National Government Services, Inc. Medicare Monthly Review Part A and B
A Combined Part A and Part B Newsletter

October 2007 Update of the Hospital Outpatient Prospective Payment System (OPPS): Summary of Payment Policy Changes

Provider Types Affected
Providers submitting claims to Medicare contractors (fiscal intermediaries (FI), regional home health intermediaries (RHHI), and/or Medicare Administrative Contractors (A/B MAC)) for outpatient services furnished under the OPPS  

Impact On Providers
This article is based on Change Request (CR) 5718, which describes changes to the OPPS to be implemented in the October 2007 OPPS update. Be sure billing staff are aware of these changes.  

Background
CR 5718 describes changes to, and billing instructions for, various payment policies implemented in the October 2007 OPPS update. The October 2007 Integrated Code Editor (I/OCE) and OPPS PRICER will reflect the Healthcare Common Procedure Coding System (HCPCS), Ambulatory Payment Classification (APC), HCPCS Modifier, and Revenue Code additions, changes, and deletions identified in this notification.

October 2007 revisions to I/OCE data files, instructions, and specifications will be provided in Change Request (CR) 5723, “October 2007 Integrated Outpatient Code Editor (I/OCE) Specifications Version 8.3.”

Key changes in CR5718 are as follows:

Changes to Procedure to Device Edits
The effective dates for the previously existing procedure to device edits for the following procedures are changed from January 1, 2007 to October 1, 2005 in the October 2007 I/OCE:

19296 Placement of radiotherapy afterloading balloon catheter into the breast for interstitial radioelement application following partial mastectomy, includes imaging guidance; on date separate from partial mastectomy.

19297 Placement of radiotherapy afterloading balloon catheter into the breast for interstitial radioelement application following partial mastectomy, includes imaging guidance; on date separate from partial mastectomy concurrent with partial mastectomy (List in addition to code for primary procedure)

93651 Intracardiac catheter ablation of arrhythmogenic focus; for treatment of supraventricular tachycardia by ablation of fast or slow atrioventricular pathways, accessory atrioventricular connection or other atrial foci, singly or in combination.

Correction to the Offset Percentages for APCs 0315 and 0385
The Centers for Medicare & Medicaid Services (CMS) reduces the payment for selected Ambulatory Payment Classes (APC) when specified devices are furnished to the hospital without cost or with a full credit for the cost of the device being replaced. The tables that contain the devices and APCs to which the policy applies can be found on the CMS Web site at http://www.cms.hhs.gov/HospitalOutpatientPPS/HORD/ under supporting documentation for CMS-1506 FC.

There were errors in the entries for two APCs in the table of adjustment percentages and adjustment amounts that were posted before October 1, 2007. The table containing the corrected amounts is now posted at http://www.cms.hhs.gov/HospitalOutpatientPPS/HORD/ under supporting documentation for CMS-1506 FC and is titled: “2007 OPPS Without Cost or With Credit Device Information; corrected 10/01/2007.”

Table 1, below, shows both the incorrect and correct offset percentages and adjustment amounts for APC 0315 (Level II Implantation of Neurostimulator) and APC 0385 (Level I Prosthetic Urological Procedures). The OPPS PRICER for October 2007 contains the corrected amounts with an effective date of January 1, 2007. Your Medicare contractors will adjust claims previously processed for APCs 0315 and 0385 where the modifier FB was reported on the line with the 0315 or 0385, if you bring such claims to their attention.

Matters Number: MM5718 Related Change Request Number: 5718

Table 1

Offset Percentages and Adjustment Amounts for APCs 0315 and 0385

Billing for Drugs, Biologicals, and Radiopharmaceuticals
Hospitals are strongly encouraged to report charges for all drugs, biologicals, and radiopharmaceuticals (regardless of whether the items are paid separately or packaged) using the correct HCPCS codes for the items used. It is also very important that hospitals, billing for these products, make certain that the reported units of service of the reported HCPCS code are consistent with the quantity of a drug, biological, or radiopharmaceutical that was used in caring for the patient.

