CMS to Pay $41 Billion for Outpatient Services in 2012

Payment rates for services paid under the outpatient prospective payment system (OPPS) will increase 1.9 percent for services provided after January 1, 2012, according to an advance release of a final rule.  CMS estimates that during 2012, $41.4 billion will be paid to 4,000 hospitals, which includes general acute care hospitals, inpatient rehabilitation facilities, inpatient psychiatric facilities, long-term acute care hospitals, children’s hospitals, and cancer hospitals for services reimbursed under OPPS.

The 1.9 percent increase in the payment rate for OPPS services is arrived at by decreasing the 3.0 percent increase in the inpatient market basket percentage increase by the 1.0 multi-factor productivity adjustment as required by the Patient Protection and Affordable Care Act (PPACA)(P.L. 111-148) and an additional reduction of 0.1 percent also required by PPACA.

 Supervision, Quality Reporting and Other Changes

 In response to concerns that Medicare’s requirement for direct physician supervision of outpatient hospital therapeutic services could hinder access for beneficiaries, specifically in rural areas, the Final rule establishes an independent advisory review process to consider requests that specific outpatient services be subject to a level of supervision other than direct supervision.  Under this process, CMS will seek recommendations from Ambulatory Payment Classification (APC) Advisory Panel about appropriate supervision requirements. CMS will add two small rural PPS hospital members and two CAH members to represent their interests to the Panel so that all hospitals subject to the supervision rules for payment of outpatient therapeutic services will be represented, but they will not participate in deliberations about APC assignments as CAHs are not paid under OPPS.

CMS is adding three quality measures to the current list of 23 measures to be reported by providers paid under OPPS. The new measures will include: (1) a chart abstracted measure about cardiac rehabilitation patient referral; (2) a structural measure about the use of a safe surgery checklist; and (3) a structural measure collecting hospital outpatient department volume for selected surgical procedures. In addition, for the CY 2013 payment determination, CMS will continue to use the validation processes used for CY 2012 reporting of quality data, but will reduce the number of randomly selected hospitals whose data will be verified from 800 to 450. CMS will also select up to 50 additional hospitals based on targeting criteria which indicate possible data quality concerns. For each selected hospital, CMS will randomly select up to 12 cases per quarter. CMS will request the corresponding medical records for the cases, perform its own abstraction of the hospitals quality reported chart-abstracted measures, and then compare the results with the measures reported by the hospital.   CMS will require hospitals to achieve a minimum 75 percent validation score based on this validation process to receive the full OPPS update in CY 2013.

In addition, For CY 2012, CMS will pay for the acquisition and pharmacy overhead costs of separately payable drugs and biologicals without pass-through status at the average sales price (ASP) plus 4 percent. The Final rule also provides a payment adjustment for designated cancer hospitals as required by PPACA.  This payment adjustment is expected to increase payments to cancer hospitals by 11.3 percent (or approximately $71 million) over what they would have otherwise been paid.