Transcript APC/OPPS Update for CY2011

OPPS Update for CY2011
Sponsored By:
APCNow 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 12.0 - Generic
Notes © 1994-2011, Abbey & Abbey, Consultants, Inc.
CPT® Codes – © 2010-2011 AMA
© 1999-2011 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 eleven 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”.
His most recent books are:
“Compliance for Coding, Billing & Reimbursement A Systematic Approach to
Developing a Comprehensive Program”, “Introduction to Healthcare Payment
Systems”, and “The Medicare Recovery Audit Contractor Program” are available from
the CRC Press a Division of Taylor and Francis.
© 1999-2011 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.
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 3
OPPS Update for CY2011
Objectives
 To review the 2011 updates to the key features of the OPPS and the APC
payment system.
 To appreciated the trends in modifications being made to OPPS and 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 2011 changes on the chargemaster,
charges and the cost report for APCs.
 To review the 2011 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 2011.
 To discuss anticipated future changes and directions for OPPS and APCs.
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 4
OPPS Update for CY2011
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
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 5
OPPS Update for CY2011
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
 Note: The Federal Register entry has pages of acronyms!
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 6
OPPS Update for CY2011
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’?
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 7
OPPS Update for CY2011
General Comments
 Note: All citations to the Federal Register are to the official Federal
Register is published on November 24, 2010. This Federal Register is 781
pages!!
 Official Title for this OPPS Update Federal Register:
 Hospital Outpatient Prospective Payment System and CY 2011 Payment
Rates;
 Ambulatory Surgical Center Payment System and CY 2011 Payment
Rates;
 Payments to Hospitals for Graduate Medical Education Costs;
 Physician Self-Referral Rules and Related Changes to Provider
Agreement Regulations;
 Payment for Certified Registered Nurse Anesthetist Services Furnished
in Rural Hospitals and Critical Access Hospitals
• Note that there are even more topics addressed such as the
Provider-Based Rule (PBR), physician supervision requirements,
changes in observation.
• All the contents of this FR should be carefully studied.
• Additional information is available at the CMS website:
 https://www.cms.gov/HospitalOutpatientPPS/
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 8
OPPS Update for CY2011
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?
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 9
OPPS Update for CY2011
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 highest cost is more than twice the lowest cost
then violation.
• 2-Times Rule Exception List
 Examples:
o APC=0080 Diagnostic Cardiac Catheterization
o APC=0604 Level 1 Hospital Clinic Visits
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 10
OPPS Update for CY2011
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 most 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?
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 11
OPPS Update for CY2011
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.
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 12
OPPS Update for CY2011
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?
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 13
OPPS Update for CY2011
By The Numbers
 Basically a 2.6% Market Basket Update Less 0.25% by ACA
 Thus, 2.35% Increase – Conversion Factor = $68.876
 Assumes Quality Reporting – 2.00% Decrease If Not ($67.530)
• Conversion Factor $66.059 in CY2009 to $67.439 for CY2010
 Wage Index Changes  See IPPS
 Statewide CCRs  See Table 15
 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
• This is a fairly significant decrease.
• Remember, there is a double threshold, ‘1.75 times the APC
payment’ threshold is unchanged.
 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
 Final ASC Conversion Factor - $41.939 ($41.939/$68.876 = 60.89%)
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 14
OPPS Update for CY2011
By The Numbers
 TOPs – Transitional Outpatient Payment
 Pre-BBA Payments vs. OPPS Payments
• Starting January 1, 2011 – No longer in effect for SCHs and Rural
Hospitals with Less Than 100 Beds That Are Not SCHs.
 See also, Children’s Hospitals and Cancer Hospitals
• Permanently Held Harmless under TOPs
• “The many public comments we received have identified a broad
range of very important issues and concerns associated with the
proposed cancer hospital adjustment. After consideration of these
public comments, we have determined that further study and
deliberation related to these issues is critical.” (Page 71887 – 75 FR
71887)
 Wage Index
 “The IPPS wage index that we are adopting in this final rule with
comment period includes all reclassifications that are approved by the
Medicare Geographic Classification Review Board (MGCRB) for FY
2011.” (Page 71878 – 75 FR 71878)
 Reclassifications Under Section 508 – Highly specialized situations.
See FY2010 IPPS/LTCH PPS Federal Register dated June 2, 2010.
