2014 OPPS Proposed Rule: Prepare for Sweeping Changes

Transcription

1 HCPro, Inc., presents 2014 OPPS Proposed Rule: Prepare for Sweeping Changes A 90-minute interactive audio conference Tuesday, August 20, :00 p.m. 2:30 p.m. (Eastern) 12:00 p.m. 1:30 p.m. (Central) 11:00 a.m. 12:30 p.m. (Mountain) 10:00 a.m. 11:30 a.m. (Pacific)

2 The 2014 OPPS Proposed Rule: Prepare for Sweeping Changes audio conference materials package is published by HCPro, Inc., 75 Sylvan Street, Suite A-101, Danvers, MA Copyright 2013 HCPro, Inc. Attendance at the audio conference is restricted to employees, consultants, and members of the medical staff of the Licensee. The audio conference materials are intended solely for use in conjunction with the associated HCPro audio conference. The Licensee may make copies of these materials for internal use by attendees of the audio conference only. All such copies must bear the following legend: Dissemination of any information in these materials or the audio conference 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 audio conference will follow the enclosed agenda. Occasionally, our speakers will refer to the enclosed materials. We have noticed that non-hcpro audio conference 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 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: HCPro, Inc. 75 Sylvan Street, Suite A-101 Danvers, MA Phone: 800/ Fax: 781/ customerservice@hcpro.com Website: OPPS Proposed Rule: Prepare for Sweeping Changes

3 Dear Program Participant, Thank you for participating in our 2014 OPPS Proposed Rule: Prepare for Sweeping Changes audio conference, featuring speakers Jugna Shah, MPH, and Valerie A. Rinkle, MPA, and moderated by Todd Hutlock. Our team is excited about the opportunity to interact with you directly. We encourage you to ask our experts your questions during the program. If you would like to submit a question before the audio conference, please send it to the producer, Todd Hutlock, at thutlock@hcpro.com and provide the program date in the subject line. We cannot guarantee that your question will be answered during the program, but we will do our best to include a good cross section of questions. If you enjoy the audio conference, you may purchase a CD or audio on-demand copy for the special attendee price of just $70. Simply call our customer service department at and mention the source code SURVEYAD. Keep your copy handy and listen again at your convenience whenever you or your staff might benefit from a refresher or when your new employees are ready for training. At HCPro, we appreciate hearing from our customers. So if you have comments, suggestions, or ideas about how we can improve our programs, or if you have any questions about today s show, please do not hesitate to contact me. And if you would like any additional information about our other products and services, please contact our customer service department at Thank you, again, for attending the HCPro program today. We hope you found it to be informative and helpful and that you will continue to rely on HCPro programs as an important resource for pertinent and timely information. Sincerely, Elizabeth Petersen Vice President HCPro, Inc OPPS Proposed Rule: Prepare for Sweeping Changes 3

4 Contents 5 Agenda 6 Speaker profi les 7 Exhibit A Presentation by Jugna Shah, MPH, and Valerie A. Rinkle, MPA 50 Exhibit B List of useful industry acronyms 55 Resources Please note: Continuing education credits are available for this program. For instructions on how to claim your credits, please visit the materials download page at OPPS Proposed Rule: Prepare for Sweeping Changes

5 Agenda I. Significant changes to evaluation and management (E/M) coding and reimbursement II. III. IV. Major changes to status indicators due to seven new categories of packaged services proposed by CMS, including clinical lab tests New comprehensive APCs to replace 29 existing devicedependent APCs with extensive additional packaging New payment and rules for a single extended assessment and management (EAM) Composite APC V. APC payment rate changes and understanding how to think about financial impact VI. VII. VIII. IX. Major changes to specific APCs and/or clinical service lines, including clinics, EDs, infusion clinics, etc. Physician supervision for outpatient therapeutic services Reimbursement for drugs, biologicals, and radiopharmaceuticals Hospital outpatient quality initiative program update X. Live Q&A 2014 OPPS Proposed Rule: Prepare for Sweeping Changes 5

6 Speaker Profi les Jugna Shah, MPH Jugna Shah 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 (OPPS) based on APCs. She has educated and audited hospitals on their drug administration coding and billing practices. Shah 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. Valerie A. Rinkle, MPA Valerie A. Rinkle is vice president of revenue integrity informatics with Health Revenue Assurance Associates in Plantation, Fla. She has more than 20 years of healthcare reimbursement experience, including 10 years as revenue cycle director for Asante Health System in Medford, Ore., and 11 years in nationwide consulting to hospitals and physicians regarding Medicare and Medicaid payment systems and compliance. She is the author of numerous articles on OPPS and hospital-based clinics OPPS Proposed Rule: Prepare for Sweeping Changes

7 Presentation by Jugna Shah, MPH, and Valerie A. Rinkle, MPA Current Procedural Terminology (CPT) is Copyright 2012 American Medical Association (AMA). All rights reserved. No fee schedules, basic units, relative values, or related listings are included in CPT. The AMA assumes no liability for the data contained herein. Applicable FARS/DFARS restrictions apply to government use OPPS Proposed Rule: Prepare for Sweeping Changes 7

8 2014 OPPS Proposed Rule: Prepare for Sweeping Changes An HCPro audio conference presented on August 20, 2013 Speakers Jugna Shah, MPH President and Founder Nimitt Consulting, Inc. Washington, D.C., and Spicer, Minn. Valerie A. Rinkle, MPA Vice President of Revenue Integrity Informatics Health Revenue Assurance Associates, Inc. Plantation, Fla OPPS Proposed Rule: Prepare for Sweeping Changes

9 Important 2014 Proposed Rule Files Download the APC/OPPS Proposed Rule: CMS-1601-P Service-/HospitalOutpatientPPS/Hospital- Outpatient-Regulations-and-Notices-Items/CMS P.html Scroll down to download Addenda Comments due by 5pm ET on September 6, Agenda Part I: General Impressions, Major Proposed Changes, and Key Quotes Part II: Brief Review of Usual System Proposed Changes System updates, conversion factors, protected hospitals, and outliers Drugs, radiopharmaceuticals, and blood and blood products Physician supervision Inpatient-only list Device-related procedure APCs and the FB and FC modifiers Partial hospitalization Part III: Financial Impact Due to Major System Updates, Recalibration, and Reclassification HCPCS/CPT codes reclassification and APC recalibration Collapsing of E/M visit codes Expanded packaging in seven new categories and its implications 29 Comprehensive APCs Estimating financial impact in different ways Part IV: Other Items From the Proposed Rule Hospital quality initiative APCs for ambulatory surgery centers (ASC) Provider-based data collection Others Part V: Summary/Submitting Comments, and Q/A OPPS Proposed Rule: Prepare for Sweeping Changes 9

10 General Impressions and Significant Proposed Changes General Impressions Most significant set of proposed changes since the inception of OPPS Simulating the rule and running impact analyses is very challenging Significant Proposed Changes Collapsing E/M visit codes to single codes and payment by visit type Significant packaging changes that range from eliminating ancillary services status indicator X items and moving lab fee schedule items over to OPPS, among others Ending non-enforcement of direct supervision for outpatient therapeutic services provided in critical access hospitals (CAH) and small rural PPS hospitals with 100 or fewer beds Updates and refinements to the hospital outpatient quality reporting program, the ASC quality reporting program, and the hospital valuebased purchasing program 5 Key Quotes From the Proposed Rule! We believe this [E/M] proposal will remove any incentives hospitals may have to provide medically unnecessary services or expend additional, unnecessary resources to achieve a higher level of visit payment under the OPPS. The proposed comprehensive APCs would reliably reflect the cost of the device if it is included anywhere on the claim. Therefore, we do not believe that the burden on hospitals of adhering to the procedure-to-device edits and device-to-procedure edits, and the burden on the Medicare program of maintaining those edits, continue to be warranted. As with all other items and services recognized under the OPPS, we expect hospitals to code and report their costs appropriately, regardless of whether there are claims processing edits in place. The OPPS packages payment for multiple interrelated items and services into a single payment to create incentives for hospitals to furnish services in the most efficient way by enabling hospitals to manage their resources with maximum flexibility, thereby encouraging long-term cost containment OPPS Proposed Rule: Prepare for Sweeping Changes

