Medicare Program; Changes to the Hospital Outpatient Prospective Payment System for Calendar Year 2002
Federal RegisterNov 30, 2001
Ask Donna
What actually matters in this document.
Text
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 413, 419, and 489
[CMS-1159-F2]
RIN 0938-AK54
Medicare Program; Changes to the Hospital Outpatient Prospective Payment System for Calendar Year 2002
AGENCY:
Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION:
Final rule.
SUMMARY:
This final rule revises the Medicare hospital outpatient prospective payment system to implement applicable statutory requirements, including relevant provisions of the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000, and changes arising from our continuing experience with this system. In addition, it describes changes to the amounts and factors used to determine the payment rates for Medicare hospital outpatient services paid under the prospective payment system. This final rule also announces a uniform reduction of 68.9 percent to be applied to each of the transitional pass-through payments. These changes are applicable to services furnished on or after January 1, 2002.
EFFECTIVE DATE:
This final rule is effective January 1, 2002 and is applicable to services furnished on or after January 1, 2002.
FOR FURTHER INFORMATION CONTACT:
George Morey (410) 786-4653, for provider-based issues; and Nancy Edwards (410) 786-0378, for all other issues.
SUPPLEMENTARY INFORMATION:
Availability of Copies and Electronic Access
Copies:
To order copies of the
Federal Register
containing this document, send your request to: New Orders, Superintendent of Documents, P.O. Box 371954, Pittsburgh, PA 15250-7954. Specify the date of the issue requested and enclose a check or money order payable to the Superintendent of Documents, or enclose your Visa or Master Card number and expiration date. Credit card orders can also be placed by calling the order desk at (202) 512-1800 or by faxing to (202) 512-2250. The cost for each copy is $9. As an alternative, you can view and photocopy the
Federal Register
document at most libraries designated as Federal Depository Libraries and at many other public and academic libraries throughout the country that receive the
Federal Register
.
This
Federal Register
document is also available from the
Federal Register
online database through GPO Access, a service of the U.S. Government Printing Office. The Web site address is:
http://www.access.gpo.gov/nara/index.html.
Information on the outpatient prospective payment system can be found on our homepage. You can access these data by using the following directions:
1. Go to CMS homepage (
http://www.cms.hhs.gov
).
2. Click on “Professionals.”
3. Under the heading “Physicians and Health Care Professionals,” click on “Medicare Coding and Payment Systems.”
4. Select Hospital Outpatient Prospective Payment System.
Or, you can go directly to the Hospital Outpatient Prospective Payment System page by typing the following:
http://www.hcfa.gov/medicare/hopsmain.htm.
To assist readers in referencing sections contained in this document, we are providing the following table of contents.
Outline of Contents
I. Background
A. Authority
B. Summary of Rulemaking
C. Summary of Changes in the August 24, 2001 Proposed Rule
1. Changes Required by BIPA 2000
2. Additional Changes
3. Provider-Based Changes
D. Public Comments and Responses to the August 24, 2001 Proposed Rule
II. Changes to the Ambulatory Payment Classification (APC) Groups and Relative Weights
A. Recommendations of the Advisory Panel on APC Groups
1. Establishment of the Advisory Panel
2. Specific Recommendations of the Advisory Panel and Our Responses
B. Additional APC Changes Resulting from BIPA Provisions
1. Coverage of Glaucoma Screening
2. APCs for Contrast Enhanced Diagnostic Procedures
3. Coding and Payment for Mammography Services
a. Screening Mammography
b. Diagnostic Mammography
c. Coding and Payment for New Technology Mammography Services
C. Other Changes Affecting the APCs
1. Changes in Revenue Code Packaging
2. Special Revenue Code Packaging for Specific Types of Procedures
3. Limit on Variation of Costs of Services Classified Within a Group
4. Observation Services
5. List of Procedures That Will Be Paid Only As Inpatient Procedures
6. Additional New Technology APC Groups
D. Recalibration of APC Weights for CY 2002
III. Wage Index Changes
IV. Copayment Changes
A. BIPA 2000 Coinsurance Limit
B. Impact of BIPA 2000 Payment Rate Increase on Coinsurance
C. Coinsurance and Copayment Changes Resulting from Change in an APC Group
V. Outlier Policy Changes
VI. Other Policy Decisions and Changes
A. Change in Services Covered Within the Scope of the OPPS
B. Categories of Hospitals Subject To and Excluded from the OPPS
C. Conforming Changes: Additional Payments on a Reasonable Cost Basis
D. Hospital Coding for Evaluation and Management Services
E. Annual Drug Pricing Update
F. Definition of Single-Use Devices
G. Criteria for New Technology APCs
1. Background
2. Modifications to the Criteria and Process for Assigning Services to New Technology APCs
a. Services Paid Under New Technology APCs
b. Criteria for Assignment to New Technology APC
c. Revision of Application for New Technology Status
d. Length of Time in a New Technology APC
VII. Transitional Pass-Through Payment Issues
A. Background
B. Discussion of Pro-Rata Reduction
C. Reducing Transitional Pass-Through Payments to Offset Costs Packaged into APC Groups
VIII. Conversion Factor Update for CY 2002
IX. Summary of and Responses to MedPAC Recommendations
X. Provider-Based Issues
A. Background and April 7, 2000 Regulations
B. Provider-Based Issues/Frequently Asked Questions
C. Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000
1. Two-Year “Grandfathering”
2. Geographic Location Criteria
3. Criteria for Temporary Treatment as Provider-Based
D. Commitment to Re-examine EMTALA Applicability to Off-Campus Locations, and to Further Revise Provider-Based Regulations
E. Changes to Provider-Based Regulations
1. Clarification of Requirements for Adequate Cost Data and Cost Finding
2. Scope and Definitions
3. BIPA Provisions on Grandfathering and Temporary Treatment as Provider-Based
4. Reporting
5. Geographic Location Criteria
6. Notice to Beneficiaries of Coinsurance Liability
7. Clarification of Protocols for Off-Campus Departments
8. Other Changes
F. Comments on Other Issues
XI. Provisions of the Final Rule
A. Changes Required by BIPA
B. Additional Changes
C. Technical Corrections
XII. Collection of Information Requirements
XIII. Regulatory Impact Analysis Regulations Text
Addenda
Addendum A—List of Ambulatory Payment Classifications (APCs) with Status Indicators, Relative Weights, Payment Rates, and Copayment Amounts
Addendum B—Payment Status by HCPCS Code, and Related Information
Addendum C—Hospital Outpatient Payment for Procedures by APC: Displayed on Website Only
Addendum D—Payment Status Indicators for the Hospital Outpatient Prospective Payment System
Addendum E—CPT Codes Which Would Be Paid Only As Inpatient Procedures
Addendum G—Service Mix Indices by Hospital: Displayed on Website only
Addendum H—Wage Index for Urban Areas
Addendum I—Wage Index for Rural Areas
Addendum J—Wage Index for Hospitals That Are Reclassified
Alphabetical List of Acronyms Appearing in the Proposed Rule
APC Ambulatory payment classification
APG Ambulatory patient group
ASC Ambulatory surgical center
AWP Average wholesale price
BBA 1997 Balanced Budget Act of 1997
BBRA 1999 Balanced Budget Refinement Act of 1999
BIPA 2000 Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000
CAH Critical access hospital
CAT Computerized axial tomography
CCI Correct Coding Initiative
CCR Cost-to-charge ratio
CMHC Community mental health center
CMS Centers for Medicare & Medicaid Services (Formerly known as the Health Care Financing Administration)
CORF Comprehensive outpatient rehabilitation facility
CPI Consumer Price Index
CPT (Physician's) Current Procedural Terminology, Fourth Edition, 2001, copyrighted by the American Medical Association
DME Durable medical equipment
DMEPOS DME, prosthetics (which include prosthetic devices and implants), orthotics, and supplies
DRG Diagnosis-related group
EMTALA Emergency Medical Treatment and Active Labor Act
FDA Food and Drug Administration
FQHC Federally qualified health center
HCPCS Healthcare Common Procedure Coding System
HHA Home health agency
ICD-9-CM International Classification of Diseases, Ninth Edition, Clinical Modification
IME Indirect medical education
JCAHO Joint Commission on Accreditation of Healthcare Organizations
MRI Magnetic resonance imaging
MSA Metropolitan statistical area
NECMA New England County Metropolitan Area
OPPS Hospital outpatient prospective payment system
PPS Prospective payment system
RFA Regulatory Flexibility Act
RHC Rural health clinic
RRC Rural referral center
SCH Sole community hospital
SNF Skilled nursing facility
I. Background
A. Authority
When the Medicare statute was originally enacted, Medicare payment for hospital outpatient services was based on hospital-specific costs. In an effort to ensure that Medicare and its beneficiaries pay appropriately for services and to encourage more efficient delivery of care, the Congress mandated replacement of the cost-based payment methodology with a prospective payment system (PPS). The Balanced Budget Act of 1997 (BBA) (Pub. L. 105-33), enacted on August 5, 1997, added section 1833(t) to the Social Security Act (the Act) authorizing implementation of a PPS for hospital outpatient services. The Balanced Budget Refinement Act of 1999 (BBRA) (Pub. L. 106-113), enacted on November 29, 1999, made major changes that affected the hospital outpatient PPS (OPPS). The Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA) (Pub. L. 106-554), enacted on December 21, 2000, made further changes in the OPPS. The BIPA provisions that affect the OPPS are summarized below, in section I.C. The OPPS was first implemented for services furnished on or after August 1, 2000.
B. Summary of Rulemaking
• On September 8, 1998, we published a proposed rule (63 FR 47552) to establish in regulations a PPS for hospital outpatient services, to eliminate the formula-driven overpayment for certain hospital outpatient services, and to extend reductions in payment for costs of hospital outpatient services. On June 30, 1999, we published a correction notice (64 FR 35258) to correct a number of technical and typographic errors in the September 1998 proposed rule including the proposed amounts and factors used to determine the payment rates.
• On April 7, 2000, we published a final rule with comment period (65 FR 18438) that addressed the provisions of the PPS for hospital outpatient services scheduled to be effective for services furnished on or after July 1, 2000. Under this system, Medicare payment for hospital outpatient services included in the PPS is made at a predetermined, specific rate. These outpatient services are classified according to a list of ambulatory payment classifications (APCs). The April 7 final rule with comment period also established requirements for provider departments and provider-based entities and prohibited Medicare payment for nonphysician services furnished to a hospital outpatient by a provider or supplier other than a hospital unless the services are furnished under arrangement. In addition, this rule extended reductions in payment for costs of hospital outpatient services as required by the BBA of 1997 and amended by the BBRA of 1999. Medicare regulations governing the hospital OPPS are set forth at 42 CFR 419.
• On June 30, 2000, we published a notice (65 FR 40535) announcing a delay in implementation of the OPPS from July 1, 2000 to August 1, 2000.
• On August 3, 2000, we published an interim final rule with comment period (65 FR 47670) that modified criteria that we use to determine which medical devices are eligible for transitional pass-through payments. The August 3, 2000 rule also corrected and clarified certain provider-based provisions included in the April 7, 2000 rule.
• On November 13, 2000, we published an interim final rule with comment period (65 FR 67798). This rule provided for the annual update to the amounts and factors for OPPS payment rates effective for services furnished on or after January 1, 2001. We also responded to public comments on those portions of the April 7, 2000 final rule that implemented related provisions of the BBRA and public comments on the August 3, 2000 rule.
• On August 24, 2001, we published a proposed rule (66 FR 44672) that set forth proposed changes to the Medicare hospital OPPS and calendar year (CY) 2002 payment rates. It also set forth proposed changes to the amounts and factors used to determine these payment rates.
C. Summary of Changes in the August 24, 2001 Proposed Rule
On August 24, 2001, we published a proposed rule (66 FR 44672) that set forth proposed changes to the Medicare hospital OPPS and CY 2002 payment rates including changes to the amounts and factors used to determine these payment rates.
The following is a summary of the major changes that we proposed and the
issues we addressed in the August 24, 2001 proposed rule.
1. Changes Required by BIPA 2000
We proposed the following changes to the OPPS, to implement the provisions of BIPA 2000:
• Limit coinsurance to a specified percentage of APC payment amounts.
• Provide hold-harmless payments to children's hospitals.
• Provide separate APCs for services that use contrast agents and those that do not.
• Payment for glaucoma screening as a covered service.
• Payment for certain new technology used in diagnostic mammograms.
2. Additional Changes
We proposed the following additional changes to the OPPS:
• Add APCs, delete APCs, and modify the composition of services within some existing APCs.
• Add an APC group that would provide separate payment for observation services in limited circumstances to patients having specific diagnoses.
• Recalibrate the relative payment weights of the APCs.
• Update the conversion factor and wage index.
• Revise the APC payment amounts to reflect the APC reclassifications, the recalibration of payment weights and the other required updates and adjustments.
• Make reductions in pass-through payments for specific drugs and categories of devices to account for the drug and device costs that are included in the APC payment for associated procedures and services.
• Apply a standard procedure to calculate copayment amounts when new APCs are created or when APC payment rates are increased or decreased as a result of recalibrated relative weights.
• Calculate outlier payments on a service-by-service basis beginning in 2002. We also proposed a methodology for allocating packaged services to individual APCs in determining costs of a service and we proposed to use a hospital's overall outpatient cost-to-charge ratio to convert charges to costs.
• Set the threshold for outlier payments to require costs to exceed 3 times the APC payment amount and payment at 50 percent of any excess costs above the threshold.
• Exclude hospitals located outside the 50 states, the District of Columbia and Puerto Rico from the OPPS.
• Exclude from payment under the OPPS certain services that are furnished to inpatients of hospitals that do not submit claims for outpatient services under Medicare Part B.
• Make conforming changes to regulations text to reflect the exclusion from the OPPS of certain items and services (for example, bad debts, direct medical education and certain certified registered nurse anesthetists services) that are paid on a cost basis.
• Update the payments for pass-through radiopharmaceuticals, drugs, and biologicals on a calendar year basis to reflect increases in AWP.
• Allow reprocessed single use devices to be considered eligible for pass-through payments if the reprocessing process for single use devices meets the FDA's most recent criteria.
• Revise the criteria we will use to determine whether a procedure or service is eligible to be assigned to a new technology APC.
• Revise the list of information that must be submitted to request assignment of a service or procedure to a new technology APC.
• Provide more flexibility in the amount of time a service may be paid under a new technology APC.
• A description of the Secretary's estimate of the total amount of pass-through payments for CY 2002 and the need for a pro rata reduction to those payments in that year.
3. Provider-Based Changes
We proposed to make changes to the provider-based regulations to reflect the provisions of section 404 of BIPA and to codify certain clarifications on provider-based status that were posted on the CMS Web site.
D. Public Comments Received in Response to the August 24, 2001 Proposed Rule
We received approximately 400 timely items of correspondence containing multiple comments on the proposed rule. Major issues addressed by the commenters included the following:
• The implementation of a uniform reduction in the transitional pass-through payments for CY 2002.
• Changes to APC classifications and weights for certain outpatient services including mammography, stereotactic radiosurgery and intensity modulated radiation therapy, and positive emission tomography (PET) scans.
• Changes to the eligibility criteria for payment as a new technology service.
On November 2, 2001, we published a final rule (66 FR 55857) that responded to the comments on the Secretary's estimate of the total amount of transitional pass-through payments for CY 2002 and the need for a uniform reduction in the pass-through payments for that year as well as comments on the proposed conversion factor for CY 2002. That final rule announced that the conversion factor for CY 2002 is $50.904 and that the Secretary is implementing a pro rata reduction in 2002 (expected to be between 65 and 70 percent) to each pass-through payment (we stated that we would announce the exact amount of the reduction before the beginning of 2002).
Summaries of the remaining public comments received and our responses to those comments are set forth below under the appropriate heading. In addition, we are announcing that the pro rata reduction is 68.9 percent.
II. Changes to the APC Groups and Relative Weights
Under the OPPS, we pay for hospital outpatient services on a rate per service basis that varies according to the APC group to which the service is assigned. Each APC weight represents the median hospital cost of the services included in that APC relative to the median hospital cost of the services included in APC 0601, Mid-Level Clinic Visits. As described in the April 7, 2000 final rule (65 FR 18484), the APC weights are scaled to APC 0601 because a mid-level clinic visit is one of the most frequently performed services in the outpatient setting.
