Transcript APC/OPPS Update for CY2012

APC Update for CY2013
Sponsored By:
AACI Web Site
www.APCNow.com
Presented By:
Duane C. Abbey, Ph.D., CFP
Abbey & Abbey, Consultants, Inc.
[email protected]
http://www.aaciweb.com
http://www.APCNow.com http://www.HIPAAMaster.com
Version 14..0 - Generic
Notes © 1994-2013, Abbey & Abbey, Consultants, Inc.
CPT® Codes – © 2013-2013 AMA
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 1
Presentation Faculty
Duane C. Abbey, Ph.D., CFP – Dr. Abbey is a healthcare consultant and educator with over 20
years of experience. He has worked with hospitals, clinics,
physicians in various specialties, home health agencies and other health care providers.
His primary work is with optimizing reimbursement under various Prospective Payment
Systems. He also works extensively with various compliance issues and performs
chargemaster reviews along with coding and billing audits.
Dr. Abbey is the President of Abbey & Abbey, Consultants, Inc. A wide range of consulting
services is provided across the country including charge master reviews, APC compliance
reviews, in-service training, physician training, and coding and billing reviews.
Dr. Abbey is the author of fourteen books on health care, including:
•“Non-Physician Providers: Guide to Coding, Billing, and Reimbursement”
•“Emergency Department: Coding, Billing and Reimbursement”, and
•“Chargemasters: Strategies to Ensure Accurate Reimbursement and Compliance”.
Recent books include: “Compliance for Coding, Billing & Reimbursement A Systematic
Approach to Developing a Comprehensive Program”, “Introduction to Healthcare
Payment Systems”, “Fee Schedule Payment Systems” and “Prospective Payment
Systems” from Taylor and Francis. He has just finished the fourth book in the Healthcare
Payment System Series; “Cost-Based, Charge-Based and Contractual Payment Systems”.
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 2
Disclaimer
This workshop and other material provided are designed to provide accurate and
authoritative information. The authors, presenters and sponsors have made every
reasonable effort to ensure the accuracy of the information provided in this
workshop material. However, all appropriate sources should be verified for the
correct ICD-9-CM Codes, ICD-10-CM Diagnosis Codes, ICD-10-PCS Procedure
Codes, CPT/HCPCS Codes and Revenue Center Codes. The user is ultimately
responsible for correct coding and billing.
The author and presenters are not liable and make no guarantee or warranty;
either expressed or implied, that the information compiled or presented is errorfree. All users need to verify information with the Fiscal Intermediary, Carriers,
other third party payers, and the various directives and memorandums issued by
CMS, DOJ, OIG and associated state and federal governmental agencies. The
user assumes all risk and liability with the use and/or misuse of this information.
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 3
APC Update for CY2013
Objectives
 To review the 2013 updates to the key features of the APC payment system.
 To appreciated the trends in modifications being made to APCs over the
years.
 To understand the complex nature of APCs and associated compliance
issues including RAC concerns.
 To appreciate the impact of proper coding and billing on APCs.
 To understand the impact of the 2013 changes on the chargemaster,
charges and the cost report for APCs.
 To review the 2013 update on high impact areas such as observation, the
Emergency Department, interventional radiology and associated areas.
 To review changes to the Provider-Based Rule (PBR) for 2013.
 To discuss anticipated future changes and directions for APCs.
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 4
APC Update for CY2013
Acronyms/Terminology
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APCs – Ambulatory Payment Classifications
APGs – Ambulatory Patient Groups
ASC – Ambulatory Surgical Center
CAH – Critical Access Hospital
CCRs – Cost-to-Charge Ratios
CPT – Current Procedural Terminology
E/M – Evaluation and Management
FFS – Fee-for-Service
HCPCS – Healthcare Common Procedure Coding System
ICD-9-CM – International Classification of Diseases, Ninth Edition, Clinical
MAC – Medicare Administrative Contractor
MedPAC – Medicare Advisory Commission
MPFS – Medicare Physician Fee Schedule
NCCI – National Correct Coding Initiative
AWV – Annual Well Visit
PPPS – Personalized Preventive Plan Services
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 5
APC Update for CY2013
Acronyms/Terminology
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NCD/LCD – National/Local Coverage Decision
NTIOL –New Technology Intraocular Lens
OCE – Outpatient Code Editor
OPD – [Hospital] Outpatient Department
OPPS – [Hospital] Outpatient Prospective Payment System
PHP – Partial Hospitalization Program
PM – Program Memorandum
PPS – Prospective Payment System
QIO – Quality Improvement Organization
SI – Status Indicator
ASC – Ambulatory Surgical Center
RBRVS – Resource Based Relative Value System
MPFS – Medicare Physician Fee Schedule  Developed through RBRVS
VBP – Value Based Purchasing
PCR – Payment to Cost Ratio
 Note: The Federal Register entry has pages of acronyms!
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 6
APC Update for CY2013
General Comments
 APCs are becoming increasingly complex and more difficult to understand.
 Enormous Federal Register entries are now the norm.
 APCs represent a payment system that is out of control.
 Significantly increased bundling through packaging is still being added.
 APCs appear to be moving back toward APGs.
 There are wide variations in payments from year to year.
 Significant compliance concerns exist within the overall APC payment
system.
 In some cases these compliance concerns result because of lack of
explicit guidance from CMS.
 At some point the RAC auditors will become more involved in APCs.
 APCs and the underlying coding systems (i.e., CPT and HCPCS) generate
constant change and the need to update.
 Tracking and verifying that correct payment is received is difficult.
 It is critical to track adjudication and overall payment.
 Major issues with hospital charges, CCRs and the cost report are present.
 Federal Register Fanatics  Look for how many times the word
‘believe’ is used by CMS. What are you allowed to ‘believe’?
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 7
APC Update for CY2013
General Comments
 Note: All citations to the Federal Register are to the Examination Copy that
was released on November 1, 2012. Official publication was on November
15, 2012. Note that implementation is January 1, 2013. Page numbers are
provided as reference, again from the Examination Copy.
 There are a few references in the notes to the November 1, 2011 Federal
Register from last year. Page numbers plus the 1525-FC reference is for
last years Federal Register.
 This Federal Register entry discusses a number of different topics. Not all
the topics discussed necessarily relate to APCs (Ambulatory Payment
Classifications).
 HOPPs
 ASC – Payment and Quality Reporting
 Electronic Reporting Pilot
 Inpatient Rehabilitation Facilities Quality Reporting
 Revision to Quality Improvement Organization Regulations
 Also, there are some hospital related topics discussed in the November 16,
2012 Federal Register for the Medicare Physician Fee Schedule. See new
reporting requirements for PT/OT/ST. Technically, these are not part of
APCs or HOPPS.
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 8
APC Update for CY2013
APC Background Information
 APC Fundamentals
 Encounter Driven System
• Some Exceptions – Example: Two separate blood transfusions on
the same day or two imaging services at different times on the
same day.
 CPT/HCPCS Code Driven
• If the service is not coded with a CPT or HCPCS (and/or proper
modifiers), then there will be absolutely no payment!
 APC Grouper  Multiple APCs from Given Claim
 Inpatient-Only Procedures
• Surgery, if performed outpatient, will not be paid at all! (Patient
Liability?)
• How is this list determined?
 Covered, Non-Covered and Payment System Interfaces
• Example: Self-Administrable Drugs
 Pass-Through Payments – Directly Based on Charges Made – Covert
Charges to Costs How? (Hint: Cost-to-Charge Ratios)
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 9
APC Update for CY2013
APC Background Information
 APC Weight, and Thus Payment, Determination
 Hospital Charges Converted to Costs
• How is this done?
• Do we charge for everything?
• Do we charge correctly for everything?
