Highlights of the 2008 OPPS Final Rule

CMS released the 2008 Final Outpatient Prospective Payment System (OPPS) and Ambulatory Surgery Center (ASC) rules on November 1, 2007. The final rule will be published in the Federal Register on November 27, 2007. The full text can be found at:

http://www.cms.hhs.gov/HospitalOutpatientPPS/HORD/
itemdetail.asp?itemID=CMS1204971

The following points are relevant in the final rule that affect EDs and facility/hospital-based clinics:

Visits

• CMS provided a significant amount of background and historical information about coding ED visits. They restated their definition of an ED, reviewed EMTALA regulations, and discussed the distinctions between type A and type B EDs (p. 841). CMS stated that the main difference between type A and B EDs is the full-time vs. part-time availability of staffed areas and not the process of care or site location (p. 850). CMS further noted that it expected hospitals to adjust their charges appropriately to reflect the differences in type A and B EDs (p. 847).
• CMS again discussed the AHA/AHIMA guidelines and summarized some of the other methodologies that have been proposed to CMS over the past year, including the presenting problem approach developed by LYNX Medical Systems (p. 863).
• CMS discussed comments regarding the need for national coding guidelines, stating that developing guidelines has been more difficult than initially anticipated but that it will continue to work on them (p. 875). CMS is committed to giving providers 6-12 months notice prior to implementation of national guidelines.
• CMS will not implement national coding guidelines for 2008. CMS stated that instead hospitals should continue to use current systems that meet the general CMS guidelines (p. 876). CMS restated its original six general guidelines and added five new guidelines for 2008 (p 872). For 2008, a hospital’s coding guidelines should:
1. follow the intent of the CPT code descriptor in that the guidelines should be designed to reasonably relate the intensity of hospital resources to the different levels of effort represented by the codes,
2. be based on hospital facility resources, not on physician resources,
3. be clear to facilitate accurate payments and be usable for compliance purposes and audits,
4. meet the HIPAA requirements,
5. only require documentation that is clinically necessary for patient care,
6. not facilitate upcoding or gaming,
7. be written or recorded, well documented and provide the basis for selection of a specific code,
8. be applied consistently across patients in the clinic or emergency department to which they apply,
9. not change with great frequency (they should be adjusted less frequently than every two months and it is reasonable to adjust annually if necessary p. 877),
10. be readily available for fiscal intermediary (or if applicable, MAC contractor) review; and,
11. result in coding decisions that could be verified by other hospital staff, as well as outside sources.
• CMS discussed the use of separately billable procedures in the calculation of the visit level: “in the absence of national guidelines, hospitals have the flexibility to determine whether or not to include separately payable services as a proxy to measure hospital resource use that is not associated with those separately payable services” (p. 877).
• With respect to guidelines producing a normal visit level distribution CMS stated that it does not expect hospitals to necessarily experience a normal distribution of visit levels across their claims. They will however expect a normal distribution across all hospitals as currently observed, and likewise once national guidelines are established (p. 878). They expect small community hospitals to report a greater percentage of low level visits and academic centers to report a greater percentage of higher level services (p.879).
• The coding of critical care will continue to require documentation of 30 minutes of critical care time (p. 878).
• The trauma service code, G0390, will continue to be paid only if reported with critical care, 99291. CMS will package the trauma service if it is reported with one of the five ED visit levels (p. 335).
• For clinic services, CMS will continue to require the use of new and established visit codes (99201-99205 and 99211-99215).
• The clinic office consultation codes (99241-99245) will no longer be paid under OPPS in 2008 and instead providers are instructed to build consult services into their internal clinic coding guidelines for reporting the clinic new or established office codes 99201-99205 or 99211-99215 (p. 836).
• CMS created two new HCPCS G codes for alcohol and substance abuse (other than tobacco) assessment and intervention: G0396--15-30 minutes and G0397--greater than 30 minutes (p. 942). Payment will be made when these services are delivered in the context of providing diagnosis and treatment for an illness or injury, and not for a screening service alone.

