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© 3M 2012. All Rights Reserved. 3M provides these slides to promote a better understanding of 3M's software and/or services. These slides contain 3M confidential.

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Presentation on theme: "© 3M 2012. All Rights Reserved. 3M provides these slides to promote a better understanding of 3M's software and/or services. These slides contain 3M confidential."— Presentation transcript:

1 © 3M All Rights Reserved. 3M provides these slides to promote a better understanding of 3M's software and/or services. These slides contain 3M confidential information and are for customer’s internal review only. 3M Health Information Systems 3M™ Ambulatory Patient Grouping System (EAPGs) Innovating Health Language of the Washington State Hospital Association Feb 26, 2013

2 2 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems Agenda  Introductions  3M role  Rationale for EAPG  EAPGs compared to DRG, APC, APG  EAPG Grouping Features  EAPG Reimbursement Features  Service mix index  Questions and discussion

3 3 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems 3M’s Role  3M HIS specializes in classification systems (groupers) using coded claims data for health data analysis and payment  Provider market focus: the clinical record ―Creating (dictation/transcription) and managing it (document management and abstracting) ―Coding, coding compliance, managing coding process ―Grouping and reimbursement for managing expected reimbursement  Payer market focus: help payers bend the cost curve by deploying groupers for payment and for quality-based payment incentives

4 4 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems 3M’s Role with Payment Initiatives We: Create payment weights Create payment policy “levers” (outlier thresholds, policy adjustors (e.g. DSH) Provide instructions and support Share information about what other states have done Create state-specific grouper and payment formula We do not: Require the use of 3M weights “Pull the levers”

5 5 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems More on 3M’s Role with Payment Initiatives (Cont.)  Grouper Logic is transparent  Availability of EAPG Definitions Manual to all at N/C  Provider Education involving WSHA, WHA, 3M

6 6 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems Rationale for Use of EAPG for Payment  Payers can best understand and manage outpatient costs by implementing an outpatient prospective payment system (OPPS). There are only two OPPS available: APCs and EAPGs  EAPGs are superior to APCs especially for Medicaid programs: Designed for a all-patient rather than for just a Medicare population Cover all outpatient services rather than aligning with Medicare payment policy that uses fee schedules for certain services (e.g., therapies, clinical labs, chemotherapy drugs ) Classify medical outpatient visits based on diagnoses-not E&M codes matching payment to need and permitting service site neutrality of payment Bundling features create incentives for efficiency

7 7 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems EAPGs In Use Today  OK BC/BS (2009)  NY Medicaid (2010)  VA Medicaid - ASCs (2010)  IA BC/BS (2010)  SD BC/BS (2010) Announced:  VA Medicaid – Hospitals (2013)  IL Medicaid (2013)  WI Medicaid (2013)  MN BC/BS (2013) In Consideration for 2013:  (2) Medicaid  (2) BC/BS Plans

8 8 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems Enhanced Ambulatory Patient Groups (EAPGs) Defined  EAPGs are a patient classification system designed to explain the amount and type of resources used in an ambulatory visit. Patients in each EAPG have similar clinical characteristics and similar resource use and cost.  EAPGs were developed to encompass the full range of Ambulatory settings including same day surgery units, hospital emergency rooms, and outpatient clinics.  EAPGs can not address nursing home services, inpatient services or miscellaneous services like transportation.  EAPGs developed to represent ambulatory care across all payers, not just Medicare.

9 9 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems Case Mix Complexity in EAPGs  Surgeries, other procedures, tests ―Different EAPGs based on expected resource use (similar operating time, medical surgical supplies, etc) ―Example: (4) EAPGs for differing levels of laceration repair differentiated by extent and complexity of repair  Medical ―Different EAPGs based on expected resource use (similar visit time, medical supplies, etc) ―Example: extreme acute manifestation of disease (ketoacidosis in a diabetic) are categorized into a separate medical EAPG

10 10 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems Case Mix Complexity in EAPGs (Cont.) Patients may be assigned, and paid for, more than one EAPG per visit  One for medical visit including routine ancillary services (e.g. chest x-ray, urine test) assigned and paid  Additional EAPG(s) may be assigned and paid for non-routine services (blood clotting factor test)  Multiple distinct procedures have separate EAPGs assigned and paid

11 11 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems EAPG Based Payment System  Each EAPG has an associated relative weight for payment  Weights indicate the relative resource utilization among all ambulatory services ―Resource intensive services have higher weights  EAPG payment for a visit is computed as the sum of the payment weights for all non consolidated, non packaged EAPGs with applicable multiple procedure discounts applied.  Incentive for efficient use of routine ancillary services is created by significant procedure consolidation and by the packaging of routine ancillaries into base visit payment No incremental payment for routine, low cost ancillaries (blood chemistry, chest x- ray, ekg, etc.)

