On November 15, 2012, the Centers for Medicare & Medicaid Services (CMS) published its publishing its final rule with comment period updating Medicare payment and other policies for the hospital outpatient prospective payment system (OPPS) and ambulatory surgical centers (ASCs) for CY 2013. The rule also updates Medicare quality reporting program policies and various other Medicare policies. Key provisions of the final rule include the following:

• The rule will increase 2013 OPPS rates by 1.8% compared to 2012 levels (although the impact on particular procedures will vary). This update reflects a hospital market basket increase of 2.6%, which is reduced under two Affordable Care Act (ACA) provisions – a 0.1 percentage point reduction and a 0.7% “multi-factor productivity” (MFP) adjustment/reduction. The OPPS update is subject to other adjustments, including a 2 percentage point reduction for hospitals that do not meet quality reporting requirements.
• Effective for 2013, CMS will determine OPPS relative weights using the geometric mean costs of services within an Ambulatory Payment Classification, rather than median costs. CMS expects this change will have a limited payment impact on most providers, but believes it better encompasses variations in costs and aligns with the inpatient PPS methodology.
• CMS will set OPPS payment for separately payable drugs and biologicals without pass-through status at average sales price (ASP) plus 6% (which it refers to as the “statutory default” rate), compared to the current ASP plus 4%. Notably, CMS will not make an adjustment for pharmacy overhead costs in 2013 to reflect the redistribution of package costs, as it had for 2010 through 2012. The final 2013 threshold for separate payment for outpatient drugs is a cost per day that exceeds $80, compared to $75 in 2012. CMS also adopted a special payment adjustment policy to account for the costs of radioisotopes derived from non-highly enriched uranium sources.
• With regard to ASC policy, CMS will increase ASC payment rates by 0.6%, which is derived from a 1.4% inflation update reduced by an MFP adjustment of -0.8%.
• The final rule makes refinements to several Medicare quality programs, including the Hospital Outpatient Quality Reporting Program, the ASC Quality Reporting Program, and the Inpatient Rehabilitation Facility Quality Reporting Program.
• CMS is clarifying the application of the supervision regulations to physical therapy, speech-language pathology, and occupational therapy services that are furnished in OPPS hospitals and critical access hospitals (CAHs). CMS also is extending nonenforcement of the requirement for direct supervision of outpatient therapeutic services furnished in CAHS and small rural hospitals with 100 or fewer beds for one final year through CY 2013 (CMS anticipates that this will be the final year of the extension).
• CMS adopted changes to the regulations regarding payment for new technology intraocular lens (NTIOLs) to require more stringent labeling and clinical outcomes evidence to support NTIOL applications.
• The final rule also addresses, among other things, payment for partial hospitalization services; revisions to the electronic reporting pilot for the Electronic Health Record Incentive Program; changes to regulations governing Quality Improvement Organizations (including the secure transmittal of electronic medical information, beneficiary complaint resolution, and notification processes); and a discussion of public comments related to potential changes to the Part A to Part B Rebilling Demonstration and hospital observation services policy.

CMS will accept comments on certain provisions, including payment classifications assigned to certain HCPCS codes and other specified provisions, until December 31, 2012.