwhile, as the DOJ investigation of AICD implantation at hospitals continues, they are finding that medical necessity is not as cut and dried as expected, says one attorney with clients targeted by DOJ. The hospitals have asked DOJ to remove ambiguous cases from the review, says the attorney, who asked not to be identified. Some hospitals may be dropped from the probe altogether. The level of dialogue has been constructive, he says. One of his clients did an internal audit and found that most cases met the NCD criteria for AICDs; only eight required further review. The upshot is, this may be less about liability and more about medicine, the lawyer says. Contact Taylor at mtaylor@ehrdocs.com. Visit the PEPPER site at org. G Documentation Is Best Defense as Feds Turn Up Heat on Pricey Cardiac Procedures Reprinted from the Jan. 17, 2011, issue of AIS s weekly newsletter Report on Medicare Compliance. Call (800) for more information. As the Department of Justice s investigation of hospital billing for implantable cardioverter defibrillators (ICDs) picks up steam, beware a potential assault on pacemakers and cardiac stents, because Medicare sets forth coverage guidelines for all three high-dollar cardiac procedures. Auditors have not previously examined them with the kind of detail they expect today, says Michael Taylor, M.D., vice president of clinical operations for Executive Health Resources in Philadelphia. Today s standard of documentation is probably here to stay, and doctors and hospitals have to be far more detailed in documentation of all procedures. In particular, though, claims for cardiac procedures are under the glare of a powerful spotlight. DOJ is investigating whether claims for ICD implantation failed to meet the relevant Medicare national coverage decision (NCD 20.4). The government s concerns about NCD noncompliance were reinforced by a study published in the Jan. 12 issue of the Journal of the American Medical Association Copyright 2013 by Atlantic Information Services, Inc. All rights reserved. Reproduction by any means including photocopy, FAX or electronic delivery is a violation of federal copyright law punishable by fines of up to $150,000 per violation. 61

62 Atlantic Information Services, Inc. (JAMA). Researchers led by Sana Al-Khatib, M.D., of Duke University Medical Center reviewed 111,707 ICD cases from the National Cardiovascular Data Registry-ICD Registry. Their findings: 22.5% did not meet evidence-based criteria for this implantation ; these patients had a significantly higher risk of in-hospital death compared with patients who received evidence-based ICDs. DOJ is not the only agency scrutinizing cardiac procedures. I expect recovery audit contractors and Medicare administrative contractors to follow the same pattern with other high-dollar cardiac procedures, such as pacemakers and stents, because they also are associated with NCDs, Taylor says. That means Medicare does not cover pacemaker, stent or ICD implantation for cases that fail to satisfy the NCD. CMS clearly encourages this scrutiny. Its Program for Evaluating Payment Patterns Electronic Report (PEPPER) is tackling at least 28 new targets in late February, including stents, one-day stays for cardiac arrhythmias, and two-day stays for heart failure and shock (RMC 12/13/10, p. 1). Taylor says DOJ has been focused on patients receiving ICDs for primary prevention of sudden death who don t qualify for the device according to Medicare coverage guidelines. For example, the NCD says that Medicare usually won t pay for ICD implantation for some patients who have suffered a myocardial infarction within 40 days of the procedure. Even if patients didn t suffer a myocardial infarction within 40 days of ICD implantation, RACs and MACs may deny claims because patients didn t meet other criteria. That s why hospitals should be attuned to all nine covered indications of the NCD and ensure physicians document all of them in a way that satisfies Medicare auditors, he says. There are many potential pitfalls to documenting medical necessity for ICDs. For example, physicians may not adequately explain the severity of the patient s cardiomyopathy or the type of cardiomyopathy (ischemic versus nonischemic), Taylor says. Physicians also don t always go into detail about arrhythmias the patient has experienced, he says. We rarely see in the medical record the physician stating which of the nine coverage indications the physician feels justified the recommendation for ICD implantation, Taylor says. As a result, auditors often can t tell why physicians performed the procedures. Examples of Pacemaker, Stent Errors In particular, physicians fail to sufficiently document patients previous myocardial infarctions, which is a recipe for claims vulnerability. The NCD has a very specific definition of what constitutes a previous myocardial infarction, he says. If the doctor merely says in the past, the patient had an MI, it s not clear that that statement alone is sufficient to completely fulfill documentation requirements. The doctor has to go into more detail. Physicians could document a pattern of troponin scores that meet the definition of myocardial infarction and note a specific ejection fraction number and New York Heart Association classification to more thoroughly indicate the need for ICD implantation. In fact, Taylor, who recently reviewed hundreds of ICD implantation cases, harbors some suspicion that the JAMA findings may have been affected by poor registry documentation. It is possible, and in my experience even likely, that poor documentation may account for a significant number of supposedly unnecessary ICD placements, he says. Hospitals should take action to make sure that physicians practicing at their facilities are well versed in the Medicare coverage guidelines not just for ICDs, but also for pacemakers, stents and other procedures. Medicare has spelled out coverage requirements for pacemakers in NCD 20.8 and for percutaneous transluminal angioplasty with or without carotid stent placement in NCD That makes the procedures potential RAC and MAC medical-necessity targets because failing to meet and/ Copyright 2013 by Atlantic Information Services, Inc. All rights reserved. Reproduction by any means including photocopy, FAX or electronic delivery is a violation of federal copyright law punishable by fines of up to $150,000 per violation. 62

