1. Georgia Chapter – Healthcare
Financial Management Association
Tuesday, December 6, 2016
1:00pm EST
At the Heart of the Matter:
Medical Necessity

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About the Speakers
Denise Hall-Gaulin, RN, BSN – Principal, Healthcare Consulting
Denise manages the Firm’s Hospital and Physician Compliance Advisory Services. With more
than 25 years of experience in the healthcare industry, Denise has provided business advisory
services to a variety of organizations, including hospitals, health systems, physicians, and both
behavioral health and post-acute organizations. Denise has extensive experience in
compliance-related matters, including oversight of numerous engagements where PYA has
served its clients as an Independent Review Organization (IRO). In addition, Denise has in-
depth knowledge of quality, case management, health information management, chargemaster,
and patient accounting matters. Denise has served as expert witness in compliance litigation
matters as well as self-disclosure recoupments. She speaks frequently on these topics at
various national and regional conferences.
Joanna Malcolm, RN, BSN, CCM® – Manager, Healthcare Consulting
With more than two decades of healthcare experience, Joanna is a manager of the Clinical
Advisory Services team. Since joining PYA in 2007, Joanna has been instrumental in
developing the Firm’s Case Management and Medical Necessity Compliance service line. In
this role, she has provided denials and appeals services for Recovery Audit Contractors, Office
of Inspector General (OIG), U.S. attorney, and Zone Program Integrity Contract cases; annual
compliance plan reviews; and project oversight for federal- and state-focused reviews.
Additional areas of focus and expertise include analysis and consultation services for inpatient,
outpatient, rehab therapy, skilled nursing facilities, and psychiatric facilities. Joanna serves as
an active resource in her field and has provided interviews and quotes to several publications
specializing in the aforementioned areas.

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Firm Overview

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Agenda
 Recent cases and legal actions
 Understanding the impact of medical necessity when
interpreting the regulations and guidelines for:
 Stents
 Pacemakers
 Automatic Implantable Cardiac Defibrillators (AICD)
 Electrophysiology Studies (EPS) and Ablations
 A discussion of common areas of risk in applying Local
Coverage Determination (LCD)/National Coverage
Determination (NCD) guidance to cardiac procedures: how to
identify risks and avoid vulnerability
 How bundled payment models affect quality and costs
 Discussion of best practices for ensuring compliance with
regulations

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In the News

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DOJ National Probe
 Results:
 Over 500 hospitals agreed to pay back nearly $500 million to the
government to resolve allegations that they charged Medicare for
procedures that did not comply with NCD 20.4 for implantable
cardiac defibrillators (ICDs).
 Providers are now keenly aware of the technical guideline that
specifically requires a waiting period for device placement
following certain cardiac events or procedures.
 It brought attention to the fact that the NCD also contains many
other frequently overlooked indications, exclusions, and
documentation requirements to support medical necessity.
 It showed that the risk for non-compliance is not isolated to ICDs;
other cardiac procedures and devices have coverage
determinations that explicitly cover or exclude certain indications.

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Medicare Coverage/Determination
 Cardiac devices (pacemakers, ICDs, cardiac
resynchronization devices) cost between $25,000 and
$40,000 each for the initial implantation procedure.
 Medicare coverage for these procedures is limited to
items and services that are reasonable and necessary for
the diagnosis or treatment of an illness or injury, and
within the scope of a Medicare benefit category.
 Determination of “reasonable and necessary” is decided
through the Medicare National Coverage Process that is
performed over a nine month period. This process either
results in an NCD, or a reconsideration in which the
process begins anew.

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Medicare Coverage Determination Process

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Medical Necessity
 The AMA defines medical necessity as healthcare services or
products that a prudent physician would provide to a patient
for the purpose of preventing, diagnosing, or treating an
illness, injury, disease, or its symptoms in a manner that is:
 In accordance with generally accepted standards of medical
practice.
 Clinically appropriate in terms of type, frequency, extent, site, and
duration.
 Not primarily for the convenience of the patient, physician, or other
healthcare provider.
 Usage of the term "medical necessity" must be consistent
between the medical profession and the insurance industry.
 Carrier denials for non-covered services should state so
explicitly and not confound this with a determination of lack of
"medical necessity."
Source: American Medical Association, “H-320.953 Definitions of "Screening" and "Medical Necessity“, https://www.ama-
assn.org/ssl3/ecomm/PolicyFinderForm.pl?site=www.ama-assn.org&uri=/resources/html/PolicyFinder/policyfiles/HnE/H-320.953.HTM

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The Shared Responsibility of Medical Necessity
Physicians
• Order appropriate
treatments for the
patient
• Consider complex
medical necessity
standards as
outlined by
government and
private payers
Hospitals
• Prohibited from
billing for services
ordered and
performed by
physicians that are
not medically
necessary

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The Shared Responsibility of Medical Necessity
Physicians Hospitals

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Documentation Is Important!
Physicians may, knowingly or unknowingly,
practice outside of the payer guidelines, but
are also using the most up-to-date patient
care guidelines.
 Example: the most recent clinical guidelines and
AUC for ICDs were issued in 2013, whereas the
most recent update to NCD 20.4 was in 2005.
Physicians’ documentation should be detailed
as to what criteria or guidelines they are using
to make treatment decisions.