11 Part II: Brief Review of Usual System Proposed Changes Overall system update Conversion factors and protected hospitals Outlier payment policy Physician supervision and the inpatient-only list Drugs, radiopharmaceuticals, and blood and blood products Device-related procedure APCs and the FB/FC modifier Partial hospitalization Off-campus provider-based clinics Hospital quality initiative APCs for ambulatory surgery centers (ASC) 7 Overall System Update CMS estimates that its proposed policies would result in a 1.8% overall market basket increase in OPPS payments to providers CMS projects total CY 2014 OPPS payments to increase by $4.37 billion, or 9.5%, once spending changes attributed to enrollment, utilization, and case-mix are accounted for Some of the increase is also attributable to the inclusion of costs currently payable under payment systems other than OPPS, such as the clinical laboratory fee schedule that CMS is proposing to package into APC rates for CY 2014 Beneficiaries may see higher copayments for certain services in CY 2014 compared to today given CMS proposed policies Potential for large swings across hospitals due to CMS proposals for E/M, expanded packaging, and comprehensive APCs OPPS Proposed Rule: Prepare for Sweeping Changes 11

12 Conversion Factors and Protected Hospitals 2013 national conversion proposed to increase by 1.8% (market basket increase less two Affordable Care Act reductions, along with a few other adjustments) $ 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 proposes to continue to provide a payment adjustment so the cancer centers OPPS payment-to-cost ratio (PCR) is equivalent to the average PCR of all other OPPS hospitals; PCR of 0.90 proposed for CY 2013 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 9 Outlier Policy 2013 Outlier 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 2014 Proposed Outlier Policy No change Outlier pool still 1% of total OPPS payments; but 0.18% of the outlier pool proposed for CMHC for partial hospitalizations Two-threshold model No change to the multiplier threshold Fixed dollar threshold proposed to be $2,775 No change No change No change OPPS Proposed Rule: Prepare for Sweeping Changes

13 Physician Supervision and the Inpatient-Only List Physician supervision All rules remain in effect CMS proposes 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 inpatient-only procedure is performed. Caution: cancelled inpatient-only procedure accounts. CMS reviews the list annually and usually identifies a few codes to remove For CY 2014, CMS didn t propose removal of any procedures Providers should submit comments to CMS on codes/services they believe can safely be provided in the outpatient setting Proposed Rule Updates for of Drugs, Biologicals, Radiopharmaceuticals, and Blood and Blood Products Packaged drugs (status indicator N) CMS proposes to raise the drug packaging threshold from $80 to $90 5HT3 antiemetics continue to be packaged, with the exception of palonosetron hydrochloride Contrast agents and diagnostic radiopharmaceuticals remain packaged Separately payable drugs (status indicator K) Separate payment proposed for drugs with a mean cost > $90 Status indicator K drugs 2014 payment level continues at ASP + 6% Pass-through drugs (status indicator G) level = ASP + 6% same as today 16 drugs, biologicals, and/or radiopharmaceuticals proposed to lose pass-through status and these either become separately payable or packaged; 16 drugs proposed to retain pass-through status OPPS Proposed Rule: Prepare for Sweeping Changes 13

14 2014 Proposed Rule Updates for of Drugs, Biologicals, Radiopharmaceuticals, and Blood and Blood Products (cont.) Therapeutic radiopharmaceuticals (status indicator K) APC rates based on manufacturer-submitted data or CMS usual rate-setting method 2014 proposed payment rate is ASP + 6% (same as 2013), but actual rates fluctuate due to changing ASPs Brachytherapy sources CMS continues to compute payment rates based on claims data and the usual rate-setting process There are some large payment rate fluctuations Blood and blood products CMS continues to apply its longstanding special cost-to-charge calculation methodology APC payment rates fluctuate for the blood and products Several blood processing services proposed for packaging in Pass-Through Devices, Device-Related Procedure APCs, and Elimination of Modifiers -FB and -FC The following 3 devices lost pass-through status starting Jan. 1, 2014: C1830 (Powered bone marrow biopsy needle) C1840 (Lens, intraocular [telescopic]) C1886 (Catheter, extravascular tissue ablation, any modality [insertable]) No devices proposed to be paid under the pass-through payment methodology in CY 2014 CMS also proposes the following: Eliminate device-to-procedure edits Eliminate hospital reporting of modifiers FB/FC where a device is received at no charge/full credit or if a device is replaced with a partial credit from the manufacturer and instead require hospitals to report the amount of the credit in the amount portion for 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 18 of the rule) that is 50% or greater than the cost of the device Keep 10 APCs as device-dependent and convert 29 others to Comprehensive APCs OPPS Proposed Rule: Prepare for Sweeping Changes

15 Partial Hospitalization Program (PHP) CMS proposes to continue to use four separate APCs to pay for PHP services, two APCs for services furnished in hospital-based PHPs and two APCs for services furnished in community mental health centers (CMHC) 2013 Addendum B 2014 Addendum B Impact $ Chg in % Chg in APC Description SI Rate Description SI Rate Pmt Rte Pmt Rte Level I Partial Hospitalization (3 Level I Partial Hospitalization (3 services) 175 services) for Hospital based PHPs P $181 for Hospital based PHPs P $211 $ % Level II Partial Hospitalization (4 or more services) for Hospital based 176 PHPs P $228 Level II Partial Hospitalization (4 or more services) for Hospital based PHPs P $213 ($15.27) 6.70% CMS seeks comment on whether it should change the payment structure of PHP services to reduce unnecessary care while maintaining/increasing quality: Would payment based on an episode of care, or a per diem similar to inpatient psychiatric facility PPS, result in more appropriate payment for PHP services than the current payment structure? Does the current physician recertification requirement, which requires the first recertification as of the 18th day of PHP service, reflect current PHP treatment practices or should the regulation be changed to another standard that accords with best practices? What requirements should be included in the written plan of treatment to better direct PHP resources toward appropriate discharge and follow-up with appropriate support services? What measures should be included in a PHP quality data reporting program? 15 Part III: Financial Impact Due to Major System Updates, Recalibration, and Reclassification Use of new cost centers to calculate relative weights Reclassification of HCPCS/CPT codes and APC system recalibration Status indicators (new and review) Collapsing E/M visit codes and payment Packaging expansion and its implications 29 Comprehensive APCs Assessing the impact of the major proposed changes Examining overall financial impact complicated! OPPS Proposed Rule: Prepare for Sweeping Changes 15

16 Use of New Cost Centers to Calculate APC Relative Weights CMS proposes to use new cost centers to calculate APC relative weights for implantable devices, MRIs, CTs, and cardiac catheterization procedures CMS has data from the following number of hospitals: 2,936 hospitals for implantable device cost center (used in 2013) 1,853 hospitals for MRI (new for 2014) 1,956 hospitals for CT (new for 2014) 1,367 hospitals for cardiac cath (new for 2014) Cost-to-charge ratios (CCR) for other diagnostic cost centers went up and these CCRs went down as predicted by RTI in its charge compression report The financial impact of this is significant for certain APCs as shown in Table 3 on the next two slides OPPS Proposed Rule: Prepare for Sweeping Changes

