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Chapter 4.5. Division of Workers' Compensation
SUBCHAPTER 1. ADMINISTRATIVE DIRECTOR -ADMINISTRATIVE RULES
Article 5.3. Official Medical Fee Schedule -- Services Rendered after January 1, 2004

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§9789.33. Hospital Outpatient Departments and Ambulatory Surgical Facilities Fee Schedule - Determination of Maximum Reasonable Fee.

(a) For Services rendered on or after July 1, 2004, the maximum allowable payment for outpatient facility fees for hospital emergency room services or for surgical services performed at a hospital outpatient department or at an ambulatory surgical center shall be determined based on the following. In accordance with Section 9789.30(x), an extra 2% reimbursement shall be used in lieu of an additional payment for high cost outlier cases.

(1) For services rendered before March 1, 2008, use: CTP codes 99281-99285 and CPT codes 10021-69990 with status code indicators “S”, “T”, “X” or “V”:

For services rendered on or after March 1, 2008, use: CPT codes 99281-99285 and CPT codes 10021-69990 with status code indicators “S”, “T”, “X”, “V”, or “Q”. Status code indicator “Q” must qualify for separate payment.

For services rendered on or after March 1, 2009, use: CPT codes 99281-99285 and CPT codes 10021-69990 with status code indicators “S”, “T”, “X”, “V”, “Q1”, “Q2”, or “Q3”. Status code indicators “Q1”,”Q2”, and “Q3” must qualify for separate payment.

For services rendered before January 1, 2013: APC relative weight x adjusted conversion factor x 1.22 workers' compensation multiplier, pursuant to Section 9789.30(x). See Section 9789.39(b) for the APC relative weight by date of service.

For services rendered on or after January 1, 2013: APC relative weight x adjusted conversion factor x 1.22 workers' compensation multiplier for hospital outpatient departments and 0.82 workers' compensation multiplier for ambulatory surgical centers, pursuant to Section 9789.30(x).

(A) Table A in Section 9789.34 contains an “adjusted conversion factor” which incorporates the standard conversion factor, wage index and inflation factor. The maximum payment rate for ASCs and non-listed hospitals can be determined as follows:

For services rendered before January 1, 2013: APC relative weight x adjusted conversion factor x 1.22 workers' compensation multiplier pursuant to Section 9789.30(x).

For services rendered on or after January 1, 2013: APC relative weight x adjusted conversion factor x 1.22 workers' compensation multiplier for non-listed hospital outpatient departments and 0.82 workers' compensation multiplier for ambulatory surgical centers, pursuant to Section 9789.30(x).

(B) For services rendered before February 15, 2006, Table B in Section 9789.35 contains an “adjusted conversion factor” which incorporates the standard conversion factor, wage index and inflation factor.

For services rendered on or after February 15, 2006, table B in Section 9789.35 contains an “adjusted conversion factor” which incorporates the standard conversion factor, wage index, rural SCH adjustment factor, and inflation factor, as described in CMS' 2006 Hospital Outpatient Prospective Payment System final rule of November 10, 2005, published in the Federal Register (CMS-1501-FC, 70 FR 68516), at page 68556.

The maximum payment rate for the listed hospital outpatient departments can be determined as follows:

APC relative weight x adjusted conversion factor x 1.22 workers' compensation multiplier pursuant to Section 9789.30(x)

(2) Procedure codes for drugs and biologicals with status code indicator “G”:

For services rendered before January 1, 2013: APC payment rate x 1.22 workers' compensation multiplier pursuant to Section 9789.30(x)

For services rendered on or after January 1, 2013: APC payment rate x 1.22 workers' compensation multiplier for hospital outpatient departments and 0.82 workers' compensation multiplier for ambulatory surgical centers, pursuant to Section 9789.30(x).

(3) Procedure codes for devices with status code indicator “H”:

Documented paid cost, plus an additional 10% of the hospital outpatient department's or ASC's documented paid cost, net of immediate and anticipated price adjustments based upon the hospital outpatient department's or ASC's prior calendar year's usage for comparable devices, not to exceed a maximum of $ 250.00, plus any sales tax and/or shipping and handling charges actually paid.

