CMS put on display its annual proposed rates and policy changes for the CY 2008 Outpatient Prospective Payment System (OPPS) on July 16, 2007. This proposal includes proposed CY 2008 ASC rates as well. Comments are due to CMS no later than September 14^th.

Key policy issues in the proposed rule include:

Quality Data Reporting: Consistent with requirements for quality reporting requirements for inpatients, hospitals must now report on outpatient services.

10 new outpatient-specific quality measures:
- 5 emergency department measures for acute myocardial infarction
- 1 for heart failure
- 2 surgical measures for perioperative care
- 1 for community-acquired pneumonia
- 1 outcome measure for diabetes
If hospitals do not report data on these measures in CY 2008, their CY 2009 OPPS update will be reduced by 2 percent.
CMS also seeks public comments on 30 additional quality measures for use in CY 2009 or subsequently.
The administrative reporting requirements will mirror the ones used for inpatient quality measure reporting.

OPPS Payment Bundles: APCs now will include a larger package of services.

CMS proposes to enlarge the size of OPPS payment bundles by packaging the following 7 categories of supportive ancillary services into the primary diagnostic or treatment procedures with which they are used:
- Guidance services
- Image processing services
- Intraoperative services
- Imaging supervision and interpretation services
- Diagnostic radiopharmaceuticals
- Contrast agents
- Observation services, irrespective of the duration and nature of patient conditions.
In theory, this will promote greater efficiency by giving hospitals greater flexibility to manage resources.

Composite APCs: Two new “super-sized” APCs.

For two services that patients experience as one encounter, CMS proposes one bundled payment for the entire service, instead of paying several APCs for the various services provided. The two composite services are:
- Low dose rate prostate brachytherapy (with continued separate payment for brachytherapy sources)
- Cardiac electrophysiologic evaluation and ablation.
Again, the intent is to promote greater efficiencies.

Device-dependent Procedures

CMS proposes to reduce payment for certain device-dependent APCs when a hospital receives a partial credit from the manufacturer for the cost of a replacement device that is implanted.

Drugs and biologicals

CMS proposes to set payment for acquisition and overhead costs of certain separately payable drugs and biologicals at manufacturer’s averages sales price (ASP) plus 5 percent.
CMS proposes paying separately for drugs, biologicals and therapeutic radiopharmaceuticals costing $60 or more per day, based on mean costs as derived from hospital claims data.

Critical Access Hospitals: CMS wants to limit the ability of CAHs to co-locate and have provider-based facilities.

CMS proposes to no longer allow a necessary provider CAH to enter into co-location arrangements between the CAH and a hospital unless such arrangements were in effect on or before January 1, 2008 and the type and scope of services offered by the facility that is co-located with the necessary provider CAH do not change.
CMS clarifies that when a new owner acquires a CAH and assumes the original provider agreement, that does not constitute a new co-location arrangement and continues to be grandfathered.
CMS proposes that all CAHs, including necessary provider CAHs, may not operate a provider-based facility (including psychiatric or rehabilitation distinct part unit) that is within 35 miles of another hospital or CAH (15 miles if mountainous terrain or if accessible only by secondary roads).
If a CAH enters into a co-location agreement after January 1, 2008 or acquires or creates an off-campus facility after January 1, 2008 that does not satisfy the CAH distance requirements, the CAH’s provider agreement will be terminated.

Revisions to Hospital Conditions of Participation: These may require changes to hospital practices.

CMS proposes to revise the CoPs for Medical Staff, Medical Record services, and Surgical services, to required an updated examination, including any changes in a patient’s condition, to be completed and documented for each patient after admission or registration and prior to surgery or a procedure requiring anesthesia services (except minor procedures requiring local anesthetics). This change would apply to inpatients and outpatients.
CMS proposes that all inpatients and outpatients who have received anesthesia services have a postanesthesia evaluation completed and documents before discharge or transfer from postanesthesia recovery area. This would amend the CoP requiring postanesthesia evaluation for inpatients within 48 hours after surgery.

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CMS Issues Proposed Policy and Payment Changes for Hospital Outpatient Services:

Another Push to Improve Quality and Promote Efficiency

Another Push to Improve
Quality and Promote Efficiency