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Payment Matters
August 13, 2010
CMS Proposes Additional Changes to the Outpatient Physician Supervision Requirements
By: Thomas W. Coons
Over the past two years, CMS has implemented significant "clarifications" of, and changes to, its policies regarding supervision of diagnostic and therapeutic services furnished in hospital outpatient departments or, in some instances, furnished in non-hospital locations under arrangements. As those rules currently stand, for outpatient therapeutic services furnished in an outpatient department located "at the hospital," CMS requires that those services be directly supervised by either physicians or non-physician practitioners (NPPs) acting in accordance with state law, with the physician or NPP being present on the hospital campus and immediately available to furnish assistance and direction through the performance of the procedure. If the service is furnished in an off-campus hospital location, the supervisory personnel must be physically present in the off-campus provider-based department and immediately available to furnish assistance and direction throughout the performance of the procedure.
Hospital diagnostic services are subject to similar rules. Hospital diagnostic services provided directly or under arrangement — whether provided in the hospital, in a provider-based department of a hospital, or at a non-hospital location — must comply with physician supervision for individual tests listed in the Medicare Physician Fee Schedule relative value file. Unlike what is required for therapeutic services, if the diagnostic test requires direct supervision, a physician — not an NPP — must perform that supervision. For tests that require direct supervision and that are performed at the hospital, a supervising physician must be on the same campus and immediately available to furnish assistance and direction; if the service is provided in an off-campus hospital location, the physician must be physically present in the provider-based department in which the test is being performed.
Click to continue...CMS Releases Final IPPS Rules for FY 2011 and Interim Final Rule on Three-Day Window
By: Carel T. Hedlund and Lisa D. Stevenson
On July 30, 2010, CMS posted its final rule [PDF] and updates to the Medicare Inpatient Patient Prospective Payment System (IPPS) and the Long Term Care Hospital (LTCH) Prospective Payment System that will apply beginning in federal fiscal year 2011. Future issues of Payment Matters will discuss some of these provisions in greater depth. For now, the highlights of the final rule include provisions to:
- Update acute care hospital rates by 2.35 percent for hospitals that successfully report quality measures in fiscal year 2010, but then reduce the 2.6 percent market basket increase for inflation update by 0.25 percent, as required by the Affordable care Act, and apply a "documentation and coding" adjustment of -2.9 percent. The net result is a decrease of 0.4 percent in IPPS payments.
- Update LTCH rates by 2.5 percent for inflation, but reduce the inflation update by 0.5 percentage point as required by the Affordable Care Act and apply a -2.5 percent documentation and coding adjustment, for a net increase in payments to LTCHs of 0.5 percent.
New PPS for End Stage Renal Dialysis Facilities Effective January 1, 2011
By: Susan A. Turner
CMS issued a final rule on July 23, 2010 that creates a new bundled prospective payment system (PPS) for facilities that furnish renal dialysis services and home dialysis to Medicare beneficiaries with End-Stage Renal Disease (ESRD). This new rule replaces the current system, which pays facilities a composite rate for a defined set of items and services, while paying separately for drugs, laboratory tests, or other services that are not included in the composite rate. Under the new ESRD PPS, CMS will make a single bundled payment to the dialysis facility for each dialysis treatment that will cover all renal dialysis services and home dialysis. The new bundled payment system will be effective for dialysis treatments furnished to beneficiaries on or after Jan. 1, 2011.
Currently, Medicare pays ESRD facilities a composite rate for furnishing outpatient maintenance dialysis in the facility or in the beneficiary's home. The composite rate payment covers dialysis treatment costs and certain routinely furnished ESRD-related drugs, laboratory tests, and supplies. The composite rate is adjusted by a drug add-on payment that accounts for changes in the drug pricing methodology that occurred in 2005, and by basic case-mix adjustment factors including age and body size. A special adjustment is applied for services to pediatric patients. In addition, the composite rate is adjusted for geographic differences in costs using a wage index. For 2010, the unadjusted composite rate is $135.15 and the drug add-on payment is $20.33.
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