Transcript APC Update for CY2010

APC Update for CY2010
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 11.0 - Generic
Notes © 1994-2010, Abbey & Abbey, Consultants, Inc.
CPT® Codes – © 2009-2010 AMA
© 1999-2010 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 eight 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, “Compliance for Coding, Billing & Reimbursement A Systematic
Approach to Developing a Comprehensive Program”, and “Introduction to Healthcare
Payment Systems” are available from the Productivity Press a Division of Taylor and Francis.
© 1999-2010 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.
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 3
APC Update for CY2010
Objectives
 To review the 2010 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 2010 changes on the chargemaster,
charges and the cost report for APCs.
 To review the 2010 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 2010.
 To discuss anticipated future changes and directions for APCs.
 To briefly review how the APC changes affect ASC payment.
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 4
APC Update for CY2010
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
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 5
APC Update for CY2010
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
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 6
APC Update for CY2010
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 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.
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 7
APC Update for CY2010
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?
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 8
APC Update for CY2010
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
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 9
APC Update for CY2010
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?
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 10
APC Update for CY2010
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
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 11
APC Update for CY2010
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?
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 12
APC Update for CY2010
By The Numbers
 Basically a 2.1% Market Basket Update
 Assumes Quality Reporting
 With other adjustments, effectively 1.9% increase
• Cost Outliers, Pass-Through Payments, Section 508 Expiration
 Conversion Factor $66.059 in CY2009 to $67.439 for CY2010
 Cost Outlier
 Fixed Threshold from $1,800.00 in CY2009 to $2,175.00 for CY2010
• This is a very significant increase!
• Remember, there is a double threshold, ‘1.75 times the APC
payment’ threshold is unchanged.
 Hold-Harmless Transitional – Awaiting Congressional Action
 Rural Hospitals/SCHs 100 or Less Beds
 Section 508 Reclassifications – Awaiting Congressional Action
 Drug Packaging Threshold
 $60.00 for CY2009 moved to $65.00 for CY2010
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 13
APC Update for CY2010
CPT/HCPCS Changes For CY2010
 As usual there are hundreds of changes for both CPT and HCPCS.
However, the rate of change for 2010 is in a more normal range.
 CPT Changes
 Within the Musculoskeletal System there are new and changed codes
for tumor excisions. For instance, the sequence 22900-22905 addresses
tumor excisions relative to the abdominal wall.
 There are significant changes in the coding guidance within various
sections of CPT. You will need to literally compare 2009 with 2010 to
see where the changes are located. Look for sideway triangles (►◄).
 HCPCS Changes
 Most notable are the new modifiers:
• “-V5” – VASCULAR CATHETER,
• “-V6” – ARTERIOVENOUS GRAFT,
• “-V7” – ARTERIOVENOUS FISTULA,
• “-V8” - INFECTION PRESENT,
• “-V9” - NO INFECTION PRESENT, and for physicians,
• “-AI” - PRINCIPAL PHYSICIAN OF RECORD.
 See MPFS change eliminating the use of the consultation codes
for both inpatient and outpatient consultations.
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 14
APC Update for CY2010
Increased Bundling
 CMS - Significantly Increased Bundling – Starting in CY2008
 More detail on the bundling approach
• From page 68570 – November 18, 2008 Federal Register
 We use the term “dependent service” to refer to the HCPCS
codes that represent services that are typically ancillary and
supportive to a primary diagnostic or therapeutic modality. We
use the term “independent service” to refer to the HCPCS
codes that represent the primary therapeutic or diagnostic
modality into which we package payment for the dependent
service. We note that, in future years as we consider the
development of larger payment groups that more broadly
reflect services provided in an encounter or episode-of-care, it
is possible that we might propose to bundle payment for a
service that we now refer to as “independent.”
 Exercise: Compare and contrast the above concept with the APG
(Ambulatory Patient Group) ‘significant procedure consolidation’.
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 15
APC Update for CY2010
Increased Bundling
 CMS Proposed Significantly Increased Bundling
 CMS want to increase bundling to have APCs be more of a Prospective
Payment System (PPS)
• Look more like DRGs?
• Look less than RBRVS?
