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This week's Medicare updates include billing and coding updates for COVID-19 booster shots, new items on the OIG Work Plan, a proposed decision memo on an NCD for Transvenous (Catheter) Pulmonary Embolectomy, and more!
A version of this article was first published August 25, 2021, by HCPro's Revenue Cycle Advisor, a sibling publication to HealthLeaders.
On August 11, CMS published a Proposed Decision Memo regarding the removal of the NCD for Transvenous (Catheter) Pulmonary Embolectomy (NCD 240.6). CMS would instead allow MACs to make coverage determinations for this procedure.
There is a 30-day comment period on this decision which closes on September 10.
Medicare Updates Coding for COVID-19 Booster Shots
On August 16, CMS published a Special Edition MLN Connects regarding additional doses of COVID-19 vaccines. It included links to the revised EUAs for the Pfizer and Moderna COVID-19 vaccines which now allow for a third dose.
On August 19, CMS updated its COVID-19 Vaccines and Monoclonal Antibodies webpage with new codes for third doses of the Pfizer (0003A) and Moderna (0013A) COVID-19 vaccines. Payment for the third doses of these vaccines will remain at $40.
Updated OIG Work Plan
On August 16, the OIG updated its Work Plan with the following new item:
Medicare Paid New Hospitals Three Times More for Capital Costs Than They Would Have Been Paid Under the IPPS
On August 16, CMS published a Report regarding the potential cost savings to Medicare if the exemption for new hospitals from payment for capital costs under the IPPS were removed and capital payments to new hospitals were made under the IPPS instead of through cost reimbursement. The OIG identified significant potential savings, as it found that new hospitals were paid three times more under this exception than they would be if they had been paid for capital costs under the IPPS.
The exemption exists because CMS said hospitals may not have adequate Medicare utilization in the first two years and may have incurred significant start-up costs. However, the OIG said it found that average Medicare-related capital costs were only 3% higher and average Medicare utilization was only 15% lower for new hospitals in their first two years than in the subsequent two years of operation. The OIG also said most of the new hospitals in its review were also part of chain organizations that might have been able to provide reserve capital to the new hospitals if necessary.
The OIG recommends CMS review the findings in the report and possibly change its regulations to require new hospitals to have Medicare capital costs paid through the IPPS with an option for payment adjustments or supplemental payment if necessary. CMS concurred with the recommendation to review the findings and said it will determine whether any modifications to this policy should be proposed in future rule-making.
Comparison of Average Sales Prices (ASP) and Average Manufacturer Prices (AMP): Results for the First Quarter of 2021
On August 17, the OIG published a Report regarding drugs for which the ASP exceeds the AMP by 5% or more for two consecutive quarters or three of the previous four quarters. When this happens, CMS substitutes 103% of the AMP for the ASP-based reimbursement. In the first quarter of 2021, six drug codes met this price substitution criteria. Six additional codes exceeded the 5% threshold but were identified as being in short supply. Another five codes had ASPs exceeding the AMPs by at least 5% in the first quarter of 2021 but didn't meet other price substitution criteria. The OIG will provide these results to CMS for review.
Biden-Harris Administration Requires COVID-19 Vaccines for All Nursing Home Staff
On August 18, CMS published a Press Release to announce that it will require all staff at Medicare and Medicaid-participating nursing homes nationwide to be vaccinated against COVID-19. CMS said it will undergo the necessary steps in the rule-making process over the next few weeks to finalize this policy, and it strongly encourages nursing home residents and staff members to get vaccinated in the interim.
Update to Nursing and Allied Health Education Medicare Advantage Payment Rates - CY 2019
On August 19, CMS published One-Time Notification Transmittal 10953 regarding information for the MACs on payment rates to use when computing the CY 2019 nursing and allied health Medicare Advantage add-on payments.
Effective date: November 19, 2021
Implementation date: November 19, 2021
Update to the Internet Only Manual Medicare Claims Processing Manual, Chapter 3, Section 40.2.4 IPPS Transfers Between Hospitals
On August 19, CMS published Medicare Claims Processing Transmittal 10952 regarding updates to the manual to change the language for acute care and post-acute care transfers and discharge patient status codes so the language in the manual is consistent with the definitions of discharges and transfers as defined in 42 CFR 412.4(a) and (b).
