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- IN THIS LECTURE WE WILL BE CONTINUING
DISCUSSION OF CHAPTER 7.
THIS POWER POINT WILL FOCUS
ON HOSPITAL OUTPATIENT PROSPECTIVE PAYMENT SYSTEMS.
THE HOSPITAL OUTPATIENT PROSPECTIVE PAYMENT SYSTEM
COVERS HOSPITAL OUTPATIENT SERVICES,
INCLUDING CLINIC VISITS, ER VISITS, AMBULATORY SURGERIES.
THE AFFECTED PERIOD RUNS FROM JANUARY 1 TO DECEMBER 31,
AND IS UPDATED ANNUALLY.
THE OMNIBUS RECONCILIATION ACT OF 1986
MANDATED THAT MEDICARE MOVE TO PROSPECTIVE PAYMENT SYSTEM
FOR HOSPITAL OUTPATIENT SERVICES.
CONGRESS INSTRUCTED THE SECRETARY
OF THE HEALTH AND HUMAN SERVICES TO INCLUDE FACILITY COST
FOR SERVICES PROVIDED AN AMBULATORY SURGERY UNITS,
ER'S, AND HOSPITAL CLINICS WITHIN THIS SYSTEM.
PROFESSIONAL SERVICES, SUCH AS PHYSICIAN FEES
WERE NOT INTENDED TO BE INCLUDED
IN THIS HOSPITAL OUTPATIENT PROSPECTIVE PAYMENT SYSTEM.
THE LEGISLATION PRESCRIBED THAT THE SYSTEM
WAS TO BE BASED ON H.C.P.C.S. LEVEL I AND II
BECAUSE THAT'S THE PREVAILING CODING SYSTEM
USED IN THE OUTPATIENT SETTING.
THAT ACT GAVE MEDICARE FIVE YEARS TO DEVELOP THE SYSTEM
WITH A PROJECTED IMPLEMENTATION FOR 1991.
THIS SCREEN LISTS SOME OF THE REASONS
WHY IMPLANTATION OF A PROSPECTIVE SYSTEM
WAS FOUGHT AFTER FOR THE OUTPATIENT SETTING.
D.R.G.S WERE VERY SUCCESSFUL IN THE INPATIENT SETTING.
COST FOR OUTPATIENT SERVICES WERE RAPIDLY INCREASING.
HOSPITALS SHIFTED INPATIENT COST TO THE OUTPATIENT SIDE
AFTER D.R.G.S WERE IMPLEMENTED TO TRY AND ENSURE CONSISTENCY
IN PROCEDURE REIMBURSEMENT AND IN BENEFICIARY RESPONSIBILITY.
BEFORE THE PROSPECTED PAYMENT SYSTEM IN THE OUTPATIENT SIDE
IT WAS A COST BASE PAYMENT.
THE BENEFICIARIES WERE RESPONSIBLE FOR 20% OF CHARGES.
AND WHAT BENEFICIARIES WERE PAYING WAS INCONSISTENT
FROM HOSPITAL TO HOSPITAL.
FOR EXAMPLE, HOSPITAL A MIGHT CHARGE $3,000 FOR A COLONOSCOPY,
WHERE HOSPITAL B MAY CHARGE 3500 FOR THAT SAME PROCEDURE.
AND THEN YOU CAN SEE HOW THAT IMPACTS
WHAT THE MEDICARE BENEFICIARY IS PAYING TO EACH HOSPITAL.
A GRANT WAS AWARDED TO 3M IN 1988
TO DEVELOP A GROUPING SYSTEM
FOR THE OUTPATIENT PROSPECTED PAYMENT SYSTEM.
IN 1990 3M DID PROPOSE VERSION
1.0 AMBULATORY PATIENT GROUPS OR A.P.G.S.
THE A.P.G. SYSTEM,
THAT'S A VISIT BASED CLASSIFICATION SYSTEM
THAT DESCRIBES THE AMOUNT AND THE TYPE OF RESOURCES
THAT ARE CONSUMED DURING A PARTICULAR VISIT.
A VISIT IS AN ENCOUNTER
BETWEEN A PATIENT AND A HEALTHCARE PROVIDER.
IN 1995 THEN 3M RELEASED AN UPDATED VERSION,
WHICH WAS A.P.G., EXCUSE ME, VERSION 2.0.
SO A.P.G.S ARE STILL USED IN MANY STATES
FOR MEDICAID REIMBURSEMENT ONLY.
