Outpatient Prospective Payment System – 2015 Highlights

By Megan N. Beasley, RHIA, Daniel G. Gautschi, and Cory M. Herendeen
| 2/24/2015

The Centers for Medicare & Medicaid Services (CMS) has issued its calendar year (CY) 2015 changes  to the hospital outpatient prospective payment system (OPPS). Healthcare organizations should be ready to implement these changes.

Understanding the CY 2015 Changes

No healthcare organization can afford to lose precious reimbursement dollars. With an understanding of the most significant OPPS changes, hospitals and healthcare systems can better manage and capture revenue. CY 2015 highlights include:

2015 payment rates. The CY 2015 OPPS conversion factor (CF) for ambulatory payment classifications (APCs) is $74.144. This is a 2.2 percent increase from 2014. CMS also will impose a 2 percent reduction in the CF on any hospital that does not report the required quality measures. This reduced CF for 2015 will be $72.661.

Under this final rule with comment period, CMS estimates that total payments for CY 2015 to the approximately 4,000 facilities paid under the OPPS will be about $56.1 billion. This is an increase of approximately $5.1 billion compared to CY 2014 payments.

hc-connection-181553727-260x250 Payment packaging. This year, CMS is moving toward more global reimbursement. In 2014, add-on codes assigned to device-dependent APCs were paid separately; in 2015, they are packaged.

The initial set of APCs that are conditionally packaged have a geometric mean cost of less than or equal to $100. If a packaged ancillary service has an increase in geometric mean cost above $100, the conditionally packaged status remains the same. Certain services – such as psychiatry and counseling-related services – are excluded from conditional packaging and will be paid separately. In CY 2015, prosthetic supplies are unconditionally packaged and not paid separately.

Comprehensive APC changes. For CY 2015, CMS has introduced a new methodology called a comprehensive APC (C-APC). Similar to diagnosis-related groups in the inpatient setting, C-APCs are associated with a single payment based on the primary service delivered. CMS has designated certain high-cost, device-related outpatient services as “primary services.”

Keep in mind that although the methodology is changing, reporting should not. Each service should be listed under the C-APC regardless of the fact that payment is not made on a line-item basis. Furthermore, rather than multiple copayments for various services, a single copayment will be associated with the C-APC designated as the primary service.

CMS has established 25 C-APCs and 248 current procedural terminology (CPT) codes, which are assigned to the newly created J1 status within 12 clinical families. Some of the adjunctive services that will be packaged and not paid separately include:

  • Diagnostic procedures
  • Laboratory tests and other diagnostic tests and treatments that assist in delivery of the primary procedure
  • Visits and evaluations associated with primary procedures
  • Uncoded services and supplies
  • Hospital-administered drugs

Some of the excluded services are:

  • Self-administered drugs not considered supplies
  • Recurring therapy services
  • Diagnostic and screening mammography services
  • Ambulance services
  • Annual wellness visits with personalized prevention plan services
  • Brachytherapy services
  • Preventive services

Recurring services would not be included in C-APCs and should be filed on separate claims.

To determine C-APC payments, first identify the primary service. Understand which services are paid separately and which are packaged into the comprehensive service.

Next, rank the primary procedure only if the claim has multiple codes with a J1 status indicator. Finally, determine if complexity adjustments are applicable to determine the final C-APC.

Payment status indicator changes. As already described, the new status indicator for CY 2015 is J1, which applies to C-APCs. Status indicator X for ancillary services has been deleted.

Several codes have been revised for CY 2015. Payment will be made through the OPPS for status indicator Q1 when it is a packaged code with an S, T, or V indicator. Addendum B displays APC assignments when services are separately payable. They are considered a packaged APC payment if billed on the same date of service as a healthcare common procedure coding system (HCPCS) code assigned SI, S, T, or V. In other circumstances, reimbursement is given through a separate APC payment.

Executive-Level Project Checklist

To successfully integrate the annual CMS OPPS changes, healthcare organizations should have a specific process and dedicated resources. Here are suggested steps to help implement this year’s revisions.

  1. Analyze the CDM. Analyze the current charge description master (CDM) to understand the CPT/HCPCS coding, charge structure, and pricing revisions that need to be implemented.
  2. Update charge capture systems. Inventory the specific charge capture subsystems that need to be updated as part of the process.
  3. Educate departments. Make sure that required department staff members understand the implications of all applicable changes to the charge master and charge capture systems.
  4. Verify accuracy. Once all changes to the CDM and charge capture systems are implemented, conduct an analysis to verify accuracy and completeness.      

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Contact us

Daniel Gautschi
Principal, Healthcare Consulting Leader
Megan Beasley