In its recent Quarterly HCPCS Update, CMS instituted changes to oxygen pricing modifiers related to volume adjustment. These changes will impose further rate reductions and likely cause harm to patients and DME suppliers alike.
 
In a December 7, 1992 Interim Final Rule, CMS found that Section 1834 of the Social Security Act is silent regarding volume adjustments when the prescribed oxygen liter flow varies according to the circumstances of the patient. As a result, CMS added the following regulatory language regarding volume adjustments:

​Although this guidance has been on the books for over two decades, the change in pricing modifiers, effective April 1, 2018, will shift the physician education burden to suppliers.
 
Here’s what you need to know about the change:
 
Providers currently use three pricing modifiers for oxygen volume adjustments, based on the highest liter flow prescribed (regardless of modality):

• QE is appended when the liter flow is less than 1 LPM. Payment is made at 50% of the stationary allowable.
• QF is appended when the liter flow is greater than 4 LPM for cases where portable and stationary oxygen are used. Payment is made at 150% of the stationary rate; portable oxygen cannot be separately billed.
• QG is appended when the liter flow is greater than 4 LPM for cases where only stationary oxygen is used. Payment is made at 150% of the stationary rate.

The April 2018 HCPCS Update significantly alters the definitions for the three existing modifiers. Eligibility for the volume adjustment rate increase is now contingent on the prescribed liter flow at rest.
 
New Modifiers
 
CMS also created three new, but related, modifiers to communicate when resting daytime and nighttime liter flow requirements are different. When the rates differ, CMS expects suppliers to average these liter flows prior to assessing eligibility for the volume adjustment. The following three modifiers apply to this scenario:

• QA is appended when the average of daytime (at rest) and nighttime use is less than 1 LPM.
• QB is appended when the average of daytime (at rest) and nighttime use is greater than 4 LPM and both stationary and portable modalities are used.
• QR is appended when the average of daytime (at rest) and nighttime use is greater than 4 LPM and only stationary oxygen is used. 

The following table shows the correlation between the new and existing modifiers:

CMN Considerations
 
By disregarding the highest liter flow prescribed for the patient, the rule change complicates CMN preparation. Current CMN instructions do not speak to liter flow in the context of modality (at rest, exertion or nighttime use). Questions 5 and 6 read as follows:

• Question 5: Enter the highest oxygen flow rate ordered for this patient in liters per minute. If less than 1 LPM, enter an “X”.
• Question 6: If greater than 4 LPM is prescribed, enter results of most recent test taken on 4 LPM. This may be an (a) arterial blood gas PO2 and/or (b) oxygen saturation test with patient in a chronic stable state. Enter date of test (c).

These two questions drive claim processing logic and eligibility for the volume adjustment. The MACs just released a Joint DME MAC Publication with revised Billing Instructions related to the Oxygen CMN Question 5. But the CMS-484 form cannot be officially changed without OMB approval, and that process can take years. In the interim, this oversight will shift the physician education burden to suppliers.
 
There is no doubt this instruction will materially impact reimbursement for existing patients requiring high liter flow for day-to-day living. By doing so, CMS will discontinue added compensation for the special equipment these vulnerable patients require to maintain even modest quality of life standards. Combined with price cuts derived from competitive bidding and the 2006 budget neutrality, or double-dip, offsets, these changes create an increasingly difficult delivery model for suppliers.
 
MiraVista has contacted CMS to advocate for continuance of prior policies. For more details, guidance and insight on this issue, please join us for the 2018 Look Ahead for DME Suppliers on Thursday, March 8 at 1:00 PM (EST).

Welcome back to Never Mind the Trick (NMTT), our medium for getting better results with less effort. For the next several installments, we are going to focus, not on frequently asked questions about DME billing and business, but the frequently asked question:
 
How does one use AR reports and billing performance data to understand and improve future results?
 
The overall process is relatively straight-forward:

• Evaluate key performance metrics at a high level.
• Develop questions about the performance metrics that are outside expectations.
• Drill deeper to investigate specific questions.
• Evaluate findings and act upon them.

 
Rather than write a series of lectures on analytical procedures, a collection that would surely rival War and Peace in word count, we are going to step through the process that we use in our own work. First, a few foundational truths…
 
It is almost impossible to analyze one’s own work.
 
Let’s be clear. Analysis must be the initiative and priority of management. Individuals working in the customer service or billing departments (inside or outsourced), third-party payers, referral sources, and patients all contribute to the results. As such, they are all ill-positioned to perform useful analysis because their view is from within; it is jaded and without adequate perspective. Analysis requires objectivity, and the analyst must have a vested interest in the success of the company and no other incentive to assign blame.
 
