APC Update for CY2007
Sponsored By:
APCNow Web Site
www.APCNow.com
Presented By:
Duane C. Abbey, Ph.D., CFP
Abbey & Abbey, Consultants, Inc.
Duane@aaciweb.com
http://www.aaciweb.com
http://www.APCNow.com http://www.HIPAAMaster.com
Version 8.0 - Generic
Notes © 2000-2007, Abbey & Abbey, Consultants, Inc.
CPT® Codes – © 2006-2007 AMA
© 2000-2006 Abbey & Abbey, Consultants, Inc.
Slide # 1
Disclaimer
This workshop and other material provided are designed to provide accurate and
authoritative information. The authors, presenters and sponsors have made every
reasonable effort to ensure the accuracy of the information provided in this
workshop material. However, all appropriate sources should be verified for the
correct ICD-9-CM Codes, ICD-10-CM Diagnosis Codes, ICD-10-PCS Procedure
Codes, CPT/HCPCS Codes and Revenue Center Codes. The user is ultimately
responsible for correct coding and billing.
The author and presenters are not liable and make no guarantee or warranty;
either expressed or implied, that the information compiled or presented is errorfree. All users need to verify information with the Fiscal Intermediary, Carriers,
other third party payers, and the various directives and memorandums issued by
CMS, DOJ, OIG and associated state and federal governmental agencies. The
user assumes all risk and liability with the use and/or misuse of this information.
© 2000-2006 Abbey & Abbey, Consultants, Inc.
Slide # 2
Presentation Faculty
Duane C. Abbey, Ph.D., CFP – Dr. Abbey is a healthcare consultant and educator with
over 20 years of experience. He has worked with hospitals, clinics, physicians in
various specialties, home health agencies and other health care providers.
His primary work is with optimizing reimbursement under various Prospective Payment
Systems. He also works extensively with various compliance issues and performs
charge master reviews along with coding and billing audits.
Dr. Abbey is the President of Abbey & Abbey, Consultants, Inc. and the co-founder of
the HealthCare Consulting Group, L.C. These firms provide a wide range of
consulting services across the country including charge master reviews, APC
compliance reviews, in-service training, physician training, and coding and
billing reviews.
Dr. Abbey is the author of seven books on health care including:
“Non-Physician Providers: Guide to Coding,
Billing, and Reimbursement”
“Emergency Department: Coding, Billing and
Reimbursement”, and
“Chargemasters: Strategies to Ensure Accurate
Reimbursement and Compliance”.
© 2000-2006 Abbey & Abbey, Consultants, Inc.
Slide # 3
Final APCs For CY2007
Objectives
 To review the final Medicare APC payment system and changes for
CY2007 and beyond.
 To review various proposed APC weight changes and policy updates.
 To understand key issues within APCs and the proposed changes.
 To appreciate the need for hospitals to make suggestions and
comments to CMS.
 To review the various data files that CMS provides with APCs.
 To appreciate the proposed changes for technical component E/M
coding.
 To discuss the proposed technical component E/M guidelines.
 To discuss the different CMS proposals relative to supplies, drugs and
devices.
 To review proposed changes for ASCs relative to APCs.
© 2000-2006 Abbey & Abbey, Consultants, Inc.
Slide # 4
Final APCS For CY2007
Acronyms, Abbreviations & Terminology
 ACEP – American College of Emergency Physicians
 AHA – American Hospital Association
 AHIMA – American Health Information Management Association
 ASC – Ambulatory Surgical Center
 ASP – Average Sales Price (See also, AWP – Average Wholesale Price)
 CCR – Cost-to-Charge Ratio
 E/M – Evaluation and Management
 FFS – Fee-for-Service
 HCRIS – Hospital Cost Report Information System
 MAC – Medicare Administrative Contractor
© 2000-2006 Abbey & Abbey, Consultants, Inc.
Slide # 5
Final APCS For CY2007
Acronyms, Abbreviations & Terminology
 MSA – Metropolitan Statistical Area
 NCCI – National Correct Coding Initiative
 NCD – National Coverage Determination (See also LCD – Local
Coverage Decision and then also ABNs – Advance Beneficiary Notices)
 OCE – Outpatient Code Editor
 QIO – Quality Improvement Organization (See previously PRO)
 SI – Status Indicator
 TOPS – Transitional Outpatient Payments
 CY – Calendar Year; FY – Fiscal Year (Note potential difference between
State FY and Federal FY)
© 2000-2006 Abbey & Abbey, Consultants, Inc.