Section 1833(t)(9)(A) of the Act requires the Secretary to review the components of the OPPS not less often than annually and to revise the groups and related payment adjustment factors to take into account changes in medical practice, changes in technology, and the addition of the new services, new cost data, and other relevant information. Section 1833(t)(9)(A) of the Act requires the Secretary, beginning in 2001, to consult with an outside panel of experts when annually reviewing and updating the APC groups and the relative weights.
Finally, section 1833(t)(2) of the Act provides that, subject to certain exceptions, the items and services within an APC group cannot be considered comparable with respect to the use of resources if the highest median or mean cost item or service in the group is more than 2 times greater than the lowest median or mean cost item or service within the same group (referred to as the “2 times rule”). We use the median cost of the item or service in implementing this provision. The statute authorizes the Secretary to make exceptions to the 2 times rule “in
unusual cases, such as low volume items and services.”
For the proposed rule and for this final rule, we analyzed the APC groups within this statutory framework.
A. Recommendations of the Advisory Panel on APC Groups
1. Establishment of the Advisory Panel
Section 1833(t)(9)(A) of the Act, which requires that we consult with an outside panel of experts when annually reviewing and updating the APC groups and the relative weights, specifies that the panel will act in an advisory capacity. The expert panel, which is to be composed of representatives of providers, is to review and advise us about the clinical integrity of the APC groups and their weights. The Panel is not restricted to using our data and may use data collected or developed by organizations outside the Department in conducting its review.
On November 21, 2000, the Secretary signed the charter establishing an “Advisory Panel on APC Groups” (the Panel). The Panel is technical in nature and is governed by the provisions of the Federal Advisory Committee Act (FACA) as amended (Public Law 92-463). To establish the Panel, we solicited members in a notice published in the
Federal Register
on December 5, 2000 (65 FR 75943). We received applications from more than 115 individuals nominating either themselves or a colleague. After carefully reviewing the applications, CMS chose 15 highly qualified individuals to serve on the Panel. The Panel was convened for the first time on February 27, February 28, and March 1, 2001. We published a notice in the
Federal Register
on February 12, 2001 (66 FR 9857) to announce the location and time of the Panel meeting, a list of agenda items, and that the meeting was open to the public. We also provided additional information through a press release and our website.
2. Specific Recommendations of the Advisory Panel and Our Responses
In the proposed rule, we summarized the issues considered by the Panel, the Panel's APC recommendations, and our subsequent action with regard to the Panel's recommendations. The data used by the Panel in making its recommendation are the 1996 claims that were used to set the APC weights and payment rates for CY 2000 and 2001. In the proposed rule, we provided a detailed summary of the Panel discussion and recommendations (66 FR 44675-44686). See the proposed rule for more details regarding these discussions.
As discussed below, the Panel sometimes declined to recommend a change in an APC even though the APC violated the 2 times rule. In section II.C.3 of this preamble, we discuss our policies regarding the 2 times rule based on the data we are using to recalibrate the 2002 APC relative weights (that is, claims for services furnished on or after July 1, 1999 and before July 1, 2000). That section also details the criteria we use in deciding to make an exception to the 2 times rule. We asked the Panel to review many of the exceptions we implemented in 2000 and 2001. The exceptions are referred to as “violations of the 2 times” rule in the following discussion.
We did not receive comments on the APC changes we proposed based on the recommendations of the Panel except for our proposal regarding stereotactic radiosurgery (APCs 0300 and 0302). We discuss that proposal in detail below along with the comments and our responses. For all other APC Panel proposed changes, we briefly discuss the Panel's recommendation, our proposal, and the final changes we have made. We also received comments on APCs and the assignment of codes to APCs for which we made no specific proposal in the proposed rule. We address those comments below in section II.A.3. of this preamble.
APC 0016: Level V Debridement & Destruction
APC 0017: Level VI Debridement & Destruction
We asked the Panel to review the current placement of CPT code 56501, Destruction of lesion(s), vulva; simple, any method, in APC 0016 because the APC violates the 2 times rule. Because the procedure is a simple destruction of skin and superficial subcutaneous tissues, we will not expect it to have a median cost of $500. Thus, we believe that the higher costs associated with this code were the result of incorrect coding. To ensure that procedures in APC 0016 comply with the 2 times rule, we asked the Panel to consider one of the following clinical options:
• Move CPT code 56501 to APC 0017.
• Retain CPT code 56501 in APC 0016 but split APC 0016 into three APCs to distinguish simple destruction lesions from extensive destruction lesions.
The Panel recommended the following:
• Move CPT code 56501 from APC 0016 to APC 0017.
• Move CPT code 46917 from APC 0014 to APC 0017.
After considerable discussion the Panel recommended these changes to achieve clinical coherence and resource similarity among the procedures assigned to these APCs. Because CPT code 46917 is performed using laser equipment and requires anesthesia, the Panel believed it appropriate to move this procedure to APC 0017. Although the Panel considered the reassignment of CPT code 54055 to APC 0017, it did not recommend this change. The Panel's recommended changes will group in APC 0017 simple destruction of lesion procedures that use laser or surgical techniques with extensive destruction of lesion procedures.
We proposed to accept the Panel's recommendation regarding CPT code 56501 and to revise the APC accordingly. We are adopting these changes in final; however, as shown below in Table 3, we are making additional changes to these APCs because of the 2 times rule.
APC 0024: Level I Skin Repair
APC 0025: Level II Skin Repair
APC 0026: Level III Skin Repair
APC 0027: Level IV Skin Repair
The composition of procedures in APCs 0025 and 0027 results in these APCs violating the 2 times rule. Therefore, we requested the Panel's advice in exploring other clinical options for reconfiguring the four skin repair APCs to achieve clinical and resource homogeneity among the procedures assigned to APCs 0025 and 0027 while retaining clinical and resource homogeneity for APCs 0024 and 0026. We asked the Panel to consider the following clinical options to achieve this result:
• Rearrange the procedures assigned to APCs 0024 through 0027 based on the size or the length of the skin incision.
• Rearrange the procedures assigned to APCs 0024 through 0027 based on the complexity of the repair, such as distinguishing repairs that involve layers of skin, flaps, or grafts from those that do not.
The Panel reviewed the various options presented, which were modeled based on the 1996 claims data used in constructing the current APC groups and payment rates. The Panel recommended the following:
• Make no changes to APCs 0024 and 0027.
• Reevaluate these APCs with new data when the Panel meets in 2002.
• The Panel, in preparation for the 2002 meeting, will discuss options with and gather clinical and utilization information from their respective hospitals regarding these procedures.
We proposed to accept the Panel's recommendations. We are adopting these recommendations as final; however, as discussed below in section II.C., we are making additional changes to these APCs based on the use of new data and application of the 2 times rule.
APC 0058: Level I Strapping and Casting Application
APC 0059: Level II Strapping and Casting Application
APC 0058 (which consists of the simpler casting, splinting, and strapping procedures) violates the 2 times rule. The median costs for high volume procedures in APC 0058 vary widely, ranging from $27 to $83. The median costs associated with presumably more resource-intensive procedures in APC 0059 are fairly uniform, ranging from $69 to $119. To limit the cost variation in APC 0058, we asked the Panel to consider the following options:
• Move the following four codes from APC 0058 to APC 0059: CPT code 29515, Application of short splint (calf to foot); CPT code 29520, Strapping; hip; CPT code 29530, Strapping; knee; and CPT code 29590, Denis-Brown splint strapping.
• Create a new APC to include a third level of strapping and casting application procedures by regrouping all procedures assigned to both APCs 0058 and 0059 based on the following clinical distinctions: removal/revision, strapping/splinting, and casting.
• Package certain CPT codes assigned to APC 0058 with relevant procedures.
The Panel recommended that we do the following:
• Make no changes to APC 0058.
• Provide appropriate education and guidance to hospitals regarding appropriate use and billing of codes in APC 0058.
• Resubmit APC 0058 to the Panel for reevaluation when later data are available.
We proposed to accept the Panel's recommendations except that we proposed to move CPT code 29515 to APC 0059 due to the 2 times rule and the newer data we are using for this rule. These changes have been adopted as final in this document.
APC 0079: Ventilation Initiation and Management
The codes in APC 0079 represent respiratory treatment and support provided in the outpatient setting. The cost variation among the assigned procedures in this APC raises concern about hospital coding practices. The median costs for these procedures range from $40 to $315. We asked the Panel to clarify whether these procedures are performed on outpatients or if they are performed on patients who come to the emergency room and are later admitted to the hospital as inpatients.
The Panel recommended the following:
• Remove CPT code 94660 from APC 0079 and create a new APC for this one procedure.
We proposed to accept the Panel's recommendation by creating a new APC 0065, CPAP Initiation. We have adopted this change in this final rule.
APC 0094: Resuscitation and Cardioversion
We requested the Panel's assistance in determining whether it is clinically appropriate to remove the cardioversion procedures from APC 0094 because the rest of the procedures assigned to APC 0094 are emergency procedures rather than elective. We proposed that the Panel consider the creation of a new APC for the cardioversion procedures or reassignment of the procedures to another APC that would be more appropriate in terms of clinical coherence and resource similarity. Splitting APC 0094 into two distinct groups, one for resuscitation procedures and the other for internal and external electrical cardioversion procedures, would not result in a significant difference in the APC payment rate for either of the new APCs.
The Panel recommended that the only action we take would be to move CPT code 92961, Cardioversion, elective, electrical conversion of arrhythmia; internal (separate procedure) from APC 0094 to APC 0087, Cardiac Electrophysiology Recording/Mapping.
We proposed to accept the APC Panel recommendation. We are adopting this change as final.
APC 0102: Electronic Analysis of Pacemakers/Other Devices
The neurologic procedures included in APC 0102 (CPT codes 95970 through 95975), are significantly more complex than the routine cardiac pacemaker programming codes also assigned to this APC. Because we believe these codes are clinically different, we asked the Panel to consider the following:
• Create a new APC for the neurologic codes.
• Move the neurologic codes to APC 0215, Level I Nerve and Muscle Tests.
The Panel recommended the following reorganization of APC 0102 to better reflect clinical coherence:
• Split APC 0102 into four new APCs: one APC for analysis and programming of infusion pumps and CSF shunts; a second for analysis and programming of neurostimulators; a third for analysis and programming of pacemakers and internal loop recorders; and a fourth for analysis and programming of cardioverter-defibrillators.
We proposed to accept the Panel's recommendations and proposed to create four new APCs as follows:
APC 0689: Electronic Analysis of Cardioverter-Defibrillator
APC 0690: Electronic Analysis of Pacemakers and Other Cardiac Devices
APC 0691: Electronic Analysis of Programmable Shunts/Pumps
APC 0692: Electronic Analysis of Neurostimulator Pulse Generators.
We have made these changes final in this rule.
APC 0110: Transfusion
APC 0111: Blood Product Exchange
APC 0112: Extracorporeal Photopheresis
The procedures included in APC 0110 are those related only to the services associated with performing the blood transfusion and monitoring the patient during the transfusion; the costs associated with the blood products themselves are not included in APC 0110. We advised the Panel that we were not certain that cost data for blood transfusions excluded the costs of the blood products because the APC 0110 median cost of $289 seemed excessive. We expressed concern about hospital coding and billing practices for blood products, blood processing, storage, and transportation charges as represented in the 1996 data. We asked the Panel to advise us on how to clarify hospital billing and coding practices for blood transfusions; we also asked if the Panel members believe that the median costs for transfusion procedures include the costs for blood products and, if so, how the procedures should be adjusted to eliminate these costs.
After considerable discussion, the Panel recommended the following:
• Take no action on APC 0110.
• Move CPT code 36521 from APC 0111 to APC 0112 to achieve clinical coherence and resource similarity with photopheresis procedures included in APC 0112. However, the Panel cautioned that the payment for APC 0112 captured the cost of the entire procedure including the cost of the adsorption column. For this reason, any additional payment for the adsorption column through the transitional pass-through payment mechanism will be a duplicate payment. Therefore, the Panel asked that CMS address this problem when considering their recommendation.
We proposed to accept the Panel's recommendations. We noted that effective April 1, 2001, the Prosorba column is no longer eligible for a transitional pass-through payment (see PMA-01-40 issued on March 27, 2001).
We have adopted the proposed changes in final in this document.
APC 0116: Chemotherapy Administration by Other Technique Except Infusion
APC 0117: Chemotherapy Administration by Infusion Only
APC 0118: Chemotherapy Administration by Both Infusion and Other Technique
Based on previous comments we had received, we asked the Panel to review whether oral delivery of chemotherapy and delivery of chemotherapy by infusion pumps and reservoirs should be recognized for payment under the OPPS.
In summary, the Panel recommended the following:
• Allow hospitals to bill for patient education on the administration of oral anticancer agents under the appropriate clinic codes.
• Assign CPT codes 96520 and 96530 to a new APC.
• Continue to use the current HCPCS Level II Q codes for chemotherapy administration.
• There is no need to develop a new HCPCS code for “extended chemotherapy infusions.”
• CMS should consider developing a new HCPCS code for flushing of ports and reservoirs.
We proposed to accept all the Panel's recommendations except for the recommendation regarding flushing of ports and reservoirs. Flushing is performed in conjunction with either a chemotherapy administration service or an outpatient clinic visit. In the first case, flushing is part of the chemotherapy administration and its costs are adequately captured in the costs of the chemotherapy administration code. In the second case, we believe that the costs of flushing are adequately captured in the costs of the clinic visit and need not be paid separately. We proposed to create a new APC 0125, Refilling of Infusion Pump.
We are adopting these changes as final in this rule.
APC 0123: Bone Marrow Harvesting and Bone Marrow/Stem Cell Transplant
In APC 0123, the 1996 median cost for CPT code 38230, Bone marrow harvesting for transplantation, was only $15. We believe that this cost is lower than the actual cost of the procedure. Further, we do not have sufficient data to determine how often bone marrow and stem cell transplant procedures are performed on an outpatient basis. For these reasons, we requested the Panel's advice in clarifying the resources used in performing the procedures assigned to APC 0123, and the extent to which these procedures are performed on an outpatient basis.
The Panel recommended the following:
• Make no changes in the procedures assigned to APC 0123 in the absence of sufficient data to support such modifications.
• The two presenters on this APC issue should submit cost data for the Panel to use in reevaluating this issue at its 2002 meeting.
We noted in the proposed rule that our analysis of the more recent claims data we are using to reclassify and recalibrate the APCs reveals a significant increase in costs for this APC resulting in a payment rate that is double the current rate. However, very few procedures (fewer than 20) were billed on an outpatient basis. As we indicated in the proposed rule, we will have the Panel review this APC again at their next meeting.
APC 0142: Small Intestine Endoscopy
APC 0143: Lower GI Endoscopy
APC 0145: Therapeutic Anoscopy
APC 0147: Level II Sigmoidoscopy
APC 0148: Level I Anal/Rectal Procedures
APC 0149: Level II Anal/Rectal Procedures
APC 0150: Level III Anal/Rectal Procedures
We presented these seven APCs to the Panel because of the inconsistencies in the median costs for some procedures included in APCs 0142, 0143, 0145, and 0147. We advised the Panel that our cost data do not show a progression of median costs proportional to increases in clinical complexity as we would expect. For example, the data indicate that a therapeutic anoscopy assigned to APC 0145 costs more than twice as much as a flexible or rigid sigmoidoscopy assigned to APC 0147. We stated our concern that cost disparity could provide incentives to use inappropriate procedures. Because of these concerns, we asked the Panel's advice in determining whether one of the following actions should be taken:
• Divide the codes in APC 0142 into separate APCs representing ileoscopy and small intestine procedures.
• Combine diagnostic anoscopy and Level I sigmoidoscopy.
• Merge APCs 0143, 0145, and 0147 into one APC.
We also asked the Panel whether the costs associated with codes in APC 0145 appeared to be valid.
The Panel recommended that we do the following:
• Make no changes to APCs 0142, 0143, 0145, and 0147.
• Provide information and guidance to better assist hospitals in understanding how to bill appropriately for services included in APCs 0142, 0143, 0145, and 0147.
• Resubmit these APCs to the Panel for review when newer data are available.
We proposed to accept the Panel's recommendations.
We have adopted these recommendations in this final rule.
