Health News Update

A comprehensive resource for professional healthcare information and solutions

In This Issue
Welcome to Health News Update

We have updated and consolidated our Health NetNews emails into one of the most comprehensive sources of professional health care information and solutions. Covering important monthly developments in the areas of Health Care Compliance, Medicare and Medicaid Reimbursement, Coding, Health Reform, and Food and Drug Law, we hope this resource provides useful content and features.

On the Front Lines
Overpayment final rule failed to achieve actuarial equivalence

By Sheila Lynch-Afryl, J.D., M.A.

A federal district court invalidated CMS' 2014 overpayment Final rule, finding that it violates the statutory mandate of "actuarial equivalence" between payments under the Medicare Advantage (MA) program and traditional Medicare. In addition, the Final rule constituted a departure from prior policy that CMS failed to adequately explain.

Actuarial equivalence. Soc. Sec. Act §1853(a)(1)(C) requires CMS to adjust the payment amount to MA insurers for such risk factors as age, disability status, gender, and institutional status to "ensure actuarial equivalence" (see also 42 C.F.R. §422.308(c)(1)). In an attempt to achieve actuarial equivalence, CMS uses risk coefficients from traditional Medicare, which rely entirely on diagnosis codes submitted by providers. CMS does not audit these diagnosis codes, which are irrelevant to payment under traditional Medicare.

In 2014, CMS issued a Final rule (79 FR 29844, May 23, 2014) implementing §6402(a) of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), which imposed a requirement on MA insurers to report and return overpayments within 60 days. Under 42 C.F.R. §422.326, as added by the Final rule, any diagnostic code that is inadequately documented results in an overpayment. The rule, however, did not adopt an adjuster to recognize that the sources of data are not compatible—unaudited traditional Medicare records are used to determine payments to MA insurers and audited medical charts are used to determine overpayments. The rule, argued insurers, resulted in a false appearance of better health among MA beneficiaries compared to traditional beneficiaries and underpayments to MA insurers.

The court concluded that the Final rule failed to achieve actuarial equivalence. CMS pays MA insurers at rates based on flawed data from traditional Medicare. The effect of the 2014 Final rule is that MA insurers are paid less to provide the same coverage than CMS pays for comparable patients: "while CMS pays for all diagnosis codes, erroneous or not, submitted to traditional Medicare, it will pay less for Medicare Advantage coverage because essentially no errors would be reimbursed."

Prior policies. The 2014 overpayment rule also deviated from prior CMS policies without justification. For example, CMS previously applied "fee-for-service" adjusters in the Risk Adjustment Data Validation (RADV) audit process to account for different data sources. In addition, two notices from CMS recognized the differences in data for traditional Medicare and MA coverage. CMS, therefore, was arbitrary and capricious in adopting the 2014 overpayment rule without explaining its departure from prior policy.

FCA. The Final rule was invalidated on the additional ground that it could punish "honest mistakes" or incorrect claims submitted through mere negligence. The False Claims Act (FCA) and the ACA require actual knowledge, deliberate ignorance, or reckless disregard before liability can be found. However, the Final rule—which provides an overpayment is identified when the insurer determines "or should have determined through the exercise of reasonable diligence" that it received an overpayment—applies a negligence standard for purposes of FCA liability. UnitedHealthcare Insurance Company v. Azar, No. 16-157 (RMC), September 7, 2018

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Health system fails in attempt to re-seal physician compensation arrangements

By Susan Smith, J.D., M.A.

A health system's motion to re-seal certain exhibits that involved physician compensation arrangements included in a qui tam complaint failed because it did not specifically identify which information in each page of each exhibit contained trade secrets and why its confidentiality interest outweighed the public's interest in access to court records. Because the health system failed to provide a sufficient showing for the court to make the required findings of fact, the court issued an order denying the health system's motion without prejudice allowing the health system to re-file the motion addressing the issues as described in the order.

The complaint. The relator's complaint alleged that the health system violated the Stark Law (42 U.S.C. §1395nn) by paying physicians illegal referral fees and financial incentives under compensation arrangements that exceeded fair market value and were commercially unreasonable in the absence of referrals. The relator alleged that the health system paid excessive compensation to neurosurgeons, cardiologists, and pulmonologists among other groups of physicians and then submitted false claims related to referrals from such specialists to Medicare and Medicaid in violation to the False Claims Act (FCA) (31 U.S.C. §3729).

The motion to re-seal. After the complaint and amended complaint, including all exhibits attached were unsealed and made publicly available, the health system filed its motion to permanently re-seal certain exhibits attached to the complaint and amended complaint claiming that the exhibits contain "trade secrets" as defined by federal and Florida law. The specified exhibits contained details of physician compensation arrangements between the health system and medical providers, specific compensation amounts paid to certain providers, and details regarding provider group compensation amounts allegedly unique to the health system. The health system filed its emergency motion pursuant to Rule 5.2 of the Federal Rules of Civil Procedure and a provision of the Florida Uniform Trade Secrets Act (FUTSA) (Fla. Stat. §688.006). The motion included a list of the exhibits sought to be re-sealed, specific page numbers and a general description of the items as a group, but not individually. The health system requested that the information be sealed permanently and the relator be required to re-file the exhibits in question in redacted form.