Slide # 6
Final APCS For CY2007
Acronyms, Abbreviations & Terminology
 Legislation
 SSA – Social Security Act
 TEFRA – Tax Equity and Fiscal Responsibility Act - 1982
 COBRA – Consolidated Omnibus Reconciliation Act - 1985
 BBRA – Balanced Budget Refinement Act – 1999
 BIPA – Benefits Improvement and Protection Act – 2000
 HIPAA – Health Insurance Portability and Accountability Act – 1996
 MMA – Medicare Modernization Act – 2003
 DRA – Deficit Reduction Act - 2005
• Note: See the FR entry for a very long list of acronyms!
© 2000-2006 Abbey & Abbey, Consultants, Inc.
Slide # 7
Final APCS For CY2007
Overview
 Final CY2007 APC Update - November 24, 2006 Federal Register
 Massive FR Entry 441 Pages – Many Topics – Some Beyond APCs
• Less than the mandated 60-day notice period.
 Contains More Than Just the APC Update for CY2007
• Revisions to the HOPPS (Hospital Outpatient Prospective Payment System)
for CY2007 including changes mandated by MMA 2003 and DRA 2005.
• Future CY2009 required reporting on quality measure for hospital outpatient
services paid under the prospective payment system.
• Revisions to the ASC procedure listing.
• Revisions to the MSE (Medical Screening Examination) requirements for
CAHs (Critical Access Hospitals).
• Restructuring of the carriers and fiscal intermediaries into MACs or Medical
Administrative Contractors.
• DRA mandated expansion of the starter set of 10 quality measure that were
used in CY2005 and CY2006 for the IPPS (Inpatient Prospective Payment
System) Reporting Hospital Quality Data for the Annual Payment Update
(RHQDAPU).
© 2000-2006 Abbey & Abbey, Consultants, Inc.
Slide # 8
Final APCS For CY2007
Overview
 Final CY2007 APC Update - November 24, 2006 Federal Register
 Significant Range of Topics and Decisions Are Discussed By CMS
 Ability to Pick and Choose Topics That Affect Particular Circumstances
 Be Brave and Read Selected Portions of the FR Entry!
 APCs  Basic FAQs
 What are APCs?
 When did they start?
 What services do APCs cover?
 What coding systems are used?
 What does the APC grouper do?
 Do other third-party payers use APCs?
© 2000-2006 Abbey & Abbey, Consultants, Inc.
Slide # 9
Final APCS For CY2007
Overview
 APC Features
 Encounter Driven System
• Each encounter is separate even if on same date of service.
• There is no global surgical package (GSP) as with physician
services.
 E/M Services Paid Separately  Need “-25” Modifier
 CCI Edits – Approximately 200,000  See “-59” Modifier
 Inpatient-Only Surgical List  What if performed outpatient?
 Observation  Only three conditions for which payment is made.
 CPT/HCPCS Code Driven  “No code, no payment.”
 Cost-Outlier Formula  Double Threshold Criteria
 APC Service Mix Index (SMI)  See DRG CMI
© 2000-2006 Abbey & Abbey, Consultants, Inc.
Slide # 10
Final APCS For CY2007
Issues – CMS Discussion/Decisions
 APC Relative Weights
 Process being used to statistically calculate the APC weights is not
being significantly changed.
 Singleton Claim Concept  CMS is trying to find ways to get around
the singleton claim limitation.
• Bypass Indicator Process
• Example – CPT=92002 – Eye Examination, New Patient
 APC weight (and thus payment) variations over time continue to be
significant.
• See small sampling on next slide.
• How can we accurately project the impact of APC updates??
© 2000-2006 Abbey & Abbey, Consultants, Inc.
Slide # 11
Final APCS For CY2007
Issues – CMS Discussion/Decisions
 Comparing APC Weights Over Times
APC
Description
0010
Level I Destruction of Lesion
0025
CY2007
CY2006
CY2004
CY2002
$29.26
$35.25
$35.56
$33.60
Level II Skin Repair
$323.28
$315.71
$283.24
$173.58
0043
Closed Treatment Fracture FTT
$103.62
$102.36
$104.07
$207.18
0073
Level III Endoscopy Upper Airway
$236.42
$250.96
$188.46
$168.49
0110
Transfusion
$212.58
$216.73
$200.34
$271.83
0147
Level II Sigmoidoscopy/Anoscopy
$525.41
$474.02
$419.07
$292.19
0206
Level II Nerve Injections
$351.92
$321.42
$288.49
$184.27
 Conversion Factor Update
 Long complicated calculation – CY2007  $61.468; CY2006  $59.511
© 2000-2006 Abbey & Abbey, Consultants, Inc.
Slide # 12
Final APCS For CY2007
Issues – CMS Discussion/Decisions
 Hospital Specific CCR – Cost-to-Charge Ratios
 See PM A-03-04 & Cost Reporting Process
 CMS is making technical adjustments.