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 15
OPPS Update for CY2011
By The Numbers
 Wage Index – Continued
 “… we continue to believe that using the IPPS wage index as the
source of an adjustment factor for the OPPS is reasonable and logical,
given the inseparable, subordinate status of the HOPD within the
hospital overall. Therefore, as we proposed, we are using the final FY
2011 IPPS wage indices for calculating OPPS payments in CY 2011.”
(Page 71879 – 75 FR 71879)
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 16
OPPS Update for CY2011
Recalibration of APC Relative Weights
 Recalibration and Rebasing Process
 OPPS Update Federal Registers – Typically Long Discussions
 Calculation of Median 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
(Page 103 – CMS-1504-FC)
 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 3
 Payment Variations  See 2-Times Rule + Payment Change Limitations
 Composite APCs  Observation, Pulmonary Rehab, Etc.
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 17
OPPS Update for CY2011
Recalibration of APC Relative Weights
 Recalibration and Rebasing Process
 Observation Composite – Minor Surgical Procedures Creating SI=“T”
Packaging
• CMS did comment to this (page 209 – CMS-1504-FC), but clearly
CMS did not understand the question that was raised.
• Brief Example: Patient presents through the ED with chest pains
and a minor laceration. Chest pain protocol directs observation
while the minor laceration generates an SI=“T” so that the
observation payment is packaged into the laceration repair
payment, creating a significant loss.
 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
• CPT=19295 – Localization Clip, Breast  SI=“Q1” – APC=0340 $46.23 for CY2011
• Other Specific CPT/HCPCS Codes – Including SI=“N”
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 18
OPPS Update for CY2011
CPT/HCPCS Changes For CY2011
 As usual there are hundreds of changes for both CPT and HCPCS. The
rate of change for 2011 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).
 Therapeutic Vascular Catheterization Services - Major revisions to CPT.
For Lower Extremities (sub-inguinal). Here is one sequence:
• 37224 – Revascularization, endovascular, open or percutaneous,
femoral/popliteal artery(s), unilateral; with transluminal angioplasty
• 37225 –
with atherectomy, includes angioplasty within the
same vessel, when performed
• 37226 –
with transluminal stent placement(s), includes
angioplasty within the same vessel, when performed
• 37227 with transluminal stent placement(s) and
atherectomy, includes angioplasty within the same
vessel
 Note the ‘open or percutaneous’ and also the hierarchical
structuring of the angioplasty, atherectomy and stent
placements.
 See pages 172-182 of CMS-1504-FC for APC assignment and
payment calculations.
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 19
OPPS Update for CY2011
CPT/HCPCS Changes For CY2011
 High APC Impact CPT/HCPCS Changes
 Endovascular Revascularization CPT Codes (37220-37235)
• CMS had to map combinations of old codes into new codes and
then determine median costs and then assign APCs. The actual
payment amount for the APCs includes other cost data.
• 37205+36245+75960+35454  37221 (As An Example)
 Median Cost = $6,710.00  APC=0083
 For CY2011 APC=0083 Pays $3,780.18
o Note that there is quite a difference between the median
cost and the actual payment amount for APC=0083.
• Other APCs Considered
 APC=0229 – $8,025.25
 APC=0319 - $13,898.71
• Note: Without much doubt, payment for these new
revascularization codes is skewed, probably downward. It will take
several years for the payment amount to stabilize based on costs
determined from charges. It will be two years before cost data is
available directly for the new codes.
 Hospitals should carefully model the financial impacts.
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 20
OPPS Update for CY2011
CPT/HCPCS Changes For CY2011
 High APC Impact CPT/HCPCS Changes
 Diagnostic Coronary Catheterization Services (Non-Congenital)
• Comprehensive Reworking of These Codes for CPT
• Previous Code Structure –
 Catheterization  APCs Generally Pays For This Component
 Injection
 Radiological S&I
o Combination of Codes Used
• New Code Structure Utilizes Single Codes for Catheterizations and
Associated Services
• Everything goes into APC=0080  $2,726.85
• See Pages 182-192 of CMS-1504-FC For Discussion
 There is a comment period available on the methodology that
CMS used to calculate this payment.
 Be sure to check for financial impact in your setting. This
change will probably create some significant financial changes.
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 21
OPPS Update for CY2011
CPT/HCPCS Changes For CY2011
 Other CPT/HCPCS Changes
 Some of the other changes have created some reaction for APCs.
