CMS-1404-P

Medicare Program: Proposed Changes to the Hospital Outpatient Prospective Payment System and CY 2009 Payment Rates; Proposed Changes to the Ambulatory Surgical Center Payment System and CY 2009 Payment Rates

This proposed rule, in part, would revise the Medicare hospital outpatient prospective payment system (OPPS) to implement applicable statutory requirements and changes arising from our continuing experience with this system. In this proposed rule, we describe the proposed changes to the amounts and factors used to determine the payment rates for Medicare hospital outpatient services paid under the prospective payment system. These changes would be applicable to services furnished on or after January 1, 2009.

In addition, this proposed rule, in part, would update the revised Medicare ambulatory surgical center (ASC) payment system to implement applicable statutory requirements and changes arising from our continuing experience with this system. In this proposed rule, we propose the applicable relative payment weights and amounts for services furnished in ASCs, specific Health Care Procedure Coding System codes to which these proposed changes would apply, and other pertinent ratesetting information for the CY 2009 ASC payment system. These changes would be applicable to services furnished on or after January 1, 2009.

This proposed rule was put on display at the Federal Register on July 3, 2008, prior to the enactment of the H.R. 6331, the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA), on July 15, 2008.  Because certain provisions of MIPPA supersede certain CY 2009 proposals included in this proposed rule, the Final Changes to the Hospital Outpatient Prospective Payment System and CY 2009 Payment Rates will implement the changes required by MIPPA, even though these changes are not reflected in the CY 2009 proposal.  The following proposed CY 2009 provisions are impacted by MIPPA:

• Section II. D. "Proposed Wage Index Changes." Section 124 of MIPPA extends through September 30, 2009 the reclassification of certain hospitals that was previously extended by section 117 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA). It also extends certain special exception wage indices referenced in the FY 2005 inpatient prospective payment system (IPPS) final rule (69 FR 49105 and 49107) through the last date of the extension of the reclassification under 106(a) of the Medicare Improvement and Extension Act of under Division B, Title I of the Tax Relief Health Care Act 2006.
• Section II.E. "Proposed OPPS Payments to Certain Rural Hospitals." Section 147 of MIPPA extends transitional outpatient payments (TOPs) to small rural hospitals through CY 2009 and expands transitional outpatient payments (TOPs) to include small sole community hospitals for CY 2009.
• Section V. B. "Proposed OPPS Payment for Drugs, Biologicals and Radiopharmaceuticals without Pass-Through Status." Section 142 of MIPPA amends section 1833(t)(16)(C) of the Act, as amended by section 106 of MMSEA, to extend for an additional 18 months, through January 1, 2010, payment for therapeutic radiopharmaceuticals at hospitals' charges adjusted to cost.
• Section VII. "Proposed OPPS Payment for Brachytherapy Sources." Section 142 of MIPPA amends section 1833(t)(16)(C) of the Act, as amended by section 106 of MMSEA, to extend for an additional 18 months, through January 1, 2010, payment for brachytherapy sources at hospitals' charges adjusted to cost.
• Section XV.D. "Proposed ASC Payment for Covered Surgical Procedures and Covered Ancillary Services." Because section 142 of MIPPA requires OPPS payment for brachytherapy sources at charges adjusted to cost for CY 2009, ASCs will be paid at contractor-priced rates in CY 2009 for brachytherapy sources since prospective OPPS rates are not available. Section 131 of MIPPA provides a 1.1 percent increase in the physician payment update for CY 2009. Therefore, this change to physician payment may affect CY 2009 ASC payment for covered ancillary radiology services and covered office-based surgical procedures, where rates are capped at the Medicare Physician Fee Schedule (MPFS) nonfacility practice expense relative value unit amounts.

The proposed rule (CMS-1404-P) is available in the "Related Links Outside CMS" below.These files are located in the "Downloads" section below:

Addendum AA - a list of covered surgical procedures under the revised ASC payment system, including Category I and Category III CPT and Level II HCPCS codes. Included are surgical procedures that receive packaged payment through the payment for covered surgical procedures, as well as those that are paid separately. Payment indicators (defined in Addendum DD1) designate each procedure's payment status. Nine surgical procedures are proposed for addition to the list of covered surgical procedures for CY 2009 and five procedures are proposed for new designation as office-based procedures for, CY 2009.

