May 4, 2001

AAMC Holds Teleconference on Outpatient PPS

On April 26, the AAMC held a teleconference, in which about 150 AAMC constituents participated, on several technical aspects of the Medicare outpatient prospective payment system (OPPS). The speakers on the phone call were staff from the Health Care Financing Administration (HCFA).

The call focused primarily on a change in how new devices are to be identified for cost-based "pass through" payments under the OPPS. Prior to April 1, 2001, these devices were identified on an item-specific basis. However, the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA) mandated that effective April 1, only "categories" of devices are identified for pass through payments and hospitals are responsible for identifying which devices fall within a particular category. Tom Gustafson, Director of the Centers for Health Plans and Providers (CHPP) within HCFA, provided an overview of the new change and then answered questions posed by constituents.

During the call, Dr. Gustafson mentioned that HCFA is in the process of estimating the amount spent by Medicare for new drug and device pass through payments. Under OPPS, if the level of these payments exceeds 2.5 percent of total OPPS payments, the pass-through payments must be reduced on a pro-rata basis. If HCFA's analyses indicate that pass-through payments must be reduced, such a reduction would be done on a prospective basis, with the pro-rata reductions being announced in the CY 2002 OPPS proposed rule, scheduled to be published in early summer.

Information: Karen Fisher, 202-862-6140, or Jeff Patyk, 202-828-0498, AAMC Division of Health Care Affairs.