What does OPPS stand for in Medical Billing

Medicare is one of the fastest-growing federal health care insurance policies in the health care industry. With so many patients relying on Medicare to avail outpatient services the expenditure of the hospitals keeps on growing from time to time. This creates a financial imbalance in the hospital budget to cover for so many Medicare patients. Keeping this in mind, CMS came out with OPPS to manage the outpatient services expenditure in a better way. This prevents hospitals from facing any financial issue while providing outpatient facilities to thousands of Medicare patients.

Definition of OPPS

In medical billing, the term OPPS means Outpatient Prospective Payment System—a system implemented by the Centers for Medicare & Medicaid Services (CMS) in 2000 to pay for various medical services and improve the reimbursement rate for outpatient services under Medicare. The reimbursement rate varies with the location of the clinic or hospital.

CMS is free to make any changes in the OPPS and APC as per provisions in the Balanced Budget Act of 1997 and the Balanced Budget Refinement Act of 1999. Moreover, the OPPS is authorized by the SSA (Social Security Act 1833).

Purpose of OPPS

OPPS allows CMS to pay a fixed amount to hospitals for Medicare outpatient services. Such an arrangement helps CMS in predicting and managing programs much efficiently. It is important to note that OPPS is based on the Ambulatory Patient Classification (APC) system. To make the OPPS successful CMS assigns HCPCS codes to APC and these codes are updated annually. The hospitals are required to bill on a UB-92 or successor claim forms using HCPCS codes for all outpatient services and supplies. All the CPT codes are included within the HCPCS codes. The rates in the APC system are assigned by the CMS to make the billing and reimbursement process hassle-free.

As per the provisions laid out by CMS, the OPPS was designed to pay for the following services:

• Designated hospital outpatient items and services
• Certain Medicare Part B services for hospital inpatients when Medicare cannot pay Part A
• Community Mental Health Centers (CMHCs) partial hospitalization services and certain inpatient hospital services paid by Medicare Part B
• Home Health Agency-furnished hepatitis B vaccines and their administration, splints, casts, and antigens for patients not under a home health plan of care or for hospice patients for treatment of non-terminal illness or related conditions
• Comprehensive Outpatient Rehab Facility (CORF)-furnished hepatitis B vaccines and their administration
• An Initial Preventive Physical Examination (IPPE) within the first 12 months of Medicare Part B coverage.

The services excluded from the OPPS are:

• Clinical diagnostic laboratory services
• Outpatient therapy services
• Screening and diagnostic mammography

Role of OPPS in Medical Billing

The role of OPPS in the medical billing is to eliminate discrepancy in the reimbursement of outpatient services across hospitals. Outsourcing OPPS services from a medical billing gives the assurance of having a trained medical biller who knows all the technicalities related to Medicare, OPPS and APC systems. The medical biller ensures that there is no error in the UB-92 or successor claim forms to prevent denied claims.