Hot Topics

• Accountable Care Organizations
• FDA-CMS Parallel Review
• Diabetes Self-Management Training (DSMT) Provided in a Pharmacy Setting

AMA Coding Guidance

• Reporting Cardiothoracic Procedures Using CPT Category I and III Codes (33411, 33863, 33864, 0256T-0259T)
• 2011 Revisions to Modifiers 50, 76, 77, and 78
• Coding Consultation: Questions and Answers

Code Set Updates

• October 2011 APC Update

Hot Topics

Accountable Care Organizations

Medicare has historically paid doctors and hospitals on a fee for service that paid providers per test or per procedure. An Accountable Care Organization (ACO) is a network of providers such as primary care doctors, physician specialists, hospitals, and/or home care agencies that would share responsibility for that patient. The intent of Accountable Care Organizations (ACOs) is to give doctors and hospitals financial incentives to provide quality care to Medicare beneficiaries while keeping down costs.

On October 20, 2011, the Centers for Medicare and Medicaid Services (CMS) released the final rule for accountable care organizations (ACOs). In the final rule, Medicare outlined the two components of the ACO program which are the Shared Savings Program and the Advanced Payment Model. In response to an overwhelming number of public comments to the proposed rule, the final rule made a number of significant changes.

First, the final rule delays the start date. The original start date was to be January 2012. But the final rule announced that the program will “be established” by January 2012 with the initial agreements starting in April-July of 2012.

To be eligible to participate in the Shared Savings Program, ACOs must be accountable for at least 5,000 beneficiaries a year for each of the 3 years of the agreement. Originally, physicians in group practices, individual practitioner networks, and/or hospitals were the only providers that could sponsor an ACO. However, that list was expanded in the final rule to include collaborations between Rural Health Clinics and Federally Qualified Health Centers. To be eligible for the shared savings, ACO participants will be required to report on four quality measurement domains such as quality standards, care coordination, preventive health, and at-risk populations. The final rule reduced the number of quality measures that must be reported from sixty five to thirty three. In the first year, ACOs will only be required to report on these measures to receive payment. However, they will need to meet pay-for-performance standards on twenty five of the measures in the second year to receive payment, which will then be expanded to meeting thirty two measures in the third year.

The final rule made some changes to how Medicare beneficiaries would be assigned to ACOs, noting that "determination of whether an Accountable Care Organization was responsible for coordinating care for a beneficiary will be based on whether that person received most of their primary care services from the organization." But Medicare beneficiaries receiving care from providers participating in an Accountable Care Organization will retain their rights to see any physician or hospital that participates in the Medicare program. An ACO cannot restrict care or limit a Medicare beneficiary’s access to other physicians or providers.

To encourage participation in the Shared Savings Program, CMS announced that they would have money available to physicians, hospitals, and others for major capital investments under the Advanced Payment Model. The Advanced Payment Model was designed to support physician-owned and rural ACOs with upfront infrastructure investments. These providers will receive payments in advance that will then be recouped as these providers achieve savings. There are three ways provider groups may receive these payments:

• Upfront fixed payment
• Upfront payment based on the number of Medicare patients served
• Monthly payment based on the number of Medicare patients

The Advanced Payment Model is only available for physician-owned organizations, critical access hospitals, and rural providers participating in the Shared Savings Program. CMS created this model to determine if pre-paying a portion of future shared savings would increase participation in the Medicare Shared Savings Program.

On the same day as CMS released the final rule, several federal agencies issued additional guidance on antitrust laws. CMS has worked closely with the Department of Justice (DOJ) and the Federal Trade Commission (FTC) to provide guidance antitrust issues as they relate to ACOs.

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FDA-CMS Parallel Review

The Federal Drug Administration (FDA) and the Centers for Medicare and Medicaid Services (CMS) announced a memorandum of understanding (MOU) in the Federal Register in August of last year (Vol. 75, No. 154). The purpose of the MOU was to promote the sharing of information and expertise between the FDA and CMS. The goals of the collaboration are to explore ways to further enhance information sharing efforts through more efficient and robust inter-agency activities, promote efficient utilization of tools and expertise for product analysis, validation, and risk identification, and build infrastructure and processes that meet the common needs for evaluating the safety, efficacy, utilization, coverage, payment, and clinical benefit of drugs, biologics, and medical devices. The MOU allows for the sharing of FDA data submissions with CMS, and reciprocal sharing of Medicare data with the FDA. The MOU also includes protections from unauthorized public disclosure of trade secrets and other confidential commercial information that would be protected from public disclosure by Federal statutes.

The anticipated benefits of an FDA-CMS Parallel Review program include facilitating development of innovative new products as well increased efficiency in the Agencies' review processes. The need arose from the Agencies’ recognition that innovators have generally focused solely on obtaining FDA approval, only to later realize that Medicare payment may not automatically be forthcoming.

In follow-up to the MOU, the FDA and the CMS have established a pilot program for concurrent review of certain FDA premarket review submissions for medical devices and CMS national coverage determinations. The pilot program was announced in the Federal Register (Volume 76, Number 196) on Tuesday, October 11, 2011. By reducing the interval between FDA marketing approval and Medical coverage, this process will facilitate the development of innovative products and shorten the time it takes to bring these important products to patients.

