Updated Version of the APC Final Regulation
The Health Care Financing Administration (HCFA) has updated the list of items it expects to make eligible for payment under the outpatient prospective payment system (PPS) as either new technology services or transitional pass-through items. Corrections to typographical errors for status indicators shown in the outpatient PPS rule were also made. (For a completed list of the updated and corrected items, visit HCFA’s Web site: www.hcfa.gov/medicare/ passthru.htm.)
Here is a brief summary of these and other changes, as of June 9, 2000, that have occurred under the final ambulatory payment classifications (APC) regulations issued by HCFA.
1. The number of APC groups has increased from 345 to 659.
Types of APCs
Status Indicator Type of Service Number Groups of APCs
P Partial hospitalization 1 services
S Significant procedure 99 not discounted
T Significant procedure 148 discounted
T Significant procedure 11 new technology
S Significant procedure 4 new technology
— Drugs and biologicals 204 pass-through
— Drugs and biologicals, ancillary 9
— Devices 137
V Visit to clinic or 7 emergency room
X, G, H, J Ancillary service 39
Total 659
2. The number of medical APCs decreased from 121 to seven. Diagnosis will no longer be used to define medical APCs. The medical APCs are exclusively based on HCPCS (HCFA common procedure coding system) evaluation and management codes.
3. The number of Ancillary Service APCs decreased from 44 to 39.
4. Costs for the following are included in the APC payment rate and will not be paid separately:
• operating and recovery room;
• anesthesia as well as supplies and equipment for administering anesthesia;
• medical surgical supplies;
• observation;
• intraocular lenses (IOLs);
• incidental services such as venipuncture;
• capital-related costs;
• implantable items used in connection with X-ray tests and other diagnostic tests;
• costs incurred to procure donor tissue other than corneal tissue;
• surgical dressings.
The services will be packaged into payment for the emergency visit or the same-day surgery services.
5. These items or services will not be packaged (they had been packaged in the preliminary regulations):
• corneal tissue acquisition;
• blood and blood products;
• antihemophilic factors;
• casting, splints, and strappings;
• immunosuppressive drugs following organ transplant;
• certain high-cost drugs that are infrequently administered;
• acquisition of corneal tissue.
6. Certain pass-through items for innovative medical devices, drugs, and biologicals (for which the direct cost is paid) will continue to be paid for the next two to three years. They will then be packaged or bundled and assigned to a standard APC. Those include:
• orphan drugs;
• current cancer treatment drugs;
• brachytheraphy;
• current radiopharmaceutical drugs and biologicals;
• new medical devices, drugs, and biologic agents not used in 1996.
7. Additional payments will be made:
• for outlier conditions;
• for a transition period.
8. The new regulations allow for multiple medical visits on the same day to be paid on the same claim. Condition codes in revenue centers are used to identify when multiple medical visits will be paid.
9. In the proposed regulations, there were 1998 procedures that would be paid only if they were performed on an inpatient basis. In the final regulations, 195 of these procedures were moved into the outpatient category and will now be covered under APCs. One of the more notable procedures moved back to outpatient status was the laparoscopic cholecystectomy.
10. Mental health partial hospitalizations will be paid on a per diem basis and must have at least three partial hospitalization services for each day of service — one of which must be a psychotherapy service other than brief.
11. Two types of facilities have outpatient prospective payment system exemptions:
• cancer centers (permanently exempt);
• small rural hospitals with 100 or fewer beds (exempt through Dec. 31, 2003).
12. The Outpatient Code Editor (OCE) has been modified to not only edit claims but also to:
• specify action taken when an edit occurs (deny, reject, etc.);
• assign APCs for the fiscal intermediaries;
• determine payment-related conditions.
The OCE modifications were developed by 3M under the HCFA DRG contract.
Source: 3M Health Information Systems, Salt Lake City.
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