Industry News

CMS Releases January 2019 Hospital OPPS Update

The Centers for Medicare & Medicaid Services (CMS) recently published a Medicare Learning Network (MLN) Matters article that outlines January 2019 updates to the Hospital Outpatient Prospective Payment System (OPPS).  The policy changes are effective January 1, 2019, unless noted otherwise.

Key provisions of the January 2019 update include:

Revisions to I/OCE Data Files, Instructions and Specifications 

Key revisions include:

  • New device pass-through categories. The January 2019 update includes one new device pass-through category, for a “generator, neurostimulator (implantable), non-rechargeable, with transvenous sensing and stimulation leads” (HCPCS Code C1823).
  • Device offset from payment. The C1823 device should always be billed with Current Procedural Terminology (CPT) Code 0424T, which is assigned to ambulatory payment classification (APC) 5464 for Calendar Year (CY) 2019.  The device offset from payment represents a deduction from pass-through payments for the device in category C1823.

Five New Payable Procedure Codes

The update includes five new separately payable HCPCS Codes (short descriptor in parentheses): C9751 (Microwave bronch, 3D, EBUS), C9752 (Intraosseous des lumb/sacrum), C9753 (Intraosseous destruct add’l), C9754 (Perc AV fistula, any site), and C9755 (RF magnetic-guided AV fistula).

New HCPCS Code C1890 for When No Device is Used in ASCs for Device-Intensive Procedures

CMS finalized a policy that applies the ambulatory surgical center (ASC) device-intensive procedure payment methodology when a device-intensive procedure is furnished with a surgically inserted or implanted device, including single use medical devices.  CMS established HCPCS C1890 to be reported when an ASC performs a device-intensive procedure without an implantable or inserted medical device, because devices are packaged into the procedure payment for device-intensive procedures and ASCs do not report packaged codes.  HCPCS C1890, along with the device-intensive procedure code, will signify that the device was not furnished with the device-intensive procedure.  The code is payable in the ASC setting only.

Three New Comprehensive APCs

Three new C-APCs were finalized under the existing C-APC policy as a result of the review: C-APC 5163 (Level 3 Ear, Nose, and Throat (ENT) Procedures), CAPC 5183 (Level 3 Vascular Procedures), and C-APC 5184 (Level 4 Vascular Procedures).  The three additional C-APCs increases the total number of C-APCs to 65 for CY 2019.

CY 2019 Changes Inpatient-Only List 

CMS removed four procedures and added one procedure to the IPO list for CY 2019, as follows:

CY 2019 CPT CodeLong DescriptorAction
31241Nasal/sinus endoscopy, surgical; with ligation of sphenopalatine arteryRemoved
01402Anesthesia for open or surgical arthroscopic procedures on knee joint; total knee arthroplastyRemoved
0266TImplantation or replacement of carotid sinus baroreflex activation device; total system (includes generator placement, unilateral or bilateral lead placement, intra-operative interrogation, programming, and repositioning, when performed).Removed
00670Anesthesia for extensive spine and spinal cord procedures (eg, spinal instrumentation or vascular procedures)Removed
C9606Percutaneous transluminal revascularization of acute total/subtotal occlusion during acute myocardial infarction, coronary artery or coronary artery bypass graft, any combination of drug eluting intracoronary stent, atherectomy and angioplasty, including aspiration thrombectomy when performed, single vesselAdded

Modifier “ER” 

Hospitals are required to report new HCPCS modifier “ER” with every claim line for outpatient hospital services that are furnished in an off-campus provider-based emergency department that meet the definition of “dedicated emergency department” under Emergency Medical Treatment and Labor Act (EMTALA) regulations.  Modifier ER is reported on the UB-04 form, or CMS form 1450, for hospital outpatient services.

Method to Control for Unnecessary Increases in Utilization of G0463 with Modifier “PO” 

The Final Rule finalized the CMS policy to apply an amount equal to the site-specific Physician Fee Schedule (PFS) payment rate for nonexcepted items and services.  The CY 2019 PFS-equivalent payment amount to nonexcepted off-campus provider-based departments (PBDs) is 40 percent of the OPPS payment for CY 2019, which is 60 percent less than the OPPS rate.  The policy will be phased in over two years, with half of the 60 percent reduction (i.e., a 30 percent reduction) applying in CY 2019.

Drugs, Biologicals and Radiopharmaceuticals 

CMS created 43 new HCPCS codes for reporting drugs and biologicals in the hospital outpatient setting where codes had not been previously available.   Many other drug, biological, and radiobiological HCPCS and CPT codes have undergone changes in their descriptors that will be effective for CY 2019.  Several HCPCS C-codes were also deleted effective December 31, 2018 to be replaced with permanent codes effective in CY 2019.

  • Drugs and biologicals with payments based on Average Sales Price (ASP). Many payment rates for drugs and biologicals have changed from the values published in the CY 2019 OPPS/ASC final rule with comment period due to new ASP calculations based on Q3 2018 sales price submissions.  Updated rates are available in the January 2019 update of the OPPS Addendum A and B.
  • Drugs and biologicals based on ASP methodology with restated payment rates. Some drug and biological payment rates based on ASP methodology will have payment rates that are corrected retroactively.  The corrected rates will be available on the first date of the quarter through the CMS website.

Skin Substitute Procedure Edits 

The MLN Matters article provides a table listing skin substitute products and their assignment as either a high cost or a low cost skin substitute product.

HCPCS Code Q4122 billed with Revenue Code 0278 or 0636

HCPCS Code Q4122 is used as an applied skin substitute and as an implanted biologic in breast reconstruction.  These procedures are reported with two different revenue codes.  HCPCS Code Q4122 now may be billed with either revenue code 0278 (other implants) or revenue code 0636 (drugs requiring detailed coding).

Changes to OPPS Pricer Logic 

  • New copayment amounts will be limited to a maximum of 40 percent of the APC payment rate. Each service’s copayment amount cannot exceed the CY 2019 inpatient deductible of $1,364.  Most OPPS services have a copayment set at 20 percent of the APC payment rate.  New OPPS payment rates and copayment amounts will be effective January 1, 2019.
  • The multiple threshold payment of 1.75 will not change for hospital outlier payments under OPPS in CY 2019. The threshold is multiplied by the total line-item APC payment to determine outlier payment eligibility and to determine the outlier payment.
  • The OPPS outlier payment fixed-dollar threshold increased from CY 2018, which must be greater than the APC payment amount plus $4,825 to qualify for outlier payments in CY 2019.
  • The OPPS Pricer will apply a 0.980 reduced update ratio to the payment and copayment for hospitals that fail to meet outpatient quality data reporting requirements or CMS validation edits. Outlier payments will be calculated with the reduced payment amount.
  • CMS is adopting the FY 2019 Inpatient Prospective Payment System (IPPS) post-reclassification wage index values, effective January 1, 2019. The wage index values include application of the CY 2019 out-commuting adjustment to non-IPPS hospitals as they were implemented through the Pricer logic.
  • APC claims that require implantable devices and that have device offsets of greater than 30 percent will have a device offset cap applied, effective January 1, 2019. The offset cap will be based on the credit amount listed in the “FD” value code.  The “FD” value code credit amount will be capped by the device offset amount for that APC.

Coverage Determinations 

CMS noted that a HCPCS code assigned to a drug, device, procedure, or service only indicates how the drug, device, product, procedure, or service may be paid if it is covered by Medicare.  Medicare Administrative Contractors will ultimately determine whether a drug, device, product, procedure, or service meets program coverage requirements.

The MLN Matters article is available at: