Strategic Reimbursement PART B PPS COST/BLENDED PRRB GROUP APPEAL

The Balanced Budget Act of 1997 (BBA) provided the statutory authority to CMS to implement an outpatient prospective payment system (OPPS) effective January 1, 1999. Lesser known is that as part of the BBA, Congress removed the statutory authority for the cost/fee-blended reimbursement formula for ambulatory surgery, radiology, and other diagnostic services that had been in effect since 1987. Since CMS was unable to implement OPPS until August 1, 2000, it continued to reimburse hospitals using the cost/fee-blended reimbursement formula. However, with the sunset of the statutory authority for the cost/fee-blended reimbursement formula on January 1, 1999, it is our belief that outpatient Medicare reimbursement should have defaulted to the cost-based reimbursement formula until APC reimbursement was implemented. For many hospitals, this issue is likely to involve a significant amount of additional outpatient Medicare reimbursement. The cost reporting periods impacted by this issue are those including the months from January 1, 1999 through July 31, 2000.

Strategic Reimbursement has formed a group appeal on this issue. The group is represented by Charles F. MacKelvie of The MacKelvie Law Firm and Michael Anderson of Axley Brynelson, LLP. Though we and our legal counsel believe there are strong legal arguments for this issue, we fully expect CMS will continue to contest this issue as far and as long as it can. Thus, in all probability, this issue will eventually be settled by the courts and not by the PRRB.

As part of our service to our clients, Strategic Reimbursement included this issue in a request for hearing to the Provider Reimbursement Review Board (PRRB) for any of the above cost reporting periods which have received a Notice Program Reimbursement (NPR). The Group Appeal still remains open, however, for any other hospital to join.

If you would like more information, or are interested in joining this appeal, please contact either Robert Gienko, President, at (630) 530-7100, or Mark Pugh, Vice-President, at (303) 471-4995.