[Federal Register Volume 75, Number 148 (Tuesday, August 3, 2010)]
[Notices]
[Pages 45769-46168]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-16400]
Federal Register / Vol. 75, No. 148 / Tuesday, August 3, 2010 /
Notices
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
[CMS-1504-N]
RIN 0938-AQ08
Medicare Program; Changes to the Hospital Outpatient Prospective
Payment System and Ambulatory Surgical Center Payment System for CY
2010, and Extension of Part B Payment for Services Furnished by
Hospitals or Clinics Operated by the Indian Health Service, Indian
Tribes, or Tribal Organizations Made by the Affordable Care Act
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Notice.
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SUMMARY: This Notice contains the final wage indices, hospital
reclassifications, payment rates, impacts and addenda for payments made
under the Medicare hospital outpatient payment system (OPPS) for CY
2010. This Notice also contains the payment rates and addenda for
payments made under the Medicare Ambulatory Surgical Center (ASC)
payment system for CY 2010. The final rates, wage indices, addenda and
impacts for the OPPS and as applicable for the ASC payment system
contained in this Notice reflect the provisions of the Affordable Care
Act. It also announces the extension of payment under Medicare Part B
to hospitals and ambulatory care clinics operated by the Indian Health
Service, Indian Tribes, or Tribal Organizations.
DATES: Effective Date: The revised CY 2010 national unadjusted OPPS and
ASC payment rates described in this Notice are effective for payments
for services furnished on or after January 1, 2010.
FOR FURTHER INFORMATION CONTACT: Alberta Dwivedi, (410) 786-0378.
SUPPLEMENTARY INFORMATION:
I. Provisions of the Notice
A. Medicare Hospital Outpatient Prospective Payment System (OPPS)
1. Background
We finalized changes to the payment rates and factors under the
hospital outpatient prospective payment system (OPPS) in the CY 2010
OPPS/ASC final rule with comment period appearing in the November 20,
2009 Federal Register. On March 23, 2010, subsequent to the publication
of the CY 2010 OPPS/ASC final rule, the Patient Protection and
Affordable Care Act (Pub. L. 111-148) was signed into law. Shortly
thereafter, on March 30, 2010, the Health Care and Education
Reconciliation Act of 2010 (Pub. L. 111-152) was signed into law. These
two laws are discussed in this Notice and are collectively referred to
as the ``Affordable Care Act'' throughout this Notice. As discussed in
detail below, several provisions of these public laws revised
components of the OPPS, and those revisions required us to revise the
payment rates and various factors under the CY 2010 OPPS. This Notice
addresses the provisions of the Affordable Care Act that impact the CY
2010 OPPS final wage index tables, rates, and impacts. We note that the
payment rates and policies set forth in the CY 2010 OPPS/ASC final rule
with comment period appearing in the November 20, 2009 Federal Register
continue to apply to those aspects of the OPPS that are unaffected by
the Affordable Care Act. This Notice makes no changes to the OPPS
payment methodologies or policies.
2. CY 2010 OPPS OPD Fee Schedule Increase Factor
Section 1833(t)(3)(C)(ii) of the Act requires us to update the
conversion factor used to determine payment rates under the OPPS on an
annual basis using the OPD fee schedule increase factor in
1833(t)(3)(C)(iv) of the Act for the year involved. For purposes of
section 1833(t)(3)(C)(iv) of the Act, subject to 1833(t)(17) and
1833(t)(3)(F), the OPD fee schedule increase factor is equal to the
market basket percentage increase applicable under section
1886(b)(3)(B)(iii) of the Act to hospital discharges occurring during
the fiscal year ending in such year, reduced by 1 percentage point for
such factor for services furnished in each of 2000 and 2002. In
addition, under 1833(t)(17) of the Act, hospitals that fail to meet the
reporting requirements of the Hospital Outpatient Quality Data
Reporting Program (HOP QDRP) are subject to a reduction of 2.0
percentage points from the OPD fee schedule increase factor. In
accordance with 1833(t)(3)(C)(iv), the CY 2010 OPD fee schedule
increase factor (commonly referred to as the ``hospital operating
market basket increase factor'') finalized in the CY 2010 OPPS final
rule was 2.1 percent (74 FR 60419). In addition, under the CY 2010
OPPS/ASC final rule (74 FR 60419), a hospital that fails to meet the
reporting requirements of the HOP QDRP reporting requirements receives
a .1 percent update (that is, the CY 2010 estimate of the OPD fee
schedule increase factor of 2.1 percent minus 2.0 percentage points)
for services to which the OPD fee schedule increase factor applies.
Section 1833(t)(3)(F)(ii) and (G)(i) of the Social Security Act, as
added by section 3401(i) of the Public Law 111-148, and as amended by
section 10319(g) of such Act and section 1105(e) of Public Law 111-152,
required the Secretary after calculating the OPD fee schedule increase
factor, to reduce such factor by an adjustment of 0.25 percentage
point, effective for services furnished on or after January 1, 2010 and
before January 1, 2011. (In addition, new 1833(t)(3)(F) of the Act also
provides that application of this subparagraph [1833(t)(3)(F)] may
result in the increase factor under section 1833(t)(3)(C)(iv) of the
Act being less than 0.0 for a year, and may result in payment rates
under the payment system under this subsection for a year being less
than such payment rates for the preceding year.) Therefore, the
reduction of 0.25 percentage point applied to the full hospital
operating market basket increase factor of 2.1 percent results in a
revised hospital operating market basket increase factor of 1.85
percent. A hospital that failed to meet the reporting requirements of
the HOP QDRP reporting requirements receives a negative 0.15 percent
hospital operating market basket increase factor (that is, the revised
hospital operating market basket increase factor of 1.85 percent minus
2.0 percentage points.)
3. CY 2010 OPPS Conversion Factor
To calculate the OPPS conversion factor for CY 2010 in the CY 2010
OPPS/ASC final rule with comment period (74 FR 60419), we increased the
CY 2009 conversion factor of $66.059 by 2.1 percent. We then adjusted
the conversion factor for CY 2010 to ensure that any revisions we made
to our updates for a revised wage index and rural adjustment were
budget neutral. We calculated an overall budget neutrality factor of
0.9997 for wage index changes by comparing total payments from our
simulation model using the FY 2010 IPPS final wage index values to
those total payments using the FY 2009 IPPS final wage index values.
For CY 2010, we did not propose a change to our rural adjustment
policy. Therefore, the budget neutrality factor for the rural
adjustment was 1.0000. For the CY 2010 OPPS/ASC final rule, we
estimated that pass-through spending for both drugs and biologicals and
devices for CY 2010 will equal approximately $45.5 million, which
represents 0.14 percent of total projected CY 2010 OPPS spending.
Therefore, the conversion factor was also adjusted by the difference
between
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the 0.11 percent estimate of pass-through spending set aside for CY
2009 and the 0.14 percent estimate for CY 2010 pass-through spending.
Finally, estimated payments for outliers remain at 1.0 percent of total
OPPS payments for CY 2010. In our November 20, 2009 CY 2010 OPPS/ASC
final rule with public comment, we announced a full conversion factor
of $67.406 for the CY 2010 OPPS.
As indicated previously, hospitals that fail to meet the reporting
requirements of the Hospital Outpatient Quality Data Reporting Program
(HOP QDRP) are subject to a reduction of 2.0 percentage points from the
OPD fee schedule increase factor, which is applied to the conversion
factor that is used to calculate their payment rates. To calculate the
CY 2010 reduced OPD fee schedule increase factor for those hospitals
that fail to meet the requirements of the HOP QDRP for the full CY 2010
payment update in the CY 2010 OPPS/ASC final rule, we made all other
adjustments described above, but used a reduced OPD fee schedule
increase factor of 0.1 percent. This resulted in a reduced conversion
factor of $66.086 for those hospitals that fail to meet the HOP QDRP
reporting requirements.
