OPPS’ Course Set for 2009

CMS continues to emphasize value-based purchasing and promote efficiency incentives.

By Denise Williams, RN, CPC-H
In the 2009 Outpatient Prospective Payment System (OPPS) final rule, the Centers for Medicare & Medicaid Services (CMS) reviewed and reclassified ambulatory payment classification (APC) assignment based on the “2X Rule Violation.”
Prospective payment involves an inherent grouping of services requiring comparable resource usage. A 2X Rule Violation happens when the median of the highest cost item is two times greater than the lowest cost item within the same APC. Closed treatment fracture of finger/toe/trunk (APC 0043) has been reconfigured into three separate APCs (0129, 0138, 0139). The number of drug administration APCs decreased from six to five based on claims data. CMS reviewed all codes assigned to new technology APCs for substantial claims data to designate them to clinical APCs. Based on this review, HCPCS Level II codes C9725, C9726, C9727 are assigned to clinical APCs for 2009. Table 16 reflects the new assignments.

Table 16. 2009 APC reassignments of new technology procedures to clinical APCs

Short DescriptorFinal
2009 APC
Placement of endorectal
intracavitary applicator for
high intensity brachytherapy
Placement and removal
(if performed) of applicator
into breast for radiation therapy
Insertion of implants into the soft palate; minimum of three implants


Outlier Payments

CMS annually updates the formula for calculating outlier payments. For 2009, an outlier payment is triggered when the cost of providing a service or procedure exceeds both:

  • 1.75 times the APC payment amount
  • The APC payment plus $1,800 fixed-dollar threshold (increased by $225 from 2008)

CMS is also implementing an outlier reconciliation policy for outpatient services furnished during cost report periods beginning in 2009.

Composite APCs

All HCPCS codes assigned to composite APCs are also assigned to an individual APC, and will continue to be paid according to the standard OPPS methodology when a single procedure is performed. A list of these APC assignments can be found in Addendum M of the final rule.
Because of the addition of more composite APCs and for better clarity, new status indicators are established for 2009:
U – Brachytherapy sources
R – Blood and blood products
Q – Has been divided into three parts:
Q1 – STVX-packaged codes
Q2 – T-packaged codes
Q3 – Codes that may be paid through a composite APC or paid separately when criteria are not met
CMS has expanded packaging for 2009 by creating new composite APCs. The original composite APCs continue for 2009 with one change. Partial hospitalization is split into two composite APCs, applied per date of service. The Level I composite is triggered when three services are provided; the Level II composite will be triggered when four or more services are provided. CMS notes that there is no payment for fewer than three services on any date of service.
CMS has created five new imaging composite APCs for 2009 based on “families” of codes:
1. Ultrasound (APC 8004)
2. CT and CTA without contrast (APC 8005)
3. CT and CTA with contrast (APC 8006)
4. MRI and MRA without contrast (APC 8007)
5. MRI and MRA with contrast (APC 8008)
One composite payment is made when more than one procedure is billed on the same date of service. The composite is triggered when the codes are contained within an individual “family”—the composite payment does not cross over families. When an exam without contrast is followed by an exam with contrast, the “with contrast” composite will be paid.
For example, if CPT® 76604 Ultrasound, chest (includes mediastinum) real time with imaging documentation and CPT® 76856 Ultrasound, pelvic (nonobstetric) real time with image documentation; complete are performed on the same date of service, payment will be made under composite APC 8004.
Another example is performance of CPT® 70496 Computed tomographic angiography, head; with contrast material(s), including noncontrast images if performed, and image postprocessing and 74160 Computed tomography abdomen; with contrast material(s) are performed on the same date of service, payment will be made under composite APC 8006.
When two exams in the same imaging family are performed, one without contrast and one with contrast, the applicable “with contrast” composite APC will be paid. If the exams performed are in separate imaging families, such as an ultrasound or a CT scan, the exams will be paid at the individual procedure APC rate; the composite is not applicable when exams in different imaging families are performed. See Table 8 on the CMS Web site for a list of the codes and their applicable imaging families.
It is important to note that composite APCs do not change the way you report services, only how you are paid. There is no change to reporting services provided. The I/OCE will determine when services qualify for composite payment.

