Georgia Medicare Outpatient Hospital Services Benefit

::: hero

By Brevy Care Team · Last verified May 13, 2026

Medicare hospital outpatient services are one of the most consequential and most misunderstood categories of Part B coverage. When a Georgia beneficiary walks into an emergency department at Piedmont Atlanta and is sent home six hours later, that visit is a hospital outpatient encounter paid under the Outpatient Prospective Payment System (OPPS). When the same beneficiary is placed in "observation" at Memorial Health in Savannah for thirty-six hours and then discharged without being formally admitted, that stay is also hospital outpatient, paid under OPPS, and triggers Part B cost-sharing rather than the Part A hospital deductible. When that beneficiary then needs a hip replacement at Wellstar Kennestone, the difference between the procedure being performed as inpatient surgery and as outpatient surgery determines whether Medicare pays the hospital under the Inpatient Prospective Payment System (IPPS) or under OPPS, and whether the beneficiary owes the Part A inpatient deductible or a Part B coinsurance amount capped at the inpatient deductible per service.

This guide explains the federal statutory architecture that produced OPPS, the Ambulatory Payment Classification (APC) groups that determine hospital payment, the cost-sharing rules that determine what Georgia beneficiaries owe, the site-neutral payment reform enacted by Section 603 of the Bipartisan Budget Act of 2015, the 340B drug pricing program and its tumultuous history through the AHA v. Becerra Supreme Court ruling, the Two-Midnight Rule that governs the inpatient versus outpatient admission decision, the NOTICE Act of 2015 that requires hospitals to give Medicare beneficiaries a written Medicare Outpatient Observation Notice when observation services exceed twenty-four hours, the No Surprises Act protections against balance billing in hospital outpatient settings, and how Georgia beneficiaries actually access hospital outpatient services across Emory Healthcare, Piedmont Healthcare, Wellstar Health System, Northeast Georgia Health System, Memorial Health, AU Medical Center, Atrium Health Navicent, Phoebe Putney Health System, Grady Health System, and the state's thirty-seven critical access hospitals serving rural Georgia. We will work through six detailed case examples and fourteen common mistakes that cost Georgia families thousands of dollars every year. :::

::: callout Key Takeaways

1. Medicare hospital outpatient services are covered under Section 1861(s)(2)(B) of the Social Security Act and paid under the Outpatient Prospective Payment System established by Section 1833(t) of the Social Security Act and codified at 42 CFR Part 419. OPPS took effect August 1, 2000, established by Section 4523 of the Balanced Budget Act of 1997.

2. Hospitals are paid for outpatient services using Ambulatory Payment Classification (APC) groups. There are roughly 700+ APCs covering everything from emergency department visits and observation services through ambulatory surgery, imaging, infusion therapy, and minor procedures. Each APC has a national unadjusted payment rate that gets wage-index adjusted for the hospital's geographic location.

3. The Bipartisan Budget Act of 2015 Section 603 created site-neutral payment for off-campus hospital outpatient departments (provider-based departments, or PBDs) that began billing on or after November 2, 2015. New off-campus PBDs are now paid at Medicare Physician Fee Schedule (MPFS) rates rather than full OPPS rates, eliminating much of the financial incentive that drove rapid hospital acquisition of physician practices.

4. The 340B Drug Pricing Program under Section 340B of the Public Health Service Act allows qualifying hospitals (disproportionate share hospitals, critical access hospitals, sole community hospitals, rural referral centers, free-standing cancer hospitals, and children's hospitals) to purchase outpatient drugs at deeply discounted prices. After the Supreme Court's 2022 ruling in American Hospital Association v. Becerra invalidated CMS's 2018 reduced payment policy, 340B drugs in OPPS are now paid at ASP plus 6 percent, the same rate as non-340B drugs, for calendar year 2024 and beyond.

5. Hospital observation status is outpatient. A beneficiary in observation pays Part B cost-sharing (20 percent coinsurance after the Part B deductible) for each service, capped per service at the Part A inpatient deductible. Observation days do not count toward the three-day inpatient qualifying stay required for Medicare Skilled Nursing Facility (SNF) coverage under Section 1861(i) of the Social Security Act.

6. The NOTICE Act of 2015 (Public Law 114-42) and the implementing regulation at 42 CFR 489.20(y) require hospitals to provide a written Medicare Outpatient Observation Notice (MOON) to any beneficiary receiving observation services as an outpatient for more than twenty-four hours. The MOON must be delivered within thirty-six hours of the start of observation services and must explain that the beneficiary is an outpatient, not an inpatient, and what that means for cost-sharing and SNF eligibility.

7. The Two-Midnight Rule at 42 CFR 412.3 governs the inpatient admission decision. As a general rule, hospital stays expected to span at least two midnights are appropriate for inpatient admission; shorter stays should be billed as outpatient (observation or other hospital outpatient) unless the physician documents a specific clinical reason inpatient admission is required despite the shorter expected duration.

8. Georgia is served by Palmetto GBA as the Medicare Administrative Contractor (MAC) for Jurisdiction J (Alabama, Georgia, Tennessee). Quality of care complaints route through Kepro, the Beneficiary and Family Centered Care Quality Improvement Organization for the southeast region. State Health Insurance Assistance Program counseling is available through GeorgiaCares at 1-866-552-4464. :::

Federal Statutory and Regulatory Authority

Medicare coverage of hospital outpatient services rests on a tightly woven set of Social Security Act provisions, Code of Federal Regulations sections, and major reform statutes enacted across the past three decades. Reading these provisions in sequence is the only way to understand why hospital outpatient billing works the way it does and why a single decision about admission status can produce thousands of dollars of cost-sharing difference for a Georgia beneficiary.

Section 1861(s)(2)(B): Hospital Services Incident to Physician Services

Section 1861(s)(2)(B) of the Social Security Act is the foundational coverage authority. It defines "medical and other health services" covered under Part B to include "hospital services (including drugs and biologicals which cannot, as determined in accordance with regulations, be self-administered) incident to physicians' services rendered to outpatients." This is the statutory hook for paying hospitals for services delivered in the outpatient setting: emergency department visits when not admitted, ambulatory surgery, infusion services, observation, imaging, and outpatient diagnostic testing all fall under this language as long as they are furnished in connection with a physician service.

Section 1833(t): The Outpatient Prospective Payment System

Section 1833(t) of the Social Security Act is where the rubber meets the road. Added by Section 4523 of the Balanced Budget Act of 1997 (Public Law 105-33), Section 1833(t) directed the Secretary of Health and Human Services to establish a prospective payment system for hospital outpatient services. After lengthy rulemaking, OPPS took effect on August 1, 2000. Section 1833(t)(2) sets out the basic payment methodology: hospitals are paid for outpatient services on a per-service basis using groups of clinically similar services that have similar resource requirements. Section 1833(t)(2)(C) directs the Secretary to "establish groups of covered OPD [outpatient department] services" such that "items and services within each group are comparable clinically and with respect to the use of resources." These groups became the Ambulatory Payment Classification (APC) groups.

Section 1833(t)(3) governs the annual payment update factor. Each year the Secretary updates OPPS rates based on the hospital market basket index, with various adjustments. Section 1833(t)(6) authorizes "transitional pass-through" payments for new drugs, biologicals, and devices that meet specified criteria, so that breakthrough technologies are not penalized by being lumped into existing APC rates. Section 1833(t)(13) authorizes outlier payments for unusually high-cost cases. Section 1833(t)(16) requires geographic wage-index adjustment.

