Anthem MA/Part C out-of-network payment guide

MA/Part C non-network payment and hospital payment rules

Situations where MAOs/Part C plans must reimburse non-contracted providers at Medicare rates and related hospital payment responsibilities:

Coordinated care plans (HMOs, PPOs) and PACE plans are generally required to reimburse non-contracting providers at least the Original Medicare amount for Medicare-covered services; non-network PFFS plans must reimburse providers at least the Original Medicare amount though PFFS plans may establish their own fee schedules and balance-billing rules.

When plans must pay the Medicare amount, they must accept from providers the same billing forms used to bill Original Medicare.

For new hospitals, MA plans must pay interim capital amounts as determined by fiscal intermediaries (FIs)/MACs; hospitals should bill plans upon discharge and may submit additional bills when the MAC determines interim capital amounts.

Operating IME and DGME for inpatients are paid by MACs on behalf of MA members and thus are not required to be paid by MA plans; capital IME is part of capital payment and must be paid by MA plans.

MA plans are required to pay the full Medicare allowed cost for organ acquisition for one of their members, though organ acquisition pass-throughs are not a required separate payment by MA plans when the Pricer is run HMO=YES.

Cost-based nursing and allied health (NAH) education payments on hospital cost reports (cost-based NAH) must be paid by MA plans to non-contracted hospitals; the BBRA NAH add-on taken from DGME is paid by MACs and is not required from MA plans to non-contracted hospitals.

The MAO must make other arrangements for admissions of MA plan enrollees when a provider is under an Original Medicare sanction (e.g., DPNA) until the sanction is lifted.

Value Based Purchasing (VBP) withholds and readmission payment adjustments that apply under IPPS (reflected in the Pricer) are applicable to payments that MA plans must make when paying at least the Medicare amount and may require plan adjustments; outlier and other PRICER-based adjustments should be included when MA plans are required to pay Medicare-equivalent amounts.

Coinsurance and patient cost sharing rules

Rules governing patient coinsurance and waivers for outpatient and CAH services.

Coinsurance amounts vary by APC and provider; providers may waive coinsurance in excess of 20% for any given APC.

MA plans required to pay the Medicare amount should include OPPS Pricer adjustments when calculating outpatient payments.

For Critical Access Hospital (CAH) outpatient services under Original Medicare, patient coinsurance is 20% of the submitted charge; CAHs are paid on a reasonable cost basis at 101% of costs for inpatient, outpatient and swing beds.

Operational note: Under the CAH optional method of assigning physician claims, the MA plan must also pay 115% of the Medicare physician fee schedule for physicians when applicable.

Home health payment criteria

How Medicare determines home health payments and what MA plans may pay.

If a patient receives fewer than 5 visits in a 60-day period, Medicare pays per visit (LUPA).

If a patient receives 5 or more visits in a 60-day period, assign an HHRG and pay a 60-day episode payment; durable medical equipment is excluded from HHRG payments and is paid on a fee schedule.

MA organizations may only make LUPA payments in circumstances similar to Original Medicare; otherwise MA payments should be computed using HHRGs and 60-day episodes.

SNF and CAH payment criteria

Rules for SNF payment eligibility and CAH payment methods.

SNF services are generally payable after a qualifying 3-day inpatient hospital stay and transfer to a participating SNF within 30 days unless medically inappropriate; Original Medicare covers up to 100 SNF days per spell of illness.

SNF payments are case-mix adjusted using RUG-III (reflected in HIPPS codes) and vary by intensity of care and location.

Swing bed SNF services are paid under SNF PPS; Critical Access Hospital (CAH) swing beds are exempt from PPS and are paid at 101% of reasonable costs.

CAHs are paid on a reasonable cost basis at 101% of costs for inpatient, outpatient and swing beds; distinct units may be paid under PPS instead of costs.

Documentation: MACs determine interim payment amounts for hospitals based on costs and may issue interim rate letters; MA plans may request a hospital's most recent interim rate letter from the MAC when determining payment obligations to CAHs and other hospitals.

Physician fee schedule and quality/payment adjustments

Physician payment rules, bonuses, penalties and incentive programs that affect allowed amounts.

Physicians and professionals are paid under the Medicare Physician Fee Schedule (MPFS) using the lesser of billed charges or the MPFS; non-participating physicians are paid at 95% of the MPFS with beneficiary coinsurance generally 20% after Part B deductible.

