CMS announces payment increase and fee schedules

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The Centers for Medicare & Medicaid Services (CMS) have issued a final rule updating rates to hospitals under the outpatient prospective payment system (OPPS) that would increase aggregate payments to outpatient departments by approximately 5 percent.

 CMS also announced a final rule to update payment rates under the physician fee schedule for 2004.

 Payments for clinic and emergency department visits would increase under the 2004 OPPS update, as would payments for preventive health services such as screening mammography and colonoscopy.

 CMS projects that total payments to hospitals under the OPPS will be approximately $22.8 billion in 2004. These rates are based on actual hospitals costs derived from 2002 claims for out patient services.

 The fee schedule contains payment rates for physicians and other providers for more than 7,000 healthcare services and procedures. In calendar year 2004, Medicare is expected to pay approximately $48.8 billion to 900,000 physicians and medical professionals for services paid under the fee schedule, up from $48 billion in 2003.

 The physician fee schedule is updated on an annual basis according to a formula specified by statute that is intended to control the rate of growth in spending for physician services. The formula requires CMS to adjust the update up or down depending on how actual expenditures compare to sustainable growth rate (SGR).