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February 2005 Part B Medicare Bulletin

Posted February 2, 2005

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2005 Annual Update for Skilled Nursing Facility (SNF) Consolidated Billing for the Common Working File (CWF) and Medicare Carriers

Provider Types Affected
Skilled Nursing Facilities (SNFs)

Provider Action Needed

STOP – Impact to You
The 2005 update for SNF Consolidated Billing (CB) is available. These codes are used in applying the SNF CB edits that only allow services that are excluded from CB to be separately paid by Medicare carriers.

CAUTION – What You Need to Know
These new code files are posted to the Centers for Medicare & Medicaid Services (CMS) Web site at: www.cms.hhs.gov/medlearn/snfcode.asp.

GO – What You Need to Do
The edits for claims received for beneficiaries in both Part A SNF stays and covered and non-covered Part A SNF stays allow services that are excluded from consolidated billing to be separately paid by the carrier.

Additional Information
The official instruction issued to your carrier regarding this change may be found by going to:
http://www.cms.hhs.gov/manuals/pm_trans/R328CP.pdf

For additional information relating to this issue, please contact your carrier at their toll free number, which may be found at: http://www.cms.hhs.gov/MedlearnProducts/downloads/CallCenterTollNumDirectory.pdf

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Announcing the CMS Job Aids Web Page

CMS has compiled a Job Aids Web page for your convenience. Job aids are information tools to assist Customer Service Representatives (CSRs) to answer inquiries. The site will display a variety of topics and its content will be especially useful to call center management including supervisors, trainers, quality assurance staff, and CSRs who handle matters related to Medicare providers.

Please view the initial list of job aids at:
http://www.cms.hhs.gov/contractors/customerserv/jobaids/default.asp

Each job aid link has a reference to the relevant Change Request (CR) if applicable. Instructions are included at the top of the page to assist with navigation of this site.

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Cardiovascular Screening Blood Tests

Provider Types Affected
Physicians, providers, and suppliers

Provider Action Needed
The information in this article provides guidance for the new national coverage policy related to cardiovascular screening tests covered, effective for services performed on or after January 1, 2005.

Background
In accordance with Section 612 of the Medicare Modernization Act (MMA), Medicare coverage is provided for cardiovascular screening blood tests (tests for the early detection of cardiovascular disease or abnormalities associated with an elevated risk for that disease) effective for services performed on or after January 1, 2005.

The MMA permits coverage of tests for cholesterol and other lipid or triglycerides levels for this purpose.

Therefore, effective January 1, 2005, coverage is provided for the following:
• Total Cholesterol Test;
• Cholesterol Test for High Density Lipoproteins; and
• Triglycerides Test.

Effective, January 1, 2005, Medicare provides coverage for the cardiovascular screening blood test for beneficiaries every five years (i.e., 59 months after the last covered screening tests.) Medicare has determined that it is not necessary to test more frequently since lipid and cholesterol levels for people often stay fairly consistent beyond age 65.

Medicare Part B covers cardiovascular screening blood tests when ordered by the physician who is treating the beneficiary for the purpose of early detection of cardiovascular disease in individuals without apparent signs or symptoms.

The implementation of this new benefit permits Medicare beneficiaries who have not been previously diagnosed with cardiovascular disease to receive cardiovascular screening blood tests for risk factors associated with cardiovascular disease. This includes individuals who have no prior knowledge of heart problems but recognize that their behavior or lifestyle may be at risk because of diet or lack of exercise.

Payment is provided under the Medicare Clinical Laboratory Fee Schedule. There is no deductible or copayment for this benefit.

HCPCS/CPT Codes/Diagnosis Codes
The following HCPCS/CPT Codes are to be billed for the Cardiovascular Screening Blood Tests:

80061 Lipid Panel
82465 Cholesterol, serum, or whole blood, total
83718 Lipoprotein, direct measurement; high- density cholesterol
84478

Triglycerides

(The tests should be performed as a panel; however, they are also available as individual tests.)
The following diagnosis codes must be submitted on the claim for when billing for cardiovascular screening blood test:

V 81.0 Special Screening for ischemic heart disease
V81.1 Special Screening for hypertension
V81.2 Special Screening for other and unspecified cardiovascular conditions

Medicare will pay for cardiovascular disease screening under the Medicare Clinical Laboratory Fee Schedule. Providers and suppliers that bill for the cardiovascular disease screening benefit must point the screening diagnosis (V81.0, V81.1,V81.2) to the line item service.

Other cardiovascular screening blood tests (for which CMS has not specifically indicated approval for national coverage) continue to be non-covered.

How Carriers and Intermediaries Will Treat Claims
Medicare carriers and intermediaries will treat claims as follows:

Additional Information
The Medicare Claims Processing Manual, Chapter 18, Section 100 is new. The new manual instructions are attached to the official instruction (CR3411) released to your carrier/intermediary.

You may view that instruction by going to: http://www.cms.hhs.gov/manuals/pm_trans/R408CP.pdf

If you have any questions, please contact your intermediary at their toll-free number, which may be found at: http://www.cms.hhs.gov/MedlearnProducts/downloads/CallCenterTollNumDirectory.pdf

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Common Working File (CWF) Duplicate Claim Edit for Referred Clinical Diagnostic Services and Purchased Diagnostic Services

Provider Types Affected
Physicians, laboratories, clinical laboratories, and independent diagnostic testing facilities (IDTFs)

Provider Action Needed

STOP – Impact to You
Effective April 1, 2005, a new edit will be established in Medicare systems to check for duplicate claims for referred clinical diagnostic laboratory services and purchased diagnostic services submitted by physicians/suppliers to more than one carrier.

CAUTION – What You Need to Know
Claims submitted for referred clinical diagnostic/purchased diagnostic services will be identified as “duplicate claims” when the involved claims contain different carrier numbers and all of the following data matches in the claim fields: (a) Beneficiary Name; (b) Beneficiary Health Insurance Claim Number (HICN); (c) Current Procedural Terminology (CPT)/Healthcare Common Procedure Coding System (HCPCS) code; (d) Date of Service; and (e) CPT/HCPCS Code Modifier.

GO – What You Need to Do
Affected providers should be aware that a claim for a referred clinical diagnostic/purchased diagnostic service that is identified as a duplicate claim under the above criteria will be rejected.

Background
The Center for Medicare & Medicare Services (CMS) recognizes that a clinical diagnostic laboratory may refer a specimen to another clinical diagnostic laboratory for testing. CMS generally requires the clinical diagnostic laboratory that furnishes the service to bill for the service. However, under certain conditions, §1833(h)(5)(A)(ii) of the Social Security Act permits a clinical diagnostic laboratory to bill for a clinical diagnostic laboratory fee-schedule service that was performed by another clinical diagnostic laboratory.

Prior to July 1, 2004, many carriers were unable to process a claim for a referred clinical diagnostic laboratory test when the test was performed outside of their jurisdiction because they did not possess that jurisdiction’s fee schedule.

CMS had not previously required carriers to adjudicate a claim for a referred clinical diagnostic laboratory service furnished in another jurisdiction. Therefore, some carriers previously paid for referred clinical diagnostic services performed outside of their jurisdiction while others did not.

In addition, some carriers have permitted reference laboratories located outside of their jurisdiction to enroll by issuing “reference-use-only” Provider Identification Numbers (PINs) for the reference laboratories to use when billing for a referred clinical diagnostic service that was performed within their jurisdiction.

Implementation of National Clinical Laboratory Fee Schedule
To resolve these issues, effective for claims with dates of service on or after July 1, 2004, CMS implemented a national clinical laboratory fee schedule and instructions to make fees for all localities within the United States available to their carriers for processing diagnostic laboratory claims, including claims for referred clinical diagnostic services performed outside of their jurisdiction.

