Knowledge Base Article

Over the past few months, several retail stores in my geographic area have closed. I really hate that as it leaves the people who worked there without jobs and the stores are no longer available for browsing. However, I must admit, I am one of the reasons retail stores are closing. I did all of my Christmas shopping last year on line. It is so quick and convenient and then the packages are delivered to your door. I like my delivered packages though I regret the unintended consequence of putting retail stores out of business.  Medicare is also a big proponent of packages, although most of theirs is with intent. But with repetitive billing, there may unintended consequences of per claim packaging.

A recent Wednesday@One newsletter discussed how “CMS has taken numerous actions to move the OPPS more toward an actual prospective payment system as the name indicates.  To this end, ‘the OPPS packages payments for multiple interrelated items and services into a single payment to create incentives for hospitals to furnish services most efficiently and to manage their resources with maximum flexibility.’  Specifically, over the past few years CMS has created and expanded comprehensive APCs which bundle payment for all adjunctive services into the payment for the primary service, packaged add-on codes, and conditionally packaged payment of ancillary services with a geometric mean cost of $100 or less.”

Another change over the past few years related to packaging of payments is the transition from packaging per date of service, to packaging per claim.  Comprehensive APCs, which began in 2015, package payment for all adjunctive services on the claim (with only limited exceptions) into the payment of one primary procedure. Primary procedures are identified with a status indicator of “J1.” In 2016, CMS created a new status indicator of “Q4” for laboratory services to be conditionally packaged if reported on the same claim as other services. The conditional packaging of services with an SI of “Q1” and “Q2” remained per date of service for 2016, but transitioned to per claim packaging for CY 2017.

Providers need to understand the impact this “per claim” payment packaging may have on repetitive billing.  When a repetitive claim spans multiple dates of service, the packaging rules apply to the entire claim. Medicare requires repetitive billing for some hospital services such as rehabilitative therapy and cardiac or pulmonary rehabilitation among others (see the Medicare Claims Processing Manual, Chapter 1, section 50.2.2). For other recurring services not defined as repetitive by Medicare, such as chemotherapy or radiation therapy, the hospital can choose to submit a separate claim for each date of service, or report charges for these recurring services on a single span bill.

Providers need to evaluate the packaging repercussions when submitting span bills. For example, a client reported recently submitting a span bill for radiation and chemotherapy services.  The claim included charges for CPT 77371 (sterotactic radiosurgery - SRS) and chemotherapy charges for the drug Herceptin.  CPT 77371 has a status indicator of “J1” (comprehensive APC), so only one total payment for the whole claim was made for the SRS. There was no separate payment for the high-cost drug Herceptin even though the infusion was on a different date of service from the SRS. Payment packaging for comprehensive APCs is on a per claim basis.  This resulted in a significant loss of reimbursement for the hospital.  There could also be an impact on reimbursement if SRS services provided on different days are billed together on one span claim. 

Another example is the application of negative-pressure wound treatment (NPWT or wound vac) billed with other wound care services on a span bill.  CPT codes 97605 and 97606 have status indicators of “Q1.”  This means Medicare will pay separately for wound vac applications if they are the only service provided and billed on a claim.  Wound vac applications submitted on a span bill with outpatient services with status indicators of “S,” “T,” “V,” or more than one “Q1” will package with the other services on the claim even when the wound vac was the only service provided on some days. 

In both of these examples (SRS and wound vac applications performed by nurses or practitioners in a wound clinic), it would be more appropriate to submit one claim for each date of service to prevent inappropriate bundling.  NPWT services performed by a physical or occupational therapist are required to be billed on a repetitive bill.

To avoid unintended consequences with recurring claims and per claim packaging, hospitals should consider carefully what combination of services performed on different days of service are included on a recurring span bill.  Were the services actually adjunctive to the primary service on the claim or not?  It is easy to see in these examples that Herceptin infusion is not adjunctive to the SRS procedure, or the wound vacs are not adjunctive to wound debridement unless performed on the same day or during a continuous encounter.