2014 OPPS Final Rule: Learn What Sweeping Changes CMS Finalized

Transcription

1 2014 OPPS Final Rule: Learn What Sweeping Changes CMS Finalized An HCPro audio conference presented on December 18, 2013 Copyright Information Copyright 2014 HCPro, a division of BLR. The 2014 OPPS Final Rule: Learn What Sweeping Changes CMS Finalized materials package is published by HCPro, a division of BLR. Attendance at the webcast is restricted to employees, consultants, and members of the medical staff of the Licensee. The webcast materials are intended solely for use in conjunction with the associated HCPro webcast. The Licensee may make copies of these materials for internal use by attendees of the webcast only. All such copies must bear the following legend: Dissemination of any information in these materials or the webcast to any party other than the Licensee or its employees is strictly prohibited. In our materials, we strive to provide our audience with useful and timely information. The live webcast will follow the enclosed agenda. Occasionally, our speakers will refer to the enclosed materials. We have noticed that non HCPro webcast materials often follow the speakers presentations bullet by bullet and page by page. However, because our presentations are less rigid and rely more on speaker interaction, we do not include each speaker s entire presentation. The enclosed materials contain helpful resources, forms, crosswalks, policies, charts, and graphs. We hope that you will find this information useful in the future. Although every precaution has been taken in the preparation of these materials, the publisher and speaker assume no responsibility for errors or omissions, or for damages resulting from the use of the information contained herein. Advice given is general, and attendees and readers of the materials should consult professional counsel for specific legal, ethical, or clinical questions. HCPro, a division of BLR, is not affiliated in any way with The Joint Commission, which owns the JCAHO and Joint Commission trademarks; the Accreditation Council for Graduate Medical Education, which owns the ACGME trademark; or the Accreditation Association for Ambulatory Health Care (AAAHC). For more information, please contact us at: 75 Sylvan Street, Suite A 101, Danvers, MA Phone: Fax: customerservice@hcpro.com Website: 2

2 Presented By: Jugna Shah, MPH, is the president and founder of Nimitt Consulting, Inc., a firm specializing in case mix payment system design, development, and implementation. She has extensive experience helping providers understand and address the ongoing clinical, operational, and financial implications of Medicare s outpatient prospective payment system based on APCs. She has educated and audited hospitals on their drug administration coding and billing practices. She has contributed to several books and numerous OPPS/APC articles over the past 12 years. She is also a contributing editor to HCPro's Briefings on APCs. 3 Presented By: Valerie A. Rinkle, MPA, is associate director within the healthcare practice at Navigant Consulting. She has 30 years of healthcare experience, including 10 years as revenue cycle director for Asante Health System in Medford, Ore., and over a decade of nationwide consulting to health systems and practices regarding Medicare and Medicaid payment systems and compliance. She is the author of numerous articles on OPPS and hospital based clinics. 4

3 Agenda Section 1: Annual OPPS Updates Section 2: Significant CY 2014 Policy & Payment Changes Section 3: Other Related Items Section 4: Summary & Q/A 5 CY 2014 OPPS Final Rule Files Medicare and Medicaid Programs: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs; Hospital Value Based Purchasing Program; Organ Procurement Organizations; Quality Improvement Organizations; Electronic Health Records (EHR) Incentive Program; Provider Reimbursement Determinations and Appeals Download the APC/OPPS Final Rule: CMS 1601 FC pdf CMS Fact Sheet on HOPPS: Sheets/2013 Fact Sheets Items/ html Federal Register version available on Dec 10th Comments due 60 days from the FR publication date Comments limited to new codes & their APC assignments 6

4 Section 1: Routine Annual OPPS Updates and System Recalibration Conversion factors and protected hospitals Outlier payment policy Review of status indicators APC system recalibration and reclassification 7 Overall System Update APC payments to increase by a 1.7% (market basket increase less certain factors). CMS projects to spend more on OPPS in CY 2014 due to the inclusion of costs currently payable under other payment systems, such as the clinical laboratory fee schedule (CLFS) and the Durable Medical Equipment Prosthetic Orthotic Schedule (DMEPOS). Beneficiaries can expect to see changes in their copayments in CY 2014 due to a number of the policies CMS has finalized. In the aggregate, beneficiary copayments are 21.7%. Providers will need to carefully assess financial impact given CMS has finalized some of its major proposals related to E/M clinic visits and expanded packaging. Don t forget about sequestration, which results in a 2% reduction in payment. The payment reduction is applied after determining coinsurance, any applicable deductible, and any applicable Medicare Secondary Payment adjustments. 8

5 Conversion Factors and Protected Hospitals 2013 national conversion will increase by 1.7% (market basket increase of 2.5% minus 0.5% for productivity and minus 0.3% due to Affordable Care Act provisions). $ * for hospitals that meet quality reporting requirements $ * for hospitals failing to meet quality reporting requirements Children s hospitals and cancer centers have a permanent hold harmless protection and CMS will continue a payment adjustment so that cancer centers OPPS payment to cost ratio (PCR) is equivalent to the average PCR of all other OPPS hospitals; PCR of 0.89 finalized for CY Rural SCHs and EACHs will continue to receive a 7.1% payment adjustment for OPPS services, excluding separately payable drugs, biologicals, and devices paid under the pass through payment policy, and items paid at cost. CMS may evaluate this in the future. * This does not reflect the 2% reduction due to sequestration still in effect. 9 Outlier Policy 2013 Outlier Payment Policy 2014 Final Outlier Payment Policy Line item level for all separately payable APCs except separately payable drugs, biologicals, radiopharmaceuticals, brachytherapy sources, and cost paid items Outlier pool = 1% of total OPPS payments; and 0.12% of outlier pool for CMHC for partial hospitalizations Two threshold model Multiplier threshold set at 1.75 The fixed dollar threshold = $2,025 CMS pays hospitals 50% of the difference when both thresholds are met CMHCs subject to a different formula with a multiplier threshold of 3.4 applied to APC 173; and no fixed dollar threshold Outlier payment reconciliation at cost report settlement No change Outlier pool still 1% of total OPPS payments; but 0.16% of the outlier pool for CMHC for partial hospitalizations Two threshold model No change to the multiplier threshold Fixed dollar threshold = $2,900 No change No change No change 10

