Medicare News
| For Immediate Release: | Contact: |
| Monday, August 20, 2001 | CMS Office of Public Affairs 202-690-6145 |
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MEDICARE PROPOSES RATE INCREASE FOR HOSPITAL OUTPATIENT SERVICES
Hospitals would receive a 2.3 percent increase in Medicare payments for outpatient services beginning January 1, 2002, under a proposed rule announced today by the Centers for Medicare & Medicaid Services (CMS).
The proposed rule also would save Medicare beneficiaries millions of dollars by continuing to reduce coinsurance payments for outpatient services.
As required by the Balanced Budget Act of 1997 (BBA), Medicare pays over 6,000 hospital outpatient departments for the services they provide based on the Outpatient Prospective Payment System (OPPS), which went into effect Aug. 1, 2000. The system is designed to encourage efficient delivery of care and to ensure more appropriate payment for services.
"In light of the ongoing shift of health care services from the inpatient to the outpatient setting, it is critical for Medicare to ensure that we are paying appropriately for outpatient services and that beneficiaries have access to quality care," said CMS Administrator Tom Scully. "We believe this proposed rule achieves those goals."
The OPPS establishes base payment rates based on groups of services, known as ambulatory payment classifications, that are clinically similar and require comparable resources. Prior to the implementation of the OPPS, hospitals were paid for outpatient services based on costs.
Before the OPPS was implemented, beneficiaries' coinsurance was based on 20 percent of the charges billed by hospitals - rather than 20 percent of Medicare allowed charges - and beneficiaries often had to pay more than half the cost of those services. The proposed rule continues to lower beneficiaries' maximum coinsurance for these services, as required by the BBA.
The proposed rule also outlines possible approaches that CMS may use to estimate the extra payments that Medicare makes to hospitals when they use certain devices, drugs and biological products as part of an outpatient procedure. Congress required Medicare to temporarily make these extra "pass-through" payments, but also capped the estimated total amount of such payments at 2.5 percent of the estimated overall amount paid under the OPPS.
If the department's estimate shows the cap would be exceeded, the law would require an across-the-board reduction in the extra pass-through payments. The proposed rule does not make an estimate. CMS is also working with Congress to consider appropriate changes to the law.
The proposed rule also changes the structure of certain payment classification groups to reflect the recommendations of an advisory panel composed of independent experts in issues relating to hospital outpatient coding and payment. Most significantly, at the panel's suggestion, the rule proposes to create a new payment group for observation services furnished for beneficiaries who come to the hospital with heart problems and asthma.
The proposed rule, which can be viewed on the CMS Website, www.hcfa.gov, will be published in the Aug. 24 Federal Register. CMS will accept public comments on the rule until Oct. 3 and will publish a final rule later in the fall.
