OWCP Medical Fee Schedule 2012
Hilda Solis, Secretary
Office of Workers' Compensation Programs
Gary A. Steinberg, Acting Director
July 28, 2012
Last modified: August 15, 2012
OWCP MEDICAL FEE SCHEDULE - 2012
PART I
INTRODUCTION
THE OWCP MEDICAL FEE SCHEDULE
PROGRAM INFORMATION
INSTRUCTIONS FOR CALCULATING THE MAXIMUM ALLOWABLE DOLLAR AMOUNT
Professional Services, Equipment, and Supplies
Inpatient Services
PART II -- DATA FILES
Procedure Codes and
CPT*, HCPCS**, CDT*** and OWCP codes, pay status codes, RVU values, conversion factors and short descriptions are contained in the file named fs12_code_rvu_cf.xls
UB-04 Revenue Center Codes (RCC) that require CPT/HCPCS/OWCP procedure codes are contained in the file named fs12rcc_req_cpt.xls
Geographic Practice Cost Index Values
A listing of geographic practice cost indices by Metropolitan Statistical Area (MSA) names in alphabetic order is contained in the file fs12gpci-by-msa.xls.
A listing of geographic practice cost indices by ZIP code is contained in the file fs12gpci-by-zip.xls
Modifier Adjustments
Listings of Modifier Level Tables with OWCP-designated fee schedule adjustment for each modifier are contained in the file fs12_mod_table.xls.
* American Medical Association, Current Procedural Terminology, 2012 Edition
** Centers for Medicare and Medicaid Services, Healthcare Common Procedure Coding System, 2012 Edition
*** American Dental Association, Current Dental Terminology 2011-2012
NOTICE
The following coding schemes are valid for billing medical procedures, services, durable medical equipment, and supplies, under the U. S. Department of Labor's Office of Workers' Compensation Programs:
o The American Medical Association, Current Procedural Terminology (CPT, 2012 edition).
o The U. S. Department of Health and Human Services, Centers for Medicare and Medicaid Services, Healthcare Common Procedure Coding System Level II, 2012 (HCPCS).
o The American Dental Association, Current Dental Terminology 2011-2012 (CDT).
o Uniform Bill 04 (UB-04, CMS-1450, OWCP-04) Revenue Center Codes (for services and procedures where CPT/HCPCS or OWCP codes are not required)
o
Charges and fees for current services that are billed under codes not current on the above-listed coding schemes, or that are applicable only to state workers' compensation programs, will be denied. Such charges may be submitted again under the above-listed coding schemes.
PART I
INTRODUCTION
The U.S. Department of Labor's Office of Workers' Compensation Programs (OWCP) administers workers’ compensation programs under four federal Acts: the Federal Employees' Compensation Act (FECA), the Longshore and Harbor Workers' Compensation Act (LHWCA), the Federal Black Lung Benefits Act (FBLBA), and the Energy Employees Occupational Illness Compensation Program Act (EEOIC). The OWCP Medical Fee Schedule applies to FECA, EEOIC and LHWCA; a modified version is used for the FBLBA.
FECA (20 CFR Part 10) provides benefits for work-related injuries sustained by federal employees, employees of the U.S. Postal Service, civilian employees of the Department of Defense, members of the Peace Corps, employees of American Embassies and certain others. Under the provisions of FECA, OWCP authorizes payment for medical services and establishes limits for fees for such services (March 10, 1986, 51 FR 8276- 82, as amended; the most recent amendment was published November 25, 1998, 63 FR 65284- 345. The 1998 amendment included authority to establish payment limits for inpatient services and prescription drugs.
LHWCA (33 U.S.C. 901, et seq) provides medical benefits, compensation for lost wages, and rehabilitation services to longshoremen, harbor workers, and other maritime workers who are injured during the course of employment. By extension, various other classes of private industry workers also receive benefits. These include workers engaged in the extraction of natural resources on the outer continental shelf, employees of defense contractors overseas, employees at post exchanges on military bases, and others. The amendments to the regulations governing administration of the LHWCA, published October 2, 1995 60 FR 51346-348, clarify that fees by medical care providers covered by the Act shall be limited to that which prevails in the community, and that where a dispute arises, the OWCP Medical Fee Schedule shall be used to determine the prevailing reasonable and customary charge (section 702.413). Where the OWCP schedule does not establish a rate, other state or federal fee schedules, or prevailing community rates may be used. The OWCP medical fee schedule does not apply to the Jones Act.
