Remain Compliant – and Take the Money

Our first topic today is local coverage determinations (LCDs) and variation. I have written in the past about national and local coverage determinations, and I have complained about how it is incomprehensible that the coverage for a procedure can vary among Medicare jurisdictions, with each Medicare Administrative Contractor (MAC) developing their own coverage determinations, including different indications and requirements. Crossing a state line should not change the ability to get medical care.

A physician advisor pointed out another nuance to this. His hospital had started doing MRI-guided focused ultrasound surgery for treatment of essential tremor. Now, while the procedure includes the word “surgery,” there is no incision or any device used that goes in the body. The patient is not even sedated for the procedure. The device is Food and Drug Administration (FDA)-approved, with labeling requiring that the physician performing the procedure be trained by the manufacturer on its use.

But if you read the published LCDs for this, two of the eight MACs have in their LCDs a requirement that physicians who perform this must “possess expertise and experience in functional and stereotactic neurosurgery.” The other six LCDs have no such requirement. The problem with this requirement is that they took it from a guideline produced by the American Society for Stereotactic and Functional Neurosurgery. Sadly, that guideline is not available without joining the Society. As a result, there is no way to know how it was developed and who provided input, and whether the Society set that requirement as a general guideline or specifically for treatment of tremor. The Society’s leadership is composed of all neurosurgeons, which may suggest that the consideration of non-neurosurgeons may have been omitted. I would wholeheartedly agree that for stereotactic surgery, where electrodes are placed in the brain, a neurosurgeon is the person to do it, but this is different.

So, if this is not really surgery as we normally think of it, and six of the eight MACs have no specific requirements for the physician, can a non-neurosurgeon who is properly trained by the manufacturer, like perhaps a neurologist who treats movement disorders, perform this? I would say yes, if the hospital determines that the physician, by virtue of that training, now has the requisite expertise and experience, and gives that physician privileges. As we often say, good documentation, this time in the medical staff office, would seem to be sufficient to satisfy the LCD.

Now, what is the real message here? Before you start performing a new procedure at your hospital, or even start spending the money on the equipment, do your research on coverage, qualifications, and of course, payment, or your next million-dollar purchase could be a really expensive doorstop.

Moving on, you may have heard in the past that I dislike key performance indicators (KPIs) that are not carefully considered. An example popped up last week that I thought I would share. I was asked when billing for observation hours starts. Of course, the answer is when the order is written. But this hospital’s billing staff starts counting when the patient arrives in the observation bed. The problem, of course, is that they are undercounting and underbilling observation hours, and depending on how long the patient stays in the ED, they may be losing out on the observation payment. But compared to other hospitals, I bet their observation hours per patient statistic looks absolutely fabulous. A great KPI, or a higher, more compliant payment?

I’ll take the money and compliance every time.

One more topic: a critical access hospital (CAH) asked me what to do about Medicare Advantage (MA) patients who are stuck in their facility for days on end because no skilled nursing facilities (SNFs) in the area will accept MA patients, having suffered through their low payments and onerous utilization reviews on a nearly daily basis, and the MA plan will not approve a swing bed stay at their facility.

My first suggestion was to find out how they are getting paid for the inpatient care from the MA plan. If they are paid by any method other than DRG, a long stay like this might pay pretty darn well, and maybe keeping them as an inpatient is not so bad after all. But the bigger issue is that MA plans must meet strict network adequacy standards, which include SNF access within one hour. Plans that do not meet network adequacy cannot be sold in a county. If the MA plan cannot provide an SNF bed, it sure seems that the plan should be reported to Medicare. And here is another example of a lousy KPI: long length of stay is not a bad thing if you are paid more for each day. Once again, compliant revenue beats a pretty KPI every day of the week.

And I almost forgot. The 2025 Inpatient Prospective Payment System (IPPS) Proposed Rule is out, and it is boring for the utilization review (UR) world. Luckily, there was not one change to the Two-Midnight Rule. They are proposing a widespread mandatory bundled payment program for 2026 called TEAM, but it’s way too early to talk about it in detail.