Download - Copyright © 2008 Delmar Learning. All rights reserved. Chapter 9 CMS Reimbursement Methodologies
Copyright © 2008 Delmar Learning. All rights reserved.
Chapter 9
CMS
Reimbursement Methodologies
Copyright © 2008 Delmar Learning. All rights reserved.
2
Federal Health Care Programs
• CHAMPVA
• Indian Health Service
• Medicaid
• Medicare
• TRICARE
• Workers’ Compensation
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3
Ambulance Fee Schedule
• Ambulance suppliers to accept Medicare assignment
• Reporting of HCPCS codes on claims for ambulance services
• Revision of the verification requirements for coverage of nonemergency ambulance services
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4
Ambulatory Surgical Center
• Surgical health care services that must accept assignment on Medicare claim
• Must be a separate entity distinguishable from any other entity or facility– Must have its own employer identifier
number as well as processes for:
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Ambulatory Surgical Center
• Accreditation • Administrative function• Clinical services • Financial and accounting systems• Governance • Professional supervision• Recordkeeping • State licensure
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6
Clinical Laboratory Fee Schedule
• Data set based on a local fee schedule
• Deficit Reduction Act of 1984 – Established the Medicare Clinical
laboratory fee schedule
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Clinical Laboratory Fee Schedule
• Medicare reimburses laboratory services according to the:
– Submitted charge– National limitation amount– Local fee schedule amount
• Whichever one of these is the lowest
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Clinical Laboratory Fee Schedule
• CMS divided ESRD items and services into two different groups for the purposes of payment
• These two groups are:
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Clinical Laboratory Fee Schedule
• Dialysis and associated routine services are reimbursed according to a composite rate.
– Paying according to a composite rate is a common form of Medicare payment– Known as bundling
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Clinical Laboratory Fee Schedule
• Injectable drugs and certain laboratory tests that were not routine or not available in 1983 when Medicare implemented the ESRD composite rate
– Reimbursed separately according to a per-service basis
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Clinical Laboratory Fee Schedule
• Each diagnosis-related group (DRG) has a fee weight given to it– Based on the average resources used to
treat Medicare patients in that DRG
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Clinical Laboratory Fee Schedule
• Repayment rate can be adjusted according to the following guidelines: – Disproportionate share hospital adjustment – Indirect medical education adjustment– Outliers
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Clinical Laboratory Fee Schedule
• Several DRG systems were developed for use in the United States, including:
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Clinical Laboratory Fee Schedule
• Diagnosis-related groups: – Original system used by CMS to reimburse
hospitals for inpatient care provided to Medicare beneficiaries
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Clinical Laboratory Fee Schedule
• Diagnosis-related groups: – Based on intensity of resources, which is
the relative volume and types of diagnostic, therapeutic, and inpatient bed services used to manage an inpatient disease
– Replaced in 2008 by all patient refined DRGs
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Clinical Laboratory Fee Schedule
• All patient diagnosis-related groups – Original DRG system adapted for use by
third party payers to reimburse hospitals for inpatient care provided to non-Medicare beneficiaries.