 Comment: For those familiar with APGs, Ambulatory Patient
Groups, CMS purposefully moved APCs away from all the
bundling in APGs. Now CMS is moving back toward the
bundling in APGs. Why the change? (Hint: Think money!)
o See APG concept of significant procedure consolidation.
 For the past several years, new interventional radiology codes have
bundled the radiological component into the surgical component even
at the CPT level.
 This is a major change. The discussions in the current APC Federal
Register appear to be only the beginning. Also, movement from SI=“S”
to SI=“T”. Why?
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 16
APC Update for CY2010
Status Indicator Codes
 Status Indicators (SIs) Have Become Increasingly Complex
 Increased use in APC logic for packaging including conditional
packaging.
 “Q1” - STVX-Packaged Codes Paid under OPPS;
 Addendum B displays APC assignments when services are separately
payable.
• (1) Packaged APC payment if billed on the same date of service as a
HCPCS code assigned status indicator “S,” “T,” “V,” or “X.”
• (2) In all other circumstances, payment is made through a separate
APC payment.
 “Q2” - T-Packaged Codes Paid under OPPS;
 Addendum B displays APC assignments when services are separately
payable.
• (1) Packaged APC payment if billed on the same date of service as a
HCPCS code assigned status indicator “T.”
• (2) In all other circumstances, payment is made through a separate
APC payment.
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 17
APC Update for CY2010
Status Indicator Codes
 “Q3” - Codes That May Be Paid Through a Composite APC Paid under
OPPS;
 Addendum B displays APC assignments when services are separately
payable. Addendum M displays composite APC assignments when
codes are paid through a composite APC.
• (1) Composite APC payment based on OPPS composite-specific
payment criteria. Payment is packaged into a single payment for
specific combinations of service.
• (2) In all other circumstances, payment is made through a separate
APC payment or packaged into payment for other services.
 “R” – Blood and Blood Products – Paid Under OPPS, Separate Payment
 “U” – Brachytherapy Sources – Paid Under OPPS, Separate Payment
 Actually a Mini-APC System
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 18
APC Update for CY2010
Increased Bundling
 Exercises –
 CPT=76000 is SI=“Q1” – What does this mean?
• Note: 76000 maps to APC=0272 with payment of $85.56.
 E/M Codes are typically SI=“V”, but 99215 and 99205 are SI=“Q3”.
Why?
 CPT=75630, Aortography, abdominal plus bilateral iliofemoral lower
extremity SI=“Q2” – APC= 0279 $1,962.36
• How often is this diagnostic service provided in isolation?
• Generally performed with therapeutic vascular services.
• How can almost $2,000.00 be appropriately packaged?
• Does this create any incentive to separate the diagnostic from the
therapeutic services (i.e., on different dates of service)?
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 19
APC Update for CY2010
APC Changes
 Composites
 No New Composites As Such
 Study Cardiac Resynchronization Services for Future
 MIPPA 2008 Expansion of Coverage
 Kidney Disease Education (KDE)
• See G0420 (Individual) and G0421 (Group)
 Payable through MPFS RVUs=3.00 and 0.71
 Comprehensive Pulmonary Rehabilitation
• G0424 - Pulmonary rehab w exer – APC=0102 - $50.46
 Intensive Cardiac Rehabilitation
• G0422 - Intens cardiac rehab w/exerc – APC=0095 - $38.36
• G0423 - Intens cardiac rehab no exer – APC=0095 - $38.36
 See Physician Supervision rules for Pulmonary & Cardiac
Rehabilitation
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 20
APC Update for CY2010
APC Changes
 Packaged Revenue Codes – Added to the List
 RC=0261 – IV Therapy: Infusion Pump
 RC=0392 – Administration, Processing and Storage of Blood
Components
 RC=0623 – Medical Supplies – Extension of 027X, Surgical Dressings
 RC=0943 – Other Therapeutic Services, Cardiac Rehabilitation
 RC=0948 – Other Therapeutic Services, Pulmonary Rehabilitation
 Packaging Policy Change
 CPT=76098 – Radiological Examination, Surgical Specimen  SI=“Q2”
• What does this mean?
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 21
APC Update for CY2010
APC Changes
 Inpatient-Only Procedures
 CMS continues the Inpatient-Only list even though commenters are
opposed.