12 12 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems EAPGs vs. DRGs  DRGs ―Describes an inpatient admission ―Uses discharge date to define code sets ―Based on Dx and Px codes ―Each admission assigned only 1 DRG  EAPGs ―Defines ambulatory visit ―Uses from date to define code sets ―Based on Dx and Px codes ―Multiple EAPGs may be assigned per visit – meaning more than a single line item receives payment Note: Non-routine and high resource services are paid separately. More complex outpatient visits have more non-routine services and have more payable EAPGs assigned.

13 13 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems Outpatient prospective payment system (OPPS): A brief history M Health Information Systems delivers an OPPS under contract with HCFA (now CMS) — APGs are introduced Iowa Medicaid implements the first APG-based OPPS, and other payers follow. APG v2.0 released CMS implements APCs (an APG derivative) as the Medicare OPPS. APCs are Medicare-focused and not fully prospective. Payers move to APC-based OPPS Non-Medicare cost controls renew interest in APG-based OPPS. 3M undertakes a major clinical update and introduces 3M™ Enhanced APG System. Today - Other major payers continue to adopt 3M EAPGs. 3M Health Information Systems consistently delivers quarterly regulatory updates to the 3M EAPG methodology and grouping software and also continues to refine the 3M EAPG products to reflect current outpatient clinical practice Massachusetts Medicaid implements 3M EAPG-based OPPS. 3M EAPGs are ICD-10 ready New York Medicaid implements the first 3M EAPG-based OPPS.

14 14 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems APGs vs. EAPGs  Updated for clinical relevancy  More flexibility for implementing options within grouper  Number of classifications ―APGs: 273 ―EAPGs: 553 (version 3.8)  Increased number of medical and significant procedure groupings  Modifier usage  APG Types  EAPGs include significant increase in drugs groups ―Provides more granularity ―Addresses issues of high cost drugs  EAPGs include DME

15 15 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems EAPG types (Version 3.5, January 2011) EAPG TypeDescription  1Per Diem  2Significant Procedure  21Physical Therapy & Rehab  22Mental Health & Counseling  23Dental Procedure  24Radiologic Procedure  25Other Diagnostic Procedure  3Medical Visit  4Ancillary  5Incidental  6Drug  7DME  8Unassigned All treated as significant procedures for consolidation and discounting purposes

16 16 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems Types: APGs vs. EAPGs (version 3.4)

17 17 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems EAPGs vs. APCs: Grouping CategoryAPCsEAPGS Number of groupings802 APC groups553 EAPG groups Multiple service lines Each reviewed Each reviewed individually individually and assigned to EAPGs, as Paid by APCappropriate, all lines assigned a Paid by fee schedule EAPG Packaged Rejected/denied – OCE edits Editing Extensive edits – Almost no editing within Claim denials 83 OCE editsgrouper Claim rejections Claim suspensions Claim RTP Line item denial Line item rejection

18 18 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems EAPGs vs. APCs: Grouping; p2 CategoryAPCsEAPGS Status indicators Many Not used Examples: A – service paid by fee schedule S – paid by APC: sign. px T – paid by APC: sign. Px with discounting N – packaged service; no separate payment V – paid by APC: medical visit TypesNone13 EAPG types Examples:  Significant Procedure  Medical Visit  Ancillary CategoriesNone54 Examples: Musculoskeletal system procedures Pulmonary system procedures

19 19 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems EAPGs vs. APCs: Grouping; p3 CategoryAPCsEAPGS Condition codesModerate useVery limited use G Value codesUsed: Not used Ambulance Blood deductible Inpatient only listUsed – defined by CMSUsed – defined by select agency PackagingPackaging by line item –Extensive status indicator NSignificant procedure consolidationAncillary packaging

20 20 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems EAPGs vs. APCs: Reimbursement CategoryAPCsEAPGS Discounting Discontinued Multiple EAPGs procedures Discontinued procedures Multiple T-type proceduresMultiple levels available(e.g.. 100%; 50% 50%; 25%) allowed Pass-through cost (chargeConcept not used paymentstimes CCR)

21 21 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems Summary EAPG vs. APC Used with permission: G. Allen, NY DoH and adapted by DNFee

22 22 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems 3M™ Enhanced Ambulatory Patient Groups Logical Functions within Products Editing if defined Grouping function performed Reimbursement Calculated* *Policy decisions made by implementing payer What will be paid?

