Hospital Finance and 340B Updates

September 28, 2020

Medicare Updates COVID-19 Add-on Admission Payment to Require Positive Lab Test

The Centers for Medicare & Medicaid Services (CMS) has issued a new requirement for Medicare inpatient claims to be eligible for the COVID-19 20% diagnosis-related group (DRG) add-on payment, effective for admissions on or after September 1, 2020. Under the revised guidance, a patient’s medical record must document a positive COVID-19 laboratory test performed within 14 days of admission. The laboratory test may be conducted prior to the admission (including by an entity other than the hospital) or by the hospital as part of the admission.

CMS may conduct post-payment medical reviews to confirm the presence of a positive COVID-19 laboratory test, and if no such test is documented in the medical record, the 20% Medicare Severity (MS)-DRG increase will be recouped. A hospital that does not have evidence of a positive COVID-19 laboratory test must inform their Medicare Administrative Contractor (MAC) to stop the 20% add-on payment from being applied to an individual claim. CMS has released instructions about how hospitals should notify the MACs when submitting a COVID-19 claim where there is no documentation of a positive lab test. Providers must enter a Billing Note NTE02 “No Pos Test” on the electronic claim 837I or a remark “No Pos Test” on a paper claim. National Government Service (NGS) has advised providers to hold these claims until the systems changes are complete to process them correctly. The new CMS requirement presents challenges for hospital compliance and carries significant financial repercussions, prompting the American Hospital Association (AHA) to send a letter asking for additional flexibility. The letter addresses the inaccuracies of COVID-19 testing, difficulty in getting test results from third-party laboratories, and contradiction with official ICD-10-CM coding guidance.

GNYHA notes that having a positive laboratory test is not necessary to “confirm” a COVID-19 diagnosis, as coding rules permit provider documentation of signs and symptoms to be sufficient to code COVID-19. According to the official coding guidance (emphasis added):

Code only a confirmed diagnosis of the 2019 novel coronavirus disease (COVID-19) as documented by the provider or documentation of a positive COVID-19 test result. For a confirmed diagnosis, assign code U07.1, COVID-19. This is an exception to the hospital inpatient guideline Section II, H. In this context, “confirmation” does not require documentation of a positive test result for COVID-19; the provider’s documentation that the individual has COVID-19 is sufficient.

If the provider documents “suspected,” “possible,” “probable,” or “inconclusive” COVID-19, do not assign code U07.1. Instead, code the signs and symptoms reported. See guideline I.C.1.g.1.g.

Therefore, providers should continue to adhere to the official coding guidance when coding claims, but until such time that CMS modifies its guidance to qualify for the 20% DRG bump, must follow the MAC notification requirements if a positive laboratory test is not documented in the patient’s medical record.

Periodic Interim Payment Hospitals

Hospitals receiving periodic interim payments (PIP) should be aware that the standard PIP calculation does not factor in the 20% DRG add-on. Therefore, PIP hospitals are not currently receiving the cash associated with the DRG increase, and under normal processes, the increase would be paid upon cost report settlement. In discussions with NGS, we understand that they are willing to work with hospitals on an individual basis to modify the PIP calculation to account for the 20% increase.

Medicare Extends Appropriate Use Criteria Testing Period

CMS has extended the educational and operations testing period for the Appropriate Use Criteria (AUC) program through 2021. The original testing period expired at the end of 2020. During this period, providers should setup and test their processes to ensure compliance with the AUC requirements when ordering and billing advanced imaging services for Medicare beneficiaries. Beginning January 1, 2022, Medicare claims for “advanced” imaging services (both professional and facility claims) submitted without the required information will not be paid.

The AUC was designed to ensure that Medicare beneficiaries are only receiving clinically appropriate advanced imaging services. Under the program, ordering physicians and practitioners must enter certain clinical information into an online clinical decision support system to determine whether the service adheres to the AUC. The physician order is then updated with the portal response and sent to the imaging provider so that the authorization information can be appended to the claim for the imaging service. CMS has established many new billing modifiers and Healthcare Common Procedure Coding System codes that must be programed into charging and claim systems. GNYHA appreciates the extension that will allow providers to continue AUC testing while still focusing on recovering from the COVID-19 public health emergency.

GNYHA and NGS conducted an educational webinar on AUC in July, and the presentation can be found here.

HRSA Issues New Registration & Recertification Requirements for 340B

The Health Resources and Services Administration (HRSA) has issued a 340B program update for those who either register as a new 340B provider or complete their annual recertification through the 340B Office of Pharmacy Affairs Information System (OPAIS). The OPAIS enhancements apply to all participating 340B providers, including hospitals. The changes were effective August 1, 2020.

Among the changes, the Medicaid billing question was modified from “Will you bill Medicaid for 340B drugs?” to “At this site, will the covered entity bill Medicaid fee-for-service for drugs purchased at 340B prices?”. Those answering yes must submit their National Provider Identifier and/or their Medicaid provider number for each state Medicaid program they plan to bill.

Registration instructions are available here.

Pharmaceutical Companies Conducting 340B Validation

Pharmaceutical manufacturers are contacting GNYHA members participating in the 340B program and demanding claims data to conduct their own internal 340B program integrity validation. The reason for the request centers on the belief that these pharmaceutical companies are providing duplicate discounts, one through the 340B program and a second through state Medicaid programs. These manufacturers have threatened to limit or exclude members from certain 340B drugs if the requested information is not provided. The AHA has sent letters to Merck, Eli Lilly, Sanofi, Novartis, and AstraZeneca to “cease this conduct immediately and to work to ensure that 340B drugs are available and accessible to vulnerable communities and populations. 340B hospitals serve communities with a high volume of low-income patients. For a drug company to jeopardize hospitals’ ability to care for patients who are already under severe economic, emotional and health-related strain during a public health crisis is unconscionable.” In July, the AHA sent a letter to Health and Human Services (HHS) Secretary Alex Azar seeking to stop these manufacturers from limiting or excluding providers from 340B drugs.

On September 14, Representatives David McKinley (R-WV), Diane DeGette (D-CO), Greg Gianforte (R-MT), Peter Welch (D-VT), Dusty Johnson (R-SD), and Doris Matsui (D-CA) circulated a “Dear Colleague” letter in the House to protect the 340B program.

The letter, which received 246 signatures, urges HHS Secretary Azar to stop pharmaceutical companies from denying or limiting the distribution of certain 340B drugs to hospitals and health systems. The letter was written in response to several drug companies that recently announced they will no longer charge the 340B discount price for some or all of their drugs when the drugs are dispensed by community-based pharmacies—which is a violation of 340B statutory requirements. Other manufacturers have sent requests to covered entities demanding claims data that go beyond the scope of the 340B statute.

GNYHA advocated for this letter on Capitol Hill. We thank our members for their outreach to their elected representatives on the 340B issue.