Court's rule for motion to seal. The relator argued that the health system failed to comply with the requirements of Local Rule 1.09 of the Middle District of Florida and failed to meet its burden to show re-sealing the documents was appropriate. Under the requirements of Rule 1.09(a), the title must include the words, "Motion to Seal" and the motion must include: (1) an identification and description of each item proposed for sealing; (2) the reason that filing each item is necessary; (3) the reason that sealing each item is necessary; (4) the reason that a means other than sealing is unavailable or unsatisfactory to preserve the interest advanced by the movant in support of the seal; (5) a statement of the proposed duration of the seal; and (6) a memorandum of the legal authority supporting the seal. The health system argued that it met the requirements of Rule 1.09(b), which is a filing to re-seal under a statute authorizing filing under seal and requires the citation of the statute, identification of the items to be sealed, a proposed duration of the seal, and a statement establishing the items to be sealed are covered under the identified authorizing statute.

The court concluded that the health system failed to comply with the requirements of Rule 1.09(a) and failed to provide sufficient detail for the court to make the findings of fact about the appropriateness of sealing each item requested to be sealed. The court further determined the health system failed to meet the requirements of Rule 1.09(b) because the action does not fall under any section of FUTSA.

Appropriateness of sealing the documents. The health system contended that its compensation information is confidential and exempt from public disclosure laws. In determining whether to seal court filings and other materials, the court noted that it must balance two competing interests: a party's interest in keeping the information confidential and the public's legitimate interest in the subject matter and conduct of the proceedings even when the material sought to be sealed is classified as trade secrets. Although the court found that the information contained in the exhibits would appear to qualify for trade secret protection, the health system did not provide detailed identification and description of the items in each cited exhibit and each page that it asserts are trade secrets and why they are trade secrets; therefore, the court could not make the factual findings required by the Eleventh Circuit as to each item to support the re-sealing. In addition, the court concluded that public has a legitimate interest in exhibits as the information is highly probative evidence as it relates to the relator's allegations that the health system paid physicians under compensation arrangements that exceeded fair market value and were commercially unreasonable in the absence of referrals. U.S. ex rel. D'Anna v. Lee Memorial Health System, No. 2:14-cv-437-FtM-38CM, September 19, 2018

OIG Advisory Opinion: Warranty program for knee, hip implants not in violation of AKS

By Wolters Kluwer Editorial Staff

The HHS Office of Inspector General (OIG) would not pursue action against the manufacturer of a suite of surgical products if it implemented a proposed a warranty program that would refund hospitals the purchase price of the product suite if a patient was readmitted to the hospital post-surgery for a surgical site infection or for a revision of the implanted knee or hip system. The OIG determined that the proposed warranty program provided enough safeguards and transparency to ensure that there would be little risk of fraud or abuse and would not generate prohibited remuneration under the anti-kickback statute (AKS) (42 U.S.C. §1320a-7b).

Warranty program. The manufacturer sells surgical Product Suites, which consist of a total knee or total hip implant, a wound therapy system, and an antimicrobial dressing. The manufacturer asserts that, used in combination, these products are designed to reduce the incidence of infection-related readmissions and required revisions. The manufacturer proposed a warranty program that would offer a refund to the hospital for the aggregate purchase price for all products in the product suite if any one of them failed to perform as expected. To qualify for a refund a patient must have had joint replacement surgery as an inpatient using the product suite in a manner consistent with the instructions and must have been readmitted to the same hospital within 90 days due to a surgical site infection or for a revision of the implanted knee or hip system.

Inducement. The OIG found that because all three products in the product suite would be covered by one Medicare payment to the hospital, hospitals would be encouraged to find the best value and clinical outcomes for their patients, therefore reducing the risk of over-utilization and inappropriate use of the products and diminishing the concerns of increased costs to the Medicare program. Additionally, the manufacturer certified that the warranty program would contain no exclusivity requirements, nor would it include any quotas, minimums, or any other eligibility criteria tied to the volume or value of referrals. Hospitals would not be required to make any specific communications to physicians performing surgeries encouraging or requiring use of the product suites. Therefore the program would not impede the hospital's ability to make purchasing decision that result in both the best value and the best clinical outcomes for their patients, nor would it require coercive communications from a hospital to physicians regarding the products.

Effects on federal health care programs. The manufacturer would put hospitals on notice of their obligations o appropriately report any refund they obtained through the warranty program by complying with the seller obligations under the warranties safe harbor, thereby increasing transparency of the program and diminishing the concern of increased costs to Federal health care programs. The hospitals would be required to certify that the physicians performing the surgeries remain responsible for determining whether the product suite is medically necessary and clinically appropriate for a particular patient, and that the products were used in a manner consistent with each products instructions. These requirements decrease the risk that the products would be used in a clinically inappropriate or medically unnecessary manner.

Finally, if the proposed warranty program works as intended and reduces the incidence of readmissions following joint replacement surgery due either to a surgical site infection or to a revision of the implanted knee or hip system, patients and Federal health care programs would benefit. The OIG was reluctant to chill innovative and potentially beneficial arrangements.