 There should be a new transmittal issued shortly.
 Note that CCRs and the cost reporting process have been instrumental
with problems such as blood and blood products. While this is a
technical area, hospitals are encouraged to make certain that the cost
reporting process is being handled appropriately.
 Statewide Average Default CCRs
 CMS uses these default CCRs if, for some reason, a hospital does not
have an established CCR.
 Take a quick look at the table for you state; it can be interesting!
• Iowa-Rural – 0.4038 in CY2006 down to 0.3489 in CY2007 – What
does this mean??
© 2000-2006 Abbey & Abbey, Consultants, Inc.
Slide # 13
Final APCS For CY2007
Issues – CMS Discussion/Decisions
 Outlier Payments
 Current Dual Threshold
• Cost greater than 1.75 times APC payment AND $1,250.00
 New Dual Threshold
• Cost greater than 1.75 times APC payment AND $1,850.00
 What impact will this have? Will smaller hospitals see cost outliers?
 Packaged Revenue Codes
 This listing hasn’t really changed much over the years.
 Anesthesia, Recover and the like are on the list.
 Strangely, the following Revenue Codes are on the list
• 390/399 – Blood Processing & 700/709 – Cast Room
© 2000-2006 Abbey & Abbey, Consultants, Inc.
Slide # 14
Final APCS For CY2007
Issues – CMS Discussion/Decisions
 “Special Packaged Code List
 CMS is now starting to recognize certain codes that would generally be
packaged, but these services are sometimes the ONLY service reported on the
claim. Thus, there should be payment made. See new Status Indicator “Q”.
CPT
Descriptor
APC
Payment
36540
Collect Blood, venous access device
0624
$12.29
36600
Arterial puncture; withdrawal of blood for diagnosis
0035
$12.29
38792
Sentinel node identification
0389
$84.54
75893
Venous sampling through catheter, with or without angiography,
radiological S&I
0668
$383.95
94762
Noninvasive ear or pulse oximetry overnight monitoring
0443
$63.98
96523
Irrigation of implanted venous access device
0624
$31.63
 Check for Chargemaster changes – May be using 99211
© 2000-2006 Abbey & Abbey, Consultants, Inc.
Slide # 15
Final APCS For CY2007
Issues – CMS Discussion/Decisions
 OPPS: Beneficiary Copayments
 In theory, the coinsurance amount should be 20% just as with RBRVS.
 However, CMS continues to be very slow in moving the co-payments
down to this level. There appears to be little action in this area.
 Example: CPT=20245, Bone Biopsy, APC payment is $1,233.39,
Unadjusted Co-payment is $354.45, Adjusted Co-payment is $246.68
(i.e., 20%)
 OPPS: 2 Times Rule
 The 2-Times Rule is a statistical variation indicator.
 If an APC is on this list, then there are problems with the range of
associated cost data and then also a problem with the payment.
 This list is slowing shrinking. However, there are several APC
categories that have been on the list for multiple years.
© 2000-2006 Abbey & Abbey, Consultants, Inc.
Slide # 16
Final APCS For CY2007
Issues – CMS Discussion/Decisions
 2-Times Rule Violations
© 2000-2006 Abbey & Abbey, Consultants, Inc.
Slide # 17
Final APCS For CY2007
Issues – CMS Discussion/Decisions
 2-Time Rule Violations
© 2000-2006 Abbey & Abbey, Consultants, Inc.
Slide # 18
Final APCS For CY2007
Issues – CMS Discussion/Decisions
 Coding/Grouping Policy Decisions
 There are many specific coding assignments and then grouping
policies discussed in the CY2007 update FR. For Example:
 Breast Brachytherapy Catheter Placement – Device Dependent
• CPT=19296 – Placement of Radiotherapy Afterloading Balloon
catheter into the Breast for Interstitial Radioelement Application
Following Partial Mastectomy, Includes Imaging Guidance; On Date
Separate From Partial Mastectomy
• CPT=19297 - Placement of Radiotherapy Afterloading Balloon
catheter into the Breast for Interstitial Radioelement Application
Following Partial Mastectomy, Includes Imaging Guidance;
Concurrent With Partial Mastectomy
• Both map into APC=0648, $3,148.42, BUT Status Indicator=“T”
 Keeping mind that there is an expensive catheter, do you see a
problem?
© 2000-2006 Abbey & Abbey, Consultants, Inc.
