Medicare Outpatient Prospective Payment System Updated

The Centers for Medicare & Medicaid Services (CMS) issued a final rule with comment period updating the hospital Outpatient Prospective Payment System (OPPS), effective for services furnished during calendar year 2008. The final rule with comment period also updated the payment rates for the revised ambulatory surgical center (ASC) payment system, beginning in 2008.

“The changes included in this rule again signify our continuing commitment to making sure that Medicare beneficiaries receive high quality care delivered in an efficient manner,” said CMS acting administrator Kerry Weems.

After taking into account the market basket update and other factors that affect the level of payments, CMS estimates hospitals will receive an overall average increase of 3.8% in Medicare payments for outpatient services in 2008. Medicare expenditures for Part B services have increased during the past several years due in part to significant increases in spending for hospital outpatient services. The CMS Office of the Actuary projected that payments (including beneficiary coinsurance) under the OPPS will increase by 10% to approximately $36 billion in 2008 from $32.7 billion in 2007.

“The policies of the revised ASC payment system that are reflected in the 2008 payment rates further expand beneficiary choices by providing patients the flexibility to select, in consultation with their physicians, the most appropriate care setting for their particular surgical needs,” Weems said in a press release. “The revised system takes a major step toward eliminating financial incentives for choosing one care setting over another, thereby placing patients’ needs first, increasing efficiencies, and leading to savings for both beneficiaries and the Medicare program.”

The final rule with comment period better focuses the OPPS on value-based purchasing by expanding CMS’ efforts to link payment updates to reporting quality measures specific to hospital outpatient services. In addition, the reforms in this final rule with comment period will promote efficiencies within the OPPS payment structure by providing larger payment bundles for certain OPPS services. These larger payment bundles will provide hospitals with greater flexibility in managing their resources.

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