© 1999-2014 abbey & abbey, consultants, inc. slide # 1 apc/opps update for cy2015 version 16 -...

© 1999-2014 Abbey & Abbey, Consultants, Inc. Slide # 1

APC/OPPS Update for CY2015

Version 16 - GenericNotes © 1994-2014, Abbey & Abbey, Consultants, Inc.

CPT® Codes – © 2013-2014 AMA

Sponsored By:

APCNowwww.APCNow.com

Presented By:

Duane C. Abbey, Ph.D., CFPAbbey & Abbey, Consultants, Inc.

[email protected] http://www.aaciweb.comhttp://www.APCNow.com http://www.HIPAAMaster.com


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”.


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 error-free. 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.

Disclaimer


To review the many proposed and finalized changes to APCs for 2015. To recognize the general trends for APCs with particular attention to

increased bundling. To understand how recent changes in the cost reporting process affect

APCs payments. To understand the complex nature of APCs and associated compliance

issues including RAC concerns. To review changes in grouping with particular attention to new CPT and

HCPCS codes. To appreciate the potential financial and operational impact of the proposed

changes. To understand how important it is for hospitals to comment to the proposed

changes. To understand the difference between composite and comprehensive APCs. To review the possible impact of the proposed change on high impact areas

such as observation, the Emergency Department, interventional radiology and associated areas.

To review changes to and trends for the Provider-Based Rule (PBR). To discuss anticipated future changes and directions for APCs.

OPPS Final Update for CY2015Objectives


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

OPPS Final Update for CY2015Acronyms/Terminology


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!

OPPS Final Update for CY2015Acronyms/Terminology


OPPS Final Update for CY2015General 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 barely under 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 be updated.

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’?


OPPS Final Update for CY2015General Comments

Note: Citations to the Federal Register are to the November 10, 2014 Federal Register. There are some references to previous APC FR entries.

This Federal Register entry discusses a number of different topics. Not all the topics discussed necessarily relate to APCs (Ambulatory Payment Classifications). ASCs (Ambulatory Surgical Centers) are now paid under a hybrid payment system of APCs and MPFS (Medicare Physician Fee Schedule).

Here are some of the other issues discussed in this Federal Register. Medicare and Medicaid Programs: Hospital Outpatient Prospective Payment and Ambulatory Surgical

Center Payment Systems and Quality Reporting Programs; Physician-Owned Hospitals: Data Sources for Expansion Exception; Physician Certification of Inpatient Hospital Services; Medicare Advantage Organizations Part D Sponsors: CMS-Identified

Overpayments Associated with Submitted Payment Data This is a final Federal Register entry, so there are very few topics for which

comments can be made. Also, be certain to download all the Addenda that are in compressed

format. Particularly, Addendum A and Addendum B.


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)

OPPS Final Update for CY2015APC 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 Procedureso 0325 – Group Psychotherapy



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 (CY 2015 APC=0346, SI=S, $125.07 – CY2012 - $14.95)

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?



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.




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)


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?



OPPS Final Update for CY2015Final Changes

Recalibration of APC Relative Payment Weights Cost Reports and CCRs – Utilization of New Cost Centers

• Goes back to the RTI findings and recommendations.• “For the CY 2015 OPPS proposed rates, we used the set of claims

processed during CY 2013. We applied the hospital-specific CCR to the hospital’s charges at the most detailed level possible, based on a revenue code-to-cost center crosswalk that contains a hierarchy of CCRs used to estimate costs from charges for each revenue code.” (79 FR 66784)

• “In summary, as we proposed, we are continuing to use data from the “Implantable Devices Charged to Patients” and “Cardiac Catheterization” cost centers to create distinct CCRs for use in calculating the OPPS relative payment weights for the CY 2015 OPPS. For the “Magnetic Resonance Imaging (MRI)” and “Computed Tomography (CT) Scan” APCs identified in Table 3 of this final rule with comment period, we are continuing our policy of removing claims from cost modeling for those providers using “square feet” as the cost allocation statistic for CY 2015. (79 FR 66784).



