CMS will require positive COVID-19 test results for increased inpatient payment

Inpatient novel coronavirus (COVID-19) claims will require a positive viral test result to be eligible for the 20% increase in the MS-DRG weighting factor, effective for admissions on or after September 1. The test must be performed within 14 days of admission, and the results must be documented in the patient’s medical record.

Only molecular or antigen laboratory testing, consistent with the CDC’s guidelines, may be used, according to an updated version of MLN Matters SE20015 released August 17. Tests may be performed during or prior to the hospital admission. Tests may be performed by entities other than the admitting hospital—for example, by a local government-run testing center—and manually entered into the patients’ medical records.

If a viral test is performed more than 14 days prior to a patient’s admission, CMS will consider whether there are complex medical factors in addition to the test result.

If a patient is diagnosed with COVID-19 consistent with the ICD-10-CM guidelines but does not have a positive viral test result, the hospital may decline the additional MS-DRG payment at the time of claim submission. The hospital must inform its Medicare Administrative Contractor (MAC) of its intent to decline, and the MAC will then apply its internal claim processing coding to the claim. Additional operational guidance will be published in the future, according to SE20015.

CMS made this change to address program integrity concerns, according to SE20015. The agency may conduct post-payment medical reviews of COVID-19 claims to confirm the presence of a positive viral test result. If a positive viral test result is not documented in the medical record, the additional payment will be recouped.

Some experts questions whether CMS has the statutory authority to require a positive test result and whether the agency can effectively operationalize it. The CARES Act increased the MS-DRG weighting for 20% for a COVID-19 diagnosis. The CARES Act does not require the diagnosis to be supported by a positive test result, but CMS is now requiring a positive test result in order to qualify for the add-on DRG payment based upon Section 3710 of the CARES Act, which sets forth that, “The Secretary shall identify a discharge of such an individual through the use of diagnosis codes, condition codes, or other such means as may be necessary,” according to Steven A. Greenspan, JD, LL.M., vice president of regulatory affairs, Optum Physician Advisor Solutions and a NAHRI Advisory Board member.

“While consistent with their authority, CMS is actually adding an another identifier as being necessary to support the COVID add-on DRG payment, calling into question a physician’s diagnosis absent a positive test – and we all know how accurate the tests appear to be” Greenspan says.

The new requirement would also be burdensome to comply with and enforce and is contrary to current medical practice, says Ronald Hirsch, MD, FACP, CHCQM, CHRI, vice president, R1 Physician Advisory Services and a NAHRI Advisory Board member.

CMS and MACs can’t audit for compliance with the new requirement unless they review the medical record because lab test results don’t appear on claims, Hirsch explains. Hospitals may report COVID-19 test results to the CDC or HHS for public health data reporting, but that system is not accessible by MACs, he adds.

“How will the MACs track the reporting by hospitals of lab-negative COVID-19 patients to ensure the claim gets adjusted, and how will hospitals know from the claim payment that there was no 20% addition?” Hirsch says. “How will auditors like the RACs know the 20% addition was not applied when they audit?”

The new requirement also raises questions about clinical practice, Hirsch notes. The ICD-10-CM guidance for reporting COVID-19 codes—U07.1 (COVID-19) for discharges occurring on or after April 1 or B97.29 (other coronavirus as the cause of diseases classified elsewhere) for discharges occurring on or after January 27 and on or before March 31—does not require that the diagnosis is supported by a positive test result.

“No test is perfect. The sensitivity of the tests varies from 70%–85%, so that leaves 15%–30% false negatives: patients with the disease whose test is negative,” Hirsch says. “Coding guidelines allow U07.1 to be placed on the claim if the physician diagnoses COVID-19 despite a negative test. There are lab and X-ray findings that are typical and allow the diagnosis to be made confidently.”

However, organizations should prepare to comply with the new requirement by September 1. Organizations must ensure processes are in place to obtain accurate test results for all COVID-19 admissions. Clinical, HIM, CDI, and billing staff should be informed of the change, and coders and CDI specialists should query for missing test results. Organizations may need to review processes for obtaining test results from outside entities and should consider processes for holding inpatient COVID-19 claims that are pending test results. Organizations should reach out to their MACs to discuss operational and technical questions.

Editor's note: This article was updated on August 19 to reflect additional information about lanague in the CARES Act.