As discussed previously, section 1833(t)(3)(F)(ii) and (G)(i) of
the Social Security Act, as added by section 3401(i) of the Affordable
Care Act, and as amended by section 10319(g) of such Act and section
1105(e) of Public Law 111-152, requires the Secretary, after
calculating the OPD fee schedule increase factor, to reduce such factor
by an adjustment of 0.25 percentage point effective for services
furnished on and after January 1, 2010 through December 31, 2010.
Moreover, as discussed in more detail in section I.A.4 below, section
3137 of the Affordable Care Act extended section 508 reclassifications
and special exception wage indices from October 1, 2009 to September
30, 2010. Section 3137(a) also required the Secretary, for the second
half of the year, to recalculate wage indices by excluding section 508
and special exception hospital wage data in certain circumstances. The
OPPS adopts the final fiscal year IPPS wage index on a calendar year
basis. We use both the OPD fee schedule increase factor and the budget
neutrality adjustment which accounts for the effects of adopting the
new fiscal year IPPS wage index on a calendar year basis in the
calculation of the OPPS conversion factor. Therefore, the reduction of
0.25 percentage point applied to the OPD fee schedule increase factor
of 2.1 percent and the revised wage index budget neutrality factor of
0.9997 required us to recalculate the CY 2010 OPPS conversion factor.
We note that none of the other components of the conversion factor
calculation, specifically the adjustment to account for estimated cost
of pass through drugs and non-implantable biologicals, and device
categories and the proportion of estimated total OPPS payments for
outlier payments changed as a result of the provisions of Affordable
Care Act. The budget neutrality adjustment for the rural adjustment
continues to be 1.0000 because we did not propose and the Affordable
Care Act did not authorize any changes to the rural adjustment.
Therefore, the only changes to the conversion factor, and thus to the
CY 2010 OPPS payment rates, that are reflected in this Notice are
caused by the statutorily required reduction applied to the OPD fee
schedule increase factor and the statutory changes to the wage index.
To calculate the revised OPPS conversion factor for CY 2010 that is
effective for covered OPD services furnished on or after January 1,
2010 through December 31, 2010, we used the same methodology that was
used in the CY 2010 OPPS/ASC final rule (74 FR 60419). We first
increased the CY 2009 conversion factor of $66.059 by the revised OPD
fee schedule increase factor of 1.85 percent (2.1 percent which is the
full inpatient operating market basket percentage increase applicable
to hospital discharges under section 1886(b)(3)(B)(iii) of the Act less
the 0.25 percentage point reduction) for CY 2010. We further adjusted
the conversion factor to ensure that any revisions we made to our
updates accounting for the statutorily required changes to the wage
index were made on a budget neutral basis. We calculated an overall
budget neutrality adjustment factor of 0.9997 for wage index changes by
comparing total payments from our simulation model using the FY 2010
IPPS final wage index values, as adjusted by the Affordable Care Act
(see discussion in section I.A.4.), to those payments using the final
FY 2009 IPPS wage index values and multiplied this by the conversion
factor which already was adjusted to reflect the revised OPD fee
schedule increase factor. For purposes of calculating the overall
budget neutrality adjustment for wage index changes, we created a
single CY 2010 average wage index with 50 percent of the wage index in
effect between January 1, 2010 and June 30, 2010 and 50 percent of the
wage index in effect between July 1, 2010 and December 31, 2010. We
note that the wage index adjustment of 0.9997 that we recalculated
using the wage index values that resulted from the Affordable Care Act
provisions is identical (when rounded to the 4th decimal) to the wage
index adjustment that we calculated for the CY 2010 OPPS conversion
factor that we published on November 20, 2009. Next, we multiplied the
wage adjusted conversion factor by the budget neutrality factor for the
rural adjustment of 1.0000 that was finalized in the CY 2010 OPPS/ASC
final rule (74 FR 60419). Therefore, the final revised full conversion
factor for CY 2010 resulting from the above-described steps is $67.241
for services furnished on and after January 1, 2010 and before January
1, 2011. We then adjusted the CY 2009 conversion factor to reflect
changes in our estimate of total OPPS expenditures that would be
dedicated to pass-through payments in CY 2010 that were finalized in
the CY 2010 OPPS/ASC final rule (74 FR 60419). Finally, estimated
payments for outliers remained at 1.0 percent of total OPPS payments
for CY 2010 (74 FR 60419).
To calculate the revised final CY 2010 reduced market basket
conversion factor for those hospitals that fail to meet the
requirements of the HOP QDRP for the full CY 2010 payment update, we
used the same methodology and adjustments discussed above, except that
we used a reduced OPD fee schedule increase factor of negative 0.15
percent (that is, the revised OPD fee schedule increase factor of 1.85
percent minus 2.0 percentage points). This resulted in a final reduced
conversion factor for CY 2010 of $65.921 for those hospitals that fail
to meet the HOP QDRP requirement effective for covered OPD services
furnished on or after January 1, 2010 through December 31, 2010. To
calculate the reduced payment for these hospitals in our claims
processing systems we apply a reduction ratio, that we refer to as the
``reporting ratio'' of 0.980, which remains unchanged from the
reporting ratio we published on November 20, 2009 (74 FR 60641),
notwithstanding the changes to the hospital operating market basket and
wage index values for some hospitals required by the Affordable Care
Act.
The recalculated CY 2010 final conversion factor of $67.241 is
reflected in the revised CY 2010 OPPS payment rates and rate dependent
files that are posted on the CMS Web site at http://www.cms.gov/HospitalOutpatientPPS/. Because the conversion factor was revised, we
were required to recalculate a number of aspects of the CY 2010 OPPS
using our established methodologies as set forth in the CY 2010 OPPS/
ASC final rule (74 FR
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60316) using the revised conversion factor, including the OPPS payment
rates that rely on the conversion factor and other components of the
payment system that depend on OPPS payment rates for CY 2010 OPPS using
our established methodologies to take this revision into account.
These include CY 2010 OPPS APC payment rates that are printed in
Addenda A and B of this Notice. We use the conversion factor to
calculate OPPS payment rates for services in APCs with the following
status indicators, ``P'', ``Q1'', ``Q2'', ``Q3'', ``R'', ``S'', ``T'',
``V'', ``X'', and ``U''. The components of the payment system that are
impacted by these changes include: The offset amounts for devices
(devices and implantable biologicals), ``policy packaged'' drugs
(diagnostic radiopharmaceuticals and contrast agents), and ``threshold
packaged'' drugs (drugs and non-implantable biologicals that maybe
packaged under the drug packaging threshold) that are used for
assessment of pass-through applications and reductions to payment for
certain device-dependent procedures, nuclear medicine procedures, or
other imaging procedures using contrast agents, when a diagnostic
radiopharmaceutical, device or implantable biological, or contrast
agent is receiving pass through payment (74 FR 60462 through 60463, and
60480 through 60484). The revised offset amounts are not published as
addenda to OPPS update rules but are available at www.cms.hhs.gov/HospitalOutpatientPPS/ under ``Annual Policy Files.'' These revisions
are effective for covered OPD services furnished on or after January 1,
2010 through December 31, 2010.