 Statistical Process Using the Costs
• Geometric Mean
• Mean Cost for Given APC/Mean Cost for All APCs = the APC Weight
 Variation of Costs Within a Given APC Category
• 2-Times Rule – “ … if the median cost of the highest cost item or
service within an APC group is more than 2 times greater than the
median of the lowest cost item or service within that same group.”
(Page 368 – CMS-1525-FC)
• 2-Times Rule Exception List
 Examples:
o 0057 Bunion Procedures
o 0325 – Group Psychotherapy
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 10
APC Update for CY2013
APC Background Information
 Use of Claims to Statistically Develop the APC Weights
 Because outpatient encounters often involve multiple services, the APC
grouping process often (if not a majority of the time) generates multiple
APCs.
 CMS can use only pure claims, that is, claims that group to a single
APC. These are called ‘singleton’ claims.
 CMS is trying very hard to get around this situation because many of
the claims filed by hospitals never get considered when the actual APC
weights are determined.
• Small Example: CPT=86891 – Intra- or Post-Operative Blood
Salvage
 A device is used to save blood, reprocess the blood and
generally re-infuse.
 Is it possible to have ONLY 86891 on a claim?
 What kind of payment do we have for 86891?
 What are the costs involved?
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 11
APC Update for CY2013
APC Background Information
 APC Cost Outliers
 Complicated Two-Tiered Formula
 Based on Excessive Costs - How are costs determined?
 Nationally, does CMS make full outlier payments?
 Provider-Based Rule (42 CFR §413.65)
 Provider-Based Clinics
 Provider-Based Clinical Services
 Potentially, two claim forms filed – CMS-1450 (UB-04) for technical
component and CMS-1500 (1500) for professional component.
 Reduction in payment for professional component
• Site-of-Service Differential in RBRVS (MPFS)
• Place-of-Service (POS) driven on CMS-1500
 Series of Criteria to Meet If to be Provider-Based
• On-Campus versus Off-Campus
• See Physician Supervision Developments  Important
 Changes in rules, regulations and interpretations.
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 12
APC Update for CY2013
APC Background Information
 APC Advisory Panel
 CMS has developed an ever expanding APC Advisory Panel which they
are now extending to a super panel to determine appropriate
supervisory levels.
 “The Data Subcommittee is responsible for studying the data issues
confronting the APC Panel and for recommending options for resolving
them. The Visits and Observation Subcommittee reviews and makes
recommendations to the APC Panel on all technical issues pertaining to
observation services and hospital outpatient visits paid under the
OPPS (for example, APC configurations and APC payment weights).
The Subcommittee for APC Groups and SI Assignments advises the
Panel on the following issues: the appropriate SIs to be assigned to
HCPCS codes, including but not limited to whether a HCPCS code or a
category of codes should be packaged or separately paid; and the
appropriate APCs to be assigned to HCPCS codes regarding services
for which separate payment is made.” (Page 47 – CMS-1525-FC)
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 13
APC Update for CY2013
APC Background Information
 ASCs – Ambulatory Surgical Centers
 In CY2008 CMS Started a Hybrid of APCs and RBRVS
 FR entries for APCs will now also be for ASCs
 ASC Surgery List
• Regular ASC Surgeries
• Office-Based Surgeries  New Additions
• Conditions for Coverage (CfCs)  New Acronym
• Additions and Deletions to Lists
 Payment Formula
• ASC Surgery  65% of APC
• Office-Based Surgeries – Lesser of:
 65% of APC or
 Non-Facility PE RVU from MPFS
• Physician Paid Facility MPFS (As With Hospitals)
 Separate Payment for Certain Ancillary Services
 Did all the features of APCs translate over?
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 14
APC Update for CY2013
By The Numbers
 Basically a 1.8% Market Basket Update  Several Factors Involved
 Conversion Factor = $71.313 versus $70.016 for CY2012 (+1.85%)
 Assumes Quality Reporting  Further 2.0% reduction if not.
 Supposedly 2.60% - 0.70% - 0.10% = 1.80%
 Wage Index Changes  See IPPS
 Statewide CCRs  See Table 8 – Interesting Just To Peruse
 SCHs  7.10% Increase on Budget Neutral Basis (Includes EACHs)
 Cost Outlier
 Fixed Threshold from $2,175.00 for CY2010 to $2,025.00 for CY2011 to
$1,900.00 for CY2012 to $2,025.00 for CY2013
• This is a fairly significant decrease. What is happening?
 Labor-Related Calculation  Remains the same.
 Co-Payment Amounts
 Still struggling to get to the target of a 20% coinsurance to calculate the
copayment amount.
 Drug Packaging Threshold
 $60.00 for CY2009 moved to $65.00 for CY2010 and $70.00 for CY2011
to $75.00 for CY2012 and for CY2013 it is $80.00.
 Final ASC Conversion Factor - $41.401 ($41.401/$71.313 = 58.05%)
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 15
APC Update for CY2013
By The Numbers
 TOPs – Transitional Outpatient Payment
 “Effective for services provided on or after March 1, 2012, SCHs
(including EACHs) with greater than 100 beds are no longer eligible for
TOPs, in accordance with section 308 of Pub. L. 112-78. Effective for
services provided on or after January 1, 2013, a rural hospital with 100
or fewer beds that is not an SCH and an SCH (including an EACH) are
no longer eligible for TOPs, in accordance with section 3002 of Pub. L.
112-96. (Page 300)
 For SCHs (including EACHs), the 7.1% increase will continue.
 See also, Children’s Hospitals and Cancer Hospitals
 Wage Index
 “In response to concerns frequently expressed by providers and other
relevant parties that the current wage index system does not effectively
reflect the true variation in labor costs for a large cross-section of
hospitals, two studies were undertaken by the Department.” (Page 285)
 “After consideration of the public comments we received, we are
finalizing our policy to adopt the FY 2013 IPPS wage index for the CY
2013 OPPS in its entirety, including the rural floor, geographic
reclassifications, and all other wage index adjustments. (Page 287)
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 16
APC Update for CY2013
By The Numbers
 SCH and Rural Hospitals
 “After consideration of the public comments we received, we are
finalizing our CY 2013 proposal, without modification, to apply the 7.1
percent payment adjustment to rural SCHs, including EACHs, for all
services and procedures paid under the OPPS in CY 2013, excluding
separately payable drugs and biologicals, devices paid under the passthrough payment policy, and items paid at charges reduced to costs.”
(Page 303)
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 17
APC Update for CY2013
By The Numbers
 Statewide Average Default CCRs (Samples)

CY2013 CY2012
 ARIZONA
RURAL 0.238
0.237
 ARIZONA
URBAN 0.190
0.190
 FLORIDA
RURAL 0.182
0.182
 FLORIDA
URBAN 0.167
0.164
 IOWA
RURAL 0.296
0.296
 IOWA
URBAN 0.269
0.269
 TEXAS
RURAL 0.235
0.236
 TEXAS
URBAN 0.206
0.196
 For chargemaster coordinators these default CCRs can be quite interesting
relative to a given hospitals pricing strategies.
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 18
APC Update for CY2013
Recalibration of APC Relative Weights
 Recalibration and Rebasing Process
 OPPS Update Federal Registers – Typically Long Discussions
 Calculation of Geometric Costs Within APC Categories
 Single Procedure Claims versus Multiple Procedure Claims
• Methodology Carried Over From DRGs – Doesn’t Really Work
• Pseudo Single Procedure Claims
• Bypass Codes
 CCRs – Cost-to-Charge Ratios from Cost Reports
• See Revenue Code-to-Cost Center Crosswalk
• CT & MRI Equipment – Major Moveable vs. Building Equipment
Device Dependent APCs – Expensive Implant or Supply Item Is
Larger than Payment for Service
 Blood and Blood Products  Still Equalizing Payments Due To
Incorrect CCRs
 Updated CPT/HCPCS Codes
 Updated Status Indicators Affecting Packaging
• See Also – Packaged Revenue Codes – Table 2
 Payment Variations  See 2-Times Rule + Payment Change Limitations
 Composite APCs  Observation, Pulmonary Rehab, Etc.
