(Medicare Claims Processing Manual)

EXAMPLE:   SI Charges  Payment Rate  New Charges Amount T $19,999 $6,000 $12,000 T $1 $3,000 $  6,000 T $0 $1,000 $  2,000  $20,000 $10,000 $20,000  Because total charges here are $20,000 and the first SI of T gets 6,000 of 10,000 total payment, the new charge for that line is 6,000/10,000 x $20,000 = $12,000.  F. For outliers, CMS will change the factor multiplied times the total line item payments from 3.5 to 2.75 and the factor used to multiply the difference between line item payments and costs from .50 to .45.  The CMS will eliminate the cost to charg e ratio adjustment factor of .981956 from outlier and device calculations.    G. Any claim having one or more APCs that match those listed in the Device Offset Table (Table 11) published in the November 1, 2002,  Federal Register and a HCPCS code with status indicator (SI) H, will have all applicable APC offset amounts (multiplied by the number of units and the multiple procedure discount factor applicable to that line item) summed and wage adjusted.  If there are more units of APCs with offset amounts than the re are units of SI H devices that have an active (non -deleted) device category HCPCS code beginning with a C, i.e., those codes listed in section XXII B. of this PM, the total wage adjusted offset amount will be multiplied by the number of units of SI H de vices that have a HCPCS code beginning with a C and then divided by the number of units of APCs with offset amounts.  The total wage adjusted offset amount will then be subtracted proportionately from the charges reduced to costs for any SI H devices that have a HCPCS code beginning with a C.  The pro rata reduction of 63.6 percent applicable to all SI G and/or H payments is eliminated.  50.7 - Changes to the OPPS Pricer Logic, Effective January 1, 2003 Through January 1, 2006 (Rev. 1882, Issued:  12-21-09; Effective Date:  01 -01-10; Implementation Date:  01 -04-10)  For January Pricers occurring between CY 2003 and 2006, you may find the updates outlined in the following CRs:  January 2004 - CR 3007, http://www.cms.hhs.gov/Transmittals/Downloads/R32OTN.pdf January 2005 - CR 3586, http://www.cms.hhs.gov/transmittals/Downloads/R385CP.pdf  January 2006 - CR 4250, http://www.cms.hhs.gov/transmittals/downloads/R804CP.pdf   50.8 - Annual Updates to the OPPS Pricer for Calendar Year (CY) 2007 and Later  (Rev. 1882, Issued:  12-21-09; Effective Date:  01-01- 10; Implementation Date:  01 -04-10)  Starting with the January 2007 update, all annual updates within the OPPS Pricer are explained within recurring update notifications located at the Hospital OPPS Transmittals  Web site found at:  http://www.cms.gov/Regulations- and-Guidance/Guidance/Transmittals/index.html.  60 - Billing for Devices Eligible for Transitional Pass- Through Payments and Items Classified in New Technology APCs  (Rev. 3425, Issued: 12- 18-15, Effective: 01-01-16, Implementation: 01-04-16)  The list of devices eligible for transitional pass -through payments changes as new device categories are approved for pass-through payment status on an ongoing basis, and as device categories expire from transitional pass -through payment and their costs ar e included in APC rates for associated surgical procedures.  To view or download the latest complete list of currently payable and previously payable pass-through device categories, refer to https://www.cms.gov/Medicare/Medicare -Fee-for-Service-Payment/HospitalOutpatientPPS/passthrough_payment.html   Please note that this link may change depending on CMS Web design requirements.  Hospitals are required to report device category codes that have expired from pass-through payment on claims when such devices are used in conjunction with procedures billed and paid for under the OPPS.  In a Federal Register notice dated November 15, 2004 we summarized several provisions (69 FR 65762) related to the required reporting of HCPCS codes for devices.  The most recent information concerning applications requesting CMS to establish coding and payment and eligibility requirements for additional (n ew) device categories for pass -through payment is located on the CMS Web site at https://www.cms.gov/Medicare/Medicare -Fee-for-Service-Payment/HospitalOutpatientPPS/passthrough_payment.html .  This Web link may change from time to time, depending on CMS Web design requirements.   60.1 - Categories for Use in Coding Devices Eligible for Transitional Pass- Through Payments Under the Hospit al OPPS  (Rev. 3685, Issued: 12- 22-16, Effective: 01-01-17, Implementation: 01-03-17)  The Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act (BIPA) of 2000 requires establishing categories for purposes of determining transitional pass- through payment for devices, effective April 1, 2001.  Each category is defined as a separate code in the C series or occasionally a code in another series (e.g., certain codes in the L series) of HCPCS.  C -codes are assigned by CMS for this purpose when other HCPCS codes for the eligible item do not exist.  Only devices specifically described by the long descriptions associated with the currently payable pass-through category codes are qualified for transitional pass-through payments.  The complete list of currently and previously payable pass- through category codes can be viewed and/or downloaded from the CMS Web site, currently at https://www.cms.gov/Medicare/Medicare- Fee-for-Service-Payment/HospitalOutpatientPPS/passthrough_payment.html   Each item that qualifies for transitional pass -through payments fits in one of the device categories currently active for pass -through payments.  Devices may be billed using the currently active category codes for pass -through payments, as long as they:   Meet the definition of a device that qualifies for transitional pass -through payments and other requirements and definitions put forth below in 60.3.   Are described by the long descriptor associated with a currently active pass -through device category HCPCS code assigned by CMS and    Are described according to the definitions of terms and other general explanations issued by CMS to accompany coding assignments in program instructions.  