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CMS Proposes Increased Payment for Pulmonary Rehabilitation in Hospital Outpatient Settings

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July 9, 2010

CMS’ proposed rules on the 2011 update to the Hospital Outpatient Prospective Payment System (HOPPS) are on display at the Federal Register and are expected to be published August 3, 2010. A link to the proposed rules can be found at (Page numbers below will refer to this document.)

A quick glance at the rules indicate several provisions that may be, or are of interest to our members. A thorough analysis and review will be ongoing. Comments are due to CMS by August 31, 2010.

  • Pulmonary Rehabilitation (pages 118-120): CMS is proposing to use the same methodology it used last year to calculate the median cost for pulmonary rehabilitation (PR) services on which the proposed payment for CY2011 will be based. This results in an increased payment for hospital outpatient PR. The proposed rate for CY 2011 is $68, versus approximately $50 in CY 2010.
  • Critical Access Hospitals (CAH) (pages 445-446): After the final pulmonary rules were published that went into effect January 1, 2010, there were questions raised as to whether a CAH outpatient department is a covered setting for pulmonary rehabilitation services because the law did not specifically define CAHs as hospitals for this benefit. In the 2011 HOPPS proposed rules, CMS clarifies that a CAH outpatient department is considered a covered setting as long as all the regulatory requirements are met, including direct supervision of all services by a physician.
  • Physician Supervision (pages 402-412): CMS engages in a lengthy discussion of physician supervision and reiterates its previous rulemaking policies and rationale for decisions leading up to last year’s regulations. This is all in the context of questions as to whether CAHs are subject to the direct supervision requirements as noted in last year’s final rule. As stated above, CMS expects CAHs to provide direct supervision under the same rules that apply to hospitals. While the Conditions of Participation (COPs) for CAHs would imply that direct supervision is not the same as other hospitals, CMS concludes that payment requirements differ from requirements under COPs for many providers, and the minimum requirements set in the COPs are not always adequate to address issues such as quality and safety and other requirements for payment for a service or group of services.
  • Hyperbaric Oxygen Therapy (pages 115-116): According to CMS, they have used the same methodology for the past 5 years to estimate the median cost for Hyperbaric Oxygen Therapy and that methodology has been relatively stable. Therefore, they will continue to use the same approach for CY 2011 which results in a proposed Ambulatory Payment Classification (APC) median cost of approximately $109.