Cost of services must be used to set charges!
Ever wonder why payment for services is not what you expected under the OPPS??Ever wonder what might be happening "behind the scenes” with cost to charge methodology??The CY 2024 OPPS proposed rule provides a little insight.?
CMS assigned CPT? codes 0625T (status indicator S) to a new technology APC with reimbursement of $950.50 based on the manufacturer’s information, effective October 1, 2022.?CY 2024 payment should be based on actual claims data under the usual OPPS methodology.?Guess what the claims data showed??The actual cost calculation based on the charges submitted reflected $4.10. That would mean that based on claims data, CMS should reassign this to an APC that reimburses $5!?That is not a typo – only five dollars!?While there was a low number of claims (90), this has a HUGE (negative) impact on hospital reimbursement.???What happened??The charge for the service was likely not based on the hospitals' cost.?CMS expects hospitals to set charges based on their cost and their cost-to-charge ratio so the claims data reflects to CMS what it costs for the service.?This is an example of where that did not happen. We've seen this a lot in the past with the OPPS where rates drop and rise based on hospital charging practices. If a hospital doesn't set charges based on actual cost, and provides the service(s) frequently, the payment rate comes down for all hospitals, even those that set their charges based on cost. This is a call to action for hospitals to review charges to be sure what you are telling CMS via claims data is accurate.
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1 年I absolutely agree with your article. Hope your doing well.
Thanks Denise! It's the truth and the only reason that I find somewhat acceptable for why hospitals don't set their charges appropriately is because they are tired of getting written up in the press as bad actors, which all of the crazy price transparency rules don't help. To the naked eye it will appear that hospitals are setting exorbitantly high charges for things. For example, something that the hospital pays $200 for might result in a $800 charge and instead of immediately criticizing hospitals, people should ask why. But asking why involves having to really wrap your mind around things that are hard and not easily explainable in 30 seconds. Until everyone is willing to look under the Medicare rate-setting hood and spend time reviewing the definition of charges that hospitals are required to follow and understand that all patients and payers have to be charged the same - yes it's a lot - hospitals should not be judged for their charges nor should they be so criticized that they give up and set low charges just to make the noise go away. Because when they do this we start seeing really low payment rates (payments far below the cost of the item or service) computed like what you have shared from the CY 2024 OPPS Proposed Rule.