(Medicare Claims Processing Manual)

300.5.1 -  Rural Health Centers  (RHCs )/Federally Qualified Health Centers ( FQHCs ) Special Billing Instructions  300.6 -  Common Working File (CWF) Edits  310 -  Lung Volume Reduction Surgery  320 -  Outpatient Intravenous Insulin Treatment (OIVIT)  320.1 -  HCPCS Coding for OIVIT  320.2 -  Medicare Summary Notices (MSN), Reason Codes, and Remark Codes   10 - Hospital Outpatient Prospective Payment System (OPPS)  (Rev. 1, 10-03-03) A-01-93  10.1 - Background  (Rev. 3941; Issued: 12- 22-17; Effective: 01- 01- 18; Implementation: 01 -02-18)  Section 1833(t)  of the Social Security Act (the Act) as amended by 4533 of the Balanced Budget Act (BBA) of 1997, authorizes CMS t o implement a Medicare PPS for:    Hospital outpatient services, including partial hospitalization services;   Certain Part B services furnished to hospital inpatients who have no Part A coverage;   Partial hospitalization services furnished by CMHCs;    Hepatit is B vaccines and their administration, splints, cast, and antigens provided by HHAs that provide medical and other health services;   Hepatitis B vaccines and their administration provided by CORFs; and   Splints, casts, and antigens provided to hospice pat ients for treatment of non -terminal illness.   The Balanced Budget Refinement Act of 1999 (BBRA) contains a number of major provisions that affect the development of the OPPS.  These are:   Establish payments under OPPS in a budget neutral manner based on estimates of amounts payable in 1999 from the Part B Trust Fund and as beneficiary coinsurance under the system in effect prior to OPPS (Although the base rates were calculated using the 1999 amounts, these amounts are increased by the hospital inpatient mar ket basket, minus one percent, to arrive at the amounts payable in the year 2000.  See 10.3 for Benefits and Improvement Protection Act (BIPA) changes in market basket updates.);   Extend the 5.8 percent reduction in operating costs and 10 percent reduction in capital costs (which had been due to sunset on December 31, 1999) through the first date the OPPS is implemented;   Require annual updating of the OPPS payment weights, rates, payment adjustments and groups;   Require annual consultation with an expert provider advisory panel in review and updating of payment groups;    Establish budget neutral outlier adjustments based on the charges, adjusted to costs, for all OPPS services included on the submitted outpatient bill for services furnished before January 1, 2002, and thereafter based on the individual services billed;   Provide transitional pass-through payment for the additional costs of new and current medical devices, drugs, and biologicals for at least two years but not more than three years;   Provide payment under OPPS for implantable devices including durable medical equipment (DME), prosthetics and those used in diagnostic testing;   Establish transitional payments to limit providers losses under OPPS; the additional payments are for 3 1/2 years for CMHCs and most hospitals, and permanent for the 10 cancer hospitals; and   Limit beneficiary coinsurance for an individual service paid under OPPS to the inpatient hospital deductible.   The Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA), which was signed into law on December 21, 2000, made a number of revisions to the Outpatient Prospective Payment System (OPPS) .  These are:    Accelerated reductions of beneficiary copayments;    Increase in market basket update for 2001;   Transitional corridor provision for transitional outpatient payments (TOPs) for providers that did not file 1996 cost reports; and   Special transi tional corridor treatment for childrens hospitals.  The Secretary has the authority under 1883(t)  of the Act to determine which services are included (with the exception of ambulance services for which a separate fee schedule is applicable starting April 1, 2002).  Medicare will continue to pay for clinical diagnostic laboratory services, orthotics, prosthetics (except as noted above), and for take-home surgical dressings on their respective fee schedule s.  Medicare will also continue to pay for chronic dialysis using the composite rate (certain CRNA services, PPV, and influenza vaccines and their administration, orphan drugs, and ESRD drugs and supplies are not included in the composite rate), for screen ing mammographies based on the current payment limitation, which changes to payment under the Medicare Physician Fee Schedule (MPFS), effective January 1, 2002, and for outpatient rehabilitation services (physical therapy including speech language pathology and occupational therapy) under the MPFS.  Acute dialysis, e.g., for poisoning, will be paid under OPPS.  The 10 cancer centers exempt from inpatient PPS are included in this system, but are eligible for hold harmless payment under the Transitional Corridor provision.  The Outpatient Prospective Payment System (OPPS) applies to all hospital outpatient departments except for hospitals that provide Part B only services to their inpatients; Critical Access Hospitals (CAHs); Indian Health Service hospitals; h ospitals located in American Samoa, Guam, and Saipan; hospitals located in the  Virgin Islands; and effective January 1, 2017 non -excepted off -campus provider -based departments of a hospital. The OPPS also applies to partial hospitalization services furnished by Community Mental Health Centers (CMHCs).   Certain hospitals in Maryland that are paid under Maryland waiver provisions are also excluded from payment under OPPS but not from reporting Healthcare Common Procedure Coding System (HCPCS) and line item da tes of service.   10.1.1 - Payment Status Indicators  (Rev. 1445; Issued:  02- 08-08; Effective:  01- 01-08; Implementation:  03 -10-08)  An OPPS payment status indicator is assigned to every HCPCS code.  The status indicator identifies whether the service described by the HCPCS code is paid under the OPPS and if so, whether payment is made separately or packaged.  The status indicator may also provide additional information about how the code is paid under the OPPS or under another payment system or fee sch edule.  For example, services with status indicator A are paid under a fee schedule or payment system other than the OPPS.  Services with status indicator N are paid under the OPPS, but their payment is packaged into payment for a separately paid service.  