Decision. The OIG determined that the warranties safe harbor exception to the AKS clearly refers to one item, not a bundle of items, and did not apply to the proposed warranty policy. However, after reviewing the totality of the facts and circumstances presented by the manufacturers, the OIG concluded that the proposed warranty program poses a sufficiently low risk of fraud and abuse under the AKS and decided it would not impose administrative sanctions. OIG Advisory Opinion, No. 18-10, September 17, 2018

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Court can review PRRB 'good cause' determination, but lacks jurisdiction to compel reopening

By Wolters Kluwer Editorial Staff

A determination by the Provider Reimbursement Review Board (PRRB) that a provider did not show "good cause" to merit an extension to file an appeal of a Medicare administrative contractor's (MAC) reimbursement decisions was reviewable by a federal district court in light of the language of the applicable law and the qualification of the determination as a "final decision" by the PRRB, the federal district court for the District of Columbia held. However, the court concluded that PRRB's decision was not arbitrary or capricious and that there was no other legal avenue to compel the MAC to reopen its decisions.

Reimbursement and reopening. Oakland Physicians Medical Center (OPMC) operates an acute-care inpatient hospital, Pontiac General Hospital, in Michigan, and runs a family medicine residency program. The residency program is eligible for Medicare reimbursement of direct and indirect costs, which the OPMC had received for years. However, in 2014, the MAC reviewing OPMC's reimbursements determined that there had been overpayments made to the program for fiscal years (FY) 2010 and 2011 and issued two Notices of Program Reimbursement (NPR) for those years. OPMC contended that the MAC made an error in the 2009 NPR with respect to the regulations governing resident education reimbursement, which affected the 2010 and 2011 reimbursements. OPMC requested the MAC reopen the 2009 NPR and correct the reimbursement error, which the MAC accepted and began reviewing. OPMC also sought review of the 2010 and 2011 NPRs to correct for the flow-through in those years.

The MAC agreed to reopen those NPRs, but after the 180-day appeal period passed, the MAC informed OPMC that it would close the reopening requests as it had discovered that OPMC had entered into a settlement agreement with CMS in which OPMC agreed not to request reopening of three reports—including the 2009 FY report. OPMC appealed to the PRRB with respect to the 2010 and 2011 NPRs, asserting that it had "good cause" to file its appeal after the 180-day period because the MAC changed its decision after the filing period had passed. The PRRB disagreed that OPMC had good cause and closed the appeal. OPMC filed the present four-count cause of action in federal district court.

Reviewability of PRRB decisions. HHS challenged the reviewability of the PRRB decision, asserting that the good-cause extension denial cannot be review by the federal court, and that the PRRB's denial did not constitute a "final" decision subject to review. First, the court concluded it could review the PRRB decision because the exception to judicial review is extremely limited to circumstances when there is no applicable law or "meaningful standard" to measure discretion. The nature of the PRRB's action and the language of the "good cause" regulation—that "the PRRB may find good cause to extend the time limit"—show that those circumstances did not exist in the case at bar. The choice of the word "may" shows that the Board has discretion and the regulation provides sufficient guidance as to what "good cause" means, the court explained. Additionally, the determination of the PRRB was "final" under applicable law. The denial of the good-cause extension was final as there had been no subsequent action by the Secretary.

Merit of PRRB decision. The court also concluded that the PRRB's decision was not arbitrary or capricious. OPMC challenged that the PRRB's determination was not based on sufficient evidence and was contrary to law. The court explained that the "substantial evidence" requirement does not mandate a volume of evidence, and the proof that the OPMC knew of the 2009 NPR discrepancy well before it filed an appeal, the court found. Moreover, OPMC did not challenge the limitation that there be "extraordinary circumstances beyond its control" to merit excuse for not filing in time and did not provide any evidence to show that it was subject to such circumstances. Accordingly, the evidentiary record supported the Board decision. With respect to alleged legal error, OPMC's position that the PRRB failed to recognize it had discretion to allow a filing extension for good cause was not supported by the record, which showed that the Board applied the good-cause standard to the facts presented. Thus, the PRRB's actions were not contrary to the applicable law. Because reopen requests do not toll an appeal deadline, the court observed that OPMC could have filed a protective appeal to preserve its right to Board review. Therefore, the Secretary's summary judgment motion was granted on this issue.

Compelling reopening. The court determined that it did not have jurisdiction to compel the MAC to reopen the NPRs and correct the error. OPMC argued, in the alternative, that the district court could compel the MAC either under the Medicare statute, through a writ of mandamus, or under the federal question jurisdiction of the court. However, there is no legal support that grant the court jurisdiction to do so, as judicial review does not encompass decisions made by a MAC. The court stated that the U.S. Supreme Court has plainly established that neither mandamus nor the federal-question statute provides a basis for judicial review of a MAC's decision not to reopen. Therefore, the court does not have jurisdiction to review the MAC's decision. Oakland Physicians Medical Center v. Azar, Case No. 17-cv-00392 (APM), September 13, 2018

Improving the risk adjustment model to reflect beneficiaries with functional limitations

By Susan Smith, J.D., M.A.

Based on the sample of beneficiaries analyzed, the Medicare Advantage (MA) risk adjustment model underestimated spending for beneficiaries with functional imitations and overestimated spending for those beneficiaries that did not have such limitation, according to a General Accountability Office (GAO) report. The risk adjustment model estimates health care spending based on beneficiary demographic characteristics and clinical diagnoses but does not account for functional status, which is the ability to perform routine daily activities. GAO concluded that risk adjustment accuracy could be improved by accounting for functional status to reduce any financial disadvantages that may exist for plans that enroll beneficiaries with functional limitations. The extent of improvement would depend on factors such as how functional status is measured as well as how well data is collected and incorporated into the model.