Effective date: September 20, 2021
Implementation date: September 20, 2021
Kidney Care Choices (KCC) Comprehensive Kidney Care Contracting (CKCC) - Payment and Benefit Enhancements - Implementation
On August 19, CMS published Demonstrations Transmittal 10715, which rescinds and replaces Transmittal 10662, dated March 10, 2021, to revise the background section and to revise business requirements 11915.8, 11915.13.3, 11915.13.4, 11915.13.6, 11915.14.1, 11915.14.2, 11915.15.1, 11915.27.1, 11915.37, and 11915.38.1. The correction also updates the Interface Control Document and adds business requirements 119188.8.131.52 and 11915.37.1. The transmittal is no longer sensitive and may now be posted to the internet. The original transmittal was published regarding implementation of the Chronic Kidney Disease Quarterly Capitation Payment mechanism and to implement various benefit enhancements, including telehealth, post-discharge home visit, 3-day SNF rule waiver benefit enhancements, and more.
Effective date: April 1, 2021; July 1, 2021 - BRs 11915.36 through 11915.71
Implementation date: April 5, 2021; July 6, 2021 - BRs 11915.36 through 11915.71
Kidney Care Choices (KCC) Comprehensive Kidney Care Contracting (CKCC) - Payment Mechanism and Benefit Enhancements - Implementation
On August 19, CMS published Demonstrations Transmittal 10714, which rescinds and replaces Transmittal 10661, dated March 9, 2021, to revise the background section and to revise business requirements 11914.4, 11914.8, 11914.9, 11914.10, 11914.11, 11914.12, 11914.22, 11914.27.1, and 11914.45. The correction also updates the Interface Control Document and adds business requirements 119184.108.40.206 and 11914.45.1. The transmittal is no longer sensitive and may now be posted to the internet. The original transmittal was published regarding implementation of the Chronic Kidney Disease Quarterly Capitation Payment mechanism and to implement various benefit enhancements, including telehealth, post-discharge home visit, kidney disease education benefit enhancements, and more.
Effective date: April 1, 2021; July 1, 2021 - BRs 11914.45 through 11914.64
Implementation date: April 5, 2021; July 6, 2021 - BRs 11914.45 through 11914.64
On August 19, the OIG published a Review of whether Jewish Hospital complied with Medicare requirements for billing inpatient and outpatient services for certain claims that were potentially at risk for billing errors. The OIG determined that Jewish Hospital did not comply with requirements on 38 of the 100 claims reviewed, with 34 errors pertaining to inpatient claims and four errors involving outpatient claims. The inpatient claim errors involved a mix of incorrectly billed inpatient rehabilitation facility (IRF) claims (31), and incorrectly billed DRG codes (three). The outpatient claim errors involved incorrect use of the 59 or XU modifier. These errors resulted in an estimated $13.5 million in overpayments for the audit period.
The OIG recommends Jewish Hospital refund the $13.5 million in estimated overpayments; exercise reasonable diligence to identify, report, and return overpayments in accordance with the 60-day rule; and strengthen controls to ensure compliance with Medicare requirements. The hospital disagreed with the majority of the OIG's findings--including all IRF findings--and claimed the OIG’s medical review contractor had a highly selective reading of medical records and never met with Jewish Hospital's independent medical review contractor to discuss the claims as Jewish Hospital had expected. The OIG maintained its original findings and recommendations and said its contract with the independent medical reviewer does not allow for direct interaction between it and the hospital. However, the OIG said that because the hospital never provided additional documentation on the claims in contention, the original determinations stand.
Advisory Opinion No. 21-11
On August 19, the OIG published an Advisory Opinion regarding whether the OIG would impose sanctions under the federal anti-kickback statute and prohibition on beneficiary inducements civil monetary penalty due to an arrangement in which a Medigap plan would contract with a preferred hospital organization (PHO) and would have network hospitals under the PHO provide discounts to the Medigap plan on policyholders' Part A inpatient deductibles. The discount would be established in advance and would be applied uniformly to all policyholders for at least one year. The Medigap plan would then offer a $100 premium credit to policyholders who select a network hospital under the PHO for a Part A covered inpatient stay. This credit would apply to the next premium payment due to the policyholder's Medigap plan after the inpatient stay. The Medigap plan would also pay the PHO a monthly, percentage-based administrative fee to compensate the PHO for establishing the hospital network and arranging for network hospitals to discount the Part A inpatient deductible.