We remind hospitals that under the OPPS, if commercially available products are being mixed together to facilitate their concurrent administration, the hospital should report the quantity of each product (reported by HCPCS code) used in the care of the patient. Alternatively, if the hospital is compounding drugs that are not a mixture of commercially available products, but are a different product that has no applicable HCPCS code, then the hospital should report an appropriate unlisted drug code (J9999 or J3490). In these situations, we remind hospitals that it is not appropriate to bill HCPCS code C9399. HCPCS code C9399, Unclassified drug or biological, is for new drugs and biologicals that are approved by FDA on or after January 1, 2004, for which a HCPCS code has not been assigned.

Drugs and Biologicals with Payments Based on Average Sales Price (ASP) Effective October 1, 2007

In the CY 2007 OPPS final rule, it was stated that payments for separately payable drugs and biologicals based on average sale price (ASP) will be updated on a quarterly basis, as later quarter ASP submissions become available. In cases where adjustments to payment rates are necessary based on the most recent ASP submissions, changes to the payment rates will be incorporated in the October 2007 release of the OPPS PRICER. The updated payment rates effective October 1, 2007, will be included in the October 2007 update of the OPPS Addendum A and Addendum B, which will be posted at http://www.cms.hhs.gov/HospitalOutpatientPPS/AU/list.asp on the CMS Wed site at the end of September.

Updated Payment Rate for Selected Drugs and Biologicals Effective January 1, 2007 through March 31, 2007

The payment rates for the HCPCS codes in Table 2 below were incorrect in the January 2007 OPPS PRICER. The corrected payment rates are listed in Table 2 are in the October 2007 OPPS PRICER, effective for services furnished on January 1, 2007, through implementation of the April 2007 update. Note that your FI, RHHI, or A/B MAC will adjust claims that you bring to their attention when the claims have dates of service that fall on or after January 1, 2007, but prior to April 1, 2007, contain a HCPCS code listed in Table 2, and were originally processed prior to the installation of the October 2007 OPPS PRICER.

Table 2

Updated Payment Rate for HCPCS Code Q3025

Effective January 1, 2007 through March 31, 2007

Updated Payment Rates for Selected Drugs and Biologicals Effective April 1, 2007 through June 30, 2007

In the April 2007 OPPS PRICER, the payment rate for APC 9022 was incorrect and the payment rate for APC 0767 was not updated (as the APC 0767 rate did not change from the January rate). The corrected payment rates are listed in Table 3, below, and have been installed in the October 2007 OPPS PRICER, effective for services furnished on April 1, 2007, through June 30, 2007. Note that your FI, RHHI, or A/B MAC will adjust claims that you bring to their attention when the claims have dates of service that fall on or after April 1, 2007, but prior to July 1, 2007; contain at least one of the HCPCS codes listed in Table 3; and were originally processed prior to the installation of the October 2007 OPPS PRICER.

Table 3

Updated Payment Rates for Selected Drugs and Biologicals

Effective April 1, 2007 through June 30, 2007

New HCPCS Drug Code Separately Payable Under OPPS as of October 1, 2007

The drug shown in Table 4, below, has been designated as eligible for separate payment under the OPPS effective October 1, 2007.

Table 4

New Drug Separately Payable under OPPS as of October 1, 2007

The payment rate for this drug can be found in the October 2007 update of OPPS Addendum A and Addendum B which will posted at http://www.cms.hhs.gov/HospitalOutpatientPPS/AU/list.asp on the CMS Web site at the end of September.

Correct Reporting of Drugs and Biologicals When Used As Implantable Devices
Hospitals should not bill separately for drug and biological HCPCS codes except when using drugs and biologicals with pass-through status as implantable devices (including as a scaffold or an alternative to human or nonhuman connective tissue or mesh used in a graft) during surgical procedures.

Under the OPPS, hospitals are provided a packaged APC payment for surgical procedures that includes the cost of supportive items, including implantable devices without pass-through status. When using drugs and biologicals as implantable devices during surgical procedures, hospitals may include the charges for these items in their charge for the procedure, report the charge on an uncoded revenue center line or report the charge under a device HCPCS code, if one exists, so these costs would contribute to the future median setting for the associated surgical procedure.