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 19
APC Update for CY2013
Recalibration of APC Relative Weights
 For recalibration of the APC weights, the BIGGEST change is that CMS is
moving from using the ‘median’ as a measure of central tendency over to
the ‘geometric mean’.
 What is the geometric mean?
• Arithmetic Mean – Add the Data Points and Divide by the Number of
Data Points
• Geometric Mean – Multiply the Data Points and Take the Nth Root
where N is the number of data points.
 Data Set #1: 1, 2, 3, 6, 7, 8, 15
 Data Set #2: 1, 1, 2, 4, 6, 9, 11, 18, 21
Median
Arithmetic
Mean
Geometric
Mean
Data Set #1
6.0000
6.0000
4.3660
Data Set #2
6.0000
8.1111
4.9537
 So what does all this mean?  Need to run case-mix models.
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 20
APC Update for CY2013
Recalibration of APC Relative Weights
 Recalibration and Rebasing Process
 New Codes – CPT and HCPCS
• CMS discusses new codes implemented throughout the year along
with addressing new CPT/HCPCS codes.
• See also assignment or reassignment of Status Indicator codes.
 Multiple Imaging Families – Started in CY2009
• Significant Concerns By Hospitals
• Continue with the Composite APCs (8004-8008)
 Packaging Services
• See SI=“Q1”, “Q2”, and “Q3”
• Dependent and Independent Methodology
 CMS continues to discuss and apply the concept of dependent
services and independent services. Ultimately, dependent
services should be bundled (packaged) into independent
services.
 While this is an adjudication issue for the APC Grouper, it is
the same concept as ‘separate procedure’ at the CPT coding
level.
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 21
APC Update for CY2013
CPT/HCPCS Changes For CY2013
 As usual there are hundreds of changes for both CPT and HCPCS. With
the exception of laboratory codes, the rate of change for 2013 is in a fairly
normal range.
 However, some of the CPT changes have a significant impact on APC
grouping and the logic in the I/OCE (Integrated Outpatient Coded Editor).
 For new codes and code sets that are not available at the time of the
proposed changes to APCs, there is a comment period after the final rule is
issues.
 Category III Codes
 0302T-0307T – Intra-cardiac Ischemia Monitoring
 0308T – Ocular Telescope Prosthesis
 Psychiatric Services
 CPT Deleted 28 Psychiatric Codes
 CPT Added 12 New CPT Codes With Add-On Logic
• See 90791-90840
• Timing Issues Relative to Coding
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 22
APC Update for CY2013
CPT/HCPCS Changes For CY2013
 Partial Hospitalization Billable Codes

RC
Description
CPT/HCPCS Codes
 043X
Occupational Therapy
G0129
 0900
Behavioral Health Tx
90791 or 90792
 0904
Activity Therapy
G0176
 0914
Individual Psychotherapy 90785, 90832, 90833, 90834, 90836,
90837,90838, 90845, 90865,
or 90880
 0915
Group Therapy
G0410 or G0411
 0916
Family Psychotherapy
90846 or 90847
 0918
Psychiatric Testing
96119,or 96120
96101, 96102, 96103, 96116, 96118,
 0942
G0177
Education/Training
• Table 43 Page 719
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 23
APC Update for CY2013
CPT/HCPCS Changes For CY2013
 Cardiovascular Stenting
 92980-92981
• Replaced with a new series of codes –
 92928 – Stent + Coronary Angioplasty Major Branch
 92933 – Stent + Atherectomy Major Branch
 92934 – Stent + Atherectomy Additional Branch
 92937 – Bypass Graft – Stent +
 92938 - Bypass Graft – Stent +
 92941 – Acute Artery Bypass
 92943 – Total Occlusion – Single Vessel
 92944 – Total Occlusion – Additional Vessel
• Now codes are needed to address drug-eluting stents for APCs
 G0290 & G0291 are Deleted
 New Sequence – C9600-C9608
• “The interim APC assignment for CPT codes 92928, 92933, 92929,
92934, 92937, 92938, 92941, 92943, and 92944 is APC 0104
($6,114.44), and the interim APC assignment for HCPCS codes
C9600, C9601, C9602, C9603, C9604, C9605, C9606, C9607, and
C9608 is APC 0656 ($7,763.18) for CY 2013.” (Page 113)
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 24
APC Update for CY2013
CPT/HCPCS Changes For CY2013
 Transitional Care Management
 CPT 99495  APC 0605 - $73.68 (See Also MPFS)
• •
Communication (direct contact, telephone, electronic) with the
patient and/or caregiver within 2 business days of discharge;
• •
Medical decision-making of at least moderate complexity during the
service period; and
• •
Face-to-face visit, within 14 calendar days of discharge.
 CPT 99496  APC 0606 - $96.96 (See Also MPFS)
• Communication (direct contact, telephone, electronic) with the
patient and/or caregiver within 2 business days of discharge;
• Medical decision-making of high complexity during the service
period; and
• Face-to-face visit, within 7 calendar days of discharge.
 “Transitional care management is comprised of one face-to-face visit
within the specified timeframes, in combination with non-face-to-face
services that may be performed by the physician or other qualified
health care professional and/or licensed clinical staff under his or her
direction.” (Page 681)
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 25
APC Update for CY2013
Composite APCs – Issues and Changes
 Composite APCs
 Observation – APC=8002 and APC=8003
• See Minor Surgery – Status Indicator “T” Bundling Issue
 Issue has been presented and noted in the Federal Register.
Next year??
• APC 8002  $440.07/$393.15/$394.22/$381.34
• APC 8003  $798.47/$720.64/$714.33/$705.27
 LDR Prostate Brachytherapy – APC=8001
• CPT=55875+77778
• CY2013  $3,254.67 CY2012 $3,339.98; CY2011  $3,229.24
 Electrophysiology Studies – APC=8000
• APC 8000  $11,145.72/$11,311.28/$10,787.46/$10,118.25
• Problematic Area – High variability of services, thus costs.
 Mental Health Services – APC=0034
• See Payment Limit for APC=0176 (Full Day Partial Hospitalization)
• APC 0034 - $191.13/$238.33/$210.89  Wow, significant decrease!
 Multiple Imaging – APCs – 8004, 8005, 8006, 8007, 8008
• Be certain to check code classifications
 Cardiac Resynchronization Therapy Composite APC 0108 - $30,680.01
• See Federal Register Discussion Starting on Page .
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 26
APC Update for CY2013
On-Going APC Issues
 Variation Within APC Categories
 2-Times Rule  Statistical Measure of Too Much Variation
• “… the median cost of the highest cost item or service within an
APC group is more than 2 times greater than the median of the
lowest cost item or service within that same group.” (Page 395 –
CMS-1504-FC)
• Question: How many years can an APC be repeatedly on the list?
• How is this affecting you?