 Critical Care CPT=99291
• CPT is now stating that the associated services (e.g., chest x-ray,
intubation, vascular access, etc.) can be separately reported on the
hospital, facility side.
• Over the years there has been some controversy in this area
relative to the NCCI edits and variable CMS guidance.
• “Therefore, for CY 2011, we will continue to recognize the existing
CPT codes for critical care services and are establishing a payment
rate based on our historical data, into which the cost of the ancillary
services is intrinsically packaged, and we will implement claims
processing edits that will conditionally package payment for the
ancillary services that are reported on the same date of service as
critical care services in order to avoid overpayment.” (Page 71988 –
75 FR 71988)
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 22
OPPS Update for CY2011
CPT/HCPCS Changes For CY2011
 HCPCS Changes
 The January 1, 2011 update for HCPCS contains approximately 146 new
codes and modifiers.
 Most of the changes have low impact on APCs and the APC grouping
process as such.
 Most of the changes are of interest to Chargemaster Coordinators and
selected service areas.
 Among the New Modifiers
• “-PT” – Colorectal Cancer Screening Converted to Diagnostic Test
• “-GU” – Wavier of Liability Statement Issues As Required By Payer
Policy, Routine Notice
 Among the New Codes
• G0157-G0161 – PT/OT/ST Services in the Home
• G0162-G0164 – Skilled Services by LPN or RN
• G0438-G0439 – AWV with PPPS
• G0436-G0437 – Smoking and Tobacco Cessation Counseling
• G8647-G8674 – Orthopedic Functional Status Change
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 23
OPPS Update for CY2011
Composite APCs – Issues and Changes
 Composite APCs
 Observation – APC=8002 and APC=8003
• See Minor Surgery – Status Indicator “T” Bundling Issue
• APC 8002  $394.22/$381.34 and APC 8003  $714.33/$705.27
 LDR Prostate Brachytherapy – APC=8001
• CPT=55875+77778
• CY2011  $3,229.24; CY2010  $3,112.61
 Electrophysiology Studies – APC=8000
• APC 8000  $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 - $238.33/$210.89
 Multiple Imaging – APCs – 8004, 8005, 8006, 8007, 8008
• See new CPT Sequence 74176-74178
• “As we stated in the CY 2010 final rule with comment period (74 FR
60399), we do not agree with the commenters that multiple imaging
procedures of the same modality provided on the same date of
service but at different times should be exempt from the multiple
imaging composite payment methodology.” (Page 71858)
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 24
OPPS Update for CY2011
On-Going APC Issues
 New CPT/HCPCS Codes – CMS Process and Timeframes
 Inclusion of the comment process – Timing Considerations
 H1N1 Vaccine and Vaccination Discussion
 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 71900 –
75 FR 71900)
• Question: How many years can an APC be repeatedly on the list?
• How is this affecting you?
 0057 Bunion Procedures
 0058 Level I Strapping and Cast Application
 0060 Manipulation Therapy
 0076 Level I Endoscopy Lower Airway
 0080 Diagnostic Cardiac Catheterization
 0083 Coronary and Noncoronary Angioplasty and Percutaneous
Valvuloplasty
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 25
OPPS Update for CY2011
On-Going APC Issues
 Variation Within APC Categories
 0105 Repair/Revision/Removal of Pacemakers, AICDs, or Vascular
Devices
 0133 Level I Skin Repair
 0142 Small Intestine Endoscopy
 0203 Level IV Nerve Injections
 0235 Level I Posterior Segment Eye Procedures
 0245 Level I Cataract Procedures without IOL Insert
 0303 Treatment Device Construction
 0304 Level I Therapeutic Radiation Treatment Preparation
 0340 Minor Ancillary Procedures
 0341 Skin Tests
 0343 Level III Pathology
 0432 Health and Behavior Services
 0433 Level II Pathology
 0604 Level 1 Hospital Clinic Visits
 0607 Level 4 Hospital Clinic Visits
 0664 Level I Proton Beam Radiation Therapy
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 26
OPPS Update for CY2011
On-Going APC Issues
 New Technologies
 Movement from New Technologies to Clinical APCs
 Specific APC Categories – Payment and Code Mappings (Selected
Examples)
 Myocardial PET Imaging (APC 0307)
 Implantalbe Loop Recorder Monitoring (APC 0691)
 Upper GI Endoscopy (APCs 0141, 0384, and 0422)
 Pain Related Procedures (APCs 0203, 0204, 0206, 0207, and 0388)
 Device Construction for IMRT (APC 303)
 Skin Repair (APCs 0134 and 0135)
 Group Psychotherapy (APCs 0322, 0323, 0324, and 0325)
• These APCs, among others, certainly are worthy of comments
relative to inappropriate payment levels and/or APC assignment.
