Download Element RVU GPCI Geographic Adjustment Adjusted Payment

Chapter 7
Ambulatory and Other MedicareMedicaid Reimbursement Systems

Prospective Payment System
◦ Determining before-hand what payment will be for
a service
◦ Began with hospital inpatient services
◦ Very successful
◦ Implemented next for all Medicare services
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RBRVS for physician services
Ambulance fee schedule
Ambulatory surgical center payment systems
Hospital outpatient payment system
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Resource-based relative value scale
Classifies health services based on the cost of
providing the physician services
Takes into account different settings, skill
and training levels required to perform the
services and the time and risk involved
The federal government’s payment system for
physicians

Relative Value Scale
◦ Compares the resources needed or appropriate
prices for various units of service
◦ Takes into account labor, skill, supplies, equipment,
space and other costs for each procedure or service
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Relative Value Unit
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Exist for more than 4000 types of health services
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85% of Medicare payments to physicians
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Assigns each service a value representing the
true resources involved in producing it
◦ Time and intensity
◦ Expenses
◦ Risk of malpractice
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Physician services
◦ Medical and surgical diagnostics
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Radiology
Physician assistants
Physical and occupational therapy
Nurse practitioners
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Lab tests are excluded
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Based on CPT Coding
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Each CPT code has been assigned an RVU
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RVUs reflect national averages but are
adjusted to local costs
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Each RVU is comprised of 3 elements
◦ Work
◦ PE = physician expenses
◦ MP = malpractice
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The RVU
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Geographic Adjustment
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Conversion Factor
◦ Converts the relative value into a payment amount
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RVU x Conversion Factor (CF) = Medicare
payment fee schedule amount
Example in text – CPT Code 99202
◦ Page 155 in 3rd Edition
◦ Page 145 in 2nd Edition
Element
RVU
GPCI
Geographic
Adjustment
Work Value
.88
1.00
.88
PE –
Physician
Expense
.83
0.925
.76775
MP .05
Malpractice
0.634
.0317
Sum
1.67945
Adjusted
Payment
60.57
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Medicare gives bonus payments to physicians
who treat patients in underserved areas
Based on the address of the location where
service is rendered
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Exclusion of codes will significantly decrease
RBRVS payment
Review table
◦ 7.10 in 3rd Edition
◦ 7.3 in 2nd Edition
◦ Leaving out the removal of tumors or polyps along
with the Esophagoscopy results in a $141.63 loss

