Health Information Management

No major surprises in 2015 OPPS final rule, but CMS makes some concessions to providers

APCs Insider, November 7, 2014

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By Steven Andrews, Editor
CMS finalized proposed policies including comprehensive APCs (C-APCs), expanded packaging, and changes to physician certification for inpatient services in the 2015 OPPS final rule, but did make concessions to providers on one important proposal.
In the 2015 OPPS proposed rule, CMS noted that the Medicare Payment Advisory Commission (MedPAC) has questioned the appropriateness of the increased payments made to physician offices that become part of hospital outpatient departments. CMS solicited comments during the 2014 OPPS rulemaking cycle regarding the best way to collect data about the frequency and types of services furnished in provider-based departments in off-campus locations.
With no consensus reached through provider comments, CMS proposed in the 2015 OPPS proposed rule the creation of a HCPCS modifier to be appended to every code for a service furnished in a hospital's off-campus provider-based department. CMS planned to have providers use he modifier on both the CMS-1500 claim form for physician services and the UB-04 form (CMS Form 1450) for hospital outpatient services beginning January 1, 2015.
CMS again solicited comments in the 2015 OPPS proposed rule, and providers largely opposed the creation of this HCPCS modifier, citing the additional administrative burden and training associated with reporting it. Many commenters also said this policy would require significant changes to hospital billing systems, including needing a separate chargemaster for outpatient off-campus provider-based departments.
CMS acknowledged the administrative burden, but found it necessary weighed against the value of collecting this information. In the final rule, CMS announced that the policy would be moving forward, though significant changes were made in light of provider comments.
"Hospitals will have to report a modifier on each and every outpatient service provided in an off-campus provider-based department," Jugna Shah, MPH, president and founder of Nimitt Consulting, based in Washington, D.C., and Spicer, Minnesota. "The only good news is that CMS is allowing a one-year voluntary reporting period during which time hospitals can figure out how to implement the reporting."
For hospitals, they will be required to report modifier –PO (services, procedures and/or surgeries furnished at off-campus provider-based outpatient departments) for applicable services, but will have until January 1, 2016, until the modifier is mandatory. Hospitals can voluntarily report this modifier for a year before it's required if they wish to test their processes for implementation.
On the physician side, CMS made even more radical changes. Instead of a HCPCS modifier, CMS will create a two new place of service (POS) codes for reporting on professional claims, replacing POS code 22 (hospital outpatient). One will identify outpatient services furnished in on-campus, remote, or satellite location of a hospital, and the other will identify services furnished in an off-campus, provider-based hospital setting.
CMS does not expect these codes to be available before July 1, 2015, though there will be no voluntary reporting period. Once approved, CMS expects providers to use them immediately, since all professional claims already require a POS code to be accepted by Medicare. 
For highlights of other policies finalized in the rule, see For more analysis on the changes in the 2015 OPPS final rule and how to implement them, join Shah and Valerie A. Rinkle, MPA, at 1 p.m. (Eastern) on Tuesday, December 9, for HCPro's 12th annual OPPS final rule webcast.

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