skip to Main Content
Compliance Newsletter: Q2 2013

Compliance Newsletter: Q2 2013

CMS Sequestration Medicare Reduction Fee-for-Service Provider Payments

On March 8, 2013, CMS announced that it will apply the two-percent sequestration reduction to all Medicare provider payments with dates of service/discharge on or after April 1, 2013.
The announcement also confirmed that the payment reduction will apply only to the Medicare payment amount after accounting for beneficiary cost-sharing and Medicare Secondary Payer amounts.

Example: A provider bills a service with an approved amount of $100.00, and $50.00 is applied to the deductible. A balance of $50.00 remains. We normally would pay 80% of the approved amount after the deductible is met, which is $40.00 ($50.00 x 80% = $40.00).The patient is responsible for the remaining 20% coinsurance amount of $10.00 ($50.00 – $40.00 = $10.00).

However, due to the sequestration reduction, 2% of the $40.00 calculated payment amount is not paid, resulting in a payment of $39.20 instead of $40.00 ($40.00 x 2% = $0.80).


CMS also issued a statement confirming that the agency will apply the two-percent reduction to Medicare EHR Incentive payments. The reduction will begin with incentive payments made on or after April 1, even for providers and physicians who attested to Meaningful Use before April 1st. Please refer to CMS for more information regarding the EHR incentive»

In general, Medicare fee-for-service claims with dates-of-service or dates-of-discharge on or after April 1, 2013, will incur a 2 percent reduction in Medicare payments. Therefore, to prevent making overpayments, interim and pass-through payments related to the Medicare cost report will be reduced by 2 percent. Beginning April 1, 2013 the 2 percent reduction will be applied to Periodic Interim Payments (PIP), Critical Access Hospital (CAH) and Cancer Hospital interim payments, and pass-through payments for Graduate Medical Education, Organ Acquisition, and Medicare Bad Debts.

Questions about reimbursement should be directed to your Medicare Administrative Contractor

Billing and Coding for Closed Fracture Care “Manipulative or Non-Manipulative” 

The Centers for Medicare and Medicaid Services (CMS) do not have a preference as to who codes closed fracture care services. CMS does not give coding advice; it has not given specific directions for reporting closed treatment of fractures. In 2003, however, CMS issued a directive about adjudication of claims stating that carriers will not allow the total compensation for fragmented (e.g., itemized) coding to exceed the total compensation for comparable global coding.

Below is CMS global package guidelines that address billing of (90-day) procedures (fracture care) which “clearly” indicates more than one physician may furnish the services included in the global surgical package and by appending the (54-modifier) on the procedure, as it indicates an “agreement” by the provider who performed the intra-operative or pre-operative care for the “transfer of care” for the post operative follow-up to another provider.

In the instance of “closed fracture care” that involves restorative and/or manipulative or non- manipulative care and the ED provider is performing the “same care a specialist would in that field”, then that would satisfy “definitive” fracture care and by appending the 54/modifier it is indicating to the payer that the pre and intra operative care was provided by the ED provider and he/she is agreeing to transfer the care for follow up to the orthopedic or specialist and they would apply the 55/modifier for the “billing” of the follow up care of the patient.

Physicians Who Furnish Part of a Global Surgical Package (Hospitalists)

More than one physician may furnish services included in the global surgical package. It may be the case that the physician who performs the surgical procedure does not furnish the follow-up care. Payment for the post-operative, post-discharge care is split among two or more physicians where the physicians agree on the transfer of care.

When more than one physician furnishes services that are included in the global surgical package, the sum of the amount approved for all physicians may not exceed what would have been paid if a single physician provided all services, except where stated policies allow for higher payment.

More info»

Scribe Documentation Guidelines based on “CMS” and “The Joint Commission”

Requirements Scribes are usually hired by the provider (the group) or hospital to document the encounter for the provider. If a member of the team (nurse, medical student, tech) is performing a medical service then they cannot simultaneously scribe.

While the physician or Non-Physician Practitioner (NPP) must perform the medical service, the scribe may document what is dictated and performed in the medical record. Documentation of scribed services must clearly indicate:

  • Who performed the service
  • Who recorded the service
  • Qualifications of each person (I.e., Professional degree, medical title)
  • Signed and dated by both the physician/NPP and scribe


Example: “I, ______, am scribing for, and in the presence of, Dr. ______”.
The physician or NPP performing the service must review the information as it is written or scribed and notate his/her review of the information. The physician or NPP may add supplemental information if needed, then sign and date the information.
Example: “I, Dr. _______, personally performed the services described in this documentation, as scribed by _________in my presence, and it is both accurate and complete.”

The Joint Commission (TLC) does not endorse nor prohibit the use of scribes.

The Joint Commission published updated FAQs July 2012 concerning the standards that apply to the use of unlicensed persons acting as scribes. TJC FAQ indicates that a scribe does not and may not act independently but can, at the direction of a physician or practitioner (Licensed Independent Practitioner, Advanced Practice Registered Nurse or Physician Assistant) document the previously determined physician’s or practitioner’s dictation and/or other activities.

Amongst other things, TJC surveyors will expect to see signing, timing, and dating of all entries into the medical record by the scribe, and authentication by the physician or licensed independent practitioner. In the updated FAQs, TJC does not support scribes being used to enter orders for physicians or practitioners “due to the additional risk added to the process.”

Critical Care Billing Audit Risk – Use of Critical Care Descriptor Tool

The Medicare Contractors and the OIG (Office of Inspector General) are closely scrutinizing critical care billing as “low hanging fruit” from documentation and coding perspective for abuse and payment recoupment.

In order to appropriately bill critical care the physician must satisfy the over arching criteria of “medical necessity” and state they provider 30 or more minutes of Critical Care. The following is the “working definition” of critical care as stated by Medicare: 

The direct delivery of medical care for a critically ill or injured patient. A critical illness or injury acutely impairs one or more vital organ systems such that there is a high probability of imminent or life threatening deterioration in the patient’s condition. Critical care involves high complexity decision making to assess, manipulate, and support vital system function(s) to treat single or multiple vital organ system failure and/or to prevent further life threatening deterioration of the patient’s condition. 


The MedData compliance department developed a critical care “Descriptor Tool” to assist our ED providers and coders in assessing critical care based on the “common” critical care acuities that we historically see and treat in the ED setting. This tool is a “living breathing document” that was recently updated with additional acuity considerations.

We would “highly” encourage all our clients to utilize this critical care “Descriptor Tool” to assist us in capturing all appropriately documented critical care encounters, provide individual provider feedback regarding documentation issues, mitigate audit risk and exposure and allow us to defend critical care services that are increasingly coming under scrutiny and review with RAC and other carrier auditors. MedData is in the process of laminating the updated critical care Descriptor Tool that we will be providing to our clients to post in their ED’s for easy reference and access.

This Post Has 0 Comments

Leave a Reply