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Highlights of the 2012 Hospital Outpatient Prospective Payment System Final Rule and Physician Fee Schedule

 ACCC members can view a detailed summary of the final 2012 HOPPS rule. After you log on to the Members-Only section, select MEMBER RESOURCES from the menu at left.

 ACCC members can view a detailed summary of the final 2012 Physician Fee Schedule. After you log on to the Members-Only section, select MEMBER RESOURCES from the menu at left.

Hospital Outpatient Prospective Payment System Rule for 2012. On November 1, 2011, the Centers for Medicare & Medicaid Services (CMS) released the hospital outpatient prospective payment system (OPPS) final rule for 2012. CMS will accept comments until January 3, 2012. The Association of Community Cancer Centers (ACCC) has posted an analysis on its members-only website.

4 key points:

• CMS announced that the payment rates for 2012 will increase by 1.9 percent. This reflects a 3.0 percent increase in the hospital operating market basket, a -1.0 percent multifactor productivity (MFP) adjustment, and a 0.1 percentage point reduction required by the Affordable Care Act (ACA). Hospitals that fail to meet the quality data reporting requirements will receive an update that is reduced by 2.0 percentage points. CMS expects that total Medicare payments to hospital outpatient departments (HOPDs) will be approximately $41.1 billion and total payments to ambulatory surgical centers (ASCs) will be $3.5 billion in 2012.
• In general, CMS uses the same methodology and policies to establish payment for drugs, biologicals, and radiopharmaceuticals in 2012 as it used in 2011, with adjustments for inflation as well as a new adjustment to minimize “intra-rulemaking fluctuation.” In the Final Rule, this approach produces a payment rate of Average Sales Price (ASP) plus 4 percent for separately payable drugs, biologicals, and radiopharmaceuticals without pass-through status. This rate is a change from the current payment rate of ASP+5 percent. CMS arrived at the final rate by modifying slightly the methodology it has used since 2010. Drugs, biologicals, and radiopharmaceuticals with pass-through status will continue to be reimbursed at ASP+6 percent, the rate applicable in physicians’ offices, as required by statute. The packaging threshold will increase from $70 to $75.
• In 2012, 38 drugs and biologicals will have pass-through status.  These therapies will be reimbursed at ASP+6 percent, equivalent to the rate these drugs and biologicals will receive in the physician’s office setting in 2012.
• Physician supervision. CMS proposed to create an independent advisory review process for consideration of stakeholder requests for assignment of supervision levels other than direct supervision for specific outpatient hospital therapeutic services.  CMS finalized several major elements of this proposal, including the following: 1) The existing APC Panel will serve as the independent review entity; 2) CMS’s decisions will be posted on the OPPS web site for public review and comment, and would be effective either in July or January following the most recent APC Panel meeting; and 3) in recommending a supervision level to CMS, the Panel will assess whether there is a significant likelihood that the supervisory practitioner would need to reassess the patient and modify treatment during or immediately following the therapeutic intervention, or provide guidance or advice to the individual who provides the service.

Physician Fee Schedule Rule for 2012. On November 1, 2011, the CMS released the Medicare Physician Fee Schedule (PFS) final rule for calendar year 2012. CMS will accept comments until January 3, 2012.

The final rule will:

1. Project a conversion factor of $24.6712, reducing physician payment rates in 2012 by 27.4 percent.
2. Implement the third year of a four-year transition to practice expense (PE) relative value units (RVUs) calculated using Physician Practice Information Survey (PPIS) survey data.
3. Identify and revise potentially misvalued services under the PFS.
4. Implement a new process for identifying misvalued codes.
5. Expand the imaging multiple procedure payment reduction (MPPR) policy to the professional component of advanced imaging services.
6. Implement provisions affecting the Physician Quality Reporting System (PQRS), Electronic Prescribing (eRx) Incentive Program, and Electronic Health Records (EHR) Incentive Program.
7. Begin implementation of a value-based payment modifier.

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