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March 27, 2018

Spring OPPS Update Released

The Centers for Medicare and Medicaid Services (CMS) summarized the spring update to the outpatie... Learn More

Therapy Caps Repealed and Payment for Therapy Assistant Services Lowered

Medicare payment caps on outpatient therapy were permanently repealed effective January 1, 2018. ... Learn More

OIG Update Work Plan, Studies Cardiac Device Credits

In March, the Office of Inspector General (OIG) posted several updates to its existing Work Plan,... Learn More

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OPPS Final Rule Addresses Two-Midnight Rule, Restructures ASCs

January 12, 2016:

The final rule for the outpatient prospective payment system (OPPS) was published in the Federal Register in mid-November. In addition to updating the ambulatory surgery center (ASC) conversion factors, CMS has finalized a two-midnight rule provision, created a new status indicator for comprehensive services, and restructured some ASCs for 2016.

The 2016 conversion factor for ASCs meeting quality reporting requirements is $44.177, a slight increase over the 2015 factor of $44.058. ASCs not meeting reporting requirements have a conversion factor of $43.296 in 2016, 1.7 percent less than the 2015 figure.

Other provisions in the final rule:

Two-midnight rule: CMS will allow exceptions to the two-midnight benchmark for inpatient stays to be paid under Part A, as determined on a case-by-case basis by the physician caring for the beneficiary. The decision would be subject to medical review. Part A covers inpatient admissions that span at least two midnights or stays the physician reasonably expected at admission to span two midnights but did not because of unforeseen circumstances. For instance, the physician may admit a patient expecting a stay of at least two midnights (an expectation supported by medical documentation), but the patient dies, is transferred, improves unexpectedly, or leaves against medical advice before two midnights have passed.

The agency warns that stays under 24 hours should rarely qualify for the exception. CMS also notes that, as of October 1, 2015, quality improvement organizations (QIOs), rather than Medicare administrative contractors (MACs), are conducting medical reviews of short inpatient stays affected by the two-midnight rule.

New status indicator: For calendar year 2016, new status indicator J2 designates specific combinations of services that would allow for all other OPPS payable services and items reported on the claim to be deemed adjunctive services representing components of a comprehensive service. Using J2 would indicate that a single prospective payment for the comprehensive service based on the costs of all reported services on the claim would be appropriate. Medicare will pay for all qualifying extended assessment and management encounters through a newly created Comprehensive Observation Services APC (C-APC 8011) and assign the services within this APC to new status indicator J2 for claims that meet the following criteria:

  • The claims do not contain a HCPCS code to which CMS has assigned status indicator T that is reported with a date of service on the same day or one day earlier than the date of service associated with HCPCS code G0378.
  • The claims contain eight or more units of service described by HCPCS code G0378.
  • The claims contain one of the following codes: HCPCS Level II code G0379 on the same date of service reported for code G0378; CPT code 99284; CPT code 99285 or HCPCS Level II code G0384; CPT code 99291; or HCPCS Level II code G0463 provided on the same date of service or one day before the date of service reported for G0378.
  • The claims do not contain a HCPCS code to which CMS has assigned status indicator J1.

Payment for advanced care planning: CMS is paying separately for advanced care planning as described by CPT code 99497 when it is the only service provided.

Three new APCs for packaged services: The list of conditionally packaged ancillary services has been expanded to include three additional APCs: APC 5734 (Level 4 Minor Procedures), APC 5673 (Level 3 Pathology), and APC 5674 (Level 4 Pathology). Services in these APCs have been found to be integral, ancillary, supportive, dependent, or adjunctive to a primary service.

APC restructuring: CMS finalized its consolidation and restructuring of the nine clinical families of APCs for 2016.

  • The APCs for upper and lower airway endoscopy procedures (5151, 5152, 5153, 5154, 5155) have been consolidated into one APC grouping of “Airway Endoscopy” with five levels.
  • CMS has assigned the new CPT codes for cardiac contractility modulation therapy system to various APCs.
  • Four cardiac rehabilitation codes (CPT codes 93797 and 93798, and HCPCS codes G0422 and G0423) have been assigned to new APC 5771 (Cardiac Rehabilitation), with a geometric mean cost of about $109.
  • CPT code 93229, for external mobile cardiovascular telemetry, has been reassigned to APC 5722.
  • CMS finalized its proposal to restructure and consolidate the APCs that include diagnostic tests and related services.

New device pass-through process: Beginning in 2016, all device pass-through payment applications have a rule-making component. This means that in addition to the quarterly application process, descriptions of the approved applications will be posted along with the decision rationale in the next OPPS proposed rule. CMS will then review comments, with the possibility that it will reverse its approval decision. Submitters of applications that are not approved at the quarterly submission can either withdraw their applications and opt not to go through the rule-making process, or they can have their applications described in the proposed rule and provide additional information, such as clinical trial results, in hopes of swaying CMS to approve the applications.

Payment adjustments will continue for certain rural sole community hospitals as well as cancer hospitals, and payment for drugs and biologicals without pass-through status will be set at the average sales price plus 6 percent.

Changes to the Outpatient Quality Reporting (OQR) Program: Hospitals that fail to meet the reporting requirements of the Hospital Outpatient Quality Review (OQR) Program would continue to be subject to a further reduction of 2.0 percentage points to the OPD fee schedule increase factor. This results in a reduced conversion factor for CY 2016 of $72.478 for hospitals that fail to meet the hospital OQR requirements.


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