The offset amount for each group of items, devices, ``threshold
packaged'' drugs and nonimplantable biologicals, and ``policy
packaged'' drugs and biologicals, are calculated using the same
methodology. For a discussion of the methodology we use for devices and
implantable biologicals, see our CY 2008 final rule with comment period
(72 FR 66751 through 66752 and 74 FR 60463), and for our discussion of
the methodology we use for diagnostic radiopharmaceuticals and contrast
agents, see our CY 2010 final rule with comment period discussion at 74
FR 60482. We use these offset amounts in our cost significance
calculation when evaluating an application for pass-through payment for
both drugs and nonimplantable biologicals, and devices including
implantable biologicals. Finally, for a subset of the device-dependent
procedures, we reduce OPPS payment by the device offset amount when a
hospital furnishes a device received at no cost or full credit and by
half of the device offset amount when a hospital furnishes a device
received for partial credit (74 FR 60464 through 60466).
4. Revision of Hospital Wage Index Values for CY 2010 as Required by
Section 3137(a) of Affordable Care Act
Section 1833(t)(2)(D) of the Act requires the Secretary to
determine a wage adjustment factor to adjust, for geographic wage
differences, the portion of the OPPS payment rate, which includes
copayment, that is attributable to labor and labor-related cost. This
adjustment must be made in a budget neutral manner. The OPPS labor-
related share is 60 percent of the national OPPS payment. The OPPS has
consistently adopted the final fiscal year IPPS wage indices as the
wage index values for adjusting the OPPS standard payment amounts for
labor market differences. Thus, the wage index that applies to a
particular acute care short-stay hospital under the IPPS would also
apply to that hospital under the OPPS. We discuss our wage index policy
in the CY 2010 OPPS/ASC final rule with comment (74 FR 60419).
In accordance with section 1886(d)(3)(E) of the Act, the IPPS wage
index is updated annually. The IPPS wage index values that we adopted
in the CY 2010 OPPS included all reclassifications that were approved
by the Medicare Geographic Classification Review Board (MGCRB) for FY
2010. Reclassifications under section 508 of Public Law 108-173 (MMA)
and the assignment of certain special exception wage indices that were
extended by section 106(a) of Public Law 109-432 (MIEA-TRHCA), section
117(a)(1) of Public Law 110-173 (MMSEA), and section 124 of Public Law
110-275 (MIPPA) were set to terminate on September 30, 2009. Similar to
our treatment of section 508 reclassifications extended under Public
Law 110-173 as described in the CY 2009 OPPS/ASC final rule with
comment period (73 FR 68586), we expected hospitals with section 508
reclassifications to revert to their home area wage index, with out-
migration adjustment if applicable, or a current MGCRB
reclassification, from October 1, 2009 to December 31, 2009 after
section 508 reclassifications expired. We also extended the assignment
of certain special exceptions wage indices for certain hospitals from
January 1, 2009 through December 31, 2009, under the OPPS, in order to
give these hospitals their special exception wage index under the OPPS
for the same time period as under the IPPS. We refer readers to the
Federal Register Notice published subsequent to the FY 2009 IPPS final
rule for a detailed discussion of the changes to the wage index values
as required by section 124 of Public Law 110-275 (73 FR 57888). Because
the provisions of section 124 of Public Law 110-275 expired in 2009 and
because the Affordable Care Act had not yet passed, we did not propose
to recognize section 508 reclassifications and wage indices for certain
special exceptions hospitals for the OPPS wage indices for CY 2010 (74
FR 60419).
Section 3137(a), as amended by section 10317, of the Affordable
Care Act extended the wage index reclassifications originally
designated under section 508 of Public Law 108-173 and certain special
exception wage indices effective for services furnished on and after
October 1, 2009 through September 30, 2010. We will implement the
section 508 wage indices for OPPS payments for fiscal year 2010 under
the OPPS. As indicated, the extended section 508 reclassifications will
expire on September 30, 2010. Hospitals with a section 508
reclassification wage index will revert to their home area wage index,
with out-migration adjustment if applicable, or a current MGCRB
reclassification, from October 1, 2010 to December 31, 2010 after the
section 508 reclassifications expire on September 30, 2010.
Further, as we did for CY 2009, the OPPS will recognize the special
exception wage indices for certain hospitals from January 1, 2010
through December 31, 2010, under the OPPS, in order to give these
hospitals the special exception wage index values under the OPPS for
the same time period as under the IPPS. Finally, provisions of section
3137(a) required us to recalculate wage indices for certain areas to
exclude the wage data of section 508 and special exception hospitals in
certain circumstances. This recalculation resulted in revised wage
indices beginning on April 1, or midway through the fiscal year. To
implement the same policy on a calendar year basis, the OPPS will adopt
these revised wage indices midway through the calendar year beginning
July 1, 2010. The revised wage indices that would apply for all
providers that are paid under the OPPS are on public display on the CMS
Web site at http://www.cms.gov/AcuteInpatientPPS/WIFN/itemdetail.asp.
The revised wage indices also have been published by CMS in the June 2,
2010 Federal Register (75 FR 31147). We used these wage indices along
with the wage indices that we finalized in our CY 2010 OPPS/ASC final
rule with comment
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period and in effect in the OPPS between January 1, 2010 and June 30,
2010 to calculate the budget neutrality adjustment for CY 2010 to the
conversion factor discussed in I.A.3.above. As a result of the changes
to the wage indices that are required by section 3137, we estimate a
budget neutrality adjustment for the revised wage index of 0.9997 that
we used for calculating the revised CY 2010 OPPS conversion factor of
$67.241.
We also note that section 3137(a), as amended by Section 10317,
specifies that if the Section 508 or special exception hospital's wage
index applicable for the period beginning on October 1, 2009, and
ending on March 31, 2010, is lower than for the period beginning on
April 1, 2010, and ending on September 30, 2010, the hospital shall be
paid an additional amount that reflects the difference between the wage
indices. To apply this provision to both inpatient and outpatient
hospital payments we compared the two wage index values applicable for
the period beginning on October 1, 2009, and ending on March 31, 2010,
and for the period beginning on April 1, 2010, and ending on September
30, 2010 and assigned each Section 508 and special exception hospital
the higher of the two wage index values. Consistent with our typical
application of the wage index for these two sets of providers, we
assigned the Section 508 providers their higher FY 2010 wage index from
October 1, 2009 through September 30, 2010 and assigned the special
exception providers their higher FY 2010 wage index from January 1,
2010 through December 31, 2010.
5. Extension of Transitional Outpatient Payments (TOPs) for Small Rural
Hospitals That Are Not Sole Community Hospitals and That Have 100 or
Fewer Beds and Extension of TOPs to All SCHs (Including EACHs),
Irrespective of the 100 Bed Limitation
Section 5105 of the Deficit Reduction Act of 2005 (DRA)
reinstituted TOPs for covered OPD services furnished on or after
January 1, 2006 and before January 1, 2009, for rural hospitals having
100 or fewer beds that are not sole community hospitals (SCHs). When
the OPPS payment was less than the provider's pre-BBA amount, the
amount of payment was increased by 95 percent of the amount of the
difference between these two amounts for CY 2006, by 90 percent in CY
2007, and 85 percent in CY 2008. Section 147 of the Medicare
Improvements for Patients and Providers Act of 2008 (MIPPA) extended
the period of TOPs for small rural hospitals with 100 or fewer beds
through December 31, 2009; when the OPPS payment was less than the
provider's pre-BBA amount, the amount of payment was increased by 85
percent of the amount of the difference between these two amounts for
CY 2009. Section 147 also provided 85 percent of the hold harmless
amount from January 1, 2009 through December 31, 2009 to sole community
hospitals (SCHs) including essential access community hospitals (EACHs)
with 100 or fewer beds. We note that EACHs are considered to be SCHs
under section 1886(d)(5)(D)(iii)(III) of the Act. Accordingly, under
the statute, EACHs are treated as SCHs.