17 Table 3 (cont.) 19 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 lowestcost 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 CMS CY 2014 E/M proposal to collapse visit levels has a major impact Changes in packaging status and/or other status indicators results in impact CMS CY 2014 packaging proposal has a major impact CMS CY 2014 comprehensive APC proposal has a major impact Providers should review the codes in Addendum B with comment indicator CH and all of the codes in Addendum P to better understand CMS proposed changes for CY OPPS Proposed Rule: Prepare for Sweeping Changes 17

18 Reminder About Status Indicators: Key to Understanding OPPS 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); CMS proposes to eliminate status indicator X in 2014 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 proposed SI for comprehensive APCs Changes in status indicators can result in APC payment changes from one year to the next and CMS proposes massive changes for CY Packaging & Status Indicators Unconditionally packaged status N Services that are ALWAYS packaged payment included in other APCs so no separate line item payment ever Conditionally packaged status Q Services that are OFTEN packaged, but can be separately payable in certain circumstances Status indicator Q applies to three types of conditionally packaged services: Q1 ( STVX packaged codes being proposed to change to STV packaged codes) Q2 ( T packaged codes) Q3 (codes that may be paid through a composite APC) Reminder 3 ways to report packaged services, but only ONE best practice! Build the packaged charges into the procedure/service charge (note this carries cost reporting implications) Report the revenue code and a dollar charge with no HCPCS code (but only if there is not an appropriately reportable HCPCS/CPT code) Report the packaged HCPCS/CPT code when appropriate with revenue code and a dollar charge if separate reporting is consistent with CPT and CMS instructions Best option OPPS Proposed Rule: Prepare for Sweeping Changes

19 APC Reconfiguration Proposal Related to Hospital Coding and for E/M Visits CMS proposes to replace the current five levels of visit codes for each visit type (Type A ED, Type B ED, & New & Est. Clinic visits) with three new HCPCS codes representing a single level of payment for each of the three types of visits, respectively GXXXA for Type A ED visits assigned to APC 0635 GXXXB for Type B ED visits assigned to APC 0636 GXXXC for & assigned to APC 0634 The new HCPCS G-codes would be assigned to new APCs CMS proposes to base the CY 2014 OPPS payment rates on the total mean costs of Level 1 through Level 5 visit codes obtained from CY 2012 OPPS claims data for each visit type OPPS Proposed Rule: Prepare for Sweeping Changes 19

20 APC Reconfiguration Proposal Related to Hospital Coding and for E/M Visits (cont.) Why now? Why no national guidelines, or is this the intended guideline? Why only one code for each visit type? CMS has concluded that it is not feasible to adopt a set of national guidelines for reporting hospital clinic visits that can accommodate the enormous variety of patient populations and service-mix provided by hospitals of all types and sizes throughout the country. CMS rationale for its proposal includes: It creates larger bundles to incent hospitals to greater cost efficiencies It reduces administrative burden on hospitals to maintain the 20 different CPT codes and to maintain and apply their internal guidelines Allows a very large volume of claims to be used in rate setting It removes any incentive hospitals have to upcode visit levels 25 APC Reconfiguration Proposal Related to Hospital Coding and for E/M Visits (cont.) CMS invites comments regarding whether there is a case to be made that different payment levels should be created for extremely lowcomplexity/cost or high-complexity/cost cases (i.e., special cases ). CMS states, If commenters provide compelling comments describing such special cases or the need for additional payment levels, should they exist and if there are alternative policies that would more accurately and appropriately pay for visits, we would consider implementing a different policy in the final rule. We note that, to the extent that commenters recommend that additional levels of payment or special high complexity or low complexity cases be recognized, we also would be interested in how we should define and differentiate those levels or cases OPPS Proposed Rule: Prepare for Sweeping Changes

21 APC Reconfiguration Proposal Related to Hospital Coding and for E/M Visits (cont.) Visit Type HCPCS Code CY 2013 Proposed for CY 2014 Potential APC HCPCS Code APC Impact % Decrease $56.77 $88.31 $ % $73.68 $88.31 $ % $96.96 $88.31 ($8.65) (8.9%) $ $88.31 ($40.17) (31.3%) Clinic Visit $ $88.31 ($87.48) (49.8%) GXXXC $56.77 $88.31 $ % $73.68 $88.31 $ % $73.68 $88.31 $ % $96.96 $88.31 ($8.65) (8.9%) $ $88.31 ($40.17) (31.3%) This only shows impact by CPT code but not by overall payment for E/M claims, which is critical to consider in light of CMS packaging proposals. Type A ED Visit $51.82 $ $ % $92.16 $ $ % $ GXXXA 0635 $ $ % $ $ ($16.47) (7.2%) $ $ ($131.81) (38.2%) Type B ED Visit G $67.78 $84.85 $ % G $54.12 $84.85 $ % G $89.89 GXXXB 0636 $84.85 ($5.04) (5.6%) G $ $84.85 ($51.45) (37.7%) G $ $84.85 ($122.46) (59.1%) OPPS Proposed Rule: Prepare for Sweeping Changes 21

22 APC Reconfiguration Proposal Related to Hospital Coding and for E/M Visits (cont.) The financial impact of CMS proposal on your organization MUST be analyzed carefully! This is critical given that the status indicators for so many codes are changing, which means items/services you get paid for today in addition to the E/M visit payment may not generate payment in CY 2014 under CMS proposals. Hospitals need to weigh in on CMS proposal both from a financial impact perspective as well as a philosophical one. Is it important to your organization to differentiate between types of patients, clinics, visits, etc., given the clinical and resource differences that may exist? 28 Separately Payable Observation Services CMS proposes to replace Composite 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. CMS proposes this in part due to its policy to reduce five levels of ED and clinic visits to a single level, respectively. CMS proposes to recognize each of the 3 new visit HCPCS codes as meeting criteria to generate a single new Extended Assessment and Management (EAM) Composite APC. The requirement for 8 or more hours of observation time remains in order to generate EAM composite APC payment. The HCPCS code for direct admit to observation and the CPT codes for critical care remain in place Proposed 2014 EAM Composite APC Extended Assessment & Management Composite $1, EAM Composite APCs 8002 Level I Extended Assessment & Management Co $ Level II Extended Assessment & Management Co $ rate increases dramatically since many other services will not get paid separately under CMS packaging proposal OPPS Proposed Rule: Prepare for Sweeping Changes

23 Reconfiguration and Recalibration Related to OPPS Packaging Policies REMINDER: CMS made its first extensive expansion of packaging policy in 2008 by creating 7 broad categories of services to be packaged to their primary diagnostic or therapeutic service: (1) guidance services (2) image processing services (3) intraoperative services (4) imaging supervision and interpretation services (5) diagnostic radiopharmaceuticals (6) contrast media (7) observation services CMS added implantable biologicals in 2009 CMS would like to shift the OPPS away from a per-service fee schedule-like payment system to more of a prospective payment system by creating larger bundles of payment 30 CMS Expanded Packaging Proposal for CY 2014 For CY 2014, CMS proposes to package a whole host of services it has reviewed and considers integral, ancillary, supportive, dependent, or adjunctive A full listing of these services is included in Addendum P and all of the services are broken out into eight (8) separate tabs for easy review Seven (7) new categories of packaged codes are discussed by CMS in the rule & in addition, CMS is proposing to package HCPCS A-codes that have a SI of A to status N this includes take-home surgical supplies comprising the 8th tab in Addendum P CMS moved payments from CLFS and DMEPOS to their OPPS payment calculations for their estimates OPPS Proposed Rule: Prepare for Sweeping Changes 23