63 Atlantic Information Services, Inc. or document the defined condition justifying the procedure is grounds for denial. Taylor cites examples of documentation weaknesses with the two procedures: u Pacemakers: Physicians often don t document why they feel patients need a dual-chamber pacemaker rather than a single-chamber device, he says. Dual-chamber devices are used frequently, but physicians have to justify why they re inserting the higher-cost devices. For example, a single-chamber pacemaker may not be adequate to support an active patient s lifestyle, but that won t necessarily be apparent from the medical records unless the physician writes it down. Physicians should also describe the symptoms that justify pacemaker placement. For instance, it s incomplete to document a patient s low heart rate, but fail to indicate whether the patient experienced dizziness or fainting. u Stents: While the NCD for stents may not seem as complex as the NCDs for pacemakers and ICDs, physicians should still document pertinent facts such as whether the patient s angina is refractory to medical management, whether there is objective evidence of myocardial ischemia, and whether the lesion is amenable to angioplasty. Because CMS has published coverage criteria for many procedures, Taylor predicts that hospitals will start proactively taking steps to more thoroughly check the medical-necessity documentation against the NCDs in advance of procedures to determine whether they meet coverage criteria. Hospitals will have to be more diligent in having case managers check whether documentation fulfills Medicare requirements to prevent the risk of denial on the back end, Taylor says. The days when hospitals can afford to lose a $25,000 payment are behind us. Contact Taylor at mtaylor@ehrdocs.com. G Copyright 2013 by Atlantic Information Services, Inc. All rights reserved. Reproduction by any means including photocopy, FAX or electronic delivery is a violation of federal copyright law punishable by fines of up to $150,000 per violation. 63

64 Medical Necessity and Cardiovascular Procedures: What Providers and Payers Need to Know to Protect Their Patients and Bottom Lines Thursday, March 14, 2013 Supplemental Materials Inpatient-only Procedures, Cardiovascular System, 2013 Medicare Fact Sheet: Cardiac Pacemakers: Complying with Coverage and Documentation Requirements Medicare Quarterly Provider Compliance Newsletter: Cardiac Issues Pub , Medicare National Coverage Determinations Manual Sec Implantable Automatic Defibrillators Sec Percutaneous Transluminal Angioplasty (PTA) Sec Cardiac Pacemakers To register additional people for the Webinar; to obtain the phone number, password/pin number or other logistics for the meeting; or to purchase a recording of the Webinar, call AIS at Atlantic Information Services, Inc th Street, NW, Suite 300 Washington, DC

65 Supplemental Materials: Medical Necessity and Cardiovascular Procedures Source: Addendum E, Final Outpatient Prospective Payment System Rule, CY 2013 The cardiovascular procedures represented by the following CPT codes must be performed in an inpatient setting in order to receive payment Atlantic Information Services March 14, 2013

66 Supplemental Materials: Medical Necessity and Cardiovascular Procedures MLN Matters Materials DEPARTMENT OF HEALTH AND HUMAN SERVICES Centers for Medicare & Medicaid Services Medical Learning Network Atlantic Information Services March 14, 2013

67 Cardiac Pacemakers: Complying with Coverage and Documentation Requirements The Centers for Medicare & Medicaid Services (CMS) developed the Comprehensive Error Rate Testing (CERT) Program to produce a national Medicare Fee-For-Service (FFS) error rate, as required by the Improper Payments Information Act. CERT randomly selects a small sample of Medicare FFS claims. CERT reviews claims and medical records from providers/suppliers who submitted them for compliance with Medicare coverage, coding, and billing rules. To better measure the performance of the Medicare claims processing contractors and to gain insight into the causes of errors, CMS calculates not only a national Medicare FFS paid claims error rate but also a provider compliance error rate. The results of the reviews are published in an annual report and semi-annual updates. CMS strives to eliminate improper payments in the Medicare Program to maintain the Medicare trust funds and protect beneficiaries. The CERT Program discovered a large number of errors related to the implantation of cardiac pacemakers. CMS issued a National Coverage Determination (NCD) regarding pacemakers, most recently revised in 2004, which defines the indications for single-chamber and dual-chamber pacemakers. CERT identified a significant number of cases in which a dual-chamber pacemaker was implanted in a patient who had an indication for only a single-chamber device. This fact sheet describes common CERT errors and lists the indications and contraindications for a dual-chamber pacemaker. Common Dual-Chamber Pacemaker Errors Identified Through the CERT Review Process 1. No documentation to support the choice of a dual-chamber rather than a single-chamber pacemaker. 2. Dual-chamber pacemaker implantation in patients with a clear contraindication, such as chronic atrial fibrillation. 1

