CMS Proposes 1.8% Increase in Medicare Outpatient Payments to Hospitals

CMS has released its proposed rule for Medicare payments to hospital outpatient departments in which HOPDs would receive a 1.8 percent increase in reimbursements for the 2014 calendar year.

More than 4,000 hospitals are paid under the outpatient prospective payment system. CMS said total OPPS payments in 2014 would increase heavily — by $4.37 billion from 2013 levels — as healthcare continues to shift care delivery to the outpatient setting.

Here are some of the major proposed changes from CMS' proposed rule to hospital OPPS Medicare payments.

•    Payment update. HOPDs would receive a 1.8 percent boost in Medicare payments. This total was achieved by taking the projected hospital market basket increase from CMS' inpatient hospital proposed rule (2.5 percent), and subtracting a productivity adjustment (0.4 percent) and an outpatient adjustment provision required under the Patient Protection and Affordable Care basket (0.3 percent). Sole community hospitals will receive a 7.1 percent boost to outpatient Medicare reimbursements.

•    Direct supervision for small hospitals. CMS proposed ending the direct supervision enforcement delay for critical access hospitals and small rural hospitals by Dec. 31. The "direct supervision" provision for CAHs and small hospitals essentially requires those organizations to have a supervising physician be physically present for certain services at all hours. The American Hospital Association has opposed this provision, saying CAHs and small hospitals cannot afford constant supervision, and it could reduce access to care.

•    Packaged primary services. CMS proposed packaged payment for many items and services into a single payment to "create incentives for hospitals to furnish services in the most efficient way." Those seven categories to be bundled are: drugs, biologicals and radiopharmaceuticals that function as supplies when used in a diagnostic test or procedure; drugs and biologicals that function as supplies or devices when used in surgeries; certain diagnostic lab tests; procedures described by add-on codes; ancillary services; diagnostic tests on the bypass list; and device removal procedures.

•    New ambulatory payment classifications. In an effort to improve accuracy of device-dependent services in the outpatient setting, CMS proposed creating 29 new APCs to pay for the most costly device-dependent services. APCs are groups to which an outpatient service falls under.

•    Hospital outpatient quality reporting program. CMS proposed five new quality measures that will affect payments in calendar year 2016, and data collection will start next year.

CMS will accept public comments until Sept. 6, and a final rule will be published Nov. 1. To view the proposed rule in full, click here.

More Articles on Hospitals and Medicare:
CMS: Hospital Outpatient Charges Vary Just as Much as Inpatient
Medicare Approves Slight Raises in HOPD, ASC Rates for 2013
The 2012 Payroll Tax-SGR Bill: What It Means for Hospitals

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