Start preparing now for arrival of APGs
Start preparing now for arrival of APGs
New outpatient payment system slated for 99
With a prospective payment system (PPS) for outpatient services the outpatient version of diagnosis-related groups scheduled to go live on Jan. 1, 1999, it’s time for access managers to begin preparing for the effect the new system will have on their operations, suggests Leonard Womack, CPC-H, RCP, manager of revenue management at ScrippsHealth in San Diego.
Ambulatory payment groups (APGs) for outpatient services are required under the Clinton administration’s fiscal 1998 budget. The Health Care Financing Administration (HCFA) in Baltimore, however, is still awaiting legislative authority to implement the new system, Womack says. Until Congress tells HCFA what it wants and signs off on the exact methodology, he adds, it won’t happen.
Still, even if the scheduled start for all out-patient services is delayed, Womack says he expects that at least for ambulatory surgery, the new payment guidelines are likely to be launched on schedule.
Begin gathering information
Bureaucratic delays notwithstanding, at this point, access managers should be taking steps to understand the APG process and learn how APGs will affect their facilities, he says.
Currently, most outpatient coding is done at the transaction level based on current procedural terminology (CPT) codes, although surgical coding is often done by medical records personnel, Womack explains. To identify services, a unique charge code, which doesn’t mean anything outside that particular hospital, is assigned. The price, the UB92 code, and the CPT code are attached to the charge code.
The APG code, a category established by HCFA that is analogous to the inpatient diagnosis related groups (DRG) code, refers to a package of diagnoses and procedures. Each APG will have a weighted, uniform value across the United States, Womack says. To account for variations in practice patterns, each hospital has its own specific rate. Those figures are multiplied together to come up with the hospital-specific rate for each APG.
"To be proactive, start developing APGs now along with your current billing methodology so you can project the impact [the new system] will have on your facility," he says.
Make sure your chargemaster the primary document for charging all the services, supplies, and pharmaceuticals in a hospital is correct. Look for such problems as mismatched UB92 and CPT codes and inclusion of non-covered services.
"If you’re not billing correctly now, APGs will further complicate reimbursement issues," he cautions.
Womack also recommends that hospitals contact their DRG coding software vendor to see if a companion APG system is available. In some cases, hospitals may be able to obtain a test version of such a system without making any major changes in their current system or incurring significant expense. By putting the APG mechanism in place now, Womack adds, hospitals "can start getting experience with where they fall in the continuum; which APGs are their heavy volumes."
Pilot APG projects already in place
With the aim of increasing the incentive for efficiency in outpatient services, HCFA has sponsored APG pilot projects several states, most notably Iowa, so help may be available from colleagues in other areas. These research projects have focused on developing possible models for an outpatient services PPS and have covered such topics as APG development, a typology of outpatient services that can be used for an outpatient PPS, and research into the resource costs of delivering outpatient services in a variety of settings.
In June 1997, HCFA recommended implementing a PPS for hospital outpatient services as soon as possible. While awaiting legislative authority, HCFA will continue to develop and refine Medicare-specific factors of the APG classification system, analyzing payments that would be made across sites such as ambulatory surgical centers or physician radiology practices, for example to ensure that it has not created unwarranted incentives to perform procedures in any particular setting for financial reasons.
As part of this analysis, HCFA will exam- ine approaches to volume measurement and control, including the level of packaging for ancillary services and monitoring of care pattern.
"For example," the HCFA recommendation report states, "we could track whether Medicare beneficiaries received more clinic visits per patient under APGs than they did under reasonable cost-based payment."
But before investing heavily in books on APGs or hiring consultants, remember this word of caution: "It’s been long talked about, long rumored, but it hasn’t happened yet," Womack says.
"Once it’s definite, people will want to start engineering, but it would be premature to develop internal systems for coping with something that’s only been proposed and has been proposed since 1991. Nothing is written in stone at this point," he says.
Subscribe Now for Access
You have reached your article limit for the month. We hope you found our articles both enjoyable and insightful. For information on new subscriptions, product trials, alternative billing arrangements or group and site discounts please call 800-688-2421. We look forward to having you as a long-term member of the Relias Media community.