 Procedures Moved From the Inpatient-Only List – Payable Under APCs
• CPT=21256 – Reconstruction of Orbit – APC=0256 – SI=“T”
• CPT=27179 – Open Tx Femoral Epiphysis – APC=0052 – SI=“T”
• CPT=28805 – Amputation Foot – APC=0055 – SI=“T”
• CPT=37215 – Intravascular Stent Placement – APC=0229 – SI=“T”
• CPT=44950 – Appendectomy – APC=0153 – SI=“T”
• CPT=44955 – Appendectomy – APC=0153 – SI=“T”
• CPT=51060 – Transvesical Ureterolithotomy – APC=0163 – SI=“T”
• CPT=63076 – Discectomy – APC=0208 – SI=“T”
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 22
APC Update for CY2010
APC Changes
 2-Times List
 These are APCs in which there is too much variation in the costs
associated with the services in the given APC.
• 0057 Bunion Procedures
• 0060 Manipulation Therapy
• 0080 Diagnostic Cardiac Catheterization
• 0105 Repair/Revision/Removal of Pacemakers, AICDs, or Vascular
Devices
• 0128 Echocardiogram with Contrast
• 0141 Level I Upper GI Procedures
• 0142 Small Intestine Endoscopy
• 0245 Level I Cataract Procedures without IOL Insert
• 0303 Treatment Device Construction
• 0341 Skin Tests
• 0381 Single Allergy Tests
• 0409 Red Blood Cell Tests
• 0432 Health and Behavior Services
• 0604 Level 1 Hospital Clinic Visits
• 0664 Level I Proton Beam Radiation Therapy
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 23
APC Update for CY2010
APC Changes
 Echocardiography
 “In CY 2008, we implemented a policy whereby payment for all contrast
agents is packaged into the payment for the associated imaging
procedure, regardless of whether the contrast agent met the OPPS drug
packaging threshold. Section 1833(t)(2)(G) of the Act requires us to
create additional APC groups of services for procedures that use
contrast agents to classify them separately from those procedures that
do not utilize contrast agents.” (74 FR 60375)
 See CPT Codes – 93303-93351 & HCPCS Codes C8921-C8930
• 0128 Echocardiogram With Contrast - $651.17
• 0269 Level II Echocardiogram Without Contrast - $450.97
• 0270 Level III Echocardiogram Without Contrast - $596.04
• 0697 Level I Echocardiogram Without Contrast - $264.39
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 24
APC Update for CY2010
APC Changes
 Device Dependent APCs
 See Table 8 in November 20, 2009 Federal Register
 Neurostimulators
• 0039 Level I Implantation of Neurostimulator Generator - $13,892.45
 See CPT Codes 61885, 63685, 64590
• 0315 Level II Implantation of Neurostimulator Generator - $18,519.10
 See CPT 61886
 Blood and Blood Products
 Ongoing CCR and Cost Reporting Issues
 APC Reimbursement Is Improving
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 25
APC Update for CY2010
APC Changes
 Nuclear Medicine
 Packaging Radiopharmaceuticals vs. Separate Payment
 “We understand that, by packaging payment for a range of products
such as diagnostic radiopharmaceuticals, payment for the associated
nuclear medicine procedure may be more or less than the hospital’s
cost for these services in a given case. As stated in the CY 2008
OPPS/ASC final rule with comment period (72 FR 66639) and the CY
2009 OPPS/ASC final rule with comment period (73 FR 68546), we note
that a fundamental characteristic of a prospective payment system is
that payment is to be set at an average for the service which, by
definition, means that some services are paid more or less than the
average.” (74 FR 60386)
 Hyperbaric Oxygen Therapy
 There appears to be little hope in getting the HBO situation turned
around.
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 26
APC Update for CY2010
APC Changes
 “-CA” Modifier
 Patient expires during IP-only procedure without being admitted.
 Basic Data
• CY 2007 260 Cases – Median Cost = $3,549
• CY 2008 183 Cases – Median Cost = $4,945
• CY 2009 168 Cases – Median Cost = $5,545
• CY 2010 182 Cases – Median Cost = $5,911
 APC=0375
• CY2010  $5,965.94
• CY2009  $5,672.92
• CY2008  $5,006.13
 Question: Why can’t we do the same thing for IP-only surgeries
inadvertently performed on an outpatient basis?
