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ch 3. CMS payments system overview
CMS payment systems
60
Health Care
Not Applicable
03/06/2017

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Term
DRGs
Definition
Diagnosis related groups. Determine Medicare inpatient hospital reimbursement.
Term
Medicare pays hospitals
Definition
a fixed amount for inpatient services based on the severity-adjusted diagnostic group.
Term
CMS changed the payment methodology in 2009 to
Definition
Medicare Severity-Diagnosis Related Groups (MS-DRGs) to improve the explanation of cost variation by 9.1 percent over the standard CMS DRGs.
Term
The improvement in cost variation
Definition
recognizes severity of illness and resource usage more appropriately. More for sicker and less for less complex care.
Term
MS-DRGs
Definition
The prospective payment system used by Medicare and many other payers for inpatient payments.
Term
Medicare pays hospitals
Definition
a fixed amount based on MS-DRG.
Term
Omnibus Budget Reconciliation Act of 1986 (OBRA '86)
Definition
Marked the congressional request for an outpatient prospective payment system to be developed.
Term
An outpatient facility model was developed by
Definition
3m Health Information Systems (3m HIM): The outpatient Prospective Payment System. (OPPS)
Term
Prospective Payment System
Definition
is a reimbursement method in which payment is a pre-determined, fixed amount based on a classification system of service.
Term
Ambulatory Patient Group (APG)
Definition
system created in 1990 by 3M HIS which several non medicare payers have implemented. (medicaid, BCBS)
Term
For Medicare how is each claim paid for outpt facility reimbursment?
Definition
Each Claim is paid based on the determined interim out patient reimbursement rate
Term
Which Ancillary Service is not subject to APC reimbursement?
Definition
Occupational, Speech, and physical therapy
Term
Special payments under OPPS may be made for new technology items under what circumstance?
Definition
Pass-through paymetns for certain drugs, biological agents, brachytherapy devices, and other medical devices for a period of at least two years but no more than three years
Term
Medicare reimbursable drugs are found in this code book?
Definition
HCPCS Level II
Term
Which Service is reimbursed based on the APC payment method?
Definition
Patient X-ray of left foot in the outpatient department
Term
Packaged services include?
Definition
OR, procedure room, txt room, recovery room, and materials, including supplies and equpiment for the administration and monitoring of anesthesia, observation services, certain pharmaceuticals, drugs, and bilogicals, Ancillary services, clinical dx laboratory tests, procedures described by add on codes, implantable medical devices, guidance svcs, image processing svcs, intraoperative svc's, imaging supervision and interpretation svc's, professional services, such as anesthesia professional svc's
Term
By what payment method is the inpatient hospital facility reimbursed by Medicare?
Definition
IPPS/ MS-DRG
Term
The OPPS payment rate:
Definition
Is an unadjusted national payment that includes beneficiary copayment and the medicare paymetn
Term
Medicare part B pays which out patient svcs?
Definition

emergency rooms

clincial visits

blood and blood products

x ray's

ambulance svc's

Term
Medicare assigns paymetn status indicator svcs to CPT and HCPCS lvl II codes provided in?
Definition
Outpatient hospital
Term
What services are not paid under other Medicare paymetn systems?
Definition
Preventive injections/vaccines from a home health agency if not paid under a home health care plan
Term
Pass-through paymetns are?
Definition
additional payments made for certain drugs, biologicals, and medical devices
Term
The cost to charge ratio is used to determine?
Definition
outlier payments and payments for pass-through devices
Term
How are OPPS svc's paid?
Definition
using the APC status indicator methodology
Term
The implementation regulations for opps can be located in which publication?
Definition
federal register
Term
the payment rate for hospitals and CMHCs includes?
Definition
Medicare payments amount for the services, deductible, and copayment or coinusrance
Term
Which regulation marked the congressional requrest for an opps to be developed?
Definition
The Omnibus Budget reconcillation act of 1986
Term
APG morphed into what?
Definition
APC
Term
MS-Drg's have proved to be benefical for payers in?
Definition
Controlling the costs for hospital admissions that the OBRA '86 marked the congressional request for an out patient prospective paymetn system to be developed
Term
What does APC system do?
Definition
Groups together procedures using similar resources and assigns a composite rate to that APC
Term
When did CMS implement OPPS?
Definition
August 1, 2000
Term

What does the OPPS system cover?

