3.0 POLICY
3.1 Basic
Methodology for Determining Prospective Payment Rates for Outpatient
Services
3.1.1 Setting of Payment Rates
The prospective payment rate
for each Ambulatory Payment Classification (APC) is calculated by
multiplying the APC’s relative weight by the conversion factor.
Medicare establishes the relative APC weights; these are updated
on a quarterly basis. See the Medicare Claims Processing Manual
(CPM), Chapter 4, Section 10.3 for a description of APC weights.
3.1.1.1 Revenue center changes that
contain items integral to performing the procedure or visit are
used to calculate the per-procedure or per-visit costs. Medicare
publishes a list of packaged revenue codes every year within the
Centers for Medicare and Medicaid Services (CMS) Outpatient Prospective
Payment System (OPPS) Final Rule. These rules are available here:
https://www.cms.gov/research-statistics-data-and-systems/files-for-order/limiteddatasets/HospitalOPPS.html.
3.1.1.1.1 Some instructions have been
issued that require that specific revenue codes be billed with certain Healthcare
Common Procedure Coding System (HCPCS) codes, such as specific revenue
codes that must be used when billing for devices that qualify for
pass-through payments.
Note: If the revenue code is not
listed, refer to the TRICARE Systems Manual (TSM),
Chapter 2, Addendum N, for reporting requirements.
3.1.1.1.2 The contractor shall, where
specific instructions have not been issued, advise hospitals to
report charges under the revenue code that would result in the charges
being assigned to the same cost center to which the cost of those
services were assigned in the cost report.
Example: Operating room, treatment room,
recovery, observation, medical and surgical supplies, pharmacy, anesthesia,
casts and splints, and donor tissue, bone, and organ charges were
used in calculating surgical procedure costs. The charges for items
such as medical and surgical supplies, drugs and observation were
used in estimating medical visit costs.
3.1.1.2 Costs are standardized for
geographic wage variation by dividing the labor-related portion
of the operating and capital costs for each billed item by the current
hospital Inpatient Prospective Payment System (IPPS) wage index.
Sixty percent (60%) is used to represent the estimated portion of
costs attributable, on average, to labor.
3.1.1.3 Standardized labor related
cost and the nonlabor-related cost component for each billed item
are summed to derive the total standardized cost for each procedure
or medical visit.
3.1.1.4 Each procedure or visit cost
is mapped to its assigned APC.
3.1.1.5 The median cost is calculated
for each APC.
3.1.1.6 Relative payment rates are
established by CMS, are utilized by DHA, and are listed on DHA’s
OPPS website at
http://www.health.mil/rates.
See the Medicare CPM, Chapter 4, Section 10.3 for more information
on how the rates are derived.
3.1.1.7 These relative payment weights
may be further adjusted for budget neutrality based on a comparison
of aggregate payments using previous and current Calendar Year (CY)
weights.
3.1.2 Conversion
Factor Update
3.1.2.1 The conversion factor is updated
annually by the hospital inpatient market basket percentage increase
applicable to hospital discharges.
3.1.2.2 The conversion factor is also
subject to adjustments for wage index budget neutrality, differences
in estimated pass-through payments, and outlier payments. The conversion
factor is published in the annual CMS OPPS Final Rule.
3.1.3 Payment Status Indicators (SIs)
A payment SI is provided for
every code in the HCPCS to identify how the service or procedure
described by the code would be paid under the hospital OPPS; i.e.,
it indicates if a service represented by a HCPCS code is payable under
the OPPS or another payment system, and also which particular OPPS
payment policies apply. One, and only one, SI is assigned to each
APC and to each HCPCS code. Each HCPCS code that is assigned to
an APC has the same SI as the APC to which it is assigned. The following
are the payment SIs and descriptions of the particular services each
indicator identifies:
3.1.3.1 A to indicate
services that are paid under some payment method other than OPPS,
such as the Durable Medical Equipment, Prosthetics, Orthotics, and
Supplies (DMEPOS) fee schedule, CHAMPUS Maximum Allowable Charge
(CMAC) reimbursement methodology for physicians, or State prevailings.
3.1.3.2 B to indicate
more appropriate code required for DHA OPPS.
3.1.3.3 C to indicate
inpatient services that are not paid under the OPPS.
3.1.3.4 E to indicate
items or services are not covered under the TRICARE Program for
items as services provided from May 1, 2009, through December 31,
2016.
3.1.3.5 E1 to indicate
items or services that are not covered under the TRICARE Program
for items or services provided on or after January 1, 2017.
3.1.3.6 F to indicate
acquisition of corneal tissue, which is paid on an allowable charge
basis (i.e., paid based on the CMAC reimbursement system or statewide
prevailings) and certain Certified Registered Nurse Anesthetist (CRNA)
services and hepatitis B vaccines that are paid on an allowable
charge basis.
3.1.3.7 G to indicate
drug/biological pass-through that are paid in separate APCs under
the OPPS.
3.1.3.8 H to indicate
pass-through device categories allowed on a cost basis.
3.1.3.9 J1 to indicate
Hospital Outpatient Department (HOPD) services paid through a comprehensive
APC.
3.1.3.10 J2 to
indicate HOPD services that may be paid through a comprehensive
APC.
3.1.3.11 K to indicate
non-pass-through drugs and non-implantable biologicals, including
therapeutic radiopharmaceuticals that are paid in separate APCs
under the OPPS.
3.1.3.12 N to indicate
services that are incidental, with payment packaged into another
service or APC group.
3.1.3.13 P to indicate
services that are paid only in Partial Hospitalization Programs
(PHPs).
3.1.3.14 Q to indicate
packaged services subject to separate payment under OPPS.
3.1.3.15 Q1 to indicate
packaged APC payment if billed on the same date of service as a
HCPCS code assigned SI of
S,
T,
V,
and
X.
In all other circumstances, payment is made through a separate APC
payment.
3.1.3.16 Q2 to indicate
APC payment if billed on the same date of service as a HCPCS code
assigned SI of T. In all other circumstances, payment
is made through a separate APC payment.
3.1.3.17 Q3 to indicate
composite APC payment based on OPPS composite specific payment criteria.
Payment is packaged into single payment for specific combinations
of service. In all circumstances, payment is made through a separate
APC payment for those services.
3.1.3.18 Q4 to indicate
conditionally packaged laboratory services.
Note: HCPCS codes with SI of Q are
either separately payable or packaged depending on the specific circumstances
of their billing. Outpatient Code Editor (OCE) claims processing
logic will be applied to codes assigned SI of Q in
order to determine if the service will be packaged or separately
payable.
3.1.3.19 R to indicate
separate APC payment for blood and blood products.
3.1.3.20 S to indicate
significant procedures for which payment is allowed under the hospital
OPPS, but to which the multiple procedure reduction does not apply.
3.1.3.21 T to indicate
surgical services for which payment is allowed under the hospital
OPPS. Services with this payment indicator are the only services
to which the multiple procedure payment reduction applies.
3.1.3.22 U to indicate
separate APC payment for brachytherapy sources.
3.1.3.23 V to indicate
medical visits (including clinic or Emergency Department (ED) visits)
for which payment is allowed under the hospital OPPS.
3.1.3.24 W to indicate
invalid HCPCS or invalid revenue code with blank HCPCS.
3.1.3.25 X to
indicate an ancillary service for which payment is allowed under
the hospital OPPS.
3.1.3.26 Z to indicate
valid revenue code with blank HCPCS and no other SI assigned.
3.1.3.27 TB to indicate
TRICARE reimbursement not allowed for Current Procedural Terminology
(CPT)/HCPCS code submitted.
Note: The system payment logic looks
to the SIs attached to the HCPCS codes and APCs for direction in
the processing of the claim. A SI, as well as an APC, must be assigned
so that payment can be made for the service identified by the new
code. The SIs identified for each HCPCS code and each APC and listed
on DHA’s OPPS website at
http://www.health.mil/rates.
3.1.4 Calculating DHA Payment Amount
3.1.4.1 The national APC payment rate
that is calculated for each APC group is the basis for determining
the total payment (subject to wage-index adjustment) the hospital
will receive from the beneficiary and the TRICARE program. (Refer
to DHA’s OPPS website at
http://www.health.mil/rates for
national APC payment rates.)
3.1.4.2 The DHA payment amount takes
into account the wage index adjustment and beneficiary deductible and
cost-share/copayment amounts.
3.1.4.3 The DHA payment amount calculated
for an APC group applies to all the services that are classified within
that APC group.
3.1.4.4 The DHA payment amount for
a specific service classified within an APC group under the OPPS
is calculated as follows:
3.1.4.4.1 Apply
the appropriate wage index adjustment to the national payment rate
that is set annually for each APC group. (Refer to the OPPS Provider
File with Wage Indexes on DHA’s OPPS home page at
http://www.health.mil/rates for
annual Diagnosis Related Group (DRG) wage indexes used in the payment
of hospital outpatient claims, effective January 1 of each year.)
3.1.4.4.2 Multiply
the wage-adjusted APC payment rate by the OPPS rural adjustment
(1.071) if the provider is a Sole Community Hospital (SCH) in a
rural area with 100 or more beds. Effective January 1, 2010, the
OPPS rural adjustment will apply to all SCHs in rural areas.
3.1.4.4.4 Subtract from the adjusted
APC payment rate the amount of any applicable deductible and/or cost-sharing/copayment
amounts based on the eligibility status of the beneficiary at the
time the outpatient services were rendered (i.e., those deductibles
and cost-sharing/copayment amounts applicable to the appropriate beneficiary
categories). Refer to
Chapter 2 for applicable
deductible and/or cost-sharing/copayment amounts.
3.1.4.5 Examples of payments under
OPPS based on eligibility status of beneficiary at the time the
services were rendered are below. Deductibles, cost-shares and copayments
examples are based on dates of service prior to January 1, 2018.
See
Chapter 2 for deductibles,
copayments, and cost-shares for dates of service on or after January 1,
2018:
|
Example 1:
|
Assume that the wage-adjusted
rate for an APC is $400; the beneficiary receiving the services
is an Active Duty Family Member (ADFM) enrolled under TRICARE Prime,
and as such, is not subject to any deductibles or copayments.
|
|
|
|
• Adjusted APC payment rate:
$400.
• Subtract any applicable deductible:
$400 - $0 = $400
• Subtract the TRICARE Prime
ADFM copayment from the adjusted APC payment rate less deductible
to calculate the final payment amount.
|
|
|
|
$400 - $0 = $400 final payment
|
|
|
|
• TRICARE would pay 100% of the
adjusted APC payment rate for ADFMs enrolled in TRICARE Prime.
|
|
|
|
Example 2:
|
Assume that the wage-adjusted
rate for an APC is $400 and the beneficiary receiving the outpatient services
is a TRICARE Prime retiree family member subject to a $12 copayment.
Deductibles are not applied under the TRICARE Prime program.
|
|
|
|
|
• Adjusted APC payment rate:
$400.
• Subtract any applicable deductible:
$400 - $0 = $400
|
|
|
|
|
$400 - $12 = $388 final payment
|
|
|
|
|
• Subtract the TRICARE Prime
retiree family member copayment from the adjusted APC payment rate
less deductible to calculate the final TRICARE payment amount.
• In this case, the beneficiary
pays zero ($0) deductible and a $12 copayment, and the program pays
$388 (i.e., the difference between the adjusted APC payment rate
and the TRICARE Prime retiree family member copayment).
|
|
|
|
Example 3:
|
This example illustrates a
case in which both an outpatient deductible and cost-share are applied. Assume
that the wage-adjusted payment rate for an APC is $400 and the beneficiary
receiving the outpatient services is a standard ADFM subject to
an individual $50 deductible (active duty sponsor is an E-3) and
20% cost-share.
|
|
|
|
|
• Adjusted APC payment rate:
$400.
