Proposed CMS Rule Raises Medicare OPPS and ASC Payments for 2014

On July 8, 2013, the Centers for Medicare & Medicaid Services (“CMS”) released a proposed rule that would update the payment policies and rates for services to Medicare beneficiaries in hospital outpatient departments and ambulatory surgical centers (“ASCs”) beginning January 1, 2014. CMS analyzed 2013 figures for the more than 4,000 facilities paid under the Outpatient Prospective Payment System (“OPPS”) and more than 5,000 Medicare-participating ASCs paid under the ASC payment system, and obtained estimates of the benefits and impacts of the proposed increases. The proposed rule would, among other aspects, increase average OPPS Medicare payments by 1.8% and the Medicare payments to ASCs by 0.9%. CMS further estimates that the increases to payment policies and rates of such services will increase OPPS payments by $4.37 billion and the Medicare payments to ASCs by $133 million.

If enacted, the proposed rule would also expand the current categories of packaged services to make the OPPS more of a prospective payment system and less of a fee-for-service system. For the 2014 calendar year, the CMS is proposing to package seven new items and services, which would be added to the list of those already listed in 42 C.F.R. 419.2(b). Such items and services include:
·         Drugs, biologicals, and radiopharmaceuticals that function as supplies in a diagnostic test or procedure;
·         Drugs and biologicals that function as supplies or devices in a surgical procedure;
·         Lab tests;
·         Procedures described by add-on codes;
·         Ancillary services;
·         Diagnostic tests on the bypass list; and
·         Devices removal procedures.
CMS is also proposing under this rule that certain ancillary or adjunctive items or services would be packaged similarly under the ASC payment system for 2014.

Although the main focus of the proposed rule is the increased OPPS and ASC Medicare payments, the rule also discusses adding quality reporting measures for both OPPS and ASC. Furthermore, the proposed rule discusses changes to conditions for coverage for organ procurement organizations, revisions to the Quality Improvement Organization regulations, changes to Medicare fee-for-service Electronic Health Record Incentive Programs, and changes related to provide reimbursement determinations and appeals.  
CMS will accept comments until 5:00 p.m. (EST) on September 6, 2013 on the proposed rule. The proposed rule may be accessed here:
If you have questions or would like more information about this proposed rule, its implication, or other health care matters, please contact Susan Ziel at (317) 238-6244 or