WCB-37-15-00004-EP Ambulatory Surgery Fee Schedule

9/16/15 N.Y. St. Reg. WCB-37-15-00004-EP

NEW YORK STATE REGISTER

VOLUME XXXVII, ISSUE 37

September 16, 2015

RULE MAKING ACTIVITIES

WORKERS' COMPENSATION BOARD

EMERGENCY/PROPOSED RULE MAKING

NO HEARING(S) SCHEDULED

 

I.D No. WCB-37-15-00004-EP

Filing No. 746

Filing Date. Aug. 31, 2015

Effective Date. Oct. 01, 2015

Ambulatory Surgery Fee Schedule

PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following action:

Proposed Action:

Amendment of Part 329 of Title 12 NYCRR.

Statutory authority:

Workers' Compensation Law, sections 117, 141 and 13

Finding of necessity for emergency rule:

Preservation of general welfare.

Specific reasons underlying the finding of necessity:

This amendment is adopted as an emergency measure because time is of the essence. The current Products of Ambulatory Surgery (PAS) system used as the basis for the Workers’ Compensation Board’s (Board) Ambulatory Surgery Fee Schedule is obsolete as it is no longer supported by the Department of Health. The Department of Health has transitioned to an Ambulatory Patient Groups (APG) system. In addition, the International Classification of Diseases, 9th Revision (ICD-9), a comprehensive coding system promulgated by the federal Centers for Medicare and Medicaid Services in the US Department of Health and Human Services, will be replaced by the ICD-10 system on October 1, 2015. Both the PAS and APG methodologies rely on the ICD-9 systems. The Department of Health will not be updating the PAS system to ICD-10. Accordingly, the Board seeks to adopt the APG on an emergency basis to coordinate with the roll-out of the ICD-10 system on October 1, 2015. This is necessary to ensure that the Board’s ambulatory surgery fee schedule is consistent with the industry and that reimbursement rates are properly updated. Accordingly, emergency adoption of this rule is necessary.

Subject:

Ambulatory Surgery Fee Schedule.

Purpose:

Update the methodology for the computation of fees for ambulatory surgery to an Ambulatory Patient Groups (APG) system.

Text of emergency/proposed rule:

Part 329 of Title 12 NYCRR is amended to add Subparts 329-1, 329-2 and 329-3, and to renumber Sections 329.1, 329.2, 329.3, 329.6 and 329.7 as 329-1.1, 329-1.2, 329-1.3, 329-3.1, 329-3.2 and repeal Sections 329.4 and 329.5 of Title 12 NYCRR and add new Subpart 329-2.

Subpart 329-2 Ambulatory Surgery Services Fee Schedule

§ 329-2.1 Scope and Effective Date.

Payment for ambulatory surgery services shall be made according to the ambulatory patient groups (APG) methodology, governing reimbursement for licensed freestanding ambulatory surgical centers and hospital-based ambulatory surgery services as set forth herein and subject to WCB specific adjustments. The effective date of this Subpart shall be October 1, 2015.

§ 329-2.2 Definitions: Ambulatory Patient Group

As used in this Subpart, the following definitions shall apply:

(a) Ambulatory Patient Group ("APG") shall mean a defined group of outpatient procedures, encounters or ancillary services, as specifically identified and published by the Department of Health, which reflect similar patient characteristics and resource utilization and which incorporate the use of ICD-10-CM diagnosis codes and CPT-4 and HCPCS procedure codes, as defined below;

(b) Allowed APG weight shall mean the relative resource utilization for a given APG after adjusting for consolidation, packaging, and discounting.

(c) APG relative weight shall mean a numeric value that reflects the relative expected average resource utilization (cost) for each APG as compared to the expected average resource utilization for all other APGs. Procedure-based APG weight shall mean a numeric value that reflects the relative expected average resource utilization (cost) for a specific procedure. A procedure that has been assigned its own weight shall have its payment derived from its procedure-specific weight without regard to the weight of the APG to which the procedure groups.

(d) Workers’ Compensation specific base rates shall mean the numeric value that shall be multiplied by the allowed APG weight for a given APG, or by the final APG relative weight to determine the total allowable Workers’ Compensation operating payment for a visit.

(e) Consolidation, also known as "bundling", shall mean the process for determining if a single payment amount is appropriate in those circumstances when a patient receives multiple APG procedures during a single patient visit.

(f) Current Procedural Terminology, fourth edition (CPT-4) is the systematic listing and coding of procedures and services provided by physicians or other related health care providers. It is a subset of the Healthcare Common Procedure Coding System (HCPCS). The CPT-4 and HCPCS are maintained by the American Medical Association and the federal Centers for Medicare and Medicaid Services and are updated annually.

