Major provisions from the 2017 OPPS Final Rule

by Valerie Rinkle, MPA

Last week, Kimberly Anderwood Hoy Baker, JD, CPC, director of Medicare and compliance for HCPro, summarized the policies CMS finalized and also the new payment policies they both proposed and finalized as part of an interim final rule regarding implementation of Section 603 of the Bipartisan Budget Act of 2015. This week’s article is a summary of the other major provisions of the final rule.

Conversion Factor Update

Recall that the recalibration and re-assignment of codes to APCs is budget neutral and the only “new” money into the OPPS system comes from the annual market basket update. For 2017, the final update is 1.65% update (compared to 1.55% in proposed rule) which is based on a 2.7% market basket less the mandated productivity factor of 0.3% and the ACA-required reduction of 0.75%. This results in an overall increase in OPPS payments of $5 billion between 2016 and 2017. Recall also, that the few hospitals that do not report the required quality measures for outpatient hospital services will receive the 2% reduction in their conversion factor. Finally, this does not include the 2% reduction for sequestration that continues into perpetuity until Congress intervenes to stop it.

Comprehensive APC (C-APC) Expansion

CMS is continuing to rapidly expand C-APCs. Recall that these “mini-DRGs” pay a single payment for all the individual services billed on a claim, with very few exceptions. CMS is adding 25 more C-APCs, but that belies the dramatic increase in CPT codes that will be grouped to these 25 additional C-APCs—a whopping 1,877 CPT codes are grouped into these C-APCs. As a result of this dramatic increase, the number of code combinations that qualify for a C-APC complexity adjustment have significantly increased from 66 in 2016 to 312 in the 2017 final rule. Note that to qualify for a complexity adjustment, CMS must see the code combinations in at least 25 or more claims and the mean cost of the claims must exceed the lowest cost code in the C-APC by two or more times. If so, then the C-APC promotes to the next higher C-APC within the C-APC clinical family.
 
One of the new C-APCs only includes one code. C- APC 5244, Level 4 Blood Product Exchange and Related Services, includes CPT code 38240 for Hematopoietic progenitor cell (HPC); allogeneic transplantation per donor, more commonly known as bone marrow transplantation (BMT). CMS responded to commenters and applied unique claim requirements based on long-standing claims processing instructions to develop a higher finalized payment rate of $27,752.75 instead of the proposed $15,267. CMS listened to commenters that it should base the C-APC rate calculation solely on correctly coded claims (those with both CPT 38240 & revenue code 0819 charges). Revenue code 0819 reflects claims with donor acquisition costs. It is unclear when claims lacked revenue code 0819, whether they included donor acquisition costs.

In addition to the new C-APC, CMS finalized a few other changes that will need to be implemented. First, the UB-04/837I standards maintenance organization (National Uniform Billing Committee or NUBC) approved at CMS’ request, a new dedicated revenue code, revenue code 0815, for donor acquisition costs associated with BMT. This revenue code will replace 0819, which is the revenue code required in CMS’ current billing instructions. To ensure future outpatient claims include both the transplantation charges and donor charges, CMS will implement a new claim edit requiring the presence of revenue code 0815 charges when CPT 38240 is reported. Since revenue codes are generally reported the same for inpatient and outpatient claims, providers should plan to report 0815 for donor acquisition charges when the BMT is performed on inpatients, which is more common than outpatients.

CMS also proposed companion cost reporting instructions for donor acquisition costs, but revised its proposed cost center from 112.5 to 77 so that the costs and revenue will flow correctly through the cost report for rate-setting. CMS did not address the question about whether this is applicable to inpatients and outpatients, but presumably because that is how cost reports work, this will be the case.

To read the complete, detailed article on Medicare Compliance Watch, click here.