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Documentation Is Important!
 Documentation should very specifically answer the
following questions:
 What are the patient’s specific signs and symptoms?
 What are the diagnostic tests that support the diagnosis?
 What are the patient comorbidities that contribute to the clinical
picture?
 How can the treatment improve the patient’s expected long-term
mortality?
 How can the procedure potentially improve the patient’s quality of
life?
 In what way will the limitations of the current coverage guidelines
restrict the patient from the most appropriate treatment currently
available?

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Documentation Pitfalls for NCD 20.4
NCD 20.4 Implantable Automatic Defibrillators
Documented prior
Myocardial
Infarction (MI)
 Of the eight covered indications for an ICD, five require the documentation of a prior MI.
 Frequently, a physician will document the diagnosis of “ischemic dilated cardiomyopathy” as the
indication for the placement of an ICD. Inferred in the diagnosis is that the ischemia is related to an MI.
However, ischemia can result from an MI or chronically narrowed arteries, without an MI. The
guidelines also list the criteria for the definition of an MI. There are many ways to document a prior MI,
but a physician statement is the minimum
Left Ventricular
Ejection Fraction
(EF)
 Indications 3-8 require an EF of ≤ 35%.
 Many times, the LVEF is either not documented at all, or is documented as 35-40%. ICDs are virtually
never placed without a measurement of LVEF by echocardiogram or radionuclide scanning; locating
the study and ensuring that it is in the medical record is usually responsible for this deficiency.
 ICDs are never indicated for LVEF of >35%. The statement of 35-40% will be denied as not necessary
every time.
Ventricular
Tachycardia (VT) or
Ventricular
Fibrillation (VF)
 Indications 1 and 2 allow ICD for the documented presence of VT or VF not associated with an MI or
transient or reversible cause.
 Often missing in the documentation to support this, is that the VT or VF was sustained (lasting longer
than 30 seconds) and induced in an electrophysiology study that was performed more than 40 days
following an MI, or more than 3 months following revascularization. Documentation must show that the
arrhythmia is still present and poses a risk outside the immediate timing of an MI and that the
revascularization procedure did not remove the risk.
 Documentation should state when the MI or procedure was performed, when the arrhythmia was
induced, and how long it lasted to support the necessity and timing requirements. Of note, this
technical requirement is different than what the DOJ investigation focused on, which was the timing of
the placement of the device. This requirement is directed at proving an arrhythmia still exists outside of
those time requirements.

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Documentation Pitfalls for NCD 20.8.3
NCD 20.8.3 for Single and Dual Chamber Cardiac Pacemakers
Bradycardia  Both indications for coverage of pacemakers are for documented symptomatic bradycardia, which is
defined as a heart rate less than 60 beats per minute. This is very specific, yet frequently the
physician documents only “bradycardia”, without specifying the rate. Further, there may be
documentation of an EKG that shows a rate higher than 60 beats per minute. This is usually a result
of insufficient documentation and easily avoidable by more thorough documentation of the rate and
what study was used to confirm the diagnosis. Without documented bradycardia of less than 60 beats
per minute, a pacemaker will be deemed not medically necessary.
Symptomatic  Also specified for both indications is the presence of symptoms directly attributable to a heart rate of
less than 60 beats per minute. The examples given are syncope, seizures, congestive heart failure,
dizziness, or confusion. Again, frequently missing from documentation are the clinical symptoms that
support the need for a pacemaker to correct the bradycardia. Without support for symptoms, such as
a brief statement by the physician in the history and physical, a pacemaker will not be deemed
medically necessary.
Atrial Fibrillation  The diagnosis of Atrial Fibrillation (“AF”) is a non-covered indication for a pacemaker unless there is
also symptomatic bradycardia or a future plan to perform AV node ablation, which eliminates the
hearts ability to pace itself. Many times a physician states AF as the indication for a pacemaker
without any documentation to support symptoms related to bradycardia. Most frequently this symptom
is congestive heart failure due to medications used to slow the heart rate, but is never tied together in
the documentation. Most physicians are just unaware of this exclusion, and need to be educated
about the requirements for more detailed documentation to support pacemakers in patients with AF.

