Clinical Documentation Improvement: Are EMR Shortcuts Wreaking Havoc on Your Practice’s Documentation?

As providers look for ways to document more efficiently, they are increasingly turning to technology-based shortcuts. Unfortunately, there are some pitfalls associated with relying on some electronic medical record (EMR) conveniences.  In this article, we will discuss a few EMR shortcuts that have the potential to wreak havoc on your documentation.

Drop down ICD-10-CM Codes

Many EMRs offer the option to select diagnoses with correlating ICD-10-CM codes from a drop-down menu in the assessment and plan portion of the note which can be problematic for multiple reasons. We have encountered audits where providers consistently coded the wrong diagnosis. After taking a closer look at the EMR, we found that the description of the diagnosis documented in the assessment and plan did not match the ICD-10-CM code listed. This can make it confusing to decipher what the patient’s true diagnosis was. This could also cause a coding issue if the provider was relying on the EMR ICD-10-CM code to be accurate. If you factor in all providers in a group utilizing the same EMR and erroneous ICD-10-CM drop-down menu function, the problem gets exponentially worse.

Another drawback of relying on diagnosis drop down menus is that providers can get frustrated if they cannot find the correct code efficiently.  When this happens, they may select “the closest code”, which is often incorrect.   We recommend providers free text their diagnoses in the assessment and plan to ensure they are documenting as accurately and completely as possible.

Smart Phrases

Another handy tool providers like to utilize are smart phrases, which are macros that can be very powerful if used correctly; however, there can be a lot of documentation issues that stem from smart phrases when they are used in a not so “smart” way. For example, we see teaching physician attestations that read “I saw and examined the patient with the student/resident/NPP and agree with their findings” – we do not recommend ambiguous statements like this. A better way to utilize this teaching physician smart phrase would be for the provider to backtrack and insert the specific provider type they saw and examined the patient with, as most EMRs will allow the provider to use and edit a smart phrase.  We also see providers using outdated verbiage in their smart phrases. In 2021, the office and outpatient evaluation and management (E/M) guidelines revised the documentation requirements for time. It is no longer necessary to state that greater than 50% of the time was spent on counseling and coordination of care. However, that phrase is still being used in 2023 because providers have not reviewed and updated their smart phrases (since at least 2021) to remove that language. We recommend providers review smart phrases on a yearly basis to ensure they are compliant with current documentation guidelines.

Copying and Pasting the Previous Visit Note

Many EMRs allow providers to copy forward the last visit or progress note and then edit it to use for the current visit. While this is a huge time saver, it can lead to opportunities for documentation errors. Providers should use this EMR function very judiciously. We have audited “Franken notes” where the past and the present collide in a confusing mess.  For example, the history of present illness (HPI) is brought over from the past encounter stating the patient’s hypertension is out of control. Upon reviewing the assessment and plan, which was updated at the current visit, it states the hypertension is stable on current medications. It is very important that providers thoroughly review and edit copied notes so they paint the most accurate picture of the patient’s conditions throughout the entire note.

In summary, there are many powerful shortcuts providers can use to improve their efficiency when documenting in the EMR, but as the saying goes, with great power comes great responsibility. We recommend providers have their shortcuts and documentation reviewed annually to ensure they are documenting as accurately as possible.

For more information, please contact Angela Wood at AWood@AskPHC.com or 704-978-9052.

Sepsis Coding: How to Properly Code Sepsis

Introduction:

Sepsis is a potentially life-threatening complication of an infection and occurs when chemicals released in the bloodstream to fight the infection trigger inflammatory responses throughout the body. This inflammation can trigger a cascade of changes that damage multiple organ systems, causing them to fail. While the coding for sepsis can be particularly challenging, fortunately, we have the ICD-10-CM Official Guidelines for Coding and Reporting to use as a guide.

Chapter 1 of the ICD-10-CM guidelines provides incredibly detailed instruction on coding for sepsis, severe sepsis, and septic shock infections. The guidelines instruct to first assign the appropriate code for the underlying systemic infection. If the type of infection is not specified, then report code A41.9, Sepsis, unspecified organism. R65.20 (severe sepsis without septic shock) or R65.21 (severe sepsis with septic shock) should only be assigned if severe sepsis is specified when an associated acute organ dysfunction is documented.

 

Example: Sepsis Coding

An 85-year-old male is admitted with sepsis.

    1. A41.9 – Sepsis, unspecified organism

Note, only code A41.9, Sepsis, unspecified organism since only sepsis is documented and the type of infection is not specified; but what would you code if the provider documents “85-year-old male is admitted with urosepsis?”

You would not be able to assign a diagnosis code. Instead, you need to query the provider for clarification. The guidelines state, “The term urosepsis is a nonspecific term. It is not to be considered synonymous with sepsis. It has no default code in the Alphabetic Index. Should a provider use this term, he/she must be queried for clarification.”

 

Severe Sepsis

To accurately assign codes for severe sepsis, refer to sections 1.C.1.d.1.b and 1.C.1.d.3 of the ICD-10-CM Chapter 1 Guidelines which states a minimum of two codes is needed to accurately code for severe sepsis. The first code is for the underlying systemic infection. Once again, if the underlying infection is not specified, report A41.9, Sepsis, unspecified. Next, report a code from subcategory R65.20, severe sepsis without septic shock or R65.21 severe sepsis with septic shock. Then, report the additional code(s) for the associated acute organ dysfunction. Remember, when reporting R65.20 or R65.21 an associated organ dysfunction must be documented.

 

Example: Severe Sepsis Coding

A 41-year-old female is admitted with sepsis that has caused hypoxic, acute respiratory failure.

    1. A41.9 – Sepsis, unspecified organism
    2. R65.20 – Severe sepsis without septic shock
    3. J96.01 – Acute respiratory failure with hypoxia

First, code the underlying systemic infection (A41.9, Sepsis, unspecified organism).  Second, code the severe sepsis as the patient has an acute organ failure associated with the sepsis (R65.20 – severe sepsis without septic shock). Third, code the acute organ dysfunction (J96.01- hypoxic, acute respiratory failure).

 

Septic Shock

The ICD-10-CM Chapter 1 Guidelines state that septic shock refers to circulatory failure associated with severe sepsis. The guidelines instruct to first code the systemic infection, followed by R65.21, severe sepsis with septic shock. However, if the septic shock is postprocedural, code T81.12, postprocedural septic shock.  Note the instructions in the Tabular state septic shock cannot be assigned as a principal diagnosis.

 

Sepsis or Severe Sepsis with a Localized Infection

If the reason for admission is sepsis or severe sepsis with a localized infection, such as pneumonia, the Guidelines instruct to code the underlying infection as the first diagnosis if the type of infection is not specified assign code A41.9, Sepsis, unspecified. The code for the localized infection should be coded second.  If the patient has severe sepsis with a localized infection, report a code from subcategory R65.20 as a secondary diagnosis.  However, if the patient is admitted with a localized infection but does not develop sepsis until after the admission, code the localized infection followed by the sepsis/severe sepsis codes.

 

Example 1: Severe sepsis with localized infection coding

A 41-year-old female is admitted with sepsis with pneumonia that has caused hypoxic, acute respiratory failure.

