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The OPPS Final Rule encompasses a wide variety of subjects while providing a roadmap of issues CMS will be monitoring in 2018.

The examination copy of the Outpatient Prospective Payment System (OPPS) update in the latest edition of the Federal Register is 1,133 pages long! This will translate into about 500 pages in the regular Federal Register format. The official document is scheduled for publication on Nov. 13, 2017.

Note that this Federal Register entry addresses both hospital outpatient and ambulatory surgical centers (ASCs), along with quality reporting issues. Payment and various policy decisions are discussed at some length. The Centers for Medicare & Medicaid Services (CMS) also addresses various comments made relative to the proposed changes for the 2018 calendar year.

OPPS Payment Updates

Each year the relative values and the conversion factor (CF) are determined. Challenges with cost-to-charge ratios (CCRs) are addressed, along with the fundamental problem with APCs: namely, the fact that only claims that map to a single APC can be used to determine relative values. There are typical discussions involving blood and blood products, along with CMS’s excuse addressing brachytherapy with a mini-APC system as opposed to a true pass-through basis. APC payments are being increased by 1.35 percent while ASC payments are being increased by 1.2 percent. The dual threshold cost outlier formula also has been updated.

APC Policy Updates

There is a long list of both group updates and specific updates. You will need to look through several pages to determine areas of interest. The two-time rules for identification of too much statistical variation is discussed. Of general interest are issues such as care management coding (APCS 5821 and 5822), cardiac telemetry (APC 5721), and the musculoskeletal series (APC 5111-5006). These are only three of dozens of discussions, so you should look down the list carefully to see what is of interest for your practice.

Skin Substitutes

CMS is currently studying the area of packaged skin substitutes. A high-cost group is being identified as one that exceeds either the MUC (geometric mean unit cost) or the APC (per day cost). For those involved with these types of products, separate payment versus packaging can create different payment levels.

OPPS Payment for Devices

Proper payment for devices and device-dependent APCs is of great importance. This is part of the reason the cost-reporting process has been changed over the past several years in order to correct inappropriate continuity of care records (CCRs) relative to devices and other implants. Basically, CMS does not like to pay separately on a pass-through basis; it prefers to package such payments. This preference is readily discernible in CMS’s discussion.

Supervision of Hospital Outpatient Therapeutic Services

In 2009 and 2010, there was a great deal of discussion relative to physician supervision. While many would claim that this was a policy change on the part of CMS (that is, that all hospital outpatient therapeutic services require physician supervision), CMS has maintained that it was only a clarification, not a change. For CAHs (critical access hospitals) and small rural hospitals, this policy conflicts with certain other policies, namely the Conditions of Participation (CoPs). While CMS is not changing the policy for CAHs and small rural hospitals, it is extending the non-enforcement of the supervisory policies for 2108 and 2019.

340B Drug Pricing

CMS is finally addressing the 340B drug process. This intervention is mainly taking place through the payment process. Note that rural SCH (sole community hospitals), children’s hospitals, and Prospective Payment System- (PPS)-exempt cancer hospitals are excluded from the payment adjustment. There will be modifiers put into place to differentiate the two situations. The rules and regulations regarding the 340B drug pricing program require significant study to make certain that compliance is being achieved.

Rural Adjustments and Cancer Hospital Adjustments

These continue unabated. SCHs and EACHs (essential access community hospitals) will see the 7.1 percent adjustment left in place and cancer hospitals will see their payment adjustments.

Inpatient-Only Listing

TKA (total knee arthroplasty) is being removed from the list, along with surgical prostatectomy. The TKA situation will require careful study and possible documentation changes that will establish medical necessity when the service is provided on an inpatient basis.

Comprehensive APCs

There are virtually no changes for any new comprehensive APCs for 2018, though this listing will undoubtedly be longer in the future.

Packaging Policies

CMS’s general approach in this area is to increase packaging, particularly for low-cost drug administration services. There are relatively extended discussions about packaging drug administration add-on codes. No changes are being made, but these will most likely be packaged in the future.

Hospital Outpatient Visits

Current coding and payment policies will continue with hospital clinic visits, ED visits, and critical care services. While many hospital chargemaster coordinators struggle with handling charges for clinic visits (i.e., E/M codes 99201-99215), payment is made through G0463. CMS no longer even defends the statistical variation in costs regarding G0463.

Provider-Based Clinics

The policy issue of how to treat expansion of services by excepted off-campus clinics is discussed, but the previously proposed identification of new service lines is not being implemented. The implementation of the searchable database, as required by Section 4011 of the 21st Century Cures Act, for price comparison between hospital outpatient surgeries and ASC surgeries is briefly discussed. The actual payment process for non-excepted off-campus provider-based clinics should be discussed in the MPFS (Medicare Physician Fee Schedule) edition of the Federal Register.

Quality Reporting

Both OPPS and ASC quality reporting are discussed at some length. These reporting programs require careful study each year. Changes are usually announced years in advance. For instance, OP-21, Median Time to Pain Management for Long Bone Fracture and OP-26, Hospital Outpatient Volume Data on Selected Outpatient Surgical Procedures, are being removed for 2020.

Needless to say, there is a great deal of material with a fairly broad range in this Federal Register edition. Determining what is of interest to you or to your specific situation is the first order of business. Just reading through the table of contents is challenging.

Program Note: Listen to Professor Duane Abbey discuss the 2018 OPPS final rule during the next edition of Monitor Mondays at 10-10:30 a.m. ET. Register now


Duane C. Abbey, PhD, CFP

Duane C. Abbey, PhD, CFP, is an educator, author, and management consultant working in the healthcare field. He is president of Abbey & Abbey Consultants, Inc., which specializes in healthcare consulting and related areas. His firm is based in Ames, Iowa. Dr. Abbey earned his graduate degrees at the University of Notre Dame and Iowa State University. Dr. Abbey is a member of the RACmonitor editorial board and is a frequent guest on Monitor Mondays.

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