One of the most important payment areas to understand is the Outpatient Prospective Payment System (OPPS), which is used to provide payment for most hospital services, partial hospitalization services, and Community Mental Health Clinics (CMHCs) when that service is furnished by their respective outpatient departments and provider-based departments. This payment system in particular, is where detailed CPT® reporting remains critical to proper payment, since outpatient claims are driven by CPT coding. We will review some of the OPPS information and detail the status indicators that may impact respiratory therapy services in 2023.
Understand that OPPS payment amounts vary according to the Ambulatory Payment Classification (APC) group to which a service or procedure is assigned. Furthermore, coding and compliance professionals should note that the payment methodology for each CPT or HCPCS is based upon the OPPS Status Indicator (SI) assigned to the code. Professionals should be aware that the OPPS system is not a coding guideline nor a billing guideline. It is a payment system applicable to Acute Care Hospitals. Status indicators offer an important point of reference for classification and payment.
The status indicator of D is associated with deleted codes. Note that J2 is specific to outpatient observation stay. Medicare has aimed to finish out the packaging of services since 2017 with many of these services rolled into a comprehensive type of service. Medicare believes this initiative is a more efficient way for the system to not only manage its payments but for hospitals to understand their own reimbursement while ultimately managing their cost within their payment allowance. N is for a packaged service that is unconditionally packaged, regardless of what the setting is and whether you are looking at an outpatient walk-in or observation patient. You will not see a detailed line item come back when furnished underneath this service.
Q codes are conditionally packaged. Q1, 3, 4, impact reimbursement methods for respiratory therapy. The S status indicator represents significant procedures. Typically, these are surgical procedures or other high-cost diagnostic procedures.
| Status Indicator | Item/Code/Service | OPPS Payment Status |
|---|---|---|
| A | Services furnished to a hospital outpatient that are paid under a fee schedule or payment system other than OPPS, for example: | Not paid under OPPS. Paid by MACs under a fee schedule or payment system other than OPPS. Services are subject to deductible or coinsurance unless indicated otherwise. |
| Not subject to deductible or coinsurance. | ||
| Not subject to deductible or coinsurance. | ||
| B | Codes that are not recognized by OPPS when submitted on an outpatient hospital Part B bill type (12x and 13x). | Not paid under OPPS. |
| May be paid by MACs when submitted on a different bill type, for example, 75x (CORF), but not paid under OPPS. | ||
| An alternate code that is recognized by OPPS when submitted on an outpatient hospital Part B bill type (12x and 13x) may be available. | ||
| C | Inpatient Procedures | Not paid under OPPS. Admit patient. Bill as inpatient. |
| D | Discontinued Codes | Not paid under OPPS or any other Medicare payment system. |
| E1 | Items and Services: | Not paid by Medicare when submitted on outpatient claims (any outpatient bill type). |
| Not covered by any Medicare outpatient benefit category | ||
| Statutorily excluded by Medicare | ||
| Not reasonable and necessary | ||
| E2 | Items and Services: for which pricing information and claims data are not available | Not paid by Medicare when submitted on outpatient claims (any outpatient bill type). |
| F | Corneal Tissue Acquisition; Certain CRNA Services and Hepatitis B Vaccines | Not paid under OPPS. Paid at reasonable cost. |
| G | Pass-Through Drugs and Biologicals | Paid under OPPS; separate APC payment. |
| H | Pass-Through Device Categories | Separate cost-based pass‑through payment; not subject to copayment. |
| J1 | Hospital Part B services paid through a comprehensive APC | Paid under OPPS; all covered Part B services on the claim are packaged with the primary “J1” service for the claim, except services with OPPS SI=F, G, H, L, and U; ambulance services; diagnostic and screening mammography; all preventive services; and certain Part B inpatient services. |
| J2 | Hospital Part B Services That May Be Paid Through a Comprehensive APC | Paid under OPPS; Addendum B displays APC assignments when services are separately payable. |