6 Reclassification of HCPCS/CPT Codes and APC System Recalibration Reclassification and recalibration of HCPCS/CPT codes, APCs, and status indicators Annual updates required. CMS applies the 2 times rule, which means items/services within an APC group are reviewed to determine comparability of resource use; if the geometric mean cost of the highest cost item/service in an APC group is 2x greater than the lowest cost item/service within the group, then CMS may reconfigure the APC by moving codes in/out of the group or create new APCs. Low volume codes are excluded. New/deleted/modified HCPCS/CPT codes also impact APC group configurations. Changes in packaging status and/or other status indicators results in impact. Providers should review the codes in Addendum B with comment indicator CH as well as all of the codes in Addendum P to better understand CMS changes for CY Addendum B & OPPS Status Indicators Status indicators (SI) are assigned to each CPT/HCPCS code and tell us something about how the service is paid Services paid under OPPS (SI = G, H, K, N, P, Q, R, S*, T*, U, V & X) Services paid under another payment system (SI = A, C, F, L & Y) Services not recognized under OPPS but may be recognized by other institutional providers or there may be a better HCPCS code (SI = B) Services not payable by Medicare (SI = M, E) Services/CPT codes deleted (SI = D) J1 = new status indicator for comprehensive APCs beginning CY 2015 * The word significant has been removed from the description of these status indicators in 2014 Remember: Changes in status indicators can result in APC payment changes from one year to the next. 12

7 Review of Packaging & Status Indicators Unconditionally packaged status N ALWAYS packaged services no separate payment Conditionally packaged status Q Sometimes packaged services services OFTEN packaged, but also separately payable in certain circumstances Q1 ( STVX packaged codes) Q2 ( T packaged codes) Q3 (codes that may be paid through a composite APC) CMS continues to remind providers that they NEED to report ALL services regardless of whether they are always or sometimes separately payable. In other words, just because a service is packaged doesn t mean providers should stop reporting it! 13 Reminder About Comment Indicators CH: Active HCPCS codes in current and next calendar year; status indicator and/or APC assignment changes that need to be studied 2727 HCPCS/CPT codes flagged as CH NI: Indicator used by CMS also in the Addendum B Excel file to highlight new codes which may or may not have an interim APC assigned to them 398 HCPCS/CPT codes designated as NI CMS accepting comments until mid January 2014 Important to utilize for CPT/HCPCS Updates Tip: Filter Addendum B by comment indicator CH and by NI to help isolate codes with major changes and those open for comment. 14

8 Reassignment/Recalibration: Examples of Deleted CPT/HCPCS Codes Status indicator D = deleted codes though deleted, there may be replacements! October 2013 Addendum B January 2014 Addendum B HCPCS Payment Code Short Descriptor SI APC Rate Short Descriptor CI SI APC Payment Rate $ Change in Pmt Rate 0124T Conjunctival drug placement T 0232 $ Conjunctival drug placement CH D $0.00 ($144.79) 0183T Wound ultrasound T 0013 $71.54 Wound ultrasound CH D $0.00 ($71.54) 0186T Suprachoroidal drug delivery T 0237 $1, Suprachoroidal drug delivery CH D $0.00 ($1,442.12) 0192T Insert ant segment drain ext T 0673 $2, Insert ant segment drain ext CH D $0.00 ($2,977.93) Cmplx rpr e/n/e/l 1.0 cm/< T 0135 $ Cmplx rpr e/n/e/l 1.0 cm/< CH D $0.00 ($393.38) Bx breast percut w/image T 0005 $ Bx breast percut w/image CH D $0.00 ($625.24) Bx breast percut w/device T 0037 $1, Bx breast percut w/device CH D $0.00 ($1,118.54) Place needle wire breast Q $49.64 Place needle wire breast CH D $0.00 ($49.64) Place breast clip percut Q $49.64 Place breast clip percut CH D $0.00 ($49.64) Remove shoulder foreign body T 0022 $1, Remove shoulder foreign body CH D $0.00 ($1,661.08) Drain percut lung lesion T 0070 $ Drain percut lung lesion CH D $0.00 ($412.39) Transcatheter occlusion T 0082 $7, Transcatheter occlusion CH D $0.00 ($7,671.18) Transcath iv stent percut T 0229 $8, Transcath iv stent percut CH D $0.00 ($8,656.82) Transcath iv stent/perc addl T 0229 $8, Transcath iv stent/perc addl CH D $0.00 ($8,656.82) Transcath iv stent open T 0229 $8, Transcath iv stent open CH D $0.00 ($8,656.82) Transcath iv stent/open addl T 0229 $8, Transcath iv stent/open addl CH D $0.00 ($8,656.82) Embolization uterine fibroid T 0229 $8, Embolization uterine fibroid CH D $0.00 ($8,656.82) Biopsy of throat T 0253 $1, Biopsy of throat CH D $0.00 ($1,147.39) Esophagus endoscopy T 0384 $2, Esophagus endoscopy CH D $0.00 ($2,117.02) Esoph endoscopy ablation T 0422 $1, Esoph endoscopy ablation CH D $0.00 ($1,867.35) Uppr gi endoscopy w/stent T 0384 $2, Uppr gi endoscopy w/stent CH D $0.00 ($2,117.02) Operative upper GI endoscopy T 0419 $ Operative upper gi endoscopy CH D $0.00 ($926.78) 15 Reassignment/Recalibration: Examples of New CPT/HCPCS Codes Several new category III codes and new procedure CPT codes. Please review and add to the Charge Description Master. October 2013 Addendum B HCPCS Code Short Descriptor SI APC January 2014 Addendum B Payment Rate Short Descriptor CI SI APC Payment Rate 0335T $0.00 Extraosseous joint stblztion NI T 0062 $2, T $0.00 Lap ablat uterine fibroids NI T 0174 $8, T $0.00 Endothel fxnassmnt non invani S 0097 $ T $0.00 Trnscth renal symp denrv unl NI S 0279 $2, T $0.00 Trnscth renal symp denrv bil NI S 0279 $2, T $0.00 Ablate pulm tumors + extnsn NI T 0423 $4, T $0.00 Thxp apheresis w/hdl delip NI S 0112 $3, $0.00 Guide cathet fluid drainage NI T 0006 $ $0.00 Bx breast 1st lesion strtctc NI T 0005 $ $0.00 Bx breast 1st lesion us imag NI T 0005 $ $0.00 Bx breast 1st lesion mr imag NI T 0005 $ $0.00 Remove shoulder fb deep NI T 0020 $ $0.00 Shoulder prosthesis removal NI T 0022 $1, $0.00 Open/perq place stent 1st NI T 0229 $9, $0.00 Open/perq place stent ea addni T 0083 $4, $0.00 Open/perq place stent same NI T 0229 $9, $0.00 Open/perq place stent ea addni T 0083 $4, $0.00 Vasc embolize/occlude venouni T 0082 $8, $0.00 Vasc embolize/occlude arteryni T 0082 $8, $0.00 Vasc embolize/occlude organ NI T 0082 $8, $0.00 Vasc embolize/occlude bleedni T 0082 $8,

