On November 2, 2010, CMS issued a final Medicare 2011 Hospital Outpatient Prospective Payment System (OPPS) rule that will update payment policies and rates for hospital outpatient departments and ambulatory surgical centers (ASCs). The final rule revises the OPPS to implement applicable statutory changes consistent with provisions of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (Affordable Care Act) that are effective in 2011. CMS projects that total payments during CY 2011 for services furnished to Medicare beneficiaries in hospital outpatient departments under the OPPS will be approximately $39 billion and approximately $4 billion under the ASC payment system.

Significant changes for CY 2011 include the following:

  • Waiver of Beneficiary Cost-Sharing for Preventive Services - Waives the deductable and copayment for certain preventive services that are paid under the OPPS and the ASC payment system as required by the Affordable Care Act.
  • OPPS Market Basket Update - Calculates the CY 2011 OPPS payment rates to reflect a hospital operating market basket increase factor of 2.35 percent—the market basket of 2.6 percent minus the 0.25 percentage point reduction required by the Affordable Care Act.
  • No Payment Adjustment for Certain Cancer Hospitals - Omits a payment adjustment for cancer hospitals for CY 2011.
  • Quality Reporting - Adds four quality measures to the current list of 11 measures to be reported by hospital outpatient departments, making the total number of measures reported 15 for purposes of the CY 2012 payment determination (the Affordable Care Act prohibits the Secretary from applying a value-based performance measure unless it has been on the Hospital Compare Internet website for at least one year prior to the beginning of the performance period).
  • Validation of Quality Reporting - Implements validation requirements that will apply beginning with the CY 2012 payment determinations to ensure that hospitals are using chart-abstracted data.
  • Outlier Calculation - Continues the policy of placing aside 1.0 percent of aggregate total payments under the OPPS for outlier payments.
  • Supervision Requirements for Outpatient Therapeutic Services - Does not enforce the requirement for direct supervision of therapeutic outpatient services which applies to rural hospitals with 100 or fewer beds for CY 2011 but plans to incorporate the requirement in the CY 2012 rulemaking.
  • Partial Hospitalization Services - Establishes four separate partial hospitalization program (PHP) Ambulatory Payment Classifications per diem payment rates, two for community mental health centers PHPs and two for hospital-based PHPs.
  • Changes Affecting Physician-Owned Hospitals - Implements the Affordable Care Act provisions affecting physician-owned hospitals by stating that physician-owned hospitals that were converted from ASCs on or after March 23, 2010 cannot qualify for the revised rural provider and whole hospital exceptions set forth in the physician self-referral law, but confirms that the nature of existing beds, procedure rooms and ORs can be changed (e.g., a licensed bed can be changed to an OR) as long as there is no increase in the overall total number of beds, procedure rooms and ORs that were licensed as part of a physician-owned hospital on March 23, 2010.
  • Graduate Medical Education Provisions - Implements the direct and indirect graduate medical education (GME/IME) provisions of the Affordable Care Act including provisions related to the redistribution of unused resident slots to certain hospitals with qualified residency programs with a focus on increasing the number of primary care physicians.

The policies and the payment rates set forth in the final rule are applicable to services furnished on or after January 1, 2011 and comments to the rule will be accepted until January 3, 2011. The final rule is available by clicking here and the CMS fact sheet regarding the final rule is available by clicking here.