Reimbursement Update - Blood Billing under Medicare’s Outpatient Prospective Payment System (OPPS) Background On December 11, 2000, the Health Care Financing Administration (HCFA) provided its first guidance to hospitals on billing for blood products under the new Outpatient Prospective Payment System (OPPS), commonly known as Ambulatory Payment Classifications or APCs (see Exhibit A). Below, the American Red Cross discusses the implications of this guidance and provides direction to its hospital customers. In addition, we provide our hospital customers with materials to support their coding and billing efforts. Finally, the Red Cross recently hired a full-time reimbursement expert to assist customers with their reimbursement issues. HCFA Guidance Has Been Slow in Coming; Some FIs Reluctant to Make Changes OPPS was officially implemented on August 1, 2000, after numerous delays. Even after the delays, many at HCFA, as well as fiscal intermediary (FIs) staff believed that the OPPS claims processing system (“PRICER”) was still not ready. The pessimists were proven correct and a number of implementation problems have occurred, with reimbursement for blood products being one of them. While the Red Cross has worked to keep HCFA staff focused on blood reimbursement issues, there were substantial delays between when the problems were brought to HCFA’s attention and when they were addressed. The Medicare program provides considerable discretion to local FIs. As a result, some have shown a willingness to update their systems based on the Red Cross’ requests and the December 11 th HCFA guidance. Other FIs have decided to leave things where they stand until HCFA provides more detailed directions in the from of a program memorandum or other transmittal to the FIs. The latter has occurred in so-called “donor states”, for the most part. 1 Exhibit B below provides information on blood product claims processing issues at the seven FIs the Red Cross has been in contact with. Many Hospitals Will Need to Change Their Coding Practices for Blood and Blood Products As a result of HCFA’s guidance, hospitals will now need to bill for Red Cross blood products using the 38X (Blood) series revenue codes, along with the corresponding Level II HCPCS code (Exhibits C & D).. Previously, the 38X revenue codes were reserved for commercially-purchased blood or for hospitals with in-house blood procurement programs. That is to say, the 38X series was used mainly in situations where hospitals purchased blood from a commercial vendor. The Red Cross does not charge for blood, rather blood is provided free of charge and hospitals are accessed processing charges. As a result, hospitals billed for Red Cross products with the 39X (Blood, storage and processing) revenue coding series. Before receiving HCFA’s guidance, our billing recommendations were based on our past experience. Unfortunately, they appear to have been in error. We now encourage our hospital customers to bill for Red Cross blood products as directed by HCFA, with the appropriate Level II HCPCS code and a 38X revenue code. As result of HCFA’s guidance, many hospital customers will need to update their billing systems, replacing a 39X code with a 38X code, as appropriate. American Red Cross and Reimbursement _________________________________________________________ 1 Donor states have state laws or regulations that prohibit selling or charging of blood products. Claims with a 38X revenue code are rejected automatically in those states. 1

Hospitals Will Have to Use “Value Codes” to Receive the Appropriate Reimbursement The Medicare blood deductible provision is implemented through the use of value codes and the 38X revenue coding series. When Medicare’s claims processing systems “see” a 38X revenue code, they “look” for an appropriate value code. Therefore, hospitals will need to use these value codes (Exhibit E). Because Red Cross does not charge for the blood itself and does not charge a non-replacement fee, all units provided to Medicare patients are assumed to have been replaced. In other words, a patient that receives Red Cross whole blood or packed red cells should NOT be charged the blood deductible and Medicare should reimburse the treating hospital starting with the first unit transfused. Exhibit F is a sample of how hospitals might bill for outpatient blood claims. Hospitals should check with their FIs regarding implementation of the blood deductible, if problems arise. Hospitals Will Continue to Use the 39X Revenue Codes for Billing Some Blood-related Services Hospitals should use the 39X series revenue codes to bill for lab tests and procedures related to blood transfusions (i.e., blood administration - 391, compatibility testing, typing/crossmatch, splitting units). For transfusion-related lab tests, hospitals can bill with the 30X series (Laboratory/pathology), however, the 39X series is more correct. In addition, hospitals should use the 39X series for storage and processing related to autologous units, along with the appropriate CPT code – Autologous blood or component, collection processing and storage; predeposited. Finally, costs related to the provision of blood and blood products that are not directly billable to a patient’s account, such as costs associated with defective or spoiled blood should be assigned to the blood storage and processing cost center using 39X. What is the Red Cross’ Position on HCFA’s Guidance? Clearly, HCFA’s 12/11 guidance represents a departure from how hospitals had billed in the past, as well as how the Red Cross had recommended hospitals bill when APCs were first implemented. For that reason, as well as because of the problems encountered in the handful of donor states, the Red Cross is recommending that HCFA allow hospitals to bill for blood and blood products with either revenue coding series (38X or 39X) and the appropriate product-specific HCPCS code. The individual circumstances of a hospital should dictate which revenue coding series to use. In addition, we are recommending that HCFA provide official guidance to the FIs about this issue. Our coding recommendations is being included in the Red Cross’ official comment on the 2001 OPPS Interim Final Rule. Who Should I Contact if I Have Additional Questions or Require Clarification? Contact Chris Panarites, Reimbursement Officer for the American Red Cross at You can also him at Attachments: Exhibit A: HCFA Q&A Text Exhibit B: FIs’ Current Billing Status Exhibit C: OPPS Coding Guide Exhibit D: 38X Revenue Code Description Exhibit E: Value Codes Description Exhibit F: Sample Outpatient Claim Form g:\shared\hospmkt\OppsImp\reimbupdateJan01 2

