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2010 OPPS Finalized

See what’s in store for the year ahead.

By Denise Williams, RN, CPC-H
For the 2010 Outpatient Prospective Payment System (OPPS) Final Rule, the Centers for Medicare & Medicaid Services (CMS) based payments on claims data submitted by hospital providers during 2008. Here are some highlights of the 1,936-page document to prepare you for the changes in the year ahead.
Resource tip: The CMS display copy of the rule and all preamble tables and addenda can be downloaded from: Select CMS-1414-FC to access the files and Final Rule document, or view the Final Rule alone in the Federal Register at

CMS Increases “2X Rule Violation” Exceptions

Once again, CMS has made changes to the 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 cost of the highest cost item is twice that of the lowest cost item within the same APC. The secretary has the discretion to allow exceptions to this rule (such as for low-volume procedures and services), and has approved 15 APCs as exceptions to the 2X rule for 2010 (one more total than in 2009). These are listed in Table 22 in the Final Rule.

New Technology APCs Lose a Single Code

CMS reviewed all codes assigned to new technology APCs for substantial claims data to designate them to clinical APCs. For 2010, the only change is the reassignment of CPT® Category III code 0182T High dose rate electronic brachytherapy, per fraction to clinical APC 0313.

“No Comment” on Inpatient-to-Outpatient Status Confusion

CMS received several comments requesting clarification related to changes in patient status from inpatient to outpatient using Condition Code 44. CMS acknowledged that this request is outside the scope of 2010’s proposal and stated, “… we have continued to emphasize that observation care is a hospital outpatient service, ordered by a physician and reported with a HCPCS code, like any other outpatient service. It is not a patient status for Medicare purposes.” CMS noted, however, “We will consider the possibility of addressing these concerns through other available mechanisms.”

No Changes for Composite APCs

No changes were made to existing Composite APCs, nor were any new Composite APCs created for 2010. CMS agreed with the APC Panel’s recommendations and comments from the public expressing concern that moving forward with the composite methodology could have unintended consequences if not monitored carefully. The Multiple Imaging composites were implemented in 2009, and the first claims data for monitoring the impact are not yet available. CMS agreed that review and analysis of claims data to assess the impact was “in the best interest of hospitals and continuing refinement of the OPPS.”

Outlier Fixed-dollar Threshold Rises

CMS annually updates the formula for calculating outlier payments. For 2010, an outlier payment is triggered when the cost for providing a service or procedure exceeds both:

  • 1.75 times the APC payment amount, and
  • the APC payment plus $2,175 fixed-dollar threshold (increased by $375 from 2009).

CMS will implement an outlier reconciliation policy for outpatient services provided based on cost reporting periods beginning in 2009.

Pass-through Payment Updates

There are no devices eligible for pass-through payment for 2010. Drugs and biologicals with pass-through status expiring Dec. 31, 2009 are listed in Table 30 of the Final Rule. The cost of these drugs is above the packaging threshold. Separate payment will continue for these drugs only.
The packaging threshold for drugs increases to $65 for 2010. The exception to the packaging rule for 5HT3 antiemetics expires Dec. 31, 2009, at which time they become subject to the packaging threshold for determination of payment status.
Payment for separately-payable drugs without pass-through status will continue to be made at average sale price (ASP) plus 4 percent. For 37 drugs and biological that have pass-through status for 2010, payment is ASP plus 6 percent. These drugs are listed in Table 31, which you can view on the CMS OPPS Web site (or in the Final Rule). There are HCPCS Level II code changes for several of these drugs.

New vs. Established May Be Old News In the Future

CMS notes that claims data for 2008 continues to reflect a cost difference between new and established patient visits. CMS continues to define “new” and “established” patients based on whether the patient was an inpatient or outpatient of the hospital within the past three years.
A patient who has been registered as an inpatient or outpatient of the hospital within the three years prior to the visit is considered an established patient; while a patient who has not been registered as an inpatient or outpatient of the hospital within the three years prior to the visit is considered a new patient. Comments noted that hospital costs for these visits vary based on the services rendered, not whether the patient is considered new or established.
Based on these comments, CMS is requesting input from hospitals on “alternative coding schemes for reporting hospital clinic visits that would not require hospitals to distinguish between new and established patients,” (for example, using HCPCS Level II G codes). CMS particularly is interested in how to develop a single payment methodology for services currently reported based on a new vs. established patient definition.

Level 5 Type B ED Visits Gain an APC

CMS creates a new APC for Level 5 Type B emergency department (ED) visits, noting that claims data for 2008 show a distinct cost difference between Level 5 Type A, Type B, and Clinic visits. G0384 Level 5 hospital emergency department visit provided in a type B emergency department; (the ED must meet at least one of the following requirements: (1) it is licensed by the state in which it is located under applicable state law as an emergency room or emergency department; (2) it is held out to the public (by name, posted signs, advertising, or other means) as a place that provides care for emergency medical conditions on an urgent basis without requiring a previously scheduled appointment; or (3) during the calendar year immediately preceding the calendar year in which a determination under 42 CFR section 489.24 is being made, based on a representative sample of patient visits that occurred during that calendar year, it provides at least one-third of all of its outpatient visits for the treatment of emergency medical conditions on an urgent basis without requiring a previously scheduled appointment) is assigned to the newly created APC 0630 for 2010.

