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Learn about policy issues important to medical schools and teaching hospitals, with Executive Vice President Atul Grover, M.D., Ph.D.

Washington Highlights

CMS Proposes Hospital OPPS and ASC Payment Changes for 2012

July 8, 2011—The Centers for Medicare and Medicaid Services (CMS) July 1 posted on its website a proposed rule that contains changes to the calendar year (CY) 2012 outpatient prospective payment system (OPPS) as well as proposed payment rates for ambulatory surgical centers (ASCs). CMS will implement final changes to both the OPPS and the ASC payment system Jan. 1, 2012. Comments on the proposed rule are due Aug. 30.

CMS proposes a hospital outpatient base payment update of 1.5 percent. This update reflects an inflationary increase of 2.8 percentage point minus a 1.2 percentage point multifactor productivity adjustment and a 0.1 percentage point adjustment. Both reductions are required by the Affordable Care Act (ACA, P.L. 111-148 and P.L. 111-152).

The rule also contains proposals related to the Hospital Value-Based Purchasing (VBP) Program. Under the VBP Program, CMS must modify the weighting of the patient care domains for federal fiscal year (FY) 2014, given the addition of two care domains: outcomes and efficiency. CMS has proposed the weighting for FY 2014 as follows: 20 percent clinical process measures, 30 percent HCAHPS, 30 percent outcomes, and 20 percent efficiency.

The proposed rule includes an expansion to the current hospital outpatient quality reporting program (HOP QDRP) with the addition of ten proposed measures for CY 2014 and one for CY 2015.

CMS also proposes a new quality reporting program for ASCs. Starting in CY 2014, ASCs would be required to submit data on eight quality measures.

Under the proposed rule, for CY 2012 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 4 percent. This payment rate represents a decrease of 1 percentage point from the rate these products currently receive.

CMS would apply a budget neutrality adjustment for cancer hospitals and would establish a two-tiered payment system for partial hospitalization services provided by hospitals. Additionally, CMS proposes to establish an independent advisory review process to allow for consideration of supervision levels other than direct supervision for specific outpatient hospital therapeutic services.

CMS also proposes to increase the fixed-dollar outlier threshold from $2,025 in CY 2011 to $2,100 in CY 2012.

Contact:

Jennifer Faerberg, MHSA
Director, Clinical Transformation Unit
Telephone: 202-862-6221
Email: jfaerberg@aamc.org

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For More Information

Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806
Email: jkleinman@aamc.org