HIM 151 Chapter 7 AMBULATORY AND OTHER MEDICARE-MEDICAID REIMBURSEMENT SYSTEMS

Each APC contains components including:

1. Payment Status Indicator 2. Relative Weight 3. National Unadjusted Payment Amount 4. National Unadjusted Copayment Amount 5. Minimum Copayment Amount 6. Code Range *See Figure 7.11 on page 159

CYU 7.2.4 Why did OPPS establish the cancer hospital adjsutment?

CMS added an adjustment for the 11 IPPS-exempt ADCC facilities because their costs are significantly higher than other outpatient facilities. The additional payment is based on the difference between the cancer facilities payment to cost ratio and the established overall payment to cost ratio. The payment to cost ration is updated each year.

Numerous types of providers under RBRVS:

* Physicians * Audiologists * Chiropractors * Clinical Social Workers * Optometrists * Podiatrists * Psychologists * Nurse Midwives * Nurse Practitioners * Nutritionists * Physician Assistants * Physical and Occupational Therapists * Speech-language pathologists

Cost sharing for professional services include:

* annual deductibles * coinsurance for medical and health services * co-payments for prescription drugs

Services of physicians to Medicare beneficiaries that are covered under Part B Medicare include:

* office visits * diagnostic and surgical procedures * other therapies

Excluded from OPPS (because different reimbursement systems are used for these types of facilities or areas) are:

- Maryland hospital services that are part of a cost containment waiver - CAHs (Critical Access Hospitals) - hospitals outside the 50 states, District of Columbia, and Puerto Rico - Indian Health Service

Hospital outpatient services include:

- clinic - emergency department - ambulatory surgery unit: same day surgery units attached to a hospital (have access to inpatient and ICU care), Not free-standing ambulatory surgery centers (ASCs)

Two PE components:

1- Facility (hospital) 2- Nonfaciity (physician office) *Table 7.1 on page 142

Two types of Outlier calculations:

1- one for CMHCs (Community Mental Health Centers) partial hospitalization services. 2- one for all the other facilities and services

3 Types of C-APCs:

1. All-inclusive APC 2. J1 3. J2

OPPS Provisions/Reasons why payments are adjusted:

1) Discounting 2) Interrupted Services 3) High-cost Outlier 4) Rural Hospital Adjustment 5) Cancer Hospital Adjustment 6) Pass-through Payment Policy 7) Transitional Outpatient Payments and Hold Harmless Payment

Three Reimbursement Methodologies for Hospital Outpatient Services:

1) Fee Schedule 2) Prospective payment/Case Rate, Partially Packaged payment 3) Reasonable Cost payment

Payments to physicians are based on 3 components:

1) a Relative Value Unit (RVU) 2) its geographic adjustment/Geographic Practice Cost Index (GPCI) 3) a Conversion Factor (CF)

Examples of Modifiers:

1. Bilateral Procedures 2. Multiple Procedures 3. Physicians assisting in surgery

Partially Packaged System

1. Encourages hospitals to create incentive to provide efficient care and manage resources with flexibility 2. Incentivize hospitals to choose the most cost-efficient option when a variety of devices, drugs, items and supplies could be utilized 3. Encourage hospitals to effectively negotiate with manufactures and suppliers to reduce purchase price for supplies and items 4. Influence hospitals to establish protocols to ensure the necessary services are provided, but scrutinized practitioner orders to maximize the efficient use of hospital resources

Key operational issues are:

1. Processes to ensure full and accurate reimbursement 2. Reduce unnecessary administrative costs

The reformed fee systems and PPS across the continuum of care for Medicare beneficiaries include:

1. Resource-Based Relative Value scale (RBRVS) for physician services 2. Ambulance Fee Schedule 3. Hospital Outpatient Payment System 4. Ambulatory Surgical Center (ASC) payment system 5. End-stage Renal Disease payment system 6. Safety-net Provider Payments 7. Hospice Services Payment System

3 Types of Participating and Nonparticipating physicians

1: PAR physician 2: Non-PAR physician accepting assignment 3: Non-PAR physician non-accepting assignment *Table 7.4 on page 145

Two types of non-PAR providers:

