Ambulatory Care Payment Reform in Medicaid: APGs

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Ambulatory Care Payment Reform in Medicaid APGs

• Franklin Laufer
• AIDS Institute
• January 15, 2009

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Where we started

• 5-tier rates for Primary Care Program providers
  and designated AIDS centers (DACs)
• HIV counseling testing, initial/annual
  evaluation, HIV monitoring
• 7-tier rates DACs
• Initial, annual, intermediate, routine,
  therapeutic, infusion
• Carve-outs viral load, resistance testing,
  tropism assay
• General clinic rates all facilities (hospitals
  and free-standing clinics)

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Ambulatory Patient Groups

• A visit classification system designed to explain
  the amount and type of resources used in an
  ambulatory visit and that is used to determine
  payment for ambulatory service(s)
• Prospective payment system sets payments for
  services in advance

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APG Payment

• Utilizes standard claims information to assign
  APG(s)
• By assigning one or more APGs to a visit, the
  system is intended to better reflect the
  diversity, intensity, and variation in costs of
  services provided during the visit than current
  systems

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Ambulatory Patient Groups

• Current version of APGs comprised of 469 groups,
  including
• 218 groups of significant procedures, therapies,
  or services
• 55 groups of ancillary tests and procedures,
  including anesthesia
• 181 groups of medical visits, based on diagnosis
• 15 groups of miscellaneous services, e.g.,
  drugs/biologicals, partial hospitalization for SA
  or MH services, DME, unassigned, etc.

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Ambulatory Patient Groups

• Significant Procedures, Therapies, or Services
• APG 065 Respiratory therapy
• APG 089 Level I cardiothoracic procedures
• Ancillary Tests and Procedures
• APG 397 Level II microbiology tests
• APG 415 Level I immunization
• Medical Visit
• APG 770 Normal neonate
• APG 880 HIV infection
• APG 881 - AIDS

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APG Assignment

• Unlike under the DRG system, a visit can be
  assigned to more than one APG to describe the
  service(s) rendered to a patient
• Patient has visit with a clinician, who orders a
  chest X-ray as the clinician suspects
  community-acquired pneumonia
• Results in two APGs assigned to that visit
• APG 573 Medical visit for community-acquired
  pneumonia
• APG 471 Plain film

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Grouping APGs

• Not all APGs are used to compute payment
• Three grouping techniques
• Significant procedure consolidation
• Packaging
• Discounting

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Significant ProcedureConsolidation

• Collapsing multiple related significant
  procedures, recognizing that some significant
  procedures are integral to the primary procedure
  and require minimal additional time and resources
• Laryngoscopy done with aspiration (APG 62) and
  also with removal of a non-neoplastic lesion from
  patients vocal cord (APG 63)
• Payment will be 100 for the procedure to remove
  the lesion as the primary procedure, and 0 for
  the aspiration

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Packaging (1)

• Payment for certain ancillary and other services
  is in included in the calculation of the payment
  for the significant procedure or medical visit it
  accompanies
• In our example, the chest x-ray is packaged with
  the payment for the medical visit for pneumonia

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Packaging (2)

• Packaging is based on the cost and the frequency
  with which a service is ordered
• Examples
• Thyroid activity - CBC
• Urinalysis - EKG
• Hepatitis C antibody - PPD
• Preventive counseling

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Packaging (3)

• Relatively inexpensive and frequently performed
  are packaged
• Services that are expensive or not performed
  frequently are paid as separate APGs
• Viral load, resistance testing, and tropism assay
  are carved-out

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Discounting

• Reduction in the standard payment rate for a
  services when, during a single visit, either
• More than one significant unrelated procedure is
  performed or
• Ancillary services (or procedures) which group to
  the same APG are provided more than once
• Marginal cost of providing a second procedure or
  additional ancillary is less than its full cost
  (i.e., the cost of providing the procedure by
  itself).