24 CMS Expanded Packaging Proposal for CY 2014 The following categories are unconditionally packaged (status N) Stress Agent Tab = Drugs, biologicals, and radiopharmaceuticals that function as supplies in a diagnostic test or procedure (e.g., stress agents) Skin Substitute Tab = Drugs and biologicals that function as supplies or devices in a surgical procedure (e.g., skin substitutes) Add-on Codes Tab = Procedures described by add-on codes (e.g., additional infusion hours) Others categories are conditionally packaged (status Q1 or Q2) Lab Tests Tab = Laboratory tests when provided on the same DOS & ordered by the same practitioner as the primary service (excludes molecular pathology) Ancillary Services Tab = Ancillary services (all status indicator X ) Diagnostic Tests Tab = Diagnostic tests (e.g., barium swallow test) Device Removal Tab = Device removal procedures (e.g., removal of shunt) There is an additional tab for supplies in Addendum P that is not included in the narrative description of the seven new categories of packaging, but it represents supplies from DMEPOS changing SI from A to N 32 Expanded Packaging & Financial Analysis Caution is advised in performing analyses as there are layered implications of this year s packaging policies For example: Skin substitute add-on procedure codes are packaged into the primary skin substitute procedure AND skin substitute biologicals are also packaged into the skin substitute primary procedure AND take-home surgical supplies are packaged into the skin substitute primary procedure Analyses should be performed on claims representing frequent combinations of services OPPS Proposed Rule: Prepare for Sweeping Changes

25 Expanded Packaging: Labs CMS conditional packaging of labs relates to labs ordered by the same practitioner who performs the primary service and which are related & supportive to the primary service Currently, all labs with the date of service are reported on the same OPPS claim pursuant to current billing regulations Proposed Unrelated labs and those ordered by a different practitioner will have to be billed separately on bill type 14x even when performed on the same date of service If CMS finalizes its proposal, hospitals can expect to see additional billing instructions & clarification from CMS Could this lead health systems to restructure their reference lab to a corporate entity no longer operated by a hospital? 34 Example of Lab Packaging Proposal Impact Example 1: Diabetic patient to have knee arthroscopy and surgeon orders blood sugar lab test immediately prior to surgery. The knee arthroscopy procedure will generate an APC payment, but the lab will not generate any separate payment, it will be packaged. Variation of Example 1: The surgeon sends the patient to freestanding lab for the blood sugar test the same morning of the knee arthroscopy. In this case, separate payment will be made to the freestanding lab for the lab test and the hospital will receive a separate APC payment for the surgery. Scenario #2: A diabetic patient sees their primary care provider (PCP) the same morning of the knee arthroscopy. The PCP takes a urine sample for a urinalysis and sends it to the hospital. In this scenario, two claims must be submitted and payment will be generated for both. One claim for the urinalysis ordered by the PCP will be submitted and paid, and a second claim for the knee arthroscopy will be submitted and paid OPPS Proposed Rule: Prepare for Sweeping Changes 25

26 Expanded Packaging: Add-On Codes CMS proposes to unconditionally package (status indicator N) 273 add-on codes This means no separate APC payment will be generated for these services/codes 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) Drug administration codes such as additional infusion hours including chemotherapy (96366 & 96415) Cardiology codes such as color Doppler and electrophysiology 3D (93325 & 93613) 36 Example of CMS Packaging Proposal on Drug Administration Add-On Codes CMS considers all of the intravenous injection and infusion CPT codes besides the initial service code as add-on codes under its packaging proposal If CMS finalizes its proposal to package add-on codes, then separate APC payment for drug admin add-codes will be eliminated; only the initial service code will be paid This could have significant financial impact depending on the number and types of drug administration and/or other packaged services provided during a single visit and whether the payment assigned to the initial service code is sufficient enough to offset the loss of payment for the other services CMS proposed packaging change should NOT have an operational impact since CPT coding rules remain in effect and all codes SHOULD be reported There may be many unintended consequences over time if providers stop reporting all of the additional services/codes and units Financial impact MUST be assessed very carefully OPPS Proposed Rule: Prepare for Sweeping Changes

27 All of the initial service drug admin codes have dramatic payments increases. This is because under CMS packaging proposal, NONE of the other add-on drug admin codes as well as other services such as labs, diagnostic tests, etc., will generate separate payment. This is why financial impact must be computed carefully! 38 Non-Chemotherapy Infusion and Injection CPT Codes Hydration iv infusion init $74.69 $ Hydrate iv infusion add-on $- $ Ther/proph/diag iv inf init $ $ Ther/proph/diag iv inf addon $- $ Tx/proph/dg addl seq iv inf $- $ Sc ther infusion up to 1 hr $ $ July 2013 Rate Sc ther infusion addl hr $- $ Proposed Rate Sc ther infusion reset pump $- $ Ther/prop/diag inj/inf proc $27.01 $ Refill/maint portable pump $ $ Refill/maint pump/resvr syst $ $ C Prolonged IV inf, req pump $ $ $- $50 $100 $150 $200 $250 $300 $350 $400 $ OPPS Proposed Rule: Prepare for Sweeping Changes 27

28 OPPS Proposed Rule: Prepare for Sweeping Changes

29 Two Examples of Non-Chemo Infusion Therapy Drug Administration Financial Impact HCPCS Code 2013 Addendum B 2014 Addendum B Short Descriptor SI APC Units APC Rate 2013 Total HCPCS Code SI APC Units APC Rate 2014 Total Ther/proph/diag iv inf init S $ $ S $ $ Ther/proph/diag iv inf addon S $27.01 $ N 1 $0.00 $ Tx/proph/dg addl seq iv inf S $39.13 $ N 1 $0.00 $ Tx/pro/dx inj new drug addon S $39.13 $ N 3 $0.00 $0.00 Total $ $ (49.78) Total Claim Impact HCPCS Code 2013 Addendum B 2014 Addendum B Short Descriptor SI APC Units APC Rate 2013 Total HCPCS Code SI APC Units APC Rate 2014 Total Ther/proph/diag iv inf init S $ $ S $ $ Ther/proph/diag iv inf addon S $27.01 $ N 1 $0.00 $ Tx/proph/dg addl seq iv inf S $39.13 $ N 1 $0.00 $ Tx/pro/dx inj new drug addon S $39.13 $ N 3 $0.00 $0.00 Total $ $ (128.04) Total Claim Impact OPPS Proposed Rule: Prepare for Sweeping Changes 29

