Analyzing OPPS for Reimbursement Success in 2023

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.

2023 OPPS Status Indicators

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 or 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

Services that are Unconditionally Packaged to a Primary Service

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.

To view all status indicators that impact RT, please visit our insights link directly and view the status indicator table.