    1. A41.9 – Sepsis, unspecified organism
    2. R65.20 – Severe sepsis without septic shock
    3. J96.01 – Acute respiratory failure with hypoxia
    4. J18.9 – Pneumonia, unspecified organism

Assign the underlying systemic infection as the primary diagnosis (A41.9, Sepsis, unspecified organism). Since the patient has an acute organ failure associated with the sepsis, assign R65.20, severe sepsis without septic shock as the second diagnosis. Note, the presence of shock was not documented. Code the acute organ dysfunction (J96.01 – hypoxic, acute respiratory failure) as the third diagnosis with the localized infection (J18.9 – pneumonia) coded as the fourth diagnosis.

 

Example 2: Severe sepsis with localized infection coding

A 41-year-old female is admitted with urosepsis caused by an Escherichia coli UTI that has caused hypoxic, acute respiratory failure. Diagnosis codes for this example:

    1. A41.51 – Sepsis due to Escherichia coli [E. coli]
    2. R65.20 – Severe sepsis without septic shock
    3. J96.01 – Acute respiratory failure with hypoxia
    4. N39.0 – Urinary tract infection, site not specified

First, assign code A41.51, sepsis due to Escherichia coli [E. coli] for the underlying systemic infection. Since the patient has an acute organ failure associated with the sepsis, assign R65.20, severe sepsis without septic shock as the second diagnosis. Note, the presence of shock was not documented. Then, assign J96.01, hypoxic, acute respiratory failure for the organ failure as the third diagnosis and code N39.0, urinary tract infection, site not specified for the local infection as the fourth diagnosis.

You may be wondering why we would not code B96.20, Unspecified Escherichia coli [E. coli] since there is a “use additional code” note under code N39.0 in the Tabular.  See the question and answer below from Coding Clinic for ICD-10-CM/PCS, First Quarter 2018, page 16:

Question:

A patient with mental status change is admitted and after diagnostic studies, the provider diagnosed sepsis due to Escherichia coli (E. coli) urinary tract infection (UTI). What are the appropriate code assignments for this diagnostic statement? There is confusion among coding professionals regarding the application of the instructional note stating: “Use additional code (B95-B97), to identify infectious agent” at code N39.0, Urinary tract infection, site not specified, versus assigning a code that identifies both sepsis and the infectious agent.

Answer:

Assign code A41.51, Sepsis due to Escherichia coli [E. coli], and code N39.0, Urinary tract infection, site not specified, for the UTI.

Do not assign code B96.20, Unspecified Escherichia coli [E. coli] as the cause of diseases classified elsewhere, as an additional diagnosis. Code A41.51 clearly identifies the causal bacterium for both the sepsis and the UTI. Assigning B96.20 as an additional code is redundant.”

 

Sepsis Due to a Postprocedural Infection

Several questions must be answered before coding sepsis due to a post-procedural infection.

  1. Was the procedure obstetrical?
  2. Is the site of the infection documented?
  3. Is the infectious agent documented?
  4. Is severe sepsis or acute organ dysfunction documented?

If it is known that the procedure was non-obstetrical and the site of the infection is documented, assign a code from T81.40-T81.43 as our primary code. Then, code T81.44, Sepsis following a procedure, as the second code. For the third diagnosis, code the underlying infection, or A41.9, if the type of infection is not documented.  If the documentation stated severe sepsis or if there was a sepsis-associated acute organ dysfunction, code R65.20, along with the code for the organ dysfunction.

If the procedure was obstetrical and the site of the infection is documented, assign a code from O86.00-O86.03 as the primary code. Then, code O86.04, Sepsis following an obstetric procedure as the second code. For the third diagnosis, code the underlying infection or A41.9 if the type of infection is not documented. If the documentation stated severe sepsis or if there was a sepsis associated acute organ dysfunction, code R65.20 along with the code for the organ dysfunction.

For infections following infusion, transfusion, therapeutic injection, or immunization, assign a code from subcategory T80.2, Infections following infusion, transfusion, and therapeutic injection, or code T88.0-, Infection following immunization. Then assign a code for the specific infection. If severe sepsis is documented, assign the appropriate code from subcategory R65.2 along with the additional codes(s) for any acute organ dysfunction.

 

Example: Sepsis due to a postprocedural infection coding

A 52-year-old male is admitted with sepsis due to a post-operative infection of the small intestine, following an appendectomy.

    1. T81.43XA – Infection following a procedure, organ, and space surgical site, initial encounter
    2. T81.44XA – Sepsis following a procedure, initial encounter
    3. A41.9 – Sepsis, unspecified organism

Assign T81.43XA, infection following a procedure, organ and space surgical site, initial encounter as the first diagnosis, this is the site of the infection. Then, assign code T81.44XA, Sepsis following a procedure, initial encounter as our second diagnosis. Finally, code A41.9, Sepsis unspecified organism as the third diagnosis.

 

Postprocedural Infection and Postprocedural Septic Shock

If a post-procedural infection results in septic shock, the ICD-10-CM Chapter 1 Guidelines instructs to first code the sepsis due to postprocedural infection (see codes above), followed by code T81.12-, Postprocedural septic shock.  The guidelines state not to assign code R65.21, Severe sepsis with septic shock. Additional code(s) should be assigned for any acute organ dysfunction.

 

Example: Postprocedural infection and postprocedural septic shock coding

A 52-year-old male is admitted with septic shock due to a post-operative infection of the small intestine following an appendectomy that has caused acute liver failure.

    1. T81.43XA – Infection following a procedure, organ, and space surgical site, initial encounter
    2. T81.44XA – Sepsis following a procedure, initial encounter
    3. A41.9 – Sepsis, unspecified organism
    4. T81.12XA – Postprocedural septic shock, initial encounter
    5. K72.00 – Acute and subacute hepatic failure without coma

Frist, assign the site of the infection as the first diagnosis T81.43XA – Infection following a procedure, organ and space surgical site, initial encounter. Next, assign T41.44XA for sepsis following a procedure (Sepsis following a procedure, initial encounter). Code A41.9, Sepsis, unspecified organism as the third diagnosis, per the instructions under diagnosis T81.44- that state to use an additional code to identify the sepsis. The fourth diagnosis code is T81.12XA, Postprocedural septic shock, initial encounter. The fifth and final code is K72.00, Acute and subacute hepatic failure without coma, for the acute organ dysfunction.

 

Sepsis and Severe Sepsis Associated with a Noninfectious Process (condition)

Per ICD-10-CM Chapter 1 Guideline I.C.1.d.6., “In some cases, a noninfectious process (condition) such as trauma, may lead to an infection which can result in sepsis or severe sepsis. If sepsis or severe sepsis is documented as associated with a noninfectious condition, such as a burn or serious injury, and this condition meets the definition for principal diagnosis, the code for the noninfectious condition should be sequenced first, followed by the code for the resulting infection. If severe sepsis is present, a code from subcategory R65.2 should also be assigned with any associated organ dysfunction(s) codes. It is not necessary to assign a code from subcategory R65.1, Systemic inflammatory response syndrome (SIRS) of non-infectious origin, for these cases.

If the infection meets the definition of principal diagnosis, it should be sequenced before the non-infectious condition. When both the associated non-infectious condition and the infection meet the definition of principal diagnosis, either may be assigned as principal diagnosis.

Only one code from category R65, Symptoms and signs specifically associated with systemic inflammation and infection, should be assigned. Therefore, when a non-infectious condition leads to an infection resulting in severe sepsis, assign the appropriate code from subcategory R65.2, Severe sepsis. Do not additionally assign a code from subcategory R65.1, Systemic inflammatory response syndrome (SIRS) of non-infectious origin.”