• Subtract any applicable deductible:
$400 - $50 = $350
• Subtract the standard ADFM
cost-share (i.e., 20% of the allowable charge) from the adjusted
APC payment rate less deductible to calculate the final TRICARE
payment amount.
|
|
|
|
|
$350 x 0.20 = $70 cost-share
|
|
|
|
|
$350 - $70 = $280 TRICARE final
payment
|
|
|
|
|
• In this case, the beneficiary
pays a deductible of $50 and a $70 cost-share, and the program pays $280,
for total payment to the hospital of $400.
|
3.1.5 Adjustments
to APC Payment Amounts
3.1.5.1 Adjustment for Area Wage Differences
3.1.5.1.1 A wage adjustment factor will
be used to adjust the portion of the payment rate that is attributable to
labor-related costs for relative differences in labor and labor-related
costs across geographical regions with the exception of APCs with
SIs of G, H, K, R,
and U. The hospital DRG wage index will be used given
the inseparable, subordinate status of the outpatient department
within the hospital.
3.1.5.1.2 The OPPS will use the same
wage index changes as the TRICARE DRG-based payment system, except
the effective date for the changes will be January 1 of each year
instead of October 1 (refer to the OPPS Provider File with Wage
Indexes on DHA’s OPPS home page at
http://www.health.mil/rates.
3.1.5.1.3 The General and non-network
Temporary Military Contingency Payment Adjustments (TMCPAs) are not
wage-adjusted.
3.1.5.1.4 Sixty percent (60%) of the
hospital’s outpatient department costs are recognized as labor-related costs
that would be standardized for geographic wage differences. This
is a reasonable estimate of outpatient costs attributable to labor,
as it fell between the hospital DRG operating cost labor factor
of 71.1% and the Ambulatory Surgery Center (ASC) labor factor of
34.45%, and is close to the labor-related costs under the inpatient
DRG payment system attributed directly to wages, salaries and employee
benefits (61.4%).
3.1.5.1.5 Steps
in Applying Wage Adjustments under OPPS
3.1.5.1.5.1 Calculate
60% (the labor-related portion) of the national unadjusted payment
rate that represents the portion of costs attributable, on average,
to labor.
3.1.5.1.5.2 Determine
the wage index in which the hospital is located and identify the
wage index level that applies to the specific hospital.
3.1.5.1.5.3 Multiply
the applicable wage index determined under
paragraph 3.1.5.1.5.2 by the
amount under
paragraph 3.1.5.1.5.1 that represents the
labor-related portion of the national unadjusted payment rate.
3.1.5.1.5.4 Calculate
40% (the nonlabor-related portion) of the national unadjusted payment
rate and add that amount to the resulting product in
paragraph 3.1.5.1.5.3. The result is the wage
index adjusted payment rate for the relevant wage index area.
3.1.5.1.5.5 If a provider is a SCH in a
rural area, or is treated as being in a rural area, multiply the
wage-adjusted payment rate by 1.071 to calculate the total payment
before applying the deductible and copayment/cost-sharing amounts.
3.1.5.1.5.6 Applicable deductible and copayment/cost-sharing
amounts would then be subtracted from the wage-adjusted APC payment
rate, and the remainder would be the TRICARE payment amount for
the services or procedure. Deductibles, cost-shares and copayments
examples are based on dates of service prior to January 1, 2018.
See
Chapter 2 for deductibles,
copayments, and cost-shares for dates of service on or after January
1, 2018:
|
Example:
|
A surgical procedure with an
APC payment rate of $300 is performed in the outpatient department
of a hospital located in Heartland, USA. The cost-sharing amount
for the standard ADFM is $60.80 (i.e., 20% of the wage-adjusted
APC amount for the procedure). The hospital inpatient DRG wage index
value for hospitals located in Heartland, USA, is 1.0234. The labor-related
portion of the payment rate is $180 ($300 x 60%), and the nonlabor-related
portion of the payment rate is $120 ($300 x 40%). It is assumed
that the beneficiary deductible has been met.
|
|
|
|
|
Units billed x APC x 60% (labor
portion) x wage index (hospital specific) + APC x 40% (nonlabor portion)
= adjusted payment rate.
|
|
|
|
• Wage-Adjusted Payment Rate
(rounded to nearest cent)
|
|
|
|
= ($180 x 1.0234) = $184.21
+ $120 = $304.21
|
|
|
|
• Cost-share for standard ADFM
(rounded to nearest cent):
|
|
|
|
= ($304.21 x 0.20) = $60.84
|
|
|
|
• Subtract the standard ADFM
cost-share from the wage-adjusted rate to get the final TRICARE payment:
|
|
|
|
= ($304.21 - $60.84) = $243.37.
|
3.1.5.2
Discounting
of Surgical and Terminating Procedures
3.1.5.2.1 OPPS payment amounts are discounted
when more than one procedure is performed during a single operative
session or when a surgical procedure is terminated prior to completion.
Refer to
Chapter 1, Section 16 for additional guidelines
on discounting of surgical procedures.
3.1.5.2.1.1 Line items with a SI of T are
subject to multiple procedure discounting unless modifiers 76, 77, 78,
and/or 79 are present.
3.1.5.2.1.2 When more than one procedure
with payment SI of T is performed during a single operative session,
TRICARE will reimburse the full payment and the beneficiary will
pay the cost-share/copayment for the procedure having the highest
payment rate.
3.1.5.2.1.3 Fifty percent (50%) of the
usual OPPS payment amount and beneficiary copayment/cost-share amount
would be paid for all other procedures performed during the same
operative session to reflect the savings associated with having
to prepare the patient only once and the incremental costs associated
with anesthesia, operating and recovery room use, and other services
required for the second and subsequent procedures.
• The reduced payment would apply
only to the surgical procedure with the lower payment rate.
• The reduced payment for multiple
procedures would apply to both the beneficiary copayment/cost-share
and the TRICARE payment.
3.1.5.2.2 Hospitals are required to use
modifiers on bills to indicate procedures that are terminated before completion.
3.1.5.2.2.1 Fifty percent (50%) of the
usual OPPS payment amount and beneficiary copayment/cost-share will
be paid for a procedure terminated before anesthesia is induced.
• Modifier -73 (Discontinued
Outpatient Procedure Prior to Anesthesia Administration) would identify
a procedure that is terminated after the patient has been prepared
for surgery, including sedation when provided, and taken to the
room where the procedure is to be performed, but before anesthesia
is induced (for example, local, regional block(s), or general anesthesia).
• Modifier -52 (Reduced
Services) would be used to indicate a procedure that did not require
anesthesia, but was terminated after the patient had been prepared
for the procedure, including sedation when provided, and taken to
the room where the procedure is to be performed.
3.1.5.2.2.2 Full payment will be received
for a procedure that was started but discontinued after the induction
of anesthesia, or after the procedure was started.
• Modifier -74 (Discontinued
Procedure) would be used to indicate that a surgical procedure was
started but discontinued after the induction of anesthesia (for
example, local, regional block, or general anesthesia), or after
the procedure was started (incision made, intubation begun, scope
inserted) due to extenuating circumstances or circumstances that
threatened the well-being of the patient.
• This payment would recognize
the costs incurred by the hospital to prepare the patient for surgery
and the resources expended in the operating room and recovery room
of the hospital.
3.1.5.3
Discounting
for Bilateral Procedures
3.1.5.3.1 Following are the different
categories/classifications of bilateral procedure:
3.1.5.3.1.1 Conditional bilateral (i.e.,
procedure is considered bilateral if the modifier 50 is
present).
3.1.5.3.1.2 Inherent bilateral (i.e., procedure
in and of itself is bilateral).
3.1.5.3.1.3 Independent bilateral (i.e.,
procedure is considered bilateral if the modifier 50 is
present, but full payment should be made for each procedure (e.g.,
certain radiological procedures)).
3.1.5.3.2 Terminated bilateral procedures
or terminated procedures with units greater than one should not occur,
and for type T procedures, have the discounting factor
set so as to result in the equivalent of a single procedure. Line
items with terminated bilateral procedures or terminated procedure
with units greater than one are denied.
3.1.5.3.3 For non-type T procedures
there is no multiple procedure discounting and no bilateral procedure discounting
with modifier 50 performed. Line items with SI other
than T are subject to terminated procedure discounting
when modifier 52 or 73 is present. Modifier 52 or 73 on
a non-type T procedure line will result in a 50% discount being
applied to that line.
3.1.5.3.4 The discounting factor for
bilateral procedures is the same as the discounting factor for multiple type T procedures.
3.1.5.3.5 Inherent bilateral procedures
will be treated as a non-bilateral procedure since the bilateralism
of the procedure is encompassed in the code.
3.1.5.3.6 Following
are the different discount formulas that can be applied to a line
item:
Figure 13.3-1 Discounting
Formulas For Bilateral Procedures
|
Discounting Formula Number
|
Formulas
|
|
Where:
|
D = discounting fraction
(currently 0.5)
U = number of units
T = terminated procedure
discount (currently 0.5)
|
|
1
|
1.0
|
|
2
|
(1.0 + D (U - 1))/U
|
|
3
|
T/U
|
|
4
|
(1 + D)/U
|
|
5
|
D
|
|
8
|
2.0
|
|
9
|
2D
|
3.1.5.3.7 Figure 13.3-2 summarizes
the application of above discounting formulas:
Figure 13.3-2 Application
of Discounting Formulas
|
|
Discounting Formula Number
|
|
Type T Procedure
|
Non-type T Procedure
|
|
Payment
Amount
|
Modifier
52 or 73
|
Modifier
50**
|
Conditional Or Independent
Bilateral
|
Inherent or
Non-Bilateral
|
Conditional Or Independent
Bilateral
|
Inherent or
Non-Bilateral
|
|
For the purpose of determining
which APC has the highest payment amount, the terminated procedure
discount (T) any applicable offset, will be applied
prior to selecting the T procedure with the highest
payment amount. If both offset and terminated procedure discount apply,
the offset will be applied first before the terminated procedure
discount.
* If not terminated, non-type T Conditional
bilateral procedures with modifier 50 will be assigned
discount formula #8. Non-type T Independent bilateral
procedures with modifier 50 will be assigned to formula
#8.
** If modifier 50 is
present on a independent or conditional bilateral line that has
a composite APC or a separately paid STVX/T-packaged procedure,
the modifier is ignored in assigning the discount formula.
|
|
Highest
|
No
|
No
|
2
|
2
|
1
|
1
|
|
Highest
|
Yes
|
No
|
3
|
3
|
3
|
3
|
|
Highest
|
No
|
Yes
|
4
|
2
|
8*
|
1
|
|
Highest
|
Yes
|
Yes
|
3
|
3
|
3
|
3
|
|
Not Highest
|
No
|
No
|
5
|
5
|
1
|
1
|
|
Not Highest
|
Yes
|
No
|
3
|
3
|
3
|
3
|
|
Not Highest
|
No
|
Yes
|
9
|
5
|
8*
|
1
|
|
Not Highest
|
Yes
|
Yes
|
3
|
3
|
3
|
3
|
Note: For the purpose of determining
which APC has the highest payment amount, the terminated procedure discount
(T) will be applied prior to selecting the type T procedure
with the highest payment amount.
3.1.5.3.8 In those instances where more
than one bilateral procedure and they are medically necessary and appropriate,
hospitals are advised to report the procedure with a modifier -76 (repeat
procedure or service by same physician) in order for the claim to
process correctly.