Risk adjustment. CMS pays MA plans a monthly amount per beneficiary that is adjusted to reflect beneficiary health status, the risk adjustment. The risk adjustment process pays more to MA plans for beneficiaries in poorer health to compensate for the higher spending by those plans and pays less to plans for healthier beneficiaries due to lower expected spending. CMS makes an additional payment adjustment, the frailty adjustment, for a small number of plans such as the Program for All-Inclusive Care for the Elderly (PACE) organizations and certain special needs plans (SNP) in which functional limitations are more common than in other plans.

The purpose of the report. As required by the 21st Century Cures Act (P.L.114-255), the GAO studied: (1) the accuracy of the current CMS risk adjustment model for beneficiaries with functional limitations and the potential benefits of accounting for functional status in MA risk adjustment; and (2) the potential challenges of accounting for functional status in risk adjustment. The GAO analyzed 2014 data on diagnoses and survey data on functional status for a sample of community-residing fee-for service (FFS) beneficiaries to estimate 2015 spending based on CMS's current risk adjustment model. Then it compared those estimates to actual 2015 total health care spending. The GAO also reviewed CMS documentation as well as guidance documents and interviewed stakeholders, industry experts, and CMS officials.

Findings. The GAO found that the current risk adjustment model for community-residing beneficiaries underestimated annual FFS spending of beneficiaries with functional limitations by about $226 (2 percent) on average per beneficiary and overestimated spending for those without functional limitations in the sample by about $995 (14 percent). As a result, MA plans may be at a financial disadvantage when they enroll and care for beneficiaries with functional limitations. Functional limitations are most common among beneficiaries in PACE organizations, which enroll beneficiaries who require a level of care normally provided in a nursing home. The percentage of beneficiaries in MA and FFS with functional limitations, however, was generally similar. The estimated percentage of beneficiaries with functional limitations in 2016 was 37 percent in FFS and 40 percent in MA. The GAO noted that while accounting for functional status in risk adjustment may result in different payments to individual plans, it would not likely result in substantial changes to overall payments to MA plans in the aggregate.

Proposals to address the incorporation of functional status. In 2015, CMS collected functional status information for up to 24 percent (13.4 million) of Medicare beneficiaries from post-acute care settings, outpatient therapy settings, and surveys. Methods of collecting functional status information differed by mode of administration, type of information collected, and frequency of collection. To improve the risk adjustment model, the collection of functional status information would have to be expanded significantly to account for functional status in the MA risk adjustment model. A less intensive way from a data collection standpoint to incorporate functional status into the risk adjustment process would be to expand the frailty adjustment to all MA plans because the frailty adjustment involves using self-reported survey data for a sample of beneficiaries in each plan to adjust beneficiaries' risk scores.

Challenges. The substantial challenges that CMS and other stakeholders could encounter if the risk adjustment model were revised include:

  • information is not readily available because about three-fourths of beneficiaries do not receive health care in settings where function status information is routinely collected;
  • expanding collection of such information could be resource intensive for CMS, plans, health care providers, and some beneficiaries;
  • establishing consensus about the best way to measure functional status for risk adjustment; and
  • the financial incentive for MA plans to identify functional limitations more completely than providers in FFS would require the risk assessment process to account for inappropriately high payments to MA plans.

Challenges also present themselves if the frailty adjustment were expanded. Such challenges include limits to existing level of survey data collection, limits to survey data accuracy, updating benchmarks, and timing of bid submission. GAO Report, GAO-18-588, September 10, 2018

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AMA provides descriptions of new CPT® codes, responds to FAQs

Edited by the Wolters Kluwer Editorial Staff

In addition to responses to frequently asked questions, the September 2018 issue of the American Medical Association's CPT®) included articles identifying new procedure codes for general behavioral health integration care management, thracoscopic and or laparoscopic esophagectomy procedures, minimally invasive glaucoma surgery, and magnetic resonance imaging (MRI) with transrectal ultrasound fusion–guided prostate biopsy.

General behavioral health integration care management. Three new subsections were created within the Evaluation and Management (E/M) Services section for 2018, Current Procedural Terminology (CPT®): (1) Cognitive Assessment and Care Plan Services (99483); (2) General Behavioral Health Integration Care Management (99484); and (3) Psychiatric Collaborative Care Management Services (99492, 99493, 99494). The new General Behavioral Health Integration Care Management subsection and new code 99484, which is used to report psychiatric care services under the collaborative care model (CoCM) are discussed.

Code 99483 is used for care management services for behavioral health conditions that provide at least 20 minutes of clinical staff time, are directed by a physician or other qualified health care professional, per calendar month and include the following elements: (1) initial assessment or follow-up monitoring, including the use of applicable validated rating scales; (2) behavioral health care planning in relation to behavioral/psychiatric health problems, including revision for patients who are not progressing or whose status changes; (3) facilitating and coordinating treatment such as psychotherapy, pharmacotherapy, counseling and/or psychiatric consultation; and (4) continuity of care with a designated member of the care team.

Code 99484 includes several of the core elements of the evidence-based collaborative care model described in codes 99492, 99493, and 99494, including the use of validated rating scales to monitor progress, facilitation and coordination of other services as needed, and continuity of care with a designated member of the care team. Code 99484 may be reported instead of codes 99492-99494 in those months in which care-management time fails to meet the established thresholds of codes 99492-99494, but meets at least 20 minutes of time during the calendar month. Code 99484 may be reported in any setting except inpatient or observation, provided the reporting physician/QHP has an established relationship with the patient and clinical staff, and the clinical staff is available for face-to-face services. Clinical-staff time spent coordinating care with emergency department may not be reported for time spent while the patient is inpatient or in observation status.