1= providers who accept assignment 2= providers who do not accept assignment

@3) Comprehensive APC Payment (C-APCs)

= SIs J1 and J2 = are all-inclusive APC categories where a primary procedure is identified for the encounter and then most other procedures, services, and supplies are packaged into this amount. = services that are packaged are adjunctive, integral, ancillary, supportive, and/or dependent services that are provided to support the primary services. = See examples on page 161 second paragraph on the left and Figure 7.12 = for some encounter there will be more than one C-APC, however, THERE CAN ONLY BE ONE PRIMARY SERVICE FOR THE ENCOUNTER. = there is one caveat to C-APCs. Some combinations of procedures are costlier than others. Therefore, CMS developed the C-APC complexity adjustment. The complexity adjustment allows for a higher payment when established criteria are met.

CYU 7.1.5 Nurse practitioners that provide services to beneficiaries and whose work is not incident to physician supervision are reimbursed at what percentage of the MPFS?

85%

OPPS Conversion Factor

= CMS maintain OPPS = as mandated by the BBRA, CMS must perform an annual review of the APC groups an relative weights. = the wage index amounts adjusted for the current IPPS must also be incorporated into OPPS each year.

3) Reasonable Cost payment

= Examples: acquisition of corneal tissue, hepatitis B vaccine

4) Rural Hospital Adjustment

= Medical Modernization Act of 2003 , allowed for a rural adjustment to be applied if warranted after study. They get a 7.1% increase in payment.

II. Special Circumstances

= Medicare can adjust payments for special circumstances using MODIFIERS.

Payment Status Indicators (SI)

= OPPS requires that facilities use HCPCS codes to report services/procedures performed and items/supplies provided for beneficiaries. = each code in HCPCS has been assigned this. = is a code that establishes how a service, procedure, or item is paid in OPPS. = interpreting this is the foundation of determining OPPS reimbursement. = are assigned to all HCPCS codes. = released each year in Addendum B of the OPPS final rule = updated quarterly = multiple HCPCS codes are reported per encounter, therefore, there are multiple SI per encounter = See Table 7.14 on page 158

1- Facility (hospital)

= ORGANIZATIONS incurs the overhead costs of personnel, supplies, and equipment, among other costs.

2- Nonfacility (physician office)

= PHYSICIAN incurs the overhead costs of personnel, supplies, and equipment, among other costs.

@2) Per Diem APC Payment

= SI P

@8) Reasonable Cost Payment

= SIs F, H, and L = is calculated by multiplying the charge (fee) for the service times the cost-to-charge ratio (CCR)

1) Discounting

= has the SI T = involves multiple surgical procedures performed during the same operative session that are discounted = a reimbursement policy where the highest-weighted procedure is fully reimbursed and all other procedures with payment SI T are reimbursed 50%. This reduction is made to account for resource saving that hospitals experience by performing multiple procedures together. = SI T procedures are discounted when multiple procedures are performed during the same encounter = 1st procedure = 100% All others = 50% See figure 7.14 in text

@9) Services Not Reimbursed under OPPS

= Several supplies, services and procedures not reimbursed under OPPS -SI, B, C, D, E1, E2, M and Y = SI C - Inpatient Only Procedures (IPO) = is created by the CMS - Because CPT contains both inpatient and outpatient procedures, CMS uses SI C to identify all procedures that are not allowed for the outpatient setting for Medicare beneficiaries = all procedure in the IPO list are assigned SI C = there are services that are statutorily excluded from the benefit package, procedures that are not reasonable or necessary, and services that are not appropriate for the outpatient setting. = to move off the IPO list, a procedure must be performed in outpatient settings at least 60% of the time. = to be reimbursed, procedures with SI C must be provided to Medicare beneficiaries in an inpatient setting, and payment is made under the IPPS.

@6) Packaged Payment

= To identify procedures, services, and supplies that have been packaged into the cost and reimbursement for APC services with which they are most often performed, SI N is assigned. = these items are always packaged. = it is important to note that these services are are covered under OPPS, but a separate payment is not provided for the individual service or supply. = Services, procedures and supplies that are always packaged have SI N

2) its geographic adjustment/Geographic Practice Cost Index (GPCI)

= adjustment for geographic difference in cost = this is used for each of the three elements to adjust to local costs = each RVU category has a corresponding GPCI = based on "locality" or payment areas = this is necessary because costs vary in different ares of the country = to reflect local costs, CMS defines about 90 payment areas, known as localities. = through this component of RBRVS/payment for physicians, each element of an RVU is adjusted for the geographic cost differences.