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 27
APC Update for CY2010
APC Changes
 Quality Measures
 QMs to be used for CY2011 Payment Rate Determination
• 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
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 28
APC Update for CY2010
APC Changes
 Quality Measures
 Categories of Measures for 2012 and Beyond
• Cancer
• ED Throughput
• Diabetes
• Medication Reconciliation
• Immunization
• Imaging Efficiency
• Surgery
 See November 20, 2009 Federal Register, Pages 60637-60638
for a more detailed discussion.
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 29
APC Update for CY2010
APC Issues
 Injections, Infusions and Chemotherapy
 This is the first year since APCs were implemented that there has not
been a major change of some sort in this area.
 Last year APC 0441 was eliminated and the other levels appear to be
gaining better alignment.
CY2008
CY2009
APC 0436 – Level I
$ 16.21
$ 24.89
$25.67
APC 0437 – Level II
$ 25.13
$ 36.13
$37.44
APC 0438 – Level III
$ 51.22
$ 73.67
$75.69
APC 0439 – Level IV
$ 105.38
$ 128.62
$126.78
APC 0440 – Level V
$ 114.64
$ 187.96
$219.96
APC 0441 – Level VI
$ 149.34
Deleted
© 1999-2010 Abbey & Abbey, Consultants, Inc.
CY2010
Slide # 30
APC Update for CY2010
APC Issues
 Emergency Department – Use As A Benchmark
 Tracking actual APC changes from year to year is extremely difficult
because there are multiple changes.
 Most hospitals have Emergency Departments. The changes in APC
payments for the different ED levels can provide a simple benchmark
for comparing payments over time.
CPT
APC
2008 Pay
2009 Pay
2010 Pay
SI
99281
0609
$50.76
$52.66
$53.16
V
99282
0613
$83.67
$86.14
$87.85
V
99283
0614
$132.17
$136.70
$140.18
V
99284
0615
$212.59
$217.91
$223.17
Q3
99285
0616
$315.51
$323.90
$329.73
Q3
 Do these figures appear to represent a fairly stable change in
payments?
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 31
APC Update for CY2010
APC Policy Issues
 Drugs, Biologicals and Radiopharmaceuticals
 Drugs and Pharmacy Overhead – Separately payable drugs/biologicals
without pass-through status – ASP + 4%.
 Pass-Through Implantable Biologicals – Going to a device category
pass-through process.
 Drug and Biological Pass-Through Payment Eligibility – ASP + 6% for a
two or three year period for new drug or non-implantable biological.
 Therapeutic Radiopharmaceuticals
• ASP Data – ASP + 4%
• No ASP Data – Mean Unit Cost From Hospital Claims Data
 Brachytherapy Sources
 Continue with current rate setting approach – mini-APC system.
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 32
APC Update for CY2010
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.
 See the IPPS for more discussion on this issue. See the August 27,
2009 Federal Register.
© 1999-2010 Abbey & Abbey, Consultants, Inc.
Slide # 33
APC Update for CY2010
Special Issues
 Classifying Claims
 Note: Generally, only singleton claims (i.e., claims that group to only
one APC) can be included in the calculations for APC weights.
 Using the newer Status Indicator codes, CMS can increase the number
of claims going into the calculations.
• Single Major Claims
• Multiple Major Claims
• Single Minor Claims
• Multiple Minor Claims
• Non-OPPS Claims
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APC Update for CY2010
E/M Coding
 Technical Component E/M Coding
 New Patient Definition – 3-Year Definition Relative to Registration
 Continue Use of Both New Patient and Established Patient
• For APCs, Consultation Codes Are Gone
• “Because hospital claims data continue to show significant cost
differences between new and established patient visits, we continue
to believe it is necessary and appropriate to recognize the CPT
codes for both new and established patient visits and, in some
cases, provide differential payment for new and established patient
visits of the same level.” (74 FR 60547)
 Type B ED Visits – “In addition, we are adopting new APC 0630 (Level 5
Type B Emergency Visits) and will pay for level 5 Type B emergency
department visits through this new APC. We are assigning HCPCS
codes G0380, G0381, G0382, G0383, and G0384 (the levels 1, 2, 3, 4, and
5 Type B emergency department visit Level II HCPCS codes) to APCs
0626, 0627, 0628, 0629, and 0630, respectively, for CY 2010.” (74 FR
60549)
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APC Update for CY2010
E/M Coding
 Technical Component E/M Coding
 Nurse’s ED Triage Billing
• While CMS discussed this question, quite obviously CMS missed
the point of the question. The question raised is what happens,
relative to billing, when a patient is triaged by an ER nurse
(resources utilized), the patient then leaves before being seen by a
physician (or other qualified medical person)? Because there are
no services ‘incident-to’ those of a physician, the Medicare program
generally cannot pay. So what should hospitals do?