IN 1997 THE BALANCE BUDGET ACT SET NEW DATES FOR MEDICARE
TO MOVE TO A PROSPECTIVE PAYMENT SYSTEM.
THAT DEADLINE FOR HOSPITALS WAS JANUARY 1, 1999,
AND WAS ONE YEAR LATER
FOR INPATIENT PROSPECTIVE PAYMENT SYSTEM
EXCEPT CANCER CENTERS.
IN SEPTEMBER OF '98 C.M.S. RELEASED THE PROPOSED RULE
FOR THE NEW OUTPATIENT PROSPECTIVE PAYMENT SYSTEM.
THE GROUPING SYSTEM IN THE PROPOSED RULE
WAS CALLED AMBULATORY PAYMENT CLASSIFICATIONS OR A.P.C.S.
A.P.C.S WERE DEVELOPED BY MODIFYING
THAT INITIAL A.P.G. SYSTEM THAT WAS CREATED BY 3M
USING PAST CLAIMS DATA AND CLINICAL ANALYSIS.
BEFORE IMPLEMENTATION OF THE A.P.C.. SYSTEM PROPOSED IN '98,
THE BALANCED BUDGET REFINEMENT ACT OF 1999
DID REQUIRE SEVERAL MODIFICATIONS TO THE SYSTEM.
IT MANDATED ANNUAL REVIEWS OF GROUPS, WEIGHTS,
AND WAGE INDEX ADJUSTMENTS, SIMILAR TO THE REVIEW
THAT IS DONE FOR THE INPATIENT SIDE.
MEDICARE WAS INSTRUCTED TO DEVELOP
A PROFESSIONAL ADVISORY PANEL TO HELP ASSIST
WITH THE MAINTENANCE OF THE SYSTEM.
IT WAS DETERMINED THAT BENEFICIARY COINSURANCE
FOR ANY GIVEN PROCEDURE COULD NOT EXCEED
THE INPATIENT DEDUCTIBLE FOR THAT YEAR.
A MEDICARE PRESCRIPTION DRUG IMPROVEMENT AND MODERNIZATION
ACT OF 2003 DID FURTHER MODIFY
THE OUTPATIENT PROSPECTIVE PAYMENT SYSTEM.
M.M.A. NOW ALLOWS PAYMENTS FOR AN INITIAL
PREVENTIVE PHYSICAL EXAM FOR BENEFICIARIES
WHO'S COVERAGE BEGAN AFTER JANUARY 1 OF 2005.
M.M.A. DID CHANGE THE SCREENING AND DIAGNOSTIC
MAMMOGRAPHY PAYMENT FROM THE OUTPATIENT PROSPECTIVE
PAYMENT SYSTEM TO A FEE SCHEDULE PAYMENT.
C.M.S. USES THE VARIETY OF MODELS
TO REIMBURSE FACILITIES
FOR THEIR HOSPITAL OUTPATIENT SERVICES.
THE SYSTEM USES THERE REIMBURSEMENT METHODS.
THESE SCHEDULES PROSPECTIVE PAYMENT, AND ALSO COST BASED.
THE PRIMARY STANDARD THAT DISTINGUISHES
A PROSPECTIVE PAYMENT SYSTEM FROM A FEE SCHEDULE SYSTEM
IS THAT IN THE PROSPECTIVE PAYMENT SYSTEM
THE COST FOR CERTAIN ITEMS AND SECONDARY SERVICES
THAT ARE ASSOCIATED WITH THE PRIMARY PROCEDURE
ARE PACKAGED INTO A PAYMENT FOR THAT PRIMARY PROCEDURE.
A FEE SCHEDULE SYSTEM THAT ESTABLISHES A SEPARATE PAYMENT
AMOUNT FOR EACH ITEM OR SERVICE, AND THERE IS NO PACKAGING
THAT OCCURS.
THE OUTPATIENT PROSPECTIVE PAYMENT SYSTEM
DOES REQUIRE FACILITIES TO USE LEVEL I AND LEVEL II H.C.P.C.S.
CODE TO REPORT SERVICES OR PROCEDURES PERFORMED,
AND ALSO ITEMS OR SUPPLIES THAT ARE PROVIDED TO BENEFICIARIES.
EACH CODE IN H.C.P.C.S. HAS BEEN ASSIGNED
A PAYMENT STATUS INDICATOR.