 

Example: Sepsis and severe sepsis associated with a noninfectious process (condition) coding

A 68-year-old female is admitted with a traumatic subdural hematoma and developed sepsis with acute kidney failure 3 days after the admission.

    1. S06.5XAA – Traumatic subdural hemorrhage with loss of consciousness status unknown, initial encounter
    2. A41.9 – Sepsis, unspecified organism
    3. R65.20 – Severe sepsis without septic shock
    4. N17.9 – Acute kidney failure, unspecified

We would assign S06.5XAA, Traumatic subdural hemorrhage with loss of consciousness status unknown, initial encounter as the primary diagnosis, because the patient was admitted for a noninfectious condition. We would code A41.9 as the second diagnosis because the sepsis did not occur until three days after the admission. We would code the R65.20 as the third diagnosis because there was an acute organ dysfunction associated with the sepsis Finally, we would code N17.9, Acute kidney failure, unspecified as the fourth diagnosis.

 

Additional Sepsis Guidelines from Chapter 15

Not all sepsis related guidelines are found in chapter 1. Chapter 15 also discusses sepsis coding.

 

Sepsis and Septic Shock Complicating Abortion, Pregnancy, Childbirth, and the Puerperium

The sepsis coding guideline in Chapter 15(I.C.15.j) is like those in chapter 1.  We would assign the code for sepsis complicating abortion, pregnancy, childbirth, and the puerperium as our primary code.  Then we would code the specific type of infection or A41.9 if the type is not documented as our second diagnosis.  After that we would code R65.2, Severe sepsis if severe sepsis (or an acute organ dysfunction associated with sepsis) is documented. Then we would code the associated acute organ dysfunction.

 

Example: Sepsis and septic shock complicating abortion, pregnancy, childbirth, and the puerperium coding

A 24-year-old female presents with sepsis due to an intraabdominal abscess that developed 3 days after a scheduled C-section. Diagnosis codes for this example:

    1. O86.03 – Infection of obstetric surgical wound, organ, and space site
    2. O86.04 – Sepsis following an obstetrical procedure
    3. A41.9 – Sepsis, unspecified organism

Assign the site of the infection as the first diagnosis (Infection of obstetric surgical wound, organ, and space site – O86.03). Then, assign the additional code for sepsis following a procedure (Sepsis following an obstetrical procedure – O86.04). Per the instructions under diagnosis O86.04, use an additional code to identify the sepsis (Sepsis, unspecified organism – A41.9).

 

Puerperal Sepsis

Per ICD-10-CM Chapter 15 guideline I.C.15.k. Code O85, Puerperal sepsis, should be assigned with a secondary code to identify the causal organism (e.g., for a bacterial infection, assign a code from category B95-B96, Bacterial infections in conditions classified elsewhere). A code from category A40, Streptococcal sepsis, or A41, Other sepsis, should not be used for puerperal sepsis. If applicable, use additional codes to identify severe sepsis (R65.2-) and any associated acute organ dysfunction.

Code O85 should not be assigned for sepsis following an obstetrical procedure (See Section I.C.1.d.5.b., Sepsis due to a postprocedural infection).

 

Example: Puerperal sepsis coding

A 31-year-old female was admitted with postpartum sepsis (7 days postpartum) with associated respiratory failure.

    1. O85 – Puerperal sepsis
    2. R65.20 – Severe sepsis without septic shock
    3. J96.00 – Acute respiratory failure, unspecified whether with hypoxia or hypercapnia

Following the Chapter 15 ICD-10-CM Guideline above for puerperal sepsis, assign O85Puerperal sepsis as the first diagnosis. Note, there was no causal organism identified but since the patient has acute organ dysfunction, assign R65.20, Severe sepsis as the second diagnosis. Code J96.00, Acute respiratory failure, unspecified whether hypoxia or hypercapnia as the third diagnosis to identify the acute organ dysfunction.

The key to successfully coding sepsis lies in keeping a copy of the ICD-10-CM Guidelines on hand.  You can find these guidelines in the front of your ICD-10-CM codebook. To download a PDF version of the 2023 Guidelines, click here.

 

Additional AHA Coding Clinic Clarification

 

Viral Sepsis (Coding Clinic, Third Quarter 2016: Page 8)

Question:

How would viral sepsis be coded in ICD-10-CM? The type of viral infection is unspecified. In ICD-9-CM, “Viral” was a sub term under septicemia, but it is not present as a sub term under sepsis in ICD-10-CM. By selecting “sepsis with specified organism NEC” code A41.89 is referenced. However, in ICD-10-CM, categories A30-A49 encompass “other bacterial diseases.” Would it be appropriate to assign a bacterial code for a viral condition?

Answer:

Assign codes A41.89, Other specified sepsis, and B97.89, Other viral agents as the cause of diseases classified elsewhere. Although codes in categories A30-A49 classify bacterial illnesses, there is no specific code for viral sepsis. “Sepsis, specified organism NEC” is indexed to code A41.89. Code A41.89 is the best available option to capture the concept of sepsis, since ICD-10-CM does not have a specific code for viral sepsis, along with code B97.89 to provide an additional level of specificity when the virus is not specified.

 

Sepsis due to Aspiration Pneumonia (Coding Clinic for ICD-10-CM/PCS, Second Quarter 2020: Page 28)

Question:

When the provider documents “sepsis due to aspiration pneumonia,” is a code for the sepsis, or the aspiration pneumonia assigned as the principal diagnosis?

Answer:

Assign code A41.9, Sepsis, unspecified organism, as the principal diagnosis. Codes J18.9, Pneumonia, unspecified organism, and J69.0, Pneumonitis due to inhalation of food and vomit, should be assigned as additional diagnoses. Sepsis indicates infection and the body’s response to it. Aspiration pneumonia may be just from the direct effect of inhaled material, such as a chemical effect, or it may involve infection; however, for sepsis to result, it would need to involve an infectious pneumonia. Therefore, codes J18.9 and J69.0 are both needed to show the presence of a localized infection (pneumonia and unspecified organism) as well as pneumonia due to aspiration. When sepsis and aspiration pneumonia are related (i.e., sepsis due to aspiration pneumonia or sepsis related to aspiration pneumonia) and present on admission, sepsis should be sequenced as the principal diagnosis.

 

Tips and Reminders:

  • Always read the full ICD-10-CM chapter-specific coding guidelines for sepsis in chapters 1 and 15 (if applicable).
  • Always read any coding instructions under the diagnosis codes for “code-first” and “use additional” code notes.
  • Review any pertinent AHA Coding Clinic(s) that pertain to sepsis.

 

 

References:

ICD-10-CM Chapters 1 and 15 2023 ICD-10-CM Documentation Guidelines

Coding Clinic for ICD-10-CM/PCS, First Quarter 2018: Page 16

Coding Clinic, Third Quarter 2016: Page 8

Medicare’s Change to the Split/Shared Billing Rules: Implications for Physician Compensation Planning

1.  What is a split/shared service?

This term refers to evaluation and management services that are performed partly by a physician and partly by a non-physician practitioner (NPP) who is in the same practice group as the physician. NPPs performing split/shared services include nurse practitioners, physician assistants, certified nurse specialists and certified nurse midwives. Importantly, the term “split/shared service” refers to evaluation and management services that are performed in a hospital or facility setting, not a physician office setting.