Thoracoscopic and/or laparoscopic esophagectomy procedures. Advances in technology and techniques have allowed esophagectomy to be performed using combinations of laparoscopic and thoracoscopic techniques for all or large portions of the procedure. Esophagectomy procedures performed using laparoscopic and thoracoscopic techniques represent different physician work and resources than if the procedures are performed using only an open approach. For 2018, three new CPT® codes have been added to the Digestive System/Esophagus subsection of the CPT 2018 code set to identify esophagectomy procedures performed utilizing laparoscopic and thoracoscopic approaches. In addition, the descriptor for code 43112 was revised to provide additional clarity.

  • Code 43112: Total or near total esophagectomy, with thoracotomy; with pharyngogastrostomy or cervical esophagogastrostomy, with or without pyloroplasty (ie, McKeown esophagectomy or tri-incisional esophagectomy)
  • Code 43286: Esophagectomy, total or near total, with laparoscopic mobilization of the abdominal and mediastinal esophagus and proximal gastrectomy, with laparoscopic pyloric drainage procedure if performed, with open cervical pharyngogastrostomy or esophagogastrostomy (ie, laparoscopic transhiatal esophagectomy)
  • Code 43287:Esophagectomy, distal two-thirds, with laparoscopic mobilization of the abdominal and lower mediastinal esophagus and proximal gastrectomy, with laparoscopic pyloric drainage procedure if performed, with separate thoracoscopic mobilization of the middle and upper mediastinal esophagus and thoracic esophagogastrostomy (ie, laparoscopic thoracoscopic esophagectomy, Ivor Lewis esophagectomy)
  • Code 43288: Esophagectomy, total or near total, with thoracoscopic mobilization of the upper, middle, and lower mediastinal esophagus, with separate laparoscopic proximal gastrectomy, with laparoscopic pyloric drainage procedure if performed, with open cervical pharyngogastrostomy or esophagogastrostomy (ie, thoracoscopic, laparoscopic and cervical incision esophagectomy, McKeown esophagectomy, tri-incisional esophagectomy)

When codes 43287 and 42388 are reported, do not report code 32551.

Minimally invasive glaucoma surgery. A number of minimally invasive surgical procedures for the treatment of glaucoma have been developed to improve patient outcomes and lessen side effects from glaucoma surgery. As a group, these procedures are termed minimally invasive glaucoma surgery (MIGS). In these procedures, the surgeon either inserts small stents or dissects the trabecular meshwork open to drain aqueous fluid from the eye, thereby, lowering the intraocular pressure and reducing the chance of damage to the eye and blindness from glaucoma. This article provides an overview of the MIGS procedures that reflect typical clinical situations for which the appropriate Current CPT® codes 65820, 66183, 0191T, 0376T, 0253T, 0474T, 0449T, and 0450T should be reported.

Coding MIGS can be complex, however, by considering the following four questions, the coder or physician can select the correct code to report:

  • Is the surgical approach external or internal?
  • Is there an implant and was it retained in the eye?
  • Is a reservoir part of the implant?
  • Where is the drainage end of the stent positioned?

The external surgical approach is performed through the conjunctiva; whereas, the internal surgical approach is performed through the cornea, passing through the anterior chamber to reach the trabecular meshwork on the opposite side of the eye. If an external approach was used and a plate reservoir was placed, the procedure is not a MIGS service. If no plate reservoir was placed, then the procedure is a MIGS service. Finally, after the stent is inserted through the trabecular meshwork, does the stent extend and drain just through the trabecular meshwork, into the supraciliary space, into the suprachoroidal space, into the sub-Tenon space, or into the sub-conjunctival space (listed in order of degree of penetration through the layers of the eye)?

MRI with transrectal ultrasound fusion–guided prostate biopsy. The American Urological Association has addressed the appropriate reporting for a new technique (MRI-TRUS fusion-guided prostate biopsy) for performing prostate biopsy(ies) that uses pre-biopsy MRI, also known as multiparametric MRI, that are uploaded to a computer with special software that fuses the MRI images to real-time transrectal ultrasound (TRUS) images to guide the prostate biopsy. There is no single CPT code for this new technique. Currently, three CPT codes can be reported for a standard TRUS-guided prostate biopsy (ie, without MRI fusion-guided technology): 55700 in the Male System section (Biopsy, prostate; needle or punch, single or multiple, any approach); and 76872 (Ultrasound, transrectal) and 76942 in the Radiology section (Ultrasonic guidance for needle placement (eg, biopsy, aspiration, injection, localization device), imaging supervision and interpretation).

The procedure represented by code 76872 is performed as a diagnostic service to evaluate the size and symmetry of the prostate and/or to look for suspicious lesions. The procedures described by codes 55700 and 76942 are performed together to obtain prostate tissue for pathologic evaluation to determine if prostate cancer is present. Additional documentation is necessary to report codes 76872 and 76942, including a permanent image and written report in the medical record. A written report for the procedure represented by code 76942 must include a description of the prostate biopsy procedure. The diagnostic ultrasound (76872) should be a separate report, but the prostate biopsy and ultrasonic guidance for the biopsy can be combined into a single report. Note that in July 2016, CMS determined that codes 76872 and 76942 can no longer be reported together for Medicare patients due to a Medicare National Correct Coding Initiative (NCCI) bundling edit.

