CMS released the 2007 hospital outpatient prospective payment system (OPPS) and ASC rule and fee schedule last week.  It went on display November 1; it will be published in the coming weeks with an effective date of January 1, 2007.

UPDATE 11/27/06: The final rule was published Friday 11/24 in the Federal Register.

As is the case across many of CMS’s activities lately, one overarching emphasis of the rule is quality.

An excerpt from the CMS press release, available in full here, follows:

CMS estimates that hospitals will receive an overall average increase of 3.0 percent in Medicare payments for outpatient department services in 2007 due to the changes in this final rule.

While the market basket update accounts for increases in the costs of providing a service, much of the growth in outpatient spending results from increases in utilization and complexity (volume and intensity).  CMS estimates that between 2005 and 2006, hospital outpatient expenditures increased by nearly 12 percent, mainly due to growth in the volume and intensity of services.  CMS projects that the expenditures under the OPPS in CY 2007 will be approximately 9.2 percent higher than the estimated CY 2006 expenditures.  That rate of growth in expenditures is of great concern to CMS, not only because of its impact on all taxpayers, but especially on beneficiaries whose monthly premiums cover 25 percent of Part B expenditures.

In order to promote greater value in the purchase of hospital outpatient services for Medicare beneficiaries, the final rule ties OPPS rate increases to the reporting of quality measures beginning in 2009.  The final rule announces CMS’ plans to develop additional quality measures that are specifically appropriate for hospital outpatient care, and will require hospitals to report the outpatient-specific measures beginning in CY 2009.

“In this final rule, we are taking one more step toward rewarding hospitals for providing quality care, not just in the inpatient setting, but also in the outpatient department,” said [Acting CMS Administrator Leslie] Norwalk.  “While our primary focus is on quality care for Medicare beneficiaries, we expect that our quality initiatives will stimulate better care for all patients who come to the hospital outpatient department.”

The final rule also includes an expansion of the hospital reporting of additional quality measures for inpatient services beginning in FY 2008, based on measures endorsed by the National Quality Forum (NQF) and supported by the privately-led Hospital Quality Alliance (HQA).

— David Harlow