Final Updates to 2013 Outpatient and Ambulatory Surgical Center Payment Rates

 CMS expects to spend $48.1 billion on outpatient hospital services provided by hospitals and other providers during calendar year (CY) 2013 and $4.07 billion on services provided on payments to ambulatory surgical centers (ASCs) during the same time period. This represents an increase in payments of $6.7 billion, or a 16 percent increase from 2012 for outpatient hospital services, and an increase of $600 million or a 17 percent increase for payment for ASC services.

CMS issued an advance release copy of the Final rule updating the outpatient prospective payment system (OPPS) and payments to ASCs for CY 2013 on November 1, 2012. The Final rule is expected to be published in the November 15, 2012 edition of the Federal Register.

Payment Increases

The payment increase for OPPS services will be 1.8 percent, down from the 2.1 percent increase that was in the Proposed rule. The 1.8 percent increase in the payment rate for OPPS services is arrived at by decreasing the 2.6 percent increase in the inpatient market basket by statutory reductions required by the Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148) of 0.8 percent, which includes an adjustment for economy wide productivity.

The payment increase for services provided at an ASC will be increased by 0.6 percent, down from the 1.3 percent that was in the Proposed rule. The 0.6 percent increase in the ASC payment rate was arrived at by subtracting a 0.9 percent productivity adjustment required by PPACA from the 1.4 consumer price index (CPI) for all consumers.

The decrease in both payment rates was a result of a drop in the inpatient market basket from 3.0 to 2.6 percent for OPPS and a drop in the CPI from 2.2 percent to 1.4 percent for ASC services.

APC update change. CMS is adopting the change to how it calculates the relative payment rates for the ambulatory payment classification (APC) codes, which are used to determine the cost of providing a service under both OPPS and ASCs. CMS is proposing to use the geometric mean costs of services to determine the relative payment weights of services. The median cost of services have been used since the inception of the OPPS.

CMS is making this change because geometric mean costs better reflect average costs of services than the median. With more than a decade of experience under the OPPS, CMS believes hospital cost reporting is now sufficiently improved to make this change to geometric mean costs. The OPPS statute initially provided that relative payment weights for covered outpatient department services be established based on median costs under section 4523(a) of the Balanced Budget Amendment of 1997 (BBA)(P.L. 105-33). Later, section 201(f) of the Balanced Budget Refinement Act of 1999 (BBRA)(P.L. 106-113) amended Soc. Sec. Act section 1833(t)(2)(C) to allow the Secretary the discretion to base the establishment of relative payment weights on either median or mean hospital costs. Geometric means are the basis of the Inpatient Prospective Payment System as well.

CMS’ analysis shows that the proposed change to geographic mean costs would have a limited payment impact on most providers, with a small number experiencing payment gains or losses based on their service-mix.

Quality Reporting

No additional measures will be added to either the OPPS or ASC quality reporting system for the CY 2014 and CY 2015 payment determinations. The CY 2012 update outlined the measures to be added in CY 2014 through CY 2016 and no changes have been made to those lists for either OPPS or ASC. Data collection is going to be deferred for one OPPS quality measure, OP-24 Cardiac Rehabilitation Patient Referral from an Outpatient Setting, for one year, and suspended for another OPPS data measure, OP-19: Transition Record with Specified Elements Received by Discharged ED Patients. One measure, OP-16, which has to do with the administration of Troponin in emergency departments for chest pain and acute myocardial infraction will no longer be collected from chart abstracted data.

For ASCs, CMS is adopting the proposal to make 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 program reporting requirements.

QIO Changes

The Final rule also would streamline the operations of the Quality Improvement Organizations (QIOs) and make them more responsive to beneficiary complaints about quality of care. Specifically, beneficiaries will be given more information about the QIO’s review process. A new alternative dispute resolution option, called Immediate Advocacy, will be created to resolve beneficiary complaints. QIOs will also have the authority to send and receive secure transmissions of electronic versions of health information.

IRF Quality Reporting

Several changes to the Inpatient Rehabilitation Facilities (IRF) quality reporting program (QRP) made in the Proposed rule are being adopted. Those changes include (1) updates on a previously adopted measure for the IRF QRP that will affect annual prospective payment amounts in fiscal year 2014; (2) a policy that would provide that any measure that has been adopted for use in the IRF QRP to remain in effect until the measure is actively removed, suspended, or replaced; and (3) policies regarding when notice-and-comment rulemaking will be used to update existing IRF QRP measures.

These changes will become effective for services provided beginning on January 1, 2013, at roughly 4,000 OPPS providers, including general acute care hospitals, inpatient rehabilitation facilities, inpatient psychiatric facilities, long-term acute care hospitals, children’s hospitals, cancer hospitals, and at approximately 5,000 ASCs.