When an MRI is performed at a separate patient encounter, it is reported separately with code 72195, (Magnetic resonance (eg, proton) imaging, pelvis; without contrast material(s)); 72196, (Magnetic resonance (eg, proton) imaging, pelvis; with contrast material(s)); or 72197, (Magnetic resonance (eg, proton) imaging, pelvis; without contrast material(s), followed by contrast material(s) and further sequences). The selected choice of the MRI code is based on whether contrast material is administered. An MRI-TRUS fusion-guided prostate biopsy may require additional physician work compared to that of a standard TRUS-guided prostate biopsy, including building the three-dimensional model of the prostate via ultrasound, performing the targeted biopsies using the MRI image of the targets as a guide, or performing virtual biopsies in order to limit the number of real biopsies needed to hit the targets and complete a good set of template random biopsies.

There is no specific CPT code to report the software fusion of ultrasound and MRI images to identify the biopsy target(s). Given this, the correct CPT code to report this procedure is either code 76999, Unlisted ultrasound procedure (eg, diagnostic, interventional), or 76498, Unlisted magnetic resonance procedure, (eg, diagnostic, interventional), for the additional work of fusing MRI and ultrasound images. Currently, only the codes for a standard TRUS-guided biopsy based on Medicare or commercial payers' guidance may be reported. Contact your third-party payer for specific reporting needs of MRI and ultrasound imaging fusion. Additional information is also available at

Frequently Asked Questions

Surgery: Musculoskeletal System

Question: A middle-aged patient presents with spinal stenosis, post-laminectomy syndrome, radiculopathy, and degenerative joint disease, which is causing a spinal deformity, such as secondary scoliosis. The surgeon performs posterior fusions of T10-S1 with additional interbody fusions at L3/4, L4/5 and L5/S1. What are the appropriate Current Procedural Terminology (CPT®) code(s) to report for this operation?

Answer: If the indication for surgery is deformity, report code 22633, Arthrodesis, combined posterior or posterolateral technique with posterior interbody technique including laminectomy and/or discectomy sufficient to prepare interspace (other than for decompression), single interspace and segment; lumbar; two units of code 22634, Arthrodesis, combined posterior or posterolateral technique with posterior interbody technique including laminectomy and/or discectomy sufficient to prepare interspace (other than for decompression), single interspace and segment; each additional interspace and segment (List separately in addition to code for primary procedure); code 22802, Arthrodesis, posterior, for spinal deformity, with or without cast; 7 to 12 vertebral segments; code 22843, Posterior segmental instrumentation (eg, pedicle fixation, dual rods with multiple hooks and sublaminar wires); 7 to 12 vertebral segments (List separately in addition to code for primary procedure); and three units of code 22853, Insertion of interbody biomechanical device(s) (eg, synthetic cage, mesh) with integral anterior instrumentation for device anchoring (eg, screws, flanges), when performed, to intervertebral disc space in conjunction with interbody arthrodesis, each interspace (List separately in addition to code for primary procedure). In addition, bone graft code(s) (eg, 20900-20938), may also be reported as appropriate codes. Supporting documentation (eg, procedure report) should be submitted with the claim to provide an adequate description of the degree of deformity.

Surgery: Cardiovascular System

Question: Which CPT code should be reported when a physician performs a temporary arterial balloon occlusion during a C-section or subsequent hysterectomy?

Answer: If the temporary occlusion is performed prophylactically before the C-section or hysterectomy, then code 37242, Vascular embolization or occlusion, inclusive of all radiological supervision and interpretation, intraprocedural roadmapping, and imaging guidance necessary to complete the intervention; arterial, other than hemorrhage or tumor (eg, congenital or acquired arterial malformations, arteriovenous malformations, arteriovenous fistulas, aneurysms, pseudoaneurysms), should be reported with modifier 52, Reduced Services, appended. If the temporary occlusion is performed in response to C-section hemorrhage, then code 37244, Vascular embolization or occlusion, inclusive of all radiological supervision and interpretation, intraprocedural roadmapping, and imaging guidance necessary to complete the intervention; for arterial or venous hemorrhage or lymphatic extravasation, with modifier 52 appended, should be reported. Modifier 52 is appended because a temporary occlusion does not require the extent of intraservice or postservice work as would permanent occlusion (ie, embolization). Finally, if temporary occlusion does not control the hemorrhage and permanent embolization is required, then code 37244 would be reported only once without a modifier for both the temporary and permanent occlusion.

Question: Is code 43870 the correct code to report when a patient presents with a gastrocutaneous fistula and the surgeon places a clip endoscopically to close it?

Answer: No, it would not be appropriate to report code 43870, Closure of gastrostomy, surgical, because this code applies to an open closure of a gastrostomy procedure. There is no specific CPT code to describe the performance of an endoscopic closure of gastrocutaneous fistula; therefore, code 43999, Unlisted procedure, stomach, should be reported. When reporting an unlisted code to describe a procedure or service, it is necessary to submit supporting documentation (eg, procedure report) along with the claim to provide an adequate description of the nature, extent, and need for the procedure; and the time, effort, and equipment necessary to provide the service. Ideally, one or two comparator codes may be referenced to provide context for valuation of the unlisted code.