The OIG determined that all three streams of remuneration in this agreement would implicate the anti-kickback statute, and the premium credit from the Medigap plans to the policyholders would implicate the beneficiary inducements civil monetary penalty. However, the OIG said it would not impose sanctions in this case due to a low risk of fraud and abuse. The OIG said several elements of the arrangement factored into its decision, and it discussed these factors in depth in the Opinion.
Home Health Agency Provider Compliance Audit: Catholic Home Care
On August 20, the OIG published a Review of whether Catholic Home Care complied with Medicare requirements for billing home health services. In its original draft report, the OIG said that Catholic Home Care did not comply with requirements for 19 of the 100 home health claims reviewed. The OIG found issues pertaining to services provided to beneficiaries who did not require skilled services and dependent services not meeting coverage requirements. Catholic Home Care challenged the original findings and said the OIG's determinations did not conform with current case law, Medicare standards and guidelines, or clinical facts. Catholic Home Care also provided additional documentation for two sampled claims. After reviewing the additional documentation from Catholic Home Care, the OIG reduced the number of claims in error down to 17.
Based on overpayments for those 17 claims, the OIG estimates Catholic Home Care received $4.2 million in overpayments during the audit period. The OIG recommends Catholic Home Care identify and return any overpayments in accordance with the 60-day rule and those having been made in accordance with this recommendation as well as strengthen procedures for billing home health services.
Comment Request: Home Health Change of Care Notice; ICF/IID Survey Report Form and Supporting Regulations; more
On August 20, CMS published a Comment Request in the Federal Register regarding the following information collections:
Home Health Change of Care Notice
Survey Report Form for Clinical Laboratory Improvement Amendments (CLIA) and Supporting Regulations
ICF/IID Survey Report Form and Supporting Regulations
In addition, CMS says it intends to increase hospital compliance with its price transparency policies by increasing financial penalties for certain facilities.
A version of this article was first published July 22, 2021, by HCPro's Revenue Cycle Advisor, a sibling publication to HealthLeaders.
Less than a year after CMS finalized the three-year phaseout of the inpatient-only (IPO) list to be completed by 2024, the agency is looking to reverse course, according to the 2022 OPPS proposed rule, released Monday, July 19.
In addition, CMS says it intends to increase hospital compliance with its price transparency policies by increasing financial penalties for certain facilities, among other proposals related to 2-midnight policy medical reviews and potentially codifying certain policies created during the COVID-19 public health emergency (PHE).
IPO list reversal
Citing “a large number of stakeholder comments” received during and after the 2021 rulemaking cycle that opposed the gradual elimination of the IPO list due patient safety concerns, CMS proposes to halt the previously finalized three-year phase out and restore the 298 services removed from the IPO list on January 1.
“What’s interesting to me about this is twofold,” says Jugna Shah, MPH, CHRI, president of Nimitt Consulting Inc., in Spicer, Minnesota. “First, CMS isn’t pausing or halting its policy changes to better understand the concerns, but turning the ship around 100%.
“Second, in addition to patient safety concerns that some hospital groups raised, there were also concerns about the decrease in hospital reimbursement for procedures removed from the IPO list under OPPS,” Shah adds. “For those who felt and continue to feel strongly that clinical decision-making, including considerations around patient safety, should reside in the clinician’s hands, it may now be appropriate to once again request that an IPO list be created under the Medicare Physician Fee Schedule so that physician and hospital payment rules and incentives are better aligned.”
Acknowledging patient safety concerns in the 2021 OPPS final rule, CMS stated:
We believe that the evolving nature in of the practice of medicine, which has allowed more procedures to be performed on an outpatient basis with a shorter recovery time, in addition to physician judgment, state and local licensure requirements, accreditation requirements, hospital conditions of participation (CoPs), medical malpractice laws, and CMS quality and monitoring initiatives and programs will continue to ensure the safety of beneficiaries in both the inpatient and outpatient settings, even in the absence of the IPO list.
As opposed to those criteria, the agency is now proposing to codify its own criteria for removing procedures from the IPO list in the 2022 OPPS proposed rule. CMS is also seeking comment on whether the agency should continue to maintain the IPO list or return to a “longer-term objective” of eliminating it.
