Reimbursement hopes raised, then dashed

Alzheimer’s coverage stands pat

It seemed almost too good to be true. In a March 31 article, The New York Times reported that Medicare had quietly made changes that would prevent denials in coverage for patients battling Alzheimers’ Disease, including hospice services. In the days that followed, hospice leaders scrambled to figure out exactly what these changes meant. Would patients in the advanced stages gain easier access to hospice services? Would physicians be empowered to certify a terminal diagnosis sooner, allowing patients to be referred to hospice sooner?

As it turns out, hospice eligibility remains unchanged despite Medicare’s recent policy announcement. The change reported in the Times is not a change at all. Rather, it’s a clarification of existing Medicare policy and an attempt to direct Medicare carriers in reimbursement for care related to the disease.

"This week, a New York Times article suggested that Alzheimer’s patients were newly eligible for hospice care and a number of other Medicare benefits," the National Hospice and Palliative Care Organization (NHPCO) of Alexandria, VA, said in a written statement a few days after the story. "The news has prompted questions about what has changed for Alzheimer’s patients and their hospice eligibility. After reviewing the issue, however, NHPCO has determined that the policies governing Alzheimer’s patients’ eligibility for hospice care remain unchanged."

No more edits

The change the Times refers to is a Sept. 25, 2001, Centers for Medicare and Medicaid Services (CMS) Program Memorandum (#AB-01-135), which states that contractors may not install edits that result in the automatic denial of services based solely on the ICD-9 codes for dementia. The clarification of existing regulations, CMS administrator Tom Scully says, is in "response to advocate concerns that Medicare contractors were increasingly denying services to Medicare beneficiaries based solely because they had been diagnosed with Alzheimer’s disease."

CMS issued the memorandum to clarify existing reimbursement policies. The September 2001 instructions direct Medicare contractors not to install system edits that would automatically deny Medicare-covered services based solely on claims for dementia.

Specifically, the memo stated: "Contractors may not use ICD-9 codes for dementia alone as a basis for determining whether a Medicare-covered benefit was reasonable and necessary, because these codes do not define the extent of a beneficiary’s cognitive impairment."

CMS provided the following example: A claim submitted with only a diagnosis of Alzheimer’s disease (ICD-9 code 331.0) may entitle a beneficiary to evaluation and management visits and therapies if the contractor determines that these therapies are reasonable and necessary when reviewed in the context of a beneficiary’s overall medical condition. Because dementia is a diagnostic term with broad clinical implications, it may not support the medical necessity of a Medicare-covered benefit when used alone. For this reason, contractors should continue performing routine data analysis to identify aberrant billing patterns on claims for Medicare-covered services provided to beneficiaries with dementia. They also should instruct providers to enter the primary diagnosis or condition as well as secondary diagnoses or conditions that most closely reflect the medical necessity of the billed service on line 21 of Form HCFA-1500.

For instance, a provider using physical therapy to treat a patient with an unsteady gait due to Alzheimer s dementia may enter either ICD-9 code 331.0 (Alzheimer’s disease) or ICD-9 code 781.2 (Abnormality of gait) as the primary diagnosis.

If the provider enters ICD-9 code 331.0 as the primary diagnosis, then he or she should include ICD-9 code 781.2 as the secondary diagnosis to support the medical necessity of the physical therapy service. When a beneficiary with dementia experiences an illness or injury unrelated to his or her dementia, the provider should submit a claim with a primary diagnosis that most accurately reflects the need for the provided service. For example, following a hip replacement in a patient with Alzheimer’s disease, a physical therapy provider should submit a claim using ICD-9 code V43.64 (Hip joint replacement by artificial or mechanical device or prosthesis) as the primary diagnosis, not ICD-9 code 331.0 (Alzheimer s disease).