EEOIC (20 CFR Part 30) provides compensation and medical benefits to covered employees of the United States Department of Energy (DOE), its predecessor agencies, and certain of its contractors and sub-contractors. Under the provisions of EEOIC, OWCP authorizes payment for medical services and establishes limits for fees for such services (20 CFR 30.705-713.)
THE OWCP MEDICAL FEE SCHEDULE
OWCP began to reimburse medical services under a schedule of maxima allowable amounts in 1986. Since June 1, 1994 the schedule has been based on the most recent relative value units (RVU) devised by the Department of Health and Human Services, Centers for Medicare and Medicaid Services (CMS) (last published November 28, 2011, 75 FR 228, pp. 73026-73474 and updated quarterly) for services described under the American Medical Association's Physicians' Current Procedural Terminology (CPT), and the Healthcare Current Procedure Coding System (HCPCS). In addition, the OWCP uses program-specific data and the most recent CMS Clinical Diagnostic Laboratory National Limit data, including carrier maxima, national limit, and mid-point values, to establish RVU and conversion factors for clinical laboratory procedures provided under OWCP programs. OWCP also devises its own RVU for durable medical equipment, supplies, and other items or services such as those described under procedure codes unique to the program (OWCP Codes). Such RVU are based on CMS data, state workers' compensation data, and OWCP program-specific data.
Geographic Adjustment Factors
OWCP applies geographic practice cost index values (GPCI) to each reimbursement. These values are specific to geographic locations most recently defined by the Bureau of the Census as Metropolitan Statistical Areas (MSA). For the 2012 GPCI values, OWCP has used the Geographic Practice Cost Indices (GPCI) developed under CMS to calculate the values Medicare program carriers use for CY 2012 carrier-designated locality adjustments, and then aggregated to the MSA level.
OWCP Conversion Factors
The OWCP devises its own conversion factors (CF) for converting RVU and GPCI into maximum dollar amounts per medical service or item based on program-specific data, and national billing data from other federal programs, state workers' compensation programs and the U. S. Department of Labor's Bureau of Labor Statistics consumer price index (CPI) data.
Covered Services: The fee schedule is applicable to charges for services by medical professionals, including physicians, clinical psychologists, ophthalmologists, chiropractors, osteopaths, podiatrists, physicians' assistants, therapists, and medical technologists/ technicians. OWCP also applies a schedule to certain durable medical equipment, supplies and other items or services covered under the program. Some services are never covered under the OWCP fee schedule. Information regarding whether a service may be covered can be found in the file named fs12_code_rvu_cf.xls under the column entitled Pay Status. Applicable codes and their definition are as follows:
C – Covered
D – Not Payable by DOL
S/R – Suspend for Review
It should be noted that a pay status code of C is not a guarantee of coverage or payment in any particular case.
Inpatient Services: Inpatient hospital services provided under OWCP are grouped and priced using the 3M Core Grouping Software and subject to a reimbursement schedule based on the Medicare Inpatient Prospective Payment System (IPPS). That system assigns services to diagnostic-related groups (DRGs) and adjusts rates for individual hospitals according to their specific cost index. OWCP utilizes the 3M software based on Medicare payment methodologies, but has devised its own reimbursement formulae which were derived from national statistics on injuries treated under workers' compensation (data from OWCP and state workers' compensation programs), as well as other data on injuries and illnesses from Medicare, CHAMPUS, and the VA. Inpatient services not covered under the Medicare IPPS are reimbursed under a formula that is based on the cost-to-charge ratio (CCR) data tables published by CMS for rural and urban hospitals in each state. These tables are a portion of the data CMS publishes each year when they update their regulations on payment of inpatient services. For most recent changes to CMS hospital inpatient prospective payment systems, CCR values, and fiscal year 2012 rates, see 76 FR 228, published Monday, November 28, 2011. Specific information on OWCP inpatient formulae follows under a section titled "OWCP Inpatient Reimbursement Formulae". Additional information about our inpatient reimbursement schedules may be obtained by contacting the program. (See "Program Information" below.)
