January 2016 OPPS Update

on Tuesday, 05 January 2016. All News Items | Outpatient Services | Billing

Laws, Rules, Regulations, and Guidance

Do you know the difference in a law and a regulation pertaining to Medicare? Where do rules and sub-regulatory guidance fit in? This is valuable knowledge when dealing with Medicare and trying to figure out how to stay compliant with all the various requirements.

  • A law is legislation that is enacted by Congress and signed into law by the President (or overridden by Congressional vote if vetoed by the President).
  • Once a law is on the books, the appropriate Federal agency, in this case the Centers for Medicare and Medicaid Services (CMS), creates regulations to implement the provisions of the law. Regulations are generally published for industry and public comment as a “proposed rule” in the Federal Register, followed by a Final Rule, also published in the Federal Register, with response and possible revisions due to the comments received. Regulations in the Final Rule amend the Code of Federal Regulations (CFR).
  • After regulations are final, CMS publishes sub-regulatory guidance in transmittals to provide direction, advice and instructions on implementing the regulations. Some transmittals update the Medicare manuals.

To be fully compliant, hospitals should follow Medicare laws, rules, regulations, and guidance. The further down the line you go, the more details there are. But sometimes, it can be like trying to clean eyeglasses with an oily cloth – the more you try to clarify, the cloudier it gets.

These various methods of establishing Medicare requirements often result in multiple publications discussing the same issue. That can be a good thing though, because people learn best through repetition. MLN Matters Article MM9486 (CR 9486) implements changes to and billing instructions for various policies implemented in the January 2016 OPPS update. There is so much information in this MLN article that I will only review some of the issues this week. I will review the rest of the issues in future articles. This week, let’s look at modifiers, observation, lab packaging, lung cancer screening and some items related to radiation therapy.


Modifier CA is not new, but the APC payment method associated with use of this modifier has changed. Modifier CA is used to report an inpatient-only procedure furnished to an outpatient who expires before the patient can be admitted as an inpatient or transferred. For 2016, this will be paid as a comprehensive APC. Medicare will make a single payment for all services reported on the claim, including the “inpatient-only” procedure through APC 5881.

Modifier CT is new for 2016 – it is to be reported on CT services furnished on equipment that does not meet the National Electrical Manufacturers Association (NEMA) Standard XR-29-2013. This applies to CPT codes 70450-70498; 71250-71275; 72125-72133; 72191-72194; 73200-73206; 73700-73706; 74150-74178; 74261-74263; and 75571-75574 and will result in a 5% reduction in payment for 2016. The reduction also applies when multiple CT scans are provided on the same day and paid under a composite payment if the equipment does not meet NEMA standards.


Payment for observation services is also transitioning from a composite payment to a comprehensive payment which means one bundled payment for all visits, observation services, and all other OPPS payable services and items reported on the claim (excluding all preventive services and certain Medicare Part B inpatient services). Services that were separately paid under the observation composite payment, such as injections, infusions, CTs, and MRIs, will no longer receive separate payment in 2016 when a comprehensive observation payment is made. Any clinic visit, Type A Emergency Department (ED) visit, Type B ED visit, critical care visit, or direct referral for observation services furnished in a non-surgical encounter by a hospital in conjunction with observation services of eight or more hours, will qualify for comprehensive payment through C-APC 8011. Obs is now assigned to Status Indicator J2.

Lab Packaging

The Status Indicator for packaged lab services is being changed from “N” (always packaged) to new SI “Q4” (“J1,” “J2,” “S,” “T,” “V,” “Q1,” “Q2,” or “Q3” packaged). This allows separate payment for lab services on outpatient claims (13x type of bill) that contain only laboratory services without having to use the L1 modifier. The L1 modifier is now only required to report unrelated lab services provided with other outpatient services when ordered by a different practitioner for a different diagnosis.

Lung Cancer Screening

In the Final Rule, CMS announced two newly created HCPCS codes to report lung cancer screening counseling visit (G0296) and annual screening by low-dose CT (G0297). These screening benefits were effective February 5, 2015 through an NCD, but Medicare will not be accepting claims until January 4, 2016. To be eligible for the LDCT lung cancer screening benefit, patients must:

  • Be 55-77 years of age
  • Be asymptomatic (no signs or symptoms of lung cancer)
  • Have a tobacco smoking history of at least 30 pack-years (one pack-year = smoking one pack per day for one year; 1 pack = 20 cigarettes)
  • Be a current smoker or one who has quit smoking within the last 15 years; and
  • Receive a written order for lung cancer screening with LDCT that meets the requirements described in the NCD. Written orders for lung cancer LDCT screenings must be appropriately documented in the beneficiary’s medical records.

See MLN Matters Article MM9246 for more information.

IMRT Planning Services

Payment for IMRT planning services billed with CPT code 77301 includes payment for the services described by several other CPT codes, whether these services are performed on the same or different dates of service. CPT codes 77014, 77280-77295, 77305-77321, 77331, 77336, and 77370 may only be billed separately in addition to CPT 77301 if they are being performed in support of a separate and distinct non-IMRT radiation therapy for a different tumor.

Sterotactic Radiosurgery

Effective for dates of service on and after January 1, 2016 through December 31, 2017, certain planning and preparation services are not bundled into cranial single session Stereotactic Radiosurgery (SRS) procedures (CPT code 77371 or 77372) and may be reported and paid separately in addition to the SRS procedure. These procedures include:

  • 70551 - Mri brain stem w/o dye
  • 70552 - Mri brain stem w/dye
  • 70553 - Mri brain stem w/o & w/dye
  • 77011 - Ct scan for localization
  • 77014 - Ct scan for therapy guide
  • 77280 - Set radiation therapy field
  • 77285 - Set radiation therapy field
  • 77290 - Set radiation therapy field
  • 77295 - 3-d radiotherapy plan
  • 77336 - Radiation physics consult

Hospitals must report modifier “CP” for any other services, aside from the 10 codes above, that are adjunctive or related to SRS treatment but billed on a different date of service and within 30 days prior or 30 days after the date of service for either CPT codes 77371 or 77372.

Be sure to add this sub-regulatory guidance to your stockpile of Medicare knowledge and develop processes to be compliant with these regulations.

Article by Debbie Rubio

Debbie Rubio, BS, MT (ASCP), is the Manager of Regulatory Affairs and Compliance at Medical Management Plus, Inc. Debbie has over twenty-seven years of experience in healthcare including nine years as the Clinical Compliance Coordinator at a large multi-facility health system. In her current position, Debbie monitors, interprets and communicates current and upcoming regulatory and compliance issues as they relate to specific entities concerning Medicare and other payers. You may contact Debbie at This email address is being protected from spambots. You need JavaScript enabled to view it..

This material was compiled to share information. MMP, Inc. is not offering legal advice. Every reasonable effort has been taken to ensure the information is accurate and useful.

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