30 Four Examples of Chemo Financial Impact (cont.) HCPCS Code 2013 Addendum B Short Descriptor SI APC Units APC Rate 2013 Total HCPCS Code 2014 Addendum B SI APC Units APC Rate 2014 Total Chemo iv infusion 1 hr S $231 $ S $410 $410 Total $231 $410 $179 Total Claim Impact HCPCS Code 2013 Addendum B 2014 Addendum B Short Descriptor SI APC Units APC Rate 2013 Total HCPCS Code SI APC Units APC Rate 2014 Total Chemo iv infusion 1 hr S $231 $ S $410 $ Chemo iv infusion addl hr S $39 $ N 1 $0 $0 Total $270 $410 $140 Total Claim Impact HCPCS Code 2013 Addendum B Short Descriptor SI APC Units APC Rate 2013 Total HCPCS Code 2014 Addendum B SI APC Units APC Rate 2014 Total Chemo iv infusion 1 hr S $231 $ S $410 $ Chemo iv infusion addl hr S $39 $ N 1 $0 $ Chemo iv infus each addl seq S $75 $ N 1 $0 $ Hydrate iv infusion add on S $27 $ N 1 $0 $0 Total $437 $410 ($27) Total Claim Impact HCPCS Code 2013 Addendum B 2014 Addendum B Total Claim Short Descriptor SI APC Units APC Rate 2013 Total HCPCS Code SI APC Units APC Rate 2014 Total Chemo iv infusion 1 hr S $231 $ S $410 $ Chemo iv infusion addl hr S $39 $ N 1 $0 $ Tx/proph/dg addl seq iv inf S $39 $ N 1 $0 $ Chemo iv infus each addl seq S $75 $ N 1 $0 $ Hydrate iv infusion add on S $27 $ N 1 $0 $ Tx/pro/dx inj new drug addon S $39 $ N 1 $0 $0 Total $555 $410 ($145) Impact OPPS Proposed Rule: Prepare for Sweeping Changes

31 Expanded Packaging: Ancillary Services CMS proposes to conditionally package (status indicator of Q1) 425 codes representing ancillary services If one of these codes appears on the same date of service as a service with a status indicator of S, T, or V, the ancillary service code (with status indicator Q1) will not be paid separately If multiple ancillary services with a status indicator Q1 are reported, then only the highest weighted will be paid Examples of codes: 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 and pulmonary codes such as pulmonary stress tests (94620 & 94621) OPPS Proposed Rule: Prepare for Sweeping Changes 31

32 Three Financial Impact Examples for Radiation Oncology Ancillary Services Claims (cont.) Date CPT Code Description Units 2013 SI 2014 SI 2013 APC Rate or National CLFS Midpoint Rate 2014 APC Rate 2013 Total 2014 Total (based on CMS' proposals) Impact 01/28/ XRT-DOSIMETRY CALC 5 X Q1 $110 $343 $549 $0 01/28/ XRT-IMRT TREATMENT PLAN 1 X Q1 $984 $1,908 $984 $1,908 01/28/ MLC FOR IMRT/PLAN X Q1 $291 $672 $291 $0 Example 1 Total $1,824 $1,908 $84 01/02/ XRT-DOSIM CALC X Q1 $110 $343 $658 $0 01/02/ IMRT TX PLANNING X Q1 $984 $1,908 $984 $1,908 01/02/ MLC FOR IMRT/PLAN X Q1 $291 $672 $291 $0 Example 2 Total $1,934 $1,908 ($26) 01/02/ XRT-DOSIM CALC X Q1 $110 $343 $1,756 $0 01/02/ IMRT TX PLANNING X Q1 $984 $1,908 $984 $1,908 01/02/ MLC FOR IMRT/PLAN X Q1 $291 $672 $291 $0 Example 3 Total $2,740 $1,908 ($832) OPPS Proposed Rule: Prepare for Sweeping Changes

33 Two Additional Financial Impact Examples for Radiation Oncology Ancillary Services Claims (cont.) Date CPT Code Description Units 2013 SI 2014 SI 2013 APC Rate or National CLFS Midpoint Rate 2014 APC Rate 2013 Total 2014 Total (based on CMS' proposals) 01/04/ XRT-DOSIMETRY CALC 7 X Q1 $110 $343 $768 $0 01/04/ XRT-IMRT TREATMENT PLAN 1 X Q1 $984 $1,908 $984 $0 01/04/ MLC FOR IMRT/PLAN X Q1 $291 $672 $291 $0 01/04/2014 Impact or GXXXC for CY 2014 ESTAB PT LEVEL 2 EXPANDED 1 V B $74 $0 $74 $88 Total $2,117 $88 ($2,029) 01/22/ XRT-DOSIM CALC X Q1 $110 $343 $549 $0 01/22/ IMRT TX PLANNING X Q1 $984 $1,908 $984 $1,908 01/22/ MLC FOR IMRT/PLAN X Q1 $291 $672 $291 $0 01/22/ XRT-DOSIMETRY CALC 9 X Q1 $110 $343 $988 $0 01/22/ XRT-IMRT TREATMENT PLAN 1 X Q1 $984 $1,908 $984 $0 Total $3,796 $1,908 ($1,889) OPPS Proposed Rule: Prepare for Sweeping Changes 33

34 The Future of Expanded Packaging Conduct your analyses now and be sure to submit comments to CMS if you have concerns about its packaging proposals CMS states that it is contemplating a proposal for CY 2015 that would conditionally package all imaging services with any associated surgical procedures CMS will continue to review and notes that these policies are not exhaustive What could be next 46 Estimating Financial Impact Across Your Book of Business Computing financial impact this time around is VERY different from past years Line item comparisons/analyses are NOT sufficient and in fact can be wildly misleading given all of CMS payment policy proposals Providers need to review CPT codes flagged with comment indicator CH in Addendum B of the 2014 OPPS proposed rule to get a sense of the magnitude of the proposed 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 proposed 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 proposed 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 OPPS Proposed Rule: Prepare for Sweeping Changes

35 Estimating Financial Impact for E/M Visits Step 1: Determine your volume of low, middle, and high level visits Step 2: Determine what sorts of other separately payable services are typically on your low, middle, and high level visit claims Step 3: Create some dummy claims or, better yet, look at a sample of your claims for clinics and the ED and hand price them under 2013 payment rules as well as 2014 payment rules Assign status indicators to each code Assign an APC to each code Use the July 2013 Addendum B and the proposed January 2014 Addendum B to assign the status indicators, APCs, and payment rates Price out each line item on the claim and then total to see the full impact OPPS Proposed Rule: Prepare for Sweeping Changes 35

36 Two Examples of Financial Impact for E/M ED Visits HCPCS Code 2013 Addendum B 2014 Addendum B Total Claim Short Descriptor SI APC Units APC Rate 2013 Total HCPCS Code SI APC Units APC Rate 2014 Total Emergency dept visit V $143 $143 GXXXA V $213 $ Ther/proph/diag inj iv push S $39 $ S $ $ Tx/pro/dx inj new drug addon S $39 $ N 1 $0 $ Tx/pro/dx inj same drug adon N 1 $0 $ $0 $ X ray exam of ankle X $46 $ Q $61 $0 Total $268 $369 $101 Impact HCPCS Code 2013 Addendum B 2014 Addendum B Short Descriptor SI APC Units APC Rate 2013 Total HCPCS Code SI APC Units APC Rate 2014 Total Emergency dept visit Q $345 $345 GXXXA V $213 $ Ther/proph/diag inj iv push S $39 $ S $ $ Tx/pro/dx inj new drug addon S $39 $ N 1 $0 $ Tx/pro/dx inj same drug adon N 2 $0 $ $0 $ Hydrate iv infusion add on S $27 $ N 1 $0 $ X ray exam of ankle X $46 $ Q $61 $0 Total $589 $369 ($220) Total Claim Impact OPPS Proposed Rule: Prepare for Sweeping Changes