Section 3121 of the Affordable Care Act extends the hold harmless
provision for small rural hospitals with 100 or fewer beds and that are
not sole community hospitals (as defined in section 1886(d)(5)(iii) of
the Social Security Act) for an additional year through December 31,
2010, at 85 percent of the hold harmless amount. Thus, for covered OPD
services furnished on or after January 1, 2010 through December 31,
2010, for which the PPS amount is less than the pre-BBA amount, the
amount of payment shall be increased by 85 percent of the amount of the
difference between these two amounts for CY 2010. In addition, section
3121 of the Affordable Care Act extended for an additional year the
period of TOPs payments for SCHs (as defined in section 1886(d)(5)(iii)
of the Act). As stated previously, EACHs fall within the definition of
an SCH as set forth in 1886(d)(5)(iii) of the Act. Further, section
3121(b) of the Affordable Care Act amended section
1833(t)(7)(D)(i)(III) of the Act to provide that in the case of covered
OPD services furnished on or after January 1, 2010 and before January
1, 2011, the 100-bed limitation will not be applied for SCHs (including
EACHs) under 1833(t)(3)(D)(i)(III) of the Act. Therefore, under section
1833(t)(3)(D)(i)(III) of the Act, payment will be increased under
section 1833(t) of the Act to SCHs (including EACHs) for covered OPD
services furnished on or after January 1, 2010 through December 31,
2010, by 85 percent of the amount of the difference between these two
amounts when the PPS amount is less that the pre-BBA amount without
regard to the 100-bed limitation. Cancer and children's hospitals are
permanently held harmless under section 1833(t)(7)(D)(ii) of the Social
Security Act and continue to receive TOPs payments in CY 2010.
B. Ambulatory Surgical Center Payment System
1. Background
In the CY 2010 OPPS/ASC final rule with comment period (74 FR
60596), we updated and finalized the CY 2010 ASC rates and lists of
covered surgical procedures and covered ancillary services. We also
corrected some of those ASC rates in a correction notice published in
the Federal Register on December 31, 2009 (74 FR 69502). In that
correction notice, we revised the ASC rates to reflect changes in the
Medicare Physician Fee Schedule (MPFS) conversion factor and practice
expense (PE) relative value units (RVUs) listed for some CPT codes in
Addendum B to the CY 2010 MPFS final rule with comment period (74 FR
62017), which were incorrect due to certain technical errors and,
consequently, were corrected in a correction notice to that final rule
(74 FR 65449). We are also publishing a second correction notice in the
Federal Register around the same time as this Notice to address changes
to the ASC rates resulting from corrections to the PE RVUs and to the
MPFS conversion factor identified subsequent to publication of the
December 31, 2009 correction notice. In this Notice, we discuss changes
to the ASC payment rates due to changes to the OPPS and MPFS under the
Affordable Care Act. The rates in this Notice also reflect technical
corrections to the CY 2010 ASC payment rates published in the CY 2010
OPPS/ASC final rule with comment period as corrected by the two
correction notices. None of these changes affected ASC payment
methodologies or policies.
2. Changes to the CY 2010 Ambulatory Surgical Center Payment System
Required by the Changes to the Hospital Outpatient Prospective Payment
System and the Medicare Physician Fee Schedule
Under the revised ASC payment system, for most covered surgical
procedures, we use the OPPS APCs to group services paid under the ASC
payment system and we use the APC relative payment weights developed
under the OPPS as the basis for ASC relative payment weights for
calculating ASC payment rates. Specifically, we multiply an ASC
relative payment weight derived from the OPPS APC relative weight by a
budget neutral ASC conversion factor to calculate national unadjusted
ASC payment rates each year. We refer to this as the standard
ratesetting methodology for the ASC payment system. We transitioned to
the standard ratesetting methodology over a
[[Page 45773]]
four-year period for procedures on the CY 2007 list of covered surgical
procedures. CY 2010 is the third year of this four-year transition to
fully implementing the standard ratesetting methodology. ASC payment
rates for CY 2010 are a transitional blend of 25 percent of the CY 2007
ASC payment rate for a covered surgical procedure on the CY 2007 ASC
list of surgical procedures and 75 percent of the payment rate for the
procedure calculated under the standard ratesetting methodology. We
discuss the standard ratesetting methodology and our transition to the
full implementation of the standard ratesetting methodology in our
August 2, 2007 ASC final rule (72 FR 42491 through 42493, 42519 through
42521). We update the ASC relative payment weights annually using the
OPPS relative payment weights for that calendar year. Because the
standard ratesetting methodology adopts the OPPS relative payment
weights (not rates), reductions to OPPS payments created by the
Affordable Care Act as discussed in section I.A.3. above do not impact
payment made under the standard ratesetting methodology as the
Affordable Care Act did not change any OPPS APC relative weights for CY
2010.
However, the ASC payment system establishes the payment rates for
several services using other methodologies that are impacted by the
Affordable Care Act. Specifically, the calculation of device-intensive
services, brachytherapy services, and bone density scans (a type of
covered ancillary radiology service) under the ASC payment system rely
directly on the actual payment rates under the OPPS and MPFS, which are
impacted by the provisions of the Affordable Care Act discussed above
and below. The Affordable Care Act changed the OPPS payment rates for
any service where the OPPS conversion factor is used in its
calculation, because the Affordable Care Act revised the CY 2010 OPD
fee schedule increase factor (see I.A.3. of this Notice). This change
impacted payments for device-intensive services and brachytherapy
services, which are dependent on payments established under the OPPS.
We use a modified ASC methodology based on OPPS data to establish
payment rates for the device-intensive procedures under the ASC payment
system. ASC device-intensive services are covered surgical procedures
that are assigned to the OPPS device-dependent APCs with a device
offset percentage (i.e., the proportion of the APC relative weight
attributable to devices under the OPPS) greater than 50 percent of the
APC cost under the OPPS. Under the ASC payment system, we sum the
device portion and the service portion to derive the ASC payment rate
for each service's device dependent APC. The device portion is equal to
the device offset amount multiplied by the OPPS payment rate, which is
the OPPS conversion factor multiplied by the OPPS relative payment
weight, for each service's device dependent APC. The service portion is
equal to the ASC standard ratesetting methodology (or blended payment
rates during the transition period) applied to the service portion of
the OPPS relative payment weight (72 FR 42503 through 42508). Because
CY 2010 OPPS APC payment rates have changed as a result of the
Affordable Care Act, the device offset amount, and therefore the device
portion of the ASC payment rate for device-intensive services also
changed.
The ASC Payment System also employs a modification to the standard
ratesetting methodology to establish payment for brachytherapy sources.
As discussed in our August 2, 2007 ASC final rule (72 FR 42498 to
42499), we finalized a policy to pay for brachytherapy services at the
OPPS payment rates if OPPS rates were available, and if unavailable, to
pay at contractor-priced rates. The CY 2010 OPPS established payment
rates for brachytherapy sources based on a relative weight and the OPPS
conversion factor, which has changed as a result of the Affordable Care
Act. Because the ASC payment system adopts the final payment rate from
the OPPS, these payment rates have changed for the ASC payment system.
Finally, payment for bone density scans under the ASC payment
system is impacted by the changes made to the MPFS under section 3111
of the Affordable Care Act. Under the ASC payment system, payment for
covered ancillary radiology services, which includes bone density
scans, is capped at the lesser of the MPFS non-facility practice
expense payment amount (calculated by multiplying the non-facility
practice expense RVU by the MPFS conversion factor) or the ASC rate
developed according to the ASC standard ratesetting methodology.
Section 3111 of the Affordable Care Act requires that, for CY 2010,
payment under the MPFS for certain bone density scans be established at
70 percent of the product of the CY 2006 MPFS relative value units for
the service, the CY 2006 MPFS conversion factor and the CY 2010
geographic adjustment factor for the service. Therefore, the final
payment rate for these bone density scans depends on both the ASC
payment and the MPFS non-facility practice expense payment amount,
which changed under the Affordable Care Act.