23 23 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems EAPG Logic Significant procedures or therapies present Type of procedure or therapy Significant procedure or therapy visit EAPG YES NO Medical visit indicator EAPG present Major signs, symptoms or findings present YES Ancillary tests or procedures present NO Major SSF EAPG Primary dx code NO Medical visit EAPG Types of ancillary tests or procedures YES Ancillary only visit EAPG Error EAPG NO Assignment of additional SP or therapy EAPGs Assign ancillary (additional) EAPGs

24 24 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems Sample EAPG Assignments 543 EAPGs defined

25 25 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems EAPG Types EAPG TypeDescription  1Per Diem  2Significant Procedure  21Physical Therapy & Rehab  22Mental Health & Counseling  23Dental Procedure  24Radiologic Procedure  25Other Diagnostic Procedure  3Medical Visit  4Ancillary  5Incidental  6Drug  7DME  8Unassigned

26 26 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems EAPG Categories (examples) EAPG CategoryEAPG Category Description  1Skin and integumentary system procedures  2Breast procedures  3Musculoskeletal system procedures  4Pulmonary system procedures  5Cardiothoracic procedures  6Hematopoietic system procedures  7Gastrointestinal system procedures  8Genitourinary system procedures  9Male Reproductive system procedures  10Female Reproductive system procedures  11Neurologic system procedures  16Mental illness and substance abuse therapies  30Incidental procedures and services  71Mental diseases and disorders  99No EAPG assigned  Total of 54 categories

27 27 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems Three Types of Procedures in the EAPG System SIGNIFICANT PROCEDURES: Normally scheduled, constitutes the reason for the visit and dominates the time and resources expended during the visit Example: excision of skin lesion, stress tests ANCILLARY TESTS AND PROCEDURES: Ordered by the primary physician to assist in patient diagnosis or treatment Example: immunizations, plain films, laboratory tests INCIDENTAL PROCEDURE: An integral part of a medical visit and is usually associated with professional services Example: range of motion measurements

28 28 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems Medical EAPGs Describe patients who receive medical treatment but do not have a significant procedure performed during the visit. Medical patients are described using the diagnoses of the patient coded in ICD-9-CM.

29 29 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems Medical visit EAPG – Assigned with Primary Dx Code  Assigned based on primary dx code ―UB-04 form locator 67 (field attributes: 1 field; 1 line) ―X12, 837 Loop ID – 2300; Reference Indicator – H101-C022-02; X12 Element # – 1271; Data Element Qualifier – 1270-BK or ABF for ICD10 ―Definition: “The ICD-9-CM code for the diagnosis, condition, problem, or other reason for encounter/visit shown in the medical record to be chiefly responsible for the services provided. List additional codes that describe any coexisting conditions. In some cases the first-listed diagnosis may be a symptom when a diagnosis has not been established (confirmed) by the physician..” (ICD-9-CM Official Guidelines for Coding and Reporting, October 1, 2008, Section IV.H, Page 102)  Requires a medical visit indicator code ―E&M CPT code  The medical visit EAPG is assigned to the E&M code

30 30 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems Medical visit - Angina

31 31 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems Medical Visit - Heartburn

32 32 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems Packaging  Sometimes referred to as bundling  General concept: For payment purposes, the inclusion of payment for certain services within payment for significant procedures or medical services.  A concept/phrase to learn and know ―Just because something does not have separate payment, does not mean it receives no payment ―A bundled/packaged service receives no separate payment

33 33 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems Packaging – The General Concept  EAPG standard logic includes ―Consolidation (significant procedure consolidation) ―Ancillary packaging

34 34 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems EAPG Packaging – Standard Grouping Logic  Significant procedure consolidation ―Same EAPG ―Clinical (related procedures)  Ancillary packaging ―Uniform list of ancillary EAPGS ―Always packaged when other EAPG is present