37 Two More Examples of Financial Impact for ED E/M Visits (cont.) HCPCS Code 2013 Addendum B 2014 Addendum B Total Claim Short Descriptor SI APC Units APC Rate 2013 Total HCPCS Code SI APC Units APC Rate 2014 Total Emergency dept visit Q $229 $229 GXXXA V $213 $ Skin sub graft trnk/arm/let $251 $ T $875 $ Skin sub graft t/a/l add o T $86 $ N 1 $0 $0 Q4102 Oasis wound matrix K $8 $8 Q4102 N 1 $0 $0 A6242 Hydrogel drg <=16 in w/oa 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 $581 $1,088 $507 Impact HCPCS Code 2013 Addendum B 2014 Addendum B Total Short Descriptor SI APC Units APC Rate 2013 Total HCPCS Code SI APC Units APC Rate 2014 Total Claim Impact Emergency dept visit Q $229 $229 GXXXA V $ Skin full graft een & lips T $1,112 $1, T $1,377 $1, Skin full graft add on T $1,112 $1, N 1 $0 $0 Q4102 Oasis wound matrix K $8 $8 Q4102 N 1 $0 $0 A6242 Hydrogel drg <=16 in w/oa 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 $2,467 $1,590 ($877) $ OPPS Proposed Rule: Prepare for Sweeping Changes 37

38 Looking at Financial Impact Across Proposed Changes Date CPT Code Description Units 2013 SI 2014 SI 2013 APC Rate or National CLFS Midpoint Rate 2014 APC Rate 2013 Total 2014 Total (based on CMS' proposals) 01/01/ ROUTINE VENIPUNCTURE 1 A A 3.00 $0 $3 $0 01/01/ XRT-DOSIMETRY CALC 18 X Q1 $110 $343 $1,975 $0 01/01/ XRT-IMRT TREATMENT PLAN 1 X Q1 $984 $1,908 $984 $0 01/01/ MLC FOR IMRT/PLAN X Q1 $291 $672 $291 $0 01/01/ XRT-IMRT TREATMENT DELIVERY 1 S S $484 $538 $484 $538 01/01/ BILIRUBIN, TOTAL 1 A N 9.32 $0 $9 $0 01/01/ CARBON DIOXIDE CONTENT 1 A N 9.08 $0 $9 $0 01/01/ CHLORIDE 1 A N 8.54 $0 $9 $0 01/01/ CREATININE 1 A N 9.52 $0 $10 $0 01/01/ GLUCOSE 1 A N 7.29 $0 $7 $0 01/01/ MAGNESIUM, SERUM 1 A N $0 $12 $0 01/01/ POTASSIUM 1 A N 8.54 $0 $9 $0 01/01/ SODIUM 1 A N 8.94 $0 $9 $0 01/01/ AST,SGOT 1 A N 9.61 $0 $10 $0 01/01/ ALT, SGPT 1 A N 9.83 $0 $10 $0 01/01/ UREA NITROGEN BUN 1 A N 7.34 $0 $7 $0 01/01/ CBC AUTOMATED DIFF 1 A N $0 $14 $0 01/01/ or GXXXC for CY 2014 ESTAB PT LEVEL 3 DETAILED Impact 1 V B $74 $0 $88 $88 Total $3,940 $626 ($3,314) OPPS Proposed Rule: Prepare for Sweeping Changes

39 Looking at Possible Financial Impact for Observation Service Claims Simple Observation Case HCPCS Dates Units 2013 SI 2013 Pmt 2014 SI 2014 Pmt Difference Direct Admit G0379 1/1/ Q3 Q3 Observation Hours G0378 1/1/ N N EAM Composite Criteria Met V $ V $1, IV Push Initial /1/ S $39.13 S $ IV Push Add'l New Drug /1/ S $39.13 N $0.00 IV Push Add'l Same Drug /2/ N $0.00 N $0.00 CT Lumbar Spine w/dye /1/ Q3 $ Q3 $ Lab Tests Misc 1/1/ A $14.00 N $0.00 Total $ $1, $ Complex 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 EAM Composite Criteria Met V $ V $1, EKG /1/ S $26.67 Q1 $0.00 Nebulizer tx /1/ S $35.09 S $92.51 Pulmonary Stress Test /2/ X $ Q1 $0.00 Evaluation of Wheezing /1/ X $ Q1 $0.00 Vital Capacity Test /2/ x $45.06 Q1 $0.00 Chest X ray /1/ X $ Q1 $0.00 IV Infusion Initial /1/ S $ S $ IV Infusion additional hours /1/ S $54.02 N $0.00 IV Infusion Subsequent /2/ S $39.13 N $0.00 Hydration /1/ S $ N $0.00 Hydration /2/ S $ N $0.00 Lab Tests Misc 1/1/ A $21.00 N $0.00 Total $1, $1, ($12.69) OPPS Proposed Rule: Prepare for Sweeping Changes 39

40 Comprehensive APCs CMS proposes to create 29 comprehensive APCs to replace 29 existing device-dependent APCs (136 HCPCS codes) 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 DOS no longer applies for claims more than a single DOS) At this time, the first set of comprehensive APCs would encompass the 29 most costly device-dependent services [emphasis added] A new status indicator J1 has been created for these HCPCS and APCs 53 Comprehensive APCs (cont.) For the comprehensive APCs, expanded packaging includes all services in support of the primary procedure including selfadministered drugs ordered by the physician to keep the patient stable and safe during the encounter. All supplies, lab, DMEPOS, diagnostic tests, and therapy services are also packaged. According to CMS, 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 adjunctive and supportive and should be packaged OPPS Proposed Rule: Prepare for Sweeping Changes

41 Comprehensive APCs (cont.) For these APCs, packaged costs exceed the device-dependent procedure costs by an average of 11% (less than $1,000 per claim) The direct cost contribution of other OPPS services accounts for most of this increase, with laboratory tests contributing approximately $18 per claim (a 0.1% increase) and other non-opps payments contributing an additional $18 per claim There is significant variation across these APCs, however, not only because the distribution of supporting services varies, but also because the larger bundle allows a more complete incorporation of uncoded costs Comprehensive APCs allow the number of claims used to calculate costs to almost triple from 233,000 to 649,000, supposedly increasing the accuracy of cost estimates 55 Comprehensive APCs Proposed Comprehensive APCs 2014 Proposed Rates 2013 Rates % Change APC APC Title SI National Rate SI National Rate 0039 Level I Implantation of Neurostimulator Generator J1 $21, S $16, % 0040 Level I Implantation/Revision/Replacement of Neurostimula J1 $5, S $4, % 0061 Level II Implantation/Revision/Replacement of Neurostimul J1 $8, S $6, % 0082 Coronary or Non-Coronary Atherectomy J1 $10, T $7, % 0083 Coronary Angioplasty, Valvuloplasty, and Level I Endovasc J1 $4, T $4, % 0085 Level II Electrophysiologic Procedures J1 $11, T $3, % 0089 Insertion/Replacement of Permanent Pacemaker and Elec J1 $9, T $8, % 0090 Level I Insertion/Replacement of Permanent Pacemaker J1 $7, T $6, % 0104 Transcatheter Placement of Intracoronary Stents J1 $8, T $6, % 0106 Insertion/Replacement/Repair of Pacemaker Generator, Le J1 $5, T $3, % 0107 Level I Implantation of Cardioverter-Defibrillators (ICDs) J1 $25, T $22, % 0108 Level II Implantation of Cardioverter-Defibrillators (ICDs) J1 $31, T $30, % 0202 Level VII Female Reproductive Procedures J1 $4, T $3, % 0227 Implantation of Drug Infusion Device J1 $15, T $14, % 0229 Level II Endovascular Revascularization of the Lower Extre J1 $10, T $8, % 0259 Level VII ENT Procedures J1 $29, T $30, % 0293 Level VI Anterior Segment Eye Procedures J1 $8, T $8, % 0315 Level II Implantation of Neurostimulator Generator J1 $23, S $20, % 0318 Implantation of Neurostimulator Pulse Generator and Elec J1 $26, S $25, % 0319 Level III Endovascular Revascularization of the Lower Extre J1 $17, T $14, % 0385 Level I Prosthetic Urological Procedures J1 $8, S $7, % 0386 Level II Prosthetic Urological Procedures J1 $13, S $12, % 0425 Level II Arthroplasty or Implantation with Prosthesis J1 $10, T $9, % 0648 Level IV Breast and Skin Surgery J1 $7, T $4, % 0654 Level II Insertion/Replacement of Permanent Pacemaker J1 $8, T $7, % 0655 Insertion/Replacement/Conversion of a Permanent Dual C J1 $11, T $10, % 0656 Transcatheter Placement of Intracoronary Drug-Eluting Ste J1 $10, T $7, % 0674 Prostate Cryoablation J1 $7, T $7, % 0680 Insertion of Patient Activated Event Recorders J1 $6, S $5, % OPPS Proposed Rule: Prepare for Sweeping Changes 41