Second Step in APC assignment is

= after all HCPCs codes have been assigned, the is identified for each code.

@4) Conditional APC Payment

= are assigned SIs Q1, Q2, and Q4 = these services are conditionally packaged only when certain criteria are met.

@5) Composite APC Payment

= are created by bundling individual components of a larger service into one payment group. = are formed by grouping services that are always performed together into a single payment. = currently there are 8 composite APCs included in OPPS. = See Table 7.15 on page 162 = Bundle together individual components of larger services into one payment = see Example 7.5 on page 162 = see Table 7.16 on page 162

6) Pass-through Payment Policy

= are exceptions to the Medicare PPS = these exceptions exist for high-cost supplies. = are not included in the packaging component of PPS and are passed through to other payment mechanisms that attempt to adjust for the high cost of items. = minimizes the negative financial effect of combining all services into one lump-sum payment. = occurs in both IPPS and OPPS. = established by the BBRA to provide hospitals with additional payment for high-cost drugs, biological agents, and devices. This specification was added to ensure the use of new and innovative drugs and supplies for Medicare beneficiaries when medically appropriate. = Exception to Medicare PPS High cost supplies Excluded from packaging under OPPS = Pass-through drugs and biologicals (SI G) Paid via APC based on Average Sale Price (ASP) = Pass-through devices (SI H) Paid via reasonable cost

Sole-community hospitals (SCHs)

= are hospitals that, by reason of factors such as isolated location, weather conditions, travel conditions, or absence of other hospitals, is the sole source of patient hospital services reasonably available to Medicare beneficiaries in a geographic area. = this status is determined by the Secretary of the Department of Health and Human Services. = rovided for Sole Community Hospitals (including EACH) 7.1% increase (Essential Access Community Hospitals) = SCH - Hospitals that, by reason of factors such as isolated location, weather conditions, travel conditions or absence of other hospitals is the sole source of patient hospital services reasonably available to individuals in a geographic area

Drugs and Biologicals pass-through APCs (SI G)

= are reimbursed by using an average sale price (ASP) methodology = the ASP is equivalent to the dollar amount at which these drugs and biological agents would be reimbursed in the physician office setting.

@7) Fee Schedule Payment

= are reimbursements for services such as ambulance transportation, physical therapy, and mammography. = Services paid under a CMS fee schedule have SI A: > Physical therapy is paid under the MPFS > Ambulance fee schedule

2) Interrupted Services

= are reported with modifiers = when modifiers are applied to the surgical codes, a reduction in payment may be applied. = Modifier 73, surgery discontinued for a patient who has been prepared for surgery and taken to the operating room but before the administration of anesthesia 50% payment rate = Modifier 74, surgery discontinued after administration of anesthesia or initiation of the procedure 100% payment rate = Modifier 52, Reduced or discontinued at physician's discretion 50% payment rate

"Incident to"

= are services that nonphysician clinicians such as a nurse of physician assistant, provides to patients in a physician's office under the physician's supervision.

US Health Resources and Services Administration (HRSA)

= designates certain geographic areas as health professional shortage areas (HPSAs)

*Outpatient Code Editor (OCE)

= edits the claims based off of billing requirements = performs the packaging and bundling logic of OPPS = a way to edit claim based on coding requirements

1) Fee Schedule system

= establishes a separate payment amount for each item or service and no packaging occurs = ambulance, physical therapy, durable medical equipment

The "two-times rule"

= establishes that the median cost of the most expensive item or service within a group cannot be more than two times greater than the median cost of the least expensive item or service within the same group.

One exception to the process of APC assignment

= for partial hospitalization services, the ICD-10CM diagnosis code assignment is crucial.

