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is a set “block” reduction. CMS has resolved
this rather awkward, and at times unfair,
method of reimbursement for outpatient hospital services since January 1, 2014, but this
reimbursement strategy is still employed by
CMS for ASCs. [Look for upcoming Part 2 of
this article where the continuing importance
of device credit modifiers to both ASC and
hospital outpatient services is covered, as well
as how errors in modifier reporting are still
making a huge impact in both settings.]
5. Misinterpretation of the terminology:
“replacement” vs. “replaced” devices
“An original device is replaced with a replacement device.” In and of itself, this statement
is straightforward, if a bit awkward. But
many healthcare providers, including the
best-intentioned compliance staff, have inadvertently misinterpreted these terms. Also, an
old CMS “clarification” around the verbiage
“replaced” and “replacement” in the CMS
literature didn’t actually help the situation.
This clarification, contained in the Inpatient
Prospective Payment System (IPPS) Proposed
and Final Rules for 2012 (published in 2011), 3
centered around implantable medical device
credits of 100% as well as credits of 50% or
greater; the verbiage was promulgated in that
year’s editions of the Federal Register specifically to align the IPPS device credit policy
with the OPPS policy in terms of device credit
terminology. Unfortunately, the published
information emphasized only “replacement
devices” as being reportable with the credit
when sometimes the vendor, in remitting
the credit memo to the hospital or ASC, has
labeled the credit (following a replacement
procedure) as attributed to the original
“replaced” device. It all became a bit muddy.
So to clarify, both CMS and the OIG take
the correct view that when a credit is received,
whether or not the vendor technically attri-
butes the credit for the original replaced device
or the newer replacement device, the credit will
need to be reported if it meets the reportable
threshold. To wit, the issued credit must be
reported against the replacement device pro-
cedure, whether—again—it technically was
listed as a credit for the original replaced device
or as a credit for the newer replacement device.
How is this remedied? The implantable
medical device credit protocol followed by
the OIG auditors is basic and straightforward:
Original (replaced) device taken out, replace-
ment device put in. If a vendor credit for the
device scenario is issued for the replacement
procedure, the credit is reported against
replacement device cost, if said credit meets
the reportable threshold. No gray areas
around “replaced” vs. “replacement.”
Conclusion
As one can tell, full working knowledge of
the guidelines and requirements for reporting implantable medical device credits is
tantamount to true compliance in this space.
Recognition of which device credits must be
reported and documenting those device credits accurately requires a level of intimacy with
often dynamic CMS guidelines. The challenge
can be in meeting that level of knowledge
along the entire workflow process, because
managing device credits requires implementing an effective cross-departmental strategy.
In the next installment, we will cover five
more “top federal audit findings” for device
credit reporting, highlighting specific provider
errors to avoid or prevent and offering “fixes”
in case you find your facility in hot water.
Part- 2 of this article will review the remaining five federal
audit findings and offer tips on how to avoid some of the most
common errors in implantable medical device credit reporting.
1. CMS: The Provider Reimbursement Manual – Part 1, section 2202.4.
Available at http://go.cms.gov/2pjsE4o
2. CMS: Medicare Claims Processing Manual, 100-04, Ch. 3, Section
100.8. Available at http://go.cms.gov/2oqm R8V
3. CMS: FY 2012 IPPS Final Rule home page. Available at
http://go.cms.gov/2pVR8gm