Business Briefs: What Happened to the Outpatient Prospective Payment System Status Indicators This Year?

Clinicians within wound care hospital-based outpatient departments (HOPDs) are aware that Medicare officials update the Outpatient Prospective Payment System (OPPS) regulations and allowable rates each year. At the stroke of midnight on New Year’s 2016, the updated OPPS regulations and allowable rates became effective. Most HOPD program directors, medical directors, coders, billers, and charge description master directors paid close attention to the allowable rate changes. However, many of these stakeholders didn’t notice the Centers for Medicare & Medicaid Services (CMS) assigned many of the HOPD services, procedures, and products to new/different Ambulatory Payment Classification (APC) groups. In addition, many of the new/different APC groups were assigned a new status indicator (SI). All of this happened while HOPD stakeholders were celebrating New Year’s Eve.  

Since then, this author has received hundreds of emails and phone calls, during which the HOPD stakeholder says (in so many words): “All of a sudden we stopped receiving Medicare payment for [a procedure, product, and/or service] that we were always paid for previously. I even checked to see if a new National Correct Coding Initiative (NCCI) edit was put into place, but the January, April, and July NCCI edits have not changed for the services/procedures/products that are no longer paid. Am I coding incorrectly?” 

When researching the changes surrounding these nonpaid services/procedures/products, this author found nearly all of them are due to SI changes. When informing HOPD stakeholders about SI changes, most have the same response: “What’s a status indicator?” 

Each APC group is assigned an SI that informs the HOPD on whether or not a wound care service, procedure, or product will be paid in full, partially, packaged, etc. The OPPS list of SIs can be found online in addendum D1 of the 2016 OPPS Final Rule: www.cms.gov/medicare/medicare-fee-for-service-payment/hospitaloutpatientpps/hospital-outpatient-regulations-and-notices-items/cms-1633-fc.html. Although the list is large, only six SIs apply to the most common wound care and hyperbaric oxygen therapy (HBOT) services, procedures, and products performed in HOPDs. See Table 1 for a description of these six SIs. 

REMINDER: NCCI edits are the final edits before Medicare claims are paid. Even if an SI allows payment for two services/procedures/products during the same encounter, NCCI edits may prevent Medicare payment.

Now, let’s look at each SI assigned to the commonly performed wound care and HBOT services, procedures, and products. 

“J2” Status Indicators

Only one common wound care service, G0463 - hospital outpatient clinic visits - is assigned the “J2” SI. This means clinic visits will be paid separately (when permitted by NCCI edits), if the clinic visits are not on the same claim as other comprehensive packaged services/procedures (with certain exceptions) and are not on the same claim as services/procedures assigned an SI of “J1”  (See Table 2). 

“N” Status Indicators

In 2014, CMS packaged payment for cellular and/or tissue-based products (CTPs) for skin wounds into the payment for the procedure to apply the CTPs. In addition, CMS packaged payment of nearly all the add-on codes for procedures performed in HOPDs into payment for the base code. This includes procedures such as surgical debridement, skin graft, and application of CTPs. (See Table 3 for a list of common wound care procedures and products assigned an SI of “N.”) 

“Q1” Status Indicators

This SI caught many HOPDs off guard in 2016. Any procedures assigned a “Q1” SI are packaged, if billed on the same date of service as procedures assigned an SI of “S,” “T,” or “V.” For example, HOPDs that became accustomed to receiving payment for both the surgical debridement (SI = “T”) and traditional negative pressure wound therapy (SI = “Q1”) now only receive payment for the surgical debridement. A similar situation exists for low-frequency, nonthermal ultrasound. However, the procedures with a “Q1” SI are paid separately in other circumstances, if permitted by NCCI edits. See Table 4  for the common wound care procedures assigned the SI of “Q1.” 

“Q2” Status Indicators

Similar to the “Q1” SI, the “Q2” SI also caught HOPDs off guard in 2016. If a procedure is assigned the “Q2” SI, that procedure will be packaged if performed on the same date of service as a procedure assigned an SI of “T.”  For example, HOPDs that were receiving payment for both surgical debridement (SI = “T”) and nonophthalmic fluorescent vascular angiography (SI = “Q2”) now only receive payment for the surgical debridement. However, the procedures with a “Q2” SI are paid separately in other circumstances, if permitted by NCCI edits. See Table 5 for the common wound care procedure assigned an SI of “Q2.” 

“S” Status Indicators

Procedures assigned an SI of “S” are paid separately and are not discounted when multiple procedures assigned the same SI are performed, if the NCCI edits permit. When reviewing Table 6, notice this pertains to total contact casts, Unna’s boots, multilayer compression, arterial studies, and HBOT. REMINDER: NCCI edits still apply to some code pairs. 

“T” Status Indicators

The last pertinent SI is “T.”  The procedures or services assigned the “T” SI are separately paid, but the payment rate is reduced 50% if performed on the same date of service with another service or procedure assigned the same “T” SI. For example, if a CTP is applied on the right leg (SI = “T”) and a disposable negative pressure wound therapy pump (dNPWT; SI = “T”) is applied on top of the CTP, the CTP procedure will be separately paid the Medicare allowable and the dNPWT pump will be separately paid at 50% of the Medicare allowable —  given the NCCI edits allow the payment of the code pairs. See Table 7 for a list of common wound care procedures assigned the SI of “T.” 

SUMMARY

The next time your billing office claims a payment for a service, procedure, or product has been denied, don’t immediately assume it isn’t covered. Instead, methodically check three things:

1. Review the Medicare Administrative Contractor’s local coverage determination (LCD), if one exists. Verify the diagnosis codes, service codes, procedure codes, product codes, and modifiers align with the LCD guidance. 
2. Review the status indicators of the code pairs on the claim.
3. Review the NCCI edits for the code pairs on the claim. 

Kathleen D. Schaum & Associates Inc., Lake Worth, FL; and director, medical products, reimbursement, biotherapeutics at Smith & Nephew.