APC 0151: Endoscopic Retrograde Cholangio-Pancreatography (ERCP)
We advised the Panel that we have received comments that indicate that it is inappropriate to assign both diagnostic and therapeutic ERCP procedures to the same APC. The commenters allege that virtually every hospital performs diagnostic ERCPs but only teaching hospitals perform therapeutic ERCPs. Based on our current data, if we created two APCs for ERCP procedures, the APC payment rate for therapeutic ERCPs would be lower than that for diagnostic ERCPs (approximately $526 and $535, respectively). Therefore, we requested the Panel's advice to help us determine whether to create separate APCs for diagnostic and therapeutic ERCP procedures.
The Panel recommended that we do the following:
• Do not reconfigure the ERCP procedures in APC 0151.
• Resubmit this issue to the Panel for review when more recent data are available.
• Explore the feasibility of using multiple claims rather than single claims to calculate appropriate APC payment rates for ERCP procedures.
We proposed to accept the Panel's recommendations. As we stated in the proposed rule, we are reviewing the potential for using multiple claims data for determining payment rates for ERCP procedures. As a first step in the process, in the proposed rule, we determined a payment rate for ERCP procedures based on both single claims for ERCP procedures and, because ERCP procedures are typically done under radiologic guidance, on claims that included both an ERCP procedure and a radiologic supervision or guidance procedure in this APC. We
accomplished this by changing the status indicator for radiologic guidance and supervision codes to “N”, which results in these codes being packaged. Using these additional claims resulted in significantly increasing the number of claims used to determine the payment rate for this APC and in a much higher payment rate (about $780 in this final rule).
We will be presenting this issue again to the APC Panel at their next meeting.
APC 0160: Level I Cystourethroscopy and other Genitourinary Procedures
APC 0161: Level II Cystourethroscopy and other Genitourinary Procedures
APC 0162: Level III Cystourethroscopy and Other Genitourinary Procedures
APC 0163: Level IV Cystourethroscopy and Other Genitourinary Procedures APC 0169: Lithotripsy
We advised the Panel that we had previously received a number of comments that advocated moving CPT code 52337, Cystoscopy, with ureteroscopy and/or pyeloscopy; with lithotripsy (ureteral catheterization is included), from APC 0162 to APC 0163. (We note that CPT code 52337 was deleted for 2001 and replaced with an identical CPT code, 52353. We will use the new code in the following discussion.) Because of these comments, we sought the Panel's advice in examining the clinical and resource distinctions between CPT code 52353 and other procedures assigned to APC 0162. Other information shared with the Panel noted that most of the procedures included in APC 0162 are complicated cystourethroscopies while those assigned to APC 0163 are largely prostate procedures.
The Panel recommended that we move CPT code 52353 from APC 0162 to APC 0169 because both codes 52353 and 50590 are lithotripsy procedures.
We reviewed the Panel discussion very carefully and noted the close vote. After careful consideration, we proposed to disagree with the Panel's recommendation and move code 52353 to APC 0163. The 1999-2000 cost data used for the proposed rule, which contained over 400 single claims for code 52353 (reported under code 52337) and over 6,000 single claims for code 50590, showed that the median cost for code 52353 is much more similar to the median cost of other procedures in APC 0163 than it is to the median cost of APC 0169. Although both codes involve lithotripsy, the type of equipment used in the two procedures is very different. Clinically, the surgical approach used for code 52353 and the resources used (e.g., anesthesia and operating room costs) are much more similar to other procedures in APC 0163 than to those for code 50590. Additionally, the median cost for code 50590, which was $700 higher than that of code 52353, is dependent on the widely variable arrangements hospitals make for use of the extracorporeal lithotriptor. Therefore, we believe that placing code 52353 in APC 0163 maintains its clinical coherence and similar use of resources.
Based on the updated 1999-2000 data base available for the final rule, we find that the cost relationship between codes 52353 and 50590 continues to reflect a difference. There are now almost 500 single claims for code 52353 and almost 7,000 single claims for code 50590. The median cost for 50590 remains about $700 higher than the median cost for code 52353. Therefore, we are adopting as final our proposal to move code 52353 to APC 0163.
APC 0191: Level I Female Reproductive Procedures
APC 0192: Level II Female Reproductive Procedures
APC 0193: Level III Female Reproductive Procedures
APC 0194: Level IV Female Reproductive Procedures
APC 0195: Level V Female Reproductive Procedures
This group of APCs was presented to the Panel because APC 0195 violates the 2 times rule. To facilitate the Panel's review of this issue, we distributed cost data on all the female reproductive procedures assigned to these five APCs. These data showed that the median costs for procedures assigned to APC 0195 ranged from a low of $365 to a high of $1,817. The CPT code 57288, Sling operation for stress incontinence (e.g., fascia or synthetic), which is assigned to APC 0195, has the highest median cost of the procedures in this group. We discussed with the Panel two clinical options for rearranging the procedures assigned to APC 0195 to comply with the 2 times rule. The first option would split APC 0195 into two separate APCs by separating vaginal procedures from abdominal procedures. The second option would split APC 0195 into three distinct APCs by retaining the separate APCs for abdominal and vaginal procedures and further distinguishing vaginal procedures based on whether they are simple or complex.
The Panel closely reviewed the four APCs for female reproductive procedures (APCs 0191, 0192, 0193, and 0194) to ensure each was clinically homogeneous. As a result of this review, the Panel recommended a number of changes for these APCs. These recommendations and those for APC 0195 are as follows:
• Move CPT codes 56350, Hysteroscopy, diagnostic, and 58555, Hysterosocopy, diagnostic/separate procedure, from APC 0191 to APC 0194 (In 2001, CPT code 56350 was replaced with CPT code 58555.)
• Divide APC 0195 into two APCs to distinguish vaginal procedures from abdominal procedures.
• Retain the following vaginal procedures in APC 0195:
CPT code
Descriptor
57555
Excision of cervical stump, vaginal approach: with anterior and/or posterior repair.
58800
Drainage of ovarian cyst(s), unilateral or bilateral, (separate procedure); vaginal approach.
58820
Drainage of ovarian abscess; vaginal approach, open.
57310
Closure of urethrovaginal fistula;
57320
Closure of vesicovaginal fistula; vaginal approach
57530
Trachelectomy (cervicectomy), amputation of cervix (separate procedure).
57291
Construction of artificial vagina; without graft.
57220
Plastic operation on urethral sphincter, vaginal approach (e.g., Kelly urethral plication).
57550
Excision of cervical stump, vaginal approach.
57556
Excision of cervical stump, vaginal approach; with repair of enterocele.
57289
Pereyra procedure, including anterior colporrhapy.
57300
Closure of rectovaginal fistula; vaginal or transanal approach.
57284
Paravaginal defect repair (including repair of cystocele, stress urinary incontinence, and/or incomplete vaginal prolapse).
57265
Combined anteroposterior colporrhaphy; with enterocele repair.
57268
Repair of enterocele vaginal approach (separate procedure).
56625
Vulvectomy simple; complete.
58145
Myomectomy excision of fibroid tumor of uterus, single or multiple (separate procedure); vaginal approach.
57260
Combined anteroposterior colporrhaphy;
57240
Anterior colporrhaphy, repair of cystocele with or without repair of urethrocele.
57250
Posterior colporrhaphy, repair of rectocele with or without perineorrhaphy.
56620
Vulvectomy simple; partial.
57522
Conization of cervix, with or without fulguration, with or without dilation and curettage, with or without repair; loop electrode excision.
• Include the following abdominal procedures in a new APC titled “Level VI Female Reproductive Procedures.”
CPT code
Descriptor
58920
Wedge resection or bisection of ovary, unilateral or bilateral.
58900
Biopsy of ovary, unilateral or bilateral (separate procedure).
58925
Ovarian cystectomy, unilateral or bilateral.
57288
Sling operation for stress incontinence (e.g., fascia or synthetic).
57287
Removal or revision of sling for stress incontinence (e.g., fascia or synthetic).
• Move CPT code 57107 from APC 0194 to APC 0195, Level V Female Reproductive Procedures.
• Move CPT code 57109, Vaginectomy with removal of paravaginal tissue (radical vaginectomy) with bilateral total pelvic lymphadenectomy and para-aortic lymph node sampling (biopsy), from APC 0194 to the new APC, Level VI Female Reproductive Procedures.
We proposed to accept all of these Panel recommendations. These APCs would be reconfigured and renumbered as APCs 0188 to 0194. We also proposed to add new APCs for Level VII and Level VIII Female Reproductive Procedures (APCs 0195 and 0202, respectively) based on the 1999-2000 claims data and the 2 times rule. These proposed changes have been adopted as final in this document.
APC 0210: Spinal Tap
APC 0211: Level I Nervous System Injections
APC 0212: Level II Nervous System Injections
The Panel heard testimony from two presenters regarding the merits of modifying these three APCs. The first presenter, speaking on behalf of a manufacturer, discussed a new code for 2001, CPT code 64614, Chemodenervation of muscles; extremities and/or trunk muscles (e.g., for dystonia, cerebral palsy, multiple sclerosis).
The second presenter, representing a specialty society, proposed regrouping the procedures assigned to APCs 0210, 0211, and 0212 based on similar levels of complexity and median costs. The presenter's proposal also included reassignment to these APCs of interventional pain procedures currently assigned to APCs 040, Arthrocentesis and Ligament/Tendon Injection, 0105, Revision/Removal of Pacemakers, AICD, or Vascular Device, and 0971. The presenter proposed establishing the following five levels of interventional pain procedures by regrouping the procedures into new APCs as stated below:
• Level I Nerve Injections (to include Trigger Point, Joint, Other Injections, and Lower Complexity Nerve Blocks):
CPT code
Reassigned
from APC
20550
040
20600
040
20605
040
20610
040
64612
0211
64613
0211
64614
0971
64400-64418
0211
64425
0211
64430
0211
64435
0211
64445
0211
64450
0211
64505
0211
64508
0211
• Level II Nerve Injections (to include Moderate Complexity Nerve Blocks and Epidurals):
CPT Code
Reassigned
from APC
27096
0210
62270
0210
62272
0210
62273
0212
62310-62319
0212
• Level III Nerve Injections (to include Moderately High Complexity Epidurals, Facet Blocks, and Disk Injections):
CPT Code
Reassigned
from APC
62280-62282
0212
62290
(
1
)
62291
(
1
)
64420-64421
0211
64470
0211
64472
0211
64475-64476
0211
64479
0211
64480
0211
64483-64484
0211
64510
0211
64520
0211
64530
0211
64630
0211
64640
0211
1
Currently packaged.
• Level IV Nerve Injections (to include High Complexity Lysis of Adhesions, Neurolytic Procedures, Removal of Implantable Pumps and Stimulators):
CPT Code
Reassigned from APC
62263
0212
64600
0211
64605
0211
64610
0211
64620
0211
64622-64623
0211
64626-64627
0211
64680
0211
62355
0105
62365
0105
• Level V Nerve Injections (to include Highest Complexity Disk and Spinal Endoscopies): CPT code 62287, Aspiration or decompression procedure, percutaneous, of nucleus pulposus of invertebral disk, any method, single or multiple levels, lumbar (e.g., manual or automated percutaneous diskectomy, percutaneous laser diskectomy), reassigned from APC 0220, Level I Nerve Procedures.
The Panel recommended reassignment of CPT code 64614 from APC 0971 to APC 0211.
Concerning the suggested regrouping of interventional pain procedures, the Panel agreed that the recommended division of these procedures by clinical complexity would reflect resource use and was a reasonable approach to take. It was pointed out to the Panel that the costs for CPT codes 62290, Injection procedure for diskography, each level; lumbar, and 62291, Injection procedure for diskography, each level; cervical or thoracic, were packaged into the procedures with which they were billed. Therefore, the Panel concurred with the regrouping of procedures to establish
Levels I, II, III, and IV with the following exceptions:
• The Panel recommended that we not include CPT codes 62290 and 62291 in Level III because they are packaged injections and should not be unpackaged and paid separately.
• The Panel opposed moving CPT codes 62355, Removal of previously implanted intrathecal or epidural catheter, and 62365, Removal of subcutaneous reservoir or pump, previously implanted for intrathecal or epidural infusion, from APC 0105 to Level IV Nerve Injections because they were neither clinically similar nor similar in resource use to the other codes assigned to this APC.
• The Panel opposed the creation of Level V Nerve Tests as it included only one code and recommended that CPT code 62287 remain in APC 220.
• We proposed to accept the Panel's recommendations for these services and we proposed to create new APCs 0203, 0204, 0206, and 0207 to accommodate these changes. We are adopting these proposed changes as final.
APC 0215: Level I Nerve and Muscle Tests
APC 0216: Level II Nerve and Muscle Tests
APC 0217: Level III Nerve and Muscle Tests
We advised the Panel that we had received a comment contending that assignment of CPT code 95863, Needle electromyography, three extremities with or without related paraspinal areas, to APC 0216 created an inappropriate incentive to perform tests on three extremities rather than two or four extremities. The payment of about $144 for APC 0216 is greater than the payment of about $58 for the same tests when performed on one, two, or four extremities. This is because CPT codes 95860, 95861, and 95864, Needle electromyography, one, two, and four extremities with or without related paraspinal areas, respectively, are assigned to APC 0215. We distributed data to the Panel that showed a median cost of about $141 for CPT code 95863, which is more than 3 times that of the median cost of $41 for CPT code 95864. We asked the Panel to consider the reassignment of CPT code 95863 from APC 0216 to APC 0215 and advised the Panel that, based on cost data available at the time of our meeting, this change could potentially reduce the payment for APC 0216. It was also noted that this change could result in a payment increase for APC 0215.
The Panel reviewed the cost data for APCs 0215 and 0216 and noted that the median costs for both CPT codes 95863 and 95864 appeared aberrant. Based on the information presented, the Panel recommended that we move CPT code 95863 from APC 0216 to APC 0215. We proposed to accept the Panel's recommendation with one exception. We proposed to revise these APCs based on the 1999-2000 cost data and the 2 times rule, and CPT code 95863 would be assigned to a reconfigured APC for Level II Nerve and Muscle Tests (APC 0218).
The changes we proposed to APCs 0215, 0216, and 0217 have been adopted as final in this document.
APC 0237: Level III Posterior Segment Eye Procedures
We advised the Panel that procedures assigned to APC 0237 are high volume procedures and rank among the top outpatient procedures billed under Medicare. We have received a number of comments disagreeing with the assignment of CPT code 67027, Implantation of intravitreal drug delivery system (e.g., ganciclovir implant), includes concomitant removal of vitreous, to APC 0237. This procedure was added to the CPT coding system after 1996 and, therefore, was not included in the 1996 data. We advised the Panel that ganciclovir, the drug implanted during this procedure, is paid separately as a transitional pass-through item. Because the drug is paid separately, it should not be included in determining whether the resources associated with the surgical procedure are similar to the resources required to perform the other procedures assigned to APC 0237. We advised the Panel that, of the procedures assigned to APC 0237, we believe that CPT code 67027 is related to codes 65260, 65265, and 67005, all of which involve removal of foreign bodies and vitreous from the eye. To ensure that CPT code 67027 is assigned to the appropriate APC, we asked the Panel to consider creation of a new APC, Level IV Posterior Segment Eye Procedures, for CPT codes 65260, 65265, 67005, and 67027. Based on the APC rates effective January 1, 2001, the suggested change could lower the APC rate for the four procedures by $400.
The Panel reviewed the data and did not believe it was sufficient to support the creation of a new APC for these four procedures. Therefore, the Panel recommended that APC 0237 remain intact and that more recent claims data be analyzed to determine whether CPT code 67027 is similar to the other procedures assigned to APC 0237.
Based on the 1999-2000 claims data, we have determined that the resources used for code 67027 are similar to other procedures in APC 0237. However, we will present APCs 0235, 0236, and 0237 to the Panel at their next meeting to determine whether any further changes should be made. We proposed to make various other changes to these APCs based on the new data and the 2 times rule, which we are incorporating as final in this document.
APC 0251: Level I ENT Procedures
This APC violates the 2 times rule because it consists of a wide variety of minor ENT procedures, many of which are low volume services or codes for nonspecific procedures. In order to correct this problem, we recommended to the Panel that this APC be split by surgical site (for example, nasal and oral). After reviewing cost data, the Panel agreed that the APC should be split but that current data were insufficient to determine how that split should be made. Therefore, the Panel asked that this APC, along with more recent cost data, be placed on the agenda at the next meeting.
