Payment System (OPPS)

Michigan Dept. of Community Health (MDCH) Outpatient Prospective Payment System (OPPS) Kathy Whited, Project Lead Sue Klein, Project Lead Sue Schwenn, Project Co-chair Karen Scott, Project Co-chair Claudia Birkenshaw, MSA 1

Welcome Brief introductions. If you have questions and if you re participating via your PC, click on the QUESTION BOX. We will periodically ask YOU questions and we encourage your participation. To reply, click on the POLL BOX. Two and a half hours; one ten minute break around 10:15 A.M and one brief break before we take questions. 2

Introduction/Objective of Change The seminar will focus on a broad overview of OPPS as well as Medicaid s transition to this reimbursement methodology. Providers with no billing experience under the Medicare OPPS will particularly benefit from the seminar. 3

Agenda Overview of OPPS/APCs from Medicare perspective Break Overview of OPPS/APCs from Medicaid Perspective Claim Examples Other Information/Resources Break & then Questions 4

Poll Question #1 What type of facility are you Outpatient Hospital Critical Access Hospital Hospital based ambulance Hospital-based ESRD ESRD facility DMERC or CORF Are you a Health Plan? Webinar Participants: Please respond by clicking on the POLL BUTTON on your PC 5

History of APCs Medicare effective date 8/1/2000 Decade of development Integrated disciplinary process needed within a hospital (a healthcare provider) as well as with the payer Medicare reviews claims & annually makes significant changes 6

Vocabulary/Terms OPPS- Outpatient Prospective Payment System APC Ambulatory Payment Classification Some people use the two terms interchangeably 7

Defining APCs All current valid HCPCS/CPT codes are assigned to one of 809 possible APC groupings based on similarities in resource use, clinical methodology, average costs, and frequency of the procedure. Every HCPCS/CPT code has a corresponding status indicator which determines whether it will be paid under an APC, bundled with another APC on the claim (pays $0), or excluded from APC assignment (i.e.pays from a fee screen, such as Lab, DME). Unlike DRGs (where there is one DRG assigned and paid for the UB claim), a single APC claim pays each service line individually, resulting in multiple APC payments per UB claim. 8

Twelve Data Elements Needed: From and Thru Date Patient s age Patient s sex Condition Codes (if applicable) Diagnosis codes - ICD CM Medicaid provider ID# Under the CHARGE AREA of the UB; FL 42-49 Type of Bill (TOB) HCPCS with up to four modifiers Revenue Codes Dates of Service for every line item Units and Charges 9

Poll Question #2 Do you currently bill Medicare using APCs? Webinar Participants: Please respond by clicking on the POLL BUTTON on your PC 10

OCE Information The Outpt Code Edit software was developed for the implementation of the Medicare OPPS. The 2 main functions of the OCE: To identify errors & assign APCs. The software performs the following functions when processing a claim: Edits a claim for accuracy of the submitted date Assigns payment indicators Determines if packaging is available Determines the disposition of a claim based on generated edits Computes discounts and outliers, if applicable Determines payment adjustment, if applicable 11

Vocabulary/Terms; HCPCS HCPCS/CPT: Levels 1, 2, and 3 Brief history Quick review of CPT book, sections & appendixes Definition of symbols: indicators of changes, new codes, add on codes Triangle: Revised code Circle: New code PLUS sign +: add on code How are HCPCS typically assigned to a patient s chart within a hospital 12

Vocabulary/Terms; Modifiers Level I (approved for hospital use; see CPT manual) 25: Significant, separately identifiable E/M service 59: Distinct procedure; allows additional payment; must be documented 91: Repeat clinical diagnostic lab Level II (HCPCS/National; see CPT manual) LT: Left side F1: Left hand, second digit NOTE: Not all modifiers are approved for hospital use; up to four allowed 13

Addendum Information Addendum A: Lists APC categories Addendum C: Groups HCPCS Addendum E: Inpatient only procedure codes Addendum B: Lists CPT & HCPCS sequentially Addendum D1: Status Indicators; D2: Proposed Comment Codes Addendum H-M: Wage Indexes for Medicare 14

