(Medicare Claims Processing Manual)

The Medicare Code Editor (MCE) creates a Limited Coverage edit for ICD -9-CM procedure code 32.22.  This procedure code has limited coverage due to the stringent conditions that must be met by hospitals.  Where this procedure code is identified by MCE, the A/B MAC (A) shall determine if coverage criteria is met and override the MCE if appropriate.   Effective with the implementation of ICD -10 there will not be an MCE edit for lung volume reduction surgery.  The LVRS can only be performed in the facilities listed on the following Web site:  http://www.cms.gov/Medicare/Medicare- General -Information/MedicareApprovedFacilitie/Lung -Volume -Reduction- Surgery -LVRS.html Medicare previously only covered LVRS as part of the National Emphysema Treatment Trial (NETT).  The study was limited to 18 hospitals, and patients were randomized into two arms, either medical management and LVRS or medical management.  The study was conducted by The National Heart, Lung, and Blood Institute of the National Institutes of Health and coordinated by Johns Hopkins University (JHU).  Hospital claims for patients in the NETT were identified by the presence of Condition Code EY.  The JHU instructed hospitals of the correct billing procedures for billing claims under the NETT.   100.8  Replaced Devices Offered Without Cost or With a Credit    (Rev. 2627, Issued 01- 04-13, Effective 10- 01-12, Implementation 10- 01-12)  Background   To identify and track claims billed for replacement devices, CMS issued CR 4058 on November 4, 2005.  This CR provided instructions for billing and processing claims with the following condition codes:    49 Product Replacement within Product LifecycleReplacement of a product earlier than the anticipated lifecycle due to an indication that the product is not functioning properly.    50 Product Replacement for Known Recall of a Product Manufacturer or FDA has identified the product for recall and therefore replacement.   Policy   Beginning with discharges on or after October 1, 2008, CMS reduces Medicare payment when a replacement device is received by the hospital at a reduced cost or with a credit that is 50 percent or greater than the cost of the device, and when the assigned MS -DRG for the claim is one of the MS -DRGs applied to this policy.  For a list of MS -DRGs for which this policy applies to, please see the IPPS Final Rule.  This adjustment is consistent with section 1862(a)(2) of the Act, which excludes from Medicare coverage an item or service for which neither the beneficiary, nor anyone on his or her behalf, has an obligation to pay.  Billing Procedures (Discharges on or after October 1, 2008)   To correctly bill for a replacement device that was provided with a credit or no cost, hospitals must use the combination of condition code 49 or 50, along with value code FD.  The condition code 49 or 50 will identify a replacement device while value code  FD will communicate to Medicare the amount of the credit, or cost reduction, received by the hospital for the replaced device.   Payment (Discharges on or after October 1, 2008)   Medicare deducts the partial/full credit amount, reported in the amount for value code FD, from the final IPPS reimbursement when the assigned MS -DRG is one of the MS -DRGs applied to this policy.  Reminder about Charging for Recalled Devices   As a reminder, section 2202.4 of the Provider Reimbursement Manual, Part I states, charges should be related consistently to the cost of the services and uniformly applied to all patients whether inpatient or outpatient.   Accordingly, hospital charges wi th respect to medical devices must be reasonably related to the cost of the medical device.   If a hospital receives a credit for a replacement medical device, the charges to Medicare should also be appropriately reduced.   100.9  Requirements for Processing Non Veterans Administration (VA) Authorized Inpatient Claims  (Rev.  3779, Issued: 05- 24-17, Effective: 10 -01-13, Implementation: 04- 03-17)  Medicare is precluded from making payment for services or items that are paid for directly or indirectly by another government entity.  For inpatient claims where the VA is the Payer, the covered VA services are exclusions to the Medicare program per Secti on 1862 of the Social Security Act. If the VA doesnt approve all the services, any Medicare covered services not considered by the VA may be billed to the Medicare program.   When a VA - eligible beneficiary chooses to receive services in a Medicare Certified Facility for which the VA has not authorized, the facility shall use Condition Code 26 to indicate the patient is a VA eligible patient and chooses to receive services in a Medicare Certified provider instead of a VA facility and value code 42 with the amount of the VA payment for the authorized days.   100.10   Requirements  for Processing Programs of All- Inclusive Care for the Elderly (PACE) Disenrollments during an  Inpatient  Stays (Rev. 12239; Issued: 09- 06-23; Effective: 01 -01-24; Implementation: 01 -02-24) Medicare is precluded  from  making payment  for services  or items  that are paid  for directly  or indirectly  by another government entity. For inpatient claims where the PACE is the Payer, the covered PACE services are exclusions to the Medicare program per Section 1862 of the Social Security Act. If the PACE doesnt approve all the services due to disenrollment from the program, any Medicare  covered services not considered by the PACE program may be billed to the Medicare program. The provider should identify PACE in the group name and or the PACE taxonomy code 251T00000X in the group number.   When a PACE beneficiary is inpatient and has been disenrolled in PACE, the facility shall use Condition Code 35 to indicate the patient is a PACE eligible patient  that has disenrolled during an inpatient stay and  value code 42 with the amount of the PACE payment for the authorized days during enrollment in the PACE program.  