December 7, 2001

Medicare Outpatient PPS Rule Published

The Centers for Medicare and Medicaid Services (CMS) Nov. 30 published the 2002 Medicare outpatient prospective payment system (OPPS) rule [66 Federal Register 59855]. This is a companion to a Nov. 2 final rule that focused primarily on OPPS "pass through" payments for new drugs and devices [see Washington Highlights, Nov. 2].

The Nov. 30 rule contains the calendar year 2002 ambulatory payment classification (APC) payment rates. In addition, it includes changes to the APC groups, outlier methodology, and changes to the provider-based regulations.

Due primarily to a decision by CMS to "fold in" 75 percent of the costs of new devices into the calculation of the APC [see Washington Highlights, Nov. 2], APC payments for procedures that contain these devices will increase in 2002, but a pro rata reduction of 69 percent will be applied to the pass through payments associated with the remaining costs. Also, because of the requirement that the effect of all of the regulatory changes must be budget neutral, outpatient services that do not contain "pass through" devices, such as clinic and emergency room services, will see payment declines.

Because the final rule changes and 2002 rates were published later than they were originally scheduled, CMS has announced that it will not have the operational systems in place to process CY 2002 claims until April 1, at the earliest (see related article).

Information: Karen Fisher, AAMC Division of Health Care Affairs, 202-862-6140.