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Important CY 2009 OPPS status indicator changes

Medicare Weekly Update, February 10, 2009

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Editor’s note: Judith Kares, JD, CPC, regulatory specialist for HCPro, Inc., is the author of this week’s note from the instructor.

SIs “N,” “Q1,” Q2,” and “Q3”
In CY 2008, CMS greatly expanded the number of packaged items and services payable under the Outpatient Prospective Payment System (OPPS). More than 300 items and services that had formerly been separately payable became packaged, at least in certain circumstances. CMS is continuing this trend in CY 2009. Presently, there are four status indicators (SI) that identify packaged items and services: “N,” “Q1,” “Q2,” and “Q3.” Addendum D1 to the CY 2009 OPPS final rule defines SI “N” as identifying items and services that are paid under the OPPS; however, there is no separate payment for them. Instead, payment is included in the payment for other items and services. Think of those services as “never” being separately payable.

There are a number of other items and services that are “sometimes packaged” and “sometimes separately payable.”  In 2008, all of the “sometimes packaged” items and services were identified with the “Q” SI. These “Q” SI codes were then further divided into three subcategories, which established the criteria for determining whether they would be packaged or separately payable in particular circumstances. Those three subcategories were as follows:

• “STVX-packaged codes”;
• “T-packaged codes”; and
• Codes subject to payment as part of a composite.

In the CY 2009 final rule, CMS assigned separate SIs to each subcategory:

• “STVX-packaged codes”—“Q1”;
• “T-packaged codes”—“Q2”; and
• Codes subject to payment as part of a composite—“Q3.”

“STVX-packaged codes” (SI “Q1”) are packaged if they are billed on the same date of service with any other code with an SI of “S,” “T,” “V,” or “X.” If not, they are separately payable under a separate APC. “T-packaged codes” (SI “Q2”) are packaged only if they are billed on the same date of service with any other codes with an SI of “T.” If not, they are separately payable under a separate APC. Codes subject to payment as part of a composite (SI “Q3”) are packaged into the composite rate when all criteria for that composite are met. Otherwise, the services with SI “Q3” may be separately payable if otherwise assigned to a separate APC or packaged into other services, if not.

If more than one “STVX-packaged” (“Q1”) or “T-packaged” (“Q2”) code is reported without a separately payable service into which it would otherwise be packaged, separate payment is made only for the highest paying among them, and all others are packaged into that code. If  any SI “Q1” or “Q2” codes are reported on the same day as any code that is subject to composite payment (“Q3”), and payment criteria are met for composite payment, the “Q1” and ”Q2” codes will be packaged into the composite payment.

If separately payable, codes with SIs “Q1,” “Q2,” and “Q3” are subject to wage index adjustment. In addition, the wage index adjustment will be applied to either the national payment rate calculated using the full market basket conversion factor or the national payment rate calculated using the reduced market basket conversion factor.  Only those hospitals who met their outpatient quality reporting requirements for CY 2008 will be eligible for the full market basket update.

SIs “R” and “U”
There were two additional SI changes implemented in CY 2009: SIs “R” and “U.” SI “R” applies to blood and blood products. This SI was added to distinguish blood and blood products from other biologicals that are neither subject to wage index adjustment nor subject to adjustment to the national payment rate if the hospital fails to meet its outpatient quality indicator reporting requirements. Blood and blood products are subject to both adjustments, if applicable.

The last change was assignment of SI “U” to brachytherapy seeds and sources. Medicare has been attempting to assign APC-based payments to these services over the last few years. Repeatedly, however, CMS has continued to reimburse them based on charges reduced to cost.  Most recently, Congress enacted legislation to extend payment based on charges reduced to cost through the end of CY 2009. Prior to CY 2009, because they were reimbursed based on cost, brachytherapy seeds and sources were assigned SI “H.” CMS changed their SI to “U,” beginning with services provided on and after 1/1/09, regardless of the payment methodology. Unlike blood and blood products, brachytherapy seeds and sources are not subject to wage index adjustment nor are they subject to the reduced update, in the event that the hospital fails to meets its outpatient quality indicator reporting requirements.

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