3.1.5.4 Multiple discounting will not
be applied to the following CPT codes for venipuncture, fetal monitoring
and collection of blood specimens: 36400 - 36416, 36591, 36592,
59020, 59025, and 59050-59051.
3.1.5.5 Outlier
Payments
An additional
payment is provided for outpatient services for which a hospital’s
charges, adjusted to cost, exceed the sum of the wage-adjusted APC
rate plus a fixed dollar threshold and a fixed multiple of the wage-adjusted
APC rate. Only line item services with SIs of
J1,
J2,
P,
R,
S,
T,
V,
or
X will
be eligible for outlier payment under OPPS. No outlier payments
will be calculated for line item services with SIs of
G,
H,
K,
N,
and
U, with the exception of blood and blood products.
3.1.5.5.1 Outlier payments will be calculated
on a service-by-service basis. Calculating outliers on a service-by-service
basis was found to be the most appropriate way to calculate outliers
for outpatient services. Outliers on a bill basis requires both
the aggregation of costs and the aggregation of OPPS payments, thereby
introducing some degree of offset among services; that is, the aggregation
of low cost services and high cost services on a bill may result
in no outlier payment being made. While service-based outliers are
somewhat more complex to administer, under this method, outlier
payments will be more appropriately directed to those specific services
for which a hospital incurs significantly increased costs.
3.1.5.5.2 Outlier payments are intended
to ensure beneficiary access to services by having the TRICARE program
share the financial loss incurred by a provider associated with
individual, extraordinarily expensive cases.
3.1.5.5.3 Outlier thresholds are established
on a CY basis which requires that a hospital’s cost for a service exceed
the wage-adjusted APC payment rate for that service by a specified
multiple of the wage-adjusted APC payment rate and the sum of the
wage-adjusted APC rate plus a fixed dollar threshold ($1,800 for
CY 2009) in order to receive an additional outlier payment. When
the cost of a hospital outpatient service exceeds both of these thresholds
a predetermined percentage of the amount by which the cost of furnishing
the services exceeds the multiple APC threshold will be paid as
an outlier.
3.1.5.5.4 Outlier payments are not subject
to cost-sharing.
3.1.5.5.5 Temporary Transitional Payment
Adjustments (TTPAs) and TMCPAs shall not be included in cost outlier
calculations.
3.1.5.5.6 Example of outlier payment
calculation.
Example: Following
are the steps involved in determining if services on a claim qualify
for outlier payments using the appropriate CY multiple and fixed
dollar thresholds.
Step 1: Identify
all APCs on the claim.
Step 2: Determine
the ratio of each wage-adjusted APC payment to the total payment
of the claim (assume for this example a wage index of 1.0000).
|
CPT Code
|
SI
|
APC
|
Service
|
Wage-Adjusted APC Payment Rate
|
Ratio Of APC To Total Payment
|
|
99285
|
V
|
0616
|
Level 5 Emergency Visit
|
$315.51
|
0.5107157
|
|
70481
|
S
|
0283
|
CT scan with contrast material
|
$277.48
|
0.4491566
|
|
93041
|
S
|
0099
|
Electrocardiogram
|
$24.79
|
0.0401275
|
Step 3: Identify
billed charges of packaged items that need to be allocated to an
APC.
|
Revenue Code
|
OPPS Service or Supply
|
Total Charges
|
|
0250
|
Pharmacy
|
$3,435.50
|
|
0270
|
Medical Supplies
|
$4,255.80
|
|
0350
|
CT scan
|
$3,957.00
|
|
0450
|
Emergency Room
|
$2,986.00
|
|
0730
|
Electrocardiogram
|
$336.00
|
Step 4: Allocate
the billed charges of the packaged items identified in Step
3 to
their respective wage-adjusted APCs based on their percentages to
total payment calculated in Step
2.
|
APC
|
Ratio
Allocation
|
OPPS Service
|
250 (Pharmacy)
|
270 (Medical Supplies)
|
|
0616
|
0.5107157
|
Level 5 Emergency Visit
|
$1,754.56
|
$2,173.50
|
|
0283
|
0.4491566
|
CT scan with contrast material
|
$1,543.08
|
$1,911.52
|
|
0099
|
0.0401275
|
Electrocardiogram
|
$137.36
|
$170.77
|
Step 5: Calculate
the total charges for each OPPS service (APC) and reduce them to
costs by applying the statewide Cost-To-Charge (CCR). Statewide
CCRs are based on the geographical Core Based Statistical Area (CBSA)
(two digit = rural, five digit = urban). Assume that the outpatient
CCR is 31.4%.
|
APC
|
OPPS Service
|
Total Charges
|
Total Charges Reduced To Costs
(CCR = 0.3140)
|
|
0616
|
Level 5 Emergency Visit
|
$6,914.06
|
$2,170.01
|
|
0283
|
CT scan with contrast material
|
$7,411.60
|
$2,327.24
|
|
0099
|
Electrocardiogram
|
$644.63
|
$202.41
|
Step 6: Apply
the cost test to each wage-adjusted APC service or procedure to
determine if it qualifies for an outlier payment. If the cost of
a service (wage-adjusted APC) exceeds both the APC multiplier threshold
(1.75 times the wage-adjusted APC payment rate) and the fixed dollar
threshold (wage-adjusted APC rate plus $1,800), multiply the costs
in excess of the wage-adjusted APC multiplier by 50% to get the
additional outlier payment.
|
APC
|
Wage-Adjusted APC
Rate
|
Costs
|
Fixed
Dollar Threshold (Wage-Adjusted APC Rate + $1,800)
|
Multiplier Threshold
(1.75
x Wage Index APC Rate)
|
Costs
in Excess Of Multiplier Threshold
|
Outlier Payment Costs Of Wage-Adjusted
APC - (1.75 x Wage-Adjusted APC Rate) x 0.50
|
|
|
|
0616
|
$315.51
|
$2,170.01
|
$2,115.51
|
$552.14
|
$1,618.87
|
$808.43
|
|
0283
|
$277.48
|
$2,327.24
|
$2,077.48
|
$485.59
|
$1,841.65
|
$920.83
|
|
0099
|
$24.79
|
$202.41
|
$1,824.79
|
$43.38
|
$159.03
|
-0-*
|
The total outlier payment on
the claim was: $1,746.50.
3.1.5.6 Rural SCH payments will be
increased by 7.1%. This adjustment will apply to all services and procedures
paid under the OPPS (SIs of
J1,
J2,
P,
S,
T,
V,
and
X),
excluding drugs, biologicals and services paid under the pass-through
payment policy (SIs of
G and
H).
3.1.5.6.1 The adjustment amount will
not be reestablished on an annual basis, but may be reviewed in
the future, and if appropriate, may be revised.
3.1.5.6.2 The adjustment is budget neutral
and will be applied before calculating outliers and copayments/cost-sharing.
3.1.5.7 TMCPAs
Under the authority of the
last paragraph of
32 CFR 199.14(a)(6)(ii), the following OPPS
adjustments are authorized.
3.1.5.7.1
General
Temporary Military Contingency Payment Adjustment (GTMCPA) Payments
The Director, DHA, or designee
at any time after OPPS implementation, has the authority to adopt,
modify, and/or extend temporary adjustments for TRICARE network
hospitals located within Market/Military Medical Treatment Facility
(MTF) Prime Service Areas (PSAs) and deemed essential for military
readiness and support during contingency operations. The Director,
DHA, may approve a GTMCPA payment for hospitals that serve a disproportionate
share of Service members and Active Duty Dependents (ADDs). In order
for a hospital to be considered for a GTMCPA payment, the hospital’s
outpatient revenue received for services provided to TRICARE Service
members and ADDs must have been at least 10% of the hospital’s total
outpatient revenue received during the previous OPPS year (May 1
through April 30) or the number of OPPS visits by Service members
and ADDs during that same 12-month period must have been at least
50,000. Billed charges will not be used as the basis for determining
a hospital’s eligibility for a GTMCPA. If the hospital serves a
disproportionate share of TRICARE Service members and ADDs, and
is essential for network adequacy, the hospital may qualify for
a discretionary GTMCPA payment that results in a Payment-to-Cost
Ratio (PCR) not to exceed 1.3. The process for GTMCPA payments is
as follows:
• The number of OPPS visits by
Service members and ADDs during the previous OPPS year; i.e., May
1 through April 30.
• The Government Designated Authority
(GDA) shall request DHA Medical Benefits and Reimbursement Section (MB&RS)
run a query of claims history to determine if the network hospital
qualifies for a GTMCPA, i.e., the hospital’s payment-to-cost ratio
is less than 1.3 for care provided to Service members and ADDs during
the previous OPPS year (May 1 through April 30).
3.1.5.7.1.1 The
hospital may submit a request for a discretionary GTMCPA payment
to their Contractor. The request must be made to the contractor
within 12 months of the end of the OPPS year (May 1 through April
30) for which the hospital is requesting a GTMCPA payment. For example,
a hospital must submit a request for a GTMCPA payment for the OPPS
year ending April 30, 2016, on or before April 30, 2017. Late submissions
or requests for extensions will not be considered. Hospitals will
be given a grace period of six months from [the effective date of this
change], ending [six months from the effective date], to submit
GTMCPA payment requests for OPPS years ending on or before April
30, 2016. The hospital’s request for a GTMCPA payment shall include
the following data requirements for the previous OPPS year:
3.1.5.7.1.1.1 The hospital’s outpatient revenue
from Service member and ADD OPPS visits. Hospitals shall not include
revenue by: non-ADFM or non-Service member beneficiaries (i.e.,
retiree or retiree dependents); TRICARE For Life (TFL) beneficiaries;
overseas beneficiaries; or beneficiaries with Other Health Insurance
(OHI). Additionally, only revenue received from OPPS claims shall
be reported; revenue from physician fees, non-OPPS clinic visits,
or other non-OPPS claims should not be included. Uniformed Services
Family Health Plan (USFHP) HOPD Service member and ADD revenue may
be included in the hospital’s submission if the visits were paid utilizing
OPPS, but shall be separately identified by the hospital.
3.1.5.7.1.1.2 The hospital’s total outpatient
revenue (TRICARE and non-TRICARE) derived from all other third party
payers and private pay.
3.1.5.7.1.1.4 The number of OPPS visits by
Service members and ADDs. Hospitals shall not include visits by: non-ADFM
or non-Service member beneficiaries (i.e., retiree or retiree dependents);
TFL beneficiaries; overseas beneficiaries; or beneficiaries with
OHI. Only OPPS visits should be reported. Non-OPPS visits, inpatient
admissions, or other encounters shall not be included in the number
of visits. USFHP HOPD Service member and ADD visits may be included
in the hospital’s submission if the visits were paid utilizing OPPS,
but shall be separately identified by the hospital.
3.1.5.7.1.1.5 Hospital-specific Medicare
outpatient CCR based on the hospital’s most recent cost reporting period.
The hospital shall provide both the CCR and the dates of the most
recent cost reporting period.
3.1.5.7.1.2 The
contractor shall perform a thorough evaluation of the hospital’s
request in
paragraph 3.1.5.7.1.1. This evaluation shall
consist of the following:
3.1.5.7.1.2.1 The contractor shall evaluate
the hospital’s package for completeness and verify the hospital has
provided all components required in
paragraph 3.1.5.7.1.1.
3.1.5.7.1.2.2 The contractor shall perform
a validation that the hospital meets the disproportionate share criteria:
3.1.5.7.1.2.2.1 The contractor shall independently
calculate the hospital’s outpatient revenue from Service member
and ADD visits, utilizing the contractor’s claims data systems,
and dividing this result by the total outpatient revenue reported
by the hospital in
paragraph 3.1.5.7.1.2, if the hospital’s submission
shows that 10% or greater of the hospital’s total outpatient revenue
is from Service member/ADD OPPS revenue in the prior OPPS year.
