Overview of Changes Proposed in the Medicare CY 2006 HOPD Proposed Rule
The CY 2006 hospital outpatient department (HOPD) proposed rule was put on display July 18, 2005. Below is an overview of some, but not all, of the changes affecting HOPDs.
Click here to read ACCC's comment letter to CMS.
Part B drugs, biologicals, and radiopharmaceuticals
The Centers for Medicare and Medicaid Services (CMS) is proposing to pay for most Part B drugs, biologicals, and radiopharmaceuticals administered in HOPDs based on competitive market prices. These drugs are primarily injectable drugs administered by clinicians and used to treat cancer and other conditions. Currently, these drugs are paid at 83 percent of the average wholesale price (AWP). The new proposed payment is at 106 percent of the manufacturer’s average sales price (ASP). Payment rates for all drugs under this methodology would be updated quarterly.
Radiopharmaceutical Agents
CMS is proposing as a temporary one-year policy for CY 2006 to pay for radiopharmaceutical agents that are separately payable in CY 2006 based on the hospital’s charge for each radiopharmaceutical agent adjusted to cost.
Pharmacy Handling and Overhead
The proposed rule revises payment for pharmacy costs, such as pharmacists’ salaries, related to providing Part B drugs in hospital outpatient departments. Currently, payment for these costs is bundled into the payment for the drug. CMS is proposing to begin collecting claims data in 2006 with these costs separately identified for use in setting payment rates for 2008. In the meantime, CMS is proposing to pay an additional 2 percent over the drug payment to cover these costs by establishing three distinct HCPCS C-codes and three corresponding APCs for drug handling categories to differentiate overhead costs
for drugs and biologicals. For CY 2006, CMS is proposing an adjustment to cover the costs hospitals incur for handling separately payable drugs and biologicals based on 2 percent of ASP. This percent add-on would apply to all drugs and biologicals EXCEPT for radiopharmaceuticals.
CMS is not proposing to scale the payment rates for drugs and biologicals based on the ASP methodology, but does plan to scale the additional payment amount of 2 percent of the ASP for pharmacy overhead costs. As such, CMS proposes that the additional 2 percent of the ASP scaled for budget neutrality for overhead costs associated with separately payable drugs and biologicals, along with paying ASP+6 percent for the acquisition costs of the drugs and biologicals.
Threshold Limit
CMS is proposing to continue its existing policy of paying separately for drugs, biologicals, and radiopharmaceuticals whose per day cost exceeds $50 and
packaging the cost of drugs, biologicals, and radiopharmaceuticals whose per day cost is less than $50 into the procedures with which they are billed.
Anti-emetic Exemption to Threshold Limit
Oral and injectable 5HT3 anti-emetic products will continue to be exempt from CMS's packaging rule, thereby making separate payment for all of the 5HT3 anti-emetic products.
Equitable Adjustment Policy
In CY 2005, CMS applied an equitable adjustment to determine the payment rate for darbepoetin alfa (Q0137) pursuant to section 1833(t)(2)(E) of the Act. However, for CY 2006, the agency is proposing to establish the payment rate for this biological using the ASP methodology.
Low Osmolar Contrast Material (LOCM)
CMS is proposing to activate Q9945 through Q9951 for hospitals and discontinue the use of HCPCS codes A4644 through A4646 for billing LOCM products. HCPCS codes Q9945 through Q9951 will be paid separately in CY 2006 at payment rates calculated using the ASP methodology. CMS notes that because the new Q-codes describing LOCM are more descriptively discriminating and have different units than the previous A-codes for LOCM as well as widely varying ASPs, it is expected that the packaging status of these Q-codes may change in future years when we have specific OPPS claims data for these new codes.
Evaluation and Management (E&M) Services
The AHA/AHIMA expert panel had developed a national set of coding guidelines for hospital clinic visits. Rather than adopting the guidelines, in the proposed rule CMS announces a public listserv and states that the agency anticipates providing notice of between 6 and 12 months prior to the implementation of new E&M guidelines.
Multiple Diagnostic Imaging Procedures
Currently, under the OPPS, hospitals billing for diagnostic imaging procedures receive full APC payments for each service on a claim, regardless of how many
procedures are performed using a single imaging modality and whether or not contiguous areas of the body are studied in the same session. In 2006, CMS is proposing a 50-percent reduction in the OPPS payments for some second and subsequent imaging procedures performed within the "identified families." The multiple imaging procedure reduction would apply only to individual services described by codes within one family, not across families. Reductions would apply when more than one procedure within the family is performed in the same session. Full payment would be made for the procedure with the highest APC payment rate, and payment at 50 percent of the applicable APC payment rate for every additional procedure, when performed in the same session.
Publication Date and Comment Period
The proposed rule will be published in the July 25, 2005, Federal Register. Comments will be accepted until Friday, September 16, 2005, and a final rule is
scheduled to be published by November 1, 2005.
Don Jewler, Communications Director
