Press release



The Centers for Medicare & Medicaid Services (CMS) today announced that most hospitals will receive an inflation update of 2.1 percent in their payment rates for services furnished to Medicare beneficiaries in outpatient departments.  As required by Medicare law, CMS will reduce the update by 2.0 percentage points for hospitals that did not participate in quality data reporting for outpatient services or did not report the quality data successfully, resulting in a 0.1 percent update for those hospitals. 

CMS also announced that ambulatory surgical centers (ASCs) will receive a 1.2 percent inflation update beginning Jan. 1, 2010.  CMS projects that the aggregate Medicare payments to more than 4,000 hospitals and community mental health centers in CY 2010 will be approximately $32.2 billion, while aggregate Medicare payments to approximately 5,000 ASCs will total $3.4 billion.

The payment updates are included in a final rule with comment period that revises payment policies and updates the payment rates for services furnished to beneficiaries during calendar year (CY) 2010 in hospital outpatient departments under the Outpatient Prospective Payment System (OPPS) and in ASCs under a revised ratesetting methodology that was implemented Jan. 1, 2008.

"The payment rates we are announcing for 2010 are intended to ensure that Medicare beneficiaries continue to receive high quality and efficient care in the most appropriate setting," said Jonathan Blum, director of the CMS Center for Medicare Management.

The final rule with comment period implements provisions of the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) that extend Medicare coverage to important rehabilitative and educational services intended to improve the health of patients diagnosed with certain respiratory, cardiac, and renal diseases.  Beginning Jan. 1, 2010, hospitals will be able to bill Medicare for new pulmonary and intensive cardiac rehabilitation services furnished in hospital outpatient departments to Medicare beneficiaries.  The final rule with comment period also provides payments to rural hospitals for kidney disease education services furnished in outpatient departments to Medicare beneficiaries with Stage IV chronic kidney disease. 

The final rule with comment period incorporates a payment adjustment for the hospital pharmacy overhead costs of separately payable drugs and biologicals.  This adjustment better recognizes the overhead costs for these drugs and biologicals relative to those for drugs and biologicals that are packaged into Medicare's payment for the associated ambulatory payment classification (APC).  As a result, CMS will pay hospitals for most separately payable drugs and biologicals administered in hospital outpatient departments at the manufacturer's average sales price (ASP) plus four percent.  In order to maintain beneficiary access to safe, cost-effective health care, the final rule with comment period also modifies CMS's requirements for physician supervision to ensure that hospital outpatient services are appropriately supervised by physicians or other qualified practitioners.

In addition to hospital outpatient departments, the final rule with comment period includes policy changes and payment rates for services in ASCs and continues to expand the list of surgical procedures that Medicare will cover when performed in ASCs.  The final rule with comment period seeks to ensure that beneficiaries have access to outpatient services in all appropriate settings, while improving the quality and efficiency of service delivery.

Under the Hospital Outpatient Department Quality Data Reporting Program (HOP QDRP), hospitals that did not participate in the program or did not successfully report the quality measures will receive an update in CY 2010 equal to the annual inflation update factor minus 2.0 percentage points for a net update of 0.1 percent.  CMS will continue to require HOP QDRP participating hospitals to report the existing seven emergency department and perioperative care measures, as well as the four existing claims-based imaging efficiency measures for the CY 2011 payment determination.  CMS also will phase in a new HOP QDRP validation requirement to ensure that hospitals are accurately reporting measures for chart-abstracted data.  In addition, CMS established procedures to make quality data collected under the HOP QDRP publicly available beginning with the third quarter of CY 2008.

The CY 2010 OPPS/ASC final rule with comment period will appear in the Nov. 20 Federal Register.  Comments on designated provisions are due by 5:00 p.m. EST on Dec. 29, 2009.  CMS will respond to comments in the CY 2011 OPPS/ASC final rule.

For more information on the final CY 2010 policies for the OPPS and ASC payment system, please see the CMS Web site at:


ASC payment system:

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