3.1.5.7.1.2.2.1.1 The contractor shall compare
this result to the hospital’s estimation of outpatient revenue derived
from Service member and ADD visits in
paragraph 3.1.5.7.1.2.
3.1.5.7.1.2.2.1.2 The contractor shall work with
the hospital to resolve discrepancies in the reported data prior
to submission of the request to DHA if the hospital’s data show
that they qualify, but the contractor’s claims data show that they
do not.
3.1.5.7.1.2.2.2 The contractor shall independently
calculate the number of ADD/Service member OPPS visits in the prior
OPPS year, utilizing the contractor’s claims data systems, if the
hospital’s submission shows that there were 50,000 or greater ADD/Service
member OPPS visits in the prior OPPS year.
3.1.5.7.1.2.2.2.1 The contractor shall compare
this result to the hospital’s reported number of visits in
paragraph 3.1.5.7.1.4.
3.1.5.7.1.2.2.2.2 The contractor shall work with
the hospital to resolve discrepancies in the reported data prior
to submission of the request to DHA if the hospital’s data show
that they qualify, but the contractor’s claims data show that they
do not.
3.1.5.7.1.2.2.3 The contractor shall perform
an evaluation to determine whether the hospital is essential for continued
network adequacy. The contractor shall report the following data
elements, as well as provide a brief narrative with supporting rationale,
describing why the hospital is essential for continued network adequacy
and why a GTMCPA payment is necessary to maintain this continued
network adequacy:
• Number of available primary
care and specialist providers in the network locality;
• Availability (including reassignment)
of military providers in the locations or nearby;
• Appropriate mix of primary
care and specialists needed to satisfy demand and meet appropriate
patient access standards (e.g., appointment/waiting time, travel
distance);
• Efforts that have been made
to create an adequate network, and;
• Other cost effective alternatives
and other relevant factors.
3.1.5.7.1.3 The
contractor shall submit all documentation in
paragraphs 3.1.5.7.1.1 and
3.1.5.7.1.2 to
the GDA, if the contractor’s independent analysis shows that:
• The hospital met either, or
both, of the disproportionate share criteria; and
• The hospital is essential for
continued network adequacy.
3.1.5.7.1.4 The contractor shall notify
the GDA of their findings, if the hospital fails to meet the disproportionate
share criteria or is not essential for continued network adequacy,
but will not submit the full request for a GTMCPA payment to the
GDA unless specifically requested by the GDA.
3.1.5.7.1.5 The
GDA shall perform a thorough review and analysis of the hospital’s
submission and the contractor’s review, utilizing any DHA data deemed
necessary, to determine if the hospital qualifies for a GTMCPA payment.
If the hospital qualifies, the GTMCPA payment will be set, utilizing
DHA data, so the hospital’s PCR for TRICARE OPPS services does not
exceed a ratio of 1.3. The GDA has the discretion to recommend any
payment amount between $0 and the amount that does not exceed a
PCR of 1.3. A hospital shall not be approved for a GTMCPA if the
payment would result in the hospital’s PCR exceeding 1.3 for TRICARE
OPPS services. The GDA shall forward their recommendation for approval
of the GTMCPA payment amount, to the Director, DHA. Disapprovals by
the GDA will not be forwarded to the Director, DHA for review and
approval. The PCR shall be calculated as follows:
3.1.5.7.1.5.1 Step 1. Determine actual TRICARE
OPPS payments, excluding OHI and USFHP claims. Only those line items
with OPPS payments, and identified with a valid OPPS SI on the claim,
will be considered. OPPS SIs of A, B, C, E, E1, F, W, Z,
or TB, will be excluded from the calculations. These
SIs mean that the item was paid outside of OPPS utilizing an alternative
reimbursement system, or was not recognized or covered, and therefore
was not eligible to be considered in the calculation of an OPPS
GTMCPA payment. The OPPS GTMCPA payment is specific to the OPPS
reimbursement system and there is no authority to include non-OPPS
paid amounts in the PCR calculation. Claims for beneficiaries with
OHI, claims for beneficiaries with USFHP, claims for ineligible
beneficiaries, duplicate claims, and denied claims shall not be
included in the calculation.
3.1.5.7.1.5.2 Step 2. Determine the hospital’s
costs, by identifying the billed charges for all non-OHI, non-USFHP
HOPD and Emergency Room (ER) charges that have an OPPS SI on the
claim, except those with an OPPS SI of A, B, C, E, E1, F, W, Z,
or TB. These SIs mean that the item was paid outside
of OPPS utilizing an alternative reimbursement system, or was not
recognized or covered, and therefore was not eligible to be considered
in the calculation of an OPPS GTMCPA payment. There is no authority
to include non-OPPS amounts in the PCR calculation. Claims for beneficiaries
with OHI, claims for beneficiaries with USFHP, claims for ineligible
beneficiaries, duplicate claims, and denied claims shall not be
included in the calculation.
3.1.5.7.1.5.3 Step 3. Divide Step 1 by Step
2.
3.1.5.7.1.5.4 Step 4. If the amount in Step
3 is lower than 1.3 the hospital may receive a GTMCPA payment so that
total TRICARE OPPS payments are equal to or less than 130% of their
costs. The percentage used is at the discretion of the Director,
DHA.
3.1.5.7.1.6 TRICARE OPPS payments to the
qualifying hospital will be increased by the Director, DHA, or designee
at his or her discretion by way of an additional GTMCPA payment
after the end of the OPPS year (May 1 through April 30). Subsequent
adjustments to the GTMCPA payment will be issued to the qualifying
hospital for the prior OPPS year, when requested by the hospital,
to ensure that claims that were not paid to completion the previous
year are adjusted. These adjustments are separate from the applicable
GTMCPA payment approved for the current OPPS year.
3.1.5.7.1.7 Upon approval of the GTMCPA
payment request by the Director, DHA, the GDA will notify the Contracting
Officer (CO) who will send a letter to the contractor notifying
them of the GTMCPA payment approval.
3.1.5.7.1.8 The contractor shall process
the GTMCPA payments per the instructions in Section G of their contracts
under Invoice and Payment Non-Underwritten - Non-TEDs, Demonstrations.
No GTMCPA payments will be sent out without approval from DHA, Contract
Resource Managment (CRM).
3.1.5.7.1.9 DHA shall send an approval
to the contractor to issue GTMCPA payments out of the non-financially
underwritten bank account based on fund availability.
3.1.5.7.1.10 GTMCPA payments will be reviewed
and approved on an annual basis; i.e., they will have to be evaluated
on a yearly basis by the GDA in order to determine if the hospital
continues to serve a disproportionate share of Service members and
ADDs and whether there are any other special circumstances significantly
affecting military contingency capabilities.
3.1.5.7.1.11 The Director, DHA (or designee)
is the final approval authority for GTMCPA payments. A decision by
the Director, DHA, or designee to approve, reject, adopt, modify,
or extend GTMCPA payments is not subject to the appeal and hearing
procedures in
32 CFR 199.10.
3.1.5.7.1.12 DHA, upon request, will provide
the detailed claims data used to calculate the hospital’s PCR and maximum
GTMCPA payment, if any, to the requesting hospital through the contractor.
3.1.5.7.1.13 GTMCPAs may be extended to
OPPS facilities that have changed their status during the OPPS GTMCPA
year. If an OPPS network facility changes their status during the
OPPS year, and the facility was and remained a network facility
that is essential for military readiness, contingency operations,
and network adequacy and the facility served a disproportionate
share of Service members and ADDs during the period of the year
it was subject to OPPS reimbursement, then a pro-rated OPPS GTMCPA
may be authorized. Any OPPS adjustment will only apply to OPPS payments.
3.1.5.7.2 Non-Network TMCPAs
TMCPAs may also be extended
to non-network hospitals on a case-by-case basis for specific procedures
where it is determined that the procedures cannot be obtained timely
enough from a network hospital. This determination will be based
on the contractor’s and GDA’s evaluation of network adequacy data
related to the specific procedures for which the TMCPA is being
requested as outlined under
paragraph 3.1.5.7.1.3. Non-network TMCPAs
will be adjusted on a claim-by-claim basis. The associated costs
would be underwritten or non-underwritten following the applicable
financing rules of the contract.
3.1.5.7.3 Application
of Cost-Sharing
3.1.5.7.3.1 Transitional and GTMCPAs are
not subject to cost-sharing.
3.1.5.7.3.2 Non-network TMCPAs shall be
subject to cost-sharing since they are applied on a claim-by-claim basis.
3.1.5.7.4 Reimbursement of Transitional,
General, and Non-Network TMCPA costs shall be paid as pass-through
costs. The contractor does not financially underwrite these costs.
3.2 Transitional Pass-Through for
Innovative Medical Devices, Drugs, and Biologicals
3.2.1 Items
Subject to Transitional Pass-Through Payments
3.2.1.1 Current
Orphan Drugs
A drug
or biological that is used for a rare disease or condition with
respect to which the drug or biological has been designated under
section 526 of the Federal Food, Drug, and Cosmetic Act if payment
for the drug or biological as an outpatient hospital service was
being made on the first date that the OPPS was implemented.
Note: Orphan drugs will be paid separately
at the Average Sales Price (ASP) + 6%, which represents a combined payment
for acquisition and overhead costs associated with furnishing these
products. Orphan drugs will no longer be paid based on the use of
drugs because all orphan drugs, both single-indication and multi-indication, will
be paid under the same methodology. The TRICARE contractors will
not be required to calculate orphan drug payments.
3.2.1.2 Current Cancer Therapy Drugs,
Biologicals, and Brachytherapy
These items are drugs or biologicals
that are used in cancer therapy, including (but not limited to) chemotherapeutic
agents, antiemetics, hematopoietic growth factors, colony stimulating
factors, biological response modifiers, biphosphonates, and a device
of brachytherapy if payment for the drug or biological as an outpatient
hospital service was being made on the first date that the OPPS
was implemented.
3.2.1.3 Current
Radiopharmaceutical Drugs and Biological Products
A radiopharmaceutical drug
or biological product used in diagnostic, monitoring, and therapeutic
nuclear medicine procedures if payment for the drug or biological
as an outpatient hospital service was being made on the first date
that the OPPS was implemented.
3.2.1.4 New
Medical Devices, Drugs, and Biologicals
New medical devices, drugs,
and biologic agents, will be subject to transitional pass-through
payment in instances where the item was not being paid for as a
hospital outpatient service as of December 31, 1996, and where the
cost of the item is “not insignificant” in relation to the hospital
OPPS payment amount.
3.2.2 Items
eligible for transitional pass-through payments are generally coded
under a Level II HCPCS code with an alpha prefix of
C.
• Pass-through device categories
are identified by SI of H
• Pass-through drugs and biological
agents are identified by SI of G
3.2.3 Reduction of Transitional Pass-Through
Payments for Diagnostic Radiopharmaceuticals to Offset Costs Packaged
Into APC Groups
3.2.3.1 All non-pass-through diagnostic
radiopharmaceuticals are packaged.
3.2.3.2 For OPPS pass-through purposes,
radiopharmaceuticals are considered to be “drugs” where the transitional
pass-through for the drugs and biologicals is the difference between
the amount paid ASP + 4% or the Part B drug CAP rate and the otherwise
applicable OPPS payment amount of ASP + 6%.
3.2.3.3 New pass-through diagnostic
radiopharmaceuticals with no ASP information or CAP rate will be
paid at ASP + 6%, while those without ASP information will be paid
based on Wholesale Acquisition Cost (WAC) or, if WAC is not available,
based on 95% of the product’s most recently published Average Wholesale
Price (AWP).