 0057 Bunion Procedures
 0045 – Bone/Joint Manipulation under Anesthesia
 0060 Manipulation Therapy
 0148 – Level I Anal/Rectal Procedures
 0272 - Fluoroscopy
 0325 – Group Psychotherapy
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 27
APC Update for CY2013
On-Going APC Issues
 Variation Within APC Categories
 0006 Level I Incision & Drainage
 0012 Level I Debridement & Destruction
 0045 Bone/Joint Manipulation Under Anesthesia
 0057 Bunion Procedures
 0060 Manipulation Therapy
 0105 Repair/Revision/Removal of Pacemakers, AICDs, or Vascular Devices
 0148 Level I Anal/Rectal Procedures
 0152 Level I Percutaneous Abdominal and Biliary Procedures
 0230 Level I Eye Tests & Treatments
 0254 Level V ENT Procedures
 0272 Fluoroscopy
 0325 Group Psychotherapy
 0330 Dental Procedures
 0340 Minor Ancillary Procedures
 0369 Level III Pulmonary Tests
 0403 Level I Nervous System Imaging
 0409 Red Blood Cell Tests
 0688 Revision/Removal of Neurostimulator Pulse Generator Receiver
 0690 Level I Electronic Analysis of Devices
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 28
APC Update for CY2013
On-Going APC Issues
 2 Times Rule
 Several APCs No Longer Violate the 2-Times Rule
• APC 0128 (Echocardiogram with Contrast)
• APC 0173 (Level II Partial Hospitalization (4 or more services) for
CMHCs)
• APC 0604 (Level 1 Hospital Clinic Visits)
• APC 0655 (Insertion/Replacement/Conversion of a Permanent Dual
Chamber Pacemaker or Pacing)
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 29
APC Update for CY2013
On-Going APC Issues
 New Technologies
 CMS provides a generalized discussion of the goals and objectives for
the new technology payments. CMS makes it fairly clear that they have
no intention of paying for expensive capital equipment that may have
low utilization during the startup years for a new, high technology,
service.
 Movement from New Technologies to Clinical APCs
• G0417-G0419  Surgical pathology prostate needle saturation
 Assign to APC 0661 (Level V Pathology)
 Device Payment
 Pass-Through Expiration Dates
 See FB and FC Modifiers
 See Table 29 for Offsets
 See Table 30 for Listing of Affected Devices
 Device Dependent APCs
 No Cost/Full Credit and Partial Credit
 Hospitals, overall, tend to undercharge for devices. See issues such as
charge compression.
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 30
APC Update for CY2013
On-Going APC Issues
 Device Payment
 “As the commenter noted, the offset reduction may actually be much
greater or much less than the credit received by the hospital,
depending upon the component that was credited. As we have stated in
the past (76 FR 74282), we recognize that, in some cases, the estimated
device cost and, therefore, the amount of the payment reduction will be
more or less than the cost a hospital would otherwise incur. However,
because averaging is inherent in a prospective payment system, we do
not believe this is inappropriate.” (Page 535)
 See APC 0107 and 0108 Description Changes
• 0107 – Level I Implantation of Cardioverter-Defibrillator
• 0108 – Level II Implantation of Cardioverter-Defibrillator
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 31
APC Update for CY2013
On-Going APC Issues
 Blood/Blood Products
 Question About Pre-Storage Pooled, Leukocyte Reduced Platelets
 “Some commenters expressed concern that the proposed APC
payment rates for some blood products are less than the acquisition
costs of those products, citing a published study of a national survey
of blood acquisition and overhead costs. According to the commenters,
the safety and availability of blood may be jeopardized without
adequate payment. The commenters asked that CMS formally consider
and evaluate potential alternative methodologies for setting APC
payment rates for blood products, preferably by seeking input from
affected stakeholders. The commenters also stated that the use of the
geometric mean methodology to calculate blood costs would result in
lower payment rates compared to the use of median costs to calculate
the payment rates for blood and blood products and urged CMS to use
the median cost instead.” (Page 123)
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 32
APC Update for CY2013
On-Going APC Issues
 Blood/Blood Products
 “After consideration of the public comments we received, we are
finalizing our proposed policy, without modification, to continue to
establish payment rates for blood and blood products using our bloodspecific CCR methodology, which utilizes actual or simulated CCRs
from the most recently available hospital cost reports to convert
hospital charges for blood and blood products to costs, for CY 2013.
We continue to believe that this methodology in CY 2013 will result in
costs for blood and blood products that appropriately reflect the
relative estimated costs of these products for hospitals without blood
cost centers and, therefore, for these blood products in general.”
(Pages 125-126)
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 33
APC Update for CY2013
On-Going APC Issues
 Specific APC Categories – Payment and Code Mappings (Examples)
 Each year CMS devotes significant discussion to APC assignments and
mapping of codes.
 Cardiovascular and Vascular Services
• Cardiac Telemetry (APC 0213)
• Mechanical Thrombectomy (APC 0653)
• Non-Congenital Cardiac Catheterization (APC 0080)
• Endovascular Revascularization of the Lower Extremity (APCs
0083, 0229, and 0319)
• External Electrocardiographic Monitoring (APC 0097)
• Echocardiography (APCs 0177, 0178, 0269, 0270, and 0697)
 Gastrointestinal Services
• Laparoscopic Adjustable Gastric Band (APC 0132)
• Transoral Incisionless Fundoplication (APC 0422)
• Gastrointestinal Transit and Pressure Measurement (APC 0361)
 Integumentary System Services
• Extracorporeal Shock Wave Wound Treatment (APC 0340)
• Application of Skin Substitute (APCs 0133 and 0134)
• Low Frequency, Non-Contact, Non-Thermal Ultrasound (APC 0015)
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 34
APC Update for CY2013
On-Going APC Issues
 Specific APC Categories – Payment and Code Mappings (Examples)
 Nervous System Services
• Scrambler Therapy (APC 0275)
• Transcranial Magnetic Stimulation Therapy (TMS) (APC 0216)
• Paravertebral Neurolytic Agent (APC 0207)
• Programmable Implantable Pump (APC 0691)
• Revision/Removal of Neurostimulator Electrodes (APC 0687)
 Radiation Oncology Services
• Proton Beam Therapy (APCs 0664 and 0667)
• Device Construction for Intensity Modulated Radiation Therapy
(IMRT) (APC
• 0305)
• Other Radiation Oncology Services (APCs 0310 and 0412)
• Stereotactic Radiosurgery (SRS) Treatment Delivery Services (APCs
0065, 0066, 0067 and 0127)
• Intraoperative Radiation Therapy (IORT) (APC 0412)
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 35
APC Update for CY2013
On-Going APC Issues
 Drugs, Biological, and Radiopharmaceuticals
 Payable Drugs – ASP+6
 Transitional Pass-Through Payment Process
• Drugs Expiring
• New Drugs on the List
• Nuclear Medicine Concerns
• Contrast Agent Offset
 Packaging Criteria
 Packaging Threshold - $80.00
 CMS Posting Offset Amounts for All Affected APCs
 Policy-Packaged Drugs and Devices
 340B Hospitals – Data Considerations
 “After consideration of the public comments we received, we are
finalizing our proposals, without modification, to continue to package
payment for all nonpass-through diagnostic radiopharmaceuticals and
contrast agents, and implantable biologicals that are surgically inserted
or implanted into the body through a surgical incision or a natural
orifice, regardless of their per day costs.” (Page 268)
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 36
APC Update for CY2013
On-Going APC Issues
 Drugs, Biological, and Radiopharmaceuticals
 “We note that although it is CMS’ longstanding policy under the OPPS
to refrain from instructing hospitals on the appropriate revenue code to
use to charge for specific services, we continue to encourage hospitals
to bill all drugs and biologicals with HCPCS codes, regardless of
whether they are separately payable or packaged, and to ensure that
drug costs are completely reported, using appropriate revenue codes.
We also note that we make packaging determinations for drugs and
biologicals annually based on cost information reported under HCPCS
codes, and the OPPS ratesetting is best served when hospitals report
charges for all items and services with HCPCS codes when they are
available, whether or not Medicare makes separate payment for the
items and services.” (Page 701 – CMS-1525-FC)
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 37
APC Update for CY2013
On-Going APC Issues
 Brachytherapy Sources – See Various A-Codes and C-Codes
 Congressional Mandate – Pay Separately
• Otherwise CMS would probably package these sources into the
associated service.
 Pass-Through Payment (Sort Of) Up To CY2009 – SI=“H”  “K”  “U”
• CMS’s interpretation of ‘charges adjusted to cost’ is interesting.