68 Why Were These Errors Identified? When the record does not support the medical necessity of the dual-chamber pacemaker, Medicare reimbursement for the implantation procedure and the pacemaker is denied and funds are recovered from the hospital. Physicians must clearly state, in the patient s medical record, the reasons for choosing a dual-chamber pacemaker rather than a single-chamber pacemaker. Covered Indications for a Dual-Chamber Pacemaker CMS NCD for pacemakers is contained in the Medicare NCD Manual, CMS Publication , Chapter 1, Section 20.8 at downloads/ncd103c1_part1.pdf on the CMS website. The NCD lists the following covered indications for a dual-chamber pacemaker: 1. Patients in whom single-chamber (ventricular pacing) at the time of pacemaker insertion elicits a definite drop in blood pressure, retrograde conduction, or discomfort; 2. Patients in whom the pacemaker s y n d r o m e ( a t r i a l v e n t r i c u l a r asynchrony), with significant symptoms, has already been experienced with a pacemaker that is being replaced; 3. Patients in whom even a relatively small increase in cardiac efficiency will importantly improve the quality of life (e.g., patients with congestive heart failure despite adequate other medical measures); or 4. Patients in whom the pacemaker syndrome can be anticipated (e.g., in young and active people, etc.). Dual-chamber pacemakers may also be covered for the conditions (defined as Group I.A. in the Medicare NCD Manual), if the medical necessity is sufficiently justified through adequate claims development. Expert physicians differ in their judgments about what constitutes appropriate criteria for dual-chamber pacemaker use. The judgment is that such a pacemaker is warranted in the patient meeting accepted criteria must be based upon the individual needs and characteristics of that patient, weighing the magnitude and likelihood of anticipated benefits against the magnitude and likelihood of disadvantages to the patient. The following are conditions under which cardiac pacing is generally considered acceptable or necessary, provided that the conditions are chronic or recurrent and not due to transient causes such as acute myocardial infarction, drug toxicity, or electrolyte imbalance (in cases where there is a rhythm disturbance, if the rhythm disturbance is chronic or recurrent, a single episode of a symptom such as syncope or seizure is adequate to establish medical necessity): 1. Acquired complete (also referred to as third-degree) Atrioventricular (AV) heart block; 2. Congenital complete heart block with severe bradycardia (in relation to age), or significant physiological deficits or significant symptoms due to the bradycardia; 3. Second-degree AV heart block of Type II (i.e., no progressive prolongation Cardiac Pacemakers: Complying with Coverage and Documentation Requirements 2

69 of P-R interval prior to each blocked beat. P-R interval indicates the time taken for an impulse to travel from the atria to the ventricles on an electrocardiogram); 4. Second-degree AV heart block of Type I (i.e., progressive prolongation of P-R interval prior to each blocked beat) with significant symptoms due to hemodynamic instability associated with the heart block; 5. Sinus bradycardia associated with major symptoms (e.g., syncope, seizures, congestive heart failure), or substantial sinus bradycardia (heart rate less than 50) associated with dizziness or confusion; the correlation between symptoms and bradycardia must be documented, or the symptoms must be clearly attributable to the bradycardia rather than to some other cause; 6. In selected and few patients, sinus bradycardia of lesser severity (heart rate 50-59) with dizziness or confusion; the correlation between symptoms and bradycardia must be documented, or the symptoms must be clearly attributable to the bradycardia rather than to some other cause; 7. Sinus bradycardia is the consequence of long-term necessary drug treatment for which there is no acceptable alternative when accompanied by significant symptoms (e.g., syncope, seizures, congestive heart failure, dizziness, or confusion); the correlation between symptoms and bradycardia must be documented, or the symptoms must be clearly attributable to the bradycardia rather than to some other cause; 8. Sinus node dysfunction with or without tachyarrhythmias or AV conduction block (i.e., the bradycardia-tachycardia syndrome, sino-atrial block, or sinus arrest) when accompanied by significant symptoms (e.g., syncope, seizures, congestive heart failure, dizziness, or confusion); 9. Sinus node dysfunction with or without symptoms when there are potentially life-threatening ventricular arrhythmias or tachycardia secondary to the bradycardia (e.g., numerous premature ventricular contractions, couplets, runs of premature ventricular contractions, or ventricular tachycardia); 10. B r a d y c a r d i a a s s o c i a t e d w i t h supraventricular tachycardia (e.g., atrial fibrillation, atrial flutter, or paroxysmal atrial tachycardia) with high-degree AV block which is unresponsive to appropriate pharmacological management and when the bradycardia is associated with significant symptoms (e.g., syncope, seizures, congestive heart failure, dizziness, or confusion); 11. T h e o c c a s i o n a l p a t i e n t w i t h hypersensitive carotid sinus syndrome with syncope due to bradycardia and unresponsive to prophylactic medical measures; 12. Bifascicular or trifascicular block accompanied by syncope which is attributed to transient complete heart block after other plausible causes of syncope have been reasonably excluded; 3 Cardiac Pacemakers: Complying with Coverage and Documentation Requirements