9 Section 2: Significant 2014 Changes Use of new cost centers to calculate relative weights Collapsing E/M clinic visit codes and payment Packaging expansion and its implications 29 Comprehensive APCs Examining overall financial impact complicated! 17 Use of New Cost Centers to Calculate APC Relative Weights Implemented in 2013, CMS will continue to use CCRs from the implantable device cost center (2,936 hospitals reported the implantable device cost center) CMS will use new cost centers for MRI, CT, and cardiac catheterization to calculate APC relative weights for 2014 CMS has data from the following number of hospitals: 1,853 hospitals for MRI (53% use direct assignment or dollar value) 1,956 hospitals for CT (54% use direct assignment or dollar value) 1,367 hospitals for cardiac catheterization Commenters raised significant concerns regarding CT & MRI because of inaccurate cost report allocation based on square footage CMS adjusted CT & MRI CCRs to exclude square footage hospitals applicable for 4 years to give these hospitals time to change their allocation methodology Significant impacts to certain APCs is depicted in Table 3 and Table 4 and shows the uptick in CT & MRI CCRs by excluding square footage hospitals 18

10 Significant Changes to Imaging APC Payment Rates APC APC Description 2013 APC Rate Table 3 % Change due to CCRs as Proposed 2014 APC Rate % Change adj CCR & all other policies $ Change in APC Rate 0282 Miscellaneous Computed Axial Tomography $ % $ % $ Computed Tomography with Contrast $ % $ % $ CT and CTA without Contrast Composite $ % $ % $ Combined Abdomen and Pelvis CT without Contrast $ % $ % $ CT and CTA with Contrast Composite $ % $ % $ Combined Abdomen and Pelvis CT with Contrast $ % $ % $ Computed Tomography with Contrast $ % $ % $ CT Angiography $ % $ % $ Computed Tomography without Contrast followed by Contrast $ % $ % $ Cardiac Computed Tomographic Imaging $ % $ % $ Magnetic Resonance Imaging and Magnetic Resonance Angiography without Contrast $ % $ % $ MRI and MRA with Contrast Composite $1, % $ % $ MRI and MRA without Contrast Composite $ % $ % $85.55 Magnetic Resonance Imaging and Magnetic 0337 Resonance Angiography without Contrast $ % $ % $56.55 Magnetic Resonance Imaging and Magnetic 0284 Resonance $ % $ % $ Diagnostic Cardiac Catheterization $2, % $2, % $ Significant Changes to Imaging APC Payment Rates (cont.) APC APC Description 2013 APC Rate Table 3 % Change due to CCRs as Proposed 2014 APC Rate % Change adj CCR & all other policies $ Change in APC Rate 0276 Level I Digestive Radiology $ % $ % $ Level II Pulmonary Imaging $ % $ % $ Bone Imaging $ % $ % $ Level I Endocrine Imaging $ % $ % $ GI Tract Imaging $ % $ % $ Level II Nervous System Imaging $ % $ % $ Level I Cardiac Imaging $ % $ % $ Plain Film of Teeth $ % $ % $ Level II Cardiac Imaging $ % $1, % $ Level III Diagnostic and Screening Ultrasound $ % $ % $ Level I Tumor/Infection Imaging $ % $ % $ Level I Nervous System Imaging $ % $ % $ Level II Diagnostic and Screening Ultrasound $ % $ % $ Level I Diagnostic and Screening Ultrasound $ % $ % $ Ultrasound Composite $ % $ % $

11 What Allocation Method Does Your Hospital Use? CMS responded to commenters that hospitals should review their cost reports and their allocation method for major moveable equipment (MME) Ensure the recommended methods of direct assignment or dollar value for Worksheet A, Column 2 for Capital Related Costs Movable Equipment are used If not, request approval from your MAC 90 days in advance of making the appropriate changes In the final rule, CMS states, We believe that, by adopting more refined CCRs, we are fostering more careful cost reporting 21 APC Reconfiguration of Hospital E/M Visit and ED Codes CMS proposed to replace the current five levels of visit codes for each visit type (i.e., Type A ED, Type B ED, & new and established clinic visits) with three HCPCS codes representing a single level of payment for each of the three visit types, respectively CMS ONLY finalized the collapsing of E/M codes for the clinic visit APCs For CY 2014, HCPCS code G0463 replaces CPT codes & and is assigned to APC 0634 The payment rate for this new clinic visit APC is based on the mean costs of Level 1 through Level 5 visit codes from CY 2012 OPPS claims data and is $92.53 CMS did NOT finalize a similar collapse of Type A and Type B ED codes; all 5 levels of existing CPT and HCPCS G codes should be reported for 2014, but this may change in CY