 

Definition
Hospital outpatient services recieved in the hospital or a community mental health center (CMHC)
Term
What does OPPS not apply to?
Definition
Beneficiaries of the medicare advantage plan
Term
The payment for a hospital or CMHC is a?
Definition
national rated adjusted to reflect personnel earnings in hospitals in the area where the services are provided
Term
When does Medicare update the payment rates?
Definition
January 1st of each year
Term
what is the primary objective of OPPS?
Definition
to simplify payment, encourage hospital effciency, an densure payments are adequate to compensate hospitals for legitimate costs
Term
Under the Hospital OPPS, hospitals and CMHC are paid a set amount for o/p svcs to beneficiaries coverd by medicare, The payment rate includes?
Definition

Meidcare payment for the service

yearly medicare part b deductible

copayment or coinsurance.

Term
The Opps rate is?
Definition
an unadjusted national payment amount that includes the beneficiary copayment and the medicare payment (part B deductable and copay)
Term
Labor related amount?
Definition
adjusted for area wage differences using the inpatient wage index value for the locality in which the hospital or a CMHC is located. It accounts for hospital personnel salaries that vary from state to state.
Term
Medicare uses opps to pay for svc's from other facitilites, these services include?
Definition
  • some medicare part B svc's for i/p hospital care for beneficiaries w/o or with insufficent medicare part a benefits
  • preventive injections/vaccines, antigens, casts, and splints from a home health agency if not paid under a home health care plan
  • preventative injections/vaccines from a comprehensive o/p rehabiliation facility
  • splints, antigens and casts to a hospice pt to treat a non terminal illness
  • some o/p services through a SNF
  • partial hospitaliztion svc's from a CMHC
  • independ ambulatory surgery centers
Term
O/P Svc's paid under OTHER medicare payment systems:
Definition
  • clincial dx laboratory svcs
  • professional svcs of physicians and NPP's are paid under the physician fee schedule (PFS)
  • screening mammograms
  • ambulance services
  • physcial therapy, occupational therapy, or speech-language therapy services
  • DME, non implantable prosthetics, and orthotics
  • dialysis for ESRD
  • svc that requires an i/p stay paid under the hospital IPPS
  • O/p hospital svc from CAHs
  • O/P svcs from and IHS hospital
  • O/P svcs from any hospital in maryland
  • O/P svcs from andy hospital located in 50sttates 
Term
what was OPPS designed to do?
Definition
control hospital reimbursments for outpatient svcs.
Term
Pass through codes are?
Definition
special drugs, chemo drugs and supplies, new techonology and are paid in addition to APC package paymetns
Term
OPPS serves 2 purposes
Definition
  1. saves medicare money
  2. allows facilites to look @ procedures, pymts and projected budgets
Term

True or False?

3rd party payers have their own respective reimbursement guidelines?

Definition
True
Term

True or False?

3rd party payers may reimburse with or with out a CPT Or HCPCs code?

Definition
True-must at least have a revenue code
Term
special payment for OPPS may be made for new tech items and services in 2 ways..
Definition
  1. transitional pass through paymetns 
  2. special APC groups established if it is not eligable for pass through paymetn or insufficient datea to assign an APC group 
Term
All services and items with in an APC group are?
Definition
comparable clinically and use similar resources
Term
The apc system is?
Definition
a payment methodology for out patient, or ambulatory facility serivces
Term
The apc payment system does not include?
Definition
professional componest of ambulatory care
Term

True or False

Relative weight for each APC classification is not recalibrated each year

Definition
False- done every year based on previous years claims and cost reported data for o/p services
Term
services not incudled  in OPPS payemtn for OP hospital services
Definition
  • physician or NPP professional fees
  • Services not covered by Medicare statute
  • ambulance services and transportation
  • therapies
  • clinical labaratory
  • screening for dx mammography
  • dialysis
  • i/p svcs
  • services not reasonable and necessary for the dx or txt of the illnesss or disease
  • DME supplied  by the hospital for the pt to take home
Term

There are seperate APC's for:

 

Definition
  • partial hospitlization
  • procedures
  • medical visits
  • select ancillary svcs
  • transitional pass through services and drugs
  • new technologies
  • blood and blood products
Term
status indicators
Definition
identify whether a procedure is eligible for an apc assignment. it determines under what payment system the services are paid.  it is assigned to every HCPC's code
Term
What is important to remember about status indicators?
Definition
each code has the same status indicators as the APC in which it is assigned to
Term
Packaged services are?
Definition
all inclusive and not seperatly billable
Term
When mulitple surgeries are billed the APC will?
Definition
Bill the seccond lesser procedure at 50%
Term
Medicare pays each claim in an O/P facility based on?
Definition
Interium O/P reimbursement rate
Term
How are Ancillary svcs paid when performed in the ancillary areas of the hospital?
Definition
paid accord to an ancillary vicist gropu APC assignment, also paid in combination with medical and surgical services when provided.
Term
Which ancillary svcs are not subject to APC reimbursment now?
Definition
Lab services, physical, occupational and speech therapies
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