We agree that this APC should be reviewed by the Panel at its next meeting. However, our review of the more recent cost data indicates that significant violations of the 2 times rule still exist. In order to correct this problem, but keep the APC as intact as possible, we proposed to move CPT codes 30300, Remove foreign body, intranasal; office type procedure, 40804, Removal of embedded foreign body, vestibule of mouth; simple, and 42809, Removal of foreign body from pharynx, to APC 0340, Minor Ancillary Procedures. This APC consists of procedures such as removal of earwax that require similar resources. Based on the latest 1999-2000 data, we find that the reasons for our proposed revision are still valid, therefore, we have incorporated those changes as final in this rule.
APC 0264: Level II Miscellaneous Radiology Procedures
We asked the Panel to review this APC because it violated the 2 times rule and consisted of a wide variety of unrelated procedures. Specifically, we believe that the costs associated with CPT codes 74740, Hysterosalpingography, radiological supervision and interpretation, and 76102, Radiologic examination, complex motion (e.g., hypercycloidal) body section (e.g., mastoid polytomography), other than with urography; bilateral, were aberrant and that we would significantly underpay these procedures if we moved them into a lower paying APC. We also asked the Panel to determine whether this APC
and APC 0263, Level I Miscellaneous Radiology Procedures, should be reconfigured by body system.
After considerable discussion, the Panel agreed that the procedures in these APCs were not clinically homogeneous; however, it recommended that we leave these APCs intact because the data do not support any more coherent reorganization. The Panel requested that this APC be placed on the agenda for the 2002 meeting.
We stated in the proposed rule that we agreed with the Panel's recommendations with the following revisions. First, BIPA requires us to assign procedures requiring contrast into different APCs from procedures not requiring contrast. This required changes to a number of radiologic APCs including APCs 0263 and 0264. In addition, we proposed to move CPT code 75940, Percutaneous Placement of IVC filter, radiologic supervision and interpretation, to a new APC 0187, Placement/Reposition Miscellaneous Catheters, because its costs were significantly higher than the costs of the procedures remaining in APC 0264.
We are adopting the changes discussed in the proposed rule as final. However, as discussed in a comment and response below in section II.A.3 of this preamble, we are revising the title and status indicator for APC 0187.
APC 0269: Echocardiogram Except Transesophageal
APC 0270: Transesophageal Echocardiogram
We asked the Panel to consider splitting these APCs based on whether or not 2D imaging is employed. After review of the data, the Panel recommended that we leave these APCs intact.
We proposed to leave APC 0270 intact except for the addition of two new codes for transesophageal echocardiography. We also proposed to split APC 0269 into two APCs, APC 0269, Level I Echocardiogram Except Transesophageal and APC 0697, Level II Echocardiogram Except Transesophageal. One APC (0269) would include comprehensive echocardiograms and the other APC (0697) would include limited/follow-up echocardiograms and doppler add-on procedures.
We have included these proposed changes in the APCs set forth in this final rule.
APC 0274: Myelography
We advised the Panel that APC 0274 is clinically homogeneous but that it violates the 2 times rule. Procedures assigned to this APC include radiological supervision and interpretation of diagnostic studies of central nervous system structures (e.g., spinal cord and spinal nerves) performed after injection of contrast material. We shared data with the Panel that showed the median costs for the procedures assigned to this APC ranged from a low of about $109 to a high of about $295. We asked the Panel's recommendation for reconfiguring APC 0274 to comply with the 2 times rule.
We informed the Panel members that we packaged the costs associated with radiologic injection codes into the radiological supervision and interpretation codes with which they were reported. The reason for doing this is that hospitals incur expenses for providing both services and they typically perform both an injection and a supervision and interpretation procedure on the same patient. Therefore, since neither an injection code nor a supervision and interpretation code should be billed alone, it would not be appropriate for us to use single claims data to determine the costs of performing these procedures. However, we are using single claims data in order to accurately determine the costs of performing procedures. Therefore, in order to accurately determine the costs of a complete radiologic procedure, we had to package the costs of the injection component into the cost of the supervision and interpretation component with which it was billed.
The Panel recommended the following:
• Make no changes to APC 0274.
• Review new cost data to determine whether payment would increase for APC 0274.
We proposed to accept the Panel's recommendation. We have made no further changes in this APC.
APC 0279: Level I Diagnostic Angiography and Venography
APC 0280: Level II Diagnostic Angiography and Venography
We presented these codes to the Panel for several reasons. APC 0279 violates the 2 times rule, there are numerous codes in these APCs with no cost data, there are numerous “add on” codes in these APCs, and many of these procedures were performed infrequently in the outpatient setting in 1996.
The Panel recommended the following:
• Create a new APC (APC 0287, Complex Venography) with the following CPT codes: 75831, 75840, 75842, 75860, 75870, 75872, and 75880.
• Move CPT codes 75960, 75961, 75964, 75968, 75970, 75978, 75992, and 75995 from APC 0279 to APC 0280.
We proposed to accept the Panel's recommendations. We noted that, as proposed, APC 0279 violated the 2 times rule because of the low cost data for CPT code 75660, Angiography, external carotid, unilateral selective, radiological supervision and interpretation. We believe that, for these procedures, these cost data are aberrant. This code is clinically similar to the other codes in APC 0279 and moving code 75660 to an APC with a lower weight could be an inappropriate APC assignment. Therefore, we stated in the proposed rule that we believe that an exception to the 2 times rule is warranted.
We are adopting the proposed changes as final. We note that APC 0279 continues to violate the 2 times rule due to the median cost of CPT code 75660. However, we continue to believe an exception is warranted.
APC 0300: Level I Radiation Therapy
APC 0302: Level III Radiation Therapy
As discussed in the proposed rule, we presented this APC to the technical advisory Panel because we had received comments that the assignment of CPT code 61793, Stereotactic radiosurgery (particle beam, gamma ray, or linear accelerator), one or more sessions, to APC 0302 would result in inappropriate payment for this service. Many commenters wrote that stereotactic radiosurgery and intensity modulated radiation therapy (IMRT) required significantly more staff time, treatment time, and resources than other types of radiation therapy. Other commenters disagreed with our decision, effective January 1, 2001, to discontinue recognizing CPT code 61793, and to create two HCPCS level 2 codes, G0173, Stereotactic radiosurgery, complete course of therapy in one session, and G0174, Intensity modulated radiation therapy (IMRT) plan, per session, to report both stereotactic radiosurgery and IMRT.
We reported to the Panel that the APC assignment of these G codes and their payment rate was based on our understanding that stereotactic radiosurgery was generally performed on an inpatient basis and delivered a complete course of treatment in a single session, while IMRT was performed on an outpatient basis and required several sessions to deliver a complete course of treatment. We also explained to the Panel that it was our understanding that multiple CPT codes were billed for each session of stereotactic radiosurgery and
IMRT. Therefore, we believed that the payment for APC 0302 was only a fraction of the total payment a hospital received for performing stereotactic radiosurgery or IMRT on an outpatient basis.
Radiosurgery equipment manufacturers, physician groups, and patient advocacy groups submitted comments and provided testimony to the APC Panel on these issues. These comments convinced us that we did not clearly understand either the relationship of IMRT to stereotactic radiosurgery or the various types of equipment used to perform these services.
We proposed a new coding structure to more accurately reflect the clinical use of these services and the resources required to perform them. In the proposed rule, we stated that there are essentially two services required to deliver stereotactic radiosurgery and IMRT. First, there is “treatment planning,” which includes such activities as determining the location of all normal and abnormal tissues, determining the amount of radiation to be delivered to the abnormal tissue, determining the dose tolerances of normal tissues, and determining how to deliver the required dose to abnormal tissue while delivering a dose to adjacent normal tissues within their range of tolerance. We noted that planning activities include the ability to manufacture various treatment devices for protection of normal tissue as well as the ability to ensure that the plan will deliver the intended doses to normal and abnormal tissue by simulating the treatment. Second, there is “treatment delivery,” which is the actual delivery of radiation to the patient in accordance with the treatment plan and includes such activities as adjusting the collimator (a device that filters the radiation beams), doing setup and verification images, treating one or more areas, and performing quality control.
We noted that treatment planning for IMRT requires specialized equipment including a duplicate of the actual equipment used to deliver the treatment, the ability to perform a CT scan, various disposable supplies, and involvement of various staff such as the physician, the physicist, the dosimetrist, and the radiation technologist. Treatment delivery requires specialized equipment to deliver the treatment and the involvement of the radiation technologist. The physician and physicist provide general oversight of this process.
Our proposal stated that although there are several types of equipment, produced by several manufacturers, used to accomplish this treatment, it was the consensus of the commenters and the Panel that the most useful way to categorize stereotactic radiosurgery and IMRT is by the source of radiation used for the treatment and not by the type of equipment used. One reason for this is that the clinical indications for stereotactic radiosurgery and IMRT overlap. Therefore, a single disease process can be treated by either modality but the cost of treatment varies by source of radiation used for the treatment. Second, while both stereotactic radiosurgery and IMRT can deliver a complete course of treatment in either one or multiple sessions, the cost of treatment delivery per session is relatively fixed, and is closely related to the source of radiation used for the treatment. On the basis of this understanding we made the following proposal: Appropriate APC assignment and payment were to be made by creating four HCPCS codes to describe these services.
The proposed codes are as follows:
• GXXX1 Multi-source photon stereotactic radiosurgery (Cobalt 60 multi-source converging beams) plan, including dose volume histograms for target and critical structure tolerances, plan optimization performed for highly conformal distributions, plan positional accuracy and dose verification, all lesions treated, per course of treatment.
• GXXX2 Multi-source photon stereotactic radiosurgery, delivery including collimator changes and custom plugging, complete course of treatment, per lesion.
• G0174 Intensity modulated radiation therapy (IMRT) delivery to one or more treatment areas, multiple couch angles/fields/arcs custom collimated pencil-beams with treatment setup and verification images, complete course of therapy requiring more than one session, per session.
• G0178 Intensity modulated radiation therapy (IMRT) plan, including dose volume histograms for target and critical structure partial tolerances, inverse plan optimization performed for highly conformal distributions, plan positional accuracy and dose verification, per course of treatment.
We also proposed that HCPCS codes GXXX1, G0174, and G0178 have status indicators of S, while GXXX2 has a status indicator of T. We believe these are the correct status indicators because G0178 has a “per session” designation, while GXXX2 has a “per lesion” designation. This was based on our understanding that GXXX1 would not be billed on a “per lesion” basis as the planning process would take into account all lesions being treated and it would be extremely difficult to determine resource utilization for planning on a “per lesion” basis. Because the costs of performing GXXX1 will vary based on the number of lesions treated, payment would reflect a weighted average.
We based our proposal on our understanding that single-source photon stereotactic radiosurgery (or linear accelerator) planning and delivery are similar to IMRT planning and delivery in terms of clinical use and resource requirements. Therefore, we proposed to require coding for single-source photon stereotactic radiosurgery under HCPCS codes G0174 and G0178.
We also noted that the AMA is establishing codes for IMRT planning and treatment delivery for 2002 and we proposed to retire G0174 and G0178 (with the usual 90-day phase out) and recognize the applicable CPT codes when they are established in January 2002.
Because all activities required to perform stereotactic radiosurgery and IMRT were to be included in the codes described above, we proposed to discontinue the use of any other radiation therapy codes for activities involved with planning and delivery of stereotactic radiosurgery and IMRT for purposes of hospital billing in OPPS. Therefore, we also proposed continuing to not recognize CPT code 61793 for hospital billing purposes.
We believed that our proposal would not only simplify the reporting process for hospitals, but also appropriately recognize the clinical practice and resource requirements for stereotactic radiosurgery and IMRT.
We sought comments on our proposal, including the code titles, descriptors, and coding requirements discussed above. We also requested information regarding appropriate APC assignment and payment rates to inform our decision-making. We specifically asked for information regarding the costs of treatment delivery including any differences between the cost of a complete treatment in single versus multiple sessions.
Finally, we noted that several commenters had requested placement of the stereotactic delivery codes in surgical APCs, therefore, we requested clarification and support for these comments within the context of our coding proposal. Specifically, we were concerned that appropriate payment be made for GXXX2, which has a “per lesion” descriptor.
We received numerous comments on our proposal. These comments concerned our proposed coding scheme
and payment amounts as well as the need for separate codes recognizing linear accelerator-based radiosurgery. Many of the comments were part of a write-in campaign asking us to categorize radiosurgery as a surgical procedure and not a radiologic procedure. These letters also asserted that our payment amount for stereotactic radiosurgery should be $15,000. Below, we address each major issue raised by the commenters.
Comment:
We received several comments regarding our coding proposal. The commenters indicated the following:
• Our proposed codes are duplicative of currently existing codes.
• We should recognize CPT code 61793 in the APC system.
• Our proposed codes would not allow billing for single session and fractionated linear accelerator-based radiosurgery.
• We incorrectly believe that multisession radiosurgery is similar in resource use to IMRT.
• We should delete our proposed codes for stereotactic radiosurgery planning and recognize CPT code 77295 for this purpose.
• CMS should clarify the other codes that would be billable with our proposed codes.
• Conflicting comments on whether the proposed code for stereotactic radiosurgery delivery should be “per lesion” or “per session” or “per course of treatment.”
Commenters were also concerned about our ability to establish APC weights using claims that contained two significant procedures (e.g., stereotactic radiosurgery planning and stereotactic radiosurgery delivery).
Response:
We reviewed all these comments very carefully. After completing our review, we have decided to make the following modifications to our proposed coding scheme:
• IMRT—We are not making any changes to our proposal for IMRT coding. We will delete the applicable G codes (G0174 and G0178) and recognize the new CPT codes for IMRT planning (code 77301) and IMRT delivery (code 77418) as established by the AMA.
• GXXX1—Under our proposal, GXXX1 (now G0242) would have been used only for Cobalt-based radiosurgery. After review of the comments, we believe that the planning for Cobalt-based and linear accelerator-based radiosurgery is similar both clinically and in terms of resource consumption. Therefore, at the next coding update, we will change the descriptor for this code to include linear accelerator-based radiosurgery planning. We do not know whether radiosurgery planning is similar clinically and in terms of resource consumption to CPT code 77295 (therapeutic radiology simulation-added field setting; three-dimensional). Use of G0242 will allow us to collect claims data and cost information that will aid us in determining whether G0242 is similar in resource use to 77295. However, we believe that tracking the utilization of G0242 as well as the codes with which it is submitted is very important for future APC reclassification and recalibration purposes, therefore, at this time, we do not intend to discontinue use of this code.
• GXXX2—Most of the comments concerned whether this code (now G0243) should be “per lesion.” After extensive review of the comments, we have determined that it is more appropriate for this code to be used “per session” or “per course of treatment.” We have concluded that the resource consumption for stereotactic treatment delivery varies significantly depending on the size, shape, and depth of the lesion(s) being treated. It is quite possible for the treatment of two superficial, spherical lesions to be less resource intensive than the treatment of a single, large, irregular lesion deep within the brain. Furthermore, the method of treatment and the manner in which the resources are used make a “per lesion” description inappropriate. For example, in Cobalt-based treatment, patients are administered “spheres of dose” and moved in and out of the machine after each “sphere of dose.” The number of “spheres of dose” per lesion varies widely so therefore “per sphere of dose” might be an alternative description for this service. However, we have concluded that any descriptor other than “per session” or “per course of treatment” will result in, or create the incentive to bill for, inappropriate payments for this service. Furthermore, it is our understanding that hospitals usually have a single charge for this service and that charge is based on the average resource use for all patients undergoing the procedure whether those patients have one, two, or more lesions treated. Because of the variability of treatment delivery per lesion, hospitals would be overpaid for multi-lesion patients if their charge is based on the average resource use over all patients. Finally, a “per session” description is more consistent with a prospective payment system. Because a “per session” payment reflects an average that includes all patients, unless a hospital specializes in treatment of multi-lesion patients, the OPPS payment is likely to be appropriate across all patient types. That is, the payment will be slightly higher than costs for single lesion treatments, and slightly lower than costs for multiple lesion treatments, averaging out over all patients.