Medicare s s Addendum B & D1 Medicare s Addendum B and D-1 Status Indicators (SI): In 2006, Medicare has 17 SIs that determines whether the HCPCS on the individual claim line will be paid under an APC, bundled with another APC on the claim, and/or have no APC assignment (i.e. paid under a separate fee schedule or excluded from APC payment) Charge Description Master (CDM) Health Information Management (HIM) / Medical Records Dept. 15

Medicare s s Addendum B Modified every January 1 st and updated throughout the year, especially quarterly CPT codes listed at the beginning; HCPCS follow the CPT codes Addendum B for 2007 is coming; look to Medicare s web site When Medicaid implements OPPS, it will follow the 2007 Addendum B & it will stay current with Medicare s quarterly changes URL for Zipped File Addendum B: http://www.cms.hhs.gov/hospitaloutpatientp PS/AU/list.asp 16

Medicare s s Addendum B-2006B HCPCS or CPT 10120 10121 76700 Short Description Remove foreign Body Remove foreign Body US Abdomen SI T T S APC # 0006 0021 0266 Wgt 1.51 14.99 1.588 Payment $89.96 $892.57 $94.52 74160 CT Abdomen S 0283 4.292 $255.43 17

Medicare s s Addendum B HCPCS or CPT 19290 99283 Short Description Place needle/ wire breast ER Visit SI N V APC # 0611 Wgt 2.170 Payment $129.18 71020 Chest Xray X 0260 0.729 $43.42 81000 Urinalysis A 18

Medicare s s Addendum B-B Review Foreign body removal; payment; Status Indicator, APC code, weight X-ray; 2006 payment; Status Indicator, APC code, weight How assigned; typically lab & X-rays are assigned when then charge is entered; called hard-coded Surgical procedures: charge typically assigned by department for the room or the AMOUNT OF TIME in a room, but the code is assigned by Health Information Management (HIM or Medical Records); called soft-coded 19

Medicare s s Addendum B Non-Payable Codes Medicare requires you to also report codes that may not be separately reimbursed today, i.e. C-codes for implants. Annually, Medicare reviews paid claims and studies items/services for possible consideration for payment for the future. i.e. Observation services were initially NOT payable in 2000 20

Fluctuations: Addendum B-B 05 to 06 HCPCS Description SI APC Wgt Payment 15860 (2006) 15860 (2005) 20662 (2006) 20662 (2005) Test for Blood flow in graft Test for Blood flow in graft Application of pelvis brace Application of pelvis brace X S T C 0359 1501 0049 0.80 20.38 $47.82 $25.00 1213.38 21

Fluctuations: Addendum B-05 B to 06 HCPCS Description SI APC Wgt Payment 36415 (2006) 36415 (2005) 36416 (2006) 36416 (2005) Routine Venipuncture Routine Venipuncture Capillary blood draw Capillary blood draw A E N E 22

Medicare s s Addendum B Fluctuates Yearly Brief comparison of two codes from 2005 to 2006 HCPCS may change APC categories HCPCS may move from a PAID code to a BUNDLED code (i.e. Status Indicator change from a S to N) The Payment rate may change You need to study commonly used codes and review impact to your hospital 23

Charge Description Master (CDM) Example CDM # 222 1234 A B H Rev Code A Rev Code B Pap Smear/Manual Screen 88142 P3000 88142 0311 0923 24

CDM Example CDM # 333 6789 A M Rev Code A IV Push 90774 C8952 0940 25

CDM Example Review Lists department # Charge code # Narrative Description of the service HCPCS (usually allows for more than one payer) Revenue codes (usually allows for more than one payer) Modifiers (maybe in the CDM; especially hard-coded items, i.e. Xray knee, right and Xray knee, left) Current charge & effective date 26

BREAK We are taking a tenminute break. We will resume shortly. Thank you for your participation. 27

