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IPPS Proposed Rule Clarifies Device Payments

James Carroll, for HealthLeaders Media, June 2, 2011

Payment reductions are then triggered by using modifiers –FB (without cost) or –FC (partial credit), in addition to using the above condition codes (49 or 50), according to Mackaman.

"Not only does the reduction in payment affect the hospital, it also affects the amount of co-insurance the patient pays out-of-pocket which is different than the IPPS rule, which applies deductibles and co-insurance based on 'benefit days.'"

In the IPPS proposed rule for 2012, CMS recognizes the discrepancy between the IPPS policy and the OPPS partial credit policy for replacement devices. For the OPPS partial credit policy, credit must be 50% or greater of the cost of the replacement device, and for the IPPS policy – it does not specify whether the credit should be 50% or greater of the replacement device or the original device.

CMS believes that these two policies should be consistent with each other on the issue of whether the 50% or more credit is with respect to the replacement or original device. As a result, CMS is proposing to clarify the IPPS policy to state that the policy applies where "the hospital received a credit equal to 50% of more of the cost of the replacement device."

Providers should respond to this proposal accordingly, according to Mackaman.

"Since this is a clarification and not a change to the actual regulation, hospitals should review their current policies and align with the CMS policy by ensuring that the language concerning the credit is for the replacement device and not for the original malfunctioning or recalled device."


James Carroll is associate editor for the HCPro Revenue Cycle Institute.

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