• Linear accelerator-based radiosurgery—This treatment poses an especially difficult problem because linear accelerator-based radiosurgery can be delivered in a single dose like Cobalt-based treatment, or it can be delivered in fractions, with a maximum of five fractions. We do not have any cost information concerning the resource use of linear accelerator-based treatment delivery, but we do understand that there are two types of linear accelerator-based delivery of radiosurgery: “gantry-based” and “image-directed.” We do not know if the resource use of these two subtypes of linear accelerator based-radiosurgery is similar. Furthermore, we do not know whether the total resource consumption of fractionated radiosurgery delivered from a linear accelerator is different from the resource consumption of single dose radiosurgery delivered by a linear accelerator.
Therefore, in order to collect data on this procedure, we will designate current code G0173 for reporting single session radiosurgery delivered by a linear accelerator, either gantry-based or image-directed. At the next coding update, we will revise the descriptor for G0173 to reflect this change. Additionally, at the next coding update, we will create a new G code for use by facilities for fractionated radiosurgery delivered by a linear accelerator (either gantry-based or image-directed). The number of fractions will be limited to no more than five. Both G0173 and the new code for fractionated linear accelerator-based radiosurgery will be temporary while we collect cost and utilization data for these services. Once we have collected these data, we will determine whether permanent codes are needed.
In general, we have tried to strike a balance between recognizing clinically dissimilar treatments with individual codes and avoiding the creation of equipment-specific codes for purposes of the OPPS. We believe that the codes established in this final rule reflect this balance.
For multiple procedure claims, we do not believe there is a problem recognizing claims with more than one significant procedure to assist us in determining appropriate APC weights. We have analyzed all the claims in the 1999-2000 data base for CPT code 61793 to determine the codes with which it was billed and in what
frequencies. We have developed coding edits based on this claims analysis and, as discussed below, the payments for stereotactic radiosurgery reflect the median costs for all services that will be included in the payment for stereotactic radiosurgery planning and delivery. We have discussed these coding edits in great detail with the American Society for Therapeutic Radiology and Oncology (ASTRO) and they concur with the edits.
Comment:
Many commenters asked us to place stereotactic radiosurgery in a “surgical” APC.
Response:
We do not understand these comments. We realize that a neurosurgeon is present during stereotactic radiosurgery but, unlike the hospital inpatient PPS, we have no APC designation of “surgical.” We have interpreted this comment to mean that commenters do not want stereotactic radiosurgery to be in the same APC as IMRT or fractionated stereotactic radiosurgery. As discussed below, our new assignments of the codes to APCs will effectively create this change.
Comment:
We received numerous comments concerning the status indicators we had proposed for the various radiosurgery procedures.
Response:
In view of the change in the descriptor for G0243, we will be changing the status indicator for G0243 to “S.” This is because there will not be multiple units of this service billed and the costs for providing single dose stereotactic radiosurgery is relatively fixed and it would be inappropriate to give this procedure, as finalized, a “T” designation (that is, the multiple procedure reduction is not applicable).
Comment:
Many comments addressed the payment rate for stereotactic radiosurgery and IMRT. Suggested amounts for payment of IMRT treatment planning and delivery varied from less than $300 to over $2,000 and suggested amounts for radiosurgery planning and treatment ranged from less than $1,000 to $15,000.
Response:
We have no cost data specifically associated with IMRT upon which to base payment for IMRT. Therefore, we used information that provided the basis for IMRT payment under the physician fee schedule and we have established APC assignments that result in payment rates for IMRT planning and treatment delivery similar to payment under the physician fee schedule. We believe this is appropriate because the resource use for these procedures is similar in freestanding facilities and in hospitals. Because we have no claims data on the costs of IMRT, these procedures will be assigned to new technology APCs. As cost data are incorporated in the OPPS claims data base, they will be used to recalibrate the payment for these services and determine their future APC assignment. We would note that payment for IMRT planning includes payment for the following CPT codes: 77300, 77280-77295, 77305-77321. The only CPT codes that may be billed in addition to G0242 (IMRT planning) are the CPT codes 72332-72334 for treatment devices. We plan to incorporate the costs of those codes into IMRT planning when we have collected the cost data. The APC assignment for G0242 is APC 0714, New Technology—IX ($1250-$1500).
In order to determine appropriate payment amounts for both planning and treatment of stereotactic radiosurgery, we did an extensive analysis of our claims data base for code 61793 because that was the code used for stereotactic radiosurgery during 1999-2000. We collected all claims for 61793 and determined which CPT codes were billed with 61793 and the frequency with which each of those codes was billed with 61793. Within the subset of claims including CPT code 61793, we determined the median costs for 61793 and for each CPT code billed with 61793. In analyzing these claims, it was clear that 61793 was generally used to bill for treatment delivery and other codes were used, in combination, to bill for treatment planning. For example, 61793 was billed with 77300 on 57 percent of the claims, with either 77295 or 77290 on 62 percent of the claims, with either 77370 or 77336 on 77 percent of the claims (occasionally both of these codes were on the same claim), and with either 77305, 77315, or 77321 on 59 percent of the claims.
Based on these data, we have determined the total cost for stereotactic radiosurgery as follows: For stereotactic radiosurgery planning, we added the median costs (when billed with 61793) of 77295 (the most typical simulation code billed with 61793), 77300, 77370 (the most common physics consult billed with 61793), and 77315 (the most common dose plan billed with 61793) and will use the sum of these medians as the basis for our APC assignment for 2002. The medians of these codes are: $134.06 for 77300; $146.97 for 77370; $955.88 for 77295; and $206.56 for 77315. The total median cost for these codes is $1,443.47. Effective for services furnished on or after January 1, 2002, we will no longer allow these codes to be billed with stereotactic radiosurgery. No other codes were billed frequently enough with 61793 to justify including their costs in our stereotactic radiosurgery planning code. However, treatment device codes (77332-77334) were billed with 61793 on 42 percent of the claims, so we will allow one of those codes to be billed with each claim for stereotactic radiosurgery. We will consider incorporating their costs into the payment for stereotactic radiosurgery in the future. We note that the median cost of 77334 (the most common treatment device code billed with 61793) was $174.27 when it was billed with 61793.
CPT Code 20660, application of cranial tongs, caliper, or stereotactic frame, including removal (separate procedure), was billed with 61793 on only 23 percent of the claims. Because 20660 is required in order to perform stereotactic radiosurgery treatment, we will package the costs associated with 20660 into G0243, the radiosurgery treatment delivery code. We also note that 61793 was billed with an MRI of the brain on 71 percent of the claims. We will allow CTs and MRIs to be billed in addition to stereotactic radiosurgery planning.
For stereotactic radiosurgery delivery, we determined that the median cost of 61793 (using all claims) was $5,734.22 and will use that amount as the basis for our APC assignment for stereotactic radiosurgery for 2002. No other radiotherapy treatment code was billed frequently enough with 61793 to justify incorporation of its cost into our payment (that is, the treatment code most commonly billed with 61793 was 77470 (33 percent of the claims) and the next most common was 77412 (6 percent of the claims)). We will not allow billing of any other radiation treatment delivery codes with stereotactic radiosurgery treatment.
Therefore, we are assigning G0243 to APC 0721, New Technology—XVI ($5,000 to $6,000).
We will pay the same amount for linear accelerator-based stereotactic radiosurgery as for multiple source-based radiosurgery. For fractionated linear accelerator-based radiosurgery, we will divide the payment for single session radiosurgery by five and allow up to five payments. This will make total payment for fractionated linear accelerator based radiosurgery similar to linear accelerator-based single dose radiosurgery while allowing us to collect cost and utilization data for setting payments in 2003. Note that because application of a stereotactic frame is not required for linear accelerator-based radiosurgery, we will not be packaging the costs of code 20660 into the costs for linear accelerator-based radiosurgery.
Linear accelerator-based radiosurgery planning will be coded with the same
code as multiple source-based radiosurgery; therefore, the APC assignment will be the same as well. We note that all of these codes associated with radiosurgery are assigned to new technology APCs as we have no claim data on the procedures. Once we have collected data, the procedures will be assigned to other APCs.
The final APC assignments are as follows:
• 77301 is assigned to APC 0712
• 77418 is assigned to APC 0710
• G0173 is assigned to APC 0721
• G0242 is assigned to APC 0714
• G0243 is assigned to APC 0721.
APC 0311: Radiation Physics Services
APC 0312: Radio Element Application
APC 0313: Brachytherapy
We presented APC 0311 to the Panel because we believed our cost data for CPT codes 77336, Continuing medical physics consultation, including assessment of treatment parameters, quality assurance of dose delivery, and review of patient treatment documentation in support of the radiation oncologist, reported per week of therapy; 77370, Special medical radiation physics consultation; and 77399, Unlisted procedure, medical radiation physics, dosimetry, and treatment devices, and special services, were inaccurate. We were concerned that these procedures, particularly code 77370, were not being paid appropriately in APC 0311.
Presenters pointed out that, as with all radiation oncology services, the usual practice is to bill multiple CPT codes on the same date of service. Therefore, single claims were likely to be inaccurate bills and did not represent the true costs of the procedure. For this reason, presenters believed that using single claims to set payment rates for radiation oncology procedures was inappropriate and that we needed to develop a methodology that allowed the use of multiple claims data to set payment rates for these services.
For radiation physics consultation, presenters stated that the staff costs associated with CPT code 77370 were significantly greater than the costs of CPT codes 77336 and 77399. Therefore, they recommended that CPT codes 77336 and 77399 be moved from APC 0311 to APC 0304, Level I Therapeutic Radiation Treatment Preparation, and CPT code 77370 be moved from APC 0311 to APC 0305, Level II Therapeutic Radiation Treatment Preparation. The Panel agreed with this recommendation and we proposed to accept the Panel's recommendation. We also agreed that we should review the use of single claims to set payment rates for radiation oncology services. We plan to present this issue again at the 2002 Panel meeting.
We presented APCs 0312 and 0313 to the Panel because commenters were concerned that the payment rates were too low for the procedures assigned to the APCs and that there were insufficient data to set payment rates for these APCs. The Panel agreed that the issue regarding the use of single claim data affected the payment rates for these services. However, there were insufficient data for the Panel to make any recommendations regarding these APCs. The Panel did request to look at the issue of radiation oncology at its 2002 meeting.
Therefore, we proposed to make no changes to APCs 0312 and 0313 but will address radiation oncology issues at the Panel's 2002 meeting. We note that our updated claims data show very few single claims for procedures in these APCs. However, moving any of these procedures into other radiation oncology APCs would lower their payment rates. We are making no further changes to these APCs.
APC 0371: Allergy Injections
We presented this APC to the Panel because it violates the 2 times rule. The median costs for CPT codes 95115, Professional services for allergen immunotherapy not including provision of allergenic extracts; single injection, and 95117, Professional services for allergen immunotherapy not including provision of allergenic extracts; two or more injections, were lower than the median costs for the other services in this APC.
The Panel agreed that because codes 95115 and 95117 included administration of an injection only, the resource utilization for these services was lower than for the other services. The other services involve preparation of antigen and require more staff time and hospital resources to perform.
In order to create clinical and resource homogeneity, the Panel recommended that we create a new APC for codes 95115 and 95117 and that we leave the other services in APC 0371. We proposed to accept the Panel recommendation and create a new APC 0353, Level II Allergy Injections, and revise the title of APC 0371 to Level I Allergy Injections. These proposed changes are incorporated as final in this rule.
Observation Services
See the discussion on observation services in section II.C.4 of this preamble for the Panel's recommendations and our proposal as well as a discussion of the comments we received.
Inpatient Procedure List
See the discussion of the inpatient procedures list in section II.C.5 of this preamble for the Panel's recommendations and our proposal and a discussion of the comments we received on the list.
3. Other APC Issues
APC 0285: Positron Emission Tomography (PET)
Comment
: Commenters expressed concern about the calculation of the payment rate for APC 0285, Positron Emission Tomography (PET), which includes PET for myocardial perfusion imaging. One specific concern is that single service claims are used to calculate relative weights although the applicable procedure codes for these studies are always linked to another diagnostic study and, therefore, they should not appear on single service claims. Second, the commenters are concerned that it is not appropriate to place both single study and multiple study PET procedures in the same APC.
Response
: While the PET procedures are linked with a previous diagnostic procedure, the latter need not have been performed on the same day or in the same facility. Upon review of our claims data base, we find that nearly 50 percent of all claims for PET myocardial perfusion imaging studies are single service claims. We believe this to be a sufficient frequency for setting payment rates consistent with the overall methodology for setting rates in the OPPS. With regard to the second concern, after further analysis of claims, we concluded that there is not sufficient variation in the cost among the relevant codes, whether single or multiple studies, to warrant a change in the APC structure.
PET Scans Assigned to APC 0976: New Technology—Level VII ($750-$1000)
In the April 7, 2000 final rule, we assigned PET scans that use 18-flurodeoxyglucose (FDG) to APC 0980, New Technology—Level XII ($2000-$2500) because there were no claims for these procedures in the 1996 data used to establish the APC relative weights for 2000. However, based on the data from over 4,000 claims for services furnished between July 1, 1999 through June 30, 2000, the data base that was used to set the proposed APC weights, we found that the reported median costs for these procedures was closer to $900. Therefore, in the proposed rule, we
assigned the FDG PET scans to APC 0976, New Technology—Level VII ($750-$1000). We received a large number of comments on this proposed change.
Comment
: Commenters expressed concern that the proposed APC assignment resulted in a much reduced payment rate for FDG PET scans. Many of these commenters expressed particular concern that the proposed rate of about $850 would not cover the cost of purchasing FDG in addition to the direct and indirect costs of a PET scan. The commenters requested that we review our data and the data they submitted and assign these procedures to a higher level new technology APC.
Response
: As we discussed in detail in the April 7, 2002 final rule (65 FR 18476-78), the purpose of assigning a service to a new technology APC is to pay for a new technology based on its expected costs (as evidenced by data collected by us from various external sources) while we collect claims data that would allow assignment of the service to a clinically appropriate APC based on the actual resource use of the service. Our current policy is that a service remains in a new technology APC for 2 to 3 years while we collect the necessary claims data. (See section VI.G of this preamble for a discussion of changes we are making to this policy effective CY 2002.) Because FDG PET scans were assigned to a new technology APC at the implementation of the OPPS in August 2000, they will continue to be assigned to a new technology APC through 2002. However, when we reviewed the claims data in our 1999-2000 data base, there were about 5,000 single claims for these PET scans, with a median cost of about $900. Therefore, we proposed to move these procedures from APC 0980 to APC 0976.
As requested by the commenters and consistent with our policy on pricing services for assignment to new technology APCs, we reviewed the external data provided by the commenters as well as our claims data. These data suggest that our claims cost data may not have accurately captured the entire costs of the procedure, particularly the cost of the FDG. Based on our analysis, we believe that the cost of an FDG PET scan is between $1,200 and $1,800, with a midpoint of $1,500. According to our methodology for pricing new technology services, these services will be reassigned to APC 0978, New Technology—Level IX ($1250-$1500), which results in a payment rate of $1,375.
Cryoablation of the Prostate
Comment:
We received several comments concerning our proposal to place CPT code 55873, cryosurgical ablation of the prostate, into APC 0163, Level IV Cystourethroscopy and other Genitourinary Procedures. Commenters believe that we had insufficient cost data to justify moving this code from its current assignment, APC 0980, New Technology—XI ($1750-$2000). They also believe that cryoablation of the prostate is not clinically similar to other procedures in APC 0163. One commenter requested moving code 55873 into either APC 0984, New Technology—XV ($3500-$5000) or 0132, Level III Laparoscopy.
Response
: We have reviewed our 1999-2000 cost data for code 55873, and have 4 claims that show a median cost of just over $4,000, which includes the cost of the procedure as well as the associated devices. The devices associated with this procedure are eligible for transitional pass-through payments. After subtracting the estimated cost of the pass-through devices, we believe that the approximate expected cost of this procedure warrants its assignment to APC 0982 New Technology—XIII ($2500-$3000), with a status indicator of “T.” The devices associated with this procedure remain eligible for transitional pass-through payments in 2002 in addition to the APC payment amount.
Water-Induced Thermotherapy
Comment:
We received a comment from the manufacturer of the equipment used for water-induced thermotherapy (a treatment for benign prostatic hyperplasia), CPT code 53853, that our proposal to assign this procedure in new technology APC 0977, New Technology—VIII ($1000-$1250) did not accurately reflect the costs and resources required to furnish this procedure. The commenter believes that 53853 should be placed in APC 0982, New Technology—XIII ($2500-$3000) with other minimally invasive thermotherapy treatments for benign prostatic hyperplasia.
