The Centers for Medicare & Medicaid Services (CMS) on July 6 released three proposed rules for calendar year (CY) 2013 – the outpatient prospective payment system (PPS) and ambulatory surgical center (ASC) rule, the physician fee schedule (PFS) rule, and the home health (HH) payment system rule. Highlights of the three proposed regulations follow.
HIGHLIGHTS OF THE OUTPATIENT PPS/ASC PROPOSED RULE
Payment Update: The proposed rule includes a Patient Protection and Affordable Care Act (ACA)-required productivity reduction of 0.8 percentage points and an additional reduction of 0.1 percentage point to the CY 2013 market-basket update of 3.0 percent. This results in a proposed market-basket update of 2.1 percent for those hospitals that publicly report data on 22 quality measures.
Quality Measures: CMS does not propose any new quality measures in the CY 2013 outpatient PPS proposed rule. CMS proposes technical data submission modifications to the outpatient, ASC and inpatient rehabilitation facility quality reporting programs.
Geometric Mean-Based Relative Payment Weights: In an effort to improve its cost estimation, CMS proposes to use the geometric mean costs of services within an Ambulatory Payment Classification to set the relative payment weights of services, rather than the median costs that have been used since the inception of the outpatient PPS.
Physician Supervision: CMS proposes to extend through CY 2013 its moratorium on enforcing the direct supervision policy for outpatient therapeutic services provided in critical access hospitals (CAHs) and in small and rural hospitals. Payment for Drugs: CMS proposes to pay for separately payable drugs and biologicals at the statutory default rate of average sales price (ASP) plus 6 percent – an increase from the CY 2012 rate of ASP plus 4 percent. This rate is intended to include drugs’ acquisition and pharmacy overhead costs.
Inpatient and Outpatient Status: CMS requests comment on how to clarify its instructions for inpatient versus outpatient status for Medicare payment policy purposes.
HIGHLIGHTS OF THE MEDICARE PHYSICIAN FEE SCHEDULE PROPOSED RULE
Payment Update: Without additional congressional action, CMS estimates that Medicare physician payments will decline by a mandated 27 percent on Jan. 1, 2013 due to the flawed Sustainable Growth Rate (SGR) methodology.
Primary Care and Care Coordination: CMS proposes to explicitly pay physicians and qualified non-physician practitioners (NPP) for post-discharge transitional care management services in the 30 days following a hospital, skilled nursing facility, outpatient observation or community mental health center discharge. This would include non-face-to-face care management provided by clinical staff members.
Multiple Procedure Payment Reduction (MPPR) for Imaging Services: The rule proposes to apply a 25 percent MPPR to the technical component of cardiovascular and ophthalmology diagnostic services provided by the same physician (or group practice) to the same patient on the same day.
Value Modifier: CMS proposes to implement the new value-based payment modifier in CY 2015 for groups of physicians with 25 or more eligible professionals. The groups would have the option to participate and place 1.0 percent of their payments at risk for upward or downward adjustment based on the quality and cost of care they provide.
Outpatient Therapy: As required by law, CMS proposes to collect claims-based data on patient condition and function, services delivered and outcomes achieved over an episode of physical therapy, occupational therapy and speech language pathology services to develop an improved payment system for Medicare therapy services.
Certified Registered Nurse Anesthetists (CRNA) and Pain Management Services: The rule would allow CRNAs to independently bill Medicare for chronic pain management services (rather than “incident to” a physician or NPP) as long as the CRNA is able to furnish these services in accordance with state scope of practice laws.
HIGHLIGHTS OF THE HOME HEALTH PROPOSED RULE
Payment Update: For CY 2013, CMS proposes to reduce Medicare payments to home health agencies by 0.1 percent from 2012 levels. This decrease includes a 2.5 percent market-basket update, a reduction for updating the wage index, payment reductions mandated by the ACA, and a negative 1.32 percent coding offset. Despite CMS’s analysis indicating that nominal case mix continues to grow and the agency’s belief that a larger coding offset in CY 2013 is warranted, CMS did not increase the planned 1.32 percent coding cut, which is the second part of a phase-in initiated last year.
Face-to-Face Encounter: CMS proposes to allow NPPs in the inpatient setting to conduct the face-to-face encounter required to certify the need for home care.
New Provider Sanctions: The proposed rule adds further sanctions for agencies that fall out of compliance with Medicare conditions of participation, including monetary penalties, payment suspension and temporary management. Due to the CMS and state-level infrastructure changes that would be required to implement the new sanctions, the proposed sanctions would take effect one year after the final rule is issued.
The outpatient PPS/ASC proposed rule and the PFS proposed rule will be published in the July 30 Federal Register. The HH proposed rule will be published in the July 13 Federal Register.
Comments for each of the proposed rules must be submitted to CMS on or before Sept. 4. The rules will be finalized in November and take effect Jan. 1, 2013. Watch for American Hospital Association Regulatory Advisories with further details in the coming weeks.