3.2.3.4 Offset Calculations
3.2.3.4.1 An established methodology
will be employed to estimate the portion of each APC payment rate that
could reasonably be attributed to the cost of an associated device
eligible for pass-through payment (the APC device offset).
3.2.3.4.2 New pass-through device categories
will be evaluated individually to determine if there are device costs
packaged into the associated procedural APC payment rate - suggesting
that a device offset amount would be appropriate.
3.2.3.4.3 The offset will cease to apply
when the diagnostic radiopharmaceutical expires from pass-through status.
3.2.4 Transitional Pass-Through Device
Categories
3.2.4.1 Excluded Medical Devices
Equipment, instruments, apparatuses,
implements or items that are generally used for diagnostic or therapeutic purposes
that are not implanted or incorporated into a body part, and that
are used on more than one patient (that is, are reusable), are excluded
from pass-through payment. This material is generally considered
to be a part of hospital overhead costs reflected in the APC payments.
3.2.4.2 Included Medical Devices
The following implantable items
may be considered for the transitional pass-through payments:
• Prosthetic implants (other
than dental) that replace all or part of an internal body organ.
• Implantable items used in performing
diagnostic x-rays, diagnostic laboratory tests, and other diagnostic
tests.
Note: Any Durable Equipment (DE),
orthotics, and prosthetic devices for which transitional pass-through payment
does not apply will be paid under the DMEPOS fee schedule when the
hospital is acting as the supplier (paid outside the PPS).
3.2.4.4 Duration of Transitional Pass-Through
Payments
3.2.4.4.1 The duration of transitional
pass-through payments for devices is for at least two, but not more than
three years. This period begins with the first date on which a transitional
pass-through payment is made for any medical device that is described
by the category.
3.2.4.4.2 The costs of devices no longer
eligible for pass-through payments will be packaged into the costs of
the procedures with which they are normally billed.
3.2.5 General Coding and Billing
Instructions and Explanations
3.2.5.1 Devices implanted, removed,
and implanted again, not associated with failure (applies to transitional pass-through
devices only):
• In instances where the physician
is required to implant another device because the first device fractured,
the hospitals may bill for both devices - the device that resulted
in fracture and the one that was implanted into the patient.
• It is realized that there may
be instances where an implant is tried but later removed due to
the device’s inability to achieve the necessary surgical result
or due to inappropriate size selection of the device by the physician
(e.g., physician implants an anchor to bone and the anchor breaks
because the bone is too hard or must be replaced with a larger anchor
to achieve a desirable result). In such instances, separate reimbursement will
be provided for both devices. This situation does not extend to
devices that result in failure or are found to be defective. For
failed or defective devices, hospitals are advised to contact the
vendor/manufacturer.
Note: This applies to transitional
pass-through devices only and not to devices packaged into an APC.
3.2.5.2 Kits. Manufacturers frequently
package a number of individual items used in a particular procedure
in a kit. Generally, to avoid complicating the category list unnecessarily
and to avoid the possibility of double coding, codes for such kits
have not been established. However, hospitals are free to purchase
and use such kits.
3.2.5.2.1 If the kits contain individual
items that separately qualify for transitional pass-through payment, these
items may be separately billed using applicable codes. Hospitals
may not bill for transitional pass-through payments for supplies
that may be contained in kits.
3.2.5.2.2 HCPCS codes that describe devices
without pass-through status and that are packaged in kits with other
items used in a particular procedure, hospitals may consider all
kit costs in their line-item charge for the associated device/device
category HCPCS code that is assigned SI of N for packaged
payment (i.e., hospitals may report the total charge for the whole
kit with the associated device/device category HCPCS code. Payment
for device/device category HCPCS codes without pass-through status
is packaged into payment for the procedures in which they are used,
and these codes are assigned SI of N. In the case of
a device kit, should a hospital choose to report the device charge
alone under a device/device category HCPCS code with SI of N,
the hospital should report charges for other items that may be included
in the kit on a separate line on the claim.
3.2.5.3 Multiple Units. Hospitals must
bill for multiple units of items that qualify for transitional pass-through payments,
when such items are used with a single procedure, by entering the
number of units used on the bill.
3.2.5.4 Reprocessed Devices. Hospitals
may bill for transitional pass-through payments only for those devices
that are “single use.” Reprocessed devices may be considered “single
use” if they are reprocessed in compliance with the enforcement
guidance of the FDA relating to the reprocessing of devices applicable
at the time the service is delivered.
3.2.6 Reduction of Transitional Pass-Through
Payments to Offset Costs Packaged into APC Groups
3.2.6.1 Each new device category will
be reviewed on a case-by-case basis to determine whether device costs
associated with the new category were packaged into the existing
APC structure.
3.2.6.2 If it is determined that, for
any new device category, no device costs associated with the new category
were packaged into existing APCs, the offset amount for the new
category would be set to $0 for CY 2008.
3.2.7 Calculation of Transitional
Pass-Through Payment for a Pass-Through Device
3.2.7.1 Device pass-through payment
is calculated by applying the statewide CCR to the hospital’s charges on
the claim and subtracting any appropriate pass-through offset. Statewide
CCRs are based on the geographical CBSA (two digit = rural, five
digit = urban).
3.2.7.2 The following are two examples
of the device pass-through calculations, one incorporating a device offset
amount applicable to CY 2003 and the other only applying the CCR
(offsets set to $0 for CY 2005). Deductibles, cost-shares and copayments
examples are based on dates of service prior to January 1, 2018.
See
Chapter 2 for deductibles,
copayments, and cost-shares for dates of service on or after January
1, 2018:
3.2.7.3 The offset adjustment is applied
only when a pass-through device is billed in addition to the APC.
|
Example 1:
|
Transitional Pass-Through Payment
Calculation with Offset
|
|
|
|
|
Device: (C1884 - Embolization
Protective System)
|
|
|
Device cost = Hospital charge
converted to cost = $1,200.00
|
|
|
Associated procedure: CPT code
92982 (APC0083)
|
|
|
Payment rate = $3,289.42
|
|
|
Coinsurance amount = $657.88
(Standard ADFM who has met his or her yearly deductible)
|
|
|
Total offset amount to be applied
for each APC that contains device costs = $802.06
|
|
|
Note: The total offset from the device
amount is wage-index adjusted and the multiple procedure discount factor
is adjusted before it is subtracted from the device cost. (Refer
to paragraph 3.2.7.4 for detailed application
of discounting factors to offset amounts.) This example assumes
a wage index of 1.0000.
|
|
|
|
|
Device cost adjusted by total
offset amount: $1,200 - $802.06 = $397.94
|
|
|
TRICARE program payment (before
wage index adjustment) for APC 0083:
|
|
|
$3,289.42 - $657.88 = $2,631.54
|
|
|
TRICARE payment for pass-through
device HCPCS code C1884 = $397.94
|
|
|
Beneficiary cost-share liability
for APC 0083 = $657.88
|
|
|
Total amount received by provider
for APC 0083 and pass-through device HCPCS code C1884:
|
|
|
|
|
$2,631.54
|
|
TRICARE program payment for
CPT code 92982 when used with device code HCPCS C1884
|
|
|
657.88
|
|
Beneficiary coinsurance amount
for CPT code 92982
|
|
|
+ 397.94
|
|
Transitional pass-through payment
for device
|
|
|
$3,687.36
|
|
Total amount received by the
provider
|
|
|
|
Example 2:
|
Transitional Pass-Through Payment
Calculation without Offset
|
|
|
|
|
Device: (C1884 - Embolization
Protective System)
|
|
|
Device cost = Hospital charge
converted to cost = $1,500.00
|
|
|
Associated procedure: CPT code
92982 (APC0083)
|
|
|
Payment rate = $3,289.42
|
|
|
Coinsurance amount = $657.88
(standard ADFM who has met his or her yearly deductible)
|
|
|
Total offset amount to be applied
for each APC that contains device costs = $0.
|
|
|
Note: The total offset from the device
amount is wage-index adjusted and the multiple procedure discount factor
is adjusted before it is subtracted from the device cost. (Refer
to paragraph 3.2.7.4 for detailed application
of discounting factors to offset amounts.) This example assumes
a wage index of 1.0000.
|
|
|
|
|
Device cost adjusted by total
offset amount: $1,500 - $0 = $1,500
|
|
|
TRICARE program payment (before
wage index adjustment) for APC 0083:
|
|
|
$3,289.42 - $657.88 = $2,631.54
|
|
|
TRICARE payment for pass-through
device HCPCS code C1884 = $1,500
|
|
|
Beneficiary cost-share liability
for APC 0083 = $657.88
|
|
|
Total amount received by provider
for APC 0083 and pass-through device HCPCS code C1884:
|
|
|
|
|
$2,631.54
|
|
TRICARE program payment for
CPT code 92982 when used with device code HCPCS code C1884
|
|
|
657.88
|
|
Beneficiary coinsurance amount
for CPT code 92982
|
|
|
+1,500.00
|
|
Transitional pass-through payment
for device
|
|
|
$4,789.42
|
|
Total amount received by the
provider
|
|
|
|
Note: Transitional payments for devices
(SI of H) are not subject to beneficiary cost-sharing/copayments.
|
3.2.7.4 Steps
involved in applying multiple discounting factors to offset amounts
prior to subtracting from the device cost.
|
Step 1:
|
For each APC with an offset
multiply the offset by the discount percent (whether it is 50%,
75%, 100%, or 200%) and the units of service.
|
|
|
(Offset x Discount Rate x Units
of Service)
|
|
|
|
|
Step 2:
|
Sum the products of Step 1.
|
|
|
|
|
Step 3:
|
Wage adjust the sum of the
products calculated in Step 2.
|
|
|
(Step 2 Amount x Labor % x
Wage Index) + Step 2 Amount x Nonlabor %)
|
|
|
|
|
Step 4:
|
If the units of service from
the procedures with offsets are greater than the device units of
service, then Step 3 is adjusted by device units divided by procedure
offset units.
|
|
|
[(Step 2 Amount x Labor % x
Wage Index) + (Step 2 Amount x Nonlabor %) x (Device Units ÷ Offset Procedure
Units)]
|
|
|
otherwise
|
|
|
(Step 2 Amount x Labor % x
Wage Index) Step 2 Amount x Non-Labor %)
|
|
|
|
|
Example:
|
If there are two procedures
with offsets but only one device, then the final offset is reduced
by 50%.
|
|
|
|
|
Step 5:
|
If there is only one line item
with a device, then the amount calculated in Step 4 is subtracted
from the line item charge adjusted to cost.
|
|
|
[Step 4 Amount - (Line Item
Charge x State CCR)]
|
|
|
|
|
Example:
|
If there are multiple devices,
then the amount from Step 4 is allocated to the line items with
devices based on their charges.
|
|
|
(Line Item Device Charge ÷
Sum of Device Charges)
|
3.3 Drugs,
Biologicals, and Radiopharmaceuticals without Pass-Through Status
3.3.1 Radiopharmaceuticals, drugs,
and biologicals which do not have pass-through status, are paid
in one of three ways:
• Packaged payment, or
• Separate payment (individual
APCs), or
• Allowable charge.
3.3.2 The cost of drugs and radiopharmaceuticals
are generally packaged into the APC payment rate for the procedure
or treatment with which the products are usually furnished:
• Hospitals do not receive separate
payment for packaged items and supplies; and
• Hospitals may not bill beneficiaries
separately for any such packaged items and supplies whose costs
are recognized and paid for within the national OPPS payment rate
for the associated procedure or services.
