Health Information Management

CMS proposes more packaging

APCs Insider, July 26, 2013

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By Michelle A. Leppert, CPC

CMS plans to package lab tests, add-on codes, orthotics, and surgical dressings into payment for the primary procedure in 2014. CMS proposed the additional packaging as part of the 2014 OPPS proposed rule.

Packaging is certainly nothing new. CMS has been trying to move OPPS from a “fee-for-service” model to a more “PPS-like” system for years. The packaging proposed for 2014 will move OPPS even closer to IPPS in the way CMS pays for services.

Packaging does raise some concerns, chief among them reimbursement. Hospitals could end up seeing higher or lower payments depending on how many lab tests they perform as part of a protocol for certain diagnoses and procedures.

CMS will likely include a certain number of lab tests in its payment-rate calculations. Currently, CMS pays for lab tests separately from the procedure, so the more lab tests a facility performs, the more money it receives. That’s not to say facilities are inflating the number of lab tests they perform. Every facility does things a little differently and physicians sometimes want different information.

Let’s say CMS factors in payment for three lab tests for a specific procedure. If a facility typically does only one or two tests with that procedure, the hospital will probably see an increase in payments. However, if the hospital’s protocol calls for five lab tests for that service, the hospital will end up with less money.

Until we know the exact payment rates, we can’t calculate how this proposal will affect individual facilities or services.

That’s the immediate financial impact. What about two years from now in 2016? CMS uses claims data to set rates. So hospitals need to report everything they do on the claim, even when they don’t receive separate payment. Unfortunately hospitals don’t always do that.

Critical care is a perfect example. CMS instructed hospitals to report certain services when provided with critical care so it could gather data and set appropriate payment rates. Facilities didn’t do so, and CMS decreased critical care payment.

The same thing could happen with these new packaged items. Hospitals need to be slightly OCD when it comes to reporting everything on the claim, even when they don’t receive separate payment. You’re still getting paid for the items or services, CMS is just rolling it into one payment.



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