Press Releases
CMS Announces Plans to Bolster Quality of Care in Hospital Outpatient Departments
Medicare Adopts 2009 Payment and Policy Changes for Hospital Outpatient and Ambulatory Surgical Center Services
The Centers for Medicare & Medicaid Services (CMS) today announced plans to strengthen the tie between the quality of care furnished to people with Medicare in hospital outpatient departments (HOPDs) and the payments hospitals receive for those services. In a final rule establishing Medicare payment and policy changes for services in HOPDs and ambulatory surgical centers (ASCs) for calendar year (CY) 2009, CMS reiterates its commitment to implementing Value Based Purchasing (VBP) initiatives across the continuum of beneficiaries’ care and transforming Medicare from a passive payer to a prudent purchaser of health care.
The final Outpatient Prospective Payment System/Ambulatory Surgical Center Payment System (OPPS/ASC) rule also includes a 3.6 percent annual inflation update for HOPDs; and adopts changes to payment policies for HOPDs and Ambulatory Surgical Centers (ASCs) beginning on January 1, 2009. The law sets the ASC update for CY 2009 at 0 percent.
“The direct impact of the new quality initiatives will be felt by the beneficiaries Medicare serves, and, as the nation’s largest payer for health care services, we are pointing the way to better, safer, and more efficient care for all patients,” said CMS Acting Administrator Kerry Weems. “In this final rule, we are continuing to pay appropriately for care while working with health care providers as we look for ways to make sure beneficiaries who come in for treatment of one complaint don’t leave with two as a result of adverse events during their outpatient visits.”
The final rule emphasizes that an urgent and compelling rationale exists for CMS to exercise its existing administrative authority under the Medicare statute to develop and implement a policy that would not pay hospitals for care related to illness or injuries acquired by the patient during a hospital outpatient encounter. Such a policy, which we expect to propose in the future, would be known as hospital outpatient healthcare-associated conditions (HOP-HACs), and it would make adjustments to OPPS payments to ensure equitable and appropriate payment for care, similar to the quality adjustments applied to payment for hospital-acquired conditions in the inpatient setting.
The rule also establishes new conditions of coverage (CfCs) for ASCs that reflect current ASC practice by focusing on the care provided to patients and the impact of that care on patient outcomes. These will help ensure ASCs are safely equipped and qualified to perform a much broader range of services under the revised ASC payment system, which was implemented on January 1, 2008 and will be in its second year of a four-year transition in the coming year. The new ASC CfCs will help improve assurance of the quality and safety of the care patients receive in ASCs.
In response to comments submitted in response to a proposed rule that was published in the August 31, 2007 Federal Register, the new CfCs define an ASC as a distinct entity that operates exclusively for the purpose of providing surgical services to patients not requiring hospitalization and in which the expected duration of services would not exceed 24 hours following an admission. The proposed rule would have provided that the patient’s treatment was not expected to require an overnight stay, defined as requiring active monitoring by qualified medical personnel, regardless of whether it is provided in the ASC, after 11:59 p.m. on the day of admission.
The changes in the final rule will apply to outpatient services furnished by more than 4,000 HOPDs in general acute care hospitals, inpatient rehabilitation facilities, inpatient psychiatric facilities, long-term acute care hospitals, community mental health centers, children’s hospitals, and cancer hospitals. CMS projects that hospitals will receive $30.1 billion in CY 2009 for outpatient services furnished to Medicare beneficiaries, up from $28.5 billion in projected payments for CY 2008. Furthermore, CMS expects to make payments of almost $3.9 billion in CY 2009 to more than 5,100 ASCs that participate in Medicare, compared with $3.5 billion projected for CY 2008.
The Medicare law now requires that the annual OPPS payment inflation update be reduced by 2.0 percentage points for certain hospitals that do not meet quality reporting requirements. The final rule adopts 4 new quality measures for imaging efficiency, increasing the number of quality measures that HOPDs must report in CY 2009 to receive the full update in CY 2010 from the current 7 measures to 11 measures. CMS will continue to consider for future years eighteen additional quality measures in areas ranging from screening for fall risk to cancer care that were identified in the CY 2009 proposed rule, as well as other quality and efficiency measures as appropriate.
CMS is also changing how it pays for imaging services when two or more imaging procedures from an imaging family are provided in one session to encourage greater imaging efficiency. The final rule creates five imaging composite APCs (such as multiple computed tomography (CT) procedures) performed in a single hospital session. The change will apply to certain ultrasound procedures, CT and computed tomographic angiography (CTA) scans with or without contrast, and magnetic resonance imaging (MRI) and magnetic resonance angiography (MRA) scans with or without contrast.
Under the final rule, the amount beneficiaries will pay for outpatient services will continue to decline based on a formula in the Medicare law that is designed to provide a gradual transition to 20 percent coinsurance for all APCs. Prior to implementing the OPPS in CY 2000, beneficiaries were responsible for 20 percent of the hospital’s charges, rather than 20 percent of the Medicare payment rate, for outpatient services. Because hospital charges rose faster over time than Medicare payment rates for these services, the beneficiary share often exceeded 50 percent of the total amount collected by the hospital for the service. CMS estimates that nearly 25 percent of all types of services furnished in HOPDs, reflecting 85 percent of all billed services, will be subject to the 20 percent coinsurance rate in CY 2009.
The final rule with comment will appear in the November 18 Federal Register. Comments on designated provisions are due by 5:00 p.m. Eastern time on December 29, 2008, and a final rule responding to the comments will be published at a later date.
For more information on the CY 2009 final rule with comment period for the OPPS and ASC payment system, please see the CMS Web site at:
Also, please see the Fact Sheets posted on the CMS Web site