July 2007 Update of the Hospital Outpatient Prospective Payment System (OPPS): Summary of Payment Policy Changes (MM5623) Provider Types Affected Provider Action Needed Impact to You What You Need to Know What You Need to Do Background
The Medicare OPPS procedure to device edits and device to procedure edits are posted on the CMS Web site at http://www.cms.hhs.gov/HospitalOutpatientPPS/ The following new procedure to device edits are being implemented in the July 2007 OCE with the effective dates shown. Although the device edits for G0392 and G0393, new HCPCS codes for 2007, are effective for services furnished on or after January 1, 2007, no action is required on claims for these services that were processed before the implementation of the July 2007 OCE.
Table 1- New Procedure to Device Edits for Implementation in the July 2007 OCE
The following new service is assigned for payment under the OPPS:
Table 2-New Service Payable as of July 1, 2007
The AMA releases Category III CPT codes in January, for implementation beginning the following July, and in July, for implementation beginning the following January. Prior to CY 2006, CMS implemented new Category III CPT codes once a year in January of the following year. As discussed in the CY 2006 OPPS final rule with comment period (70 FR 68567), CMS modified the process for implementing the Category III codes that the AMA releases each January for implementation in July. CMS does this:
Therefore, on July 1, 2007, CMS implements five Category III CPT codes in the OPPS that the AMA released in January 2007 for implementation in July 2007. The codes, along with their status indicators and APCs, are shown in Table 3 below.
Table 3 -Category III CPT Codes Implemented as of July 1, 2007
The Medicare Modernization Act of 2003 (MMA) requires Medicare to pay for brachytherapy sources in separately paid APCs, and for the period of January 1, 2004 through December 31, 2006, to pay for brachytherapy sources at hospitals’ charges adjusted to their cost. Effective January 1, 2007, CMS continued to pay for specified brachytherapy sources separately, pursuant to MMA, and at hospitals’ charges adjusted to their cost pursuant to the Tax Relief and Health Care Act of 2006 (TRHCA), which extends the charges adjusted to cost payment for brachytherapy sources until January 1, 2008. The TRHCA also requires that CMS create separate APC groups for stranded and non-stranded sources furnished on or after July 1, 2007. CMS is currently aware of three sources that come in stranded and non-stranded forms: iodine, palladium, and cesium. Therefore, CMS created six new codes to reflect these three sources in stranded and non-stranded versions. At the same time, CMS is deleting the three non-specific brachytherapy source codes for iodine, palladium, and cesium. The deleted brachytherapy source codes, effective July 1, 2007, are listed in Table 5 below.
The new codes for these separately paid sources, long descriptors and APCs are listed in Table 4, the comprehensive brachytherapy source table below, payable as of July 1, 2007. Please note that when billing for stranded sources, providers should bill the number of units of the appropriate source HCPCS C-code according to the number of brachytherapy sources in the strand, and should not bill as one unit per strand. If a hospital applies both stranded and non-stranded sources to a patient in a single treatment, the hospital should bill the stranded and non-stranded sources separately, according to the differentiated HCPCS codes listed in Table 4 below.
Below is coding information for all brachytherapy sources payable as of July 1, 2007. Please note that CMS has added the term “non-stranded” to the descriptors for all sources that are described as “per source,” other than iodine-125, palladium-103 and cesium-131, for which CMS has separate stranded or non-stranded codes. All changes, i.e., new codes and descriptors and changes to existing code descriptors are noted in bold.
Table 4- Comprehensive List of Brachytherapy Sources Payable as of July 1, 2007
If CMS receives information that any of the sources listed above now designated as non-stranded (i.e., other than iodine, palladium and cesium sources) are also FDA-approved and marketed as a stranded source, CMS will create coding information for the stranded source. CMS has also established two Not Otherwise Specified (NOC) codes for stranded and non-stranded sources that are not yet known to us and for which CMS does not have source-specific codes. If a hospital purchases a new FDA-approved and marketed radioactive source consisting of a radioactive isotope, (consistent with our definition of a brachytherapy source eligible for separate payment, discussed in the November 24, 2006 final rule, 71 FR 68113), for which CMS does not yet have a separate source code established, the hospital should bill such sources using the appropriate NOS codes found in Table 4 above, i.e., C2698 for stranded NOS sources, and C2699 for non-stranded NOS sources. For example, if a new FDA-approved stranded source comes onto the market and there is currently only a billing code for the non-stranded source, the hospital should bill the stranded source under C2698 (stranded NOS source) until a specific stranded billing code for the source is established. Hospitals and other parties are invited to submit recommendations to CMS for new HCPCS codes to describe new sources consisting of a radioactive isotope, including a detailed rationale to support recommended new sources. CMS will continue to endeavor to add new brachytherapy source codes and descriptors to our systems for payment on a quarterly basis. Please direct such recommendations to: The Division of Outpatient Care
CMS is deleting the following codes for iodine, palladium, and cesium sources, effective July 1, 2007, which do not specify whether sources are stranded or non-stranded.