WHAT THIS INDICATOR DOES IS ESTABLISH
HOW THAT SERVICE PROCEDURE OR ITEM IS PAID.
THAT IS, IS IT A FEE SCHEDULE, A.P.C., REASONABLE COST,
OR IS IT UNPAID.
AND THIS IS A SMALL SAMPLE
OF A FEW OF THE PAYMENT STATUS INDICATORS.
EVERY YEAR THE SECRETARY OF THE HEALTH AND HUMAN SERVICES
DOES REVIEW CLAIMS DATA
AND DETERMINES WHICH PROCEDURES ARE INPATIENT ONLY PROCEDURES,
AND DOES CREATE AN INPATIENT ONLY LIST,
WHICH EQUALS PAYMENTS STATUS INDICATOR OF C.
TO MOVE OFF OF THE INPATIENT ONLY LIST,
A PROCEDURE MUST BE PERFORMED IN OUTPATIENT SETTINGS
AT LEAST 60% OF THE TIME.
TO BE REIMBURSED PROCEDURES
THAT ARE INDICATED AS C OR INPATIENT ONLY,
MUST BE PROVIDED TO MEDICARE BENEFICIARIES
IN AN INPATIENT SETTING, AND THEN, THEREFORE,
PAID UNDER THE INPATIENT PROSPECTIVE PAYMENT SYSTEM.
C.M.S. OR MEDICARE DOES MAINTAIN
THE OUTPATIENT PROSPECTIVE PAYMENT SYSTEM.
AS WAS MANDATED, MEDICARE MUST PERFORM
AN ANNUAL REVIEW OF A.P.C. GROUPINGS
AND OF RELATIVE WEIGHTS.
THE WAGE INDEX AMOUNTS ADJUSTED
FOR THE CURRENT INPATIENT PROSPECTIVE SYSTEM
MUST ALSO BE INCORPORATED
INTO THE OUTPATIENT PROSPECTIVE PAYMENT SYSTEM EACH YEAR.
IN ADDITION, THE PAYMENT AMOUNT ARE REALLY UPDATED EVERY YEAR
BASED ON AN ADJUSTMENT TO THE CONVERSION FACTOR.
THERE'S ALSO AN A.P.C. ADVISORY PANEL
THAT ASSIST WITH THE MAINTENANCE
OF THE OUTPATIENT PROSPECTIVE PAYMENT SYSTEM.
THAT PANEL IS COMPOSED OF 15 EXPERTS
FROM VARIOUS HEALTHCARE SETTINGS.
THE PANEL IS TECHNICAL IN NATURE,
AND REALLY PROVIDES AN ANALYSIS,
AND RECOMMENDATIONS BACK TO C.M.S.
AND THEN C.M.S. WILL CONSIDER AND ADDRESS
ALL OF THOSE RECOMMENDATIONS,
BUT THEY DO NOT HAVE TO ACCEPT THOSE RECOMMENDATIONS.
IN ADDITION, THE MEDICARE PAYMENT ADVISORY COMMISSION
OR MEDPAC DOES PROVIDE CONGRESS
AND C.M.S. WITH RECOMMENDATIONS
TO TRY AND IMPROVE
THAT OUTPATIENT PROSPECTIVE PAYMENT SYSTEM.
AGAIN, MEDICARE CONSIDERS AND RESPONDS
TO ALL MEDPAC RECOMMENDATIONS,
BUT DOES NOT HAVE TO ACCEPT OR IMPLEMENT THEM.
REVISIONS TO THE PROSPECTIVE PAYMENT SYSTEM,
THE OUTPATIENT SIDE ARE RELEASED IN THE FEDERAL REGISTER,
THE PROPOSED RULE IN JULY, AND THE FINAL RULE IN OCTOBER.
EACH A.P.C. GROUP COMPOSES PROCEDURES AND SERVICES
THAT ARE REALLY CLINICALLY COMPARABLE
WITH RESPECT TO THE LEVEL OF RESOURCES THAT THEY USE.
ALL PROCEDURES OR SERVICES ASSIGNED TO AN A.P.C. GROUP
MUST MEET THE TWO TIMES RULE,
WHICH ESTABLISHES THAT THE MEDIAN COST
OF THE MOST EXPENSIVE ITEM OR SERVICE WITHIN A GROUP
CANNOT BE MORE THAN TWO TIMES GREATER THAN THE MEDIAN COST
OF THE LEAST EXPENSIVE ITEM WITHIN THAT SAME GROUP.