– Based on intensity of resources
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Clinical Laboratory Fee Schedule
• All patient refined diagnosis-related groups – Adopted by Medicare in 2008 to reimburse
hospital for inpatient care provided to Medicare beneficiaries
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Clinical Laboratory Fee Schedule
• All patient refined diagnosis-related groups – Expanded original DRG system to add two
subclasses to each DRG that adjusts Medicare inpatient hospital reimbursement rates for severity of illness
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Clinical Laboratory Fee Schedule
• Each subclass, in turn, is subdivided into four areas:
1. Minor
2. Moderate
3. Major
4. Extreme
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Clinical Laboratory Fee Schedule
• IPPS three day payment window entails outpatient pre-admission services given by a hospital, up to three days earlier to a patient’s inpatient admission– To be covered by the IPPS DRG payment
for:
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Clinical Laboratory Fee Schedule
• Diagnostic services
• Therapeutic services for which the inpatient principal diagnosis code exactly matches that for preadmission services
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Clinical Laboratory Fee Schedule
• All the procedures and services are included in a outpatient encounter that was provided on the same day
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Inpatient Psychiatric Facility Prospective Payment System
• Implemented as a result of Medicare, Medicaid, and SCHOP Balanced Budget Refinement Act of 1999
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Elements of the IPFPPS
• Minimum date set for post acute care
• Case mix groups
• CMG relative weights
• CMG payment rates
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Elements of the IPFPPS
• BBRA of 1999 authorized implementation of a per-discharge DRG long-term care hospital prospective payment system for cost reporting periods beginning on or after October 1, 2002
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Major Elements of LTCHPPS
• Patient classification system
• Relative weights
• Payment rate
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Skilled Nursing Facility Prospective Payment System
• Modified repayment for Medicare Part A skilled nursing facility services
• Starting 1998– SNFs were no longer paid on a reasonable
cost basis but rather on the basis of a prospective payment system
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Major Elements of SNFPPS
• Payment rate
• Case mix adjustment
• Geographic adjustment
• Adjustments
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Medicare Physician Fee Schedule
• As of 1992, medical doctors’ services and procedures are:– Paid back according to a payment system
identified as the Resource-Based Relative Value Scale
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Medicare Physician Fee Schedule
• System is currently known as” Medicare physician fee schedule”– Reimburses providers according to pre-
determined rates assigned to services– Improved by CMS annually
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Payment Components
• Physician work– Physician’s time and intensity in providing
the service
• Practice expense– Overhead costs involved in providing a
service
• Malpractice expense
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Payment Components
• Medicare physician fee schedule is used to determine payment for Medicare Part B services– Other services, such as anesthesia,
pathology/laboratory, and radiology, require special consideration
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Payment Components
• Anesthesia services payments– Based on the actual time an
anesthesiologist spends with a patient and the American Society of Anesthesiologists’ relative value system
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Payment Components
• Radiology services payments vary according to place of service
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Payment Components
• Pathology services payment vary according to number of patients served:– Includes clinical laboratory management and
supervision of technologists covered and paid as hospital services.
– Directed to an individual patient in a hospital setting and are paid under physician fee schedule
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Nonparticipating Physicians
• Nonparticipating providers who don’t accept assignment from Medicare, which means the amount Medicare pays back for services presented– Subject to a five percent decrease of the
Medicare physician fee schedule
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Medicare Secondary Payer
• Automobile medical or no-fault insurance
• Disabled individual covered by a large group health plan or who has coverage under the LCHP of a family member who is currently employed
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Medicare Secondary Payer
• End-stage renal disease program
• Federal black-lung program
• Other liability insurance
• Veteran Administration benefits
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Medicare Secondary Payer
• Working group health plan maintained by an employer, or an individual age 65 or older who is covered by a working spouse’s EGHP
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Medicare Secondary Payer
• Upon claims submission, amount of secondary benefits payable is the lowest of:– Actual charges by physician or supplier
minus amount paid by primary payer
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Medicare Secondary Payer
• Amount Medicare would pay if services were not covered by the primary payer– Higher of the Medicare physician fee
schedule minus the amount actually paid by the primary payer
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Medicare Secondary Payer
• To calculate amount of Medicare secondary benefits payable on a given claim, the following information is required:– Amount paid by primary payer – Primary payer’s allowable charge
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Chargemaster
• Computer generated list of procedures, services, and supplies with charges for each: – Department code– Service codes – Service description – Revenue code – Charge amount – Relative value units
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Claims Submission
• Ambulance companies
• Ambulatory surgery centers
• Home health care agencies
• Hospice organizations
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Claims Submission
• Hospitals
• Psychiatric drug/alcohol treatment facilities
• Skilled nursing facilities
• Sub-acute facilities
• Stand-alone clinical/laboratory facilities
• Walk-in clinics