12 Payment Impact for E/M Clinic and ED Visit Codes Visit Type Clinic Visit Type A ED Visit CY 2013 Final for CY 2014 Potential Payment HCPCS APC Payment HCPCS Dollar APC Payment Code Code Impact % Change $56.77 $92.53 $ % $73.68 $92.53 $ % $96.96 $92.53 ($4.43) (4.6%) $ $92.53 ($35.95) (28.0%) $ $92.53 ($83.26) (47.4%) G $56.77 $92.53 $ % $73.68 $92.53 $ % $73.68 $92.53 $ % $96.96 $92.53 ($4.43) (4.6%) $ $92.53 ($35.95) (28.0%) $ $55.65 $ % $ $ $ % $ $ $ % $ $ $ % $ $ $ % Type B ED Visit G $ $51.92 ($15.86) (23.4%) G $ $61.67 $ % G $ $91.71 $ % G $ $ $ % G $ $ $ % 23 Implications of CMS APC Reconfiguration of Hospital Clinic Visits All visit levels will be paid at a single rate regardless of the acuity of the patients or the types of hospital/nursing services rendered. CMS says with a prospective payment system based on averages, payments across low vs. high acuity patients will average out Providers should examine their own volumes and see whether they will see a payment increase or decrease for their clinic visits Providers should review all status indicator V CPT/HCPCS codes to see whether other specific codes more appropriately describe the services being rendered compared to the single new HCPCS G code For Medicare billing, facility specific visit guidelines may not be needed, but other payers are likely to require CPT reporting, which means guidelines will be needed Providers will need to report all clinic E/M CPT codes to payers who do not recognize CMS single HCPCS, and map these codes in the CDM to the single new HCPCS code for Medicare patients 24

13 Sample of Likely CDM Update for New G0463 CDM Description CPT Price Medicare HCPCS Price New Pt Lvl $ G0463 $ New Pt Lvl $ G0463 $ New Pt Lvl $ G0463 $ New Pt Lvl $ G0463 $ New Pt Lvl $ G0463 $ Est Pt Lvl $ G0463 $ Est Pt Lvl $ G0463 $ Est Pt Lvl $ G0463 $ Est Pt Lvl $ G0463 $ Est Pt Lvl $ G0463 $ Current CMS Regulations Governing Hospital Charges and charge practices CMS Program Manuals Provider Reimbursement (PUB. 15) Provider Reimbursement Manual Part I, Chapter 22 Determination of Cost of Services to Beneficiaries Section Definition of Charges Section 2203 Provider Charge Structure as Basis for Apportionment Charges refer to the regular rates established by the provider for services rendered to both beneficiaries and to other paying patients. Charges should be related consistently to the cost of the services and uniformly applied to all patients whether inpatient or outpatient. 25 Status Indicator V CPT/HCPCS Codes HCPCS Code Short Descriptor SI APC Relative Weight Payment Rate G0463 Hospital outpt clinic visit Q $ Dialysis one evaluation V $ Eye exam new patient V $ Eye exam new patient V $ Eye exam establish patient V $ Eye exam&tx estab pt 1/>vst V $ Glucose monitoring cont V $ Trans care mgmt 14 day disch V $ Trans care mgmt 7 day disch V $96.53 G0101 Ca screen;pelvic/breast exam V $75.59 G0175 Opps service,sched team conf V $ G0245 Initial foot exam pt lops V $75.59 G0246 Followup eval of foot pt lop V $75.59 G0248 Demonstrate use home inr mon V $96.53 G0249 Provide inr test mater/equip V $96.53 G0402 Initial preventive exam V $

14 Extended Assessment and Management (EAM) Services CMS is replacing the two Composite APCs, APC 8002 (Level I extended assessment and management composite) and APC 8003 (Level II extended assessment and management composite), with a SINGLE new Composite APC To generate the new EAM Composite APC 8009, the following criteria must be met: Single new HCPCS clinic visit code, a Level 4 or 5 Type A ED visit, or a Level 5 Type B ED visit must be present along with 8 or more hours of observation time The HCPCS code for a direct admit to observation and the CPT codes for critical care remain in place No SI = T procedure on the same claim CY 2014 payment rate for new EAM APC is $1,199 compared to existing payment rates of $440 for APC 8002 and $798 for APC 8003 The payment rate does increase dramatically, but this is in part due to many other services no longer generating separate payment under CMS expanded packaging. 27 Expanded OPPS Packaging for CY 2014 CMS proposed to package an additional 7 different categories of services that it believes to be integral, ancillary, supportive, dependent, or adjunctive to other services CMS modified its proposals and is finalizing 5 of the 7 categories for CY 2014 Addendum P lists specific CPT codes Drugs, biologicals, and radiopharmaceuticals that function as supplies in a diagnostic test or procedure Drugs and biologicals that function as supplies or devices in a surgical procedure Certain clinical laboratory tests Certain procedures described by add on codes Device removal procedures CMS is updating its list of OPPS packaged items and services in 42 CFR 419.2(b) 28

15 Drugs, Biologicals, & Radiopharmaceuticals That Function as Supplies in a Diagnostic Test or Procedure Currently, contrast agents and diagnostic radiopharmaceuticals are the only two subcategories of the broader category of drugs, biologicals, and radiopharmaceuticals that are packaged under the OPPS because they function as supplies that CMS says are integral and supportive of diagnostic tests or procedures CMS defines a diagnostic test or procedure as any kind of test or procedure performed to aid in the diagnosis, detection, monitoring, or evaluation of a disease or condition A diagnostic test or procedure includes tests or procedures performed to determine which treatment option is optimal A diagnostic test or procedure can have multiple purposes, but at least one purpose must be diagnostic 29 Drugs, Biologicals, and Radiopharmaceuticals That Function as Supplies in a Diagnostic Test or Procedure (cont.) CMS has identified one new class of drugs and one specific drug that fits within the category of drugs, biologicals, and radiopharmaceuticals that function as supplies when used in a diagnostic test or procedure: Stress agents Drugs used in diagnostic tests to evaluate certain aspects of cardiac function and used in performing myocardial perfusion imaging (MPI), primarily reported with CPT code HCPCS J0151 (replaces J0152) and J2785 are assigned status indicator N for CY 2014 Cysview Used for cystoscopic detection of non muscle invasive papillary cancer of the bladder, which is diagnostic Cysview is more of a drug that functions as a supply when used in a diagnostic test or procedure HCPCS code C9275 (Cysview) is assigned status indicator N for CY

