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Hospital and Health System


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CMS to Bolster Quality of Care in Hospital Outpatient Departments

CMS plans to strengthen the tie between the quality of care for Medicare beneficiaries in hospital outpatient departments (HOPDs) and the payments hospitals receive for those services. In a final rule establishing Medicare payment and policy changes for services in HOPDs and ambulatory surgical centers (ASCs) for 2009, CMS will implement a policy that will not pay hospitals for care related to illness or injuries acquired by the patient during a hospital outpatient encounter. Such a policy, which is expected to be proposed in the future, would be known as hospital outpatient healthcare-associated conditions (HOP-HACs), and it would make adjustments to OPPS payments to ensure equitable and appropriate payment for care, similar to the quality adjustments applied to payment for hospital-acquired conditions in the inpatient setting.

The final outpatient prospective payment system/ambulatory surgical center payment system (OPPS/ASC) rule also includes a 3.6 percent annual inflation update for HOPDs; and adopts changes to payment policies for HOPDs and ASCs beginning on January 1, 2009. The law sets the ASC update for CY 2009 at 0 percent.

The rule also establishes new conditions of coverage for ASCs that reflect current ASC practice by focusing on the care provided to patients and the impact of that care on patient outcomes. These will help ensure ASCs are safely equipped and qualified to perform a much broader range of services under the revised ASC payment system, which was implemented on January 1, 2008 and will be in its second year of a four-year transition in the coming year. The new ASC CfCs will help improve assurance of the quality and safety of the care patients receive in ASCs.

The changes in the final rule will apply to outpatient services furnished by more than 4,000 HOPDs in general acute care hospitals, inpatient rehabilitation facilities, inpatient psychiatric facilities, long-term acute care hospitals, community mental health centers, children’s hospitals and cancer hospitals. CMS projects that hospitals will receive $30.1 billion in 2009 for outpatient services furnished to Medicare beneficiaries, up from $28.5 billion in projected payments for 2008. Furthermore, CMS expects to make payments of almost $3.9 billion in 2009 to more than 5,100 ASCs that participate in Medicare, compared with $3.5 billion projected for 2008.

Under the final rule, the amount beneficiaries will pay for outpatient services will continue to decline based on a formula in the Medicare law that is designed to provide a gradual transition to 20 percent coinsurance for all ambulatory payment classifications (APCs).

Source: Centers for Medicare & Medicaid Services, October 30, 2008

The State of the Hospital Industry — 2008 Edition

This book reports data from 4 primary public data sets: PPS Minimum Data Set (Medicare Cost Reports), MedPAR (Medicare Inpatient Claims), Hospital Outpatient Prospective Payment System (Medicare Outpatient Claims) and Standard Analytical Outpatient File (Medicare Outpatient Claims). Additionally, this publication provides an insightful industry summary from a leading expert in hospital finance, as well as a review of how hospitals can measure the value their facilities provide to their communities.

The State of the Hospital Industry — 2008 Edition is available from the Healthcare Intelligence Network for $189 by visiting our Online Bookstore or by calling toll-free (888) 446-3530.

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IMPORTANT NOTICE: This information is designed to provide accurate and authoritative information on the business of healthcare. It is distributed with the understanding that Healthcare Intelligence Network is not engaged in rendering legal advice. If legal advice is required, the services of a competent professional should be retained.

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