LogixHealth Analyzes the Impact on Hospitals of the 2016 Observation Regulatory Changes

BEDFORD, MA--(Marketwired - Feb 19, 2016) -  LogixHealth, a leading provider of internet and software enabled coding, billing, analytics and management services for hospital and physician practices nationwide, provides services for millions of Emergency Department (ED) visits across 35 states, and has analyzed the impact of observation regulatory changes in the CMS 2016 OPPS Final Rule.

The 2016 OPPS Final Rule governs payments to hospitals for services provided during the calendar year 2016 and contains significant observation reimbursement changes.

In 2008, CMS adopted the composite Ambulatory Patient Classification (APC) methodology, reimbursing for ED and observation services in a single packaged payment. For 2016, the packaged/composite methodology continues to combine ED facility and observation services into a single APC. The 2016 qualifying visits for Observation services are described on page 161 of the 2016 OPPS Final Rule and include:

Any clinic visit (HCPCS code G0463), any Type A ED visit (CPT codes 99281 through 99285), any Type B ED visit (HCPCS codes G0380- G0384), a direct referral to observation (HCPCS code G0379) or critical care (CPT code 99291) provided by a hospital in conjunction with observation services of substantial duration (8 or more hours of observation), provided that the observation was not furnished on the same day as surgery or post-operatively and that there is no status indicator T on the same claim.

The reimbursement for the Observation Comprehensive APC 8011 dramatically increased (by 76%) in 2016 to $2,174.14, however it is accompanied by extensive new packaging that bundles the vast majority of typical ancillaries provided during observation including most: Labs, CT scans Ultrasounds, typical non-T status procedures, IV Fluids, and most medications.

"The significant increase in observation packaging highlights CMS' efforts to decrease costs through expanded packaging," states Michael Granovsky, President of LogixHealth.  

Importantly, the lack of coverage for self-administered medications remains unchanged in 2016, and the three midnight inpatient requirement for Medicare to provide coverage for care in a skilled nursing facility also remains in place.

About LogixHealth:
LogixHealth, a leading provider of internet and software enabled coding, billing, analytics and management services for hospital and physician practices nationwide, provides services for millions of Emergency Department (ED) visits across over 35 states. We provide tools and resources to optimize financial performance and improve the quality of care. For more information, visit www.logixhealth.com.