16 Biologicals That Function as Supplies in a Surgical Procedure Skin substitutes are mostly used in the outpatient setting for treatment of diabetic foot ulcers and venous leg ulcers Currently skin substitutes are paid as biologicals under OPPS under the ASP methodology and subject to the drug packaging threshold But CMS believes they fit into the packaging category of drugs and biologicals that function as supplies in a surgical procedure CMS states that because a skin substitute must be used to perform surgical procedures in the CPT range of , they function as necessary supplies for the repair procedures and should be packaged 31 Biologicals That Function as Supplies in a Surgical Procedure (cont.) Commenters raised concerns about CMS packaging skin substitutes equally into procedures since they have widely varying costs. CMS agreed and modified its proposal by creating two groups for packaging. See Table 13 & be sure to check your cost & charges for these items: High = weighted average cost > $32 per square cm Low = weighted average cost < $32 per square cm Liquid or powder skin substitutes that are per milliliter or per milligram will simply be packaged into the surgical procedure in which they are used New coding requirements. See Table 14. High cost skin substitutes to be billed using existing skin substitute application CPT codes New HCPCS C codes to be reported for low cost skin substitutes in CY 2014: C5271, C5272, C5273, C5274, C5275, C5276, C5277 & C5278 Code edits will be in place checking for high cost skin substitutes reported with CPT codes and low cost with the new C codes 32

17 Clinical Laboratory Tests Clinical laboratory tests currently paid under the Clinical Laboratory Fee Schedule (CLFS) will be packaged (status indicator N ) when the labs are ordered by the same practitioner who performs the primary service & are related and supportive to the primary service and performed on the same date of service as any other OPPS service. Molecular pathology tests will continue to be paid under the CLFS even when included on the 13x claim (CPT codes and , and 81479). Additionally, clinical lab tests will be paid separately only when billed on a 14x claim and meet one of the two following criteria. Further instructions forthcoming. The lab test is the only service provided on that date of service The lab test is on the same date of service as the primary service but is ordered for a different purpose than the primary service by a practitioner different than the practitioner who ordered the primary service This is a change in billing practice and in the definition of a 14x claim. 33 Example of Lab Packaging (From CMS in the Final Rule) A beneficiary has eye surgery scheduled with physician A, an ophthalmologist, but also has an order from physician B, a cardiologist, for unrelated laboratory tests. The beneficiary goes to the hospital for the eye procedure and decides to have the laboratory tests that have been ordered by physician B for a different purpose than the eye procedure on the same date of service. While the laboratory test is on the same date of service as the eye procedure, the laboratory tests are ordered for a different purpose than the primary service by a practitioner different than the practitioner who ordered the eye procedure. In this situation, the hospital can bill Medicare for the unrelated laboratory tests on a 14x claim and receive separate payment under the CLFS, similar to when the laboratory tests are the only service performed in the hospital outpatient department on a given date of service. 34

18 Example of Lab Packaging (From CMS in the Final Rule) (cont.) However, if, in this example, physician A also ordered some laboratory tests as a part of a preoperative evaluation for the eye procedure and the beneficiary had the tests on the same date of service as the eye procedure, then the hospital would report those laboratory tests on a 13x claim along with the eye surgery. Payment for those preoperative laboratory tests would be packaged into the payment for the surgery, which is the primary procedure that would be paid separately. It will be the hospital s responsibility to determine when to separately bill laboratory tests on the 14x claim according to this description of these limited exceptions. CMS will issue revised contractor instructions for billing for these laboratory tests on a 14x bill type in January 2014, and will also create claims processing edits. 35 Clinical Laboratory Tests (cont.) Medicare Claims Processing Manual Chapter 16 Laboratory Services For all hospitals (including CAHs) except Maryland waiver hospitals, if a patient receives hospital outpatient services on the same day as a specimen collection and laboratory test, then the patient is considered to be a registered hospital outpatient and cannot be considered to be a non patient on that day for purposes of the specimen collection and laboratory test. This is the exception CMS is referencing the specimen collection and lab test (i.e., reference test) presumably ordered by a different physician for a different purpose can be billed on a 14X bill for CLFS payment. 36

19 Clinical Laboratory Tests (cont.) If any hospital (other than a CAH or a Maryland waiver hospital) only collects or draws a specimen from the patient and the patient does not also receive hospital outpatient services on that day, the hospital may choose to register the patient as an outpatient for the specimen collection or bill for these services as non patient on the 14x bill type. In order to be paid under CLFS, the hospital must bill on a 14X bill type. After Jan. 1, 2014, if the test is billed on a 13X, it will not receive payment. If the from and through dates on 837i/UB04 span more than one date, lab services on any of those dates are considered packaged UNLESS ordered for a different purpose than the primary service by a practitioner different than the practitioner who ordered the primary service. CMS will likely clarify the date of service exception in upcoming instructions. 37 Certain Categories of Add On Codes CMS had proposed to unconditionally package (status indicator N) 273 add on codes but is only finalizing packaging of 243 as shown in Addendum P Examples of codes: Surgery range such as skin graft add on codes (15111 & 15131) Imaging codes such as x ray in surgery and ultrasound vascular access codes (74301 & 76937) Cardiology codes such as color Doppler and electrophysiology 3D (93325 & 93613) CMS modified its proposal and did NOT finalize packaging devicedependent add on codes or drug administration add on codes such as additional infusion hours or additional injections based on the comments it received, but says it will review these in the future 38

