Decoding Device Billing under OPPS for Hospitals

Medicare is one of the healthcare industry’s fastest-growing federal health-insurance programs. With so many patients dependent on Medicare for outpatient services, hospital expenditures are constantly increasing. To cover so many Medicare patients, this causes a financial imbalance in the hospital budget.

Keeping this in mind, CMS developed the Outpatient Prospective Payment System (OPPS) to monitor outpatient service expenses better. This keeps hospitals from running into financial difficulties while delivering outpatient services to thousands of Medicare beneficiaries.

Purpose of Decoding Device Billing:

The OPPS permits CMS to pay hospitals an agreed-upon sum for Medicare outpatient services. This approach dramatically improves CMS’s ability to foresee and manage programs. It should be noted that the OPPS system is based on the Ambulatory Patient Classification (APC) methodology. To ensure the success of the OPPS, CMS allocates HCPCS codes to APC, which are changed annually. All outpatient services and devices must be billed on a UB-92 or successor claim form utilizing HCPCS codes. The HCPCS codes encompass all of the CPT codes. The CMS assigns the rates in the APC system to make the billing and reimbursement procedure as simple as possible.

Bill Types:

The bill type is a code that indicates the type of bill (inpatient, outpatient, cancellations, adjustments, and late charges). This three-position field must be filled out for all outpatient bills paid through the Outpatient Prospective Payment System (OPPS).

The three-digit alphanumeric code provides three distinct bits of information. The first digit indicates the type of facility. The second categorizes the type of care. The third, known as the frequency code, indicates the sequence of the bill in this particular episode of care.

CMS uniform billing specifications data elements are compatible with Form CMS-1450. The type of bill is specified in CMS-1450 field 4. The following bill types are subject to OPPS for providers reimbursed through the Outpatient Prospective Payment System:

  • 13X with condition code 41 (partial hospitalization),
  • 13X without condition code 41, and

Device Billing Guidelines under OPPS

The following are the guidelines to be implemented while billing for the devices under Outpatient Prospective Payment System (OPPS) by hospitals:

  • Reporting Device Codes on Claims:

As of January 1, 2005, hospitals paid under the OPPS (bill types 12X and 13X) that report procedure codes requiring the use of devices must also report the corresponding HCPCS codes and expenses for all devices utilized to perform the procedures where such codes exist. This is necessary to ensure that the OPPS payment for these procedures is accurate in future years when the claims are utilized to calculate the APC payment amounts.

  • Claims Editing:

Any claim containing an HCPCS code for a procedure mentioned in the table of device edits but does not additionally report at least one device HCPCS code required for that procedure will be returned to the provider. Each edit’s effective date is shown in the table. If the claim is returned to the provider as it did not pass the modifications, the hospital must alter the claim before re-submitting it by either changing the procedure code or ensuring that one of the appropriate device codes is on the claim. While all devices with HCPCS codes that were used in a given procedure ought to be reported on the claim, where more than a single device code is listed for a given procedure code, only one of the possible device codes must be on the claim for payment to be made, unless otherwise specified.

If the provider reports one of the following modifiers with the procedure code, device modifications do not apply to the selected procedure code:

  • 52: Reduced Services;
  • 73: Discontinued outpatient procedure before anesthesia administration; and
  • 74; Discontinued outpatient procedure after anesthesia administration.

When a procedure that ordinarily needs a device is halted, either before or after the administration of anesthesia if anesthesia is required or at any point, if anesthesia is not needed, hospitals should report modifications 52, 73, or 74 as relevant. In these circumstances, the device edits are not implemented.

Get in Touch with 24/7 Medical Billing Services!

The ultimate aim of OPPS in medical billing is to reduce the disparities in outpatient service reimbursement among hospitals. That’s why it is crucial to make sure that your hospitals decode devices and other billing accurately to enhance maximum reimbursement. The most optimal and cost-effective alternative is outsourcing Outpatient Prospective Payment System (OPPS) billing services to 24/7 Medical Billing Services.

Outsourcing OPPS services to such a medical billing company ensures that you have a team of skilled medical billers who are familiar with the Medicare, OPPS, and APC systems. To avoid refused claims, these medical billers verify that there are no errors on the UB-92 or successor claim forms.

See also: Driving Revenue With The Outpatient Prospective Payment System (OPPS)


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