Please take time to read this important document!  The future of pulmonary rehabilitation depends on each and every one of us!  The following provides important information to make you aware of the AACVPR’s efforts to improve reimbursement for pulmonary rehab, and it involves you taking action in each of your hospitals.  Please read carefully, and contact Janie Knipper, jane-knipper@uiowa.edu with any questions.  More information will be coming as this effort continues to move forward.

IACPR Reimbursement Update June 2017

Pulmonary rehabilitation programs are struggling to remain financially viable in this ever-changing health care environment, and the AACVPR is ready to take on the challenge of improving reimbursement for pulmonary rehabilitation services (G0424).  Please read and tak action!

In 2010, when CMS authorized use of HCPCS code G0424 for billing of pulmonary rehab services, the Agency admitted it had no historical data on which to base a payment amount, and arbitrarily assigned a payment amount of $50.  Unfortunately, as the years passed and CMS collected data on which to base its payment rate, the reimbursement rate for pulmonary rehab decreased rather than increased!  In the November 30, 2011 Federal Register (page 74224, establishing payment for pulmonary rehab), CMS explicitly stated,

            Hospitals should be especially careful to thoughtfully establish charges for new codes     that use a single code to report multiple services that were previously reported by   multiple codes.  It is vital in these cases that hospitals carefully establish charges that    fully include all of the charges for all of the predecessor services that are reported by             the new code.  To fail to carefully construct the charge for a new code that reports a             combination of services that were previously reported separately, particularly in the       first year of the new code, under-represents the cost of providing the service . . .

Plain and simple:  programs or persons responsible for rate setting for G0424 did not identify all of the beneficial services that are provided in one session pulmonary rehab, and therefore set very low rates for one session of G0424.  In response to this problem, all the pulmonary societies combined their efforts to create the Pulmonary Rehabilitation Reimbursement Toolkit (available on the AACVPR website – www.aacvpr.org).  The Toolkit provided a guide for programs to identify the broad array of services integral to pulmonary rehabilitation that must be considered when computing the charge that must appear on all claims submitted to Medicare. 

Unfortunately, in 2017, it appears that many hospitals have still not adjusted the charge for G0424 to reflect the full hour of services!  The AACVPR recently invested in significant data mining associated with G0424, focusing on several key parameters:

• 1.     How many hospitals in the U.S. bill Medicare for code G0424, and how many claims does Medicare pay?
• 2.     What are the hospital charges for G0424 associated with every specific hospital, by name and address?
• 3.     What has CMS computed to be the costs associated with pulmonary rehab services, based on the data the hospital has provided integral to its annual hospital cost report?

The key findings are as follows:

• 1.     Nearly 1350 hospitals billed Medicare for code G0424 in 2015, the most recent year for which data are available.  These include hospital outpatient services only.  It does not include critical access hospitals as those hospitals receive their payment based on different payment methodologies.
• 2.     The actual number of claims submitted by those hospitals range from a high of over 3000 claims to a low of 11.
• 3.     The range of charges is from a high of $1981/session to a low of $44/session.
• 4.     The range of costs is from a high of $1265/session to a low of $4.00/session.

This data was vital for the AACVPR as they examined ways to focus future plans to secure appropriate payment for pulmonary rehabilitation services.  The AACVPR formed the PR Reimbursement Task Force to work with the MAC Liaison Task Force and the MAC Resource Groups (MRGs) to move this project forward. 

Based on recommendations of the PR Reimbursement Task Force, a charge amount threshold of $400/session was chosen.  All hospitals with charges of $400 or higher were eliminated from the work sheet.  The AACVPR MAC Liaison Task Force and the MRGs are now charged with collecting additional data from programs charging <$400/session, and who submitted > 250 G0424 claims/year.  This is not to say that those programs submitting < 250 G0424 charges/year are not important. The premise is that the impact on Medicare aggregate calculations from the smaller programs would be minimal.  In addition, by cutting the original number of hospitals from 1350 to 680, the effort becomes more manageable.

There are only 12 pulmonary rehab programs in Iowa that have submitted > 250 G0424 charges/year.  The MAC Liaison, Janie Knipper, will be contacting each program to gather additional information.  But the rest of us are not off the hook!  Even if you are not one of the 12 programs, we ALL must revisit the Pulmonary Rehabilitation Reimbursement Toolkit, and schedule meetings with our Chargemaster or whoever is responsible for your rate setting.  Share the Toolkit with those people so they better understand the tremendous amount of time and energy involved in one session of pulmonary rehab (G0424).  As stated above, the first goal is to encourage ALL programs to establish a charge of > $400/session for G0424.  It is clear this will take communication between the AACVPR, pulmonary rehab program directors, hospital CEOs, and hospital CFOs.  Stay tuned for more news as additional data is collected and this project moves forward