Hospital Inpatient1
According to CMS, an inpatient admission occurs when a patient is expected to need two or more midnights of medically necessary hospital care. The doctor must order such admission, and the hospital must formally admit the patient in order for the episode to become an inpatient episode. Medicare pays for inpatient services under Part A using the Medicare Severity-Diagnosis Related Group (MS-DRG) within the inpatient prospective payment system (IPPS). MS-DRGs are prospective payments that bundle all services into a single payment plus a possible NTAP and outlier payment. In the context of ABECMA and BREYANZI, this primarily includes MS-DRG-018 and a potential outlier payment, as no NTAP currently exists for either product. The IPPS primarily pays fixed per-discharge rates covering expenses during an inpatient illness episode. Medicare’s per discharge IPPS payments are derived through a series of adjustments applied to separate operating and capital base payment rates. The two base rates are adjusted to reflect geographic factors, patient case mix, facility characteristics, and other factors recognized under Medicare’s payment system.
Hospital Outpatient Department (HOPD)2
According to CMS, any hospital services can be considered outpatient if the physician hasn’t written an order to admit the patient to a hospital as an inpatient. In these cases, the patient is an outpatient even if they spend the night at the hospital. Note that under the Medicare provider-based rules, it is possible for ‘one' hospital to have multiple inpatient campuses and outpatient locations.
Beginning in August of 2000, most services and items provided in the HOPD setting are paid for under the outpatient prospective payment system (OPPS). Under this system, CMS groups services described by Healthcare Common Procedure Coding System (HCPCS) codes into ambulatory payment classifications (APCs). Services within the same APC have similar cost and clinical characteristics and are paid the same amount. Some items and services, such as pass-through devices and drugs, are required by statute to be paid separately under the OPPS. Therefore, these items and services are not part of an APC payment bundle.