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CMS' requirement of a positive COVID-19 test for 20% bonus may be burdensome for hospitals

Failing to initially show a positive test result for a coronavirus patient could lead to appeals and administrative headaches.

Jeff Lagasse, Associate Editor

While the effects of COVID-19 on the human body are still being studied, one thing that's clear is that many patients who survive coronavirus-related hospitalizations still have a substantial need for post-acute care services. But a problem arose: Hospitals that continue to treat patients who no longer meet inpatient criteria are faced with denials up to $1 million in some cases.

According to the Department of Health and Human Services, sloppy coding results in more than $267 million in Medicare overpayments for post-acute care transfers to home healthcare services. Effective September 1, the Centers for Medicare and Medicaid Services requires that inpatient COVID-19 claims have a positive viral test result, challenging the requirements for increased MS-DRG weighting under the Coronavirus Aid, Relief, and Economic Security Act.

According to Becky Greenfield, attorney with Wolfe Pincavage, CMS was concerned there would be some potentially fraudulent activity among hospitals in order to get the 20% bump in DRG payments – hence the new requirement of a molecular or antigen test. If no test is documented, Greenfield said Medicare would likely take the claim, but not pay the extra 20%.

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Where this gets thorny is that hospitals are only permitted to use the code if the test shows a positive result, meaning it excludes those patients who are presumed positive or suspected to have contracted the coronavirus. 

This runs counter to current guidance, which states that confirmation of a disease does not require positive documentation of a test. That's exemplified in the language surrounding the Zika virus. For Zika, providers can simply state that the patient is positive for the condition, and no positive test needs to be included with a bill for payment.

Greenfield said it's unclear at this point if CMS has the legal authority to make the change.

"If the statute just says that the DRG will be enhanced by 20% for positive cases, CMS would likely have the authority to implement regulations that describe what it means to be positive," she said. "If the statute says specifically that 'positive' is based on the determination of the provider – which I don't think it does – then I think we have more of an interpretation issue in administrative law."

ADDED BURDEN?

In terms of billing, Greenfield said the new CMS requirement runs counter to how medicine is typically practiced. In most cases a bill does not have to include an itemized statement of medical records. That doesn't mean they're never submitted, but the added administrative burden appears to be unique in that such statements are required with the submission of the bill. Again using Zika as a counterexample, this a requirement that doesn't exist with other ailments.

The new requirements could be especially burdensome for smaller and rural hospitals in particular, which often have scarce resources and may not be able to procure tests for patients.

"If they're not testing patients when they arrive at the hospital, they would have to rely on a third-party-provider's test prior to admission," said Greenfield. "That means they have to seek out those tests. That's definitely administrative burden. Other issues are that tests aren't always accurate, especially as time goes on from the initial contraction of the disease. After 14 days it's more difficult for tests to identify a positive case."

Another issue is that when tests aren't easily accessible, conducting and getting results from a test could take upwards of two weeks, at which point the patient may already be discharged. In these situations it's not possible for the hospital to have included test results along with the medical record.

That opens the door to error, said Greenfield.

"I can't tell you how many times I've seen claims where insurance companies say they haven't seen requested medical records, and the hospital has proof they've been sent," she said. "I see the possibility of increased appeals when the 20% is not paid to hospitals, because one way or another the test is not in the record, or it got lost for whatever reason. That's to say the hospital would even have the records in place to identify when there's been an underpayment."

A PROBLEM WITH RECORDS

In Medicare, there are strict rules in place dictating the timeline for appeals and when a claim can be reviewed. If an appeal doesn't occur within the prescribed window, that's potentially money lost for the hospital. Even if an appeal is filed within the appropriate time frame, vying for the extra 20% on the DRG payment represents additional administrative time and resources. 

On the flip side, it's possible that Medicare will audit the medical record, see that there isn't a positive test and then claim there's been an overpayment of 20%, in which case the hospital would have to submit records proving there was indeed a positive test. If there wasn't, they could inform Medicare in advance and accept the non-advanced rate. Potential audits suggest the possibility of even more administrative burden.

"What strikes me is, even though we're talking about Medicare, we're not talking about Medicare only," said Greenfield. "Medicare Advantage plans and other payers will follow in Medicare's footsteps. My hunch is that this will be the case for many other types of payers as well. Assuming commercial payers follow Medicare and are providing this enhanced 20%, we can also assume they will adopt this requirement as well."

CMS, for its part, has said the purpose is to ensure that there's no fraud, and that the program is being used is appropriate for patients who are confirmed positive and not a presumed case. The 20% rate was to reward providers for taking care of COVID-19 patients, who were thought to be more complex, with the money intended to help with investments in personal protective equipment, ventilators and other equipment.

"If Medicare or any payer underpays the claim because one way or another they don't see the positive case in their record upon review, the provider has to use administrative resources to appeal, and sometimes they need to appeal more than once," said Greenfield. "The appeals process just does not work smoothly all the time."

Hospitals, she said, need to have a process in place to ensure the patient record is complete, positive test and all, because, if they don't have it before the patient is discharged, the hospital would likely be tasked with contacting labs to secure those records. If the patient is already at home, there's a far worse chance of ascertaining where the test was even conducted. Additionally, some testing sites are strapped themselves, and may not have the administrative resources to respond to the requests. In such cases, hospitals may never get the test – or at least not in time to respond to an audit or records request.

"Hospitals have a lot on their plate," said Greenfield. "This is another thing to add to it."
 

Twitter: @JELagasse
Email the writer: jeff.lagasse@himssmedia.com