(4) Procedure codes for drugs and biologicals with status code indicator “K”:

For services rendered before January 1, 2013: APC payment rate x 1.22 workers' compensation multiplier pursuant to Section 9789.30(x).

For services rendered on or after January 1, 2013: APC payment rate x 1.22 workers' compensation multiplier for hospital outpatient departments and 0.82 workers' compensation multiplier for ambulatory surgical centers, pursuant to Section 9789.30(x).

(5) For services rendered on or after March 1, 2009: Procedure codes for blood and blood products with status code indicator “R”:

For services rendered before January 1, 2013: APC payment x 1.22 workers' compensation multiplier pursuant to Section 9789.30(x).

For services rendered on or after January 1, 2013: APC payment rate x 1.22 workers' compensation multiplier for hospital outpatient departments and 0.82 workers' compensation multiplier for ambulatory surgical centers, pursuant to Section 9789.30(x).

(6) For services rendered on or after March 1, 2009: Procedure codes for brachytherapy services with status code indicator “U”:

Documented paid cost, plus an additional 10% of the hospital outpatient department's or ASC's documented paid cost, net of immediate and anticipated price adjustments based upon the hospital outpatient department's or ASC's prior calendar year's usage for comparable devices, not to exceed a maximum of $ 250.00, plus any sales tax and/or shipping and handling charges actually paid.

For services rendered on or after April 15, 2010 and before January 1, 2013: Procedure codes for brachytherapy services with status code indicator “U”:

APC payment x 1.22 workers' compensation multiplier pursuant to Section 9789.30(x).

For services rendered on or after January 1, 2013: APC payment rate x 1.22 workers' compensation multiplier for hospital outpatient departments and 0.82 workers' compensation multiplier for ambulatory surgical centers, pursuant to Section 9789.30(x).

(b) Alternative payment methodology. In lieu of the maximum allowable fees set forth under (a), the maximum allowable fees for a facility meeting the requirements in subdivisions (c)(1) through (c)(5) will be determined as follows:

(1) Standard payment:

(A) For services rendered before March 1, 2008, CTP codes 99281-99285 and CPT codes 10021-69990 with status code indicators “S”, “T”, “X” or “V”:

For services rendered on or after March 1, 2008, use: CPT codes 99281-99285 and CPT codes 10021-69990 with status code indicators “S”, “T”, “X”, “V”, or “Q”. Status code indicator “Q” must qualify for separate payment.

For services rendered on or after March 1, 2009, use: CPT codes 99281-99285 and CPT codes 10021-69990 with status code indicators “S”, “T”, “X”, “V”, “Q1”, “Q2”, or “Q3”. Status code indicators “Q1”, “Q2”, and “Q3” must qualify for separate payment.

For services rendered before January 1, 2013: APC relative weight x adjusted conversion factor x 1.20 workers' compensation multiplier, pursuant to Section 9789.30(x). See Section 9789.39(b) for the APC relative weight by date of service.

For services rendered on or after January 1, 2013: APC relative weight x adjusted conversion factor x 1.20 workers' compensation multiplier for hospital outpatient departments and 0.80 workers' compensation multiplier for ambulatory surgical centers, pursuant to Section 9789.30(x).

For services rendered on or after February 15, 2006, by rural SCH hospitals, use: APC relative weight x adjusted conversion factor x 1.071 x 1.20 workers' compensation multiplier, pursuant to Section 9789.30(x). See Section 9789.39(b) for the APC relative weight by date of service.

(B) Procedure codes for drugs and biologicals with status code indicator “G”:

For services rendered before January 1, 2013: APC payment rate x 1.20 workers' compensation multiplier pursuant to Section 9789.30(x).

For services rendered on or after January 1, 2013: APC payment rate x 1.20 workers' compensation multiplier for hospital outpatient departments and 0.80 workers' compensation multiplier for ambulatory surgical centers, pursuant to Section 9789.30(x).

(C) Procedure codes for devices with status code indicator “H”:

Documented paid cost, plus an additional 10% of the hospital outpatient department's or ASC's documented paid cost, net of immediate and anticipated price adjustments based upon the hospital outpatient department's or ASC's prior calendar year's usage for comparable devices, not to exceed a maximum of $ 250.00, plus any sales tax and/or shipping and handling charges actually paid.

