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News to Note – January, 2021

  • The FY2020 Q3 Program for Evaluating Payment Patterns Electronic Report (PEPPER) was released and it notable for two things.
    • First, it is the first PEPPER containing information from the time of the COVID-19 pandemic. We urge you to use caution interpreting your report since the pandemic has clearly affected patient acuity around the county.
    • Second, there is a new measure showing the percentage of total knee arthroplasties done as inpatient. This data is fascinating in that it shows that at least 20% of hospitals in the nation are still doing every knee replacement as inpatient. As a reminder, knee replacement was taken off the inpatient only list three years ago. This means at any time, the Recovery Audit Contractors (RACs) can ask the Centers for Medicare and Medicaid Services (CMS) for permission to start auditing these admissions for proper status and in turn, start denying.
    • The RACs are already approved to audit for medical necessity for both hip and knee replacement and are actively auditing charts. If there is any bright side to this, remember that status audits can only look back six months. So, you have time to rebill for part B payment if you are denied.
  • CMS finalized their proposal to eliminate the inpatient only list over the next three years. They started by removing almost 300 procedures starting January 1st, including all orthopedic and spine procedures.
    • At the same time, they also have put an indefinite moratorium on denials for these surgeries due to improper status. They originally proposed a two-year moratorium, so it was shocking to see them adopt this much more lenient standard.
    • CMS stated the moratorium will be lifted once at least 50% of each surgery is performed as outpatient. Our jaws dropped when we read this – no denials? Really? First, the Quality Improvement Organizations (QIOs) will still be able to audit. Although they cannot deny, they will provide education. It is not known if they will follow the probe and educate process and repeat audits if they find a high error rate on these surgeries, or simply report their findings to CMS.
    • Second, the Office of the Inspector General (OIG) has added short stays to their work plan and the OIG can audit anyone at any time. They love to extrapolate, and the Unified Program Integrity Contractors (UPICs) are always watching data for patterns of improper payments.
    • What does this mean? As before, if a surgery is not on the inpatient only list, you have to follow the CMS Two-Midnight Rule. Remember, despite what you may hear there is more to the Two-Midnight Rule than a patient spending two midnights in the hospital setting. We hope all of you have a system to review all inpatient hospitalizations spanning one midnight (referred to as “one-day stays”) for compliance with the Two-Midnight Rule. Decide if surgical cases should also be added into your process to determine which can be billed as inpatient and which should be rebilled to part B.
  • CMS added 266 procedures to the list of surgeries that can be performed at ambulatory surgery centers (ASCs) including things like infusion of cerebral thrombolytic therapy and robotic prostatectomy.
    • When considering approved payments for prostatectomy as outpatient at the hospital, the base payment is $8,900. At the ASC, it only pays a facility fee of $3,800. We’re not sure if $3,800 even covers the supplies to use the robot!
    • The press releases from CMS stress how all these ASC approvals will lower costs for beneficiaries but they neglect to note that for 150 surgeries, the out-of-pocket costs for patients will be higher in an ASC than at the hospital.
  • It’s a new year and we want to take a moment to introduce or re-introduce you to our corporate officers. If you’d like to reach out to any of them, simply use the “Contact Us” section at
    • Juliet B. Ugarte Hopkins, MD, CHCQM-PHYADV – President
      • A graduate of the University of Illinois College of Medicine, Dr. Juliet Ugarte Hopkins served as co-chief resident while in her Pediatrics residency at Advocate Lutheran General Children’s Hospital in Park Ridge, Illinois. She practiced as a pediatric hospitalist for a decade and also served as medical director of pediatric hospital medicine and vice-chair of pediatrics at Rockford Health System in Rockford, Illinois before transitioning into her current role as the first Physician Advisor for Case Management, Utilization, and Clinical Documentation at ProHealth Care, Inc., a two-hospital, 575-bed health system in Southeastern Wisconsin. Dr. Ugarte Hopkins is board-certified in health care quality and management with a physician advisor sub-specialty by the American Board of Quality Assurance and Utilization Physicians (ABQAURP). She was the first physician board member for the Wisconsin chapter of the American Case Management Association (ACMA), a member of the RACMonitor editorial board, and she was recognized as a “Hirsch’s Hero” by Dr. Ronald Hirsch in 2016. Dr. Ugarte Hopkins lives with her husband in Northern Illinois where they valiantly strive to raise three daughters and a son into strong, thoughtful, and self-assured individuals with a corny sense of humor.
