Medicare Update Medicare Update March 11, 2008March 11, 2008

Debra L. Patterson, M.D.J4 MAC Medical Director

TrailBlazer Health Enterprises, LLC

TrailBlazer Part B Paid Claims Error Rates

0%

2%

4%

6%

8%

10%

12%

14%

16%

November 2004Report

(Claims 1/1/03-12/31/03)

January Update November 2004

Report(Claims 1/1/03-

12/31/03)

April Update November 2004

Report(Claims 1/1/03-

12/31/03)

July Update November 2004

Report (Claims 1/1/03-

12/31/03)

November 2005Report

(Claims 1/1/204-12/31/2004)

May 2006 Report (Claims

10/1/2004-9/30/2005)

November 2006Report

(Claims 4/1/2005- 3/31/2006)

May 2007 Report (Claims

10/1/2005 -9/30/2006)

November 2007Report

(Claims 4/1/2006- 3/31/2007)

Gro

ss E

rro

r R

ate

TX

MD/DC/DE/VA

National

52.1%

22.9%

20.8%2.1%

2.1%Incorrect Coding

Insufficient Documentation

No Documentation

Medically Unnecessary Services

Other

November 2007 CERT Report - Part B Carrier Combined Error Rate by Type of Error

Claims Submitted 4/1/2006 - 3/31/2007

Paid Claims Error Rate4.8%

November 2007 CERT Report - Part B TrailBlazer TX Top 10 BETOS on Projected Improper Payments

Claims Submitted 4/1/2006 - 3/31/2007

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

$30,000,000

$35,000,000

$40,000,000

Proj

ecte

d Im

prop

er P

aym

ents

Consultations Office visits - established Hospital visit -subsequent

Office visits - new Emergency room visit Nursing home visit

16.7%

6.0%

8.2%

8.2%

13.1%

10.8%10.0%

Evaluation and Management ServicesEvaluation and Management Services

Correct coding based on two distinct but related sets of criteria

• Medical reasonable and necessity criteria set the following

– Appropriate frequency– Upper and lower limits of appropriate intensity of service

• Key component “work” defined by the correct medically reasonable and necessary must be demonstrated

Medical Necessity DefinedMedical Necessity Defined

Medical NecessityMedical Necessity

• Statute

• National Coverage Decisions

• Local Coverage Determinations

• Clinical judgment considering the “rules”– Safe and effective– Meet but not exceed patient’s need– Accepted standard of medical practice

• Medical literature• Practice guidelines • Respected textbooks• Authoritative opinion

Medical Necessity – Beyond E/MMedical Necessity – Beyond E/M

• Medical literature

Medical Necessity – Beyond E/MMedical Necessity – Beyond E/M

• Medical literature

Medical Necessity – Beyond E/MMedical Necessity – Beyond E/M

• Medical literature

Medical Necessity – Beyond E/MMedical Necessity – Beyond E/M

• Medical literature

Medical Necessity – Beyond E/MMedical Necessity – Beyond E/M

• Medical literature

Medical Necessity – E/MMedical Necessity – E/M

The nature of presenting problem(s)• Severity• Acuity• Number • Diagnostic complexity • Therapeutic complexity• Counseling and coordination

Medical Necessity – E/MMedical Necessity – E/M

Medical Decision Making• # of diagnoses and/or management options

• Amount and complexity of medical records, diagnostic tests, and/or other information

• Risk of significant complications, morbidity, and or mortality due to – Nature of Presenting problems– Diagnostic tests performed or ordered – Therapeutic options chosen•Severity•Acuity

•Number

•Therapeutic complexity

•Diagnostic complexity

Medical NecessityMedical NecessityFrequency

• Acute problems – generally frequency not an issue

• Sub-acute problems (with or without physician intervention)