MEDICARE CAN PROPOSE EXCEPTIONS OF COURSE TO THAT TWO TIME RULE.
PACKAGING AND BUNDLING CONCEPTS
ARE USED IN THE OUTPATIENT PROSPECTIVE PAYMENT SYSTEM
REALLY AS A WAY TO COMBINE PAYMENT FOR MULTIPLE SERVICES.
IN 2008 THE OUTPATIENT PROSPECTIVE PAYMENT SYSTEM
FINAL RULE, MEDICARE DEFINES PACKAGES,
AND THEY DEFINE BUNDLING.
PACKAGING OCCURS WHEN REIMBURSEMENT
FOR MINOR ANCILLARY SERVICES ASSOCIATED
WITH A MORE SIGNIFICANT PROCEDURE
ARE COMBINED INTO A SINGLE PAYMENT.
BUNDLING, ON THE OTHER HAND,
OCCURS WHEN PAYMENT FOR MULTIPLE SIGNIFICANT PROCEDURES OR UNITS,
MULTIPLE UNITS OF THAT SAME PROCEDURE
RELATED TO AN OUTPATIENT ENCOUNTER,
OR AN EPISODE OF CARE IS COMBINED INTO A SINGLE PAYMENT.
BY USING THESE PACKAGING AND BUNDLING CONCEPTS,
C.M.S. PROVIDES INCENTIVES FOR FACILITIES TO TRY
AND IMPROVE EFFICIENCY BY AVOIDING
UNNECESSARY SERVICES SUPPLIES,
AND PHARMACEUTICALS, AND BY SUBSTITUTING LESS EXPENSIVE,
BUT EQUALLY EFFECTIVE OPTIONS.
FOR CALENDAR YEAR 2008,
PACKAGING OF ANCILLARY AND SUPPORTIVE SERVICES
WAS EXPANDED.
MEDICARE DID MOVE SEVERAL PROCEDURES INTO SEVEN CATEGORIES
TO PACKAGE OR CONDITIONALLY PACKAGE --
THOSE ARE GUIDANCE SERVICES,
IMAGE PROCESSING SERVICES,
INTRAOPERATIVE SERVICES,
IMAGING SUPERVISION AND INTERPRETATION,
DIAGNOSTIC, RADIOPHARMACEUTICALS,
CONTRAST MEDIA, AND ALSO OBSERVATION SERVICES.
OTHER SERVICES ARE NOT PACKAGED INTO THE A.P.C.
PAYMENT FOR THE SERVICE OR PROCEDURE THROUGH WHICH
THEY ARE ASSOCIATED.
ALTHOUGH, SOME SERVICES ARE PACKAGED, MANY OTHERS ARE NOT.
ANCILLARY SERVICES SUCH AS X-RAYS, M.R.I.S.
MINOR PROCEDURES SUCH AS INJECTIONS ARE NOT PACKAGED,
BUT ARE PAID SEPARATELY VIA A.P.C. GROUPS.
THIS ALLOWS FOR AN UNLIMITED NUMBER OF A.P.C.S
TO BE ASSIGNED PER ENCOUNTER.
IN THE OUTPATIENT SETTING,
TREATMENT PATHS REALLY VARY FROM PATIENT TO PATIENT
MAKING IT MUCH MORE DIFFICULT TO DETERMINE THE RESOURCES
THAT WILL BE CONSUMED FOR A PARTICULAR CLINICAL ISSUE.
SO CONSEQUENTLY, AVERAGE COST FOR A TYPICAL ENCOUNTER
REALLY COULD NOT BE ACCURATELY FORECASTED.
THEREFORE, A PARTIALLY PACKED SYSTEM PROVIDES
FOR MORE FLEXIBLE ADEQUATE REIMBURSEMENT,
AND ALLOWS THE TREATMENTS FLEXIBILITY
THAT REALLY IS NEEDED TO APPROPRIATELY CARE FOR PATIENTS,
IN AN OUTPATIENT SETTING.
IN 2008, C.M.S. DID ADD THE CONCEPT OF,
WHAT WE CALL COMPOSITE A.P.C.S
TO THE PROSPECTIVE PAYMENT SYSTEM
IN AN EFFORT TO MOVE TOWARD AN EPISODE
OF PAYMENT BASED PAYMENT SYSTEM.
