Despite criticism from hospitals and doctors, the CMS intends to pay flat rates for Medicare visits to outpatient clinics instead of payments that vary with the severity of the patient's condition. However, the agency decided not to enact a similar policy for emergency-room visits—at least for the time being.
The 1,200-page outpatient prospective payment system rule for 2014, posted the Wednesday afternoon before Thanksgiving, says the agency is changing its longstanding approach to paying for clinic visits because of a widespread concern that the old system encourages upcoding.
The rule means that the 10 procedure codes for outpatient clinic visits will all fall under a single code. “A single code and payment for clinic visits is more administratively simple for hospitals and better reflects hospital resources involved in supporting an outpatient visit,” an agency news release said.
The new payment rates will be calculated based on statistical averages of 2012 claims data for the five levels of severity.
Critics argue that moving away from the five-level system contradicts the central notion of Medicare's severity-based payment system. CMS officials said the variation in costs between high- and low-complexity patients in clinics wasn't significant enough to justify the payment differences.
However, the CMS did step back from its proposal to flatten the payment rates for emergency room treatments, noting in the rule that more study is needed to make sure the payment structure “would not underrepresent resources required to treat the most complex patients, such as trauma patients.”
The American Hospital Association said the move to a flat system of outpatient clinic payments will hurt hospitals' ability to provide outpatient care. “Hospitals that provide care for large numbers of complex patients will receive payment well below the cost of treating these patients,” the AHA said in a statement.