Hospital Outpatient Prospective Payment System

• CMS Publishes Final Rule for Medicare 2007 Reimbursement
• Hospital Outpatient Prospective Payment System
• Q1 2007 Medicare Part B Payment Rates

Drug Administration – Changes in Coding & Reimbursement  
In the final rule CMS has implemented steps to make payments more accurate in outpatient care.  

CMS is revising the Ambulatory Payment Classification (APC) payment and coding structure for drug administration service. Hospitals will now report the same CPT codes for drug administration used by physicians and other payers in place of the existing C-Codes.  

Under HOPPS there will actually be an increase in physician administration reimbursement.   CMS will now reimburse for every hour of infusion services. Previously under HOPPS CMS only reimbursed for the first hour. As of January 2007 there will be a set rate for the first hour and than another set rate for each subsequent hour.   

Currently, the Medicare statute requires CMS to bundle the payment for drugs and biologicals costing $50.00 or less per administration into the procedures for which they are associated. In the final rule CMS finalizes this proposal to pay separately for drugs, biologicals, radiopharmaceuticals and anti-nausea drugs costing $55.00 or more per day. The proposed rule posed a rate of 105% of ASP, however, the final rule which will be implemented January 1, 2007 maintains the payment rate at 106% of ASP.    

CMS also proposed reducing the per diem payment for partial hospitalization service in hospital outpatient departments by 15%. After consideration and review of public comments on this reduction, the final rule includes a per diem reduction of 5% for CY 2007.  

Vivaglobin^® Immune Globulin Subcutaneous    
In November 2006, CMS established a HCPCS code for Subcutaneous IG. Vivaglobin^® Immune Globulin continues to be the only FDA approved drug for subcutaneous administration.   

J 1562 “Injection Immune Globulin Subcutaneous – 100 mg., is effective January 1, 2007 for use by all payers.  

Vivaglobin^® has been added to the external infusion pump policy for coverage under the DME Regional Carriers.   Reimbursement for DME covered items remain at 95% of AWP per statute.   Intravenous immune globulin codes are not to be used for subcutaneous immune globulin.  

(Please see Vivaglobin Reimbursement Alert for complete information regarding billing for Vivaglobin^® therapy.)  

Blood Clotting Factors  
The reimbursement rate, set by statute for Medicare Part B reimbursement will remain at 106% of ASP for the class of therapy.   In regards to HOPPS, the statute states the reimbursement rate must represent the average acquisition price.   The original proposal reduced the rate to 105% of ASP, however the final rule restores reimbursement to 106% of ASP.   

The Medicare Modernization Act requires CMS to implement a furnishing fee to be added on top of the 106% of ASP when determining reimbursement for factor therapies. This rate is adjusted annually based on the U.S. Consumer Price Index. The furnishing fee for CY 2007 is $0.152 per unit of blood clotting factor.  

Establishment of new von Willebrand Code  
In November 2006 CMS established a new code for von Willebrand factor, J7187, effective January 1, 2007. This code is based on a ristocetin cofactor international unit (IU) unit of measure. J7188, which is based on the standard IU unit of measure rather, than the ristocetin cofactor unit of measure, will be eliminated in January 2007.   Humate P^® will be the only drug in this newly established class (J7187).

Next: Q1 2007 Medicare Part B Payment Rates