Addendum BB - a list of radiology services and other covered ancillary services eligible for ASC payment under the revised ASC payment system when provided integral to an ASC covered surgical procedure. Included are ancillary services that receive packaged payment through the payment for covered surgical procedures, as well as those that are paid separately. Payment indicators (defined in Addendum DD1) designate each service's payment status.

Addendum DD1 - a list of ASC payment indicators used in Addenda AA and BB to provide payment information regarding covered surgical procedures and covered ancillary services, respectively, under the revised ASC payment system. The payment indicators represent policy-relevant characteristics of HCPCS codes related to their payment status in ASCs; for example, whether a code is designated as packaged, office-based, or device-intensive.

Addendum DD2 - a list of ASC comment indicators, including "CH" which is used in Addenda AA and BB to identify a proposed change in the ASC payment status of a specific HCPCS code with respect to its treatment in the CY 2008 April ASC update and "NI" for a new code that is assigned an interim payment indicator which is open to comment.

Addendum EE - a list of surgical procedures excluded from Medicare payment in ASCs. The surgical procedures on that exclusionary list are those that are on the OPPS inpatient list, CPT unlisted codes, surgical procedures that are not recognized for payment under Medicare, and those that CMS medical advisors determined pose a significant risk to beneficiary safety or would be expected to require an overnight stay when provided in ASCs.

Addendum A - This Excel file lists, in APC order, the name, payment status indicator, relative weight, payment rate, and copayment amount(s) for the 2009 APC groups.

Median Costs for Hospital Outpatient Services, by ambulatory payment classification (APC) group - This Excel file displays median costs, by APC group, for services payable under the OPPS in calendar year 2009. The data are based on claims for hospital outpatient services provided January 1, 2007 through December 31, 2007.

Description of Preamble Tables (CMS-1404-P ASC Preamble Tables file located in the Downloads section below)

TABLE 36.-- NEW LEVEL II HCPCS CODES IMPLEMENTED IN APRIL 2008

TABLE 37.-- NEW LEVEL II HCPCS CODES IMPLEMENTED IN JULY 2008

TABLE 38.--PROPOSED NEW ASC COVERED SURGICAL PROCEDURES FOR CY 2009

TABLE 39.--CY 2009 PROPOSED NEW DESIGNATIONS OF ASC COVERED SURGICAL PROCEDURES AS OFFICE-BASED

TABLE 40:--CY 2008 OFFICE-BASED PROCEDURES FOR WHICH THEIR PROPOSED CY 2009 DESIGNATION IS TEMORARILY OFFICE-BASED

TABLE 41.--ASC COVERED SURGICAL PROCEDURES PROPOSED FOR DESIGNATION AS DEVICE-INTENSIVE FOR CY 2009

TABLE 42.--PROPOSED CY 2009 ADJUSTMENTS TO PAYMENTS FOR ASC COVERED SURGICAL PROCEDURES IN CASES OF DEVICES REPORTED AT NO COST OR WITH FULL OR PARTIAL CREDIT

TABLE 43.--PROPOSED DEVICES FOR WHICH THE "FB" OR "FC" MODIFIER MUST BE REPORTED WITH THE PROCEDURE CODE WHEN FURNISHED AT NO COST OR WITH FULL OR PARTIAL CREDIT

TABLE 44.--INSERTION OF IOL PROCEDURES AND THEIR PROPOSED CY 2009 ASC PAYMENT RATES

TABLE 47.--ESTIMATED CY 2009 IMPACT OF THE REVISED ASC PAYMENT SYSTEM ON ESTIMATED AGGREGATE CY 2009 MEDICARE PROGRAM PAYMENTS UNDER THE 50/50 TRANSITION BLEND AND WITHOUT A TRANSITION, BY SURGICAL SPECIALTY GROUP

TABLE 48.--ESTIMATED IMPACT OF PROPOSED UPDATE TO CY 2009 ASC PAYMENT SYSTEM ON AGGREGATE PAYMENTS FOR SELECTED PROCEDURES

TABLE 49.--ACCOUNTING STATEMENT: CLASSIFICATION OF ESTIMATED EXPENDITURES FROM CY 2008 TO CY 2009 AS A RESULT OF THE CY 2009 UPDATE TO THE REVISED ASC PAYMENT SYSTEM

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