EisnerAmper Blog

An EisnerAmper Health Care Services Blog

Medicaid Update for Home Health Care Agencies

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February 3, 2016

Bisciello_StevenBy Steven Bisciello, MBA, CMPE

The Centers for Medicare & Medicaid Services (“CMS”) recently published a revision to their final rule regarding the provision of Home Health Care Services for Medicaid eligible beneficiaries. A similar revision has already been in place for Medicare beneficiaries.

According to this revision, Medicaid patients seeking authorization for home health services must now have a documented “face to face encounter with their physician either 90 days prior or no later than 30 days after the onset of home health care services.” This is for straight Medicaid beneficiaries and currently does not apply to Medicaid Managed Care beneficiaries.

This will have a direct effect on the intake, coordinating and clinical departments within home health care agencies. These departments typically work synergistically both prior to and during the onset and provision of home health care services to their patients.

Prior to the onset of care, typically, the intake department staff is responsible for obtaining and confirming all of the patient’s demographic and insurance eligibility information. The Coordinating Department staff then must identify and schedule a home health aide to service this patient based on the patient’s needs and geographic location. The clinical department staff is responsible for having a registered nurse assess the patient, identify the patient’s medical needs and develop a plan of care for the home health aide to follow while onsite at the patient’s home and in accordance with the insurance payer’s authorized hours/days/units of service. All of these functions are imperative to the onset, provision and respective billing and reimbursement for home health care services.

This CMS update will now ensure that home health care agencies take/have an additional step in place prior to the onset of care. That step is to ensure Medicaid beneficiaries have had their face to face encounter with their physician and to obtain written proof of this encounter (physician’s note/order) to add to the patient’s file. This should be done to keep a proper audit trail and to utilize, if necessary, for billing rejections/denials to reduce exposure to providing unauthorized care and subsequent bad-debt write-off.


Hospital Merger and Acquisition Activity Will Continue in 2016

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January 26, 2016

McLafferty_MikeBy: Michael J. McLafferty, CPA, MBA, FACHE, FHFMA, FACMPE

The hospital marketplace continues to consolidate. This is the result of the need to plan for the continuum of care to provide services for a population health strategy. The other major benefit is to leverage the larger size of a health system to gain better reimbursement rates and increase the purchasing power of the organization. 

One of the market reasons for this continued consolidation is the merger of some of the largest insurance companies (i.e., Anthem/Cigna and Aetna/Humana). Health systems see this further integration on the insurance industry as a justification to continue to merge on the provider side of the industry.
The Fitch Ratings service predicts that in 2016 for-profit providers are expected to continue to access capital markets to fund further acquisitions. Several of the largest hospital corporations were expected to direct more of the proceeds from their improved operational cash flow in 2015 toward acquisitions in 2016. In a December report, the ratings agency concluded that M&As, alignments, and joint-venture arrangements among not-for-profit hospitals, physicians, and non-acute healthcare providers were expected to “remain brisk” in 2016.
We have seen the Northeast market continue to consolidate at the hospital level (e.g. Hackensack and Meridian Health, Robert Wood Johnson and Barnabas Health and Jefferson Health and Abington Memorial). These mergers should be completed in 2016 and will transform how health care is delivered in the Northeast region. 

While health systems continue to acquire physician organizations, we also see a number of physician groups starting to merge with each other. This is especially true for the radiology, urology, and gastroenterology specialties.

2016 CPT® Changes

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January 13, 2016

Clark_NancyNancy Clark, CPC, COC, CPB, CPMA, CPC-I

Current Procedural Terminology (CPT®) procedure codes have been revised for 2016. According to the American Medical Association, there are 365 changes, including:

  • 140 new codes,
  • 134 revised codes, and
  • 91 deleted codes

The highest volume of code changes can be found in the Surgery section, with 48 new codes and 22 deleted codes. The new codes are concentrated in the digestive and the urinary system subsections. Many of these code descriptions identify new technology approaches, some of which are either less invasive or more specific to the procedure.

In the Auditory system, there is new code 69209, which identifies removal of impacted cerumen, or ear wax, using irrigation or lavage techniques. This is in addition to a frequently audited code, 69210, that only applied to removal of cerumen with instrumentation. Providers who perform this procedure should adhere to the related documentation changes. 

The Radiology section replaces some of the old descriptors of “film” to the new term “image,” indicating that digital or saved images are appropriate for these procedures. There are 25 deleted codes in this category, the most of any section. Some deletions are due to codes not being utilized or being misvalued.

In the Medicine section, most of the vaccine codes have been updated to include the Advisory Committee on Immunization Practices’ abbreviations. Many of the codes representing obsolete vaccine products have been deleted. Several new codes, including certain meningococcal vaccines, have been added.