– Incomplete resolution–Potential for worsening, recurrence or

negative consequences–Acute problem resolved but outcome was still

questionable when last seen

Medical NecessityMedical NecessityFrequency

• Chronic conditions –For stable, well controlled, or inactive

conditions• Consider likelihood for problem to deteriorate or

become uncontrolled based on the nature of the problem and documented patient behavior/past history

• Use published guidelines regarding accepted standards of care for specific problems (when available)

–Treat poorly controlled, decompensated, or exacerbated problems as acute

Medical NecessityMedical Necessity

Intensity of service• Nature of the presenting problem• Severity

– CPT Medical Necessity Guidance

– Contributory factor statements known as “Nature of Presenting Problems” (NPP) contained in most CPT E/M codes.

Medical Necessity in Evaluation and Management Services

Medical Necessity in Evaluation and Management Services

• 99201

“Usually the presenting problems are self-limited or minor.”

• 99202

“Usually the presenting problems are of low to moderate severity.”

• 99203 “Usually the presenting problems are of moderate severity.”

• 99204

“Usually the presenting problems are of moderate to high severity.”

• 99205“Usually the presenting problems are of moderate to high severity.”

Medical Necessity in Evaluation and Management Services

Medical Necessity in Evaluation and Management Services

• 99231“Usually the patient is stable, recovering, or

improving.”

• 99232

“Usually the patient is responding inadequately to therapy or has developed a minor complication.”

• 99233“Usually, the patient is unstable or has developed

a significant complication or a significant new problem.”

Medical Necessity in Evaluation and Management Services

Medical Necessity in Evaluation and Management Services

“self-limited or minor”

.

A problem that runs a definite and prescribed course, is transient in nature, and is not likely to permanently alter health status or has a good prognosis with management/compliance

“low severity”

A problem where the risk of morbidity without treatment is low; there is little to no risk of mortality without treatment; full recovery without functional impairment is expected

Medical Necessity in Evaluation and Management Services

Medical Necessity in Evaluation and Management Services

“moderate severity”

.

A problem where the risk of morbidity without treatment is moderate; risk of mortality without treatment; uncertain prognosis OR increased probability of prolonged functional impairment

“high severity”

A problem where the risk of morbidity without treatment is extreme; there is moderate to high risk of mortality without treatment OR high probability of severe, prolonged functional impairment

Medical Necessity in Evaluation and Management Services

Medical Necessity in Evaluation and Management Services

CPT Appendix C – Clinical Examples

• 99231

Subsequent hospital visit for 50-year old male with an uncomplicated myocardial infarction who is clinically stable and without chest pain.

• 99232

Subsequent hospital visit for an 54-year old female admitted for myocardial infarction , but who is now having frequent premature ventricular contractions.

• 99233Subsequent hospital visit for a 65-year old male, following an

acute myocardial infarction, who complains of shortness of breath and new chest pain.

.

Medical NecessityMedical Necessity

Other characteristics of the encounter

• Number of problems • Diagnostic complexity • Therapeutic complexity• Counseling and coordination

Medical NecessityMedical Necessity

Other characteristics of the encounter

•Appropriate for the problem/complaint

•Supports conclusions

•Supports evaluations and treatments chosen

•Well documented

Medical NecessityMedical Necessity

Medically reasonable Medical Decision Making

regarding one or more problems out of proportion

to severity of illness

• Large number of lower severity problems or clearly defined co-morbidities evaluated/managed during one encounter

• Extensive medically necessary data review

• Extensive medically necessary diagnostic and/or therapeutic interventions

Medical NecessityMedical Necessity

Medically reasonable Medical Decision Making

regarding one or more problems out of proportion

to severity of illness

• Extensive medically necessary data review

• Extensive medically necessary diagnostic and/or therapeutic interventions

Medical Decision MakingMedical Decision Making

MDM in CPT and CMS E/M Documentation Guidelines

• Number of diagnoses or management options

• Amount and/or complexity of data to be reviewed

• Risk of significant complications, morbidity, and/or mortality

– Presenting problem

– Diagnostic procedures ordered

– Management options selected

Common E/M Coding ErrorsCommon E/M Coding Errors

Typical MDM Errors•No documentation of medical decision making at all

•MDM limited to a list of old and current diagnoses

•No indication that diagnoses/problems listed led to increased physician work

•No key component information to support diagnostic conclusions and/or diagnostic/therapeutic plans