20 Device Removal Procedure Codes Device removal procedures are sometimes described by a code that may include repair or replacement. Other times, device removal procedures are described by separate codes that only describe the surgical procedure to remove a device. Device removal procedures are frequently performed with procedures to repair or replace devices, but not always. As a result, for CY 2014 CMS will package all separately coded device removal procedures when performed with a separately coded device repair or replacement procedure. There are 68 device removal procedure codes being conditionally packaged (status indicator Q2 ) and they are listed in Addendum P. Remember, status indicator Q2 means no separate payment is made when the CPT code occurs on the same date of service as another procedure code with status indicator T. 39 Clarification of Why Supplies Are Being Packaged CMS says that supplies are a large category of items typically either for single patient use or with a shorter life than equipment Packaged supplies can include certain drugs, biologicals, and radiopharmaceuticals As part of its annual review of OPPS for CY 2014, CMS found that it was paying for many supplies separately that should be packaged Take home surgical dressings will no longer receive separate payment when billed by an outpatient hospital The only supplies that are sometimes paid separately via the DMEPOS are prosthetic supplies For CY 2014, CMS has finalized revising the status indicator for all supplies described by HCPCS A codes (except for prosthetic supplies) from status indicator A to N 40

21 Service Areas Not Finalized for CY 2014 Packaging CMS did not finalize conditional packaging (status indicator of Q1) for 425 ancillary codes due to concerns raised by commenters The following codes WILL continue to be separately payable in CY 2014: Surgery range such as remove nasal foreign body code (30300) Numerous imaging codes such as chest x rays ( ) Radiation oncology codes such as radiation therapy dose plan (77300) Blood bank codes such as fresh frozen plasma (96927) Pathology codes such as tissue exam by pathologists ( ) Respiratory & pulmonary codes such as pulmonary stress tests (94620 & 94621) CMS also did not finalize the packaging of diagnostic tests for CY 2014, but plans to continue studying these services for future packaging Exception: CMS DID finalize conditional packaging of CPT Stress Test 41 Looking Ahead Expect More Packaging CMS says the packaging finalized here is not exhaustive and that it will continue analyzing other services It is likely that for CY 2015, we ll see more packaging proposals possibly for the areas that CMS did not finalize for CY 2014 including the packaging of imaging services with associated surgical procedures in CY 2015 Comprehensive APCs coming in 2015 Beyond 2015 even more bundles, packaging, and comprehensive style APCs 42

22 Comprehensive APCs CMS proposed to create 29 comprehensive APCs from the 39 existing device dependent APCs. CMS chose this first set of comprehensive APCs based on the most costly device dependent services. 29 Comprehensive APCs calculated using 136 HCPCS codes from 2012 data and a new status indicator J1 was created for these APCs A single APC payment would be based on costs of all individually reported services on the claim that would be categorically assumed to be adjunctive and supportive of the primary service by virtue of being on the same claim (Line item date of service would not apply for claims spanning dates) In the proposed rule, CMS did not address how claims with more than one of the 136 HCPCS (i.e., multiple J1 HCPCS) would be treated or which HCPCS would be defined as the primary service CMS finalized its plan to move forward with 29 comprehensive APCs, but will delay implementation until 2015 and will make modifications 43 Comprehensive APCs (cont.) CMS listened to comments and made several policy changes and specifically will address how to pay for cases with multiple J1 HCPCS codes to address commenters concerns about more complex cases. For the comprehensive APCs in CY 2015, expanded packaging will include all services in support of the primary procedure all supplies, lab, DMEPOS, diagnostic tests, drugs and therapy services are also packaged. CMS acknowledged that for outpatient claims, room & board is included in ancillary charges, so these revenue codes are not applicable. PT, OT & SLP therapies provided during an encounter for one of these primary procedures is not the same as outpatient therapy ordered as part of a continuing care plan, and therefore, it is categorically defined as adjunctive and supportive and will be packaged. Functional status codes and modifiers will not be required for these adjunctive therapy services billed on comprehensive APC claims; more instructions forthcoming. 44

23 45 Estimating Financial Impact Not as simple as past years Code level comparisons are only one view of impact but they are NOT sufficient to provide the entire picture of payment impact given CMS final policy changes for CY 2014 All CPT codes flagged with comment indicator CH in Addendum B should be reviewed to get a sense of the magnitude of the changes Look at the 2013 payments received for a sample of claims by department/service line from the first six months of this year and compare these payments to what the 2014 payments would be by using the final payment rates for 2014 AND the new status indicators and packaging logic. NOTE: All of the line items that generate payment today WILL NOT in Although the OPPS system is budget neutral, the impact of CMS policies on your organization is dependent on your mix of services, coding, charging, and billing practices, and on the combination of services provided on a given date of service. 46

