by Steven Andrews
The 2015 OPPS proposed rule, released July 3 by CMS, is relatively short at less than 700 pages, but contains refinements to the previously introduced Comprehensive APC policy, significant packaging of ancillary services, and a change for inpatient certification requirements.
“In terms of the volume of changes, it’s less than we normally see, but in terms of impact, it’s on par with last year’s big changes,” says Kimberly Anderwood Hoy Baker, JD, director of Medicare and Compliance for HCPro, a division of BLR, in Danvers, Massachusetts.
Jugna Shah, MPH, president of Nimitt Consulting, agrees and encourages hospitals to begin assessing financial impact now in light of CMS’ packaging proposals.
CMS has proposed implementing a concept it finalized in the 2014 OPPS final rule by introducing Comprehensive APCs for device-dependent APCs. With Comprehensive APCs, a single payment will be made rather than separate, individual APC payments, Shah says.
The 2015 OPPS proposed rule includes some lower-cost device-dependent APCs and two new APCs for other procedures and technologies that are either largely device dependent or represent single session services with multiple components. After additional consolidation and restructuring, CMS is now proposing 28 Comprehensive APCs for 2015.
The most significant change to the policy is a proposed “complexity adjustment.” The adjustment is applied when a primary procedure assigned to a Comprehensive APC is reported with other specified procedures also assigned to Comprehensive APCs or with a specified packaged add-on code. When the facility reports one of these combinations, CMS will increase the payable APC to the next higher APC in the clinical group, similar to DRGs on the inpatient side.
“This is the first time in OPPS history where we have something like severity adjustment,” says Baker.
Instead of eliminating all device-dependent edits, beginning in CY 2015, CMS proposes to require that facilities report a device code for procedures currently assigned to a device-dependent APC.
Under CMS’ proposal, the device claims edit would be met by reporting any medical device C code currently listed among the device edits for the CY 2014 device-dependent APCs, rather than reporting a particular device C code(s).
“It’s nice that CMS heard commenters’ concerns about the elimination of all device-to-procedure edits altogether and has instead proposed to retain some level of editing,” says Shah. “This is critical to ensure that the agency receives completely coded claims for future rate-setting.”
The rule includes four proposals to continue expanding packaging, a common theme for the OPPS in recent years.
“CMS continues full steam ahead with packaging, and has added an interesting twist to how it’s looking at packaging additional services, using a dollar threshold,” Shah says.
CMS proposes to package add-on codes assigned to device-dependent APCs (paid separately in CY 2014) starting in CY 2015, since these device-dependent add-on codes will be paid under the Comprehensive APC policy. These codes are listed in Table 9 of the proposed rule.
CMS also proposes to conditionally package ancillary services that have a geometric mean cost of less than or equal to $100 (with some exceptions, including preventive service, counseling/psychiatry, and drug administration services).
Additionally, CMS proposes to eliminate status indicator X (ancillary services). This means that all CPT® codes currently assigned to status indicator X will either be reassigned to status indicator Q1 (conditionally packaged) or S (significant procedure, not discounted).
If finalized, ancillary services with status indicator Q1 will not generate separate payment when provided on the same date of service as another separately payable procedure with a status indicator of S, T (significant procedure, multiple reduction applies), or V (clinic or ED visit), but will generate separate payment if provided on their own.
Providers will need to carefully examine the proposed changes and assess the financial impact of the proposed packaging changes, which will require an examination of claims rather than individual CPT codes or line items, Shah says.
Finally, CMS proposes to package and change the status indicator from A (services furnished to a hospital outpatient paid under a fee schedule or payment system other than OPPS) to N (items and services packaged into APC rates) for all DMEPOS prosthetic supplies.
CMS says this is consistent with the change it finalized for CY 2014 for all non-prosthetic DMEPOS supplies (with the status indicator changed from A to N). If this proposed change is finalized for CY 2015, then all medical and surgical supplies would be packaged in the OPPS.
Physician certification of inpatient services
CMS is proposing several changes to requirements related to inpatient physician certification, according to Baker.
Although CMS will continue to require a physician order for inpatient services, it will no longer require certification that the stay was medically necessary in most cases. CMS believes that in most cases the admission order, medical record, and progress notes contain sufficient information to support the medical necessity of an inpatient admission without a separate requirement of an additional, formal, physician certification, with two exceptions.
For stays of 20 days or longer and outlier cases, CMS believes physician certification is needed and therefore proposes to require formal physician certification beyond the admission order to substantiate the medical necessity for these cases.
CMS proposed no changes to E/M visit configuration or payment policy methodology in 2015, a year after CMS proposed replacing all E/M visit levels with three HCPCS Level II G-codes. CMS proposes to continue using the single visit G code and existing coding convention for Type A and Type B ED visits, though the agency says it plans on looking at different payment methodologies for the most costly ED trauma-type cases.
CMS proposed the packaging threshold to remain at $90, the same as CY 2014, and for the average sales price plus 6% remains in effect for all separately payable drugs, biologicals, and radiopharmaceuticals. CMS proposed no changes to packaging of diagnostic radiopharmaceuticals and contrast agents, or the payment methodology of therapeutic radiopharmaceuticals or brachytherapy for 2015.
To better understand the frequency and type of services furnished in provider-based departments in off-campus locations, CMS proposes a new data collection requirement that, if finalized, would impact both physician and hospital reporting, according to Shah.
Specifically, CMS is proposing to collect this information beginning January 1, 2015, by requiring the use of a new HCPCS modifier that would be reported with every code for physician and outpatient hospital services furnished in an off-campus provider-based department of a hospital.
The modifier would be reported on both the CMS-1500 claim form for physician services and the UB-04 form (CMS Form 1450) for hospital outpatient services. CMS is asking for additional public comment on whether the use of a modifier is the best mechanism for collecting this service-level data.
“If providers do not like or support this option, they need to comment now, because this is the second time CMS has asked for comments and alternatives,” Shah says. “If they are not provided, it seems very likely that CMS will finalize this.”
CMS will accept comments on the proposed rule until September 2, 2014, and will respond to comments in a final rule to be issued on or around November 1, 2014. The proposed rule will appear in the July 14 issue of the Federal Register.
Note from the instructor: CMS Releases Guidance on Modifier L1 and Clarifies Lab Payment for TOB 12X
A few weeks ago, CMS released the recurring OPPS update Transmittal 2971, as well as the recurring Integrated Outpatient Code Editor (I/OCE) specifications Transmittal 2957 for dates of service beginning July 1. In these transmittals, CMS officially announces the new modifier L1 for use by PPS hospitals when submitting claims for separate payment of outpatient lab tests that are paid under the Clinical Laboratory Fee Schedule (CLFS). In previous issues of the Medicare Insider, I wrote about the concerns surrounding billing for unrelated lab on Type of Bill (TOB) 14X and the lack of additional reimbursement for sole community hospitals (SCH).