(g) Discounting shall mean the reduction in APG payment that results when additional procedures do not consolidate. Additional occurrences of the same ancillary APG within a single visit or episode will also discount.

(h) APG Software System shall mean the New York State-specific version of the APG computer software developed and published by Minnesota Mining and Manufacturing Corporation (3M) to process CPT-4 and ICD-10 code information in order to assign patient visits to the appropriate APG category or categories and apply appropriate bundling, packaging and discounting to assign the appropriate final APG weight and associated reimbursement.

(i) Final APG Weight shall mean the allowed APG weight for a given visit as expressed in the applicable APG software, and as adjusted by all applicable consolidation, packaging and discounting and other applicable adjustments.

(j) International Classification of Diseases, 10th Revision (ICD-10) is a comprehensive coding system maintained by the federal Centers for Medicare and Medicaid Services in the US Department of Health and Human Services. It is maintained for the purpose of providing a standardized, universal coding system to identify and describe patient diagnoses, symptoms, complaints, conditions and/or causes of injury or illness. It is updated annually.

(k) Packaging shall mean those circumstances in which payment for routine ancillary services or drugs shall be deemed as included in the applicable APG payment for a related significant procedure or medical visit. Medical visits also package with significant procedures, unless specifically excepted herein.

(l) Significant procedure APG shall mean an APG incorporating a medical procedure that constitutes the primary reason for the visit in terms of time and resources expended.

(m) Medical visit APG shall mean an APG representing a visit during which a patient received medical treatment, but did not have a significant procedure performed.

(n) Visit shall mean a unit of service consisting of all the APG services performed for a patient that are coded on the same claim and share a common date of service.

(o) Peer Group shall mean a group of providers that share a common APG Workers’ Compensation specific base rate. Peer groups may be established based on facility licensure, geographic region, types of services provided or categories of patients.

(p) Ancillary services APGs shall mean those APGs designated by the Department of Health as reflecting those tests and procedures ordered by physicians to assist in patient diagnosis and/or treatment.

§ 329-2.3 APGs, Relative Weights, and system updating

The table of APG Weights, Procedure Based Weights and units, and APG Fee Schedule Fees and units for each effective period are published on the New York State Department of Health website at: http://www.health.state.ny.us/health_care/medicaid/rates/apg/docs/apg_payment_components.xls and are herein incorporated by reference.

§ 329-2.4 Diagnostic coding and rate computation

(a) Facility shall assign ICD-10 diagnostic and HCPCS/CPT-4 procedure codes for each visit and shall utilize the claim coding information to assign the applicable APG. The facility shall use the APG software system to determine the significant procedure APG, applicable ancillary services APGs and the final weight for a visit. The APG software system shall incorporate methodologies for consolidation, packaging and discounting to be reflected in the final weight to be assigned to the claim.

(b) Other applicable adjustments shall be made by the facility.

(c) Bill in accordance with APG requirements and WCB adjustments submitted for reimbursement to Payer with a copy to WCB.

§ 329-2.5 System updating and incorporation by reference

(a) The following elements of the APG rate-setting system shall be updated no less frequently than annually:

(1) the listing of reimbursable APGs subject to this Subpart and the relative weight assigned to each such APG;

(2) the Workers’ Compensation specific base rates;

(3) the applicable ICD-10 codes utilized in the APG software system;

(4) the applicable CPT-4/HCPCS codes utilized in the APG software system;

(5) the APG software system

(b) The Current Procedure Code, fourth edition (CPT-4) and the Healthcare Common Procedure Coding System (HCPCS), published by the American Medical Association, and the International Classification of Diseases, Tenth Revision, Clinical Modification (ICD-10-CM), published by the United States Department of Health and Human Services, as described in this Subpart, are hereby incorporated by reference, with the same force and effect as if fully set forth herein and are available at http://www.cms.gov/Medicare/Coding/ICD10/Downloads/2016-Code-Descriptions-in-Tabular-Order.zip. Copies of the CPT-4 and HCPCS are also available from the American Medical Association, Order Department, P.O. Box 930876, Atlanta, Georgia 31193-0876. Copies of the ICD-10CM are also available from the United States Government Printing Office, P.O. Box 371954, Pittsburgh, Pennsylvania 15250-7954. Copies of the WCB Ambulatory Surgery Base Rates are be available on the WCB website and may be downloaded without cost. Information about the WCB Ambulatory Surgery Fee Schedule or a paper copy of the WCB Ambulatory Surgery Base Rates may be requested by email at [e-mail], or by telephone at 1-800-781-2362. More information about the APG system and the 3M products that support it are available at: http://www.health.ny.gov/health_care/medicaid/rates/apg/index.htm

This notice is intended:

to serve as both a notice of emergency adoption and a notice of proposed rule making. The emergency rule will expire November 28, 2015.