Hospital-based inpatient services should be billed on the UB-04 showing revenue center charges, ICD diagnostic and procedure codes and the hospital's Medicare number. Inaccurate coding may cause inappropriate reimbursement, erroneous reductions in allowable amounts and/or delays in bill processing. The physician's professional services should be coded and billed on Form CMS-1500/OWCP-1500.
Outpatient Services: Ancillary charges for hospital outpatient services (emergency room, recovery room, operating room) should be billed under the appropriate Revenue Center Code (RCC) on the UB-04. Some RCC codes also require appropriate CPT/HCPCS codes. These are listed in fs12rcc_req_cpt.xls. It should be noted that inclusion of a procedure code in an RCC-crosswalk range does not imply authorization and/or coverage for that procedure code.) All outpatient professional services must be billed under the appropriate CPT/HPCS/OWCP procedure codes.
Anesthesia Services: Anesthesia is the administration of a drug or gas to induce partial or complete loss of consciousness. All anesthesia services administered must be billed under the appropriate Current Procedural Terminology (CPT) anesthesia five-digit procedure code plus the appropriate modifier codes: AA, QY, QK, AD, QX, or QZ. Surgery codes are not appropriate. A complete listing of all anesthetic procedures and modifiers which OWCP may cover is included in the file fs12_anesthesia_tables.xls.
An anesthesiologist, Certified Registered Nurse Anesthetists (CRNA) or an Anesthesia Assistant (AA) can provide anesthesia services. The anesthesiologist and the CRNA can bill separately for anesthesia services they personally perform. In cases of medical direction, both the anesthesiologist and the CRNA would bill OWCP for their component of the procedure. Each provider should use the appropriate anesthesia modifier. An in-depth explanation of the OWCP Anesthesia Services Policy and Reimbursement can be found in the file fs12AnesthesiaServicesPolicy.doc
Implanted Durable Medical Equipment & Prosthetic Implants: Most implants are paid under the Grouper/Pricer processing of inpatient acute care hospital bills. For outpatient procedures, implants must be billed on a separate line using the appropriate HCPCS code. Many implant items have maximum fees under the OWCP fee schedule. If no maximum allowable levels are set by the fee schedule, OWCP will pay acquisition cost for implants, provided the bill is accompanied by a copy of the original invoice clearly showing invoice cost less applicable discounts.
Exception – Intraocular Lenses: For free-standing ambulatory surgical centers, intraocular lenses, including new technology lenses, are bundled into the fee for the associated procedure. Please include the cost of the lens in the charge for the procedure. It is permissible to include a line on the bill with the HCPCS code for an intraocular lens (i.e., V2630, V2631 and V2632) and its associated cost for information purposes only.
Acquisition Cost Policy for Implanted Devices: Acquisition cost equals the invoice cost to the provider, including shipping, handling and sales tax, net of all discounts. These items must be billed together as one charge. Wholesale invoices for all devices must be retained in the provider’s office files for a minimum of three years. A provider must submit a hard copy of the invoice when an individual device or supply costs $150.00 or more, or upon request. Payment of a provider’s bill may be delayed if this information is not submitted.
Prescription Drugs: Effective September 29, 2011, pharmacy billings are based on the Average Wholesale Price as published by Medi-Span, a division of Wolters Kluwer Health. Prior to this date, pharmacy billings were based on the Blue Book Average Wholesale Price (BBAWP) as published by First DataBank.
The maximum allowable charge for pharmacy billings is based on the Average Wholesale Price (AWP) as published by Medi-Span for prescription drugs plus a dispensing fee, or on the Usual and Customary charge amount, whichever is less. The formula for computing the allowable fee for prescription drugs is 95% of the AWP plus a fixed dispensing fee of $4.00.
