HCFA's prospective payment system for hospital outpatient services (HOPPS) - 2/99 SVT Views

On Friday, 26 February 1999, SVT presented the associations' views on the 8 September 1998 Notice of Proposed Rulemaking released by HCFA regarding the prospective payment system for hospital outpatient services ("HOPPS"). SVT believes that several provisions of the proposed rule threaten the ability of providers to make ultrasound services available to the Medicare population.
The association's concerns were expressed by Frank West, BSN RN RVT CVN FSVU, and Anne Jones, RN BSN RVT RDMS FSVU, with Bill Sarraille, of Arent Fox Kintner Plotkin & Kahn, PLLC, legal counsel. The Society of Diagnostic Medical Sonographers (SDMS) joined SVT in making these comments. Laurinda Andrist represented SDMS at the meeting. The concerns center around the way ultrasound procedures have been classified and the methodology used to determine reimbursement rates.
HCFA has proposed using ambulatory payment classifications (APCs) to organize the services to be paid for outpatient services. Under the proposed system, services are classified into five APCs, largely according the anatomy being studied rather than the clinical resources involved. HCFA relied on "single-procedure bills" to determine the typical charges, and therefore the reimbursements, for ultrasound services.
SVT presented HCFA staff with common clinical examples whereby patients suffering from more complicated or clinically acute diagnoses undergo more than one treatment or procedure on a given date of service (eg., complete obstetric ultrasound and fetal echocardiogram for pregnant women with insulin-dependent diabetes), requiring significantly more technologist time, clinical expertise, and health care resources that are not captured by the single-procedure methodology.
In this discussion, SVT introduced the concepts underlying the rest of its proposal: SVT proposed that HCFA reclassify the ultrasound procedures using clinical similarities of the studies and resource utilization (equipment, training, time) as the criteria for classification. SVT proposed that the APCs be arranged in four groupings:
A - Maximum Resource Utilization for those ultrasound procedures that require substantially more professional time and technical skill due to a combination of the technical complexity of the study and often high clinical acuity of the patients in need of these services (eg., ultrasounic guided compression pseudo-aneurysm and transesophageal ultrasonograhy)
B - High Resource Utilization for lengthier, "complete" studies, as well as certain specialized, interventional procedures
C - Mid Resource Utilization for the REMAINDER of ultrasound procedures, particularly limited and follow up studies
D -Low Resource Utilization for studies that take generally only 5 to 20 minutes to perform

SVT proposed reimbursement rates for each of these four APCs according to the existing proposed APC payment, or in some cases, by reference to the resource-based practice expense relative value units (PERVUs), which is supported by the findings of the 1993 study by Fillinger et al. on "Vascular Laboratory Cost Analysis and the Impact of the Resource-based Relative Value Scale Payment System." (17 J. Vascular Surgery 267 (1993)). In doing so, SVT argued that the "single-bill" methodology had incorrectly led HCFA to propose to reimburse compete studies at the same level as limited studies, even though complete studies take, on average, twice as long as limited studies to perform. SVT's opposition to the methodology used by HCFA is based on the fact that it has resulted in disparity in payment on both the high and low end.
SVT strongly addressed the issue of supervision of vascular ultrasound testing, arguing that general physician supervision, not direct supervision, is appropriate. Reimbursement under Part B is likely to require only general supervision in recognition of the fact that direct supervision is not required to improve testing quality. SVT encouraged HCFA to require that hospitals either be required to use certified technologists or sonographers or have their laboratories accredited as part of the prospective payment system for hospital outpatient services

SVT also presented the following positions:

• opposition to the proposed 10% reduction in the conversion factor as a behavioral offset; while such an anticipated decrease in revenues has been seen to be effective in changing physician practice/billing patterns (that are a response to planned reductions), it cannot have the same effect on providers of ultrasound services, who do not order studies but perform those that are ordered by others.
• support for the National Correct Coding Initiative and opposition to the establishment of a sustainable growth rate system
• recommendation that recalibration of the APC relative weights occur more frequently than every five years to ensure that Medicare beneficiaries not be denied improvements in patient care that result from innovative technology and improved procedures
• recommendation that hospital outpatient departments not be allowed to advertise reduced beneficiary co-payments for outpatient services; dissemination of information as provided for in the balanced Budget Act is not the same as advertising
• support for HCFA's proposal to eliminate the "bundling" regulations for hospital outpatient services that could prevent free-standing imaging centers from operating on hospital campuses

The HCFA staff appeared very receptive to most of these presentations, especially regarding the need to reclassify services by complexity and resource utilization rather than by anatomical structure being studied and the problems caused by classifying complete and limited studies under one reimbursement rate. There was some opposition expressed regarding the methodology SVT used to determine reimbursement rates, however, and some disagreement about the resources required for specific procedures. HCFA also was very receptive to the general supervision argument.
The comment period for this proposed rule has been extended to 30 June, and additional action may be required.