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Why Does It Matter?
DRG Payment
DRG Description
2016
Payment
226 ICD Implant w/MCC $41,178
227 ICD Implant w/o MCC $32,367
242 PM Implant w/MCC $22,341
243 PM Implant w/CC $15,614
244 PM Implant w/o CC $12,633
245 ICD Replacement $27,300
258 PM Replacement $16,882
260 PM Revision $21,997
265 ICD Lead Revision $17,526
APC Payment
APC Description
2016
Payment
5223 Level 3 Pacemaker $9,283
5224 Level 4 Pacemaker $16,914
5231 Level 1 ICD $21,930
5232 Level 2 ICD $30,490
Physician Payment
CPT Procedure
2016
Payment
33208 Pacemaker $553.63
33249 ICD $962.42

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Cardiovascular Procedures NCDs
NCD Title Most Recent Revision
20.4 Implantable Automatic Defibrillators 3-4-2005
20.7 Percutaneous Transluminal Angioplasty 9-4-2014
20.8.3 Single and Dual Chamber Pacemakers 8-13-2013
20.9.1 Ventricular Assist Devices 8-29-2014
 Notably absent: Catheter Ablation, Electrophysiology, CABG

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Selected LCD Examples
LCD Title States Covered
Last Revision
Date
L33271
Cardiac Resynchronization
Therapy
FL, PR, USVI 3-21-2014
L33557
Cardiac Catheterization &
Coronary Angiography
IL, MN, WI, CT, NY,
ME, MA, NH, RI, VT
7-1-2011
L33959
Cardiac Catheterization &
Coronary Angiography
KY, OH 4-30-2011
L33623*
Percutaneous Coronary
Intervention
IL, MN, WI, CT, NY,
ME, MA, NH, RI, VT
10-1-2015
L34761*
Percutaneous Coronary
Intervention
38 States 04-15-2015
L34598 Cardiovascular Stress Testing 48 states 12-1-2009
L34324 Cardiovascular Stress Testing CA, HI, NV 9-16-2013

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Medical Necessity Audits
 OIG: Office of the Inspector General
 DOJ: Department of Justice
 RAC: Recovery Audit Contractors
 MAC: Medicare Administrative Contractors
 HEAT: Healthcare Fraud Prevention and Enforcement
Team
 ZPIC: Zone Program Integrity Contractors
 MIC: Medicaid Integrity Contractors
 QIO: Quality Improvement Organizations

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FCSO MAC Prepayment Reviews
Source: http://medicare.fcso.com/wrapped/231916.asp

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NGS Post-Payment Reviews
Source: National Government Services, http://bit.ly/22vqJXT

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* There are no new changes to the 2017 Plan.
Source: http://oig.hhs.gov/reports-and-publications/archives/workplan/2016/oig-work-plan-2016.pdf
OIG Work Plan 2016*

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Bundled Payments
 Proposed Rule for patients with myocardial
infarction who undergo percutaneous coronary
intervention (PCI) with or without stenting and
coronary bypass graft surgery
 July 1, 2017 - 98 randomly selected metropolitan
statistical areas (MSA) will begin the five-year
cardiac bundled payment demonstration project
 Hospital payment will be a fixed target price per
episode based on a quality-adjusted price

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Sample Checklist (1 of 3)
Secondary Prevention: Patient has already experienced a life threatening arrhythmia.

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Sample Checklist (2 of 3)
Primary Prevention: The patient has not experienced an arrhythmia, but is at high risk of
Spontaneous Cardiac Death (SCD) due to other cardiac conditions.
All indications for Primary Prevention require ICD Registry data collection and reporting

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Sample Checklist (3 of 3)

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Best Practices
 Develop required training for all physicians with hospital privileges
that include education regarding NCDs, specific requirements, and
practice responsibility to provide the supporting documentation.
 Develop a process and delegate responsibility for collecting and
maintaining the NCDs within each specialty department.
 Implement a specific checklist for ordering cardiac device procedures
that includes the documentation to support medical necessity before
the procedure can be scheduled. (see attached example)
 Implement a specific checklist to be used within the hospital
department that must be complete prior to performing the procedure.
(see attached example)
 Develop a process for pre-billing monitoring and regular post-
payment auditing for all cardiac device placements.
 Assign a Physician Champion who is knowledgeable of the NCD
coverage requirements that can serve as a resource when physicians
order treatments outside of coverage guidelines.

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Questions

29. PERSHING YOAKLEY & ASSOCIATES, P.C.
800.270.9629 | www.pyapc.com
Denise Hall-Gaulin, RN, BSN
Principal
PYA
dhall@pyapc.com
Joanna Malcolm, RN, BSN, CCM
Manager
PYA
jmalcolm@pyapc.com