CY 2004 Outpatient PPS Payments
To Increase 4.5 Percent Under Final Rule
{November 7, 2003 - Under the final
rule published in the Nov. 7 Federal Register,
Medicare outpatient prospective payment system (OPPS) payments
for services provided on or after Jan. 1, 2004 will increase
by an average of 4.5 percent. This increase reflects an inflationary
increase to the base payment rate (the "conversion factor")
equal to the full hospital market increase of 3.4 percent
plus additional upward adjustments. The Centers for Medicare
and Medicaid Services (CMS) expects to pay hospitals about
$22.8 billion in 2004 through the OPPS.
In the final rule, CMS also set side 1.3 percent of outpatient
payments to make additional "pass through" payments
for qualifying new drugs and devices. This percentage is lower
than the 2.0 percent originally proposed, largely because
fewer new items qualified for the additional payments. Because
these payments are budget-neutral, the final conversion factor
was reduced by 1.3 percent rather than the 2.0 percent reduction
contained in the proposed rule.
In another area of importance to teaching hospitals, the
final rule implements the current law requirement that transitional
corridor payments cease at the end of 2003. These payments
were implemented when the OPPS began for a period of three
years to help offset large losses by hospitals due to the
transition from the former payment system to the OPPS.
Information:
Karen Fisher, Senior Associate Vice President
AAMC Health Care Affairs
kfisher@aamc.org
(202) 862-6140
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