EDs would benefit from new outpatient payment system
October 1, 2002 3 minutes read
EDs could claim more using new relative weights
Attention emergency department (ED) managers: There may finally be some good news on the reimbursement front.
Marty Karpiel, MPA, ambulatory care consultant for the Karpiel Consulting Group in Long Beach, CA, which specializes in operational and financial process improvement for EDs, points to the proposed rule from the Baltimore-based Centers for Medicare and Medicaid Services (CMS) for the Outpatient Prospective Payment System (OPPS).
Karpiel says that overall, hospitals would receive over $500 million more in 2003 than this year, because of a overall 3.5% pay increase for outpatient services. Payments to rural hospitals would increase an estimated 7.6%. However, EDs would see a much greater percentage increase, due to the new proposed method for recalculating the relative weights using "multiple procedure" claims data from 2001, he says.
Here are the key changes for the proposed OPPS rules:
1. The 2003 payment rates were developed using actual data from claims submitted by hospitals under OPPS.
This is a significant change, Karpiel says, because rates for the prior two years were based on cost information from 1996.
2. CMS would set relative rates based on data from multiple-procedure claims instead of claims with a single procedure.
As a result of this change, Karpiel says the percentage of claims used to set relative weights would nearly double, from 42% for 2002 to 82% for 2003.
He calculates that ED visit level payments would increase more than 20% in total, assuming an average acuity.
"We’ve been urging hospitals to accurately report visit levels and charges to make certain the database is populated by accurate distributions of the various levels," he says.
3. Separate codes would be established for outpatient evaluation and management services.
However, Karpiel notes that these would not be used for enforcement until 2004.
4. New "G" codes would replace the 9928x series.
"Happily, this would eliminate the potential for Medicare payers to deny or downcode physician levels because they don’t match hospital claims," says Karpiel. "However, it remains to be seen whether non-Medicare payers will use the new level coding system. Some type of crosswalk will likely be necessary."
5. Payment would be given for observation cases for congestive heart failure, chest pains, and asthma for patients admitted directly from a physician’s office.
Karpiel notes that the proposed rule would ensure payment for intravenous therapy for observation patients, whereas the current rules deny this separate payment when observation is claimed.
6. Certain pass-through services would be reassigned to associated ambulatory payment classifications (APCs).
The proposed rule would cut 95 categories of devices and 240 drugs from the pass-through payment system. Instead, these items would be included in associated APCs, with separate APCs created for the higher-cost drugs.
For example, there would be a separate payment for drugs used solely to treat a rare condition or disease, blood and blood products, and vaccines such as those for flu and hepatitis B vaccine.
"While the news is good for emergency medicine overall, it’s particularly good for hospitals who are accurately assigning ED visit levels," Karpiel stresses. Most hospitals still undervalue emergency visit levels by an average of 30%, he says.
He refers to additional revenue from coding for reportable procedures, such as intravenous therapy, injections, laceration repair, splinting/strapping, fracture care, and critical care. "The ED can now show a profit, where in years past it was considered only a loss leader for the hospital," Karpiel predicts.
The CMS proposed rule, titled "Medicare Program; Changes to the Hospital Outpatient Prospective Payment System and Calendar Year 2003 Payment Rates; and Changes to Payment Suspension for Unfiled Cost Reports" [CMS-1206-P], was published in the Federal Register on Aug. 9, 2002. The proposed rule can be viewed on the CMS web site at: cms.hhs.gov/regulations/hopps/.
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