Health Information Management

Q&A: What’s behind the decline in pass-through devices?

APCs Insider, December 5, 2014

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A: Based on the number of devices eligible for pass-through payment today compared to when the OPPS started, you are correct that there are not nearly as many. In the beginning, many of the devices with HCPCS C codes were considered new technology, as the OPPS was based on claims data from the mid-1990s.
A lot of technological changes and improved devices were not included in the payment calculations in the early years. CMS created the pass-through payments to compensate for that cost data lag, until it had enough cost information to be sure that the newer devices were included in the rate-setting calculations.
CMS’ policy has been, and continues to be, that device pass-through payment is based on new technology–not just a new and improved device. What makes it different from other devices on the market? That has to be proven to CMS and the HCPCS committee. If a comparable item and an appropriate device category exist, the device is reported with the existing HCPCS code.
Section 1833(t)(6)(B)(iii) of the Social Security Act governs the period for which pass-through payment can be made for a device category. The implementation regulation (42 CFR 419.66(g)) states that this payment eligibility period begins on the date that CMS establishes the category of devices. A device category may be eligible for pass-through payment for at least two years, but not more than three years. The clock begins on the date that the device category is eligible for pass-through payment. Once that timeframe is reached, the regulation requires that CMS terminate pass-through status.
One device will receive pass-through payment until December 31, 2015: C1841 (retinal prosthesis, includes all internal and external components). If additional devices are submitted and determined to meet the criteria, CMS will assign a new HCPCS code and pass-through status for the device.
Editor’s note: Denise Williams, RN, CPC-H, seniorvice president of revenue integrity services at Health Revenue Assurance Associates, Inc., in Plantation, Florida, answered this question.

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