1. Bilateral Procedures

= in this example of modifier, Medicare will pay the lower of (a) the total actual charge for both sides or (b) 150% of the MPFS amount for the single code = lesser of actual charge or 150% of MPFS amount

C) Nonphysician providers (NPPs)

= involve clinicians that are not medical doctors such as psychologists, nurse practitioners, and physician's assistant = they generally receive 85% of the HCPCS/full MPFS amount/payment = they may only submit claims for reimbursement when their services are neither "incident to", nor under the direct supervision of a physician. = if the services are "incident to" or under the direct supervision of a physician, Medicare pays the full MPFS amount to the physician.

Operational Issues

= involve coding and documentation issues surrounding unnecessary administrative costs. = many offices are solo or two-person practices = close management of operations essential

Assignment of Benefits

= is a contract between a physician and Medicare in which the physician agrees to bill Medicare directly for covered services, to bill the beneficiary only for any coinsurance or deductible that may be applicable, and to accept the Medicare payment as payment in full. Medicare pays the physician directly rather than sending the check to the Medicare beneficiary.

Resource-Based Relative Value Scale (RBRVS)

= is a system of classifying health services based on the cost of furnishing physician services in different settings, the skills and training levels required to perform the services, and the time and risk involved. = it is the federal government's payment system for physicians and other designated health professionals. = is for physician payment for EITHER inpatient or outpatient services = reimbursement for professional services in numerous settings such as: o Physician Offices o Ambulatory Surgical Centers o Hospitals, Inpatient and Outpatient o Skilled Nursing Facilities

3) a Conversion Factor (CF)

= is an across-the-board multiplier that is used in the RBRVS calculation = it is a dollar amount set by CMS = unlike the GCPIs, this is a constant that applies to the entire RVU. = it transforms the geographic-adjusted RVU into a Medicare physician (provider) fee schedule (MPFS) payment amount. = it is the government's most direct control on Medicare payments to physicians and other professionals. = CMS raises or lowers the CF to raise or lower physician and professional payments. = it is set prior to the start of the RATE YEAR (Calendar year) and remains constant throughout the year. = CY 2018 -> $35.9996

Partial Hospitalization Program (PHP)

= is an intensive outpatient program of psychiatric services provided as an alternative to inpatient psychiatric care to patients who have an acute mental illness. = partial hospitalization may be provided by hospital outpatient departments and Medicare certified community mental health centers (CMHC). = the unit of service for partial hospitalization is ONE DAY. = Examples: APC 5853, partial hospitalization (3 or more services) for CMHCs ($143.31) APC 5863, partial hospitalization (3 or more services) for hospital based PHPs ($208.23)

1) Relative Value Unit (RVU)

= is assigned to each HCPCS code = is a unit of measure designed to permit comparison of the amounts of resources required to perform various provider services by assigning weights to such factors as personnel time, level of skill, and sophistication of equipment required to render service. = a measure of resource utilization

CFS update amount

= is based on the same market-basket percentage amount that is applied to the IPPS standardized amount.

OPPS Payment

= is primarily based on the APCs assigned for each service or procedure performed and for devices, drugs, and reimbursable items provided to the patient. = To determine the payment amount for an OPPS claim, all APCs must be assigned to the claim (REMEMBER, THERE CAN BE MULTIPLE APCs PER CLAIM)

c. Q4

= is the conditionally packaged laboratory tests. = Lab tests are packaged if billed on the same claim as SIs, J1, J2, S, T, V, Q1, Q2, or Q3. = Lab services are packaged most of the time in OPPS. However, if the laboratory service is present on a claim without one of the designated SIs, then the service is SI A and is reimbursed via the Medicare Clinical Lab Fee Schedule (CLFS) = Packaged if on a claim with J1, J2, S, T, V Q1, Q2 or Q3 (aka almost always)

C. Professional Liability Insurance (PLI) or Malpractice insurance (MP)

= is the cost of insurance premiums = is the cost of the premiums for malpractice (MP) or professional liability insurance(PLI) = CMS bases the MP element of the RVU on the premiums for malpractice insurance. = CMS collects data from both commercial and physician owned malpractice insurance carriers from all 50 states, the District of Columbia, and Puerto Rico to set the MP RVUs.

