ED Coding and Reimbursement Alert

Implementation Of ICD-10 And Two Midnight Rule Audit Action Both Delayed 

Several payment related deadlines changed on April Fool’s Day, and you will want to know the new deadlines for several ED relevant provisions.  In a disappointment to physician practices, the expected actual fix to the Sustainable Growth Rate (SGR) formula that threatens significant pay cuts every year did not occur. At the last minute, Congress did pass another temporary patch to avert the 24% Medicare pay cuts and tacked on several other provisions that the AMA and others had requested.

President Obama signed the Protecting Access to Medicare Act of 2014 on April 1, 2014 after the Senate passed the House bill H.R. 4302, which extends Medicare physician pay rates and extends the 0.5 percent update for providers throughout the remainder of 2014. It also provides a zero percent update between January 1 and March 31, 2015. As a result of this legislation, rates are projected to be cut by 24 percent on April 1, 2015, says Michael A. Granovsky, MD, FACEP, CPC; President of LogixHealth, an ED coding and billing company in Bedford, MA. 

In addition, the Medicare Work Geographic practice Cost Index (GPCI) artificial floor of 1.0 in areas where labor cost is lower than the national average, will be extended until April 1, 2015. 

Expert overview: Although chances looked better than any time in recent history for Congress to repeal the SGR once and for all, with an estimated cost of about $138 billion over ten years down significantly from prior year projects, and seemingly good support from both political parties, in the end no agreement could be reached on how to fund that fix, says Granovsky. The default was to institute another patch, the seventeenth since 2002. 

Advocacy efforts for a permanent repeal of the current SGR legislation will begin again in hopes of a true fix before the April 2015 deadline, Granovsky predicts. In an effort to gain support for this step back from a true SGR fix, Congress added several provisions to make the bill more acceptable, he adds.

ICD-10 Implementation Delayed Until 2015

You made need to reconsider your ICD-10 training schedule. In a surprising move, given Secretary Sibelius’ comment in February that there would not be any further delay, PAMA included a provision that would postpone ICD-10 implementation from October 2014 to “not before” October 2015. 

This news has received mixed reaction from the medical community. Many practices are relieved to have more time to prepare for the transition, in terms of coder education, software upgrades and testing. Others who have gone to the expense and preparation for the prior deadline are not happy about the delay. 

The specific language in the PAMA of “not before October 2015” opens the door for possible additional delays past that date. There is a move by AHIMA to try to overturn this provision of H.R. 4302 and restore the October 2014 deadline. Others are suggesting we skip ICD-10 altogether and move straight into ICD-11 when it is released in a few years. 

What to do: It would be wise to continue your preparation for ICD-10 in the meantime. Use this extra time to verify that your systems will be ready for the transition, but also verify that your software and hopefully payer software, will be able to continue recognizing ICD-9 codes after Oct.1, 2014 warns Granovsky.

Two Midnight Rule Audit Enforcement Also Delayed

Another provision of the Protecting Access to Medicare Act of 2014 will extend the enforcement delay of the CMS “two-midnight” rule but you still need to check the documentation carefully before assigning a patient status. The two-midnight rule requires a patient stay spanning at least two midnights in a hospital to qualify for inpatient as opposed to observation status. 

The new law will extend the enforcement moratorium on the CMS two-midnight policy through March 31 2015. With the extension, Medicare Recovery Audit Contractors (RACs) won’t be able to pursue recoveries for claims under the two midnight rule through March 31, 2015 unless there is evidence of systematic gaming, fraud, abuse, or delays in the provision of care by a provider of services.  This provision allows CMS to continue use of the MAC “probe and educate” program to assess provider understanding and compliance with the “two-midnight” rule, on a pre-payment basis, through March 31, 2015.

Background: The two-midnight rule took effect on Oct. 1, 2013, but enforcement has been delayed several times with an audit free transition period through March 31, 2014, then a second extension was added through September 30, 2014 and now through March 31, 2015. This additional delay will allow hospitals to try to change the policy or prepare for its full implementation, says Granovsky.