The Useful 5: Regulatory Roundup for Rev Cycle Leaders

HealthLeaders' regulatory round up series highlights five essential governing updates that cover every aspect of the revenue cycle that leaders need to know. Check back in each month for more regulatory updates.

The revenue cycle is complex, detailed, and always changing, so staying on top of regulatory updates and latest best practices requires revenue cycle leaders' constant attention in this ever-changing industry.

In this revenue cycle regulatory roundup, there were an ample number of updates published by CMS and the OIG in July, including OIG audits and proposed payment rules.

Here are the five updates you should review.

Transfer claims are not getting you more money from Medicare.

The OIG published a review of the financial impact of Medicare’s transfer policy and reduced outlier threshold on Medicare total payments for transfer claims as compared to what hospitals would have been paid if the beneficiary had been discharged instead of transferred.

The OIG found that the reduced outlier threshold for transfer claims did not have a significant impact on total Medicare payments.

Under the transfer policy, Medicare decreased MS-DRG rate payments by $10.8 million. However, the reduced outlier threshold led to an increase in outlier payments by $13.7 million, resulting in a net increase of $2.9 million in total Medicare payments for transfer claims compared to what hospitals would have been paid if the beneficiaries had been discharged. This total was not significant enough to indicate a need for policy changes, and the OIG therefore had no recommendations.

2023 Medicare physician fee schedule proposed rule was published this month.

CMS published the 2023 Medicare physician fee schedule (PFS) proposed rule. The rule proposes decreasing the conversion factor down from $34.61 in 2022 to $33.08 in 2023. Other proposals in the rule include but are not limited to:

• Adopting coding/documentation changes for E/M visits (including hospital inpatient, observation, emergency department, and more) that align with changes made by the AMA CPT Editorial Panel for January 1, 2023. This includes eliminated use of history and exam to determine code level, revised interpretive guidelines for levels of medical decision-making, and the choice of medical decision-making or time in determining code level.
• Delaying by one year the split-shared visits policy that was finalized in 2022 for the definition of substantive portion as more than half the total time.
• Extending the time that telehealth services are temporarily included on the telehealth services list during the PHE but are not included on a Category I, II, or III basis for 151 days following the end of the PHE
• Creating a new general behavioral health integration service that is personally performed by clinical psychologists or clinical social workers to account for monthly care integration where the mental health services furnished by these provider types are the focal point of care integration.
• Making an exception to direct supervision requirements under “incident to” regulations at 42 CFR 410.26 allowing behavioral health services provided under general supervision of a physician or non-physician practitioner (NPP) when the services or supplies are provided by auxiliary personnel incident to the services of a physician or NPP.

CMS is seeking comments on a variety of topics from the rule, such as how to improve global surgical package valuation and pay more accurately for global surgical packages under the PFS, the potential use of the proposed and updated Medicare Economic Index cost share weights in calibrating payment rates, changes in coding and policies regarding skin substitutes, and more.

CMS published a press release, fact sheet on the PFS rule as whole, fact sheet on the quality payment program changes, fact sheet on Medicare shared savings program proposals, and a blog post on behavioral health changes on the same date.

The 2023 outpatient prospective payment system (OPPS) proposed rule was also released this month.

CMS released the 2023 OPPS Proposed Rule. While the rule proposes paying for drugs and biologicals acquired through the 340B program at average sales price (ASP) minus 22.5%, it notes that the Supreme Court’s decision in American Hospital Association v. Becerra now prevents CMS from varying payment rates for drugs and biological in the way the 340B payment currently varies.

CMS did not have sufficient time before publishing the proposed rule to account for the Supreme Court’s decision, and it noted in the fact sheet for the rule that it anticipates applying a rate of ASP plus 6% for 340B drugs in the final rule. The rule proposes updates to both OPPS and ambulatory surgical center payment rates by 2.7% for 2023. Other proposals in the rule include:

• Establishing provider enrollment procedures and payment rates for rural emergency hospitals (REH)
• Removing 10 services from the inpatient-only list and adding one service to the ambulatory surgical center covered procedures list
• Continuing coverage for behavioral health services furnished remotely by hospital staff to beneficiaries in their homes beyond the end of the PHE as long as the beneficiary receives an in-person service once every 12 months
• Adding facet joint injections and nerve destruction as an additional service that would require prior authorization

CMS is seeking comments on a variety of topics within the rule, including whether there is additional data CMS could release on mergers/acquisitions/consolidations/changes in ownership in addition to the hospital and skilled nursing facility data CMS current releases. It also seeks comments on methodologies for counting organs to calculate Medicare’s share of organ acquisition costs and comments on payment approaches to use for software services. Comments are due on September 13.

CMS published a Fact Sheet on the rule, Fact Sheet on the REH provisions, and Press Release to accompany the rule. 

Tighten up your billing for critical care services as health system faces new heat.

The OIG published a review of whether Lahey Clinic, Inc., complied with Medicare requirements when billing for critical care services performed by its physicians.

The OIG found that Lahey did not comply with Medicare billing requirements for 56 of the 92 critical care services reviewed. It said 54 of the critical care services billed were for patients whose conditions did not indicate that critical care services were necessary or for which the physician did not directly provide services at the level of care required for critical care services.

The OIG also found two critical care services which were billed using an incorrect CPT code. The OIG estimated that as a result of these errors, Lahey received $6,015 in unallowable Medicare payments. 

The OIG recommended Lahey refund the $6,015 in overpayments, and it made procedural recommendations for Lahey to strengthen its policies and procedures. Lahey concurred with the findings for 16 of the 56 services found to be in error, but it stated that the remaining 40 critical care services were justified. The OIG said that Lahey did not provide any additional medical record documentation to support its arguments for those 40 services and therefore it maintained its original findings.

CMS is considering a new payment system.

CMS published a Report to Congress regarding a potential unified prospective payment system for post-acute care (PAC). This type of payment system was included as a provision of the Improving Medicare Post-Acute Care Transformation (IMPACT) Act of 2014.

In this report, CMS presented a prototype for what the unified PAC PPS could be and the data analysis used to design and calibrate it. Because this type of PPS is in the very early stages of development, the report does not include any legislative recommendations, as CMS will be performing additional analysis on this topic. However, the report provides an early framework of what could be coming in terms of PAC payments in future years.