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CMS Publishes 2014 Outpatient Prospective Payment System and Ambulatory Surgical Center Final Rule

Tuesday, December 17, 2013   (0 Comments)
Posted by: Becky Dryden
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CMS Publishes 2014 Outpatient Prospective Payment System and Ambulatory Surgical Center Final Rule

December 9, 2013

The Centers for Medicare & Medicaid Services (CMS) issued the final Calendar Year (CY) 2014 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System Policy Changes and Payment Rates final rule. The final rule updates the OPPS payment rate by 1.7 percent for CY 2014. Thiswill be approximately $50.4 billion, an increase of approximately $4.372 billion compared to CY 2013 payments,The rule also includes the following changes to OPPS payment policy that impact WOC nurses.

Revisions to Payment for Skin Substitutes

During the proposed OPPS rule issued on July 19th, CMS proposed to unconditionally package all drugs and biologicals that function as supplies or devices in a surgical procedure beginning in the CY 2014 OPPS. This payment bundling includes wound care products, specifically skin substitutes. CMS argues that packaging payment for skin substitutes into the Ambulatory Payment Classification (APC) payment for the related surgical procedures would result in a total prospective payment that is more reflective of the average resource costs of the procedures because prices for these products vary significantly from product to product. CMS hopes that packaging will encourage hospitals to more effectively negotiate prices with manufacturers and suppliers and establish protocols that ensure that only necessary services are provided.

WOCN was opposed to this proposed rule and suggested in comments that CMS recognize that there are a wide variety of products available within the skin substitute category and that each has a different clinical function and treatment protocol. Thus, lumping all products into the same payment methodology would discourage use of those products that were more expensive.

In its final rule CMS confirmed its proposal to bundle payment for skin substitutes, but did divide the skin substitutes into two groups for packaging purposes: high cost skin substitutes and low cost skin substitutes. Assignments to the high cost or low cost groups depend upon a comparison of the July 2013 payment amount for the skin substitute in OPPS to the weighted average payment per unit of all skin substitutes using the skin substitute utilization from the CY 2012 claims data and the July 2013 payment amounts in OPPS.

Skin substitutes with a payment amount above $32 per sq cm are classified in the high cost group and those at or below $32 are classified in the low cost group. CMS created Table 13 in the final rule that lists the skin substitutes and their assignment as either a high cost or low cost skin substitute. They also note that a few skin substitute products are applied as either liquids or powders per milliliter or per milligram and are employed in procedures outside of CPT codes 15271 through 15278. These products will not be classified as either high cost or low cost but will be packaged into the surgical procedure in which they are used. CMS has directed providers to the following tables as a reference guide. 2014 HOPPS SS Chart >>


This rule affects Medicare patients in hospital outpatient settings only; treatment of Medicare patients in private offices or commercially insured patients in any setting is not impacted.

Collapsing of Evaluation and Management (E/M) Services

For outpatient clinic visits, CMS is reducing the current five levels of E/M services into one Health Care Procedure Coding System (HCPCS) code describing all single visits The new HCPCS code will apply to all outpatient clinic visits (except emergency room visits). CMS will no longer recognize CPT codes 99201 through 99205 (new patient clinic visits) and 99211 through 99215 (established patient clinic visits) under the OPPS starting in January 2014.

Requirements for Payment of Outpatient Therapeutic (‘‘Incident To’’) Hospital or CAH Services

CMS has amended the conditions of payment for therapeutic outpatient or critical access hospitals (CAH) services and supplies furnished "incident to" a physician's or nonphysician practitioner's service. CMS now requires that individuals furnishing these services do so in compliance with applicable State law. This final policy does not impose any new requirements on hospitals that bill the Medicare program because practitioners and other personnel furnishing services already are required to comply with the laws of the State in which the services are furnished. However, it does provide Medicare with an avenue to deny payment for outpatient therapeutic services if the services are not furnished in accordance with state law.

Hospital Value-Based Purchasing Program Updates

The Affordable Care Act, requires the Secretary to establish a hospital value-based purchasing program (the Hospital Value-Based Purchasing (VBP) Program) under which value-based incentive payments are made in a fiscal year to hospitals that meet performance standards established for a performance period for such fiscal year. Both the performance standards and the performance period for a fiscal year are to be established by the CMS. CMS rewards hospitals based on the quality of care provided to Medicare patients, how closely best clinical practices are followed, and how well hospitals enhance patients' experiences of care during hospital stays. Hospitals are no longer paid solely based on the quantity of services they provide.

The OPPS rule makes final CMS' performance and baseline periods for three measures that will be applicable to the FY 2016 VBP. Those three measures include: central line-associated bloodstream infection, catheter-associated urinary tract infection and surgical site infection. These measures are also part of the Hospital Acquired Conditions Reduction Program, which means that hospitals could be penalized under both programs. For more information on the VBP and the measures associated with the program go to:

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