Canceled Elective Surgery Without Reimbursement

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Original story posted on: June 14, 2013

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This week, RAC Region A contractor Performant posted a complex audit issue: canceled elective surgeries for acute inpatient hospital providers. Performant is reviewing all canceled elective surgeries for which the hospital billed for admission; such providers would be paid only if the surgery was considered reasonable and necessary despite the cancelation.

What exactly are elective surgeries? They generally are defined as optional surgeries performed for non-medical reasons, such as cosmetic purposes, for example. Most medically necessary surgeries (such as inguinal hernia surgery, cataract surgery, mastectomy for breast cancer, and the donation of a kidney by a living donor) actually are performed as elective surgeries.

When is a patient considered an “inpatient?” An “inpatient”is a person who has been admitted to a hospital for bed occupancy for purposes of receiving hospital services. A patient is considered an inpatient if formally admitted to the hospital with the expectation that he or she will remain at least overnight and occupy a bed – even though later that patient can be discharged or transferred to another hospital without actually occupying a bed overnight.

Why is this a RAC issue? It mirrors the Office of Inspector General (OIG) Work Plan for 2013, which outlines a payment increase when a cancelation and rescheduling of a surgery occur. The OIG will examine payments to hospitals for canceled surgeries, which the OIG considers an emerging hot-button issue.

Hospitals’ Payments for Canceled Surgical Procedures 

The OIG will determine costs incurred by Medicare related to inpatient hospital claims for canceled surgical procedures. The preliminary analysis of Medicare claims data for inpatient stays demonstrated a significant number of occurrences of initial PPS payment to hospitals for canceled surgical procedures, followed by additional PPS payment to the same hospitals for the rescheduled surgical procedures. For these claims, the canceled surgical procedure was the principal reason for the initial hospital admission. Yet few, if any, inpatient services (i.e., laboratory or diagnostic tests) were provided by the hospitals because the surgical procedures were canceled. Medicare makes two payments to hospitals that generate two bills unless a patient is readmitted to the hospital on the same day, in which case a single payment is made.

The analysis also identified inpatient claims with canceled surgical procedures for stays of less than two days that were not followed by subsequent inpatient admissions to the same hospitals for rescheduled surgical procedures. Current Medicare policy does not preclude payment for these claims.

RAC issues for the week of June 17–21:

RAC Region A Performant        

Critical Access Hospital Claim Types

  • Intensity-Modulated Radiation Therapy (IMRT) - Region A - Intensity-Modulated Radiation Therapy (IMRT) is a computer-based method of planning for, and delivery of, generally narrow, patient-specific and often temporally modulated beams of radiation to solid tumors within a patient. IMRT is only covered for certain diagnosis and when certain conditions are met.
  • Blepharoplasty - Eyelid Lifts - Blepharoplasty is the plastic repair of the eyelid, and usually refers to an operation in which redundant skin, muscle, and/or fat are excised. Functional blepharoplasty usually involves the excision of skin and orbicularis muscle. This procedure is usually done to correct a deficit in the upper or peripheral field of vision or as noted on forward gaze by skin resting on the upper eyelashes. When blepharoplasty repair is done for cosmetic purposes it does not meet the criteria of the functional visual impairment parameters and is considered not reasonable and medical necessary and therefore will be denied.

Inpatient Hospital (Acute) Claim Types

  • Cancelled Elective Surgeries - Acute Inpatient Hospital - Region A - When an inpatient hospital admission is based on the expectation that a patient will have elective surgery, but that surgery does not occur, the hospital may bill for the admission only if it remains reasonable and necessary despite the surgery's cancellation.

Outpatient Hospital Claim Types

  • Intensity-Modulated Radiation Therapy (IMRT) - Region A - Intensity-Modulated Radiation Therapy (IMRT) is a computer-based method of planning for, and delivery of, generally narrow, patient-specific and often temporally modulated beams of radiation to solid tumors within a patient. IMRT is only covered for certain diagnosis and when certain conditions are met.
  • Blepharoplasty - Eyelid Lifts - Blepharoplasty is the plastic repair of the eyelid, and usually refers to an operation in which redundant skin, muscle, and/or fat are excised. Functional blepharoplasty usually involves the excision of skin and orbicularis muscle. This procedure is usually done to correct a deficit in the upper or peripheral field of vision or as noted on forward gaze by skin resting on the upper eyelashes. When blepharoplasty repair is done for cosmetic purposes it does not meet the criteria of the functional visual impairment parameters and is considered not reasonable and medical necessary and therefore will be denied.

 

