Agenda Based on Medicare / CMS Guidelines

January 2017 Jean C. Russell, MS, RHIT jrussell@epochhealth.com 518-369-4986 Richard Cooley, BS, CCS, rcooley@epochhealth.com 518-430-1144 Matthew H. Lawney, MSPT, MBA, CHC mlawney@epochhealth.com 845-642-6462

2 Agenda Based on Medicare / CMS Guidelines Provider-based Departments and Clinics Summary of the Final 2017 OPPS Rules as a result of Section 603 of the Bipartisan Act of 2015 and the 21 st Century Cures Act Impact on Selected Examples The PO and PN modifiers and POS 19 Additional Information Questions/Discussion

3 Objectives Review the changes in the 2017 OPPS final and interim rule as a result of the Bipartisan Budget Act Section 603 Review the requirements for being an excepted hospital/provider-based department Go over what it means to be non-excepted Identify how these claims are paid by Medicare now and will be paid in 2017 Discuss when these changes will be implemented Identify what the changes will mean for billing for hospital-based excepted and non-excepted departments

4 Provider-Based Departments

5 Increasing Trend Towards Physician Employment and Hospital-based Clinics Between July 2012 and July 2015 Hospital ownership of physician practices increased by 86% While the percentage of hospitalemployed physicians increased by almost 50% https://www.cms.gov/medicare/medicare-fee-for-service- Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices-Items-Federal Register / Vol. 81, No. 219 / Monday, November 14, 2016 / Rules and Regulations

6 Locations- Changed Definition On campus Located in the hospital s main building or within 250 yards of the main building Off campus Not located on or within 250 yards of the campus Includes remote and satellite facilities Criteria is that the service area is considered a provider-based clinic per Medicare guidelines Refer to 42 CFR 413.65 Requirements for a determination that a facility or an organization has provider-based status

7 42 CFR 413.65 Criteria for Provider-Based Status The hospital as a whole, including all of its PBDs, must meet all Medicare conditions of participation and conditions of payment that apply to hospitals. In addition, a hospital bills for services furnished by its provider-based facilities and organizations using the CMS Certification Number of the hospital

8 42 CFR 413.65 Criteria for Provider-Based Status The off-campus outpatient department must meet certain requirements, including, but not limited to: Generally located within a 35-mile radius of the campus of the main hospital; Fully integrated financial operations - Financial operations are fully integrated with shared income and expenses. Costs are reported as a cost center of the main provider.

9 42 CFR 413.65 Criteria for Provider-Based Status Integrated clinical services: For example, the professional staff must have clinical privileges at the main hospital, The medical records must be integrated into a unified retrieval system (or cross reference) of the main hospital), and Patients treated at the off-campus outpatient department who require further care must have full access to all services of the main hospital; and Held out to the public as part of the main hospital. Source: 42 CFR 413.65 Requirements for a determination that a facility or an organization has provider based status

10 CMS 855 Enrollment Form Beginning March 2011 and ending March 2015, CMS conducted a revalidation process where all actively enrolled hospitals were required to complete a new CMS 855 enrollment form to: 1. Initially enroll in Medicare 2. Add a new practice location 3. Revalidate existing enrollment information Hospitals are required to include all practice locations on the CMS 855 enrollment form

11 Addition of a new PBD A hospital that wishes to add an off-campus PBD must submit an amended Medicare provider enrollment form detailing the name and location of the facility within 90 days of adding it to the hospital The information requires specifying whether the PBD is off-campus or on-campus Additionally a hospital may ask CMS to make a determination that a facility meets the requirements of a PBD by submitting a voluntary attestation to its MAC that will be reviewed by the CMS regional office

12 What happens if no Attest is Filed and PBD does not meet Requirements If no (voluntary) attestation is submitted and CMS later determines that the facility did not meet the requirements for PBD-based status CMS will recover the difference between the amount of payments actually made and the amount of payments that CMS estimates should have been made in the absence of compliance with the provider-based requirements for all cost reporting periods subject to reopening.