24 Examples of Status Indicator S or T Procedures With Payment Increases for CY 2014 October 2013 Addendum B January 2014 Addendum B HCPCS Payment Code Short Descriptor SI APC Rate Short Descriptor CI SI APC Payment Rate $ Change in Pmt Rate % Chg in Pmt Rte Cltx thigh fx T 0129 $ Cltx thigh fx CH T 0431 $1, $1, % Treatment of ankle fracture T 0129 $ Treatment of ankle fracture CH T 0431 $1, $1, % 0308T Insj ocular telescope prosth T 0234 $1, Insj ocular telescope prosth CH T 0351 $15, $13, % Cult skin graft f/n/hf/g T 0134 $ Cult skin graft f/n/hf/g CH T 0329 $2, $2, % Analyze pacemaker system S 0690 $33.95 Analyze pacemaker system CH S 0691 $ $ % Set up cardiovert defibrill S 0690 $33.95 Set up cardiovert defibrill CH S 0691 $ $ % Epidrm autogrft trnk/arm/leg T 0135 $ Epidrm autogrft trnk/arm/leg CH T 0329 $2, $1, % Skin sub grft t/arm/lg child T 0135 $ Skin sub grft t/arm/lg child CH T 0329 $2, $1, % Cult skin grft t/arm/leg T 0134 $ Cult skin grft t/arm/leg CH T 0328 $1, $1, % Skin sub graft trnk/arm/leg T 0134 $ Skin sub graft trnk/arm/leg CH T 0328 $1, $1, % Skin sub graft face/nk/hf/g T 0134 $ Skin sub graft face/nk/hf/g CH T 0328 $1, $1, % Ther/proph/diag inj ia S 0437 $39.13 Ther/proph/diag inj ia CH S 0438 $ $ % Ther/proph/diag inj iv push S 0437 $39.13 Ther/proph/diag inj iv push CH S 0438 $ $ % Chemo anti neopl sq/im S 0437 $39.13 Chemo anti neopl sq/im CH S 0438 $ $ % Trim nail(s) any number T 0012 $28.40 Trim nail(s) any number T 0012 $60.83 $ % Drain blood from under nail T 0012 $28.40 Drain blood from under nail T 0012 $60.83 $ % Skin tissue procedure T 0012 $28.40 Skin tissue procedure T 0012 $60.83 $ % Dermatological procedure T 0012 $28.40 Dermatological procedure T 0012 $60.83 $ % G0127 Trim nail(s) T 0012 $28.40 Trim nail(s) T 0012 $60.83 $ % Dilate esophagus T 0140 $ Dilate esophagus CH T 0419 $1, $ % Revision of scrotum T 0183 $1, Revision of scrotum CH T 0205 $3, $1, % Echo exam of head S 0265 $64.57 Echo exam of head CH S 0266 $ $ % Echo exam of eye S 0265 $64.57 Echo exam of eye CH S 0266 $ $ % Examples of Status Indicator S or T Procedures With Payment Increases for CY 2014 October 2013 Addendum B January 2014 Addendum B HCPCS Payment Code Short Descriptor SI APC Rate Short Descriptor CI SI APC Payment Rate $ Change in Pmt Rate % Chg in Pmt Rte Treat finger dislocation T 0045 $1, Treat finger dislocation CH S 0426 $ ($900.76) (86.7%) Remove cartilage for graft T 0137 $1, Remove cartilage for graft CH T 0327 $ ($1,100.66) (72.9%) Treat pelvic ring fracture T 0045 $1, Treat pelvic ring fracture CH T 0139 $ ($590.15) (56.8%) Treat hip dislocation T 0045 $1, Treat hip dislocation CH T 0139 $ ($590.15) (56.8%) Treat humerus fracture T 0138 $ Treat humerus fracture T 0138 $ ($225.40) (56.5%) Treat radius fracture T 0138 $ Treat radius fracture T 0138 $ ($225.40) (56.5%) Treat fracture of radius T 0138 $ Treat fracture of radius T 0138 $ ($225.40) (56.5%) Treat fracture radius & ulna T 0138 $ Treat fracture radius & ulna T 0138 $ ($225.40) (56.5%) Manipulate finger w/anesth T 0138 $ Manipulate finger w/anesth T 0138 $ ($225.40) (56.5%) Srs multisource S 0127 $7, Srs multisource CH S 0067 $3, ($4,318.86) (54.6%) Closed tx nose fx w/o stablj T 0253 $1, Closed tx nose fx w/o stablj CH T 0252 $ ($602.25) (52.5%) Treatment of fibula fracture T 0139 $ Treatment of fibula fracture T 0139 $ ($386.49) (46.3%) Treat lower leg dislocation T 0139 $ Treat lower leg dislocation T 0139 $ ($386.49) (46.3%) Treatment of heel fracture T 0139 $ Treatment of heel fracture T 0139 $ ($386.49) (46.3%) Remote 30 day ecg rev/report S 0097 $66.52 Remote 30 day ecg rev/report CH S 0690 $36.15 ($30.37) (45.7%) Polysom <6 yrs 4/> paramtrs S 0209 $ Polysom <6 yrs 4/> paramtrs S 0209 $ ($366.01) (45.4%) Polysom <6 yrs cpap/bilvl S 0209 $ Polysom <6 yrs cpap/bilvl S 0209 $ ($366.01) (45.4%) Sleep study attended S 0209 $ Sleep study attended S 0209 $ ($366.01) (45.4%) Ambulatory eeg monitoring S 0209 $ Ambulatory eeg monitoring S 0209 $ ($366.01) (45.4%) EEG monitoring/computer S 0209 $ Eeg monitoring/computer S 0209 $ ($366.01) (45.4%) Eeg monitor technol attended S 0209 $ Eeg monitor technol attended S 0209 $ ($366.01) (45.4%)

25 Estimating Financial Impact for E/M Clinic Visits Step 1: Determine clinic visit volume by each level for a department and pull all other CPT transactions on those claims Step 2: Create a pivot table with the volumes and percentage of codes appearing with each E/M level claim Step 3: Perform a department financial impact analysis as shown in the next slide using 2013 and 2014 status indicators and payment rates Alternatively, you could pull a sample of claims and hand price them using 2013 payment rates and rules and 2014 payment rate and rules Use the October 2013 and the January 2014 Addenda B to assign status indicators, APCs, and payment rates to each code Price out each line item on the claim and then total to see the impact 49 Estimating Financial Impact for E/M Clinic Visits (cont.) Visit HCPCS Medicare FFS Volume % of Clinic claims 2013 Pmt Est 2013 Pmt 2014 Pmt Est 2014 Pmt , % $ $ 1,105, $ $ 1,387, ,000 80% $ 3.00 $ 36, $ $ ,000 60% $ $ 130, $ $ ,500 50% $ 9.64 $ 72, $ $ ,500 43% $ $ 119, $ $ ,000 33% $ 5.39 $ 26, $ $ % $ $ 7, $ 29, % $ $ 2, $ $ Total Estimated Impact $ 1,500, $ 1,417, Difference $ (82,954.00) 50

