Final OPPS rule links quality of care to payment

Four new quality measures

In announcing its final rule for the Hospital Outpatient Prospective Payment System (OPPS) for calendar year 2009, the Centers for Medicare & Medicaid Services (CMS) reiterated its intention to strengthen the tie between quality of care furnished to people in hospital outpatient departments and the payments hospitals receive for those services.

The final rule, issued Oct. 30, 2008, adds four additional quality measures that hospitals must track, bringing the total to 11 quality measures on which hospitals must submit data.

CMS will reduce the 2009 payment update factor by 2% for most services for hospitals that did not report the required quality measures for outpatient services in calendar year 2008 and will also reduce the beneficiary cost sharing for those services.

"The direct impact of the new quality initiatives will be felt by the beneficiaries Medicare serves, and as the nation's largest payer for health care services, we are pointing the way to better, safer, and more efficient care for all patients," CMS acting administrator Kerry Weems says.

First time payment tied to quality

This is the first time that payment for outpatient services has been tied to quality reporting.

Hospitals already had been required to report on seven quality measures including five measures of standards of care in the emergency department for acute myocardial infarction patients transferred to other facilities for care and two outpatient surgical care improvement measures.

CMS is adding four more measures on imaging efficiency for the 2010 update and is considering adding up to 18 additional quality measures, ranging from screening for fall risk to management of community-acquired pneumonia, in future years.

The outpatient quality measures are part of CMS' value-based purchasing initiative, which links payment to quality rather than just the delivery of services. CMS is required by the Deficit Reduction Act of 2005 to have a plan for value-based purchasing in place by 2009.

"The need for case management in the outpatient setting becomes more apparent as CMS extends value-based purchasing to that setting. In many organizations, the role of the case manager has focused on cost efficiency of care for acute care patients. The role of the case manager in the outpatient setting should focus on cost-effectiveness, but more importantly on the quality of care with specific reference to the quality measures established by CMS," says Deborah Hale, CCS, president and CEO of Administrative Consultant Service LLC, a health care consulting firm.

In announcing the final OPPS rule, the agency reiterated its commitment to implementing the value-based purchasing initiative across the continuum of care and to become "a prudent purchaser of health care."

CMS also has announced that it intends to move toward not paying for medical care in the hospital outpatient department that harms patients or leads to complications that could have been prevented.

The policy corresponds to the policy that took effect in October of not paying for hospital-acquired conditions during the inpatient stay.

"In this final rule, we are continuing to pay appropriately for care while working with health care providers as we look for ways to make sure beneficiaries who come in for treatment of one complaint don't leave with two as a result of adverse events during their outpatient visits," Weems says.

CMS announced that it will continue dialogue with stakeholders to develop the health care-associated conditions policy including selection of conditions for which it will not pay and how the payments would be reduced for those conditions.

The final rule states that CMS will exercise its administrative authority under the Medicare statue to develop and implement a policy that would not pay hospitals for care related to illness or injury acquired by the patient during an outpatient encounter.

The agency will announce later the hospital outpatient health care-associated conditions policy, which will make adjustments to OPPS payment similar to the adjustments to payments for the hospital-acquired conditions in the inpatient setting.

Other changes in the final rule include:

  • Creation of five imaging composite Ambulatory Payment Classifications (APCs), which bundle imaging services when two or more are provided in one session.
  • Creation of four new APCs to pay for visits to Type B emergency departments, which are not open around the clock. The rates are generally higher for clinic visits to hospitals but lower than payment rates to hospital emergency departments that are open around the clock.
  • Updating the conditions of coverage for ambulatory surgical centers, defining them as distinct entities that operate exclusively to provide surgical service for patients not requiring hospitalization.