CMS Announces Changes to Policies and Payment for Hospital Outpatient Services (HOPPS)

November 2, 2006

CMS Announces Changes to Policies and Payment for Hospital Outpatient Services (HOPPS)

Effective January 1, 2007

On November 1, 2006, the Centers for Medicare & Medicaid Services (CMS) issued a final rule for Medicare payment for hospital outpatient services in calendar year (CY) 2007.

The final rule affects hospital outpatient payments services paid under the outpatient prospective payment system (HOPPS). Important Nuclear Medicine and Nuclear Cardiology finalized CMS policies include:

  • Radiopharmaceuticals will continue to be paid at charges adjusted to cost using hospital-specific cost-to-charge ratios. Drugs and biologicals will be paid at 106 percent of the average sales price (ASP+6), rather than the proposed rate of 105 percent of ASP.
  • CMS finalized its proposed policy to pay separately for drugs, biologicals and radiopharmaceuticals costing $55 or more per day, consistent with the previous $50 threshold but updated for inflation. Payments for other drugs will continue to be bundled into payments for their associated procedures.
  • While nuclear medicine procedures remain relatively stable with modest increases in payment rates for 2007, PET will experience significant decreases. Additionally, these decreases will extend into the physician fee schedule with the DRA provision.

Some Important High Volume HOPPS Procedure 2006 and 2007 Rates Include:

CPT/ HCPCS Description 2006 FINAL HOPPS Payment Rate 2007 FINAL HOPPS Payment Rate % Change
78306 Bone imaging, whole body $237.57 $ 240.79 +1.36 %
 
78465 Heart image (SPECT), multiple $ 397.11 $ 399.62 +0.63%
78478 Heart wall motion add-on $ 89.50 $ 92.53 +3.39%
78480 Heart function add-on $ 89.50 $ 92.53 +3.39%
78492 Heart image PET, multiple $2,484.88 $ 731.24 -70.57%
78812 Tumor image PET/skul-thigh $1,150.00 $ 855.43 -25.61%
78815 Tumor image PET/CT skul-thigh $1,250.00 $ 950.00 -24.00%

Additional NOTES: CMS is implementing in CY 2007 a provision of the Deficit Reduction Act (DRA), which requires that Medicare payment for surgical procedures performed in ASCs not exceed the Medicare payment for the same procedures when they are performed in a hospital outpatient department subject to the OPPS. This provision will result in decreased payment for approximately 280 procedures on the ASC list beginning January 1, 2007.

CMS is revising the Ambulatory Payment Classification (APC) payment and coding structure for drug administration services, allowing hospitals to report the same CPT codes for drug administration used by physicians and other payors, and to be paid separately for additional hours of infusion, in addition to their payment for the initial hour of infusion. As a result, hospitals will be paid more accurately for complex and lengthy drug administration services, while also receiving more appropriate payments for individual services when provided alone.

The final rule is now posted on the CMS website at: www.cms.hhs.gov/HospitalOutpatientPPS/01_overview.asp

The rule went on display at the Federal Register at 4:00 p.m. November 1, 2006, and will be published at a later date. It will be effective for outpatient and ASC services furnished to Medicare beneficiaries on or after January 1, 2007.