Recalibration of APC Relative Payment Weights Device Dependent APCs

• “Historically, device-dependent APCs are populated by HCPCS codes that usually, but not always, require that a device be implanted or used to perform the procedure. The standard methodology for calculating device-dependent APC costs utilizes claims data that generally reflect the full cost of the required device by using only the subset of single procedure claims that pass the procedure-to-device and device-to-procedure edits; (79 FR 66793)

• Examples: 0039 – Level III Neurostimulator 0089 – Level III Pacemaker 0107 – Level I ICD 0384 – GI Procedures with Stents



Recalibration of APC Relative Payment Weights Blood and Blood Products

• “We continue to believe that the hospital-specific simulated blood-specific CCR methodology better responds to the absence of a blood-specific CCR for a hospital than alternative methodologies, such as defaulting to the overall hospital CCR or applying an average blood-specific CCR across hospitals. Because this methodology takes into account the unique charging and cost accounting structure of each hospital, we believe that it yields more accurate estimated costs for these products. We continue to believe that this methodology in CY 2015 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.” (79 FR 66795)

This is an area worth checking the actual APC payments from Addendum A and Addendum B relative to costs. There has been great variability is the several past years.



Recalibration of APC Relative Payment Weights Brachytherapy Sources

• “In the CY 2015 OPPS/ASC proposed rule (79 FR 40939 through 40940), for CY 2015, we proposed to use the costs derived from CY 2013 claims data to set the proposed CY 2015 payment rates for brachytherapy sources, as we proposed to use to set the proposed payment rates for most other items and services that would be paid under the CY 2015 OPPS. We based the proposed payment rates for brachytherapy sources on the geometric mean unit costs for each source, consistent with the methodology proposed for other items and services paid under the OPPS, as discussed in section II.A.2. of the proposed rule. We also proposed to continue the other payment policies for brachytherapy sources that we finalized and first implemented in the CY 2010 OPPS/ASC final rule with comment period (74 FR 60537). (79 FR 66796)

Why does CMS break out this discussion about payments for brachytherapy sources?

How is CMS ‘supposed’ to be paying form brachytherapy sources.



Recalibration of APC Relative Payment Weights

Establishment of Comprehensive APCs

• “In the CY 2014 OPPS/ASC final rule with comment period (78 FR 74861 through 74910), we finalized a comprehensive payment policy that packages payment for adjunctive and secondary items, services, and procedures into the most costly primary procedure (primarily medical device implantation procedures) under the OPPS at the claim level, effective January 1, 2015. We defined a comprehensive APC (C-APC) as a classification for the provision of a primary service and all adjunctive services provided to support the delivery of the primary service. We established comprehensive APCs as a category broadly for OPPS payment and established 29 C-APCs to prospectively pay for 167 of the most costly device-dependent services assigned to these 29 APCs beginning in CY 2015 (78 FR 74910). (79 FR 66798)




Establishment of Comprehensive APCs

• Under this policy, we designated each service described by a HCPCS code assigned to a C-APC as the primary service and, with few exceptions described below, consider all other services reported on a hospital outpatient claim in combination with the primary service to be related to the delivery of the primary service (78 FR 74869). In addition, under this policy, we calculate a single payment for the entire hospital stay, defined by a single claim, regardless of the date of service span over which the primary service and all related services are delivered. This comprehensive APC packaging policy packages payment for all items and services typically packaged under the OPPS, but also packages payment for other items and services that are not typically packaged under the OPPS (78 FR 74909). (79 FR 66798)




Rate Setting for Comprehensive APCs

• APC assignment of primary (J1) services.

• Complexity adjustments and determination of final comprehensive APC groupings.

Proposed Policy for CY2015 – Comprehensive APCs

• “For CY 2015, we are proposing to restructure and consolidate some of the current device-dependent APCs to improve both the resource and clinical homogeneity of these APCs. In addition, instead of assigning any add-on codes to status indicator “J1” as finalized in the CY 2014 OPPS/ASC final rule with comment period (78 FR 74873 through 74883), we are proposing to package all add-on codes, but to allow certain add-on codes to qualify a procedure code combination for a complexity adjustment.” (79 FR 40941)