Section 1833(t)(19), added by Section 603 of the Bipartisan Budget Act of 2015, is the site-neutral provision: it requires that off-campus hospital outpatient departments that began billing under OPPS on or after November 2, 2015, be paid under a different (lower) payment methodology, generally the Medicare Physician Fee Schedule, rather than full OPPS rates.

42 CFR Part 419: The OPPS Regulation

The implementing regulations for OPPS sit at 42 CFR Part 419. Section 419.2 lays out the basic payment principles. Sections 419.21 through 419.25 establish APC payment rates and the structure of the payment system. Section 419.40 implements the site-neutral payment policy for off-campus provider-based departments. Section 419.43 governs the calculation of beneficiary copayments. Section 419.64 lays out the transitional pass-through framework. Section 419.66 governs the new technology APCs.

The companion regulation at 42 CFR 410.27 defines outpatient hospital services for Medicare coverage purposes. Section 410.27 specifies the services that are covered, the supervision requirements (general, direct, or personal physician supervision), and the conditions under which incident-to services are covered.

Section 1861(s)(2)(K) and Outpatient Drugs

Section 1861(s)(2)(K) of the Social Security Act covers drugs and biologicals administered incident to a physician's service when they cannot be self-administered. Drugs administered in the hospital outpatient setting fall under this provision and are paid under OPPS, either bundled into the APC payment for the procedure (the "packaging" methodology) or paid separately when they exceed a per-day cost threshold and meet the criteria for separate payment.

Section 1861(s)(2)(B) and 42 CFR 482 Hospital Conditions of Participation

To participate in Medicare and bill under OPPS, a hospital must meet the Conditions of Participation at 42 CFR Part 482, which cover the entire hospital including outpatient departments. The Joint Commission, DNV, and other accrediting organizations conduct deemed-status surveys that satisfy these Conditions of Participation for accredited hospitals.

Major Reform Statutes Affecting OPPS

OPPS has been refined by a sequence of major legislative actions, each of which left its mark on the current payment system:

1. Balanced Budget Act of 1997 (BBA 1997, Public Law 105-33) Section 4523 established OPPS.
2. Balanced Budget Refinement Act of 1999 (BBRA 1999, Public Law 106-113) added transitional pass-through payments and other refinements.
3. Benefits Improvement and Protection Act of 2000 (BIPA 2000, Public Law 106-554) added the per-service coinsurance cap and other beneficiary protections.
4. Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA 2003, Public Law 108-173) included multiple OPPS provisions.
5. Deficit Reduction Act of 2005 (DRA 2005, Public Law 109-171) included additional adjustments.
6. Medicare Improvements for Patients and Providers Act of 2008 (MIPPA 2008, Public Law 110-275) included OPPS provisions.
7. Affordable Care Act of 2010 (ACA 2010, Public Law 111-148) included multiple OPPS provisions including imaging payment changes and other refinements.
8. Medicare Access and CHIP Reauthorization Act of 2015 (MACRA 2015, Public Law 114-10) included OPPS provisions.
9. Bipartisan Budget Act of 2015 (Public Law 114-74) Section 603 established site-neutral payment for new off-campus provider-based departments.
10. NOTICE Act 2015 (Public Law 114-42) required hospitals to deliver the Medicare Outpatient Observation Notice (MOON).
11. 21st Century Cures Act of 2016 (Public Law 114-255) included OPPS provisions.
12. Bipartisan Budget Act of 2018 (Public Law 115-123) included OPPS provisions.
13. No Surprises Act 2020 (part of the Consolidated Appropriations Act 2021, Public Law 116-260) added surprise billing protections including for hospital outpatient services from out-of-network providers.
14. Inflation Reduction Act 2022 (Public Law 117-169) added drug pricing provisions affecting OPPS drug payments.

The Outpatient Prospective Payment System (OPPS) Payment Structure

OPPS is a per-service prospective payment system. Each individual outpatient hospital service is assigned to an APC, and the hospital is paid the APC rate for that service (adjusted for wage index and a few other factors), plus beneficiary coinsurance. Multiple services delivered on the same date of service can each generate separate APC payments, subject to packaging rules.

Ambulatory Payment Classification (APC) Groups

APCs are the building blocks of OPPS. There are roughly 700 APCs covering the full range of hospital outpatient services. Each APC represents a grouping of services that are clinically similar and have similar resource requirements. An emergency department visit at the highest acuity level might be assigned to APC 5025 (Level 5 ED Visits), a cataract surgery to APC 5491 (Level 1 Intraocular Procedures), a brain MRI with contrast to APC 5523 (Level 3 Imaging With Contrast), and observation services to APC 8011 (Comprehensive Observation Services). Each APC has a national unadjusted payment rate published annually in the OPPS Final Rule, typically issued in November.

Status Indicators

Every Healthcare Common Procedure Coding System (HCPCS) code billed under OPPS is assigned a status indicator that governs how it is treated for payment purposes. The most important status indicators are:

• S: Significant Procedure, not discounted when multiple. Paid at full APC rate.
• T: Surgical Procedure, multiple procedure reduction applies. Paid at full APC rate for the highest-ranked procedure, with subsequent procedures discounted 50 percent.
• V: Clinic or Emergency Department Visit. Paid at full APC rate.
• Q1, Q2, Q3, Q4: Conditionally packaged services. Paid separately under certain conditions.
• N: Items and services packaged into APC rates. No separate payment.
• P: Partial hospitalization services. Paid as a per diem.
• C: Inpatient procedures. Not paid under OPPS (must be performed inpatient).
• E: Items and services not covered by Medicare.
• G: Pass-through drugs and biologicals. Paid separately under transitional pass-through.
• H: Pass-through devices. Paid separately under transitional pass-through.
• K: Non-pass-through drugs and biologicals. Paid separately based on ASP plus 6 percent (with 340B carve-outs in past years).

Wage Index and Geographic Adjustment

OPPS rates are adjusted for the hospital's geographic location using the hospital wage index. The wage index reflects the relative average hourly wage in the hospital's geographic area compared to the national average. The labor-related share of the OPPS payment (typically 60 percent) is multiplied by the wage index, and the non-labor share is paid at the national rate.

For Georgia, the major Metropolitan Statistical Areas (MSAs) include Atlanta (Sandy Springs-Roswell), Augusta-Richmond County, Savannah, Athens-Clarke County, Macon-Bibb County, Columbus, and others. Rural Georgia is paid at the Georgia rural wage index.

Outlier Payments

Under Section 1833(t)(13) and 42 CFR 419.43(d), hospitals can receive additional outlier payments when the cost of a service exceeds a fixed-dollar threshold and a multiple of the APC payment. The outlier policy protects hospitals against catastrophic losses on individual cases.

Transitional Pass-Through Payments

Under Section 1833(t)(6) and 42 CFR 419.66, new drugs, biologicals, and devices that meet specified criteria can receive transitional pass-through payments for two to three years. The payment is the cost of the item minus the portion of the APC payment that already includes payment for the item. Pass-through payments allow breakthrough technologies to enter the market without being financially squeezed by the APC payment system.

Beneficiary Cost-Sharing Under OPPS

Hospital outpatient services are Part B services, so they are subject to the Part B deductible and 20 percent coinsurance. Under Section 1833(t)(8) of the Social Security Act and 42 CFR 419.41, beneficiary coinsurance for any single OPPS service is capped at the Part A inpatient deductible amount for the year. This per-service coinsurance cap was added by Section 4012 of the Balanced Budget Act of 1997 and refined by BIPA 2000, and it provides important financial protection: even for a high-cost outpatient service, the beneficiary cannot owe more than the inpatient deductible per service in coinsurance.

For most outpatient services with APC payment rates below the threshold, the coinsurance is the standard 20 percent. For high-cost services where 20 percent would exceed the inpatient deductible, the coinsurance is capped at the inpatient deductible.

The BBA 2015 Section 603 Site-Neutral Payment Reform

Section 603 of the Bipartisan Budget Act of 2015 was the most significant structural reform of OPPS since the program's inception. Its purpose was to close a payment loophole that had developed over the preceding decade: when a hospital acquired a physician practice and converted it to a hospital outpatient department, the same services delivered in the same physical location were suddenly paid at OPPS rates rather than the lower MPFS rates. This produced rapid hospital consolidation of physician practices and significant cost growth for Medicare and beneficiaries.

Off-Campus Provider-Based Departments (PBDs)

A "provider-based" department is a hospital outpatient department that is owned and operated by the hospital but located in a separate physical location from the hospital's main campus. The regulations at 42 CFR 413.65 define what qualifies as provider-based, and the regulations at 42 CFR 419.40 implement the site-neutral payment policy.

The November 2, 2015 Cutoff

Section 603 distinguishes between "excepted" off-campus PBDs and "non-excepted" off-campus PBDs. Excepted PBDs are those that were billing under OPPS before November 2, 2015 (the day after Section 603 was enacted into law). Excepted PBDs continue to be paid at full OPPS rates as long as they maintain their grandfathered status. Non-excepted PBDs (those that began billing under OPPS on or after November 2, 2015) are paid at a site-neutral rate, generally the MPFS rate plus the technical component portion that approximates a fee schedule payment.

Categories Always Excepted

Certain categories are always excepted from site-neutral and continue to receive full OPPS payment regardless of when they began billing:

1. On-campus departments (those sharing the main hospital campus or qualifying as a remote location of the hospital).
2. Dedicated emergency departments (under EMTALA).
3. Departments billing under OPPS before November 2, 2015 (grandfathered).
4. Certain rural sole community hospital outpatient departments under separate regulatory provisions.

Loss of Excepted Status

An excepted off-campus PBD can lose its grandfathered status by relocating, by expanding into new clinical service lines, or by being acquired by a different hospital. The 2017 OPPS Final Rule established specific rules governing when these changes trigger loss of excepted status, and these rules have been litigated and refined in subsequent rulemaking.

Practical Effect on Payment

The practical effect of site-neutral is significant. A clinic visit billed in an on-campus or grandfathered off-campus PBD is paid at full OPPS rates under the applicable clinic visit APC, while the same visit billed in a non-excepted off-campus PBD is paid at a substantially lower site-neutral rate. For high-volume clinic services, this difference adds up rapidly across thousands of visits per year. For beneficiaries, the effect on cost-sharing follows the payment rate: a smaller payment rate produces a smaller 20 percent coinsurance obligation.

The 340B Drug Pricing Program in OPPS

Section 340B of the Public Health Service Act (42 USC 256b), enacted in 1992, requires drug manufacturers participating in Medicaid to also sell outpatient drugs at significantly discounted prices to certain qualifying hospitals and clinics. The qualifying hospital categories are:

1. Disproportionate Share Hospitals (DSH) meeting CMS eligibility thresholds.
2. Critical Access Hospitals (CAHs).
3. Sole Community Hospitals (SCHs).
4. Rural Referral Centers (RRCs).
5. Free-standing Cancer Hospitals.
6. Children's Hospitals.

The program also serves qualifying federally qualified health centers, Ryan White HIV/AIDS Program grantees, family planning grantees, and other categories outside the hospital framework.

The 2018 CMS Reduced Payment Policy

For calendar year 2018, CMS issued a final rule reducing OPPS payment for 340B drugs to a substantially lower rate than the standard ASP plus 6 percent paid to non-340B hospitals. The rationale was that hospitals were acquiring 340B drugs at a deep discount and being paid by Medicare at the full rate, generating large spreads that did not flow back to Medicare or beneficiaries. CMS argued the payment reduction would better align Medicare payment with hospitals' actual acquisition costs. Hospital associations sued, arguing CMS exceeded its statutory authority by reducing payment for one subset of hospitals (340B participants) without conducting the survey required by Section 1833(t)(14)(A)(iii).

American Hospital Association v. Becerra (2022)

In June 2022, the Supreme Court ruled unanimously in American Hospital Association v. Becerra that the 2018 CMS payment reduction was unlawful. The Court held that Section 1833(t)(14) of the Social Security Act required CMS to either survey hospital acquisition costs (which it had not done) or to set a single payment rate for all hospitals; CMS could not establish a separate, lower rate for 340B-participating hospitals without conducting the survey. The Court remanded for further proceedings on remedy.

The 2023 CMS Remedy

In November 2023, CMS issued a final rule implementing a remedy for the 2018 to 2022 period. The rule provided a lump sum payment to affected 340B hospitals reflecting the difference between what they would have been paid at the standard rate and what they were actually paid. To maintain budget neutrality (because OPPS rates from 2018 to 2022 had been adjusted upward to offset the savings from the 340B cuts), CMS established a multi-year recoupment from non-340B hospitals starting in calendar year 2026.

Current Payment Policy (2024 and Beyond)

For calendar year 2024 and beyond, CMS pays 340B drugs in OPPS at ASP plus 6 percent, the same rate as non-340B drugs. The 340B savings flow to hospitals through their drug acquisition discount, not through differential Medicare payment.

For Georgia, the 340B program is particularly important for the state's rural hospitals, critical access hospitals, and safety-net institutions including Grady Health System in Atlanta, Phoebe Putney Health System in Albany, Memorial Health in Savannah, Atrium Health Navicent in Macon, and the network of rural CAHs across south and middle Georgia.

Observation Status vs. Inpatient Status

The single most consequential admission decision in Medicare is whether a hospital stay is classified as inpatient (covered under Part A and paid under the Inpatient Prospective Payment System) or as outpatient observation (covered under Part B and paid under OPPS). The financial difference for the beneficiary can be enormous.

Cost-Sharing Differences

For inpatient admission, the beneficiary owes the Part A inpatient deductible for the benefit period, which covers up to 60 days of hospital care. No coinsurance is owed for days 1 through 60.

For observation status, the beneficiary owes Part B cost-sharing: the Part B deductible if not already met, plus 20 percent coinsurance on each individual service. The per-service coinsurance is capped at the inpatient deductible. Because each service is billed separately, multiple services can each generate coinsurance, though for typical observation stays the total beneficiary cost-sharing usually approximates or falls below the inpatient deductible.

Skilled Nursing Facility Eligibility

The much bigger issue for many Georgia beneficiaries is Medicare SNF coverage. Under Section 1861(i) of the Social Security Act, Medicare covers SNF services only after the beneficiary has been an inpatient hospital patient for at least three consecutive days (not counting the day of discharge). Observation days do not count toward this three-day qualifying stay, even if the beneficiary is in the hospital bed for four or five days under observation.

The practical consequence is harsh: a Georgia beneficiary who needs SNF rehabilitation after a hospital stay can be denied Medicare SNF coverage entirely if those hospital days were billed as observation rather than inpatient, even if the beneficiary spent more than three days in the hospital. SNF coverage at a Georgia nursing facility is not covered by Medicare when the qualifying inpatient stay requirement is not met, potentially representing a significant multi-thousand-dollar out-of-pocket exposure.

The Two-Midnight Rule

The Two-Midnight Rule at 42 CFR 412.3 governs the admission decision. It was finalized in the FY 2014 IPPS Final Rule and has been refined in subsequent rulemaking. The rule has two main components:

1. Two-midnight benchmark: Inpatient admission is generally appropriate when the admitting physician expects that the patient will require hospital care that crosses two midnights.
2. Two-midnight presumption: Hospital stays that actually span two midnights are presumed to be appropriate for inpatient admission, providing audit protection for hospitals.

For shorter stays, the patient should generally be classified as outpatient (observation or other hospital outpatient) unless the physician documents a specific clinical reason inpatient admission is required despite the shorter expected duration. The 2016 OPPS Final Rule added "case-by-case" exception for shorter stays when the physician documents specific medical reasons.

Condition Code 44 and Status Changes

If a hospital determines, after admission but before discharge, that an inpatient admission was inappropriate, the hospital can change the patient's status from inpatient to outpatient using "Condition Code 44" billing, provided that the change is made through a Utilization Review (UR) committee decision and the physician concurs in writing. This conversion is technically retroactive and is sometimes used to correct admission errors. Changes from outpatient to inpatient go through different processes (typically a new admission order).

The NOTICE Act and the MOON (Medicare Outpatient Observation Notice)

The NOTICE Act of 2015 (Public Law 114-42, "Notice of Observation Treatment and Implication for Care Eligibility Act") was a direct legislative response to the observation status problem. Congress was hearing from beneficiaries that they were spending days in hospital beds without knowing they were not "admitted" and only finding out about the consequences (no SNF coverage, different cost-sharing) at discharge or at the SNF.

MOON Requirements

The implementing regulation at 42 CFR 489.20(y) requires:

1. The hospital must deliver the Medicare Outpatient Observation Notice (MOON) to any Medicare beneficiary receiving observation services as an outpatient for more than twenty-four hours.
2. The MOON must be delivered no later than thirty-six hours after observation services begin (or sooner if the beneficiary is transferred, discharged, or admitted as an inpatient before thirty-six hours).
3. The MOON must explain in plain language that the beneficiary is receiving services as an outpatient, not as an inpatient, and the implications for cost-sharing and Medicare benefits including SNF coverage.
4. The MOON must be signed by the beneficiary or their representative to acknowledge receipt. If the beneficiary refuses to sign, hospital staff must document the refusal.
5. The hospital must explain the MOON orally as well as deliver it in writing.

The standardized MOON form is CMS-10611, published by CMS for hospital use.

The No Surprises Act Hospital Outpatient Protections

The No Surprises Act, enacted as Division BB of the Consolidated Appropriations Act 2021 (Public Law 116-260), provides important protections against balance billing in the hospital outpatient setting. The protections apply to:

1. Emergency services delivered at any hospital, regardless of in-network or out-of-network status.
2. Non-emergency services delivered by out-of-network providers at in-network hospitals (the "ancillary services" protection covering radiologists, pathologists, anesthesiologists, neonatologists, assistant surgeons, hospitalists, intensivists, and laboratory services).
3. Air ambulance services.

For Medicare beneficiaries with traditional Medicare and a Medigap supplement, the No Surprises Act protections largely duplicate existing Medicare protections, because traditional Medicare assignment and the prohibition on balance billing already protect beneficiaries from most surprise bills. The No Surprises Act protections are more important for Medicare Advantage beneficiaries, where the network structure can create out-of-network exposure.

For Georgia beneficiaries with Medicare Advantage who receive emergency services at an out-of-network hospital, the No Surprises Act requires the plan to pay the emergency provider at the "qualifying payment amount" (QPA) and limit beneficiary cost-sharing to in-network levels. Disputes between providers and plans go through the federal Independent Dispute Resolution (IDR) process.

Palmetto GBA: The Georgia Medicare Administrative Contractor

Palmetto GBA serves as the Medicare Administrative Contractor for Jurisdiction J, which covers Alabama, Georgia, and Tennessee. As the MAC, Palmetto GBA processes all Medicare Part A and Part B claims from Georgia providers, conducts medical review and audit, issues Local Coverage Determinations (LCDs) and articles, and provides provider education.

For hospital outpatient services, Palmetto GBA processes the UB-04 institutional claims that hospitals submit for OPPS billing. Palmetto GBA also conducts the Targeted Probe and Educate (TPE) program, which reviews claims from hospitals showing aberrant billing patterns and provides education to correct errors.

Palmetto GBA can be reached at 1-877-567-9230 for provider inquiries. Georgia beneficiaries can call 1-800-MEDICARE for claims questions and to request a redetermination of a denied claim.

Quality of Care Concerns: Kepro QIO

Kepro is the Beneficiary and Family Centered Care Quality Improvement Organization (BFCC-QIO) for the southeast region, which includes Georgia. The QIO is the entity that beneficiaries call when they have a concern about the quality of care they received at a Georgia hospital, including hospital outpatient services. The QIO can review the care, request medical records, consult with peer reviewers, and issue findings.

The QIO also handles immediate advocacy for beneficiaries facing premature discharge from a hospital outpatient observation stay or other quality concerns. Kepro can be reached at 1-844-455-8708.

The Georgia Hospital Landscape

Georgia has a large network of acute care hospitals and critical access hospitals scattered across the state. The major health systems serving Georgia Medicare beneficiaries include:

Emory Healthcare

Emory Healthcare is the largest health system in Georgia, with eleven hospitals including Emory University Hospital, Emory University Hospital Midtown, Emory Saint Joseph's Hospital, Emory Decatur Hospital, Emory Hillandale Hospital, Emory Long Term Acute Care Hospital, Emory Johns Creek Hospital, Emory Saint Joseph's Atlanta, and others. Emory operates hundreds of hospital outpatient departments across metro Atlanta and surrounding counties.

Piedmont Healthcare

Piedmont Healthcare operates more than twenty hospitals across Georgia including Piedmont Atlanta Hospital, Piedmont Fayette, Piedmont Newnan, Piedmont Henry, Piedmont Mountainside, Piedmont Athens Regional, Piedmont Columbus Regional Midtown and Northside, Piedmont Augusta, Piedmont Macon Medical Center, Piedmont Macon North Hospital, and others.

Wellstar Health System

Wellstar operates eleven hospitals in Atlanta including Wellstar Kennestone Regional Medical Center, Wellstar Cobb Hospital, Wellstar Douglas Hospital, Wellstar North Fulton, Wellstar Paulding, Wellstar Spalding Regional, Wellstar West Georgia, and others.

Northeast Georgia Health System (NGHS)

NGHS operates Northeast Georgia Medical Center Gainesville, NGMC Braselton, NGMC Barrow, and NGMC Lumpkin, serving the rapidly growing North Georgia region.

Memorial Health

Memorial Health University Medical Center in Savannah is a tertiary academic medical center serving coastal Georgia and the eastern part of the state. Memorial Health Meadows Hospital in Vidalia serves southeast Georgia.

AU Medical Center (Wellstar MCG Health)

Augusta University Medical Center, now operating as Wellstar MCG Health after the 2023 affiliation, is the academic medical center for the Medical College of Georgia. It serves the Central Savannah River Area and is a Level I trauma center.

Atrium Health Navicent

Atrium Health Navicent operates the Medical Center Navicent Health in Macon along with several other facilities across central Georgia. It is the tertiary referral center for middle Georgia.

Phoebe Putney Health System

Phoebe Putney Memorial Hospital in Albany is the major hospital serving southwest Georgia. The system also operates Phoebe Worth and Phoebe Sumter.

Grady Health System

Grady Memorial Hospital in Atlanta is the safety-net hospital for the metro Atlanta region, a Level I trauma center, and a major teaching hospital affiliated with both Emory University School of Medicine and Morehouse School of Medicine.

Critical Access Hospitals

Georgia has 37 critical access hospitals (CAHs), each with no more than 25 beds, located primarily in rural areas. CAHs are paid differently from PPS hospitals. They are reimbursed at cost-based rates for both inpatient and outpatient services, not under OPPS. Georgia CAHs include Appling Healthcare, Burke Medical Center, Crisp Regional Hospital, Effingham Hospital, Elbert Memorial, Evans Memorial, Fairview Park, Habersham Medical, Hutcheson, Jeff Davis, Jefferson Hospital, Liberty Regional, Lower Oconee Community Hospital, Meadows Regional, Miller County, Mitchell County, Monroe County, Murray Medical Center, Optim Medical Center Tattnall, Putnam General, Stewart-Webster Hospital, Taylor Regional, Union General, Wayne Memorial, Wills Memorial, and others.

Rural Hospitals and Sole Community Hospitals

Several Georgia hospitals qualify as Sole Community Hospitals (SCHs) under Section 1886(d)(5)(D)(iii) of the Social Security Act, which provides enhanced payment for rural hospitals that serve as the only hospital in their community. SCHs are paid OPPS rates but receive certain additional payment protections.

Worked Example 1: Margaret, 78, Atlanta, Hospital Outpatient Cataract Surgery at Piedmont Atlanta

Margaret is 78 years old, lives in Buckhead, has traditional Medicare with a Medigap Plan G supplement, and has been diagnosed with bilateral senile cataracts causing functionally significant vision loss. Her ophthalmologist, Dr. Patel, schedules her for cataract extraction with intraocular lens (IOL) implantation in her right eye at the Piedmont Atlanta Hospital outpatient surgery center.

The surgery is CPT 66984 (extracapsular cataract removal with IOL insertion). Piedmont Atlanta is an on-campus hospital outpatient department, so it bills under full OPPS, not site-neutral. The procedure is assigned to APC 5491 (Level 1 Intraocular Procedures).

Margaret has already met her Part B deductible for the year from earlier physician visits, so she owes 20 percent of the wage-adjusted payment. Because this is below the per-service coinsurance cap, no cap applies.

Margaret's Medigap Plan G covers the entire $453 Part B coinsurance, so her out-of-pocket cost for the facility component of the cataract surgery is $0. The physician services component is billed separately under MPFS by Dr. Patel and is also covered by Medigap Plan G after the Part B deductible.

Six weeks later, Margaret returns for her left eye cataract surgery, also at Piedmont Atlanta. The same APC, same wage index, same payment, same coinsurance, all covered by Medigap. Margaret's total out-of-pocket for both surgeries (after Medigap) is $0.

Worked Example 2: Robert, 82, Savannah, Observation Status at Memorial Health (vs. Inpatient Cost Difference)

Robert is 82, lives in Savannah, has traditional Medicare with no Medigap, and is brought to Memorial Health University Medical Center emergency department after a fall at home. He has chest pain on top of bruising and abrasions, so the ED physician orders a cardiac workup. The workup includes ECG, troponin levels, a chest x-ray, and a CT scan to rule out hip fracture. The ED physician decides to place Robert in observation status to complete the cardiac workup with serial troponins and a cardiology consult.

Robert spends approximately 36 hours in observation. The hospital delivers him a Medicare Outpatient Observation Notice (MOON) 28 hours into his stay, explaining that he is an outpatient, that observation services are paid under Part B, and that observation days do not count toward the three-day qualifying stay for Medicare SNF coverage. Robert signs the MOON.

Cardiology rules out acute coronary syndrome, the troponins are flat, the imaging shows no fracture, and the discharge plan is for Robert to return home with cardiology follow-up. He is discharged at hour 38.

Because Robert was in observation (outpatient) and not admitted as inpatient, his stay is billed under OPPS. The primary APC is APC 8011 (Comprehensive Observation Services). ED visit, imaging, and laboratory services that are not packaged into the comprehensive observation APC are billed separately under their own APCs.

Robert's Part B cost-sharing: he has met his Part B deductible earlier in the year, so he owes 20 percent of the wage-adjusted OPPS payment for each separately billable service, with per-service coinsurance capped at the Part A inpatient deductible.

Counterfactual: had Robert been admitted as inpatient, he would have owed only the Part A inpatient deductible for the benefit period, covering up to 60 days of hospital care. For shorter hospital stays, total observation cost-sharing may be lower than or comparable to the inpatient deductible depending on the services billed.

The bigger issue would arise if Robert needed SNF rehabilitation. Because observation days do not count toward the three-day inpatient qualifying stay, Robert would not be eligible for Medicare SNF coverage based on this hospital stay. If he needed SNF care, he would either need to pay out of pocket (or through a Medicaid pathway if eligible) or rely on outpatient rehabilitation at home.

Robert does not need SNF care in this case, so the consequence is limited to the cost-sharing comparison, but for many Georgia families, the SNF eligibility consequence is the larger financial issue.

Worked Example 3: Linda, 75, Macon, Chemotherapy Infusion Outpatient at Atrium Health Navicent (340B Implications)

Linda is 75 years old, lives in Macon, has traditional Medicare with a Medigap Plan F supplement (grandfathered, she enrolled before January 1, 2020), and has been diagnosed with stage II breast cancer. Her oncologist at Atrium Health Navicent prescribes a course of doxorubicin and cyclophosphamide (AC) chemotherapy followed by paclitaxel, delivered as four cycles of AC every two weeks followed by twelve weekly paclitaxel infusions.

The Medical Center Navicent Health is a 340B-participating hospital because it qualifies as a Disproportionate Share Hospital. For calendar year 2024 and beyond, after the Supreme Court ruled in AHA v. Becerra that the 2018 reduced payment policy was unlawful, CMS pays 340B drugs in OPPS at ASP plus 6 percent, the same rate as non-340B drugs.

Each cycle of AC chemotherapy involves administration of doxorubicin (paid under HCPCS J9000) and cyclophosphamide (J9070) at ASP plus 6 percent, plus the infusion administration services billed under APC 5694 (Level 4 Drug Administration). The paclitaxel weekly cycles are paid similarly under J9267.

Linda's Part B cost-sharing: she has met her Part B deductible earlier in the year. For each infusion visit, she owes 20 percent of the wage-adjusted OPPS payment for the administration APC plus 20 percent of the ASP plus 6 percent drug payment. Linda's Medigap Plan F covers the Part B deductible and all coinsurance, so her out-of-pocket cost for the chemotherapy infusion is $0.

