2007 Final Rule for the Hospital Outpatient Prospective Payment System
(HOPPS)
The Centers for Medicare and Medicaid Services (CMS) published the 2007
final HOPPS rule on their website on November 1, 2006. The rule
is expected to be published in the Federal Register on November 24. The
final rule will result in an overall average increase of 3.0 in Medicare
payments to hospitals. Provisions described below in this newsletter
will be implemented January 1, 2007:
Payment for Contrast Agents
For 2006, CMS used average sales price (ASP) + 6% as a proxy for average
acquisition cost. For 2007, CMS proposed to use ASP + 5% for the payment
of separately payable drugs other than radiopharmaceuticals. GE
Healthcare urged CMS to maintain separate payment for contrast agents
at ASP + 6%. CMS accepted this recommendation and will continue
to pay ASP + 6%. Hospitals should report contrast on their claim
forms using the Q code series Q9945-Q9957.
The final rule indicates that High Osmolar Contrast Media (HOCM) codes
Q9958-Q9964 have status indicator “N”, which means the contrast
agents are packaged into the payment for the procedure. Separate
payment is not available.
Radiopharmaceutical Payment in the HOPPS Setting
For 2006, CMS adopted a temporary 1 year policy for the payment of
radiopharmaceuticals that was based on a hospital’s charges
for each radiopharmaceutical adjusted to cost (CCR). CMS encouraged
hospitals to adjust their charges to reflect the price paid for the
radiopharmaceutical as well as the associated handling cost for the
product.
For 2007, CMS proposed to pay for separately payable radiopharmaceuticals
using means costs derived from the CY 2005 claims data. However,
the data did not reflect changes that CMS instructed hospitals to make
for 2006 and many of the claims for nuclear medicine procedures did not
contain a code for a radiopharmaceutical. The result was that the
proposed payment amounts produced significant variations from current
payment levels.
GE Healthcare, other manufacturers, various medical professional societies,
and the APC Advisory Panel urged CMS to continue to use CCR for one more
year. CMS has adopted this recommendation and invites interested
parties to suggest alternative payment methodologies for 2008.
In order to assure proper payment for separately payable drugs, hospitals
should verify that their charge masters are current and that coding for
nuclear medicine procedures and radiopharmaceuticals is accurate.
Multiple Diagnostic Imaging Procedure Payment Reduction
Last year, CMS proposed to reduce payment by 50% for certain multiple
diagnostic imaging procedures within a “family” of procedures
including ultrasound, CT, CTA, MRI, and MRA modalities. Ultimately,
they declined to do so for 2006 and have once again decided not to adopt
the reduction for hospital outpatient multiple imaging procedures for
2007.
Threshold for Separately Payable Outpatient Drugs
CMS will continue the $50 threshold for determining separately payable
outpatient drugs. They plan to adjust the threshold annually using the
Producer Price Index. The amount proposed and adopted for 2007
is $55.
For more information about the HOPPS final rule visit:
http://www.cms.hhs.gov/HospitalOutpatientPPS/
Downloads/CMS1506FC.pdf.
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