The CMS announced it is increasing payments for outpatient department services by an aggregate 4.5% for 2004. The agency's final rule was higher than an initial projection of a 3.8% increase. An across-the-board reduction in temporary additional payments for drugs, biologicals and medical devices, known as pass-through payments, will not happen because the CMS does not anticipate pass-through spending to exceed more than 2% of outpatient prospective payment spending for 2004. The CMS also is creating separate ambulatory payment classifications for drugs and biologicals with median costs at or above $50 and is setting payment rates for drugs and biologicals based on hospital cost data. The final rule will be published in the Federal Register on Nov. 7 and takes effect Jan. 1.
Coding plan costly-Blues
A Blue Cross and Blue Shield Association report concluded that the healthcare industry would have to absorb up to $14 billion in implementation costs to move to a proposed new coding system called ICD-10-CM. The report estimated that total spending over a two- to three-year period could exceed the expense of the Y2K conversion and would cause a large-scale disruption. The report comes at the same time as a recommendation in favor of the coding shift by a subcommittee of the National Committee on Vital and Health Statistics, an advisory body to HHS. The recommendation is slated to go to the full committee for a vote this week.
Cigna, Aetna earnings rise
Cigna Corp., Philadelphia, returned to profitability in the third quarter after getting a grip on medical costs. Cigna earned $195 million, or $1.39 per share, during the period, compared with a net loss of $877 million, or $6.27 per share, in the year-ago period. Revenue fell 6% to $4.8 billion. Aetna, Hartford, Conn., saw its third-quarter profits more than double as it raised premiums and continued to cut costs. Net income hit $215.9 million, or $1.35 per share, up from $98.8 million, or 64 cents per share, in the year-ago period. Revenue dipped 7.5% to $4.47 billion, reflecting a 7% membership drop.