Medical Device Daily Washington Editor

The Centers for Medicare & Medicaid Services (CMS) has finally published its final rule for reimbursement of hospital outpatient departments (HOPDs) and ambulatory surgical centers (ASCs) for calendar year 2009, a proposal the agency initially floated this past summer (Medical Device Daily, July 8, 2008). As the saying goes, there is good news and bad news.

The good news – for hospitals anyway – is that CMS will boost payment for hospital outpatient departments (HOPDs) by 3.6%, which CMS chalked up to an inflation adjustment. The bad news is that ASCs are looking at flat payment rates in 2009.

However, the Oct. 30 statement included a warning that the agency sees “an urgent and compelling rationale ... to develop and implement a policy that would not pay hospitals” for the much-maligned hospital-acquired conditions that are part of the agency’s value-based purchasing (VBP) agenda. In this instance, the policy would apply to outpatient services, which up to now have been excluded.

Addressing that imperative, acting CMS administrator Kerry Weems said in the statement that the agency wants to “make sure beneficiaries who come in for treatment for one complaint don’t leave with two as a result of adverse events during their visit.” The statement indicates that such a policy, “which we expect to propose in the future, would be known as hospital outpatient healthcare associated conditions, or HOP-HACs.”

CMS also addressed the hospital quality reporting program, stating that it expects to trim payments to HOPDs by 2% “for most services for hospitals that were required to report quality measures but failed to meet the requirements ... for CY 2009.” This reduction in payment will extend to beneficiary co-pays, but will not apply to “payments for separately payable pass-through drugs and devices” and a range of other payments under the pass-through reimbursement scheme.

The agency also let it be known that it is “finalizing its proposal to increase the number of measures that hospitals are required to report to receive the full calendar year (CY) 2010 market basket update from seven measures in CY 2008 to 11 measures in CY 2009.”

Kathy Bryant, President of the Ambulatory Surgical Center Association (Alexandria, Virginia), told Medical Device Daily that the payment-rate freeze for ASCs “was not a surprise,” and that ASCs do not expect a rate increase until 2010. However, Bryant said “the 2.47% drop on the wage rate was a surprise.” She said the association projects that ASCs “will make only 59% of what hospital outpatient departments will make for a given procedure” as a result.

Part B doc fee final rule also out

CMS also published a final rule for physician payment under Medicare’s Part B program, and while the cuts to doctor’s fees under the sustainable growth rate mechanism were averted by congressional action yet again, physicians will have to do better on healthcare information technology to get a raise of more than 1.1%.

The Oct. 30 statement notes that physicians who “adopt and use qualified electronic prescribing (e-prescribing) systems to transmit prescriptions to pharmacies may earn an incentive payment of 2%” in addition to 2% for participation in the Physician Quality Reporting Initiative. Hence, doctors can boost their Medicare dollars by 5.1%, but whether a 2% bonus will incent a substantial number of doctor’s offices to purchase e-prescribing software is difficult to predict.

Acting CMS administrator Kerry Weems said in the statement that e-prescribing “can greatly reduce the number of medication errors that jeopardize the health and safety of Medicare patients and waste precious healthcare dollars treating conditions that should never have happened.”

Systems that qualify for the e-prescribing bonus must alert doctors to the availability of generic drugs as well as to drug-to-drug interactions, according to the statement. The system must also provide a module that indicates that no prescription was written for the patient, apparently an effort to keep doctors from defaulting to written prescriptions.

CMS states that nearly a million – roughly 980,000 – physicians and non-physician practitioners bill for Medicare services each year and that spending on these Part B fees for calendar year 2009 will hit almost $62 billion, up from almost $60 billion in the current calendar year.

Ted Epperly, MD, President of the American Academy of Family Physicians (Leawood, Kansas), told MDD that where PQRI bonuses are concerned, most doctors are inclined to say “I’ll believe them when I see them” because of difference of opinion as to whether a report qualifies. He said doctors are “turning in more than CMS is giving them credit for having done,” but he also stated that “the biggest issue in there is that there’s a lot of work and the checks are pretty meager.”

As for e-prescribing, Epperly said that about half of all physician practices “have put in electronic medical records already, and their willingness to take the leap into e-prescribing is there.” He said another quarter of practices are eyeing the idea, and the rest are saying, “no way we’re going to do this.”

Epperly also noted that “not all the pharmacies have the technology and the software” needed for e-prescribing, adding that pharmacies should also be under some compulsion by CMS to do so.

James Rohack, MD, President-elect of the American Medical Association (AMA; Washington) said in an e-mailed statement that the new rule “confirms that physicians caring for seniors would have faced a harsh payment cut of 15.1% next year if Congress had not stepped in to replace the looming cut with a payment increase.” Rohack’s comments refer to cuts to Part B doctors’ fees under the sustainable growth rate mechanism, which has never resulted in cuts in the five years it has been in existence.

Rohack also said AMA is “committed to working with Congress to enact permanent Medicare reform in 2009 so that physicians won’t have to face fresh cuts in years to come,” and that the association is reviewing the rule for further comment.