Hospitals and ASCs see increases for 2003

Hospitals and surgery centers will see increases to their payment rates in 2003. The final rule for the hospital outpatient prospective payment system (OPPS) provides a congressionally mandated 3.5% inflationary update to hospitals’ Medicare outpatient payment rates for FY 2003. The final rule was issued Oct. 31 by the Centers for Medicare & Medicaid Services (CMS). It takes effect Jan. 1, 2003.

Here is a summary from the Chicago-based American Hospital Association (AHA):

  • The net effect of the rule is a 3.1% increase from last year for urban hospitals and a 6.2% increase for rural hospitals.
  • The rule does not include a pro-rata reduction in pass-through payments for some new and high-cost devices, drugs, and biologicals.
  • The rule lowers the outlier threshold from 3.5 to 2.75 times the amount of the ambulatory payment classification, which enables hospitals to reach the outlier threshold sooner. However, outlier reimbursement will drop from 50% to 45% of costs above the threshold amount.
  • While the regulation increases overall spending, the OPPS continues to pay hospitals only 83 cents for every dollar spent on outpatient care.

Surgery center rates increased by 3%

CMS has published payments for ambulatory surgery services that are increased by 3% across the board for services furnished on and between Oct. 1, 2002, and Sept. 30, 2003. Actual rates are subject to a cost-of-living formula. The new rates published by CMS are:

  • Group 1 — $333
  • Group 2 — $446
  • Group 3 — $510
  • Group 4 — $630
  • Group 5 — $717
  • Group 6 — $826 ($676 + $150 for intraocular lenses [IOLs])
  • Group 7 — $995
  • Group 8 — $973 ($823 + $150 for IOLs)
  • Group 9 — $1,339

Group 9, which originally was established in 1991, has not been used before. According to the Alexandria, VA-based Federated Ambulatory Surgery Association (FASA), CMS included it in this year’s payment update because it expects that among the codes to be added in 2003, some will be in Group 9.

"Exactly what procedures will be in Group 9 cannot be said with certainty, but an idea can be obtained by looking at those on the proposed list in 1998 that would have had a payment rate of more than $1,200," FASA says. "Of course, until the government acts, no one can know for certain what procedures will be added or the reimbursement that will be paid."

(Editor’s note: The 1998 proposed list was published June 12, 1998, in the Federal Register. For more information, see "Some say proposed changes to ASC payments will be devastating," Same-Day Surgery, August 1998.)