Although CMS has issued billing guidelines for both referred clinical diagnostic laboratory services and for purchased diagnostic services, specifying that these services must be billed to the local carrier with the implementation of the respective fee schedules, either the physician/supplier performing the service, or the purchasing/referring physician/supplier (as applicable) may bill for the service.

To address a potential program vulnerability, effective April 1, 2005, CMS is implementing a new Common Working File (CWF) edit for both referred clinical diagnostic laboratory services and purchased diagnostic services to identify as duplicate claims those claims that are submitted for the same service, provided to the same beneficiary, and provided on the same date, when these claims are submitted to more than one carrier.

NOTE: Referred clinical laboratory services are identified for processing purposes by the presence of a “90” modifier. When performing the data matching, the CWF duplicate claim edit for referred clinical diagnostic/purchased diagnostic services will not include the “90” modifier on referred laboratory claims in the matching criteria, but will perform matching on all other criteria specified above.

The CWF duplicate claim edit will only apply to claims containing a CPT code that is included on the clinical laboratory fee schedule (available on the CMS clinical laboratory Web site at (http://www.cms.hhs.gov/suppliers/clinlab/default.asp), or a HCPCS code that is included on the
Abstract File for Purchased Diagnostic Tests/Interpretations to be implemented in April 2005.

Implementation Date
The implementation date for this instruction is April 4, 2005.

Additional Information
The official instruction issued to your carrier regarding this change may be found by going to:
http://www.cms.hhs.gov/manuals/transmittals/comm_date_dsc.asp

From that Web page, look for CR 3551 in the CR NUM column on the right, and click on the file for that CR.

If you have any questions regarding this issue, please contact your carrier at their toll free number, which may be found at: http://www.cms.hhs.gov/MedlearnProducts/downloads/CallCenterTollNumDirectory.pdf

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Coverage of Routine Costs of Clinical Trials Involving Investigational Device Exemption (IDE) Category A Devices

Provider Types Affected
Physicians and providers

Provider Action Needed

STOP – Impact to You
Effective for routine costs incurred on or after January 1, 2005, Medicare will cover the routine costs of clinical trials involving Investigational Device Exemption (IDE) Category A devices (used in the diagnosis, monitoring, or treatment of an immediately life-threatening disease or condition).

CAUTION – What You Need to Know
This extension of coverage refers to the routine services performed for such clinical trials.
The Category A device itself remains non-covered.

GO – What You Need to Do
This extension of coverage refers to the routine services performed for such clinical trials.
The Category A device itself remains non-covered.

Background
Prior to the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), the Centers for Medicare & Medicaid Services (CMS) limited coverage of clinical trials to:

Coverage Determinations (NCD) Manual 310.1).
The MMA (Section 731(b)) expands the ability of CMS to cover costs in clinical trials by authorizing coverage of routine costs in certain clinical trials involving IDE Category A devices effective for routine costs incurred on or after January 1, 2005.

This extension of coverage refers to the routine services performed for such a trial, and the Category A device itself remains non-covered.

Category A (experimental/investigational) devices are innovative medical devices about which the Food and Drug Administration (FDA) has major questions regarding safety and effectiveness. For a trial to qualify for payment of routine costs, it must meet certain criteria established by the Secretary of the Department of Health and Human Services to ensure that the trial conforms to appropriate scientific and ethical standards.

In addition, the MMA established additional criteria for trials initiated before January 1, 2010, to ensure that the devices involved in these trials be intended for use in the:

  1. Diagnosis;
  2. Monitoring; or
  3. Treatment of an immediately life-threatening disease or condition (“a stage of a disease in which there is a reasonable likelihood that death will occur within a matter of months or in which premature death is likely without early treatment”).

Providers participating in the clinical trial are responsible for furnishing all information the Medicare contractor (carrier or fiscal intermediary) deems necessary for coverage determination and claims processing regarding:

Also, the provider must contact their local Medicare carrier or intermediary before billing for this service.

Billing Instructions
For routine services performed in a clinical trial where a Category A device is used for a patient with a life threatening condition:

Implementation
The implementation date for this instruction is January 3, 2005.

Additional Information
For complete details, please see the official instruction issued to your carrier/intermediary regarding this change. That instruction may be viewed by going to: http://www.cms.hhs.gov/manuals/pm_trans/R131OTN.pdf

If you have any questions, please contact your carrier/intermediary at their toll-free number, which may be found at: http://www.cms.hhs.gov/MedlearnProducts/downloads/CallCenterTollNumDirectory.pdf

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Diabetes Screening Tests

Provider Types Affected
All Medicare providers

Provider Action Needed

STOP – Impact to You
This article notifies providers that Medicare will permit coverage for the following diabetes screening tests for services performed on or after January 1, 2005, for individuals who satisfy the eligibility requirements of being at risk for diabetes:

CAUTION – What You Need to Know
Coverage will be provided for two screening tests per calendar year for individuals diagnosed with pre-diabetes, and one screening test per year for individuals previously tested who were not diagnosed with pre-diabetes, or who have never been tested. This coverage does not apply to individuals previously diagnosed as diabetic.

GO – What You Need to Do
Please refer to the Background and Additional Information sections of this instruction for further details.

Background
This coverage is mandated by Section 613 of the Medicare Prescription Drug Improvement and Modernization Act of 2003 (MMA).

Initially, coverage was limited to a fasting plasma glucose test. However, coverage is now provided for the following two screening blood tests:

Any individual with one (1) of the following individual risk factors for diabetes is eligible for this new benefit:

Or, an individual with any two (2) of the following risk factors for diabetes is also eligible for this new benefit:

Effective for services performed on or after January 1, 2005, Medicare will pay for diabetes screening tests under the Medicare Clinical Laboratory Fee Schedule. To indicate that the purpose of the test(s) is for diabetes screening, a screening diagnosis code is required in the diagnosis section of the claim:

Those providers billing fiscal intermediaries should
note the following:

Nationally Non-Covered Indications

Implementation
The implementation date is January 3, 2005, and applies to services furnished on or after January 1, 2005.

Related Instructions
Updated manual instructions are included in the official instruction issued to your carrier or intermediary and can be found by going to: http://www.cms.hhs.gov/manuals/transmittals/comm_date_dsc.asp

From that web page, look for CR 3637 in the CR NUM column on the right, and click on the file for that CR.

If you have any questions, contact your carrier or intermediary at their toll free number, which may be found at: http://www.cms.hhs.gov/MedlearnProducts/downloads/CallCenterTollNumDirectory.pdf

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Emergency Change to Carrier Instructions for the End Stage Renal Disease (ESRD) 50/50 Rule Implementation

Provider Types Affected
Physicians and suppliers billing Medicare Part B carriers for Automated Multi-Channel Chemistry Test(s)

Provider Action Needed
Physicians and suppliers should note that this article reflects an update to Change Request (CR) 2813, End Stage Renal Disease (ESRD) Reimbursement for Automated Multi-Channel Chemistry Test(s) (AMCC). In CR2813, the Centers for Medicare & Medicaid Services (CMS) directed Medicare carriers to implement certain changes to enable full implementation, on January 2005, of new guidelines to enforce the “ESRD 50/50” rule related to payment policy for ESRD-related AMCC tests.

This article and the related CR 3609 notifies carriers to discontinue the implementation of the business requirements associated with CR 2813 until further notice. Those who bill carriers for such tests are also hereby notified of this delay.

