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CMS Proposes Hospital OPPS and ASC Payment Changes for 2011

July 9, 2010

The Centers for Medicare and Medicaid Services (CMS) July 2 posted on its website a proposed rule that contains changes to the calendar year (CY) 2011 outpatient prospective payment system (OPPS) as well as proposed payment rates for Ambulatory Surgical Centers (ASCs). Included in the proposed rule are graduate medical education regulatory provisions (see related story) required by the Affordable Care Act (P.L. 111-148 and P.L. 111-152). If finalized, CMS will implement the changes to both the OPPS and the ASC payment system Jan. 1, 2011. Comments on the proposed rule are due Aug. 31.

CMS proposes to update the hospital base payments by an increase factor of 2.15 percent. This update reflects an inflationary increase of 2.4 percent minus a 0.25 percentage point reduction required under the new reform law.

CMS has developed a three-year plan for the hospital outpatient quality reporting program. The agency proposes a set of measures to be included in the CY 2012-CY 2014 payment years. The proposed measures address imaging efficiency, emergency department throughput, diabetes, and health information technology adoption. CMS also proposes to implement a new process for data validation, which would be the same as what is currently being implemented in the inpatient reporting program.

The Tax Relief and Health Care Act (TRHCA, P.L. 109-432) requires CMS to implement a quality reporting program for Ambulatory Surgery Centers (ASC). The agency previously has deferred on this issue due to the implementation of a new ASC payment system. CMS continues to propose deferring implementation of the quality reporting program until future rulemaking.

Under the proposed rule, for CY 2011, CMS would pay for the acquisition and pharmacy overhead costs of separately payable drugs and biologicals without pass-through status at the average sales price (ASP) plus 6 percent. This payment rate represents an increase of 2 percentage points from the rate these products currently receive. However, the agency notes that this rate may change as more updated data become available.

CMS would apply a budget neutrality adjustment for cancer hospitals and improve payment rates for partial hospitalization services provided by hospitals.

CMS also proposes to decrease the fixed-dollar outlier threshold from $2,175 in CY 2010 to $2,025 in CY 2011.


Jennifer Faerberg, MHSA
Director, Clinical Transformation Unit
Telephone: 202-862-6221

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Telephone: 202-903-0806