3.3.3 Although diagnostic and therapeutic
radiopharmaceutical agents are not classified as drugs or biologicals,
separate payment has been established for them under the same packaging
threshold policy that is applied to drugs and biologicals; i.e.,
the same adjustments will be applied to the median costs for radiopharmaceuticals
that will apply to non-pass-through, separately paid drugs and biologicals.
3.4 Criteria for Packaging Payment
for Drugs, Biologicals and Radiopharmaceuticals
3.4.1 Generally,
the cost of drugs and radiopharmaceuticals are packaged into the
APC payment rate for the procedure or treatment with which the products
are usually furnished. However, packaging for certain drugs and radiopharmaceuticals,
especially those that are particularly expensive or rarely used,
might result in insufficient payments to hospitals, which could
adversely affect beneficiary access to medically necessary services.
3.4.2 Payments for drugs and radiopharmaceuticals
are packaged into the APCs with which they are billed if the median
cost per day for the drug or radiopharmaceutical is less than threshold
defined by CMS ($95 for CY 2015, $100 for CY 2016), and published
in the CMS OPPS annual Final Rule. Separate APC payment is established
for drugs and radiopharmaceuticals for which the median cost per
day exceeds this threshold ($95 for CY 2015, $100 for CY 2016).
3.4.3 All non-pass-through diagnostic
radiopharmaceuticals and contrast agents, regardless of their per
day costs for are packaged.
3.4.4 Payment
For Drugs, Biologicals, And Radiopharmaceuticals Without Pass-Through
Status That Are Not Packaged
3.4.4.1 “Specified
Covered Outpatient Drugs” Classification
3.4.4.1.1 Special classification (i.e.,
“specified covered outpatient drug”) is required for certain separately payable
radiopharmaceutical agents and drugs or biologicals for which there
are specifically mandated payments.
3.4.4.1.2 The following drugs and biologicals
are designated exceptions to the “specified covered outpatient drugs”
definition (i.e., not included within the designated category classification):
• A drug or biological for which
payment was first made on or after January 1, 2003, under the transitional
pass-through payment provision.
• A drug or biological for which
a temporary HCPCS code has been assigned.
• Orphan drugs.
3.4.4.2 Payment of Specified Outpatient
Drugs, Biological, and Radiopharmaceuticals
3.4.4.2.1 Specified outpatient drugs
and biologicals will be paid a combined rate of the ASP + 4% which
is reflective of the present hospital acquisition and overhead costs
for separately payable drugs and biologicals under the OPPS. In
the absence of ASP data, the WAC will be used for the product to
establish the initial payment rate. If the WAC is also unavailable,
then payment will be calculated at 95% of the most recent AWP.
3.4.4.2.2 Since there is no ASP data
for separately payable specified radiopharmaceuticals, reimbursement will
be based on charges converted to costs.
• Therapeutic radiopharmaceuticals
must have a mean per day cost of more than the threshold established
by Medicare in the CMS OPPS annual Final Rule ($95 for CY 2015,
$100 for CY 2016) in order to be paid separately.
• Diagnostic radiopharmaceuticals
and contrast agents are packaged regardless of per day cost since
they are ancillary and supportive of the therapeutic procedures
in which they are used.
3.4.4.3 Designated SI
The HCPCS codes for the above
three categories of “specified covered outpatient drugs” are designated
with the SI of
K - non-pass-through drugs, biologicals,
and radiopharmaceuticals paid under the hospital OPPS (APC Rate). Refer
to DHA’s OPPS website at
http://www.health.mil/rates for
APC payment amounts of separately payable drugs, biologicals and
radiopharmaceuticals.
3.4.5 Payment
for New Drugs and Biologicals With HCPCS Codes and Without Pass-Through Application
and Reference AWP or Hospital Claims Data
3.4.5.1 New drugs and biologicals with
HCPCS codes, but which do not have pass-through status and are without
OPPS hospital claims data, will be paid at ASP + 4% consistent with
its final payment methodology for other separately payable non-pass-through
drugs and biologicals.
3.4.5.2 Payment for all new non-pass-through
diagnostic radiopharmaceuticals will be packaged.
3.4.5.3 In the absence of ASP data,
the WAC will be used for the product to establish the initial payment
rate for new non-pass-through drugs and biologicals with HCPCS codes,
but which are without OPPS claims data. If the WAC is also unavailable,
payment will be made at 95% of the product’s most recent AWP.
3.4.5.4 SI K will be assigned
to HCPCS codes for new drugs and biologicals for which pass-through application
has not been received.
3.4.5.5 In order to determine the packaging
status of these items for CY 2008 an estimate of the per day cost of
each of these items was calculated by multiplying the payment rate
for each product based on ASP + 4%, by a estimated average number
of units of each product that would typically be furnished to a
patient during one administration in the hospital outpatient setting.
Items for which the estimated per day cost is less than or equal
to the threshold established by Medicare in the CMS OPPS annual
Final Rule ($95 for CY 2015, $100 for CY 2016) will be packaged.
For drugs currently covered under the CAP the payment rates calculated
under that program that were in effect as of April 1, 2008 will
be used for purposes of packaging decisions.
3.4.6 Drugs and Biologicals Not Eligible
for Pass-Through Status and Receiving Separate Non-Pass-Through
Payment
3.4.6.1 Payment will be based on median
costs derived from CY claims data for drugs and biologicals that have
been:
• Separately paid since implementation
of the OPPS under Medicare, but were not eligible for pass-through status;
and
• Historically packaged with
the procedures with which they were billed, even though their median
cost per day was above the packaging threshold ($95 for CY 2015,
$100 for CY 2016).
3.4.6.2 Payment based on median costs
should be adequate for hospitals since these products are generally older
or low-cost items.
3.4.7 Payment
for New Drugs, Biologicals, and Radiopharmaceuticals Before HCPCS
Codes Are Assigned
3.4.7.1 The following payment methodology
will enable hospitals to begin billing for drugs and biologicals that
are newly approved by the FDA and for which a HCPCS code has not
yet been assigned by the National HCPCS Alpha-Numeric Workgroup
that could qualify them for pass-through payment under the OPPS:
• Hospitals should be instructed
to bill for a drug or biological that is newly approved by the FDA
by reporting the National Drug Code (NDC) for the product along
with a new HCPCS code C9399, “Unclassified Drug or Biological.”
• When HCPCS code C9399 appears
on the claim, the OCE suspends the claim for manual pricing by the contractor.
• The new drug, biological and/or
radiopharmaceutical will be priced at 95% of its AWP from a schedule
of allowable charges based on the AWP, and process the claim for
payment.
• The above approach enables
hospitals to bill and receive payment for a new drug, biological
or radiopharmaceutical concurrent with it’s approval by the FDA.
3.4.7.2 Hospitals will discontinue
billing C9399 and the NDC upon implementation of a HCPCS code, SI,
and appropriate payment amount with the next quarterly OPPS update.
3.4.8 Package payment for any biological
without pass-through status that is surgically inserted or implanted
(through a surgical incision or a natural orifice) into the payment
for the associated surgical procedure.
3.4.8.1 As a result, HCPCS codes C9352
and C9353 are packaged and assigned SI of N.
3.4.8.2 Any new biologicals without
pass-through status that are surgically inserted or implanted will
be packaged.
3.4.9 Drugs
And Non-Implantable Biologicals With Expiring Pass-Through Status
3.4.9.1 CY 2009 payment methodology
of packaged or separate payment based on their estimated per day costs,
in comparison with the CY 2009 drug packaging threshold.
3.4.9.2 Packaged drugs and biologicals
are assigned SI of N and drugs and biologicals that
continue to be separately paid as non-pass-through products are
assigned SI of K.
3.5 Drug Administration Coding
and Payment
3.5.2 Drugs for which the median
cost per day is greater than the threshold established by Medicare
in the CMS OPPS annual Final Rule ($95 for CY 2015, $100 for CY
2016) are paid separately and are not packaged into the payment
for the drug administration. Separate payment for drugs with a median
cost in excess of the packaging threshold ($95 for CY 2015, $100
for CY 2016) will result in more equitable payment for both the
drugs and their administration.
3.6 Coding
and Payment Policies for Drugs and Supplies
3.6.1 Drug
Coding
3.6.1.1 Drugs for which separate payment
is allowed are designated by SI of K and must be reported
using the appropriate HCPCS code.
3.6.1.2 Drugs that are reported without
a HCPCS code will be packaged under the revenue center code, under
OPPS: 250, 251, 252, 254, 255, 257, 258, 259, 631, 632, or 633.
3.6.1.3 Drugs billed using revenue
code 636 (“Drugs requiring detailed coding”) require use of the appropriate
HCPCS code, or they will be denied.
3.6.1.4 Reporting charges of packaged
drugs is critical because packaged drug costs are used for calculating outlier
payments and hospital costs for the procedure and service with which
the drugs are used in the course of the annual OPPS updates.
3.6.2 Payment for the Unused Portion
of a Drug
3.6.2.1 Once a drug is reconstituted
in the hospital’s pharmacy, it may have a limited shelf life. Since
an individual patient may receive less than the fully reconstituted
amount, hospitals are encouraged to schedule patients in such a
way that the hospital can use the drug most efficiently. However,
if the hospital must discard the remainder of a vial after administering
part of it to a TRICARE patient, the provider may bill for the amount
of the drug discarded, along with the amount administered.
3.6.2.2 In the event that a drug is
ordered and reconstituted by the hospital’s pharmacy, but not administered
to the patient, payment will be made under OPPS.
Example 1: Drug X is available only in
a 100-unit size. A hospital schedules three patients to receive
drug X on the same day within the designated shelf life of the product.
An appropriate hospital staff member administers 30 units to each
patient. The remaining 10 units are billed to OPPS on the account
of the last patient. Therefore, 30 units are billed on behalf of
the first patient seen, and 30 units are billed on behalf of the
second patient seen. Forty units are billed on behalf of the last
patient seen because the hospital had to discard 10 units at that
point.
Example 2: An appropriate
hospital staff member must administer 30 units of drug X to a patient,
and it is not practical to schedule another patient for the same
drug. For example, the hospital has only one patient who requires
drug X, or the hospital sees the patient for the first time and
does not know the patient’s condition. The hospital bills for 100
units on behalf of the patient, and OPPS pays for 100 units.
3.6.2.3 Coding for Supplies
3.6.2.3.1 Supplies that are an integral
component of a procedure or treatment are not reported with a HCPCS
code.
3.6.2.3.2 Charges for such supplies are
typically reflected either in the charges on the line for the HCPCS
for the procedure, or on another line with a revenue code that will
result in the charges being assigned to the same cost center to
which the cost of those services are assigned in the cost report.
3.6.2.3.3 Hospitals should report drugs
that are treated as supplies because they are an integral part of
a procedure or treatment under the revenue code associated with
the cost center under which the hospital accumulates the costs for
the drugs.
3.6.3 Recognition
of Multiple HCPCS Codes for Drugs
3.6.3.1 Prior to January 1, 2008, the
OPPS generally recognized only the lowest available administrative
dose of a drug if multiple HCPCS codes existed for the drug; for
the remainder of the doses, the OPPS assigned a SI B indicating
that another code existed for OPPS purposes. For example, if drug
X has two HCPCS codes, one for a 1 ml dose and another for a 5 ml
dose, the OPPS would assign a payable SI to the 1 ml dose and SI B to
the 5 ml dose.
3.6.3.2 Hospitals then were required
to bill the appropriate number of units for the 1 ml dose in order
to receive payment under OPPS.
3.6.3.3 Beginning January 1, 2008,
the OPPS has recognized each HCPCS code for a Part B drug, regardless
of the units identified in the drug descriptor.