MPFS (Medicare physician (provider) fee schedule)

= is the maximum amount of reimbursement that Medicare will allow for a service. = the rates for this is adjusted for nonparticipating providers

B. Physician/Professional Practice Expense (PE)

= is the overhead costs of the practice = CMS conducts a survey entitled the Socioeconomic Monitoring System (SMS) to obtain data to calculate the overhead costs of a practice. = is categorized as either facility or nonfacility = is generally higher for nonfacilities than for facilities because physicians in nonfacilities incur more costs. Some procedural codes do not have separate facility and nonfacility PEs.

Device Offset Amount

= is the portion of the payment amount that CMS has determined is associated with the cost of the device.

National Unadjusted Payment Amount

= is the product of the conversion factor multiplied by the relative weight, unadjusted for geographic differences. = is the total reimbursement amount = CMS portion plus beneficiary copayment portion

A. Physician work (WORK)

= is the time required and intensity of procedure = 51% of the total RVU weight = is the element that covers the physician's salary = is the time the physician spends providing a service and the intensity with which that time is spent

Targe PCR

= is the weighted average PCR for all other hospitals that furnish services under OPPS (noncancer hospitals) = For the CY 2018, the target PCR is 0.88

B) Anesthesiologists

= they get paid separate = they don't get paid like the other physicians = they have a unique payment system = a lot of their payment is based on time (time of the anesthesia being given) = their payment is based on anesthesia time and intervals and conversion factors as well.

Ambulatory Payment Classification (APC)

= most ambulatory services under OPPS are paid via this system = this system combines procedures or services that are clinically comparable, with respect to resource use, into groups. = all procedures and/or services assigned to this group must meet the "two-times rule". = is a partially packaged system = services or items such as recovery room, anesthesia, and some pharmaceuticals, are packaged or bundled into a single payment. = DRG for outpatient side = classification system that groups together like procedures with like resource consumption = grouped based on procedure = DIAGNOSIS DOES NOT PLAY A ROLE IN GROUPING = Based on PROCEDURE = Based on CPT code

Bundling

= occurs when payment for multiple significant procedures or multiple units of the same procedure or service related to an outpatient encounter or to an episode of care is combined into a single unit of payment. = takes a predetermined set of services that, when performed together during an encounter, result in the reimbursement for all services being combined into one payment amount. = Examples: critical care services, imaging, and mental health services. = see Example 7.2 on page 157

Packaging

= occurs when reimbursement for minor ancillary services associated with a significant procedure are combined into a single payment for the procedure. = is extensive in OPPS = ancillary and supportive services are packaged with significant, surgical, and evaluation procedures. = when this occurs, the reimbursement for the ancillary and supportive services is automatically combined into the significant procedure, surgical service, or evaluation APC payment rate. = see Example 7.1 on page 156

2) Prospective payment/Case Rate, Partially Packaged payment

= packaging and bundling concepts are used in OPPS to combine payment for multiple services. = by using packaging and bundling concepts, CMS is providing incentives for healthcare facilities to improve their efficiency by avoiding unnecessary ancillary services, supplies, and pharmaceuticals, and by substituting less expensive, but equally effective, options. = a partially packaged system was created to provide adequate reimbursement and to allow the treatment flexibility that is needed to appropriately care for patients in the outpatient setting.

1: PAR (Participating physicians)

= participate in Medicare = have signed a contract with Medicare to accept an ASSIGNMENT OF BENEFITS. = they get 100% of the Medicare reimbursement

MAC

= performs an audit of the claim to ensure the claim contains complete and accurate information based on the edits found in the OCE.

A) Participating and Nonparticipating physicians

= physicians may participate in Medicare (participating physicians [PAR]) or they can opt out of participation (nonparticipating physicians [non-PAR]) *Table 7.4 on page 145

non-PAR (nonparticipating physicians)

= physicians who do not participate in Medicare

Modifiers

= provide more information about the service and the alterations, so Medicare and other payers can process the claim.

Medicare Payment Advisory Commission (MedPAC)

= provides an annual assessment of all Medicare prospective payment systems to Congress. = they review the PPS for access to care and reimbursement adequacy issues.