13 What happens if Attest is Filed and PBD does not meet Requirements If an attestation is submitted and CMS later determines that the facility did not meet the requirements for PBD-based status CMS will recover the difference between the amount of payments actually made and the amount of payments that CMS estimates should have been made in the absence of compliance with the provider-based requirements since the date the attestation was submitted.

14 Solicitation of Additional Information CMS is seeking public comments on whether hospitals should be required: 1. To separately identify all individual excepted off-campus PBD locations, 2. The date that each excepted off-campus PBD began billing and 3. The clinical families of services that were provided by the excepted off-campus PBD prior to the November 2, 2015 date of enactment. CMS would expect to collect this information through a newly developed form on the CMS Web site. Not required for 2017

15 The Final OPPS 2017 Rule Resulting from Section 603 of the Bipartisan Act of 2015

16 Section 603 of the Bipartisan Act of 2015 The Bipartisan Act Section 603 proposed alternative payment provisions for off-campus provider-based departments Initially passed to cut reimbursement to hospital departments Goal is to provide funding to decrease Medicare spending and keep Medicare Part B premiums down Effect will ultimately be to keep off-campus hospital department reimbursement site neutral

17 Section 603 of the Bipartisan Act of 2015 Applies to any provider-based off-campus department that was not already billing as a hospital department as of November 2, 2015 The impact has been implemented for reimbursement starting January 1, 2017 Grandfathered departments those billing as offcampus hospital departments prior to November 2, 2015 in the same location and under the same ownership are not subject to the new billing requirements and reimbursement reduction

18 Section 603 of the Bipartisan Act of 2015 Section 603 only applies to services payable under OPPS (APCs) For example, does not apply to PT or mammography, which are paid on the MPFS Does not apply to CAHs (Critical Access Hospitals) who are not payable under OPPS

19 Site-Neutral Payments AHA and the hospital associations have strongly argued that site-neutral payments are not appropriate for hospitals due to the increased regulatory requirements faced by hospitals such as: 24/7 emergency care, Disaster preparedness and Uncompensated care Among many other things

20 Current Payment for PBDs Medicare services in an off-campus department of a hospital are currently paid on two claims: The technical claim for the institutional services paid under APCs (OPPS) The professional claim for the professional services paid the MPFS facility payment billed with POS 19 Same services in a private physician s office: The professional claim paid the MPFS non-facility payment billed with POS 11

21 Hospital PBD Billing Split Billing Professional Bill Technical Bill

22 Split Billing Comparison for Excepted PBD Private Physician Office Excepted PBD/Clinic Clinic visit 99213 EKG 93000 Vaccination 90471 Td vaccine 90714 Billed 1500 POS 11: 99213 - $70.81 93000 - $16.44 90471 - $24.29 90714 - $0 Total - $111.54 Co-pay 20% (~$22) Clinic visit 99213 G0463 EKG 93005-93010 Vaccination 90471 Td vaccine 90714 Billed 1500 POS 19: 99213 - $50.17 93010 - $ 8.39 Total - $58.56 Billed 1450 (UB): G0463 - $102.12 93005 - $0 90471 - $42.31 90714 - $0 Total - $144.43 Total $202.99 Co-pay ~ 20%, $40

23 Section 603 Bipartisan Budget Act of 2015 Enacted November 2, 2015 This Section required that certain off-campus outpatient PBDs no longer be considered an OPD service for purposes of payment These locations have to instead be paid under the applicable payment system of Medicare Part B Original estimated impact was $9.3 billion reduction in payment over a 10-year period New estimate is roughly $50 million in CY 2017 alone based on the new payment rules

24 2017 OPPS Final Rule 1. Defines the services impacted by Bipartisan Act 603 2. Lays out what is excepted from the new payment system 3. Spells out how an off campus PBD can maintain it s excepted status 4. Establishes how the non-excepted services will be paid 5. Solicits comments for the interim final rule contained within the rule

25 Definitions 42 CFR 413.65(a)(2) defines campus to mean, the physical area immediately adjacent to the provider s main buildings, other areas and structures that are not strictly contiguous to the main buildings but are located within 250 yards of the main buildings, and any other areas determined on an individual case basis, by the CMS regional office, to be part of the provider s campus. [No change to this definition at this time ] Note that CMS suggests hospitals use a surveyor report or other appropriate documentation to ensure off-campus PBDs are within 250 (straight line) yards of the main or remote campus