As part of its reversal on eliminating the IPO list, CMS proposes to revise the policy established January 1 stating that procedures eliminated from the IPO list would be exempt from certain medical review activities related to the 2-midnight rule. The agency proposes all procedures removed this year would be subject to the previous exemption period of two years after removal from the list, to ensure all OPPS services are eventually subject to medical review.
Another reversal could be coming to the process used for adding procedures to the Ambulatory Surgical Center Covered Procedures List (ASC CPL). In the 2021 OPPS final rule, CMS added 267 procedures to the ASC CPL and revised the previous criteria use to add procedures to the list.
For 2022, CMS proposes reinstating the prior patient safety criteria and removing 258 of the 267 just-added procedures.
“During last year’s rule-making cycle, this was also a controversial topic that raised questions about patient safety and ASC infrastructure,” says Shah. “The good news is that CMS is seeking stakeholder input on both topics. But in the meantime, it’s very clear that CMS is taking a conservative stance about which services can be provided to outpatients, either at the hospital or in an ASC, given the type of patient safety concerns stakeholders raised after the release of the CY 2021 final OPPS rule.”
Increasing penalties for price transparency noncompliance
Following a recent JAMA Internal Medicine study that found 75% of the country’s 100 highest-revenue hospitals noncompliant with at least one of the major requirements of CMS’ price transparency policy effective January 1, the agency is proposing reforms to increase compliance.
CMS appears intent on raising civil monetary penalties (CMP) on large providers that do not comply, but is seeking comment on what criteria to use to scale the CMPs appropriately, including:
The nature, scope, severity, and duration of noncompliance
The hospital’s reason for noncompliance
This scaled approach is intended to maintain the current penalty for small hospitals but increasing it for larger hospitals. For example, CMS proposes a minimum CMP of $300 per day for hospitals with 30 or fewer beds and adding $10 per bed per day for hospitals with more than 30 beds. This penalty would be capped at $5,500 per day.
If CMS moves forward with this proposal, the minimum total annual penalty for a year of noncompliance would be $109,500 and the maximum would be $2,007,500.
The agency is considering administrative changes in addition to tweaking the CMPs. CMS proposes the machine-readable file of standard charges should be accessible to automated searches and direct downloads. For facilities using online price estimator tools, CMS is clarifying that the tool must provide a cost estimate that takes the consumer’s individual insurance information into account. The hospital tool must provide an estimate that reflects the amount the facility expects the patient will pay, barring unusual or unforeseen circumstances.
“It seems clear that CMS has doubled and tripled down on all things price transparency, including monitoring what hospital are doing, and is going to continue layering on requirements,” says Shah. “Simply doing the bare minimum, or being ready to pay the fine and calling it a day, as some hospitals have been doing, may no longer be a good long-term strategy. However, commenting to CMS remains crucial to minimize administrative burden while hospitals try to provide patients with useful and meaningful information.”
CMS is seeking comment on the following topics related to price transparency:
Considerations for best practice online price estimator tools
Improving expectations related to plain language descriptions of shoppable services
Methods to identify and highlight exemplar hospitals
Improving standardization of the machine-readable files
Extending PHE policies
While CMS is not outright extending provider flexibilities granted as part of the COVID-19 PHE, the agency is seeking feedback on several regulations it could make permanent.
Specifically, CMS is asking stakeholders to comment on:
The degree to which providers relied on the flexibility to allow the presence of the physician for purposes of the direct supervision requirement for pulmonary rehabilitation, cardiac rehabilitation, and intensive cardiac rehabilitation services to include virtual presence through audio/video real-time communications technology when use of such technology is indicated to reduce exposure risks for the beneficiary or practitioner.
The extent to which hospitals have been billing for mental health services furnished to beneficiaries in their homes through communication technology during the PHE, and whether continued demand for such care is anticipated.
Whether CMS should keep HCPCS code C9803 (hospital outpatient clinic visit specimen collection for COVID-19, any specimen source) active beyond the conclusion of the COVID-19 PHE and whether it should extend or make permanent the OPPS payment associated with specimen collection for COVID-19 tests after the COVID-19 PHE ends.
Whether there are any changes that CMS should make to account for shifting practice patterns that rely on communication technology to provide mental health services to beneficiaries in their homes.
CPT® codes 63685 and 63688 are temporarily removed from the list of services that require Medicare prior authorization when performed in a hospital outpatient department.