35 35 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems Uniform Packaging List EAPGEAPG Description 373 LEVEL I DENTAL FILM 374 LEVEL II DENTAL FILM 375 DENTAL ANESTHESIA 376 DIAGNOSTIC DENTAL PROCEDURES 377 PREVENTIVE DENTAL PROCEDURES 380 ANESTHESIA 390 LEVEL I PATHOLOGY 394 LEVEL I IMMUNOLOGY TESTS 396 LEVEL I MICROBIOLOGY TESTS 398 LEVEL I ENDOCRINOLOGY TESTS 400 LEVEL I CHEMISTRY TESTS 402 BASIC CHEMISTRY TESTS 406 LEVEL I CLOTTING TESTS 408 LEVEL I HEMATOLOGY TESTS 410URINALYSIS 411 BLOOD AND URINE DIPSTICK TESTS 412 SIMPLE PULMONARY FUNCTION TESTS EAPGEAPG Description 413 CARDIOGRAM 423 INTRODUCTION OF NEEDLE AND CATHETER 424 DRESSINGS AND OTHER MINOR PROCEDURES 425 OTHER MISCELLANEOUS ANCILLARY PROCEDURES 426 PSYCHOTROPIC MEDICATION MANAGEMENT 427BIOFEEDBACK AND OTHER TRAINING 428 PATIENT EDUCATION INDIVIDUAL 429PATIENT EDUCATION GROUP 448 EXPANDED HOURS ACCESS 449 ADDITIONAL UNDIFFERENTIATED MEDICAL VISIT/SERVICES 457 VENIPUNCTURE 471 PLAIN FILM

36 36 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems Ancillary Packaging  Ancillary service is packaged when: ―The EAPG into which the service is groups is on the packaging list ―A medical visit EAPG is present, OR ―A significant procedure is present  If ancillary service is provided alone ―No packaging is done

37 37 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems Example of Ancillary Packaging

38 38 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems Ancillary Packaging P. dx: Ac mastoiditis w/o complication

39 39 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems Ancillary service w/o Medical Visit or Significant Px EAPG PDX: Ac mastoiditis w/o complication

40 40 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems Packaging  Includes a packaging algorithm.  Users will have the option to turn off/on packaging.  Users will be able to make modifications to the packaging lists.  Users will be allowed to change (add to / delete from the packaging list).

41 41 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems EAPG Packaging Controls

42 42 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems EAPG packaging – Standard Grouping Logic  Significant procedure consolidation (bundling) ―Same EAPG ―Clinical (related procedures)  Ancillary packaging ―Uniform list of ancillary EAPGS ―Always packaged when other EAPG is present

43 43 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems Significant Procedure Consolidation  When a patient has multiple significant procedures, some of the significant procedures may require minimal additional time or resources. Significant procedure consolidation refers to the collapsing of multiple related significant procedure APGs into a single EAPG for the purpose determining the payment.  Example: If both a simple incision and an complex incision are coded on a patient bill, only the complex skin incision will be used in the EAPG payment computation.

44 44 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems Consolidation Controls  Types of consolidation ―Multiple same procedure ―Clinical (based on clinical algorithm)

45 45 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems Clinical Significant Procedure Consolidation Example

46 46 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems Example of Clinical Significant Procedure Consolidation PDX: 9562 Inj posterior tib nerve

47 47 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems Example of same SP consolidation Diagnosis: 9100 Abrasion head

48 48 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems Consolidation Controls

49 49 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems Never Pay Services  Carve outs  Services that are just not covered by the payer ―Examples: cosmetic surgery  Services are just paid through another mechanism – billed differently ―Possible example: vaccines that are paid through federal grants and not included in the PPS  Grouper allows never pay services to be defined by HCPCS code or EAPG

50 50 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems Never Pay Services

51 51 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems CPT Modifiers that may have EAPG impact  Modifiers recognized in EAPGs ― 25 – Distinct service Allows reimbursement for a medical visit (E&M) EAPG on the same day as a distinct and separate significant procedure ― 27 – Multiple E&M encounters Allows reimbursement for multiple non-related medical visits (multiple E&M codes) on the same date of service. ― 50 – Bilateral procedure Flags PX code for additional payment ―52 – Discontinue service Payment discounted ―59 – Distinct procedure Bypasses consolidation for line item with modifier Line item paid ―73 – Terminated procedure Payment discounted ―GN, GO, GP for speech, occupational, and physical therapies (not used)

52 52 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems Inpatient Only List  Same concept as under APCs  List slightly different than Medicare’s list ―Less restrictive