If you are disappointed with the analysis you are getting from your billing department, it is likely not a lack of effort but the assignment itself. Put frankly, billing departments, insourced or out, are not well suited for analysis.
 
The analysis target is critical.
 
Always, always, always start with reports that are:

• Highly summarized. We are talking about 30,000 ft. macro-level detail.
• Consistently prepared. Understanding the changes and their related causes is what matters most, so consistency is critical.

 
Good analytical source material prevents us from digging too deeply too early in the process. By looking at comparative metrics like collection rate, the analyst can identify trends that are both significant enough to matter and subject to the influence of purposeful effort. If something is small or non-recurring, or if change is impractical, good analytical material provides management with the relief of letting it go so finite resources are available to solve significant problems and improve results.
 
Prioritizing the analysis process at the highest level, assigning it to capable individuals that can exercise objectivity and impartiality, and starting with consistently prepared information are key.
 
Subscribe to our newsletter to catch the next installment in our process for analyzing billing data, “Always Start Here.”

CGS Provider Outreach confirmed date stamps will no longer cause failures in audits of 5EOs for items subject to ACA.
 
CMS updated the policy article titled Standard Documentation Requirements for All Claims Submitted to DME MACs (A55426). Until May 24, 2017 the now superseded policy article contained the following paragraph in relation to “Standard WOPD” requirements:
 
“A WOPD must meet the requirements described above for a DWO. The WOPD must be both signed and dated by the prescribing physician before the item is dispensed. The supplier must have received the WOPD before dispensing the item. A date stamp or equivalent must be used by the supplier to document receipt date.”
 
CMS removed this language from the current policy article. MiraVista presumes CMS made the change because the statute never directly imposed the requirement. Per section 410.38 of the Code of Federal Regulations, the following items are required of a 5EO:
​

• Beneficiary name.
• Item of DME ordered.
• Physician signature.
• Physician NPI.
• Date of the order.

 
Suppliers are required to secure a 5EO prior to delivery. To satisfy the “date of the order” being on or before the date of delivery, the DME MACs will now base timeliness on the date of the order. Suppliers must still secure a Detailed Written Order before billing the claim for reimbursement. To prevent reimbursement delays, MiraVista recommends suppliers only dispense product after securing the detailed written order.
 
Internal date stamping has been a burdensome and problematic administrative protocol. The shift to leverage elements that are naturally on the order (instead of artificially imposed for administrative purposes) will make it easier to pass audits and validate timely orders. Continue if you wish, but you have our blessing to do away with this unnecessary step!

CMS recently released ICD-10 updates for 2018. The update resulted in many additions, deletions, and revisions that took effect October 1, 2017. Many of the deleted codes were replaced with more specific codes. There were a total of 363 additions, 142 deletions, and 226 revisions.

When diagnosis codes change, suppliers are likely to experience an increase in rejected claims. If you are a respiratory supplier for example, CMS deleted a common ICD-10 code: I27.2 (Other secondary pulmonary hypertension). As a result, every order with this diagnosis and a service date after October 1 will reject until your staff intervenes. Staff must replace diagnosis I27.2 with one of the new, more specific codes: I27.20-I27.29 or I27.83.

To avoid delays caused by rejections, suppliers should proactively address outdated diagnoses. Run a report from your billing software that exports active and recurring orders to include linked diagnosis codes. Then, query a match to deleted codes and update affected orders and patient accounts with the most appropriate new code. Suppliers are permitted to modify diagnoses for billing purposes, without securing physician approval, as long as the underlying diagnosis is supported in the medical records.

To review the complete list of added, revised, and deleted ICD-10 codes, suppliers can go to the CMS 2018 ICD-10 CM and GEMs webpage and download the 2018 Code Descriptions in Tabular Order file. This file will contain multiple documents. The “icd10cm_codes_addenda_2018” is a useful file that shows all additions, deletions, and revisions in alphabetical order by diagnosis code.

Maximize your revenue potential and stay on top of industry changes by attending (K)notes, our bi-monthly event and publication covering current events and reimbursement happenings in the HME industry. In this event we will cover updates to proof of delivery, CMS appeal initiatives, competitive bidding relief prospects, the new HHS Secretary nominee, why your Medicaid crossovers have stopped paying, what is happening with the next competitive bid project Round 2019, and more. Our next event is on December 14, 2017 at 2:00 pm EST.