Medicare Hospital Outpatient Pay Tied to Quality

Medicare is making good on a promise to reduce what it sees as runaway costs for certain imaging services in its final rule on hospital outpatient payments for 2009.

The Centers for Medicare and Medicaid Services (CMS) also said that it will continue to hold outpatient departments accountable for quality of care by reducing payment when there has been a failure to meet reporting requirements.

In July, the CMS had proposed to increase outpatient pay by 3% in 2009; that has been increased to 3.6% in the final rule. Hospitals (and other entities that receive payments under the outpatient system) that do not report on the 11 quality measures required for 2009 will receive an increase of 1.6% in payments in 2010.

Quality is a big centerpiece of the new rule. The CMS put hospital outpatient departments on notice that, in the near future, it expects to propose the withholding of payment for care related to illnesses or injuries acquired during the outpatient encounter. Hospitals are already being held accountable for acquired conditions on the inpatient side.

The final rule, published in the Nov. 18 Federal Register, applies to 4,000 outpatient departments, according to the CMS. The agency expects to pay $30 billion in 2009 for outpatient services, up from an estimated $28 billion in 2008.

Imaging services received a special focus. As proposed earlier in the year, the CMS said that it will now make only a single payment for multiple images made in a single outpatient session.

The agency created five imaging-payment groups: ultrasound; computed tomography and computed tomographic angiography without contrast; CT and CTA with contrast; magnetic resonance imaging and magnetic resonance angiography without contrast; and MRI and MRA with contrast.

This new scheme may result in underpayment, according to Madeleine Smith, senior vice president of payment and health care delivery policy at the Advanced Medical Technology Association (AdvaMed), a medical device trade group. AdvaMed expressed concern about the policy when it was proposed because it may provide insufficient payments for multiple procedures when contrast is used with every procedure. AdvaMed also objected to the CMS's proposal that outpatient departments report on four imaging-quality measures in 2009.

Those measures include MRI of the lumbar spine for lower back pain; mammography follow-up rates; certain abdominal CT scans with contrast; and thorax CT with contrast.

The measures were reviewed by the National Quality Forum, but two of the four, certain CT scans and mammography follow-up rates, were rejected, Ms. Smith said in an interview.

Most device-related procedures in cardiology, neurology, and gynecology will receive minimal increases in payment. But some will see fairly large cuts, including implantation of left ventricular pacing leads (45% reduction) and placement of neurostimulator electrodes (49% reduction).

The agency also followed through on its proposal to institute four new payment groups for visits to “Type B” emergency departments (those that are not open around the clock). Type B reimbursement will be lower than reimbursement for full-service emergency departments.

In addition, over the objections of industry groups, the CMS is dropping the additional fee it was paying outpatient departments for the administration of intravenous immune globulin therapy.

Medicare also is updating conditions for coverage that ambulatory surgery centers must meet, including requirements that centers be more transparent about physicians' financial interests, and that appropriate postsurgical care be ensured.

Medicare is making good on a promise to reduce what it sees as runaway costs for certain imaging services in its final rule on hospital outpatient payments for 2009.

The Centers for Medicare and Medicaid Services (CMS) also said that it will continue to hold outpatient departments accountable for quality of care by reducing payment when there has been a failure to meet reporting requirements.

In July, the CMS had proposed to increase outpatient pay by 3% in 2009; that has been increased to 3.6% in the final rule. Hospitals (and other entities that receive payments under the outpatient system) that do not report on the 11 quality measures required for 2009 will receive an increase of 1.6% in payments in 2010.

Quality is a big centerpiece of the new rule. The CMS put hospital outpatient departments on notice that, in the near future, it expects to propose the withholding of payment for care related to illnesses or injuries acquired during the outpatient encounter. Hospitals are already being held accountable for acquired conditions on the inpatient side.

The final rule, published in the Nov. 18 Federal Register, applies to 4,000 outpatient departments, according to the CMS. The agency expects to pay $30 billion in 2009 for outpatient services, up from an estimated $28 billion in 2008.

Imaging services received a special focus. As proposed earlier in the year, the CMS said that it will now make only a single payment for multiple images made in a single outpatient session.

The agency created five imaging-payment groups: ultrasound; computed tomography and computed tomographic angiography without contrast; CT and CTA with contrast; magnetic resonance imaging and magnetic resonance angiography without contrast; and MRI and MRA with contrast.