Response
: We disagree with the commenter and are finalizing our proposal. Based on the information provided by the commenters and our own clinical knowledge, we understand that the resources required to deliver water-induced thermotherapy are less than the resources required for the procedures assigned to APC 0982 (CPT codes 53850, transurethral destruction of prostate tissue; by microwave thermotherapy, and 53852, transurethral destruction of prostate tissue; by radiofrequency thermotherapy). Less intraoperative staff time and less equipment resources are required for 53853 than for the other procedures. In addition, unlike codes 53850 and 53852, which require sedation or regional anesthesia, code 53853 requires only local anesthesia. Finally, recovery time is shorter (in part because of the local anesthesia) and requires fewer facility resources. Therefore, we believe code 53853 is appropriately assigned to APC 0977.
Ultrasound Radiologic Guidance Codes
Comment:
Several commenters inquired about a change in the proposed rule that resulted in the packaging of certain ultrasound and radiologic guidance codes. The commenters urged us to publish the data and rationale for these changes and recommended that the proposed changes not be made final, pending further review and a fuller discussion of the proposed changes. The commenters recommended separate rather than packaged payment for the guidance codes.
Response
: As we explain above in section II.A.2 of this preamble under the discussion for APC 0151, we accepted the APC Panel's recommendation to consider the use of multiple claims data to determine payment rates for endoscopic retrograde cholangio-pancreatography (ERCP). The payment rate that we proposed for ERCP was based on both single claims for ERCP procedures and on claims that included both an ERCP procedure and a radiologic supervision or guidance procedure. That is, rather than making separate payment for the radiologic supervision and guidance furnished in connection with ERCP, we packaged those costs into the proposed rate for APC 0151.
Our experience using multiple procedure claims to price ERCP in accordance with the Panel's recommendation led us to consider other services that could be priced similarly. We believe that the following procedures assigned to APC 0268, Guidance Under Ultrasound, would never be performed alone, but would always be performed in connection with and be considered integral to the performance of another procedure: 76930, 76932, 76934, 76938, 76941, 76942, 76945, 76946, 76948, 76950, 76960, 76965, G0161. Therefore, if a claim listed one of the procedures in APC 0268 in addition to another procedure, we retained that claim in the pool of single-procedure bills used to calculate median costs for services within the various APCs. Costs
associated with the codes in APC 0268 were therefore packaged into the APCs of procedures with which they were billed between July 1, 1999 through June 30, 2000.
We continue to believe that the most appropriate way to pay for ultrasound guidance is to package its costs as part of the cost of performing the procedure for which the guidance is needed. Therefore, in the proposed rule, we assigned status indicator “N” to still active codes that had previously been in APC 0268. We applied the same principle to several radiologic guidance codes (76393, 19290, 19291, and 19295). We assigned status indicator “N” to these codes because they represent services that are always furnished in connection with another procedure. That is, they are integral to performing another procedure and would never be performed alone, as a single service. Therefore, costs associated with such radiologic guidance codes are more appropriately packaged than paid for separately.
It is crucial that hospitals bill charges for codes with status indicator “N” to ensure that costs for packaged services are appropriately captured in the APCs with which they are associated. For the 2003 OPPS update, we will consider proposing to package additional guidance services with whichever procedures they are billed, including the following:
76095, Stereotactic localization guidance for breast biopsy or needle placement.
76355, Computerized tomography guidance for stereotactic localization.
76360, Computerized tomography guidance for needle placement.
We will report to the Panel on our progress in treating bills with certain packaged services as single procedure claims. We will also include on the agenda of the next Panel meeting a follow-up discussion to review the services that we have packaged thus far and to consider other codes that would also be more appropriately paid as packaged rather than separate services. To identify all the procedures with which the ultrasound and radiologic guidance services are packaged would require a review of the raw outpatient claims that make up the 1999-2000 data that we are using to recalibrate the 2002 APC weights because we have previously packaged the guidance costs with whatever procedure they are billed in preparing the claims data base used for recalibration.
Breast Biopsy
Comment:
A few commenters, including the manufacturer of a minimally invasive breast biopsy system, expressed concern that the higher APC relative weight for surgical breast biopsy procedures would discourage Medicare beneficiary access to less invasive procedures. The commenters were also concerned that the proposed payment for less invasive breast biopsy procedures was inadequate.
Response:
As we discuss below in section II.D. of this preamble, the APC weights reflect hospital median costs (as determined from the charges reflected on claims submitted by hospitals) for a given procedure relative to the costs for other procedures. We expect that the costs for an open surgical procedure will be higher than those for less invasive procedures because open surgery is more resource intensive, especially in terms of recovery time, anesthesia, and nursing care. We do not agree that the higher relative weight for open surgical biopsy will serve as an incentive to perform this procedure rather than the less costly, less invasive options. The payment rate for the less invasive options are based on the costs of those procedures as reported by hospitals. We note that the payment rate for the breast biopsy procedure assigned to APC 0974, New Technology—Level V ($300-$500) (CPT code 19103, Percutaneous, automated vacuum assisted or rotating biopsy device, using imaging guidance) is higher in this final rule relative to the proposed rule (see the discussion in section II.D. of this preamble, below).
Comment:
Several commenters questioned why the proposed rule indicated that CPT code 76095, Stereotactic localization guidance for breast biopsy, would be moved from APC 0264, Level II Miscellaneous Radiology Procedures, with a status indicator of “X” (ancillary service) to APC 0187, Placement/Repositioning Miscellaneous Catheters, with a status indicator of “T” (significant procedure, multiple procedure reduction applies). The commenters were concerned that the “T” status indicator would result in a lower payment for the procedure when it is billed with other procedures.
Response:
We agree with commenters that the title for APC 0187 in the proposed rule is misleading given the procedures that are included within the APC. Therefore, in the final rule, we are changing the name of APC 0187 to “Miscellaneous Placement/Repositioning”. We are also changing the status indicator for APC 0187 from “T” to “X”. We created APC 0187 to pay more appropriately for certain guidance codes, including code 76095.
Status Indicators
Comment:
A commenter asserted that some hospitals believe that procedure codes designated with status indicators of “S,” “T,” “V,” and “X” mean that the procedure must be performed in the outpatient setting.
Response:
This is not the case. These status indicators were developed to assist us with our pricing policy in OPPS, not to dictate where the procedures could be performed. Although a status indicator of “C” means that the procedure will not be paid if performed in the outpatient setting, the status indicators paid under the OPPS do not dictate where that service or procedure is covered. We pay for any covered service or procedure performed in the inpatient setting as an inpatient service as long as the patient's condition merits admission to the hospital as an inpatient.
B. Additional APC Changes Resulting from BIPA Provisions
1. Coverage of Glaucoma Screening
Section 102 of the BIPA amended section 1861(s)(2) of the Act to provide payment for glaucoma screening for eligible Medicare beneficiaries, specifically, those with diabetes mellitus or a family history of glaucoma, and certain other individuals found to be at high risk for glaucoma as specified by our rulemaking. The implementation of this provision is discussed in detail in a separate final rule concerning the revisions in the physician fee schedule payment policy for CY 2002, published in the
Federal Register
on November 1, 2001 (66 FR 55272).
In order to implement section 102 of BIPA, we have established two new HCPCS codes for glaucoma screening:
• G0117—Glaucoma screening for high risk patients furnished by an optometrist or ophthalmologist.
• G0118—Glaucoma screening for high risk patients furnished under the direct supervision of an optometrist or ophthalmologist.
We proposed to assign the glaucoma screening codes to APC 0230, Level I Eye Tests. We further proposed to instruct our fiscal intermediaries to make payment for glaucoma screening only if it is the sole ophthalmologic service for which the hospital submits a bill for a visit. That is, the services included in glaucoma screening (a dilated eye examination with an intraocular pressure measurement and direct opthalmoscopy or slit-lamp biomicroscopy) would generally be performed during the delivery of another opthalmologic service that is furnished on the same day. If the
beneficiary receives only a screening service, however, we would pay for it under APC 0230.
2. APCs for Contrast Enhanced Diagnostic Procedures
Section 430 of the BIPA amended section 1833(t)(2) of the Act to require the Secretary to create additional APC groups to classify procedures that utilize contrast agents separately from those that do not, effective for items and services furnished on or after July 1, 2001. On June 1, 2001, we issued a Program Memorandum, Transmittal A-01-73, in which we made numerous coding and grouping changes to implement this provision. (This transmittal can be found at
www.hcfa.gov/pubforms/transmit/AO173.pdf
) We removed the radiological procedures whose descriptors included either “without contrast material” or “without contrast material followed by contrast material” from APC groups 0282, Level I, Computerized Axial Tomography; APC 0283, Level II, Computerized Axial Tomography; and APC 0284, Magnetic Resonance Imaging. As a result, APCs 0283 and 0284 now include only imaging procedures that are performed with contrast materials. Additionally, reconfigured APC 0282 no longer includes radiological procedures that use contrast agents.
Effective for items or services furnished on or after July 1, 2001, we created six new APC groups for the procedures removed from APCs 0282, 0283, and 0284, as shown below. (Effective October 1, 2001, we eliminated APC 0338. Refer to Transmittal A-01-73 for a detailed description of this change.) For services furnished on or after July 1, 2001 and before January 1, 2002, the payment rates for the new imaging APCs are the same as those associated with the APCs from which the procedures were moved. For the proposed rule, we calculated separate weights for the new APCs based on the data available at the time for recalibration. In this final rule, we are establishing separate weights for the new APCs based on the final data used to recalibrate the weights for 2002.
Table 1.—APC Groups Reconfigured To Separate Imaging Procedures That Use Contrast Material From Procedures That Do Not Use Contrast Material
APC
SI
APC title
0282
S
Miscellaneous Computerized Axial Tomography.
0283
S
Computerized Axial Tomography with Contrast.
0284
S
Magnetic Resonance Imaging and Angiography with Contrast.
0332
S
Computerized Axial Tomography w/o Contrast.
0333
S
CT Angio and Computerized Axial Tomography w/o Contrast followed by with Contrast.
0335
S
Magnetic Resonance Imaging, Temporomandibular Joint.
0336
S
Magnetic Resonance Angiography and Imaging without Contrast.
0337
S
Magnetic Resonance Imaging and Angiography w/o Contrast followed by with Contrast.
The HCPCS codes that are reassigned to the new imaging APCs in this final rule are as follows:
APC
HCPCS
SI
Short descriptor
0282
76370
S
CAT scan for therapy guide.
76375
S
3d/holograph reconstr add-on.
76380
S
CAT scan for follow-up study.
G0131
S
Ct scan, bone density study.
G0132
S
Ct scan, bone density study.
0283
70460
S
Ct head/brain w/dye.
70481
S
Ct orbit/ear/fossa w/dye.
70487
S
Ct maxillofacial w/dye.
70491
S
Ct soft tissue neck w/dye.
71260
S
Ct thorax w/dye.
72126
S
Ct neck spine w/dye.
72129
S
Ct chest spine w/dye.
72132
S
Ct lumbar spine w/dye.
72193
S
Ct pelvis w/dye.
73201
S
Ct upper extremity w/dye.
73701
S
Ct lower extremity w/dye.
74160
S
Ct abdomen w/dye.
76355
S
CAT scan for localization
76360
S
CAT scan for needle biopsy.
0284
70542
S
MRI orbit/face/neck w/dye.
70545
S
Mr angiography head w/dye.
70548
S
Mr angiography neck w/dye.
70552
S
MRI brain w/dye.
71551
S
MRI chest w/dye.
72142
S
MRI neck spine w/dye.
72147
S
MRI chest spine w/dye.
72149
S
MRI lumbar spine w/dye.
72196
S
MRI pelvis w/dye.
73219
S
MRI upper extremity w/dye.
73222
S
MRI joint upr extrem w/dye.
73719
S
MRI lower extremity w/dye.
73722
S
MRI joint of lwr extr w/dye.
74182
S
MRI abdomen w/dye.
75553
S
Heart MRI for morph w/dye.
C8900
S
MRA w/cont, abd.
C8903
S
MRI w/cont, breast,uni.
C8906
S
MRI w/cont, breast, bi.
C8909
S
MRA w/cont, chest.
C8912
S
MRA w/cont, lwr ext.
0332
70450
S
CAT scan of head or brain.
70480
S
Ct orbit/ear/fossa w/o dye.
70486
S
Ct maxillofacial w/o dye.
70490
S
Ct soft tissue neck w/o dye.
71250
S
Ct thorax w/o dye.
72125
S
Ct neck spine w/o dye.
72128
S
Ct chest spine w/o dye.
72131
S
Ct lumbar spine w/o dye.
72192
S
Ct pelvis w/o dye.
73200
S
Ct upper extremity w/o dye.
73700
S
Ct lower extremity w/o dye.
74150
S
Ct abdomen w/o dye.
0333
70470
S
Ct head/brain w/o&w dye.
70482
S
Ct orbit/ear/fossa w/o&w dye.
70488
S
Ct maxillofacial w/o&w dye.
70492
S
Ct sft tsue nck w/o & w/dye.
70496
S
Ct angiography, head.
70498
S
Ct angiography, neck.
71270
S
Ct thorax w/o&w dye.
71275
S
Ct angiography, chest.
72127
S
Ct neck spine w/o&w dye.
72130
S
Ct chest spine w/o&w dye.
72133
S
Ct lumbar spine w/o&w dye.
72191
S
Ct angiograph pelv w/o&w dye.
72194
S
Ct pelvis w/o&w dye.
73202
S
Ct uppr extremity w/o&w dye.
73206
S
Ct angio upr extrm w/o&w dye.
73702
S
Ct lwr extremity w/o&w dye.
73706
S
Ct angio lwr extr w/o&w dye.
74170
S
Ct abdomen w/o&w dye.
74175
S
Ct angio abdom w/o&w dye.
75635
S
Ct angio abdominal arteries.
0335
70336
S
Magnetic image, jaw joint.
75554
S
Cardiac mri/function.
75555
S
Cardiac mri/limited study.
76390
S
Mr spectroscopy.
76400
S
Magnetic image, bone marrow.
0336
70540
S
MRI orbit/face/neck w/o dye.
70544
S
Mr angiography head w/o dye.
70547
S
Mr angiography neck w/o dye.
70551
S
MRI brain w/o dye.
71550
S
MRI chest w/o dye.
72141
S
MRI neck spine w/o dye.
72146
S
MRI chest spine w/o dye.
72148
S
MRI lumbar spine w/o dye.
72195
S
MRI pelvis w/o dye.
73218
S
MRI upper extremity w/o dye.
73221
S
MRI joint upr extrem w/o dye.
73718
S
MRI lower extremity w/o dye.
73721
S
MRI joint of lwr extre w/o d.
74181
S
MRI abdomen w/o dye.
75552
S
Heart MRI for morph w/o dye.
C8901
S
MRA w/o cont, abd.
C8904
S
MRI w/o cont, breast, uni.
C8910
S
MRA w/o cont, chest.
C8913
S
MRA w/o cont, lwr ext.
0337
70543
S
MRI orbt/fac/nck w/o&w dye.
70546
S
Mr angiograph head w/o&w dye.
70549
S
Mr angiograph neck w/o&w dye.
70553
S
MRI brain w/o&w dye.
71552
S
MRI chest w/o&w dye.
72156
S
MRI neck spine w/o&w dye.
72157
S
MRI chest spine w/o&w dye.
72158
S
MRI lumbar spine w/o&w dye.
72197
S
MRI pelvis w/o&w dye.
73220
S
MRI uppr extremity w/o&w dye.
73223
S
MRI joint upr extr w/o&w dye.
73720
S
MRI lwr extremity w/o&w dye.
73723
S
MRI joint lwr extr w/o&w dye.
74183
S
MRI abdomen w/o&w dye.
C8902
S
MRA w/o fol w/cont, abd.
C8905
S
MRI w/o fol w/cont, brst, uni.
C8908
S
MRI w/o fol w/cont, breast, bi.
C8911
S
MRA w/o fol w/cont, chest.
C8914
S
MRA w/o fol w/cont, lwr ext.
Refer to Addendum A or Addendum B of this final rule for the updated weights, payment rates, national unadjusted copayment, and minimum unadjusted copayment for all of the procedures listed above.
3. Coding and Payment for Mammography Services
a. Screening Mammography.
