HealthChoice to reduce some outpatient payments

Posted on: 5/16/18

The state’s Employee Group Insurance Division (EGID) posted a notice on May 8 of a hearing on a change in reimbursement methodology for certain outpatient facility procedures. The hearing will be held Wednesday, May 25 in the EGID board room. The change is proposed for HealthChoice and Oklahoma Department of Corrections payments to facilities.

For most outpatient procedures, EGID pays amounts to facilities based on rates paid under Medicare’s Ambulatory Payment Classification (APC) system. Some of the services furnished in connection with a procedure are “bundled” with the procedure by Medicare; that is, not paid separately. EGID has generally used Medicare’s bundling method, but with exceptions.  

In 2015, Medicare adopted a comprehensive APC (C-APC) payment policy. A C-APC is defined as an APC with a high cost primary service, such as the implantation of a device that accounts for a higher percentage of the total costs of the hospital encounter. These high-cost procedures are designated with a “J1” status indicator. Medicare makes a single payment for services assigned to C-APCs, including the primary J1 service and all related items and services. C-APC payment amounts encompass diagnostic procedures, lab tests, and treatments that assist in the delivery of the primary procedures, visits, evaluation, and therapist services performed in association with the procedure, and more.

EGID has paid separately for other facility services billed along with a J1 service. Effective Jan. 1, 2019, EGID plans to implement Medicare’s logic for the reimbursement of claims in which J1 status indicators are present, eliminating these separate payments in most cases.

OHA has asked EGID to allow more time for hospitals’ evaluation of, and comments on, this complex change.
The notice, including example claim calculations and exceptions, may be found here. (Rick Snyder)