BWC’s Hospital Outpatient
o Retrospective reimbursement
• Cost plus
o Ohio Medicaid cost-to-charge ratio, plus 16
percentage points, not to exceed 60% of allowed
New outpatient methodology
o Outpatient prospective payment system
• Effective with dates of service beginning Jan.
• Modified version of Medicare’s outpatient
prospective payment system
New outpatient methodology
o Rates and policies are established in
advance and remain constant during the
o It promotes predictability of payments.
o It promotes equity and consistency of
o It encourages facilities to improve 4
efficiency of providing care.
o Ohio Administrative Code 4123-6-37.2,
posted on www.ohiobwc.com
o Reimbursement is:
• 197% of Medicare OPPS rate for all Ohio hospitals
and BWC-certified providers, regardless of location;
• 253% of Medicare OPPS rate for Children’s hospitals;
• 101% of Medicare reasonable cost, plus BWC
payment adjustment factor for Medicare-designated
critical access hospitals. 5
Basic OPPS payment
payment Fee schedule Reasonable cost
o Each APC contains procedures/services
clinically related and comparable with
respect to resource utilization.
o Most services reimbursed via ambulatory
payment classification APC. 7
o Clinical lab fee schedule
o Physician fee schedule
o BWC customized fee schedules
• In appendix A of outpatient rule
o Table 2 – Vocational rehabilitation
o Table 3 – OPPS fee schedule items with BWC rates
o Table 4 – OPPS non-covered items with BWC rates
Partially-packaged and bundled
• Designated ancillary services and supplies are
packaged into the surgery, visit or service.
• Some services, supplies or procedures are
separately payable, and some are packaged or
• It allows for adequate payment in a setting that
has variable treatment pathways and protocols.
o Used as a way to combine payment for multiple
o Occurs when reimbursement for minor ancillary
services associated with a significant procedure
are combined into single payment
• Recovery room
• Some pharmaceuticals 10
o Occurs when reimbursement for multiple
significant procedures or multiple units of
same procedure related to outpatient
encounter is combined into one payment
• Designated multiple radiology services
• Observation services
o High-cost outlier
o Rural sole community hospital
High cost outlier add-on
o BWC will use Medicare’s outlier determination
criteria as well as add-on payment formula.
• Partial hospitalization program outlier
o BWC payment adjustment factor is applied after
outlier add-on payment is calculated.
• Outlier add-on is considered part of the Medicare
Rural sole community
o Hospitals designated as rural sole community hospitals,
including essential access community hospitals
(EACHs), receive a 7.1% add-on payment for designated
• RSCH add-on is calculated prior to the outlier determination.
o BWC payment adjustment factor is applied after RSCH
add-on payment is calculated.
• RSCH add-on is considered part of the Medicare payment.
Hold harmless (HH) add-on
o HH is provided for IPPS-exempt cancer centers
and children’s hospitals.
o Medicare provides the add-on payment on a
quarterly basis with an end of year reconciliation.
o BWC will provide an add-on payment per bill line
using the same formula as Medicare.
• BWC will not perform a reconciliation of HH payments.
o HH calculation is performed after outlier
determination and outlier add-on if
o BWC payment adjustment factor is applied
after HH add-on payment is calculated.
• HH add-on is considered part of the Medicare
o All bills submitted are processed through the
integrated outpatient code editor (I/OCE).
• Executes provisions of OPPS
• Validates, edits and assigns status indicators and
APC’s to lines
o Each code is assigned a payment status
• Indicates if item, service or procedure is reimbursed
under OPPS and, if so, the reimbursement 17
methodology (APC, fee schedule, reasonable cost)
Basic APC formula
OPPS APC comm/ Total
Outlier (if hold
adjusted) add-on (if rate
rate factor rate
Basic fee schedule formula
**Please note the BWC-modified OPPS methodology includes a BWC customized fee schedule
to which the BWC payment adjustment factor is not applied. Please see tables 3 and 4
of the outpatient rule for the complete list of codes and associated rates.
Basic reasonable cost
ratio of cost
rate factor rate
o It’s important to assign correct Current
Procedural Terminology (CPT®)/Healthcare
Common. Procedural Coding System (HCPCS)
o Each CPT®/HCPCS is assigned to one APC.
o Incorrect/missing codes can impact payment to
o BWC is following National Correct Coding
Initiative (NCCI) edits for hospital outpatient 21
o BWC will accept numerous modifiers
approved for the hospital setting.
• It’s important for hospital to use all
appropriate modifiers in reporting items,
services and supplies.
o BWC updated the list of reportable revenue codes
for hospital outpatient setting.
o Under OPPS numerous revenue codes require
CPT®/HCPCS codes to be reported.
• Revenue code 360, operating room services
• BWC updated list of revenue codes requiring
o Check BWC’s Provider Billing and Reimbursement
Manual for updated lists of modifiers and revenue
o Three options for reimbursement
• Contract with providers and pay negotiated
• Utilize BWC’s OPPS methodology.
• Continue to use retrospective cost-plus
Additional information and
o See BWC’s Web site for taped video and
other coming information.
o Visit the Medicare Web site.
o General questions regarding BWC’s
outpatient payment methodology
• BWC provider relations
o Questions on specific bills
• Contact MCO assigned to claim
o MCO directory on Web site 26