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Not to be overly critical, but let’s face it: the Centers for Medicare & Medicaid Services (CMS) did not seem to go the extra mile performing due diligence in the matter of the new Condition Code 53 (CC-53).

The late January 2015 release of instructions by CMS about the new condition code was severely lacking in scope, breadth, and directly applicable information. This new condition code carves out an entirely new dimension for device credit reporting, adding to the already burgeoning bucket of implantable replacement devices with 50 percent-or-greater credits an entirely new chunk of services that must be reported: this includes initially placed devices that are provided to a facility either free of charge or with 100 percent credit. 

What’s more, CMS used potentially confusing language and a bare-bones explanation for CC-53 by stating up-front that the digital flag of the new condition code is for “outpatient claims that have received a device credit upon initial medical device placement in a clinical trial or a free sample.” 

What about inpatient claims? What about Value Code “FD”? What about the monetary amount that accompanies Value Code “FD” for free samples? To what date is this new directive retroactive? Why has CC-53 been anchored to the revised outpatient reporting instructions for replacement device credits beginning Jan. 1, 2014 instead of Jan. 1, 2015?  How will this new mandate impact current facility or health system operations? These are certainly all appropriate questions, but combing the CMS instructions for CC-53 will leave you scratching your head.  

In answer to these and other queries, let’s unpack the information at hand and perform an inventory of what we know and don’t know about CC-53.

What Do We Know? CC-53 is:

  • For claims received on/after the effective date of July 1, 2015
  • For implementation by July 6, 2015 at the local Medicare Administrative Contractor (MAC) level
  • For devices listed in the Federal Register containing the Outpatient Prospective Payment System (OPPS)/Ambulatory Surgery Center (ASC) Final Rule for 2014, Table 31, and/or the OPPS/ASC Final Rule for 2015, Table 27
  • Defined as “initial placement of a medical device provided as part of a clinical trial or a free sample”
  • Further clarified as germane to “outpatient claims that have received a device credit upon initial medical device placement in a clinical trial or a free sample”
  • Guided by instructions that have been added to the following CMS regulations and guidance:
    • Medicare Claims Processing Manual (MCPM) 100-04 Ch. 4 Part B Hospital§61.3.5 Reporting and Charging Requirements When a Device is Furnished Without Cost to the Hospital or When the Hospital Receives a Full or Partial Credit for the Replacement Device Beginning January 1, 2014
    • MCPM 100-04 Ch. 32 Billing Requirements for Special Services§67.2.1 Billing No Cost Items Due to Recall, Replacement or Free Sample
    • MCPM 100-04 Ch. 32 Billing Requirements for Special Services§68.4 Billing Requirements for Providers Billing Routine Costs of Clinical Trials Involving a Category B IDE
    • Applicable to device credits of 100 percent, including free samples, which might or might not be given in relation to a clinical trial
    • Reported with Value Code “FD”
    • Reported with the device line item charge of either $0.00, or, if the hospital’s billing system requires a charge, then a token charge of $1.00
    • Reported per instructed, but since Jan. 1, 2014, for outpatient claims, modifiers –FB and –FC are no longer reported
    • Reported per instructed, with the OPPS Ambulatory Payment Classification (APC) reimbursement amount discounted by no more than the maximum device offset “cap” amount. 

What Don’t We Know? 

  • How far back will the retroactive date go? The aforementioned CMS transmittal ties CC-53 directly to the OPPS Final Rule for 2014 (not 2015), with affected claims potentially going back to Jan. 1, 2014
  • If the retroactive date will be Jan. 1, 2014, how will claims already outside of the timely filing deadlines be corrected and resubmitted?
  • What credit amount (monetary value) goes into the value code field (adjacent to “FD”) if the initially placed device is a free sample? Does CC-53 automatically trip a pre-set maximum amount depending on the APC group “cap” device offset amount?
  • Will monetary amounts entered into the value code field (adjacent to “FD”) for 100 percent credits be picked up and read accurately, with the reported credit amount being deducted from the APC reimbursement in a 1:1 ratio?
  • How will inpatient cases, with patients undergoing typically outpatient procedures who have been admitted because of their clinical picture and/or other safety parameters, be handled? Are inpatient claims absolutely excluded from the initially placed free or 100 percent credited implantable device credit reporting? 

Aside from the litany of “what do we know?” items, it must be recognized that facilities need to consider this new group of implantable device credits in the context of their internal frameworks for tracking and monitoring protocols for replacement device credits. Health systems that have not yet implemented policies and procedures for tracking replacement device credits are well behind the curve and should get them in place ASAP to accommodate the new group of devices qualifying for initially placed free/100 percent credited implantable device credit reporting. 

Furthermore, facilities and health systems must pull together some quick but well-grounded hierarchical decisions to determine which approach is best for their cash flow and staff operational protocols germane to current claims for which CC-53 would be applicable. They must determine, based on fiscal influences and procedure volumes involving free or 100 percent credited initially placed implantable medical devices, whether identifying and holding current claims makes sense, or whether they should submit current claims per usual and then retroactively correct all pre-identified claims that will need adjusting once the implementation date for CC-53 has arrived. Because implantable device credit reporting, whether for replacement devices or initially placed devices, is an interdepartmental responsibility that crosses numerous service areas, the architecture around this decision tree should be reviewed with all department heads, including personnel in charge of clinical trials involving devices. Adding education and training specifically for CC-53 and identifying germane initially placed devices should not be overly burdensome, but again, for facilities and health systems without current protocols in place for replacement device credit reporting, this educational effort will be much more onerous.

Lastly, look for forthcoming guidance prior to July 2015 issued by CMS or published by the jurisdictional MAC that processes your outpatient institutional claims. 

About the Author

Michael G. Calahan, PA, MBA, is the vice president of hospital and physician compliance at HealthCare Consulting Solutions (HCS) Mr. Calahan has more than 25 years of experience in healthcare, beginning as a physician assistant co-owning medical practices. He has served as the practice administrator for several multi-physician practices and has enjoyed a varied career in hospitals and healthcare consulting firms, working with Ingenix (OptumInsight), CGI, Navigant, PWC, and Parente Randolph. He has authored numerous industry publications.

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Michael Calahan, PA, MBA, AHIMA-Approved ICD-10 CM/PCS Trainer

As Vice President of Hospital and Physician Compliance at HealthCare Consulting Solutions (HCS), Michael G. Calahan, PA, MBA, provides subject matter expertise and consulting services. He has been a speaker for MedLearn for nearly 10 years and has provided webinars on device credit reporting since 2013.

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