CMS is generally not inclined to move from their cost data
approach.
 Device Payment
 Device Dependent APCs
 No Cost/Full Credit and Partial Credit
 Hospitals, overall, tend to undercharge for devices. See issues such as
charge compression.
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 27
OPPS Update for CY2011
On-Going APC Issues
 Drugs, Biological, and Radiopharmaceuticals
 Transitional Pass-Through Payment Process
 Packaging Criteria
 Payment Offset Policy for Diagnostic Radiopharmaceuticals
• “Establishing the “FB” modifier to correctly account for diagnostic
radiopharmaceuticals received free of charge allows for the
diagnostic radiopharmaceutical to be reported and coded correctly
on the same claim as the nuclear medicine scan, therefore fulfilling
the required radiolabeled product edits.” (Page 71935 – 75 FR
71935)
 CMS Posting Offset Amounts for All Affected APCs
 Policy-Packaged Drugs and Devices
 340B Hospitals – Data Considerations
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 28
OPPS Update for CY2011
On-Going APC Issues
 Drugs, Biological, and Radiopharmaceuticals
 “… we have encouraged hospitals to consider reporting all drugs in
revenue code 0636 (Pharmacy-Extension of 025X; Drugs Requiring
Detailed Coding) only to improve HCPCS coding for packaged drugs
and biologicals in our claims data to improve the accuracy of our
ASP+X calculation. We continue to believe that more complete data
from hospitals identifying the specific drugs that were provided during
an episode of care will improve payment accuracy for separately
payable drugs in the future. However, we believe hospitals should
report diagnostic radiopharmaceuticals with the most appropriate
revenue code, and we are confident that coding for diagnostic
radiopharmaceuticals will occur because of our claims edits for
radiolabeled products.” (Pages 71965 – 75 FR 71965)
• See also Revenue Codes 025X and 062X. What is CMS trying to tell
us?
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 29
OPPS Update for CY2011
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
• Eligible for Cost Outliers
• SCH 7.10% Increase
• New Brachytherapy Sources  Individual APCs-External Data
 “Nevertheless, we believe that prospective payment for brachytherapy
sources based on median costs from claims calculated according to
the standard OPPS methodology is appropriate and provides hospitals
with the greatest incentives for efficiency in furnishing brachytherapy
treatment.” (Page 71879 – 75 FR 71879)
 “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 71879 – 75 FR 71879)
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 30
OPPS Update for CY2011
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.
APC
CY2011
CY2010
CY2009
0436
$26.35
$25.67
$25.03
0437
$36.88
$37.44
$36.66
0438
$75.58
$75.69
$74.32
0439
$128.44
$126.78
$126.80
0440
$205.86
$219.96
$191.06
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 31
OPPS Update for CY2011
On-Going APC Issues
 Partial Hospitalization Services
 Hospitals vs. CMHCs
• Two Tiered Costs Structure – Cost Report Data HCRIS
• Two Sets of APCs
 APC=0172/0173  Level I and II at CMHC
 APC=0175/0176  Level I and II at Hospital
APC
CY2011
CY2010
0172
$129.64
$149.84
0173
$164.43
$210.89
0175
$204.89
[$149.84]
0176
$238.33
[$210.89]
 “… we have decided to provide a 2-year transition to CMHC rates based
solely on CMHC data for the two CMHC PHP APC per diem rates. For
CY 2011, the CMHC PHP APC Level I and Level II rates will be
calculated by taking 50 percent of the difference between the CY 2010
final hospital-based medians and the CY 2011 final CMHC medians and
adding that number to the CY 2011 final CMHC medians.” (Page 71993 –
75 FR 71993)
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 32
OPPS Update for CY2011
On-Going APC Issues
 Partial Hospitalization Services
 Cost Report Data for CMHCs Through HCRIS
 Separate Cost Outlier Payments to CMHCs
• “After consideration of the public comments we received, we are
finalizing our CY 2011 proposal to set a separate outlier threshold
for CMHCs.” (Page 71995 – 75 FR 71995)
 Inpatient-Only Procedures
 Commenters continue to recommend doing away with this list.
