2016 outpatient prospective payment system (opps) cms final … · 2016-05-04 · • in the cy...

CONFIDENTIAL AND PROPRIETARY

©2016 Xtend Healthcare, LLC. All rights reserved.All registered trademarks are the property of theirrespective owners.

Xtend Healthcare AdvancedRevenueSolutions

2016 Outpatient Prospective

Payment System (OPPS)

CMS Final Rule

Linda Corley, MBA, CRCR, CPCVice President – Compliance, Quality

Assurance and Associate Development

706 577-2256

[email protected]

mailto:[email protected]

2Proprietary and Confidential. © 2015 Xtend Healthcare, LLC. All rights reserved. All registered trademarks are the property of their respective owners

CY 2016 OPPS Final Rule

Topics for Discussion

• OPPS reimbursement changes for 2016

• First year of APC “decrease” in Conversion Factor

• Why 2015 Lab test packaging led to 2 percent reduction for 2016

• Restructuring and new definitions of APCs, including new

Comprehensive APC designations

• New Observation C-APC to replace APC for extended

assessment and management

• New criteria and payment for Chronic Care Management

services

• Medicare IPPS: 2 Midnights, Short Stays, RAC Reform



• What year did OPPS begin?

• What does “prospective” payment mean?

• What type of bill is used for submitting claims to Medicare?

• What code on the claim determines the payment(s)?

• Can more than one code be reimbursed on the same claim?

• Categories of services are grouped by similar clinical

requirements and resources used – the categories are called?

• What’s a “status indicator” and why is it important?

• Name several Medicare “edit” systems that are used to

determine appropriate payment for outpatient claims.

• What is your clean-claim rate for Medicare claims?

• Who in your facility is responsible for correcting Medicare

claims edits and/or errors prior to submission?



• Overall OPPS payments are estimated to decrease by -0.1

percent for CY 2016.

• The decrease is based on the projected hospital market

basket increase of 2.7 percent

– minus both a 0.6 percentage point adjustment for multi-

factor productivity, and

– a 0.2 percentage point adjustment required by law under

the ACA.

– There is an additional 2.0 percentage point adjustment to

account for the excess packaged payment for Laboratory

tests during 2015. (To reduce future overpayments!)

• The 3,800 hospitals in the U.S. are estimated to receive $43

million less in Outpatient PPS payments compared to 2015.



• We (CMS) are proposing to continue to implement the

statutory 2.0 percentage point reduction in payments for

hospitals failing to meet the hospital outpatient quality

reporting requirements,

• by applying a proposed reporting factor of 0.980 to the

OPPS payments and copayments for all applicable services.

• What does slight decrease in Outpatient payment mean to

you?

Must increase accurate Rev Cycle procedures (PAS,

Patient Care Management, clinical charge capture, HIM,

PFS) to offset rising costs!



2016 OPPS Conversion Factor Update

APC is assigned calculated weight based on claim charges

reduced to resource estimated cost and multiplied by annual

conversion factor

2015 Conversion factor $74.173

After 2016 Pass-Through Adjustment $74.084

After 2016 Wage Index Budget Neutrality Adj. $74.031

Apply 2016 +1.9% Scheduled Payment Update $75.438

Apply 2016 -2.0% Inflated Lab Payments $73.929

Reimbursement reduction from 2015 to 2016 ($.144)

-0.1%



More, More, More Packaging!

• For CY 2015, CMS conditionally packaged all ancillary services assigned to APCs with a geometric mean cost of $100 or less prior to packaging as a criterion to establish an initial set of conditionally packaged ancillary service APCs.

• When these ancillary services are furnished by themselves, Medicare will make separate payment for these services.

• Exceptions to the ancillary services packaging policy include preventive services, psychiatry-related services, and drug administration services.



2016 Ancillary Services to be Packaged

2016 2015

APC Policy Change Expand to package Conditionally package

APCs with geometric only ancillary APCs with

mean costs > $100 geometric mean costs

≤ $100

Services Packaged Add 3 APCs: Level Primarily low-dollar

4 minor procedures diagnostic tests and

(Q1), Level 3 and procedures often

Level 4 Pathology performed with a

tests (Q2) primary service

Exclusions Preventive services, certain psychiatric and

counseling-related services, and certain low-cost

drug administration services



Packaging expanded to four (4) more Drugs

2016 2015

• Policy Add 4 drugs to the Unconditionally

policy of uncondi- package all drugs and

tionally packaged biologicals that function

drugs and biologicals as supplies of a surgical

-- 2 drugs primarily procedure, including

used in PCI procedure certain implantable

--1 in glaucoma surgery medical devices, drugs,

--1 in cataract surgery biologicals, or

J0583, Injection, bivalirudin, 1 mg radiopharmaceuticalsJ7315, Mitomycin, ophthalmic, 0.2 mg

J0130, Injection, abciximab, 10 mg



• For CY 2016, we (CMS) are proposing to conditionally

package Laboratory tests (regardless of the date of service) on

a claim with a service that is assigned status indicator “S”

(Significant), “T” (Surgical), or “V” (Visit)

• unless an exception applies or the Laboratory test is

“unrelated” to the other HOPD service or services on the

claim. (Note: 2016 is for “Claim” instead of specific “DOS”!)