Packaging Broadens

CMS continues to expand packaging outside the composite APC arena also. CMS has provided payment for G0332 IVIG Pre-administration services for 2007 and 2008. This was intended as a temporary measure to help ensure beneficiary access to IVIG during the time when acquiring the product was challenging. This challenge is mostly resolved and, therefore, CMS has deleted this HCPCS Level II code for 2009. CMS notes that hospitals may include the charge in the associated drug administration service charge, or on a non-coded revenue line.
One packaging change of particular interest relates to CPT® code 36592 Collection of blood specimen using established central or peripheral catheter, venous, not otherwise specified. While this code is unconditionally packaged for 2008, it will be conditionally packaged for 2009. If you report 36592 with any other service paid under OPPS, it is packaged into the separately payable service(s). Separate payment is made in those rare instances when 36592 is the only APC-payable code on the claim.

Pass-Through Payment

There are no devices eligible for pass-through payment for 2009. Separate payments for HCPCS Level II codes C1821 Interspinous process distraction device (implantable) and L8690 Auditory osseointegrated device, includes all internal and external components expired Dec. 31, 2008.
The packaging threshold for drugs remains at $60 for 2009, with the exception of 5HT3 antiemetics, which continues to be paid separately. You can find a complete list of these antiemetics and associated HCPCS Level II codes in Table 26 on the CMS Hospital Outpatient PPS Web site. Payment for separately payable drugs without pass-through status is made at ASP plus 4 percent. This is a decrease from the 2008 payment of ASP plus 5 percent. Twenty-four drugs and biologicals continue to have pass-through status for 2009, and pays based on ASP plus 6 percent. These drugs are listed in Table 24, which you can also view on the CMS Hospital Outpatient PPS Web site. There are HCPCS Level II code changes for several of these drugs.


Originally, CMS proposed the creation of two new pharmacy cost centers for 2009. The intent was to assist in collecting “pharmacy handling and overhead” cost data. This proposal would have split the current “drugs charged to patients” cost center into “drugs with low overhead costs” and “drugs with high overhead costs.” The comments CMS received from providers noted that this change would result in a huge administrative and operational burden to providers, so this provision did not make it into the final rule.
Payment for contrast media and diagnostic radiopharmaceuticals remain packaged for 2009. CMS instituted edits to ensure that a radiopharmaceutical is billed for each claim that contains a nuclear medicine procedure. CMS received provider comments regarding the rare situation where the radiopharmaceutical is administered at the end of an inpatient admission, and a nuclear medicine procedure is performed on an outpatient basis but no additional diagnostic radiopharmaceutical is required. In this scenario, the radiopharmaceutical is reported on the inpatient claim, causing the outpatient claim to hit the edit. For CY 2009, CMS creates HCPCS Level II code C9898 Radiolabeled product provided during a hospital inpatient stay to report on the outpatient claim with a token charge of less than $1.01. This allows the outpatient claim to pass the edit and process for nuclear medicine procedure payment. CMS notes that they expect this to be a rare occurrence.
Separately payable therapeutic radiopharmaceuticals and brachytherapy services continue to be reimbursed based on hospital charges reduced to cost until Dec. 31, 2009.

New Definitions

CMS modified the definition of new and established patient for outpatient visit hospital reporting based on the date of a patient’s previous inpatient or outpatient admissions to an individual facility.
“Specifically, beginning in CY 2009, the meanings of ‘new’ and ‘established’ patients pertain to whether the patient an inpatient or outpatient of the hospital within the past 3 years. A patient who has been registered as an inpatient or outpatient of the hospital within the 3 years prior to the visit would be considered to be an established patient for that visit, while a patient who has not been registered as an inpatient or outpatient of the hospital within the 3 years prior to the visit would be considered to be a new patient for that visit.”


