In addition, CMS states, "this proposed change would bring the OPPS in line with the IPPS [Inpatient Prospective Payment System], which utilizes hospital costs derived from claims and cost report data to calculate prospective payments, and specifically, mean costs rather than median costs to form the basis of the relative payment weights associated with each of the payment classification groups."
Shah was surprised to see this proposal from CMS as she says the agency has relied upon median cost data from the beginning of OPPS, adding that the proposal is interesting and requires further review and analysis.
CMS released online a file called the 2013 Geometric Mean Median Change, which is a great way to begin reviewing the payment change/impact of CMS' proposal at the CPT® and APC level, Shah says. The file is basically a different view of Addendum B, where CMS shows what payments would be under the proposed geometric mean approach compared to the continued use of median cost data.
Some APC payments go up, while others go down and a few of the changes are significant. For example, use of the geometric mean cost vs. median cost results in the APC payment for the level I Type B ED visit to increase by 42.5%, says Shah. Looking at the E/M visit codes in general for the clinic and ED setting results in payment rate changes in both directions, while a similar review of the intravenous injection and infusion drug administration codes shows that most of these APC payment rates increase under the geometric mean methodology, Shah says.