| (1) Comprehensive APC payment based on OPPS comprehensive-specific payment criteria. Payment for all covered Part B services on the claim is packaged into a single payment for specific combinations of services, except services with OPPS SI=F, G, H, L and U; ambulance services; diagnostic and screening mammography; all preventive services; and certain Part B inpatient services. | ||
| (2) Packaged APC payment if billed on the same claim as a HCPCS code assigned status indicator “J1.” | ||
| (3) In other circumstances, payment is made through a separate APC payment or packaged into payment for other services. | ||
| K | Nonpass-Through Drugs and Nonimplantable Biologicals, Including Therapeutic Radiopharmaceuticals | Paid under OPPS; separate APC payment. |
| L | Influenza Vaccine; Pneumococcal Pneumonia Vaccine | Not paid under OPPS. Paid at reasonable cost; not subject to deductible or coinsurance. |
| M | Items and Services Not Billable to the MAC | Not paid under OPPS. |
| N | Items and Services Packaged into APC Rates | Paid under OPPS; payment is packaged into payment for other services. Therefore, there is no separate APC payment. |
| P | Partial Hospitalization | Paid under OPPS; per diem APC payment. |
| Q1 | STV-Packaged Codes | Paid under OPPS; Addendum B displays APC assignments when services are separately payable. |
| (1) Packaged APC payment if billed on the same date of service as a HCPCS code assigned status indicator “S,” “T,” or “V.” | ||
| (2) In other circumstances, payment is made through a separate APC payment. | ||
| Q2 | T-Packaged Codes | Paid under OPPS; Addendum B displays APC assignments when services are separately payable. |
| (1) Packaged APC payment if billed on the same date of service as a HCPCS code assigned status indicator “T.” | ||
| (2) In other circumstances, payment is made through a separate APC payment. | ||
| Q3 | Codes That May Be Paid Through a Composite APC | Paid under OPPS; Addendum B displays APC assignments when services are separately payable. |
| Addendum M displays composite APC assignments when codes are paid through a composite APC. | ||
| (1) Composite APC payment based on OPPS composite-specific payment criteria. Payment is packaged into a single payment for specific combinations of services. | ||
| (2) In other circumstances, payment is made through a separate APC payment or packaged into payment for other services. | ||
| Q4 | Conditionally packaged laboratory tests | Paid under OPPS or CLFS. |
| (1) Packaged APC payment if billed on the same claim as a HCPCS code assigned published status indicator “J1,” “J2,” “S,” “T,” “V,” “Q1,” “Q2,” or “Q3.” | ||
| (2) In other circumstances, laboratory tests should have an SI=A and payment is made under the CLFS. | ||
| R | Blood and Blood Products | Paid under OPPS; separate APC payment. |
| S | Procedure or Service, Not Discounted When Multiple | Paid under OPPS; separate APC payment. |
| T | Procedure or Service, Multiple Procedure Reduction Applies | Paid under OPPS; separate APC payment. |
| U | Brachytherapy Sources | Paid under OPPS; separate APC payment. |
| V | Clinic or Emergency Department Visit | Paid under OPPS; separate APC payment. |
| Y | Non-Implantable Durable Medical Equipment | Not paid under OPPS. All institutional providers other than home health agencies bill to DMERC. |
It is also important to understand the concept of incidental services and how they are treated under the Outpatient Prospective Payment System (OPPS) rule. These services are unconditionally packaged and are assigned to a status indicator of N in Addendum B of the OPPS rule. Understand that they are not recognized for payment when they are the only service provided on a date of service. An “incidental only claim” will not process for claims submission.
Note that there are also packaged ancillary services that are not paid separately by CMS. These include specific add-on codes such as continuous inhalation therapy (94645), diffusion capacity (94729), pulse oximetry (94760 and 94761), and car seat testing (94781).
As a respiratory coding or compliance professional, it’s important to keep these rules and guidelines in mind when submitting claims for reimbursement. By understanding the concept of the OPPS rule status indicators, incidental services, and packaged ancillary services, you can help ensure that claims are processed correctly, and payments are received in a timely manner.
These are not all the concepts necessary to understand the OPPS rule and RT coding and compliance. For advanced knowledge on conditional packaging, comprehensive packaging, and more, purchase our Respiratory Therapy Reimbursement & Compliance Update webcast.
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