• A new status indicator “Q4” has been established for this

purpose.

• When Laboratory tests are the only services on the claim, a

separate payment at CLFS payment rates will be made.

• The “L1”modifier will still be used for “unrelated” laboratory

tests.



• In the CY 2014 OPPS final rule, CMS adopted a

Comprehensive APC (C-APC) payment policy.

• A C-APC is an APC with a high cost primary service (generally

includes the implantation of a device) that accounts for a higher

percentage of the total costs of the hospital encounter.

• Under the CY 2014 policy, CMS created (what are now) 25 C-

APCs for which payment for the comprehensive service

(primary service and all related items and services) was

packaged into a single payment under the OPPS.

• C-APC is comparable to the single payment made under the

Inpatient PPS for a hospital stay – DRG.

• CMS, however, delayed implementation of this policy to CY

2015 to provide the agency and hospitals with more time to

evaluate and comment further on the policy.



• Per CMS, “this 2016 Final Rule furthers the agency’s goal of

medical delivery system reform by moving the OPPS toward

making payments for larger packages of items and services

rather than making separate payments for each individual

service.”

• Per CMS, “this APC reform provides incentives for facilities to

deliver more efficient, higher quality care.”

• The new Comprehensive-APC (C-APC) payment policy makes

a single payment for all related or adjunctive hospital items and

services provided to a patient receiving certain primary

procedures that are either largely device dependent, such as

insertion of a pacemaker, or represent single session services

with multiple components, such as the eye procedure,

intraocular telescope implantation.



Comprehensive APCs (C-APCs):

• These identified primary services will receive separate

payment, while other services reported on the same claim

will be packaged, with some minor exceptions.

• The CPT codes that are part of the C-APC logic are

assigned status indicator J1, and when a J1 service is

reported on a claim, CMS will pay for it as a “package.”

• CMS will consider most other items and services on the

claim adjunctive, supportive, related, or dependent.

• These items and services will be packaged in 2016, even

though they generated separate payment in 2015.



High Complexity Services

• CMS finalized a policy to recognize more complex cases

and to pay for them accordingly using a complexity

adjustment, such as when two J1 procedures

are reported on the same claim.

• When the facility reports one of these

combinations, CMS will increase the payable

APC to the next higher APC in the clinical

group, similar to DRGs on the Inpatient side.

• Services that are statutorily excluded from

the OPPS, pass-through drugs and devices,

and self-administered drugs will be excluded

from packaging.

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• These complexity adjustments (modifying the higher

payment criteria for certain costly and frequent procedure

combinations) are the good news in the continuing

“bundling” or packaging of payments.

• Note: The CPT-4 and HCPCS Level II codes billed on the

claim determine payment!

• Audit, Audit, Audit claims to optimize charge capture and

correct coding.

• ANALYZE high dollar outpatient services claims

to ensure OPTIMUM payment is being received!

• Don’t allow Medicare billers to remove codes when a system

or billing edit errors out a charge!



Re-organization of APC “clinical families":

• After comprehensive review, CMS proposed to “restructure,

reorganize and consolidate many APCs, resulting in fewer

APCs overall for nine (9) clinical families”:

– Airway endoscopy

– Diagnostic tests and related services

– Excision / biopsy and incision / drainage procedures

– Gastrointestinal procedures

– Imaging services

– Orthopedic procedures

– Skin procedures

– Urology and related services procedures

– Vascular procedures (excluding endovascular procedures)

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Major Consolidation / Restructuring Nine APC Clinical Families

Number of APCs

Clinical Families 2016 2015 Reduced

Airway Endoscopy Procedures 5 7 2

Diagnostic Tests and Related Services 4 19 15

Excision / Biopsy and Incision /

Drainage Procedures 4 7 3

Gastrointestinal (GI) Procedures 13 23 10

Imaging Services 25 54 29

Orthopedic Procedures 9 24 15

Skin Procedures 5 8 3

Urology / Related Services Proc. 7 16 9

Vascular Proc. (Exclu. Endovascular) 3 7 4



2016 Comprehensive APCs

• Added ten (10) new C-APCs

• Including some surgical APCs

• Also new C-APC for “Comprehensive Observation Services”

that will include all primary procedures found on the claim

• In addition, CMS proposed to collect data through the use of a

HCPCS modifier (CP) on all services related to a C-APC

primary procedure that are reported on a separate

claim.