The 340B program does not change Linda's cost-sharing. It changes the economics for Atrium Navicent: the hospital acquires the chemotherapy drugs at the 340B discount (substantially below ASP), Medicare pays the hospital at ASP plus 6 percent, and the spread between acquisition cost and Medicare payment helps Atrium Navicent fund services for low-income patients (which is the statutory purpose of the 340B program).

Worked Example 4: Charles, 80, Augusta, Hospital Outpatient MRI at AU Medical Center

Charles is 80 years old, lives in Augusta, has traditional Medicare with a Medigap Plan G supplement, and has been having intermittent headaches with brief episodes of confusion. His primary care physician orders a brain MRI with and without contrast to rule out structural lesions. Charles schedules the MRI at AU Medical Center (Wellstar MCG Health) Department of Radiology, an on-campus hospital outpatient department.

The MRI is CPT 70553 (Magnetic resonance imaging, brain, without contrast material, followed by contrast material and further sequences). The technical component is paid under OPPS APC 5523 (Level 3 Imaging with Contrast).

Charles's Part B cost-sharing: he has met his Part B deductible. He owes 20 percent of the wage-adjusted OPPS payment, covered by Medigap Plan G. The physician interpretation (CPT 70553-26) is billed separately under MPFS by the radiologist, with Charles's 20 percent coinsurance also covered by Medigap Plan G.

Total out-of-pocket for Charles: $0.

The MRI shows a small benign-appearing lesion in the left temporal lobe, recommended for follow-up imaging in six months. Charles's PCP orders the follow-up at the same facility, which will produce a similar pattern of cost-sharing.

Worked Example 5: Patricia, 73, Columbus, ED Visit Not Admitted at Piedmont Columbus

Patricia is 73 years old, lives in Columbus, has traditional Medicare with no Medigap (she has a Medicare Advantage HMO plan through Humana). She develops severe abdominal pain over four hours and her daughter drives her to the Piedmont Columbus Regional Midtown emergency department.

The ED physician evaluates her, orders blood work, urinalysis, abdominal CT with contrast, and consults general surgery. The CT shows uncomplicated diverticulitis without abscess or perforation. The surgery team recommends outpatient management with oral antibiotics, a clear liquid diet advancing to low-residue, and primary care follow-up. Patricia is discharged from the ED after approximately five hours.

Because Patricia is enrolled in Medicare Advantage, the ED visit is paid through her Humana plan, not under traditional Medicare OPPS. But the underlying clinical and billing framework is similar: the hospital bills facility charges for the ED visit (typically an APC equivalent at Level 4 or 5 ED), the imaging, the laboratory services, and pharmacy. The professional charges (ED physician, radiologist, surgery consult) are billed separately by the physicians.

Under Patricia's Medicare Advantage plan, her cost-sharing for the ED visit is a flat $90 copay, plus separate copays for imaging and labs depending on the plan's benefit design. Total out-of-pocket for the encounter: approximately $130 to $160.

Because Patricia is enrolled in a Medicare Advantage HMO and Piedmont Columbus is in her plan's network, the No Surprises Act protections are not directly triggered. If Patricia had been at an out-of-network ED, the No Surprises Act would require her plan to cover the visit at in-network cost-sharing levels and bar the hospital and physicians from balance billing her.

Worked Example 6: Henry, 85, Athens, Off-Campus PBD Site-Neutral Payment Example

Henry is 85 years old, lives in Athens, has traditional Medicare with a Medigap Plan G supplement, and has been experiencing increasing knee pain limiting his ability to walk. He sees Dr. Rodriguez, an orthopedic surgeon affiliated with Piedmont Athens Regional. Dr. Rodriguez's office is located in a building approximately three miles from the main Piedmont Athens Regional hospital campus. The building was acquired by Piedmont in 2019 and converted to a hospital outpatient department at that time.

Because the building was acquired and began billing under OPPS after November 2, 2015, it is a non-excepted off-campus provider-based department. Under Section 603 of the Bipartisan Budget Act of 2015 and 42 CFR 419.40, services delivered in this PBD are paid at the site-neutral rate, generally the MPFS rate plus the technical component portion that approximates a fee schedule payment, rather than at full OPPS rates.

Henry has a level 3 office visit (CPT 99213) with Dr. Rodriguez. In an excepted (grandfathered or on-campus) PBD, the facility component would be paid at full OPPS rates under the applicable clinic visit APC. In the non-excepted PBD where Henry is seen, the facility component is paid at the substantially lower site-neutral rate. The physician professional component (CPT 99213) is paid separately under MPFS.

Henry's Part B cost-sharing: he has met his Part B deductible. He owes 20 percent of the facility payment and 20 percent of the physician payment, both covered in full by Medigap Plan G. Henry's out-of-pocket is $0.

If Henry had been seen in an on-campus or grandfathered off-campus PBD at the same system, his cost-sharing would have been higher given the larger OPPS facility payment, but still fully covered by Medigap. The savings from site-neutral payment flow to Medicare and the trust fund, not directly to the beneficiary in this case. For Medicare Advantage beneficiaries with point-of-service cost-sharing tied to facility billed amounts, the savings can flow through to the beneficiary in some plan designs.

Fourteen Common Mistakes Georgia Beneficiaries and Families Make

Mistake 1: Assuming observation is inpatient

The most common and most expensive mistake. A beneficiary in a hospital bed receiving hospital nursing care, hospital meals, hospital physician visits, and hospital diagnostic services is naturally going to assume they have been "admitted." But unless a physician has written an inpatient admission order, the beneficiary is an outpatient, and that has implications for cost-sharing and for SNF eligibility. Always ask: "Am I admitted as inpatient, or am I in observation?" Ask early in the stay and ask again at discharge.

Mistake 2: Not reading the MOON

Hospitals are required to deliver the Medicare Outpatient Observation Notice within 36 hours when observation services exceed 24 hours. The MOON is your formal notification that you are an outpatient. Read it. Ask questions. Get clarification. The MOON is required to explain in plain language what it means to be in observation and what the cost-sharing and SNF implications are.

Mistake 3: Going to SNF without confirming three-day inpatient qualifying stay

If the hospital is discharging a Medicare beneficiary to a SNF and the beneficiary has been in observation rather than admitted as inpatient (or admitted for fewer than three days), Medicare will not cover the SNF stay. The SNF will then bill the beneficiary directly. Always confirm with the hospital case management team that the three-day qualifying stay is met before signing SNF admission paperwork.

Mistake 4: Paying balance bills from out-of-network ED physicians without challenging

The No Surprises Act protects beneficiaries from balance billing for emergency services from out-of-network physicians at any hospital. If you receive a balance bill from an out-of-network ED physician, ER radiologist, or other ancillary provider after an emergency department visit, call the federal No Surprises Help Desk at 1-800-985-3059. Do not pay the balance bill without first verifying that it complies with No Surprises Act requirements.

Mistake 5: Confusing the Part B deductible with the Part A deductible

The Part B deductible is $257 in 2026; the Part A inpatient deductible is $1,676 in 2026. Hospital outpatient services apply to the Part B deductible. Inpatient admission applies to the Part A deductible. They are separate.

Mistake 6: Assuming the per-service coinsurance cap means the beneficiary pays no more than the inpatient deductible total

The per-service coinsurance cap applies per service, not per visit or per stay. A multi-service hospital outpatient encounter (for example, an observation stay with imaging, lab work, IV medications, and observation services) can produce multiple separately-billed services each subject to its own coinsurance amount. Most of those individual coinsurance amounts will be below the cap, but they add up across services.