As of January 1 date of service, hospitals have been reporting separately payable labs on TOB 14X which created confusion and controversy for facilities and the National Uniform Billing Committee (NUBC). Historically and by definition, TOB 14X was for non-patient (specimen only) lab services where the patient did not receive outpatient services on the same date of service. These types of labs were easy for hospitals to identify and systematically direct the claim to process under TOB 141X. In order to comply with the new billing guidance, hospitals have had to create back-end processes and, in some cases, separate review by staff to identify if the outpatient lab should be billed on TOB 14X to receive separate reimbursement under the “exceptions” guidance provided by CMS.
Transmittal 2971 announces that beginning July 1 date of service, separately payable labs should be billed on TOB 13X and with modifier L1. This guidance directs all hospitals to revert back to billing non-patient lab tests on TOB 14X which is consistent with the NUBC’s definition of this bill type—just when hospitals finally have their registration and billing staff re-trained one way.
According to Transmittal 2971, modifier L1 will be used with lab services only in either of these two circumstances:
- When the hospital collects the specimen and only provides lab services on that date of service; or,
- When the hospital provides outpatient lab services and they are clinically unrelated to other hospital outpatient services furnished on the same day.
In order to apply the second circumstance correctly, hospitals need to understand that “unrelated means the laboratory test is ordered by a different practitioner than the practitioner who ordered the other hospital outpatient services, for a different diagnosis.” If the definition is met, the lab test would be eligible to be reported with modifier L1 to trigger separate payment. If the definition is not met, modifier L1 would not be reported and the lab payment would be packaged into another separately payable service. PPS hospitals do not have to resubmit claims for lab tests that had previously been billed using TOB 14X prior to July 1 date of service.
But what about those SCHs that have not been receiving their add-on payment since January 1 for separately payable lab billed on TOB 14X? SCHs have to go back to MLN Matters Article SE1412 that was published March 5 for additional guidance as Transmittal 2971 does not provide this information.
MLN Matters Article SE1412 explains that TOB 14X does not trigger the differential payment rates (CLFS amount/0.6 X 0.62) for SCHs with qualified laboratories. Unfortunately, MACs will not reprocess claims for SCHs because the MACs have no way of knowing which labs should have been paid the add-on payment vs. which labs should have been paid as true non-patient labs. These providers may need to cancel or adjust claims that were submitted without the modifier L1 prior to July 1 and then submit a new TOB 13X with the appended modifier after July 1 in order to receive the corrected reimbursement.
Also in Transmittal 2971, CMS expounds and clarifies its current payment policy regarding the limited set of Part B inpatient services that a hospital may bill for when a beneficiary is either not eligible for or not entitled to Part A coverage or when a beneficiary has exhausted their Part A benefits. Included in that short list of services is lab service paid under the CLFS.
CMS clarifies that in these scenarios, lab testing is excluded from OPPS packaging rules if the primary service with which the lab would have been bundled into is not a payable Part B inpatient service. CMS has adjusted its claims processing logic to make separate payment for laboratory services paid under the CLFS that would otherwise be packaged under OPPS beginning in 2014.
For those hospitals that billed under TOB 12X and were denied payment for lab services, they have to read the fine print in the transmittal to identify the next step:
“Medicare contractors shall adjust 12X claims for beneficiaries who are either not entitled to Part A at all, or are entitled to Part A but have exhausted their Part A benefits where the laboratory services were packaged for 2014 dates of service that are brought to their attention.”
In other words, if hospitals want to collect their separate reimbursement for lab services that were denied on TOB 12X, they must take the initiative to rebill for those services. Hospitals should contact their MACs for additional guidance on how to appropriately resubmit claims to prevent further delays in payment.
In addition to guidance for new modifier L1, both of these transmittals have other details that facilities should review regarding brachytherapy services, new HCPCS codes for drugs and biologicals, and payment updates for specific HCPCS codes that facilities should consider rebilling for the appropriate reimbursement.
Note from the instructor: Devices and Anesthesiologist/CRNA Payments – Clarification of Two CMS Transmittals
This week’s note from the instructor is written by Debbie Mackaman, RHIA, CHCO, regulatory specialist for HCPro.
In the Medicare Claims Processing Transmittal 2903, April 2014 Update of the Hospital Outpatient Prospective Payment System (OPPS), CMS discusses the current policy regarding billing for certain devices that are received by facilities at no cost, full credit, or partial credit. As of January 1, 2014, the modifiers “FB” or “FC” that were previously used to identify these devices are no longer accepted by Medicare Administrative Contractors (MAC), and providers should now be reporting value code “FD” with the amount of the credit. This is not anything new, but I wanted to point out a percentage that was used in the transmittal that may be confusing to facilities.
In the transmittal, CMS states:
Also effective January 1, 2014, for claims with APCs that require implantable devices and have significant device offsets (greater than 40%), the amount of the device credit will be specified in the amount portion for value code “FD” (Credit Received from the Manufacturer for a Replaced Medical Device) and will be deducted from the APC payment from the applicable procedure. The OPPS payment deduction for the applicable APCs referenced above will be limited to the total amount of the device offset when the FD value code appears on a claim. The offset amounts for the above referenced APCs are available on the CMS Web site.
The “greater than 40%” referenced above is actually a threshold used to identify ambulatory payment classifications (APC) that will be affected by the policy. CMS uses this percentage to identify an APC where at least 40% of the payment rate is determined by the cost of the device itself. In theory, if the APC does not meet that device cost threshold, a facility would not have to report a credit regardless of the amount. A list of the affected APCs can be found in Table 30 of the 2014 OPPS Final Rule.
The actual reporting policy for facilities is still based on at least a 50% credit of the cost of the device. Specifically, page 75006 of the Federal Register states that hospitals are required to report the amount of the credit with value code ‘‘FD’’ (Credit Received from the Manufacturer for a Replaced Medical Device) when the hospital receives a credit for a replaced device listed in Table 31 that is 50% or greater than the cost of the device. Although MLN Matters article MM8653 somewhat clarifies the confusion that Transmittal 2903 created, hospitals will continue to use the 50% credit as their reporting threshold for complying with this CMS policy.
To further clarify the remainder of the device credit policy, the OPPS payment deduction for the APCs referenced above is limited to the total amount of the device “offset” when the FD value code appears on a claim. The offset amounts are available under the Annual Policy Files link on the on the CMS OPPS website and can help facilities identify the maximum amount by which the APC payment may be reduced.