Medicaid Moving to APCs: 4/1/2007 All dates of service on & after 4/1/2007 for all PT 40 claims will be reimbursed via the new OPPS methodology. Refer again to MSA Bulletin 06-47, July 1, 2006, OPPS. Medicaid will closely follow Medicare s billing guidelines, including Outpatient Code Editor (OCE), Correct Coding Initiative (CCI), & series billing. 28

Providers Affected Outpatient hospitals; Medicaid Provider Type 40 ESRDs (End-State Renal Disease) CORFs (Comprehensive Outpatient Rehabilitation Facility) Rehabilitation agencies Hospital-owned ambulance services Hospitals currently excluded from Medicare's APC Reimbursement (Children's hospitals, Critical Access hospitals, etc.) will not be excluded by MDCH. 29

Hospital Ambulance Providers Hospital Ambulance Providers Hospital-owned ambulance services must change their Provider Enrollment Status and bill under their existing Provider Type 40 ID. A separate policy bulletin with additional information will be published October, 2006. If a hospital-owned ambulance currently bills Medicaid with Provider Type 18 on a 1500, dates of service on & after 4/1/07 must be billed on a UB with their existing Provider Type 40. Impacted Provider Type 18 IDs will no longer be valid for dates of service after 3/31 07. 30

Type of Bills Affected 13x - Hospital outpatient 14x Hospital-Lab service provided to nonpatient 34x Home health-other (for medical & surgical services not under a plan of treatment) 72x Clinic, hospital based or independent renal dialysis center 74x Clinic, outpatient rehabilitation facility (ORF) 75x Clinic, comprehensive outpatient rehabilitation facility (CORF) 85x Critical Access Hospital (CAH) 31

Medicaid Moving to APCs: 4/1/2007 All Provider Type 40s (including hospital-owned ambulances) are encouraged to rebill and clean up old claims as soon as possible If you re having problems with claim resolution, contact Provider inquiry. Call: 800.292.2550 Email: ProviderSupport@michigan.gov Rebill electronically whenever possible 32

Budget Neutral Bundled Services Outliers The goal of the state is to implement OPPS with an emphasis on remaining budget neutral statewide. OPPS affects outpatient services, not inpatient services. HCPCS CPT 33

Revenue Code Requirements Table Available soon on the Medicaid web site It will explain if HCPCS and Units are required The former Revenue Code Table in the Michigan State Uniform Billing Committee (SUBC) manual will not be updated. 34

Modifier Issues Follow Medicare s guidelines-up to four Examples of how modifiers may be assigned Discuss multiple surgical procedures & bilateral procedures Affect on payment Hospital modifiers LT & RT not applicable for PAYMENT issues but specificity; other modifiers affect payment, i.e. procedure cancelled PRIOR 73 - or AFTER anesthetic - 74 35

Poll Question #3 Are you currently billing with HCPCS and modifiers for most services? Webinar Participants: Please respond by clicking on the POLL BUTTON on your PC 36

Unit Issues Follow Medicare s guidelines Units should be 1 or greater, if appropriate Outpatient Surgery: unit typically will be one, not the timed units Units affect payments 37

Status Indicator (SI) Issues Follow Medicare s guidelines Examples of different levels and meanings Medicare s Status Indicators 38

Medicare SI; Addendum D1 A B C D E F Fee Schedule, i.e. Lab, PT Not paid by OPPS; May be paid with different Bill Type (CORF 75x); alternate code may be available Inpatient procedure; admit patient Discontinued code; not paid Not paid under OPPS; an alternate code may be available Not paid OPPS; paid at reasonable cost; corneal tissue acquisition, some CRNA, Hepatitis B Vaccine 39

Medicare SI; Addendum D1 G H K L M Pass-Thru Drugs & Biologicals; separate APC payment includes pass through amounts Pass-through devices categories, brachytherapy, radiopharmaceutical agents - Cost-based payment Pass-Thru Drugs & Biologicals; separate APC payment Influenza vaccine; pneumonia vaccine; paid at reasonable cost Items & services not billable; no payment 40