• Why is CMS so adamant about having this list?
• “We continue to believe that the inpatient list is a valuable tool for
ensuring that the OPPS only pays for services that can safely be
performed in the hospital outpatient setting, and we will not
eliminate the inpatient list at this time.” (Page 71997 – 75 FR 71997)
 Additions and Deletions to the List
 “We expect hospitals to be aware of the services that are being
provided in the outpatient setting. Hence, we do not believe that it is
appropriate to pay the hospital for the ancillary services furnished
when the patient receives an inpatient only service in the hospital
outpatient setting.” (Page 71997 – 75 FR 71997)
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 33
OPPS Update for CY2011
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
• CY2011  $6,372.10
• CY2010 $5,965.94
• CY2009  $4,770.52
• CY2008  $5,006.13
 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.
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 34
OPPS Update for CY2011
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.
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 35
OPPS Update for CY2011
Physician Supervision Changes
 Physician Supervision Discussions
 “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 72008 – 75 FR 72008)
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 36
OPPS Update for CY2011
Physician Supervision Changes
 Physician Supervision
 “For pulmonary rehabilitation, cardiac rehabilitation, and intensive
cardiac rehabilitation services, direct supervision must be furnished by
a doctor or medicine or osteopathy as specified in §§410.47 and 410.49,
respectively.” (Page 72008 – 75 FR 72008)
 “This new definition of direct supervision will apply to hospitals and
CAHs equally beginning in CY 2011. However, as already discussed, we
are extending our notice of non-enforcement to CAHs and small rural
hospitals with 100 or fewer beds through CY 2011.” (Page 72008 – 75
FR 72008)
 “This extension will allow CAHs and small rural hospitals to prepare to
meet this definition of direct supervision in CY 2012.” (Page 72008 – 75
FR 72008)
 “Although commenters again requested this year that we revise our
definition of immediately available to recognize availability by
telephone or modes other than in person, we believe that the
requirement for physical presence distinguishes direct supervision
from general supervision.” (Page 72008 – 75 FR 72008)
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 37
OPPS Update for CY2011
Physician Supervision Changes
 Physician Supervision
 “… we intend to establish an independent review process to assess the
appropriate supervision levels for specific services.” (Page 72008 – 75
FR 72008)
 Nonsurgical Extended Duration (Therapeutic) Services
• Infusions, Injections, Observation
• Not Chemotherapy or Blood Transfusions
• ‘Initiation’ vs. ‘Stable’
 Partial Hospitalization Services at CMHCs
• Only General Supervision
 Diagnostic Services  See MPFS Supervision Levels
• General
• Direct
• Personal
 Exactly, where does this leave us relative to the physician supervision
requirements? (See also, proposed H.R. 6376)
• A major change appears to be that the supervising physician or
qualified NPP does not have to be on the campus, just immediately
available.
• See ‘clinical appropriateness’ and ‘ability to step in and perform’.
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 38
OPPS Update for CY2011
Hospital Outpatient Visits
 Hospital Outpatient Visits – A Continuing Area of Challenge
 New vs. Established Patients – Registration within 3 years.
• This will continue even though some concerns.
 ED Coding and Payment
• Type A vs. Type B
• Triage-Only Services – Yes, No, Maybe?
 Critical Care Codes – CPT Changes  See Status Indicator “Q1”
• “For CY 2011, the AMA CPT Editorial Panel is revising its guidance
for the critical care codes to specifically state that, for hospital
reporting purposes, critical care codes do not include the specified
ancillary services. Beginning in CY 2011, hospitals that report in
accordance with the CPT guidelines will begin reporting all of the
ancillary services and their associated charges separately when
they are provided in conjunction with critical care.” (Page 71988 –
75 FR 71988)
• “…, and we will implement claims processing edits that will
conditionally package payment for the ancillary services that are
reported on the same date of service as critical care services in
order to avoid overpayment.” (Page 71988 – 75 FR 71988)
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 39
OPPS Update for CY2011
Hospital Outpatient Visits
 Visit Reporting Guidelines
 “We continue to believe that, based on the use of their own internal
guidelines, hospitals are generally billing in an appropriate and
consistent manner that distinguishes among different levels of visits
based on their required hospital resources. As a result of our updated
analyses, we are encouraging hospitals to continue to report visits
during CY 2011 according to their own internal hospital guidelines.”