 CMS Has Developed a Discrete ‘Mini’ APC System for Sources
 “After consideration of the public comments we received, we are
finalizing our proposal to pay for brachytherapy sources at prospective
payment rates based on their source-specific median costs for CY
2012.” (Page 165 – CMS-1525-FC)
 “Consistent with our policy regarding APC payments made on a
prospective basis, we are finalizing our proposal to subject the cost of
brachytherapy sources to the outlier provision of section 1833(t)(5) of
the Act, and also to subject brachytherapy source payment weights to
scaling for purposes of budget neutrality.” (Page 165-166 – CMS-1525FC)
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 38
APC Update for CY2013
On-Going APC Issues
 Brachytherapy Sources – See Various A-Codes and C-Codes
 Commenter Concerns:
• “First, some commenters claimed that there are longstanding
problems with OPPS claims data for brachytherapy source
payment.” (Page 129)
• “Second, commenters stated that brachytherapy source payments
proposed for CY 2013 are unstable and fluctuate significantly from
CY 2012 levels.” (Page 130)
 CMS Responses
• “ … under the budget neutral provision for the OPPS, it is the
relativity of costs of services, not their absolute costs, that is
important, and we believe that brachytherapy sources are
appropriately paid according to the standard OPPS payment
approach.” (Page 132)
• “After consideration of the public comments we received, we are
finalizing our proposal to pay for brachytherapy sources at
prospective payment rates based on their source-specific
geometric mean costs for CY 2013.” (Page 136)
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 39
APC Update for CY2013
On-Going APC Issues
 APC Cost Outliers
 “In summary, for CY 2013, we will continue to make an outlier payment
that equals 50 percent of the amount by which the cost of furnishing
the service exceeds 1.75 times the APC payment amount when both the
1.75 multiple threshold and the final fixed-dollar threshold of $2,025 are
met. For CMHCs, if a CMHC’s cost for partial hospitalization services,
paid under either APC 0172 or APC 0173, exceeds 3.40 times the
payment rate for APC 0173, the outlier payment is calculated as 50
percent of the amount by which the cost exceeds 3.40 times the APC
0173 payment rate. We estimate that this threshold will allocate 0.12
percent of outlier payments to CMHCs for PHP outlier payments. (Page
321)
 CMS continues to work toward a 1% overall limitation on cost-outlier
payments. Thus the fixed dollar amount will typically change each year
based on experience.
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 40
APC Update for CY2013
On-Going APC Issues
 Drug Administration Services
 An area of considerable changes over the last several years.
 Coding and Charge Capture Difficulties
 APC Panel Recommendation – Pay separately for CPT 96368 and 93676,
that is, concurrent infusion and additional pushes.
• CMS has rejected this recommendation and will continue with the
five level APC structure for injections and infusions.
 See also slight changes in guidance from CPT.
APC
CY2013 CY2012 CY2011 CY2010 CY2009
0436
$27.01 $24.82
$26.35
$25.67
$25.03
0437
$39.13 $34.81
$36.88
$37.44
$36.66
0438
$74.69 $72.73
$75.58
$75.69
$74.32
0439
0440
$146.24 $126.71 $128.44 $126.78 $126.80
$230.50 $207.80 $205.86 $219.96 $191.06
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 41
APC Update for CY2013
On-Going APC Issues
 Partial Hospitalization Services
 Hospitals vs. CMHCs
• Two Tiered Costs Structure – Cost Report Data HCRIS
• Two Sets of APCs – Status Indicator “P”
 APC=0172/0173  Level I and II at CMHC
 APC=0175/0176  Level I and II at Hospital
APC
CY2013
CY2012
CY2011
CY2010
0172
$84.96
$97.63
$129.64
$149.84
0173
$109.67
$113.81
$164.43
$210.89
0175
$180.71
$160.71
$204.89
[$149.84]
0176
$238.33
[$210.89]
$228.26
$191.13
 “For hospital-based PHPs, the per diem costs would increase from
approximately $164 under the current median-based methodology to
approximately $183 under the proposed geometric mean-based
methodology for Level I services, and from approximately $225 to
approximately $233 for Level II services.” (Page 695 – CMS-1589-FC)
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 42
APC Update for CY2013
On-Going APC Issues
 Partial Hospitalization Services
 Cost Report Data for CMHCs Through HCRIS
• Note the significant difference in reimbursement (determined via
costs) between hospitals and CMHCs.
• “A few commenters expressed concerns that the technical data on
which CMS relies during the rate setting process are fundamentally
flawed, in that the data do not reflect the full scope of CMHC costs.
These commenters also stated that, due to insufficient cost
reporting instructions for CMHCs, they continue to incorrectly
exclude owner’s salary costs from their cost reports, contributing
to their low median costs.” (Page 797 – CMS-1525-FC)
 Separate Cost Outlier Payments to CMHCs
• “Specifically, we proposed to establish that if a CMHC's cost for
partial hospitalization services, paid under either APC 0172 or APC
0173, exceeds 3.40 times the payment for APC 0173, the outlier
payment would be calculated as 50 percent of the amount by which
the cost exceeds 3.40 times the APC 0173 payment rate.” (Pages
800-801 – CMS-1525-FC)
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 43
APC Update for CY2013
On-Going APC Issues
 Partial Hospitalization Services
 Significant Coding Changes – See AMA
• “Effective January 1, 2013, CPT codes 90801 and 90802 will be
deleted and the E/M services will be billed using the following CPT
codes: CPT code 90791 (Psychiatric diagnostic evaluation (no
medical services) when completed by a nonphysician) and CPT
code 90792 (Psychiatric diagnostic evaluation (with medical
services) when completed by a physician).” (Page 713)
 See Table 42 For Crosswalks From Old To New CPT Codes
• CPT 90801  CPT 90791 or CPT 90792 (w/o and w Medical Services)
• CPT 90817  E/M Code (Not on Time) + 90833 add-on code
• CPT 90824  E/M Code (Not on Time) + 90833 (30 minute add-on) +
90785 (Interactive Add-On Code w/ patient and/or family)
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 44
APC Update for CY2013
On-Going APC Issues
 Inpatient-Only Procedures
 “The inpatient list specifies those services for which the hospital will be
paid only when provided in the inpatient setting because of the nature
of the procedure, the underlying physical condition of the patient, or
the need for at least 24 hours of postoperative recovery time or
monitoring before the patient can be safely discharged.” (Page 8902 –
CMS-1525-FC)
 Commenters continue to recommend doing away with this list.
• “Many commenters suggested that the inpatient only list be
eliminated in its entirety. The commenters indicated that hospitals
already meet minimum safety standards through Joint Commission
accreditation and the Medicare hospital conditions of participation.
Commenters suggested that, if the inpatient only list cannot be
eliminated in its entirety, an appeals process be developed.
Commenters believed that an appeal process would give the
hospital the opportunity to submit documentation on the
physician’s intent, the patient’s clinical condition, and the
circumstances that enabled the patient to be sent home safely
without an inpatient stay.” (Page 810 – CMS-1525-FC)
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 45
APC Update for CY2013
On-Going APC Issues
 Inpatient-Only Procedures
 Deletions from the List
• Only two codes were proposed for removal from the list:
 CPT 22856 – Total Disc Arthroplasty
 CPT 27447 – Knee Arthroplasty
• Commenters were significantly opposed to removing CPT 27447
from the list. CMS has conceded and this code will stay on the list.
 Note that the procedures on the list are determined in part on a
statistical basis and not purely on a clinical basis. This list must be
carefully reviewed each year. 39 Codes Were Requested to be
Removed.
• Watch for Carotid Stenting – This will probably be removed from the
list at some point in the near future. (See CY2010)
 “Commenters further noted that performing total knee arthroplasty in
the outpatient setting may impact the types of rehabilitation services
available to patients upon completion of the surgery, and may make
justifying the medical necessity of inpatient rehabilitation more difficult.
