CMS should drop its proposal to cap reimbursement for outpatient placement of cardiac resynchronization therapy leads along with an implantable cardioverter defibrillator, device manufacturers and providers say.

To help provide more payment stability and predictability, the Medicare agency in its draft 2012 hospital outpatient prospective payment system rule proposed creating a composite CRT-D payment category combining categories for ICD and left-ventricular pacing electrode placement.

Companies and providers generally support this move. But they take serious issue with CMS’s planned next step. Based on historical outpatient data, the composite payment rate would have been significantly higher than 2012 Medicare reimbursement for similar procedures conducted in the inpatient setting. To avoid creating an inappropriate incentive to perform the procedure in the outpatient setting, the agency says it wants to cap the new outpatient CRT-D composite at the hospital inpatient rate. (See “ Also see "CMS In Brief" - Medtech Insight, 11 July, 2011. ” – “The Gray Sheet” July 11, 2011.)

This would reduce outpatient CRT-D reimbursement by about 30% compared to 2011. More troubling to critics is that the cap creates a “dangerous” precedent of basing outpatient reimbursement on anything other than prior outpatient claims data.

Comments: Policy Unprecedented And Unjustified

“Making this unprecedented change would create uncertainty about future reimbursement rates, discouraging investment in new technologies,” writes the Medical Device Manufacturers Association in Aug. 30 comments to CMS on the outpatient proposal.

The American Hospital Association says in Aug. 29 comments it is “not convinced that CMS has adequately justified its rationale for this precedent-setting proposal,” and has not provided any substantive evidence that outpatient CRT and ICD procedures would include far fewer items and services than are provided in the inpatient setting.

“For years, CMS has upheld the principle of setting [ambulatory payment classification] payment rates based on the outpatient claims data, and the agency has worked very hard to improve the overall quality of the claims data used to set the rates,” hospital group purchasing organization Premier writes in Aug. 25 comments. CMS should not shift from that approach now, the group argues.

“The concept of a payment cap based on the [inpatient system] represents a sudden and substantial departure from CMS’s standard payment policy, introducing a significant level of uncertainty and unpredictability for stakeholders,” agrees trade group AdvaMed in Aug. 29 comments.

If CMS is not able to set a rate for the new composite category using outpatient claims data, AdvaMed argues, “the agency should terminate the proposal to create the new composite category and restore the previous code structure and rate-setting practice for CRT-D and ICD implantation procedures in the final rule.”

The Heart Rhythm Society warns in Aug. 30 comments that blending the outpatient and inpatient payment methodologies to establish the outpatient composite rate “would create an impossible scenario for determining the resources and related costs of providing cardiac resynchronization therapy device implant services.”

“In addition,” HRS continues, “applying this approach to one specific type of service raises significant concerns about how payments for these services could be evaluated in the future.”

HRS urges CMS to reconsider its proposal “to implement fragmented updates to specific services.”

“Rather, if CMS chooses to blend the OPPS and IPPS methodologies, this change should occur through the rule-making process,” the electrophysiology society writes.

The influential Medicare Payment Advisory Commission, meanwhile, endorsed the proposed composite payment category, but makes no mention of the rate cap in its Aug. 30 comments.

CMS plans to finalize its 2012 outpatient payment rule by Nov. 1, and the rule would take effect Jan. 1, 2012.

By Monica Hogan

Industry Decries Payment Cap In CMS Outpatient Composite CRT-D Proposal

More from Archive

More from Medtech Insight