(D) Procedure codes for drugs and biologicals with status code indicator “K”

For services rendered before January 1, 2013: APC payment rate x 1.20 workers' compensation multiplier pursuant to Section 9789.30(x).

For services rendered on or after January 1, 2013: APC payment rate x 1.20 workers' compensation multiplier for hospital outpatient departments and 0.80 workers' compensation multiplier for ambulatory surgical centers, pursuant to Section 9789.30(x).

(E) For services rendered on or after March 1, 2009: Procedure codes for blood and blood products with status code indicator “R”:

For services rendered before January 1, 2013: APC payment x 1.20 workers' compensation multiplier pursuant to Section 9789.30(x).

For services rendered on or after January 1, 2013: APC payment rate x 1.20 workers' compensation multiplier for hospital outpatient departments and 0.80 workers' compensation multiplier for ambulatory surgical centers, pursuant to Section 9789.30(x).

(F) For services rendered on or after March 1, 2009: Procedure codes for brachytherapy services with status code indicator “U”:

Documented paid cost, plus an additional 10% of the hospital outpatient department's or ASC's documented paid cost, net of immediate and anticipated price adjustments based upon the hospital outpatient department's or ASC's prior calendar year's usage for comparable devices, not to exceed a maximum of $ 250.00, plus any sales tax and/or shipping and handling charges actually paid.

For services rendered on or after April 15, 2010 and before January 1, 2013: Procedure codes for brachytherapy services with status code indicator “U”:

APC payment x 1.20 workers' compensation multiplier pursuant to Section 9789.30(x).

For services rendered on or after January 1, 2013: APC payment rate x 1.20 workers' compensation multiplier for hospital outpatient departments and 0.80 workers' compensation multiplier for ambulatory surgical centers, pursuant to Section 9789.30(x).

(2) Additional payment for high cost outlier case:

[(Facility charges x cost-to-charge ratio) - (standard payment x 2.6)] x .50

For services rendered on or after July 15, 2005, if (Facility charges x cost-to-charge ratio) > (standard payment + outlier threshold), additional payment = [(Facility charges x cost-to-charge ratio) - (standard payment x 1.75)] x .50

For services rendered on or after July 15, 2005, the outlier threshold is specified in the Federal Register notices announcing revisions in the Medicare payment rates. See Section 9789.39(b) for the Federal Register reference that defines the outlier threshold by date of service.

(3) For services rendered before March 1, 2009: In determining the additional payment, the facility's charges and payment for devices with status code indicator “H” shall be excluded from the computation.

For services rendered on or after March 1, 2009: In determining the additional payment, the facility's charges and payment for devices with status code indicator “H” and for brachytherapy services with status code indicator “U” shall be excluded from the computation.

For services rendered on or after April 15, 2010: In determining the additional payment, the facility's charges and payment for devices with status code indicator “H” shall be excluded from the computation.

(c) The following requirements shall be met for election of the alternative payment methodology:

(1) A facility seeking to be paid for high cost outlier cases under subdivision 9789.33(b) must file a written election using DWC Form 15 “Election for High Cost Outlier,” contained in Section 9789.37 with the Division of Workers' Compensation, Medical Unit (Attention: OMFS-Outpatient). P.O. Box 71010, Oakland, CA 94612. The form must be post-marked by March 1 of each year and shall be effective for one year commencing with services furnished on or after April 1 of the year in which the election is made.

(2) The maximum allowable fees applicable to a facility that does not file a timely election satisfying the requirements set forth in this subdivision and Section 9789.37 shall be determined under subdivision (a).

(3) The maximum allowable fees applicable to a hospital that does not participate under the Medicare program shall be determined under subdivision (a).

(4) The cost-to-charge ratio applicable to a hospital participating in the Medicare program shall be the hospital's cost-to-charge ratio used by the Medicare fiscal intermediary to determine high cost outlier payments under 42 C.F.R. § 419.43(d), which is incorporated by reference, as contained in Section 9789.38 Appendix X. The cost-to-charge ratio being used by the intermediary for services furnished on February 15 of the year the election is filed shall be included on the hospital's election form.