The FDA and the CMS are soliciting nominations from sponsors of innovative device technologies to participate in a pilot program for concurrent review of certain FDA premarket review submissions and CMS national coverage determinations. The Agencies are now providing notice of the procedures for voluntary participation in the pilot program, as well as the guiding principles the Agencies intend to follow.

During its pilot phase, the agencies will offer to perform parallel review for up to five innovative devices per year. Appropriate candidates for the parallel review pilot are medical devices that meet one of the following criteria:

1. New technologies for which the sponsor/requester has a pre-investigational device exemption (IDE) or an approved IDE application designation.
2. New technologies that would require an original or supplemental application for premarket approval (PMA) or a petition for de novo review.
3. New technologies that fall within the scope of a Part A or Part B Medicare benefit category and are not subject to a national coverage decision (NCD).

The pilot program is voluntary and will not change the existing separate and distinct review standards for FDA device approval and CMS coverage determination. It is only available for medical device technologies that meet the above criteria.

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Diabetes Self-Management Training (DSMT) Provided in a Pharmacy Setting

Diabetes is a chronic condition whose treatment and outcomes are dependent on patients monitoring and managing their disease outside of the health care setting. Diabetes Self-Management Training (DSMT) is a collaborative process where patients learn skills needed to modify behaviors and successfully self-manage their disease and its related conditions.

In order for a Medicare patient to be eligible for DSMT, patient must meet one of the following diagnostic laboratory criterion:

Medicare covers an initial DSMT one-time benefit of ten hours of instruction in 12 consecutive months. Nine of the ten hours must be provided in group format, unless the beneficiary meets Medicare’s criteria for individualized DSMT. Otherwise, only one hour of the ten may be used for an individual visit. Patient is eligible for two hours of follow-up DSMT in the subsequent calendar years either in a group or individual setting. The HCPCS codes and allowable benefit are outlined below:

Historically, the typical and most popular practice setting for DSMT programs has been hospital-based outpatient departments. However, in recent years many outpatient hospital DSMT programs have closed due to:

• Inadequate insurance reimbursement (but in 2011 Medicare has significantly increased the DSMT payment rates).
• Incorrect claims processing, resulting in rejected and denied claims.
• Inadequate collection procedures for patient co-payments and deductibles.
• Ever-increasing costs.
• Lack of physician referrals (primarily due to inadequate marketing).
• High patient drop-out rate (the many reasons include class schedule and location that are inconvenient for patients and educators using ineffective compliance counseling rather than patient-friendly empowerment counseling).

This has resulted in a void in the marketplace. Educators have responded by opening up their own DSMT businesses, or implementing DSMT programs in non-hospital community-based settings such as independent and chain pharmacies which is emerging as one of the mainstream settings for DSMT programs.

Establishing a Diabetes Self-Management Training (DSMT) program within a pharmacy can be a rewarding both financially and professionally. By offering DSMT, the pharmacy may distinguish itself from the competition and increase its revenue. The pharmacy must be approved by Medicare as a certified DSMT entity provider in order to direct bill and receive reimbursement for DSMT services.

The pharmacy, not the pharmacist, bills Medicare Part B for the DSMT. However, the pharmacy can partner/contract with an RN or RD who wants to start their own DSMT business. This can be a win-win arrangement with the pharmacy billing on behalf of the entire program. If the pharmacy has never enrolled in Medicare as a DMEPOS supplier, the pharmacy must:

• First apply for and receive a National Provider Identification (NPI) number for the pharmacy. This is a 10-digit number that replaces the Medicare PIN, and must be used by the pharmacy on all HIPPA-covered transactions and claims with Medicare and all other healthcare plans. NPI application forms are online at the National Plan and Provider Enumeration System (NPPES) at www.nppes.cms.hhs.gov/NPPES
• Next the pharmacy completes AND submits the CMS-855S application (“Medicare Enrollment Application for Clinics, Group Practices, and Certain Other Suppliers”) to enroll in Medicare as a DMEPOS supplier
• If and when the pharmacy is a DMEPOS supplier, it must then complete the CMS-855B application (“Medicare Enrollment Application for Clinics, Group Practices, and Certain Other Suppliers”) to its local Part B carrier.
• Note: It is recommended that the completed CMS-855B application is sent along with the DSME/T program accreditation application, together, in one envelope, to the Part B carrier in order to decrease the risk of processing errors.

Incorporating DSME/T services into a community pharmacy can be both challenging and rewarding. A pharmacist can successfully navigate through the coverage and reimbursement requirements if they start the process early and takes it one step at a time. In summary, some of the many benefits of a pharmacy offering DSMT services include:

• Insurance reimbursement for DSMT services and patients’ co-payments.
• Increase in sales of many types of diabetes-related items
• Increase in patient satisfaction with the pharmacy, leading to increased store loyalty, leading to increase sales of other general merchandise.
• Increase in physician’s satisfaction with the pharmacy, leading to increase in patient referrals.

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AMA Coding Guidance