In the CY 2014 OPPS/ASC final rule with comment period (78 FR 74861 through 74910), we finalized a policy, with a delayed implementation date of CY 2015, that designated certain covered OPD services as primary services (identified by a new OPPS status indicator of “J1”) assigned to C-APCs. When such a primary service is reported on a hospital outpatient claim, taking into consideration the few exceptions that are discussed below, we treat all other items and services reported on the claim as integral, ancillary, supportive, dependent, and adjunctive to the primary service (hereinafter collectively referred to as “adjunctive services”) and representing components of a comprehensive service (78 FR 74865). This results in a single prospective payment for the primary, comprehensive service based on the cost of all reported services at the claim level. (79 FR 66799)




Policy for CY2015 – Comprehensive APCs

• Step 1: Select primary (“J1”) services

Treatment of add-on codes

• Step 2: Definition of the payment package (comprehensive service).

• Step 3: Ranking of primary services initial comprehensive APC assignments.

• Step 4: Complexity adjustments and determination of final comprehensive APC groupings.

Complexity Test for Eligible Add-On Codes



Recalibration of APC Relative Payment Weights Proposed Policy for CY2015 – Comprehensive APCs

• “We note that, in response to public comments received, we are providing in Addendum J to this proposed rule a breakdown of cost statistics for each code combination that would qualify for a complexity adjustment (including primary code and add-on code combinations). Addendum J to this proposed rule also contains summary cost statistics for each of the code combinations proposed to be reassigned under a given primary code. The combined statistics for all proposed reassigned complex code combinations are represented by an alphanumeric code with the last 4 digits of the designated primary service followed by “A” (indicating “adjustment”).” (Page 40944)

• “Similar to the original 29 device dependent APCs for CY 2014 that were converted to C-APCs, the additional device dependent APCs that are being proposed for conversion to C-APCs contain comprehensive services primarily intended for the implantation of costly medical devices. Therefore, we are proposing to apply the comprehensive APC payment policy to the remaining device-dependent APCs for CY 2015.” (79 FR 40945)



Recalibration of APC Relative Payment Weights Policy for CY2015 – Comprehensive APCs

• Examples of Comprehensive APCs AICDP 0090 Level II Pacemaker and Similar Procedures

$6,542.78 AICDP 0089 Level III Pacemaker and Similar Procedures

$9,489.74 AICDP 0655 Level IV Pacemaker and Similar Procedures

$16,400.98 EPHYS 0084 Level I Electrophysiologic Procedures $872.92 EPHYS 0085 Level II Electrophysiologic Procedures $4,633.33 EPHYS 0086 Level III Electrophysiologic Procedures $14,356.62 VASCX 0083 Level I Endovascular Procedures $4,537.45 VASCX 0229 Level II Endovascular Procedures $9,624.10 VASCX 0319 Level III Endovascular Procedures $14,840.64



Reorganizing C-APCs In summary, our proposal to reorganize, combine, and restructure some

of the C-APCs included the following proposed changes:• Endovascular clinical family (renamed Vascular Procedures, VASCX).

We proposed to combine C-APCs 0082, 0083, 0104, 0229, 0319, and 0656 illustrated for CY 2014 to form three proposed levels of comprehensive endovascular procedure APCs: C-APC 0083 (Level I Endovascular Procedures); C-APC 0229 (Level II Endovascular Procedures); and C-APC 0319 (Level IV Endovascular Procedures).

• Automatic Implantable Cardiac Defibrillators, Pacemakers, and Related Devices (AICDP). We proposed to combine C-APCs 0089, 0090, 0106, 0654, 0655, and 0680 as illustrated for CY 2014 to form three proposed levels of C-APCs within a broader series of APCs for pacemaker implantation and similar procedures as follows: APC 0105 (Level I Pacemaker and Similar Procedures), a non-comprehensive APC; C-APC 0090 (Level II Pacemaker and Similar Procedures); C-APC 0089 (Level III Pacemaker and Similar Procedures); and C-APC 0655 (Level IV Pacemaker and Similar Procedures).



Reorganizing C-APCs

We proposed to delete the clinical family for Event Monitoring, which only had one C-APC (C-APC 0680 (Insertion of Patient Activated Event)) with a single CPT code 33282 as illustrated for CY 2014. We also proposed to reassign CPT code 33282 to C-APC 0090, which contains clinically similar procedures.

