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Review the latest OPPS update

Medicare Weekly Update, September 23, 2008

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As reported below, CMS issued the October OPPS update last week. As always, hospitals should review this update in detail because it contains several changes that have operational, compliance, and/or payment ramifications.

One aspect of the October update that I found particularly interesting is the section on “Revenue Code Reporting.” In the past, CMS has been, for the most part, relatively flexible in allowing hospitals to determine revenue code assignment for purposes of billing charges. For many years, CMS has generally permitted hospitals to assign revenue codes in whatever manner accurately matches billed charges to costs reported on the cost report (unless CMS provided more specific revenue code assignment instructions for a particular service).

The October update, however, contains some interesting language. First, it addresses revenue code reporting “precision,” stating that “hospitals should choose the most precise revenue code, or subcode, if appropriate” and that “[i]t is recommended that providers use the more detailed subcategory when applicable/available rather than revenue codes that end in ‘0’ (General) or ‘9’ (Other).”

Second, the October update states that hospitals “are required to follow the Medicare cost apportionment regulations at 42 CFR 413.53(a)(1) which convey that, under the departmental method of apportionment, the cost of each ancillary department is to be apportioned separately rather than being combined with another department.”

Finally, the October update directs hospitals to CMS’ “revenue code to cost center crosswalk” and invites hospitals to “review” and “comment” on the crosswalk (although it is unclear how one would go about submitting such comments).

Hospitals should review this updated policy on revenue code assignment carefully to determine whether any adjustments to their process for assigning revenue codes might be warranted.

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