In an unrelated transmittal, One Time Notification 1379, CMS published a clarification for certified registered nurse anesthetist (CRNA) and anesthesiologist payments made to a Method II Critical Access Hospital (CAH). For those readers that may not be familiar with this cost based reimbursement system, the following is a brief explanation.
- Anesthesiologists and CRNAs may reassign their billing rights to a CAH.
- The CAH may bill under Method II (optional method) by billing the facility outpatient service and the related professional fee on the same outpatient claim by reporting specific revenue codes.
- In most instances, this allows the CAH to receive reimbursement at 115% of what the Medicare Physician Fee Schedule (MPFS) would have paid the physician or CRNA if they had billed independently on the 1500 claim form.
- Under certain qualifying circumstances, a CAH can receive cost based reimbursement for its CRNA services rather be paid under the MPFS. This type of payment is called a pass-through payment.
On June 7, 2013 in previously released Transmittal 2719, CMS announced that effective January 1, 2013, qualifying CAHs and rural hospitals were eligible to receive pass-through payments for services that CRNAs are legally authorized to perform in the state in which the services are furnished (see amended 42 CFR 410.69(b)). The pass-through payments included those procedures outside of the anesthesia HCPCS codes (00100-01999) that were billed using revenue code 964 on the CAH’s outpatient claim (TOB 085X).
Although this information was first released in June 2013, CMS is now clarifying in One Time Notification Transmittal 1379 that the effective date for payment of CRNA service outside of the anesthesia code range is January 1, 2013, and includes payment made under pass-through and Method II reimbursement methodologies. Unfortunately, CAHs have to read the entire transmittal to understand that if they want the proper Method II reimbursement for procedures performed by CRNAs outside of the anesthesia code range, the CAH is responsible to resubmit claims to their MAC. CMS also instructs MACs to bypass timely filing so that facilities can rebill claims back to the January 1, 2013 date of service based on this more recent clarification. This transmittal goes on to announce that effective January 1, 2014, a Method II CAH can also receive reimbursement for anesthesiologist services identified by revenue code 963 on the CAH’s outpatient claim.
Unfortunately, in the current Medicare claims editing and processing systems, the only HCPCS codes 00100–01999 performed by an anesthesiologist (revenue code 963) or CRNA (revenue code 964) that can be reimbursed under Method II. The claims processing system will not be updated until October 6, 2014, as identified by the implementation date on this transmittal. Again, the CAH is responsible to resubmit claims to their MAC once this policy is implemented.
To prevent lost reimbursement, CAHs may want to consider reviewing claims data from January 1, 2013, to the current period that were billed with revenue code 964 and a HCPCS code outside of the anesthesiology code range. These claims may need to be resubmitted to receive proper Method II reimbursement and CAHs should consult their MACs for further guidance.
CAHs may also want to review claims data from January 1, 2014, to the current period that were billed with revenue code 963 and a HCPCS code outside of the anesthesiology code range. If the service was not paid appropriately under Method II reimbursement methodology, hold the claim and resubmit after October 6, 2014. For outpatient claims that have not been billed yet and for which the facility will report revenue code 963 with a HCPCS code outside of the anesthesiology code range, hold the claim and submit after October 6, 2014, keeping in mind that timely filing requirements must be met.
Note from the instructor: CMS reassigns packaged skin substitute products approved for payment in CY 2014 based upon updated payment information
This note from the instructor is written by Judith Kares, JD, regulatory specialist for HCPro.
One of the more complex aspects of coding, billing, and payment for covered drugs and biologicals relates to skin substitute products. Under the CY 2014 OPPS/ASC final rule (CY 2014 final rule), CMS is packaging most skin substitute products into the application procedures that utilize them. Per CMS policy, there is no separate payment for packaged items and services; the payment for packaged items and services is included in the payment for the separately payable procedures of which they are an integral part.
Special billing rules for packaged skin substitute products
For packaging purposes, CMS created two groups of application procedures: application procedures that use high-cost skin substitute products (billed using CPT codes 15271–15278) and application procedures that use low-cost skin substitute products (billed using HCPCS codes C5271–C5278).
In making its decision as to whether a skin substitute product will be assigned to the high cost or low cost group, CMS did a comparison of the July 2013 payment rate for the skin substitute product to $32, which is the weighted average payment per unit for all skin substitute products. In doing so, CMS used skin substitute utilization data from CY 2012 claims and the July 2013 payment rate for each product. For CY 2014, skin substitute products with a July 2013 payment rate that was more than $32 per square centimeter are packaged into the payment for the high-cost application procedures, and those with a July 2013 payment rate that was equal to or less than $32 per square centimeter are packaged into the low cost application procedures.
A listing of the respective high- and low-cost skin substitute products, as well as the high- and low-cost skin application procedures into which they will be packaged, is set out in the CY 2014 Final Rule, Tables 13 and 14 respectively. A few skin substitute products (e.g., skin substitute products that are applied as either liquids or powders per milliliter or per milligram and are currently employed in procedures outside of the CPT code range of 15271–15278) are not designated as either high or low cost. They should be billed with the applicable surgical procedures that use them rather than the skin application procedures noted above (that is, they should not be reported with CPT codes15271–15278 or HCPCS codes C5271–C5278). Payment for these skin substitutes will be packaged into payment for the related surgical procedures.
Reassignment of new CY 2014 skin substitute products
Under the CY 2014 final rule, CMS also finalized a policy that for any new packaged skin substitute products approved for payment during CY 2014, CMS will use the $32 per square centimeter threshold to determine mapping to the high- or low-cost skin substitute group, as soon as sufficient pricing information becomes available. Any new packaged skin substitute products without pricing information were assigned originally to the low-cost category. There were nine new packaged skin substitute products that were covered as of January 1, 2014, and that were assigned to the low-cost payment group because pricing information was not available for these products at the time of the January 2014 update.
As reported in CMS’ April quarterly OPPS update (Transmittal R2903CP), there is now pricing information available for three of these nine products. Table 7 below shows the three new products and their updated low/high cost status based on the comparison of the price per square centimeter for each product to the $32 square centimeter threshold for CY 2014.
Table 7—Updated Payment Rates for Certain HCPCS Codes Effective April 1, 2014
Low/High Cost Status
Repriza, Per Square Centimeter
Architect Extracellular Matrix, Per Square Centimeter
Neox 1k, Per Square Centimeter
Billing and payment for pass-through skin substitute products
Although most skin substitute products are packaged, for CY 2014 five skin substitute products have been granted pass-through status and are separately payable. Skin substitutes with pass-through status have a status indicator of “G,” as set out in Table 13. Pass-through skin substitutes should be reported with CPT codes 15271–15278. Payment for pass-through skin substitutes is subject to an offset based on the amount of packaged skin substitute that is already included in the payment for the related skin application procedure. During CY 2014, for those skin application procedures assigned to APC 0328, the offset amount is 56.77%, and for those skin application procedures assigned to APC 0329, the offset amount is 15.93%.
