Medicare Ties 2009 Pay for Outpatient Services to
Quality Reporting
Amount beneficiaries pay for outpatient services will
decline to provide a gradual transition to 20% coinsurance
July
4, 2008 Medicare has proposed a new rule increasing the pay rate for
hospital outpatient departments and ambulatory surgical centers by three
percent for calendar year 2009, but, those that do not meet quality
reporting requirements will see that pay rate increase to just one
percent. It is the first time Medicare outpatient pay rates have been
associated with the quality of service.
The Centers for Medicare & Medicaid Services said
yesterday the proposed rule builds on efforts across Medicare to
transform the program into a prudent purchaser of health care services,
paying based on quality of care, not just quantity of services.
As more and more health care services shift from
the inpatient to the outpatient setting, we are committed to working
with hospitals to ensure that people with Medicare have access to high
quality care in an appropriate setting, said CMS Acting Administrator,
Kerry Weems.
The changes proposed for 2009 are intended to give
hospitals greater flexibility to manage their resources and give them
incentives to improve efficiency so that both beneficiaries and
taxpayers get the most value for their health care dollar.
The proposed rule will update rates paid under both
the Outpatient Prospective Payment System (OPPS) and the ASC Prospective
Payment System (ASC PPS), which will be in the second year of a
four-year transition that aligns ASC rates with the ambulatory payment
classification (APC) groups that are used to pay for services in
hospital outpatient departments.
The proposed rule includes a 3.0 percent annual
inflation update to Medicare payment rates for most services that would
be paid under the OPPS to more than 4,000 hospitals and community mental
health centers in CY 2009.
The proposed changes would affect outpatient
services furnished by general acute care hospitals, inpatient
rehabilitation facilities, inpatient psychiatric facilities, long-term
acute care hospitals, community mental health centers, childrens
hospitals, and cancer hospitals. CMS projects that hospitals would
receive $28.7 billion in CY 2009 for outpatient services furnished to
Medicare beneficiaries.
Furthermore, CMS expects to make payments of almost
$3.9 billion in CY 2009 to the approximately 5,300 ASCs that participate
in Medicare.
In the past, the increase in Medicares payment for
outpatient services has not been specifically tied to the quality of
health care. The law now requires that the annual OPPS payment
inflation update be reduced by 2.0 percentage points for hospitals that
do not meet quality reporting requirements.
In order to receive the full OPPS payment update
for services furnished in CY 2009, hospitals must report data in CY 2008
on seven quality measures of emergency department and perioperative
surgical care. CMS is proposing to add four new measures of imaging
efficiency to the seven existing quality measures for purposes of the CY
2010 update. CMS is also seeking public comment on eighteen additional
potential quality measures in areas ranging from screening for fall risk
to cancer care that are under consideration for future years.
To build on other efforts across the Medicare
program to strengthen the connection between the quality of care and
Medicare payment, CMS is seeking public comment on options and
considerations for modifying payments for treating conditions that are
generally preventable if the provider follows established guidelines.
CMS is already implementing a similar policy for
inpatient stays under authority granted in the Deficit Reduction Act of
2005, and beginning for discharges on or after October 1, 2008, CMS will
no longer pay hospitals at a higher rate for treating certain conditions
that have been determined to be reasonably preventable by following
evidence-based guidelines, if they are acquired during an inpatient
stay.
A key part of CMS value-based purchasing
strategy is to link our payment to quality of care by providing
incentives for hospitals to follow established guidelines and reduce the
number of preventable conditions that occur as result of treatment,
said Weems. The proposed changes are designed to improve the
reliability and quality of health care services.
Changes for imaging services
CMS is also proposing to encourage greater
efficiency by changing how it pays for imaging services when multiple
services are provided in one session. Under the proposal, CMS would
make a single payment for multiple services of a particular type (such
as multiple ultrasound procedures) performed in a single hospital
session.
In addition to ultrasound, CMS is proposing to
apply this policy to computed tomography and magnetic resonance imaging
services.
CMS is also proposing changes to the hospital
Medicare cost report to improve the accuracy of future cost estimates
used to determine payment for drugs and biologicals.
Cost to beneficiaries will decrease
Under the proposed rule, the amount beneficiaries
will pay for outpatient services would continue to decline based on a
formula in the Medicare law that is designed to provide a gradual
transition to 20 percent coinsurance.
Prior to implementing the OPPS in CY 2000,
beneficiaries were responsible for 20 percent of the hospitals 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 hospital outpatient departments will be subject
to the 20 percent coinsurance rate in CY 2009, up from 23 percent in CY
2008.
However, the services that will be subject to the
20 percent coinsurance rate in CY 2009 represent a larger proportion of
the total number of claims for services paid under the OPPS. As a
result, CMS estimates that Medicare beneficiaries overall will be
responsible for approximately 23 percent of total payments for Medicare
covered outpatient services in CY 2009.
Comments on the proposed rule will be accepted
until September 2, 2008, and a final CY 2009 OPPS/ASC payment rule will
be issued by November 1, 2008.
For more information on the CY 2009 proposals for
the OPPS and ASC payment system, see the CMS Web site at:
OPPS: http://www.cms.hhs.gov/HospitalOutpatientPPS/
ASC payment system: http://www.cms.hhs.gov/ASCPayment/