In addition to the changes made under the Affordable Care Act, the
ASC payment rates in this Notice reflect the technical corrections to
the CY 2010 ASC payment rates published in the CY 2010 OPPS/ASC final
rule with comment period (74 FR 60316), and as corrected in a December
31, 2009 correction notice and a second correction notice that will be
published around the same time as this Notice to address changes to
covered office-based and covered ancillary radiology services payment
rates resulting from technical corrections to the MPFS non-facility
practice expense payment amounts for CY 2010. Office-based procedures
are procedures added to the ASC list of covered surgical procedures in
CY 2008 or later years that we determine are performed predominantly
(more than 50 percent of the time) in physicians' offices and are paid
based on the same methodology as covered ancillary radiology services
(i.e., the lesser of the MPFS rate or the ASC rate under the standard
methodology). We have already implemented the changes made by these
correction notices.
We note that the Department of Defense Appropriations Act, 2010
(Pub. L. 111-118), the Temporary Extension Act of 2010 (Pub. L. 111-
144), and the Continuing Extension Act of 2010 (Pub. L. 111-157)
extended a zero percent update for the MPFS from January 1, 2010
through May 31, 2010. Because the Affordable Care Act changes are
effective January 1, 2010, and because the public laws listed above
authorize a zero percent update for the MPFS for CY 2010 through May
31, 2010, this Notice incorporates a zero percent update for MPFS
payment. On June 25, 2010 the Preservation of Access to Care for
Medicare Beneficiaries and Pension Relief Act of 2010 (Pub L. 111-192)
authorized a 2.2 percent update for the MPFS from June 1, 2010 through
November 30, 2010. As is our standard practice, we will recalculate the
revised ASC CY 2010 payment rates based on CY 2010 MPFS payment rates
using the 2.2 percent update factor, and we will make these revised
payment rates available on our Web site under ``Addenda Updates'' at
http://www.cms.gov/ASCPayment/11_Addenda_Updates.asp#TopOfPage.
Because of these changes to payment for device-intensive services,
brachytherapy sources, and bone density scans created by the Affordable
Care Act, and changes to MPFS non-facility practice expense payment
amounts and the MPFS conversion factor for covered office-based
services
[[Page 45774]]
and ancillary radiology services created by technical corrections that
we explained in the correction notices, we recalculated budget
neutrality for the CY 2010 ASC payment system as part of this Notice.
We discuss our budget neutrality methodology in the CY 2010 OPPS/
ASC final rule with comment period (74 FR 60625 through 60629). Using
updated payment amounts for the OPPS and MPFS for the services affected
by the Affordable Care Act and additional changes to the CY 2010 MPFS
non-facility practice expensive payment amounts based on the correction
notices, we followed our standard scaling methodology to take into
account the changes in the OPPS and MPFS payment amounts. We used the
same claims data and scaling methodology described in the CY 2010 OPPS/
ASC final rule with comment period to calculate a revised CY 2010 ASC
payment weight scalar of 0.9556. (We previously finalized a CY 2010 ASC
payment weight scalar of 0.9567 (74 FR 60628)). After scaling the
weights, we calculated a wage index adjustment of 0.9996 and a final
ASC conversion factor of $41.873. Both of these numbers did not change
from what we previously finalized for CY 2010 (74 FR 60629). The
Affordable Care Act did not impact the pre-floor, pre-reclassification
wage indices that we adopt in the ASC payment system or the CPI-U.
Therefore, the wage index adjustment and the final ASC conversion
factor remained the same. We note that the technical corrections in the
second correction notice impacted covered office-based procedures and
covered ancillary radiology services with payment indicators of ``P3''
and ``Z3''. When we recalculated budget neutrality to address
Affordable Care Act changes in this Notice, we also reflected the
technical changes made in previous correction notices; therefore, the
CY 2010 payment for many covered office-based procedures and covered
ancillary radiology services changed at least modestly.
We historically also have reported the payment weight scalar that
we would have calculated if we proposed to fully implement the ASC
payment system in the coming calendar year without further transition.
In the CY 2010 OPPS/ASC final rule, we published a fully implemented CY
2010 ASC payment weight scalar of 0.9338 (74 FR 60674). Using the same
claims data and budget neutrality methodology, including adjusting for
changes in the wage index, and updating the OPPS and MPFS inputs, we
calculated a revised fully implemented CY 2010 ASC payment weight
scalar of 0.9326.
Using the revised scaled ASC payment weights and the conversion
factor of $41.873, the revised OPPS payment amounts, and the revised
MPFS non-facility practice expense payment amounts, we recalculated the
revised CY 2010 ASC payment rates for all services, including device-
intensive services, brachytherapy sources, and office-based and
ancillary radiology services, appearing in Addenda AA and BB of this
notice. These payment rates are effective for services furnished on and
after January 1, 2010 through December 31, 2010. These files also may
be viewed as supporting documentation to this Notice at http://www.cms.gov/ASCPayment.
For purposes of applying the policy to reduce ASC payment for
procedures involving devices furnished without cost or at reduced cost
(74 FR 60613 through 60618), the revised offset amounts of the ASC
payment are not published as addenda to the ASC update rules but are
available at http://www.cms.gov/ASCPayment under ``Annual Policy
Files.''
C. Elimination of Sunset for Reimbursement for All Medicare Part B
Services in Hospitals and Clinics Operated by the Indian Health
Service, Indian Tribes, or Tribal Organizations
Section 2902 of the Affordable Care Act indefinitely extends
Section 630 of the MMA, retroactive to January 1, 2010. The specific
Part B services are:
Ambulance services;
Clinical laboratory services;
Part B drugs processed by the J4 A/B MAC and the DME MACs;
Influenza and pneumonia vaccinations;
Durable medical equipment;
Therapeutic shoes;
Prosthetics and orthotics;
Surgical dressings, splints, and casts; and
Screening and preventive services not covered prior to the
implementation of section 630 of the MMA
Section 2902 of the Affordable Care Act indefinitely extends
section 630 of the MMA to provide coverage for all Medicare Part B
services listed above that were previously not covered under the Social
Security Act. Hospitals operated by the Indian Health Service, Indian
Tribes, or Tribal Organizations, however, will continue to be paid for
Part B services under an all inclusive rate for hospital outpatient
services rather than under the OPPS.
II. Other Required Information
A. Collection of Information Requirements
This document does not impose information collection and
recordkeeping requirements. Consequently, it need not be reviewed by
the Office of Management and Budget under the authority of the
Paperwork Reduction Act of 1995.
B. Waiver of Proposed Rulemaking
We ordinarily publish a Notice of proposed rulemaking in the
Federal Register and invite public comment prior to a rule taking
effect in accordance with section 553(b) of the Administrative
Procedures Act (APA) and section 1871 of the Act. In addition in
accordance with section 553(d) of the APA and section 1871(e)(1)(B)(i)
of the Act, we ordinarily provide a 30-day delay to a substantive
rule's effective date. For substantive rules that constitute major
rules, in accordance with 5 U.S.C. 801, we ordinarily provide a 60-day
delay in the effective date.
None of the above processes or effective date requirements apply,
however, when the rule in question is interpretive, a general statement
of policy or a rule of agency organization, procedure or practice. They
also do not apply when Congress, itself, has created the rules that are
to be applied, leaving no discretion or gaps for an agency to fill in
through rulemaking.
In addition, an agency may waive notice and comment rulemaking, as
well as any delay in effective date, when the agency for good cause
finds that notice and public comment on the rule, as well as the
effective date, are impracticable, unnecessary or contrary to the
public interest. In cases where an agency finds good cause, the agency
must incorporate a statement of this finding and its reason in the rule
issued.