2. What is the split/shared services rule change that everyone is talking about?

The rule change applies to when and under what circumstances a party may bill Medicare for a split/shared service provided to a Medicare beneficiary.

As background, the entirety of a split/shared service can be billed under either the physician’s provider number or the NPP’s provider number, but not both. If the service is billed under the NPP’s provider number as an NPP service, the level of payment for the service will be lower (paid at 85% of the allowable fee schedule). Historically, and even after the rule change, the provider who performs the “substantive portion” of the service is credited with the entirety of the service for Medicare billing purposes. For calendar year 2023, with a few exceptions, the “substantive portion” of a service is comprised of the entirety of any of the following:

  • Clinical history; OR
  • Physical examination; OR
  • Medical decision-making; OR
  • Spending more than half the total time of the service.

If the new rule goes into effect in January 2024 as planned, the “substantive portion” of a split/shared service will be defined exclusively by spending more than half the total time of the service. Under this rule change, providers performing split/shared services will have to track time, and the provider that spends the most time is the provider that is allowed to bill Medicare for the entirety of the service.

3. What split/shared activities count toward total time under the new rule?

Activities that can be counted toward the evaluation and management services under Medicare’s billing guidelines include the following services when performed on the same calendar day:

  • Preparing to see the patient
  • Obtaining and/or reviewing a medical history of the patient
  • Performing a medically necessary examination of the patient
  • Counseling or educating the patient or a family member or caregiver of the patient
  • Ordering medications, tests, or procedures, including entering the order into the patient’s record
  • Consulting with other providers, as long as that consultation is not being billed separately as another service
  • Documenting clinical information in the patient’s record
  • Interpreting test results and communicating them to the patient, if not part of a separately billed service
  • Coordinating care, if this is not something that is separately billed and paid as part of another service

There is no requirement that both providers performing a split/shared service see the patient face to face. However, the provider performing the substantive portion of the service, and therefore serving as the billing provider for the service, must authenticate the note via an approved signature.

Any consultations, care coordination, test interpretations and procedures that are part of a separately paid service do not count toward the evaluation and management service that constitutes the split/shared service. Also, time spent by physician staff other than the NPP does not count toward either provider’s time (only the personally performed time counts). Documentation should generally indicate that total time excludes time spent on other separately reportable services.

4. Why/how does the rule change create questions for future provider compensation?

Many physicians are compensated on the basis of work relative value units (wRVUs), which are the measures of productivity under Medicare billing rules. Providers who have historically been credited with significant wRVUs for split/shared services on the basis of something other than providing the majority of the time may see their recorded productivity measures change as a result of the rule change, and their compensation could change as a result. In some cases, physicians who are not credited the bulk of the time in split/shared services will see reductions in wRVUs credited to them, and that will mean a reduction in their compensation if they have a productivity-based compensation plan, and that compensation plan does not change. For NPPs who are paid on the basis of wRVUs, there may be an increase in compensation if more split/shared services are credited to them than under the old rule.

With respect to both physicians and NPPs, the questions are threefold:

a) Will compensation amounts change if compensation plans are not adjusted to account for the rule change?

b) Can adjustments to compensation plans normalize for any compensation changes that may result from the new rule?

c) If normalizing changes in compensation plans are possible, should those normalizing changes be made? Or is it more appropriate that compensation amounts change going forward?

5. What can or should organizations be considering in regard to the split/shared rule change and future provider compensation plans?

Medicare billing rule compliance and compensation compliance are closely related in a number of ways, but they are, in fact, separate concerns that can, and sometimes should be, addressed separately. Generally speaking, provider compensation should be of fair market value and commercially reasonable for the services that are personally performed by the provider. To the extent that employers can reasonably measure the extent of services personally performed in the context of a split/shared service, each employed provider can and reasonably should be paid for the services that they personally performed, even if the billed service in its entirety must be credited to only one or the other provider for purposes of Medicare billing.

As noted above, there are established guidelines for activities that can be credited to a visit for purposes of billing, and these may be helpful for allocating time and compensation in the context of split/shared services. Identifying who performed each of the allowed elements of a service and applying time studies or logs to establish relative time associated with each element may help parties to reasonably assign time, work, and compensation value for a split/shared service. In some cases, compensation value might be appropriately assigned for work that is not allowed to be counted for billing purposes, given that compensation compliance and billing compliance are separate.

The rule change regarding split/shared services may create an additional impetus and opportunity to test changes to compensation plans. Some parties may be developing methods to allocate wRVUs to reflect each provider’s actual portion of total work, as well as adjusting conversion factors (the dollar values assigned to each wRVU or other productivity unit) to account for changes in Medicare wRVU allocations that may otherwise result in disparate or unreasonable compensation from year to year. Given persisting shortages of providers in the market, and difficulties that many hospitals and health systems have had recruiting and retaining providers, parties may need to be very thoughtful at this time about how they are going to pay employed and contracted providers going forward.

Summary Points:
a) Starting in calendar year 2024, the new split/shared service billing rule may affect the crediting of wRVUs for providers who have historically provided split/shared services.

b) Changes in crediting of wRVUs could have significant impact on the measures of productivity that have historically been used to determine productivity-based compensation for providers, and therefore, could affect provider compensation amounts if compensation plans are not modified.

c) Because of 1 and 2, and in the context of the many other regulatory changes that are occurring and the general shift to value-based payment, the change in the rule regarding Medicare billing of split/shared services may be a reason and impetus to think carefully about changes to provider compensation plans in certain specialties, and specifically about how personally performed services can be appropriately measured, credited and paid in those specialties going forward.

Non-Compete Contracting in Healthcare: Potential Impact on Physician Contracting and Alignment

Introduction

A covenant not to compete (a.k.a. a non-compete agreement) is a contract or clause in a contract specifying that an employee or contractor (often through a professional services agreement) must not enter into competition with their employer or client.  This agreement is for a specified period of time after the employment or service contract is over. The covenant not to compete may be in the context of other restrictive covenants, such as confidentiality covenants that prohibit the employee or contractor from revealing proprietary information or secrets to any other parties during or after their employment or contract.

Covenants not to compete, as well as certain other forms of restrictive covenants, are receiving more criticism and we are observing limited enforceability in a growing number of states.  Critics have argued that non-compete agreements in healthcare may reduce market efficiency, contribute to labor shortages in areas for which it is difficult to recruit, and ultimately hurt patients and consumers.  During the last several years, in which the healthcare industry has experienced intense and troublesome staffing shortages, several states have narrowed or even banned enforcement of non-compete agreements with physicians and other types of healthcare providers. In some cases, the bans allow for civil and/or criminal penalties against a party requesting or seeking to enforce a non-compete agreement.  Due to changes or risk with application, it may be time to consider alternative structures to better contract provider alignment, continuity, and tenure.

 

Background

As early as the 19th century, non-compete agreements were used to protect valuable and confidential information, particularly in trade.  By the 1950s, non-compete agreements were regularly used to prevent employees from taking sensitive information and training practices to competitors.

In the 1980s and 1990s, hospitals and their affiliated physician groups began requiring physicians to sign non-compete agreements as a condition for employment and service contracts to protect financial interests and investments related to the costs of recruiting, relocating, training, and marketing of physicians.  They remain common features of employment and professional services agreements.