Medicare generally pays 80% of the MPFS allowed amount (after Part B deductible) and beneficiaries are responsible for 20% coinsurance; some services and vaccines have different cost-sharing rules.

Incentive programs (PQRS/PQRI, e-prescribing, PCIP, HPSA/PSA bonuses) historically provided bonuses and later penalties; the Affordable Care Act established a Value Modifier applied beginning in part in 2015 and expanding through 2017 which adjusts payment based on quality and cost metrics.

PQRS and e-prescribing incentives are applied to 100% of MPFS before deducting patient cost sharing; penalties for non-participation began to phase in in later years as described in CMS guidance.

PCIP payment criteria and MA plan treatment

Primary Care Incentive Payment eligibility and calculation for MA plan payment responsibilities:

Eligibility: primary care practitioners (specialties including family medicine, geriatric medicine, pediatric medicine, internal medicine, nurse practitioner, clinical nurse specialist, physician assistant) with primary care services (CPT 99201-99215 and 99304-99350) accounting for at least 60% of the practitioner's total allowed charges under MPFS in the qualifying calendar year are eligible for PCIP.

Amount and MA plan treatment: Medicare pays 80% of the MPFS allowed charge for qualifying primary care services; MA plans should therefore pay a PCIP bonus equal to 10% of 80% of the Medicare allowed charge for qualifying codes (paid in addition to any HPSA bonus).

Operational note: MA plans may pay PCIP quarterly or with each qualifying claim; PCIP is not paid on FQHC/RHC all-inclusive rates or ASC charges.

HSIP payment criteria

HPSA surgical incentive payment criteria:

Eligibility: HSIP applies to major surgical procedures (10- or 90-day global procedures) furnished by general surgeons (specialty code 02) performed in a physician-designated HPSA ZIP code during the program period.

Amount and MA treatment: HSIP equals 10% of 80% of the Medicare allowed amount for the procedure; when ZIP codes are not yet in the automatic HPSA list, modifier AQ must be appended to claim HSIP unless the ZIP is on the automatic payment list.

HSIP is payable in addition to any HPSA physician bonus and may be paid quarterly or with each qualifying claim; statutory program duration is subject to legislative extension.

Consultation codes policy

Consultation coding policy for MA plans:

Starting for services on or after 2010-01-01, Medicare no longer pays for CPT consultation codes (99241-99245, 99251-99255); providers should bill the most appropriate visit code to Medicare based on visit content.

MA plans may choose, but are not required, to pay non-contracting physicians using the eliminated consultation codes provided the payment is not less than what Original Medicare would have paid for the same service.

Other Medicare payment systems (informational)

Summary of other Medicare payment systems referenced (ambulance, ASC, ESRD, DME, clinical lab):

Ambulance Fee Schedule (AFS) covers multiple service levels (9 levels) plus mileage and add-ons; certain temporary add-ons expire after March 31, 2015; a 10% reduction applies for some non-emergency ESRD BLS transports effective Oct 1, 2013.

Ambulatory Surgical Centers (ASCs) are paid under an APC-based fee schedule; ASC payments for many APCs are lower than OPD payments and are subject to limits tied to hospital OPD rates.

ESRD facilities are paid under an ESRD prospective payment system (PPS) bundled case-mix payment with outlier adjustments, QIP incentives, and certain add-ons; effective Jan 1, 2014 all ESRD payments are under ESRD PPS.

Durable Medical Equipment (DME) is paid at the lower of actual charge or state fee schedule and is influenced by the DMEPOS competitive bidding program; payment is based on the patient's residence and competitive bidding area rules may apply.

Clinical laboratory payments are determined by a lab fee schedule across 56 geographic regions or a national limitation amount; many OPD lab tests were to be packaged under OPPS beginning CY2014 and most lab fee schedule rates were scheduled to be based on private payer rates beginning Jan 1, 2017.

MA plan payment & Medicare provider payment rules

Payment and plan obligations for MA plans when provider billing follows Medicare rules for specific service types.

DMEPOS: MA plans that offer non-network coverage should inform members to use Medicare-certified DMEPOS suppliers; plans required to pay non-network suppliers Medicare rates may use competitive bidding area Medicare rates where applicable.

