Issue 2006-03, March 2006

January 2006 Update of the Hospital Outpatient Prospective Payment System (OPPS): Summary of Payment Policy Changes and OPPS PRICER Logic Changes

Provider Types Affected
Providers billing Medicare fiscal intermediaries (FIs) and/or regional home health intermediaries (RHHIs) for services subject to the OPPS

Provider Action Needed

Impact to You
This article is based on Change Request (CR) 4250, which describes changes to, and billing instructions for, various payment policies implemented in the January 2006 OPPS update, and changes to the OPPS PRICER logic.

What You Need to Know
Unless otherwise noted, all changes addressed in CR 4250 are effective for services furnished on or after January 1, 2006.

What You Need to Do
See the Background section of this article for further details regarding the January 2006 Update to the hospital OPPS.

Background
Change Request (CR) 4250 describes changes to, and billing instructions for, various payment policies implemented in the January 2006 OPPS update. The January 2006 OPPS Outpatient Code Editor (OCE) and OPPS PRICER reflect the additions, changes, and deletions to:

• Healthcare Common Procedure Coding System (HCPCS) codes;
• Ambulatory Payment Classification (APC);
• HCPCS Modifier; and
• Revenue Codes.

CR4250 further describes changes to the OPPS PRICER logic.

Changes to the OPPS PRICER Logic
CR4250 makes the following changes to the OPPS PRICER Logic:

• Hospitals reclassified for the Inpatient Prospective Payment System (IPPS) effective October 1, 2005, will be reclassified for OPPS effective January 1, 2006.
• Section 401 designations and floor Metropolitan Statistical Area (MSA) designations effective October 1, 2005, will be effective for OPPS January 1, 2006.
• Rural sole community hospitals will receive a 7.1 percent payment increase in 2006.
• New OPPS payment rates and coinsurance amounts will be effective January 1, 2006. All coinsurance rates will be limited to 40 percent of the APC payment rate. Coinsurance rates cannot exceed the inpatient deductible of $952.
• For hospital outlier payments under OPPS, there will be no change in the multiple threshold of 1.75. This threshold of 1.75 is multiplied by the total line item APC payment to determine eligibility for outlier payments. This factor also is used to determine the outlier payment, which is 50 percent of estimated cost less 1.75 times the APC payment amount.

The payment formula is (cost – (APC payment x 1.75))/2.

• For outliers for Community Mental Health Centers (CMHCs; bill type 76X), there will be a new multiple threshold of 3.4. The previous threshold was 3.5. The new threshold of 3.4 is multiplied by the total line item APC payment to determine eligibility for outlier payments. This factor is also used to determine the outlier payment, which is 50 percent of estimated costs less 3.4 times the APC payment amount. The payment formula is (cost – (APC payment x 3.4))/2. CMHC outlier payments are not subject to a fixed dollar threshold.

New Service The following new service is assigned for payment under the OPPS:

The code is to be used as its descriptor states, for placement or removal (if performed) of an applicator into the breast for radiation therapy. C9726 should be billed when such a service is performed and a more specific CPT or HCPCS code that better describes the service is not available. C9726 does not describe the delivery of radiation therapy or the application or placement of radioactive sources.

New Device Pass-Through Category
The Social Security Act (Section 1833(t)(6)(B), http://www.ssa.gov/OP_Home/ssact/title18/1833.htm ), requires that (under the OPPS) categories of devices be eligible for transitional pass-through payments for at least two years, but not more than three years. Section 1833(t)(6)(B)(ii)(IV) requires that CMS create additional categories for transitional pass-through payment of new medical devices not described by existing or previously existing categories of devices.

Table 2: New Device Category Pass-through Coding Information

Device Offset from Payment
The Social Security Act (Section 1833(t)(6)(D)(ii)) requires that CMS deduct from pass-through payments for devices an amount that reflects the portion of the APC payment amount that CMS determines is associated with the cost of the device (70 FR 68627-8).

CMS has determined that it is able to identify the portion of the APC payment amount associated with the cost of the historically utilized device, that is, the nonrechargeable neurostimulator generator implanted through procedures assigned to APC 222, Implantation of Neurological Device that C1820 would replace.

Revision of Device Category Descriptor for C1767
Section 1833(t)(6)(B)(ii)(IV) of the Social Security Act and 42 CFR 419.66(c)(1) require that CMS establish a new category for a medical device when no existing or previously existing device category is appropriate for the device (67 FR 66781).

In the November 10, 2005 OPPS final rule with comment period for CY 2006 ( http://www.access.gpo.gov/su_docs/fedreg/a051110c.html ), CMS announced that effective January 1, 2006, an additional category will be created for devices that meet all of the criteria required to establish a new category for pass-through payment in instances where CMS believes that an existing or previously existing category descriptor does not appropriately describe the new type of device.

• Revised long descriptor : Generator, neurostimulator (implantable), nonrechargeable
• Revised short descriptor : Generator, neuro nonrecharge

These revisions to category C1767’s descriptors are effective on and after January 1, 2006, and do not apply to claims for services provided prior to January 1, 2006.

