The 2008 hospital outpatient prospective payment system (OPPS or HOPPS) regulations will be published by CMS in the November 27 Federal RegisterThe 2008 OPPS rule went on display earlier this month, and includes a number of significant changes.  The CMS press release identified the following highlights:

  * Linking payment updates to quality measure reporting:  The Medicare Improvements and Extensions Act under Division B, Title I of the Tax Relief Health Care Act of 2006, Pub. L. 109-432 (MIEA-THRCA) requires the Secretary of Health and Human Services to develop measures to make it possible to assess the quality of care (including medication errors) furnished by hospitals in outpatient settings. In CY 2008, CMS is requiring that hospitals report seven consensus quality measures, including five emergency department acute myocardial infarction transfer measures and two surgical care improvement measures. Hospitals that are paid under the Inpatient Prospective Payment System are required to report the applicable hospital outpatient quality measures in order to receive the full OPPS market basket update in CY 2009; otherwise, their CY 2009 update will be reduced by 2.0 percentage points.

    * Expanded packaging for CY 2008:  In order to further efficiencies within the OPPS, CMS is extending the current packaging approach to include guidance services, image processing services, intraoperative services, imaging supervision and interpretation services, diagnostic radiopharmaceuticals, contrast agents, and observation services.  These groups of supportive ancillary services are integral to the performance of primary diagnostic and treatment procedures, so that packaging payment for these additional services results in larger payment bundles that will provide hospitals with the flexibility to manage their resources efficiently.

    * Introduction of composite ambulatory payment classification (APC) groups:   In this final rule with comment period, CMS is also adopting the use of composite APCs to encourage efficiencies by providing one bundled payment for several major services. Composite APCs encourage even greater hospital efficiencies than expanding packaging by making a single payment for the totality of hospital outpatient care provided during an encounter. CMS will provide payment for extended outpatient visits with observation care through two composite APCs and will also utilize composite APCs to pay for low dose rate prostate brachytherapy and cardiac electrophysiologic evaluation and ablation services.

    * Ensuring Medicare and its beneficiaries benefit from device credits:  Medicare payment and beneficiary liability for certain device-dependent APC groups will be reduced when a hospital receives a substantial partial credit from the manufacturer toward the cost of a replacement device implanted in a procedure.  This parallels Medicare‚Äôs inpatient hospital policy and extends the current OPPS payment reduction policy when a hospital replaces an implantable device without cost.

David Harlow