42 Other Items From the 2014 OPPS Propose Rule CMS Quality Reporting Programs CMS operates the following quality reporting programs: 1. Hospital Inpatient (IQR) 2. Hospital Outpatient (OQR) 3. Physician Quality Reporting System (PQRS) 4. Inpatient Rehabilitation Facility (IRF QRP) 5. Long-term Care Hospital (LTCHQR) 6. PPS-exempt cancer hospitals (PCHQR) 7. ASCs (ASCQR) 8. Inpatient Psychiatric Facility (IPFQR) 9. Home health agencies (HH QRP) 10. Hospice Quality Reporting Program 11. (ESRD) Quality Incentive Program OPPS Proposed Rule: Prepare for Sweeping Changes

43 Quality Reporting Program Goals CMS states, Our ultimate goal is to align the clinical quality measure requirements of the Hospital OQR Program and various other programs, such as the Hospital IQR Program, the ASCQR Program, and the Medicare and Medicaid Electronic Health Record (EHR) Incentive Programs, so that the burden for reporting will be reduced. This alignment requires interoperability between EHRs and CMS enabling data to be calculated and submitted via certified EHR technology. This in turn will require additional infrastructural development on the part of hospitals and CMS, including standards for capturing, formatting, and transmitting the data elements that make up the measures. 59 ACA Quality Reporting Provisions ACA requires CMS to hold multi-stakeholder forums pre-rulemaking Measure Applications Partnership (MAP) a public-private partnership created for the primary purpose of providing input to HHS on the selection of the categories of measures National Quality Strategy 6 measurement domains: 1. Clinical care 2. Person- & caregiver-centered experience & outcomes 3. Safety 4. Efficiency & cost reduction 5. Care coordination 6. Community/population health HHS engaged a wide range of stakeholders to develop the National Quality Strategy pursuant to ACA OPPS Proposed Rule: Prepare for Sweeping Changes 43

44 Hospital Quality Data Initiative (cont.) Current measures assess: Process of care Imaging efficiency patterns Care transitions ED throughput efficiency The use of HIT care coordination Patient safety & volume Future measure domains will assess: Clinical quality of care Care coordination Patient safety Patient and caregiver experience of care Population/community health & efficiency CMS states, We believe this approach will promote better care while bringing the Hospital OQR Program in line with other established quality reporting programs such as the Hospital IQR Program and the ASCQR Program. 61 Hospital Quality Data Initiative (cont.) CY2014 & 2015 Determination [collection in 2013 & 2014] 24 measures after CMS removes two measures: OP-19 for ED transition discharge record OP-24 Cardiac Rehab referral from outpatient settings CY2016 [data collection in 2015] 5 additional measures proposed: 1. Influenza Vaccination Coverage among Healthcare Personnel (NQF #0431) 2. Complications within 30 Days Following Cataract Surgery Requiring Additional Surgical Procedures (NQF #0564) 3. Endoscopy/Poly Surveillance: Appropriate follow-up interval for normal colonoscopy in average risk patients (NQF #0658) 4. Endoscopy/Poly surveillance: Colonoscopy Interval for Patients with a History of Adenomatous Polyps Avoidance of Inappropriate Use (NQF #0659) 5. Cataracts: Improvement in Patient s Visional Function within 90 Days Following Cataract Surgery (NQF #1536) OPPS Proposed Rule: Prepare for Sweeping Changes

45 ASC Updates Two conversion factors also in place; one for those meeting the quality reporting requirements and another for those who fail Proposed conversion factor for 2014 for those who meet quality reporting requirements $43.32 Proposed conversion factor for 2014 for those who fail to meet quality reporting requirements $42.46 CMS is not proposing any additions to the list of ASC covered surgical procedures for CY procedures proposed to be added to the list of office-based procedures & one temporary office-based procedure is proposed to be moved to the list of regular covered ASC procedures CMS ASC claims processing system is not programmed for conditional packaging, so ASCs will continue to be separately paid for certain ancillary and supportive services when they perform one of the 136 procedures encompassed by the newly proposed 29 comprehensive APCs, but the ASC rates are based on standard OPPS rate setting, not the comprehensive rates 63 ASC Updates (cont.) ASCs would continue to use modifiers FB & FC for device credits because they bill on 837p claims where there is no mechanism to report the actual amount of the credit CMS is proposing to apply the new expanded packaging categories to ASCs Newly proposed ASC QRP measures for 2016 payment year [2015 data reporting] equate to the same measures proposed for hospital OQP OPPS Proposed Rule: Prepare for Sweeping Changes 45

46 Requiring Compliance With State Law as a New Medicare Condition of for Outpatient Therapeutic Services CMS proposes to revise the Medicare conditions of participation (COP) for outpatient therapeutic services in hospitals or CAHs that are furnished incident to a physician s or NPP s services to require that individuals furnishing these services do so in compliance with applicable state law In recent years several situations have come to CMS attention where Medicare was billed for incident to services that were performed by an individual who did not meet the state standards for furnishing those services CMS says that because the current Medicare requirements for hospital outpatient therapeutic services do not specifically make compliance with state law a condition of payment for services, the Medicare program has had limited recourse when hospital outpatient therapeutic incident-to services are not furnished in compliance with state law 65 Off-Campus Provider-Based Clinics CMS cites recent reports of increasing trends of hospitals acquiring physician practices and integrating those practices as hospital outpatient departments and notes concerns around increasing Medicare program payments and beneficiary cost sharing that appear to be resulting from such acquisitions CMS wishes to study the impact of this on OPPS costs and suggests methods to collect data so it can analyze the frequency, type, and payment for services furnished in off-campus provider-based hospital departments CMS is considering several methods, including: New location/service code for all off-campus-based departments Use of a new modifier on all services provided in off-campus-based departments New cost centers for off-campus departments CMS requests comments on these suggestions and for additional ideas & methods to collect information on the type of services and associated costs of these clinics and departments OPPS Proposed Rule: Prepare for Sweeping Changes

47 Summary/Preparing Comments and Questions and Answers 67 Summary The need to comment has NEVER been greater given CMS proposed changes There is still plenty of time to submit comments Identify the areas you want to submit comments on and discuss these with finance, revenue cycle, and other departments Do NOT think about financial impact only at the CPT code level; look at claims or all of the codes billed by a given department, and when assessing impact, be sure to manually apply all of the CMS proposed rules Think about operational implications and potential unintended consequences for 2014 and beyond What implications will CMS proposals have on other payers? OPPS Proposed Rule: Prepare for Sweeping Changes 47