Background
ESRD 50/50 Rule
The Office of Inspector General (OIG) conducted several audits and concluded that Medicare payments for ESRD-related Automated Multi-Channel Chemistry (AMCC) tests were not in compliance with CMS payment policy for these services (i.e., the ESRD 50/50 rule). In response to the OIG report findings, CMS issued instructions (CR 2277 and CR 3239) to Medicare carriers regarding procedures to enforce compliance with the payment policy for ESRD-related AMCC Tests (i.e., the ESRD 50/50 rule).

The ESRD 50/50 rule requires the billing laboratory to maintain a count of AMCC tests ordered to track the number of tests included in the composite payment rate paid to the ESRD facility, or the monthly capitation payment made to the furnishing physician, versus the number of covered non-composite tests performed for the same beneficiary on the same date of service.

The proportion of composite versus non-composite tests calculated by the billing laboratory is used to determine whether separate payment may be made for all tests performed on that day.

In Change Request (CR) 2813, End Stage Renal Disease (ESRD) Reimbursement for Automated Multi-Channel Chemistry Test(s), CMS directed Medicare carriers to make the necessary systems changes to implement front-end edits in preparation for the standard system implementation of CR 2813 in the January 2005 release.

Further, in CR 3501, Release Medlearn Article for Change Request (CR) 2813 (End Stage Renal Disease Reimbursement for Automated Multi-channel Chemistry Test(s), CMS authorized carriers to do the following:

Implementation of Billing Procedures and Guidelines
Since the release of CR 2813, CMS has met with members of the laboratory industry to discuss:

  1. The ESRD 50/50 rule; and
  2. The changes to current billing procedures that would be necessary to be compliant with this policy.

Subsequently, CMS has learned that the industry may not be ready to implement these new guidelines by January 2005, because of:

For these reasons, CMS:

Instructions for Carriers
CR 3609 instructs carriers to do the following until further notice:

CR 3609:
• Pertains only to the carrier changes associated with the implementation of CR 2813.
• Does not apply to the intermediaries or to the providers that bill intermediaries.

Intermediaries and providers who submit claims to intermediaries should continue to follow the existing guidelines for billing ESRD-related AMCC tests, in accordance with CR 3239 and CR 2277.

CMS will provide further direction to the carriers concerning the carrier implementation of the ESRD 50/50 rule compliance guidelines in a future CR.

Implementation
The implementation date for this instruction is January 3, 2005.

Additional Information
For complete details, please see the official instruction issued to your carrier regarding this change. That instruction may be viewed at: http://ww.cms.hhs.gov/manuals/pm_trans/R405CP.pdf

If you have any questions, please contact your carrier at their toll-free number, which may be found at: http://www.cms.hhs.gov/MedlearnProducts/downloads/CallCenterTollNumDirectory.pdf

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Emergency Update to the 2005 Medicare Physician Fee Schedule Database (MPFSDB)

Provider Types Affected
Physicians and practitioners billing Medicare carriers

Provider Action Needed
Physicians and practitioners should note there are changes to the 2005 MPFSDB. The new fees are posted on the Medicare carriers’ Web site.

Background
MPFSDB files were issued to carriers based upon the November 15, 2004, Medicare Physician Fee Schedule Final Rule. These are the fees that are on the CDs that were recently mailed to all physicians as part of the annual participation enrollment process.

However, the Centers for Medicare & Medicaid Services (CMS) has made a few changes to that database. These include changes to a few CPT codes with respect to status indicators, global periods, and the addition of 12 demonstration codes (G9021- G9032) for use with chemotherapy infusion. A new MPFSDB file was released to carriers and this new MPFSDB file will be posted to your local carrier’s Web site. Physicians and practitioners should refer to their local carrier Web site to view the new updated fees.

Implementation
The implementation date for the new fees is January 3, 2005. However, the new fees will be available on your Medicare carrier’s Web site before January 1.

Additional Information
The specific changes to the fee schedule are identified in an attachment to the instructions issued to your carrier. Those instructions are CR 3595 and they may be viewed by going to:
http://www.cms.hhs.gov/manuals/transmittals/comm_date_dsc.asp

Once at that page, scroll down the CR NUM column on the right looking for CR 3595, then click on the file for that CR.

If you have any questions regarding this issue, please contact your carrier at their toll free number, which may be found at: http://www.cms.hhs.gov/MedlearnProducts/downloads/CallCenterTollNumDirectory.pdf

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End Stage Renal Disease (ESRD) Reimbursement for Automated Multi-Channel Chemistry Tests (AMCC)

IMPORTANT NOTE: CR 2813 been revised by CR 3609, Emergency Change to Carrier Instructions for the End Stage Renal Disease (ESRD) 50/50 Rule Implementation. CR 3609 notifies carriers to discontinue the implementation of the business requirements associated with CR 2813 until further notice. To see MM3609, the Medlearn Matters article related to CR 3609, go to: http://www.cms.hhs.gov/MedlearnMattersArticles/downloads/MM3609.pdf

Provider Types Affected
Physicians, suppliers, and ESRD facilities.

Provider Action Needed
Affected providers should note that this instruction begins the implementation of procedures to enforce compliance with the 50/50 payment policy for ESRD-related laboratory services. The Centers for Medicare & Medicaid Services (CMS) is staggering the programming for this payment policy over multiple releases. Independent labs are not to revise their billing procedures at this time. CMS will release additional provider education in the future to educate providers regarding the effective date of revised billing procedures.

Medicare carriers will have front-end edits to reject any line items containing the “CD,” “CE,” or “CF” modifiers, as referenced in this article, until further notice.

Background
Medicare’s composite rate payment to an ESRD facility or Monthly Capitation Payment (MCP) to a physician includes reimbursement for certain routine clinical laboratory tests furnished to an ESRD
beneficiary.

In other words, if 50 percent or more of the covered tests are included under composite payment rate tests, then all submitted claims are included within the composite payment. In this case, no separate payment in addition to the composite payment rate is made for any of the separately billable tests. However, if more than 50 percent of the covered tests are non-composite payment rate tests, then all AMCC tests submitted for that date of service are separately payable.

Defining Non-Composite Payment Rate Tests
A non-composite payment rate test is defined as any test separately reimbursable outside of the composite payment rate or beyond the normal frequency covered under the composite payment rate that is reasonable and necessary. Also, all chemistries ordered for beneficiaries with chronic dialysis for ESRD must be billed individually and must be rejected when billed as a panel.

The physician who orders the tests is responsible for identifying the appropriate modifier when ordering the test(s), and three pricing modifiers discretely identify the different payment situations for ESRD AMCC services as follows:

In addition, the ESRD clinical laboratory test identified with modifiers “CD,” “CE,” or “CF” may not be billed as organ or disease panels. Upon the effective date of this requirement, all ESRD clinical laboratory tests must be billed individually.

Carrier Standard System Calculation
The Medicare carrier’s standard system will calculate the number of AMCC services provided for any given date of service. For a date of service, it should add all AMCC tests that have a CD modifier and divide by the sum of all line items with a CD, CE, or CF modifier for the same beneficiary and billing supplier/provider for any given date of service.

The carrier will adjust a previous claim when the incoming claim for a date of service is compared to a claim history and the action is to pay a previously denied claim. The Medicare carrier will spread the payment amount over each line item on both claims (the claim on history and the incoming claim).

ESRD Facilities
ESRD facilities must specify for each test, when ordering an ESRD-related AMCC tests, whether the test is:

Laboratories
Laboratories must identify the following:

The laboratory tests subject to this rule are those tests included within AMCC tests and then only when furnished to an ESRD beneficiary, based upon an order by:

Implementation
ON HOLD See Medlearn Matters article MM3609.