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Coverage gains attributable to ACA, Medicaid at risk due to policy changes

By Wolters Kluwer Editorial Staff

Between 2013 and 2016, the first three years of Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) implementation, 18.5 million nonelderly Americans between the ages of 0 to 64 who were previously without health insurance gained coverage. Because coverage gains under the ACA were high in both Medicaid expansion states and nonexpansion states, the Urban Institute (UI) found that changes made by the Trump Administration are likely to adversely affect non-expansion states with large gains in private nongroup coverage.

Data and methods. UI analyzed data from 2013 and 2016 American Community Survey (ACS) Integrated Public Use Microdata Sample files. The U.S. Census Bureau conducts the ACS through the mail with in-person follow-up for non-respondents. The ACS boasts the largest sample size of any survey collecting health insurance information, with about 3 million respondents per year. For its study, UI focused on the civilian, noninstitutionalized, nonelderly population aged 0 to 64, as this population is the most likely to be affected by the ACA.

Increased coverage under the ACA. The ACA included an expansion of Medicaid eligibility in 31 states and the District of Columbia beginning July 1, 2016. It also made available subsidized coverage through the health insurance marketplaces. The UI found that of the 18.5 million who gained coverage between 2013 and 2016, 10.9 million had Medicaid coverage and 6.3 million more had private non-group coverage, such as that offered in the marketplaces. Additionally, the UI found that 3.2 million more nonelderly Americans had employer-sponsored coverage in 2016 than in 2013, which it attributed partially to increased offering of employer-sponsored insurance under the individual mandate.

In states that expanded Medicaid eligibility, the UI noted larger reductions in the uninsured rate than in nonexpansion states. In expansion states, the uninsured rate fell by more than half between 2013 and 2016. In non-expansion states, there were also large, though less dramatic, reductions in the uninsured rate, which fell by nearly one-third because of private non-group coverage and employer-sponsored insurance. Thus, any changes implemented in early 2017 by the current administration, UI concluded, would largely affect nonexpansion states with large gains in private nongroup coverage.

Employee lacks Article III standing to challenge ACA interim final rules

By Wolters Kluwer Editorial Staff

An Office of Inspector General (OIG) review of financial assistance payments to Qualified Health Plan (QHP) issuers pursuant to the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), has determined that out of 140 policies sampled, CMS accurately authorized financial assistance payments for 109 policies; however, financial assistance payments for 26 policies were not accurately authorized in accordance with federal requirements. For the remaining five policies, CMS authorized potentially improper financial assistance payments to QHP issuers that did not provide documentation to support that enrollees had paid their premiums, a requirement for receiving these payments. On the basis of the sampling, it is estimated that CMS authorized improper financial assistance payments totaling almost $434.4 million for 461,127 policies that were not in accordance with federal requirements and authorized potentially improper financial assistance payments totaling almost $504.9 million for 183,983 policies during the 2014 benefit year.

An employee who receives health insurance through her employer failed to establish Article III standing to allow her suit challenging two interim final rules under the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) to proceed in relation to coverage for hormonal medications she uses for birth control and for non-contraceptive medical purposes.

In October 2017, the Departments of Treasury, Labor and HHS issued two rules, creating religious and moral exemptions and accommodations for coverage of certain preventive services under the ACA (see Contraception coverage exemptions extended for objecting employers on religious, moral grounds, October 11, 2017). These rules allow employers to seek exemptions from requirements that the employer cover certain aspects of women's health care, including hormonal birth control.

In this instance, the employer did not exercise an exemption. Nonetheless, the employee filed a complaint seeking a declaration that the rules violate her rights under the Constitution, and further, that the rules were implemented in violation of the Administrative Procedures Act. The defendants, including the President of the United States and secretaries of the respective departments, filed a motion to dismiss for lack of Article III standing, claiming that the court was devoid of subject matter jurisdiction. In response, the employee filed a motion to strike the government's motion, however, the court denied the motion to strike, framing it as frivolous.

In its order granting the government's motion to dismiss, the court explained that the employee bears the burden of establishing standing. In order to do so, the employee must show "(1) an injury in fact; (2) a sufficient causal connection between the injury and the conduct complained of; and (3) a likelihood that the injury will be redressed by a favorable decision."

Here, the employee failed to demonstrate an injury in fact, the court found. Specifically, the court said that her fears of a hypothetical future injury were not tantamount to an "actual and imminent" injury as required to establish an injury in fact for purposes of Article III standing. Thus, the court determined that it lacked subject matter jurisdiction, distinguishing away analogies by the employee to cases where the plaintiff had standing in cases regarding the rules. Specifically, the court noted that in this instance, there were no factual allegations in the employee's complaint indicating that the coverage for contraception was likely to change based on the rules. Ultimately, the employee failed to establish that she had standing to challenge the rules and therefore, the court granted the defendants' motion to dismiss for lack of subject matter jurisdiction. Campbell v. Trump, No. 1:17-cv-02455-PAB-SKC, September 11, 2018.

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Life Sciences
No standing established when consumer looks to court to presume injury

By Wolters Kluwer Editorial Staff

A consumer failed to allege an injury sufficient to establish Article III standing when she filed suit against Johnson & Johnson (J&J), the Third Circuit held. While the consumer alleged that certain use of J&J Baby Powder can lead to an increased risk of developing ovarian cancer, she did not allege any physical or emotional harm resulting from its use, nor did she allege product failed to adequately perform the functions it is marketed to perform. The court declined to presume that the consumer suffered an injury establishing Article III standing.