THEIR CREATION OF COMPOSITE A.P.C.S ALLOWS
FOR MULTIPLE SERVICES THAT ARE TYPICALLY PERFORMED TOGETHER
TO BE REIMBURSED AS ONE A.P.C. RATHER THAN MULTIPLE A.P.C.S.
C.M.S. DID INTRODUCE FIVE COMPOSITE A.P.C.S IN 2008
THAT ARE LISTED ON THIS SLIDE.
WITH THE INCEPTION
OF THE OUTPATIENT PERSPECTIVE PAYMENT SYSTEM,
THE A.P.C. SYSTEM BUNDLED COST FOR OBSERVATION SERVICES
INTO AN A.P.C. PAYMENT FOR THE PROCEDURE OR THE VISIT,
IN WHICH THE OBSERVATION WAS ASSOCIATED.
HOWEVER, IN 2002 A REVISION ADDED A.P.C.
0339 IN ORDER TO PAY SEPARATELY FOR CERTAIN OBSERVATION SERVICES
THAT WERE ASSOCIATED WITH CLINIC VISITS, ER VISITS,
OR CRITICAL CARE SERVICES.
THREE CLINICAL CONDITIONS QUALIFIED AS AN OBSERVATION
SERVICE FOR A.P.C. 0339.
THESE WERE CHEST PAIN,
CONGESTIVE HEART FAILURE, AND ASTHMA.
TWO COMPOSITE A.P.C.S ARE PROVIDED
FOR OBSERVATION SERVICES.
LEVEL I EXTENDED ASSESSMENT AND MANAGEMENT COMPOSITE.
LEVEL II IS EXTENDED ASSESSMENT AND MANAGEMENT.
OBSERVATION SERVICES MUST BE PROVIDED
FOR AT LEAST EIGHT HOURS,
AND PROVIDED ON THE SAME DATE OF SERVICE
AS A HIGH LEVEL CLINIC VISIT.
SO THAT'S A 99205 OR 99215,
OR DIRECT ADMIT TO A FACILITY IN ORDER TO ACTIVATE,
WHAT WE CALL A LEVEL I COMPOSITE A.P.C., WHICH FALLS INTO 8002.
IN ADDITION, A SURGICAL PROCEDURE,
WHICH IS A PAYMENT STATUS INDICATOR OF T,
CANNOT BE PERFORMED ON THE SAME DAY
OR DAY BEFORE THE OBSERVATION SERVICE.
LEVEL II COMPOSITE A.P.C., WHICH IS 8003,
THAT CRITERIA'S REALLY SIMILAR TO LEVEL I.
OBSERVATION SERVICES MUST BE PROVIDED
FOR AT LEAST EIGHT HOURS,
AND PROVIDED, AGAIN, ON THE SAME DATE
AS A HIGH LEVEL ER VISIT OR A CRITICAL CARE SERVICE.
AND, IN ADDITION, A SURGICAL PROCEDURE
THAT HAS A PAYMENT STATUS INDICATOR OF T
CANNOT BE PERFORMED ON THE SAME DAY OR DAY BEFORE.
ALL OBSERVATION SERVICES THAT DO NOT MEET
THE COMPOSITE A.P.C. CRITERIA ARE THEN BUNDLED
AND DO NOT RECEIVE SEPARATE PAYMENTS.
PARTIAL HOSPITALIZATION,
THAT'S AN INTENSE OUTPATIENT PROGRAM
OF PSYCHIATRIC SERVICES THAT'S PROVIDED TO PATIENTS
WHO HAVE AN ACUTE MENTAL ILLNESS
AS AN ALTERNATIVE TO INPATIENT PSYCHIATRIC CARE.
PARTIAL HOSPITALIZATION MAY BE PROVIDED
BY HOSPITAL OUTPATIENT DEPARTMENTS,
AND ALSO BY MEDICARE CERTIFIED COMMUNITY MENTAL HEALTH CENTERS.
PATIENTS WHO DO RECEIVE PSYCHIATRIC SERVICES
AND HAVE A DIAGNOSIS OF AN ACUTE MENTAL HEALTH DISORDER
ARE GROUPED INTO A.P.C.S 0034,
MENTAL HEALTH SERVICES COMPOSITE.
THE UNIT OF SERVICE FOR A PARTIAL HOSPITALIZATION
IS ONE DAY.
