Medicare Pricing for Indian Health Services (IHS) Under the Medicare-Like Rate (MLR) Policy Sarah Shirey-Losso Joe Bryson

Objectives After this presentation, you will be able to: Understand how MLR affects you Know what payments fall under the MLR policy Have a broad understanding of various Medicare payment systems Be familiar with obtaining PPS Pricer software Be familiar with how to navigate PC Pricer software Understand how to enter necessary pricing inputs Know where to go to obtain necessary pricing information

What payments fall under the MLR Policy? Inpatient Acute Care Prospective Payment System (PPS) Inpatient Psychiatric PPS Inpatient Rehabilitation PPS Long-Term Care Hospital PPS Outpatient PPS Skilled Nursing Facility PPS Reasonable Cost Reimbursement to non-PPS hospitals

How can I identify claims from the various providers? The Medicare Provider Number also know as the OSCAR number

Provider Number Ranges Acute care hospitals XX0001-XX0879 Psychiatric Hospitals XX4XXX, ‘S’ or ‘M’ in the third digit Rehabilitation hospitals XX3025-XX3099, ‘T’ or ‘R’ in the third digit Long Term Care Hospitals XX2000-XX2299 Critical Access Hospitals XX1300-XX1399

Provider Number Ranges (cont.) Skilled Nursing Facilities XXX5XXX Swing Beds ‘U’, ‘W’, ‘Y’, or ‘Z’ in the third digit Children's Hospitals XX300-XX3399 Cancer Hospitals 100271, 100079, 360242, 500138, 050146, 050660, 220162, 330154, 330354, 390196, 450076

Instructions for Downloading and Running CMS PPS PC Pricers Joe Bryson

Step 1: Go to PC Pricer website to obtain all CMS PPS PC Pricer Software. Note: For illustration purposes, we have included Inpatient PPS PC Pricer screen-shots, though these the steps will be the same for downloading any PC Pricer software.

Step 2: Select PC Pricer

Step 3: Install PC Pricer version based on claim’s Through Date Double-click

You will receive the following window. Select “Open.” The following window will appear. Double-click on the file.

The following will appear. Select “Run.”

The following window will appear. To unzip to the default C: drive on your PC, select “Unzip.” To unzip to another drive, first replace the “C” with the letter of the drive you wish to unzip to. Then, select “Unzip.” After a few seconds, you will receive the following window. Click “OK.”

Step 4: Opening the PC Pricer Go to the PC Pricer folder you extracted and saved to your PC. Below is what an idea of what the IPPS Pricer Folder looks like. Double-Click

The following window will appear. Select the “.exe” formatted file.

The following window will appear.

Step 5: Running the PC Pricer Type in the letter of the drive you unzipped the PC Pricer to (such as, F) to initiate the program.

The following PC Pricer HOME screen will appear. Select ‘Y’ if you would like to calculate payment. Select ‘V’ if you would like to view provider specific information Select ‘Q’ to quit and exit the program.

Calculating Payment Calculating payment is specific to each PPS Therefore, we will provide you with specific instructions on how to enter data for calculation among the following PC Pricers Inpatient PPS Inpatient Rehabilitation Facility PPS Inpatient Psychiatric Facility PPS

Inpatient Prospective Payment System (IPPS) Pricer Sarah Shirey-Losso

Background Inpatient Acute Care Hospitals are paid under this system Children’s Hospitals, Cancer Hospitals, Critical Access hospitals are not For background on IPPS, see: http://www.cms.hhs.gov/AcutInpatientPPS/01_overview.asp#TopOfPage Internet Only Manual (IOM) Pub. 100-04, Chapter 3 http://www.cms.hhs.gov/manuals/downloads/clm104c03.pdf

CORE ELEMENTS OF THE IPPS PAYMENT The standardized amounts, which are the basic payment amounts A wage index to account for differences in hospital labor costs The DRG relative weights, which account for differences in the mix of patients treated across hospitals An add-on payment for hospitals that serve a disproportionate share of low-income patients

CORE ELEMENTS OF THE IPPS PAYMENT (cont.) An add-on payment for hospitals that incur indirect costs of medical education (IME) An additional payment for cases that are unusually costly, called outliers An additional payment for cases that have new technologies

Additional Information The IPPS is updated annually every October CMS has created a web-based Pricer program to calculate the claim payment Known as the IPPS PC Pricer

Calculating Payment Using the IPPS PC Pricer

Enter ‘Y’

Enter the OSCAR # here

Enter Patient ID if desired

Enter From Date on claim

Enter Through Date on claim

Enter DRG

Enter ‘N’