Screening mammography means a radiologic procedure provided to a woman without signs or symptoms of breast disease for the purpose of early detection of breast cancer. Under Medicare, screening mammography services can be billed in three ways: (1) For the physician's interpretation of the results of the screening mammogram (that is, the professional component of mammography services); (2) for all services other than the physician's interpretation (that is, the technical component); or (3) for both the professional and technical components (global billing), although global billing is not permitted for services furnished in the hospital outpatient setting.
Section 4163 of the Omnibus Budget Reconciliation Act of 1990 (Pub. L. 101-508) added section 1834(c) of the Act to provide for Part B coverage of screening mammography performed on or after January 1, 1991. Section 1834(c) of the Act governing those screenings did not include screening mammography under the physician fee schedule; it provided for payment under a separate statutory methodology. Payment for screening mammography services furnished in the hospital outpatient setting before January 1, 2002 is subject to the payment method set by the statute at section 1834(c) of the Act. When Medicare implemented the OPPS for services furnished beginning August 1, 2000, payment for screening mammography services continued to be based on the payment method set by the statute at section 1834(c) (the lower of hospital charges or the national payment limitation) of the Act and was not made under the OPPS.
Section 104 of BIPA amended section 1848(j)(3) of the Act to include screening mammography as a physician service. As a result of this amendment, the payment limit that is currently the basis for payment is replaced beginning January 1, 2002 by payment under the Medicare physician fee schedule. Payments for all services under the physician fee schedule are resource-based and have geographic adjustments that reflect cost differences among areas. A discussion of how payment for screening mammography services is determined under the physician fee schedule can be found in the final rule, “Revisions to Payment Policies and Five-Year Review of and Adjustments to the Relative Value Units Under the Physician Fee Schedule for Calendar Year 2002,” published in the November 1, 2001
Federal Register
(66 FR 55246). Beginning January 1, 2002, Medicare payment for screening mammography services furnished in a hospital outpatient setting is no longer the lower of hospital charges or the national payment limitation; however, payment will continue to be excluded from the OPPS. For screening mammography furnished in the outpatient setting, Medicare will pay hospitals the technical component amount established under the Medicare physician fee schedule.
Comment:
A few commenters questioned why we had not established an APC or a payment rate for screening mammography in the proposed rule. One commenter expressed grave concern that our failure to include an APC for screening mammography in the proposed rule meant that Medicare beneficiaries would not be able to receive screening mammography services in the hospital outpatient setting. These commenters urged that we establish an APC for screening mammography services and that the payment rate be consistent with the cost of taking a screening mammogram in the hospital outpatient setting rather than the payment rate proposed for diagnostic mammograms in APC 0271, Mammography. One commenter, citing a survey conducted by a professional society, reported the average cost of doing a screening mammogram in a hospital to be about $97. Several commenters supported the physician fee schedule payment rate for screening mammography services as a more reasonable recognition of associated costs than the payment rate proposed for diagnostic mammography under APC 0271.
Response:
The fact that we have not assigned the HCPCS codes for screening mammography services to an APC does not mean that Medicare does not pay hospitals for these services when they are furnished in the outpatient setting. Rather, as we explain in the April 7, 2000 final rule, we excluded screening mammography services from payment under the OPPS because they were already subject to an existing fee schedule or other prospectively determined payment rate (65 FR 18442). When the OPPS was implemented on August 1, 2000, screening mammography services were assigned payment status indicator “A” to specify that payment would be the “lower of charge or national rate,” consistent with section 1834(c)(3) of the Act (65 FR 18445).
As a result of section 104 of BIPA, which amended section 1848(j)(3) of the Act to define screening mammography as a physician service, Medicare payment for screening mammography services furnished on or after January 1, 2002 is no longer subject to the payment methodology established under section 1834(c) of the Act. Therefore, payment for both the professional and technical components of screening mammography services furnished on or after January 1, 2002 is made under the physician fee schedule. This means that, effective for services furnished on or after January 1, 2002, the payment amount to hospitals for screening mammography services furnished in the outpatient setting will be based on the amount established for the technical component of screening mammography under the physician fee schedule.
Hospitals are to use the following codes to bill for screening mammography services effective January 1, 2002:
• CPT code 76092, Screening mammography, bilateral (two view film study of each breast)
• HCPCS code G0202, Screening mammography, direct digital image, bilateral, all views
• CPT code 76085, Computer-aided detection add-on code for screening mammography (can only be billed with CPT code 76092)
We further discuss in section II.B.3.c, below, coding and payment for screening and diagnostic mammograms that use advanced new technologies.
Payment for screening mammography services furnished in a hospital outpatient department beginning January 1, 2002 is equal to 80 percent of the lower of the hospital's actual charge or the locality specific technical component payment amount under the physician fee schedule. Coinsurance equals 20 percent of the lower of the actual charge or the physician fee schedule amount. The Medicare Part B deductible does not apply to screening mammography. The November 1 physician fee schedule final rule lists the relative value units for screening mammography services and the physician fee schedule conversion factor for CY 2002 (66 FR 55334). In addition to the technical component payment made to the hospital, physicians are paid an additional amount for professional services furnished in connection with these procedures.
In this final rule, we are changing the descriptor of payment status indicator “A” for the screening mammography codes to “Physician Fee Schedule” to conform with the BIPA change.
b. Diagnostic Mammography.
Medicare covers a radiological mammogram as a diagnostic test under the following conditions:
• A patient has distinct signs and symptoms for which a mammogram is indicated;
• A patient has a history of breast cancer; or
• A patient is asymptomatic, but on the basis of the patient's history and other factors the physician considers significant, the physician's judgment is that a mammogram is appropriate.
Payment for a diagnostic mammogram furnished in a hospital outpatient setting is made under the OPPS. The following codes are used to report diagnostic mammography: CPT code 76090, Mammography; unilateral, and CPT code 76091, Mammography, bilateral are used to report a diagnostic mammogram. These two codes are assigned to APC 0271, Mammography, and we proposed no changes to the assignment of these codes in the proposed rule. (We discuss in section III.B.3.c, below, coding changes for the CY 2002 related to new technology mammography.)
In the proposed rule, the relative weight for APC 0271 was equal to 0.64. We recalibrated all the APC relative weights, including that for APC 0271, using claims data for services furnished beginning July 1, 1999 through June 30, 2000 in accordance with the process explained in the proposed rule (66 FR 44695).
Comment:
We received numerous comments, many of which were the product of a “write-in” campaign, regarding the relative weight and payment rate proposed for APC 0271. The commenters asserted that the current payment rate for APC 0271 is inadequate to support the provision of mammography services in the hospital outpatient setting, and they expressed disbelief that the proposed payment rate for 2002 is lower than the current rate. Commenters expressed grave concern that the proposed payment rate for diagnostic mammography would have a generally negative impact on beneficiary access to mammography services. Many commenters cited a practice cost survey conducted by the American College of Radiology that indicated the average cost for performing a screening mammogram in a hospital outpatient setting to be $97. The commenters argued that diagnostic mammography is more complex technically and more resource intensive, requiring more than double the clinical labor, supply, and equipment inputs than those required for screening mammography. One commenter stated that the technical cost of providing screening mammography in the hospital setting is nearly twice the cost of providing the same service in a physician office setting.
Other commenters recommended that payment for all mammography services furnished in the outpatient setting, both screening and diagnostic, be paid under the physician fee schedule to eliminate the significant payment disparity that will result if the proposed OPPS rates for diagnostic mammography are implemented in 2002. Several commenters complained that we provided no rationale or data to show how the proposed payment rate for APC 0271 was calculated nor did we explain why the proposed payment for these services is lower than the current payment. Commenters urged that we recalculate the payment rate for APC 0271 to represent a payment rate that is reflective of the resources used to perform the procedure.
Response:
We calculated the relative weight for APC 0271 in the April 7, 2000 final rule in accordance with the process we described in that rule (65 FR 18482), using, as required by the statute, claims from 1996 and data from the most recent available hospital cost reports. Because we did not recalibrate the relative weights for any APC groups in the November 13, 2000 final rule, the relative weight (0.70) for APC 0271 as well as the relative weights for the other APC groups have not changed since August 1, 2000.
Using 1999-2000 claims data, we recalibrated all the APC weights in the proposed rule in accordance with the process that we explained in that rule (66 FR 44695). The relative weight for every APC group changed for two reasons: the use of more recent claims data, and the statutory requirements for budget neutrality. Section 1833(t)(9)(B) of the Act requires that estimated spending for services covered under the OPPS be neither greater nor less than it would have been had the recalibration and reclassification changes not been made. Because of this, the weights and, therefore, the payment rates for a specific service may increase or decrease depending on the change in charges hospitals report for that service relative to the change in charges hospitals report for other outpatient services. The decrease in the relative weight for diagnostic mammography proposed for 2002 can be attributed to a decrease in the relative level of charges for diagnostic mammography that hospitals reported for services furnished from July 1, 1999 through June 30, 2000 compared to the relative level of charges hospitals reported for all other outpatient services furnished during the same period. However, that weight does reflect the hospital resources used to perform mammograms. We note that the weight for APC 0271 in both the proposed and final rules is calculated from the median cost of almost 900,000 single-procedure claims.
The weight for APC 0271 in this final rule is 0.60. This weight was recalibrated, like all of the APC weights in this final rule, in accordance with the methodology described in section II.D. of this preamble. We note that the weight for APC 0271, like the weights for all of the nondevice-related APCs, has decreased from the proposed weight. This decrease is the result of our incorporating a portion of the cost of pass-through devices into the base costs of the APCs with which the devices are associated. As we explained in the final rule published on November 2, 2001, the additional pass-through device costs that were incorporated into the base APC costs are not evenly distributed among the APCs, but rather are concentrated in a relatively small
number of APCs that include the procedures that use pass-through devices (66 FR 55862). Whereas the weights of these APCs increased as a result of the added device costs, in general, the weights for APCs that do not include device costs, such as APC 0271, decreased by approximately 8 percent. For a more detailed discussion of how the incorporation of device costs into the base APCs affects the relative weights, see sections II.D. and VII, below.
Unlike screening mammography, the statute makes no specific designation for the technical component of diagnostic mammography services furnished in the hospital outpatient setting to be defined as a physicians' service. Therefore, we believe that the payment for diagnostic mammography should be included in the OPPS.
Comment:
Several commenters expressed concern that the reduced payment rate for diagnostic mammography would have an especially onerous and negative impact on small, low volume hospitals, most of which are located in rural areas. The commenters noted that although these small rural hospitals are generally the sole providers of mammography and radiology services to the surrounding communities, volume in these hospitals is nonetheless too low to offset the fixed costs incurred for certified staff and equipment.
Response:
In order to limit potential reductions in payment to hospitals under the OPPS, section 1833(t)(7) of the Act requires us to provide transitional payment adjustments for hospitals whose OPPS payments are less than our estimate of the hospital's pre-BBA payments. Section 1833(t)(7)(D)(i) of the Act includes a special “hold harmless” provision, which applies to hospital outpatient services furnished before 2004 by hospitals that are located in a rural area and that have no more than 100 beds. Under section 1833(t)(7)(D)(i) of the Act, small rural hospitals will be paid a predetermined pre-BBA amount for services covered under the OPPS if payment under the OPPS would be less than the pre-BBA amount. This hold harmless provision establishes a payment floor until January 1, 2004 for small rural hospitals. These provisions should provide some measure of protection to small hospitals in rural areas to the extent that the reduced payment for diagnostic mammography services results in overall payment reductions.
c. Coding and Payment for New Technology Mammography Services.
Section 104(d) of BIPA prescribes a payment methodology for both diagnostic and screening mammography furnished during the period April 1, 2001 through December 31, 2001 that use a new technology, as defined in section 104(d)(3) of BIPA. Section 104(d)(2) of BIPA directs the Secretary to determine, for mammography performed after 2001, whether the assignment of a new HCPCS code is appropriate for mammography that uses a new technology. The following codes have been established to identify the new technology mammography services and will be used effective January 1, 2002:
•
HCPCS code G0202,
Screening mammography producing direct digital image, bilateral, all views.
•
CPT code 76085,
Digitization of film radiographic images with computer analysis for lesion detection and further physician review for interpretation, screening mammography. (This code can only be billed with CPT code 76092, Screening mammography, bilateral.)
•
HCPCS code G0204,
Diagnostic mammography, direct digital image, bilateral, all views.
•
HCPCS code G0206,
Diagnostic mammography, direct digital image, unilateral, all views.
•
HCPCS code G0236,
Digitization of film radiographic images with computer analysis for lesion detection and further physician review for interpretation, diagnostic mammography. (This code can only be billed with code CPT code 76090, Diagnostic mammography, unilateral, or CPT code 76091, Diagnostic mammography, bilateral.)
In the proposed rule, we assigned computer-aided detection (CAD) and full field digital mammography (FFDM) services used for diagnostic mammography to APC 0271. We proposed to assign payment status indicator “A,” designating that payment would be “lower of charges or national rate,” to the CAD and FFDM codes for screening mammography. Numerous commenters addressed our proposed payment for CAD and FFDM new technology mammography services. Their comments are summarized below.
Comment:
One commenter recommended that CAD used in conjunction with film screening mammography be assigned to a new technology APC under the OPPS rather than being paid under the physician fee schedule. The commenter argued that although section 104(a) of BIPA provided for payment for screening mammography under the physician fee schedule, payment for a new technology such as CAD is provided under a separate BIPA provision, section 104(d)(3), and therefore is not linked to the physician fee schedule.
Response:
We do not agree with the commenter's recommendation that CPT code 76085 for CAD used with screening mammography be assigned for payment to a new technology APC under the OPPS. Because CPT code 76085 is an add-on code that can be paid only when it is billed with CPT code 76092 for screening mammography, we believe it is more appropriate to pay for both CPT codes 76085 and 76092 under the physician fee schedule than to pay for them separately under two different payment systems.
Comment:
Most commenters recommended assignment of CAD and FFDM services used with diagnostic mammography to a new technology APC on the grounds that no existing APC would be appropriate both clinically and in terms of payment for these services. Commenters were unanimous in opposing assignment of the CAD and FFDM services used for diagnostic mammography to APC 0271. Several commenters were concerned that payment for these services under the physician fee schedule was so much higher than that proposed under the OPPS.
Response:
We agree that the new technology procedures associated with diagnostic mammography should be assigned to a new technology APC until we have collected cost data to make a more clinically and resource use appropriate APC assignment. Therefore, effective for services furnished on or after January 1, 2002, HCPCS codes G0204 and G0206 will be assigned to APC 0971 and HCPCS code G0236 will be assigned to APC 0970.
The difference in payment amounts for the new technology mammography services between the physician fee schedule and the OPPS is attributable to differences in the payment methodology required under the statute.
Final Action:
See section II.B.3.a. for the codes used to bill for new technology screening mammography services. The following codes and APC groups are effective for new technology services used for diagnostic mammography beginning January 1, 2002:
HCPCS codes G0205 and G0207 are deleted.
Use HCPCS codes G0204 and G0206 for full field digital diagnostic mammography services; assigned to APC 0707.
Use HCPCS code G0236 for computer-assisted detection with CPT code 76090 and CPT code 76091 for diagnostic mammography; assigned to APC 0706.
C. Other Changes Affecting the APCs
1. Changes in Revenue Code Packaging
In the April 7, 2000 final rule, we described how, in calculating the per procedure and per visit costs to determine the median cost of an APC (and therefore its relative weight), we used the charges billed using the revenue codes that contained items that were integral to performing the procedure or visit (65 FR 18483). The complete list of the revenue centers by type of APC group was printed in the April 7, 2000 rule (65 FR 18484).
In the November 13, 2000 interim final rule, we made some changes to the list of revenue codes to reflect the charges associated with implantable devices (65 FR 67806 and 67825). We were later able to incorporate revenue codes 274 (prosthetic/orthotic devices), 275 (pacemaker), and 278 (other implants) in our database, and effective January 1, 2001, we updated the APC payment rates to reflect inclusion of this information.
As discussed in the proposed rule, we have continued to review and revise the list of revenue codes to be included in the database and we proposed several changes to the list of revenue codes that are packaged with the costs used to calculate the proposed APC rates. Some of these changes reflect the addition of revenue codes and others are a further refinement of our methodology. The following are the specific changes we proposed:
• Package additional revenue centers that may be used to bill for implantable devices (including durable medical equipment (DME) and brachytherapy seeds) with surgical procedures. These additional centers are revenue codes 280 (oncology), 289 (other oncology), 290 (DME), and 624 (investigational devices).
