2016 Cordis® Cardiac & Vascular Procedures Reimbursement Guide ® Table of Contents Description Page Hospital Inpatient Issues 2 Hospital Inpatient Coding 4 Hospital Inpatient Reimbursement 9 Hospital Outpatient Issues 13 Hospital Outpatient Reimbursement 15 Ambulatory Surgery Center and Independent Diagnostic Testing Facility Issues 20 Physician Reimbursement Issues 24 Bundling – NCCI and OCE Issues 25 CPT® Coding Updates in Recent Years 26 Modifiers 31 Disclaimer – The information contained in this guide has been compiled by a third-party organization from published sources and is provided for use as a reference for healthcare provider. The information is to the best of our knowledge true and accurate at the time of publication and may be subject to change without notice as a result of changing laws, regulations, local policies and rules. Healthcare providers are ultimately responsible for determining appropriate practices for services provided, procedures performed, and reimbursement sought including, but not limited to, medical necessity determination and documentation requirements, coding, coverage policy, billing, and payment for individual patients. Providers should consult each payor organization with regard to local reimbursement policies and requirements for billing. The information contained in this document is provided for information purposes only and represents no statement, promise or guarantee by Cordis Corporation concerning levels of reimbursement, payment, or charge. Similarly, all codes are provided for information purposes only and represent no statement, promise or guarantee by Cordis Corporation that these codes will be appropriate for any procedure using Cordis® products or that reimbursement will be made. It is important to research coverage and payment for procedures on a payer-specific basis as coverage policies and guidelines vary by payer. The information in this guide is broad-based and references many different procedures and types of devices. Such a broad discussion is not intended to suggest or imply that Cordis® offers products for every use or procedure discussed and the FDA-approved labeling for all products may not be consistent with the information in this guide. As always, please refer to the package insert for a complete description of indications and contraindications for any medical device type mentioned in these materials prior to use. 2 HOSPITAL INPATIENT ISSUES Introduction to the 2016 Hospital Inpatient Prospective Payment System (IPPS) Final Rule On July 31, 2015, the Centers for Medicare & Medicaid Services (CMS) issued the final rule for acute inpatient hospital services, detailing changes to Medicare payment rates and policies for fiscal year 2016. The final rule appeared in the August 17th Federal Register and will be effective for discharges on or after October 1, 2015.1 Medicare previously adopted the Medicare Severity Diagnosis Related Group (MS-DRG) system to better account for patient severity of illness, expanding the number of payment groups from 538 to 745; there are now 758 MS-DRGs. The intent of the MS-DRG system is to more accurately stratify groups of Medicare patients with varying levels of severity than the prior DRG system by better aligning payments with the anticipated costs of care, and are assigned based upon the presence or absence of specific diagnosis codes indicating complications or comorbidities (CCs) and/or major complications or comorbidities (MCCs). ‘Complications’ include all conditions that develop after inpatient admission which affect treatment and/or length of stay; ‘cormorbidities’ are conditions which pre-exist at the time of admission. While most commercial insurers are also following MS-DRGs, some may utilize other reimbursement methods.2 The Final Rule includes policies that continue an increasing shift of Medicare payments from volume to value. Among other key changes in the IPPS for FY 2016 are the following:2 1) FY 2016 Inpatient Hospital Update: The final rule updates IPPS payment rates by 1.7% for hospitals that successfully participate in the Hospital Inpatient Quality Reporting (IQR) Program AND are meaningful users of EHR, which reflects a market basket increase of 2.4% reduced by several adjustment factors. 2) Quality Measure Reporting for 2016 Updates: Under the Reporting Hospital Quality Data for Annual Payment Update (RHQDAPU), in effect since 2004, hospitals that choose not to participate or fail to meet criteria for successful reporting in a given year received the annual payment update (APU) reduced by 2.0%. The 2016 final rule adds 7 new measures: 4 for the FY 2018 payment determination, and 3 for the FY 2019 payment determination. 