26 Definitions 42 CFR 413.65 defines a remote location of a hospital as a facility or an organization that is either created by, or acquired by, a hospital that is a main provider for the purpose of furnishing inpatient hospital services under the name control of the main provider, in accordance with the provisions of this section. A remote location of a hospital comprises both the specific physical facility that serves as the site of services for which separate payment could be claimed under the Medicare or Medicaid program, and the personnel and equipment needed to deliver the services at that facility. The Medicare conditions of participation do not apply to a remote location of a hospital as an independent entity.

27 Definitions 42 CFR 412.22(h) defines a satellite facility to mean a part of a hospital that provides inpatient services in a building also used by another hospital, or in one or more entire buildings located on the same campus as buildings used by another hospital.

28 Remote Locations Remote and satellite locations and those PBDs within 250 yards of a remote location are not considered on campus They are considered off campus However, for now at least, they are excepted off campus PBDs

29 Excepted Services Excepted Pertains to services and locations that will continue to be split billed and paid the same way as they are now 1. Dedicated emergency departments 2. On-campus PBD locations 3. Remote and Satellite Locations 4. PBD (provider-based departments) located at the main or a remote campus or within 250 yards of the main or remote campus 5. Those that were billing in the same location under the same ownership under OPPS prior to 11/2/2015 Grandfathered

30 Excepted Emergency Departments Dedicated EDs must meet at least one of the following: 1. Licensed by the State in which it is located under applicable State law as an emergency room or emergency department; 2. Held out to the public (by name, posted signs, advertising, or other means) as a place that provides care for emergency medical conditions on an urgent basis without requiring a previously scheduled appointment; or

31 Excepted Emergency Departments 3. During the calendar year immediately preceding the calendar year in which a determination under this section is being made, based on a representative sample of patient visits that occurred during that calendar year, it provides at least one-third of all of its outpatient visits for the treatment of emergency medical conditions on an urgent basis without requiring a previously scheduled appointment. Based on existing regulations, an ED may furnish both emergency and nonemergency services as long as the requirements under 489.24(b) are met.

32 Excepted Emergency Departments All services furnished in a dedicated ED, whether or not they are emergency services, are currently excepted from the new reduced payments regardless if relocated

33 Relocated or Expanded Services Excepted off-campus PBDs are only excepted as they existed on 11/2/2015. That is, the specific physical facility and location (mailing address including Unit number, Suite and/or Room) must be the same PBDs that move or relocate from the physical address listed on the provider s enrollment form as of 11/2/2015 will no longer be excepted Cannot move into another suite at the same address and retain the excepted status Exceptions will be made only for extraordinary circumstances, such as natural disasters and/or Federal or State requirements to move which will be rare and reviewed on a case by case basis

34 Extraordinary Circumstances for Relocation Exception CMS recently (1/6/2017) released a download PDF with information on how to request a relocation exception due to extraordinary circumstances Primary information is on pages 79704-79706 of the OPPS 2017 final rule Written requests for a relocation exception due to extraordinary circumstances should be submitted to the appropriate CMS Regional Office Priority will be given to relocations between 11/2/2015 and 12/31/2016 https://www.cms.gov/medicare/medicare-fee-for-service- Payment/HospitalOutpatientPPS/Downloads/Subregulatory-Guidance-Section-603-Bipartisan- Budget-Act-Relocation.pdf

35 Extraordinary Circumstances for Relocation Exception The Regional Office will respond in writing either approving or denying the request The MAC will be copied on the reply No appeal is allowed, the decision will be final Requests for exceptions for relocations between 11/2/2015 and 12/31/2016 must be submitted via email no later than January 31, 2016 Approvals will be effective January 1, 2017 If approved, contact the MAC for instructions on how to rebill these claims