In the urogenital family, we proposed two levels instead of three levels for urogenital procedures, and to reassign several codes from APC 0195 to C-APC 0202 (Level V Female Reproductive Procedures).

We proposed to rename the arthroplasty family of APCs to Orthopedic Surgery. We also proposed to reassign several codes from APC 0052 to C-APC 0425, which we proposed to rename Level V Musculoskeletal Procedures Except and and Foot.



Reorganizing C-APCs

We proposed three levels of Electrophysiologic procedures, using the current inactive APC “0086” instead of APC 0444, to have consecutive APC grouping numbers for this clinical family and to rename APC 0086 “Level III Electrophysiologic Procedures.” In addition, we proposed to replace composite APC 8000 with proposed C-APC 0086 as illustrated in the CY 2014 OPPS/ASC final rule with comment period (78 FR 74870).

We also proposed three new clinical families: Gastrointestinal Procedures (GIXXX) for gastrointestinal stents, Tube/Catheter Changes (CATHX) for insertion of various catheters, and Radiation Oncology (RADTX), which would include C-APC 0067 for single session cranial SRS.

• C-APCs insert a new level of complexity for APCs and continue CMS’s goal of increased bundling.

• See Addendum J for further information.



Concerns About C-APCs There is an extensive Federal Register discussion of the C-APCs which

is appropriate given the degree of bundling that is taking place. Is there anyway for hospitals to know if these C-APCs are being

implemented correctly? Commenters Suggested the Following Be Broken Out:

• Dialysis and emergency dialysis services.• Blood products.• Expensive diagnostic tests, such as angiography.• High-cost drugs and devices that account for a high percentage of

the geometric mean cost of a C-APC.• Outpatient services paid under a payment schedule, such as

laboratory services. CMS has rejected such recommendations.




Composite APCs

• Extended Assessment and Management Composite APC (APC 8009) - “For CY 2015, we are proposing to continue our CY 2014 finalized policy to provide payment for all qualifying extended assessment and management encounters through composite APC 8009.” (79 FR 40954) For CY2015 - $1,234.22.

• Low Dose Rate (LDR) Prostate Brachytherapy Composite APC (APC 8001) - “For CY 2015, we are proposing to continue to pay for LDR prostate brachytherapy services using the composite APC payment methodology proposed and implemented for CY 2008 through CY 2014. That is, we are proposing to use CY 2013 claims reporting charges for both CPT codes 55875 and 77778 on the same date of service with no other separately paid procedure codes (other than those on the bypass list) to calculate the proposed payment rate for composite APC 8001.” (79 FR 40955) For CY2015 - $$3,608.44




Composite APCs

• Mental Health Services Composite APC (APC 0034) - “Specifically, we are proposing that when the aggregate payment for specified mental health services provided by one hospital to a single beneficiary on one date of service based on the payment rates associated with the APCs for the individual services exceeds the maximum per diem payment rate for partial hospitalization services provided by a hospital, those specified mental health services would be assigned to APC 0034 (Mental Health Services Composite).” (79 FR 40955)

• Multiple Imaging Composite APCs (APCs 8004, 8005, 8006, 8007, and 8008) - “For CY 2015, we are proposing to continue to pay for all multiple imaging procedures within an imaging family performed on the same date of service using the multiple imaging composite APC payment methodology.” (79 FR 40956) CY2015 - $195.62



Final Packaging Policies for CY2015 Ancillary Services

• “These ancillary services that we have identified are primarily minor diagnostic tests and procedures that are often performed with a primary service, although there are instances where hospitals provide such services alone and without another primary service during the same encounter.” (Page 40959)

• “Finally, we are proposing to delete status indicator “X” (Ancillary Services) because the majority of the services assigned to status indicator “X” are proposed to be assigned to status indicator “Q1” (STV-Packaged Codes). For the services that are currently assigned status indicator “X” that are not proposed to be conditionally packaged under this policy, we will assign those services status indicator “S” (Procedure or Service, Not Discounted When Multiple), indicating separate payment and that the services are not subject to the multiple procedure reduction.” (79 FR 40960)

See Addendum B for Conditionally Packaged Items (SI=“Q1”)