    • Alvin Gore, MD – Vice President Operations
      • A board-certified Family Physician with extensive experience in all aspects of Utilization Management, Dr. Alvin Gore has been performing the duties of a Physician Advisor since 2008. Having completed his training in Family Medicine at the Memorial Center in Johnstown, Pennsylvania, he has remained involved in medical education for a number of years as an Assistant Medical Director of Family Medicine Residency Program. He has been active in training Family Medicine residents and medical students, and has held academic appointments with a number of medical schools. Dr. Gore had significant experience with both inpatient and outpatient patient management, with a particular interest in Utilization Management aspects of hospital practices. Dr. Gore has added Physician Advisors' responsibilities to his academic position at the hospital, gradually expanding his range of duties. He has become a successful liaison between the CM Department and the medical staff. Dr. Gore subsequently accepted a full-time position as Director of Utilization Management at St. Joseph's Health in California, where he is currently responsible for the UM performance at two hospital segments of the Health System's Northern California region. He is responsible for all aspects of the Physician Advisor role including: 2nd level reviews, denial management/ALJ hearings, clinical documentation improvement projects, physician education and outreach, various LOS and cost of care reduction projects, as well as development of the local integrated delivery system.
    • Clarissa Barnes, MD – Vice President Member Engagement
      • A board-certified internist who trained at Johns Hopkins for medical school and residency, Dr. Clarissa Barnes practiced as a traditional internist and a primary-care physician before starting her current work as a hospitalist at Avera McKennan in Sioux Falls, SD. She is a Physician Advisor for Clinical Documentation Integrity and Utilization Review for Avera McKennan as well as a system-level Physician Advisor for Avera Health, which reaches five states and includes over 1,000 physicians, nurse practitioners, and physician assistants. Dr. Barnes believes in leading from the front and improving the practice of medicine for patients and clinicians alike. She has held a variety of administrative roles in the areas of physician wellness and quality in addition to her physician advisor work. She has extensive experience in both written and verbal communications, which includes national-level publications and media appearances. She loves bringing people together to use their varied experiences to solve common problems. She lives in the South Dakota countryside with her husband and three children.
    • Larry Hegland, MD, MMM – Treasurer
      • The System Medical Director for Recovery Audit and Appeal Services for Ministry Health Care, Dr. Larry Hegland also serves as Chief Medical Officer for Ministry Saint Clare’s Hospital, Ministry Good Samaritan Medical Center and The Diagnostic and Treatment Center in Weston, Wisconsin. Dr. Hegland received his training as an anesthesiologist at Northwestern University and possesses a degree in Medical Management from Carnegie Mellon University.
    • Charles Locke, MD, CHCQM-PHYADV – Immediate Past President
      • Dr. Charles Locke has been a Physician Advisor, Utilization/Clinical Resource Management for Johns Hopkins Hospital since 2011 and the Senior Physician Advisor since 2013. He is also an Assistant Professor in the Department of Medicine, Johns Hopkins School of Medicine. He has been active in areas CMS hospital payment and audit policy, including visit status determination and the Recovery Audit (RA) program. Dr. Locke continues to have active clinical duties, including serving a preceptor for Johns Hopkins internal medicine residents in an ambulatory clinic and as an attending physician on one of the inpatient medicine services at Johns Hopkins Hospital. Dr. Locke received his medical degree from the University of Pennsylvania, completed his internship and residency in internal medicine at the University of Virginia Health Sciences Center, and is a graduate of the Johns Hopkins Faculty Development Program for Clinical Educators.

**The news above in addition to many other points of interest for Physician Advisors and other leaders in health care can be heard weekly during Dr. Ronald Hirsch’s Monday Rounds segment on’s Monitor Monday webcast/podcast. Learn More

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