Medical Decision MakingMedical Decision Making

“Broad Brush” MDM

• Typical E/M CPT code includes descriptions of multiple levels of key component work

• For History and Physical, CMS Guidelines further describe and quantify CPT key component levels and descriptors

• CMS Guidelines do not quantify MDM descriptors except in the area of “Risk”

Common E/M Coding ErrorsCommon E/M Coding Errors

CPT and EM Guideline MDM Definitions

• High complexity MDM

–Extensive diagnoses evaluated or problems managed

–Extensive amount and complexity diagnostic evaluation ordered or reviewed

–High risk problem(s), diagnostic intervention(s), or treatment option(s)

Medical Decision MakingMedical Decision Making

MDM in CPT and CMS E/M Documentation Guidelines

99222

HX = Comprehensive

EX = Comprehensive

MDM = Moderate

•Extensive HPI

•Complete ROS

•Complete PFSH

Medical Decision MakingMedical Decision Making

MDM in CPT and CMS E/M Documentation Guidelines

CPT

99222

MDM = Moderate

E/M Guidelines

Moderate MDM

• Extensive numbers of diagnoses and/or management options (extensive not defined)

•Extensive data reviewed (extensive not defined)

•High risk of complications (table of risk provided)

Medical Decision Making Medical Decision MakingNo National Standard Method

• Many physicians and other providers use no logical mechanism for coding MDM

• Some use commercially and otherwise available score-sheets

–Use without reasonability testing–Undefined terms included– Inherent shortcomings

MDM Rationale – Marshfield ClinicMDM Rationale – Marshfield Clinic

Medical Decision Making Medical Decision Making

1. Uncomplicated rib fracture with chest x-ray and no treatment

2. Uncomplicated rib fracture with no imaging but treated with analgesic

3. Chronically uncontrolled diabetic with co-morbid conditions started on insulin therapy

4 points

3 points

1 point

MDM Auditing - TrailBlazerMDM Auditing - TrailBlazer

MDM Auditing - TrailBlazerMDM Auditing - TrailBlazer

MDM Auditing - TrailBlazerMDM Auditing - TrailBlazer

MDM Rationale – TrailBlazerMDM Rationale – TrailBlazer

http://www.trailblazerhealth.com/partb/tx/evalmgmt.asp?

Medical Decision Making Medical Decision Making

What’s a doc to do?

Keep in mind what E/M coding is all about

• Medical Necessity

• Physician Work

–Number and nature of problems–Diagnostic complexity–Therapeutic complexity

Medical Decision Making Medical Decision Making

Diagnostic complexity

• Differential diagnoses• Constellations of symptoms and signs• Appropriate H and P to support diagnostic

conclusions• Appropriately complex diagnostic

evaluation ordered, scheduled, or performed

Medical Decision Making Medical Decision Making

Therapeutic complexity

–Therapeutic modalities Medications Surgical procedures Radiological interventions Many, many others

–Patient instruction–Referrals to other practitioners for treatment–Hospital admission

Medical Decision Making Medical Decision Making

• Pick a method for coding MDM and apply it– Be consistent– Define quantitatively as many terms as

possible

• Validate that it does not lead to irrational coding considering physician work and medical necessity

• If a method results in codes that it look too good to be true….they probably are

ConsultationsConsultations

• All consultations require the following

–Request for opinion or advice from another physician (for that physician to use in his or her care of the patient)

– A written report of the consultant’s findings, opinions, and recommendations to the requesting physician

