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Implementation of CMS' Outpatient Prospective Payment System for

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Implementation of CMS' Outpatient Prospective Payment System for Powered By Docstoc
					BWC’s Hospital Outpatient
Reimbursement
Methodology



1.   1
Current outpatient
methodology
o Retrospective reimbursement
  methodology
     • Cost plus
      o Ohio Medicaid cost-to-charge ratio, plus 16
        percentage points, not to exceed 60% of allowed
        billed charges.

                                                          2

1.    2
New outpatient methodology
o Outpatient prospective payment system
  (OPPS)
  • Effective with dates of service beginning Jan.
    1, 2011
  • Modified version of Medicare’s outpatient
    prospective payment system

                                                     3

 1.   3
New outpatient methodology
o Rates and policies are established in
   advance and remain constant during the
   effective period.
o It promotes predictability of payments.
o It promotes equity and consistency of
   payments.
o It encourages facilities to improve       4
   efficiency of providing care.
1. 4
Outpatient Rule
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

1.    5
Basic OPPS payment
methodology
                          OPPS




      Ambulatory
        payment        Fee schedule   Reasonable cost
     classifications
                                                        6

1.   6
Ambulatory payment
classifications (APC)

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

1.   7
Fee schedules
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

                                                           8

1.    8
Partially-packaged and bundled
system
     • 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
       bundled.
     • It allows for adequate payment in a setting that
       has variable treatment pathways and protocols.
                                                          9

1.    9
Partially-packaged
services
o Used as a way to combine payment for multiple
  services
o Occurs when reimbursement for minor ancillary
  services associated with a significant procedure
  are combined into single payment
o Examples
     • Recovery room
     • Anesthesia
     • Some pharmaceuticals                          10

1.    10
Bundled services
o Occurs when reimbursement for multiple
  significant procedures or multiple units of
  same procedure related to outpatient
  encounter is combined into one payment
o Examples
     • Designated multiple radiology services
     • Observation services
                                                11

1.   11
Add-on payments
o High-cost outlier

o Rural sole community hospital

o Hold-harmless

                                  12

1.   12
High cost outlier add-on
o BWC will use Medicare’s outlier determination
  criteria as well as add-on payment formula.
     • Outlier
     • 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
       payment.

1.    13
Rural sole community
hospital add-on
o Hospitals designated as rural sole community hospitals,
  including essential access community hospitals
  (EACHs), receive a 7.1% add-on payment for designated
  services.
      • 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.


 1.    14
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.


 1.    15
HH add-on
o HH calculation is performed after outlier
  determination and outlier add-on if
  warranted.
o BWC payment adjustment factor is applied
  after HH add-on payment is calculated.
     • HH add-on is considered part of the Medicare
       payment.

1.   16
OPPS
o All bills submitted are processed through the
  integrated outpatient code editor (I/OCE).
  • 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
  indicator.
  • Indicates if item, service or procedure is reimbursed
    under OPPS and, if so, the reimbursement                17

    methodology (APC, fee schedule, reasonable cost)
1. 17
Basic APC formula
      Medicare                                 Sole
     OPPS APC                                 comm/               Total
                      Outlier (if              hold
     rate (wage
                      applicable)            harmless
                                                                  OPPS
        index
      adjusted)                              add-on (if           rate
                                                 applicable)




              Total
              OPPS
                                       BWC
                                     payment                   BWC
                                    adjustment
              rate                    factor                   rate
                                                                          18

1.   18
Basic fee schedule formula

     CMS fee
     schedule
                                      BWC
                                    payment                        BWC
                                   adjustment
       rate
                                     factor                        rate

**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.

                                                                                         19

1.   19
Basic reasonable cost
formula
                     Medicare
          Allowed
                       overall
                     outpatient
                                     CMS
           charge
                    ratio of cost
                      to charge
                                     rate


          CMS          BWC
                     payment        BWC
                    adjustment
          rate        factor        rate
                                            20

1.   20
Coding
o It’s important to assign correct Current
    Procedural Terminology (CPT®)/Healthcare
    Common. Procedural Coding System (HCPCS)
    codes
o Each CPT®/HCPCS is assigned to one APC.
o Incorrect/missing codes can impact payment to
    hospital.
o BWC is following National Correct Coding
    Initiative (NCCI) edits for hospital outpatient   21

 1. setting.
     21
Modifiers
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.



                                                   22

1.   22
Revenue Codes
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
      CPT®/HCPCS codes.
o Check BWC’s Provider Billing and Reimbursement
  Manual for updated lists of modifiers and revenue
  codes                                               23

 1.   23
Self-insured employers
o Three options for reimbursement
     • Contract with providers and pay negotiated
       rates.
     • Utilize BWC’s OPPS methodology.
     • Continue to use retrospective cost-plus
       payment methodology.

                                                    24

1.   24
Additional information and
online tutorials
o See BWC’s Web site for taped video and
  other coming information.
  • www.ohiobwc.com/medicalproviders


o Visit the Medicare Web site.
  www.cms.hhs.gov/HospitalOutpatientPPS
                                           25

 1.   25
Contact information
o General questions regarding BWC’s
  outpatient payment methodology
     • BWC provider relations
      o 1-800-OHIOBWC
      o ohiobwc.com
o Questions on specific bills
     • Contact MCO assigned to claim
      o MCO directory on Web site      26

1.   26
Questions?

 Thank you!




              27

1.   27

				
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