A version of this article was first published May 19, 2021, by HCPro's Revenue Cycle Advisor, a sibling publication to HealthLeaders.
CPT® codes 63685 (insertion or replacement of spinal neurostimulator pulse generator or receiver) and 63688 (revision or removal of implanted spinal neurostimulator pulse generator or receiver) are temporarily removed from the list of services that require Medicare prior authorization when performed in a hospital outpatient department, CMS announced on May 13. For implanted spinal neurostimulators, only 63650 (implantation of spinal neurostimulator electrodes, accessed through the skin) requires prior authorization.
CMS did not comment on whether or when 63685 or 63688 may be added back to the prior authorization list. Organizations should continue to monitor CMS communications about prior authorizations.
See the full list of codes requiring prior authorization here.
CMS is proposing a 2.8% payment increase to hospitals that successfully participate in the Hospital Inpatient Quality Reporting program and are meaningful EHR users. Including disproportionate share hospital and Medicare uncompensated care payments, the agency estimates hospital payments will increase by $2.5 billion.
Although CMS typically uses hospital utilization data from the previous FY when setting payment rates for the upcoming FY, the agency believes that wouldn’t be appropriate in this case. The COVID-19 pandemic drastically changed inpatient hospital utilization in FY 2020. However, the agency believes that, due to the rapid pace of vaccinations and the effectiveness of vaccines, there will be far fewer COVID-19 infections and hospitalizations in 2022 than in 2020, according to the fact sheet. Therefore, the agency is proposing to use FY 2019 hospital utilization data, although it is also seeking comment on using FY 2020 data.
NTAP and NCTAP
CMS is proposing a one-year extension of new technology add-on payments (NTAP) for 14 technologies that would otherwise have passed the two- to three-year NTAP eligibility period. The agency is proposing the extension in connection with its proposal to use FY 2019 data rather than FY 2020 data.
The agency is also proposing to extend the New COVID-19 Treatments Add-on Payment (NCTAP) for eligible discharges through the end of the FY in which the COVID-19 public health emergency ends, unless the product becomes eligible for NTAP.
Market-based MS-DRG policy
CMS finalized a dramatic overhaul of MS-DRG rate-setting in the 2021 IPPS final rule, but the 2022 proposed rule seeks to entirely strike out those policies.
The 2021 IPPS final rule requires hospitals to report the median payer-specific negotiated payment rate by MS-DRG for all contracted Medicare Advantage (MA) payers. Hospitals are required to crosswalk median payer-specific negotiated MS-DRG rates for MA plans to Medicare MS-DRGs on the Medicare cost report for cost reporting periods ending on or after January 1, 2021. The agency stated it planned to use this data to separate MS-DRG rates from hospitals’ cost-to-charge ratio and move to a market-based MS-DRG rate setting policy by FY 2024.
CMS is proposing to scrap both the requirement to report median payer-specific negotiated payment rates by MS-DRG for MA payers and the planned rate-setting overhaul. The agency estimates repealing the reporting requirement will save hospitals roughly 64,000 hours of work.
The proposed rule also includes MS-DRG updates and numerous provisions related to quality reporting and measurement, interoperability, and more. The agency is also seeking feedback on how to meaningfully use data to address inequities in health outcomes.
The COVID-19 monoclonal antibodies are being paid under the vaccine benefit.
A version of this article was first published April 26, 2021, by HCPro's Revenue Cycle Advisor, a sibling publication to HealthLeaders.
Q: What revenue code should be attached to HCPCS codes M0239 (intravenous infusion, bamlanivimab-xxxx, includes infusion and post administration monitoring) and M0243 (intravenous infusion, casirivimab and imdevimab includes infusion and post administration monitoring)? We set it up as revenue code 260 but are getting edits to change it to 771. What are your thoughts and suggestions?
A: CMS has established the payment for these drugs under the CMS vaccine program. So, 771 is the revenue code that makes sense.
The program instruction states, “During the COVID-19 public health emergency, Medicare will cover and pay for these infusions (when furnished consistent with their respective EUAs) the same way it covers and pays for COVID-19 vaccines.”
Editor’s note: This originally appeared on NAHRI.org.
Gloria Miller, CPC, CPMA, CPPM, former vice president of reimbursement services at Comprehensive Healthcare Solutions Inc. shares which CPT codes to use.