 Technical Component E/M Guidelines
• “As a result of our updated analyses, we are encouraging hospitals
to continue to report visits during CY 2010 according to their own
internal hospital guidelines. In the absence of national guidelines,
we will continue to regularly reevaluate patterns of hospital
outpatient visit reporting at varying levels of disaggregation below
the national level to ensure that hospitals continue to bill
appropriately and differentially for these services.” (74 FR 60552)
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APC Update for CY2010
E/M Coding
 Technical Component E/M Coding
 Technical Component E/M Guidelines – Continued
• “We [CMS] 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.” (74 FR
60553)
 This is a fascinating response! Because CMS has failed to
provide national guidelines, hospitals are so entrenched in their
own mappings that it would be disruptive to go to national
guidelines.
 Of course, nobody knows if the mappings being used by all the
hospitals are compliant!!
© 1999-2010 Abbey & Abbey, Consultants, Inc.
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APC Update for CY2010
E/M Coding
 Technical Component E/M Coding
 Anticoagulation Clinics (Coumadin Clinics)
• An excellent question was asked about using CPT codes 99363 and
99634. These codes involves series of visits for medication
management. CMS’s answer is a bit confusing.
• “We expect that a patient undergoing anticoagulation management
by hospital staff for a significant medical condition would
periodically have hospital visits, and we would package payment
for the non-face-to-face management of the patient’s therapy
between visits into payment for the visits themselves. Our usual
policy is to package payment for the hospital resources associated
with managing patients’ medical conditions between hospital
encounters for patients who undergo surgery or receive hospital
visits for any medical condition, including diabetes, hypertension,
or cardiac arrhythmias, and we do not believe that payment for
anticoagulation management services should be made differently
than payment for other medical or surgical management services.”
(74 FR 60554)
© 1999-2010 Abbey & Abbey, Consultants, Inc.
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APC Update for CY2010
PBR – Physician Supervision
 Well over a hundred pages of discussion was provided by CMS in the
Examination Copy of the November 20, 2009 Federal Register (CMS-1414CF).
 In the following, the page numbers referenced are from the Examination
Copy of the Federal Register.
 Background
 In the April 7, 2000 Federal Register, CMS indicated that ‘Direct
Physician Supervision’ was required for off-campus provider-based
clinics.
• For in-hospital and/or operations on the hospital campus, the
physician supervision was assumed because physicians would be
nearby.
 Starting in 2008 and continuing into 2009 CMS indicated that ‘Direct
Physician Supervision’ was required for on-campus, but out-of-hospital
operations and that mid-level practitioners could NOT meet the
supervision requirement.
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APC Update for CY2010
PBR – Physician Supervision
 Direct Physician Supervision – From page 60588 of November 20, 2009
Federal Register:
 “For services furnished on a hospital’s main campus, we are finalizing
a modification of our proposed definition of "direct supervision" in new
paragraph (a)(1)(iv)(A) of §410.27 that allows for the supervisory
physician or nonphysician practitioner to be anywhere on the hospital
campus, including a physician’s office, an on-campus SNF, RHC, or
other nonhospital space. Therefore, direct supervision means that the
supervisory physician or nonphysician practitioner must be present on
the same campus and immediately available to furnish assistance and
direction throughout the performance of the procedure.”
• Of course, the issue then becomes what, exactly, does ‘immediately
available’ mean?
 Distance Metric?
 Time Metric?
 How can we establish that the supervisory physician was
available?