Observation

• CMS stated that it recognizes the benefit of observation in the treatment of Medicare beneficiaries and specifically mentioned that observation decreased the need for short inpatient admissions and helped ensure a safe discharge home (p. 898).
• For 2008, CMS had proposed to package the cost of all observation services into the visit code—the clinic, ED or critical care service that preceded it. Instead, in the final rule CMS stated it will implement two new “Composite APCs,” 8002 and 8003 that will be paid when Observation and a clinic or ED service are furnished together: a level 5 clinic visit and an observation visit and a level 4 or 5 ED visit (or critical care) and observation. The composite APCs define an extended assessment and management of a patient and move forward CMS’s efforts to increase the packaging of outpatient services (p 272, 901).
• APC 8002 is an extended encounter for a level 5 clinic visit (99205 or 99215), or a direct admit to observation (G0379) and an observation stay for any diagnosis. The payment rate is $351.04 if all other observation criteria are met (pp. 274-275).
• APC 8003 is an extended encounter for a high level ED visit—99284 or 99285, or critical care and an observation stay for any diagnosis. The payment rate is $638.66 if all other observation criteria are met (pp. 274- 275).
• CMS will continue to require documentation of observation time; a minimum of 8 hours of observation reported as units; a clinic or ED visit CPT code on the same day or the day before the observation service, or a direct admit to observation code, G0379, or critical care 99291; the HCPCS code G0378 reported for the observation stay; no status indicator “T” procedures on the same day or the day before; and specific requirements for physician documentation (p. 890, 893). There will be no diagnosis code requirements; CMS will pay for observation for any diagnosis, provided other criteria are met. If criteria are not met the clinic, ED, or critical care service will be paid (p. 275, 902). The OCE editor will evaluate the claim and determine if criteria are met for payment; there will be no change in the hospital’s process for reporting observation in 2008 (p. 902).
• The direct admit to observation HCPCS code, G0379, will continue to group to the same APC as a low level clinic visit. G0379 will be paid separately if criteria for observation are not met.

Drug Administration

CMS will continue to require hospitals to report the full set of CPT drug administration codes for infusions and injections; no change from 2007 (p. 809).

Inpatient Procedure List

CMS maintains a list of procedures that it believes can be safely and effectively performed only in an inpatient setting. CMS will not pay for these procedures when they are performed in an outpatient setting. Thirteen surgical procedures were removed from the inpatient list for 2008 but none are performed in the ED or clinic setting (p. 911).

Financial Changes

• CMS included a 3.3% inflation update in the payment rates for services paid under the OPPS for 2008 (p. 386). The 2007 conversion factor of $61.468 will increase to $63.694 for 2008. This figure includes wage and budget neutrality factor adjustments (p. 388).
• Patient co-pays will remain at 20-40% of the APC payment rate (p. 422).
• Outlier payments will be allocated 1% of total 2008 OPPS payments (p. 408). Outlier status will be invoked when the cost for a procedure or service exceeds the APC payment rate by 1.75 times the APC payment rate plus $1,575. CMS will pay 50% of the amount by which the service cost exceeds 1.75 times the APC payment rate plus $1,575 (p. 408).
• In 2008 CMS will separately reimburse providers for medications whose per day cost exceeds $60 (p. 691).
• The final rule lists the 2008 APC and CPT payment rates in Appendix A and B which can be found by following the above link to the final rule.

Reporting Quality Measures in Outpatient Settings

• Quality measure reporting will be implemented on April 1, 2008 rather than the proposed January 1, 2008 date. A hospital’s APC payments will be affected in 2009 if it fails to participate in quality reporting (p. 1081). If an outpatient facility decides not to participate, its payment conversion factor will be reduced by 2% in 2009 (p. 1095, 1098). Critical Access Hospitals will not be required to report quality measures in 2008 (p. 1095). Outpatient quality reporting will include only outpatients and transfers to another hospital, not hospital admissions (quality measures for inpatients will be reported using the inpatient data set).
• CMS had proposed 10 measures to initiate the Hospital Outpatient Quality Data Reporting Program (HOP QDRP): five for Acute MI (AMI), two for Surgical Care Improvement and one each for CHF, Community Acquired Pneumonia, and Diabetes care (p 1081). In the final rule, the number of measures was reduced to seven. Only the five AMI and two surgical care measures will be required (ED-AMI-1 Aspirin at Arrival; ED-AMI-2 Median Time to Fibrinolysis; ED-AMI-3 Fibrinolytic Therapy Received within 30 minutes of Arrival; ED-AMI-4 Median Time to Electrocardiogram (ECG); ED-AMI-5 Median Time to Transfer to Primary PCI; PQRI #20- Perioperative Care: Timing of Antibiotic Prophylaxis; and PQRI #21- Selection of Prophylactic Antibiotic (p 1130).
• CMS outlined administrative requirements for the program including the filing of a Notice of Intent to Participate which must be submitted by January 31, 2008 regardless of whether or not a hospital plans to participate (p. 1116), and registration with the Quality Net Exchange (p.1124). CMS is still considering additional measures for 2009 and beyond (p. 1103).
• In the 2008 proposed OPPS rule, CMS stated that contractors would review and validate the hospital-submitted quality measures to ensure a required 80% reliability/accuracy threshold but in the final rule CMS eliminated the validation requirement. CMS stated this validation process would be required in 2010 (p. 1127).

Miscellaneous

• CMS discussed changes in the Conditions of Participation affecting Critical Access hospitals (p.1148).
• CMS discussed changes in the Hospital Conditions of Participation—H&Ps, pre- and post- anesthesia evaluation, changes in nursing services, anesthetic services and GME payments (p. 1170).