Localities

= reflect differences in the cost of resources. = can be large metropolitan areas such as Boston and San Francisco, portions of states (rest-of-state areas), or entire states. = the GCPI for these places is based on relative variations in the cost of a MARKET BASKET of goods across different geographic areas.

Market-basket

= reflects the input price inflation encountered by facilities for providing goods and services to patients.

5) Cancer Hospital Adjustment

= the Affordable Care Act of 2010 provides for an adjustment to dedicated cancer hospitals to address the higher costs incurred by this type of facility. = the adjustment if FACILITY SPECIFIC 11 IPPS-Exempt facilities [Alliance of Dedicated Cancer Centers (ADCC)] = Facility-specific adjustment to help cancer hospitals who have higher payment to cost ratios than the average facility See table 7.18 in text

7) Transitional Outpatient Payments (TOPS) and Hold Harmless Payment

= the BBRA provided a mechanism for hospitals to decrease the financial burden of the implementation of OPPS. = •Hold Harmless -Additional payment for IPPS-exempt cancer centers (ADCC) -Additional payment for Children's hospitals •These facilities need additional financial help because they do not provide a full complement of services like most outpatient facilities -Fewer profitable departments

Hospital Outpatient Prospective Payment System

= the Balance Budget Act of 1997 set dates for the implementation of a prospective payment system in the hospital outpatient setting. = CMS implemented the outpatient prospective payment sytem (OPPS) on August 1, 2000. = Effective period is January 1 to December 31 (Calendar Year [CY]) = UPDATED YEARLY

b. Q2 or T-packaged codes

= the concept is similar to to the STV-packaged codes, but only SI T affects whether the ancillary service is separately paid or not. = See Example 7.4 on page 162 = If a Q2 services is on a claim with a T services, then the Q2 service is packaged

@1) APC Payment

= there are 7 SIs in the APC Payment category. They represent services or procedures that are reimbursed by prospective payment methodology through the APCs.

I. Clinician Types

= there are three types of clinicians that have potential adjustments.

Health Professional Shortage Areas (HPSAs)

= these areas have shortage of providers in medical care, dental care, or mental health, or some combination of these.

2: Non-PAR physician accepting assignment

= they accept what Medicare gives to them = they only receive 95% of the full Medicare payment

3: Non-PAR physician non-accepting assignment

= they don't accept assignment = can get up to 115% of the amount of the Medicare payment but they cannot bill Medicare = the payment from Medicare goes directly to the patient and the patient will give however much they want to bill

3) High-cost Outlier

= this provision is intended to provide financial assistance for unusually high-cost services. = this provision is based on the cost of individual services rather than the entire encounter. Therefore, there may be multiple outlier calculations per claim. = Unusually high-cost services - Based on the cost of individual services rather than the cost for the entire encounter - May be multiple outlier calculations per claim = When cost exceeds 1.75 times the APC payment AND cost exceeds the APC payment plus a fixed dollar threshold and outlier add-on payment is made Add-on payment = 50% of the cost that exceeds 1.75 times the APC payment

III. Additional Geographic Considerations/Undeserved Areas

= through the RBRVS payment system, CMS provides an incentive for physicians to render services in undeserved areas. = the purpose of the incentive is to attract physicians to these areas = CMS makes bonus payments to physicians who render medical care services in undeserved areas = another way of revising payment = providers receive 10% increase in payment = the address where the service was provided is used for this provision

Impact of Unnecessary Administrative Costs

= time spent on administrative details is adding unnecessary costs to the US healthcare delivery system = IOM (Institute of Medicine) report estimated that excess administrative costs totaled $190 billion in 2009. These costs were related to extra paperwork, insurers' administrative inefficiencies, and inefficiencies arising form required care documentation of care. = one example of administrative waste is time spent managing multiple health plans = administrative cost rate of about 20% for private insurers (Medicare is about 2%) = see studies between US and Canada on page 148 .

The First step in APC assignment is

= to code the encounter accurately and completely.

APC(Ambulatory Payment Classification) Advisory Panel

= was established by the Balanced Budget Refinement Act of 1999 (BBRA) = is comprised of 15 healthcare industry experts who review the payment system, healthcare community issues, and industry requests.

