Diagnostics & Imaging Week Washington Editor

WASHINGTON — The Centers for Medicare & Medicaid Services (CMS; Baltimore) has proposed payment rate changes in the Outpatient Prospective Payment System (OPPS) rule for acute-care hospitals that would have an impact on payment rates for imaging and diagnostic services.

Beginning next year, CMS will lower coinsurance payments that patients in Medicare will have to pay for outpatient services. The agency also announced that payments to acute-care hospitals will increase by 3.2% and community hospitals in rural areas will get a pay boost of 6.6%.

"The proposed rule increases payments for many preventive services and contains a number of changes designed to make sure that Medicare makes efficient use of taxpayer money through more accurate payments for drugs and imaging services in hospital outpatient departments," said Mark McClellan, CMS administrator.

Coinsurance rates for OPPS services are being reduced gradually until the beneficiary's share for any outpatient service will be 20% of the hospital's total payment, CMS said. Under the proposed rule, the coinsurance rate for 12 additional medical and surgical ambulatory payment classifications (APCs) will decline to the 20% minimum.

The proposed rule would also reduce the maximum coinsurance rate for any service to 40% of the total payment to the hospital for the APCs in 2006, down from 45% this year. Overall, average beneficiary co-payments for all outpatient services are expected to fall to 30% of total payments under the proposal.

The move fits in with Medicare's overall program for the prevention and early detection of diseases, by increasing payment rates to hospitals for most screening examinations that are covered by Medicare.

For example, CMS is proposing to increase payment for the "Welcome to Medicare" physical when furnished in a hospital outpatient department by nearly 7% in 2006.

CMS also plans to pay for most drugs, biologicals and radiopharmaceuticals administered in hospital outpatient departments based on competitive market prices.

As part of the increased payment rate proposal, the agency also plans to make payments for some diagnostic imaging procedures reflect their limited additional cost when they are performed with other imaging procedures in the same session with the patient.

CMS has identified 11 families of imaging procedures, based on the type of imaging modality used and contiguous body area, where this proposed policy would apply. When two or more procedures in the same family are performed, the first procedure would be paid in full and a discount of 50% would be applied to subsequent procedures.

The changes to the payment rates and increased volume of services contribute to an overall increase in projected payments to more than 4,200 hospitals for Medicare outpatient services of $27.5 billion in 2006 compared to projected payments of $26.1 billion in 2005, a 5.4% in-crease.