Related Instructions
The Medicare Claims Processing Manual, Chapter 16 (Laboratory Services from Independent Labs, Physicians, and Providers), Section 40 (Billing for Clinical Laboratory Tests), Subsection 6.1 (Billing for End Stage Renal Disease (ESRD) Related Laboratory Tests) was revised and can be found in Transmittal 79 of Pub 100-04, the original release of CR2813. This original CR may be found at: http://www.cms.hhs.gov/manuals/pm_trans/R79CP.pdf

The latest re-issuance, which includes tables listing the tests involved in this issue may be found at: http://www.cms.hhs.gov/manuals/pm_trans/R164CP.pdf

This transmittal, which is Transmittal 164, also has some helpful examples of billing these tests as well as tables to show which tests is part of the composite rate and which are not.

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Hospice Pre-Election Evaluation and Counseling Services

Provider Types Affected
Hospices, their medical directors and physician employees

Provider Action Needed

STOP – Impact to You
Section 512 of the Medicare Prescription Drug Improvement and Modernization Act of 2003 (MMA) provides for a one-time payment to a hospice for pre-election evaluation and counseling services furnished by a physician who is either a medical director or an employee of the hospice agency. HCPCS code G0337 will be used for these services and the payments for these services will not be included in the hospice payment cap.

CAUTION – What You Need to Know
Effective with services provided on or after January 1, 2005, Medicare systems will pay for hospice pre-election evaluation and counseling services furnished by the hospice medical director or physician employee no more than one time only per beneficiary. Payment will be made on behalf of a beneficiary who is terminally ill (prognosis of six months or less if the disease runs its normal course), has not made a hospice election, and has not previously received hospice pre-election evaluation and counseling services.

GO – What You Need to Do
To ensure accurate claims processing, please review the information included here and stay current with instructions for hospice pre-election evaluation and counseling services. (The FY 2005 national payment amount for this service will be $54.57; future changes in the rate will be identified in the Physician Fee Schedules.)

Background
Effective January 1, 2005, Section 512 of the MMA amends Section 1812(a)(1)(5), 1814(i) and 1816(dd) of the Act to provide for a one-time payment to a hospice for evaluation and counseling services furnished by a physician who is either the medical director or an employee of the hospice agency.

To be eligible to receive this service, a beneficiary must:

The above noted services are currently available through other Medicare benefits. Therefore, this service may not be reasonable and necessary for all individuals. However, if a beneficiary or the beneficiary’s physician deem it necessary to seek the expertise of a hospice medical director or physician employee, this benefit is available to assure that a beneficiary’s end-of-life options for care and pain management are addressed.

Please note that the evaluation and counseling service may not be initiated by the hospice (that is, the entity receiving payment for the service).

Payments by hospice agencies to physicians or others in a position to refer patients for services furnished under this provision may implicate the Federal anti-kickback statute.

If the beneficiary’s physician is also the medical director of a hospice, employed by a hospice, or possesses expertise in the provision of palliative or hospice care, that physician:

Documentation
Appropriate documentation guidelines should be followed whether the beneficiary or the beneficiary’s physician initiates the request for the evaluation and counseling service.

If the beneficiary’s physician initiates the request, which must be in writing, then:

The hospice medical director or physician employee would be expected to provide a written note on the patient’s medical chart and maintain a written record of this service.

If the beneficiary initiates the request for the service, the hospice medical director or physician employee should:

Payment
Section 512 of the MMA specifies that the payment will be made to the hospice for services provided by the hospice medical director or physician employed by the hospice. The provision of these services may not be delegated to any other hospice personnel (such as nurse practitioners, registered nurses, social workers, or others) and may not be furnished by a physician under contract with the hospice.

Payment to the hospice agency for the provision of this evaluation and counseling service is made using HCPCS code G0337. The national payment amount for this service for FY 2005 will be $54.57.

Code G0337 will be paid only when billed by the hospice agency to its Medicare intermediary. Claim line items with G0337 submitted to a Medicare carrier will be denied. The hospice should submit such claims to its intermediary using type of bill 81x or 82x with the G0337 code and a revenue code of 0657 as the only revenue code on the claim.

Future changes in the rate will be identified in the Physician Fee Schedule.

The payment for these services is not included in the hospice payment cap, as the Evaluation and Counseling provision is not a service within the hospice benefit.

Additional Information
The official instructions issued to the intermediary regarding this change can be found at: http://www.cms.hhs.gov/manuals/transmittals/comm_date_dsc.asp

On the above page, scroll down while referring to the CR NUM column on the right to find the links for CR3585. Click on the links to open and view the files for those CRs.

The two issuances of CR3585 include the actual revised sections of the Medicare Claims Processing and Medicare Benefit Policy Manuals resulting from this change.

If you have questions regarding this issue, please contact your fiscal intermediary at their toll free number, which may be found at: http://www.cms.hhs.gov/MedlearnProducts/downloads/CallCenterTollNumDirectory.pdf

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Implementation of Section 921 of the Medicare Modernization Act (MMA) - Provider Customer Service Program

Provider Types Affected
Physicians, providers, and suppliers

Provider Action Needed
This instruction implements Section 921 of the Medicare Modernization Act (MMA). It creates the Provider Customer Service Program (PCSP) at most Medicare contractors. Collectively, carriers and fiscal intermediaries (FIs) are referred to as contractors or Medicare contractors. Because of funding limitations, the Centers for Medicare & Medicaid Services (CMS) is implementing this instruction in phases. Currently, only carriers and some FIs will be implementing this program in January 2005.

Check with your carrier/FI to see if they are participating in the first phase.

Background
Medicare contractors are required to implement a PCSP designed to meet provider informational and educational needs.

The PCSP flows from provisions in Section 921 of the MMA that strengthen and enhance Medicare’s ongoing efforts associated with provider inquiries and education. The PCSP is designed to improve accuracy, completeness, consistency, and timeliness by ensuring that providers’ issues are addressed by staff with the appropriate levels of expertise.

The PCSP includes the following three principal components:

Provider Self-Service Technology

Provider Contact Center
The PCC will respond to inquiries from the following:

Contractors will use an inquiry triage process for telephone inquiries to ensure that inquiries are answered by the staff with the appropriate expertise. Each contractor will organize its customer service representatives (CSRs) into at least two levels.

Inquiries that require even more specialized expertise or research or that just require significant additional time to resolve will be referred to a new group, the Provider Relations Research Specialists (PRRSs).The PRRS will provide clear and accurate written answers within 10 business days for at least 75 percent of cases referred by telephone CSRs, 20 business days for 90 percent of the cases referred by telephone CSRs, and 45 business days for 100 percent of all cases (referred by CSRs or from the general inquiries area). All general inquiries (letter, fax, and e-mail) will be answered within 45 business days.

Provider Outreach and Education
This component of the PCSP includes all provider outreach, education, and training activities that your carrier/FI currently performs, plus some additional requirements and activities. These new areas include:

Small providers are defined by law as providers with fewer than 25 full-time equivalents or suppliers with fewer than 10 full-time equivalent staff. Contractors are required to identify providers meeting the definition of small providers and, beginning April 1, 2005, offer to all providers at least two educational programs tailored to the needs of the small providers/suppliers within their jurisdiction. Thereafter, contractors shall offer at least one additional event tailored to small providers per quarter with a minimum of six such events per state per federal fiscal year. (Thus, there may be more than one event in certain quarters of the year.)

Additional Information
For complete details, please see the official instruction issued to your contractor regarding this change. That instruction may be viewed by going to: http://www.cms.hhs.gov/manuals/transmittals/comm_date_dsc.asp

From that web page, look for CR 3376 in the CR NUM column on the right, and click on the file for that CR.