There are several practical implications for hospitals under these complex billing rules. First, for dates of service on and after January 1, the Integrated Outpatient Code Editor will return to provider (Edit 87) any claim with an appropriate skin application procedure that does not also include an appropriate skin substitute product. This applies to both packaged and pass-through skin substitute products. In order to receive payment for the skin application procedure (as well as any pass-through skin substitute product, if applicable), the hospital will need to add the appropriate skin substitute product to the claim.
Second, effective April 1, based upon the reassignment of two skin substitute products—Q4147 and Q4148—from the low to the high-cost group, hospitals will need to revise their billing policies to ensure that these skin substitute products are billed with the applicable skin application procedures. Hospitals will also need to keep an eye out for potential reassignment of the remaining six new skin application procedures so that appropriate changes in billing policy can be implemented.
This week’s note from the instructor is written by Debbie Mackaman, RHIA, CPCO, regulatory specialist for HCPro.
Last week, CMS released MLN Matters article MM8572 with billing instructions for laboratory services paid under either OPPS or the Clinical Laboratory Fee Schedule (CLFS). Prior to this guidance, I had received several questions from clients and past students regarding rural sole community hospital (SCH) add-on payments for lab services. Several weeks ago, I had requested clarification from CMS and the response that I received last week with the release of this article only generated more questions and I am waiting for further clarification.
According to the OPPS Final Rule (78 Fed. Reg. 74832), the 7.1% upward adjustment will continue to be paid for all services paid under OPPS, excluding separately payable items such as drugs, biologicals, and devices. Historically, rural SCHs also received an add-on payment for lab paid under the CLFS amount (fee schedule amount/0.6 X 0.62). As of January 1, 2014, the lab status indicator has been changed from “A” to “N” to indicate the lab is packaged into other separately payable services on the same claim, excluding molecular pathology. Upon further review of the rule, Table 55 (78 Fed. Reg. 75180-183) demonstrates how APC payments for SCHs were recalibrated to accommodate labs that are now packaged when billed on TOB 13X.
According to the CMS guidance, in calendar year 2014 the use of Type of Bill (TOB) 14X has been expanded to allow separate billing and payment at CLFS rates for hospital outpatient laboratory tests. Laboratory tests may be (or must be for a non-patient specimen) billed on TOB 14X in the following circumstances:
- For non-patient laboratory specimen tests when the beneficiary does not receive other hospital services on the same day and is not physically present at the hospital; or,
- When the hospital only provides outpatient laboratory tests to the patient and the patient does not also receive other hospital outpatient services during that same encounter; or,
- When the hospital provides a laboratory test during the same encounter as other hospital outpatient services that is clinically unrelated to the other hospital outpatient services and the laboratory test is ordered by a different practitioner than the one who ordered the other hospital outpatient services.
Unfortunately, when following this guidance using TOB 14X, the add-on payment is not triggered for SCHs. I have recently received confirmation from a hospital that they, in fact, did not receive the add-on payment for their outpatient lab services appropriately billed on TOB 141. The financial impact for rural SCHs is yet to be determined and will highly depend on the volume of “outpatient lab only” that had traditionally been billed on TOB 131 but are now required to be billed on TOB 141. One of the problems that SCHs may encounter is how to identify a non-patient lab from an outpatient lab when they are billed on the same bill type. SCHs should put a system into place now to track this issue if their volume warrants monitoring potential changes in revenue.
Note: Although the release date on the related Medicare Claims Processing Manual Transmittal 2845 is December 27, 2013, I did not see a notice that this was published until MM8572 was available on January 14, 2014. All PPS hospitals should review the transmittal for other outpatient billing instructions related to the major changes impacting them with dates of service January 1, 2014.
This week’s note from the instructor is written by Judith L. Kares, JD, regulatory specialist for HCPro.
Last week we discussed CMS’ movement from a largely fee-for-service outpatient hospital reimbursement methodology to a more prospectively determined outpatient prospective payment system (OPPS) payment methodology. Looking at the proposed calendar year (CY) 2014 OPPS/Ambulatory Surgery Center (ASC) rule, we spent most of our time focusing on CMS’ proposal to create comprehensive ambulatory payment classifications (APCs) for the 29 most costly device-dependent primary services. Under this proposal, CMS would make a single prospective payment based on the cost of all individually reported codes that represent the provision of one of these primary services and all adjunctive services provided to support the delivery of that primary service. This would result in a significant reduction in the number of individual separate payments for OPPS covered items and services.
We also noted CMS’ recommendation to significantly expand the number and type of OPPS covered items and services subject to “packaging.” When a covered item or service that is payable under the OPPS is packaged, the payment for that item or service is included in the payment for the related primary service of which it is an integral, supporting part. In the remainder of this week’s note, we will focus on the specific details of CMS’ proposed expansion of packaging for CY 2014. This expansion would also significantly reduce the number of individual separate payments for OPPS covered items and services.
Historical perspective on packaging
Since August 2000, the OPPS has been the primary payment methodology for most hospital outpatient services covered under Medicare Part B and certain inpatient hospital services that are not covered under Part A but are covered under Part B. Under the OPPS, as originally implemented, most covered services were separately payable based upon the HCPCS code that identified those services and the APC to which that HCPCS code was assigned.
From the beginning, certain dependent services that Medicare considered to be covered and payable under the OPPS were not separately payable. These items and services were referred to as “packaged.” As noted above, the payment for a packaged item or service is included in, or “packaged into,” the payment for the related primary service of which it is an integral part.
Initially, packaged items and services tended to be relatively low cost and were usually furnished in support of some other more significant independent service. Items and services that have been traditionally packaged include anesthesia, use of the operating/treatment/procedure room, drugs, devices, and observation. Effective January 1, 2008, CMS vastly expanded the number of packaged items and services to include many that are fairly expensive and that might be used independently, at least in some circumstances. The expanded list of packaged items and services includes diagnostic radiopharmaceuticals, contrast agents, guidance services, image processing services, intraoperative services, and imaging supervision and interpretation services.
Proposed CY 2014 packaging expansion
In the proposed CY 2014 OPPS/ASC rule, CMS has recommended packaging the following additional items and services:
- Drugs, biologicals, and radiopharmaceuticals that function as supplies when used in a diagnostic test or procedure
- Drugs and biologicals that function as supplies or devices when used in a surgical procedure
- Clinical diagnostic laboratory tests
- Procedures described by add-on codes
- Ancillary services (currently identified with status indicator ‘‘X’’)
- Diagnostic tests on the bypass list
- Device removal procedures
Let us look at each of these categories in more detail.
