Part 1 Ch 7 OPPS

Medicare Outpatient Payment System

OPPS

Labelling

Label the following as inpatient or outpatient

Drag labels to their correct position on the image

outpatient

could be both IP and OP

inpatient

Labelling

Label the following encounter as inpatient or outpatient

Drag labels to their correct position on the image

could be IP or OP

outpatient

inpatient

IPPS was a hit, so OPPS was born

• Most Medicare reimbursement systems use only one reimbursement methodology for payment of services and supplies (ex: IPPS uses case rate methodology)

• OPPS is unique, as it incorporates multiple reimbursement methodologies

Remeber, this is like a menu of services! It is RETROSPECTIVE, because we know what the doctor charges per service, but we dont know how many services will be provided!

​​Fee Schedule

The services and supplies all get packaged in to one PREDETERMINED payment. Hospital must suffer loss or benefit from surplus.

​​Prospective Payment

Cost-based methodology is ised for specific services and pharmaceutical items. Pharmaceuticals are paid based on the Average Sales Price (ASP) + 5%

​​Reasonable Cost

​CMS uses 3 methodologies to reimburse hospital OP

Ambulatory Services paid via APC

The Two-Times Rule

The APC system combines procedures or services that are clinically comparable in resource consumption, into groups called APCs (what other system does this?...hint...with diagnosis codes)

With some exceptions, the cost for the most expensive service within an APC cannot be more than 2 times the cost of the least expensive service within the APC

Open Ended

What are ambulatory services? You can give the definition or examples.

occurs when payment for multiple significant procedures (or multiple units of the same procedure) are bundled into a single payment.

Bundling

occurs when payment for minor ancillary services are packaged into a single payment for the procedure.

Packaging

Packaging and Bundling

What are some examples you can think of?

Open Ended

What would be some minor ancillary procedures and services that would be packaged into an Appendectomy, or a bunionectomy?

Packaging power ACTIVATE!

Various levels of packaging are used in OPPS,

often activated when certain combinations of services are performed together.

• Read Example 7.2 on page 107 for a bundling example

THE APC SYSTEM IS PARTIALLY-PACKAGED - this means that some services/items are bundled or packaged, but others are not

APCs vs. MS-DRGs

One claim may be assigned multiple APC's

BUT IPPS is fully-packaged meaning only one MS-DRG is assigned.

Though OPPS has been partially packaged since 2000, CMS has been increasing packing of services in an attempt to move towards a more fully-packaged case-rate methodology

SI (Payment Status Indicator)

Medicare requires HCPCS codes for OP services provided to beneficiaries. Each HCPCS code has an SI to show how it is paid (via fee schedule, etc. see page 108) ​

Make note of this for the test:

​Outpatient Code Editor (OCE)

Used to assist with the complex packaging under OPPS.

The OCE edits the claim for billing requirements but it also applies packaging and bundling logic to a claim to determine the correct APC(s) and the estimated reimbursement.

OCE can be downloaded from the CMS website under the MEDICARE Tab.

Make note of this for the test:

Recall Relative Weight from last chapter

The relative weight is a measure of resource intensity for a procedure or service.

The conversion factor X the relative weight = national unadjusted payment

Has not be adjusted for geographic differences

THURSDAY...

We will discuss, in more detail, the nine payment status indicators, as well as the provisions of the Outpatient Payment System OPPS