Hospital Outpatient Prospective Payment

We are reaching out today to provide an overview of the recently published 2014 Outpatient Hospital Prospective Payment System Final Rule. Sonosite is committed to not only producing innovative and dynamic equipment but also to be your partner and resource during these changing times in healthcare. We see many advantages for ultrasound used at the point of care in the future of healthcare policy as payments are determined based on the delivery of high quality and cost effective services. Ultrasound is a technology that absolutely lends itself to this paradigm shift.

On Wednesday, November 27th, the Centers for Medicare and Medicaid Services (CMS) released the final rule for the CY 2014 Hospital Outpatient Prospective Payment System (OPPS), updating payment policies and payment rates for services furnished to Medicare beneficiaries in hospital outpatient departments and ambulatory surgical centers (ASCs) beginning Jan. 1, 2014.

I am pleased to report that the policies proposed by CMS for CY 2014 for hospital outpatient payment, specifically for care in emergency rooms that involved the use of ultrasound as part of the diagnostic process, were not finalized.

CMS did not finalize the proposal to collapse Type A and Type B emergency department (ED) visit codes from the current five levels of codes into a single code, with the payment rate based on the total mean costs of Levels 1 through 5 emergency department visit codes using CY 2012 outpatient PPS claims data.

While CMS will package the payment for five of seven proposed supporting items and services: certain clinical diagnostic laboratory tests; drugs, biologicals, and radiopharmaceuticals that function as supplies when used in a diagnostic test or procedure; drugs and biologicals that function as supplies or devices in a surgical procedure; procedures described by add-­‐on codes; and device removal procedures.

CMS did not finalize the proposal to package certain ancillary services and diagnostic tests on the bypass list. Numerous ultrasound procedures would have been packaged and not paid separately in hospital outpatient or emergency departments, if CMS had finalized this expansion of packaging as proposed. This is significant and very positive outcome for all the great work conducted by all stakeholders during the comment period.

With about 50 percent of hospital patients get their initial care in the emergency department, where performing a diagnostic ultrasound procedure at the bedside as the first diagnostic test helps save both money and lives, the decisions made by CMS in the 2014 Final Medicare OPPS Rule demonstrate how our nation’s healthcare system is starting to understand the need to preserve and enhance this practice.

As we all know, diagnostic ultrasound procedures have become an enormously important tool in emergency medicine, given that 38 million patients a year are evaluated in emergency departments for trauma, which ranks as the top cause of death in patients under age 45. This is one of the reasons that Sonosite worked with our Emergency Physician partners to comment and encourage CMS to not move forward on these proposals. We are pleased with the outcome and look forward to continuing our work together on these important healthcare policy issues.


Kevin M. Goodwin
President and CEO