(5) The cost-to-charge ratio applicable to an ambulatory surgery center shall be the ratio of the facility's total operating costs to total gross charges during the preceding calendar year. Total Operating Costs are the direct costs 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. Total gross charges are defined as the facility's total usual and customary charges to all patients and third-party party payers before reductions for contractual allowances, bad debts, courtesy allowances and charity care. The facility's election form, as contained in Section 9789.37 shall include a completed Annual Utilization Report of Specialty Clinics filed with Office of Statewide Health Planning and Development (OSHPD) for the preceding calendar year, which is incorporated by reference. The facility's election form shall further include the facility's total operating costs during the preceding calendar year, the facility's total gross charges during the preceding calendar year, and a certification under penalty of perjury signed by the Chief Executive Officer and a Certified Public Accountant, as to the accuracy of the information. Upon request from the Administrative Director, an independent audit may be conducted at the expense of the ASC. (Note: While ASCs may not typically file Annual Utilization Report of Specialty Clinics with OSHPD, any ASC applying for the alternative payment methodology must file the equivalent, subject to the Division of Workers' Compensation's audit.) A copy of the Annual Utilization Report of Specialty Clinics may be obtained at OSHPD's website at http://www.oshpd.ca.gov/HID/HID/clinic/util/index.htm#Forms or upon request to the Division of Workers' Compensation, Medical Unit (Attention: OMFS-Outpatient), P.O. Box 71010, Oakland, CA 94612.

(6) Before April 1 of each year the AD shall post a list of those facilities that have elected to be paid under this paragraph and the facility-specific cost-to-charge ratio that shall be used to determine additional fees allowable for high cost outlier cases. The list shall be posted on the Division of Workers' Compensation website: http://www.dir.ca.gov/dwc/dwc_home_page.htm or is available upon request to the Division of Workers' Compensation, Medical Unit (Attention: OMFS-Outpatient), P.O. Box 71010, Oakland, CA 94612.

(d) Any ambulatory surgical center that believes its cost-to-charge ratio in connection with its election to participate in the alternative payment methodology for high cost outlier cases under Section 9789.33(b) was erroneously determined because of error in tabulating data may request the Administrative Director for a re-determination of its cost-to-charge ratio. Such requests shall be in writing, shall state the alleged error, and shall be supported by written documentation. Within 30 days after receiving a complete written request, the Administrative Director shall make a redetermination of the cost-to-charge ratio or reaffirm the published cost-to-charge ratio.

(e) The OPPS rules in 42 C.F.R § 419.44 regarding reimbursement for multiple procedures are incorporated by reference as contained in Section 9789.38 Appendix X.

(f) The OPPS rules in 42 C.F.R. §§ 419.62, 419.64, and 419.66 regarding transitional pass-through payments for innovative medical devices, drugs and biologicals shall be incorporated by reference, as contained in Section 9789.38 Appendix X, except that payment for these items shall be in accordance with subdivisions (a) or (b) as applicable.

(g) The payment determined under subdivisions (a) and (b) include reimbursement for all of the included cost items specified in 42 CFR §419.2(b)(1)-(12), which is incorporated by reference, as contained in Section 9789.38 Appendix X.

(h) The maximum allowable fee shall be determined without regard to the cost items specified in 42 C.F.R. § 419.2(c)(1), (2), (3), (4), and (6), as contained in Section 9789.38 Appendix X. Cost item set forth at 42 C.F.R. § 419.2(c)(5), as contained in Section 9789.38 Appendix X, is payable pursuant to Section 9789.32(c)(1). Cost items set forth at 42 C.F.R. § 419.2(c)(7) and (8), as contained in Section 9789.38 Appendix X, are payable pursuant to Section 9789.32(c)(2).

(i) The maximum allowable fees shall be determined without regard to the provisions in 42 C.F.R. § 419.70.

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 section, transmitted to OAL 4-30-2004 and filed 6-15-2004 (Register 2004, No. 25).

3. Change without regulatory effect amending subsections (c)(1), (c)(5) and (c)(6) filed 10-18-2006 pursuant to section 100, title 1, California Code of Regulations (Register 2006, No. 42).

4. 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).

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