THEREFORE, A.P.C. PAYMENT FOR A.P.C.
0034 IS BASED ON A PER DIME AMOUNT.
FOR CALENDAR YEAR 2012 THE A.P.C. PAYMENT RATE FOR THAT
IS $191.13, OF WHICH $38.23
IS THE BENEFICIARY COPAYMENT AMOUNT.
THIS SLIDE ALSO LISTS THE CALENDAR YEAR 2013 PAYMENT
AND COINSURANCE AMOUNT.
IN THE A.P.C. SYSTEM THERE ARE 10 TYPES OF A.P.C.S.
THE TYPE FOR ANY A.P.C. CAN BE IDENTIFIED
BY THE PAYMENT STATUS INDICATOR THAT'S ASSIGNED TO THE A.P.C.
AND THE PROCEDURES AND/OR SERVICES IN THAT GROUP.
ALL PROCEDURES OR SERVICES IN AN A.P.C.
HAVE THE SAME PAYMENT STATUS INDICATOR TYPE.
THE 10 TYPES ARE LISTED ON YOUR SCREEN.
EACH H.C.P.C.S. CODE IS ASSIGNED TO ONE AND ONLY ONE A.P.C.
THE A.P.C. ASSIGNMENT FOR A PROCEDURE
OR A SERVICE DOES NOT CHANGE
BASED ON A PATIENT'S MEDICAL CONDITION
OR THE SEVERITY OF THEIR ILLNESS.
THERE MAY BE AN UNLIMITED NUMBER OF A.P.C.S PER ENCOUNTER
FOR A SINGLE PATIENT, AS WE TALKED ABOUT EARLIER.
THE NUMBER OF A.P.C. ASSIGNMENTS
IS BASED ON THE NUMBER OF REIMBURSABLE PROCEDURES
THAT WERE PROVIDED FOR THAT PATIENT.
THE ONE EXCEPTION TO A.P.C. NOT CHANGING BASED ON SEVERITY
IS IF IT'S A PARTIAL HOSPITALIZATION.
EACH A.P.C. CONTAINS THE SAME COMPONENTS
THAT REALLY DRIVE THE A.P.C. ASSIGNMENT.
THIS IS TITLE, PAYMENT STATUS INDICATOR, RELATIVE WEIGHT,
AS WE'VE ALREADY DISCUSSED IN SOME EARLIER CHAPTERS.
A NATIONAL UNADJUSTED PAYMENT AMOUNT,
WHICH IS THE TOTAL AMOUNT THE FACILITY WILL RECEIVE.
THE NATIONAL UNADJUSTED COPAYMENT AMOUNT,
THAT'S THE PORTION OF PAYMENT
THAT'S THE BENEFICIARY'S RESPONSIBILITY,
AND THEN A CODE RANGE DRIVES A.P.C. ASSIGNMENT,
AND REMEMBER THOSE ARE BASED ON H.C.P.C.S. CODES.
THIS IS A SAMPLE OF A.P.C. 0609.
YOU CAN SEE THE H.C.PC.S. CODE THAT DID DRIVE THIS A.P.C.
THE PAYMENT STATUS INDICATOR IS V.
BOTH THE MEDICARE FACILITY COMPONENT
AND A BENEFICIARY COPAYMENT COMPONENTS
ARE ADJUSTED FOR DIFFERENCES IN WAGE INDEX.
THIS IS THE ONLY ADJUSTMENT MADE TO THE A.P.C. PAYMENT RATE
TO ACCOUNT FOR DIFFERENCES AMONG HOSPITALS.
60% OF THE FACILITY AMOUNT IS WAGE INDEXED ADJUSTED.
THE WAGE INDEX AMOUNT FOR THE FACILITY LOCATION
IS BASED ON CORE BASE STATISTICAL AREA,
AND IS DETERMINED
IN INPATIENT PROSPECTIVE PAYMENT SYSTEM UPDATE
FOR EACH FISCAL YEAR.
NEW TECHNOLOGY A.P.C.S WERE CREATED
TO ALLOW NEW PROCEDURES AND SERVICES TO ENTER
THE OUTPATIENT PROSPECTIVE PAYMENT SYSTEM QUICKLY,
EVEN THOUGH THEIR COMPLETE COST AND PAYMENT INFORMATION
IS NOT ALWAYS KNOWN.