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Payment weights

• A payment weight is associated with each APG
• Based on ratio of cost to charges (RCCs)
• Expresses resource intensity of an APG relative
  to other APGs

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Base Rates

• Base rate calculation based on
• Service/provider type hospital OPD,
  free-standing DTC, ER, free-standing ambulatory
  surgery center
• Region downstate (NYC, LI, Westchester,
  Rockland, Putnam, Orange, Dutchess) and ROS
• Base rate for hospitals downstate is 276.38
  downstate and 219.69 upstate. DTC rates are
  being calculated.

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APG Payment Methodology
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Payments for Ancillaries

• Hospital OPDs
• In or out of APG based on existing policy
• Provider must continue current practice
• For diagnostic and treatment centers
• Payment for lab and radiology services that are
  contracted out will be included in the APG-based
  payment made to the facility, which will then
  reimburse the lab or radiology provider

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Payments for Physician Visits

• Hospital OPDs
• In or out of APG based on existing policy
• Use billing modifier (-27) to identify other
  same-day visit with a physician payment
  discounted
• For diagnostic and treatment centers
• Payment included in APG payment for the primary
  visit
• Use billing modifier (-27) to identify other
  same-day visit with a physician, but payment will
  be accounted for in base rate paid

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Special Payment Rules

• Never pay services
• Non-covered services, such as respiratory
  therapy, home infusion, chemotherapy drugs
• If stand alone, do not pay services
• Mammography, ultrasound, CT scan, Pap smear,
  other ancillaries
• If these are the only items on claim, zero
  payment
• Services should continue to be billed to provide
  input for grouper policies/payment weights

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General Payment Reform Issues

• Implementation
• Hospital OPDs and free-standing DTCs transition
  to APGs over 3 years
• Year 1 (December 1, 2008 December 31, 2009)
  75 current / 25 APGs
• DTCs transition period compressed to begin March
  2009
• Year 2 (calendar year 2010) 50 current / 50
  APGs
• Year 3 (calendar year 2011) 25 current / 75
  APGs
• Year 4 (beginning January 1, 2012) 100 APGs

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Payment during Transition

• Payment for an outpatient visit will be the sum
  of
• 25 of the APG-based amount and
• 75 of the facility's "payment for blending
• Facilitys outpatient Medicaid revenue divided by
  all outpatient Medicaid visits, for services
  moving to APGs, based on 2007 claims data.
• Validated with each facility
• Frozen during transition

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HIV-Specific Issues (1)

• Replaces 5- and 7-tier pricing for most services
• Counseling and testing and therapeutic (case
  management) visits carved out
• Optional for FQHCs
• Higher payment weight for the medical visit APG
  reflects higher complexity and packaged
  ancillaries
• Complexity of visits adequately accounted for,
  including variability of services provided

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HIV-Specific Issues (2)

• Separate medical visits with another practitioner
  on the same day of service is accounted for using
  billing modifier
• However, no separate payment made for DTC
• Monitoring through utilization thresholds
• No add-on for organizational infrastructure,
  quality-of-care reporting, etc. for designated
  AIDS centers
• Frequency of revision over time due to clinical
  advances, changes in practice

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Supporting Materials

• Available on the DOH website
• Implementation Schedule
• APG Documentation
• Payment Examples
• Uniformly Packaged APGs
• Inpatient-Only Procedure List
• Never Pay and If Stand Alone Do Not Pay Lists
• Carve-Outs List
• List of Rate Codes Subsumed in APGs
• Paper Remittance
• Frequently Asked Questions
• www.health.state.ny.us/health_care/medicaid/rates/
  apg/index.htm

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Contact Information

• Grouper / Pricer Software Support
• 3M Health Information Systems
• Grouper / Pricer Issues 1-800-367-2447
• Product Support 1-800-435-7776
• http//www.3mhis.com
• Billing Questions
• Computer Sciences Corporation
• eMedNY Call Center 1-800-343-9000
• Send questions to eMedNYProviderRelations_at_csc.co
  m
• Policy and Rate Issues
• New York State Department of Health
• Office of Health Insurance Programs
• Div. of Financial Planning and Policy
  518-473-2160
• Send questions to apg_at_health.state.ny.us