Slide # 19
Final APCS For CY2007
Issues – CMS Discussion/Decisions
 Treatment of Fracture/Dislocation
 “The APC Panel recommended that CMS continue to evaluate the
refinement of APC 0046 (Open/Percutaneous Treatment Fracture or
Dislocation) into at least three APC levels, with consideration of a
fourth level should data support this additional level. We are accepting
the APC Panel’s recommendation and are proposing for CY 2007 to
split APC 0046 into three new APCs: APC 0062 (Level I Treatment
Fracture/ Dislocation); APC 0063 (Level II Treatment
Fracture/Dislocation); and APC 0064 (Level III Treatment
Fracture/Dislocation).”
• What about closed treatment of fractures???
© 2000-2006 Abbey & Abbey, Consultants, Inc.
Slide # 20
Final APCS For CY2007
Issues – CMS Discussion/Decisions
 Medication Therapy Management Services
 CMS discusses this issue from the perspective of some new Category
III CPT codes  0115T, 0116T, and 0117T. These codes are all Status
Indicator “B”.
 CMS does address medication management services:
• “To clarify our billing requirements, if the only service provided to a
patient is a laboratory test to determine medication levels, the
laboratory test is all that should be billed. If a hospital provides a
distinct, separately identifiable service in addition to the test, the
hospital is responsible for billing the HCPCS code that most closely
describes the service provided. Billing a visit code in addition to
another service merely because the patient interacted with hospital
staff or spent time in a room for that service is inappropriate. A
hospital may bill a visit code, based on the hospital’s own coding
guidelines which must reasonably relate the intensity of hospital
resources to the different levels of HCPCS codes. Services
furnished must be medically necessary and documented.” (71 FR
68063)
© 2000-2006 Abbey & Abbey, Consultants, Inc.
Slide # 21
Final APCS For CY2007
Issues – CMS Discussion/Decisions
 Multiple Imaging Services Discounting
 CMS has decided not to implement the multiple imaging discount
process for the families of images services.
 This is somewhat surprising since this discounting has been fully
implemented for other sites of service.
 Skin Substitute and Skin Replacement Procedures
 Whole new series of codes in CPT for CY2006.
 There is a discussion concerning assignment to APCs 0024 and 0025
for CY2006 and now almost exclusively APC 0025 for CY2007.
• SI=“T” – Payment = $323.28
© 2000-2006 Abbey & Abbey, Consultants, Inc.
Slide # 22
Final APCS For CY2007
Issues – CMS Discussion/Decisions
 Device-Dependent APCs  C-Code Reporting Requirements
© 2000-2006 Abbey & Abbey, Consultants, Inc.
Slide # 23
Final APCS For CY2007
Issues – CMS Discussion/Decisions
 Device-Dependent APCs
 “Charge-Compression” Concerns for device pricing
• Several commenters objected to the proposed payment rates on the
basis that hospitals report the units and charges for devices
incorrectly, leading to incomplete and inaccurate claims data. They
also believed that the CMS methodology of applying CCRs to
charges for device intensive services results in median costs that
do not reflect the true relative costs of those services. They
believed that hospitals do not mark up their charges for high cost
items sufficiently to result in the actual cost of the item, a
phenomenon generally known as “charge compression.” The
commenters stated that hospitals are inhibited by market and other
forces from charging at a level necessary for the application of the
CCR to result in an accurate estimate of the cost of the device.
Some commenters offered specific statistical strategies for
calculation of adjustment factors that could be applied to the
charges for devices to overcome the effects of charge
compression. (71 FR 68066)
© 2000-2006 Abbey & Abbey, Consultants, Inc.
Slide # 24
Final APCS For CY2007
Issues – CMS Discussion/Decisions
 Device-Dependent APCs
 Question: How do you price your expensive items?
• Should at least take the “cost” and divide by the applicable CCR.
• Cost=$4,000.00, CCR=0.40  Charge = $10,000.00
 Statistical Analysis Glitches
• “Token Charges” for items that were provided free of charge by the
manufacturer.
• See the “-FB” modifier directives on next slide.
• What about upgraded replacements in which there was a “residual”
charge?
• Does CMS have sufficient numbers of claims (and thus charges
converted into costs) in order to calculate the costs of devices.
© 2000-2006 Abbey & Abbey, Consultants, Inc.
Slide # 25
Final APCS For CY2007
Issues – CMS Discussion/Decisions
 Device-Dependent APCs – “-FB” Modifier (71 FR 68076)
 Effective January 1, 2007, the definition of the FB modifier will read:
“Item Provided Without Cost to Provider, Supplier, or Practitioner or
credit received for replaced device (Examples, but not limited to:
covered under warranty, replaced due to defect, free sample).”
