OPPS Proposed Rule for 2002 Holds Surprises Some Good, Some Bad

The CMS proposed changes to the OPPS in 2002 will increase total payments to hospitals by 2.3 percent, according to CMS. However, not all types of hospitals will benefit to the same extent. The boost for major teaching hospitals will be only 1.3 percent. Reimbursement for psychiatric facilities will drop 3.1 percent and for children's hospitals 2.2 percent. For the first time, as required by law, CMS consulted with an outside panel of experts, composed of providers' representatives, before proposing its adjustments to APCs and codes.

Observation Payment Proposed

One of the proposals hospitals applaud would pay for some observation services in the ED by creating a new code, APC 0339 (observation). In reaching this decision, CMS said it had to "balance the issues of access, medical necessity, potential for abuse, and need to ensure appropriate payment." However, the proposed rule sets strict conditions for paying observation services.
 
CMS reviewed the issue and concluded that payment for observation service would be justified in the case of chest pain, asthma and congestive heart failure if specific diagnosis codes are documented. "For these conditions, observation care avoided significant morbidity and mortality from inappropriate discharge to home while at the same time avoiding unnecessary inpatient admissions," the rule states.  

To qualify for APC 0339, observation must be reported with a department or clinic visit. The physician must use "risk stratification criteria" before ordering observation. Diagnostic services, such as electrocardiograms or nebulizer treatments, must be provided with the observation service. Other requirements will have ED and clinic staff watching the clock to monitor the start and stop times of observation services.

Are E/M Regulations Coming?

Another surprising element of the new rule is an indication that CMS is willing to back away from their former position that E/M coding should be left up to individual organizations. "We are interested in developing and implementing a standardized coding process for facility reporting of E/M services," the rule states. "This process could include the use of current HCPCS codes or the establishment of new HCPCS codes."
 
This could be good news for facilities still struggling to develop a consistent E/M coding system. For others that have already developed their own methodology and incorporated it into their procedures and systems, the prospect of starting all over again is likely to be less welcome. "The systems that hospitals have put in place at some considerable expense and effort will have to be blown up and replaced with a new modality that has become the national standard," says Dean Farley, PhD, vice president, healthcare policy and analysis at HSS Health Policy Research Center in Germantown, Md.  [...]

- Published on 2001-10-01