CMS creates four new APCs for Type B emergency department (ED) visits, with payment calculated based on claims data. CMS assigns G0384 (Level 5 Hospital Type B ED visit) to APC 0616 because claims data reflect cost similar to a Level 5 Emergency Visits. HCPCS code G0384 is also added to the criteria for payment under composite APC 8003 (Level II Extended Assessment and Management Composite).
Reporting critical care services was controversial during 2008. A FAQ on CMS’ Web site was updated with new instructions at the end of 2007, but no formal instruction was issued. In the final rule for 2009, CMS notes that “hospitals should separately report all HCPCS codes in accordance with correct coding principles, CPT® code descriptions and any additional CMS guidance, when available.” With respect to CPT® codes 99291 specifically, “hospitals must follow the CPT® instructions related to reporting that CPT® code. Any services that CPT® indicates are included in the reporting of CPT® code 99291 should not be billed separately by the hospital. In establishing payment rates for visits, CMS packages the costs of certain items and services separately reported by HCPCS codes into payment for visits according to the standard OPPS methodology for packaging costs.” Hospital providers need to work with their internal edits to ensure they capture the cost/charge for all services when reporting critical care services.
CMS also notes that while they suspended application of certain Correct Coding Initiative (CCI) edits to hospital claims, they plan to “soon apply all appropriate CCI edits” to the reporting of hospital claims.

E/M Guidelines

There aren’t national evaluation and management (E/M) guidelines for 2009. Claims data continues to reflect stable distribution of billed visits. CMS instructs hospitals to continue to use their individual internal guidelines, being sure that the guidelines meet the 11 criteria specified in the 2008 final rule. CMS continues to request comments and model suggestions for national guidelines. Since there are no national guidelines, CMS encourages fiscal intermediaries and MACs to utilize the individual hospital’s internal E/M guidelines when an audit occurs.
CMS removed 12 procedures from the inpatient-only list. A complete list of these procedures and their corresponding CPT® codes is found in Table 39.
Table 39. HCPCS codes removed from the inpatient list and their APC assignments for 2009.

Long Descriptor
Application of cranial tongs caliper, or stereotactic frame, including removal (separate procedure)
Reconstruction superior-lateral orbital rim and lower forehead, advancement or alteration, with or without grafts (includes obtaining autografts)
Open treatment of orbital floor blowout fracture; periorbital approach
Open treatment of orbital floor blowout fracture; combined approach
Arrest, epiphyseal, any method (eg, epiphysiodesis); combined distal femur proximal tibia and fibula
Closure of esophagostomy or fistula; cervical approach
Revision of urinary-cutaneous anastomosis (any type urostomy)
Abdomino-vaginal vesical neck suspension, with or without endoscopic control (eg, Stamey, Raz, modified Pereyra)
Cystorrhaphy, suture of bladder wound, injury or rupture; simple
One stage proximal penile or penoscrotal hypospadias repair requiring extensive dissection to correct chordee and urethroplasty by use of skin graft tube and/or island flap
One stage perineal hypospadias repair requiring extensive dissection to correct chordee and urethroplasty by use of skin graft tube and/or island flap
Orchiectomy, radical, for tumor; with abdominal exploration

 Quality Data Update

This is the first year where not reporting quality measure data affects payment. Hospitals that did not report quality data in 2008 will receive a two percent reduction in APC payments. This reduction affects not only the payment from Medicare, but from the beneficiary and secondary payer payments also. CMS adds four new measures to the Quality Data Initiative. The data for these measures will be gathered from claims data and is not intended to measure performance. The four measures are: MRI lumbar spine for low back pain; mammography follow-up rates (the degree to which a facility must repeat the imaging); use of contrast material during abdominal computed tomography (CT); use of contrast material during CT of the thorax. CMS institutes a voluntary quality validation process for 2009. CMS will randomly select 800 hospitals and provide the option of participating. There will be no penalty at this time if selected hospitals elect not to participate; however, this provides an opportunity for feedback on data submission.
The CMS display copy of the rule and all preamble tables and addenda can be downloaded.  Select CMS-1404-FC to access the files and final rule document.

Evaluation and Management – CEMC

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