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CMS Releases CY 2014 OPPS Proposed Rule

July 12, 2013—The Centers for Medicare and Medicaid Services (CMS) July 8 released the calendar year (CY) 2014 Outpatient Prospective Payment System (OPPS) proposed rule updating payment policies and payment rates for services furnished to Medicare beneficiaries in hospital outpatient departments and ambulatory surgical centers (ASCs) beginning Jan. 1, 2014.  The proposed rule also would update and refine the requirements for the Hospital Outpatient Quality Reporting (OQR) Program, the ASC Quality Reporting (ASCQR) Program, and the Hospital Value-Based Purchasing (VBP) Program.  Comments on the proposed rule are due Sept. 6, 2013.

CMS proposes to raise the base OPPS payment rate by 1.8 percent.  This update is based on a projected inpatient market basket increase of 2.5 percent, less a productivity adjustment of 0.4 percentage points, and a negative 0.3 percentage point adjustment required by the Affordable Care Act (ACA, P.L. 111-148 and P.L. 111-152).  CMS estimates that major teaching hospitals would see an overall average increase in OPPS payments of 3.1 percent in 2014, compared to a 1.8 percent increase for minor teaching hospitals and a 1.2 percent increase for non-teaching hospitals.

To continue movement from a fee-for-service to a bundled payment system, the rule includes a proposal to package the following seven items and services into the payment for other supportive services:

  • Drugs, biologicals, and radiopharmaceuticals that function as supplies when used in a diagnostic test or procedure;
  • Drugs and biologicals that function as supplies or devices in a surgical procedure;
  • Laboratory tests;
  • Procedures described by add-on codes;
  • Certain ancillary services;
  • Diagnostic tests on the bypass list; and
  • Device removal procedures. 

CMS also proposes to replace 29 device-dependent ambulatory payment classifications (APCs) with comprehensive APCs.

Additionally, CMS proposes to collapse the current five levels of outpatient visit codes into a single code.  The single code would represent the payment level for each distinct type of visit and would be based on mean costs of the five level codes based on 2012 claims data.

CMS proposes to pay for separately payable drugs and biologicals at the average sales price (ASP) plus 6.0 percent, the same rate hospitals currently receive.

While CMS did not propose any changes to the current provider-based policies, the agency is considering collecting information to analyze the frequency, type, and payment for services furnished in off-campus provider-based hospital departments and requests comments on the best means to collect this information. 

The proposed rule also responds to the recent federal court decision Kaiser Foundation Hospitals v. Sebelius, in which the court held that a provider could appeal factual findings that would be used to determine reimbursement in later fiscal periods, even if the provider did not raise an issue with the factual findings during the 3-year cost report reopening window.  In the proposed rule, CMS clarifies that factual findings from an earlier period are subject to the 3-year reopening rules, even if they are being used to determine reimbursement for a later fiscal period.

Regarding the OQR program, CMS proposes the addition of five quality measures starting in CY 2016, and the removal of two measures in CY 2015. The proposed measures focus on endoscopy/poly surveillance, cataract survey, and healthcare personnel receiving the influenza vaccination.

CMS also proposes two significant changes to the VBP program in the OPPS rule. The first is an independent CMS review process for hospitals that wish to appeal the calculation of their performance score. The second addition is the inclusion of the proposed baseline and performance periods for the central-line-associated blood stream infection (CLABSI), catheter-associated urinary tract infection (CAUTI), and surgical site infection (SSI) measures for FY 2016.

Lastly CMS also proposes to add four quality measures, relating to endoscopy/poly surveillance and cataract surgery, to the Ambulatory Surgical Center Quality Reporting (ASCQR) Program in CY 2016.


Scott Wetzel, M.P.P.
Lead, Quality Reporting
Telephone: 202-828-0495

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