Exhibit A From HCFA website OPPS Frequently Asked Questions – Posted December 11, Q How are we supposed to bill for blood use? Our state doesn’t allow blood to be sold, so we don’t have a charge for blood, only for processing and storage. A We have changed the way blood use is shown. We will pay for the administration of blood using code (billed once per day for all transfusions) in revenue code 391. Bill for blood and blood products using the range of HCPCS codes provided for them, in RCs The charge you show should reflect the charge made by the blood bank (if your hospital purchases blood rather than using an in-house blood bank). We realize that in most cases the charge is not for the blood per se, but rather for the costs associated with recruiting donors, hiring phlebotomists, testing blood for infective agents, and further processing, storage, and transportation. You may also bill the laboratory codes for typing and cross matching and other services related to the patient who receives the blood. You may not bill for blood processing and storage, since those costs are captured in the payment rate assigned to the blood or blood product. If your hospital runs its own blood bank, for some or all of the blood you use, you should follow the same process, since if you bill for processing and storage, rather than units of blood, your claims will not be paid. We have inserted an edit so that blood or a blood product must be billed when blood administration is billed. Except in those instances in which blood itself is paid for, the blood deductible is not applied. Fiscal intermediaries will change their revenue code edits to reflect this change.

Current Billing Status Exhibit B Fiscal Intermediary State(s) Served Implementation Billing Recommendations

Coding Guide for ARC Products and Services Under Medicare’s Outpatient Prospective Payment System (APCs) (Revised December 19, 2000) Exhibit C

Coding Guide for ARC Products and Services Under Medicare’s Outpatient Prospective Payment System (APCs) (Revised December 19, 2000)

EXHIBIT D 38X REVENUE CODE DESCRIPTION 38X Blood Subcategory (3rd Digit) Description Std. Abbreviation 0General Classification BLOOD 1*Packed Red Cells BLOOD/PKD RED 2*Whole Blood BLOOD/WHOLE 3Plasma BLOOD/PLASMA 4Platelets BLOOD/PLATELETS 5Leukocytes BLOOD/LEUKOCYTES 6Other Components BLOOD/COMPONENTS 7Other Derivatives (Cryoprecipitates) BLOOD/DERIVATIVES 8Not Used N/A 9Other Blood BLOOD/OTHER EXHIBIT E VALUE CODE INFORMATION Value Code Code Description Appropriate Use 1 *381 and 382 generally carry the Medicare blood deductible; value codes necessary. Source: NATIONAL UNIFORM BILLING DATA ELEMENT SPECIFICATIONS AS DEVELOPED BY THE NATIONAL UNIFORM BILLING COMMITTEE, May 12, 1999, Copyright - American Hospital Association. 6 Medicare Blood Deductible Used to indicate the charges associated with unreplaced deductible pints of blood or units of packed red cells. Not used if all pints are replaced 37 Pints of Blood Furnished Used to indicate the number of pints of blood supplied, regardless of whether they were replaced. Serves as a basis for counting pints to be applied toward the deductible. 38 Blood Deductible Pints Used to indicate the number of unreplaced deductible pints of blood supplied. Not used is all pints are replaced. 39 Pints of Blood Replaced Used to indicate the number of pints of blood that were (or will be) replaced. Blood is considered replaced if the provider charges only for processing. 1 Most responses to question 8 indicated that the FIs use HCFA’s value code definitions when applying the codes. In this table, we summarize the definitions for the relevant codes. Source: U.S. Department of Health and Human Services. Health Care Financing Administration. Hospital Manual. (HCFA Pub 10, Sec. 460.) 2000.

Exhibit F: Sample UB-92 Paper Claim Form for Hospital Outpatient Procedures Diagnosis Codes: Enter appropriate primary and secondary ICD-9-CM diagnosis codes. Under APCs, they will not impact payment. Relevant diagnosis codes include: Anemia. Diagnosis Codes: Enter appropriate primary and secondary ICD-9-CM diagnosis codes. Under APCs, they will not impact payment. Relevant diagnosis codes include: Anemia F 381 BLOOD/PKD REDP9021 Revenue Codes: Enter appropriate revenue codes for all services provided. Per HCFA’s 12/11/00 guidance, hospitals are instructed to bill for blood transfusions using the “391” revenue code. Revenue Codes: Enter appropriate revenue codes for all services provided. Per HCFA’s 12/11/00 guidance, hospitals are instructed to bill for blood transfusions using the “391” revenue code HCPCS/CPT Codes: Enter HCPCS code P9021 for Red Blood Cells. Enter CPT code (36430) that represents the transfusion procedure performed. HCPCS/CPT Codes: Enter HCPCS code P9021 for Red Blood Cells. Enter CPT code (36430) that represents the transfusion procedure performed. Service Units: Enter the appropriate number that represents the multiple of the administered units. Use only whole numbers. Blood administration should be billed per visit/session, not per unit transfused. Service Units: Enter the appropriate number that represents the multiple of the administered units. Use only whole numbers. Blood administration should be billed per visit/session, not per unit transfused. 391 BLOOD ADMINISTRATION Bill Type: Hospitals use to distinguish between inpatient and outpatient claims Procedure Codes: Enter appropriate ICD-9-CM procedure code(s). Under APCs, they will not impact payment. Relevant procedure codes include: Transfusion of packed cells. Procedure Codes: Enter appropriate ICD-9-CM procedure code(s). Under APCs, they will not impact payment. Relevant procedure codes include: Transfusion of packed cells Value Codes: 37 - Units transfused 39 - Units replaced Value Codes: 37 - Units transfused 39 - Units replaced HM January 2001