Medicare Outpatient Packaging Policy Will Not Apply to ASCs

To the relief of pathologists across the country, the Centers for Medicare and Medicaid Services (CMS) has confirmed that its new policy under which it will package the technical component of many anatomic pathology (AP) services into a single hospital outpatient payment will not apply to services provided in ambulatory surgical centers (ASCs). The final hospital Outpatient Prospective Payment System (OPPS) rule, published in the Nov. 10 Federal Register, seemed to give conflicting statements about whether the new packaging policy would apply both to AP services provided in hospital outpatient departments and AP services provided in freestanding ambulatory surgical centers. However, Jane Pine Wood, an attorney with McDonald Hopkins, tells National Intelligence Report that she has confirmed with CMS that the technical component of AP codes is not bundled into ASC payments when performed by an outside laboratory. Agency officials referred Wood to certain pages of the Federal Register, which offer some clarification of this issue. Page 66806, for example, states:

The commenters are correct that the comprehensive APC [Ambulatory Payment Classification] payment policy methodology is not being adopted under the ASC payment system. . . . This continuation of separate payment for covered procedures and covered ancillary services performed in the ASC . . . should help mitigate any incentive to perform procedures assigned to C-APCs in the [hospital outpatient department].

And on page 66925, CMS states:

Given the final OPPS comprehensive APC policy and after consideration of the public comments we received, we are finalizing our proposal that all separately paid covered ancillary services that are provided integral to covered surgical procedures that would map to comprehensive APCs will continue to be paid separately under the ASC payment system instead of being packaged into the payment for the comprehensive APC as under the OPPS.

In fact, CMS has indicated that it will be very difficult for the agency to package ancillary services provided in the ASC setting into a single payment, noting that “Unlike the OPPS claims processing system that can be configured to make a single payment for the encounter-based comprehensive service whenever a[n] HCPCS code that is assigned to a comprehensive APC appears on the claim, the ASC claims processing does not allow for this type of conditional packaging.” While this is good news for pathologists who provide services for patients receiving care at ASCs, the news is not so good for pathologists who provide services for patients receiving care in hospital outpatient settings. Effective Jan. 1, 2015, CMS will package services assigned to APC 352 (Level I Pathology) and APC 433 (Level II Pathology), as well as APC 0345 (Transfusion Laboratory Procedures). A partial list of services affected by this policy can be found in the Nov. 13, 2014, issue of NIR. Pathologists in this situation will need to renegotiate their contracts with hospitals to ensure they are paid for the services they provide under these APCs. Takeaway: Payment for pathology services provided to patients receiving care in ambulatory surgical centers will not be packaged into a single payment as they will be for patients in hospital outpatient settings.