Medicare SI; Addendum D1 N P Q S T V Items & services packaged into APC rates; no separate payment Partial hospitalization; paid OPPS; per diem APC payment APC payment if criteria met Significant procedure; not discounted if multiple; separate APC payment Significant procedure; discounted if multiple; separate APC payment Clinic or emergency department visit; separate APC payment 41

Medicare SI; Addendum D1 Y X Non-implantable durable medical equipment; not paid OPPS Ancillary services; separate APC payment 42

Wrap-around around Codes Due to differences in the populations served, there are some coverage differences between Medicare and Medicaid. Such as Medicaid covers an obstetrical lab panel; code 80055 Covered Services using MDCH current policy such as: Well Visits, Vaccinations, Family Planning, Ambulance, Dialysis These codes are subject to change. 43

Medicaid s s OPPS Medicare s OCE & CCI edits are the same as what Medicaid will follow OCE edits will set at the claim and/or line level and will be cross walked to current MDCH proprietary edits. Other current MDCH proprietary edits (eligibility, provider, other program coverage edits) will still apply. Follow the Medicare Inpatient Only list Follow Medicare s repetitive billing guidelines Follow Medicare s outlier payment calculation Observation: check Medicaid s web site 44

MDCH Payment Calculation MDCH Payment Calculation MDCH will not use Medicare wage indices. A factor of 1.0 will be applied for all providers. MDCH will use Medicare APC Weights. Payments made under the OPPS methodology will be calculated utilizing the current Medicare conversion factors/rates with a MDCH reduction factor applied to the calculated payment. (Medicare fee x reduction factor = Medicaid fee). The reduction factor will not be applied to outlier payments, Wrap-around codes, and any service paid a percent of charge. 45

Outpatient Services Paid Differently (Non APC) Therapy (physical, occupational, speech) Laboratory Dialysis Ambulance Wrap-around codes 46

Other Information When sending claim, itemize/code as if sending claim to Medicare; use modifiers, condition, occurrence, and value codes as appropriate Visit Medicaid web site in the future http://michigan.gov/mdch/0,1607,7-132- 2945_5100-130286--,00.html Or go to www.michigan.gov/mdch. Then click on PROVIDERS. Click on INFORMATION FOR MEDICAID PROVIDERS. Click on link for OPPS PROJECT. 47

Medicare/Medicaid Cross-over over Claims Medicaid s policy is that it follows the rules of the primary payer. One of the objectives of the MDCH OPPS is to facilitate coordination of benefits and prepare for cross-over claims. If you have questions, see the Medicaid Manual, Coordination of Benefits (COB) chapter. 48

B2B Testing Providers can submit OPH test files to MDCH Providers receive an 835/RA with FFS pricing and also 835/RA with OPPS/APC pricing See website for detailed B2B test instructions MDCH will choose providers for Pilot Project if B2B test has been successfully submitted 49

Poll Question #4 Have you submitted an OPPS B2B test file? If no, do you plan to do so? Webinar Participants: Please respond by clicking on the POLL BUTTON on your PC 50

Claim Billing Examples Discuss multiple procedures in the ER, Clinic, GI Lab, Heart Cath, or Surgery (Revenue Code 0360) Unit issues Where dollar amounts should be for multiple procedures Claim will be paid by the HCPCS/APC regardless of where dollars are Explain examples 51

See Claim Example 52

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Summary of Project URL: http://michigan.gov/mdch/0,1607,7-132- 2945_5100-130286--,00.html Final Policy Consultation Summary Wrap around codes FAQs Medicare's Status Indicators Medicare's Series Billing Instructions B2B Testing Other Project Info 60

Summary Effective 4/1/2007 Get familiar with information on the Medicaid web site Prepare now; Study the chargemaster at your provider site, whether you are a hospital-based ambulance, a DMERC, a CORF, a hospital, etc. What services are commonly provided in Outpatient Surgery, ED, Clinics? Review your current UB forms: are all codes being reported? 61