36 Extraordinary Circumstances for Relocation Exception Requests for exceptions for relocations on or after 1/1/2017must be submitted no later than 30 days after the extraordinary event occurred Approvals will be communicated by the Regional Office along with the effective date The effective date will be the later date of either the relocation or the date the request was submitted Suggested minimum information and CMS Regional Office email addresses are included in the PDF

37 Clinical Family of Services CMS DID NOT ADOPT THIS RULE It was proposed that the clinical family of services excepted for an off-campus PBD must remain the same Exceptions would have been limited to the services paid under OPPS that were furnished prior to 11/2/2015 based on clinical families of service CMS defined 19 clinical families of hospital outpatient services (Table 21 of the proposed rule) Services in clinical families billed prior to the date would be excepted, services in clinical family not billed prior to that date would not have been excepted

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39 Clinical Family of Services This requirement would have been administratively burdensome for hospitals and CMS Accordingly, we are not finalizing this proposal at this time. However, we intend to monitor service line growth and, if appropriate, may propose to adopt a limitation on the expansion of services or service lines in future rulemaking. In other words They reserve the right to change their mind

40 Change of Ownership If a Medicare-participating hospital, in its entirety, is sold/merges with another hospital, a PBD s provider based status generally transfers to new ownership as long as the transfer would not result in any material change of provider-based status. A provider-based approval letter for such a department would be considered valid as long as the new owners accept the prior hospital s provider agreement. And the main provider ownership is also transferred.

41 Senate Passes 21 st Century Cures Act On December 13 2016 the President approved the 21 st Century Cures Act It includes some exceptions in Sections 16001 and 16002 Preliminary guidance has just been released by CMS (January 6, 2017), additional guidance will be forthcoming Source: https://www.cms.gov/medicare/medicare-fee-for-service- Payment/HospitalOutpatientPPS/Downloads/Sections-16001-16002.pdf

42 Senate Passes 21 st Century Cures Act Section 16001 Continuing excepted payments for mid-build off-campus outpatient departments In order to qualify, the Secretary must have received an attestation that a new department was being formed as a PBD based on the regulations prior to December 2, 2015 These are then excepted and will report modifier PO rather than PN and continue to be paid in the current manner

43 Senate Passes 21 st Century Cures Act Section 16001 Continuing excepted payments for mid-build off-campus outpatient departments Otherwise, those that did not meet the attestation requirements shall report PN modifier in CY 2017 These providers must submit an attestation no later than February 13, 2017 with a written certification signed by the CEO or COO of the main provider Starting in CY 2018 those that meet the requirements will then be considered excepted

44 Senate Passes 21 st Century Cures Act Section 16001 Continuing excepted payments for mid-build off-campus outpatient departments In order to be considered for the mid-build exception, before November 2, 2015 the main provider had to have had a binding written agreement with an outside unrelated party for the construction of the department

45 Senate Passes 21 st Century Cures Act Section 16002 Treatment of cancer hospitals in off-campus departments Off-campus PBDs of a hospital paid under section 1886(d)(1)(B)(v) of the Act are excepted and excluded if the department met the requirements between November 2, 2015 and December 31, 2016 and the Secretary receives an attestation no later than February 3, 2017. For those that met these requirements after December 31, 2016 the attestation must be received no later than 60 days after the date such requirements are first met.

46 The Interim Final Rule Payment Methodology for Non-Excepted PBDs

47 Payment Methodology CMS proposed to utilize the MPFS payment methodology for non-excepted off-campus PBD and/or services That is, they would have been paid as they would if they were a private physician office Billed globally on a 1500 only In the final rule they modified the methodology with an interim final rule, subject to a comment period This new payment methodology will remain in effect for 2017 and 2018 At which time CMS may develop a new methodology

48 Introducing the PN modifier PN Non-excepted service provided at an off-campus, outpatient, provider-based department of a hospital The good news Non-excepted PBD s will continue to split bill Professional claim submission and payment will remain the same The bad news Facility claim will be reported with a PN modifier and will be reimbursed 50% of the OPPS payment for most services The PN modifier will trigger payment under the newly adopted rates for non-excepted items and services The Interim Final Rule with this information is included in Section X.B. of the OPPS 2017 Final Rule