53 53 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems List of Codes - Observation  EAPGS ― EAPGEAPG DescriptionEAPG TypeEAPG Category ―450OBSERVATION4 (Ancillary)23 ―492ENCOUNTER/REFERRAL FOR OBSERVATION INDICATOR5 (Incidental)30 ―500ENCOUNTER/REFERRAL FOR OBSERVATION - OBSTETRICAL3 (Medical)50 ―501ENCOUNTER/REFERRAL FOR OBSERVATION - OTHER DIAGNOSES3 (Medical)50 ―502ENCOUNTER/REFERRAL FOR OBSERVATION - BEHAVIORAL HEALTH3 (Medical)50  Observation visit indicators (OVI) ― HCPCS HCPCS DescriptionEAPGEAPG Description ― 99217Observation care discharge492 ENCOUNTER/REFERRAL FOR OBSERVATION INDICATOR ― 99218Initial observation care492 ENCOUNTER/REFERRAL FOR OBSERVATION INDICATOR ― 99219Initial observation care492 ENCOUNTER/REFERRAL FOR OBSERVATION INDICATOR ― 99220Initial observation care492 ENCOUNTER/REFERRAL FOR OBSERVATION INDICATOR ― 99224Subsequent observation care492 ENCOUNTER/REFERRAL FOR OBSERVATION INDICATOR ― 99225Subsequent observation care492 ENCOUNTER/REFERRAL FOR OBSERVATION INDICATOR ― 99226Subsequent observation care492 ENCOUNTER/REFERRAL FOR OBSERVATION INDICATOR ― 99234Observation/hosp same date492 ENCOUNTER/REFERRAL FOR OBSERVATION INDICATOR ― 99235Observation/hosp same date492 ENCOUNTER/REFERRAL FOR OBSERVATION INDICATOR ― 99236Observation/hosp same date492 ENCOUNTER/REFERRAL FOR OBSERVATION INDICATOR ― G0379Direct refer hospital observation492 ENCOUNTER/REFERRAL FOR OBSERVATION INDICATOR  Observation ― G0378Hospital observation per hr450 OBSERVATION  Other ― Medical Visit Indicators (MVI) [Series of E&M codes for clinic and ED visits]

54 54 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems Observation Logic  All observation is packaged in presence of significant procedure or per diem EAPGs  HCPCS G0378 is present  Two types of observation ―Ancillary EAPG ―Medical EAPG

55 55 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems Observation Logic  MVI also present ―MVI assigned to medical visit and paid  Ancillary observation services: ―G0378 reported with hours of observation (usually a minimum of 8 hours) Assigned to EAPG 450 (“Observation”, weight = ), paid separately based on packaging logic Ancillary Observation EAPG

56 56 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems Observation Logic  Medical observation EAPG assignment ―Must be present: OVI - code assigned to EAPG 492 (“ENCOUNTER/REFERRAL FOR OBSERVATION INDICATOR”) Ancillary observation EAPG 450 (“Observation”) ―Exception If no EAPG 450, OVI is assigned EAPG 999 If no OVI, but MVI is present, normal medical visit logic applied for the MVI ―Final medical observation EAPG assignment is driven by primary dx code ―EAPG 492 changes to one of three medical EAPGs (if all criteria met) 500 ENCOUNTER/REFERRAL FOR OBSERVATION - OBSTETRICAL 501 ENCOUNTER/REFERRAL FOR OBSERVATION - OTHER DIAGNOSES 502 ENCOUNTER/REFERRAL FOR OBSERVATION - BEHAVIORAL HEALTH ―EAPG 450 is packaged Medical observation assignment

57 57 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems Observation Logic OVI assigned to medical observation EAPG (500 – 502) based on primary dx code; G0378 assigned to EAPG 450 and is packaged Sign Px or PerDiem EAPG present? OVI and/or MVI present? No HCPCS G0378 Present on claim? G0378 assigned to EAPG 450 and is packaged Yes No MVI only OVI only MVI and OVI MVI assigned medical EAPG based on primary dx code ; HCPCS G0378 assigned to EAPG 450 and paid separately, based on packaging logic OVI assigned to medical observation EAPG; G0378 assigned to EAPG 450 and packaged; MVI assigned to 491 and packaged Yes G0378 assigned to EAPG 999 OR

58 58 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems Logical Functions within Products Editing if defined Grouping performed function Reimbursement Calculated* How much will it be paid? *Policy decisions made by implementing payer