Text of rule and any required statements and analyses may be obtained from:

Heather MacMaster, Workers' Compensation Board, Office of General Counsel, 328 State Street, Schenectady, NY 12305-2318, [phone], email: [e-mail]

Data, views or arguments may be submitted to:

Same as above.

Public comment will be received until:

45 days after publication of this notice.

Regulatory Impact Statement

1. Statutory authority:

Workers’ Compensation Law (WCL) section 117(1) authorizes the Chair of the Workers’ Compensation Board (Board) to make reasonable regulations consistent with the provisions of the Workers' Compensation Law and the Labor Law. WCL section 13 directs the Chair to prepare and establish fee schedules for medical, ambulance, dental, surgical, optometric treatment, physical and occupational therapy, and durable medical equipment.

2. Legislative objectives:

The purpose of the proposed ambulatory fee schedule is to provide a system for fair reimbursement that also contains costs to payers in the workers’ compensation system. The proposed ambulatory patient groups (APG) methodology is consistent with this objective inasmuch as it provides appropriate billing and payment practices for medical providers and payers in the New York State workers’ compensation system. The APG methodology is supported by an empirical framework that is regularly updated and used throughout the medical practice industry.

3. Needs and benefits:

The current workers' compensation fee schedule for ambulatory surgery is based on a Products of Ambulatory Surgery (PAS) system that was supported by the Department of Health. In December 2008, the Department of Health converted the ambulatory surgery reimbursement system from PAS to a new Ambulatory Patient Groups (APG) system. The Department of Health no longer supports the PAS system. Consequently, the Board seeks to adopt an APG system. In support of the new APG system, 3M Health Information Systems has created a grouper for use in identifying the appropriate APG and a pricer that calculates the reimbursement rate according to the new formulas. The pricer will produce rates according to the workers' compensation schedule. More information about the APG system and the 3M products that support it are available at: http://www.health.ny.gov/health_care/medicaid/rates/apg/index.htm.

Both the current PAS system and the APG systems rely on ICD-9 codes to set rates of reimbursement. As the ICD-10 system will roll-out and replace the ICD-9 system on October 1, 2015, the Workers’ Compensation Board (Board) will adopt the new regulations using the APG methodology to coincide with the ICD-10 rollout.

This change will promote consistency between medical systems in medical practices across the state and avoid imposing significant costs to support multiple systems. The Board use of ICD-10 is consistent with Medicare and Medicaid.

4. Costs:

This proposal will not impose any new costs on the regulated parties, the Board, the State or local governments.

It is believed that all or nearly all affected medical providers already use the 3M Health Information Systems that support the Ambulatory Surgery Fee Schedule as this is the system used to support Medicare and Medicaid. In the event that a provider or carrier does not own the software, the purchase price is believed to be based on volume of claims and approximates $1 per claim dependent upon the software purchased. Reimbursement rates may also be computed manually at no cost by downloading the tables from the Board’s website. A paper version of the tables is available for purchase from the Board for $10 and in CD format for $5. These fees are to cover the costs of reproduction and mailing of the materials.

5. Local government mandates:

Self-insured local governments will be required to use the new ambulatory surgery fee schedule to pay medical bills received for workers’ compensation injuries.

6. Paperwork:

This proposed rule modifies the ambulatory surgery payments for all payers of workers’ compensation benefits including municipalities, but does not impose additional reporting requirements.

7. Duplication:

The proposed rule does not duplicate or conflict with any state or federal requirements.

8. Alternatives:

Because the Board’s existing Ambulatory Fee Schedule based on the PAS methodology is no longer supported by the Department of Health, the Board, must update its fee schedule that relies on PAS. The APG system is used for Medicaid payments and is fully supported by the Department of Health. It also utilizes an industry standard software system, 3M Healthcare Information Systems.

The Board could adopt a proprietary fee schedule. However, such a system could not be updated easily, would not have Department of Health support and would not be supported by software. Accordingly, the Board did not consider this option.

Ambulatory Payment Classification (APC) is another methodology and used by Medicare. However, the Board chose not to go with that methodology as the APGs as promulgated by Department of Health addresses New York State specific facilities and costs related to practice in New York.

