BWC will adopt a modified version of Medicare’s OPPS, effective Jan. 1, 2011. Below is a table that outlines our outpatient hospital payment history from 2007 to 2010.

We adopted our OPPS methodology through the Ohio Administrative Code rule making process. We gave interested parties an opportunity to provide input on the rule, which you can view by clicking the link below.
Note: You must read through the copyright agreement page first, and then click on the link at the bottom of that page that you agree and want to view the fee schedule.

Hospital Outpatient Reimbursement Rule (OAC) 4123-6-37.2

For additional information on how we customized our methodology, see Appendix A.

Currently, our payment rates for acute care hospitals set at 197 percent of what Medicare pays for the same service and 253 percent of the Medicare rate to children’s hospitals. We'll use a separate payment calculation for critical access hospitals where we'll apply the 197-percent payment adjustment factor to 101 percent of the facilities Medicare outpatient cost. Additionally, we'll process critical access hospital bills through the same editing as other hospital outpatient bills. Self-insuring employers may adopt this payment methodology, pay at the cost plus method effective April 1, 2009 to Dec. 31, 2010 in the above table, or at a rate they negotiate with hospitals.

This change to a prospective payment system will increase BWC’s and our interested parties' ability to foresee the outpatient cost financial impacts because rates and policies are established in advance and remain constant during the effective period. This system promotes payment predictability, equity and consistency of payments. We encourage facilities to improve their efficiency of care. BWC’s basic payment formulas are as follows:

• Basic APC formula - Medicare’s OPPS rate (wage index adjusted) + Outlier (if applicable)+ Sole community/Hold harmless add on (if applicable) = Total OPPS rate
  Total OPPS rate * BWC payment adjustment factor = BWC rate;
• Basic fee schedule formula - CMS fee schedule rate * BWC payment adjustment factor = BWC rate
• Basic reasonable cost formula - Allowed charge * Medicare overall outpatient ratio of cost to charge = CMS rate
  CMS rate * BWC payment adjustment factor = BWC rate

We process all bills through the integrated outpatient code editor (I/OCE) to ensure proper code and billing data element reporting. It's important for providers to assign correct Current Procedural Terminology (CPT®)/Healthcare Common Procedural Coding System (HCPCS) codes. Each CPT®/HCPCS code is assigned to one APC. Incorrect or missing codes can impact payment to a hospital. Also, we follow the National Correct Coding Initiative (NCCI) edits for hospital outpatient setting and accept numerous modifiers approved for the hospital setting. It's important for hospitals to use all appropriate modifiers in reporting items, services and supplies.

Resources and related links
OPPS overview (video - eight minutes) - Highlights the customization of this reimbursement methodology used by the Centers for Medicare & Medicaid (CMS) and outlines BWC's outpatient hospital payment changes

Data elements for OPPS

• Covered and non-covered revenue codes for all hospital services
• Revenue codes requiring CPT® codes for hospital outpatient services
• Valid modifiers for hospital outpatient services