However, despite their current prevalence, non-compete agreements are of limited enforceability in a growing number of states. They have historically been criticized for restricting employee freedom of movement in ways that are anti-competitive.  Critics have argued that non-compete agreements in healthcare reduce market efficiency, contribute to labor shortages in areas for which it is difficult to recruit, and ultimately hurt patients and consumers.  During the last several years, in which the healthcare industry has experienced intense and troublesome professional staffing shortages, several states have narrowed or even banned the creation and enforcement of non-compete agreements with physicians. In some cases, the bans allow for civil and/or criminal penalties against a party requesting or seeking to enforce a non-compete agreement.

The scope and enforcement of non-compete agreements has historically been governed by state law – including both state statutes and case law – and therefore vary by state.  Although the specifics vary, the general principles from state to state are similar. To be enforceable, non-compete agreements generally must be of reasonable geography, scope, and duration; must protect a legitimate business interest, such as trade secrets; and must be supported by proper consideration. In states that permit non-compete agreements, statutes and common law vary with respect to what constitutes reasonable geography, scope duration, legitimate business interest, and/or “consideration.”

There are various reasons to proceed carefully with non-compete agreements. Some of the components that parties must carefully consider in a non-compete agreement include the following:

  • Duration: Non-compete agreements cover specific time frames, such as six months or one year. Longer-term agreements are prohibitively restrictive under the laws of certain states.
  • Geography: The geographic scope may be important to both the enforceability and validity of the non-compete covenant in the relevant state or states.
  • Scope of Services: Non-compete agreements must specify the type of work or services that a current or former employee cannot provide. Depending on the jurisdiction, they may need to specify information, techniques, procedures, and practices that are unique to the business or otherwise proprietary.
  • Business Interest Protected by the Non-Compete Agreement: In many cases, it is important to document at the outset the interests that make the non-compete agreement necessary.
  • Competitors: The competition must be defined in the agreement. The company does not need to list them all, but it should give a general idea of the industry and types of businesses the employee agrees to not work.
  • Consideration:  Generally, enforceability of a non-compete agreement depends on adequate consideration and the consideration is identified under the terms of the non-compete agreement.
  • Damages: Enforcing parties define the damages they are entitled to if an employee breaches the agreement.

 

Comments on Valuation

Traditionally, the value of a non-compete agreement is represented by the present value of the cash flows that would be lost if the departing person were to compete, adjusted for the effective probability that the person will compete, and compete successfully.

The most common approach is to utilize a method of the Income Approach, termed the Lost Income Method (more commonly referred to as the “with and without” method). The Lost Income Method utilizes the same basic methodology as the Discounted Cash Flow Method (i.e., projecting distributable cash flow and discounting future cash flow to estimate present value); however, the Lost Income Method utilizes distributable cash flow assumptions that reflect the economic reality of competition by the person.

In contexts that implicates healthcare laws and regulations – the Stark Law, Antikickback Statute and parallel state laws, for example – valuation approach and methodology may need to be carefully considered to ensure they do not inappropriately take into consideration cash flows or market data reflecting physician referrals (we recommend reviewing the Bradford Regional Medical Center Case – 2010). This need for caution may complicate discussions and negotiations about compensation, contracting and buy-outs, and may significantly diminish or even defeat the risk mitigation purposes of non-compete agreements.

 

Changes on the Horizon

On January 5, 2023, The Federal Trade Commission (FTC) proposed a national ban on non-compete agreements. The Federal rule banning non-compete agreements, if finalized, will apply to employees and independent contractors, paid and unpaid. It will require employers “to rescind existing non-compete agreements and actively inform workers that they are no longer in effect.”

In its commentary on the issue, the FTC has argued that non-compete agreements “constitute an unfair method of competition and therefore violate Section 5 of the Federal Trade Commission Act.”  Additionally, FTC Chair Lina M. Khan has noted that “non-compete [agreements] block workers from freely switching jobs, depriving them of higher wages and better working conditions, and depriving businesses of a talent pool that they need to build and expand. By ending this practice, the FTC’s proposed rule would promote greater dynamism, innovation, and healthy competition.”

The FTC’s proposed rule would prohibit employers from (1) entering new non-compete agreements with workers, and (2) maintaining most extant non-compete agreements with current staff. The proposed rule would generally not apply to other types of employment restrictions, like non-disclosure agreements. However, other types of employment restrictions could be subject to the rule if they are so broad in scope that they function as non-compete agreements.

Non-compete agreements remain relatively common in the healthcare sector for now, specifically in the provider space. It is common to see large institutions place affiliated/contracted physicians under non-compete agreements that restrict provision of clinical services within a certain geography for a certain period following the end of the employment or contractual relationship.

In a vacuum, one could promote that because a non-compete agreement has value and it is woven into a compensation offer, total physician compensation will decrease if non-compete agreements are eliminated.  However, we suggest that other market dynamics, including but not limited to, supply and demand, inflation, technology, efficiencies, changes in reimbursement models, other offers from direct or indirect competitors for access to provider expertise, could all influence whether compensation increases or decreases following the elimination of non-compete agreements. Data from states that currently ban physician non-compete agreements don’t tell a consistent story.  Eliminating non-compete agreements in a specific market affects competition in that market and may lead to an increase in compensation.  In this context, compensation offers could increase significantly in the event of a ban on non-compete agreements (these offers would still need to be supported by fair market value).

 

Closing Comments

From a strategic perspective, contemplating other options to create better alignment may be a worthwhile endeavor.  Several options that come to mind include creating deferred compensation pools or retention bonus allocations, enhanced non-solicitation arrangements, and alternative benefit arrangements (quality of life services) that accrue based on tenure with the employer or contracting organization.  Compensation plans can significantly impact alignment with the provider community by creating  opportunities to better align culture, satisfaction, performance, and retention of physicians through updates to compensation plans.

Whether or not there is a new Federal rule banning non-compete agreements, physician non-compete agreements may be increasingly disfavored for reasons related to state law and local market dynamics.   Regardless of the Federal rulemaking process, this may be a good time to evaluate alternative options for aligning physicians and their employers through compensation plan design.

About the Authors – David White, Carlo Duaban, and Chris Louis are professionals within Pinnacle Healthcare Consulting, a nationally recognized healthcare advisory firm.  David is based in the Denver office, while Carlo and Chris are based in the St. Louis office.

Tele-Nephrology – The Future is Now

In recent years, the healthcare industry has seen a surge in the use of telehealth services, and nephrology is no exception. Remote nephrology, or tele-nephrology, involves the use of telecommunication technologies to provide nephrology services to patients who are not physically present in the same location as their healthcare provider (e-visits).

This emergence has similarities to that of hospitalists 25 years ago. Hospitalists were specialists who provided care for patients in the hospital setting, allowing primary care physicians to focus on outpatient care.  At first, primary care was skeptical about coordinating care with the inpatient specialist but more access, coordination with the primary care physician, and responsiveness to inpatient testing and results resulted in creating a new gold standard of care.

Remote Nephrology is a growing trend and an increasingly popular approach to providing specialized care to patients who live in rural or underserved areas or supporting busy nephrology practices due to increasing patient demand and decreasing nephrologist supply.  Access to specialists for inpatient consults and acute program coordinate can elevate the services provided by hospitals and their hospitalists teams.

