• CMS Issues Final Rule Regarding Policies and Payment for Outpatient Services
  • November 10, 2006
  • Law Firm: Jackson Walker L.L.P. - Houston Office
  • On November 1, 2006, CMS issued a final rule regarding Medicare payment for hospital outpatient services in calendar year 2007.  Most notably, the final rule includes provisions which expand reporting requirements for hospital inpatient and outpatient services and which expand the list of services for which Medicare will make payments to ambulatory surgery centers (ASC).


    The final 2007 outpatient prospective payment system (OPPS) rule includes a 3.4 percent market basket update to Medicare payment rates for outpatient services in FY 2007.  On average, the update will result in a 3 percent increase in Medicare payments for an estimated total of $32.5 billion in Medicare outpatient services payments in FY 2007.  As a result, the changes in policy and payments contained in the final rule will have a significant impact on all providers of outpatient services.


    Reporting Requirements

    To promote greater value and choice for Medicare beneficiaries seeking hospital outpatient services, the final rule ties future OPPS rate increases to the reporting of quality measures in both the inpatient and outpatient setting.  Specifically, the final rule requires hospitals to begin reporting outpatient-specific measures in FY 2009.  The final rule also requires hospitals to expand their reporting of quality measures for inpatient services starting in FY 2008.  Further, CMS states that as a result of the final rule, for the first time, hospitals will be required to report both consistent measures on patient satisfaction with hospital care and risk-adjusted outcome measures.


    Changes for Ambulatory Surgery Centers

    The final rule will have a significant impact on ASCs because it revises both the Ambulatory Payment Classification (APC) payment and coding structure for drug administration services and includes two statutory mandates which directly affect ASCs. 


    CMS revised the APC payment and coding structure for drug administration services in an effort to pay hospitals more accurately for complex and lengthy drug administration services.  CMS hoped to accomplish this by revising the system to allow hospitals to report the same CPT codes for drug administration used by physicians and other payors and to be paid separately for additional hours of infusion. 


    Finally, the final rule includes two statutory mandates that will affect ASC.  First, beginning in 2007, CMS will add 19 procedures performed at an ASC to the OPPS rate.  Second, CMS is implementing a provision of the Deficit Reduction Act.  This provision requires Medicare payment for surgical procedures performed at ASCs not to exceed the Medicare payment for the same provider when they are performed in a hospital outpatient department subject to OPPS.  CMS states that this new provision will result in decreased payment for approximately 280 procedures in the ASC list beginning January 1, 2007.