The pharmaceutical database is updated periodically by Wolters Kluwer Health. A more detailed explanation of the relevant drug pricing data fields, including AWP, and how Wolters Kluwer collects and reports such information, can be found on their website at:
http://www.medispan.com/common/pdf/wkh_AWP_policy.pdf
Prescription drugs should be billed under the correct NDC on the Uniform Claim Form either in hard copy or electronic format; show the trade or generic name, and the quantity provided. Pharmacies may submit bills electronically using the NCPDP 5.1 format to the Department’s fiscal agent, ACS. Contact the
Requests to determine if a drug is payable under a particular claim should be directed to our Medical Authorizations Unit at (866) 335-8319. Callers must have the NDC number of the drug in order to receive a prior authorization. Eligibility may also be checked via the web at this URL:
http://owcp.dol.acs-inc.com/portal/main.do
You must have the Case Number, NDC code and the date the prescription was (or is to be) filled.
Further information on electronic billings may be found at the OWCP web site: http://www.dol.gov/owcp/dfec/regs/compliance/infomedprov.htm
Other Services: OWCP will continue to exercise its current authority to establish maxima for certain services, items of durable medical equipment, facility use fees and other charges not currently on the schedule. Providers will be notified of major schedule changes. All fees without an OWCP-established maxima are subject to review based on prevailing reasonable and customary charges in the area where the service was provided.
Procedure Coding:
Non-physician Providers: NON-PHYSICIAN HEALTH CARE PROFESSIONALS MUST USE THE APPROPRIATE HCPCS MODIFIERS TO IDENTIFY THEIR CREDENTIALS WHEN USING CODES ALSO USED BY PHYSICIANS (MD/DO). Modifiers acceptable to OWCP are listed on the Modifier Level Table, fs12mod_table.xls. Non-physician providers who fail to use proper modifiers may not be reimbursed until services are correctly billed.
Home Health Services: Home health services should be billed under the appropriate 2012 HCPCS codes or OWCP program-specific codes. For further information on DEEOIC’s program specific policy on Home Health may be found at the OWCP web site: http://www.dol.gov/owcp/energy/.
Charges in Excess of the Maxima allowable: A provider is to charge OWCP their lowest fee charged to the general public. The OWCP fee schedule is not to be used to establish billing rates. A provider, whose fee for services is partially paid by OWCP as a result of the application of the schedule of maxima allowable charges, shall not request reimbursement from the injured employee (patient) for any amount in excess of the maximum allowable. A provider who collects or attempts to collect any amount in excess of the maximum allowable fee may be subject to exclusion from payment under the OWCP. Such exclusion of a provider will be reported by OWCP to all Federal employing agencies, the Centers for Medicare and Medicaid Services, and the state or local authority responsible for licensing or certifying the excluded provider.
Appeals:
Provider: A provider whose charge for service is partially paid because it exceeds the maximum allowable amount may, within 30 days of payment, request reconsideration of the fee determination. Such request should be made to the OWCP District Office having jurisdiction over the injured employee's (patient's) case, and must be accompanied by documentary evidence that (1) the actual procedure performed was incorrectly identified by the original code, or (2) the presence of a severe or concomitant medical condition made treatment especially difficult, or (3) the provider possessed unusual qualification (Board Certification in a specialty is not sufficient evidence in itself of unusual qualifications). These are the only circumstances which will justify reevaluation of the amount paid. If the OWCP district office issues a decision which continues to disallow a contested amount, the provider may apply to the Regional Director of the region with jurisdiction over the OWCP district office. The application must be filed within 30 days of the date of such decision, and it may be accompanied by additional evidence.
Claimant (patient): If an employee is not reimbursed in full for medical expenses because the amount he or she paid to the medical provider exceeds the maximum allowable, the employee may take the following actions in the order presented: (1) request the provider to refund or credit the difference, (2) request the provider to submit at no additional cost a request for reconsideration of the fee determination as described above, (3) request the OWCP District Office with jurisdiction to contact the provider concerning the amount paid in excess of the allowable maximum.