If you have any questions or want to take advantage of any opportunities under this expanded PCSP, visit the Web site of your carrier/intermediary or call them at their toll-free number, which may be found at: http://www.cms.hhs.gov/MedlearnProducts/downloads/CallCenterTollNumDirectory.pdf

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Initial Preventive Physical Examination

Provider Types Affected
Physicians, providers, and suppliers

Provider Action Needed

STOP – Impact to You
Effective for dates of service on or after January 1, 2005, Section 611 of the Medicare Modernization Act provides for coverage under Part B of an initial preventive physical examination (IPPE) for new Medicare beneficiaries, but only if the beneficiary’s eligibility also begins on or after January 1, 2005.

CAUTION – What You Need to Know
This new benefit is subject to certain eligibility and other limitations as described in this article.

GO – What You Need to Do
Understand the new rules for providing this important new benefit to ensure prompt and accurate payment for services.

Background
The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA Section 611) provides for coverage under Medicare Part B of an initial preventive physical examination (IPPE), including a screening electrocardiogram (EKG) for new beneficiaries (subject to certain eligibility and other limitations) effective for services furnished on or after January 1, 2005.

In addition, pursuant to final regulations published on November 15, 2004 (42 CFR 410.16, added by 69 FR 66236, 66420) CMS amended 42 CFR sections 411.15 (a)(1) and 411.15 (k)(11) to allow payment for an IPPE not later than 6 months after the date the beneficiary’s first coverage period begins under Medicare Part B.

This physical examination is a once-a-lifetime benefit for a beneficiary and it must be performed within six months after the effective date of the beneficiary’s first Part B coverage, but only if such Part B coverage begins on or after January 1, 2005. A physical examination given on January 10, 2005, for example, to a beneficiary whose Medicare Part B was effective initially on December 1, 2004, would not be covered under this benefit. If a beneficiary is first covered by Part B on January 1, 2005, then a physical provided on January 10, 2005, would be covered by this new benefit.

This provision provides for payment for an IPPE examination to be performed in various provider settings by:

Services Included in the Initial Examination
The initial examination means all of the following services:

A new Healthcare Common Procedure Coding System (HCPCS) code, G0344 (IPPE; face-to-face visit, services limited to new beneficiary during the first six months of Medicare enrollment), will be used for billing the IPPE. As required by statute, this benefit always includes a screening EKG, which should be billed appropriately using new HCPCS codes G0366 (Electrocardiogram, routine ECG with 12 leads; performed as a component of the initial preventive examination with interpretation and report) for the full EKG service; G0367 (tracing only, without interpretation and report; performed as a component of the initial preventive examination) when only the tracing is performed; and G0368 (interpretation and report only, performed as a component of the initial preventive examination) when only the interpretation and report are performed. These three codes reflect the global, technical, and professional components of the screening EKG, respectively.

If the primary physician or qualified NPP does not perform the EKG during the IPPE visit, another physician or entity may perform and/or interpret the EKG. But, the referring provider must ensure that the performing provider bills the appropriate G code for the screening EKG and not a CPT code in the 93000 series.

Physicians and qualified NPPs should bill G0366 for the full EKG service (tracing, interpretation, and
report), or G0367 when only the tracing is performed, or G0368 when only the interpretation or reporting is performed. Hospitals can only perform the EKG tracing, so they should bill G0367 when they perform the tracing component of the EKG.

While some components for a medically necessary evaluation and management (E/M) service will be
reflected in the new HCPCS code of G0344, Medicare will, when it is clinically appropriate, allow payment for a medically necessary E/M service (CPT codes 99201-99215) at the same visit as the IPPE. That portion of the visit must be medically necessary to treat the patient’s illness or injury or to improve the function of a malformed body member and will be reported with modifier –25.

A physician or qualified NPP, in various provider settings, may bill for the screening and other preventive services currently covered and paid by Medicare Part B under separate provisions of section 1861 of the Act, if provided during this IPPE.

The MMA did not make any provision for the waiver of Medicare coinsurance and Part B deductible for the IPPE. Payment for this service would be applied to the required deductible, which is $110 for calendar year 2005, if the deductible has not been met, with the exception of Federally Qualified Health Centers (FQHCs), and the usual coinsurance provisions would apply.

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Medicare Prescription Drug, Improvement and Modernization Act of 2003 Information for Medicare Rural Health Providers, Suppliers, and Physicians - Revised

Note: This article was revised on December 14, 2004, to reflect the correct dates for which Section 713 of the MMA is applicable.

Provider Types Affected
Medicare rural providers, suppliers, and physicians

Provider Action Needed
This Special Edition summarizes and explains rural health provisions included in the Medicare Prescription Drug, Improvement and Modernization Act (MMA) of 2003.

Hospital Inpatient Prospective Payment System (PPS)
MMA Section 401 – As of April 1, 2004
The urban and rural standardized amounts under the Hospital Inpatient PPS will be permanently equalized by establishing a single base payment or standardized amount for hospitals in all areas of the 50 states, the District of Columbia, and Puerto Rico. The Centers for Medicare & Medicaid Services (CMS) has implemented the following:

MMA Section 401(d)(2) – From April 1, 2004 through September 30, 2004
Puerto Rico-specific other area rates will exceed the Puerto Rico urban rate so that the requirements of the provision can be implemented without reprocessing claims.

MMA Section 402 – For discharges on or after April 1, 2004
The Disproportionate Share Hospital (DSH) adjustment for rural hospitals, rural referral centers, Sole Community Hospitals (SCHs), and urban hospitals with fewer than 100 beds will be increased. The cap on the adjustment will be 12 percent, except for hospitals classified as rural referral centers. The formulas to establish a hospital’s DSH payment adjustment are based on the following:

Under §1886(d)(5)(F) of the Social Security Act (SSA), Medicare makes additional DSH payments to acute hospitals that serve a large number of low-income Medicare and Medicaid patients as part of its Inpatient PPS.

The new DSH adjustment is not applicable to Pickle Hospitals, as defined at §1886(d)(5)(F)(i)(II) of the SSA.

Effective April 1, 2001, as specified in §211 of the Medicare, Medicaid, and State Children’s Health Insurance Program (SCHIP) Benefits Improvement and Protection Act of 2000, all inpatient PPS hospitals that meet the number of beds requirement are eligible to receive DSH payments when their DSH patient percentage meets or exceeds 15 percent.

MMA Section 504 – For discharges occurring on April 1, 2004 through September 30, 2004
The current blend of input into Medicare payments will be changed from 50 percent for national and 50 percent for Puerto Rico to 62.5 percent for national and 37.5 percent for Puerto Rico.

On October 1, 2004, the blend will be further adjusted to 75 percent for national and 25 percent for Puerto Rico.

For discharges occurring on or after April 1, 2004 through September 30, 2004, the new fixed-loss amount used to determine the cost outlier threshold is $30,150.

This fixed-loss amount is part of the equation used to determine inpatient operating and capital-related costs in both the operating PPS and the capital PPS. Because the fixed-loss amount is being changed for discharges during this period, the resultant new capital PPS rates are $413.48 for national and $202.96 for Puerto Rico.

These rates were determined by an updated national Geographic Adjustment Factor/Diagnosis-Related Group (GAF/DRG) adjustment factor of 1.0025 with an outlier adjustment of 0.9508 and a Puerto Rico GAF/DRG adjustment factor of 1.0011 with an outlier of 0.9922.

Hospital Inpatient PPS Wage Index
MMA Section 403(b) – For discharges occurring on or after October 1, 2004
The percentage of hospital inpatient PPS payment adjustment based on the area hospital wage index will be decreased from 71.1 percent to 62 percent. These payments are adjusted by the hospital wage index of the area where the hospital is located or the area in which the hospital is classified. The decrease in the percentage of Hospital Inpatient PPS payment adjustment is applicable only if the hospital would receive higher total payments.