Final Packaging Policies for CY2015 Ancillary Services

• “After consideration of the public comments we received, we are finalizing our ancillary services packaging policy as proposed, including deletion of status indicator “X.” We also are adopting as final our proposed revision of the regulations at 42 CFR 419.2(b)(7) to replace the phrase “Incidental services such as venipuncture” with “Ancillary services” to more accurately reflect the final packaging policy for CY 2015.” (79 FR 66821)

Conditionally Packaged Ancillary Services • 0012 $102.18 Q1 Level I Debridement & Destruction• 0060 $20.57 Q1 Manipulation Therapy• 0077 $170.77 Q1 Level I Pulmonary Treatment• 0099 $81.40 Q1 Electrocardiograms/Cardiography• 0215 $98.52 Q1 Level I Nerve and Muscle Services• 0230 $54.01 Q1 Level I Eye Tests & Treatments• 0260 $61.59 Q1 Level I Plain Film Including Bone Density

Measurement• 0261 $98.56 Q1 Level II Plain Film Including Bone Density

Measurement



Final Packaging Policies for CY2015 Conditionally Packaged Ancillary Services

• 0265 $95.12 Q1 Level I Diagnostic and Screening Ultrasound• 0340 $54.33 Q1 Level II Minor Procedures• 0342 $56.31 Q1 Level I Pathology• 0345 $78.91 Q1 Level I Transfusion Laboratory Procedures• 0364 $44.94 Q1 Level I Audiometry• 0365 $122.36 Q1 Level II Audiometry• 0367 $167.31 Q1 Level I Pulmonary Tests• 0420 $136.66 Q1 Level III Minor Procedures• 0433 $190.55 Q1 Level II Pathology• 0450 $30.33 Q1 Level I Minor Procedures• 0624 $81.76 Q1 Phlebotomy and Minor Vascular Access Device

Procedures• 0690 $36.47 Q1 Level I Electronic Analysis of Devices• 0698 $104.61 Q1 Level II Eye Tests & Treatments



Final Calculation of OPPS Scaled Payment Weights “For the CY 2014 OPPS, we standardized all of the relative payment

weights to clinic visit APC 0634 as discussed in section VII. of this proposed rule. For CY 2015, we are proposing to continue this policy to maintain consistency in calculating unscaled weights that represent the cost of some of the most frequently provided services. We are proposing to assign APC 0634 a relative payment weight of 1.00 and to divide the geometric mean cost of each APC by the proposed geometric mean cost for APC 0634 to derive the proposed unscaled relative payment weight for each APC.” (79 FR 40962)

Final Conversion Factor Update Conversion Factor Increase is 2.2% = 2.9% - 0.5% - 0.2%

• MPF Adjustment and Additional Adjustment – CF=$74.144 Proposed Wage Index Changes

“In this proposed rule, we are proposing to use the proposed FY 2015 hospital IPPS wage index for urban and rural areas as the wage index for the OPPS hospital to determine the wage adjustments for the OPPS payment rate and the copayment standardized amount for CY 2015.” (79 FR 40964) No change for CY2015 in the process.



Proposed Adjustment for Rural SCHs and EACHs under Section 1833(t)(13)(B) of the Act

“After consideration of the public comments we received, we are finalizing our CY 2015 proposal to continue our policy of a 7.1 percent payment adjustment that is done in a budget neutral manner for rural SCHs, including EACHs, for all services and procedures paid under the OPPS, excluding separately payable drugs and biologicals, devices paid under the pass-through payment policy, and items paid at charges reduced to costs.” (79 FR 66831)

Proposed Hospital Outpatient Outlier Payments

“We estimate that a fixed-dollar threshold of $2,775, combined with the multiple threshold of 1.75 times the APC payment rate, will allocate 1.0 percent of aggregated total OPPS payments to outlier payments.” (79 FR 66834)



Proposed Beneficiary Copayments

CMS discusses the 40% to 20% range for coinsurance. Copayments limited to inpatient hospital deductible for that year.

“We note that OPPS copayments may increase or decrease each year based on changes in the calculated APC payment rates due to updated cost report and claims data, and any changes to the OPPS cost modeling process. However, as described in the CY 2004 OPPS/ASC final rule with comment period, the development of the copayment methodology generally moves beneficiary copayments closer to 20 percent of OPPS APC payments (68 FR 63458 through 63459).” (Page 40973)

• No real changes in this area. CMS continues to develop various formulations. At this rate it will be years before we move to the correct 20% coinsurance.

