News | November 01, 2006

CMS Takes Steps to Increase Value in Hospital Outpatient Care

The Centers for Medicare and Medicaid Services (CMS) has issued a final rule for Medicare payment for hospital outpatient services in calendar year 2007 that will implement new steps to make payments more accurate and to promote higher quality and value in outpatient care. Included in the final outpatient prospective payment system (OPPS) rule are provisions expanding quality reporting requirement for hospital inpatient services as well as expanding the list of services for which Medicare will make payment to ambulatory surgical centers in 2007.
Hospitals would receive an estimated $32.5 billion in 2007 under the final rule that revises policies and payment rates under the OPPS for outpatient services provided to Medicare beneficiaries. The final rule affects outpatient services furnished by general acute care hospitals, inpatient rehabilitation facilities, inpatient psychiatric facilities, long-term acute care hospitals, children’s hospitals, and cancer hospitals. As provided by statute, the rule includes a 3.4 percent market basket update to Medicare payment rates for services paid under the hospital OPPS for 2007. After taking into account other factors that affect the level of payments, CMS estimates that hospitals will receive an overall average increase of 3 percent in Medicare payments for outpatient department services in 2007 due to the changes in this final rule.

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