Clinical labs: Medicare pays the lesser of submitted charge, the lab fee schedule, or the national limitation amount; OPD packaging rules apply beginning CY2014 and lab fee schedule rates were scheduled to move toward private payer rates starting 2017.

Part B outpatient drugs: inexpensive drugs may be packaged into APC payment; drugs above a CMS cost-per-day threshold are paid at ASP + 6%; certain new drugs may be paid at ASP + 6% for initial years.

FQHCs: when paid under AIR, MA plans must pay 80% of the allowed charge plus 20% of the actual charge minus the plan's copay; when paid under PPS, the MA plan pays the lesser of PPS or actual charge; MA plans may request the approved FQHC rate letter from the FQHC or its MAC.

LTCH site-neutral exclusion criteria

Criteria determining exclusion from LTCH site-neutral payment (i.e., when full LTCH PPS may apply):

Discharge principal diagnosis is psychiatric or rehabilitation (if true, exclude from site-neutral payment).

Admission to the LTCH was immediately preceded by discharge from a subsection (d) hospital (must be true).

One of the following must be met: Either (a) the immediately preceding subsection (d) hospital stay included at least 3 ICU days (ICU criterion), OR (b) the LTCH discharge is assigned to an MS-LTC-DRG for ventilator services of at least 96 hours (ventilator criterion).

MDH and SCH payment rules

Payment calculation approach for Medicare Dependent Hospitals (MDH) and Sole Community Hospitals (SCH) when determining payment vs PPS:

If the hospital-specific rate (MA-HSP) exceeds the sum of operating FSP, outpatient outlier (OUTLR), and DSH, pay a percentage of the difference (example: 75% for MDH) added to operating payment; otherwise use PPS amounts. Then apply VBP, readmit adjustments, low-volume add-on, and add capital amounts.

For SCH with HMO=YES on the Pricer, use the greater of the operating PPS-based amount or the MA-HSP, then add the capital amount; follow the Pricer guidance for which field to use when calculating MA non-network payments.

Psychiatric hospital payment adjustments

Psychiatric hospital payment and quality reporting effects:

IPF PPS uses a federal per diem base adjusted for DRGs, comorbidities, age, rural add-on, teaching add-on, outliers, wage index, ED presence, and ECT; readmission rules and a tapered initial admission payment also apply.

Original Medicare has a lifetime limit of 190 days for freestanding psychiatric hospitals.

Beginning FY2015, failure to submit required quality data reduces the annual base update by 2 percentage points for psychiatric facilities that do not comply.

Cancer and children's hospital payments

Cancer and children's hospital payment characteristics:

Cancer hospitals are paid the lesser of actual costs or TEFRA limited costs; routine costs are often reimbursed on interim per-diem bases with limits and ancillary costs via payment-to-charge ratio; OPD payments may be more cost-based and higher than for acute care hospitals.

Cancer hospitals are subject to quality reporting beginning FY2014 and MA plans can reference MAC rate letters for interim per diems and cost-to-charge ratios when determining payments to non-network cancer hospitals.

Children's hospitals follow the same basic methodology as cancer hospitals for payment calculations under Medicare.

Bad debt reimbursement

Bad debt reimbursement rules and rates:

Bad debt reimbursement rate was set to 65% starting in FY2015; historical and provider-type specific rates for prior years are listed in CMS guidance.

Bad debt includes beneficiary deductible and coinsurance amounts (amounts the beneficiary is directly responsible for) but does not include payments due from Medigap policies; collection efforts for Medicare patients generally must match efforts for non-Medicare patients.

Balance billing

Balance billing rules under Medicare and MA plans:

Under Original Medicare, non-participating physicians (non-PAR) may balance bill up to 15% above the non-PAR MFS (non-PAR MFS = 95% of PAR MFS); Medicare pays 80% of the non-PAR MFS and the beneficiary is responsible for 20% plus any balance-billed amount.

Balance billing is generally not allowed for hospitals, SNF, home health, and lab services under Medicare, though OPD coinsurance can vary by procedure and may exceed 20%.

Some private PFFS plans may permit balance billing exceeding Medicare limits per plan terms (MA preemption can allow more permissive balance billing provisions under certain PFFS plan terms).

Low-volume hospital payments

Low-volume hospital add-on payments:

When the low-volume hospital program is in effect, the Pricer's TOTAL AMT includes the low-volume add-on (not shown separately); when run HMO=YES IME is omitted but the portion of the low-volume add-on attributable to IME is included and should be paid by plans to non-network hospitals.