Mistake 7: Not understanding when 340B affects the bill

The 340B Drug Pricing Program affects what the hospital pays the manufacturer for the drug; it generally does not directly affect what the beneficiary pays in coinsurance. Beneficiary coinsurance is 20 percent of the Medicare payment amount, which is ASP plus 6 percent for both 340B and non-340B drugs in 2024 and beyond. Do not expect your hospital outpatient drug coinsurance to be lower because the hospital is 340B.

Mistake 8: Confusing on-campus and off-campus PBD

Site-neutral payment under Section 603 of the Bipartisan Budget Act of 2015 applies only to off-campus provider-based departments that began billing under OPPS after November 2, 2015. On-campus PBDs, dedicated emergency departments, and grandfathered (pre-November 2, 2015) off-campus PBDs continue to be paid at full OPPS rates. Where you are seen matters for how the facility component is paid.

Mistake 9: Assuming Medicare Advantage works the same as traditional Medicare for hospital outpatient

Medicare Advantage plans pay hospitals under network contracts that may not align directly with OPPS APC payments. Cost-sharing is governed by the Medicare Advantage plan's benefit design, which can include flat copays, percentage coinsurance, or tiered structures. Network status of the hospital and individual ancillary providers matters under MA in ways it does not matter under traditional Medicare.

Mistake 10: Not appealing a Medicare denial of hospital outpatient services

If Medicare denies a claim for hospital outpatient services, the beneficiary has appeal rights under Section 1869 of the Social Security Act through a five-level appeals process: redetermination, reconsideration, ALJ hearing, Medicare Appeals Council, and federal court. The first-level redetermination is a paper review by Palmetto GBA and is the easiest level to navigate. Filing a timely appeal preserves rights through all five levels.

Mistake 11: Not asking the hospital case management team about appeals when discharged from observation

If a beneficiary in observation believes their condition justifies inpatient admission (which would result in Medicare SNF eligibility), the beneficiary can ask the attending physician to consider inpatient admission. If the hospital declines, the beneficiary can ask the QIO (Kepro at 1-844-455-8708) to review the case. This is harder than appealing an inpatient discharge but is sometimes worth trying when SNF eligibility is at stake.

Mistake 12: Confusing OPPS with the Ambulatory Surgical Center (ASC) payment system

Hospital outpatient surgery is paid under OPPS. Freestanding ambulatory surgical center surgery is paid under the ASC payment system at 42 CFR Part 416, which uses the same APCs as OPPS but pays generally lower rates. The same procedure performed at a hospital outpatient surgical suite versus a freestanding ASC produces different facility payments and different beneficiary coinsurance.

Mistake 13: Assuming critical access hospitals (CAHs) bill the same way as PPS hospitals

Critical access hospitals are paid at 101 percent of reasonable costs for both inpatient and outpatient services, not under OPPS. Their billing and reimbursement work fundamentally differently. For Georgia beneficiaries served by one of the state's 37 CAHs, the OPPS APC framework does not apply.

Mistake 14: Not using GeorgiaCares for free help

The State Health Insurance Assistance Program (SHIP) for Georgia is GeorgiaCares, available at 1-866-552-4464. GeorgiaCares counselors can help Georgia Medicare beneficiaries understand hospital outpatient bills, file appeals, review observation status concerns, and navigate Medicare Advantage benefits. The service is free and confidential.

Frequently Asked Questions

::: accordion

What is the difference between hospital inpatient services and hospital outpatient services?

Hospital inpatient services are services delivered to a person who has been formally admitted to the hospital by a physician's order, covered under Part A and paid under the Inpatient Prospective Payment System (IPPS). Hospital outpatient services are services delivered to a person who has not been admitted, including emergency department visits, observation services, ambulatory surgery, imaging, infusion therapy, and other procedures, covered under Part B and paid under the Outpatient Prospective Payment System (OPPS).

What is OPPS?

OPPS is the Outpatient Prospective Payment System, established by Section 4523 of the Balanced Budget Act of 1997 effective August 1, 2000. Under OPPS, hospitals are paid for outpatient services on a per-service basis using Ambulatory Payment Classification (APC) groups. The payment rates are published annually in the OPPS Final Rule.

What is an APC?

An APC, or Ambulatory Payment Classification, is a grouping of hospital outpatient services that are clinically similar and have similar resource requirements. Each APC has a national unadjusted payment rate, which gets wage-index adjusted for the hospital's geographic location. There are roughly 700 APCs covering the full range of hospital outpatient services.

What is observation status?

Observation is a hospital outpatient service that allows physicians to monitor a patient's condition over a defined period to determine whether the patient needs to be admitted as inpatient or can be safely discharged. Observation services are paid under OPPS at the Comprehensive Observation Services APC (APC 8011). Observation is not inpatient admission.

How is observation different from inpatient admission for the beneficiary?

Observation is Part B (20 percent coinsurance after Part B deductible, capped per service at the inpatient deductible). Inpatient admission is Part A (one inpatient deductible per benefit period, no coinsurance for days 1 through 60). Observation days do not count toward the three-day qualifying stay required for Medicare SNF coverage; inpatient days do.

What is the Two-Midnight Rule?

The Two-Midnight Rule at 42 CFR 412.3 is the Medicare guidance for when hospital admission is appropriate as inpatient versus outpatient observation. As a general benchmark, hospital stays expected to span two midnights are appropriate for inpatient admission; shorter stays should be billed as observation unless specific clinical reasons justify inpatient status. The Rule was finalized in the FY 2014 IPPS Final Rule.

What is the MOON?

The Medicare Outpatient Observation Notice (MOON, CMS Form 10611) is the written notice that hospitals must deliver to any Medicare beneficiary receiving observation services for more than 24 hours. The MOON requirement was established by the NOTICE Act of 2015 (Public Law 114-42) and is implemented at 42 CFR 489.20(y). The MOON must be delivered within 36 hours of the start of observation services.

What is the per-service coinsurance cap?

Under Section 1833(t)(8) of the Social Security Act and 42 CFR 419.41, beneficiary coinsurance for any single OPPS service is capped at the Part A inpatient deductible amount for the year ($1,676 in 2026). The per-service cap was added by Section 4012 of the Balanced Budget Act of 1997 and refined by BIPA 2000.

What is the 340B Drug Pricing Program?

The 340B Program, established by Section 340B of the Public Health Service Act (42 USC 256b), requires drug manufacturers participating in Medicaid to sell outpatient drugs at deeply discounted prices to qualifying hospitals and clinics, including Disproportionate Share Hospitals, Critical Access Hospitals, Sole Community Hospitals, Rural Referral Centers, Free-standing Cancer Hospitals, and Children's Hospitals.

How are 340B drugs paid in OPPS now?

For calendar year 2024 and beyond, after the Supreme Court's 2022 ruling in American Hospital Association v. Becerra, CMS pays 340B drugs in OPPS at ASP plus 6 percent, the same rate as non-340B drugs.

What was the 2018 CMS 340B payment policy?

For calendar years 2018 through 2022, CMS paid 340B drugs in OPPS at ASP minus 22.5 percent instead of ASP plus 6 percent. The Supreme Court ruled this policy unlawful in AHA v. Becerra in June 2022, and CMS issued a remedy rule in November 2023 providing lump sum payments to affected hospitals and a sixteen-year recoupment from non-340B hospitals starting in 2026.