Pleadings. The consumer alleged that a woman's perineal use of J&J's Baby Powder can lead to an increased risk of developing ovarian cancer. However, the consumer did not allege any physical or emotional harm from the use of the powder, nor did she allege that product failed to adequately perform the functions it is marketed to perform. The court noted that the consumer's theory of recovery is that she suffered an economic injury by purchasing improperly marketed baby powder. She argues that, had she been properly informed that using the baby powder could lead to an increased risk of developing ovarian cancer, she would not have purchased the powder in the first place. The court identifies this as the economic injury for which the consumer seeks relief for herself and a class of similarly situated consumers.

Article III standing. To establish Article III standing, a plaintiff must have (1) suffered an injury in fact (2) that is fairly traceable to the challenged conduct of the defendant and (3) that is likely to be redressed by a favorable judicial decision. To satisfy "injury in fact," the party seeking to invoke federal jurisdiction must establish that he or she suffered an invasion of a legally protected interest, the injury is concrete and particularized, and that his or her injury is actual or imminent, not conjectural or hypothetical. The burden to establish standing falls on the party seeking to invoke federal jurisdiction. Previously, the Eastern District of California dismissed the consumer's complaint for lack of Article III standing. After the complaint was consolidated as part of a multidistrict litigation proceeding, the District of New Jersey dismissed the complaint for lack of Article III standing and gave the consumer leave to amend her complaint.

No presumption of economic injury. The consumer contends that she is not required to offer any economic theory of injury at the pleading stage, despite case precedent to the contrary. In her opening brief, the consumer states she will put forth models for calculating damages and restitution at the appropriate time after discovery. However, the court declined to defer indefinitely the pleading obligation of establishing standing. The evidentiary burdens placed on plaintiffs at the pleading stage are minimal, the court stated, and precedent requires a plaintiff to do more than pair a conclusory assertion of money lost with a request that the defendant pay. The court declined to presume that the consumer in this case suffered an economic injury. Thus, the court held that the consumer did not have Article III standing to seek any of the forms of relief listed in her complaint. In re: Johnson & Johnson Talcum Powder Products Marketing, Sales Practices and Liability Litigation, September 6, 2018

Small facilities considered qualified for modified food handling requirements

By Wolters Kluwer Editorial Staff

A facility manufacturing human or animal food is considered a "qualified facility" subject to modified current good manufacturing practice (cGMP) requirements if is a very small business or if the average annual value of the food handled by the business over the prior three years was less than $500,000, and over half of the monetary value of the food handled was sold to qualified end-users. The FDA's final guidance for stakeholders covers 21 C.F.R. Parts 117 and 507.

Background. The regulations under Part 117 and Part 507 were established by the FDA to implement the requirements of its Food Safety Modernization Act (P.L. 111-353) which sets forth the requirements for hazard analysis and risk-based preventive controls for facilities that produce food for humans and animals. A facility that meets the definition of a "qualified facility" in Part 117 or Part 507 is subject to current good manufacturing practice (cGMP) requirements as well as the modified requirements described in 21 C.F.R. §117.201 or 21 C.F.R. §507.7, respectively. These modified requirements include the requirement that the facility submit a form to FDA, attesting to its status as a qualified facility.

Part 117. Subparts A, B, and F of Part 117 include cGMP requirements for domestic and foreign facilities that manufacture, process, pack, or hold human food. Subparts A, C, D, E, F, and G of Part 117 include requirements for domestic and foreign facilities that are required to register under Section 415 of the Federal Food Drug, and Cosmetic Act (FDC Act) (21 U.S.C. §301 et seq.), to conduct a hazard analysis and implement risk-based preventive controls for human food. Section II of the final guidance explains how to determine whether a facility meets the definition of "qualified facility" under Part 117 and how to submit Form FDA 3942a (for human food) attesting to status as a qualified facility that is subject to the modified requirements in 21 C.F.R. §117.201.

Part 507. Subparts A, B, and F of Part 507 also include CGMP requirements for domestic and foreign facilities that are required to register under the FDC Act. Subparts A, C, D, E, and F of Part 507 include requirements to conduct a hazard analysis and implement risk-based preventive controls for animal food. Part III of the final guidance explains how to determine whether a facility meets the definition of "qualified facility" under Part 507 and how to submit Form FDA 3942b (for animal food) attesting to status as a qualified facility that is subject to the modified requirements in 21 C.F.R. §507.7.

Qualified facility defined. The definitions for a "qualified facility" in Part 117 (see 21 C.F.R. §117.3, Human Food) and Part 507 (see 21 C.F.R. §507.3, Animal Food) are generally the same. Both define a "qualified facility" as a facility that is either (1) a very small business or (2) one to which both of the following apply:

  • During the 3-year period preceding the applicable calendar year, the average annual monetary value of the food manufactured, processed, packed, or held at such facility that is sold directly to qualified end-users during such period exceeded the average monetary value of the food sold by such facility to all other purchasers; and
  • The average annual monetary value of all food sold during the 3-year period preceding the applicable calendar year was less than $500,000, adjusted for inflation.

When calculating monetary values of all food sold, the sales by any subsidiary; affiliate; or subsidiaries or affiliates, collectively, of any entity of which the facility is a subsidiary or affiliate must be included in the total. Both "small business" and "qualified end-users" are defined terms within the Final guidance. Notice, 83 FR 46878, September 17, 2018.

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