medicare pricing for indian health services (ihs) under the medicare-like rate (mlr) policy sarah...

Medicare Pricing for Indian Health Services (IHS) Under

the Medicare-Like Rate (MLR) Policy

Sarah Shirey-LossoJoe 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

PricersJoe Bryson

Step 1: Go to PC Pricer website

Go to http://www.cms.hhs.gov/PCPricer/

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

The following window will appear. Double-click on the file.

You will receive the following window. Select “Open.”

The following will appear. Select “Run.”

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 PricerType 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. 1. Select ‘Y’ if you would like to calculate payment.2. Select ‘V’ if you would like to view provider specific

information3. 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) PricerSarah 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’

– 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

For additional assistance please contact:

Inpatient Psychiatric Facility Prospective Payment System

(IPF PPS) PricerSarah 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’

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 150http://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:

1. Edit claim data to identify errors

2. 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 FilesBelow 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

– CAH– LOS 7/1/07 – 7/3/07– Total Covered Charges = $2,935.60– CCR = .62

1. 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