CMS Pub. 100-04, ch. 4, § 10.4

Under the OPPS, packaged services are items and services that are considered to be an

integral part of another service that is paid under the OPPS. No separate payment is

made for packaged services, because the cost of these items and services is included in

the APC payment for the service of which they are an integral part. For example, routine

supplies, anesthesia, recovery room use, and most drugs are considered to be an integral

part of a surgical procedure so payment for these items is packaged into the APC

payment for the surgical procedure.

A. Packaging for Claims Resulting in APC Payments

If a claim contains services that result in an APC payment but also contains packaged

services, separate payment for the packaged services is not made since payment is

included in the APC. However, charges related to the packaged services are used for

outlier and Transitional Corridor Payments (TOPs) as well as for future rate setting.

Therefore, it is extremely important that hospitals report all HCPCS codes consistent with

their descriptors; CPT and/or CMS instructions and correct coding principles, and all

charges for all services they furnish, whether payment for the services is made separately

paid or is packaged.

B. Packaging for Claims Resulting in No APC Payments

If the claim contains only services payable under cost reimbursement, such as corneal

tissue, and services that would be packaged services if an APC were payable, then the

packaged services are not separately payable. In addition, these charges for the packaged

services are not used to calculate TOPs.

If the claim contains only services payable under a fee schedule, such as clinical

diagnostic laboratory tests, and also contains services that would be packaged services if

an APC were payable, the packaged services are not separately payable. In addition, the

charges are not used to calculate TOPs.

If a claim contains services payable under cost reimbursement, services payable under a

fee schedule, and services that would be packaged services if an APC were payable, the

packaged services are not separately payable. In addition, the charges are not used to

calculate TOPs payments.

C. Packaging Types Under the OPPS

1. Unconditionally packaged services are services for which separate payment is never

made because the payment for the service is always packaged into the payment for other

services. Unconditionally packaged services are identified in the OPPS Addendum B

with status indictor of N. See the OPPS Web site at

http://www.cms.hhs.gov/HospitalOutpatientPPS/ for the most recent Addendum B

(HCPCS codes with status indicators). In general, the charges for unconditionally

packaged services are used to calculate outlier and TOPS payments when they appear on

a claim with a service that is separately paid under the OPPS because the packaged

service is considered to be part of the package of services for which payment is being

made through the APC payment for the separately paid service.

2. STV-packaged services are services for which separate payment is made only if there

is no service with status indicator S, T, or V reported on the same claim. If a claim

includes a service that is assigned status indicator S, T, or V reported on the same claim

as the STV- packaged service, the payment for the STV-packaged service is packaged

into the payment for the service(s) with status indicator S, T, V and no separate payment

is made for the STV-packaged service. STV-packaged services are assigned status

indicator Q1. See the OPPS Webpage at http://www.cms.hhs.gov/HospitalOutpatientPPS/

for identification of STV-packaged codes.

3. T-packaged services are services for which separate payment is made only if there is

no service with status indicator T reported on the same claim. When there is a claim that

includes a service that is assigned status indicator T reported on the same claim as the T-packaged service, the payment for the T-packaged service is packaged into the payment

for the service(s) with status indicator T and no separate payment is made for the T-packaged service. T-packaged services are assigned status indicator Q2. See the OPPS

Web site at http://www.cms.hhs.gov/HospitalOutpatientPPS/ for identification of T-packaged codes.

4. A service that is assigned to a composite APC is a major component of a single

episode of care. The hospital receives one payment through a composite APC for

multiple major separately identifiable services. Services mapped to composite APCs are

assigned status indicator Q3. See the discussion of composite APCs in section 10.2.1.

5. Q4 services are assigned to laboratory HCPCS codes that appear on the Clinical

Laboratory Fee Schedule (CLFS). Status indicator Q4 designates packaged APC

payment if billed on the same claim as a HCPCS code assigned status indicator “J1,”

“J2,” “S,” “T,” “V,” “Q1,” “Q2,” or “Q3.” When a Q4 service is not billed on the same

claim as another separately payable service then the IOCE automatically changes their

status indicator to “A” and separate payment is made at the CLFS payment rate.

6. J1 services are assigned to comprehensive APCs. Payment for all adjunctive services

reported on the same claim as a J1 service is packaged into payment for the primary J1

service. See the discussion of comprehensive APCs in section 10.2.3.

7. J2 services are assigned to comprehensive APCs when a specific combination of

services are reported on the claim. Payment for all adjunctive services reported on the

same claim as a J2 service is packaged into payment for the J2 service when certain

conditions are met. See the discussion of comprehensive APCs in section 10.2.3.