3) Hospital Readmissions Reduction Program: The Affordable Care Act established this program, under which payments to certain hospitals will be reduced to account for excess readmissions. Two new measures bring the total to five: acute myocardial infarction (AMI) or heart attack, heart failure, pneumonia, hip/knee arthroplasty, and chronic obstructive pulmonary disease. 4) Other Payment Policy Updates: The Final Rule also addresses operational details regarding: • The Hospital Value-Based Purchasing (VBP) Program; • Admissions and Medical Review Criteria for Inpatient Services; • Clarifications to the “Two Midnight Rule” and Part B Rebilling for Inpatient Services in Hospitals later determined to be outpatient stays; • Medicare Disproportionate Share Hospitals (DSH) payments; and • Direct Graduate Medical Education (DGME). Expiring provisions include: the Medicare-Dependent Hospital (MDH) Program, and Affordable Care Act changes to the Low-Volume Hospital Payment Adjustment. 1 October 1, 2015 through September 30, 2016. 2 Centers for Medicare and Medicaid Services Fact Sheet: FY 2016 Final Inpatient and Long-term Care Hospital Policy and Payment Changes (CMS-1632-F); July 31, 2015; http://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-Sheets. 3 5) Quality Reporting Programs: The Affordable Care Act called for CMS to create new quality reporting programs for two types of hospitals that are exempt from payment under the IPPS. The Hospital IQR Program grew out of the Hospital Quality Initiative developed by CMS in consultation with hospital groups. By statute, annual payment updates for hospitals that do not participate successfully in the Hospital IQR program are reduced by 2.0 percentage points. Beginning with fiscal year 2015, hospitals that do not participate will lose one-quarter of the percentage increase in their payment updates. Since the implementation of this financial penalty, hospital participation has increased to well over 99 percent. For the FY 2016 payment determination and subsequent years, CMS will remove six chart abstracted measures and one structural measure, while suspending one chart-abstracted measure and adopting five new claims-based measures: (1) 30-day risk-standardized COPD Readmission; (2) 30-day risk standardized COPD mortality; (3) 30-day risk standardized stroke readmission; (4) 30-day risk standardized stroke mortality; and (5) AMI payment per episode of care. CMS also finalized a proposal to reduce the number of records used for Hospital Acquired Infection (HAI) validation from 48 records per year to 36 records per year beginning with the FY 2015 payment determination, and to provide hospitals with the option to transmit secure electronic versions of medical information to meet validation requirements. 6) Hospital Acquired Conditions Reduction Program: The FY 2014 hospital payment rule finalized the general framework for the Hospital-Acquired Condition (HAC) Reduction Program. Section 3008 of the Affordable Care Act requires CMS to establish a program for IPPS hospitals to improve patient safety, by imposing financial penalties on hospitals that perform poorly with regard to hospital-acquired conditions. HACs are conditions that patients did not have when they were admitted to the hospital, but which developed during the hospital stay. Under the HAC Reduction Program, hospitals that rank in the lowest-performing quartile of hospital-acquired conditions will be paid 99 percent of what otherwise would have been paid under IPPS, beginning in FY 2015. The rule finalizes the quality measures and the scoring methodology to determine this quartile, as well as the process hospitals use to review and correct their data. In the first year of the program, FY 2015, CMS used measures that are part of the IQR program. The HAC measures consist of two domains of measure sets. • Domain 1 includes the Agency for Health Care Research and Quality (AHRQ) composite PSI #90. This measure includes the following indicators: Pressure ulcer rate (PSI 3); Iatrogenic pneumothorax rate (PSI 6); Central venous catheter-related blood stream infection rate (PSI 7); Postoperative hip fracture rate (PSI 8); Postoperative pulmonary embolism (PE) or deep vein thrombosis rate (DVT) (PSI 12); Postoperative sepsis rate (PSI 13); Wound dehiscence rate (PSI 14); and Accidental puncture and laceration rate (PSI 15). • Domain 2 measures consist of two healthcare-associated infection measures developed by the Centers for Disease Control and Prevention’s (CDC) National Health Safety Network: Central Line-Associated Blood Stream Infection and Catheter-Associated Urinary Tract Infection. Hospitals will be given a score for each measure within the two domains. A domain score will be calculated—with Domain 1 weighted at 35 percent and Domain 2 weighted at 65 percent—to determine a total score under the program.