Drugs, biologicals, and radiopharmaceuticals that function as supplies when used in a diagnostic test or procedure
In its rationale for expanding packaging to include these items and services, CMS noted that it currently unconditionally packages the following six categories of drugs, biologicals, and radiopharmaceuticals (unless temporary pass-through status applies):
- Those with per day costs at or below the packaging threshold (for CY 2014, the proposed packaging threshold is $90 per day based on historical claims data from CY 2012)
- Diagnostic radiopharmaceuticals
- Contrast agents
- Anesthesia drugs
- Drugs used as supplies according to § 419.2(b)(4)
- Implantable biologicals
CMS noted that the same rationale that justifies packaging diagnostic radiopharmaceuticals and contrast agents that function as supplies when used in specific diagnostic tests or procedures should logically be expanded to package all drugs, biologicals, and radiopharmaceuticals that function as supplies in such circumstances. Thus, CMS proposes to unconditionally package all drugs, biologicals, and radiopharmaceuticals that function as a supply when used in a diagnostic test or procedure, except when the drug, biological, or radiopharmaceutical has pass-through status. For purposes of this proposed expansion, a diagnostic test or procedure is defined as any kind of test or procedure performed (i) to aid in the diagnosis, detection, monitoring, or evaluation of a disease or condition; or (ii) to determine which treatment option is optimal.
CMS mentioned two specific drugs that would be included in this expanded packaging category in addition to currently packaged diagnostic radiopharmaceuticals and contrast agents: stress agents and hexaminolevulinate hydrochloride (Cysview®). Stress agents are composed of a class of drugs that are used in certain diagnostic tests (primarily myocardial perfusion imaging) to evaluate certain aspects of cardiac function. Stress agents include those drugs currently identified by HCPCS codes J0152, J1245, J1250, and J2785. Cysview® (HCPCS code C9275) is an optical imaging agent indicated for use in the cystoscopic detection of non-muscle invasive papillary cancer of the bladder among patients suspected or known to have lesion(s) on the basis of a prior cystoscopy.
The drugs, biologicals, and radiopharmaceuticals within this packaging category that are identified by specific HCPCS codes are included in both Addendum B and Addendum P to the proposed CY 2014 OPPS/ASC rule, with a status indicator of “N.”
Drugs and biologicals that function as supplies or devices when used in a surgical procedure
Since the implementation of the OPPS, CMS has packaged virtually all medical devices (except for those subject to temporary pass-through status), medical and surgical supplies, and surgical dressings. For purposes of these packaging rules, supplies constitute a large category of items that are typically either for single patient use or have a shorter life span than equipment. Supplies include not only minor, inexpensive, or commodity-type items, but also a wide range of products used in the hospital outpatient setting, including certain implantable devices and biologicals. CMS has long considered these implantable devices and biologicals to be integral to the surgical implantation procedures using them, and, except for devices and biologicals subject to temporary pass-through status, CMS has packaged payment for them into the payment for the related surgical procedure of which they are an integral part.
As with the prior expansion category, CMS has moved from the specific to the general, proposing to unconditionally package all drugs and biologicals that function as supplies or devices when used in a surgical procedure.
In its discussion, CMS identified one specific class of drugs or biologicals that would fall within this category: skin substitutes. The term ‘‘skin substitutes’’ refers to a category of products that are most commonly used in outpatient settings for the treatment of diabetic foot ulcers and venous leg ulcers. These products do not actually function like human skin and are not a substitute for a skin graft. Instead, these products are various types of wound dressings that stimulate the host to regenerate lost tissue and replace the wound with functional skin. Skin substitutes are subject to regulation by the FDA as medical devices, human tissue, or cellular products and are applied to wounds during surgical procedures described by CPT codes 15271 through 15278. Some of these products have dual uses and can be used either as skin substitutes or implantable biologicals, depending on whether they are applied externally or internally.
The drugs and biologicals within this packaging category that are identified by specific HCPCS codes are included in both Addendum B and Addendum P to the proposed CY 2014 OPPS/ASC rule, with a status indicator of “N.”
Clinical diagnostic laboratory tests
Up to this point, clinical diagnostic laboratory tests have been paid under the clinical laboratory fee schedule (CLFS), rather than the OPPS. However, the secretary of HHS has broad discretion to determine which covered items and services are to be paid under the OPPS. In the interest of moving toward a more prospective OPPS, and after a careful review of how, why, and when laboratory tests are performed in the outpatient hospital setting, CMS has determined that the vast majority of such tests are integral, ancillary, supportive, dependent, or adjunctive to the primary services provided and should be packaged.
Therefore, except for molecular pathology tests, CMS is proposing to package laboratory tests when they are integral, ancillary, supportive, dependent, or adjunctive to a primary service or services provided in the hospital outpatient setting. This would be the case when they are provided on the same date of service as the primary service and are ordered by the same practitioner who ordered the primary service.
CMS would consider a laboratory test to be unrelated to a primary service and, thus, not part of this packaging policy, when the laboratory test is the only service provided on that date of service or when the laboratory test is provided on the same date of service but is ordered for a different purpose by a different practitioner from the one who ordered the primary service. The laboratory tests not included in this packaging proposal would continue to be paid separately at CLFS rates when billed on a 14X bill type. As noted above, CMS also proposed that molecular pathology tests described by CPT codes 81200 through 81383, 81400 through 81408, and 81479 should be exceptions from this packaging policy.
The HCPCS codes for the laboratory tests subject to this packaging category are included in both Addendum B and Addendum P to the proposed CY 2014 OPPS/ASC rule, with a status indicator of “N.”
Procedures described by add-on codes
Add-on codes describe procedures that are always performed in addition to a primary procedure. The example that CMS discussed is the procedure described by CPT code 11001 (debridement of extensive eczematous or infected skin; each additional 10% of the body surface, or part thereof), which is used for additional debridement beyond that described by the primary procedure code. Currently, add-on codes typically receive separate payment based on APC assignment and are assigned status indicator ‘‘T.’’
Because add-on codes represent an extension or continuation of a primary procedure, CMS argues that they are typically supportive, dependent, or adjunctive to that primary procedure and, consequently, their payment should be packaged into the payment for the primary procedure. Therefore, CMS is proposing to unconditionally package all procedures described by add-on codes in the OPPS.
The specific HCPCS codes for the add-on codes subject to this packaging category are included in both Addendum B and Addendum P to the proposed CY 2014 OPPS/ASC rule, with a status indicator of “N.”
