Potential Changes for Inpatient-Only Procedures

by Debbie Mackaman, RHIA, CPCO, CCDS

CMS released the CY 2017 OPPS proposed rule on July 5 without much fanfare. On July 14, the Federal Register document was posted and, upon initial review, it seems rather short at 186 pages. As we all digest the potential financial impacts of the proposed rule, there are a few positive changes that may be coming to the CMS inpatient-only list.

In general, the inpatient-only rule states that certain surgeries must be performed on patients who have been formally admitted as inpatients or Medicare will not pay the hospital for the outpatient surgery or any other services provided during that day, unless certain exceptions are met.

Initially, CMS uses three criteria to identify an inpatient-only procedure based on:

1. The invasive nature of the procedure;
2. The need for at least 24 hours of post-operative recovery time or monitoring before the patient can be safely discharged; and,
3. The underlying physical condition of the patient who would require the surgery.

Then annually, the list is reviewed for additions and deletions using the following criteria:

• Using the simplest procedure described by the HCPCS code, most outpatient departments can provide the service to Medicare beneficiaries and claims data shows that the procedure is being performed on an outpatient basis in numerous hospitals;
• The HCPCS code is related to other codes that have already been removed from the inpatient-only list; and,
• The procedure can be safely performed in an ASC and is concurrently being added to the list of approved ASC procedures.

This year, CMS is proposing to remove six codes from the current inpatient-only list: two laryngoplasty codes and four spinal codes.

CMS has determined that the laryngoplasty codes are related to and clinically similar to another code that was previously removed from the inpatient-only list: 21495 (open treatment of hyoid fracture). The two codes proposed for removal are:

• 31584 and 31587

In addition, CMS is proposing that these two codes be assigned to a comprehensive APC (C-APC) with a status indicator of “J1” indicating that all services provided during the outpatient encounter–the from and through date on the claim–will be paid one payment. The current national payment rate for APC 5165 Level 5 ENT Procedures is about $3,956. The payment rate in CY 2017 is proposed to be increased to $4,087. (Note that 21495 will be deleted in 2017.)

The four spinal instrumentation codes are already identified in the CPT manual as add-on codes and should only be reported in addition to the definitive procedure(s). Some of the definitive procedures are currently performed in an outpatient department and had previously been removed from the inpatient-only list, so this change is a positive one for hospitals that may have hit the edit in the past during certain spinal surgeries that were appropriately performed as an outpatient. The codes include:

• 22840, 22842, 22845, and 22858

To view the complete article that appeared on Medicare Compliance Watch, click here.