CMS postpones implementation of edits related to provider-based services

CMS released MLN Matters SE19007 on June 28, announcing that it completed round three testing of the activation of systematic validation edits for OPPS providers with multiple service locations. To allow enough time to analyze collected data, the agency is postponing implementation of the edits until October.

The testing of the systematic validation edits comes two and half years after CMS released billing requirements, outlined in the Medicare Claims Processing Manual, Chapter 1, Section 170, for outpatient providers who submit claims for services rendered at a hospital outpatient provider-based department (HOPD) in a different payment locality than the main billing provider address.

Specifically, all practice locations must be identified on the CMS 855A enrollment form and entered into the Provider Enrollment, Chain and Ownership System (PECOS). In addition, a modifier -PO (excepted service provided at an HOPD) or -PN (non-excepted service provided at an HOPD) must be present on all service lines with HCPCS codes when the service facility address is present.

To ensure that providers are adhering to these requirements, CMS introduced the following Fiscal Intermediary Standard System edits, which identify reasons for claim submission errors:

• 34977, claim service facility address doesn’t match provider practice file address
• 34978, off-campus provider claim line that contains a HCPCS code must have a modifier -PN or a -PO

CMS began national trials in 2018 to test these edits in production environments. During the first round of testing, CMS temporarily activated the system edits to identify any issues providers may have reporting and billing services provided in HOPDs. The test results brought to light that many providers were not sending the exact service facility location on the claim that matched the Medicare enrolled location based on the information entered PECOS for their off-campus provider departments.

CMS then conducted a second round of testing in November 2018 after providers had time to correct their off-campus provider department location addresses to match PECOS. CMS did not report any significant reporting errors following round two of testing.

Beginning in April 2019, CMS began the third round of testing to ensure that providers are using the new practice location screen tool available to providers who use the Direct Data Entry System to submit claims, and made necessary claim submission updates to their systems.

As noted in SE19007, CMS is in the process of analyzing the most recent data but has yet to discover major issues during the final round of testing. To allow additional time to review the trial results and in response to stakeholder comments, CMS has decided to postpone implementation of the system edits for three additional months until October.

In October, CMS will release a quarterly update, directing Medicare Part A and B MACs to permanently turn on the edits. Notably, providers who need to correct a practice location address will still need to submit a new 855A enrollment application in PECOS.

CMS emphasizes that providers have had ample time to validate their claim submission systems and the PECOS information for their off-campus provider departments.