[See correction to this update]
NEW MEDICARE REIMBURSEMENT ISSUES
Three issues in Medicare reimbursement have recently come to our attention. First, Representatives from the House Ways and Means Committee requested a delay in the implementation of changes to the reimbursement rates for "pass-through" items. Chair William Thomas, and Representatives Nancy Johnson and "Pete" Stark signed a letter July 23, 2001 requesting the Centers for Medicare and Medicaid Services (CMS, formerly HCFA) to delay by three months any update to "pass-through" reimbursement rates for new drugs, biologics, and devices reimbursed through the Hospital Outpatient Prospective Payment System ("HOPPS"). For example, the catheter used in trans-urethral microwave therapy ("TUMT") is reimbursed when used in an outpatient setting (but not when used in-office) under the "pass-through" system. This "pass-through" system, mandated by the Balanced Budget Refinement Act of 1999 to last at least 2 years, was designed to reimburse new technologies by drawing on a separate pool of federal funds. Delaying changes to the "pass-through" rates effectively extends the system's lifespan, meaning that some drugs, devices and biologics, will be reimbursed at "pass-through" rates. "Pass-through" rates are often higher than standard HOPPS rates. The Representatives' letter also requested that CMS accelerate the process of folding "pass-through" payments into the base rate, change the payment method for "pass-throughs" to better reflect acquisition costs, and phase out outlier payments. Each of these steps could be detrimental to device manufacturers because they would reduce the amount of funds available under the HOPPS to help reimburse the cost of new items.
Please note that non-facility rates have not been included even though they have also changed. We are aware of no requests for reimbursement in-office (and therefore, under the non-facility rate) for lithotripsy because that reimbursement rate is so low. Also, as federal law requires that the Physician Fee Schedule Final Rule must be promulgated by the end of the calendar year, we expect to see an update in November of 2001.
If you have any questions, please contact:
Visit us again to receive up-to-the-minute reports on major issues such as the Health Care Finance Administration's (HCFA) proposed implementation of the Stark II (Physician Ownership) regulations and HCFA's proposed rates for lithotripsy performed in/out patient and ambulatory surgical center settings.
For additional information contact, Wesley E. Harrington, CAE, Executive Director of ALS at:
American Lithotripsy Society
305 Second Avenue, Suite 200
Waltham, Massachusetts 02451
Telephone: (781) 895-9098
Fax: (781) 895-9088
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