The current definitions and explanations are located with the latest complete list of currently payable and previously payable pass-through device categories, found at https://www.cms.gov/Medicare/Medicare -Fee-for-Service-Payment/HospitalOutpatientPPS/passthrough_payment.html .  Please note that this link may change depending on CMS Web design requirements.  If a device does not meet the description and other coding instructions for currently payable categories, even though it appears to meet the other requirements in this section, it may not be billed using one of the HCPCS codes for currently payable categories for transitional pass -through payments unless an applicable category is established by CMS, as discussed in section 60.3 below.  Transitional pass-through payment for a device is based on the charge on the individual providers bill, and the amount by which the hospitals charges for a device, adjusted to cost (the cost of the device), exceeds the portion of the otherwise applicable Medicare outpatient department fee schedule amount associated with the device.   The OCE software determines the reduction to cost and the deduction for similar devices.  The eligibility of a device category for transitional pass -through payments is tempor ary, lasting for at least 2 but no more than 3 years.  (The initial categories expired on January 1, 2003 or on January 1, 2004.  The underlying provision is permanent, and categories established later have expired or will expire in successive years.)  At the time of expiration, APC payment rates are adjusted to reflect the costs of devices (and drugs and biologicals) that received transitional pass-through payments.  These adjustments are based on claims data that reflect the use of transitional pass -through devices, drugs and biologicals in conjunction with the associated procedures.   60.2 - Roles of Hospitals, Manufacturers, and CMS for Billing for Transitional Pass-Through Items   (Rev. 1336; Issued:  09-14- 07; Effective/Implementation Dates:  10 -01-07)  In general, hospitals are ultimately responsible for the content of the bills they present to Medicare.  If hospitals have questions about appropriate coding that they cannot resolve on their own, the appropriate first step would be to review the HCPCS codes and/or the regulation governing payment for the year of service.  CMS does not have to have qualified a particular device for transitional pass-through payment before a hospital can bill for the device.  Hospitals are expected to make appropriate coding decisions based on these instructions and other information available to them.  Many device manufacturers routinely provide hospital customers with information about appropriate coding of their devices.  This may be helpful but does not supersede Federal requirements.   60.3 - Devices Eligible for Transitional Pass-Through Payments  (Rev. 4494: Issued: 01- 15-20: Effective:01-01- 20: Implementation; 01 -06-20)  The definition of and criteria for devices eligible for establishment of new categories for transitio nal pass -through payments was discussed and defined in a final rule with comment period published in the Federal Register on November 1, 2002, (67 FR 66781).  Two of the criteria were also modified by means of a final rule with comment period published in the Federal Register on November 10, 2005 (70 FR 68628).  As of January 1, 2010, implantable biologicals that are surgically inserted or implanted (through a surgical incision or natural orifice) are being evaluated for device pass -through payment as modified by means of a final rule with comment period and published in the November 20, 2009 Federal Register (74 FR 60471).  As of January 1, 2015, skin substitutes are being evaluated for device pass-through payment as modified by means of a final rule with comment period and published in the November 10, 2015 Federal Register (79 FR 66885).  As of  January 1, 2016, the application process for device pass-through payments will add a rulemaking component to the existing quarterly process and a requireme nt will ensure that medical devices seeking pass -through payments are new, as modified by means of a final rule with comment period and published in the  November 13, 2015 Federal Register (80 FR 70417).  As of January 1, 2017, the pass-through payment time period has been refined by having the pass-through start date begin with the date of first payment and by allowing pass-through status to expire quarterly as modified by means of a final rule with comment period and published in the November 14, 2016 Federal Register (81 FR 79655 ).  Also, in calculating the pass -through payment, the Implantable Devices Charged to Patients Cost to Charge Ration (CCR) will replace the hospital -specific CCR, when available and device offsets will be calculated from the HCPCS payment rate, instead of the APC payment rate (81 FR 79655 through 79656).  As of January 1, 2020, devices that have received FDA marketing authorization and a Breakthrough Device designation from the FDA have an alternative pathway to qualify for device pass -through payment status, under which devices would not be evaluated in terms of the current substantial clinical improvement criterion for the purposes of determining device pass- through payment status. The devices must still meet the other criteria for pass -through status.   The regulations regarding transitional pass-through payment for devices are compiled at 42 CFR 419.66.  Additionally, the eligibility criteria for CMS to establish a new ca tegory for pass-through payment are discussed on the CMS Web site at https://www.cms.gov/Medicare/Medicare -Fee-for-Service-Payment/HospitalOutpatientPPS/passthrough_payment.html   60.4 - General Coding and Billing Instructions and Explanations  (Rev. 11150; Issued: 12-10-21; Effective: 01-01-22; Implementation: 01-03-22)  60.4.1 - Explanations of Terms (Rev. 11150; Issued: 12-10-21; Effective: 01 -01-22; Implementation: 01-03-22)  Reporting Multiple Units of Pass -Through Device Categories    Hospitals must bill for multiple units of items that qualify for transitional pass -through payments when such items are used with a single procedure by entering the number of units used on the bill.  Reporting of Multiple Device Categories