E/M Guidelines Still Don’t Materialize

No national evaluation and management (E/M) guidelines have been established for 2010. Claims data continues to reflect stable distribution of billed visits. CMS notes, “Based on public comments, as well as our own knowledge of how clinics operate, it seemed unlikely that one set of straightforward national guidelines could apply to the reporting of visits in all hospitals and specialty clinics.”
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 again encourages fiscal intermediaries and MACs to use the individual hospital’s internal E/M guidelines when an audit is performed.

Inpatient-only List Shrinks

CMS removed eight procedures from the inpatient-only list. A complete list of these procedures and their corresponding CPT® codes is provided in Table 56.

Kidney Disease Education Now Covered in Select Settings

Kidney disease education services are covered under OPPS for services furnished on or after Jan. 1 only when provided by “qualified persons that are hospitals, CAHs, SNF, CORFs, HHAs, or hospices that are located in a rural area or are treated as being rural under 412.103.” The definition of “qualified person” and details for coverage requirements are discussed in the 2010 Medicare Physician Fee Schedule (MPFS) Final Rule.

Pulmonary and Cardiac Rehabilitation

Section 144(a) of Pub. L. 110-275 (MIPPA) provides coverage for certain services furnished under a pulmonary rehabilitation (PR) program and cardiac rehabilitation (CR) program for beneficiaries with diagnoses of chronic obstructive pulmonary disease and certain other conditions. The benefit defines comprehensive services, including assessments and individualized treatments that must be provided under a PR plan of care.
Although some of the components of the full service may be provided by different disciplines (eg., nurses, physical therapists, occupational therapists), a new, single, comprehensive G code (G0424 Pulmonary rehabilitation, including exercise (includes monitoring), one hour, per session, up to two sessions per day) is reported for the pulmonary rehabilitation session regardless of the number of disciplines involved. Payment for PR services is based on per-session cost derived from claims data for similar services. Specific details are defined in the 2010 MPFS Final Rule.
CR services will continue to be reported with CPT® codes 93797 Physician services for outpatient cardiac rehabilitation; without continuous ECG monitoring (per session) and 93798 Physician services for outpatient cardiac rehabilitation; with continuous ECG monitoring (per session) for 2010. Each session of CR must be at least 60 minutes long and must include aerobic exercise as a component; a minimum of two sessions per week must be provided, with no more than two sessions per day.
Intensive cardiac rehabilitation (ICR) services also consist of one-hour sessions, but up to six sessions may be provided in a single day. CMS has created new G codes (G0422 Intensive cardiac rehabilitation; with or without continuous ECG monitoring with exercise, per session and G0423 Intensive cardiac rehabilitation; with or without continuous ECG monitoring; without exercise, per session) for reporting ICR services. All ICR programs must be approved through the National Coverage Determination (NCD) process. Once approved, each site is required to enroll with its Fiscal Intermediary/Medicare Administrative Contractor (FI/MAC).
The statute defining PR, CR, and ICR services is specific that direct supervision must be provided by a physician (doctor of medicine or osteopathy). CMS has no latitude to modify this requirement because there is no wording in the statute that allows non-physician practitioners (NPPs) to perform this role.

Physician Supervision for Outpatient Services

All hospital outpatient diagnostic services must be provided under the level of physician supervision as defined in the MPFS relative value unit (RVU) file for the individual test. This level of supervision is required regardless of whether the service is provided in the main building of a hospital, in a provider-based department (PBD) of a hospital, or at a nonhospital location. NPPs are not approved to provide direct supervision for diagnostic tests.
For therapeutic services, NPPs may provide direct supervision for all hospital outpatient services, which they may perform within their state scope of practice; for which they are granted privileges by the hospital; and as long as all additional requirements (e.g. collaboration, supervision requirements, etc) are met.
Direct supervision specifies that the physician or NPP (if applicable) must be present on the same campus and immediately available to furnish assistance and direction throughout the performance of a procedure. For therapeutic services provided in the hospital or on-campus PBD, CMS additionally defines “in the hospital” as “areas in the main building(s) of a hospital or CAH that are under the ownership, financial, and administrative control of the hospital or CAH; that are operated as part of the hospital or CAH; and for which the hospital or CAH bills the services furnished under the hospital’s or CAH’s CCN.” Direct supervision does not require the physician to be in the room where the procedure is performed. For an off-campus PBD, the physician must be present in the off-campus PBD and immediately available to furnish assistance and direction.

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