CMS Issues 2013 Hospital Outpatient Rule Final Rule
On November 1, 2012, CMS finalized the Hospital Outpatient Prospective Payment System (“OPPS”) and Ambulatory Surgical Center (“ASC”) rule. The 2013 final rule updates Medicare payment policies and rates for hospital outpatient and ASC services beginning January 1, 2013.
The 2013 final rule will increase payment rates for hospital outpatient departments by 1.8% with total payments to hospitals at $48.1 billion. The rule provides for an increase of 0.6% in payment rates to ASCs. Medicare payments next year to ASCs will total $4.01 billion.
The final OPPS/ASC rule affects hospital outpatient departments in more than 4,000 hospitals, including general acute care hospitals, inpatient rehabilitation facilities, inpatient psychiatric facilities, long-term acute hospitals, children’s hospitals, cancer hospitals and close to 5,000 Medicare-participating ASCs.
CMS Issues 2013 Physician Fee Schedule Final Rule
On November 1, 2013, CMS released a final rule with comment period for Medicare’s payments for physician fees for 2013. The final rule would increase Medicare payments to family physicians by approximately 7% and other practitioners providing primary care services between 3% and 5% for services furnished in 2013.
The rule includes a statutorily required 26.5% across-the-board reduction to Medicare payment rates for more than 1 million physicians under the Balanced Budget Act of 1997’s Sustainable Growth Rate (“SGR”) methodology. Congress is expected to intervene and prevent the across-the-board-cut. Medicare payments also could drop another 2% under the “fiscal cliff,” which could also be stalled depending on what Congress does following Tuesday’s elections.
Stakeholders may submit comments on the final rule for 60 days. The final fee schedule rule will be published in the Federal Register on November 16 and go into effect on January 1, 2013.
AHA Sues HHS over Payment Errors
On November 1, the American Hospital Association (“AHA”) and four hospital systems sued HHS for denying Medicare reimbursement to hospitals for “reasonable and necessary care” when recovery audit contractors (“RACs”) later determine care could have been provided by an outpatient facility. AHA argues current policy violates Medicare law and is asking the court to force HHS to reimburse all hospitals that have been denied Medicare Part A or Part B payments due to RAC findings.
The lawsuit was filed in the U.S. District Court for the District of Columbia. In addition to AHA, Missouri Baptist Sullivan Hospital, Munson Medical Center (Michigan), Lancaster General Hospital and Trinity Health are members of the suit. According to AHA, all four hospitals have been second-guessed by a RAC auditor and spent money appealing the decision.
In Congress, legislation was introduced last month (H.R. 6575) that would place restrictions on RACs’ ability to deny hospitals Medicare reimbursements. The bill is not expected to pass this year.
GAO Study Finds Self-Referrals Increase Medicare Spending
The Government Accounting Office (“GAO”) recently released a report showing physician self-referrals are driving up utilization of particular services and increasing costs to patients and Medicare. GAO investigated the role of self-referral regarding magnetic resonance imaging (“MRI”) and computed tomography (“CT”) services from 2004-2010. According to the report, Medicare paid $109 million more in 2010 for MRIs and CT services than it would have absent self-referral incentives. As part of the report, GAO recommends CMS improve its ability to identify self-referral of advanced imaging services and address increases in these services.
Senators Baucus (D-MT) and Grassley (R-IA) along with Representatives Stark (D-CA), Levin (D-MI) and Waxman (D-CA) issued a joint release stating the report shows Medicare should not incentivize unneeded tests.
MedPAC Recommends Outpatient Therapy Payment Reform
On November 1, the Medicare Payment Advisory Commission (“MedPAC”) voted to recommend changes in payments for therapy that would reduce the payment caps on therapy services. The final recommendations, which were mandated by the Affordable Care Act, include reducing the physical therapy and speech pathology cap to $1,270 in 2013. Its current level is $1,880.
The recommendation calls for services provided in hospital outpatient departments being permanently subject to caps, and a payment reduction of 50% should be applied to the practice expense portion of outpatient therapy services provided to the same patient on the same day.
MedPAC is an independent advisory agency established to advise Congress on issues affecting the Medicare Program. MedPAC recommendations are generally given full consideration by the relevant Congressional committees.
For more information, please contact John F. Williams, III at 317.977.1462 or jwilliams@wp.hallrender.com.
