United States Government Publishing Office publisher pbl distributor dst United States Government Accountability Office author aut Government Organization text government publication eng GAOREPORTS Legislative Agency Publications gao legislative 2010-08-12 U.S. Government Printing Office 2003-10-06 monographic deposited born digital 18 p. GA 1.13:GAO-04-103R https://www.govinfo.gov/app/details/GAOREPORTS-GAO-04-103R P0b002ee180392c3d f:d04103r DGPO 2010-08-12 2011-03-24 GAOREPORTS-GAO-04-103R machine generated eng fdlp REPORT GAOREPORTS-GAO-04-103R GAO-04-103R Beneficiaries Federal regulations Health care programs Hospital care services Medical fees Medical services rates Noncompliance Health care costs Managed health care Medicare Hospital Outpatient Prospective Payment System Correspondence A08670 Under the Medicare hospital outpatient prospective payment system (OPPS), beneficiaries can be responsible for paying 50 percent or more of the total payment for outpatient services they receive in hospitals. The Balanced Budget Act of 1997 (BBA) introduced a mechanism to gradually decrease beneficiary cost sharing to 20 percent of the payment rate for each hospital outpatient service. The Centers for Medicare & Medicaid Services (CMS) published a final rule that implemented, effective with the 2002 payment rates, a methodology for calculating copayment amounts that was designed to ensure that even as certain changes affect the payment rates for hospital outpatient services over time, beneficiary coinsurance for services would eventually be 20 percent of the total payment rate for each service. Under this 2002 methodology, the copayment amount for each outpatient payment group of services, called an ambulatory payment classification (APC) group, could not increase from year to year, and the beneficiary coinsurance percentage would remain the same or decrease, eventually reaching 20 percent for each APC. When CMS published the final rule updating the OPPS payment rates for 2003, the agency stated that it used the methodology implemented in 2002 for determining 2003 copayments. However, in the course of other ongoing work, GAO found several APCs for which copayment amounts increased from 2002 to 2003, contrary to the methodology implemented in 2002. For a federal agency to adopt a new position or payment methodology that is inconsistent with existing rules and regulations, it must follow Administrative Procedure Act rulemaking requirements, which generally include publishing its intentions and allowing for public comment. Because of our concerns about this methodological discrepancy, we discussed the issue with CMS staff in May 2003. Thereafter, in its August 2003 proposed rule setting forth the 2004 OPPS payment rates, CMS stated that it would revise and clarify the copayment methodology implemented in 2002, and that this revised methodology would be used to calculate copayment amounts beginning in 2004. In this report, we present our complete analysis of the 2003 copayment methodology and the implications its use holds for copayment amounts in 2003 and future years. We also present the estimated financial impact this methodology has had on both beneficiary cost sharing and Medicare payments in 2003. https://www.govinfo.gov/content/pkg/GAOREPORTS-GAO-04-103R/html/GAOREPORTS-GAO-04-103R.htm https://www.govinfo.gov/content/pkg/GAOREPORTS-GAO-04-103R/pdf/GAOREPORTS-GAO-04-103R.pdf GAO-04-103R https://www.govinfo.gov/app/details/GAOREPORTS-GAO-04-103R Correspondence GAO-04-103R; Medicare: Discrepancy in Hospital Outpatient Prospective Payment System Methodology Leads to Inaccurate Beneficiary Copayments and Medicate Payments; Beneficiaries Federal regulations Health care programs Hospital care services Medical fees Medical services rates Noncompliance Health care costs Managed health care Medicare Hospital Outpatient Prospective Payment System Volume 111 Page 251 111 Stat. 251