This new scheme may result in underpayment, according to Madeleine Smith, senior vice president of payment and health care delivery policy at the Advanced Medical Technology Association (AdvaMed), a medical device trade group. AdvaMed expressed concern about the policy when it was proposed because it may provide insufficient payments for multiple procedures when contrast is used with every procedure. AdvaMed also objected to the CMS's proposal that outpatient departments report on four imaging-quality measures in 2009.

Those measures include MRI of the lumbar spine for lower back pain; mammography follow-up rates; certain abdominal CT scans with contrast; and thorax CT with contrast.

The measures were reviewed by the National Quality Forum, but two of the four, certain CT scans and mammography follow-up rates, were rejected, Ms. Smith said in an interview.

Most device-related procedures in cardiology, neurology, and gynecology will receive minimal increases in payment. But some will see fairly large cuts, including implantation of left ventricular pacing leads (45% reduction) and placement of neurostimulator electrodes (49% reduction).

The agency also followed through on its proposal to institute four new payment groups for visits to “Type B” emergency departments (those that are not open around the clock). Type B reimbursement will be lower than reimbursement for full-service emergency departments.

In addition, over the objections of industry groups, the CMS is dropping the additional fee it was paying outpatient departments for the administration of intravenous immune globulin therapy.

Medicare also is updating conditions for coverage that ambulatory surgery centers must meet, including requirements that centers be more transparent about physicians' financial interests, and that appropriate postsurgical care be ensured.

Medicare is making good on a promise to reduce what it sees as runaway costs for certain imaging services in its final rule on hospital outpatient payments for 2009.

The Centers for Medicare and Medicaid Services (CMS) also said that it will continue to hold outpatient departments accountable for quality of care by reducing payment when there has been a failure to meet reporting requirements.

In July, the CMS had proposed to increase outpatient pay by 3% in 2009; that has been increased to 3.6% in the final rule. Hospitals (and other entities that receive payments under the outpatient system) that do not report on the 11 quality measures required for 2009 will receive an increase of 1.6% in payments in 2010.

Quality is a big centerpiece of the new rule. The CMS put hospital outpatient departments on notice that, in the near future, it expects to propose the withholding of payment for care related to illnesses or injuries acquired during the outpatient encounter. Hospitals are already being held accountable for acquired conditions on the inpatient side.

The final rule, published in the Nov. 18 Federal Register, applies to 4,000 outpatient departments, according to the CMS. The agency expects to pay $30 billion in 2009 for outpatient services, up from an estimated $28 billion in 2008.

Imaging services received a special focus. As proposed earlier in the year, the CMS said that it will now make only a single payment for multiple images made in a single outpatient session.

The agency created five imaging-payment groups: ultrasound; computed tomography and computed tomographic angiography without contrast; CT and CTA with contrast; magnetic resonance imaging and magnetic resonance angiography without contrast; and MRI and MRA with contrast.

This new scheme may result in underpayment, according to Madeleine Smith, senior vice president of payment and health care delivery policy at the Advanced Medical Technology Association (AdvaMed), a medical device trade group. AdvaMed expressed concern about the policy when it was proposed because it may provide insufficient payments for multiple procedures when contrast is used with every procedure. AdvaMed also objected to the CMS's proposal that outpatient departments report on four imaging-quality measures in 2009.

Those measures include MRI of the lumbar spine for lower back pain; mammography follow-up rates; certain abdominal CT scans with contrast; and thorax CT with contrast.

The measures were reviewed by the National Quality Forum, but two of the four, certain CT scans and mammography follow-up rates, were rejected, Ms. Smith said in an interview.

Most device-related procedures in cardiology, neurology, and gynecology will receive minimal increases in payment. But some will see fairly large cuts, including implantation of left ventricular pacing leads (45% reduction) and placement of neurostimulator electrodes (49% reduction).

The agency also followed through on its proposal to institute four new payment groups for visits to “Type B” emergency departments (those that are not open around the clock). Type B reimbursement will be lower than reimbursement for full-service emergency departments.

In addition, over the objections of industry groups, the CMS is dropping the additional fee it was paying outpatient departments for the administration of intravenous immune globulin therapy.

Medicare also is updating conditions for coverage that ambulatory surgery centers must meet, including requirements that centers be more transparent about physicians' financial interests, and that appropriate postsurgical care be ensured.