3M™ Ambulatory Patient Grouping System (EAPGs)

3M™ Ambulatory Patient Grouping System (EAPGs)
Innovating Health Language of the Washington State Hospital Association Feb 26, 2013

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

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

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”

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

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

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

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.

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

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

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.)

EAPGs vs. DRGs DRGs EAPGs 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.

Outpatient prospective payment system (OPPS): A brief history
M Health Information Systems delivers an OPPS under contract with HCFA (now CMS) — APGs are introduced 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. Iowa Medicaid implements the first APG-based OPPS, and other payers follow. APG v2.0 released. New York Medicaid implements the first 3M EAPG-based OPPS. Massachusetts Medicaid implements 3M EAPG-based OPPS. 3M EAPGs are ICD-10 ready. CMS implements APCs (an APG derivative) as the Medicare OPPS. APCs are Medicare-focused and not fully prospective. Payers move to APC-based OPPS.

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

EAPG types (Version 3.5, January 2011)
EAPG Type Description 1 Per Diem 2 Significant Procedure 21 Physical Therapy & Rehab 22 Mental Health & Counseling 23 Dental Procedure 24 Radiologic Procedure 25 Other Diagnostic Procedure 3 Medical Visit 4 Ancillary 5 Incidental 6 Drug 7 DME 8 Unassigned All treated as significant procedures for consolidation and discounting purposes

Types: APGs vs. EAPGs (version 3.4)

EAPGs vs. APCs: Grouping
Category APCs EAPGS Number of groupings 802 APC groups 553 EAPG groups Multiple service lines Each reviewed Each reviewed individually individually and assigned to EAPGs, as • Paid by APC appropriate, 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 edits grouper • Claim rejections • Claim suspensions • Claim RTP • Line item denial • Line item rejection

EAPGs vs. APCs: Grouping; p2
Category APCs EAPGS 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 Types None 13 EAPG types Significant Procedure Medical Visit Ancillary Categories None 54 • Musculoskeletal system procedures • Pulmonary system procedures

EAPGs vs. APCs: Grouping; p3
Category APCs EAPGS Condition codes Moderate use Very limited use • G0 • 20 • 21 Value codes Used: Not used • Ambulance • Blood deductible Inpatient only list Used – defined by CMS Used – defined by select agency Packaging Packaging by line item – Extensive status indicator N • Significant procedure consolidation • Ancillary packaging

EAPGs vs. APCs: Reimbursement
Category APCs EAPGS Discounting • Discontinued • Multiple EAPGs procedures • Discontinued procedures • Multiple T-type procedures • Multiple levels available(e.g.. 100%; • 50% 50%; 25%) allowed Pass-through devise cost (charge Concept not used payments times CCR)

Summary EAPG vs. APC Used with permission: G. Allen, NY DoH and adapted by DNFee

3M™ Enhanced Ambulatory Patient Groups Logical Functions within Products
Reimbursement Calculated* Grouping function performed What will be paid? Editing if defined *Policy decisions made by implementing payer

EAPG Logic Type of procedure or therapy YES
Significant procedure or therapy visit EAPG Significant procedures or therapies present Assignment of additional SP or therapy EAPGs NO Major signs, symptoms or findings present Major SSF EAPG Medical visit indicator EAPG present YES Assign ancillary (additional) EAPGs Primary dx code Medical visit EAPG NO Types of ancillary tests or procedures NO Ancillary only visit EAPG YES Ancillary tests or procedures present Error EAPG NO

Sample EAPG Assignments
543 EAPGs defined

EAPG Types EAPG Type Description 1 Per Diem 2 Significant Procedure
21 Physical Therapy & Rehab 22 Mental Health & Counseling 23 Dental Procedure 24 Radiologic Procedure 25 Other Diagnostic Procedure 3 Medical Visit 4 Ancillary 5 Incidental 6 Drug 7 DME 8 Unassigned

EAPG Categories (examples)
EAPG Category EAPG Category Description 1 Skin and integumentary system procedures 2 Breast procedures 3 Musculoskeletal system procedures 4 Pulmonary system procedures 5 Cardiothoracic procedures 6 Hematopoietic system procedures 7 Gastrointestinal system procedures 8 Genitourinary system procedures 9 Male Reproductive system procedures 10 Female Reproductive system procedures 11 Neurologic system procedures 16 Mental illness and substance abuse therapies 30 Incidental procedures and services 71 Mental diseases and disorders 99 No EAPG assigned Total of 54 categories

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

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.

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 29

Medical visit - Angina

Medical Visit - Heartburn

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

Packaging – The General Concept
EAPG standard logic includes Consolidation (significant procedure consolidation) Ancillary packaging

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

Uniform Packaging List
EAPG EAPG 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 410 URINALYSIS 411 BLOOD AND URINE DIPSTICK TESTS 412 SIMPLE PULMONARY FUNCTION TESTS EAPG EAPG Description 413 CARDIOGRAM 423 INTRODUCTION OF NEEDLE AND CATHETER 424 DRESSINGS AND OTHER MINOR PROCEDURES 425 OTHER MISCELLANEOUS ANCILLARY PROCEDURES 426 PSYCHOTROPIC MEDICATION MANAGEMENT 427 BIOFEEDBACK AND OTHER TRAINING 428 PATIENT EDUCATION INDIVIDUAL 429 PATIENT EDUCATION GROUP 448 EXPANDED HOURS ACCESS 449 ADDITIONAL UNDIFFERENTIATED MEDICAL VISIT/SERVICES 457 VENIPUNCTURE 471 PLAIN FILM 35

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

Example of Ancillary Packaging
37

Ancillary Packaging P. dx: Ac mastoiditis w/o complication

Ancillary service w/o Medical Visit or Significant Px EAPG
PDX: Ac mastoiditis w/o complication

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).