Enter ‘N’

Enter ‘Y’ if Patient Status Code = 02

Enter ‘Y’ if PS Code is: 03, 05, 06, 62, 63, or 65

Enter Total Covered Charges on claim

Enter ‘Y’ if Procedure Code is 86.98

Enter ‘Y’ if Procedure Code 39.73

Enter ‘Y’ if Procedure Code is 84.58

Enter ‘Y’ if Procedure Code is 52.85

Enter how many times Procedure Code 52.85 is reported (max of 2)

Enter ‘Y’ to calculate PPS Payment

Total IPPS Payment

For additional assistance please contact: Sarah Shirey-Losso (410)786-0187 or sarah.shirey-losso@cms.hhs.gov Joe Bryson (410)786-2986 or joseph.bryson@cms.hhs.gov Valeri Ritter (410)786-8652 or valeri.ritter@cms.hhs.gov

Inpatient Rehabilitation Facility Prospective Payment System (IRF PPS) Pricer Sarah Shirey-Losso

Background Paid under the IRF PPS: Freestanding inpatient rehab hospitals Rehab units located in acute care hospitals Critical access hospitals For background, please refer to: http://www.cms.hhs.gov/InpatientRehabFacPPS/01_Overview.asp#TopOfPage Internet Only Manual (IOM) Pub. 100-04, Chapter3, Section 140 http://www.cms.hhs.gov/manuals/downloads/clm104c03.pdf

Background The IRF PPS will utilize information from a patient assessment instrument (IRF PAI) to classify patients into distinct groups based on clinical characteristics and expected resource needs Rehab hospitals have the IRF PAI in their facility and determine the case-mix group (CMG)

CORE ELEMENTS of IRF PPS The standardized amounts, which are the basic payment amounts A wage index to account for differences in hospital labor costs The CMG relative weights An add-on payment to compensate hospitals for their percentage of low-income patients (LIP) An add-on payment for hospitals located in rural areas

CORE ELEMENTS of IRF PPS (cont.) An add-on payment for hospitals that incur indirect costs of medical education An additional payment for cases that are unusually costly, called outliers Additional adjustments are made for: interrupted stays short stays of less than three days transfers (defined as less than the average length of stay for the CMG)

Additional Information IRF PPS is updated annually in October The following slides demonstrates the IRF PPS PC Pricer

Calculating Payment Using the IRF PPS PC Pricer

Enter ‘Y’

Enter OSCAR Number

Enter patient ID if desired

Enter CMG (revenue code 0024)

Enter PS code from the claim

Enter '0'

Enter covered days

Not Applicable to IHS (tab through)

From date Thru date

Enter covered charges

Enter 'Y'

Total IRF PPS Payment

For additional assistance please contact: Sarah Shirey-Losso (410)786-0187 or sarah.shirey-losso@cms.hhs.gov Joe Bryson (410)786-2986 or joseph.bryson@cms.hhs.gov Valeri Ritter (410)786-8652 or valeri.ritter@cms.hhs.gov

Inpatient Psychiatric Facility Prospective Payment System (IPF PPS) Pricer Sarah Shirey-Losso

Inpatient Psychiatric Facility PPS Who is paid under the IPF PPS? Freestanding inpatient psychiatric hospitals Psych units located in acute care hospitals Critical access hospitals Unlike IPPS, IRF, and LTCH, IPFs are paid on a per diem methodology at discharge

CORE ELEMENTS of IPF PPS For background on IPF PPS, refer to: http://www.cms.hhs.gov/InpatientPsychFacilPPS/01_overview.asp#TopOfPage Pub. 100-04, Chapter 3, Section 190 http://www.cms.hhs.gov/manuals/downloads/clm104c03.pdf

CORE ELEMENTS of IPF PPS Under the IPF PPS, the Federal per diem rate includes inpatient operating and capital related costs (including routine and ancillary services) and is adjusted by: Geographic factors Patient characteristics: Age, Presence of specified comorbidities Facility characteristics: rural adjustment and indirect teaching Services provided: Diagnosis Related Group (DRG) classification, Length of stay

CORE ELEMENTS of IPF PPS (cont.) Additional payments are provided for the following: Patients treated in IPFs that have a qualifying emergency department receive a higher payment for the first day of the stay The number of Electroconvulsive Therapy (ECT) treatments furnished; and Outlier payments for cases that have extraordinarily high costs

CORE ELEMENTS of IPF PPS (cont.) The per diem base rate excludes pass-through costs such as bad debts and graduate medical education (GME) Release Schedule for the IPF PPS: annual release occurs in July updates are made in October for comorbidities and DRGs