Ancillary services (status indicator ‘‘X’’)
Under the OPPS, CMS currently pays separately for certain ancillary services that are assigned to status indicator ‘‘X,’’ defined as ‘‘ancillary services.’’ In most instances, these services, which include a number of minor diagnostic tests (e.g., x-rays, pathology laboratory tests) are actually performed ancillary to a primary service. However, in certain circumstances they may be performed independently.
Consistent with their desire to develop a more prospective OPPS and the packaging principles discussed above, CMS believes that these ancillary services, which are assigned status indicator ‘‘X,’’ should be packaged when they are performed with another primary service, but should continue to be separately paid when performed independently. Therefore, CMS is proposing to conditionally package all ancillary services (except for preventive services) that were previously assigned a status indicator of ‘‘X’’ and to assign to these services status indicator ‘‘Q1’’ instead (packaged when provided with a service assigned a status indicator of ‘‘S,’’ ‘‘T,’’ or ‘‘V’’). Status indicator ‘‘X’’ would be discontinued. For preventive services previously assigned to status indicator ‘‘X,’’ CMS is proposing to change their status indicator to ‘‘S’’ and to continue to pay for them separately.
The specific HCPCS codes for those ancillary services previously assigned a status indicator of “X” and subject to this expanded packaging category are included in both Addendum B and Addendum P to the proposed CY 2014 OPPS/ASC rule, with a status indicator of “Q1.”
Diagnostic tests on the bypass list
For a number of years, CMS has created a bypass list of separately paid services. The list is used to convert claims with multiple separately payable procedures, which are generally not used for rate-setting purposes, into claims with a single separately paid procedure that can be used for rate setting. Services on the bypass list have limited associated packaged costs so they can be bypassed when assigning packaged costs on a claim to a separately paid procedure on that same claim.
CMS noted that in the past and under the current proposal, they have packaged or recommended packaging a number of adjunctive diagnostic tests into the primary procedures of which they are an integral part. CMS argues that the diagnostic tests on the bypass list share many characteristics with these other conditionally or unconditionally packaged or proposed packaged categories of items and services. Examples include a barium swallow test (CPT code 74220) and a visual field examination (CPT code 92081). In many instances, these tests are integral, ancillary, supportive, dependent, or adjunctive to a primary service. However, in certain circumstances they may be performed independently.
Therefore, CMS is proposing to conditionally package these procedures (except for preventive services) when performed adjunctively and to continue to pay for them separately when performed independently. CMS is proposing the assignment of status indicator “Q1” for these codes. Some of the diagnostic tests on the bypass list are currently assigned to status indicator ‘‘X’’ and would be conditionally packaged under the proposed policy to conditionally package ancillary services currently assigned status indicator ‘‘X.’’ Thus, the only diagnostic codes on the bypass list affected by this proposal are currently assigned to status indicator ‘‘S.’’ Preventive services will continue to be paid separately.
The specific HCPCS codes for services on the bypass list that are subject to this expanded packaging category are included in both Addendum B and Addendum P to the proposed CY 2014 OPPS/ASC rule, with status indicator “Q1.”
Device removal procedures
Implantable devices frequently require removal or replacement due to a variety of factors such as wear, failure, recall, infection, etc. Since the beginning of the OPPS, most implantable devices (except for those subject to pass-through status) have been packaged as supplies, implantable prosthetics, or implantable DME into their associated procedures. Device removal is sometimes reported with a code that describes both removal and repair/replacement, or with a code that only describes removal. Although device removal procedures are frequently performed with procedures to repair or replace devices, device removal may occur without repair or replacement if the clinical indication for the device that was removed no longer exists.
When a separately coded device removal procedure is performed with a separately coded device repair or replacement procedure, CMS argues that the device removal procedure actually represents an integral part of an overall primary procedure that is removal plus repair or replacement of the device. Consistent with their desire to develop a more prospective OPPS and the packaging principles discussed above, CMS is proposing to conditionally package device removal codes when they are billed with other surgical procedures involving repair or replacement and to assign to these services a status indicator of ‘‘Q2’’ (packaged when provided with a service assigned a status indicator of ‘‘T’’).
The specific HCPCS codes for removal services that are subject to this expanded packaging category are included in both Addendum B and Addendum P to the proposed CY 2014 OPPS/ASC rule, with status indicator “Q2.”
Clarification regarding packaging of medical and surgical supplies
CMS provided one additional clarification regarding the packaging of medical and surgical supplies under the OPPS. Although such items are generally unconditionally packaged, prosthetic supplies are sometimes paid separately. Prosthetic devices are paid according to the DMEPOS fee schedule if paid separately. In a recent review, CMS discovered many supplies that should be paid under the OPPS as packaged items and services, but that are currently assigned to status indicator ‘‘A’’ and are being paid separately, according to the DMEPOS fee schedule.
For CY 2014, CMS is proposing to revise the status indicator for all supplies described by Level II HCPCS A-codes (except for prosthetic supplies) from status indicator ‘‘A’’ to ‘‘N,’’ so that these supplies are unconditionally packaged under the OPPS, as required by applicable regulations. The specific HCPCS codes for the supplies that are subject to this change are included in both Addendum B and Addendum P to the proposed CY 2014 OPPS/ASC rule, with status indicator “N.”
Correctly reporting packaged items and services and their related charges
Even though there is no separate payment for covered packaged items and services, hospitals are strongly encouraged to report them on the same claim as the more significant services of which they are an integral part, whether required by CMS to do so or not. They should be reported as separate line items, along with their related charges. This is to ensure that these charges are appropriately allocated so the payments for the separately payable services of which they are an integral part are calibrated to cover the cost of the related packaged items and services. With the increase in the number of packaged items and services, including very high cost drugs, biologicals, and devices, it has become even more important for hospitals to accurately and completely identify and report their respective costs.
In last week’s , Kimberly Hoy, JD, wrote about the newly published OPPS proposed rule. CMS is proposing sweeping changes that have the potential to rock the world of the prospective payment system hospitals. CMS may not have wanted the critical access hospitals (CAHs) to feel left out so they have included two major proposals that may also shake up the CAHs’ world, but in reality may have been expected.
