Hospital Outpatient Prospective Payment System (HOPPS) 2006 Final Rule Summary and Impact on Hematology

On November 2, 2005 CMS issued the final hospital outpatient prospective payment (HOPPS) rule for 2006. The major changes in the rule are as follows:

• Acute care hospitals will receive a 3.7 percent inflation update in Medicare payment.
  
• Sole community hospitals in rural areas will receive an additional 7.1 percent payment adjustment based on a study of rural hospital costs.
  
• Patient coinsurance continues to decline. While ultimately coinsurance is being transitioned to 20 percent for all services, for 2006, it will average 29 percent with a maximum of 40 percent.
  
• As in the physician office setting, payment for most drugs will be based on 106 percent of the average sales price (ASP) reported by manufacturers. Since ASP data is not available for most radiopharmaceuticals, CMS is basing the payment for these products on estimated hospital costs derived from hospital charges.
  
• Blood and blood products will be paid under a separate methodology based on blood specific cost to charge ratios with a floor at 95 percent of the 2005 rates.
  
• CMS did not adopt the proposal in the proposed rule to require that an application for a new technology APC be accompanied by a copy of a CPT application form submitted to the AMA CPT Editorial Board. However, it indicates its intention to seeks further input on this issue from device manufacturers, hospitals and other interested parties. CMS also did not adopt the provision in the proposed rule to provide for a multiple procedure discount for certain families of imaging procedures.

The following is of particular interest to hematology:

• A comparison of the 2005 and 2006 HOPPS rates for services of interest to hematology is available online.
  
• Concerned that hospitals would be overwhelmed with the implementation of the drug administration CPT codes, CMS decided not to implement the 13 codes that describe "initial," "sequential," or "concurrent" infusion services. Instead, 6 new HCPCS C-codes will parallel the infusion and IV push codes from 2005. They are as follows:

  C8950: Intraveneous infusion for therapy/diagnosis; up to one hour
  C8951: Intraveneous infusion for therapy/diagnosis each additional hour
  C8952: Therapeutic, prophylactic, or diagnostic injection, intravenous
  push
  C8953: Chemotherapy administration, intravenous; push technique
  C8954: Chemotherapy administration, intravenous; infusion technique,
  up to one hour
  C8955: Chemotherapy administration, intravenous; infusion technique,
  each additional hour

  The rest of the 33 new drug administration codes (20 codes) will be adopted on January 1, 2006. CMS also created two new C-codes codes for prolonged chemotherapy infusion requiring a pump after receiving comments that the new CPT codes did not include appropriate codes to bill for these services.

• In response to concerns about beneficiary access to IVIG, CMS is establishing a temporary add-on payment of $75 to cover the costs of locating and acquiring adequate IVIG product. This is similar to the policy established under the physician fee schedule.
  
• As was requested by ASH, CMS reassigned Code 36515 to APC 0112, from APC 0111. There was also extensive discussion about the comments offered regarding the 25 percent reduction in payment for the APC. Specifically, the concerns were: (1) the rate was so low that it would not cover the costs of the disposable, (2) some hospitals apparently misused the apheresis codes given the diagnosis codes used and these claims should be excluded, and (3) CMS should only use claims which had separate charges for the costly disposables. Unfortunately, after further analyzing the data, CMS decided to retain the current method for calculating the APC and established a final APC rate of $1,568. CMS did not feel it could exclude the claims in which the disposable was packaged (i.e., not separately charged for) as opposed to using only claims where a separate charge was imposed for the disposable. Moreover, CMS noted that the differential in costs for these claims was only $349 and not the $900-$1,400 level anticipated by the commenters. Finally, CMS did not think it could exclude claims on the basis of presumed hospital miscoding based on the ICD-9 diagnosis code used.