Modifier-FB; Item Provided without Cost to Provider, Supplier or Practitioner (Examples, but not Limited to: Covered Under Warranty, Replaced Due to Defect, Free Samples)

Effective for services furnished on or after January 1, 2006, hospitals must report HCPCS modifier -FB with the HCPCS code for a device that was furnished to the hospital without cost to the provider.

Modifier -52

Billing for Drugs, Biologicals, and Radiopharmaceuticals

New HCPCS Codes and Dosage Descriptors for Certain Drugs, Biologicals, and Radiopharmaceuticals

Due to its length, Table 4 is not included in this article, but it can be reviewed in CR4250, which can be found at http://new.cms.hhs.gov/transmittals/downloads/R786CP.pdf on the CMS Web site.

• A4644 [Supply of low osmolar contrast material (100-199 mgs of iodine)];
• A4645 [Supply of low osmolar contrast material (200-299 mgs of iodine)]; and
• A4646 [Supply of low osmolar contrast material (300-399 mgs of iodine)]

They are replaced with HCPCS codes Q9945-Q9951 for reporting in the CY 2006 OPPS. The descriptors for the replacement Q-codes for LOCM are listed below:

HCPCS codes A4643 (Supply of additional high dose contrast material(s) during magnetic resonance imaging, e.g., gadoteridol injection) and A4647 (Supply of paramagnetic contrast material, e.g., gadolinium) that are used to describe MRI contrast agents will be discontinued effective December 31, 2005 and replaced with HCPCS codes Q9952-Q9954 for reporting in the CY 2006 OPPS. The descriptors for the replacement Q-codes for MRI contrast agents are listed in Table 4 below.

Table 4: Coding Changes for MRI Contrast Agents

Beginning on January 1, 2006, hospitals can use the HCPCS codes Q9958-Q9964 to bill for high osmolar contrast material (HOCM) under the OPPS. The descriptors for the new Q-codes for HOCM are listed in Table 5 below. Table 5: Coding Changes for HOCM

Coding for Sodium Hyaluronan Products In CY 2006, hospitals must use the following HCPCS codes to bill for sodium hyaluronan products under the OPPS:

Billing for Preadministration-Related Services Associated With Intravenous Immune Globulin Administration

In the CY 2006 hospital OPPS final rule published in the Federal Register on November 10, 2005, ( http://www.access.gpo.gov/su_docs/fedreg/a051110c.html ), CMS announced that they would establish a temporary add-on payment for hospital outpatient departments that administer intravenous immune globulin (IVIG) to Medicare beneficiaries for 2006.

Table 6: New Coding Information for Preadministration-Related Services Associated with Intravenous Immune Globulin Administration

Drugs and Biologicals with Payments Based on Average Sales Price (ASP) Effective January 1, 2006
The CY 2006 OPPS final rule (70 FR 68643, http://www.access.gpo.gov/su_docs/fedreg/a051110c.html ) stated that payments for drugs and biologicals based on average sale prices (ASP) will be updated on a quarterly basis as later quarter ASP submissions become available. Effective January 1, 2006, payment rates for many drugs and biologicals have changed from the values published in the CY 2006 OPPS final rule as a result of the new ASP calculations based on sales price submissions from the third quarter of CY 2005.

Coding and Payment Changes for Administration of Hepatitis B Vaccine
Effective for services furnished on or after January 1, 2006, providers paid under the OPPS—hospitals (bill types 12X and 13X) and home health agencies (bill type 34X)—should use the following CPT codes to report administration of hepatitis B vaccine:

90471 Immunization administration (includes percutaneous, intradermal, subcutaneous, or intramuscular injections); one vaccine (single or combination vaccine/toxoid); or

Billing for Intensity Modulated Radiation Therapy
Intensity modulated radiation therapy (IMRT), also known as conformal radiation, delivers radiation with adjusted intensity to preserve adjoining normal tissue. IMRT has the ability to deliver a higher dose of radiation within the tumor while delivering a lower dose of radiation to surrounding healthy tissue. IMRT is provided in two treatment phases, planning and delivery. Two methods by which IMRT can be delivered to patients include multi-leaf collimator-based IMRT and compensator-based IMRT.

• When billing for the planning of IMRT treatment services, CPT codes 77280 through 77295, 77305 through 77321, 77336, and 77370 are not to be billed in addition to 77301; however, charges for those services should be included in the charge associated with CPT code 77301.
• Hospitals are not prohibited from using existing CPT code 77301 to bill for compensator-based IMRT planning in the hospital outpatient setting.
• As instructed in the 2006 CPT manual, hospitals should bill CPT code 77418 for multi-leaf collimator-based IMRT delivery and Category III CPT code 0073T for compensator-based IMRT delivery in the hospital outpatient setting.
• Payment for IMRT planning does not include payment for CPT codes 77332 through 77334 when furnished on the same day. When provided, these services are to be billed in addition to the IMRT planning code 77301.
• Providers billing for both CPT codes 77301 (IMRT treatment planning) and 77334 (design and construction of complex treatment devices) on the same day should append a modifier –59.

