UPDATE: CMS has released the proposed Medicare Reimbursement Rates for 2014. Read more here.

The Centers for Medicare and Medicaid Services (CMS) this week published a series of rules related to reimbursement policies and rates covering a wide variety of healthcare provider services.

According to CMS staff, following a public comment period, the rules will be finalized and then go into effect on Jan. 1, 2013.

The new rules cover several provider areas. For specific details as well as instructions on how and when to submit comments, download the accompanying official CMS announcement (PDF download; registration required):

  • Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center. (You must be logged in to download this file. Don't have an account? Register for free and you'll be returned to this page.)
  • Home Health Prospective Payment System. (You must be logged in to download this file. Don't have an account? Register for free and you'll be returned to this page.)
  • End-Stage Renal Disease. (You must be logged in to download this file. Don't have an account? Register for free and you'll be returned to this page.)

As reported Wednesday, CMS also announced an increase in Medicaid rates paid to primary care physicians.

The following descriptions of the new rules are from CMS press releases and fact sheets:


The final OPPS/ASC rule affects hospital outpatient departments in more than 4,000 hospitals, including general acute care hospitals, inpatient rehabilitation facilities, inpatient psychiatric facilities, long-term acute care hospitals, children’s hospitals, and cancer hospitals, and approximately 5,000 Medicare-participating ASCs.

The new rules will increase payment rates for hospital outpatient departments by 1.8 percent. The increase is based on the projected hospital market basket — an inflation rate for goods and services used by hospitals — of 2.6 percent, minus 0.8 percent in statutory reductions, including a 0.7 percent adjustment for economy-wide productivity and a 0.1 percentage point adjustment required by statute.

The OPPS rule also contains a significant change from prior policy as it bases relative payment weights on geometric mean costs rather than median costs. According to CMS, basing the OPPS payments on mean costs better reflects average costs of services and aligns the metric used in rate-setting for the OPPS with the IPPS.

For 2013, ASC payment rates will increase by 0.6 percent—the projected rate of inflation of 1.4 percent minus a 0.8 percent productivity adjustment required by law. Medicare uses changes in the consumer price index for urban consumers as the measure of inflation for ASCs.

Total payments to hospitals under the OPPS in CY 2013 will be approximately $48.1 billion and total payments to ASCs under the ASC payment system will be approximately $4.07 billion.

The rule makes several changes to the quality-reporting program for outpatient departments. While CMS did not add any new measures to the 22 measures finalized for the 2014 payment determination, CMS confirmed the removal of one measure; deferred data collection for another measure; and confirmed the suspension of data collection for a third measure. In addition, CMS finalized proposed revisions to several procedural requirements that apply to the reporting of quality data and finalized the automatic retention of Hospital Outpatient Quality Reporting Program measures adopted in previous payment determinations for subsequent year payment determinations, until the measures are actively removed, suspended, or replaced.

CMS also finalized proposed revisions to the ASC Quality Reporting program, including requirements for claims-based measures regarding the dates for submission, payment of claims and data completeness, and a methodology for reducing payment to ASCs that do not meet the program’s reporting requirements. CMS also adopted principles to be applied in future measure selection and development. CMS previously finalized the measure sets that apply to the 2014 through 2016 payment determinations.

The rule also streamlines the operations of the Quality Improvement Organizations (QIOs), increases their transparency, and makes them more responsive to beneficiary complaints about quality of care. QIOs are organizations composed of health professionals under contract to CMS who are charged with monitoring and improving Medicare beneficiaries’ care.

For example, the rule requires QIOs to provide beneficiaries with more information about their review processes. It establishes a new alternative dispute resolution option called “Immediate Advocacy” to resolve beneficiary complaints. It allows QIOs to send and receive secure electronic health information. Finally, the rule gives beneficiaries the right to authorize the QIOs’ use and disclosure of confidential information and removes outdated regulations so that QIOs will have to provide beneficiaries with more information about specific reviews.

Lastly, CMS finalized Inpatient Rehabilitation Facility (IRF) quality-reporting proposals, including:

  • As proposed, an application of the National Quality Forum (NQF)-endorsed catheter-associated urinary tract infection (CAUTI) measure for the IRF quality-reporting program for the FY 2014 annual payment update determination, and,
  • The actual NQF-updated CAUTI measure for the Fiscal 2015 payment determination and all subsequent fiscal year payment determinations. CMS also adopted a non-risk adjusted version of a NQF-endorsed pressure ulcer measure.

The final OPPS rule stipulates that any measure selected for use in the IRF QRP will remain in effect until actively removed, suspended, or replaced.


Under the new rule, payments to home health agencies are estimated to be virtually unchanged next year, decreasing by approximately $10 million in 2013 (about 0.01 percent). This reflects the net effect of a 1.3 percent home health payment update, an updated wage index, an update to the fixed-dollar loss (FDL) ratio, and a case-mix coding adjustment intended to offset coding changes unrelated to changes in patient health needs.

The final rule rebases and revises the home health market basket to ensure that it continues to adequately reflect the price changes of providing efficient home health services. The 2013 home health market basket results in a labor-related share of 78.535 percent and a non-labor share of 21.465 percent.

Medicare law applies a 1 percent reduction to the 2013 home health market basket update of 2.3 percent, resulting in a 1.3 percent home health payment update for home health agencies next year. As part of the 2012 HH PPS final rule, CMS finalized a reduction in rates of 1.32 percent in 2013 to account for growth in aggregate case-mix that is unrelated to changes in patients’ health status. This is unchanged in this final rule. CMS will continue to monitor any future changes in case-mix and make updates as appropriate.

In acute or post-acute care settings, this final rule provides additional flexibility in certifying patients as eligible for the home health benefit. The HH PPS final rule makes changes that help ensure patients maintain access to therapy services, while reducing burden on home health agencies.

The final rule promotes quality of care for patients by ensuring that home health agencies that are out of compliance with Federal health and safety standards, known as the Conditions of Participation, can correct their performance and achieve prompt compliance. The rule provides agencies with the opportunity to achieve compliance through new methods, such as directed plans of correction or directed in-service training. It also permits CMS to impose alternative sanctions in addition to termination for agencies that do not maintain or achieve compliance with Federal health and safety standards. The rule establishes new survey and certification requirements for home health agencies including definitions for types of surveys, survey frequency, surveyor qualifications, and the opportunity for Informal Dispute Resolution. Finally, this rule extends certain requirements concerning the hospice quality reporting program to subsequent years.


The new rule updates Medicare policies and payment rates for dialysis facilities paid under the End-Stage Renal Disease (ESRD) Prospective Payment System (PPS). The final rule also strengthens incentives to improve quality of care and outcomes for patients through the ESRD Quality Incentive Program (QIP). Performance scores on the QIP measures during the 2013 performance period will be used to inform payments to dialysis facilities in payment year 2015.

Payment rates for outpatient maintenance dialysis treatments will increase by 2.3 percent in 2013. This reflects the ESRD bundled market basket increase of 2.9 percent reduced by a productivity adjustment of 0.6 percent, as required by statute. CMS estimates that Medicare payments to the 5,726 ESRD facilities in 2013 will total $8.4 billion.