Furthermore, commenters expressed concern that commercial carriers
will change total knee arthroplasty to an outpatient procedure, thereby
making it more difficult to get such a procedure authorized.” (Page 727)
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 46
APC Update for CY2013
On-Going APC Issues
 “-CA” Modifier – APC=0375
 APC 0375 - Ancillary Outpatient Services When Patient Expires
• Example: Patient rushed to hospital ED, taken to surgery and then
expires without being admitted to hospital.
• Blanket payment for various types of procedures.
 Better Database and Proper Utilization
• CY2013 $6,612.29
• CY2012  $6,038.66
• CY2011  $6,372.10
• CY2010 $5,965.94
• CY2009  $4,770.52
 Question: Why don’t we use a process similar to the “-CA” modifier for
inpatient only procedures that are inadvertently performed on an
outpatient basis?
• We could do away with the inpatient-only list, and at least there
would be a default average payment for such services instead of
making then the patient’s liability.
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 47
APC Update for CY2013
Physician Supervision Changes
 Starting in CY2008 the Issue of Physician Supervision Took On A Life Of Its
Own
 Previous guidance was provided in April 7, 2000 Federal Register
relative to direct physician supervision at off-campus provider-based
clinics.
 In CY2008 CMS started clarifying their guidance on this requirement as
part of the Provider-Based Rule (PBR).
 From CY2008 to the present there has been significant discussions in
the Federal Registers and changes to the CMS manuals.
 Distinguish
• Diagnostic vs. Therapeutic Supervision
• Off-Campus vs. On-Campus (Out-of-Hospital) vs. In-Hospital
• General vs. Direct vs. Personal Supervision
 General Application of “Incident-To” From the SSA
 CAH Issue – Differences in requirement from the CAH CoPs and the
PBR Supervision requirements.
 Note: At issue is a significant compliance concern. If auditors were to
determine that proper physician supervision was not provided, then
recoupments could be demanded.
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 48
APC Update for CY2013
Physician Supervision Changes
 Physician Supervision Discussions
 For 2011: “The definition of direct supervision will be revised simply to
require immediate availability, meaning physically present,
interruptible, and able to furnish assistance and direction throughout
the performance of the procedure but without reference to any
particular physical boundary. Since the new definition will now apply
equally in the hospital or in on-campus or off-campus PBDs, we are
removing paragraphs (a)(1)(iv)(A) and (B) of §410.27 altogether. The
new definition of direct supervision under §410.27(a)(1)(iv) will now
state, “For services furnished in the hospital or CAH or in an outpatient
department of the hospital or CAH, both on- and off-campus, as defined
in section 413.65 of this subchapter, ‘direct supervision’ means that the
physician or nonphysician practitioner must be immediately available
to furnish assistance and direction throughout the performance of the
procedure. It does not mean that the physician or nonphysician
practitioner must be present in the room when the procedure is
performed.” (Page 828, CMS-1504-FC)
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 49
APC Update for CY2013
Physician Supervision Changes
 Physician Supervision Discussions
 From 2012 Update: “Therefore, in the CY 2009 OPPS/ASC proposed rule
and final rule with comment period (73 FR 41518 through 41519 and 73
FR 68702 through 68704, respectively), we clarified and restated the
various supervision requirements for outpatient hospital therapeutic
and diagnostic services. We clarified that outpatient therapeutic
services furnished in the hospital and in all PBDs of the hospital,
specifically both on-campus and off-campus PBDs, must be provided
under the direct supervision of physicians. We also reiterated that all
outpatient diagnostic services furnished in PBDs, whether on or off the
hospital’s main campus, should be supervised according to the levels
assigned for the individual tests under the MPFS. (Page 825 – CMS1525-FC)
 Note also that CMS is recognizing all three supervision levels:
Personal, Direct and General on the outpatient therapeutic side as well
as on the diagnostic side (see MPFS).
• Question: With the above language, do the supervision requirement
apply to in the hospital PBDs and well as PBDs on the campus but
outside the hospital?
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 50
APC Update for CY2013
Physician Supervision Changes
 Physician Supervision Discussions
 “Specifically, for these services we redefined direct supervision to
remove all requirements that the supervisory practitioner remain
present within a particular physical boundary, although we continued
to require immediate availability. We also established a new category of
services, “nonsurgical extended duration therapeutic services”
(extended duration services), which have a substantial monitoring
component. We specified that direct supervision is required for these
services during an initiation period, but once the supervising physician
or NPP has determined that the patient is stable, the service can
continue under general supervision.” (Page 829 – CMS-1525-FC)
 Cardiac Rehabilitation and Pulmonary Rehabilitation – Only physicians
may meet the physician supervision requirements.
 CAHs and Small Rural Hospitals (Less than 100 beds) have been
exempted from the supervision requirements now through 2013.
 The key phrase “immediately available” remains undefined.
• CMS has given some counterexamples. For instance, a supervising
physician must be interruptible.
• How can a physician/practitioner be immediately available and not
on campus??
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 51
APC Update for CY2013
Physician Supervision Changes
 Physician Supervision Discussions
 CMS has decided to establishing an independent advisory review
process.
• Note: This is a standard bureaucratic approach when difficult
decisions must be made. See ‘share-the-blame’ concept.
 CMS intends to use the APC Advisory Panel
• But this panel addresses only APCs, that is, HOPPS
• Need to include representatives for CAHs and small rural hospitals.
• Qualifications of panel members.
 Clinicians vs. Non-Clinicians vs. Non-Physician Practitioner vs.
Nursing Staff
• Scope of authority limited to supervision issues.
 Keep in mind that this panel has only advisory capabilities.
CMS can still do whatever they want to do.
• Process and criteria for determining which services require what
level of supervision. Subregulatory Process – Not in the manuals.
• Services Not Described by CPT Codes
• Starting Agenda
 Extension Beyond “Incident-To” Services
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 52
APC Update for CY2013
Physician Supervision Changes
 Physician Supervision Discussions
 “We stated in the proposed rule and continue to believe that, while the
statute does not explicitly mandate direct supervision, direct
supervision is the most appropriate level of supervision for most
hospital outpatient services that are authorized for payment as
“incident to” physicians’ services. We believe that the “incident to”
nature of hospital outpatient therapeutic services under the law permits
us to recognize specific circumstances in which general supervision is
appropriate, as we have for extended duration services, and that CMS
has authority to accept a recommendation by the review entity of
general supervision for a given service. However, we continue to
believe that direct supervision is the most appropriate level of
supervision for the majority of hospital outpatient therapeutic services
and, as such, it is the default supervision standard.” (Page 847 – CMS1525-FC)
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 53
APC Update for CY2013
Physician Supervision Changes
 Clarification for PT/OT/ST – CAHs vs. PPS Hospitals
 “In this final rule with comment period, we are clarifying that the supervision
and other requirements of the regulation at § 410.27 apply to facility services
that are paid to hospitals under the OPPS and to these same services when
they are furnished in CAHs and paid on a reasonable cost basis. In OPPS
hospitals, the requirements of § 410.27 do not apply to professional services
that are separately billed under the MPFS or to PT, SLP, and OT services
that are billed by the hospital as therapy services and are paid at the
applicable amount based on the MPFS. The requirements of § 410.27 also
do not apply to these same professional and PT, SLP, and OT services when
they are furnished in CAHs.” (Page 738)
 “In OPPS hospitals, a small subset of “sometimes therapy” PT, SLP, and OT
services are paid under the OPPS when they are not furnished as therapy,
meaning not under a certified therapy plan of care. Because the supervision
and other conditions of payment under § 410.27 apply to this subset of
“sometimes therapy” services when they are furnished in OPPS hospitals as
nontherapy services … those conditions of payment also apply to this subset
of “sometimes therapy” services when they are furnished as nontherapy in
CAHs.” (Page 738)
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 54
APC Update for CY2013
Physician Supervision Changes
 Enforcement of Physician Supervision Rules (CAHs & Small Rural)
 “Regarding the enforcement instruction, as we discussed in the CY
2013 OPPS/ASC proposed rule, we will extend the enforcement
instruction one additional year through CY 2013. This additional year,
which we expect to be the final year of the extension, will provide
additional opportunities for stakeholders to bring their issues to the
Panel, and for the Panel to evaluate and provide us with
recommendations on those issues.” (Pages 742-743)
• Panel – Special Extended APC Panel – Determine which services
require only general supervisions vs. direct supervision (vs.
personal supervision).
