CMS Issues COVID-19 Billing Updates for Hospitals, Alternate Sites

New and updated COVID-19 billing guidance from CMS aims to help hospitals and alternate care sites get paid for care rendered during the public health emergency.

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On May 27, CMS updated FAQs on Medicare fee-for-service billing during the COVID-19 emergency. The bulk of the new questions centered on Hospital Inpatient Prospective Payment System (IPPS) payments made under the Coronavirus Aid, Relief and Economic Security (CARES) Act.

Passed in late March, the CARES Act allocated billions of dollars in relief to hospitals and other healthcare providers, including a temporary 20 percent increase in hospital IPPS reimbursements for COVID-19 hospitalizations during the emergency period.

The updated FAQs clarified how CMS has implemented the hospital IPPS reimbursement increase, including how the agency will identify COVID-19 discharges and whether hospitals need to provide special codes to get the higher payment.

CMS stated in the updated guidance that the CARES Act directed the HHS Secretary to increase the IPPS weighting factor for the assigned diagnostic-related group (DRG) for an individual diagnosed with COVID-19 discharged during the public health emergency period. The federal agency will determine who these individuals are based on the ICD-10-CM diagnosis codes B97.29 and U07.1, a new FAQ stated.

To implement the temporary payment boost, CMS will not create new Medicare Severity-Diagnosis Related Group (MS-DRG) weights. Instead, the agency will use the IPPS Pricer to apply an adjustment factor to increase the MS-DRG relative weight that would otherwise apply by 20 percent when determining IPPS operating payments. Those payments include the calculation of reimbursements for disproportionate share hospitals, indirect medical education, outliers, new technologies, and low-volume hospitals, as well as the hospital-specific rates for sole community hospitals and Medicare-dependent hospitals.

How much hospitals will get paid for COVID-19 hospitalizations will depend on the date of discharge. CMS provided in two new FAQs the new payment rates for COVID-19 discharges on and after January 27, 2020, and on or before March 31, 2020, as well as on or after April 1, 2020, through the duration of the COVID-19 public health emergency period.

Hospitals will not need to use the DR condition code on claims to Medicare fee-for-service to receive the increased IPPS rate, CMS also clarified in the updated FAQs. Medicare Administrative Contractors will also automatically start reprocessing claims for COVID-19 hospitalizations submitted prior to the passage of the CARES Act, the agency stated.

Other FAQs added in the May 27 update included clarification on special waivers and exemptions that only apply to hospitals paid under TEFRA and billing practices for patients transferred to a temporary acute care location operated by public entities during the emergency period.

In addition to COVID-19 billing updates for the IPPS, CMS also released guidance on how hospitals can bill for services rendered at alternate care sites created to increase capacity during the public health emergency.

CMS has allowed state and local governments, hospitals, and other organizations to create alternate care sites, its broad term for any building or structure that is temporarily converted or newly erected for healthcare use. Some hospitals have used the alternate care site flexibility to convert cafeterias and other existing non-clinical spaces, as well as tents, retrofitted gymnasiums, convention centers, and other non-clinical locations for healthcare use.

To get paid for delivering acute inpatient and outpatient care at these sites, CMS advised in its latest guidance document for hospitals and health systems already enrolled in Medicare, Medicaid, and/or CHIP to treat the site as a temporary expansion of their existing brick-and-mortar location. This is the easiest path to reimbursement, according to CMS, because it will enable local hospitals to operate, staff, and bill for care at the alternate care site.