Hospitals will be instructed to append the modifier to the HCPCS code
for the procedure in which the device was inserted on claims when the
device that was replaced under warranty, recall or field action is one of
the devices in Table 21 below. Claims containing the FB modifier will
not be accepted unless the modifier is on a procedure code with status
indicator “S,” “T,” “V” or “X.” In cases in which the device being
replaced is replaced without cost, the provider will report a token
device charge. In cases in which the device being inserted is an
upgrade (either of the same type of device or to a different type of
device), the provider will report as the device charge the difference
between its usual charge for the device being replaced and the credit
for the replacement device. CMS will be able to identify whether the
device was replaced without cost by the presence of the token charge.
© 2000-2006 Abbey & Abbey, Consultants, Inc.
Slide # 26
Final APCS For CY2007
Issues – CMS Discussion/Decisions
 Device-Dependent APCs – “-FG” Modifier
 Sample C-Codes from Table 21
© 2000-2006 Abbey & Abbey, Consultants, Inc.
Slide # 27
Final APCS For CY2007
Issues – CMS Discussion/Decisions
 Device-Dependent APCs – Adjustment to APC Payments
 What happens if:
• You are inserting a device,
• The payment for the device is embedded in the APC payment, and
• You received the device free of charge?
 Obviously, the APC payment must be reduced. The percentage
reduction, by APC is listed in Table 20.
• For example, APC=0681, Knee Arthroplasty 73.37% Offset
 How will the FI know that the offset should be applied.
• By use of the “-FB” modifier on a CPT code, but only a CPT code
associated with a code on Table 21.
© 2000-2006 Abbey & Abbey, Consultants, Inc.
Slide # 28
Final APCS For CY2007
Issues – CMS Discussion/Decisions
 Device-Dependent APCs – Payment Calculations
© 2000-2006 Abbey & Abbey, Consultants, Inc.
Slide # 29
Final APCS For CY2007
Issues – CMS Discussion/Decisions
 Pass-Through Drugs/Biologics
© 2000-2006 Abbey & Abbey, Consultants, Inc.
Slide # 30
Final APCS For CY2007
Issues – CMS Discussion/Decisions
 Pass-Through Drugs/Biologics
© 2000-2006 Abbey & Abbey, Consultants, Inc.
Slide # 31
Final APCS For CY2007
Issues – CMS Discussion/Decisions
 OPPS: Brachytherapy
 CY2007 – APC=0651-$1,035.50 (SI=S); APC=0163-$2,146.84 (SI=T)
 Difficulty Establishing Pricing – Singleton Claims Problem
© 2000-2006 Abbey & Abbey, Consultants, Inc.
Slide # 32
Final APCS For CY2007
Issues – CMS Discussion/Decisions
 Brachytherapy Sources - Payment
 Congress requires CMS to pay for brachytherapy sources on a passthrough basis
• However, CMS is not providing payment on a source-by-source
basis. An averaging process by C-code is used.
• “As indicated in the CY 2007 OPPS proposed rule (71 FR 49597), we
believed there were a number of advantages to this proposed
payment method. The OPPS is a prospective payment system under
which payment rates are generally established based on median
costs from historical hospital claims. Under our proposal,
brachytherapy sources would be paid using the same basic median
cost methodology as the overall OPPS.” (71 FR 68104)
• How can this affect any given hospital?
© 2000-2006 Abbey & Abbey, Consultants, Inc.
Slide # 33
Final APCS For CY2007
Issues – CMS Discussion/Decisions
 Brachytherapy Sources - Payment
© 2000-2006 Abbey & Abbey, Consultants, Inc.
Slide # 34
Final APCS For CY2007
Issues – CMS Discussion/Decisions
 OPPS: Drug Administration
 In a very surprising move, CMS has decided to adopt the full range of
injection, infusion and chemotherapy codes as developed by the AMA
and implemented in CPT in CY2006.
 The following C-Codes will be discontinued.
© 2000-2006 Abbey & Abbey, Consultants, Inc.
Slide # 35
Final APCS For CY2007
Issues – CMS Discussion/Decisions
 OPPS: Drug Administration – Drug Code APC Groupings
© 2000-2006 Abbey & Abbey, Consultants, Inc.
Slide # 36
Final APCS For CY2007
Issues – CMS Discussion/Decisions
 OPPS: Drug Administration – Drug Code APC Groupings
 APC=0436 - $11.12
 APC=0438 - $48.42
 APC=0440 - $111.20
© 2000-2006 Abbey & Abbey, Consultants, Inc.
APC=0437 - $24.25
APC=0439 - $97.41
APC=0441 - $152.57
Slide # 37
Final APCS For CY2007
Issues – CMS Discussion/Decisions
 OPPS: Drug Administration
 Exercise: An elderly patient presents to the Apex Medical Center’s ED
suffering from dehydration and influenza type symptoms including
fever, cough, congestion. The patient is examined and placed in
observation overnight. An IV is provided for hydration for five hours.