70 13. Prophylactic pacemaker use following recovery from acute myocardial infarction during which there was temporary complete (third-degree) and/or Mobitz Type II second-degree AV block in association with bundle branch block; 14. In patients with recurrent and refractory ventricular tachycardia, overdrive pacing (pacing above the basal rate) to prevent ventricular tachycardia; or 15. Second-degree AV heart block of Type I with the QRS complexes prolonged. Nationally Non-Covered Indications Whenever the following conditions (which represent overriding contraindications) are present, dual-chamber pacemakers are not covered: 1. Ineffective atrial contractions (e.g., chronic atrial fibrillation or flutter, or giant left atrium); 2. Frequent or persistent supraventricular tachycardias, except where the pacemaker is specifically for the control of the tachycardia; 3. A clinical condition in which pacing takes place only intermittently and briefly, and which is not associated with a reasonable likelihood that pacing needs will become prolonged (e.g., the occasional patient with hypersensitive carotid sinus syndrome with syncope due to bradycardia and unresponsive to prophylactic medical measures); or 4. P r o p h y l a c t i c p a c e m a k e r u s e following recovery from acute myocardial infarction during which there was temporary complete (third-degree) and/or Type II second-degree AV block in association with bundle branch block. 5. All other indications for dual-chamber cardiac pacing for which CMS has not specifically indicated coverage remain nationally non-covered, except for Category B Investigational Device Exemptions (IDE) clinical trials, or as routine costs of dual-chamber cardiac pacing associated with clinical trials, in accordance with CMS Clinical Trial Policy contained in the Medicare NCD Manual, CMS Publication , C h a p t e r 1, S e c t i o n at manuals/downloads/ncd103c1_ Part4.pdf on the CMS website. This fact sheet was current at the time it was published or uploaded onto the web. Medicare policy changes frequently so links to the source documents have been provided within the document for your reference. This fact sheet was prepared as a service to the public and is not intended to grant rights or impose obligations. This fact sheet may contain references or links to statutes, regulations, or other policy materials. The information provided is only intended to be a general summary. It is not intended to take the place of either the written law or regulations. We encourage readers to review the specific statutes, regulations, and other interpretive materials for a full and accurate statement of their contents. December 2010 ICN Cardiac Pacemakers: Complying with Coverage and Documentation Requirements 4

71 Recovery Audit Finding: Cardiac Procedures Provider Types Affected: Inpatient Hospitals Problem Description: MS-DRG Validation requires that diagnostic and procedural information, and the beneficiary s discharge status, (as the hospital codes and reports on its claim) match both the attending physician s description and the information contained in the beneficiary's medical record. Analysis of the Centers for Medicare & Medicaid Services (CMS) Debt Collection System (DCS) identified aberrant billing patterns related to the following MS-DRGs: MS-DRG 228 Other Cardiothoracic Procedures with MCC; MS-DRG 231 Coronary Bypass with PTCA with MCC; MS-DRG 233 Coronary Bypass with Cardiac Catheterization with MCC; MS-DRG 235 Coronary Bypass without Cardiac Catheterization with MCC; MS-DRG 237 Major Cardiovascular Procedures with MCC or Thoracic Aortic Aneurysm Repair; MS-DRG 248 Percutaneous Cardiovascular Procedure with Non Drug-Eluting Stent with MCC or 4+Vessels/Stents; and MS-DRG 250 Percutaneous Cardiovascular Procedure without Coronary Artery Stent with MCC. Reviewers validated these MS- DRGs to determine if the principal and secondary diagnoses, and procedures were assigned inappropriately resulting in payment errors to the hospitals. Examples of Coding Errors: Below are two examples of coding errors. Example 1: An 80-year-old female was admitted through the Emergency Department with ICD-9-CM code (Coronary Atherosclerosis, of Native Coronary Artery) as the principal diagnoses, and ICD-9-CM code (Acute Myocardial Infarction, of Anterolateral Wall, Initial Episode of Care) as the secondary diagnosis. She was taken urgently to the cardiac catheterization lab for angiography which revealed: 1) A normal left main coronary artery; 2) A 99% occlusion of the proximal left anterior descending (LAD) coronary artery, and heavy calcification throughout its remainder, with a mid-course 50% lesion, and another 50% lesion distally; 3) A large circumflex coronary artery with luminal irregularities, but no high-grade obstructions; and 4) A dominant right coronary artery with a proximal 50% stenosis and a midcourse 60% stenosis. Following angiography, she underwent successful primary angioplasty to the proximal LAD lesion, and was begun on medical therapy for the rest of her coronary disease. Auditor Findings: This example demonstrates an error in sequencing the principal diagnosis. As mentioned above, the provider assigned, as the principal diagnosis, ICD-9- CM code (Coronary Atherosclerosis, of Native Artery); and, as the secondary diagnosis, ICD-9-CM code (Acute Myocardial Infarction, of Anterolateral Wall, Initial Episode of Care). Based on the emergency room record, history and physical, progress Medicare Quarterly Provider Compliance Newsletter Volume 3, Issue 1 October