NEW TECHNOLOGY A.P.C.S,
THEY REALLY HOUSE MODERN PROCEDURES AND SERVICES
UNTIL ENOUGH DATA IS COLLECTED TO PROPERLY PLACE
THE NEW PROCEDURE INTO AN EXISTING A.P.C.
OR TO CREATE A NEW A.P.C. ALL TOGETHER.
A NEW PROCEDURE OR SERVICE CAN REMAIN IN A TECHNOLOGY A.P.C.
FOR AN INDEFINITE AMOUNT OF TIME.
THE A.P.C. SYSTEM DOES CONTAIN 82 NEW TECHNOLOGY A.P.C.S.
41 OF THOSE HAVE A PAYMENT STATUS INDICATOR OF S,
AND ARE NOT SUBJECT TO THE MULTIPLE PROCEDURE DISCOUNT.
THE REMAINING 41 GROUPS HAVE AN INDICATOR OF T
AND ARE SUBJECT TO MULTIPLE PROCEDURE DISCOUNTS.
THIS IS A SAMPLING OF SOME OF THE NEW TECHNOLOGY A.P.C.S.
A.P.C. SYSTEM DOES USE PROVISIONS
TO PROVIDE ADDITIONAL PAYMENTS FOR HIGH COST ITEMS
OR UNUSUAL ADMISSIONS.
WHEN MULTIPLE SURGICAL PROCEDURES
WITH A PAYMENT STATUS INDICATOR OF T ARE DONE
AT THE SAME OPERATIVE SESSION, THEY ARE DISCOUNTED.
THE HIGHEST WEIGHTED PROCEDURE IS FULLY REIMBURSED
AND ALL OTHER PROCEDURES
WITH THAT PAYMENT STATUS INDICATOR OF T
ARE ONLY REIMBURSED AT 50%.
THIS REDUCTION IS MADE TO ACCOUNT
FOR A RESOURCE SAVINGS THE HOSPITALS EXPERIENCED
BY PERFORMING THOSE PROCEDURES TOGETHER.
THE HIGH COST OUTLIER PROVISION IS INTENDED TO PROVIDE
FINANCIAL ASSISTANCE FOR UNUSUALLY HIGH COST SERVICES.
THE EQUATIONS FOR CASE QUALIFICATION
IN ADDITIONAL PAYMENT LEVELS ARE ADJUSTED EACH YEAR.
MEDICARE LIMITS THE PERCENT OF TOTAL PAYMENTS
THAT CAN BE ATTRIBUTED TO AN OUTLIER PAYMENT TO 2%.
THE AFFORDABLE CARE ACT OF 2010 DOES PROVIDE FOR AN ADJUSTMENT
TO DEDICATED CANCER HOSPITALS TO ADDRESS THE HIGHER COST
THAT ARE INCURRED BY THIS TYPE OF FACILITY.
FOR 2012 THERE ARE 11 INPATIENT PROSPECTIVE PAYMENT SYSTEM
EXEMPT DESIGNATED CANCER HOSPITALS.
THE PARTICULAR ADJUSTMENT FACTOR USED IS FACILITY SPECIFIC.
MEDICARE WILL COMPARE EACH FACILITIES COST TO PAYMENT RATIO
OR P.C.R. WITH THE TARGET P.C.R. FOR ANY GIVEN YEAR.
ADDITIONAL PAYMENTS WILL BE PROVIDED TO THE FACILITY
SO THE FACILITIES P.C.R. WILL BE EQUAL TO WHAT THE TARGET IS.
THE TARGET P.C.R. IS THE WEIGHTED AVERAGE P.C.R.
FOR ALL OTHER HOSPITALS THAT FURNISH SERVICES
UNDER OUTPATIENT PROSPECTIVE PAYMENT SYSTEM,
AND THESE ARE NON CANCER HOSPITALS.
FOR 2012 THE P.C.R. IS 0.91.
PASS-THROUGH'S ARE EXCEPTIONS
TO THE MEDICARE PROSPECTIVE PAYMENT SYSTEM.
THESE EXIST FOR HIGH COST SERVICES.
PASS-THROUGHS ARE NOT INCLUDED IN THE PACKAGING COMPONENT,
AND ARE PASSED THROUGH TO OTHER PAYMENT MECHANISMS
IN ORDER TO ATTEMPT TO ADJUST FOR THE HIGH COST.