3.6.3.4 Hospitals may choose to report
multiple HCPCS codes for a single drug, or to continue billing the HCPCS
code with the lowest dosage descriptor available.
3.6.4 Correct Reporting of Drugs
and Biologicals When Used As Implantable Devices
3.6.4.1 When billing for biologicals
where the HCPCS code describes a product that is solely surgically implanted
or inserted, whether the HCPCS code is identified as having pass-through
status or not, hospitals are to report the appropriated HCPCS code
for the product.
3.6.4.2 Separate payment will be made
for an implanted biological when it has pass-through status.
3.6.4.3 If
the implantable device does not have pass-through status it will
be packaged into the payment for the associated procedure.
3.6.5 Correct Reporting of Units
for Drugs
3.6.5.1 Units of drugs administered
to patients should be accurately reported in terms of the dosage specified
in the full HCPCS code descriptor. That is, units should be reported
in multiples of the units included in the HCPCS descriptor.
3.6.5.2 For example, if the description
for the drug code is 6 mg, and 6 mg of the drug was administered
to the patients, the units bill should be one. If the description
for the drug code is 50 mg, but 200 mg of the drug was administered,
the units billed should be four.
3.6.5.3 Hospitals should not bill the
units based on the way the drug is packaged, stored or stocked.
That is, if the HCPCS descriptor for the drug code specifies 1 mg
and a 10 mg vial of the drug was administered to the patient, bill
10 units even though only one vial was administered.
3.7 Orphan Drugs
3.7.1 Continue
to use the following criteria for identifying single indication
orphan drugs that are used solely for orphan conditions:
• The drug is designated as an
orphan drug by the FDA and approved by the FDA for treatment of
only one or more orphan condition(s).
• The current United States Pharmacopoeia
Drug Information (USPDI) shows that the drug has neither an approved
use nor an off-label use for other than the orphan condition(s).
3.7.2 Twelve single indication orphan
drugs have currently been identified as having met these criteria.
3.7.3 Payment Methodology
3.7.3.1 Pay all 12 single indication
orphan drugs at the rate of 88% of AWP or 106% of the ASP, whichever
is higher.
3.7.3.2 However, for drugs where 106%
of ASP would exceed 95% of AWP, payment would be capped at 95% of
AWP, which is the upper limit allowed for sole source specified
covered outpatient drugs.
3.8 Vaccines
3.8.1 Hospitals will be paid for
influenza, pneumococcal pneumonia and hepatitis B vaccines based
on allowable charge methodology; i.e., will be paid the CMAC rate
for these vaccines.
3.8.2 Separately
payable vaccines other than influenza, pneumococcal pneumonia and
hepatitis B will be paid under their own APC.
3.9 Payment Policy for Radiopharmaceuticals
Separately paid radiopharmaceuticals
are classified as “specified covered outpatient drugs” subject to
the following packaging and payment provisions:
3.9.1 The threshold for the establishment
of separate APCs for radiopharmaceuticals is determined by Medicare
and published in the CMS OPPS annual Final Rule ($95 for CY 2015,
$100 for CY 2016).
3.9.2 A radiopharmaceutical
that is covered and furnished as part of covered outpatient department
services for which a HCPCS code has not been assigned will be reimbursed
an amount equal to 95% of its AWP.
3.9.3 Radiopharmaceuticals
will be excluded from receiving outlier payments.
3.9.4 Applications will be accepted
for pass-through status; however, in the event the manufacturer
seeking pass-through status for a radiopharmaceutical does not submit
data in accordance with the requirements specified for new drugs
and biologicals, payment will be set for the new radiopharmaceutical
as a “specified covered outpatient drug.”
3.10 Blood and Blood Products
3.10.1 Since the OPPS was first implemented,
separate payment has been made for blood and blood products in APCs
rather than packaging them into payment for the procedures with
which they were administered. The APCs for these products are intended
to recover the costs of the products. SI R was created to denote
blood and blood products.
3.10.2 The OPPS provider also should
report charges for processing and storage services on a separate
line using Revenue Code 0390 (General Classification), 0392 (Blood
Processing/Storage), or 0399 (Blood Processing/Storage; Other Blood
Storage and Processing), along with appropriate blood HCPCS code,
the number of units transfused, and the Line Item Date Of Service
(LIDOS).
3.10.3 Administrative costs for the
processing and storage specific to the transfused blood product
are included in the APC payment, which is based on hospitals’ charges.
3.10.4 Payment for the collection,
processing, and storage of autologous blood, as described by CPT
code 86890 and used in transfusion, is made through APC 347 (Level
III Transfusion Laboratory Procedures).
3.10.5 Payment rates for blood and
blood products will be determined based on median costs.
3.10.6 Blood clotting factors are
paid at ASP + 4%, plus an additional payment for the furnishing
fee that is also a part of the payment for blood clotting factors
furnished in physician’s offices.
3.11 Adjustment
to Payment in Cases of Devices Replaced with Partial Credit for
the Replaced Device
3.11.1 Hospitals will be required
to append the modifier
FC to the HCPCS code for the
procedure in which the device was inserted on claims when the device
that was replaced with partial credit under warranty, recall, or
field action is one of the devices in
Figure 13.3-3. Hospitals should
not append the modifier to the HCPCS code if the device is not listed
in
Figure 13.3-3.
3.11.2 Claims containing the
FC modifier
will not be accepted unless the modifier is on a procedure code
with SI
S,
T,
V, or
X.
3.11.3 If the APC to which the procedure
is assigned is one of the APCs listed in
Figure 13.3-4, the Pricer will reduce
the unadjusted payment rate for the procedure by an amount equal
to the percent in
Figure 13.3-4 for partial credit device replacement
(i.e., 50% of the device offset when both a device code listed in
Figure 13.3-3 is present
on the claim and the procedure code maps to an APC listed in
Figure 13.3-4)
multiplied by the unadjusted payment rate.
3.11.4 The partial credit adjustment
will occur before wage adjustment and before the assessment to determine
if the reductions for multiple procedures (signified by the presence
of more than on procedure on the claim with a SI of T),
discontinued service (signified by modifier 73) or
reduced service (signified by modifier 52) apply.
3.12 Payment When Devices Are Replaced
Without Cost or Where Credit for a Replacement Device is Furnished
to the Hospital
3.12.1 Payments will be reduced for
selected APCs in cases in which an implanted device is replaced
without cost to the hospital or with full credit for the removed
device. The amount of the reduction to the APC rate will be calculated
in the same manner as the offset amount that would be applied if
the implanted device assigned to the APC has pass-through status.
3.12.2 This permits equitable adjustments
to the OPPS payments contingent on meeting all of the following criteria:
3.12.2.1 All procedures assigned to
the selected APCs must require implantable devices that would be reported
if device replacement procedures are performed;
3.12.2.2 The required devices must be
surgically inserted or implanted devices that remain in the patient’s body
after the conclusion of the procedures, at least temporarily; and
3.12.2.3 The offset percent for the
APC (i.e., the median cost of the APC without device costs divided
by the median cost of the APC with device costs) must be significant--significant
offset percent is defined as exceeding 40%.
3.12.3 The presence of the modifier
FB [“Item
Provided Without Cost to Provider, Supplier, or Practitioner or Credit
Received for Replacement (examples include, but are not limited
to devices covered under warranty, replaced due to defect, or provided
as free samples)”] would trigger the adjustment in payment if the
procedure code to which modifier
FB was amended appeared
in
Figure 13.3-3 and
was also assigned to one of the APCs listed in
Figure 13.3-4. OPPS payments
for implantation procedures to which the
FB modifier
is appended are reduced to 100% of the device offset for no-cost/full
credit cases.
Figure 13.3-3 Devices
For Which The FB Modifier Must Be Reported With The Procedure When Furnished
Without Cost Or At Full Credit For A Replacement Device
|
Device HCPCS Code
|
Descriptor
|
|
C1721
|
AICD, dual chamber
|
|
C1722
|
AICS, single chamber
|
|
C1728
|
Cath, brachytx seed adm
|
|
C1764
|
Event recorder, cardiac
|
|
C1767
|
Generator, neurostim, imp
|
|
C1771
|
Rep Dev urinary, w/sling
|
|
C1772
|
Infusion pump, programmable
|
|
C1776
|
Joint device (implantable)
|
|
C1777
|
Lead, AICD, endo single coil
|
|
C1778
|
Lead neurostimulator
|
|
C1779
|
Lead, pmkr, transvenous VDD
|
|
C1785
|
Pmkr, dual rate-resp
|
|
C1786
|
Pmkr, single rate-resp
|
|
C1789
|
Prosthesis, breast, imp
|
|
C1813
|
Prostheses, penile, inflatab
|
|
C1815
|
Pros, urinary sph, imp
|
|
C1820
|
Generator, neuro, rechg bat
sys
|
|
C1882
|
AICD, other than sing/dual
|
|
C1891
|
Infusion pump, non-prog, perm
|
|
C1895
|
Lead, AICD, endo dual coil
|
|
C1896
|
Lead, AICD, non sing/dual
|
|
C1897
|
Lead, neurostim, test kit
|
|
C1898
|
Lead, pmkr, other than trans
|
|
C1899
|
Lead, pmkr/AICD combination
|
|
C1900
|
Lead coronary venous
|
|
C2619
|
Pmkr, dual, non rate-resp
|
|
C2620
|
Pmkr, single, non rate-resp
|
|
C2621
|
Pmkr, other than sing/dual
|
|
C2622
|
Pmkr, other than sing/dual
|
|
C2626
|
Infusion pump, non-prog, temp
|
|
C2631
|
Rep dev, urinary, w/o sling
|
|
L8600
|
Implant breast silicone/eq
|
|
L8614
|
Cochlear device/system
|
|
L8685
|
Implt nrostm pls gen sng rec
|
|
L8686
|
Implt nrostm pls gen sng non
|
|
L8687
|
Implt nrostm pls gen dua rec
|
|
L8688
|
Implt nrostm pls gen dua non
|
|
L8690
|
Aud osseo dev, int/ext comp
|
Figure 13.3-4 Adjustments
To APCs In Cases Of Devices Reported Without
Cost Or For Which Full Credit Is Received For CY 2009
|
APC
|
SI
|
APC Group
Title
|
Device
Offset Percentage For No-Cost/Full Credit Case
|
Device
Offset Percentage For Partial Credit Case
|
|
0039
|
S
|
Level I Implantation of Neurostimulator
|
84
|
42
|
|
0040
|
S
|
Percutaneous Implantation of
Neurostimulator Electrodes, Excluding Cranial Nerve
|
57
|
29
|
|
0061
|
S
|
Laminectomy, Laparoscopy, or
Incision for Implantation of Neurostimulator Electrodes, Excluded
|
62
|
31
|
|
0089
|
T
|
Insertion/Replacement of Permanent
Pacemaker and Electrodes
|
72
|
36
|
|
0090
|
T
|
Insertion/Replacement of Pacemaker
Pulse Generator
|
74
|
37
|
|
0106
|
T
|
Insertion/Replacement/Repair
of Pacemaker Leads and/or Electrodes
|
43
|
21
|
|
0107
|
T
|
Insertion of Cardioverter-Defibrillator
|
89
|
45
|
|
0108
|
T
|
Insertion/Replacement/Repair
of Cardioverter-Defibrillator Leads
|
89
|
44
|
|
0222
|
T
|
Level II Implantation of Neurological
Device
|
85
|
42
|
|
0225
|
S
|
Implantation of Neurostimulator
Electrodes, Cranial
|
62
|
31
|
|
0227
|
T
|
Implantation of Drug Infusion
Devices
|
82
|
41
|
|
0229
|
T
|
Transcatheter Placement of
Intravascular Shunts
|
84
|
42
|
|
0259
|
T
|
Level IV ENT Procedures
|
88
|
44
|
|
0315
|
T
|
Level III Implantation of Neurostimulator
|
59
|
29
|
|
0385
|
S
|
Level I Prosthetic Urological
Procedures
|
69
|
34
|
|
0386
|
S
|
Level II Prosthetic Urological
Procedures
|
71
|
36
|
|
0418
|
T
|
Insertion of Left Ventricular
Pacing Elect
|
59
|
29
|
|
0425
|
T
|
Level II Arthroplasty or Implantation
with Prosthesis
|
46
|
23
|
|
0648
|
T
|
Level IV Breast Surgery
|
77
|
38
|
|
0654
|
T
|
Insertion/Replacement of a
Permanent Dual Chamber Pacemaker
|
76
|
38
|
|
0655
|
T
|
Insertion/Replacement/Conversion
of a Permanent Dual Chamber Pacemaker
|
71
|
36
|
|
0680
|
S
|
Insertion of Patient Activated
Event Recorders
|
71
|
35
|
|
0681
|
T
|
Knee Arthroplasty
|
71
|
36
|
3.12.4 If the APC to which the device
code (i.e., one of the codes in
Figure 13.3-3) is assigned is on the APCs listed
in
Figure 13.3-4,
the unadjusted payment rate for the procedure APC will be reduced
by an amount equal to the percent in
Figure 13.3-4 times the unadjusted
payment rate.