72 notes, consultation reports, and clinical narrative; the reviewer determined that the physician's documentation did not support the principal diagnosis, as coded; and re-sequenced the acute myocardial infarction code (410.01) as the principal diagnosis. This re-sequencing resulted in a MS-DRG change from 248 (Percutaneous Cardiovascular Procedure with Non-Drug- Eluting Stent with MCC or 4+ Vessels/Stents) to MS-DRG 249 (Percutaneous Cardiovascular Procedure with Non-Drug-Eluting Stent without MCC). Example 2: A 76-year-old female admitted with an exacerbation of chronic obstructive pulmonary disease (COPD) and chest pain/ angina with electrocardiographic changes, was later determined to have had an Non-ST Segment Elevation Myocardial Infarction (NSTEMI) secondary to 80-90% obstructive lesions in the proximal and mid LAD. She underwent a Percutaneous Transluminal Coronary Angioplasty (PTCA) with insertion of stents with no complications. Auditor Findings: This example also demonstrates an error in sequencing the principal diagnosis. In this case, the provider assigned diagnosis code (Coronary Atherosclerosis; of Native Coronary Artery) as the principal diagnosis. However, based on the guidance in Coding Clinic, Q2, 2001, pages 8-9, the acute myocardial infarction should have been assigned as the principal diagnosis. The reviewer re-sequenced code (Acute Myocardial Infarction; Subendocardial Infarction; Initial Episode of Care) as the principal diagnosis; resulting in an MS-DRG change from 248 (Percutaneous Cardiovascular Procedure with Non-Drug-Eluting Stent with MCC) to 249 (Percutaneous Cardiovascular Procedure with Non-Drug-Eluting Stent without MCC). Guidance on How Providers Can Avoid These Problems: The overall finding in this review was improper sequencing of the principal diagnosis. By referencing chapter specific Coding Clinic guidelines and clarifications; in both examples, reviewers determined that inappropriate codes were selected for the principal diagnosis. (Coding Clinic, 4th Quarter 2005, page 69 for example 1; and 2nd Quarter 2001, pages 8-9 for example 2) In order to avoid these coding errors in the future, providers should ensure that coders: Review and apply appropriate ICD-9-CM Official Guidelines for Coding and Reporting; Review Coding Clinics related to Cardiac Procedures and follow the chapter specific coding guidelines and all applicable coding clinics; and Review POA guidelines and ensure that indicator for all diagnoses are reported correctly Resources: The American Hospital Association Coding Clinic for ICD- 9-CM is available for purchase at org on the American Hospital Association website. The ICD-9-CM Official Coding Guidelines can be found at doc/cpt/icd9cm_coding_ guidelines_08-09_sm.pdf on the Internet. The ICD-9-CM Official Guidelines for Coding and Reporting, Section II Selection of Principal Diagnosis is available at gov/nchs/data/icd9/icd9cm_ guidelines_2011.pdf on the Internet. The Medicare Program Integrity Manual, Chapter 6, Intermediary MR Guidelines for Specific Services, Section 6.5.3, DRG Validation Review, discusses the DRG validation process and some coding requirements. This manual chapter can be found at Manuals/downloads//pim83c06. pdf on the CMS website. 15 Medicare Quarterly Provider Compliance Newsletter Volume 3, Issue 1 October 2012