HIT bonuses and meaningful use penalties

Health Information Technology (HIT) bonuses and penalties:

ARRA established HIT bonus payments to qualifying eligible professionals and hospitals; penalties for failure to meet Meaningful Use began for hospitals on 2014-10-01 and for physicians on 2015-01-01.

The HIT bonuses and penalties paid by FFS Medicare do not apply to MA plan payments to physicians or hospitals; CMS's monthly payments to MA plans do not include amounts to account for HIT bonuses/penalties, and plans required to pay non-network providers at least the Medicare amount may not reduce payments for HIT penalties.

Reimbursement rules for non-network providers and special facilities

Rules governing MAO payment amounts, exceptions, and special facility treatment.

General rule: MA organizations must pay non-contracting providers at least the combined amount the provider would receive under Original Medicare (Medicare payment plus beneficiary cost sharing and permitted balance billing).

Exception - non-PFFS MA plans: For non-network facilities (hospital, SNF, HHA) rendering unarranged services (emergency, urgently needed, out-of-area dialysis, post-stabilization), a non-PFFS MA plan may pay the lesser of the Original Medicare amount or the billed amount.

PFFS plans must always pay a non-contracting provider at least the Original Medicare amount, even if the billed amount is less (recognizing that for some fee schedules Medicare amount is the lesser of fee schedule or submitted charge).

If a provider submits a bill to the MAO in the same manner as under Original Medicare, the MAO should treat it as a request for the Original Medicare amount (not the billed charge) and pay accordingly.

Codes, thresholds and payment elements

Payment methodologiesmixed

DRG	Diagnosis Related Group used for inpatient prospective payment system (IPPS)
APC	Ambulatory Payment Classification used for outpatient prospective payment system (OPPS)

OPPS payment elementsmixed

APC	Ambulatory Payment Classification used for outpatient payments and associated coinsurance and outlier calculations
Pass-through drugs/devices	Specific drugs and devices paid in addition to APC payment as listed on CMS pass-through files

Home health payment groupsmixed

HHRG	Home Health Resource Group used to assign 60-day episode payments
LUPA	Low Utilization Payment Adjustment for home health episodes with four or fewer visits

SNF case-mix codesmixed

RUG-III

Resource Utilization Group version III used for SNF case-mix adjusted payments; reflected in HIPPS code

Primary care E/M codes for PCIPCPTCovered

99201-99215	Office/outpatient visit codes eligible for PCIP bonus
99304-99350	Other evaluation and management primary care codes eligible for PCIP bonus

Consultation codesCPTNot Covered

99241-99245, 99251-99255

Consultation codes eliminated by Medicare (should be billed as visit codes)

FQHC PPS encounter codesCPTCovered

G0466	FQHC visit, new patient
G0467	FQHC visit, established patient
G0468	FQHC visit, IPPE or AWV
G0469	FQHC visit, mental health, new patient
G0470	FQHC visit, mental health, established patient

Clinical trial codingModifier | ICD-10Covered

Q0	Clinical trial modifier
Q1	Clinical trial modifier
V70.7	Diagnostic code for clinical trial

Physician balance-billing limitsmixedCovered

limiting charge up to 115%

Non-participating physician limiting charge (up to 115% of fee schedule) for balance billing when permitted under Original Medicare

inv-29: Outlier threshold

Outlier payment triggerOutlier payment equals 80% of the excess of admission cost over the sum of the DRG payment (including IME, DSH, and new technology) plus an annual threshold; the threshold amount changes each year.

Cost determinationAdmission cost is generally calculated by multiplying the hospital's cost-to-charge ratio by its submitted charge, and submitted charges are used in outlier calculations.

ScopeApplies to IPPS inpatient admissions paid under DRG-based IPPS; Pricer/DRG grouper and annual thresholds determine payment, varying by hospital.

inv-30: Drug payment threshold (OPPS)

OPPS drug payment ruleIn OPPS, inexpensive drugs and biologicals are packaged into APC payments; drugs with cost per day above a CMS threshold are paid separately at ASP + 6%.

Packaging vs separate payWhen cost per day is below the OPPS threshold the drug is included in the APC payment; above the threshold it is reimbursed at ASP + 6% (some new drugs paid at ASP+6% for initial years).

