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CMS proposes 2014 outpatient PPS/ASC rule; plans to enforce supervision policy

July 12, 2013

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Hospitals would receive a 1.8% increase in their Medicare outpatient payments next year and ambulatory surgery centers (ASC) would see their payments rise by 0.9% under the proposed outpatient prospective payment system (PPS) and ASC rule issued July 8 by the Centers for Medicare & Medicaid Services (CMS).

In its 718-page proposed rule, CMS also would remove the moratorium – in place until the end of this year – on enforcement of its direct supervision requirement for critical access hospitals (CAH) and small rural hospitals.

The policy – strongly opposed by the AHA – requires a supervising physician or non-physician practitioner (NPP) to be immediately available whenever a Medicare patient received outpatient therapeutic services.

Under the proposed rule, hospitals’ payment rates are based on the projected inpatient market basket increase of 2.5% minus a proposed multifactor productivity adjustment of 0.4 percentage point and a 0.3 percentage point adjustment required by the “Patient Protection and Affordable Care Act.”

The proposed rule would collapse the current five levels of outpatient visit codes with a single code for each type of outpatient hospital visit, including clinic and Type A and Type B emergency department visits; package seven new categories of supporting items into the payment for the primary service; and create 29 comprehensive ambulatory payment classifications (APC) to replace existing device-dependent
APCs.

Physician supervision policy.


The agency’s direct supervision requirement stirs concerns in America’s rural heartland. Those concerns date back to 2009 when the agency first mandated the policy as part of that year’s outpatient PPS rule. The agency characterized the change as a “restatement and clarification” of existing outpatient payment policy that had been in place since 2001 – a move that placed hospitals at increased risk for unwarranted enforcement actions.

In an effort to allay rural hospitals’ concerns, CMS modified the policy somewhat and delayed its enforcement until 2014 for CAHs and small and rural PPS hospitals with100 or fewer beds. But CAH and other small rural hospital administrators say the policy does not reflect the realities of rural health care, because it would essentially require the round-theclock presence of physicians or NPPs. Many say they can neither find nor afford the medical staff to meet that requirement.

“In an environment of continuing health care professional shortages – particularly in rural areas – the direct supervision requirement will be difficult to implement for these hospitals,” said Linda Fishman, the AHA’s senior vice president for policy.

“This rule would require hospitals to engage more physicians and [NPPs] for direct supervisory coverage without a clear clinical need and will create patient access problems if hospitals are forced to discontinue or limit the hours of certain outpatient services.”


Responding to concerns raised by the AHA and rural hospitals, Sen. Jerry Moran, R-KS, recently introduced the AHA-backed “Protecting Access to Rural Therapy Services Act” – or “PARTS Act” – S. 1143. Among other provisions, the bill would allow general supervision by a physician or NPP for outpatient therapeutic services – meaning the service can be performed under their overall direction and control without them being present.

Quality reporting. Beginning in 2016, CMS proposes five new measures for the outpatient quality reporting (OQR) program, with data collection beginning next year. Of the five new measures, one assesses health care personnel influenza vaccination rates; two assess cataract surgery outcomes; and two assess colonoscopy follow up. CMS also proposes to adopt the cataract surgery and colonoscopy measures to the ASC quality reporting program for 2016.

The agency proposes to remove two OQR measures.

One measure assesses whether patients are discharged from the emergency department with records containing certain data elements, such as diagnosis, medications and a plan of care.

The other measure assesses the proportion of patients with certain cardiac procedures – such as valve surgery – that are referred to cardiac rehabilitation.

More than 4,000 hospitals, including general acute care hospitals, inpatient rehabilitation facilities, inpatient psychiatric facilities, long-term acute care hospitals, children’s hospitals, and cancer hospitals are paid under the outpatient PPS. There are approximately 5,000 Medicare-participating ASCs paid under the ASC payment system.

For more on the rule, click on: http://tinyurl.com/kxpkxrk.

Physician fee schedule. In a separate proposed rule, CMS issued the Medicare physician fee schedule (PFS) for 2014. Without congressional action, the PFS rule would reduce Medicare physician payments by an estimated 24.4% on Jan. 1. For more, click on: http://tinyurl.com/kr36uqx.

CMS said it will accept comments on the proposed rules until Sept. 6 and will respond with final rules by Nov. 1.