New Technology APCs

= were created to allow new procedures and services to enter OPPS quickly, even though their complete cost and payment information is not know.

a. Q1 or STV-packaged items

= when an ancillary service with payment SI Q1 is reported on the same encounter as a service with an SI of S, T, or V, then the ancillary service is packaged. = If the ancillary service is performed without any service with an SI of S, T, of V, then the payment is provided for the ancillary service. = see Figure 13 on page 161 = If a Q1 service is on a claim with a S, T or V service, then the Q1 service is packaged

2. Multiple Procedures

= when multiple procedures are performed on the same day, Medicare reimburses the physician for the first procedure at 100%; subsequent procedures through the fifth procedure are reimbursed at 50% (sixth and more require review)

3. Physicians assisting in surgery

= when physicians assist in surgery, they are reimbursed at 16% of the MPFS amount for the primary surgeon

Currently there are 8 composite APCs included in OPPS

> APC 5041 Critical care > APC 5045 Trauma response with critical care > APC 8004 Ultrasound > APC 8005 CT and CTA without Contrast > APC 8006 CT and CTA with Contrast > APC 8007 MRI and MRA without Contrast > APC 8008 MRI and MRA with Contrast > APC 8010 Mental Health Services

There are nine SI categories currently used in the OPPS:

@1) APC Payment @2) Per Diem APC Payment @3) Comprehensive APC Payment @4) Conditional APC Payment @5) Composite APC Payment @6) Packaged Payment @7) Fee Schedule Payment @8) Reasonable Cost Payment @9) Services Not Reimbursed under OPPS

3 Types of Clinicians/Providers for whom the RBRVS payment system adjusts:

A) Participating and Nonparticipating physicians B) Anesthesiologists C) Nonphysician providers (NPPs)

***RVU Categories/ 3 Elements of the RVU/What makes up an RVU (for a particular procedure or service)

A. Physician work (WORK) B. Physician Practice Expense (PE) C. Professional Liability Insurance (PLI) or Malpractice (MP)

Reasonable Cost Payment SI "F"

Acquisition of corneal tissue, Certified registered nurse anesthetist services Hepatitis B vaccine

CYU 7.1.3 In the RBRVS, what is the term for the across-the-board multiplier that transforms the geographically adjusted RVU into an MPFS payment amount?

Conversion Factor

CYU 7.1.1 What is the name of the researcher who developed a system of classifying healthcare services using resource-based relative values? With which university is this researcher associated?

Dr. William Hsaio of Harvard University

7 SIs in the APC Payment Category

G - pass-through drugs and biologicals K - Non-pass-through drugs and nonimplantable biologicals R - Blood and blood products S - Significant procedures; no multiple reduction T - Surgical procedures; multiple reduction applies U - Brachytherapy services V - Clinic and emergency department visits *See Example 7.3

CYU 7.1.4 What does GCPI stand for?

Geographic Practice Cost Index

Reasons why reimbursements under the RBRVS may be adjusted / Potential Adjustments:

I.Clinician Type II. Special Circumstances III. Additional Geographic Considerations/Undeserved Areas

Reasonable Cost Payment SI "L"

Influenza immunization, Pneumococcal immunization, , No cost-sharing

CYU 7.2.1 Define packaging and bundling as it pertains to OPPS.

Packaging occurs when reimbursements for minor ancillary services associated with a significant procedure are combined into a single payment for the procedure. Bundling occurs when payment for multiple significant procedures or multiple units of the same procedure related to an outpatient encounter or episode of care is combined into a single unit of payment.

The services of physicians to Medicare beneficiaries are covered under

Part B Medicare

Reasonable Cost Payment SI "H"

Pass-through device categories, No cost- sharing

CYU 7.2.3 What type of procedures are assigned to SI C? How are these procedures reimbursed for Medicare beneficiaries?

Payment status indicator C is assigned to inpatient-only procedures. Inpatient-only procedures must be performed in the hospital inpatient setting for Medicare to reimburse the facility. Failure to perform the service in the inpatient setting will result in a loss of reimbursement for the procedure and its associated components and services.

Fee Schedule

RBRVS uses this type of reimbursement methodology

January 1, 1992

The RBRVS became effective on this date

Dr. William Hsaio of Harvard University

devised a system of classifying heath services using resource-based relative values in 1985, under a grant from the Centers for Medicare and Medicaid Services (CMS)

CYU 7.2.5 Why did CMS establish new technology APCs?

