Categories, copayments are other hot PPS topics
Inpatient-only list may discourage advances
Evaluation and management (E/M) coding guidelines aren’t the only topics of discussion regarding the final outpatient prospective payment system regulation. Providers are also talking about the inpatient-only procedures list and the limit in beneficiary copayments.
In the proposed regulations, the Health Care Financing Administration (HCFA) had a list of procedures that would only be paid if they were performed on an inpatient basis. These procedures were chosen because of their invasive nature, the need for postoperative care, or the underlying physical condition of the patient requiring the surgery. In the final rule, 195 of these procedures were moved into the outpatient category, where they would be covered under ambulatory payment classifications (APCs). The procedures that were moved to the outpatient setting include laparoscopic cholecystectomy, partial mastectomy, and coronary and noncoronary angioplasties.
Hospitals will need to be aware of which APCs will be paid on an outpatient basis and which will be paid on an inpatient basis, says Darice Grzybowski, RHIA, national manager for HIM industry relations with 3M HIS in Salt Lake City. "Certain patients, based on medical necessity, better meet inpatient criteria, and some may better meet outpatient criteria. Insurance companies and HCFA may have different guidelines on what status patients should be in to meet insurance payment criteria, but this is different than medical necessity criteria.
"The bottom line is that the physician’s order and hospital criteria for admission must indicate what status a patient is directed to, and payment is based on that documentation in the medical record," she adds.
Other industry analysts were pleased HCFA removed some procedures from the inpatient-only list. "Technology and the settings regarding how things are done are changing all the time and certainly at a much faster rate than HCFA’s policies could ever keep pace," says Sue Prophet, RHIA, CCS, director for coding policy and compliance at the Chicago-based American Health Information Management Association. "My concern is that the inpatient-only list might actually hold back some of those technological changes."
For example, a technique for a particular procedure might be developed so that it would be performed only on an outpatient basis. If these hospitals were only going to get paid if they do the procedure on an inpatient basis, they are going to continue admitting those patients, Prophet says.
"A medical review of medical necessity on an after-the-fact audit basis would be a better method of making sure that hospitals were performing procedures in the setting that is the safest and most appropriate for that type of procedure, rather than just making a blanket statement that This procedure has to be done on an inpatient basis until we say otherwise,’" she says. "I think more of that should be left to the clinical judgments of the providers."
Change was a response to feedback
HCFA’s decision to move some of the procedures back to the outpatient list was a response to some of those concerns, Grzybowski says. "I feel HCFA listened to the comments about that and responded appropriately."
The agency seemed to carefully consider comments relating to the inpatient-only list as well as to the E/M coding guidelines, she adds. "That’s why it took them so long to release the final regs. To me, it has been a good and natural process." (For more about E/M coding, see story, p. 99.)
Now that the final regulations list procedures that must be done on an inpatient basis only, hospitals need to get their software in place, Grzybowski says. "You need to make sure you have a list available or software that screens patients at registration that says, This procedure is inpatient only.’"
HCFA also has used the final rule to limit what Medicare beneficiaries pay in copayments. "HCFA has recognized that Medicare patients have been paying an inappropriate share of co-insurance or copayment to the hospitals," she says.
Current rules stipulate that Medicare beneficiaries pay 20% of billed charges. When HCFA pays a reduced rate to insurance companies, though, the remaining balance isn’t based on the reduced rate but is prorated from the initial charges. That could mean that beneficiaries could spend 50% or more on copayments for certain procedures. HCFA capped the amount beneficiaries would pay for a copayment so they would not end up paying a disproportionate amount.
The final rule includes a provision designed to eventually transition the copayment to the desired 20%. Hospitals have the option of discounting the total price of the copayment before HCFA does and using that discount as a marketing tool to attract more patients. With reimbursement reduced in so many areas, however, Grzybowski says she doesn’t expect many hospitals to offer the discount — or that patients will switch hospitals just for that reason. "Patients are loyal to their doctors."
As with the inpatient-only procedure list, hospitals need to ensure that their software can handle the new calculations of the copayments, she says. "That’s something hospitals are going to have to get used to [evaluating]."
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