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APC Update for CY2010
PBR – Physician Supervision
 Note that CMS did give us the following guidance from Page 65080:
 “This means that the physician or nonphysician practitioner must be
prepared to step in and perform the service, not just to respond to an
emergency. This includes the ability to take over performance of a
procedure and, as appropriate to both the supervisory physician or
nonphysician practitioner and the patient, to change a procedure or the
course of treatment being provided to a particular patient.”
 In Hospital Definition – While there were some concerns expressed by
commenters, CMS is basically adopting the proposed definition for in the
hospital:
 “…to mean areas in the main building(s) of a hospital or CAH that are
under the ownership, financial, and administrative control of the
hospital or CAH; that are operated as part of the hospital or CAH; and
for which the hospital or CAH bills the services furnished under the
hospital's or CAH's CCN.” (74 FR 60581)
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APC Update for CY2010
PBR – Physician Supervision
 Mid-Level Practitioners Meeting Supervisory Requirements – CMS is
proceeding with allowing certain non-physician practitioner meet the
physician supervisory requirement. Clinical Social Workers (CSWs) have
been added to the list.
 “In summary, for CY 2010, nonphysician practitioners who are specified
under §410.27 of the final regulations as clinical psychologists,
licensed clinical social workers, physician assistants, nurse
practitioners, clinical nurse specialists, and certified nurse midwives,
may directly supervise all hospital outpatient therapeutic services that
they may perform themselves within their State scope of practice and
hospital-granted privileges, provided that they meet all additional
requirements, including any collaboration or supervision requirements
as specified in §§410.71, 410.73, 410.74, 410.75, 410.76, and 410.77.” (74
FR 60591)
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APC Update for CY2010
PBR – Physician Supervision
 Diagnostic Testing Supervision – CMS has provided clarifying language
relative to diagnostic testing supervision. There do not appear to be any
substantive changes in guidance, per se, but the language is now quite
precise.
 Diagnostic testing supervision involves three levels of supervisions:
• General,
• Direct, and
• Personal.
 “For CY 2010, we are finalizing the proposal to require that all hospital
outpatient diagnostic services provided directly or under arrangement,
whether provided in the hospital, in a PBD of a hospital, or at a
nonhospital location, follow the physician supervision requirements for
individual tests as listed in the MPFS Relative Value File.” (74 FR
60591)
• Note: Mid-levels are not allowed to meet the diagnostic testing
supervisory requirement.
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APC Update for CY2010
PBR – Physician Supervision
 Other Questions/Comments
 How will all of this ‘new’ guidance affect the RACs?
 Terminology – Be Careful! CMS is starting to use the phrase, ProviderBased Department (PBR). This language does not appear in the
Provider-Based Rule itself (42 CFR §413.65). The basic terminology is
‘facility’ or ‘organization’. These terms are not further defined in the
PBR.
 What about CR, ICR and PR supervision?
 Additional References  July 18, 2008 Federal Register – Section XII – Page 41518 (73 FR 41518)
 November 18, 2008 Federal Register – Section XII – Page 48702 (73 FR
48702)
 July 20, 2009 Federal Register – Section XII – Page 35358 (74 FR 35358)
 To access most, if not all, of the CMS materials on the Provider-Based
Rule, see our website:
 http://www.APCNow.com/PBRInformationToolkit.htm
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APC Update for CY2010
Ambulatory Surgical Centers
 ASCs  Payment is a combination of APCs and RBRVS
 Payment Rates  3rd year of a 4-year phase-in process
 Covered Surgical Procedures
 Must know what can be performed:
• In a physician’s office,
• The ASC,
• Only in the hospital.
 ASC Conditions for Coverage (CfCs)
 Not exceed 24 hours
 Physician financial interests
 Governing Body
 Infection Control
 Pre-Surgery Assessment
 26 Surgical Procedures Have Been Added to the ASC List
 16 Procedures Going to the Office-Based Category
 Blended Conversion Factor Is $41.873
 How does this compare to the APC conversion factor of $67.439?
© 1999-2010 Abbey & Abbey, Consultants, Inc.
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APC Update for CY2010
Summary and Conclusions
 APCs Represent CMS’s Most Complex Prospective Payment System
 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.
 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.
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