The policies being publicized in this Notice do not constitute
agency rulemaking. Rather, Congress, in the Affordable Care Act, has
already required that the agency make these changes and we are simply
notifying the public of the statutory requirements and their effect on
payments made under the CY 2010 OPPS and ASC payment system.
Specifically, we are notifying the public of the changes to payments
for the CY 2010 OPPS that result from the reduction to the OPD fee
schedule increase factor and the changes to the wage indices required
by the Affordable Care Act. We are also notifying the public of the
extension of section 508 reclassifications and special exception wage
indices for FY 2010 (which apply to the OPPS for CY 2010), as well as
the
[[Page 45775]]
wage Indices resulting from Congress' requirement that certain
reclassification wage indices be recalculated (effective April 1, 2010)
to account for such extensions. We are also notifying the public that
Congress extended transitional outpatient payments (TOPs) for a rural
hospital that has not more than 100 beds and that is not a sole
community hospital as well as for sole community hospitals such that
the sole community hospital need not satisfy the 100-bed limitation for
covered OPD service furnished on or after January 1, 2010 and before
January 1, 2011. We are notifying the public that Congress extended
Medicare payments to the Indian Health Service, Indian Tribes, or
Tribal Organizations for selected Part B services. We are notifying the
public of changes made to ASC payment rates due to changes to the OPPS
conversion factor under the Affordable Care Act. Lastly, we are
notifying the public that Congress has changed payment for bone density
scans under the MPFS, which may impact payment for these services
furnished in ASCs on or after January 1, 2010. As this Notice merely
informs the public of these required modifications to the CY 2010
payment rates under the OPPS and, indirectly, to the ASC payment
system, it is not a rule and does not require any notice and comment
rulemaking. Additionally, for the ASC payment system, the payment rates
announced in this Notice reflect technical corrections made to the MPFS
that impact the ASC payment rates that we addressed in prior ASC
correction notices; we are simply notifying the public of the effect on
payment made under the CY 2010 ASC payment system based on these prior
correction notices. To the extent that any of the policies articulated
in this Notice constitute interpretations of Congress's requirements or
procedures that will be used to implement Congress's directives, they
are interpretative rules, general statements of policy and/or rules of
agency procedure or practice, which are not subject to notice and
comment rulemaking or a delayed effective date.
However, to the extent that notice and comment rulemaking or a
delay in effective date or both would otherwise apply, we find good
cause to waive such requirements. Specifically, we find it unnecessary
to undertake notice and comment rulemaking in this instance because the
provisions of the Affordable Care Act are self-implementing, and
further many are already effective and have been implemented.
Therefore, we would be unable to change any of the policies governing
the OPPS and ASC payment systems for CY 2010, or the other changes made
by the Affordable Care in response to public comment on this Notice. As
the changes outlined in this Notice have already taken effect and are a
result of the statutory effective dates, it would also be impracticable
to undertake notice and comment rulemaking. Additionally, this Notice
does not make any changes to the policies and payment methodologies for
the OPPS and ASC payment system that were finalized in the CY 2010
OPPS/ASC final rule with comment period. Further, we believe it is in
the public interest to have the accurate information and to have it as
soon as possible and not delay its dissemination. For these reasons, we
also find that a waiver of any delay in effective date, if it were
otherwise applicable, is necessary to comply with the requirements of
sections 2902, 3111, 3121, 3137, 3401 and 10319 of the Patient
Protection and Affordable Care Act and section 1105 of the Health Care
and Education Reconciliation Act of 2010. Therefore we find good cause
to waive notice and comment procedures as well as any delay in
effective date, if such procedures or delays are required at all.
III. Regulatory Impact Statement or Analysis
A. Overall Impact
Although this Notice merely announces provisions of the Affordable
Care Act, and does not constitute a substantive rule, we are
nevertheless preparing this impact analysis in the interest of ensuring
that the impact of these changes are fully understood. The changes in
this Notice are already in effect, with changes made to the OPPS pricer
and the ASC payment system and have been announced through a Joint
Signature Memorandum of instruction to Medicare contractors. We have,
nevertheless, examined the impacts of this Notice as required by
Executive Order 12866 (September 1993, Regulatory Planning and Review),
the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-
354), section 1102(b) of the Social Security Act, the Unfunded Mandates
Reform Act of 1995 (Pub. L. 104-4), Executive Order 13132 on
Federalism, and the Congressional Review Act (5 U.S.C. 804(2)).
Executive Order 12866 directs agencies to assess all costs and
benefits of available regulatory alternatives and, if regulation is
necessary, to select regulatory approaches that maximize net benefits
(including potential economic, environmental, public health and safety
effects, distributive impacts, and equity). A regulatory impact
analysis (RIA) must be prepared for major rules that have economically
significant effects ($100 million or more in any 1 year) or adversely
affect in a material way the economy, a sector of the economy,
productivity, competition, jobs, the environment, public health or
safety, or State, local, or tribal government or communities.
We estimate that the effects of the OPPS provisions that are
announced in this Notice will not result in expenditures exceeding $100
million in any 1 year and therefore are not economically significant.
We estimate the difference between CY 2010 OPPS expenditures required
by or resulting from the Affordable Care Act that are announced in this
Notice, when compared to the estimated expenditures announced in our
November 20, 2009 CY 2010 final rule, (74 FR 60316) to be a decrease of
approximately $98 million. Because this Notice is not a major rule, and
because, furthermore, the expected change in expenditures resulting
from the Affordable Care Act does not reach the $100 million threshold
for a RIA, we are not required to provide a regulatory impact analysis.
However, because the changes required by the Affordable Care Act
for the CY 2010 OPPS affect payment, we have prepared a regulatory
impact analysis of changes to the OPPS payment system that, to the best
of our ability, presents the costs and benefits of this Notice. Table I
of this Notice displays the redistributional impact of the CY 2010
changes required by the Affordable Care Act on OPPS payment. The
provisions of the Affordable Care Act result in a change in OPPS
payments for CY 2010 as announced in this Notice compared to the CY
2010 payments established under the CY 2010 OPPS/ASC final rule
appearing in the November 20, 2009 Federal Register. Table I presents
only the changes in CY OPPS 2010 payments that result from the
Affordable Care Act. We estimate that the effects of the changes to the
CY 2010 OPPS and the non-facility MPFS PE RVUs resulting from the
Affordable Care Act on the ASC payment system that are announced by
this Notice will not exceed $100 million in any 1 year and, therefore,
are not economically significant. Overall, we observe no change in
aggregate expenditures under the CY 2010 ASC Payment System resulting
from changes to the CY 2010 OPPS and MPFS as required by the Affordable
Care Act and by technical changes implemented by prior correction
notices.
[[Page 45776]]
The RFA requires agencies to analyze options for regulatory relief
of small businesses if a rule has a significant impact on a substantial
number of small entities. For purposes of the RFA, small entities
include small businesses, nonprofit organizations, and small
governmental jurisdictions. Many hospitals, other providers, ASCs, and
other suppliers are considered to be small entities, either by being
nonprofit organizations or by meeting the Small Business Administration
(SBA) definition of a small business (hospitals having revenues of
$34.5 million or less in any 1 year and ASCs having revenues of $10
million or less in any 1 year). (For details on the latest standards
for health care providers, we refer readers to the SBA's Web site at:
http://sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf (refer to the 620000 series).)
For purposes of the RFA, we have determined that many hospitals and
most ASCs would be considered small entities according to the SBA size
standards. Individuals and States are not included in the definition of
a small entity. Therefore, the Secretary has determined that this
Notice will have a significant impact on a substantial number of small
entities. We acknowledge that many of the affected entities are small
entities. The discussion presented in this Notice and the impact
analysis presented in Table I constitute our regulatory flexibility
analysis of the impact of the provisions of the Affordable Care Act on
small entities.
