CMS to Delay 2002 Medicare Outpatient Rates

CMS has announced that it will delay the implementation of 2002 Medicare hospital reimbursement rates for outpatient services until April 1 and will continue to reimburse hospitals at 2001 rates in the meantime, the Wall Street Journal reports. The agency blamed the delay on "miscalculations in assessing the costs of medical services" (Wall Street Journal, 12/19). CMS had proposed delaying the processing of all 2002 Medicare outpatient claims, an estimated 20 million, for the first three months of 2002 because the new Outpatient Coding Editor software would not be ready, leaving the agency uncertain of what to pay hospitals for a given outpatient service. Hospital groups had criticized the processing delay plan, saying it would cause great confusion and financial hardship for many medical institutions, and the Journal reported Monday that the agency would likely "scrap" the plan and instead seek only a delay in new rates (California Healthline). The Journal reports that the miscalculations claim provides CMS with the "legal loophole" necessary to delay the new rates. CMS Administrator Tom Scully said, "I expect this to be a one time glitch in the system" (Wall Street Journal, 12/19).