Chapter 4.5. Division of Workers' Compensation
Subchapter 1. Administrative Director - Administrative Rules
Article 5.3. Official Medical Fee Schedule

§ 9789.30. Hospital Outpatient Departments and Ambulatory Surgical Centers - Definitions.

(a) "Adjusted Conversion Factor" is determined as follows: unadjusted conversion factor x (1-labor-related share + (labor-related share x wage index)). For each update, the unadjusted conversion factor for the preceding period is adjusted by the rate of change in the market basket inflation factor. The market basket inflation factor and labor-related share are specified in the Federal Register notices announcing revisions in the Medicare payment rates. See Section 9789.39(b) for the unadjusted conversion factor, market basket inflation factor, and labor-related share by date of service.

For services rendered on or after February 15, 2006, in accordance with Section 411 of Pub. L. 108-173 and the final rule published in the Federal Register of November 10, 2005 (CMS-1501-FC, 70 FR 68516) at page 68556, the "Adjusted Conversion Factor" for a rural Sole Community Hospital (SCH) includes an adjustment factor of 1.071, which document is incorporated by reference and will be made available upon request to the Administrative Director.

(b) "Ambulatory Payment Classifications (APC)" means the Centers for Medicare & Medicaid Services' (CMS) list of ambulatory payment classifications of hospital outpatient services.

(c) "Ambulatory Surgical Center (ASC)" means any surgical clinic as defined in the California Health and Safety Code Section 1204, subdivision (b)(1), any ambulatory surgical center that is certified to participate in the Medicare program under Title XVIII (42 U.S.C. SEC. 1395 et seq.) of the federal Social Security Act, or any surgical clinic accredited by an accrediting agency as approved by the Licensing Division of the Medical Board of California pursuant to Health and Safety Code Sections 1248.15 and 1248.4 to use anesthesia, except local anesthesia or peripheral nerve blocks, or both, in compliance with the community standard of practice, in doses that, when administered have the probability of placing a patient at risk for loss of the patient's life-preserving protective reflexes.

(d) "Ambulatory Surgical Center Payment System" means Medicare's payment system for specific ambulatory surgical center covered surgical procedures published in the Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems final rule for the relevant payment year.

(e) "Annual Utilization Report of Specialty Clinics" means the Annual Utilization Report of Clinics that is filed by February 15 of each year with the Office of Statewide Health Planning and Development by the ASCs as required by Section 127285 and Section 1216 of the Health and Safety Code.

(f) "APC Payment Rate" means CMS' hospital outpatient prospective payment system rate. The APC payment rate is specified in the Federal Register notices announcing revisions in the Medicare payment rates. See Section 9789.39(b) for the Federal Register reference to the APC payment rate by date of service.

(g) "APC Relative Weight" means CMS' APC relative weight as set forth in CMS' hospital outpatient prospective payment system. The APC relative weight is specified in the Federal Register notices announcing revisions in the Medicare payment rates. See Section 9789.39(b) for the Federal Register reference to the APC relative weight by date of service.

(h) "CMS" means the Centers for Medicare & Medicaid Services of the United States Department of Health and Human Services.

(i) "Cost to Charge Ratio for ASC" means the ratio of the facility's total operating costs to total gross charges during the preceding calendar year.

(j) "Cost to Charge Ratio for Hospital Outpatient Department" means the hospital cost-to-charge used by the Medicare fiscal intermediary to determine high cost outlier payments.

(k) "Facility Only Services" means services, defined by Medicare, that rarely or are never performed in the non-facility setting, and are not: 1. emergency room visits; 2. Surgical procedures; or 3. An integral part of the emergency room visit or surgical procedure, in accordance with section 9789.32. See section 9789.39(b) for the CMS Physician Fee Schedule Relative Value File which contains the description of the Facility Only Services by date of service.

(l) "HCPCS" means CMS' Healthcare Common Procedure Coding System, which describes products, supplies, procedures and health professional services and includes, the American Medical Associations (AMA's) Physician "Current Procedural Terminology", Fourth Edition (CPT-4) codes, alphanumeric codes, and related modifiers.

(m) "HCPCS Level I Codes" are the AMA's CPT-4 codes and modifiers for professional services and procedures.

(n) "HCPCS Level II Codes" are national alphanumeric codes and modifiers maintained by CMS for health care products and supplies, as well as some codes for professional services not included in the AMA's CPT-4.

(o) "Health facility" means any facility as defined in Section 1250 of the Health and Safety Code.

(p) "Hospital Outpatient Department" means any hospital outpatient department of a health facility as defined in the California Health and Safety Code Section 1250 and any hospital outpatient department that is certified to participate in the Medicare program under Title XVIII (42 U.S.C. SEC. 1395 et seq.) of the federal Social Security Act.