- Non-enforcement instruction for the supervision of outpatient therapeutic services: In 2010, CMS announced that it would not enforce supervision requirements for CAHs because their flexible staff requirements under their licensure would prevent compliance with the regulations. Then in CY 2011, CMS expanded the non-enforcement to include small rural hospitals having 100 or fewer beds. However, in the CY 2013 OPPS final rule, CMS implied that the non-enforcement period would soon be coming to an end. Holding true to its word, CMS is proposing the expiration of this moratorium because it has provided hospitals with adequate opportunity to meet the required supervision levels for all hospital outpatient therapeutic services. CMS believes it has also given enough time for facilities to become familiar with the new independent review process established by the Hospital Outpatient Payment Panel who evaluates requests for revisions to levels of supervision – those services that may be furnished under general or personal supervision rather than direct or services to be designated as a nonsurgical extended duration therapeutic service.
- Implement therapy caps, exceptions process and manual medical review: The American Taxpayer Relief Act of 2012 implemented therapy caps and manual medical review for most outpatient therapy providers. CAHs were excluded from applying the caps to their services; however, the therapy services furnished by a CAH in 2013 are counted toward the therapy caps for services provided by other providers. In a Rural Health Open Door Forum call earlier this year, CMS hinted that CAHs would be included in the therapy caps in 2014 and it has now elaborated on this in the Medicare Physician Fee Schedule (MPFS) proposed rule. At this time, there would not be a change in the reimbursement under reasonable cost for the services provided by a CAH. This proposal would level the playing field for all outpatient therapy providers by implementing the caps and reviews for all outpatient therapy services, regardless of the site of service.
CAHs should review both of the proposed rules and submit comments to CMS about how the coming changes may impact their bottom line and ability to provide services to their rural communities. CAHs should also review the rules for other proposals that may have limited impact on their operations, such as conditions of payment for “incident to” outpatient services and EHR incentive payments to Method II CAHs.
How does your facility determine which services are directly related to the admission and fall into the three-day payment window?
On January 4th, CMS updated the three-day payment window section of the inpatient chapter of the Claims Processing Manual creating new logistical problems carrying significant compliance risks- let our experts review the new guidance and offer operational solutions and options to meet these challenges efficiently.
Following this 90-minute audio conference you will be able to:
- Explain the changes CMS made to the three-day payment window
- Evaluate operational solutions to incorporate the changes to the three-day payment window for observation, self-administered drugs, and non-covered inpatient admission
- Determine whether your facility should rebill services affected by CMS’ new guidance
Learn more about this webcast, which features Kimberly Anderwood Hoy, JD, CPC and Valerie A. Rinkle, MPA, by clicking here.
Editor’s note: Judith Kares, JD, CPC, regulatory specialist for HCPro, Inc., is the author of this week’s note from the instructor.
CMS issues recurring update notification highlighting important CY2013 OPPS changes
On Friday, CMS released its annual recurring update notification reflecting the claims processing-related changes implemented in the CY 2013 OPPS final rule. Hospitals and CAHs are encouraged to review the transmittal more thoroughly to assure that they are prepared to implement these changes for services provided on and after January 1, 2013.
Hospitals and CAHs are also encouraged to be on the lookout for a similar transmittal (which has not yet been released) designed to reflect benefit-related changes included in the CY 2013 OPPS final rule. CMS also noted that the January 2013 integrated outpatient code editor (I/OCE) and OPPS pricer will reflect the healthcare common procedure coding system (HCPCS), ambulatory payment classification (APC), HCPCS modifier, and revenue code additions, changes, and deletions identified in this transmittal.
CMS identified the following key changes for CY 2013:
- Changes to device, radiolabeled product and procedure edits for January 2013. The most current list of device edits can be found at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/ .Failure to pass these edits will result in the claim being returned to the provider.
- Intracoronary stent placement procedure codes. The deletion of two CPT codes (92980 and 92981) that describe the placement of non-drug-eluting intracoronary stents and two existing HCPCS G-codes that describe the placement of drug-eluting intracoronary stents, along with the creation of nine new HCPCS C-codes in order to maintain the existing OPPS policy of differentiating payment for intracoronary stent placement procedures involving non-drug‑eluting and drug-eluting stents for CY 2013.
- Outpatient payment for composite APC 8000. Modification of the intracardiac catheter ablation codes that may qualify a cardiac electrophysiologic evaluation and ablation service for composite payment under composite APC 8000 for services provided on and after 1/1/13. CMS’ action follows the AMA CPT editorial panel’s deletion of CPT codes 93651 and 93652 (intracardiac catheter ablation codes), effective 1/1/2013 and creation of new CPT codes 93653, 93654, and 93656, effective 1/1/2013.
- New ‘sometimes therapy’ services that may be paid as non-therapy services for hospital outpatients, Effective January 1, 2013 the addition of two HCPCS codes (G0456 and G0457) to the list of PT/SLP/OT “sometimes therapy” services that may be paid under certain circumstances to a facility under the OPPS. The limited set of sometimes therapy services are paid under the OPPS when they are not furnished as therapy, that is, when they are not furnished under a certified therapy plan of care.
- Coding changes for partial hospitalization psychiatric (PHP) services. Following the AMA’s CPT editorial panel deletion of 28 psychiatric CPT codes, including those related to PHP services, and replacing them with 12 new CPT codes (effective for services provided on and after 1/1/13), CMS’ implementation of corresponding changes to the PHP code set that is used for billing and documenting PHP services.
- Certain changes to drugs, biologicals, and radiopharmaceuticals:
- Effective for services provided on and after 1/1/13, the creation of several new HCPCS codes to identify those drugs, etc. for which no specific code had previously been created. The new codes are set out in Table 1 of Attachment A to the transmittal;
- Effective for services provided on and after 1/1/13, changes to the HCPCS/CPT or long descriptor, or both, of certain drugs, etc. These changes are set out in Table 2 of Attachment A to the transmittal. Hospitals are once again admonished to pay close attention to accurate billing for units of service consistent with the dosages contained in the long descriptors of the active CY 2013 HCPCS and CPT codes;
- For CY 2013, payment for nonpass-through drugs, biologicals and therapeutic radiopharmaceuticals is made at a single rate of ASP + 6%, which provides payment for both the acquisition and pharmacy overhead costs associated with the drug, biological or therapeutic radiopharmaceutical. In CY 2013, a single payment of ASP + 6% will also be made (providing payment for both associated acquisition and pharmacy overhead costs for these pass-through drugs, biologicals and radiopharmaceuticals);
- Any changes in the payment rates effective for services provided on and after 1/1/13, based on sales price submissions from the third quarter of CY 2012, will be incorporated into the January 2013 release of the OPPS Pricer.
- CY 2013 OPPS payment adjustment for certain cancer hospitals. CMS’ updating of the “target payment to cost ratio (PCR)” for CY 2013, for purposes of the cancer hospital payment adjustment, to 0.91 for outpatient services furnished on or after January 1, 2013 through December 31, 2013. Under the Affordable Care Act (ACA), beginning in CY 2012, CMS is to provide additional payments to each of the 11 cancer hospitals so that each cancer hospital’s final payment to cost ratio (PCR) for services provided in a given calendar year is equal to the weighted average PCR (which CMS refers to as the “target PCR”) for other hospitals paid under the OPPS.