OWCP FEE SCHEDULE PUBLIC USE FILES
Publications: The OWCP medical fee schedule is published in electronic format only, in the form of eight EXCEL® spreadsheets and four WORD® files, and is available at the Department of Labor web site. The URL is
http://www.dol.gov/OWCP/regs/feeschedule/fee.htm
The files contain (1) general program information; (2) information specific to free-standing ambulatory surgical centers; (3) revenue center data and cost-to-charge ratio data for pricing hospital outpatient and other services; (4) a listing of valid AMA CPT, HCPCS, and ADA codes for CY 2012, and the relative value units (RVU) and conversion factors (CF) assigned to each; (5) information regarding modifiers; and (6) the geographic practice cost index (GPCI) values for each metropolitan statistical area (MSA), or state rural area in (a) alphabetic order by the primary name of the MSA, and (b) by ZIP code in ZIP code order. To locate cities or towns not specified in the name of the MSA, search by ZIP code. Counties included in a designated MSA are assigned GPCI values for that MSA; (7) a listing of anesthesia procedure codes with base units, zip-code conversion factors and anesthesia modifiers.
Common Billing Information
Billing Forms: Unless otherwise instructed, all charges should be presented on standard forms - the CMS-1500/OWCP-1500 (formerly HCFA-1500/OWCP-1500) or the UB-04/OWCP-04, and submitted to the U.S. Department of Labor, Office of Workers' Compensation Programs at the appropriate address:
U.S. Department of Labor
DFEC Central Mailroom DEEIOC DCMWC
PO Box 8300 PO Box 8304 PO Box 8302
London, KY 40742-8300 London, KY 40742-8304 London, KY 40742-8302
Claimant Identification: The injured employee's social security number must be listed on each bill; as well as the DFEC claim number when applicable.
Procedure Coding: For billing purposes, all physician services, regardless of setting, and all outpatient professional services, including the technical components of radiology, pathology, and clinical laboratory must be recorded using CPT/HCPCS codes or those provided by the OWCP.
Coding conventions as described in the CPT 2012Ó should be carefully observed, including the use of modifiers. Incorrect coding or the failure to indicate the correct number of units (frequency) on the CMS-1500/OWCP-1500 or UB-04/OWCP-04 may result in inappropriate reimbursement. In addition, OWCP reviews services billed under CPT codes for coherence with the AMA's description of the procedure, and other common standards for appropriateness of use. When a procedure has been prior-authorized by OWCP, consult the authorizer if there is any question concerning the correct coding, especially for comprehensive functional capacity evaluations, occupational rehabilitation programs (work hardening/work conditioning), and pain management programs. Non-specific CPT/HCPCS codes ending in "99" are usually considered inappropriate coding, and frequently result in improper reimbursement. Listing a single CPT code more than once on a day of service may result in denial of all but one of the charges because it will be interpreted by the OWCP automated system as duplicate charges; if a procedure covered under a singular CPT/HCPCS code was provided more than once on the same day, use appropriate units or appropriate modifier to indicate frequency. Non-standard coding and incomplete information will result in delayed and/or erroneous reimbursements.
For hospital outpatient facilities: facility charges should be identified by Revenue Center Codes (RCC) on the UB-04.
RCC codes that require appropriate CPT/HCPCS codes are listed in fs12rcc_req_cpt.xls. (It should be noted that inclusion of a procedure code in an RCC-crosswalk range does not imply authorization and/or coverage for that procedure code.)
Facility fees for services provided by freestanding ambulatory surgery centers under the OWCP medical fee schedule.
State waiver: Ambulatory surgery services provided in a hospital-based ambulatory surgical center in
Facility fees: Facility fees associated with procedures performed in freestanding ambulatory surgical centers are paid according to calculations based on the CPT code for the surgical procedure(s) performed. Bills are to be submitted on the Form HCFA/OWCP–1500. Each surgical procedure is to be indicated by the appropriate CPT Code with the OWCP modifier SG appended to indicate that the facility fee is being charged. The SG modifier carries a multiplier of 200% of the physicians’ professional maximum for dates of service beginning May 12, 2009 forward. For dates of service prior to May 12, 2009, the multiplier is 175%. Payment rates are also adjusted for the performance of multiple surgical procedures. The adjustment criteria calculates payment allowing 100% of the maximum allowable charge for the highest priced procedure and 50% of the maximum allowable charge on secondary, tertiary and all other procedures. Actual payment is based on the calculated payment rate or the billed charge, whichever is less.
