Outpatient Surgery Magazine

Obamacare, You're Fired - December 2016 - Subscribe to Outpatient Surgery Magazine

Outpatient Surgery Magazine, providing current information on Surgical Services, Surgical Facility Administration, Outpatient Surgery News and Trends, OR Excellence and more.

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Page 23 of 132

supplies — 8 years ago, it used the Hospital Outpatient Prospective Payment System (OPPS) as a basis. The OPPS is linked primarily to the hospital outpatient department (HOPD) payment system, but not all policies are aligned. This sometimes leads to significant disparity in rates and coverage. • CPI-U. CMS uses different update factors to anticipate annual cost changes. To update HOPD payments, CMS uses the hospital market basket, which considers the costs of medical equipment, supplies, per- sonnel and other overhead affiliated with running an outpatient surgical facility. To update ASC payments, CMS uses the Consumer Price Index for All Urban Consumers (CPI-U), which is based on what consumers spend on such goods as milk, bread and gasoline. Guess what. Medical equipment and supply cost increases are consistently higher than increases in consumer good prices. ASCs are the only facility type that are still updated on the CPI-U. Why won't CMS align the update factors by using the hospital market basket to update ASC payments? Why did the reimbursement rate for a code drop? Rate setting is sophisticated, but at a very basic level starts with hospital cost reporting. Hospitals supply CMS with outpatient hospital cost data that it then uses to set both the OPPS and the ASC payment rates. CMS compiles the cost data and tries to take out anomalies to derive accurate average costs in the HOPD setting. If hospitals report lower costs for certain codes, those payment rates will then drop for both HOPDs and ASCs. In 2017, facility fee rates for many spine and orthopedic codes will drop significantly. Another reason a code's reimbursement can drop is if it is reas- signed to a new ambulatory payment classification (APC) group. CMS puts codes they view as clinically similar into the same group, and all codes within an APC are reimbursed the same amount. Sometimes 2 Coding & Billing CB 2 4 • O U T PA T I E N T S U R G E R Y M A G A Z I N E • D E C E M B E R 2 0 1 6

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