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis if a rule may have a significant impact on
the operations of a substantial number of small rural hospitals. This
analysis must conform to the provisions of section 603 of the RFA. With
the exception of hospitals located in certain New England counties, for
purposes of section 1102(b) of the Act, we now define a small rural
hospital as a hospital that is located outside an urban area and has
fewer than 100 beds. Section 601(g) of the Social Security Amendments
of 1983 (Pub. L. 98-21) designated hospitals in certain New England
counties as belonging to the adjacent urban areas. Thus, for OPPS
purposes, we continue to classify these hospitals as urban hospitals.
We believe that the changes to the OPPS announced by this Notice
affect both a substantial number of rural hospitals as well as other
classes of hospitals and that the effects on some may be significant.
Therefore, the Secretary has determined that this Notice has a
significant impact on the operations of a substantial number of small
rural hospitals. Specifically, section 3121 of the Affordable Care Act
extends TOPs payment for small rural hospitals that are not sole
community hospitals and that have 100 or fewer beds and payments for
SCHs (including EACHs), that meet applicable requirements regardless of
the 100-bed limitation for covered OPD services furnished on and after
January 1, 2010 through December 31, 2010. See our discussion of this
change in section I.A.5 above. In addition, section 3137 as amended by
section 10317 of the Affordable Care Act extends section 508
reclassifications and special exception wage index values from October
1, 2009 through September 30. It also resulted in the recalculation of
wage index values to exclude the wage data of section 508/special
exception hospitals in certain circumstances, thereby changing the
final wage index values, effective April 1 for IPPS and July 1 for
OPPS. These wage index changes affect some small rural hospitals. See
section I.A.4 of this Notice for a discussion of the wage index changes
required by Affordable Care Act. We also anticipate that Affordable
Care Act changes impacting ASC payment in general will impact payment
to rural ASCs.
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any 1 year of $100
million in 1995 dollars, updated annually for inflation. That threshold
level is currently approximately $133 million. This Notice will not
mandate any requirements for State, local, or tribal governments, nor
will it affect private sector costs.
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
final rule) that imposes substantial direct costs on State and local
governments, preempts State law, or otherwise has Federalism
implications. We have examined the provisions included in this Notice
in accordance with Executive Order 13132, Federalism, and have
determined that they will not have a substantial direct effect on
State, local or tribal governments, preempt State law, or otherwise
have a Federalism implication.
The following analysis, in conjunction with the remainder of this
document, demonstrates that this Notice is consistent with the
regulatory philosophy and principles identified in Executive Order
12866, the RFA, and section 1102(b) of the Act. The changes to the
payment amounts under CY 2010 OPPS that are required by the Affordable
Care Act and that are announced in this Notice will affect payments to
a substantial number of small rural hospitals and a small number of
rural ASCs, as well as other classes of hospitals and ASCs, and some
effects may be significant.
The impact analysis presented in the CY 2010 OPPS/ASC final rule
(74 FR 60662 through 60673) showed the estimated impact of changes to
payments for CY 2010 OPPS compared to the estimated payments for CY
2009 OPPS. In contrast, the impact analysis presented in this Notice
shows the estimated impact of changes to payment for CY 2010 as a
result of the implementation of the changes required by the Affordable
Care Act. The Affordable Care Act changed payments for services for
which the payment is calculated using the conversion factor. In
addition, we note that none of the APC relative weights changed because
the relative weight calculations are not made using the conversion
factor. For an assessment of distributional impact of changes to the
relative weights between CY 2009 and CY 2010 please see the CY 2010
OPPS/ASC final rule (74 FR 60667 through 60672). Therefore, the
decrease of 0.1 percent reflects changes to the total OPPS payment that
would have been made in CY 2010 absent the provisions of the Affordable
Care Act (This impact does not include the impact of changes to TOPs).
However, we note that hospitals continue to receive a positive payment
increase relative to CY 2009. When we compare the estimated total
payments for the CY 2010 OPPS, including the provisions of the
Affordable Care Act, to the estimated total payments for the CY 2009
OPPS, we find that for CY 2010, we expect that hospitals will see an
aggregate increase in total OPPS payment of approximately $500 million,
compared to CY 2009.
Effects of OPPS Changes in This Notice
This Notice announces changes to the OPPS and ASC payments for
services furnished in CY 2010 that are required as a result of Sections
3121, 3401, 3137 and 10319 of the Patient Protection and Affordable
Care Act and section 1105 of the Health Care and Education
Reconciliation Act of 2010. These changes are discussed in detail in
I.A of this Notice. Under the recalculated OPPS payment rates announced
in this Notice, we estimate that the revised update to the conversion
factor and other adjustments as provided by the statute will decrease
total OPPS
[[Page 45777]]
payments by 0.1 percent in CY 2010 compared to payment rates under the
November 20, 2009 CY 2010 OPPS/ASC final rule.
The distributional impacts presented here are the projected effects
of changes to the CY 2010 payments on various hospital groups,
comparing the estimated CY 2010 OPPS payments under this Notice to the
estimated payments under the November 20, 2009 CY 2010 OPPS/ASC final
rule. We post on the CMS Web site our hospital-specific estimated
payments for CY 2010 with the other supporting documentation for this
Notice. To view the hospital-specific estimates of CY 2010 OPPS
payments that we calculated including the effects of the changes made
by the Affordable Care Act, we refer readers to the CMS Web site at:
http://www.cms.gov/HospitalOutpatientPPS/. Select ``regulations and
Notices'' from the left side of the page and then select ``CMS-1504-N''
from the list of regulations and Notices. The hospital-specific file
layout and the hospital-specific file are listed with the other
supporting documentation for this Notice of changes to the CY 2010
payment rates. We show hospital-specific data only for hospitals whose
claims were used for modeling the impacts shown in Table I below. We do
not show hospital-specific impacts for hospitals whose claims we were
unable to use. We refer readers to section II.A.2. of the CY 2010 OPPS
final rule (75 FR 60347) for a discussion of the hospitals whose claims
we do not use for ratesetting and impact purposes.
We estimate the effects of the individual policy changes by
estimating payments per service, while holding all other payment
policies constant. We use the best data available, but do not attempt
to predict behavioral responses to our policy changes. In addition, we
do not make adjustments for future changes in variables such as service
volume, service mix, or number of encounters.
Table 1 below shows the estimated impact of the changes on
hospitals' CY 2010 OPPS payment as a result of the Affordable Care Act.
Historically, the first line of the impact table, which estimates the
change in payments to all hospitals, has always included cancer and
children's hospitals, which are held harmless to their pre-BBA payment-
to-cost ratio. We also are including CMHCs in the first line that
includes all providers because we included CMHCs in our CY 2010 weight
scaler estimate discussed in our November 20, 2009 CY 2010 OPPS/ASC
final rule with comment period (74 FR 60408).
We present separate impacts for CMHCs in Table 1 because CMHCs are
paid under only two APCs for services under the OPPS: APC 0172 (Level 1
Partial Hospitalization (3 units of service)) and APC 0173 (Level II
Partial Hospitalization (4 or more units of service)). We note that
CMHCs are also a different provider type.
The estimated decrease in the total payments made under the CY 2010
OPPS is a result of the decrease in the OPD fee schedule update factor
as required by sections 3401 and 10319 of the Patient Protection and
Affordable Care Act and section 1105 of the Health Care and Education
Reconciliation Act of 2010, and the influence of the changes to the
wage index required by section 3137 as amended by section 10317 of the
Affordable Care Act. The distributional impacts presented do not
include assumptions about changes in volume and service mix. The
enactment of Public Law 108-173 on December 8, 2003, provided for the
additional payment outside of the budget neutrality requirement for
wage index for specific hospitals reclassified under section 508.