73 Recovery Audit Finding: Coronary Bypass with Percutaneous Transluminal Coronary Angioplasty (PTCA)/Cardiac Cath with MCC Provider Types Affected: Inpatient Hospitals Problem Description: The purpose of MS-DRG Validation is to determine that the principal diagnosis, procedures and all secondary diagnoses identified as Complications or Comorbidities (CC) and Major Complications or Comorbidities (MCC) are actually present, correctly sequenced, coded and clinically validated. When a patient is admitted to the hospital, the condition established after study found to be chiefly responsible for occasioning the admission to the hospital should be sequenced as the principal diagnosis. The other diagnosis identified should represent all (MCC/CC) present during the admission that impact the stay. The Present on Admission (POA) indicator for all diagnoses reported must be coded correctly. Reviewers validated for principal diagnosis, secondary diagnosis, and procedure codes affecting or potentially affecting: MS DRG 231 (Coronary Bypass W PTCA W MCC); MS DRG 233 (Coronary Bypass W Cardiac Cath W MCC); and MS DRG 235 (Coronary Bypass W/O Cardiac Cath W MCC). Examples of Coding Errors: Below are two examples of coding errors. Example 1: Following a previous admission for treatment and stabilization of a myocardial infarction and pulmonary edema, a 68-year-old male was currently admitted for a coronary artery bypass graft (CABG) secondary to diagnosed 3 vessel coronary disease (CSD). He had been discharged from the previous admission in order to have some time at home to take care of some personal business before undergoing the CABG. During the present admission, he underwent the CABG and was discharged. Auditor Finding: Although not a current problem for this admission, ICD-9-CM code (acute pulmonary edema) had been coded. The auditor deleted this code for this admission; which changed the MSDRG from 235 to 236 (Coronary Bypass W/O Cardiac Cath W/O MCC and resulted in an overpayment. Example 2: A 43-year-old male, on Highly Active Antiretroviral Therapy (HAART) for HIV, with no history of chronic obstructive pulmonary disease, asthma, or dyspnea, was admitted through the ED for chest pain. During the admission, he had a stress test that was positive with exertional angina, and was discovered to have 2 vessel coronary artery disease (CAD). During the admission, he underwent a 2 vessel coronary artery bypass graft (CABG), remaining on a ventilator for two hours. He was discharged on the fourth postoperative day. Auditor Findings: While the anesthesiology progress note on the day of surgery documented respiratory failure, a subsequent progress note recorded on the first postoperative day stated "no apparent anesthesia related complications; and no other documentation of respiratory failure was present on other progress notes or on the discharge summary. Therefore, the ventilator use was considered part of the normal postoperative recovery process; however ICD-9-CM code (postoperative respiratory insufficiency), which is classified as a MCC, was coded. The auditor deleted this code, which resulted in an MSDRG change from 235 to 236 Coronary Bypass W/O Cardiac Cath W/O MCC. This change yielded an overpayment. Guidance on How Providers Can Avoid These Problems: In example 1, a condition was coded that was not a problem treated or evaluated during the current admission. Coders should refer to the official coding guidelines and the Uniform Hospital Discharge Data Set (UHDDS) definitions to determine when chronic conditions should be coded. In example 2, a normal postoperative condition was inappropriately coded. Coders should query the physician when a documented condition might be part of the normal postoperative recovery process; or if it is, rather, a codeable condition. Medicare Quarterly Provider Compliance Newsletter Volume 3, Issue 1 October

74 Resources: The ICD-9-CM Official Guidelines for Coding and Reporting, Section II Selection of Principal Diagnosis, is available at gov/nchs/data/icd9/icd9cm_ guidelines_2011.pdf on the Internet. The American Hospital Association s (AHA) Coding Clinic for ICD-9-CM is available for purchase at ahacentraloffice.org on the AHA website. The Medicare Program Integrity Manual, Chapter 6, Intermediary MR Guidelines for Specific Services, Section 6.5.3, DRG Validation Review, discusses the DRG validation process and some coding requirements. This manual chapter is available at Manuals/downloads//pim83c06. pdf on the CMS website. The MLN fact sheet titled Present on Admission (POA) Indicator Reporting by Acute Inpatient Prospective Payment System (IPPS) Hospitals clarifies how to apply POA indicators to diagnosis codes for certain healthcare claims. This fact sheet is available at Education/Medicare-Learning- Network-MLN/MLNProducts/ downloads//wpoafactsheet. pdf on the CMS website. Did you know... Are you billing correctly for ordered/referred services? Will you be impacted when CMS turns on the edits for these services? See MLN Matters articles #SE1221, #SE1011, and the MLN fact sheets Medicare Enrollment Guidelines for Ordering/Referring Providers and The Basics of Medicare Enrollment for Physicians Who Infrequently Receive Medicare Reimbursement to learn what you need to do. 17 Medicare Quarterly Provider Compliance Newsletter Volume 3, Issue 1 October 2012