Table 5 - Brachytherapy Source Codes Deleted as of July 1, 2007
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 of great importance 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 the care of the patient.
In the CY 2007 OPPS final rule, it was stated that payments for separately payable drugs and biologicals based on average sale prices (ASPs) 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, CMS will incorporate changes to the payment rates in the July 2007 release of the OPPS PRICER. The updated payment rates effective July 1, 2007, will be included in the July 2007 update of the OPPS Addendum A and Addendum B, which will be posted at http://www.cms.hhs.gov/HospitalOutpatientPPS/AU/list.asp#TopOfPage
The payment rates for the drugs and biologicals listed below were incorrect in the April 2007 OPPS PRICER. The corrected payment rates will be installed in the July 2007 OPPS PRICER effective for services furnished on January 1, 2007, through March 31, 2007. Your Medicare contractor will adjust claims processed at the incorrect rates if you bring such claims to their attention.
Table 6-Updated Payment Rates for Certain Drugs and Biologicals Effective January 1, 2007 through March 31, 2007
The payment rates for the drugs and biologicals listed below were incorrect in the April 2007 OPPS PRICER. The corrected payment rates will be installed in the July 2007 OPPS PRICER effective for services furnished on April 1, 2007 through June 30, 2007. Your Medicare contractor will adjust claims processed at the incorrect rates if you bring such claims to their attention.
Table 7-Updated Payment Rates for Certain Drugs and Biologicals Effective April 1, 2007 through June 30, 2007
The following drug has been designated as eligible for pass-through status under the OPPS effective July 1, 2007.
Table 8-Newly-Approved Drug Eligible for Pass-Through Status as of July 1, 2007 The payment rate for this drug can be found in the July 2007 update of OPPS Addendum A and Addendum B which will posted at http://www.cms.hhs.gov/HospitalOutpatientPPS/AU/list.asp#TopOfPage
The following seven HCPCS drug codes will be made effective July 1, 2007. These HCPCS codes will be separately payable under the hospital OPPS. The payment rates for these drugs can be found in the July 2007 update of OPPS Addendum A and Addendum B which will posted on the CMS Web site at the end of June.
Table 9-New Drug Codes Separately Payable under OPPS as of July 1, 2007
Table 10-Drug Codes for Zometa and Reclast under the OPPS as of July 1, 2007
HCPCS code J1567 will no longer be recognized by Medicare effective July 1, 2007. Therefore, HCPCS code J1567 will no longer be reportable under the hospital OPPS. To report those drugs previously reported under HCPCS code J1567, refer to HCPCS codes Q4087, Q4088, Q4091, or Q4092.
Table 11-Drug Code Not Reportable Under the Hospital OPPS as of July 1, 2007
Hospitals and providers are reminded 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 1. As another example, 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 4. Providers and 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 1 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.
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. For example, fiscal intermediaries determine that it is reasonable and necessary to treat the beneficiary’s condition and whether it is excluded from payment. Additional Information If you have any questions, please contact your Medicare FI, RHHI, or A/B MAC at their toll-free number, which may be found on the CMS Web site at: http://www.cms.hhs.gov/MLNProducts/downloads/CallCenterTollNumDirectory.zip. Disclaimer MLN Matters Number: MM5623 Critical Access Hospital Fact Sheet Available The Critical Access Hospital Fact Sheet, which provides general information about Critical Access Hospitals, is now available in downloadable format at http://www.cms.hhs.gov/MLNProducts/downloads/CritAccessHosp07fctsht.pdf
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under “downloads.” There are no new device to procedure edits for the July 2007 OCE. Therefore, the April 2007 file of device to procedure edits remains unchanged for the July 2007 OCE quarter. 