3.12.5 In cases in which the device
is being replaced without cost, the hospital will report a token
device charge. However, if the device is being inserted as an upgrade,
the hospital will report the difference between its usual charge
for the device being replaced and the credit for the replacement
device.
3.12.6 Multiple procedure reductions
would also continue to apply even after the APC payment adjustment
to remove payment for the device cost, because there would still
be the expected efficiencies in performing the procedure if it was
provided in the same operative session as another surgical procedure.
Similarly, if the procedure was interrupted before administration
of anesthesia (i.e., there was modifier 52 or 73 on
the same line as the procedure), a 50% reduction would be taken
from the adjusted amount.
3.13 Policies
Affecting Payment of New Technology Services
3.13.1 A process was developed that
recognizes new technologies that do not otherwise meet the definition of
current orphan drugs, or current cancer therapy drugs and biologicals
and brachytherapy, or current radiopharmaceutical drugs and biologicals
products. This process, along with transitional pass-throughs, provides additional
payment for a significant share of new technologies.
3.13.2 Special APC groups were created
to accommodate payment for new technology services. In contrast
to the other APC groups, the new technology APC groups did not take
into account clinical aspects of the services they were to contain,
but only their costs.
3.13.3 The SI of K is
used to denote the APCs for drugs, biologicals and pharmaceuticals
that are paid separately from, and in addition to, the procedure
or treatment with which they are associated, yet are not eligible for
transitional pass-through payment.
3.13.4 New items and services will
be assigned to these new technology APCs when it is determined that
they cannot appropriately be placed into existing APC groups. The
new technology APC groups provide a mechanism for initiating payment
at an appropriate level within a relatively short time frame.
3.13.5 As in the case of items qualifying
for the transitional pass-through payment, placement in a new technology
APC will be temporary. After information is gained about actual
hospital costs incurred to furnish a new technology service, it
will be moved to a clinically-related APC group with comparable
resource costs.
3.13.6 If a new technology service
cannot be moved to an existing APC because it is dissimilar clinically
and with respect to resource costs from all other APCs, a separate
APC will be created for such services.
3.13.7 Movement from a new technology
APC to a clinically-related APC will occur as part of the annual update
of APC groups.
3.13.8 The new technology APC groups
have established payment rates for the APC groups based on the midpoint
of ranges of possible costs; for example, the payment amount for
a new technology group reflecting a range of costs from $300 to
$500 would be set at $400. The cost range for the groups reflects
current cost distributions, and TRICARE reserves the right to modify
the ranges as it gains experience under the OPPS.
3.13.9 There are two parallel series
of technology APCs covering a range of costs from less than $50
to $6,000.
3.13.9.1 The two parallel sets of technology
APCs are used to distinguish between those new technology services
designated with a SI of S and those designated as T.
These APCs allow assignment to the same APC group procedures that
are appropriately subject to a multiple procedure payment reduction
(T) with those that should not be discounted (S).
3.13.9.2 Each set of technology APC
groups have identical group titles and payment rates, but a different
SI.
3.13.9.3 The new series of APC numbers
allow for the narrowing of the cost bands and flexibility in creating additional
bands as future needs may dictate. Following are the narrowed incremental
cost bands for the two series of new technology APCs:
• From $0 to $50 in increments
of $10.
• From $50 to $100 in a single
$50 increment.
• From $100 through $2,000 in
intervals of $100.
• From $2,000 through $6,000
in intervals of $500.
3.13.10 Beneficiary cost-sharing/copayment
amounts for items and services in the new technology APC groups are
dependent on the eligibility status of the beneficiary at the time
the outpatient services were rendered. (Refer to
Chapter
2, for applicable deductible cost-sharing/copayment amounts
for outpatient hospital services.)
3.14 Coding And Payment Of ED Visits
3.14.1 CPT defines an ED as “an organized
hospital based facility for the provision of unscheduled episodic services
to patients who present for immediate medical attention. The facility
must be available 24 hours a day.”
3.14.2 Sections 1866(a)(1)(I), 1866(a)(1)(N),
and 1867 of the Act impose specific obligations on Medicare-participating
hospitals that offer emergency services. These obligations concern
individuals who come to a hospital’s Dedicated Emergency Department
(DED) and request examination or treatment for medical conditions, and
apply to all of these individuals, regardless of whether or not
they are beneficiaries of any program under the Act. Section 1867(h)
of the Act specifically phohibits a delay in providing required
screening or stabilization services in order to inquire about the
individual’s payment method or insurance status.
3.14.3 These provisions are frequently
referred to as the Emergency Medical Treatment and Labor Act (EMTALA).
The EMTALA regulations define DED as any department or facility
of the hospital, regardless of whether it is located on or off the
main campus, that meets at least one of the following requirements:
3.14.3.1 It is licensed by the State
in which it is located under applicable State law as an ER or ED;
3.14.3.2 It is held out to the public
(by name, posted signs, advertising, or other means) as a place
that provides care for emergency medical conditions on an urgent
basis without requiring a previously scheduled appointment; or
3.14.3.3 During the CY immediately preceding
the CY in which a determination under the regulations is being made,
based on a representative sample of patient visits that occurred
during the CY, it provides at least one-third of all of its outpatient
visits for the treatment of emergency medical conditions on an urgent
basis without requiring previously scheduled appointment.
3.14.4 There are some departments
or facilities of hospitals that met the definition of a dedicated
ED under the EMTALA regulations, but did not meet the more restrictive
CPT definition of ED. For example, a hospital department or facility
that met the definition of a DED might not have been available 24
hours a day, seven days a week.
3.14.5 To determine whether visits
to EDs of facilities (referred to as Type B ED) that
incur EMTALA obligations, but do not meet the more prescriptive
expectations that are consistent with the CPT definition of an ED
(referred to as Type A ED) have different resource
costs than visits to either clinics or Type A EDs,
five G codes were developed for use by hospitals to
report visits to all entities that meet the definition of a DED
under the EMTALA regulations, but that are not Type A EDs.
These codes are called “Type B ED visit codes.” EDs
meeting the definition of a DED under the EMTALA regulations, but
which are not Type A EDs (i.e., they may meet the DED
definition but are not available 24 hours a day, seven days a week).
3.14.6 Hospitals report Type A ED
visits using CPT codes 99281-99285 and Type B ED visits using G0380-G0384.
3.14.7 A new HCPCS
G code
(G0390 - Trauma response team activation associated with hospital
critical care services) was also created (effective January 1, 2007)
to be used in addition to CPT codes 99291 and 99292 to address the
meaningful cost difference between critical care when billed with
and without trauma activation.
• If critical care is provided
without trauma activation, the hospital will bill with either CPT
codes 99291 or 99292, receiving payment for APC 0617.
• However if trauma activation
occurs, the hospital would be called to bill one unit of HCPCS G code
(G0390), report with revenue code 68x on the same date of service,
thereby receiving payment for APC 0618.
3.15 OPPS PRICER
3.15.1 Common PRICER software will
be provided to the contractor that includes the following data sources:
• National APC amounts
• Payment status by HCPCS code
• Multiple surgical procedure
discounts
• Fixed dollar threshold
• Multiplier threshold
• Device offsets
• Other payment systems pricing
files (CMAC, DMEPOS, and statewide prevailings)
3.15.2 The following data elements
will be extracted and forwarded to the outpatient PRICER for line
item pricing.
• Units;
• HCPCS/modifiers;
• APC;
• Status payment indicator;
• Line item date of service;
• Primary diagnosis code; and
• Other necessary OCE output.
3.15.3 The following data elements
will be passed into the PRICER by the contractors:
• Wage indexes (same as DRG wage
indexes);
• Statewide CCRs as provided
in the CMS Final Rule and listed on DHA’s OPPS website at
http://www.health.mil/rates;
• Locality Code: Based on CBSA
- two digit = rural and five digit = urban;
• Hospital Type: Rural SCH =
1 and All Others = 0
3.15.4 The outpatient PRICER will
return the line item APC and cost outlier pricing information used
in final payment calculation. This information will be reflected
in the provider remittance notice and beneficiary Explanation of
Benefits (EOB) with exception for an electronic 835 transaction.
Paper EOB and remits will reflect APCs at the line level and will
also include indication of outlier payments and pricing information
for those services reimbursed under other than OPPS methodology’s,
e.g., CMAC (SI of A) when applicable.
3.15.5 If a claim has more than one
service with a SI of
T or a SI of
S within
the coding range of 10000 - 69999, and any lines with SI of
T or
a SI within the coding range of 10000 - 69999 have less than $1.01
as charges, charges for all
T lines will be summed
and the charges will then be divided up proportionately to the payment
rates for each
T line (refer to
Figure 13.3-5). The new charge
amount will be used in place of the submitted charge amount in the line
item outlier calculator.
Figure 13.3-5 Proportional
Payment For “T” Line Items
|
SI
|
Charges
|
Payment Rate
|
New Charges Amount
|
|
Note: Because
total charges here are $20,000 and the first SI of T gets $6,000
of the $10,000 total payment, the new charge for that line is $6,000/$10,000
x $20,000 = $12,000.
|
|
T
|
$19,999
|
$6,000
|
$12,000
|
|
T
|
$1
|
$3,000
|
$6,000
|
|
T
|
$0
|
$1,000
|
$2,000
|
|
Total
|
$20,000
|
$10,000
|
$20,000
|
3.16 TRICARE
Specific Procedures/Services
3.16.1 TRICARE specific APCs have
been assigned for certain procedures covered by TRICARE but excluded
by Medicare.
3.16.2 Other procedures that are normally
covered under TRICARE but not under Medicare will be assigned SI of A (i.e.,
services that are paid under some payment method other than OPPS)
until they can be placed into existing or new APC groups.
3.17 Validation Reviews
OPPS claims are not subject
to validation review.
3.18 Hospital-Based
Birthing Centers
Hospital-based
birthing centers will be reimbursed the same as freestanding birthing
centers except the all inclusive rate consisting of the CMAC for
CPT code 59400 and the state specific non-professional component,
will lag two months (i.e., April 1 instead of February 1). See
Chapter
10, for information on freestanding birthing centers.