Correct Reporting of Units for Drugs
Hospitals and providers need to ensure that units of drugs administered to patients are 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. For example, if the description for the drug code is 6 mg, and 6 mg of the drug was administered to the patient, the units billed should be one. Similarly, if the description for the drug code is 50 mg but 200 mg of the drug was administered to the patient, the units billed should be four.

Providers and hospitals should bill the units based on the way the drug is administered, not on the way that it 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; you should bill ten units, even though only one vial was administered. HCPCS short descriptors are limited to 28 characters, including spaces, so short descriptors do not always capture the complete description of the drug. Therefore, before submitting Medicare claims for drugs and biologicals, it is extremely important to review the complete long descriptors for the applicable HCPCS codes.

Coverage Determinations
The fact that a drug, device, procedure or service is assigned a HCPCS code and a payment rate under the OPPS does not imply coverage by the Medicare program, but indicates only how the product, procedure, or service may be paid if covered by the program. Fiscal intermediaries determine whether a drug, device, procedure, or other service meets all program requirements for coverage; such as whether a drug is reasonable and necessary to treat the beneficiary’s condition and whether it is excluded from payment.

Revisions to Medicare Claims Processing Manual
CR 5718 also includes several changes to sections in Chapter 4 (Part B Hospital (Including Inpatient Hospital Part B and OPPS)) of the Medicare Claims Processing Manual. You may want to review these updated manual sections.

Additional Information
You can find more information about the October 2007 update of the hospital OPPS summary of payment policy changes by going to CR 5718, located at http://www.cms.hhs.gov/Transmittals/downloads/R1336CP.pdf on the CMS Wed site. You will find the amended Medicare Claims Processing Manual, Chapter 4 (Part B Hospital (Including Inpatient Hospital Part B and OPPS)) as an attachment to that CR.

The list of devices eligible for transitional pass-through payments changes as 1) New device categories are approved for pass-through payment status on an ongoing basis, and 2) Device categories expire from transitional pass-through payment; and their costs are included in APC rates for associated surgical procedures. To view or download the latest complete list of currently payable and previously payable pass-through device categories, refer to http://www.cms.hhs.gov/HospitalOutpatientPPS/04_passthrough_payment.asp#TopOfPage on the CMS Wed site.

Remember that the OCE will return to the provider any claim that reports a HCPCS code for a procedure listed in the table of device edits that does not also report at least one device HCPCS code required for that procedure as listed at http://www.cms.hhs.gov/HospitalOutpatientPPS/ on the CMS Wed site. The OCE will also return to the provider claims for which specified devices are billed without the procedure code that is necessary for the device to have therapeutic benefit to the patient. These edits are also listed at http://www.cms.hhs.gov/HospitalOutpatientPPS/ on the CMS Wed site. This table shows the effective date for each edit. If the claim is returned to the provider for failure to pass the edits, the hospital will need to modify the claim by either correcting the device code or ensuring that one of the required procedure codes is on the claim before resubmission.

If you have any questions, please contact your FI, RHHI, or A/B MAC at their toll-free number, which may be found at http://www.cms.hhs.gov/MLNProducts/downloads/CallCenterTollNumDirectory.zip on the CMS Wed site.

Disclaimer
This article was prepared as a service to the public and is not intended to grant rights or impose obligations. This article may contain references or links to statutes, regulations, or other policy materials. The information provided is only intended to be a general summary. It is not intended to take the place of either the written law or regulations. We encourage readers to review the specific statutes, regulations and other interpretive materials for a full and accurate statement of their contents.

News Flash – The revised Sole Community Hospital Fact Sheet (March 2007), which provides information about Sole Community Hospital classification and payments, is now available in print format from the Centers for Medicare & Medicaid Services Medicare Learning Network. To place your order, visit http://www.cms.hhs.gov/mlngeninfo , scroll down to “Related Links Inside CMS,” and select “MLN Product Ordering Page.”