• See CMS website for additional findings before January 1, 2013.
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 55
APC Update for CY2013
Physician Supervision Changes
 Physician Supervision Discussions
 OK, So What Does All This Mean to Hospitals?
 For 2013 the actual rules and regulations concerning physician
supervision are not being substantively changed.
• Some issues are clarified, for example, three levels of supervision
on the therapeutic side.
 The hold-harmless for CAHs and small rural hospitals is being
continued.
 However, for most hospitals, the direct physician supervision
requirement will need to be attained for virtually all outpatient services
regardless of location. See off-campus vs. on-campus vs. in the
hospital.
 The advisory panel/committee is being established with all the
bureaucratic trappings.
• How long will it take for this panel to actually produce meaningful
resutlts?
• And, will CMS accept the recommendations?
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 56
APC Update for CY2013
Inpatient vs. Outpatient Observation
 In Section XI. – Extended Discussion of the issue of inpatient admissions
that are later determined as medically unnecessary.
 “We received approximately 350 public comments in response to our
solicitation in the CY 2013 OPPS/ASC proposed rule from hospitals and
hospital associations, physician associations, rehabilitative and longterm care facilities, beneficiaries, beneficiary advocacy organizations,
Quality Improvement Organizations (QIOs), organizations specializing
in medical necessity review, and other interested parties. The
commenters provided significant input, and the majority requested that
CMS not implement a comprehensive solution or set of solutions
regarding patient status in the CY 2013 OPPS/ASC final rule with
comment period. Instead, many commenters recommended that CMS
develop an informed course of action in the upcoming months through
a formal, ongoing dialogue with all interested stakeholders (for
example, through open door forums or a task force). A few commenters
recommended a more immediate course of action to limit beneficiary
liability for SNF care and for the difference in beneficiary cost-sharing
between hospital inpatient and outpatient services.” (Page 751)
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 57
APC Update for CY2013
Inpatient vs. Outpatient Observation
 Inpatient vs. Outpatient
 See AB Rebilling Demonstration
 Clarifying Current Admission Instructions or Establishing Specified
Clinical Criteria
 Hospital Utilization Review
• “Several commenters stated that some hospitals do not have UR
staff on hand outside normal business hours or on weekends to
assist with patient status determinations, and that this is especially
problematic for patients with short inpatient stays.” (Page 759)
 Prior Authorizations
 Time-Based Criteria for Inpatient Admission
 See Also the O’Connor Hospital Ruling
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 58
APC Update for CY2013
Inpatient vs. Outpatient Observation
 Inpatient vs. Outpatient
 Rules for the External Review of Inpatient Claims
 Improving Beneficiary Protections
• “These included providing Medicare coverage for self-administered
drugs in the hospital outpatient department, waiving beneficiary
coinsurance, capping the sum of outpatient services at the inpatient
deductible, or establishing annual maximum out-of-pocket costs.”
(Page 769)
 Revising the Qualifying Criteria for Skilled Nursing Facility (SNF)
Coverage
 “We [CMS] appreciate all of the public comments that we received on
this multi-faceted topic. We will take all of the public comments that we
received into consideration as we consider future actions that we could
potentially undertake to provide more clarity and consensus regarding
patient status for purposes of Medicare payment.” (Page 772)
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 59
APC Update for CY2013
Hospital Outpatient Visits
 Hospital Outpatient Visits – A Continuing Area of Challenge
 Direct Admits to Observation – G0379
• Changed APC Mapping To APC 0608 – Level 5 (99205/99215)
 SI=“Q3” Payment $175.79
• Question: When do you receive separate payment for G0379?
 “We agree with the commenter that we should not move to national
guidelines for visits in CY 2013. As we have in the past (76 FR 74345
through 74346), we acknowledge that it would be desirable to many
hospitals to have national guidelines. However, we also understand
that it would be disruptive and administratively burdensome to other
hospitals that have successfully adopted internal guidelines to
implement any new set of national guidelines while we address the
problems that would be inevitable in the case of any new set of
guidelines that would be applied by thousands of hospitals. As we have
also stated in the past (76 FR 74346), if the AMA were to create facilityspecific CPT codes for reporting visits provided in HOPDs [based on
internally developed guidelines], we would consider such codes for
OPPS use.” (Page 673)
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 60
APC Update for CY2013
Hospital Outpatient Visits
 Hospital Visit Coding Guidelines
 One of the greatest concerns on the part of hospitals is whether or not
their mappings are appropriate. Even with the CY2008 principles,
guidance, at best, is very limited and general.
 “In contrast, many commenters urged CMS to move forward with the
implementation of national guidelines for hospitals to report visits,
asserting that CMS has poor data upon which to calculate visit APC
payment rates because there are no standard definitions, and citing the
challenges of having different guidelines in place by different payers.
The commenters recommended that, in the absence of national
guidelines for hospital visit reporting, CMS support a request to the
American Medical Association CPT Editorial Panel to create unique
CPT codes for hospital reporting of emergency department and clinic
visits based on internally developed guidelines.” (Page 773 – CMS1525-FC)
• Coding Issues – Example: Minimal fracture care. Separate code or
place in the E/M levels.
• Design Issues: Point System, Narrative System, Hybrid, Diagnoses
• What incentive does the AMA have for getting into this area?
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 61
APC Update for CY2013
Hospital Outpatient Visits
 Hospital Visit Coding Guidelines
 Commenters are very concerned about contractor audits of the hospital
developed coding guidelines.
• “In addition, some commenters expressed their appreciation for
CMS’ encouragement of its contractors to use a hospital’s own
guidelines when auditing and evaluating the appropriateness of
codes assigned, but requested that hospitals be exempt from audits
of visit billing until national guidelines are implemented.” (Page 773
– CMS-1525-FC)
• CMS’ Response: “We continue to encourage fiscal intermediaries
and MACs to review a hospital’s internal guidelines when an audit
occurs, as indicated in the CY 2008 OPPS/ASC final rule with
comment period (72 FR 66806).” (Page 774 – CMS-1525-FC)
 Exercise: Analyze this response relative to the eventual entry of
the RACs (Recovery Audit Contractors) into this area including
the use of statistical extrapolation.
 Bottom-Line – CMS is making no changes as such for national E/M
coding guidelines. They will continue to monitor their national level
aggregate data for possible aberrations.
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 62
APC Update for CY2013
Hospital Outpatient Visits
 Outpatient Visit Payment Changes – Clinic Visits and ED Visits
APC
Description
0604
Clinic Lev 1
$56.77
$53.84
$52.36
0605
Clinic Lev 2
$73.68
$72.19
$75.13
0606
Clinic Lev 3
$96.96
$95.14
$99.71
0607
Clinic Lev 4
$128.48
$130.56
$128.48
0608
Clinic Lev 5
$175.79
$176.70
$168.92
CPT
APC
99281
0609
99282
0613
99283
0614
99284
99285
CY2013
2013
Pay
2012
Pay
CY2012
CY2011
2011
Pay
SI
$51.82 $50.28
$51.77
V
$92.16 $86.51
$87.25
V
V
0615
$143.36 $136.16 $139.14
$229.37 $218.99 $222.58
0616
$344.71 $323.14 $329.54
Q3
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Q3
Slide # 63
APC Update for CY2013
Ambulatory Surgical Centers
 ASC Payment Process – See Section XIV.
