In the Centers for Medicare & Medicaid Services’ (CMS) 2010 Hospital Outpatient Prospective Payment System (HOPPS) final rule, hospitals will receive a 2.1 percent inflation update for services furnished to Medicare beneficiaries in outpatient settings. However, the agency will reduce the update by 2 percentage points for hospitals that did not participate in quality data reporting for outpatient services or did not report the quality data successfully, resulting in a 0.1 percent update for those facilities.

CMS also announced that ambulatory surgical centers (ASCs) will receive a 1.2 percent inflation update beginning Jan. 1, 2010. The agency projects that the aggregate Medicare payments to more than 4,000 hospitals and community mental health centers in 2010 will be approximately $32.2 billion, while aggregate Medicare payments to approximately 5,000 ASCs will total $3.4 billion.

The general HOPPS payment methodology uses median costs based on claims data to set the relative payment weights for hospital outpatient services. To set the proposed HOPPS conversion factor for 2010, CMS increased the 2009 conversion factor of $66.06, to $67.41 for 2010.

The final rule, with comment period, implements provisions of the Medicare Improvements for Patients and Providers Act of 2008. This extends Medicare coverage to rehabilitative and educational services intended to improve the health of patients diagnosed with certain respiratory, cardiac and renal diseases. Beginning Jan. 1, 2010, hospitals will be able to bill Medicare for new pulmonary and intensive cardiac rehabilitation services furnished in hospital outpatient departments to Medicare beneficiaries.

The agency said it will continue to require Hospital Outpatient Department Quality Data Reporting Program (HOP QDRP) participating hospitals to report the existing seven emergency department and peri-operative care measures, as well as the four existing claims-based imaging efficiency measures for the 2011 payment determination.

Under this requirement, CMS will select a sample of reported cases, request the corresponding medical records, re-abstract the HOP QDRP chart-abstracted measures, and compare the results with the measures reported by the hospital. Hospitals will be required to return paper copies of requested medical records for this 2011 requirement within a 45-calendar day timeframe. However, the validation results will not affect a hospital’s 2011 OPPS payment. This initial validation requirement for 2011 will provide hospitals an opportunity to become familiar with the process for future years.

CMS also will phase in a new HOP QDRP validation requirement to ensure that hospitals are accurately reporting measures for chart-abstracted data. The agency said it had established procedures to make quality data collected under the HOP QDRP publicly available beginning with the third quarter of 2008.