Finalized: Claims-based data collection for therapy services, increase in drug payments, and use of geometric mean

HCPRO Website, November 2, 2012

By Michelle A. Leppert, CPC

CMS released the 2013 OPPS Final Rule on November 1, which finalizes APC payment system changes for 2013 but hospitals will need to read the 2013 Medicare Physician Fee Schedule (MPFS) Final Rule to find some of the biggest operational changes facing them in 2013.

“For the last several years the provider community has had to read both rules to find all of the changes that impact hospitals,” says Jugna Shah, MPH, president of Nimitt Consulting based in Washington, DC. “This might seem unintuitive but CMS addresses issues in whichever rule it uses to make the payment and since (always) therapy services are paid under the Physician Fee Schedule, that’s where hospitals will have to look to understand the new rules they will be expected to abide by in 2013.”

Therapy services

Therapy departments need to digest the rules carefully to comply with new HCPCS G-codes and complexity/severity modifiers and to provide complete documentation for services provided.

CMS is required by law to implement a claims-based data collection strategy for therapy services for information about:

  • beneficiary function and condition
  • therapy services furnished
  • outcomes achieved

Medicare expects to use this information in reforming the payment system for outpatient therapy services in the future.

By collecting data on beneficiary function over an episode of therapy services, CMS hopes to better understand who uses therapy services and how a patient’s functional limitations change over time as a result of receiving therapy.

All this data gathering comes with the long-term goal of developing an improved payment system for therapy services that pays appropriately and similarly for efficient, effective services without encouraging the provision of medically unnecessary or excessive services, says Shah. All of the requirements that hospitals need to be aware of are outlined in the MPFS.

“We are likely to see more information in upcoming transmittals and Medlearn Matters articles, but in order to begin making operational changes now to be ready for January 1, hospitals should read the therapy services section of the Physician Fee Schedule Final Rule now,” Shah says.

CMS is not changing the payment system, or the rules governing always vs. sometimes therapy, or coverage requirements, but it is changing what data therapists must report.

The requirements go live January 1, but hospitals have a six-month testing period. They will not be penalized for not following the requirements until July 1.

“This really is the single largest operational change that will impact hospitals in terms of the OPPS and MPFS final rules so therapy departments should get people on board and educated as early as possible and also discuss the necessary charge master changes that will accompany the use of the new G-codes,” Shah says.

Molecular pathology payments

Another significant change also comes from the MPFS regarding payment for molecular pathology services and new CPT codes. Over the past two years the AMA has made significant additions to the molecular pathology CPT codes which first appeared in the 2012 CPT® Manualand are expanded in the 2013 manual.

CMS will pay for the new Molecular Pathology CPT codes under the Clinical Laboratory Fee Schedule (CLFS) instead of the MPFS. This issue has been under great debate for the last two years, which may be one reason why CMS did not implement the new codes in 2012 and instead allowed hospitals to continue reporting the “stacking codes” but that changes as of January 1, 2013 when the stacking codes will be deleted and replaced with 100+ new codes that will go live and be paid under the CLFS, Shah says.

Facilities will need to make sure their charge masters are up-to-date with the new codes and with appropriate dollar charges. Setting appropriate charges is going to be a challenge since crosswalks don’t exist from the non-specific stacking codes to the new CPT codes so if hospitals haven’t already started working through this, they will need to right away, Shah says.

OPPS drug payment

Hospitals earned a big win with drug payments this year when CMS decided to finalize its proposal to follow the statute and reimburse facilities at the average sales price (ASP) plus 6%.

“We’ve been fighting for years to convince CMS to rely on the statute and provide payment for at least the acquisition cost of separately payable drugs at the level of ASP plus 6% and now the agency has finally agreed which is a nice win,” Shah says.

Geometric mean

CMS finalized a change to the way it calculates APC relative weights. For 2013, CMS is using geometric mean costs instead of median costs to generate APC relative weights.

In the OPPS final rule, CMS did acknowledge some of the limitations of using the geometric mean but also addressed some of the benefits, including the agency’s ability to make cost comparisons between IPPS and OPPS.

Commenters pointed out that the IPPS and OPPS payment systems differ in their rate-setting methodologies and that it will be hard for CMS to make accurate comparisons. The agency recognizes this but believes the positive aspects of moving to geometric mean outweigh the negatives and that meaningful comparisons are still possible. The impact of moving to the geometric mean results in APC payment rate fluctuations that hospitals will need to review to determine how the changes will inpact their reimbursement.

Additional changes

CMS finalized a number of other changes, including moving CPT codes into different APCs resulting in both payment increases and decreases. Providers scored one important win when CMS agreed that HCPCS code G0379 (direct admission of patient for hospital observation care) should be moved to APC 0608 (Level 5 hospital clinic visits).

Facilities expend a comparable amount of resources for both CPT code 99205 (office or other outpatient visit for the evaluation and management of a new patient) and HCPCS code G0379. Both will now be in the same APC, so facilities will begin to see higher payment for the direct admit G-code when it is used and does not generate a cmposite APC.

In addition, CMS finalized its proposal to provide an extra, separate payment to providers who use 100% non-HEU radioisotopes. It did depart from the proposed explanation of what 100% non-HEU means and also agreed with commenters to revise the description of the HCPCS Q-code that must be reported to signify use of non-HEU sources. Facilities will receive an additional $10 payment when using 100% non-HEU radioisotopes and reporting HCPCS code Q9969.

CMS also finalized changes to streamline the operations of the Quality Improvement Organizations, increase their transparency, and make them more responsive to beneficiary complaints about quality of care.

CMS confirmed the removal of one quality improvement measure for 2013 and did not add any additional quality measures.

CMS also decided not to remove CPT code 27447 (revision of total knee arthroplasty, with or without allograft; femoral and entire tibial component) from the inpatient-only list as it had proposed but it did remove CPT code 22856 (total disc arthroplasty, anterior approach, cervical) from the inpatient-only list.

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