To support access for Medicare beneficiaries to receive new and innovative drugs, biologicals and devices.

True or False: *Each HCPCS code is assigned to one and only one APC group, and that group is assigned a SI.

True

True or False: Any OPPS services and supplies that do not have an HCPCS code are packaged.

True

True or False: Both incorrect coding and low-quality documentation negatively affect RBRVS reimbursement.

True

True or False: Each CPT code or HCPCS code is assigned an APC.

True

True or False: Eligibility for the the undeserved area bonuses depends on the location where the service is rendered. The service must be rendered in an HPSA. Eligibility is NOT based on the address of the beneficiary or the address of the physician's office.

True

True or False: For covered services, the Medicare beneficiary is responsible for an annual deductible and a 20% coinsurance amount for each service.

True

True or False: For inpatients, there is only 1 DRG, For outpatients, there can be infinite numbers of APCs

True

True or False: It is crucial that physician practices are familiar with services that cannot be performed for Medicare in the nonfacility setting.

True

True or False: Medicare beneficiaries pay premiums and have cost sharing for professional services.

True

True or False: RBRVS is based on the Healthcare Common Procedure Coding System (HCPCS), including Current Procedural Terminology (CPT)

True

True or False: Fee schedule amounts are exempt from many of the OPPS adjustments and provisions.

True

True or False: While the fees are predetermined, the RBRVS is not a prospective payment system. A physician can increase reimbursements by increasing the volume of services provided to a patient.

True

True or False: One GCPI for each RVU category

True *Figure 7.2 on page 143

True or False: It is imperative that HIM professionals employ monitoring and auditing practices to ensure proper coding.

True *See Tables 7.6, 7.7, and 7.8 on pages 147 and 148

CYU 7.1.2 In the RBRVS, which element comprises the largest portion of the total RVU?

Work

The SMS includes 6 categories of PE costs:

a) CLINICAL PAYROLL= for nonphysician clinical personnel such as physician assistants, and nurse practitioners. b) ADMINISTRATIVE PAYROLL = for nonphysician administrative personnel such as administrators, secretaries, and clerks. c) OFFICE EXPENSES = for rent, mortgage interest, depreciation on medical buildings, utilities, telephones, and other related costs. d) MEDICAL MATERIAL AND SUPPLY EXPENSES = for drugs, x-ray films, disposable medical products, and other related costs. e) MEDICAL EQUIPMENT EXPENSES = including depreciation, leases, and rentals for medical equipment used in the diagnosis or treatment of patients. f) ALL OTHER EXPENSES such as legal services, accounting, office management, professional association memberships, and any professional expenses

3 Types of Conditionally packaged services

a. Q1 or STV-packaged items b. Q2 or T-packaged codes c. Q4

4 aspects of intensities in the WORK (physician work) category of RVU are:

a. mental effort and judgement b. technical skill c. physical effort d. psychological stress

Omnibus Budget Reconciliation Acts (OBRA) of 1989 and 1990

are the acts where the Congress authorized the implementation of the RBRVS

CYU 7.2.2 Match the SI to CI category: a. Q3 1. APC payment b. K 2. C-APC c. J1 3. Composite APC payment d. Q4 4. Conditional APC payment

b c a d

The Congress authorized the Department of Health and Human Services (HHS) to...

develop and implement reformed fee systems and PPS across the continuum of care for Medicare beneficiaries.

Relative Weight

is a measure of the resource intensity of a procedure or service

Relative Value Scale

permits comparisons of the resources needed or appropriate prices for various units of service. It considers labor, skill, supplies, equipment, space, and other costs for each procedure or service.

CMS is responsible for

the policy and maintenance of OPPS.

2. J1

•Comprehensive APC •I refer to this SI as the King of SIs •Almost all other services are packaged including other J1 and J2 procedures

1. All Inclusive APC

•Primary procedure •Most other procedures, services and supplies are packaged into the C-APC •See figure 7.12

3. J2

•Services may be paid through a comprehensive APC •Packaged if billed on the same claim as a J1