(Page 71989 – 75 FR 71989)
 “We agree with the commenters that national guidelines should be
clear, concise, and specific with little or no room for varying
interpretations, and that hospitals should have at least 1 year to
prepare for the transition. If the AMA were to create facility specific CPT
codes for reporting visits provided in HOPDs, we would certainly
consider such codes for OPPS use.” (Page 71990 – 75 FR 71990)
• How amazing! CMS seems to suggest that the AMA through CPT
should develop new codes and/or national guidelines!
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 40
OPPS Update for CY2011
Hospital Outpatient Visits
 Outpatient Visit Payment Changes – Clinic Visits and ED Visits
APC
Description
CY2011
CY2010
CY2009
0604
Clinic Lev 1
$52.36
$57.92
$55.34
0605
Clinic Lev 2
$75.13
$69.68
$68.23
0606
Clinic Lev 3
$99.71
$89.12
$87.71
0607
Clinic Lev 4
$128.48
$113.44
$116.77
0608
Clinic Lev 5
$168.92
$167.52
$155.05
CPT
APC
2011
Pay
2010
Pay
2009
Pay
SI
99281
0609
$51.77
$53.16
$52.66
V
99282
0613
$87.25
$87.85
$86.14
V
99283
0614
$139.14
$140.18
$136.70
V
99284
0615
$222.58
$223.17
$217.91
Q3
99285
0616
$329.54
$329.73
$323.90
Q3
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 41
OPPS Update for CY2011
Additional Issues
 Preventive Services
 Affordable Care Act increased the number of covered preventive
services.
 Payment by Medicare is at 100% for the most part.
• PSA (Prostate Specific Antigen) is fully paid
• AWV – Annual Wellness Visit
 “That is, we will pay either the practitioner or the facility for
furnishing the AWV providing PPPS in a facility setting, and
only a single payment under the MPFS will be allowed.” (Page
72016 – 75 FR 72016)
 How will this work? Not paid through OPPS.
 See the rather lengthy Table 48B.
 Colorectal Cancer Screening
 New Modifier “-PT” to report procedures in lieu of the screening.
 Multiple Procedure Reductions for Physical Therapy
 See MPFS. Payment for PT/OT/ST is determined from the MPFS and
RBRVS although paid through claims on the UB-04.
 Status Indicators
 No major changes.
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 42
OPPS Update for CY2011
Ambulatory Surgical Centers
 ASC Payment Process
 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
• 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.
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 43
OPPS Update for CY2011
Reporting Quality Data
 HOP QDRP Quality Measures
 There is an extensive discussion in the Federal Register addressing
Quality Data Reporting.
 Quality Reporting In Multiple Settings
 “ … we continue to believe that it is also appropriate and desirable to
adopt for the HOP QDRP measures that have been specifically
developed for application only in the hospital outpatient setting
because hospital outpatient settings present unique challenges in the
operational and clinical aspects of care…” (Page 72065 – 75 FR 72065)
 For CY2010 – Continued 7 measures and added 4 new imaging
measures
 “For the CY 2011 payment determination, we did not add any new HOP
QDRP measures. We indicated our sensitivity to the burden upon
HOPDs associated with chart abstraction and stated that we seek to
minimize the collection burden associated with quality measurement.”
(Page 72066 – 75 FR 72066)
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 44
OPPS Update for CY2011
Reporting Quality Data
 HOP QDRP Quality Measures
 Expansion for CY2012, CY2013 and CY2014
• Process for Determining Measures
• CY2012
 “In summary, for the CY 2012 payment determination, we are
retaining the 11 existing HOP QDRP measures from the CY
2011 payment determination, adding one new structural
measure, and adding 3 new claims-based imaging efficiency
measures for a total of 15 measures.” (Page 72083 – 75 FR
72083)
 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
Non-Cardiac Low-Risk Surgery
 OP-14: Simultaneous Use of Brain Computed Tomography (CT)
and Sinus Computed Tomography (CT)
 OP-15: Use of Brain Computed Tomography (CT) in the
Emergency Department for Atraumatic Headache
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 45
OPPS Update for CY2011
Reporting Quality Data
 HOP QDRP Quality Measures
 Expansion for CY2012, CY2013 and CY2014
• CY2013
 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
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 46
OPPS Update for CY2011
Reporting Quality Data
 HOP QDRP Quality Measures
 Expansion for CY2012, CY2013 and CY2014
• CY2014
 “After consideration of the public comments we received, we
are finalizing the retention of the 23 measures adopted for the
CY 2013 payment determination, but are not at this time
adopting any of the new measures proposed for the CY 2014
payment determination. As of now, a total of 23 measures will
be used for the CY 2014 payment determination.” (Page 72094 –
75 FR 72094)
 Beyond CY2014, CMS Is considering a number of other measures
number 35 as listed in the Federal Register.