The formula for the copayment amount for hospitals that do not meet the Hospital OQR Program is given.



2-Times Rule Violations 0066 Level V Radiation Therapy 0095 Cardiac Rehabilitation 0330 Dental Procedures 0388 Discography 0420 Level III Minor Procedures 0433 Level II Pathology 0450 Level I Minor Procedures 0634 Hospital Clinic Visits 0661 Level III Pathology

• Note: The number of APCs violating the 2-times rule is decreasing. APCs on this list should not be allowed to remain for more than two years.

For instance, the APC=0634, Hospital Clinic Visits, will need to be addressed shortly. Usual approach to fix is to break the APC into multiple APCs.



Final OPPS APC-Specific Policies Each year CMS addresses specific areas. Here some examples:

• Upper GI Procedures (APCs 0142, 0361, 0419, and 0422)• Gynecologic Procedures (APCs 0188, 0189, 0192, 0193, and 0202)• Cystourethroscopy, Transprostatic Implant Procedures, and Other

Genitourinary Procedures (APCs 0160, 0161, 0162, 0163, and 1564)• Level IV Anal/Rectal Procedures (APC 0150)• Chemodenervation (APC 0206)• Epidural Lysis (APCs 0203 and 0207)• Ocular Services: Ophthalmic Procedures and Services• Echocardiography Services Without Contrast (APCs 0269, 0270,

and 0697)• Parathyroid Planar Imaging (APCs 0263, 0317, 0406, and 0414)• Proton Beam Therapy and Magnetoencephalography (MEG)

Services (APCs 0065,0412, 0446, 0664, and 0667)• Epidermal Autograft (APC 0327)• Negative Pressure Wound Therapy (NPWT) (APCs 0012, 0013, 0015

and 0016)



Proposed OPPS Transitional Pass-Through Payment for Additional Costs of Drugs, Biologicals, and Radiopharmaceuticals

“Therefore, for CY 2015, we proposed to pay for pass-through drugs and biologicals at ASP+6 percent, equivalent to the rate these drugs and biologicals would receive in the physician’s office setting in CY 2015.” (79 FR 66876)

“In the case of policy-packaged drugs (which include the following: contrast agents; diagnostic radiopharmaceuticals; anesthesia drugs; drugs, biologicals, and radiopharmaceuticals that function as supplies when used in a diagnostic test or procedure and drugs; and biologicals that function as supplies when used in a surgical procedure), we proposed that their pass-through payment amount would be equal to ASP+6 percent for CY 2015 because, if not on pass-through status, payment for these products would be packaged into the associated procedure.” (79 FR 66876)

OPPS Drug Packaging Threshold Is $95.00. (79 FR 66874)



Final Provisions for Reducing Transitional Pass-Through Payments for Policy-Packaged Drugs and Biologicals to Offset Costs Packaged into APC Groups “Therefore, in the CY 2015 OPPS/ASC proposed rule (79 FR 40999), we

proposed to maintain the high cost/low cost APC structure for skin substitute procedures in CY 2015. However, we proposed to revise the current methodology used to establish the high cost/low cost threshold, and to establish the high cost/low cost threshold based on the weighted average MUC for all skin substitutes using CY 2013 claims (which was proposed to be $27 per cm2). Skin substitutes with an MUC above $27 per cm2 using CY 2013 claims were proposed to be classified in the high cost group and those with an MUC at or below $27 per cm2 were proposed to be classified in the low cost group.”

“We proposed to continue the CY 2014 policy that skin substitutes with pass-through payment status would be assigned to the high cost category for CY 2015. Skin substitutes with pricing information but without claims data to calculate an MUC would be assigned to either the high or low cost category based on the product’s ASP+6 percent payment rate. (79 FR 66883)



Final OPPS Payment for Hospital Outpatient Visits

CMS is making no changes in this area other than recalibration APC 0634.

The proposed increase for APC=0634 is $3.69 or a 4.0% increase. However, note that the copayment for CY2015 is being set at the standard 20% coinsurance.

