Chapter 7 Ambulatory and Other Medicare- Medicaid Reimbursement Systems

 Prospective Payment System ◦ Determining before-hand what payment will be for a service ◦ Began with hospital inpatient services ◦ Very successful ◦ Implemented next for all Medicare services

 RBRVS for physician services  Ambulance fee schedule  Ambulatory surgical center payment systems  Hospital outpatient payment system

 Resource-based relative value scale  Classifies health services based on the cost of providing the physician services  Takes into account different settings, skill and training levels required to perform the services and the time and risk involved  The federal government’s payment system for physicians

 Relative Value Scale ◦ Compares the resources needed or appropriate prices for various units of service ◦ Takes into account labor, skill, supplies, equipment, space and other costs for each procedure or service

 Relative Value Unit  Exist for more than 4000 types of health services  85% of Medicare payments to physicians  Assigns each service a value representing the true resources involved in producing it ◦ Time and intensity ◦ Expenses ◦ Risk of malpractice

 Physician services ◦ Medical and surgical diagnostics  Radiology  Physician assistants  Physical and occupational therapy  Nurse practitioners  Lab tests are excluded

 Based on CPT Coding  Each CPT code has been assigned an RVU  RVUs reflect national averages but are adjusted to local costs  Each RVU is comprised of 3 elements ◦ Work ◦ PE = physician expenses ◦ MP = malpractice

 The RVU  Geographic Adjustment  Conversion Factor ◦ Converts the relative value into a payment amount

 RVU x Conversion Factor (CF) = Medicare payment fee schedule amount  Example in text – CPT Code ◦ Page 155 in 3 rd Edition ◦ Page 145 in 2 nd Edition

ElementRVUGPCIGeographic Adjustment Adjusted Payment Work Value PE – Physician Expense MP - Malpractice Sum

 Medicare gives bonus payments to physicians who treat patients in underserved areas  Based on the address of the location where service is rendered

 Exclusion of codes will significantly decrease RBRVS payment  Review table ◦ 7.10 in 3 rd Edition ◦ 7.3 in 2 nd Edition ◦ Leaving out the removal of tumors or polyps along with the Esophagoscopy results in a $ loss

 Medicare Part B provides beneficiary coverage for ambulance services ◦ Will provide transport service, only if other means are inadvisable based on the beneficiary’s medical condition ◦ Provided to the nearest facility that is able to provide services for that patient’s condition ◦ Transported from  One hospital to another  To home  To an extended care facility

Two types of ambulance service entities 1.Providers: Associated with a medical facility such as a hospital SNF or HHA or CAH –Retrospective reasonable cost payment  Previous year’s cost-to-charge ratio (CCR) 2.Suppliers: Not associated with a medical facility –Reasonable charge payment mechanism  Fours ways to report ambulance services

 Both types used HCPCS Code Set ◦ Providers  A0030-A0999, excluding A0888 (ambulance codes)  And codes to report type of mileage ◦ Suppliers  A0030-A0999, excluding A0888  Level I codes and  Various other Level II codes

 BBA of 1997 ◦ Added section 1834(1) to the SSA ◦ Required the creation of a fee schedule to establish prospective payment rates for ambulance services ◦ Devised through negotiated rulemaking (Negotiated Rulemaking Act of 1990)  Negotiated Rulemaking Committee on Medicare Ambulance Services Fee Schedule

 The committee was instructed to: ◦ Control Medicare expenditures through PPS ◦ Establish service definitions to link payment to the type of service ◦ Consider regional and operational differences ◦ Consider inflation ◦ Construct a phase-in period for implementation ◦ Require providers and supplier to accept Medicare assignment ◦ Reimburse providers and suppliers at the lower of FS or billed charges

 BBA (cont.) ◦ Established the paramedic intercept service type (discussed under levels of service)  BBRA of 1999 ◦ Modified the definition of rural for the paramedic intercept service type

 BIPA of 2000 ◦ Excluded CAH from the fee schedule payment methodology when the CAH is the only supplier or provider of ambulance services within a 35 mile drive.  Reasonable cost basis ◦ Increased payment rates for rural ambulance mileage ◦ Modified inflation factor for 7/1/01 to 12/31/01  Increased 2% ◦ Eliminated blended payment rate for mileage phase- in provision for suppliers

 Implemented April 1, 2002  Five year phase-in plan  Reimbursement is based on the level of service provided to the beneficiary ◦ Seven levels of service

Levels of Service Chart:

ServiceAcronymDescription Basic Life SupportBLSService level of an Emergency Medical Technician (EMT)-Basic, including the establishment of a peripheral intravenous line. Advanced Life Support, Level 1 ALS1In emergency cases, an assessment provided by an EMT-Intermediate or Paramedic (ALS crew) to determine patient needs and the furnishing of one or more ALS interventions. An ALS intervention is a procedure beyond the scope of an EMT-Basic. Advanced Life Support, Level 2 ALS2The administration of at least three different medications or the provision of one or more ALS procedures. Specialty Care TransportSCTFor critically injured or ill patient, the level of interhospital service furnished is beyond the scope of a paramedic. Ongoing care must be furnished by one or more health professionals in an appropriate specialty area. Paramedic ALS InterceptPIALS services furnished by an entity that does not provide the ambulance transport. Fixed Wing Air Ambulance FWDestination is inaccessible by land vehicle or great distances or other obstacles (heavy traffic) and the patient’s condition is not appropriate for BLS or ALS ground transportation. Rotary Wing Air Ambulance RWHelicopter transport. Destination is inaccessible by land vehicle or great distances or other obstacles (heavy traffic) and the patient’s condition is not appropriate for BLS or ALS ground transportation.

 Immediate response payment ◦ Emergency response involves responding immediately at the basic life support or advanced life support level 1 of service to a 911 or 911-type call ◦ Immediate response is one in which the ambulance begins as quickly as possible to take the steps necessary to respond to a call  Additional payment is provided for the extra overhead expenses incurred to stay prepared at all times for emergency service

 Multiple-patient transport ◦ Example: traffic accident ◦ 2 passengers  Each beneficiary is reimbursed at 75% of the base rate for the level of service provided ◦ 3 or more passengers  Each beneficiary is reimbursed at 60% of the base rate for the level of service provided ◦ Single payment is made for the mileage ◦ Modifier GM is reported with level of service HCPCS code

 Transport of deceased patients ◦ Specific rules  Patient is pronounced dead prior to the ambulance being called, no payment is made to the ambulance provider/supplier  Patient is pronounced dead after the ambulance has been called but prior to its arrival, BLS base rate for group transport or air ambulance base rate payment will be made. Mileage will not be reimbursed.  Patient is pronounced dead during transport, payment rules are followed as if the patient were alive. Modifier QL should be reported with the level of service code.

 Regional variations ◦ Based on point of beneficiary pick-up (zip code) ◦ Geographic adjustment factor is applied  Equal to the practice expense portion of the geographic practice cost index used in the Medicare physician fee schedule ◦ Ground transport  70% of payment rate is adjusted ◦ Air transport  50% of payment rate is adjusted ◦ Mileage is not adjusted

 Rural area service ◦ Adjustment is made when beneficiary pick-up location is rural (zip code)  Rural = area outside of a core-based statistical area (CBSA) or an area identified as rural ◦ Ground  50% add-on is applied to the mileage payment rate for the first 17 loaded miles  25% add-on is applied for miles 18 through 50  No adjustment to the base rate for the level of service provided ◦ Air  50% add-on is applied to the base rate and to all of the loaded mileage

 HCPCS Level II modifiers ◦ Origin and destination modifier must be reported for each trip ◦ Additional modifiers are used  Provided under arrangement of a provider of services (QM)  Furnished directly by a provider of services (QN)

 Seven step process ◦ Takes into consideration  Patient service level  Modifiers  Zip codes  Miles  Add-on payments

1. Identify the level of service code for the transportation provided Does the case meet emergency response criteria? 2. Determine the number of patients transported If yes, append modifier and reduce payment 3. Determine if the Medicare beneficiary was pronounced dead If yes, append modifier and adjust payment 4. Apply the regional variation adjustment Identify zip code 5. Identify the mileage code and number of miles 6. Apply the rural area payment add- on if applicable 50% miles % miles % total miles - air 7. Add together the level of service payment and mileage payment to determine total reimbursement

 “Medicare Payments for Ambulance Transports” report ◦ 25% of the ambulance transport claims did not meet CMS program requirements ◦ deficient claims resulted in $402 million of improper payments

 OIG recommendations: ◦ Pre-payment edits ◦ Post-payment review guidelines ◦ Education, education, education

 Outpatient Prospective Payment System  August 1, 2000  Ambulatory surgery, emergency department, hospital clinics  3M Health Information Systems was awarded a grant to develop the grouping system ◦ APG’s – Ambulatory Patient Groups

 10 types of APC’s  See list in your text ◦ Page rd edition ◦ Page 163 in 2 nd edition

 Covered by Medicare Part B  Must “Accept Assignment” ◦ Must accept Medicare payment in full  ASC List of Covered Procedures ◦ Moving to APC system

 There is a quiz this week ◦ 55 minute time limit ◦ 25 multiple choice questions ◦ Covers all chapters from Unit 1 – Unit 4