Medicare Compliance & Reimbursement

Hospitals will get an average 4.5 percent reimbursement increase for outpatient services under the Centers for Medicare & Medicaid Services' 2004 outpatient prospective payment system final rule, published in the Nov. 7 Federal Register. CMS projects that nearly 4,400 hospitals will receive about $22.8 billion through the 2004 OPPS. The agency also projects that temporary additional "pass-through" payments for new devices, drugs and biologicals will remain within the statutory cap of 2 percent of total OPPS payments. Therefore, there will be no across-the-board reduction in pass-through payments, which aim to avoid discouraging the use of effective but expensive treatments that are too new for their costs to have been incorporated into OPPS ambulatory payment classifications. CMS is creating separate ambulatory payment classifications for drugs and biologicals with median costs above $50, as opposed to the $150 threshold in the 2003 rule and the 2004 proposed rule. Payment rates for these products will be set through hospital cost data, but as in 2003 a dampening mechanism will trim payment reductions for products where median costs have gone down 15 percent or more.

Therapists Face 4-Percent Cut Unless Congress implements a fix, therapy providers will face a 4 percent overall cut in Medicare reimbursement in 2004. Other notable rehab-specific elements in the fee schedule: an updated list of codes considered a designated health service under the physician self-referral rule (aka, the Stark law), a discussion of "incident to" billing rules, and responses to comments on the draft fee schedule submitted by the American Speech-Language-Hearing Association and the American Physical Therapy Association. To see the final rule, go to http://a257.g.akamaitech.net/7/257/2422/14mar20010800/edocket.access.gpo.gov/2003/03-27639.htm.