(q) "Hospital Outpatient Department Services" means services furnished by any health facility as defined in the California Health and Safety Code Section 1250 and any hospital that is certified to participate in the Medicare program under Title XVIII (42 U.S.C. SEC. 1395 et seq.) of the federal Social Security Act to a patient who has not been admitted as an inpatient but who is registered as an outpatient in the records of the hospital.

(r) "Hospital Outpatient Prospective Payment System (HOPPS)" means Medicare's payment system for outpatient services at hospitals. These outpatient services are classified according to a list of ambulatory payment classifications (APCs).

(s) "Labor-related Share" means the portion of the payment rate that is attributable to labor and labor-related cost determined by CMS, pursuant to Section 1833(t)(2)(D) of the Social Security Act and as specified in the Federal Register notices announcing revisions in the Medicare payment rates. See Section 9789.39(b) for the Federal Register reference that references the labor-related share by date of service.

(t) "Market Basket Inflation Factor" means the market basket percentage change determined by CMS as set forth in the Federal Register notices announcing revisions in the Medicare payment rates. See Section 9789.39(b) for the Federal Register reference to the market basket inflation factor by date of service.

(u) "Other Services" means Hospital Outpatient Department Services rendered on or after September 1, 2014, but before December 15, 2016, to hospital outpatients and payable under the CMS hospital outpatient prospective payment system that are not: 1. Surgical procedures; 2. Emergency room visits; 3. Facility Only Services; or 4. An integral part of the surgical procedure, emergency room visit or Facility Only Service.

For services rendered on or after December 15, 2016, "Other Services" means Hospital Outpatient Department Services rendered to hospital outpatients and payable under the CMS hospital outpatient prospective payment system that are not: 1. Surgical procedures; 2. Emergency room visits; or 3. An integral part of the surgical procedure or emergency room visit.

(v) "Outlier Threshold" means the Medicare outlier threshold used in determining high cost outlier payments.

(w) "Price adjustment" means any and all price reductions, offsets, discounts, rebates, adjustments, and or refunds which accrue to or are factored into the final net cost to the hospital outpatient department or ambulatory surgical center.

(x) "OMFS RBRVS" means the Official Medical Fee Schedule for physician and non-physician practitioner services in accordance with sections 9789.12 through 9789.19.

(y) "Total Gross Charges" means the facility's total usual and customary charges to patients and third-party payers before reductions for contractual allowances, bad debts, courtesy allowances and charity care.

(z) "Total Operating Costs" means the direct cost incurred in providing care to patients. Included in operating cost are: salaries and wages, rent or mortgage, employee benefits, supplies, equipment purchase and maintenance, professional fees, advertising, overhead, etc. It does not include start up costs.

(aa) "Wage Index" means CMS' wage index for urban, rural and hospitals that are reclassified as described in CMS' Hospital Outpatient Prospective Payment System (HOPPS) and wage index values as specified in the Hospital Inpatient Prospective Payment Systems set forth in the Federal Register notices announcing revisions in the Medicare payment rates. See Section 9789.39(b) for the Federal Register reference that contains description of the wage index and wage index values by date of service.

(ab) For services payable under Sections 9789.30 through 9789.39, "Workers' Compensation Multiplier" means the multiplier to the Medicare rate adopted by the AD in accordance with Labor Code Section 5307.1, or the multiplier that includes an extra percentage reimbursement for high cost outlier cases, by date of service.

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Note: Authority cited: Sections 133, 4603.5, 5307.1 and 5307.3, Labor Code. Reference: Sections 4600, 4603.2 and 5307.1, Labor Code.

HISTORY

1. New section filed 1-2-2004 as an emergency; operative 1-2-2004 (Register 2004, No. 2). A Certificate of Compliance must be transmitted to OAL by 5-3-2004 or emergency language will be repealed by operation of law on the following day.

2. Certificate of Compliance as to 1-2-2004 order, including amendment of subsections (d)-(f), transmitted to OAL 4-30-2004 and filed 6-15-2004 (Register 2004, No. 25).

3. Amendment filed 12-27-2012; operative 1-1-2013 as a file and print only pursuant to Government Code section 11340.9(g) (Register 2012, No. 52).

4. New subsections (j), (s) and (w), subsection relettering, amendment of newly designated subsections (u) and (aa) and repealer of last paragraph filed 6-3-2014; operative 9-1-2014 as a file and print only pursuant to Government Code section 11340.9(g) (Register 2014, No. 23).

5. Editorial correction removing extraneous text from subsection (m) (Register 2016, No. 51).

6. New subsections (d) and (r), repealer of subsection (u), subsection relettering and amendment of newly designated subsections (u) and (ab) filed 12-15-2016; operative 12-15-2016 as a file and print only pursuant to Government Code section 11340.9(g) (Register 2016, No. 51).