- Changes to OPPS pricer logic:
- Rural sole community hospitals (SCHs) and essential access community hospitals (EACHs) will continue to receive a 7.1% payment increase for most services (excluding drugs, biologicals, items and services paid at charges reduced to cost, and items paid under the pass-through payment policy) in CY 2013;
- New OPPS payment rates and copayment amounts will be effective January 1, 2013. All copayment amounts will be limited to a maximum of 40% of the APC payment rate. Copayment amounts for each individual service cannot exceed the CY 2013 inpatient deductible;
- For hospital outlier payments under OPPS, there will be no change in the multiple threshold of 1.75, which will continue to apply for 2013;
- In addition, for hospital outlier payments under the OPPS, there will be no change in the fixed-dollar threshold of $2,025, which will continue to apply for CY 2013. The estimated cost of a service must be greater than the APC payment amount plus $2,025 in order to qualify for outlier payments;
- For outliers for community mental health centers (bill type 76x), there will be no change in the multiple threshold of 3.4, which will continue to apply for 2013;
- Effective January 1, 2013, 3 devices are eligible for pass-through payment (pass-through payment generally equals charges reduced to cost, sometimes subject to an offset amount) in the OPPS Pricer logic. Category C1830 (Powered bone marrow biopsy needle), has an offset amount of $0, because CMS is not able to identify portions of the APC payment amounts for the related procedure that were associated with the cost of a predecessor device. Category C1840 (Lens, intraocular (implantable)) and C1886 (Catheter, extravascular tissue ablation, any modality (insertable)) have offset amounts included in the Pricer for CY 2013, because CMS was able to identify portions of the APC payment amounts for the related procedures that were associated with the cost of certain predecessor devices. Pass-through offset amounts are adjusted annually;
- Effective January 1, 2013, there will be one diagnostic radiopharmaceutical receiving pass-through payment in the OPPS Pricer logic. For APCs containing nuclear medicine procedures, Pricer will reduce the amount of the pass-through diagnostic radiopharmaceutical payment by the wage-adjusted offset for the APC with the highest offset amount when the radiopharmaceutical with pass-through appears on a claim with a nuclear procedure. The offset will cease to apply when the diagnostic radiopharmaceutical expires from pass-through status. The offset amounts for diagnostic radiopharmaceuticals are the “policy-packaged” portions of the CY 2013 APC payments for nuclear medicine procedures and may be found on the CMS website;
- Effective January 1, 2013, the OPPS Pricer will continue to apply a reduced update ratio of 0.980 to the payment and copayment for hospitals that fail to meet their hospital outpatient quality data reporting requirements or that fails to meet CMS validation edits. The reduced payment amount will be used to calculate outlier payments, if any;
- Pricer will continue to update the payment rates for drugs, biologicals, therapeutic radiopharmaceuticals, and diagnostic radiopharmaceuticals with pass-through status when those payment rates are based on ASP, on a quarterly basis.
Again, hospitals and CAHs are encouraged to review this transmittal closely to assure that they are prepared to comply with these changes effective for applicable services provided on and after 1/1/13.
Right on cue, CMS released the 2013 OPPS Final Rule on November 1 and then followed up with the MPFS Final Rule. In a breaking news story, HCPro summarized the changes – the good, the bad and the ugly – that will impact hospitals across the country. I wanted to take this time to review several changes that will impact two high volume departments in the hospital outpatient setting – therapy services and laboratory.
Many laboratory departments have been struggling with the complexity and the number of CPT codes for molecular pathology – now at 115 codes in two different tiers – and how to implement the new codes, even though CMS had allowed hospitals to bill the “stacked codes” instead for 2012. That will all change with dates of service on January 1, 2013 when the stacked codes will be invalid and the CPT codes for the actual molecular pathology services will need to be reported and will be paid under the clinical Laboratory Fee Schedule (CLFS).
In 2012 when these codes first came into play, CMS stated they were not valid of payment and hospitals should still report combinations of “regular” CPT codes for payment that described various steps to perform a specific test – referred to as stacking because different groups of codes are billed depending on the components of the actual test. CMS also clarified in a Hospital Open Door Forum call that hospitals should also report the new molecular pathology codes with the stacked codes so that CMS could use that information for setting rates for implementation in 2013.
Hospitals need to begin now to get ready to implement the new codes as this has the potential to be a major project. This includes updating chargemasters, order entry and charge tickets so there will not be a delay in billing and reimbursement. Physicians, laboratory staff and coders may want to review the AMA CPT Assistant May 2012 and June 2012 for guidance on how to select the appropriate code. Keep in mind that hospitals will be responsible for creating their own pricing based on their current methodology and the CLFS as there is not a one-to-one crosswalk from the current CPT codes over to the molecular pathology codes.
Another major change for hospitals will be reporting functional limitation indicators and outcomes for outpatient rehabilitation therapy. This information will be found in the MPFS Final Rule and not under OPPS because therapy services are paid under the MPFS.
The MCTRJCA, the same Act that implemented the therapy caps and manual medical review for hospital outpatient services from October through December 2012, also required a claims-based data collection process to help reform the Medicare payment system. Of concern to Congress and CMS is that between 1998–2008, Medicare expenditures for outpatient therapy services increased at a rate of 10.1% per year while the number of Medicare beneficiaries receiving therapy services only increased by 2.9% per year. Beginning on page 221 of the display copy of the MPFS Final Rule, a thorough explanation is provided regarding what data CMS will be looking for under the five-year CMS project titled “Development of Outpatient Therapy Payment Alternatives” (DOTPA).
In summary, because current ICD-9 diagnosis codes cannot provide the data needed, specific G-codes will be used to identify what type of functional limitation is being reported and whether the report is on the current status, projected goal status or discharge status. Modifiers will also be used to indicate the severity/complexity of the functional limitation being tracked. The difference between the reported functional status at the start of therapy and projected goal status will represent any progress the therapist anticipates the beneficiary would make during the course of treatment. This reporting will apply to all therapy claims, including those for services above the therapy caps and those that include the -KX modifier.
Again, this will be a major undertaking to update the charge master, order entry systems and charge tickets with new G-codes for services that occur on January 1, 2013. Although this is not a change in the current reimbursement structure and hospitals will be given a six-month testing period to implement no later than July 1, 2013, therapists and billers, as well as other involved in coding and billing of therapy services should become familiar with the new data reporting requirement prior to January 1.