• However, finalized only Stereotactic Radio Surgery (SRS)

services for CP Modifier use!

• The purpose of this data collection is to assess the costs of all

adjunctive services related to C-APC services, even when

they are reported separately.



Comprehensive APCs

• CMS will require modifier -CP for related SRS services

• Modifier CP = “Adjunctive service related to a procedure

assigned to a C-APC, but reported on a different claim.”

• HCPCS codes 77371 and 77372 are the SRS CPT-4 codes.

• CP Modifier reported with any adjunctive services billed on a

separate claim within 30 days prior to SRS treatment.

• We can expect more details on the use of this Modifier through

sub-regulatory guidance that CMS intends to release before

January 1, 2016.

• The fact that modifier -CP is only being applied to SRS is a big

win for now, but providers will still have to determine how they

will operationalize this modifier for SRS this year and probably

all C-APCs in the future.


2016 Comprehensive APCs

C-APC for Observation Stays

2016 2015

APC APC 8011 – Compre- APC 8009 – Extended

hensive Observation Assessment and

Services Management Services

Payment $2,261 $1,234

Criteria Revised for 2016:

• No surgical procedure (SI = T) on the same day or

one (1) day prior, or J1 C-APC

• 8 or more units of G0378 (OBS services, per hour)

• OBS services in conjunction with any ED visit

level (change from only high level ED visits),

clinic visit level, or direct referral to OBS



National Electrical Manufacturers Association (NEMA)

Standard XR-29-2013

• Reduces payment for the technical component (TC) (and the

TC of the global fee) under the MPFS and the OPPS –

• 5 percent in 2016 and 15 percent in 2017 and subsequent years

• for applicable computed tomography (CT) services . . .

• identified by certain CPT / HCPCS codes furnished using

equipment that does not meet each of the attributes of the

entitled “Standard Attributes on CT Equipment Related to

Dose Optimization and Management.”



National Electrical Manufacturers Association (NEMA)

Standard XR-29-2013

• The provision requires that information be provided and

attested to by a supplier and a hospital outpatient department

that indicates whether an applicable CT service was furnished

that was not consistent with the NEMA CT equipment

standard.

• To implement this provision, we (CMS) finalized a new

modifier that would be reported with specific CPT codes,

effective January 1, 2016.

• Modifier



New P Codes for Pathogen-Reduced Blood Products

• For CY 2016, the Healthcare Common Procedure Coding

System (HCPCS) Workgroup created three new codes for

pathogen-reduced blood products.

• P9070 – Plasma, pooled multiple donor, pathogen reduced,

frozen, each unit

– Payment $73.08

• P9071 – Plasma (single donor), pathogen reduced, frozen, each

unit

-- Payment $72.56

• P9072 – Platelets, pheresis pathogen reduced

-- Payment $641.85



Hospital Outpatient Visits Assigned to a New APC

• In CY2016, hospital Clinic visits will be paid under APC

5012 – Level 2 Examinations and Related Services

• HCPCS code G0463 utilized for all hospital Clinic visits

• 2016 – G0463 assigned to APC 0632 for Level 2 Examinations

and Related Services;

2016 Payment = $102.19

• 2015 – G0463 assigned to APC 0634 for Hospital Clinic Visits

2015 Payment = $96.22

• Renumbered APC 0632 as APC 5012

• Caution: Continue to charge Clinic Level visits 1 – 5

depending upon acuity of patient and cost of services provided!

(99201 – 99205; 99211 – 99215)



Lung Cancer Screening

• CMS released HCPCS codes

• G0296 – Counseling visit to discuss need for lung cancer

screening using low-dose CT scan, and

• G0297 – Low-dose CT scan for lung cancer screening

• Effective for charging and billing January 1, 2016.

• Long-awaited codes, and it’s good to see the rule specify that

the effective date for these codes goes back to the NCD

effective date of February 5, 2015.

• Unfortunately, CMS did not extend the timely filing date

for these claims, so providers will need to prepare and

submit claims for payment as soon as possible after

January 1.



Clinical Service Recommendation

• Many Medicare beneficiaries are unaware of preventive

services available to them – particularly first year benes.

• Educate physicians on what tests are considered

“preventive” and the diagnoses that support them.

• “Welcome to Medicare” exams are screenings that must be

completed within the first year of coverage.

– 10,000 seniors turning 65 each day!