• Heart Failure – 12 Measures
• Emergency Department – 7 Measures
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 47
OPPS Update for CY2011
Additional Issues
 Changes in Payment for GME/IME Costs
 “The recently enacted Patient Protection and Affordable Care Act (Pub.
L. 111-148), as amended by the Health Care and Education
Reconciliation Act of 2010 (Pub. L. 111-152) made a number of statutory
changes relating to the determination of a hospital’s FTE resident count
for direct GME and IME payment purposes and the manner in which
FTE resident limits are calculated and applied to hospitals under
certain circumstances.” (Page 72134 – 75 FR 72134)
 Counting Resident Time in Non-provider Settings
 Counting Resident Time for Didactic and Scholarly Activities and Other
Activities
 Reductions and Increases to Hospitals’ FTE Resident Caps for GME
Payment Purposes
 Preservation of Resident Cap Positions from Closed Hospitals
• This is a fairly esoteric topic. See teaching hospitals.
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 48
OPPS Update for CY2011
Additional Issues
 Physician Self-Referral Prohibition
 “Section 1877 of the Act, also known as the physician self-referral law:
(1) prohibits a physician from making referrals for certain “designated
health services” (DHS) payable by Medicare to an entity with which he
or she (or an immediate family member) has a financial relationship
(ownership or compensation), unless an exception applies; and (2)
prohibits the entity from filing claims with Medicare (or billing another
individual, entity, or third party payer) for those DHS furnished as a
result of a prohibited referral.” (Page 72240 – 75 FR 72240)
 A series of changes was mandated by Section 6001(a)(2) of ACA.
• Physician Ownership and Provider Agreement
• Expansion of Facility Limitations
• Prevent Conflicts of Interest
• Patient Safety
• Converting from ASC
• Enforcement
• Publication of Information
• CoPs for Hospitals
• Collection of Information
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 49
OPPS Update for CY2011
Additional Issues
 CRNA Services at Rural Hospitals and CAHs
 “In the FY 2011 IPPS/LTCH PPS final rule (75 FR 50299), we adopted a
policy that would allow otherwise eligible critical access hospitals
(CAHs) or hospitals that have reclassified from urban to rural status
under section 1886(d)(8)(E) of the Act and 42 CFR 412.103 to receive
reasonable cost payments for anesthesia services and related care
furnished by nonphysician anesthetists (referred to in this section as
CRNA pass-through payments), effective for cost reporting periods
beginning on or after October 1, 2010.” (Page 72256 – 75 FR 72256)
 “We are amending the regulations at 42 CFR 412.113(c)(2)(i)(A) to
provide for an effective date of December 2, 2010, for all hospitals and
CAHs to begin receiving CRNA pass-through payments for anesthesia
services and related care furnished by nonphysician anesthetists.”
(Page 72257 – 75 FR 72257)
• This appears to be a technical correction relative to dates and
timing for application of these provisions.
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 50
OPPS Update for CY2011
Special Issues
 Charges, Cost-to-Charge Ratios (CCRs) and Cost Reporting
 “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 lowercost services.” (74 FR 60342)
• Note: Interesting that this became an issue with MS-DRGs, not
APCs.
 RTI, International (outside consulting firm) made recommendations.
 “Specifically, we created one cost center for ‘‘Medical Supplies
Charged to Patients’’ and one cost center for ‘‘Implantable Devices
Charged to Patients.’’ This change split the CCR for ‘‘Medical Supplies
and Equipment’’ into one CCR for medical supplies and another CCR
for implantable devices.” (74 FR 60343)
 Changes in the cost reporting process will take three years due to the
cost report cycle.
 The OPPS CY2011 Federal Register continues to discuss CCR
challenges through the cost report.
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 51
OPPS Update for CY2011
Summary and Conclusions
 APCs Represent CMS’s Most Complex Prospective Payment System
 The Federal Register Entries Are Becoming Enormous
 We are into the Eleventh 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.
 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.
© 1999-2011 Abbey & Abbey, Consultants, Inc.
Slide # 52