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Now that the one - year anniversary has passed for the implementation of the Outpatient Prospective Payment System (OPPS), how far has the industry come in getting its hands around the new Ambulatory Payment Classifications (APCs)? While some facilities have made great strides, many have not yet fully grasped the financial implications, not to mention having a handle on the lasting operational challenges.
Hospitals are feeling the pressure from the constant buzz regarding OPPS, knowing that there is still much that needs to be done to simply reach the point of complete "ramp up" in order to accommodate the new system. How does a hospital know how to measure how far they have come? At minimum, facilities should be in the "modifying" stage of implementing changes necessary to ensure appropriate payment through APCs.
APC Committee
Committees should have by now reached a point where a
complete understanding of the system is in place and education
on APCs has been rolled out to non-committee hospital
staff and physicians. Revenue cycle analyses should now
take the place of implementation planning, and studies
should be conducted based on specific service lines. The
committee should be beyond purchasing and installing an
APC grouper and should be close to the final stages of
recognizing patterns of missed or inappropriate coding
and billing.
Charge Master
Since HCFA (now referred to as CMS), publishes APC updates
on a quarterly basis, updating the charge master is a never
- ending process that will be part of overall APC maintenance
protocol. Beyond the hospital Finance Department's responsibility
of ensuring the codes and modifiers are current, additional
maintenance should include reconciling front-end input
with claims output, a key function typically handled by
the Business Office. Other departments sharing in maintenance
and monitoring functions include Health Information Management,
Compliance and Information Systems.
Financial Impact Analysis
At this stage, hospitals should have plenty of data to
conduct studies to show the financial impact APCs have
had on specific lines of service. A good way to do this
is by reviewing codes or code pairs that represent the
highest volume and/or dollars billed by the designated
service line and compare this to reimbursement received
for these same services in years prior to APCs. This analysis
will allow the facility to investigate major decreases
in payment and will uncover operational problems that may
have developed over the course of the past year during
the implementation phase. Many hospitals may find this
analysis to also uncover deficiencies in pre-APC coding
and billing behaviors. This information can be useful for
educating coding staff.
Service Line Trends
Few studies have been provided for public knowledge regarding the effects that the new system has had on specific service lines. Some industry figures show profit margins of less than 5% for cardiac related services since the OPPS has been in place. Although concrete reasons for such disappointing figures are unclear, there are several key factors that facilities should keep in mind that may be contributing to lost payment opportunities under APCs.
Identification of Pass - through Items
Appropriately identifying transitional pass - through
devices, drugs and biologicals is a critical piece in preventing
dollars from "falling through the cracks". As
of April 1, 2001, CMS has broadened the requirements for
billing pass - through devices, basing payments on categories
rather than brand names. This should be seen as an opportunity
for facilities to have more choice in the pass-through
devices used, in addition to being paid for items that
might not have qualified for pass-through payment prior
to April 1, 2000.
The challenge in receiving payment for pass - through
devices is in ensuring that these items meet the applicable
descriptors for the pass-through categories (see CMS program
memoranda, March 22, 2001) and ensuring that physicians
and staff identify and code these items properly. Verifying
that codes are appropriately added to the charge master
and are captured and billed for items such as pacemakers,
catheters and quadropolar catheters for intracardiac electrophysiological
procedures will lessen the blow of reduced payment for
cardiac related services.
Complete Documentation and Coding
In some cases, capturing the code may not be as difficult
as obtaining required information regarding medical necessity.
For example the Low Osmolar Contrast Media, Isoview, (HCPCS
codes A4644 - A4646) is an item that is eligible for pass-through
payment, but only if the patient has met certain requirements.
According to special coverage instructions from the Medicare
Carriers Manual, in order to have this item paid by Medicare
as a pass-through item, the patient must have one or
more of the following: a history of adverse reaction to
contrast material, history of asthma or allergy, significant
cardiac dysfunction, generalized severe debilitation, or
sickle cell disease. Physicians not educated on documentation
requirements might exclude the information to support the
medical necessity criteria and therefore, the item will
be denied.
In addition to providing diagnoses specificity for tests and procedures, physicians must also provide detail on how the procedures were performed (i.e. right heart cath, left heart cath), as well as clearly defining each injection procedure in order for Coders to apply the appropriate modifiers.
Inpatient Only Procedures
CMS threw a "curve ball", in the brief advisory letter published in August 2000 regarding procedures that were erroneously listed in the final rule as inpatient only. Facilities that were preparing for OPPS throughout much of 2000 were instructing physicians who were performing services such as CPT 92977 (Dissolve clot, heart vessel) on an outpatient basis, to discontinue this practice and perform such services as inpatient procedures only. After physicians and staff were educated and operational adjustments were made for accommodating the new rule, CMS came back to say that these codes were listed in error as inpatient only.
With new technologies making it possible to accomplish
more complex procedures on an outpatient basis, more facilities
are finding it difficult to consistently implement the
inpatient-only list that CMS developed as part of the
OPPS implementation. Physicians continue to schedule services
on an outpatient basis that will be denied by Medicare.
Ensuring that scheduling and registration systems are adequately
flagging inpatient-only procedures and that physicians
and intake staff understand which procedures will not be
paid on an outpatient basis will prevent denials in this
area.
Conclusion
Now that the industry has endured a full year of one
of the most complicated regulatory changes in CMS history,
it is time for hospitals to measure the progress made in
coping with the change. Those who have fallen behind may
realize that their lack of preparedness will result in
missing the small window of opportunity given in the first
year to receive higher payments for some high volume procedures
than will be received in years to come. In addition, failure
of these facilities to properly bill for services or eligible
pass-through items provided will skew data collected by
CMS for future payment determination for everyone.
Still, there are those people who feel confident that operational procedures and systems in their facilities are neatly in place for ongoing, successful outpatient billing. But now is not the time to put the processes created for this system into "auto pilot". Ongoing monitoring of edits from APC groupers and investigating APC impact on specific lines of service, not to mention gearing up for changes already proposed for 2002, will require continuation of momentum gained in the first year of implementation.
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