Medicare Part B provides beneficiary coverage
for ambulance services
◦ Will provide transport service, only if other means are
inadvisable based on the beneficiary’s medical
condition
◦ Provided to the nearest facility that is able to provide
services for that patient’s condition
◦ Transported from
 One hospital to another
 To home
 To an extended care facility
Two types of ambulance service entities
1.
Providers: Associated with a medical facility such as a
hospital SNF or HHA or CAH
–
Retrospective reasonable cost payment
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2.
Previous year’s cost-to-charge ratio (CCR)
Suppliers: Not associated with a medical facility
–
Reasonable charge payment mechanism
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Fours ways to report ambulance services
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Both types used HCPCS Code Set
◦ Providers
 A0030-A0999, excluding A0888 (ambulance codes)
 And codes to report type of mileage
◦ Suppliers
 A0030-A0999, excluding A0888
 Level I codes 93005 and 93041
 Various other Level II codes
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BBA of 1997
◦ Added section 1834(1) to the SSA
◦ Required the creation of a fee schedule to establish
prospective payment rates for ambulance services
◦ Devised through negotiated rulemaking (Negotiated
Rulemaking Act of 1990)
 Negotiated Rulemaking Committee on Medicare Ambulance
Services Fee Schedule
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The committee was instructed to:
◦ Control Medicare expenditures through PPS
◦ Establish service definitions to link payment to the
type of service
◦ Consider regional and operational differences
◦ Consider inflation
◦ Construct a phase-in period for implementation
◦ Require providers and supplier to accept Medicare
assignment
◦ Reimburse providers and suppliers at the lower of FS
or billed charges
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BBA (cont.)
◦ Established the paramedic intercept service type
(discussed under levels of service)
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BBRA of 1999
◦ Modified the definition of rural for the paramedic
intercept service type
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BIPA of 2000
◦ Excluded CAH from the fee schedule payment
methodology when the CAH is the only supplier or
provider of ambulance services within a 35 mile
drive.
 Reasonable cost basis
◦ Increased payment rates for rural ambulance mileage
◦ Modified inflation factor for 7/1/01 to 12/31/01
 Increased 2%
◦ Eliminated blended payment rate for mileage phasein provision for suppliers
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Implemented April 1, 2002
Five year phase-in plan
Reimbursement is based on the level of service
provided to the beneficiary
◦ Seven levels of service
Levels of Service Chart:
Service
Acronym
Description
Basic Life Support
BLS
Service level of an Emergency Medical Technician (EMT)-Basic, including
the establishment of a peripheral intravenous line.
Advanced Life Support,
Level 1
ALS1
In emergency cases, an assessment provided by an EMT-Intermediate or
Paramedic (ALS crew) to determine patient needs and the furnishing
of one or more ALS interventions. An ALS intervention is a procedure
beyond the scope of an EMT-Basic.
Advanced Life Support,
Level 2
ALS2
The administration of at least three different medications or the provision of
one or more ALS procedures.
Specialty Care Transport
SCT
For critically injured or ill patient, the level of interhospital service
furnished is beyond the scope of a paramedic. Ongoing care must be
furnished by one or more health professionals in an appropriate
specialty area.
Paramedic ALS Intercept
PI
ALS services furnished by an entity that does not provide the ambulance
transport.
Fixed Wing Air
Ambulance
FW
Destination is inaccessible by land vehicle or great distances or other
obstacles (heavy traffic) and the patient’s condition is not appropriate
for BLS or ALS ground transportation.
Rotary Wing Air
Ambulance
RW
Helicopter transport. Destination is inaccessible by land vehicle or great
distances or other obstacles (heavy traffic) and the patient’s condition
is not appropriate for BLS or ALS ground transportation.
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Immediate response payment
◦ Emergency response involves responding immediately
at the basic life support or advanced life support level 1
of service to a 911 or 911-type call
◦ Immediate response is one in which the ambulance
begins as quickly as possible to take the steps
necessary to respond to a call
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Additional payment is provided for the extra
overhead expenses incurred to stay prepared at
all times for emergency service
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Multiple-patient transport
◦ Example: traffic accident
◦ 2 passengers
 Each beneficiary is reimbursed at 75% of the base rate for the level
of service provided
◦ 3 or more passengers
 Each beneficiary is reimbursed at 60% of the base rate for the level
of service provided
◦ Single payment is made for the mileage
◦ Modifier GM is reported with level of service HCPCS
code
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Transport of deceased patients
◦ Specific rules
 Patient is pronounced dead prior to the ambulance being called, no
payment is made to the ambulance provider/supplier
 Patient is pronounced dead after the ambulance has been called but
prior to its arrival, BLS base rate for group transport or air
ambulance base rate payment will be made. Mileage will not be
reimbursed.
 Patient is pronounced dead during transport, payment rules are
followed as if the patient were alive. Modifier QL should be
reported with the level of service code.
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Regional variations
◦ Based on point of beneficiary pick-up (zip code)
◦ Geographic adjustment factor is applied
 Equal to the practice expense portion of the geographic practice cost
index used in the Medicare physician fee schedule
◦ Ground transport
 70% of payment rate is adjusted
◦ Air transport
 50% of payment rate is adjusted
◦ Mileage is not adjusted
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Rural area service
◦ Adjustment is made when beneficiary pick-up location
is rural (zip code)
 Rural = area outside of a core-based statistical area (CBSA) or
an area identified as rural
◦ Ground
 50% add-on is applied to the mileage payment rate for the first
17 loaded miles
 25% add-on is applied for miles 18 through 50
 No adjustment to the base rate for the level of service provided
◦ Air
 50% add-on is applied to the base rate and to all of the loaded
mileage
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HCPCS Level II modifiers
◦ Origin and destination modifier must be reported for each
trip
◦ Additional modifiers are used
 Provided under arrangement of a provider of services (QM)
 Furnished directly by a provider of services (QN)
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Seven step process
◦ Takes into consideration
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Patient service level
Modifiers
Zip codes
Miles
Add-on payments
1.
Identify the level of service code
for the transportation provided
•
2.
Determine the number of patients
transported
•
3.
Does the case meet emergency
response criteria?
4.
•
5.
6.
If yes, append modifier and
reduce payment
If yes, append modifier and adjust
payment
7.
Identify zip code
Identify the mileage code and
number of miles
Apply the rural area payment addon if applicable
•
•
•
Determine if the Medicare
beneficiary was pronounced dead
•
Apply the regional variation
adjustment
50% miles 1-17
25% miles 18-50
50% total miles - air
Add together the level of service
payment and mileage payment to
determine total reimbursement

“Medicare Payments for Ambulance Transports” report
◦ 25% of the ambulance transport claims did not meet CMS
program requirements
◦ deficient claims resulted in $402 million of improper payments
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OIG recommendations:
◦ Pre-payment edits
◦ Post-payment review guidelines
◦ Education, education, education
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Outpatient Prospective Payment System
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August 1, 2000
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Ambulatory surgery, emergency department,
hospital clinics
3M Health Information Systems was awarded
a grant to develop the grouping system
◦ APG’s – Ambulatory Patient Groups
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10 types of APC’s
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See list in your text
◦ Page 180 3rd edition
◦ Page 163 in 2nd edition
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Covered by Medicare Part B
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Must “Accept Assignment”
◦ Must accept Medicare payment in full
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ASC List of Covered Procedures
◦ Moving to APC system
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There is a quiz this week
◦ 55 minute time limit
◦ 25 multiple choice questions
◦ Covers all chapters from Unit 1 – Unit 4