75 Recovery Audit Finding: Cardiac Arrythmia and Conduction Disorders with Complications or Comorbidities Inappropriate Selection of Principal Diagnosis Code Provider Types Affected: Inpatient Hospitals Problem Description: The purpose of Medicare Severity - Diagnosis Related Group (MS-DRG) Validation is to determine that the principal diagnosis, procedures and all secondary diagnoses identified as Complications or Comorbidities (CCs) and Major Complications or Comorbidities (MCCs) are actually present, correctly sequenced, coded, and clinically validated. When a patient is admitted to the hospital, the condition established after study found to be chiefly responsible for occasioning the admission to the hospital should be sequenced as the principal diagnosis. The other diagnosis identified should represent all (MCC/CC) present during the admission that impact the stay. The Present on Admission (POA) indicator for all diagnoses reported must be coded correctly. Reviewers will validate for MS DRG 308 (Cardiac arrhythmia and conduction disorders with MCC) and/or 309 (Cardiac arrhythmia & conduction disorders w CC), principal diagnosis, secondary diagnoses, and procedures affecting or potentially affecting the DRG. These MS-DRGs were selected for validation because previous improper payments have been found by the Centers for Medicare & Medicaid Services (CMS) Top Volume DRGs, Office of Inspector General (OIG), Program for Evaluating Payment Patterns Electronic Report (PEPPER) reports Target Area data for 2 day stays for cardiac arrhythmias. Example 1: An 87-year-old female was admitted through the ED with shortness of breath. In the ED it was noted that the patient was in CHF with an elevated Brain Natriuretic Peptide (BNP). The patient was admitted for diuresis with an admitting diagnosis of Shortness of breath. She had a history of atrial fibrillation and ablation. The patient said that she had not been taking her prescribed Lasix at home. The history and physical impression was CHF. The patient was given IV Lasix during her hospitalization and quickly returned to baseline. An EKG test performed on the patient was read by the computer as atrial fibrillation and read by the physician as in normal sinus rhythm. Final diagnosis on discharge was mild systolic and diastolic congestive heart failure and recent arrhythmia - atrial fibrillation. Finding: Inappropriate selection of the principal diagnosis. Although many similar patients are candidates for observation, in this particular case the details of the medical record supported an inpatient determination so the case was not selected on that basis. The case is displayed because the selection of the principal diagnosis was also incorrect. In this case, the principal diagnosis was changed from ICD-9-CM Diagnosis Code (Atrial Fibrillation) to ICD- 9-CM Diagnosis Code (Acute or Chronic Systolic/Diastolic Heart Failure) based on medical documentation. This change caused a change from MS-DRG 308 (Cardiac Arrhythmia and Conduction Disorders with MCC) to MS-DRG 293 (Heart Failure and Shock without CC/MCC). Guidance on How Providers Can Avoid These Problems: It is important to follow the official coding guidelines for selection of principal diagnosis. When a patient is admitted to the hospital, the condition established after study found to be chiefly responsible for occasioning the admission to the hospital should be sequenced as the principal diagnosis. Other identified diagnoses should represent all conditions, including any MCCs and CCs present during the admission that affect the hospital stay. In accordance with the Uniform Hospital Discharge Data Set (UHDDS) item #11-b, other (secondary) diagnoses is defined as all conditions that coexist at the time of admission, that develop subsequently, or that affect the treatment received and/or the length of stay. Diagnoses that relate to an earlier episode which have no bearing on the current hospital stay are to be excluded. Note that the present on admission (POA) indicator for all diagnoses reported (both principal and secondary) must also be coded correctly. Medicare Quarterly Provider Compliance Newsletter Volume 2, Issue 4 July

76 Resources: The Medicare Program Integrity Manual, Chapter 6, Section 6.5.3A - C is available at Manuals/Downloads/ pim83c06.pdf on the CMS website; Did you know... The condition chiefly responsible for a patient s admission to the hospital should be sequenced as the principal diagnosis. Code only those conditions documented by the physician. Refer to the Medicare Learning Network (MLN) fact sheet "Present on Admission (POA) Indicator Reporting by Acute Inpatient Prospective Payment System (IPPS) Hospitals" for more information. The MLN fact sheet titled Present on Admission (POA) Indicator Reporting by Acute Inpatient Prospective Payment System (IPPS) Hospitals clarifies how to apply POA indicators to diagnosis codes for certain healthcare claims. This fact sheet is is available at gov/outreach-and-education/ Medicare-Learning-Network- MLN/MLNProducts/downloads/ wpoafactsheet.pdf on the CMS website. The ICD-9-CM Official Guidelines for Coding and Reporting, Section II Selection of Principal Diagnosis, is available at icd9cm_guidelines_2011.pdf on the Internet. 11 Medicare Quarterly Provider Compliance Newsletter Volume 2, Issue 4 July 2012

