Hospitals, ASCs Will See 2010 Payment Update

Hospitals who successfully participated in quality data reporting for outpatient services will receive a 2.1 percent inflation update in their 2010 payment rates for services furnished to Medicare beneficiaries in outpatient departments, according to the Centers for Medicare & Medicaid Services (CMS). Ambulatory surgical centers (ASCs) will receive a 1.2 percent inflation update beginning Jan. 1, 2010 using the same payment methodology as in 2009.

These and other payment and policy changes can be found in the 2010 Hospital Outpatient Prospective Payment System (OPPS) and ASC final rule with comment period — put on display for review Oct. 30.

Ambulatory Surgical Center CASCC

Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) provisions implemented in the final rule will:

  • enable hospitals to bill Medicare for new pulmonary and intensive cardiac rehabilitation services furnished in hospital outpatient departments to Medicare beneficiaries; and 
  • provide payments to rural hospitals for kidney disease education services furnished in outpatient departments to Medicare beneficiaries with stage 5 chronic kidney disease.

The 2010 OPPS/ASC final rule implements several other payment and policy changes, such as:

  • a payment adjustment for the hospital pharmacy overhead costs of separately payable drugs and biologicals. CMS will pay hospitals for most separately payable drugs and biologicals administered in hospital outpatient departments at the manufacturer’s average sales price (ASP) plus 4 percent;
  • a requirement for physician supervision of therapeutic and diagnostic services;
  • adopting the proposal to pay for brachytherapy sources based on median unit costs in 2010, as calculated from claims data according to the standard OPPS rate-setting methodology; and
  • continuing to pay two separate partial hospitalization program (PHP) per diem rates: one for days with three services ($150) and one for days with four or more services ($211). The CMHC multiple outlier threshold will continue to be set at 3.4 times the APC payment amount for the higher intensity partial hospitalization day for 2010.

Note: In light of the imminent deadline for submitting ASP data for OPPS payment beginning on Jan. 1, 2010, manufacturers wishing to submit ASP data for the January 2010 OPPS update should contact CMS immediately through the OPPS mailbox at

The final rule also expands the list of surgical procedures that Medicare will cover when performed in ASCs.

Quality Reporting Data

Under the Hospital Outpatient Quality Data Reporting Program (HOP QDRP), hospitals that did not participate in the program or did not successfully report the quality measures will receive an update in 2010 equal to the annual inflation update factor minus 2.0 percentage points for a net update of 0.1 percent. CMS will continue to require HOP QDRP participating hospitals to report the existing seven emergency department and perioperative care measures, as well as the four existing claims-based imaging efficiency measures for the 2011 payment determination. CMS also will phase in a new HOP QDRP validation requirement.

Medicare has once again delayed requiring ASCs to report quality data. ASCs will not be required to report quality data in 2010.

The 2010 OPPS/ASC final rule with comment period will appear in the Nov. 20 Federal Register.  Comments on designated provisions are due by 5 p.m. EST on Dec. 29. 

Stay tuned to EdgeBlast and Coding Edge for additional information on the final 2010 policies for the OPPS and ASC payment system brought to you by the AAPC.


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