Use in PricerOPPS Pricer reflects packaging, pass-throughs, and ASP+6% payments and is the source for MA plans required to pay Medicare-equivalent amounts.

inv-31: Outlier threshold

Outpatient outlier triggerAn outpatient department (OPD) receives an outlier payment when the cost of the visit compared to the APC payment amount exceeds a CMS-defined annual threshold; thresholds change yearly.

Cost basisSubmitted facility charges are used to calculate OPPS outlier costs (similar to inpatient), and the Pricer incorporates these adjustments and any HOP QDRP reductions.

ApplicabilityApplies to services paid under OPPS/APC methodology; outlier payments are in addition to APC payments and subject to annual threshold updates.

inv-32: Primary care charge threshold

PCIP qualification thresholdPrimary care services must account for at least 60% of a practitioner's total allowed charges under the physician fee schedule in the qualifying calendar year to qualify for PCIP.

Eligible servicesQualifying CPT codes include 99201-99215 and 99304-99350 for primary care services under PCIP.

Program periodPCIP applied to services furnished on or after Jan 1, 2011 and before Jan 1, 2016 (subject to legislative extension).

inv-33: Outpatient drug cost-per-day APC threshold

OPD drug cost-per-day thresholdWhen an outpatient department bills for drugs, payment is included in the APC if the cost per day is below a CMS threshold; if above the threshold, payment is at ASP plus 6%.

New drugsCertain new drugs may be payable at ASP + 6% for the first 2 or 3 years depending on policy, rather than being packaged.

Implication for MA plansMA plans required to pay the Medicare amount should use OPPS Pricer outputs which reflect packaging vs ASP+6% determinations.

inv-34: Psychiatric hospital lifetime limit

Lifetime day limitOriginal Medicare's lifetime limit for freestanding psychiatric hospitals is 190 days.

Payment systemFreestanding psychiatric hospitals and certified psychiatric units are paid under the IPF (IPF PPS) federal per diem system adjusted for multiple factors.

Quality reporting impactBeginning FY2015, failure to submit required quality data reduces the annual base update by 2 percentage points for psychiatric facilities.

inv-35: Payment floor for non-contracting providers

Payment floor for non-contracting providersMAOs generally must pay non-contracting providers at least the combined amount the provider would have received under Original Medicare (Medicare payment plus beneficiary cost sharing and permitted balance billing).

Exceptions for certain facility servicesA non-PFFS MA plan may pay the lesser of the Original Medicare amount or the billed amount for emergency, urgently needed, out-of-area dialysis and post-stabilization services rendered by non-network facilities.

PFFS plansA PFFS plan must always pay a non-contracting provider at least the Original Medicare amount, even if a lesser amount is billed; providers should review PFFS fee schedules and balance-billing rules before treating and becoming deemed.

Billing, documentation and operational steps for providers

Billing Rule

Claims process for new hospitals and interim capital amounts

When submitting claims where interim capital amounts or other Medicare-determined interim rates may apply (for example, new hospitals), providers should indicate on the initial bill that the facility qualifies for new hospital capital cost-based payments if the Pricer shows zero for capital. If the interim amount is not available at claim submission, the hospital should bill the plan upon discharge and then bill the plan for the additional capital amount as soon as the MAC determines an interim amount. Plans may ask providers to submit a copy of the most recent interim rate letter from their MAC. For outpatient interim payments, MACs calculate payment by applying the hospital cost-to-charge ratio to billed charges; inpatient interim payments are paid on a per diem cost basis. These rules apply to PPS hospitals (not cost hospitals such as CAHs).

New hospital capital amounts may appear as zero on the Pricer — notify the plan on initial bill
If interim amounts are unavailable, hospital bills additional capital amount once MAC sets interim rate
Plans may request the hospital's MAC interim rate letter

Documentation Required

Interim rate letter request

Providers may request an interim rate letter from their MAC to support reimbursement discussions with MA plans. If a plan requests documentation to substantiate interim or other MAC-determined rates, furnish the approved rate letter or interim determination promptly.

MA plans may ask hospitals to submit the most recent interim rate letter from their MAC
Provide documentation promptly to support payment of interim capital or other MAC-determined amounts

Billing Rule

Identify eligible providers and timing of bonus payments

MA plans may be required to make certain incentive or bonus payments to eligible providers (for example PCIP, HPSA/HSIP, PQRS). Providers should monitor HPMS incentive files and plan communications to confirm eligibility. Because some incentive entitlements (e.g., PQRS) are determined after the calendar year ends, plans may pay such bonuses as a lump-sum in the following year.

