CMS Stuns Pulmonary Community with Significant Drop in Payment for Pulmonary Rehabilitation

 Published: November 4, 2016

By: Steve Bowden


The Centers for Medicare and Medicaid Services (CMS) has announced final rules that update payments to hospitals under the Hospital Outpatient Prospective Payment System beginning Jan. 1, 2017 (CY 2017). These rules include payment for Pulmonary Rehabilitation.

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In setting payment rates under HOPPS, CMS assigns a Status Indicator to each code to determine how payment will be made (e.g., conditional packaging, discounting, separately payable, etc.). For years 2010 through 2013, CMS assigned the status indicator “S” (Not Discounted when Multiple; separate APC payment when performed with other services) to codes associated with pulmonary rehabilitation services (e.g., G0424 for patients with moderate, severe and very severe COPD and G0237, G0238 and G0239 for patients who do not meet the COPD criteria). The “S” indicator is similar to that assigned for cardiac rehabilitation codes. Without explanation, beginning in CY 2015 and through the proposed rates for CY 2017, CMS changed the Status Indicator for these codes to “Q1” (Conditional Packaging; not separately paid when performed with other services) which resulted in higher payment rates from previous years.

During the comment period, several commenters supported the proposed rate increase for FY 2017 while other commenters suggested the “Q1” Status Indicator was inappropriate because the payment for pulmonary rehabilitation was established under a statutory provision unlike other services with a similar designation. In a totally unexpected move, CMS re-evaluated the “Q1” indicator and switched it back to “S”, which resulted in a dramatic decrease from current and proposed rates for CY 2017. The following table outlines the impact of CMS’ decision. As a result of the changes, the proposed Ambulatory Payment Classification group to which these codes were to be assigned has also changed.

  • G0237 — Therapeutic procedures to increase strength or endurance of respiratory muscles, face to face, one on one, each 15 minutes (includes monitoring)
  • G0238 — Therapeutic procedures to improve respiratory function, other than described by G0237, one on one, face to face, per 15 minutes (includes monitoring)
  • G0239 — Therapeutic procedures to improve respiratory function or increase strength or endurance of respiratory muscles, two or more individuals (includes monitoring)
  • G0424 — Pulmonary Rehabilitation, including exercise (includes monitoring), one hour, per session, up to two sessions per day
HCPCS Code CY ’16 Rate CY ’16 SI and APC CY ’17 Rate Proposed CY ’17 Proposed SI and APC CY ’17 Rate Final CY ’17 Final SI and APC
G0237 $91.18 Q1 – 5734 $265.56 Q1 – 5735 $ 28.37 S – 5732
G0238 $55.94 Q1 – 5733 $161.29 Q1 – 5791 $ 28.37 S – 5732
G0239 $30.51 Q1 – 5732 $95.66 Q1 – 5734 $ 28.37 S – 5732
G0424 $55.94 Q1 – 5733 $161.29 Q1 – 5791 $ 54.53 S – 5733

As you can see from the changes, the reductions came as a shock to the pulmonary community. According to CMS, changing the Status Indicator in the final rule to “S” made it necessary to re-evaluate the claims data which resulted in significantly lower geometric mean costs when compared to the proposed “Q1” indicator.

AARC and other pulmonary organizations and societies, including the COPD Coalition and COPD Foundation, are thoroughly reviewing these changes and will work together in determining what actions we will take to address this disturbing outcome with CMS. A public comment period is open through Dec. 31, 2016.

Email with questions or comments, we’d love to hear from you.

Steve Bowden

Steve Bowden is AARC’s Internet Coordinator. He has been designing and developing websites for the association since 1996.

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