ASHA Advocacy Nets Significant Increases in 2007 Outpatient Hospital Rates  

(09/12/06)

The Centers for Medicare and Medicaid Services (CMS) recently published proposed rates for services in hospital-based outpatient departments in 2007. The Medicare hospital Outpatient Prospective Payment System (OPPS) establishes payment rates for all services except speech-language pathology, physical therapy, and occupational therapy. Therapy services are paid under the Medicare Physician Fee Schedule. CMS proposes to increase most outpatient hospital audiology rates from 5.4% to 8.1%.

Most notably, ASHA is pleased that CMS acted to increase the payment for Evaluation of Central Auditory Function (CPT 92620) and Tinnitus Assessment (CPT 92625) by almost 300% to $76.74 for 2007 in response to detailed comments submitted to CMS in January 2005 regarding the low payment for the following procedures. CMS agreed with ASHA's view that these two procedures needed to be shifted to a different Ambulatory Payment Classification (APC)-from Level I Audiometry to Level II Audiometry.

ASHA is also pleased that CMS is proposing to increase the payment level of cochlear implantation (surgery + device) from $23,431 to $25,040. While this rate is still usually less than the full costs incurred by hospitals, it is a substantial improvement over the current rate. Understanding that the hospital's cost to charge ratio is critical to CMS cost estimates, we suspect that the problem with cochlear implants is that hospitals are reluctant to mark up very costly services to the same degree as less costly services. Hospitals will need to correct their charging practices for cochlear implantation if the payment for this service is to be increased substantially in the future.

For auditory osseointegrated implants (surgery + device), the proposed payment is $2,325 and would be a severe economic disincentive for hospitals because, according to the manufacturer of the Baha (bone-anchored hearing aid) device, the average total cost is approximately $8,800. Fortunately, CMS notified the manufacturer in August that the Baha is approved for "pass-through" status for new technology. Thus, a new Ambulatory Payment Classification (APC) will be assigned in a CMS transmittal before January 2007. Special new technology APCs are established because when such devices are added to the OPPS payment system, the rate may be low due to insufficient cost data.

Additional comments will be accepted by CMS on the 2007 OPPS rates through November 6, 2006. For further information, please contact Mark Kander, ASHA's Director of Health Care Regulatory Analysis, via e-mail at mkander@asha.org or by phone at 800-498-2071, ext. 4139.

Proposed 2007 & Current 2006 Comparison Rates