Here’s the bad news from hospital PPS rule
The publication of the final hospital outpatient prospective payment system (PPS) rule wasn’t all good news, according to same-day surgery experts. Some procedures retained their "inpatient only" label and won’t be covered under the new outpatient system. (See list, below.)
The list of noncovered procedures is fairly extensive, says Robert T. Langston, partner with KPMG in Costa Mesa, CA. "It’s somewhat problematic," he says, pointing out that same-day surgery providers are known for using cutting-edge technologies.
In the final rule, published in the April 7 Federal Register, the Health Care Financing Administration (HCFA) explained why some procedures are not covered. "Our medical advisors and staff, as well as consulting physicians, believe these procedures are too invasive [for example, thoracotomies], too extensive [for example, breast reconstruction with myocutaneous flaps], or too risky by virtue of proximity to major organs [for example, repairs of spinal fluid leaks and carinal reconstruction] to be performed on an outpatient basis."
Also in the "bad news" category: Same-day surgery managers face a July 1 implementation date. Hospital-based surgery centers need to immediately obtain a determination from HCFA that they’re indeed provider-based, says Eric Zimmerman, JD, an associate with the law firm of McDermott, Will, and Emery in Washington, DC.
"Our message to our clients is to investigate this immediately because there will be a backlog at their intermediary in processing requests," Zimmerman says.
Usually it’s more lucrative for providers to have this designation than to be reimbursed as a freestanding surgery center, he says.
Langston suggests managers look closely at the new payment rates in order to prepare. "People need to think, from an operational standpoint, what service they’re providing and whether APC rates will compensate them in the same way as tiered payments, and if there’s a loss, how will they adjust from an operational strategy and a business planning perspective," he advises.
| Procedures that Won't Be Paid Under APCs |
| - Breast reconstruction using myocutaneous flaps |
| - Radical resections of tumors of the mandible |
| - Open treatment of certain craniofacial fractures |
| - Osteotomies of the femur and tibia |
| - Sinus endoscopy with repair of cerebrospinal fluid leaks |
| - Carinal reconstruction |
| - Surgical thoracoscopies |
| - Pacemaker procedures by thoracotomy |
| - Certain thromboendarterectomies |
| - Excision of mediastinal cysts and tumors |
| - Excisions of stomach tumors |
| - Enterostomies |
| - Hepatotomies |
| - Ureterotomies and ureteral endoscopies through ureterotomies |
| - Transcranial approaches to the orbit |
| - Laminectomies |
| Procedures Added to APC Reimbursement |
| - Laparoscopies, including cholecystectomies |
| - Planned tracheostomies |
| - Diagnostic thoracoscopies |
| - Some insertion/removal/replacement of pacemakers |
| - Pulse generators, electrodes and cardioverter-defibrillators |
| - Embolectomies and thrombectomies |
| - Transluminal balloon angioplasty and peripheral atherectomy |
| - Transcatheter therapies |
| - Bone marrow transplantation |
| - Gastrostomies |
| - Percutaneous nephrostolithotomy |
| - Ovarian biopsies |
| - Surgeries on the orbit |
For more information, contact:
• Robert T. Langston, Partner, KPMG, 650 Town Center Drive, Suite 1000, Costa Mesa, CA 92626. Telephone: (714) 850-4371. Fax: (714) 850-4488. E-mail: rlangston@kpmg,com.
For information related to the determination of provider-based status, contact:
• George Morey, Health Care Financing Administration. Telephone: (410) 786-4653.
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