130 - Coordination With the Quality Improvement Organization (QIO)  (Rev. 632, Issued: 07- 29-05, Effective: 01 -03-06, Implementation: 01- 03-06)  Instructions regarding hospital interactions with QIOs have been relocated as follows:    Instructions regarding HINNs are found in CMS Transmittal 594, which precedes the placement of full instructions in Chapter 30.   Instructions regarding hospital billing for cases involving QIO review can be found in Chapter 1, section 150.2.   Related instructions for QIOs can be found in the Medicare Quality Improvement Organization Manual, Publication 100-10, Chapter 7.  140 - Inpatient Rehabilitation Facility Prospective Payment System (IRF PPS)  (Rev. 2673, Issued: 03 -14-13, Effective: 04-22-13, Implementation: 04- 22-13)  Section 1886(j) of the Social Security Act (the Act) a uthorizes the implementation of a per discharge prosp ective  payment sy stem (PPS) for inp atient re habilitation hospita ls and inpatient re habilita tion units of a hospital now jointly referred to as inpatient re habilitation facilitie s (IRFs).  The IRF PPS is effective  for cost re porting periods beginning on or after January 1, 2002. IRF PPS payment rate s include a ll costs of fur nishing cov ered IRF service s (routine, ancillary, and capit al-related c osts)  other th an costs a ssociated with opera ting approved education al activitie s as defined in http://www.gpo.gov/fdsys/browse/collectionCfr.action?collectionCode=CFR, select the applicable year.  Then select Title 42, Chapter IV.  Select the TOC for Section 413 and choose 413.75 and 413.85 for educational activities.  You may also search the TOC for bad debts, and other costs not covered under the PPS .  Effective for cost reporting periods beginning on or af ter October 1, 2004, the Medi care Moder nization Act of 2003, Public La w 10 8-173, s ection 405(g) e stablish ed tha t CAHs m ay open re habilita tion distin ct part units.  The se IRFs will also be paid under the IRF PPS.   140.1 - Medicare IRF Classification Requirements  (Rev. 2673, Issued: 03 -14-13, Effective: 04 -22-13, Implementation: 04- 22-13)  Section 1886( j) of the Socia l Security Ac t (the Act) provide s for the impl ementation of a prospective  payment syste m (PPS) under Medicare for inpa tient hospita l services furnishe d by a reha bilitation hospital or a re habilita tion unit of  a hospita l (referred to as an inpa tient rehabilitation fac ility (I RF)).  S ection 1886(d )(1)(B)( ii) of the Act give s the Secretary the discretion to def ine an IRF.  The regulations at 42 CF R  412.25 and 412.29 specify the criteria for a provider to be excluded from the inpatient prospective payment system (IPPS) specified in 42 CFR 412.1(a)(1) and instead be paid under the IRF PPS.   A facility paid under the IRF PPS is always subject to verification that it continues to meet the criteria for exclusion from the IPPS.  The fiscal intermediary (FI) or the Part A/B Medicare Administrative Contractor (MAC) provides the Regional Office (RO)  with data for determining the classification status of each facility and the RO reviews the IRFs classification status each year. A determination that a facility either is or is not classified as an IRF takes effect only at the start of a facilitys cost  reporting period and applies to that entire cost reporting period.  If a facility fails to meet the criteria necessary to be paid under the IRF PPS, but meets the criteria to be paid under the IPPS, it may be paid under the IPPS.   If a patient is admitted to a facility that is being paid under the IRF PPS, but is discharged from the facility when it is no longer being paid under the IRF PPS, then payment to the facility will be made from the applicable payment system that is in effect for the facility at the time the patient is discharged.   IRFs that are being paid under the IRF PPS need not reapply to be classified for payment under the IRF PPS each year.  However,  under CMSs new attestation process, an IRF must self-attest to meeting all of the criteria, except for the criteria specified below in 140.1.1B -D, for being excluded from the IPPS and paid under the IRF PPS every 3 years.  The A/B MACs (A) are responsible for verifying annually that each IRF meets the criteria specified below in 140.1.1B -D.  IRFs are notified in writing by the ROs of the required self -attestation procedures and the time -frames for submitting the required self -attestation forms.  The ROs will also notify the IRFs in writing of any other procedures and requirements that apply to them. However, the A/B MACs (A)  are not responsible for monitoring or enforcing the IRF self-attestation procedures, which are the responsibility of the State agencies.   All IRFs must notify their A/B MACs (A)  and ROs in writing before making any changes to their operations (i.e. increasing their bed size or square footage, moving to a new location, changing ownership, merging, or other similar changes to the ownership or operations of the facility).   140.1.1 - Criteria That Must Be Met By  Inpatient Rehabilitation Facilities (Rev. 2673, Issued: 03 -14-13, Effective: 04 -22-13, Implementation: 04- 22-13)  An inpatient rehabilitation hospital or an inpatient rehabilitation unit of a hospital (otherwise referred to as an IRF) is excluded from the IPPS and is eligible for payment under the IRF PPS if it meets all of the criteria listed below.  Note that in ord er for an individual IRF claim to receive Medicare payment under the IRF PPS, it must meet all of the IRF coverage requirements in 42 CFR 412.622(a)(3), (4), and (5), as further clarified in Chapter 1, Section 110 of the Medicare Benefit Policy Manual (Pub . 100- 02.  A. - The IRF must have (or be part of a hospital that has) a provider agreement under 42 CFR Part 489 to participate in Medicare as a hospital.