PCIP: CPT 99201-99215 and 99304-99350 eligible for 10% bonus on 80% of Medicare allowed charge; bonus paid regardless of HPSA
HPSA/HSIP: HSIP bonus is 10% of the Medicare allowed amount net of Part B coinsurance; may be paid in addition to PCIP
PQRS: wait until next year to determine and pay PQRS bonuses as a lump-sum based on provider's eligible claims
HPMS Data Extract Facility contains PQRS and PCIP eligibility files

Billing Rule

Modifier for non-automatic HPSA/HSIP payments

When HPSA/HSIP bonus payment eligibility is not automatically recognized by CMS files (for example, zip codes not yet in the HPSA ZIP code file), providers must append modifier AQ to the surgical procedure to claim the HSIP 10% payment. Use AQ only where original Medicare requires it; plans cannot require modifiers beyond what Original Medicare requires.

Append modifier AQ to eligible major surgical procedures when HPSA/HSIP payments are not automatically recognized
HSIP modifier applies to 10-day and 90-day global procedures furnished by eligible general surgeons in designated HPSAs
HSIP payment = 10% of Medicare allowed amount net of Part B coinsurance

Note

DMEPOS supplier guidance for MA plans

Plans offering non-network coverage should advise members to use Medicare-certified DMEPOS suppliers. When paying non-network suppliers at Medicare rates, plans may apply the competitive bidding area (CBA) rates where applicable if the supplier accepts those rates for Original Medicare claims. MA organizations must inform members how the DMEPOS competitive bidding program affects them and what to do if they need to change suppliers.

Tell members to use Medicare-certified DMEPOS suppliers
If supplier accepts Original Medicare competitive bidding rates, plans required to pay may use the lower CBA Medicare rate
MAOs and Cost HMOs/CMPs must inform members about how competitive bidding affects their DMEPOS coverage and supplier changes

Documentation Required

FQHC rate documentation request

FQHCs should be prepared to provide plans with their approved rate letter from the FQHC's MAC when requested. When plans pay based on AIR, the MA plan must pay 80% of the allowed charge plus 20% of the actual charge minus the plan's copay. When paying based on PPS, payment is the lesser of the PPS amount or the actual charge. Certain preventive services may have no cost sharing.

Plans may request a copy of the approved FQHC rate letter from the FQHC or its MAC
AIR payment: plan pays 80% of allowed charge + 20% of actual charge - plan copay
PPS payment: lesser of PPS amount or actual charge

Billing Rule

Clinical trials billing and MA plan payment handling

For services furnished as part of qualified clinical trials, providers must code claims using the appropriate clinical trial modifiers (for example Q0 or Q1) and/or diagnostic code V70.7 and submit bills to carriers, intermediaries, or MACs using the proper modifiers and diagnosis codes. Medicare reimburses qualifying clinical trial claims on behalf of MA members and waives Part A and Part B deductibles; MA plans are responsible for the remaining Original Medicare coinsurance minus the plan's normal member copays for the incurred types of service.

Use modifier Q0 or Q1 and/or diagnostic code V70.7 when billing clinical trial services
Submit bills to carriers, intermediaries, and MACs with proper modifiers and codes
Medicare waives Part A and B deductibles for qualifying clinical trials; plans pay remaining coinsurance minus member copays

Prior Authorization

Payment dispute process

As of January 31, 2014, providers should contact the MAO or other payer directly to dispute payments. Providers should exhaust the plan's internal dispute process first. If still unresolved, providers may file a complaint through 1-800-Medicare and pursue other actions as they deem appropriate. CMS enforces regulations requiring MAOs and other payers to follow reimbursement rules; non-contracted providers are required to accept as payment in full the amount they could collect under Original Medicare.

Contact the MAO or other payer directly to dispute payments (post-1/31/2014 change)
Exhaust the plan's internal dispute process before escalating
If unresolved, file a complaint via 1-800-Medicare in addition to other actions
Non-contracted providers must accept as payment in full the amount collectible under Original Medicare

Key terms and abbreviations

inv-47: Deemed provider

Deemed provider (PFFS)A provider who elects to treat a PFFS enrollee under the plan's terms and thereby is considered a contracting provider for that encounter; the decision is ad hoc and does not obligate the provider to treat other enrollees.

