Changed Medicare Policy Adds to Regulatory Risk

At the moment, uncertainty reigns in how pathology labs should bill for prostate biopsies

CEO SUMMARY: When Medicare’s National Correct Coding Initiative (NCCI) manual took effect on January 1, 2012, it contained a significant change in how prostate biopsy claims are to be coded. This change was widely overlooked by the pathology profession and even dismissed entirely for its ambiguity and inconsistency with previously published guidance on the subject. Now this issue is front and center. Labs are asking for clear guidance on how they should comply when submitting claims for prostate biopsies.

FOLLOWING THE AUGUST 7, 2012, issuance of a new policy on prostate biopsy claims by one Medicare carrier, lab directors and anatomic pathologists are looking for detailed guidance in how their labs should comply with the National Correct Coding Initiative (NCCI) manual.

Published on December 1, 2011, and effective on January 1, 2012, the NCCI manual included a little-noticed change in how labs and anatomic pathologists should bill for prostate biopsies. This change cuts in half what labs are reimbursed for a prostate biopsy case with 12 tissue cores.

“Back in January, few labs noticed the change in the NCCI manual,” stated John R. Outlaw, CHC, Vice President for Regulatory Affairs and Compliance for PSA, LLC, a pathology billing company with headquarters in Florence, South Carolina. “Even now, there is uncertainty in how labs need to comply with the manual—in part because there has never been any formal communication of the change by Medicare (outside of the NCCI manual itself), and because the change directly conflicts with previously published guidance from Medicare in the form of the Final Rule implementing the new G-codes in 2009.”

On August 7, Palmetto GBA issued guidelines for laboratories running prostate biopsy tests. These guidelines were designed to comply with edits in the NCCI manual.

The new guidelines affect claims for Medicare Part B prostate biopsies originat- ing in the Medicare jurisdictions of J1 and J11. The Palmetto guidelines brought attention to the NCCI manual change and raised questions about whether labs in other Medicare jurisdictions may also need to comply, and if so, how they should comply.

Pathologists and Coding

“We dedicate considerable resources to educating our clients on regulatory compliance issues—including correct coding—in order to minimize their risk,” stated Outlaw. “Unfortunately, the Centers for Medicare & Medicaid Services (CMS) has yet to issue any formal guidance to educate pathologists on the NCCI manual change and how to apply it in light of CMS’ previous instructions regarding the use of the G-codes.

“Until it does, pathologists submitting claims for Medicare Part B prostate biopsy claims should understand the risks—of which a RAC audit is just one—were they not to follow the NCCI guidelines of January 1, 2012,” advised Outlaw.

“We think there is no choice for pathologists handling cases in the Medicare jurisdictions 1 and 11 adminisitered by Palmetto,” he said. “In those seven states—California, Hawaii, Nevada, North Carolina, South Carolina, Virginia, and West Virginia—all labs should follow Palmetto’s guidance.

“To this point, Medicare Administrative Contractors (MACs) for other jurisdictions have not published their own policies on the subject,” continued Outlaw. “But that does not mean they are not applying the policy as it was originally published in the NCCI manual.

Assessing Potential Risks

“We understand why some pathologists may choose not to apply the Palmetto policy outside of Palmetto’s jurisdiction,” noted Outlaw. “However, we believe that they must understand that there is some risk in that position, since the NCCI manual represents CMS correct coding policy nationwide.

“We all expect that there will be further guidance from CMS and Palmetto on this issue,” he added. “It is likely that there will be challenges by some in the lab industry who believe that various rule-making requirements were not followed properly in this matter. However, that does not reduce compliance risks at this time, given the policy changes enacted by NCCI and Palmetto since early this year.”

As this issue of THE DARK REPORT went to press, no statements or additional guidance on this prostate biopsy policy had been provided by CMS or any Medicare carriers. Such guidance is expected and come come at any time.

Questions Raised about NCCI’s Policy Changes

IN 2009, CMS ISSUED A FINAL RULE on the use of the HCPCs codes for saturation biopsies for prostate specimens. The HCPCs codes are sometimes referred to as G codes.

“The final rule on G codes for saturation biopsies was later published in the National Correct Coding Initiative (NCCI) manual, “ explained John R. Outlaw, CHC, VP for Regulatory Affairs and Compliance for PSA, LLC. “Given this background, it is curious that NCCI published guidance in December 2011 that changed the way labs should use G codes for prostate biopsies.

“This latest revision to the NCCI manual on G codes for prostate biopsies contradicts the earlier NCCI rule on G codes,” continued Outlaw. “This has led to much confusion among pathologists and their coding and billing experts.

“When NCCI’s new guidance became effective on January 1, few pathologists knew about those specific changes in the NCCI manual—and those who did know didn’t question the apparent contradiction,” he explained.

“Importantly, there was no announcement from CMS about this important change regarding prostate biopsies,” said Outlaw. “Usually when CMS makes a change like this, it does so in the physician fee schedule. But there was no transmittal to the carriers announcing this change in policy. The fact that there was no announcement meant that it went almost unnoticed.

“This whole process raises procedural questions because some pathologists have argued that no policy published by CMS can supersede a regulation that has been passed by the rule-making process,” concluded Outlaw. “If a policy contradicts what’s in the regulation, the regulation has to supersede the policy.”

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