A significant number of patients with chronic kidney disease in the United States live more than an hour away from the nearest nephrology clinic. This can make it difficult for patients to receive regular care, which can lead to a decline in their health and an increased risk of hospitalization. Remote nephrology provides a solution to this problem by allowing patients to receive care from a specialist without having to travel long distances.

One of the main benefits of remote nephrology is improved access to specialized care (keeping care local).  Patients who live in rural or underserved areas may not have access to a nephrologist in their local community. By providing care remotely, hospitals can work with nephrologists trained in remote care to reach patients who would otherwise have limited access to specialized care. This can lead to improved patient outcomes, reduced hospitalizations, new revenue streams, and enhanced patient satisfaction.  Another significant benefit of remote nephrology is the potential for cost savings. Chronic kidney disease is a costly condition, and the annual cost of treatment for end-stage renal disease in the United States is estimated to be over $50 billion (Medicare was over $49B in 2018). By providing remote care, nephrologists can reduce the need for costly hospitalizations, costly transportation (approximately $3 Billion per Year – not to mention uncomfortable and a significant time investment for patients) and improve the efficiency of care delivery. 

Despite the many benefits of remote nephrology, there are also challenges associated with its adoption. Technology, high speed internet, secure communication and trained workforce are the most cited challenges associated with e-visits; however, advances over the last several years in equipment design and advances with technology vendors/partners has alleviated most, if not, all these concerns.  

Working with companies like TeleNeph, LLC out of Denver, Colorado can help minimize the stress, cost, and time to successfully operationalize a quality program. Ron Kubit, TeleNeph CEO states, “working with rural hospitals in the development of the tele-nephrology program has been a win / win for the hospital, the community, the patients, and their caregivers.  We have heard from our hospital clients that the transportation issues are very burdensome on the patient and their families”.

Remote nephrology is an emerging field that has the potential to revolutionize the management of kidney disease and improve access to specialized care for patients across the country. Like hospitalists 25 years ago, remote nephrologists are specialized providers who can improve patient outcomes and enhance the efficiency of care delivery. While there are challenges to its adoption, remote nephrology is an exciting development that has the potential to transform the way nephrology services are delivered.

CMS Changes ACO Application Cycle! Are You Ready?

The Centers for Medicare and Medicaid Services finalized changes to the 2023 ACO application cycle steps and timelines. After collectively submitting 50+ successful applications, Pinnacle is excited to continue interpreting the ever-changing ACO policy and execute future applications with the learned lessons and best practices gathered over the years. Here are some of the major highlights of the changes:

  • The Notice of Intent to Apply (NOIA) has been eliminated. Typically, in the past applicants had to submit an NOIA around the first week of June. CMS eliminated this step and moved up Phase 1 of the application. Let Pinnacle help you jump right into Phase 1 of the ACO application.
  • Phase 1 Submission starts in MAY. Thought you had a short window to recruit physicians before? Looks like it’s even shorter now. Phase 1 submission starts on May 18, 2023. In previous years, Pinnacle recommended starting recruitment in March or April, but suggests starting earlier. Time flies when you’re starting up ACOs.
  • ACOs will receive immediate beneficiary assignment estimates. This is one of the best enhancements to the process CMS could have made. In previous years, ACOs had to wait for Phase 1 RFI-1 as the first time they received a beneficiary assignment estimate. Then, you would get a second estimate during Phase 1 RFI-2, which was unfortunate, because if you did not meet the 5,000 beneficiary minimum, you could no longer add participants and your application would be denied.
  • Advance Investment Payments (AIP). ACOs that are interested in receiving AIPs will need to complete supplemental application materials as part of their initial application during Phase 2. If you are submitting a renewal application, you cannot apply for AIPs. ACOs will not receive their AIP eligibility final disposition until October 18.

 

Starting a new ACO? Want CMS to cover start up and infrastructure costs? Let Pinnacle help you with your AIP supplemental application materials.

 

Important dates to keep in mind:

  • May 18: ACO Application Begins – Make sure you start working on registering on the ACO Management System Portal to begin your application!
  • August 1: This is the final opportunity to add ACO participants and/or SNF affiliate TINs
  • September 5: This is the final opportunity to withdraw ACO participants and/or SNF affiliate TINs

 

Let us help you navigate the ACO application process and toolkit along with all of its changes. For more information, visit us online at www.AskPHC.com or contact:

 

Additional Resources:

https://www.cms.gov/medicare/medicare-fee-for-service-payment/sharedsavingsprogram/for-acos/application-types-and-timeline

 

For more information, please contact:

New ACO/VBC Changes Announced: What You Need to Know!

Our healthcare industry is undergoing a major transformation, with a focus on shifting from a fee-for-service model to a value-based model that prioritizes quality and outcomes over volume and cost. CMS Administrator Chiquita Brooks-LaSure, stated “Through the CMS accountable care initiatives and working with our partners, we have made significant progress in addressing our greatest healthcare challenges.” Administration is looking to further the engagement and participation in various payment models by planning to release three to four new payment models, including more key stakeholders in healthcare. These models will be centered around advancing primary care, engaging specialists in value-based care, and enabling states to assume the total cost of care. As healthcare organizations look to adopt new payment and delivery models, two key options have emerged: value-based care and statewide total-cost-of-care (TCOC) models.

 

Value-Based Care

Value-based care (VBC) is a payment and delivery model that ties reimbursement to the quality and outcomes of care, rather than the volume of services provided. In a value-based care model, healthcare providers work together to coordinate care, share information, and track outcomes, with the goal of improving patient health and reducing costs. VBC models can take many forms, including accountable care organizations (ACOs) and bundled payment arrangements. The key commonality is that they all incentivize providers to focus on quality and value, rather than volume.

Medicare Shared Savings Program (MSSP) ACOs: An Increase in Participation

An ACO in the MSSP program has a mission and agrees to meet a series of quality targets, which also correlate with financial targets, for the year to generate shared savings. If the ACO misses those targets and becomes more costly, it must repay Medicare the difference. Participation in the MSSP ACO program has increased this year, which is believed to be a direct result of the start of a new advanced model and the smoothing of the transition from upside-only to performance-based risk. In performance year (PY) 2023, there are 456 ACOs serving 10.9 million beneficiaries. There are also 132 REACH ACOs serving 2.1 million beneficiaries.

 

Statewide Total-Cost-of-Care (TCOC) Models

Statewide TCOC models are similar to value-based care models, but with a wider scope. In a TCOC model, a single entity, such as a government agency or payor, assumes responsibility for paying for all the healthcare services a patient receives, regardless of where or how they are delivered. The entity sets an overall budget for each patient based on their healthcare needs and expected utilization, and then works with providers to coordinate and manage the patient’s care. Similar to a VBC model, TCOC models incentivize providers to work together and coordinate care in order to achieve better health outcomes and reduce costs. This is done by paying providers based on the quality and efficiency of care they deliver, rather than the volume of services they provide.

Maryland’s Success with Statewide Total-Cost-of-Care Model

Maryland has been a leader in implementing statewide their TCOC model and has seen significant success in generating savings through this approach. In fact, Maryland’s success has caught the attention of the Center for Medicare and Medicaid Innovation (CMMI), which has been working to create additional value-based care models that can be implemented on a larger scale. Recently,  Deputy Administrator & Director of CMMI, Elizabeth Fowler announced their plans to release an additional three to four new payment models that will be announced at a later date in 2023.