Anticipate that there will be future discussions and possible changes for hospital clinic visits.

No other major changes for ED Visits and Critical Care

APC 0634 CY2014 Final CY2015Payment $92.53 $96.22Copayment $37.01 $19.25



Final OPPS Payment for Hospital Outpatient Visits

“Commenters requested that CMS discontinue the single HCPCS G-code for reporting clinic visits and return to a reporting structure that recognizes differences in clinical acuity and resource utilization. The commenters expressed concern that CMS’ clinic visit coding proposal creates a payment bias that unfairly penalizes certain providers, such as trauma centers, cancer hospitals, and major teaching hospitals, which provide care for more severely ill Medicare beneficiaries. One commenter urged CMS to carefully review its ratesetting process for HCPCS code G0463 to ensure that claims containing packaged services that are intended to be part of the hospital clinic rates are not being excluded from the payment computations, thereby creating artificially low rates. Another commenter recommended that CMS work with the American Medical Association (AMA) to develop facility-specific CPT codes for E/M clinic visits (with no distinction between new and established patients) and seek input from industry stakeholders to develop descriptions for these new codes that allow for their consistent application by hospital outpatient clinics/facilities.” (79 FR 66898)



Final Payment for Partial Hospitalization Services There is a long discussion of a court case challenging CMS’s ability to

break CMHCs out and use CMHCs’ costs versus hospital costs. “The statute is reasonably interpreted to allow the relative payment

weights for the OPPS payment rates for PHP services provided by CMHCs to be based solely on CMHC data and relative payment weights for hospital-based PHP services to be based exclusively on hospital data.” (79 FR 41011)

Inpatient Only Procedures – CPT 22222 – Osteotomy of Spine – Added

Removed – Add-On Codes 63043 & 63044 - Laminotomy

APC Group Title APC PaymentFor CY2015

0172 Level I PHP for CMHCs $96.510173 Level II PHP for CHMCs $114.230175 Level I PHP for Hospitals $179.110176 Level II PHP for Hospitals $195.62



Final Nonrecurring Policy Changes: Collecting Data on Services Furnished in Off-Campus Provider-Based Departments “We will take under consideration the suggestion that CMS create a

way for hospitals to report their acquisition of off-campus PBDs through the enrollment process, although this information, as currently reported, like many of the suggestions above, would not allow us to know exactly which services are furnished in off-campus PBDs and which services are furnished on the hospital’s main campus when a hospital provides both on the same day.” (79 FR 66912)

“We agree that neither the proposed modifier nor a POS code provides precise information on the specific location of each off-campus PBD for each furnished service. However, we believe having information on the type and frequency of services furnished at all off-campus locations will assist CMS in better understanding the distribution of services between on-campus locations and off-campus locations.” (79 FR 66912)

Note that CMS is delimiting this data gathering to off-campus provider-based clinics.



Proposed Nonrecurring Policy Changes: Collecting Data on Services Furnished in Off-Campus Provider-Based Departments

“We appreciate these comments. At this time, we are only finalizing a data collection in this final rule with comment period. We did not propose and, therefore, are not finalizing any adjustment to payments furnished in the off-campus PBD setting.” (79 FR 66913)

“We also appreciate the comment on emergency departments. We do not intend for hospitals to report the new modifier for services furnished in an emergency department that is provider-based to a hospital. We note that there is already a POS code for the emergency department, POS 23 (emergency room-hospital), and this code would continue to be used for emergency department services. That is, the new off-campus PBD code that will be created for purposes of this data collection would not apply to hospital emergency department services. (79 FR 66913)



Proposed Nonrecurring Policy Changes: Collecting Data on Services Furnished in Off-Campus Provider-Based Departments

“Hospitals that have questions about which departments are considered to be “off-campus PBDs” should review additional guidance that CMS releases on this policy and work with the appropriate CMS regional office if individual, specific questions remain.” (79 FR 66914)

“The location where the service is actually furnished would dictate the use of the modifier, regardless of where the order for services initiated. We expect the modifier and the POS code for off-campus PBDs to be reported in locations in which the hospital expends resources to furnish the service in an off-campus PBD setting. For example, hospitals would not report the modifier for a diagnostic test that is ordered by a practitioner who is located in an off-campus PBD when the service is actually furnished on the main campus of the hospital.” (79 FR 66914)