What is site-neutral payment?

Section 603 of the Bipartisan Budget Act of 2015 (codified at Section 1833(t)(19) of the Social Security Act and implemented at 42 CFR 419.40) requires that off-campus provider-based departments billing under OPPS for the first time on or after November 2, 2015 be paid at a lower site-neutral rate, generally Medicare Physician Fee Schedule rates, rather than full OPPS rates. The provision was intended to close a payment loophole that drove hospital acquisition of physician practices.

What is an excepted off-campus PBD?

An excepted off-campus provider-based department is one that was billing under OPPS before November 2, 2015 (grandfathered), or that qualifies under another exception (on-campus, dedicated emergency department, or certain rural sole community hospital provisions). Excepted PBDs continue to be paid at full OPPS rates.

Can an excepted off-campus PBD lose its excepted status?

Yes. An excepted PBD can lose its grandfathered status by relocating, by expanding into new clinical service lines, or by being acquired by a different hospital. The 2017 OPPS Final Rule established specific rules governing these triggering events.

Are emergency department visits paid under OPPS?

Yes. Emergency department visits where the patient is not admitted as inpatient are paid under OPPS using ED visit APCs (APC 5021 through 5025, Level 1 through Level 5 ED Visits). If the patient is admitted as inpatient from the ED, the inpatient admission is paid under IPPS and the ED visit is bundled into the inpatient stay.

Are observation services and ED visits billed separately?

Generally yes, but with bundling rules. Under the Comprehensive APC methodology, observation services and certain related services are bundled into APC 8011 (Comprehensive Observation Services). The ED visit that precedes observation can be bundled or billed separately depending on the timing and the specific services.

Are hospital outpatient drugs paid separately?

It depends on the drug. Under OPPS, drugs with a per-day cost below the packaging threshold ($140 in 2026) are packaged into the APC payment for the procedure with which they are associated. Drugs above the threshold are paid separately at ASP plus 6 percent. Pass-through drugs are paid separately under the transitional pass-through methodology.

What is the Part B deductible for 2026?

The Part B deductible for 2026 is $257. This deductible applies to hospital outpatient services and other Part B services collectively, not separately to each service type. Once a beneficiary has met the $257 deductible from any combination of Part B services, no further deductible is owed for the year.

Does Medigap cover hospital outpatient cost-sharing?

Yes. All standardized Medigap plans cover Part B coinsurance, including the 20 percent OPPS coinsurance for hospital outpatient services. Medigap Plan G and Plan F (grandfathered) also cover other Part B obligations including excess charges (for non-PAR physicians), though excess charges do not typically apply to hospital facility billing because hospitals must accept assignment.

What does Medicare Advantage cost-sharing look like for hospital outpatient services?

Medicare Advantage plans set their own cost-sharing for hospital outpatient services within CMS-prescribed limits. Many plans use flat copays for ED visits, observation stays, and outpatient surgery. Some plans use percentage coinsurance. Beneficiary out-of-pocket is also capped by the MA plan's annual out-of-pocket maximum (Maximum Out-of-Pocket, MOOP), which for 2026 is set by CMS at $9,350 for in-network services.

What is the No Surprises Act and how does it apply to hospital outpatient services?

The No Surprises Act, enacted as Division BB of the Consolidated Appropriations Act 2021 (Public Law 116-260), protects beneficiaries against balance billing for emergency services from out-of-network hospitals and providers, and for non-emergency ancillary services from out-of-network providers at in-network hospitals. The Act is particularly important for Medicare Advantage beneficiaries; for traditional Medicare beneficiaries, existing Medicare assignment rules already provide most of the same protections.

Can I appeal a Medicare denial of hospital outpatient services?

Yes. Under Section 1869 of the Social Security Act, Medicare beneficiaries have a five-level appeals process: Level 1 redetermination by the MAC (Palmetto GBA for Georgia), Level 2 reconsideration by the Qualified Independent Contractor, Level 3 hearing before an Administrative Law Judge, Level 4 Medicare Appeals Council review, and Level 5 federal court review. The redetermination request must be filed within 120 days of the initial determination.

What if I have a quality of care concern about a Georgia hospital?

Contact Kepro, the Beneficiary and Family Centered Care Quality Improvement Organization for the southeast region, at 1-844-455-8708. Kepro reviews quality of care concerns including premature discharge, inadequate care, and clinical errors. The QIO can review medical records, consult with peer reviewers, and issue findings.

What is Palmetto GBA's role?

Palmetto GBA is the Medicare Administrative Contractor for Jurisdiction J, covering Alabama, Georgia, and Tennessee. As the MAC, Palmetto GBA processes Medicare Part A and Part B claims from Georgia providers, conducts medical review, issues Local Coverage Determinations, and provides provider education. Beneficiaries can call 1-800-MEDICARE for claims questions; Palmetto GBA's provider contact is 1-877-567-9230.

Where can I get free help understanding my hospital outpatient bill?

For Georgia beneficiaries, contact GeorgiaCares, the State Health Insurance Assistance Program (SHIP), at 1-866-552-4464. GeorgiaCares counselors can review bills, explain charges, help file appeals, and provide unbiased guidance about Medicare benefits. The Medicare Rights Center at 1-800-333-4114 also provides free counseling.

:::

::: cta

Get Help With Georgia Medicare Hospital Outpatient Services

If you or a loved one is receiving hospital outpatient services in Georgia and need help understanding the bill, filing an appeal, or determining whether observation status is appropriate, the resources below can help:

1. Georgia Department of Community Health Medicaid Member Services: 1-866-211-0950
2. Medicare: 1-800-MEDICARE (1-800-633-4227)
3. Palmetto GBA (Jurisdiction J MAC): 1-877-567-9230
4. Kepro QIO (Quality of Care, Premature Discharge): 1-844-455-8708
5. GeorgiaCares SHIP (Free Counseling): 1-866-552-4464
6. Social Security Administration: 1-800-772-1213
7. HHS Office for Civil Rights: 1-800-368-1019
8. HHS Office of Inspector General Hotline: 1-800-447-8477
9. Medicare Rights Center: 1-800-333-4114
10. Center for Medicare Advocacy: 1-860-456-7790
11. Atlanta Legal Aid: 404-377-0701
12. Georgia Legal Services Program: 1-800-498-9469
13. 211 Georgia: Dial 2-1-1
14. Eldercare Locator: 1-800-677-1116
15. VA Benefits: 1-800-827-1000
16. Georgia Department of Community Health (Hospital Licensing): 404-657-5468
17. HHS No Surprises Help Desk: 1-800-985-3059

For comprehensive eldercare guidance covering Medicare, Medicaid, VA benefits, caregiving, and senior care decisions, visit Brevy at brevy.com. The Brevy Care Team publishes state-specific deep dives covering every Medicare benefit category, every Medicaid pathway, and the on-the-ground provider landscape for families navigating eldercare in Georgia and across the country.

This guide is for informational purposes only and does not constitute legal, medical, or financial advice. Medicare rules change, and individual circumstances vary. Always verify current rules with Medicare, your Medicare Administrative Contractor (Palmetto GBA for Georgia), GeorgiaCares, or a qualified professional before making decisions about hospital outpatient services or appeals.

:::