49 Payment Methodology for Non-Excepted PBD Services Currently the MPFS has two separate payments Facility rate Professional component only Non-facility rate Includes the Professional and Technical component New site-of-service specific rates for the technical component of the MPFS services New rate will be 50% of the OPPS rate for each nonexcepted item or service with some exceptions A new fee schedule and/or additional column with the rates has not been provided by CMS

50 Exceptions to the New Payment System for Non-excepted PBDs 1. Non-OPPS services (e.g., therapies, mammography) will be billed and paid in the same manner as they have been billed prior to these changes, i.e., the MPFS 2. Drugs separately payable drugs will continue to be paid based on ASP + 6% and packaged drugs will still be packaged (not paid) 3. No change for majority of preventative services 4. Laboratory services separately paid under the CLFS will continue to be paid in the same manner and packaged labs will still be packaged 5. Radiation therapy will need to move to the MPFS G HCPCS codes and will be paid entirely on the MPFS rates 6. Partial Hospitalization will be paid at the CMHC per diem rate

51 PN Modifier Payments There is no published table with the PN modifier facility payments Need to create a table for contract management Many services will be 50% of the OPPS payment Other services will remain at the MPFS rate (like PT, OT, ST, mammography and preventative services) Lab service it will remain at the CLFS rate Drugs (assume status G and K) will remain at the OPPS rate, status L may continue to be paid at cost Radiation tx will be paid on the G HCPCS codes and MPFS PHP services will be paid on the CMHC per diem rate

52 PN Modifier Adjustments CMS is not adopting several payment adjustments for non-excepted PBDs that are available for OPPS PBDs Outlier payments Rural sole community hospital (SCH) adjustment Cancer hospital adjustment Transitional outpatient payments Hospital outpatient quality reporting payment adjustments Inpatient hospital deductible cap for a single outpatient service

53 PN Modifier Services Hospital outpatient services identified with the PN modifiers will continue to be reflected on the PS&R (Provider Statistical and Reimbursement Report) Should not impact 340b drug payments Supervision rules will be unchanged Claims will be otherwise the same as the current technical/facility claim

54 PN Modifier Services Institutional claim will still be subject to the same Outpatient Code Editor and OPPS Pricer rules including the NCCI/PTP and MUE edits and other bundling rules for hospital outpatient services The 50% OPPS reduction is supposed to be a transitional policy until CMS has more precise data to better identify and value non-excepted PBD services Table X.B.1 compares the 2016 OPPS payment to the MPFS payment and shows how CMS came up with the 50% reduction

55 Review of the Impact of these Changes for Non- Excepted PBDs

56 Specific Code Payments for Non-Excepted PBDs G0463 Outpatient clinic visit The most common outpatient reported code: 50% of OPPS payment of $106.56 or $53.28 Loss of $53 per visit Radiation Therapy will need to report the MPFS G codes (status B codes for OPPS) in a non-excepted PBD, e.g., G6003-G6015 Example IMRT rad tx: OPPS reports 77385/77386 $494.42 MPFS reports G6015 $327.94 Loss of $166.48

57 Split Billing Comparison for Excepted versus Non-Excepted PBD Excepted Service in a PBD Clinic visit 99213 G0463 EKG 93005-93010 Vaccination 90471 Td vaccine 90714 Billed 1500 POS 19: 99213 - $50.17 93010 - $ 8.39 Total - $58.56 Billed 1450 (UB): G0463 PO - $106.56 93005 PO - $0 90471 PO - $53.15 90714 PO - $0 Total - $159.71 Non-Excepted PBD Clinic visit 99213 G0463 EKG 93005-93010 Vaccination 90471 Td vaccine 90714 Billed 1500 POS 19: 99213 - $50.17 93010 - $ 8.39 Total - $58.56 Billed 1450 (UB): G0463 PN - $53.28 93005 PN - $0 90471 PN - $26.58 90714 PN - $0 Total - $79.86 Overall reduction of $79.86 on the facility component, no change to the professional component