26 Looking at Financial Impact for Clinic Claims Example of Pulmonologist Clinic Visit Claim 2013 Codes & APC Rates HCPCS Rev Code Description SI APC Pmt Lvl 3 Est Pt Clinic Visit V $ Pulm stress test/complex X $ Comprehen metabolic panel A $ Blood gases o2 sat only A $ Withdrawal of arterial blood Q3* $ Total part of critical care & trauma composite APCs $ Example of Pulmonologist Clinic Visit Claim 2014 Codes & APC Rates HCPCS Rev Code Description SI APC Pmt G Hospital outpt clinic visit Q3 $ Pulm stress test/complex X $ N N Withdrawal of arterial blood Q3* Total part of critical care & trauma composite APCs $ Difference $ Example of Financial Impact for Skin Substitutes and Add On Codes HCPCS Code 2013 Addendum B 2014 Addendum B Short Descriptor SI APC Units APC 2013 HCPCS SI APC Units APC 2014 Total Payment Total Code Payment Payment Rate Payment Rate Emergency dept visit Q $229 $229 GXXXA V $294 $ Skin sub graft trnk/arm/leg T $251 $ T $1,371 $1, Skin sub graft t/a/l add on T $43 $ N 1 $0 $0 Q4102 Oasis wound matrix K $8 $8 Q4102 N 1 $0 $0 A6242 Hydrogel drg <=16 in w/o bdr A 1 $6 $6 A6242 N 1 $0 $0 A6441 Pad band w>=3" <5"/yd A 1 $1 $1 A6441 N 1 $0 $0 Total $538 $1,665 $1,127 HCPCS Code 2013 Addendum B 2014 Addendum B Short Descriptor SI APC Units APC 2013 HCPCS SI APC Units APC 2014 Total Payment Total Code Payment Payment Rate Payment Rate Total Claim Impact Total Claim Impact Emergency dept visit Q $229 $229 GXXXA V $294 $ Skin full graft een & lips T $1,112 $1, T $1,371 $1, Skin full graft add on T $556 $ N 1 $0 $0 Q4102 Oasis wound matrix K $8 $8 Q4102 N 1 $0 $0 A6242 Hydrogel drg <=16 in w/o bdr A 1 $6 $6 A6242 N 1 $0 $0 A6441 Pad band w>=3" <5"/yd A 1 $1 $1 A6441 N 1 $0 $0 Total $1,911 $1,665 ($246) 52

27 Example of Packaging Impact for Nuclear Medicine Stress Agents HCPCS codes J0151 (replacing J0152) and J2785 are finalized to be unconditionally packaged. CMS is treating these agents as functioning as supplies, therefore packaged into the primary procedure. CPT code (Cardiovascular stress test ) finalized for conditional packaging since it is often performed as a part of myocardial perfusion imaging (MPI). CMS believes that, because stress testing is both integral and ancillary to MPI, it should be packaged into MPI when a stress test accompanies MPI. 53 A Reminder About Charging MPI Coding Prior to CY 2010 HCPCS Rev Code Description Price* 2009 APC Rate 78478TC 0341 MPI Wall Motion $ 300 Pkgd 78480TC 0341 MPI Ejection Fraction $ 200 Pkgd 78465TC 0341 MPI SPECT, Multiple $ 1,500 $ MPI Coding Beginning CY 2010 Illustrating Pricing Problem HCPCS Rev Code Description Price* 2012 APC Rate 78452TC 0341 MPI SPECT, Multiple w/wm&ef $ 1,500 $ MPI Coding Beginning CY 2010 Illustrating Correct Pricing Strategy HCPCS Rev Code Description Price* 2014 APC Rate* 78452TC 0341 MPI SPECT, Multiple w/wm&ef $ 2,000 $ 1, * CY 2014 APC also packages Stress Agents and Excercise Stress test 93017, so it is extremely important to continue charging the J code for the stress agent & when also performed! 54

28 Looking at Financial Impact for Extended Assessment and Management Claims Simple Direct Admit Observation Case HCPCS Dates Units 2013 SI 2013 Pmt 2014 SI 2014 Pmt Difference Direct Admit G0379 1/1/ Q3 EAM Q3 EAM Observation Hours G0378 1/1/ N EAM N EAM IV Push Initial /1/ S $39.13 S $ IV Push Add'l New Drug /1/ S $39.13 S $43.78 IV Push Add'l Same Drug /2/ N $0.00 N $0.00 CT Lumbar Spine w/dye /1/ Q3 $ Q3 $ EAM Composite V $ V $1, Total $ $1, $ Complex Direct Admit Observation Case HCPCS Dates Units 2013 SI 2013 Pmt 2014 SI 2014 Pmt Difference Direct Admit G0379 1/1/ Q3 EAM Q3 EAM Observation Hours G0378 1/1/ N EAM N EAM EKG /1/ S $26.67 S $27.12 Nebulizer tx /1/ S $35.09 S $78.19 Pulmonary Stress Test /2/ X $ Q1 $ Chest X-ray /1/ X $45.95 X $57.35 IV Infusion Initial /1/ S $ S $ IV Infusion Subsequent /2/ S $39.13 S $43.78 Hydration /1/ S $ S $ Hydration /2/ S $ S $ EAM Composite V $ V $1, Total $1, $2, $ Section 3: Other Key Items From the Rule and Medicare Physician Fee Schedule Updates Physician supervision and the Inpatient only list Drugs, radiopharmaceuticals, and blood & blood products Drug administration Stereotactic radiosurgery Device related procedure APCs and the FB/FC modifier Partial hospitalization Hospital Outpatient Quality Reporting Initiative Off Campus Provider Based Clinics Condition of Payment for Outpatient Therapeutic Services ASC Updates Physician Fee Schedule Changes 56

29 Physician Supervision and the Inpatient Only List Physician supervision All rules remain in effect CMS to begin enforcing physician supervision requirements for CAHs and rural hospitals starting January 1, 2014 Inpatient Only List (status indicator C) The list continues, which means Medicare will only provide payment for services on the list when provided in the inpatient setting due to the nature of the procedure and the need for postoperative recovery time/monitoring New 2 midnight benchmark for assuming medical necessity of inpatient status will not be required for stays where an inpatientonly procedure is performed. Caution: cancelled inpatient only procedures!! 57 The Inpatient Only List (cont.) Inpatient Only List (status indicator C) CMS reviews the list annually and typically identifies codes to remove For CY 2014, CMS didn t propose removal of any procedures Instead, CMS added the codes in the table below to the Inpatient Only list 58