PASS-THOUGH PAYMENTS WERE ESTABLISHED
TO PROVIDE HOSPITALS WITH ADDITIONAL PAYMENT
FOR HIGH COST DRUGS OR DEVICES.
THESE ARE BROKEN INTO TWO A.P.C. GROUPS.
STATUS H IS DEVICES.
STATUS D IS DRUGS.
THE B.B.R.A. DID PROVIDE A MECHANISM FOR HOSPITALS
TO DECREASE THE FINANCIAL BURDEN FOR THE IMPLEMENTATION
OF THIS OUTPATIENT PROSPECTIVE PAYMENT SYSTEM.
THIS PHASED IN PER PERIOD
PROVIDED THE TRANSITIONAL QUARTER PAYMENTS.
THEY WERE PROVIDED BEGINNING IN THE YEAR 2000,
AND WERE DISCONTINUED DECEMBER 31 OF 2003.
HOLD HARMLESS PAYMENTS ARE PERMANENT
FOR INPATIENT PROSPECTIVE PAYMENT SYSTEM
EXEMPT CANCER CENTERS AND FOR CHILDREN'S HOSPITALS.
ELIGIBLE FACILITIES DO RECEIVE A QUARTERLY
HOLD HARMLESS PAYMENT THAT PROVIDES
ADDITIONAL REIMBURSEMENT.
WHEN THE PAYMENT RECEIVED
UNDER THE OUTPATIENT PROSPECTIVE PAYMENT SYSTEM IS LESS
THAN THE PAYMENT THE FACILITY WOULD'VE RECEIVED
FOR THE SAME SERVICE UNDER THE PRIOR
REASONABLE COST-BASED SYSTEM.
THE INTERIM PAYMENT IS BASED ON THE MOST RECENT DATA
FROM THE MEDICARE COST REPORT.
OUTPATIENT PROSPECTIVE PAYMENT SYSTEM,
PAYMENT IS DETERMINED USING A SEVEN STEP METHODOLOGY.
STEP ONE IS A.P.C. ASSIGNMENT.
HOSPITALS WILL SUBMIT A CLAIM TO MEDICARE FOR A PAYMENT.
CLAIMS ARE SENT ELECTRONICALLY.
EACH CLAIM WILL CONTAIN VISIT INFORMATION,
PATIENT FACILITY INFORMATION,
DETAIL CHARGES BY PROCEDURE CODE, AND DIAGNOSIS CODES.
STEP TWO IS WHEN A.P.C. PAYMENT RATE IS ESTABLISHED.
THE PAYMENT RATE IS CALCULATED BY MULTIPLYING
THE RELATIVE WEIGHT FOR THAT A.P.C.
BY THE CONVERSION FACTOR FOR THE CURRENT YEAR.
STEP THREE, THE WAGED INDEX IS ADJUSTED
TO NATIONAL UNADJUSTED FACILITY COMPONENT.
THE FACILITY COMPONENT OF THE A.P.C. PAYMENT RATE
IS WAGE INDEX ADJUSTED.
THE FORMULA IS LISTED HERE.
IN STEP FOUR, THE FEE SCHEDULE AMOUNTS ARE APPLIED.
H.C.P.C.S. CODES WITH A PAYMENT INDICATOR OF A ARE PAID
BASED ON A FEE SCHEDULE.
THE FEE SCHEDULE AMOUNTS FOR THESE PROCEDURES OR SERVICES
ARE APPLIED BY THE PRICE OR STOCK WARE.
STEP FIVE, WE HAVE REASONABLE COST AMOUNTS THAT ARE APPLIED.
H.C.P.C.S. CODES WITH AN INDICATOR OF F OR L
ARE REIMBURSED AT A REASONABLE COST LEVEL.
STEP SIX MEDICARE PAYMENTS ARE TOTALED.
ALL THE PAYMENTS, WHETHER IT'S A.P.C.,
FEE SCHEDULE, REASONABLE COST,
ARE ALL TOTALED AND SUMMED FOR THE CLAIM.
IN STEP SEVEN ANY OUTLIER ADD-ON PAYMENT ARE APPLIED.
THIS AMOUNT HAS BEEN ADDED TO THE TOTAL MEDICARE PAYMENTS.
THE A.P.C. SYSTEM IS VERY COMPLEX TO MANAGE.
AND COST ANALYSIS AND CONTAINMENT STILL REMAIN
AS THE MAJOR DRIVING FORCES BEHIND THE A.P.C. SYSTEM.