Hospital Market Basket Weight Updates
MMA Section 404 – By October 1, 2005
The frequency with which CMS revises the category weights, re-evaluates the price priorities for the category weights, and rebases the hospital market basket will be determined. The hospital market basket weights are currently updated once every five years. Annual Hospital Inpatient PPS standardized amount increases are determined in part by the projected increase in the hospital market basket, which is the factor used to estimate the change in price of goods and services used to furnish inpatient hospital care.

Critical Access Hospitals (CAHs)
MMA Section 405(a)
CAHs will be paid under the Standard Method Payment – Cost-Based Facility Services with Billing of Carrier for Professional Services, unless they elect to be paid under the Optional (Elective) Payment Method.

For cost reporting periods beginning on or after January 1, 2004:
Outpatient CAH services payments have been increased to the lesser of the following:

As of January 1, 2004:
The Optional Payment Method – Cost-Based Facility Services Plus 115 Percent Fee Schedule Payment for professional services for outpatient CAH services is based on the sum of the following:

MMA Section 405(a) – For cost reporting periods beginning on or after January 1, 2004
Reimbursement for services furnished will be based on 101 percent of the CAH’s reasonable costs, up from 100 percent of reasonable costs.

MMA Section 405(b) – For services furnished on or after January 1, 2005
Cost-based reimbursement is extended to on-call emergency room physician’s assistants, nurse practitioners, and clinical nurse specialists who are on-call emergency room providers.

MMA Section 405(c) – For services furnished on or after July 1, 2004
Periodic interim payments will be paid every two weeks to CAHs that provide inpatient services and meet certain requirements.

MMA Section 405(d) – For cost reporting periods beginning on and after July 1, 2004
Physicians or other practitioners providing professional services in the hospital are not required to reassign their Part B benefits to the CAH in order for the CAH to select the Optional Payment Method. The following applies:

MMA Section 405(e) – Beginning on January 1, 2004
Prior to January 1, 2004, a CAH could not operate more than 15 acute care beds or more than 25 beds if it included up to 10 swing beds.

CAHs may operate up to 25 beds for acute (hospital-level) inpatient care, subject to the 96-hour average length of stay for acute care patients. For CAHs with swing bed agreements, any of its beds may be used to furnish either inpatient acute care or swing bed services.

MMA Section 405(f) – The Medicare Rural Hospital Flexibility Program (FLEX)
This program has been reauthorized to make grants to all states in the amount of $35 million in each of fiscal years (FY) 2005 through 2008. The FLEX program makes grants for specified purposes to states and eligible small rural hospitals.

MMA Section 405(g) – For cost reporting periods beginning on or after October 1, 2004
CAHs may establish psychiatric units and rehabilitation units that are distinct parts (DP) of the hospital.

The total number of beds in each CAH DP may not exceed ten. These beds will not count against the CAH inpatient bed limit. The psychiatric and rehabilitation DPs must meet the applicable requirements for such beds in short-term general hospitals, and Medicare payments will equal payments to units of short-term general hospitals for these services.

MMA Section 405(h) – Until January 1, 2006
States can continue to certify facilities as necessary providers in order for them to be designated as CAHs.

Low Volume Hospitals
MMA Section 406 – Effective October 1, 2004
Low volume hospitals can receive an additional percentage increase, capped at 25 percent, based on the relationship between the cost-per-case and the number of discharges for acute inpatient hospitals. A low volume hospital is a hospital that has fewer than 800 discharges during the fiscal year and is located more than 25 road miles from another acute care hospital.

Hospice
MMA Section 408 – Effective December 8, 2003
Nurse practitioners can serve as the attending physician for a patient who elects the hospice benefit. Nurse practitioners acting as the attending physician are prohibited from certifying the terminal diagnosis.

MMA Section 409 – Demonstration project
A demonstration project will be conducted for five years to test delivery of hospice care in rural areas, under which Medicare eligible individuals without a caregiver at home may receive care in a facility of 20 or fewer beds. This facility will not have to offer hospice services in the community or comply with the 20 percent limit on inpatient days.

MMA Section 512 – Effective on or after January 1, 2005
MMA provides for coverage of certain physician’s services for certain terminally ill patients. Beneficiaries entitled to these services are those who have not yet elected the hospice benefit and have not previously received these services. The covered services include evaluating the patient’s need for pain and symptom management, including the need for hospice care, counseling the beneficiary on end-of-life issues and care options, and advising the beneficiary regarding advanced care planning.

The covered services are those furnished by a physician who is the medical director or employee of a hospice program.

Federally Qualified Health Centers (FQHCs)
MMA Section 410 – For services furnished on or after January 1, 2005
Professional services provided by physicians, physician’s assistants, nurse practitioners, and clinical psychologists who are affiliated with FQHCs are excluded from the Skilled Nursing Facility (SNF) PPS in the same manner such services would be excluded if provided by individuals not affiliated with FQHCs.

MMA Section 431 – Safe harbor
A final rule will be published that contains standards for a new safe harbor to the anti-kickback statute. Under this safe harbor, prohibitions against kickbacks will not apply to remuneration under a contract, lease, grant, loan, or other agreement between certain FQHCs and any individual or entity that provides items, services, donations, or loans to the FQHC. The arrangement must contribute to the FQHC’s ability to maintain or increase the availability or quality of services provided to a medically underserved population. These standards will determine whether the arrangement:

Rural Health Clinics (RHCs)
MMA Section 410 – For services furnished on or after January 1, 2005
Professional services provided by physicians, physician’s assistants, nurse practitioners, and clinical psychologists who are affiliated with RHCs are excluded from the SNF PPS, in the same manner as such services would be excluded if provided by individuals not affiliated with RHCs.

Rural Community Hospitals (RCHs)
MMA Section 410(A) – Not before October 1, 2004 or later than January 1, 2005
A five-year demonstration program will be conducted to test the advisability and feasibility of establishing RCHs to provide Medicare covered inpatient hospital services in rural areas. A RCH is a hospital located in a rural area, or reclassified as such, with fewer than 51 acute care beds that is not currently designated or eligible for designation as a CAH and makes 24-hour emergency care services available.

DP psychiatric and rehabilitation beds do not count toward the bed limit. Not more than 15 hospitals in states with low population densities will be selected to participate in the demonstration. Medicare payment to the hospitals will be on the basis of reasonable costs or a “target amount” of prior year reasonable costs plus the increase in the inpatient hospital update factor.

Hold Harmless Reimbursement Provisions
MMA Section 411 – Beginning with cost reporting periods on and after January 1, 2004
Hold harmless reimbursement provisions for hospital Outpatient Department (OPD) services performed at small rural hospitals and SCHs will be extended for two years. Under the hold harmless reimbursement provisions, small rural hospitals and SCHs with no more than 100 beds are paid no less under the Hospital OPD PPS than they would have been paid under the prior reimbursement system for covered OPD services provided before January 1, 2004.

Effective January 1, 2006, payments to small rural hospitals and SCHs may be increased if a study finds that rural costs of providing outpatient services is greater than urban costs of providing outpatient services.

Work Geographic Adjustment
MMA Section 412 – Work geographic index
The work geographic index will be raised to 1.0 in any physician payment locality where the index is less than 1.0 during 2004, 2005, and 2006. The work geographic index reflects the geographic variation in average professional compensation in one area compared to the national average.