• Documentation must demonstrate both the request and the report

ConsultationsConsultations

• Opinion requested is specific to the patient’s condition

• Referring physician will use the consultant’s report to manage the patient (ie, has not transferred sole care for the problem to the consultant)

• Service performed by an appropriate practitioner adequately trained to provide the opinion requested

• Adds to the quality or scope of medical care reasonably available from the requesting physician

Consultations Consultations • Pre-operative clearance must be medically reasonable

and necessary considering the patient’s health history and the nature of the proposed operation

• Pre-operative visits whose sole purpose is performing or recording the mandatory admission H/P for a surgical admission are not separately payable and are not consultations

• Continuation of care by the consultant for an established clinical problem of an established patient in a different clinical setting but with no significant change in health status (ie, post-operative concurrent care) is not a consultation

ConsultationsConsultations

• May not be reported as a split/shared service with a non-physician practitioner in the same group

Consultations Consultations • Orthopedist seeing patient with elbow pain at

request of family practitioner

• Internist seeing patient for hypertension at request of orthopedist

• Cardiologist seeing patient for chest pain at request of neurosurgeon

• Dermatologist seeing patient with melanoma at request of internist

Medicare Contracting ReformMedicare Contracting Reform

Section 911 of the Medicare prescriptionDrug, Improvement, and Modernization Act of2003 (MMA)

• Replaces current contracting authority withthe new Medicare Administrative Contracting(MAC) authority.

• Requires CMS to compete and transition allwork to MACs by October 2011

Why?

Medicare Contracting ReformMedicare Contracting Reform• Carriers

• Fiscal Intermediaries

• Durable Medical Equipment Contractors

Medicare Contracting ReformMedicare Contracting Reform

• Process Claims MAC

• Fraud and Abuse PSC

• Fair Hearings QIC

• Post payment review RAC

• Beneficiary Call Center 1-800- Medicare

“Functional” Contractors

Medicare Contracting ReformMedicare Contracting Reform

2

1

2

1

4

3

5

7

9

10

15

8

6

11

14

13

12

Medicare Contracting ReformMedicare Contracting Reform

3

N

N

= Start-up

= Cycle One

= Cycle Two

Medicare Contracting ReformMedicare Contracting Reform

Local Policy• A Contractor Medical Director required for each MAC

(not each state)

• LCD Consolidation during Implementation

• Following full MAC implementation, Local Policy development returns to “normal” (Program Integrity Manual instructions)

– Contractor Advisory Process (i.e. CAC)– Comment and Notice– LCD Reconsideration processes

Medicare Contracting ReformMedicare Contracting Reform

“Least Restrictive” LCD• Other than “least restrictive” permitted when significant

program vulnerability exists (CMS approval required)

• “No policy” not necessarily “least restrictive” (CMS approval required)

Medicare Contracting ReformMedicare Contracting ReformJ4 MAC Policy Consolidation

• 800+ legacy contractor policies

• 138 “consolidated policies”

– 50% are Trailblazer LCDs with or without limited changes

– Remaining 50% are Noridian and Pinnacle policies (mostly Noridian) with or without limited changes

– Some LCDs underwent major revision and now consist of provisions from 2 or more legacy policies

Medicare Contracting ReformMedicare Contracting Reform

J4 LCD Consolidation Lessons-Learned• “Less restrictive” is often very subjective

• Huge volume of work with very short turn-around time (ie, potential to not fully appreciate all “less restrictive” provisions)

• Implementation approach not evident in the text of the policy

• Not everything that affects claim payment is R&N– Variations in interpretation of national policy– Coding requirements

Medicare Contracting ReformMedicare Contracting Reform

LCD “Gotchas”

• Drugs and Biologicals• Non-covered Services • Routine Foot Care• Ambulance (ground) Services• Wound Care• Bariatric Surgery

TrailBlazer WebsiteTrailBlazer Website

TrailBlazer WebsiteTrailBlazer Website

Questions?Questions?