Medicare publishes hospital OPPS increase

ASC rates updated beginning Oct. 1

The Centers for Medicare & Medicaid Services (CMS) has published proposed payment rates for hospital outpatient services, effective Jan. 1, 2004, and new rates for ambulatory surgery centers (ASCs), effective Oct. 1, 2003.

The proposed hospital rates were published Aug. 12, 2003, in the Federal Register. Hospital rates would increase 3.8% in the aggregate, sources say. (To obtain a copy, go Also, copies of the Federal Register are available at many public and academic libraries.)

CMS and Congress are considering linking hospital outpatient and ASC payment rates. The proposed hospital rates show how ASC rates might be affected if CMS or Congress approve a new payment system linking the rates in the two settings. (See chart illustrating the current ASC payment rate, 2004 ASC rate, current hospital payment rate, and proposed hospital payment rate for the top 20 ASC procedures by volume on the Same-Day Surgery web site, Click on "toolbox" and look under "reimbursement" for "Current and 2004 Payment Rates by HCPCS Code.")

On Aug. 8, Medicare made updates to the Medicare rates and wage index for ASC payments. The rates are:

• Group 1: $340

• Group 2: $455

• Group 3: $520

• Group 4: $643

• Group 5: $731

• Group 6: $840 ($690 + $150 for intraocular lens)

• Group 7: $1,015

• Group 8: $989 ($839 + $150 for intraocular lens)

• Group 9: $1,366

Because most carriers are not expected to have their computers updated by Oct. 1, CMS gave carriers the option of holding claims until the updated ASC rates and wage indexes are installed in their system or pay the claims at the old rate until they have loaded the new rates and indexes into their system. The second option requires them to go back, once the new rates and indexes are installed, and pay providers the difference.

It is expected that all carriers will have their systems updated by the end of this month, according to the Federated Ambulatory Surgery Association. A complete copy of the carrier memorandum is available at: AB03116.pdf.

These carrier instructions reflect current Medicare law, which provides ASC with a full consumer price index (CPI) update. Legislation pending in Congress at press time (H.R.1) would limit inflation adjustments to CPI-2% for fiscal years 2004 through 2008. If enacted, the rates posted in this notice would be reduced to reflect the smaller inflation adjustment. The CPI-2% change could result in a nominal update or no update to ASC rates, depending on how high the inflation rate is at the time, sources say.