Upon information and belief, there are no other available Ambulatory Surgery Fee Schedules that could be readily adopted by the Board.

9. Federal standards:

There are no federal standards applicable to this proposed rule.

10. Compliance schedule:

The Board has a set an effective date of October 1, 2015.

Regulatory Flexibility Analysis

1. Effect of rule:

Small businesses and local governments whose only involvement with the workers’ compensation system is that they are employers and are required to have coverage will not be affected by this rule. Small businesses cannot be individually self-insured but must purchase workers’ compensation coverage from the State Insurance Fund or a private insurance carrier authorized to write workers’ compensation insurance in New York or join a group self-insured trust. It is the entity providing coverage for the small employer that must comply with all of the provisions of this rulemaking, not the covered employer. The impact on the State Insurance Fund and all private insurance carriers is not covered in this document as they are not small businesses. Group self-insured trusts and third party administrators hired by private insurance carriers may be small businesses, and these businesses may be impacted by this regulation. All health practitioners authorized by the Chair who perform surgery in an Ambulatory Surgery Center will have to comply with the fee schedule when billing for medical care. Finally, local governments that own and/or operate a hospital may be affected by this rule.

The approximately 2,500 political subdivisions that are self-insured for workers' compensation coverage in New York State will have to comply with the provisions of this proposal. Those local governments who are not self-insured and do not own and/or operate an Ambulatory Surgery Center will not be affected by this rule.

2. Compliance requirements:

The proposed rule does not impose additional compliance requirements on the small businesses and local governments described above. Rather the proposed rule changes the mechanism for billing in workers’ compensation cases. Ambulatory Surgery Centers that may be small businesses or part of a local government will find the changes easy to adopt as they already use Medicaid billing practices.

3. Professional services:

Small businesses and local governments affected by the rule will not need any new professional services to comply with this rule.

4. Compliance costs:

The proposed amendment should not increase costs and should ultimately reduce administrative costs to all parties including rural participants. In addition, the Board will not charge for use of the fee schedule. The current fee schedule is proprietary. A hard copy of the current fee schedule costs $85.

5. Economic and technological feasibility:

It is economically and technologically feasible for small businesses and local governments to comply with the proposed amendments. The proposed amendments do not add any technological requirements or economic challenges from the current Fee Schedule.

6. Minimizing adverse impact:

As stated above, the implementation of the proposed amendments is expected to save money for all participants in the workers’ compensation system by adopting a widely used, existing methodology.

7. Small business and local government participation:

The Chair of the Board published a Subject Number on December 2, 2009 announcing the Board’s intention to adopt this methodology. All participants in the workers’ compensation system were invited to provide input into that decision. The proposed amendment is expected to reduce costs and consume fewer resources for all participants in the workers’ compensation system including small businesses and local governments.

Rural Area Flexibility Analysis

1. Types and estimated numbers of rural areas:

The amendment of Part 329 of 12 NYCRR will apply to all insurance carriers, the State Insurance Fund self-insured employers, self-insured local governments, local governments that own and/or operate Ambulatory Surgery Centers, group self-insured trusts, and third party administrators across the state. These individuals and entities exist in all rural areas of the state.

2. Reporting, recordkeeping and other compliance requirements; and professional services:

Adoption of the ambulatory fee schedule will require all medical providers at Ambulatory Surgery Centers and payers to adhere to the new billing process contained in the fee schedule. The fee schedule replaces an older outdated method and will not involve additional reporting, recordkeeping or other compliance requirements. It is not anticipated that the proposed amendment will require any additional staffing or resources by rural employers.

3. Costs:

The proposed amendment should not increase costs and should ultimately reduce administrative costs to all parties including rural participants. In addition, the Board will not charge for use of the fee schedule. The current fee schedule is proprietary. A hard copy of the current fee schedule costs $85.

4. Minimizing adverse impact:

As stated above, the adoption of the new fee schedule should not have adverse impact on rural areas. Medical providers should be able to readily adapt due to their familiarity with Medicare and Medicaid billing rules. Once payers incorporate the new rules into their existing practices there should be no adverse impact.

5. Rural area participation:

The Chair published a Subject Number announcing a change to the Ambulatory Fee Schedule that adopted the APG methodology on December 2, 2009. This Subject Number provided for comments and questions to be directed to the Board from all participants including those in rural areas.

Job Impact Statement

The proposed rule will not have an adverse impact on jobs. The proposed rule amends Part 329 of 12 NYCRR, known as the Ambulatory Surgery Fee Schedule.

The rule does not eliminate any existing process, procedure, or program, and will not result in an adverse impact on jobs.