Two IV injections of antibiotics are provided. Additionally, there is an
IM injection provided.
• Discuss the coding and APC payments. You may also modify this
exercise to discuss other possible sequences of services.
© 2000-2006 Abbey & Abbey, Consultants, Inc.
Slide # 38
Final APCS For CY2007
Issues – CMS Discussion/Decisions
 Inpatient-Only Procedures
 Inpatient-Only list is still very much alive and healthy.
 CMS continues to demand that there be such a list. Why?
 Need some mechanism to at least obtain a default, blanket payment
when inpatient-only procedure is inadvertently performed on an
outpatient basis.
• See also the special “-CA” modifier when an inpatient-only
procedure results from the ED and the patient dies.
© 2000-2006 Abbey & Abbey, Consultants, Inc.
Slide # 39
Final APCS For CY2007
Issues – CMS Discussion/Decisions
 Blood and Blood Products
© 2000-2006 Abbey & Abbey, Consultants, Inc.
Slide # 40
Final APCS For CY2007
Issues – CMS Discussion/Decisions
 Blood and Blood Products
© 2000-2006 Abbey & Abbey, Consultants, Inc.
Slide # 41
Final APCS For CY2007
Issues – CMS Discussion/Decisions
 Observation Services
 There is a special Observation Subcommittee, but these does not
appear to be any recommendations for expanding coverage of
separately payable observation services.
 See Status Indicator “T” Situation – Some movement here is possible.
 Miscellaneous Changes
 LOCMs/HOCMs
 Skin Replacement Surgery and Skin Substitutes – New Codes
 EP Recording/Mapping
 CORFs
 AAA Screening
 Emergency Medical Screening in Critical Access Hospitals
 Payment Status and Comment Indicators
© 2000-2006 Abbey & Abbey, Consultants, Inc.
Slide # 42
Final APCS For CY2007
Technical Component E/M Coding
 CMS Has Made Several Decisions for Technical E/M Coding
 CMS is moving payment for E/M codes to five different levels.
 Generally, CMS didn’t move to the new series of G-Codes.
 Critical Care
• 99291  Still Payable
• 99292  Status Indicator “N”
 ED Payments Are For Type A Emergency Departments
• Open 24/7/265
• Type B EDs  Five Levels
 G0380, G0381, G0382, G0383, G0384
 Same payment levels as with clinic visits (APC 0604-0608)
© 2000-2006 Abbey & Abbey, Consultants, Inc.
Slide # 43
Final APCS For CY2007
Technical Component E/M Coding
 Five Level APC Payments
© 2000-2006 Abbey & Abbey, Consultants, Inc.
Slide # 44
Final APCS For CY2007
Technical Component E/M Coding
 Five Level APC Payments
© 2000-2006 Abbey & Abbey, Consultants, Inc.
Slide # 45
Final APCS For CY2007
Technical Component E/M Coding
 Five Level APC Payments
 APC=0604  Clinic Visit Level I -
$ 50.66
SI=V
 APC=0605  Clinic Visit Level II - $ 60.48
SI=V
 APC=0606  Clinic Visit Level III - $ 83.88
SI=V
 APC=0607  Clinic Visit Level IV - $ 105.09
SI=V
 APC=0608  Clinic Visit Level V - $ 133.96
SI=V
 APC=0609  ED Visit Level I -
$ 50.01
SI=V
 APC=0613  ED Visit Level II -
$ 82.96
SI=V
 APC=0614  ED Visit Level III -
$ 130.00
SI=V
 APC=0615  ED Visit Level IV -
$ 209.99
SI=V
 APC=0616  ED Visit Level V -
$ 325.26
SI=V
 APC=0617  Critical Care -
$ 405.04
SI=S
© 2000-2006 Abbey & Abbey, Consultants, Inc.
Slide # 46
Final APCS For CY2007
Technical Component E/M Coding
 ED Financial Impact Analysis
 For the first six months of CY2006, the Apex Medical Center had the
following distribution and frequency of E/M codes for Medicare
outpatients:
• 99281  432
• 99282  1,960
• 99238  2,391
• 99284  478
• 99285  98
 Discuss how you would analyze the financial impact of the changes in
the E/M code assignments and associated payments.
© 2000-2006 Abbey & Abbey, Consultants, Inc.
Slide # 47
Final APCS For CY2007
Technical Component E/M Coding
 E/M Odds & Ends
 Definition of New Patient
• CMS indicated in the April 7, 2000 Federal Register that an
established patient for outpatient purposes was one that had a
medical record number. This is quite different from the CPT
definition for ‘new’ versus ‘established’. (65 FR 18451)
• In another incidental comment, CMS has refined this definition:
 “If the patient has a hospital medical record that was created
within the past 3 years, that patient is considered an
established patient to the hospital.” (71 FR 68128)
© 2000-2006 Abbey & Abbey, Consultants, Inc.