58 Major joint injection (20610) w/ 16 mg of synvisc (J7325): 20610-PO, inject joint and J7325-PO x 16, synvisc excepted, UB and 1500 POS 19 - $230.91+drug payment 20610-PN, inject joint and J7325-PN x 16, synvisc non-excepted, UB and 1500 POS 19 - $115.46+drug payment

59 EKG Reporting for tracing and reading: 93000, complete office setting, POS 11 - $16.44 93005-PO, tracing and 93010, interpretation excepted, UB and 1500 POS 19 (only service provided) - $54.53+$8.39=$62.92 93005-PN, tracing and 93010, interpretation non-excepted, UB and 1500 POS 19 (only service provided) - $27.27+$8.39=$35.66

60 Remicade 100 mg infusion: J1745-POx100, 96413-PO and 96415-PO, infusion excepted, UB and 1500 POS 19 - $279.33+$53.15 and drug payment J1745-PNx100, 96413-PN and 96415-PN, infusion non-excepted, UB and 1500 POS 19 - $139.67+$26.58 and drug payment

61 Off Campus Provider-Based Departments Modifier PO as compared to Modifier - PN POS 19

62 Off Campus PBD Reporting Technical Claim Modifier PO created to reported on each code payable under APCs PO (2015/2016 definition) - Services, procedures and/or surgeries provided at off-campus providerbased outpatient departments Voluntary for 2015; Required for 2016 Professional Claim Place of Service (POS) POS 22 - On-campus outpatient hospital services POS 19 - Off-campus outpatient hospital services POS 19 required starting 2016

63 Changes for 2017 Changed the definition of PO modifier with the addition of the PN modifier PO - Excepted service provided at an off-campus, outpatient, provider-based department of a hospital PN - Non-excepted service provided at an offcampus, outpatient, provider-based department of a hospital Essentially all OPPS/APC payable service provided in an off-campus PBD on the technical claim will need either the PO or PN modifier

64 PO Modifier FAQ CMS has released information through a FAQ on CMS web Site Some key points from the FAQ: CAH s do not need to report the PO modifier Any service paid outside of OPPS (APCs) does not need the PO modifier (e.g., lab test with status indicator A, PT paid on the MPFS) The PO modifier does not need to be reported to Medicare Advantage payers unless they require it The PO modifier should be processed after all other modifiers impacting reimbursement are applied (e.g., 99214-25-PO) The January 1, 2016 requirement is based on the claim date of service Source: https://www.cms.gov/medicare/medicare-fee-for-service-payment/hospitaloutpatientpps/downloads/po-modifier-faq-1-19-2016.pdf

65 What the PO Modifier and POS 19 Do Not Identify CMS noted in the 2017 OPPS Final Rule that, while the modifier identifies that the service was provided in an off-campus PBD, It does not identify the type of PBD in which services were furnished, Nor does it distinguish between multiple PBDs of the same hospital. Hence the possible requirement that is proposed regarding provision of additional information

66 Final Words

67 Section 603 of the Bipartisan Act of 2015 Many questions are still unresolved: How will this impact Medicaid reimbursement How about Medicare MCOs What payment system will ultimately be used starting in 2019 and beyond

68 Will it make sense to take on clinics in the future It may still make sense to take on new hospital based off-campus clinics even if the reimbursement increase is limited These clinics can utilize certain hospital advantages such as 340B drug program The practices can still be reported in the ancillary services or outpatient services section of the Medicare cost report This outpatient department would not be treated as a non-reimbursable department on the Medicare cost report

69 Other Alternatives to Consider for Non-Excepted PBDs Off-campus PBDs that are not excepted may want to consider enrolling as an alternative facility, e.g.: Free-standing Physician Group Practice Ambulatory Surgery Center (ASC) Community Mental Health Clinic (CMHC) To make a change the PBD must still meet all the Medicare requirements and conditions of participation for the alternative

70 Questions and Discussion

71 Jean Russell Contact Us Phone: 518-369-4986 Email: JRussell@EpochHealth.Com Richard Cooley Phone: 518-430-1144 Email: RCooley@EpochHealth.Com Matt Lawney Phone: 845-642-6462 Email: mlawney@epochhealth.com

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