RAC Region C Connolly

Inpatient Hospital Claim Types

  • CMS Pre-Pay Demonstration: MS-DRG-252-Other Vascular Procedures with MCC - The Recovery Audit Prepayment Review Demonstration will allow Medicare Recovery Auditors to review claims before they are paid to ensure that the provider complied with all Medicare payment rules. The demonstration has been approved with the following limitations: CMS approves all issues for review; and the issues reviewed have a high Comprehensive Error Rate Testing (CERT) rate The demonstration will begin initially with short-stay inpatient hospital claims in the seven Health Care Fraud Prevention and Enforcement Action Team (HEAT) states (Florida, California, Michigan, Texas, New York, Louisiana, and Illinois) and one state in each of the four Recovery Audit jurisdictions with the highest number of inpatient stays (Pennsylvania, Ohio, North Carolina, and Missouri). Initial claims selected for review will be those billed with the top Medicare Severity Diagnosis Related Groups (MS-DRGs) on the CERT report. The first edit that Fiscal Intermediaries (Fis)/ Part A and Part B Medicare Administrative Contractors (A/B MACs) shall install is for claims that meet the following criteria: Billed with MS-DRG-252-Other Vascular Procedures with MCC; Length of stay is two days or less; From providers who practice in the applicable demonstration state(s) only. RACs WILL ALSO REVIEW documentation for DRG Validation requiring that diagnostic and procedural information and the discharge status of the beneficiary, as coded and reported by the hospital on its claim, matches both the attending physician description and the information contained in the beneficiary's medical record. Auditors will review claims for principal diagnosis, secondary diagnosis, and procedures affecting or potentially affecting the focused MS-DRGs.
  • CMS Pre-Pay Demonstration: MS-DRG-253-Other Vascular Procedures with CC - The Recovery Audit Prepayment Review Demonstration will allow Medicare Recovery Auditors to review claims before they are paid to ensure that the provider complied with all Medicare payment rules. The demonstration has been approved with the following limitations: CMS approves all issues for review; and the issues reviewed have a high Comprehensive Error Rate Testing (CERT) rate The demonstration will begin initially with short-stay inpatient hospital claims in the seven Health Care Fraud Prevention and Enforcement Action Team (HEAT) states (Florida, California, Michigan, Texas, New York, Louisiana, and Illinois) and one state in each of the four Recovery Audit jurisdictions with the highest number of inpatient stays (Pennsylvania, Ohio, North Carolina, and Missouri). Initial claims selected for review will be those billed with the top Medicare Severity Diagnosis Related Groups (MS-DRGs) on the CERT report. The first edit that Fiscal Intermediaries (Fis)/ Part A and Part B Medicare Administrative Contractors (A/B MACs) shall install is for claims that meet the following criteria: Billed with MS-DRG-253- Other Vascular Procedures with CC; Length of stay is two days or less; From providers who practice in the applicable demonstration state(s) only. RACs WILL ALSO REVIEW documentation for DRG Validation requiring that diagnostic and procedural information and the discharge status of the beneficiary, as coded and reported by the hospital on its claim, matches both the attending physician description and the information contained in the beneficiary's medical record. Auditors will review claims for principal diagnosis, secondary diagnosis, and procedures affecting or potentially affecting the focused MS-DRGs.
  • CMS Pre-Pay Demonstration: MS-DRG-254-Other Vascular Procedures without CC/MCC -The Recovery Audit Prepayment Review Demonstration will allow Medicare Recovery Auditors to review claims before they are paid to ensure that the provider complied with all Medicare payment rules. The demonstration has been approved with the following limitations: CMS approves all issues for review; and The issues reviewed have a high Comprehensive Error Rate Testing (CERT) rate The demonstration will begin initially with short-stay inpatient hospital claims in the seven Health Care Fraud Prevention and Enforcement Action Team (HEAT) states (Florida, California, Michigan, Texas, New York, Louisiana, and Illinois) and one state in each of the four Recovery Audit jurisdictions with the highest number of inpatient stays (Pennsylvania, Ohio, North Carolina, and Missouri). Initial claims selected for review will be those billed with the top Medicare Severity Diagnosis Related Groups (MS-DRGs) on the CERT report. The first edit that Fiscal Intermediaries (Fis)/ Part A and Part B Medicare Administrative Contractors (A/B MACs) shall install is for claims that meet the following criteria: Billed with MS-DRG-254- Other Vascular Procedures without CC/MCC; Length of stay is two days or less; From providers who practice in the applicable demonstration state(s) only. RACs WILL ALSO REVIEW documentation for DRG Validation requiring that diagnostic and procedural information and the discharge status of the beneficiary, as coded and reported by the hospital on its claim, matches both the attending physician description and the information contained in the beneficiary's medical record. Auditors will review claims for principal diagnosis, secondary diagnosis, and procedures affecting or potentially affecting the focused MS-DRGs.
  • IRF Case Mix Group Audit - In order for IRF care to be considered reasonable and necessary, the documentation in the patient’s IRF medical record must demonstrate a reasonable expectation that all five of the rehabilitation criteria were met at the time of admission to the IRF. Billing for acute inpatient rehabilitation services requires the submission of the Case Mix Group (CMG). On Medicare claims these CMGs are represented as HIPPS codes. HIPPS codes are determined based on assessments made using the Inpatient Rehabilitation Facility Patient Assessment Instrument (IRF-PAI.) The IRF-PAI contains detailed evaluations on the patient’s functional status in 18 critical areas of functional capacity. Therefore the CMG codes contain clinical information about the functional status of the patient on admission to an acute inpatient rehabilitation facility. Certain CMGs suggest patients admitted to acute inpatient rehabilitation with very low functional status as well as high functional status. These two areas of outliers suggest that these patients may not have been appropriate for acute inpatient rehabilitation services and a more detailed review of the chart is warranted.

Outpatient Hospital Claim Types

  • J3240 - (Injection, Thyrotropin Alpha, 0.9 mg, provided in 1.1 mg vial) Excessive Use - As per FDA approved drug labeling the recommended dosing regimen for Thyrogen is a two-injection regimen consisting of one intramuscular (IM) dose on day one, followed by a second IM injection 24 hours later (i.e., 2 units per treatment regimen).

About the Author

Dr. Margaret Klasa is the medical director for Context4 Healthcare. She is responsible for the company’s business knowledge discovery unit for medical context as it relates to the daily development of data products and software for medical claims editing and coding, with an emphasis on clinical and regulatory guidelines for Medicare, Medicaid and commercial payors.

Contact the Author

Margaret.Klasa@context4.com

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Margaret Klasa, DC, APN, Bc

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