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Government Affairs Home > Teaching Hospitals > Medicare Outpatient PPS

Calendar Year 2004 Medicare Outpatient Prospective Payment System Proposed Rule

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Current Status as of October 17, 2003

The Centers for Medicare & Medicaid Services (CMS) Aug. 12 published in the Federal Register [68 FR 47966] a proposed rule containing changes to the Medicare outpatient prospective payment system (OPPS) that would be effective for services provided on or after Jan. 1, 2004. The OPPS governs Medicare payments for the hospital component of outpatient services; the physician payment is governed by the Medicare physician fee schedule. The AAMC submitted comments on the proposed rule.

Brief Summary

Pursuant to current law, the base OPPS payment rate (known as the "conversion factor") will be updated by the full increase in the hospital inpatient market basket, 3.4 percent. The Aug. 12 rule also proposes a number of changes to specific ambulatory payment classifications (APCs), which determine the payment rates for hospital outpatient services assigned to APCs.

In an area that had been under consideration for several years, the proposed rule contains national guidelines for determining the proper code for assigning emergency and clinic visits. Currently, hospitals are required to have an internal set of guidelines to determine what level of visit to report for each patient. The proposed national guidelines are based on recommendations of an independent panel convened by the American Hospital Association and the American Health Information Management Association.

Particularly noteworthy in the proposed rule is the announcement that, pursuant to legislative mandate, transitional corridor payments for most hospitals will no longer be available beginning in 2004. Hospitals were eligible for these additional payments if the payments they received under the OPPS were less than the payments they would have received for the same services under the payment system in effect before the OPPS. Qualifying cancer and children's hospitals would continue to be eligible to receive these payments.

Proposed Rule

The proposed rule published August 12, 2003, in the Federal Register, is available in six parts in text format and Portable Document Format (PDF)

42 CFR Parts 410 and 419 Medicare Program; Changes to the Hospital Outpatient Prospective Payment System and Calendar Year 2004 Payment Rates; Proposed Rule

  • Part I [pp. 47965–48248]: Text / PDF

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Contacts

Karen Fisher, Sr. Director, Health Care Affairs
AAMC Health Care Affairs
kfisher@aamc.org
(202) 862-6140

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