CMS Releases Hospital Outpatient Rule
On July 8, CMS published a proposed rule for the hospital outpatient and ambulatory surgical center payment systems and the electronic health records incentive program. Under the proposed rule, total hospital outpatient payments under Medicare are projected to increase next year by nearly $4.4 billion, or 9.5% over 2013.
The outpatient payment system, known as the Outpatient Prospective Payment System (“OPPS”), is currently a mix of prospective payments and fee-for-service reimbursements. 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 OPPS.
The proposed rule does not include any provisions on the physician fee schedule update or Sustainable Growth Rate (“SGR”) as these calculations are determined under a statutory formula. The rule will be published in the federal register on July 19. CMS will accept comments until September 6, and a final rule is expected to be published by November.
CMS Releases Proposed 2014 Physician Fee Schedule
On July 8, CMS also released a proposed rule for the annual adjustments of payment policies on the Medicare physician fee schedule. This rule would update payment rates and policies for services paid under the Medicare physician fee schedule on or after January 1, 2014.
The rule proposed changes to several quality reporting initiatives that relate to fee schedule payments, and it continues the implementation of the physician value-based payment modifier that affects payments to physician groups based on the quality and cost of the care they furnish to Medicare beneficiaries.
Similar to the Hospital Outpatient proposed rule, the physician fee schedule is subject to a 60-day comment period, with CMS accepting comments until September 6. Both proposed rules will be published in the Federal Register on July 18.
Medicare Director Asks Senate to Keep New Payment Systems in a ‘Doc Fix’
On July 10, Jonathan Blum, the director of Medicare at CMS, encouraged members of the Senate Finance Committee not to repeal new payment systems put in place as Congress attempts to replace the Medicare physician payment formula. Blum’s comment was a rebuke of the Energy and Commerce Committee draft, which calls for developing new physician pay models outside of CMS. Blum pointed to the recent Congressional Budget Office (“CBO”) score reduction as a sign of CMS managing payments more aggressively.
Senate Finance Chairman Max Baucus (D-MT) and ranking committee Republican Orrin Hatch (R-UT) both indicated their desire to develop a solution to pass a permanent SGR fix this year. The senators emphasized the importance of passing replacement legislation this year while the cost of repealing the SGR is the lowest it has been in years – $139 billion over 10 years, according to the CBO.
While the Senate Finance Committee has yet to release a plan for replacing the payment system, the committee has held a series of hearings in 2013 and requested input from medical providers and stakeholders. The SGR system has produced Medicare pay cuts that have been averted by Congress through numerous short-term legislative fixes over the past decade. If Congress does not pass at least another temporary patch, physician reimbursement will be cut by 25% on January 1, 2014.
Bills Introduced This Week
S. 1286: Sen. John Rockefeller (D-WV) introduced a bill that would amend Title XIX of the Social Security Act to encourage the adoption and use of certified electronic health record technology by safety net providers and clinics under the Medicaid program. A companion bill was introduced in the House (H.R. 2676) by Rep. Capps (D-CA).
H.R. 2651: Rep. Paulsen (R-MN) introduced a bill that intends to improve the coordination of critical care health services. The legislation would require an assessment of the current state of the U.S. critical care medical delivery system and implement policies to improve the effectiveness of care delivered to the critically ill and injured.
Next Week in Congress
The House Energy and Commerce Oversight Subcommittee announced it will hold a July 18 hearing on the Obama administration’s decision to delay the health law’s employer mandate.
On July 19, the House Energy and Commerce Health Subcommittee plans to mark up legislation to replace the Medicare SGR formula. The full committee is expected to take up the bill prior to leaving town for August. The markup comes on the heels of the committee releasing a second draft of the legislation on June 28.
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