Billing for Positron Emission Tomography (PET) Scans
As a result of a recent Medicare national coverage decision (Publication 100-3, Medicare National Coverage Determinations, Section 220.6, effective January 28, 2005), CMS discontinued the HCPCS alphanumeric codes with initial letter “G” that had been used to report PET scans (Table 7 below), and activated the CPT codes listed below in Table 8 below for myocardial and nonmyocardial PET scans and concurrent PET/CT scans for anatomical localization.

Table 7: HCPCS Codes Not Valid for Medicare for Dates of Service on or after January 28, 2005

Table 8: CPT Codes for Covered PET Scan Indications Effective for Dates of Service on or after January 28, 2005

Effective January 28, 2005, hospitals should report the CPT codes listed in Table 8 above for myocardial and nonmyocardial PET scans and concurrent PET/CT scans for anatomical localization delivered in the hospital outpatient setting.

In addition, in the CY 2006 OPPS final rule (70 FR 68581, http://www.access.gpo.gov/su_docs/fedreg/a051110c.html ) CMS changed the status indicator for CPT code 78609 (Brain imaging, PET; perfusion evaluation) from “S” (separately paid under the OPPS) to “E” (not paid under the OPPS) retroactive to January 28, 2005, as historically there has been and currently there remains no coverage for this service under the Medicare program.

Billing for Stereotactic Radiosurgery
Stereotactic radiosurgery (SRS) is a form of radiation therapy for treating abnormalities, functional disorders, and tumors of the brain, neck, and most recently has expanded to treating tumors of the spine, lung, pancreas, prostate, bone, and liver.

Billing for Wound Care Services
Pursuant to a congressional mandate to pay for all therapy services under one prospective payment system, CMS created a therapy code list to identify and track outpatient therapy services paid under the Medicare Physician Fee Schedule (MPFS). (Balanced Budget Act of 1997, Pub. L. 105-33, Section 1834(k)(5)) CMS provides this list of therapy codes along with their respective designations in the Medicare Claims Processing Manual (Pub. 100-04, Chapter 5, Section 20, at http://www.cms.hhs.gov/manuals/downloads/clm104c05.pdf on the CMS Web site).

“Always” versus “Sometimes” Therapy
CMS defines an “always therapy” service as a service that must be performed by a qualified therapist under a certified therapy plan of care, and a “sometimes therapy” service as a service that may be performed by a non-therapist outside of a certified therapy plan of care.

In order to pay hospitals accurately when delivering these “sometimes therapy” services independent of a therapy plan of care, CMS is establishing payment rates for CPT codes 97597, 97598, 97602, 97605, and 97606 under the OPPS when performed as non-therapy services in the hospital outpatient setting.

To further clarify, hospitals will receive separate payment under the OPPS when they bill for wound care services described by CPT codes 97597, 97598, 97602, 97605, and 97606 that are furnished to hospital outpatients by non-therapists independent of a therapy plan of care.

In contrast, when such services are performed by a qualified therapist under an approved therapy plan of care, providers should attach an appropriate therapy modifier (that is, GP for physical therapy, GO for occupational therapy, and GN for speech-language pathology) and/or report their charges under a therapy revenue code (that is, 420, 430, or 440) to receive payment under the MPFS.

Billing for Therapeutic Apheresis

• Include the charge for the protein A column in the procedure charge for CPT 36515; or
• May report the charge separately on a line with an appropriate supply revenue code.

Similarly, when billing CPT code 36516 to report extracorporeal selective adsorption or selective filtration and plasma reinfusion for indications such as familial hypercholesterolemia, supply charges may be included either in the procedure charge for CPT code 36516 or reported separately on a line with an appropriate supply revenue code.

Lastly, when billing CPT code 36522 to report extracorporeal photopheresis for indications such as cutaneous T cell lymphoma, hospital supply charges may be included in the charge for CPT code 36522 or billed separately on a line with an appropriate supply revenue code. In all cases, payments for the supplies are packaged into the OPPS payments for the apheresis service.

Billing for Allergy Testing

Table 10: Assignment of CPT Codes to APC 0370 and APC 0381 for CY 2006

Corrections for the April 2006 Update
The following changes were not made in the January 2006 OPPS OCE and Addendum B but will be implemented in the April 2006 update:

Table 12: Short Descriptor Changes

Coverage Determinations
The fact that a drug, device, procedure, or service is assigned an 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.

Implementation
The implementation date for the instruction is January 3, 2006.

Additional Information

If you have any questions, please contact your FI/RHHI at their toll-free number, which may be found at http://www.cms.hhs.gov/apps/contacts/ on the CMS Web 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.

Pub. 100-4, Transmittal# 804, CR# 4250
Medlearn Matters Number: MM4250
Related CR Release Date: January 3, 2006
Effective Date: January 1, 2006
Implementation Date: January 3, 2006