CMS Issues Proposed Rule On Policy And Payment Changes For Outpatient Care

Posted on by Frank J. Rosello

On Friday, July 6,2012, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that would update many payment policies and rates involving services for Medicare beneficiaries in hospital outpatient departments (HOPDs) and ambulatory surgical centers (ASCs) beginning on Jan. 1. 2013.

“The policies and payment rates included in the proposed rule are intended to ensure that beneficiaries have access to high quality care in the outpatient setting,” said Jonathan Blum, CMS deputy administrator and director of the agency’s Center for Medicare, in a press release.

CMS has proposed to increase HOPD payment rates by 2.1 percent. The increase is based on the projected hospital inpatient market basket percentage increase of 3.0 percent for inpatient services paid under the hospital inpatient prospective payment system (IPPS), minus the proposed multifactor productivity (MFP) adjustment of 0.8 percentage points, and minus a 0.1 percentage point adjustment required by the Affordable Care Act.

CMS is also proposing to increase ASC payment rates by 1.3 percent – the projected rate of inflation of 2.2 percent minus an adjustment required by law for improvements in productivity of 0.9 percent. Medicare uses the consumer price index for urban consumers (CPI-U) as the inflation rate for ASCs. CMS is asking for public comment on potential data that Medicare could collect to develop an inflation index that would explicitly measure ASC cost growth.

In addition, it has been proposed to continue implementing the statutory 2.0 percentage point reduction in payments for hospitals failing to meet the hospital outpatient quality reporting requirements, by applying a reporting ratio of 0.980 to the OPPS payments and copayments for all applicable services.

The proposals would affect HOPDs in more than 4,000 hospitals, including general acute care hospitals, inpatient rehabilitation facilities, inpatient psychiatric facilities, long-term acute care hospitals, children’s hospitals, and cancer hospitals and approximately 5000 Medicare-participating ASCs.

Under this proposal, it’s estimated that the total payments, including beneficiary cost-sharing for calendar year 2013 to the more than 4,000 hospital facilities would be approximately $48.1 billion, an increase of approximately $4.6 billion compared to calendar year 2012 payments, or $700 million excluding CMS’s estimated changes in enrollment, utilization and case-mix.

The proposed rule also would streamline the operations of the Quality Improvement Organizations (QIOs), according to CMS. Specifically, the proposals would give beneficiaries more information about the QIO’s review process, and would create a new alternative dispute resolution option, called Immediate Advocacy, to resolve beneficiary complaints. The rule would give QIOs authority to send and receive secure transmissions of electronic versions of health information. Finally, the proposals would enable QIOs to release more information about the results of their reviews to affected beneficiaries.

“The proposals would give beneficiaries and their caregivers the ability to participate more actively in the Quality Improvement Organization review process and would promote speedier resolution of quality complaints,” said Patrick Conway, CMS chief medical officer and director of the Office of Clinical Standards and Quality at CMS, in a press release.

For the ASC Quality Reporting (ASCQR) Program, CMS is proposing revisions to the procedural requirements that apply to the reporting of quality data, a policy for updating measures, data completeness requirements, and a methodology for reducing payment to ASCs that do not meet the ASCQR Program reporting requirements.

The proposed rule will appear in the July 30, 2012, Federal Register. CMS will accept comments on the proposed rule until Sep. 4, 2012, and will respond to all comments in a final rule to be issued by Nov. 1, 2012.

Article written by Kelsey Brimmer, Associate Editor of Healthcare Finance News

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