Overview of OPPS
The Outpatient Prospective Payment System, or OPPS, is the Medicare payment methodology used to reimburse hospital outpatient services. RHIA candidates should understand that OPPS uses Ambulatory Payment Classifications, or APCs, to group clinically similar services with comparable resource utilization, similar in concept to how DRGs function for inpatient reimbursement.
Key OPPS Concepts
- Status indicators, which determine how a specific code is paid or packaged under OPPS
- Packaging, where the cost of certain ancillary items is bundled into the payment for a primary service rather than paid separately
- Multiple procedure discounting, reducing payment for additional procedures performed during the same encounter
- Comprehensive APCs, bundling nearly all related services into a single payment for certain high-cost device-dependent procedures
Status Indicators in Practice
Each HCPCS or CPT code is assigned a status indicator that determines its payment treatment, such as separately payable, packaged, or not covered under OPPS. Accurate assignment and understanding of status indicators is essential for correct claims processing and revenue integrity.
Role of the Chargemaster
The hospital chargemaster, a comprehensive listing of billable services and associated codes, must be regularly reviewed and updated to ensure accurate code assignment supporting correct OPPS reimbursement. HIM professionals often collaborate with revenue cycle and finance teams on chargemaster maintenance.
Compliance Considerations
Common OPPS compliance risks include unbundling packaged services to bill them separately, inappropriate use of modifiers to bypass payment edits, and failure to apply appropriate multiple procedure discounting. The National Correct Coding Initiative edits also apply to outpatient claims, flagging code combinations that should not be billed together.
Annual Updates
CMS updates OPPS rates, APC assignments, and status indicators annually, requiring HIM and revenue cycle teams to review changes and update coding and billing systems accordingly each year.
Exam Tips
Expect questions on the purpose of status indicators, the concept of packaging under OPPS, and common compliance risks associated with outpatient claims processing under this payment system.