Rules and regulations are always changing.
Many readers may remember the Centers for Medicare & Medicaid Services (CMS) Transmittal 534. This was released in early August 2014, and it would have given Medicare contractors the ability to automatically deny associated physician claims when a hospital claim was denied. As written, if an inpatient admission was denied for being medically unnecessary, the audit agency then would have been able to deny the claims submitted by all physicians who billed for services during the admission, including the admitting physician, any consultants, and the radiologist. Likewise, if surgery was denied, the surgeon’s fee could be denied, along with all those of all other physicians involved in the care of the patient.
CMS quickly withdrew Transmittal 540, and after implementing some changes, it finally released Transmittal 541 in mid-September 2014. This transmittal limited these “related claim” denials to allow the auditors to deny a claim of the operating surgeon only if an inpatient surgery was found to be medically unnecessary. Physician advisors in hospitals around the country went to their medical staff, talking about these transmittals, and urged them to improve their documentation, lest their claims are denied.
In the past five years, few if any denials have resulted from the application of this policy. Hospitals continue to be audited for medical necessity of procedures, with denials coming from several agencies, including the Recovery Audit Contractors (RACs), with a focus on cataract extraction and total joint arthroplasty, to name two procedures. However, most have yet to see a physician’s professional claim be denied.
Last year I wrote in RACmonitor.com and presented a RAC University webinar on CMS’s new requirements for shared decision-making. For implanted defibrillators, that requirement has been in place since February 2018 – after it became clear that there was a need for documentation that captured a shared decision-making encounter that took place using an evidence-based tool for all placements for primary prevention. Shared decision-making makes sense; patients with chronic systolic heart failure who meet the indications for a defibrillator have a progressive, life-limiting illness, and deserve a voice in their treatment.
A defibrillator is not a benign treatment, as anyone who has ever experienced a shock from one can tell you. There are not only physical effects but also psychological ones. Yet in a recent study, less than two-thirds of patients were told of the risk of inappropriate shocks, less than half were informed of the risk of bleeding or infection, and less than 5 percent of patients had discussions regarding potential life impacts and deactivating their device.
Now that CMS has given hospitals an unofficial grace period, audits and denials are starting to emerge. I received notice of a denial that was received by a hospital from their Medicare Administrative Contractor (MAC) for an outpatient placement of a defibrillator. Their review of the record found that the patient had ischemic cardiomyopathy with class III symptoms, an ejection fraction of 30 percent, no recent myocardial infarction, and proper medical therapy. However, there was no indication of a shared decision-making encounter with an evidence-based tool. With a base payment rate of $30,656 for C-APC 5232, this would be one very expensive denial if the physician cannot produce documentation for the visit. In addition, since an advance beneficiary notice was not provided, the patient cannot be held liable, nor can the hospital ask for the defibrillator back and return it to the supplier for a refund of the $20,000+ purchase price. Another hospital informed me that they had several chart requests from a RAC for outpatient defibrillator procedures; since they were performed as an outpatient, it was clear the audit would target medical necessity for the procedure itself.
Dr. Ronald Hirsch is Vice President of the Regulations and Education Group at R1 RCM Inc. Dr. Hirsch was a general internist and HIV specialist and practiced at Signature Medical Associates, a multispecialty practice located in Elgin, IL. He was Medical Director of Case Management at Sherman Hospital in Elgin, IL from 2006 to 2012, where he was Chairman of the Medical Records Committee from 1995 to 2012, and also served on the Medical Executive Committee. Dr. Hirsch is certified in Health Care Quality and Management by the American Board of Quality Assurance and Utilization Review Physicians, certified in Revenue Integrity by the National Association of Healthcare Revenue Integrity, and on the Advisory Board of the American College of Physician Advisors. He is on the editorial board of RACmonitor.com. He is the co-author of The Hospital Guide to Contemporary Utilization Review, with the third edition published in 2021.