Reimbursement : Amounts

EAPG Reimbursement Methodology

ForwardHealth uses the EAPG system software to classify and calculate reimbursement for outpatient hospital services. The Enhanced Ambulatory Patient Groups used in the EAPG system categorize the amount and type of resources used in various outpatient visits.

Under the EAPG system, ForwardHealth reimburses hospital providers for outpatient hospital services based on the quantity and type of services they provide. The system ensures that both low- and high-cost services are reimbursed appropriately.

ForwardHealth reimbursement of outpatient hospital services under the EAPG system is a packaged reimbursement, similar to DRGs for inpatient hospital services. Rather than being grouped by diagnosis and surgical codes, however, EAPGs are grouped by HCPCS or CPT procedure codes.

The EAPG payment methodology pays different amounts for outpatient hospital services based on the resources required for each visit; it provides greater reimbursement for high-intensity services and relatively less reimbursement for low-intensity services. It also allows for greater payment homogeneity for comparable services across all outpatient hospital settings.

Classification of Services

The EAPG system classifies EAPGs into one of the following types:

• Significant procedure — a normally scheduled procedure that constitutes the reason for the visit and dominates the time and resources expended during the visit
• Medical visit — a visit during which medical treatment was received but no significant procedure was performed (One example of a medical visit would be a preventive care visit.)
• Ancillary service — the term "ancillary service" is used to refer to both ancillary tests and ancillary procedures
  • An ancillary test is a test ordered by the primary physician to assist in patient diagnosis or treatment.
  • An ancillary procedure is a procedure that increases but does not dominate the time and resources expended during the visit.

Rate Setting

Rates for use in the EAPG system are posted on the Hospital Weights and Rates page of the ForwardHealth Portal, accessed via the Provider-specific resources link in the Provider area of the Portal.

A rate is determined for each hospital. This rate is multiplied by the appropriate EAPG weight to determine reimbursement.

Packaging

Using the EAPG system, ForwardHealth packages some, but not necessarily all, ancillary services; this simply means these services are included in the EAPG payment rate for a significant procedure or medical visit, rather than being separately reimbursed. For example, a chest X-ray may be packaged into the payment for a pneumonia visit. Although the detail of the packaged ancillary shows an allowed amount of $0, the packaging of ancillary services does not imply that there is no payment associated with the packaged ancillary. The cost of the packaged ancillary is included in the payment amount for the significant procedure or medical visit EAPG.

The ancillary services to be packaged are selected primarily on clinical grounds, as established by the EAPG system. Thus, only ancillaries that are clinically expected to be a routine part of the specific procedure or medical visit are packaged.

Ancillary Services That Are Not Separately Reimbursable

Ancillary services that are not separately reimbursable will be denied if the primary procedure is denied and there is no significant procedure or medical visit to which the ancillary service can be packaged.

Weight

The EAPG system examines the revenue code along with the procedure code and, if applicable, the diagnosis code and gender in order to assign each detail line an EAPG, along with other relevant values (weights, packaging flags, discounting percentages, etc.). Each EAPG carries a "weight" based on the group's average cost, from which appropriate payment levels are established.

Version Indicator

ForwardHealth will post the current version number of the EAPG software in use on the Inpatient DRG Weights and Outpatient EAPG Weights and Inpatient and Outpatient Hospital Rates page of the Portal. For purposes of reimbursement, the version indicator will be determined using the header "from" dates of service entered on the claim.

Multiple Significant Procedure Discounting

When multiple significant procedures are performed by the same provider for the same member during the same visit, ForwardHealth reimburses the first significant procedure at 100 percent of the allowed amount, the second at 50 percent, and any subsequent procedures at 25 percent. The significant procedure the highest weight on the claim is reimbursed as the first significant procedure, the next highest is reimbursed as the second significant procedure, etc.

Bilateral Discounting

When a bilateral procedure is indicated on a detail by the use of modifier 50 (Bilateral procedure), ForwardHealth will reimburse the procedure at 150 percent of the allowed amount; that is, 100 percent for the first procedure and 50 percent for the second.

Repeat Ancillary Discounting

When non-routine ancillary services (as determined by the EAPG system) are repeated by the same provider on the same DOS for the same member, ForwardHealth will reimburse these items as follows: 100 percent of the allowed amount for the first ancillary item, 50 percent for the second, and 25 percent for any subsequent items.