Medicare Incentive Payment Programs for Physician Scarcity Areas (PSAs) and Health Professional Shortage Areas (HPSAs)
MMA Section 413 – For services furnished on or after January 1, 2005 and before January 1, 2008
For services furnished on or after January 1, 2005, and before January 1, 2008, a new PSA incentive payment of five percent will be available to primary care and specialty physicians in areas that have few physicians available. Counties will be identified based separately on the ratio of primary care physicians to Medicare eligible individuals residing in the county and on the ratio of specialist care physicians to Medicare eligible individuals residing in the county. To the extent that it is feasible, a rural census tract of a metropolitan statistical area, commonly known as the Goldsmith Modification area, will be counted as a scarcity area.

Effective January 1, 2005, the HPSA incentive payment will be paid automatically for services furnished in full county primary care geographic area HPSAs and mental health HPSAs rather than having the physician identify that the services are furnished in such areas. Services provided in areas other than full county HPSAs will still require the submission of a modifier to receive the bonus payment.

CMS will develop a user-friendly Web site that contains HPSA and PSA information, and before the beginning of the calendar year, a list of the HPSAs for which the incentive payments will automatically be made for the year.

Ambulance Services
MMA Section 414 – Effective July 1, 2004
An alternate fee schedule phase-in formula will be established for certain providers and suppliers based on a specified blend of the national fee schedule and a regional fee schedule based on census division. This provision is designed to ease the transition to the national fee schedule. If the alternate phase-in formula for a census division results in higher payment, all providers and suppliers in that region will be paid under that formula and their phase-in will last through 2010. Mileage payment increases are as follows:

MMA Section 415 – Effective January 1, 2005
Rural air ambulance services will be reimbursed at the air ambulance rate if the services:

Rural air ambulance services are deemed medically necessary when they are requested by:

In most cases, the presumption of medical necessity does not apply if:

Outpatient Hospital Clinical Diagnostic Laboratory Tests
MMA Section 416 – For cost reporting periods beginning July 1, 2004 through June 30, 2006
Part B covered outpatient hospital clinical diagnostic laboratory tests furnished by rural hospitals with fewer than 50 beds located in rural areas with a population density in the lowest quartile of all rural county populations will be reimbursed on a reasonable cost basis.

Telemedicine
MMA Section 417 – Telemedicine demonstration
This section extends the telemedicine demonstration four additional years and authorizes an additional $30 million in funding. This demonstration uses high-capacity computer systems and medical informatics to improve primary care and prevent health complications in Medicare eligible individuals with diabetes mellitus who live in isolated rural and inner city areas.

Originating Telehealth Sites
MMA Section 418 – For Telehealth service beginning on January 1, 2006
The Health Resources & Services Administration (HRSA), in consultation with CMS, will evaluate the feasibility of including SNFs in the list of permissible originating sites for telehealth services beginning on January 1, 2006.

Home Health (HH) Agencies
MMA Section 421 – For Medicare Part A and Part B episodes and visits beginning on April 1, 2004 and before April 1, 2005
There will be a payment increase of five percent to HH agencies for services furnished in rural areas.

MMA Section 701(a) and 701(b) – HH Payment Update
These sections provide for holding the HH payment update at the current rate of the HH market basket percentage increase for the last calendar quarter of 2003 and the first calendar quarter of 2004.

Beginning with the last three calendar quarters of 2004 and continuing through calendar years 2005 and 2006, the HH update will be based on the HH market basket percentage increase minus 0.8 percent. Beginning in 2005, the annual HH PPS update will be effective in January of each year rather than in October.

Unused Resident Positions
MMA Section 422 – Effective July 1, 2005
Resident positions from hospitals that have not met their resident full-time equivalent (FTE) cap for the most recently settled or submitted (subject to audit) cost reporting period will be redistributed.

Redistribution of these positions is based on the difference between the hospital’s otherwise applicable FTE cap or “otherwise applicable resident limit” and the number of resident slots filled in the most recently settled/submitted cost reporting period or the “reference resident level.”

There are some exceptions regarding the expansion of existing programs or previously approved new residency programs that may apply to the calculation of the “reference resident level.” Unused residency positions are limited to no more than 25 FTEs. They will be redistributed based on location, with priority given in the following order:

  1. Rural hospitals
  2. Small urban hospitals
  3. Hospitals that are the only ones with a particular residency program in the state. Whether the hospital will be likely to fill such positions within the first three cost periods after the determination is made will be taken into account.

Expanded Responsibilities of Office of Rural Health Policy
MMA Section 432 – Effective December 8, 2003
The HRSA Office of Health Policy’s responsibilities will be expanded to include the administration of grants, cooperative agreements, contracts, and other activities that will improve health care in rural areas.

Medicare Payment Advisory Commission (MedPAC) Study
MMA Section 433
The MedPAC will analyze how certain rural sections in the MMA affect total payments, growth in costs, capital spending, and other payments.

Frontier Extended Stay Clinics (FESCs)
MMA Section 434(a) – Demonstration Project
A demonstration project will be conducted for three years under which FESCs located in isolated rural areas are treated as Medicare providers. The clinics must be located at least 75 miles from the nearest acute care hospital or be inaccessible by public road. The clinics also must be designed to address the needs of seriously ill, critically ill, or injured patients who, because of adverse weather conditions or for other reasons, need monitoring and observation for a limited period of time.

Indirect Medical Education (IME) Adjustment
MMA Section 502
For discharges occurring between April 1, 2004 and October 1, 2004, the IME add-on percentage will be 5.98 percent; during FY 2005, 5.79 percent; during FY 2006, 5.58 percent; during FY 2007, 5.38 percent; and during FY 2008 and future years, 5.5 percent.

Graduate Medical Education
 MMA Section 711
For cost reporting periods beginning on or after October 1, 2004 through September 30, 2013, the freeze on updates to the hospital per resident amounts that exceed 140 percent of the geographically adjusted national average will be reinstated.

MMA Section 712
For cost reporting periods beginning on or after October 1, 2003, regardless of the reduction in the initial period of board eligibility by relevant medical boards, the geriatric exception to allow up to two years of additional training in a geriatrics program is considered part of the initial residency period.

MMA Section 713
For a one-year period beginning on January 1, 2004, hospitals will be allowed to count residents who are training at non-hospital sites in osteopathic and allopathic family programs that have been in existence as of January 1, 2002, regardless of the financial arrangement between the hospital and the supervisory teaching physician.

Additional Information
For detailed information about the MMA, please visit: http://www.cms.hhs.gov/medicarereform

For the MMA Update, please visit: http://www.cms.hhs.gov/mmu

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Minimum Number of Drug Pricing Files That Must Be Maintained Online for Medicare

This article was revised on December 15, 2004, to show that it does not apply to providers and suppliers billing Durable Medical Equipment Regional Carriers (DMERCs).

Provider Types Affected
All providers billing Medicare carriers for drugs.

Provider Action Needed
None. This change request is for your information only.

Background
Medicare is creating a new minimum standard for the number of online drug price determination files that your Medicare carrier will maintain. The new minimum standard is eight fee screens/pricing files (the current period and seven prior files) for Part B (payment on a fee-for-service) drugs that you bill.

Since January 1, 2003, Medicare carriers have paid drug claims based on the prices shown on the Single Drug Pricer (SDP) files. The Centers for Medicare & Medicaid Services (CMS) is creating a new minimum standard for the number of online pricing files maintained by carriers for determining drug prices. The new minimum standard is raised from five to eight fee screens/pricing files for Part B drugs billed to carriers for payment on a fee-for-service basis.

This will allow Medicare to be more precise in paying the rate in effect at the time services are provided.

Additional Information
To view the actual instruction issued to your carrier, go to: http://www.cms.hhs.gov/manuals/transmittals/comm_date_dsc.asp

From that web page, look for CR 3231 in the CR NUM column on the right, and click on the file for that CR.