Poll Question #5 Have you started doing something within your organization to get ready for the Medicaid transition to APCs? Webinar Participants: Please respond by clicking on the POLL BUTTON on your PC 62

Prepare Now: All PT 40s Great need for accurate coding and updated systems complex task Update systems; Interface issues Educate staff; write policies/procedures Develop criteria so your staff know what E&M (Evaluation and Management) level should be assigned for ER & Clinics Procedure coding in addition to E&M coding (i.e. sutures, incision & drainage, applying cast) When Modifier 25 needed on E&M 63

Prepare Now-All PT 40s; Cont. Audit to assure accuracy Review your costs Review how much Medicare pays for particular services Review examples of claims CAHs: Possibly have HIM coders assign codes (expensive, difficult to find trained coders) 64

Recommendations for Chargemaster Team: The team may be you HCPCS coding errors System interface issues: incorrect payments Operational issues Time consuming reconciliation process Clinical outpatient documentation: typically needs improvement missing legibility not there! 65

Recommendations for CDM Team, Continued: Outpatient Code Editor (OCE) ensures correct payments, identifies errors/assigns APCs Updated quarterly Example: 57295 Change vaginal graft: procedure may only be paid if performed on a female patient Edits for accuracy, assigns SIs, determines bundling/ packaging and disposition, computes discounts/outliers and adjustment 66

Recommendations for CDM Team: Edits, Continued: Correct Coding Initiatives (CCI) Edits National Coverage Determination (NCDs) Local Coverage Determination (LCDs) Medical necessity edits 67

More Recommendations for CDM Team, Continued: Late charge issues Outpatient revenue cycle and lack of understanding by clinicians/clerical Keeping up with Medicare & Medicaid updates/transmittals Outdated CDM (charge description master) Compliance OIG Work Plan www.oig.hhs.gov/publications/docs/workplan/200 6/WorkPlanFY2006.pdf 68

UB 04 & NPI Issues UB-04 allowed 3/1/07 & mandated 5/23/07; to mirror with NPI date >>Providers>National Provider ID (NPI) UB-04 Manual available: American Hospital Association,National Uniform Billing Committee, P.O. Box 92247, Chicago, IL 60675-2247 69

Where to Get More Information - Resources NUBC UB Manual: www.nubc.org American Hospital Association,National Uniform Billing Committee, P.O. Box 92247, Chicago, IL 60675-2247 UB-92 Handbook for Hospital Billing and/or UB-04 Handbook for Hospital Billing: www.aha.org Go to bottom of page, click on AHA ONLINE STORE. Go to SEARCH box & type BIRKENSHAW or BILLING 70

Other Resources: Follow Medicare s repetitive billing guidelines: http://www.cms.hhs.gov/mlnmatter sarticles/downloads/mm4047.pdf URL for Zipped File Addendum B: http://www.cms.hhs.gov/hospitaloutpa tientpps/au/list.asp 71

Other Resources: OIG Workplan: www.oig.hhs.gov/publications/docs/wor kplan/2006/workplanfy2006.pdf Implementation Guides 837/835 (4010-I): www.wpc-edi.com 72

Resources; Continued Ingenix: UB-92 Bill Editor: www.igenixonline.com 800-464-3649 Ingenix Outpatient Billing Expert - A Complete Guide to APC and ASC daily billing requirements Coding with Modifiers: A Guide to Correct cpt and HCPCS Level II Modifier Usage; American Medical Association 73

Where to Get More Information We encourage you & your staff to become familiar with OPPS. You are also able to access this seminar after-the-fact 74

Where to Get More Information Email: APC WorkGroup: APCProject@michigan.gov Contact Claudia Birkenshaw: claudia300@charter.net or 810 394 2777 75

Questions We re taking a five-minute break to set up a Q & A panel. If you have questions and if you re participating via your PC, click on the QUESTION BOX. Please also take a few minutes to respond to the on-line survey. 76