Also of note, the Ophthalmology section now bundles certain minor procedures with eye exams. Optometric physicians should pay careful attention to the parenthetical notes in this section.

There are 2 new and 2 revised evaluation and management codes. The new codes (99415, 99416) identify prolonged services by clinical staff, including physician assistants and nurse practitioners. The revised codes (99354, 99355) now allow for reporting of prolonged service time for outpatient psychotherapy services.

CPT® Category III codes, temporary codes for emerging technology, services, and procedures, have increased by 43. Some Category III codes have now been replaced by permanent CPT® codes, while others have been deleted or “sunset” due to lack of substantial use after 5 years.

The Pathology and Laboratory section also has substantial changes, including additions and revisions to the Molecular Pathology Tier subsections. There are no changes to the CPT® modifiers located in Appendix A for this year.

Ensure that your practice reviews all relevant changes and additions to CPT® for the current year. Update the encounter form, chargemaster and other forms to accurately reflect only current CPT® codes. Deleted CPT® codes will no longer be reimbursed for dates of service January 1 and after. Verify that the new codes are loaded into the software and practice management systems. A thorough review now may prevent costly errors during the year.


2016 Medicare Premiums Announced

(ICD-10 Implementation) Permanent link

December 11, 2015

Nancy Clark, CPC, COC, CPB, CPMA, CPC-I

The Centers for Medicare and Medicaid Services (CMS) has announced Part A and B deductibles and premiums for 2016.

Many beneficiaries with Medicare Part B will not see their monthly premiums increase above last year’s $104.90, related to a previous announcement by the Social Security Administration that there would be no social security cost of living increase for the coming year.  Other beneficiaries, including those who do not receive social security benefits; those who initially enroll in Medicare Part B in 2016; those considered “dual eligible beneficiaries” who have their premiums paid by Medicaid; and those who pay an additional income-related premium are not subject to the so-called “hold harmless” provision, and will see their premiums increase to $121.80.  According to CMS, these groups account for about 30 percent of the approximately 52 million Medicare Part B beneficiaries. 

Since 2007, those with higher incomes have paid greater Part B monthly premiums.  Less than five percent of beneficiaries are affected by this income-related monthly adjustment amount (IRMAA).  The 2016 monthly premium increases for those in higher income brackets are: 

  • $170.50, up from $146.90 in 2015 for
    • Individuals with annual incomes between $85,000 and $107,000 and
    • Married couples with annual incomes between $170,000 and $214,000  
  • $243.60, up from $209.80 in 2015 for
    • Individuals with annual incomes between $107,000 and $160,000 and 
    • Married couples with annual incomes between $214,000 and $320,000  
  • $316.70, up from $272.70 in 2015 for
    • Individuals with annual incomes between $160,000 and $214,000 and 
    • Married couples with annual incomes between $320,000 and $428,000  
  • $389.80, up from $335.70 in 2015 for
    • Individuals with annual incomes of $214,000 or more and 
    • Married couples with annual incomes of $428,000 or more   

The annual deductible for Part B beneficiaries will increase from $147 in 2015 to $166 for 2016.  

Medicare Part A covers primarily inpatient hospital, some home health care and skilled nursing facility charges.  Those beneficiaries who have at least 40 quarters of Medicare-covered employment are considered “premium-free Part A” and not required to pay the Part A deductible.  CMS estimates about 99 percent of beneficiaries fall into this category.  For those who are required to pay, the premium will increase to a maximum of $411 per month, up from a $407 maximum in 2015.

The Part A deductible is also increasing from $1,260 in 2015 to $1,288 in 2016. Other Part A costs include: 

  • Co-payment for hospital stay days 61-90: $322 per day, up from $315
  • Co-payment for hospital stay days 91 and beyond: $644 per day , up from $630
  • Skilled nursing facility co-payment, days 21-100: $161 per day , up from $157.50 

For additional information, visit the CMS website

Cost-Sharing Tiers – Network Adequacy

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November 17, 2015

McLafferty_MikeBy Michael J. McLafferty, CPA, MBA, FACHE, FHFMA, FACMPE

The National Association of Insurance Commissioners (“NAIC”) could vote as early as this month on the first revision to its Managed Care Plan Network Adequacy Model Act in nearly 20 years.

The proposed model, as well as another one under consideration this month by a committee of the National Conference of Insurance Legislators, comes amid new data on the increasing prevalence of plans that either have narrow networks or exclude coverage of out-of-network providers.

Among the changes recently sought to the NAIC model legislation by the American Hospital Association (“AHA”) was for all network adequacy standards to be applied to the lowest cost-sharing tier of any tiered network. Some states already have adopted requirements mandating network adequacy in tiered networks.

The AHA also urged that the model act require quantitative measures, appropriate for each state, to ensure access to all covered services by participating providers with the requisite training and expertise to provide that care.