A version of this article was first published April 23, 2021, by HCPro's Revenue Cycle Advisor, a sibling publication to HealthLeaders.
Q: What CPT codes and modifiers would be used to report excisional debridement for removal of a 2x4-cm ulcer on a patient’s right buttocks with vacuum-assisted closure (VAC)?
A: The debridement would be reported using CPT code 11042 (debridement, subcutaneous tissue [includes epidermis and dermis, if performed]; first 20 sq cm or less). This procedure involves the sharp removal of nonviable subcutaneous tissue until viable tissue is encountered.
Assuming the closure is performed using durable medical equipment, the VAC would be reported using CPT code 97605 (negative pressure wound therapy [e.g., vacuum-assisted drainage collection], utilizing durable medical equipment, including topical applications, wound assessment, and instructions for ongoing care, per session; total wound surface area less than or equal to 50 square centimeters) with modifier -59 (distinct procedural service) or -XU (unusual non-overlapping service).
Modifier -59 or -XU is appended to indicate that the VAC it is a distinct service from code 11042. The documentation should clearly state that the wound VAC was medically necessary because the wound was left open.
Individuals have the right to revoke their authorizations in writing at any time.
A version of this article was first published April 22, 2021, by HCPro's Revenue Cycle Advisor, a sibling publication to HealthLeaders.
Q: If an individual provides authorization for a disclosure, can the individual later revoke the authorization? Is the covered entity (CE) then required to "take back" or demand the erasure of any documentation by third parties that may have been made following the original authorization?
A: Individuals have the right to revoke their authorizations in writing at any time. However, the revocation is not effective if the CE has already released the protected health information (PHI) based on the authorization the individual signed previously. You are not required to "take back" or demand erasure of information released before the authorization was revoked.
Editor’s note: Mary Brandt, MBA, RHIA, CHE, CHPS is a healthcare consultant specializing in healthcare regulatory compliance and operations improvement. She is also an advisory board member for BOH. This information does not constitute legal advice. Consult legal counsel for answers to specific privacy and security questions. Opinions expressed are those of the author and do not represent HCPro or ACDIS
CMS recommends that organizations review the agency’s most recent guidance on telehealth billing.
A version of this article was first published April 21, 2021, by HCPro's Revenue Cycle Advisor, a sibling publication to HealthLeaders.
CMS is reminding providers to ensure that Medicare claims for telehealth are correctly billed. The agency issued broadly expanded telehealth services as part of its response to the COVID-19 public health emergency.
However, a 2018 Office of Inspector General audit found that CMS paid practitioners for some telehealth claims that did not meet Medicare requirements and that Medicare could have saved more than $3 million from 2014 to 2015 if telehealth claims had been billed appropriately.
Ellen Fink-Samnick, MSW, ACSW, LCSW, CCM, CCTP, CMHIMP, CRP, DBH(s), of EFS Supervision Strategies LLC in Burke, Virginia explains capacity is a person’s ability to make informed decisions and provide informed consent.
A version of this article was first published April 21, 2021, by HCPro's Revenue Cycle Advisor, a sibling publication to HealthLeaders.
Q: Case managers must know the difference between capacity and competence when working with patients of any age. How would you explain the difference between those two essential terms?
A: You are correct that these are extremely important terms for case managers. As Ellen Fink-Samnick, MSW, ACSW, LCSW, CCM, CCTP, CMHIMP, CRP, DBH(s), of EFS Supervision Strategies LLC in Burke, Virginia explains in her HCPro book End-of-Life Care for Case Management, capacity is a person’s ability to make informed decisions and provide informed consent. For example, is the patient able to understand the purpose of recommended medical or surgical interventions or treatment plans? Is the patient able to fully comprehend the potential risks and/or benefits of receiving or not receiving particular medications, diagnostic tests, or procedures?
Informed consent is a key initial phase of all treatment efforts. Can the patient understand the information and alternatives presented toward discharge planning? Too often, case managers are approached by members of the treatment team to assess patient competence when they actually should be verifying patient capacity. Capacity focuses on the patient’s:
Reliability (or consistency)
Physicians and psychiatrists are able to consult on making a determination of a patient’s capacity. However, they cannot help to determine a patient’s competence.
Competence is a legal term that speaks to determining the capability of a person to act on his or her own behalf or have the mental capacity to participate in the legal proceedings or transactions (e.g., business, medical decisions).