Health Information Management

Special report: News from the Advisory Panel on Ambulatory Payment Classification Groups Meeting

APCs Insider, August 12, 2011

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Editor’s note: Kimberly Anderwood Hoy, JD, CPC, Director of Medicare and compliance at HCPro, Inc, in Danvers, MA, attended the two-day Advisory Panel on Ambulatory Payment Classification Groups Meeting at CMS’ central offices in Baltimore August 10–11. She filed this report on the first day’s highlights. Be sure to read next week’s APCs Weekly Monitor for a report on day two.

During the first day of the meeting, John McInnes, MD, the new director of the division of outpatient care, discussed the major proposals in the CY2012 OPPS proposed rule. He highlighted five areas:

  • The OPPS update factor
  • The cancer hospital payment adjustment
  • Payment for drugs and biological
  • Physician supervision
  • The new APC for cardiac resynchronization

The APC Groups and Status Assignments Committee made several recommendations, including the creation of new APCs and the removal of some procedures from the inpatient-only list. The panel adopted the committee’s recommendation to support the creation of two new APCs (0331 and 0334) for the HCPCS codes for reporting combined abdominal and pelvic CT scans (74176–74178). When these codes were introduced in 2011, CMS assigned them to existing APCs for individual CT scans.

Providers argued that these codes represented the combination of predecessor codes and that assigning them to the same APC as single exams did not sufficiently compensate providers for what are effectively multiple exams. The new APCs would raise the payment for these codes from a range of $193–$334 in CY2011 to $402–$571 in CY2012.

The panel also adopted the committee’s recommendation to support CMS’ proposal to create a new APC for upper gastrointestinal (GI) procedures. This new APC would result in three levels of upper GI procedures. However, the subcommittee recommended that two codes— 43227 (endoscopic esophageal repair) and 43830 (placement of gastronomy tube)—be assigned to the Level III APC rather than Level II because their median costs are closer to the median costs of Level III procedures.

Panel members also decided they need additional clinical information before determining whether to recommend removing 43279 (Laparoscopic esophagomyotomey [Heller type], with fundoplasty) from the inpatient-only list and which APC it should be grouped to should this occur.

Valerie Rinkle, revenue cycle director at Asante Health Systems in Medford, OR, publicly commented that the panel may wish to consider Medicare Advantage Plan data regarding how frequently the procedure is performed on an outpatient basis when deciding whether to remove procedures from the inpatient-only list. A CMS representative confirmed that the agency currently is reviewing OPPS data only and that it does not consider Medicare Advantage Plan data.

The panel then turned to the issue of payment for drugs and biologicals. Alpha-Banu Huq, a member of CMS’ Division of Outpatient Care, discussed the proposed payment for drugs. A pharmacy stakeholder group discussed ways that CMS’ methodology for reimbursing hospitals for drugs may be inadequate.

Jugna Shah, president of Nimitt Consulting in Washington, DC, represented the Alliance of Dedicated Cancer Centers. , She highlighted the need for CMS to allocate additional pharmacy overhead from packaged drugs to the payment for separately payable drugs. This would allow the payment to be raised from CMS’ proposal of average sales price (ASP)+4% to ASP+6% to more adequately compensate hospitals for cost of packaged drugs.

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