Services with status indicator T are paid separately under OPPS but a multiple procedure payment reduction applies when two or more services with a status indicator of T are billed on the same date of service.   The full list of status indicators and their  definitions is published in Addendum D1 of the OPPS/ASC proposed and final rules each year.  The status indicator for each HCPCS code is shown in OPPS Addendum B.  10.2 - APC Payment Groups (Rev. 1445; Issued:  02- 08-08; Effective:  01- 01-08; Implementati on:  03 -10-08)  Each HCPCS code for which separate payment is made under the OPPS is assigned to an ambulatory payment classification (APC) group. The payment rate and coinsurance amount calculated for an APC apply to all of the services assigned to the AP C.  A hospital may receive a number of APC payments for the services furnished to a patient on a single day; however, multiple surgical procedures furnished on the same day are subject to discounting.  (See section 10.5 for discussion of multiple procedure  discounting under the OPPS).   Services within an APC are similar clinically and with respect to hospital resource use. The law requires that the median cost for the highest cost service within the APC may not be more than 2 times the median cost for the l owest cost service in the APC, and the Secretary may make exceptions in unusual cases, such as low volume items and services.   This is commonly called the 2 times rule.  The median costs of services change from year to year as a result of changes in hos pitals charge, changes to cost -to-charge ratios as determined from hospital cost reports, and changes in the frequency of services.  Therefore, the APC assignment of a service may change from one year to the next year as is needed to avoid a violation of the 2 times rule or to improve clinical and/or resource homogeneity of APCs.  This APC reconfiguration may result in significant changes in the payment rate for the APC and, therefore, for the service being billed.  10.2.1 - Composite APCs (Rev. 3941; Issu ed: 12 -22-17; Effective: 01-  01-18; Implementation: 01 -02-18)  Composite APCs provide a single payment for a comprehensive diagnostic and/or treatment service that is defined, for purposes of the APC, as a service typically reported with multiple HCPCS codes.  When HCPCS codes that meet the criteria for payment of the composite APC are billed on the same date of  service, CMS makes a single payment for all of the codes as a whole, rather than paying individually for each code.   See Addendum A at www.cms.hhs.gov/HospitalOutpatientPPS/  for the national unadjusted payment rates for these composite APCs.  10.2.2 - Cardiac Resynchronization Therapy  (Rev. 2386, Issued: 01- 13-12, Effective: 01-01-12, Implementation: 01 -03-12)  Effective for services furnished on or after January 1, 2012, cardiac resynchronization therapy involving an implantable cardioverter defibrillator (CRT -D) will be recognized as a single, composite service combining implantable c ardioverter defibrillator procedures (described by CPT code 33249 (Insertion or repositioning of electrode lead(s) for single or dual chamber pacing cardioverter -defibrillator and insertion of pulse generator  )) and pacing electrode insertion procedures (d escribed by CPT code 33225 (Insertion of pacing electrode, cardiac venous system, for left ventricular pacing, at time of insertion of pacing cardioverter-defibrillator or pacemaker pulse generator (including upgrade to dual chamber system))) when performed on the same date of service.  When these procedures appear on the same claim but with different dates of service, or appear on the claim without the other procedure, the standard APC assignment for each service will continue to be applied.  Medicare will  make a single payment for those procedures that qualify for composite service payment, as well as any packaged services furnished on the same date of service.  Because CPT codes 33225 and 33249 may be treated as a composite service for payment purposes, C MS is assigning them status indicator Q3 (Codes that may be paid through a composite APC) in Addendum B.  Hospitals will continue to use the same CPT codes to report CRT-D procedures, and the I/OCE will evaluate every claim received to determine if payment as a composite service is appropriate. Specifically, the I/OCE will determine whether payment will be made through a single, composite payment when the procedures are done on the same date of service, or through the standard APC payment methodology when they are done on different dates of service.   CMS is also implementing claims processing edits that will return to providers incorrectly coded claims on which a pacing electrode insertion procedure described by CPT code 33225 is billed without one of the following CPT codes for insertion of an implantable cardioverter defibrillator or pacemaker:   33206 (Insertion or replacement of permanent pacemaker with transvenous electrode(s); atrial);   33207 (Insertion or replacement of permanent pacemaker with transvenous electrode(s); ventricular);   33208 (Insertion or replacement of permanent pacemaker with transvenous electrode(s); atrial and ventricular);    33212 (Insertion or replacement of pacemaker pulse generator only; single chamber, atrial or ventricular);    33213 (Insertion or replacement of pacemaker pulse generator only; dual chamber, atrial or ventricular);    33214 (Upgrade of implanted pacemaker system, conversion of single chamber system to dual chamber system (includes removal of previously placed pulse generator, testing of existing lead, insertion of new lead, insertion of new pulse generator));    33216 (Insertion of a single transvenous electrode, permanent pacemaker or cardioverter -defibrillator);    33217 (Insertion of 2 transvenous electrodes, permanent pacemaker or cardioverter -defibrillator);    33221(Insertion of pacemaker pulse generator only; with existing multiple leads);    33222 (Revision or relocation of skin pocket for pacemaker);    33230 (Insertion of pacing cardioverter -defibrillator pulse genera tor only; with existing dual leads);    33231 (Insertion of pacing cardioverter -defibrillator pulse generator only; with existing multiple leads)    33233 (Removal of permanent pacemaker pulse generator);    33234 (Removal of transvenous pacemaker electrode(s); single lead system, atrial or ventricular);