On November 1, the Centers for Medicare & Medicaid Services released its final rule with comment period updating the hospital Outpatient Prospective Payment System (OPPS) for calendar year 2008. The final rule also updates the payment rates for the revised ambulatory surgical center (ASC) payment system, beginning in CY 2008.

After taking into account the market basket update and other factors that affect the level of payments, CMS estimates hospitals will receive an overall average increase of 3.8% in Medicare payments for outpatient services

CMS also will require public reporting of seven hospital outpatient quality measures to receive a full market basket update in CY 2009. The agency will expand the size of the outpatient payment package by incorporating into the payment for the main procedure the costs of guidance services, image processing services, interoperative services, imaging supervision and interpretation services, diagnostic radiopharmaceuticals, contrast agents and observation services.

In addition, Medicare payment and beneficiary liability for certain device-dependent APC groups will be reduced when a hospital received a substantial partial credit from the manufacturer toward the cost of a replacement device implanted during a procedure. This parallels the inpatient hospital policy and extends the current OPPS payment reduction policy when a hospital replaces an implantable device without cost.

The outpatient rule also includes an interim final rule with comment period that modifies the regulations for emergency Medicare graduate medical education to provide continuing relief to home and host hospitals affected by disruptions in residency programs in the emergency areas declared after hurricanes Katrina and Rita.

Also included in the final rule is a reduction to the inpatient prospective payment system's "behavioral offset" to 0.6% from 1.2%, as required by Congress.

The final rule, effective for services on or after January 1, 2008, is on display and will be published in the Federal Register on November 27, 2007. The rule can be found at http://www.cms.hhs.gov/HospitalOutpatientPPS/Downloads/cms1392fc.pdf.