 

Advance Investment Payments (AIP): Centers for Medicare & Medicaid Services (CMS) Will Provide Funding to New ACOs

The Advance Investment Payments (AIP) program from CMS is a program that provides upfront funding to rural Accountable Care Organizations (ACOs) to encourage their participation in the Medicare Shared Savings Program. The goal of the program is to help ensure rural communities have access to high-quality, coordinated care that improves health outcomes and reduces costs. Therefore, creating a win-win for both Medicare and rural communities. AIM invests up to $250,000 upfront and $36 per beneficiary to each participating ACO and $8 per beneficiary per month for 2 performance years. According to an NIH study of 41 ACOs that participated in the AIM program and were compared to non-ACO providers in the same geographic region using Medicare claims data, there was a reduction of $28.21 per beneficiary per month and a net reduction of $48.6 million in total Medicare spending, with decreased hospitalizations and use of institutional post-acute care as contributing factors.

 

Navigating the Options – Pinnacle Healthcare Consulting Can Help

As healthcare organizations look to adopt new payment and delivery models, it can be challenging and overwhelming to understand and navigate the available options. That’s where the VBC team at Pinnacle Healthcare Consulting (PHC) can help.

We are a leading expert in value-based care, with extensive experience helping healthcare organizations adopt and implement value-based models. Our deep understanding of the different models of value-based care helps organizations understand the pros and cons of each option and make informed decisions about which model is right for them. Our team offers a range of services to help organizations implement value-based care, including strategy development, implementation support, data analysis, and ongoing performance monitoring. With a focus on quality, efficiency, and patient outcomes, PHC is well-equipped to help any organization navigate the rapidly evolving landscape of value-based care and achieve success in this new era of healthcare.

 

References and Additional Resources:

 

For more information, please contact:

Diagnosis Coding: When to Assign a Diagnosis for E/M Services

With the implementation of the AMA (American Medical Association) E/M (Evaluation and Management) documentation guidelines for office and outpatient visits in 2021 (and the pending 2023 E/M guideline changes for emergency department, inpatient, outpatient, nursing facility, and home/residence visits), there has been confusion about when to assign / capture a diagnosis code for E/M services.

Per the ICD-10-CM Section IV. Diagnostic Coding and Reporting Guidelines for Outpatient Services Guideline J, we should code all documented conditions that coexist:

Code all documented conditions that coexist at the time of the encounter/visit and that require or affect patient care, treatment, or management. Do not code conditions that were previously treated and no longer exist. However, history codes (categories Z80-Z87) may be used as secondary codes if the historical condition or family history has an impact on current care or influences treatment.

Per the AMA E/M documentation guidelines for office and outpatient visits, the definition of a problem is:

A problem is a disease, condition, illness, injury, symptom, sign, finding, complaint, or other matter addressed at the encounter, with or without a diagnosis being established at the time of the encounter.

And the definition of a problem addressed is:

A problem is addressed or managed when it is evaluated or treated at the encounter by the physician or other qualified health care professional reporting the service. This includes consideration of further testing or treatment that may not be elected by virtue of risk/benefit analysis or patient/parent/guardian/ surrogate choice. Notation in the patient’s medical record that another professional is managing the problem without additional assessment or care coordination documented does not qualify as being addressed or managed by the physician or other qualified health care professional reporting the service. Referral without evaluation (by history, examination, or diagnostic study[ies]) or consideration of treatment does not qualify as being addressed or managed by the physician or other qualified health care professional reporting the service.

Confusion appears to arise because of 2 lines in the problem addressed definition, which state:

  • Notation in the patient’s medical record that another professional is managing the problem without additional assessment or care coordination documented does not qualify as being addressed or managed by the physician or other qualified health care professional reporting the service.
  • Referral without evaluation (by history, examination, or diagnostic study[ies]) or consideration of treatment does not qualify as being addressed or managed by the physician or other qualified health care professional reporting the service.

Frequently, coders have assigned diagnosis codes managed by another professional or coding for a condition to be addressed by another provider via a referral.

If the provider documents a patient has ESRD but currently is being managed by nephrology, we would not be able to assign this diagnosis as the provider only notes the ESRD without additional assessment or care coordination.

If in the same scenario above for a stable ESRD patient currently managed by nephrology, the provider documents the patient also has diabetes and determines which medication to add to the patient’s regimen. Considering the ESRD medication drug interactions, the provider decides to prescribe Januvia. This is considered management of the ESRD and diabetes, and both conditions would be coded.

Let’s say the provider notes the patient has osteoarthritis of the right knee and refers them to orthopedics for a consultation. Again, we would not assign a diagnosis code as the provider is performing a referral without evaluation or consideration of treatment.

In the same scenario above for a patient with osteoarthritis of the right knee, if the patient presents for a new complaint of right knee pain, the provider takes a history, performs an exam, orders a right knee x-ray, and diagnoses the patient with osteoarthritis of the right knee. Then, the provider refers the patient to orthopedics for a consultation. This would be a referral with evaluation and the osteoarthritis of the right knee would be coded.

One other source to note for diagnosis coding assignment comes from chapter 12 of the Medicare claims processing manual (section 30.6.12.3) which states the following regarding concurrent care:

To support coverage and payment determinations regarding concurrent care, services must be sufficiently documented to allow a medical reviewer to determine the role each practitioner played in the patient’s care (that is, the condition or conditions for which the practitioner treated the patient).

When assigning a diagnosis code for an E/M service, ensure it meets the full definition of a problem addressed per the AMA E/M documentation guidelines, and that a reviewer can determine the provider is treating the patient.

 

References:

2022 ICD-10-CM documentation guidelines

AMA E/M office and outpatient documentation guidelines

Chapter 12 Medicare claims processing manual

 

 

 

Summary Of CMS Proposed Rule Changes For 2023

(Based on the July 7, 2022 Proposed Rule)


Rate and Conversion Factors

With the budget neutrality adjustments and the required statutory update to the conversion factor for CY 2023 of 0% and the expiration of the 3% increase in PFS payments for CY 2022, the proposed CY 2023 PFS conversion factor is $33.08, a decrease of $1.53 (4.4%) to the CY 2022 PFS conversion factor of $34.61.


Updated Medicare Economic Index (MEI) for CY 2023

CMS is proposing to rebase and revise the MEI cost share weights for CY 2023 as well as a new methodology for estimating base year expenses that relies on publicly available data from the U.S. Census Bureau NAICS 6211 Offices of Physicians.


Evaluation and Management (E/M) Visits

After implementation of the 2021 Outpatient E/M guidelines, the CPT Editorial panel revised the remaining E/M codes. CMS has proposed to adopt these changes in 2023. The changes represent a complete overhaul of the remaining E/M codes to align them with the methodology of the outpatient E/M codes.  Key changes include:

  • Elimination of the use of history and examination to determine the code level. Instead, there would be a requirement for a medically appropriate history and exam.
  • Revising the medical decision-making table from the 2021 guidelines to accommodate all types of E/M services.
  • Allowing providers to choose between medical decision making or time to select code level (except for a few code categories such as emergency department visits).
  • Consolidating inpatient and observation care into a single code set.
  • Consolidating home and domicile care into a single home or residence-based services code set, which would cover assisted living facilities, group homes, custodial care facilities and residential substance abuse treatment facilities.
  • CMS will not be adopting the AMA’s prolonged service codes but will be creating their own G codes instead. There will be three, one for inpatient/observation, one for nursing facility, and one for home/resident visits.
  • CMS will not be adopting the general CPT rule where the billable amount of time is met once the mid-point is passed. Look for time thresholds from CMS to differ from the AMA’s.


