AHA Coding Clinic® for HCPCS - 2001 Issue 3

CMS proposes changes to observation services

The Centers for Medicare and Medicaid Services (CMS, formerly HCFA), published a proposed rule for changes to the hospital outpatient prospective payment system (OPPS) and calendar year 2002 payment rates. Many of the proposed changes came out of recommendations of the Advisory Panel on APC Groups. Among the many APC grouping changes proposed were changes in the way CMS handles observation services. Before the implementation of OPPS, Medicare paid observation care on a reasonable cost basis. Under OPPS, observation services are not separately paid in that they are not assigned to a separate APC. Costs for observation services are...

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