Nonrecurring Policy Changes: Collecting Data on Services Furnished in Off-Campus Provider-Based Departments

“In summary, after consideration of the public comments received, we are finalizing our proposal with modifications. For hospital claims, we are creating a HCPCS modifier that is to be reported with every code for outpatient hospital services furnished in an off-campus PBD of a hospital. This code will not be required to be reported for remote locations of a hospital defined at 42 CFR 412.65, satellite facilities of a hospital defined at 42 CFR 412.22(h), or for services furnished in an emergency department. This 2-digit modifier will be added to the HCPCS annual file as of January 1, 2015, with the label “PO,” the short descriptor “Serv/proc off-campus pbd,” and the long descriptor “Services, procedures and/or surgeries furnished at off-campus provider-based outpatient departments.” Reporting of this new modifier will be voluntary for 1 year (CY 2015), with reporting required beginning on January 1, 2016. Additional instruction and provider education will be forthcoming in subregulatory guidance.” (79 FR 66914)



Policy Changes: Collecting Data on Services Furnished in Off-Campus Provider-Based Departments

“For professional claims, instead of finalizing a HCPCS modifier, in response to public comments, we will be deleting current POS code 22 (outpatient hospital department) and establishing two new POS codes--one to identify outpatient services furnished in on-campus, remote, or satellite locations of a hospital, and one to identify services furnished in an off-campus PBD hospital setting. We will maintain the separate POS code 23 (Emergency room-hospital) to identify services furnished in an emergency department of the hospital. These new POS codes will be required to be reported as soon as they become available. However, advanced notice of the availability of these codes will be shared publicly as soon as practicable.” (79 FR 66914)



CY 2015 OPPS Payment Status and Comment Indicators “In the CY 2015 OPPS/ASC proposed rule (79 FR 41014), for CY 2015,

we proposed to delete payment status indicator “X” and to assign ancillary services that are currently assigned payment status indicator “X” to either payment status indicator “Q1” or “S.” We also proposed to revise the definition of payment status indicator “Q1” by removing payment status indicator “X” from the packaging criteria, so that codes assigned payment status indicator “Q1” would be designated as STV-packaged, rather than STVX-packaged, because payment status indicator “X” was proposed for deletion. … The ancillary services packaging policy is the policy that makes maintaining status indicator “X” no longer necessary. After consideration of the public comments that we received and that are discussed in section II.A.3.c.(1) of this final rule with comment period, we are finalizing, without modification, our CY 2015 proposal to delete payment status indicator “X” and to assign ancillary services that are currently assigned payment status indicator “X” to either payment status indicator “Q1” or “S.” (79 FR 66914)

See Also – SI = “E” and “A”



Minor Procedure Definition

“For CY 2015, we proposed to define major procedures as any HCPCS code having a status indicator of “J1,” “S,” “T,” or “V,” define minor procedures as any code having a status indicator of “F,” “G,” “H,” “K,” “L,” “R,” “U,” or “N,” and classify “other” procedures as any code having a status indicator other than one that we have classified as major or minor.” (79 FR 66788)

Exercise:

• What is a minor surgery for MPFS (Medicare Physician Fee Schedule)?

• What is a minor surgery for DRGs?

• For Revenue Code 0361, what is a minor surgery?

• How does this new definition for APCs fit into the picture?

• Does this variance in definitions create any problems?


CMS Appears To Be Accelerating Bundling and Packaging Comprehensive APCs New Bundling Process Comprehensive vs. Composite

Standard Updating Composite APCs Observation, Brachytherapy, Mental Health Cost Reports – CCRs Device Dependent APCs Drugs and Biological 2-Times Rule Violations Special Hospitals – SCHs – 7.1% Continues Outlier Payments

Status Indicator Updating The SIs drive the APC grouping process, particularly for increased

packaging and bundling. APC Specific Policies Data Collection for Off-Campus Provider-Based Clinics ASC Payment System Update – Hybrid of APCs and MPFS Quality Reporting And More!

OPPS Final Update for CY2015Summary and Conclusions

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