48 Preparing Your Comments Share this presentation with others in your organization Download the proposed rule and addenda Estimate financial impact dynamically! Consider the following list of items to submit comments on: E/M visits EAM Composite APC Packaging 29 Comprehensive APCs Removal of edits (i.e., device and nuclear medicine) Elimination of the FB/FC modifier Keep eyes/ears open to see what the American Hospital Association and others in the industry are thinking 69 Four Ways to Submit Your Comments Electronically to: or and follow instructions under More Search Options By regular mail (one original and two copies) to the following address: Centers for Medicare & Medicaid Services Department of Health and Human Services Attention: CMS-1601-P P.O. Box 8011 Baltimore, MD By express/overnight mail (one original and two copies) to the following: Centers for Medicare & Medicaid Services Department of Health and Human Services Attention: CMS-1601-P Mail Stop C , 7500 Security Boulevard Baltimore, MD By hand or courier (one original and two copies) to either: Room 445-G, Hubert H. Humphrey Building 200 Independence Avenue, S.W., Washington, DC or 7500 Security Boulevard, Baltimore, MD OPPS Proposed Rule: Prepare for Sweeping Changes

49 Questions? To ask our speakers questions today, press *1 on your telephone keypad. This will place you in our electronic queue. We will un-mute you and notify you when it is time to ask your question. When asking a question, please be sure to un-mute your speakerphone. You may also submit a question to the following address: thutlock@hcpro.com. This information is also listed in the instruction where you found the dial-in information for the program. 71 Thank you! Please note: Continuing education credits are available for this program. For instructions on how to claim your credits, please visit the materials download page at OPPS Proposed Rule: Prepare for Sweeping Changes 49

50 Exhibit D List of useful industry acronyms Source: HCPro, Inc OPPS Proposed Rule: Prepare for Sweeping Changes

51 Exhibit D HIM Acronyms to Know AAPC American Academy of Professional Coders ABN Advance beneficiary notice ACDIS Association of Clinical Documentation Improvement Specialists ADR Additional documentation request AHA American Hospital Association AHIMA American Health Information Management Association AHRQ Agency for Healthcare Research and Quality AMI Acute myocardial infarction AOA American Osteopathic Association APCs Ambulatory payment classifications ARRA American Recovery and Reinvestment Act of 2009 ASC Ambulatory surgery center ASP Average sales price AWP Average wholesale price CAH Critical access hospital CC Complication and comorbidity CCHIT Certification Commission for Health Information Technology CCR Continuity of care record/cost-to-charge ratio CDI Clinical documentation improvement CDM Charge description master CERT Comprehensive Error Rate Testing CPI Consumer price index CMI Case-mix index CMS Centers for Medicare & Medicaid Services CMSA Consolidated Metropolitan Statistical Area COBRA Consolidated Omnibus Budget Reconciliation Act of 1985, Pub. L CPI Consumer price index CPT Current procedural terminology CRNA Certified registered nurse anesthetist CT Computed tomography CY Calendar year DED Dedicated emergency department DRA Deficit Reduction Act of 2005, Pub. L DRG Diagnosis-related group DSH Disproportionate share hospital ED Emergency department EDMS Electronic Document Management System EHR Electronic health records E/M Evaluation and management EMR Electronic medical records EMTALA Emergency Medical Treatment and Active Labor Act of 1986, Pub. L EOB Explanation of benefits ephi Electronic protected health information FDA FFY FI U.S. Food and Drug Administration Federal fiscal year Fiscal intermediary 2014 OPPS Proposed Rule: Prepare for Sweeping Changes 51

52 Exhibit D HIM Acronyms to Know FY GAF GME Fiscal year Geographic adjustment factor Graduate medical education H&P History and physical HAC Hospital-acquired condition HCCA Health Care Compliance Association HCFA Health Care Financing Administration HCPCS Healthcare Common Procedure Coding System HCRIS Hospital Cost Report Information System HHA Home health agency HHS U.S. Department of Health and Human Services HIC Health insurance card HIMSS Healthcare Information and Management Systems Society HINN Hospital-Issued Notice of Non-Coverage HIPAA Health Insurance Portability and Accountability Act of 1996 HIS Health information system/services HIT Healthcare information technology HITECH Act Health Information Technology for Economic and Clinical Health Act HMO Health maintenance organization HSA Health savings account HSRVcc Hospital-specific relative value cost center HQA Hospital Quality Alliance HQI Hospital quality initiative ICD-9-CM ICD-10-PCS ICU IHS IOM IPF IPPS IRF IT JCAHO LCD LTC-DRG LTCH MAC MCC MCO MCV MDC MDH MedPAC MedPAR International Classification of Diseases, 9th Revision, Clinical Modifications International Classification of Diseases, 10th Revision, Procedure Coding System Intensive care unit Indian Health Service Institute of Medicine Inpatient psychiatric facility Inpatient prospective payment system Inpatient rehabilitation facility Information technology Joint Commission on Accreditation of Healthcare Organizations Local coverage determination Long-term care diagnosis-related group Long-term care hospital Medicare Administrative Contractors Major complication and comorbidity Managed care organization Major cardiovascular Major diagnostic category Medicare dependent hospital (small rural) Medicare Advisory Commission Medicare Provider Analysis and Review OPPS Proposed Rule: Prepare for Sweeping Changes

53 Exhibit D HIM Acronyms to Know MIC Medicaid Integrity Contractors MMA Medicare Prescription Drug, Improvement and Modernization Act of 2003, Pub. L MRHFP Medicare Rural Hospital Flexibility Program MS-DRG Medicare Severity DRG NAHIT NCCI NCD NCHS NCQA NCVHS NHIN NICU NPI NQF NVHRI OCE OCR OES OIG OMB OPPS OR OSCAR PHR PO POA PPI PPS PRA PRM PRRB PS&R QIO RA RAC RBC RC RHC RHIO ROI RY SAF SCH National Alliance for Health Information Technology National Correct Coding Initiative National coverage determination National Center for Health Statistics National Committee for Quality Assurance National Committee on Vital and Health Statistics National Health Information Network Neonatal intensive care unit National Provider Identifier National Quality Forum National Voluntary Hospital Reporting Initiative Outpatient code editor Office for Civil Rights Occupational employment statistics Office of Inspector General Office of Management and Budget Outpatient prospective payment system Operating room Online Survey Certification and Reporting (System) Personal health record By mouth Present on admission Producer price index Prospective payment system Per resident amount Provider Reimbursement Manual Provider Reimbursement Review Board Provider Statistical and Reimbursement (System) Quality Improvement Organization Remittance advice Recovery Audit Contractor Red blood cell Revenue code Rural health clinic Regional health information organization Release of information (OR return on investment) Rate year Standard analytic file Sole community hospital 2014 OPPS Proposed Rule: Prepare for Sweeping Changes 53

54 Exhibit D HIM Acronyms to Know SNF SOCs SSA SSI ST TAG UHDDS WBC ZPIC Skilled nursing facility Standard occupational classifications Social Security Administration Supplemental Security Income Status indicator Technical Advisory Group Uniform Hospital Discharge Data Set White blood cell Zone Program Integrity Contractor OPPS Proposed Rule: Prepare for Sweeping Changes

55 Resources 2014 OPPS Proposed Rule: Prepare for Sweeping Changes 55

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