December 4, 2013—Medicare Part B next year will continue paying hospitals for the acquisition and overhead costs of specified high-cost outpatient drugs at the same rate as in 2013, the Centers for Medicare and Medicaid Services (CMS) has decided.[ms-protect-content id=”2799″]
CMS set the calendar year 2014 payment rate for so-called “separately paid drugs and biologicals that do not have pass-through status” in its hospital outpatient prospective payment system (OPPS) final rule, which it released for public inspection on Nov. 27. This category of drugs includes relatively high-cost physician-administered injectable and infusion medicines, many of which are used to treat cancer and related anemia and nausea. The final OPPS rule will be formally published in the Federal Register on Dec. 10. The partial federal government shutdown in October delayed the rule’s release by about a month.
Under the rule, hospitals for the second straight year will be reimbursed for these drugs at the statutory default rate of average sales price (ASP) plus a 6 percent add-on payment for overhead. Due to federal budget sequestration, however, reimbursement for these drugs is effectively ASP plus 4.3 percent. Congress is debating whether to continue sequestration in 2014 and beyond.
Overall Medicare payments for hospital outpatient departments will rise by an estimated 1.7 percent in 2014 under the final rule, CMS said.
In a switch that has raised the ire of some hospital groups, CMS is replacing the current five levels of hospital clinic visit codes for both new and established patients with a single code describing all outpatient clinic visits. CMS said in a fact sheet that “a single code and payment for clinic visits is more administratively simple for hospitals and better reflects hospital resources involved in supporting an outpatient visit.” The American Hospital Association, however, said in a statement that the change means that “hospitals that provide care for large numbers of complex patients will receive payment well below the cost of treating these patients.”
When CMS issued the OPPS rule in proposed form earlier this year, it invited public comment on how it might gather data to help it “better understand the growing trend toward hospital acquisition of physician offices and subsequent treatment of those locations as off-campus provider-based outpatient departments.”
CMS said data-collection methods under consideration include “asking hospitals to break out the costs and charges for their provider-based departments as outpatient service cost centers on the Medicare hospital cost report.” Some hospitals, it noted, already break out these costs on the report because of the 340B program’s cost-reporting requirements.
In the final rule, CMS noted that the Medicare Payment Advisory Commission (MedPAC) indicated in its comments “that any data collection effort should not prevent the development of policies to align payment rates across settings.” In June, MedPAC issued a report urging Congress to reduce payments to hospitals for services that can be provided for less in in doctors’ offices.
CMS said it would consider commenters’ feedback “as we continue to consider approaches to collecting data on services furnished in off-campus provider-based departments.”[/ms-protect-content]