Oklahoma’s Office of Management and Enterprise Services Employees Group Insurance Department (EGID) has proposed to change its payment method for hospital outpatient surgical and cardiovascular procedures. Instead of paying a percentage of billed charges, EGID would set these payment rates based on Medicare’s outpatient fee schedule.
EGID operates HealthChoice, the health plan for state and education employees, and uses the same payment rates for the Oklahoma Department of Corrections.
EGID will hold a public hearing on the reimbursement rate change proposal at 10 a.m., Wednesday, Oct. 28. (This is a change from the date EGID originally announced.) EGID proposes to implement the change effective April 1, 2016.
EGID proposes to base procedure payments on Medicare’s Outpatient Prospective Payment System (OPPS) amounts. The payments would range initially from 210 to 230 percent of the national OPPS amounts for each surgical (10000-69999) and cardiovascular (92900-93999) HCPCS procedure code. Like HealthChoice inpatient payments, different rates would be paid to four tiers of hospitals: large urban, small urban, critical access and sole community hospitals, and all other rural hospitals. Rates would be ratcheted down the next two years, ending at 170 to 200 percent of Medicare in 2018.
Covered implants, even if not paid separately by Medicare, will be paid by HealthChoice at 30 to 35 percent of billed charges. Other procedure-related services that are “packaged” (not separately paid) by Medicare, such as recovery room charges, would also be packaged by HealthChoice and not separately paid. As a two-year transition, they would pay a reduced percentage of billed charges for these initially.
EGID says the outpatient procedure payment proposal would be “revenue neutral” in its first year. But hospitals with above average charges may face reduced payments, while hospitals with low charges may see an increase in HealthChoice payments.
Medicare’s multiple procedure discount will not be applied to these payments. EGID is not proposing changes to HealthChoice payments for other outpatient services, such as lab, imaging, and injectable medication.
The new payment method was recommended by EGID’s consultant, Berkeley Research Group. EGID revised the proposal based on input from a task force of hospitals and OHA.
EGID’s Notice of Hearing is posted here. The Notice includes a link to a presentation with information on the proposal. (Rick Snyder)
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