• Create a checklist in your EMR that alerts physicians and

nurses to when a preventive service is due to be repeated for

a Medicare patient.

• Example: Colonoscopy.



Changes to the Two Midnight Rule:

• Physician expects stay to be less than two midnights:

– Admission payable on a case-by-case basis based on the

clinical judgment of the admitting physician.

– Documentation in the medical record must support an

inpatient admission is necessary, and is subject to medical

review.

– The following factors (among others) will be relevant:

• The severity of the signs and symptoms exhibited by the patient.

• The medical predictability of adverse occurrence to the patient.

• The need for diagnostic studies that are more appropriately

Outpatient services (i.e., do not ordinarily require the patient to

remain at the hospital for 24 hours or more).


2016 OPPS Proposed Rule

RAC “Short Stay” Moratorium Ending

• Ended September 30, 2015

– After this date, RAC will focus on referrals from QIOs

and hospitals with high denial rates



Inpatient Reviews for Medical Necessity will be carried out by

QIOs

• CMS expressed confidence in Quality Improvement

Organizations (QIOs) reviews instead of the RACs

• Not all stays of less than 2 midnights will be audited

• QIOs to review sample of post-payment claims and

determine appropriateness of inpatient admission

– Stays less than 1midnight prioritized for medical review

– If sample shows problems, review will be expanded

– Review process to begin 10/01/15, but review regulation changes

effective 01/01/16



The QIO may be authorized to refer a provider to the RAC

if:

• Pattern of practices are uncovered such as:

– High inpatient stay denial rates

– Consistent failure to appropriately follow 2 Midnight Rule

– Failure to improve after educational interventions

• Caution – follow your resolution of Medicare Additional

Development Requests (ADRs) for inpatient stays to

determine if they are being paid by MAC

• May want to hold Inpatient stays of less than 2 Midnights

for clinical review of documented medical criteria before

filing claim



Recovery Auditor Contractor (RAC) Reforms:

• For upcoming contract award period . . .

• “Look back period” for patient status reviews:

6 months from date of service,

if hospital submits claim within 3 months of DOS provided

• Changes in ADR limits: compliance with Medicare rules;

diversified limits across all types of claims for a certain provider

• RAC has 30 days to complete Complex Review, or lose

contingency fee

• There will also be a 30 day wait before sending claims to the

MAC to allow for discussion period request to the RAC.



Note:

• All “add-on” CPT-4 codes are now packaged.

• Example is:

• CPT-4 Code 19125 Excision breast lesion T APC 5091 29.2241 $2,233.79

CPT-4 Code 19126 Exc. add’l breast lesion N

• Have a status indicator of “N” for Incidental.

• Continue to charge and code “add-on” services to ensure your claim accurately represents the cost of resources required to care for the patient.

• These codes will process on the claim, but will not return a separate payment.



• CMS finalized its proposal that for a hospital to receive an

outlier payment under the OPPS, the cost of a service must

exceed the multiple threshold of 1.75 times the APC payment

rate and exceed the CY 2015 fixed dollar threshold of the

APC payment plus $3,250 – up from $2,775.

• CMS estimates that these thresholds would target an

estimated 1 percent of total OPPS spending in outlier

payments.



• CMS will continue paying average sales price (ASP) + 6

percent for non-pass-through drugs and biologicals that

are payable separately under the OPPS.

• CMS states that it consider all items related to the

surgical outcome and provided during the hospital stay

in which the surgery is performed, including post-

surgical pain management drugs, to be part of the

surgery for purposes of the Medicare drug and

biological surgical supply packaging policy.



• CMS finalized that their pass-through payment amount

would be equal to ASP+6 percent for CY 2016 because,

• if not on pass-through status, payment for these products

would be packaged into the associated procedure.

• The 22 drugs and biologicals that CMS proposed, would

continue to have pass-through payment status for CY

2016 or would have been granted pass-through payment

status as of January 2016.



• Recommendations:

• Develop an “edit” specialist!

– Understand how the APC Status Indicators should be

applied to your claims, and audit to determine

appropriate payment.

– “Edit” corrections must not only follow the specific

code pair corrections for appropriate billing – the

corrections must select the highest paying (compliant)

CPT-4 or HCPCS Level II codes for accurate

reimbursement.

• Evaluate payment received based on each line item charge

on the claim.

• Train, train, train . . . Billers / Collectors, Nurse Auditors



Thank you for your attention today!

Questions:

Linda Corley

VP of Compliance and Quality Assurance

Xtend Healthcare

706 577-2256

[email protected]

mailto:[email protected]

2016 outpatient prospective payment system (opps) cms final … · 2016-05-04 · • in the cy...

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