Provider decisionProviders must examine the PFFS plan's fee schedule and balance-billing rules before deciding to treat and be deemed, since plan terms may differ from Original Medicare.

Billing formsWhen plans must pay the Medicare amount, plans must accept from providers the same billing forms used to bill Original Medicare.

inv-48: IPPS

DefinitionIPPS (Inpatient Prospective Payment System): hospital inpatient payment system based on Diagnosis Related Groups (DRGs).

Payment componentsDRG payments consist of operating and capital components and include IME, DSH, outliers, and new technology add-on payments.

Pricer and variabilityCMS Pricer software and the DRG grouper determine per-discharge payments which vary by hospital and geography; submitted charges are used for outlier calculations.

inv-49: OPPS

DefinitionOPPS (Outpatient Prospective Payment System): outpatient hospital payment system using Ambulatory Payment Classifications (APCs).

Packaging and pass-throughsInexpensive drugs and biologicals are packaged into APC payments; pass-through drugs/devices listed on CMS files are paid in addition to APC payments.

Outlier and PricerOutpatient outlier payments apply when visit cost exceeds APC payment plus an annual threshold; the OPPS Pricer and outpatient code editor determine payment amounts.

inv-50: TOPS

DefinitionTOPS (Transitional Outpatient Payments): historical 'hold-harmless' payments for hospitals paid less under PPS than under the prior cost system; some hospitals (e.g., SCHs, cancer hospitals) may still be eligible subject to legislative changes.

Scope and changeTOPS eligibility and formulas have changed over time and are subject to legislative modification; TOPS may interact with other add-ons when calculating final OPD payment amounts.

inv-51: Pass-through

DefinitionPass-through: drugs and devices paid in addition to the APC payment for the primary outpatient service as listed on CMS pass-through payment files.

ReferenceCMS publishes files showing payment amounts for pass-through drugs and devices which determine additional OPPS payments.

inv-52: HHRG

DefinitionHHRG (Home Health Resource Group): a classification used to assign patients to one of 153 groups (as of writing) for 60-day episode payments under the home health PPS.

Episode vs LUPAEpisodes with 5 or more visits are paid by HHRG for 60-day episodes; fewer than 5 visits result in LUPA per-visit payments.

inv-53: Swing bed

DefinitionSwing bed: a hospital bed that may be billed as SNF services and is paid under the SNF PPS; in Critical Access Hospitals swing beds are exempt from PPS and are paid at 101% of reasonable costs.

Payment noteWhen billed as SNF services, swing bed stays follow SNF PPS case-mix payment rules; CAH swing beds receive cost-based payment at 101%.

inv-54: PCIP

DefinitionPCIP (Primary Care Incentive Payment): a quarterly incentive equal to 10% of Medicare's payment for qualifying primary care services furnished between Jan 1, 2011 and Dec 31, 2015 (subject to extension), payable to eligible primary care practitioners.

Eligibility criteriaEligible specialties include family medicine, geriatric medicine, pediatric medicine, internal medicine, nurse practitioner, clinical nurse specialist, and physician assistant; 60% primary care charge threshold applies.

inv-55: HSIP

DefinitionHSIP (HPSA Surgical Incentive Payment): a 10% incentive for qualifying major surgical procedures (10- or 90-day global) performed by general surgeons in physician-designated HPSAs, paid on 80% of Medicare allowed amount.

ClaimingUse modifier AQ when the HPSA ZIP code is not recognized for automatic payment; AQ must be appended unless ZIP is on the automatic list.

inv-56: Consultation codes

DefinitionConsultation codes: CPT consultation codes (99241-99245, 99251-99255) are no longer paid by Medicare for services on or after Jan 1, 2010; services should be billed using appropriate visit codes.

MA plans optionMA plans may choose, but are not required, to pay non-contracting physicians based on the eliminated consultation codes if the payment is not less than what Original Medicare would have paid.

inv-57: national limitation

DefinitionNational limitation: the national limitation amount used in the clinical lab fee schedule representing a national payment limit for many lab tests.