EAPG Packaging Controls

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

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.

Consolidation Controls
Types of consolidation Multiple same procedure Clinical (based on clinical algorithm)

Clinical Significant Procedure Consolidation Example

Example of Clinical Significant Procedure Consolidation
PDX: 9562 Inj posterior tib nerve

Example of same SP consolidation
Diagnosis: 9100 Abrasion head

Consolidation Controls

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

Never Pay Services

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 GN, GO, GP for speech, occupational, and physical therapies (not used)

Inpatient Only List Same concept as under APCs
List slightly different than Medicare’s list Less restrictive

List of Codes - Observation
EAPGS EAPG EAPG Description EAPG Type EAPG Category 450 OBSERVATION 4 (Ancillary) 23 492 ENCOUNTER/REFERRAL FOR OBSERVATION INDICATOR 5 (Incidental) 30 500 ENCOUNTER/REFERRAL FOR OBSERVATION - OBSTETRICAL 3 (Medical) 50 501 ENCOUNTER/REFERRAL FOR OBSERVATION - OTHER DIAGNOSES 3 (Medical) 50 502 ENCOUNTER/REFERRAL FOR OBSERVATION - BEHAVIORAL HEALTH 3 (Medical) 50 Observation visit indicators (OVI) HCPCS HCPCS Description EAPG EAPG Description 99217 Observation care discharge 492 ENCOUNTER/REFERRAL FOR OBSERVATION INDICATOR 99218 Initial observation care 492 ENCOUNTER/REFERRAL FOR OBSERVATION INDICATOR 99219 Initial observation care 492 ENCOUNTER/REFERRAL FOR OBSERVATION INDICATOR 99220 Initial observation care 492 ENCOUNTER/REFERRAL FOR OBSERVATION INDICATOR 99224 Subsequent observation care 492 ENCOUNTER/REFERRAL FOR OBSERVATION INDICATOR 99225 Subsequent observation care 492 ENCOUNTER/REFERRAL FOR OBSERVATION INDICATOR 99226 Subsequent observation care 492 ENCOUNTER/REFERRAL FOR OBSERVATION INDICATOR 99234 Observation/hosp same date 492 ENCOUNTER/REFERRAL FOR OBSERVATION INDICATOR 99235 Observation/hosp same date 492 ENCOUNTER/REFERRAL FOR OBSERVATION INDICATOR 99236 Observation/hosp same date 492 ENCOUNTER/REFERRAL FOR OBSERVATION INDICATOR G0379 Direct refer hospital observation 492 ENCOUNTER/REFERRAL FOR OBSERVATION INDICATOR Observation G0378 Hospital observation per hr 450 OBSERVATION Other Medical Visit Indicators (MVI) [Series of E&M codes for clinic and ED visits]

Two types of observation
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

Observation Logic MVI also present Ancillary observation services:
Ancillary Observation EAPG 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

Observation Logic Medical observation EAPG assignment Must be present:
Medical observation assignment 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

Sign Px or PerDiem EAPG present?
Observation Logic MVI assigned medical EAPG based on primary dx code ; HCPCS G0378 assigned to EAPG 450 and paid separately, based on packaging logic HCPCS G0378 Present on claim? MVI only OVI and/or MVI present? Sign Px or PerDiem EAPG present? No Yes OR OVI assigned to medical observation EAPG (500 – 502) based on primary dx code; G0378 assigned to EAPG 450 and is packaged OVI only Yes No OR G0378 assigned to EAPG 450 and is packaged G0378 assigned to EAPG 999 OVI assigned to medical observation EAPG; G0378 assigned to EAPG 450 and packaged; MVI assigned to 491 and packaged MVI and OVI

Logical Functions within Products
Reimbursement Calculated* How much will it be paid? Grouping performed function Editing if defined *Policy decisions made by implementing payer

Payment Formula Items consolidated, packaged, not grouped paid $0.00
Conversion factor (CF) [also called the base rate] x TIMES EAPG weights Discount percentage Line items summed for visit total Adjusted weight (AW)

How are they paid? CF * AW = line item payment
Services reported: Revenue code only HCPCS codes included Grouped services Significant Px Consolidation Ancillary Packaging Lines paid CF * AW = line item payment CF * AW = line item payment CF * AW = line item payment CF * AW = line item payment Sum of line items payments = Total Payment

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.

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% Multiple different ancillary EAPGs Modifiers 50 – Bilateral procedure Flags PX code for additional payment – 150%

Discounting Example

340b Drug Programs Pre-defined and pre-set Based on end-user reporting

User-Defined 340B Drug EAPG
EAPG version 3.8 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

New Flags: Modifier UD other Option for 340b drugs
EAPG version 3.4 – 3.8 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

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

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

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

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

3M will create a WA State specific grouper and reimbursement formula
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

3M™ Ambulatory Patient Grouping System (EAPGs)

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