Section 3137 as amended by section 10317 of the Affordable Care Act
extended these section 508 reclassifications for October 1, 2009
through September 30, 2010. The amounts attributable to these
reclassifications are incorporated into the CY 2010 estimates in the
final column of Table 1.
Table 1 shows the estimated redistribution of hospital and CMHC
payments among providers between payments under the November 20, 2009
CY 2010 OPPS/ASC final rule published for CY 2010 and the CY 2010
payments announced in this Notice as a result of APC reconfiguration
and recalibration (Column 2; which remain unchanged from the
publication of the CY 2010 OPPS on November 20, 2009 because there were
no changes made by the Affordable Care Act to the assignment of
services to APCs or the median costs from which the scaled relative
weights are derived); wage index changes (Column 3; which reflect the
changes made by section 3137 (amended by section 10317) of the
Affordable Care Act)); the combined impact of the APC recalibration,
wage index effects, and the reduction applied to the OPD fee schedule
increase factor (which is revised as required by sections 3401 and
10319 of the Patient Protection and Affordable Care Act and section
1105 of the Health Care and Education Reconciliation Act of 2010) which
is used to update the conversion factor (Column 4); and, finally,
estimated redistribution considering all payments for CY 2010 under
this Notice relative to all CY 2010 payments under the November 20,
2009 CY 2010 OPPS/ASC final rule (Column 5). Because the reduction that
applies to the OPD fee schedule increase factor as required by the
Affordable Care Act, is applied uniformly across services for which the
conversion factor is used to calculate OPPS payment, observed
redistributions of payments in the impact table for hospitals largely
depend on the impact of the wage index changes under section 3137
including changes to the wage index for the second half of the year and
the extension of the section 508 reclassifications for part of CY 2010.
However, total payments made under this system and the extent to which
the changes required by Affordable Care Act would redistribute money
during implementation also depend on volume, practice patterns, and the
mix of services billed by various groups of hospitals, which CMS cannot
forecast.
Overall, the revised CY 2010 OPPS rates are expected to have a
negative effect for providers paid under the OPPS, resulting in a 0.1
percent estimated decrease in Medicare payments compared to CY 2010
OPPS rates announced in the November 20, 2009 final rule with comment
period. Removing cancer and children's hospitals, because their
payments are held harmless to the pre-BBA ratio between payment and
cost, and CMHCs because they are a different provider type paid under
two specific APCs, suggests that the required changes will continue to
result in a 0.1 percent estimated decrease in Medicare payments to all
other hospitals.
Table 1 contains the standard content that is provided in every
OPPS impact table published in the Federal Register. Specifically,
Column 1 contains the number of hospitals in total and by category for
which we calculated an impact. These are the same hospitals whose
claims were used for ratesetting and modeling of impacts for the CY
2010 OPPS that was published on November 20, 2010. Column 2 displays
the CY 2010 APC changes due to the reassignment and recalibration under
this Notice, relative to the November 20, 2009 CY 2010 OPPS/ASC final
rule (74 FR 60431). Because nothing in the Affordable Care Act changed
APC assignment or calibration, there are no changes in this column.
Column 3 displays the effect of the new wage index changes required by
the Affordable Care Act compared to the previous FY 2010 wage index
adopted in the November 20, 2009 CY 2010 OPPS/ASC final rule. Although
there are changes to the wage indices for some
[[Page 45778]]
hospitals for half of the year because of changes made by the
Affordable Care Act, the impact does not rise to a tenth of a percent
for any category of provider. Column 4 displays the effect of the
budget neutrality changes between the November 20, 2009 CY 2010 OPPS/
ASC final rule and the payment rates for CY 2010 as announced by this
Notice, specifically the reduction applied to the OPD fee schedule
update factor as a result of the Affordable Care Act. Because not all
OPPS payments are based on the conversion factor (e.g. separately paid
drugs and biologicals are paid at ASP+4 percent for CY 2010), the
impact of the 0.25 percentage point reduction to the OPD fee schedule
update factor does not affect payment for all services and therefore
the impact of the reduction is slightly less than 0.25. Column 5
displays the combined impact of all changes made for CY 2010, including
changes in the section 508 reclassification wage index as required by
the Affordable Care Act relative to payments announced in the November
20, 2009 CY2010 OPPS/ASC final rule. Therefore it incorporates the
changes in payment that are outside of budget neutrality for section
508 and certain special exception hospitals. The increase in payment
outside budget neutrality for section 508 hospitals is present
throughout column 5 and is isolated as a 1.8 percent increase in the
last row of Table 1.
BILLING CODE 4120-01-P
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5. Estimated Effect of This Notice on Beneficiaries
For services for which the beneficiary pays a copayment of 20
percent of the payment rate, the beneficiary share of payment will
increase for services for which the OPPS payments will rise and will
decrease for services for which the OPPS payments will fall. In all
cases, the statute limits beneficiary liability for copayment for a
procedure to the hospital inpatient deductible for the applicable year.
The CY 2010 hospital inpatient deductible is $1,100.
In order to better understand the impact of changes in copayment on
beneficiaries, we modeled the percent change in total copayment
liability. We estimate, using the claims of the 4,222 hospitals and
CMHCs on which our modeling is based, that total beneficiary liability
for copayments continues to be 22.6 percent, as estimated in the
November 20, 2009 CY 2010 OPPS/ASC final rule (74 FR 60673). To assess
whether there are changes to the aggregate percentage of beneficiary
liability, we recalculated the percentage using the revised conversion
factor and wage indices on which the revised payments being announced
in this Notice are based.
6. Conclusion
The changes announced in this Notice will affect all classes of
hospitals and CMHCs. We estimated that most classes of hospitals will
experience minor losses or remain neutral and that all classes of
hospitals will experience negative updates in OPPS payments in CY 2010
compared to the payments announced in the November 20, 2009 CY 2010
OPPS/ASC final rule as a result of the provisions of the Affordable
Care Act.
Table 1 demonstrates the estimated distributional impact of the
OPPS budget neutrality requirements that are expected to result in a
0.1 percent decrease in payments for all services paid under the OPPS
in CY 2010 under this Notice when compared to the November 20, 2009 CY
2010 OPPS/ASC final rule, after considering the OPD fee schedule
increase factor (revised by the Affordable Care Act), wage index
changes (including the effects of the extension of the section 508
reclassifications), estimated payment for outliers (which did not
change as a result of the Affordable Care Act), and changes to the
pass-through payment estimate (which did not change as a result of the
Affordable Care Act). The accompanying discussion, in combination with
the rest of this Notice, constitutes a regulatory impact analysis.
7. Accounting Statement
As required by OMB Circular A-4 (available at http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf), in Table 2, we have
prepared an accounting statement showing the CY 2010 estimated hospital
OPPS incurred benefit impact associated with the changes to the CY 2010
OPD fee schedule increase factor and budget neutral wage index changes
(as revised by the Affordable Care Act) shown in this Notice based on
the baseline for the 2010 Medicare Trustees Report. All estimated
impacts are classified as transfers.
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(Catalog of Federal Domestic Assistance Program No. 93.778, Medical
Assistance Program; No. 93.773 Medicare--Hospital Insurance Program;
and No. 93.774, Medicare--Supplementary Medical Insurance Program)
Dated: June 18, 2010.
Marilyn Tavenner,
Acting Administrator and Chief Operating Officer, Centers for Medicare
& Medicaid Services.
Approved: June 30, 2010.
Kathleen Sebelius,
Secretary.
[FR Doc. 2010-16400 Filed 7-2-10; 2:30 pm]
BILLING CODE 4120-01-C