These payment rates established under the OWCP medical fee schedule only apply to facility charges. The payment rate does not include physician fees, anesthesiologist fees, or fees of other professional providers authorized to render ambulatory surgery procedures and to bill independently for them. Professional fees must be submitted separately from facility fees. The payment rate does not apply to laboratory, x-rays or diagnostic procedures other than those directly related to the surgical procedure. Charges for non-surgical diagnostic services must be submitted separately from facility fees. The payment rate does not apply to surgically implanted prosthetic devices; ambulance services; leg, arm, and back braces; artificial limbs; or durable medical equipment for use in the patient’s home. Charges for DME/POS and implanted devices must be submitted separately from facility fees, and bills for such items must be accompanied by true copies of the vendor’s invoice.
Note: a radiology/diagnostic procedure is considered to be directly related to the performance of the surgical procedure only if it is an inherent part of the surgical procedure, e.g., the CPT code for the surgical procedure includes the diagnostic or radiology procedure as part of the code description. Radiology/diagnostic procedures performed prior to the date of ambulatory surgery are processed separately and are paid under the appropriate sections of the OWCP medical fee schedule.
Covered ASC Facility Services include:
• Nursing services, services of technical personnel, and other related services;
• Use of the ASC facilities by the patient;
• Drugs, including take-home medications, biologicals, surgical dressings, supplies, splints, casts, appliances and equipment directly related to the surgical procedure;
• Diagnostic or therapeutic items and services directly related to the surgical procedure (including simple preoperative laboratory tests, e.g., urinalysis, blood hemoglobin or hematocrit);
• Administrative, record keeping and housekeeping items and services;
• Blood, blood plasma, platelets, etc.;
• Materials for anesthesia; and
• Intraocular lenses (IOLs).
ASC Approved Procedures include most CPT codes approved by the Medicare program for its ASC list for 2012 (Federal Register, Vol. 76, No. 230, pp. 74122-74584, Addendum AA, November 30, 2011) A complete listing of all surgical procedures which OWCP may cover in the ambulatory surgical setting is included in file fs12asc_pymt_grp.xls.
This list does not include procedures that are currently performed on an ambulatory basis in a physician’s office and that do not generally require the more elaborate facilities of an ASC. Neither does the list include procedures that are appropriately performed in an inpatient hospital setting or an outpatient hospital setting, but would not be safely performed in an ASC. We recognize that there are some procedures that might be appropriately performed in ASC for the younger patient who is generally healthy. But for the larger number of OWCP program beneficiaries whose health is more likely to be compromised by disability and age, an ASC may be a questionable setting for those same procedures. Therefore, we are including in the list only those procedures that can be safely performed in an ASC on the general OWCP program population in at least a significant number of cases. The resulting list of procedures allows ASCs to furnish OWCP program beneficiaries with a broad range of surgical services that reflect the practice of contemporary surgery without compromising patient safety.
OWCP Program Requirements for Prior Authorization: Elective surgery, therapeutic services provided beyond customary time periods (e.g. prolonged physical therapy treatments or therapy initiated long after the injury), comprehensive rehabilitation services such as work hardening/work conditioning programs or pain management programs, home health services, must be prior-authorized. All Medical Authorizations are now handled by our private contractor, ACS. The voice phone number for medical authorizations is (866) 335-8319, Monday-Friday, 8:00AM – 8:00PM EST. Providers may fax medical authorization requests to (800) 215-4901. Please be sure to put the claimant case number on each page you fax.
Further information, including specific information to include in requests for authorization, and our online tool for Eligibility, Authorization and Bill Payment can be obtained at the DOL web site:
For DFEC claims: http://www.dol.gov/owcp/dfec/regs/compliance/CBPOutreach.htm
For EEOIC claims: http://www.dol.gov/owcp/energy/
Reimbursement Rates: Bills are processed through an automated system, and are reimbursed at the billed amounts unless a particular charge exceeds the maximum allowable; such charges are reimbursed at the maximum allowable amount under the OWCP medical fee schedule. Procedures without an assigned maximum allowable (no RVU values have been assigned) are reviewed independently based on prevailing reasonable and customary charges in the area where the service was provided. To determine the maximum allowable amount for a particular procedure, see the instructions at the end of this document.
