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Comment Letter to CMS on Hospital Outpatient Prospective Payment System and Calendar Year 2008 Payment Rates; Proposed Rule
Regulatory Advocacy
Last Updated: 9/14/2007
September 14, 2007
Kerry Weems
Acting Administrator
Centers for Medicare & Medicaid Services
Hubert H. Humphrey Building
200 Independence Avenue, S.W., Room 445-G
Washington, DC 20201
RE: CMS-1392-P, Medicare: Hospital Outpatient Prospective Payment System and Calendar Year 2008 Payment Rates; Proposed Rule
Dear Mr. Weems:
On behalf of our more than 225 member hospitals and health care systems, The Hospital & Healthsystem Association of Pennsylvania (HAP) welcomes this opportunity to comment on the proposed rule, “Medicare: Hospital Outpatient Prospective Payment System (OPPS) and Calendar Year 2008 Payment Rates; Proposed Rule” as published in the August 2, 2007, Federal Register.
The Centers for Medicare & Medicaid Services (CMS) has proposed significant changes to the Medicare OPPS and, while the proposed rule has many components, there are several key areas within the rule that significantly will impact Pennsylvania hospitals and health systems. The key components of the proposed rule include:
- A requirement for hospitals to begin reporting data effective January 1, 2008, on ten outpatient quality measures that have not been fully endorsed by the National Qualify Forum in order to receive a full outpatient market basket update during 2009.
- An increase in the number of the OPPS payment bundles, as a result of CMS proposing to package the costs of seven ancillary and supportive items and services into the primary procedure.
- An implementation of new codes for hospital clinic and emergency department visits in the absence of accompanying national code definitions and national guidelines.
- A 24 percent reduction of the partial hospitalization (PHP) per diem rate, based on the median per diem cost.
- A requirement for critical access hospital (CAH)-operated provider-based facilities created after January 1, 2008, to comply with the CAH distance requirement of a 35-mile drive to the nearest hospital or 15 miles if mountainous terrain or secondary roads.
The following are summary comments on the key issues mentioned above.
Reporting of Hospital Quality Data
Pennsylvania hospitals support making data available to the public that is valid and reliable. However, HAP questions the validity and reliability of any data that is reported before the measures are fully field-tested. Expecting hospitals to implement an entirely new data collection program in less than four months that is tied to payment is unreasonable and unduly burdensome. HAP urges CMS to delay data collection on the outpatient measures until the measures have been fully field-tested, the data specifications have been finalized, and the data collection software is fully operational.
Increase in the Number of Outpatient PPS Payment Bundles
HAP recognizes the value of incorporating services into payment bundles as a means of providing incentives to improve efficiency and manage resources. However, we have concerns about the CMS proposal and underlying analysis behind the proposal. A separate study conducted for the American Hospital Association (AHA) revealed very different impacts by type of hospital than CMS’s impact tables, and we are concerned that the full implications of this policy are not fully understood. In addition, we have particular concerns about the proposal to package observation services. There appears to be a concentration of observation services in a relatively small number of hospitals, which may be more likely due to misunderstanding of coding rules. Including observation services with such skewed claims data is not appropriate at this time.
Hospital Coding for Emergency Departments
HAP continues to believe that CMS should not implement new codes for hospital clinic and emergency department visits in the absence of accompanying national code definitions and national guidelines. These national coding definitions and guidelines should be formally proposed and subjected to stakeholder review, before being finalized. In addition, we are particularly concerned by CMS’s implemented payment structure for type A and type B emergency department visits, and the confusion it has created regarding how a hospital may triage patients needing primary care, rather than emergency care. HAP believes CMS’s policy can be improved to be more reasonable and clear on the appropriate coding for fast track emergency department services.
Payment for Partial Hospitalization
HAP believes CMS should not implement the 24 percent reduction to the partial hospitalization program (PHP) per diem rate. Rather, CMS should maintain the PHP per diem at the calendar year (CY) 2007 rate of $233 to ensure continued beneficiary access to PHP services. In addition, we recommend CMS further study the possibility of differentiating payment based on the intensity of services provided during a day of PHP services for CY 2009.
Co-Location of Necessary Provider Critical Access Hospitals
CMS should rescind its proposal to require a CAH-operated provider-based facility created after January 1, 2008, to comply with the CAH distance requirement of a 35-mile drive to the nearest hospital (or 15 miles in the case of mountainous terrain or secondary roads). It is not clear exactly which types of entities CMS intends for this policy to apply. The agency’s proposal is contrary to CMS’s stated intention in the rule “to ensure access to essential health care services for rural residents.” Such a policy would make physician recruitment and retention in rural areas even harder and would jeopardize access to services in rural areas. In addition, surrounding PPS hospitals can locate provider-based entities wherever they chose as long as they continue to meet provider-based criteria. Thus, this policy would put CAHs at a disadvantage compared to local PPS hospitals.
HAP has enclosed more detailed comments on other sections of the proposed rule, which reflect our concerns and recommendations.
Again, HAP appreciates the opportunity to submit these comments and recommendations. If you have any questions regarding our comments, please contact Robert E. Greenwood, HAP’s vice president, health care finance and insurance, at (717) 561-5358; or Lynn Leighton, HAP’s vice president, professional and clinical services, at (717) 561-5308.
Sincerely, PAULA A. BUSSARD
Senior Vice President, Policy and Regulatory Services
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