• Package revenue codes 280, 289, and 624 with other diagnostic and radiology services.
• Package the revenue codes for medical social services, 560 (medical social services) and 569 (other medical social services). These services are not paid separately in the hospital outpatient setting but often constitute discharge-planning services if provided with an outpatient service.
• Package revenue code 637 (self-administered drug (insulin administered in an emergency diabetic coma)) with medical visits. Although this is a self-administrable drug, it is covered when administered as described.
• Remove revenue code 723 (circumcision) from the list of packaged revenue codes because circumcision is a payable procedure under OPPS and should not be packaged.
• Package revenue code 942 (education/training) with medical visits and the category of “All Other APC Groups.” Patient training and education are generally not paid as a separate service under Medicare, but may be included as part of an otherwise payable service such as a medical visit. We believe that training and education services generally occur as part of a medical visit or psychiatric service.
• Remove the revenue codes in the range of 890 through 899 (donor bank), as these are no longer valid revenue codes.
Comment:
One commenter disagreed with our proposal to package revenue code 942 (education/training). The commenter stated that such a policy would be inappropriate because revenue code 942 is the proper revenue code to use when billing diabetes training with HCPCS codes G0108 and G0109. If CMS does package that revenue code, the commenter wanted to know what revenue code should be billed for diabetes education.
Response:
Although under OPPS we will package charges for education and training when billed with revenue code 942, training and education associated with diabetes management, identified by HCPCS codes G0108 and G0109, is not paid under the OPPS and, therefore, is not a packaged service. The list of packaged revenue codes contained in the proposed rule represents revenue codes that are packaged when they appear on a bill with an OPPS service and are not billed with a HCPCS code for a service, like diabetes education, which is paid by Medicare but paid outside of the OPPS.
Comment:
One commenter questioned our proposal to package additional revenue centers that may be used to bill for implantable devices (including brachytherapy seeds) with surgical procedures. The commenter asked for details on how such packaging would be accomplished and specifically how we would account for the varying number of costly brachytherapy seeds used in each procedure.
Response:
In determining the median cost of a procedure or service, we take into account the costs associated with any packaged revenue center that appears on a bill as well as the cost associated with the specific line item that reflects the HCPCS code for the procedure or service. Thus, when a hospital bills a charge for brachytherapy seeds using one of the revenue codes that are identified as a packaged revenue code, we convert that charge to a cost by multiplying the billed charge by the hospital-specific cost-to-charge ratio for the related cost center. The cost of the brachytherapy seeds is then added to all other costs on the bill that are attributable to the procedure to arrive at the cost of the bill. Under this methodology, the varying numbers of brachytherapy seeds used and the varying costs of the seeds are accurately captured in the median cost data we use to calculate median cost for the APC. That is, we would expect that the cost associated with a bill would reflect the number of seeds used in a particular procedure and the median cost for that procedure overall would be an average of the varying numbers of seeds used by hospitals.
2. Special Revenue Code Packaging for Specific Types of Procedures
We proposed that the same packaging used for surgical procedures be used for corneal tissue implant procedures in APC 0244, Corneal Transplant, except that organ acquisition revenue codes and the revenue codes used to bill implantable devices are not packaged with corneal implants.
There are certain other diagnostic procedures with CPT codes that are similar to surgical procedures. The cost of these procedures (HCPCS codes 92980-92996, 93501-93505, and 93510-93536) reflects both the revenue code packaging for ambulatory surgical center (ASC) and other surgery, as well as the revenue code packaging for other diagnostic services.
A complete listing of the revenue codes that we used for purposes of calculating median costs of services are shown below in Table 2.
Table 2.—Packaged Services by Revenue Code
Surgery
250 Pharmacy
251 Generic
252 Nongeneric
257 Nonprescription Drugs
258 IV Solutions
259 Other Pharmacy
260 IV Therapy, general class
262 IV Therapy/pharmacy services
263 IV Therapy/drug supply/delivery
264 IV Therapy/supplies
269 Other IV Therapy
270 M&S supplies
271 Nonsterile supplies
272 Sterile supplies
274 Prosthetic/orthotic devices
275 Pacemaker drug
276 Intraocular lens source drug
278 Other implants
279 Other M&S supplies
280 Oncology
289 Other oncology
762 Observation room
810 Organ acquisition
290 Durable medical equipment
370 Anesthesia
379 Other anesthesia
390 Blood storage and processing
399 Other blood storage and processing
560 Medical social services
569 Other medical social services
624 Investigational device (IDE)
630 Drugs requiring specific identification, general class
631 Single source
632 Multiple
633 Restrictive prescription
700 Cast room
709 Other cast room
710 Recovery room
719 Other recovery room
720 Labor room
721 Labor
819 Other organ acquisition
Medical Visit
250 Pharmacy
251 Generic
252 Nongeneric
257 Nonprescription drugs
258 IV solutions
259 Other pharmacy
270 M&S supplies
271 Nonsterile supplies
272 Sterile supplies
279 Other M&S supplies
560 Medical social services
569 Other medical social services
630 Drugs requiring specific identification, general class
631 Single source drug
632 Multiple source drug
633 Restrictive prescription
637 Self-administered drug (insulin admin. in emergency diabetic coma)
700 Cast room
709 Other cast room
762 Observation room
942 Education/training
Other Diagnostic
254 Pharmacy incident to other diagnostic
280 Oncology
289 Other oncology
372 Anesthesia incident to other diagnostic
560 Medical social services
569 Other medical social services
622 Supplies incident to other diagnostic
624 Investigational device (IDE)
710 Recovery room
719 Other recovery room
762 Observation room
Radiology
255 Pharmacy incident to radiology
280 Oncology
289 Other oncology
371 Anesthesia incident to radiology
560 Medical social services
569 Other medical social services
621 Supplies incident to radiology
624 Investigational device (IDE)
710 Recovery room
719 Other recovery room
762 Observation room
All Other APC Groups
250 Pharmacy
251 Generic
252 Nongeneric
257 Nonprescription drugs
258 IV Solutions
259 Other pharmacy
260 IV Therapy, general class
262 IV Therapy pharmacy services
263 IV Therapy drug/supply/delivery
264 IV Therapy supplies
269 Other IV therapy
270 M&S supplies
271 Nonsterile supplies
272 Sterile supplies
279 Other M&S supplies
560 Medical social services
569 Other medical social services
630 Drugs requiring specific identification, general class
631 Single source drug
632 Multiple source drug
633 Restrictive prescription
762 Observation room
942 Education/training
3. Limit on Variation of Costs of Services Classified Within a Group
Section 1833(t)(2) of the Act provides that the items and services within an APC group cannot be considered comparable with respect to the use of resources if the highest cost item or service within a group is more than 2 times greater than the lowest cost item or service within the same group. However, the Secretary may make exceptions to this limit on the variation of costs within each group in unusual cases such as low volume items and services. No exception may be made, however, in the case of a drug or biological that has been designated as an orphan drug under section 526 of the Federal Food, Drug, and Cosmetic Act.
Based on the APC changes discussed above in this section of this preamble and our use of more current data to calculate the median cost of procedures classified to APCs, we reviewed all the APCs to determine which of them would not meet the 2 times limit. We use the following criteria when deciding whether to make exceptions to the 2 times rule for affected APCs:
• Resource homogeneity.
• Clinical homogeneity.
• Hospital concentration.
• Frequency of service (volume).
• Opportunity for upcoding and code fragmentation.
For a detailed discussion of these criteria, refer to the April 7, 2000 final rule (65 FR 18457).
The proposed rule set forth a list of APCs that we proposed to exempt from the 2 times rule based on the criteria cited above (66 FR 44690). In cases in which compliance with the 2 times rule appeared to conflict with a recommendation of the APC Advisory Panel, we generally proposed to accept the Panel recommendation. This was because Panel recommendations were based on explicit consideration of resource use, clinical homogeneity, hospital specialization, and the quality of the data used to determine payment rates.
We received no comments on our proposal. The following is the final list of APCs we exempted from the 2 times rule. This list reflects the final APCs as recalibrated based on the updated 1999-2000 data base as well as the incorporation of 75 percent of the estimated cost of the pass-through devices (See section II.D).
List of APCs exempted from the “two times” requirement:
0001 Photochemotherapy
0004 Level I Needle Biopsy/Aspiration Except Bone Marrow
0043 Closed Treatment Fracture Finger/Toe/Trunk
0044 Closed Treatment Fracture/Dislocation Except Finger
0047 Arthroscopy without Prosthesis
0058 Level I Strapping and Cast Application
0060 Manipulation Therapy
0077 Level I Pulmonary Treatment
0093 Vascular Repair/Fistula Construction
0096 Non-Invasive Vascular Studies
0097 Cardiac Monitoring for 30 Days
0115 Cannula/Access Device Procedures
0121 Level I Tube Changes and Repositioning
0140 Esophageal Dilation without Endoscopy
0141 Upper GI Procedures
0142 Small Intestine Endoscopy
0147 Level II Sigmoidoscopy
0164 Level I Urinary and Anal Procedures
0165 Level III Urinary and Anal Procedures
0182 Insertion of Penile Prosthesis
0187 Placement/Repositioning Misc Catheters
0198 Pregnancy and Neonatal Care Procedures
0203 Level V Nerve Injections
0204 Level VI Nerve Injections
0207 Level IV Nerve Injections
0213 Extended EEG Studies and Sleep Studies, Level I
0215 Level I Nerve and Muscle Tests
0218 Level II Nerve and Muscle Tests
0233 Level II Anterior Segment Eye Procedures
0234 Level III Anterior Segment Eye Procedures
0237 Level III Posterior Segment Eye Procedures
0247 Laser Eye Procedures Except Retinal
0251 Level I ENT Procedures
0252 Level II ENT Procedures
0260 Level I Plain Film Except Teeth
0263 Level I Miscellaneous Radiology Procedures
0264 Level II Miscellaneous Radiology Procedures
0265 Level I Diagnostic Ultrasound Except Vascular
0279 Level I Angiography and Venography Except Extremity
0285 Positron Emission Tomography (PET)
0294 Level I Therapeutic Nuclear Medicine
0296 Level I Therapeutic Radiologic Procedures
0305 Level II Therapeutic Radiation Treatment Preparation
0322 Brief Individual Psychotherapy
0345 Level I Transfusion Laboratory Procedures
0354 Administration of Influenza/Pneumonia Vaccine
0355 Level I Immunizations
0356 Level II Immunizations
0363 Otorhyinolaryngologic Function Tests
0364 Level I Audiometry
0373 Neuropsychological Testing
0600 Low Level Clinic Visits
0601 Mid Level Clinic Visits
0602 High Level Clinic Visits
0694 Level III Excision/Biopsy
4. Observation Services
Frequently, beneficiaries are placed in “observation status” in order to receive treatment or be monitored before making a decision concerning their next placement (that is, admit to the hospital or discharge to home). This occurs most frequently after surgery or a visit to the emergency department. In the proposed rule, we discussed the clinical and payment history of observation services. We also discussed at length the issues we considered in determining whether to make separate payment for observation services. For a more detailed discussion of our deliberations, see 66 FR 44690-91. After careful consideration, we proposed the following:
• To continue to package observation services into surgical procedures and most clinic and emergency visits.
• To create a single APC, APC 0339, Observation, to make separate payment for observation services for three medical conditions, chest pain, asthma, and congestive heart failure, when certain criteria (as described below) are met.
We also proposed to instruct hospitals that payment under APC 0339 for observation services would be subject to the following billing requirements and conditions:
• An emergency department visit (APC 0610, 0611, or 0612) or a clinic visit (APC 0600, 0601, or 0602) is billed in conjunction with each bill for observation services.
• Observation care is billed hourly for a minimum of 8 hours up to a maximum of 48 hours. We would not pay separately for any hours a beneficiary spends in observation over 24 hours, but all costs beyond 24 hours would be packaged into the APC payment for observation services.
• Observation time begins at the clock time appearing on the nurse's observation admission note. (We note that this coincides with the initiation of observation care or with the time of the patient's arrival in the observation unit.)
• Observation time ends at the clock time documented in the physician's discharge orders, or, in the absence of such a documented time, the clock time when the nurse or other appropriate person signs off on the physician's discharge order. (This time coincides with the end of the patient's period of monitoring or treatment in observation.)
• The beneficiary is under the care of a physician during the period of observation, as documented in the medical record by admission, discharge, and other appropriate progress notes, timed, written, and signed by the physician.
• The medical record includes documentation that the physician used risk stratification criteria to determine that the beneficiary would benefit from observation care. (These criteria may be either published generally accepted medical standards or established hospital-specific standards.)
• The hospital furnishes certain other diagnostic services along with observation services to ensure that separate payment is made only for those beneficiaries truly requiring observation care. We believe that these tests are typically performed on beneficiaries requiring observation care for the three specified conditions and they are medically necessary to determine whether a beneficiary will benefit from being admitted to observation care and the appropriate disposition of a patient in observation care. The diagnostic tests are as follows:
• For chest pain, at least two sets of cardiac enzymes and two sequential electrocardiograms.
• For asthma, a peak expiratory flow rate (PEFR) (CPT code 94010) and nebulizer treatments.
• For congestive heart failure, a chest x-ray, an electrocardiogram, and pulse oximetry.
We proposed to make payment for APC 0339 only if the tests described above are billed on the same claim as the observation service. (We did not propose to require telemetry and other ongoing monitoring services as criteria to make separate payment for observation services. Although these services are often medically necessary to ensure prompt diagnosis of cardiac arrhythmias and other disorders, we do not believe they are necessary to support separate payment for observation services.) In the proposed rule, we listed the following ICD-9-CM diagnosis codes that hospitals would be required to bill to receive payment for APC 0339:
For Chest Pain:
411.1 Intermediate coronary syndrome
411.81 Coronary occlusion without myocardial infarction
411.0 Postmyocardial infarction syndrome
411.89 Other acute ischemic heart disease
413.0 Angina decubitus
413.1 Prinzmetal angina
413.9 Other and unspecified angina pectoris
786.05 Shortness of breath
786.50 Chest pain, unspecified
786.51 Precordial pain
786.52 Painful respiration
786.59 Other chest pain
For Asthma:
493.01 Extrinsic asthma with status asthmaticus
493.02 Extrinsic asthma with acute exacerbation
493.11 Intrinsic asthma with status asthmaticus
493.12 Intrinsic asthma with acute exacerbation
493.21 Chronic obstructive asthma with status asthmaticus
493.22 Chronic obstructive asthma with acute exacerbation
493.91 Asthma, unspecified with status asthmaticus
493.92 Asthma, unspecified with acute exacerbation
For Congestive Heart Failure:
428.0 Congestive heart failure
428.1 Left heart failure
428.9 Heart failure, unspecified
In the proposed rule, we specified the following process to identify the appropriate median cost for APC 0339 (66 FR 44692). First, we identified in the 1999-2000 claims data all hospital outpatient claims for observation using revenue codes 760, 761, 762, and 769. We then selected the subset of these claims that were billed for patients with chest pain, asthma, and congestive heart failure. Because no standard method for coding these claims was in place in 1996, we identified all diagnosis codes that could reasonably have been used to classify beneficiaries as having chest pain, asthma, and congestive heart failure. We then verified that these beneficiaries received appropriate observation care for chest pain, asthma, or congestive heart failure by identifying the claims in which one or more of the tests identified above were performed. The median costs of these claims were used to establish the median costs of APC 0339.
Finally, we stated that we would consider medical research submitted to support the benefits of observation services for conditions other than those we had proposed. This information will assist us in determining whether these other conditions meet the criteria we used to select the three conditions we proposed to include in APC 0339.
We received a large number of comments on this proposal. Many commenters commended our proposal to pay separately for observation services. However, other commenters either had questions about or suggestions on revising our proposal. Those comments and our responses appear below.
Comment:
We received comments requesting that we expand the list of conditions for which we would make a separate payment for observation services. Some commenters listed specific conditions that should be added to the list (for example, abdominal pain, atrial fibrillation, or pyelonephritis) while others asserted that any condition a physician thought required observation should qualify for separate payment. One commenter submitted medical literature as supportive evidence that we should expand our list of conditions. One commenter argued that developing a restricti
This text is long and has been trimmed here. Open the source document for the complete record.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.