PROGRAM INFORMATION
For additional information concerning the OWCP schedule of maximum allowable amounts, or codes for OWCP-ordered services such as occupational rehabilitation, functional capacity evaluations or pain management programs, contact the nearest OWCP District Office. Current addresses and telephone numbers may be obtained at the DOL web site:
For FECA: http://www.dol.gov/owcp/contacts/fecacont.htm
For EEOIC: http://www.dol.gov/owcp/energy/regs/compliance/law/JurisdictionMap.htm
For LHWCA: http://www.dol.gov/owcp/dlhwc/lscontac.htm
National Office Contact:
U. S. Department of Labor
Office of Workers' Compensation Programs
Division of Planning, Policy and Standards
Room S-3524
INSTRUCTIONS FOR CALCULATING THE MAXIMUM ALLOWABLE DOLLAR AMOUNT
PER PROCEDURE FOR A SPECIFIC AREA
Each procedure subject to a maximum allowable amount (MAA) under the OWCP medical fee schedule has been assigned three relative values: work (W), practice expense (PE), and mal-practice expense (MP). Each of these three values is multiplied by three related values for geographic variance in procedure costs called geographic practice cost index values (GPCI): work (w), practice expense (pe), and mal-practice expense (mp). The resultant value is multiplied by a conversion factor (CF) to convert it into a dollar amount.
The Formula is:
[(Wrvu × wgpci) + (PErvu × pegpci) + (MPrvu × mpgpci)] × CF = MAA
Where: Wrvu = Work relative value units
wgpci = Work geographic practice cost index value
PErvu = Practice expense relative value units
pegpci = Practice expense geographic practice cost index value
MPrvu = Mal-practice relative value units
mpgpci = Mal-practice geographic practice cost index value
EXAMPLE: CPT 73562: Radiological examination, knee, minimum of three views, hospital setting.
Place of Service: Phoenix-Mesa-Scotsdale, AZ Metropolitan Statistical Area (MSA 38060)
CPT 73562 RVU: Work 00.18
Practice expense 00.92
Mal-practice expense 00.04
GPCI—Phoenix, AZ MSA work 1.000
practice expense 0.978
mal-practice expense 1.015
Conversion Factor for Radiology = $48.52
CALCULATION:
[(0.18×1.000)+(0.92×0.978)+(0.04×1.015)] × $48.52 = $54.36
OWCP INPATIENT BILL PROCESSING FORMULAE
For 2012, inpatient bills are currently processed under one of these three categories:
1. Hospital Services not subject to the Medicare Inpatient Prospective Pay System (IPPS).
OWCP applies a "cost-to-charge" (CCR) ratio formula that is based on CMS' case-weighted data for hospital operating and capital costs per state. All IPPS-exempt hospitals in a state are paid at the same ratio.
((
See the file named ccr12.xls for the table, COST TO CHARGE RATIO HIGH VALUES FOR CY 2012 FOR CALCULATING MAXIMUM ALLOWABLES FOR NON-IPPS HOSPITAL SERVICES
2.
3. Acute care hospital services covered under the Medicare Inpatient Prospective Pay System (IPPS) are paid under the following formulas based on:
A = OWCP maximum allowable payment;
LOS = The claimant's length of stay; and
MA = Medicare allowable amount calculated using the version of the 3M Grouper and Pricer software appropriate to the discharge date.
If LOS is less than or equal to 60 days,
A = (MA × 1.33333) + 1,156.00
If LOS is greater than 60 days but less than or equal to 90 days,
A = (MA × 1.33333) + 1,156.00 + [(LOS - 60) × 289.00]
If LOS is greater than 90 days,
A = (MA × 1.33333) + 9,826.00 + [(LOS - 90) × 578.00]