HCFA is considering whether to rewrite the eligibility regulations to expand the types of facilities that qualify for higher payments under Medicare's outpatient prospective payment system.
Hospital-owned surgery centers, physician offices and clinics that are not on the hospital's main campus could benefit financially if HCFA does rewrite the eligibility regulations, which were included in the final set of outpatient PPS regulations in the April 7 Federal Register.
Under the eligibility regulations, which take effect Oct. 10, the PPS is understood to apply to hospital outpatient departments within the walls of a hospital.
Claiming the requirements for off-site facilities are unclear, seven hospital groups have formally asked HCFA to rewrite--and therefore delay--the so-called "provider-based designation rule."
It's their third attempt to stall PPS' implementation, which went into effect Aug. 1 after an initial 30-day delay.
"Even though the provider-based criteria are slated to be effective in less than two months, a number of issues remain unsolved," the groups wrote in an Aug. 25 letter to HCFA Administrator Nancy-Ann Min DeParle. "We believe that (a delay) is essential."
Medicare outpatient payment policies depend on whether a facility is provider-based, such as a hospital outpatient department, or freestanding, such as an ambulatory surgery center. Hospitals want their satellite facilities to qualify as provider-based because the PPS pays provider-based organizations more.
"It's important that we be on solid ground regulatorily, for whatever we do, especially in this era of vigorous enforcement," said Ed Goodman, vice president of public policy for VHA, an Irving, Texas-based alliance of not-for-profit hospitals. VHA signed the letter.
Also signing the letter were officials from the American Hospital Association, the Association of American Medical Colleges, the Catholic Health Association, the Federation of American Hospitals, Premier and the National Association of Public Hospitals and Health Systems.
The Alexandria, Va.-based Federated Ambulatory Surgery Association, which represents independent surgery centers, is competing with hospitals for better outpatient PPS reimbursement.
"Even though HCFA talks about leveling the playing field, Medicare will continue to pay (ambulatory surgery centers) less than hospitals well into the future," FASA President Robert Williams said in a written statement late last month. The association wants HCFA to collect more data on surgery centers' costs so that Medicare payments more accurately reflect those expenses.
Hospital groups successfully delayed the implementation of the PPS, winning an initial one-month delay by pointing out glitches in the PPS billing software. Their second effort at postponing the PPS failed.
Stressing HCFA's willingness to work with and be helpful to hospitals regarding the outpatient PPS, a HCFA spokesman said the agency received the letter and is considering the request.
Larry Oday, a healthcare attorney for Vinson & Elkins in Washington, said the Oct. 10 deadline was set by HCFA, not written by Congress. That means it would be easier for HCFA to comply with the hospitals' request.