Hospital Reimbursement – Differences
Between Medicare and BWC
The two tables below provide a summary of areas where the Ohio Bureau of Workers’ Compensation
(BWC) differs from Medicare for reimbursement of hospital inpatient and outpatient services. Use this document as supplemental material to support Ohio Administrative Code Rule 4123-6-37 Payment
.1,
of Hospital Inpatient Services, and Rule 4123-6-37 Payment of Hospital Outpatient Services, for the
.2,
effective dates specified at the beginning of each table.

4123-6-37.1 Payment of Hospital Inpatient Services
Effective for Discharge Dates from Feb. 1, 2011, to Jan. 31, 2012
Area
Payment adjustment factors

Medicare
100 percent of the Medicare rate (Includes both the Medicare portion and the beneficiary portion) BWC
• 120 percent of inpatient

•
•
•

prospective payment system
(IPPS) rate for inliers (non-outlier bills). 180 percent of IPPS rate for outliers Additional 0.25 percent adjustment to restore Medicare’s market basket adjustment
Additional 2.9 percent adjustment to restore
Medicare’s documentation and coding adjustment

Hospital acquired conditions
(HACs) provision

Reduces IPPS payments when hospitals meet the HAC criteria

Excludes the HAC provision

Direct graduate medical education per diem (DGME)

Does not provide DGME per diem payments under IPPS

Provides a per diem add-on payment for DGME for eligible providers

Does not reduce IPPS payments

Does not apply DGME per diem addon payments to outlier bills

Governor John R. Kasich
Administrator/CEO Stephen Buehrer

4123-6-37.2 Payment of Hospital Outpatient Services
Effective for Dates of Service from April 1, 2011, to March 31, 2012
Area
Payment adjustment factors

Medicare
100 percent of the Medicare rate (Includes both the Medicare portion and the beneficiary portion) Ohio BWC
• 197 percent of Medicare outpatient

•
•

•
•

prospective payment system (OPPS) rate
(Includes clinical lab fee schedule (CLFS) and Medicare physician fee schedule
(MPFS), for all facilities except children’s hospitals) 253 percent of the Medicare OPPS rate
(Includes CLFS and MPFS, for children’s hospitals) Additional 0.25 percent adjustment to
APC paid services to restore market basket adjustment mandated under the
ACA
Additional 1.75 percent adjustment to
CLFS services to restore the productivity adjustment mandated under the ACA
Additional 30.78 percent adjustment to restore the MPFS payment rates to the
2010 reimbursement level

Multiple procedure payment reduction of therapy services

20 percent reduction to the practice expense component of the service relative value unit
(RVU) under the MPFS

25 percent reduction to the practice expense component of the service RVU under the
MPFS

Payment status indicator A
Items – fee schedule items

Reimbursed under the Medicare clinical lab fee schedule,
Medicare physician fee schedule or carrier priced

Reimbursed under the Medicare clinical lab fee schedule, Medicare physician fee schedule or BWC’s customized fee schedule

Not reimbursed under OPPS

Includes a select set of Medicare noncovered services in its benefit package

Medicare non-covered services

Table 3 of rule 4123-6-37 lists BWC’s
.2
customized fee schedule.

Example: unattended electrical stimulation
(CPT code 97014)
Table 4 of rule 4123-6-37 lists these
.2
procedures, covered services and supplies.

Vocational rehabilitation services Not included in the Medicare benefit package

Uses BWC specific W-codes (Level III HCPCS codes) for vocational rehabilitation services
Table 2 of rule 4123-6-37 lists the covered
.2
vocational rehabilitation services.

Outlier reconciliation process

Grants the Medicare administrative contractors the ability to execute an outlier reconciliation process

Will not execute the Medicare outlier reconciliation process

Inpatient only services

Does not provide payment for services that are designated as inpatient only with payment status indicator C

Reimburses managed care organizationapproved inpatient only services at reasonable cost
Reasonable cost is calculated as allowed charge * hospital overall outpatient cost-tocharge ratio as indicated in the applicable
Medicare outpatient provider specific file.
BWC medical policy will release a policy on inpatient only procedures.

Hold harmless calculation

Executes the hold harmless provision on a quarterly basis with an end of year reconciliation process Executes the hold harmless provision at the bill level
Will not execute a reconciliation process
Provision applies only to eligible line items identified by the payment status indicator
Eligible payment status indicators include G,
H, K, P R, S, T, U, V and X.
,

Integrated outpatient code editor (I/OCE)

Uses the I/OCE as published in the applicable quarterly program transmittal Uses the I/OCE but will bypass 10 edits

Devices provided at no or partial cost (FB/FC Modifier) provision Reduces the APC payment when hospitals apply modifier FB or FC as warranted

Excludes this provision

Table 1 of rule 4123-6-37 provides the list of
.2
bypassed (deactivated) edits.

Does not allow modifiers FB and FC
Bypassed the I/OCE edit #75

Critical Access Hospitals
(CAHs)

Excluded from OPPS

Processes CAH bills through the I/OCE
Reimburses payable line items at 101 percent of cost
Cost is determined as allowed charge * overall outpatient cost to charge ratio as provided in the Medicare outpatient provider specific file (OPSF).
If the provider is not included in the OPSF
,
BWC uses the state default cost to charge ratios as published in the OPPS final rule.
Will apply the applicable payment adjustment factor to 101 percent of the cost figure

Non-Medicare Providers

n/a

Non-Medicare hospitals are those that do not participate in the Medicare program, do not have a Medicare number or Online Survey,
Certification and Reporting (OSCAR) number and do not submit a cost report to Medicare.
Therefore, the pricing factors required under
OPPS are not present.
Processes facility bills through the I/OCE prior to pricing to determine payable line items
Reimburses these facilities at 47 percent of the allowed billed charges for all payable line items Governor John R. Kasich
Administrator/CEO Stephen Buehrer
April 2011