 Now a hybrid of APCs and MPFS.
 Calculation of ASC Payments Depends on Lists of Surgical Procedures
• Office-Based vs. OP Hospital vs. IP Hospital
 Listings Must Be Updated Each Year
• ASCs Surgical Procedures Include Office-Based and Certain OP
Hospital Surgeries  The process for determining these lists is allimportant for ASCs.
 Concerns for excluding surgeries from ASCs.
 Treatment of new codes.
 Determination of covered services, drugs, biologics, etc.
 Transitional Payment Rate Are No Longer In Use
 Many issues that are present for OPPS in general (e.g., “-FB” and “-FC”
modifiers, preventive services, etc.) are present for ASCs also.
• See NTIOLs relative to cataract surgery.
• Significant discussions for cataract surgeries at ASCs.
 Update and Cost Data
• Conversion Factor to $41.401 from $43.190 in 2012 (-0.4%)
 ASC Quality Reporting Program – See Section XVI.
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 64
APC Update for CY2013
Reporting Quality Data
 Quality Reporting for Hospital Outpatient Services
 There is an extensive discussion in the Federal Register addressing
Quality Data Reporting.
 Quality Reporting In Multiple Settings
• “CMS has implemented quality measure reporting programs for
multiple settings of care. These programs promote higher quality,
more efficient health care for Medicare beneficiaries. The quality
data reporting program for hospital outpatient care, known as the
Hospital Outpatient Quality Reporting (Hospital OQR) Program,
formerly known as the Hospital Outpatient Quality Data Reporting
Program (HOP QDRP), has been generally modeled after the quality
data reporting program for hospital inpatient services known as the
Hospital Inpatient Quality Reporting (Hospital IQR) Program
(formerly known as the Reporting Hospital Quality Data for Annual
Payment Update (RHQDAPU) Program).” (Page 1096 – CMS-1525FC)
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 65
APC Update for CY2013
Reporting Quality Data
 CMS Changes
 “In the CY 2013 OPPS/ASC proposed rule (77 FR 45178), we did not
propose to retire any measures from the Hospital OQR Program.” (Page
896)
 Removal of One Chart-Abstracted Measure for CY2013 and Subsequent
Years
• “We emphasize that despite the removal of OP-16 from the Hospital
OQR Program, we expect hospitals to continue the timely triage,
diagnosis and treatment of cardiac and other patients in the ED
according to established clinical guidelines. We also expect that
hospitals will continue their efforts to improve communication and
throughput in the ED.” (Page 902)
 Deferred Data Collection
• Cardiac Rehabilitation (OP-24)
 “With the inclusion of the abstraction instructions for this
chart-abstracted measure in our July 2013 release of the
Specifications Manual, we anticipate that data collection can
begin with January 1, 2014 encounters.” (Page 913)
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 66
APC Update for CY2013
Reporting Quality Data
 HOP QDRP Quality Measures – 2014 On
 OP-1: Median Time to Fibrinolysis
 OP-2: Fibrinolytic Therapy Received Within 30 Minutes
 OP-3: Median Time to Transfer to Another Facility for Acute Coronary
Intervention
 OP-4: Aspirin at Arrival
 OP-5: Median Time to ECG
 OP-6: Timing of Antibiotic Prophylaxis
 OP-7: Prophylactic Antibiotic Selection for Surgical Patients
 OP-8: MRI Lumbar Spine for Low Back Pain
 OP-9: Mammography Follow-up Rates
 OP-10: Abdomen CT – Use of Contrast Material
 OP-11: Thorax CT – Use of Contrast Material
 OP-12: The Ability for Providers with HIT to Receive Laboratory Data
Electronically Directly into their Qualified/Certified EHR System as
Discrete Searchable Data
 OP-13: Cardiac Imaging for Preoperative Risk Assessment for NonCardiac Low-Risk Surgery
 OP-14: Simultaneous Use of Brain Computed Tomography (CT) and
Sinus Computed Tomography (CT)
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 67
APC Update for CY2013
Reporting Quality Data
 HOP QDRP Quality Measures – 2014 On
• OP-15: Use of Brain Computed Tomography (CT) in the Emergency
Department for Atraumatic Headache
• OP-16: Troponin Results for Emergency Department acute
myocardial infarction (AMI) patients or chest pain patients (with
Probable Cardiac Chest Pain) Received Within 60 minutes of Arrival
• OP-17: Tracking Clinical Results between Visits
• OP-18: Median Time from ED Arrival to ED Departure for Discharged
ED Patients
• OP-19: Transition Record with Specified Elements Received by
Discharged Patients
• OP-20: Door to Diagnostic Evaluation by a Qualified Medical
Professional
• OP-21: ED- Median Time to Pain Management for Long Bone
Fracture
• OP-22: ED- Patient Left Before Being Seen
• OP-23: ED- Head CT Scan Results for Acute Ischemic Stroke or
Hemorrhagic Stroke who Received Head CT Scan Interpretation
Within 45 minutes of Arrival
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 68
APC Update for CY2013
Reporting Quality Data
 HOP QDRP Quality Measures – 2014 On
 OP-24: Cardiac Rehabilitation Patient Referral From an Outpatient
Setting (See Additional Comments)
 OP-25: Safe Surgery Checklist Use
 OP-26: Hospital Outpatient Volume Data on Selected Outpatient
Surgical Procedures
 See Also Future Auditing for Compliance Relative to Quality Measures
 See Also Medicare EHR Incentive Program – Electronic Reporting
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 69
APC Update for CY2013
CCRs and Implantable Devices
 Charge Compression and Cost-Report Changes
 “Since the implementation of the OPPS, some commenters have raised
concerns about potential bias in the OPPS cost-based weights due to
“charge compression,” which is the practice of applying a lower charge
markup to higher cost services and a higher charge markup to lower
cost services. As a result, the cost-based weights may reflect some
aggregation bias, undervaluing high-cost items and overvaluing lowcost items when an estimate of average markup, embodied in a single
CCR, is applied to items of widely varying costs in the same cost
center. This issue was evaluated in a report by Research Triangle
Institute, International (RTI).” (Page 72)
 “Specifically, we created one cost center for “Medical Supplies Charged
to Patients” and one cost center for “Implantable Devices Charged to
Patients,” essentially splitting the then current cost center for “Medical
Supplies Charged to Patients” into one cost center for low-cost medical
supplies and another cost center for high-cost implantable devices in
order to mitigate some of the effects of charge compression.” (Pages
72-73)
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 70
APC Update for CY2013
Proposed Changes to APCs
 Other Recommended Changes
 MedPAC
 GAO
 OIG
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 71
APC Update for CY2013
Summary and Conclusions
 APCs Represent CMS’s Most Complex Prospective Payment System
 The Federal Register Entries Are Becoming Enormous
 We are into the Twelfth Year (Depending on how you count) of APCs –
 The variation in payments continues to be a roller coaster although
there appears to be a little more stability. Now CMS is starting to use
the geometric mean; how will this affect specific APC payments?
 Significant policy changes continue to be developed, specifically
increased packaging and more composite APCs.
 Apparently there will no national guidelines for technical component
E/M coding for the ED and provider-based clinics. (AMA Develop?)
 Physician supervision within the Provider-Based Rule has become a
major issue due to CMS clarifying guidance.
 The cost report and appropriate CCRs have become an issue although
this problem has been evident since APCs were implemented.
 While there continue to be areas of difficulty (e.g., singleton claims for
weight development), CMS is whittling away at issues.
 Hospitals should anticipate that APCs will continue to change at a rapid
pace during the coming years.
© 1999-2013 Abbey & Abbey, Consultants, Inc.
Slide # 72