Split (or Shared) E/M Visits

For CY 2023, CMS is proposing to delay the requirement that only time may be used to define “substantive portion” of a split (or shared) visit. Providers will still be able to use history, exam, medical decision making or time to define the “substantiative portion” of a split (or shared) visit.


Telehealth Services

For CY 2023, CMS is proposing to continue several telemedicine flexibilities that were temporarily allowed during the public health emergency (PHE). They are proposing that these “flexibilities” be allowed for 151 days after the end of the PHE to collect data to determine if they will make any of these changes permanent after CY 2023.

  • Allowing telehealth services to continue to be provided in any geographic location, including the beneficiary’s home.
  • Allowing certain telehealth services to continue to be performed via audio-only device.
  • Allowing physical therapists, occupational therapist, speech language therapists, and audiologists to provide telehealth services.
  • Delaying the in-person visit requirements for mental health services furnished via telehealth.
  • Allowing providers to continue to report telehealth services using the place of service (POS) where the service would normally occur instead of POS 02.
  • Allowing providers to continue to report telehealth services with modifier 95.
  • Delaying the requirement to report modifier 93 for audio only telehealth services.


Behavioral Health Services

CMS is proposing to create a new code for 2023 that will allow clinical psychologists (CP) or clinical social workers (CSWs) to personally perform and bill general behavioral health integration (GBHI) services. They are also proposing to allow a psychiatric diagnostic evaluation to serve as the initiating visit for the new general BHI service.

In addition, CMS is proposing to make an exception to the direct supervision requirement under the “incident to” regulation to allow behavioral health services provided under the general supervision of a physician or NPP, rather than under direct supervision.


Chronic Pain Management Services

CMS proposes to define chronic pain as persistent or recurrent pain lasting longer than three months and are proposing 2 new HCPCS codes (GYYY1 and GYYY2), for chronic pain management and treatment services (CPM) for CY 2023.


Opioid Use Disorder (OUD) and Opioid Treatment Programs (OTPs)

For CY 2023 and subsequent years, CMS proposes to revise its methodology for pricing the drug component of the methadone weekly bundle (HCPCS codes G2067 and G2078).  The proposed CY 2023 methadone payment amount would be $39.29, which is a 5.1 percent increase from 2022 rates. Additionally, for the nondrug component, CMS proposes to update the base rate for individual therapy from 30 to 45 minutes, raising the 2020 base rate from $68.47 to $91.18.  CMS would then apply the MEI updates for 2021, 2022 and 2023 to this adjusted rate to determine the CY 2023 payment amounts.


Colorectal Cancer Screening

CMS proposes to expand Medicare coverage of colorectal cancer screening in two ways. First, they propose to reduce the minimum payment age to 45 years. They also propose to expand their regulatory definition of colorectal screening services to include screening colonoscopies that are performed to follow up on positive Medicare covered stool-based colorectal screening tests.


Audiology Services

CMS proposes to allow Medicare beneficiaries to have direct access to an Audiologist without a physician referral. They propose to create a new code (GAUDX) that will allow audiologists to provide direct access care for non-acute hearing or assessments unrelated to disequilibrium, or examinations for the purpose of prescribing, fitting or changing hearing aids. This code would only be billed once per every 12 months.


FY 2023 IPPS Payments (Proposed)

CMS proposed to increase operating payment rates by 3.2% for general acute care hospitals paid under the IPPS that successfully participate in the hospital Inpatient Quality Reporting (IQR) program and are meaningful electronic health record (EHR) users.

This reflects the projected hospital market basket update of 3.1%, reduced by a 0.4 percentage point productivity adjustment, and increased by a 0.5 percentage point for a statutorily required documentation and coding adjustment.

The proposed increase in operating and capital IPPS payment rates, partially offset by decreases in outlier payments for extraordinarily high-cost cases, will generally increase hospitals’ payments in FY 2023 by $1.6 billion.


FY 2023 Physician Fee Schedule (Proposed)

The wRVU and reimbursement rates changed for select procedures in the 2023 proposed rule.  Some specialties will be impacted more significantly than others, with a notable reduction in the reimbursement for several cardiovascular services.


Comparing Cardiac Ablation Coding FY2021 – Proposed FY2023


Impact on CY 2023 Payments on Cardiovascular Services


Impact on CY 2023 Payment for Selected Procedures

 

To learn more about these changes or find out more about our organization, please contact:

Anthony Long, PartnerJason Baldwin, Sr. ConsultantLori Carlin, DirectorRobin Peterson, Manager
720-370-9800303-520-2654206-399-7792303-902-8186
ALong@AskPHC.comJBaldwin@AskPHC.comLCarlin@AskPHC.comRPeterson@AskPHC.com

Smart Pricing of Lumbar Stand-Alone Devices

Today’s vendor technology is no longer siloed into a specific classification. For example, an ALIF (anterior lumbar interbody fusion) device used to be just an ALIF.  Today, that same ALIF can be used as a spacer, lumbar stand-alone assembly, or an ALIF with buttress assembly.

Assigning pricing to the assembled device is a challenge as vendor’s will typically request a much higher price than average for ALIFs that can be used as assemblies.

Where do you start?

Review your current pricing.

  • If you don’t have construct/component pricing, calculate your average cost for an ALIF and a stand-alone lumbar assembled device; and,
  • Determine which vendors have the biggest discrepancies from the average cost and focus on a deep dive into that vendor.

Research your technology:  Current vendor websites may not delineate the spacer as having multiple uses.

  • Request the surgical technique guide from the vendor; and,
  • Review the technique guide to better understand how the technology is assembled.

The first place to start is to price all of your ALIFs at the same price – no matter if they are used as just an ALIF, a stand-alone lumbar integrated device, or an ALIF with a buttress assembly.  The average cost for an ALIF is $3,500 or less.

Example 1 illustrates how the vendor priced an ALIF as a lumbar stand-alone assembly price of $5,500.  The ALIF in Example 1 can be used as an ALIF or as a component in a Stand-Alone Integrated Device.  A typical stand-alone lumbar assembled device consists of an ALIF, plate/cover plate, and screws with an average assembled cost of $5,200 or less. As different integrated devices have different components depending on the vendor and technology, standardizing the price of the ALIF, and adjusting the remaining components to total $5,200 is the easiest way to price any assembled device.

Example 1

 

To throw in several curveballs, the way in which an ALIF is used in an assembly can change the assembly’s categorization / classification:

Stand Alone Lumbar Assembly:

  • ALIF + screws + plate
  • ALIF + screws

ALIF with Buttress Assembly – Requires supplemental fixation (pedicle screws, rods):

  • ALIF + anchors and/or plate
  • Hyperlordotic ALIF + screws or anchors with/without a plate – typically the lordosis is >20° but may vary by vendor (lordosis is the curvature of the spine)

The takeaway from this exercise is twofold:  1) establish the ALIF price first so everything else that could be included can be priced to total up to your average price for that particular category / classification, and 2) classification of the individual implants is key to managing your implant pricing.

For more information, please contact Kim Nilsson at KNilsson@AskPHC.com or 980-721-2637, or John Ossowski at JOssowski@AskPHC.com or 801-209-3304 or Andrew Arreola at AArreola@AskPHC.com or 480-510-7940.