If you have any questions, please contact your carrier at their toll-free number, which may be found at: http://www.cms.hhs.gov/MedlearnProducts/downloads/CallCenterTollNumDirectory.pdf

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Mobile Cardiac Outpatient Telemetry Pricing (Revised)

Guidelines including pricing for the above service were posted on the CIGNA Government Services Web site 12/10/04. It incorrectly stated reimbursement would be based on CPT code 93732 (ELECTRONIC ANALYSIS OF DUAL-CHAMBER INTERNAL PACEMAKER SYSTEM (MAY INCLUDE RATE, PULSE AMPLITUDE AND DURATION, CONFIGURATION OF WAVE FORM, AND/OR TESTING OF SENSORY FUNCTION OF PACEMAKER); WITH REPROGRAMMING). Instead, reimbursement will be based on CPT code 93272 (Patient demand single or multiple event recording with presymptom memory loop, 24-hour attended monitoring, per 30 day period of time; physician review and interpretation only). The article is being republished in its entirety as follows to include this correction.

Mobile Cardiac Outpatient Telemetry (MCOT) is real-time, outpatient cardiac monitoring system that is automatically activated and requires no patient intervention to either capture or transmit an arrhythmia when it occurs. Upon arrhythmia detection, the ECG waveform is transmitted by standard telephone line or wireless communications to the Pennsylvania receiving center monitoring the patient and reporting significant findings according to the physician’s patient-specific, pre-determined criteria.

At this point in time, there is no assigned CPT code for this service, nor is there a Local or National Coverage Decision (LCD or NCD) that specifically addresses this procedure. Providers rendering this service need to know and follow these guidelines:

Providers should not submit any medical record documentation with the initial claim. Upon receipt of the claim, CIGNA Government Services will solicit additional documentation by means of an Additional Documentation Request (ADR) letter. Providers who qualify for the exception to bill on paper and elect to do so, should insert “MCOT” in Field 19 of Form CMS - 1500. Electronic billers should enter “MCOT” in the NTE segment (notes and comment segment). This is the electronic equivalent for Field 19 of Form CMS - 1500 in HIPAA compliant transactions.

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Ocular Photodynamic Therapy (OPT) with Verteporfin for Age-Related Macular Degeneration (AMD) - Revised

Note: This article was revised on December 14, 2004, to show that HCPCS code J3396, instead of J3395, should be used for services rendered on or after January 1, 2005.

Provider Types Affected
All Medicare providers

Provider Action Needed

STOP – Impact to You
This National Coverage Determination (NCD) provides for a change in the Medicare coverage policy for the use of Ocular Photodynamic Therapy (OPT) with verteporfin for age-related macular degeneration (AMD). Under certain conditions (described below), OPT with verteporfin for AMD will now be covered for additional clinical indications.

CAUTION – What You Need to Know
CMS has determined that, provided certain criteria are met, OPT with verteporfin (CPT codes 67221 and 67225, as well as HCPCS code J3395) will now be covered for AMD in two additional clinical instances:

  1. subfovial occult lesions with no classic choroidal neovascularization (CNV); and
  2. subfoveal minimally classic CNV associated with AMD.

Note: HCPCS code J3396 should be used instead of J3395 for services on or after January 1, 2005.

GO – What You Need to Do
Make sure that your billing staffs are aware of these coverage changes.

Background
This NCD is documented in revisions to Chapters 80.2 and 80.3 of Pub. 100-03. Remember that NCDs are binding on all Medicare carriers, fiscal intermediaries, quality improvement organizations, health maintenance organizations, competitive medical plans, and health care prepayment plans. An NCD is also binding on Medicare + Choice Organizations. Administrative Law Judges may not review NCDs.

This NCD addresses coverage for the use of OPT with verteporfin in additional clinical instances. OPT with verteporfin continues to be approved for patients with a diagnosis of neovascular AMD with predominately classic subfoveal CNV lesions (where the area of classic CNV occupies > 50% of the area of the entire lesion).

Note: Remember that this diagnosis must be determined by a fluorescein angiogram at the initial visit.

Also, there are no requirements regarding visual acuity, lesion size, and number of re-treatments when treating predominantly classic lesion patients; however, they do require a fluorescein angiogram in subsequent, follow-up visits prior to treatment.

In addition to this diagnosis, after thorough review and reconsideration of the August 20, 2002 noncoverage policy, CMS has determined that there is enough evidence to conclude that OPT with verteporfin, in certain instances, may be reasonable and necessary for treating subfoveal occult lesions with no classic CNV and subfoveal minimally-classic CNV lesions (where the area of classic CNV occupies <50% of the area of the entire lesion).

When Covered Indications are Reasonable and Necessary
These two new covered indications are considered reasonable and necessary only when:

Be aware that the other AMD-related uses of OPT with verteporfin, not already addressed by CMS, will continue to be noncovered. These include, but are not limited to: juxtafoveal or extrafoveal CNV lesions (lesions outside the fovea); inability to obtain a fluorescein angiogram; or atrophic or “dry” AMD.

On the other hand, the use of OPT with verteporfin for other ocular indications, such as pathologic myopia or presumed ocular histoplasmosis syndrome, continue to be eligible for local coverage determinations through individual Medicare contractor discretion.

National Coverage Determination History
The following is a short history leading up to the current NCD:

  1. Effective July 1, 2001, CMS approved the use of OPT with verteporfin in neovascular AMD patients having predominately classic subfoveal CNV lesions.
  2. On October 17, 2001, CMS announced its “intent to cover” OPT with verteporfin for AMD patients with occult subfoveal CNV lesions; however, this decision was never implemented.
  3. On March 28, 2002, CMS reviewed the October 17, 2001 intent-to-cover policy, and determined that the (then) current noncoverage policy for OPT for verteporfin for AMD patients with occult subfoveal CNV should remain in effect.
  4. Effective August 20, 2002, CMS issued a noncovered instruction for OPT with verteporfin for AMD patients with occult subfoveal CNV lesions.
  5. Now CMS, after through review and reconsideration of the August 2002 decision, has determined that there is enough evidence to conclude that OPT with verteporfin is also reasonable and necessary in these additional clinical instances. Therefore, this NCD, effective April 1, 2004, provides for covering the use of OPT with verteporfin in patients with subfoveal occult lesions with no classic CNV, and subfoveal minimally classic CNV lesions as described above.

Additional Information
Additional background information is available in Pub. 100-03, Chapters 80.2 and 80.3, which are included in the actual instruction issued to Medicare carriers and fiscal intermediaries on this NCD. This instruction can be found in CR 3191 at: http://www.cms.hhs.gov/manuals/transmittals/comm_date_dsc.asp

Once at that site, scroll down to find 3191 in the CR NUM column on the right and then click on the file for that number.

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Provider Enrollment Fraud Alert

This is to inform you that Medicare is aware of an organized group who is representing themselves as either a Medicare Fraud Investigator; or a Medicare employee from the enrollment, claims or audit units. These callers tell the physician, or office personnel, that the Medicare computer system has had a malfunction and they need to update lost information. The callers may also say they need to update the physician’s provider record. They then request via telephone or fax the following information:

Once the entity receives this information, they falsify enrollment data using the physician’s name and request a change to their practice locations, telephone numbers, and pay-to-addresses.

The Centers for Medicare & Medicaid Services (CMS) has not suffered any computer system malfunction and are not calling providers requesting the above information be provided. If you should receive such a call, please try to verify the telephone number of the caller, and immediately notify your Medicare carrier that you suspect fraud.

CMS is committed to protecting all Medicare providers/suppliers and to ensuring that only those qualified make changes to enrollment data. We believe that with your help we can target those unscrupulous individuals that are looking to take advantage of you and the Medicare trust fund.