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Final APCS For CY2007
Technical Component E/M Coding Guidelines
 Technical Component E/M Coding Documentation Guidelines
 Currently – Hospitals determine their own mapping of resources
utilized into the various CPT E/M levels.
 Common Approaches
• Point System  Various Systems
• Narrative System  See ACEP ED Model
• Hybrid Systems  See AHA/AHIMA Model
 CMS Discussion of Various Approaches
 Proposed CMS Documentation Guidelines
• For clinics, there is a need to address significant variability since
there are many different types of specialty clinics.
© 2000-2006 Abbey & Abbey, Consultants, Inc.
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Final APCS For CY2007
Technical Component E/M Coding Guidelines
 Technical Component E/M Levels – ED Level 1
© 2000-2006 Abbey & Abbey, Consultants, Inc.
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Final APCS For CY2007
Technical Component E/M Coding Guidelines
 Technical Component E/M Levels – ED Level 1 Continued + Level 2
© 2000-2006 Abbey & Abbey, Consultants, Inc.
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Final APCS For CY2007
Technical Component E/M Coding Guidelines
 Technical Component E/M Levels – ED Level 3
© 2000-2006 Abbey & Abbey, Consultants, Inc.
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Final APCS For CY2007
Technical Component E/M Coding Guidelines
 Technical Component E/M Levels – ED Level 3 Continued
© 2000-2006 Abbey & Abbey, Consultants, Inc.
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Final APCS For CY2007
Technical Component E/M Coding Guidelines
 Technical Component E/M Levels – ED Level 4 and 5
© 2000-2006 Abbey & Abbey, Consultants, Inc.
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Final APCS For CY2007
Technical Component E/M Coding Guidelines
 Technical Component E/M Levels – ED Level 5 Continued
© 2000-2006 Abbey & Abbey, Consultants, Inc.
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Final APCS For CY2007
Technical Component E/M Coding Guidelines
 Technical Component E/M Levels – ED Contributory
© 2000-2006 Abbey & Abbey, Consultants, Inc.
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Final APCS For CY2007
Technical Component E/M Coding Guidelines
 Technical Component E/M Levels – Level 1 Clinic
© 2000-2006 Abbey & Abbey, Consultants, Inc.
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Final APCS For CY2007
Technical Component E/M Coding Guidelines
 Technical Component E/M Levels – Level 2 and 3 Clinic
© 2000-2006 Abbey & Abbey, Consultants, Inc.
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Final APCS For CY2007
Technical Component E/M Coding Guidelines
 Technical Component E/M Levels – Level 3 Clinic Continued + Level 4
© 2000-2006 Abbey & Abbey, Consultants, Inc.
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Final APCS For CY2007
Technical Component E/M Coding Guidelines
 Technical Component E/M Levels – Level 5 Clinic
© 2000-2006 Abbey & Abbey, Consultants, Inc.
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Final APCS For CY2007
Technical Component E/M Coding Guidelines
 Technical Component E/M Levels – Level 5 Clinic Continued
© 2000-2006 Abbey & Abbey, Consultants, Inc.
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Final APCS For CY2007
Technical Component E/M Coding Guidelines
 Technical Component E/M Levels – Clinic Contributory
© 2000-2006 Abbey & Abbey, Consultants, Inc.
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Final APCS For CY2007
Technical Component E/M Coding Guidelines
© 2000-2006 Abbey & Abbey, Consultants, Inc.
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Final APCS For CY2007
Movement of ASCs to APCs
 CMS ASC (Ambulatory Surgery Center) Services (42 CFR §416.65(a))
 ASC procedures are those surgical and other medial procedures that
are—
• Commonly performed on an inpatient basis but may be safely
performed in an ASC;
• Not of a type that are commonly performed or that may be safely
performed in physicians offices;
• Limited to procedures requiring a dedicated operating room or suite
and generally requiring a post-operative recovery room or shortterm (not overnight) convalescent room; and
• Not otherwise excluded from Medicare coverage.
• Specific standards in § 416.65(b) limit covered ASC procedures to
those that do not generally exceed 90 minutes operating time and a
total of 4 hours recovery or convalescent time. If anesthesia is
required, the anesthesia must be local or regional anesthesia, or
general anesthesia of not more than 90 minutes duration.
© 2000-2006 Abbey & Abbey, Consultants, Inc.