77 Recovery Audit Finding: Improper Coding of Coronary Bypass with Percutaneous Transluminal Coronary Angioplasty (PTCA) with Major Complications and Comorbidities (MCCs) MS-DRGs 231, 233, 235 Provider Types Affected: Inpatient Hospitals Problem Description: The following examples give reasons for adjustments to codes and MS- DRGs in order to align provider payments with Medicare guidelines for the presence of diagnoses and to ensure diagnoses are correctly sequenced, coded, and clinically validated. Example 1: A 68 year old male was admitted for Coronary Artery Bypass Graft (CABG) secondary to 3 vessel Coronary Artery Disease (CAD). As indicated in the discharge summary and History and Physical (H&P), the patient was previously admitted with flash pulmonary edema and ruled in for Myocardial Infarction (MI). He was treated, optimized, and needed a period at home to take care of some personal business prior to his CABG. He was admitted for CABG, and following a CABG, secondary to 3 vessel CAD, he was discharged to home. Auditor Finding: A condition, ICD-9-CM Diagnosis Code (Acute edema of lung unspecified), was coded that was not a current problem on this admission. It was not treated or evaluated. Action: ICD-9-CM Diagnosis Code (Acute edema of lung unspecified) was deleted for this admission. This condition was treated on the patient s prior admission before discharge. This coding change resulted in a change from MS-DRG 235 (Coronary bypass without cardiac cath with MCC) to MS-DRG 236 (Coronary bypass without cardiac cath without MCC) which resulted in an overpayment. Example 2: A 43 year old male was admitted through the Emergency Department (ED) because of chest pain that he was experiencing. He was found to have exertional angina, and he had a positive stress test. The patient was taken to the operating room where he had a 2 vessel Coronary Artery Bypass Graft (CABG) completed secondary to his Coronary Artery Disease (CAD). The patient has a history of Human Immunodeficiency Virus (HIV) and is on Highly Active Antiretroviral Therapy (HAART). After the CABG procedure, the patient remained on a ventilator for 2 hours. The patient did not have any history of Congestive Heart Failure (CHF), Chronic Obstructive Pulmonary Disease (COPD), or asthma. Auditor Finding: The progress note on post operative day 1 stated there was "no apparent anesthesia related complications." The progress note by anesthesiology on post operative day 0 is the only documentation of respiratory failure. No other documentation of respiratory failure is present on the discharge summary or progress notes. Apparently, the anesthesiologist documented a need for the usual mechanical ventilation used during the procedure to continue for 2 hours after the surgery. However, the attending physician did not document respiratory failure. Action: The ICD-9-CM Diagnosis Code (Pulmonary insufficiency following trauma and surgery) was deleted secondary to this being normal to post operative recovery. This deletion resulted in a change from MS-DRG 235 (Coronary bypass without cardiac cath with MCC) to MS-DRG 236 (Coronary bypass without cardiac cath without MCC) which resulted in an overpayment. Guidance on How Providers Can Avoid These Problems: When a patient is admitted to the hospital, the health condition that (after physician assessment) is determined to be chiefly responsible as the cause for the admission should be sequenced as the principal diagnosis (coded as an MS-DRG). Review the official coding guidelines for selection of principal diagnoses and chapter specific guidelines. Refer to coding clinics for advice and guidance All medical documentation entries must be consistent with other parts of the medical record (assessments, treatment plans, physician orders, nursing notes, medication and treatment records, etc.); and with other facility documents such as admission and discharge data and pharmacy records. If an 10 Medicare Quarterly Provider Compliance Newsletter Volume 2, Issue 1 October 2011

78 entry is made that contradicts documentation found elsewhere in the record, clarification should be obtained and documented by the attending physician. Review the ICD-9-CM Coding Manual and the ICD-9-CM Addendums and Coding Clinics about coding guidelines on sequencing and selection of principal diagnosis. Follow coding guidelines and Uniform Hospital Discharge Data Set (UHDDS) definitions of when to code secondary diagnosis and chronic conditions. Do not code diagnoses not documented in the record. Review the entire medical record, including current problems on admission, admitting diagnosis, progress notes, discharge planning note, OT and PT notes and all consults. Identify documentation deficits and the need to query the physician. Looking for the latest Medicare Fee-For- Service (FFS) information? Then subscribe to a Medicare FFS Provider listserv that suits your needs! For information on how to register and start receiving the latest news, go to downloads/mailinglists_factsheet.pdf on the Centers for Medicare & Medicaid Services (CMS) website. Did you know... Medicare Quarterly Provider Compliance Newsletter Volume 2, Issue 1 October III