Calculating Payment Using the IPF PPS Pricer

Enter ‘Y’

Enter provider number

Enter patient ID if desired

Enter DRG (15 valid DRGs for IPF)

Enter patient age (at admission)

Enter the billed length of stay

Enter # of times 94.27 is on claim

Enter the PS code from the claim

Enter 'N'

Enter 'N' unless source of admission on the claim is 'D'

Enter discharge date

Enter total covered charges billed on the claim

Enter all "other" DX on the claim

Enter primary procedure code followed by all other procedure codes

Enter 'Y' to calculate PPS payment

Total IPF PPS payment

For additional assistance please contact: Sarah Shirey-Losso (410)786-0187 or sarah.shirey-losso@cms.hhs.gov Joe Bryson (410)786-2986 or joseph.bryson@cms.hhs.gov Valeri Ritter (410)786-8652 or valeri.ritter@cms.hhs.gov

Long Term Care Hospital PPS Sarah Shirey-Losso

LTCH PPS: Definition Certified under Medicare as short-term acute-care hospitals and for the purpose of Medicare payments in general Defined as having an average inpatient length of stay of greater than 25 days DRG based payment system (like IPPS); called LTC-DRGs

LTCH PPS: Background For background on IPF PPS, refer to: http://www.cms.hhs.gov/LongTermCareHospitalPPS/01_overview.asp IOM Pub. 100-04, Chapter 3, Section 150 http://www.cms.hhs.gov/manuals/downloads/clm104c03.pdf

CORE ELEMENTS OF THE LTCH PPS PAYMENT The standardized amounts, which are the basic payment amounts A wage index to account for differences in hospital labor costs The LTC-DRG relative weights, which account for differences in the mix of patients treated across hospitals. LTC-DRGs are weighted to account for resources used for more medically complex patients

CORE ELEMENTS OF THE LTCH PPS PAYMENT (cont.) An additional payment for cases that are unusually costly, called outliers Adjustments for short stay cases, interrupted stays, and co-located providers

LTCH PPS Does Not Include Bad Debts DME Blood Clotting Factors

Additional Information The LTCH PPS is updated annually every July DRGs are updated in October of each year

Additional Information (cont.) CMS has created a web-based Pricer program to calculate the claim payment. Training Guide and Implementation instructions are located at: http://www.cms.hhs.gov/PCPricer/07_LTCH.asp#TopOfPage

For additional assistance please contact Sarah Shirey-Losso (410) 786-0187, sarah.shirey-losso@cms.hhs.gov Joe Bryson, (410) 786-2986, joseph.bryson@cms.hhs.gov Valeri Ritter, (410) 786-8652, valeri.ritter@cms.hhs.gov

Skilled Nursing Facility Prospective Payment System (SNF PPS) Pricer Joe Bryson

SNF PPS: Background SNF and Swing Bed (SB) facilities are paid under this system Critical Access Hospital Swing Beds are not

SNF PPS: Background (cont.) For background on SNF PPS, see: http://www.cms.hhs.gov/center/snf.asp Pub. 100-04, Chapter 6: http:///www.cms.hhs.gov/manuals/downloads/clm104c06.pdf Pub. 100-04, Chapter 7: http://www.cms.hhs.gov/manuals/downloads/clm104c06.pdf

CORE ELEMENTS OF THE SNF PPS PAYMENT Unadjusted federal per diem rate (basic payment amount) Wage index to account for differences in area wage levels (Note: Hospital wage data is used) Case-mix relative weights, which account for differences in the mix of patients treated across SNFs and SBs Add-on payment for patients with AIDS, made after all other adjustments (wage and case-mix)

CORE ELEMENTS OF THE SNF PPS PAYMENT (cont.) The SNF PPS is updated annually every October CMS has created a web-based Pricer program to calculate the claim payment Training Guide and Implementation instructions are located at: http://www.cms.hhs.gov/PCPricer

For additional assistance please contact: Jason Kerr (410)786-2123 or jason.kerr@cms.hhs.gov

The Outpatient Prospective Payment System (OPPS) Pricer Joe Bryson

Introduction to OPPS: Coverage The Outpatient PPS covers the following: Hospital outpatient services Certain Part B services furnished to inpatients with no Part A benefits Partial hospitalization services furnished by Community Mental Health Centers (CMHCs) Certain vaccines Splints, casts and antigens for Hospice patients