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Final APCS For CY2007
Movement of ASCs to APCs
 Ambulatory Surgery Centers (ASCs)
 ASC Payment System  Codes map to one of nine categories
• Group 1 Procedure $333
• Group 2 Procedure $446
• Group 3 Procedure $510
• Group 4 Procedure $630
• Group 5 Procedure $717
• Group 6 Procedure $826 ($676+ $150 for IOL) - CPT=66985, 66986
• Group 7 Procedure $995
• Group 8 Procedure $973 ($823+ $150 for IOL) - CPT=66982, 66983,
66984
• Group 9 Procedure $1339
© 2000-2006 Abbey & Abbey, Consultants, Inc.
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Final APCS For CY2007
Movement of ASCs to APCs
 Ambulatory Surgery Centers (ASCs)
 Only surgical procedures on the ASC list can be performed in an ASC
and/or be paid under the ASC categories.
• Lower level procedures can be performed, but are paid through
RBRVS just as if they were performed in a physician’s office.
• Higher level procedures (e.g., requiring an overnight stay) must be
performed in a hospital setting.
 Note: These are CMS rules. Other third-party payers may
differ.
 ASC payment rates have not been changed for two years.
 ASCs file claims on the CMS-1500 claim form.
 There is discounting at 50% for multiple procedures
 ASC Administrative Issues and Coverage Issues
© 2000-2006 Abbey & Abbey, Consultants, Inc.
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Final APCS For CY2007
Movement of ASCs to APCs
 Ambulatory Surgery Centers (ASCs)
 Relationship of ASC Payments to APC Payments
• ASCs were to have gone to APCs prior to hospital implementation.
• Today there is great disparity between ASC payment and APC
payment for the same procedure.
 ASC versus APC Payment Difference
• CPT=11624, Removal Malignant Skin Lesion 3.1-4.0 cm.
• Maps to Group 2 for ASC – Payment = $ 446.00
• Under APCs maps to APC=0021 – Payment $ 892.57
• APCs pays more than twice what is paid in an ASC
 This is what has fueled physician owned ASCs moving to
become Specialty Hospitals.
© 2000-2006 Abbey & Abbey, Consultants, Inc.
Slide # 67
Final APCS For CY2007
Movement of ASCs to APCs
 Ambulatory Surgery Centers (ASCs)
 CMS is proposing to revamp the ASC payment methodology –
• “After carefully reviewing the advantages and disadvantages of
each of these approaches, we are proposing, within the parameters
of section 626 of Pub. L. 108-173, to use the APC groups and the
relative payment weights for surgical procedures established under
the OPPS as the basis of the payment groups and the relative
payment weights for surgical procedures performed at ASCs. These
payment weights would be multiplied by an ASC conversion factor
in order to calculate the ASC payment rates. Several factors
persuaded us to advance this proposal over the other approaches
that we considered.”
• The ‘multiplier’ would be determined through relative cost
determination. A typical multiplier might be 0.85 or ASCs would
receive 85% of what hospitals would receive under APCs.
 Standby! Things will change in CY2008!
© 2000-2006 Abbey & Abbey, Consultants, Inc.
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Final APCS For CY2007
CMS Data Files
 Be Certain To Download The Extra Files That CMS Provides
 Addendum A  Listing of APCs (Excel Format)
 Addendum B  Mapping of CPT/HCPCS to APCs (Excel Format)
 Addendum C  Mapping of APCs to CPT/HCPCS (Excel Format)
 Addendum D  Status Indicators/Comment Indicators
 Addendum E  Inpatient-Only Procedures
 Addendum L  Out-Migration Wage Adjustments
 Other Tables and Information  MS Word, MS Excel, Adobe Acrobat
© 2000-2006 Abbey & Abbey, Consultants, Inc.
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Final APCS For CY2007
Additional Items In The FR Entry
 Medicare Contracting Reform
 Significant changes have been made by Congress.
 Movement toward region MACs – Medicare Administrative Contractors
 How will this affect hospitals?
 Will the MACs be able to correlate physician and hospital claims?
 CAHs  MSE Requirements Under EMTALA
 Quality Measures for IPPS
© 2000-2006 Abbey & Abbey, Consultants, Inc.
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Final APCS For CY2007
Summary and Conclusion
 November 24, 2006  Massive Federal Register that covered more than
just APCs
 Normal, Evolutionary Changes  APC Weights, APC Categories and
Payments, Policy Decisions
 Infusions and Injections  Going to regular CPT codes
 “Special” Packaged Codes
 Device Dependent APCs and the “-FB” Modifier
 E/M Levels  ED and Clinic  Five Levels!
 Trauma Team Activation To Be Paid Separately
 E/M Technical Component Documentation Guidelines
 ASCs Going to APCs
 Medicare Administrative Contractors
© 2000-2006 Abbey & Abbey, Consultants, Inc.
Slide # 71