Volume 4, #3

October 2007

Return to LYNX Lines Table of Contents

Highlights of the 2008 Proposed OPPS Final Rule

Candace Shaeffer, RN, MBA, RHIA
Chief Compliance Officer

Relevent Points that Affect EDs and Facility/Hospital-Based Clinics

CMS published the 2008 Proposed Outpatient Prospective Payment System (OPPS) rules on July 16, 2007. The full text can be found at the following link: http://www.cms.hhs.gov/HospitalOutpatientPPS/downloads/cms1392p.pdf

Picis and LYNX Medical Systems, Inc., jointly submitted comments in September on the proposed OPPS rule (see Picis & LYNX Submit Comments on the Proposed OPPS Rule to CMS).

LYNX and Picis provided customers with a template response to the OPPS rule which they were able to customize and submit by the September 14, 2007 deadline. The 2008 OPPS Final Rule is expected to be published in the Federal Register in early November.

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

Visits

There are still no ED coding guidelines proposed for 2008 and CMS states that hospitals should continue to use their current systems that meet the general CMS guidelines from the year 2000 and subsequent year’s OPPS final rules (starts on p. 475). CMS restated their general guidelines and added new guidelines for 2008 (although these points have been discussed before); the coding guidelines should:

1. be written or recorded, well documented and provide the basis for selection of a specific code
2. be applied consistently across patients in the clinic or emergency department to which they apply
3. not change with great frequency
4. be readily available for fiscal intermediary (or if applicable MAC contractor) review
5. result in coding decisions that could be verified by other hospital staff, as well as outside sources (p. 519)

CMS reiterated their concerns with the CMS revised AHA/AHIMA guidelines and summarized some of the methodologies that have been proposed to CMS over the past year.

CMS published ED visit level frequency distributions for years 2002-2006 and stated that “overall, both the clinic and ED visit distributions indicate that hospitals are billing consistently over time and in a manner that distinguishes between visit levels, resulting in relatively normal distributions nationally for the OPPS…” CMS is pleased with the data they are receiving on claims and further stated that they don’t expect any national guidelines to be developed before 2009. They are committed to giving providers 6-12 months notice prior to implementation of national guidelines (p. 518).

CMS will continue to pay for two types of ED visits—for type A and B EDs (p. 495):

1. Type A EDs are open 24/7 and meet one of the following requirements: they are licensed by the state as an emergency room or emergency department or held out to the public as facilities that provide emergency care on an urgent basis and do not require previously scheduled appointments.
2. Type B EDs are considered dedicated EDs, but are not open 24/7. To be considered a Type B ED, the facility must meet at least one of the following requirements: it is licensed by the state as an emergency room or emergency department or it is held out to the public as a facility that provides emergency care on an urgent basis and does not require previously scheduled appointments or if during the prior year, in a representative sample of patients, the ED provided at least one-third of its outpatient visits for treatment of emergency medical conditions without requiring a previously scheduled appointment.

Critical care will continue to be coded for a service meeting the critical care CPT descriptor; 99292 will still be packaged and not separately paid.

The trauma service code, G0390, will continue to be paid only if reported with critical care (p. 232).

CMS proposes to eliminate payment for clinic office consultation codes and instead will direct providers to report the appropriate new or established office visit codes 99201-99205 or 99211-99215 (p. 491).

Observation

For 2008, CMS is proposing to package the cost of all observation services into the visit code—the clinic, ED or critical care service that preceded it. If the proposed rule is finalized, Observation would no longer be separately reimbursed for chest pain, CHF and asthma. The status indicator for observation services would change to “N” (p. 184, 529).

The direct admit to Observation HCPCS code, G0379, would group to the same APC as a low level clinic visit.

Drug Administration

Under the proposed rule, CMS will continue to require reporting of the full set of CPT drug administration codes; no change from 2007 (p. 470-475).

Inpatient Procedure List

CMS maintains a list of procedures that will not be paid when performed in an outpatient setting. There are no proposed procedure changes on this list that impact the ED (p. 541, 545).

Proposed Financial Changes

CMS proposes a 3.3% inflation update in the payment rates for services paid under the OPPS for 2008 (p. 708). The 2007 conversion factor of $61.468 will increase to $63.693 for 2008 (p. 262).

Patient co-pays will remain at 20-40% of the APC payment rate (p. 287).

Outlier payments will be allocated 1% of total OPPS payments (p. 280). Outlier status will be invoked when the cost for a procedure or service exceeds the APC payment rate by 1.75 times and the APC payment rate plus $2000. CMS will pay 50% of the amount by which the service cost exceeds 1.75 times the APC payment rate (p. 283).

CMS proposes to separately reimburse providers for medications whose per day cost exceeds $60 (p. 402).

The rule contains the proposed 2008 payment rates which can be found in Appendix B, starting on page 948.

Reporting Quality Measures in Outpatient Settings

Last year, CMS proposed to implement quality reporting for outpatients in 2009. However, this 2008 proposed rule contains language for a 2008 implementation. Payment would be affected in 2009 if hospitals failed to participate (p. 651-675). If an outpatient facility decided not to participate in quality reporting, their payment conversion factor would be reduced by 2% in 2009 (p. 666).

CMS is proposing 10 measures to initiate the program: five for Acute MI (AMI), two for Surgical Care Improvement and one each for CHF, Community Acquired Pneumonia and Diabetes care (p. 656).

CMS is looking at additional measures for 2009 and beyond. Thus, CMS documented 30 additional potential measures. CMS requests provider input on the issue of including these measures for 2008 implementation (p. 660, 664).

One of CMS’s goals is to “harmonize” quality measures across settings and groups (p. 660). Currently, different measures are required for physicians and inpatients. While some measures are the same, these outpatient measures represent a third set.

Hospitals will submit quality measures and CMS contractors will validate them for a required 80% reliability/accuracy threshold (p. 672).

Miscellaneous

CMS also included some conceptual language regarding payment for outpatient services.

CMS is “proposing to view a service, in some cases, as not just the diagnostic or treatment modality identified by one individual HCPCS code, but as the totality of care provided in a hospital outpatient encounter that would be reported with two or more HCPCS codes for component services.” This is the rationale behind packaging Observation services and not providing separate payment from the ED visit payment. CMS listed seven services that could be subject to packaging: guidance services, image processing, intra-operative services, imaging supervision and interpretation, diagnostic radiopharmaceuticals, contrast agents and observation services.

They are introducing Value Based Purchasing to encourage maximum hospital efficiency (p. 198, 233). This is part of the rationale behind packaging payment for trauma activation when critical care is not also provided. The emphasis and reporting on quality measures is another example of value based purchasing.