59 59 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems Payment Formula  Items consolidated, packaged, not grouped paid $0.00  Conversion factor (CF) [also called the base rate] x ―TIMES  EAPG weights ―TIMES  Discount percentage  Line items summed for visit total Adjusted weight (AW)

60 60 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems How are they paid? Lines paid Services reported: Revenue code only HCPCS codes included Grouped servicesSignificant Px Consolidation Ancillary Packaging CF * AW = line item payment Sum of line items payments = Total Payment

61 61 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems Multiple Significant Procedure Discounting  When multiple significant procedures or therapies are performed, a discounting of the EAPG payment is applied. Discounting refers to a reduction in the standard payment rate for an EAPG. Discounting recognizes that the marginal cost of providing a second procedure to a patient during a single visit is less than the cost of providing the procedure by itself.

62 62 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems Discounting Example  Multiple unconsolidated significant procedure EAPGs ― Level 1 – 100% (highest weighted EAPG) ― Level 2 – 50% ― Level 3 and greater – 25%  Multiple unpackaged ancillaries ― Repeat same ancillary EAPGs Level 1 – 100% Level 2 – 50% Level 3 and greater – 25% ― Multiple different ancillary EAPGs  Modifiers ―50 – Bilateral procedure Flags PX code for additional payment – 150%

63 63 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems Discounting Example

64 64 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems 340b Drug Programs  Pre-defined and pre-set  Based on end-user reporting

65 65 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems User-Defined 340B Drug EAPG  EAPG 1090 – “USER DEFINED 340B DRUGS” ―Purpose: Provide users a method to customize a list of HCPCS codes representing drugs subject to the 340B Drug Rebate Program ―No codes automatically assigned ―User to assign codes for this EAPG, restricted to those assigned to EAPG with EAPG type 6, “Drugs” ―Provides ability to provide a discount for the payment of these drugs ―Functionality: If drug HCPCS code added to list, assigned to EAPG 1090 instead of standard EAPG ―Why? Allows for assignment of a weight to this EAPG, even standard EAPG is packaged, and For packaging of low cost drugs, and still pay for drugs on 340b list, in compliance with CMS requirements ―Packaging and discounting logic not applied EAPG version 3.8

66 66 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems New Flags: Modifier UD other Option for 340b drugs  Modifier UD – state defined modifier  Provider reports modifier with drug code  Payer may then use this as an indicator for payment differentiation for drugs that may be part of a 340b drug program  Grouper outputs a flag to indicate the modifier was reported  Alternative to handling 340b drugs EAPG version 3.4 – 3.8

67 67 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems Single Visit (Episode) vs. Multiple Visit Processing  Multiple visit claims (claims with different from and through dates) ―Most claims treated as multiple claims ―Determined by the line item dates of service ―A single claim may include services provided on two or more days Ex: surgical work up and then a same day surgery a few days later Series services, such as therapies, or wound care ―For payment purposes services provided on a single day (based on line item dates of service) are treated a logic visits ―Packaging and discounting performed based on the visit and not the claim

68 68 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems Single Visit (Episode) vs. Multiple Visit Processing (Cont.)  Single visit claims (episodes) ―All services reported on a claim are treated as a single visit for payment purposes Claims when the from and through date are equal, and When specific revenue codes are present regardless if the from and through dates are equal –For example: revenue codes: 450, 451, 452, 456, 459, 762 ―Packaging and discounting performed for the entire claim

69 69 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems Data Requirements  Standard data sets [UB-04, X12-837I (institutional)] ―What codes are needed for each line item? Revenue codes ―Codes usually required, but not always HCPCS/CPT PX codes HCPCS/CPT modifiers, as appropriate ―Charges Comment on labs (CMS uses special lab panel logic for automated tests) ―ICD-9-CM DX codes needed on each claim Primary DX, always Reason for visit DX, for unscheduled visits, as coded As many secondary DXs, as coded

70 70 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems Data Requirements (cont.)  Other data fields ―Age ―Gender ―Disposition ―Some condition and value codes ―Units of service ―Charges (particularly for clinical labs) Comment on labs (CMS uses special lab panel logic for automated tests) ―Line item dates of service

71 71 © 3M All Rights Reserved. 3M Confidential – for customer's internal review only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems 3M Software  3M will create a WA State specific grouper and reimbursement formula  3M supplies each state grouper to other grouper vendors  3M EAPG software: ―Integrated with coding system/HIM ―Batch version usually used in billing office ―Included in other 3M ambulatory management products


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