Introduction to OPPS: Coverage (cont.) Services provided from a clinic/unit ONLY if the clinic/unit is billing under the hospital’s Medicare provider number (i.e., OSCAR) and the services were billed on a 13x Type of Bill (TOB) Professional services and professional components are NOT covered under MLR

Introduction to OPPS: Key Terms Healthcare Common Procedure Coding System (HCPCS): Code that is billed on the claim to represent a procedure, item or service. Each HCPCS is mapped to an APC for payment Ambulatory Payment Classification (APCs): Payment group for services that are clinically similar and require similar resource use Coinsurance: Amount of patient responsibility taken out of the total APC payment. Reimbursement: Amount paid to hospital minus all applicable coinsurance and deductibles

Introduction to OPPS: Payment Adjustments Packaging: A bundling of items and services that are considered to be an integral part of another billed service paid under the OPPS. No separate APC payment is made for packaged services Discounting: Reduction in APC payment due to multiple procedures on the same day or due to a terminated procedure

Introduction to OPPS: Payment Adjustments (cont.) Outlier: Additional payment made for extraordinarily high cost services Geographic: Wage adjustment to account for differences in wages across geographical areas. Sixty percent of the total OPPS payment is wage-adjusted by multiplying payment by the hospital’s wage index

Introduction to OPPS: Manual Reference To view detailed claim processing instructions, go to Publication 100-04 (Claims Processing), Chapter 4 at: http://www.cms.hhs.gov/manuals/downloads/clm104c04.pdf

OPPS Pricing: Background The OPPS Pricer determines payment by using inputs from the following: Hospital claim data Outpatient Code Editor (OCE) output Provider specific data (pulled from the Outpatient Provider Specific File)

OPPS Pricing: Outpatient Code Editor (OCE) Two major functions of the OCE: Edit claim data to identify errors Set payment flags to direct the OPPS Pricer on how to price a particular claim

OPPS Pricing: Pricer There is no OPPS PC Pricer Pricer Files Are posted at: http://www.cms.hhs.gov/PCPricer/08_OPPS.asp#TopOfPage Consist of: pricing logic APC rates wage indices payment adjustment tables provider specific information Can assist in manual pricing

OPPS Pricing: Pricer Files Below are the filenames and descriptions of the Pricer files that can be downloaded: Baseapc – readable APC table Basewinxv – readable MSA table Basewnxcv – readable CBSA table Devred – list of devices for device reduction Oppsacpc – compressed APC table Oppscal – pricer calculation logic Oppsof – compressed list of devices for offsetting Oppswinxcv – compressed MSA table Oppswnxcv – compressed CBSA table Psfall – Provider-Specific Data

OPPS Pricing: Obtaining Software Contact a vendor/contractor to obtain OPPS pricing software or to simply contract this work out Selection of a vendor is based on your individual tribe’s preference and resources. Vendor information can be obtained via the internet

OPPS Pricing: References Outpatient Code Editor - Information regarding the OCE can be found at the following website: http://www.cms.hhs.gov/OutpatientCodeEdit/01_Overview.asp#TopOfPage OPPS Pricer - OPPS Pricer files can be obtained by selecting the applicable quarterly link at the following site and downloading the files: http://www.cms.hhs.gov/PCPricer/08_OPPS.asp#TopOfPage

Reasonable Cost Reimbursement Joe Bryson

Reasonable Cost Providers Critical Access Hospitals (CAHs) Medicare provider number (also known as OSCAR) range: xx1300 – xx139 TEFRA Children’s Hospitals Provider number range: xx3300 – xx3399 Cancer Hospitals Territory Hospitals

Cost Reimbursement under IHS/CHS No cost report settlement under IHS/CHS Apply the hospital’s Cost-to-Charge Ratio (CCR) to the billed “covered” charges on the claim

How do I obtain a hospital’s Cost-to-Charge Ration (CCR)? Contact the servicing hospital’s Medicare Fiscal Intermediary (FI)

Reasonable Cost: TEFRA Payment Example Children’s Hospital LOS 7/1/07 – 7/5/07 Total Covered Charges = $12,000.00 CCR = 0.62 Multiply total covered charges by CCR: $12,000 x .62 = $7,440.00

Reasonable Cost: CAH Payment Example LOS 7/1/07 – 7/3/07 Total Covered Charges = $2,935.60 CCR = .62 Multiply total covered charges by CCR: $2,935.60 x .62 = $1,820.07 2. Multiply Cost by 101%: $1,820.07 x 101% = $1,838.28 ***Same formula applies to outpatient CAHs

For additional assistance, please contact: Cindy Murphy at (410)786-5733 or cindy.murphy@cms.hhs.gov

The End