These are similar arguments to those our health care team experienced during the 1970s regarding the introduction of Health Maintenance Organizations (“HMOs”). There were concerns about network adequacy and qualified providers in those networks.

Many states enacted “any willing provider” laws that prevented the closing of physician panels. The panels were filled only by providers willing to take a lower than market reimbursement rate.

Insurance companies lost numerous court cases when they tried to create narrow or restricted networks in the 1970s. These networks were eventually opened to all providers willing to participate and a full range of basic medical services was offered for patients that enrolled in these networks.

The legal argument by insurance companies that narrow networks allows for the survival of accountable care organizations and “value vs. volume” payments will be difficult to make. History may repeat itself again with insurance companies forced to provide adequate medical services in all of their network products.

ICD-10 Moves Forward

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November 5, 2015

Clark_NancyBy Nancy Clark, CPC, COC, CPB, CPMA, CPC-I

For dates of service October 1, 2015 and later, providers are now required to bill medical claims with ICD-10-CM codes.  Early reporting by the Centers for Medicare and Medicaid Services (CMS) indicates a low 2% rejection rate for Medicare Fee-for-Service claims .  Despite this positive news, CMS also posts denial rates of about 10% of total claims processed.  While this is par with the estimated historical baseline, it is still disconcerting that one-tenth of all Part B claims are being denied.

Previous concern about whether HIPAA (Health Insurance Portability and Accountability Act) entities will utilize ICD-10 codes despite not being specifically mandated has subsided.  Motor vehicle and workers’ compensation insurance, which are not HIPAA entities, are not federally mandated to accept ICD-10 codes, and in some states are legally allowed to accept ICD-9 codes.

Most New Jersey motor vehicle insurers verbally indicate that they are prepared to accept ICD-10 codes on claims and Attending Provider Treatment Plans (“APTP”).  However, there is no final rule on the New Jersey Department of Banking and Insurance web site.   “Automobile insurers, PIP (Personal Injury Protection) vendors and providers should be transitioning to ICD-10 codes but at this time, there is no requirement that automobile insurers and PIP vendors accept only ICD-10 codes. The Department may institute such a requirement in the future.”

New Jersey, New York and Pennsylvania’s workers’ compensation policies  are to accept ICD-10 codes.  In reality, there are several carriers which indicate they are not ready and are working toward integrating the new code set. Providers should call the specific carrier prior to claim submission to ensure the correct codes are used.

New Jersey Medicaid indicates that providers are required to utilize ICD-10 codes beginning with date of service October 1, 2015 .  New York and Pennsylvania have similar requirements. However, not all states have implemented ICD-10 compliance initiatives. Fee-for-service programs in California, Louisiana, Maryland and Montana are not ready to report ICD-10 codes. CMS has signed off on a “crosswalk” technique to translate codes in order to continue to utilize older ICD-9 codes.

Most commercial carriers are prepared to accept ICD-10 codes and many have already issued payments. While rejections seem to be low, at this time not all claims have been processed, so it is too early to comment on the denial percentage. Additionally, the recent upsurge of “risk adjustment” audits indicates that carriers are reviewing practices’ use of diagnosis coding. Providers should ensure that their documentation supports the ICD-10 codes billed, or risk losing the revenue in a future audit.

Claim Denials for Invalid ICD-10 Codes

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October 28, 2015

By Melissa Pizor, COC, CPC, CPCO, CPMA, CPRC

We are a few weeks into the official ICD-10 implementation and some physicians are facing a large number of denials due to invalid diagnosis codes. Some software systems have shortcuts, commonly referred to as crosswalks, that are designed to automatically convert an ICD-9 code to an ICD-10 code; however, one of the issues with this method is the translated codes are not always valid. A shortened or “truncated" code means required characters are missing which will cause the claim to be rejected at the clearing house or denied at the payer, so it is important to check the translations for accuracy. If invalid codes are identified in the system, they should be removed right away.
ICD-10 codes are made up of 3, 4, 5, 6 or 7 characters so a thorough understanding of how the new code books work is necessary. The complete ICD-10 codes are found in the tabular section of the book.
The heading of the category of codes is listed first and is then further divided by the use of additional characters in order to provide greater specificity. An example is listed below. R03 is not a valid code as it requires the use of a fourth character.
R03 Abnormal blood-pressure reading, without diagnosis 

  • R03.0 Elevated blood-pressure reading, without diagnosis of hypertension
  • R03.1 Nonspecific low-blood pressure reading

It is important to keep a close eye on all denials during this transition period. It is better to correct these errors before they have a huge impact on your financials. Now is the time to learn from your errors so you save time and money in the future.

EisnerAmper is an independent member of Allinial Global.
EisnerAmper is an independent member of EisnerAmper Global.