ApplicationMedicare pays the lesser of the submitted charge, the fee schedule, or the national limitation amount for each lab HCPCS code.

inv-58: AIR

DefinitionAIR (All-Inclusive Rate): the historical-cost-based per-visit rate used for FQHCs under the AIR methodology; payment is the lesser of AIR or the national per-visit limit for AIR-billing FQHCs.

Transition noteFQHCs will transition to encounter-based PPS beginning Oct 1, 2014; MA plans must apply the appropriate AIR/PPS methods when reimbursing non-network FQHCs.

inv-59: RHC AIR

DefinitionRHC AIR: provider-specific all-inclusive rate for Rural Health Clinics determined from historical costs; payment is the lesser of provider-specific AIR or national per-visit limit except where the limit does not apply to certain hospital-based RHCs.

CoinsuranceCoinsurance for RHC services is 20% of charges (beneficiary coinsurance), and RHC services are subject to Part B deductible based on billed charges.

inv-60: PPS

DefinitionPPS (Prospective Payment System): a case-mix or DRG-based prospective payment methodology used for various facility types, including LTCHs (DRG-based) and IRFs (CMG-based).

ExamplesLTCHs use a DRG-based PPS with minimum average length-of-stay criteria; IRFs use IRF PPS with case-mix groups (CMGs) and a qualifying-condition percentage.

inv-61: LTCH site-neutral payment

DefinitionLTCH site-neutral payment: beginning 10/1/2015 LTCHs transition toward site-neutral payments that pay the lesser of the PPS amount or 100% of the cost of the hospital stay, with exclusions based on diagnosis, prior hospital stay and ICU/ventilator criteria.

ExclusionsExclusions from site-neutral include principal psychiatric/rehabilitation diagnoses, admission immediately preceded by a subsection (d) hospital discharge, and either >=3 ICU days in the preceding stay or MS-LTC-DRG ventilator >=96 hours.

inv-62: IRF PPS / CMG

DefinitionIRF PPS / CMG: Inpatient Rehabilitation Facility Prospective Payment System uses Case-Mix Groups (CMGs) to make case-mix adjusted payments for varying numbers of days of IRF care; facilities qualify if a percentage (e.g., 60%) of their patients meet qualifying conditions.

CountsAs of the writing there were 13 qualifying conditions and 92 CMGs used to determine payments.

inv-63: IPF PPS

DefinitionIPF PPS: Inpatient Psychiatric Facility Prospective Payment System—federal per diem adjusted for DRGs, comorbidities, age, rural add-on, teaching add-on, outliers, wage index, ED presence, and ECT treatment.

FeaturesIncludes a tapering additional payment during initial days of admission, outlier rules based on per-stay loss thresholds, and quality reporting-related updates and penalties.

inv-64: Original Medicare amount

DefinitionOriginal Medicare amount: the combined amount a provider would receive under Original Medicare (Medicare payment plus beneficiary cost sharing and permitted balance billing) used as the baseline payment MA plans must meet for non-contracting providers.

Use by MA plansWhen a provider bills an MAO using the same forms as Original Medicare, the MAO should treat it as a bill for the Original Medicare amount and pay accordingly.

inv-65: Balance billing

DefinitionBalance billing: provider billing of amounts above the plan's cost sharing; permitted only where allowed under Original Medicare (e.g., non-PAR physicians not accepting assignment may balance bill up to the limiting charge, typically up to 115% of non-PAR fee schedule).

MA plan responsibilitiesWhen balance billing is permitted under Original Medicare and a provider balance bills an MA enrollee, the MA organization is legally responsible to pay the additional amount and indemnify the enrollee.

Provider of services restrictionProviders of services (hospitals, SNFs, HHAs, etc.) generally cannot balance bill MA enrollees under MA rules (42 CFR §422.214(b)).

inv-66: HIT bonuses/penalties

DefinitionHIT bonuses/penalties: incentives and penalties created under ARRA for Meaningful Use of health IT for qualifying EPs and hospitals; CMS also established a separate HIT bonus for qualifying MAOs.

MA plan treatmentHIT bonuses and penalties paid by FFS Medicare do not apply to MA plan payments to physicians or hospitals; CMS monthly payments to MA plans do not include amounts to account for HIT bonuses/penalties and plans may not reduce provider payments for HIT penalties.

OpenPayer

Medicare out-of-network payment guide for MA and Part C organizations

Coverage rules and payment criteria

Codes, thresholds and payment elements

Billing, documentation and operational steps for providers

Key terms and abbreviations