Hospital Outpatient Prospective Payment System Rule for 2008

November 15, 2007 – On November 1, 2007, the Centers for Medicare and Medicaid (CMS) published the final Hospital Outpatient Prospective Payment System (HOPPS) rule for 2008. The rule can be found at http://www.cms.hhs.gov/HospitalOutpatientPPS/downloads/cms1392fc.pdf.

ISSUES OF SPECIFIC INTEREST TO ASH

Update and Hospital Impact
For 2008, the inflationary update in the outpatient payment rates will be 3.3 percent. Due to other policy changes made by the rule the average increase in outpatient payments for hospitals will be 3.8 percent, with urban hospitals seeing a slightly larger increase than rural hospitals. Teaching hospitals will see an average increase of about 3.8 percent.

Comparison of 2007 and 2008 Payment Rates
Increases in payment are occurring for almost all of the drug administration, blood transfusion, apheresis, and harvesting stem cells services. Also, there are substantial increases in payment for bone marrow biopsy and bone marrow/stem cell transplant codes. There are slight decreases in payment for the flow cytometry codes in 2008. For more information, view the comparison chart prepared by ASH for the 2007 and 2008 HOPPS rates for procedural services of interest to hematologists.

Reporting of Bone Marrow and Stem Cell Processing Services
After several years of effort on the part of ASH, AABB, and ASBMT, CMS will recognize the bone marrow/stem cell laboratory processing codes. In addition, payment for these services has increased substantially from the levels published in the proposed rule. These codes are:

38207 Cryopreserve stem cells
38208 Thaw preserved stem cells
38209 Wash harvest stem cells
38210 T-cell depletion of harvest
38211 Tumor cell deplete of harvest
38212 Rbc depletion of harvest
38213 Platelet deplete of harvest
38214 Volume deplete of harvest
38215 Harvest stem cell concentrate

CPT Codes 38207-38209, which represent freezing, storing and thawing bone marrow/stem cells prior to transplant, have been assigned to APC 0110 with a payment of $216. CPT Codes 38210-38215 which represent various bone marrow/stem cell depletion codes have been assigned to APC 393 paying $362.55.

ASH had also requested that the T-cell and tumor cell depletion codes (38210 and 38211) be placed in a separate higher paying APC and provided survey data to demonstrate the costs of these services. In the discussion of this issue in the final rule CMS explained that it assigned all of the depletion codes to a single APC because there was no actual claims data for these services which they would prefer to use in determining APC placement. CMS plans to revisit the APC placement for the individual codes once claims data becomes available.

Blood Transfusions
CMS will continue its current policy requiring a single unit of CPT code 36430 (Transfusion, blood or blood components) to be reported regardless of how many transfusions occur on a single date of service. (The blood product itself is paid based on the actual number of units provided.) The APC Advisory Committee had recommended to CMS at its March 2007 meeting that CMS identify when multiple units of blood or blood components are transfused and to trigger an additional discounted payment for the second and subsequent blood administration services on a single date of service. In the rule, CMS rejects the Advisory Committee recommendation, but reminds hospitals that in billing code 36430, hospitals should include charges for the totality of all transfusion services provided on a single date of service.

Payments for Blood Products
The final payment rates for 19 of the 34 blood and blood product APCs will be increasing in 2008. The 19 APCs increasing in payment are generally the higher volume products, which CMS estimates represent 77 percent of the total units billed to Medicare. Over the past few years CMS has established various policies to ensure that payments for blood products are not subject to precipitous reductions in payment year to year based on the reported charge data. This has been a particular concern with some low volume products. With the implementation of these policy changes, hospitals are now taking into consideration all appropriate costs associated with providing blood and blood products when setting their charges. This is resulting in relatively stable and slightly increasing payment rates.

Payment for Part B Drugs and Blood Clotting Factors
CMS will reduce the payment for drugs paid for under HOPPS from 106 to 105 percent of Average Sales Price (ASP). In reviewing actual cost data on separately paid drugs, including blood clotting factor, CMS found that at the rate of ASP + 6 percent hospitals were being overpaid. For 2008, CMS will be reducing the payment rate to ASP + 5 percent. Further reductions are likely in future years perhaps to the level of ASP +3 percent, which CMS feels is justified based on current cost data.

Clotting Factor - CMS will be increasing the administration fee for furnishing blood clotting factor by 4 percent to $0.158 per unit.

IVIG - CMS is continuing to pay for IVIG preadmission services (G0332) at a rate of $37.71 for 2008. CMS indicates it will consider the continued need for separate payment for IVIG preadmission services for 2009, including the possibility of packaging this service in the future.

Payment for Radioimmunotherapy Agents
ASH had commented on the payment rate in the proposed rule for the BEXXAR therapeutic regimen used in the treatment of non-Hodgkin’s lymphoma. ASH had requested that CMS pay separately for the supply of Tositumomab including for the dosimetric dose of I-131 Tositumomab. ASH is very concerned that the low payment rate will result in the end of this kind of treatment and will negatively affect new technologies.

CMS is considering only the therapeutic dose of Tositumomab a separately payable service. CMS states that unlabeled Tositumomab is not approved as either a drug or a radiopharmaceutical and therefore is considered to be a supply which is not separately paid under HOPPS, but rather is packaged into the payment for administration (G3001). In addition, the dosimetric dose is considered to be a diagnostic radiopharmaceutical and as such is now considered a packaged service.

The manufacturer, GlaxoSmithKline (GSK), remains concerned that the total payment for BEXXAR will cover less than half of the hospital’s cost of the drug regimen. GSK considers all the doses of Tositumomab to be therapeutic and separately payable and is questioning the validity of Medicare’s 2006 claims data used to set the payment rate for the product. Although this is now a final rule, the manufacturer is hoping to have the rate corrected before it goes into effect.

Value Based Purchasing
CMS is moving toward a system of value-based purchasing under HOPPS and has set two goals 1) To encourage the provision of high quality services leading to improved outcomes for Medicare beneficiaries through the quality data reporting program and 2) To initiate specific payment approaches to encourage the efficient delivery of services and control future growth of the volume of services.

With this in mind, hospitals must report seven outpatient specific quality measures in 2008 to receive the full APC payment update in 2009. If they do not report this data, payments to the hospitals will be reduced by 2.0 percentage points. These measures include five measures relating to the care of patients with acute myocardial infarctions in the ER and two measures aimed at improving the care of surgical patients. The two surgical quality measures relate to the perioperative care of surgical patients—the timing of antibiotic prophylaxis and the selection of the prophylactic antibiotic.

In addition, to encourage increased efficiency of outpatient care, CMS is expanding the "bundle" of services included within an APC payment. CMS believes increases in packaging provide hospitals with the flexibility to manage their resources more efficiently. Thus, the following procedures will no longer be separately paid when part of a primary diagnostic or treatment procedure: guidance services, image processing services, intraoperative diagnostic services, imaging supervision and interpretation services, diagnostic radiopharmaceuticals, contrast agents and observation services. Generally, the change in packaging is estimated to be budget neutral since the payment for the primary procedure is being increased to reflect the cost of the packaged services.