CMS Proposes Policy and Payment Changes for Outpatient Care in Hospitals and Ambulatory Surgical Centers

Proposals Also Would Enhance Beneficiary Role in Quality of Care Reviews

The Centers for Medicare & Medicaid Services (CMS) today issued a proposed rule that would update payment policies and payment rates for services furnished to Medicare beneficiaries in hospital outpatient departments (HOPDs) and ambulatory surgical centers (ASCs) beginning Jan. 1, 2013.  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.

“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.

CMS is proposing to increase HOPD payment rates by 2.1 percent.  The increase is based on the projected hospital market basket—an inflation rate for goods and services used by hospitals—of 3.0 percent less statutory reductions totaling 0.9 percent, including an adjustment for economy-wide productivity.  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.

Based on the proposed updates and other policies in the proposed rule, CMS projects that total payments to hospitals under the Outpatient Prospective Payment System (OPPS) in calendar year 2013 will be approximately $48.1 billion.  CMS also projects that payments to ASCs under the ASC Payment System will be approximately $4.1 billion.

The proposed 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, 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 proposed rule would also 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, M.D., CMS chief medical officer and director of the Office of Clinical Standards and Quality at CMS.

The proposed rule would make several changes to the quality reporting programs for HOPDs, ASCs and Inpatient Rehabilitation Facilities (IRFs).  Specifically, CMS is not proposing to add measures for the CY 2014 and CY 2015 payment determinations. Thus, CMS is proposing reporting for 23 measures for the CY 2014 payment determination and 24 measures for the CY 2015 payment determination.  The proposed rule also contains proposals for procedures related to retirement and retention of HOPD measures.

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.  CMS previously finalized the measure sets that apply to CY 2014-2016 and is not proposing to make any changes to these measure sets.

The OPPS/ASC proposed rule includes several proposals that would affect the IRF Quality Reporting Program.  Specifically, the proposed rule would:

  • Adopt updates on a previously adopted measure for the IRF QRP that will affect annual prospective payment amounts in FY 2014;
  • Adopt a policy that would provide that any measure that has been adopted for use in the IRF QRP will remain in effect until the measure is actively removed, suspended, or replaced; and
  • Adopt policies regarding when notice-and-comment rulemaking will be used to update existing IRF QRP measures.

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.

For more information on the CY 2013 proposals for the OPPS and the ASC payment system, as well as proposed changes to the QIO program, please see:

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